Chag Pesach; Happy Easter

Sun, 2017/04/16 - 8:27am | Your editor

I have just posted the tables on the global-investing.com website where paid subscribers can check on their holdings and pre-subscribers can see what our gains have been like, to learn what they have been missing.

Several readers report that they have had problems logging in recently. It may be because of stray capital letters in passwords which do not "take" in our system, or because their browsers have been blocking our issues as "spam". The technology is increasing out of human control, a subject on which I plan to hold forth some more tomorrow in my blog.

Meanwhile remember that the tables are easier to view if you click "printer friendly" display even if you do not intend to print them out.

I am off to a multi-generational family gathering in darkest Brooklyn. Read more »

Catch-up Thursday Re-send

Thu, 2017/04/13 - 5:21pm | Your editor

With computers and laptops and cellphones all to hand, hacking and stealing is now becoming easier than before. With the arrival of the Internet of Things, the proliferating system security holes will become a pathway for lucrative criminality.

Medicine on the go will check your heartbeat or your blood sugar levels creating health vulnerabilities for your enemies (or impatient heirs) to exploit.

An app will look into your refrigerator to make sure you are not running out of milk while you are at the supermarket—and will tip thieves off that there is no one at home.

A doll or teddy bear will use the Internet to chat with your child who will become vulnerable to a kidnapper or molester.

Drones will fly through the sky listening to your contacts on-line with your bank or broker and nab your passwords and your money.

O Brave New World.

Yes, of course I am particularly aware of the risk after the hack of my laptops. In the end to clean them up the techies erased all my backup drives, which makes it harder to check on what I have written before. Of course it is all accessible on our website.

 

Pres. Trump removed his charge that China was a currency manipulator and then blamed the fact that the dollar is too strong. He then called for lower US interest rates. Marine Le Pen gained some poll advantage in France. The neo-populist trend led investors to pile into blue chip euro-denominated bonds from Germany, Holland, and Finland. Their volume has soared and yields are falling in both euros and greenbacks. Bond ivestors are also buying Mexican sterling issues and Pemex euro bonds. British 10 year bonds hit a half year low. Emerging market bonds, often unrated or not in the index, are the new focus in a desperate search for yield. I assume Melania Trump is among those buying Slovenia (her homeland, where a major retailer has just gone bust) with the money she extracted from the Daily Mail which accused her of having been part of an escort service rather than a model when she first came to the USA.

 

More today from India, Israel, and Ireland, Canada and Colombia, Switzerland and Sweden, and Britain and Brazil, Trinidad, Hong Kong, Denmark, and Mexico, plus New Jersey and Nevada. But only for paid subscribers who can learn about our stock picks.

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Marooned Monday

Mon, 2017/04/10 - 11:48am | Your editor

The fierce Russian verbal reaction to the missile attack on Syria's sarin gas airfield is a sham. Pres Trump gave Russia a 90-minute notice period before the Tornadoes were launched but Pres Putin did not share the warning with Bashar Assad. In fact the usefulness of Russian anti-missile batteries supposedly defending other potential conflict sites has been thrown into question.

India, a long-term buyer of Russian hardware, has signed up with a new supplier, Israel. The same is not likely to be the way forward for other Russian clients, like Iran or Hizbollah in Lebanon—or North Korea, to which our aircraft carriers are streaming

While I admit the follow-on moves of the Administration are still hard to predict, engagement in the world is now more likely, and if the Team Trump gets competent members and sets a coherent strategy—neither of which is certain as of now—the world may become a safer place even for America.

 

As money centers battle to lure in London-based broker-dealers who have to set up in the European Union to continue operating, regulatory gaps are becoming visible, according to Reuters. Because the financial regulatory system was put together before British entry, there is no provision for a role for the European Central Bank in regulating this key business.

 

So potential homes for brokerages like Madrid, Dublin, Frankfurt, and Luxembourg, are offering what the wire service calls “a light touch”. This means that there will be less EU-wide regulatory consistency, allowing broker-dealers to take higher risks. In the case of Spain, they will even be allowed to take “bank to back” trades, meaning that the Madrid business will depend on reversal of positions outside the regulatory framework, in London as before.

While so much Brexit planning reveals the legislative gap on the UK side, it is worth noting that there is something similar at the EU end also.

 

There will be no blog Tuesday or Wednesay because of Passover. Friday is not only a holiday for many markets in Europe and the Americas, and Hong Kong, but also a day of rest in India which is celebrating Babsaheb Ambedkar Jayanti. The Bombay Stock Exchange will be closed. Perhaps the hacker of my email,  who may be based in Gwalior,  will stop turning on my printer remotely from India to use up my ink and paper printing pictures of tattooed triples in flagrante.

More for paid subscribers follows from Hong Kong to San Diego, and a few points in between. We have good news from Germany, Ireland, Switzerland, Canada, Britain, and Tel Aviv, in diverse sectors. It follows for paid subscribers below.

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Sunday News Re-send

Sun, 2017/04/09 - 11:22am | Your editor

The coming week is going to be very foreshortened, because Tuesday and Wednesday are when I observe Passover and don't work, and many markets are closed for Good Friday. So instead of a statistical update today I am going to write a normal blog.

It is Palm Sunday and terrorism again stalked the Middle East with two Coptic Christian churches attacked in Tanta and Alexandria, both in northern Egypt. The Alexandria bombing hit the front of the church where the children were seated.

The horrible murder of innocents on because of their religion has become a way for Shia and Sunni Muslims, Hindus, even Buddhists, to support their faiths. My German maternal grandparents were killed by the Nazis because they were Jews, although they had lived all their lives in western Germany's Sinnthal (source of the Brothers Grimm's German fairy tales). My grandfather had served as a soldier in the German Army early in the 20th century. The atrocious Nazi targeting of people for being of the wrong religion or just for being alive has become part of daily news today. Read more »

Well Played, Mr. President!

Fri, 2017/04/07 - 1:50pm | Your editor

Pres. Trump has taken brilliant advantage of being given a second chance to penalize Syrian President Bashar Assad for using banned poison gas. Trump has seized an opportunity to reset the rules four years after Assad crossed with impunity “the red line” allegedly set by Pres. Obama, who did nothing. Now the US has shown that it will not tolerate continued war crimes by Damascus against its own people, cause of retaliatory Isis terrorism against Shias, panicky refugee exodus, the death of innocent children, regional instability in the Middle East, and chemical warfare horrors which have been outlawed since the end of World War I.

Our president has also delivered an indirect warning to another outlaw state, North Korea, while hosting Chinese President Xin Jinping, who is protecting Kim Jung Un, a bit of fortuitous timing.

While I am no fan of the Administration I think that this challenge was handled well. In spite of the divisive way it operates, the White House chose a better response than the buttoned-up Obama one did.

Today an apparent terrorist attack in Stockholm again used a vehicle to cause death and destruction, something it is almost impossible to prevent in a modern city.

 

Worrying the markets today, apart from fear of war, was the poor job figures for March. Rather than the forecast of 174,000 new jobs, the non-farm payrolls only added 98,000 jobs. People switched to bonds pushing down the yield and also into gold, the proverbial safe play, which jumped to over $1265.51 per ounce.

More for paid subscribers follows from, among other things, a Swedish company in vehicle safety, plus news from India, Mexico, Côte d'Ivoire, China, Norway, Finland, Colombia, Germany, Vietnam, Britain, The Netherlands, Spain, and Panama.

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Bannon Ban

Thu, 2017/04/06 - 12:52pm | Your editor

Another repair attempt on my office internet system has apparently succeeded but I remain fearful.

The Administration has done some housekeeping in the last day. Steven Bannon has been removed from the National Security Council to also end its politicization. Also Congressman Devin Nunes has recused himself from the investigation of Trump aides' ties to Russia after his impartiality was thrown into question by his huddles at the White House. I am still waiting for a move against Press Secy. Spicer, another overly partisan member of the team. These exits are linked to the move to cut the filibuster against Supreme Court nominee Gorsuch. The Republicans need to keep all hands on deck (and maybe a few Democrats as well) so they are dumping the most divisive elements of the White House team.

 

The big news this morning is that India is buying a $1.6 billion missile system from Israel to try to gain a lead against Pakistan. India also worries about other malevolent countries in the region like Iran (and its evil ally Syria, and India's former pal Russia). This is a sign of how peace is at risk exactly 100 years after the US entered World War I. It is also a further warning to Xi Jinping and his negotiating partner President Trum to clip the wings of Kim Jong On of Pyongyang.

 

More for paid subscribers follows with hot news from Argentina, Britain, Brazil, Hong Kong, Ireland, Switzerland, Panama, Chile, Colombia, Spain, Israel, Australia, Hong Kong, Mexico, Uruguay, Bangladesh, Poland, Canada, Bermuda, Germany, North Korea, and Sweden.

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Nobel Prize for Trump?

Wed, 2017/04/05 - 11:52am | Your editor

As Pres. Trump prepares to meet with Xi Jinping in Florida, Pyongyang has snubbed the great powers and the United Nations by lobbing another ballistic missile into the Sea of Japan. This sends a defiant signal to China and the US which may just backfire against the Hermit Kingdom and Kim Jong Un. Kim may have overplayed his hand. China no longer requires a land buffer against South Korea, which is hardly a real threat. China's boycott and ban on South Korean brands and banks in reaction to the US placement of defensive missiles near Seoul may be purely for show—or to tempt Kim to go too far.

Dumping Kim will help China develop into the diplomatic and business leader of the region. If our president pulls this off, the master of the art of the deal deserves a Nobel Prize. While I am not a fan of the Donald, I wish him success for the good of our country and the world. He would follow in the wake not of Barack Obama, who got the gong for no good reason, but of Theodore Roosevelt wo got his for a diplomatic breakthrough in Asia.

 

The President of the Richmond Federal Reserve Bank, Jeffrey Lacker admitted he had been the leaker in October 2012. He has resigned after admitting that he shared information on changes in rate-setting rules of the Federal Open Market Committee (of which he was a member). This was published by a subsidiary of the Financial Times newspaper, Medley Global Advisors, enabling its subscribers to make money on this specialist information. Dr Lacker the leaker will not be charged.

 

The Mexican peso rose 0.8% against the Greenback yesterday, and in the early market today gained another 0.7% against the dollar, settling at 18.8 per dollar after gaining 17.5% in Q1. We explain what is going on to our paid subscribers below and also give them news from Britain, Sweden, Spain, Chile, Argentina, Canada, Israel, China, India, Japan, South Korea, Russia, Indonesia, The Philippines, Germany, Australia, Finland, Croatia, Hungary, Bosnia, and Montenegro, some of them countries where we rarely report from.

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Tables Posted

Tue, 2017/04/04 - 5:25pm | Your editor

My computer has now crashed completely under a renewed attack by the Supremo virus (part of the stuff the hacker put on my laptop.) It will be ready only on Thursday, but in the interim I can work on my house computer, which only inconveniences my husband who has to put up with me.

The tables are up, with a proper accounting of the stock and bond positions at the close of the first quarter visible to paid subscribers only. The closed positions table is almost current, with only one trade left out because I could not get into my records.

Worst is the funds and ETFs section because I did not want to take over my spouse's connection to the universe at large by looking up net asset values for them. Instead I am taking a leaf from Barrons' which published prior week NAV figures. The quarter's performance doesn't depend on them but on the trading prices which I did input. More for paid subscribers below the break.

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Dodged Bullets

Tue, 2017/04/04 - 1:28pm | Your editor

While I have been very preoccupied by a bit of bad luck over my computer and email account having been hacked, I have not focused enough on some bullets we dodged thanks to our well-informed team of reporters and analyst contacts.

The only exit from a perilous stock I managed on my own was over Chicago Bridge & Iron, which despite that all-American name is a Dutch company engaged in specialized construction for the energy sector. It was allegedly using misleading accounting, and rather than tackle with the intricacies of how project costs are handled by builders (a specialized set of rules) we left CBI. Now it is the possibly innocent bystander in the bankruptcy of nuclear power station builder Westinghouse, another misleadingly red-white-and-blue company, as it is controlled by a Japanese firm.

Other bullets dodged we owe to our reporters like Martin Ferrera, who warned that we should get out of Old Mutual before it cut the links between its British and South African financial services subsidiaries. Martin, who was born in what is now Zimbabwe, has a good sense of African risks as a result. While nobody could have predicted that Pres. Jacob Zuma would ultimately succeed in firing South Africa's respected Finance Minister Pravin Gordhan (after trying to for years to silence Mr Gordhan's attacks on corruption), Martin was smart enough to worry about political risks.

Our Latina reporter, Frida Ghitis, warned us to exit from Banco Popular whose first mess was in Puerto Rico, right in the USA. Now the Spanish parent is in upheaval over fraudulent accounting which has led to heads rolling from the board room on down. The scene weas described in today's Financial Times as a “blood wedding” (referring to a play by Frederico Garcia Lorca.)

Our man in India,Abhimanyu Sisodia, helped me opt out of Infosys, the bellwether Indian IT company, over concerns that its ambitious plans to grow in size were unrealizable,, Now INFY is being hit by one of those boardroom squabbles Indian companies get into so often (another of our Indian companies already went that way,.) When facing difficulties like the blockage on US visas for its technical staffers under Donald Trump and a fall-off in business from cash-strapped banking and finance corporations, a fight in the executive suite over stock options and pay scales is likely to waste time and energy. So this is another exit whichturned out to have been well-timed.

Finally, my very public saida (exit) last week from Vale was boosted by an analyst who would not appreciate being named. The Brazilian company is the world's largest producer of cheap iron ore and already was having problems with Chinese demand for its output falling, and interference by the Brasilia government over its top officials, some apparently involving threats to their lives if payments were not made to the political parties in power. That was enough to get me to sell. Now it turns out that some local investment banks made out like bandits as VALE reorganized its holdings to cut its debt—to the tune of over $21 billion each. The banks are Morgan Stanley, a US biggie, which presumably did the work, and a top Vale shareholder with board seats, Banco Bradesco, which can be assumed to have done whatever was necessary in the way of peddling influence.

We don't always get things right and have a few clunkers in our portfolio as well as big winners. But anything like fiddled accounts, threats of murder, boardroom battles, excessive growth ambitions, and interference from a corrupt government gets me to say “sell”. More for paid subscribers from Brazil, South Africa, Ireland, Mexico, Canada, Australia, andDenmark, Hong Kong, Norway and a few other places

Later today I will update our charts for Q1 2017, assuming that the bugs don't interfere. Please visit www.global-investing.com to view the charts you are allowed to see: closed-positions for pre-subscribers, and both stock and bond, and fund spreadsheets for paid subscribers. Just log in to see.

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Fidelio Politics, re-send

Mon, 2017/04/03 - 7:47pm | Your editor

Monday's blog did not go out so it is being re-sent. The Internet is a horror.

The New Yorker in its current issue suggests that we all join in applauding a performance of Beethoven's Fidelio at the Met with its stirring Liberty march:

“Nicht laenger knieet schlavisch nieder/ Tyrannenstrenge sey mir fern”.

In English (by me): We've stopped slavishly kneeling/ So the tyrant's strength is reeling.”

The magazine's target is Pres. Trump but I personally think it should be internet service providers using your data for gain without consideration of your privacy.

Markets are broody and depressed today, suffering from a what may have been a terrorist attack in St. Peterburg, Russia, which killed people on the subway system (metro) there. On past form this may have been a fake attack to boost the position of Putin and his buddies against the anti-corruption demos of the past 2 weekends. The haven currency, the US$, is up, resulting in a drop for all non-US stocks we own, because the US conversion of the local price has dropped. This can be a buy opportunity but the situation with Russia and, tomorrow, with China, makes me cautious.

More for paid subscribers follows from Canada, Britain, Israel, Mexico, Australia, Denmark, Swden, Russia, Grand Cayman, Brazil, Chile, and Argentina. For a change we start with funds, the part of our portfolio recommended for starter investors, in part because the news from that side of the portfolio is upbeat.

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