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The final quarter of 2011 was a historic one for APPLE, as the company
had the highest earnings in one three-month period of any tech company
in history, challenged the record of most profit in one quarter for any
US company and subsequently took the title of most valuable US company
from the quarterly profit record holder, EXXON. Apple reported that it
hauled in $46.3 billion in the last three months of 2011, nearly double
the $26.7 billion it pulled in during the holiday-shopping quarter of
2010. This is the biggest quarterly revenue for a tech company in
history topping Samsung’s record of $41 billion. Apple’s quarterly
revenue is similar to the 2010 gross domestic product of Tunisia.
Projected over the entire year, Apple’s revenue would top the GDP of all
but 46 countries including Pakistan, Peru, Vietnam and New Zealand.
FRANCE RATING
Recently, S&P downgraded 9 European countries. Spain and Italy were both taken down another notch leaving Italy with a BBB+ rating and Spain with an A. But the headline damage was done to France whose triple A rating got downgraded to AA. France had been rated AAA for 36 years. The French bid adieu to their TRIPLE A status….said they did not care about it. But it was a blow not just to the French but to whole European experiment. France with Germany, was one of the strong, big economies at the center of Europe. It was one of the economies the others were depending on to bail them out.
The Wall Street Journal warned that markets needed to BRACE FOR EUROPEAN FALLOUT. But maybe there won’t be much fallout. The US lost its AAA status last year. And it wasn’t at all inconvenienced as a result. Instead yields on US debt went down…meaning the bonds were more desirable than before. Investors knew they would get their money back, they did not seem to care about what the money would be worth.
France has about the same financial profile as the US. In this respect, both are at the center of the developed world – with government debt of about 100 % of GDP. Neither can expect to work its way out of debt unless it can keep its deficit below its rate of growth. And that’s going to be be almost impossible. Europe appears to be heading into a recession – negative GDP growth and the US is not far behind. Despite the renewed talk of a RECOVERY in the US, the country limps along with a budget deficit of nearly 10 % of GDP… and will probably tip back into recession later this year. In any case, there is no end in sight to America’s huge deficits. And no chance that growth will rise high enough to offset them.
DEBT PROBLEMS FOR US AND EUROPE
Time and time again, Europe solves its debt problems…and every time they don’t get solved at all.
Italian bond yields are edging back up. Greece is negotiating a default. They want to avoid a naked, noisy default.. so they are dressing it up as VOLUNTARY or SOFT. But they can’t disguise the fact that Greece has bills it can’t pay. On 20th March, it needs to come up with 14.4 billion euros followed by billions more in the months following. That is more than 6 % of national GDP. It would be as though the US had to pay a trillion dollars.
Where’s the money to come from ? The European Central Bank ? The IMF ? The Germans ? Maybe. But little by little, even the fixers are beginning to realise that this is a problem than cann’t be fixed with bandaids and bailouts. Greece has too much debt. About 100 billion euros worth of it will have to away or the country will never be solvent.
In the German magazine Der Spiegel :
When it comes to Greece, it’s clear that it’s hopeless. It would be better for the country to finally leave the euro and transform its foreign debts to drachma, than to constantly beg for new aid and set itself up for lasting charity.
The fixers and the fixees are meeting, trying to figure out who takes the loss. It is a little like a divorce. If they can get everyone to cooperate, the whole thing will go fairly smoothly. If not, it could be a disaster. The resulting tussle could bring down not just Greek debt but the debt of Italy, Spain and even France.
IN SYDNEY
In Sydney, Australia, the ELVIS EXPRESS left the station last week, without a single unsold seat. The train takes Elvis fans to the 5 day Parkes Elvis Festival held once a year for the last 6 years.
(Source - Weekly column from Minesh Gandhi, Mira Inform)
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