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Generational Dynamics Web Log for 14-Apr-2010
14-Apr-10 News -- Alarm over Hungary's sharp right turn

Web Log - April, 2010

14-Apr-10 News -- Alarm over Hungary's sharp right turn

Did Alcoa make money or lose money?

Please read the following article that I've also posted today: "Financial Crisis Inquiry hearings provide 'smoking gun' evidence of widespread criminal fraud."

German media express alarm over Hungary's sharp right turn

We recently reported that the far right has made significant gains in Hungary's parliamentary elections, capitalizing on anti-Semitism and on sentiment against the Roma (Gypsy) ethnic minority. The move was triggered by economic problems since the global financial crisis began.

A survey of German media by Der Spiegel finds a great deal of anger and alarm in editorial positions.

They note that "The Jobbik party got some 17 percent after campaigning on a deeply xenophobic platform. Commentators said Jobbik makes the Freedom Party of the late Jörg Haider, the Austrian populist, and Dutch right-winger Geert Wilders seem moderate."

The left-wing paper Die Tageszeitung says, "Twenty years after the end of the collectivist dictatorship, Hungary has turned into a grubby hive of nationalism in which far-right blood and soil ideologies are flourishing, pseudo-democrats are hailing the glorious history of the Magyars and militant racists are fighting against an allegedly 'overflowing' number of foreigners and ethnic minorities living in the country by parading around the streets with machetes and Molotov cocktails."

The conservative Die Welt says, "Hungary has been unable to escape the clutches of a difficult history that has been laced with defeat and has therefore fuelled national resentments. It's worrying that more than two-thirds of Hungarians have opted for parties that either toy with right-wing populism or are openly reactionary. The crisis, which is not just economic, has brought the ghosts of the past back onto the political stage."

The Germans have a deep sense of fear and shame over their 20th century history. They've stood apart from the rest of Europe on the Greece bailout because they remember the 1920s hyperinflation and the 1930s bank failures. And they're reacting strongly to Hungary's election because the fear a return of their own Nazi past.

From the point of view of Generational Dynamics, their fears are quite justified. As Europe goes deeper into a generational Crisis era, it is heading for more bank failures, and more political movements of the far left and far right.

Greece's bond sale continues high interest rate situation

Financial pundits and journalists were beaming of Monday's bond sale by Greece. A typical headline was this from WSJ: "Demand Is Strong for Greek Debt."

The headline refers to the sale of €1.56 billion ($2.12 billion) of 6- and 12-month Greek Treasury bills, which exceeded the expected amount. But if you read the story, you learn that the interest rate 4.55% and 4.85%, respectively. That's lower than the 7%+ that they have to pay for 10 year bonds, but it's very high for 6/12-month Treasury bills.

By comparison, the US and Germany sell 6/12-month bills at less than 1% interest.

The whole point of last weekend's show was to convince investors that Greece will not default, so that they'd be willing to lend money to Greece at low interest rates. That strategy appears to have failed.

Did Alcoa make money or lose money?

Around 4:30 pm ET on Monday, I noticed that WSJ online had a headline, later confirmed by a WSJ story, that said that Alcoa had announced its first quarter earnings, and had lost $201 million, or 20 cents per share. Shortly afterwards, I noticed that the CNBC story said that Alcoa had made a profit of 10 cents a share.

So, which is it?

Well, if you dig into the CNBC story, it seems that CNBC decided to report a figure "excluding one-time items." This kind of fallacious reporting has become typical for CNBC.

The Wall Street Journal started becoming more honest last June, when it began to distinguish between "operating earnings" and "as-reported earnings" in price/earnings computations. (See "Wall Street Journal sharply revises its fantasy price/earnings computations.")

Additional Links

Japan is requesting an explanation from China about why a large fleet of Chinese war ships are conducting maritime activities near Japanese waters. Yomiuri

Details are emerging that a weekend airstrike by Pakistan's military that supposedly killed dozens of Taliban-linked terrorists actually killed over 70 civilians. Washington Post

It seems that French President Nicolas Sarkozy, Italian Prime Minister Silvio Berlusconi, and ECB President Jean-Claude Trichet all ganged up on German Chancellor Angela Merkel last weekend, and forced her to accept the Greek bailout deal that they wanted. NRC Handelsblad

There are fears that the health care bill is going to exacerbate the doctor shortage. WSJ

I love this. The health care bill was supposed to provide all Americans with as good health insurance as Congress has. That may actually turn out to be true, though not in the way that was claimed. Due to a glitch in the way the law was written, people in Congress are no longer eligible for the federal employee health program, and must obtain coverage in their respective states. Now they'll have to try to amend the law to give themselves back their super-generous health coverage. NY Times

Millions of people visit Cuba each year to get free health care, but now Cuba is planning to require tourists to purchase health insurance when they get there. Toronto Star

China has always been one of Russia's largest customers for arms sales, but Chinese purchases have dropped off precipitously in recent years, because the Russians are only willing to sell Soviet-era weapons, and because China is developing its own weapons technology. The Diplomat

As Pakistan's economic troubles worsen, some Wall Street banks are closing brokerage operations in Karachi, worsening Pakistan's problems even further. WSJ

Islamist terror groups in Somalia have ordered Somali radio stations to stop playing music, and the station managers are complying, for fear of being killed. "We are using other sounds such as gunfire, the noise of the vehicles and birds to link up our programmes and news," says one radio station programmer. BBC

Lurid gossip about French President Nicolas Sarkozy and his supermodel wife Carla Bruni having outside affairs has brought in the police, and led to a farce that might be straight out of Molière. Telegraph

(Comments: For reader comments, questions and discussion, see the 14-Apr-10 News -- Alarm over Hungary's sharp right turn thread of the Generational Dynamics forum. Comments may be posted anonymously.) (14-Apr-2010) Permanent Link
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Generational Dynamics Web Log for 14-Apr-2010 14-Apr-10 News -- Alarm over Hungary's sharp right turn

German media express alarm over Hungary's sharp right turn

Greece's bond sale continues high interest rate situation

Did Alcoa make money or lose money?

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Generational Dynamics Web Log for 14-Apr-2010
14-Apr-10 News -- Alarm over Hungary's sharp right turn