Last week, I mentioned how the slower week of July 4th should be enjoyed, if possible, with welcoming rest, fun, friendship and family. It’s generally a slow week for the domestic markets and one that allows market participants and everyday folks a chance to catch their collective breath. I really enjoyed the summer respite and hope you all had a wonderful week too!
Before I get into my 5 thoughts for the week, I wanted to share a unique “extra” thought. Amidst all the calm this week, I noticed that no one is talking about Greece!! This puzzles me: if we can spend a couple of weeks without worrying about the Greek economy, is it too much to ask that we try to apply a bit of that calm and restraint when Greek news starts raging again? But that wouldn’t be any fun, would it?!!
1. 99,999% of the time when I write this column, I try to synthesize news and extract personal and subjective ideas that highlighteded my week. This week, I am 99.999% sure that the most important news of the week is the 99.999% certainty that the CERN finally proved that the Higgs Boson exist and that is arguably the biggest scientific breakthrough of the century and the millennium. I couldn’t resist the urge to use such a grand statement (“the discovery of the millennium”… OK, OK, there are 988 years still left to find black matter, time travel, full invisibility, telekinetic powers… but right now, the Higgs Boson probably is “it”!). There is nothing else I can add: it is way over my head, yet it’s by far my first idea of the week!
2. Did you know China had a “Beige Book”? And no, it is not a report written in “Beij-ing”! (my poor attempt at humor)
Despite all the gloom and doom analysis on China’s hard landing (still a distinct possibility), the Chinese “Beige Book” actually reports anecdotal evidence that things might not be as bad as feared?
So, what is the Beige Book anyway? Here is the official definition: Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources.
The Chinese Beige Book is compiled by a private US firm and meant to copy the methodology of the US version. It just reported that while China’s economy was slowing, things might not be as dire as expected and China could still help the world economy in preventing a global recession.
These findings were under-followed and not widely covered, but in these difficult times, we should keep an eye out for any bit of good news!
3. Speaking of under-the-radar news, meet Mario Draghi! The Governor of the European Central Bank is slowly but surely becoming the man to know in Europe. But this has been largely lost in the commentary, as pundits focus on Germany’s Merkel and her Italian, Spanish and French counterparts.
In the weeks to come, Mario Draghi and the ECB will likely hold the keys to whether or not the global markets experience a quiet Summer and Fall (until the US drama of elections and debt ceiling steal the spotlight). The road map for saving the Euro is still difficult and a bit merky, but as it unfolds Draghi will the name to watch out of Europe.
4. With this week’s rumor of a new iPad mini (and/or iPhone maxi?), I thought it would be good to provide an update on last week’s industrial implications for the new Google Nexus 7 & its potential Apple competitor. In short, Google and Apple are going to take over the world of industrialized hardware solutions. Not today, not tomorrow, but within 5 years they are likely to have completely displaced traditional manufacturers for industrial solutions.
The long term investing implications in Apple and Google are important; both companies could end up with an even stronger “Trojan Horse” effect, infiltrating companies with their hardware. If a company adopts a modified iPad Mini or Nexus 7 as barcode scanners and inventory system, the synergy with MacOS and Chrome devices for other operations gains more and more strength.
This is big… not Higgs Boson big, but big enough!
5. Quick update on last week’s rant of the week on the LIBOR scandal: Barclays CEO, Bob Diamond, finally ended up quitting over the scandal. So far, so good. No rant there (well, actually, the rant would be, “hey, what took you so long?”). But the highlight of the week for this “thought” comes from Bob Diamond himself and his line of defense: “I didn’t know, I had no idea, I was clueless.”
And with that, here comes the rant: How can you be paid $20,000,000 a year and have no idea about this… and be self-admittedly clueless? How can you justify your pay to your admitted incompetency? And what about protecting your shareholders? Where was your board? How can we keep mixing “I didn’t know” with $20,000,000 annual salaries?
By the way, since I am in New Jersey for the week, I have another question: Is Jon Corzine in jail yet? If not, what’s taking so long? Stealing a pizza in Florida gets you 20 years faster than stealing secluded account money in New York!
Thanks for reading and have a wonderful week ahead!
Position in Apple (AAPL) and Google (GOOG) at the time of publication.
Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of his employer or any other person or entity.