Money Morning Archive March 2010

Bummer! You work hard. You save your money. You make a product and sell it at a profit. Everybody's happy. And then, your customers, the silly spendthrifts, go broke. And what do you know? Everybody points his finger and blames you! "World leaders are choosing recession," charges The Financial Times. The "world leaders" the FT is talking about are Premier Wen Jiabao of China and Germany's Finance Minister, Wolfgang Schauble.

Is the global economic recovery running out of steam? StanLib economist Kevin Lings says the US leading economic indicator – comprising 10 measures of US-economic health – could ‘turn-over’ in the next two months. But there are some facts you should consider before getting on your loud hailer in an attempt to encourage your neighbours to dump their shares. Your first consideration should be for the unrelenting 11-month acceleration in this barometer of superpower wellbeing. Some slowdown is inevitable...

We have come to Bombay to get a good look at India - at least the part of it you can see from a 10th floor room at the Taj Mahal Hotel. Which isn't much. The air is too dense. Still, we can make out the figures of whole families eating and sleeping on the pavement near the dock.

We have come to Bombay to get a good look at India - at least the part of it you can see from a 10th floor room at the Taj Mahal Hotel. Which isn't much. The air is too dense. Still, we can make out the figures of whole families eating and sleeping on the pavement near the dock. We have never seen families sleeping on the pavement on Regent Street...nor on 5th Avenue. New York and London are great success stories. Turning the pages here, on the other hand, we read a failure story.

Did you have a chance to look at Shoprite’s latest interim results? The company ignored dreams of statistics on the struggling consumer to power ahead through the second half of 2009. Revenue from the company’s 1 413 stores (including franchises) surged from R29.6bn to R33.1bn, making a mockery of the latest Statistics SA retail sales number. If you think the group is being propped up by offshore activity, think again.

Adrian Clayton of Alphen Asset Management says his “investment team were bullish last year believing that markets were cheap but they never imagined that the rebound would be as steep and as quick as it has been.” The problem is, with the All Share Index hovering around 27,000 after a 46.48% bull market in 2009, even if it runs to its all-time high of 33,233, you’re only going to make another 20%.

"The world's largest shopping mall is almost entirely empty," says a headline now making its way around the Internet. The mall is not one of America's consumer emporia. It is not in the US at all. Instead, it is in the Middle Kingdom...and twice as large as the "Mall of the Americas."

Monopoly is great as a board game, but results in untold suffering when applied in the world of industry. If you want to see the impact of monopoly on business you need look no further than the bitter battle raging between steel producer ArcelorMittal (JSE: ACL) and its key iron ore supplier Kumba Iron Ore (JSE: KIO).

All across the globe, policy makers are patting each other on the backs and sticking feathers in each others hats. Congratulations all round for a job well done. Financial disaster avoided thanks to their brave, money minting, efforts. They’ve managed to put a bottom on the most gut wrenching crisis since the Great Depression.

Are you a glass half empty, or glass half full kind of person? This oft-used English expression is supposed to get you thinking about whether you’re optimistic or pessimistic about a certain  proposition.

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