Our postal vote form arrived yesterday. Just in time too; we’ve given up on politics. Makeup scandals are hitting the front page!
Makeup scandals aside, one day Tony Abbott is reducing corporate tax from 30% to 28.5%. The next he’s increasing it again to pay for more parental leave. But only on companies earning more than $5 million. In other words, some companies will be paying for the parental leave of other companies’ employees! If you want to run your larger competitor into the ground, just hire a bunch of pregnant women.
There’s also speculation a coalition government might not provide imputation credits for the parental leave tax increase. That would leave dividend collectors with an even bigger part of the bill. Perhaps the next issue of The Money for Life Letter should be on starting up a children’s day-care centre in your laundry during retirement. All those babies and all that parental leave cash have to go somewhere.
Back in the world of finance, another day, another bizarre media headline. We just can’t help pointing out how disjointed the facts are from what you read. Besides, it’s useful to know in what ways people are being misled.
Today’s headline is about HSBC’s August PMI figure for China, which was released yesterday afternoon. The figure signals below average growth of the Chinese manufacturing sector below 50 and above average growth above.
With that in mind, check out this headline from the Business Day website: ‘Chinese Manufacturing Surges’. So what constitutes a ‘surge’?
Fair enough, we should take any improvement if we can have it. Even if it’s only 0.1 above average. Every tonne of iron ore shipped to China counts.
But don’t go buying up BHP shares just yet. Sound Money. Sound Investments. editor Greg Canavan warned of a short term improvement in the Chinese economy months ago. (If you can call 50.1 an improvement.) He’s still bearish as ever though. Hardly a week goes by without some link hitting our inbox documenting the ridiculous behaviour of the Chinese economy. The last one was a replica Paris built in the city of Hangzhou, with an Eiffel Tower and Sacre Coeur included.
Speaking of the French, newspaper Le Figaro is reporting boots on the ground in Syria. Now, given the tensions in the Arab world, what is the worst possible combination of boots there could be on Syrian ground? Le Figaro, (Google Translated) has the details:
‘According to our information, the regime’s opponents, supervised by Jordanian, Israeli and American commandos moving towards Damascus since mid-August. This attack could explain the possible use of the Syrian president to chemical weapons.
‘According to information obtained by Le Figaro , the first trained in guerrilla warfare by the Americans in Jordan Syrian troops reportedly entered into action since mid-August in southern Syria, in the region of Deraa. A first group of 300 men, probably supported by Israeli and Jordanian commandos, as well as men of the CIA, had crossed the border on August.’
American and Israeli soldiers in Syria? And the CIA too? What could possibly go wrong?
In other Middle-East news, it looks like Egypt’s Muslim Brotherhood has fallen for the old ‘investment opportunity in Kenya’ scam. With the noteworthy addition that the guy managing the investment is none other than President Obama’s half brother!
The vice president of the Supreme Constitutional Court of Egypt, Tehani al-Gebali, made a public service announcement about the matter: ‘I want to inform the American people that their president’s brother Obama is one of the architects of the major investments of the Muslim Brotherhood.’
But we’re slipping back into politics again. The Americans have got bigger problems on their hands. The technology focused stock exchange NASDAQ experienced a glitch within trading hours and was shut down temporarily. Without stocks trading, the Federal Reserve’s wealth effect disappears. And yet the economy didn’t crash. Hmm.
Even Adolf Hitler weighed in on the trading halt if you can believe YouTube. He also criticized Goldman Sachs for their inability to execute options trades properly, with their own recent glitch likely to cost the firm tens of millions. ‘How many screw ups can there be?’ Adolf asks in the video. ‘Damn computers.’
It’s comforting to know that even the high and mighty are subject to computer glitches. Our PC’s graphics card gave up the ghost yesterday.
Computer glitches aren’t the only source of economic concern. If you prefer a politically correct version of what’s going on in the stock market rather than Adolf’s analysis, here is Clarke and Dawe’s truly brilliant explanation of what Ben Bernanke does and the dilemma he’s facing.
for The Daily Reckoning Australia
From the Archives…
Foreigners Turning on the US
16-08-2013 – Greg Canavan
Silver, The Devil’s Metal
15-08-2013 – Greg Canavan
Detroit, Demographics and Detonation
14-08-2013 – Vern Gowdie
Why Gold Has an Interesting Tale to Tell
13-08-2013 – Bill Bonner
China’s Economy… Stabilising, Bottoming, Rebounding
12-08-2013 – Greg Canavan