EUCOM Economic Analysis - Part I

[Firn]

It is always nice to see some contra given. Anyway I will post the latest three trades, at least the price for which I got hopefully more value. Note that this concerns the small part of the portfolio wich is directly invested in equities. The far bigger equity part is in index funds, mostly of the (physical) ETF type.

E.ON: ~15
HP: ~10
Xerox: ~5

Buying fees are roughly 0.5%, portfolio fees 0.1%. Prices in €. Trades happened in the last two weeks. Obviously the sample is (too) small but it will be easier to manage.


We will see how things go in a couple of years. Hopefully we will not have forgotten this thread, but maybe this might be a good thing as good news doesn't create as many posts.

P.S: I just noted the almost perfect price scale of 5-10-15. Funny.

[Surferbeetle]

LNG Transport Ship Ob River (Dynagas LTD - Greece)



Gas tanker Ob River attempts first winter Arctic crossing, By Matt McGrath, 25 November 2012 Last updated at 19:35 ET, BBC News, http://www.bbc.co.uk/news/science-environment-20454757

A large tanker carrying liquified natural gas (LNG) is set to become the first ship of its type to sail across the Arctic.

Built in 2007 with a strengthened hull, the Ob River can carry up to 150,000 cubic metres of gas. The tanker was loaded with LNG at Hammerfest in the north of Norway on 7 November and set sail across the Barents Sea. It has been accompanied by a Russian nuclear-powered icebreaker for much of its voyage.

"Nineteen thousand ships went through the Suez canal last year; around 40 went through the northern sea route. There's a huge difference."

[Firn]

The defeat of the Euro bond vigilantes?

In Europe the evolution of interest rates for governments bonds has been very different with several countries seeing very high levels and in some cases no access to funding. The fear was due to probability of default and potentially an exit from the Euro area, not so much inflation. But after a volatile period and following the statement of Mario Draghi supporting the Euro (no action yet) and the more recent agreement for funding for Greece and Spain, interest rates are coming back to levels which are not far from the historical average during the Euro period (and significantly lower than what these countries faced before joining the Euro).

With Monti in trouble the situation is better the quite a few feared. Anyway it is very difficult indeed to forecast something in Italian politics. I would hardly be surprised by the most surprising events.

---

Looked again at those 3 stocks:

Xerox 5.38 up from roughly 5
HP 10.77 up from roughly 10 - bough another third under 9.5
E.ON 14.04 down from roughly 15 - invested over a third today at +- that.

GDF Suez lost over 10% today and highlights some general problems of the European utility market but also some specific French ones. In this case the French government is a major shareholder and limits the price GDF (and other companies) can ask for it's gas. GDF is fighting a legal battle

PARIS (dpa-AFX) - Frankreichs grter Gasversorger GDF Suez will die von der Regierung verfgte Deckelung der Gaspreise im vierten Quartal gerichtlich kippen lassen. Einen entsprechenden Antrag habe das Unternehmen bereits vor dem hchsten franzsischen Gericht eingereicht, sagte ein GDF-Sprecher am Freitag. Der ehemalige Monopolist beschwert sich in diesem Jahr damit bereits zum dritten Mal und folgt damit dem Vorgehen von Konkurrenten. Die franzsischen Gasversorger wollen die Begrenzung von Preiserhhungen anfechten, um Tarife verlangen zu knnen, die ihre Kosten decken.

GDF Suez, an dem der franzsische Staat mit 35 Prozent beteiligt ist, hatte im Oktober zwar die Erlaubnis erhalten, seine Preise um zwei Prozent zu anzuheben. Beantragt hatte der Versorger aber eine doppelt so starke Erhhung. GDF argumentiert, dass nur so die gestiegenen Bezugspreise gedeckt werden knnten. Die Gasversorger waren bereits gegen die Vorgngerregierung vor Gericht gezogen, um die Umlegung der Importpreise auf die Kunden durchzusetzen. Damals hatte das Gericht im Sinn der Klger entschieden./jke/stw/he

After having watch the stock for quite some time I invested in it today, at roughly 15. Certainly we have seen quite a bit of volatility this year and the 10% + drops in a single day of E.ON and GDF are amazing for such huge and long-standing companies. We will see in a couple of years, I actually was mostly interested in buying some more. Of course with the general development of the market the balance sheet lof this year looks quite bright.

[Firn]

There was certainly trouble and Monti chose to act on his own by going to Napolitano....

Anyway the manovri di palazzo and with the parties have long started. The center-left candidate wants for good or not so noble reasons no "political" Monti, who could return as a leader of the center or center-right. He should conserve himself as technical choice for times of need.

Piazza Affari was hard hit, the spread has also grown. While I have to give the the report a closer look everybody knows that Italy is no country for young women, even less so then for young men.

[Surferbeetle]

Some have suggested parallels between today's situation and Wagner's story of Lohengrin, Elsa of Brabant, and Telramund during the seasonal opening at La Scala.

La Scala under fire for choosing Wagner before Verdi in battle of the birthdays, Tom Kington in Rome, The Guardian, Tuesday 4 December 2012 15.00 EST, http://www.guardian.co.uk/world/2012...r-verdi-battle

Monti quits political theatre for opera, By Guy Dinmore in Rome, December 7, 2012 6:01 pm, Financial Times, www.ft.com

U.S. Stocks Rise With Metals on China; Italy Bond Plunge, By Stephen Kirkland & Rita Nazareth - Dec 10, 2012 2:37 PM MT, Bloomberg News, http://www.bloomberg.com/news/2012-1...o-weakens.html

The NYT has an interesting take on a country analysis (economics, politics, history, and more) of Italy at: http://topics.nytimes.com/top/news/i...aly/index.html

_______________________

Profitably traded in and out of a French Bank with southern exposure earlier in the year, might go back in depending on how much/credible fear results from the current political uncertainty.

Currently doing ok with a US construction/mining/diesel power equipment company (volatility is useful), wish I had picked up more just before the US election.
______________

The World In 2030: Asia Rises, The West Declines, by TOM GJELTEN, December 10, 2012, NPR, http://www.npr.org/2012/12/10/166895...-west-declines

By the year 2030, for the first time in history, a majority of the world's population will be out of poverty. Middle classes will be the most important social and economic sector. Asia will enjoy the global power status it last had in the Middle Ages, while the 350-year rise of the West will be largely reversed. Global leadership may be shared, and the world is likely to be democratizing.

But the planet may also be racked by wars over food and water, with the environment threatened by climate change. Individuals, equipped with new lethal and disruptive technologies, will be capable of causing widespread harm. Global economic crises could well be recurring.

It all depends on how events develop over the next decade, according to a new report, Global Trends 2030 [PDF], prepared by the National Intelligence Council, comprising the 17 U.S. government intelligence agencies.

Global political leadership, however, is likely to be diffused, with no single country or alliance playing a dominant role.

"A growing number of diverse state and nonstate actors, as well as subnational actors, such as cities, will play important governance roles," the report says. "The increasing number of players needed to solve major transnational challenges — and their discordant values — will complicate decisionmaking."

_____________________

Earlimart - 10 Years, Youtube, http://www.youtube.com/watch?v=bRO8seMD-gU

[Firn]

According to our dear enlightened former PM Berlusconi Monti and his german-centric are to be blamed for bad state of the Italian economy. While I do not agree with some of the policies of Frau Merkel or Mr. Cameron or more then a couple of other politicians by far the biggest share of our current troubles is home-made. And the guy with the biggest influence in the last 20 years was mostly busy with bunga-bunga, delayed actions against the law as well as breaking it and personal business affairs.

Another big slice is the unhappy impact of supply-side globalisation in traditional Italian sectors with vastly increased competition. The increase in demand resulting in more export was not able to compensate the loss. In this case Germany got dealt the better cards with specific sectors booming due to heavy international demand.

The Scala bit is really just a storm in the tea cup but Mr.Balotelli scoring in the Summer was certainly not

---

I have now to clean up the portfolio to give the state as little tax money as possible. It was stupid to leave it for so late as the markets have generally gone up, should have sold some stock with negative return already during the Summer. This way I could have balanced the book with less friction.

[Firn]

The economist's view zoomed in on an interesting issue in this case with a post of Tim Taylor.

'Cautionary Details on U.S. Manufacturing Productivity'

Awhile back I asked Tim Taylor if it would be okay to reprint a post occasionally in full or in part, and he quickly and graciously said I could. As he notes, this is an important addendum to the standard story on manufacturing, productivity, and employment. The bottom line is that "the condition of U.S. manufacturing looks more ominous than the standard story" would have us believe:

Said McKinsey report states:

"A rich pipeline of innovations promises to create additional demand and drive further productivity gains across manufacturing industries and geographies. New technologies are increasing the importance of information, resource efficiency, and scale variations in manufacturing. These innovations include new materials such as carbon fiber components and nanotechnology, advanced robotics and 3-D printing, and new information technologies that can generate new forms of intelligence, such as big data and the use of data-gathering sensors in production machinery and in logistics (the so-called Internet of Things). ...

Important advances are also taking place in development, process, and production technologies. It is increasingly possible to model the performance of a prototype that exists only as a CAD drawing. Additive manufacturing techniques, such as 3-D printing, are making prototyping easier and opening up exciting new options to produce intricate products such as aerospace components and even replacement human organs. Robots are gaining new capabilities at lower costs and are increasingly able to handle intricate work. The cost of automation relative to labor has fallen by 40 to 50 percent in advanced economies since 1990."

Krugman discusses the role of the human versus the physical capital.

So the story has totally shifted; if you want to understand what’s happening to income distribution in the 21st century economy, you need to stop talking so much about skills, and start talking much more about profits and who owns the capital. Mea culpa: I myself didn’t grasp this until recently. But it’s really crucial.

I enjoyed his earlier 'wonkish' post about the role of technology. Indeed not all technology is created equal in their effects on the marginal product of labor.

So it’s wrong to assume, as many people on the right seem to, that gains from technology always trickle down to workers; not necessarily. It’s also wrong to assume, as some (but not all) on the left sometimes seem to — e.g., William Greider — that rapid productivity growth is necessarily jobs- or wage-destroying. It all depends.

What’s happening right now is that we are seeing a significant shift of income away from labor at the same time that we’re seeing new technologies that look, on a cursory overview, as if they’re capital-biased. So we could be looking at my technology B story above.

There are, however, other possibilities — including the possibility that the fact that we don’t actually have perfect competition is playing a big role here.

So that’s the story so far. And it’s important stuff.

I think it would be worthwhile to look more at this stuff also in the European context. Personally I think it is a highly interesting topic. Overall I thought that great built-up in capital in the last 60 years cpuled with the marginal product of capital and the demographic trends would result in a generally more worker-biased shift. The simplified cited model of the role of technology might be part of the answer.

[Firn]

Yesterday evening I took a closer look at some financial statements, with some interesting results. ENEL for example did indeed trade a some point in recent times under the cash per share.

Mostly I looked at the results of stocks I own. Overall it was quite nice, but as written before such bull runs are always a bit two-edged if you have a hard time to find other good investements outside of stocks...

It is always nice to see some contra given. Anyway I will post the latest three trades, at least the price for which I got hopefully more value. Note that this concerns the small part of the portfolio wich is directly invested in equities. The far bigger equity part is in index funds, mostly of the (physical) ETF type.

E.ON: ~15
HP: ~10
Xerox: ~5

Buying fees are roughly 0.5%, portfolio fees 0.1%. Prices in €. Trades happened in the last two weeks. Obviously the sample is (too) small but it will be easier to manage.


We will see how things go in a couple of years. Hopefully we will not have forgotten this thread, but maybe this might be a good thing as good news doesn't create as many posts.

P.S: I just noted the almost perfect price scale of 5-10-15. Funny.

E.ON went down from ~15 to ~13€, a brilliant investment in a strong market
H.P did not too badly from ~ 10 to 12,8€ not too shabby.
Xerox gain some from 5 to 6€

So if one invested 30 € in each stock one has now (with fees but without dividends) roughly 100€ compared to 90€ you had a quarter ago. Not too bad especially if we consider that the € roughly gained 10% on the $. An U.S American could have got a nice return with those three combined.

[Firn]

Tomorrow we will have the last big meeting before for the elections. Let us hope that this sacred duty goes well, especially for the country. It is always a bit of a hassle to get everything right but our district team is good.

Personally I hope we get a clear result with a moderate and pragmatic coalition. History has shown that this is highly unlikely and a look on the lists (from Wiki) shows a big part of the problem:

Per il rinnovo della Camera dei Deputati e del Senato della Repubblica risultano candidate le seguenti liste o coalizioni di liste:[92][93]

Coalizioni di liste

Coalizione avente come leader Pier Luigi Bersani, denominata Italia. Bene Comune e composta da: Partito Democratico,[n 1] Sinistra Ecologia Libertà,[n 2] Centro Democratico,[n 3] Partito Socialista Italiano,[n 4] Moderati,[n 5] Il Megafono - Lista Crocetta,[n 6] Südtiroler Volkspartei,[n 7] Verdi Grüne Vërc,[n 8][94] Autonomie Liberté Démocratie.[n 9][95]

Coalizione avente come leader Silvio Berlusconi, composta da: Il Popolo della Libertà,[n 10], Lega Nord,[n 11] Fratelli d'Italia,[n 12] La Destra,[n 13] Moderati Italiani in Rivoluzione,[n 14] Grande Sud,[n 15] Movimento per le Autonomie,[n 16] Intesa Popolare,[n 17] Partito Pensionati,[n 18] Liberi per una Italia Equa,[n 19] Basta Tasse,[n 20] Cantiere Popolare.[n 21]

Coalizione avente come leader Mario Monti, denominata Con Monti per l'Italia[n 22] e composta da: Scelta Civica,[n 23] Unione di Centro,[n 24] Futuro e Libertà per l'Italia,[n 25] Movimento Associativo Italiani all'Estero.[n 26][96]

Coalizione avente come leader Ottavio Pasqualucci, composta da: No alla Chiusura degli Ospedali,[n 27] Dimezziamo lo Stipendio ai Politici,[n 28] Viva l'Italia.[n 29]

Yes sometimes reading those names one doesn't know if one should laugh or shed tears. Below we have neo-facists, rurals, autonomists, democrats, atheists, seperatists, feminists, ?, neo-fascists, ?, seperatists, seperatists and so forth. Luckily they will play just a small role apart form the MoVimento 5 Stelle.

CasaPound Italia,[n 30] avente come leader Simone Di Stefano
Civiltà Rurale Sviluppo,[n 31] avente come leader Enzo Bosio
Comunità Lucana,[n 32] avente come leader Michele Somma
Costruire Democrazia,[n 33] avente come leader Massimo Romano
Democrazia Atea,[n 34] avente come leader Carla Corsetti
Die Freiheitlichen,[n 35] avente come leader Ulli Mair
Donne per l'Italia,[n 36] avente come leader Maria Cristina Sandrin
Fare per Fermare il Declino,[n 37] avente come leader Oscar Giannino
Fiamma Tricolore,[n 38] avente come leader Luca Romagnoli
Forza Nuova,[n 39] avente come leader Roberto Fiore
Indipendenza per la Sardegna,[n 40] avente come leader Pietro Murru
Indipendenza Veneta,[n 41] avente come leader Lodovico Pizzati
Insieme per gli Italiani[n 42]
Io Amo l'Italia,[n 43] avente come leader Magdi Cristiano Allam
I Pirati,[n 44] avente come leader Marco Marsili
Italiani per la Libertà[n 45]
La Base,[n 46] avente come leader Efisio Arbau
L'Alto Adige nel Cuore[n 47]
Liberali per l'Italia - PLI,[n 48] avente come leader Renata Jannuzzi
Liga Veneta Repubblica,[n 49] avente come leader Fabrizio Comencini
Lista Amnistia, Giustizia e Libertà,[n 50] avente come leader Marco Pannella
MoVimento 5 Stelle,[n 51] avente come leader Beppe Grillo
Movimento Eudonna,[n 52] avente come leader Giovanna Sorbelli
Movimento Naturalista Italiano,[n 53] avente come leader Gabriele Nappi
Movimento Politico Pensiero Azione,[n 54] avente come leader Antonio Piarulli
Movimento Progetto Italia - MID,[n 55] avente come leader Marina Petrini
Movimento Staminali d'Italia,[n 56] avente come leader Erika Graci
Movimentu Europeu Rinaschida Sarda,[n 57] avente come leader Salvatore Meloni
Nation Val d'Outa[n 58]
Partito Comunista - Sinistra Popolare[n 59]
Partito Comunista dei Lavoratori,[n 60] avente come leader Marco Ferrando
Partito Comunista Italiano Marxista-Leninista,[n 61] avente come leader Domenico Savio
Partito del Sud - Meridionalisti Unitari,[n 62] avente come leader Andrea Balia
Partito di Alternativa Comunista,[n 63] avente come leader Adriano Lotito
Partito di Azione per lo Sviluppo,[n 64] avente come leader Alfonso Luigi Marra
Partito per Tutti - Partei für Alle[n 65]
Partito Repubblicano Italiano,[n 66] avente come leader Franco Torchia
Partito Sardo d'Azione,[n 67] avente come leader Giovanni Angelo Colli
Popolari Uniti,[n 68] avente come leader Antonio Potenza
Progetto Nazionale,[n 69] avente come leader Piero Puschiavo
Rialzati Abruzzo - Abruzzo Futuro,[n 70] avente come leader Carlo Masci
Rifondazione Missina Italiana,[n 71] avente come leader Raffaele Bruno
Riformisti Italiani,[n 72] avente come leader Stefania Craxi
Rivoluzione Civile,[n 73] avente come leader Antonio Ingroia
Tutti Insieme per l'Italia,[n 74] avente come leader Antonio Corsi
Unione Italiani Sudamerica[n 75]
Unione Padana,[n 76] avente come leader Giulio Arrighini
Unione Popolare,[n 77] avente come leader Maria Di Prato
Unione Sudamericana Emigrati Italiani[n 78]
Union Valdôtaine Progressiste[n 79]
Vallée d'Aoste[n 80]
Veneto Stato,[n 81] avente come leader Antonio Guadagnini
Voto di Protesta - Diritto alla Dignità,[n 82] avente come leader Giuseppe Cirillo

[Firn]

Really, what should one say. Even if the moderate center-left coalition wins the camera the senate looks absolutely ungovernable.

I mean Berlusconi winning the senato, Grillo in many regions over 30%. What has this country become?

It would be all quite funny if it wouldn't be almost true.

Ah che bello scappa'...

[Firn]

I tried to collect my wits after the 'risultato ingovernabile':

1) La madre degli imbecilli e' sempre incinta, the mother of the idiots is always pregnant. The success of the Berlusconi&company is hard to stomach, as many voters gave him their vote and trust already two times and should have seen what he has done with it twice. He came within 0,4% of winning the camera and was only narrowly beaten in the senato. Disgraceful.

2) Grillo and his movement hit indeed like a tsunami and has changed the political game, as with such a strong third force he has broken up the logic of the last twenty years. Until the triumph of the M5S, which became from 0% the strongest political party a relative majority in the popular vote resulted also in an absolute majority in the senato. Even with that advantage the smaller parties within a coalition could blow up governments as we have seen so often. It is rather shocking to note against the backdrop of our chronically unstable coalitions that we have now arguably the most gridlocked senato of the last twenty years....


So, what next? I see three paths:

1) The center-left, possibly with the center with or without Monti try to form a minority government. In this case the support of at least some Grillini will be key. In Sicily there was some moderate action and support by members of the M5S and Grilli and some of his movement did state that they were willing to vote for laws case by case.

Even a relative short duration would allow us to get a new president, which in turn could dissolve the chambers. Our current one can not do so if I understood the situation correctly as he is very close to end his term.

2) A great coalition with the right. Very difficult to imagine that, we have quite leftist members in the center-left coalition and quite rightist on the right plus persons like Silvio in the midst of all. The chances that nothing works are high. The M5S might profit from it's predictable failure. This might lead to path 3 with even better cards for Grillo.

3) New elections. The old parties possibly fear rightly a Grillo landslide if we have new elections. If you look at the numbers he is not that short from getting the majority in the camera and the senato. Still it is hard to see how we can avoid them and who knows what the result will be?

Not bad either. BTW the pencils Italy used to vote are at least 'engineered in Germany' by Faber-Castell. And they also gave this great songwriter his nickname...

[Firn]

I'm a bit sorry that I center the thread on Italy, but I do think it is one of the most important topics. La Repubblica does of course report the words of dear Peer, who called Peppe and Silvioclowns. I just hope he won't send us the cavalry, supported by blogging industry captains who sponsor his campaign!

Of course he is in this rare case pretty much spot on, but he was of course dead wrong to say it in public, especially while our president stays for three long days in Germany...

Far more important are the manovre di palazzo, the political maneuvers going on. And the words used by some is far more foul then 'clowns':

Dove ancora campeggia il post dal titolo: "Bersani, morto che parla". E dove Grillo sembra chiudere in maniera netta a qualsiasi forma di collaborazione organica con il Pd definendo Bersani stalker politico" che "da giorni sta importunando il M5S con proposte indecenti invece di dimettersi".

"Ha passato gli ultimi mesi a formulare giudizi squisitamente politici - si legge nel pezzo, in cui Grillo elenca tutti gli attacchi (a dir la verit pi che mai ricambiati) ricevuti in campagna elettorale dal segretario democratico: dal "autocrate da strapazzo" al "ci porta al disastro". "Ora questo smacchiatore fallito - si legge ancora - ha l'arroganza di chiedere il nostro sostegno (...) Il M5S non dar alcun voto di fiducia al Pd (n ad altri). Voter in aula le leggi che rispecchiano il suo programma chiunque sia a proporle. Se Bersani vorr proporre l'abolizione dei contributi pubblici ai partiti sin dalle ultime elezioni lo voteremo di slancio (il M5S ha rinunciato ai 100 milioni di euro che gli spettano), se metter in calendario il reddito di cittadinanza lo voteremo con passione".

Grillo also stated yesterday that Berlusconi bought 'most of his votes'. Still it is Italians insulting Italians, dear Peer...

I have a hard time to see any coalition between the three relevant political forces which seem to hate each other with quite some passion. Still path 1) which I outlined above seems to be the most likely but we will see with little doubt new election before 2015, even before. I hope that we get the election of the new presidente della Repubblica done as soon as possible.

[davidbfpo]

Europe has spent hundreds of billions of euros rescuing its banks but may have lost an entire generation of young people in the process, the president of the European Parliament said.

Since the region's debt crisis erupted in Greece in late 2009, the European Union has created complex rescue mechanisms to prop up distressed countries and their shaky banking sectors, setting aside a total of 700 billion euros.

But little has been done to tackle the devastating social impact of the crisis, with more than 26 million people unemployed across the EU, including one in every two young people in Greece, Spain and parts of Italy and Portugal.

Link:http://www.reuters.com/article/2013/...r&dlvrit=56943

A Reuters article citing at length the German Social Democrat who sits as President of the European Parliament, without doubt he is trying to make a mark as an EU summit approaches later this week. If there is one EU institution that is irrelevant in policy-making and democratic accountability it is this parliament - a very comfortable place to to sit and pontificate.