WIll Russia benefit from sanctions?

Interesting article on Russian agricultural in yesterday's FT. Russia exports energy and imports food and manufactured products. It's exports have not been affected by sanctions, therefore. In response to western sanctions, Russia has banned the import of many foodstuffs.

Russia has 0.8 hectares of arable land/capita, about the same as Argentina and Ukraine but still imports 40% of its food. With bans on imports from Europe and a weaker ruble, Russian agriculture may grow. Since the collapse of the Soviet Union, land under cultivation dropped from 90 mn hectares to 73 mn. The poor logistics infrastructure is a barrier. Nonetheless, poultry production is up 60% since 2008 and pork 36%. Will Russia become self-sufficient in and then an exporter of food? Russia already generates excess cash flow; this would increase greatly without food imports.

IBM: "Skim milk masquerades as cream."

I liberated these graphs from Dan Oliver of Myrmikan Capital.

IBM has clearly benefitted from Quantitative Easing by replacing expensive equity with cheap debt.

Over the past five years, IBM's stock has nearly double and its EPS have increased by 50%. But inside the numbers, it doesn't look very healthy. What happens when interest rates rise?

Are credit conditions returning to "normal?"

Auto loans by credit score:

Proof that Americans are more smart than those other dopes

from the New York Times

In the early 1980s "the A&W restaurant chain released a new hamburger to rival the McDonald’s Quarter Pounder. With a third-pound of beef, the A&W burger had more meat than the Quarter Pounder; in taste tests, customers preferred A&W’s burger. And it was less expensive. A lavish A&W television and radio marketing campaign cited these benefits. Yet instead of leaping at the great value, customers snubbed it.

"Only when the company held customer focus groups did it become clear why. The Third Pounder presented the American public with a test in fractions. And we failed. Misunderstanding the value of one-third, customers believed they were being overcharged. Why, they asked the researchers, should they pay the same amount for a third of a pound of meat as they did for a quarter-pound of meat at McDonald’s. The “4” in “¼,” larger than the “3” in “⅓,” led them astray."

Is the US the most literate nation on earth?

According to CNBC, the USPS delivers 43% of all mail delivered in the world.

It's a drag

Greece's public sector wage bill has fallen from €24 billion in 2009 to €16 billion in 2013, according to today's FT. Now that's what I call austerity!

Good news from the Duchy of Grand Fenwich

The IMF calculates that Luxembourg receives one tenth of the world's foreign direct investment, through "letter box corporations." The fees on this flow make it the richest country in Europe. Now the former pm is now to become the president of the European Commission. One comment of a tax specialist: "This isn't a poacher turned gamekeeper, it looks more like the poacher in charge of the gamekeepers."