Author: Vivian Lewis
Covestor model: International Yield
Disclosures: none
The dreaded double dip is here. But I want to make sure people don’t think I’m a committed leftie, blaming it on the Tea Party. I’m a certified member of an endangered species, a liberal Republican. Here is a quotation from a Republican to prove that I am more interested in wit than in ideology. Writes P.J. O’Rourke of the Weekly Standard:
The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn’t work, and then they get elected and prove it.
As for American exceptionalism, a Tea Party tenet, here is another O’Rourke comment:
We know nothing about where political systems come from. We don’t even know where they don’t come from. And considering the shiftless, slave-trading, bed-hopping, debt-ducking (and that’s just Thomas Jefferson) nature of America’s founding fathers, who also included rum-soaked bunkum merchants and Indian-massacring land swindlers (and they all oppressed women and weren’t vegans) we should be careful about saying that certain societies or nationalities or religious persuasions aren’t ‘ready for democracy.’
There is a sign of hope for America with the launch of a new ADR. We may not be able to export cars, but we can export our ideas. The new ADR is for Dominos Pizza UK & Ireland which had traded on the pink sheets earlier (PINK: DPUKY). The price of Domino’s pizza is much higher in Britain than in the USA and they offer special variants like Reggae pizza for West Indians and Chicken Tikka Marsala pizza for curry lovers. There are also vegetarian variants. Many Britons top their pizza with canned corn and canned pineapple, and other icky stuff.
The local franchise holders are responsible for customer service, which varies, apparently. As in the USA, Domino’s helps minority and female business owners get financing. Until I have taste-tested the stuff, I will not spring for the share.
Now for serious stuff. I do not think the Washington shenanigans are the only cause of market doldrums. I think we are also seeing the impact of a renewed economic slowdown (AKA a double dip) on corporate profits in sectors like utilities, banking and financial services, retailing, food, pharmaceuticals, energy. The exception seems to be telcos. Company profits started the year out well in a recovery mode but things have gone ugly since then: the Euro crisis, the US malaise in home sales and job creation, the Japanese tsunami.
I am of course preaching from my own book. There is a clear pattern I can see with a lot of disappointing results from our companies. I am particularly worried about the supposedly invincible moats some of them were picked for, or the high yields we have grown accustomed to.
Sources:
P.J. O’Rourke quotes from Wikiquote, http://en.wikiquote.org/wiki/P._J._O’Rourke and Intelligence Squared, http://intelligence2.tumblr.com/post/1599107730/pj-orourke-dont-encourage-the-bastards
