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First Bank of Nigeria
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16 июня 2015, 00:08

MasterCard's Global Operations Look Good, Expenses a Drag - Analyst Blog

We issued an updated research report on MasterCard Incorporated (MA) on Jun 12, 2015.

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29 марта 2013, 03:46

Richard Attias: Should We Say BRICS or BRICA?

I spent the past two days in Durban, where I attended the fifth BRICS summit. One of the most notable things about the conference was the prominent African presence there. Fifteen African heads of state were invited including leaders from Angola, Republic of Congo, Egypt, Guinea, Ivory Coast, Senegal and Chad, to name few. I suggest that when we talk of the key emerging regions in the world, we should use the acronym BRICA instead of BRICS. The entire African continent is emerging, and many countries are growing at twice the rate of South Africa, where the economy grew by just 2.5 percent in 2012. In contrast, other countries like Ghana or Equatorial Guinea, or Nigeria or even the Republic of Congo, are growing at a much faster rate of 6 or even 7 percent. On his way to South Africa the President of China, Xi Jinping, made a two-day stop in Tanzania. After the conference he spent an additional day in South Africa, and he is visiting the Republic of Congo on his way back to China, signing billions of dollars of partnerships. This shows that Africa's rise is no longer just beginning -- this is definitely an emerging region, despite the political conflicts occurring in Mali, the Central African Republic and elsewhere. Since we started our initiative the New York Forum AFRICA, in June 2012 in Gabon, 100 percent focused on concrete business opportunities in Africa, every single week there is a forum about Africa happening everywhere except in Africa! Africa needs to manage its transformation through homegrown solutions. African leaders stand at a pivotal point in the continent's modern history. They should take note from the failures of "developed and advanced economies" in order to avoid similar crises as those suffered in the US and Europe. Those crises were of course caused by exorbitant indebtedness. Many African countries are financing projects through generous debt and loans coming from a small number of institutions -- China's ExIm Bank, the African Development Bank, the World Bank and so on. What's important to remember, however, is that these debts will some day be called. Without smart, long-term planning that addresses growth beyond just the first stage of investment, Africa could find itself in a difficult position a few years from now. It is imperative to coordinate and cooperate together to build the right model to finance Africa's growth and improve the continent's infrastructures. Meanwhile, the media should cover the good news related to Africa more often, because there is plenty of it and western citizens need to hear about it.

28 марта 2013, 08:00

The project Nigeria - State Education Program Investment Project has changed to Active

The project Nigeria - State Education Program Investment Project has changed to Active. To see more information, see the project information in the World Bank project database The development objective of the State Education Program Investment Project for Nigeria is to support: (a) need-based teacher deployment; (b) school-level management and accountability; and (c) measurement of student learning in Participating States. The project has two components. First component is results-based support to education sector reform program (US$125.0 million). The aim of this component is to support participating state governments’ program priorities through selected disbursement-linked indicators focusing on the achievement of tangible and measurable results over the project period as follows: (a) improving teacher effectiveness through better deployment, based on needs, including: (i) deployment to hard-to staff schools; and (ii) deployment in core subject areas (English Language, Mathematics, Physics, Chemistry and Biology); (b) improving regular measurement of student achievement; (c) strengthening school-based management committee’s participation and capacity for supporting school management and accountability; and (d) supporting stronger partnerships with the private sector to improve the relevance of technical and vocational schools, with emphasis on skills for employment. The second component is technical assistance (US$25.0 million). The objective of this component is to provide technical assistance channeled through two levels: (a) state level (US$20 million)- supporting participating states towards achievement of Disbursement-linked Indicators (DLIs), and the associated institutional capacity strengthening; and (b) federal level (US$5 million)- supporting the Federal Ministry of Education (FMOE) and Universal Basic Education Commission (UBEC) in overall project coordination and in providing the enabling environment in line with national policies, and in ensuring sustainability and scaling-up of successful activities in other potential states, for instance in Edo state.

27 марта 2013, 08:00

The project Nigeria Youth Employment & Social Support Operation has changed to Active

The project Nigeria Youth Employment & Social Support Operation has changed to Active. To see more information, see the project information in the World Bank project database The development objective of the Youth Employment and Social Support Operation Project for Nigeria is to: increase access of the poor to youth employment opportunities, social services, and strengthened safety net systems in participating states. There are four components to the project. The first component of the project is strengthening social safety net system. The operation through this component will help the government to define and consolidate the institutional responsibilities and implementation arrangements to ensure effective coordination among all units of the federal and state governments and all stakeholders involved in the implementation of social safety nets in Nigeria. The second component of the project is public workfare program. The objective of this component is to support the participating state governments to provide immediate labor intensive work opportunities for unskilled youths from poor households. The third component of the project is skills for jobs program. This component will pilot a new approach to skills training that would increase the effectiveness of the government's efforts to combat unemployment, especially among the youth. The fourth component of the project is Conditional Cash Transfer (CCT) program. This component will assist the Government of Nigeria (GON) in implementing a conditional cash transfer program.

05 марта 2013, 16:36

Frontrunning: March 5

As ZH has been saying for months... Draghi Will Need to Push the Euro Down Some More (WSJ) ... but careful with "redenomination risk" Senate Report Said to Fault JPMorgan (NYT) EU Opens Way for Easier Budgets After Backlash (BBG) China Moves to Temper Growth - Property Bubble Is a Key Concern (WSJ) China bets on consumer-led growth to cure social ills (Reuters) Italian president mulls new technocrat government (Reuters) Grillo says MPS won't back technocrats (ANSA) The Russians will be angry: Euro Chiefs Won’t Rule Out Cyprus Depositor Losses (BBG) China Bankers Earn Less Than New York Peers as Pay Dives (BBG) Investors click out of Apple into Google (FT) Community colleges' cash crunch threatens Obama's retraining plan (Reuters) Alwaleed challenges Forbes over his billions - Calculation of $20bn net worth is flawed, says Saudi prince (FT) Guy Hands Dips Into Own Pockets to Fund Bonuses at Terra Firma (BBG) North Korea to scrap armistice if South and U.S. continue drills (Reuters)   Overnight Media Digest WSJ * Switzerland's oldest bank Wegelin & Co was ordered to pay a total of $74 million to the U.S. government in the first-ever criminal sentence for a foreign bank accused of violating U.S. tax laws. * William Johnson, chief executive of H.J. Heinz Co, could walk away from the ketchup giant with more than $200 million if he leaves when its new owners take control. * The regulator overseeing Fannie Mae and Freddie Mac announced Monday one of the most concrete efforts to date for building a new infrastructure that could ultimately replace the government-controlled mortgage companies. * China set a growth target of around 7.5 percent for this year as it kicked off a meeting to finalize its leadership transition, reflecting how Beijing is turning away from breakneck growth based on exports in favor of a broader economy driven by spending at home. * Bruce Karpati, a top Securities and Exchange Commission lawyer who oversees enforcement of hedge funds and mutual funds, is in talks to leave the regulator for a fund-compliance job with Prudential Financial Inc, the insurance and asset-management firm, according to people with knowledge of the discussions. * Royal Dutch Shell Plc will build plants in Louisiana, America and Canada to produce liquefied natural gas as a fuel for heavy trucks and large ships, the company said Tuesday. * Cyprus's newly elected government is bargaining for a 17 billion euro ($22 billion) bailout from its euro-zone peers. But the little island won't get a cent until it wrestles with a long-standing issue: money laundering. * Nigeria's oil industry is at a crisis point because the theft of oil from pipelines and the pollution it causes are reaching intolerable levels, costing the country and oil companies billions of dollars a year, the head of Royal Dutch Shell Plc's Nigerian operations said. * The chief of Boeing Co's commercial unit says the return of its flagship 787 Dreamliner to service hinges on U.S. Federal Aviation Administration approval of the plane maker's proposal to modify the jet's errant lithium-ion batteries. * General Motors Co's decision to quash a sale of its Adam Opel AG unit three years ago and keep the ailing business was correct, Vice Chairman Stephen Girsky said Monday. Girsky also said a turnaround plan at Opel, which caused most of GM's $1.8 billion loss in Europe in 2012, is beginning to make progress. * Marriott International Inc on Tuesday is expected to unveil its designs for Moxy, a new hotel brand it is developing with a subsidiary of Inter IKEA Group, the parent company of the IKEA furniture brand.   FT The Financial Services Authority is set to crack down on asset managers using investors' money to pay for access to chief executives. The City's big banks are weighing a lawsuit against the EU over rules to cap bonuses. Vince Cable has called for a review of the government's funding for lending scheme after the initiative failed to prevent a slump in lending during the final quarter of last year. Ray Conner, the head of Boeing Co's commercial aircraft business, backed the company's decision to stick with a controversial new battery type for the 787 Dreamliner. HSBC has all but ruled out moving its headquarters to Hong Kong despite the threat of new European bonus restrictions.   NYT * While a trader known as the "London whale" has come to represent a multibillion-dollar blowup at JP Morgan Chase & Co , U.S. Congressional investigators have discovered that the problems involved more senior levels of the nation's largest bank. * H.J. Heinz Co disclosed late on Monday that William Johnson, its chief executive of 15 years, could stand to make nearly $213 million if Heinz's new owners decide to show him the door. * British finance minister George Osborne is expected Tuesday to urge his European Union counterparts to water down proposed rules restricting the size of bankers' bonuses. Many in the UK government and the financial industry worry that mandated limit to bonuses could make it harder for London to compete in international banking circles. * Fannie Mae and Freddie Mac will form a new joint company for securitizing home loans as a steppingstone toward reducing government involvement in the mortgage market, the regulator of the U.S. government-controlled companies said on Monday. * Bond insurer MBIA Inc on Monday won the dismissal of a lawsuit by the Bank of America Corp and Societe Generale that challenged its 2009 restructuring. * The Italian energy giant Eni SpA began Monday to restart operations of the trans-Mediterranean natural gas pipeline it closed Saturday after fighting between two Libyan militias threatened its gas complex west of Tripoli. * Hess Corp announced on Monday a plan to sell off its retail and refining operations and focus primarily on oil production. The streamlining comes as it seeks to fight off an activist investor, hedge fund Elliott Management, which said that the oil company's plans did not go far enough to address management problems. * Haruhiko Kuroda, the nominee to become the next Bank of Japan governor, said Monday that he would do "whatever is needed" to finally end deflation in the world's third-largest economy. * Gyorgy Matolcsy, the new governor of Hungary's central bank, tightened his grip on power during his first day in office Monday, issuing new rules that curb the powers of the bank's deputy governors. * Mexican glass maker Vitro SAB de CV said Monday that it had reached an agreement with bondholders, ending a dispute among powerful financiers that had ricocheted between Mexican and American courts. * Monster Beverage Corp defended its energy drinks on Monday against a lawsuit accusing them of being responsible for the death of a 14-year-old girl, arguing that no blood test had been performed to confirm that she died of caffeine toxicity.   Canada THE GLOBE AND MAIL * Canada's Natural Resources Minister Joes Oliver and Saskatchewan Premier Brad Wall each take to the road this week to woo American lawmakers and industry leaders as TransCanada Corp's proposed Keystone XL pipeline remains under the U.S. government consideration. * The federal Liberals are weeding out duplicate names and mischief makers as they count the Canadians who are eligible to vote for their new leader, but party sources say the final number will approach 300,000, far more than the 128,000 members that the New Democrats had on their lists last year when Thomas Mulcair was elected to lead that party. * British Columbia Premier Christy Clark offered up a second resignation on Monday for a plan to use public resources to prop up her Liberal Party's electoral fortunes, saying she will take responsibility for an ethnic voter strategy developed with input from key members of her staff. Reports in the business section: * Bell Media Inc has agreed to sell some of Canada's most popular specialty TV networks to smooth the way for a C$3 billion ($2.92 billion) acquisition of Astral Media Inc , including its share in six channels that Corus Entertainment Inc will buy to solidify its position as the dominant provider of children's TV. * Canada's housing market may still be cooling, but there are fears in some quarters that "bubble fatigue" will pump it back up heading into the spring season. Home buyers are skeptical about whether the residential real estate market is heading for a sharp price and sales drop. At the same time, mortgage rates are declining, not rising. * Toronto Star, Canada's largest newspaper, is cutting 55 jobs, or about 9 percent of its workforce, from its newsroom, outsourcing editing duties that are increasingly seen as too costly for cash-strapped dailies trying to cope with falling advertising revenue. NATIONAL POST * The Harper government is once again engaged in a war of words with a United Nations agency. Canada can't credibly preach human rights on the international stage when too many of its own citizens are going hungry, the UN's right-to-food envoy, Olivier De Schutter, told The Canadian Press in an interview. * Bear spray wielding thieves stormed into a Vancouver Apple Inc store just before closing on Monday, and hit about 40 people with the caustic spray before making off with an unknown quantity of iPods, iPads and laptops. FINANCIAL POST * CIBC World Markets Inc said on Monday that the Canadian economy should pick up speed in the first three months of this year, with growth of 2 percent compared with 0.6 percent in the final quarter of 2012. That should be followed by 2.3 percent between April and June, before easing to 1.9 percent the following quarter and ending with another 2.3 percent spurt in the last three months.   China SHANGHAI SECURITIES NEWS -- Regulatory rules on home price controls in China will be released before the end of March, according to housing minister, Jiang Weixin. -- Supervision of food and pharmaceutical safety will be strengthened to alleviate public concerns over the sectors, said Health Minister Chen Zhu. CHINA DAILY -- Japan has failed to engage in productive negotiations with China over the disputed islands and has through its actions invalidated the basis for China's restraint, said Fu Ying, the spokeswoman for the National People's Congress. PEOPLE'S DAILY -- The People's Daily published an editorial on Tuesday calling on the nation to deepen reforms and further develop the economy to build China into a powerful country.   Fly On The Wall 7:00 AM Market Snapshot ANALYST RESEARCH Upgrades Apollo Group (APOL) upgraded to Hold from Sell at Deutsche BankEV Energy (EVEP) upgraded to Outperform from Neutral at Credit SuisseMGIC Investment (MTG) upgraded to Overweight from Underweight at BarclaysMicroStrategy (MSTR) upgraded to Outperform from Market Perform at FBR CapitalPT Indosat (IIT) upgraded to Neutral from Sell at CitigroupRadian Group (RDN) upgraded to Overweight from Underweight at BarclaysSeadrill (SDRL) upgraded to Overweight from Neutral at HSBC Downgrades AmerisourceBergen (ABC) downgraded to Buy from Strong Buy at ISI GroupCasella Waste (CWST) downgraded to Market Perform from Strong Buy at Raymond JamesCliffs Natural (CLF) downgraded to Market Perform from Outperform at BMO CapitalImpax (IPXL) downgraded to Hold from Buy at CanaccordImpax (IPXL) downgraded to Market Perform from Outperform at LeerinkStandard Motor Products (SMP) downgraded to Hold from Buy at BB&TTHL Credit (TCRD) downgraded to Market Perform from Outperform at Keefe Bruyette Initiations AG Mortgage (MITT) initiated with a Neutral at Credit SuisseAcuity Brands (AYI) initiated with a Buy at UBSAegerion (AEGR) initiated with a Buy at BofA/MerrillAnthera Pharmaceuticals (ANTH) initiated with a Buy at JefferiesCredit Acceptance (CACC) initiated with an Outperform at JMP SecuritiesDiana Shipping (DSX) initiated with a Neutral at JPMorganDyax (DYAX) initiated with a Buy at JefferiesE2open (EOPN) initiated with a Buy at Benchmark Co.Health Insurance Innovations (HIIQ) initiated with an Outperform at Credit SuisseIntuitive Surgical (ISRG) initiated with an Underperform at Northland SecuritiesNetflix (NFLX) initiated with an Outperform at RBC CapitalNew Source Energy (NSLP) initiated with an Outperform at RW BairdSarepta (SRPT) initiated with an Outperform at LeerinkSupernus Pharmaceuticals (SUPN) initiated with a Buy at JefferiesZAIS Financial (ZFC) initiated with a Buy at Citigroup, initiated with an Outperform at Credit Suisse and initiated with an Overweight at Barclays HOT STOCKS AMR (AAMRQ), US Airways (LCC) received second DOJ request for more information regarding proposed mergerLockheed (LMT) beat Raytheon (RTN), Boeing (BA) to retain Aegis systems work, Bloomberg reportsMicrosoft (MSFT) acquired MetricsHub, terms not disclosedStarwood (HOT) to open 50 new hotels in Europe in five years, invest $200M in Luxury CollectionAmerican Apparel (APP) sees FY13 adjusted EBITDA $47M-$54MFitch upgraded Pioneer Natural (PXD) to “BBB-”, outlook revised to stableFDA issued second complete response letter for XARELTO (JNJ)Checkpoint Systems (CKP) to sell U.S. and Canadian CheckView businessBrunswick (BC) to consolidate its yacht/motor yacht production at Palm Coast plant EARNINGS Companies that beat consensus earnings expectations last night and today include:Golden Star Resources (GSS), Sun Hydraulics (SNHY), Park-Ohio (PKOH), ABM (ABM), Casella Waste (CWST), Santarus (SNTS), Ascena Retail (ASNA) Companies that missed consensus earnings expectations include:Memorial Production (MEMP), Alon USA Partners (ALDW), Quad/Graphics (QUAD), Ducommun (DCO) Companies that matched consensus earnings expectations include:Epiq Systems (EPIQ), Shuffle Entertainment (SHFL), Nautilus (NLS) NEWSPAPERS/WEBSITES Today’s ISM non-manufacturing report may provide a key all-clear for the U.S. economy. The headline index is seen barely changed at 55. But last month saw its most forward-looking component, the new-orders index, slip to 54.4 from 58.3, the weakest reading since April. After 41 months in a row in expansion territory, another sharp drop would be an ominous sign right now, the Wall Street Journal reports Americans should be able to take their used cellphones and tablets freely from one wireless carrier to another (T, S, VZ, VOD) if they aren't under contract, the Obama administration says, the latest victory to Internet activists seeking to shape U.S. technology policy, the Wall Street Journal reports Japan's aviation regulators said there are still "several steps" required before any battery fix for Boeing’s (BA) troubled 787 Dreamliner jet can be approved, Reuters reports Toyota Motor (TM) plans to soon reshuffle its top executives, sources say, as President Akio Toyoda attempts to dismantle a regimented decision making hierarchy at the automaker, Reuters reports Consumers in the U.S. spent about $782.5B for recreational goods, vehicles and services in January on a seasonally-adjusted annualized basis, representing 6.9% of total personal consumption, based on data from the Commerce Department. In the three years before the recession, the average was 7.4%, Bloomberg reports California gained a positive credit outlook following a voter-backed tax boost, an improving economy and previous budget cuts that helped to stabilize its finances after years of shortfalls, Fitch Ratings said, Bloomberg reports SYNDICATE Brookfield (BAM) to offer 8.07M L.P. units Del Frisco's (DFRG) announces sale of 4.75M shares of common stock for holdersFirst Industrial Realty (FR) announces 8.4M share common stock offeringJ.C. Penney (JCP) 10M share Block Trade; price range $16.40-$16.60Jazz Pharmaceuticals (JAZZ) offers 5.38M ordinary shares by selling shareholdersMRC Global (MRC) announces 17M share secondary offering of stock by stockholder and files automatic common stock offeringTrulia (TRLA) files to sell $100M in common stock Williams Partners (WPZ) offers 10M common units, private placement of 3M common units ACTIVIST/PASSIVE FILINGS Brigade Capital Management reports 5.4% passive stake in Ferro (FOE) Deutsche Balaton Aktiengesellschaft reports 9.96% passive stake in Gentherm (THRM) Endicott reports 9.9% stake in NewBridge Bancorp (NBBC) FrontFour Capital Group reports 5.1% stake in Fisher Communications (FSCI), urges company to seek strategic alternatives and work towards saleQuinpario Partners reports 4.2% stake in Zoltek (ZOLT), looks to remove board members Thomas Milton Duff reports 5.84% stake in Frozen Food Express (FFEX)

30 января 2013, 16:43

Frontrunning: January 30

Boeing misses Q4 top line ($22.3 bn, Exp. $22.33 bn) beats EPS ($1.28, Exp. $1.18), guides lower: 2013 revenue $82-85 bn, Exp. 87.9 bn Hilsenrath discovers DV01: Fed Risks Losses From Bonds  (WSJ) Airlines had 787 battery issues before groundings (Reuters) Monte Paschi ignored warnings over risk, documents show (Reuters) as did Mario Draghi China averts local government defaults (FT) Economy Probably Slowed as U.S. Spending Gain Drained Stockpiles (Bloomberg) Bono Is No Match for Retail Slump Hitting Dublin’s Fifth Avenue (BBG) Catalonia requests €9bn from rescue fund (FT) US plans more skilled migrant visas (FT) Japan PM shrugs off global criticism over latest stimulus steps (Reuters) CIA nominee had detailed knowledge of "enhanced interrogation techniques" (Reuters) Cleanliness Meets Godliness as Russia Reeled Into Cyprus (BBG) Deutsche Bank Seen Missing Goldman-Led Gains on Cost Rise (BBG) South Korea Launches Satellite-Carrying Rocket (WSJ) Football: Where Nepotism Works (WSJ)   Overnight Media Digest WSJ * U.S. President Barack Obama began rallying supporters Tuesday to back his immigration-overhaul plan, while Republican Senator Marco Rubio worked to persuade conservatives in his party to support a similar bipartisan plan that has gained momentum in the Senate. * Chesapeake Energy Corp Chief Executive Aubrey McClendon is leaving the company he built into the country's second-biggest natural-gas producer, citing "philosophical differences" with a board of directors largely installed by shareholders to curb his risk-taking and free-spending ways. * U.S. air-safety investigators Tuesday said they are stepping up microscopic and chemical examinations of the lithium-ion battery that caught fire aboard a parked Japan Airlines Boeing 787 three weeks ago, still seeking to determine whether internal defects may have played a role in the blaze. * Amazon.com Inc posted a 45 percent drop in net income in the fourth quarter, but some other measures of the online retailer's profitability came as a positive surprise. * The role Microsoft Corp would play in a privately owned Dell Inc is one of several issues being hashed out ahead of a final buyout agreement for the computer maker, people familiar with the negotiations said. * Jefferies Group Inc handed Chairman and Chief Executive Richard Handler a $45.2 million payday, making him the best-paid financial-company leader for the second time in three years   FT WIDER EURO 'TOBIN TAX' WILL NET 35 BILLION EUROS - The biggest euro zone economies could raise up to 35 billion euros with a Tobin Tax according to European Commission proposals; a clampdown on avoidance is seen as a "last resort" INDIA SEES END TO VODAFONE TAX DISPUTE - India's finance minister says he hopes the 2.6 billion dollar tax dispute with Vodafone will be resolved within the month, with talks planned this week. SWISS BANKS LOSE OLD TASTE FOR GOLD - UBS and Credit Suisse raised their fees for holding gold by in the region of 20 percent according to unnamed sources and traders. BP WARNED OFF OILFIELD PLANS IN NORTHERN IRAQ - A senior official in Iraqi Kurdistan said the company's plans to revive an oilfield in the disputed territory could put the firm at the "frontline" of conflict between Iraq and the Kurds RBS TO WIND DOWN M&A AS SALE CALLED OFF - RBS will wind down its mergers and acquisitions business after failing to secure a buyer. Most of its 40 or so M&A bankers were made redundant at the end of last year, two people close to the situation told the newspaper. BRUSSELS SOFTENS LINE ON BANK RINGFENCES - Michel Barnier, the EU's commissioner in charge of regulatory reform, said any rules on the structure of European banks would have to "preserve their diversity" , a retreat from plans to force banks to build barriers around securities trading operations. MCCLENDON TO QUIT AS CHESAPEAKE CHIEF - The chief executive of Chesapeake Energy, Aubrey McClendon will leave the company in April, citing "philosophical differences" with the board. CHINA ANGER AT EU TELECOMS DEMANDS - Europe's top trade official is demanding a bigger share of the Chinese market in telecoms network equipment. YOUTUBE TO SWITCH ON PAID-FOR VIDEO - The video-sharing website plans owned by Google plans to sell subscriptions that could see users charged to access some content, according to unnamed sources.   NYT * Even before battery failures led to the grounding of all Boeing Co's 787 jets, there were problems that raised questions about their reliability. * Chesapeake Energy's co-founder and chief executive, Aubrey McClendon, will retire on April 1, the producer of oil and natural gas announced on Tuesday, almost eight months after investors complained about a compensation plan. * Lanny Breuer, the U.S. federal prosecutor who led the Justice Department's response to corporate crime in the wake of the financial crisis, will announce on Wednesday that he is stepping down after nearly four years in the post. * Ford Motor Co posted a 54 percent gain in adjusted fourth-quarter profit, despite heavy losses in the troubled European market. * Pfizer and Eli Lilly each reported better-than-expected fourth-quarter profit on Tuesday as the companies weathered generic competition for once top-selling products through deals, cost-cutting and strong sales of newer products. * Amazon.com Inc missed expectations on both revenue and profit, but an increase in its operating margin - to 3.2 percent from 2.7 percent - caught investors' attention. * A federal judge in New Orleans on Tuesday approved an agreement between BP Plc and the Justice Department for the company to plead guilty to 14 criminal charges and pay $4 billion in penalties for the 2010 oil well blowout and spill in the Gulf of Mexico that left 11 workers dead and fouled hundreds of miles of shoreline. * The U.S. Food and Drug Administration on Wednesday approved the first drug to treat myelofibrosis, a rare but potentially life-threatening bone marrow disorder.   China CHINA SECURITIES JOURNAL --Authorities will keep in place or even strengthen measures aimed at restraining housing prices, but local governments are also likely to adjust policies based on local conditions, include supporting non-investment demand in some areas. SHANGHAI SECURITIES NEWS --China's inflation could fall to 1.8 percent in January due to a high base from last year, but the full-year figure could hit 3-3.5 percent, said Bank of Communications in its research report. --A recovery in the Chinese economy and policies supporting urbanisation could lead to a gradual rise in house prices this year, but a sharp rise is unlikely, due to continued polices to control the property market, according to a research report by China Commercial Real Estate Commission. --Chinese banks will increase loans to support urbanisation, with China Development Bank saying it will devote more than half of its loans this year to this purpose. CHINA BUSINESS NEWS --Most of the high-speed rail lines opened in recent years are operating at a loss, but those in more developed east China, such as the Beijing-Shanghai line, are doing better. SHANGHAI DAILY --Swiss food company Nestle is investigating one of its factories in Tianjin city, in north China, after an undercover reporter from the Qingdao-based City Sun newspaper found apparent health violations there. 21st CENTURY BUSINESS HERALD --China Development Bank will lend more than 500 million yuan ($80.33 million) to allow LDK Solar Co to reopen its silicon factory, but a local government official said the factory needs 1.5 billion yuan to resume operations.     Canada THE GLOBE AND MAIL * Alberta Premier Alison Redford may get the public "conversation" she's seeking on tax rates, but reaction to her latest speech suggests she'll need to lead by example with spending cuts if she expects broad support. Redford revealed, late in a conference call with Progressive Conservative party supporters Monday evening, some of the options on the table as she plans to overhaul the province's resource-dependent fiscal structure. * Stephen Harper's reluctance to wade further into a military mission in Mali extended to the funding of African troops on Tuesday, as Canada offered a modest boost in aid but did not join allies in pledging money for a multinational African force. Reports in the business section: * Nexen Inc has laid the groundwork for a concept to use trains to carry crude to the country's West Coast for export as Canada's energy industry rushes to find new ways to move oil out of North America. The Calgary company, which has agreed to a takeover by China's CNOOC Ltd, has spent more than a year on an idea that would see oil move by rail to the port of Prince Rupert in British Columbia, where an export terminal on federal land could load it onto tankers bound for Asia. NATIONAL POST * New Democratic Party leader Tom Mulcair has waded into the national unity swamp, with proposed legislation specifying that a bare majority Yes vote would be sufficient to trigger negotiations on Quebec's secession from Canada. FINANCIAL POST * Andrew Kriegler, a veteran of risk management and securitization, will join Canada's federal banking regulator as Assistant Superintendent of Supervision. Kriegler, who was senior vice-president of Treasury and Risk-Management at Canadian Imperial Bank of Commerce until August, is expected to replace Edward Price who is scheduled to retire as deputy superintendent from the Office of the Superintendent of Financial Institutions in June.   Fly On The Wall 7:00 AM Market Snapshot ANALYST RESEARCH UpgradesBob Evans (BOBE) upgraded to Overweight from Equal Weight at StephensChesapeake (CHK) upgraded to Buy from Hold at Stifel NicolausKB Home (KBH) upgraded to Outperform from Neutral at Credit SuisseNavios Acquisition (NNA) upgraded to Buy from Hold at Deutsche BankNorfolk Southern (NSC) upgraded to Overweight from Neutral at Atlantic EquitiesManitowoc (MTW) upgraded to Buy from Hold at BB&TVanguard Health (VHS) upgraded to Buy from Hold at Deutsche BankWaddell & Reed (WDR) upgraded to Neutral from Sell at Goldman DowngradesAffiliated Managers (AMG) downgraded to Neutral from Buy at CitigroupAmazon.com (AMZN) downgraded to Outperform from Buy at CLSAFord (F) downgraded to Underperform from Outperform at CLSAFossil (FOSL) downgraded to Sell from Hold at Brean CapitalGraco (GGG) downgraded to Neutral from Buy at Janney CapitalHarley-Davidson (HOG) downgraded to Neutral from Buy at GoldmanHawaiian Holdings (HA) downgraded to Hold from Buy at Deutsche BankIllinois Tool Works (ITW) downgraded to Market Perform from Outperform at BMO CapitalJetBlue (JBLU) downgraded to Underperform from Market Perform at Raymond JamesLennar (LEN) downgraded to Neutral from Outperform at Credit SuisseOpenTable (OPEN) downgraded to Perform from Outperform at OppenheimerPosco (PKX) downgraded to Equal Weight from Overweight at Morgan StanleyProLogis (PLD) downgraded to Market Perform from Outperform at Wells FargoU.S. Bancorp (USB) downgraded to Neutral from Overweight at JPMorganbasUnion Pacific (UNP) downgraded to Neutral from Overweight at Atlantic EquitiesYum! Brands (YUM) downgraded to Market Perform from Outperform at Bernstein InitiationsAlign Technology (ALGN) initiated with a Buy at Janney CapitalBuffalo Wild Wings (BWLD) initiated with a Neutral at Goldmanpriceline.com (PCLN) initiated with a Buy at Ascendiant Capital HOT STOCKS Kinder Morgan Energy (KMP) acquired Copano (CPNO) for about $5B in unit for unit transactionDell (DELL) deal may be announced next week, Fox Business News reportsThe National Transportation Safety Board said examination of damaged 787 Dreamliner (BA) battery ongoingMetLife (MET) said in talks to acquire AFP Provida from Banco Bilbao Vizcaya Argentaria (BBVA)Chesapeake (CHK) CEO Aubrey McClendon to retire April 1Cisco (CSCO) to acquire Cognitive Security, terms not disclosedRoche (RHHBY) sees 2013 sales growth in-line with 2012Jones Lang LaSalle (JLL) said new business pipelines “healthy”FDA approved new orphan drug Kynamro (SNY) to treat inherited cholesterol disorderDunkin' Donuts (DNKN) signed master franchising agreement to develop in VietnamBaskin-Robbins announced major expansion plans in China EARNINGS Companies that beat consensus earnings expectations last night and today include:ADT Corp. (ADT), Evercore Partners (EVR), Unisys (UIS), Ryland Group (RYL), Dolby (DLB), Robert Half (RHI), Broadcom (BRCM), QIAGEN (QGEN), Vertex (VRTX), Plantronics (PLT) Companies that missed consensus earnings expectations include:Arkansas Best (ABFS), Jones Lang LaSalle (JLL), IXYS (IXYS), Arthur J. Gallagher (AJG), Plantronics (PLT), Amazon.com (AMZN) Companies that matched consensus earnings expectations include:PolyOne (POL), First Busey (BUSE) NEWSPAPERS/WEBSITES Small investors are back in the market after abandoning it during the financial crisis. The return by individual investors is a big reason why the Dow Jones Industrial Average is moving toward an all-time high. The Dow has jumped 850 points in January, a 6.5% gain, marking its best start to a new year since 1989, the Wall Street Journal reports The Fed could be charting a course that leaves the highly profitable central bank with no extra income to hand over to the Treasury for several years. That’s what five Fed staff economists who examined how the central bank's bond-buying programs will affect its profitability over the long run, the Wall Street Journal reports Toyota Motor (TM) will recall 1.1M cars worldwide for defects, including 752,000 Corolla and Corolla Matrix vehicles in the U.S. to fix airbags that could be deployed inadvertently, Reuters reports A Dutch court ruled today that Royal Dutch Shell (RDS.A) can be held partially responsible for pollution in the Niger Delta in southern Nigeria, saying the company should have prevented sabotage at one of its facilities, Reuters reports A widening loss in Europe sent Ford’s (F) shares down the most in seven months, taking the market’s attention from Q4 earnings that beat estimates. Shares for Ford slid 4.6% to $13.14 yesterday, the biggest one-day drop since June 29 and wiped out most of their gains this year, Bloomberg reports Michael Dell is seeking majority control of Dell (DELL) in a buyout that would combine his 15.7% stake in the company with as much as $1B of his personal funds, sources say, Bloomberg reports SYNDICATE First Bancorp (FBNC) files to sell 3.39M shares of common stock for holdersFive Below (FIVE) 11.315M share Secondary priced at $35.65Keryx (KERX) commences offering of $55M of common stockNewLink Genetics (NLNK) files to sell common stockPiedmont Natural Gas (PNY) 4M share Secondary priced at $32.00Ventrus (VTUS) announces proposed offering of common stock ACTIVIST/PASSIVE FILINGS SAC Capital reports 5.7% passive stake in Starz (STRZA)

26 января 2013, 02:47

Ian Bremmer: Davos Lightning Round: Where Do Good Policy and Good Business Align?

Today I'm going to zap around the world a bit, outlining some global trends that are areas of opportunity, both for promoting the World Economic Forum's commitment to "improving the state of the world" and for businesses' bottom lines. And of course, with great opportunity comes great risk. I'll touch on a bit of that too. And I'll provide links to more material from me and others wherever possible in case a topic should pique your interest. Here goes. Lagarde world tour For a trip around the world, there's no better place to start than with a recap of the NYSE dinner here in Davos last night. The format was as follows: The very sharp and friendly Andrew Ross Sorkin moderated a discussion about global issues between IMF chief Christine Lagarde and me, which we came at from our different perspectives. She focused on the economics, with a splash of numbers and growth, focusing on trends, concerns and challenges. I hit the politics. Topics ranged from the Middle East to Iran, Japan, Europe, the U.S., globalization (or lack thereof) and even cybersecurity. We sparred the most on China, where former Australian Prime Minister Kevin Rudd, in the audience (along with 60 CEOs), also got into the scrum. The subject: is political reform coming? I was more cautious than Lagarde -- I say perestroika is coming, albeit slowly. Glasnost? Absolutely not. The process of opening up China's political system is too risky and destabilizing for the very people who would be implementing it: China's ruling elite. In terms of the corresponding dangers of nationalism as China engages in political reform (or avoids it, and increasingly distracts the public by stoking nationalism), I stood out as far more worried than she did. Same goes for our stance on information -- Christine was far more hopeful that information would empower the people in relatively short order. I'm unfortunately much more cynical as I look at the untold volatility between here and there. (See: the J curve). China really exemplifies the marriage of risk and opportunity, perhaps better than any other market. Yes, China is providing a huge portion of global economic growth, and it will soon become the world's largest economy. The opportunities cannot be ignored -- but neither can the risks. Put it this way: last year, how many CEOs did you hear saying they needed to wait for resolution on the fiscal cliff before they'd take money off the sidelines or start hiring in America? The United States was just too uncertain of a climate for investment, they said. How many CEOs say China is too risky to put money into? Virtually none. That's despite the fact that China is an exponentially bigger question mark than the United States when it comes to its trajectory and the risks therein. I can't stress this point enough. Of all the folks here at Davos of her level, Lagarde is one of the few that truly speaks openly and analytically. A tremendous pleasure sharing the stage with her, and it was a wonderful experience. You could've heard a pin drop; it didn't end until 11 p.m., but not a single person left the room (or if they did, they snuck out silently!). For a Davos dinner, competing with another 50 events across the place, that was pretty special. More on the post-11 p.m. story to come... Hollande didn't make it, but w @lagarde here, you don't really notice.Shouldn't future President of France be sufficient? #Davos— ian bremmer (@ianbremmer) January 25, 2013 Emerging market round-up My reservations about China are just one area where I try to draw focus to how emerging markets should not be grouped together into a single asset class. These are dramatically different markets with dramatically different priorities. This was laid bare in a session I conducted this morning, where I led a panel of officials in the governments of five emerging market countries at various stages of development. They were, in no particular order: Nigeria, Brazil, South Africa, Malaysia and Myanmar (or Burma, if you prefer). I'll briefly share some of the highlights. The conversation regarding Malaysia was great. I tried to frame debate around the following question: "How is the rise of China working for you -- and is your involvement in Trans-Pacific Partnership discussions with the U.S. et al problematic, given that Beijing trends between suspicion and opposition on the topic?" With Brazil and South Africa, we talked BRICS. I asked them how things are going with the development bank that these nations are building, as well as with the organization overall. Luciano Coutinho, who runs Brazil's development bank (BNDES) was very optimistic about what the BRICS could accomplish together, in spite of the disparate interests of the countries included. The same was true for South Africa's Minister of Trade and Industry. But as far as the BRICS arrangement went, Nigeria's minister was not as pleased -- that is, unless Nigeria gets its invitation. Nigerian trade min tells me he doesn't like the BRICS, keeps the Nigerians out. Would rather theBRINCS. #MembershipHasItsPrivileges— ian bremmer (@ianbremmer) January 25, 2013 Asked Nigerian Minister of Trade who does trade best with Africa--US, Europe, or China.Answer, without hesitation, China. #Davos— ian bremmer (@ianbremmer) January 25, 2013 You can't underestimate the scale of the development challenges in play in some of these countries. Brazil's infrastructure is world's away from the status of some of the other countries represented here. For example, Nigeria has a population nearly matching Brazil's -- but only 5 percent of the electricity output. Myanmar is perhaps the most exciting of the bunch, as it's the rawest opportunity here -- it is just beginning to emerge as an investment destination. There's a long road ahead. The electrification rate is just 26 percent. Indonesia and Thailand have roughly 250 and 370 motor vehicles per 1,000 people respectively -- Myanmar? Just 18. On top of that, in Transparency International's Corruption Perceptions Index from 2012, Myanmar ranked 172nd out of the 176 countries included. Myanmar's Minister of Tourism was exceedingly engaging, pleasant and refreshingly candid about the challenges facing his country. Despite the risks and hurdles for development among emerging markets, the opportunities are jaw-dropping. Over the past five years, two-thirds of global economic growth has come from emerging markets. Respect. The rise of the middle class? Here at Davos, Coca-Cola CEO Muhtar Kent provided us with a memorable line. "Five billion people will be middle class by 2030," he said. Of course, the rise of the middle class is an astounding opportunity, and one of the most important global trends at play today. But as they say, 'a lot can change in a year.' How about 18? First, we need to ask, just where is this middle class growth coming from? That's right: emerging markets. That comes with risks (see the section above). On top of that, growing middle classes themselves can pose problems for emerging markets' development. With great growth comes great growing pains. Let's take a look at some of the near-term challenges: Growing middle classes are threatening the authoritarian growth model in China, spearheading a protest movement in Russia, directing greater attention to the gridlocked political system and corruption in India, and demanding better public services and less corruption in Brazil. These things can be overcome. The trends are still overwhelmingly positive. But it's worth pointing to the volatility inherent in such a large-scale transition. If you are going to try and navigate the minefield of making predictions two decades into the future, your best bet is the National Intelligence Council's Global Trends Report 2030. The document came out quite recently, and given the scale of the challenge and all the variables, they do a masterful job. I'd recommend you read it if it's a topic that interests you, and feel free to check out my short 'book report' giving my thoughts (a very China-heavy piece, if you'd like more of my perspective on that front). Africa's middle class has doubled in less than 20 years and is now the fastest-growing in theworld. #Davos— ian bremmer (@ianbremmer) January 25, 2013 The demise of the gender gap? A recent study here at Davos found that 17 percent of attendees are female -- and they are providing outsized influence with one-third of the Twitter presence we've seen. Umm... the more significant number here is the former, by a long shot. Seventeen percent is nowhere near where female participation needs to be. Coincidentally, just 17 percent of columnists at the New York Times are women, as Nicholas Kristof brought to light. These trends need to change; even from a purely business perspective, pulling more women into the workforce is a necessity. Muhtar Kent had another memorable line: "The truth is that women are already the most dynamic and fastest-growing economic force in the world today." If you're interested, here's a compelling article that sums up much of the argument. And this is one opportunity where there's really no downside. The biggest risk? That people don't act, and the gender gap doesn't disappear quickly enough. Here is the WEF's page pertaining to the issue, showing just how slow progress has been. And I've embedded their Global Gender Gap Index below: Late Night Snapshot No Davos roundup would be complete without a quick take on the nightcap yesterday. With Google's party out of the cards this year, McKinsey's became the must-attend event. It was a very good time. When I left at 1 a.m., McKinsey CEO Dominic Barton was still there, going strong. He was schmoozing and schvitzing, clearly enjoying himself -- and much abiding by the mantra, 'It's my party, I can abide if I want to.' The party was not quite up to the standards of Google's from last year... but perhaps that's because a little bit of world panic leads to a more energetic party crowd. After all, this year's Davos is decidedly more upbeat by day, and thus, more subdued by night. Tweet(er) of the day: Adrian Monck, a managing director for WEF communications/media, is a great aggregator of compelling Davos/WEF material. He is my #FF for sure. "the new worry at #Davos this week isthat people aren't worried enough" businessweek.com/articles/2013-...— Adrian Monck (@amonck) January 24, 2013 On top of that, he adds some snark of his own. @jonathanwald but @andrewrsorkin hasn't shaved for 3 weeks. — Adrian Monck (@amonck) January 25, 2013 Ian Bremmer is writing a Davos Diary exclusively for The Huffington Post, and will update it frequently throughout the summit.

24 января 2013, 16:36

Frontrunning: January 24

When the cash runs out dividends go away: Nokia to Omit Dividend for First Time in 143 Years (BBG) Passing Debt Bill, GOP Pledges End to Deficits (WSJ) Japan logs record trade gap in 2012 as exports struggle (Reuters) so naturally... Yen at 100 Per Dollar Endorsed by Japan Government’s Nishimura (BBG) Japan rejects currency war fears (FT) Investors grow cagey as Italy election nears (Reuters) In Amenas attack brings global jihad home to Algeria (Reuters) Mafia Victim’s Son Holds Key to Bersani Winning Key Region (BBG) Bernanke Seen Pressing On With Stimulus Amid Debate on QE (BBG) U.S. to lift ban on women in front-line combat jobs (Reuters) Red flags revealed in filings of firm linked to Caterpillar fraud (Reuters) Apple Sales Gain Slowest Since ’09 as Competition Climbs (BBG) Spanish Jobless Rate Hits Record After Rajoy’s First Year (BBG) North Korea Threatens Nuclear Test to Derail U.S. Policies (BBG)   Overnight Media Digest WSJ * Apple Inc recorded a flat profit despite selling 18 million more iPhones and iPads as it spent heavily to roll out new products to fend off intensifying competition. * The U.S. House of Representatives defused one potential debt crisis Wednesday, while a top Republican set the stage for a far broader debate over whether it is possible to actually balance the U.S. budget in coming years. * A government informant has implicated a prominent former trader at SAC Capital Advisors, telling federal investigators the two swapped confidential stock tips for years, according to people briefed on the matter. * NYSE Euronext has no intention of selling its European unit to a rival following a planned takeover by IntercontinentalExchange Inc, according to NYSE Euronext's chief executive. * The value of Goldman Sachs Group Inc's investment portfolio doubled last year. Bond underwriting hit a five-year high. The firm's workforce shrank and remaining employees were paid a smaller chunk of overall revenue. * General Dynamics Corp swung to a fourth-quarter loss, posting a $2 billion write-down in its information-technology business that Chief Executive Phebe Novakovic called a "reset". * McDonald's Corp's fourth-quarter earnings beat expectations, reversing two quarters of misses, but the world's largest restaurant chain said it expects tough times ahead. * Netflix Inc capped a turbulent year by posting a surprise fourth-quarter profit and adding more Internet subscribers than expected, news that sent its stock rocketing about 35 percent in after-hours trading. * As Novartis AG Chairman Daniel Vasella steps down from the company he helped build over 25 years, he leaves behind one of the health-care industry's most admired firms - but also some shareholder resentment and big questions about Novartis's future. * Loretta Fredy Bush, the high-profile founder of China's Xinhua Finance Ltd who was later indicted over an alleged $50 million fraud, has agreed to a plea deal and appears poised to plead guilty to a reduced charge.   FT FSA PROBES ICAP OVER LIBOR FIXING ICAP, the world's largest interdealer broker, has become a focus of the UK Libor rate-rigging investigation and is being investigated by the UK financial watchdog for possible breaches of market conduct rules. () CAMERON PUTS EU FUTURE ON THE LINE David Cameron put Britain's future in the EU on the line in an audacious gamble that united his Conservative party but could have profound implications for the country. UK LABOUR MARKET DEFIES GLOOM The puzzle of Britain's productivity performance grew on Wednesday, with an unexpectedly buoyant set of employment figures ahead of Friday's output data for last year's fourth quarter, which many economists think will show a dip. GMG ENDS TALKS TO SELL TRADER STAKE Guardian Media Group has called off talks with interested buyers over the sale of its half stake in the car classifieds company Trader Media Group following a failure to agree a price. Apax, its joint venture partner in Trader Media, had been interested in buying out the 50.1 per cent owned by GMG in a deal that would have netted the publisher of the Guardian and the Observer around 300 million pounds in cash. CHINESE FUND AND SCHMIDT-BACKED BANK UNITE A boutique merchant bank backed by Google executive chairman Eric Schmidt has struck a deal with a Chinese state-owned fund to work together on media, sport and entertainment acquisitions. Raine's partnership with China Media Capital, which manages a Rmb5bn ($805m) fund, is the latest sign that China's nascent but fast-growing media sector is keen to borrow expertise and contacts from established western operators.   NYT * Investors have come to expect nothing short of perfection from Apple Inc but with the company's stock sinking 11 percent, it is clear there are a range of challenges. * Avoiding an economic showdown with President Obama, the House on Wednesday passed legislation to eliminate the nation's statutory borrowing limit until May, without including the dollar-for-dollar spending cuts that Republicans once insisted would have to be part of any debt limit bill. * Prime Minister David Cameron of Britain has added to Europe's malaise, vowing to reduce British entanglement with the European Union - or allow his people to vote in a referendum to leave the bloc altogether. * Daniel Vasella, the longtime chairman and former chief executive of Novartis, the Swiss drug maker, plans to step down next month, the company said on Wednesday, when it also reported a jump in fourth-quarter profit. * The International Monetary Fund said on Wednesday that it continued to expect a modest upturn in global growth in 2013, with fewer risks of major policy mistakes and lower levels of financial stress. * Netflix Inc reported $8 million in net income, surprising analysts who had expected a slight loss. It increased the number of subscribers for its streaming service to 27 million. * The Boeing 787's difficulties have raised questions about how regulators certify new technology and how they balance advances in design and engineering with safety. * Japan on Thursday reported a record annual trade deficit in 2012, the second straight year in the red for an exporting nation that has long built its wealth on its vast trading surpluses. * A survey of manufacturing activity in China on Thursday provided more reassurance that the Chinese economy, buoyed by somewhat improved global trade and a string of government stimulus measures last year, has settled into a muted recovery. * US Airways Group Inc reported on Wednesday that its net income doubled in the fourth quarter from a year earlier, and its executives said strong passenger demand for the airline could lead to higher fares. * The long decline in the number of American workers belonging to labor unions accelerated sharply last year, according to data reported on Wednesday, sending the unionization rate to its lowest level in close to a century.   Canada THE GLOBE AND MAIL * Nigeria, the leading power in West Africa, wants Canada and other western nations to take on the conflict in Mali as an international problem and provide funding and heavy equipment like helicopters. * As Canadian finance minister Jim Flaherty prepares the Conservative government's 2013 budget, his main target will be to balance the books by 2015. With that horizon in mind, economists see several reasons for him to be optimistic, including positive signs from the United States and European economies, as well as the country's housing market. Reports in the business section: * The Bank of Canada is setting aside worries over a housing bust to double down on a broader concern, the country's sputtering economy. The central bank surprised Bay Street and Wall Street on Wednesday by dropping from its latest policy statement any hint that it would raise interest rates to deter Canadians from bidding up housing prices and adding to record levels of household debt. * RBC Dominion Securities raised its price target for Research In Motion Ltd to C$19 from C$11 ahead of the crucial launch of the smartphone maker's BlackBerry 10 devices, but warned that it is "far too early" to call the company's turnaround a success. NATIONAL POST * Canadian Prime Minister Stephen Harper said he was searching for a "consensus" within Canada and the Parliament on how to contribute to stopping the spread of terrorism in Mali, but he would not allow a direct Canadian military mission into the African country. * Manitoba chiefs are not poised to cede from the assembly of First Nations, but leaders gathered in Winnipeg on Wednesday raised questions about the national body's mandate to represent aboriginals on treaty issues. FINANCIAL POST * Bombardier Inc CEO and President Pierre Beaudoin said he hopes that its CSeries airliners will take its first flight in June, demonstrating that the Quebec transportation giant has learned the lessons from Boeing Co's difficulties with its 787 Dreamliner. * The Canadian and global economies will continue struggling to maintain momentum this year, but in a relatively hopeful new outlook, the International Monetary Fund (IMF) said it saw light at the end of the tunnel. The IMF now expects Canada's economy to expand by a modest 1.8 percent this year and by 2.3 percent in 2014.   China CHINA SECURITIES JOURNAL --The value-added growth of large industrial enterprises is expected to rise 10 percent, said Zhu Hongren, chief engineer at the Ministry of Industry. --The Industrial & Commercial Bank of China, the world's biggest bank by market value, said the volume of its renminbi cross-border business hit over 1.5 trillion yuan ($241.24 billion) in 2012, rising 70 percent from a year earlier. SHANGHAI SECURITIES NEWS - Hong Kong is working closely with Chinese authorities to promote the mutual recognition of investment funds, which would pave the way for these funds to be sold into both sides of the market, said the deputy chief executive of Securities & Futures Commission of Hong Kong. - Steam coal prices on the Bohai Bay Rim Index fell 2 yuan from week ago to 629 yuan ($100)a tonne this week, marking the sixth consecutive session of falls, which has brought prices down by a total of 11 yuan since mid-December. SHANGHAI DAILY --Chinese companies are becoming increasingly confident in venturing overseas to expand trade and cement their prescence on a global scale, a private survey showed. About four in every five international Chinese companies surveyed by HSBC plan to boost overseas expansion, according to the survey. --China will continue testing and expand the trial run of the new 4G network technology that allows 10-20 times faster internet access, the industry's top regulator said. CHINA DAILY (www.chinadaily.com.cn) --The yuan-denominated business of two major Chinese banks - Industrial and Commercial Bank of China Ltd and Bank of China Ltd - surged in 2012 as global demand for the currency increased. --China's first locally manufactured, battery-powered vehicle has been handed over to its buyer in Shanghai.   Fly On The Wall 7:00 Market Snapshot ANALYST RESEARCH Upgrades ASML (ASML) upgraded to Buy from Neutral at BofA/MerrillAutodesk (ADSK) upgraded to Outperform from Sector Perform at RBC CapitalBed Bath & Beyond (BBBY) upgraded to Outperform from Perform at OppenheimerCSX (CSX) upgraded to Outperform from Sector Perform at RBC CapitalCubist (CBST) upgraded to Hold from Sell at CantorDillard's (DDS) upgraded to Outperform from Neutral at Credit SuisseEmerson (EMR) upgraded to Buy from Hold at Deutsche BankGol Linhas (GOL) upgraded to Buy from Neutral at GoldmanNetflix (NFLX) upgraded to Buy from Neutral at Lazard CapitalNetflix (NFLX) upgraded to Market Perform from Underperform at Raymond JamesNetflix (NFLX) upgraded to Neutral from Underperform at MacquarieNetflix (NFLX) upgraded to Overweight from Neutral at JPMorganRoss Stores (ROST) upgraded to Outperform from Neutral at Credit SuisseTenet Healthcare (THC) upgraded to Outperform from Market Perform at Raymond JamesTorchmark (TMK) upgraded to Buy from Neutral at SunTrust Downgrades Albermarle (ALB) downgraded to Hold from Buy at Deutsche BankAlbermarle (ALB) downgraded to Neutral from Buy at CitigroupAllegheny Technologies (ATI) downgraded to Neutral from Buy at GoldmanAltera (ALTR) downgraded to Market Perform from Outperform at William BlairApple (AAPL) downgraded to Hold from Buy at JefferiesApple (AAPL) downgraded to Sector Perform from Outperform at Scotia CapitalCoach (COH) downgraded to Neutral from Buy at ISI GroupCopa Holdings (CPA) downgraded to Neutral from Buy at GoldmanDouglas Dynamics (PLOW) downgraded to Neutral from Outperform at Credit SuisseEnergizer (ENR) downgraded to Market Perform from Outperform at BMO CapitalMagnum Hunter (MHR) downgraded to Hold from Buy at JefferiesNetflix (NFLX) downgraded to Neutral from Outperform at Credit SuisseParkway Properties (PKY) downgraded to Sell from Hold at CantorPrimerica (PRI) downgraded to Reduce from Neutral at SunTrustRedwood Trust (RWT) downgraded to Market Perform from Outperform at JMP SecuritiesReinsurance Group (RGA) downgraded to Equal Weight from Overweight at Morgan StanleySafeway (SWY) downgraded to Underweight from Equal Weight at BarclaysStillwater Mining (SWC) downgraded to Neutral from Outperform at Credit SuisseTiffany (TIF) downgraded to Hold from Buy at CanaccordVeeco (VECO) downgraded to Neutral from Buy at UBS Initiations Atwood Oceanics (ATW) initiated with an Overweight at BarclaysChurch & Dwight (CHD) initiated with an Outperform at Credit SuisseClorox (CLX) initiated with an Outperform at Credit SuisseColgate-Palmolive (CL) initiated with an Outperform at Credit SuisseExpedia (EXPE) initiated with a Buy at Ascendiant CapitalKimberly Clark (KMB) initiated with an Underperform at Credit SuisseOcean Rig UDW (ORIG) initiated with an Overweight at BarclaysPBF Energy (PBF) initiated with an Overweight at Morgan StanleyPacific Drilling (PACD) initiated with an Overweight at BarclaysProcter & Gamble (PG) initiated with a Neutral at Credit SuisseSplunk (SPLK) initiated with an Outperform at BMO Capital HOT STOCKS Apple (AAPL) CEO Cook: Very confident in our product pipeline Apple said changing approach to guidanceNokia (NOK) to propose no dividend be paid for 2012Starwood Property (STWD), Starwood Capital to acquire LNR Property LLC for $1.05BAmerican Airlines (AAMRQ) signed 12-year capacity purchase agreement with Republic (RJET). Republic signed an agreement with Embraer (ERJ) to purchase 47 new aircraft Amgen (AMGN) said on track to hit upper end of 2015 revenue guidanceSaid no plans to raise additional debt in 2013SanDisk (SNDK) said positioned for strong profitability in 2013Netflix (NFLX) said no plans to launch additional international markets in 1H13Said more and more interested in exclusive contentSymantec (SYMC) reorganized management, will reduce middle-management workforceUnited Rentals (URI) sees FY13 increase in rental rates of approximately 4.5% EARNINGS Companies that beat consensus earnings expectations last night and today include:Stanley Black & Decker (SWK), Cash America (CSH), Knight Capital (KCG), Jacobs Engineering (JEC), Teradyne (TER), Hill-Rom (HRC), Apple (AAPL), United Rentals (URI), Western Digital (WDC), Sealy (ZZ), SanDisk (SNDK), Netflix (NFLX), Stryker (SYK) Companies that missed consensus earnings expectations include:Cabot Microelectronics (CCMP), Logitech (LOGI), Noble Corp. (NE), F.N.B. Corp. (FNB), Energen (EGN), Hexcel (HXL), Greenhill & Co. (GHL) Companies that matched consensus earnings expectations include:KeyCorp (KEY), Susquehanna (SUSQ), Celadon Group (CGI), Cubist (CBST) NEWSPAPERS/WEBSITES Last year Japan's trade deficit nearly tripled to a record $78.3B and few expect a drastic improvement anytime soon, leaving Tokyo no choice but to continue with efforts to boost the economy, the Wall Street Journal reportsCitigroup’s (C) U.S. retail and commercial banking has the highest average deposits per branch among top lenders but generates lower profits than the others. The bank is attempting to turn that around, including an upgrade of computer systems, remodel branches and make employees more accountable in what is arguably the biggest internal overhaul at Citibank in decades, the Wall Street Journal reportsGrowth in China's factory sector surged to a two-year high in January as manufacturers received more local and foreign orders in an encouraging sign for the country's economic rebound. The HSBC flash purchasing managers' index (PMI) increased to 51.9 in January, the highest since January 2011 and above the 50-point level that shows accelerating growth in the sector from the previous month, Reuters reportsJapanese regulators joined the U.S. in all but ruling out overcharged batteries as the cause of recent fires on the Boeing (BA) 787 Dreamliner, which has been grounded for a week. The FAA said there are still no firm answers as to the cause and no clear timetable yet for returning the plane to flight, Reuters reportsWith toxic smog engulfing Beijing and much of the rest of the country for weeks, China is considering tighter vehicle curbs and emissions standards like Europe’s. That could benefit GM (GM), Volkswagen (VLKAY) and Hyundai Motor  in a market where sales are forecast to pass 20M units this year, Bloomberg reportsBuilding supply stocks such as USG (USG) in which Warren Buffett (BRK.A) holds a 16% stake, and Eagle Materials (EXP) that more than doubled last year look to rise further as the U.S. housing market extends its recovery, Bloomberg reports SYNDICATE ARIAD (ARIA) files to sell common stockAmerican Realty (ARCP) announces public offering of 1.5M shares of common stockBuckeye Partners (BPL) files to sell 6M common unitsKB Home (KBH) 5.5M share Secondary priced at $18.25

23 января 2013, 17:57

Does China Plan To Establish 'China Cities' And 'Special Economic Zones' All Over America?

Michael Snyder, ContributorActivist Post What in the world is China up to? Over the past several years, the Chinese government and large Chinese corporations (which are often at least partially owned by the government) have been systematically buying up businesses, homes, farmland, real estate, infrastructure and natural resources all over America. In some cases, China appears to be attempting to purchase entire communities in one fell swoop. So why is this happening?  Is this some form of "economic colonization" that is taking place? Some have speculated that China may be intending to establish "special economic zones" inside the United States modeled after the very successful Chinese city of Shenzhen.  Back in the 1970s, Shenzhen was just a very small fishing village, but now it is a sprawling metropolis of over 14 million people.  Initially, these "special economic zones" were only established within China, but now the Chinese government has been buying huge tracts of land in foreign countries such as Nigeria and establishing special economic zones in those nations.  So could such a thing actually happen in America? Well, according to Dr. Jerome Corsi, a plan being pushed by the Chinese Central Bank would set up "development zones" in the United States that would allow China to "establish Chinese-owned businesses and bring in its citizens to the U.S. to work."  Under the plan, some of the $1.17 trillion that the U.S. owes China would be converted from debt to "equity".  As a result, "China would own U.S. businesses, U.S. infrastructure and U.S. high-value land, all with a U.S. government guarantee against loss."  Does all of this sound far-fetched?  Well, it isn't.  In fact, the economic colonization of America is already far more advanced than most Americans would dare to imagine. So how in the world did we get to this point?  A few decades ago, the United States was the unchallenged economic powerhouse of the world and China was essentially a third world country. So what happened?Well, we entered into a whole bunch of extremely unfavorable "free trade" agreements, and countries such as China began to aggressively use "free trade" as an economic weapon against us. google_ad_client = "pub-1897954795849722"; /* 468x60, created 6/30/10 */ google_ad_slot = "8230781418"; google_ad_width = 468; google_ad_height = 60; Over the past decade, we have lost tens of thousands of businesses and millions of jobs to China. When the final numbers for 2012 come out, our trade deficit with China for the year will be well over 300 billion dollars, and that will be the largest trade deficit that one country has had with another country in the history of the world. Overall, the U.S. has run a trade deficit with China over the past decade that comes to more than 2.3 trillion dollars.  That 2.3 trillion dollars could have gone to U.S. businesses and U.S. workers, and in turn taxes would have been paid on all of that money.  But instead, all of that money went to China. Rather than just sitting on all of that money, China has been lending much of it back to us - at interest.  We now owe China more than a trillion dollars, and our politicians are constantly pleading with China to lend more money to us so that we can finance our exploding debt. Today, the U.S. government pays China approximately 100 million dollars a day in interest on the debt that we owe them.  Those that say that the U.S. debt "does not matter" are being incredibly foolish.So thanks to our massive trade deficit and our exploding national debt, China is systematically getting wealthier and the United States is systematically getting poorer. And now China is starting to use a lot of that wealth to aggressively expand their power and influence around the globe. But isn't it more than a bit far-fetched to suggest that China may be planning to establish Chinese cities and special economic zones in America? Not really. Just look at what has already happened up in Canada.  It is well-known that the Chinese population of Vancouver, Canada has absolutely exploded in recent years.  In fact, the Vancouver suburb of Richmond is now approximately half Chinese.  The following is an excerpt from a BBC article...Richmond is North America's most Asian city - 50% of residents here identify themselves as Chinese. But it's not just here that the Chinese community in British Columbia (BC) - some 407,000 strong - has left its mark. All across Vancouver, Chinese-Canadians have helped shape the local landscape.A similar thing is happening in many communities along the west coast of the United States.  In fact, Chinese citizens purchased one out of every ten homes that were sold in the state of California in 2011. But in other areas of the United States, the Chinese are approaching things much more systematically. For example, as I have written about previously, a Chinese group identified as "Sino-Michigan Properties LLC" has purchased 200 acres of land near the town of Milan, Michigan.  Their stated goal is to build a "China City" that has artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens. In other instances, large chunks of real estate in major U.S. cities that are down on their luck are being snapped up by Chinese investors.  Just check out what a Fortune article from a while back says has been happening over in Toledo, Ohio...In March 2011, Chinese investors paid $2.15 million cash for a restaurant complex on the Maumee River in Toledo, Ohio. Soon they put down another $3.8 million on 69 acres of newly decontaminated land in the city's Marina District, promising to invest $200 million in a new residential-commercial development. That September, another Chinese firm spent $3 million for an aging hotel across a nearby bridge with a view of the minor league ballpark.Toledo is being promoted to Chinese investors as a "5-star logistics region".  From Toledo it is very easy to get to Chicago, Detroit, Cleveland, Pittsburgh, Columbus and Indianapolis...With a population of 287,000, Toledo is only the fourth largest city in Ohio, but it lies at the junction of two important highways -- I-75 and I-80/90. My vision is to make Toledo a true international city, Toledo's Mayor Mike Bell told the Toledo Blade.But some of these deals appear to be about far more than just making "investments".  According to the Idaho Statesman, a Chinese company known as Sinomach (which is actually controlled by the Chinese government) was actually interested in developing a 50 square mile self-sustaining "technology zone" south of the Boise airport...A Chinese national company is interested in developing a 10,000- to 30,000-acre technology zone for industry, retail centers and homes south of the Boise Airport.Officials of the China National Machinery Industry Corp. have broached the idea — based on a concept popular in China today — to city and state leaders.The article suggested that this "technology zone" would be modeled after similar projects that already exist in China, and that Chinese officials were conducting similar negotiations with other U.S. states as well...Sinomach is not looking only at Idaho. The company sent delegations to Ohio, Michigan and Pennsylvania this year to talk about setting up research and development bases and industrial parks. It has an interest in electric transmission projects and alternative energy as well. The technology zone proposal follows a model of science, technology and industrial parks in China — often fully contained cities with all services included.Thankfully the deal in Idaho appears to be stalled for now, but could we soon see China establish special economic zones in other communities all around America? The Chinese certainly do seem to be laying the groundwork for something.  They have been voraciously gobbling up important infrastructure all over the country.  The following comes from a recent American Free Press article...In addition to already owning vital ports in Long Beach, Calif. and Boston, Mass., the China Ocean Shipping Company is eyeing major ports on the East Coast and Gulf of Mexico. China also owns access to ports at the entry and exit points of the Panama Canal. And due to fiscal woes plaguing many American cities and states, U.S. legislators have been actively seeking out Chinese investors. In one of the worst cases, Baton Rouge, La., Mayor Kip Holden offered the Chinese government ownership and operating rights to a new toll way system if the Chinese would provide the funding to build it.Does it make sense for the Chinese to own some of our most important ports? Isn't there a national security risk? Sadly, there isn't much of anything that our politicians won't sell these days as long as someone is willing to flash a lot of cash. The Chinese have also been busy buying up important real estate on the east coast as a recent Forbes article explained….According to a recent report in the New York Times, investors from China are 'snapping up luxury apartments' and are planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies also have signed major leases at the Empire State Building and at 1 World Trade Center, the report said.But it is not only just land and infrastructure that the Chinese have been buying up. They have also been purchasing rights to vital oil and natural gas deposits all over the United States. There have been two Chinese companies that have been primarily involved in this effort. The first is the China National Offshore Oil Corporation (CNOOC).  According to Wikipedia, CNOOC is 100 percent owned by the Chinese government…CNOOC Group is a state-owned oil company, fully owned by the Government of the People’s Republic of China, and the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) performs the rights and obligations of shareholder on behalf of the government.The second is Sinopec Corporation.  Sinopec Group is the largest shareholder (approx. 75% ownership) in Sinopec Corporation.  And as the Sinopec website tells us, Sinopec Group is fully owned by the Chinese government…Sinopec Group, the largest shareholder of Sinopec Corp., is a super-large petroleum and petrochemical group incorporated by the State in 1998 based on the former China Petrochemical Corporation. Funded by the State, it is a State authorized investment arm and State-owned controlling company.So whenever you see CNOOC or Sinopec, you can replace those names with the Chinese government.  The Chinese government essentially runs both of those companies. And as you can see from the following list compiled by the Wall Street Journal, those two companies have been extremely aggressive in buying up rights to oil and natural gas all over the nation...Colorado: Cnooc gained a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming in a $1.27 billion pact with Chesapeake Energy Corp. Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy. Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy. Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal. Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy. Texas: Cnooc acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal. Wyoming: Cnooc has a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming after a $1.27 billion pact with Chesapeake Energy. Sinopec gained a one-third interest in Devon Energy’s 320,000 acres as part of a larger $2.5 billion deal. Gulf of Mexico: Cnooc Ltd. separately acquired minority stakes in some of Statoil ASA’s leases as well as six of Nexen Inc.’s deep-water wells.So why is the U.S. government allowing this? That is a very good question. For a nation that purports to be pursuing "energy independence", we sure do have a funny way of going about things. Unfortunately, the sad truth is that China is absolutely mopping the floor with the United States on the global economic stage.  China is rising and America is in an advanced state of decline.  Global economic power has shifted dramatically and most Americans still don't understand what has happened. The following are 44 more signs of how dominant the economy of China has become...1. A Chinese firm recently made a $2.6 billion offer to buy movie theater chain AMC.2. A different Chinese firm made a $1.8 billion offer to buy aircraft maker Hawker Beechcraft.3. In December it was announced that a Chinese group would be purchasing AIG's plane leasing unit for $4.23 billion.4. It was recently announced that the Federal Reserve will now allow Chinese banks to buy up American banks.5. A $190 million bridge project up in Alaska was awarded to a Chinese firm.6. A $400 million contract to renovate the Alexander Hamilton bridge in New York was awarded to a Chinese firm.7. A $7.2 billion contract to construct a new bridge between San Francisco and Oakland was awarded to a Chinese firm.8. The uniforms for the U.S. Olympic team were made in China.9. 85 percent of all artificial Christmas trees are made in China.10. The new World Trade Center tower is going to include glass that has been imported from China.11. The new Martin Luther King memorial on the National Mall was made in China.12. In 2001, American consumers spent 102 billion dollars on products made in China.  In 2011, American consumers spent 399 billion dollars on products made in China.13. The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.14. According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.15. The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.16. The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.17. The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.18. Overall, the United States has lost a total of more than 56,000 manufacturing facilities since 2001.19. According to the Economic Policy Institute, America is losing half a million jobs to China every single year.20. Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.21. In 2010, China produced more than twice as many automobiles as the United States did.22. Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.23. After being bailed out by U.S. taxpayers, General Motors is currently involved in 11 joint ventures with companies owned by the Chinese government.  The price for entering into many of these “joint ventures” was a transfer of “state of the art technology” from General Motors to the communist Chinese.24. Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.25. The United States has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.26. China’s number one export to the U.S. is computer equipment.27. The number one U.S. export to China is "scrap and trash".28. The U.S. trade deficit with China is now more than 28 times larger than it was back in 1990.29. Back in 1985, the U.S. trade deficit with China was just 6 million dollars for the entire year.  For the month of November 2012 alone, the U.S. trade deficit with China was 28.9 billion dollars.30. China now consumes more energy than the United States does.31. China is now the leading manufacturer of goods in the entire world.32. China uses more cement than the rest of the world combined.33. China is now the number one producer of wind and solar power on the entire globe.34. Today, China produces nearly twice as much beer as the United States does.35. Right now, China is producing more than three times as much coal as the United States does.36. China now produces 11 times as much steel as the United States does.37. China produces more than 90 percent of the global supply of rare earth elements.38. China is now the number one supplier of components that are critical to the operation of U.S. defense systems.39. A recent investigation by the U.S. Senate Committee on Armed Services found more than one million counterfeit Chinese parts in the Department of Defense supply chain.40. 15 years ago, China was 14th in the world in published scientific research articles.  But now, China is expected to pass the United States and become number one very shortly.41. China now awards more doctoral degrees in engineering each year than the United States does .42. According to one study, the Chinese economy already has roughly the same amount of purchasing power as the U.S. economy does.43. According to the IMF, China will pass the United States and will become the largest economy in the world in 2016.44. Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue. Without the "globalization" of the world economy, none of this would have ever happened.  But instead of admitting our mistakes and fixing them, our politicians continue to press for even more "free trade" and even more integration with communist nations such as China. In fact, according to Dr. Jerome Corsi, the U.S. government has already set up 257 "foreign trade zones" all over America.  These "foreign trade zones" are apparently given "special U.S. customs treatment" and are used to promote "free trade"…Corsi noted that the U.S. government has created 257 foreign trade zones, or FTZs, throughout the United States, designed to extend special U.S. customs treatment to U.S. plants engaged in international-trade-related activities. The FTZs tend to be located near airports, with easy access into the continental NAFTA and WTO multi-modal transportation systems being created to move free-trade goods cheaply, quickly and efficiently throughout the continent of North America. There is nothing in the U.S. government’s description of FTZs that would prevent a foreign government, like China, from operating a shell U.S. company that is in reality owned and financed by the Chinese government and operated through a Chinese government-owned corporation, Corsi wrote.Sadly, we are probably going to see a whole lot more of this in the years ahead. According to Corsi, a professor of economics at Tsighua University in Beijing named Yu Qiao has suggested the following plan as a way to transform the debt that the United States owes China into something more "tangible"...China would negotiate with the U.S. government to create a “crisis relief facility,” or CRF. The CRF “would be used alongside U.S. federal efforts to stabilize the banking system and to invest in capital-intensive infrastructure projects such as high-speed railroad from Boston to Washington, D.C. China would pool a portion of its holdings of Treasury bonds under the CRF umbrella to convert sovereign debt into equity. Any CRF funds that were designated for investment in U.S. corporations would still be owned and managed by U.S. equity holders, with the Asians holding minority equity shares “that would, like preferred stock, be convertible.” The U.S. government would act as a guarantor, “providing a sovereign guarantee scheme to assure the investment principal of the CRF against possible default of targeted companies or projects”. The Federal Reserve would set up a special account to supply the liquidity the CRF would require to swap sovereign debt into industrial investment in the United States. Apparently the Bank of China really likes this plan and would like to see something like this implemented.In the years ahead, perhaps many of you will end up working in a "special economic zone" for a Chinese company on a project that is being financially guaranteed by the U.S. government. If that sounds like a form of slavery to you, the truth is that you are probably not too far off the mark. The borrower is the servant of the lender, and we should have never allowed ourselves to get into so much debt. Now we will pay the price. To get an idea of how much the world has changed in recent years, just check out this incredible photo which contrasts the decline of Detroit over the years with the amazing rise of Shanghai, China. Things did not have to turn out this way.  Unfortunately, we made decades of incredibly foolish decisions and we wrecked the greatest economic machine that the world has ever seen. Now the future for America looks really bleak. Or could it be that I am being too pessimistic?  Please feel free to post a comment with your thoughts below...This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. var linkwithin_site_id = 557381; linkwithin_text='Related Articles:' Enter Your Email To Receive Our Daily Newsletter Close var fnames = new Array();var ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';fnames[1]='FNAME';ftypes[1]='text';fnames[2]='LNAME';ftypes[2]='text';var err_style = ''; try{ err_style = mc_custom_error_style; } catch(e){ err_style = 'margin: 1em 0 0 0; padding: 1em 0.5em 0.5em 0.5em; background: FFEEEE none repeat scroll 0% 0%; font- weight: bold; float: left; z-index: 1; width: 80%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz- initial; -moz-background-inline-policy: -moz-initial; color: FF0000;'; } var mce_jQuery = jQuery.noConflict(); mce_jQuery(document).ready( function($) { var options = { errorClass: 'mce_inline_error', errorElement: 'div', errorStyle: err_style, onkeyup: function(){}, onfocusout:function(){}, onblur:function(){} }; var mce_validator = mce_jQuery("#mc-embedded-subscribe-form").validate(options); options = { url: 'http://activistpost.us1.list-manage.com/subscribe/post-json? u=3ac8bebe085f73ea3503bbda3&id=b0c7fb76bd&c=?', type: 'GET', dataType: 'json', contentType: "application/json; charset=utf-8", beforeSubmit: function(){ mce_jQuery('#mce_tmp_error_msg').remove(); mce_jQuery('.datefield','#mc_embed_signup').each( function(){ var txt = 'filled'; var fields = new Array(); var i = 0; mce_jQuery(':text', this).each( function(){ fields[i] = this; i++; }); mce_jQuery(':hidden', this).each( function(){ if ( fields[0].value=='MM' && fields[1].value=='DD' && fields[2].value=='YYYY' ){ this.value = ''; } else if ( fields[0].value=='' && fields [1].value=='' && fields[2].value=='' ){ this.value = ''; } else { this.value = fields[0].value+'/'+fields[1].value+'/'+fields[2].value; } }); }); return mce_validator.form(); }, success: mce_success_cb }; mce_jQuery('#mc-embedded-subscribe-form').ajaxForm(options); }); function mce_success_cb(resp){ mce_jQuery('#mce-success-response').hide(); mce_jQuery('#mce-error-response').hide(); if (resp.result=="success"){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(resp.msg); mce_jQuery('#mc-embedded-subscribe-form').each(function(){ this.reset(); }); } else { var index = -1; var msg; try { var parts = resp.msg.split(' - ',2); if (parts[1]==undefined){ msg = resp.msg; } else { i = parseInt(parts[0]); if (i.toString() == parts[0]){ index = parts[0]; msg = parts[1]; } else { index = -1; msg = resp.msg; } } } catch(e){ index = -1; msg = resp.msg; } try{ if (index== -1){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } else { err_id = 'mce_tmp_error_msg'; html = ' '+msg+''; var input_id = '#mc_embed_signup'; var f = mce_jQuery(input_id); if (ftypes[index]=='address'){ input_id = '#mce-'+fnames[index]+'-addr1'; f = mce_jQuery(input_id).parent().parent().get(0); } else if (ftypes[index]=='date'){ input_id = '#mce-'+fnames[index]+'-month'; f = mce_jQuery(input_id).parent().parent().get(0); } else { input_id = '#mce-'+fnames[index]; f = mce_jQuery().parent(input_id).get(0); } if (f){ mce_jQuery(f).append(html); mce_jQuery(input_id).focus(); } else { mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } } } catch(e){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } } } BE THE CHANGE! 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20 декабря 2012, 09:00

Nigeria - Additional Financing for the Second Health Systems Development Project

Ratings for the Additional Financing for the Second Health Systems Development Project for Nigeria were as follows: outcomes were moderately unsatisfactory; risk to development outcome was high; Bank performance was moderately unsatisfactory and borrower performance was also moderately unsatisfactory. Some lessons learned includes: first, to adequately address the potential trade-off between a project's technical scope and its geographical reach, project design must be both simple and adaptable to changes in both the policy and political environments. Second, while a previous health Implementation Completion Report (ICR) concluded that it was essential to focus on results, another was somewhat more nuanced arguing that a supply approach needs strong capacity to strategically administer, combine and utilize inputs to achieve results. Third, rigorous national-level monitoring and evaluation measures with accountability at state and local levels are crucial for project success. Finally, technical staff of the state ministry of health and the state ministry of local government should participate in project preparation to engage and sustain commitment for project ownership and coordination.

19 декабря 2012, 21:45

Africa Surges Forward

One of the most remarkable features of the global economy over the past fifteen years has been the striking surge of economic growth over much of sub-Saharan Africa.  Since 2000, the region has grown by close to six percent a year, up sharply from roughly two percent over the previous decade, making it one of the fastest growing regions in the world. A number of commodities exporters have achieved particularly rapid economic growth, especially metals and oil exporters, including Angola, Ghana, and Nigeria, which have benefitted from sustained improvements in terms of trade.  Others like Kenya, Rwanda, and Tanzania have relied on sound economic management and reforms to help drive growth. The surge has truly been widespread, affecting virtually all except a few countries on the continent where endemic violence and political turmoil have stifled economic development.  And growth in numerous countries has yielded important dividends in terms of poverty reduction, although much remains to be achieved. Last week, I visited two key centers of the new African dynamism, Kenya and Nigeria, to learn more about the underpinnings of recent economic success and the challenges to sustained growth and poverty reduction going ahead.  These two countries have particular significance as the largest economies in East and West Africa, respectively, and are natural hubs for trade and investment within their regions.  Of course there are important differences in the structure and recent history of those countries, but it is striking that both contain key ingredients for success.  First of all, both have made real progress in recent years towards establishing genuine democracies and open societies.  Politics may be noisy and not always pretty, but the people's voice can be heard and deep injustice largely avoided because of popular pressure. Second, economic policymakers have been notably successful in putting in place solid macroeconomic frameworks capable of delivering sustained fiscal performance, low and declining inflation, and stable external positions, all essential ingredients for confidence and investment. My trip to Nigeria had particular personal meaning because I lived there as a child, before being evacuated during the Biafran war in the 1960s.  The country had since gone through many rough decades of military dictatorship in which oil wealth was misappropriated and squandered and a once-thriving agricultural sector was virtually wiped out.  The country became a prime example of missed opportunities from economic mismanagement of resource abundance. And yet on my own visit, I was struck by the energy, warmth, and optimism I remembered from my childhood.  I met a broad range of senior officials but also bankers and business leaders, all with impressive ambition and drive, ready to take advantage of new opportunities as the government opens up sectors for private investment like telecom and power. To be sure, the challenges ahead are immense.  A viable framework for hydrocarbons development is desperately needed as Nigerian oil exploration has dwindled.  Governance and legal frameworks need to be overhauled to improve the business environment and support access to credit.  While progress has been made to reduce petroleum subsidies, further steps are needed and the savings should be directed to support infrastructure and to strengthen education, healthcare, and social safety nets.  A new agricultural strategy aimed at addressing supply bottlenecks would pave the way for reviving exports of lucrative cash crops, as well as supplying staples to home markets. ​Nigeria has a bold and ambitious national transformation strategy aimed at the inclusive growth so desperately needed.  It is too much to expect that this can all be delivered neatly to order, and no doubt there will be setbacks.  Yet there is a real chance of success that could, as the Nigerian government targets, launch Nigeria in the years ahead into the ranks of the world's twenty largest economies, as entrepreneurial spirit is released, and hydrocarbons wealth is applied more effectively. Kenya also is moving forward impressively.  Although it lacks Nigeria's vast hydrocarbons potential it does have natural resource wealth, including some newly discovered oil and gas fields.  It also has a strong agricultural sector that has successfully moved up the value chain.  The flight I took in to Nairobi returns to Amsterdam each day full of cut-flowers for the European market.  And of course, Kenya is a major tourist destination. In Nairobi, I again met with a broad range of official and business leaders to learn about plans to tackle the tough policy challenges to sustain and deepen success.  One area in which Kenya is leading the world is in developing mobile banking.  Widespread access to mobile phones has allowed close to 75 percent of the population, including in remote rural areas far from the nearest bank branch, to gain access to payment services, and this is already contributing to the development of small farms and businesses.  I heard about emerging plans to extend mobile banking to offer savings accounts and even short-term loans. Another area where Kenya is playing a key role is that of logistics hub for the growing East African Community (EAC), which already includes Burundi, Rwanda, Tanzania, and Uganda; other neighbors are showing interest in joining.  All these countries are growing impressively, and close economic cooperation has helped strengthen financial and trade integration.  Intra-EAC trade has increased by about 25 percent over five years. Improved transportation infrastructure, including upgrading the key port in Mombasa and rail links inland, will pay important dividends by allowing greater integration of supply chains across countries and potentially establishing East Africa as a globally attractive manufacturing location. Sustained success by Kenya and Nigeria, and more broadly across the sub-Saharan region, will create important opportunities for U.S. companies to invest and export, creating jobs at home.  Already we export close to $20 billion of products to the region each year, and U.S. direct investments are growing quickly.  The U.S. government is putting major emphasis on promoting closer and stronger economic and business ties with this dynamic region, and has been working hard to put in place trade and investment framework agreements.    A particular priority has been to help these countries to trade more intensively with each other and with the U.S., including through trade facilitation and trade capacity building projects.  And the Treasury Department has been playing a part through its technical assistance program, which has been active in both Nigeria and Kenya to build capacity in areas such as deposit insurance, payments systems, government securities markets, revenue administration, and infrastructure finance. Clearly, the emerging successes in Nigeria and Kenya are not just the artifacts of favorable commodity price developments, but also the reward for commitment to democratic governments, responsible macroeconomic policies, and steps to improve the business environment.  Now the challenges are to sustain this progress and to continue to push ahead difficult reforms to establish the basis for sustained strong and inclusive growth.  The U.S. Treasury will continue to play its role as a committed partner to countries across sub-Saharan Africa as they tackle these challenges. Charles Collyns is the Assistant Secretary for International Finance at the U.S. Department of the Treasury.​

28 ноября 2012, 18:12

Nigeria Industrial Production

Industrial Production in Nigeria increased 0.10 percent in the second quarter of 2016 over the same quarter in the previous year. Industrial Production in Nigeria averaged 1.75 percent from 2007 until 2016, reaching an all time high of 20.10 percent in the first quarter of 2011 and a record low of -10.10 percent in the first quarter of 2016. Industrial Production in Nigeria is reported by the Central Bank of Nigeria. In Nigeria, industrial production measures the output of businesses integrated in industrial sector of the economy such as manufacturing, mining, and utilities. This page provides - Nigeria Industrial Production - actual values, historical data, forecast, chart, statistics, economic calendar and news.

02 октября 2012, 18:52

The urbanisation trap

Moving from farms to cities does not always translate to gains in incomeAS A general rule, moving to work in cities is synonymous with economic growth, and the more people do the first, the more countries get of the second. The left-hand chart, drawn from the World Bank's latest World Development Report, shows the processes at work in Asian countries in 1985 to 2010. But general rules are made to be broken. As the right-hand chart shows, in many African countries an increase in the size of the urban population has not necessarily been associated with growth. Excluding the extreme case of Liberia (which had a civil war during the period in question), several of Africa’s largest countries, notably Nigeria, saw a big increase in what seem like relatively unproductive slums, and those countries that are following the Asian example (Kenya, Ghana and Ethiopia) are doing so modestly and tentatively. The report examines the role of job creation in development, and suggests that while policies to encourage jobs and to encourage growth are similar, they are not identical. Growth policies do not always pay enough attention to female or youth employment, or to the multiple problems that self-employed people have in increasing skills or improving their businesses.  

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10 сентября 2012, 23:15


Contacts: In Abuja: Obadiah Tohomdet: (234) 703-583-0644, [email protected] Bamidele Oladokun:  (234) 703-583-0641, [email protected] ABUJA, September 10, 2012 - ACCESS Nigeria in collaboration with the World Bank have concluded arrangement for a 2-day National Jobs Fair. The fair commences on Thursday, September 13, 2012 at the National Theatre, Iganmu Lagos. The event will serve as platform for organizations and potential employers to recruit young, skilled and competent employees into their workforce. A broad range of employers from various sectors of the economy such as Information & Communication Technology (ICT), Telecommunications, Banking, Insurance, Private sector, Media, etc. are expected to participate at the event. It could be recalled that in 2010, the World Bank-supported ACCESS Nigeria program conducted a Skills Gap Analysis, which showed a distinct gap between what employers need and what they end up getting. It was discovered that most youth lack the fundamental skills required to succeed in the labour market, such as communication skills, cognitive skills and computer skills. This insight led to the formation of the ACCESS Nigeria skills program. The program has in the last 2 years assessed more than 3000 youth on globally-benchmarked fundamental skills for IT-enabled services economy. 1007 candidates completed 10 week-training across five cities: Abuja, Enugu, Kaduna, Kano and Lagos. The Fair is open to both ACCESS and non-ACCESS trained candidates. To ensure that this is a continuous and sustainable process, an electronic job information management portal called ACCESS Nigeria Job Information Management System (ANJIMS) has been launched.  The portal, first of its kind in Nigeria, will allow for periodic data-analysis on labor market’s current status and future projections, thereby filling a gap that is widely felt due to absence of reliable data and information on Nigeria’s job market.   The program is supported under the World Bank-supported Science and Technology Post Basic Project (STEPB). Organizations and potential employees are encouraged to register for the job fair at www.anjims.org   Interested applicants are expected to register and attend the Fair with their curriculum vitae. Registration and attendance is FREE for interested employers and candidates. ### Visit us on Facebook: http://www.facebook.com/WorldBankNigeria Be updated via Twitter: http://www.twitter.com/WBNigeria  For our YouTube channel: http://www.youtube.com/worldbanknigeria

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06 сентября 2012, 18:55

The Truth About Oil Pricing? Let's Discuss This

  Below is the Oilprice.com interview of Professor James Hamilton. James is a professor in the Economics Department at the University of California, San Diego. He has been a visiting scholar at the Federal Reserve Board in Washington, DC as well as many of the Federal Reserve Banks; and has also been a consultant for the National Academy of Sciences, Commodity Futures Trading Commission and the European Central Bank and has testified before the United States Congress. You can find more of his work on his website Econbrowser. This discussion is continued on BoomBustBlog in the Financialization of Physical Energy: Does Paper Oil Distort Physical Pricing post. Topics include:•    Why we shouldn’t get too excited with the shale revolution•    The “Real” cause of high oil prices•    The incredible opportunity presented by natural gas•    Why long term oil prices will creep upwards•    The geopolitical hotspots that could cause an oil price spike•    Why sanctions could cause Iran to lash out•    Why speculators and oil companies are not to blame for high oil prices.•    Changes we can expect to see under a Romney Administration•    Why Short term oil price forecasts are worthless•    Peak oil & Daniel Yergin Direct link can be found here. James Stafford: Oil prices have shot up in the last month. What range do you see oil prices trading in over the next 12 months? James Hamilton: Oil prices have always been very volatile.  If you look at 12-month logarithmic changes in WTI going back to 1947, you come up with a standard deviation of 0.27.  In other words, 25% moves up or down within a year are fairly common, and 50% moves or greater have also been seen on a number of occasions. If you look at options prices at the moment, they imply the same level of uncertainty looking forward.  For example, somebody today is willing to pay $2.90/barrel for a NYMEX option to buy oil in September 2013 at $120/barrel, consistent with a standard deviation of annual log changes of 0.26.  The market is saying that prices that high or higher are not that remote a possibility. And if you look at current fundamentals, it’s not hard to imagine big moves in either direction coming fairly quickly.  The price of oil would surely collapse if we saw a significant economic downturn in China (something nobody can rule out) or if Iraq succeeds in producing even half of its ambitious production targets (though I personally consider the latter unlikely). On the other hand, a military confrontation with Iran could produce a pretty spectacular price spike.  If the Strait of Hormuz were to close, for example, it would represent a shock to world production that in percentage terms would be 3 times as big as the 1973-74 OPEC embargo. Because the demand for oil is so insensitive to the price over the short run, and because there is little excess capacity in the world at the moment, even small disruptions or additions could produce big price changes.  For this reason, I do not have a lot of confidence in anybody’s near-term oil-price forecasts. On the other hand, I think we understand pretty clearly the main factors behind the overall increase in oil prices since 2005.  Demand for oil, particularly from the emerging economies, has grown significantly, and we have had a hard time increasing global production.  The single most likely outcome is that both conditions will continue to be with us.  The most likely scenario is that the next decade will look something like the last, with oil prices volatile but exhibiting an upward trend.   James Stafford: For the past century or so, economies have generally been built upon energy. The economies with access to plentiful, cheap energy have developed the most. With the stagnation of oil production growth, how do you suggest economies could continue to grow from here? Should we stop expecting to see constant economic growth as the norm? James Hamilton: I think this has put a significant burden on the oil-consuming countries.  These economic problems have been compounded by the fact that some of the key manufacturing that once came out of countries like the United States and Japan has now been taken over by the emerging Asian economies. But there is still a strategy for trying to take advantage of the resources we do have.  The United States has had astonishing success in producing natural gas.  This could be the basis for a renewed manufacturing advantage, a new source of U.S. exports, or an alternative transportation fuel.  We should be looking for regulatory reform and infrastructure investment to encourage consumers and entrepreneurs to adopt alternatives to conventional gasoline-powered vehicles. James Stafford: Apart from the Iran and Syria situations – are there any other geopolitical risks that could lead to increased volatility in the energy markets? James Hamilton: The list of oil-producing countries is almost a Who’s Who of world trouble spots.  There is ongoing unrest in Sudan and Nigeria, and it wouldn’t take much to see a major turn of events in Venezuela and Kazakhstan.  Iraq, a key hope for future increases in production, has been a place of conflict for most of the last three decades.  The same forces that disrupted production in Egypt and Libya last year could easily return.  And the key worry about Syria and Iran is the possibility that instability there could spill over into other nations of the region.    James Stafford: Even though many Asian nations have found a way to continue trading with Iran, its economy is still suffering from high inflation and high unemployment. Do you believe that the US Sanctions are having enough of an impact on the Gulf state’s economy to force them into a deal over their nuclear program? James Hamilton: I was surprised that the sanctions were as effective as they were in preventing Iran from selling all the oil it wanted.  But the other key element of that diplomatic strategy is the assumption that Iran will respond to economic pressure by acceding to U.S. demands.  The other possibility is that, if significantly wounded, the regime would lash out more desperately.  This looks to me like a scary situation. James Stafford: Whenever oil prices spike politicians are quick to blame speculators and oil companies for manipulating the markets. Are you in agreement with this – are speculators and oil companies to blame? Or are there other factors that are overlooked deliberately or otherwise by the mainstream media? James Hamilton: The story is pretty simple, and even though politicians may try to distort it, you’d hope that the media would do a better job of reporting the truth than they have.  World oil production was basically stagnant between 2005 and 2008, even though world GDP was up 17%.  With economic growth like that you’d normally expect increased demand, particularly from the rapidly growing emerging economies, and in fact China did increase its consumption by a million barrels a day over these 3 years.  But with no more oil being produced, that meant that the rest of us-- the U.S., Europe, Japan-- had to reduce our consumption.  It took a pretty big price run-up before that happened.  To those claiming the price is too high, I would ask, how high do you think the price had to go to persuade Americans to reduce oil consumption by a million barrels a day? James Stafford: Could you let us know your thoughts on the shale revolution. How do you see it playing out and do you think we have been oversold on shale’s potential? James Hamilton: This is a real success story, and a primary reason that U.S. production is now rising rather than falling.  But there are several key points to keep in mind.  First, it is not cheap to produce oil with these methods-- tight oil is never going to be the reason we get back to $50/barrel.  Second, we’re likely to face much steeper production decline rates from individual wells than was the case for conventional oil production.  The same also applies to deepwater production.  So those who think these new technologies will put us back in the world we once knew are in my opinion missing the big picture. James Stafford: Drilling technology advances, new oil finds and now all the hoopla over shale oil – one would assume we are swimming in the black stuff, yet we have seen no material increase in global annual crude oil production for six straight years. Have we reached a period of peak oil? Or is Daniel Yergin correct in saying that we have decades of further growth in production before flattening out into a plateau? James Hamilton: I do not think the expression “peak oil” is the most helpful way to frame the question.  Too many people have a knee-jerk reaction as soon as they hear the phrase.  I can’t tell you how many times I’ve seen people assume that it means that we’re “running out of oil”, which straw man they then try to debunk.  I would instead call attention to the basic fact that the annual production flow from any given field shows an initial period of increase followed by subsequent decline.  Anyone who tries to deny that has a serious lack of grip on reality.  Production from the original Oil Creek District in Pennsylvania peaked in 1873, and from the state of Pennsylvania as a whole in 1891.  There’s a long, long list of areas that have exhibited declining production rates for a long, long time.   Global production nonetheless continued to increase for a century and a half, not so much because we got more out of the old fields, old states, old countries, but because we turned to new ones.  But that game is obviously not one we can continue to play forever. Yes, Yergin today is optimistic about the future.  But I remember that Yergin was also very optimistic in 2005, and the last 7 years have not looked at all like he was predicting they would.  We’ve increased production only a little bit since 2005, despite tremendous incentives to do more.  I think many people are making a mistake if they assume that world oil production is always going to increase, year after year. James Stafford: What are your thoughts on the Keystone XL Pipeline – is it something that needs to be pushed through after the presidential elections? Or something the country can live without? James Hamilton: It is ridiculous to see oil selling in Cushing at a $20 discount to the world price and oil in North Dakota selling at a $20 discount to WTI.  Since the 1860s we understood that pipelines were the logical way to transport oil.  Somehow the Keystone pipeline became a symbol of some bigger controversies that in my opinion should be completely separate from the question of the most economically efficient (and for that matter, the most environmentally friendly) way to transport oil. There are several work-arounds in progress, such as reversal of the Seaway Pipeline and plans to build just the Gulf Coast portion of Keystone.  But I think that given the magnitude of the drop in U.S. demand and success of North American production, we’ll need additional measures. James Stafford: How would you see energy production changing in the U.S. under a Romney Administration? James Hamilton: Romney wants to be more aggressive in approving oil exploration and development, and that should make a difference.  But it’s easy for the politicians to overstate how much they can change.  The U.S. is moving ahead with tight oil production, and is going to do so no matter who is the president, because the economic incentives are just too powerful for anybody to stop it.  On the other hand, it’s a big world out there, and anyone who thinks that U.S. production alone is going to make up for declines from mature fields and burgeoning consumption of emerging economies is in my opinion way too optimistic.  The world faces a huge challenge, and I think we need to take that challenge very seriously. James Stafford: James, thank you for taking the time to speak with us. For those of you who haven’t seen Professor Hamilton's site please take a moment to visit Econbrowser Related BoomBustBlog research:  Frontline investment highlights - Pro Page 1 Frontline investment highlights - Pro Page 2 Frontline investment highlights - Pro Page 3 FRO Oil Price Arbitrage Addendumhot! 01/07/2009 Potential Spillover Effects from the Middle East to the EU 02/02/2011 This discussion is continued on BoomBustBlog in the Financialization of Physical Energy: Does Paper Oil Distort Physical Pricing post.

23 августа 2012, 03:35

The Awesome, Mind-Boggling Tale of Sam Israel and the Shadow Markets

I just finished reading Octopus by Guy Lawson, and it's one of those rare books that fit the "I Couldn't Put It Down" category, much like Den of Thieves, published in 1992. It is the tale of Sam Israel, whom you may remember in 2006 was on the lam from his failed hedge fund/Ponzi scheme. He faked his suicide, was captured, and is now hanging out for the next couple of decades (with none other than Bernie Madoff) in a state prison named, of all things, Valhalla. Israel was born into a very wealthy family that made its fortune in commodities trading. Even as a young man, he wanted to be a successful trader on Wall Street and impress his hard-to-please father that he could truly make it in the brutal world of trading. He began work in the 1980s, working at the bottom of the totem pole at the New York Stock Exchange. He did whatever menial tasks were available, serving as a "runner" and gopher, and the book details his climb up through the trading ranks - - by 1987, serving as a trader for a relatively prominent firm (which was badly damaged in the 1987 crash). Israel actually did quite well during the crash, and after working for a couple of other funds in the ensuing years, he decided to create a fund of his own with two other men - - one of them, Jimmy Marquez, who himself had launched a fund whose losses were so severe that he had to shut it down, and another, Dan Marino, a chubby, almost-deaf accountant who was there to keep (and, later, cook) the books. Israel was, in a way, ahead of the curve since he wanted to base his orders on a very primitive (and today what would be considered ungodly slow) version of high-speed trading. His "Forward Propogation" program would predict the next move of the market with 86% accuracy, he claimed, and for virtually the entire history of the newly-christened Bayou fund, Forward Propogation was the centerpiece of their technological edge in the markets. At first, the fund was off to a good start. In a few months, Bayou had a nice profit to show to their partners (who, at the time, were just a few friends and family, thus yielding a tiny fund of not even a million dollars). Marquez believed a major bull market in gold was forthcoming, so he went heavily long into precious metals. Although Marquez was absolutely right, he was far too early, and what had been a gain turned into a loss. The fund was off to a terrible start, and the three partners were certain their investors would simply leave, thus snuffing out their new business.  This left the partners in a very discouraging position, but Marino hit upon an idea: when the business was initially set up, they created two organizations: one of them the fund itself, and the other, the brokerage through which the fund would trade. Marino proposed that they issue a substantial commission "rebate" to the fund. It would create a substantial loss for the brokerage, but since Israel was its only owner, no one would really care. The Bayou fund partners would see a profit instead of a loss, and the line item was plausible enough that it would pass muster with the auditors. The other two partners reluctantly agreed that this was the only easy way out of their predicament. Thus, instead of reporting to their partners a loss of 14%, they proudly issued reports showing a 40% gain. At this point of the book, two themes in the fund's future are already clear: one, the partners were willing to fudge the numbers to hide anything they considered embarassing, and two, when they lied, they lied big. They could have entered a much smaller "rebate", nudging the loss slightly into profitable territory, so at least the partners wouldn't have outright bad news. Instead, they had to create a ridiculous profitable result with the hope of generating interest from new investors. One aspect of the story that the author makes very clear is that, unlike Madoff, the creators of Bayou didn't set out to set up a Ponzi scheme. On the contrary, they genuinely thought they could beat the market, and they sought to create outsized returns for their investors. For the entire history of the fund, Israel traded, and traded, and traded, employing increasingly bizarre and aggressive techniques to try to address what the partners called simply The Problem; that is, the difference between reality (the cash in the Bayou accounts) and fantasy (the sum total of balances all the partners supposedly held).  The scheme began, as many crimes like this do, quite "innocently". The men were simply too embarassed to admit a loss to their partners, so they concocted a way to hide what, in retrospect, was a pretty small amount of absolute dollars in losses. Instead of simply stating the facts and assuring they would try harder, they had to present themselves as widly successful in their endeavor and, in their own minds, pledge that they would make up for the difference by their soon-to-be-realized success in trading. Thus, The Problem grew over time from tens of thousands to hundreds of thousands to millions to, ultimately, hundreds of millions. In 1998, the men took a couple of steps to make the company seem more "real." First, at Marquez's urging, they moved from Israel's home basement to a fancy office on "Hedge Fund Row" in Stamford, Connecticut. Although the expensive office was a stretch for a fund just starting out, they wanted to give a larger-than-life impression. Also, once they realized The Problem was getting too big to pass muster with their auditors, they decided to simply make their own auditing firm, run by Marino from a spare desk in the Manhattan office of a friend. Marino came up with a name, business cards, stationary - - everything they needed to make it seem like a separate organization was carefully examining and approving Bayou's statements. The line item on the statements that, in a stroke, resolved all the losses and falsified profits of the firm was called Due From Brokers. This imaginary asset was, incredibly, never questioned by any partner or prospective investor. The impressive returns that Bayou was creating month after month managed to prove that, by and large, greed beats prudence with most folks. Due From Brokers was an ever-growing accounting bucket that balanced the books neatly for all concerned.  New investors started to come in at a steady pace, and by 2000, the fund was about $10 million. Israel actually played the bursting of the NASDAQ bubble quite well, and although The Problem was larger than ever, it was still plausible that superb trading could bridge the gap between reality and pretend. On September 10, 2001, Israel's computer program did something it had never done before - - all ten indicators pointed in the same direction: green. That is, go long, and go long in a big way. Sam did just that, loading up on futures, options, and stocks, all predicated on the forthcoming rally that would save him from the deep hole Bayou was in. What happened the next morning changed all of that. When the market finally opened the next week, Bayou took devastating losses, making the hole that much deeper. Of course, the letter Bayou sent to its partners solemnly stated that while the profit had been reduced, the year was nonetheless still profitable - - an incredible (and completely untrue) feat. The money kept tumbling in from new investors, and by the end of 2001, Bayou claimed $85 million in assets. This was an inflated figure, of course, since it counted both dreamed-up profits and masked losses, but there's no doubt the fund was getting popular momentum. Things were going less well in Israel's personal life. His wife kicked him out of the house (they had a couple of kids by then), and Israel decided to live the life of a hedge fund bachelor, renting a $22,000/month mansion owned by Donald Trump in Mount Kisco, New York. As with the Stamford office, Israel figured this would a sensible way to dazzle potential investors. Because The Problem had become so large, Bayou started making much riskier investments in the hope that they would jettison the firm back to true profitability. Bayou started acting more like a venture capital firm than an equity hedge fund, plowing $50 million into various startups, none of which ever paid off. On the last day of 2003, the Forward Propogation program again signaled (for only the second time) an "all clear" to go long the market in a big way, with all ten signals flashing green. Israel backed up the truck once more. Although no terrorist attack took place like last time, the market still moved against him, and $20 million of (additional) losses later, he closed those positions too. It was around then that Israel encountered Jack O'Halloran (whom you may remember as the mute character Non from the Superman movies).  This part of Octopus is probably the most enjoyable, because O'Halloran tells Israel stories, plots, and conspiracies that are incredible in the truest sense of the word (several of which involve the Kennedy assasination). Through O'Halloran, Israel is introduced to the man who dominates the second half of the book, Robert Booth Nichols. No description I lay out here would do justice to Nichols, but I'll summarize by saying he is a mix between Chuck Norris, Rambo, and James Bond. He was a real-life spy and mercenary and, unknown to Israel, a world-class con artist. His ability to con put to shame anything a poser like Bernie Madoff or Sam Israel could concoct. He executed what is known in the underworld as "the long con" - - the creation of a completely separate reality, utterly convincing and singularly devoted to separating the mark (Sam Israel) from his money (the entire Bayou account). The movie Matchstick Men, which is superb, illustrates a long con beautifully. Nichols spent weeks telling Israel how the world really worked. All the conspiracy theories were true. Thirteen families ran the planet. The governments, the Fed, all the politicians - - they were merely a front for the DeBeers and the Rothschilds and the other multi-billionaires that owned and ran everything. This played beautifully into Israel's distorted and paranoid view of the world. For someone who had been so prone to cheating, the idea that everything in the world was just one big cheat surely must have been comforting. The real news for Israel, as Nichols laid it out, was that there was a shadow market that traded the money of the super-wealthy and produced returns that were astonomical. Risk-free trades would throw off 100% gains in just a couple of weeks, and of course, by repeating these trades, there really was no limit to how many billions one could garner in profits. The Problem, in comparison to the opportunity presented, was miniscule. Israel was convinced that he would not only turn Bayou around, but that he would shut his piddling fund down soon thereafter and amass the countless billions that such a brilliant trader deserved. To help allay whatever smidgen of guilt Israel might have been able to conjure up, Nichols also made it clear that the super-wealthy of the world allocated about half of their astronomical profits to good works, such as seeking a cure for AIDS and providing clean drinking water to the poor (yes, it sounds laughable to read it here, but once Israel was deep into the upside-down world of Nichols, anything seemed possible). So Israel was not only destined to become one of the world's richest men, he would also cure AIDS and save the wretched masses at the same time. Of course, once the $150 million in Bayou's account was transferred to London, "the trade" never seemed to materialize. No, Nichols didn't simply run off with the money; that would be too easy, and the account was strictly under the control of Israel. This long con would take a lot more work that that. But Nichols and his confederates spent months adding more details, color, and credibility to their plot. Yet as anxious as Israel was to place his first trade, there was always an excuse as to why it wasn't happening yet, often involving ridiculous excuses like not being able to find the bonds whose serial numbers matched properly. Nichols then gave Israel a history lesson about Yamashita's gold (a legend with which I wasn't familiar until I read this book). This was just one of many gold mines that Nichols claimed could be "re-hypothecated" (shades of Corzine!) and was valued always at some ludicrous sum, such as $156 billion. Shockingly, Israel also trained under Nichols to become a violent killer, learning how to - as Israel reports it - rip out throats and gouge out eyeballs. At the height of the long con, Nichols even synthesized an attempt on Israel's life, which Israel was able to foil (as was the plan) with a pistol he carried with him at all times. In Israel's own recollection: "So I walked over and stood over him and shot him in the head. Point blank. Killing him. His head exploded all over the sidewalk. Blood and brains were everywhere." To me, it was breathtaking to read how one relatively normal person had become a murderer (and would recall the incident with such detachment). It's pretty evident that Sam Israel had deeper mental issues than simply being a liar and thief. He was also a fool, though, because in all probability, the gun they provided him was filled with blanks, and the "exploding head" (conveniently) was of a man wearing a turban rigged to realistically explode as if it had been shot. From that point on, the bond between Nichols and Israel made them inseparable. It was at this time that Nichols asked for a $10 million "loan" from Israel, ostensibly for some important personal opportunities. Nichols even provided $100 million in collaterial as security. What was the collateral, you ask? Why, a box of bonds from the Yamashita Gold hoard, secured in a box which, if opened incorrectly, would spray a deadly nerve agent, killing everyone present. Yes, you read that correctly, and Israel believed it, straight up and down. He wired the $10,000,000 to his friend. A little later, when Israel went to his bank to withdraw a few thousand dollars from the Bayou account, the teller told him the balance was $0. The night before, the entire sum had been wired to a confederate of Nichols', and it was simply by chance that Israel's attempt at a small withdrawal brought it to his attention. The bank was able to undo the wire just in time, although Israel had no idea of the connection, if any, between the person who sucked the account dry and his new best friend, Mr. Nichols. Back in the U.S., Israel got a visit from the FBI. It probably won't surprise you to read that the FBI wasn't there to expose the scam - - heavens, no, that would imply competency. They were there since they were concerned - - based on what happened with the wire in Europe - - that Mr. Israel might be victim to a scam (yes, the irony is delicious). Incredibly, Israel sat with the two FBI agents in his giant rented mansion and explained the lunatic tale of the shadow markets, the 13 families that controlled the Earth, and all the other hare-brained nonsense that Nichols had fed him. The agents were puzzled, to say the least, but still felt a need to try to protect Israel from any unsavory characters that might be out ot get him. Their boss, upon later being told the same stories by Israel, was skeptical of who this kook was and what he was up to. As Israel's behavior became increasingly bizarre, his partners started to send in redemption requests. By taking $50 million from the $150 million account (in which no trades in the Shadow Market had taken place, naturally), Bayou was able to cover the redemptions, but it was clear that time was running out, and Israel was getting frantic to make his promised billions and move on with his life. By 2004, after all, Bayou had in actuality lost $75 million of investor money, in addition to claiming $175 million in extra profits that weren't real. A quarter-billion dollar shortfall isn't easy to make up with a $150 million fund. As Israel got more and more desperate, he started partaking in absolutely lunatic schemes, no more plausible than the Nigerian scams that appear in your email inbox from time to time (and this is not an exageration, because he would wire hundreds of thousands of dollars to lawyers that pledged a vast fortune was coming from places such as Nigeria, once they had the initial deposit in hand). Amazingly, the government employee who actually figured out something was wrong wasn't from the SEC (easily Earth's most incompetent body) or the FBI. It was a fellow named Cameron Holmes, who worked in the Financial Remedies section of the Arizona Attorney General's office. He got a suspicious activity report of a $100 million wire that had been sent to a suburban branch of Wachovia bank. (Israel had grown tired waiting for the Shadow Market trades, so he repatriated the money). After a little digging, Holmes grew confident that a scam was afoot, so he had the money frozen at Wachovia. It was around this time that Bayou's largest investors were demanding their money back. To buy a few weeks, Israel made an announcement that the fund was shutting down. Part of his letter to clients read, "It is with great regret, but with an overwhelming sense of pride and accomplishment in a job done to the best of our abilities, that I announce the closing of the Bayou Family of Funds at the end of July 2005." Israel still held out hope that in the few weeks they required to "close the books" and cut the checks, some kind of miracle would take place. Of course, no miracle took place. When a partner received his $52 million check, and it bounced, he made a trip to the Bayou office and found it deserted. He did find a draft of a suicide note that read, "I know God will have no mercy on my soul." He probably concluded at that point that the bounced checked wasn't a mistake. The principals at Bayou were sentenced to twenty years each. Israel was granted a few weeks before commencing his sentence. He took the opportunity to fake his suicide and try to start a new, anonymous life. He got away with it for a couple of weeks, but after a (real) subsequent suicide attempt on his part, which failed, he turned himself in to the authories and gave up the chase. Another two years was tacked on to his sentence. I think I've done a good job capturing the essence of the book, which I frankly think would make an amazing movie. Get it and read it; you'll probably agree with me that it's an awesome tale.