Germany posts
FeedPosted Nov 13th 2009 3:40PM by Joseph Lazzaro (RSS feed)
Filed under: International markets, Good news, Recession
Europe, font of western civilization, is growing again. The euro-zone officially entered a recovery with GDP in the 16-nation zone increasing 0.4% in Q3 compared to the previous quarter, Eurostat, the European Union's official statistics agency,
announced Friday. Europe's economy had contracted for the five previous quarters.
Meanwhile, growth in the 27-nation E.U. (EU27), which includes nations that aren't members of the euro monetary system, increased 0.2% in Q3.
Continue reading Ray of light: Euro-zone GDP increased 0.4% in Q3
Posted Nov 13th 2009 11:00AM by Tom Johansmeyer (RSS feed)
Filed under: Competitive strategy, China, Russia, McDonald's (MCD)
For McDonald's (MCD), 32,000 restaurants in 100 countries isn't enough. The quick service restaurant announced in a meeting with Wall Street analysts that it will open 1,000 new restaurants next year. Most will be in the United States, China, Australia, Russia, Germany and France. Don't expect to see any in Iceland, though, as the company is closing its three restaurants there and has no plans to return in the near future.
The company is also looking to rehabilitate the interiors and exteriors of another 2,300 locations in 2010 – approximately half of them in Europe. In all, this should cost around $2.4 billion. For 2009, McDonald's expects its capital expenditures to reach $2.1 billion on 900 new restaurant openings. The chain is increasing its rate of new restaurant openings by more than 10% from 2009 to 2010.
Continue reading McDonald's to add another thousand golden arches next year
Posted Nov 9th 2009 5:00PM by Joseph Lazzaro (RSS feed)
Filed under: International markets
We would be remiss if we did not recognize Monday's 20th anniversary of the fall of the Berlin Wall, on November 9, 1989.
Dignitaries from around the world, including German Chancellor Angela Merkel and former Soviet Leader Mikhail Gorbachev, gathered Monday for ceremonies recognizing the event that marked the
beginning of end of the Cold War, and the start of the reunification of Germany. The end of the Cold War became official with the dissolution of the
Soviet Union on December 25, 1991, a day that also marked the start of the Russian Federation.
The biggest impact of the end of the Cold War on investors? Certainly the emergence of market economies in former communist states in Eastern Europe, and the added industrial, and buying power that a unified Germany offers, have to rank at the top. Closely behind those would have to be the emergence of both the euro-zone and the European Union as a regional economic power: Europe, no longer having to fear the expansion of communism, could more-thoroughly concentrate on the development of the continent's economy.
Continue reading Twenty years ago today, economic freedom returned to Eastern Europe
Posted Jul 7th 2009 10:00AM by Jim Cramer (RSS feed)
Filed under: China, Market matters, Caterpillar (CAT), United Technologies (UTX), Eaton Corp (ETN), Cramer on BloggingStocks
TheStreet.com's Jim Cramer says a data point out of Germany gives him cause for hope. I have seen the future, and it is German manufacturing orders! We are always looking for totems when we are teetering on the second dip, and a number that came out today from Germany showing a 4.4% increase in May manufacturing orders -- the best in two years -- ignited the European markets and should do the same for ours.
It's been no secret that our economy's doing nothing while the Chinese economy does all the heavy lifting. But what happens if Europe, which is supposed to be so, so sick, gets better? I don't know a soul who believes that Europe isn't worse than the U.S., with their banks being in far worse shape and their governments showing no signs of being worried about anything but Weimar.
Continue reading Cramer on BloggingStocks: Europe may be an unlikely savior here
Posted Mar 2nd 2009 8:00AM by Joseph Lazzaro (RSS feed)
Filed under: International markets, Eastern Europe, Recession, Financial Crisis
Following the instructions of President John F. Kennedy, "I appreciate candor almost as much as I appreciate good news," we're moving forward with candor, however unpleasant.
Investors take heed: the U.S. recession most likely just got longer.
The European Union, led by Germany, has rejected Eastern Europe's pleas for an aid package of about $228 billion, citing budget concerns in their own Western European countries, Bloomberg News
reported Sunday.
The E.U.'s failure to provide aid and fiscal stimulus to Hungary, the Czech republic, Slovakia, Romania, Bulgaria, Latvia and Poland will hurt both the U.S. and global economies.
Continue reading Eastern Europe aid plea rejection likely to delay Europe, U.S. recoveries
Posted Feb 18th 2009 5:20PM by Nancy Zambell (RSS feed)
Filed under: International markets, Exxon Mobil (XOM)
I am the Global Editor at MoneyShow.com and each week I interview an investing expert. This week, I spoke with Heiko Böhmer, editor of Privatfinanz-Letter, who says it's not yet time to return to the German stock markets.
Q. The German economy entered a recession in the third quarter of 2008. Recent projections estimate that it will shrink by 2.25% this year, its worst performance since World War II. With that in mind, which, if any, sectors do you see actually growing in 2009?
A. It's not easy to find growing sectors in this tough economic environment. But I think that utilities and basic goods will show some growth this year. On the other hand, it will be very tough for the most important German sectors-cars and car suppliers.
Continue reading Global Q&A: Cautious on Germany and Europe
Posted Jan 15th 2009 12:02PM by Joseph Lazzaro (RSS feed)
Filed under: International markets, Forecasts, Recession
The impossible has happened. The Chicago Cubs won the National League pennant?
No, ECB President Jean-Claude Trichet is now in accommodation mode.
Trichet, a legendary inflation hawk, presided over the European Central Bank as it
cut its benchmark interest rate by 50 basis points to 2% Thursday.
It was fourth consecutive monthly interest rate cut for the ECB and it matches the record low interest rate reached during the 2003-2005 period. However, Trichet, at the ECB's regular post-meeting news conference, indicated monetary policy makers will avoid a cut in interest rates at its next meeting in February,
Bloomberg News reported Thursday.Economist David H. Wang said there's a bright side and a downside to the ECB's most-recent action, and he isn't so sure the bank is done cutting rates, even with a prospective February pause.
Continue reading Trichet's (belated) two-step: ECB cuts key interest rate to record low 2%
Posted Jan 14th 2009 1:16PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, China, Economic data
Amid the global recession there has been one sign of economic growth, albeit retroactive growth.
China has revised its estimate for 2007 GDP growth to 13% from the previously-released 11.9%,
the Associated Press reports. With the revision China's 2007 GDP totaled $3.5 trillion, passing Germany's $3.3 trillion for third place, globally. (The United States is first, followed by Japan. And I should note that Germany is part of the European Union, and if the E.U. were ranked collectively, it would be the largest economy in the world, followed by the United States, Japan, then China.)
Economist David H. Wang, a China expert, said it's not unusual to see a large change in an emerging market nation's GDP estimate given the frenetic nature of a developing economy's expansion.
"Developing markets are characterized by overbuilding, excesses, inflation, and isolated shortages, and this has been the case in China. We know that growth had been strong up until the financial crisis. My reading now is that China's GDP is currently growing at a 7-8.5% annualized rate," Wang said. "Like the rest of the world, there's been a pronounced slowdown in China, but that doesn't blot out the impressive growth registered from 2003 to 2007."
Continue reading China ups 2007 growth estimate, now world's third largest economy
Posted Nov 19th 2008 4:45PM by Peter Cohan (RSS feed)
Filed under: Goldman Sachs Group (GS), Morgan Stanley (MS), Financial Crisis
Banks around the world have been raising capital in the last few months. If the market is efficient, then the cost of capital for these banks should tell us something about how risky they are. Based on the relative cost of capital of banks in the U.S. compared to those in France, Germany and Switzerland, the world's riskiest banks are right here in the good old USA. The safest banks? French ones.
How so? Here is the rough (due to different capital structures) after-tax cost of capital for the banks in different countries:
- U.S.: Morgan Stanley (NYSE: MS) is paying a 17% interest rate and Goldman Sachs Group (NYSE: GS) pays almost 17%
- UK: Barclays pays 16%; HBOS, Lloyds TSB; and Royal Bank of Scotland pay about 12%
- Germany: Commerzbank pays 10%
- Switzerland: UBS's interest rate is relative bargain of 9.9%
- France: BNP Paribas, Societe Generale, and four others pay the lowest rate -- 5% -- for their capital
Maybe there's some sort of trading opportunity to short U.S banks and go long French ones. C'est la vie!
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing, will be published by Portfolio on December 26, 2008. He has no financial interest in Goldman or Morgan Stanley securities.
Posted Nov 4th 2008 12:52PM by Jonathan Berr (RSS feed)
From the 'what goes around comes around' department: publishers in Germany are reporting that interest in the ideas of Karl Marx is surging.
Small academic publisher the Karl-Dietz Verlag, has
sold 1,500 copies of Marx's Das Kapital, including 200 in September alone. Other book stores have seen sales of the classic and deadly dull tome skyrocket by 300%. I realize that these figures are not indicative of a best-seller in the order of the
Da Vinci Code, but they are interesting nonetheless.
The current economic meltdown has up-ended people's notions of capitalism. Conservatives have derided the $700 billion rescue of Wall Street as socialism. In many ways, they are right. The government is intervening in the market and choosing winners and losers, something that was never supposed to happen under the free market.
Though I have not seen any figures, I bet that interest in Marx is probably increasing in the United States as well. This may shock many investor,s but many people have grown increasingly anxious every time they view their 401 (k). The American dream has turned into a nightmare for many people struggling to pay their bills and facing foreclosure.
For some people, Marx seems to offer people the answers they are seeking. His ideas have been discredited by decades of often-brutal history of countries that lived under Communism. It's no accident that the United States won the Cold War.
Posted Oct 20th 2008 4:50PM by Bruce Watson (RSS feed)
Filed under: Housing, Financial Crisis
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I've always imagined that one of the great joys of belonging to a Socialist group would be not worrying about the well-nigh incomprehensible fluctuations of the stock market. While other people may lose sleep over the screaming highs and soul-crushing lows of the capitalist economies, hard-core socialists just have to worry about plebian things like political purity, the potato harvest, and whether or not the shops currently have razor blades in stock.
With that in mind, I feel somewhat sorry for the Provisional Irish Republican Army. While they rejected the Communist tendencies of the "Official" IRA in the 1960's, they still
self-identified as a "non-Marxist Democratic Socialist" organization. However, when they signed a ceasefire in 1997, they rebelled against this identity and invested their funds in the
property market and, subsequently, in high-high-dividend deposit accounts in the U.S. According to some
reports, Wall Street's recent meltdown may have cost the former terrorist group as much as $274 million.
Needless to say, IRA financial advisors are currently "in a state of panic," as they are watching their funding (and potential political power) evaporate. There is no word yet on whether or not Baader-Meinhof, Shining Path, or Black September were invested in the market!
Posted Oct 13th 2008 5:09PM by Joseph Lazzaro (RSS feed)
Filed under: International markets, Forecasts, Federal Reserve, Financial Crisis
Gosh. Golly. Gee Whiz.
That was the reaction Monday of traders and economists to the European Union's coordinated decision
to invest a staggering $2.4 trillion in interbank loan guarantees and bank recapitalizations, ft.com reported, to end the global financial crisis.
(Of course, 'gosh, golly' etc. were not exactly the reactions of traders and economists -- this is a family-appropriate financial blog -- but you get the point.)
Europe's decision sparked a global rally in stocks.
The Dow closed up 936.42 points -- the largest one-day point gain in its history -- to 9,387.61.
Europe takes the leadAt minimum, Europe is saying that its economic stake in the current global financial system is so large that it's willing to err on the side of over-committing public funds, economist Peter Dawson said.
"Europe's response is very large, unexpected, and it could prove to be the pivotal move in this crisis," Dawson said. "Europe appears to be saying, 'well the United States is doing what it can do, given its political constraints' now let's do what our political culture allows. Basically, Europe is saying 'the storm of fear starts to lose its strength here.' "
The measures were both sweeping and unprecedented in size and scope, Dawson said. Germany said it offered about $680 billion in loan guarantees and will invest $108 billion in its banking system,
ft.com reported. France said it would provide up to $435 billion in loan guarantees and invest as much as $52 billion. The United Kingdom has committed about $70 billion for investment in key banks, along with a guarantee for banks deposits and interbank lending. The Netherlands, Spain, and other nations announced similar plans.
Continue reading E.U. commits $2.4 trillion and says ball is now in your court, U.S.
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The General Motors' board is starting its two-day meeting today, and it is believed that the company is going to decide what will happen to the German Opel automobile unit. There are other topics to be discussed, including a new marketing campaign and preparation for a public offering of stock so the automaker can repay the U.S. taxpayers. 
Under the radar: Some trends are obvious enough and visible to all investors. Others are more-subtle, but are just as potent, and these often slip 'under the radar.'
Under the radar: Some trends are obvious enough and visible to all investors. Others are more-subtle, but are just as potent, and these often slip 'under the radar.'
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