Good morning!

An observation: fresh mangos should be automatically included as part of all breakfasts. I don’t mind how it happens – but they must be seasonal and on the table all year through. Woolworths SA – please make this happen.

The key points in the news today:

  1. After the Republican attack on the Democrats yesterday, I was really entertained by this article: http://www.bloomberg.com/news/2012-02-02/afghanistan-war-costs-dip-as-u-s-military-levels-decline-pentagon-says.html. Luckily, the monthly cost of the war in Afghanistan has dropped to $5.3 billion a MONTH. The total cost of that war (including the Iraqi episode) that the Pentagon is “obligated for” is around $1 trillion. According to the Washington Post, the US deficit this year will be around $1.1 trillion. Ai – Revenge. It’s a bitch, and then you pay for it. http://www.washingtonpost.com/business/economy/us-deficit-to-top-1-trillion-for-4th-year-in-a-row/2012/01/31/gIQAWmKweQ_story.html.
  2. South Africa’s ANC has investigated the prospect of nationalising mines, and has said that it’d be easier to just impose a 50% resource-rent tax. Of course it would be. Duh. Because then you don’t have to do the work, you just collect the cash. This investigation was prompted by publicly-shamed (but remaining unashamed) former ANCYL leader Julius Malema (wait – is he “former”? Those disciplinary hearings and court cases swing back and forth too much…). This is the trouble with populism as political policy: you get woodworkers suggesting radically short-sighted reforms. Give that man a lollipop and coat it in superglue; then let him hacksaw that off before he suggests anything else. That way, instead of dreading it, we can all hope for an unintentional slip of the tongue. http://www.bloomberg.com/news/2012-02-02/anc-study-said-to-propose-s-african-mine-resource-rent-tax-1-.html
  3. The Eurozone crisis continues. I can find nothing that I haven’t read already. Suspiciously quiet – I’m not sure if the “no news is good news” adage applies… They’re also going through a cold snap where people are dying and there’s not enough fuel. Is it just me, or does Karma really seem to be hating on Europe? http://www.cnbc.com/id/46242928
  4. Everyone is still going crazy for the Facebook IPO. Twitter is trending. My question: why is it listing? It’s not like it needs the capital (how much capital do you really need for an online social media site?). When you look at it: how far can facebook really go – isn’t everyone friends already? Mark Zuckerberg is potentially set to collect $28.4 billion dollars in this IPO. Maybe this is the cash-in while the site is still growing… http://www.bloomberg.com/news/2012-02-02/zuckerberg-facebook-stake-worth-28-4-billion-at-valuation-s-highest-range.html. Also, according to CNBC, he’s not going to have to pay taxes ever again, having taken a pay-cut all the way down to $1 per year. Here is the article link for an explanation: http://www.cnbc.com/id/46236916. It’s all beginning to sound like Mr. Buffett had a point. 
  5. Mr Bernanke, the Fed Chairman, has said that he won’t allow US inflation to exceed 2%. He also avoided committing to a new round of quantitative easing. I know it’s boring, but when you think about the potential money-supply issues (see my post on inflation: http://rollingalpha.blogspot.com/2012/01/what-is-inflation-and-why-is-it-tax.html) – I think we can agree that the US going into high inflation would be an issue. And given its giant deficit and secretive money supply figures we should all be concerned. After all, the US has a history: two historical “hyperinflation” episodes in the past – one after the War of Independence and one during and after the American Civil War. Perhaps one after the War on Terrorism? http://www.bloomberg.com/news/2012-02-02/bernanke-says-he-won-t-sacrifice-inflation-goal-for-more-employment-growth.htmlhttp://www.cnbc.com/id/46236869
  6. The Japanese are upset because the Yen is strengthening. This makes sense – Japan is an exporter. The lower their exchange rate, the cheaper their products are for their customers. But the global investors are looking to put their money somewhere. And they like Japan, which is strange because Japan has an enormous debt burden (about 225% of GDP; compared to Greece’s 127% of GDP – based on 2010 estimates). It just goes to show that debt, if managed, is fine. Either that, or the global investors have lost their minds. http://www.cnbc.com/id/46231835
  7. The global credit crisis is good for some. Brazil is scrambling to raise more debt as its yields drop (so it’s getting cheaper for them to borrow). Apparently, they just can’t do it fast enough. I love it. http://www.bloomberg.com/news/2012-02-03/new-normal-is-selling-old-debt-as-issuers-rush-to-market-brazil-credit.html.
  8. China is concerned about its economic health. It’s worried that its growth rate will fall to 8%. Which is still above its target for the year of 7.5%! Overachievers. http://www.cnbc.com/id/46233477.
That’s all for today. Have a great weekend!