Different Strokes for Different Folks

Thu, 2009/08/13 - 2:35am | Your editor

           Different strokes for different folks.

           Today, on grandchildren orders, we walked by the River Lee and the canals of Bow to check on the construction of the Olympic facilities for 2012, when London will host the games. There is plenty of bustle but the structures are much less interesting than the Beijing Bird Cage stadium. But then, the British police will not be arresting their stadium architects to stop them from testifying in a court case against shabbily built schools as occurred in China.

            In fact, the Brits are protecting more than schoolchildren; they're saving the environment and protecting rosebushes and crab-apple trees along the towpaths and bike lanes around the new stadiums. We saw ducks and a heron amidst the metal cranes and dump trucks. Read more »

Vincent and Wuxi

Wed, 2009/08/12 - 7:41pm | Your editor

Yesterday I went to the National Gallery to view two exhibits, one on the restoration of Amor Vincit Omnia, a Titian painting, and the other on the roots of Impressionism, called Corot to Monet. I visited the Gallery Shoppe where I spotted a doll I cannot give one of the grandchildren. About 8 inches high, it shows Vincent Van Gogh, complete with red beard and blue suit. There is also a detachable ear, with Velcro to replace it. Yech.

This shlocky wonder costs GBP 18. It may be an example of British humor, but I found it off-puttingly cruel as well as overpriced.

Does monetizing government debt work? Should central banks continue to do it? From Nouriel Roubini, a comment on differing strategies by leading central banks: Read more »

Suffragettes for Windmills

Tue, 2009/08/11 - 7:43am | Your editor

Taking a clue from the suffragettes, environmental protestors chained themselves outside the home of Lord Mandelson in Regent's Park, London, to protest the closure of a wind turbine factory on the Isle of Wright (near Portsmouth). Two of the eco-protestors wore votes-for-women costumes and had to be cut from the railings by police. Mandelson, Minister of Business, was designated as deputy for vacationing Premier Gordon Brown and flew back from his summer holiday. He did not actually see the protestors. This tilting at windmills PR stunt affects one of our stock picks discussed for paid subscribers below.

 

Two Asia ipo's came to Wall St. last week, one for enterprise software maker CDC Software Corp. of Hong Kong, which raised $57.6 mn (CDCS.Q) and the other for analog chip maker Avago Technologies Ltd of Singapore which raised $648 mn (AVGO.Q).

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Nihao, Bubble

Mon, 2009/08/10 - 8:08am | Your editor

Nihao, bubble.

From Kuala Lumpur, in an interview with Bloomberg, Templeton's emerging markets expert Mark Mobius warns that “probably this year” there will be a 20 to 30 percent correction in stock markets.

A correction is normal after markets have risen 50 or 60 percent, Mark says. The major market with the biggest growth this year has been the Shanghai composite, up 78% despite some profit-taking late last week. And Shanghai is the one worrying analysts, although Mark says he does not think it is “in a bubble”.

Others disagree, but not many stock market gurus are telling investors to find the exit in Chinese yet. As long as the music is playing, you may as well dance. But I think there are reasons for caution. I explained some of the statistical legerdemain behind China's extraordinary growth figures last week. For this, a Thailand-based subscriber berated me. But I am unrepentent. Read more »

Goldilocks and the Bears

Fri, 2009/08/07 - 5:20pm | Your editor

Abby Joseph Cohen of Goldman Sachs has spoken bullishly, as is her wont. She now expects based on earnings forecasts that the S&P 500 will end the year at 1050-1100. Corporate profits for the index she pegs at $75.The top ranked macro forecaster thinks the “new bull market” began in March, and expects US GNP to rise about 3% annualized in H2.

 

The only negative she sees, and it is a big one, is the job market where she says in her CNBC interview “we are beginning to see improvement”. She says that "job losses are slowing and there is some job creation going on.” She adds that “labor markets are unlikely to turn all at once on a dime.” "many people are looking for strong signals on the economy and now we are getting them" quoth Abby.

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Staycation a la francaise

Thu, 2009/08/06 - 3:54pm | Your editor

 

The Paris way with staycations is worth describing for people unfamiliar with French mores. In August, by tradition, everyone shuts their shops or factories and goes off for a month's holiday.

 

But these days, not everyone can afford a trip. So the City of Paris for the past 5 years has dumped piles of sand and built boardwalks along the Right Bank of the River Seine. There, the people who cannot afford anything but home can lie on deck chairs or blankets in the sun slathered with sunscreen, drinking sodas, listening to buskers and the occasional brass band, and chat or read.

 

But note that you cannot plunge off the quai side into the river. The level of pollution is too high for human beings to tolerate.

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Damn Lies

Thu, 2009/08/06 - 1:13am | Your editor

Oh, shock, horror. Today's Financial Times reports that China's growth figures do not add up. The data from provincial authorities for H1 are way higher than the national numbers put out earlier by the central govt in Beijing. This is because zealous local bureaucrats are trying to show their support for stimulus even if they have to massage the numbers.

 

Official National Statistics Office numbers say China grew GNP 7.1% in H1 to RMB 13.986 bn. Now the provinces say collectively that growth was well into double digits to RMB 15.786 bn. That is $2.25 bn. Whom do you believe?

 

Neither the center nor the periphery in my view. “There are lies, damned lies, and statistics”.But with the whole world hanging on to the Chinese growth locomotive, the risks of a deflected recovery are much higher than most people assume.

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Scouts

Tue, 2009/08/04 - 8:41am | Your editor

There is good news from Iceland where most European scouts have gathered for a jamboree. The 3000 youngsters are having a great time and they are focusing on creating art rather than knots as they build teepees and igloos on the campsite. But there is a sour note.

 

Moslem Euro-scouts are having their own separate gathering in Algeria at Mostaganem. This is not really about Islamic separatism but about European lack of secularism. Despite the legacy of Baden-Powell, scouting is affiliated with religion in Continental Europe. This applies also in Italy, Spain, and parts of Germany.

 

In France, for example, there are two movements, Les Scouts, who are Catholic, and Les Eclaireurs who are not. After the laicization of education in 19th century France, the Church grabbed the scouting movement to continue to influence the young. So the Protestants, the Jews, the atheists and eventually the Moslems created their own troops affiliated by religion.

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Joe's Garden

Sun, 2009/08/02 - 2:49pm | Your editor

     A gripe, an apology, and 2 cheers from Paris. The apology first. Because I had problems with the plumbing in our London pied-a-terre requiring the ministrations of Warren the Oracle of Island Gardens (not Buffet but soon to be as rich), plus theater twice, I did not get to sell my own holdings of Groupe Aeroplan when I told you to a week ago. This was profitable because GAPFF gained as a result of helping bail out Air Canada, along withofficial bodies and GE, to the tune of C$ 150 mn. Some investors and analysts think providing funds to an airline is good for Aeroplan. I don't agree and will sell today. At 10 % more than the closed positions show. I always sell or buy after we publish but rarely so profitably. The plays were War Horses, in the West End, a wierd children's play; and a ghastly performance of Federico Garcia Lorca's Blood Wedding in a Fringe theater, to be missed at all costs.

     I want out of Aeroplan because I do not want to own Air Canada or subscribe toan airline's bottomless pit.

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Shanghai Shock

Wed, 2009/07/29 - 11:38pm | Your editor

         We have been riding the dragon with trepidation for the past 15 months and slowly easing out of our high-profit high-risk exposure to China stocks. Today in a late Shanghai sell-off, Chinese local shares fell by the daily limit of 5%. The p/e ratio on China shares remains an unsustainable 35 times.

         The recent spate of Chinese new offerings in my view is particularly vulnerable to sell-offs as the holders are inexperienced hot hands.

         Today other "BRIC" and emerging markets risk followed China down despite the fact that their economies are different. We have already seen a fall in India today after their central bank, the Reserve Bank of India, not only failed to further cut interest rates, but actually muttered about possibly raising them to fight inflation. Read more »