The sharp fall in the prices of Coal India – from a 52-week high of Rs 422 to around Rs 307 on Thursday – is a signal of major changes in the industry that could end the company’s free run so far.
According to a report in BusinessLine, the coal ministry under Sriprakash Jaiswal has not only proposed the auction of coal blocks in future, but that even Coal India would have to pay a minimum reserve price for the blocks allocated to it. If this policy is implemented, Coal India’s future profitability will be crunched.
Coal India’s share value derives primarily from two facts: its monopoly in coal mining (barring the blocks given out to power or steel producers for captive use), and its ownership of the world’s largest coal reserves.
Coal India’s shareholders will live in interesting times. They should avoid fresh investments till the policy map is clear.Reuters
But the this cosy world of monopoly and government mollycoddling is under threat from three directions: minority shareholder activism, the recent Supreme Court directive that all scarce natural resources must be auctioned, and the Comptroller and Auditor General (CAG) report which critiqued the UPA government’s decision to award coal blocks to power companies without calculating the loss to the exchequer from such munificence.
These three pressure-points will push up coal prices even while biting into Coal India’s future.
In the first half of March, a hedge fund, The Children’s Investment Fund, sent a notice to Coal India Ltd’s (CIL’s) board warning that if it continues to follow the government’s dictates on pricing, it would sue. While nothing much has come of this threat so far, it has alerted the government that sooner or later it will be vulnerable to shareholder activism.
In the second half of March, a leaked draft report of CAG talked of a potential revenue loss to the exchequer in view of “undue benefits” of Rs 10.67 lakh crore given to private companies who were allocated coal blocks without an auction between 2004 and 2009.
Two additional factors seem to have spurred a change in the government’s thinking on coal and Coal India. One is the embarrassment caused to the UPA and the Prime Minister in the 2G scam, where the government acquiesced in A Raja’s decision to give spectrum in 2008 at throwaway 2001 prices. The other is the leaked CAG report on coal blocks, where too the PM has been embarrassed by the fact that he was directly in charge of the coal ministry when the blocks were awarded.
It is against this backdrop that Coal Minister Jaiswal has proposed a new “transparent mechanism” for auctioning coal blocks within the next three months. While Coal India’s existing coal blocks may escape the auction burden, the attempt to level the field for all players in coal will crimp its future room for manoeuvre.
But Jaiswal is clearly doing the right thing. It makes no sense to open up coal to the private sector and then retain a public sector near-monopoly with huge advantages.
Here’s a policy framework that may work better than merely auctioning coal blocks at high prices.
First, the government must commit itself to competition as a means to improving coal production efficiencies and keeping costs in check. This means Coal India’s monopoly must be formally ended by either amending the Coal Nationalisation Act of 1973, or by offering its mines for private co-ownership. (Each mine could be spun off into a company and 49 percent stakes given to private operators for captive use).
Second, coal pricing has to be freed – subject only to a review by a neutral coal regulator.
Third, bidding for coal mines should be delinked from power tariffs. Currently, companies bid for supplying power on the basis of tariffs, and the coal block itself comes almost for free. Given that coal can be used for power and many other things, the economic value of coal should be delinked from power policy imperatives. If power tariffs have to be kept low for any reason, they should be kept down through direct state subsidies. Not by gifting away coal blocks – with possibilities of pilferage and misuse.
Fourth, since coal projects are always going to be vulnerable to ecological issues (many coal reserves are in forest areas), clear laws must be formulated on absolutely no-go areas, and places where forests can be partially cut and then reforested after the mining is done.
But whatever happens, one thing is clear: Coal India’s shareholders will live in interesting times. They should avoid fresh investments till the policy map is clear.
According to a report in BusinessLine, the coal ministry under Sriprakash Jaiswal has not only proposed the auction of coal blocks in future, but that even Coal India would have to pay a minimum reserve price for the blocks allocated to it. If this policy is implemented, Coal India’s future profitability will be crunched.
| Coal India |
Coal India’s shareholders will live in interesting times. They should avoid fresh investments till the policy map is clear.Reuters
But the this cosy world of monopoly and government mollycoddling is under threat from three directions: minority shareholder activism, the recent Supreme Court directive that all scarce natural resources must be auctioned, and the Comptroller and Auditor General (CAG) report which critiqued the UPA government’s decision to award coal blocks to power companies without calculating the loss to the exchequer from such munificence.
These three pressure-points will push up coal prices even while biting into Coal India’s future.
In the first half of March, a hedge fund, The Children’s Investment Fund, sent a notice to Coal India Ltd’s (CIL’s) board warning that if it continues to follow the government’s dictates on pricing, it would sue. While nothing much has come of this threat so far, it has alerted the government that sooner or later it will be vulnerable to shareholder activism.
In the second half of March, a leaked draft report of CAG talked of a potential revenue loss to the exchequer in view of “undue benefits” of Rs 10.67 lakh crore given to private companies who were allocated coal blocks without an auction between 2004 and 2009.
Two additional factors seem to have spurred a change in the government’s thinking on coal and Coal India. One is the embarrassment caused to the UPA and the Prime Minister in the 2G scam, where the government acquiesced in A Raja’s decision to give spectrum in 2008 at throwaway 2001 prices. The other is the leaked CAG report on coal blocks, where too the PM has been embarrassed by the fact that he was directly in charge of the coal ministry when the blocks were awarded.
It is against this backdrop that Coal Minister Jaiswal has proposed a new “transparent mechanism” for auctioning coal blocks within the next three months. While Coal India’s existing coal blocks may escape the auction burden, the attempt to level the field for all players in coal will crimp its future room for manoeuvre.
But Jaiswal is clearly doing the right thing. It makes no sense to open up coal to the private sector and then retain a public sector near-monopoly with huge advantages.
Here’s a policy framework that may work better than merely auctioning coal blocks at high prices.
First, the government must commit itself to competition as a means to improving coal production efficiencies and keeping costs in check. This means Coal India’s monopoly must be formally ended by either amending the Coal Nationalisation Act of 1973, or by offering its mines for private co-ownership. (Each mine could be spun off into a company and 49 percent stakes given to private operators for captive use).
Second, coal pricing has to be freed – subject only to a review by a neutral coal regulator.
Third, bidding for coal mines should be delinked from power tariffs. Currently, companies bid for supplying power on the basis of tariffs, and the coal block itself comes almost for free. Given that coal can be used for power and many other things, the economic value of coal should be delinked from power policy imperatives. If power tariffs have to be kept low for any reason, they should be kept down through direct state subsidies. Not by gifting away coal blocks – with possibilities of pilferage and misuse.
Fourth, since coal projects are always going to be vulnerable to ecological issues (many coal reserves are in forest areas), clear laws must be formulated on absolutely no-go areas, and places where forests can be partially cut and then reforested after the mining is done.
But whatever happens, one thing is clear: Coal India’s shareholders will live in interesting times. They should avoid fresh investments till the policy map is clear.
Surging food costs offer the most visible sign of India’s inability to contain price pressures, threatening spending in the world’s second-most populous nation. Even as the nation’s benchmark wholesale-price inflation has eased to below 9 percent after breaching that level most of last year, a recently introduced consumer-price gauge shows how little room the central bank has cut to cut interest rates and spur growth.
India’s consumer-price index climbed 9.47 percent from a year earlier in March as the cost of egg, vegetables, fish and meat products rose, after an 8.83 percent advance in February. Wholesale-price inflation in April was 7.23 percent, with food prices jumping 10.5 percent.
“Consumers are facing high inflation driven by food prices,” said Sonal Varma, a Mumbai-based economist at Nomura Holdings Inc. who was rated the top Indian forecaster by Bloomberg for the two years ending August 2011. “Due to the divergence between the consumer-price index and wholesale-price index, the Reserve Bank of India cannot cut rates too aggressively when inflation expectations are so high.”
Swaps Climb
One-year interest-rate swaps, or derivative contracts used to guard against fluctuations in funding costs, have climbed 16 basis points to 8.015 percent since the central bank’s last policy review on April 17, signaling investors pared bets for further reductions in borrowing costs.
Reserve Bank of India Governor Duvvuri Subbarao signaled last month that inflation might limit the room for further cuts after he slashed the benchmark rate by half a percentage point, flagging price risks from the fiscal deficit, energy costs and a weaker rupee.
Wholesale-price inflation unexpectedly accelerated to more than 7 percent in April from a 6.89 percent pace in March. The median of 32 estimates in a Bloomberg News survey was for a 6.67 percent gain. The consumer-price gauge was created in January 2011 and the release for April is due today.
Fastest Inflation
In Europe, Germany and Russia will release producer price data that are forecast to show gains slowed last month, Bloomberg surveys showed. Italy’s industrial orders probably improved in March from a 2.5 percent contraction the previous month, a separate survey showed. The U.S. will release revised figures for factory orders today.
By both consumer and wholesale measures, India’s inflation is the highest in the so-called BRIC group of biggest emerging markets that also includes Brazil, Russia and China. Varma expects the central bank to gradually rely more on the consumer price gauge in deciding policy as the wholesale measure excludes services and mostly reflects manufacturing.
The Reserve Bank lowered the repurchase rate on April 17 for the first time since 2009, to 8 percent, to support an economy that probably expanded the least in three years in the 12 months through March 2012 according to government estimates. The move followed 13 interest-rate increases from March 2010 to October 2011 that sought to tame price pressures in a nation where 75 percent of the people live on less than $2 a day.
’Wrong Time’
“Policy rates are being cut at the wrong time,” said Jay Shankar, an independent economist and political analyst who previously worked for Religare Capital Markets Ltd. in Mumbai. “The RBI’s focus now should be on taming inflation rather than supporting growth.”
Subbarao went against the recommendations of an advisory panel when he cut interest rates by a greater-than-forecast half a percentage point last month, minutes of the committee released this week showed. Four of the six non-central bank members present said the central bank should hold rates, according to minutes of the Technical Advisory Committee on Monetary Policy meeting on April 11. Two members recommended a 0.25 percentage- point cut.
Indian companies’ dollar borrowing costs have surged as policy makers’ inability to cool inflation erodes investor confidence. The rupee fell to a record low this week and global funds have cut holdings of local-currency notes by more than $400 million this quarter after the central bank said Prime Minister Manmohan Singh’s fiscal deficit may stoke price pressures in Asia’s third-biggest economy.
Spending Curb
Vegetable and fruit prices are higher at the retail level than at the farm gate because they are distributed through many stages in between, Shankar said. Prices are buoyant because supplies haven’t increased, he added.
That’s undermining consumer spending, said Paras Bothra, head of research at Ashika Stock Broking Ltd. in Kolkata.
Sales growth for Pantaloon Retail India Ltd. (PF), the country’s largest retailer, is expected to slow to less than 3 percent in the year ending June 30, compared with a 35 percent increase the previous year, according to a Bloomberg compilation of analyst estimates. The company’s shares have fallen 45 percent in the past year, compared with a drop of 11 percent in the benchmark BSE India Sensitive Index.
“If you look at the retail pulse for this quarter, it has been very sluggish all across,’ Bothra said. “Purchasing power has gone down quite substantially because of the fact that inflation remains very high, and earnings growth doesn’t remain that great.”
Mango Juice
For Desai, that means forsaking mangoes, priced at 60 rupees a kilogram at the stall she was visiting, and pomegranates costing 150 rupees a kilogram, about double the price at a wholesale market in New Delhi. Green mangoes are used for making pickles and condiments, in cooking with lentils and to make juices.
“Prices of fruits and vegetables have increased so much in the last four to five years, even milk prices are increasing,” she said. “The government keeps saying that inflation will be brought down, but I see no sign of that happening.”
India’s consumer-price index climbed 9.47 percent from a year earlier in March as the cost of egg, vegetables, fish and meat products rose, after an 8.83 percent advance in February. Wholesale-price inflation in April was 7.23 percent, with food prices jumping 10.5 percent.
“Consumers are facing high inflation driven by food prices,” said Sonal Varma, a Mumbai-based economist at Nomura Holdings Inc. who was rated the top Indian forecaster by Bloomberg for the two years ending August 2011. “Due to the divergence between the consumer-price index and wholesale-price index, the Reserve Bank of India cannot cut rates too aggressively when inflation expectations are so high.”
Swaps Climb
One-year interest-rate swaps, or derivative contracts used to guard against fluctuations in funding costs, have climbed 16 basis points to 8.015 percent since the central bank’s last policy review on April 17, signaling investors pared bets for further reductions in borrowing costs.
Reserve Bank of India Governor Duvvuri Subbarao signaled last month that inflation might limit the room for further cuts after he slashed the benchmark rate by half a percentage point, flagging price risks from the fiscal deficit, energy costs and a weaker rupee.
Wholesale-price inflation unexpectedly accelerated to more than 7 percent in April from a 6.89 percent pace in March. The median of 32 estimates in a Bloomberg News survey was for a 6.67 percent gain. The consumer-price gauge was created in January 2011 and the release for April is due today.
Fastest Inflation
In Europe, Germany and Russia will release producer price data that are forecast to show gains slowed last month, Bloomberg surveys showed. Italy’s industrial orders probably improved in March from a 2.5 percent contraction the previous month, a separate survey showed. The U.S. will release revised figures for factory orders today.
By both consumer and wholesale measures, India’s inflation is the highest in the so-called BRIC group of biggest emerging markets that also includes Brazil, Russia and China. Varma expects the central bank to gradually rely more on the consumer price gauge in deciding policy as the wholesale measure excludes services and mostly reflects manufacturing.
The Reserve Bank lowered the repurchase rate on April 17 for the first time since 2009, to 8 percent, to support an economy that probably expanded the least in three years in the 12 months through March 2012 according to government estimates. The move followed 13 interest-rate increases from March 2010 to October 2011 that sought to tame price pressures in a nation where 75 percent of the people live on less than $2 a day.
’Wrong Time’
“Policy rates are being cut at the wrong time,” said Jay Shankar, an independent economist and political analyst who previously worked for Religare Capital Markets Ltd. in Mumbai. “The RBI’s focus now should be on taming inflation rather than supporting growth.”
Subbarao went against the recommendations of an advisory panel when he cut interest rates by a greater-than-forecast half a percentage point last month, minutes of the committee released this week showed. Four of the six non-central bank members present said the central bank should hold rates, according to minutes of the Technical Advisory Committee on Monetary Policy meeting on April 11. Two members recommended a 0.25 percentage- point cut.
Indian companies’ dollar borrowing costs have surged as policy makers’ inability to cool inflation erodes investor confidence. The rupee fell to a record low this week and global funds have cut holdings of local-currency notes by more than $400 million this quarter after the central bank said Prime Minister Manmohan Singh’s fiscal deficit may stoke price pressures in Asia’s third-biggest economy.
Spending Curb
Vegetable and fruit prices are higher at the retail level than at the farm gate because they are distributed through many stages in between, Shankar said. Prices are buoyant because supplies haven’t increased, he added.
That’s undermining consumer spending, said Paras Bothra, head of research at Ashika Stock Broking Ltd. in Kolkata.
Sales growth for Pantaloon Retail India Ltd. (PF), the country’s largest retailer, is expected to slow to less than 3 percent in the year ending June 30, compared with a 35 percent increase the previous year, according to a Bloomberg compilation of analyst estimates. The company’s shares have fallen 45 percent in the past year, compared with a drop of 11 percent in the benchmark BSE India Sensitive Index.
“If you look at the retail pulse for this quarter, it has been very sluggish all across,’ Bothra said. “Purchasing power has gone down quite substantially because of the fact that inflation remains very high, and earnings growth doesn’t remain that great.”
Mango Juice
For Desai, that means forsaking mangoes, priced at 60 rupees a kilogram at the stall she was visiting, and pomegranates costing 150 rupees a kilogram, about double the price at a wholesale market in New Delhi. Green mangoes are used for making pickles and condiments, in cooking with lentils and to make juices.
“Prices of fruits and vegetables have increased so much in the last four to five years, even milk prices are increasing,” she said. “The government keeps saying that inflation will be brought down, but I see no sign of that happening.”
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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?
Nine firms were cut three notches and seven were kept on review for further reductions, Moody’s said yesterday in a statement. Santander’s U.K.-based subsidiary also was cut.
The moves followed Moody’s May 14 downgrade of 26 Italian banks and its Feb. 13 cut of Spain’s sovereign debt. The main drivers for the Spanish bank downgrades were a surge in soured loans, the recession, restricted funding access and the reduced ability of the government to support lenders as its own creditworthiness diminishes, Moody’s said.
“Banks will continue to face highly adverse operating and market funding conditions that pose a threat to their creditworthiness,” the ratings firm said. “The Spanish economy has fallen back into recession in first-quarter 2012, and Moody’s does not expect conditions to improve” this year.
Santander and BBVA (BBVA) both were cut to A3, the same as the Spanish government, from Aa3, according to Moody’s. Spokesmen for both banks didn’t return phone messages seeking comment on the downgrades.
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.
US markets were sold off yesterday amid Greece woes and Economic data, as friday's listing of Facebook couldn't lift market mood. We were expecting a bounce from levels but it didn't. Today, the listing of multibillion dollar IPO of Facebook Inc ( NASDAQ: FB ), either lift the markets or Greece might still be a reason for another sell off. US markets will see more downside in coming week if no resolution about Greece over the weekend. it would be cautious time to trade now.Nifty Trading Tips
Don't trade Nifty on either downside or upside and wait for market reaction about two major events over the weekend, Greece outcome and Facebook Listing. Because both of them impact market either positively or negatively. Our Yesterday's buy call on Nifty was covered at current levels ( Stop Loss ). We advise not to short Nifty now.
Check Out our previous recommendation here
Kayak IPO Expected In Coming Weeks
CNBC is reporting that travel site Kayak may finally spring its long-delayed IPO in the coming few weeks, riding Facebook's mega-wake. This news follows a bump in recent performance that Kayak showed off in its Q1 earnings report. The company reported a 39 percent increase in revenue and a net earnings of $4 million for the first quarter of the year, compared to $7 million lost in Q1 last year. According to CNBC, Kayak is targeting a $150 million IPO pegging the valuation at a shade over $1 billion.
Study: Pirate Bay-like Sharing Sites Help Albums Sell
File sharing site Pirate Bay's come under fire recently and is being blocked everywhere from Manchester to Mumbai. TorrentFreak found a new study by an economist at North Carolina State University that adds to evidence that closing down such file sharing sites may hurt sections of the same music industry that's hunting them down. Robert Hammond studied a year's worth of album sales data, comparing it with file shares via BitTorrent. He found that album sales did better if they became available first as shared files--selling up to 60 more copies a month after their online "release." Hammond also found that this trend favors established musicians over smaller, indie artists--in fact, the bigger they were, the more benefit they got from file sharers.
Iran To Sue Google Over Leaving The Persian Gulf Nameless On Maps
Irate about Google's regional omission on Google Maps, Iran may sue Google for failing to mark that limb of the Arabian Sea by Iran and the Arabian peninsula as the "Persian Gulf" AP reports. The name of the water body has been a sore point between Iran and its neighbors in the Middle East, the BBC explains--while Iran favors "Persian Gulf," other countries have been rallying behind "Arabian Gulf." Google for its part, prefered to avoid the issue entirely, leaving the water body nameless. H/T: TheNextWeb.
FCC To Vote On Spectrum For Wireless Health Monitors
Wireless medical electronics may be getting their own space. Reuters reports that the Federal Communications Commission is nearing a decision about wireless electronics, and is set to announce plans about their future in the U.S. today. All across the country, research is underway to develop small, sensitive, efficient, low-power sensors for the body that could wirelessly transmit patient data to monitors, giving them a tad more mobility. The FCC is due to vote on a two-spectrum plan on May 24, which would designate one spectrum for wireless monitoring at hospitals and medical facilities, and another spectrum for wirelessly monitoring patient data at their homes.
Pinterest Gains $100 Million Funding, Now Worth $1.5 Billion
AllThingsD reports Pinterest has just landed the big prize: A $100 million investment round led by a $50 million sum from leading Japanese e-commerce site Rakuten. The cash will help Pinterest improve its operations and expand global coverage leveraging Rakuten's existing multinational presence, and comes after previous funding of just $40 million and a valuation in October 2011 of just $200 million. Pinterest has been surrounded by allegations of criminal spamming schemes and copyright infractions, but this growth rate marks it as end of Siicon Valleys next hot startups to watch.
Facebook Insiders Cash Shares In, Pre-IPO Hackathon, New Apps
The additional shares available on IPO that Facebook revealed later yesterday actually won't make Facebook itself any cash--they are actually being sold by existing insider shareholders. This may have raised a few eyebrows in the financial world because selling a stake like this at launch could indicate a lack of long-term confidence in a company's future...although the fact that the offer price has risen from earlier estimates is more likely the driving factor. Meanwhile it's been reported to TechCrunch that a traditional all-nighter Hackathon at Facebook HQ will precede the IPO, ending with the remote-ringing of the Nasdaq bell. And as the last hours before IPO dribble away, Facebook issued an iPhone app designed to help users who utilize Facebook to promote a brand or and event manage their Pages with ease while mobile.
CNBC is reporting that travel site Kayak may finally spring its long-delayed IPO in the coming few weeks, riding Facebook's mega-wake. This news follows a bump in recent performance that Kayak showed off in its Q1 earnings report. The company reported a 39 percent increase in revenue and a net earnings of $4 million for the first quarter of the year, compared to $7 million lost in Q1 last year. According to CNBC, Kayak is targeting a $150 million IPO pegging the valuation at a shade over $1 billion.
Study: Pirate Bay-like Sharing Sites Help Albums Sell
File sharing site Pirate Bay's come under fire recently and is being blocked everywhere from Manchester to Mumbai. TorrentFreak found a new study by an economist at North Carolina State University that adds to evidence that closing down such file sharing sites may hurt sections of the same music industry that's hunting them down. Robert Hammond studied a year's worth of album sales data, comparing it with file shares via BitTorrent. He found that album sales did better if they became available first as shared files--selling up to 60 more copies a month after their online "release." Hammond also found that this trend favors established musicians over smaller, indie artists--in fact, the bigger they were, the more benefit they got from file sharers.
Iran To Sue Google Over Leaving The Persian Gulf Nameless On Maps
Irate about Google's regional omission on Google Maps, Iran may sue Google for failing to mark that limb of the Arabian Sea by Iran and the Arabian peninsula as the "Persian Gulf" AP reports. The name of the water body has been a sore point between Iran and its neighbors in the Middle East, the BBC explains--while Iran favors "Persian Gulf," other countries have been rallying behind "Arabian Gulf." Google for its part, prefered to avoid the issue entirely, leaving the water body nameless. H/T: TheNextWeb.
FCC To Vote On Spectrum For Wireless Health Monitors
Wireless medical electronics may be getting their own space. Reuters reports that the Federal Communications Commission is nearing a decision about wireless electronics, and is set to announce plans about their future in the U.S. today. All across the country, research is underway to develop small, sensitive, efficient, low-power sensors for the body that could wirelessly transmit patient data to monitors, giving them a tad more mobility. The FCC is due to vote on a two-spectrum plan on May 24, which would designate one spectrum for wireless monitoring at hospitals and medical facilities, and another spectrum for wirelessly monitoring patient data at their homes.
Pinterest Gains $100 Million Funding, Now Worth $1.5 Billion
AllThingsD reports Pinterest has just landed the big prize: A $100 million investment round led by a $50 million sum from leading Japanese e-commerce site Rakuten. The cash will help Pinterest improve its operations and expand global coverage leveraging Rakuten's existing multinational presence, and comes after previous funding of just $40 million and a valuation in October 2011 of just $200 million. Pinterest has been surrounded by allegations of criminal spamming schemes and copyright infractions, but this growth rate marks it as end of Siicon Valleys next hot startups to watch.
Facebook Insiders Cash Shares In, Pre-IPO Hackathon, New Apps
The additional shares available on IPO that Facebook revealed later yesterday actually won't make Facebook itself any cash--they are actually being sold by existing insider shareholders. This may have raised a few eyebrows in the financial world because selling a stake like this at launch could indicate a lack of long-term confidence in a company's future...although the fact that the offer price has risen from earlier estimates is more likely the driving factor. Meanwhile it's been reported to TechCrunch that a traditional all-nighter Hackathon at Facebook HQ will precede the IPO, ending with the remote-ringing of the Nasdaq bell. And as the last hours before IPO dribble away, Facebook issued an iPhone app designed to help users who utilize Facebook to promote a brand or and event manage their Pages with ease while mobile.
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.
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.
This means that the company and its underwriters will be working with its current price range of $34 to $38.
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.
Accelerating Trend
In Georgia, the number of Hispanic babies grew 20.9 percent from April 2010 to July 2011, the fastest rate of any state. It will probably become majority-minority by 2025, said Matt Hauer, director of the University of Georgia’s Applied Demography Program.
“It’s been on this path for the last 10 or 20 years,” Hauer, a former Census Bureau statistician, said in a telephone interview. “But it’s been accelerating over the past decade. And it’s not just any one area -- this is a statewide phenomenon.”
The differences have become stark in Texas, said Mark Fossett, director of the Texas Census Research Data Center at Texas A&M University. The state added more Hispanic babies during the 15-month period to July 2011 than any other.
“If you’re 60 years old, this is an Anglo state,” he said. “That’s where you see the wealth, income, home ownership, and high-voting patterns. Anything else, especially below 18, the school-age population, looks Latino.”
Fossett said the increase in children is putting pressure on the school system in the state, where the legislature last year cut more than $5 billion in education funding from its two- year budget of $172.3 billion.
Inopportune Cuts
“Now, you’ve got all your standard requirements for meeting the needs of an urban economy and a large school population whose parents have lower educational levels and lower incomes,” he said. “This is occurring right at a time when Texas is cutting down on education spending.”
Texas is home to the nation’s two most minority counties -- Maverick at 96.8 percent and Webb at 96.4 percent.
The transition to a majority-minority nation won’t be smooth, said Passel, the Pew demographer. Even so, he said, the U.S. has proven its ability to absorb new racial and ethnic groups in the past.
“If you go back 100 years, groups that are now considered part of the majority white population were perceived as minorities,” he said. “Over time, we’ll change the way we perceive these categories.”
Social Security
That perception may change even faster with the realization that younger non-white workers will play a bigger role in helping shore up financially strapped retirement and other social- welfare programs.
The Social Security trust funds that pay retirement, disability and survivor’s benefits to one in four U.S. households will be exhausted by 2033, the program’s trustees said in a report released last month. The main fund that pays for the federal Medicare health-insurance program for the elderly will run out of money in 2024, the report said.
Currently, there are 4.8 working-age Americans for every person older than 65. By 2035, that number will fall to 2.8 people per retiree.
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.
Accelerating Trend
In Georgia, the number of Hispanic babies grew 20.9 percent from April 2010 to July 2011, the fastest rate of any state. It will probably become majority-minority by 2025, said Matt Hauer, director of the University of Georgia’s Applied Demography Program.
“It’s been on this path for the last 10 or 20 years,” Hauer, a former Census Bureau statistician, said in a telephone interview. “But it’s been accelerating over the past decade. And it’s not just any one area -- this is a statewide phenomenon.”
The differences have become stark in Texas, said Mark Fossett, director of the Texas Census Research Data Center at Texas A&M University. The state added more Hispanic babies during the 15-month period to July 2011 than any other.
“If you’re 60 years old, this is an Anglo state,” he said. “That’s where you see the wealth, income, home ownership, and high-voting patterns. Anything else, especially below 18, the school-age population, looks Latino.”
Fossett said the increase in children is putting pressure on the school system in the state, where the legislature last year cut more than $5 billion in education funding from its two- year budget of $172.3 billion.
Inopportune Cuts
“Now, you’ve got all your standard requirements for meeting the needs of an urban economy and a large school population whose parents have lower educational levels and lower incomes,” he said. “This is occurring right at a time when Texas is cutting down on education spending.”
Texas is home to the nation’s two most minority counties -- Maverick at 96.8 percent and Webb at 96.4 percent.
The transition to a majority-minority nation won’t be smooth, said Passel, the Pew demographer. Even so, he said, the U.S. has proven its ability to absorb new racial and ethnic groups in the past.
“If you go back 100 years, groups that are now considered part of the majority white population were perceived as minorities,” he said. “Over time, we’ll change the way we perceive these categories.”
Social Security
That perception may change even faster with the realization that younger non-white workers will play a bigger role in helping shore up financially strapped retirement and other social- welfare programs.
The Social Security trust funds that pay retirement, disability and survivor’s benefits to one in four U.S. households will be exhausted by 2033, the program’s trustees said in a report released last month. The main fund that pays for the federal Medicare health-insurance program for the elderly will run out of money in 2024, the report said.
Currently, there are 4.8 working-age Americans for every person older than 65. By 2035, that number will fall to 2.8 people per retiree.
According to the breaking news that flashed, websites of Indian Supreme Court and Congress are hacked by unknown hackers.
A number of Internet service providers had blocked access to popular video sharing websites such as Vimeo and DailyMotion as well as major torrent search services including The Piratebay and isoHunt apparantly following a court order obtained by Copyright Labs, a Chennai-based online anti piracy service provider.
According to Copyright Labs, ISPs were asked to block specific websites but in a repeat of earlier instances they ended up blocking entire domains.
In retaliation Anonymous's opIndia hackers targeted the websites of the Congress Party (aicc.org.in), Supreme Court (supremecourtofindia.nic.in) as well as that of Copyright Labs (copyrightlabs.in).
Even the Department of Telecommunications (dot.gov.in) website was on the hackers' hit-list but it seems to have fended off the attack.
Soon after news of the block spread, social networks were abuzz with tricks and tips on how to bypass the ban.
A number of Internet service providers had blocked access to popular video sharing websites such as Vimeo and DailyMotion as well as major torrent search services including The Piratebay and isoHunt apparantly following a court order obtained by Copyright Labs, a Chennai-based online anti piracy service provider.
According to Copyright Labs, ISPs were asked to block specific websites but in a repeat of earlier instances they ended up blocking entire domains.
In retaliation Anonymous's opIndia hackers targeted the websites of the Congress Party (aicc.org.in), Supreme Court (supremecourtofindia.nic.in) as well as that of Copyright Labs (copyrightlabs.in).
Even the Department of Telecommunications (dot.gov.in) website was on the hackers' hit-list but it seems to have fended off the attack.
Soon after news of the block spread, social networks were abuzz with tricks and tips on how to bypass the ban.
