Also today: Iceland politicians see the writing on the wall; Malaysia sees currency dip over plethora of Asian worries; Arms dealers get stung in FBI sting.
Starbucks wakes up to the smell of coffee profits
It’s usually the alcohol industry that best gets through a recession, but Starbucks has proved that coffee lovers are no slouches when it comes to digging deep into their pockets to get their favourite brew. The world’s largest coffee chain has tripled profits in its first quarter results ending in December to $241.5 million. In the same quarter a year ago, Starbucks was closing stores and laying off workers after garnering profits of just $64.3 million. But the tremendous revival in fortunes is not because the company’s customers are engaging in binge-drinking caffeine (or not), they’re only putting their money where their mouths are.
Iceland politicians see the writing on the wall
Iceland’s President Olafur R. Grimsson’s rejection of what’s called the Icesave accord has itself been rejected by the island’s ruling coalition parties to prevent the collapse of government. The accord commits Icelanders to repay Britain and the Netherlands $5.5 billion after they stumped up for depositors from their countries who were enticed to invest online with the high-interest bearing Icesave fund, run by one of Iceland’s biggest (and now bankrupt) banks. Global ratings agency Standard & Poor’s has warned that Iceland’s ruined economy will be even more at risk if the nation doesn’t pay up, as this would jeopardise billions more in International Monetary Fund relief funding. Now, the tiny country’s politicians have realised that there are more reasons to cooperate with the outside world than there are not to. Grimsson earlier told creditors that Iceland’s voters would have to decide in a referendum early in March whether the money should be paid back, saying the public don’t want to pay for bankers’ errors of judgment.
Malaysia sees currency dip over plethora of Asian worries
Asian inflation worries are causing central banks to dampen lending, most notably in China, where real estate speculation has threatened to soar out of control. Now Malaysia’s ringgit has slipped, along with a general drop in the dollar value of Asian currencies, over fears that authorities might clamp down on lending and spending. This could affect regional trade, but Asian markets are worried by declines in US stock markets and fears that China will tighten even more, so they’re juggling fixes. India’s rupee also fell on data that showed foreign investors had sold off the local market. But Taiwan’s dollar advanced slightly after the government indicated a 53% rise in export orders for December 2009, following an increase in the two preceding months. But currency stability is an up-and-down affair in shaky Asian markets. China’s central bank has drained cash from the financial system after its economy roared back to life from the global recession, sending consumer prices skywards. So, as China does, so others have to do, just to stay in the game.
Arms dealers get stung in FBI sting
An FBI sting operation has stung its intended targets, with the arrest of 22 arms industry executives for violating a federal ban on bribes paid to garner foreign business. It’s no surprise that the weapons industry felt the wrath of the US justice department on this score, as arms deals (don’t we know) have a habit of being really dirty, and mostly, filthy. FBI undercover agents posed as African officials wanting $15 million in kick-backs to equip the presidential guard (of which country or countries, we don’t know). The arrested executives all took the bait, making it the biggest prosecution ever of individuals paying corporate bribes, and the first time that US justice officials have used a sting to draw out the felons. It just goes to show that where there are bad guys, the good guys lurk. The FBI has done this sort of thing before, but we can’t tell you who for, as it’s a state secret.
Chinese economy hunts down Japan
China’s economy rose by 10.7% in the fourth quarter from the same period last year, putting a final number in 2009 on the white-hot growth its leaders claimed had brought them booming out of global recession. Many observers had predicted an average annual growth rate of 8% for China, but Chinese gross domestic product grew 8.7% over the whole year, buttressing the decision by China’s central bank to put a curb on bank lending. Most nations are still trying to claw their way back to levels of growth last seen before markets crashed in October 2008, and many are not succeeding. But China’s renewed “economic miracle” might see it surpass Japan as the world’s second-largest economy by the end of 2010. Industrial production and retail sales each rose nearly 20% in December. What’s good for China should be good for the rest of the world, but only if China’s regulators manage to keep rampant inflation from spoiling the party.
Microsoft sues TiVo after TiVo sues Microsoft client, AT&T
Microsoft has filed a law suit against TiVo who filed suit against one of Microsoft’s biggest clients, AT&T. Now that’s clear, Bill Gate’s mob says TiVo has infringed on its video purchasing and delivery patents. It began when TiVo sued AT&T and Verizon last year over numerous patents involving its DVR technology. If that case succeeds, TiVo’s action could collapse AT&T’s U-Verse TV service, which is powered by Microsoft. So now, Microsoft has stepped in to protect its much-valued customer, asking to join the case on the side of AT&T. More than that, it’s decided to launch its own lawsuit against TiVo over intellectual-property licensing. This must have given TiVo pause for thought, but it looks like it’s still going after AT&T, having had a history of winning these types of lawsuits. So, while the future of DVR technology could be at stake, most sane people would just leave it to some poor overworked judge to decide. That’s how some technology gets to be in the market and some doesn’t.
Ireland's population has still not recovered from the Great Famine.