Euro-smashing

Up in the morning and what do I see,
Euro stocks cratering, A to Zeee.

That's a re-write of a cadence - aka a "Jody Call" - I like to run while listening to tapes of those on my elliptical machine. Running to military cadences is entertaining and fun, and helps maintain a positive spirit, which is important for a long, "boring" run.

I guess the Euro rich & powerful have a similar manic depression that the US ruling classes have. Hmmm, a bear market worldwide with no recession and minimal inflation. Wierd. I suppose these conditions happen, as human mass delusions can persist a long time. I wonder if there are any lithium stocks ? [joke]

So I read the Financial Times and Wall Street Journal online and found some interesting facts.

From FT:
[A survey of small US companies]
" More than half of the senior executives surveyed – up 10 per cent from 2007 – said globalisation had neither lowered their costs nor improved their margins, while the proportion of respondents moving production or services offshore had declined by 20 per cent during the past year.
" 'The global playing field is different today than it was even a year ago,” said Tom Murphy, the report’s main author. “The savings you generate by producing products with lower labour costs are more than eaten up by the higher energy costs to transport it back to the US.'
" Nevertheless, those companies with a global strategy reported on average a 4 per cent higher gross margin."

Is this not good for jobs in the US ? Less transferrence of jobs overseas ? Hence good for the common man ?

From FT:
"The biggest hedge funds are on a hiring binge, taking advantage of cutbacks at investment banks to recruit star traders, senior executives and whole teams to help them expand."

So they blow up the big investment banks, losing everything "made" in several years, and now go on to hedge funds. I guess the next "leg" will be hedge fund blow-ups next year. Why does anyone pay a "trader" anything? " In the "old" days, trading was simply a necessary service to help distribute new issues. It's become a "profit center", which is a mistake. "Trading" is truly a zero sum game.

From WSJ:
" Production at Mexico’s Cantarell oil complex, one of the world’s largest, has plummeted by a third in the past year, an indication the country could lose self-sufficiency in oil in the medium term.
" Average daily production dropped to slightly more than 1m barrels a day in May compared with more than 1.6m b/d in the same month last year, according to the energy ministry."

That is a fact to buttress the conspectus on oil prices in yesterday's blog.

From WSJ:
" Home buyers are having a tougher time getting mortgages as lenders feel the squeeze from defaults. IndyMac Bancorp Inc., a big mortgage lender during the housing boom, said Monday it will stop making most types of home loans.
" IndyMac specialized in loans for borrowers who didn't fully document their income or assets.

Another competitor of my big commercial banks bites the dust.

From WSJ:

" Many small banks launched just a few years ago are struggling to become profitable and could be forced to sell themselves."

Ditto above comment.

From WSJ:

" The derivatives arm of NYSE Euronext, Liffe, will offer to provide centralized clearing for dealers that trade European credit-default-swap indexes, a move that could help insulate individual firms from losses."

I guess they read this blog, too.

From WSJ:
" The European Central Bank's decision to raise its key interest rate was a signal to wage negotiators that it will keep inflation under control, Luxembourg Finance Minister and Prime Minister Jean-Claude Juncker said."

That's the best explanation I've read for why the ECB raised rates, viz. to keep the wages of the Euro-common man under control.

From WSJ:
" On Monday, a Lehman Brothers report said accounting rule changes could force Fannie and Freddie to raise tens of billions of dollars in new capital. Few expect Washington officials to let that happen, because the changes would make it difficult for the companies to buoy the housing market. The Lehman analyst agreed, saying, 'We cannot imagine such an outcome occurring.' But the report served as a fresh reminder of the thin layer of protection the two companies have against new losses, and helped send the shares downward."

Hmmm, the analyst can't imagine his conclusion is correct but writes it anyway ? Why ? I wopnder if LEH was short those two companies securities in any manner ? Nahhh ... there's a Chinese Wall. Suuuuuuuurrrrrrrrrreee there is. Not!

Word of the Day

"Cacogenics" - noun [$100] (used with a singular verb)
Cacogenics is a synomym for dysgenics, meaning the study of the operation of factors that cause degeneration in offsrping.
Sentence: I wonder if there are books about intellectual cacogenics that might explain why the level of American public discourse has fallen so much since the 1970s.