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A new laptop has been developed in India. Its cost: $35. Features 2GB RAM, Wi-Fi, touch screen, etc, and may be powered by solar power.
Cost are estimated to drop in the future below $20 per unit.
“This is real, tangible and we will take it forward,” Kapil Sibal, minister for human resource development, said at a press conference in New Delhi.
As readers know, AKAM is a favorite of mine for straddles. Coincidentally, INO just released a video analysis of AKAM:
James Bullard, Federal Reserve Bank of St. Louis President, said today that the U.S. is closer to a Japanese-style outcome today than at any time in recent history due to its low interest rate policy.
He said the central bank should resume purchases of Treasury securities if the economy slows and prices fall instead of keeping rates near zero.
National Post reports that the warning was a research paper released today written by Mr. Bullard.
“A better policy response to a negative shock is to expand the quantitative easing program through the purchase of Treasury securities.” “The most likely possibility from where we sit today is that the recovery will continue through the fall, inflation will start to move up and this issue will all go away,” “Suppose we get another negative shock, another surprise. We have to be prepared in that event to have a plan in place to do something.”
He added that the' Fed's pledge to keep rates near near zero may prove to be detrimental: "While some people say rates near zero will accelerate inflation, such an interest rate policy may also cause a broad-based decline in prices".
“Under current policy in the U.S., the reaction to a negative shock is perceived to be a promise to stay low for longer, which may be counterproductive because it may encourage a permanent, low nominal interest rate outcome,”
Mr. Bullard also added that deflation can hurt the U.S. financial system "because falling prices undermine the value of financial contracts such as mortgages".
"His comments echoed Bernanke’s research on the Great Depression indicating that declines in borrowers’ net worth can worsen a downturn".
Brazil and a few other emerging countries like are lifting the quarterly results of big global companies.
On Thursday, Santander, Telefónica, BAT (British American Tobacco), Procter & Gamble, Avon and Bunge reported that thanks to countries like Brazil they had the chance to increase profits or prevent their fall.
In the case of Avon, Brazil ended up having a central role: the company's sales rose 33% in the country, helping to offset the 6% fall in North America, reported the Wall Street Journal's website. The curious case of the Avon is the largest emerging country, China, this time did not help the company. Sales in the Asian nation plunged 32%. In Europe, sales rose 10%, but was driven by an emerging country, Russia.
Brazil has also helped Bunge (BG), but in a different way. The sale of the Brazilian fertilizer unit allowed it a sixfold profit jump, from U.S. $ 313 million in the second quarter of last year to $ 1.78 billion.
The Financial Times reported that Telefonica's profit rose more than expected. The rise of 9.4% was supported by operations outside of Spain. While sales increased by over 10% in Latin America, in Spain they fell 4.5%. The importance for Telefonica in Brazil tends to increase, now that the company alone controls mobile operator Vivo. The country will be responsible for one fifth of the revenues of the Spanish group, notes the Financial Times.
BAT, in turn, said its sales are being sustained by strong countries in the area of commodities: Brazil, South Africa, Canada, Australia and Russia.
Santander increased profist by 9% in Brazil, which relieved its global poor result, a drop of 8%.
Also on Thursday, the London Daily published a declaration of a director of Procter & Gamble, Marc Pritchard, on the Olympics in Brazil, 2014 and the Winter Games in Russia, the same year: "We definitely intend to use these events to boost our emerging markets ".
With news from Agencia Estado.
If you feeel like this stock market is frustrating as it lacks direction, you are not alone. The economy is weak (to be polite), yet more stimulus will surely be coming. That is this a source of lack of direction.
Currently we are right at resistance. INO explains where we stand in its latest video (watch video):
You may also receive technical analysis and alerts on any stock, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).
Hundreds of lawsuits have been filed agaisnt BP asking for hundreds of billions of dollars in damages due to the oil spill. Although BP puts on a nice PR image, behind the scenes BP is now fighting over where the cases should be heard. BP wants Houston, texas, home of the oil industry. Those who filed the suits awant New Orleans, which is the most affected state.
Bloomberg reports:
"A panel of federal judges in Boise, Idaho, will hear arguments today on which city will host spill suits, including wrongful-death claims by families of workers killed in the April explosion of the Deepwater Horizon rig. Claims include losses of revenue by Gulf Coast businesses and securities claims by holders of U.S. shares in the London-based energy company. The federal government wants the cases consolidated in federal court in New Orleans, while BP said it prefers Houston.
BP faces at least 300 suits over the spill as it works to permanently plug the Macondo well 40 miles off the coast. Oil has fouled beaches and marshes in Louisiana, Mississippi, Alabama, Texas and Florida.
U.S. officials and many plaintiffs’ attorneys contend New Orleans is the best site for consolidation, noting Louisiana is the closest state to the spill site and has suffered the bulk of environmental damage.
Putting the cases in Houston, home to BP’s U.S. headquarters, would be a “cruel irony” for Louisiana victims, said Stephen Herman, a lawyer for Louisiana residents suing over the spill’s fallout, in a May court filing".
Jim Rogers tells it how it is: Stress tests were a total waste, just a P.R. exercise, they got the stocks up.
He also says right on CNBC itself that the media (i.e, CNBC) is a P.R. machine whose purpose is to pump stocks up (around 4 mins into the video).
Also comments on his great call to buy the Euro at 1.20.
Mervyn King, Bank of England's Governor, says there may be a considerable way to go before U.K.'s rates return to normal.
“There will come a point when we will certainly need to ease off the
accelerator and return Bank Rate to more normal levels,”
“I look forward to that time because it will probably be a signal that
there is a smoother drive ahead, with the economic outlook improving in a
durable way. But I fear there is some considerable distance to travel before we
can begin to use the word ‘normal.’”
Although announced a charge of $32.2B due to the oil spill, it is also claiming a $9.9B taxation credit (never mind that some class action lawsuits are claiming $200B in damages)
Tony Hayward, BP's CEO says that they have followed the IRS regulations. The man clearly has no PR skills.
As a note, not even has done as bad. Goldman Sachs Group, not renowned for being a nice company, agreed during the settlement with the SEC, to not seek tax deductions for its $535M.
It is mind boggling, and shocking that this company continues to give not give an iota about what it has done or what people think about it.
Investors are well aware of how dreadful UNG is (at least the readers here!). Some hope arrived when UNL was launched late last year. Unlike UNG which focuses in one month contracts, UNL invests on the next 12 months of natural gas contracts. The losses have to do not necessarily with the price of natural gas contracts, but with the contango as every month these ETF need to sell their contracts and buy next month contracts, thereby losing sometimes more than 20% (continuously).
Perhaps this chart for their performance year-to-date might reveal the answer:
Both are dreadful, showing a loss of 23/24%.
The chart below shows the price of the front month price of natural gas itself:
You wonder what happened to the money the investors pay for these ETFs. Like leveraged ETFs, money invested disappears ... except that money does not disappears. Somebody pockets it.
Note: You may receive buy or sell alerts on these ETFs by clicking on their links: UNG, UNL.
Bloomberg reports this morning that Goldman Sachs' documents show that it "depended on banks including Citigroup Inc. and Lehman Brothers Holdings Inc. for protection against a failure of American International Group Inc. "
You might remember all the convoluted deals involving GS, AIG, and taxpayer bailout money and the claims from the big banks that they repaid the bailout money (except C). Citigroup received the biggest bailout and "was Goldman Sachs’s largest provider of credit- default swaps on AIG as of Sept. 15, 2008".
"Goldman Sachs, the most profitable securities firm in Wall Street history, has argued that it didn’t depend on the U.S. government’s $182.3 billion rescue of AIG because the investment bank had collateral and credit-default swaps to protect itself. Joshua Rosner, an analyst at research firm Graham Fisher & Co. in New York, said the list of counterparties indicates that Goldman Sachs may have had difficulty collecting on those swaps".
“Clearly Goldman’s calculation was more tied to their expectation of the political dynamics of forcing moral hazard than the fundamental realities of the financial strength of counterparties,”
‘Backdoor Bailout’
"Lawmakers, including Representative Darrell Issa, the California Republican, have called the AIG rescue a “backdoor bailout” of Goldman Sachs, as well as the other banks that got 100 percent of the money AIG owed them. The government bailout of AIG meant Goldman Sachs never had to collect on credit default swaps it bought to cover a default".
On the lighter side. Nikki Yanofsky performed in Ottawa yesterday with the NAC orchestra. Nikki was absolutely spectacular. Fans were treated to something truly special. This 16-year old is amazingly gifted, and let's us not even talk about her finances!
The Canadian annual inflation rate fell to just 1% in June, the lowest level in eight months. Core inflation also dropped, to 1.7%.
Interest Rates
With this data, the bank of canada, which yesterday increased its interest rates by 25 basis points to 0.75%, will have very little ammunition to keep raising rates.
CP: "The main point is that the bank cannot wait until inflation erupts, but this very much argues for a very cautions, low approach to unwinding the stimulus," said Sal Guatieri, an economist at BMO Capital Markets.
Some analysts "continue to be critical of the Bank of Canada for applying the monetary brakes — or easing the accelerator, as the central bank would see it — before the economy is ready to stand on its own feet".
GDP
"Canada's gross domestic product followed up the strong 4.9 per cent advance in the last three months of 2009 with an even bigger jump forward of 6.1 per cent in the first quarter of this year.
The economy has not been as bouncy recently. Output growth stalled in April, and the Bank of Canada estimated this week that growth slowed to only three per cent in the second quarter, and will slow even more in the third quarter.
The central bank also predicted Canada's economy won't return to full capacity until the end of 2011".
The press in the U.K. reports that BP was doctoring's photos fro the oil spill. How low cna this company go? How is it possible that it is still in business?
"BP admitted some of the oil spill photographs posted on its website had been altered by staff using Photoshop.
The first altered image to surface was of a BP command centre, showing three men monitoring 10 screens of underwater activity – except in the original at least three of the screens appeared to be inactive. Enter some Photoshop wizardry.
Using Photoshop, the BP staffer made it appear as if all 10 screens were active (if only showing reformatted versions of another screen).
Now BP has taken the plunge and uploaded three doctored images and their originals to the photo-sharing site Flickr. However, America's public enemy number one falls some way short of full redemption by only posting smaller (600x400 pixel) versions of the Photoshop iterations, as opposed to the 2400x1600 originals.
A statement accompanying the set reads:
"One of BP's contract photographers used Photoshop to edit images posted on the bp.com Gulf of Mexico Response web site."Typical Photoshop uses include color correction, reducing glare and cropping. This week we learned of two images where cut-and-paste was also used in the photo-editing process. These cut-and-pasted images have been removed from the bp.com site."For the sake of transparency, the original and edited images are presented here for comparison. We have also included an image that appears cut-and-pasted, but was edited using the color saturation tool to improve the visibility of a projection screen image."Although BP is a private company, we've instructed the photographer who created the images to refrain from cutting-and-pasting in the future and to adhere to standard photo journalistic best practices."
A BP spokesperson, Scott Dean, said the photographer was showing off his Photoshop skills and there was no ill intent. Hmmm."
Pardon us, since when do photographers show off their Photoshop skills?
Bonnie:
With regards to the European stress tests results that will be released today, the mockery continues. Bloomberg reports that the 91 banks being stress-tested were "only examined on European sovereign debt losses for the bonds they trade, rather than those they hold to maturity" (according to a draft European Central Bank document).
“The haircuts are applied to the trading book portfolios only, as no default assumption was considered,” according to a confidential document dated July 22 and titled “EU Stress Test Exercise: Key Messages on Methodological Issues.”
And anyone is to believe those results?
Kenneth Feinberg, Special Master for TARP Executive Compensation, popularly called the "pay czar", will cite 17 financial institutions for having made more than $1.6B in "not recommended" payments to its executives at the peak financial crisis. This according to sources quoted by the Wall Street Journal.
Mr. Feinberg's report should be released on Friday. Among the banks that he should cite are Goldman Sachs, JPMorgan Chase and Citigroup.
Feinberg has no authority to demand the return of such payments. However, he has authority to seek reimbursement by renegotiating payments deemed "inconsistent" with pay rules required by Congress, or any payments "contrary to the public interest.
"Several of the 419 institutions that received emergency funding from the federal government by the U.S. TARP program, including Goldman, JPMorgan and Citigroup, have already returned the money to the Treasury. Still others have not, including some that will be cited in the report.
Several of the 18 Spanish savings banks have failed the European stress tests performed by the European Union to assess whether the institutions could cope with a worsening economic conditions. The test results will be released today after the markets close in Europe (11AM ET). 91 banks will be included, which account for 65% of all EU banking assets.
The news was a reported by El Pais, a Spanish newspaper. The tests should show that some banks not listed on the stock exchange need an injection of capital under some scenarios, says El Pais, quoting financial sources.
The spin media is out in full force today. The "news" now is that "Europe may already have passed its biggest stress test".
Bloomberg reports: "The euro has rallied 8 percent from a four-year low last month. Greece, Spain and Portugal have managed to sell 50 billion euros ($64 billion) of debt since May 10, when the need to save the single currency forced finance ministers to create a nearly $1 trillion rescue fund and the European Central Bank to begin buying bonds".
“The market seems to be much more convinced following the bailout that the euro zone is working and the peripheral countries will be able to finance their debt,” said Chris Kind, head of asset allocation at Frankfurt-Trust, which manages $17 billion. “This goes hand-in-hand with the appreciation of the euro against the dollar.”
The Euro has appreciated a little yes, or actually, has reversed a bit its depreciation, but how much of that has do the Euro being strong, or with the USD being weak again? The economic news coming out of the U.S. is dreadful and traders may simply know that QEII (quantitative easing round II) is coming, as evidenced by Bernanke's remarks yesterday.
Shall QEII happen, the USD will sink again. The Euro is not strong, by any means. It's a game of musical currency chairs. The question is which will be the last one to to collapse.
