Death Star Economics



No recession keeps me from buying an iPhone

Apple blew everyone away with skyrocketing earnings from selling 37 million iPhones and 15.4 million iPads in Q4 of 2011, making its stocks jump 7.3%. It is set to reemerge as the largest public US company, replacing Exxon Mobile at the top. An interesting piece of data on what that means for technology stocks from WSJ MarketBeat:

In fact, in the past 14 years, each time Apple has gapped up 5% or more on the morning after earnings to a new 52-week high — and that has happened 11 times in the past 14 years — the Nasdaq 100 has almost always been lower one month later, by an average decline of more than 3%, according to Jason Goepfert of Sundial Capital Research. For what it’s worth, your mileage may vary, etc.

Greek debt swap talks died a quiet and dissatisfied death. No deal was reached and the default-elephant remains in the room. Latest topic of debate is the coupon rate (essentially the interest paid to the bondholder). [Private] Investors want 4% if they agree to a 50% haircut of the nominal value of debt outstanding, but Greece is unwilling to go higher than 3.5%. All this clamor is delaying a deal once more. Considering the six weeks worth of paperwork that would be necessary, a compromise has to be agreed on in the first week of February to avoid a disorderly default. Felix Salmon explains the argument why Greece should go back and think about what it has done wrong make another offerread article

Meanwhile, the UK’s public debt burden has surpassed the £1tn mark (£1,003,900,000,000) and since this morning we know that its GDP shrank by 0.2% in Q4 of 2011. Economists had expected a decline of 0.1%. It was going to be bad, but now it’s worse; quantitative easing, here we come. read article (or view graphic)

Today, the world economic forum is kicking off in Davos. Very much on top of the list of things to talk about is the income divide and related equality issues. Dealbook walks us through the bullet pointsread article

So long.


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