Sox First

© ssoosay

The story about the scandals at Rupert Murdoch's International keeps getting worse. The big news from Reuters is that five senior staff at London's top-selling daily The Sun have been arrested as part of a probe into journalists paying police for tip-offs. "Four current and former Sun staff had already been arrested last month, and the latest detentions raise questions about the viability of Britain's best selling daily,'' Reuters reports. It also raises serious questions about the long term viability of Murdoch's UK business.

The arrests have been triggered by information supplied to the Yard by the Management and Standards Committee (MSC), an independent committee set up by the New York-based News Corporation, the parent company of News International and as The Guardian says, this could actually do serious damage to the Murdoch empire. "What the committee finds has potentially huge implications, not just for Murdoch's UK newspapers, but the mogul's empire, which stretches across Europe to the US, Latin America and Australia. Legal experts speculate that the bribery allegations could lead to the broadcasting watchdog, Ofcom, reviewing Murdoch's stake in Sky television. Under UK law, owners must prove they are "fit and proper" to own media interests. Any evidence suggesting News International titles were engaged in the corruption of officials could also trigger an investigation by the US authorities into breaches of the Foreign Corrupt Practices Act (FCPA) which prohibits corrupt payments to foreign government officials. It is this – the threat of the cancer spreading outside the UK and eating away at an empire that includes Fox News and 20th Century Fox film studios, and last year had revenues of $34bn (£21.5bn) – that really worries Murdoch's lieutenants."

© Enokson

Apple shares have soared past $490 per share and are now heading towards $495. Apple is experiencing extraordinary growth. Check this chart in Google Finance. You can see that Apple's market cap was $461 billion towards the end of the week. That makes it bigger than Microsoft and Google combined. Microsoft's market cap is about $258 billion, and Google's is $199 billion.

So what does all this mean? And why is it happening. According to this piece of good analysis, investors see a strong growth in Apple, investors are buying what they are consuming and we're seeing riots in China over Apple 4S phones, long queues in US and Europe for new versions of Apple products are an indicator of the demand for Apple products, investors are already hearing technology pundits talk about what Apple could do with the iPad 3, slated for March 2012 launch, Apple reported one of the most profitable quarters ever for any US company with its net income more than doubling to $13.06 billion in the October-December 2011 quarter, boosted by strong sales of its bestsellers iPhone, iPad and Macintosh computers and finally, Apple generated $17.3 bn in cash in the December 2011 quarter. It now has a cash pile of over $95 billion now, a fifth of its current stock market. With that sort of cash, investors are expecting strong dividends.

But Erik Sherman at CBS MoneyWatch says it can't last forever. "Pulling off mind-boggling business accomplishments one quarter after the next is impressive, but experience and the law of averages suggests that it won't last forever. Google is in part a reason, because Android picks up adoption faster than Apple's iOS, the software that runs the iPhone and iPad, can. But it's not just Google. There are only so many new markets for devices. Apple goes into new areas, but breaking into something like television will be much harder, largely because people have to pay the full freight themselves rather than getting subsidies. Also, eventually brands trip up and fall out of favor. Maybe Apple can maintain the same blistering pace for another few years, but that will depend on finding new product categories that can fuel unending popularity. Wall Street likes Apple, but doesn't want to bet the rent on the future."

© ell brown

The big news is that Standard & Poor's has downgraded 345 Italian banks. The New York Times reports: "UniCredit, Intesa Sanpaolo and Banca Monte dei Paschi di Siena were among 34 Italian financial firms downgraded by Standard & Poor's on Friday after the credit ratings firm reduced the nation's grade last month. Long-term ratings on UniCredit, Italy's biggest bank, and Intesa, its second largest, were lowered to BBB+ from A, S.& P. said in a statement. Monte dei Paschi, the No. 3 bank, was reduced to BBB from BBB+. All three have a negative outlook, the agency said. Italy's credit rating was cut two levels, to BBB+ from A on Jan. 13 after S.& P. said European leaders' struggle to contain the region's debt crisis would complicate the country's efforts to finance borrowings. S.& P. revised its banking industry country risk assessment, known as Bicra, for Italy to Group 4 from Group 3, citing mounting risks. 'Italy's vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks' significantly diminished ability to roll over their wholesale debt,' S.& P. said in a separate statement on the country's financial industry. 'We anticipate persistently weak profitability for Italian banks in the next few years.'

Italian Prime Minister Mario Monti has shrugged it off, claiming it's "mechanical". He says Italy is not Greece

He's right, it could be worse. The Greek crisis was never a serious threat to Europe because Greece accounts for less than two per cent of the EU's economy. A default by Athens could be managed as a controlled explosion. A default by Rome, on the other hand, would destroy the European economy The calamity now overtaking Italy was ordained when the euro was launched. In order to qualify, governments were supposed to have brought their total debts below 60 per cent of GDP; Italy's was 114 per cent. Italy was a disaster long time in the making.