Apparently, videos of people fighting over towels, videogames and who can be the first into Urban Outfitters of all places are not an overall indicator, with a negative report out of Best Buy this morning and retail sales up only 0.2% over the prior month, whereas most indicators had it at 0.5% up. Earnings for Best Buy came in at 42 cents per share versus 54 cents a share a year earlier. EPS and revenue both missed estimates. Story. While Best Buy continues to fight against the view that they've become a brick and mortar showroom for online retailers, the company's continued attempts to compete with deeper discounts have only lead to lower margins and not much in the way of visible progress, as the stock is down another 10% today. Overall, while the media hyped up the bestest Black Friday in years, the end result - so far - doesn't seem to nearly live up to the hype.
Tuesday, December 13, 2011
Wednesday, November 30, 2011
Shall We Play a Game?
Edited to add: oil now over 101, gold over 1750.
Update 2: Forbes says big European bank nearly failed last night and was a likely reason behind actions taken today. Link
How about, "kick the can?" What is the primary goal? Well...
Fed statement: http://blogs.wsj.com/economics/2011/11/30/fed-statement-on-coordinated-central-bank-action-on-currency-swaps/
FAQ From the Fed: FAQ.
"The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.
These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.
As a contingency measure, these central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar, but the central banks judge it prudent to make the necessary arrangements so that liquidity support operations could be put into place quickly should the need arise. These swap lines are authorized through February 1, 2013."
Read: Europe is probably worse than indicated and worse than anyone with more detailed knowledge would care to admit and, if things get worse ("if market conditions warrant"), then the program can go further and involve currencies beyond the dollar. Additionally...through 2013?
Recommended related reading: the terrific new book from Jim Rickards on geopolitics and global financial issues, "Currency Wars":
US futures, of course, are skyrocketing on the news. To offer a "Seinfeld" reference, it would appear that anything and everything is on the table to continue "Serenity now", but...like the episode, it's just masking (papering over) the real issues...
Update 2: Forbes says big European bank nearly failed last night and was a likely reason behind actions taken today. Link
How about, "kick the can?" What is the primary goal? Well...
Fed statement: http://blogs.wsj.com/economics/2011/11/30/fed-statement-on-coordinated-central-bank-action-on-currency-swaps/
FAQ From the Fed: FAQ.
"The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.
These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.
As a contingency measure, these central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar, but the central banks judge it prudent to make the necessary arrangements so that liquidity support operations could be put into place quickly should the need arise. These swap lines are authorized through February 1, 2013."
Read: Europe is probably worse than indicated and worse than anyone with more detailed knowledge would care to admit and, if things get worse ("if market conditions warrant"), then the program can go further and involve currencies beyond the dollar. Additionally...through 2013?
Recommended related reading: the terrific new book from Jim Rickards on geopolitics and global financial issues, "Currency Wars":
US futures, of course, are skyrocketing on the news. To offer a "Seinfeld" reference, it would appear that anything and everything is on the table to continue "Serenity now", but...like the episode, it's just masking (papering over) the real issues...
Monday, November 28, 2011
Black Friday Video
Can't people be civil?
Swarming over towels. I've seen mosh pits at rock concerts that are more courteous. I can only hope the dollar doesn't ever collapse, as if this is mere shopping, one can only imagine what that would look like.
More pushing/shoving. Fighting for a video game that, if like many video games, they will likely get tired of within the month and then see a few months later for half the Black Friday price used at Gamestop.
Urban Outfitters? Really? Is overpriced casual wear really worth rushing the store at midnight like a zombie movie?
No comment.
Swarming over towels. I've seen mosh pits at rock concerts that are more courteous. I can only hope the dollar doesn't ever collapse, as if this is mere shopping, one can only imagine what that would look like.
More pushing/shoving. Fighting for a video game that, if like many video games, they will likely get tired of within the month and then see a few months later for half the Black Friday price used at Gamestop.
Urban Outfitters? Really? Is overpriced casual wear really worth rushing the store at midnight like a zombie movie?
No comment.
Tuesday, November 22, 2011
The US Can't Get Its House In Order, But...
The Supercommittee failed at crafting spending cuts and the US remains incapable of coming to terms on addressing the country's financial/structural issues, but yet - here comes the IMF ready to come to the aid of Europe.
"The new liquidity line would give countries with relatively good economic policies access to credit for six months, the I.M.F. said. It could also be used under a 12- to 24-month arrangement with access up to 1,000 percent of a members’ quota"
Hmmm...who decides what are "good economic policies"?
"The reform enhances the Fund's ability to provide financing for crisis prevention and resolution," IMF Managing Director Christine Lagarde said in an e-mailed statement. "This is another step toward creating an effective global financial safety net to deal with increased global interconnectedness."
So, the global financial system has become too interconnected to fail?
Story
Let's all take a trip to the money factory, shall we?
"The new liquidity line would give countries with relatively good economic policies access to credit for six months, the I.M.F. said. It could also be used under a 12- to 24-month arrangement with access up to 1,000 percent of a members’ quota"
Hmmm...who decides what are "good economic policies"?
"The reform enhances the Fund's ability to provide financing for crisis prevention and resolution," IMF Managing Director Christine Lagarde said in an e-mailed statement. "This is another step toward creating an effective global financial safety net to deal with increased global interconnectedness."
So, the global financial system has become too interconnected to fail?
Story
Let's all take a trip to the money factory, shall we?
Morning News
US Q3 GDP revised to 2% from 2.5%. Expectations were for unchanged. It comes as no surprise to the author.
US targets Iran oil industry/central bank.Story
Netflix drops after attempting to raise capital, raising concerns about liquidity after the company's shares have dropped significantly in recent months, from a high just over 300 to under 70 as of pre-market this morning. Story
MF Global Trustee says that 1.2B or more may be missing. Story
Non-UK investors own most of City of London for the first time. Story
Rupee plunges; RBI tries to stem currency drop. Story
Focus Media denies allegations: Story
JA Solar Q3 loss 36c a share
Campbell Soup Q1 net flat at 82c
US targets Iran oil industry/central bank.Story
Netflix drops after attempting to raise capital, raising concerns about liquidity after the company's shares have dropped significantly in recent months, from a high just over 300 to under 70 as of pre-market this morning. Story
MF Global Trustee says that 1.2B or more may be missing. Story
Non-UK investors own most of City of London for the first time. Story
Rupee plunges; RBI tries to stem currency drop. Story
Focus Media denies allegations: Story
JA Solar Q3 loss 36c a share
Campbell Soup Q1 net flat at 82c
There's No Team in Supercommittee
There's no I in team, and there's apparently no teamwork in government. As has been reported, the group of senators announced, "...after months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline."
It's astonishing to me that a government committee, basically chosen for the task of crafting spending cuts, could not come to a decision. This, after congress displayed an inability to do so this Summer regarding the debt ceiling debate (and the fallout that came after.) At the same time, it's astonishing that the failure to come to an agreement is not entirely surprising, either. Much has been discussed in financial media, with some news anchors talking about how the failure to come to an agreement is "no surprise" - but isn't that in itself a sad statement? Those elected to lead have lowered expectations to the point where their inability to come to an agreement on important financial issues is almost expected.
Has politics become so lucrative that playing political games become in the greater interest of politicians than making difficult decisions or even basic decisions in the interest of the American populace? Or is this not even a matter of political games as much as it is the inability of both parties to face the very un-super reality of the country's finances? Or both? These are questions the entire country has to answer because the inability of this government to even get budgetary issues done is immensely concerning and speaks volumes about so many other aspects of what we rely upon - if this congress can't work together on budgetary issues, may I ask what they can work together on? There's not a lot of time, either - the time to start making progress on some of the structural issues of this country has passed and we need politicians with the courage to lead and face economic realities that may not be pleasant or popular, because continuing to go down the same path will only snowball current problems. Additionally, we haven't even seen the fallout from this committee's inability to come to a decision - both on the surface (possible debt rating/outlook downgrades) and below the surface (how the inability to come to a decision will be seen in other parts of the world.)
The approval rating of Congress last month? 9%? Does that concern any of them? Maybe it should, especially given that even Paris Hilton and the IRS have higher approval ratings (15% and 40%, respectively.) When your approval rating is significantly lower than the IRS and a faded reality star who no one was sure why they were popular in the first place, that may signal a problem. Story
It's astonishing to me that a government committee, basically chosen for the task of crafting spending cuts, could not come to a decision. This, after congress displayed an inability to do so this Summer regarding the debt ceiling debate (and the fallout that came after.) At the same time, it's astonishing that the failure to come to an agreement is not entirely surprising, either. Much has been discussed in financial media, with some news anchors talking about how the failure to come to an agreement is "no surprise" - but isn't that in itself a sad statement? Those elected to lead have lowered expectations to the point where their inability to come to an agreement on important financial issues is almost expected.
Has politics become so lucrative that playing political games become in the greater interest of politicians than making difficult decisions or even basic decisions in the interest of the American populace? Or is this not even a matter of political games as much as it is the inability of both parties to face the very un-super reality of the country's finances? Or both? These are questions the entire country has to answer because the inability of this government to even get budgetary issues done is immensely concerning and speaks volumes about so many other aspects of what we rely upon - if this congress can't work together on budgetary issues, may I ask what they can work together on? There's not a lot of time, either - the time to start making progress on some of the structural issues of this country has passed and we need politicians with the courage to lead and face economic realities that may not be pleasant or popular, because continuing to go down the same path will only snowball current problems. Additionally, we haven't even seen the fallout from this committee's inability to come to a decision - both on the surface (possible debt rating/outlook downgrades) and below the surface (how the inability to come to a decision will be seen in other parts of the world.)
The approval rating of Congress last month? 9%? Does that concern any of them? Maybe it should, especially given that even Paris Hilton and the IRS have higher approval ratings (15% and 40%, respectively.) When your approval rating is significantly lower than the IRS and a faded reality star who no one was sure why they were popular in the first place, that may signal a problem. Story
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