Jul 31, 2012

Go forth, prosper NAB boss: Get up to speed

NATIONAL Australia Bank chief Cameron Clyne has challenged fellow business leaders to stop talking down the economy and instead stake out new opportunities to create jobs and wealth.
The banking chief says relentless negative commentary on business conditions and the state of politics in Australia is sapping economic confidence.
He has urged Australia's captains of industry to take responsibility for reform rather than criticising policy or blaming their woes on the strong dollar and events in Europe and the US.
Speaking in Melbourne yesterday, Mr Clyne yesterday attacked what he said was a broad consensus the nation was struggling with a "two-speed economy".
It was instead a "10-speed" economy in transition -- as it always had been and would be -- with businesses expanding or struggling at different rates in different sectors.

Mr Clyne also warned interest rates changes were not a "cure-all" for economic difficulties, noting the continuing problems in the US, where rates had been cut to negligible levels.
He called for a more complex and mature debate about Australia's economy rather than a simple conversation about how the traditional industries were languishing while the mining states prospered.
"Part of the problem with this constant reference to 'two speeds' is that people feel that if they are not in the express lane, they're going backwards, which is not the case," Mr Clyne said.
His comments come as the nation's central bankers battle to stoke economic sentiment.
Reserve Bank governor Glenn Stevens has delivered two speeches in recent weeks, on the "lucky country" and a "glass half full", both lauding Australia's economic position.
Mr Clyne said Australia had "enormous opportunities" as an innovative, efficient nation and the agenda should be "elevating the debate from the doom and gloom that's happening now".
The debate had focused on job losses rather the transition of sectors, he said, noting the manufacturing sector had shed 100,000 jobs since 2000, but 900,000 had been added in health services, education and mining.
"You can't stop the clock and the only question is whether you're going to be a passenger or the driver," he said.
Mr Clyne also said business leaders at his level had little difficulty securing access to government ministers and opposition MPs.
He called on them to work through industry problems with government away from the spotlight, rather than constantly criticising policy, which damaged sentiment.
"It doesn't help the broader community to have people get up and give a running commentary," he said, lamenting that "everyone (was) feeling the need to comment on everything.".

Global warming due to humans: ex-sceptic

A PROMINENT US sceptic of the human causes of climate change, Richard Muller, has reversed course, saying he now believes greenhouse gases are responsible for global warming.
"I was not expecting this, but as a scientist, I feel it is my duty to let the evidence change my mind," Muller, a professor of physics at the University of California, Berkeley, said in a statement on Monday.
Muller is part of a group of more than a dozen scientists on the Berkeley Earth Surface Temperature team studying how temperature changes may relate to human activity, or to natural events such as solar and volcanic activity.
The average temperature of the Earth's land has risen 1.5C over the past 250 years, and "the most straightforward explanation for this warming is human greenhouse gas emissions", the team said in a report posted online on Monday.
The analysis goes 100 years further back than previous research, and takes an even stronger stance than the UN Intergovernmental Panel on Climate Change, which said in 2007 that "most" of the warming of the past 50 years could be attributed to human activity, and that higher solar activity prior to 1956 might have fuelled some of the warming the Earth has experienced.
The Berkeley team's analysis said: "The contribution of solar activity to global warming is negligible."
It added that its finding does not rely on climate models, which critics say have the potential for inaccuracies.
Instead, it is based "simply on the close agreement between the shape of the observed temperature rise and the known greenhouse gas increase".
Further research will factor in ocean temperatures, which are not included in the latest report, it said.
In an op-ed in the New York Times over the weekend, Muller explained his transformation from being a scientist who doubted the "very existence of global warming" to one who now sides with the majority of the scientific community.
"Call me a converted skeptic," wrote Muller.
"Last year, following an intensive research effort involving a dozen scientists, I concluded that global warming was real and that the prior estimates of the rate of warming were correct.
"I'm now going a step further: Humans are almost entirely the cause."
Other members of the Berkeley Earth science team include Nobel Prize winner Saul Perlmutter and climatologist Judith Curry of the Georgia Institute of Technology.
However Curry expressed her discontent with the findings and told The New York Times she had declined to be listed as a co-author on the latest paper.
"I gave them my review of the paper, which was highly critical. I don't think this new paper adds anything to our understanding of attribution of the warming," she was quoted as saying.
"Their analysis is way oversimplistic and not at all convincing in my opinion."

Australia to world: "Do not invest here"

In a year’s time we will have just been to the polls or we will be preparing for an election. No matter who wins that election, the Australia of July-August 2013 will be entirely different to what we see now.

Until now the optimists have been looking at a continuation of the mining investment boom well into the decade. In a years time, the investment boom will have been so dramatically curtailed that after the election it will have little more than a year to go. Cancelled mining projects will be as common as kangaroos in the outback.

Currently, the mining boom is masking unemployment pressures in non-mining Australia. Unemployment will rise in the first year or two of the new government because the Australian mining industry has become internationally uncompetitive. That will also mean the dollar will fall. Fortunately we will enjoy the revenue from projects now being built.

The first person to alert Australia that the mining investment boom had little more than two years to run was Deloitte Access Economics partner and economist Chris Richardson (KGB: Deloitte's Chris Richardson, July 27).

But since Richardson’s warning, others have followed. This morning The Australian warns that a coming survey by Newport Consulting will reveal that $200 billion in projects is in jeopardy (Weak outlook risks nearly $200m in projects,July 31).

My guess is that Newport, if anything, is understating the level of cancellations. Indeed, deferments announced or projects under review are already well in excess if $100 billion and include Olympic Dam, Gorgon gas, the BHP outer harbour at Port Hedland, Rio Tinto's Queensland coal and Kintyre uranium. And remember; only a few years ago the Canadian uranium miner Cameco was fighting off opponents to buy Kinytre from Rio Tinto.

Everyone is blaming mineral prices for the reviews, postponements or cancellations and there is no doubt that lower prices have played a large role, as has the higher Australian dollar.

But one the biggest factors is the huge rise in Australian construction and mining costs that have, in part, been brought on by aggressive unionism aided by the so called Fair Work Act. Add the carbon tax and Australia has effectively have put up a sign “Do Not Invest here”.

And the word is spreading. The Japanese were shocked by the ferocity of unions in the BHP Mitsubishi Queensland coal dispute (Japanese investors spooked by mining disputes, July 20).

Japan will be wary of investing large sums in Australian mining until the Fair Work rules are changed.

The Chinese have been shocked by what happened to Citic Pacific’s Sino Iron magnetite mine in WA. Construction costs have more than tripled to $8 billion. A lot of the blow out was the fault of the Chinese but Australian conditions played a big role.

In the next six months, Gina Rinehart’s Roy Hill must either be mothballed or given the go ahead (Alarm bells sound on Rinehart's hill, May 30).
The word from the unions is that she will be given a hard time if she attempts to construct the mine. Bankers, led by the National Australia Bank must decide whether to loan around $7 billion to the project. But Gina Rinehart is a very determined person and the project may go ahead.

Looking forward over the next five years we may get the odd gas project and a few bolt-on expansions to existing mines plus low cost mines. But unless a project produces minerals at a very low cost (like some gas projects) or is currently well under way, we will not see new projects until the Fair Work act is changed and the carbon tax removed. 

Australia must become competitive once again.

Bring back the mark, say Germans | The Australian

MORE than half of Germans believe their country would be better off leaving the euro.
The poll in Bild Am Sonntag, which showed that 51 per cent thought it was time to revert to the mark, was published as Angela Merkel and Mario Monti affirmed their willingness to "do everything" to save the single currency.
The German and Italian leaders made their pledge in an attempt to maintain the positive momentum triggered by Mario Draghi, president of the European Central Bank, who dramatically pledged last week to "do whatever it takes" to preserve the euro.
Ms Merkel and Mr Monti's statement was a carbon copy of the German Chancellor's joint assurance on Friday with French President Francois Hollande.
Eurogroup president Jean-Claude Juncker said yesterday that eurozone leaders would decide "in the next few days" what action would be taken to stabilise the eurozone. "There is no time to lose," he added.
The rhetoric has raised expectations sky-high for Thursday's rate-setting monthly meeting of the ECB in Frankfurt, when the markets will be looking for signs of direct intervention that might spare Spain from the need for an enormous international rescue.
Madrid has teetered on the edge of the bailout precipice for weeks and Mr Draghi is probably the only player left with the power to keep its economy from the plunge.
The newspaper's poll also showed that 71 per cent of Germans wanted Greece to leave the euro should it not live up to its austerity promises. Senior German politicians echoed this sentiment. Economy Minister Philipp Rosler said there were "considerable doubts whether Greece is living up to its reform promises".
Athens is struggling to find a further E11.5 billion ($13.5bn) in savings to fill a budget black hole while international inspectors continue to examine progress towards reforms needed to justify bailout payments. Their report will determine whether Greece will receive the next instalment, worth E31.5bn, in September.
"The implementation is faltering," Mr Rosler said. "There is still no functioning tax office. Also, almost nothing has happened in terms of the promised privatisation of public assets. If Greece does not fulfil its obligations, there can be no more money. Then Greece would be insolvent."
Mr Rosler leads the Free Democrats, the junior partners in Germany's ruling coalition, which have long been more sceptical of Greece's ability to meet its targets. But his government boss, Finance Minister Wolfgang Schauble, confirmed his opposition to any fresh loans to Greece. Mr Schauble told Welt am Sonntag: "The problem did not arise because the program had faults but rather because Greece did not implement it fully enough."
However, there were signs of a fightback by senior private sector pro-euro figures yesterday. The head of the country's chambers of commerce called for an end of the debate about Greece's membership of the euro.
"We think it is wrong that there is a daily discussion about whether Greece should leave the euro," Martin Wansleben said.
Michael Heise, chief economist of Allianz, warned that leaving the euro could cause the German currency to appreciate by 15 per cent to 20 per cent, destroying exports. There was also likely to be a five-point contraction of gross domestic product and a 25 per cent reduction in output five years after leaving the single currency.
"As understandable as the desire may be at first sight, there are many illusions about the cost of bringing back the mark," he said.

Price gouge cases for digital wares flood hearing | The Australian

COMPLAINTS of Australians being gouged when buying digital wares have gained important support from figures in the IT retail industry.
A parliamentary committee examining IT prices began public hearings in Sydney on the issue yesterday.
In submissions to the inquiry, former IT retail employees claimed mark-ups on software and hardware were often way above the real extra cost of selling and delivering products in Australia.
At yesterday's proceedings, the Australian Industry Information Association, representing some of the world's largest hardware, software and digital media vendors, cited the GST, retail rental costs, labour, research and development costs, and warranty obligations among reasons for mark-ups in Australia for goods sold in stores and online.
Consumer advocate Choice said these factors could not explain why Australians paid 88 per cent more for Nintendo console games than Americans, and an average of about 50 per cent extra for digital goods generally.
In the meantime, the inquiry has received more than 80 submissions, mainly from individuals complaining about the higher cost of games, hardware and software. Their ranks include figures close to the IT retail industry.
In his inquiry submission, Jason Austin said he worked for a PC company whose customer base consisted of schools, hospitals, farming, transport, government and the private sector.
"During my employment the value of the Australian dollar was never below 90c (to the US dollar) and was more often over the $US1 mark, though my quotes were all based on 80c to the US dollar, thus giving a 10-30 per cent mark-up on the item," Mr Austin wrote.
"Then shipping costs were also added to the item. As these items were consolidated and shipped together, these costs also provided further profit. Then another 30 per cent mark-up was applied on top of the final figure as the company's profit margin.
"Then a 10 per cent GST charge was applied to the final figure."
In his submission, contract computer technician and former EB Games employee Damien Holley cited the example of Batman Arkham City Game of The Year, which he said cost about $US49 in the US and about $119 in most gaming retail stores here.
He said that over the years he had consistently asked distributors why games were so much more expensive in Australia.
"Several explanations came over the years," Mr Holley said. "The first was, the dollar was too low against the US dollar. Later, when we got parity, it was claimed that different advertising took up the cost.
"When informed that the same ads in the US were playing here, the excuse changed to import taxes and the general cost of importing the games."
He said suppliers were prepared to adjust prices to what they believed the market would pay. Several submissions complained about the price of games bought through Steam, a platform owned by the Valve Corporation with more than 40 million active user accounts and 1500 titles.
Games such as Call of Duty: Modern Warfare II and Max Payne 3 typically cost more than $US90 here, but about $US50 in the US.
Stephen Delvecchio said in his submission that the argument of increased costs due to shipping physical goods from overseas "died the day we entered the digital age -- many years ago".
"There is absolutely no reason why I should be charged up to $50 more for the exact same 1s and 0s that are purchased from the exact same store just because I happen to have an Australian accent," Mr Delvecchio said.
"The word absurd doesn't even come close to describing it."
Submissions also complained about local price rises for Microsoft Windows, video cards, iTunes downloads, Autodesk software, ink cartridges, software supplied by Adobe, Norton and Symantec, and 3D displays.

Jul 30, 2012

Record rates of tax evasion on islands | Athens News

Extremely high rates of tax evasion were uncovered by the financial crimes squad SDOE during inspections carried out on islands and other summer resorts, the finance ministry revealed on Thursday.
Figures released by the ministry, concerning inspections carried out from July 6-23, revealed that six out of every 10 businesses inspected were guilty of evading taxes, with 805 tax violations discovered in a total of 1,410 inspections of shops and other businesses (57 per cent).
Tax evasion rates as high as 100 per cent were recorded in resorts on the islands of Zakynthos and Lefkada, in Rethymno on Crete and in Kastoria. Other areas on Crete also recorded very high rates of tax evasion, reaching 87 percent in Hania and 78 percent in Iraklio, followed by Santorini (83%), Corfu (75%), Naxos (73%) and Mykonos (68.5%). (AMNA

To Build Creative Cities, the Sky Has Its Limit by Richard Florida - WSJ.com

Ours is the century of the city. For the first time in history, more than half of the people in the world, 3.3 billion of us, live in cities. By 2050, according to the best projections, urbanites will account for as much as 70% of the global population.
Over the next 50 years we will spend trillions of dollars on city building. The question is: How should we build? For many economists, urbanists and developers, the answer is simple: We should build up. But the answer is more complex than that.
Researchers at the Santa Fe Institute have been able to demonstrate that bigger, denser cities literally speed up the metabolism of daily life. Larger beasts may have slower metabolisms in the animal kingdom, but the opposite occurs in cities, which get faster as they grow. Doubling a city's population, the Santa Fe researchers found, more than doubles its creative and economic output, a phenomenon known as "superlinear scaling."
Still, density is only part of the solution. In the hyper-crowded skyscraper districts of Shanghai, densities can approach 125,000 people per square mile. Giant buildings often function as vertical suburbs, muting the spontaneous encounters that provide cities with so much of their social, intellectual and commercial energy. People live their lives indoors in such places, wearing paths between their offices and the food courts, always seeing the same people.
In terms of innovation and creative impetus, Shanghai pales in comparison to New York, London, Paris and Milan, not to mention high-tech hubs like Silicon Valley, the Bay Area, Seattle, Boston, Austin and North Carolina's research triangle, all of which have much lower densities.
It turns out that what matters most for a city's metabolism—and, ultimately, for its economic growth—isn't density itself but how much people mix with each other. And there isn't just one formula for that. It can happen in the pedestrian-oriented sidewalk culture of New York and London but also—to the chagrin of many urbanists—in the car-dependent sprawl of a suburban nerdistan like Silicon Valley. That region, as Jonah Lehrer has pointed out, manages to emulate the functions of bigger, denser cities by encouraging the clustering of talent and enterprise and fostering a high level of information-sharing.
In fact, there are two types of density, according to a recent study by Peter Gordon of the University of Southern California and Sanford Ikeda of the State University of New York, Purchase. "Crude" density is achieved by districts packed with taller and taller buildings but doesn't, on its own, generate innovation or economic development.
By contrast, what the authors call "Jacobs density" sparks street-level interaction and maximizes the "potential informal contact of the average person in a given public space at any given time." It makes networking and informal encounters more likely and also creates a demand for local products and diversity—not just of populations and ethnic groups but of tastes and preferences.
The authors dub it "Jacobs density" in tribute to Jane Jacobs, the renowned urbanist and author of "The Death and Life of Great American Cities." She famously said, "In the absence of a pedestrian scale, density can be big trouble."
Look at New York City. Its hubs of innovation aren't the great skyscraper districts that house established corporate and financial headquarters, media empires and wealthy people (an increasing number of whom are part-time residents who hail from the ranks of the global super-rich). The city's recent high-tech boom—500 start-ups in the last half decade, among them Kickstarter and Tumblr—is anchored in mid-rise, mixed-use neighborhoods like the Flatiron District, Midtown South, Chelsea and TriBeCa.
Google's New York office, second in size only to its headquarters in Silicon Valley, is in the old Port Authority terminal building across from the Chelsea Market, for which it paid $1.8 billion in 2010. These neighborhoods are filled with the sort of old buildings that, in Jacobs's famous phrase, new ideas "must use."
None of this is to say that New York should be preserved in amber. The move to increase density in Midtown East, for example, raising height restrictions to as high as 80 stories, will generate much-needed development in an area that's set up for it.
But balance is key. A great city needs a mix of neighborhoods and districts of varied heights and densities. And great care must be taken not to muck up those critical areas that spur true innovation and creativity. "Densities," Jacobs cautioned, "can get too high if they reach a point at which, for any reason, they begin to repress diversity instead of to stimulate it." It's a crucial lesson to absorb as our world grows ever more urban

Holed by carbon tax, good ship Gillard limps towards poll iceberg

THE Gillard government resembles a dinghy being dragged along the bottom of the sea. It bounces up and down as it is being pulled along, but ultimately, it is sunk.

It is hard to draw any other conclusion after today's Herald/Nielsen poll put Labor's primary vote at 30 per cent. It has bounced up 2 percentage points from the sea floor of 28 per cent a month ago, but no more.

There is a significant piece of good news for the government in this poll. Its carbon tax, the policy which sent it to Davy Jones's locker, is not as bad as people feared or as bad as Tony Abbott wanted them to believe.

Only a month ago, just days before the carbon tax was introduced, 51 per cent of people thought they would be worse off and 37 per cent felt it would make no difference.

A month of the ''lived experience'', as the government calls it, and those figures have changed dramatically. Just 38 per cent now feel they are worse off, while 52 per cent feel their lives have not changed. This anticlimax is exactly what the government predicted.

The Nielsen poll director John Stirton cautions it is early days, and it may take some months before this trend is borne out. Even so, while the carbon tax may not be as bad as people thought, they still do not like it, nor the government that introduced it.

This poll finds Labor's vote is as low as ever and opposition to a price on carbon entrenched at pretty much the same level it has been - about 60 per cent - since Julia Gillard announced it in February last year. Gillard, and Abbott for that matter, continue to be about as popular as boils, while Kevin Rudd is vastly more popular than both.

Gillard said the polls would take some months to recover after the introduction of the carbon tax. This poll offers the first sign that may happen, but it needs to start soon because there are plenty who believe there is no salvaging the boat.

Bernanke is running out of magic bullets | Robyn Harding, FT | Commentary | Business Spectator

Another summer, another US slowdown, another Federal Reserve meeting to decide what to do about it. The drama has become rather routine. If the script is to be the same this year as it was in 2010 and 2011, then August should mark the opening move, followed by a Jackson Hole speech from chairman Ben Bernanke, and then the main event in September.
But any drama driven by the economy is unpredictable and this one could still go in a different direction. This week’s meeting of the rate-setting Federal Open Market Committee, which concludes on Wednesday, is finely balanced. The Fed goes into the meeting with a strong easing bias but not a lot of new data with which to untangle a complicated economic outlook. Growth in the second quarter came in at an annualised rate of 1.5 per cent – feeble but not in itself enough to suggest a downward economic spiral – while the eurozone meanders towards a crisis without quite getting there.
What makes the US economy so hard to read is that the fundamentals are improving: banks are better capitalised, it looks like the housing market has hit bottom, and households have shed debt. Yet a range of pressures – a fiscal squeeze in the US, financial turmoil from the eurozone, and an emerging market slowdown – are holding the economy back. All of those pressures have the potential to turn into shocks: a plunge off the US fiscal cliff, a panic in the eurozone, or a sudden stop in emerging economies.
The mixture is tough for policy makers. Given the underlying improvement, the natural forecast is that growth should pick up; given the risks, there is an uncomfortably high chance that it will not.
If short-term interest rates were above zero then the choice would be easy: cut them and offset some of the risk. But the only tools that remain close at hand are quantitative easing – buying securities in an effort to drive down long-term interest rates – or communicating a forecast that rates will stay low beyond 2014. Those actions are less easily reversed.
Put together, this may add up to caution on Wednesday, with perhaps a change in the late 2014 forecast but no more. Waiting would let the Fed see payrolls data for August and September, formally update its economic forecasts, and use Jackson Hole to clarify where it stands.
The combination of a volatile economic outlook with cumbersome policy tools also explains why the Fed is so eager to find new ways to influence the economy.
Bernanke has made clear that the Fed is studying the Bank of England's new "funding for lending" scheme. In testimony to Congress, he noted the Fed’s discount window as a possible policy tool, although this work remains at an early stage.
The goal of such a scheme would be to gear up the monetary transmission mechanism so that that low Fed interest rates turn into low rates on mortgages and consumer loans – but the challenge is to work out where that mechanism is breaking down.
Any kind of Fed operation would have to start with a cut in its discount rate – the penalty rate at which it makes short-term loans – from the current 0.75 per cent. That would make funds cheap enough to be attractive. The Fed would also have to apply some kind of condition.
Unlike in the UK, US banks that want to lend have little difficulty in securing funds, so simply offering funding on the condition of lending more would probably make no difference. The issue in the US is new and refinanced mortgages, where competition has fallen, credit is unavailable at any price without a large down payment, and banks worry about bad loans coming back to them from the mortgage agencies Fannie Mae and Freddie Mac.
It is not obvious how any tool offering a funding advantage to banks that do make such loans will solve the problem – but that is the challenge. If anybody can come up with a way to use conditional Fed loans to revitalise the US mortgage market it would provide an alternative to QE3. Answers on a postcard to 20th Street & Constitution Avenue, Washington DC.

Joy and pain of the log-in, log-out worker

Long hours, constant deliverables and no guarantee that they'll still be in work a week from tomorrow. Life as an ICT contractor is not without its challenges.

In a high-tech job market that's limping rather than loping along, many face the prospect of months on the bench if they're not prepared to lower their rates to meet a bargain-hunting market or move to wherever the work is this week.

Given the nature of the game, ICT contractors are a remarkably sanguine lot. In fact, according to organisational psychologist Julie West, they're more chilled than the full-timers they work alongside, job insecurity notwithstanding.

West's Canberra-based consultancy, Workplace Research Associates, conducts regular staff surveys for large organisations, including federal agencies which collectively employ thousands of ICT contractors.

"They differ from the full-timers in that they're usually happier," West said. "They get paid more and they don't take home baggage after work. They say their work/life balance is better and they're happier about their pay."
Bruce Quilley, an ICT contractor at the Adelaide ISP NuSkope, seems the exception that proves this rule. The 29-year old pleaded guilty in court recently after a rampage which saw him destroy company servers, delete emails and threaten his employer with an axe.

The only area in which contractors scored lower than their permanent counterparts was in their feeling of engagement with the organisation, West said. That's the flip side of being able to sign off at six and leave it all behind.
Around 40 per cent of the country's 220,000-strong ICT workforce are contractors, according to job agency Peoplebank. They're in service in 68 per cent of companies employing over 200 staff and comprise 18 per cent of the Australian Computer Society's membership base of 22,000. One in ten have reported a period of unemployment in the past 12 months, while those on the job worked an average of 42.4 hours per week during that period, according to ACS surveys.

ACS chief executive  Alan Patterson said ICT contractors were a resilient and stoic breed with confidence that came from considerable know-how and years of dealing with the cut and thrust.
"According to our research, those within the industry who are self-employed and engaged as independent contractors hold the highest levels of professional ICT experience," Patterson said.

Consensus in the sector is that reluctant conscripts are few. Those who stick to contracting long term do so because it's a modus operandi that agrees with them, while others return to the full-time ranks after a brief dabble.

The executive general manager of the high-tech recruitment agency Candle, Linda Trevor, says some of the potential sources of stress, such as intense project work and frequent interstate and overseas moves, are part of the attraction for many.

"Most contractors have chosen to contract because of the high hourly and daily rates, the freedom and the variety of work," she  said.

A recent joinee at SAP Australia, senior technical quality manager Stuart Avery is a long-time contractor-turned-permanent, after 13 years on projects in Australia and overseas. He says there's a definite personality type suited to contracting: one which thrives on frustration.

It's not a game for the faint hearted, and those who do well long term guard their reputations jealously and never burn bridges.

"You're only as good as your last job and you have to be careful how you leave," Avery said.

Concerns about long-term job security were considerably less for those who didn't have the millstone of a large mortgage, or mouths to feed, he added.

"It's not for everyone. If it's your first or second job and you have no commitments financially, it can work well."
Do you have the contractor personality type? Or would you prefer to swap seats with a full-time colleague?

Why would HTC get serious with Facebook?

Despite denials from the founder and CEO of social networking behemoth Facebook Mark Zuckerberg that a Facebook-branded smartphone “wouldn’t make much sense” for the company, a report in BloombergBusinessweek said Facebook and handset maker HTC are working together to produce a smartphone to hit the market in 2013.
The article, which quoted unnamed sources familiar with the matter, also said Facebook pushed back the launch to give HTC more time to develop the device, which would run a modified Android operating system, while a team of former Apple engineers has been put into place to improve the Facebook application on the iPhone.
Following Facebook’s much-hyped initial public offering, which ended as somewhat of a flop, and the company's first quarterly earnings report this week, which assuaged nervous investors, the company is looking for new ways to drive revenue gains through advertising, and some analysts feel a Facebook mobile device with ads could be the answer. Facebook made $3.15 billion in advertising sales last year, but none of that came from ads on mobile phones, Bloomberg reported.
“Usage is shifting to mobile, and they have not been able to monetize mobile,” Victor Anthony, an analyst at Topeka Capital Markets, told the news service. “To the extent that it’s a device you own and carry around with you at all times, and it ties into the Facebook experience, it will be beneficial. They could then put a lot of ads onto the platform.”
Facebook is the world’s largest social networking site, claiming more than 900 million users—half of whom use the platform on mobile devices. The company is currently in the midst of developing a more complete strategy to embrace mobile technology and serve a user base that is rapidly transitioning from desktops to mobile devices like smartphones, notebooks and tablets to use the site.
“Our mobile strategy is simple: We think every mobile device is better if it is deeply social,” the company said in a prepared statement. “We’re working across the entire mobile industry with operators, hardware manufacturers, OS providers, and application developers to bring powerful social experiences to more people around the world.”

Super Mario takes the on the EURO mess

Mario Draghi may not need to show his money this week, but impatient markets will be unforgiving if the European Central Bank chief does not flesh out his dramatic promise to do whatever is needed to save the euro. Given the threat that the long-running euro zone crisis poses to the global economy, Thursday's ECB policy-setting meeting and subsequent news conference were always going to be important.
But they have become pivotal since Draghi vowed in London last Thursday that "within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."
Specifically, Draghi said the ECB had a mandate to act if diverging borrowing costs were disrupting the transmission of monetary policy across the 17-country single currency area.
This is patently the case. The ECB's interest rate cut on July 5 to 0.75 percent has failed to reduce the giddily high cost of money for governments, banks and companies on the rim of the bloc, notably Spain and Italy. Sovereign yields in Germany and the Netherlands, by contrast, are negative.
Yet even as capital flees the periphery and euro zone output shrinks, few economists think Draghi is ready to announce that the ECB is resuming secondary-market bond purchases to lower yields, a policy it has pursued in the past with limited success.
The assumption is that the ECB wants to share the burden with the euro zone's government-financed rescue funds. Bond buying is controversial in Germany and other creditor states, which fear they take pressure off debtors to reform, and so Draghi will need time to forge a political consensus.
"The chances are that the ECB will need longer to calibrate its strategy. It will probably take at least until September for the ECB to be able to launch a new programme," said Lena Komileva, chief economist at G+ Economics, a London consultancy.
Komileva favours a radical plan whereby the ECB would sell German bonds and buy Spanish and Italian debt to cap borrowing premiums. "The pressure is on the ECB to think of a creative way to tackle systemic fault lines in the euro area," she said.
As if the ECB needed reminding of the depth of the crisis, figures on Tuesday are likely to show that the euro zone's jobless rate rose to 11.2 percent in June from 11.1 percent in May.
"If we are not yet at a policy of 'growth at any price', the importance ascribed to growth in political circles has certainly increased - which gives political cover to monetary policy action," Paul Donovan, an economist with UBS, said in a report.
But whatever strategy the ECB adopts, the economic fissures in the euro zone, accentuated by the poor competitiveness of the periphery, means growth is not about to come roaring back.
"Over a 10-year horizon I'm positive, but in the short run it's got to carry on being painful," said Richard Barwell, an economist with Royal Bank of Scotland in London. "We need to condition ourselves to the fact that we're going to live with this for a long, long time."
The United States is doing better than Europe but is hardly a role model. Figures on Friday are likely to show that non-farm payroll jobs rose 100,000 in July, up from 80,000 in June, while the unemployment rate held steady at 8.2 percent.
Like America's 1.5 percent rate of economic growth in the second quarter, that would be uncomfortably sluggish for President Barack Obama, hoping for a growth spurt to boost his re-election prospects in November.
But few think it would be weak enough to push the Federal Reserve into a third round of asset purchases, dubbed quantitative easing, to drive down borrowing costs and so bolster businesses and consumer confidence.
Economists expect the U.S. central bank's policymakers, who gather on Wednesday, to sit on their hands for now.
"If we get to the September meeting and the Fed, looking at the latest data, sees the economy running at less than a 2 pct GDP pace, they're likely to act," said Bill Adams, an economist with PNC in Pittsburgh.
"We'll need to see a stronger job market, more in line with expectations that we had coming into the year of sustained, moderate growth, to move QE3 off the table," Adams added.