My put positions love the sound of this news: General Electric’s quarterly net off 6%; outlook cut.
LONDON (MarketWatch) — General Electric Co. pulled an unpleasant surprise on investors Friday, reporting a 6% drop in first-quarter net profit — largely over trouble in its financial-services businesses — and revising lower its 2008 outlook.
General Electric said net income dropped to $4.3 billion, or 43 cents a share, from profit generated during the first quarter of 2007, while revenue rose 8% to $42.24 billion.
Though GE’s financial-services businesses may be the main culprit, I’m going to go out on a limb and say that the economy is slowing down, people are spending less, and the price of basic materials and commodities are growing. Look out below.
Ernst & Young has released a report that addresses the cyclical nature of commodities, the abilities of analysts to forecast commodities prices, and what these two factors mean for the future of this sector.
Ernst & Young says metals analysts’ prediction of metal prices “have consistently and significantly lagged behind the actual spot market,” and that mining and metals equities have been undervalued. They also say, “It is our view that current metal prices are actually a return to sustainable price levels following an extended period of artificially depressed prices, rather than the conventional wisdom that the industry is near the top of a cycle.”
It will be interesting to see how this plays out if a recession takes place in the U.S. Will a recession in the U.S. affect the growth of BRIC countries and thereby the demand of raw materials?
Hat tip to Sufiy for the link.
Via the New York Times:
Snus (rhymes with loose) is a moist ground tobacco that a user tucks between the cheek and the gum. Unlike chewing tobacco and moist smokeless tobacco — commonly known as dip — snus requires no spitting. Thanks partly to its popularity here, Sweden has the lowest smoking rates in Europe. It also has fewer incidences than its neighbors of smoking-related diseases, including lung and oral cancer.
I’ve never smoked a cigarette in my life and I’ve never put a dip in my mouth. I’ve only smoked the occasional cigar. But snus to me sounds like the best alternative to more disgusting and nasty habits for some people. The best thing about snus to me is that it doesn’t affect other people around you while you get your fix. Continue reading ‘Snus’
