The pressure on the financial situation of the weakest nations in Europe continues to grow, and Italy became the latest country to face a sharp rise in borrowing costs. The news ahead of a summit of EU leaders is not likely to change the critical position of Germany, which is against setting bonds that cover all of the union’s nations or a let up in the supervision of austerity plans. Italy’s six-month borrowing costs rose to 2.957% at auction on Wednesday, the highest since December, according to CNBC. Without some new overwhelming action to change the hearts of international capital markets investors, the bonds of nations such as Spain and Italy will be shorted. Money will continue to flow to the sovereign debt of Germany, and more so to the United States. Many experts believe this will cause the European Union to crumble, as well as trigger immediate bailout needs for several nations in the region. So far, those concerns have not been enough for Germany to change its position.
Continuing Success for the iPhone?
The remarkable success of the Apple (NASDAQ: AAPL) iPhone is even more extraordinary when put in the context of its sales in the five years since it was launched. Research firm Strategic Analysts estimates that over the period, the iPhone has generated $150 billion in sales and reached a quarter-billion units shipped. The firm said in a note:
Neil Mawston, Executive Director at Strategy Analytics, said “The iPhone portfolio has become a huge generator of cash and profit for Apple. A quarter of a billion iPhones have been shipped cumulatively worldwide in the first five years since launch and Apple reaches its fifth birthday at the top of its game. However, there are emerging signs that the iPhone’s next five years could get tougher. Some mobile operators are becoming concerned about the high level of subsidies they spend on the iPhone, while Samsung is expanding its popular Galaxy portfolio and providing Apple with more credible competition.”
Much of the handset’s success or failure will depend on the reception for the iPhone 5. The new smartphone will have to have at least two sets of features. The first is the ability to operate on new 4G networks. Most of its competition already does. The other is a price point close to its strongest rival, the new Samsung Galaxy S III.
Low Confidence in U.S. Banks
As the largest banks in the United States prepare “living wills” for the government in the event that any of them should become financially nonviable, Americans continue to lose their trust in banks. According to a new poll by Gallup:
These bleak perceptions of the nation’s banks are consistent with ongoing banking issues worldwide, including the continuing crisis in Europe, particularly regarding European banks. It is also consistent with the major J.P. Morgan trading loss and Moody’s recent downgrade of large global banks, including some banks in the United States.
As a result:
Americans’ confidence in U.S. banks is now at a record-low 21%, down slightly from 23% in the past two years and one percentage point below the 22% found in 2009. The percentage of Americans saying they have a “great deal” or “quite a lot” of confidence in U.S. banks is now about half the pre-recession level of 41%, recorded in June 2007.
Douglas A. McIntyre
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
