I am very happy that the weekend has been a fairly news-lite affair. It does seem like the worst of last September’s panic is now over and we have moved to worrying more about the real economy than the financial system.
Areas getting hit hardest now include autos, retail, chemicals, retail and hospitality. Autos demonstrate the full measure of the dilemma before politicians regarding bailouts, subsidies, bankruptcy and recession. What I find particularly interesting about the auto sector is the divergence of fortune between Volkswagen, for example, and General Motors. See articles below highlighting the juxtaposition.
The Barron’s Roundtable issue came out yesterday. It was an interesting affair Notable, I thought, was Fred Hickey taking a bullish stand on technology, particularly stocks like Intel and Microsoft. I may have more to say about this later.
Anything other stories of substance we might have, you should find in our newsfeed.
GM has received inquiry about Saab brand: executive – Reuters (I find this story hard to believe given other indications that GM is having difficulties selling Saab but here it is.)
Saab vill ha EU-stöd – Dagens Nyheter (This Swedish article says that Saab is looking for a handout from the EU. It reminds one that the article above about Saab being sold may just be talk by GM execs.)
VW says set record in 2008 sales – Sydney Morning Herald (This is miles away from what is happening at GM)
U.S. Rejected Aid for Israeli Raid on Iranian Nuclear Site – New York Times (I am positively surprised by this story as it shows the Bush Administration using restraint. Hat tip – Yves Smith)
Medvedev takes apparent swipe at Putin – FT.com (This gives the lito those who thought that Putin was an autocrat without rivals)
Ukraine Signs Accord on Transit Gas With EU, Russia – Bloomberg.com (A good outcome so far)
Gaskrise: Slowakei nimmt Atomkraftwerk wieder in Betrieb – FAZ.net (This is a German article that basically says Slovakia is going nuclear and that will alleviate pressure from the gas row between Ukraine and Russia.)
Big chill: Bulgarians battle to keep warm – Guardian (on the other hand, Bulgaria is totally dependent here. Warning: this article is very slanted. So read with caution)
Acer Climbs as ‘Netbook’ Model Helps Keep Margin Firm – Bloomberg.com (This story shows divergence in technology, a notoriously cyclical sector.)
Obama’s shot in the arm is too small – Clive Crook, FT.com(Crook thinks the Obama stimulus will not be enough. I agree)
Swiss bank set to announce record loss – Sydney Morning Herald (UBS is set to write down a massive amount. Their woes make Switzerland seem more like Iceland every day. They need to stop the hemorrhaging.)
Witmer Finds Value in Pockets of the Market – WSJ.com (This is one of the Barron’s Roundtable pundits)
The bond bubble has long since burst: investors ignore this at you peril – Ambrose Evans-Pritchard, Telegraph (You may recall that I think Treasuries are a bubble. Nevertheless, I see them going higher. This article argues the bubble has already come unstuck — and for other G-7 debt as well. I should note that I would NOT go long treasuries given the unfavorable risk/reward, but because I see them gong yet higher, I would not go short here either.)
Treasury told to relax capital rules – Telegraph (Very dubious stuff here in the UK. Relaxing rules is just setting them up for more trouble down the line)