Apple Inc. (NASDAQ: AAPL) on Tuesday took aim at rival Google Inc. (NASDAQ: GOOG) and its Android operating system by filing a patent-infringement complaint with the International Trade Commission (ITC) against smartphone manufacturer HTC Corp.
Taiwan-based HTC is the largest maker of phones that use Google's Android operating system, such as the Nexus One. Apple involved the ITC in hopes of banning U.S. imports of HTC devices made with the technology in question. However, that filing was paired with a suit filed in federal court in Delaware that claimed infringement on 20 patents.
"We can sit by and watch competitors steal our patented inventions, or we can do something about it. We've decided to do something about it," said Apple Chief Executive Officer Steve Jobs. "We think competition is healthy, but competitors should create their own original technology, not steal ours."
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Senate's Plan for Financial Reform Promises Nothing But Political Gridlock
U.S. senators Christopher Dodd, D-CT, and Bob Corker, R-TN, have fashioned a compromise on stalled banking regulation that straddles divisions over establishing a financial consumer protection agency and addresses unwinding too-big-to-fail firms.
The deal deftly divides lawmakers on both sides of the aisle in the Senate, as well as in the House of Representatives, which passed its plan for financial reform in December.
By engineering gridlock in the nation's capitol, lawmakers seem determined to stall any meaningful overhaul of financial-markets regulation. But rather than counting on backsliding into the status quo to grease the wheels of economic recovery, the overhang of unresolved and ineffectual legislation threatens long-term investor confidence and desperately needed public protections.
The deal deftly divides lawmakers on both sides of the aisle in the Senate, as well as in the House of Representatives, which passed its plan for financial reform in December.
By engineering gridlock in the nation's capitol, lawmakers seem determined to stall any meaningful overhaul of financial-markets regulation. But rather than counting on backsliding into the status quo to grease the wheels of economic recovery, the overhang of unresolved and ineffectual legislation threatens long-term investor confidence and desperately needed public protections.
To read more about the deal's shortcomings, please continue below...
Senate's Proposal Calls for Fed to Increase Its Role in Consumer Protection
The Senate's journey to agreement on a financial reform bill could lead to consumer protection responsibilities remaining in the hands of the Federal Reserve.
After much back-and-forth among senators, Senate Banking Committee Chairman Christopher Dodd (D-CT) is proposing a consumer protection unit that will be housed in the Fed. Sen. Bob Corker, R-TN, offered the idea as an alternative to Dodd's earlier proposal of creating a consumer protection division in the Treasury Department.
Dodd's revision aims to appeal more to Republicans than earlier proposals, in hopes the Senate can move forward with U.S. financial regulation overhaul. The proposal is expected to scale back the measures approved by the House of Representatives in December 2009.
After much back-and-forth among senators, Senate Banking Committee Chairman Christopher Dodd (D-CT) is proposing a consumer protection unit that will be housed in the Fed. Sen. Bob Corker, R-TN, offered the idea as an alternative to Dodd's earlier proposal of creating a consumer protection division in the Treasury Department.
Dodd's revision aims to appeal more to Republicans than earlier proposals, in hopes the Senate can move forward with U.S. financial regulation overhaul. The proposal is expected to scale back the measures approved by the House of Representatives in December 2009.
How "Hot Money" is Wrecking the U.S. Banking System…
When the Federal Deposit Insurance Corp. (FDIC) released its list of "problem banks" this week, 702 institutions holding $402.8 billion in assets were found to be in trouble.
That's the longest list in 17 years, and it's only going to get worse. In fact, regulators are expecting the number of troubled lenders to grow at an accelerating rate this year. They claim that an uptick in commercial-real-estate losses will serve as the key culprit
But the real culprit - the one that regulators won't talk about publicly - is the funding scheme banks employ to load themselves up on speculative loans. T his scheme - far removed from most investor radar screens - has played a major role in the banking sector's growing woes, and will continue to contribute heavily to bank failures in years to come.
That's the longest list in 17 years, and it's only going to get worse. In fact, regulators are expecting the number of troubled lenders to grow at an accelerating rate this year. They claim that an uptick in commercial-real-estate losses will serve as the key culprit
But the real culprit - the one that regulators won't talk about publicly - is the funding scheme banks employ to load themselves up on speculative loans. T his scheme - far removed from most investor radar screens - has played a major role in the banking sector's growing woes, and will continue to contribute heavily to bank failures in years to come.
- The centerpiece to this risky strategy is a funding vehicle known officially as a "brokered deposit." However, due to the narcotic-like effects brokered deposits can have on a bank's balance sheet, industry insiders have adopted a more-appropriate moniker - referring to them as "hot money."
Money Morning Mailbag: How the Demise of Glass-Steagall Helped Spawn the Credit Crisis
Question: Please address why the removal of the Glass-Steagall Act in 1999 caused the financial meltdown of 2007 and why its reinstatement is the only way to stop the financially risky behavior allowed after it's removal. Address why we will very likely have another meltdown (probably in 2010) unless reinstated.
Answer: Mr. Scott: While the overturning of what remained of Glass-Steagall did not cause the meltdown, it certainly contributed mightily to the systemic nature of the crisis.
Allowing commercial banks and investment banks to marry created giant operations that became too big to fail and too profitable to break up. Everyone was making money. The overriding problem was not the integration of commercial (deposit-taking and loan-making) banks with investment (capital-markets trading) banks, but the extraordinary migration of all banks into the same products, trading, and risk-taking businesses. I am definitely including the ubiquitous game of mortgage origination, securitization, sales and trading.
Answer: Mr. Scott: While the overturning of what remained of Glass-Steagall did not cause the meltdown, it certainly contributed mightily to the systemic nature of the crisis.
Allowing commercial banks and investment banks to marry created giant operations that became too big to fail and too profitable to break up. Everyone was making money. The overriding problem was not the integration of commercial (deposit-taking and loan-making) banks with investment (capital-markets trading) banks, but the extraordinary migration of all banks into the same products, trading, and risk-taking businesses. I am definitely including the ubiquitous game of mortgage origination, securitization, sales and trading.
As Bank Failures Grow, FDIC Options Narrow
The Federal Deposit Insurance Corp. (FDIC) will likely have tap its credit line with the U.S. Treasury or impose more special premiums on banks, to ensure U.S. banks are fully supported.
While FDIC-insured banks reported a net income of $2.8 billion in the third quarter, bank lending fell by 2.8%, the most since records were first kept in 1984 and the fifth consecutive quarter loan balances declined. The FDIC's Deposit Insurance Fund (DIF) went into the red at the end of September and the bank insurer today (Tuesday) revealed just how steep the loss it was when the quarter ended: $8.2 billion.
While FDIC-insured banks reported a net income of $2.8 billion in the third quarter, bank lending fell by 2.8%, the most since records were first kept in 1984 and the fifth consecutive quarter loan balances declined. The FDIC's Deposit Insurance Fund (DIF) went into the red at the end of September and the bank insurer today (Tuesday) revealed just how steep the loss it was when the quarter ended: $8.2 billion.
Experts Warn Against Bair's Proposal For Making Secured Creditors Pay for Bank Failures
Federal regulators should consider ensuring secured creditors face losses when banks fail, the head of the Federal Deposit Insurance Corp. (FDIC) says. However, such an action could make for an even worse credit crunch during periods of financial turmoil and weaken recovery efforts, according to many analysts. Secured creditors, normally protected from losses if a […]
Banks Satisfied On FDIC Decision, but Will They Still Lend?
U.S. banks yesterday (Tuesday) got what they wanted by avoiding another special assessment from the Federal Deposit Insurance Corp. (FDIC). However, the FDIC's mandate that all banks prepay their regular assessments through 2012 to replenish its near-zero fund will likely put further strain on banks' ability to lend, and force the FDIC to take further […]
FDIC Weighing Unappealing Options for Fund Replenishment
When the Federal Deposit Insurance Corporation's (FDIC) board meets today (Tuesday), it will be faced with some tough questions about how it will replenish its still-shrinking fund in the wake of mounting bank failures. The FDIC has seen its fund that protects more than $4.5 trillion in bank deposits shrink to just $10.4 billion from […]
Special Report: How the Government is Setting Us Up for a Second Subprime Crisis
[Editor's Note: Shah Gilani, a retired hedge fund manager and noted expert on the global credit crisis, predicted this developing FHA debacle in a July 2008 Money Morning essay.] Is the government creating another subprime-mortgage bubble? The first time around, the three-headed federal serpent – the Bush administration, the Treasury Department and the U.S. Federal […]
Investment News Briefs
With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. Banks Considering Bailing Out FDIC; Potash Corp. Lowers Guidance; Sources: Ford Building Third China Plant; CIC Nabs 15% Stake in Noble; Sun Losing Money as EU Regulators Deliberate; Singapore Gov't […]
Bank Failures Could Surge as Commercial Real Estate Losses Continue to Mount
The dark cloud of commercial real estate loan defaults is inching closer, threatening to shutter more banks, even as the U.S. Federal Reserve declares the recession to be over. Commercial property values in the U.S. have plummeted 36% since peaking in 2007, and the commercial real estate market is unlikely to recover before 2012, according […]