Finance Blog number 1

Treasuries fell for a second day on speculation record-low yields will curb demand when the U.S. auctions $99 billion of coupon-bearing debt beginning tomorrow.

The government plans to start the sales with $35 billion of two-year notes, followed by the same amount of five-year debt on May 23 and $29 billion of seven-year securities on May 24. Seven-year yields slid to 1.135 percent May 18, the least ever, raising concern U.S. bonds are becoming too costly. German and French finance ministers plan to meet today on the euro, after Europe

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Greek President Karolos Papoulias will today take on the task of trying to persuade political leaders to form a government and avert a new election amid mounting concern the country may leave the euro area.

Evangelos Venizelos, the socialist Pasok leader, will return the third, and final, mandate to form a government to Papoulias at a meeting in Athens today, after Alexis Tsipras, the leader of the biggest anti-bailout party, Syriza, turned down an appeal to join a unity government.

Tsipras

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Voters in Greece and France challenged austerity as Europe

European Central Bank officials voted Thursday to hold interest rates steady, even as the euro area economy slides towards recession. But ECB president Mario Draghi appeared to hint that there could be rate cuts in the future.

In a widely expected move, the ECB left its main overnight lending rate at 1%, a level the bank has maintained since late last year.

The Governing Council of the Frankfurt-based ECB met in Barcelona as the economic outlook in the eurozone has deteriorated.

Speaking to reporters after the meeting, Draghi said the ECB’s policies remain "accommodative" in light of the economic data from the first quarter. But he acknowledged that more recent economic indicators highlight the uncertain outlook for the eurozone.

Draghi noted that economic activity was "stabilizing" in the first quarter but that more recent data shows "uncertainty prevailing."

While he stressed that interest rates are very low and liquidity is abundant, Draghi said several times that "any exit strategy remains premature." ECB policymakers will be "clearer in our assessment" at the council’s next policy meeting in June, he added.

"The ECB does appear to be leaving the door open to an eventual further interest rate cut," said Howard Archer, chief UK and European economist at IHS Global Insight.

But monetary policymakers will probably not act until economic conditions have deteriorated further, according to Archer. "Unfortunately that could very well happen," he added.

Europe: ‘Dark clouds on the horizon’

Meanwhile, the ECB is under pressure to intervene in financial markets as investors have been rattled by renewed concerns about the euro debt crisis.

In response to a question on the ECB’s controversial bond buying program, Draghi simply said the so-called securities market program, under which the ECB purchased billions of euros worth of government debt last year, is "an important instrument."

But he stressed that eurozone governments still need to reduce debt and take steps to increase economic competitiveness.

"These mechanisms are useful, but they cannot replace either fiscal consolidation or structural reforms as the way to go back to stability," said Draghi guaranteed personal loan approval.

The ECB has taken unprecedented steps to support the economy.

In two separate operations, the ECB funneled more than 1 trillion euros worth of ultra low-cost loans into the banking system starting late last year. The two long-term refinancing operations, or LTROs, helped prevent a credit crunch in the banking system.

The LTROs also appeared to drive down borrowing costs for troubled euro area governments including Italy and Spain. But the effects of the lending program have waned and some investors are now calling for the ECB to do more.

Spain, for example, confirmed earlier this week that it officially slipped back into recession in the first quarter. Meanwhile, unemployment in the 17-nations that use the euro edged up to 10.9% in March — the highest level since the common currency was introduced in 1999.

In addition to Spain, several other eurozone economies already struggling with recession including Italy, Ireland, Greece and Portugal.

Eurozone unemployment hits record 10.9%

Overall, the eurozone economy is widely expected to suffer a mild recession this year as austerity — budget cuts and tax hikes — take a toll on growth.

The bleak economic climate has raised concerns that austerity is doing more harm than good, and a growing number of policymakers have been calling for reforms to boost economic growth.

For his part, Draghi seemed to suggest that policymakers need to do both.

"We have to put growth back at center of agenda without any contradiction to the need to preserver in fiscal consolidation," said Draghi.

He supported calls for a "growth pact" to compliment the "fiscal pact" that euro area leaders signed late last year.

Draghi said the growth pact should emphasize polices aimed at opening up eurozone labor and product markets to increased competition. At the same time, Draghi said targeted spending on infrastructure projects will help create jobs in the public sector.

"We need a common European discipline in doing these reforms," he said.  

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Apple Inc. risks losing the right to use the iPad trademark in China, a senior official suggested Tuesday, as a Chinese court was seeking to mediate a settlement between the technology giant and a local company challenging its use of the iPad name.

Yan Xiaohong, deputy director of the National Copyright Administration, told reporters in Beijing that the government regards Shenzhen Proview Technology as the rightful owner of the trademark for the popular tablet computers. His remarks could add to pressure on Apple to find a solution to the standoff.

Yan’s comments followed news that the Guangdong High Court in southern China is seeking to arrange a settlement in the case. In late February, the court began hearing Apple’s appeal of a lower court ruling that favored Proview in the trademark dispute.

“The dispute between Apple and Shenzhen Proview concerning the iPad trademark is going through the judicial process,” Yan said in a news conference carried on the Internet.

But he added that “according to our government’s laws, Shenzhen Proview is still the lawful representative and user of the trademark.”

China has sought to showcase its determination to protect trademarks and other intellectual property, but with hundreds of thousands employed in the assembly of Apple’s iPhones and iPads is unlikely to want to disrupt the company’s production and marketing in China.

Ma Dongxiao, a lawyer for Proview said the company had expected all along to settle with Apple, with the key sticking point being the amount of money involved.

“It is likely that we will settle out of court. The Guangdong High Court is helping to arrange it and the court also expects to do so,” Ma said in a phone interview.

Court officials contacted by phone said they were not authorized to comment on the issue to foreign media.

“Given the wide implications of this case we need to wait to see the final ruling of the court, which will decide the ownership rights for the trademark,” Yan said. “We will proceed with the case in a prudent manner.”

He said commercial authorities that had received complaints about Apple’s use of the iPad trademark were collecting evidence.

“Once the ruling emerges we will handle the case according to the evidence we have,” he said.

Chinese courts often try to mediate agreements out of court. But it is unclear whether Apple is open to that option.

Proview, a financially troubled maker of computer displays and LED lights, says it registered the iPad trademark more than a decade ago. Apple says Proview sold it worldwide rights to the iPad trademark in 2009, though the registration was never transferred for China.

Proview’s other worldwide trademarks for the iPad name were owned by another subsidiary of the Proview Group, Taiwan-based Proview Electronics. But the mainland China trademark was registered by Shenzhen Proview.

An Apple spokeswoman, Carolyn Wu, said the company had no new comment on the possibility of a settlement with Proview.

In a statement, Apple reiterated its earlier insistence that it would never “knowingly abuse someone else’s trademarks.”

The statement adds that Proview “still owe a lot of people a lot of money, they are now unfairly trying to get more from Apple for a trademark we already paid for.”

___

Researcher Fu Ting contributed to this report.

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A sexy, award-winning smartphone is going on sale Sunday at half the price of the iPhone, and it’s launching on a blazing fast 4G network.

What’s the catch? Two things: The phone, called the Lumia 900, is made by Nokia — and it’s running Microsoft’s Windows Phone software.

They may be household names, but Microsoft (, Fortune 500) and Nokia () are unproven in the U.S. smartphone space. Nokia hasn’t ever sold a major smartphone in the United States, and it has been almost invisible in the North American market for the past five years.

Meanwhile, Microsoft had a big, expensive, but tepidly received launch of Windows Phone 7 in late 2010. The software giant has actually lost market share since then.

Putting Microsoft and Nokia’s efforts together to create a third major challenger to the iPhone-Android smartphone duopoly is kind of like putting Linux on a Sony () Vaio to take a run at HP (, Fortune 500) and Dell (, Fortune 500). In the United States, Apple (, Fortune 500) and Google (, Fortune 500) control a combined 80% share of the smartphone market, according to comScore. Microsoft has less than 4%.

But if ever there were a time to make a run, it’d probably be now.

The Lumia 900 is a visually dazzling smartphone that’s generating a lot of chatter after it took home the Best of Show award at this year’s Consumer Electronics Show in Las Vegas. Windows Phone has already gone through its first major update to clear away the early bugs and has 77,000 apps in its app store. And Nokia’s phone is compatible with AT&T’s new ultra-fast 4G LTE network, making it the first LTE-capable Windows Phone device.

To top it all off, AT&T (, Fortune 500) is selling the Lumia 900 for just $100.

The iPhone is a nightmare for carriers

"We have a great amount of consumer buzz, so we feel good about our ability to take off in a really big way," said Chris Weber, president of Nokia’s North American business. "But we’ve got to have a great device that is super compelling to do that. We think we have that."

As Microsoft’s Aaron Woodman, the company’s Windows Phone director, put it: "There is an enormous amount of momentum, and now is the time to strike."

The Lumia 900 is not the first Nokia Windows Phone device to launch in the United States no fax payday advance. That was the Lumia 710, an entry-level device that went on sale on T-Mobile’s network in January.

But Nokia’s new Lumia 900 device is the first Windows Phone that stacks up well against the big boys — the iPhones and the Samsung Galaxies of the smartphone world. Nokia’s expensive ad campaign for the phone goes for the jugular, attacking the iPhone’s Antennagate issue, as well as rival smartphones’ fragile cases and poor screen performance in sunlight.

The jabs play to Nokia’s strengths. Cased in a polycarbonate shell, the Lumia 900 lacks any paint — it is blue, black, or white all the way through, making the device appear scratch- and crack-resistant. It feels solid, though at 5.6 ounces it’s a bit on the heavy side. The device’s large, eye-popping screen performs quite well outdoors.

But is that enough to persuade former Android and iPhone customers to switch?

Microsoft thinks they’re ready.

"There is a sense of fatigue with Android, which really makes you do a lot of work — that’s true for Apple as well," Woodman said. "Since we arrived late to the game, that allowed us to solve a lot of problems that people were having with their smartphones."

Microsoft thinks sales will really take off after Windows 8 launches later this year. The company’s reimagined Windows for PCs will look and feel a whole lot like Windows Phone.

Windows 8: It’s a game changer

"A successful Windows 8 and a congruent platform across phone, tablet, PC, TV and cloud is the vision they are going for," said Al Hilwa, analyst at IDC. "That is going to take a few years to execute on."

That means Microsoft will have to be patient — but it’s always been willing to play the long game. It plowed billions into its Xbox division, which was unprofitable for years, and continues to lose billions each year on Bing and its online services.

"The critical question is, ‘Will they be able to ride out short-term failures and moderate successes with the aim of creating a long term viable third ecosystem?’" said Jagdish Rebello, director at IHS iSuppli. "I believe that the answer is yes."  

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JetBlue says the crew of Las Vegas-bound flight 191 _ which had to make an emergency landing in Texas because of the strange and frightening behavior of its pilot _ will remain quiet about the incident.

“We understand and appreciate everyone’s desire to hear directly from the crew regarding their experience, but the crew has decided to decline all media opportunities in order to spend time with their families,” JetBlue Airways Corp. said in a statement Friday.

The flight Tuesday that started in New York proceeded normally for most of the trip. But pilot Clayton Osbon became increasingly incoherent, left the cockpit and later sprinted down the cabin yelling jumbled remarks about Sept. 11 and Iran, documents and witnesses say. Co-pilot Jason Dowd brought an off-duty JetBlue captain who was flying as a passenger into the cockpit to assist and locked the door.

When Osbon tried to re-enter by banging on the door, the co-pilot gave an order through the intercom to restrain Osbon, according to the documents, which don’t mention Dowd by name. Passengers wrestled Osbon to the ground, and Dowd diverted the flight from New York to Amarillo, Texas. No one onboard was seriously injured.

Dowd’s quick thinking and calm management of the emergency landing brought comparisons to `Miracle on the Hudson’ Capt. Chesley Sullenberger. The pilot’s bizarre behavior also drew references to another crewmember’s behavior that JetBlue likely would like to forget.

In 2010, JetBlue flight attendant Steven Slater pulled the emergency chute on a flight after it landed at John F. Kennedy International Airport. He went on the public-address system, swore at a passenger, grabbed a beer and slid down onto the tarmac. He was sentenced to probation, counseling and substance abuse treatment for attempted criminal mischief.

JetBlue is encouraging the public to send messages to the crew of Flight 191 through its blog at http://blog.jetblue.com.

Source

Spain

TaxMasters, the Houston-based firm that advertises it can help consumers facing problems with taxes, filed for bankruptcy protection Sunday.

The firm, which had a prominent ad campaign featuring CEO Patrick Cox on numerous cable networks, has already been facing complaints from the attorneys general of Texas and Minnesota, which accused it of deceptive practices.

The complaint from Texas Attorney General Greg Abbott, first filed nearly two years ago, brought a slew of consumer accusations against TaxMasters (). The civil trial in that case finally got underway Monday afternoon when TaxMasters’ request for a continuance was denied.

The Texas charges included unlawfully misleading customers about their service contract terms, failing to disclose its no-refunds policy, and falsely claiming that the firm’s employees would immediately begin work on a case. Sometimes the fact that TaxMasters did not actually start to work on a case until customers paid in full meant that taxpayers missed significant IRS deadlines.

Tax breaks for the unemployed

The complaint from Minnesota Attorney General Lori Swanson, filed in December 2010, alleges TaxMasters got customers to pay advance fees of $2,000 to $8,000 by misstating the help it would provide people with unpaid tax bills. In some cases, the company claimed it could reduce people’s tax bills by up to 90%, but then delivered little or no help, according to the complaint, pocketing the non-refundable deposits.

This complaint was settled in August of last year, with TaxMasters denying any wrongdoing but agreeing to reform its business practices in the state and pay $500,000.

In addition, the Better Business Bureau says it has received more than 1,000 complaints about TaxMasters over the course of the last three years.

The bankruptcy filing said TaxMasters owes creditors between $1 million and $10 million, and that its assets total only $50,000 or less. It did not list its creditors but it said it owes money to between 1,000 and 5,000 people and businesses payday loan.

Robert McKenzie, a tax attorney and partner with Chicago firm Arnstein & Lehr, said this is the third such tax settlement service to go bankrupt recently, following the demise of Roni Deutch and another firm, JK Harris. All three had been actively advertising their services.

"There are certainly reputable people doing this work," said McKenzie. "The problem with the ones that are failing is they’ve budgeted large amounts for advertising, and the intake interviews are done not by tax professionals but by sales people working on commission, and thus making unrealistic promises."

The company’s most recent financial reports show it spent nearly $16 million on advertising in 2010, eating up about 37% of its revenue. Among the networks TaxMasters advertised on was CNN, one of the parents of CNNMoney.

TaxMasters recently restated results to show a $4.7 million loss in 2010, and essentially break-even results in the first quarter of 2011, the most recent quarter for which it has reported results.

McKenzie said that the Internal Revenue Service is willing to settle cases for less than the taxes owed, but that in almost all the cases they end up taking the taxpayer’s home and other assets, in addition to payments out of future earnings. He said almost three-quarters of taxpayers who apply to pay less than they owe have those applications rejected by the IRS.

Beware of tax scams

Calls to Taxmasters and its attorney for comments about the bankruptcy filing and complaints were not immediately returned.

The company’s Web site made no mention of the bankruptcy filing Monday, even though it had signaled a bankruptcy filing was planned in a filing with the Securities and Exchange Commission on Friday.

The bankruptcy filing was made in Houston. 

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The Reserve Bank of India