Financial topics

[OLD1953]

Interesting video, trucking is weak, rail shows sluggish growth. Gasoline is more oriented to personal transport, but it just keeps dropping. Airlines keep on contracting, at least on the short haul flights. I've got to wonder if some of this isn't due to a search for lower price or greater efficiency in deliveries. I remember when I was working at the mines, when coal prices were up, a few cents cost per ton did not get anyone excited, if prices were down, saving a penny a ton in costs made you a hero. With no room for price increases, we may be seeing the result of a hunt for the cheapest mode of transport.

I read this and thought that it may become the final straw that breaks the backs of commodity speculators.

http://online.wsj.com/article/SB1000142 ... %3Darticle

Piling into the market are farmers and food companies burned by the collapse in milk prices in 2009. They are looking to protect themselves after a recent drop in prices, following a surge last year. Their increasing numbers make it easier to buy and sell futures contracts, known as liquidity, typically a problem in smaller markets. And that is starting to arouse the interest of speculative investors.

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Everyone here knows the defense of speculation, that it increases liquidity. And we also know that defense only holds true when there are few speculators in relation to actual consumers of product - and by few speculators we mean few in terms of money/contracts in relation to consumer/delivery contracts. Milk for delivery is not a huge market in terms of dollars, and it could easily be dragged to unreal prices by the actions of a few. People have been trained to expect this with gas prices (it would drive any sane person crazy to try to explain high gas prices in the face of falling demand and a glut of product using classic economics without invoking some kind of intervention) but I do not believe even the sheep like American consumer will tolerate this type of excessive speculation in regards to milk prices. This could easily become something to make OWS and the Tea Party combined look like kids in a blow up pool compared to an ocean.

I was wondering what spooked those investors. Given that Apple appears to be carrying the market all by it's lonesome, it was likely word of this:

http://www.nytimes.com/2012/02/19/techn ... to-25.html

Foxconn said that salaries for many workers would immediately jump by 16 to 25 percent, to about $400 a month, before overtime.

The company also said it would reduce overtime hours at its factories.

Labor rights groups say that over the years, many Foxconn plants have violated Chinese labor laws by pushing workers to endure excessive amounts of overtime.

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If Apple no longer gets the old "look the other way and it didn't happen" bonus, their profits will drop and they won't be the superstars any longer.

[Higgenbotham]

Interesting articles about milk speculators and Chinese wages. Didn't realize Foxconn employs a million workers, workers that could be working for Apple and the other high tech companies right here in America, and the Apple execs would still make plenty of money. From a political standpoint, a million jobs would do a lot to drop unemployment here, but in China it may only serve to increase discontent among the masses who don't have those $400 per month jobs.

[Trevor]

considering what is happening in China at the moment, I don't even think it would take an all-out collapse for something to be triggered. Just having the country stagnate the way Japan had would be enough to have either a civil war or at least an insurgency.

[OLD1953]

Be funny if the whole thing is about to blow up in their faces.

http://www.lfpress.com/tech/news/2012/0 ... 88731.html

On Tuesday, lawyers representing Proview Technology (Shenzhen) said the company would seek a ban on exports of iPads from mainland China, and authorities in some Chinese cities had ordered retailers to stop selling Apple's iPad

[aedens]

Apple bought Proview's worldwide rights to the trademark in 10 different countries several years ago, including rights to the iPad name from a Taiwan subsidiary of Proview International. Proview Technology (Shenzhen) says the sale did not cover the trademark's use in China.

[aedens]

The S&P500 rose 1.4% (up 8.2% y-t-d), and the Dow advanced 1.2% (up 6.0%). The Morgan Stanley Cyclicals added 1.2% (up 16.1%), while the Transports slipped 0.3% (up 4.4%). The Morgan Stanley Consumer index rose 1.6% (up 4.2%), and the Utilities gained 0.3% (down 3.3%). The Banks were 2.4% higher (up 15.8%), and the Broker/Dealers were up 2.6% (up 18.0%). The broader market plugged right along. The S&P 400 Mid-Caps rose 2.1% (up 12.0%), and the small cap Russell 2000 gained 1.9% (up 11.8%). The Nasdaq100 was up 1.4% (up 13.5%), and the Morgan Stanley High Tech index jumped 1.9% (up 16.7%). The Semiconductors rose 2.8% (up 18.5%). The InteractiveWeek Internet index increased 1.0% (up 12.2%). The Biotechs were about unchanged (up 24.3%). With bullion little changed, the HUI gold index slipped 0.6% (up 4.4%).
http://www.youtube.com/watch?v=t0esvGPq ... r_embedded

[Higgenbotham]

Whoops, the truth about Greece was just revealed 39 minutes ago.

Greek debt nightmare laid bare - 39 minutes ago
By Peter Spiegel in Brussels A “strictly confidential” report on Greece's debt projections prepared for eurozone finance ministers reveals that Athens' ...

http://www.google.com/search?hl=en&sour ... 01l6-1l1l0

[Trevor]

Hmm, I wonder how many people who heard about that report were actually surprised to hear it. I would bet on... nobody. Everyone knows at this point that they are utterly screwed. This is just trying to contain the damage and to keep the European project alive.

[aedens]

http://www.testosteronepit.com/home/201 ... rseas.html

Greece is not the canary, or has it ever been. Yes they have spiking 20 percent plus unemployement
amd real GDP collapsing it is said. http://www.athensnews.gr/portal/11/53291

Closer to home...
“I am 70 years old,” she continued. “ I work everyday. Every part of my body hurts, but I work. I’m not so much worried about me, but my sister…she gets $500 a month I Social Security and she lives on that. It’s not fair to take it away. “
There are millions of Maria Soderstadts out there across the country wondering how their leaders deserted them, and how they could possibly play this risky game with the lives of America’s most fragile citizens.
http://senatorfeldman.typepad.com/senat ... abyss.html

[Higgenbotham]

I believe Greece is a canary, but not the canary. Our lives will become like the Greeks', given time. But the canary is Japan, and has been for 20 years, and it's likely that events in Japan, not Europe, will trigger a worldwide panic this Fall. Things may get worse before that point, but when things fall apart in Japan that should be the true catastrophe, and it's not on anybody's radar, and the media is covering it up.

Also, having read that article, overseas disasters follow a path where they cause the US economy to overheat about 1 year later, then collapse after that. Since Fukushima was a really bad disaster, it looks like the US economy is overheating a lot (more than I expected given where things are at) but maybe the collapse will be worse too.

As far as how bad things are in Greece or in Europe or in Japan my guess is they are much worse than almost anybody can imagine, including anybody here.