The world is looking for a currency other than the dollar, without much success. Every time there is even a hint of trouble in world markets, the dollar surges, reminding the euro and the yen that they are nowhere near the Almighty. That has not prevented Russia from joining the ranks of those aspiring for global acceptance of their currencies. Gold keeps rising and slipping on and off, though some insist it can only go up. China has reportedly decided to let the yuan appreciate to some extent. Meanwhile, US keeps admonishing other countries for fiscal and external deficits and surplus.
Moody’s cut Greece’s rating to near junk last week and the euro surged to over 1.23. The future of Europe and the euro continues to be viewed as uncertain. Austerity plans are being followed up with higher taxes and increases in retirement age. EU, as well as the euro zone do not have significant external deficits and the austerity wave can only help restore fiscal balance. Europe was generally less boisterous than the Americans during the heydays of 2003-2008 and seems to have started settling down with its own new-normal, i.e. lower living standards. If that is what Soros calls a prolonged recession, well, so be it.
What is happening in the US economy remains unclear but it is absolutely clear that US (and Japan) have no intention of raising rates in the foreseeable future. Both continue to look at government spending as the only way to boost employment and keep the economy going. There is little hope of any drastic changes in the financial system as thousands of lobbyists are registering silent successes in blunting most of the proposed amendments. The real problem is that America wants to do nothing more than managing other people’s money.
Switzerland has finally agreed to provide details of 4450 clients suspected of tax evasion to the US. Greece continues to face flak for profligacy, particularly pensions (only 1.7 workers per pensioner) which add up to an eighth of GDP.
Ghana’s economic woes appear to be peaking and considering the increasing attention Africa as a whole is receiving from investors, it may be in for massive investments. Afghanistan’s estimated mineral wealth includes iron ore and copper deposits worth $421 bn and $273 bn, respectively, besides significant deposits of gold, molybdenum and silver. Chinese firms have already committed investment of $ 4 bn in copper mines.
Taiwan has drawn a billion dollar plan to develop its own cloud computing. Romania is asking its citizens to donate cash for keeping deficit within limits agreed with IMF under a $25 bn aid package. Russia has developed a new fighter jet that it plans to produce jointly with India. Putin says it matches F-22 of US and will cost less than a third.
Obama fumed and fretted from the Oval office last week, vowing to make BP pay, but the very next day BP’s CEO Hayward used “I don’t know” 66 times when deposing before the US Congress. Nobody knows how and when the spill estimate rose from 5,000 to 60,000 barrels a day as media, politicians, lobbyists, bankers, investment firms and even oil companies are having a field day figuring out ways of making money from the disaster. Nothing is clear, except that continued gushing of oil in the Gulf of Mexico has fathomed crude prices successfully, at least for the time being.
Fannie Mae and Freddie Mac, which together either own or have guaranteed about three fourth of all US housing mortgages ($10 tn plus) continue to receive significant government aid for writing off bad loans. One reason is that foreign governments own their bonds to the extent of over $900 bn. Citi plans to raise $3 bn for funding PE and hedge businesses. AgBank of China (24,000 branches) is once again preparing to launch its massive $23 bn IPO, the biggest ever in the world.
Facebook surprised markets last week by announcing 2009 revenue of $800 mn; its COO Sheryl Sandberg insists email is on the road to extinction as only 11% of teens use email, the rest opting for texting. Apple sold 600,000 units of its new iPhone4 on the very first day. Sony, Nintendo and Microsoft are upbeat on prospects of video games and are now talking in terms of cloud gaming which would let consumers hire, instead of buying.
Boehringer has been refused approval for its female version of Viagra by the US FDA. Nestle is suing Sara Lee for patent infringement. Genting, debt free Malaysian casino operator having $1.7 bn in cash, is planning to set up shop in US. Toyota has suspended production at its main unit in China because of a strike at a parts supplier. NewsCorp controls BskyB but wants full control and is willing to pay $12 bn for the remaining 61% stake. FedEx says healthcare and pension costs will pinch profits in 2011; revenue rose 20% to $9.43 bn last quarter.
Women’s groups in France are aggressively moving to raise the number of women on company boards; some wore fake beards last week to tell a French water company that they resent the board having only one woman. Soccer continued to dominate lives last week. Lightning destroyed a 62 foot Jesus statue in Ohio last week.
Russia banned consumption of vodka at a top conference last week; only wine was allowed. A convict was executed by a firing squad in Utah in response to his own wish. A recent survey found that obesity results in less sex, more sexual diseases and more unplanned pregnancies. Warren Buffett and Bill Gates, together worth about 100 bn, are asking other American billionaires to give away at least one half of their wealth to charities under a campaign they call the Giving Pledge. A management guru says the ability to sleep in planes is a major prerequisite for success in the corporate world.
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Showing posts with label Greece. Show all posts
Showing posts with label Greece. Show all posts
Sunday, 6 June 2010
Dow plunged below 10K, euro slid to where it started (1.19) ten years ago and commodities dived last week like there was no bottom. Oil looked up for a while but was close to 70 again. Volatility in US-EU indices attained parity with Mumbai and Hong Kong last week. In the midst of collapsing commodities and crumbling currencies, uncertain and nervous is the only way to describe the atmosphere.
Greece and Spain were joined by Hungary last week. Ratings downgrade for several others are under consideration. Europe is on an austerity binge. Every economy is freezing wages and pensions and hiking taxes. Even Germany is planning to hike VAT on some products from 7% to 19%. Sovereign ratings are likely to be cut for several economies.
For US austerity is a four letter word but household savings are rising. “(US) Savings will have to rise faster than consumption for the coming years,” said Nouriel Roubini last week. Household debt of Americans is over 100% of annual disposable income and if they keep saving at the current rate of 5%, it may take them a decade to cut it by half. Since China isn’t listening on yuan, US has started prescribing higher consumption for EU and Japan also.
Eurozone banks may have to write off 195 bn euros in loans over the next 18 months, in addition to 238 bn of bad debts incurred since 2008. European banks, in turn, owe some money to US banks. Singapore spends 3% of its GDP on R&D and has started attracting students and scientists from all over the world. France has called for a separate body to handle economic governance in the eurozone. Deutsche Securities mistakenly placed sell orders for index futures worth $182 bn at Tokyo exchange. It was corrected quickly. Israel’s offshore discoveries of natural gas are being estimated at 16 tn cf, twice UK. 6.76 mn Americans have been unemployed for 27 weeks or more and the figures for Europe aren’t very different. China now owns two of the world’s ten fastest supercomputers, one of which ranks second in speed.
BP CEO Tony Hayward is 53 and even after having spilt 53 mn liters of oil in the Gulf of Mexico, continues to look 43. That by itself is reason enough for Obama to feel furious. BP’s market cap has plunged over 35% and many are looking at it hungrily. Meanwhile, Lukoil profit doubled last quarter to 2 bn and Shell has decided to convert its refinery in Montreal into a terminal since it has failed to find a buyer.
Google has started reducing internal use of Windows because of security concerns. Fujitsu plans to complete building of the world’s fastest supercomputer by 2012 and have sales of a billion dollars a year by 2015, giving it about a tenth of the global market; currently HP and IBM have 42% and 37% share, respectively. Apple seems to be preparing for launch of a new version of iPhone, and Reliance Media of India is to form a JV with CBS of US to launch TV channels.
CitiFinancial of the Citi group, up for sale, is to close 330 of its 1,833 branches in US. Prudential has pulled out of its deal for AIG’s Asia business having 320,000 agents and 23 mn customers and the surprising part is no other buyers have emerged. JPMorgan Chase has been fined nearly $50 mn by UK for failure to protect client money.
Ford’s China JV is to recall 236,643 cars, Hitachi has announced plans to trim its portfolio and allocate 70% of investments to infras like power plants, and Boeing has received orders for 65 planes from Russian Technologies, some of which are to be used by Aeroflot also, besides Rosavia, its own carrier. So far Aeroflot has been buying Airbus.
Kimberly-Clark has opened its $170 mn unit in Russia to make Huggies diapers, and P&G has finally realized that men’s skincare products will gel with Gillette which it bought five years ago.
Whirlpool is recalling 1.7 million dishwashers in US due to potential fire hazard and McDonald's has recalled 12 mn tumblers because they contain cadmium. Wal-Mart expects to create 500,000 jobs worldwide over the next five years, though it is feeling the pressure on its customer base in US as footfalls are falling because of high gasoline prices.
United Airlines left a woman locked in a plane by mistake; the woman has sued for illegal detention. China has asked bus drivers to address passengers as sir or madam, instead of comrade. Former US VP Al Gore is divorcing his wife after 40 years of marriage, the apparent reason being that enough is, well, enough. A bird put on so much weight after Australians fed too much of sausages and barbecues that it can’t fly now. The Sydney Zoo is exercising her to make her fit to fly.
Research says coffee offers no real perk up to regular drinkers, Americans prefer to treat depression with drugs rather than therapy, German males accord greater preference to watching World Cup than having sex with their partners, and a brunette Citi had fired last year because she was too much of a distraction to male colleagues has filed a lawsuit.
Cosmetic surgery business is booming in the still war ravaged Iraq and Australians have started organizing concerts for canines. Air pollution in London continues to exceed EU limits and the EU Commission is contemplating a fine of several hundred million dollars. Environmentalists have built a five room hotel in Rome with inorganic waste.
Besides financial, political uncertainties have also surfaced. Korea and Iran issues continue to simmer, if not boil. Hold your money in your pocket. Statistics savvy economists are going to make room for some down-to-earth attitudes and prices of real estate, commodities and consumer goods are all likely to decline significantly. Definition of savings in these times is money in the bank, not in mutual funds.
xxxxx
Greece and Spain were joined by Hungary last week. Ratings downgrade for several others are under consideration. Europe is on an austerity binge. Every economy is freezing wages and pensions and hiking taxes. Even Germany is planning to hike VAT on some products from 7% to 19%. Sovereign ratings are likely to be cut for several economies.
For US austerity is a four letter word but household savings are rising. “(US) Savings will have to rise faster than consumption for the coming years,” said Nouriel Roubini last week. Household debt of Americans is over 100% of annual disposable income and if they keep saving at the current rate of 5%, it may take them a decade to cut it by half. Since China isn’t listening on yuan, US has started prescribing higher consumption for EU and Japan also.
Eurozone banks may have to write off 195 bn euros in loans over the next 18 months, in addition to 238 bn of bad debts incurred since 2008. European banks, in turn, owe some money to US banks. Singapore spends 3% of its GDP on R&D and has started attracting students and scientists from all over the world. France has called for a separate body to handle economic governance in the eurozone. Deutsche Securities mistakenly placed sell orders for index futures worth $182 bn at Tokyo exchange. It was corrected quickly. Israel’s offshore discoveries of natural gas are being estimated at 16 tn cf, twice UK. 6.76 mn Americans have been unemployed for 27 weeks or more and the figures for Europe aren’t very different. China now owns two of the world’s ten fastest supercomputers, one of which ranks second in speed.
BP CEO Tony Hayward is 53 and even after having spilt 53 mn liters of oil in the Gulf of Mexico, continues to look 43. That by itself is reason enough for Obama to feel furious. BP’s market cap has plunged over 35% and many are looking at it hungrily. Meanwhile, Lukoil profit doubled last quarter to 2 bn and Shell has decided to convert its refinery in Montreal into a terminal since it has failed to find a buyer.
Google has started reducing internal use of Windows because of security concerns. Fujitsu plans to complete building of the world’s fastest supercomputer by 2012 and have sales of a billion dollars a year by 2015, giving it about a tenth of the global market; currently HP and IBM have 42% and 37% share, respectively. Apple seems to be preparing for launch of a new version of iPhone, and Reliance Media of India is to form a JV with CBS of US to launch TV channels.
CitiFinancial of the Citi group, up for sale, is to close 330 of its 1,833 branches in US. Prudential has pulled out of its deal for AIG’s Asia business having 320,000 agents and 23 mn customers and the surprising part is no other buyers have emerged. JPMorgan Chase has been fined nearly $50 mn by UK for failure to protect client money.
Ford’s China JV is to recall 236,643 cars, Hitachi has announced plans to trim its portfolio and allocate 70% of investments to infras like power plants, and Boeing has received orders for 65 planes from Russian Technologies, some of which are to be used by Aeroflot also, besides Rosavia, its own carrier. So far Aeroflot has been buying Airbus.
Kimberly-Clark has opened its $170 mn unit in Russia to make Huggies diapers, and P&G has finally realized that men’s skincare products will gel with Gillette which it bought five years ago.
Whirlpool is recalling 1.7 million dishwashers in US due to potential fire hazard and McDonald's has recalled 12 mn tumblers because they contain cadmium. Wal-Mart expects to create 500,000 jobs worldwide over the next five years, though it is feeling the pressure on its customer base in US as footfalls are falling because of high gasoline prices.
United Airlines left a woman locked in a plane by mistake; the woman has sued for illegal detention. China has asked bus drivers to address passengers as sir or madam, instead of comrade. Former US VP Al Gore is divorcing his wife after 40 years of marriage, the apparent reason being that enough is, well, enough. A bird put on so much weight after Australians fed too much of sausages and barbecues that it can’t fly now. The Sydney Zoo is exercising her to make her fit to fly.
Research says coffee offers no real perk up to regular drinkers, Americans prefer to treat depression with drugs rather than therapy, German males accord greater preference to watching World Cup than having sex with their partners, and a brunette Citi had fired last year because she was too much of a distraction to male colleagues has filed a lawsuit.
Cosmetic surgery business is booming in the still war ravaged Iraq and Australians have started organizing concerts for canines. Air pollution in London continues to exceed EU limits and the EU Commission is contemplating a fine of several hundred million dollars. Environmentalists have built a five room hotel in Rome with inorganic waste.
Besides financial, political uncertainties have also surfaced. Korea and Iran issues continue to simmer, if not boil. Hold your money in your pocket. Statistics savvy economists are going to make room for some down-to-earth attitudes and prices of real estate, commodities and consumer goods are all likely to decline significantly. Definition of savings in these times is money in the bank, not in mutual funds.
xxxxx
Sunday, 30 May 2010
“Death to America” was not what Iranians shouted when their President addressed a public meeting last week. They chose to demand employment instead. That should worry US-EU more than equities, currencies and commodities taken together. The eurozone crisis is far from over as Portugal, Italy and Ireland are yet to happen. Sweeping austerity measures have been announced by Spain and Italy and more are in the offing but outcome is uncertain. Italy seems to be heading for Greece-like political upheaval as public employees wouldn’t be “the only ones to make sacrifices.” Possibility of the entire Europe facing a political uprising can now hardly be ruled out.
The dollar is the safe heaven yet again, notwithstanding China’s commitment to maintain its exposure to the euro. The big surprise last week was recovery of oil.
Higher taxes on high incomes is being seen as a way of placating people, though history says it doesn’t work. Money cannot be collected back for redistribution beyond a limit; its concentration has to be prevented, not cured.
The reality is that the developed world cannot export enough to cover what it needs to import. Except for an orderly move towards what they call recession, there is no way US-EU can reduce the pain of their people. Germany is pushing for a formal process for sovereigns’ bankruptcy in Europe and it is preparing to extend ban on naked short selling to all stocks. However, global consensus on leashing of financial magicians is still nowhere on the horizon. Lofty words spoken at the Capitol are leading to nowhere in particular, Obama is passive and confused as ever, and in Europe the Sarkozys and Berlusconis are too busy living their glamorous lives to the hilt.
Share of services in Hong Kong GDP has risen from 86.1% in 1999 to 92% in 2009; services exports were $85 bn last year. China holds US Treasuries worth $895 bn now, compared to Japan’s 785 bn. An economist says China stocks can rebound only if real estate crashes. Citi and BNP have forecast 20% drop in home prices this year.
Japan’s unemployment is refusing to decline and more job cuts are in the offing. Govt has waived high school tuition fees as a direct transfer of money to the people. India GDP grew 8.6% annualised in Q1-2010 while car sales rose 40%. Zambia is to raise $1 bn from sovereign bonds for rail and power projects. Zimbabwe inflation is down to minus 7.7% and GDP growth this year is estimated at 7%. Rwanda also expects to grow 7% this year. Africa just may be in for a mercurial makeover as cash-laden corporates and banks have no parking places left. Russia, which has become as sensitive to oil as OPEC countries, is pushing companies to invest in what it calls single-company towns.
BP continued to be the most talked about company in the world last week as oil kept gushing from its damaged well in Gulf of Mexico. Obama’s popularity has plunged as Americans are unhappy with his handling of the spill. Overall impact for BP is being estimated in tens of billions. Shell is buying East Resources (shale gas) of US for $4.7 bn; its plans to drill wells near Alaska are being put on hold because of environmental concerns.
Apple’s market cap has grown ten times in last ten years and last week it surged past Microsoft, to $222 bn; Apple says consumers in Australia and Japan waited 40 hrs in queues to buy iPad. Dell has launched Streak tablet computer that can double as a mobile to compete with iPad, Facebook has started offering more privacy options to users and Intel capacity utilization has risen to 80% from last year’s 50%. IBM is buying Sterling Commerce unit of AT&T for $1.4 bn cash to expand software and has announced plans to spend $20 bn on M&A over the next five years.
Foxconn, Taiwanese owned contract electronics manufacturer with 800,000 employees in mainland has decided to raise wages 20% after several suicides. J&J has recalled 40 non-prescription childrens products after its Pennsylvania factory was found ill-maintained. Lehman has sued JPMorgan for having seized collateral worth $8.6 bn days before 15 Sep 2008. Societe Generale is pursuing the case against one of its traders whose unauthorised trades (loss $6 bn) were discovered in Jan ’08.
Prudential continues to pursue AIG’s Asian business; if it goes through, it would be the largest life insurer in HK, Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines.
M&S sales rose 3.2% to about $13 bn last year. Tiffany has reported rise in sales of $50K plus products; total revenue in quarter to 30 Apr was up 22%. Heinz sales last quarter were up 8% to $2.72 bn. Wal-Mart is buying 193 Netto stores in UK for $1.13 bn. Daimler expect sales in China to grow threefold from current 100,000 units by 2015. Tata Motors is planning to produce Jaguar and Land Rover in China.
Duchess of York (Fergie) was captured on camera demanding money for introducing somebody to Prince Andrew. British confectioner Hotel Chocolat is raising $7.2 mn by issuing chocolate bonds that offer holders interest in chocolates rather than cash. Research says 65 mn suffer high blood pressure in US and 38 mn of driving license holders are unfit for roads. US Space Posture Review says space has become so congested that satellites orbiting earth may begin experiencing collisions, bringing communications to a halt. A rebel Somali leader has hired 100 German mercenaries to train his forces.
Skirmishes between US and China on yuan are continuing, though US exports to China have already started growing. Euro it seems has to soften further. Tension in Korea has become palpable; US is firmly behind South while China is trying to soothe ruffled feathers. A political volcano just may be in the offing. Africa and LatAm should be in news in not too distant a future.
xxxxx
The dollar is the safe heaven yet again, notwithstanding China’s commitment to maintain its exposure to the euro. The big surprise last week was recovery of oil.
Higher taxes on high incomes is being seen as a way of placating people, though history says it doesn’t work. Money cannot be collected back for redistribution beyond a limit; its concentration has to be prevented, not cured.
The reality is that the developed world cannot export enough to cover what it needs to import. Except for an orderly move towards what they call recession, there is no way US-EU can reduce the pain of their people. Germany is pushing for a formal process for sovereigns’ bankruptcy in Europe and it is preparing to extend ban on naked short selling to all stocks. However, global consensus on leashing of financial magicians is still nowhere on the horizon. Lofty words spoken at the Capitol are leading to nowhere in particular, Obama is passive and confused as ever, and in Europe the Sarkozys and Berlusconis are too busy living their glamorous lives to the hilt.
Share of services in Hong Kong GDP has risen from 86.1% in 1999 to 92% in 2009; services exports were $85 bn last year. China holds US Treasuries worth $895 bn now, compared to Japan’s 785 bn. An economist says China stocks can rebound only if real estate crashes. Citi and BNP have forecast 20% drop in home prices this year.
Japan’s unemployment is refusing to decline and more job cuts are in the offing. Govt has waived high school tuition fees as a direct transfer of money to the people. India GDP grew 8.6% annualised in Q1-2010 while car sales rose 40%. Zambia is to raise $1 bn from sovereign bonds for rail and power projects. Zimbabwe inflation is down to minus 7.7% and GDP growth this year is estimated at 7%. Rwanda also expects to grow 7% this year. Africa just may be in for a mercurial makeover as cash-laden corporates and banks have no parking places left. Russia, which has become as sensitive to oil as OPEC countries, is pushing companies to invest in what it calls single-company towns.
BP continued to be the most talked about company in the world last week as oil kept gushing from its damaged well in Gulf of Mexico. Obama’s popularity has plunged as Americans are unhappy with his handling of the spill. Overall impact for BP is being estimated in tens of billions. Shell is buying East Resources (shale gas) of US for $4.7 bn; its plans to drill wells near Alaska are being put on hold because of environmental concerns.
Apple’s market cap has grown ten times in last ten years and last week it surged past Microsoft, to $222 bn; Apple says consumers in Australia and Japan waited 40 hrs in queues to buy iPad. Dell has launched Streak tablet computer that can double as a mobile to compete with iPad, Facebook has started offering more privacy options to users and Intel capacity utilization has risen to 80% from last year’s 50%. IBM is buying Sterling Commerce unit of AT&T for $1.4 bn cash to expand software and has announced plans to spend $20 bn on M&A over the next five years.
Foxconn, Taiwanese owned contract electronics manufacturer with 800,000 employees in mainland has decided to raise wages 20% after several suicides. J&J has recalled 40 non-prescription childrens products after its Pennsylvania factory was found ill-maintained. Lehman has sued JPMorgan for having seized collateral worth $8.6 bn days before 15 Sep 2008. Societe Generale is pursuing the case against one of its traders whose unauthorised trades (loss $6 bn) were discovered in Jan ’08.
Prudential continues to pursue AIG’s Asian business; if it goes through, it would be the largest life insurer in HK, Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines.
M&S sales rose 3.2% to about $13 bn last year. Tiffany has reported rise in sales of $50K plus products; total revenue in quarter to 30 Apr was up 22%. Heinz sales last quarter were up 8% to $2.72 bn. Wal-Mart is buying 193 Netto stores in UK for $1.13 bn. Daimler expect sales in China to grow threefold from current 100,000 units by 2015. Tata Motors is planning to produce Jaguar and Land Rover in China.
Duchess of York (Fergie) was captured on camera demanding money for introducing somebody to Prince Andrew. British confectioner Hotel Chocolat is raising $7.2 mn by issuing chocolate bonds that offer holders interest in chocolates rather than cash. Research says 65 mn suffer high blood pressure in US and 38 mn of driving license holders are unfit for roads. US Space Posture Review says space has become so congested that satellites orbiting earth may begin experiencing collisions, bringing communications to a halt. A rebel Somali leader has hired 100 German mercenaries to train his forces.
Skirmishes between US and China on yuan are continuing, though US exports to China have already started growing. Euro it seems has to soften further. Tension in Korea has become palpable; US is firmly behind South while China is trying to soothe ruffled feathers. A political volcano just may be in the offing. Africa and LatAm should be in news in not too distant a future.
xxxxx
Sunday, 23 May 2010
Angela Merkel hit hedges with a sledgehammer last week. Equities, euro and oil tumbled. Before anybody could uncork champagne, euro bounced back from 1.2144 to 1.2522, and oil failed to recover. Sarkozy’s shenanigans got lost and Austria called for Europe-wide curbs on speculation. The Lioness said markets will not be allowed to extort the state and the mighty markets meekly melted into submission. UK was isolated. Rendered irrelevant.
Europe is dead serious about a pan-European watchdog with powers to coax information out of hedge funds. Greece, Portugal, Spain and Ireland and even France are yet to shun profligacy for frugality. The euro will eventually have to price itself more competitively but that can happen more smoothly and quickly now as the Iron Lady won’t allow New York to tinker with costs and cash flows of factories in Germany. Perhaps Hu Jintao should tell Geithner to postpone his visit and invite Angela since like China, Germany too is more interested in producing real wealth, real goods and real services rather than securitizing other people’s money, houses and wealth for earning livelihood.
The Capitol actually did some serious work last week as it was the Dow, not the Dax, that was running for cover. Senate is now working on banning banks from trading in derivatives, circuit breakers for all US stocks, an independent watchdog to safeguard consumers and borrowers, higher taxes on the so-called investment partnerships and powers for the government to decide which agency will rate whom. Europe is very likely to go for a rating outfit of its own.
US demand for home loans has plunged again, unemployment among 20-24 is 17%, credit card usage are declining steadily and 43% of workers have less than $10K in savings. However, for US, Dow and Nasdaq are the only measures of economic health; employment, savings and consumption are too mundane. Sales of Saks are more relevant than Wal-Mart and Home Depot. Harvard and Stanford dwarf primary education. Consumption has to remain unchanged, if not decline, in coming years.
Chinese economy is maintaining course with stable exports and growing domestic consumption; credit card usage in Q1 jumped 75% to CNY2.15 tn or over $300 bn. Auto sales are above a million a month. Forex reserves are expected to grow $100 bn this year also. Macau is catching up with Las Vegas.
Taiwan’s exports to China are booming and tourist arrivals too are growing. South Korea wants a Citi or BofA of its own. Venezuela currency is now unofficially trading at less than half the official rate. Bt cotton has started creating problems for farmers in China and India. Germany has completed 4G spectrum auction. Pakistan has banned YouTube and Facebook. Is that fighting Taliban?
HP expects sales of $125 bn in 2010 as global IT spending is to grow 5%, Symantec is to buy rival VeriSign for $1.28 bn in cash, Novell (software) is up for sale and 20 are interested and Twitter is being asked by Pennsylvania state to identify two users who criticized the Attorney General. BlackBerry (RIM) has started facing exodus to iPhone in the banking industry; Stanchart has allowed its employees to opt for iPhone and more banks are expected to follow suit.
Lufthansa has got its first superjumbo and seats are sold for months; fuel per passenger is 17% lower. Airbus has delivered 28 superjumbos so far. British Airways has announced loss of nearly $800 mn for 2009-10. Ford and Mazda, currently working jointly with Chongqing, are planning independent JVs with the Chinese auto firm. GM says it would stop paying union employees in US to leave the company.
BP is being accused of understating the oil leak crisis; some say leakage rate is 70K and not 5K barrels a day. US wants it to bear full cost, which cannot be estimated as of now. Abbott is to buy generics unit of India’s Piramal Healthcare in a $3.72 bn deal which will make it the largest pharma firm in India.
Unilever has put Italian frozen food unit on the block while Pepsi has announced further investment plans of $2.5 bn in China, to set up 10-12 new plants, besides expanding the existing 27. Wal-Mart is moving to lift goods directly from vendors’ plants, the idea being to cut transportation costs; its stores in high unemployment areas are hurt. Overall big retailers all over the world seem to be in reasonably comfortable position.
BofA has sold its stake in Itau of Brazil for $4.4 bn. Dubai World has worked out a deal to restructure its $23.5 bn debt. Seven of top ten trades recommended by Goldman resulted in losses for its clients last quarter.
Billionaire Allen Ponzi Stanford appears to have been beaten severely while in jail. Hyperion and Toshiba are close to commercialising nuclear reactors no larger than a large refrigerator with capacities ranging from 5 to 25mw. Specially developed chocolates can help prevent wrinkles and slow aging, besides making skin radiant, says a Swiss chocolate maker. Every fifth American visits an emergency room once a year. Scientists in China are using chemicals extracted from cigarette butts to protect steel from rusting. Bill Gates has been told by his father that Microsoft should pay more in taxes. Scientists finally appear to have created synthetic life.
A textile mill buys 6-month forward cotton from US, hedges against a dip in price, buys 6-month forward dollar, hedges forex receivables for a year and covers furnace oil for two years. NY shorts euro. Frankfurt buyer says sorry no demand. Cancel my order. The surplus goes on streets of Beijing at half the price. Some mills close. Thousands of workers are sent home to their villages. NY gets its share in exports that were never shipped. Get it? No? Hire McKinsey. It will tell you to cover against euro plunging also but then euro will go up and the buyer will demand a discount. Confused? That’s the new normal for industry.
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Europe is dead serious about a pan-European watchdog with powers to coax information out of hedge funds. Greece, Portugal, Spain and Ireland and even France are yet to shun profligacy for frugality. The euro will eventually have to price itself more competitively but that can happen more smoothly and quickly now as the Iron Lady won’t allow New York to tinker with costs and cash flows of factories in Germany. Perhaps Hu Jintao should tell Geithner to postpone his visit and invite Angela since like China, Germany too is more interested in producing real wealth, real goods and real services rather than securitizing other people’s money, houses and wealth for earning livelihood.
The Capitol actually did some serious work last week as it was the Dow, not the Dax, that was running for cover. Senate is now working on banning banks from trading in derivatives, circuit breakers for all US stocks, an independent watchdog to safeguard consumers and borrowers, higher taxes on the so-called investment partnerships and powers for the government to decide which agency will rate whom. Europe is very likely to go for a rating outfit of its own.
US demand for home loans has plunged again, unemployment among 20-24 is 17%, credit card usage are declining steadily and 43% of workers have less than $10K in savings. However, for US, Dow and Nasdaq are the only measures of economic health; employment, savings and consumption are too mundane. Sales of Saks are more relevant than Wal-Mart and Home Depot. Harvard and Stanford dwarf primary education. Consumption has to remain unchanged, if not decline, in coming years.
Chinese economy is maintaining course with stable exports and growing domestic consumption; credit card usage in Q1 jumped 75% to CNY2.15 tn or over $300 bn. Auto sales are above a million a month. Forex reserves are expected to grow $100 bn this year also. Macau is catching up with Las Vegas.
Taiwan’s exports to China are booming and tourist arrivals too are growing. South Korea wants a Citi or BofA of its own. Venezuela currency is now unofficially trading at less than half the official rate. Bt cotton has started creating problems for farmers in China and India. Germany has completed 4G spectrum auction. Pakistan has banned YouTube and Facebook. Is that fighting Taliban?
HP expects sales of $125 bn in 2010 as global IT spending is to grow 5%, Symantec is to buy rival VeriSign for $1.28 bn in cash, Novell (software) is up for sale and 20 are interested and Twitter is being asked by Pennsylvania state to identify two users who criticized the Attorney General. BlackBerry (RIM) has started facing exodus to iPhone in the banking industry; Stanchart has allowed its employees to opt for iPhone and more banks are expected to follow suit.
Lufthansa has got its first superjumbo and seats are sold for months; fuel per passenger is 17% lower. Airbus has delivered 28 superjumbos so far. British Airways has announced loss of nearly $800 mn for 2009-10. Ford and Mazda, currently working jointly with Chongqing, are planning independent JVs with the Chinese auto firm. GM says it would stop paying union employees in US to leave the company.
BP is being accused of understating the oil leak crisis; some say leakage rate is 70K and not 5K barrels a day. US wants it to bear full cost, which cannot be estimated as of now. Abbott is to buy generics unit of India’s Piramal Healthcare in a $3.72 bn deal which will make it the largest pharma firm in India.
Unilever has put Italian frozen food unit on the block while Pepsi has announced further investment plans of $2.5 bn in China, to set up 10-12 new plants, besides expanding the existing 27. Wal-Mart is moving to lift goods directly from vendors’ plants, the idea being to cut transportation costs; its stores in high unemployment areas are hurt. Overall big retailers all over the world seem to be in reasonably comfortable position.
BofA has sold its stake in Itau of Brazil for $4.4 bn. Dubai World has worked out a deal to restructure its $23.5 bn debt. Seven of top ten trades recommended by Goldman resulted in losses for its clients last quarter.
Billionaire Allen Ponzi Stanford appears to have been beaten severely while in jail. Hyperion and Toshiba are close to commercialising nuclear reactors no larger than a large refrigerator with capacities ranging from 5 to 25mw. Specially developed chocolates can help prevent wrinkles and slow aging, besides making skin radiant, says a Swiss chocolate maker. Every fifth American visits an emergency room once a year. Scientists in China are using chemicals extracted from cigarette butts to protect steel from rusting. Bill Gates has been told by his father that Microsoft should pay more in taxes. Scientists finally appear to have created synthetic life.
A textile mill buys 6-month forward cotton from US, hedges against a dip in price, buys 6-month forward dollar, hedges forex receivables for a year and covers furnace oil for two years. NY shorts euro. Frankfurt buyer says sorry no demand. Cancel my order. The surplus goes on streets of Beijing at half the price. Some mills close. Thousands of workers are sent home to their villages. NY gets its share in exports that were never shipped. Get it? No? Hire McKinsey. It will tell you to cover against euro plunging also but then euro will go up and the buyer will demand a discount. Confused? That’s the new normal for industry.
xxxxx
Sunday, 16 May 2010
“We aren’t Greece,” Krugman screamed, tweeted and blogged last week.
“You aren’t Greece but you will be if you don’t move fast enough and when you do become Greece, you will make the whole world Greece,” a tweet back to him.
The trillion dollar European plan for saving the euro failed to “shock and awe” and the trio of Greece, Spain and Portugal saw euro plunging to 1.22 while oil hurtled towards $70 at an unbelievable speed last week. What the scene will be if dollar attained parity with euro and oil touched 50? A euro buys in Europe less than what a dollar buys in the US and perhaps euro-dollar parity would turn out to be nirvana for eurozone like it did in the aftermath of the dotcom bust. Impact on Asia may not be as intense as is expected since domestic consumption is growing.
The volcano in Iceland erupted yet again, bringing aviation in Europe to a near standstill yet again. May be it would stop only when rich boys UK and Denmark stop bullying the tiny nation for recovering a debt the people of Iceland do not owe.
The consumer in the developed world has to cut consumption. Should oil plunge to 50 or below, all economic data and GDP figures will go haywire, making data dressing a difficult task. Economics of solar and wind energy would change dramatically and the developed world would find it even more difficult to compete with Asian manufacturers.
The trillion dollar plunge in NYSE market cap on May 6 rattled Washington last week, leading to Washington summoning St operators to unravel the mystery that some attributed to extraterrestrials and N Korea too. Paranoia made way for some pragmatism by week end and the US moved closer to comprehending the meaning of unfettered financial innovation. Senate voted to leash the credit card industry and prosecutors probing big boys of the St (Goldman, Morgan Stanley, Citi, Deutsche, JPMorgan, Merrill Lynch, UBS, Credit Agricole and Credit Suisse) accelerated investigations.
However, as on date, the St is busy with swaps, CDOs and leveraged loans as if Lehman happened in 1929, not 2008. Nevertheless, the strain of managing the world’s largest economy has started showing on Obama and Geithner, both of whom have aged a decade in less than two years.
As the tech sector moves to make the consumer move from laptops to smaller devices, wars in smartphones market have started becoming smarter. Google says its Android software had displaced iPhone as the second largest smartphone software, prompting Apple to contest the claim. HTC, Apple and Nokia are engaged in patent wars, each accusing the other two of infringement. Looks like it is Apple’s profitability, not volumes, that has made rivals sit up; Nokia has changed management twice in seven months as its revenue dipped 19% last year and profit plunged 76%.
Meanwhile, Wal-Mart seems to be in for further growth in sales of mobile-phone services as consumer appetite for pre-paid (contract-free) SIM cards is growing. P&G is realizing the awesome power online communities have vested in the consumer as moms across US have ganged up against Dry Max diapers.
Mobile and cloud computing are the hot areas with Microsoft claiming 500 mn users and Google 25 mn. SAP has bought accounting software firm Sybase for $5.8 bn and one reason is it wants its solutions to be accessible from mobile devices. Microsoft has updated its Office software yet again but whether it has made some sensible change this time would be clear only by 2011. Global online adspend is now over 15% of total.
In last ten years 227 companies fell off the Global Fortune 500 list. Farmers in China bought over 20 mn household appliances in Jan-Apr as subsidies continue to be doled out in rural areas. The new British PM called the change of guard a historic and seismic shift but few expect any radical change in policies.
China is tripling subway rail system under a $146 bn plan. Malaysia has raised interest rates for the second time this year. After US, debate on healthcare has started intensifying in Germany. In 12 months to 31 March 2010 US saw 1.53 mn bankruptcy filings and the country is losing $60 bn in taxes because of transfer pricing by its MNCs.
The worst seems to be over for Toyota as its sales in US have recovered despite recall of 8 mn vehicles. In year to March 2010 its sales fell less than 100,000 units in US. Volkswagen says it will have to pay money to get rid of its Spanish unit Seat that had operating losses of 340 mn euros last year; its Bentley unit is also losing money. SABMiller has patented an easy-to-open beer can that converts into a drinking cup when the top has been removed.
Michelle Obama wants to eradicate the 15% childhood obesity in one generation and hubby is backing her. Research says British bureaucrats working 10-11 hours suffer more heart problems than those putting in only 7 hrs and 55% of Russians believe bribes have to be paid for most public services; Russia is ranked 146th on the corruption perception index. The private prisons industry in US has probably crossed the billion dollar mark as it continues to have 0.756% of population in jails and private prisons offer lower escape and mortality rates.
Driving schools in Japan are offering lessons in driving BMWs with massage and manicures thrown in. Chinese households are offering foreign visitors free stay in exchange for lessons in English. Whistleblowers in US received $2.39 bn in awards between 1987 and 2009 for providing information on companies making false claims for their products, the latest being a $45 mn award shared by two who said AstraZeneca was marketing a schizophrenia drug by making false claims. Abu Dhabi now has a vending machine selling gold and Google says its cars photographing streets around the world have inadvertently collected personal data of individuals tapping open WiFi networks.
xxxxx
“You aren’t Greece but you will be if you don’t move fast enough and when you do become Greece, you will make the whole world Greece,” a tweet back to him.
The trillion dollar European plan for saving the euro failed to “shock and awe” and the trio of Greece, Spain and Portugal saw euro plunging to 1.22 while oil hurtled towards $70 at an unbelievable speed last week. What the scene will be if dollar attained parity with euro and oil touched 50? A euro buys in Europe less than what a dollar buys in the US and perhaps euro-dollar parity would turn out to be nirvana for eurozone like it did in the aftermath of the dotcom bust. Impact on Asia may not be as intense as is expected since domestic consumption is growing.
The volcano in Iceland erupted yet again, bringing aviation in Europe to a near standstill yet again. May be it would stop only when rich boys UK and Denmark stop bullying the tiny nation for recovering a debt the people of Iceland do not owe.
The consumer in the developed world has to cut consumption. Should oil plunge to 50 or below, all economic data and GDP figures will go haywire, making data dressing a difficult task. Economics of solar and wind energy would change dramatically and the developed world would find it even more difficult to compete with Asian manufacturers.
The trillion dollar plunge in NYSE market cap on May 6 rattled Washington last week, leading to Washington summoning St operators to unravel the mystery that some attributed to extraterrestrials and N Korea too. Paranoia made way for some pragmatism by week end and the US moved closer to comprehending the meaning of unfettered financial innovation. Senate voted to leash the credit card industry and prosecutors probing big boys of the St (Goldman, Morgan Stanley, Citi, Deutsche, JPMorgan, Merrill Lynch, UBS, Credit Agricole and Credit Suisse) accelerated investigations.
However, as on date, the St is busy with swaps, CDOs and leveraged loans as if Lehman happened in 1929, not 2008. Nevertheless, the strain of managing the world’s largest economy has started showing on Obama and Geithner, both of whom have aged a decade in less than two years.
As the tech sector moves to make the consumer move from laptops to smaller devices, wars in smartphones market have started becoming smarter. Google says its Android software had displaced iPhone as the second largest smartphone software, prompting Apple to contest the claim. HTC, Apple and Nokia are engaged in patent wars, each accusing the other two of infringement. Looks like it is Apple’s profitability, not volumes, that has made rivals sit up; Nokia has changed management twice in seven months as its revenue dipped 19% last year and profit plunged 76%.
Meanwhile, Wal-Mart seems to be in for further growth in sales of mobile-phone services as consumer appetite for pre-paid (contract-free) SIM cards is growing. P&G is realizing the awesome power online communities have vested in the consumer as moms across US have ganged up against Dry Max diapers.
Mobile and cloud computing are the hot areas with Microsoft claiming 500 mn users and Google 25 mn. SAP has bought accounting software firm Sybase for $5.8 bn and one reason is it wants its solutions to be accessible from mobile devices. Microsoft has updated its Office software yet again but whether it has made some sensible change this time would be clear only by 2011. Global online adspend is now over 15% of total.
In last ten years 227 companies fell off the Global Fortune 500 list. Farmers in China bought over 20 mn household appliances in Jan-Apr as subsidies continue to be doled out in rural areas. The new British PM called the change of guard a historic and seismic shift but few expect any radical change in policies.
China is tripling subway rail system under a $146 bn plan. Malaysia has raised interest rates for the second time this year. After US, debate on healthcare has started intensifying in Germany. In 12 months to 31 March 2010 US saw 1.53 mn bankruptcy filings and the country is losing $60 bn in taxes because of transfer pricing by its MNCs.
The worst seems to be over for Toyota as its sales in US have recovered despite recall of 8 mn vehicles. In year to March 2010 its sales fell less than 100,000 units in US. Volkswagen says it will have to pay money to get rid of its Spanish unit Seat that had operating losses of 340 mn euros last year; its Bentley unit is also losing money. SABMiller has patented an easy-to-open beer can that converts into a drinking cup when the top has been removed.
Michelle Obama wants to eradicate the 15% childhood obesity in one generation and hubby is backing her. Research says British bureaucrats working 10-11 hours suffer more heart problems than those putting in only 7 hrs and 55% of Russians believe bribes have to be paid for most public services; Russia is ranked 146th on the corruption perception index. The private prisons industry in US has probably crossed the billion dollar mark as it continues to have 0.756% of population in jails and private prisons offer lower escape and mortality rates.
Driving schools in Japan are offering lessons in driving BMWs with massage and manicures thrown in. Chinese households are offering foreign visitors free stay in exchange for lessons in English. Whistleblowers in US received $2.39 bn in awards between 1987 and 2009 for providing information on companies making false claims for their products, the latest being a $45 mn award shared by two who said AstraZeneca was marketing a schizophrenia drug by making false claims. Abu Dhabi now has a vending machine selling gold and Google says its cars photographing streets around the world have inadvertently collected personal data of individuals tapping open WiFi networks.
xxxxx
Sunday, 9 May 2010
In a rather eventful week, euro tumbled and recovered partially, oil dived and didn’t come back, and Dow plunged a thousand points Thursday like it was Mumbai or Shanghai. The Greenback flexed its muscles, asserting it was still the Almighty.
“We want an end to the freefall of our living standards,” said a Greek union leader, while Angela Merkel insisted that “in the long run, you can’t live beyond your means.” Living within means implies adjusting living standards but the 11 mn Greeks are livid largely because they have been, like much of the developed world, on a high since 2003. The world needs to fear spread of not financial crises but discontent among people in countries with ageing populations where thrift continues to be discouraged actively by governments and available reserves of real wealth are still being swallowed by the slick and the smart.
Living standards in not only Europe but the entire developed world have to fall. Definition of normal is changing. Every eighth American is receiving food stamps, households net wealth declined by $17 tn between 2007 and 2009, and the people are no more in a position to keep paying $100 bn in credit card interest charges and penalties. Only 576 mn credit cards are now in circulation, against 708 mn in 2007. 68 banks have already closed shop in 2010. Unemployment is no more a stigma for most individuals.
Germany and France are frantically looking for ways of stabilizing euro and Europe as Spain and Portugal continue to be on weak wickets, UK is figuring out what the people want, and Italy says it is safe and sound. Some in the east like Hungary are jittery while Russia is minting money from oil. Greenland’s 56,000 citizens are looking forward to a prosperous future as oil majors are rushing in with huge investments.
Hong Kong retail sales are almost back to pre-Lehman levels, Korea South is being deluged by dollars while North’s Kim has finally seen inevitability of dependence on China. Japan’s ratings are being reviewed, Australia is ecstatic on the back of high commodity prices, and Brazil’s financial standing is growing while Costa Rica is undecided on controls on capital inflows.
Relief should come from oil softening. Crude 2018 is above 100 but Russia and Mexico continue to sell below market. Instability is going to cause pain to Asia too but Asia is willing to leash capital flows when necessary and composition of world consumption will likely change in favour of manufactures.
Looks like inevitability of adequate regulation of the finance industry is beginning to dawn upon policy-makers. US and EU are likely to tighten supervision significantly and restraints on capital flows are expected from many countries. Switzerland, with a much bigger TBTF problem than US, is pushing UBS and Credit Suisse to be more conservative. However, the developing world (plus Japan) seems to be determined to pass through the path US and EU have traversed.
BP was the most talked about company last week as it faced an estimated $14 bn of cleaning costs and its shares plunged. After takeover of Continental, United will be the world’s biggest airline with revenue of $29 bn while Cathay grapples to hedge or not to hedge oil. Starbucks has been sued for serving excessively hot tea, Nestle CEO says corporate philanthropy often misuses shareholders money, and US hospital chain HCA, bought for $33 bn by KKR and Bain, is issuing equity to cut debt. Swire of Hong Kong and Chian Tian Yuan Mining have postponed their IPOs. Newcrest of Australia is buying rival gold miner Lihir for $8.5 bn as it wants more overseas earnings. Nike expects revenue to grow from 20 to 27 bn by 2015; China now accounts for 10%.
Apple and Google are fiercely buying any available promising small and mid-sized tech firms, Nokia and Microsoft have launched software for running Office on cellphones, and FCC has ruled that Internet service providers cannot block others content.
Goldman Sachs, currently settling fraud charges with SEC, has found an ally in Warren Buffett who says Abacus was fine and normal. UBS is going all out to tap wealth management in Asia, Citi’s credit cards exposure expanded $80 bn last year, and American Express, with average card spending of $8,665 in 2009 (against 3,073 for Visa+Master), was the top performer among Dow components in 2009; Visa and Master aren’t affected by defaults since they do not issue any cards directly.
Prudential’s largest shareholder Capital Group is gunning for its CEO; acquisition of AIG’s Asian unit is getting delayed for want of regulatory clearances. AIG says it has started earning real money. Well, congratulations.
Moody’s, S&P and Fitch are beginning to face real heat now; over 90% of triple-As issued to subprimes in 2006 and 2007 have been downgraded to junk. Now S&P will rate debt of 23,000 unrated firms, hoping to eventually make them pay.
US nuclear warheads stockpile has plunged from 22,217 in 1989 to 5,113, says the Pentagon, rupture of a water main has forced Boston residents to boil all drinking water, and TIGER21, an exclusive club of those with $10 mn or more in investable assets (each member pays $30K a year) is looking for upright investment advisors.
US has about 100K centenarians and a survey says 8% are already texting, 12% have iPods and a majority wants to date Betty White. Another research says toddlers who watch too much TV eventually eat more snacks and score less in maths. US govt is trying to make physical exercise in school compulsory. US FDA is 15 years late in saying Tylenol doesn’t help much.
A fair in Italy aims to help divorcees start happy new lives; annual number of divorces is about half of marriages. Pakistanis, avoided by US employers since 9/11, have now started calling themselves Indians. Pollution in London is seven times that in Frankfurt; is there a positive correlation between pollution and financial innovation?
xxxxx
“We want an end to the freefall of our living standards,” said a Greek union leader, while Angela Merkel insisted that “in the long run, you can’t live beyond your means.” Living within means implies adjusting living standards but the 11 mn Greeks are livid largely because they have been, like much of the developed world, on a high since 2003. The world needs to fear spread of not financial crises but discontent among people in countries with ageing populations where thrift continues to be discouraged actively by governments and available reserves of real wealth are still being swallowed by the slick and the smart.
Living standards in not only Europe but the entire developed world have to fall. Definition of normal is changing. Every eighth American is receiving food stamps, households net wealth declined by $17 tn between 2007 and 2009, and the people are no more in a position to keep paying $100 bn in credit card interest charges and penalties. Only 576 mn credit cards are now in circulation, against 708 mn in 2007. 68 banks have already closed shop in 2010. Unemployment is no more a stigma for most individuals.
Germany and France are frantically looking for ways of stabilizing euro and Europe as Spain and Portugal continue to be on weak wickets, UK is figuring out what the people want, and Italy says it is safe and sound. Some in the east like Hungary are jittery while Russia is minting money from oil. Greenland’s 56,000 citizens are looking forward to a prosperous future as oil majors are rushing in with huge investments.
Hong Kong retail sales are almost back to pre-Lehman levels, Korea South is being deluged by dollars while North’s Kim has finally seen inevitability of dependence on China. Japan’s ratings are being reviewed, Australia is ecstatic on the back of high commodity prices, and Brazil’s financial standing is growing while Costa Rica is undecided on controls on capital inflows.
Relief should come from oil softening. Crude 2018 is above 100 but Russia and Mexico continue to sell below market. Instability is going to cause pain to Asia too but Asia is willing to leash capital flows when necessary and composition of world consumption will likely change in favour of manufactures.
Looks like inevitability of adequate regulation of the finance industry is beginning to dawn upon policy-makers. US and EU are likely to tighten supervision significantly and restraints on capital flows are expected from many countries. Switzerland, with a much bigger TBTF problem than US, is pushing UBS and Credit Suisse to be more conservative. However, the developing world (plus Japan) seems to be determined to pass through the path US and EU have traversed.
BP was the most talked about company last week as it faced an estimated $14 bn of cleaning costs and its shares plunged. After takeover of Continental, United will be the world’s biggest airline with revenue of $29 bn while Cathay grapples to hedge or not to hedge oil. Starbucks has been sued for serving excessively hot tea, Nestle CEO says corporate philanthropy often misuses shareholders money, and US hospital chain HCA, bought for $33 bn by KKR and Bain, is issuing equity to cut debt. Swire of Hong Kong and Chian Tian Yuan Mining have postponed their IPOs. Newcrest of Australia is buying rival gold miner Lihir for $8.5 bn as it wants more overseas earnings. Nike expects revenue to grow from 20 to 27 bn by 2015; China now accounts for 10%.
Apple and Google are fiercely buying any available promising small and mid-sized tech firms, Nokia and Microsoft have launched software for running Office on cellphones, and FCC has ruled that Internet service providers cannot block others content.
Goldman Sachs, currently settling fraud charges with SEC, has found an ally in Warren Buffett who says Abacus was fine and normal. UBS is going all out to tap wealth management in Asia, Citi’s credit cards exposure expanded $80 bn last year, and American Express, with average card spending of $8,665 in 2009 (against 3,073 for Visa+Master), was the top performer among Dow components in 2009; Visa and Master aren’t affected by defaults since they do not issue any cards directly.
Prudential’s largest shareholder Capital Group is gunning for its CEO; acquisition of AIG’s Asian unit is getting delayed for want of regulatory clearances. AIG says it has started earning real money. Well, congratulations.
Moody’s, S&P and Fitch are beginning to face real heat now; over 90% of triple-As issued to subprimes in 2006 and 2007 have been downgraded to junk. Now S&P will rate debt of 23,000 unrated firms, hoping to eventually make them pay.
US nuclear warheads stockpile has plunged from 22,217 in 1989 to 5,113, says the Pentagon, rupture of a water main has forced Boston residents to boil all drinking water, and TIGER21, an exclusive club of those with $10 mn or more in investable assets (each member pays $30K a year) is looking for upright investment advisors.
US has about 100K centenarians and a survey says 8% are already texting, 12% have iPods and a majority wants to date Betty White. Another research says toddlers who watch too much TV eventually eat more snacks and score less in maths. US govt is trying to make physical exercise in school compulsory. US FDA is 15 years late in saying Tylenol doesn’t help much.
A fair in Italy aims to help divorcees start happy new lives; annual number of divorces is about half of marriages. Pakistanis, avoided by US employers since 9/11, have now started calling themselves Indians. Pollution in London is seven times that in Frankfurt; is there a positive correlation between pollution and financial innovation?
xxxxx
Nobody knows what’s happening and what is likely to happen and how the global economic landscape is going to change. Fitch cutting Greece’s sovereign rating and ratings of its five top banks (assets $470 bn) had only a marginal impact on the euro, though the Greek DyPM did try to pull in Spain and Portugal, saying they could be the next victims. Somebody said the Greeks aren’t as serious as the Germans; perhaps nobody is as serious as the Germans and the Chinese.
Partnerships break in times of extreme success or failure and that is the euro zone’s problem. Germany, Finland, the Netherlands and France are competitive while Greece, Italy, Portugal and Spain have easier outlooks towards life. However, all have benefited from the stable exchange rate euro has provided for trade within the zone; the euro is too big and strong to be killed by financial pirates ruling the world.
Low income never fails to teach thrift. Sooner or later, all will learn.
With net national savings at –2.5%, the US economy remains a mystery. While Obama and Geithner keep touting their success, distress is written all over faces of ordinary Americans. Unemployment doles are becoming unsustainable and even NY, which receives more visitors than any other city in the world, has a budget deficit. The federal govt is finally coming around to accepting VAT. The Fed is willing to maintain ultra-low interest rates as long as necessary; keep robbing millions of Pauls to keep playing the music that keeps Peters on the St swinging.
Speculation on China is growing, with asset bubble being the pet theory and the likely trade deficit in March providing a fillip, though few deny the solid foundation. Rural demand for durables and automobiles continues to boom on the back of subsidies, population of vehicles is still below 200 mn, which is less than a fifth of US on per capita basis, and there is the 3 tn reserve (don’t forget Hong Kong and Macau). What is relevant is China’s ability to continue to work hard and use money judiciously; issues of yuan appreciation and interest rates rising are largely irrelevant. Yuan trading against rouble, won and ringgit is being considered. Imagine what can happen if China fixes values of JPY and euro for the purposes of its own trade deals.
Anheuser-Busch InBev, Volkswagen, Novartis, Apple, Bridgestone, Google and Noble Group (Hong Kong) are the seven major global companies that managed to grow through the turbulent 2009, says SERI (Samsung).
Sony, Intel and Google are working together to develop TVs that would have built-in systems for surfing the web. NewsCorp continues to search for ways of preventing search engines from displaying full articles of its publications.
Daimler may join the Renault-Nissan alliance to share cost of developing new models. Hitachi says it has developed technology that doubles the life of lithium-ion batteries to over ten years. Japan Airlines is to cut workforce by nearly 10K, including 775 pilots and 2,460 flight attendants and British Airways is taking over Iberia (Spain) for $8 bn, expect synergy being over $500 mn a year.
Campbell is finding out that in recessionary times people shun soups and make do with the rest of the meal. Starbucks is finding the going tough in Australia and is preparing to once again go high end at home, with wine, beer and pastries served behind heavy curtains.
BASF is expected to bid for Cognis, maker of ingredients for shampoos and lotions and Pfizer says its Lipitor patent might expire but more products are in the pipeline for Alzheimer’s disease and cancer.
Blackstone owned Hilton hotel chain has cut its debt by $4 bn but still owes $16 bn. Lindahls of Sweden bought the image of a non-descript face from an agency for use in its ads, without bothering to take consent of the man in the picture; now the man is demanding what a celebrity would have demanded – about $7 mn.
Cosco (Shenzhen Energy) continues to have accidents, the latest being a coal ship leaking oil in an environmentally sensitive area in Australia, OAO Novolipetsk, Russian steel producer, is planning to expand capacity 40% to 17 mn tons at a cost of $4 bn, and AgBank of China is working on what may be the biggest ever IPO; at least 20 global banks are in line for a share in the pie.
France Telecom, having near $10 bn in usable cash, is preparing to go on an acquisition spree, particularly in Africa. Total is the latest to be investigated, among 2000 companies which are believed to have paid slush money to Saddam govt for buying cheaper oil.
What people are saying on Twitter is being analysed by techies; some at HP have developed a methodology to predict success or otherwise of movies on the basis of monitored tweets. Germans are taking to car sharing and staying single through out life in growing numbers. US needs more counsellors because about one half of marriages are ending in divorce and one analyst says superstars often have a demotivating impact on colleagues.
Ikea workers are striking because management has set limits on time spent in toilets; Carlsberg employees are livid because company doesn’t let them drink beer while on job, outside lunch hours. US army is telling soldiers in Afghanistan to do without burgers and pizzas as they are not on a picnic. A Republican was caught entertaining potential contributors at a sex-themed nightclub and sending love notes in text from cell phones is now known as chexting. One researcher has found out that the City is in trouble because only two percent of directors are female.
BoJ Governor Shirakawa says as long as US and China hold, Japan will hold. If you can see the dichotomy and aren’t tired enough of carrying your laptop to buy an iPad, you can manage your money and life reasonably well.
xxxxx
Partnerships break in times of extreme success or failure and that is the euro zone’s problem. Germany, Finland, the Netherlands and France are competitive while Greece, Italy, Portugal and Spain have easier outlooks towards life. However, all have benefited from the stable exchange rate euro has provided for trade within the zone; the euro is too big and strong to be killed by financial pirates ruling the world.
Low income never fails to teach thrift. Sooner or later, all will learn.
With net national savings at –2.5%, the US economy remains a mystery. While Obama and Geithner keep touting their success, distress is written all over faces of ordinary Americans. Unemployment doles are becoming unsustainable and even NY, which receives more visitors than any other city in the world, has a budget deficit. The federal govt is finally coming around to accepting VAT. The Fed is willing to maintain ultra-low interest rates as long as necessary; keep robbing millions of Pauls to keep playing the music that keeps Peters on the St swinging.
Speculation on China is growing, with asset bubble being the pet theory and the likely trade deficit in March providing a fillip, though few deny the solid foundation. Rural demand for durables and automobiles continues to boom on the back of subsidies, population of vehicles is still below 200 mn, which is less than a fifth of US on per capita basis, and there is the 3 tn reserve (don’t forget Hong Kong and Macau). What is relevant is China’s ability to continue to work hard and use money judiciously; issues of yuan appreciation and interest rates rising are largely irrelevant. Yuan trading against rouble, won and ringgit is being considered. Imagine what can happen if China fixes values of JPY and euro for the purposes of its own trade deals.
Anheuser-Busch InBev, Volkswagen, Novartis, Apple, Bridgestone, Google and Noble Group (Hong Kong) are the seven major global companies that managed to grow through the turbulent 2009, says SERI (Samsung).
Sony, Intel and Google are working together to develop TVs that would have built-in systems for surfing the web. NewsCorp continues to search for ways of preventing search engines from displaying full articles of its publications.
Daimler may join the Renault-Nissan alliance to share cost of developing new models. Hitachi says it has developed technology that doubles the life of lithium-ion batteries to over ten years. Japan Airlines is to cut workforce by nearly 10K, including 775 pilots and 2,460 flight attendants and British Airways is taking over Iberia (Spain) for $8 bn, expect synergy being over $500 mn a year.
Campbell is finding out that in recessionary times people shun soups and make do with the rest of the meal. Starbucks is finding the going tough in Australia and is preparing to once again go high end at home, with wine, beer and pastries served behind heavy curtains.
BASF is expected to bid for Cognis, maker of ingredients for shampoos and lotions and Pfizer says its Lipitor patent might expire but more products are in the pipeline for Alzheimer’s disease and cancer.
Blackstone owned Hilton hotel chain has cut its debt by $4 bn but still owes $16 bn. Lindahls of Sweden bought the image of a non-descript face from an agency for use in its ads, without bothering to take consent of the man in the picture; now the man is demanding what a celebrity would have demanded – about $7 mn.
Cosco (Shenzhen Energy) continues to have accidents, the latest being a coal ship leaking oil in an environmentally sensitive area in Australia, OAO Novolipetsk, Russian steel producer, is planning to expand capacity 40% to 17 mn tons at a cost of $4 bn, and AgBank of China is working on what may be the biggest ever IPO; at least 20 global banks are in line for a share in the pie.
France Telecom, having near $10 bn in usable cash, is preparing to go on an acquisition spree, particularly in Africa. Total is the latest to be investigated, among 2000 companies which are believed to have paid slush money to Saddam govt for buying cheaper oil.
What people are saying on Twitter is being analysed by techies; some at HP have developed a methodology to predict success or otherwise of movies on the basis of monitored tweets. Germans are taking to car sharing and staying single through out life in growing numbers. US needs more counsellors because about one half of marriages are ending in divorce and one analyst says superstars often have a demotivating impact on colleagues.
Ikea workers are striking because management has set limits on time spent in toilets; Carlsberg employees are livid because company doesn’t let them drink beer while on job, outside lunch hours. US army is telling soldiers in Afghanistan to do without burgers and pizzas as they are not on a picnic. A Republican was caught entertaining potential contributors at a sex-themed nightclub and sending love notes in text from cell phones is now known as chexting. One researcher has found out that the City is in trouble because only two percent of directors are female.
BoJ Governor Shirakawa says as long as US and China hold, Japan will hold. If you can see the dichotomy and aren’t tired enough of carrying your laptop to buy an iPad, you can manage your money and life reasonably well.
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The entire world seemed to be itching for a second global crisis last week as financial pundits said now that the US is on stronger terra firma, euro and Europe must go bust. Greece may sail through but there are Spain, Portugal, Ireland and Italy to contend with. The problem is that while consumers on both sides of the Atlantic are painfully trying to balance income and expenditure by cutting spending on such essentials as food, clothing and shelter, governments insist that champagne must keep flowing.
Fears of the euro collapsing may be exaggerated but popular sentiment in major EU countries like Germany seems to be in favor of putting Europe’s integration on the backburner. A German professor has even threatened to sue the govt if it decides to bail out Greece! Considering Germany’s foreign minister has publicly opposed the growing use of English, The question is whether it is only EU or the eurozone that is heading for disintegration, or is the process of globalization itself in jeopardy.
The scene is confusing. Goldman Sachs is being accused of having helped Greece hide the magnitude of its deficits. Citi says 24 eurozone banks (two third of the industry) will need to raise nearly a trillion dollars over the next three years. Analysts (and Greece) say a weaker euro is actually helping Germany boost its exports. WSJ says Spain, with 19% unemployment and an economy far bigger than Greece, will be the real problem.
Per WTO, world trade contracted by about 12% in 2009, though part of it must have been due to lower oil prices.
RBS has reported losses of $5.5 bn for 2009 while Lloyds, with a loans to deposit ratio of 169%, suffered bad loans of $37 bn last year. Some reports of some financial turbulence in Turkey came in last week.
Freddie Mac and Fannie Mae lost $26 bn and 60 bn, respectively, last year, and say a large wave of foreclosures is yet to come. One report says US sales of alcohol rose last year because of high unemployment but industry revenue remained flat because people bought cheaper drinks. Japan’s public debt is expected to rise to over 225% of GDP in 2010.
Asia is apparently fine, and determined to achieve what US-EU achieved last decade – greater financial innovation, lower savings and higher consumer spending. China’s household deposits, however, rose 19.3% to $3.9 tn last year also. Australia and China have resumed their free trade talks, perhaps because Australia has finally recognized that China is going to remain the biggest buyer of its natural resources.
US is considering auction of airwaves currently held by TV stations, to help overcome the spectrum crunch and meet demand for mobile Internet services.
Toyota chairman admitted before the US Congress that growth had taken priority over safety at his company. Three Japanese auto parts firms are being investigated by US anti-trust authorities.
Oil field services industry is getting consolidated in a big way; Schlumberger is to buy Smith International for $11.34 bn in stock while Baker Hughes is close to completing its $6 bn takeover of BJ Services.
Wal-Mart says it will expand organically, as well as through acquisitions in LatAm and may become more aggressive in China and India also, Macy’s same-store sales grew marginally last quarter, and Kmart former CEO has been fined $10 mn for misleading investors in 2002, when the company filed for bankruptcy. Coke is buying its bottler in North America for $15 bn to exploit synergy; Pepsi had done that last year.
Apple sold the 10 billionth song on iTunes last week. It says it will retain its growing cash hoard ($25 bn last year) and has banned pictures of bikini clad women on iPhones. China has made it compulsory for individuals to verify identities before setting up personal websites. India’s Bharti Airtel has arranged loans of $9 bn for buying African assets of Zain. While Google executives in Italy have been convicted for violation of privacy laws and probably face prison, its executives in China are being aggressively poached by MNCs like Microsoft and Chinese IT companies alike.
China’s Tengzhong has pulled out of race for Hummer unit and GM has started exploring alternate buyers, while BYD expects to match Toyota and GM in vehicle output in about 15 years.
Allianz has started investing aggressively in areas such as parking meters operators and wind energy, Blackstone has announced plans to invest $732 mn in Shanghai, GE is to sell its stake in Garanti Bank of Turkey, estimated to be worth $3.3 bn, and TCW (L.A. investment company) saw investors pulling out $25 bn after it fired its star bond fund manager.
Five top US airlines say they are open to consolidation by mergers and acquisitions, while Airbus is trying to salvage its A400M military plane project stalled because of disagreements among buyers. Lufthansa’s striking pilots were publicly offered jobs of chauffeurs by a car rental last week.
Bayer sales slipped last year to a little over $40 bn. MGM studio, bought for $5 bn by PE Partners in 2005 is up for sale again but offers haven’t exceeded $2 bn so far. Businesses owned by Berkshire of Warren Buffett shed 24,000 jobs in 2009.
US plans to fence its 2,000 miles border are coming to nought because of malfunctioning of radar sensors and other technical glitches. The US Air Force is, however, training more pilots for operating unmanned aircraft (drones) than fighter jets; drones in Afghanistan are operated from bases in the US.
Britain has apologized for having shipped 150,000 poor children abroad between 1920 and 1960 under its child migrant programme. Following Korean Air, All Nippon too has decided to have separate toilets for women passengers. A single rough diamond (507 carat) was sold for $35 mn last week.
You have attended classes for learning golf, music, language and dance. Now look for lessons in managing personal financial risk.
xxxxx
Fears of the euro collapsing may be exaggerated but popular sentiment in major EU countries like Germany seems to be in favor of putting Europe’s integration on the backburner. A German professor has even threatened to sue the govt if it decides to bail out Greece! Considering Germany’s foreign minister has publicly opposed the growing use of English, The question is whether it is only EU or the eurozone that is heading for disintegration, or is the process of globalization itself in jeopardy.
The scene is confusing. Goldman Sachs is being accused of having helped Greece hide the magnitude of its deficits. Citi says 24 eurozone banks (two third of the industry) will need to raise nearly a trillion dollars over the next three years. Analysts (and Greece) say a weaker euro is actually helping Germany boost its exports. WSJ says Spain, with 19% unemployment and an economy far bigger than Greece, will be the real problem.
Per WTO, world trade contracted by about 12% in 2009, though part of it must have been due to lower oil prices.
RBS has reported losses of $5.5 bn for 2009 while Lloyds, with a loans to deposit ratio of 169%, suffered bad loans of $37 bn last year. Some reports of some financial turbulence in Turkey came in last week.
Freddie Mac and Fannie Mae lost $26 bn and 60 bn, respectively, last year, and say a large wave of foreclosures is yet to come. One report says US sales of alcohol rose last year because of high unemployment but industry revenue remained flat because people bought cheaper drinks. Japan’s public debt is expected to rise to over 225% of GDP in 2010.
Asia is apparently fine, and determined to achieve what US-EU achieved last decade – greater financial innovation, lower savings and higher consumer spending. China’s household deposits, however, rose 19.3% to $3.9 tn last year also. Australia and China have resumed their free trade talks, perhaps because Australia has finally recognized that China is going to remain the biggest buyer of its natural resources.
US is considering auction of airwaves currently held by TV stations, to help overcome the spectrum crunch and meet demand for mobile Internet services.
Toyota chairman admitted before the US Congress that growth had taken priority over safety at his company. Three Japanese auto parts firms are being investigated by US anti-trust authorities.
Oil field services industry is getting consolidated in a big way; Schlumberger is to buy Smith International for $11.34 bn in stock while Baker Hughes is close to completing its $6 bn takeover of BJ Services.
Wal-Mart says it will expand organically, as well as through acquisitions in LatAm and may become more aggressive in China and India also, Macy’s same-store sales grew marginally last quarter, and Kmart former CEO has been fined $10 mn for misleading investors in 2002, when the company filed for bankruptcy. Coke is buying its bottler in North America for $15 bn to exploit synergy; Pepsi had done that last year.
Apple sold the 10 billionth song on iTunes last week. It says it will retain its growing cash hoard ($25 bn last year) and has banned pictures of bikini clad women on iPhones. China has made it compulsory for individuals to verify identities before setting up personal websites. India’s Bharti Airtel has arranged loans of $9 bn for buying African assets of Zain. While Google executives in Italy have been convicted for violation of privacy laws and probably face prison, its executives in China are being aggressively poached by MNCs like Microsoft and Chinese IT companies alike.
China’s Tengzhong has pulled out of race for Hummer unit and GM has started exploring alternate buyers, while BYD expects to match Toyota and GM in vehicle output in about 15 years.
Allianz has started investing aggressively in areas such as parking meters operators and wind energy, Blackstone has announced plans to invest $732 mn in Shanghai, GE is to sell its stake in Garanti Bank of Turkey, estimated to be worth $3.3 bn, and TCW (L.A. investment company) saw investors pulling out $25 bn after it fired its star bond fund manager.
Five top US airlines say they are open to consolidation by mergers and acquisitions, while Airbus is trying to salvage its A400M military plane project stalled because of disagreements among buyers. Lufthansa’s striking pilots were publicly offered jobs of chauffeurs by a car rental last week.
Bayer sales slipped last year to a little over $40 bn. MGM studio, bought for $5 bn by PE Partners in 2005 is up for sale again but offers haven’t exceeded $2 bn so far. Businesses owned by Berkshire of Warren Buffett shed 24,000 jobs in 2009.
US plans to fence its 2,000 miles border are coming to nought because of malfunctioning of radar sensors and other technical glitches. The US Air Force is, however, training more pilots for operating unmanned aircraft (drones) than fighter jets; drones in Afghanistan are operated from bases in the US.
Britain has apologized for having shipped 150,000 poor children abroad between 1920 and 1960 under its child migrant programme. Following Korean Air, All Nippon too has decided to have separate toilets for women passengers. A single rough diamond (507 carat) was sold for $35 mn last week.
You have attended classes for learning golf, music, language and dance. Now look for lessons in managing personal financial risk.
xxxxx
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