What Is Important in the Financial World (4/30/2013)
Unemployment in the euro area grew again in March, supporting the obvious conclusion that a lack of stimulus, terribly high unemployment and the crippling of the financial and industrial sectors will keep pulling most countries in the region into an ever deeper recession. Eurostat reports on the euro area unemployment rate:
The euro area (EA17) seasonally adjusted unemployment was 12.1% up from 12% in February The EU27 unemployment rate was 10.9%, stable compared with February.In both zones, rates have risen markedly compared with March 2012, when they were 11% and 10.3 % respectively.
It should be no surprise that Greece was at 27.2% (January), Spain at 26.7% in March and Portugal was at 17.5% last month. These numbers are awful, but they seem modest when youth unemployment is taken into account. The notion that there could be a "lost generation" economically, marked by lack of jobs and the inability to buy consumer goods and services, could well turn out to be accurate as people in their early twenties cannot find work. Based on current economic conditions, they will be unable to for years.
According to Eurostat:
In March 2013, the youth unemployment rate was 23.5 % in the EU27 and 24.0 % in the euro area, compared with 22.6% and 22.5 % respectively in March 2012.
In Greece, the figure in January was 59.1%, and in March the figure was 55.9% in Spain.
Sprint Nextel Buyout
Although it is the frontrunner to buy out of Sprint Nextel Corp. (NYSE: S), Softbank could lose out. Its chief executive officer, Masayoshi Son, claims his offer is superior to one made by Dish Network Corp. (NASDAQ: DISH). But on paper, many people think the Dish offer trumps that of Softbank. Son's advantage for now is that the Sprint board has tentatively accepted Softbank's offer. However, Sprint's board has set a committee to review the Dish offer and, under a confidentially deal, Dish will start to look at Sprint's books. MarketWatch reports on the Softbank bid for Sprint Nextel:
Speaking to reporters at the Japanese company's quarterly earnings announcement on Tuesday, Mr. Son said Dish's $25.5 billion bid for Sprint included "misleading" statements because it didn't compare the deal on the same terms as SoftBank's offer.
"Dish's offer includes statements that are misleading. It doesn't compare apples to apples. I want to better explain to shareholders our offer so that they can properly evaluate it," Mr. Son said.
CEO Jim McNerney said to attendees at Boeing's (NYSE: BA) annual meeting that "The original promise of the 787 is fully intact." His comments were premature. Japan's two largest carriers said that fires started in the Dreamliner's batteries and the resulting grounding of the plane will affect their financial situations. That means the companies may ask Boeing for compensation. According to Bloomberg:
ANA Holdings Inc., and Japan Airlines Co., the world's biggest operators of Boeing Co. 787s, forecast a bigger impact this year from the plane's grounding as they prepare to start commercial flights with the Dreamliner.
The grounding will cut ANA's sales by 9 billion yen ($92 million) in the year ending in March, compared with a 7 billion yen reduction a year earlier. Parking of the Dreamliner fleet will pare Japan Air's operating profit by 2.6 billion yen this year, compared with 1.3 billion yen last year, said Norikazu Saito, a managing executive officer.
McNerney's optimism about the 787 continues to be misplaced.
Filed under: 24/7 Wall St. Wire, Market Close Tagged: BA, DISH, featured, S