Tuesday, November 01, 2011

Things going bump in the night...

Greece remains a very fluid situation tonight as it seems the Prime Minister is moving forward with the idea of having a referendum on the bailout.  There may be additional fireworks on Friday when a confidence vote is planned.  If the government should fail it would lead to further uncertainty because 1) a new pro-bailout government could emerge or 2) a more hardline government could take charge.

But, you're saying - why is one tiny economy holding the world's equity markets hostage?  Well, it's less about Greece and more about the Euro.  When the deal looked like it was good to go the Euro surged, rising about 8% in a month.  Well, as confidence in the deal has been shaken it's lead to a 3.5% decline in the Euro (relative to the $).  Remember a falling $ = higher stocks and a rising $ = falling stocks in the US. 

I can't imagine the pain these currency swings are causing for Global CFOs trying to source materials around the world with currencies that are swinging 5-10% every month.

US markets might try to get a little bounce in front of the Fed's minutes tomorrow but it's hard to remember what their mindset was like when minutes where written :)

It's interesting to see that the little spike in new car registrations we saw in the North Country last month was not just a local trend but part of a larger national trend. 

"Based on an estimate from Autodata Corp, light vehicle sales were at a 13.26 million SAAR in October. That is up 9.2% from October 2010, and up 1.7% from the sales rate last month (13.04 million SAAR in Sept 2011)."

"This was just above the February sales and the highest sales rate since August 2009 ("Cash-for-clunkers")."

I'm not really sure how to read this data - buyers buying at the end of the model year?  Loose financing? Or a real increase in demand?  It's hard to process auto sales hitting post-recession peaks, while the number of individuals on food stamps continues to set all-time records.

The worst story of the night comes out of Japan where Xenon was detected at the crippled Fukishima plant.  So what, you might say.  Well, Xenon is a bi-product of nuclear fission and indicates that a new meltdown could be occurring right now.  The plant operator - who has been nothing but upfront with all of the details surrounding the plant (sarcasm - off) - has said it was a relatively small amount of Xenon detected but still they were flooding the plant with boric acid in an effort to suppress any further reactions.  Stay tuned.



Anonymous said...

We purchased a new vehicle recently - new to us 2011 with low mileage. We have not had a "new" vehicle since 2000. It was time. Very good interest rate with local bank. It worries me some to have a car payment, but we are tightening up in other areas.

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