Good morning

The headlines:

  1. Qantas makes a loss.

    Link: and cancels orders for 787s.

    That’s an order of 35 Boeing 787s, worth about $8.5 billion.

    Qantas announced an annual loss of just over a quarter of a billion dollars yesterday. That said, all the loss (and then some) can be attributed to once-off charges as CEO Alan Joyce restructures operations. And I suppose a little more can be attributed to that awkward labour dispute from a while back.

    The Qantas Share Price... Slight increase of late? I think it's because the loss is less than expected!

    I’ll be honest – thinking about the airline industry doesn’t leave me with a good feeling. It’s all high fixed costs and thin margins and almost no room to breathe. When they talk about hypothetical perfect competition in Ecos 101, I imagine that the airline industry is pretty close to that mark…

  2. China’s manufacturing “may contract at faster rate than August”.


    Someone does a private survey about how everyone is feeling, and the results of the survey suddenly become consensus-driven news. To me – it all seems a little contrived.

    But HSBC and Markit Economics, always ahead of the government wave, have just released their PMI figures. And they look to be the lowest so far.

    We can probably expect another extremely cautious increase in stimulus.

  3. Explaining metal sources to the SEC.

    Link: watch your smartphones and your mode of flight.

    The SEC has grasped the clear issue at hand in the American economy, which is making sure that any metals used by American manufacturers didn’t come from anywhere in Africa that’s war-torn.

    And by “war-torn”, they mean “the Democratic Republic of Congo”. And by “metals” they mean “tin, tantalum, tungsten and gold”.

    The one concession: the original rule required the manufacturers to prove that the metals didn’t come from a DRC mine; the final rule just requires the manufacturers to find no evidence of a link. After a “good faith” effort.

    The rule has been incorporated into the 2010 Dodd-Frank Act.

    I am in awe. Because if I were a US manufacturer, I would always, in good faith, do just enough work to find no evidence of a link.

    And as for the DRC… What this does is create a clear incentive for Martin Kabwelulu and his DRC Mining Ministry to create a “certification program” that will qualify any and all DRC minerals “conflict-free” – for a price. Who will be willing to pay that price? The mines in conflict.

  4. Hewlett-Packard makes a loss.

    Link: quite a loss.

    Make that a quarterly loss of $8.8 billion. Including some asset write-downs.

    The slow kiss good-bye to profit.
  5. Facebook’s Instagram purchase given the go-ahead.

    Link: no longer the price it once was.

    The US Federal Trade Commission says that it won’t stop the deal from going through.

    On the other hand, though, I’ll bet the Instagram guys are deeply regretting that whole “we’ll happily take your facebook shares for our instagram ones” move.

    The original deal was something like $300 million in cash and $700 million in kind. And, well, that $700 million is now worth something like $350 million.

    If I were Instagram, I might remove the “share on facebook” button.

  6. Egypt requests IMF aid.

    Link: how tanned is Christine Lagarde?

    Christine and Mr Mursi have a meeting.

    Egypt has requested a $4.8 billion loan from the IMF. Christine said that she’d get back to them on that. It looks like the IMF is holding out for “broad political support”, which I believe is code for “we are waiting for Egypt to not be ruled by the military”.

    In the meantime, Egypt is gathering supportive loans from Saudi Arabia and Qatar.

    I reckon that Christine is just happy to be having this conto someone that’s not Europe.

  7. Firstrand acquires 75% of Merchant Bank Ghana.

    Link: growing the African footprint.

    The price was only R750 million (less than $100 million). It’s barely World News, with a purchase price of less than 2% of JPM’s London Whale trading losses. But in Africa, it’s quite exciting.

That’s all for now.

Have a good day.