Skyscrapers on Sutton Place

Mon, 2016/05/09 - 12:20pm | Your editor

 

My neighborhood, Sutton Place, running along the East River to River House (on Beekman Place), from 59th Street southward to 52nd, is under threat from new very high-rise buildings (of as many as 100 floors). Henry Kissinger lives in River House. I live and work at the building furthest away from his, at the bridge end. (Our parents used to live a half block from each other at 187th Street in Washington Heights.)

The new monsters can be put up hither and yon in this community at the eastern end of Midtown Manhattan unless the city changes its zoning rules. Currently, nothing can stop the invading cloud-scrapers which started being built when new elevator technology allowed it, before the Global Financial crisis. The GFC led a to hiatus but the building boom resumed a couple of years ago.

Now a site cobbled together by an outfit called Bauhouse (from out of town but not from the Weimar Republic which the senior Kissingers and Oppenheims remembered so fondly) has begun tearing down old walk-up buildings around the corner from my building. The future high-rise site also gained from sale of “air rights”, a city scheme allowing the landlords or coop apartment owners in neighboring buildings to gain from letting in a monster. Many people accepted pricey buyouts for agreeing to vacate the early 20th century buildings.

Last month Bauhouse filed for bankruptcy, which sounds like good news, as the tear-down has only just begun on 58th Street. It owes money to another real estate firm, a local biggie named Kalikow. But the bankruptcy may be a sham. A current lawsuit will determine which side will get to peddle the site.

Meanwhile the Bauhouse threatens my tranquil life, my public transport, my water and sewage, my amenities, my parking spaces--and above all my property values. If the 58th street tear-down gets to lay new foundations in the Manhattan bedrock, originally planned for this summer, it will be exempt from new zoning rules which might prevent future 100-story intruders.

Meanwhile another 6 or 8 sites including an office block belonging to PR firm Ruder & Finn opposite the Kissingers' building are considered to be at risk of a buyout unless the law is changed quickly to preserve our neighborhood. I am not sure if PR firms consider the PR of their own brands.

Mayor Bill de Blasio, a leftish Democrat non-Sandernista, is believed to be in the pocket of real estate moguls donors, not of course including Donald Trump.

What may save the neighborhood is what is happening in Panama, China, and Russia. The source of much of the demand the mega-high-rise buildings sought to meet was from Russian oligarchs and corrupt Chinese officials hoping to put their money into a safe New York haven. The revelations of shenanigans in Panama have hit Putin's pals, and the crackdown on corruption under Xi Jinping may save my street. The real estate industry may soon find the demand for McMansions in the clouds has fallen.  For the record my real estate risks are far more concentrated than my stock and bond portfolios.

More for paid subscribers follows from the non-property part of the investment business, starting with quarterly reports. We have news from Pakistan, India, Japan, Israel, Colombia, Brazil, Sri Lanka, and Britain.

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Happy Mother's Day

Sun, 2016/05/08 - 2:55pm | Your editor

Happy Mother's Day. While I will be taken out only tomorrow when one of my kids arrives here on business, I do have good news from our tables. The stock split in Naspers has finally been shown as it should be. Harry Geisel has been agitating for me to change the numbers but I rigorously follow my brokerage account or public sources and never listen to any of my writers even if I know they are correct.

This reminds me to tell you that my brokerage account is again in transit because TD Ameritrade failed miserably at giving its customer news about the companies she owns, like quarterly reports or splits. So doing the tables was a true hassle requiring lots of checking of public sources. I am once again in ACAT-land.

With a huge gain showing at last I am thinking about taking some losses especially in Japan, with help from Chris Loew, our writer there. We are suffering along with Japanese exporters from the perverse impact of lower interest rates on the Yen, which is going up instead of down. This is a signal to all central banks that their manipulations are no longer working. Read more »

My Mother's Day Gift

Fri, 2016/05/06 - 11:46am | Your editor

My mother's day gift this year from my son the chartered financial analyst was a book by Rabbi Jonathan Cross of Omaha called Values Investing, about Berkshire Hathaway. Working for a fiduciary company managing my pension plan, my son has invested in Berkshire on my behalf.

The rabbi managed to meet Warren Buffett by offering him a chance to make a modest profit by buying the congregation's by temporary leavening by contract over Passover. The buyer has to be a non-Jew, like Buffett.

However, Buffett's mentor Benjamin Graham, author of The Intelligent Investor and Security Analysis was Jewish. Another Jew in the Berkshire orbit was Rose Frumkin, the founderer of Nebraska Furniture Mart who managed to sell her business to the Oracle of Omaha with a simple handshake without an audit or the books or an inventory of the merchandise.

 

More for paid subscribers follows from Canada, Myanmar, Israel, Britain, Brazil, India, Russia, and Ukraine.

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On Gold, Orderbooks, and Oil

Thu, 2016/05/05 - 12:45pm | Your editor

Back on October 21, 2014 I ran the following article on my website by Adrian Ash, who runs the bullionvault.com site on behalf of The World Gold Council, a mining group. Gold is up nearly 20% year to date. Back then, Adrian wrote:

The Case for Gold

As the stock market slumps, gold's unique appeal stands out again, Gold has risen nearly 4% so far this month. Major world stock markets have dropped up to 10%. Hot-money hedge funds pile back into gold futures and options. Headline writers proclaim the return of 'safe haven' gold.

If you want insurance against wars, plagues, or financial woes, a lump of metal won't work. But if you want to insure your own savings, reducing losses, and boosting long-term return history says gold really can help.

Over the past 4 ½ decades, gold has risen in each of the 5 years when the S&P has lost 10% or more, averaging 34% gains. Adding gold to a standard portfolio split between equities and bonds would have reduced your risk and boosted your returns.

Short term gold often leaves pundits and hacks scratching their heads. When the US stock market tanked, in short order gold often went with it.

The S&P 500 index on 8 occasions since 1969 [sank] 10% or more in one month. Gold has fallen alongside it 4 times, including the Lehman's crash of October 2008, and lost a monthly average of 4.5% overall.

Longer term, beyond the horizon of newspaper headlines, gold has helped smooth losses and boost returns.

Start with a simplified model of 60% in US shares and 40% in Treasury bonds. Since 1969, that has earn[ed] 9.7% annualized with a maximum 1-yr loss of 14.2%.

Switching 1/10th of your money into gold and holding 55% stocks, 35% bonds, and 10% gold would have earned 10% annualized with a maximum 1-yr loss of 12.8%. Equity dividends and bond interest are included but [not transaction costs or ] taxes. You rebalance to keep your target allocation each new year.

Or go plumb crazy and put 20% of your savings into gold. Your split of 50% stocks, 30% bonds, and 20% gold would have earn[ed] 10.1% annualized since 1969, with a maximum 1-yr loss of 11.6%."

 

In my view, gold is a useful ballast against stock, bond, and currency risks, and easier and cheaper to buy than hedges linked to currency or volatility. Country ETFs spend heavily to remove currency movement risks. Adrian's outfit advertises on our website but we accept its ad because we believe in what he is peddling. You can log into bullionvault from our website www.global-investing.com. It is all legal and taxable of course.

 

Today was purchasing manager index data day for April. The PMI is a measure to determine the future demand for goods, and ultimately gross national product. Europe, led by Germany, beat forecasts with a level of 53, meaning the level was nicely up from March. China's PMI index fell short. The Caixin PMI, which Beijing is known to manipulate, failed to do as well, up only to 51.8, vs 52.2 in March, showing contraction over the month despite measures taken to boost the economy. It targets small and medium companies.

The Rossio railway station in Lisbon is a world heritage site, built in the 19th century to celebrate technology in a kind of art nouveau-Byzantine style. Between the open arches at its entrance there used to be a tiny platform bearing a tiny statue of Don Sebastião, who was killed in North Africa fighting the Moors in 1578. Because his body was never found, the Portuguese myth is that Don Sebastião is not dead and will return to save the country one day.

This week a man taking a selfie climbed onto the Don Sebastião platform and knocked the statue to the ground, shattering it. He was arrested.

Luckily our late friend, the Portuguese artist Lima de Freitas, created several ceramic tile panels in the Rossio station which survive, also featuring Don Sebastião.

Every cloud has a silver lining. The inferno at Fort McMurray has cut the route for taking oil sands southward, boosting the price of oil. This also added appeal to stocks. The loony is weaker against the greenback.

 

More for paid subscribers from Canada, Colombia, Brazil, Australia, Guadaloupe and Kenya via Nevada, and Australia today, with news of heavy industry, pharma, and funds. We also have results from a stock we like and one which is a bonus pick for our readers.

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The Last Disaster Day, God Willing

Wed, 2016/05/04 - 12:23pm | Your editor

 

I believe we are near the end of our struggle to link our website and email. We have finally been allowed to cancel the google apps we were feloniously sold by our webhosting company which were interfering with our existing gmail accounts.

I also was wrong in blaming the iPhone for the problems I had run into. This was simply a coincidence.

To celebrate, pre-subscribers can view a full issue without paying by clicking into

http://www.talkmarkets.com/content/news/fraud-abroad-in-china-malaysia-and-switzerland?post=93444&uid=4662.

 

If Donald Trump is elected we will regretfully move to Britain, where my husband already has status as a subject of the Queen by birth and passport. I will be sorry to leave the country which provided refuge to my German Jewish parents. Their experience makes me sympathetic to Mexicans or Muslims. While Britain was not as nice in the 1930s, sending German refugees to the Isle of Man, and is not very helpful today, it is may haven to hand.

 

Today's blog is about how companies deal with risks, both macro- and micro-economic. Some do this better than others. Here is today's issue for paid subscribers with results from two of our companies in France and Colombia plus other news from other places like India, the Dutch Antilles, Britain, South Korea, Brazil, Israel, and Canada.

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Fraud Abroad, in China, Malaysia, and Switzerland

Tue, 2016/05/03 - 2:06pm | Your editor

 

While we are still having problems with our internet operations, things are easing now that the webmaster is back from holiday. However I am still obliged to focus on the paid subscribers rather than the rest of the world so am again using an older report.

 

Apologies. Your editor sometimes is biased in favor of foreign regulators and systems. After short-sellers like Citron Research and Muddy Waters revealed how crooked Chinese small cap firms got backdoor listings on the US- and Canadian markets, I hired a reporter bilingual in Chinese to write up shares listed on the London junior exchange, the Alternative Investment Market or AIM.

I assumed that since these stocks had a UK domicile or registration in a UK jurisdiction, plus a UK broker backing them (a Nominated Advisor or Nomad), and since they were written up by Reuters and the Investors Chronicle, they were more fraud-proof. Not so.

One of the stocks Ms Ng found for us was a sportswear firm aiming at the teenage market called Naibu Global, NBU-LSE. NBU was also boosted by Simon Thompson of the Investors Chronicle, a stock advisory service of the London Financial Times.

Last year I sold the stock because it could no longer be tracked and traded in my US e-trade account. Lucky for me and my readers.

Its board in Nov. 2015 released a note reading that “it was disappointed to report that they have been unable to obtain any information on operations in China, and therefore they are currently unable to provide shareholders with any update on the Company. Neither Mr Lin Huoyan, the Chairman, nor Mr. Lin Congdeng, executive director, have responded to requires from the non-executive directors to provide such information [and an audit for the year 2014.]. The non-executive directors [in Britain] have appointed KPMG to prepare a report on the Group's financial position...and will decide what steps to take regarding the continuing business of the Group...” Trading was suspended while the UK board sued to gain control of NBU's operating sub and bank accounts. The board also fired Lin Huoyan who owns 53% of the Chinese sub and Lin Congdeng. I fired Ms. Ng.

 

More on fraud elsewhere for paid subscribers below.

 

Australia cut interest rates by 25 basis points to 1.75% and this will have a lot of impact on our shares, discussed below along with nore for paid subscribers about banking and finance, drugs, telcos, oil, cement, chemical producers, auto and airplane parts makers, IT, a REIT, and a fund.

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Reprint of Helicopter Money

Mon, 2016/05/02 - 2:04pm | Your editor

With my i-Phone back, it turns out that my latest gizmo may be what ate my corporate internet account. Until I can get it fixed you will only get hot news. I will reprint older notes for pre-subscribers like the best one I wrote last week, in my opinion.

Now that the Bernie Sanders candidacy has effectively ended, it's time to take on some of the measures he advocated. The main need is for US spending to increase to get the economy out of its funk. The Fed's various quantitative easing and interest rate fiddles have failed to get spending up. Households are still failing to shop till they drop, while the corporate sector is using cheap borrowed money and debt vehicles to fund moves which do not help the overall economy. This includes funding mergers and acquisitions, often piled up on each other to generate what looks like growth for a company but is nothing of the sort. Valeant is one but there are plenty of others in tech, medical devices, eateries, funding cheaply stock buybacks, executive perks, and even dividends

What we need, to quote Ben Bernanke and before him Milton Friedman, is “helicopter money”, a way to increase spending by the hoi polloi. The idea of dropping cash from the sky is, of course, a fantasy, but it is what our central bank should be doing, in the opinion of experts, who by the way are not from the left wing like Bernie. The Fed can intervene even if Congress stupidly blocks deficit spending out of an exaggerated fear of inflation resulting from “money-printing”.

Among the programs Bernie advocated are several that would help get cash into the hands likeliest to spend spend it. Start with student loans. As a relative of a young pediatrician named Rebecca, I know first-hand what kind of debt is incurred to go to medical school. Other courses of study are shorter but in the present era also very costly. Long term they may help the former students and the economy overall, but short-term the ex-students suffer.

Another set of urgent needs involves America's creaky and broken down infrastructure, everything from hospital or schools to bridges and highways, public transport systems and railways, water and sewage works, dams, solar power stations, airports, bigger jails, holding sites and orphanages for illegal immigrants, a wall across the Rio Grande paid for by Uncle Sam, parks, canals, whatever.

If abortion clinics are required to have hospital facilities then the government should pay to upgrade them, particularly given the risk of babies born with diminished cranial capacity after a pregnant woman was stung by a Zika-virus mosquito.

The spending should begin by our government but there is no reason why private sector arrangements cannot cover part of the cost and be recuperated for investors. The helicopter has to land eventually, remember.

I also think Hillary Clinton has a few smart ideas on early childhood education (shares of Head Start!) and enrichment programs for older children. Leave for new mothers (and fathers) could be funded. More help paying for Obamacare would probably improve the nation's welfare.

With the impetus from the money suddenly in hand and the earnings of all those new construction projects, the economy will take off. Remember that the idea doesn't come from Keynesians and lefties but from a Nobel Prize winning economic expert on the Great Depression who was firmly on the far right of the Republican Party.

More for paid subscribers follows with today's news about our companies, some of its delayed by the snafu. We have notes from Hong Kong, Spain, Canada, Britain, Israel, Brazil, Switzerland, The Cayman Islands, The Netherlands, and Australia, and we start off with fund notes for a change.

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Sunday Special

Sun, 2016/05/01 - 2:14pm | Your editor

Today I updated our portfolio tables, after taking off for the 2nd day of Passover last weekend. There is good news and bad. The good is that my cellphone was found by the building super in the elevator shaft apparently undamaged. The backup phone I bought will have to be credited by our local Verizon franchise, run by a Sri Lankan Muslim who may not feel very kindly toward me.

To view the tables, visit www.global-investing.com and click the printer friendly buttons to view the spread-sheets, even if you don't want to print the tables. Pre-subscribers may view our closed positions, which did not change in the past two weeks, while full subscribers can see the whole 9 yards.

Then there is bad news. First my Christian best girlfriend Lydia, having battled three different breast and lung cancers for 5 years, has died. She won the title after her prececessor Heather converted to Judaism.

Lydia lost her husband less than 3 months ago, shortly after they became grandparents for the first time. And, yes, she smoked when younger, proving that she was liberated from her suburban upbringing with unfiltered black tobacco Balkan Sobranie cigarettes.

More bad news. It may be that my i-Phone is blocking my access to Google email linkage to my website. There are hints on the Internet that this is happening systematically. The horrible Hostmonster webhosts for my site have now opened an inquiry after brushing me off for 3 weeks. And our webmaster returns from leave this week.

If an i-Phone de-activates your webmail there is another reason for dumping Apple, AAPL.

Now for my paid subscribers...

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Small Cap Update

Fri, 2016/04/29 - 1:12pm | Your editor

Bo-Peep's iPhone may have fallen into the elevator shaft. The super is checking because both of us would prefer to blame me rather than a pickpocket in the building.

Our griefs over email turn out to be the result of a new charge for linking your Hostmonster webhosting for your website to gmail, imposed without telling the customer by the Salt Lake City-based company, which then cut of our main email account with a huge pile of contacts and archived material. This is what google encourages you to do with your mail.

The charge was $5. I paid it of course, but now there are complexities which Hostmonster says I have to clear with Google. The various toll-free numbers at google require that you input a code which Hostmonster refuses to provide, having taken the $5 however.

The 21st century business model is clearly rotten. Our webmaster returns next week and of course I will change webhosting companies.

More for paid subscribers today from smaller companies in Singapore, Belgium, Australia, Mexico, Israel, Brazil, India, and Canada.

Read more »

Helicopter Stimulus

Thu, 2016/04/28 - 12:51pm | Your editor

 

Now that the Bernie Sanders candidacy has effectively ended, it is time to take on some of the measures he advocated. The main need is for US spending to increase to get the economy out of its funk. The Fed's various quantitative easing and interest rate fiddling have failed to get spending up. Households are still failing to shop till they drop, while the corporate sector is using cheap borrowed money and debt vehicles to fund moves which do not help the overall economy. This includese funding mergers and acquisitions, often piled up on each other to generate what looks like growth for a company but is nothing of the sort. Valeant is one but there are plenty of others in tech, medical devices, eateries, , stock buybacks, executive perks, and even dividends

What we need, to quote Ben Bernanke and before him Milton Friedman, is “helicopter money”, a way to increase spending by the hoi polloi. The idea of dropping cash from the sky is, of course, a fantasy, but it is what our central bank should be doing, in the opinion of experts, who by the way are not from the left wing like Bernie. The Fed can intervene even if Congress stupidly blocks deficit spending out of an exaggerated fear of inflation resulting from “money-printing”.

Among the programs Bernie advocated are several that would help get cash into the hands lieliest to spend spend it. Start with student loans. As the relative of a young pediatrician named Rebecca, I know first-hand what kind of debt is incurred to go to medical school. Other courses of study are shorter but in the present era also very costly. Long term they may help the former students and the economy overall, but short-term the ex-students suffer.

Another set of urgent needs involves America's creaky and broken down infrastructure, everything from hospital or school d to bridges and highways, public transport systems and railways, water and sewage works, dams, solar power stations, airports, bigger jails, holding sites and orphanages for illegal immigrants, a wall across the Rio Grande paid for by Uncle Sam, whatever.

If abortion clinics are required to have hospital facilities then the government should pay to upgrade them, particularly given the risk of babies born with diminished cranial capacity after a pregnant woman was stung by a Zika-virus mosquito.

The spending should begin by our government but there is no reason why private sector arrangements cannot cover part of the cost and be recuperated for investors. The helicopter has to land eventually, remember.

I also think Hillary Clinton has a few smart ideas on early childhood education (shares of Head Start!) and enrichment programs for older children. Leave for new mothers (and fathers) could be funded. More help paying for Obamacare would probably improve the nation's welfare.

With the impetus from the money suddenly in hand and the earnings of all those new construction projects, the economy will take off. Remember that the idea doesn't come from Keynesians and lefties but from a Nobel Prize winning economic expert on the Great Depression who was firmly on the far right of the Republican Party.

 

Today by not cutting the yen's negative interest rate further resulted in an unwanted rise of the yen defeating the aim of Abenomics.

 

More for paid subscribers follows starting with no less than 3 quarterly reports on a busy Thursday, plus tidbits from around the world. Our reporters are Brazilian, Canadian, and Irish, and we also have fund news from Britain, Mexico, the Cayman Islands, and Germany.

Read more »