Wednesday, December 25, 2013

Playbook For 2014

We're looking at the Fed being accomodative for the forseeable future,said Stephen Wood,chief market strategist at Russell Investments.We think there is gonna be a glacial improvement in the labour market;2014 is gonna be an OK year.
Investors need to look to a diversified portfolio and Europe.Look to equities with the market where it is right now.Security selection,stock picking,active management are gonna be very important.
They need to go over this market with a fine-toothed comb.It's getting more challenging,but there are still opportunities out there,Dr.Wood observed.*
They fought 3M,the best American innovator,and they lost,said CNBC analyst Jim Cramer.Blackberry isn't as bad as people think.Look at Sprint.Management turned it around.Sprint needed a lot of money.Someone gave them a fortune-Softbank-and they're staying competitive.
Clorox is supposed to be an 85 in this situation.It is 92.80.The playbook says you should sell Clorox,but they're not going down.We're in a hope springs eternal market.This is Klaus Kleinfeldt's year at Alcoa.
As CDs roll over,what are people going to do?People have to drop their cynicism and drop their polemics.It's a good market,the successful investor Jim Cramer noted.*

Thursday, December 19, 2013

Voices and Visions:Russia and the Sochi Olympics;Fed Tapering

Russia's Deputy Economy Minister Sergei Belyakov has been commenting on the effect of the Sochi Winter Olympics on his nation.Speaking on Bloomeberg TV,he said the main question is,what does it mean for us?We had to create new conditions for life in the whole country.We have a lot of new facilities.It was very important for us.We're speaking about new living standards.The Olympics and the World Championships-all these events are not Putin's project;they are a project to create new ideas,new technology.
Visit Russia and see what's the reality here,the difference between perception and reality,Mr.Belyakov urged.Can Russia afford the 15 billion dollar fund for Ukraine?Please don't be worried.Everything's OK.Our economic situation is not very good.That's why the business environment here is the highest priority of the Russian government.It's not as bad as people think;but we want to make it much better than it is now.We have not only goals;but we have achievements.*
Mr.Belyakov declined to comment on how the Federal Reserve's decision to begin tapering its asset purchases in support of the US economy would effect the emerging markets.Simon Goodfellow,CEO of Harlyn Research,said there will be a spike in volatility.At some stage,that has to go up,and when it does,markets will sell off.Somewhere along the line,investors will have to react.Bond market investors will cause a spike in equity volatility.There was an initial positive response to the Fed holding off on hiking interest rates.Just understand that that will reverse sharply sometime in 2014,Mr.Goodfellow cautioned.*
Tapering doesn't mean tightening,outgoing Fed Chairman Ben Bernanke said in his last press briefing.The Fed will keep tightening until unemployment drops below 6.5%.
The process will be deliberate and data-dependent.Asset purchases will not be on a pre-set course,Mr.Bernanke explained.*
Janet Yellen will succeed Mr.Bernanke in January.

Thursday, December 12, 2013

Study: Pregnancy Risks Increase At Age 30 « CBS New York

Study: Pregnancy Risks Increase At Age 30 « CBS New York

Thailand's Phatlum Takes Omega Dubai Title

The Omega Dubai Ladies Masters,the final event of the 2013 Ladies European Tour,was played over the weekend at the Emirates Golf Club.Thailand's Pornanung Phatlum,24,took the championship trophy,with American Stacy Lewis second and Spain's Carlota Ciganda third.Phatlum shot an outstanding 15 under par 66 in the fourth round to cap off her second career victory on the LET.She won 75,000 euros,or 102,770 dollars,placing her 23rd on the 2013 money list with 660,210 dollars for the season.Phatlum had also won the 2012 Women's Indian Open.
In the second round,South Africa's Connie Chen made a hole in one at the fifteenth to win a Mercedes Benz E-400 convertible.She finished 39th out of 64 for the tournament.
Besides Mercedes and Omega,sponsors of the 7th annual edition included Dubai Aluminium;CNN;Drydocks World/Maritime World;Emirates NBD;and Gulf News.The tournament was under the patronage of HRH Princess Haya Bint Al Hussein,Wife of HH Sheikh Mohammed Bin Rashid Al Maktoum,Vice-President and Prime Minister of the UAE and Ruler of Dubai.Played against the backdrop of the soaring Dubai skyline,it was founded in 2006.Annika Sorenstam was the first champion and repeated in 2007.

Wednesday, December 4, 2013

Voices and Trends in International Business-December 2013

Snack food vendor Mondalez International is being crushed by PepsiCo and its Frito Lay division all over the world,CNBC analyst Jim Cramer pointed out.
A German government agency has cleared Tesla's Model S of being a fire trap.There is no fire issue.They are not bound by the four walls of the earnings per share convention.
Exxon Mobil had a great quarter.It's got Warren Buffet's imprimatur.
BP's been a very strong stock,and I think it can go much higher,Cramer said.*
Ford Motor Company November sales rose 7.2%,versus an Edmunds estimate 0f 3.0%.*
3M was downgraded from hold to sell by JP Morgan.*
IBM provided near real time raw data on the beginning of the Christmas shopping saeson.The growth rate was down by 21%.The size of the shopping cart got smaller.People just weren't buying as much,although more of them were shopping.Mobile sales accounted for 17% of the total,and the iOS platform handled 60-70% of the business versus Android.*
It's expensive to open brick and mortar stores in China,said Shaun Rein,managing director at strategic market consultant CMR China.Ecommerce is more popular there than in the US.Ecommerce will grow 50% a year in China for the next five years.Online merchant Alibaba is a very innovative company.
US companies need to get Chinese managers and get them to react quickly to the Chinese marketplace.A third of purchases are returned in China,and 20% of all sales are from gifting-including gifts for corrupt officials,although there is a crackdown on that.
Mr.Rein is author of the book "The End of Cheap China:Economic and Cultural Trends that Will Disrupt the World."*
PepsiCo(PEP),Tesla Motors(TSLA),Ford Motor Company(F),Exxon Mobil(XOM),International Business Machines(IBM),3M(MMM),Mondalez International(MDLZ), Ltd(ALBCF)

Thursday, November 28, 2013

Just In Time:Countering Beijing's Move

China's recent declaration of a new Air Defence Identification Zone through established international airspace over the East China Sea has been bitterly criticised in the Asia Pacific region and elsewhere;not to mention challenged by US Air Force B-52H bombers.It was critical for the Air Force to quickly assert its right to be in the airspace,analysts point out,lest China's claim to the airspace be legitimised through inaction.*
The bombers were deployed to Guam in August to further America's pivot to the Pacific strategy.What we do day to day with this presence mission is show our ability to fly our airplanes around the Pacific theatre and support whatever contingincies we might be asked to do,said Lieutenant Colonel Scott Mayhan,USAF,commander of the 20th Bomber Squadron based at Barksadale Air Force Base,Louisiana.The continuous bomber presence maintains long term strike capability in theatre,so our national decision makers have assets that they can use sould they ever need to,the commander added.*
In the event,China did not launch fighter aircraft to intercept the unarmed bombers when the Air Force declined to file a flight plan with China under the new zone requirements;nor has Beijing commented to Washington about the incident.This does not mean China will not eventually ramp up its response in defence of its claim.China plays a long haul game,analysts point out,and may just be waiting for a while before taking aggressive action to defend its perceived territory.It will also continue building up its naval and air power beyond what is needed to defend the mainland,a trend that has alarmed the international community for some years now.*
US Secretary of Defence Chuck Hagel said the new zone will not in any way change how the United States conducts miltary operations in the region.We see this development as a destabilising attempt to alter the status quo in the region.This unilateral action increases the risks of misunderstanding and miscalculations.Mr.Hagel's remarks were echoed by new US Ambassador to Japan Caroline Kennedy on Wednesday.*
Vice President Joe Biden will be visiting China next week,as well as US allies Japan and South Korea.He will empahsise that America is and always will be there for its allies in the region,while seeking a new and better way to get along with China,a senior administration official said.

Thursday, November 21, 2013

Financial Fracas:Prince Alwaleed versus Forbes

Saudi Arabian billionaire businessman Prince Alwaleed bin Talal is still engaged in a tussle with Forbes magazine that resulted in his filing a defamation claim in London's High Court on April 30.Appearing on Bloomberg TV's Charlie Rose show Wednesday,the prince said Forbes magazine characterised the Saudi stock market,the Tadawul,as being a casino,whereas it is actually tightly regulated.They got my company's market cap wrong.I didn't even care about that;but to say Saudi Arabia is a casino,that's crossing the red line,Prince Alwaleed complained.
The conflict began even before Forbes published its celebrated Rich List of the world's wealthiest people in March,which the prince heartily disagrees with.He was ranked number 26,with a Forbes estimate of his net worth of 20 billion dollars.His advisors had been intermittently lobbying the publication to boost his ranking,Forbes asserts.In the event,he feels the magazine undervalued his Kingdom Holding firm by 9.6 billion.The Rich List was flawed and innacurate,displaying a bias against Middle East investors and fiancial institutions,he told The Sunday Telegraph.
In a March 25 Forbes article called "Prince Alwaleed and the curious case of Kingdom Holding stock,"it was asserted that the Saudi stock market was subject to manipulation by the wealthy individuals who dominate it,and that King Abdullah had ordered a stop to it.A former Kingdom Holding executive referred to the market as a gambling site,the article reports.
The High Court claim names Forbes publisher Randall Lane,an editor and two journalists,Kerry Dolan and Francine McKenna,a source familiar with the matter said.It contends the Rich List caused harm to his reputation and the finances of his company,Kingdom Holding.
To win a defamation suit,the prince must prove that his reputation in England and Wales suffered serious harm and that Forbes caused Kingdom Holding serious financial loss.London is known as the center of libel tourism,as it is supposedly easier to prove such a claim there than in the US,for example.*
Kingdom Holding consists of large stakes in Apple,Twitter,Newscorp and Citigroup,as well as hotels such as the Savoy in London,plus the Four Seasons and the Plaza in New York,and the George V in Paris.Prince Alwaleed is the largest individual investor in the United States.He said the US economy is great and spectacular.Long term investors have no choice but to look to the United States.It will take decades for China to come even near to the United States.I'm optimistic in general about the world economy and about the United States particularly.America is down in many areas,but is not out,His Royal Highness Prince Alwaleed insisted on Charlie Rose,citing entrepreneurs such as Google and Twitter.

Wednesday, November 13, 2013

DP World Tour Championship,Dubai;Portuguese Visas

The DP World Tour Championship,Dubai is underway in the United Arab Emirates.It is being played at Jumeirah Golf Estates,a luxury resort community.The tournament is the culminating event of the European Tour's Race To Dubai,the overall season championship of the Tour.Henrik Stenson of Sweden is current leader of the Race To Dubai,while Northern Ireland's Rory McIlroy is defending champion of the tournament. McIlroy is currently tied for the first round lead with Spain's Rafa Cabrera-Bello at -3.*
Partners of the European Tour are BMW;Genworth;and Rolex.Sponsors are ClubCar and Titleist.*
Peter Uihlein is the only American participant.*
Meanwhile,the Australasian PGA Tour is holding the Australian Masters at Royal Melbourne.Adam Scott is defending champion,and American Matt Kuchar is also participating.*
NBC Universal's Golf Channel is broadcasting both events.*
Investors who transfer at least 1 million euros to Portugal or create at least 10 jobs are eligible for a Portuguese residence visa.The program is also for those
who buy property in Portugal worth a mimimum of 500,000 euros.Since inception,it has netted 198 million euros of investment.Up to 400 visas will be issued in the program this year;there is currently no limit for 2014.

Wednesday, October 30, 2013

Federal Reserve Notebook:October 31,2013

The Federal Reserve ended its two-day policy meeting on Wednesday,deciding to continue its QE3 stimulus program of buying bonds at a rate of 85 billion dollars a month.Fiscal policy issues were restraining growth,the Fed said,what with sequestration,the government shutdown and the debt ceiling problem hindering recovery.While the overall economy is expanding at a moderate pace,the housing sector slowed somewhat in recent months.*
I'm a human being,admitted economist and former Fed Chairman Alan Greenspan.I can't see farther into the future than anyone else can.I won't apologize for not being Superman.
The average annual post-war increase in stock prices is 7%,so we are at relatively low stock prices.We're just above '07 levels.PE ratios are not hugely up.
The level of construction has gone up significantly,but it's only a third of where it was pre-crisis.
Chairman nominee Janet Yellen was President of the San Francisco Federal Reserve Bank.She was on the Fed Board of Governors.She got all the briefings I did,so she knows what she's doing,Mr.Greenspan noted.
Dr.Greenspan,87,was Fed Chairman from 1987-2006.His new book is "The Map and the Territory:Risk,Human Nature and the Future of Forecasting."He also wrote the pre-crisis book "The Age of Turbulence:Adventures in a New World."*
I think it's really unlikely that Janet Yellen isn't gonna get in,said Randall Kroszner,51,former member of the Fed Board of Governors and now Professor of Economics at the University of Chicago Booth School of Business.She has a good feel for things.She's battle-tested and data-driven.There will be a lot of continuity.She comes from a similar school,always came to the meetings well-briefed.She would talk about the data and the analysis of the data.Many of the others are data-centered.
We now have a much better sense of linkages of firms and markets.At the Fed,we regularly hear from financial services executives and other financial people.Some people are more straightforward about what's going on;some just talk their book,Dr.Kroszner observed.*

Wednesday, October 16, 2013

News Notes:Tesla Motors;Caroline Kennedy

Tesla Motors has been upgraded to outperform by Webush Securities,with a price target of $240.00.Their cost structure in batteries beats the competition,said analyst Craig Irwin.I see them cutting their battery cost in half.If they can do it,they've got a winner,and that's why I'm raising it.*
Ths MSCI Asia Pacific index was up 0.80% in early Thursday trading,responding to President Barack Obama's signing of a bill that resolves the recent budget impasse and government shutdown for the next few months at least,averting the prospect of an unprecedented default.*
The trajectory for the market is onward and upward,said Andrew Economos of JP Morgan Asset Management.What we're doing is buying enough time for markets and economies to take hold.What the emerging markets are thinking is,we've got to reduce our dependence on America.
I think the dollar stays here;I don't think it gets stronger.If you have a weakening currency,you buy exporters;if you have a strong currency,you buy importers.It's a big,level one switch in assets,a re-risking.*
Caroline Kennedy has been unanimously confirmed by the US Senate to be Ambassador to Japan.It is the first time the late President John F. Kennedy's daughter,a sentimental favourite of many Americans,has held a government post.*
Tesla Motors(TSLA)

Wednesday, October 9, 2013

A New Era in US Coast Guard-RCMP Integration

From September 4-6,the Royal Canadian Mounted Police unit in Sault Ste Marie,Ontario and the US Coast Guard station Sault Ste Marie,Michigan conducted joint law enforcement patrols along the St.Marys River,the RCMP said.Several vessels were stopped and boarded by specially trained and designated members of the USCG and RCMP.Shiprider removes the jurisdictional roadblocks that characterise international borders.*
Criminals can no longer exploit jurisdictional weakness at the border,said Commander Ryan Griffen,US Coast Guard.The Shiprider program is another innovative partnership that contributes to enhance our efficiency and provides a better use of our mutual resources.*
Exercises such as the one performed in the past few days demonstrate that removing the maritime barrier leads to successful law enforcement and increased security for all of us,added RCMP Assistant Commissioner Todd Shean.*
The Shiprider program,officially known as the Integrated Cross-Border Maritime Law Enforcement Operations,ICMLEO,was finalised in June after a pilot period from 2005-10.It involves RCMP and USCG members riding on each other's patrol boats and having arrest powers in both countries,principally to seamlessly respond to elusive smugglers of drugs,weapons and humans.It is in effect in the Great Lakes and Vancouver,British Columbia areas.
See also the companion post in my blog Extra Content.

Wednesday, October 2, 2013

The Next Crisis:CEOs Plead With President,Congress

A group of CEOs met with President Barack Obama and Members of Congress Wednesday in an effort to educate them about what would happen if the nation defaults on its debt,a prospect that will be realised on October 17,if Congress doesn't raise the debt ceiling.Among those participating were Lloyd Blankfein of Goldman Sachs and Jamie Dimon of JP Morgan Chase.
They shouldn't use the US failing on its obligation to meet its debt as a cudgel,Mr.Blankfein said.There's no precedent for default.We really haven't seen this before,and I'm not anxious to be part of the process witnessing this.*
The CEOs had a grim feeling following their meeting with Republicans in Congress.Congress is completely out of touch with Wall Street and the general economy,according to Bloomberg TV contributor Dawn Kopecki.They have no idea how bad it would be if the nation defaults on its debt.Mortgage rates will start widening.You're not dealing with business school graduates down in Washington,D.C.,Ms.Kopecki said.
The debt ceiling issue is legislatively separate from the budget impasse that has shuttered the federal government for more than two days now.It is related,howvever,by the fact that some House Republicans intend to use it as a political tactic,just as they are using the government shutdown,regardless of the harm it causes.
The chaos partly reflects the internecine conflict going on within the Republican party between moderates and the far right;and,some say,the leadership style of a president who didn't negotiate enough early on.It's resulted in dysfunction on a grand scale.

David Bowie/Pat Metheny - This Is Not America (Promo Clip)

Wednesday, September 25, 2013

World Alert:Clams and Climate;Terrorist Funding

Clams are giving us information about what's happening in the ocean as a result of climate change.There's a lot of ups and downs in climate in particular places.You have to look at records in their totality,British scientists studying the clams say.Their research may become part of a UN report on climate change.
Clams are sensitive to climate change.They do not like warming temperatures and their reproduction is negatively affected by them,Antarctic research shows.*
The market for male skin care and grooming products in South Korea amounted to a fifth of the products' sales worldwide.It's because of the gangnam style movement and celebrity promotions in the country.The male skin care and grooming market is worth approximately 20 billion dollars globally.*
Al-Qaida affiliate al-Shabab's leader,Mukhtar Abu Zubeyr,or Godane,is blaming the Kenyan government and its Western backers for their deadly attack on Westgate Mall in Nairobi,whom he says have killed Somali women and children.There will be more such attacks,he warned.He is not a charismatic figure,but the 36 year old militant has a lot of power.He fought beside the Taliban when America invaded Afghanistan after the 9-11 attacks.
The charcoal industry in East Africa is possibly being exploited,along with ivory to fund the terrorism.The authorities are seeing increased elephant poaching since 2008 as the price of ivory soared.In the last 40 years,we've seen a steady level of poaching of ivory that has gone out from Kenya thorugh Somalia,and al-Shabab controls the border there,so it's a credible possibilty.*

Wednesday, September 18, 2013

Microsoft's Era of Change

Microsoft is buying Nokia's devices and services unit for 7.1 billion dollars to accelerate the growth of their mobile business.The deal includes 10 years of access to relevant patents.
Nokia CEO Stephen Elop,who formerly worked at Microsoft,will return there-presumably to replace the retiring Steve Ballmer as CEO-and 32,000 other Nokia workers will be transferring to Microsoft as well.*
Ballmer and Microsoft have been laggards,said Matthew McCormick,portfolio manager at Bahl and Gaynor Investment Counsel.Ballmer's departure opens up so many doors.You're gonna see some capital return to shareholders,some new thought and leadership.We think there's gonna be more unlocking of value throughout the tech sector.
They need someone from the outside.They need to make a move.We have high expectations Microsoft is gonna do something big.
The tech sector has the best opportunity for growth going forward,and dividend growth.*
It's about accelerating our share position,to further accelerate our position with Windows phone,Mr.Ballmer said.Our partners in Windows phone have been nothing but enthusiastic.We're certainly focused on being a devices and services company.
Nokia accounts for over 80% of the Windows phone volume today.Its hardware,enterprise and distribution staff is truly world class.It's a big transformation,but that's how you have to be in the tech business,Mr.Ballmer noted.

Wednesday, September 11, 2013

The Geneva Syria Talks:Change and Danger

Secretary of State John Kerry is headed for Geneva,Switzerland for two days of talks with Russian foreign minister Sergei Lavrov.Each side will bring technical experts to assess the proposed turnover of Syria's chemical weapons to international supervision and evaluate the way forward,according to White House spokesman Jay Carney.At the same time,there are discussions at the UN to frame a Security Council resolution on the matter.We are working with Great Britain and France on the resolution.
The process needs to be credible and verifiable.After 20 years,Syria suddenly acknowledges it has chemical weapons and says it will sign the convention against their use.This is significant.
The president never considered canceling his Tuesday night speech.It is still very important for the president to speak to the American people.We will continue to have this discussion in the days ahead.This is far too complex an issue to reduce to a single phrase or words.
Russia has made this proposal and is engaging with other members of the UN Security Council.Russia's prestige is on the line.
There's no question very significant changes have taken place from the recent past.We go into this with eyes wide open.The goal of the Geneva meeting is to test the seriousness of the Russian proposal,Mr.Carney indicated.
Congressman Peter King,R-New York,said I have multiple concerns about Russia.We have now made Russia a major player in the Middle East.They will have influence over the region,and we will be almost indebted to them.Iran is actually more of a threat than Syria.
We've pretty much given immmunity to Assad.We should be extremely sceptical,extremely wary and not make any more concessions.We have to take a tough line with Russia.Russian President Vladimir Putin strengthens Syria and Iran's position in the Middle East.Don't give the benefit of the doubt to Putin.He wants to reestablish Russia and assert himself in a powerful way,Congressman King warned.
Mr.Putin is being seen as a man who does business with Syria and Iran,obsessively cultivating a Cold War mentality of being the counterweight to the influence of the United States.The Russians are part of the problem in Syria;they are not credibly part of the solution,said Senator John Cornyn,R-Texas.

Wednesday, September 4, 2013

Syria:Bigger By the Day

A number of Obama administration officials continued their lobbying efforts for military action against Syria on Wednesday,fielding wide-ranging questions from sometimes irate Members of Congress.The Senate Committee on Foreign Relations did vote to approve the mission 10-7 after a classified briefing.
Polls show the American public largely opposed to the mission.The story is huge and growing,taking up the lion's share of cable news broadcasts.Some are calling for the President to address the American people on Syria from the Oval Office in prime time.
*We know that Assad will read our silence as a sign he can use his weapons with impunity.Iran and North Korea are listening for our silence.This is a vote for accountablity,Secretary of State John Kerry told the House Foreign Affairs Committee.Degrading his chemical weapons will have an impact on the battlefield.There will be downstream impacts.
These weapons pose a grave threat to our allies Israel,Jordan,Saudi Arabia and Iraq.North Korea maintains a massive chemical weapons stockpile that threatens 20,000 US troops on the border.
There have been 60-100 officer and enlisted defections from the Assad regime in the last day or so.There are serious questions in the elite of Syria that are asking if Assad has gone too far.
Currently in the region,a number of countries have offered to be part of the military action-more countries than our military thinks we need.France and others in the region are prepared to be part of the operation with us.
Arab countries have offered to bear the cost and assist us.They've been quite significant offers-up to the whole cost,if the US does what it's done in the past.
*This will not be a pinprick;it will be a strike that degrades his capability,added Defense Secretary Chuck Hagel.We have spent days and days going over every option and contingency,such as embassy security and collateral damage.
Allies will provide basing and overflight rights,noted General Martin Dempsey,Chairman of the Joint Chiefs of Staff.The focus and purpose will give us the best chance of limiting it.I can never discount the possibility of escalation,but we've kept it as low as possible.
Congressman Eliot Engel,D-New York,an expert on Syria,is concerned about the message we send to Iran as they pursue a dangerous nuclear capability.His colleague Dutch Ruppersberger,D-Maryland,pointed out that Iraqi dictator Saddam Hussein used chemical weapons against Iran and the Kurds in the 1980s.Unchallenged,he went on to invade Kuwait in 1990.
*The whole Senate seems likely to approve the mission at this point,but the House of Representatives is an open question.It could be that the President will have to cast the deciding vote himself,as it were.

Wednesday, August 28, 2013

Syria:Voices and Visions

US and French forces seem almost certain to attack Syria for its alleged use of chemical weapons within a short period of time.The UK is waffling after expressing initial support,delaying a decision until the UN inspectors have issued a report on chemical weapons use in Syria and a Parliamentary debate next week.NATO Secretary General Anders Fogh Rasmussen expressed support for military action.The US is prepared to go it alone if necessary.*There would be cruise missiles launched from four or five US destroyers in the region,and perhaps from submarines;and possibly long range bombers would be utilised as well,along with fighter aircraft to suppress anti-aircraft systems and strike other targets with precision munitions.Air bases in Turkey and Italy could be used.The target sets would likely be Syrian command and control centres,as well as their naval and air forces in order to hinder a Syrian response.The operation would perhaps take a day or two.*CNBC's Jim Cramer said I'm at a loss.How do I game Syria?Collectively,the market doesn't know what it's doing.We're all searching for analogies;we don't really have analogs.We told Assad what the schedule is.I don't think anyone really knows much.*Art Cashin,Director of NYSE Floor Operations for UBS,said you're gonna see this as pretty broad-based;watch both gold and oil.We're playing a game of headline roulette.The difficulty is,once events begin to take place,they can accelerate.If they take it to the UN,there could be a sigh of relief rally.*General Anthony Zinni,US Marine Corps retired,former CENTCOM commander,said there has to be a long term strategy.Where do we go in the long term if he continues these unacceptable acts? This is not simply a matter of regime removal.We thought that in Iraq.This is a mess.There is a religious war underneath.If we attack now,we have to be prepared to follow up.A military commander,if he's prudent,plans against all possibilities.*This is a regional conflict.We have a lot of work to build international support.It's not there now,and that concerns me greatly,General Zinni confided.*President Barack Obama said the Assad regime will have received a pretty strong signal it better not do it again.You are not only breaking international norms and standards of decency,you are also having an affect on US national interests,and it needs to stop.

Wednesday, August 21, 2013

Publicis-Omnicom:the Meaning of the Merger

The merger of Publicis and Omnicom is a big,bold move,strategically counterculture and structurally a bit clunky,said Sir Martin Sorrell,CEO of advertising and public relations firm WPP Group.They have to jump regualtory hurdles.There will be impacts on clients and their people.We're already seeing a certain degree of disruption,which we will seek to capitalise on.*There will be two large companies-ourselves and Publicis Omnicom Group.It makes you a little more energetic.We've done five or six deals in Brazil,in the UK,and two in Asia.I wanted to signal to our people that we want to be a little more energetic.We have 165,000 people in 110 countries.Size for size's sake,I'm not sure there's anything in that.*Our clients probably lowered their earnings estimates.They're getting there by cost-cutting,small leaps-a focus on cost,finance and procurement that shows in the lack of top line growth.It can't continue forever.*Western Europe,the UK and Germany are stronger than people realise.July surprised us a little on the upside,Sir Martin Sorrel noted.

Wednesday, August 14, 2013

Regional Banking Profile:National Bank of Kuwait

National Bank of Kuwait has been named Best Bank in the Middle East 2013 by Global Finance magazine,as well as one of the world's 50 safest banks.Founded in 1952,the bank says it has focused on developing long term growth and a stable strategy.Our consistency in delivering strong results is a testimony to our strong financial position and focus on core banking business despite a challenging operating environment,said NBK group CEO Ibrahim Dabdoub.*NBK has 173 branches worldwide in 16 countries.In Kuwait itself,there are 64 branches,while Egypt has 41 branches,and Turkey has 20.The Shanghai and Singapore branches represent NBK in East Asia;and branches in New York,Paris and London fly the flag in the West.*NBK gets high credit ratings from all three major ratings agencies.Standard&Poor's gives it an A+;Fitch gives it a AA-;and Moody's assigns it an Aa3.They praise NBK for financial strength,strong franchise,technological sophistication,and stable and capable management team,the bank points out.*In 2012,NBK reported total assets of 58.398 billion dollars.Assets under management were 10.016 billion,and market cap was 14.585 billion.Net profit has risen steadily for the five year period,closing at 1.085 billion in 2012.*Part of NBK's strategy is diversifying its revenue stream by entering the field of Islamic banking.This was realised when it upped its stake in Boubyan Bank to 58.4%,effectively converting it to a subsidiary.Moody's hailed this move as providing a foothold to the growing Islamic banking sector,defending the bank against any market share attrition that results from a shift in customer preference towards Islamic banking.*National Bank of Kuwait S.A.K.(Kuwait Stock Exchange:NBK)

Wednesday, August 7, 2013

News Notes August 2013

The US is accelerating;Europe is improving,said Tom Lee,chief US equity strategist at JP Morgan.There's a case for higher earnings.If they start thinking rates are going up,hopefully the money goes into equities.Seek companies with topline growth,the cyclicals.I think Europe is tracking towards an acceleration.I actually think you would be better off buying US blue chips exposed to Europe,but also to US private expansion.*AIG is reinstating a 0.10 a share dividend and a 1.0 billion dollar buyback.Its Q2 earnings were 1.12 a share versus an 0.85 estimate,while revenue was 8.35 billion dollars versus an 8.62 billion estimate.*If you really want to be contarian,buy European stocks,said Nick Colas of Convergex Group.There are better opportunities around the world,than there are here in the US.*Japan is joining negotiations to form the Trans-Pacific Patnership.The TPP will be the world's largest free trade zone,also including the US,Canada,Mexico,Peru,Chile,Malaysia,Vietnam,Singapore,Brunei,Australia and New Zealand.Besides free trade,the TPP will produce a common framework for dealing with the services trade;foreign investment;government procurement;domestic regulations;and intellectual property.It is expected to have a huge impact on both global trade and investment patterns.

Wednesday, July 31, 2013

Voices and Trends in International Business-July 31,2013

Moving boxes and branded food boxes are in demand,said John Faraci,CEO of International Paper.In China,our export customers are weak.Our domestic business there is strong as the middle class expands.*What we really look for in a company is investor interest and the overall quality of the company,said Candace Browning,research director at Bank of America-Merrill Lynch.Investors jump from one theme to another fairly quickly.The current themes are 1.the move from fixed income to equities 2.Europe is coming back.So much of the innovation we produce is from immigrants.We are innovation nation,and we don't talk about it enough or look for it enough in research.*I'm raising my price target on Amazon,said CNBC analyst Jim Cramer.They're talking world domination.I swear by Amazon.I love the product;I want to own the stock.If you want to buy Spain,you have to spend some money-referring to the fact that Amazon missed its earnings estimate on rising expenses,the expense of broadening their overseas business.*Canada's Hudson's Bay Company is now buying American luxury retailer Saks,Inc for about 2.4 billion dollars.They had previously purchased upscale US department store chain Lord&Taylor.*Peugeot,the second largest automaker in Europe,reported a narrower than expected loss on cost cuts.*International Paper(IP);Amazon Inc(AMZN);Hudson's Bay Company(TSX:HUD)

Wednesday, July 24, 2013

Asset Management:Inflows and Strategy

We had 8 billion of equity inflows in Q2,said Larry Fink,CEO of BlackRock,the world's largest asset manager.I do think for those investors overweight in bonds,I recommend moving some of it into equities,looking at your bond portfolio and moving it from your core strategy into unconstrained strategies.Expect to see tens of billions move to unconstrained bond funds. As more and more moves into etfs,we are gonna be lowering our fees.As of yesterday,we saw 6 billion of inflows into etfs this month.The market has come a long ways.We've seen some very good earnings,but I would never be surprised to see a 5% correction.I look at it as a buying opportunity. We own 5% of PepsiCo.We think Indra Nooyi is doing a very good job.We are very happy with her imaginative team and strategy. I think the Fed will move to a change of policy in the next six months.We should all be prepared.For investors focused on the long term,whether it's in September or December isn't important.We're gonna see a shrinkage of Treasury borrowing for the next five years,with as high as a 5% ten year by 2015,Larry Fink projected. PepsiCo(PEP),BlackRock(BLK)

Meeting Arctic missions

Meeting Arctic missions

Wednesday, July 17, 2013

News Notes:Citi's Internet Calls;Best Investment Banks 2013

The IMF has reduced its estimate of world growth to 3.1%,down from 3.3% in April.For 2014,it sees China growth at 8.2% and India at 6.2%. Citigroup has initiated coverage of major Internet stocks.LinkedIn,Netflix and Facebook are rated neutral. Facebook is a relatively young company going through a transition,said Citi analyst Mark May.Amazon,Google,eBay and AOL are buys.Yelp is a sell. Key Internet themes are the shift from PCs to mobile;the emergence of adtech;and the proliferation of data. The US-China Strategic and Economic Dialogue has begun,led by Secretary of State John Kerry.BMW sees China as its top 2013 market,based on its growth in small cities. GE Oil and Gas is establishing its global headquarters in London. Global Finance magazine has named its Best Investment Banks 2013.Global winners include J.P.Morgan,Best Investment Bank;Bank of America Merrill Lynch,Best in Emerging Markets;Qatar National Bank,Best in Frontier Markets;and Goldman Sachs,Best M&A Bank. Global Finance said J.P.Morgan grew market share across the board because of its loyal client base;a long term startegy of embracing regulatory reform;a legendary corporate lending legacy;and the integration of equity underwriting talent from Bear Stearns,which it acquired in 2008. It made a world-leading 465 billion dollars for its clients through 2,164 bond deals;and earned more than 5.6 billion in investment banking fees,the best in class. JP Morgan Chase(JPM),Amazon(AMZN),Goldman Sachs(GS)

Wednesday, July 10, 2013

Voices and Trends in Global Business,July 2013

Apple has been slowing iPhone production,said Brian Blair,a senior research analyst at Wedge Partners.We believe there's been a 20% haircut to iPhone production.Most of the component suppliers will stay the same,despite the cuts. Apple's been cutting because they've been watching market leader Samsung,which hasn't been selling as many smart phones as they thought they would.The market for high end smart phones is slowing,and Apple's been responding to that. The IMF has cut its annualised global growth forecast from 3.3% in April to 3.1% in July.Their forecasts for commodity prices,as well as Russian,Brazilian and Spanish growth,were also lowered.The cause of the revision is the downturn in emerging markets and the lengthy Euro-zone recession. Hong Kong property agents marched against government price curbs over the weekend.Up to 5500 agents demonstrated,appalled at the fact that Q2 real estate transactions were at a two decade low because of new taxes and marketing restrictions.About a third of estate agents stand to lose their jobs in consequence. The government measures are making things worse,according to Michael Kilbaner of Jones Lang Lasalle.The rise in property prices both reflects and impacts the strength of the economy.A lot of the movement is really in tier one and upper echelon tier two property.A two bedroom flat in Hong Kong goes for a half million US dollars,with a similar price in Beijing.

Police: Brothers From India Left NJ Tour To Stay In US « CBS New York

Police: Brothers From India Left NJ Tour To Stay In US « CBS New York

Wednesday, July 3, 2013

The Goldman Sachs Playbook

The market thought the falling price of gold was an avalanche,but that's not necessarily the case,said Goldman Sachs CEO Lloyd Blankfein.As confidence in the currencies and the economy grows,it's not advantageous to invest in gold,so we had a sell-off.
One of the things we'e looking for is the infrastructure and commitment to deliver those services and elements of our 10,000 Small Businesses program.In New Orleans,we have a great community college partner in Delgado.It's a mini-MBA,with mentors and access to small capital at the end.
For example,we have a small tool business and a caterer.They don't have the tools for analysing their business and haven't been to accounting schools.They dedicate their weekends to the program,learning analysis,negotiation and business planning.Most of these people end up hiring new workers because of the program.
It's market sentiment in a lot of cases.We've chewed through a lot of problems.I'm in the risk management business,but we're muddling through,and I think we're in a good part of the cycle.The trauma was big.
It's a confidence thing.The penalty for making a mistake is very great at this point.People aren't gonna take risks.We will get there,but I think sentiment and people's feelings really matter.
I'm not sure we're in the right place with regulation.We shouldn't be burdening some of these small banks.In industries like our own,growth is the correlant for our success-and it's global growth.
The US is still the best place to invest.If you want to invest in the most valuable thing-your career-the US is the best place to do that.
The second half playbook is industrials.They do well in this environment.When you listen to such as Boeing's Jim McNerney,you feel confident.This is their time,Goldman CEO Lloyd Blankfein observed.
Newsletter publisher Dennis Gartman  of "The Gartman Letter" has just turned bullish on gold,citing the overwhelmingly negative sentiment against it as a signal to buy the precious metal..
Goldman Sachs(GS),Boeing(BA)

Wednesday, June 26, 2013

Bond Market Impact:The Implications of Rising Rates

The recent bond sell-off and concomittant rise in interest rates present both challenges and opportunities.
I think we're gonna see a slowing in housing,said Bliss Morris,CEO of First Financial Network.Rising rates could certainly affect newer borrowers.Those still involved in renting could have some trouble buying a home.
California is doing better,the sand states of Arizona,Florida and Nevada,but secondary and tertiary markets could be in trouble.Our community banks are suffering from regulations and have not totally sold off their non-performing assests.
The next opportunities could be in the Euro-zone,with its many foreclosed properties.I don't think they've totally stabilised.They face some challenges with cultural and linguistic differences.
We do think the Treasury market offers value here,said Mark Kiesel,managing director and portfolio manager at PIMCO.We see a much weaker economy,and so we see value.We just don't see the economy generating jobs growth.There's a lot of consumer debt and unemployment is structurally high.
We're going through an unwinding of risk,creating volatility,but over time,the Fed will take another point of view and rates will go back down,Mr.Kiesel projected.
Mark Kiesel was Morningstar Associate's 2012 Fixed Income Manager of the Year.

Wednesday, June 19, 2013

Private Equity:Strategy and Focus

Our strategy is to find sort of the treasures below the surface,said J.Michael Chu,co-founder and Managing Director at private equity firm Catterton Partners.You're able to get higher growth through the recession.
All of our businesses are up very strongly.Our strategy is to identify those businesses that are well below the surface.We like businesses that are driven by value and luxury.
Outback Steakhouse started with great leadership.It's the leader in its casual steak category.The vast majority of our investments tend to be new,emerging businesses.
We don't really use a lot of leverage.We tend to over-equitise them.We never want the balance sheet to impede the business strategy.
Catterton Partners is a Connecticut-based private equity firm with an exclusive focus on providing equity capital to small and mid-market consumer companies in North America.With its combination of investment capital,strategic and operational skills,and industry network,it has become the most sought after company in its specialty.
Among Catterton's investments are Outback Steakhouse;Restoration Hardware;Baja Fresh;Cheddar's;Kettle Brand Potato Chips;and Sweet Leaf Iced Tea.

Wednesday, June 12, 2013

Cramer,China and the End of the World

I think it's gotten ahead of the Fed,said CNBC's Jim Cramer.The ten year Treasury continues to go up in rates.There are people who are making a very big end of the world case.The world is fretting about this.We just have to let it happen and let the end of the worlders play out.
The wheels are coming off China.Wages are going up.You're gonna hear the Communists talking about workers' rights.Workers' rights in Communist China?
People are saying this is the big unraveling.I respect the macro,but in the end,I am stuck with the micro,what with GM doing better than expected,as well as General Mills and PepsiCo.
They were looking at the big things at the US-China talks in California over the weekend,according to Pauline Loong,Managing Director at Asia Analytica.The good news is,there was no news.It was not an official summit.It was about what was on the chairs,not what was on the table.It was off the record.President Xi Jinping speaks English.
Right now,it seems the two big economies have decided it's in their interests to get along.Asian countries aren't in the untenable position of having to choose between them.
The eight hours of talks between President Barack Obama and Mr.Xi were described as having been historic and constructive.They took place at the Sunnylands Estate in Rancho Mirage,California.
The success of the talks was in spite of the fact that US defence contractor Northrop Grumman said hacking attempts are increasing at an alarming rate.Chinese hackers have breached defence contractors' systems or observed their activities with orbiting telescopes.
China has reportedly hacked into major projects such as the Advanced Patriot Missile;Aegis;V-22 Osprey;and Global Hawk.More than two dozen weapon systems have been compromised,but China has consistently denied it is responsible for such hacking.
Northrop Grumman(NOC),General Motors(GM),General Mills(GIS),PepsiCo(PEP)                                                            

Wednesday, June 5, 2013

Issues in Money Management

BlackRock is the world's largest money manager,owning the iShares exchange traded funds.Consumer confidence is up,but manufacturing is down,BlackRock CEO Larry Fink noted.Private sector deleveraging is still going on.
I actually believe we can't find enough good investments.Bonds are no longer providing sufficient return.
Emerging markets are probably today relatively cheap compared to where they were a few years ago.
We need a mandatory savings policy in the US.Retirement is an even bigger issue than tax policy.We need to educate Americans about the longevity of life.
I'm not worried about retirees.I'm worried about the young people who are not putting money away for retirement.We have men and women who should have more choice-maybe with the mandatory savings plan as a backup.
Everything that we face today is more short-termism.Most market partcipants make money on the velocity of money,on quick trades.It's the 24/7 news cycle,the annual election of board members.Some form of elongation is needed.
One of the big issues is confidence.We're sitting with a trillion dollars in money market funds by corporations.
Five years is the average term of CEOs.You see more short term changes in their behaviour.
BlackRock is the largest shareholder of JP Morgan Chase,and is among the top three shareholders of many other firms.Less pressure on board members means better outcomes,Mr.Fink suggested.

Wednesday, May 29, 2013

Asia's Investment Surge;Goldman Sells China Stake

The mood is very upbeat,said Nick Good,Head of Strategy and Business Development Asia Pacific for BlackRock,attending the CFA Institute Annual Conference in Singapore.Asians believe in Asia.Seventy percent or more of any given portfolio is invested in Asia,and 50% of capital markets growth will take place in Asia.
We're seeing the rise of the Asian investor.Wealth in China has increased tenfold.Asians need to invest for the long term,and that dynamic will inform the growth of the region.They are looking for bond and income funds that meet their needs.
We are developing funds that cater to that market and educating about long term investing.We try and take a broad view of the markets,providing both active and index funds.You're seeing an emphasis on income funds.
Goldman Sachs says it is committed to China,despite its recent sale of a minority stake in the Industrial and Commercial Bank of China.Goldman unloaded its seven year investment in ICBC for 1.1 billion dollars.Macquarie Capital Securities Ltd estimates Goldman made about 12 billion dollars in dividends and sale proceeds on its 2.58 billion investment in ICBC.Many banks are selling such holdings to cover the new,more stringent Basel III capital requirements.
The world just went through a big trauma,a credit crisis,said CEO Lloyd Blankfein.Not all the fixes work.Sometimes the fixes need fixes.
BlackRock(BLK),Goldman Sachs(GS)

Wednesday, May 22, 2013

Citigroup:Growth and Reallocation

Citigroup is looking to double or triple the number of branches in China over the next few years.We think China will grow about 7%,transitioning from exports to a domestic-led economy,said Citigroup CEO Michael Corbat.That transition seems to be going well.
I'm excited to go to Japan.Their officials and executives are quite excited.It's gonna take some time to play out.They've got to try Abenomics to reflate the economy.
Japan's Prime Minister Shinzo Abe is jump-starting the economy through monetary easing and asset purchases.
We've identified 21 countries where we can get more out of the resources we have there.We'll move those resources to where we can get more out of them.It's a rebalancing,shifting them to places our customers and clients want to grow.The emerging markets, in particular the Asia Pacific,has been a big recipient of those shifted resources,Mr.Corbat noted.
Brazilian bank Itau has purchased Citigroup's Brazilian credit card unit for 1.37 billion dollars.

Wednesday, May 15, 2013

Old and New:The Future of Media

The future of media is both bright and diverse,said Frank A. Bennack,Jr.,outgoing Hearst Corporation CEO.Print will be around because of their role in gathering news.Their role will be around for a long time to come.
There's been a significant revenue shift to new media.TV and newspapers are still there,however.We have about 300 worldwide magazines.They will continue in their present form,but also will migrate to new media.We're very strong in beauty and fashion with Elle magazine.
Hearst Corporation is a privately held multinational media conglomerate,founded by the late William Randolph Hearst.It owns fifteen daily newspapers such as The San Francisco Chronicle and The Houston Chronicle,as well as 35 weekly papers.Besides Elle,its major magazine titles include Cosmopolitan;Seventeen;Redbook;Popular Mechanics;Woman's Day;Harper's Bazaar;and Road and Track.
Hearst is part owner of the ESPN,A and E,and Lifetime cable networks.It owns the iCrossing digital marketing firm,with offices in 18 countries;29 TV stations;and 2 radio stations in major markets.Altogether,it owns some 200 businesses in 100 countries worldwide.
On June 1,Hearst President and COO Steven A. Swartz will succeed Mr.Bennack as CEO.

Wednesday, May 8, 2013

Portfolio Management:The Need For Income Now

We've transitioned to an emergency need for income,said Rick Rieder,Chief Investment Officer of Fundamental Fixed Income at BlackRock.Rates are gonna be low for a long time.To get any real income,you have to take risk at levels that are uncomfortable.
Central banks are crowding out investments at a record level.You create a portfolio rebalancing act that is profound.We live in a delevering world.You'll create bubbles like we had in prior decades if it goes on for too long.
Maybe there will be no tapering of Fed policy until 2014.Because you're distorting the interest rates so low and lengthening the portfolio,you're creating potential risk in the fixed income portfolio higher than in equities.Tactical short term,we've taken some interest rate exposure;longer term,loans and structured products without a lot of interest rate risks,such as CMBS,collateralised mortgaged-backed securities.
We think the growth of the real estate business has some real durability to it.People underestimate what a big deal it is.You have an environment of liquidity today.It's part of what will keep the real estate market in strong shape.
The delevering in Europe is gonna go on for years.
It's very hard to generate yield when the 10 year Treasury is at 1.50%,Mr.Rieder pointed out.Central bank policies are causing a haircut for investors,PIMCO co-CIO Bill Gross agreed.
People are excited about the equity market,yet anxious about the artificiality of central bank assistance,his colleague Mohamed El-Erian added.If these prices are not validated by data,they will look very artificial.

Wednesday, May 1, 2013

Trust Company Distrusts the Market

This is a financially engineered market,said Michael Crofton,President and CEO of The Philadelphia Trust Company,engineered by central banks.Bonds and commodities are telling us that stocks are too high,and there could be a crash.
The pullback will come from a macro-event that will surprise everyone.The Federal Reserve won't be able to do much more to help.Those high points of similar markets in the past coincided with the peak of financial engineering.
We rotated out of consumer staples in March and into underperforming energy and technology.The rise of staples had been unsustainable.You just keep rotating,and when the music stops,you'd better hope you're sitting down.
The Philadelphia Trust is an independent private bank serving affluent investors and institutions.The company says it brings old-fashioned values such as attention and discretion into the post-modern world.It offers a full range of services,from custody and trading to income distribution,CDs and scheduled client reviews.
In equity investing,the Trust strictly adheres to the growth at a reasonable price discipline.
On Wednesday,the Federal Reserve said it would continue its quantitative easing policy of bond-buying to keep interest rates low,in effect driving investors more into equities.

Wednesday, April 24, 2013

Afghanistan,Syria and Iran:Intelligence Perpsectives

Afghanistan is a very mixed bag,said Lieutenant General James R. Clapper,Jr.,US Air Force retired,Director of National Intelligence.The upcoming election there is gonna be a very good indicator of where these loyalties lie,General Clapper told the Senate Armed Forces Committee April 18.It's very much a tribal country,somewhat artificial in terms of what we think of as a country.
Iran does worry about a significant restiveness in the street that would threaten the regime.Perhaps this will play out in the forthcoming Iranian election if they put forth a candidate not favoured by the Supreme Leader,Ayatollah Khamenei.
I believe there are lots of weapons in Syria.I am not convinced that supplying more weapons to the opposition will have an impact on cost/benefit.Even a partial no-fly zone is not a trivial undertaking.They have a significant anti-air capability,depending on who is operating it.
Syria has had a huge impact on the neighbouring countries,the spillover of the fighting into Jordan and Lebanon.Iran will continue to support President Bashar Al-Assad.His fall would be a huge strategic loss to Iran.They are training people in Iran and taking them back to Syria.
The jihadis in the opposition,most notably al Nusra,have recently pledged their allegiance to al Qaeda.They are present in 13 of 14 provinces,where they provide humanitarian aid and Islamic courts.
Syria is a very complex situation.The magnet it has turned into for foreign fighters,including 400 Europeans-it is black and white and several shades of grey in between.
General Clapper,72,is a Vietnam veteran and served in the US Air Force from 1963-95.He was Undersecretary of Defense for Intelligence from 2007-10,and was appointed Director of National Intelligence,the US intelligence chief,in 2011.Before the 9-11 attacks,this role belonged to the CIA director.

Wednesday, April 17, 2013

Prologis Industrial REIT Sees Good Signs

Prologis is the world's largest industrial real estate investment trust.CEO Hamid Moghadam cites FedEx,UPS,Amazon and Wal-Mart as being among the warehouse firm's largest customers.We think economic growth and the lack of construction is gonna give us pricing power,Mr.Moghadam said.Ecommerce is probably the biggest renter and housing the least,and those in the middle are also growing.
Housing affects our smaller buildings.Under 100,000 square feet,we have about 10% vacancy.That's finally happening this year.
Overseas,we're seeing really good demand on domestic consumption.Japan is doing well because it's changing from an export to a domestic import economy.Spain,Italy and the UK are going strong.France is the weakest.President Hollande's policies have frightened people,and there's a lot of flight capital.
If occupancies drop to the 90s or below as in 2009,I get worried.We're a conservative bunch and we'd like to see it higher,Mr.Moghadam admitted.
UBS is to increase its Asia corporate advisory head count by 10% on the region's growth forecast.
Germany's industrial output was up in February on economic recovery.
Alcoa's earnings topped estimates on growing demand for aircraft.
Prologis(PLD),UBS AG(UBS),Alcoa Inc(AA)

Wednesday, April 10, 2013

Western Australia Drawing Increased Interest

Exxon Mobil and BHP Billiton plan to develop a vast natural gas field about 300 kilometers off the coast of Western Australia using a huge gas processing vessel for liquefied natural gas production.The floating plant would produce 6.7 million metric tonnes of LNG a year beginning in 2020-21,the companies said in a filing with Australia's environment department.
The Scarborough field is located in the Carnarvon Basin.The vessel proposed to operate there would employ Floating LNG technology,or FLNG.It is used when gas fields are too small or remote to make onshore facilities practicable.
In a related development,the US State Department has opened a commercial office in its Perth consulate.The office will match an expected surge of US companies looking to invest in Western Australia with local firms which can meet their needs as resource extraction activities ramp up in response to demand from emerging Asia.
Canadian real estate investment trust Brookfield Office Properties lists Perth as a high growth market,ahead of Boston and Vancouver.The REIT owns Brookfield Place in Perth and has a 50% interest in two other office buildings on St Georges Terrace.
Exxon Mobil(XOM),BHP Billiton Ltd(BHP),Brookfield Office Properties(BPO)

Wednesday, April 3, 2013

Voices and Trends in Wealth Management

We favour US equities to the emerging markets,said Kelvin Tay,Regional CIO for the Southern Asia Pacific at UBS Wealth Management.We like high yield corporate debt.We don't see a huge amount of risk.We're still positive on it at this stage,with an overweight on it.
Cyprus was a reminder that structural issues in Europe are far from over.We need to see that US growth is sustainable to the 3% GDP target that we have.We also need to see that China growth is achievable.
With strong US figures,the emerging markets will struggle for attention.Export numbers in Asia are sharply lower on sequestration in the US.
South Korean exports were worse than expected on the strong US dollar.Goldman Sachs says investors are buying Treasuries at fastest clip since 2009.
Global stocks have posted the best return of any investments for another quarter,but Stephen Wood,PhD of Russell Investments thinks it is unlikely that Q2 results will repeat the first quarter.There's a tug of war.This has been a very broad-based rally,but it also has a defensive character,too.Dr.Wood recommends a globally diversified,multi-asset portfolio constructed in a case-by-case,security-by-security way.
Carter Worth,Chief Market Technician at Oppenheimer,believes several stocks are fully priced,such as Johnson and Johnson and The Traveler's Companies.When does a stock become dangerous?We have a four-year bull market that has taken us to all-time highs.Markets don't normally go up 40-80%.Only four times has that happened.Go to cash,Mr.Worth advised.
Johnson and Johnson(JNJ),The Traveler's Companies,Inc(TRV)

Wednesday, March 27, 2013

Voices and Trends in European Business

Northern Europe is gonna do just fine because the US will have strong growth,and they will do well off that,according to Joseph McAlinden,Chief Investment Officer at Catalpa Capital.People are gonna feel wealthier and spend,which is good for the world economy.The US economy,the stock market is the buy on the gold seam right now.
French consumer confidence fell in March on the stalled economy.
US durable goods orders were up more than forecast.US home values are at their highest level since 2007.
An EU report says the employment outlook is very bleak across Europe.
UK banks must raise 38 billion dollars to make up for a capital shortfall,the Bank of England says.
London remains the world's top financial centre,says the Global Financial Centres Index.
VTB has the most exposure to Cyprus of the Russian banks,according to Standard and Poor's.The EU says the Cypriot bank tax is not a template for future bailouts.
Credit Suisse is to buy Morgan Stanley's Europe wealth management business.Erricson is in talks to buy Microsoft's IPTV business.
The euro has traded below 1.28 for the first time since November.
German plant and machine orders were unchanged in February on weak Euro-zone demand.
Credit Suisse(CS),Microsoft(MSFT),Morgan Stanley(MS),Erricson(ERIC)

Wednesday, March 20, 2013

Global and Regional Best Internet Banks

Global Finance Magazine has named the World's Best Internet Banks 2012,round two.They are forging leadership in mobile banking services,online payments,cash management,social media and Web design and integration,as well as in attracting new customers in growing markets,strengthening ties with existing clients and improving cyber security.
The winning banks are also quickly responding to customer demand for better service,state-of-the-art functionality and personalised service,testing new Internet tools with clients and analysing user experience to hone their product,said Infosys Technologies' Balaji Yellavalli.
The 220 bank entrants were evaluated by a judging panel from Infosys.
Global Winners
Best Overall Internet Bank:Citi
Best Corporate/Institutional Internet Bank:Citi
Best Consumer Internet Bank:Standard Chartered
Regional Winners
Best Corporate/Institutional Internet Banks
North America:Wells Fargo
Central and Eastern Europe:Bank Pekao
Latin America:Citi
Asia Pacific:Citi
Middle East/Africa:Citi
Best Consumer Internet Banks
North America:Scotiabank
Central and Eastern Europe:OTP Bank
Latin America:Scotiabank
Asia Pacific:Standard Chartered
Middle East/Africa:Standard Chartered
Infosys Ltd(INFY),Scotiabank(BNS),Citigroup(C),Standard Chartered PLC(STAN:London)

Thursday, March 14, 2013

Global and Domestic Concerns:Inside US Strategic Command

A rare look into the world of  the US strategic forces was given in Washington recently.
Any future arms reductions with Russia should be bilateral and verifiable,said General Robert Kehler,US Air Force,Commander,US Strategic Command at a Senate Armed Forces Committee hearing at the Capitol on Monday.We have been on a successful and deliberate path with them.It also provides transparency and engagement with Russia that is extremely valuable.
I would not go below the new Strategic Arms Reduction Treaty levels unilaterally.Working with the Russians has been a consistent theme.
We do not believe officially they are compliant with the Conventional Forces in Europe agreement,but are with the new START agreement.The Russians are very careful about their Command and Control.This is why we would like more transparency with China on a military-to-military basis.
I believe China is not seeking numeric parity with us or Russia.
With North Korea,we're looking to see if adjustments need to be made.Deterrence begins on the Peninsula from in-theater forces and extends all the way back to STRATCOM.Today we can make all the options available to the President of the United States.We are looking if we are on the right pathway for the future.I believe it's difficult to weigh their intentions.
It's about readiness for us.We participate with US Pacific Command exercises,demonstrating the credibility of our capabilities,and I believe that's important.We agree forcefully with the need to modernise and sustain the nuclear deterrent.
In some cases,conventional forces can produce a similar result.Strong conventional forces can contribute to deterrence,but nuclear deterrence continues to occupy a unique place.They are complementary.Increases in our conventional capabilities has made a difference,narrowing the role of our nuclear deterrence.
I believe our nuclear deterrent force is safe and secure and under the control of POTUS.It meets our needs today,but that will vary as the world situation changes.
All of this is sensitive to the budget decisions.There will be impacts across the board;we just can't predict what until we see the actual budget.The most troubling impact will be the impact on our civilian work force and readiness accounts.It is happening now;we will see the effects in coming months.
Today the civilians are senior leaders,integral to everything we do.They have expertise and experience we do not have in the uniformed force-highly technical.My concern begins with unintentional and intangible effects on our work force.People with college degrees are wondering if this is for them,General Kehler observed.

Wednesday, March 6, 2013

Cosmetics and the Luxury Retail Market

Spain,Italy and Greece are not in any healthy condition,according to William Lauder,Executive Chairman of cosmetics titan the Estee Lauder Companies.Central Europe is OK,not bad.Eastern Europe is better still.Germany,France and the Benelux are pretty solid.
Asia's our fastest growing market;China is the fastest in Asia.Chinese consumers are shopping both at home and abroad.There's still an awful lot of growth going on there.We're building for the long term.
The female consumer's behaviour is influenced by her employment;her spouse's employment;and the housing market.
Most of our competitors are European or Asian-based,such as LVMH and L'Oreal.According to the comparables,we are the world's leading prestige market for beauty.A customer will spend 35-50 dollars for our products,versus 500 for a handbag or 50,000 for a necklace.
In California,there is strong Australian buying within a 20 mile radius of LAX airport.It is the major gateway of the Australians to the US;20-30% of area retailers' business is from Australians,given the strong Australian dollar.
Estee Lauder(EL)

Wednesday, February 27, 2013

AIG Makes Strong Effort;AIA Spinoff Prospers

We are now putting in a concerted effort to reestablish AIG throughout the world,said CEO Robert Benmosche.We have AIU and American Home in Japan,as well as Lexington on the commercial side.
The US government was an excellent partner.It was only difficult when we dealt with compensation.We always are looking at market data.You want to be competitive.We've had a very good relationship with the Treasury and the Federal Reserve.
We are attracting and keeping talent.In property casualty 2012,we didn't achieve our profit goals.We made great progress,but were down moderately from target.Sales of fixed annuities came down.They came in at the mid-eighties,rather than one.
I think I make a lot of money-about 10.5 million.It pays the bills.It's good.Pay didn't cause the crisis.When you lose 100 billion,you're entitled to take those losses and offset future taxes.That's the law-nothing special for AIG.
We are hiring and we are going to continue to hire.We want to be able to take a lap internally.We have centers set up around the country and world in low cost locations.We see our headcount going up,and our expenses going down.
All along ,we've been thinking about business continuity,hardening our technology and where we put our people.New York is a huge center of capabilities around data mining to help us underwrite our insurance better.
I'm feeling very good,although my diagnosis was pretty rough and the initial chemo didn't work.They found a targeted pill.I'm still negative.They're surprised and pleased,but I still run 3-4 days a week 3 miles at a time.
We'll go through 2014 and they'll take a look at it.I'll be 70,and if I still have the energy to stay on and they want me to,I'd be happy to do it,Mr.Benmosche indicated.
There was a better than expected 89% increase in 2012 net profit at AIA Group Ltd,which was spun off from AIG in October 2010,on market value gains and product improvements.New business was up 27% to a record 1.19 billion dollars.AIA is the third largest Asia-based insurer by market value.
American International Group(AIG),AIA Group Ltd(AAIGF:US)

Wednesday, February 20, 2013

Global Investing Survey 2013

The banks' balance sheets in terms of deleveraging are pretty convincing,according to George Greg,head of international investing at William Blair and Company.The banks move to adjust their strategy where they can make themselves strong-in the human resources area.The capital and cost questions are being addressed.
In the long run,we're gonna have to ask what is the normalised ROE here in relation to industrials.
As for Japan,overwhelmingly on the mind of investors is what the Bank of Japan will do next,the effectiveness of monetary policy going forward.We favour the major financials;global industrials;and consumer stocks with a lot of vibrancy in the small cap end.
In Europe,we like industrial capital goods;global luxury and consumer brands;and cars.Spain has already made great strides in productivity and unit labour costs,and will be more competitive going forward.
There are still plenty of good opportunities in the US,though it is more expensive than Europe.
Portugal's GDP contracted for the ninth straight quarter on declining exports,and the Euro Area GDP fell the most since 2009 in Q4 2012.
British Prime Minister David Cameron arrived in India with the largest business delegation ever,representing 100 companies,including BAE Systems;HSBC;and Rolls Royce.He called India the partner of choice.
William Blair International Growth N Fund(WBIGX),William Blair International Equity Class I Fund(WIEIX)

Wednesday, February 13, 2013

Ford's Next CEO;World's Best Internet Banks

Mark Fields,who became Ford Motor Company's Chief Operating Officer on December 1,2012,is believed to the likely successor to CEO Alan Mulally when he retires in 2014.Fields,51,had been Executive Vice President and President of the Americas at the multinational automaker.He made frequent business television appearances in that role.
Global Finance magazine's World's Best Internet Bank Awards recognise banks that are innovating and prospering online.The 2012 Global Winners were as follows:
Best Overall Internet Bank:Citi
Best Corporate/Institutional Internet Bank:Citi
Best Consumer Internet Bank:Standard Chartered
The award winners are leading the way in mobile banking services;online payments;cash management;social media;Web design and integration;attracting new clients in growing markets;strengthening ties with existing clients;and boosting information security.
Rajesh Yohannan,head of Citi Asia Pacific eBusiness and global mobile,said the team has worked hard to introduce innovative features such as mobile and tablet-based location services;real time click-to-chat;electronic delivery of statements/advices;and global view of accounts.We will continually strive to raise the bar with more innovations in the Internet and mobile space to serve our customers better.
Standard Chartered has been able to attain full straight-through processing for opening credit cards;personal loans;and deposit accounts on the Internet.It allows customers to complete application forms online and submit supporting documentation through the same medium,according to Infosys.Therefore it enables the entire verification and processing for various products online.It has also boosted product cross-selling by delivering customised marketing messages based on customer behaviour,such as browsing patterns.
Citigroup(C),Standard Chartered(STAN:London),Ford Motor Company(F)

Wednesday, February 6, 2013

The China Trade:Outlook For Equities

The last four years,stocks have done pretty well,but with volatility,according to Chris Blum,head of Global Equities at JP Morgan Private Bank.The volatility will be much less than in the last couple of years.Global coordinated central bank action will lower volatility and get people into equities.
People expect a 15-20% pullback,but those days are history.They will be in the mid-single digits.The key is that people have rules and follow them when things get tough.
We like China.That equities market has lagged the US by 30%.China has a much better balance sheet as a country.They are deficient in human rights.As it relates to fostering growth,I think it is a fantastic system.They reach decisions behind closed doors and implement them.
Citigroup says Chinese stocks will beat those of the G20 in 2013.The Shanghai stock index has risen 3.4%,the most since June 2012.
China is burning as much coal as the rest of the world combined,notes The Washington Post.The HSBC China PMI shows manufacturing expanding at the fastest pace in two years.
iShares FTSE China 25 Index Fund(FXI)

Wednesday, January 30, 2013

Goldman Sachs and the Global Markets

We're in a better part of the cycle right now,said Gary Cohn,President and Chief Operating Officer of Goldman Sachs.Our results in 2012 were a direct reflection of what our customers needed and wanted to do,and we've been there to facilitate that.We have adapted our business to really accommodate and facilitate our customers' needs.
We are a fiduciary for our shareholders.We increased our dividend two times in 2012.
I think we've got our compensation right for our people.We're in a very competitive industry and the capital we have is human capital.The average 2012 pay was about 400k.
As I look out at 2013,I feel that we're in a relatively good position in terms of head count.We look at global GDP.If we see an upward move,that will stimulate our customers and we will hire people to serve them.
The zero interest rate policy will end at some point and that will be positive for our business.I'm fairly bullish about global stock markets.With blue chip stocks,you're long inflation and long global growth.
We can't be the buyer of last resort of fixed income.Somebody has to buy it.The zero interest rate policy clearly drives down currency values.
I think a sudden or dramatic backup in rates would be shocking to the market.I'm not sure that capital can come back into the market quick enough.Just because it's a bond doesn't mean it doesn't go down.Bond prices go down as interest rates go up.
Goldman Sachs(GS)

Wednesday, January 23, 2013

Betting On Banking:Should You Invest in Chase and Citigroup

JP Morgan Chase reported earnings of 1.48 versus a consensus estimate of 1.16,and revenue of 24.37 billion dollars versus an estimate of 24.41 billion.We think that the numbers were good,in line,said Jason Goldberg,CFA,an analyst at Barclays.Mortgage results continue to be the story.Asset management and commercial banking also had a good quarter.
We have an overweight on the stock.We think you'll see several metrics in the right direction.They're growing the top and bottom lines.Not too bad.It is trading well below tangible book value.
The stock has outperformed the market and the sector since Jamie Dimon joined as CEO.It's certainly one of our favourites in 2013.We also like Citigroup and US Bank.
Gerard Cassidy of RBC Capital Markets thinks Citigroup is in a good position to obtain some capital return for shareholders.Their Q4 report as well as their reducing exposure to risky assets over the past 2-3 years will support their case with regulators.
JP Morgan Chase was at 46.14 in afterhours Wednesday trading,down 0.09;while Citigroup was at 41.85,down 0.17;and US Bank was at 32.70,down 0.39.
JP Morgan Chase(JPM),Citigroup(C),US Bank(USB)

Wednesday, January 16, 2013

Europe and Asia:Voices and Trends

China is waiting for the new leadership in March,according to Ronald Wan,Managing Director at China Merchant Securities.For the real policies,it has to wait until Q2 or Q3.They need to prolong growth by increasing consumption and breaking up the state-owned entertprises.It makes it difficult for private enterprise to even lend money.
The key thing is the policy on urbanisation and consumption.The RMB will grow 2-3% this year.It's still relatively attractive.
The Hong Kong property market will grow 5-10% this year,said Henderson Land.
In Europe,there's been a big improvement in the periphery,said Mark Matthews,Head of Research-Asia at Bank Julius Baer.The massive pain they've been going through is starting to yield results.There are good things to look at even in beaten-up markets like France.
We went from an underperform to a neutral in Europe,adds Liz Ann Sonders,Senior Vice President and Chief Investment Strategist at Charles Schwab.We're certainly sticking with that market perform.
Tech has been our longest term outperform rating.For now,we think you don't want to make a lot of sector bets in the market.
Jack Ablin,Executive Vice President at BMO Private Bank,said it's remarkable.I see more problems,more and more volatility.We probably want to play an equity exposure away from the US,or at least away from the consumer.

Wednesday, January 9, 2013

Should You Invest in the Big Banks

Citigroup is viewed favourably by Todd Hagerman,Managing Director and Head of the Multinational and Regional Bank Group at Sterne Agee.Citi just announced a major restructuring,setting themselves up for the capital review programme.As well,there will be major actions over the next 6-12 months by new CEO Mike Corbat.
Citi is also well-positioned to return capital to shareholders.It has an improved regulatory situation.The ongoing US budgetary problems will cause increased volatility in the market.Buy on the dips and take advantage of it.
Sterne Agee has a buy rating on Citi,with a price target of 52.00.It has also raised JP Morgan Chase from a hold to a buy.Their regulatory risk has subsided.I don't think the risk is too high.We certainly think there will be a buyback and a dividend increase.
TD Bank has topped the Royal Bank of Canada as the leading arranger of syndicated loans among the Canadian banks.
Citigroup(C),JP Morgan Chase(JPM),Toronto Dominion Bank(TD)

Wednesday, January 2, 2013

Harvard Business Review's Best CEOs List

Harvard Business Review has published its Best-Performing CEOs in the World 2012 list.Number one on the list is the late Steve Jobs of Apple Computer.The top living CEO is Jeff Bezos of Amazon.
The list is based on three metrics:industry-adjusted shareholder returns;country-adjusted shareholder returns;and increase in market capitalisation over entire tenure.It is drawn from 3143 CEOs in 37 countries,and is the only global ranking of CEOs over their entire tenure.
Under Jeff Bezos,Amazon delivered industry-adjusted shareholder returns of 12,266%,and saw Amazon's value increase by 111 billion dollars.Meg Whitman of Hewlett-Packard is the top woman CEO,coming in at number nine on the list.The only other woman on it is China's Dong Mingzhou of Gree Electric Appliances.
Yun Jong-Yong,formerly of Samsung Electronics,is number three;while Roger Agnelli,formerly of Brazilian miner Vale,is number four.Hyundai's Chung Mong-Koo is number six,and India's Y.C. Deveshwar of ITC consumer goods is number seven.
On average,the CEOs delivered total shareholder returns of 1,385% and increased market value by 40.2 billion dollars.This was the third annual edition of the list.
To recap the top four,they were:1.Steve Jobs,Apple;2.Jeff Bezos,Amazon;3.Yun Jong-Yun,Samsung;4.Roger Agnelli,Vale.
Apple Computer(AAPL),Amazon(AMZN)