COMMENTS - 2013/01/19

WEEKLY BLOG COMMENTS – No.47

DATES: 2013/01/13– 2013/01/20

ANALYST: Domingo Trassens

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THEME: United States

Story: GOP Moves to Extend Debt Ceiling

Subject: The Republicans in the House proposed extending the federal debt limit by three months, changing their previous strategy about the debt ceiling.

My Comment: Sometimes when a storm works against you, you have to take initiatives that you don’t like. From my point of view, the proposal of the House Republican leaders to extend the federal debt limit by three months is only a way to avert a catastrophe for the party in a moment that President Obama is pointing the public against the opposition. (2013/01/19) 1 Recommendation

Story: Panetta Calls for Cooperation on Security

Subject: With the framework of the Algerian crisis, U.S. Defense Secretary Leon Panetta said the U.S. and Europe must work more closely on national-security issues.

My Comment: Cooperation on security is only possible if everybody acts with a responsible attitude and before making crucial decisions, informs the others. According to the information available, it looks like President Hollande sent the French troops to Mali before talking with the other countries and without measuring the possible consequences of his initiative. (2013/01/18) 3 Recommendations

Story: Geithner Sees 'Resilient' Economy

Subject: Treasury secretary Timothy Geithner made his last statement before he leaves the federal government.

My Comment: Before his departure, Treasury Secretary Timothy Geithner wants to demonstrate that he done a good job. However, a fair judgment about his performance as secretary will not immediate. (2013/01/17)

Group Topic: Should Obama's proposals to reduce gun violence be made law?

Subject: President Obama is proposing a new legal package to reduce gun violence.

My Comment: It is great that President Obama cares about the safety of our children, but I think the address of the issue is not the best. Every time that we have a problem, we don't have to rush for new legislation. We have to point against the core of the problem with balance, clear mind and in using all the instruments that our constitution and legal institutions give us. (2013/01/16) 6 Recommendations

Story: Obama Escalates Debt Fight

Subject: In the last press conference of his first term, President Obama asked Congress for a resolution about the debt ceiling on a hard tone. 

My Comment: After the last events related to the fiscal cliff and the debt limit, I decided to follow the last press conference of President Obama in his first term.

From the beginning of his speech, I felt dizzy. I never expected that President Obama will speak in a hard tone and with anger, like in an address as commander in chief of troops who came from the battlefield without energy to continue in combat.

He said: "We are not a deadbeat nation and the consequences of us not paying our bills...would be disastrous." (Okay, this is correct). But immediately, he added: "We're going to have to come up with answers that set politics aside, and that's what I expect Congress to do…"

Everybody knows that raising the debt limit is a duty of Congress, but from my humble point of view, the chief of the White House can use different tone when he talks to the members of Congress. (2013/01/15) 3 Recommendations

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THEME: Europe

Story: U.K.'s Labour Says Tories' EU Plan Is Flawed

Subject: In United Kingdom, the leader of the opposition Labour Party said the investors will think twice before pumping money into UK due to its uncertain future as a member of the European Union.

My Comment: The relationships between United Kingdom and European Union never were easy. It is good that Labour Party asks for definitions to the rest of the political Establishment after all the disagreements between Prime Minister David Cameron and the authorities of the EU.

From my perspective, the world is going to go in the direction to build strong communities of countries. In front of this movement, the nations that decide to remain alone in the future they will be isolated from the rest of the globe.

Till now, there are a lot of problems when two or three countries try to create an alliance. For example, the founders of the European Union made a lot of mistakes that generated the current crisis of the euro zone, but from our own mistakes the human beings learn.

After a series of bruises, we will arrive at the moment that the Planet Earth will be composed by strong communities with common interests and positive economic achievements. (2013/01/18)

Story: Militants Grab U.S. Hostages

Subject: Militants with possible links to al Qaeda took hostages in the attack to a gas field of Algeria after France sent combat troops to fight alongside the Malian army, seeking to uproot an al Qaeda-linked insurgency in Mali.

My Comment: The story says that “Militants with possible links to al Qaeda seized about 40 foreign hostages, including several Americans, at a natural-gas field in Algeria”. Who is the responsible of this new war? His name is France's President François Hollande.

With his hasty attack to the Malian rebels, Mr. Hollande showed to the world his “ignorance” as political leader and supreme commander-in-chief of the French Armed Forces. His miscalculation will be dramatic not only for the French and the Europeans. It will “stain” all of us.

The former Mayor of Tulle doesn’t look with political experience to solve this “mess” alone. He doesn’t have any clue about the differences between giving orders from the Élysée Palace and leading the troops on the African ground like a De Gaulle, Rommel or Patton … (2013/01/17)

Story: Germany's Economy Weakens Markedly

Subject: The German economy contracted by a larger-than-expected 0.5% in the fourth quarter of 2012.

My Comment: The story says that the German economy contracted in the fourth quarter of 2012. When you live surrounded by an environment where everybody sneezes, you sneeze too.

Through the past year the euro-zone crisis shook Greece, Italy, Spain, Portugal and Ireland. Meanwhile also different countries of the Eastern Europe showed negative symptoms. After that Netherlands, Finland and France reflected difficulties.

Till now, Germany didn’t catch the strong flu of the others, but if the economic weather doesn’t change, its “defense” will fall because it is gripped by the same currency. The European Central Bank cannot make miracles. (2013/01/15) 

Story: Attack on Greek Leader's Office

Subject: In Athens, unidentified gunmen fired shots at the offices of the ruling conservative party. There were no injuries and only minor property damage.

My Comment: Today everybody who throws a stone against the office of a politician is categorized as terrorist. But in previous stories from Greece, we saw that a lot of people who act with aggressiveness against the Greek politicians are normal citizens who are angered because they don’t have food to feed their children or fuel to heat their homes. (2013/01/14) 4 Recommendations

Story: Serbia Loosens Grip on Kosovo

Subject:  Serbia adopted a set of guidelines for reconciliation talks with the leaders of Kosovo.

My Comment: If Serbia wants to go forward it has to erase the shadows of the Kosovo war with a pragmatic approach. (2013/01/13)

Story: France Fails to Rescue Hostage in Somalia

Subject: France attempted and failed to free a French hostage held in Somalia. One commando member of the operation was killed and another was reported missing.

My Comment: In the war against terrorist groups, the commando operations to rescue hostages have to be perfect. When they fail, normally the terrorists torture and kill the hostages as revenge. (2013/01/13) 1 Recommendation

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THEME: Asia, Middle East & Africa

Story: Algerian Army Storms Complex, Ending Siege; Some Hostages Killed

Subject: The Algerian government informed that its army has secured control of the natural-gas field where hostages were held by Islamist militants for four days. They recognized that some hostages had been killed during the assault but that they didn’t give a precise final account.

My Comment: After some days of big stress, the situation in North Africa looks better since the Algerian troops took control of the natural-gas field where hostages from different countries were held by Islamist militants.

However, till now it is not clear how many hostages are dead and if some of them remain in the hands of the terrorists. From the other side, nobody says what happened with the militants who attacked the complex: How many died? How many escaped? Where are they now the survivors of the assault?

Also there is not more information about the apparently leader of the terrorist attack: Mokhtar Belmokhtar, a 41 old Algerian who learned the arts of the devils on the Afghan ground and after that returned to his country with the intention to extend the Islamist revolution in North Africa.

As we know, the Saharan region is not only the battlefield of the al-Qaida militants. There are a lot of groups of bandits that participate in the terror war and in the traffic of guns and drugs. Meanwhile, the non-open attitude of political regimes like the Algerian led by Abdelaziz Bouteflika - president of this North African country – doesn’t facilitate any solutions.

Under these conditions, I believe that the landscape will remain dark for a long time making more difficult business among the rest of the world and the North African nations. (2013/01/19)

Story: Fatalities Among Algeria Hostages

My Comment: In the last few days, all the cables from Africa are really tragic. During the weekend, the French failed in the commando operation to rescue a hostage in Somalia. Now, the Algerian military failed in the rescue of the foreign hostages working in the Amenas gas facility. I don’t believe the Algerians alone will free the hostages that remain alive. (2013/01/17) 2 Recommendations

Story: Clinton Calls on Laos to Find Missing Activist

Subject: U.S. Secretary of State Hillary Clinton asked the Laotian government to investigate the disappearance of a prominent social activist.

My Comment: I don’t believe the Laotian government cares a lot for the pressure of the U.S. Secretary of State about the life and security of the social activist Sombath Somphone. In this kind of regime, the independent minds don’t have a place to live in safety. (2013/01/17)

Story: Militants Seize Gas Workers in Algeria

Subject: The assault of the gas station in Algeria came as revenge of the Islamist militants for the decision of the French government to help Malian government against the rebels of Mali.

My Comment: France's President François Hollande shot his gun against the Islamist militants. Now, a new “Holy War” is beginning. The problem is Mr. Hollande is pushing other western countries and international interests into a dark hole due to his Malian war. Probably, the French President has never read History.  (2013/01/16) 8 Recommendations

Story: Somali Insurgents: 'Decided to Execute' French Hostage

Subject: A Somali insurgent group said they have "decided to execute" the French hostage they were holding after an unsuccessful rescue mission.

My Comment: When the commando operations fail, the instinct of cruelty of the criminals increases and normally they take revenge killing or torture the hostages. (2013/01/16) 1 Recommendation

Story: Beijing Fog Prompts State Media to Shift Tone

Subject: In the last few days, the problems of air pollution in Beijing generated a lot of concern in the political environment of China.

My Comment: In the old movies about Beijing, we always saw thousands of bicycles across streets and avenues surrounded by small houses.

Today, every time the TV shows pictures from different Chinese cities, we see thousands of cars, huge buildings and factories, and during the night, colorful streets with fast movement of vehicles from each corner of the metropolis.

Definitively, the economic and social changes pushed by a huge industrial growth without good government planning plus the corruption of the authorities are the determinants of the smog waves. No surprise! (2013/01/15) 1 Recommendation

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THEME: Latin America

Story: Without Chávez, Annual Speech Falls Short—By Nearly Nine Hours

Subject: In Venezuela, the uncertainty continues about the Hugo Chávez’s succession.

My Comment: Definitively, without Hugo Chávez, Venezuela never will be the same country as before. And Venezuelan Vice President Nicolás Maduro doesn’t have the charisma to be the new leader. (2013/01/16) 

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THEME: Economy, Business and Technology

Story: GE's Profit Rises 7.5%

Subject: General Electric Co posted the financial results of its last 2012 quarter in accordance with previous expectations.

My Comment: On Friday 18, the Wall Street ‘s investors moved Dow Jones Industrial Average up celebrating that General Electric Co in the fourth 2012 quarter posted 7.5% climb of its profit compared with a year ago. Will they continue optimist if the problem of the Dreamliner jets of Boeing doesn’t have a fast solution? (2013/01/19) 

Story: Big Payday for Goldman CEO

Subject: Goldman Sachs awarded Mr. Blankfein $13.3 million in restricted stock for 2012, according to a securities filing. His is the highest-paid top executive on Wall Street.

My Comment: Lloyd C. Blankfein – chairman and chief executive of Goldman Sachs Group - doesn’t have to worry about his home bills after all the “tips” he has received. (2013/01/19)

Story: Intel's Aggressive 2013 Spending Plans Spook Investors

Subject: Shares of Intel fell 6% Friday as the semiconductor maker's aggressive 2013 spending plans deepened worries about the near-term profitability of the company.

My Comment: The 14 points that the technology oriented Nasdaq Composite Index dropped on Friday after Intel posted its financial results for the last 2012 quarter and its new spending plans for 2013 shows again the sensitivity of the Wall Street investors to events that are normal in the technology industry.

Everybody knows that 2012 marked a new strategic inflection point in the evolution of consumer technology. During last year the strong advance of the smart-phones and digital tablets hit the PC sales seriously.

Intel was not prepared for the sudden change and now it is suffering the consequences. But this complicated moment of the semiconductor leader doesn’t imply that Intel has not the capability to recover ground. It is positive that it plans new investments for the current year. The pending point is about the Paul Otellini’s succession. The Intel CEO will retire in May and till now it is not clear who will take the “helm” of the company. (2013/01/19) 1 Recommendation

Story: Intel Hurt by PC Shift

Subject: Intel reported a 27% fall of its fourth-quarter profit compared with a year ago, the latest sign that personal computer demand remains weak.

My Comment: The analysis of this story “Intel Hurt by PC Shift” cannot be made only by reading the figures of the financial results of the fourth 2012 quarter of Intel, where the semiconductor maker marks that the revenue from its PC client group declined 6% from the year-earlier period…

We have to take the time tunnel and drive to the 1990s to understand what is happening now. By the way, in 1996, Andrew S. Grove, at that moment President and CEO of Intel Corporation published a book titled “Only The Paranoid Survive” that applies perfectly to the current moment.

The co-founder of Intel and visionary of the technology industry in that moment wrote: “Sooner or later, something fundamental in your business world will change.” The change “can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.”

Next Mr. Grove said: “Strategic inflection points can be caused by technological change but they are more than technological change. They can be caused by competitors but they are more than just competition. They are full-scale changes in the way business is conducted, so that simply adopting new technology or fighting as you used to may be insufficient.”

When Andy Grove wrote these wise concepts about the “changes” of the technology business, he indirectly made reference to the decline of the classic mainframe computers, during the inflection point of the climb of the PCs based on microprocessors.

Now in 2012-2013, after more than sixteen years of a strong march of the PCs, the smart-phones and digital tablets suddenly produced a new strategic inflection point that is shaking the personal computing business and hitting the manufacturers involved in the production of the base-technology of the PCs: the microprocessors.

In front of this new landscape, Intel, the leader of the chips of personal computers doesn’t find a new way. Ironically, it looks that the current Intel CEO Paul Otellini didn’t pay attention to the prediction that another Intel CEO, Andy Grove made before. As Mr. Grove said, the technology business is very susceptible to “changes” and for this reason, only the paranoid survive… (2013/01/18) 1 Recommendation

Story: Nokia Cuts More Jobs

Subject:  The Finnish company said it plans a new job cut as part of a move to outsource its information technology operations to Indian suppliers.

My Comment: A week ago, Nokia informed that the sales of Lumia based on Microsoft Windows 8 are going up and its business walks on the right path. Today, again the Finnish company announces that is cutting more jobs and outsourcing its operations with the Indian HCT Technology and TATA. Before that they sold their headquarter offices. What will happen next week, when the CEO has to inform the financial results of the last quarter to the investor? Maybe after that only the name “NOKIA” remains as property of company. (2013/01/17)

Story: China Begins to Lose Edge as World's Factory Floor

Subject: China is losing its competitive edge as a low-cost manufacturing base, according to different sources.

My Comment: The story says that “China is losing its competitive edge as the low-cost manufacturing base.” This is normal. The bargain’s manufacturers always look for cheaper manpower, suppliers and manufacturing lines: And it is possible, they don't pay taxes and work with slavers.

Today, in South Asia, Africa, Caribbean and Central America, a lot of nations with corrupt politicians and populations sink in misery, there are very good places to emulate the beginning of the Chinese industrial miracle. (2013/01/17) 4 Recommendations

Story: Fire Fears Spur FAA to Ground Dreamliner

Subject: After two battery malfunctions from Boeing's 787 Dreamliner, the Federal Aviation Administration is seeking a corrective action before allowing the grounded aircraft to resume flying.

My Comment: I believe that if everybody is grounding the Boeing Dreamliner fleets, the problem must be very serious. When you are in the sky flying higher, you cannot expect that an angel will protect you in the case of a fire. (2013/01/17)

Story: Suitors Interested in H-P's Autonomy, EDS Units

Subject: Hewlett-Packard has received expressions of interest from potential suitors for its Autonomy business and the EDS unit.

My Comment: This news shows that the management of HP has not a clear idea about the model of company they want.

The acquisition of EDS was an important decision to expand its own services business under the umbrella of “HP Enterprises Services”. Now, it they try to sell the components of this business that belong to the former EDS, they will destroy their own business and they will lose all the effort they made during the last few years to grow in the direction of enterprise services.

About Autonomy, probably it is not a bad idea they sell this package. If they don’t sell it, they have to assume the overprice they paid for this company as a loss and close the case. (2013/01/16)

Story: Slumping Dell Holds Talks to Go Private

Subject: Dell Inc has held talks recently about going private, as the PC maker struggles to find a new course for itself following the end of the personal-computer boom.

My Comment: The news says that “Dell holds talks to go private”. And it looks like its founder and CEO, Michael Dell, who owns about 15.7% of the company, is directly involve in the decision to leave Wall Street.

Personally, I don’t believe this step will fix the problems of the computer maker. In 2000, when I was working as analyst and editorial coordinator of Infochannel Latinoamerica, a computer channel publication, I had the opportunity to talk personally with Mike in the Dell World Conference, in Austin, Texas. In that occasion, I said to Mr. Dell, you made a very good job since 1984 when you founded the company, but the times changed dramatically in the last few years. You have to adopt a business model similar to IBM if you want to continue growing in the right direction: the enterprise computing. Through the consumer PC market, you put out of business other smaller competitors, but through this same road, others will put you out of the business too.

Initially, he understood the idea to focus computer system solutions instead to sell only hardware. In a short time, step by step, Dell was acquiring software and other components of the enterprise solutions like storage systems, communication devices and more. But he never put the PC to the side and the process to enter in the high-profitable technology business was very slow. Recently, in 2009, Dell bought Perot Systems. In that moment, I applauded Mike’s initiative because I thought with the expertise in information services and enterprise solutions of Perot, Dell will achieve the goal.

After all that I am seeing now, I realize that Mike never changed his “PC boy” hat for the “IT solutions apostle”.

In summary, the “PC business” was great 15 years ago, but during the last years like other hardware operations, the assembly of machines became the “cemetery” of thousands or maybe millions of technology pioneers. (2013/01/15)

Story: Web Activist's Suicide Highlights Tech Law

Subject: Aaron Swartz, the 26-year-old Internet activist hanged himself, about three months before going to jail for a range of felonies, and for allegedly using the Massachusetts Institute of Technology's network to download academic-journal articles from a database that charges for access.

My Comment: I agree that when somebody commits a crime has to face up to his guilt. However, the punishment of jail ("possibly more than three decades in prison") for a hacker like Aaron Swartz looks like a wrong penalty for a crime that has to be punished in another way. This shows the Courts frequently really don’t make Justice in the real sense. Probably, in the position of Mr. Swartz, I will take the same fatal decision: kill myself. (2013/01/15) 1 Recommendation

Story: Apple Cuts Orders for iPhone Parts

Subject: Apple Inc has cut its orders for components for the iPhone 5 due to weaker-than-expected demand. Apparently, the competition is hitting its smart-phone operations.

My Comment: Apple is a company with a strong background and long experience in the technology arena, but in the war against Samsung, it looks like a Goliath without the flexibility of its Korean rival. (2013/01/14)

Story: Taiwan's HTC to Sell Smartphones in Myanmar

Subject: Taiwan's HTC Corp is trying to sell its smart-phones in Myanmar with some innovative features to gain a new market.

My Comment: When somebody opens new markets, it has to conquer its new customers with something that differentiates it from the others. I think the initiative of the Taiwanese maker HTC to develop a new input system for Burmese characters to attract the Myanmar’s buyers could be good. (2013/01/14)