Down - All Down

Stocks down a bit today, pretty much everywhere. I don't follow the day-to-day swings that much right now as I am mostly in cash. Just a personal choice as deciding what to do is too complex. If you feel more confident there, good luck at that.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLKcxHJIFTJI&refer=home

Not Good For Some Alternative Fuels

The fact that ethanol from corn was leading to very high prices and people lacking food was a good price support for some alternative fuels. With corn, a relatively inefficent crop for ethanol production, becoming expensive, other alternatives were gaining traction. Now, well, corn is not so expensive and alternatives have a harder path. Back to the Obama Plan, I do like his investment in alternative energy; we need to invest in it even when it is not economical because some day it will be. And that day it will pay off. But until then, low prices for oil and corn will make investments in more expensive alternatives hard to support, both on the political agenda and the private industry agenda. My two or three hundred bucks in algae research is really going to hurt my portfolio.

China Sneezes and We Have a Seizure

For those who have not read me before or often, there are a couple of topics I write about a lot that fascinate me. One is the concept of "decoupling," i.e. that international economies are not linked. In other words, the U.S. going down has little impact on Europe or (sub)emerging economies. I never believed the decoupling theory, and those that did have been extremely quiet lately. Any hoot, about a year ago, some respected folks were still touting the praises of it. Here is an article from the Economist on decoupling that today is a bit entertaining. I especially like the part about emerging countries learning to spread their wings. I think those wings were quickly clipped.

http://www.economist.com/finance/displaystory.cfm?story_id=10809267

The other thing I write about a lot is China. This is in part because I have an adopted daughter from there and am returning in a few months for a second, which at my age is certifiably crazy, but the process has led me to read more than most would on China. And of late that reading has been financially focused. I have said here several times that the impact of this recession on China is very dramatic and may be much more so than in the U.S. It can and probably will lead to massive social unrest. It will be an epoch in their modern politics that is life changing. I am not about to predict here the worst that can come of it, but this is not a good thing to be considering. Either way you look at it, this is not good. Not good for them, means not good for us - politically, economically, militarily and otherwise.

http://www.nakedcapitalism.com/2009/01/more-bad-news-out-of-china-including.html

And it is not just China; Russia is in increasingly dire straights. It has thrived for some time on rich oil prices. Guess what, the prices are no longer where Russia can make a profit and, moreover, I just read today they are having problems with oil pipelines freezing. This has various problems tied to it. In the short run the businesses there are forced to seek government support, which leads to the Russian government obtaining massive new control over business in the country. If the problems continue in the long run, the government itself will get desperate for money, which, well, is not a good thing at all. Economic unrest leads to political unrest. Nothing on the immediate horizon from what I can tell, but in the next five years the potential for more international military activity is certainly in the cards.

Down Part of this Post

Marks & Spencer says this is the worst and the fastest retail decline.

http://www.calculatedriskblog.com/2009/01/marks-spencer-ceo-sharpest-downturn-in.html

The restaurant index is at a record low:

http://www.restaurant.org/pressroom/pressrelease.cfm?ID=1727

Intel suffering cannot be a good sign:

http://www.calculatedriskblog.com/2009/01/intel-business-deteriorates-rapidly.html

Mall vancancies reached a 10 year high:

http://www.bloomberg.com/apps/news?pid=20601087&sid=azgge9HHWzZE

and so forth and so on.

Sorry not so cheery tonight - or usually - but I hope to get there eventually. And we will get there - just not yet.

Disclosures: None other than a few hundred bucks in an algae company.