Friday, May 7, 2010
THE STATE OF THE WORLD ON 7MAY2010
The current expected results for the British general elections yesterday: Conservatives (officially, Conservative and Unionist Party, also known as Tories) 306, Labour 258 and Liberal Democrats 57. As mentioned yesterday, they now have a hung Parliament in the House of Commons. As 326 votes are needed for a majority, even if the Labour and Liberal Democrats (and combined, this is like the Democratic Party in the U.S.) consolidated, that would only add up to 315, and the LD leader, Nick Clegg, has been somewhat deprecatory in his post election remarks about Labour. Lot of intrigue and surprises yet to come.
The media indicated that the BP/Transocean oil spill in the Gulf of Mexico had a week ago reached 11 million gallons, equaling the Exxon Valdez disaster off Alaska. Today, the current consensus is that the leak is amounting to 210,000 gallons/day, so the total release is now down to around 3.3 million gallons. Of course, this is not close to the 1991 400-500 million gallon Kuwait and 1989 138 million gallon Mexican spills, and they both, interestingly enough, kind of just disappeared over time without causing any significant economic damage. It took almost ten months to cap this offshore well and Mexico did not bother to compensate the U.S. for cleanup costs. That 200,000 pound giant house-size box was lowered to cap the current leak, reached bottom (5000 feet), and...we'll see.
Finally, explosive activity for Eyjafjallajokull has increased over the past couple of days, and the ash is now up to 30,000 feet, forcing airport closings in parts of Ireland. Why this particular Icelandic volcano has affected the world economy is unusual, for there are today 39 erupting around the world, and the annual average is between 50-70 (USA Today, snapshots, 6May2010), including Kilauea on the Big Island, which has now essentially been continuously spewing lava for more than 27 years.
What happened to the stock market yesterday? The answer will come, but as of this writing, the latest speculation has to do with programmed sales in Chicago, whatever that means. Imagine that you owned 25,000 shares of Accenture (largest consulting firm in the world, originally inspired by General Electric and created by Arthur Anderson in Bermuda, but shifted to Ireland...yes, there are reasons for all this) at $40/share. Your million dollars would have evaporated to about $250 in a matter of minutes. ACN did recover to $42.17, but no doubt not without a few heart attacks, strokes and suicides.
Today, the Dow Jones Industrials settled an additional 140, ending the week at 10,380, with world markets all also down. The Japan Nikkei is now at 10,365. Why the European problem with Greece is so influencing American investors is a mystery, for our economic indicators look okay. If anything, you would think that our increasing superiority would jack up our stock values. I guess the market is, indeed, global. Gold went up another $3/toz to $1208 and crude oil is down to $75/gallon. The 13% drop for the week was the largest since the end of 2008.
Had lunch today at the Presidio Social Club with Bill Rayner, and his wife Sue, who also graduated from Stanford, and to the right, my freshman roomy, Jim Seger. Bill was our next door neighbor in the Arroyo dorm, and that was 52 years ago. Jim and I were attendants at their wedding in our senior year. We mostly reviewed the status of our classmates (turns out that not one from the class of '62 is famous), touched on every chapter of my SIMPLE SOLUTIONS for Humanity, and focused on wines. We had a Clos Du Bois rose.
Jim then drove me around Golden Gate Park, where I did not quite enter, but took a photo, of the M.H. de Young Museum below.
Then, as I was walking past Loews, and the timing was perfect, I went to see the IMAX version of Iron Man 2. You can click on the review, but I found the movie to be less than terrific, for I fell asleep. Yet, I can predict that this flick will be #1 for at least a month, and there will be an IM3.