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Jim O'Neill Explains Global Economics Through The One Thing He Knows Well: Football
The Red Knights' attempt to buy ManU may have ended, but that won't curb the Goldman's BRICster's enthusiasm for all thing football. In his most recent Rose-Glassed commentary, Jim O'Neill explains why the world is great in 8 simple world cup parables, for all the ADDed traders who spend about 10 times as much time watching football than actually trading. Yet even the permabull is unable to contain himself in calling out the EU, ECB and the IMF in their Stress test hypocrisy: "The UK, the economy, the FSA, fiscal policy, and (oh dear), the team plays again tomorrow……..With a bit of luck, I wont be able to watch the match against Algeria which, if it is anything like the last one, will be much worse than a Spanish bank stress test…." Jim, you missed the news that according to the regulators in your favorite Europe, Santander is the healthiest bank in Europe. You have nothing to worry about: England should win by the same credible one thousand-nil, as the STD news.
The World, and its Footie Cup
Well, every team has now played at least one game, and so far, Diego Forlan is the star of the competition…….in fact, it seems as though quite a few ex United players are having a good time,…….( Heinze too)….In our 2010 publication, we discussed in great scientific detail, the link between the World Cup and football, as we do every 4 years. We didn’t quite expect that to mean that Germany would start off this tournament so well, all of Club Med so poorly ( incredible for Spain), and that the Latam and Asian teams would also generally start so well. I guess it really does mean that the World economy is driven by footie……. Anyhow , I shall devote my piece of what I have seen of interest in recent days , completely in the context of football in respect of this remarkable correlation;
1. Russia. Now of course , here is the 2nd of the BRICs that actually is nuts about the game and has not qualified at all. I am off to the St Petersburg Forum tomorrow for the weekend, it will be interesting to see whether they are going to do something about their failure to qualify. Is it confirmation that the R no longer should be in BRIC, or is it just a temporary lull before they prepare to win it on home soil in 2018? I suspect the latter, at least their preferred strategy. ( and by the way, any silly media people that pick this up, of course we are not dropping the R in BRIC, on the contrary, Russia is the star of 2010).
2. GS-MAP for identifying the importance of data as it is released. As I mentioned in a separate email, we have now expanded our MAP scores to all the developing world, so that each data release will be judged by both its importance, and the degree of surprise. This is an important new development for us. ( perhaps we should do it also for the remaining 3 weeks of the World Cup for each game. Then we could ask, was North Korea’s result against Brazil a higher score than Switzerland’s crushing against Spain?)
3. Spain. More stress or less? In addition to yesterday’s major surprise on the football pitch, the country has become front and centre of the EMU focus. It appears as though the Spanish authorities are going to publish a “ stress test” type review of their financial institutions. This is a really good idea, not least as according to our analysts, it should calm some of the more outlandish talk out there, and possibly stop the whole topic. Now if they don’t win their next game, I can think of quite a few more stress tests if Spain flunks its next game……..perhaps we could suggest a condition ahead of their next game? No victory, no more outlandish financing for Real to buy everyone else’s best players?
4. The UK, the economy, the FSA, fiscal policy, and ( oh dear), the team plays again tomorrow……..With a bit of luck, I wont be able to watch the match against Algeria which , if it is anything like the last one, will be much worse than a Spanish bank stress test…. After all the tough talk of fiscal retrenchment, and splitting up banks, changing regulators, etc, etc, no pressure Waza , you need to cheer us all up! Mind you, looking at the latest numbers, retail sales a few minutes ago, it looks still to us as though the UK economy is doing just fine…..( as an aside, it could be argued that when we won in 1966, the exuberance that followed contributed to the circumstances which led to the infamous IMF episode of 1967)
5. Brazil at least won, unlike a number of other fancied teams, albeit against North Korea. ( very low MAP score for Brazil). This follows that incredibly strong Q1 GDP number last week. 9pct year on year, over 11pct quarter on quarter annualized. Maybe they will win the World Cup throughout this decade……..
6. India reported a gangbuster industrial production number Monday, much higher than expected. And their stock market is up small for the year. Is this a harbinger that India will actually have a team in the World Cup finals in Brazil in 2014?
7. The US. It really is quite fascinating how disinterested the US seems to be in the beautiful game. Especially as their track record against England, the game’s originator, is rather awesome going back 50 years now. Imagine what happens when you start to take it seriously? The thought is most unappealing.
8. Back to Europe and EMU land finally. Industrial production positively surprised this week, despite all the market tremors. Does that mean the winner will come from Europe? Is it going to be Germany? Well before you all get carried away, the ZEW index the day after that stellar IP number actually might suggest the German team has peaked too soon? Here is a question I shall leave you with, especially for all those that have observed the first week struggle for the EMU “periphery”. Are you going to trade CDS spreads based on the results?
After the first week, the tournament resembles 2002 so far, i.e. a bit dull, and some of the “lesser” teams doing well. In that competition, 2 real outsiders, Korea and Turkey got to the semis. For now, I am going to stick with our prediction of Argentina, Brazil, England and Spain, but clearly two of them have got to pull their socks up…..and as a hunch I have had all along, perhaps Maradona will be the happiest guy around by mid July.
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Looks like he knows Fuck all about Football as well. Surprise, surprise. Well he was part of the "Prawn Sandwich" eating crowd at ManU, so that figures.
9. China: Taking steps to play with the big boys through developing local talent(s):
http://online.wsj.com/article/SB10001424052748704289504575312560305201680.html?mod=WSJ_hps_LEFTWhatsNews
I'm generally not a violent person but given the chance I would knock the livin shi* outta Jim O'neill.
Sorry folks for my lack of containment, but the fu**er rubs me the wrong way.
>>I need a time out<<
Whats worse than a Spanish bank stress test?
A Harrisburg IOU?
TD, could you provide an explanation via someone who knows the tv show "Glee" well? Football just doesn't cut it for me.
Those EURUSD bullish warnings have strengthened further today.
Vice versa for the USD index of course.
It seems the current EURUSD downleg has ended.
http://stockmarket618.wordpress.com
This article would have made sense if they hadn't printed it.
This guy is such a fucking douchebag.
That's a funny hat.
England and Spain in the semis? Jim O is living on hopium. Cannot see bunch of overpaid fags getting past ze Germans. As for Spain, well, they said it themselves "we are not Greece" - after yesterday's game between Greece and Nigeria, I think maybe Spain has less backbone than Greece (which deosn't have much and needed to depend on provocation to get a Nigerian red-carded to prevail, but still the greeks scored goals, which is what Spain could not do against les Suisse). He is correct though, that the world cup mimicks life, I mean the economic crisis - everyone is on hopium, even after the results are known.