December 9, 2009 in Uncategorized
Jozi, Jozi. First it was the headwind Bernanke comments and then it was concerns over Greece and their credit ratings being downgraded. So, in short flight to the Dollar (is that really the “safe” trade?) and away from equities and commodities. Really? US Dollar at a one month high to the Euro, back at 1.47. Got that? The safe trade is the Dollar. So not the Rand, which weakened and not our equities markets which weakened and not resource stocks underpinned by the commodity prices (which weakened).
Resources lower by comfortably over a percent, platinum stocks were crushed, notwithstanding record Chinese motor vehicle sales. Session end the Jozi all share index closed at 26990, down 153 points. Banks closed better even as the Greeks had the worst possible day for their banks, see below for more details.
BHP Billiton have announced that they will be exiting that Ravensthorpe Nickel mine, they have managed to sell the asset to First Quantum Minerals, the Aussie subsidiary of the Canadian mining company. For 340 million Dollars. BHP Billiton took a huge impairment charge on this mine, to the tune of 630 million US Dollar. After tax 441 million. But the asset is now out of their hair so to speak. Not a great outcome.
Why this car is automatic
Why it’s grease lightning
OK, not really John Travolta and one of the favourites of all time, the ratings agencies are starting to ditch a A in front of the Greece credit rating. Why? Well, Greece’s deficit to their GDP has reached 12.7 percent and the ratings agencies are unconvinced that the country will be cut that very same ratio to just over nine percent. OK. Fitch is not convinced. As the FT points out, this is the first time in a decade that any ratings agency have given Greece anything but something starting with an A. BBB+.
So, all of that spooked people across the globe, the equities market in Greece on the broader measure closed down 6 percent, the top twenty down 7 percent. The banking index down nearly 8.8 percent. The biggest bank on the exchange, National Bank of Greece, down 9.95 percent. Yech. Check out the FT article on Greece and their downgrades.
OK, so there are problems in Greece, they have the worst credit rating in the Euro zone. There are a couple of other countries being called into question in the region, Hungary and Turkey spring to mind, but they are nowhere near some other basket cases worldwide.
I was scrolling through the money rates email that I get every day, all US data and was amazed to see that the Treasury bill auction yesterday saw the 28 day bill away at a 0.07 percent yield, 13 weeks at 0.05 percent and at least the 26 week yield spiked to 0.165 percent. Hah. Meanwhile the effective Federal Funds rate is 0.12 percent. The one year Libor rate is 1.01 percent. Cheap money. Yes. Not for everyone, the safety is still the dollar, not Greek Euro bonds.
OK, so we all admire that Chavez so much (!!??) that people will be so glad to give him a loan when Venezuela defaults. No. Chavez and his cronies have run such a brilliant job that Venezuela according to the guys at the Business Insider as the most likely country to default. That is right guys, not Lithuania or Latvia, Dubai or Pakistan, the biggest risk is the great example of nationalisation and the brilliance of Hugo Chavez in Venezuela. And thanks Hugo for the third term for your ultimate plan, complete economic failure, we have an example just up the drag. Was anything in the above paragraph anything but sarcastic?
So, if anyone can please send this link to the geniuses who once again have called for the nationalisation of the mines as the right way to go about trickling down wealth to many more folks who are have nots, then feel free to forward. I will be the first to admit that the wide gap between haves and have nots is nothing more than a disgrace in this country.
“We based our list on the U.S. Census Bureau’s Gini Index, which ranks income inequality in cities on a scale of 0 to 100. Imagine two islands, each with only five people, and a total income of $100,000. On one island, each person earns $20,000. This island has total income equality, and a Giniscore of 0. On the other island, one person earns $100,000 and the other four people earn nothing. This island has total inequality, and a Gini score of 100.”
“The United States as a whole had a Gini score of 46.9 in 2008. By comparison, incomes are more equal in Europe (the E.U. has a score of 31), and less equal in South America (Brazil has 56.7; Bolivia has 59.2)”.
For the world, see that Comrade Julius is right, the gap is huge between haves and have nots. Something that we have to address and come up with innovative ideas, nationalisation is a path to bankruptcy. Venezuela, well we sit and wait, but my sense is that it is coming.
There are still lots of folks who are worried about the recovery in the US, there have been very recent signs that the temporary hiring of folks on the US has been huge. Excuse the spelling, but you get what I am talking about.
Aw come on Ronald. Or come on folks who visit the big golden M in the sky. I cant tell a lie went for an ice cream with the family on Saturday afternoon as it was so very hot after a long swim. Unsize the share price please, down over two percent. Same store sales in the US and our region, plus Asia and the Middle East disappointing, no worries Europe, up 2.5 percent. The French love MCD’s, it is the companies second biggest market. But slowing sales in the US, that means that the US consumer is still reluctant to spend.
GE Capital. Remember the credit default swaps of GE soaring at the end of last year? I remember it well, the stock was falling in a heap as folks said hey, what is with that accounting? GE defended themselves, these assets are not for sale and neither should you worry, but as in most cases, sell first and then ask questions later.
New York, New York. Ronald McDonald and 3M weighed on markets, plus the Greece debt situation. Forget the unemployment rate lower and more jobs in the system, time to wring hands again. Again with materials and energy under pressure, stocks slid badly, the Dow ended off the worst levels but was down at 10285, down 104 points by the time the closing bell rang. The nerds of NASDAQ closed 16 adrift to 2172 whilst the broader market S&P 500 closed up shop at 1091, down 11 and a third of a point.
The Rand is last at 7.55 to the US Dollar, 11.12 to the Euro and 12.29 to the Pound Sterling. As folks run to the Dollar when they don’t know what to do, the natural sell is commodities, the oil price is lower at 73.24 Dollars per barrel, the gold price is lower at 1135 Dollars per fine ounce. The copper price also lower at 313 US cents per pound, the platinum price also lower at 1413 Dollars per fine ounce. Phew, a marked sell off across the board.
Lower start. And as Gump says that is all that I have to say about that.