Economic Countdown To The Olympics 5: Ten Olympic Trends


With the 302 events across 32 sports of the Olympics about to start (with early round soccer starting tomorrow), we conclude our five part (Part 1, Part 2, Part 3, and Part 4) series of posts bringing markets, economics, and sports together by looking at 10 exhibits that Goldman sees as describing how various aspects of the Olympics have evolved from the first modern Games in 1896 (where Greece won 46 medals compared to USA’s 20) all the way to London 2012. From the monetary value of the distributed gold medals to the globalization of medal wins, the trends are analogous to the world’s change but the full report attached provides some incredible interviews with many of the greatest Olympians ever with Michael Johnson reminding us that: “People are generally very fed up with political processes and the bickering that comes with it. You have some politicians with one particular set of ideas as to how to fix the problems and one with another set of ideas, and this continues to create a divide between people. The Olympic Games is the epitome of non-politicised activity. It’s about coming together… and having the opportunity to put differences aside and get behind their country and the athletes who are representing them.”

Trend 1: The Olympic Radar is Now Becoming Truly Global, Reaching EMs in Recent Times

 

Trend 2: Share of Women Athletes Has Been Rising and Will Likely Continue to Rise

 

Trend 3: Olympic Games Cover a Broad Set of Nations with Different Income Levels

 

Trend 4: Emerging Markets Now Win Half of All Olympic Medals, Reflecting their Growing Influence

 

Trend 5: Emerging Markets Have Become Leaders or Stronger Competitors in Many Sports

 

Trend 6: Split of Medals around the Globe is Moving Towards Emerging Economic Groups

 

Trend 7: Set of Olympic Sports Has Expanded and Changed Composition Through Time

 

Trend 8: Number of Medal Events Has Increased Markedly in Both the Olympics and the Paralympics

 

Trend 9: Monetary Value of Distributed Gold Medals Has Declined as Composition Effects Offset More Competitions

 

Trend 10: ‘Olympic Economies’, Constructed by Linking Host Countries, Grow Faster on Average

 

and full presentation is below:

GS the Olympics

 

Source: Goldman Sachs

Tony Blair: Don’t Hang Bankers


Mainstream economist Nouriel Roubini said recently:

Nobody has gone to jail since the financial crisis. The banks, they do things that are illegal and at best they slap on them a fine.  If some people end up in jail, maybe that will teach a lesson to somebody.  Or somebody hanging in the streets.

Former British prime minister Tony Blair – currently employed as a senior adviser to JP Morgan – said today:

We must not start thinking that society will be better off “if we hang 20 bankers at the end of the street” ….

Where’s all of this coming from?

The American government’s top official in charge of the bank bailouts writes:

Americans should lose faith in their government. They should deplore the captured politicians and regulators who distributed tax dollars to the banks without insisting that they be accountable. The American people should be revolted by a financial system that rewards failure and protects those who drove it to the point of collapse and will undoubtedly do so again.

 

Only with this appropriate and justified rage can we hope for the type of reform that will one day break our system free from the corrupting grasp of the megabanks.

Economics professor Randall Wray writes today:

Thieves … took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.

 

Financiers are forcing schools, parks, pools, fire departments, senior citizen centers, and libraries to shut down. They are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in firesales at prices rigged by twenty-something traders at the biggest and most corrupt institutions the world has ever known.

 

***

 

I see two scenarios playing out. In the first, we allow Wall Street to carry on its merry way, as the foreclosure crisis continues and Wall Street steals all homes, packaging them into bundles to be sold for pennies on the dollar to hedge funds. All wealth will be redistributed to the top 1% who will become modern day feudal lords with the other 99% living at their pleasure on huge feudal estates.

 

***

 

That is the default scenario—the outcome that will emerge in the absence of action.

 

In the second, the 99% occupy, shut down, and obliterate Wall Street.

Economics professor Michael Hudson agrees … saying that the banks are trying to make us all serfs.

Top economists say that fraud caused the Great Depression and the current financial crisis, and that the economy will never recover until fraud is prosecuted.

Leading experts say that fraud is not only widespread, it is actually the business model adopted by the giant banks. See this, this, this, this, this and this.

Indeed, the big banks – with the help of the government  – have basically become criminal enterprises.   And yet the Bush and Obama administrations have made it official policy  not to prosecute fraud.

Economics professor Steve Keen says:

“This is the biggest transfer of wealth in history”, as the giant banks have handed their toxic debts from fraudulent activities to the countries and their people.

Nobel economist Joseph Stiglitz said in 2009 that Geithner’s toxic asset plan “amounts to robbery of the American people”.

That’s why people are so mad at bankers.

I noted 7 years ago: 

 I am NOT calling for the overthrow of the government. In fact, I am calling for the reinstatement of our government. I am calling for an end to lawless dictatorship and a return to the rule of law. Rather than trying to subvert the constitution, I am calling for its enforcement.

 

***

 

The best way to avoid all types of revolution would be for the government to start following the rule of law. I passionately hope it will do so.

The fact that even Tony Blair and Nouriel Roubini are talking about hanging bankers shows that this is the last chance for the justice system – the only thing which stands between criminals on Wall Street and pitchforks – to work.

The Li(e)bor Rigging Scandal Infographic For Dummies


Via Healthcare Administration,

Since (at least) 2005, Barclays has been manipulating LIBOR, and their traders have been allegedly pocketing $40MM a day betting on interest rate derivatives. If the LIBOR, one of the most fundamental metrics of our banking system can be rigged, can you imagine what other elements of our financial system are a fraud? This morning’s comments from European regulators appears to confirm that this story has a long way to go as ECB’s Almunia states: “The evidence we have collected is quite telling so I am pretty sure this investigation will not be closed without results.”

Apple Falls


Major misses everywhere, and this for the second quarter in a row – from the Q3 earnings report:

  • APPLE 3Q REV. $35.02B, EST. $37.25B
  • APPLE 3Q EPS $9.32, EXP. $10.37
  • APPLE 3Q NET PROFIT $8.8B
  • APPLE SEES 4Q REV. ABOUT $34B, EST. $38.01B
  • AAPLE 3Q GROSS MARGIN 42.8%, EST. 43.8%
  • APPLE SOLD 17.0 MILLION IPADS DURING QTR, UNIT EST. 15.4M
  • APPLE 3Q IPOD UNITS SOLD 6.8MLN , DOWN 10%
  • APPLE SOLD 4.0 MILLION MACS DURING QTR, UNIT EST. 4.3M
  • APPLE SOLD 6.8 MILLION IPODS IN QTR, UNIT EST. 6.6M

Third quarter in a row of total revenue declines:

More importantly, in Q3 revenues declined across every geography sequentially:

 

Is the dream over – 4 years of AAPL dividends wiped out in seconds:

However don’t cry for Apple: it has $117.2 billion in cash and equvalents: a $7 billion increase in the quarter.

As a reminder, everyone is in this: Nubmer of funds owning AAPL stock

Full breakdown of the 50 most widely held HF stocks per Goldman Sachs:

Netflix Plunges After Cutting Q3 Outlook, Sees Q4 Loss


The endless saga of the rental and streaming company, that once had a vendetta with Whitney Tilson until the latter finally threw in the towel after he first shorted then went long Netflix only to blow up on both occasions, continues, this time by plunging 15% after hours following a cut in guidance for Q3 and announcing it will likely once again have a loss in Q4.

From the letter to what little investors are left:

  • We expect content payments to cause free cash flow to trail net income in Q3
  • In Q3, we expect to be profitable, while with the launch of a fourth international market in Q4, we will move to a consolidated loss

Some other observations from the attached spreadsheet:

  • Gross Profit margin dropped to a multi-year low of 27.6% compared to 28.3% last quarter and 37.9% a year earlier.
  • In Q2 only 556K paying domestic subscribers were added, compared to 1816K in Q1, and 1858K in Q2 2011
  • Cash at the end of the quarter rose to $402MM from $395MM last quarter. 

Finally, Reed Hastings’ always amusing summary:

Our core thesis is that we can build a large defensible global business as an Internet network for TV shows and movies. Our technology and our content are both huge advantages in getting us to scale; with scale comes further ability to invest. We know our shareholders are depending on us to succeed at our global expansion, market by market, and eventually return to substantial global profits. Our growing US streaming contribution profit stream shows what is possible. We can’t wait to serve a global audience with an amazing Internet video experience.

End result:

Full letter for those who care (link):

 

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