US investors pile into European equities – FT.com
This speaks to the relative value of Europe that I have been discussing. Especially in the context of an emerging reflationary trend, it suggests an overweight European position. Clearly, the liquidity is headed that way. Where are the Japanese on this I wonder.
“US investors have pumped more money into European equities than at any time since 1977 in a big vote of confidence for the region and its ability to recover from the sovereign debt crisis.
Pension funds and other big US groups invested $65bn in European stocks in the first six months of 2013, the highest in 36 years over that time period, according to research compiled by Goldman Sachs’ European strategy team from US Treasury data.”
This is the Nokia Lumia 1520, a giant 6-inch 1080p Windows Phone | The Verge
So WIndows Phone is ging for the big handsets now too, just like Android. The rumour is that Apple has got on this bandwagon as well.
Plan der EU-Kommission: Griechenland darf verfallene EU-Mittel abrufen – SPIEGEL ONLINE
According to Wirtschaftswoche, a German business magazine, the EU plans to use the unused rescue funds still available for another Greek bailout when the time comes. Moreover, Greece is eligible for old EU structural funds from 2000 to 2006 in the sum of 1.14 billion euros. My understanding is that the likely size of a renewed Greek bailout is in the order of 10 billion euros
Amazon: No Phone Launch ‘This Year’ and ‘Would Not Be Free’ – jessica lessin
“A spokesman for Amazon.com Inc. said Sunday the online retail giant won’t launch a smartphone this year, and that if it did launch one in the future, it “would not be free.”
The statement by Amazon came 48 hours after we reported that the company was considering introducing a smartphone for free to consumers, according to people with knowledge of its smartphone development efforts.
The company previously declined to comment to us.”
Loan Size to Be Cut for Fannie, Freddie – WSJ.com
“The proposed move is designed to wean the mortgage market off government support and allow the market for non-government-guaranteed mortgages to take a bigger role. But critics argue that any such move will shrink the pool of eligible home buyers, stunting the nation’s housing recovery.”
Euro zone sentiment turns positive for first time in over two years | Reuters
Finally, I think we are seeing what I have been predicting for a while now, a turn in the euro zone. The thing is, remember that none of the structural problems are gone. This is just a cyclical turn. Let’s see how durable it is. Sentiment suggests it could last.
“”This is the second strongest rise of the indicator since its start in 2003,” Sentix analyst Sebastian Wanke said in a statement. “It’s a stunning coup for the euro zone.””
Summers Would Spark Confirmation Fight of the Century – Bloomberg
“Throughout the Federal Reserve’s 100-year history, the Senate has generally deferred to the president’s choice of leader for the central bank. If Larry Summers is picked for the job, however, the debate around his nomination would be unlike any that has come before. “
China’s Credit Levels Echo U.S. Crisis – WSJ.com
“China’s corporate and household credit has risen quickly, from around 120% of gross domestic product in 2008 to more than 170% today, according to Bank for International Settlements data, which does not include debts owed by financial companies.
The U.S. in its credit boom rose from 143% in 2001 to 177% in 2008. Japan had a similar run up in the decade before 1989. Economists say quick jumps in debt—rather than absolute levels—are the determinants of future crises. “
BBC News – Japan’s economic growth data revised higher
“The economy expanded 0.9% during the period, compared to the previous three months. That translates into an annualised growth of 3.8%.
The initial estimate of quarter-on-quarter growth was 0.6%. “
BBC News – Chinese exports rise more than forecast in August
“Shipments rose 7.2% during the month, from a year earlier. Most analysts had expected a figure closer to 5.5%.
The numbers come just days after data showed that manufacturing activity in China hit a 16-month high in August.”
China Inflation Stays Subdued as Producer-Price Drop Eases – Bloomberg
“China’s consumer inflation stayed below target for an eighth month while factory-gate prices fell by the least in six months, reflecting an economic pickup that leaves room for officials to add stimulus if needed.
The consumer-price index rose 2.6 percent, the National Bureau of Statistics said in a statement today in Beijing, matching the median forecast in a Bloomberg News survey. The producer-price index dropped 1.6 percent in August, the 18th straight decline, after July’s 2.3 percent decrease. “
Merkel Sees Danger SPD May Break Vow and Ally With Left – Bloomberg
““To those who want to be sure that there won’t be experiments, that there won’t be an attempt to make red-red-green a reality somehow, I say: give all your votes to the Christian Democratic Union,” said Merkel, who’s also chairman of the CDU. Red-red-green are the colors of Germany’s SPD, the Left Party and the Greens. The Left will today announce its terms for joining an alliance with the SPD and Greens. “
Of course NSA can crack crypto. Anyone can. The question is, how much? | Ars Technica
“Making and breaking encryption is one of the main roles of a signals intelligence agency. That NSA engages in such activities is not surprising. Aspects of this work aren’t even secret: NSA involvement in the development of some cryptographic standards was legally mandated and openly acknowledged.
What we don’t know, in general, are any specific details. “
China August exports beat forecasts, point to stabilization | Reuters
“The Customs Administration said on Sunday that exports rose 7.2 percent in August from a year earlier and imports rose 7 percent, leaving the country with a trade surplus of $28.6 billion for the month.
The figures compared with market expectations in a Reuters poll of a rise of 6 percent in exports, an 11.3 percent rise in imports and a trade surplus of $20 billion.”
Open Sourcers Pitch Secure Email in Dark Age of PRISM | Wired Enterprise | Wired.com
“With the specter of government surveillance hanging over this post-PRISM world, people are beginning to wonder if the idea of secure email is complete nonsense. “
Greek industrial output slumps in July, deflation takes hold – chicagotribune.com
This is pretty bleak:
“Greek industrial output recorded its steepest decline in 16 months in July, weighed down by falling by declining electricity, mining and manufacturing production, data from the statistics service showed on Monday.
Consumer prices continued to deflate, the data agency also reported.”
ekathimerini.com | Greek consumer prices fall 1.3 pct y/y in August
“Greece stayed in deflation territory for the sixth month in a row in August as consumer prices fell 1.3 percent on an annual basis after a drop of 0.7 percent in July, statistics service data showed on Monday.”
Japan must be brave – it is time to put up taxes – FT.com
This is exactly why Japan is in a pickle. As soon as there is any growth there, the deficit hawks come out to back raising taxes to get the enormous debt burden reduced. This is how it has happened time and again.
The Fat Pitch: What Will Drive Equities Higher In The Next 12-Months?
Good post on the U.S. equities market and why mltiple expansion has been a driving force for a while. The question is whether this can continue
Don’t bet against Bernanke’s inflation quest – FT.com
“No doubt it has taken Mr Bernanke far longer to dispel deflation concerns, but I believe he will ultimately be successful in his quest for higher inflation, and my call for higher long-term rates is a new secular view.
Unless you expect deflation or an economic relapse, the timeline for how long bond yields can remain negative after adjusting for the growth rate in nominal gross domestic product, is going to be put to the test.
In fact, this process of bond yields normalising to the trend in nominal GDP began three months ago and is ongoing. Years from now it will be clear that the 1 per cent handles that inflation and 10-year Treasury yields hit at their lows as a secular turning point were the mirror image of those 15 per cent handles just over three decades ago.”
German Helicopter Searched For NSA Listening Post In Frankfurt – SPIEGEL ONLINE
“Under orders from Germany’s domestic intelligence agency, a federal police helicopter conducted a flyover of the US Consulate in Frankfurt, the government in Berlin has confirmed. Officials were apparently searching for surveillance equipment.”
A trap of the president’s making – FT.com
“In the next 10 days or so we will find out if Mr Obama will get the chance to recapture his presidential mojo. That – and the fact that he would share the fallout with Congress for whatever complications a Syria strike would present – is the best that can be said for a “Yes” vote. A “No” would irretrievably weaken Mr Obama both at home and abroad. It would qualify as one of the costliest gambles in US presidential history.
How exactly did Mr Obama reach this point?”
Analysis: Obama growing isolated on Syria as support wanes | Reuters
“White House efforts to convince the U.S. Congress to back military action against Syria are not only failing, they seem to be stiffening the opposition.”
No country is safe from emerging market meltdown – Outside the Box – MarketWatch
“In the 1994 ‘Great Bond Massacre’, holders of Treasury bonds suffered losses of around $600 billion. Trading losses led to the bankruptcy of Orange County in California, the effective closure of Kidder Peabody and failures of many investment funds.
The Fed’s move triggered a crisis in Mexico and across Latin America. It precipitated the Asian monetary crisis, requiring International Monetary Fund bailouts for Indonesia, South Korea and Thailand. Asia took more than a decade to recover from the economic losses.
Repeat underperformance
There’s reason now to fear a rerun of this economic collapse in the emerging markets, triggered by rapid capital outflows and a rising U.S. dollar. “