“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.
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Showing posts with label krugman. Show all posts
Showing posts with label krugman. Show all posts
A Krugman or a Soros one doesn’t have to be, to understand that appreciation of the Chinese yuan can only push inflation in US and actually exacerbate Uncle Sam’s problems in several ways. To what extent the diatribe is political gimmickry will perhaps never be known, though one must grant that China’s share in US non-oil trade deficit did leap to uncomfortable levels last year.
Perhaps Obama is trying to convince the 15 mn plus unemployed that the root cause of their plight is the yuan, not the St. The problem is the trade gap, not trade gap with China, and solace lies in either producing more or consuming less, and the US (govt) seems interested in neither. US trade deficit nearly halved in 2009, from $700 bn in 2008, implying the consumer is indeed spending less, but govt insists retail sales remained unchanged.
US bank lending declined 7.4% in 2009 as ‘rated’ bonds kept scoring over loan requests that need laborious evaluation. Bank failures in 2010 are expected to exceed 2009 and yet the five big ones have derivatives exposure of nearly 300 trillion. Bankers are busy lobbying against the proposed consumer protection office that would prevent them from charging a penalty of $25 for overdrafts of $5; 800 bankers told legislators that a consumer watch dog is good for all products except banking services. After sugar, the US is now focused on cutting consumption of salt, whereas what it really needs to cut is gasoline and ATF. Until Harvard and Yale keep competing for earning better yields on their corpus investments, education standards cannot recover.
Greece receded to back pages of newspapers but differences between EU and US+UK on financial regulations are growing. Germany even wants to involve its spy agencies for tracking speculators targeting currencies.
Exports of Swiss watches (industry revenue $35 bn) fell 22% last year and Omega and Rolex are slugging it out in the market place; exports to US dived 38% last year. Australia is upbeat about the new gas fields being developed by the likes of Shell, which plans to have a vessel larger than an aircraft carrier to ferry LNG to Japan and China.
Gross revenue of the booming casino industry in Macao rose 10% to nearly $15 bn last year. Russia remains focused on expanding international trade despite forex reserves hovering close to $400 bn (on the back of high oil prices) and has started softening its stand on Iran, in the hope of entering WTO. Korea is looking closely at what it calls the MICE (Meetings, Incentives, Conventions and Exhibitions) industry. Undaunted by the quake, Chile has decided to go ahead with a $3.2 bn dam project to ease energy shortages, and Mexico’s earnings from drugs are growing but that has started impacting tourism.
The same fiber-optic networks are now carrying Internet, as well as TV. Verizon (mobile telephony) says set top boxes being imported by Cablevision violate its patent rights. What will happen when the wire that brings electricity to your house is able to carry TV and Internet signals also? theflyonthewall.com, a portal that provides equity research reports the moment they are ready, has been ordered by a court to delay pasting, in response to a lawsuit by Merrill Lynch, Barclays and Morgan Stanley. Somebody would start tweeting these reports. Meanwhile, analysts say mobile carriers can forget growth as most in the world already have phones.
PepsiCo is to buy back shares worth $15 bn. Wal-Mart has rolled back prices of 10,000 items, mostly food and consumables, sending other US grocers in a tizzy. It is also considering issuing yuan denominated bonds in Hong Kong. San Miguel of the Philippines is continuing to sell stakes in food, packaging and even liquor (excluding beer) businesses to fund acquisitions in energy and gas. In quarter to 28 Feb, revenue of Fedex and Nike was up 7% each.
Panasonic is boisterous at having acquired battery maker Sanyo Electric last December as most expect demand for batteries to keep rising, and Sony continues to earn hefty profits from sales of Michael Jackson albums. Porsche has started marketing a classy mobile phone that would be offered exclusively to Porsche owners. Be ready to recognize a Porsche owner by suit, tie, shoes and jewelry.
Wells Fargo owned Wachovia Bank has agreed to pay $160 mn to settle allegations it helped Mexican drug lords launder money; it admitted failure to monitor transactions worth $420 bn. E&Y seems to be in a cleft stick because of having taken a benign attitude towards Lehman (before failure) and some believe it may go the Arthur Anderson way.
Lehman is moving to come out of bankruptcy proceedings; it paid over $600 mn in professional fees last year. Lloyds Bank, after incurring a loss of $9.6 bn last year, hopes to almost return to profits in 2010; its advances at the end of 2009 were 169% of deposits. Facebook has overtaken Google in terms of weekly hits registered by the site.
Teva of Israel is taking over Ratiopharm (generic drugs) of Germany; combined sales will be $16 bn. Samsung and LG together have a 30% share in world mobile phones market but smartphones are already altering equations. Toyota seems on way to recovering lost sales in US, suggesting the consumer isn’t impressed by the drama being enacted in Washington.
A Lockheed F-35 jet successfully landed vertically last week, German scientists have finally developed a 3-D technology that can make an object invisible, Somali rebel groups are using Internet effectively to raise funds, and Twitter is being used by 3,000 mobile food vendors of NY to communicate with their customers. Incidentally, small offices in India have been placing orders with food vendors by making ‘missed’ calls on mobile phones for years.
Currencies remained largely stable and equities displayed buoyancy last week, which should actually frighten sane minds because stability at unrealistic levels can only lead to problems later on.
xxxxx
Perhaps Obama is trying to convince the 15 mn plus unemployed that the root cause of their plight is the yuan, not the St. The problem is the trade gap, not trade gap with China, and solace lies in either producing more or consuming less, and the US (govt) seems interested in neither. US trade deficit nearly halved in 2009, from $700 bn in 2008, implying the consumer is indeed spending less, but govt insists retail sales remained unchanged.
US bank lending declined 7.4% in 2009 as ‘rated’ bonds kept scoring over loan requests that need laborious evaluation. Bank failures in 2010 are expected to exceed 2009 and yet the five big ones have derivatives exposure of nearly 300 trillion. Bankers are busy lobbying against the proposed consumer protection office that would prevent them from charging a penalty of $25 for overdrafts of $5; 800 bankers told legislators that a consumer watch dog is good for all products except banking services. After sugar, the US is now focused on cutting consumption of salt, whereas what it really needs to cut is gasoline and ATF. Until Harvard and Yale keep competing for earning better yields on their corpus investments, education standards cannot recover.
Greece receded to back pages of newspapers but differences between EU and US+UK on financial regulations are growing. Germany even wants to involve its spy agencies for tracking speculators targeting currencies.
Exports of Swiss watches (industry revenue $35 bn) fell 22% last year and Omega and Rolex are slugging it out in the market place; exports to US dived 38% last year. Australia is upbeat about the new gas fields being developed by the likes of Shell, which plans to have a vessel larger than an aircraft carrier to ferry LNG to Japan and China.
Gross revenue of the booming casino industry in Macao rose 10% to nearly $15 bn last year. Russia remains focused on expanding international trade despite forex reserves hovering close to $400 bn (on the back of high oil prices) and has started softening its stand on Iran, in the hope of entering WTO. Korea is looking closely at what it calls the MICE (Meetings, Incentives, Conventions and Exhibitions) industry. Undaunted by the quake, Chile has decided to go ahead with a $3.2 bn dam project to ease energy shortages, and Mexico’s earnings from drugs are growing but that has started impacting tourism.
The same fiber-optic networks are now carrying Internet, as well as TV. Verizon (mobile telephony) says set top boxes being imported by Cablevision violate its patent rights. What will happen when the wire that brings electricity to your house is able to carry TV and Internet signals also? theflyonthewall.com, a portal that provides equity research reports the moment they are ready, has been ordered by a court to delay pasting, in response to a lawsuit by Merrill Lynch, Barclays and Morgan Stanley. Somebody would start tweeting these reports. Meanwhile, analysts say mobile carriers can forget growth as most in the world already have phones.
PepsiCo is to buy back shares worth $15 bn. Wal-Mart has rolled back prices of 10,000 items, mostly food and consumables, sending other US grocers in a tizzy. It is also considering issuing yuan denominated bonds in Hong Kong. San Miguel of the Philippines is continuing to sell stakes in food, packaging and even liquor (excluding beer) businesses to fund acquisitions in energy and gas. In quarter to 28 Feb, revenue of Fedex and Nike was up 7% each.
Panasonic is boisterous at having acquired battery maker Sanyo Electric last December as most expect demand for batteries to keep rising, and Sony continues to earn hefty profits from sales of Michael Jackson albums. Porsche has started marketing a classy mobile phone that would be offered exclusively to Porsche owners. Be ready to recognize a Porsche owner by suit, tie, shoes and jewelry.
Wells Fargo owned Wachovia Bank has agreed to pay $160 mn to settle allegations it helped Mexican drug lords launder money; it admitted failure to monitor transactions worth $420 bn. E&Y seems to be in a cleft stick because of having taken a benign attitude towards Lehman (before failure) and some believe it may go the Arthur Anderson way.
Lehman is moving to come out of bankruptcy proceedings; it paid over $600 mn in professional fees last year. Lloyds Bank, after incurring a loss of $9.6 bn last year, hopes to almost return to profits in 2010; its advances at the end of 2009 were 169% of deposits. Facebook has overtaken Google in terms of weekly hits registered by the site.
Teva of Israel is taking over Ratiopharm (generic drugs) of Germany; combined sales will be $16 bn. Samsung and LG together have a 30% share in world mobile phones market but smartphones are already altering equations. Toyota seems on way to recovering lost sales in US, suggesting the consumer isn’t impressed by the drama being enacted in Washington.
A Lockheed F-35 jet successfully landed vertically last week, German scientists have finally developed a 3-D technology that can make an object invisible, Somali rebel groups are using Internet effectively to raise funds, and Twitter is being used by 3,000 mobile food vendors of NY to communicate with their customers. Incidentally, small offices in India have been placing orders with food vendors by making ‘missed’ calls on mobile phones for years.
Currencies remained largely stable and equities displayed buoyancy last week, which should actually frighten sane minds because stability at unrealistic levels can only lead to problems later on.
xxxxx
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