• Writing break due to travel. How is it a small, less open than it thinks emerging tropical economy pegged to the US dollar looks as healthy as it does? Second trip required.
  • Billiton BHP: is there a serious argument contradicting China’s socio-political need to stop further consolidation of its iron ore suppliers? Steel employs at least 2 million and has been producing at rates a sinking US construction market cannot soak up. And as fast as China pushes into shipbuilding, car and fridge manufacturing to maintain employment one wonders if the demand is really there (and sustainable). Higher input costs that a reduced iron ore supplier base will demand surely will come at an inconvenient moment. On the other hand, blocking a $140bn+ deal is not a gimme.
  • Does anyone watching banks believe that Tier 1 ratios mean much in the current climate? “What is capital?” looks an unanswerable Jeopardy question making even previous favourites (of the scribe, at least) Royal Bank of Scotland and Credit Agricole appear unattractive investments – whatever PE, book valuations and divis would seem to say. And RBS is probably not helped by the leverage it took on to make the ABN deal either. Chairman Sir Tom McKillip may have bought £500k of shares 2 days ago but show us signs of those vaunted synergies first and then let’s talk.
  • Markets seem to be suffering the cramp during coitus experience (potentially embarrassing analogy but there it is). Except financials who just have cramp.
  • Is sterling’s strength against the dollar some sort of time-lagged joke?
  • Finally, and this is probably trickier than it sounds, is Shire Pharmaceuticals plc worth breaking a rule for?

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  1. "Cassandra" // 11/12/2007 06:10:00 PM

    Sterling's strength vs. USD is simply investor mypoia and ignorance at its best. It is one of those times that one must conclude: they really are that stupid. Full stop. Why was CAD at 1.50 vs. USD rather recently ? Why was the Euro at parity or lower to buck also reasonably recently? Myopia coupled with single-factor models or motivators that are interest rate differentials and imminent changes thereof.

  2. RJH Adams // 11/12/2007 06:21:00 PM


    Loving that Japanese housewife.


  3. "Cassandra" // 11/12/2007 07:29:00 PM

    Actually, she's "Landlady" from Stephen Chow's Kung-Fu Hustle (also maker of Shaolin Soccer).

    If you've not seen seen either, they are hilarous and should be acquired. Imagine Jackie Chan's "Rush Hour" meets Guy Ritchie's "Snatch". Ummm reading that last sentence I don't think that I've phrased it properly, but you know what I mean...

  4. "Cassandra" // 11/12/2007 07:31:00 PM

    I thought someone would say something about my "Sotheby's Gets Hammered" title. The amusing thing is that pun was entirely unintended...

  5. RJH Adams // 11/12/2007 07:52:00 PM

    Re: KF Hustle, just been through the synopsis and ordering. Still, I'd like to go on thinking she's a Japanese housewife on your site...

    Re: Sotheby's - hadn't got past Option G - Screw the Bastards Royally in previous post. Great story (pun too), useful signal - maybe. Or Sotheby's got greedy (again).

    Other: must drop you a line separately via email when time permits...

  6. "Cassandra" // 11/12/2007 08:22:00 PM

    FYI am in UK nov 28-Dec 3 and Dec 12-16

  7. Macro Man // 11/14/2007 05:36:00 PM

    Re: sterling. As a habitual shorter of sterling this year, I can attest that not ALL investors have myopia. Sadly, those of us selling the pound have too often met one or another kind of unsavoury character on the other side of the trade: either an Asian CB/ME monetary authority, whose whole modus operandi appears to be buying that which is exepnsive and selling that which is cheap (buying dollars for renminbi, and then buying euros/sterling in exchange for those dollars), or a Russian "private sector" bank.

    The Russian fascination with all things English is a recent and, frankly, puzzling phenomenon. One might have thought that the Russkies would be more interested in, for example, Paris....but perhaps there are too many descendents of White emigres in France to make it palatable.

    In any case, price-insensitive buying of the pound by mercantilists and oil exporters is the primary explanatory variable for sterling strength. It is, however, curious to note that even Swervin' Mervyn has expressed a bit of concern at the currency world today....this weekend may well prove interesting, as Great Whites won;t be the only sharks in Cape Town.

  8. paul.murphy // 11/16/2007 02:48:00 PM

    Welcome back mr Adams

    RE; tier 1 and RBS. Citi produced an interesting note on the subjection recently. Some of it is on alphaville:


    but if you want the whole thing let me know and i will mail.

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