COMMENTS - 2013/03/31

WEEKLY BLOG COMMENTS – No.57

DATES: 2013/03/24– 2013/03/31

ANALYST: Domingo Trassens

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Dear Friends:

Hello! Today I would like to share with you a series of comments posted by myself in the WSJ Journal Community during the last seven days about:

- Mark Zuckerberg’s plans to enter into the political area;

- John Kerry’s trip to Afghanistan;

- The deals of Dell Inc. to go to private;

- First Holy Thursday of Pope Francis;

and other news about politics, economy and business in United States and the rest of the world.

The comments are organized in the following sections: United States, Europe, The World (Asia, Africa, Middle East…), Latin America, Economy, Business and Technology, and Nature.

DAT, April 31, 2013

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THEME:  United States

Story: Facebook's Mark Zuckerberg Starting Political Group

Subject: Mark Zuckerberg, CEO Facebook, plans to enter into the political arena through the debate of immigration.

My Comment: It is not the business of Mr. Zuckerberg to advise Republican and Democrat senators who are working on a new immigration bill.

When more people - especially celebrities - try to put their "spoon" in the middle of crucial problems, solutions never come. (2013/03/27) 6 Recommendations

Story: College Grads May Be Stuck in Low-Skill Jobs

Subject: A lot of college graduates are working in low-skill jobs according to some social surveys.

My Comment: The subject in discussion is the college graduates working in low-skill jobs or with low-wages.

Since the economic crisis of 2008-2009 the labor situation has changed dramatically. For example during the crisis:

- A lot of companies reduced their payroll replacing employees with automatic technology tools or systems that require less high-qualified workers.

- Other companies merged with rivals, or outsourced some of their operations with contractors who hire technical and professional people working for a low wage or freelancers.

In both cases, the growth of the economy will not increase the level of high-wage employees in a significant way. (2013/03/26)

Story: U.S., South Korea Sign Military Contingency Plan

Subject: The North Korean regime spreads its military threats against South Korea and the United States.

My Comment: The regime of Pyongyang continues with its provocations because the North Korean know China directly or indirectly will protect them.

For this reason, I agree that South Korea always has to be alert.

But I don’t believe North Korea pursues a direct confrontation with the United States. (2013/03/25)

Story: Kerry Visits Afghanistan on Unannounced Trip

Subject: Secretary of State John Kerry met Afghan President Hamid Karzai in Kabul, where Mr. Karzai denied that he talked against United States. The Afghan President said that all was an invention of the press. 

My Comment: After the series of verbal aggressions of Afghan President Hamid Karzai against the United States, the trip of the Secretary of State John Kerry looks like a “peace mission” from President Obama’s administration

Will Mr. Karzai value the new efforts of the White House to manage the relationships between the two countries in a friendly way?

I have serious doubts that it makes sense to continue the dialogue with the Afghan President. (2013/03/25) 2 Recommendations

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THEME:  Europe

Story: French Data Show Economy Still Soft

Subject: French President François Hollande spoke on French TV trying to show that the economy of his country is going well despite weak economic signals.

My Comment: The optimistic speech of President François Hollande on French TV doesn’t look consistent with reality.

He says that he will not increase taxes, but since he assumed the presidency a series of famous rich citizens left the country or changed their citizenship due to the high taxes imposed by his administration.

From the other side, Peugeot-Citroen and other French companies reported weak financial results in the last quarter.

Now this story comments that the French unemployment rate climbed to 10.6%. (Other sources say that is near 15%).

Weak sales of the big companies, high unemployment rate and taxes that push the rich people out the country are not signals of an economic recovery. (2013/03/30) 1 Recommendation

Story: Italy's President Ponders Way to Form Government

Subject: Italian President Giorgio Napolitano ponders alternatives to form a new government.

My Comment: In Italy, the political panorama has been gloomy for a long time. After Berlusconi was forced to resign, Mario Monti worked for months to put the finances of the government in order, but the people complained.

Everybody knew that the mission of Mr. Monti will not be nice. However the people didn’t give him the possibility to finish his work.

After that, the election showed the deep division in their way of thinking by the population.

The only clear conclusion is that the people like to shout but they don’t want effective changes for the direction of the country.

And the only Italian worried about the current political limbo is President Giorgio Napolitano because he doesn’t want to have on his shoulder all the mess. (2013/03/29)

Story: Pope Breaks From Tradition

Subject: The new Catholic Pope broke from the tradition in the ceremonies of the Holy Thursday.

My Comment: Pope Francis started his leadership of the Catholic Church returning to the most important lessons that Jesus gave to his followers in the beginning of Christianity.

The Holy Thursday ceremony was a good demonstration of the message that the new Pope tries to spread across the Christian and non-Christian communities: Humility first! (2013/03/29)

Story: Slovenia Won't Need Bailout, Premier Says

Subject: The government of Slovenia said that it will fix the banking problems without an international bailout.

My Comment: The news says that Slovenia doesn’t need an international bailout and it will fix the problems of its banking sector alone.

It looks good that somebody don’t ask for financial assistance from the EU authorities.

However, the Slovenia’s problems are a new “sign” that the original plan of the European Union was a fiasco because the majority of the EU members had a weak financial foundation when they entered into the community and nobody put effective filters in that moment. (2013/03/27)

Story: Effort to Form Italian Coalition Falters

Subject: The efforts to form a government coalition in Italy were unsuccessful.

My Comment: The “ghost” of Silvio Berlusconi is always present when other politicians want to rule Italy excluding him.

The Italians have to move away from politicians who never fix their deep problems in the right way. (2013/03/27)

Story: Bailout Strains European Ties

Subject: The Cyprus’ bailout generated tense relationships among EU authorities and customers of the banks of the island.

My Comment: The deal to preserve Cyprus in the euro zone shows that after chaotic reactions and panic scenes the EU always extends the “lifeboat” to the member who is “drowning”.

From the other side, the community is losing flexibility and its foundation is shaking in a way that nobody will be able to support for a long time if the parade of sick members continues. (2013/03/26)

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THEME:  The World: Asia, Middle East, Africa…

Comment: Story: Turkey Denies Deporting Syrians

Subject: Some rumors said that Turkey deported Syrian citizens that generated a riot in a refugee camp.

My Comment: Living in a refugee camp is not enjoyable regardless of the humanitarian efforts of the authorities of the country that receive the refugees.

The Syrian population who had the possibility to flee to Turkey or other countries they have to be grateful with the country that received them.

If the refugees create problems, they will close the door to other people who try to find a place for living distant from the battlefield that Syria is today. (2013/03/29)

Story: Abe, Park Share a Vision: Rule With Iron Lady Fist

Subject: The new prime ministers of Japan and South Korea admire the way Margaret Thatcher ruled the UK international relationships several decades ago.

My Comment: Ms. Park says that she admires Margaret Thatcher, but if she wants to rule South Korea with the “Iron Lady fist”, she will clash with the North Korean leader Kim Jong Un.

During the last decade, South Korea grew strong thanks to the advance of a group of its main companies in different industrial and technology sectors across the globe.

It will not be good that due to the war game of North Korea, Ms. Park and her government could be involved in unexpected troubles. (2013/03/28)

Story: Vietnam Fishing Boat Claims Chinese Attack

Subject: Vietnamese fishermen claim against Chinese attack in the South Asian seas.

My Comment: If all the events continue moving in the same direction, in a short time, China will be the ruler of the seas of South Asia.

During the last few years, China grew fast as a solid military and navy power across the region. (2013/03/26) 5 Recommendations

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THEME:  Latin America

Story: Argentina's Two-Front War on Debt and Dollars

Subject: Argentina government faces new international pressure for debts and international compromises that remain unpaid from more than ten years ago.

My Comment: The behavior of the current government of Argentina is a very good sample how the "banana republics" act.

The irresponsibility of the management of public domestic and international compromises is very serious.

The negative attitude of the Rose House administration gives a bad reputation to the country and makes more complicated the agreements with creditors. (2013/03/27) 

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THEME:  Economy, Business and Technology

Story: Dell Makes Case to Go Private in Grim Filing

Subject: Dell Inc is in the process to go private but its future doesn’t look well.

My Comment: After more than one month dealing different ways to go private, now Dell Inc. is worse than in the beginning of the rescue process.

The bidders are only trying to catch the best pieces of a company that was a great promise of success 15 years ago.

The US$24.4 billion offer to go private is less than the market value that Dell Inc achieved during the time it was climbing the hill with its original business model of a direct sales company.

All the last facts show that in this moment Dell is in the decline segment of its life cycle.

Independently of the current deals, the future of the company as a technology maker looks grim.

We cannot imagine a new flourishing period after all the mistakes that Michael and his advisers committed when the inflection point of the PC business marked the start of the decline curve of the personal computers.

In that moment, Michael Dell had to use all the resources of the company to move its business to new heights, but he didn’t have the ability to do this job.

Now Michael Dell is only fighting for his personal survival. He is very busy making calculations how he will pay his bills. He has not more time to focus his mind on the re-creation of his business.

With this panorama, we don’t believe Dell Inc. as a computer maker will survive for a long time. All looks like it is ready to walk soon to the cemetery or dismantlement. (2013/03/30)

Story: Can the Tablet Please Take Your Order Now?

Subject: Digital tablets are using to take orders in a bakery instead of employees who do the same job.

My Comment: It is not new that technology helps to cut job positions in all sectors of the economy.

And for the new generation of users of digital devices it is not a problem to type directly an order on a digital tablet instead of explaining what they want to an employee at a counter of a retail shop or fast food store.

Additionally, the self-service tablets will reduce the waiting time of customers in bakeries and food stores during rush hours.

Definitively, tablets can do the same job as employees who take orders. (2013/03/28)

Story: RIM Swings to Black, Sells a Million Z10s

Subject: In the last fiscal quarter, Research In Motion returned to profitability.

My Comment: Research In Motion (BlackBerry) gave good news reporting a profit of US$98 million in its fiscal fourth quarter after last January it introduced Z10 in the UK, Canada and other markets.

It looks like the efforts made during 2012 to reorganize the company and redefine its smart-phone platform are giving BlackBerry new chances.

At least, thanks to the good features of the Z10 smart-phone and its new operating system, BlackBerry is again fighting with competitors like Galaxy S4, iPhone 5 and Nokia’s Lumia 920.

Now we have to observe if during the current quarter, Z10 helps BlackBerry to increase the sales of new devices in the United States at reasonable levels.

Despite the massive fall of subscribers during the last year, BlackBerry maintains important numbers of customers in some markets across the world. (2013/03/27) 5 Recommendations

Story: Oracle Overhauls Server Line

Subject: Oracle is updating its hardware products based on Sun Microsystems platform.

My Comment: Since Oracle bought Sun Microsystems, we really didn’t hear any important news about hardware from the buyer. I don’t believe that Larry Ellison will be able to revitalize the Sun platform. (2013/03/27)

Story: At 17, App Builder Rockets to Riches From Yahoo Deal

Subject: Yahoo is buying a software company founded by a teenager who is 17 year old.

My Comment: In the technology arena, the current state of art is opening doors to brilliant brains independently of their age, race and social status.

The problem is sometimes the inventions and creations are stolen by opportunists or dealers without ethical principles and those who really are the inventors or creators don’t receive a fair payment for their achievements and contributions.

In this case, according to the information available, Nick D’Aloisio was lucky finding a buyer like Yahoo. (2013/03/26) 4 Recommendations