Wednesday, December 26, 2012

Market Strategy:The Deleveraging Process and the Investor

The politicians in Washington are now facing up to years of deficits and expiring tax breaks,and there will be real consequences for investors.They need to take care of spending first,according to Stephen Wood,PhD,Chief Market Strategist at Russell Investments.Even if everything goes right,you're looking at -1% GDP.If everything goes wrong,there will be -4 GDP.
If no agreement is reached on the budget,sequestration will come into force.Sequestration means government spending being take out of the economy.This is what deleveraging looks like.How much government are we willing to pay for?That's going to be less than in previous years.
Investors are going to need to look for a globally diversified,mixed strategy.Look at commodities and emerging markets.
We need to manage expectations of investors.People are being forced up the risk spectrum.They're gonna need more risk to get the returns they're accustomed to.
We've gone from apportioning revenue to apportioning debt.The process isn't that fun to witness,but the end result will be good for our country.
Dr.Wood conducts research on the economy,capital markets,portfolio strategies and investor behaviour.He interfaces with Russell's institutional clients and retail partners to communicate the firm's perspectives on the global market,investment process and portfolio management.He is a frequent guest on business television.

Space Pictures This Week: Green Lantern, Supersonic Star

Space Pictures This Week: Green Lantern, Supersonic Star

Wednesday, December 19, 2012

Business Conditions Report:Two Magnates On Momentum

I think the US economy is the strongest in the world,said Sam Zell,Chairman and CEO of Equity Group Investments.We're likely to see improving scenarios.It's all about confidence.
The government doesn't create jobs.Jobs are created by risk-takers and businessmen.All these small businesses being starved of capital are the ones who create employment.
We monitor all our businesses.Certain ones have more relevance than others.When we see our main customers starting to delay implementation of long range plans,that's an indication of trouble.
Clearly the recovery of the housing market will increase employment.Yet Citi is cutting 11,000 jobs.If you end up with a swap,I'm not sure you're gonna end up with a net plus.
There is a little bit of momentum in the US,adds Sir Martin Sorrell,CEO of WPP Group.It's in retail,but corporates are increasingly concerned and uncertain.
Consumer spending has picked up worldwide.There is a fairly stable,even improving consumer spending regimen.It's retail,and the big branded companies continue to have traction.
Fast-moving consumer goods retailers and manufacturers in the middle got caught.There is a sort of dam of decisions.If there is a resolution of the fiscal cliff,there will be a significant shift in confidence and people will feel confident about 2013.
Chinese consumers have surpassed those in the US as the world's biggest purchasers of luxury goods.

Wednesday, December 12, 2012

Ladies European Tour Concludes in Dubai With a Chinese Win

The Ladies European Tour has ended its season with the Omega Dubai Ladies Masters at Emirates Golf Club in Dubai,UAE.American Lexi Thompson yielded her title to China's Shanshan Feng on Sunday and her final round 21 under par 69.Dewi Claire Schreeful of the Netherlands was second with a 16 under par 69;third place on the leader board was shared by Caroline Masson of Germany and Becky Brewerton of Wales.
Carlota Ciganda of Spain won the Handa Order of Merit for the season with her earnings total of 251,289.95 euros.She was also named Rookie of the Year.
The tournament was played out against the looming backdrop of the ultramodern skyline of the desert city.
Following her win,Swiss watchmaking titan Omega named Feng a brand ambassador,adding her to a list including Greg Norman,Sergio Garcia and Michelle Wie.Fiancial terms were not disclosed.
In a statement,Omega said it is proud that this outstanding competitor,whose smile lights up every course she plays on,has joined its family of golfing brand ambassadors.The brand looks forward to celebrating with Shanshan Feng each time she adds to her already impressive list of victories and achievements on the golf course.
Besides Omega,tournament sponsors included Gulf News,Drydocks World,Maritime World,Mercedes Benz,Emirates NBD and CNN.

Wednesday, December 5, 2012

Greek and Canadian Business Notes

We have some challenges ahead of us,admits Kostis Hadzidakis,Development Minister of Greece.We know that we have to surprise in a positive way.We have to succeed.There is no alternative.
We want to change the business environment.Greece has to become a business-friendly country.We are about to vote on a law providing a single licensing authority.We are cooperating with the OECD as regards competition in the Greek market.
Because of the crisis,Greece had a very negative image over the past years.We believe that we can see some light at the end of the tunnel.Now we are privatising the natural gas company.We know we must focus our effort on this:to deliver.
EU Commission President Manuel Barroso has praised Greece for showing a strong commitment to financial reform.
Air Canada is planning an Asian expansion.It will spend two billion dollars on new aircraft to accomplish this goal.At the same time,Goldman Sachs has raised Research In Motion to a buy rating ahead of the release of some new devices.
Air Canada(TSX:AC/A),Research In Motion(RIMM)

Wednesday, November 28, 2012

European Golf:Rory Takes DP World Trophy and Scepter

Rory McIlroy fought off effects of desert heat on Sunday to win at the DP World Tour Championship in Dubai,UAE.The culmination of the season-long Race To Dubai was held on the Earth Course at the Jumeirah Golf Estates.Northern Ireland's McIlroy posed in his red polo shirt with the huge trophy and scepter he was awarded for topping the tournament field.
McIlroy finished with a final round 23 under par 66,followed by England's Justin Rose in 2nd,and South Africa's Charles Schwartzel and England's Luke Donald  sharing 3rd on the leader board,respectively.
McIlroy's golden season included a money list double,dominating earnings on both the European and PGA Tours,as well as a victory at the PGA Tour Championship in Atlanta.It's a great way to finish a great season,McIlroy said.I feel like I can improve in different areas of the game still.
McIlroy related that he felt ill for a few days.The desert sun got to him,but he took a few things for it and soldiered on,notching five consecutive birdies on the final holes,as witnessed by a substantial crowd of hardy fans.
Besides DP World,sponsors of the tournament included CNN;BMW;and Rolex.Jumeirah Golf Estates is comprised of two neighbourhoods,Fire and Earth,of European style villas in the New Dubai area,just beyond the skyline.The hilly topography surrounding the Estates suggests the Mediterranean.Existing villas are going for approximately 1.8-3.5 million dollars US.

Wednesday, November 21, 2012

Hedge Fund Advisor:Fighting and Grinding

You've got to watch Europe now,said Sarah Quinlan,founder and Chief Investment Officer of QAM.The IMF and EU are fighting.There was a joint national strike in Spain and Portugal.I think it's sort of a grind lower.Eventually the car runs out of gas.
I'm loving my sovereign bonds-obviously from the emerging markets and the US.
If they start a more entrepreneurial economy,they could start to grind out of it.The austerity is the wrong move.They'd better do something today.
Treasury Secretary Tim Geithner should stay through February to keep the market calm till we get through the debt ceiling.It's an overall anemic volume world that we're living in.
We are way overstaffed on Wall Street.Fewer partners were made at Goldman Sachs this year.I think it's a fundamental change.
QAM is a hedge fund advisory firm.Founder Sarah Quinlan is active in the 100 women in hedge funds peer advisory group.

Wednesday, November 14, 2012

Asset Manager:Observations and Opportunities

It will reach a point where Spain needs the bailout package,said Mark Konyn,PhD,CEO of Cathay Conning Asset Management.Italy is not at all out of the woods yet.Overall,the whole process has been delay and delay and delay,to drag things out as long as possible.
With regard to the US fiscal cliff,everyone has some thing to lose in this.I think they will mediate a compromise that allows them to roll the whole thing over for twelve months hence.The cost of going over the cliff would be a massive setback globally,with a 4% GDP loss.
In Europe,Greece is not the main issue;Spain is.Investors are taking more risk in their bond portfolio.There are also opportunities within equities for taking on risk.They will continue into next year.
The catalyst for Chinese stocks is not there.In March,there will be some infrastructure spending in China.There will be some opportunities around that,Dr.Konyn pointed out.
Cathay Conning Asset Management is a provider of innovative asset management solutions to institutions and insurers in the Asia Pacific region,offering a differentiated suite of investment products and services.
Mark Konyn has a doctorate in Risk Analysis from London Metropolitan University and was a fellow at University College London.He is currently a Fellow of the Royal Statistical Society.

Wednesday, November 7, 2012

Advert Chief Shares Outlook-plus ICBC earnings

The UK and Germany bookend Europe,with Italy,Spain and France in distress,according to Sir Martin Sorrell,noted British advertising magnate.We saw a step change downwards in September advertising.There's an overall problem across the world,including some of the fast-growing markets.
Long term indications are starting to show some signs of flipping up.Maybe mid-2013 we will start to see some uptick in the private sector.
We have to get used to this slow recovery in the Western world.It's very uncomfortable for us in the West to come to terms with the growth engines being in the East,Mr.Sorrell admitted.
Industrial and Commercial Bank of China earned the most money in the banking sector last quarter.The bank's 10 billion dollar income was a Q3 record,and the company could set an earnings record on the year as well.The world's biggest bank,ICBC beat the earnings estimate on increased credit demand.Its market capitalisation is about equal to that of JP Morgan Chase,Goldman Sachs and Bank of America put together.
Barclays Capital says China's oil demand will grow 3.6% in 2013.
Sir Martin Sorrell is co-founder and CEO of WPP Group,the world's largest marketing communications company.
Industrial and Commercial Bank of China Ltd(ICBC)

Wednesday, October 31, 2012

Where The Financial Problem Is-and how to deal with it

The problem is,central banks don't have the right tools,according to Mohamed El-Erian,CEO of PIMCO.The best they can do is provide a bridge,but it has to be a bridge to somewhere.
The politicians aren't doing enough.People are refusing to invest because of the uncertainty.The Fed has been the investor's best friend,supporting valuations and markets.
Our baseline is 1.5% growth-plus or minus 0.5%.If politicians don't get their act together,that would push us into recession.If nothing happens,that will unambiguously throw us into recession.
The sooner,the better.Already businesses are pulling back,investing less.
Be very careful.Focus on sovereigns and companies with strong balance sheets and can give back cash to shareholders,Mr.El-Erian counseled.
Mohamed El-Erian is also co-Chief Investment Officer at PIMCO along with founder Bill Gross.The company now offers a wide range of both active and passive exchange-traded funds,as well as mutual funds.

Wednesday, October 24, 2012

Euro Debt Crisis Means Cheap Assets

Spain is gonna be one of the two or three biggest markets for distressed assets,said Russell Platt of Forum Partners Investment Management.It could take 7-10 years in the courts to take control of the assets.There are about 140 billion euros of distressed assets available in Spain.
Germany is the biggest market for distressed assets-about 200 billion euros' worth.It's a chance to buy real estate cheaper.We see commercial properties at 50-60 cents on the dollar in the UK.
In the US,we're buying REITs mostly and mortgage-backed securities.We also like homebuilders.
PIMCO is one of the biggest buyers of distressed European assets.DIC Asset AG is a fund that buys distressed office properties in Germany.
Forum Partners is a global real estate investment management firm.It has 6 billion dollars of assets under management for institutions and family offices.With offices from London to Beijing and Santa Fe,it has invested in 17 countries in Europe and Asia.
DIC Asset AG(DAZ:Xetra),iShares Barclays CMBS Bond Fund(CMBS)

Wednesday, October 17, 2012

Newsletter Founder:Slowly Working It Out-the global economic slowdown

Spain will take a bailout by year end,predicts Paul Krake,founder of the "View from the Peak" newsletter.The world is so dominated by QE and expansion of the balance sheet,that's all that matters.
This is about kicking the can down the road.It's about working through the process.This could take 5+ years.
I've been advising clients a Spanish bailout and a Greek bailout will occur around the same time.Portugal will need more money,but it's incremental compared to Greece.
Asia will continue to be affected by falling exports.Global growth ex-US will be very sluggish next year,Mr.Krake advised.
QE,or quantitative easing,is the buying of assets by central banks to support markets and the economy.
"View from the Peak" is a weekly macro piece on the economic,valuation and policy factors that drive asset classes and regions.They work with asset management firms, sovereign governments and high net worth families.
Paul Krake has a Bachelor's degree in economics from Monash University in South Africa.

Wednesday, October 10, 2012

Chief Market Strategist:What To Look At Now

There really is a sense that something very profound is happening in Spain,said Stephen Wood,PhD,Chief Market Strategist at Russell Investments.There's a sense they're on the edge of something big.It's the fourth largest economy in Europe.We're facing one of the first global stimulus packages in four years.
The UK is just chugging along as it always has.I would have to say the US right now has much stronger fundamentals.They may be better than China right now.Corporations have strong balance sheets.
You need globally diversified,multi-asset portfolios.The Federal Reserve is forcing people up the risk spectrum.I would be looking at emerging markets and corporate debt,Dr.Wood advised.
Stephen Wood conducts research on the economy,capital markets,portfolio strategies and investor behaviour.He interfaces with Russell's institutional clients and retail partners to communicate the firm's perspectives on the global market,investment process and portfolio management.He is also a prominent media spokesman for the company's views.

Wednesday, October 3, 2012

Author and Advisor:A Financial World Tour

I don't see much progress in Europe,but I'm still hoping,said William Rhodes of William Rhodes Global Advisors.The French and the Germans are arguing about bank union.It's always too little,too late.They need a package with a time table they can meet.Only if the markets really move against them will they move.
The growth rates are negative in Spain and Italy.At 2.5-3%,only Germany is not in recession.
It's really an open question whether the Federal Reserve's QE3 will work.All of this bond-buying will have to be unwound.
All of Asia is slowing down.A change in leadership in China is at hand.They've got to convert over more to domestic consumption.There are a lot of doubts floating around.This new leadership is gonna have a lot of challenges ahead of it:a slow US economy;a slow Europe;a China dropping from 11-12% growth to 7%,Mr.Rhodes observed.
William Rhodes is a former Citibank vice president.He is the author of "Banker to the World:Leadership Lessons From the Front Lines of Finance."

Wednesday, September 26, 2012

The Current Economic Environment:A Hoover Institution View

For certain investors,it's quite positive,according to John Taylor,Professor of Economics at Stanford University and Senior Fellow in Economics at the Hoover Institution.The long term thing is really fundamentals in the economy,and I don't see them as being positive.The employment to population ratio is down compared to the beginning of the recovery.It's a bad labor market with people dropping out.
Our fiscal policy is way out of line.You've got to exit it in a gradual way.You can't shock the market.There will be pain.There has to be an exit strategy that's understood,that's explained in advance.
Europe is quite a ways from resolving the debt crisis.They're kicking it down the road.
The Federal Reserve's focus on unemployment has resulted in higher unemployment.I'd like a more predictable,rule-based Fed policy,Dr.Taylor said.
John B. Taylor has a BA in economics from Princeton and a PhD in economics from Stanford.He is the author of "Getting Off Track,"a book on the financial crisis,as well as "First Principles:Five Keys to Restoring America's Prosperity."He served as Undersecretary of the Treasury for International Affairs from 2001-2005 and was on the President's Council of Economic Advisors several times.

Wednesday, September 19, 2012

Private Bank Views 2:Fixed Income Prospects

Asset prices are higher because the Federal Reserve is flooding the market with liquidity,said Michael Brandes,Global Head of Fixed Income Strategy at Citi Private Bank.We're still bullish on fixed income.We look at corporate bonds and mortgage-backed securities,or MBS,where we've seen very good returns.The fact that it's open ended is key.That creates the impact.
We do like dividend-paying stocks.The default risk is low and fundamentals are strong for high yield debt.MBS also offer some spread.
We are very cautious about Europe.There are a lot of concerns about the banking system and other risks on the continent.You want to be cautious about what you buy.
All this liquidity is going to help fundamentals.Fundamentals are still strong and demand is still strong.
Michael Brandes is on the Global Investment Committee at Citi Private Bank.He has a BA from the State University of New York and an MBA from Columbia University Graduate School of Business.

Wednesday, September 12, 2012

Asian Voices 2-plus a Middle East Moment

The focus,perhaps,should be more on the job market in China,said Donna Kwok,Greater China Economist at HSBC Global Research.Domestic consumption and social stability could be hurt by it.
We think the downturn in China is driven by one thing:external demand,given the downturn in Europe and sluggish growth in the US.We continue to see incremental steps to liberalisation in the next few years.Redistribution of workers is more important to domestic demand in China than absolute numbers of workers.
Mark Konyn,CEO of Cathay Canning Asset Management,notes that in Europe,we're starting to see contraction across the continent,and that's worrying.That could get worse.Spain hasn't been able to work its way through the regional problems.
I think there'll be more asset purchasing.Markets are positioning for more stimulus.We're expecting to see more growth in the second half of the year.I would argue it's more cyclical than waiting for stimulus in China.
In the Middle East,shock waves continue to ripple through the region from the deadly rocket attack on the US Consulate in Benghazi,Libya.Senator John McCain,R-Arizona,said I see it as a newly-elected government that is having the growing pains that any government would have.There are weapons everywhere in Libya, and there are jihadists that have come into the country and continue to come on.These are very dangerous people trying to hijack the revolution.
The attack was done by people who were obviously Muslim extremists.We all should be worried about al-Qaida.The best way to help Libya is to help them train their army and with their intelligence capability.I'm confident we can do that.I cannot be more proud of Ambassador Chris Stevens,the senator had emotionally said of his friend,US Ambassador J.Christopher Stevens,who with three colleagues was killed Tuesday in the organised Benghazi assault by perhaps two dozen militants on the eleventh anniversary of 9-11.

Shop Talk:Where To Find Nature Notes

Dear Readers,
I still publish Nature Notes.They are now in my Extra Content blog,accessible from the links list in the right hand column.I have observed that many of you are still reading the old Nature Notes from the time when I used to publish them in this blog.
Andrew Taylor

Wednesday, September 5, 2012

Seeking Alternatives:Hedge Fund Insights

I still am expecting this market to crack,said Uri Landesman,President and Managing General Partner at Platinum Partners Multi-Strategy Hedge Fund.Anything to do with Europe,people are really scared.At some point,the Euro situation will clarify,and their equities are now more cheap than US equities.People probably should buy Euro equities.
It's a terrible risk-reward in the US market,in my opinion.Natural gas is getting clobbered again.It's very,very cheap.The Chinese will step in and try to buy assets.There will be significant Chinese purchases in the emerging markets even in 2012.Given natural gas trading in the 2.60s,that's very cheap for countries like China that are very short on natural gas.
Specific biotech companies are totally exogenous if they have an event coming up.If the US economic data come out significantly better,I would change my view on housing and lending.I think some of the industrial metals are interesting here.
We are still very bullish about China long term.The engine that is China will roar again in coming years,Mr.Landesman predicted.
Platinum Partners are affiliated alternative investment managers located in New York.In addition to hedge funds,they offer advisory services exclusively for qualified investors.Mark Nordlicht is Chief Investment Officer at the firm.

Wednesday, August 29, 2012

Private Bank Views-plus Middle East Moment

This is a quiet period,according to Mark Matthews,Head of Research for Asia at Bank Julius Baer;September will be D-Day.The MSCI World Index is up 10% this year;the US is up 14%,overshadowed by all this volatility.The markets will go down if Federal Reserve Chairman Ben Bernanke doesn't express some kind of positive policy action.It's unclear how the Fed makes decisions.
The US is not doing very badly.China's probably the big problem in the world right now.It's slowing down in a way the leaders are comfortable with.
I like the quality US blue chips;quality high yield bonds;Southeast Asian equities such as those from Thailand and the Philippines.
The Julius Baer Group says it is the leading Swiss private banking group,serving sophisticated private clients,family offices and external asset managers from all over the globe.With its headquarters in Zurich,it has more than 40 offices in over 20 countries.The group was founded in 1890.
Middle East Moment:Any Middle East military action will push oil prices significantly higher,says Helma Croft,a geopolitical strategist at Barclays Capital.Drought and its higher food prices will hurt Middle East fiscal positions.None of these governments can afford to put off subsidies to their people.

Wednesday, August 22, 2012

Asian Market Voices

We probably don't need QE3,or more Federal Reserve asset purchases,in the view of Tim Riddell,Head of Global Markets Research at Australian bank ANZ.I expect a relatively positive end to the third quarter.
It's not over for Greece.They've got a lot of problems.
Mario Draghi has shifted the whole focus of the European Central Bank.He's really doing a good job.
The Shanghai market could be a big shifter into the next quarter.We could get a 10.5% rebound going into the next month or two.The downside risk is only 2-4%.The skew to me is,look to get involved.
I think China's home prices have bottomed,said Nicole Wong,Head of Real Property Research at CLSA.Today 92% of buyers are end users,as opposed to investors,versus 50-60% a few years ago.The supply is getting a little bit tight at this time.
The new governent will have to think about the next few years.A lot of the tightening will stay just a warning.Supply is plummeting and demand is quite stable.Those developers with positive cash flow will be in the best position.
Another rate cut will make money in the bank feel more and more painful.
CLSA stands for Credit Lyonnais Securities Asia.It claims to be Asia's leading and longest running independent brokerage and investment group.The Hong Kong-based firm offers investment banking,equity broking and asset management to global corporate and insitutional clients.Credit Agricole is their main shareholder.

Wednesday, August 15, 2012

Apple Versus Samsung:Tech Heavyweights Slug It Out In Court

A San Jose,California court room has been the stage for an epic legal drama acted out by two bitter rivals of the tech universe,Apple Computer and Samsung.Judge Lucy Koh of the U.S. District Court Northern District of California told the two sides it's time for peace on Wednesday,urging Apple CEO Tim Cook and Samsung CEO Choi Gee-Sung to at least talk on the phone before the case goes to the jury-probably next Wednesday.
The trial is now in its third week,with both sides calling witnesses to support their cases.
Apple seeks 2.5 billion dollars in damages,plus an injunction to halt sales of what it deems are the offending Samsung devices,saying the products were slavishly copied from its own iPhone and iPad.For its part,Samsung denies the allegations and insists Apple was in fact infringing Samsung patents.
The two CEOs had met before the trial began on a court order to seek to resolve the conflict,but were unsuccessful.Legal experts expressed scepticism that,having gone so far,the sides will be willing to turn away from the legal process at this late stage.Their lawyers told Judge Koh,however,that the two men would comply with her last ditch request that they communicate again.
In the course of presenting its case,the normally secretive Apple has revealed both source code and design methodology.Their integration and execution are just a lot better,according to Erin-Michael Gill,Managing Director and Chief Intellectual Property Officer at MBD Capital Group.I don't think it's just a little old man behind the curtain.The execution and ideas generated are universally accepted as being pretty innovative.
In every large company,when you're developing innovation,it takes a lot of confidence to allow design to lead.It's pretty clear that it does at Apple.When you look at Apple,it doesn't look and feel like other consumer electronics companies.It's more like a drug company,with a couple of core inventions that are critical.There are core elements in their process and products they are gonna defend fiercely,Mr.Gill explained.

Wednesday, August 8, 2012

MIT Professor:Finance and Politics

The riskiness of the market isn't nearly as predictable as it used to be,points out Andrew Lo,Professor of Finance at the MIT Sloan School of Management.Factors are pushing the markets.The entire sector is getting hit,not individual companies.
The Americans and Europeans must fix political problems.Fiscal integration in Europe is really inevitable.All of this debt on banks' balance sheets must be dealt with.There must be write-downs,recapitalisation and ultimately privatisation.We're waiting on the edge of our seats for these politicians to get their acts together.
We have to understand the global linkages across all these platforms.Any kind of coordinated activity means that things are really bad.Central banks have relatively few tools.Ultimately it's the political process that has to create the atmosphere for resolution.
We've been dealing with a lot of structural issues.Spending in the short run will help,but it is unsustainable.Ultimately,the only way to do it is cold turkey.Investors are scared.We're staring into the abyss.There are a lot of people in cash.They need to be able to invest in risk assets for their retirement.We need to restore trust in the financial system,Professor Lo reflected.
Dr.Lo has a PhD in Economics from Harvard University.He is an authority on hedge funds and financial engineering.His books include "Dynamics of the Hedge Fund Industry" and "Market Efficiency:Stock Market Behaviour in Theory and Practice."

Wednesday, August 1, 2012

Author Lays Out China's Best Case Scenario

Commodities exhibit a one decade up,two decades down cycle,notes Ruchir Sharma,Managing Director,Portfolio Manager and Head of Global Emerging Markets Equity Team at Morgan Stanley Investment Funds.China is the 100 pound gorilla in the commodity marketplace.
A China slowdown is a principal part of the commodity slowdown thesis.The best case for China is 6-7% growth.It's quite a shock for those who are used to 7-8% growth.It's a very natural slowdown.At a per capita income of 6,000 dollars a year,all developing economies slow down.
China is systematically deploying its wealth,but their debt to GDP is close to 200%.The reason for their slowdown is,the number of people entering the labor force and moving to cities is slowing down.It's demographics.It's like Japan in the 1970s.
We are now in a post-China world.Look to the Philippines,Indonesia and Thailand.For the first time,the Philippines now have a stable political leadership intent on increasing the country's wealth,Mr.Sharma pointed out.
Ruchir Sharma,CFA,is the author of the book "Breakout Nations."A Newsweek columnist and contributor to The Wall Street Journal,he has a BA in Commerce from Shri Ram College of Commerce in Delhi.
Morgan Stanley(MS)

Wednesday, July 25, 2012

Managing Director:Asia's New Rising Star

We expect the third and fourth quarter to look a lot better in China,said Nigel Chalk,PhD,Managing Director and Head of Emerging Asia Research at Barclays.In the end,they're gonna do more investment,more credit.Data show things are not as bad as people think.
India has much less room for maneuver.It's unclear how they're gonna turn around growth.We like the Philippines.They have a good fiscal and monetary policy side.On a lot of fronts,they seem to be the rising star.
Dr.Chalk was a longtime IMF official,most recently serving as Mission Chief to China.He received his Economics doctorate from UCLA and a MSc in Economics from the London School of Economics.
Barclays was named "Best Global Investment Bank" for 2011 by Euromoney magazine.
Hugh Young of Aberdeen Asset Management adds that Singapore has strong banks.Go with the strongest banks.Worry about the balance sheets,not the earnings power.
Barclays PLC(BCS)

Wednesday, July 18, 2012

Managing Director:Where You Want To Be

There's a transition in the mix of growth coming out of China,according to Lisa Shalett,Managing Director at Bank of America-Merrill Lynch.We think it's going from infrastructure/construction/building to a consumption/services mix.
Our thesis has been to go with the best of breed in Europe.That means Siemens,Daimler Benz,Astra Zeneca.Investor fatigue and the overhang of issues are really in the U.S. market.
Mario Draghi,President of the European Central Bank,can learn a lot from Federal Reserve Chairman Ben Bernanke.The risk in Europe now is a deflationary bust.You want to be in high quality,dividend-growing equities and investment grade corporates.You want to be in companies,not countries.Be in the emerging markets and high yield debt,Ms.Shalett counseled.
Lisa Shalett is Chief Investment Officer of Merrill Lynch Global Wealth Management and Head of Investment Management and Guidance.With over 17 years' experience in the investment industry,she has a BS in applied mathematics and economics from Brown University and an MBA from Harvard Business School.
Bank of America-Merrill Lynch(BAC),Siemens AG(SI),Daimler AG(DDAIF),Astra Zeneca(AZN)

Pepsi: Now In a Moment (Extended Cut)

Wednesday, July 11, 2012

Asset Allocation:A Standard Chartered View

We believe the U.S. economy is stronger than most people believe it to be,said Steve Brice,Chief Investment Strategist at Standard Chartered Bank.We do believe we're in a more constructive risk environment,but it's not gonna be a straight line,in our opinion.
We are overweight global equities.The dividend yield in the U.S.,Japan and Germany is significantly above government bond rates.It makes total sense from a global equities perspective.We are also overweight corporate debt.We are overweight the U.S.,China and Korea.We do see high dividend yields in Malaysia,Mr.Brice added.
The case for buying Europe is based on the sentiment being awful;cheap valuations;shares trading at a 49% discount,versus a 20% premium in the U.S.;and the dividend yield at a 320 point spread to the German bund,according to Katie Koch of Goldman Sachs Wealth Management.The smart thing is to initiate or add to positions;but keep some dry powder.Up to 25% could be in emerging markets;the other 75% will include some exposure to emerging markets,which means you will have over half of your return from emerging markets,Ms.Koch explained.

Wednesday, July 4, 2012

Author:How To End the Euro-Zone Crisis

Scholar,journalist and author Sebastian Mallaby,Director of the Center for Geoeconomic Studies at the Council on Foreign Relations,thinks the most plausible route to end the crisis is the issuance of a euro bond.German leadership is complacent over its own good economy.We are in a real cliff situation.The leaders are not there yet mentally.
You need to really shock the system and get growth back.High bond yields don't seem to be enough of a shock.It's up to the political leadership,not the European Central Bank.If Greece leaves the Euro-zone,there's nothing the ECB can do.
Mr.Mallaby is the author of  "More Money Than God,"a book about hedge funds.It's a crowded,more competitive space.Hedge funds haven't done well during the crisis,he feels.Money market funds have pulled back their European exposure,but there is this confidence factor that is affecting U.S. performance-through the crisis' affect on China being a worry,for instance.
Mr.Mallaby has also written "The World's Banker" and "After Apartheid:the Future of South Africa."He was a longtime journalist with the Economist and is a columnist for The Washington Post.

Wednesday, June 27, 2012

Banking Requires Risk,Former Fed Chairman Says

Alan Greenspan,86,former Federal Reserve Chairman,is halfway through writing his new book.He's been asking why did the most sophisticated  technologies fail to capture the greatest crisis on September 15,2008?There are certain things that simply cannot be forecast,Mr.Greenspan answers.Animal spirits can't be defined in terms of numbers.
The only way to preserve Europe is a political consolidation of Europe.You're trying to put together a whole series of different cultures.They must be under the same political tent.
In my experience,the Glass-Steagall  Act of 1933,which separated commercial banking from investment banking and was later repealed, is not where our problems lie.Productivity goes up because we add cutting edge technologies.If you're gonna use our scarce savings to finance questionable institutions,you're not gonna have money for cutting edge technology.Banking couldn't exist without the taking of risks.Some of the bank's portfolio will fail.Without risk,there is very little by way of innovation.Creative destruction is what moves our economy forward.
The only thing Europe is currently doing is financing deficits;not eliminating them.It's taking the easy way out,with very negative long term consequences.That is not conducive to a stable system.The American economy looks very sluggish to me.Over 90% of it,the non-durable goods,is doing fine;the other 8% is down by 50%,Mr.Greenspan noted.
Alan Greenspan was Federal Reserve Chairman from 1987-2006.He is the author of the best-selling "The Age of Turbulence."

Wednesday, June 20, 2012

Dell's Big Shift Means Profits

Dell Computer has shifted to being an end to end solutions provider of enterprise solutions and services,founder and CEO Michael Dell noted.As a result,cash flow rose to 5.5 billion dollars last year,and the company was able to initiate its first dividend of .08 a quarter.It also continues share buybacks.The steady cash flow and the shift we made should allow us to pay a dividend in perpetuity.IT is still the area where companies get productivity.The areas we can grow in are servers;storage;networking;and security.Our business is 80% commercial.The vast majority of our profits come from businesses,institutions and governments,with 19% from consumers.It's a split similar to that for the overall industry.
We're constantly introducing new products.The enormous amount of data needs to be secured and protected.We feel confident in our ability to grow the enterprise side of our business.We're investing organically and acquiring.The amount of data being stored is doubling every 18 months,and is expected to continue for the next five years.
You see a general kind of pause and caution now.Controlling cost is exactly the kind of thing we're focused on,Mr.Dell pointed out.
Founded in 1984,Dell's first international subsidiary was opened in the U.K. in 1987.In 1990,a manufacturing center was set up in Limerick,Ireland.International sales were growing exponentially by the late 1980s.Today there are manufacturing and solutions centers from Brazil to Malaysia and China.
Dell Computer(DELL)

Wednesday, June 13, 2012

European Outlook:Fear and Dealing With Fear

A recent stock market uptick was essentially a bear market rally,said Michael Woolfolk,PhD,Senior Currency Strategist and Managing Director at Bank Of New York Mellon.Until we get a resolution to the Greek exit question,the market will continue to be defensive.With the Greek election on the 17th,there is likely to be further turmoil in Europe.There's quite a bit of movement from the periphery into the core.The concern is,what's gonna happen to the periphery?The next step is,the fear factor is so great,they start to move out of Germany.The status of the U.S. dollar is unique in the global financial system.The move to cash will be overwhelmingly U.S. dollars.How far are government officials prepared to go in financing the periphery?You're already starting to see some cracks in the willingness of Europe to take care of its own,Dr.Woolfolk observed.Larry Summers,former U.S. Treasury Secretary and President Emeritus of Harvard University,thinks the situation in Europe is very difficult.The single currency is brittle.The risk is in lack of confidence and self-fulfilling fear.A central bank wants to bend over backwards to be reassuring that liquidity is there.It's a kind of bargain between the different actors.The overwhelming imperative is to instill more confidence than exists today,current Harvard professor Larry Summers counseled. Bank of New York Mellon(BK)

Wednesday, June 6, 2012

Global Money Manager:What You Have To Do

There is considerable concern about the fate of the European banking system in these troubled times.It's about deposits,and you're worried about deposit flight,according to Peter Fisher,Global Head of Fixed Income at BlackRock.It's a bigger issue than whether Greece leaves the euro currency.You want a banking system that's stable for Europe.You don't have to have a fiscal union;but not having a banking union,that's a problem. In a high volume,low liquidity environment,you have to bring your risk level down.You've got to be much more judicious.In the U.S.,I think Congress will not want a recession this year,and will pass a marginal measure;but will have a rude awakening in October,when the market reacts to the fiscal cliff.As a return play,you look at high quality corporates and fixed income,Mr.Fisher advised. BlackRock has offices in 27 countries worldwide.From governments to pension plans,insurance companies and individuals,the money management firm serves its diverse clientele with risk management,strategic advisory and investment system services,building portfolios totaling approximately 10 trillion dollars. BlackRock Inc.(BLK)

Wednesday, May 30, 2012

Testing His Mettle:Deutsche Bank's New Asian Star

If ever there were a time for clarity of thought in European banking,it is today.We are nowhere near a run on the banks,according to Anshu Jain,incoming Co-CEO of Deutsche Bank.The real issue in Europe is about sovereign debt,starting with Greece.We've got capital-lots more;liquidity-lots more;it's gonna be harder under the new regulations.We're really happy with our U.S. franchise.I'm confident we'll hit all capital targets.It's way too early to do a post-mortem on the JP Morgan trading problem.It's very important that we restore the credibility that has been lost.I don't think there are any easy answers.We did let a lot of people down,and now we have to make up for that.At this point,it's organic capital accretion at Deutsche Bank.We are reasonably constructive on many asset classes,but our main concern is our clients,not acquiring assets.Getting it right in our home market and continuing to grow in the emerging markets and the U.S.,in that order,are our priorities at Deutsche Bank,the native of Jaipur,India made clear.Mr.Jain and Juergen Fritschen assume the reins of leadership at Deutsche Bank from Josef Ackermann on Thursday at the annual shareholders' meeting in Frankfurt.At 49,Mr.Jain is one of the most prominent business leaders of Indian origin,having received an economics degree at Dehli University,and an MBA at the University of Massachusetts Amherst.He was head of global corporate and investment banking at Deutsche Bank prior to his new appointment,with considerable success.He will certainly need every talent he has in the difficult climate that prevails in European finance at the present time.Deutsche Bank(DB)

Wednesday, May 23, 2012

Co-CEO:Logistics Business Strong

We've built a multi-billion dollar business in Japan,said Hamid Moghadam,Co-CEO and Chairman of Colorado-based industrial real estate firm Prologis.There is a need for modern large logistics buildings.As the market leader,we continue to be very optimistic about our prospects in Japan.We're promoting our high seismic standards of newer facilities that we build securely.There is increased demand from reconstruction.Even incomplete facilities are 70% leased.China is in the very early innings of building infrastrcture for logistics.I can see our business prospering in China for the next 20-30 years.The market is pretty remarkable.Recovery is probably most advanced in the U.S.There's 10% more people today than at the beginning of the financial crisis.We're growing rents in certain European markets.Latin America is simply on fire,and we cannot keep up with the demands of our customers,Mr.Moghadam observed.Prologis(PLD)

Wednesday, May 16, 2012

Power Woes Continue for Japan

Still ailing from the 2011 earthquake and tsunami,Japan may face rolling blackouts this summer,according to Penn Bowers,Asia-Pac Power Company Analyst at Credit Agricole.The severity of them is the big question.If they are unable to distinguish among big electricity users such as hospitals,there could be a big backlash. Power companies have been eating the costs of the disaster,cutting dividends in the process.Dominant utility TEPCO,the Tokyo Electric Power Company,has been taken over by the Japanese government,which is giving it a one trillion yen bailout to deal with its crippled nuclear plants. If Japan's 50 nuclear power plants don't restart,there will be a lot of pressure on the government to reduce the cost burden of alternative fuels such as gas and oil,Mr.Bowers predicted.TEPCO is actively seeking a permanent solution to its generation shortfall,engaging in talks for a 4.4 billion dollar stake in a Chevron Australia liquified natural gas project called Wheatstone.TEPCO has asked multinational conglomerate Mitsubishi Corporation and shipping company Nippon Yusen KK to participate in the deal,fearful that China will come in with a higher bid for the Wheatstone LNG field stake. Chevron(CVX),iShares MSCI Japan Index Fund(EWJ)

Wednesday, May 9, 2012

Recovery Today:A Trust Company Assessment

The unemployment rate went down slightly in April,but it doesn't include part-timers and the frustrated who have dropped out of the jobs search,points out Komal Sri-Kumar,Chief Global Strategist at TCW.The male participation rate was the lowest since 1948.The pain should be measured by the participation rate.Regardless of whether the job market is normally a lagging indicator,in this recovery it has become a leading indicator.The stock market cannot recover without jobs. The question is,do you want to right the market for a short period of time,or do you want to support it for 3-5 years with jobs?That is at the top of my list.In the short term,I look for U.S. Treasury yields to go down if there is more trouble in Europe or the U.S.In the first half of 2013,you will see more meaningful measures on jobs after the election,Mr.Sri-Kumar projected. TCW,the Trust Company of the West,was founded in Los Angeles in 1971.It serves institutional and high net worth individuals with a broad array of U.S. equity,U.S. fixed income,alternative and international strategies in accordance with its core values of fundamental research,remaining true to its investment styles and superior customer service.

Wednesday, May 2, 2012

Executive Chairman:The Unreflected Risks

Three to four weeks ago,it just seemed to me the macro environment seemed to be stabilising,but now it seems a series of old and big question marks have returned,said Roger Altman,co-founder and Executive Chairman of Evercore Partners.These are 1.Europe;2.a weak U.S. recovery;and 3.the fiscal cliff in the U.S.Perception in so many cases is reality.Today the perception is,the Euro crisis is again front and center,with the political tumult in France and the Netherlands,and the PMI out this morning.The crisis is boiling up again.At the same time,the U.S. GDP continues to be profoundly weak.There are two exogenous factors that could be destabilising:1.Iran;and outright implosion in Europe.Neither one is playing through the markets right now,but they are big risks,Mr.Altman believes. Mr.Altman was an Assistant Secretary of the Treasury from 1977-81 and Deputy Secretary from 1993-95.He has an MBA from the University of Chicago,and serves as a trustee of New York-Presbyterian Hospital and Vice-Chairman of the Board of the American Museum of Natural History. Evercore Partners is a global independent investment banking advisory and wealth management firm. Evercore Partners(EVR)

Wednesday, April 25, 2012

Chief Financial Officer:Intel's Vision of Growth Drivers

Intel has reported Q1 earnings greater than estimated.With that achievement on the books,what lies ahead for the tech titan?We have a hundred designs in the pipeline,said Chief Financial Officer Stacy Smith.You're gonna see touch enabled;thin and white products.We're well on the way to 40% of the pc market by the end of the year.As we look forward,we think we can grow the data center business over the next five years. Windows 8 will be positive for sales.The performance and very thin form factor,along with touch,really sets us up for an exciting set of products for the end of this year.We've announced smartphone design wins.You're gonna see them with Intel architecture inside. Things are getting incrementally better in the U.S. economy.We still see robust growth in the emerging markets,leading to high unit sales growth,Mr.Smith observed. Led by CEO Paul Ottelini,Intel draws on the very considerable talents of some 92,000 workers worldwide. Intel(INTC)

Siberian tiger, leopard number doubles in NE China -

Siberian tiger, leopard number doubles in NE China -

Wednesday, April 18, 2012

AIG Almost Home,But Worries Persist

In our board meetings,we're talking about making an acquisition,rather than getting out of one,said Steve Miller,Chairman of American International Group.And we're getting closer to the point of not only paying back every penny of the bailout;but posting a profit for the shareholders as well.There's no guarantee;but it's certainly within the realm of possibility of occurring in the next 12 months,the insurance executive feels.
The context of AIG's progress is defined by Ward McCarthy of Jefferies&Co. as an economy that's doing O.K.,but with weak employment and a decline in business confidence.We have been getting a little bit too bullish,and now it's getting back to the way it should be.
The warm weather made some of the numbers look better than they otherwise would have been.Now the weather has changed,making it look less favorable.We really have a bifurcated real estate market.Home affordability has never been greater.What we really need is income growth to make it all possible,Mr.McCarthy believes.
Some good things are happening in the economy,such as AIG's recovery,but it isn't totally sound.
Jefferies&Co. is an institutional securities,asset management and investment banking firm,active in 30 cities worldwide.It also provides services to high net worth individuals.
American International Group(AIG),The Jefferies Group Inc.(JEF)

Wednesday, April 11, 2012

Chinese Service Sector Expresses Confidence

According to the China March HSBC Services PMI,or Purchasing Managers Index,business confidence hit an 11-month high.The survey registered a 53.3,which is slightly less than February's 53.9 reading;but a mark of greater than 50 still indicates growth in service-oriented businesses.New business expanded for the fortieth straight month.
Compiled by British financial data expert Markit for HSBC bank,the index showed firmer client demand;improved overall business conditions;and service firms being able to pass rising costs onto consumers.
Qu Hangbin,HSBC Chief China Economist,nonetheless thinks overall growth is slowing a bit-for instance,in export orders;industrial production;or employment.All these call for further easing measures,while inflationary pressures should remain relatively contained in the coming months.
Caution with regard to the March report is justified in that service sector growth was offset by manufacturing weakness and affected by state policies to cool growth in the real estate market.Indeed,service sector companies raised their staffing at only a fractional rate in March;and outstanding business,or backlogs,also rose marginally.
As well,despite the 11-month high in business confidence,the degree of optimism was weaker than the long-run trend for the survey.
All the same,survey respondents were expressing optimism,saying they would expand their companies and expected growth in the wider Chinese economy.China's official growth estimate for 2012 is 7.5%,an outstanding rate in comparison to the developed nations.
HSBC Holdings PLC(HBC)

Monday, April 9, 2012

Shop Talk:Recommended Photo

Dear Readers,
A link to an excellent photo of the ESA cargo module docking with the International Space Station is provided in the previous post.I hope you will avail yourselves of this opportunity.Manned spaceflight is very much alive,despite the end of the space shuttle program.
Andrew Taylor

Wednesday, April 4, 2012

Dow Chemical's Broad Solutions Network

Dow Chemical is a company that has long embraced globalism at every turn in its corporate life.
We're using Thailand as an operations hub these days,said Dow Chemical CEO Andrew Liveris.There are 160 Korean scientists at our R&D facility there.
The reception in China for global businesses is powerful.China is a red carpet;there are a lot of other economies that are red tape,the industry leader candidly observed.Dow is in 150 countries in terms of sales.
Obviously,Saudi Arabia is very important to a company like ours that is resource intensive,Mr.Liveris noted.
The firm employs about 52,000 workers worldwide.From Mexico to the Middle East,they produce more than 5,000 specialty chemical,advanced materials and other products at some 197 facilities in 36 countries.
Andrew N. Liveris,who turns 58 next month,is a native of Darwin,Australia.He graduated from the University of Queensland with a chemical engineering degree.Mr.Liveris was formerly general manager of Dow's Thailand operations.The Midland,Michigan resident also serves on the Board of Directors of IBM.
Dow Chemical(DOW)

Wednesday, March 28, 2012

Meeting the Future:Apple CEO Emphasizes China's Importance

Apple CEO Tim Cook has emphasized just how critical he considers China's importance to his company's growth is by visiting Beijing and meeting with the Vice Premier,Li Keqiang on Wednesday.Mr.Li said that China will strengthen intellectual property rights protection-a key Apple concern-and continue its economic transformation.
To be more open to the outside is a condition for China to transform its economic development,expand domestic demands and conduct technological innovation,Mr.Li continued.
For his part,Tim Cook promised that Apple will strengthen comprehensive cooperation with the Chinese side and conduct business in a law-abiding and honest manner.
Cheap Chinese knock-offs of Apple products have been a long-standing irritant to the tech giant.China,with its vast population still largely unconnected to the Internet,is a major prospect in Apple's future,the company has made clear.One of the company's major outsourcers,FoxConn,assembles countless Apple products in China.
Apple currently operates five retail outlets in China.The potential for expanding that side of the business alone is truly significant.It is estimated that 60% of China's population is unconnected to the cybernetic realm.
Apple is a massively successful company and stock,and it could be more successful,according to David Kirkpatrick,author of "The Facebook Effect."Its price to earnings ratio is not high for the industry,such as Amazon's.If for some reason this extraordinary growth should slow,they might want to make a strategic acquisition such as Twitter or Adobe,Mr.Kirkpatrick speculated.
With the untapped hordes of the upwardly mobile Chinese before them,that doesn't seem too likely in the near future,however.
Apple Computer,Inc.(AAPL)

Wednesday, March 21, 2012

Dell Computers:Serving the World;Managing Transformation

Dell's earnings per share and cash flow were up because we changed our business to be an end-to-end solutions provider,says Michael Dell,founder and CEO of the multinational Dell Computers.We're growing our R&D expenditure along with cash flow.
Our growth is both organic and inorganic.You'll continue to see us active in both.We acquired 18 businesses the last three years.We gained share across the board.We're number one in servers in the U.S.,China and India.Our margins grew 370 basis points in the past year.Our job is to do it again this year.
With all these mobile devices,the amount of data is doubling every 18 months.We're building data centers of the future that take in all the data and feed all those devices.There's lots of opportunity in the ecosystem that Dell participates in.There's a lot of demand for a Dell/Windows tablet.We'll be there right on the very first day that Windows 8 is available,Mr.Dell promised.
Dell has a presence on six continents,with facilities from Canada to Qatar and beyond.In the U.S.,the company has launched a national command center with the Red Cross.It's a social media command center for humanitarian purposes,to redirect resources,people and tools through social media.We're really proud to be putting this in place,Michael Dell added.
Dell Computers,Inc.(DELL)

Wednesday, March 14, 2012

War With Iran:What To Expect-and what to do

President Barack Obama warned Iran Wednesday that the time left for a diplomatic solution is shrinking.Investors are contemplating just what to expect and how to respond if war indeed breaks out.Aaron Gurwitz,Chief Investment Officer at Barclays Wealth,says the problem is,this is an unknown unknown.I don't know how to assess the chances of a war.
In an attack on Iran,the price of oil would probably rise very sharply.It would be very hard to get oil to customers.Expect 150-200 dollar a barrel oil if the Strait of Hormuz is closed.
It would be a huge impact on markets and the global economy.Risk assets such as equities and junk bonds would be sold.We at Barclays don't want to go into cash now.You might want to buy the VXX as volatility would spike,or an oil etf.
I worry about it as a citizen and an investment strategist.You hear people talking about starting a war in a very sensitive region.Those who would lose sleep should probably put something in their portfolio,Mr.Gurwitz counseled.
Barclays PLC ADR(BCS)
Some possibilities for the situation researched by this blog include:
iPath S&P GSCI Crude Oil Total Return(OIL)
iPath S&P 500 VIX Short-Term Futures ETN(VXX)
iPath S&P 500 VIX Mid-Term Futures ETN(VXZ)
It is generally unwise to concentrate too much in any one asset.Also bear in mind that VXX is more volatile than VXZ.None of the notes above pay dividends or interest.
For less experienced investors,allocating more to the bond and cash portions of their portfolios would seem the safest course in difficult times.Some of the most popular bond funds are:
iShares Barclays Aggregate Bond Fund(AGG)
Vanguard Total Bond Market ETF(BND)

Friday, March 9, 2012

FT/Citi Ingenuity Awards: Urban Ideas in Action

FT/Citi Ingenuity Awards: Urban Ideas in Action: FT/Citi Ingenuity Awards to recognize ingenious solutions to urban challenges in the fields of education, energy, healthcare and infrastructure. Submit your application today: For more information visit

Wednesday, March 7, 2012

Asset Manager:Fairly Good News Ahead-and what limits it

I think we're going into a fairly good news economy,said Christian Thwaites,CEO of Sentinel Investments.The regional Federal Reserve Banks reported gains;exports and imports look good.It's gonna be difficult to get beyond 2.5-3% growth,however,because the government is a drag on the economy.
Manufacturing has posted some very impressive productivity numbers.That's the way employers would rather grow,than by hiring more people.The employment picture is only gonna improve very,very gradually.
The inflation number is not a problem.Inflation in China is not down to a point they are comfortable with.There is definitely a very robust consumption story from China.
It's a more subdued consumer recovery in the U.S.Play it carefully.Choose very good,solid,well-managed consumer discretionary companies if that's where you're going to go.You're only going to see 3-5% growth,rather than the 7-8% you saw during past recoveries,Mr.Thwaites noted.
Since 1934,Sentinel Investments has grown to manage more than 18 billion dollars in mutual fund and institutional accounts.As a provider of core,back to basics strategies,standing the tests of time is their criterion for success.

Wednesday, February 29, 2012

Asia Executive:ASEAN Region Looking Robust This Year

The ASEAN Region-the Association of Southeast Asian Nations and its environs-is growing 5-5.5% this year,according to Stuart Dean,President,ASEAN Region at General Electric.We grew 30% there last year,and we expect double digit growth again this year.
All the businesses had a good year in 2011,and it looks similar this year.GE Aviation had a strong year,and we're gonna be pretty big this year as well.
I think the China landing is likely to be soft.For the next 4-5 years,ASEAN is likely to see growth of 5-6%.There's a lot more opportunity to sell locomotives in ASEAN.The living standards increase,and infrastructure plays a big part in that,Mr.Dean explained.
Stuart Dean has a B.A. in Economics and Political Science from Duke University,as well as an MBA from Harvard University.ASEAN has 10 members,including Indonesia,Malaysia,Singapore and Vietnam.
General Electric(GE)

Wednesday, February 22, 2012

Investment Problems and Prospects:Thoughts From Alliance Bernstein

Our point of view on the Volcker Rule is that it reduces liquidity all over the world,says Peter Kraus,Alliance Bernstein CEO.Investors want to trade securities at a price that's fair;at the end of the day,the Rule reduces liquidity.Our view reflects our clients' views.
The Volcker Rule,part of the Dodd-Frank financial reform legislation,takes effect in July.It bans proprietary trading by financial institutions.Big banks will be required by the Rule to maintain a staff of 50-60 people to comply with it.
That the Rule applies to foreign institutions as well has increased the criticism of it.Complaints have been rolling in from around the world.
The changes on Alliance Bernstein's business will not be particularly large,Mr.Kraus added,but it will crimp our clients' returns.It will hinder the sale of mutual funds.If you buy securities from a seller,you must sell at the end of each day,making it difficult to price the sale.The Rule is very complex from both the compliance and the structural point of view.
As for the overall investing environment,we certainly understand the flow of funds is still into fixed income.That makes it an interesting time to consider tilting back into equities,Mr.Kraus explained.
Mr.Kraus' colleague at AB,Vadim Zlotnikov,observes that some of the positives from the U.S. and China should be able to overcome the problems in Europe.To the extent Greece defaults,and there is no contagion,I don't think it would be a big enough event.
Mergers and acquisitions economically would make a lot of sense.The financial availability is improving;the deals are looking attractive.It could be April or mid-year before conditions deteriorate,in Mr.Zlotnikov's estimation.
Alliance Bernstein is a client-centered and research-driven asset management firm.Their global client base includes a broad range of individuals and institutions who are assisted by the firm's array of products and service organisations,which are tailored to their distinctive needs,from offices worldwide.
Alliancebernstein Holding,LP(AB)

Wednesday, February 15, 2012

Author and Professor:Getting Back to Prosperity

The best thing is for the creditors and authorities to get a deal that helps Greece to grow,in the view of John B. Taylor,Professor of Economics at Stanford University.Each side is gonna try to get the best deal they can.If they can put in some good economic growth plans,I think that's the answer to this-to get Europe back on the growth track.The growth in the early eighties was 5.9%.Steady as you go,keeping the tax rate low-that's what my research shows.
We in America could get into a situation like Greece.We can get back on track with just some sensible adjustments.It shouldn't be that hard.The Fed has bought so much debt,people don't know how they're gonna get out of that,so the banks are sitting on all that cash.
We just have to contain the entitlement growth.It'll lead to a better system.We got away from all this in the eighties and nineties,but we fell back into it,the interventionist policies.Get back to predictable,reliable monetary policies and we'll be in good shape,Dr.Taylor feels.
John Taylor is a former member of the President's Council of Ecomomic Advisors from 1989-91.He is currently a Senior Fellow in Economics at the Hoover Institution.Dr.Taylor is author of the book "First Principles:Five Keys To Restoring America's Economic Prosperity."

Wednesday, February 8, 2012

Chief Market Strategists:Grappling With Greece-and who may ultimately win

Even if some problems are solved in Europe,we still have more to go,according to Nick Colas,Chief Market Strategist at ConvergEx Group.Germany is a special case,a high growth export economy,sending such things as machine tools to China.Spain is like Florida:housing driven,with homes for retirees.
Europe's got to firewall a bunch of the issues in Italy,Spain and Portugal.What they're really trying to do is buy time.We in the U.S. are doing everything to keep rates low on the monetary side;Europe has embraced austerity.We are trying to keep growth going.We shall see who wins.
Leadership is lacking,adds Andrew Economos,Head of Sovereign&Institutional Strategy,Asia ex-Japan at JP Morgan Asset Management.Greek politicians are setting themselves up for the April election.A deal is done.It's really a question of getting the three political parties in line.
We'll have this rolling crisis as we sweep through the periphery.Germany will guarantee the debt and China will take a stake.I think it means ample liquidity.Ultimately,it flows into Asian markets,Mr.Economos believes.
ConvergEx Group is a provider of mission-critical software and services to asset managers and financial intermediaries globally.Serving more than 4,000 institutional customers in 22 cities worldwide,their products and services span the investment life cycle.
JP Morgan Chase(JPM)

Wednesday, February 1, 2012

Executive Warning:China Dominant in Rare Earth

Michael Silver,Chairman,CEO and President of American Elements,a global manufacturer of engineered and advanced materials,including rare earth metals and chemicals,has been pleading for the establishment of a U.S. strategic metals reserve(SMR).China is currently dominant in the field,with 95% of the world's rare earth production.
In the event of an embargo on rare earth,U.S. manufacturing would grind to a halt.The strategic metals are crucial for everything from televisions and cell phones to fiber optics,computer hard drives,wind turbines,lasers and night vision goggles,as well as radar transmitters and GPS systems in the military realm.
In the past year,the cost of rare earth has risen more than 25-fold.South Korea,Japan,the EU and U.K. have their own plans for national stockpiles.
The military does need to do an assessment of what its needs for rare earth are for six months or a year.Clearly a politically strategic asset,China has command of most of these materials,putting it in the position of being the Middle East of the 21st century,controlling the alternative energy sources,such as solar panels and hybrid batteries,that are so reliant on rare earth,in Mr.Silver's opinion.
The U.S. has only one open pit mine in Mountain Pass,California,which belongs to Molycorp.Molycorp has just sold 12.5 million shares to a Chilean firm,Molibdenos y Metales S.A.,for 390 million dollars-a 13% stake in the company.
American Metals is based in Los Angeles and has manufacturing and warehouse facilities in the U.S.,China,Mexico and the U.K.

Wednesday, January 25, 2012

CFO:Intel's 2012 Story

We had an extraordinary year in 2011,says Intel Chief Financial Officer Stacy Smith.We saw growth across every line of business.The story for us in 2012 is a refurbished product line.I'm very excited about the Ultrabook.It will move into a more mainstream price point.
In terms of demand,2011 saw growth as expected,with good growth in the emerging markets.We had a strong enterprise segment,and the data center group was very strong.
The mature market consumer was sluggish,especially in Europe.The supply chain impact from the Thailand flooding was no hard disk drives,so inventory levels were brought down.We expect the impact to ease by Q2 2012.
This is a product story for us.We can build better products for our customers.The growth drivers in 2012 will be the same as in 2011,Mr.Smith predicted.
Intel employs about 90,000 workers at some 200 facilities worldwide.The company has locations in the Americas and Asia,as well as Europe,Africa and the Middle East.

Wednesday, January 18, 2012

Advisor:Moving From Market Pessimism-plus the nuanced view from Chase

Anticipation is the key word in the market today,according to Michael Yoshikami,CEO of YCMNET Advisors in Walnut Creek,California.The sentiment is so pessimistic,even meeting expectations will be seen as victory.I think analyst sentiment will shift to more positive.
Stock prices have been based on a catastrophic scenario.The news has been getting better.Europe might actually be stabilising.The economy is slowly recovering.
I think banks are beaten down right now.They're extraordinarily cheap.They have really deleveraged their balance sheet.I think they're poised for a rebound,Mr.Yoshikami noted.
JP Morgan Chase and Qualcomm are among Mr.Yoshikami's top picks.
Jamie Dimon,JP Morgan Chase CEO,thinks it's a mild recovery,but that it seems to be broadening.Charles Gasparino of Fox Business has a lot of respect for Mr.Dimon as being one of the smartest people on Wall Street.Although he's optimistic,there are a lot of hedges in Jamie Dimon's position.For example,although portrayed by the media as predicting a housing recovery in 2012,Mr.Dimon believes we still have a little ways more to go down in housing.With regard to the new financial regulations,although Mr.Dimon doesn't mind banks being required to put more capital aside,he feels the Dodd-Frank bill is squeezing a lot of business out of Wall Street,Fox Business analyst Charlie Gasparino points out.
JP Morgan Chase disappointed Wall Street with its recent Q4 earnings report,missing the Street's estimates.
JP Morgan Chase(JPM),Qualcomm(QCOM)

Wednesday, January 11, 2012

Consultancy:Geopolitics and Economics

We have reached the end of the 9-11 era,says Ian Bremmer,President of the eminent consultancy Eurasia Group.This has resulted in the conflation of economics and politics.Geopolitics are being driven by economics now.
In the developed world,investors are concerned about what politicians will do.It means that all of the risks that are out there create a backdrop of hesitancy to take risks.The fragmentation of Europe isn't going to happen,however.There's a big leadership transition,and the currency issue is not a big risk.Indigenous innovation could have a negative impact on U.S. multinational corporations.
The surprises this year are on the good front.The global elections aren't as big a deal as some of the instability we're looking at,Mr.Bremmer pointed out.
Presidential elections are being held in the U.S.,France and Russia in 2012.
Eurasia Group is a political risk consultancy.It has a network of about 480 experts on its staff in 65 countries.Its full time staff of 125 works from offices in New York,Washington,London and Tokyo.Most of the staff have advanced degrees.

Wednesday, January 4, 2012

Bryn Mawr Trust:Back To Market Basics

I think the market will come back to fundamentals,says Eric Thorne,Vice President at Bryn Mawr Trust.We're gonna be looking at a hotter economy than people expect.I think it's bonds that we should be worrying about right now.
What's really interesting is,the economy is likely to drive inflation and interest rates higher.The market's always setting these traps.We think investors should be looking for gains in general,and in the international stocks as well.The emerging markets will do even better than the U.S. during the next 12 months or so,Mr.Thorne predicted.
Bryn Mawr Trust is a regional financial institution with branches in the greater Philadelphia area.Founded in 1889,it concentrates on the creation,management,preservation and transferral of wealth for its clients,which range from individuals and families to businesses and organisations.It also offers online checking and savings accounts.
Bryn Mawr Trust(BMTC),Vanguard Emerging Markets Stock ETF(VWO)