Friday, April 13, 2012


Oh my.

China's economy grew at an annualized rate of only 8.1% in the last quarter , well below estimates.  The sky didn't fall but the equity markets did.  Italy's 10 year auction didn't help a bit with bids of nearly 6.00% and of all things, J.P Morgan, led by the World's Greatest Banker, beat estimates by just a smidge, along with the World's Greatest Bank, Wells Fargo, who beat by just  2 cents.  Gloom was the highlight emotion on the Street this morning.  It got worse.  The Dow closed down 125 points.

I'm not surprised about China.  China, in the space of just a few years has become a middle-income country and as such you simply can't expect double digit growth from such a higher base.  Italy--well, we've spoken enough about Europe and the box in which they've put themseves  with unrealisticly false assumptions of the overall economic future of the region and a single-minded focus on saving the banks.  But frankly, the less than exciting performance of the two banks considered to be the pick of the litter troubles me.  Given the economic and job numers we saw from the end of 2010 I would have thought that the claimed pick-up in economic activity would have resulted in a stronger performance but that was not to be.  Either the numbers were false or the economy had but a spurt...a false start so to speak...that did not result in increased financing opportunities.  Admittedly, I have not gone through the detail of the numbers but with conditions as favorable as they appeared, I expected better.  As a result, I am now eagerly awaiting Citigroup's release next week.

The conventional opinion is that in the face of the ongoing work-out of the retail housing sector, it has been difficult for the industry to attain personnel reductions and as a consequence, overall cost reductions.  No doubt this is true but I suspect that the projected revenue numbers, even at considerably reduced levels, have been impossible to obtain as well.  Coupled with the still almost complete uncertainty in the implementation of Dodd/Frank, the industry does not find itself in a good place.  Unfortunately, in my opinion, there is nothing on the horizon to make one become optomistic.  This is shaping up as a verry, very tough year.

Anyway, I'm having an early dinner, a bit of wine and off to bed.  Everton/Liverpool tomorrow bright and early in the first semi-final of the FA Cup  followed on Sunday by Tottenham/Chelsea.  Classic cross-town rivalries at Wembly.  For some happy few there are things more important than the financial state of the planet.  Let's go you Whites!

Have a great weekend.

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