President Obama, anointed by his minions as the greatest orator of our time and one of the smartest Presidents ever, delivered a speech last week that was not only lacking in quality, but has inflamed both critics and supporters. While speaking in Cleveland, the President tried to change his spin on the economic situation, which he has avoided discussing. He said that the "private sector is doing fine" under his administration. In reality, private sector employment has declined over the President's four years by a higher rate that at any time since the Great Depression, while government employment has soared by a higher rate that at any time in US history. I guess the President was referring to the "private sector" in those favored industries that have been huge beneficiaries of government largess: banking, alternative energy, and automakers.
Pro-bailout parties have gained control of Greece, lessening concerns that the Euro implosion is imminent. The election “makes the formation of a pro-European government more likely, removing political uncertainty in the short-run” said Panagiotis Kladis of National Securities in Athens. Equity markets, which are down this morning after a strong run-up into the election last week, arguably have been discounting this outcome. The Euro is weak, and Spanish 10-year yields are spiking above 7%, the highest since the Euro was created, after a downgrade by Moody’s late last week.
The Bank of England announced a novel plan to help their wobbling banking system and credit markets-pump in massive, low cost liquidity. The program, called “funding for lending”, may be in place in the next few weeks and is expected to increase loans from banks to avert a credit crunch. Let’s hope they implement that a bit more effectively than we did here.
Bloomberg is reporting that investment capital has poured out of emerging-market equity funds over the past three months at a faster rate than at any time since 1998. Concerns about slowing growth in the BRIC countries (Brazil, Russia, India and China) has accelerated the capital outflow.
The Fed is reporting that home equity in the US has jumped by 7% in the first quarter, to $6.7 trillion. This is the largest jump in over 60 years. On a percentage basis, home equity represents 41% of residential property values, the most since 2008 when it stood at 43%.
Don’t expect to be bumping into Allen Stanford any time soon. The former financier accused of running a $6 billion Ponzi scheme was sentenced to 110 years in prison.
Felda Global Ventures, a Malaysian operator of palm oil plantations, went public last week in the second largest IPO of the year. The $3.3 billion deal was reportedly oversubscribed by 29 times, primarily by institutional investors.
Nokia’s (NOK) woes continue as the company announced plans to shut down production facilities in Canada, Finland, and Germany. The company’s handset sales fell by 24% in the first quarter as Samsung moved into the #1 spot in the world. The company plans to lay off 10K workers with the closures.
LT-eleven years, 13K yards, well done! Let’s hope he avoids the fate of 78% of NFL players-bankruptcy within 24 months of retirement.
Have a great day