Gepost in 30 08 10 door Steven op maandag 30 augustus 2010
The Decline of the P/E Ratio
Consider that while P/E ratios dropped during the inflationary 1970s, they also fell during the deflationary 1930s. The one common thread tying those two eras of falling P/E ratios: unpredictable economic performance.
“We’re looking at a more volatile U.S. economy than we experienced in the last 30 years,” said Doug Cliggott, U.S. equity strategist at Credit Suisse in Boston. “The pressure on multiples may be with us for quite some time.”
Gepost in 30 08 10 door Steven op maandag 30 augustus 2010
As nationalism rises, will the European Union fall?
If these obstacles to a stable union weren’t sobering enough, in July, the E.U.’s rotating presidency fell to Belgium – a country whose Dutch-speaking Flemish citizens and French-speaking Walloons are so divided that, long after elections in June, a workable governing coalition has yet to emerge. It speaks volumes that the country now guiding the European project suffers exactly the kind of nationalist antagonism that the E.U. was created to eliminate.
Gepost in 30 08 10 door Steven op maandag 30 augustus 2010
The Dangers of Germany’s Dependence on China
The country is pursuing a dual strategy. On the one hand, China gains access to state-of-the-art technology through joint ventures. On the other, it is developing the technology of the future: electric cars. Chinese companies are already world leaders in battery technology, which could give the newcomer a decisive competitive edge over established European and Japanese carmakers.
This form of cooperation has been dubbed the “concubine economy.” Just as the Chinese emperors once selected their concubines, China’s current leadership selects foreign companies and grants them the right to produce goods locally in cooperation with a domestic partner.
The People’s Republic compels the German carmakers to enter into these joint ventures. By imposing high import duties, the government prevents the Germans from simply exporting German-made cars to China. Any company interested in selling large numbers of its products is required to build factories in China with a Chinese partner, thereby giving the country access to their technology.
