The predictions of an economic collapse in Europe were premature. Area research firm Markit released manufacturer purchasing activity for January. The numbers for France improved, although many experts have worried that its GDP has begun to contract. Germany’s data were particularly strong. A recession in Germany could cut off any hope that the nation will contribute huge sums to a permanent bailout facility for the region’s financially weak nations. Most surprisingly, the PMI for the entire eurozone was up slightly. A renewed European Union recession has not yet begun.

Finance Ministers Say No

The other major development in Europe was that EU finance ministers rejected a settlement between Greece and private investors in its sovereign paper. That makes a default slightly more likely. Private investors are represented by the Institute of International Finance. The body had set a deal that would drop the value of the Greek bonds they hold by a nominal 50%. Actually, the number is closer to 70% when changes in yield and term are taken into account. In exchange for their sacrifice, these investors want a coupon of 4% or slightly better on new paper. Finance ministers for the region claim Greece cannot sustain that level of payout, and they will only accept one closer to 3%.

Texas Instruments Earnings

One of the world’s most important tech companies, Texas Instruments (NYSE: TXN), announced earnings. The results showed that the industry may have begun a broad rebound. The firm makes an extremely broad array of chips for smartphones and consumer electronics devices. The report caused shares in the company to rise. CEO Rich Templeton said, “Revenue in the fourth quarter was higher than expected across all our major product lines, reinforcing our belief that we’re at the bottom of this downturn. I’m pleased to say that despite the downturn and the lower factory utilization that came with it, cash flow from operations was strong and well above levels as compared with similar points in prior downturn.” TI’s chips are not only broadly used, based on devices that run them. The firm also has huge operations overseas. The company issued an optimistic forecast as well.

YouTube Views

It may not count for much financially, but users of Google’s (NASDAQ: GOOG) video site YouTube now generate four billion views a day. The number is higher by 25% in just eight months. Google has not shown that YouTube is a major contributor to revenue or profit. That disappoints investors who hope to see the company diversify its revenue well beyond search advertising. YouTube has set up “premium channels” for visitors who want to watch content like music videos. It also has set a new video rental service with some of the largest media companies. The site remains, however, largely a collection of poor quality, user-created, amateur video clips.

Douglas A. McIntyre

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