World Markets Simplified

• Sudden Death Linked to Pfizer Inc. (PFE)'s Popular Antibiotic More...

Thought: Rating agencies are working to help markets finding more downside, as Downgrade only comes when markets are in gloomy outlook. They just add up the reason to sell off. Why they can't act when markets were sailing higher a few weeks ago?

Real Estate Collapse
Doubts about the health of Spain’s banking system have helped drive up the country’s borrowing costs on concern it will struggle to cover losses caused by a real estate collapse that threatens to force some lenders to seek state aid. The yield on 10-year Spanish government debt climbed 2 basis points to 6.31 percent yesterday as the spread over German bunds widened to 490 basis points from 482 basis points.

A four-year property slump has driven up loan defaults and heightened investor suspicions that firms’ balance sheets don’t fully reflect the scale of potential losses. The nation’s lenders carry 184 billion euros ($234 billion) of what the Bank of Spain terms “problematic” real estate-linked assets and the ratio of bad loans to total lending surged to 8.16 percent in February compared with less than 1 percent in 2007.

“If you look at the reported numbers so far, you don’t see that much deterioration on residential mortgages or on non- commercial real estate corporates and SMEs,” said Johannes Wassenberg, a managing director at Moody’s covering European banks. “If you look at the renewed recession you have in Spain and the very high unemployment rate, in our view that’s likely to have a knock-on impact on these broader asset classes.”
Swaps Rise

Credit-default swaps insuring Santander’s debt against default rose 10 basis points to 446.4 basis points on May 17 before the downgrade, according to data provider CMA. The swaps have risen 89 basis points this year, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

Santander’s 1 billion euro of 4 percent notes due 2017 were yielding 5.342 percent as of 9:18 a.m. in Singapore, up from 4.171 percent in March when they were sold, BNP Paribas SA prices show.

The government, in its latest attempt to bolster confidence in banks, said on May 11 it would require lenders to set aside about 30 billion euros to cover potential losses on real estate loans that are still performing.

That’s on top of 53.8 billion euros of charges and capital ordered in February. Economy Minister Luis de Guindos also said the government would hire two auditors to value lenders’ assets.

The ratings under review are “by and large” related to mergers, Wassenberg said.
‘Clarity’ on Mergers

“We need to see further clarity on each individual case, how the mergers are proceeding, how they’re concluded, what kind of support, if any, they will be incorporating,” he said.

The government on May 9 took over the Bankia (BKIA) group, the lender with the biggest Spanish asset base after it filed 2011 earnings without certification from auditors. Deputy Economy Minister Fernando Jimenez Latorre yesterday denied deposits were leaking from Bankia after El Mundo newspaper reported that 1 billion euros had been withdrawn by customers since May 9. Bankia’s newly appointed chairman, Jose Ignacio Goirigolzarri, said yesterday that the bank’s activity had been “basically normal” in recent days.

Moody’s on Feb. 13 cut the debt ratings of Spain and five other countries including Italy and Portugal, citing Europe’s debt crisis. On April 30, Standard & Poor’s cut its credit ratings for 11 Spanish banks, including Santander and BBVA.

Swaps insuring BBVA’s debt against default reached 491.285 basis points on May 17, the highest in at least eight years, CMA prices show. The bank’s 2 billion euro of 3 percent notes due 2013 were yielding 3.735 percent as of 9:15 a.m. in Singapore, the most since the securities were sold on February 7, BNP Paribas prices show.

Kayak IPO Expected In Coming Weeks

Google's social collaboration service, Schemer, is now available for iOS operating system based devices like iPhone and iPad. Schemer, which was launched last year, is a social service that allows users to create schemes and let others join it.

The Schemer service allows users to find out or explore both popular and not so popular places along with recommendations as well if any. Schemer will even suggest the perfect scheme for the moment, for example watching a movie on a rainy day or brunch for a weekend morning.

Users can also discover new places and share with their friends or better still make a scheme of things that they wish to do over the day or the nearing weekend as well. Users can leave recommendations for newbies to discover or maybe an ultimate spot to hangout.

For India, Google has tied up with popular services and recommendations engines like 'Time Out' to provide out of the box solutions to the users. Looking at the future, we expect lot more such services to be included in Schemer.

For iOS users, Google has integrated the Google+ services within the new application and users will now be able to use their Google + profiles for using this service. This will further benefit the users as they will be able to add all the people in their circles and start scheming with them in no time.

Facebook's IPO price range is now final, and there will be no amendments to it on Thursday, a source tells CNBC.

This means that the company and its underwriters will be working with its current price range of $34 to $38.

Under the U.S. Securities and Exchange Commission's rules, Facebook can still price up to 20 percent above that range with $45 representing an absolute maximum.

The company is expected to price its IPO on Thursday and begin trading on Friday.

Minority babies outnumbered white newborns in 2011 for the first time in U.S. history, the latest milestone in a demographic shift that’s transforming the nation.

The percentage of white newborns fell to 49.6 percent of children younger than a year old from April 2010 to July 2011, the U.S. Census Bureau said today.

The trend is likely to have a far-reaching impact on the country’s political alignment, the nature of its workforce and on its economic future. Predominantly white, older enclaves in the Northeast and Midwest will increasingly rely on an expanding population of young Asians and Hispanics in the West and Sun Belt to support Social Security and other retirement programs.

“This is a fundamental tipping point signaling a change in our demographic structure for decades to come,” William Frey, a demographer and senior fellow at the Brookings Institution in Washington, said in an e-mail.

The figures highlight the rapid growth in the Hispanic and Asian populations, both of which have surged by more than 40 percent since 2000. Hispanics were 16.7 percent of the population in July 2011 and Asians were 4.8 percent. The black population has grown 12.9 percent since 2000 and makes up 12.3 percent of the nation. Non-Hispanic whites rose only 1.5 percent from 2000 to 2011, slower than the national growth of 9.7 percent, and are now 63.4 percent of the population.
Becoming a Minority

Four states -- Hawaii, California, New Mexico and Texas, plus the District of Columbia -- now have majority-minority populations.

A 2009 Census report estimated that non-Hispanic whites will become a minority of the total population after the 2040 Census, making up 48.5 percent in 2045. The government plans to release revised projections later this year, said Alexa Jones- Puthoff, chief of the bureau’s population estimates branch.

The Hispanic growth rate is being driven more by native births than immigration, according to the Pew Hispanic Center, which reported last month that the net migration from Mexico to the U.S. has stopped and may be reversing. The growth of Latino residents is the result of a younger population and higher fertility rates, said Jeffrey Passel, senior demographer for the Washington-based center.

“The younger the age group, the less white it is,” he said.

Viacom Inc. (VIAB), the owner of MTV, Comedy Central and the Paramount film studio, agreed to resolve a legal dispute with Time Warner Cable Inc. (TWC), allowing cable customers to see Viacom shows on devices such as Apple Inc. (AAPL)’s iPad.

“All of Viacom’s programming will now be available to Time Warner Cable subscribers for in-home viewing via Internet protocol-enabled devices such as iPads,” the companies said yesterday in a joint statement posted on Viacom’s website. Time Warner Cable won’t be paying more to stream shows on the gadgets, according to two people familiar with the matter who asked not to be identified because the terms are private.

Viacom sued in 2011, seeking an order blocking Time Warner Cable from distributing Viacom programming on portable electronics. Time Warner Cable also sued, seeking a ruling from the court that its contract with Viacom allowed the distribution of content on the devices.

The case underscored tensions between media companies and pay-television providers over how television content can be used in the iPad era. Consumers are increasingly watching TV on computers, tablets and other mobile devices, and cable companies are eager to accommodate them.

Last August, Viacom resolved a similar lawsuit against Cablevision Systems Corp. (CVC), which had been distributing Viacom’s programming on the iPad. The companies said Cablevision could continue to run Viacom’s programs on the devices.

Shares of Viacom, based in New York, rose less than 1 percent to $47.25 yesterday. Time Warner Cable climbed less than a 1 percent as well, to $76.35.

Fees Rise

Viacom, controlled by Chairman Sumner Redstone, reported better-than-anticipated profit last quarter on increased fees from pay-TV operators. The company’s media networks unit, which contributed 92 percent of operating profit in fiscal 2011, saw a 15 percent increase in domestic fees for its cable networks. U.S. ad sales rose 1 percent from a year earlier, following a 3 percent decline in the previous quarter.

Time Warner Cable also settled a dispute over Viacom’s Country Music Television. The cable provider will continue to carry the channel, the companies said in yesterday’s statement.

The case is Viacom International v. Time Warner Cable, 11- 02387, U.S. District Court, Southern District of New York (Manhattan).