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Showing posts from June, 2014

US Q1 GDP bad news for Obama -- maybe good news for the GOP?

Numbers as published are always subject to revision.  The initial Q1 U.S. GDP number has been revised as more information was made available.  Today, the US government revealed that Q1/2014 GDP growth was revised downward from -0.7% to -2.0%.  Apparently healthcare costs that were assumed to grow by 9.9%, and account for about 15% of overall GDP actually fell by 6% instead.  This is a truly terrible number, one of the worse (top 10) since the end of WW2.  If that provides some perspective!
It's going to make the 3.5% target set by Wall Street difficult to achieve!  
In other news the boys on Wall Street are suffering, low volatility and a scarcity of new deals in the 2nd half of the year means that banks are thinking of trimming traders numbers and even IB guys are looking around in fear (let's not exaggerate) nevertheless it is we'll know that the bonus pools are shrinking, and that the banks are mindful of their overheads!
The usual exit strategy into private equity and hed…

Christine Lagarde -- 2,000 Greek names with Swiss bank accounts

So Ms Lagarde was in Montreal yesterday for the "Montreal Conference" a watered down version of Davos that aspires to do... something.  Anyway, the lunch speaker was Christine Lagarde the current head of the IMF (Washington based) and all around cheerleader for capitalism!

The highlights was that the global economy is back on its feet, yep we're looking at 3.5% growth in America and "something positive in Europe"  China should be around 7% -- less than before but still respectable, shifting towards consumption...

Ok so there are a few things wrong here, Q1/2014 GDP growth in America was -0.7%, so to make the 3.5% target Q2/3 and 4 are going to have to be gangbusters.  Still, Europe is going to get something positive because the ECB is so brave -- they have entered into the land of negative interest rates.  If you accept a deposit from the ECB, you pay them interest.  There's no way that this can go wrong, and deflation is not just around the corner.  As fo…

AAPL down 85% pre-opening

Sometimes I love the ticker!

Shares of AAPL in the pre-market are trading around $92 a share... sure the stock has lost 85% of its value overnight, there was big news today -- AAPL stock split 7:1.  So really nothing to see here.  All the automated news will show that AAPL is the biggest looser today -- some will correct the news to reflect the split.  Others will not.

My bet is that a few investors will call their broker in panic!  The stock is down, the stock is down sell it all!

It reminds me, a million years ago, my then firm had created a structured product for Nortel shares.  It was a strange instrument created in the early 00s (before Nortel went bust).  So in 2005 I get a call from this angry investor, because her structured note was not going up, and all her friends at bought Nortel at $8 and it "was going to $18" -- according to her friends.

I had to point out that she had bough the instrument when Nortel was at $85, we had offered to buy it off her at $100 and at…

Greece, The far right and the GOP!

Watching Greece over the past few months has been an education, and education in the rise of fascism! Turns out that the Greek population in general is not enamoured with its politicians and their current method of "saving the country"  The new favourite pastime for the middle class (well educated at that) is to support Golden Dawn a avowed  fascist  party that is "blaming the Jews" for all that has befallen the country.

Granted financiers have a lot to answer for, but they're not the ones who spent like drunken sailors -- yes bankers were enablers, but... at any rate in local election Golden Dawn which is just short of being thugs (actually not that short) and who have committed some rather appalling actions (and enjoy a bit of Nazi salut) got almost 10% of the vote.

It's really not that surprising; considering the state of the economy, the unemployment and destruction of the middle class that a far right party would take hold of the popular imagination. …

Guns in America

Yesterday's tragedy in Moncton (where 3 police officers will gunned down) just brings closer the whole firearm mess that is a constant headline grabber.  In the US the number of "daily" incidents is so large to make it almost farcical.  The number of American who manage to shoot themselves (or their family or friends) is simply depressing.

Interestingly enough gun ownership is in free fall in America.  Despite all the rhetoric and the crazies in Texas with their "Open Carry" demonstration gun ownership has dropped from around 40% in 1980 to around 25% today.  granted those who own guns tend to own many many guns!



Look at these two morons!  I mean you've got shorty on the right who's clearly got some "size" issue -- will anyone ever tell that guy that his assault weapon is some form of penis replacement therapy (well maybe not to his face), and as for the fat bastard on the left, you know he's wanted to be a soldier all his life but all the…

Polls, Politics and the Future

This morning the local French newspaper (called La Presse) released a new poll for 18-24 year old party affiliation/interest.  The result is both stunning and obvious; from the 500 young people who were asked, 34% would vote for the Liberal party, 23% each for the CAQ and QS and 16% for the PQ. What was obvious at my time in high school and college that the "cool and Hip" crowd supported the Parti Quebecois -- the party pushing for the independence of Quebec (maybe) is no longer true.  The Party Quebecois is GrandPa's party -- its no longer cool, and the people who run it are the same who were running it in the late 70s and early 80s!

The reality is that young Quebecers don't really see their future here -- 60% say that would like to work and live elsewhere!  Canada, the US doesn't matter -- they are considering a future (or at least dreaming of) that doesn't include Quebec and its "aspiration" to become a country.

For the PQ that is about to sit d…