Well Played, Mr. President!

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

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

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

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

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

 

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

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

Read more »

Bannon Ban

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

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

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

 

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

 

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

Read more »

Nobel Prize for Trump?

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

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

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

 

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

 

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

Read more »

Tables Posted

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

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

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

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

Read more »

Dodged Bullets

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

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

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

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

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

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

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

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

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

Read more »

Fidelio Politics, re-send

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

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

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

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

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

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

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

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

Read more »

A Different Sunday

Sun, 2017/04/02 - 12:07pm | Your editor

 

Having grown up during the fierce the Cold War, I can appreciate that another 70-year-old might want to try to restart US-Russian relations. In fact both George W. Bush and Barrack Obama had the same idea. But the shambolic mismanaged Trump Administration has so poisoned the air that the chances of a deal with Vladimir Putin have been reduced.

Russia has gained little in the end with its secret violation of the Start Treaty (which the Obama Administration tried to deal with quietly.)

Putin has gained little with his likely authorization of hacking of the Democratic National Committee and Clinton staff emails.

The Kremlin has not won any points after the Obama decision to expel its diplomats did not lead to similar expulsions of US ones because it anticipated Trump would make a deal. In fact, Pres. Trump no longer can reduce pressures on Russia to exit the eastern Ukraine or even Yalta because of too many violations of the Hatch Act against private diplomacy during the Interregnum.

So Russia actually lost rather than gained from its illicit links to Trump supporters and future office holders, who will now have to be purged.

Unlike Pres. Trump, I don't think Vladimir Putin is smart. He is a corrupt KGB-trained thug. Unlike in the old USSR, Stalinism doesn't work in a country with a free press, Internet, an active opposition, and institutions which cannot be cowed by firing or arresting people. Which happens to include the USA, Germany, France, South Africa and a few other places where Russia is trying to influence policy with secret deals and covert payments. And maybe even Russia itself where younger people are protesting against Putin and his kleptocratic pals.

As I warned, there is no way I can manage to produce tables today given the computer mess I am still dealing with. I have removed la belle dame sans vêtements from my public email page which turned out to be do-able without a techie to hand once I had extracted the information on how to proceed, which was of course buried under 9000 pages of tat.

Read more »

Out of Gwalior

Fri, 2017/03/31 - 12:44pm | Your editor

 

The complications from a corporate site being hacked continue but at least now I am getting most of my mail, with the exception of stuff heading for the business. I think the internet is as porous as Swiss cheese now that the location of the hacker has been revealed. It is Gwalior, Madhya Pradesh, India. I checked with our man there, Abhimanyu Sisodia, who said he had been to Gwalior and he doubted that it could have been used because it lacks high speed internet. I disagree.

That may apply to the public but of course criminal conspiracies are perfectly capable of paying for an international toll-free number (which was used) and a server.

Today we have news from Argentina, Mexico, Israel, Ireland, Britain, Sweden, Australia, Canada, Cuba, Chile, Switzerland, France, Hong Kong, Germany, and Brazil, plus a few other places like Florida. There is a buy recommendation for paid subscribers below.

There will be no update of our tables this weekend because of tech support gaps.

Read more »

Would You Buy Vale?

Thu, 2017/03/30 - 12:51pm | Your editor

Today President Trump decided to battle the Freedom Caucus which successfully blocked the attempt to repeal the Obamacare laws. Having been a political independent for most of his life, the president is not beholden to Tea Party element, nor to other parts of the congressional Republican Party. What he will try to do may not be consistent, and may be ugly. It will require crossing the aisle to work with Democrats, and may actually serve the US national interest.

Today's blog will be short and sweet because I have finally gotten back control of my email account from google, thanks to the webmaster realizing that changing the password I use and then sending me a message in that account telling me about this would not actually get me into the account.... Read more »

Brexit Day

Wed, 2017/03/29 - 12:51pm | Your editor

Today British PM Theresa May delivered the “Brexit Letter” to European Union President Donald T. The T is for Tusk, in case you were wondering, the Polish president of the EU Commission.

As promised here is something I got out of the Qwafafew quantitative analysts' club discussion of exchange-traded funds last night. Long-time club guru Matt Moran helped us retroactively work out how money was made by users of the CBOE “skew”index. From Europe, and particularly Ireland, punters could front-run American investors with Chicago Board bets against the smart money expecting a Clinton victory.

Intervening when US markets were closed in reaction to boosts for Trump in chatrooms, twitter, and social media—what Moran called “stocktwits”--these overseas betters on skew, or tail risk (the odds on an unexpected move of markets—were able to make gains dozens of times larger than those who merely bought and sold the CBOE index. They were 6 hours ahead of investors in the US who were still asleep.

Mr Moran now has worked out a new way to play social media in the future with a “stocktwits” chatroom index for social media using the S&P 25 index of large US stocks. Of course, once it becomes a way to hedge political outcomes with a systematic single move, the gains from an oddball outlying outcome will have to be shared with more people. Mispricing will be reduced.

But still I am impressed by the ingenuity of Matt Moran's stocktwits play based on what he learned looking back at performance of US volatility and skew indexes during the 2016 election campaign.

More for paid subscribers follows from Canada, India, Israel, Finland, China, Germany, Ireland, Switzerland, Hong Kong, South Africa, Australia, Chile, and Argentina.

Read more »