Hasbro, second largest toymaker in the US, confessed it would miss revenue estimates. Christmas wasn’t kind. Despite “double digit growth” in emerging markets, revenues fell by 2% for 2012 and by 3.8% for the quarter. Other corporations are in a similar predicament. But substantive inflation would have covered it up—not that the Fed hasn't been trying.
Contributed by James Burgess of Oilprice.com. The US is obsessed with reducing its reliance on foreign oil, yet Amir Adnani, CEO of Uranium Energy Corp. in Texas, has stated that “the U.S. is more reliant on foreign sources of uranium than on foreign sources of oil.” But he has a new way of extracting uranium. Coming to a backyard near you.
European talking heads are reassuring us on an hourly basis, lest we forget, that the worst of the debt crisis is over. The Japanese trade deficit, a measure of reality, not words, tells a different story about the crisis in Europe. And about troubles coming to a boil in China. But neither can be cured by Prime Minister Shinzo Abe’s plan to decapitate the yen.
On January 22, 2012, French presidential candidate François Hollande shook up the banks: “It has no name, no face, no party, it will never be candidate, it will never be elected, yet it governs: that enemy is the world of finance,” he said. Freed “from all rules,” it “took control of the economy, of society, and even our lives.” He’d fight it, and promised tough reforms. But these days, you’d think he is being tutored by JPMorgan Chase CEO Jamie Dimon.
Facebook isn’t over the hill, exactly. Last October, it announced that 1 billion people a month used it, in a world of 7 billion. Leaping from one milestone to the next. But in key markets, such as the US where it derives most of its revenues, it is plateauing, and a shudder-inducing D-word has snuck into polite conversation: declining. Now we have a new reason.
Contributed by John C.K. Daly of Oilprice.com. America’s energy industry has a new threat – computer malware, an ominous portent for the U.S. power grid. Apparently, in October 2012 a computer malware virus invaded a turbine control system at a power plant when a technician “unknowingly” inserted an infected USB computer drive into the network.
Congress excels at enriching corporate welfare programs—in this case, Medicare. Ironically, it happened while Congress is struggling to rein in Medicare’s gargantuan deficits with belt-tightening measures that would hit people who paid into the system throughout their working years. This time, the prime beneficiary was Big Pharma, particularly one company....
Contributed by Chriss Street. The Algerian hostage crisis ended with the death of at least 37 foreign hostages and most of the jihadi kidnappers after special forces blasted their way into the gas complex. Algeria, which won a decade-long Civil War against Islamists in 2000, understands this is a war of attrition with al-Qaeda spreading across North Africa.
Much digital ink has been spilled about the US oil & gas boom, and whether or not it will lead to energy independence, or even turn the US into an oil exporter. Now a “confidential” report by the German version of the CIA, the Bundesnachrichtendienst, seeped to the surface. It sketched out the boom’s geopolitical consequences. Biggest loser? China.
Contributed by Bianca Fernet. Last night, I passed a sign that called for the nationalization of the Argentine Railway System, which was privatized 20 years ago. It remains highly subsidized and fraught with dangerous problems. I couldn’t help but be drawn in, as I'm currently re-reading Ayn Rand’s sexy ode to free markets and railroads, Atlas Shrugged.
Japan’s LDP went all out last year to re-grab power. Its platform: print and borrow with utter abandon to create asset bubbles and inflation, and to demolish the yen. Phenomenally successful! So far. But now, US automakers are squealing; they want President Obama to fight back—though the US has been printing and borrowing with utter abandon for years.
Contributed by Chriss Street. This week marks the second anniversary of the birth of the “Arab Spring.” Dictators in Tunisia, Egypt, Libya, and Yemen were overthrown and rebels control much of Mali and Syria. The US and Europe encouraged this revolutionary fever in the naive expectation that these countries could evolve into European-style welfare states.
“Repression” is what Richard Fisher, President of the Dallas Fed, called “the injustice of being held hostage to large financial institutions considered ‘too big to fail.’” He sketched out the destructive impact of these TBTF banks that, as “everyone and their sister knows,” were “at the epicenter” of the financial crisis. And he offered a “simple” plan for coming to grips with them. But he did something else: he defined BIG.
Contributed by Daniel J. Graeber of Oilprice.com. In its January report, OPEC said the US may post the highest oil production increase among non-member states in 2013, rising by 490,000 barrels per day to reach 10.4 million bpd. Yet production from OPEC members Iran, Iraq, and Saudi Arabia declined. And now, OPEC is worried about the US Congress.
France’s economic foundations are cracking. Unemployment is rising incessantly. The private sector is comatose. Car sales sank 13.9% in 2012, from a lousy 2011; sales by its native automakers plunged even more. Now home sales are grinding to a halt. And the finger-pointing has already started.
A sadly familiar theme in the US—the growing ranks of the working poor—was fleshed out today. But the report did something else: it added graphic details to the conundrum of US healthcare spending: while it ballooned to $2.7 trillion, 17.9% of GDP, or $8,680 per capita, households have lowered their share. So have businesses. What gives?
Contributed by By James Stafford of OilPrice.com. Kenya has become the hottest oil and gas venue in East Africa since the big discoveries last April. All eyes are on Kenya in 2013 to see how quickly - and economically - it can develop those discoveries into production.
Normally, the media would have given it priority: French President Hollande and Prime Minister Ayrault have become more unpopular than ever before. But the poll was shoved into the background by France’s bombing campaign in Mali—which released an avalanche of positive comments and support from all sides, at least in France. With impeccable timing.
Contributed by Daniel J. Graeber of Oilprice.com. Unlikely that Venezuelan President Hugo Chavez will return to power after missing his inauguration. That leaves Vice President Nicolas Maduro in de facto power of a country that is dependent on a poorly-managed oil sector and has moved closer to rogue regimes like Syria and Iran.
Bernd Scheifele, CEO of HeidelbergCement—one of the world’s largest producers of construction materials with nearly 55,000 employees at 2,500 locations in over 40 countries—lashed out against European politicians and their inability to bring budgets under control. But he reserved the most devastating judgment for the euro itself.