L'Information est d'Or

"This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks." - Thomas Friedman

Interesting article on the Tehran Times about why the old economy is now trendier than the "new economy". Extract: “The United States has become one of the lowest-cost producers of steel in the world,” said Michelle Applebaum, a top-ranked steel analyst with her own Chicago research firm. Who’s the high-cost producer? “China.”

S&P 500 sector ranking: 1. IT 16% 2. Financials 16% 3. Energy TBD On the back of the credit crisis, IT sector has overtaken financials as the leadingS&P sector, a place they have not occupied since the .com boom (in 2000, IT sector reached 32%). Which sectors will be the winners and loosers in the future? What are the trading opportunities?More analysis to come.

Let's have a look at the market saying that you should sell in may and walk away. Is there anything statistically true about it? Well, you will be surprised by what I found. If you split the returns of the S&P500 into two semester, one from May to October and another one from November to April, you find out that most of the gains happened in the first part of the year. Here is the strategy: - Invest 1st May $X of S&P500 - Sell 31st October whatever your investment is worth: $Y of S&P 500 - Then reinvest 1st May of next year $Y. ... This strategy would have returned 13 times your initial investment over 45 years. when the same strategy between November and April would have returned only 1.5 times your initial investment over 45 years. It is less than the total progression of the S&P but considering that you would thus reduce your exposure and risk considerably (by half), it is very rewarding.

Is the world turning upside down? As all the major economies are slowing down, Japan and Germany, the usual underperformers, have recorded record first quarter growth: 0.8% for Japan and 1.5% for Germany. In annual terms, it is 3.2% and 6%! It shows how de- correlated they are from the rest of the world. The reason is probably that their labour market is not flexible. But is it about to change? Germany has done some labour reforms and Japan is going to fight against China to keep its position of second largest economy in the World, which might be a catalyst for them. http://m.ft.com/srt/d/d2c/0.0?feed-article-id=fe141cfa-2301-11dd-93a9-000077b07658&channel-id=FT.com%20-%20UK%20Homepage Cyrille

http://www.wired.com/science/discoveries/news/2008/05/dayintech_0513

Microsoft has so far failed to catch up Google in online business. Microsoft first tried to build its own platform (Who remembers MSN or Windows Live?) then to purchase Yahoo (Yahoo CEO was too greedy). So what is MSFT's plan C? I think it should be online applications. But by the time Microsoft realises it, other competitors will already have installed strong position, or not?

Recession is often defined as two consecutive quarters of GDP contraction. Well it's not true in the US. The official definition, provided by The National Bureau of Economic Research, is: "A recession is a significant decline in economic activity spread across the economy, lasting more than a few months." And this is not exactly the same. The NBER goes on to say: “ Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, ‘a significant decline in economic activity.' Second, we use a broader array of indicators than just real GDP. One reason for this is that the GDP data are subject to considerable revision. Third, we use monthly indicators to arrive at a monthly chronology.” The main problem...