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  • General Motors (GM +2.9%) CEO Dan Akerson adds some more insight (video) to his plan to cleanse long-standing "fiefdoms" from the company's corporate hierachy. Under the plan, power will shift from regional chiefs to global leaders in areas such as manufacturing, IT, and marketing. The plan will also include a new accounting system with greater transparency. [View news story]
    Appears Akerson has read about Marchionne, how to structure a car company. Unfortunately he must have skipped the chapters about guts, charisma and leadership.

    If I were Obama (sic!), I would get Marchionne on board pronto. After all the guy owes him somewhat for getting Chrysler for next to nothing - but then did a herculean top job to turn it around.
    Aug 17, 2012. 06:03 PM | Likes Like |Link to Comment
  • Market recap: Late-day selling picked up as the euro dove to lows on headlines from former Greece PM Papademos, who said a Greece exit from the euro is being considered and would have "catastrophic" consequences for Europe. A rebound in JPM lifted bank stocks. Crude oil slid 1% to $91.66 on signs of progress with Iran. NYSE decliners led advancers five to three.  [View news story]
    Let s not get carried away. As it looks these days, Greece is a has-been Euroland. And by now all and sundry know it and this is already 'priced in'. The Greek (hi-)story has not - and will not - change. Is it allowed to quote ones old posts, if still relevant, imho? Here an excerpt:

    "...During the previous century or so, Greece had just about every type of upheaval, occupation, civil unrest, unholy government, military dictatorship, looting politicians. Greece defaulted 5 to 9 times on its debt, depending where you are looking for 'facts'. Consensus appears, though, that Greece spent over 50 years out of the past 100 in default! Greek GDP and other vital stats mean absolutely nothing. Some estimate more than 60 % of the economy is underground, cash and barter based. Most of mobile assets are held off shore. .."

    And here the link to the full post, including some remedies that might have worked, or at least gone a long way, to mitigate the disaster, establish some credibility and trust. But, as in the past, the political will is being corrupted at the source, if it ever was there, for for such measures to be taken.
    May 22, 2012. 07:07 PM | Likes Like |Link to Comment
  • 5 French Stocks On Sale For A Limited Time Only [View article]
    Agree with the view that French stocks may take an unjustified hammering at the moment.
    The French blue chips represented in the CAC 40 index are trailing the DJI and the German DAX since some time now.
    See no reason why there would not be a catch up of the index with a socialist president. It is quite common that leftist European governments are those best capable to push through reforms. Recent example is Germany, reaping the benefits of Schroeder (the socialist) actions.
    And let s not forget the global nature of the business of many of the CAC 40 companies, mentioned in the article above, as well as Air Liquide, LVMH, l Oreal, Michelin, EADS, Danone, Carrefour etc, where the impact of local politics and the domestic economy are limited.
    Apr 19, 2012. 06:15 PM | Likes Like |Link to Comment
  • Boosted By Bernanke, Stocks Overlook Housing Data [View article]
    When talking about Global Sentiments, dont forget this European heavyweight
    Mar 26, 2012. 06:03 PM | Likes Like |Link to Comment
  • Europe stocks rally time! Seriously, Ben Levisohn notes, panic appears to be abating a bit, as wobbly banks absorb their money flood and sovereign debt sales go better. Do you think there's value to be found in the Stoxx 50 (ETF: FEZ)?  [View news story]
    Yep. A month or so. Never mind the Stoxx, look at the Dax for instance.
    Bunch of yo-yo investors. One day exuberant, next day scared stiff, throwing all their macro logic, fundamentals overboard (also forgetting that GDP figs, official stats, mean little for the Club Med countries, where the economy buzzes under the table - up to estimates of 50 % of economic activity).
    Think about it. Where are some of the best, market dominating companies in the world at home - from the quasi monopoly luxury brands to chemicals to food to exclusive mechanical engineering, specialty machinery, tools, electronics and on it goes?
    Jan 21, 2012. 11:06 AM | Likes Like |Link to Comment
  • Baltic Dry Index Is The Most Alarming Chart Of The Week [View article]
    How about the Chinese New Year as the main culprit?

    In any case here is a far more nuanced and professional analysis of whats happening in dry bulk shipping imho
    Jan 20, 2012. 06:44 PM | 7 Likes Like |Link to Comment
  • 2011 Stock Market Returns By Country [View article]
    God bless you and your good faith in America. I sincerely hope you are right.

    I also moved to the US, over 30 years ago, and staid for the good part of two decades. NY was bankrupt then but I made good (and honest) money. I could afford to rent a coop opposite the Metropolitan Museum (that was possible in those days), take the Concorde, the culinary revolution then started, with 'Northern Italian' en vogue, but I stuck to the ole Gallagher's, Palm and for the occasional Frenchy stuff, André Soltner's Lutèce, la Grenouille and so forth. Poverty, public health, education, racial tension, safety in the streets were serious issues then but I ve just blanked it out because for me America was the greatest. I did not (want to) see anything else. Like these days, the 40+ Million food stamp recipients, the 'technical' illiteracy, the de-industrialization, the delirious borrow-and-spend instead of produce-and-earn mentality, the hopeless balance of payment and so forth.

    Unlike you, I am sad - or even scared - of what I am also seeing these days and which did not exist in 'my' America, as imperfect as it was:

    The mother and father of all corrupt and democracy destroying inventions, coming from the darkest side of this otherwise beautiful country: The powers there are, giving away money they created, out of thin air, for free, to a chosen few and rigged the system in such a way to allow them to also socialize their losses and privatize their profits. If nothing changes, America is bound to implode as the USSR did. Just a question of time.

    But you are right in one way: I also keep on investing in the DJ – most of the quoted flag ships production, sales and bottom line are offshore, in forex, anyway. And if need be, they can move their incorporation, listing, too, as Halliburton did.
    Dec 31, 2011. 01:46 PM | Likes Like |Link to Comment
  • The latest data shows continued deterioration in Greek tax revenue, income taxes collected through November coming in 9.3% less than last year, suggesting the budget deficit will balloon above 10% of GDP. The Finance Ministry has alerted all state organs not to spend a euro above their budgets and that they should not take for granted even budgeted funds will show up in their bank accounts.  [View news story]
    ...up to 40 % of economic activity and even higher, by some estimates. So any GDP stats and numbers derived from this figure are totally meaningless. But the Eurocrats steadfastly hang on to 'the only numbers they have' - even if it is utter nonsense. Some kind of biz media economists desperation - unable to function without figures even if they are bogus.
    Let the Greeks drop to half their official GDP and witness that, by and large, they ll survive ok.
    Have we heard of Greek housing foreclosures? The Orthodox church, the Popes, the richest people in the land, paying taxes? The Greek shipowners, the second richest people, being taxed worldwide, similar to the US? The politicians, the union fat cats being taken to the cleaners for their absurd benefits?
    Introduce the Drachma as second currency for all domestic cash transactions, keeping the Euro for non cash payments, foreign trade, tourism, debt and business transactions. Not the first time split currencies, at different rates of exchange, are in force in the same country.
    May I add, with all due modesty, that I ve suggested it here long before a WSJ Blog came to a similar idea

    Dec 29, 2011. 08:41 PM | 4 Likes Like |Link to Comment
  • Don't Be Fooled, Gold Will Soar In 2012 [View article]
    For whatever it is worth:

    According to my banker, the popular French Napoleon Gold coins, usually readily available in the very liquid physical gold retail supermarket Geneva, have completely disappeared. Apparently the citizens of France do their trust/confidence voting with their feet, across the nearby border...
    There is also temporary delay in supplies of other coins. Bullion are readily available.
    Dec 19, 2011. 09:40 AM | 1 Like Like |Link to Comment
  • U.K. 10-year borrowing costs are now cheaper than those of Germany for the first time since 2009, with gilts yielding 2.19% and bunds 2.21%. "Going, going..With German bunds yielding more than gilts, the euro crisis has moved into its final phase. Germany must act or it's game over," says Jeremy Warner.  [View news story]
    As some analyst said, Germany is the first class passenger on the Euro Titanic. One way or the other, however, they will get out of the mess - eventually. Just sit back and then look at German assets.

    Sad to say, but, in contrast, the UK will not hack it. A gov busy window dressing, nationalized Ueberbanks, already high inflation, deficit, total debt (gov, private, biz), worse than the US, Japan, Eurozone countries. On the asset side of their balance sheet, they really have not that much to offer other than the City, with their house of derivative cards, flimsily veiled offshore tax havens, and dwindling North Sea oil/gas. Add to it an education system that is churning out a frightening mass of practically illiterate youngsters. God save the Queen.
    Nov 24, 2011. 04:54 PM | 1 Like Like |Link to Comment
  • Stocks Plunge On More Euro Fears [View article]
    Euro fears? Really? Just check Bloomberg... 21 minutes later...

    U.S. Stocks, Commodities Extend Losses as Euro Erases Gain on Debt Crisis
    By Michael P. Regan and Inyoung Hwang - Nov 17, 2011 10:54 PM GMT+0100

    Euro Strengthens Against Most Major Peers as ECB Purchases Italian Bonds
    By Allison Bennett and Catarina Saraiva - Nov 17, 2011 11:15 PM GMT+0100

    Bloomy sounds like the Fed: Just making things up, out of thin air - or do I get something wrong (English is not my mother tongue)?
    Nov 17, 2011. 05:38 PM | Likes Like |Link to Comment
  • Goldman Sachs (GS) and JPMorgan (JPM) have sold CDS protection on more than $5T of debt around the globe, just don't expect to get detail on whom it was sold, who the counterparites are, or how the banks have hedged themselves (perfectly if you ask the banks). Only a run - similar to what has occurred to Jefferies (JEF) - is likely to force them to divulge any more information.  [View news story]
    Why are Obama, Geithner et al desperately urging the Europeans 'to get their house in order'?

    Because if one of the 'netted' CDS counterparties around the world seizes up and starts the infamous domino and, say, only a couple of percentages of those trillions of 'notional' suddenly become very real, the WS betting parlors are toast as toast can be.

    And where are these trillions booked? Off balance sheet, of course. Only their +/- replacement values, deviously 'netted', are shown on the real thing. Derivative 'netting' is the mother of all deceptions to make these bucket shops look less ugly.
    Nov 16, 2011. 04:41 PM | Likes Like |Link to Comment
  • Portuguese President Anibal Cavaco Silva calls for the ECB to end this thing with "unlimited" purchases of EU sovereign debt. "The ECB has to go beyond a narrow interpretation of its mission." This idea is not new to the punditry world, but it may be the first call for such action by a leading government official. Europe romping, Stoxx 50 +2.5%.  [View news story]
    Just remember where these good ideas are coming from - and being pushed for the ECB to adopt: Look at the Feds balance sheet (they call it Factors Affecting Reserve Balances of Depository Institutions) The Fed, the proud owner of a couple of trillion or so of mortgage backed securities, treasuries, the infamous Maiden Lane portfolios and so forth.

    I really wonder why they can't circumvent the primary dealers , the Treasury and for 'helicopter Ben' to hand out mortgages, car-, student- and home loans directly. For starters, it would save a lot of commission and maybe get rid of some of these capitalism destroying 'privatize profits - socialize losses' parasites, posing as investment bankers.

    No wonder at least the Germans resist this gigantic Madoff game, the Fed has adopted and once posted about a bit emotionally (the figs are different but the whole sham is still the same, as described by the letter to the FT quoted above)
    Nov 11, 2011. 01:01 PM | 1 Like Like |Link to Comment
  • The Italy Factor Gets Ugly [View article]
    Yep – under consideration, for my higher risk PF, similar to AIG, BofA forex bonds, after the subprime and bailout mess, with a yield, I could not get anywhere else and with the de facto Uncle Ben default insurance, whether he likes it or not, still in place.

    For Italian sovereigns, I am looking at medium term forex bonds, expecting the ECB to fess up to their implied obligation, similar to the Fed. And if there are hick-ups, but considering the time it takes for haircuts to apply, I speculate that some interest payment on well below par as well as forex gains will have softened the blow.

    Lets also not forget the forex situation $ vs €, CHF. Over ten years, the $ is still down close to 50 % vs. the € and 90 % or thereabouts vs the Swissie (or these currencies costing more in $ terms). And I do not expect this to change dramatically anytime soon...


    Disclaimer: this is no recommendation, just my thoughts, made public and buying restrictions may apply, depending residence
    Nov 11, 2011. 05:06 AM | Likes Like |Link to Comment
  • The Italy Factor Gets Ugly [View article]
    I know Italy has problems but it appears facts, fundamentals, putting things in perspective, are totally out of fashion at the moment and emotion, fear mongering has taken over. Especially the UK media delight in having a go at Italy. Obviously they badly need some side show when loaded with more problems than the Prime Minister probably dares to tell when he has to report to the Queen

    Hearing so much doom and gloom, I am really tempted going long on Italy:

    They are running a primary budget surplus, so no new debt needed for government operations – unlike the US, UK, France, others.

    Private wealth is among the highest in the world, far outstripping the US (source FT 22 Dec 2010)

    More than half the government debt of 1,8 trillion is held domestically, a fraction of private wealth estimated at 9 trillion.

    Italy produces real things. Industrial activity is about 30 % of GDP. They are the second largest exporter in Europe after Germany.

    The Italy brand is second to none from anything fashion, culinary to precision mechanic, chemicals, top line appliances, furniture to cars and - let s not forget - one of Europe s year round favorite tourist destinations.

    Private debt is 78 % of disposal income vs 130 % for the US (source: FT 22 Dec 2010)

    The unofficial, the cash and barter economy is estimated at over 25 % of all output. So Italy s official GDP is far too low and Italians have enough cash under their mattresses to weather even a protracted Berlusconi demise nor will there be a retail bank run.
    Nov 10, 2011. 07:06 PM | 1 Like Like |Link to Comment