Businessy things

The big LatAm company story is Vale (VALE) who missed on earnings, with revenues of $1.36Bn to an analyst expected $1.66Bn. Here's the bloomie report that sums up the most interesting numbers and the necessary reactions (you'll note from the report that VALE is slightly up in European tradign this morning...bull is as bull does, y'know).

Meanwhile, for once I feel like dipping in my toe to the bigger paddling pool that you guys splash around in up there. It's more fun to watch the spin you get, cos it's on a whole other level to the stuff we get. It's like comparing Monty Python to people falling over.

I liked the starting line to this note in the Austraian Daily Reckoning: "Happy days are here again. It’s like someone turned back the clock to 2007. You’re a crank and a nutjob if you think there are serious problems in the financial system". Yep.

That Daily Reckoning article sure makes juxtaposition to this one from AP yesterday. "Stocks jump as fears ebb about bank stress tests' is a neat chronicle of how the US bank-Feddy people pulled a cute number on the market by drip leaking the necessary info with perfect timing and planning. It really was a masterful use of financial media yesterday.

Also, note how businesses have managed to bring great relief with their "smaller sales declines in April". Phew! For a minute there I thought they'd sold less!

Finally, for traders getting carried away by the rush of market love, Lucas has a very interesting post that might help you home in on a method of playing the bull. Logically he's found an interesting way of screening for stock trading opportunities and his comments are smart, too....well, that's expected from the dude. Go have a look, traderypeople.

The G-20 final communique

You can read it yourself by clicking right here, "it" being the official PDF from the G20 London summit. But in a nutshell the idea seems to be to empower the world bankers via the IMF, the body of suits that screwed Latin America into the ground in the 1980's and 1990's, to get us out of the mess caused by the world's bankers.

I mean, what could possibly go wrong?

Is it just me......

.........or do these two headlines back-to-back make you think "nobody has a clue what to do about this mess down here" too?

Dec. 23 (Bloomberg) -- Colombia will “delay” 3 trillion pesos ($1.4 billion) in spending from the 2009 budget in a bid to bolster investor confidence amid a global economic crisis.

Dec. 19 (Bloomberg) -- Peru is advancing with plans to sell its first foreign bonds in almost two years to “demonstrate the economy’s strength” after receiving investment-grade ratings, said Betty Sotelo, the Economy Ministry’s debt director.

So how's this go again? One country is going into debt to boost investor confidence. The other is holding on to savings in order to do exactly the same. Both will receive the breath of popular applause, of course. After all, it's not what you do but who you do it to that counts.

Of all the cartoons...

.......that Jurgen Schuldt has collected on the financial crisis over on this post, I like this one the best.

Go have a look at the 50 (yes, fifty) cartoons Jurgen has collected together in one spot. Most need no knowledge of Spanish, but for those who do speak the language watch out for a great one of Twobreakfasts and his wife watching TV.

An excellent compilation and highly recommended as a weekend kickback. Here's the link again, just in case.

Crisis? What Crisis? (Ecuador edition)

After using the urinal next to Alvaro Uribe, Correa explains all

A shiver went down my spine this afternoon when reading this article posted on 'The Presidency of Ecuador's' website. It's not the country, it's not the President himself; it's the continent. One of the classic signals of real financial problems down this way is when the head honcho of country X says "There's no problem with our banking system." This time country X happens to be Ecuador.

So here below are the direct quotes by President Studmuffin in the report today (in OttoTrans). For the Bloomberg version by Stephan Kueffner, click here

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Nobody here is talking about a bank holiday (i.e. forced closure of banks). This government doesn't do things like that."

(These are rumours from).."those that sunk the country and want to become powerful again. We are not going to let that happen. The citizen's revolution is irreversible, friends."

"The financial system is in excellent health. Of course the financial crisis is harsh, but we know how to move forward with imaginative measures."

"When you hear an economic pseudoanalyst or editorial say that measures have to be taken now, what they are telling us is to send us a "paquetazo" (ottonote: literally "big packet", a concept in LatAm meaning a combined package of price and/or tax hikes). There isn't going to be a paquetazo. We are going to take advantage of this crisis and use it to make the social and econonic system more equal."

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Now there are things to agree with there (e.g. the rumour mongers that want to start some kind of crisis for their own ends...that's for sure). There are things up for debate (e.g. a more equal socioeconomic system sounds like Utopia to me, esp with crude oil at $40/bbl). But I wish he hadn't gone and said "The financial system is in excellent health". Uff........there goes my spine, all shivery again.

Demagogue

Alan launches into Nirvana's Lithium at a local Karaoke bar

President Twobreakfasts was on Peru radio today. His message was "Businesses have no material reason to lay off workers or reduce investments" and similar demagogic guff and nonsense about "the fear factor".

Nice timing, as Peru's biggest steelmaker 'Aceros Arequipa' today announced it was suspending production "for maintenance purposes", but customers shouldn't worry because they had enough stock to continue to meet demand. (UPDATE: here's Reuters English language on the story). Or in other words the 40% drop in demand for steel products (especially re-bar used in construction) means the market is now way oversupplied. Note that October stats showed a 14% increase YoY in construction activity in Peru.....go on, take a wild guess about next year's figures...

Acero Arequipa's maintenance program has suddenly been brought forward from 2010, but don't worry. All is well. I mean, just one month ago Alan himself said that Peru was totally protected from any economic crisis. Isn't the word of your President good enough these days?

Food for economic thought from Galbraith

JK Galbraith is one of the great economic thinkers of the last 100 years. This quote from his book "The Great Crash" was sent to me by reader 'PS' a couple of weeks ago and it's been gnawing at me ever since. I think it's very apt for our current world situation and excellent food for thought. Thank you PS for the headsup.

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To the economist, embezzlement is the most interesting of crimes. Alone among the various forms of larceny, it has a time parameter. Weeks, months, or years may elapse between the commission of the crime and its discovery. This is a period incidentally when the embezzler has his gain, and the man who has been embezzled oddly feels no loss.

There is a net increase in psychic welfare.

At any given time, there exists an inventory of undiscovered embezzlement in, or more precisely not in, the country's businesses and banks. This inventory—perhaps it should be called the bezzle—varies in size with the business cycle. In good times, people are relaxed, trusting, and money is plentiful. And even though money is plentiful, there are always many people who need more. Under these circumstances, the rate of embezzlement grows. The rate of discovery falls off, and the bezzle increases sharply.

In Depression all this is reversed. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."

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