Okay sports fans. You get your wish. Frida Ghitis reports on the Dutch reaction to being finalists in the World Cup. Colombian-born Frida’s first language was Spanish, so I am surprised she is not supporting Spain. She writes:
Americans may pay scant attention to the World Cup but my friends in the Netherlands are nothing short of euphoric. The Oranje team will play in the finals against Spain on Sunday and the Dutch, in keeping with their focus on economics and global trade, are counting their Guilders (ok, euros) in advance of what 77% of them are sure will be a Dutch victory.
Economics reporters in the Netherlands, having surveyed the matter, conclude that winning the World Cup will boost Dutch economic growth by 0.1 to 0.5%. This, they explain, is because a euphoric country experiences a surge of economic confidence, which in turn spurs spending, which can boost GDP.
It’s hard to imagine the cautious Dutch going on a national shopping binge. On the other hand, beer sales are already visibly – and audibly — up. (Drinking beer is a requirement under FIFA rules.)
Houseboat owners plan to build barricades to keep revellers off their boat tops during Tuesday’s victory parade, to happen whether the Dutch win or lose. When the Dutch team won the European Cup in 1988, houseboats sank in the party. Maybe that was good for the houseboat salvage industry.
Your editor last night went to a dinner hosted by Marta from Sevilha and Chris from Munich who are married to each other. Luckily Germany is out of the World Cup race, or there might have been an Andalucian-style Blood Wedding in Brooklyn. Your USA editor and her English husband observed scrupulous neutrality.
AutoNavi Holdings Ltd , a Chinese developer of photogrammetry (digital maps, and navigation and location software), last week became the 145th Chinese co. to list on Nasdaq with an ipo of 10 mn ADRs are $12.50/sh. AMAP is the 22nd new Chinese listing and the 8th on Q in 2010.
There are two drivers of gains on the stock market. One is corporate earnings and results. The other is liquidity. With newly-listed Chinese stocks, liquidity is in short supply despite the general and Asian market boomlets. Shanghai peaked on Oct. 16, 2007. While I know nothing about AMAP I am sure that the huge AgBank capital raising exercise occurred on Beijing’s orders, to forestall the need for govt. money.
With a weekend looming and stocks up sharply over the past three days, Wall Street can fall today. There will be profit-taking. Maybe it will be offset by money coming in from the sidelines helping support prices. There is a lot of liquidity in the hands of investors still shell-shocked out of stocks.
According to EPFR of Cambridge Mass, which tracks fund flows reported on last week’s moves which seem to have reversed:
Going into the second week of July global equity markets were staging a modest recovery as investors shrugged off fears of a double-dip recession and went bargain hunting. But flow data for EPFR Global-tracked funds reflected the uncertainty of the preceding weeks, with Money Market and US Bond Funds seeing big inflows as most equity fund groups struggled to attract significant amounts of fresh money.
Greece’s Socialist government voted to cut government pension rights and overall job protection to try to force down government debt despite tradition and a general strike yesterday. The strikes were moderate and peaceful after an earlier round left three bank employees dead.
The tradition means that many of the measures to be struck down (details still to come) were put in place by earlier Papandreou family governments, current Premier George P.’s grandfather with the same name, and his father Andreas P. The first time I visited Athens, as a student, I recall demonstrators against the Colonels shouting “eena, eena, tessera” after the article in the Greek Constitution violated by their coup against George I. Andreas went into exile and spent some years as an American academic. The younger George was born in the USA.
Learn from these Euro-American Greeks. A suggestion. How about US states running deficits (often illegal) doing like the Greeks. We should be prepared to cut abusively manipulted state pension rights too. US manipulation typically involves older workers piling up overtime to boost their pensions which are based on take-home pay rather than formal wages.
South Korea has raised its interest rates 25 basis points to 2.25% to control inflationary tendencies. It joins Norway, Australia, Israel, and India in this elite group of fast-growing countires.
Nudged by your editor, reader PS managed to get the interest rate on his margin account with TD Ameritrade cut to a still-high 3.5%. Bargain with your broker in the current low-interest rate environment. We can save you money with fees and commissions to help cover the cost of a fully paid subscription. More for paid subscribers follows from North America, Britain, South Africa, Singapore, and Thailand:
