Chillin' out till it needs to be funded
The results finally caught 5 Cajas from Spain in the act between 4-6% on Tier I Capital, Common being as bad as the US counterparts at 2% but the bill is just EUR 2.3 billion and the currency is already rejoicing after british Pound also reported a 1.1% growth in Q2 . The US number is out on Monday after the global markets trade to their heart’s content and markets open in New York, Pennsylvania and Chicago looking for the new Fed to show them the money.
The Stress test results are out tomorrow and local opinion and Jean-Claude Trichet are greatly in favor of proving the fundamental health of the banking system by withdrawing the quantitative support in treasuries slowly.
Stress Tests have thrown up industry wide numbers like $120 bn from Credit Suisse in Tier I Capital Deficits but not more than a dozen of the 90 odd banks would be asked to go in for a capital raising and Landesbanks and Spanish Cajas may not even be really tested in their entirety as the parameters require only 50% of the banking assets of each nation to be included in the list of 90 banks created.
For example in Germany, 5 mainstream banks are being tested and Deutsche Bank and Commerzbank have already cleared the hurdles Of course Spain would likely have a harrowing time in the markets after results do come out. A lot of material is now available in the Reuters Insider product for those who want to do a deep dive.
In the US at the same time we have obviously run out of measures n interest rates to continue the stimulus and it seems the municipal fracture is nearer than it would have lulled us to in the year of ‘recovery’. It would be thus a brilliant way of funding and saving the economy at the same time, if Bernanke was to simply go and get some funding action initiated for Municipal investors and CMBS holders, defining a new measure of success not away from the central theme of Obamanomics and that which may just be able to bring us back to an era of tangible interest rates and simpler monetary policy in the near term.
The Apple antenna controversy is not going to catch, though it has ensured that the stock rules at subdued levels, there seems nothing material will come of the controversy. Though some users are getting free $30 iPhone cases. We don’t even see eye to eye on the Apple iPhone pricing internationally to be able to go forth in sympathetic tones with the lack of strategy that Apple has but all that is a minor scratch on the plastic as is now pretty advanced in its product strategy and seems to have the thread of it going forward as well. iPad and iPhone sales will of course soon dwarf other apple product sales..
Update: Apple just reported revenues of $15,7 billion with 8.4 million iPhones sold and already 3.7 million iPads for the quarter from a launch estimate where we were among the very few who expected 1 million units a month to be a cakewalk stopped only by production constraints..Earnings are nearly one and a half times last year with $3.51 per share for a huge $3.25 billion net profit to make for a sunny Wednesday all around..
After getting some investments from China just 4-5 months back, and after Pepsi beat forecasts on Monday, Coke used its long association with the World Cup to add 16% growth to the profits in Q2 reported today morning. Retail Lifestyle economies look up to the iconic brand still managing the superbrand line up without visible charitable lineage to over burden the “flavour” Not all of it was from the World cup too as Brazil did grow 13% but India shot up 22%. While global revenues increased to $8.67 billion, profits grew faster to $2.37 billion the revenue in a deficit of a 3 cents on the Reuters poll estimates and added that to the profits with earnings at $1.06 per share 😀
Atlanta of course was worried since Monday having lost sleep after Pepsi said that despite completing two very big buyouts, it has only lost 3% on profits. Revenues at Pepsi were up 40% despite a slow China but Pepsi has started scoring closer to home, with Gatorade showing volume increases ahead of planned comebacks in North America.