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Michael Parmar

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  • China Supply, Demand Outlook for Copper: The Price Correction Continues [View article]
    I read somewhere that Alcoa (Aluminium producer) estimates that aluminium substitution for copper is feasible for about 20% of copper usage.

    I would wonder about the sensitivity of that estimate to copper and aluminium prices.

    Your copper graph would have benefited from a 200 day moving average - it fell below that and is now rising.
    May 30 10:00 PM | Likes Like |Link to Comment
  • Europe Playing a Game of Brinkmanship: Investors Should Limit Exposure [View article]
    Those are fair comments but the protests in Greece yesterday were mainly directed at the "theiving politicians" that rejected calls in parliament to investigate how Greece got into this situation and to hold the politicians accountanble, and against those putting party political interests ahead of national ones.

    And there is a protesting contingent (as just reported on this website) in state enterprises that are unwilling to give up their benefits and are concerned for their future employment security.

    I recall when privatisation kicked off in the UK under Mrs Thatcher, the pictures of mounted police charging on miners come to mind.
    May 30 08:20 AM | 2 Likes Like |Link to Comment
  • Weekly Indicators: Purchase Mortgage Application, Silver Lining Edition [View article]
    Am adding a comment to track other comments on this article
    May 29 12:07 PM | Likes Like |Link to Comment
  • Europe Playing a Game of Brinkmanship: Investors Should Limit Exposure [View article]
    Doesn't the list of events following a Greek default (quoted from the Daily Telegraph) present to you the idea that their possibility of occurunce will mean a solution HAS to be found for the European idea to survive?

    You quote “A man sees what he wants to see and disregards the rest.”

    I think your article is a good example of that, as you have interpreted statements clearly indicating the IMF/EU/ECB and Greece itself do not want a default (and been pretty selective of the choice of presentation) to support your view of "brinkmanship".

    Perhaps it is simply they mean what they say and won't let it happen.

    At least not in the short term.

    And, I agree with you that in such a situation every scenario has been examined and is being examined, with early non-viable alternatives ruled out. Such as euro exit.
    May 29 11:37 AM | 2 Likes Like |Link to Comment
  • Will Labor Costs Return to Trend? [View article]
    Unit labour costs lie at the heart of future prospects.
    You ask "Under what circumstances might we expect unit labor costs to revert to trend?"

    My understanding of the point of the current recovery and macro-policy is to not revert to the trend you plot( red line), but establish a lower upward trend from where we are, and hence the talk of "rebalancing" the US economy.

    With a permanent decrease in labour costs, the US is achieving what is expected of Greece: a boost in competitive world markets, improvement of current account balance and growth that will take pressure off a large government deficit.

    In this light, the danger is to return to the red line itself.
    May 29 10:07 AM | 1 Like Like |Link to Comment
  • Will Greece Leave the Eurozone? [View article]
    You say "Greece is paying nearly 16% interest on its five-year government bonds. "

    Technically, it isn't.

    That is the market price of its debt in the secondary market, and an indicator of what Greece MIGHT have to pay IF it issued additional 5 yr debt; that is the estimated marginal cost of its 5 yr debt.
    May 15 08:04 AM | Likes Like |Link to Comment
  • Why the U.S. and China Want a Cheap Dollar [View article]
    Thank you for the informative article.

    China's investment abroad has three motives:

    1. in the short run it supplies funds to its export customers supporting growth in their economies and hence demand for its products. China is looking at the bigger picture on this one and recognises that a global recession is in no-ones interests. An elevated yuan does not help China in this aim.

    2. It helps to stabilise their currencies which relieves pressure on its own and relieves the importing of inflation into China. China has to consider its domestic policy which is driven by one overriding concern: to improve the living standards of its rural population. In this respect China does not want to elevate the Yuan at a rapid pace but do want to do that in line with its import buying.

    3. It is trying to improve its image abroad where people fear its intentions, distrust its motives and disrespect its efforts and standing.

    China does not need the US to acheive these objectives: there is no conspiracy.

    Its efforts in this regard with the US government match those of its efforts in Europe (its main trading partners) and Russia and the ASEAN bloc.
    May 14 05:56 AM | 1 Like Like |Link to Comment
  • BP to See 30% Upside [View article]
    I suspect the expert community of institutional investors and pension funds who certainly in the UK, have bought BP for its regular dividend and prominent position in the stock market, are underestimating the value of the Arctic Deal.

    It's not something they can easily justify in their portfolios.
    May 10 04:52 PM | Likes Like |Link to Comment
  • BP to See 30% Upside [View article]
    Bret, a nice assessment, I'm long on BP but bought at a higher range than it is currently trading.

    My understanding is that the oil reserves in Russia are at least the size of the north sea reserves. For only 3 companies over the next 2-3 decades, to get at at production costs well below average oil extraction costs now.

    Of course AAR behind TNK doesnt want to be excluded and will do anything to stay on the deal.

    Over 2-3 decades, a few months of squabbling is a drop in the proverbial ocean.

    Cheeryble, unfortunately a globally diversified company is not an automatic hedge against $ depreciation but it does go some way.

    In BP's case my reading of its operating margin accounts is that its E & P is from petrodollar countries whose fortunes and relative value are linked with the $ and its its refining and distribution income is more diversified but dominated by US/EU economic prospects.

    I hope others more familiar and expert on the matter comment
    May 10 02:58 AM | 1 Like Like |Link to Comment
  • Debunking Speculation About an Imminent Restructuring of Greek Debt [View article]
    Thanks for this article, it summarises EU options nicely. I agree that a restructuring isnt on the cards, nor is a Greek exit from Euro, the fallout is too great.

    Ultimately, the EU will come up with some measure to provide further support for Greece, and in turn the Greek govt will have to make more commitments to further change.

    Within that broad scenario, Greece will get breathing space to payback its debt and some form of "adjustment" that is not a default or does not involve haircustsand your coverage of options explains this well so thank you for that.
    May 9 07:01 AM | 1 Like Like |Link to Comment
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