Windows Phone gains ground in Europe
“They will withdraw money from the United States and Europe. They will go into cash or gold or whatever but not sovereign debt,” he said. “Then we are back in the euro crisis.” The consequences of an American default would be so grim, in fact, that many investors are convinced that it simply cannot happen. Despite grandstanding in Washington, the thinking goes, the parties will eventually find a compromise. “You can’t default as a big country,” Mr. Prebay of Quilvest said. “You would kill everything exports, industry. I don’t think it’s imaginable.” More from New York Times: Opening Rush to Insurance Markets Runs Into Snags Mr. Prebay said that at a lunch with investors on Tuesday, the talk was of tapering by the Fed and political turmoil in Italy, not the Washington shutdown. That is a sign that investors still expect Congress to step back from the brink. That faith in the ultimate reasonableness of the American people was reflected in European stocks and government bonds on Tuesday, which were little changed. Because the markets look forward, investors had already baked the effects of a shutdown into the prices of stocks and bonds. But predicting how a default would play out is difficult, because America has never before reneged on its bonds. Furthermore, some Republicans are signaling that they are intent on avoiding a default and the Obama administration could come up with creative financing to make interest payments on Treasuries even if the government borrowing is capped. Even without a default, a prolonged shutdown by the U.S.
GEORGE SOROS: Europe’s Nightmare Is Getting Worse, And Only Germany Can Make It Stop
Commercial banks were not required to set aside any capital reserves against their holdings of government bonds and the European Central Bank (ECB) accepted all government bonds on equal terms at its discount window. This set up a perverse incentive for commercial banks to buy the debt of the weaker governments in order to earn what eventually became just a few basis points, because interest rate differentials converged to practically zero. This convergence in interest rates caused divergences in economic performance. The weaker countries enjoyed real estate, consumption and investment booms, while Germany, weighed down by the burdens of reunification, had to adopt fiscal austerity and structural reforms. This divergence was not envisioned by the Maastricht Treaty, which assumed that only the public sector produces disequilibrium. Then came the Crash of 2008. After the Lehman bankruptcy European finance ministers declared that no other systemically important financial institution would be allowed to fail but Chancellor Merkel insisted that the obligation should fall on each country individually, not on the European Union or the Eurozone collectively. That was the onset of the euro crisis but it took markets more than a year to react to it. Only when Greece revealed a much larger than expected fiscal deficit did markets realize that Greece may actually default on its debt but then they raised risk premiums with a vengeance not only on Greek bonds but on the bonds of all the so-called periphery countries. By then those countries became saddled with much more debt than a third world country would have been able to accumulate. The outbreak of the crisis put the European financial authorities in a bind. They had to deal with the crisis in accordance with rules that were patently inappropriate to prevailing conditions; yet they couldnt change the Maastricht and Lisbon Treaties because public opinion especially in France and Germany was opposed to any further steps towards European integration. Consequently, the authorities had to resort to all kinds of legal subterfuges to prevent the euro from collapsing. This made the rules governing the euro much more complicated than they would have been if they had been designed de novo. At the same time some of the changes that arose in practice, notably the risk of default and the bail-in of bondholders were gradually given legal recognition.
Europe Stock-Index Futures Are Little Changed; GDF Suez May Gain
KappAhl AB dropped 3.5 percent after the clothing retailer proposed paying no dividend this financial year. The Stoxx Europe 600 Index slipped 0.4 percent to 311.73 at 8:08 a.m. in London. The equity benchmark jumped 0.8 percent yesterday as a senior minister in Silvio Berlusconis People of Liberty party said that lawmakers should vote for the incumbent prime minister in todays confidence vote. Standard & Poors 500 Index futures also lost 0.4 percent today, while the MSCI Asia Pacific Index fell 0.2 percent. The U.S. government began its first partial shutdown in 17 years yesterday as Republicans and Democrats failed to agree on a compromise budget to keep the federal government open into the new financial year. As many as 800,000 federal employees didnt work and the government closed some services. European Central Bank policy makers meeting in Paris today will keep their benchmark interest rate unchanged at a record low of 0.5 percent, according to all 52 economists in a Bloomberg News survey. The central bank will announce its decision at 1:45 p.m. in Paris and President Mario Draghi will hold a press conference 45 minutes later. The ECB will decide against pumping more cash into the currency zones financial system as long as the threat of action keeps market interest rates under control, according to economists from Berenberg Bank to Nomura Holdings Inc.
But Windows Phone is turning into a serious contender. According to figures out Monday from researchers Kantar WorldPanel ComTech, Android featured on just over 70 percent of smartphones sold in the three months up to August across Europe’s five biggest markets: Great Britain, France, Germany, Spain, and Italy. Equally unsurprisingly, iOS is in second position with 16 percent of the smartphone market in Europe — a year over year rise of around two percentage points for both operating systems. Windows Phone, meanwhile, continues to grow its share in the five countries, hitting 9.2 percent — around double its 5.1 percent share for the same period last year. The jump has been fueled by significant gains in the three major European markets: France, Germany, and Great Britain. In the latter, its share has risen from 4.5 percent a year ago to 12 percent today, while in Germany it’s grown from 3.8 percent to 8.8 percent — the first time it’s hit double-digit share in either country. In Germany, that puts Windows Phone only one percentage point behind iOS in market share. Related posts Apple revives in-store pickup for iPhone 5S “Windows Phone’s latest wave of growth is being driven by Nokia’s expansion into the low- and midrange market with the Lumia 520 and 620 handsets. These models are hitting the sweet spot with 16- to 24-year-olds and 35- to 49-year-olds, two key groups that look for a balance of price and functionality in their smartphone,” Dominic Sunnebo, strategic insight director at Kantar Worldpanel ComTech, said in a statement. And despite recent turbulence and a proposed $7.2 billion takeover by Microsoft, Nokia, Windows Phone’s main hardware champion, is growing its own market share across some of Europe’s biggest markets. (Nokia accounted for four in five of all Windows Phone device sales across the five markets.) For the three months to the end of August, Nokia bagged 7.8 percent of all smartphone sales, up from 6.9 percent a year ago, inching up on third-place Sony, whose share stands at 8.2 percent, a slight rise over a year ago.