GNP, M&A, EBITDA, P/E, NASDAQ, Econo-thread Part 10

[DanS]

Originally posted by Roland
Sheesh, never buy US companies...

They do have their risks and rewards.

Btw, what happened to your KMart ? Didn't you say something about a strong balance sheet a while ago ?

Their balance sheet has been deteriorating for a while. I expected some deterioration as they turned their business around, but things haven't been going my way since the ratings agency downgrades a couple of months ago.

I'll probably get out of the stock. Even though I don't think the investment was a mistake, things just didn't work out.

[Roland]

"They do have their risks and rewards."

Indeed. And then there's tort law.

"I'll probably get out of the stock. Even though I don't think the investment was a mistake, things just didn't work out."

Hey it rallied on the bankruptcy talk. This market is nuttier than... than... it was in March 2000 (total lack of adequate comparisons ).

[DinoDoc]

Roland, your attention is needed in this thread to answer a few questions regarding international law.

I now return you to your regularly scheduled thread.

[DanS]

"And then there's tort law."

Well, I guess I agree with the law. It is true that it sometimes goes to excess with punitive damages.

"Hey it rallied on the bankruptcy talk."

I guess the saying is true... No publicity is bad publicity.

edit: also, what are you guys doing over there? Italian foreign minister resigns over the successful introduction of the Euro? Trying to snatch defeat from the jaws of victory?

[Ted Striker]

[Roland]

Ted, what about the ****er smiley ?

Dan:

"Well, I guess I agree with the law."

Bloody Americom.

"Italian foreign minister resigns over the successful introduction of the Euro?"

Has been brewing for a while. Bossi is eurosceptic, Berlusconi is clueless, yet both want to conduct foreign policy. As Ruggiero is a political heavyweight, he didn't want to be bossed around, and Bossi saying something like "**** the euro" and Berlusconi saying the minister is just his lackey, that was just the last straw...

As we say: An italian minister resigning is about as interesting as a rusty bike breaking down in Beijing...

Edit:

As we were talking about fake recoveries from Al's rampjob and inventory effects a while ago:

http://www.morganstanley.com/GEFdata/digests/20020107-mon.html#anchor0

[DanS]

"Bloody Americom."

Well, if you knowingly sell or sold stuff that is inherently very bad for peoples' health, then don't cry when you're sued. You had it coming to you! Everyone tries to get out of paying one way or another...

"As we say: An italian minister resigning is about as interesting as a rusty bike breaking down in Beijing..."

Precisely. I guess it's about as interesting as someone getting criticized by a French minister.

The folquays and mores of European political theater haven't been set yet, but it is funny to watch, and more than a little bizarre to my eyes. Berlusconi should tell the French to stuff it, just as the Austrians should (and did?) tell the rest of Europe to stuff it when the government was formed. What a tempest in a teacup!

Interesting article, especially the recession comparison numbers. I'll take a closer look later.

[Roland]

"The folquays and mores of European political theater haven't been set yet, but it is funny to watch, and more than a little bizarre to my eyes."

What I found more bizarre was the repetition of the US election fiasco in Zambia.

"Berlusconi should tell the French to stuff it"

They had something to say as well ? Talkative bunch, huh ?

[DanS]

"Talkative bunch, huh ?"

Apparently, the French Finance minister "demanded clarification" of Italy's position on Europe. To which I thought to myself "WTF?" The Euro is already done (total victory), so why is the Finance minister talking about it at all? Further, why piss in the punch bowl at the party? Lastly, why on Earth is it any of France's business? Do they "demand clarification" from Denmark, Ireland, or the UK anytime they feel like it?

Almost like everyone's accusing each other of total success.

"Roland, you idiot! That was done so well, I'm disgusted with you! You need to explain yourself at once! I'm losing confidence in you because the policies were well-constructed and executed to everyone's satisfaction!"

"What I found more bizarre was the repetition of the US election fiasco in Zambia."

Apparently, there's nothing to stop lightning from striking the same place twice...

[Roland]

"Apparently, the French Finance minister "demanded clarification" of Italy's position on Europe."
"Lastly, why on Earth is it any of France's business?"

Well that's not so surprising. That stuff is more and more a matter of european internal politics rather than international relations, so that is like the dem Senator from California demanding that the rep Senator from Texas clarifies his position on alien vivisection.

In the same vein complaints about the ****heads in our government are legitimate. What drove me mad about the "sanctions" against Austria was that the EU is the justification for making it a political issue, and then they tried to deal with it outside the EU framework with inappropriate means.

"Almost like everyone's accusing each other of total success."

Did you never feel the emptiness after victory ?

[Colonâ„¢]

Dan, you know a little about videocards do you? A PC breaks down suddenly two times, the monitor displays no signal input and the computer fails to boot afterwards. The first time the problem was fixed by replacing the wire between the monitor and the computer, the second time by updating the video drivers. What does that mean if the computer breaks down a third time, in the same fashion? Is there some sort of conflict? (this affects you too, as a post to you was being written at the time of the breakdown )

Anyway, you asked for productivity data and barring any further server hiccups and crashing computers you finally get to see them.

You can compare productivity data in chapter 2 of the competitiveness report 2001 (pdf file) by the European Commission. Allow me to note how investment growth correlates with productivity growth and also that Japan achieved superb productivity growth before the bubble burst. It wasn't even all that bad in the 90's either, but that didn't seem to ease the crisis. (it might even have made it worse by spurring deflation)

Here are also GDP/capita growth figures of the EU and the US. (from the EC and the US Department of Commerce)

1961-70
EU: 4.4%
US: 2.9%

1971-80
EU: 2.8%
US: 2.1%

1981-90
EU: 2.1%
US: 2.2%

1991-2000
EU: 2.0%
US: 2.1%

projected 2001-10
EU: 2.7%
US: 2.2%

How was vacation Roland?

[Roland]

"How was vacation Roland?"

1/3rd: Curing out that psky cold
1/3rd: Catching up sleep
1/3rd: not getting enough sleep by going out too much

So, pretty good.

How's uni/work going ?

And btw, where's Sten ? Did he trash any of your mails recently ?

[DanS]

Roland: Oh, OK, I guess I was viewing the states more as entities making up a federation. So for instance, the prime minister would be like a state governor. Governors hardly ever criticize one another because of a generally perceived boundary of interests. In fact, I'm trying to think of a prominent disagreement right now, but just can't...

But now that you mention it, there are interests conflicting (normally handled at the federal level in the US) that might be important to recognize in order to understand what's going on. For instance, Italy might be positioning itself for a fair share of the bureaucracy infrastructure (pork).

But I can't believe that you're now saying that Austria was rightly criticized. Most in the US expressed concern, but thought it was none of our business, really (unless it became so by the policies carried out). Overall, I think that the criticism was overblown, bordering on the ridiculous. Y'all were treated shabbily.

[Roland]

"Governors hardly ever criticize one another because of a generally perceived boundary of interests."

True... but imagine the lieutenant governor representing his state in the senate - that's the actual link.

"For instance, Italy might be positioning itself for a fair share of the bureaucracy infrastructure (pork)."

I don't think pork is playing a big role in this... esp as the EU budget is 1 % of GDP, and 5 % of the budget is admin cost...

"But I can't believe that you're now saying that Austria was rightly criticized."

The government. Not Austria. Our government. Every one's welcome to piss in their face as far as I'm concerned.... overblown ? Sure. But that's politics.

[DanS]

Colon: God, what a bunch of hand-wringing! The report writer seems like he was about to put an end to his miserable existence over the differences in per capita GDP!

I'm much more sanguine for Europe on a per-capita GDP basis. Europe won't like it at all, but there will be probably be a marked upward shift in labor utilization. The US has been undergoing this over the last ~ 20 years and it truly sucks in many ways. See Denmark, Austria, Sweden, Netherlands for countries that seem to have already made a switch to higher labor utilization. Once the big boys start this path to > 75%, there will be a ton of complaining.

More to come...