Tuesday, June 30, 2009

Navios Maritime Notes Improvement

Navios Maritime continues to grow its fleet of dry bulk freighters,buying four new ships for 43 million dollars.The Greece-based firm ships iron ore,foodstuffs and other commodities.Its CEO,Angeliki Frangou,says she is very bullish on China-in roads and railways and every other way.The Baltic Dry Index,which measures demand for shipping,had gone down as low as 650;recently it went back to over 4,000.The BDI had been over 9500 last June.Navios Maritime's trade is based on the emerging markets.It is not based on the consumer at all,Ms.Frangou explained.

Procter and Gamble Gets New Chief

Tomorrow Robert McDonald will assume the post of CEO at Procter and Gamble.He has worked at PG for 29 years,and most recently was Chief Operating Officer-a post he is eliminating upon his accession to the top job at the company.He will also be assuming the role of President when Susan Arnold leaves in September.Mr.McDonald said he wants to streamline the firm's management,creating a simpler,flatter and more agile organization.This is a priority because it reduces cost,improves productivity and enhances employee satisfaction,the new CEO pointed out.
Mr.McDonald will be leading 138,000 workers in more than 80 countries.The company's sales exceed 80 billion dollars a year.Mr.McDonald,56 years old,succeeds A.J. Lafley,who served for nine years.Procter and Gamble operates in three divisions:Beauty,Household Care and Health and Well-being.The company's brands include Tide,Sure and Duracell.

Friday, June 26, 2009

Health Uncle:Farrah and Michael

America invented celebrities.Now we must deal with the loss of two in one day,shedding all the light we can on them for the common good.Farrah Fawcett,an actress whose alluring poster became the most famous of all time,went on to serious roles and battled cancer with the intensity of a commando-even before she contracted it herself.Michael Jackson knew the stresses of child stardom,but became the master of self-reinvention,carrying it to an extreme,in the estimation of many,by literally altering his face,even as he composed and performed at the highest level.Their boldness in the grip of adversity and the mundane grasp of this life set new standards for the world.
At age 50,Michael Jackson was in the prime age range of 45-55 for sudden cardiac arrest.It can be caused by many different factors:stroke,drugs,blood clots,aneurysm.In sudden cardiac arrest,the heart stops beating,and starts quivering,which is known as ventricular fibrillation.Unless the heart is restarted within a few minutes,the patient goes into a deep coma and dies.Loss of consciousness is immediate in sudden cardiac arrest.Drugs can cause it by constricting the blood vessels or stopping breathing.Family friend and attorney Brian Oxman said the whole Jackson family was concerned about Michael's taking excessive medications.This is what I feared was going to happen,Mr.Oxman remarked.
Michael Jackson's friend Celine Dion noted that since he was little,he's under pressure.I think he lived under pressure all the time,she said.He needed to be surpassing even his own self.If you only live under pressure,he didn't have the balance,Ms.Dion feels.Another friend,Cher,said she didn't relate to him in his later years-his behavior was so strange.He was a great teenager:optimistic and adorable,but not confident.He was a soft spoken boy always,Cher recalls.Cher also remembered the awesome strength of her friend Farrah Fawcett in the face of cancer.She was never sure Farrah wouldn't beat it,she was so resilient.
Two American legends died yesterday.Their lives and deaths were as varied as they were fascinating.Their spirits outshone the notoriety they shared.

Tuesday, June 23, 2009

Professor Supports Financial Reforms

The worst financial crisis since the Great Depression of the 1930s has ignited a big reform process.The proposed reforms would grant significant new powers to the Federal Reserve and the Treasury Department.They would touch every aspect of the financial services industry.The Federal Reserve would be in charge of systemically important firms,which would have to hold more money in reserves to cover losses.There would be supervision of derivatives.Consumer financial protection would be provided by a new agency.Laura Tyson,a professor at the UC Berkeley Haas School of Business,says she thinks the proposed reforms would addree many of the sources of the financial trouble in the world.They actually fill gaps and address systemically important institutions,whether banks or non-banks.I agree that consumer products and financial services are increasingly difficult to understand,Dr.Tyson said.One of the things we have learned is there are institutions taht pose systemic risk.Having a person who supervises them makes sense.The Federal Reserve and Treasury have been working together in this crisis.You're gonna have to have this kind of partnership,Dr.Tyson feels.

Focus on Regulatory Reform:The Financial Future

A lot of concern centers on the proposed granting of powers to the Federal Reserve for the monitoring and control of systemic risk.The Fed would have to get Treasury Department approval for spending large amounts of money during crises.At such a time,although Treasury is involved,it is very important that the Federal Reserve preserve its independence and accountability for price stability and stable growth,Treasury Secretary Timothy Geithner told the Senate Banking Committee last week.Central banks around the world have traditionally policed systemic risk.Proposed changes to the Fed's role are modest.The Fed chairman would still be accountable to Congress.Our solutions focus on the central causes of the financial crisis.Conservative constraints on risk-taking will mitigate the too big to fail hazard.There is no conflict between the Fed conducting monetary policy and policing systemic risks,Mr.Geithner said.
A lot of things contributed to this crisis,Mr.Geithner explained.Future crises will require a study of how macroeconomic policy contributed to them.We need to be realistic in recognizing how difficult it will be to anticipate future risks.The critical failure of policy was in not imposing constriction on leverage in the good times.The Fed has a better feel for financial markets than any other government entity.
We're still in the midst of a challenging recession on a global scale,and we want to be able to respond to future risks,so Treasury should retain any money repaid to it by financial institutions,Mr.Geithner asserted at the Senate hearing,wearing a charcoal suit,white shirt and burgundy tie.He seems to be gaining the respect even of Republicans who doubted his suitability for his position.The gravity of the reform process was clearly evident in the atmosphere of the hearing.You could feel the weight of the occasion on everyone's shoulders.Would the Federal Reserve lose its independence under the reforms,or would the Fed be too powerful? No one wants to disturb the delicate balance of the financial regulatory bodies,but the wheels of government are rolling down this path of reform,and there doesn't seem there is any chance of stopping them.

Friday, June 19, 2009

Health Uncle:Work and Stress

New cases of depression are often brought on by high stress jobs,a BBC News study suggested.Those subjected to the lack of control,long hours,deadlines and high volume of work that characterizes high stress jobs are twice as likely to develop depression or anxiety.During a one year study of 1,000 32-year old New Zealanders,45% of new cases of depression and anxiety were attributed to high pressure work environments.The surgeons,police, journalists and others were previously healthy.Ten percent of the men and 14% of the women study participants reported new cases of depression or anxiety.It is believed that fatigue,lack of sleep and stress hormones resulting from work may have contributed to the cases.The more control workers feel they have,the less likely they are to feel severe stress.
Pause for a moment.Make that moment yours.Have a peppermint or remember something funny.The smallest things can relieve stress and safeguard your mental and physical health.

Tuesday, June 16, 2009

BlackRock To Enlarge

BlackRock is purchasing Barclays Global Investors,which is comprised of the iShares investment products.BGI manages about 1.5 trillion dollars-or about half the exchange-traded fund industry.When the deal is consummated,BlackRock will be the largest money manager in the world,with more than 2.7 trillion under management.That is more than the Federal Reserve manages.Consolidation of financial firms is a typical response to crises.
Barclays PLC,the British bank which owns BGI,will hold on to a 20% stake in it.BlackRock is itself part-owned by Bank of America and PNC Financial Services Group.Laurence Fink is CEO of BlackRock.

Positives and Negatives

The cyclical positives and secular negatives are in a tug-of-war,in the opinion of Bob Doll,Vice-President and Global Chief Investment Officer of BlackRock.The market is acting a little tired.Volume has shrunk some.Maybe we take a little pause here.I think we'll see a thousand on the S and P-maybe the low hundreds-first,Mr.Doll said.
We are of the view that the recovery will be sub-par,Bob Doll stated.Equities are O.K.,but we're not going to have the normal recovery,given the deleveraging overhang and the reluctant consumer.As for inflation,a lot of the interest rate rise we've been seeing is plain old normalization of rates.The velocity of money has not yet picked up.We have all kinds of unused capacity in areas such as manufacturing and labor,and we have to fill those up before inflation becomes a problem,Bob Doll maintained.

Friday, June 12, 2009

Health Uncle:Swine Flu Update

Swine flu,or H1N1,hasn't disappeared-far from it.Yesterday,the World Health Organization declared a flu pandemic.That means the virus is spreading in at least two regions of the world.It doesn't mean the illness is any more severe.Dr.Margaret Chan,head of the WHO,said the declaration of a pandemic places us in a strong position,but it also creates a need for advice and reassurance.
There has been a sharp rise in cases of H1N1 in Chile,Japan,the U.K. and Australia,but vaccine development is well underway,and the world is better prepared to fight a pandemic now than ever before.It is the first pandemic in 41 years;however,the death rate is far less than for regular flu-perhaps because it is mainly affecting young people.On the other hand,Dr.Chan reminds us that,like all influenza viruses,this one can change the rules,without rhyme or reason,at any time.All the more important,then,for us to get a good night's sleep,as this bolsters the immune system.

Tuesday, June 9, 2009

Starwood Likes TALF Prospects

Barry Sternlicht,Chairman and CEO of Starwood Capital,says he thinks everyone's pretty optimistic about Commercial Mortgage-Backed Securities,or CMBS,in the TALF program.I think we're closer to the bottom of the residential side,Mr.Sternlicht observed,so now we can focus on the commercial side.The commercial real estate market is gonna lag the economy.Companies are gonna have to be confident before they get back in.This recovery is gonna be longer,deeper and broader than the Resolution Trust Corporation cycle of the 1980s.There still isn't any debt,Mr.Sternlicht noted,though TALF will encourage some lending.
When we buy land,we're doing it unleveraged,Mr.Sternlicht revealed.We're buying debt in property.There's one in Las Vegas we're looking at,and something in Brazil right now.You've got to be patient.The bid-ask spreads are huge,Mr.Sternlicht feels.

A Question of Balance

Federal Reserve Chairman Ben Bernanke,whose four-year term expires in January,appeared before the House Budget Committee last week,assessing the shape of the economy.The Targeted Asset-backed securities Loan Facility,or TALF,has helped open up lending,Mr.Bernanke said,and he is confident that TALF carries minimal risk.As well,the recovery rate for Troubled Asset Relief Program,or TARP,funds should be excellent.We need to restore ourselves to a more balanced fiscal path,however.
Currency and commodity prices are factors in inflation,Mr.Bernanke pointed out,and will be watched carefully.Most indicators point toward stable inflation.There is no sign of a wage/price spiral.Picking a time to remove accommodation,or Federal Reserve actions,is tricky,but monetary accommodations can be unwound,and the decision can be made with political independence.The increase in federal borrowing has been offset by a decrease in private borrowing.
The fear of deflation has receded somewhat,Mr.Bernanke told the House Budget Committee.Retaining the confidence of the financial markets requires that we as Americans take action now to try and restore the fiscal balance.Financial institutions and markets do remain under some stress,but those banks required to raise new capital have made substantial progress.
We need to be on a path of spending and tax measures to cut debt,Mr.Bernanke feels.The stimulus program will have an effect on jobs for two to three years.When the time comes,we will need to raise interest rates,as the Fed is strongly committed to price stability.Q2 economic growth could be negative as inventories are worked off,but the Fed will not monetize debt.Businesses remain cautious and continue to reduce the work force,as the unemployment report on Friday indicated.Overall,Mr.Bernanke,wearing a gray suit,white shirt and red tie with a gold pattern,was sounding a note of cautious optimism,cognizant of the threat of deficit spending to the economy in the long term.

Friday, June 5, 2009

Health Uncle:Triathletes Face More Risk

Triathletes are at about twice the risk of sudden cardiac death as marathon runners,according to a Minneapolis Heart Institute study.Several hundred thousand Americans take part in the grueling triathlon event-consisting of swimming,biking and running-each year.Around 15 of every million participants will die suddenly during competition,as opposed to four to eight deaths per million marathon runners.Most of the triathlete heart attacks occur during the swimming portion of the event.Swimming in a natural body of water is more strenuous than in a pool,says Dr.Kevin Harris,a cardiologist at the Institute.The triathletes often just sign up for the events without having had a heart check-up.Many of them are not properly conditioned for these difficult competitions,Dr.Harris points out.Triathlons are becoming increasingly popular as charity fundraisers,and professional events are frequently televised on weekend afternoons,including the Ironman series,stoking the imaginations of amateur triathletes.

Tuesday, June 2, 2009

Economists Gauge the Prospects

A survey of economists conducted by the National Association for Business Economics shows that around 74% of them think the recession will end in Q3,while 19% think Q4 is more likely.A further 7% look for a Q1 2010 conclusion.The economists see the unemployment rate for 2009 averaging 9.1%,though some feel it could go as high as 10.7% in Q2 of 2010.This high unemployment will occur even if economic recovery begins,as companies will refrain from hiring until it is a certainty.The May unemployment report will be released on Friday,putting a question mark on the durability of the week's market activity.

UCLA and Medicine

UCLA's new medical center is already counted among the world's best,Mr.Broad says.The university's medical and life sciences campuses have expanded tremendously in the past few years.They've got great people and a culture that promotes an astounding level of interdisciplinary collaboration,he notes.The Center of Regenerative Medicine & Stem Cell Research at UCLA also bears Mr.Broad's name.He is also effusive about the community beyond UCLA's boundaries.It's worth noting,to Mr.Broad's mind,that Los Angeles hosts a unique regional network of first-rate hospitals,research universities and biotech/biomedical enterprises that fill the horizon in every direction.
That sort of thing happens a lot around here,Mr.Broad muses.Almost without its knowledge or permission,the city of Los Angeles-the Original and Continuing Work In Progress-has become one of the world's great cities,headquarters of the Pacific and the leading exporter of ideas to the rest of the world.Yet if UCLA weren't here,Eli Broad speculates,he's not sure they'd have the intellectual capital they need to be the great city they are today.By concentrating his giving on UCLA,Mr.Broad has ensured his wealth will have a multi-generational impact for urban enhancement.

UCLA and the Arts

Businessman Eli Broad feels that UCLA probably has the best arts school in the country-a distinguished faculty with a student body to match.Could you have the best arts school just anywhere,Mr.Broad asks? No.Does the fact Los Angeles is home to the second largest number of professional artists in America have anything to do with that outcome? You bet,Mr.Broad asserts.The UCLA Art Center bears Eli Broad's name.He is a leading collector of modern art.

Eli Broad:Focused Philanthropist

Eli Broad,founder of SunAmerica and co-founder,with Kaufman,of KB Home,has found in University of California Los Angeles an institution that unites his interests in the visual arts,medical science and public education.To Mr.Broad's mind,UCLA is inextricably linked with Los Angeles.Which came first,UCLA or Los Angeles? Actually,Mr. Broad says,he has no idea.They're stuck together,co-dependent,inseparable.Why don't we just count our blessings,the businessman asks?
Everywhere you look at UCLA,Mr.Broad observes-engineering,architecture,law,performing arts,the B-school,the college-you're watching public education at its finest.You can witness the multiplication of knowledge.You can feel the engine operating at full throttle.You know you're at the center of gravity of this city,Mr.Broad stated.