International Daybook

Executive Warning:China Dominant in Rare Earth

2012-02-01T20:07:00.000-08:00

Michael Silver,Chairman,CEO and President of American Elements,a global manufacturer of engineered and advanced materials,including rare earth metals and chemicals,has been pleading for the establishment of a U.S. strategic metals reserve(SMR).China is currently dominant in the field,with 95% of the world's rare earth production.
In the event of an embargo on rare earth,U.S. manufacturing would grind to a halt.The strategic metals are crucial for everything from televisions and cell phones to fiber optics,computer hard drives,wind turbines,lasers and night vision goggles,as well as radar transmitters and GPS systems in the military realm.
In the past year,the cost of rare earth has risen more than 25-fold.South Korea,Japan,the EU and U.K. have their own plans for national stockpiles.
The military does need to do an assessment of what its needs for rare earth are for six months or a year.Clearly a politically strategic asset,China has command of most of these materials,putting it in the position of being the Middle East of the 21st century,controlling the alternative energy sources,such as solar panels and hybrid batteries,that are so reliant on rare earth,in Mr.Silver's opinion.
The U.S. has only one open pit mine in Mountain Pass,California,which belongs to Molycorp.Molycorp has just sold 12.5 million shares to a Chilean firm,Molibdenos y Metales S.A.,for 390 million dollars-a 13% stake in the company.
American Metals is based in Los Angeles and has manufacturing and warehouse facilities in the U.S.,China,Mexico and the U.K.
Molycorp(MCP)

Body Found Thursday Morning Identified As Missi - Flash Player Installation

2012-01-31T22:37:00.000-08:00

Body Found Thursday Morning Identified As Missi - Flash Player Installation

CFO:Intel's 2012 Story

2012-01-25T19:22:00.000-08:00

We had an extraordinary year in 2011,says Intel Chief Financial Officer Stacy Smith.We saw growth across every line of business.The story for us in 2012 is a refurbished product line.I'm very excited about the Ultrabook.It will move into a more mainstream price point.
In terms of demand,2011 saw growth as expected,with good growth in the emerging markets.We had a strong enterprise segment,and the data center group was very strong.
The mature market consumer was sluggish,especially in Europe.The supply chain impact from the Thailand flooding was no hard disk drives,so inventory levels were brought down.We expect the impact to ease by Q2 2012.
This is a product story for us.We can build better products for our customers.The growth drivers in 2012 will be the same as in 2011,Mr.Smith predicted.
Intel employs about 90,000 workers at some 200 facilities worldwide.The company has locations in the Americas and Asia,as well as Europe,Africa and the Middle East.
Intel(INTC)

Advisor:Moving From Market Pessimism-plus the nuanced view from Chase

2012-01-18T20:49:00.000-08:00

Anticipation is the key word in the market today,according to Michael Yoshikami,CEO of YCMNET Advisors in Walnut Creek,California.The sentiment is so pessimistic,even meeting expectations will be seen as victory.I think analyst sentiment will shift to more positive.
Stock prices have been based on a catastrophic scenario.The news has been getting better.Europe might actually be stabilising.The economy is slowly recovering.
I think banks are beaten down right now.They're extraordinarily cheap.They have really deleveraged their balance sheet.I think they're poised for a rebound,Mr.Yoshikami noted.
JP Morgan Chase and Qualcomm are among Mr.Yoshikami's top picks.
Jamie Dimon,JP Morgan Chase CEO,thinks it's a mild recovery,but that it seems to be broadening.Charles Gasparino of Fox Business has a lot of respect for Mr.Dimon as being one of the smartest people on Wall Street.Although he's optimistic,there are a lot of hedges in Jamie Dimon's position.For example,although portrayed by the media as predicting a housing recovery in 2012,Mr.Dimon believes we still have a little ways more to go down in housing.With regard to the new financial regulations,although Mr.Dimon doesn't mind banks being required to put more capital aside,he feels the Dodd-Frank bill is squeezing a lot of business out of Wall Street,Fox Business analyst Charlie Gasparino points out.
JP Morgan Chase disappointed Wall Street with its recent Q4 earnings report,missing the Street's estimates.
JP Morgan Chase(JPM),Qualcomm(QCOM)

Consultancy:Geopolitics and Economics

2012-01-11T20:31:00.000-08:00

We have reached the end of the 9-11 era,says Ian Bremmer,President of the eminent consultancy Eurasia Group.This has resulted in the conflation of economics and politics.Geopolitics are being driven by economics now.
In the developed world,investors are concerned about what politicians will do.It means that all of the risks that are out there create a backdrop of hesitancy to take risks.The fragmentation of Europe isn't going to happen,however.There's a big leadership transition,and the currency issue is not a big risk.Indigenous innovation could have a negative impact on U.S. multinational corporations.
The surprises this year are on the good front.The global elections aren't as big a deal as some of the instability we're looking at,Mr.Bremmer pointed out.
Presidential elections are being held in the U.S.,France and Russia in 2012.
Eurasia Group is a political risk consultancy.It has a network of about 480 experts on its staff in 65 countries.Its full time staff of 125 works from offices in New York,Washington,London and Tokyo.Most of the staff have advanced degrees.

Bryn Mawr Trust:Back To Market Basics

2012-01-04T20:21:00.000-08:00

I think the market will come back to fundamentals,says Eric Thorne,Vice President at Bryn Mawr Trust.We're gonna be looking at a hotter economy than people expect.I think it's bonds that we should be worrying about right now.
What's really interesting is,the economy is likely to drive inflation and interest rates higher.The market's always setting these traps.We think investors should be looking for gains in general,and in the international stocks as well.The emerging markets will do even better than the U.S. during the next 12 months or so,Mr.Thorne predicted.
Bryn Mawr Trust is a regional financial institution with branches in the greater Philadelphia area.Founded in 1889,it concentrates on the creation,management,preservation and transferral of wealth for its clients,which range from individuals and families to businesses and organisations.It also offers online checking and savings accounts.
Bryn Mawr Trust(BMTC),Vanguard Emerging Markets Stock ETF(VWO)

LA Mom, 22, Missing After Trip To Neighborhood Drug Store « CBS Los Angeles

2011-12-29T21:05:00.000-08:00

LA Mom, 22, Missing After Trip To Neighborhood Drug Store « CBS Los Angeles

CNBC Asia:2012 Outlook

2011-12-28T20:36:00.000-08:00

CNBC Asia's Karen Tso offered a number of points for investors to consider in 2012:I don't think we're gonna be worried about China anymore.People are being defensive.
Thailand and Indonesia are consumption stories.Thailand's main policy is to increase the minimum wage.
The Shanghai Composite is down more than 20% this year.From a valuation perspective,it's one of the cheapest markets in Asia.There could be a big upside in early 2012.
In Asia,central banks loosening monetary policy could be potentially positive for stocks,Ms.Tso observed.
Karen Tso,based in Singapore,is co-host of CNBC Asia's "Squawk Box" programme.She has a Bachelor of Commerce degree from Griffiths University in Queensland,Australia.A business journalist for more than 10 years,Ms.Tso came to CNBC from Australia's News Nine.
Extra:Recent data suggests the growing influence of China's middle and upper classes.China's grain companies have bought 18 million tonnes of new grain,according to the Xinhua news agency.Chinese pork prices rose up to 0.3% in mid-December trading,and China just overtook India in jewelry sales.

Wealth Manager:What To Expect,For How Long

2011-12-21T20:38:00.000-08:00

The economy's been picking up modestly,says Jason Pride,CFA,Director of Investment Strategy at Glenmeade Investment and Wealth Management.The political side of the equation in Europe is in complete contrast to that.It's gonna take a long time.Expect a bumpy period for an extended amount of time.
The reality is,we live in a very global environment.Our expectation is a moderate downside in Europe,not dragging the U.S. into the abyss.Our big theme is,don't hide in cash or Treasuries which are paying you nothing.
Glenmeade likes high quality high yield bonds and defensive,high quality stocks such as Colgate Palmolive and Yum Brands.These are companies linked to the emerging markets,Mr.Pride pointed out.
Glenmeade is a privately held firm that cites its strength and stability as an organization,delivering consistent and thoughtful advice in all markets,year after year.Glenmeade offers sophisticated strategies based on intellectual rigor for individuals,families,family offices and institutions.It has six offices in locations such as Philadelphia and Morristown,New Jersey.
Colgate Palmolive(CL),Yum Brands(YUM)

Asset Manager:Why PepsiCo Is Favored

2011-12-14T19:27:00.000-08:00

The forward rate of return of PepsiCo is larger than that of Coca-Cola,according to Donald Yacktman,President and Co-Chief Investment Officer of Yacktman Asset Management.PepsiCo comprises 11.2% of YAM's portfolio.Any great business will have experience in both the U.S. and internationally,as PepsiCo does.
PepsiCo offers a slightly better rate of return,and we feel more comfortable with it.We also like and own Coca-Cola shares.
PepsiCo could change its name to Frito-Lay,the name of its snack food division.It makes more money than the soft drinks.Just walking down the grocery store aisle,you can see Frito-Lay's dominance,Mr.Yacktman noted.
Yacktman Asset Management manages two mutual funds,The Yacktman Focused Fund(YAFFX)and The Yacktman Fund(YACKX).Founded in 1992,the firm claims it is focused on delivering risk-controlled results by being objective,diligent and patient.
PepsiCo(PEP),Coca-Cola(KO)

OppenheimerFunds:Liquidity and Structure in Europe

2011-12-07T19:52:00.000-08:00

Thought leaders at OppenheimerFunds have been going over the recent proposals and rumors in Europe.The market is so volatile because of fear of lock up of the financial system.There is a multifaceted game of chicken that the Europeans are playing with one another,resulting in someone driving off a cliff.There does need to be some structural reform.Can it be put in place before the European Central Bank does what it should do?asks Jerry Webman,PhD,CFA,Chief Economist and Senior Investment Officer at OppenheimerFunds.
At least the Europeans have been willing to shake things up a little.Here in America we have an uneasy equilibrium.Among portfolio managers,there's a feeling we're as good as our last idea.Nobody wants to make a bad bet.You get punished for it,Dr.Webman observed.
It's a step in the right direction,adds his colleague Alessio di Longis,CFA,Vice President at OppenheimerFunds,but we are treating the symptoms,not the disease.It does absolutely not mean that we should start emphasizing stocks.Today signals the ECB tendency to ease,but we are not treating the underlying problems.
We have treated the Euro problem from an individual country approach.We need a structural approach,Mr.di Longis agreed.
Oppenheimer Holdings(OPY)

Author and Consultant:Riding the Sawtooth Market

2011-11-30T19:55:00.000-08:00

We're in a slow growth,maybe no growth economy,and this could go on for years,observes Al Angrisani,former Assistant Secretary of Labor and Chief of Staff for President Ronald Reagan from 1980-84,whom he helped to create 16 million new jobs.Investors are picking winners and losers.If the price is down,I'll make a bet on those.
You're looking at IBM,Apple,Siemens.Those are good long-term plays.We're in a sawtooth pattern,but the trend is down.You're picking companies.You get numb from the ups and downs of this sawtooth pattern,and then perhaps you get whammed by China with its uncertainty.
Mr.Angrisani has worked as a turnaround expert,restoring value to shareholders as founder of Angrisani Turnarounds,LLC,a leading consultancy for failing publicly traded companies.He sets out his approach in his book "Win One for the Shareholders!"
Siemens(SI),International Business Machines(IBM),Apple(AAPL)

Emirates Chooses Boeing Jets

2011-11-23T07:10:00.000-08:00

Emirates Air has ordered 50 more 777 airliners from Boeing for a record 18 billion dollars.The deal includes an option for 20 more 777s,which would bring the total cost up to 26 billion.At the same time,Oman has ordered six Boeing 787 Dreamliners.
Jeff Johnson,President of Boeing Middle East,says Emirates Air aims for global aviation domination.We're sold out for years to come.They want the technology.The Middle East sets the standard for wanting this technology.
The Middle East also hungers for military aircraft.There are big air bases in Qatar,Kuwait and Bahrain.These countries want interoperability with the U.S. military.A 60 billion dollar U.S. arms deal with Saudi Arabia is influenced by the fear of Iran,Mr.Johnson noted.
Boeing(BA)

Russell Investments:What Makes Sense Today

2011-11-16T19:32:00.000-08:00

Europe is a huge source of unknowable risk,in the view of Russell Investments' Chief Market Strategist,Stephen Wood.The U.S. economy is doing a hair better than O.K.It is growing.When the market focuses on U.S. fundamentals,it tends to do well.
A globally diversified portfolio of risk assets makes sense.They outpace inflation and give you some return.If you look at the pullbacks as opportunities to get in,you've been able to nickel and dime your way in.The emerging markets are gonna be good in 3-5 or 5-7 years.
Corporations are much less likely to default than governments.Equities could end the year positive on the backs of earnings.
We have a market-based culture,with government institutions responsive to the market.It's more confrontational in Europe.You kind of grind it out here.We've got a number of years to work through these debt issues,whereas in Italy and Greece they've got a couple of days,in Dr.Wood's opinion.

Managing Director:Don't Bank On Banks

2011-11-09T19:18:00.000-08:00

This decade is the worst decade for bank revenue since the Great Depression,in the view of Mike Mayo,Managing Director at Credit Agricole Securities.After a financial crisis,things don't go quickly back to normal.Be prepared to muddle through.A muddle through scenario beats alternatives like failed institution MF Global.
U.S. banks are picking up some loans from Euro banks.You can increase funds for lending,but you can't create borrowers.U.S. debt to GDP is 8 to 1-worse than Greece.We don't have enough proper auditors.Citigroup's have been in place since 1969.
You don't have proper accounting,which creates a crisis of confidence.Let's have auditors sign their names to be accountable.Let's have less regulation,but hold the top people accountable.
We're not having capitalism the way it's supposed to operate.I feel a lot more concern about capitalism when talking to Dick Parsons,Chairman of Citigroup.Just change the characters.Bank CEOs do more damage with ill-conceived incentives,Mike Mayo noted.
Mr.Mayo,a longtime banking analyst,is the author of "Exile On Wall Street."Credit Agricole S.A. is the largest full service bank in France.It ranks second in Europe and eighth in the world.

Merrill Lynch:What You Need To Do

2011-11-02T19:29:00.000-07:00

There is a re-balancing coming in Europe and the U.S.,according to Lisa Shalett of Bank of America-Merrill Lynch Global Wealth&Investment Management.This is a volatility that is unprecedented since World War II.These are in many cases policy-driven.Demand and policy are interconnected.There's just as much uncertainty among consumers.
What everybody thinks is safe may be risky,and vice-versa,such as Treasuries/emerging market bonds.Embrace a more global perspective.This is about real diversification.You need to be in every geography,and not just BRICs.Consider Indonesia,Mexico,Turkey.Emerging markets bonds are safer,Ms.Shalett believes.
Merrill Lynch GWIM provides comprehensive services to affluent clients and institutions,from investment solutions to retirement,benefit plan,banking and philanthropic services.GWIM offers robust and dynamic product and solution platforms from Merrill Lynch offices worldwide.
Bank of America(BAC)

Europe and America:A Standard Chartered View

2011-10-26T20:20:00.000-07:00

The key question is,how quickly a Euro debt agreement will actually be implemented,said David Mann,Regional Head of Research Americas at Standard Chartered.It's a huge round of detail.As long as the European Financial Stability Fund can be levered up without downgrades or extra haircuts,only then can we feel more confident and that we've turned a major corner.
We won't see a pre-crisis level of employment till 2015.It's a more vulnerable economy.It's more likely you're going to see very weak growth.If you get a major shock,it will be closer to stall speed and negative growth.
We've already seen an incredible ability to cut costs,but we need to see the National Federation of Independent Business survey turn around before we can grow confidence and exceed expectations,in Mr.Mann's view.
Founded in 1853,Standard Chartered Bank's core geographies are in Asia,Africa and the Middle East.It has five locations in the U.S. offering wholesale and private banking to corporations,institutions and affluent individuals.

Managing Director:Where To Shelter Now

2011-10-19T21:23:00.000-07:00

We're still very concerned about the situation in Europe,said Adrian Mowat,Managing Director and Chief Emerging Markets Strategist at JP Morgan Chase.What's gonna happen with France and Germany as they recapitalise their banks?We look forward to the G20 meeting November 3-4 in Cannes.
Our advice would be to reduce into that rally.We're concerned because the European Central Bank doesn't seem to get it.At the moment,they're still concerned about regulatory matters and they don't want to grow their capital base.
We need to look out for Chinese inflationary numbers.Inflation will eventually come off there.Our belief is that Europe will get worse before it gets better.Think about capital preservation at this point in time,keeping to U.S. dollar cash,Mr.Mowat advised.
JP Morgan Chase(JPM)

A Columbia University View:Occupy Wall Street and Beyond

2011-10-12T19:26:00.000-07:00

The uncertainty is huge,notes Columbia University economist Jeffrey Sachs.Will the euro survive?Will Europe survive?We shouldn't underestimate how deep we've gotten ourselves into this bind we're in right now.
What's happening at the Occupy Wall Street protests is happening all over the world.Those kids are saying it's global.From the Arab Spring to Tel Aviv to Chile,they're saying we need help;we don't have the future.
We need to be attentive to the 99%.The inequality in this country is out of control.We've been on an economic path that's not working.That top 1% is gonna have to do more,in Dr.Sachs' opinion.
Citigroup CEO Vikram Pandit said he would be happy to speak with the protesters.Their concerns are very understandable.
The protesters are active in nearly 200 U.S. cities now.In a recent poll,40% of those in the upper income bracket expressed support for the protesters-the most support of any bracket.
Dr.Sachs is Director of the Earth Institute at Columbia,which aims for a sustainable earth,and is a special advisor to UN Secretary General Ban Ki-moon.
Citigroup(C)

Venture Capital In China

2011-10-05T20:49:00.000-07:00

Chinese stocks are over-amplified according to what U.S. markets are doing,in David Chao's view.Mr.Chao,who is co-founder and general partner at venture capital firm DCM,says the stocks are perceived as higher risk.In reality,Chinese listed companies in the U.S. are just as transparent as U.S. companies.They have to follow the same rules.
Chinese entrepreneurs and management are learning day by day.China is characterised by its 500 million Internet users and the burgeoning rise of their middle class.They are starting to spend money.That's a great opportunity.We have a local team in China,and also teams in Japan and the U.S.That's the best way to do it,Mr.Chao believes.
DCM invests in mostly early stage companies in core technology sectors such as Cleantech;Components;and Software and services.Some of its projects include About.com,Pay Cycle and RenRen(RENN).

Advantage View:Market Thoughts From UBS

2011-09-28T19:10:00.000-07:00

We have a dichotomy in the market:1.We need to see better macros,and 2.We need to see something better out of Euro policy makers.Our bias is to believe that the longer this continues,the weaker the numbers will be;our bias is to the downside.
We need more clarity out of policymakers,both U.S. and European-but especially European.I'll believe it when I see it.We haven't seen any evidence they are taking concrete measures.Given the 17 parliaments,it's by definition a slow process.
We favor U.S. equities such as consumer staples and defensive cyclicals such as tech.There's a lot of risk with industrial cyclicals and energy.Materials and industrials are lagging.
Over the next year or two,China will see 7-8% growth.It's not falling off a cliff,but slowing.Near term,event risks out of Europe and decelerating GDPs get us quite concerned about global equity markets.Medium term,we are constructive on equities.
Jeremy Zirin is Chief Equity Strategist at UBS Financial Services.UBS offers wealth management,investment banking,asset management and business banking services to clients worldwide,as well as retail banking in Switzerland.

Leading Economist Analyses Euro Debt Crisis

2011-09-21T19:54:00.000-07:00

The swap lines that have been set up between central banks are positive,according to C.Fred Bergsten,Director of the Peterson Institute for International Economics.They show that the Federal Reserve and the Europeans are in communication.The European banks are in need of more capitalisation.This kind of thing buys time.
The European Central Bank has indicated it's not gonna let someone go belly-up,making a Lehman mistake.The Europeans have created this European Financial Stability Fund,which is an embryonic European Treasury.It's something like the U.S. Troubled Asset Relief Program.On the financial support side,I think they're moving in the right direction.
The strong Europeans deserve criticism.The strong Northern Europeans need to take expansionary measures.The Germans have an overwhelming interest in preserving the euro and the European Union.They are the ones who have the heft to make things happen.
The Europeans need to get on a clear path toward fiscal unification to go along with monetary union.In the mean time,the ECB needs to lend to governments and banks to keep the financial system afloat.A two-track strategy is needed,Dr.Bergsten believes.
C.Fred Bergsten has been Director of the Peterson Institute since its founding in 1981.Before that,he was Assistant Secretary of the Treasury for International Affairs from 1977-81 under President Jimmy Carter.

It’s the Jobs, Stupid! Part VI - TCW Asset Management - September 6, 2011

2011-09-14T20:19:00.000-07:00

It’s the Jobs, Stupid! Part VI - TCW Asset Management - September 6, 2011

Assessing A Possible Greek Default

2011-09-14T19:42:00.000-07:00

The consequences of a Greek default are being gauged by thought leaders in world financial capitals.Komal Sri-Kumar,Chief Global Strategist at TCW,says that,if Europe crashes,you're looking at the banking system being under very severe strain.As long as that is unknown,I think you're looking at a bit of trouble here.
Moody's,the ratings agency,downgraded the creditworthiness of two of France's three largest banks,Societe Generale and Credit Agricole,because of their exposure to Greek debt.The third bank,BNP Paribas,escaped the demotion.
You cannot just have Greece defaulting and everybody else doing fine.Greece defaulting will cause a series of defaults.If that happens,the impact on the U.S. economy and market will come from the financial system.It's gonna be even more difficult to get a mortgage in the U.S. because the Federal Housing Finance Agency is suing the big banks.
Dr.Kumar has said he believes we are already in a recession.He's staying with high grade fixed income for the next 2-3 months;after that,it's defensive stocks.
TCW,the Trust Company of the West,offers institutions and individuals a broad range of investment strategies.Since 1971,it has been committed to serving its clients through fundamental research and superior customer service.

Newsletter Publisher Sceptical of Euro Fund

2011-09-07T19:55:00.000-07:00

Mark J. Grant,publisher of the "Out of the Box" newsletter,which is read daily by some 5,500 financial institutions,is sceptical of efforts to resolve the European debt crisis.It's a solvency issue for the banks,Mr.Grant said.They have 4.1 trillion dollars of debt to roll over.The response has been that we don't need to recapitalise the banks.
The European Financial Stability Fund,or EFSF,is a convoluted effort.It is virtually impossible to come up with any solution.There is not money enough to support this effort.There is not enough available to bail out Italy and Spain.
The markets are all interconnected at the international bank level.Any blow-up in Europe could have a substantial impact on the U.S. banking system.The European Union and China are manipulating the currency market,Mr.Grant believes.
Mark J. Grant is Managing Director of Corporate Syndicate and Structured Products at Southwest Securities.He has also written a highly regarded book,"Out of the Box and Onto Wall Street."