Loonie jumps on ‘blowout’ (Canada.com)
Ugh, the Canadian dollar is now within spitting distance of the US dollar. When the two finally switch places, it’s going to be so embarrassing that people will thank the stars that their dead relatives aren’t alive to see this day. As if Canadians don’t already have enough to be smug about.
Paulson Says U.S. Hurt by High Tax Rates (NYT)
Hank Paulson is expected to lay out a major critique of the US corporate tax system, citing the high rate of taxes as well as its complexity. A number of recent studies have pointed out that compared to the rest of the world, the US tax climate is not particularly business friendly. That being said, the real culprit would seem to be the complexity rather than the nominal rate itself. Troll through some 10qs and you’ll realize that big, complex multinationals have all kinds of mechanisms for avoiding taxes, whereas your small or medium sized business that doesn’t have a corporate structure like a Russian doll typically has to pay the piper in full. Pretty obvious that all that talk about wanting small businesses to succeed is just political nonsense.
A bully exposed (Houston’s Clear Thinkers)
Funny that we’d link to a Houston-based blogger for a story on Eliot Spitzer, but it there’s nobody who knows more about the ‘bully’ that New Yorkers now call Governor than Tom Kirkendall, an expert on the criminalization of business, et. al. Suffice to say, we don’t think this embarrassment could’ve happened to a nicer guy. Meanwhile, another ‘Breaker fav, Professor Bainbridge, whips out fitting Nixon comparisons.
Mozilo’s Perfect Storm (Paper Money Blog)
In case you missed it, here’s what the head of Countrywide said yesterday to tank the market: “I do think it’s important to observe what happens going forward because we are experiencing home price depreciation almost like never before with the exception of the Great Depression and so I think using standards or frames of reference on prime and the performance of prime in other environments may not be a fair comparison in light of what’s happening to real estate values.” Zing!
Apple Calls Trade Heavily Ahead of Report (WSJ)
Shares of Apple dropped yesterday, after AT&T revealed disappointing two-day activation rates, but today is a new day, and Apple will have a chance to redeem itself when it reports its own earnings after the bell. With a stock like Apple, every dip is called a buying opportunity, as options traders are busily snapping up call options. For years, Apple has been the option-lovers dream as its stock tends to be really event-oriented, jumping all around whenever there’s an earnings report or a Stevenote.
Web’s Weakest Link: The Power Grid (GigaOM)
So it appears that yes, yesterday’s major internet outage was directly related to the broader power outage that hit San Francisco. There has been some talk about a drunk employee sabotaging the whole thing, but that seems not to have been the case. Too bad, that’d have been pretty exciting. Still, it’s a little weird that the collapse of the power grid could do this. Don’t these data centers have backups upon backups? Our guess is that we’ll be hearing about what went wrong for some time to come.
McDonald’s Swings to 2Q Loss (AP)
The title to this article is misleading, as McDonald’s would’ve turned a profit in this quarter had it not been for some one-time expenses associated with selling off some of its Latin American operations. In fact, the company continues to do quite well, as it’s doing a brisk business in coffee, breakfast items and chicken-related items (seriously).
No tangerines for you? (Politico)
In a stunning demonstration of her willingness to sacrifice for the environment, Elizabeth Edwards says she’ll no longer eat tangerines, because they have to be shipped too far to get to her. It’s too bad that E-squared doesn’t have a 3,000 mile long tongue.
Bausch & Lomb Calls on Rival to Sweeten Bid (Dealbook)
Bausch & Lomb, which not long ago was reeling from the fact that its products could cause blindness, is not in the catbird seat, telling potential acquirers that they need to raise their offers if they’re going to take the company out. Must still be a seller’s market.
Countrywide says demand will not increase until 2009. That’s when all the 2004 interest only 5 year ARM’s will have to re-finance.
re loony.
great, now all those polar bears will be coming south to spend their money.
god help us
yeah angelo going on for 2.5 hours about the housing market being a “battleship” that cannot even turn until 2009 would have been bad enough, had cfc not been so uncouth as to string together the words “delinquency” and “prime” in the same sentence
The NY Times today defends Spitzer. Also, the NY Times editorial today bemoans the need for additional corporate taxes.
They really are communists
You mena B&L is IN the catbird seat, despite causing fungal blindness last year.
You mean B&L is IN the catbird seat, despite causing fungal blindness last year.
Maybe Bob and Doug and the other hosers sipping their coffee at the Tim Horton’s think this is great, but anyone with any sense is not pleased with the exchange rate.
A strong Canadian dollar has hugely negative repercussions for manufacturing industries in terms of percieved lower cost of goods to buyers abroad, not to mention all the companies that used to book nice easy profits on the USD/CAD conversion from foreign business branches.
I’m not saying that the sky is falling, but it’s definetely a hassle in the short term.
Bulging Bracket, take a look at a 5yr BOL chart. Buying during the fungus thingy, when BOL shares were dumped in a panic, would have been a very smart idea. Some puny fungal contamination wasn’t going to put a serious dent into B&L … look at Ford, they got away with selling an exploding barbecue that didn’t even have a rear bumper …
A friend of mine commented on the $CAD: “Well, now all the manufacturers in Ontario can buy newer equipment for cheaper!” To which someone else responded “Who needs new equipment in factories that are CLOSED?”
The strong dollar doesn’t help the situation out in western Canada where natural gas is (was?) king. The weak demand and smaller exchange differential is killing a lot of juniors. It also means that the government’s royalty revenue drops rather significantly. Economics go pear-shaped rather quickly out here.
But at least I can stop referring to the currency as “Canadian mini-bucks” or “Dollarettes”.
How can you take any currency called the Looney seriously? What are elmur fudd and daffy duck getting all ‘sufferin’ sucketashhh’ over there?
See you at CAD-USD parity …
You mean no more cheap ski trips on the Canadian Peso?
I was harshing on the typo (i’m prety sure they meant NOW instead of NOT).
Buying during the fungal crisis was obviously a good idea – blood in the streets and all. It was just hard to see when the crisis was over… I try to wait for a while after a controversy to make sure nothing else comes out.
Look at that chart again, BOL started falling out in October 05 and hit every step on the way down to a 50% loss in 7 months. BOL didn’t pull a JNJ, they went for the chinese water torture (maybe they have outsourced their crisis managment to the chinese FDA?) and the story kept getting worse all winter and into the spring. Hitting the $42 price was a short opportunity, but BOL was at $48.79 in March of 07. You could grind out some money if you had a small position with the swings, but a big slug wasn’t making real money until the past 2 months. Trying to catch a falling knife that wasn’t much better than dead money over the next year… interesting strategy!
CSchmooze – the goo dnews is that the high dollar is really hurting canadian unions! Definitely hard on the tourist operators and the Whistler, Mt Tremblant, and Chester NS real estate markets. But now is a great time to buy Caribbean real-estate!
BBracket – the unions representing a large proportion of oilsands construction workers in Alberta just got a unanimous endorsement to strike. There’s gonna be a lot of heavy work that is going to have implications.
I’d suggest keeping an eye on Alberta’s story in the next year. We already have residential real estate starting to slow down and a ton of commercial towers going up. The whole scenario is making my old mentors shudder a bit as they remember the late 70s and early 80s here. One keeps making comments referring to the days when he owned a number of buildings in Denver when it melted down over 20 decades ago.
But everyone keeps parroting the “this time it’s different” mantra. Unfortunately most people don’t understand geometric progressions and don’t understand that 45% compounded house appreciation is absolutely unsustainable for more than a year or two (we’re at the end of year 2…)
I’m still anticipating that a lot of average people are going to be handed their ass in the next 2 years. The brute-force-and-ignorance approach to growth can’t continue much longer. I think there are already cracks starting to form in the average household. If the million-dollar spec homes I’ve walked through in Calgary are any indication, it’s one of two possibilities:
A) I am completely wrong in my assessments of the economic positions of most people
or
B) The leverage being employed by Albertans is not “the typical conservative Canadian level” and is really creeping to the levels used in the US and the banks simply aren’t telling us that this is the new trend.
As for Caribbean real estate, there was a For Sale sign about every 1000 feet when I was in Cayman in the spring. Tons of Hurricane Ivan’s blown-out remnants are still on the block…