Kudrna's Stock Market Talk

Quote of the Day:

An extremely powerful dynamic that has huge commercial and cultural implications is at play; namely that technology is enabling trust between strangers. We now live in a global village where we can mimmick the ties that used to happen face-to-face but on a scale and in ways that have never been possible before.

Rachel Botsman

Macro Overview

It’s Life Jim – But Not As We Know It

• Yikes! If the raving bull and Euro-nonchalant Jim O’Neill is getting the jitters then may be we all should! Remember this is the guy who told us he couldn’t understand what all the fuss was about with Greece. Who cares? He said, and I quoted in a comment 3 months ago, dismissing talk of Greece’s importance, afterall:

China creates the equivalent of another new Greek economy every 4 months, so you could write off Greece completely and within 4 months China has created another one…

• Anyway, this is what he said recently about Europe, according to Business Insider:

I find myself wavering a little about the US recovery story. While for now, I’m happy to stick with our above consensus 2.5 pct real GDP forecast for 2012, and I buy into the housing sector recovery and shale gas themes, as I have frequently argued, weekly job claims are not to be ignored. While hoping last week’s would decline again, thereby rendering the March payroll disappointment as “susceptible,” in fact, it rose to 380,000, providing support to those who argue the apparent economic strength of the Winter was artificially helped by the weather.

• Not quite so nonchalant now huh? But, in a sense, he was right. As I alluded to in my Spanish Imposition comment: the economies of Italy and Spain rank 8^th and 12^th in size compared to Greece which ranks in the 30’s (and falling)!
• However, let’s be clear, precedents were set with the Greek workout and conversely, as Mauldin pointed out (see yesterday’s comment) there are consequences to the reactions of authorities (e.g. the ECB’s LTRO) toGreecewhich may infect other Eurozone nations – particularly those already peering into the abyss.
• Spain’s auction went well… (ish)… I mean they sold the bonds they wanted to sell. The market was short going into the auction so it was expected to go quite well and they only had a few bonds to sell. But yields still went up… as did French bonds after the French auction. Which companies are most exposed to this type of action? Well probably the French banks who have exposure to both Spanish and French debts.
• My Chart of the Day is BNP – this is the 25 day price action. It has lost 25% of its value.

Market Overview

EBAY Spike An Insight Into The State Of Consumption?

• It was only a year ago I was writing about “Collaborative Consumption”. If you have not seen Rachel Botsman’s TED speech watch it – it’s a really good one.
• Simplifying things greatly, I believe that the rise of collaborative consumption is born out of two violently converging forces: rise of connectivity and internet renaissance and deterioration of economic conditions for the consumer. Consequently, I think we are about to be amazed at how creative and innovative humans will be at adapting and finding new ways to consume. The World is now one giant garage sale and there are massive efficiencies in consumption to be gained.
• There is also a longer term backdrop to this, in that globalization has meant that consumption economies are practically drowning under a glut of supply.
• Like the first green shoots one a wasteland, Ebay, GroupOn etc are just two examples of many businesses which have arisen from the wastelands of apathetic absolute consumption trends… which begs the question, if Ebay is seeing great benefits from a rise in this sort of internet-based consumption, is this necessarily a good thing for the domestic economy?
• Chart of the Day is Ebay – at a new high and up 200% in 3 years.

Chart of the Day

Events

Macro Events:

Update:

• Nothing Significant – other than to say remember the French Election this weekend!

Alerts:

• Nothing Significant

Corporate Events:

Results:

• General Electric [GE], LVMH [MC FP], Macdonald’s [MCD], Posco [005490 KS],

Dividends:

• Colgate-Palmolive [CL], Volkswagen [VOW GR]

Reading, Links:

Nothing Significant
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Tags: Consumption, Debt, Ebay (EBAY), Economy, Europe, Eurozone, France, Greece, Jim O'Neill, Macroeconomic News, Politics, Rachel Botsman, Spain, TED, TIPSTER

This entry was posted on Thursday, April 19th, 2012 at 10:57 PM and is filed under Economy/Macro/Politics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.