Sunday, May 18, 2014

'Elite' MBA's Turning Their Backs on Investment Banking Careers

Evidently 100 hour work weeks (and potentially deadly internship requirements to get the opportunity to work said hours) is turning the 'elite' MBA students off.

While plenty still try to follow in the footsteps of their investment banking hero's, there is a clear trend that says the tide may be turning.

Sunday, April 13, 2014

Swiss National Bank: USD Inflation Fighter

Yesterday, SNB president Thomas Jordan reiterated the importance of a cap on the Franc to Euro and USD exchange rates.

“We have a strong euro against the dollar and we have an even stronger Swiss franc against the dollar so what we need is probably both a weakening of the Swiss franc and a weakening of the euro against the dollar,” Jordan said

For those that are curious as to how the Fed can print so much without having to deal with much inflation (other than a complete collapse in demand), we present the SNB's foreign assets:

Isn't central planning nice.

Monday, December 2, 2013

Rio Tinto Throws In The Towel: CapEx to Plunge by 2015

Rio Tinto, the world's second largest mining company announced today that they'll be cutting their CapEx to ~$8 billion by 2015. That may sound like a lot of money, but when you consider that this is 55% off of their 2012 spending levels, it puts it into a different context.

This is the latest effort by CEO Sam Walsh to preserve cash. Walsh has been on a cost cutting / capital raising spree since he took over as CEO, cutting 3,800 jobs and selling $3.3bn in assets. He plans to have another $5bn in cost out by 2015, presumably through more headcount reductions, and perhaps even more significantly, through less exploration. 

When the CEO is this concerned about cash, and can't find the return he needs to make investors happy, he cuts costs and cuts CapEx in order to return it to them via dividends and share repurchases. We're certainly interested in what he sees that the current equity market doesn't (besides a mother of a bubble and complacency). Less demand for his iron ore, copper, coal, and aluminum product? Perhaps. 

Walsh gives us a hint: 

"From where I stand, we continue to see market fragility and volatility"

For further context on the degradation of CapEx by companies, Zero Hedge has done extensive work over on their site.

Sunday, December 1, 2013

Administration: Obamacare Website Now Operating 'Smoothly'

After a disastrous launch to the centrally planned healthcare website, the Obama administration now says it's all good.

As a reminder, a few weeks ago it was found out that the website was only 40% complete to begin with... AFTER it launched.

Fear not comrades, the Government has it all under control.

Monday, September 16, 2013

Is China Putting Pressure On The US to Taper?

We hear a lot about fundamentals driving the Fed's potential taper, but like many, we highly doubt that is the driver. One possibility is that the fed is simply running out of new debt to monetize, but the other possibility that nobody seems to be talking about is this: What about China?

As Zero Hedge pointed out recently, China dumped a shitload of US debt in June. That got our attention, because shortly after that the PBOC came out and reiterated their mid-point USD/CNY target of 6.1705. At that point in time, the currency pair was hovering around 6.11-6.12. Point being, China wants their currency to weaken, and the more money the fed prints, the more the PBOC has to print. China has been worried about inflation, so as you would imagine, printing more yuan may not be what they feel like doing in perpetuity.

Did China send a very clear message in June that said enough is enough, the yuan will weaken, and it won't be due to the PBOC playing catch-up with the Fed's printing?

We wouldn't be surprised.

Here is how the USD/CNY looks over the last few months vs. the PBOC reference rate. You can see something has to give here.

Saturday, September 14, 2013

Unions Find Out They're Useful Idiots

Unions worked tirelessly for President Obama throughout his campaigns, and were the mouthpiece for his signature legislation - Obamacare.

Unfortunately for Unions (or fortunatley, depending on your point of view), Obamacare is now a reality, and Unions were told recently that they no longer will be exempt from the law.

Some may not be aware of this, but quite often unions (especially in the manufacturing sector), have their own healthcare plans. What that means, is that unions are not on the company's healthcare plan, but they negotiate their own plan, and the company pays for it. Now, the unions will either have to get on the company plan like everyone else, or in some cases (if the firm has less than 50 employees), they may be dropped altogether and forced onto Obama's "healthcare exchange".

All this means is that whatever Obama promised unions, he just rescinded. Obama giveth, Obama taketh away.

But hey, thanks for working to get him elected and lobbying for the healthcare mandate, pardon, tax.

Useful idiots indeed.

Thursday, March 21, 2013

Suntech Declares Bankruptcy

Fading fortunes: Former U.S.  Vice President Al Gore visits a Suntech solar cell factory near Shanghai in June 2010.

As the saying goes, 'a picture is worth...'.

And on that note, we'd like thank Al Gore for proving once again that hubris is a poor business strategy.