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 euro. Show all posts
Showing posts with label euro. Show all posts
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, 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
That the dollar is “too-big-to-fail,” notwithstanding flip-flops on part of China and Japan, and the massive show of strength by China on its 60th anniversary, is finally being realized globally. For a while, in recent weeks, it looked like the dollar was finally falling into an abyss but last week Russia said it would maintain holdings of treasuries, Japan said it would keep the yen down and a host of govts across the world said a strong dollar is essential for keeping the world economy afloat. And the dollar moved up.
Obama advisor Larry Summers called the situation “financial balance of terror” at the G20 meet. He should have called it “balance of financial terror,” for powerful forces are rendering savings for the future futile, forcing the consumer to spend earnings before they accrue.
Apparently things are calm and stable but sweeping long term changes can still be sensed, a typical example being the Euro’s share in global currency reserves rising nearly two percentage points in Q2 alone, mostly at the cost of the dollar.
Despite the spectacular come back of market valuations the world over, IMF believes major banks will have to write-off a further $1.5 tn by end 2010, though EU insists its biggest banks can survive through an even bigger crisis. Meanwhile, G20 has come out with one of the most amusing ideas ever - a global tax on financial institutions.
China has apparently started looking at growing economic disparities (luxury goods market now at $5 bn) and the need for enforcing judicious allocation of capital to different segments of its economy; five recent IPOs at Hong Kong are quoting well below their offer prices. The US, on the other hand, continues to be oblivious to the rising number of bank failures (now 98), growing unemployment, declining median household income, and rising rate of poverty (13.2%), sanguine in its belief that the dollar and the Wall St can solve any and all problems.
While the corporate world in Japan is trying hard to gauge the new govt’s economic thinking, Brazil (along with US) is trying to spur competition in the credit card industry. Somebody should ask Seven-Eleven, which has collected 1.66 mn signatures demanding lower charges by credit card issuers, how can one process an average transaction of $100 and provide a few weeks credit at the same time, for less than $2.
The Germans voted the incumbent govt back into power last week; the political plus point of the Euro is that the policy-makers are not in a position to be too adventurous and voters do not expect miracles from their govts. Voter turnout of about 70% was the lowest in post-war Germany.
While Toyota, worried about the strong yen and falling auto sales (US sales down 23% in Sep, after clunkers ended), has had to ask 3.8 mn customers to take floor mats out of their cars because the accelerator gets stuck when pressed hard, GM has more or less decided to kill the Saturn brand.
BNP Paribas is raising $6.3 bn from fresh stock to repay govt loans while Societe Generale has announced plans for 50 new outlets in China. American Express is reversing some pay cuts and BofA is hunting for a new CEO after incumbent Kenneth Lewis resigned abruptly last week.
Solvay is selling its drugs business to Abbott for nearly $7 bn in cash, Xerox is buying Affiliated Computers for $6.4 bn, Sina Corp (China’s largest Web portal) has decided to cooperate with Focus Media, instead of taking it over, and China Petroleum says its million ton ethylene JV with Kuwait in Guangdong will cost $7.8 bn. MTR of Hong Kong, which already operates the London Overground, hopes to begin operations in Melbourne and Stockholm shortly.
Starbucks is out to create a new brand of instant coffee, Via, in a move that analysts say will hurt its premium image. US department store chain Kohl is adding 37 new stores. Wal-Mart says its energy conservation drive is yielding financial gains and it intends to push suppliers to save energy and costs. Danone (France) has decided to quit its Chinese JV because it believes partner Wahaha is selling identical products, and rumours have it that Playboy may be up for sale.
India’s Bharti has called off its ill-conceived plans of merging with MTN of South Africa. Cisco is buying Tandberg of Norway to expand its video-conferencing business. Accenture profit is down 40% and Stanford is planning to sell $1 bn of ill-liquid assets because of liquidity constraints.
Last week an Algebra 1 student in U.S. managed to explain America’s problems in one sentence: “People seem to think it’s cool to be stupid.” That was when Bill and Melinda Gates visited the West Charlotte school to understand why their country has fallen behind in education. They probably didn’t know that one in five Americans texts while driving, and the govt has responded by banning its employees from texting while driving! Until the right hand is free while driving, Americans can never drive safely.
In far away Egypt, the govt is ruing the day it over-reacted to the swine-flu and ordered slaughter of 300,000 hogs as now there is nobody to hog the organic waste dumped on the streets. In Germany, a politician refused to recognize the reality that switching to English is inevitable now and reprimanded a reporter for asking a question in English. Whatever the language, or the level of education, the real problem looming large on the horizon, according to a Danish research report, is that if the current trends in life expectancy continue, one half of all newly borns in rich nations would live to be 100. What impact will it have on equities, currencies and commodities?
xxxxx
Obama advisor Larry Summers called the situation “financial balance of terror” at the G20 meet. He should have called it “balance of financial terror,” for powerful forces are rendering savings for the future futile, forcing the consumer to spend earnings before they accrue.
Apparently things are calm and stable but sweeping long term changes can still be sensed, a typical example being the Euro’s share in global currency reserves rising nearly two percentage points in Q2 alone, mostly at the cost of the dollar.
Despite the spectacular come back of market valuations the world over, IMF believes major banks will have to write-off a further $1.5 tn by end 2010, though EU insists its biggest banks can survive through an even bigger crisis. Meanwhile, G20 has come out with one of the most amusing ideas ever - a global tax on financial institutions.
China has apparently started looking at growing economic disparities (luxury goods market now at $5 bn) and the need for enforcing judicious allocation of capital to different segments of its economy; five recent IPOs at Hong Kong are quoting well below their offer prices. The US, on the other hand, continues to be oblivious to the rising number of bank failures (now 98), growing unemployment, declining median household income, and rising rate of poverty (13.2%), sanguine in its belief that the dollar and the Wall St can solve any and all problems.
While the corporate world in Japan is trying hard to gauge the new govt’s economic thinking, Brazil (along with US) is trying to spur competition in the credit card industry. Somebody should ask Seven-Eleven, which has collected 1.66 mn signatures demanding lower charges by credit card issuers, how can one process an average transaction of $100 and provide a few weeks credit at the same time, for less than $2.
The Germans voted the incumbent govt back into power last week; the political plus point of the Euro is that the policy-makers are not in a position to be too adventurous and voters do not expect miracles from their govts. Voter turnout of about 70% was the lowest in post-war Germany.
While Toyota, worried about the strong yen and falling auto sales (US sales down 23% in Sep, after clunkers ended), has had to ask 3.8 mn customers to take floor mats out of their cars because the accelerator gets stuck when pressed hard, GM has more or less decided to kill the Saturn brand.
BNP Paribas is raising $6.3 bn from fresh stock to repay govt loans while Societe Generale has announced plans for 50 new outlets in China. American Express is reversing some pay cuts and BofA is hunting for a new CEO after incumbent Kenneth Lewis resigned abruptly last week.
Solvay is selling its drugs business to Abbott for nearly $7 bn in cash, Xerox is buying Affiliated Computers for $6.4 bn, Sina Corp (China’s largest Web portal) has decided to cooperate with Focus Media, instead of taking it over, and China Petroleum says its million ton ethylene JV with Kuwait in Guangdong will cost $7.8 bn. MTR of Hong Kong, which already operates the London Overground, hopes to begin operations in Melbourne and Stockholm shortly.
Starbucks is out to create a new brand of instant coffee, Via, in a move that analysts say will hurt its premium image. US department store chain Kohl is adding 37 new stores. Wal-Mart says its energy conservation drive is yielding financial gains and it intends to push suppliers to save energy and costs. Danone (France) has decided to quit its Chinese JV because it believes partner Wahaha is selling identical products, and rumours have it that Playboy may be up for sale.
India’s Bharti has called off its ill-conceived plans of merging with MTN of South Africa. Cisco is buying Tandberg of Norway to expand its video-conferencing business. Accenture profit is down 40% and Stanford is planning to sell $1 bn of ill-liquid assets because of liquidity constraints.
Last week an Algebra 1 student in U.S. managed to explain America’s problems in one sentence: “People seem to think it’s cool to be stupid.” That was when Bill and Melinda Gates visited the West Charlotte school to understand why their country has fallen behind in education. They probably didn’t know that one in five Americans texts while driving, and the govt has responded by banning its employees from texting while driving! Until the right hand is free while driving, Americans can never drive safely.
In far away Egypt, the govt is ruing the day it over-reacted to the swine-flu and ordered slaughter of 300,000 hogs as now there is nobody to hog the organic waste dumped on the streets. In Germany, a politician refused to recognize the reality that switching to English is inevitable now and reprimanded a reporter for asking a question in English. Whatever the language, or the level of education, the real problem looming large on the horizon, according to a Danish research report, is that if the current trends in life expectancy continue, one half of all newly borns in rich nations would live to be 100. What impact will it have on equities, currencies and commodities?
xxxxx
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