Tuesday, May 11, 2010

Mr. Euro seems to have found his way into a bad neighborhood

US markets are holding up better than those around the globe so far. We'll see if people start to get antsy about the falling Euro. I can't independently verify this story but if it's true it makes you wonder about the state of our financial system...

"We have received confirmation that several of the largest French banks are now actively shorting the euro to take advantage of globalized moral hazard, which with every ensuing bailout does nothing but make the bonuses of French FX traders surge. In other words, the very banks that Europe is bailing out are betting more and more aggressively with each passing day against Europe's own survival!"

Update: The Euro is clearly where the action is right now. Ignore all other headlines and focus on the Euro which is on the verge of a real breakdown right now. If that happens things could get wild again.

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Two small business stories out today that initially appear to conflict each other:

Small business optimism improves.

"The National Federation of Independent Business Index of Small Business Optimism gained 3.8 points in April, rising to 90.6 and ending seven straight quarters of under 90 readings1. The persistence of Index readings below 90 is unprecedented in survey history. Nine of the 10 Index components rose, particularly the outlook for general business conditions and sales, and one was unchanged. Still, job measures barely moved and capital expenditure plans were flat.

“The gains are a step in the right direction, but they are not enough to signal a solid recovery is in place,” said William Dunkelberg, NFIB chief economist. “Owners are feeling a little better about things, but not enough to turn them into concrete action.”

Jobs pictures still bleak for small businesses

"The net percent of owners increasing employment in the last three months fell one point to a net negative 12 percent. April marks the 27th consecutive ‘no new jobs’ monthly reading.

“There is little enthusiasm among owners to hire more workers, primarily due to continued weak sales trends."

While these headlines appear to contradict each other, I think they accurately reflect the current small business mindset. Small business owners are weathering the storm and have seen some trickle down of the stimulus boost sales a bit but not enough to start new hiring. The problem will come as the stimulus starts to wind down this summer and will spending be there to fill in the gap.

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I knew that google android based phones were available on more wireless systems, but I was surprised to see that android phones garnered a larger share of the smartphone market in Q1 than the iphone. Both phones still trail the Blackberry system, but I think Apple needs to be careful not to get so caught up defending their network that they watch consumers learn to love the android phones because you can make a call on the FDR Highway and it won't drop 4 times in 38 blocks.

Cheers!

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