National / International News

Sprint and T-Mobile eyeing $32 billion merger

Marketplace - American Public Media - Thu, 2014-06-05 06:07

Sprint and T-Mobile, the nation’s third and fourth largest wireless phone operators, may have agreed on a pricetag for merging, according to early reports.

Turns out, sometimes three + four = $32 billion.

That’s how much Sprint could pay to acquire T-Mobile, a merger that would continue a wave of telecom and media consolidation. So how would that affect consumers?

Canalys analyst Chris Jones says T-Mobile has attracted millions of customers in the last year, “with an uncarrier strategy: taking away early termination fees, having zero down on a new phone, and having free international roaming.”

Jones says that if Sprint and T-Mobile become a more dominant carrier, those aggressive incentives might go away.

But Angelo Zino, an equity analyst with S&P Capital IQ, thinks a combined Sprint/T-Mobile would be a lot more competitive on pricing, given the economies of scale.

“That’s gonna put additional pressure on both AT&T and Verizon,” he says. “And that bodes well, we think for customers.”

Zino says price competitiveness could help the merger survive the scrutiny of federal regulators, who now have several potential megadeals on their plates. 

Apple in row over HealthKit name

BBC - Thu, 2014-06-05 06:04
Apple's newly announced health platform HealthKit has been criticised by a firm of the same name, offering similar service.

Arsenal opt out of Fabregas deal

BBC - Thu, 2014-06-05 06:03
Arsenal have informed Barcelona they will not be exercising a buy-back option on former captain Cesc Fabregas.

Rwanda 'protecting Congo ex-rebels'

BBC - Thu, 2014-06-05 05:51
DR Congo accuses Rwanda of "protecting" M23 rebel leaders wanted for war crimes and delaying attempts to interview ex-fighters currently in Rwanda.

VIDEO: House of Commons

BBC - Thu, 2014-06-05 05:49
The Queen's Speech fails to respond to the challenges the country faces, claims Labour.

The number 2,000: Economic lessons from Brazil

Marketplace - American Public Media - Thu, 2014-06-05 05:39

You know I'm a sovereign debt geek, so my number would be 2,000. That's the spread over Treasuries, in basis points, of Brazil's sovereign debt in 2002.

Which — OK! I know that's super-geeky and hard to explain. But let me try!

Back in 2002, Brazil had just elected a leftist president, Lula, and it was right next door to a bona fide basket case, Argentina. It had a lot of short-term debt maturing very soon, and no easy way to roll that debt over, since the capital markets were pretty much closed. (No one trusted Lula.) So in a self-fulfilling prophecy, the markets started pricing in a massive default on Brazilian debt.

What that meant in practice was that you could buy a Brazilian bond — any bond — and its yield would be more than 20 percentage points higher than the yield you could get on a U.S. Treasury bond with the same maturity. Not 20 percent higher, 20 percentage points higher. So if the Treasury bond was yielding 5 percent, the Brazilian bond wouldn't yield 6 percent, it would yield 25 percent.

At the time, no country had ever seen its debt trade at 2,000 basis points over Treasuries without defaulting, and it's easy to see why. At those levels, you can't refinance your debt as it comes due, which means that you have no choice but to default on it.

Except, Brazil proved the exception to the rule. Lula was fiscally conservative, and he appointed a George Soros aide, Arminio Fraga, to run the central bank. Between them, Lula and Fraga managed to muddle through the crisis and get Brazil's debt back onto a sustainable footing. And anybody who bought Brazilian debt in the summer of 2002 ended up making an absolute fortune. (The person who bought the most, and who made the biggest profits? Mohamed El-Erian, then of Pimco, later of Harvard, and later still of Pimco, again.)

I learned a huge amount from this episode. Firstly, and most importantly, just because something has never happened before, doesn't mean it's impossible. Secondly, sovereign debt can be even more volatile and risky than stocks — and provide even bigger profits. Thirdly, policymakers can make an enormous difference. And fourthly, markets aren't always rational, or correct: there's a wisdom of crowds, to be sure, but it has its limits.

So the next time you see a country's debt trading at 2,000 basis points over Treasuries, and you hear me saying that default is inevitable, remind me that I said exactly the same thing back in 2002. And I was wrong then.

Invisible barcode could fight crime

BBC - Thu, 2014-06-05 05:37
An invisible barcode is being developed that can trace explosives, drugs and bank notes, scientists report.

GM Review Found 'History Of Failures' In Ignition Switch Debacle, CEO Says

NPR News - Thu, 2014-06-05 05:24

Saying an internal inquiry into a long-delayed recall left her "deeply saddened and disturbed," GM CEO Mary Barra says the company has fired 15 people in response to the report.

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VIDEO: Inquiry urged over Irish child deaths

BBC - Thu, 2014-06-05 05:18
Ireland's government is being urged to hold an inquiry after the remains of nearly 800 children were found at a former home for unmarried mothers

VIDEO: US government defends Taliban deal

BBC - Thu, 2014-06-05 05:13
The US Secretary of Defence, Chuck Hagel, has defended the deal with the Taliban, that led to the release of the American soldier Bowe Bergdahl.

Ballot probe reverses Oxford NUS vote

BBC - Thu, 2014-06-05 05:12
Oxford University's student union is likely to remain part of the National Union of Students after allegations of vote rigging in last month's referendum on splitting away.

The Birds And The Bees ... And iPads

NPR News - Thu, 2014-06-05 05:03

Three-fourths of parents say the Internet is forcing them to have "the talk" earlier.

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Spectacular wave tank opens with show

BBC - Thu, 2014-06-05 05:01
A giant new wave and tidal energy research facility - the first of its kind in the world - has opened at Edinburgh University.

McEnroe backs Murray for Wimbledon

BBC - Thu, 2014-06-05 04:59
Seven-time Grand Slam champion John McEnroe says Andy Murray's clay-court form "bodes well" for Wimbledon.

Baseball Man Don Zimmer Dies, Ending An Epic Sports Career

NPR News - Thu, 2014-06-05 04:59

His big-league career began in the 1950s and included the most recent Yankees dynasty. Baseball is mourning Don Zimmer today, remembering a man who loved the game that loved him back.

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Central African Republic Bans Texting, Citing Need For Order

NPR News - Thu, 2014-06-05 04:53

The poor country has been plagued by political turmoil and Muslim-Christian fighting. The government cut off texting amid a new round of violent protests and calls for a general strike.

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When does an American company stop being American?

Marketplace - American Public Media - Thu, 2014-06-05 04:51

It's a fairly common practice among big corporations in the U.S. to keep large portions of their business outside of the country in order to avoid paying American taxes. The process of corporate inversion is usually practiced by companies that earn large amounts of foreign income that is already taxed overseas, though critics say this can cost the U.S. substantial tax revenues they would otherwise receive from American companies.

But if a company that still does business in the U.S. moves operations, or even its headquarters, outside of the U.S., is it still an American company?

The Fortune 500 doesn't think so -- companies that move headquarters outside the U.S. get kicked off their list. On the other hand, the S&P 500 does not remove American companies with overseas headquarters. Allen Sloan, Fortune Magazine's senior editor, thinks his publication has it right.

"The Fortune 500 is supposed to be a list of American companies, and if you decide not to be an American company, we kick you out of the list," Sloan says. "These are companies that want to benefit from the United States, they would just rather have their headquarters in a country where the tax rate is lower."

Though, defining a company's "Americanness" by where they keep their headquarters is a little tricky. After all, Apple and General Electric both hold high ranking spots on Fortune's list, but both companies keep profits overseas and avoid American taxes. Sloan's argument is that location makes a lot of difference, even if just in attitude.

"If you take your headquarters out of the United States, you aren't an American company," says Sloan, "We can argue about degrees about a lot of these companies, but at least they're still acting as if they're Americans and they have some responsibility to the country, whereas these other guys who go overseas, well they want all the protections, they just don't want to pay for them."

In the bigger picture, the law usually catches up to companies using overseas holdings to avoid taxes, forcing them to come up with ever more complicated methods of not paying. The question becomes whether or not there is a way to simplify the tax system and stay fair, or are we stuck with a endless cycle that keeps getting more complicated?

"I don't know how to do it, but I know what's going on is not right," Sloan says. "Having a situation where a company does this or that and is not an American company, but wants to keep all the benefits of being an American company, like having a real legal system, having actual markets that function, you ought to pay for it."

When does an American company stop being American?

Marketplace - American Public Media - Thu, 2014-06-05 04:51

It's a fairly common practice among big corporations in the U.S. to keep large portions of their business outside of the country in order to avoid paying American taxes. The process of corporate inversion is usually practiced by companies that earn large amounts of foreign income that is already taxed overseas, though critics say this can cost the U.S. substantial tax revenues they would otherwise receive from American companies.

But if a company that still does business in the U.S. moves operations, or even its headquarters, outside of the U.S., is it still an American company?

The Fortune 500 doesn't think so -- companies that move headquarters outside the U.S. get kicked off their list. On the other hand, the S&P 500 does not remove American companies with overseas headquarters. Allen Sloan, Fortune Magazine's senior editor, thinks his publication has it right.

"The Fortune 500 is supposed to be a list of American companies, and if you decide not to be an American company, we kick you out of the list," Sloan says. "These are companies that want to benefit from the United States, they would just rather have their headquarters in a country where the tax rate is lower."

Though, defining a company's "Americanness" by where they keep their headquarters is a little tricky. After all, Apple and General Electric both hold high ranking spots on Fortune's list, but both companies keep profits overseas and avoid American taxes. Sloan's argument is that location makes a lot of difference, even if just in attitude.

"If you take your headquarters out of the United States, you aren't an American company," says Sloan, "We can argue about degrees about a lot of these companies, but at least they're still acting as if they're Americans and they have some responsibility to the country, whereas these other guys who go overseas, well they want all the protections, they just don't want to pay for them."

In the bigger picture, the law usually catches up to companies using overseas holdings to avoid taxes, forcing them to come up with ever more complicated methods of not paying. The question becomes whether or not there is a way to simplify the tax system and stay fair, or are we stuck with a endless cycle that keeps getting more complicated?

"I don't know how to do it, but I know what's going on is not right," Sloan says. "Having a situation where a company does this or that and is not an American company, but wants to keep all the benefits of being an American company, like having a real legal system, having actual markets that function, you ought to pay for it."

VIDEO: Record sales at John Lennon auction

BBC - Thu, 2014-06-05 04:50
An auction drawings and manuscripts by John Lennon has made thousands more than pre-sale estimates

Harris 'not a liar for forgetting'

BBC - Thu, 2014-06-05 04:48
TV presenter Sue Cook tells a court that Rolf Harris should not be accused of lying after he forgot about a game show appearance in the 1970s.
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