Sunday, 16 February 2014

Stories we should be thinking about

Ahead of the new working week, here are a few finance-centred stories before the markets open on Monday, to think about:

Macro matters:

My MUST READ of the weekend was this piece on Chinese trust fund challenges /shadow banking issues in 2014 and beyond.  An important and relevant risk/volatility factor for China/the world in 2014 
Talking about China, I thought this was an interesting chart about net omissions in China's balance of payments position.  Volatility going up = uncertainty about China's statistical predictability rising too
"The path of monetary policy, the path of interest rates is going to be calibrated very carefully to ensure that only when we see sustainable growth in jobs, in incomes and in spending, will we make adjustments...We can responsibly take our time and only adjust interest rates once more slack has been cut" - Mark Carney, Governor of the Bank of England in a UK breakfast TV interview
Sounds like someone is not in a hurry to raise interest rates...
Meanwhile, in the US, spending continues to out-pace incomes. Hmm!
Will the term 'bankrupt' really be replaced by 'debt adjustment'?  This link says soon it will be enshrined in European law... Who knew that the word bankrupt is originally from an Italian phrase?
Greece though takes a step further away from bankruptcy as Seeking Alpha report that 'Greece achieved a primary budget surplus - which excludes interest payments - of over €1.5B ($2.1B) in 2013, well above an initial forecast of €344M that was made in October, Prime Minister Antonis Samaras has said. Greece also achieved the milestone one year ahead of the target set by the international community as a condition for additional debt relief'.  Well done them...Germany can authorise the forwarding of more money now
Thoughts from a Chinese think tank: 'By 2030, China and India are expected to account for half of the world's oil consumption, whereas the US, will likely be the center for world oil production by 2020'
And the least affordable homes in the US are in...Honolulu

bitcoin latest: 'A CoinDesk poll of nearly 3,000 readers has found that Mt. Gox customers have been waiting months for their withdrawal requests to be fulfilled, despite being ‘verified’ or ‘trusted’ account holders. Poll respondents describe frustration with the exchange’s customer service, calling it slow, opaque and providing “canned responses”.'  bitcoin still having issues...
Interesting chart on top vacation destinations with the EU:

A thoughtful read here entitled 'Investing successfully is really hard'

Of course...but my view would be (1) everything in life is 90% perspiration, 10% inspiration and; (2) read 'The Money Game' and understand that the investment world is a game...and has got to be enjoyed
Prepare to be surprised on what 3-D printing can do (link here).

Company-related observations:
How is earnings season going by the way?  A very comprehensive study (quite US-centric) is here.
Google acquires Israeli security firm SlickLogin for their technology which streamlines secure access to websites.  Cyber security still a strong theme
Talking about Google...growing dichotomy between the average selling price of Apple and Android (Google operating system) phones:  

Potentially bad news for Centrica shareholders following further British Gas customer losses.  Link here
As per The Sunday Times, the Ruias, one of India’s most prominent business dynasties, are this weekend putting the final touches to a takeover bid for Essar Energy, the power company they floated in 2010. It is thought the deal will be pitched at no more than 75p a share, a fraction of the 420p paid by investors who bought in four years ago. Frustrating as recently been buying the shares seeing value...
Again via The Sunday Times, Rolls Royce faces a showdown with investors over how it accounts for lucrative contracts to service aircraft engines. Investors have been demanding that it explain the accounting behind its TotalCare maintenance packages. The company will now hold a briefing on the issue at July’s Farnborough airshow.
Interesting chart for any Facebook shareholder or user...
 Is China 'falling out of love with Oreo'? (link here). Something for Mondelez shareholders to think about!

And finally...

Every wondered what a drug overlord's cash pile looks like?  This one was seized in Mexico... And the amount?  I have seen suggestions at anywhere between US$200m and US$22bn. 

Have a good week

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