After the collapse comes inflation: Ray Barros
Watching the US government invest US$20 bln in Citigroup shares and guarantee a further US$306 bln in loans may save the day for now. But the scenario feels rather eerie (continues below video)...
...when you consider that this money, along with the US$700 bln already pledged to help the banks, plus another US$25 bln if the car companies get their desired hand-out, will need to be soaked up again.
Meaning: this trillion dollars in money which the US government has shaken out of its sleeve will, at some point, find its way back into the pockets of consumers.
And when it does, argues Ray Barros, inflation will be the next big thing to worry about.
In other words, we'll drown tomorrow in the waters which we are using today to dowse the flames.
Not that the US government has much choice. It's a little like standing in a wobbly aluminium dingy: The boat has rocked too far the left, but overcompensating will rock it too far on the right. It'll take a while before it steadies. If we don't all fall out, first.
I recorded this interview with Ray Barros a few weeks ago, but his words still hold true today. Perhaps more so.
I welcome your comments.
PS: Ray Barros will be in town December 6 at Singapore Expo Convention & Exhibition Center.
...when you consider that this money, along with the US$700 bln already pledged to help the banks, plus another US$25 bln if the car companies get their desired hand-out, will need to be soaked up again.
Meaning: this trillion dollars in money which the US government has shaken out of its sleeve will, at some point, find its way back into the pockets of consumers.
And when it does, argues Ray Barros, inflation will be the next big thing to worry about.
In other words, we'll drown tomorrow in the waters which we are using today to dowse the flames.
Not that the US government has much choice. It's a little like standing in a wobbly aluminium dingy: The boat has rocked too far the left, but overcompensating will rock it too far on the right. It'll take a while before it steadies. If we don't all fall out, first.
I recorded this interview with Ray Barros a few weeks ago, but his words still hold true today. Perhaps more so.
I welcome your comments.
PS: Ray Barros will be in town December 6 at Singapore Expo Convention & Exhibition Center.
Labels: Citigroup, Ray Barros, Singapore Expo Convention Exhibition Center
FJ Benjamin - yet another weak quarter
FJ Benjamin says the weakening macroeconomic outlook means it will have a challenging financial year. Its profitability will be affected by fluctuations in foreign exchange. In the meantime, it will try to control costs and improve its cash flow.
The retailer’s Q1 2009 revenue rose 3% to S$84 mln. The retailer said the marginal increase was due to the global economic woes and weakening consumer sentiment.
Net profit dropped 73% to S$1.1 mln. This was mainly due to unrealised non-cash foreign exchange losses of S$1.4 mln, compared with a gain of S$800,000 in Q1 2008.
It generated S$14.3 mln in cash from operations compared to the S$1.2 mln.
Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of S$0.27, compared to its last traded price of S$0.19.
~ Jin San’s take ~
FJ Benjamin has reported yet another weak quarter. At least it didn’t suffer a net loss this quarter like it did in Q4 2008. Things don’t look positive for the retailer as the weaker consuming spending in the region will negatively affect its earnings for this year. This is more than a bit worrying, as it has been in negative free cash flow position for the past two FY (even though it's positive for its latest quarter.
Like the rest of the market, FJ Benjamin's stock has taken a beating and its P/E now stands at 7.71 and its P/B is at 0.82.
As always, please see your licensed financial advisor before making any investment decisions.
ArchivesThe retailer’s Q1 2009 revenue rose 3% to S$84 mln. The retailer said the marginal increase was due to the global economic woes and weakening consumer sentiment.
Net profit dropped 73% to S$1.1 mln. This was mainly due to unrealised non-cash foreign exchange losses of S$1.4 mln, compared with a gain of S$800,000 in Q1 2008.
It generated S$14.3 mln in cash from operations compared to the S$1.2 mln.
Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of S$0.27, compared to its last traded price of S$0.19.
~ Jin San’s take ~
FJ Benjamin has reported yet another weak quarter. At least it didn’t suffer a net loss this quarter like it did in Q4 2008. Things don’t look positive for the retailer as the weaker consuming spending in the region will negatively affect its earnings for this year. This is more than a bit worrying, as it has been in negative free cash flow position for the past two FY (even though it's positive for its latest quarter.
Like the rest of the market, FJ Benjamin's stock has taken a beating and its P/E now stands at 7.71 and its P/B is at 0.82.
As always, please see your licensed financial advisor before making any investment decisions.
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