THE GEORGE STREET REVIEW
EDITORS REPORT JAYDE DE BONDT
COMPILING THIS EDITION OF THE GSR HAS BEEN AN EXTREMELY TRYING PROCESS, GIVEN THAT IT HAS BEEN AN EXTREMELY HARD WEEK FOR MANY STUDENTS; AFFECTED BY TRAGEDY WITHIN THE UNIVERSITY. IN THE FACE OF ADVERSITY HOWEVER, ALL CONTRIBUTORS HAVE MANAGED TO PUSH ON, AND WRITTEN INSIGHTFUL ARTICLES FOCUSED ON MYRIAD TOPICS PERTAINING TO THE FIELDS OF BUSINESS, FINANCE AND CAREERS. THANK YOU TO ALL THOSE INVOLVED. THE QUALITY OF THESE ARTICLES IS SECOND-TO-NONE AND CONTINUES THE TRADITION OF INSIGHTFUL JOURNALISM CONSISTENT WITH THE GEORGE STREET REVIEW. CONTINUE TO THINK BIG; JAYDE
CONTENTS * CHAIRS REPORT * TITANS OF INDUSTRY * CAN DO CAMPBELL? * SIX MONTHS ON FROM AN ELECTORIAL LANDSLIDE * WOMEN IN BUSINESS EVENING PICTURES * THE EU BAILOUT * THE MINING BOOM, OVER AND OUT? * HAVE NO FEAR TH E IPHONE IS HERE!
CHAIRS REPORT JAMES GRAHAM
Semester 3, 2012 Welcome back to another semester at Bond and another issue of The George Street Review. This is our first print edition for the semester, but I’m hoping you’ve seen our weekly wrap -The Week Just Gone - over the past couple of weeks. For the new members of Bond Investment Group (or BIG as people prefer to call us), this is an invaluable resource that essentially summarises the week in deals, markets, business commentary, economic news and career opportunities. You don’t have to be a finance geek to find this useful, as our own committee - who come from a fairly diverse array of backgrounds - put it together. Titans of Industry Forum As usual, we have a lot in store for this semester. Our flagship event this semester is our annual Titans of Industry Forum; we’re excited to announce our line up of panellists for this not-to-be-missed event: • Mr David Murray AO, Former Chairman of the Australian Future Fund • Professor Ian Harper, Partner of Deloitte Access Economics
• Mr Ed Wittig, Managing Director of Goldman Sachs • Mr Robert Milliken, Australian Correspondent for The Economist as moderator This year’s panel will be discussing the great challenges for the next generation of Australian leaders. From Australia’s relationship with China, to the mounting economic and social woes facing Europe – this year’s panel will cover it all. No matter what faculty you’re studying in, whether its business, law, humanities or even health sciences, this is one of those events that you’ll get a lot out of. So come along, have a bite to eat, and listen to some of Australia’s business leaders shed some light on how you can best equip yourself to deal with the challenges that we, as the next generation of Australian leaders, will face. This event is not to be missed – it’s locked in for midday Thursday, 4 October (Week 4) in the Princeton Room, and includes a three-course lunch. Tickets can be purchased online for $50 for students and $100 for non-students. Check out BIG’s Facebook page for more details (www.facebook.com/BondInvestmentGroup).
CHAIRS REPORT CONTINUED JAMES GRAHAM
BIG Speakers Series Following the success of last semester’s FICC Sales & Trading Information Evening, with Bond Alumnus Sam Cochrane, we’re excited to announce that we’re getting ready for the next round of the Speaker Series. It’s early days still, but we’d like to try and keep a career focus on this event. If there’s an industry or profession that you’d really like to learn more about, let us know, and we’ll try to get someone along who can shed some light on what life is really like in the industry. At this stage, it looks like this will be held towards the end of the semester – stay tuned for more details. BIG is Recruiting At the end of this semester, a number of BIG’s old hands will be graduating and moving on. At least three executive positions will be vacant – President, Vice President (Media) and Vice President (Events). If we fill these positions internally, there will be a number of vacancies that we will need to call to be filled. If you are interested in joining BIG and becoming a part of our team, please send me through an email at email@example.com. You’ll be kept up to date with all the latest developments on the recruiting front.
GSR Contributions Remember, we’d always love to hear from you and we really encourage everyone to participate in BIG and the GSR publication. If you’ve got an area of interest, something that you’d like to write about, we’d be happy to publish it. Remember to check GSR out online too at www.gsreview.org. Remember, think BIG and don’t be afraid to get involved! James Graham. President | Bond Investment Group
TITANS OF INDUSTRY FORUM 4TH OF OCTOBER - PRINCETON ROOM
The 2012 Titans of Industry Forum will bring together some of the sharpest minds in the Australian business community to discuss some of the critical issues facing the business leaders of today and tomorrow. The Forum will be a luncheon, followed by a panel discussion and an opportunity for Q&A. This year’s panel is comprised of some of Australia’s true titans of industry, including: Mr David Murray AO - Former Inaugural Chairman, Australian Future Fund David Murray is a Senior Advisor of Credit Suisse. Mr. Murray was formerly the Chief Executive Officer of Commonwealth Bank and Chairman of the Australian Federal Government’s Future Fund. Mr Murray is currently a member of the Oliver Wyman Senior Advisory Board and a Consultant to Olbia Pty Ltd and the Commonwealth Treasury. He has previously served as a member of the Finance Sector Advisory Council and the APEC Business Advisory Council and is the inaugural Chair of the International Forum of Sovereign Wealth Funds. In 2001 he was awarded the Centenary Medal for service to Australian Society in banking and corporate governance and in 2007 he was made an Officer in the Order of Australia (AO) for his service to the finance sector. Prof Ian Harper - Partner, Deloitte Access Economics Ian Harper is one of Australia’s best known economists. August 2008, Professor Harper left academic life to become a Director of the former Access Economics, following a 25-year career, including 16 years at the Melbourne Business School. In recognition of his service to the University of Melbourne, Ian was elected Emeritus Professor on his departure. More recently, Professor Harper joined Deloitte Access Economics as a Partner when Deloitte acquired Access Economics in March 2011. From December 2005 to July 2009, Professor Harper served as inaugural Chairman of the Australian Fair Pay Commission, an independent statutory body whose role was to adjust minimum wages in Australia.
Mr Ed Wittig - Managing Director, Goldman Sachs Ed Wittig is head of the Goldman Sachs Industrials team in Australia, where clients are covered in mining services, transport and logistics, engineering and construction, building materials, paper and packaging and business services sectors. Previously, Mr. Wittig managed the European transport and logistics sector based out of London for four years. Prior to that, Mr. Wittig spent six years in the Sydney and Melbourne offices working in the Consumer and Retail, Industrials, Healthcare, and Technology, Media and Telecom groups. Mr. Wittig joined Goldman Sachs in 2001 as an analyst and was named Managing Director in 2011. Ed earned a BCom in Finance and Economics from Bond University in 2000. Robert Milliken - Australian Correspondent, The Economist (Moderator) Robert Milliken is a Sydney-based journalist and author, and the Australia correspondent for The Economist. As well as writing for the magazine’s Asia section on Australian politics, economic policy and other public issues, Mr. Milliken contributes regularly to The Economist’s online Asia blog, “Banyan” and to the group’s other publications such as “The World In”. Mr. Milliken was a participant in The Economist Group’s “Bellwether Australia” conferences in 2010 and 2011, looking at the future of Australia’s financial system, and has hosted conferences for The Economist Group on climate change policy in Australia. The overarching theme for year’s Forum will be: Tomorrow’s Front: The great challenges for the next generation of Australian leaders. Ticket prices start at $50 for students, and $100 for non-students/externals. To purchase your tickets, please follow the link to our Eventbrite page: here:http://tinyurl.com/cfpay8z.
CAN - DO CAMPBELL? WORDS ARCHIE MARR
Campbell Newman and the Liberal Na-
tional Party rose to power on the back of one of the most comprehensive election victories in recent times. Their surging popularity ascended from mounting dissatisfaction with the Labor party – figure headed by Anna Bligh. Queenslanders were frustrated with the State’s debt problems and rising expenses – so naturally much of Campbell Newman’s election pitch was in restoring the Queensland economy. Mr. Newman has come under criticism recently for cutting approximately 14,000 jobs in the public sector. Primarily, jobs have been slashed in Brisbane’s public service sector, which is notoriously subject to state derision. The perception that Public Servants are pen pushers and bludgers is unsurprisingly – and very cynically - being publically promoted by the LNP. Trust between the public sector and executive government is at an all time low. The continued denigration of public servants through forms of social media and political media strategies is leaving the sector with a sour vitriolic taste in its mouth. However, the message is loud and clear; the Public Service Commission recently mandated that the message to be communicated to the
Queensland public was: ‘(the cuts are) contributing to whole of governments efforts to reduce the State’s debt and ultimately return Queensland to a AAA credit rating’. Nevertheless, apart from being a brutal and unnecessary attack on the Queensland people, it may actually do more to damage the Queensland economy than to boost it. One of Queensland’s biggest economic prerogatives is to encourage foreign investment; however, one of the main incentives for private investment is a strong, stable government. Campbell Newman has recently referred to the Queensland Government as like a ‘bucket of custard… simply a mess’. What message does this send to private investors, the foreign investment market or to potential Bondholders? Recently an International Developer has blacklisted Queensland as an investment opportunity, saying the LNP can’t be trusted with its money. It was a Singapore-based Company Sembawang that cited the cuts to the public sector as part of the reason it wouldn’t consider future investment in the state. The company abandoned its $5 billion tourism development on the Gold Coast. Many have labelled the LNP’s cuts as callous, heartless and reckless. Queenslanders now
have every expectation of seeing results -- the public will need to see a restoration to the State’s previous AAA credit rating or a major slash in the public debt otherwise this brutal slash of public servants will be considered nothing more than body count to fund the government’s pre-election promises. It is an easy (political) option to cut the public service, but I don’t believe it is an easy governmental option. For example, Campbell Newman has indicated that the cuts to Queensland’s public service will not affect frontline services -- however in an area like Public Health it would be absurd to predict that 4000 jobs cuts isn’t going to affect frontline services. Deeper cuts to the public sector cannot be quarantined. Front-line staff will be cut – there is just not enough staff in corporate headquarters in Brisbane CBD to make up the type of cuts to costs that the Government demands. This transitions the situation from a simple cost cutting strategy, to a dangerous cut in necessary services to the community. It is a fine line, and what troubles many is the lack of detail on the strategy the incumbent government has provided in their process of slashing and burning the public service.
The Government has also overlooked the effect that such a drastic slash will have on the work that is achieved in State Government. By slashing 14,000 jobs, our public servants will (at least for the time being) remain in a constant state of fear from the upper-echelons of government (the politicians). It is a founding principle of our Westminster system that bureaucracy is separate from government. Our State requires senior public servants to give ‘frank and fearless’ advice to their political masters. Yet, when job security is on the line, our bureaucrats are no longer in such a stable position. Their voice has been stifled, and such a power imbalance may surely lead to poorly implemented policy and initiatives which compromise good government and indeed, our entire system of government. I believe the Queensland public is comfortable with the notion of cutting costs in our state, much of which could be cut within the Government – however, I don’t think anyone is comfortable with the way this has been achieved. A seemingly ad-hoc system of dismissing the Public Sector is not the solution to restoring faith in Queensland’s economy. The Government needs to show careful deliberation and detailed strategy to ensure that this procedure achieves what it was set out to: Reduce debt and restore the economy.
SIX MONTHS ON FROM AN ELECTORIAL LANDSLIDE
WORDS MATT MCLEAN
The 2012 Queensland State election saw Campbell Newman and his Liberal-National Party elected in a landslide. From 51 seats in 2009 Labor was reduced to a mere seven with the LNP skyrocketing from 34 to 74 seats. A record-breaking 15.59% swing was recorded against the government. As I put pen to paper in writing this article, the date is exactly six months since the polls were held and some half a year since the votes were counted and the tally announced. If history is written by the victors than as far as election go you can’t get more victorious than Campbell Newman and the LNP. As their clichéd prerogative suggests they will be the author of the history books on the Bligh government. And since day one they have not wasted a moment digging the boot into their predecessors. Press conferences, media releases, questions without notice all put forward the attack on more than a decade of Labor rule. If there is a microphone and a minister in Queensland then you and I will be reminded of what a terrible failure the former government was.
But truth be told there is a little more to the story. Don’t get me wrong, this was not a perfect government. You don’t suffer the worst defeat of a sitting Government in Queensland’s history for no reason. This government made mistakes, more than a few, yet history should record there was good as well as bad and successes just as there were failures. First let me disclose my conflict. I worked as a political staffer in the Bligh Government from 2010 right up until the voters of Queensland threw my boss (and effectively me) out of a job in 2012. Though no I don’t recall an uninterrupted array of rich rainbows and striking sunsets during this time I do have some natural sympathies toward the party and players of the government. To some extent however, the facts can speak for themselves. Bligh, a former Education Minister, oversaw significant school reform. The introduction of the prep-year before Year 1, hundreds of kindergartens opened and a state-wide school building program marked record funding in Queensland’s education system. Meanwhile, the long-over-
due transition of Year 7 from Primary School to High School brings this state in line with the rest of Australia. In social policy, Bligh was a leader of the left. She made real changes that affect the lives of real people. Same-sex couples were granted recognition through civil unions as well as given the right to access altruistic surrogacy. She was after all the first female Premier of Queensland the first-ever female to be elected to lead a state or federal government. People have too soon forgotten that it was as a result of Bligh that this year 90% of Queenslanders will be drinking fluoridated water â€“ conspiracy theories aside this has led to tangible improvements in oral health. Meanwhile, her $9 billion water grid has provided water security and stability for South East Queensland. Under her leadership $54 billion of infrastructure investment was made and 100, 000 jobs were created. Closer to home here in the Gold Coast the M1 expanded, the new
multi-billion dollar Gold Coast hospital was transformed to dream into reality and in 2018 we will host the Commonwealth Games for the very first time. This is of course just the story I am telling. And, so many of these achievements run alongside broken promises, asset sales and the loss of the stateâ€™s AAA credit rating. Like any government though, you take the good with the bad. History suggests that those on the left tend to make important social gains and leave significant financial losses and perhaps the Bligh Government is a case in point. I am sure there are more than a few thousand public servants now regretting their vote to oust the Bligh Government. The voice of the people however was overwhelming and indeed it was final. Queenslanders did award Labor government throughout 18 of the past 20 years, so at times the party must have done something right.
PHOTOS TAKEN AT : THE WOMEN IN BUSINESS EVENING VENUE EVENT HELD: UNIVERITY CLUB PHOTOS TAKEN BY: STUART MCKELVIE
WOMEN IN BUSINESS EVENING
THE EU BAILOUT:
GERMANY CONTRIBUTES TO THE ESM
WORDS REINHOLD SCHMIDT
The Euro Zone can breathe a bit easier with the rejection by Germany’s highest court over the injunction on constitutional grounds to stop German funds being contributed to the European Stability Mechanism (ESM). The German constitutional court convened over the matter of contributing to the Euro Bailout Fund. Chief Justice Andreas Vosskuhle of the German Constitutional court stated that, “No rule of the treaty must be interpreted in a way which would result in higher payment obligations by Germany, without the consent of the German representative.” The court ruled that it was legal under the constitution for Germany to take part in the bailout; however, Germany was limited to €190 Billion bailout. The petition for the injunction was signed by some 37, 000 people reported by the Sydney Morning Helard “ including the group More Democracy, academics, ordinary Germans and members of Dr Merkel’s own party.”
This decision means that the countries that are already in a heavy debt can continue to receive necessary support in order to avoid bankruptcy. However, despite Germany’s contribution, the available bailout funds are still not adequate enough to aid both Italy and Spain. In recent light of the hefty bailout, the citizens of Germany have not hidden their discontent over their taxes aiding countries seen as financially reckless. However, with the German federal elections on the horizon, this decision will allow ordinary citizens access to German financial reports and enabling them to identify fund usage. The German Chancellor, Angela Merkel said “Germany is sending a strong message today -- to Europe and beyond,--(the decision) freed the path that had always guided us and me very personally.” As the judges made their decision the euro responded by falling sharply, although it
bounced back when the decision was made to contribute to the fund At present the Permanent European Stability Mechanism (ESM) fund is worth approximately €500 billion. This is not enough to bailout the euro, the estimated required amount to continue to provide emergency financial aid to the larger countries, such as Spain, is €2 trillion. “Euro-zone member states are looking into ways to leverage the €500 billion--Plans for leveraging the ESM envision creating a vehicle to attract private investors as was created for the €440 billion EFSF last year.” (SPIEGEL)
It has been suggested that with the forces now available in the ESM combined with the European Central Bank plans to buy bonds of the struggling countries, there might just be enough fire power available to the Euro Zone to combat the financial crisis. “Within less than a week, the Euro Zone has finally received its long sought-after impressive bazooka,” said Carsten Brzeski, an economist with Dutch bank ING. “As a result, Euro Zone governments have now received more time to do their homework, implement reforms and austerity measures.”
THE MINING BOOM, OVER AND OUT? WORDS BRENT LOESKOW
Lately there has been talk that the great Australian mining boom which has helped the country avoid recession for 21 years, is over. These talks followed Federal Resource Minister - Martin Ferguson’s statement that “anyone with half a brain knows the resources boom is over”. Deutsche Bank has also warned of the end of the resources boom and the possibility of a recession following in 2013. However, Reserve Bank Governor Glenn Stevens has taken the “glass half full” outlook and said that he hasn’t seen any signs that the boom is over. Martin Ferguson’s statement arose following BHP’s shelving of the $20 billion plans to expand the Olympic Dam, blaming the soaring development costs, a high Australian dollar and the falling commodity prices. Woodside Petroleum’s $15 billion Pluto project in Western Australia has also been put on hold. The shelving of these projects has made investors nervous; Rio Tinto shares have fallen to their lowest levels since 2009 and drill-
ing contract Boart Longyear’s shares have dived more than 33 per cent. Miners have put the brakes on capital spending and this is worrying investors. All of these issues have been derived from the price of iron. Iron ore is Australia’s largest export and its price has increased tenfold over the past ten years, but due to low levels of productivity in China, the price of iron has fallen to a two-year low, falling more than 30 per cent in the past two months. So as it stands, the future Australia’s mining boom hinges on China. If China’s demand for steel continues to fall, Australia stands in a position where we are exposed. The Australian Financial Review has suggested that China’s biggest steel makers are also planning to shut unprofitable capacity permanently over the second half of 2012, which could effectively put an end to any doubts that Australia’s mining boom is over.
On a brighter note, the Australian Bureau of Statistics said it still expected a total of $119 billion to be invested in mining capital expenditure this year, making over 65 per cent of the expected investment across the economy. However, Deutsche Bank has warned that the investment pipeline is locked into its over-confidence. If the boom is over, analysts say that Australia will begin to see the retail, manufacturing and tourism sectors rebalance as the resources sector will contribute much less to the economy. However, as history has shown, after many booms comes a recession. Deutsche Bank analysts are the pessimists predict a recession for Australia in 2015. According to a report released by Variant Perception Australia: The Unlucky Country, Australia will face a run on its currency, a deeper collapse in housing prices and a bank funding crisis as it attempts to come to grips with life after the mining boom. However, Chief Executive of HSBC Paul Bloxham has insisted that “this mining
boom is different”. Bloxham has stated that it is different from historical mining booms as inflation has been contained this time around, which has reduced the price pressures on the economy. Bloxham also stated that this time foreign investment in the mining industry is much higher which “should cushion the effect on the local economy”. Approximately four fifths of the mining industry is foreign owned. Finally Bloxham said “the financial system is also not overly leveraged into the mining story, as it has been on some occasions in the past” and “Having escaped the global financial crisis reasonably unscathed, Australia’s banking system is also in pretty good shape - such that conventional monetary policy still works”. Even if the mining story fades, there will be room for other sectors to pick up and rebalance. So even if the mining boom is over, Australia should still be in a manageable position however, further adjustments to the Reserve Bank of Australia rates may be.
STOCK MARKET MANIPULATION WORDS JESSIE XUE
Market manipulation is a deliberate attemptto interfere with the free and fair operation of the market through creating false or misleading appearances with respect to the price of, or market for, a security, commodity or currency. Market manipulation is prohibited in Australia under Section s 1041A of the Corporations Act 2001. Early examples of market manipulation involved the spreading of false rumours or misleading information to affect the price of securities, which has been referred to as ‘information-based’ manipulation. On the other hand, manipulation by trading alone has been referred to as ‘trade based’ manipulation.
common techniques to manipulate the stock market include: pools, where agreements are made amongst a group of traders to delegate a single manager to trade in a specific stock for a specific period of time and then to share in the resulting profits or losses; Churning, when a trader places both buy and sell orders at about the same price, creating increase in activity to attract investors and hence increase in price; Runs, when a group of traders make rumors in order to drive the price of a security up(runs may also occur when traders are attempting to drive the price of a certain share down);
Despite historical effort to combat this insidious practice, many evidence and reported cases suggest that market manipulation is still a continuing problem in Australia and around the world. The article examines some of the common ways \market manipulation can occur.
Ramping, where actions designed to artificially raise the market price of listed securities and to give the impression of voluminous trading to make a quick profit; Bear raid, where price of a stock are pushed down by heavy selling or short selling.”
It has been found that brokers make up for 64% of the manipulation cases whilst corporate insiders such as executives and directors, large shareholders and stock underwriters are involved in the rest of the cases. Some of the
For example, in stock manipulation the public will mainly end up buying high and selling low. A successful stock manipulator will often exploit investors’ sentiment (optimism, eager to profit quickly, greed and fear) to achieve gains. For instance, if
the market manipulator wants to dump his shares, he could start a good news promotional campaign, making the company look like the next Apple. Newsletter writers and PR firms are often also hired to cheerlead the firm stock. Stockbrokers get offered “undervalued” stock to recommend the stock to the clients. Little “hype” messages can also be posted on the internet newsgroups, making a completely unknown company look suddenly appealing. After the investor takes the bait (bought the stock), the distribution phase (where stock trades huge volume at higher prices) is complete. This is then followed by market manipulators planting negative news about that company through other available communication channels to drive down the prices. Consequently, the investors feel helpless which is exactly the manipulator’s intention. Panicked, the investors start selling, less volume results and the price was lower. This means the manipulators have bought low and sold high; whereas the manipulated investors have bought high and sold low. It has been estimated that the mark-up price is three times higher than the floor during
stock promotion. The manipulator is well aware of the emotions experienced by the investor during both a run up (greed so they run into the stock) and a collapse (fear to lose everything so they rush to exit) and he plays them on the way up and on the way down. The manipulator will often make it look like someone else’s fault too when the investor loses his money. Market manipulation undermines public confidence in the fairness of markets which decreases the market’s liquidity and efficiency; consequently it is legislatively proscribed in many jurisdictions to ensure the ongoing health of the financial system. In conclusion, stock market manipulation has been around for as long as the creation of the market itself. Governments and regulators around the world have long recognised the detrimental effects that market manipulation has on the integrity and wellbeing of financial markets. This article shows an overview of the ways in which the stock market can be manipulated and it can be seen that market manipulation remains posting significant challenges to regulators due to its complex natures.
HAVE NO FEAR THE IPHONE IS HERE
WORDS HELENA MICHAEL
The iPhone 5 is no doubt one of the most hotly anticipated phones of the year with reports indicating that Apple sold two million units within 24 hours of its launch on September 12. Itâ€™s expected the evolutionary device will continue its successful growth with analysts forecasting that Apple may ship between 48 million and 53 million iPhones in the fourth quarter. But what is so special about this new gadget other than its impressive software and new form factor? How about the fact that it could boost the U.S. economy by $3.2 billion. According to JP Morgan analyst Michael Feroli, the iPhone 5 could come as a welltimed stimulus to the U.S. economy. These predictions were based on the fact that the latest iteration of the iPhone would sell for $600. As a result, $400 would contribute to a boost in GDP after $200 was deducted for imported parts. If Apple can sell 8 million units, the fourth quarter growth for the US will be around 0.33 percentage points or a
$3.2 billion boost to the economy. So what does this actually mean, and why is it so impressive? First of all, Feroli believes that the iPhone 5 will boost the U.S. economy by persuading people to spend more, not because of the phones impressive features. The results indicate that the U.S. economy has weak demand rather than supply because employers do not have the funds to hire more workers. As a result, increasing consumer spending increases demand and therefore, can increase employment. This shows how reliant the U.S. economy would be on consumer spending. If JP Morgan is correct, this GDP boost will be significant for the economy, especially when we consider the fact that the bank expected a 2% growth rate for the entire U.S. economy. But do not rejoice too soon, iPhone 5 sales will not be sustainable to support the U.S. economy. However, it may certainly be the
difference between poor and satisfactory economic expansion for the economy. So can we expect these results from the iPhone 5? Whilst Feroli states that these results are quite large and should not absolutely relied upon, there is definitely some substance to his predictions. Last year’s fourth quarter results from the iPhone 4S indicate an increase by 0.1 to 0.2 percent. However, the iPhone 5 has sold out double compared to its predecessor, therefore, JB Morgan’s figures may not be so implausible.
Whilst some may say the iPhone 5 is merely an incremental upgrade, the effect it may have on the U.S. economy could be substantial to say the least. If JP Morgan’s expectations are correct, the U.S. economy will certainly be thanking Apple for it and no doubt, will be more excited than ever when the iPhone 6 comes round.