Global Investing newsletter

IMF Outlook

Mon, 2017/07/24 - 12:19pm | Your editor

The International Monetary Fund produced its 2nd half updated forecasts today. The US economy is now predicted to grow 1.7% rather than 2%. Household well-being has deteriorated the most in three years. The IMF also cut its forecast for Britain, now expected also to log in a 1.7% output rise, down from 2% predicted in its April forecast, the first downgrade since the EU referendum late year. After the vote in June 2016, the Fund had to raise its British forecasts to 1.1% for this year (in Oct.) to 1.5% (in Jan.) and 2% (in April).


The Fund's downgrade of the US outlook results from lower expectations for tax reform and infrastructure funding measures from the beleaguered Trump Administration. The IMF, which operates from K Street, in Washington, D.C., always has its forecasts vetted by the countries themselves which means that they tend to be better than the final outcome turns out to be.


My account is now mostly closed at Fidelity but it has not yet landed at Schwab, despite promises from the former. So today's blog is incomplete. But we have news from the US, Mexico, Britain, Israel, Germany, Panama, India, Sweden, Denmark, Japan, and Brazil.

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What A Day!

Fri, 2017/07/21 - 1:01pm | Your editor

Today is the Friday from Hell, with the temperature and humidity in the mid-90s and 8 company reports hitting before today.

Moreover my desktop computer has been infected with a virus called “accelerate” which pretends to be seeking out viruses while really being one itself. I have no idea how I got infected, but of course will not call the toll-free number that it displays to get “help”.

Meanwhile my Avast free antivirus program is displaying “jrog2” which makes me think of the pirate flag, and is offering to protect banking and shopping on a desktop computer if I upgrade. And my wifi is proving intermittent. Moreover jolly roger so far failed to take out, the virus from 2014, which insists on scanning your computer and demands that you phone (855) 680-4904) to activate your account to stop this. Among its nastier habits is to stop the clock on the computer and keep me from moving to the web

Meanwhile Fidelity, my soon-to-be-ex brokerage, has blocked my access to all US-traded shares and bonds in my account, and is only showing positions held on foreign markets, but not US ones, which is scary with GE reporting today (I own it like any respectable US investor.) Moreover Fido transferred $37,000 from my “core” money market account (cash) to Schwab and is now threatening to bust my two most recent trades because they have not been paid for—because Fido itself transferred the cash.

As I am increasingly learning, the services on the Internet, like search or corporate g-mail are increasingly trying to charge for what used to be free. My mistake. I am just soooo 20th century.


More for paid subscribers from Australia, Panama, Mexico, Britain, the Dutch Antilles, Britain, Spain, Switzerland, Argentina, India, Sweden, Mexico, South Africa, Israel, Colombia, and Canada.

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A Top Forecaster Speaks

Thu, 2017/07/20 - 1:37pm | Your editor

This morning BofA Merrill Lynch's contrarian macro analyst David Woo made some forecasts and suggestions to Washington, using game theory and psychology notably on tax reform, backing a 5% VAT in lieu of a border tax, to finance a corporate tax cut. He also thinks Pres. Trump has less to lose than Republicans in Congress from a government shut-down so he will use this to get his way. Having a rep for being a madman is the way to win games of chicken, to quote his analysis.

During the shut-down, Woo argues, both Wall Street and the dollar would suffer.

The analyst, head of global rates and currencies research was named one of the 12 smartest people on Wall St. and famously predicted a Trump victory last year. Today he also made a forecast for Britain, that sterling will suffer after the German election because a “soft” Brexit would become less likely. Mr Woo famously also forecast the drop in China's renminbi and the Canadian loony before they occurred.


The head of the Frankfurt Stock Exchange, Carsten Kengeter, has been indicted for taking bribes by its regulator, the State of Hessen where both my parents were born.


More for paid subscribers follows from Hong Kong, Mexico, Japan, Denmark, the Dutch Antilles, Nigeria, South Africa, Britain, France, India, Brazil, Canada, Israel, and Switzerland.


There will be no portfolio update this weekend as I cannot get current quoted prices or research for my non-US shares from Fidelity, nastiness by Senior Director of Risk Management Erin McNally denying me access to prices on its international trading desk. He is going beyond the rules to try to hurt me. The earliest the transfer to Schwab can be scheduled is next Wednesday.

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Semper Fi

Wed, 2017/07/19 - 3:12pm | Your editor

Yesterday my office phone was finally re-installed by the phone company. My first incoming call was from my brokerage, Fidelity. I moved in April after my prior broker, E-trade, failed to provide a 1099 for my US taxes before the April 15 deadline a second year in a row, requiring that I file late. On the phone was someone named Erin McNally, whom I thought was a hoax caller, because he was a man (and Erin usually is a woman's name) and because he had a Canadian accent. But he was real enough.

He told me that my account with Fido was being closed by “our firm” because of my having caused trouble over a botched trade 8 years before. .

Back then, your editor owned a French share she had written up on these pages, Stallergenes, for which a takeover bid by a Swiss firm had been made, for cash. I was called by a lawyer from the Salt Lake City-based global trading desk of Fido to tell me that since there was no US prospectus for the offer, I would have to sell my shares rather than accept. This may have been an error, as other US owners among my readers were able to tender. However as a newsletter writer, I need to keep on the right side of the law so I told the lawyer that I would sell my shares and, to make it easier, I would accept 5 eurocents less than the Swiss buyer was offering.

The very next day a reader who worked with the Marquette De Bary brokerage here in NYC called me to say that she was worried because a large trade had gone through 30% below the bid price and it might mean there was a problem with offer.

In fact there was no problem with the offer. It was just that the Utah lawyer had put in my Fido order not in euros, the currency of France, but in US$s. It was partly my fault as I did not ask the caller to bring a member of the global trading desk to take my order.

I then tried to get Fido to make me whole because of the currency mistake, and they refused to eat the loss. So I went to arbitration over the matter and, in case you don't know it, arb is rigged in favor of the brokerages. I lost and then was told never to darken Fidelity's door again.

When the tax mess blew up at E-trade I did not go back to Interactive Brokers, my first haven after Fidelity, because its systems are geared for institutional investors who have other sources of pricing information, like Bloomberg machines, which I cannot afford. I considered Merrill and TD Ameritrade but neither was offering international access which I need, so I went to Fido again after one of my contributors suggested they would have forgiven me in the interval. I don't know if he spoke to anyone at the firm, but I suspect he did.

I was upfront when I did the application explaining that I had gone to arbitration 8 years prior and was repeatedly told this was water under the bridge. So I was surprised at the call from Mr Erin, but checking with those who had welcomed my account earlier, he was the real thing. Since Fidelity is privately held, there is no public information on its officers and they confirmed that he was indeed Senior Director of Risk Management and that I was being ousted.

The irony is that I have reported here on excellent execution by Fido since I opened my new account.

I have now opened an account with Charles Schwab, where I didn't go the last time because they would not provide price info on a bookie share I owned then, but now have sold, Ireland's Paddy Power PLC. As always I tell the signup staffers, in this case one Mr Fox, that I am the editor of a financial newsletter and that I write about stocks but am not a manager of money or employed by a brokerage.

So far they have accepted my account and after work I hope to meet the man at their Park Ave branch who is supposed to look after my account.

Wish me luck!


Forget Winnie the Pooh. The latest Chinese firewall on the internet blocked Whats App messaging from Facebook. This is no longer about a cute bear but amounts to a crackdown on foreign information getting to China's netizens. More on this below for paid subscribers. Offsetting this bad news, China also paused its tightening, according to BofA Merrill Lynch which says it is tactically bullish on the country for growth and containing inflation. Its veteran analyst Michael Hartnett today told investors he has a buy call on China, Korea, and Taiwan with a focus on technology. Why we disagree is spelled out below for paid subscribers.


The equivalent in France of the head of the joint chiefs of staff has resigned over military budget cuts planned by the Macron government, Gen. Pierre de Villiers. This row is the first with the power structure of his country hit by the new-broom president.


More for paid subscribers follows from Germany, Australia, Argentina, Hong Kong, Israel, Canada, Switzerland, Britain, the Dutch Antilles, Norway, Sweden, Finland, and India. We have a half year report today for paid subscribers and a two quarterlies.

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Jane Day

Tue, 2017/07/18 - 1:35pm | Your editor

Today is Jane Austen's Jahrzeit Day, 200 years on. I first read Pride & Prejudice in a children's edition given to me by my father's left-wing intellectual cousin, which shows you that the author's continued sales reflect a subversive bent that was rare in the early 19th century, particularly among women, and particularly among spinsters.


After filing about new Chinese censorship of comparisons of Xin Jiping with Winnie the Pooh, our Japan correspondent sent me an article from the Hong Kong Free Press on another cartoon ban. Official pressures from Beijing were blamed for the withdrawal last month from the Annecy (France) annimation film festival of Liu Jian's Have a Nice Day, a cartoon film about a bag of money stolen by a chauffeur in a Chinese small town.

The censor objected to the gangster movie because the comedy showed the contemporary China is “bleak” and “dreary.” The censorship was first reported by La Croix, a French Catholic daily and only withdrew it from the 57th Annecy program when asked to do so by Liu Jian, lest he be endangered. It had been the first time a Chinese film had been shortlisted at a major international film festival.


Today's blog is late because I had to wait for a phone repairman to reinstall my office line which has been down for over two months. My husband says it reminds him of when we first lived in France and phones were run by the PTT, a government agency. The saying then was “half the population of France is waiting for the telephone installer and the other half is waiting for a dial tone.” That was pre-Macron, of course.


More for paid subscribers follows from Canada, Israel, Ireland, South Africa, Spain, Finland, Brazil, Australia, and Mexico,  mostly rating changes. Nothing from Annecy or Beijing, however.

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Winnie and Vanity

Mon, 2017/07/17 - 1:41pm | Your editor

Over the weekend I had planned today to comment on the Chinese ban on mention of Winnie the Pooh, and on Weibo. This is because of an unflattering cartoon four years ago which compared the pudgy Chinese leader Xi Jinping with tall, slim Barrack Obama calling them Winnie and Tigger. Then in 2014 a cartoon showed Japanese Prime Minister Abe as Eeyore alongside a plump Pooh.


You are also now banned from making animated cartoons of the Pooh bear on Chinese sites. RIP is outlawed because it might refer to Nobelist Liu Xiaobo who died last week.


I was going to lead with this story about the renewal and extension of Chinese censorship which came out over the weekend from Asia, but it became front-page news in today's Financial Times, so I have been gazumpfed. As China moves toward its 5-year congress we are not allowed to comment on Xi's pot-belly and build. Or all Chinese leaders' dyed black hair.


It makes our own rather vain president sound almost rational.


McAfee virus protection is removing the warning notice on our website, which called our site “risky to visit”. However they did not say why it was placed there in the first place. Our site was long called safe by Norton—and it is. The reason we were targeted (without being given a chance to explain) is that they decided my blogs are spam. Given that they go out in full only to people who pay a real price for them, this is astonishing.


More for paid subscribers starting with a new stock pick today, and news from Australia, Canada, Britain, Israel, Australia, Argentina, Chile, and India.

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Sunday Tables

Sun, 2017/07/16 - 2:23pm | Your editor

Today we broke our routine and had lunch at a new South Indian thali joint which opened near here. It was better than the one we used to go to in New Delhi. I did my tables this morning but now am writing things up.

The main news is that with the dollar depreciating, almost every foreign stock is up, above all Canada and Mexico ones, because their interest rates are also going up like ours. And whatever their political risks are, they seem less threatening to markets than the perils of Donald Junior Trump.

Which is not to say that stock picking has no role to play. Today seven of our single stock picks are up in triple digits, along with a closed-end fund and an exchange-traded one, plus two real estate investment trusts, one for India. The REITs are not up based on their initial purchase prices but based on it plus their distributed profits.

More details for paid subscribers who are all celebrating too. Join them on their way to the bank by subscribing to our newsletter at

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Faux Pas

Fri, 2017/07/14 - 12:52pm | Your editor

Happy Bastille Day! Pres. Trump is in Paris as the representative of the country which 100 years ago sent troops to France under the slogan: “Lafayette, nous voilà” or Lafayette, here we are! He managed two faux pas already, first complimenting Mme Macron (who is closer in age to Trump than she is to her husband, the French president) for looking so good, which translates as “être bien preservée” not considered a compliment to a Frenchwoman.

Then he stumbled some more in his tweet about “their failed Obamacare replacement approved” which put the adjective failed in the wrong place.

Which brings me back to gold. Your editor is not keen on buying gold to prepare for a stock market crash or a rise in inflation risk because these cannot be predicted based on past history. In economics, history tends not to repeat because everyone is looking at the same patterns.

My call is for investors to hold gold as a hedge against likely geo-political upheaval. Between the risks to his family members over the Russian involvement in his election win and potential loss of wealth, between his visible weight gain and distraction and loss of focus, there are real risks of something bringing the Trump Administration to a premature close. Having lived through Watergate I want an exit strategy.

As the operator of a blog on foreign securities I would normally expect that to offset US risks for my readers. But in case you haven't noticed, there are unexpected political risks in other countries as well. I am not talking about Venezuela or Zimbabwe or other long-term basket case economies. I am referring to normal boltholes for US investors in the Americas, Europe, and the Far East: Mexico, Canada, Brazil, Britain, Germany, Hungary, Poland, Italy, Israel, India, Hong Kong, South Korea, Taiwan, Malaysia, South Africa, The Philippines, all facing political crisis whether generated internally or in reaction to missteps by the US, the Fed, the European Union, North Korea, whatever.


More news today from several of the countries listed above including a quarterly report. Plus two stock recommendations.

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XYZ, Examine Your Zipper

Thu, 2017/07/13 - 12:22pm | Your editor

The website which broke the news that European Union sanctions against supplying the breakaway Crimea were being violated by Siemens through its Russian subs did it again. Finding two suspicious 90-ft blue-tarp-covered tubular cargoes at the port of Feodorova, the German daily tried to find out what was in them. The reporter was told: “We cannot talk about this. You understand, sanctions, Siemens.”

Under EU rules it is left to member countries to enforce embargoes and the largest industrial group in Germany seems to have evaded any controls via its venerable and profitable Russian affiliates. Which leads me to wonder why Britain is so keen to escape EU rules by negotiating to Brexit.


Today your editor would like to ask a certain Frenchman working in Britain to unzip his trousers, which certainly doesn't sound like me. But it is all in the interest of stock market research, I assure you.

More on this for paid subscribers follows along with news from Colombia, Israel, India, Mexico, Germany, South Africa,

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Fashion Notes

Wed, 2017/07/12 - 12:35pm | Your editor

Today I am wearing my Lavender Hill Mob earrings, little Eiffel Tower images, in the hope that the boost to gold prices will continue after a 3rd rise this morning. The comedy movie was about British gold smugglers who wound up shipping real gold mini-Tour Eiffels to Paris along with thousands of fake ones.

If financial assets like gold reacted to price changes like goods, a higher price would cut demand for the yellow metal. But because investors like to follow the herd, a higher gold price can actually boost demand.

My Eiffel Towers are fake and so are the others I bought in London for my two granddaughters, who will get theirs at a family gathering this weekend to fete my husband's 80th Birthday. Lavender Hill, in London, is not very steep and easier to climb than the Eiffel Tower and the recent gold price rises are similarly feeble. I think we all need a bit of insurance against political and stock market risk, which gold provides.


Another fashion note. The sharing economy in Hong Kong now includes luxury handbags from Chanel, Gucci, Hermes, and Prada in Hong Kong. You can go to Dou Bao Bao (Show off your handbag, a website) and borrow a designer handbag, according to Lin Wanxia of I only would borrow Louis Vuitton bags myself because the logo looks my initials. Until they became too-too common I collected second-hand LV bags in Paris.


More today for paid subscribers from South Africa, Germany, Canada, Britain, Colombia, Denmark, Sweden, India, Germany, Brazil, Netherlands Antilles, Finland, and Hong Kong.

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