Bank of Korea hikes interest rate to 3.25 percent (AP)

SEOUL, South Korea – South Korea's central bank raised its key interest rate for the fifth time in less than a year as it keeps up a battle against inflation amid solid economic growth.

The Bank of Korea announced Friday that it lifted the benchmark base rate to 3.25 percent from 3 percent at a monthly monetary policy meeting.

Experts had been somewhat divided on the outcome. A total of nine economists out of 15 surveyed by Yonhap Infomax, the financial news arm of Yonhap news agency, predicted the BOK would leave the rate unchanged.

South Korea's central bank has raised borrowing costs five times since July of last year from a record low 2 percent amid positive economic growth and concerns about rising prices.

The latest increase came even as inflation has eased for two straight months, though it remains outside the central bank's comfort zone for price increases.

The bank's rate-setting monetary policy committee, chaired by Gov. Kim Choongsoo, said in a statement that South Korea's economy was performing well on strong exports, but that prices remained a concern.

"The committee expects inflationary pressures to continue in the coming months, driven largely by increased demand from the economic upswing and by inflation expectations," the statement said.

South Korea's consumer price index came in at 4.1 percent for May, the government announced earlier this month, which was a slight easing from the 4.2 percent recorded in April. The index peaked this year at 4.7 percent in March, which was the highest level since October 2008.

Still, inflation has exceeded the top of the BOK's inflation "tolerance range" for five straight months through May. That range is plus or minus 1 percentage point from the bank's inflation target of 3 percent.

"The policy statement remains hawkish, signaling further hikes," Kwon Goohoon, economist at Goldman Sachs in Seoul, wrote in a report, adding he expects the bank to raise the rate to 3.75 percent by the end of the year.

South Korea's benchmark stock index fell 1.2 percent to close Friday at 2,046.67 after the rate increase and amid concerns global economic growth is slowing. The South Korean won, meanwhile, rose marginally to 1,082.60 against the dollar.

Separately, the bank announced earlier Friday that the country's producer price index, which measures prices of goods and some services traded between businesses, rose 6.2 percent in May from the same month last year.

The bank's base rate influences a variety of borrowing costs in South Korea, including those on overnight loans between financial institutions and more broadly on debt for mortgages and credit cards.

The current tightening phase comes after the bank slashed the rate by a total of 3.25 percentage points between October 2008 and February 2009 to a record low 2 percent as it joined other central banks in fighting the global financial crisis.

South Korea's economy, Asia's fourth largest, grew a revised 1.3 percent in the first quarter of this year from the previous three months, the central bank said Wednesday. That was slightly lower than the 1.4 percent expansion initially announced in April.

South Korea's rate rise came as the European Central Bank left its key rate unchanged Thursday at 1.25 percent for the second straight month.

ECB President Jean-Claude Trichet, however, signaled that the rate would likely be raised in July given the danger that higher oil and commodity prices could fuel inflation as the European economy expands.

Also Thursday, New Zealand's central bank held its key interest rate at 2.5 percent, citing disruption by a major earthquake in February to the country's recovery from recession as a reason to continue to boost the economy.

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Twitter CEO says 80 percent of advertisers renew (Reuters)

SAN FRANCISCO (Reuters) – More than 80 percent of the companies that advertise on Twitter renew their marketing efforts on the microblogging service, the company's chief executive said on Wednesday.

Speaking at the D9 conference, organized by the News Corp-owned tech news blog AllThingsDigital, Twitter CEO Dick Costolo said that the Internet company's long-term success was not "correlated" to an initial public offering of Twitter's stock.

Twitter CEO Dick Costolo said the company counts roughly 600 advertisers, up from 150 advertisers at the end of 2010.

While Twitter has stepped up efforts to build an advertising business, Costolo said Twitter was not under pressure to boost revenue.

"We don't need to optimize for short-term revenue," he said.

(Reporting by Alexei Oreskovic. Editing by Robert MacMillan)

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Nokia warns of weaker sales, shares drop 15 percent (Reuters)

HELSINKI (Reuters) – Mobile phone maker Nokia Oyj slashed its sales and profit outlook on Tuesday and scrapped forecasts for 2011 due to tumbling prices and intense competition, sending its shares crashing 15 percent.

Nokia, once the undisputed force in the mobile phone market, has seen its position challenged in recent years, particularly losing ground in the smartphone market to newcomers Apple Inc and Google Inc.

The company, which is still the number one handset maker by volume, has overhauled its phone business, adopting Microsoft Corp's software instead of its own Symbian platform.

But it continues to suffer from mounting competition and said in a profit warning it expects net sales from its devices and services business in the second quarter to be "substantially below" its previous forecast of between 6.1 billion euros ($8.7 billion) and 6.6 billion.

It expected its non-IFRS operating margin for devices and services to be around break-even in the second quarter, rather than previously expected range of 6 percent to 9 percent.

"This update is primarily due to lower than previously expected average selling prices and mobile device volumes," the company said.

"Given the unexpected change in our outlook for the second quarter, Nokia believes it is no longer appropriate to provide annual targets for 2011," it said, adding it would still provide quarterly updates.

"Given the internal turmoil that will be generated by this news, it is increasingly difficult to see that Nokia can leapfrog one handset generation and be on par with the competition in early 2012. Investors should be more than concerned about the dividend possibility," said WestLB analyst Thomas Langer.

"It seems like it's especially their emerging markets exposure in China where they are hit by competition in the low end of the market," said Sydbank analyst Morten Imsgard.

"Short term, there's a lot of turmoil in the company."

The warning comes a month after Nokia said it would cut 7,000 jobs and outsource its Symbian software development unit to cut costs.

The shares were down 14.9 percent at 4.908 euros at 9:17 a.m. EDT.

(Reporting by Helsinki Newsroom; Editing by Andrew Callus and David Holmes)

($1=.7000 Euro)

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MasterCard says 62 percent of people would make payments using mobile phones (Appolicious)

Google (GOOG) and a number of other companies think that paying for things using smartphones might be the future of brick-and-mortar commerce.

It’s called Near-Field Communication, and it’s a technology found in Google’s Nexus S phone and other smartphones that have recently hit the market. It allows the devices to broadcast a short-range signal that can interact with certain receivers. Users could wave the phone at a payment terminal when they go to check out at the grocery store, and their credit card information would be used instantly to complete the transaction. It could also be used to gather information from movie posters, for example, that would offer advertising information or show times.

But payments are the real power of NFC technology, it seems. According to a report from Fierce Mobile Content, MasterCard (MA) has been surveying customers to see if they’d be willing to use their mobile devices as payment tools for transactions, with 62 percent of those asked responding in the affirmative.

The survey found that 63 percent of respondents between ages 18 and 34 would be willing to make mobile NFC purchases, but that number dropped down to 37 percent for respondents who were 37 or older. MasterCard also found a disparity between men and women in mobile payments, finding that 51 percent of males said they were comfortable with NFC transactions, compared to 40 percent of females.

Respondents in the survey were also asked how they feel about having cell phones on them – 65 percent of 18- to 34-year-olds said they felt more ‘naked’ without their phones than their wallets, compared to 34 percent of respondents older than 35. Between men and women, 50 percent of women said they felt more exposed without a mobile device than a wallet, with only 36 percent of men responding in the affirmative.

MasterCard has worked with Google in the past to help embed NFC payment technology in smartphones, which is supported by Google’s Android 2.3 Gingerbread operating system.  Other companies, like Amazon (AMZN), are considering getting in on near-field technology, considering it the cutting edge of mobile capabilities. Verifone (PAY), a maker of payment terminals for retailers (you’ve probably seen them – they’re often used for scanning credit and debit cards and inputting PINs), is adding NFC capabilities to all its newly manufactured terminals, as well.

But MasterCard’s survey suggests that while 62 percent of respondents are willing to go along with mobile NFC payments, that means almost half of respondents still feel the technology is a bit dubious. There’s a lot of investment going into NFC from many sources, but it’s going to take an investment in convincing people that near-field communication is a trustworthy and safe way of passing financial information before it really takes off.

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Taxes to Balance the Budget? Not Unless Rates Go Up 150 Percent, Study Says

Public Notice

A table by Public Notice shows how much more taxpayers would have to pay of their income in order to match current spending.

It's Tax Day, and the Washington chatter is all about whether America's top earners should be taxed more.

But, as the dim outlook from a key ratings agency showed Monday, Uncle Sam's deficit problem is deep. And if the federal government really wanted to use the tax code to close the deficit, it turns out everybody would feel the burn.

A new Tax Day study showed that if Washington wanted to balance the budget using tax increases alone, rates would have to more than double across the board -- including on the middle class -- to keep up with federal spending.

As Republicans often argue, the top tier already pays a greater percentage in taxes than all the rest. The government could extract hundreds of billions more by upping their rates, but without significant spending cuts would have to turn next to the middle brackets.

"Everyone would be looking at a tax hike if that's the answer here," Public Notice director Gretchen Hamel said.

IRS data showed that in 2008, the top 5 percent of earners -- households earning more than $160,000 -- accounted for about 59 percent of all federal income tax paid. The next 45 percent -- solidly middle-class taxpayers earning between $33,000 and $160,000 -- accounted for about 39 percent of all personal income tax paid.

The bottom 50 percent accounted for the remaining sliver of tax revenue. In fact, a Tax Policy Center study showed that 45 percent of households in the United States will pay no federal income tax for 2010.

White House spokesman Jay Carney said Monday that those households do pay taxes. 

"There are many taxes besides income taxes," he said. "Those who are paying payroll taxes, are working Americans, they very much have a stake in the system and they very much have a stake in the economic future of this country."

President Obama has said emphatically that he will not allow the tax rate on families earning more than $250,000 to remain at 35 percent after 2012, a source of contention among Republicans who say the top earners are already carrying the brunt of the "shared sacrifice." 

Meanwhile, critics warn that tax hikes will, in all likelihood, have a limited impact on the deficit -- unless they are raised beyond recognition.

The estimate from the nonpartisan Public Notice demonstrated this point. It showed that if Washington wanted to hoist tax rates to actually cover spending, the top tier rate would go from 35 to 88 percent; the middle tier from 25 to 63 percent and the lowest from 10 to 25 percent.

"You'd have to more than double taxes and you still wouldn't solve this problem," Hamel said. "And the problem is spending."

Obama is targeting his proposed increase on the top 2 percent of wage earners, casting it as a hike on millionaires and billionaires. He argues they can afford to pay a little more to help the country balance its books.

But as one might expect, virtually nobody thinks they’re taxed too little -- though the burden varies drastically across the income scale.

A new Gallup poll released Monday showed that while 57 percent of Americans describe their income tax as "fair," most think their taxes are still too high. The more an individual made, the stronger they felt on that question, the poll showed.

The Obama administration emphasizes that its deficit reduction plan leans more on spending cuts than tax increases. The administration is looking at $1 in revenue increases for every $3 in spending cuts. That's about the ratio being eyed by the "gang of six" senators working on a bipartisan compromise.

But Sen. Mark Warner, D-Va., a member of that group, said in an interview Sunday that the revenue increases don't have to come from tax rate hikes. Rather, he stressed that lawmakers could instead cut back on deductions and other loopholes that are costing the U.S. Treasury.

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Fox News Poll: 24 Percent Believe Obama Not Born in U.S.

are eligible to be president under the U.S. Constitution.

A Fox News poll released Thursday found 24 percent of voters believe President Obama was born somewhere other than the United States.

As one might expect, there are huge partisan differences on this issue. Still, 12 percent of Democrats think the president was born elsewhere, as do 21 percent of independents. That percentage climbs to 37 percent among Republicans. Among those who consider themselves part of the Tea Party movement, 41 percent think the president was born outside the U.S.

Most American voters -- 67 percent -- believe Obama was born in the United States. That includes almost all Democrats (84 percent) and most independents (69 percent). Less than half of Republicans (47 percent) and Tea Partiers (44 percent) think so.

Click here for complete poll results.

Questions about Barack Obama’s birthplace began during the 2008 presidential campaign -- despite birth announcements from newspaper archives and the state of Hawaii releasing birth records. The issue was recently re-ignited by possible Republican presidential candidate and businessman Donald Trump, who on several television talk shows said the president should produce an original

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