The Apple-Samsung Lawsuit Saga: Titanic Corporate Battle?

Given that all the money recently spent by these two tech giant goes to high-priced copyright lawyers, will the Apple v Samsung case eventually stifle consumer tech product innovation? 

By: Ringo Bones 

Back in August 25, 2012, a US jury in a California court decided that South Korea based tech giant Samsung should pay Apple 1.05 billion US dollars for copyright infringement – i.e. the jury found Samsung guilty of copying critical features of rival Apple products for use in manufacturing their mobile smartphone and tablet computer line – for profit. Sadly, it is we – the consumer – who are bound to loose in titanic corporate battles such as these that involve copyright infringement and arcane patent laws, because the expense of such courtroom dramas are directly passed on to us. 

Money that should have been spent on innovation – as in research and development or R N’ D - by the two tech giants are now destined to be spent on high-priced copyright lawyers. And in the complex world of patent law legalese, money merely paid to a high-priced copyright lawyer doesn’t have any return of investment. For all intents and purposes, it is a dead end investment. Thus consumers could be facing higher-priced mobile smartphones and tablet computers during their holiday shopping sprees right up to Christmas.

But here in the Far East, Samsung holds the lion’s share of the market in mobile smartphones and tablet computers because on average, their products only cost one third that of equivalent Apple i-Phones and i-Pads - especially here in Singapore and Hong Kong. Sadly, by the close of the Monday August 27, 2012 trading day, Samsung’s stocks took on a nosedive that resulted in 12 billion US dollars being wiped off the South Korea based tech giant’s value. 

Was There An Economic Trickle-Down Effect of the London 2012 Olympics?

Economists say it may yet be too soon to tell, but will there ever be a real economic trickle-down effect of the London 2012 Olympic Games to the host city’s economically disadvantaged residents? 

By: Ringo Bones 

Ever since the modern Summer Olympic Games went commercial back in 1984, many a host city has been relieved of the insurmountable burden of debt after hosting the event. But have economists ever wondered – or even in their wildest dreams contemplated of doing a study - if there ever was a real economic trickle-down effect of hosting the Olympic Games to the host city’s most economically disadvantaged residents? 

As the London 2012 Olympics came and went, many of the world’s top economists have wondered whether Stratford East London had truly been economically reinvigorated by the recent event. The area has been recognized not only as London’s most ethnically diverse neighborhood but also the most economically least well-off. Yet, almost all of the under-35 population remains hopeful that the recent Olympic Games will eventually reinvigorate the small businesses of Stratford East London. 

But older residents who have witnessed first hand the Hugh Grant / Julia Roberts Notting Hill debacle fears that Stratford East London, and other economically least well-off parts of London, will experience the brunt of gentrification during the next few years. Almost all Brazilian immigrants who are former Notting Hill residents can no longer live there because they have been “gentrified out” by high property prices. Looks like the gentrification issue will make the unhealthy product sponsors McDonald’s, Heiniken and Coca Cola the more lasting economic issue of the London 2012 Olympics.  

Post Lock-Up Facebook Stocks: Still Economically Viable?

With its stock price now about 50% of what it was during its initial May 18, 2012 IPO, does Facebook still represent an economically viable part of one’s stock portfolio? 

By: Ringo Bones 

As the post lock-up period trading of Facebook stocks now values it at a bit above 50% of its May 18, 2012 initial IPO flotation period, it seems that the famed social media network has been “unfriended” by corporate bigwigs, directors and seasoned stock market investors as the 90-day lock-up period expired back in August 16, 2012. But will everyone taken by the irrational exuberance of Facebook’s May 18, 2012 IPO be dumping their stocks like its going out of fashion? 

To the uninitiated in stock-market investing, lock-up period is the length of time that prevents shareholders unloading their stocks to the market so close to the IPO floatation period. Lock-up period laws are primarily designed to prevent the stock market from being swamped with pre-owned shares whose value may or may not rise by the end of the lock-up period. 

At present, Facebook still really has a lot going for it because over 7% of the world’s population are using / accessing their Facebook accounts via mobile devices and/or mobile smart-phones. Despite share prices on the decline, the lucrative mobile adverts on Facebook are still economically viable for the famed social media network. But seasoned investors’ concerns over the earning potential of Facebook justifying its 38 US dollar a share IPO will probably occupy their minds. After all, it is not that long ago that everyone was taken for a ride of the irrational exuberance of the dot com boom of the late 1990s. 

Standard Chartered: Standard For Money Laundering?

Though the investigation is still on-going, does the recent New York State Department revelation on the extent of Standard Chartered’s secret money laundering scheme with Iran undermine everyone’s already shaky trust on banks and other financial institutions? 

By: Ringo Bones 

Despite denying the allegations, shares of standard chartered drop as much as 15% in London trading due to the recently revealed reports by the New York State Department that Standard Chartered – their New York branch - did more than 60,000 secret transactions worth over 250 billion US dollars over the last 10 years. Even more damning is the evidence showing that Standard Chartered also actively hid proof of dealings with Iran in clear violation of the established economic sanctions by the US government. Given the evidence uncovered so far, will Standard Chartered’s dubious code of conduct undermine our (as in we, the 99% with a large chunk of our pension funds probably tied-up in this financial scheme) trust in banks and other financial institutions? 

Sometimes I wonder if this financial institution already got reputational risk insurance since Standard Chartered’s apparent lack of due diligence in doing their financial transactions had created conditions in which fraudulent dealings occurred during the last 10 years in clear violation of the federal government’s established economic sanctions against a designated rogue state like Iran. Truly - an unprecedented example of a moral hazard that could stain the reputation of banks and other financial institutions in the austere fiscal environment of our post global credit crunch world. 

And Standard Charterd’s clear breach of economic sanctions against Iran could have far reaching financial consequences because even though the bank is UK based – it does 2/3 of its business here in South-East Asia which could cause a trading turmoil not seen since the Asian financial crisis of 1997. And given the already revealed evidence by the New York State Department, this financial cloak and dagger doesn’t have a semblance of a happy ending whatsoever. 

HSBC: The World’s Money Laundering Bank?

As the current US Senate investigation continues to uncover HSBC’s been laundering money of dubious clients, will Europe’s largest bank be now known as the: “World’s money laundering bank”? 

By: Ringo Bones 

Well, I was really surprised when the BBC aired a news item in July 17, 2012 that uncovered that HSBC – the: “World’s local bank” – according to their adverts are engaging in money laundering for over ten years according to a recently released report by a US Senate investigation. A US senator who led the investigation even said that the corporate culture at HSBC is “pervasively polluted”. The bulk of the money laundering investigation primarily focused on HSBC American arm laundering the drug / narco profits of Mexican drug cartels – which was recently uncovered to be as much as 7-billion US dollars between 2007 and 2008. Will this recent money laundering investigation be the ruin of the “world’s local bank”? 

Given that HSBC primarily deals with private clients, the recent US Senate investigation could be quite damning to the reputation of Europe’s largest bank due to the fact that the investigation also uncovered that HSBC’s regulators failed to take action. Other “suspicious funds” are also under investigation – including suspected Al Qaeda sourced funds that date back 10-years ago and scores of “secret financial dealings” with states currently under UN sanctions like Iran and Syria. 

Facebook Adverts: A Waste of Money?

Are companies wasting their money buying Facebook adverts given that the majority who chose to click the “like button” are either fake Facebook profiles or users who have no interest in the company’s products or services whatsoever? 

By: Ringo Bones 

A recent investigation recently uncovered by the BBC had recently uncovered a somewhat sobering fact about companies paying good money to buy advertising on Facebook and other leading social media. Majority of users who chose to click the “like button” are either fake Facebook profiles or users who have zero interest whatsoever on the company’s products and services being advertised – i.e. just clicking the like button at random. But does this mean that companies buying advertisement time on Facebook and other leading social network sites are just really wasting their money? 

A recent investigation done by the BBC shows that a typical company buying a Facebook advertisement space has on average gets 3,000 like clicks during the first 24 hours of their ads being uploaded. Companies based on the United States and Europe - some that don’t even have brick and mortar shops in the more “austere” parts of South-East Asia and Africa – usually still get a lot of like button clicks from these places. Is this really a tad suspicious from an I.T. standpoint? 

Sadly, the powers-that-be running Facebook still doesn’t give a rat’s ass about fake profiles and users because these fake Facebook users still fatten the famed social network’s bottom line. Unless these fake Facebook users violate the social network’s established community standards – they will more likely continue to opt to choose to click the like button at random. Like are there really high-end audio enthusiasts in the Sudan who also share my passion on single-ended triode amplifiers?

Barclays LIBOR Rate Manipulation: In Banks We Trust?

Though this somewhat riveting financial news story is still developing, will the 453-million US dollar fine and subsequent civil lawsuit against Barclays for interbank lending rate manipulation herald a more transparent banking system? 

By: Ringo Bones 

The recent LIBOR Rate manipulation scandal first came to light to us in the general public when the major news providers did an investigative news reporting on Barclays being fined 453-million US dollars back in June 28, 2012 for manipulating the interbank lending or LIBOR Rate. Whether this will lead to increased transparency to the world’s banks and other financial institutions is still open to debate since this recent “financial scandal” could yet become another long-winded economic / financial epic akin to the recent Greek Debt Crisis. 

Leading tenured economists now cite that the very way the LIBOR Rate is regulated is very much outdated – compared to back in 1984 - in our somewhat austere economic climate of our post 2008 Global Credit Crunch world. But Barclays admitting of the “financial master stroke” of LIBOR Rate manipulation looks suspiciously criminal from the FSA’s point-of-view. 

By July 2, 2012, Barclays chairman Markus Agius – who held the position since 2006 – resigns as the rate fixing scandal ripples throughout the financial world. The next day, Barclays CEO Bob Diamond resigns after accusations of using Markus Agius as a “fall guy” on the LIBOR Rate fixing scandal became headline news in the financial world. And by the way, Markus Agius is also the head of the UK Banking Association. As the Barclays’ “top brass” reshuffles, the FSA cited that Barclays conduct was so serous and widespread that the agency also placed the RBS and HSBC under their watch list for complicity with Barclays on the LIBOR Rate fixing scandal. So what is this “LIBOR Rate” anyway? 

LIBOR Rate is defined as the rate at which an individual Contributor Panel bank could borrow funds, where it is to do so by asking for and then accepting inter-bank offers in reasonable market size, just prior to the 11:00 AM London time deadline. The rate at which each bank submits must be formed from the banker’s perception of cost of funds in the interbank market. The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. It is usually abbreviated to LIBOR or Libor, or more officially to BBA Libor for British Bankers’ Association Libor or the trademark bba libor. It is a benchmark – along with the Euribor – for interest rates all around the world. 

LIBOR Rates are calculated for different lending periods – overnight, one week, one month, two months, six months, etc. – and published daily at 11 AM London time by the British Bankers’ Association. Many financial institutions, mortgage lenders and credit card agencies set their own rates relative to – and typically higher than – the Libor. The current procedure of determining the LIBOR Rate was introduced back in 1984 when it became apparent that an increasing number of banks were trading actively in a variety of relatively new market instruments – namely: interest rate swaps, foreign currency options and forward rate agreements. 

Back in July 4, 2012, then Barclays CEO Bob Diamond declared that he is not resigning without a fight and that he may divulge evidence that UK financial regulators – including the Bank of England’s deputy governor Paul Tucker of giving Barclays the carte blanche – i.e. full discretionary powers – to reduce the somewhat high LIBOR Rate that was strangling the UK economy during their “wink-and-nod” laden phone call. Bob Diamond is due to be “grilled” by the MPs whether the Bank of England and Whitehall officials will be implicated in the recent LIBOR Rate manipulation scandal is yet to be determined. While the UK’s Serious Fraud Office (SFO) launches its own LIBOR Rate manipulation investigation.  

At present, the LIBOR interbank lending key rate plays a major role in global financial markets. But many tenured economists cite LIBOR as an anachronism and it doesn’t really work in practice. And the oft-cited proof of this was the global market events that lead to the 2008 Global Credit Crunch. Does the LIBOR Rate need to be reformed or to be replaced entirely by something more suitable to our increasingly globalized financial markets?