Including: Obama increases his threshold, Greek bonds make the best return, Apple drops, RIM should be shorted, and the unintended (?) consequence of California’s solar power regulation.

Good morning

The headlines:

  1. Obama raises a threshold.

    Link: like watching cricket.

    Over the weekend, Mr Boehner was talking about raising taxes on incomes above $1 million. Yesterday, Mr Obama raised his threshold from $250,000 to $400,000. News universally accompanied by a triumphant image of Boehner and Obama shaking hands.

    Oh, and fiscal spending cuts will drop form $1.4 billion to $1.22 billion. Some of which will be a sneaky change in the inflation adjustment for Social Security benefits.

    Boehner rejected it, of course.

    Is anyone else tired of hearing the “but it’s a step in the right direction” closing? How many steps can possibly be taken…

  2. A Eurobond year in review.

    Link: Greece won.

    53 times out of 100, this year, the market treated a rating downgrade by one of the agencies as an upgrade. Which I think means that they should be retired. Because if 47 times out of 100, the market treated their downgrade as a downgrade, we may as well all flip coins.

    In fact, you’d do better flipping a coin if you were trying to predict a market reaction.

    But, interestingly, Euro-bonds are having their best year since 1998*, having returned 11.5% so far in 2012. Greek bonds, in particular, have been a great investment – returning 84% in 2012. As have Portuguese bonds (55%).

    In crisis: opportunity.

    *And/or “THEIR BEST YEAR IN 14 YEARS”, depending on how excited the journalist is…

  3. Apple drops.

    Link: and it’ll probably drop some more today.

    Apple dropped below the $500 mark in premarket trading* yesterday. Of course, the full market didn’t quite see it that way – so if you look at a stock chart (below), you’ll see that the price hasn’t quite done the dip below $500 when all the market is on board.

    But the breaking news this morning is that Samsung got the US sales injunction lifted.

    So maybe today.

    *Premarket trading is market-trading that takes place out of standard trading hours -no big surprises there: the market never sleeps. But some of the traders do – so you tend to see larger fluctuations in after hours trading (more traders mean that the spread between the bid price and the ask price tends to be narrower).

  4. Speaking of shares to short…

    Link: RIM

    RIM is now farming out its BB10s to any firm that will take them to “test” and see if they’re fans. That would be about 120 of them. And it’s free – so why not?

    Here is a picture of the sudden spate of buy ratings:

    I just can’t believe that the rally is justified. Whatever the security options on offer.

    Hoping for an Apple story c. 1996…

    My call: unrealistic hopefulness, followed by third quarter results next week, followed by the launch early next year, followed by bad reviews, poor sales, and a buy-out rescue by Hewlett-Packard.

    Because there is no one that Hewlett-Packard won’t buy.

    Short it today.

  5. Californian Solar Power.

    Link: bad for everyone else.

    So in California, the genius idea to promote solar power is that you can sell any excess power you generate back to the power grids. Actually, what that means is that your electricity meter will begin to run backwards when you’re a net generator of energy.

    And under the laws around this, the power grids have to sell the solar power back to customers at the same rate at which they buy it. This sounds like it makes sense – how can the grids make a margin when they didn’t invest in the solar panels?

    Yes. But. Who invested in the grid? Without it, no distribution. And the distribution has a cost. So the grids are actually being forced to make a loss equal to the apportioned level of fixed costs*.

    And where does that cost go? To the customers using normal electricity. So they pay higher rates, which pushes them into buying solar power, which increases rates, and so on. But this only really benefits the rich and upper middle class – who can afford to pay for solar power installations.

    For everyone else, there’s Mastercard.

    I’m joking. For everyone else, there’ll be a sudden rise in the amount of barbecuing. And, I’m betting, a rise in arson open fires.

    *janitor salaries, upkeep of the grid, insurance, administration of the buy-backs and on-selling – all the costs that the Power Grid Operator continues to incur in a power cut.

That’s all for now.

Have a good day.