Death Star Economics



The spirits that I called

Tesco announced profits will grow less than the expected 10% in 2012/2013. It is the first profit warning the company has issued in its entire existence. Much of the weak performance of recent months is due to little disposable income, i.e. lower consumer spending, but also Tesco’s investment in lowering prices in September. For the UK market, there was a 0.9% decline for Q3 compared to the same quarter in previous years. International sales are still up more than 5%, but also have to deal with rising fuel costs. In [dramatic] response, the share price fell by 16%, which amounts to a value cut of £4.8bn. I knew it was a mistake to go to M&S this morning… read article

The European Central Bank announced just now that they will hold their interest rate steady at 1%, which everybody kind of expected. The press conference following the meeting is starting at 1.30pm GMT. But as Zero Hedge rightly notes:

Now the question is whether the ECB will announce some unconventional easing methods. We doubt it: it already has its hands full explaing why its balance sheet has grown by €600 billion in 6 monthsread article

Adam Davidson of Planet Money explains how Wall Street gives you what you wanthow it pays for it and why you shouldn’t hate it.

And Der Spiegel gives a short explanation to the pros and cons, and reasoning behind the Tobin tax (article in English). However, it might be worth remembering that of the two reasons the article lists for implementing the transaction tax (slowing down financial markets and raising money to fund the eurocrisis) are presented the wrong way around. Also, the likely negative consequences of making everything more expensive for everyone (yes, also for you) are downplayed. But at least the article doesn’t wave the €55bn (amount that could be raised in one year) in your face that everybody already seems to see in their pockets. read article

More valuable insight from Dealbreaker: an article on why Berlin is the testicle of the West (no, I didn’t know that expression either), showing that Germans are very superficial when it comes to their politicians… read article

So long.


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