Unanimous sanctions against North Korea – this will be interesting. China is already concerned about the effects of cutting off a major trading ally.
We can little afford a global change in sentiment as our status as a global debtor is being called into question. There are no quick economic fixes to stop spiraling interest rates if foreign banks stop buying US dollars.
Here’s an article by Tony Paradiso, who thinks it might matter.
Enough of that nonsense because – It Just Doesn’t Matter!
Nice follow up to my Dow article but Mat Hougan, who is much more thorough than I am!
This is why I love GE! This one project is over half the US total allocated for solar energy next year!
There’s a lot of noise about media companies “considering” action against YouTube and they would be foolish not to lodge a formal complaint as leverage for a future deal but I see NBC and CBS already on board with certain “approved” content plus Warner Music, Vivendi, Sony and Bertelsman on the music side. Let’s keep an eye out for a tipping point on content!
Having taken some time to read through all the Fed notes and gather comments, it looks like a hike is absolutely in our future but probably not at the October meeting as that would just ruin Christmas! Aside from Lacker, several non-voting members were in favor of tightening only it wasn’t their turn to vote. After the next two sessions, the hawks may gain the majority!
======================================
OPEC is meeting on Thursday but not every member will be there:
Norweigan “safety officials” have shut 3 platforms down for a week (280Kbd) because they need safer lifeboats.
Not one at a time, not a week’s notice, not that they have no lifeboats, not that they couldn’t anchor a safety ship nearby while they wait… No, take $16M per day off line for want of a dingy! Such blatant BS!!!
It’s a big game of pretending they are not working with OPEC to cut production. They can’t mess around with natural gas because we can see it locally, so that oversupply is killing the market there, despite the “surging demand and tight supply” in oil.
Here’s oil economics in a nutshell:
RDS.A shuts down an $8M a day platform for 2 weeks and the stock goes up half a point.
That’s all it takes – a company with $350Bn in sales shuts down $112M in sales to boost the price of oil 1%. If they all take turns and get 5% out if it, they make $17Bn in extra profits on their sales at the cost of not even a month’s interest on that $17Bn.
Not every oil company has to be evil – just 5 out of 500!
That crazy cold front that dropped an early snow on Buffalo has moved out already and we are back to the 60s in NY again this week as NYMEX resumes trading. They managed to drive the price up Friday on the possibility of an early winter but I wonder if it occurred to them that 200,000 people losing power over the weekend and 500,000 barely able to drive will CUT consumption for the week?
======================================
The GOP may be giving up the House to concentrate on defending their majority in the Senate! Politics knocked the markets off the cover of the regular press this week with Barack Obama on Time and Kim Jong Il on Newsweek – perhaps the market rally isn’t over yet!
That story I mentioned about the 655,000 Iraqi civilian casualties is starting to matter to the Republicans who as recently as December claimed it was only 30,000! It’s hard to claim that 30,000 in 3 years number when, just last month, 2,660 civilians were killed. To be fair, only 13% of those deaths were the direct result of American air strikes while 27% were killed by explosions and 56% by gunshot. Worst PR statistic for us: The largest category of female deaths was girls under 15!
Here’s a nice collection of quick studies on the world of analysts. My thanks to Trader Mike for bringing this to my attention!
=====================================
Here’s a book that’s being downplayed to keep the religious fanatics from rioting in the streets again, only this time it’s in our country! David Kuo, the former deputy director of the White House is publishing Tempting Faith: an Inside Story of Political Seduction in which he claims:
“National Christian leaders received hugs and smiles in person and then were dismissed behind their backs and described as ridiculous, out of control, and just plain goofy,” Mr Kuo wrote, according to MSNBC television, which obtained an early copy of the book. In particular, he quotes Karl Rove, the president’s long-serving political adviser and mentor, as describing evangelical Christians as “nuts“.”
He joins whistleblowers to date:
- John DiIulio The former head of the office of faith-based initiatives told Esquire magazine in 2003 that the administration had “a complete lack of a policy apparatus”
- Paul O’Neill The ousted treasury secretary said in a book of 2004 that some officials were determined to go to war in Iraq from the moment they took office
- Richard Clarke The counter-terrorism expert used his 2004 book to accuse Mr Bush of ignoring the al-Qaida threat before September 11
- Colin Powell The former secretary of state said he was pushed out of his job because of opposition to the war
====================================
Here’s a virtual portfolio I’ve been keeping my eye on – Insider Asia’s Model Virtual Portfolio, now up 121% since 2003. Lots of smart market commentary from these guys and I’m looking for a downturn there to be an early warning sign. I note from them that there is a 3 day holiday coming up on the 23rd and it would be logical to expect profit taking coming into a weekend like that.
=====================================
Business plan of the week: This will be a new item for me as I now officially have far more ideas than I have time to do myself so I will throw ideas out there and see if anyone wants to fund it:
There is a trend of people going out of the country to get elective surgery as procedures are as much as 75% cheaper in countries like India, Malasia and Mexico. Let’s set up an HMO for bigger companies, that outsources expensive medical procedures, when possible. It’s the big-ticket items that throw off the curve and if we can shave $90,000 off a $120K heart valve, even after travel expenses, I think we may have a winner!
California would be the ideal place to start up this business, with easy access to Mexico and Asia and plenty of wealthy companies who wouldn’t mind shaving millions off their annual health plans. US medical care is pricing itself out of the global market and I’d rather start this wave than catch it later…
=====================================
Important economic events next week include (and projections):
- Tues: PPI (2%), Core PPI (-.6%), Cap Utilization (82.3%) and Industrial Production (flat).
- Wed: Crude Inventories (+2M), Housing Starts, CPI (-.3%) Core CPI (.2%) Building Permits.
- Thur: Philly Fed (6.5, which I doubt), OPEC meeting and Jobless Claims.
