Cyprus and its bailout got a new fan. The International Monetary Fund will contribute one billion euros to the cause. The action may not be much of a risk short term, and Cyprus has seized billions of euros in bank deposits to ensure it own financial health, no matter how shaky. The risk will come as the Cyprus recession deepens. Gross domestic product is forecast to drop as much as 10%, which would put the viability of Cyprus’s finances in extreme danger. According to Marketwatch:
Cyprus and the International Monetary Fund on Wednesday finalized an agreement that will see the institution supplement a 9 billion euro ($11.5 billion) rescue package from its euro-zone partners with a 1 billion euro lifeline, the IMF announced. Under the terms of the agreement, deficit-reduction efforts already under way– estimated at around 5% of GDP — will be supplemented by measures worth an additional 2% of GDP. That includes a hike in the corporate income tax rate to 12.5% from 10% and the tax rate on interest income from 15% to 30%.
New and Old iPhone Rumors
Apple Inc. (NASDAQ: AAPL) was the subject of another round of rumors. This set was led by The Wall Street Journal, which claims its sources say manufacture of the next version of the iPhone will start this quarter. Also part of the rumor mill is an older claim that Apple will build a cheap smartphone to attack emerging markets and for people who will not pay for expensive iPhones no matter where they live. According to the report:
Apple Inc. plans to begin production of a refreshed iPhone similar in size and shape to its current one in the second quarter of the year, according to people familiar with the device’s production, teeing up a possible summer launch for the next version of its flagship device.
At the same time, Apple continues to work with its manufacturing partners in Asia on a less expensive iPhone that could be launched as soon as the second half of this year, these people said. The four-inch device likely will use a different casing from the higher-end iPhone. Apple has been working on different color shells for the phone but its plans remain unclear.
No strong rumor yet about whether it will be called the iPhone 5S or iPhone 6.
BP to Dump Wind Energy
BP PLC (NYSE: BP) must like shale, gas and oil exploration and production better than new age energy sources. It wants to dump its wind operations in the United States. According to Reuters:
BP has put its U.S. wind farm operation, one of the largest in the country, up for sale, marking the continued retreat of big oil companies from renewable energy investments while oil and gas projects offer them better returns.
The British oil company has already sold or earmarked for sale some $38 billion worth of assets, partly to raise funds to pay for its 2010 U.S. oil spill liabilities, but also to reposition itself as a smaller, leaner company with an emphasis on high-margin oil production and exploration. Reports said the sale could raise a further $1.5 billion.
If shale discoveries continue at the current pace, wind may not be viable for decades.
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