Daily Archives: April 4, 2011

UEFA Champions League Preview: Real Madrid – Tottenham Hotspurs

 

Spurs are gearing up for their most important game since 50 years. While confronted with a lot of injury problems, it looks like that Gareth Bale will be ready to play. Harry Redknapp has serious staffing issues in defense, however, the players available are not second choice. With Bale back in the team, Spurs are in full strength.

Real had their injury worries as well, Cristiano Ronaldo was questionable, but according to Mourinho will be clear to play in Tuesday’s clash at Bernabeu. Real has to digest the home defeat against Gijon. While they can’t afford losses at any time, this might have been the wrong time to make such an experience. Tottenham is showing up with an opportunity to show off and seeing that Real can lose at home is fuel for them. It just adds a psychological effect to the game.

There has been some speculation going on that Real was looking at the possibility Gareth Bale. Jose Mourinho explained there is no current interest on the Welch. As an explanation he delivered the excuse that Real already has Marcelo and Ronaldo on the left side and under those circumstances Bale is too expensive. He is right, Real has other “construction areas” in their team and an investment in these areas would make more sense. However, I have a hard time to believe that the “special one” is not taking a look.

Looking at the performances of both teams in this season, Spurs don’t have to hide. While Real is a big name in the world of soccer, it turned out “they boil their eggs with water as well”. No miracles there. Especially in defense are some weak spots. Teams that were able to put some pressure on that defense, made good experiences. Especially the full back positions with Sergio Ramos and Marcelo have their problems. The holding midfielders Khedira and Xabi Alonso are also not always on top of their defensive game. Spurs would be well advised to ask a few questions and seek a goal.

Spurs didn’t convince the soccer world in their last league game as well, but that can be seen as a normal slip before a great game. On the Real side this is different. Every misstep will cause the crowd to get nervous and fall into a state of disbelieve and overexcited criticism. On the flip side, when Real find is finding their game, they can chase every team around the field. Ronaldo and Oezil are able to create lots of turmoil in the opponents defense.

This match up gives lots of opportunity to speculate and forecasts of all kind, depending of the hat one is wearing. I will try a prediction as well: While I like Real, I do believe that Spurs will get a very good result. It might not be enough for a win, but a tie or a one goal loss is possible. That will turn Whitehard Lane into a mad house for the second leg.

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2nd Quarter 2011 Outlook

Please read Disclaimer!

2nd Quarter 2011 Outlook  Shortened, adjusted for Main Street to understand. No misleading and confusing numbers and rhetoric, just a plain description of important indicators that influence growth.

While the quarter started with good news regarding the job market, several other major uncertain issues will determine the outcome of the second quarter 2011. Jobs, as reported on 04/01/2011 look promising, but it has to be seen if the trend has feet and continues.
My opinion: Unemployment will further decrease

The situation in the Middle East is another unknown for the markets. Change is imminent and at the moment it is unclear how the political situation in a number of countries is developing. This, in addition to other uncertainties, will keep prices for oil and gold highand possibly put unrest on the stock market.
My opinion: This can be explosive for a while. For peace and the world economy, it will be important that fundamentalist and religious groups have no major influence in the region. Therefore, current and later US and European involvement is necessary. It will keep oil prices stable and hopefully will turn investors away from gold and into more economical investments.

For the short term, this earnings season will be of major importance, particularly the situation in the banking sector. This is important because many other sectors are depending on the bank’s “well being”. Positive reports from the banks could spike technology and over the next 2 quarters, the very important small business sector. It will also determine the bank’s appetite for mortgage lending. For the short term, the banks can take advantage of the delay of the “interchange regulation”, important for debit and credit card swiping fees. For the future, it is hopefully possible to find a solution that doesn’t pull the fee revenue completely from the banks and leaves something in the pockets of small businesses. The consumer, originally supposed to take advantage of the new regulation with price cuts, one way or the other, will pay for the change in the new legislation. Intended price cuts will not occur and loss of fees by the banks will be passed on in checking fees and other actions taken by the banks, which some of them can already be seen. Disappearing rewards programs have already been reported.
My opinion: The industry will report mildly good results and will make forecasts depend on  regulatory changes. As a result, changes will be mild and serve the purpose of business.

Ireland, Greece, Portugal and Spain remain weak and are still seen as the “undertakers” of Europe. However, in my opinion, while all of them still appear to be a bottomless pit, enough funds have been allocated in the past to save the four from going under. While calling the situation under control would be to much, calling it getting better soon, is in the picture. There is, however, another situation that can derail the European Union. Last weeks election  results in the German States of “Baden-Wuerttemberg” and “Rheinland-Pfalz” displayed concerning results for Europe. With the SPD and the Green Party winning those elections, in the short term, the German economy might get a hit and show some not so desired results. That is important since the Germans are more or less carrying Europe. At least they have over the recent past. It has to be seen if that political trend continues in Germany.
My opinion: Both issues will solve itself. For “business political reasons” the issue with the broke European countries will be used for a while, but eventually will turn into positive news. The political situation in Germany will not disturb the positive German economy in the long run.

Housing in the US is still weak and will stay weak. From my view, there are no major changes expected and therefore, this should not have any influence on the economy’s developments for the rest of the year. There might be a seasonal increase in sales, however, the situation for Main Street’s ability to buy has not changed significantly. The job market shows signs of recovering, but this has not been for a considerable time and therefore “overlapping” positive results will need more time.
My opinion: Housing will not significantly improve before the second quarter of 2012, given the job market will improve.

As reported, the job market showed signs of improvements. Household incomes, however, have not increased. This is concerning. The consumer will lose important buying power due to increasing inflation. Changed behavior in spending might also cut spending. Should the Fed interfere with rate hikes, this might even become worse. Growth, currently, can only happen without rate hikes. At this time, for this quarter, I do not believe the Fed will increase rates.
My opinion: The economy will further grow. Inflation will rise as well, but rate increases will not occur before 3rd or 4th quarter of this year.