Work Culture and Making Money - my point of view

Well, here's a sequel to my earlier posting.

I was pointing out how the Europeans, despite their lesser number of hours spent at work...make big money.

Contrast this with the U.S., and alarmingly in some developing countries like India, China & Brazil. People seem to have lost their minds in pursuit of money. Will it really benefit them ???

Look at the stock market indices and DECIDE FOR YOURSELVES...folks.

The blistering pace (bull market) seems to be "short runs" ....we need some serious introspection.

We are all getting unhealthy..in body & spirit. My neighbourhood friend who started from scratch and has made a load of money is totally disullusioned has now given in to Lord Krishna.....
......but currently I AM FIGHTING A WAR & NEED LORD KRISHNA'S ADVICE as per Bhagavad Gita... ;-)
Another friend is totally puzzled somewhere in the U.S. of A. with a startup company that earned her a couple of million $ ..... but she wants to give it all and start afresh at the Aurobindo Ashram.

Didn't Lord Buddha say Himself...that you should all follow a MIDDLE WAY ?

Anyway, I guess the only relatively healthy ones left are the Europeans and a few Latin countries.

Believe me...this senseless pursuit of money gives you an adrenaline rush......and then you want more & more & more ....... you take loans & more loans .....where do we end up ? The money will all go down the drain....

THIS APPLIES TO COUNTRIES TOO ....... THEY ARE SO INTO DEBT THAT STOCK MARKETS HAVE A SERIOUS RISK THEY WILL COLLAPSE.

European Union - NEXT ECONOMIC SUPERPOWER BLOC?

That's what seems to be happening......

Here's the quantitative analysis:

• Check out the $ versus Euro graph. It's again this phenomenon of "mass psychology". The Euro was gaining slowly but steadily. Now that the world's greatest investor Warren Buffet(world's richest man) has openly expressed that he has no more faith in the U.S. $, at least in the next 10 years, people have realized the truth (?). The Oracle of Omaha rarely speaks...but he spoke and shook the world. No wonder Bill Gates(#2) is his good buddy.
• European Union (EU) taking into account the combined GDP of Germany, France, Italy, Netherlands, Sweden Norway, Denmark, Switzerland, Spain, etc etc already has a GDP 2 X (twice) that of the U.S.
• Add to that a growing unity amongst all the countries. It's only unity that makes a combination strong. History has proved that time and time again. How did the U.S. rise to be such a superpower ?
• EU countries have a balanced defense expenditure. Hence, it puts lesser strain on their economy.
• Cross-border trade is probably the single most important factor.

Lastly, I find this American culture of working 10 hours a day a bit "destructive" in the long run. All work and no play makes Jack a dull boy. Or else how would you explain that the Italians and French have afternoon siestas (yes, sleeping in the afternoon) and especially the French having such long holidays making so much money ?

I hope Google, with its creative culture changes this fixed American mindset.....and passes on some buck to me ;-) My financial analyst Debajyoti Dutta-Roy sez he's got much faith in the EU economy.

Oil touches $ 135 a barrel

Note 2007 June oil was at $65 / barrel.

So the price has now doubled !

Funny thing is I visited 3 banks during the last month.......

At first I was presented with many investment options.....

I listened...

Then I started lecturing on why it's not a good time to buy:

It's happening globally :

Rising Inflation
Food prices spiralling. Food riots !
Oil prices are leaving everybody confused.
Global nervousness.
Sub prime lending crisis hitting big banks also.
Huge deficits in some countries.
War, natural catastrophies, global warming is hitting economies indirectly


After some time, my investment advisors themselves start asking me for advice:

I told quite a few of them to buy gold. Or silver.

I really can't think of any within the next 4 months.

OIl hits record $115/barrel, $ slips and euro stable

It seems oil prices are rising up and up.

Investor confidence in $ is at an all-time low. Currency traders are all flocking to the Euro.

Check out this excerpt (Pablo Gorondi, Associated Press Writer):

"
Oil prices hit all-time highs above $115 a barrel Thursday with reports that oil and gasoline stocks in the United States were lower than expected and as the dollar hit record lows.

Light, sweet crude for May delivery rose as high as $115.52 a barrel in electronic trading on the New York Mercantile Exchange. It eased back to $115.23 a barrel by midday in Europe, up 30 cents.

On Wednesday, the contract settled at $114.93 a barrel.

In London, Brent crude futures were up 43 cents to $113.09 a barrel

The euro hit a new all-time high of $1.5982 on Thursday, its second record in as many days against the sagging greenback, and stood at $1.5966 by midday in Europe."

All global traders are going in favoour of the Euro and oil.

Why I think the European economy is thriving is:

Excellent understanding amongst all European Union countries.

Excellent network - transportation, communications. Almost all highways are like autobahns.

Total Free Trade Zones.

You can still buy those OIL STOCKS

Oil prices, once they breached even the $110 / barrel barrier......set people thinking that it's going to level off.

But, it will climb steadily for quite some time given the tension in the Straits of Hormuz and Middle East.

Well, 40% of world's oil passes through the Starits of Hormuz !

Check out the following excerpt

“Iran's Oil Minister Kazem Vaziri-Hamaneh, said in Kuala Lumpur on Monday there is no shortage of crude in the market and OPEC has no plans to increase supplies, in the latest rebuff from the producers group to consumer nation calls for more oil.

"Now there is no shortage of crude oil in the market," he said when asked if OPEC should release more supplies to the market to temper high oil prices. "The reason for the price hike is not because of crude supply problems."

Worries over Iran's nuclear dispute with the West have been a driving factor for oil prices this year. But Vaziri-Hamaneh said the country's crude output is expected to rise to 5.3 million barrels per day (bpd) by 2014, up from 4.3 million bpd currently.”

Our take : The consumer nations’ trends, especially developing countries like China & India….are very rapid rate of increase for oil. OPEC countries’ set a quota for oil production….once that quota is set….generally they do not reverse it.

This is because the quota determines manufacturing plans, production & management plans.

But demand is going to be higher.

Also, there PROBABLY WILL BE A TENSION WITH IRAN….this nervousness will prompt some developed countries’ to get more oil to funnel it into their reserves.

This might be the right time to but oil stocks…..they are going to go up due to increased demand.

FREE MARKET ECONOMY - the only answer ?

Professor Milton Friedman, IMHO, was one of the visionaries of economy.

Check out this article by Holcomb Noble in New York Times.com

" Conservative and liberal colleagues alike viewed Mr. Friedman, a Nobel prize laureate, as one of the 20th century’s leading economic scholars, on a par with giants like John Maynard Keynes and Paul Samuelson.

Flying the flag of economic conservatism, Mr. Friedman led the postwar challenge to the hallowed theories of Lord Keynes, the British economist who maintained that governments had
a duty to help capitalistic economies through periods of recession and to prevent boom times from exploding into high inflation.

In Professor Friedman’s view, government had the opposite obligation: to keep its hands off the economy, to let the free market do its work. He was a spiritual heir to Adam Smith, the 18th-century founder of the science of economics and proponent of laissez-faire: that government governs best which governs least.

The only economic lever that Mr. Friedman would allow government to use was the one that controlled the supply of money — a monetarist view that had gone out of favor when he embraced it in the 1950s. He went on to record a signal achievement, predicting the unprecedented combination of rising unemployment and rising inflation that came to be called stagflation. His work earned him the Nobel Memorial Prize in Economic Science in 1976."

My personal opinion : Friedman's dream / theory is COMING TRUE. Of course, there will be recessions and booms.

Isn't LIFE ITSELF FULL OF UPS AND DOWNS ?

But markets can flourish ONLY IN TRUE DEMOCRACY....

EMERGING MARKETS ..... reason behind their high returns

This basically started from the 1990 middle. Capital started shifting from developed countries to Emerging Markets .

This in turn FED THE GROWTH OF THEIR INDUSTRIES, THEIR INFRASTRUCTURE.

The main reason behind all this was the MASSIVE PRICE CUT IN TELECOMMUNICATIONS.

Think 'bout it.

It ain't no coincidence that the Emerging Markets started giving good returns after:

• Drop in price of phone calls
• Mushrooming of call centers and back office operations.
• Interexchange of IDEAS.
• Cut in Internet prices globally.
• Global access to all the markets throughout the world.

What did I tell ya? .....OIL TRADING AT $112 / BARREL !

Current events have thrown the markets in a STATE OF FLUX.

Some people are just TRADING IN HIGH VOLUMES IN OIL, OIL AND ONLY OIL .....making a killing in the process.

It may not last long.

Check this from reuters.com :

"LONDON (Reuters) - Oil rose to a record near $112 on Monday as a surprise weekend cut in the Federal Reserve discount rate and the sale of stricken U.S. investment bank Bear Stearns ( sent the dollar to all-time lows.

U.S. crude for April hit a fresh high of $111.80 a barrel. It was trading $1.15 up at $111.36 a barrel by 5:15 a.m. EDT.

May London Brent crude was $1.28 higher at $107.48.

"The recent oil prices have been swayed by the currency moves, including this latest rally to a record," said Tony Nunan, risk management executive at Tokyo-based Mitsubishi. "The dollar weakness is the factor at the moment."

The dollar plunged across the board on Monday as the spiraling U.S. financial crisis led to JPMorgan Chase acquiring Bear Stearns, stirring fears that more financial firms may become casualties."

High volume traders have bought into oil at large quantities at $60 / barrel and selling them now....making a profit of around 90 - 100 % in 8 months !

Now, since I'm just a poor analyst blogger and a consumer , I'm not amused.

But you may be.....'cuz you have

DOUBLED YOUR MONEY IN 8 MONTHS !

Major players RUSHING INTO oil market

As there is tremendous volatility in the stock markets, major players seem to be sensing it right.

Seems like one of the safest options for investment is the oil market. It seems to yield a steady profit.

Check out excerpt from Gillian Wong, Associated Press Writer :

"Oil prices surpassed $103 a barrel for the first time Friday as persistent weakness in the U.S. dollar and the prospect of lower interest rates attracted fresh money to the oil market.

Investors chose to see the comments as confirmation of their beliefs that the Fed will continue cutting interest rates to try to shore up the economy.

Lower U.S. interest rates tends to weaken the dollar, and crude futures offer a hedge against a falling dollar."

My analysis : If the u.S. $ weakens, the "horde mentality" will kick in, and investors will rush for oil, oil and more oil stocks.

More excerpts:

"

The Japanese government on Friday urged the oil cartel OPEC to increase output to help ease record prices.

"The high crude prices are gradually damaging the global economy. This will damage the economies of oil-producing countries," Minister of Economy, Trade and Industry Akira Amari said. "

My analysis :

There is global concern. The second largest economy is already in not too good a shape. There needs to be a serious global consortium to discuss the implications of skyrocketing oil prices.

Both from an investor's point of view.
As well as from a consumer's point of view.

Day Traders HIJACKING the Markets ??

There are wild swings in the markets. Move over, long-term investors.
Looks like the day-traders are starting to hijack the markets big time. This was to be expected, as more and more stocks can be

SOLD AT THE CLICK OF A MOUSE at the RIGHT TIME.

As GLOBALIZATION SETS IN, and access is available to more and more markets worldwide.


Following is by Jeff Kohler (Fun With Stock Index Futures):

"As market volatility increases, opportunities emerge for short-term investors who want to take advantage of large, daily price swings. Day traders flourish in volatile markets, but many long-term investors cringe at the thought of how their portfolios will react to these conditions. While shortening your time frame can help maximize profits and minimize risk in these conditions, it is also imperative to find the most suitable product for your investment needs.

Investors can use many vehicles to trade daily price movements. The most popular instruments for day trading include stock, option and futures contracts.

When trading stocks, investors don't worry about time decay, wide spreads or inflated prices due to market conditions. However, depending on the underlying stock, this is an expensive way to capitalize on price swings. Another disadvantage is the lack of leverage. Using margin, the leverage obtained (4:1) is a lot less than that offered by option or futures contracts.

Many investors choose options as their primary trading vehicle, because leverage is an important characteristic of day trading. However, during times of high market volatility, option premiums are increasingly expensive and less attractive to purchase. If you purchase overpriced premiums to leverage sharp market movements, changes in volatility may still create a losing position, even when you are right about market direction. "

SCARED ? WELL, THESE ARE UNCERTAIN TIMES......AND EVEN THE LONG-TERM INVESTOR SHOULD SPEND AT LEAST A COUPLE OF HOURS STUDYING THE MARKET TRENDS.