Economic Calendar

Sunday, March 25, 2012

Rovio Executive Says ‘Angry Birds Space’ Skips Windows Phone

By Jon Erlichman and Diana ben-Aaron - Mar 24, 2012 2:59 AM GMT+0700

An executive of the maker of “Angry Birds” said the latest edition of the world’s most popular mobile-phone game won’t appear on Microsoft Corp. (MSFT)’s Windows Phone platform, a possible blow to handset maker Nokia Oyj. (NOK1V)

“We’re the No. 1 app in the Windows Phone app store, but it’s a big undertaking to support it, and you have to completely rewrite the application,” Peter Vesterbacka, chief marketing officer of the game’s maker, Rovio Entertainment Oy, said in an interview on Bloomberg Television. He said Rovio, which yesterday started selling the new “Angry Birds Space” game for Apple Inc. (APPL)’s iPhone and handsets running Google Inc. (GOOG)’s Android platform, has no plans to release the title on Windows Phone.

Angry Bird toys are seen on display at the headquarters of the game's developer Rovio Mobile Oy in Espoo, Finland, on Friday, Dec. 3, 2010. Photographer: Henrik Kettunen/Bloomberg

March 23 (Bloomberg) -- Peter Vesterbacka, chief marketing officer of "Angry Birds" maker Rovio Entertainment Oy, says demand for the world's most popular mobile-phone game may reach 2 billion by the end of the year, boosted by the introduction of "Space." Jon Erlichman reports on Bloomberg Television's "Countdown." (Source: Bloomberg)

March 22 (Bloomberg) -- Bloomberg's Jon Erlichman talks about the release of Rovio Entertainment Oy's "Angry Birds Space" mobile game today, and the company's bird and slingshot display on the Space Needle in Seattle. He speaks with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

March 22 (Bloomberg) -- Bloomberg's Jon Erlichman talks about the release of Rovio Entertainment Oy's "Angry Birds Space" mobile game today, and the company's bird and slingshot display on the Space Needle in Seattle. (Source: Bloomberg)

Peter Vesterbacka, chief marketing officer and co-founder of Rovio Entertainment Oy, speaks during the TechCrunch Disrupt Beijing conference in Beijing, China. Photographer: Keith Bedford/Bloomberg

Rovio Chief Executive Officer Mikael Hed later told Reuters the company was “working towards” getting “Angry Birds Space” on the Windows Phone 7 operating system. Hed didn’t return calls by Bloomberg News. Ville Heijari, a spokesman for Rovio, said in e- mailed statement that the company is working toward offering its games on “all relevant platforms” and that it will announce “further platforms as soon as more information is available.”

Nokia is betting on the Windows Phone operating system to revive its struggling smartphone business. The lack of “Angry Birds” may make it more difficult for the company, based in the same Espoo, Finland-based office park as Rovio, to attract gaming-oriented users and persuade developers that its platform is growing.

China Push

“This is a worrying development for Windows Phone because it suggests that Rovio does not have much confidence in its future,” Nomura analyst Richard Windsor said today in a report. “As the standard version is already number one on the Windows Phone app store, it gives a strong indication that no one else will expect to be making money writing for this platform either.”

Nokia Chief Executive Officer Stephen Elop has introduced several Windows Phones since October and plans to bring the handsets next to China, where “Angry Birds” took off last year.

“China has been our second-largest market, but it’s actually been the fastest-growing for quite a while, and it could well be that China becomes the biggest market this year,” Vesterbacka said.

Nokia spokesman James Etheridge had no immediate comment when contacted today. The company’s shares rose 0.9 percent to 3.98 euros at the close in Helsinki. The stock has declined 33 percent in the past 12 months.

Elop, who took over at the world’s largest mobile-phone maker in 2010, shifted to Windows Phone last year after determining Nokia’s Symbian and MeeGo systems couldn’t keep up with Android, the fastest-growing smartphone platform, and the iPhone.

Chicken and Egg

Microsoft plans to bring its Windows Phone software to 23 more countries for a total of 63 and put the operating system on less expensive smartphones, it said last month. The company aims to move quickly in developing economies, where Google and Apple are less dominant, before cheaper Android phones can strengthen Google’s position.

“There is a chicken and egg situation here, where no apps means no users and no users means no apps,” Windsor said. “Nokia has tried in the past to get past this by paying developers directly to write applications but it has largely failed to bring any life back to the platform.”

For the time being, it’s too expensive for Rovio to adapt new games to Windows Phones, Vesterbacka said.

“If you look at activations, Apple’s iOS and Android are clearly bigger than any other platform,” he said. “We want to be on all screens, but we have to consider the cost of supplying the smaller platforms. With Windows Phone it’s a lot of work to technically support it.”

Flinging Birds

“Angry Birds” may reach a billion cumulative downloads in the next few months, boosted by the introduction of “Space,” and 2 billion by the end of the year, he said. That compares to just 50 million in late 2010, a year after the unveiling of the original game. Rovio predicts to introduce four more Angry Birds games by the end of the year, Vesterbacka said.

Basic “Angry Birds” game play consists of using a virtual slingshot to fling birds at structures populated by green pigs. The game zoomed to the top of the chart in Apple’s online app store in 2010 before being rolled out for Android phones, desktop computers and e-readers. The Facebook version is approaching 20 million active users, Vesterbacka said.

Rovio, which has more than 300 employees, also sold about 25 million plush toys last year and has started a book division with a cookbook and comics.

Closely held Rovio published 51 games for Nokia phones and other handsets before releasing “Angry Birds.” The game is on Nokia’s current smartphones and some lower-end models.

The new version of “Angry Birds,” which takes place in space with planetary gravity interfering with the birds’ flight paths, is available for Windows personal computers as well as Apple Mac computers.

To contact the reporter on this story: Jon Erlichman in New York at; Diana ben-Aaron in Helsinki at

To contact the editor responsible for this story: Kenneth Wong at


MF Global’s Corzine Ordered Funds Transferred, Memo Says

By Phil Mattingly and Silla Brush - Mar 25, 2012 3:33 AM GMT+0700

Jon S. Corzine, MF Global Holding Ltd. (MFGLQ)’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in a brokerage account with JPMorgan Chase & Co. (JPM), according to a memo written by congressional investigators.

Edith O’Brien, a treasurer for the firm, said in an e-mail quoted in the memo that the transfer was “Per JC’s direct instructions,” according to a copy of the memo obtained by Bloomberg News yesterday. The e-mail, dated Oct. 28, was sent three days before the company collapsed, the memo says. The memo does not indicate whether that phrase was the full text of the e-mail or an excerpt.

Jon S. Corzine, former chairman and chief executive officer of MF Global Holdings Ltd. Photographer: Andrew Harrer/Bloomberg

March 23 (Bloomberg) -- Jon S. Corzine , MF Global Holding Ltd.’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in one of the brokerage’s JPMorgan Chase & Co. accounts in London, according to an e-mail sent by a firm executive. Bloomberg's Julie Hyman reports on Bloomberg Television's "Street Smart." (Source: Bloomberg)

March 23 (Bloomberg) -- Bloomberg News reporter Phil Mattingly, Jay Pelosky, consultant at J2Z Advisory, Bloomberg View columnist William Cohan, Robert Brusca, president of Fact & Opinion Economics, and Bloomberg Television markets correspondent Joshua Lipton talk about a Bloomberg News report that Jon S. Corzine, MF Global Holding Ltd.’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in one of the brokerage’s JPMorgan Chase & Co. accounts in London, according to an e-mail sent by a firm executive. They speak with Pimm Fox on Bloomberg Television's "Taking Stock." (Cohan is a Bloomberg View columnist. The opinions expressed are his own. Source: Bloomberg)

The account could have contained both client and company funds, the memo notes. Whether the transferred funds were those of the company, its clients or both is not known.

“If client funds were transferred at his direction, it raises new questions,” Seth Berenzweig, managing partner at Berenzweig Leonard LLP, a law firm in McLean, Virginia, said in an interview with Bloomberg Television. “This is a new storm cloud that is now headed for Jon Corzine and it raises a lot of issues.”

O’Brien’s internal e-mail was sent as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse. O’Brien is scheduled to testify at the hearing after being subpoenaed.

‘Funds Were Safe’

“Over the course of that week, MF Global (MFGLQ)’s financial position deteriorated, but the firm represented to its regulators and self-regulatory organizations that its customers’ segregated funds were safe,” said the memo, written by Financial Services Committee staff and sent to lawmakers.

Steven Goldberg, a spokesman for Corzine, said in a statement that Corzine “never gave any instruction to misuse customer funds and never intended anyone at MF Global to misuse customer funds.”

Vinay Mahajan, global treasurer of MF Global Holdings, wrote an e-mail on Oct. 28 that JPMorgan was “holding up vital business in the U.S. as a result” of the overdrawn account in London, which had to be “fully funded ASAP,” according to the memo.

$200 Million Transfer

“On the afternoon of Friday, October 28, MF Global transferred $200 million from a segregated customer account at JPMC to cover a $175 million overdraft in one of MF Global’s JPMC accounts in London,” the memo says. “Ms. O’Brien wrote in an e-mail that the transfer was ‘Per JC’s [Jon Corzine’s] direct instructions’.”

Barry Zubrow, JPMorgan’s chief risk officer, called Corzine to seek assurances that the funds belonged to MF Global and not customers. JPMorgan drafted a letter to be signed by O’Brien to ensure that MF Global was complying with rules requiring customers’ collateral to be segregated. The letter was not returned to JPMorgan, the memo said.

Corzine, 65, in testimony in front of the House panel in December, said he did not order any improper transfer of customer funds. Corzine also testified that he never intended a misuse of customer funds at MF Global, and that he doesn’t know where client funds went.

‘Never Intended’

“I never gave any instruction to misuse customer funds, I never intended anyone at MF Global to misuse customer funds and I don’t believe that anything I said could reasonably have been interpreted as an instruction to misuse customer funds,” Corzine told lawmakers in December.

In his statement, Goldberg said Corzine did not specify which funds should be used to replenish the JPMorgan account.

“He never directed Ms. O’Brien or anyone else regarding which account should be used to cure the overdrafts, and he never directed that customer funds should be used for that purpose,” Goldberg said. “Nor was he informed that customer funds had been used for that purpose.”

The bankruptcy trustee overseeing the liquidation of the company’s brokerage subsidiary has estimated a $1.6 billion shortfall between customer claims and assets available.

Lawmakers and investigators from the Commodity Futures Trading Commission, Securities and Exchange Commission and Department of Justice have been reviewing events leading up to MF Global’s bankruptcy filing. Executives including Corzine, a Democrat who served in the Senate from 2001 to 2006 and as governor of New Jersey from 2006 to 2010, gave testimony on the collapse at three congressional hearings last year. Corzine was co-chairman of Goldman Sachs Group Inc. (GS) before entering politics.

Congressional Report

Representative Randy Neugebauer, a Texas Republican and chairman of the Financial Services oversight and investigations subcommittee, is preparing a final report on his investigation into the firm’s failure.

“One of the goals of our investigation is not only to find out where the money went but to identify what went wrong in order to prevent this from happening again,” Neugebauer said in a statement.

O’Brien is scheduled to appear before lawmakers with Christine Serwinski and Laurie Ferber, two other MF Global executives named by Corzine as being involved in the transaction, according to the memo. Henri Steenkamp , the firm’s chief financial officer, is also scheduled to testify, as is a representative from JPMorgan who has not yet been identified.

European Bet

MF Global and its brokerage sought Chapter 11 bankruptcy after a $6.3 billion bet on the bonds of some of Europe’s most indebted nations prompted regulator concerns and a credit rating downgrade. Corzine quit MF Global Nov. 4.

During his testimony, Corzine identified O’Brien as someone with knowledge of a transfer of funds from customer accounts before the firm sought bankruptcy protection Oct. 31.

Reid H. Weingarten, O’Brien’s lawyer, did not respond to a phone call and e-mail seeking comment.

The memo’s account of the e-mail exchanges aligns with what Terrence Duffy, the executive chairman at CME Group Inc. (CME), told lawmakers during a December congressional hearing. Auditors at CME, which had authority to oversee MF Global, learned from an employee of the brokerage that Corzine knew about the loans involving a European affiliate, Duffy told committee members.

To contact the reporters on this story: Phil Mattingly in Washington at; Silla Brush in Washington at

To contact the editor responsible for this story: Maura Reynolds at


U.S. Tax Breaks Valued at More Than $1 Trillion, WSJ Reports

By Dan Hart - Mar 24, 2012 7:54 PM GMT+0700

The value of U.S. tax breaks exceeds $1 trillion, which may give both parties potential areas to cut costs and alleviate the cost of changing the tax code, the Wall Street Journal reported, citing a study.

The Congressional Research Service report found the biggest tax break is likely to be valued at $164 billion annually in 2014 and is on employer-provided health insurance, while employer-provided pensions are the second-biggest exclusion at about $163 billion, the newspaper said.

The study said the most that might be gained in additional tax revenue from eliminating tax breaks was $150 billion, because of political opposition and technical hurdles, the newspaper said.

Lawmakers might only be able to reduce tax rates by one or two percentage points for the top individual rate, the Journal said, citing the report.

To contact the reporter on this story: Dan Hart in Washington at

To contact the editor responsible for this story: Sylvia Wier at