Continue reading Under the radar: Goldman now sees 'rather strong' global growth in 2010-11

Under the radar: Goldman now sees 'rather strong' global growth in 2010-11 originally appeared on BloggingStocks on Thu, 03 Dec 2009 17:45:00 EST. Please see our terms for use of feeds.

Continue reading A new hybrid sports car, an outlandish price tag ... and Al Gore

A new hybrid sports car, an outlandish price tag ... and Al Gore originally appeared on BloggingStocks on Fri, 25 Sep 2009 09:30:00 EST. Please see our terms for use of feeds.

Continue reading Ray of light: Global economic confidence surges in August

Ray of light: Global economic confidence surges in August originally appeared on BloggingStocks on Wed, 12 Aug 2009 17:40:00 EST. Please see our terms for use of feeds.

Continue reading Engine of growth-wise, it's a whole new ballgame for the global economy

Engine of growth-wise, it's a whole new ballgame for the global economy originally appeared on BloggingStocks on Mon, 20 Jul 2009 16:45:00 EST. Please see our terms for use of feeds.

Iran's flawed democracy is still better than most of the political systems among other countries in the region. For the past few decades the morality police, prodded by religious literalism, have mandated women to cover themselves when they are out in public. This same religious literalism has impeded the potential of a country that has a large population, in a key geographic region, with oil and other natural resources.

Iran is in the midst of a presidential election that has stimulated much heated debate among the population about the failures of the current government in economic and political terms, and that has created a feeling of isolation. The isolation is more than a feeling, and it has limited the growth of the nation to something far less than its capabilities.

Continue reading Iran's great potential and its challenges!

Iran's great potential and its challenges! originally appeared on BloggingStocks on Wed, 10 Jun 2009 17:45:00 EST. Please see our terms for use of feeds.

The players at the G-20 summit have opened the curtain on Act 1.

First we have Japanese Prime Minister Taro Aso. He holds the position that a strong stimulus program is the only means to pull Europe and the world out of the current crisis. He cited Japan's experience in the 1990s when Japan used a strong stimulus as a way to stimulate growth. He also cited Japan's current stimulus package, which amounts to $720 billion, and he even said that Japan would discuss further stimulus if the need arises.

Standing in opposition is German Chancellor Angela Merkel. She is firmly opposed to more stimulus and demands to know why it is needed. She believes that excessive public spending will not assure a vital recovery.

Continue reading G-20 split on stimulus program and financial reform

G-20 split on stimulus program and financial reform originally appeared on BloggingStocks on Wed, 01 Apr 2009 12:50:00 EST. Please see our terms for use of feeds.

Continue reading Should Buffett & Roubini "Face the Nation"?

Should Buffett & Roubini "Face the Nation"? originally appeared on BloggingStocks on Fri, 20 Feb 2009 14:20:00 EST. Please see our terms for use of feeds.

Continue reading Japan's economy falls its hardest since 1974

Japan's economy falls its hardest since 1974 originally appeared on BloggingStocks on Mon, 16 Feb 2009 09:00:00 EST. Please see our terms for use of feeds.

Continue reading OPEC, at Davos, signals more production cuts are ahead, if needed

OPEC, at Davos, signals more production cuts are ahead, if needed originally appeared on BloggingStocks on Thu, 29 Jan 2009 13:26:00 EST. Please see our terms for use of feeds.

Continue reading Crude is not awakening ... at least not any time soon

Crude is not awakening ... at least not any time soon originally appeared on BloggingStocks on Tue, 13 Jan 2009 10:23:00 EST. Please see our terms for use of feeds.

The currency of our realm, the US Dollar, has been losing value for many years, but lately the results of this sad state of affairs have become increasingly more evident. Concerns are mounting on a global basis not just in the United States. The euro, once pegged at a buck, is now trading at $1.55, while gold has passed $1,000 and oil has continued its charge, breaking through the $110 per barrel mark.

While a good deal of this problem is home grown, the pain is being felt all around the world. We have read many stories about how the American economy is a smaller part of the global economy and becoming somewhat detached. This is nonsense. What has happened is that the global economy has become infinitely more integrated and like any integrated structure (the architect speaking), what occurs in one place is felt everywhere.

The Federal Reserve Board, led by Chairman Ben Bernanke, has been watching the economy in an extremely measured fashion, bordering on casual. To those who see beyond Bernanke's calm demeanor, one should imagine a stock trader of old, holding the ticker tape up to his eyes and monitoring every change, every blip in the market as the ticker tape machine clicks away, spewing out the latest market activity.

Continue reading Serious Money: The falling dollar creates global pain -- Part 1

Serious Money: The falling dollar creates global pain -- Part 1 originally appeared on BloggingStocks on Thu, 13 Mar 2008 15:05:00 EST. Please see our terms for use of feeds.

Oil had hit an intra-session high of $101.11 earlier in the day before pulling back slightly. (Oil hit an all-time high, in inflation-adjusted terms, of $102.80 per barrel in April 1980.)

Energy commodities close up

The other major energy commodities also closed higher. Heating oil gained about two cents to $2.79 per gallon, unleaded gasoline climbed about one cent to $2.54, and natural gas gained about one cent to $9.19 per million BTUs.

Independent energy trader Jim Dietz told BloggingStocks Tuesday that the market is not taking into consideration oil's bearish fundamentals, which show rising inventories in several key categories, but is trading more on psychology: namely, ambition.

Continue reading Oil closes at $100.88, a new record high

Oil closes at $100.88, a new record high originally appeared on BloggingStocks on Tue, 26 Feb 2008 16:02:00 EST. Please see our terms for use of feeds.

Possibly more than ever before, smart stock investing requires a clear and wide forward view. If you don't have an undeniable road map for where your chosen companies are headed, you must dig deeper and you need to do it right now. Specifically, if the companies that you have chosen to invest in don't have a declared international focus, you must be certain of why that is and if it's appropriate.

Barring some unforeseen worldwide economic crash, which is in fact extremely possible, the fact sheet on investing these days is headed with the word global. If your portfolio is not thoroughly salted with companies that do business on a worldwide scale, then your portfolio is scheduled to wither and wane over the next three to five years. Global diversity is essential right now, and will continue to be a requirement from here on out.

It's my opinion that one of the most important criteria these days for successful portfolio building is to create a portfolio footprint that covers at least three different countries. If you have the funds to spread out and you're a fan of diversity, just for safety I suggest that you base your portfolio across five to seven countries. I would suggest the following research focuses as a sample to get your global thinking started.

Consider China for heavy manufacturing, machinery, electronics manufacturing, and a range of consumer goods. I'd be shy of putting any money over there at the moment, however, because to me their stock market is currently overinflated in value.

Continue reading Global investment conditions: Reaping what you sow

Global investment conditions: Reaping what you sow originally appeared on BloggingStocks on Sat, 07 Jul 2007 09:40:00 EST. Please see our terms for use of feeds.

It's an adage that discretion is the better part of valor, and sometimes prudent discretion means doing nothing at all.

That, for all intents and purposes, is what the U.S. Federal Reserve believes is the best operational stance currently -- namely, doing nothing at all.

In other words, it's a status-quo monetary policy in which the Fed will need to see numerous data points on either side of the inflation / economic growth equation before its considers raising or lowering short-term interest rates.

In its most recent meeting this May, the Fed kept short-term interests at 5.25%, while simultaneously giving apparent equal weight to its dual concerns of controlling inflation and maintaining adequate U.S. GDP growth.

Regarding economic growth, in its statement the Fed acknowledged that U.S. economic growth has slowed in the first part of the year, with the sluggish housing sector contributing to the slowing, but also hypothesized that the U.S. economy seems likely to expand at a moderate pace in the quarters ahead.

Regarding inflation, in its statement the Fed also sent a clear signal that while the Fed is aware and concerned about the U.S.'s slow growth in Q1, it remains concerned about elevated inflation. The Fed concluded that core inflation is "somewhat elevated" and that although inflation pressures seem likely to moderate over time, high resource utilization had the potential to sustain those pressures.

Continue reading The Fed: For now, a status-quo monetary policy

The Fed: For now, a status-quo monetary policy originally appeared on BloggingStocks on Sun, 20 May 2007 18:40:00 EST. Please see our terms for use of feeds.

The "Totally Informal Economics Roundtable" (TIER) met this past week -- the esteemed round table achieves a quorum whenever yours truly and my three astute economist friends from graduate school convene to discuss matters economic ... or to celebrate the birthday of one our school-age children, or for another social occasion. This week the topic was the global savings surplus.

Earlier on The FLY and on bloggingstocks.com, the TIER commented on the global savings surplus, or more-broadly, the large and increasing pool of global capital that's spanning the globe in search of return and yield.

It's hard for Americans to think in terms of a "savings surplus" with the U.S. posting a negative savings rate for more than a year, a savings rate well below appropriate levels for an advanced industrial economy, but the world is awash in capital, fed in part by savings. China, Japan, the European Union, and some petro-dollar countries have vast amounts of surplus savings. This fact, combined with a corporate capital base in the U.S. and abroad, has produced a multitude of unexpected consequences -- consequences that have lasted longer than many economists and analysts expected, the TIER agreed.

The first and foremost consequence, the TIER agreed, has been continued low interest rates for long-term bonds, mortgages, and certificates of deposit. Further, although recently released statistics from the Congressional Budget Office indicate the U.S. budget deficit in fiscal 2007 could drop to as low as $150 billion, five consecutive years of plus-$200 billion deficits normally should have led to a crowding-out effect on capital, resulting in higher long-term interest rates. Those high rates did not -- and have not -- materialized, the TIER agreed, due to that foreign savings surplus -- foreigners' willingness to buy U.S. Treasuries while spanning the globe for return and yield.

Continue reading Global capital pool seen keeping interest rates low

Global capital pool seen keeping interest rates low originally appeared on BloggingStocks on Sun, 13 May 2007 17:40:00 EST. Please see our terms for use of feeds.

In the latest sign of the slowing economy, FedEx Corp. (NYSE:FDX) today reported a decline in fiscal third quarter profit and gave disappointing guidance.

Profit was $420 million, or $1.35 per share, compared with $428 million, or $1.38 per share, a year earlier. Revenue rose 7 percent or $8.59 billion. The company was expected to earn $1.33 on sales of $8.77 billion, according to Thomson Financial.

Though firms often blame the macro environment for their troubles, FedEx has a good excuse. The company said that the economy grew at a slower rate than it expected during the third quarter though it expected a more sustainable growth rate going forward.

Investors, though, weren't so understanding.

Shares of FedEx traded down after the company shaved 5 cents off its forecast for the current quarter. FedEx did reiterate its long-term goal of growing earnings per share by 10 to 15 percent per year though it company said it may not be able to hit that target for fiscal 2008 because of slower economic growth and planned investments in the business, according to Reuters.

Wall Street didn't punish the stock as much as one might expect. Shares were only off about 2 percent in the latest trading, indicating that investors are still bullish on FedEx's prospects. Its shares have declined 4 percent over the past year compared with an 11 percent decline for United Parcel Service Inc. (NYSE:UPS).

FedEx's decline isn't suprising originally appeared on BloggingStocks on Wed, 21 Mar 2007 10:30:00 EST. Please see our terms for use of feeds.

• Research & development now dwarfs capital spending -- Danaher Corp.'s research spending has jumped from 150% of capital outlays to 300% during this decade. And Analog Devices has also seen a big jump in its R&D-to-capex ratio, increasing from 1.5-to-1 to 6-to-1 this year. Big increases in R&D and the shift of manufacturing to Asia will continue to translate into a more productive U.S. corporation.
• Concerns about consumer debt levels -- mortgage, credit card and auto debt has plunged from 6% of totals outstanding at the beginning of the 1990s to 1.5% to 2.5% the past few years.
• Corporate profits remain very strong -- after-tax profits and cash flow as a percentage of GDP exceed 8.5% and 15%, respectively -- very high by historical standards.
• Trade Deficit at 7% of GDP -- not a concern when measured against U.S. total household net worth which grows about $2.5 trillion per year. A traded deficit of $800 billion is more than offset by growth in U.S. net household wealth.
• Net foreign debt as a percentage of national net worth is only 4.6%.
• The earning-yield and dividends for stocks earn investors 9% versus 6% for private equity to borrow money. That is what is fueling the private equity boom. Stocks should do well as long as this disparity exists.
  

A detailed review of the global economy originally appeared on BloggingStocks on Tue, 26 Dec 2006 15:45:00 EST. Please see our terms for use of feeds.