Until recently the powerhouse of both Germany and Europe, the manufacturing sector has suffered a difficult year with falling orders, lower output and high prices. Now the July production figures have been released and at a worse than expected fall of 0.8% they have done nothing to cheer the sector.
UK Government Wind Auction
It looks as if someone has got their sums wrong: in the past, the auction mechanism has worked fine whereby energy companies bid for 15 year contracts to operate wind turbines and supply energy at a cost to the UK National Grid. However the electricity price that they will receive under the new auction is capped at a level that makes the wind turbines uneconomic to build given the cost of steel and operate given the revenues on the supply of electricity. Result: the auction is likely to flop. A prime example of being out of touch with market movements. As some wag observed of the pricing in the FX market which is notorious for its continuous price movements: they are not door numbers.
A surprise cut of 75bps instead of the expected 25bps by the Polish Central Bank yesterday sent the Zloty sharply lower. Although the reason given by the National Bank of Poland of inflation falling faster than expected might be credible, the absolute level of 10.1% somewhat undermined that excuse. Look no further than there being parliamentary elections on October 15 rather than economic logic for the cut.
IAA Motor Show in Munich
This week there have been a number of very small cars on display which resemble the Bubble Car of the 1960’s. First off the chocks was the Italian Isetta, followed by the Swiss Microlino and the Italian-Chinese Yoyo from XEV. All of these cars are aimed at the European city market due to the small streets and lack of parking. In case you are wondering, the cheapest Microlino is a touch below EUR 18,000.
Play That Funky Music
This day in 1976, the band Wild Cherry enjoyed a smash Number 1 with this number that has been getting party people to their feet both at the time and ever since:
Hey, do it now
Hey, once I was a boogie singer Playin’ in a rock-and-roll band I never had no problems Burnin’ down the one-night stands
And everything around me Got to start to feelin’ so low And I decided quickly Yes, I did To disco down and check out the show
Yeah they were dancin’ and singin’ And movin’ to the groovin’ And just when it hit me Somebody turned around and shouted
“Play that funky music, white boy Play that funky music right Play that funky music, white boy Lay down that boogie And play that funky music ’til you die.”
‘Til you die?
I tried to understand this I thought that they were out of their minds How could I be so foolish To not see I was the one behind
So still I kept on fighting Well, losing every step by the way … we can do I said, I must go back there I got to go back And check to see if things still the same
Discussion and Analysis by Humphrey Percy, Chairman and Founder
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