Tuesday, 24 July 2012

Even the best looking girl at the dance sometimes sits alone . . .

Moody's putting some of the northern European darlings on negative credit watch shouldn't have surprised us . . . but I guess it did.

The odds get tighter each day that Hollande and the other whingers will eventually verbally batter Merkel into submission. Eventually Germany will be forced to quit the Euro or pay up for the PIIGS and France. The only country worth trust are the Finns, who have made it clear from the start that they need collateral before continuing this insanity.

My favorite headline from the press today comes from CBNC's website . . . .
China Manufacturing Bounce Doesn’t Rule Out Stimulus.The money honeys continue to look for the silver bullet that will end the agony of the last 4 years, but they just don't get it. Stimulus alone will not help. The whole point of my piece yesterday was that this isn't some sickness easily solved by a Keynesian pill.

Let's look at this Chinese PMI. So, 49.5 is up from last month's 48.2, but you need a reading above 50 to show expansion. Let's face it, for the entire globe to be moving you'll need an reading way above 50. I have great sympathy for the Chinese as they know quite well that they don't want to slow the deflating of the housing bubble, but with limited external investment opportunities they may be left with know choice. I think the leadership will continue to open up new outlets for investment that will relieve at least some of the pressure.

A good example at the corporate level of outward investment was CNOOC's bid for Canada's Nexen. A 61% premium with  15bn on the table used to be very significant. The same company previously failed in a larger bid for Unocal in 2005. I remain somewhat skeptical as this will get through Ottawa's approval process, you will remember the hell BHP went through when trying to aquire a Canadian potash producer, so I can't really see how this will be any easier. It will suit the Canadians to string this on for months.

Europe accounts for 40% of McDonalds sales these days, the US accounts for just over 30%. I guess therefore it was natural that even lower end dining would eventually hit a wall.

They missed the fairly bullish expectations of Wall St, but I'd be inclined to be patient. One obvious problem for them is that the weakness of the Euro hurts them in terms of earnings translation . . . Maybe if you want to punt Euro bounce the golden arches are a more risk savy bet than most. There has been much to admire about the last decade of McDonalds business plan execution. The localisation of menus finally started to pay off and branching out to make non-peak hours more effective (McCafe etc.) has been a winner.

I put cycling on hold today in favor of my first fitness test in quite a while. I'm embarrassed by my push up total in 2 minutes (only 37) and 1.43 on the plank.

I need to lose about 4 kilos and I think that my almost exclusive use of cycling for my fitness has really hit my upper body strength. I guess it was fairly obvious. I doubt I could do even 3 proper chin-ups at the moment. Unless you want to be a climber in the Alps then I suggest getting off the bike and into the gym a couple of days a week.

No comments:

Post a Comment