MISH'S
Global Economic
Trend Analysis

Recent Posts

Wednesday, October 22, 2014 11:52 AM


Saxo Bank CIO Jakobsen Predicts Another "Shock Drop" in Markets; Addicted to Cheap Money


Inquiring minds are tuned into the Saxo Bank's 4th Trading Debate on Volatility and Performance.

Another "Shock Drop" in Markets

Saxo Bank CIO Steen Jakobsen says Another 'Shock Drop' is Coming and it's Coming Soon

Steen takes the view that central bank policy is creating a 'fantasy land' for investors and he points out that the recent 'day dive' in markets was a closer reflection of reality.

Steen outlines his suggestions for trading ahead of another dip in mid November with targets for the S&P 500 around 1810 and the Dax at 8000 - 7800.
China Replicates West's Mistakes Says Trading Panel

Martin O'Rourke, Managing Editor of Saxo's TradingFloor.Com says China 'Replicates' West's Mistakes
"China's lesson from the Asia crisis of the 1990s was never to be beholden to the West for debt," Director at Fathom Consulting Danny Gabay said. "Our concern is China will mismanage what increasingly looks like a hard landing."

"China has effectively managed to replicate the mistakes of the West since the global financial crisis," said Gabay. "The Chinese will ultimately be defaulted upon."

Addicted to Cheap Money

Societe Generale macro strategist Kit Juckes also warned of some tough times ahead. "We're getting deeper into a mess. We're addicted to cheap money and the addiction is getting stronger."
Martin Wolf Bearish on Markets and China

In another Trading Debate panel Martin Wolf Says He's Bearish on Markets.
Martin Wolf, chief economics commentator at the Financial Times and one of the main speakers at Saxo Bank's #TradingDebates event in London today. "The world is never out of the woods and people will always get lost in them," he said.

"The Chinese growth model is collapsing and they know it," says Wolf. "China will disappoint on the downside and we will see the negative impact of that on commodities," he added.

As to how this will affect trading and traders the world over, Wolf is equally blunt: "I would expect more turbulence," he said.

"All the problems that existed before the crisis are still with us, with the addition of the problems created by the crisis," he warned.
Major Bear Market Coming 

My view is that 1810 on the S&P would be only the beginning of the bear market that is to come. 1500 or even 1200 on the S&P would not shock me.

Once sentiment reverses for good (and it will), I highly doubt that even more cheap money will help the markets. But I offer no timeframe.

In contrast, Steen made a call with a timeframe and a short-term one at that.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

11:17 AM


US Airdrops Load of Weapons Into Hands of ISIS


In yet another embarrassing moment for the Obama administration, Isis Claims it has US Airdrop of Weapons.

A US airdrop of arms to besieged Kurds in Kobani appears to have missed its target and ended up in the hands of Islamic State (Isis) militants.

Video footage released by Isis shows what appears to be one of its fighters for in desert scrubland with a stack of boxes attached to a parachute. The boxes are opened to show an array of weapons, some rusty, some new. A canister is broken out to reveal a hand grenade.

The Pentagon said it was investigating the claim but admitted that one of its airdrops had gone missing.

The Pentagon spokesman, Rear Admiral John Kirby, told reporters that analysts at Centcom headquarters in Tampa, Florida, were examining the video. “We’re still taking a look at it and assessing the validity of it,” he said. “So I honestly don’t know if that was one of the one dropped.”

“I do want to add, though, that we are very confident that the vast majority of the bundles did end up in the right hands. In fact, we’re only aware of one bundle that did not.”

The airdrops were carried out by three C-130 planes. The video shows a man in camouflage clothes and balaclava looking through the boxes of munitions. He says they were dropped by US forces and had been intended for the Kurds. He described them as the spoils of war.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Tuesday, October 21, 2014 8:34 PM


McDonald's Vows Fresh Thinking After Net Income Declines 30%; Mish Offers Some Advice


A 30% net income decline for McDonald's is quite startling to most. I wonder why such a decline took so long.

In response to that pathetic performance, McDonald’s Vows Fresh Thinking.

McDonald’s Corp. outlined plans for what it called fundamental changes to its business as it reported one of its worst quarterly profit declines in years, driven by problems in nearly every major part of its business.

The 30% decline in net income for the period ended Sept. 30 was the latest in a string of disappointing results for the world’s largest restaurant chain. It is struggling with weak sales in Asia, Europe and, most important, its home market in the U.S.

In the U.S., an increasingly complicated menu has slowed service and McDonald’s once reliable base of younger customers have defected to fast-casual chains boasting customized ordering and fresh ingredients, including Chipotle Mexican Grill Inc., and specialty-burger places such as Five Guys.

McDonald’s has focused so far on efforts including increased staffing at busy times, and has shaken up its management ranks, including replacing the head of its U.S. business for the second time in less than two years. But the changes have yet to boost sales or profit.

The 4.1% decline in McDonald’s September U.S. same-store sales marked the worst monthly U.S. same-store sales performance since February 2003.

In response, McDonald’s Chief Executive Don Thompson on Tuesday said it would simplify its menu starting in January, in part to remove low-selling products, and plans to give the company’s 21 domestic regions more autonomy in rolling out products that are locally relevant.

By the third quarter of next year, McDonald’s also plans to fully roll out new technology in some markets to make it easier for customers to order and pay digitally and to give people the ability to customize their orders, part of what the company terms the “McDonald’s Experience of the Future” initiative.

“The key to our success will be our ability to deliver a more relevant McDonald’s experience for all of our customers,” Mr. Thompson said. “Customers want to personalize their meals with locally relevant ingredients. They also want to enjoy eating in a contemporary, inviting atmosphere. And they want choices in how they order, choices in what they order and how they’re served.”
Advice for McDonald’s

  1. Serve better food
  2. Let customers have it the way they want it
  3. Let customers have it when they want it

McDonald’s is nearly hopeless. On many occasions while traveling, I have chosen to not eat at all rather than eat at McDonald's. It happened just this past weekend.

Don't want McDonald's "special sauce" (I fail to understand why anyone does), and you have to wait an extra 5 minutes (at least) to get it your way.

In contrast, Wendy's has some nice salads and a very good chicken sandwich.

The one and only thing I like at McDonald’s is their breakfast sandwiches. Breakfast sandwiches may not be healthy, but at least they are very tasty. I like the bacon, egg, and cheese biscuit.

If McDonald’s would offer breakfast 24 hours a day I would eat there more often. Instead, if you walk in one minute past breakfast time you cannot get breakfast. That has happened to me on many occasions.

I say "F* McDonald’s" unless I am certain I can get there before their arbitrary breakfast cutoff time which seem to vary by location and day of the week.

Lunch and dinner at McDonald’s? I'd rather not eat at all!

My advice for McDonald’s is simple: Forget about "atmosphere", expensive renovations, and the ridiculous notion of the “McDonald’s Experience”.

Other than "fast" (in theory but not necessarily in practice for those who custom order) there is no “McDonald’s Experience” except for the occasional "McPlayground" that demographically speaking appeals to fewer and fewer (especially with  rising costs of feeding a family).

I have a simple suggestion: serve better food, the way customers want it, when they want it. And lower prices would certainly help. 

Correction

I originally stated a decline in revenues of 30%. I meant to say net income.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Last 10 Posts


Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats