1. The US down, but not-yet -out. Some of us have easily dismissed the idea of a ” double dip” in the world, and even the US, but after yesterday’s weekly job claims and the latest Philly Fed survey, the notion for the US, is becoming not quite so simple to pour scorn on. The run of considerably disappointing data continues with now two of the most important coincident /leading indicators looking quite troubling. Moreover for anyone who believes in the persistent dominance of the US economy, yesterday’s news was clearly not good.

1. Are US financial conditions more important than the US economy, though?  Returning to a theme I have discussed previously , the big question more people should ask, is which is more important for the rest of the world, the US economy, or its financial conditions?

Following the collapse of Lehman Brothers in Autumn 2008, the world was hit by two shocks, one the subsequent recession in the US, two the freezing of global, but especially US financial markets. US financial conditions tightened dramatically. In recent weeks, not least because of the polices of the Fed, US financial conditions continue to be very accommodative, despite the evidence of the US economy. This means, US corporate, and the rest of the world don’t face this repeat shock-at least yet.

In this regard, amongst many important pieces to read on the beach from our global ECS team , is Jari Stehn’s US Daily of August 17^th. In it, he shows in detail how US financial conditions have moved, especially demonstrating the importance of the Fed’s unconventional steps. This is probably going to be extremely important if the US economy continues with this “soft patch”.

Linked to the Fed’s policies, the latest loan officers survey suggests there is a further improvement going on in terms of credit availability, etc. Similarly , our Financial Stress Index ( GS FSI) after its brief May/June hiatus, remains quite  quiet..

1. US corporates are certainly not out, and maybe nowhere down. One of the most interesting developments of the week includes news of Levi Strauss launching ” Denizen”, which according to the FT story, is the first time this iconic cultural brand of the US’s glory days has launched a brand outside the US. In a second equally fascinating development, McDonalds announced they had undertaken a CNY denominated private placement in Hong Kong.

I suspect we will see plenty more of these two  kind of developments.

1. US call centres as cheap as India? In another sign that the US is not “out”, the FT reported a fascinating story earlier in the week, quoting the CEO of Genpact, that they now found it as cheap to employ people in the US in call centres as India, and were planning to treble their workforce in the next 3 years.

1. US education still the best. In probably the most important sign that the US is far from out- although this could be a lagging statistic, in the latest well recognized Shanghai Jia Tong Top 500 Universities of the World survey , the Top 10  still includes 8 from the US. In fact, the only 2 outside were Cambridge (5^th) and Oxford (10^th).  The US actually has 54 of the top 100.   As a sign of things changing, China now has 54 of the top 500,  which has more than doubled since 2004, while Japan has 25, declining steadily. The UK has 38 still, which is none too shabby in my judgement.

1. The world is not the US. Despite the highly disappointing US data, our Advanced Global Leading Indicator actually ticked up slightly in August, as discussed by Anna Stupnytska  and Stacy Carlson after its release yesterday.  Of course, most financial participants think this is not a sustainable position with the US evidence, but we shall see. In this regard, the slight ongoing easing of Chinese financial conditions is highly important, as is  the -growing-positive noises coming from German policymakers , highly interesting.  The Bundesbank added their voice to that of the Economics Ministry yesterday, both now talking about self sustaining growth.

It is going to be extremely interesting to watch  the next indicators out of Germany, especially anything to do with domestic demand. In this regard, another important ” read” was Dirk Schumacher’s dismantling of the over rated German ZEW index that he published on August 18^th. In the same spirit, Nick Kojucharov’s  European Chart of the Day on the same 18^th, showing just less infrequent it has been than many people realise-if you go back far enough-for European GDP to outpace the US, is another important read.

1. Even the UK is not the US, despite the fiscal aggressiveness. Yesterday we had two fresh “positive” surprises to puncture the remarkable gloom that transmits via the UK media, with both retail sales and the latest CBI Industrial Trends survey, coming through on the upside. Looking at the UK evidence and contrasting it with the US is especially interesting given all the obvious similarities and the fact that the UK has embarked on such a tough fiscal tightening. The UK is clearly showing some signs of slowing in some areas, but it is far from widespread and the gloom here seems way overdone still.

1. Markets. So the “tug of war” between the weak US and the powerful BRIC led rest of the world continues. The St Legers is not that far away now, so don’t too many of you go announcing your retirement , just yet…….!

Från broker rapport idag:
* Vitamin prices also rising - In particular, Vitamin E prices have increased sharply in the past few weeks on the back of plant maintenance activity, a recovery in the size of the Chinese livestock population, and general market growth. This is positive for DSM, and, to a far lesser extent, BASF.

Jag känner starkt att M&A och LBOs äntligen kommer bli ett massivt tema på börsen snart. Mer ska skrivas om detta,  men tills vidare räcker det med följande typiskt engelskt “master of the universe” aktiga kommentar:

“We are optimistic about the intermediate term resurgence of the market for corporate control and the opportunities it will present for us” (Erik Mindich i Eton Parks senaste månadsbrev)

Varnar för kommande krasch

http://www.tradersnarrative.com/tony-robbins-channels-paul-tudor-jones-ii-issues-caution-4568.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+TradersNarrative+%28Trader%27s+Narrative%29

En av höstens absoluta höjdpunkter kommer ju bli lanseringen av Yellow Revolution under Q4. Det som ska få Eniro att gå från en “search engine” till en “purchase engine”……Ett paradigm skifte på gula sidorna. Världen kommer aldrig vara sig lik efter detta igen.

Varför tycker alla att det är så svårt att blanka?
När kommer Sveriges första “short only” hedgefond?

http://myinvestingnotebook.blogspot.com/2010/05/jim-chanos-power-of-negative-thinking.html

Aug. 4 (Bloomberg) — Henderson Land Development Co., the developer controlled by Hong Kong billionaire Lee Shau-kee, said it sold a house in one of the city’s most expensive districts for HK$660 million ($85 million).

The price agreed to by an unidentified buyer for the 13,033 square-foot (1,210 square-meter) house in the south side of Hong Kong Island is equivalent to HK$50,641 a square foot, Henderson Land said on its website today.

The value of Hong Kong luxury homes may climb 10 percent in the second half on record-low mortgage rates and strong economic growth, according to Jones Lang LaSalle Inc. Hong Kong’s government is attempting to curb a 38 percent surge in home prices since the beginning of 2009 amid concern housing is becoming unaffordable.

“This shows the demand for high-end luxury properties is still going strong,” said Wong Leung-sing, an associate director at Centaline Property Agency Ltd.

Luxury homes are those with at least 1,000 square feet or costing at least HK$10 million.

Henderson, Hong Kong’s fifth-biggest builder by market value, said in October that it sold 24 luxury flats for as much as a record HK$88,000 a square foot. Eight months later, it said 20 of the sales fell through, sparking investigations by the government and police. The company has denied any wrongdoing and the police and government officials have declined to comment on their probes.

Henderson will take a charge of HK$734 million against earnings after prospective buyers canceled purchases of the apartments at the 39 Conduit Road luxury development in the Mid- Levels district, it said on June 15.

För det första så var det sammanlagda intrycket av eventet, som så ofta på finansmarknaden när man bygger upp stora förväntningar inför, en liten besvikelse. Coachen, som må vara anonym i detta sammanhang hade mer än 15 års erfarenhet från Wall Street från firmor som Morgan Stanley, UBS och Citigroup levde inte riktigt upp till mina höga förväntningar eller till de $500 per timme som chargades. Man kanske måste gå upp en prisklass för att verkligen lära sig sluta förlora miljoner….

Hur som helst, det kändes ändå som ett nyttigt första skrapande på ytan vad gäller detta ämne. Jag kommer fortsätta att leta tills jag hittar min Ari.

Det hanns såklart gå igenom en hel del under våra timmar men de fem saker som jag kommer ihåg nu när jag bläddrar igenom mina notes är:

1/ understand your inner game of money - understand your  ”Financial Capacity”

2/ recognize and stop your sabotage patterns that cause your YOYO effect

3/ do not fear staying out of the game for too long

4/ do not expect to lose

5/ do not expect the market to care about your P&L

Coachen kom tillbaka till samma ganska självklara citat från Darwin:

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change”

Over and out. Nu tar jag semester.