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Posts Tagged ‘JPMorgan Chase & Co.’

Article from Bloomberg.

China’s reduction in reserve requirements for banks, the first since 2008, may signal government concern that a slowdown in the world’s second-biggest economy is deepening.

Reserve ratios will decline by 50 basis points effective Dec. 5, the central bank said on its website yesterday. The move may add 350 billion yuan ($55 billion) to the financial system, according to UBS AG.

A report due today may show that China’s manufacturing contracted for the first time since February 2009, and the nation’s stocks had their biggest decline in almost four months yesterday. Premier Wen Jiabao aims to sustain the economic expansion as Europe’s debt crisis saps exports, a credit squeeze hits small businesses and a crackdown on real-estate speculation sends home sales sliding.

“The deceleration of growth may have become faster than expected on increased external uncertainty, a sagging property market” and difficulties for smaller companies, said Liu Li- gang, a Hong Kong-based economist with Australia & New Zealand Banking Group Ltd. who previously worked for the World Bank. The manufacturing report may be “worse than expected,” Liu said.

The Purchasing Managers’ Index may dip to 49.8 for November, a level marking a contraction, according to the median estimate in a Bloomberg News survey of 18 economists. That data is due at 9 a.m. local time today. Consumer price gains eased to 5.5 percent in October, compared with a government target of 4 percent, as exports rose the least in almost two years.

Joint Action

The policy move yesterday came two hours before the U.S. Federal Reserve, the European Central Bank and the monetary authorities of the U.K., Canada, Japan and Switzerland said they were cutting the cost of emergency dollar funding to ease strains in financial markets.

Spurring lending in China, the nation that contributes most to global growth, may boost confidence as Europe’s crisis worsens. Stocks and the euro rallied after the moves.

China is at “the beginning of monetary easing,” said Qu Hongbin, a Hong Kong-based economist for HSBC Holdings Plc, adding that “aggressive” action is warranted. While more reserve-ratio cuts may follow, interest rates may remain unchanged until inflation is below 3 percent, he said.

The latest change means that reserve requirements for the biggest lenders will fall to 21 percent from a record 21.5 percent, based on past statements.

‘Liquidity Crunch’

Mizuho Securities Asia Ltd. said that the timing of the Chinese announcement “could be linked” to the move by the Fed and others. In October 2008, China cut interest rates within minutes of reductions by the Fed and five other central banks as the global financial crisis worsened.

“Some form of coordination may have gone into this,” said Ken Peng, a Beijing-based economist at BNP Paribas SA. “But I think China is pretty urgently in need of a reserve ratio requirement cut anyway — otherwise, we’d have a liquidity crunch in the New Year.”

Barclays Capital yesterday forecast at least three more reserve ratio cuts by mid-2012 and said two interest-rate reductions are likely next year.

Yesterday’s move may have been partly a response to inflows of foreign-exchange drying up, according to UBS’s Hong Kong- based economist Wang Tao. Central bank data released this month suggested that capital has been flowing out of China.

Growth is slowing across Asia, the region that led the world recovery, with India today reporting its economy expanded the least in two years and Thailand cutting interest rates. In China, the clampdown on property speculation has added to the threat of a deeper slowdown after a 9.1 percent expansion in the third quarter that was the smallest in two years.

Home Sales

Property risks are “overshadowing” the outlook as falling sales threaten to trigger developer collapses, the Organization for Economic Cooperation and Development said this week. Agile Property Holdings Ltd. (3383), the developer in which JPMorgan Chase & Co. owns a stake, has said it will stop buying land until at least February and is slowing construction at some projects.

October housing transactions declined 25 percent from September and prices fell in 33 of 70 cities, according to government data. The Shanghai Composite Index fell 3.3 percent yesterday after Xia Bin, an academic adviser to the central bank, said credit should remain “relatively tight” and people shouldn’t hope for a reversal of housing market curbs.

China hasn’t raised interest rates since July, the longest pause since increases began in October last year. Benchmark one- year borrowing costs stand at 6.56 percent. The last interest- rate cut was in December 2008, during the global financial crisis.

Premier Wen Jiabao said last month the government will fine-tune economic policies as needed to sustain growth while pledging to maintain curbs on real estate.”

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Article from SFGate.

“Facebook is set to overtake Yahoo this year to seize the biggest share of the U.S. online display advertising market, a study found.

Facebook will reap $2.19 billion in display ads sales this year, for a 17.7 percent share of the U.S. market, topping Yahoo’s 13.1 percent, according to a report today from Internet research firm EMarketer Inc.

Facebook, with more than half a billion users, has lured advertisers such as Coca-Cola Co., JPMorgan Chase & Co. and Adidas AG. The social network’s display ad revenue more than doubled in each of the past two years, and will surge 81 percent in 2011, EMarketer estimated.”

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Here is an article from SF Gate.

“Google Inc. executive Mike Steib is courting customers such as Progressive Corp. and touting tools that let marketers create the snazzy, interactive ads that rival Apple Inc. has been using to snatch mobile-ad business.

“We have a significant investment in mobile, and competition is going to push us to be really, really good,” Steib said in an interview the day Google closed its $750 million acquisition of AdMob, which places ads on mobile programs and Web pages.

As Google’s head of mobile advertising, Steib leads the effort to build his company’s next $1 billion business from sales of ads on wireless devices – and lessen its dependence on Web-search ads. With a team based in a former cookie factory in Manhattan’s Chelsea neighborhood, Steib is striving to persuade advertisers they will win over more consumers by working with Mountain View-based Google than with Apple.

“It’s safe to say Google will respond to iAd and respond very strongly,” said Michael Collins, chief executive officer at Joule, a mobile-ad agency that’s part of WPP Plc. “They have too many assets to pull from, too many arrows in their quiver.”

Staying ahead may not be easy, now that Apple is luring advertisers to iAd, a service that places ads inside applications that run on its iPhones and other mobile devices. Apple has sold more than $60 million in advertising on iAd since it was announced in April, CEO Steve Jobs said at a conference Monday. That represents about half of the mobile display-ad market for 2010, according to JPMorgan Chase & Co.

Tension between the companies escalated Wednesday when AdMob accused Apple of barring developers from using Google ad services to create ads for the iPhone – a move that may threaten AdMob’s ability to get revenue from the device.

This year, AdMob and Google together may generate more than $100 million in U.S. mobile-ad sales, according to IDC in Framingham, Mass.

Apple won business as Google awaited a green light from the Federal Trade Commission for its $750 million AdMob acquisition, announced in November, Joule’s Collins said.

Introducing iAd “gave Apple the opportunity to suck all the oxygen out of the room,” he said. “Apple is on a tear these days with the iPhone, iAd, the iPad.”

As sales of smart phones rise, more users are viewing ads on handheld devices in addition to – and sometimes instead of – computers or televisions. Spending on mobile ads in the United States is expected to reach almost $500 million this year, from $220 million in 2009, according to IDC.

In the next three years, as much as one-third of global digital ad spending will be devoted to mobile, according to Alexandre Mars, who oversees mobile ads for Publicis Groupe SA.

“You’re seeing advertisers who see mobile marketing as a significant business driver,” said Steib, who joined Google in 2007 from NBC Universal. “This is a big part of the conversation.”

Google’s strategy includes creating tools that help developers embed videos and make ads more interactive, similar to what Apple’s iAd can do. Google also wants to sell more ads tied to a user’s location and deliver coupons for nearby deals, said Steib, Google’s director of emerging platforms.

The company is keen to make money from delivering coupons for nearby businesses and selling ads alongside a tool that lets customers take photos of an item and search for it on the Web, said Steib.

That way, a bistro could offer free appetizers to a nearby customer who’s searching for a place to eat, and the user could later see where to buy a bottle of the wine paired with dinner. The restaurant and wine seller would pay Google for the ads.

Google and AdMob together had 21 percent of the U.S. mobile ad market in 2009, said IDC analyst Karsten Weide. Quattro Wireless, which Apple acquired in January after losing out on AdMob to Google, had 7 percent.

‘Short-term disruption’

Steib says iAd may create “short-term disruption.” Still, Google can contain the fallout in part because it has experience letting customers manage campaigns on multiple Web sites and it can change ads on the fly based on performance, said Steib, who himself is an avid user of Apple products. He owns about a dozen iPods, iPhones and the new iPad.

Bank of America Corp. went from buying an occasional mobile campaign to paying Phonevalley, the agency run by Publicis’ Mars, a $1 million annual retainer. Google’s AdMob is among the ad-placement companies used by the financial institution, the largest U.S. bank by assets.

“We did take a hard look at iAd and we passed on it,” said Kathryn Condon, a vice president of digital marketing at Bank of America. She said she’s not convinced it will provide more value than AdMob and the other companies the bank uses.”

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