The Dow dived below 9700, oil plunged to around 72 and the euro surged back to 1.25 last week, surprising pundits and straights alike. Attitudinally, nothing has changed for US while for EU everything has changed and BRICs are enjoying the sunshine like never before. Japan seems to have gone spiritual, devoid of desire by design. Ideological divides are sharpening by the day. Domestic opposition to Angela Merkel has become strident, UK is busy preparing for fall out of the BP fiasco and perhaps Sarkozy is waiting to guess the direction from which he will be attacked. Politically, one never knows what will happen when and why. Only two things are clear – the consumer is trying to save more and cash hoard with trade and industry is growing.
US wages are declining as the 7 mn unemployed are offering to work more for less. Savings are rising slowly but steadily and yet flows to the St are slowing. Sales of automobiles in China are likely to exceed US sales pre-Lehman. GM is selling more cars in China than at home. China and Taiwan have cut tariffs on imports from each other. Hedge funds have started closing shop in Europe. The Swiss are trying hard to contain the rising franc as it has started hurting exports. As governments across europe cut spending and curb speculation, the EU economic climate is beginning to stabilise.
South Africa expects the World Cup to add 0.4% to its GDP, Hong Kong’s retail sales are growing at nearly 20%, and Russia continues to amass petro dollars/euros, maintaining output at nearly 10 mn bpd. Australia has adjusted super profits tax on mining after fears of decline in investments rose. In Pakistan, the army, the supreme court and the presidency, along with other state bodies owe an estimated $2 bn to the national power company.
God will not abandon the people affected by the oil leak, said a priest last week, even if BP and Obama do. Still nobody knows how much oil is leaking. Fed is examining whether BP’s collapse could cause a major crisis on the St; UK and US say they want a strong and stable BP. Russians say nuke the well (they have done that successfully in the past) to plug it. Seafood prices are rising and tourists are abandoning beaches. However, despite the leak continuing and the supposedly magnificent recovery of developed economies, oil plunged again last week to around 72.
Apple’s iPhone4 has antenna problems; some customers have sued, alleging Apple was aware of defects before launch. Microsoft, after having shelved tablet PC, has withdrawn its Kin smartphones also. Google seems to be making up with China, of course on China’s terms; it has stopped redirecting Chinese users to its Hong Kong site. China Mobile has started looking for overseas takeover opportunities. Yahoo has launched a $3 bn stock repurchase plan that would run for 3 years.
Amazon has started expanding its Internet-based retail operations selling food and wine in Germany also. Dell wants to move upmarket and compete with IBM, HP, etc. It has bough a software firm.
Spanish bank Santander’s US unit is going all out for expanding auto loans in US; it has bought $3.2 bn of auto loans from Citi. Barclays is moving to consolidate units in Spain, Portugal and Italy and has entered India, Pakistan, Russia and Indonesia. AIG has decided to sell its two Japanese units for about $5 bn; its deal with Pru for Asian unit is almost dead now.
Teijin and Toray may witness some explosive growth if automakers developing electric cars achieve reasonable success as most of them are looking at carbon composites as the key to reducing weight while maintaining strength. Teijin has signed a 15 year deal with Airbus to supply carbon composites. Toshiba is developing lithium batteries with Mitsubishi.
Air China is to buy 20 Boeings for $1.4 billion, Celgene Corp (pharma) is buying Abraxis for $2.9 bn, and Malaysian sovereign fund Khazanah is competing with Fortis of India for controlling equity in Parkway hospitals operator of Singapore. Sanofi has completed acquisitions worth $17 bn since 2008 and is reportedly negotiating a $20 bn deal in US. It generated $10 bn of cash last year. Sumitomo is to acquire 30% of iron ore mining unit of Usiminas of Brazil for $1.93 bn. Gas storage facilities of a Exxon-Shell JV in Germany are up for sale.
A US report says clandestine sales of data amounted to $1 tn last year, surpassing revenue of the drug trade. The Chinese are figuring out ways of helping single soldiers find love. A cat has been successfully fitted with prosthetic limbs in UK and can now walk on all its four. The US Supreme Court has rejected a company’s plea for patenting the structure of a hedge deal. Larry King has decided to hang his boots after a glorious 25 years as the world’s most popular talk show host.
A lock of Napoleon’s hair has fetched US$13,000. Luanda (Angola) has become the world’s costliest city for expatriates and Ndjamena (Chad) has ranked third. A Swiss company has developed a fabric that can soak oil up to seven times its own weight. US scientists have developed engineered lung tissue that may be used for transplants and elsewhere researchers say genes can tell who is likely to live 100 years or more.
Warren Buffet is transferring his wealth to the Bill & Melinda Gates Foundation at a steady pace, giving away $1.6 bn this year. A fourth of inmates of all jails in Russia are businessmen and professionals, half of whom are to be released shortly. Russia did not qualify for the World Cup and yet a poll last week said 8% of Russians expect their country to win the World Cup.
Gold and euro are the in the eye of the same storm and automobiles and cash are equally starved of safe parking space. Follow Tony Hayward. Forget worries and watch the World Cup.
xxxxx
Showing posts with label lehman. Show all posts
Showing posts with label lehman. Show all posts
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
Even as Obama vowed not to bail out any bad boys in future and threatened to veto any bill that doesn’t police derivatives, movie box-office futures were cleared by CFTC despite one commissioner calling it “popcorn prediction,” and in Europe one Centaur Galileo fund announced plans to launch a sports betting fund. The only conclusion one can draw is that US and UK aren’t about to get off the poker table. 2+2=3 was the graphic headline of a Swedish daily last week after the govt revised a figure from +2.4 to –2.2 (billion kronors). In US, it should be 1+2=12 and it applies not only to economic recovery related stats but also to what the St keeps telling all to collect money.
Habitual of treating natural disasters as localized events having local impact, humanity was jolted last week as a relatively small volcanic eruption in tiny Iceland is making airlines lose over $200 mn a day.
US trade deficit and imports of consumer goods have stopped declining and surplus in technology products too has started losing steam. US Fortune500 slashed 821K jobs last year as sales plunged 8.7%, even as profits zoomed 200%. NBER (US) has to determine the date on which recession ended, for posterity. It is dilly-dallying because some members aren’t sure if it is really over.
China reported a stunning 11.9% growth for Q1 when industrial output rose over 18%, car sales zoomed 76%, and urban investment rose 26.4%, though China also registered a trade deficit. Besides mining companies, China is also stepping up purchases of farmland in countries such as Australia. The real estate boom, however, is now being seen as possibly a real bubble. New measures have been announced to cool property market, including higher margins and interest rates.
Japan’s GDP shrank 5.2% last year. A third of workers are now part-time, contract or freelance, and every fourth Japanese is over 65. Vietnam has firmed plans for a $56 bn high speed bullet train project with Japanese technology. After a record trade surplus of $17 bn last year, Argentina is offering to settle part of the $95 bn of debt it defaulted in 2001, and India, worried by persistent inflation, is being assured by Wal-Mart that if it is allowed to come in, it would cut inflation by two percentage points.
Twitter created some waves last week by announcing intent to carry ads, Google’s long term prospects are beginning to be questioned by analysts, and doubts about iPad persist. However, PC shipments rose 27% to nearly 85 mn units last year, suggesting the tech sector is live and kicking.
Citic of China is planning a JV with Credit Agricole of France, AIG has sold 53 passenger jets to Macquarie of Australia for $2 bn in cash, and Morgan Stanley’s real estate business is set to lose $8.8 bn. Since 1991 it has bought property worth $174 bn, raising the money from pension funds and universities endowments in several cases. As banks continue to fail (50 this year) in US, troubled assets continue to be lapped by the cash rich playing for the long haul, like Starwood Capital. Dubai World is offering 1% interest to its lenders against 5% they demand.
Taizinai (yoghurt, China) never sold anything contaminated but has collapsed because the organized dairy sector has lost trust of consumers in China. Nestle was approached but declined. EBX of Brazil says it will go for an IPO only after the group is valued at $100 bn or more. BP is to shift solar panels manufacturing from US to China/India.
Apple says iPad has sold better than expected in US, forcing it to delay overseas shipments, though Israel has started asking visitors not to carry iPad because its technology interferes with frequencies. Straddled with massive inventories of unsold smartphones, Palm is looking for a buyer and Huawei of China has shown some interest.
Lufthansa says it isn’t insured against losses from the Iceland volcano, and Carrefour is buying back 6% of its shares and plans to seek acquisitions in Brazil, China and Spain. Mattel sales rose 12% to $880 mn last quarter when Sony’s PlayStation3 also jumped 44%. HP’s former CEO Carly Fiorina is facing flak for bribes HP paid for a contract in Russia during her tenure, and BP’s CEO is facing flak for a 41% hike in pay as earnings fell 22% in 2009.
Schools in southern US states are being accused of continuing segregation in a back-handed way by concentrating white students in some classes. Americans, Indians and Italians have been identified as those who lose temper at sporting events when their kids don’t achieve.
Larry King it seems has been far more sophisticated than Tiger Woods – he has filed for his eighth divorce from his seventh wife; he remarried one after divorce and then divorced her again. The moral is why have an affair if you can do it legally.
Clothes that can trim torsos are being hawked by somebody in partnership with a former investment banker and Somali pirates are acquiring the latest technologies, per some reports. Effectiveness of individual drugs is to be measured under a program that is a part of Obama’s healthcare plan, which some say would virtually pave the way for rating drugs. Meanwhile, Michelle Obama seems to be succeeding in persuading food firms to cut sugar and salt in their products; the lofty objective is to cut obesity in one generation. US continues to account for more than a fourth of all drugs sold worldwide.
If Goldman Sachs can short and hawk a financial product (Abacus) at the same time and Deutsche can persuade a French municipality to speculate on dollar-SFr rates until 2042, where does one go? Learn from former Lehman broker Stone, who went to prison a decade ago for a penny stock scam, set up his own firm after that and is now running Wakabayashi Fund in Japan. Says what’s wrong in sending emails recommending a stock?
xxxxx
Habitual of treating natural disasters as localized events having local impact, humanity was jolted last week as a relatively small volcanic eruption in tiny Iceland is making airlines lose over $200 mn a day.
US trade deficit and imports of consumer goods have stopped declining and surplus in technology products too has started losing steam. US Fortune500 slashed 821K jobs last year as sales plunged 8.7%, even as profits zoomed 200%. NBER (US) has to determine the date on which recession ended, for posterity. It is dilly-dallying because some members aren’t sure if it is really over.
China reported a stunning 11.9% growth for Q1 when industrial output rose over 18%, car sales zoomed 76%, and urban investment rose 26.4%, though China also registered a trade deficit. Besides mining companies, China is also stepping up purchases of farmland in countries such as Australia. The real estate boom, however, is now being seen as possibly a real bubble. New measures have been announced to cool property market, including higher margins and interest rates.
Japan’s GDP shrank 5.2% last year. A third of workers are now part-time, contract or freelance, and every fourth Japanese is over 65. Vietnam has firmed plans for a $56 bn high speed bullet train project with Japanese technology. After a record trade surplus of $17 bn last year, Argentina is offering to settle part of the $95 bn of debt it defaulted in 2001, and India, worried by persistent inflation, is being assured by Wal-Mart that if it is allowed to come in, it would cut inflation by two percentage points.
Twitter created some waves last week by announcing intent to carry ads, Google’s long term prospects are beginning to be questioned by analysts, and doubts about iPad persist. However, PC shipments rose 27% to nearly 85 mn units last year, suggesting the tech sector is live and kicking.
Citic of China is planning a JV with Credit Agricole of France, AIG has sold 53 passenger jets to Macquarie of Australia for $2 bn in cash, and Morgan Stanley’s real estate business is set to lose $8.8 bn. Since 1991 it has bought property worth $174 bn, raising the money from pension funds and universities endowments in several cases. As banks continue to fail (50 this year) in US, troubled assets continue to be lapped by the cash rich playing for the long haul, like Starwood Capital. Dubai World is offering 1% interest to its lenders against 5% they demand.
Taizinai (yoghurt, China) never sold anything contaminated but has collapsed because the organized dairy sector has lost trust of consumers in China. Nestle was approached but declined. EBX of Brazil says it will go for an IPO only after the group is valued at $100 bn or more. BP is to shift solar panels manufacturing from US to China/India.
Apple says iPad has sold better than expected in US, forcing it to delay overseas shipments, though Israel has started asking visitors not to carry iPad because its technology interferes with frequencies. Straddled with massive inventories of unsold smartphones, Palm is looking for a buyer and Huawei of China has shown some interest.
Lufthansa says it isn’t insured against losses from the Iceland volcano, and Carrefour is buying back 6% of its shares and plans to seek acquisitions in Brazil, China and Spain. Mattel sales rose 12% to $880 mn last quarter when Sony’s PlayStation3 also jumped 44%. HP’s former CEO Carly Fiorina is facing flak for bribes HP paid for a contract in Russia during her tenure, and BP’s CEO is facing flak for a 41% hike in pay as earnings fell 22% in 2009.
Schools in southern US states are being accused of continuing segregation in a back-handed way by concentrating white students in some classes. Americans, Indians and Italians have been identified as those who lose temper at sporting events when their kids don’t achieve.
Larry King it seems has been far more sophisticated than Tiger Woods – he has filed for his eighth divorce from his seventh wife; he remarried one after divorce and then divorced her again. The moral is why have an affair if you can do it legally.
Clothes that can trim torsos are being hawked by somebody in partnership with a former investment banker and Somali pirates are acquiring the latest technologies, per some reports. Effectiveness of individual drugs is to be measured under a program that is a part of Obama’s healthcare plan, which some say would virtually pave the way for rating drugs. Meanwhile, Michelle Obama seems to be succeeding in persuading food firms to cut sugar and salt in their products; the lofty objective is to cut obesity in one generation. US continues to account for more than a fourth of all drugs sold worldwide.
If Goldman Sachs can short and hawk a financial product (Abacus) at the same time and Deutsche can persuade a French municipality to speculate on dollar-SFr rates until 2042, where does one go? Learn from former Lehman broker Stone, who went to prison a decade ago for a penny stock scam, set up his own firm after that and is now running Wakabayashi Fund in Japan. Says what’s wrong in sending emails recommending a stock?
xxxxx
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