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 gulf of mexico. Show all posts
Showing posts with label gulf of mexico. 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
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