World economy talk

[Monseratto]

China is still in Google's mind but the goverment might take Google's actions as an insult and will make it hard for the company to stay in the country...

Analysts say signs point to Google exiting the China search market. They say Google likely will keep its other businesses there, such as its Android smart phones, but point out the other businesses won't generate much revenue for perhaps years. Google declined comment on the report. Its CEO, Eric Schmidt, has said the company would soon announce a resolution to its conflict with China.

Google still could entirely leave China, at least for now, but observers doubt that will happen.

Google is striving to build more revenue sources. Departing China hardly seems like part of any revenue growth plan, says Rob Lutts, chief investment officer for Cabot Money Management, a Google shareholder.

"It's mind-boggling. I would have loved to have been in that boardroom to hear that discussion: how they decided to walk away from the largest single growth market in the world," he said. "I would guess that they put principal above business.

"Will that pay off in the long run? That's a major question mark."

China ended 2009 with 384 million Internet users, up 29% from 2008, says the China Internet Network Information Center.

That's a lot of growth to walk away from, said Whit Andrews, an analyst for research firm Gartner: "Looking at the way Google is acting, if I were a shareholder, I would be saying 'what are you thinking?'"

Google can count on rising revenue from areas such as mobile and display ads in the U.S. and Europe, but not at the growth level it could expect from search ads in China, where Internet use and online ads are starting to take off, says Darren Chervitz, co-manager of the Jacob Internet Fund, which owns shares in Google and Baidu.

[safeorigin]

just forecasting the weather

[uls]

google leaving china doesn't affect weather

weather report:

massive outflow from money market funds

money market yield too damn low

where's all that money going?

risk assets

risk taking is sooo back

everyone's chasing yield

remember when everyone was scared shitless and only held cash and US treasuries? (who cares about return on capital, i just want return OF capital!!)

well, now it's the opposite (who cares about return of capital, i want return ON capital!!)

[safeorigin]

hey, was just forecasting the "weather" not the climate ;)

[uls]

ok

weather forecast --

this week, investors will be looking at Europe

there was a bit of calm the past weeks when the EU members said they will bailout Greece

now, not so sure

Germany is having second thoughts

Germany even wanted to change EU rules that will allow EU members to be kicked out (as of now, nobody can be kicked out)

Greece wasnt very happy about that and warned that they'll go to the IMF (which will be totally embarrassing for the EU) if the EU won't help Greece

we can see the tension in the euro

---

this week, lots of US data coming

existing home sales, durable goods, new home sales, EIA report, jobless claims, GDP, consumer sentiment

some of them will be market moving

---

investors will be watching China-US FX and trade (protectionism) tensions

(the US wants China to let the CNY appreciate)

[Monseratto]

Germany is having second thoughts

Germany even wanted to change EU rules that will allow EU members to be kicked out (as of now, nobody can be kicked out)

Greece wasnt very happy about that and warned that they'll go to the IMF (which will be totally embarrassing for the EU) if the EU won't help Greece

we can see the tension in the euro

That would be interesting to watch this week...

[uls]

yep

Germany and France are at odds what to do with Greece

there's pressure from inside Germany on Merkel not to bail out Greece. So Merkel is backing out

no EU bailout means Greece will have to go to the IMF

but Sarkozy doesnt want Greece to go to the IMF

Sarkozy wants the EU to fix its own problems

(the IMF is Washington based... so it would be terribly embarrassing for the EU if one of its members has to go to the IMF)

check out Euro action:

[uls]

+++++++++++++++++++++++++

[uls]

the bond market now considers USG debt riskier than some corporate debt

the bond market didn't wait for the ratings agencies to downgrade the US

the bond market downgraded the US themselves

Obama Pays More Than Buffett as U.S. Risks AAA Rating
http://www.bloomberg.com/apps/news?p...d=aHjVRrVodt4g

March 22 (Bloomberg) -- The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.

Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.

some companies that the bond market considers lower risk than the USG:

Berkshire, P&G, J&J, Lowe's, Abbott

Berkshire Hathaway’s 1.4 percent notes due February 2012 yielded 0.89 percent on March 18, 3.5 basis points, or 0.035 percentage point, less than Treasuries, composite prices compiled by Bloomberg show. The Omaha, Nebraska-based company, which is rated Aa2 by Moody’s and AA+ by S&P, has about $157 billion of cash and equivalents and about $52 billion of debt.

P&G, the world’s largest consumer-products maker, saw the yield on its 1.375 percent notes due August 2012 fall to 1.12 percent on March 18, 6 basis points below government debt. The Cincinnati-based company, rated Aa3 by Moody’s and AA- by S&P, makes everything from Tide detergent to Swiffer dusters.

New Brunswick, New Jersey-based Johnson & Johnson’s 5.15 percent securities due August 2012 yielded 1.11 percent on Feb. 17, 3 basis points less than Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The world’s largest health products company is rated AAA by S&P and Moody’s.

Yields on bonds of home-improvement retailer Lowe’s in Mooresville, North Carolina, drugmaker Abbott Laboratories of Abbott Park, Illinois, and Toronto-based Royal Bank of Canada have also been below Treasuries, Trace data show.

[uls]

gold falls below $1,100

[Monseratto]

Back to Google. Instead of quitting, it probably wants to be kicked out of the Chinese search engine market with its chin held high ...

Google stops censoring search results in China

Google has stopped censoring its search results in China, ignoring warnings by the country's authorities.

The US company said its Chinese users would be redirected to the uncensored pages of its Hong Kong website.

China's official Xinhua news agency said Google had violated a "written promise" and was "totally wrong" to end censorship of its Chinese-language search portal Google.cn.

Chinese government officials had warned Google repeatedly that it would face consequences if it did not comply with the country's censorship rules.

On Sunday, state media in China had attacked Google for what they described as the company's "intricate ties" with the US government.

Google provided US intelligence agencies with a record of its search engine results, the state-run news agency Xinhua said.

While Google is the world's most popular search engine, it is a distant number two in the Chinese market, which is dominated by Baidu.

However, because of the size and growth rate of China's internet population, any loss of business there is likely to harm Google's future growth prospects.

Analysts said that initially Google's prospects would not be dented by shutting down Google.cn as it is responsible, at most, for 2% of its annual $24bn (£15.9bn) revenue.

"Near-term, not that big a deal," said Tim Ghriskey, chief investment officer at Solaris Asset Management. "Long-term, if this stays in place, it's a negative. China is certainly a great growth opportunity."

It is well-known that China operates one of the most sophisticated and wide-reaching censorship systems in the world.

Thousands of police officers are employed to monitor web activity and many automated systems watch blogs, chat rooms and other sites to ensure that banned subjects, such as Tiananmen Square, are not discussed.

[leonleon]

gold falls below $1,100

Mag tuloy-tuloy na kaya yan?

[safeorigin]

meh, it should inevitably have corrections in the future

interesting discussion though:
[ame="http://www.youtube.com/watch?v=o7moo-O2Rok"]YouTube- CrossTalk on Billionaires: The money tumor[/ame]

[uls]

leonleon:

Mag tuloy-tuloy na kaya yan?

USD strength holding down gold price

USD index back above 80

bullion, jewelry demand in India has yet to pick up

don't know if India's rate hike will affect gold demand there

Gold ETFs reducing long positions


Gold ‘Panic’ Buying Ends, Reducing Austrian Coin Sales by 80%
http://www.bloomberg.com/apps/news?p...d=alkB2RgF2eCI

March 19 (Bloomberg) -- Muenze Oesterreich AG, the Austrian mint that makes the best-selling gold coin in Europe and Japan, said sales have fallen 80 percent this year after buyers began to regain confidence in the global economy.

“We’re getting back to business as usual rather than the hectic, panic demand we’ve seen over the last couple of years,” Vienna-based Marketing Director Kerry Tattersall said late yesterday in an interview.

Sales of all gold coin types fell to 53,930 ounces in the first two months of 2010, compared with 267,091 ounces in the same period a year before, he said. Gold bar sales fell 74 percent to 69,636 ounces. Muenze Oesterreich minted a record 1.04 million ounces of gold coins in 2009, including 903,047 of its top-selling 1-ounce Philharmonic coins.

“There’s no more upward surge in gold price to titillate buyers,” said Tattersall, who retires this year after more than two decades with the mint. “A lot of people feel more relaxed about the economic crisis.”

not a lot of upside for gold

[Monseratto]

If you want to do business anywhere, you have to agree to the terms of the landowners. However if you are a company with a big western ego like Google, who screws those rules after the fact that they agreed to it in the first place.

The chief concern is whether Google poisoned its business in one of the world's most promising Internet markets. One analyst critical of Google's move predicted the maneuver will cause the company's stock to fall by as much as $50 — or about 10 percent — in the coming weeks.

The stock fell $8.50, or 1.5 percent, to $549 Tuesday.

Gartner Inc. analyst Whit Andrews said any financial pain Google suffers will be worth the respect the company wins for refusing to bow to a government's demands.

Other foreign companies that have angered the Chinese government have been stymied in the country. American defense contractor Raytheon Co. closed its Beijing offices last year in frustration over its inability to win contracts for commercial aviation and consulting services. American executives believed Raytheon was being penalized for selling its Patriot missiles to Taiwan.

TOM Online, a provider of online and mobile services in China that is owned by a Hong Kong tycoon, said it would not renew an alliance with Google to avoid violating any Chinese laws. Owners of Chinese businesses also may be more reluctant to advertise on Google for fear of reprisals.

Good luck to Google...

[uls]

looks like the EU really won't/can't bail out Greece

Greece will have to go to the IMF

someone told me to check Euro action against Swiss Franc






EUR/USD

[uls]

nicer chart

[uls]

[safeorigin]

and in related news. . .

Max Keiser for President of Greece

[uls]

Portugal downgraded

LONDON — A leading credit rating agency downgraded Portugal's debt Wednesday amid growing concerns about the government's ability to service its borrowings, another piece of bad news for the eurozone as it struggles to deal with a debt crisis.

Fitch Ratings said that Portugal's prospects for recovery were weaker than its peers in the eurozone, adding that this will put make it harder to shrink its budget deficit over the medium term.

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USD index