First, as a shout-out to Adrian Stanford, the most important news of last week is that I officially have groupies.
Follow him on twitter. And me, if you haven’t already!
In less important news, what you may have missed last week:
1. The Many Many Articles on the US Government Shutdown.
Still no closer to anything.
I have been most entertained by the “human interest” pieces on couples that have been forced to move their weddings now that their National Park venue has closed, and tourists that have been “amused” to discover that the Statue of Liberty is off limits (I’d have been furious).
As a general update: Mr Boehner is annoyed by all the questions; Mr Obama is annoyed that the market is not showing more of a reaction; I am annoyed by all the references to the Dow Jones.
Here’s the post that I wrote on the shutdown earlier in the week: Shutdowns and Affordable Healthcare.
And here’s a really interesting article on the craziness of the various segments of the Republican Party: Why Republicans Shut Down The Government.
2. The Many More Articles on the US Debt Ceiling.
As next Thursday’s deadline rolls closer, all the market bravado is beginning to teeter. Last week, Mr Gross (of PIMCO fame) was telling us that a default would never happen. Then Goldman Sachs came out and announced that they’re more concerned than normal. And journalists are beginning to talk about a default happening inadvertently.
In what is (seemingly) a long list of personal annoyances today, I am most irritated by the “the US has never ever defaulted on its debt before” line. Yes. Yes it has. I’ll bore you with dates in a footnote*, but it’s time to be optimistic in the face of pessimism, and declare that the world will not end if the US defaults on its debt. Oh – it’ll be bad, don’t get me wrong.
*Each time Congress has agreed to redeem a dollar for gold, and then decided not to, is a default. That happened in 1790, 1862, 1934 and, most famously, in 1971. I’ve actually written about those last two incidents before, in my series of posts on the Petrodollar. Then, if you consider hyperinflation a default (which we should), then default also took place in 1779.
But if I’m to liken this to anything: how long did it take for Wall Street to start buying into Mortgage-Backed Securities after the 2008 saga?
Answer: not long. Greed, like the goldfish, and other things that glitter, has a memory span that is almost holy in its ability to forgive and forget.
PS: I also wrote about the Debt Ceiling this week: The Roof is On Fire: Let The Debt Ceiling Burn.
PPS: one more cartoon:
Cadbury has been attempting to trademark the colour purple (specifically: Pantone 2865c). Nestlé has been fighting it.
Last year, Cadbury won the right to stop other chocolate makers from using it. Last week, Nestlé won an appeal to have it overturned.
That said, I almost dare Nestlé to try and package a bar to resemble a Cadbury’s one. Colour is not everything. And in the world of patents and trademarks, it’s almost always safer for a judge to grant a temporary injunction until the case is settled.
4. The Twitter IPO: welcome the numbers.
After taking advantage of the 30 day window in the JOBS act to avoid disclosing anything while disclosing that they were planning to list on the NYSE, Twitter’s financial information is now public.
Time flies, right?
The summary:
- Twitter is seeking to raise $1 billion.
- It’s making losses.
- This year’s loss is 40% more than last year’s.
- It hasn’t made a profit ever.
- It has 100 million daily active users (last year, Twitter suggested that it had 200 million active users – but maybe there were talking about being active monthly…)
- Apparently, only 5% of twitter users are spambots (sidebar: I must be attracting most of them then).
- 65% of Twitter revenue comes from mobile advertising.
- So at least that’s a good thing.
Either way, Twitter is a (the?) giant free market exchange for information. That also sounds like a good thing.
Personally, I find that the biggest problem with Twitter is filtering. How does one tap into all the 140 character thoughts of the important and not-so-important people in the world, and decide who is, and who is not, worth listening to? The alternative is a traditional news site with its own particular bias.
But then I realised that this is actually a non-issue. Because we’re human, we tend toward those that echo our opinions. Or particular bias.
So twitter is really just more of the same. Only, now we’re just able to refine our newsfeed so that we learn literally nothing more than what we already know, in the way that we want to hear it, at speed.
Glorious.
5. South Africa: the Auto Industry reaches an agreement.
The National Union of Metalworkers of South Africa (NUMSA) has agreed to a pay increase deal (10% this year, and then 8% per year for the next two years), and will now suspend its month-long strike.
BMW has announced that it will be suspending all future investment in South Africa.
Irvin Jim, NUMSA’s General Secretary, has called it “blackmail” and is “reject[ing it] with the contempt that it deserves”.
No, Mr Jim. No no. I think that you and your union members are the ones being rejected, I’m afraid.
And when South Africa’s cars are all imported, and the BMW executives are still living in lush suburbia while you recline with a shadow of your former membership, at least you’ll be left with your contempt.
6. Petronas is doing stuff in Canada.
I felt obligated to report something that actually sounded like real business. Petronas is building a pipeline in Canada. Until last year, Canada was blocking the entry of Petronas into its borders (via the acquisition of Canada’s Progress Energy Resources Corp.).
Today, “the government of Canada is very excited” by “all the indications” that “Petronas is looking at further investments”.
I love a good turnaround story.
7. Eike Batista: how the mighty have fallen.
Mr Batista appears to be approaching bankruptcy. 18 months ago, he was the 7th richest man in the world. And in 2008, he said that he planned to be the richest man in the world within 5 years.
We’re five years on…
