prev

LVS: SAYING THE RIGHT THINGS IN MACAU

According to the Macau Times, Bill Weidner, LVS COO, stated that his company has so far not made a single dollar in Macau. He also played up LVS’s capital commitment to Macau. This is not a widely discussed topic in the States but all may not be well between Beijing and the US casino companies. WYNN, LVS, and MGM minting hundreds of millions of dollars in cash flow probably does not sit well with China’s power brokers. As I wrote about in my 8/25/08 post, “MACAU: QUID PRO QUO ON VISA RESTRICTIONS”, the flotation of the 6 month visa idea certainly roiled the markets but may have been an effort to extract more aid to Sichuan. Following Macau’s announcement of significant reconstruction aid, I wouldn’t be surprised to see: a) the casino companies kick in some additional cash to the effort, and b) the six month visa idea fade away. Status quo on the visa issue is a big near-term positive for Macau.

Not sure about the trend, but the trade continues higher on the US Macau stocks.

Shorting Japan, Again...

I re-shorted the bounce in the Japanese ETF this morning (EWJ), for three reasons:

1. Japanese inflation (see chart) came in higher again (month over month) at +2.4% y/y vs. +1.9% in June. As the Yen weakens, imported inflation spikes - the chart is plain ugly. This is a 10 year high, as you can see. American wins = Japanese losses.

2. Overnight, Prime Minister Fokuda, was pleading for another 2 Trillion Yen Government bailout program for the economy. This is more of the same - a leader-less socialist government that doesn’t get it.

3. As GDP goes negative, increased government spending is going to intensify the problems associated with Japan's balance sheet. They already hold an untenable position of 787 Trillion in Yen denominated debt. That's 147% of GDP that is setup to stagflate!

It's global this time, indeed.
KM

Chinese Retail Growth Revisited

I noted on 8/18 that China’s superb 23% retail sales growth needed to be put into context with the sharp decline we’re seeing in other non-Japan Asian nations. The chart below looks at it a different way… It takes retail sales 2 yr trend and subtracts 2-yr CPI growth to show what I think is a more representative view of real underlying normalized spending patterns. Yes, there is still an Olympic-sized bump over the past two months, but over a broader 10-year context, it’s not tough to argue that China is slowing.
Insert Chart Description Here. 2 Sentences Maximum

get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

Europe's Headache: Importing Inflation, Deflating Confidence

Below we have put together a data set that overlays European economic confidence with inflation. In a brave new interconnected world of markets where the US Dollar is strengthening, the Europeans are losing. As the Euro falls from it's all time highs, they will be importing inflation to their socialist tapestry.
KM
  • European Confidence Can Get A Lot Worse...
Chart by Andrew Barber, Director

The Ultimate Sporting Goods Visual

If you care about anything having to do with the Sporting Goods business, and are as concerned about overcapacity as I am, then you have to see this visual.

Historically, the sporting goods retailers have respected geographic boundaries. Now they're starting to step on each other's toes. Next comes an outright dogfight.
Click to enlarge.

Spoiling an Olympic Tradition!

Kellogg Co. managed to spoil a tradition for General Mills -- the unveiling of Olympians to grace the Wheaties box. By the time Big G made its big announcement today, Kellogg had already one-upped the news by revealing that it signed the biggest of them all, Michael Phelps - AdAge.com
Don't Mess With My Wheaties!

the macro show

what smart investors watch to win

Hosted by Hedgeye CEO Keith McCullough at 9:00am ET, this special online broadcast offers smart investors and traders of all stripes the sharpest insights and clearest market analysis available on Wall Street.

next