September 18, 2012 Comments

The market seems fairly quiet as it settles back after the FED’s latest action waits for the next bit of news.

Fedex announced lower expectations. That truly is disappointing because delivery of packages would tend to go up if the economy is improving as hoped.

Microsoft just increased its dividend by 15%. It recently had a 2.6% yield So now it looks like about 3.0% if the share price does not react. The stock was unchanged after hours and so maybe the market is unimpressed.

I notice in the news last week about some GIANT hog farm going bankrupt near Winnipeg. Apparently the second time bankrupt. They blame it on high feed prices.

This hog farming issue was in the news a few years ago in 2007 and part of what I learned was that a huge portion (two thirds at that time!!) of Canada’s hog production gets exported to the U.S. That made no sense to me then or now since I doubt we can produce cheaper than Americans, not with a dollar at parity.

In 2007 some hog industry person wrote to the newspaper asking for support for government loans for hog farmers. I wrote them to say I was sorry but I voted no on the loan. I said that I very much sympathized but that:

I am sorry to say it sounds very clearly like your industry in Canada needs to shrink dramatically. Individual producers will likely want to sell the land or convert to grain production immediately.

Some things in economics are predictable and the continued hardship of hog farming in Canada was predictable due in good measure to the high(er) dollar. (Whether our dollar is high or not is debatable, but it is certainly higher than it was for some decades prior to about 2007.) Loans to hog farmers can’t change the poor economics of their business.

I am basically against all subsidies at all times.