| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B - Buy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| S - Sale | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESEARCH REPORTS
Monday, January 05, 2009
>INSIDER TRADING 05-01-2009
RESEARCH REPORTS
Sunday, January 04, 2009
>World economies in year 2009.
There are major imbalances across the global economy ... Some countries save too much, others borrow and spend too much. These imbalances go back and forth as economies rebalance themselves.
The gut wrenching credit crunch of 2008 is a symptom of global rebalancing. And there's no reason why it won't continue well into 2009.
The Act of Rebalancing Is About To Get Real Nasty
For Export-Model And Oil Exporter Countries ...
My outlook for 2009 is this: The U.S. economy could get a lot uglier. But the pain of rebalancing will be even more severe in Europe, Asia, and Latin America. And it will hit those economies a whole lot harder than is now priced into the market.
I think Treasury Secretary Paulson nailed it in his recent comments to The Financial Times:
"In the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters — at a time of low inflation and booming trade and capital flows — put downward pressure on yields and risk spreads everywhere.
"This laid the seeds of a global credit bubble that extended far beyond the U.S. sub-prime mortgage market and has now burst with devastating consequences worldwide.
"Excesses built up for a long time, [with] investors looking for yield, mis-pricing risk. It could take different forms. For some of the European banks it was Eastern Europe. Spain and the UK were much more like the U.S. with housing being the biggest bubble. With Japan it may be banks continuing to invest in equities."
Put another way, the U.S. financial system became saturated trying to absorb all the excess savings from the export-model and oil exporting countries.
These countries lacked internal investment alternatives and decided not to invest into their own economies. This created virtually "free-money" for the birth of massive levels of new, exotic derivatives and one of the core reasons for the lack of U.S. consumer savings.
The Cash Cow Has Dried Up ...
In short, the U.S. isn't recycling excess savings from China and oil exporters any longer because China's exports and oil prices have plummeted.
Many pundits imply that this is very bad for the U.S. But these same commentators fail to mention this situation is much worse for economies dependent on creating wealth through exports.
This category includes:
* China,
* Energy exporters (Middle-East, Russia, and Latin America), and
* Emerging markets dependent upon foreign bank funding.
The U.S is at the core of this rebalancing because it is no longer providing the funding ...
U.S. consumers were saving with rip-roaring home prices and a booming stock market. But then — housing and stocks — got hammered. Now guess what: The U.S. consumer is saving again and U.S. institutions are deleveraging!
So, the pool of savings being created by U.S. consumers will help replace much of the lost reinvestment from outside.
U.S. institutional deleveraging is painful. Nevertheless, the process of cleaning away dead wood for potential future growth is continuing. And remember, the U.S. has funding mechanisms others don't have — deep capital markets and a flexible fiscal and monetary policy.
A Major Shift Going Forward ...
Chinese workers are feeling the pinch as factories close and unemployment rises.
If I'm right about a major sentiment shift of debt and risk-taking going forward, the process in many other countries will be much more painful and take much longer than it will in the U.S.
These countries will have to make major changes to their export-export-export model. This means developing a viable domestic market. That means transferring economic and political power. And that means a lot of social unrest could be in the cards in 2009.
Consider ...
* Emerging markets of all stripes have been cut-off from their funding sources. They're unable to make it up through exports in a world where consumer demand may have changed for some time.
* Russia's pure, energy-dependent economy is imploding and unrest is rising; some believe the Putin regime is in trouble of being toppled. This adds to the potential that Russia will lash out in order to whip up nationalist frenzy to divert attention from dwindling economic alternatives and freedoms.
* Social unrest in Russia will add to the riskiness of investing in Eastern and Central Europe, increasing the chances of country defaults in the region — Ukraine is already teetering! This will also add to Western Europe's banking woes since they are hugely exposed to emerging markets in Europe and elsewhere.
* Rising tensions across the Eurozone increase the rising risk within the system as Greece's and Italy's fiscal status deteriorates by the day. Unrest in Greece among youth and anarchists could be the tip of the iceberg for broader unrest across the Eurozone as unemployment rises.
* Global demand for exports has evaporated. And China, the world's biggest exporter, is feeling the pain in a big way. Factories across China are closing, unemployment is soaring, and social tensions are rising. This is a real wildcard. China knows its dependence on exports is coming around to bite them. Transition from an export-oriented to a consumer-driven economy doesn't happen overnight. China was already moving down the path of consumerism. But in the foreseeable future rising unemployment, falling reserves, and dwindling corporate profits will likely crush China's expected consumer growth in 2009.
* Latin America is highly dependent on rising commodity prices and exports. Already, Ecuador has defaulted on its bonds because of falling revenues as oil prices tumbled. And the prospect for a big rebound in commodity prices looks dim because global demand continues to weaken. Tensions are rising across the region, too.
So, yes, the U.S. economy is in trouble. And it could get much worse for the U.S. as unemployment seems set to shoot higher. But, it's all relative. And relative to the potential for a lot more pain elsewhere, U.S. financial assets could surprise investors.
That's why I remain bullish on the U.S. dollar.
Best wishes,
Jack
This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.
RESEARCH REPORTS
The gut wrenching credit crunch of 2008 is a symptom of global rebalancing. And there's no reason why it won't continue well into 2009.
The Act of Rebalancing Is About To Get Real Nasty
For Export-Model And Oil Exporter Countries ...
My outlook for 2009 is this: The U.S. economy could get a lot uglier. But the pain of rebalancing will be even more severe in Europe, Asia, and Latin America. And it will hit those economies a whole lot harder than is now priced into the market.
I think Treasury Secretary Paulson nailed it in his recent comments to The Financial Times:
"In the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters — at a time of low inflation and booming trade and capital flows — put downward pressure on yields and risk spreads everywhere.
"This laid the seeds of a global credit bubble that extended far beyond the U.S. sub-prime mortgage market and has now burst with devastating consequences worldwide.
"Excesses built up for a long time, [with] investors looking for yield, mis-pricing risk. It could take different forms. For some of the European banks it was Eastern Europe. Spain and the UK were much more like the U.S. with housing being the biggest bubble. With Japan it may be banks continuing to invest in equities."
Put another way, the U.S. financial system became saturated trying to absorb all the excess savings from the export-model and oil exporting countries.
These countries lacked internal investment alternatives and decided not to invest into their own economies. This created virtually "free-money" for the birth of massive levels of new, exotic derivatives and one of the core reasons for the lack of U.S. consumer savings.
The Cash Cow Has Dried Up ...
In short, the U.S. isn't recycling excess savings from China and oil exporters any longer because China's exports and oil prices have plummeted.
Many pundits imply that this is very bad for the U.S. But these same commentators fail to mention this situation is much worse for economies dependent on creating wealth through exports.
This category includes:
* China,
* Energy exporters (Middle-East, Russia, and Latin America), and
* Emerging markets dependent upon foreign bank funding.
The U.S is at the core of this rebalancing because it is no longer providing the funding ...
U.S. consumers were saving with rip-roaring home prices and a booming stock market. But then — housing and stocks — got hammered. Now guess what: The U.S. consumer is saving again and U.S. institutions are deleveraging!
So, the pool of savings being created by U.S. consumers will help replace much of the lost reinvestment from outside.
U.S. institutional deleveraging is painful. Nevertheless, the process of cleaning away dead wood for potential future growth is continuing. And remember, the U.S. has funding mechanisms others don't have — deep capital markets and a flexible fiscal and monetary policy.
A Major Shift Going Forward ...
Chinese workers are feeling the pinch as factories close and unemployment rises.
If I'm right about a major sentiment shift of debt and risk-taking going forward, the process in many other countries will be much more painful and take much longer than it will in the U.S.
These countries will have to make major changes to their export-export-export model. This means developing a viable domestic market. That means transferring economic and political power. And that means a lot of social unrest could be in the cards in 2009.
Consider ...
* Emerging markets of all stripes have been cut-off from their funding sources. They're unable to make it up through exports in a world where consumer demand may have changed for some time.
* Russia's pure, energy-dependent economy is imploding and unrest is rising; some believe the Putin regime is in trouble of being toppled. This adds to the potential that Russia will lash out in order to whip up nationalist frenzy to divert attention from dwindling economic alternatives and freedoms.
* Social unrest in Russia will add to the riskiness of investing in Eastern and Central Europe, increasing the chances of country defaults in the region — Ukraine is already teetering! This will also add to Western Europe's banking woes since they are hugely exposed to emerging markets in Europe and elsewhere.
* Rising tensions across the Eurozone increase the rising risk within the system as Greece's and Italy's fiscal status deteriorates by the day. Unrest in Greece among youth and anarchists could be the tip of the iceberg for broader unrest across the Eurozone as unemployment rises.
* Global demand for exports has evaporated. And China, the world's biggest exporter, is feeling the pain in a big way. Factories across China are closing, unemployment is soaring, and social tensions are rising. This is a real wildcard. China knows its dependence on exports is coming around to bite them. Transition from an export-oriented to a consumer-driven economy doesn't happen overnight. China was already moving down the path of consumerism. But in the foreseeable future rising unemployment, falling reserves, and dwindling corporate profits will likely crush China's expected consumer growth in 2009.
* Latin America is highly dependent on rising commodity prices and exports. Already, Ecuador has defaulted on its bonds because of falling revenues as oil prices tumbled. And the prospect for a big rebound in commodity prices looks dim because global demand continues to weaken. Tensions are rising across the region, too.
So, yes, the U.S. economy is in trouble. And it could get much worse for the U.S. as unemployment seems set to shoot higher. But, it's all relative. And relative to the potential for a lot more pain elsewhere, U.S. financial assets could surprise investors.
That's why I remain bullish on the U.S. dollar.
Best wishes,
Jack
This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com
RESEARCH REPORTS
Friday, January 02, 2009
>Billionaire Blowups of 2008
Dozens of the world's wealthiest lost billions in recent months, but these 10 distinguish themselves for some of the biggest flops.
It was a dreadful year for the world's wealthiest as markets and currencies around the world tumbled.
More than 300 of the 1,125 billionaires we tallied on our annual list last March have since lost at least $1 billion; several dozen lost more than $5 billion. The 10 richest from our 2008 rankings dropped some $150 billion of wealth, dragged down by steel tycoon Lakshmi Mittal, estranged brothers Mukesh and Anil Ambani and property baron K.P. Singh, who together dropped $100 billion. America's 25 biggest billionaire losers of 2008 lost a combined $167 billion.
But even in such an awful year, the stories of a few billionaires and now former billionaires stand out as particularly dreadful.
Take David Ross, one of the U.K.'s most successful entrepreneurs. Earlier this month, Ross notified four public companies in which he was a major shareholder and director that he had borrowed against his shares to fund real estate investments that had soured. He will likely have to sell some of those stakes to pay off his debts. So far he has resigned from three of the four boards and stepped down from his post as an Olympics adviser. His fortune, which we estimated at $1.4 billion in March, is now worth about $150 million.
Bjorgolfur Gudmundsson, former chairman and a large shareholder in Landsbanki, Iceland's second largest bank, saw the firm seized in October as the worst of the credit crisis tore through the island nation. The failure wiped out his $1.1 billion fortune. He has since had to put his holding company, Hansa, into voluntary liquidation and is selling his U.K. soccer team, West Ham.
Russians were some of the biggest losers in the past year. Vladimir Lisin's Novolipetsk Iron and Steel is down three-fourths since its June peak. Dmitry Rybolovlev's fertilizer company, Uralkali, has fallen 90% since it peaked around the same time.
But those losses pale compared with the troubles facing Oleg Deripaska. In March he was the world's ninth richest person and Russia's richest man, with a fortune we estimated to be worth $28 billion. Since then Deripaska has been forced to sell shares in Canadian carmaker Magna International and German construction firm Hotchief, and had to borrow $4.5 billion from a state-controlled bank to hold on to his stake in Norilsk Nickel. He will likely sell off additional assets to avoid losing even more of his fortune, now estimated at $10 billion. Or less.
The biggest loser of all was Anil Ambani. Touted on the cover of our 2008 billionaires issue for having added $24 billion to his fortune in one year, Ambani has dropped $30 billion since then. But don't worry too much. His Reliance Entertainment is investing $500 million in a new studio venture with Steven Spielberg's DreamWorks. Plus, he remains quite wealthy, worth $12 billion That's something many others can't claim.
1. Anil Ambani
March net worth: $42 billion
Current net worth: $12 billion
The biggest billionaire gainer last March is now the year's biggest loser. Ambani lost $30 billion in the past nine months, more than anyone in the world. Stock of his telecom company dropped after his estranged brother helped scuttle a deal with African telecom MTN. It's quite an achievement in a year in which three of his fellow countrymen--estranged brother Mukesh, steel tycoon Lakshmi Mittal and Indian KP Singh, all of whom ranked earlier among the world's 10 richest--lost more than $20 billion apiece.
2. Oleg Deripaska
March net worth: $28 billion
Current net worth: less than $10 billion
Former metals trader survived Russia's gangster wars but may not withstand collapsing markets and heavy debts of at least $14 billion. Russia's one-time richest man recently received a $4.5 billion loan from a state-controlled bank in order to keep his 25% stake in Norilsk Nickel, which faced a margin call by Western banks from which he had borrowed. Other margin calls forced him to divest a $1.5 billion stake in Canadian carmaker Magna International and a $500 million stake in German construction company Hotchief. He's also selling stake in insurance company Inogsstrakh.
3. Anurag Dikshit
March net worth: $1.6 billion
Current net worth: $1 billion
Dikshit designed the software for PartyGaming's successful PartyPoker game, which allowed live gambling over the Web. He left the company and sold a chunk of shares in 2006, the year the U.S. government banned gaming. He recently pleaded guilty to violating U.S. gaming laws and agreed to forfeit $300 million. He could face up to two years in jail but apparently won't be sentenced until 2010. He has already paid $100 million of his fine and will pay the rest in two installments next year.
4. Bjorgflur Gudmundsson
March net worth: $1.1 billion
Current net worth: zero
The October collapse and government seizure of Iceland's second largest bank wiped out the $1.1 billion fortune of Gudmundsson, the bank's chairman and biggest shareholder, along with his son Thor. His holding company, Hansa, has since gone into voluntary liquidation and is looking for a buyer for its U.K. soccer team, West Ham. It's not the first time he's run into trouble. A former shipping executive, he was charged with fraud and embezzlement in relation to the firm's 1985 collapse, and was eventually found guilty on five minor counts and sentenced to 12 months' probation.
5. Luis Portillo
March net worth: $1.2 billion
Current net worth: $15 million
Spain's short-lived real estate gold rush left one of its most visible speculators holding a nearly empty bag. Portillo--who acquired real estate firm Inmocaral three years ago, then led the takeover of the larger Inmobiliaria Colonial in 2006--personally borrowed a reported $1.4 billion from more than a dozen banks during boom times, using his stock as collateral. He resigned as chairman in December 2007 and then tried to sell his stake to a Dubai fund earlier this year. When the deal fell through, he had to sell most of shares to pay debts.
RESEARCH REPORTS
It was a dreadful year for the world's wealthiest as markets and currencies around the world tumbled.
More than 300 of the 1,125 billionaires we tallied on our annual list last March have since lost at least $1 billion; several dozen lost more than $5 billion. The 10 richest from our 2008 rankings dropped some $150 billion of wealth, dragged down by steel tycoon Lakshmi Mittal, estranged brothers Mukesh and Anil Ambani and property baron K.P. Singh, who together dropped $100 billion. America's 25 biggest billionaire losers of 2008 lost a combined $167 billion.
But even in such an awful year, the stories of a few billionaires and now former billionaires stand out as particularly dreadful.
Take David Ross, one of the U.K.'s most successful entrepreneurs. Earlier this month, Ross notified four public companies in which he was a major shareholder and director that he had borrowed against his shares to fund real estate investments that had soured. He will likely have to sell some of those stakes to pay off his debts. So far he has resigned from three of the four boards and stepped down from his post as an Olympics adviser. His fortune, which we estimated at $1.4 billion in March, is now worth about $150 million.
Bjorgolfur Gudmundsson, former chairman and a large shareholder in Landsbanki, Iceland's second largest bank, saw the firm seized in October as the worst of the credit crisis tore through the island nation. The failure wiped out his $1.1 billion fortune. He has since had to put his holding company, Hansa, into voluntary liquidation and is selling his U.K. soccer team, West Ham.
Russians were some of the biggest losers in the past year. Vladimir Lisin's Novolipetsk Iron and Steel is down three-fourths since its June peak. Dmitry Rybolovlev's fertilizer company, Uralkali, has fallen 90% since it peaked around the same time.
But those losses pale compared with the troubles facing Oleg Deripaska. In March he was the world's ninth richest person and Russia's richest man, with a fortune we estimated to be worth $28 billion. Since then Deripaska has been forced to sell shares in Canadian carmaker Magna International and German construction firm Hotchief, and had to borrow $4.5 billion from a state-controlled bank to hold on to his stake in Norilsk Nickel. He will likely sell off additional assets to avoid losing even more of his fortune, now estimated at $10 billion. Or less.
The biggest loser of all was Anil Ambani. Touted on the cover of our 2008 billionaires issue for having added $24 billion to his fortune in one year, Ambani has dropped $30 billion since then. But don't worry too much. His Reliance Entertainment is investing $500 million in a new studio venture with Steven Spielberg's DreamWorks. Plus, he remains quite wealthy, worth $12 billion That's something many others can't claim.
1. Anil Ambani
March net worth: $42 billion
Current net worth: $12 billion
The biggest billionaire gainer last March is now the year's biggest loser. Ambani lost $30 billion in the past nine months, more than anyone in the world. Stock of his telecom company dropped after his estranged brother helped scuttle a deal with African telecom MTN. It's quite an achievement in a year in which three of his fellow countrymen--estranged brother Mukesh, steel tycoon Lakshmi Mittal and Indian KP Singh, all of whom ranked earlier among the world's 10 richest--lost more than $20 billion apiece.
2. Oleg Deripaska
March net worth: $28 billion
Current net worth: less than $10 billion
Former metals trader survived Russia's gangster wars but may not withstand collapsing markets and heavy debts of at least $14 billion. Russia's one-time richest man recently received a $4.5 billion loan from a state-controlled bank in order to keep his 25% stake in Norilsk Nickel, which faced a margin call by Western banks from which he had borrowed. Other margin calls forced him to divest a $1.5 billion stake in Canadian carmaker Magna International and a $500 million stake in German construction company Hotchief. He's also selling stake in insurance company Inogsstrakh.
3. Anurag Dikshit
March net worth: $1.6 billion
Current net worth: $1 billion
Dikshit designed the software for PartyGaming's successful PartyPoker game, which allowed live gambling over the Web. He left the company and sold a chunk of shares in 2006, the year the U.S. government banned gaming. He recently pleaded guilty to violating U.S. gaming laws and agreed to forfeit $300 million. He could face up to two years in jail but apparently won't be sentenced until 2010. He has already paid $100 million of his fine and will pay the rest in two installments next year.
4. Bjorgflur Gudmundsson
March net worth: $1.1 billion
Current net worth: zero
The October collapse and government seizure of Iceland's second largest bank wiped out the $1.1 billion fortune of Gudmundsson, the bank's chairman and biggest shareholder, along with his son Thor. His holding company, Hansa, has since gone into voluntary liquidation and is looking for a buyer for its U.K. soccer team, West Ham. It's not the first time he's run into trouble. A former shipping executive, he was charged with fraud and embezzlement in relation to the firm's 1985 collapse, and was eventually found guilty on five minor counts and sentenced to 12 months' probation.
5. Luis Portillo
March net worth: $1.2 billion
Current net worth: $15 million
Spain's short-lived real estate gold rush left one of its most visible speculators holding a nearly empty bag. Portillo--who acquired real estate firm Inmocaral three years ago, then led the takeover of the larger Inmobiliaria Colonial in 2006--personally borrowed a reported $1.4 billion from more than a dozen banks during boom times, using his stock as collateral. He resigned as chairman in December 2007 and then tried to sell his stake to a Dubai fund earlier this year. When the deal fell through, he had to sell most of shares to pay debts.
RESEARCH REPORTS
>INSIDE TRADING 02-01-2009
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B - Buy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| S - Sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESEARCH REPORTS
Subscribe to:
Posts (Atom)