The sovereign debt crisis turns from Greece to the United Kingdom
Everybody hates the pound sterling. As of March 9 the futures market showed a greater proportion of bearish bets against the pound than back in September 1992 when currency traders wagered that the British government wouldn’t be able to defend the pound and keep the...Psst, want to buy a used airline?
Why I will never be a momentum investor. Or a trader. I just can’t bring myself to say “Fundamentals don’t count if the price trend is good enough.” Continental Airlines (CAL) has come up two of my screens in the last few days as a buy on its price momentum. It came...Despite those huge reserves, China could be, gasp, broke
Is China broke? Seems a silly question right? China’s foreign exchanges reserves stood at $2.4 trillion at the end of 2009. Yes, China announced that its proposed annual budget for 2010 would have a record deficit, but the deficit is just $154 billion or 2.8% of...With others cutting back on capital spending, ExxonMobil plans to spend more
ExxonMobil (XOM) goes its own way. Again. When oil prices were soaring in 2006 and 2007, ExxonMobil refused to get sucked into a race to see who could spend more on exploration. Now that everyone else is cutting back on capital budgets (and some companies such as...Bad news overnight on Chinese inflation: Is it out of control?
Bad news on inflation from China last night could give global stock markets the jitters today, March 11. Higher than expected consumer price inflation in February at an annual rate of 2.7% is likely to revive fears that Beijing will try to slow the speed of economic...Higher unemployment could soon be called full employment
You know your team’s in trouble when they start talking about moving the goal posts. At the same time as economists are talking about the possibility that the economy will create net jobs in March, the Federal Reserve is thinking about redefining full employment for...China's imports soar; good news for the U.S. economy
It quite likely puts off any move to allow its currency to appreciate against the U.S. dollar, but news that China’s imports were up 45% in February 2010 from February 2009 is great news for the still struggling economies of the developed world. Growth in China’s...Stocks show signs today of having more fuel in the tank
I wouldn’t get complacent about this rally but it passed some milestones yesterday and today (March 9) that argue it has some more room to run. Here are the positive signs: In the final hour today volume picked up. That’s a huge positive because if a rally is to...Oil drilling failure rate surges at the Western majors
It’s not a factor now in the climbing price of oil but the trend certainly doesn’t portend cheaper oil down the road. Or a rosy future for the Western oil giants. In 2009 Chevron’s (CVX) drilling failure rate climbed to 35%. More than one-third of exploratory wells...The lesson of the Greek crisis: Every government cheats and no one wants to know
Greece cheated on its national accounts in 2009. And that led to a budget crisis in 2010. But that’s not the important part of the story. What makes this a crisis not just for Greece, and the euro and the European Union is that everyone—from the Greek government and...Is China about to start exporting inflation?
Shouldn’t we be seeing more inflation than we are? The anecdotes add up to rising inflation. But you can’t see it in the official numbers. Are the anecdotes misleading? Are the official numbers wrong? Or are we simply looking at a lag between anecdote and official...If not now, Wen? Still no signs that China is planning a quick appreciation of its currency agains the dollar
In trying to read the tea leaves of China’s economic and monetary politics, you have to pay as much attention to the Who as to the What of any official statement. So while it’s significant that anyone in the Chinese government is making noises about China abandoning...How to maximize what your cash pays even when nothing is paying much of anything now
Got cash? Maybe you’d love to invest it, but where? The stock market seems pricy after a 70% rally from the March 2009 lows. And it’s been so up and down lately that it doesn’t inspire much confidence. So maybe stocks are just too risky for you. Or you’re close to...Is that duck I see being served at China's National People's Congress?
What looks like a duck, quacks like a duck, but doesn’t walk like a duck? A lame duck, of course. Watch tomorrow’s state of China address and the policies announced by the National People’s Congress to see if Chinese Premier Wen Jiabao fits that description. My bet is...Can taxpayers begin to get off the hook?
This week’s attempt by the FDIC (Federal Deposit Insurance Corp.) to sell securities backed by residential mortgages and construction loans marks a huge milestone in the road back to normalcy for the financial markets this week. Let’s hope the markets pass the test....This is what it looks like when bond markets run the world
This is what it’s like when a country loses control of its own affairs and has to dance to the tune of the bond market. Today, March 3, Greek Prime Minister George Papandreou announced another $6.6 billion in budget cuts. The new round of reductions is meant, first,...Yum, yum! Is risk tasty again?
What do these sectors—solar energy, wind, gold, Spain, Italy, steel, metals and mining, and retail—have in common? They’re all among market leaders today. ETFs (exchange traded funds) in these sectors are outpacing the Standard & Poor’s 500 (up 0.5% as of 12:25...Brazil becomes a big player in the profitless global economic recovery
Want to know why this is going to be a profitless recovery? And not just in the United States either. Then look at the IPO (initial public offering) planned by OSX Estaleiros, a start-up ship building company. The March 19 offering aims to raise $5.6 billion. (For...February auto sales disappoint but no reason for panic
You can come up with lots of reasons why investors shouldn’t panic at the slide in February U.S. auto sales to a seasonally adjusted annual rate of 10.4 million. That was down from the seasonally adjusted 10.8 million sales rate in January 2010 although up from the...The Fed is about to get less predictable–and that's not good
Just what we don’t need: Turmoil at the Federal Reserve. On March 1 Federal Reserve vice-chairman Donald Kohn announced that he would be stepping down in June. Kohn has been a key No. 2 to Fed chairman Ben Bernanke throughout the financial crisis. He led the stress...Want to see the U.S. dollar's future? Watch the fall of the pound
Short-term politics trump long-term economics. That’s the message in the beating administered to the pound yesterday. The implications for the United States are rather depressing. The pound got killed yesterday (March 1), falling almost four cents against the U.S....The one must-have number for successful long-term investing
How do you decide what to buy? I get the question a lot and I think it’s a good one. The answer depends on things like how long I’m planning to hold the stock, whether I see it as a value or a growth play, and where the momentum is in the market. If I’m looking for a...Do the new Coke and the new PepsiCo both fail the taste test?
Gee, I really hate this deal. It’s not just that I question the price that Coca-Cola (KO) is paying to acquire the North American operations of its biggest bottler Coca-Cola Enterprises (CCE). The $12.7 billion price works out to about the same multiple that PepsiCo...I only wish manufacturing made up more of the economy
Manufacturing continues to contribute more than its share to the economic recovery, according to index numbers released this morning (March 1) in the Institute for Supply Management survey of purchasing managers. Unfortunately, manufacturing accounts for only about...What's wrong with this picture? Consumer spending up but saving down
The Commerce Department announced today (March 1) that consumer spending rose by 0.5% in January. But that personal income fell by 0.1%. The report pretty much sums up everything that worries me about the economy. It’s great news that consumer spending climbed in...Consumers lag but business confidence builds on recovery
Hmmm. Is that a trend I see in today’s economic numbers? It sure looks like we’re seeing a recovery led by business and manufacturing, and where consumers still lag. Today’s (February 26) revised numbers for U.S. GDP (gross domestic product) show the economy grew at a...Can CEOs destroy shareholder value in an acquisition? Just watch them
I call it destruction by acquisition. Forget the synergies, the cost-savings, the cross-selling that CEOs tout when they announce one of these deals. Too many of the huge merger and acquisition (M&A) deals struck in the second half of 2009 and that are still being...China's banks need to raise $90 billion in capital through 2011
That’s a bit of a headwind. This week China’s big state-controlled banks announced plans to raise $11 billion through stock and bond sales to meet new capital requirements set by the country’s bank regulators. For example, Bank of China (BACHY.PK) has announced plans...What Bernanke should tell Congress but won't
According to forecasts by the Federal Reserve, U.S. unemployment will stand at a horrendous 9.5% at the end of 2010. That’s just about where unemployment stands today at 9.7%. So I certainly understand why U.S. Senators and Representatives will want to hear from Fed...Jim’s Daily Email Alerts:
Every post from Jubak Picks straight to your mailbox. And they're free!