Sunday in Boston

Sun, 2016/11/20 - 12:24pm | Your editor

Greetings from the home of the Duchess Prospera, aka my granddaughter who performed brilliantly the her school's Tempest as Shakespeare's cross-dressed Magus of Bermuda. Of course in the Elizabethan era, they used young boys to play female parts rather than young girls to play men, but there were certainly enough references by The Bard to what was going in (especially in the comedies) so Shakespeare might be banned in some southern schools where they worry about which bathrooms kids should use.

No Chinese food beckons today, but there will be Thai chow instead.

This is a weekend for chopping our losses in order to offset gains, and it is particularly easy to do this now because nobody has any idea what the new Trump Administration economic and international policy will be. These are the key determinants of our portfolio's performance on the macro level. So we are piling into cash and building up our fire power which can be deployed after Jan. 20 when my neighborhood in NYC goes back to normal.

More follows for paid subscribers on our trades: Read more »

Before I Bus Away

Fri, 2016/11/18 - 10:18am | Your editor

The bus leave for Boston at 12:30 and I am writing a hasty blog to keep you all alert until Monday.

There will be negotiations on Nafta because Canada and Mexico are insisting on this.

Meanwhile in case you haven't noticed, the inflows YTD into gold and emerging markets has reversed with the dollar achieving record new highs cay after day. And the supposed alternative investments being slapped down by exiters.

More for paid subscribers from India, Switzerland, Canada, Britain, and Ireland. Read more »

Presidential Neighborhood and Other Mixed News

Thu, 2016/11/17 - 2:19pm | Your editor

Among the Orthodox rabbis who posted an ad in today's New York Times calling for the US to move its Israel Embassy to Jerusalem was one Rabbi Ya'akov Trump of Cedarhurst, NY! Are they related? Trump's grandparents moved from a Rhineland village in the late 19th century, a traditionally Catholic part of Germany, where the 57 varieties of the Heinz family (who are Catholic) also originated.

More from 10022, the neighborhood where I live and work about 7 blocks from where our future president does. Neary's, our local Irish bar, told the newspaper that Mr Trump (not the rabbi) likes to hang out there with his buddies and relatives. However, because his brother was an alcoholic, Mr. Trump does not drink alcohol and is unlikely to have proven a profitable customer for Jimmy Neary.

Meanwhile another business relationship of the future president has totally disrupted my neighborhood. A man was murdered over the weekend at the Grand Sutton, the 4th building west of my Sutton Place home, in fact on 59th Street halfway to First Avenue. The body of the victim, who was from Connecticut, was found buried in New Jersey yesterday. The garbage chute and garden spaces of the apartment building, at 418 East 59th, were full of bags full of bloody clothes, sheets, and towels which are being examined in mobile labs parked on the block amidst TV cameras and groups of reporters.

The police took in a suspect so far only charged with driving violations. Local rumor among the door persons says he is James Rackover, son of Donald Trump's jeweler (who doesn't buy from his own tenants to avoid conflicts of interest despite his refusing to set up a blind trust when he moves to the White House.) Jeffrey Rackover, the arrested man's father, sold our future first lady's engagement ring to the future president.

I am moving north as previously planned tomorrow not to escape the traffic and TV commotion here, but because of family events this weekend, and next week, including Thanksgiving. There will be no blog tomorrow and probably no tables Sunday.  My younger granddaughter will be playing Prospero (Prospera?) in The Tempest this coming weekend. There is a shortage of boys willing to act in her school. My husband had a lesser role in the same Shakespeare play when he was her age. I was in the Scottish play but not a lead.

 

More for paid subscribers follows from Britain, Denmark, India, Israel, Mexico, Germany, France, South Africa, Finland, Canada, and a few other places. The main subject is IT, internet technology but also lots of mixed good-cum-bad news.

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A Stock Bubble

Wed, 2016/11/16 - 3:15pm | Your editor

There is a glut of world maritime vessels, overbuilt earlier in the century on the expectation that dry bulk demand would grow 3-4% per year—which didn't happen. The new protectionism in the US under Trump, and retaliation by other countries, will reduce the volume of trade shipped around the world. The Panama Canal is wider so it needs fewer ships to cross it. South Korea's shipyards and shipping firms are lining up to file for bankruptcy after STX and Hanjin Shipping sank earlier this year.

Our former holding in the sector, Dry Ships, is run by the gorgeous Greek playboy George Economou who is in debt up to his blond thatch. DRYS is a shipwreck, selling off its fleet to repay creditors under a complex restructuring forced on Gorgeous George. Yet, to may amazement, the share we sold way back when is up 1500% in 5 days.

It is not alone, with other mostly Greek bulk shippers up also—but only in double digits. This is a classic stock bubble to avoid.

Meanwhile a staid and respectable dry bulk shipper, A.P. Moeller Maersk of Denmark, which we also once owned has seen its share price hover between DKK 7500 (during the selloff early this year) to12,000 earlier this month. Today it is at DKK 9015. Unlike the Greek upstarts, this company is ancient and a force in the global constellation. Its stock rose when it announced a plan to split its oil and transport businesses, the latter including tankers, container ships, terminals, and bulk carriers. Oil would be engaged in drilling for the stuff and vessels to supply offshore drillers.

The Maersk boomlet reversed when Maerk revealed that it might consider buying South Korean shippers like Hanjin—or Hyundai Merchant Marine, which is like the Greeks because it is being forced by its creditors to restructure. Danes don't like Asian upstarts either.

But the Maersk move on Korean shippers and shipbuilders was what triggered the rise in the stocks of other listed bulk carriers so far not yet in official bankruptcy.

Back when we owned these stocks, we would check on the Baltic Dry Index, a tracker of prices for bulk carriers. It has gone up from about 800 last month to 1084 today, and has nearly doubled year-to-date.

As for DRYS, the daily suspension probably indicate a short squeeze, but I am only guessing. Its trading gets suspended by Nasdaq almost every day.

My verdict on the sector is to sail in other waters. Some other shipping sectors are doing better on the prospect of more liquefied natural gas shipping (among other things because there will be more drill, baby, drill in the USA, resulting in a surplus). The obverse of the coin is that oil tanker companies are doing more poorly because their commodity faces more competition. This is not a certainty, as there are daily ructions up and down in the stock market over the variations in the price of oil.

My internet connectivity remains dodgy despite the cable company making repairs yesterday evening in my neighborhood, after storms and stresses on the system from a locally-based future US president

More on oil, drugs, social media, and a few other sectors follows including two conference calls.

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Being a Reporter is Tough

Tue, 2016/11/15 - 2:07pm | Your editor

 

Today was a horror. Except for the NY Times, of which I got 2 copies, my newspapers were not delivered and I had to track through the pouring rain to buy the Financial Times and The Wall Street Journal. Then my e-trade account went agly because of water or something else in the cable system, as important piled-up results were reported today. It may be the impact of street closures in my neighborhood to protect Pres.-elect Trump.

My CFA son insisted on sale of a US bonus holdings, about which more below for paid subscribers.

Note that there will only be a truncated blog on Friday this week as I am heading north--not to escape to Canada but to spend some time in Boston with relatives right up to Thanksgiving. Escaping this neighborhood is now a factor in my travel plans. As I wrote yesterday, the situation is UN General Assembly squared.

Buses have been banned from Fifth and Madison Aves. around Trump Tower which is on 56th street but which has an appendage on 57th. So buses are not allowed to stop on the main cross street, 57th, to protect President-elect Trump from demonstrators. They have been showing up nightly and among other things destroying bus shelters, perhaps because they can't find any other way to show that they disapprove of the electoral process.

So forgive me if I do not hold forth to the world before I report on what matters to my subscribers. We have news from the USA, Israel, Ireland, Britain, Colombia, the Dutch Antilles, India, Finland, Brazil, Chile, Canada, and 'Nam. We have a buy and a sale.

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Rest of the World

Mon, 2016/11/14 - 3:04pm | Your editor

Today we are going to focus on how the rest of the world(ROW)  is getting on with business as usual, in part because your editor is now convinced she cannot predict much about how the Trump revolution will proceed. This hit me after his designation of a two- top staff made up of a Republican mainstream apparatchik and a Breitbart semi-Fascist. Being of the press and reading the press is obviously no help at all in the present interregnum—or in understanding how it came into being. What I have to do in focus on where the market is going—and where it is wrong.

It's tough predicting, particularly about the future. And the often random Trumpish talk doesn't make it easier.

In his campaign, the future White House resident was all over on some issues, having at one point supported the idea of arresting women who had had an abortion, and at another point supporting first-trimester terminations. At one point he called for a single-payer government healthcare system and at other times called for repealing the Affordable Care Act, AKA Obamacare. He simultaneously basked in approval from Vladimir Putin and disdained Nato—while also calling for better US defense.

He terrified Jews by his weekend appointment as a co-senior advisor alt-right Breitbart reporter Steve Bannon. Meanwhile his eldest daughter, a convert to Judaism, rallied my co-religionists to her father, by among other things making a midnight visit to the tomb of the late Lubavitscher Rebbe to pray for his intercession to help her daddy. Ivanka's husband, Jared Kushner, an Orthodox Jew and scion of a real estate and press empire, appears to be the designated link between The Donald and The Jews.

Let me start with a bit of free advice. Protect yourself against inflation, the risk of which is high unless the future president is reined in by the very Republicans to whom he restored Congressional power. Orthodox budget balancing has gone out of the window from the top of Trump Tower, in part because the president-designate has built a real estate empire on the savvy use of debt finance.
Insisting that a country is not like a business will not get you a hearing after the businessman won the top office precisely because Americans wanted a businessman there. So buy inflation indexed US Treasury bonds.

*My preferred way to protect against market upheaval—holding gold—turned out to be wrong for the USA because the yellow metal is priced in US$s, and therefore a boost to our currency, however irrational, cuts gold down. My preferred vehicle is an ETF—despite my negativism about index-tracking ones. , fell today as people realized that Pres. Trump will not be able to impose his whole program intact. But the inflation risk is there.

More follows from Ireland, Britain, Switzerland, Australia, Mexico, Germany, India, Brazil, including a reporting company results and a new buy.

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Sunday Tables Posted

Sun, 2016/11/13 - 2:14pm | Your editor

It was tough putting up our tables today among other things because many market statistics were not easily available: net asset value for funds, bid/ask prices of pink sheet ADRs, foreign exchange rate changes, and late trading data. For the most part, I did my best, indicating where I filled in gaps in the data and where it was simply not available--for paid subscribers only.

Please visit www.global-investing.com to read what you are allowed to view. Remember that you can click "printer-friendly" to see the spead sheets better on your computer, laptop, or cellphone--even if you do not want to print them. More for paid subscribers follows before I go off an eat unAmerican Chinese food my husband bought while I struggled with the statistics. I am happy that 1) I didn't try to predict the Chicago-Cleveland World Series victor; 2) nor the presidential victor; 3) and that I don't have to go near the shut-down Trump Tower. I had no idea that the inconvenience of being his neighbor in 10022 would have been something like the United Nations General Assembly squared.

Today's data gaps were considerable and I was also behind on our trades, done on the fly during a very busy week. I had carefully signed up for the hairdresser and a dental cleaning and a medical exam (the latter cancelled; whew!) for after the election, little realizing what a shock it would prove to be.

A lot of UK prices had to be extrapolated from the London close and the much stronger pound sterling of Friday, and others were based on after-hours trading. It was a tough week on Wall Street. More for paid subscribers follows:

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Poppy Day

Fri, 2016/11/11 - 2:59pm | Your editor

Today many markets are closed including the US bond market, because of Veteran's Day-Armistice Day-Remembrance Day-Poppy Day. And perhaps because we are thinking about the horrors of war, and the need for comity and respect between neighboring countries, markets are proving negative again about the potential misses by the future US Trump Administration.

Warren Buffett, a supporter of Ms Clinton, said he thinks Donald Trump will not carry out his pledges to scrap Nafta because even a Republican Congress would balk. The same probably applies to the Great Wall of Rio Grande.

Germany's Chancellor Angela Merkel, who heads the country which lost the most on this day in 1918 and in its aftermath, issued a statement which read:

"Germany and America are connected by values of democracy, freedom, and respect for the law and the dignity of man, independent of origin, skin color religion, sexual orientation, or political views. I offer the next president of the United States close cooperation on the basis of these values.” Ms Merkel, who grew up in East Germany under Communism, has form on these issues. And she wants to be sure than any reconciliation with Vladimir Putin's Russia doesn't undermine the European Union's support for the Baltic states, and Ukraine. Germany also opposes Russian operations in Aleppo.

And of course, Chancellor Merkel, normally very cautious, has stuck her neck out in support of her country admitting refugees fleeing the Middle East.

Her remarks included in her congratulation to Donald Trump led to the following remarks from British Foreign Secretary Boris Johnson: “Stop this whinge-orama” and “snap out of the doom and gloom”. However, Pres.-elect Trump has called Merkel his favorite world leader.

 

Meanwhile with enrollments going on for Medicare and Obamacare all over the USA now, there is nothing the new President can do to dismantle or repeal this key achievement of the Obama Administration, which has problems galore--until 2018. Moreover, while parts of the program are not popular with Republicans on Capitol Hill, other parts were crafted to help the insurance, drug distribution, and healthcare industries. Scrapping the compromise risks opening the door to a single-payer program the next time the Democrats are on top. And they will be one day.

Another country in the grips of a populist rebellion proves my point. The FTSE fell today as the pound strengthened over their Parliamentarians getting ready to resist Prime Minister Theresa May's move to begin negotiating a “hard” Brexit. The reaction to her remarks by European Commission President Jean-Claude Junker was “pfft” and a shrug of his shoulders. Britain's public deficit rose 14.5% from Sept. 2015 to hit £10 bn which also hit sterling.

Meanwhile the presidents of France and Brazil face impeachment threats.

 

Britain also sold off emerging markets shares, except for Vietnamese and raw material producers.

More from around the world today mostly from Germany but also from India, Argentina, Brazil, Britain, Vietnam, Sweden, France, and Spain.

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Day 3 Musings and Markets

Thu, 2016/11/10 - 4:14pm | Your editor

For the record, I did not compare Donald Trump to Hitler yesterday. I compared my reaction to his victory to what my parents and grandparents must have felt after the Nazis won the 1933 election in Germany. I carefully spelled out the key differences, that President-elect Trump is neither anti-Semitic nor planning to become a dictator.

“I am so grateful for our country and for all it has given to me. I count my blessings every single day that I am an American, and I still believe as deeply as I ever have that if we stand together and work together with respect for our differences, strength in our convictions, and love for this nation, our best days are still ahead of us.” This is from Hillary Clinton's concession speech and I agree with her sentiments entirely. Pres. Obama, a true gentleman, today received his successor at the White House.

Yesterday I knocked off earlier to go to the dentist and on my way back to Sutton Place there were huge trucks bringing concrete barriers to the edge of the southern side of our local main thoroughfare, E. 57th Street, between Fifth and Park Avenues. Even crossing the street required that you ask permission from a policeman. I guessed it had something to do with protecting Trump Tower which is on the other side of the block from the barriers and the cop told me I was right. He said: “it's to protect Donald Trump from falling over his ego”.

The cop was funny but I think Americans need to do better than that crack for one of NY's Finest.. Mr Trump's ego is now satisfied by his winning the White House. And obviously he needs to be protected from demonstrators (so far peaceful) upset by his victory. Get over it. Wherever we were before Tuesday night we now have to get together to do the best we can for the USA. This does not mean giving up on international investing and international security and (what the heck) international marriages, of which Donald Trump our future president has done his fair share (2 out of 3). Trump himself is a relatively international American himself, with his paternal grandparents both German-born and his mother a former Scot.

Many years ago, Pres. Richard Nixon said “we are all Keynesians now.” He was referring to the theory that economic stimulus and running deficits were needed to extract economies from slumps. It has fallen by the wayside since the 1970s mainly because the Republican side of the US used fear of deficits and inflation to justify their dismantling of New Deal social programs. It is not only the Democrat Party side of the aisle which has to recognize that there is now a new normal in US politics and economics. The Republicans too will have to accept deficit spending by their man in the White House.

It is this prospect which has boosted stock markets over the post-election days. Let's see if a Trump presidency can't produced growth for Americans left behind by balanced-budget advocates. I want to be sure to let Pres. Trump try this.

I also would like to give him a chance to reset relations with Russia. However negative his diplomatic positions during the campaign sounded, I expect that our country will continue to support its allies. But whatever our diplomats have done since Michael Gorbachev stepped down, it is clear that it is not the right way forward for dealing with Moscow.

To anyone preparing tax returns (even with a CPA helping) it is obvious that the US tax code is an abomination. Let's see how it can be improved and made fairer. Again there is no reason to stick with the orthodoxies of the past decades going forward. As a beneficiary of some stupid tax concessions and exemptions (as was Mitt Romney), Donald Trump may do better than supposed experts in fixing the mess.

Almost as impenetrable as our tax laws are rules on banking, generating electricity, overtime, and just running a business. Give the new man a chance to examine, simplify, and improve our regulatory overkill. Deregulation is needed. Many current regulations amount to confiscation.

Healthcare needs work. The cobbled-together program to provide it to Americans created by Pres. Obama (with a few nods to Hillary Clinton during her wifely time in the White House) is not the answer, because the costs are way too high for the benefits to American health. So let's give Pres. Trump a crack at reforming Obamacare.

As for naming judges who will reverse Roe vs Wade, for whatever it is worth the people who held their noses and voted for Trump may have been misled by their priests. Trump has supported a full range of positions on abortion, ranging from backing abortion in the first trimester of pregnancy to calling for punishing women who have had abortions. So I think he may not be as firm as the future vice-president on this issue.

A retired elementary school-teacher neighbor says that she blames the erratic way that Donald Trump handled the debates to a learning disability, probably dyslexia, which he can overcome in office. It was not diagnosed well during my childhood or Trump's. Another famous dyslexic is Charles Schwab, chairman of the eponymous brokerage, who sold $21.015 mn shares of CSHW after the election results came in. I hope he's sorry now.

 

More for paid subscribers from Hong Kong to Brazil, from Canada to Mexico, from India to Germany, from France to Japan, including a batch of reporting companies: and our first ever news about Equadorial Guinea.

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Trump Triumphs

Wed, 2016/11/09 - 1:50pm | Your editor

I am still rubbing my eyes after my husband woke me to tell me the election results.

For the first time in my life I understand how my parents and grandparents must have felt in 1933 when the Nazis won the German Reichstag election. I feel I have lost my country.

Of course Trump is not an anti-Semite, with an Orthodox Jewish son-in-law, Jared Kushner, married to future first daughter Ivanka, who converted. But he tolerated David Duke and his ilk supporting his candidacy. Moreover, Trump has never come out in favor of a dictatorship ending future elections. Hitler spelled it out in Mein Kampf.

But so many of the things he pledged to do go against my prejudices and positions:

tearing up Nafta and the various Pacific Rim and pending trade agreements pending to impose protectionism;

tearing up the deal to denuclearize Iran;

repealing Dodd-Frank and other regulation of banks;

ending Obamacare, the singular achievement of the current president;

building a wall to stop Mexicans crossing the border;

hyper-vetting or banning Muslim immigrants;

returning to dirty coal and dirty electric generation because global warming is a 'hoax' and cutting US global warming payments to the UN;

making abortion illegal again (I belong to Planned Parenthood);

charging Nato and Pacific allies for US military support or not providing them with security;

tackling China for allegedly manipulating its currency downward (which happened today because of his threats, not manipulation);

palling up with Putin;

not repaying debt the US owes;

not observing the mutual assured destruction rules applying to countries having nuclear weapons; gutting the independence of the Federal Reserve;

unilaterally imposing tariffs and making trade war on countries supposedly taking advantage of the US; removing obstacles to mergers;

torturing suspects of terrorism and killing their families (I am a member of Amnesty International);

and deporting 1 million illegals and undocumented immigrants (I am a first generation American married to a foreigner.)

 

He also frightened Wall Street with potentially inflationary plans to cutting taxes on individual and corporate filers and on firms repatriating money held abroad. At the same time he wants to increase increasing infrastructure investment by a trillion bucks. Where will the money come from? The global financial system will be destabilized. Moreover with control of both houses of Congress, President Trump can get his programs through. There will be US growth, but at a cost.

 

I suspect he will not follow through on the “London Bridge is falling down” theme of “take a key and lock her up.” Hillary Clinton will not be jailed for her sins. And if he groped womens' private parts in the past, at age 70 with an absolutely gorgeous wife (I saw Melania in the flesh for the first time at the polls yesterday) I think he will control himself better than Bill Clinton did. I also think he may reward the FBI head Comey with a key cabinet post, for the singular best help for the Trump Triumph.

 

Once again, Irish bookie Paddy Power plc got the voting outcome wrong and paid out on bets on Clinton early when the polls seemed to show that she was well ahead. We sold PDYPF, listed in London, mainly because it was hard to track as US brokers disliked its offering spread betting on shares and blocked its ADR market-maker as a 'sin' stock. Paddy also called the odds on Brexit wrong.

 

Now for the mop up. Banks, pharmaceutical and biotech stocks, gold, raw materials, and the yen are up. Mexican stocks and the peso are way down but not as way down as they were overnight. The Nikkei feel 5.4% overnight, the dollar dived, the gold price soared. Japanese stocks fell. Treasury bonds are down. The FTSE index in London fell 200 points at the opening.

 

 

More about our stock picks from Britain, Israel, Ireland, Canada, Denmark, Switzerland, and many other corners of the globe plus an update on our main hedge against Trump follows for paid subscribers, including, of all things, a company quarterly report. I am looking forward to getting away from my desk to have my teeth cleaned by a Putin supporter born in Rostov-on-Don, to be followed tonight by a party for locals from Sutton Place. We have two buys today.

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