Archive - Jun 2010 - Blog entry

When foreign labor costs reach half of those at home, manufacturers quit exporting jobs. Chinese wage growth at the current rate takes them up to half our minimum wage in only five years. Recent indications that the Chinese will allow the Yuan to float, and therefore go up, will only accelerate this trend. (FXI), (EWY), (VNM),

For the past 15 months, Michael Sabia, chief executive of Caisse de depot et placement du Quebec, has had his hands full cleaning up the mess left by his predecessor Henri-Paul Rousseau. Not only was there a tarnished image to fix, but Mr. Sabia's been busy cleaning up its balance sheet following the nearly $40-billion loss the Caisse suffered in 2008.

A young friend asked me yesterday, “What on earth does negative growth mean?” and I had to laugh because it really is a ridiculous term dreamed up by political economists to put a positive spin on really bad news. I had actually never given the term any serious thought until then. “It means,” I said, “economic contraction and recession.” It really is no wonder the kids cannot figure out what is going on with all the nonsense terminology flapping about.

It’s generally understood by all that something that’s taken by force has much less value compared to the same thing given freely and willingly. Never again consider yourself powerless when it’s clear you posses something of such immense power and wealth that it’s constantly being manipulated and seduced from your hands.

He answered this question in 2002. He has already done most of those things. There are still a few arrows left in his quiver. They all have poison tips and will likely kill us.

Hmmm...

The best we can expect is an anemic H2 GDP growth rate of only 1.5%. The private sector has flipped from spending 4% of GDP to saving 7%, a massive deflationary swing. I’m sure Ben Bernanke is listening.

As the truth unfolds concerning the financial condition of the UK, those states in the Mediterranean south don't seem so bad now, do they???

Politicians at the G20 be warned: hell hath no fury like a pensioner scorned.

The ink of the ruling against the offshore drilling moratorium is not even dry yet, the media is already jumping all over that Judge Martin Feldman is "greased with oil investments", says Mr. Christopher Helman, an Associate Editor of Forbes.

Where are we in the weak Euro-strong Dollar cycle?

Regions Bank looks fairly weak with a negative Net Operating Income figure in 5 of the last 6 quarters. That said, they do have some good things going for them.

So early in the morning, Bloomberg runs a story, "Sales of Existing Homes in U.S. Probably Climbed on Tax Credit". A few hours later, the housing report comes out and Bloomberg then runs "Existing Home Sales in U.S. Unexpectedly Fell to 5.66 Million Rate in May". Hmmm! BoomBustBlog readers saw this coming way back in March with "It’s Official: The US Housing Downturn Has Resumed in Earnest". Thus far, we've been right on the money. Hey Bloomberg editors, I'm available if you need me...

A visit to the worst commercial real estate disaster in human history. Why it is cheaper to spend a weekend in Sin City than it is to stay home.
An 80% occupancy rate, only because 20% of those rooms have been mothballed and taken off the market. Thanks for the great weekend, Kirk!

Chasing bigger investment returns, the agency that manages Florida's $113.8 billion public pension fund wants to make far riskier investment bets.