South Africa's rand falls to its lowest level in four years as clashes between mine owners and workers erupt again today. Government "heavy-handedness" with mining companies has created a "major negative" for investors both inside and outside mining, as it reduces companies’ abilities to set their balance sheets and control their own destinies, Greenbriar Partners says. AU -3.3%, GFI -3%, HMY -2.6%. [View news story]
I agree that odds of nationalization are low but effective nationalization or seizure of a good portion of the assets as was done in Zimbabwe is conceivably a "solution." If it gets everyone back to work and stops the labor strife I think the mining companies might go for such a solution.
My personal opinion is that indirect nationalization makes the most sense in the platinum industry. Let Amplats buy the other producers out and in effect create a cartel. I find it offensive to say that but the cartel can kick back money to the employees, govt., etc. It is crazy but I think that is where South Africa is at and it might be the best bad solution given that the AMCU won't agree to centralized bargaining.
Agree about sleeping at night. I've got some platinum investments in SA but I'm mainly just hoping for an indication that things will stabilize in which case I might buy more but so far it just isn't even close.
I agree that there is much that could be done to make the economy operate better and enrich lives but the Fed doesn't get to regulate much aside from the banks and monetary policy. When it comes to monetary policy they are required to try and fulfill their mandate.
Maybe the acts of the Fed are so bad that they are going to drive the economy into a ditch and not fulfill their mandate, maybe if they stick to a tight monetary policy the rest of those responsible for the economy (people and govt. - excl. Fed) would take actions that would result in price stability and maximum employment but I honestly don't think so and if they tried they would be replaced as America is far different from Germany/EU.
South Africa's rand falls to its lowest level in four years as clashes between mine owners and workers erupt again today. Government "heavy-handedness" with mining companies has created a "major negative" for investors both inside and outside mining, as it reduces companies’ abilities to set their balance sheets and control their own destinies, Greenbriar Partners says. AU -3.3%, GFI -3%, HMY -2.6%. [View news story]
I don't claim to know what is going to happen but closing the mines is not legal without proper consultations and if they actually do close the mines (or even if they don't) there is going to be violence. For all practical purposes the AMCU is indirectly seizing the mines. The model is Zimbabwe or perhaps the pre-financial crisis U.S. automobile industry.
Seems crazy but that is the way it looks to me. Hope I'm wrong.
Senate Slams Apple On Tax Avoidance [View article]
I agree it is simply political grandstanding to criticize Apple and Microsoft but the rules should change. If you get a chance I'd be interested in hearing what you think of the following:
I'm in favor of ridiculously low corporate income tax rates but the current system greatly favors international companies and creates lots of work for tax accountants and economists to put these structures together and then support the prices under the rules as they stand.
It is the prices that are aggressive. I'm sure that Apple has lots of good support for all the profits being allocated to the low/no tax subsidiaries but in the end it is simply amazing how all the profits wind up in these subsidiaries. If they were truly arms length transactions (as they are required to be) we would occasionally hear about companies with extremely high tax rates but year after year and company after company it is the no/low tax jurisdictions that have the profits and it is just really hard to accept that the transactions within the corporate groups are fair.
David, At some point in time nominal (not necessarily real) growth will pop out, we just don't know where.
The stock market increases might result in yacht production skyrocketing. It might be that people begin to anticipate inflation and run out and buy cars to beat the increase leading to increased auto production. All sorts of different scenarios can result and we won't know what will happen until it happens.
There is no precedent for the current market, writes The Fat Pitch. Consider: 1) The S&P (SPY) has been up 56 of 88 trading sessions this year 2) It's up an uncorrected 24% since the post-election low - the longest streak in over 3 decades 3) The Nasdaq (QQQ) is on pace for a 7th straight up month, an occurrence with a 3-in-100 probability. Long term it's bullish, writes Ukarlewitz, as this sort of strength is rarely the end of a trend. Short term? Stay nimble. [View news story]
How are the hedge funds and private equity giants losers?
The biggest losers I see are those with money invested conservatively. Obviously, they aren't the only losers but they are likely the largest.
Find the final point containing a point about how the Euro zone is going to benefit from easier money policies interesting. It is something I've thought too but who benefits is an interesting thing to contemplate. Euro exporters lose competitiveness yet most asset prices benefit along with those selling (and buying) the imported goods.
An independent appraisal on the value of J.C. Penney (JCP +2.7%) stores and corporate buildings came in at $4.06B, according to a SEC filing (8-K). The mark appears to be well below what Morgan Stanley tabulated the assets to be worth just last week. [View news story]
The value of $4.06B assumed that JCP was completely shut-down (dark). The appraised value on a lit basis was $7.4B.
Not familiar with what Morgan Stanley said, but lit versus dark is an important distinction and the $7.4B figure probably should have been mentioned in the note.
Bernanke The Washington Super-Whale, Hedge Fundies And The Widowmaker [View article]
Great article. I always thought, and still think, than rather than having the Fed print money (and drive the asset prices of the wealthy up) to create additional spending, we should have cut payroll and other taxes and just run massive, massive deficits.
There have been studies that say that people just pocket the savings and spend little of it thus the impact on the economy is small. I think they are right, but wouldn't that have been a better solution than just driving up asset prices and lowering interest rates in the hope that it would drive consumer spending or new investment. The distributional aspects of Fed versus Fiscal seem terrible to me and I'm generally not a person who worries about income inequality.
Sure there would have been negative consequences from massive tax cuts but it is hard to imagine their being worse than runaway asset price inflation.
Obviously things aren't static but a 5% increase in the price of clothing, groceries, services, etc. is going to have an impact on margins. It will help with the governmental fiscal problems too.
Dramatic Improvement In Federal Finances [View article]
Would be interesting to know where the revenue is coming from. Payroll and other tax increases get talked about, but capital gains taxes resulting from Fed actions are an aspect as well.
A new twist in the legal battle between AIG and BAC as a judge rules the insurer did not give up its right to sue BofA over $7B in MBS-related losses even though it unloaded the paper as part of its bailout. The FRBNY has already settled with BofA over MBS its Maiden Lane II took in from AIG as part of the rescue. [View news story]
Makes sense. They are suing under provisions covering mis-statements in offering statements. If you buy shares when a company goes public because of inaccuracies in the offering circular, the shares price plunge and you sell do you sell the rights to sue?
Usually you don't, but Countrywide had some arguments here.
Adobe Goes 'Cloud Only': (Grisly) Film At 11 [View article]
Interesting article. Most shareholders are worried about revenue streams but not considering whether or not users will just say forget it, I will try and figure out another way to do what I need to do.
Are there viable alternatives to ADBE? If not, it sure looks like longer term revenues should be enhanced.
Don't Believe European Bank Capital Ratios [View article]
Shooting from the hip a little here but don't U.S. banks net exposures with counter-parties while European banks show both the asset and liabilities? Kind of becomes an apples and oranges calculation.
Truth is, even in America it becomes quite difficult to compare as one firm's loan portfolio is likely to have very different characteristics from the next. Still, as investors we have to try but as someone who has been spending some time looking at the European banks it is easy to get discouraged and just say it is impossible.
Anyone who wants to get scared, look at SNS Reaal failure. If one only looks at their financials, you would have never known they were about to fail.
MBIA Announces Comprehensive Settlement with Bank of America [View article]
The structured finance unit only has around $540 M in equity so unless the parent infuses equity into the company the hit from the settlement should be limited to this amount. The State of New York bailed them out and at this point in time it looks like it will stand.
Of course, there are a million other twists I'm sure I'm not aware of.
South Africa's rand falls to its lowest level in four years as clashes between mine owners and workers erupt again today. Government "heavy-handedness" with mining companies has created a "major negative" for investors both inside and outside mining, as it reduces companies’ abilities to set their balance sheets and control their own destinies, Greenbriar Partners says. AU -3.3%, GFI -3%, HMY -2.6%. [View news story]
http://econ.st/1a6qFNP
My personal opinion is that indirect nationalization makes the most sense in the platinum industry. Let Amplats buy the other producers out and in effect create a cartel. I find it offensive to say that but the cartel can kick back money to the employees, govt., etc. It is crazy but I think that is where South Africa is at and it might be the best bad solution given that the AMCU won't agree to centralized bargaining.
Agree about sleeping at night. I've got some platinum investments in SA but I'm mainly just hoping for an indication that things will stabilize in which case I might buy more but so far it just isn't even close.
Money Isn't 'Easy': 9 Points [View article]
http://bit.ly/yYmMK7
Maybe the acts of the Fed are so bad that they are going to drive the economy into a ditch and not fulfill their mandate, maybe if they stick to a tight monetary policy the rest of those responsible for the economy (people and govt. - excl. Fed) would take actions that would result in price stability and maximum employment but I honestly don't think so and if they tried they would be replaced as America is far different from Germany/EU.
Time will tell.
South Africa's rand falls to its lowest level in four years as clashes between mine owners and workers erupt again today. Government "heavy-handedness" with mining companies has created a "major negative" for investors both inside and outside mining, as it reduces companies’ abilities to set their balance sheets and control their own destinies, Greenbriar Partners says. AU -3.3%, GFI -3%, HMY -2.6%. [View news story]
Seems crazy but that is the way it looks to me. Hope I'm wrong.
Senate Slams Apple On Tax Avoidance [View article]
http://on.ft.com/12rpXb4
I'm in favor of ridiculously low corporate income tax rates but the current system greatly favors international companies and creates lots of work for tax accountants and economists to put these structures together and then support the prices under the rules as they stand.
It is the prices that are aggressive. I'm sure that Apple has lots of good support for all the profits being allocated to the low/no tax subsidiaries but in the end it is simply amazing how all the profits wind up in these subsidiaries. If they were truly arms length transactions (as they are required to be) we would occasionally hear about companies with extremely high tax rates but year after year and company after company it is the no/low tax jurisdictions that have the profits and it is just really hard to accept that the transactions within the corporate groups are fair.
Money Isn't 'Easy': 9 Points [View article]
At some point in time nominal (not necessarily real) growth will pop out, we just don't know where.
The stock market increases might result in yacht production skyrocketing. It might be that people begin to anticipate inflation and run out and buy cars to beat the increase leading to increased auto production. All sorts of different scenarios can result and we won't know what will happen until it happens.
There is no precedent for the current market, writes The Fat Pitch. Consider: 1) The S&P (SPY) has been up 56 of 88 trading sessions this year 2) It's up an uncorrected 24% since the post-election low - the longest streak in over 3 decades 3) The Nasdaq (QQQ) is on pace for a 7th straight up month, an occurrence with a 3-in-100 probability. Long term it's bullish, writes Ukarlewitz, as this sort of strength is rarely the end of a trend. Short term? Stay nimble. [View news story]
The biggest losers I see are those with money invested conservatively. Obviously, they aren't the only losers but they are likely the largest.
Money Isn't 'Easy': 9 Points [View article]
An independent appraisal on the value of J.C. Penney (JCP +2.7%) stores and corporate buildings came in at $4.06B, according to a SEC filing (8-K). The mark appears to be well below what Morgan Stanley tabulated the assets to be worth just last week. [View news story]
Not familiar with what Morgan Stanley said, but lit versus dark is an important distinction and the $7.4B figure probably should have been mentioned in the note.
Bernanke The Washington Super-Whale, Hedge Fundies And The Widowmaker [View article]
There have been studies that say that people just pocket the savings and spend little of it thus the impact on the economy is small. I think they are right, but wouldn't that have been a better solution than just driving up asset prices and lowering interest rates in the hope that it would drive consumer spending or new investment. The distributional aspects of Fed versus Fiscal seem terrible to me and I'm generally not a person who worries about income inequality.
Sure there would have been negative consequences from massive tax cuts but it is hard to imagine their being worse than runaway asset price inflation.
Japan Implications Not All Rosy [View article]
http://bit.ly/15ZgRIH
Obviously things aren't static but a 5% increase in the price of clothing, groceries, services, etc. is going to have an impact on margins. It will help with the governmental fiscal problems too.
Dramatic Improvement In Federal Finances [View article]
A new twist in the legal battle between AIG and BAC as a judge rules the insurer did not give up its right to sue BofA over $7B in MBS-related losses even though it unloaded the paper as part of its bailout. The FRBNY has already settled with BofA over MBS its Maiden Lane II took in from AIG as part of the rescue. [View news story]
Usually you don't, but Countrywide had some arguments here.
Adobe Goes 'Cloud Only': (Grisly) Film At 11 [View article]
Are there viable alternatives to ADBE? If not, it sure looks like longer term revenues should be enhanced.
Don't Believe European Bank Capital Ratios [View article]
Truth is, even in America it becomes quite difficult to compare as one firm's loan portfolio is likely to have very different characteristics from the next. Still, as investors we have to try but as someone who has been spending some time looking at the European banks it is easy to get discouraged and just say it is impossible.
Anyone who wants to get scared, look at SNS Reaal failure. If one only looks at their financials, you would have never known they were about to fail.
MBIA Announces Comprehensive Settlement with Bank of America [View article]
Of course, there are a million other twists I'm sure I'm not aware of.