Keep Calm? Carry On?

Fri, 2017/11/24 - 1:37pm | Your editor

 

The big news very early on Thanksgiving Day was that China's large-cap stock index lost 3% in one day, despite the newbie local investors' belief that the government will intervene to stop losses. Nothing happened and the CSI fell fractionally again today. China imposed rules restricting loans to its “shadow banks” which invest wildly and charge huge sums for overdrawing your account. The Shenzhen market where Hong Kong stocks trade fell 2.9% in sympathy.

The tech share I sold half of earlier this week fell by 4.65% in Hong Kong today. Did I catch the bottom? I have no idea, but the Hong Kong market closed the week up 0.53% after falling another 3% today while Shanghai also closed on a feeble note. The S&P China index fell by 1.1% Friday. US tech stocks did not react so far, and rose only modestly in the wee hours.

 

Meanwhile Moody's upgraded India to BAA2-stable which is an investment-grade rating with moderate credit risk—the first such rise in 14 years.

 

Never mind “Keep calm and carry on”. Rumors of shots having been fired in Oxford Street in London led to a panic among shoppers there who fled from the shopping street. An old lady and a man carrying a child were knocked down in the panic and for a while the London Underground did not stop its trains at Bond Street, the nearest station to the middle of the shopping Street. The police said there were no shots but there also was less shopping. A Lithuanian company is beidding to buy Polish retailer Emperia, but not before Christmas—assuming Warsaw allows this. Meanwhile the dollar fell against most currencies helping our portfolios.

 

The Great Black Friday is upon us, and as per usual these days, chaos has ensued. My paper from England, not delivered yesterday, but available in a squinty on-line edition, was also not delivered today. I called the Financial Times US line repeatedly with long waits until I gave up and agreed to be phoned back, but of course nobody phoned back. And there were no Financial Times copies at my local newsagents'. Our household computer meanwhile crashed after a windows 10 update and could not be connected to either the printer or the internet. My office printer upgraded itself and could not recognize my email address. I reset my password and the HP system sent a confirmation of my new password, but then the printer would not allow me to print from my nearly new HP desktop computer. And so it goes.

 

I cannot print my coupons for Black Friday savings. As I have to take the home laptop back to the store and also buy new printing ink for my computer, I will not have time to shop shop shop spend spend spend during the starter day of the race till Christmas and Chanukah. This is just as well as I have been selecting suitable gifts and goodies for the grandchildren for months as I stumbled upon them, and they are already already gift-wrapped.

 

More for paid subscribers follow before I go to the computer store to get help. We have news from around the globe as other markets did not do Thanksgiving yesterday or at all. We have a note about Iran, unusual for this blog, and from Argentina, Britain, Brazil, Canada, Chile, Hong Kong, Ireland, Israel, Mexico, Spain, and Australia. We have two company quarterly results which came out yesterday as well.

Read more »

Thanksgiving Eve

Wed, 2017/11/22 - 1:43pm | Your editor

It turns out that the difficulties I am facing with a check received in sterling which I am attempting to deposit to my US bank is not unique. The International IBAN (International Bank Account Number) numbering system which is supposed to enable people to transfer money within the Single European Payments Area (SEPA) often takes as long as two to three months to make a payment. This causes problems for people who are paying from Germany bills for insurance, telephones, local taxes, or utilities outside Germany but still within the EU. Foreign workers in Germany are being forced to buy German insurance policies because banks will not make the payments to an insurer in eastern European EC countries. Only German insurance may be paid for from within Germany despite the EU directive.

On-line orders can only be accepted for German addresses using German euros on German websites.

As a result, the Frankfurter Allgemeine Zeitung reports, a case is being brought against German banks in a Frankfurt court. The EU directive covers all the members of the EU, currently including Britain, plus Iceland, Liechtenstein, Noway, Switzerland, Monaco, and San Marino, all of which use a common IBAN number for any foreign account. The IBAN number is also used by US banks making transfer to Europe.

With the US crackdown on foreign bank accounts under the FATCA law Americans owning property abroad, like me, have to carefully manage their overseas accounts to make sure there is no more than $10,000 in them at any time. We thereby incur hefty charges from our friendly local USA banks because transfers have to be done more often. And forget about buying gifts for delivery to relatives outside the US.

The worst of it is the case of a stock we own whose IR refuses to send news about the company to me because I do not have a UK telephone number revealed to paid subscribers.

 

On the eve of le Jour de Merci-Donnant even markets run by lesser breeds who don't have Turkey Day are pretty quiet. Pres. Trump took great personal satisfaction from pardoning one of the two turkeys at the White House, but from my local daily newspaper which he hates, I learn that wild turkeys are pests not only in the Boston area where my son's family live but even in areas where turkeys were not around before the Puritans arrived, like the Pacific northwest.

Among the things I will be thankful for tomorrow is the beginning of a recovery of General Electric stock which was one of the first I bought some 60 years ago when I opened my first brokerage account, at an age which nowadays would be illegal, and without a social security number. Since then I never could afford the capital gains tax I would have incurred had I sold GE since my gains were in 6 figures the last time I looked. I am perfectly aware that one is not supposed to let tax considerations keep one from managing a portfolio, but this tax would have been hard to bear.
GE rallied because of a $1 mn+ buy by board member Francisco D'Souza of
Cognizant Technology.

Taxes also stop my selling AT&T and a few other portfolio stalwarts like Thermo-Fisher Scientific which is less common.

One of our stocks has a key symbolic role in the NY Thanksgiving Day Parade.

As we head for our feasts, note that Turkey is having problems with its lira hitting a new low of 3.96 to the dollar, and local bond yields soaring to 13.52% on fears that the government cannot or will not tame inflation.

More for paid subscribers follows from Belgium, Panama, Sweden, Hong Kong, Brazil, China, Britain, Panama, Colombia, Italy, Israel, and Canada.

Read more »

China Financials

Tue, 2017/11/21 - 2:53pm | Your editor

 

Today the Chinese financial system suffered a jolt because new laws imposed from Beijing hit some of the country's Wild East wealth management product firms. These are a danger to political and financial stability, because they are marketed to neophyte investors as being government-backed. In fact many of these are crooked get-rich-quick schemes,

Meanwhile established asset managers and insurance companies which do honest investing have gained hugely in trading in both China and Hong Kong today. We gained 4.3% from one of these favored finance sector companies today, bought as a bet China would clean up its act.

 

More from China, Hong Kong, Britain, Denmark, Canada, Brazil, Israel, Ireland, Finland, Chile, Malaysia, Vietnam, Singapore, Germany, Spain, Poland, Mauritania, The Gambia, Senegal, South Africa, Mexico, South Korea, Australia, Bermuda, and the USA.

Read more »

Foreign Exchange Fees and Delays

Mon, 2017/11/20 - 6:26pm | Your editor

 

Readers may want to know why my Sunday tables were not prepared yesterday and why today's blog is very late. An overnight update for Windows 10 or an update on my coaxial cable link to the world took down my computer, laptop, and telephone service in the office, and cut off my link to my printer. The cable guy came at 7 pm Saturdary and installed a new modem. The rest, Mark said, was up to what I call Macrohard.

After 4 hours on hold with Microsoft a nice techie in India gave me a local number in my own zip code to call for help, and they gave me an appointment for 11 am on Sunday morning. I took my laptop with me. After about an hour their tech support got the laptop working and told me how to make the changes needed on the desktop computer. I still haven't connected the printer to the two computers but that is not serious. The printer in our apartment used by my husband also went out. At some point when I have a couple of hours to spare I will call HP, maker of both my desktop and my printer who are also very good at passing the buck.

Today we discovered that our land-line to the world from our apartment has been cut off, probably not by Microsoft but by some other element of the robotic 21st century. We use a re-vender on a line owned by Verizon and VZ has been pitching its own services to us, and even billing us for it although no service was ever provided. Since my octogenarian husband is not adept with his cellphone I took on the matter of getting it reconnected. This occurred at 11:45 am. Verizon which owns the lines says there was a “programming error” which “was resolved.”

In my humble opinion, technology is out of hand even if you work at keeping current.

 

The headline in today's Financial Times reports that huge fines are going to be imposed on global banks for fiddling the foreign exchange rates to boost their profits. Among the banks is the one I use for my personal account, HSBC, which bought out the Williamsburgh Savings Bank taken over by Edmond' Safra's Republic National Bank where I had my account and our mortgage.

On Nov. 4 I received a check for £273 in sterling but sent to my US address with a copy to the IRS. It was for sale of warrants I have no recollection of ever subscribing from a firm I had bought shares in back when I ran a special advisory for institutional investors called minutewoman.com, which no longer publishes. It was a relic of a stock I had bought a decade ago called Trans-Siberian Gold, listed on the London AIM as TSG, a market which subsequently was closed to US retail investors in 2015. TSG had been taken over by South African gold interests. The stock no longer trades there. The check was for some long-term rights I had been granted then.

So I tooled over to my local branch of HSBC to deposit the check. This required two managers as well as the teller, and I was issued with a “foreign bank collection letter” and told that it would take 6 to 8 weeks to clear the UK check to me. The exchange rate and fees to be imposed was not disclosed and there was no way to find out. The money which will count as a capital gain will either land this year or next. My husband thinks I am an idiot for not simply using a family member's UK account to deposit the money when we hit London over Christmas, but having been audited frequently by the IRS because of the name of my business, I want to do things according to the rules. I am unsure if the dough will land in 2017 or 2018.
Naturally, I would prefer it if HSBC, itself a British bank, were not intent upon maximizing its “take” from this stupid mistake by the acquirers of TSG. More on this below on other banks affected.

 

More for paid subscribers follow from Australia, Chile, Colombia, Brazil, Mexico, Ireland, Switzerland, Denmark, Sweden, Britain, Ireland, Spain, South Kora, South Africa, Germany, Israel, Belgium, Bermuda, and Canada.

Read more »

Foreign Exchange Fees and Delays

Mon, 2017/11/20 - 4:40pm | Your editor

 

Readers may want to know why my Sunday tables were not prepared yesterday and why today's blog is very late. An overnight update for Windows 10 or an update on my coaxial cable link to the world took down my computer, laptop, and telephone service in the office, and cut off my link to my printer. The cable guy came at 7 pm Saturdary and installed a new modem. The rest, Mark said, was up to what I call Macrohard.

After 4 hours on hold with Microsoft and nice techie in India gave me a local number in my own zip code to call for help, and they gave me an appointment for 11 am on Sunday morning. I took my laptop with me. After about an hour their tech support got the laptop working and told me how to make the changes needed on the desktop computer. I still haven't connected the printer to the two computers but that is not serious. The printer in our apartment used by my husband also went out. At some point when I have a couple of hours to spare I will call HP, maker of both my desktop and my printer who are also very good at passing the buck.

Today we discovered that our land-line to the world from our apartment has been cut off, probably not by Microsoft but by some other element of the robotic 21st century. We use a re-vender on a line owned by Verizon and VZ has been pitching its own services to us, and even billing us for it although no service was ever provided. Since my octogenarian husband is not adept with his cellphone I am took on the matter of getting it reconnected. This occurred at 11:45 am. Verizon which owns the lines says there was a “programming error” which “was resolved.”

In my humble opinion, technology is out of hand even if you work at keeping current.

 

The headline in today's Financial Times reports that huge fines are going to be imposed on global banks for fiddling the foreign exchange rates to boost their profits. Among the banks is the one I use for my personal account, HSBC, which bought out the Williamsburgh Savings Bank taken over by Edmond' Safra's Republic National Bank where I had my account and our mortgage.

On Nov. 4 I received a check for £273 in sterling but sent to my US address with a copy to the IRS. It was for sale of warrants I have no recollection of ever subscribing from a firm I had bought shares in back when I ran a special advisory for institutional investors called minutewoman.com, which no longer publishes. It was a relic of a stock I had bought a decade ago called Trans-Siberian Gold, listed on the London AIM as TSG, a market which subsequently was closed to US retail investors in 2015. TSG had been taken over by South African gold interests. The stock no longer trades there. The check was for some long-term rights I had been granted then.

So I tooled over to my local branch of HSBC to deposit the check. This required two managers as well as the teller, and I was issued with a “foreign bank collection letter” and told that it would take 6 to 8 weeks to clear the UK check to me. The exchange rate and fees to be imposed was not disclosed and there was no way to find out. The money which will count as a capital gain will either land this year or next. My husband thinks I am an idiot for not simply using a family member's UK account to deposit the money when we hit London over Christmas, but having been audited frequently by the IRS because of the name of my business, I want to do things according to the rules. I am unsure if the dough will land in 2017 or 2018.
Naturally, I would prefer it if HSBC, itself a British bank, were not intent upon maximizing its “take” from this stupid mistake by the acquirers of TSG. More on this below on other banks affected.

 

More for paid subscribers follow from Australia, Chile, Colombia, Brazil, Mexico, Ireland, Switzerland, Denmark, Sweden, Britain, Ireland, Spain, South Kora, South Africa, Germany, Israel, Belgium, Bermuda, and Canada.

Read more »

A Busy Day and A Short Blog

Fri, 2017/11/17 - 3:13pm | Your editor

Despite what look like fumbles over the currency, Narendra Modi has strong support in India according to Pew polls. In India, 88% of he people view him favorably and, astonishingly, 83% are statisfied with the state of the economy.

There was no poll in Kashmir. And regionally, his favorable rating was loest in the north, at 84% which includes the capital, New Delhi and most Pakistan border areas.

Moreover 70% of respondents like the direction India is moving in, vs 29% who felt that way about the former Congress Govt.

Modi's vision for India appeals to the population. He wants to strengthen the central government, the military, and Indian society. The latter is the hardest because of Indian diversity of religion, languages, and (alas) castes. Of course as a Hindu nationalist, Modi gets the most votes with his taste for Hindu identity politics because that is the majority in India.

While there is great risk in Hindu nationalism, a unfied central governmnet could better use Indian talents and resources to increase its economic efficiency. The question is one of balance between minority rights and ambitions for growth.

 

Today's blog is late because I had to attend a ribbon cutting for my volunteer work as the editor of my local community bulletin for Sutton Place. It was for the Andrew Haswell Green park, named after the Robert Moses of the 19th century, a barely known figure who created New York City and many of its public institutions. The park was opened around the corner from here. Parks Commissioner Mitchell Silver made the comparison with Moses. However Green was a much less obnoxious planner than Moses.

 

I was corrected by a German born Maryland lawyer for my note last week about getting down the quilts I inherited. CA says that the German story about the woman who shakes out the quilts in the sky is not Frau Hoelle as I wrote by Frau Holle. Hoelle means hell in German. Entschudligen. Senior moment for me because my Hitler refugee mother rarely spoke German with me.

 

Today we have another shorty blog with news from Canada, Switzerland, Sweden, Japan, Denmark, India, Brazil, Mexico, Britain, Israel, and Ireland.

Read more »

Heine Would Have Loved This!

Thu, 2017/11/16 - 4:25pm | Your editor

 

The day before the catalogue was due to go to the printers, the Duesseldorf Stadtmuseum cancelled an exhibit on the life and work of the Jewish art dealer Max Stern. The exhibit was to open next March. The city fathers blamed “current demands for information and restitution in German museums. Teh exhibit was supposed to go on to Haifa, Israel, in September and Nissim Tal, director of the Haifa Museum said “it came as a big shock to us.” In 2019 its was supposed to move to Montreal.

Max Stern took over the Duesseldorf art gallery from his father in 1934, a year after Hitler came to power. After 1935, as Jew, Max Stern could no longer be an art deal and had to sell the contents at an auction in Cologne. He fled to London in 1938 and later settled in Montreal. He died childless in 1987 and left his estate to Concordia and McGill universities in Montreal and the Hebrew University in Jerusalem. The 3 universities in 2002 launched a campaign to recover 400 of the auctioned art, the Max Stern Art Restitution Project.

The cancelled exhibition was focused on Stern's life and work and would not have addressed current claims, which makes the Duesseldorf cancellation odd. The head of the Duesseldorf Jewish Community commented that the cancellation was because of “fears on the part of the city that some works will have to be returned to the heirs of the rightful owners” and “the wish to avoid this” The Duesseldorf mayor recently had to give up a painting that hung is his office, The Artist's Childern (1830 by Willhelm von Schadow). Another painting Sicilian Landscape,(1861by Andreas Achenbach) from a private collection which had been exhibited in the city's Museum Kunstpalast was removed in July after the Max Stern Art Restitution Project filed a claim. However the Stadtmuseum gave no information about restitution claims from the planned exhibit on Max Stern

The funding for the Max Stern exhibit had mostly come from the Montreal Jewish community.

Duesseldorf in 1965 named its university after Heinrich Heine who was born there. During the Nazi years his best loved German poem, Die Lorelei, was rebranded as a folk song. By the time Heine wrote the ironic poem about the mermaid who lured sailors to their death he had converted to Christianity but under Nazi rules he was still a Jew.

More for paid subscribers from Mexico, Spain, Argentina, Brazil, Britain, Norway, the Dutch Antilles Denmark, Hong Kong, South AFrica, Switzerland, Israel, and Brazil, including a way to get your very own Nazi Stormtrooper.

Read more »

Talk Markets Update

Wed, 2017/11/15 - 7:35pm | Your editor

Before I head out for the investor day of Fibra Uno, here is a message from Boaz Berkowitz of TalkMarkets.com where my newsletter will be the guinea pig for a new service: subscription fulfillment. This by the techies at talkmarkets led by a Florida chief technology officer born in the country the UN calls FYROM, Macedonia for the rest of us, and a Skopje-based webmistress named Tanja. Our former webmaster Andrew is now working full-time for the university in Newfoundland where he lives, why I agreed to help Talkmarkets move into website management.

Here is Boaz Berkowitz's latest update from central Israel. I helped fund the TalkMarkets startup in my own small way and am making another investment this month. He writes: Read more »

Another Down Day

Wed, 2017/11/15 - 4:28pm | Your editor

Today the Frankfurter Allgemeine Zeitung broke a major US story, that Mohammed El-Erian is being considered for the role of deputy chairman of the US Federal Reserve. The former deputy head of the International Monetary Fund, former co-chief of Pimco, and former chief investment officer of the Harvard Endowment is a Brooklyn-born US citizen of Egyptian heritage who currently serves as chief economist at Allianz SE, Pimco's parent, in Germany, which may explain how FAZ got the news. He would replace Stanley Fischer who announced his resignation. Mr Fisher is an American dual national who used to head the Israeli Central Bank.

Given Pres. Trump's frequent nasty anti-Muslim rants, this nomination would greatly improve his and our country's reputation. We need for fair play and recognizing talent among Muslims both in the Middle East and in middle America. And the Fed under its new lawyer chairman needs a top economist. This article was then confirmed by the Wall Street Journal blog which, however, ran a picture of the NY Fed building, not the one where the head Fed works, in Washington DC.

 

Meanwhile several notes from BoA-Merrill Lynch Global Research are forecasting for 2018. The Thundering Herd expects Mexican growth to be higher this year than predicted earlier, a 2.1% rise rather than merely 1.9% this year and, because of statistical carry, a slower growth level next year, to only 1.6%, now the consensus level. I think with a lower peso it can go either way.

On Canada the bank expects forex changes weakening the loony next year, to US$1.33 per by Q2 2018 because it expects flat oil prices and no rate increases by the Bank of Canada (central bank) in Dec. or Jan. That would boost the greenback against the C$. Later next year Merrill thinks that drop may reverse. Also Canada is losing direct investment and also will rus a potential trade deficit equal to “ a shocking 8% of its GDP,” from 4.8% now, Merrill writes. The great unknown is what happens over Nafta negotiations.

Meanwhile Merrill's Global Fund Manager survey discovered that just under a quarter of equity investors, 23%, think that corporate balance sheets are over-leveraged, particularly the “frothy FAANG” stocks which are “no longer creating value for shareholders” by borrowing to fund share buy-backs “at current valuation levels”. FAANG (invented by Jim Cramer) stands for Facebook, Amazon, Apple, Netflix, and Google, now Alphabet, but the acronym was too good. They now account for ~15% of US GDP, and at mid-2017 had all risen by 30% in 2017 except Alphabet whose new name confused investors, up only 25%.

Trump-boosters at JP Morgan Chase are now saying that there will be 4 US interest rate hikes in 2018 which worried Wall Street out of its enthusiasm for a tax reform package.

 

More on Mexico, FAANGs, drug stocks, Islam and reporting companies, plus news from Abu Dhabi and Latvia, both new coverage places for us, and plenty more. Today's blog is heavy because of news and because I will be attending an investment day with one of our Mexican shares tomorrow so the blog then will be late or non-existent. We have a new stock pick today as well.

Read more »

The Stock Magic Is Going

Tue, 2017/11/14 - 2:18pm | Your editor

China issued data showing that growth is slowing, which had an impact on raw materials prices. It is also tightening credit to cut risks to its economy.

It turns out that the volume of on-line sales during China's singles day—11/11—this year was up 48% from 2016. It his the equivalent of $38.1 bn, beating all other shopping days in the world, again, like Thanksgiving Friday. The news failed to boost Chinese internet stocks further in US markets.  Money doesn't buy access. A study found that China's netizens have the least access to news and information of web users in the world's major markets.

Venezuela, owing much money to Beijing, is now definitely in default, writes Standard & Poor's.

Apologies to Abhimanyu in India over my failure to buy back  Nintendo of Japan, NTDOY, not in his coverage area. Even apart from the Japanese game group's “Switch” which Abhi found desperately desireable, NTDOY has now revived its Super-Mario of yore for the movies. Comcast's Unversal Pictures will fund an animated Super Mario Bros movie about the plumbers, according to Dow Jones today. I own CMCSA stock but hating to buy back shares we sold in the past, I didn't spring for NTDOY.

And if that were not bad enough I am a big holder of GE. And despite my best effort, TJ Maxx (TJX) is losing sales volumes.

The euro is up to $1.177 so all is not lost in a global portfolio, however.

More for paid subscrsibers from Australia,  Bermuda, Brazil, Britain, Canada, Chile, Cuba, Denmark, Germany,  Hong Kong, India, Ireland, Israel, Italy, Japan, Jordan, Mexico, the Netherlands, Russia, and Spain including company reports and insights from the Paradise Papers about tax avoidance or prudence.

Read more »