Monday, December 10, 2012

Boom and Bust In Shipbuilding

China has a voracious appetite for commodities, which means it has a tremendous appetite for shipping to carry those commodities.  In a Communist twist on Say's Law, demand creates its own supply.  Since there is a long lead time in ship building, shipping rates are very volatile.  

In this video, the FT's Jonathan Wheatley interviews shipping industry expert, Dinesh Sharma, a senior consultant at Drewry Maritime Advisors, about the boom and bust business.  Jonathan Wheatley is the FT's deputy emerging markets editor.

A Top European Fund Manager Is Bullish On European stocks

Britta Weidenbach is the portfolio manager for large European equities at DWS Investments. Weidenbach says the timing is right to go back into European stocks in this interview with the FT on December 4th. She sees a selective approach delivering total returns of around 12 per cent next year. Now DWS is even bullish on some European banks.

Frau Weidenback explains her portfolio's organization, approach, and performance:

Friday, November 23, 2012

Australia Going the Way of Spain? That's a Bit of an exaggeration Mate!

Billionaire Gina Rinehart, Asia’s richest woman, said Australia risked facing a debt crisis similar to European nations because of overspending and a loss of competitiveness.  Bloomberg reports:

Monday, October 29, 2012

What do the Long Haul Pull Backs Mean For Spirit and the 787?

High fuel prices and fewer people paying premium fares persuaded Singapore Airlines to cut back on ultra long-haul flights. The WSJ's Jeffery Ng explains why airlines may be better off aiming for the lower end of the market:

Mammon Among Friends wonders if this is bad news for Spirit.  Spirit is a major partner in the production of the Boeing 787, which is the premier aircraft for such routes.  

 Boeing has made a strategic choice in building the 787 about how its customers, the world's airlines, will deal with passenger growth:  "As the busiest airports get more and more congested, the airlines will either have to fly bigger planes with more seats into those hubs or fly longer point-to-point routes to relieve pressure on the hubs. Airbus in the A380 bet on the former, while Boeing in the 787 bet on the latter."

In the Asian Wall Street Journal, Jeffery Ng reports "The cuts were caused by a combination of economics and physics. Amid the sluggish global economy, fewer fliers were willing to pay premium fares, which can be more than five times the standard coach fare. The rise of discount carriers in Asia has also put additional pressure on the regional operations of premium carriers."  

The 787 goes a long way toward dealing with the challenge of higher fuel prices.  Yet the fundamentals may still have weakened.   Investment banking has been shrinking since the financial crisis and many firms may be less willing to pay for fancy flights in less profitable economic times.

Santander Takes a Big Writedown on Its Spanish Real estate Loans

Banco Santander said profit fell after it amassed provisions against real-estate losses in Spain and as economic activity stuttered in some Latin American markets. Dow Jones's Margot Patrick reports:

Visa Raids JPMorgan for Its CEO

Jamie Dimon has built a powerhouse in JPMorganChase and demonstrated that good management can weather financial crises and prosper.  Visa, which went public a few years ago, poached some of Dimon's talent to head the payments giant.  In this October 25th video Robin Sidel on Markets Hub reports Charles Scharf is stepping out of James Dimon's shadow and into Visa's executive chair:

Sidel tells us "Mr. Scharf is well-known within J.P. Morgan as a methodical, decisive and sometimes prickly executive who doesn't like loads of bureaucracy. Those traits may shake up employees at Visa, which relies heavily on meetings and group discussions, according to people familiar with Visa's corporate culture."  Furthermore, in his new job, "Mr. Scharf's job will be to manage delicate relationships with millions of merchants, and to steer through rising competition from nontraditional payment companies such as eBay Inc.'s PayPal division."

Thursday, October 25, 2012

It Sounds Like There Is An IPO in CorpGroup's Future

Chile is a country with a very dynamic economy.   Conglomerate CorpGroup is a major player in the Chilean economy. Alvaro Saieh, its Chairman, speaks about the capital-raising plans of its retail division SMU:

Wednesday, October 24, 2012

Merkel Wants 15% of EADS outright

Germany spoiled the wedding party of EADS and BAE Systems by vetoing their proposed merger.

The combination of the British and European defense and aerospace companies balanced by EADS's commercial business (think Airbus) would have given American competitors a bulked up rival. EADS was looking at the deal as a means of reducing political influence on the firm only to have that political intervention do the deal in.

Germany now makes it clear that it wants an equal say with France: that means the government of Germany wants an equal say with the government of France.

European corporate structure is not for the faint hearted. Consider the complicated structure of EADS. EADS is the holding company which owns Airbus and the defense businesses. It is owned by various national entities. The German ownership has been in the form of Daimler-Benz's control of a 22.5% interest: Gerrit Wiesmann reports in the Financial Times today (10/24), "Daimler officially controls 22.5 per cent of EADS, although it sold a 7.5 per cent stake to the Dedalus group a few year ago to raise funds for its core business. The group, which also includes Allianz, Deutsche Bank, Goldman Sachs and Morgan Stanley, has the right to sell back its stake to Daimler in the middle of next year."  The German government has been interested in buying all or part of this interest. The proposed BAE Systems-EADS merger moved Berlin into action. Wiesmann reports that "The German government is bringing forward [its] purchase of 15 per cent of EADS."

Sunday, October 14, 2012

Another Crisis Is 'Inevitable'

at the bottom of the financial crisis, congress set up a Troubled Asset Relief Program (TARP) which allowed the federal government to invest in banks and other firms likely to go under. Neil Barofsky was the program's Inspector General. In this Wall street Journal interview he explains how the factors that led to the 2008 crisis have only gotten worse. In consequence he views another crisis as "inevitable." Photo: Getty Image.

Saturday, October 13, 2012

Mattel Reads Comic Book Fans At the New York Comic Con

MarketWatch's Andria Cheng discovers Geek Chic. The big comic book show, New York's Comic Con, brings die-hard fans dressed as Captain America or Spiderman together with Marvel and Mattel marketers. The Toy Entertainment Industrial complex learns here where geeky things are the new cool: Just think–your geekrobe could become next year's action toy!

Wednesday, October 10, 2012

How Important Is It? Dominos Sells Pizza Bit by Bit

 Try selling 17 million Pizza's without the internet. 

Listen to chief information officer Kevin Vasconi tell Paul Taylor how Domino’s Pizza copes on 'Super Bowl Tuesday' in his IT 'war room.' Taylor is the Financial Times' IT editor.
Vasconi explains how his company is 'data-driven' as it pushes into online ordering and global point-of-sales. 

This five minute, twenty six second video was posted on September, 17 2012 

Sir Paul Smith During the London Fashion Week

British designer Sir Paul Smith is one of London Fashion Week’s biggest names. 
At this year’s show, the fashion designer speaks to the FT’s deputy fashion editor Carola Long about the new collection, a mixed picture around the world and why it is the right time to move back into China.  
This three minute, fifty seven second video was posted on September, 16 2012  

Sunday, October 07, 2012

When the Markets Are Down, Go Up

High-end fashion: From the Valentino show at Paris fashion week in a five minute, eleven second video , Vanessa Friedman, FT's fashion editor interviews Stefano Sassi, Valentino's chief executive.  He spoke to about how Qataris's recent has affected the business and why he's keeping the focus upmarket.   

Wednesday, September 26, 2012

The Swiss Central Bank Is Running the Printing Presses & Having Some Very Peculiar Effects On Eurozone Bond Markets

Switzerland's effort to stop its currency strengthening has led its central bank to buy eurozone bonds equivalent to half the total deficit in the region's "safer" countries. James Mackintosh, the FT's investment editor, reported on September 25 2012 that central banks are driving bond yields. (4m 33sec)

Toward a World Yuan?

September 24 2012 The FT reports "As China continues to internationalize its currency, a small but growing number of multinationals are now using renminbi in cross-border trade." Denise Law of FT China Confidential reports: (4m 13sec)

Thursday, September 13, 2012

did Doubke-Entry Accounting create the Abstraction that ids Capitalism

A Foundation of Capitalism Jane Gleeson-White wrote a new book on double-entry accounting. In this interview with the Economist she tells about how double-entry accounting originated in the Italian Renaissance, helped father Capitalism, and was the fruit of the synergies of the scientific and cultural developments of the time.

IMF Chief: World Economy in a 'Dangerous' Phase

WSJ Global Economics Editor David Wessel dissects the sentiment of the world's central bankers following last week's economic meeting in Jackson Hole, Wyoming. Their feelings are not optimistic. Photo: Brendan Smialowski/Getty Images

Wednesday, September 12, 2012

U.K. Advertises for New Bank of England Governor

For the first time, the U.K. Treasury is placing an ad to find a new governor for the Bank of England. As bank expands its role, the job could prove hard to fill. Dow Jone's Paul Hannon reports on the hunt for a super human.

Glencore Raises Offer for Xstrata

(9/10/2012) Geoffrey Rogow and Dana Cimilluca discuss Glencore's last-ditch effort to save its merger with Xstrata, and Steven Russolillo looks at the markets' reaction to the August unemployment figures.

Saturday, August 11, 2012

Peter Sands, Standard Chartered Speaks to the FT About New York's Money Laundering Charges

Aug 8 2012 New York state’s financial watchdog has accused Standard Chartered of hiding $250bn of transactions linked to Iran. Peter Sands, the bank's chief executive, tells the FT’s banking editor Patrick Jenkins that he rejects the portrayal of the facts set out by the regulator. But he does accept there has been damage to the bank’s reputation. (6m 6sec)

Sunday, July 22, 2012

Will Airbus Ever Figure Out How to Produce the A380 Profitabley?

Despite six years of effort to build Airbus A380 superjumbo jetliners more efficiently, the European plane maker must still cut the cost and time needed to produce its two-deck airliners. WSJ's aerospace correspondent Dan Michaels reports:

What's next for ETFs?

The ETF industry has seen phenomenal growth, but there are obstacles ahead says Fleming Meeks, Barron's Executive Editor, and Beverly Goodman, Mutual Funds Editor: 7/14/2012

Wednesday, July 11, 2012

"Opinion: The Dimon Principle"

Paul Gigot is the Wall Street Journal's editorial page editor. The pols are after my favorite banker. Listen to to his commentary last May 14th on the political assault on J.P Morgan CEO Jamie Dimon and regulatory failure.

Does Europe Need an Alexander Hamilton?

 Every year, Nobel Prize-winning economist Robert Mundell, the intellectual powerhouse behind supply side economics, hosts a conference with Central Bankers held in Siena, Italy. On speaks on Bloomberg Television's "Bottom Line," Sara Eisen reports: 

Udvar-Hazy Strikes Again!

Steven Udvar-Hazy founded International Lease Finance Corporation (ILFC) which is both the pioneer and, until the financial crisis, the powerhouse of the aircraft lease business. Eventually AIG bought ILFC so that AIG became Airbus's and Boeing's biggest customer

Then came the financial crisis. AIG got into financial trouble holding the bag for structured financial products engineered for investment bankers' profits and bonuses rather than its own financial health.  AIG lost its investment grade rating and had to give controlling interest in the firm to the U.S. Treasury in return for TARP funds.  ILFC lost access to financial markets and the entrepreneurial Hungarian found himself reporting to federal bureaucrats.

So what did Udvar-Hazy do?  He jumped ship and started all over again.  He is now the chief executive officer of Air Lease Corp.  He has reentered the big time with a whopping order for 737s at the last Farnborough air show two years ago a bigger one for the Airbus 320neos subsequently and now a $7.2 billion order of Boeing Co.'s 737max planes at the current Farnborough air show.

In this video from yesterday (July 9) he speaks with Guy Johnson on Bloomberg Television's "In the Loop:"

Saturday, April 28, 2012

A Post Boomer Mustang? What Would Sally Think?

For the last decade, automakers have connected with baby boomers by recreating storied cars from their youth. Now, Ford is shifting its Mustang muscle car's focus to a younger generation. Mike Ramsey explains on Lunch Break.

Hillary Goes to the Movies

The Wall Street Journal's Dan Henninger and Heritage Foundry blogger Lachlan Markay and discusses the State Department's decision to feature the documentary "Gasland" at the American Film Showcase:

Saturday, March 31, 2012

Joplin: If All Else Fails, Try the Market

To anyone around here, when you mention the name, "Joplin," they think of that day of wrath when tornadoes ripped through the midwest and one, seemingly released from hell, devastated Joplin, Missouri.   One doesn't have to reach far among one's neighbors and friends to learn of someone who was touched by the disaster.  I heard of one mother who, lacking a tornado shelter, hid with her two children in a clothes closet.  When the Angel of Death had past over, she opened the door to find the closet the only thing left standing.

Many in Kansas, no stranger to tornadoes, helped as the community worked to rebuild itself. They "did and maybe asked permission later!" with typical midwestern get-it-doneness. The speed with which churches and religious organizations mobilized would put the Pentagon to shame! To rephrase Archbishop Dolan, they did not help because those in need were Christian, they helped because they were Christian.

An economics professor at Troy University, Daniel J. Smith, studied how this spontaneous action accomplished wonders. The story is the more poignant as we watch the Japanese bureaucracies in government and "private" utilities obscure reality and stand in the way of recovering from Fukushima Daichi.  Fortunately for Joplin, it was blessed with lax regulation and not plagued with crony capitalism.

Here is what professor Smith found:

Tuesday, February 28, 2012

The Labor Party Isn't Talking to Itself

Australia's Government Labor (not "Labour") government was thrown into crisis by Kevin Rudd's surprise resignation while on a trip to the U.S. The WSJ's Deborah Kan speaks to reporter Enda Curran (2/22/2012):

Four days later, Julia Gillard won a vote by the Labor parliamentary caucus to stay as Prime Minister. She won the war. Will she win the peace?

The WSJ's Deborah Kan speaks to Enda Curran from Sydney (2/26/2012):

Sunday, February 26, 2012

Michäla Rehl took this picture of Bavaria's  Finance Minister Markus Söder for Reuters February 10, 2012.  Herr Söder was in Veitshöchheim (near Würzburg) for the TV show "Fastnacht in Franken.Fastnacht is one of the common names for Shrove Tuesday ("Fat Tuesday.")  Fat Tuesday is fat because we fill up before Lent begins on Ash Wednesday.  It is called Fasching in Bavaria, carnival in much of the world, and marti gras (French for "Fat Tuesday") in places like New Orleans.  Carnaval accounts for 70% of Brazil's tourism and 80% of its beer consumption: not bad for a week's "work." This celebration of the fun before the fast can create enough sin to require at least forty days of repentance.

The "Hast Du mal nen Euro?" translates roughly into "Would you have a Euro already?" or "Spare a Euro?"  I wonder whether this is Bayerisch or Kiezdeutsch.   The Economist describes Kiezdeutsch as "the argot of inner-city teenagers" and a Doktor Heike Wiese, linguist at the University of Potsdam, has argued it to be a distinct German dialect.  Purists are outraged.

Might Herr Söder be making fun of the Greeks asking for a handout? Why such Teutonic skepticism?  Those suspicious Germans figure the Greeks want Fasching without fasting, i.e., carnival without Lent.  Well who wouldn't?  The Germans read their Homer and know what happened to the Trojans when they believed the Greeks.

Saturday, February 25, 2012

Bank of America to Fannie Mae: If That's the Way You Want to Do Business, We Won't Do Business with You!

Over a the two decades before the Housing bubble burst, Countrywide Financial became Fannie Mae's biggest supplier of mortgages to securitize. Gretchen Mortgenson and Joshua Rosner document the symbiotic relationship between Angelo Mozilla's Countrywide and Fannie in Reckless Endangerment.  Their relationship was both financial and political as they built up the financial industrial complex that drove the financial system to ruin.  Although Mortgenson and Joshua Rosner demonstrate how these two firms worked with the politicians' and the government's aiding and abetting to degrade credit quality, Fannie is now owned by the federal government.  Under this new management, Fannie wants to only buy mortgages from Bank of America (Countrywide was rescued by Bank of America) on the condition that it can sell it back to the bank if they do not conform to its underwriting standards ex post facto

You May Make the Rules, But I Do Not Have to Play the Game

Bank of America has said "No deal!"  It thought it was helping out when it rescued Countrywide only to be hit with one law suit after another from the government.  Bank of America has learned how the government treats those who give the country a helping hand: it bites it until it bleeds.  Exposing oneself to unknown and unlimited liability is not the path to success in banking.

WSJ's David Benoit reports:

Thursday, February 23, 2012

Luxury Booming

Christina Passariello in the Wall Street Journal last Friday reported that, "At a time when many consumer goods segments are suffering, luxury is rich with promise. The world's biggest luxury-goods purveyors are coming off a blockbuster" year.  Among those reporting quarterly results, sales were up 20% at LVMH (Moët Hennessy Louis Vuitton SA); 22% in PPR SA's luxury division (includes Gucci), and 18% at Hermès.

Thursday, February 02, 2012

Can the Richest Aussie Sheila Make Even Fairfax Quake?

The WSJ's Deborah Kan talks to Andrew Critchlow, the Journal's Australian correspondent, about Australia's richest woman, Australian mining heiress Gina Rinehart.  This savvy investor is translating her natural resources wealth into the biggest shareholding in Fairfax Media. (2/1/2012.)  Will she who pays the piper call the tune?

Wednesday, February 01, 2012

Fed's Forecast to 2014 columnist columnist Chuck Jaffe visits Mean Street to discuss how the Federal Reserve, by keeping interest rates low for several years, is pushing savers to risky territory (1/30/2012):

Tuesday, January 31, 2012

apple Picks John Browett, European electronics retailer, Dixons' CEO.

Apple picked a new boss of retail and it is a surpise.  They picked the head of Britain's Dixons's: a buy your box heare kind of firm. 

Smart move? Time will tell.

Take Your Losses Upfront: Banco Santander Takes a 3.1 Billion Euro Hit

Profits Tumble at Banco Santander 1/31/201
Spain's largest bank, Banco Santander, announced that its profits were down by 98% in the fourth quarter of last year. It is catching a jump on regulators by writing its losses down earlier.

In this video, Joe Ortiz of DJ Banking Intelligence tell us why.

Saturday, January 14, 2012

Innovation Is Alive and Well at Milliken

Kodak, once a big U.S. innovators is in a terminal decline.  John Bussey in this 1/12/2012 Wall Street Journal video shows what textile maker Milliken & Co did right.