Global Investing newsletter

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.

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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.

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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.

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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.

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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.

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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.

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The Slide Begins

Mon, 2017/11/13 - 3:03pm | Your editor

Adrian Ash, Head of Research at London gold-trading site bullionvault, writes:
One key requirement of money is that it doesn't drop 27% of its value inside 4 days, only to regain half that drop in the next 36 hours. Hyper-volatility signaled the death of the German Reichmark following World War I. (Ed: actually in was the printing press which doesn't mean that huge upward and downward moves don't hurt the appeal of the crypto-currency.)


Bitcoin: Money of the future? asks this neat little video which just won a competition run by the European Central Bank. "Nope," comes the video's answer, [given] Bitcoin's huge volatility to date. While failing to find monetary use outside the trade in illicit stuff on-line (for which they are perfect), they will no doubt play some role in our legal monetary future. Coins began replacing unwritten debts in the 7th Century BC. Paper notes acted as a receipt for gold coin from the Middle Ages. Today's contact-less cards make both coins and paper redundant [for] the vast majority of shoppers.. Whatever the social, economic, and political risks of choosing to abolish cash like this, money is a tool which humanity has constantly changed and re-invented. Indeed, the blockchain technology underpinning today's crypto-currencies...with separate systems all processing and recording each transaction rather than a licensed bank getting in the middle with its fees is showing strong appeal to central banks like the ECB.
BullionVault seeks to help people get out of currency, into gold or silver or platinum, as a secure cost-effective store of value. Liquidity on the way out is paramount, back into cash that's ready for spending or converting into other assets elsewhere as you choose. Building new payment mechanisms, or enabling customers to store value in currencies different from the four funding and trading currencies we offer is not what we do. If you want to sell your gold to buy shares or a new house, BullionVault will enable the first leg of that trade at the very lowest costs. For the second part, you will want to find the best value process for yourself. That's why we don't offer Swiss Francs as a funding or trading currency, despite frequent requests over the years. We don't accept equities, bonds, seashells, cigarettes or 5-ton lumps of stone either.

“The Swiss central bank has worked to destroy the Franc's reputation for stability. Like every other monetary authority, it wants cheap money to juice the economy no matter the cost to wage-earners, savers, and the country's international standing. But Dollars, Euros, Sterling, and Yen are the currencies quoted and dealt by the professional wholesale bullion market. It's the deep liquidity and low costs of that market,free from costly FX transactions,.to which BullionVault seeks to give its users access. Outside the 3 major currencies we've accepted since launching in 2005, only the Japanese Yen has been added, because it has the depth and liquidity we need to ensure low friction and low costs for ourselves and our users. So, while we haven't missed the interest, excitement and innovation building around Bitcoin since its invention in 2009, we still don't believe it currently offers BullionVault any commercial opportunity. BullionVault's ambition [is] to be the best in physical precious metals which makes us the largest provider to private investors anywhere on the internet.

“This latest bubble (and bubble it is) also maps the boom-bust seen at the birth of other revolutionary technologies and tools in history. Think of listed shares and government bond markets (the French Mississippi and then South Sea Bubble 1720), .railways (the British bubble of the 1840s),.investment trusts (Wall Street's bubble and then Great Crash 1929), and of course the internet (the DotCom Bubble and crash of 1996-2003). Which is it for Bitcoin? Tulips or railways? Useless tulips and very useful railways both destroyed herd investors who bought too late into the initial hype and didn't get out before it burst.”

 

Bullionvault is sponsored by the World Gold Council as is the gold investment vehicle we recommend to our paid subscribers. Our gold play is SPDR Gold, GLD, an ETF sponsored by the mining companies in the WGC. We used to run ads for bullionvault.com which failed to get enough readers to sign up. Gold buyers are mostly older men who believe that the government is out to debase the currency, Our advice is to invest internationally rather than to put all your shekels into the barbaric relic, gold. So we lost the ad revenues, which doesn't mean that I don't listen to Adrian.

I recommend that every portfolio include some gold to offset sell-offs in stocks and bonds. IT's happening today  on worries about US tax reform, problems with Brexit, and GE halving its dividend from 4.69% to 2.34% The Brexit news is that Foreign Secy, who doesn't often accept blame, has had to apologize for remarks that put a British prisoner in Turkey at risk. There is a rebellion against the Teresia May team which may further frighten British industry and the government now promises that there will be a second parliamentary vote on any deal it strikes with the EU. The US hit a new high budget deficit in Oct, up 38% y/y to $63 bn, presumably because of disasters. This makes a tax rewrite less likely because it has to keep the deficit from rising more than $1.5 trillion. Sept. actually saw a surplus.

Natch gold is up. And natch the stock market is not.

 

More for subscribers follows from Argentina, Australia Belgium, Brazil, Britain, Canada, Colombia, Germany, Greece, Hong Kong, Ireland, Israel, Russia, South Africa, Spain, Sweden, and the USA. There is lots of M&A action as the year rolls to a close.

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Sunday Tables Posted

Sun, 2017/11/12 - 1:49pm | Your editor

Today is not as cold as yesterday but it is still too cold to trek to our local Chinese restaurant, so we are having pasta. I have posted the global-investing.com tables at the website. Everyone gets to see our closed positions table--which is now showing some sales for tax reasons--but only current subscribers are allowed to see our current holdings of stocks, bonds, closed-end and exchange-traded funds.

More on methodology follows for paid subscribers: Read more »

Terrible Thursday Fell on Friday

Fri, 2017/11/10 - 4:08pm | Your editor

This is another day with many reports and stock market news. The stock market has become the shock market because investors have discovered that the cuts in corporate taxation they had hoped for will be deferred to 2019 because of handouts to other taxpayers to whom Republican in Congress owe more. Moreover Blue State “middle class” taxpayers, who are more likely to be stock investors according to polls, like those of us along the east and west coast, risk losing their ability to write off state and local income tax and mortgage interest, long-term loopholes, because we are not expected to vote to re-elect Republican senators or members of congress. Also under the gun is the deductability of alimony or benefits to adoptive parents, to allow for an increase in tax breaks for becoming parents even for the super-rich.

 

All this because without Democrat vots the congress cannot raise the deficit by more than $1.5 trillion over the next 10 years, thanks to a ceiling voted to prevent the former Adminstration from using its majority after Obama's win from cutting taxes. John McCain has called the tax deal “dead on arrival”. Hence Wall St. is in the red.

 

Enough grousing about the missing link in the current debate, tax reform. Time to hit the road and report on our companies from Switzeralnd, Canada, Germany, Japan, Mexico, Finland, Hong Kong, Israel, Britain, Denmark, Ireland, Singapore, Indonesia, Chile, Colombia, Thailand, Greater China, and Brazil.

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