Noted for your morning ruminations or procrastinations – take your pick.
These are various news items that I have read over the weekend and early Monday morning in preparation for the trading day. I made notes as I read these articles.
- The new world of business – Finally, even in regions where growth is uneven, there are emerging markets where improved governance provides value. Latin America, Mexico, and Colombia offer opportunities that Brazil and Chile, let alone Argentina and Venezuela, cannot.
- Big Oil needs to go on a diet now that the $100 a barrel party is over – Pretty much all the oil companies announced cuts to their 2015 capital plans to adjust to lower oil prices. Shell said it would defer or cancel about 40 projects worldwide, knocking about $15 billion off their capital spending plan over the next three years. ConocoPhillips announced cuts of around $2 billion for its 2015 spending plan, which is on top of the $2.5 billion in cuts the company announced last year, equating to a 30% decrease in overall projected spending to $11.5 billion. Meanwhile, Chevron announced Friday morning it would cut capital spending for the year by 13% to $35 billion.
- No more debt forgiveness for Greece, says Angela Merkel – Earlier, Wolfgang Schauble, the German finance minister, delivered the same message as the Chancellor. On Friday, he said there was no point “arguing” about a Greek debt write-off, adding: “What’s more, we are difficult to blackmail.”
- The most profitable US companies – Apple reported record quarterly net profits this week, prompting excited headlines and comparisons to the economic output of entire countries. But how do Apple’s profits compare to other highly profitable US companies through the years? We take a look back, starting from 1954.
- Abkhazia: a new El Dorado on the Black Sea coast? – Thousands of immigrants attracted by a construction boom is hardly front page news – but what if the latest El Dorado is an unrecognised and embargoed republic ? While the west focuses on Russia’s intervention in Ukraine, another disputed region under Russian dominance is experiencing a quiet boom in its construction sector. Despite widespread poverty among much of the local population and years of embargo – by the CIS until 2008 and by Georgia and many others now – the situation in Abkhazia is such that thousands of migrant workers are flocking to this de facto statelet.
- Greece Sets Up Cash Crunch for March Telling EU Financial Bailout Is Over – The standoff could see Greek banks effectively excluded from European Central Bank liquidity operations and the government with no source of funding, having rejected European aid while still shut out of international markets. Outgoing Prime Minister Antonis Samaras said last month the government may run short of financing as early as March.
- On BBC tv NEWSNIGHT – As a fan of the BBC, I must say I was appalled by the depths of inaccuracy in the reporting underpinning this interview (not to mention the presenter’s considerable rudeness). Still, and despite the cold wind on that balcony, it was fun!
- An Unconventional Truth –
This assortment of “Austrian” economists, radical monetarists, gold bugs, and Bitcoin fanatics has repeatedly warned that such a massive increase in global liquidity would lead to hyperinflation, the US dollar’s collapse, sky-high gold prices, and the eventual demise of fiat currencies at the hands of digital krypto-currency counterparts.
- Demographics and GDP: 2% is the new 4% –
It isn’t a surprise. Other than the early period with a boost from government spending, the growth in GDP has been tracking the growth in the labor force pretty well.
- How negative can interest rates go? – If the central banks were to drive the yields on bank deposits too far into the negative zone, banks and eventually their customers would choose to hold cash instead of the negative yielding deposits . Ultimately, if pushed too far, the entire economy would become a cash based system. That is the real constraint on the ability of the central banks to set negative interest rates.