Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
Macleans magazine and Bloomberg each published reports that, combined, form an excellent summary of the economic issues surrounding the upcoming federal election. Both reports are objective, presenting arguments for and against a change in government. The most provocative of the ideas comes from Bloomberg who note,
"Large dollar drops don't bode well for sitting prime ministers. Major depreciations also occurred before elections in 1993 and 1984 that saw incumbents Kim Campbell of the Conservatives and John Turner of the Liberals suffer resounding defeats."
"Five Must-Watch Charts for Harper During Canada Re-Election Bid" – Bloomberg
"The top economic indicators to watch before October's election" – Moffatt, Macleans
CNBC presented an outsider view of the Canadian economy, emphasizing the term "unusual recession." The most salient quote was from TD Bank economist Derek Burleton who reported,
"[Foreign investors are] worried about Canada; they're still short Canada," Mr. Burleton said. "There's not a lot of upside to growth.""
"Canada is on the brink of a 'very unusual recession'" – CNBC
The trend of "cord cutting" – the term for cancelling cable television services and keeping only internet access – is accelerating in the U.S. and, while it's not a sure thing the practise will become popular in Canada, there is certainly reason for concern for domestic cable companies.
The U.S. fallout from cord cutting was evident in Walt Disney Co.'s results released Wednesday,
"Disney's shares fell 9 per cent on Wednesday, wiping $18-billion off the company's market value, a day after it lowered the profit outlook for its cable networks and Chief Executive Bob Iger said ESPN saw "modest" subscriber losses. "
Dish Network, the second largest satellite television company in the U.S. reported "net subscriber losses almost doubled to about 81,000, and noted the momentum toward cord-cutting."
"Cable stocks plummet as people bail on TV" – Business Insider
This isn't the usual fare for links, but The Economist's review of "The Richest Man Who Ever Lived: The Life and Times of Jacob Fugge" by Greg Steinmetz was truly fascinating to me. Jacob Fugger was born in Germany in 1459 and through ruthless efficiency came to dominant the economy of medieval Europe,
"Fugger was able to obtain control of commodities such as silver, from Austria, and copper, from Hungary. He built a smelter to refine the copper and traded it himself quite pitilessly. When he joined a cartel of copper producers in Venice they agreed to push up the price by squeezing the supply, but Fugger put pressure on his co-conspirators and rivals instead.
"He flooded the market with so much metal that the price collapsed and his competitors were gravely weakened."
"Goldenballs" – The Economist
Merrill Lynch garnered considerable attention this week by downgrading the world's largest public company, Apple Inc. Bloomberg lists the six reasons the analyst has become sceptical about the company's future,
"Six key reasons [Merrill Lynch] expects pressure on shares in the short term: 1) iPhone deceleration, 2) a slowdown in China marketshare gains 3) a deceleration in gross dollar profit growth, which is correlated to stock price, 4) A decline in the magnitude of earnings beats, 5) Only modest improvement to the iPhone coming, 6) low likelihood of more capital return plans."
"Bank of America Merrill Lynch Downgrades Apple for Six Key Reasons" – Bloomberg
Tweet of the day; "@RBS_Economics All these OECD countries have had a go at raising rates post-crisis....all have had to reverse. http://t.co/IJ4ye5JWXM – Twitter
Diversion: "It's Crazy How Much Cell Information [U.S.] Cops Think They Can Just Seize" – Gizmodo