Thursday, 26 January 2012

Daily Reads

Another edition of Daily Reads:

  • Bank of America - Annual Pay Changes
    • Interesting the ongoing readjustment for risk reward in the once high flying financial industry.
  • Apple - dividends eventually?
    • Record breaking sales and profit also mean record breaking cash.  Apple now has $100 billion in cash and no debt.  Problem they have now...what do they do with it?  They are unlikely to make any big multi-billion acquisitions and letting cash sit is not very efficient.  Likely they'll announce some sort of dividend.  Microsoft did the same a few years ago and they are now a regular dividend paying company.
  • First Trade Deficit in Japan since 80's
    • This may not seem important at first (after all, US and many countries have trade deficits) but Japan has many problems.  An aging population with lower economic demand, the highest national debt of all industrial countries, and declining population.  The only way to sustain their economy is to grow out of it.  If they can't grow their natural population demand, they had to grow it by exporting.  This was one of the last recourses for Japan to stay afloat.  If this continues, it can spell a nasty beginning of what might become an inevitable Japan downturn.  The trade deficit was partly caused by one time disasters and by the strong yen.  Look for Japan to start intervening more strongly to drive the yen down. 
  •  Earnings Watch
    • One very fascinating look at this earnings season is that most companies are either hitting their numbers and surpassing them strongly or just completely stumbling.  Apple, Netflix, etc all come to mind.  What's also interesting is how the market has been reacting very strongly to each move.  Lately its not been unusual to see stocks jump or drop 10% off the back of these earnings.  Quite volatile and quite unusual.

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