#2 Cheer on the stronger dollar
I continue to scratch my head at people cheering these things in an economy whose only leg to stand on is exports. How do you openly root for a stronger dollar which hurts US exports... and root for weakening export markets? Only in the stock market.
Terex (TEX) is not a company I follow that closely but have it out there with 1 eye as a "global construction" play. Down close to 20% today as the market takes another sacrifice. I think this will be a "preview" of what to expect in the coming 2 quarters from a litanty of multinationals now that we've achieved our goal of exporting our virus worldwide and causing the rest to slow ... (which again is "happily cheered" by the punditry since it means the US can lead the others out of the morasse - as if its that simple - we led them in, we'll lead them out - 1st grade logic)
Remember, almost all our strength the past year has been US multinationals. The chart of IBM (IBM) for example is telling us something nasty as we cheer on a stronger dollar and other countries weakening. IBM Has been a poster child for US companies reliant on foreign strength and currency adjustments to "make their numbers". Now we are taking away that last area of strength and the market has been cheering it the past 6 weeks.
The alternative? Buying US automotive, airline, retail, and financials. You call that an alternative? I guess so - until facts come out like today's earnings from Hovnanian (HOV), Toll Brothers (TOL) and the myriad of poor same store sales across the retail space. But
when you have trillions of dollars and need to stuff it somewhere I guess this is where it will go. But not for good reason. This was my worry when we first mentioned the global economy would slow - what alternatives would we have to invest in? So we are "here" now at this destination. Apparently the market is holding its nose and pointing to "domestic" plays as a source of joy - but not on fundamentals, unless you count "looking ahead into the haze 6 months and assuming the great US recovery is imminent" as fundamentals. I call it denial. So please clap along with the pundits and let's cheer these developments...
I continue to scratch my head at people cheering these things in an economy whose only leg to stand on is exports. How do you openly root for a stronger dollar which hurts US exports... and root for weakening export markets? Only in the stock market.
Terex (TEX) is not a company I follow that closely but have it out there with 1 eye as a "global construction" play. Down close to 20% today as the market takes another sacrifice. I think this will be a "preview" of what to expect in the coming 2 quarters from a litanty of multinationals now that we've achieved our goal of exporting our virus worldwide and causing the rest to slow ... (which again is "happily cheered" by the punditry since it means the US can lead the others out of the morasse - as if its that simple - we led them in, we'll lead them out - 1st grade logic)
- ....the heavy equipment maker cut its 2008 profit and sales guidance, citing soft markets and higher costs at its aerial platforms and construction businesses.
- Terex said it now expects to post a profit of $6.35 to $6.65 per share for the year, down from its previous prediction of $6.85 to $7.15 per share.
- Terex officials said that while results at the company's cranes and materials processing and mining segments continue to be better than expected, those gains are expected to be outweighed by slumping demand and higher costs at its aerial work platforms and construction segments in Western Europe and the United States.
Remember, almost all our strength the past year has been US multinationals. The chart of IBM (IBM) for example is telling us something nasty as we cheer on a stronger dollar and other countries weakening. IBM Has been a poster child for US companies reliant on foreign strength and currency adjustments to "make their numbers". Now we are taking away that last area of strength and the market has been cheering it the past 6 weeks.
The alternative? Buying US automotive, airline, retail, and financials. You call that an alternative? I guess so - until facts come out like today's earnings from Hovnanian (HOV), Toll Brothers (TOL) and the myriad of poor same store sales across the retail space. But
when you have trillions of dollars and need to stuff it somewhere I guess this is where it will go. But not for good reason. This was my worry when we first mentioned the global economy would slow - what alternatives would we have to invest in? So we are "here" now at this destination. Apparently the market is holding its nose and pointing to "domestic" plays as a source of joy - but not on fundamentals, unless you count "looking ahead into the haze 6 months and assuming the great US recovery is imminent" as fundamentals. I call it denial. So please clap along with the pundits and let's cheer these developments... 
2 comments:
Xstrata is offering its thermal coal contract to Japanese utilities priced at $175 per tonne, a 125% rise on last year’s price.
Author: Fayen Wong
Posted: Monday , 01 Sep 2008
PERTH (Reuters) -
Xstrata Plc has tabled its offer to some Japanese utilities for thermal-coal term contracts starting in October at $175 a tonne, up 40 percent from April, prompting some firms to balk at the hefty increase.
"They offered (coal) at $175 a tonne during negotiations last week," said a source who is familiar with the Japanese position.
"I don't think the Japanese utilities would be interested at these price levels but the negotiations are still in their very early stages," said the source, who asked not to be identified because he was not authorised to speak to the media.
The utilities included Chubu Electric and Tohoku Electric Power Co.
The $175 offer price by the world's largest thermal coal exporter was a steep increase on the benchmark April settlement of $125 a tonne set this year. It was also $13 higher than the latest pricing on the globalCOAL NEWC index, a benchmark for Asia.
A second source familiar with the Japanese position said utilities were expected to counter-propose with a headline price of about $160 a tonne, but include various sweeteners such as cancellation of outstanding 2008 tonnage that would bring the real value of the contracts to about $165 a tonne.
Industry sources said the final price settlement for these October contracts would set the stage for negotiations next year's April-to-March fiscal year contracts.
A source from Tohoku declined to comment on the prices offered, but said it was still considering whether it needed to buy further supplies as it had already secured most of its requirements earlier this year.
Asian thermal coal prices have lost about $40 from their July peak of $201 a tonne, but they are still up about 70 percent since the start of the year.
Suppliers said there was plenty of upside risk to prices with demand expected to strengthen as the northern hemisphere autumn and winter approaches and given signs of unstable supplies from China and Indonesia.
wow nice to see thermal joining the party
they are not even American hence no US currency discount for Japan
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