Wednesday, January 29, 2014

An Open Question:Figuring Bitcoin Out

Can virtual currencies improve our payment systems and can guardrails be put into place to prevent in the dark activity such as money laundering?asks Benjamin Lawsky,Superintendent of Financial Services for New York state,about Bitcoin.Bitcoin is peer to peer.An algorithm and key allows you to make transactions without revealing your personal information,Mr.Lawsky explained.
Bitcoin has real potential if we can get to that system where technology is allowed to flourish while we can prevent it being used for money laundering,Mr.Lawsky said.*
Bitcoin Exchange BitInstant CEO Charlie Shrem was arrested Sunday at JFK International Airport by federal authorities.In a complaint filed with the Southern District of New York,he has been charged by the Justice Department with conspiracy to commit money laundering and operating an unlicensed money transmitting business.The complaint alleges he and Robert Faiella,who was arrested in Florida,sold more than 1 million dollars of Bitcoins to buyers and sellers of drugs on former underground online drug site Silk Road.Three months ago,Silk Road was shut down by police and its alleged founder Ross Ulbricht was arrested.
Shrem was also charged with failing to file suspicious activity reports with respect to transactions he allegedly helped Faiella facilitate through BitInstant.Apart from being head of BitInstant,Shrem is co-owner of the New York bar EVR,which takes Bitcoin payments,and is co-chairman of the Bitcoin Foundation that promotes the virtual currency.*
Benjamin M. Lawsky is an attorney and the first head of New York state's new Department of Financial Services,which,as Governor Andrew Cuomo's Chief of Staff,he helped create.As Superintendent,he supervises all insurance companies;all state-chartered depository institutions;and most US-based branches and agencies of foreign banking institutions.The department also regulates all the state's mortgage brokers,mortgage bankers and check cashers;as well as money transmitters,budget planners and so on.In total,the new department supervises 4400 entities with assets of some 6.2 trillion dollars.The department merged the former Banking and Insurance Departments into a modern,unified financial regulator.
Mr.Lawsky is a graduate of Columbia Law School and Columbia College.

Thursday, January 23, 2014

Global Trends in Business January 2014

The HSBC Preliminary China Manufacturing PMI has declined to a six-month low of 49.6 in January,down from 50.5 in December.A reading below 50 indicates contraction in the sector.The nationwide survey of purchasing managers by HSBC Holdings PLC precedes the final reading by a month and covers 85-90% of survey respondents.
HSBC economist Qu Hongbin attributed the drop to a falloff in domestic consumption.Almost all subgroups in the survey fell,from new orders,to new export orders and employment.As inflation is not a problem,the policy focus should be on supporting growth,Mr.Qu advised.*
At the same time,ECB President Mario Draghi expressed guarded optimism about the prospects for Euro-zone economic recovery,speaking to the Swiss German language daily Neue Zurcher Zeitung.I am very careful about making projections that are overly optimistic,Mr.Draghi cautioned,but yes,the economy in the currency area is growing again,although it's not yet broadly based and the jobless rate above 12% is very high.The growth isn't just driven by exports anymore,but increasingly by domestic demand as well.On the other hand,the hard economic data are still inconsistent,the ECB leader noted.*
Multinational consumer products titan Unilever found its European business to be flat,with Southern Europe stabilising.China and Indonesia sales were growing,while South America saw double digit sales growth.North America showed lower sales volume,but the personal care business improved.
Underlying Q4 sales growth was 4.1%,and emerging markets sales growth was 8.4%.CEO Paul Polman cited consistent underlying sales growth and margin expansion,coupled with strong cash flow.*
Unilever NV(UN)

Wednesday, January 15, 2014

Scotiabank's Asia-Pacific Presence

Scotiabank has been in the Asia-Pacific for 50 years,according to Rod Reynolds,President of Asia-Pacific and Middle East for Scotiabank.We have been in China for 30 years and have three branches there.We are focused on organic growth, but have a 19% stake in the Bank of Xi'an,as well as a stake in China Everbright bank.We are really encouraged by reforms that will increase the opportunity for Chinese companies to grow.We are well-positioned in China.
The company also has a Bank of Beijing/Scotia Asset Management joint venture.*
The ASEAN countries are a particular focus for us:Singapore,Malaysia,Vietnam and Thailand.All of our 700 Thai branches are open despite the recent unrest.We have an active business continuity plan in place.We have a very diverse asset list in Thailand.The country's been remarkably resilient to such events.We are growing rapidly in Thailand,at a rate of 20% per annum.
Thai protestors have been blockading intersections in Bangkok,demanding the resignation of Prime Minister Yingluck Shinawatra and an unelected council to oversee reforms.*
Scotiabank,the largest overseas bank in Canada,is now focused on integrating the acquisitions we made during the global financial crisis,but open to opportunities that may arise,Mr.Reynolds said.

Wednesday, January 8, 2014

Voices and Visions:Investing 2014

RBC Capital Markets has issued upgrades on Yum Brands and Johnson and Johnson,raising the price target of JNJ to 104.00.The chatter out of China,where Yum Brands has a major presence, has been positive at this point,said CNBC host Jim Cramer.*
Euro zone unemployment has remained steady at 12.1%.*
The Greek stock market is up 10% on the year,and Greece is taking over the presidency of the European Union.*
Compared to Twitter,Facebook trades at 19 times trailing sales,while Twitter trades at 58 times.If it comes in and expectations check out,we'll definitely own it again,said Dan Niles of AlphaOne Investments.*
Cantor Fitzgerald has downgraded Twitter to a sell.Youssef Squali of Cantor Fitzgerald adds that it is almost impossible for Twitter management to hit those numbers in the time frame investors are expecting.That's the reason for the downgrade.With Facebook,revenues actually increased the first year.
Even adjusted for growth,Twitter doesn't make it.Frankly,I would hate to be Twitter CFO right now,having to report earnings in a month's time.*
Alan Mulally says he is staying at Ford,not moving over to Microsoft to replace the retiring Steve Ballmer as CEO.*
Alcoa kicks off earnings season with its Q4 report today,Thursday.*
We are gonna run through all this liquidity,said Jerry Castellini of Castleark Management.We need to pull this liquidity off,or it's gonna run into inflation by year end.
Castellini is long the consumer,energy and industrials.*
Yum Brands(YUM),Facebook(FB),Twitter(TWTR),Alcoa(AA)
Labels:Castelark Management,Microsoft,Alan Mulally,Ford Motor Company,Twitter,Facebook,Greece,Euro zone,China,Yum Brands,Johnson and Johnson,Jim Cramer,CNBC

Thursday, January 2, 2014

Sochi Winter Olympics:the Fortress Games

The most costly and threatened Olympic games in history will be underway in Sochi,Russia in five weeks' time.Russia is spending 54 billion dollars on the games and the massive security effort to protect them.
Some 50,000 troops and police are being deployed to the Games and surrounding area.Spectators will be vetted from their passport information,and surveillance will be heavy.The likelihood is that,despite their boasts,the highly skilled terrorists will not directly attack the fortress which has been created around the Sochi Games itself,which are geographically the most compact Olympic Games in history.They will strike softer outlying areas instead such as Volgograd,the transportation hub 400 miles northeast of Sochi,or other targets even farther away.
Last week,37 people were killed in Volgograd in back to back suicide bombings on a bus and a train station.If you travel to the Sochi Games,there is an extra element of risk in your life,centered around public transport.Your safety cannot be fully guaranteed.It's a very small extra risk-one that only you and your family can decide if it's worth taking.
Security will be similar to that surrounding the Salt Lake City Winter Olympics in early 2002,five months after the 9-11 attacks.At that Olympics,the US Marines and Army,as well as the National Security Agency,provided mountain and airspace patrols and surveillance.It will be noticeable,and people will complain about it,said interational ice hockey federation president Rene Fasel.I'm sure Russia will do everything possible,but that means we have an unbelievable security control.We have to be strong.We decided to go to Sochi and the only answer to these bombings and terrorist incidents is to go there.
The Australian Olympic Committee is restricting its athletes' travel to flights only,according to IOC vice president and AOC head John Coates.