What's Important in the Financial World (2/25/2013)
Chinese Manufacturing Slows
China's economy has recovered, or perhaps it has not. The results continue to ping-pong around. The latest data released by HSBC and Markit show preliminary PMI for February for the People's Republic was only 50.4. A reading of 50 is the demarcation between expansion and contraction. Expansion has been the trend over the past several months. The sudden reversal could have several causes. The first among these is that estimates of China's economic activity are notoriously inaccurate because of the quality of the data. The second is that global demand may have slowed due to Europe, Japan and the "uneven" U.S. recovery.
The Wall Street Journal reports:
"The Chinese economy is still on track for a gradual recovery," HSBC economist Qu Hongbin said in a statement. He noted that the February reading still marks the fourth straight month that the index has been above the boom-bust line at 50, showing that manufacturing still grew in February, just at a slower pace than in January.
"The slower pace of manufacturing expansion partly reflects the impact of a week-long Chinese New Year holiday and partly the continued softness of external demand," Mr. Qu said.
The Federal Budget and the States
In an effort to up the ante on budget cut battles with Congress, the White House has released an analysis of state-by-state effects. The release may rally governors to the side of the president, although many of the numbers are no better than a guess. They do not take into account the ability of states to repair their own economies, even if federal aid drops. And, as it true with all other budget estimates, the period over which harm will be done ranges from weeks to months to years.
Federal budget cuts will probably push the U.S. back into recession by damaging states' economies recovering from the worst fiscal crisis since the Great Depression, governors said.
President Barack Obama and Congress need to find a way to prevent $85 billion in across-the-board spending cuts from taking effect starting on March 1, said Republican and Democratic governors who are in Washington this weekend for a meeting of the National Governors Association.
The cuts, known as sequestration, will lead to dismissal of teachers and firefighters, and reduce projected spending by $1.2 trillion over the next nine years, with half in defense spending and half from domestic spending. Governors said the threat of cuts has already damaged their economies, which they said will worsen if the president and lawmakers can't agree.
Sony's Waterproof Tablet
Sony Corp. (NYSE: SNE) wants to be in the tablet PC market. It is tardy. Apple Inc. (NASDAQ: AAPL) and Samsung, along with a number of second tier manufacturers, have been offering products for years. Sony has had little success in PC sales, even at the tradition end of the market with laptops. It is difficult to see how that might change. According to ArsTechnica:
Sony is unveiling a new Android tablet, the Xperia Tablet Z, at Mobile World Congress in Barcelona Monday. Sony claims the tablet is not only the "world's thinnest 10.1-inch tablet" at 6.9 millimeters, but it's apparently waterproof in up to three feet of water for 30 minutes.
Inside, the Xperia Tablet Z has a quad-core 1.5GHz Qualcomm Snapdragon S4 Pro processor, 2GB of RAM, and a 1920×1200 display running Android 4.1 Jelly Bean. (Sony has gone scouts-honor that the tablet will be updated to 4.2 "after launch.") The tablet weighs 495 grams (1.05 pounds) and it has an 8-megapixel rear and 2-megapixel front camera, plus 16GB/32GB storage configurations with a microSD slot than can take up to a 64GB card.
At least it is waterproof.
Filed under: 24/7 Wall St. Wire, Market Open Tagged: AAPL, SNE