Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
My opinion that APPL won't hit $1K has little to do with P/E, and frankly, cash flow is indeed the value driver in the spot light here, I wasn't aware anyone was still using P/E as an accurate measure.
My statement has to do with the fact that the downturn has begun in the US / Chinese tech war, and it will become an issue of China reaching out to slap the US, albeit "economically speaking", simply because they can.
Your comment that this is a market of "human sentiment" is interesting. However, "brand sentiment" is not "human sentiment", for further reading, see P R Sarkar, (Neohumanism, Human Sentiment.) By comparison, the misnomer "brand sentiment" is the pejorative, and clearly misses the definition of human sentiment, according to Mr. Sarkar, who's philosophy it is we are talking about.
enter Stage left: China
It's about Chinese control preventing APPL from succeeding, not only the variable which non-professionals are ignoring, but the same one which will grab headlines before 2012 year end.
Very Good article, gives us all much to think about.
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
I will agree with you, my polling floor traders for their opinion wasn't meant as a reinforcing statement to my opinion, I just wanted to get another opinion since I tend to be very narcissistic on most Fridays, especially when planning shorts.
However, there was quite a bit of analysis behind my comment that APPL will never see $1K. If you are interested, start checking US Foreign / Trade Policy changes coming up as a result of the US Presidential Election. I am FULLY confident there will be radical changes in the US Tech Sector, forthwith, ESPECIALLY where China is concerned.
In a recent Congressional Research Service report to US Congress I received, it mentioned:
"China’s incomplete transition to a free market economy and its use of distortive economic policies have increasingly strained commercial relations with the United States. Major concerns raised by U.S. policymakers and stakeholders include China’s efforts to maintain an undervalued currency, its mixed record on implementing its World Trade Organization (WTO) obligations, its relatively poor record on protecting intellectual property rights (IPR), and its extensive use of industrial policies (such as financial support of state-owned firms, discriminatory government regulations, pressure on foreign-invested firms in China to transfer technology, and export restrictions on raw materials). Many analysts argue that such policies are harmful to U.S. economic interests and have contributed to U.S job losses. For example, one U.S. government study estimated that IPR infringement in China cost U.S. IPR-intensive firms $48 billion in 2009."
"Some Members of Congress advocate a more aggressive U.S. trade policy towards China, such as increasing the number of dispute settlement cases brought against China in the WTO, where the United States has prevailed on a number of issues."
During his State of the Union Address in January 2012, President Obama announced plans to create a new Trade Enforcement Unit “charged with investigating unfair trade practices in countries like China.”
NOTE: Some analysts caution that taking a more aggressive stance against China over its trade policies could induce it to retaliate against U.S. exports to, and investment in, China. Look for this to become a key issue for the Election. After the outing of Chinese Telecommunications Device Manufacturer ZTE, look for tensions to rise.
Again, it took 5000 Policemen (cracking skulls mind you, with clubs, Chinese Police tactics are brutal) to restore order at a FOXCONN factory, and that was a "passive" demonstration, workers have been killing themselves in protest to work conditions there.
APPL is a MASSIVE liability, regardless of which 3rd world sewer they decide to operate.
A COMPROMISE Why don't they let those wonderful APPL products be manufactured in the US?......................
* If you drink that APPL Kool-Aid, and actually believe them when they say, "it's about people"....... IF it is about people, bring APPL home to the US, manufacture it here, and when hit with higher production costs, keep the price the same, just take less profits.
REMEMBER, APPL says.... it's REALLY about "the people", nu?
I'll see you on the ride down to $300 bucks before Jan 1, 2013.
Great comments, thank you for the engagement, and as i said i wish you the best of luck on that position.
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
Certainly, I would be glad to.
THESIS: All we keep hearing is the insane question, "will it hit $1000 USD?"
Never. I just verbally polled 7 people here on the floor (NYSE), 2 laughed, one gave me the finger, and four collectively said, "hell no."
You have to understand that APPL stock price is built on the expectation that sales will continue to boom. With lousy product reviews on iPhone 5, overpriced Chinese hardware, and growing "anti-China" sentiment, don't count on it. People love you when you give them what they want, the minute that ends, they walk. Can APPL keep given people what they want?
No, nothing lasts forever. Especially when your product is being built in a country who's corruption and control is off the charts.
According to financial sources:
"Unless APPL stock just gets caught up by a wave of euphoria, APPL future stock appreciation will have to be driven by fundamentals—namely, earnings and cash flow."
* That being said, and for simplicity's sake, let's use earnings:
APPL earned about $32 billion last year, (+/- $3 BIL USD)
At a $500 BIL USD valuation, the stock is trading at about fifteen (15X) those earnings.
IF APPL earnings multiple (P/E ratio) stays the same, (which is not a given) APPL earnings will have to double (2X) for the company's value to hit $1 TRIL USD.
Specifically, APPL will have to earn about $65 BIL USD in a year.
Likelihood? ( Not even if they printed their own money in the basement.)
IF APPL profit margin stays the same , to earn $65 BIL USD, it will have to DOUBLE (2X) its revenue.
LOL
Although APPL did generate a staggering $125 BIL USD of revenue last year,......doubling (2X) revenue would mean generating $250 BIL USD of revenue.
Likelihood? ZERO
Nobody is disputing their "alleged" profit margin, (24%-ish +/- 5% depending on who you speak to), it's just that way to many liabilities (variables) have come into play. The most important news was the riot at FOXCONN, which was a message from China to let APPL know who is actually "h**ping the cat, and who is just holding the tail, nu?"
There's an old proverb, "Even a misquito, can make a Lion's eye bleed." China is exercising it's ability to hurt the US by tampering with production at FOXCONN. What if it really hits the fan this next time, and FOXCONN has a lockout? The halted production of that one device could cause a 15% drop in share price in just one session alone, sending people running for the exits. Something to think about.
I do hope you are right, and good luck on your position. Just remember to have a "macro-look" at things brewing right now in China. After US snubbed them due to communication security issues, they will seek revenge. Hitting APPL where it hurts would be effective. Read Sun Tzu's "Art of War.
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
People are not going to continue to pay for a cell phone that costs between $600-800 USD.
That being said, APPL had a nice ride, time to get out while you can. If they had simply followed the roadmap Mr. Jobs left for them before his death, they would be strong right now.
Instead, the problems are surfacing, FOXCONN chiefly among them. Letting China to have ANYTHING to do with a product is suicide, aside from the fact you are paying over 15 times the production cost. Labor problems crippling production at the drop of a hat has nothing to do with stability.
Why isn't that being questioned? CISCO just got tired of drinking the Chinese Kool_Aid, when will APPL wake up? Most telecom experts can openly tell you about the Spyware known as FinFisher, capable of taking control of a number of mobile devices including the iPhone, as Bloomberg recently reported.
According to researchers at the University of Toronto, the program can secretly record from a device’s microphone, track its location and even monitor emails, text messages and voice calls. “People are walking around with tools for surveillance in their pockets,” said John Scott-Railton, a doctoral student at the University of California Los Angeles’ Luskin School of Public Affairs. “These are the tools that can be used to turn on your microphone and turn your phone into a tracking device.”
FinFisher was developed by U.K.-based Gamma Group and marketed to law enforcement and government agencies for monitoring computers and mobile devices. The company confirmed, however, that one of its demonstration copies had been stolen. Wonder who ended up with that? Hmmmm.....
* This however, has NOTHING to do with the embedded peilsender installed in the device by the Chinese, to spy on you, that would suggest GIANT legal trouble APPL.
If APPL was a $100 stock, there would still be room for growth, but with constant internal mgt. problems, patent litigation almost monthly now, and people losing faith in the brand, put a fork in them, they're done.
Cisco (CSCO) ends a 7-year partnership with ZTE following allegations that the Chinese company illegally sold equipment to Iran, including Cisco switches and a telecom surveillance system. ZTE was "reasonably successful" in reselling Cisco products in China, although other aspects of the partnership didn't go so well. ZTE, along with Huawei, was yesterday accused of posing a security threat to the U.S. [View news story]
There are many companies posing a threat to US Infrastructure:
- EADS (sharing aircraft plans with China, then angry the US snubbed A400) - SIEMENS (sharing new US Nuclear Reactor plans with highest bidder, typical German standards) - ZTE (cited above, same MO as SIEMENS, China in bed with, Iran, N. Korea)
to name a few of the most transparent, operating in plain view, with impunity.
All well known and documented, nobody cares, ESPECIALLY the US Congress. Follow the money trail.
Spain's Finance Minister: The New King Of Comedy [View article]
You mean to say, "in Europe", 58% of homes owned are inherited, (or bought with inherited cash) as they are otherwise not affordable.The EU workforce not earning nearly enough to pay for a mortgage. I suggest you look at Germany, currently being mentioned as among the EU's wealthiest, yet boasts only a minimum wage of less that $10 USD, pathetic.
That "purchasing power" you alluded to, was made possible by the FED, making MASSIVE loans to the EU's struggling banks to the tune of TRILLIONS.
FED is the "de facto" owner of the EU now anyway, with the sovereign state owned property of EU member states being held as collateral on those very same loans.
Spain's Finance Minister: The New King Of Comedy [View article]
Exactly, and the remaining periphery can then form a core with balance. They can offer special conditions to industry who would come in and build factories, creating jobs.
AND... "theoretically" adopt an already standing currency, (USD for instance), as countries like the US that control 100% of it's money supply, CANNOT go bankrupt and run NO RISK of default, thumbing their noses at Germany.
Now, that would be the most logical route. At any rate, breaking free of Germany's predatory financial control is a must for any of the periphery who wish to survive.
Spain is prepared to request an EU bailout as soon as this weekend, but Germany wants Madrid to wait because of political considerations, especially so soon after the Bundestag authorized the €100B rescue of Spanish banks, Reuters reports. The countries have played down the speculation. Brussels wants Spain to apply for aid and won't impose conditions harsher than the reforms the country has already announced. [View news story]
Especially since Germany's exposure will be revealed, you mean, as Spain is then legally forced to list.
How much more criminal does this have to get before Germany becomes an island?
Top global oil trader Vitol has continued to buy and trade Iranian fuel oil, Reuters reports, highlighting the challenges facing Western efforts to sanction Iran. Switzerland-based Vitol, which isn't bound by EU sanctions on Iran, reportedly bought 2M barrels of fuel oil from Iran for power generation and offered it to Chinese traders. [View news story]
They are however, bound by UN Treaty and Resolution.
Xstrata's board is reportedly set to recommend Glencore's sweetened $80B merger bid, which includes a controversial £140M retention package for Xstrata's senior execs and gives it a majority of directors on the combined board. Crucially, major Xstrata shareholder Qatar will back the new offer and the retention package. The deadline for the company to give its recommendation is tomorrow. [View news story]
I would exercise caution in the way you are reporting this, you make it sound academic at this point.
FACTS:
1) This is only a recommendation, and Xstrata is "reportedly" set to recommend the bid which bends shareholders over the table in the long run.
2) Even IF the terms are accepted, Glencore still has to file its long-awaited antitrust notification with the European Union, NOTHING is guaranteed, and the filing will quickly come under scrutiny for obvious reasons.
NOTE: Do you really believe BHP/Rio won't counter? The same EU Anti-Trust & Competition Laws that would allow "Glenstrata", MUST also allow BHP/Rio, and we all know (BHP/Rio) ARE THE SECTOR.
FOOD FOR THOUGH: If you think FB went wrong fast, (as we warned), look for "Glenstrata" to spark the correction everyone has been fearing, as far too many "junior analysts" who haven't yet cut their teeth,are taking this deal for granted. Remember that when Glasenberg tries to pull an "Ichan" on you, also a concern at recent meetings.
DISCLAIMER: I do not have ANY position in either Glencore or Xstrata,
Germany has a particular interest in helping Spain through its crisis, as the exposure of German lenders to the Mediterranean country is $139.9B, of which $45.9B is to banks. German institutions are particularly exposed to covered bonds, which are often backed by the collateral of consumer mortgages, whose values may have been affected by the cratering of the residential market. [View news story]
Now here comes the kicker!
Germany had their Bundesverfassungsgericht (Constitutional Court in Karlsruhe) decide their participation limit on EU bailout will be set at 190 BIL Euros.
So, my take is, since we can all see that is more or less their amount of exposure to Spain, they will use that 190 BIL Euros earmarked for the bailout, to bail "themselves" out.
Oh, don't act surprised, they are experts at this.
* (Earmarking is a legislative provision that directs "approved funds", (in this case the alleged "bailout commitment" itself), to be spent on specific projects, or that directs specific exemptions from taxes or mandated fees.) So that covers their debt to Spain, and helps pass Germany's costs on to the EU through the bailout fund, where it will be spread around among the other EU Member States. The beauty part is, they don't have to help anyone else out, their commitment being reached.
Germany as their most corrupt, mind you, what's new? This is nothing we haven't seen before.
German manufacturing PMI dropped to 43.0 in July from 45.0 in June, reaching its lowest level since June 2009. "Manufacturers linked the latest setback to shrinking export sales and a general shortage of new work to replace completed projects... job shedding was the most marked since the start of 2010." (PR .pdf) [View news story]
The terms of a full-blown bailout of Spain are under discussion, reports Reuters' man in Madrid, Julien Toyer. The preferred option is for the EFSF to buy Spanish debt directly from the government while the ECB props up the secondary market. No decision is expected before mid-September. [View news story]
I would never be involved in a partnership where my partner would be up to anything behind my back. I have NEVER loaned money to a project I didn't fully control, as a stipulation of my involvement.
Certainly, if the partner was spending "OUR" business profits on "HIS personal life", he may likely be brought up to the rooftop of our building for a little "10 on 1" conversation.
I have never been threatened by any business partner, nor will I ever be.
My people have an old saying, "No one is as deaf as the man who will not listen."
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
My statement has to do with the fact that the downturn has begun in the US / Chinese tech war, and it will become an issue of China reaching out to slap the US, albeit "economically speaking", simply because they can.
Your comment that this is a market of "human sentiment" is interesting. However, "brand sentiment" is not "human sentiment", for further reading, see P R Sarkar, (Neohumanism, Human Sentiment.) By comparison, the misnomer "brand sentiment" is the pejorative, and clearly misses the definition of human sentiment, according to Mr. Sarkar, who's philosophy it is we are talking about.
enter Stage left: China
It's about Chinese control preventing APPL from succeeding, not only the variable which non-professionals are ignoring, but the same one which will grab headlines before 2012 year end.
Very Good article, gives us all much to think about.
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
However, there was quite a bit of analysis behind my comment that APPL will never see $1K. If you are interested, start checking US Foreign / Trade Policy changes coming up as a result of the US Presidential Election. I am FULLY confident there will be radical changes in the US Tech Sector, forthwith, ESPECIALLY where China is concerned.
In a recent Congressional Research Service report to US Congress I received, it mentioned:
"China’s incomplete transition to a free market economy and its use of distortive economic policies have increasingly strained commercial relations with the United States. Major concerns raised by U.S. policymakers and stakeholders include China’s efforts to maintain an undervalued currency, its mixed record on implementing its World Trade Organization (WTO) obligations, its relatively poor record on protecting intellectual property rights (IPR), and its extensive use of industrial policies (such as financial support of state-owned firms, discriminatory government regulations, pressure on foreign-invested firms in China to transfer technology, and export restrictions on raw materials). Many analysts argue that such policies are harmful to U.S.
economic interests and have contributed to U.S job losses. For example, one U.S. government study estimated that IPR infringement in China cost U.S. IPR-intensive firms $48 billion in 2009."
"Some Members of Congress advocate a more aggressive U.S. trade policy towards China, such as increasing the number of dispute settlement cases brought against China in the WTO, where the United States has prevailed on a number of issues."
During his State of the Union Address in January 2012, President Obama announced plans to create a new Trade Enforcement Unit
“charged with investigating unfair trade practices in countries like China.”
NOTE:
Some analysts caution that taking a more aggressive stance against China over its trade policies could induce it to
retaliate against U.S. exports to, and investment in, China. Look for this to become a key issue for the Election. After the outing of Chinese Telecommunications Device Manufacturer ZTE, look for tensions to rise.
Again, it took 5000 Policemen (cracking skulls mind you, with clubs, Chinese Police tactics are brutal) to restore order at a FOXCONN factory, and that was a "passive" demonstration, workers have been killing themselves in protest to work conditions there.
APPL is a MASSIVE liability, regardless of which 3rd world sewer they decide to operate.
A COMPROMISE
Why don't they let those wonderful APPL products be manufactured in the US?......................
* If you drink that APPL Kool-Aid, and actually believe them when they say, "it's about people"....... IF it is about people, bring APPL home to the US, manufacture it here, and when hit with higher production costs, keep the price the same, just take less profits.
REMEMBER, APPL says.... it's REALLY about "the people", nu?
I'll see you on the ride down to $300 bucks before Jan 1, 2013.
Great comments, thank you for the engagement, and as i said i wish you the best of luck on that position.
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
Certainly, I would be glad to.
THESIS:
All we keep hearing is the insane question, "will it hit $1000 USD?"
Never. I just verbally polled 7 people here on the floor (NYSE), 2 laughed, one gave me the finger, and four collectively said, "hell no."
You have to understand that APPL stock price is built on the expectation that sales will continue to boom. With lousy product reviews on iPhone 5, overpriced Chinese hardware, and growing "anti-China" sentiment, don't count on it. People love you when you give them what they want, the minute that ends, they walk. Can APPL keep given people what they want?
No, nothing lasts forever. Especially when your product is being built in a country who's corruption and control is off the charts.
According to financial sources:
"Unless APPL stock just gets caught up by a wave of euphoria, APPL future stock appreciation will have to be driven by fundamentals—namely, earnings and cash flow."
* That being said, and for simplicity's sake, let's use earnings:
APPL earned about $32 billion last year, (+/- $3 BIL USD)
At a $500 BIL USD valuation, the stock is trading at about fifteen (15X) those earnings.
IF APPL earnings multiple (P/E ratio) stays the same, (which is not a given) APPL earnings will have to double (2X) for the company's value to hit $1 TRIL USD.
Specifically, APPL will have to earn about $65 BIL USD in a year.
Likelihood? ( Not even if they printed their own money in the basement.)
IF APPL profit margin stays the same , to earn $65 BIL USD, it will have to DOUBLE (2X) its revenue.
LOL
Although APPL did generate a staggering $125 BIL USD of revenue last year,......doubling (2X) revenue would mean generating $250 BIL USD of revenue.
Likelihood? ZERO
Nobody is disputing their "alleged" profit margin, (24%-ish +/- 5% depending on who you speak to), it's just that way to many liabilities (variables) have come into play. The most important news was the riot at FOXCONN, which was a message from China to let APPL know who is actually "h**ping the cat, and who is just holding the tail, nu?"
There's an old proverb, "Even a misquito, can make a Lion's eye bleed." China is exercising it's ability to hurt the US by tampering with production at FOXCONN. What if it really hits the fan this next time, and FOXCONN has a lockout? The halted production of that one device could cause a 15% drop in share price in just one session alone, sending people running for the exits. Something to think about.
I do hope you are right, and good luck on your position. Just remember to have a "macro-look" at things brewing right now in China. After US snubbed them due to communication security issues, they will seek revenge. Hitting APPL where it hurts would be effective. Read Sun Tzu's "Art of War.
Safety first, and I wish you good business.
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
That being said, APPL had a nice ride, time to get out while you can. If they had simply followed the roadmap Mr. Jobs left for them before his death, they would be strong right now.
Instead, the problems are surfacing, FOXCONN chiefly among them. Letting China to have ANYTHING to do with a product is suicide, aside from the fact you are paying over 15 times the production cost. Labor problems crippling production at the drop of a hat has nothing to do with stability.
Why isn't that being questioned? CISCO just got tired of drinking the Chinese Kool_Aid, when will APPL wake up? Most telecom experts can openly tell you about the Spyware known as FinFisher, capable of taking control of a number of mobile devices including the iPhone, as Bloomberg recently reported.
According to researchers at the University of Toronto, the program can secretly record from a device’s microphone, track its location and even monitor emails, text messages and voice calls. “People are walking around with tools for surveillance in their pockets,” said John Scott-Railton, a doctoral student at the University of California Los Angeles’ Luskin School of Public Affairs. “These are the tools that can be used to turn on your microphone and turn your phone into a tracking device.”
FinFisher was developed by U.K.-based Gamma Group and marketed to law enforcement and government agencies for monitoring computers and mobile devices. The company confirmed, however, that one of its demonstration copies had been stolen. Wonder who ended up with that? Hmmmm.....
* This however, has NOTHING to do with the embedded peilsender installed in the device by the Chinese, to spy on you, that would suggest GIANT legal trouble APPL.
If APPL was a $100 stock, there would still be room for growth, but with constant internal mgt. problems, patent litigation almost monthly now, and people losing faith in the brand, put a fork in them, they're done.
Cisco (CSCO) ends a 7-year partnership with ZTE following allegations that the Chinese company illegally sold equipment to Iran, including Cisco switches and a telecom surveillance system. ZTE was "reasonably successful" in reselling Cisco products in China, although other aspects of the partnership didn't go so well. ZTE, along with Huawei, was yesterday accused of posing a security threat to the U.S. [View news story]
- EADS (sharing aircraft plans with China, then angry the US snubbed A400)
- SIEMENS (sharing new US Nuclear Reactor plans with highest bidder, typical German standards)
- ZTE (cited above, same MO as SIEMENS, China in bed with, Iran, N. Korea)
to name a few of the most transparent, operating in plain view, with impunity.
All well known and documented, nobody cares, ESPECIALLY the US Congress. Follow the money trail.
Jack Welch is only half right - don't trust the numbers in any jobs report, not just the latest one. Revisions on top of revisions... the vast discrepancy between two sets of employment totals... lumping part-time workers with full-timers. But the numbers aren't rigged; if they were, the BLS isn't doing a very good job of it. In 2011: 153K jobs created per month. So far in 2012: 146K/month. [View news story]
Germany has been at it for 30 years and nobody says a word except how wonderful their economy is, a complete "load".
See: http://bit.ly/VAXEXF
Why all the US bashing?
Spain's Finance Minister: The New King Of Comedy [View article]
That "purchasing power" you alluded to, was made possible by the FED, making MASSIVE loans to the EU's struggling banks to the tune of TRILLIONS.
FED is the "de facto" owner of the EU now anyway, with the sovereign state owned property of EU member states being held as collateral on those very same loans.
Maybe you tuned in late, nu?
See GAO FED Audit; pgs. 130-131
Spain's Finance Minister: The New King Of Comedy [View article]
AND... "theoretically" adopt an already standing currency, (USD for instance), as countries like the US that control 100% of it's money supply, CANNOT go bankrupt and run NO RISK of default, thumbing their noses at Germany.
Now, that would be the most logical route. At any rate, breaking free of Germany's predatory financial control is a must for any of the periphery who wish to survive.
Spain is prepared to request an EU bailout as soon as this weekend, but Germany wants Madrid to wait because of political considerations, especially so soon after the Bundestag authorized the €100B rescue of Spanish banks, Reuters reports. The countries have played down the speculation. Brussels wants Spain to apply for aid and won't impose conditions harsher than the reforms the country has already announced. [View news story]
How much more criminal does this have to get before Germany becomes an island?
Top global oil trader Vitol has continued to buy and trade Iranian fuel oil, Reuters reports, highlighting the challenges facing Western efforts to sanction Iran. Switzerland-based Vitol, which isn't bound by EU sanctions on Iran, reportedly bought 2M barrels of fuel oil from Iran for power generation and offered it to Chinese traders. [View news story]
Xstrata's board is reportedly set to recommend Glencore's sweetened $80B merger bid, which includes a controversial £140M retention package for Xstrata's senior execs and gives it a majority of directors on the combined board. Crucially, major Xstrata shareholder Qatar will back the new offer and the retention package. The deadline for the company to give its recommendation is tomorrow. [View news story]
FACTS:
1) This is only a recommendation, and Xstrata is "reportedly" set to recommend the bid which bends shareholders over the table in the long run.
2) Even IF the terms are accepted, Glencore still has to file its long-awaited antitrust notification with the European Union, NOTHING is guaranteed, and the filing will quickly come under scrutiny for obvious reasons.
NOTE:
Do you really believe BHP/Rio won't counter? The same EU Anti-Trust & Competition Laws that would allow "Glenstrata", MUST also allow BHP/Rio, and we all know (BHP/Rio) ARE THE SECTOR.
FOOD FOR THOUGH:
If you think FB went wrong fast, (as we warned), look for "Glenstrata" to spark the correction everyone has been fearing, as far too many "junior analysts" who haven't yet cut their teeth,are taking this deal for granted. Remember that when Glasenberg tries to pull an "Ichan" on you, also a concern at recent meetings.
DISCLAIMER:
I do not have ANY position in either Glencore or Xstrata,
Germany has a particular interest in helping Spain through its crisis, as the exposure of German lenders to the Mediterranean country is $139.9B, of which $45.9B is to banks. German institutions are particularly exposed to covered bonds, which are often backed by the collateral of consumer mortgages, whose values may have been affected by the cratering of the residential market. [View news story]
Germany had their Bundesverfassungsgericht (Constitutional Court in Karlsruhe) decide their participation limit on EU bailout will be set at 190 BIL Euros.
So, my take is, since we can all see that is more or less their amount of exposure to Spain, they will use that 190 BIL Euros earmarked for the bailout, to bail "themselves" out.
Oh, don't act surprised, they are experts at this.
* (Earmarking is a legislative provision that directs "approved funds", (in this case the alleged "bailout commitment" itself), to be spent on specific projects, or that directs specific exemptions from taxes or mandated fees.) So that covers their debt to Spain, and helps pass Germany's costs on to the EU through the bailout fund, where it will be spread around among the other EU Member States. The beauty part is, they don't have to help anyone else out, their commitment being reached.
Germany as their most corrupt, mind you, what's new? This is nothing we haven't seen before.
German manufacturing PMI dropped to 43.0 in July from 45.0 in June, reaching its lowest level since June 2009. "Manufacturers linked the latest setback to shrinking export sales and a general shortage of new work to replace completed projects... job shedding was the most marked since the start of 2010." (PR .pdf) [View news story]
The terms of a full-blown bailout of Spain are under discussion, reports Reuters' man in Madrid, Julien Toyer. The preferred option is for the EFSF to buy Spanish debt directly from the government while the ECB props up the secondary market. No decision is expected before mid-September. [View news story]
Certainly, if the partner was spending "OUR" business profits on "HIS personal life", he may likely be brought up to the rooftop of our building for a little "10 on 1" conversation.
I have never been threatened by any business partner, nor will I ever be.
My people have an old saying, "No one is as deaf as the man who will not listen."
Shalom