Consumer Technology World Brief
Yota Devices has launched its first smartphone, hoping its novel double-sided screen will allow it to break into foreign markets. The idea is definitely unique with a normal high resolution screen on one side and on the other side an electronic paper display designed to mimic the appearance of ordinary ink on paper, which is always switched on. Having an e-ink display on the back of the phone so you can comfortably read books or long articles without quickly draining the battery with a bright LCD display is a great idea in theory. However the YotaPhone is not quite there yet. Its e-ink screen is very low-quality, which usability quite unpleasant, and at the moment there are very limited support for the display form 3rd party developers. Nothing much can be done with it yet. However the idea is definitely a great one and the next generation model might be a better bet if it ever comes out.
Sekisui Chemical recently announced that they are on track to build new silicon-based material for use in lithium ion batteries that could result in batteries delivering a driving range of about 370 miles — roughly equivalent to how far a typical car can go on a full tank of gas but at a much lower cost. More important however is that the new material can bring battery production costs down to just above USD290 per kilowatt-hour, a decrease of more than 60 percent from around USD 976 today. The impact of this development would see the price of electric cars dropping. Other benefits of the new type of lithium ion battery are that it is about one-third the weight of a conventional electric car battery, allowing for a highly-compact car battery. If truly this development can be realized commercially, electric cars are poised to become more practical in the near future.
North America Review
U.S. gasoline demand has increased in recent months, following five years of decline, a change that some experts say could continue into 2014. From July to October, demand outstripped monthly government forecasts. Sales by refiners and other suppliers have shown year-on-year increases in six of the first nine months of 2013, the most monthly gains since 2010. Gasoline demand had been steadily declining since 2007 as motorists drove less and car fuel efficiency improved. The U.S. government still forecasts a 0.4 percent fall in gasoline demand in 2014. But demand is expected to rise 0.5 percent this year, after declining by 0.8 percent to 10.5 million barrels per day in 2012, according to the EIA, the statistical arm of the Department of Energy.
U.S. borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country’s biggest banks. The loans are a problem now because an increasing number are hitting their 10-year anniversary, at which point borrowers usually must start paying down the principal on the loans as well as the interest they had been paying all along. More than $221 billion of these loans at the largest banks will hit this mark over the next four years, about 40 percent of the home equity lines of credit now outstanding. The big banks, including Bank of America Corp, Wells Fargo & Co, Citigroup Inc, and JPMorgan Chase & Co have more than $10 billion of these home equity lines of credit on their books each, and in some cases much more than that. How bad home equity lines of credit end up being for banks will hinge on the percentage of loans that default. Analysts struggle to forecast that number. In the best case scenario, losses will edge higher from current levels, and will be entirely manageable. But the worst case scenario for some banks could be bad, eating deeply into their earnings and potentially cutting into their equity levels at a time when banks are under pressure to boost capital levels.
Asia Review
Japanese Prime Minister Shinzo Abe is readying a $182 billion economic package this week in his latest bid to pull the economy out of deflation, but the new measures will not require the government to sell more debt. The package, to be approved by Abe’s government on Thursday, will have a headline value of 18.6 trillion yen ($181.6 billion). That puts the overall package on a par with Abe’s 20 trillion yen burst of spending early this year as part of his campaign to end 15 years of falling prices and tepid growth. But the bulk of the package includes loans from government-backed lenders, spending by local governments and corporations. The headline figure usually announced by the Japanese government on economic measures often includes spending that has already been committed, and tends to far exceed the amount of actual new government spending.
China plans to roll out financial sector reforms in the Shanghai special economic zone in the next three months and most will be implemented in a year, suggesting authorities are accelerating the pace of dismantling capital account controls. A People’s Bank of China (PBOC) statement for the first time gave a timeline for launching deep reforms in the zone, adding they could then be duplicated in other similar zones around the country. The statement came after the PBOC provided additional detail for its plans for financial liberalization in the Shanghai free trade zone (FTZ) in a separate document published on Monday. The apparent tempo of reform in the FTZ is consistent with other moves by China to promote the use of its currency in global trade, including seeding offshore yuan centers in London, Paris and Singapore and allowing banks and companies to freely move the yuan across its borders for trade-related services. China now conducts nearly a fifth of its trade with the world in its own currency compared with about 1 percent at the start of 2009. That share is expected to rise to as much as a third in the next couple of years, various estimates suggest.
Europe Review
Euro zone states are considering cheap loans to member governments as an incentive to carry out painful economic reforms, an EU document showed, introducing a discussion on fiscal transfers. The loans would be part of so-called contractual arrangements, which would be legally binding contracts with economic reform targets and milestones that trigger the payout of tranches of the agreed loan. The loans would be attractive because they would be offered at interest rates below those in financial markets. In that respect, they would amount to a degree of subsidized lending, ultimately amounting to a mutualising of risk among involved member states and a degree of financial transfer – an idea that Germany has long resisted. The size of the loan would not be linked to the cost of reform and would be meant as general support for the economy. It is not clear what time-frame the loans would be offered for, or what the limit on the size of any loan would be. While there were no details on how the loans could be financed, one possibility, the official indicated, might be for the euro zone’s rescue fund, the European Stability Mechanism, to raise money on international markets and on-lend capital to a contracted member state, although the exact framework and process of the lending is yet to be finalized.
European banks, which eliminated more than 140,000 jobs in two years, are poised to keep shrinking. Lenders in the region probably will cut at least 5 percent of trading and advisory staff next year, according to a survey of three London-based investment-bank recruiters, and the reductions could reach 15 percent. That would be twice the 7 percent shrinkage across the industry since 2011. European firms are lagging behind U.S. counterparts in meeting stricter limits on leverage, putting pressure on them to cut assets. . At the same time, a stagnant economy is crimping fees from investment banking and merger advice, eroding returns. After exiting its longest recession in the second quarter, the euro area remains economically fragile. The European Union last month trimmed its forecast for growth next year in countries that share the euro to 1.1 percent and raised its unemployment estimate to 12.2 percent.
