Eight Tips for 2008 -- Darling Fired, UBS Sold: Matthew Lynn
Dec. 27 (Bloomberg) -- Shortly before the 1929 stock-market crash that ushered in a global recession, U.S. economist Irving Fisher made a rightly celebrated forecast: ‘‘Stock prices have reached what looks like a permanently high plateau.’’
That should be enough to warn anyone off making predictions, particularly where finance and business are concerned. Still, we are stuck in some quiet space between Christmas and New Year, so here are a few things that might happen in 2008.
One: The dollar recovers.
Dollar bulls were about as easy to find in 2007 as a Led Zeppelin reunion ticket. The tumbling dollar was one of the big financial stories of the year. But the laws of economics haven’t been repealed quite yet. They tell us that after a currency is devalued, exports pick up, imports decline, and the trade deficit starts to shrink. We’ll see that happen in 2008, and by the end of the year, the currency markets will have noticed, and started pushing up the dollar again. Pretty soon, everyone will be describing the U.S. as the new Germany -- an export powerhouse with huge trade surpluses, and everyone fretting about how they can get consumers shopping again.
Two: Europe gets a free airline.
The three most powerful words in marketing are ‘‘new,’’ ‘‘improved’’ and ‘‘free.’’ That third one is the best of all. The ‘‘free’’ culture of the Internet is spreading into the real economy. Some newspapers are now free. So are broadband deals. It won’t be long before someone launches a free budget airline. Plenty of flights are sold for a fiver. So why not get rid of the token charge most of the budget airlines now ask for? You can give the flights away and make the money on car rentals, baggage allowance, and onboard cups of coffee.
Three: Alistair Darling gets fired.
The U.K. economy is likely to face its toughest year in more than a decade. The housing market looks weak, the government will be forced to turn off the spending taps, and London’s financial district is facing big layoffs. Somebody will have to take the blame for that, and Prime Minister Gordon Brown, even though he spent the last 10 years as chancellor, certainly isn’t going to volunteer. Instead, his hapless replacement as chancellor, Alistair Darling, who is already ensnared in the Northern Rock Plc fiasco, will take the rap. And his successor? Brown’s chief crony, Schools Secretary Ed Balls.
Four: The Facebook IPO tops the bull market.
The social-networking Web site Facebook Inc. has become one of the hottest properties on the planet. Back in October, Microsoft Corp. paid $240 million for a 1.6 percent stake in the business, valuing the whole thing at $15 billion. If it stages an initial public offering late in 2008, expect Facebook’s value to have multiplied several times since then. Amid a frenzy of wildly bullish predictions, and with stock markets surging again, its value will go to $50 billion or more. Years later, however, we’ll look back at the Facebook deal as the top of the 2002-2008 bull market.
Five: UBS gets sold.
In soccer, there is a useful phrase: ‘‘Form is temporary, but class is permanent.’’ In European banking, there is no more class act than UBS AG. Its form, however, has been terrible. The Swiss bank has been forced to write off $10 billion in losses on subprime investments. With a burnt-out share price, UBS looks like a bargain. It recently raised fresh capital from an ‘‘unidentified Middle Eastern investor.’’ Why remain ‘‘unidentified’’ unless you plan to raise your stake further? Don’t be surprised if UBS is owned by one of the oil-rich sovereign wealth funds by the end of 2008.
Six: Bring back the peseta.
For years, people have been warning that Spain’s massively overheated property market is a catastrophe waiting to happen. We have seen the wobbles already. In 2008 we’ll see the crash. The trouble is, there won’t be anything Spain can do about it. The European Central Bank didn’t stop prices from soaring and it won’t stop them from plummeting either. The result? The Spanish will start to wonder if handing over control of their currency to Frankfurt was such a good idea after all.
We have already seen campaigns in Italy to bring back the lira. By the end of next year, we’ll see campaigns in Spain for the return of the peseta.
Seven: Paris gets the 2012 Olympics.
The least surprising news of 2007? That was the soaring cost of the 2012 London Olympics. The bill will rise to more than 9 billion pounds ($18 billion), triple the original estimate. And there are still four years to go. At the current rate of price inflation, the Olympics will soon be devouring the entire British economy. In 2008, Londoners will wake up to the madness. French President Nicolas Sarkozy will step in with an offer to take the games back. The reaction? Londoners will breathe a sigh of relief, start muttering ‘‘Merci, merci’’ and tell him Paris is welcome to the circus.
Eight: Yet more Greenspan predictions.
To coincide with the paperback of his memoirs ‘‘The Age of Turbulence,’’ former Federal Reserve Chairman Alan Greenspan will return to the lecture circuit and the television studios with a series of nerve-shaking predictions. The bull market? It’s finished. The dollar? Kaputt. A new Ice Age? It’s imminent. Fluffy bunnies from Mars? They are about to invade our planet. Well, if big Al says it, it must be true.
TAIPEI, Taiwan (AP) -- Taiwan's High Court on Friday cleared opposition presidential candidate Ma Ying-jeou of graft charges, rejecting an appeal by prosecutors.
The decision clears the way for Ma to represent the Nationalist Party against Frank Hsieh of the ruling Democratic Progressive Party in Taiwan's March 22 presidential elections.
HONG KONG, Dec 28 (Reuters) - China will push a long-waited reshuffle of the country's telecoms industry in 2008, creating players that operate both wireless and fixed-line services to address unbalanced competition, state media cited the country's top telecoms regulator as saying.
An overhaul of the sector, dominated now by four players that have evenly split mobile and traditional fixed-line services licenses between them, is also expected to precede the issuance of licenses to offer faster third generation services, which will represent a boon for equipment vendors such as Motorola.
Industry sources have speculated for more than a year that Beijing intended to split up China Unicom's <0762.HK> wireless networks and hand them off to fixed-line players China Telecom <0728.HK> or China Netcom <0906 HK>. But that, and other proposals have been dogged by infighting and local interests, the sources say.
Now, Beijing realises that full service players serve the industry's best interests, the Xinhua News Agency reported. China Telecom, defying the market's slide on Friday, climbed nearly 2 percent in the morning, though Netcom -- which some analysts fear may lose out in any sector revamp because it lags its rival in market share -- slid 1.5 percent.
China Mobile slid 1.2 percent, reflecting Asian stock market weakness after the assassination of Pakistani opposition leader Benazir Bhutto, which some fear will spur regional instability. "Operating a single type of business not only goes against technology trends, it has also fostered serious imbalances in the telecoms industry's development,"
Minister for Information Industry Wang Xudong was cited as saying by Xinhua news agency late on Thursday. "A full-service business model is now the telecoms industry's most reasonable one."
Shares in mainland fixed-line telecom operators had surged since the beginning of this week after Xinhua reported separately that the firms would get licenses for mobile services "at an early date".
The Xinhua report, published over the weekend, quoted an official from China's Ministry of Information Industry and suggested that long-awaited industry restructuring would start soon.
Rio Tinto again rejects BHP Billiton offer in shareholder letter
Thu Dec 27, 5:03 AM ET
SYDNEY (AFP) - Anglo-Australian mining giant Rio Tinto on Thursday reiterated its opposition to a takeover proposal from BHP Billiton in a letter to shareholders outlining latest developments in the bid.
Rio Tinto chairman Paul Skinner repeated his board's belief that BHP Billiton's three-for-one share offer "significantly undervalued Rio Tinto and its prospects".
Skinner pointed to Rio Tinto's growth prospects in iron ore and copper, as well as its position as a global leader in aluminium.
"Together these are positioned to capture strong growth in demand in the developing economies, including China and India," he said in the letter released to the Australian Stock Exchange.
Skinner said he was "pleased" to inform shareholders that the British Takeover Panel had ruled BHP Billiton must either announce a firm intention to make an offer for Rio Tinto by February 6.
The ruling, given Friday, came after Rio Tinto successfully invoked Britain's so-called "put up or shut up" laws, which allow a company to put a time limit on potential buyers to clarify their position during a takeover bid.
BHP Billiton responded to the deadline last Sunday, saying it was still seeking talks with Rio Tinto and had not yet decided on whether to proceed with a formal bid.
A merger between BHP Billiton and Rio Tinto, the world's largest and third largest miners respectively, would create the planet's largest producer of coking coal, thermal coal, copper and aluminium.
Customers in China, whose economic boom has fuelled demand for resources, have expressed disquiet at the prospect of the mega-merger, fearing it would give BHP Billiton too much power to set prices.
In Hong Kong, the South China Morning Post, citing unnamed sources, reported last Monday that China had sanctioned state-owned companies to examine possible strategies to block the proposed deal.
Rio Tinto shares were up 3.27 dollars (2.84 US) or 2.4 percent at 135.71 and BHP Billiton shares rose 64 cents or 1.6 percent to 41.16 dollars in late afternoon trading on a rising Australian market.
Rio in good shape without BHP, chairman tells wavering investors
Jamie Freed December 28, 2007
NEARLY two months after his board swiftly rejected a $US150 billion takeover proposal from BHP Billiton, Rio Tinto's chairman, Paul Skinner, has reassured investors his company remains focused on delivering its potential and on maximising value.
In a letter to Rio shareholders released to the stock exchange yesterday, Mr Skinner said he was pleased to inform them of the British Takeover Panel's decision to force BHP to make a formal offer by February 6 or walk away for at least six months.
He noted that although the deadline applied only to an offer for Rio's London-listed shares, BHP would be unable to take control of one arm of its dual-listed structure without having made an offer to shareholders of both entities. About 77 per cent of Rio's shares are listed in Britain, home to Mr Skinner, a former managing director of Shell.
Mr Skinner takes an active interest in Rio's management and unlike his BHP counterpart, Don Argus, takes part in results briefings alongside the chief executive, Tom Albanese, and the finance director Guy Elliott.
Convincing Rio's mainly London-based investors that the BHP offer undervalues the company has been a task undertaken by Mr Skinner over the past two months. BHP has offered three of its shares for each Rio share, but some analysts believe it will take a ratio closer to 4:1 to obtain the support of the Rio board.
Rio plans to continue its charm offensive leading up to the February 6 "put up or shut up" deadline, which coincides with the release of BHP's half-year financial results. Rio, which has traditionally reported its earnings before BHP, has elected to release its full-year results on February 13. Rio's results will include figures from its enlarged aluminium division for the first time, following its $US38 billion acquisition of Canada's Alcan.
BHP's chief executive, Marius Kloppers, has so far not revealed whether BHP plans to raise its proposed offer - or whether it will even make a firm offer before the Takeover Panel deadline.
"BHP's offer has so far under-whelmed the market," the Fat Prophets analyst Gavin Wendt told clients this month.
"We believe it's unlikely that the company will walk away, as that would be seen virtually as an admission of defeat.
"We don't think, however, that BHP will want to put its current proposal on the table, because the market hasn't liked it.
"If BHP's seriously interested then it's going to have to come up with a higher offer, as the market has made that perfectly clear, as has Rio."
Iran and Malaysia signed a $16 billion agreement to develop two Iranian gas fields, state-run television reported Wednesday, describing the deal as the largest energy contract in Iran.
Iran's Pars Oil and Gas Company (POGC) and Malaysia's SKS Ventures signed the multibillion dollar contract to develop Golshan and Ferdows gas fields in southern Iran.
The contract was formally signed by Ali Vakili, director of POGC, and Mokhtar Al-Bokhari, director of SKS Ventures, in the capital Tehran on Wednesday, according to the report.
"This contract worth $16 billion. Some $6 billion is for development of offshore and $10 billion for development of onshore gas fields for a period of 25 years," Vakili told the official IRNA news agency.
Iran's Oil Minister, Gholam Hossein Nozari, said the deal was a vindication of his country's efforts to counter pressures to isolate his nation.
"This is the biggest investment contract in the country's energy sector," the official IRNA news agency quoted Nozari as saying.
The multibillion dollar contract was signed weeks after China's biggest oil refiner, Sinopec, and Iran signed a $2 billion agreement on developing the Yadavaran oil field despite U.S. calls for sanctions over Iran's nuclear program.
China rejected U.S. complaints about the deal. That agreement, coinciding with U.S.-led efforts to pressure Iran with threats of tighter economic sanctions to rein in Tehran's nuclear program, drew a sharp rebuke from Washington.
Nozari said an economic boom in southeastern Asia has sharply increased its need for imported oil and gas and that the contract with Malaysia has to be seen in that light.
The reserves at the Golshan gas field, 65 kilometers from the southern port city of Bushehr, is estimated more than 50 trillion cubic feet of gas and it is expected to produce 2.5 billion cubic feet of natural gas per day.
The Ferdows' gas reserves is estimated at around 10 trillion cubic feet and it would produce more than 880 million cubic feet of gas on a daily basis.
Copyright 2007 AFX News Limited. All Rights Reserved.
Dec. 28 (Bloomberg) -- STX Shipbuilding Co., the first South Korean company to set up a yard in China, received an order from the Middle East to build four bulk carriers valued at 187.8 billion won ($200 million).
The 58,000-deadweight-ton vessels will be delivered by June 2011, the Jinhae, South Korea-based company said in a regulatory filing today, without identifying the buyer.
Shipping lines, including STX Pan Ocean Co. and Pacific Basin Shipping Ltd., have ordered more vessels this year to transport raw material to China, the world's biggest buyer of iron ore used to make steel. That has fetched South Korean shipyards record orders for a fifth year.
A total of $78.6 billion were spent in the first 11 months of this year for new bulk carriers, more than triple the $23.4 billion spent for all of 2006, according to London-based Clarkson Plc, the world's biggest shipbroker.
STX Shipbuilding climbed 3 percent to close the year at 50,000 won in Seoul. The stock has more than tripled this year, the fourth-biggest gainer among the 200 largest companies traded on South Korea's Kospi index.
“Men seduce women to get sex while women entice men for monetary gain. That’s the way it has always been the world over.”
The man’s version of events.
I Met The Most Beautiful Lady In MRT Yesterday
It was about 9pm yesterday. I was in City Hall MRT when a very beautiful lady entered my MRT cabin. She was very delicate features, porcelain skin and the most beaming eyes I have laid my eyes upon. She was dressed in office wear (white blouse, black skirt) and it seems rather perculiar that she is dressed like so on a Sunday. The cabin was packed and there was barely space for new passengers. I was leaning against the glass partition next to the entrance door. There was a few space left in front of me and she stood right there, in front of me.
I was very nervous. This is the first time in my 27 years that I stood so close to a beautiful lady. She was, I guesstimate, 13.5 cm away from me. My heart was racing, for reasons i could not explain. Maybe it was dumbstruck. Maybe it was love at first sight. But I was mesmerized by her shimmering beauty.
I wanted to make small talks. But i don't know how. Nor do I have the courage to do so. Oh god please help me, i pray silently. Alas, after 30 secs of deep thoughts, I chickened out. You see, throughout my existence on earth, my life has revolved around jap animation, video games and internet surfing. I barely socialized in my free time. I am what they call a compulsively shy inadequate (CSI), or more popular known in popular folklore as ubergeek.
So i chickened out and decided to spend the rest of the MRT journey staring down at the ground (yes. I did not even have the courage to look upfront at her). Halfway through the journey, the MRT got more packed and she got closer to me (8.7cm?). But as you know, I have already decided to forgo this chance encounter and leave it as it is.
After we just left Orchard MRT station, the most scariest thing in my life happened. There was this guy who was standing behind her. He was middle aged, about in his 40s. Also dressed in office wear (white shirt, black trousers). He was moving nearer and closer to me as the journey progress. I thought he was weird but i thought nothing of it. In no time, he was virtually 3.2 cm away from the lady and 9.5cm away from me.
Suddenly (as i was observing his movements for some time now), I notice his hand inching closer towards the lady's back. Lo' and behold, soon he placed his hand comfortably on the lady's waist (similar to how a bf would place his hands around his gf's waist). I looked up at the lady (prob the first time i looked at her clearly since my first glance) and saw a change of expression (a sign of discomfort really), and she tried to move away but the guys keep on following her.
I thought to myself "Just shout at him to stop it, miss. There's so many people. Just do it." Alas, after 30 secs, she still doesn't do it. Instead, she closed her eyes and grimaced.
"Why? Why didn't you shout for help?" I thought. It was at this point that I realized that i had to do something. None of the other people on the train knew what was going on as it was very packed. Only I knew since i was so close to the scene.
I wanted to shout at him to stop... But i couldn't. I didn't dare. What if he beat me up? What if... Excuses ran through my mind like a coward swims in the sea. After 10 secs of hesitating, I still had not have the sense of mind to stop this insidious act of discomfort.
In a moment of madness, the words suddenly came out of my mouth "Hey, do you want to change places?" At this very moment, i swear i could see the tension around her air dissipate like dust in the solar system. Her grimace was gone and was replaced by a breath of relief. Without a word, she just move towards me and i made way to switch places with her. After so, i heard a "Thanks" whispered to my ears.
Somehow, I think the guy sensed that I knew what was going on and like the coward that he is, he moved away from us to the other cabin. So after he was gone, the lady just smiled at me sweetly.
OH MY GOD! you have no idea how i felt at that moment. I felt like Superman. Batman. GI JOE, Russell Crowe. All rolled into one superlicious fantastic four combination sensation.
I didn't know how to respond. So I just smiled shyly and looked down at the ground. Soon, i was at our destination, Novena. I looked up at her one last time and I still saw her smiling at me. I smiled back shyly again and just before I step out of the train, i said bye to her.
Oh man! You blew it you fool. Here you have the most beautiful lady smiling at you and you are walking away from here? But what can i do? I'm a CSI and I cannot make out more than 5 lines of sensible sentences in a conversation with a girl.
With a heavy heart, i walked out of the train, condemning myself to a life without love. Just at this moment, i sense a warm touch to my arm. I turned around and I saw her with her outstretched hands over my arm. She had also stepped out of the train.
What is happening? I thought.... oh no.... what do i do next?
You could imagine the tense situation. A girl holding onto a guy's arm, both looking at each other, not knowing what's next, with the MRT leaving both of them behind.
After 3 secs of intense pressure, she spoke. "Could you go with me to the station control and make a witness report to what happened just now?" Phew.... I was relieved. Of course I agreed. So again, the shining smile on her face appeared again and we soon proceeded to the station control to make the report.
There, we did not talked to one another. I just explained what happened to the officer and after they took my testimony and contact details and told me i could go. Just before I left, the lady suddenly asked me if she could have my contact details.
OH MY GOD! She's asking for my contact details. Heart... beat... running... fast....
Then she said she wanted to treat me to lunch for my help. So shyly and obligingly, I provided her my contact details and she thanked me and said she will be in contact with me soon. I smiled back and bid my goodbyes to her as i walked away. As i walked away, i swear i could still see that beautiful smile of hers.
HAPPINESS! I truly learned the true meaning of that word at that very moment.
So when i reached home yesterday, my mind was all about that incident. I couldn't watch my naruto or play my wow. I barely could sleep. All the time, the images of that incident just keep on replaying in my mind.
So here i am now, replaying the incident YET AGAIN as i write this entry. I apologize for this very long entry but i am sort of lost at this moment.
What should I do? What if she called? What should I say? How should I respond? Why didn't they teach how to handle this sort of situation in school?
I am lost. truly lost, like a feather is a featherduster.
*********************************
The woman’s version of events.
I Met The Most Nerdy Guy in MRT Yesterday.
It was about 9pm yesterday. I was in City Hall MRT when I entered my MRT cabin. I was dressed in office wear (white blouse, black skirt) after meeting a client (I am an insurance, MLM and housing agent). The cabin was packed and there was barely space for new passengers. I stood near the glass partition next to the entrance door. There was a few space left in front of me and I noticed a guy near to me.
This is the first time in my XX years (Girl age is secret hokay) that I stood so close to the most nerdy guy in the MRT. He was, I guesstimate, 13.5 cm away from me. My heart was not racing certainly, for reasons i dun need even explain. Maybe it was dumbstruck. Maybe it was gross at first sight. But I was not mesmerized by his nerdy look.
I dun want to make small talks and throughout the journey. This guy was staring down at the ground instead of looking at me. Halfway through the journey, the MRT got more packed and I moved closer to him (8.7cm?) and enjoy tormenting him.
After leaving Orchard MRT station, the scariest thing in my life happened. There was this guy who was standing behind me. He was middle aged, about in his 40s. Also dressed in office wear (white shirt, black trousers). He was moving nearer and closer to me as the journey progress. I thought he was weird but I thought nothing of it. In no time, he was virtually 3.2 cm away from me and 9.5cm away from the nerd.
I felt something touching my back and it was the guy's hand. The nerd looked at me and I gave him a " Are you going to help me, you bloody nerd" look and I tried to move away but the fat arse keep on leaning his body towards me.
None of the other people on the train knew what was going on, as it was very packed. Only the nerd knew since he was so close to the scene.
Just as I was resigning myself to fate, the nerd suddenly said, "Hey, do you want to change places?" At this very moment, I signed a breath of relief. I move towards me and switch places with him. I whispered " Thanks" to his ears but he did not heard what I said inside my heart. Thanks you stupid nerd, now the fatso ate my tofu. Chiu ish so WOLS".
Soon the fatso move away and I smiled at him sweetly. Maybe can sell him some MLM, insurance or property next time
I think he felt like he was Superman. Batman. GI JOE, Russell Crowe. All rolled into one supercilious fantastic four combination sensation.
He smiled shyly and looked down at the ground.!@#@$% What the fark is this guy doing. He just enjoyed looking at the ground more. Maybe he sells rocks?
Soon, he was about to alight at Novena. He looked up at me and I smile at him and he smiled back shyly again and just before he steps out of the train, he said bye to me.
I walked out of the train and stopped him. The nerd looked stupidly at me and I told him I want to make a report about the incident in the train. Of course He agreed. So again, I smiled at him again (Must charm him ma)
He explained what happened to the officer and after they took his testimony and contact details and told me I could go. Just before I left, I asked him for his contact details.
Then I said I wanted to treat him to lunch for his help but actually I want to sell him products la.
HAPPINESS! I truly learned the true meaning of that word at that very moment. Can make money since he is so charmed by me.
I am really evil. Want to sell products to him. What should I do? Should I call him? What should I say? How should I respond?
China's textile industrial output for 2007 is forecast to reach 3.05 trillion yuan (US$416.8 billion), a 21.9 percent increase year-on-year, according to a report released on Thursday by the Textile Industry Association.
Large scale textile enterprises, with annual sales exceeding two million yuan, were expected to realize profits of 115.2 billion yuan this year, a 32 percent jump over the previous year. The export value would reach US$177.2 billion, a 20.1 percent increase year-on-year. This was compared with the import value of US$18.9 billion, which experienced a growth of 4.4 percent.
However, with the ongoing appreciation of the yuan and the textile export tax rebate reduction, the low-cost edge of Chinese textile products was gradually weakening.
The yuan broke through the 7.32 mark on Thursday afternoon to stand at 7.3186 yuan against one US dollar, up more than 6.6 percent accumulatively.
The yuan's appreciation was hitting the country's textile industry hard. According to an estimation by webtextile.com, every one percent rise in the yuan would cause two to six percent drop in textile commodity profit.
Price hikes of international crude oil and wool also put chemical fiber enterprises and the wool industry under huge pressure.
As the world largest textile exporter, China made tremendous efforts to extricate itself from these predicaments. These included further exploring domestic and overseas markets and counteracting the adverse impact of rising costs by technological innovation and industrial upgrading. In addition, developing countries in Asia and Africa had become a major engine for export growth, the report said.
Despite constantly rising oil prices and the continuous appreciation of the yuan, the export value of China's textile industry was expected to increase by 15 percent in 2008.
"Although the RMB appreciation is painful for the textile industry for the time being, it is hoped that the RMB exchange reform would help adjust export orders of the industry so that only the competitive could survive," said an industry expert.
…..Morgan Stanley’s bombshell. "During the fourth quarter, the firm recognized a total of $9.4 billion in mortgage related writedowns as a result of the continued deterioration and lack of liquidity in the market for subprime and other mortgage related securities since August 2007. Of this total, $7.8 billion represents writedowns of the firm’s U.S. subprime trading positions…"
Morgan Stanley’s CFO: "As you are aware, over the past year our trading group decided to short the subprime market. The traders were short the lowest tranche of the subprime securities with a notional value of approximately $2.0bn. The traders decided to cover the cost of the negative carry in the short position. To do so they went long approximately $14bn of the super senior AAA or BBB subprime securities we refer to as mezzanine. As the Credit markets declined dramatically, the implied cumulative losses in the subprime market "ate" (unclear) into the value of the super senior AAA tranche we were notionally long. As a result, not withstanding the short position, the implied losses of the notional long generated a major net loss when the position was marked-to-market. The loss was non-linear with the decline of the relevant ABS index, given the long/short structure of this particular trade."
Analyst question: "I know everyone is dancing around it, but I guess my question would be to help us understand how this could happen – that you could take this large of a loss? I would imagine that you have position limits and risk limits, as such. It behooves me to think that you guys could have one desk that could lose $8 billion?"
CFO: "Look, let’s be clear. One, this trade was recognized and entered into our accounts. Two, it was entered into our risk management system. It is very simple – it’s simple and very painful. So I’m not being glib. When these guys stress-lossed (tested) the scenario on putting on this position, they did not envisage in their stress losses that we could have this degree of defaults, right? It is fair to say that our risk management division did not stress those losses as well. It is as simple as that. There was a big fat tail risk that caught us hard, right? That’s what happened. Now, with hindsight, can you catch these things? We are not unique being long these positions, right? What is unique is that this was a trade that was put on as a proprietary trade and we have learned a very expensive and, by the way, humbling lesson."
Morgan Stanley’s stock was up 8% for the week, despite reporting the first loss in its 72 year history. Investors were apparently comforted with the news of a $5bn equity infusion from the China Investment Corporation (controlled by the Chinese Finance Ministry).
The marketplace should be petrified with the revelation of an $8bn loss on a single trade that was not "rogue" - nor did it apparently even circumvent risk management processes. Instead, it appears to be a "simple" case of a devastating failure in the models used to structure a highly leveraged "hedged" trade. At the heart of the issue were illiquidity and a collapse in the value of a leveraged position, in a development that is very much systemic in nature. As the CFO stated, the company is "not unique being long these positions." Morgan Stanley is quite fortunate that they do retain a strong global franchise in what remains a period of extraordinary Global Credit Bubble excess. They still enjoy the capacity to plug part of the hole in their equity base…..
Morgan Stanley’s CFO stated that the company was caught hard by "big fat tail risk." I don’t believe it was a case of "tail risk" at all. Devastating illiquidity and market losses were inevitable, only the timing was unclear. Broker/Dealer assets ballooned 140% in just four and one-half years to $3.2 TN. During this same period, the asset-backed securities market (including "private-label" MBS) inflated 120% to almost $4.3 TN. Myriad sophisticated structures, financial guarantees, liquidity agreements, and leveraging strategies were implemented to perpetuate the greatest financial Bubble in history. As with all great schemes of leveraged speculation, the minute the music stops collapse ensues. Underlying Acute Fragility is exposed with the inevitable reversal of speculative and leverage-based market liquidity.
To keep the music playing required increasingly egregious excesses – ever greater quantities of increasingly risky loans, structures and leveraging. The Credit Insurers came to play a critical role in perpetuating the Bubble. They could not resist the allure of easy "profits" insuring Wall Street’s creative "structured Credit products," while at the same time aggressively expanding their traditional guarantee business at the top of a Historic Credit Cycle. The Credit insurers destroyed themselves.
We expect further significant and imminent weakness in "structured Credit products" – certainly in the illiquid markets for CDOs and Credit default swaps (CDS). Keep in mind that the economy is only now succumbing to recessionary forces, and we’ve yet to experience the failure of a major financial institution in the U.S. There will be many, and it’s worth noting that Rescap’s CDS prices surged again this week. It’s amazing to watch the massive central bank liquidity injections inflate the value of government and quasi-government backed securities, while having minimal impact on the imploding market for Wall Street-backed securities. It’s impossible to rectify the damage from the bursting Bubble, and there’s today literally trillions of increasingly impaired Wall Street securities overhanging the debt markets.
Doug Noland is a market strategist at Prudent Bear Funds. Their website is www.prudentbear.com.
13 comments:
2007年12月28日
中铝之变
(来源：《经济》12月刊封面文章主题：中铝之变) 文/本刊记者 周政华
近年来，海外找矿的惊险之旅，成就了一批中国企业的崛起。中国铝业公司(以下简称中铝公司)就是其中的代表之一。位于北京西直门的中铝公司总部大楼，已经成为这个交通要冲之地的地标性建筑。
如今，中铝公司正在经历一场深刻的转变，目标直指世界一流的多金属国际化矿业公司。
中铝公司党组书记兼总经理肖亚庆在接受《经济》记者采访时表示，未来中铝将实现国际化和多金属化的战略转向。
据介绍，中铝公司未来将坚持加快铝、铜及稀有稀土工业的发展，坚持做强做大铝业，加快创办一流铜业，积极发展稀有稀土，有选择地发展其他产业，逐步使中铝由单一的铝金属向多金属国际化矿业公司转型。
眼下，中铝转型的故事还是刚刚开始。
铝业整合者
2000年6月20日，国务院发布了《关于调整中央所属有色金属企事业单位管理体制有关问题的通知》，决定撤销三大企业集团，其所属大部分企事业单位下放地方管理。
2001年，在原中央所属部分铝业企事业单位基础上成立了中国铝业公司。成立之初，成员单位有8个工业企业、2个施工企业、2个科研设计单位，资产总额350多亿元。
之后，中铝公司实现了跨越式发展。截止到2007年，中铝公司资产总额超过1900亿元。公司控股的中国铝业股份有限公司分别在纽约、香港、上海上市，企业信用等级连续三年被标准普尔评为BBB+级。
按照肖亚庆的讲述，在近期目标中，中铝公司将快速增加短缺产品的产能，重点是氧化铝、铝土矿和铜矿项目开发；在中期目标中，将有选择性进入电解铝和铝加工下游领域，在境外形成完整的氧化铝、电解铝和铝加工的产业布局，建立较大规模的铜矿开发基地；在长期目标中，中铝公司要成为国际矿业类领先的一流公司，融入全球市场体系，实施在全球范围内配置资源的国际化运营，广泛参与国际竞争。
铝业整合是实现上述目标的第一步。
2005年国务院公布了《铝工业发展专项规划》和《铝工业产业发展政策》政府将支持电解铝企业与上下游企业联合重组，鼓励铝电联营，提高产业集中度和企业竞争力。中铝公司则抓住这一机会，加紧开始整合铝业上下游资源。
中铝公司并购的第一站选择了西南铝业，这也是我国生产规模最大、技术装备最先进、品种规模最齐全的综合性特大型铝加工企业，同时也是高精铝材和军工配套制造及开发基地。2001年3月23日，中铝公司与重庆市政府就西南铝业股权划转达成协议，经过一年多的努力，西南铝业顺利并入中铝，成为其铝加工主业上的骨干力量。
在铝加工业方面，有较高知名度和实力的福建南平铝业下属的福建瑞闽铝板带有限公司成为中铝的目标。2004年12月19日，经过资产重组，由中铝控股50%的中铝瑞闽铝板带有限公司在福州成立。随后，中铝于2005年1月收购控股兰州铝业。
同时，中铝公司也在自行设厂扩大企业产能和规模。
2005年6月30日，中铝郑州年产能12万吨铝加工项目奠基开工。同年8月，由中铝控股的中铝河南铝业有限公司成立。随后成立的洛阳中色万基铝加工有限公司是中铝河南铝业的控股子公司，年产高精度铝板带箔17万吨，其中年产2万吨高精度宽幅铝箔。通过一系列并购，中铝的铝加工业务能力大大增强。
2005年，电解铝行业陷入低谷。中铝利用其在氧化铝市场上已经确立的优势，对电解铝企业展开大幅度的收购兼并，接连吞并了8家电解铝生产企业，在电解铝行业的地位空前提高，完善了自身的产业链结构。
今年上半年，中国铝业股份有限公司通过发行境内Ａ股及以换股的方式与Ｓ兰铝、Ｓ山东铝合并；7月，中铝采用换股的方式吸收合并了包头铝业，不久后还将收购连城铝业。
目前，中铝公司已成为全球第二大氧化铝生产商和第三大电解铝生产商。中铝公司在西南、东南、西北、东北、河南建立了铝材加工基地，占有全部国防军工产品和合金板材的市场份额，铝合金棒材、锻件的市场占有率也将达到80%以上。
在大规模的行业并购背景下，中铝依然保持了良好了财务状况。北京普蓝诺经济研究院研究员刘晓忠表示，从财务状况看，中铝的并购重组体现了显著的低成本扩展优势。
刘晓忠认为，相对于国际市场上普遍存在的门当户对的并购来讲，中铝并购的对象大都是规模相对适中的若干企业，后期整合的难度和复杂性会更大。能否把诸多单列的中小企业整合成一个有机整体，将直接考验中铝战略目标的实现。
进军铜业
中铝公司在大力兼并铝业公司的同时，也开始对铜行业积极布局。中铝多金属化的第一步选择了铜业。
目前，多金属矿业公司是国际矿业的发展趋势。从国际大公司的经验来看，单一的金属公司发展越来越困难。目前国际上主要的有色金属巨头，包括联合俄罗斯铝业公司和美铝，甚至以铁矿为主的力拓集团都在积极寻求多元化的发展路径。要占据全球有色金属市场一席之地，多金属化发展战略势在必行。
进入铜业，中铝公司的胜算有多大？
中铝公司自组建伊始，就确立了铝业、铜业和稀有金属三大板块的支柱地位。
今年9月25日，国务院国资委在北京钓鱼台国宾馆召开了中铝公司主业调整专家论证会。会上，专家们达成共识：国家需要铜，市场缺少铜，中铝公司完全具备整合国内铜业、又好又快发展铜业的优势条件，应尽快将铜列为中铝公司的主业之一，将中铝公司建设成为具有强大国际竞争力的大型综合性有色金属矿业跨国公司。
肖亚庆认为，中铝有良好的铜业发展基础，公司已有铜业科研院所、铜业技术中心和三大铜加工基地，掌握了秘鲁1300万吨铜矿资源，并积极跟踪数千万吨的国外铜资源。
据了解，中铝在国内外拥有多项铜矿勘探选冶项目，其中有一大部分具有相当的开采前景，中铝公司控股91%的秘鲁特托罗莫乔矿拥有铜资源量约1200万吨，为拟开发建设全球特大铜矿之一，铜资源量相当于国内铜资源总量的19%，预计年产铜金属规模可达约25万吨。
肖亚庆表示，如果中铝没有参股三大铜业公司，就不能说是完全涉足铜业。今年10月30日，中铝入主云南铜业(以下简称云铜)，为中铝在国内铜行业进一步扩张奠定了坚实的基础。
今年，中铝铜业整合迎来了高潮。10月30日，中铝增资扩股控制云铜集团49%的股份，成为其第一大股东。
云铜作为国内第三大铜业集团，实力雄厚。近年来，云铜在产能和资源上扩张十分迅速。预计到2009年，云铜的电解铜产能将达到104万吨，有望超过江西铜业集团公司和铜陵有色金属集团有限公司，成为中国铜业的老大。
据了解，收购云铜并非易事。在几年前中铝就已经开始与云南方面接触，经过22次协商，中铝公司以现金参股，实际注资近100亿元，终于拿下了云铜集团49%股权，后期将投入20个亿在云南发展铜深加工项目。
在收购云铜之前，中铝公司已经开始对铜行业进行积极的布局：2004年收购湖北大冶有色金属公司，2005年收购洛阳铜加工厂，重组上海有色集团，成立中铝上海铜业有限公司，并且以8.6亿美元收购了加拿大秘鲁铜业，获取了超过千万吨铜矿的勘探与开采权。
分析人士指出，中铝公司发展铜是先做两头，即资源和加工，中间环节则是另寻机会有条件发展。此次和云铜集团合作，就是完善铜产业链。云铜的铜精矿自给率差，而这恰是中铝的资源优势，中铝则需要云铜冶炼的技术，二者正好实现优势互补。
2006年中铝获取和控制铝土矿权24个，新增铝土矿资源量1.18亿吨，自采矿比例与2003年相比增长了109%。当年，国资委已经明确提出要加快中央企业调整重组。肖亚庆认为，这将有力推动有色金属行业联合、兼并、重组的浪潮，为公司进一步实施重组整合提供了难得的机遇。
另据了解，在完成对云铜收购之后，未来中铝有意投资近300亿元用于扩张铜业。根据目前的发展状况，中铝已经在与国内多家铜类企业进行接触。
海外扩张
11月，随着必和必拓合并建议的发出，国际矿业再次迎来新的垄断猜想。
矿业寡头垄断之势几成定局。目前，世界前50名的跨国矿业公司产值占全球矿业总产值的近6成。矿源不足正成为制约国内矿企发展的瓶颈。为此，“到海外找矿去”一时成为国内矿企共识。
随着中铝扩张步伐的加快，寻求国际化资源就成为中铝的当务之急。
目前，我国矿业“走出去”模式正逐渐从石油发展到金属矿，从采矿发展到风险勘探。中国有色集团、五矿集团、中信集团、中铝公司公司等企业签订了一批境外合同。
目前，全球矿业经历了连续5年的持续繁荣。世界资源需求强劲增长，矿业全球化步伐加快，矿业成为最具吸引力的投资领域之一，矿产勘查采矿投资年均增长超过20%。2006年，采矿业纯利润比上年增长64%；全球矿业总市值达到9620亿美元，比上年增长22%。
中国经济的快速发展，带动了市场对原材料的旺盛需求，原材料工业要支撑国民经济的高速增长，必须有足够的资源和能源保证。在经济全球化的今天，实施“走出去”战略，立足全球配置资源既是国民经济发展的需要，也是一种不可逆转的趋势。
在今年11月举行的中国国际矿业大会上，国土资源部部长徐绍史明确表示，政府鼓励企业参与国外矿产资源的勘查开发。
专家分析，企业积极“走出去”具有正面意义：一方面，我国急缺或短缺的铜、铬、镍、钾盐等战略性固体矿产，企业“走出去”开发境外矿产资源可为政府制定的矿产资源全球战略提供基础信息与决策依据；另一方面，也可争取贸易进口来源多元化、进口方式多元化。
“走出去”战略成了中铝发展的惟一选择。2007年是中铝海外收购的丰收之年，先后赢得澳大利亚奥鲁昆项目和秘鲁铜业。
今年3月份，历时两年的奥鲁昆项目全球招标尘埃落定。中铝公司以集技术、实施和投资的综合能力，在众多国际知名大公司参与的激烈竞标中胜出。据悉，中铝公司将在昆士兰州东海岸建成年产210万吨的氧化铝厂及1000万吨铝土矿山和相关设施。
中铝公司早在2003年年底就开始跟踪奥鲁昆项目。据了解，奥鲁昆铝土矿资源位于昆士兰州北部的约克角，估计资源量约4.2亿吨。该资源的采矿租赁权于1975年被授予法国铝业公司，但一直未得到开发。2004年5月，昆州政府通过立法程序收回该矿的租赁权，并于2005年9月14日启动对奥鲁昆资源开发的全球招标。
奥鲁昆项目的成功从侧面反映出了，中铝在与国际铝业巨头的竞争中，初步掌握一定的话语权和影响力。目前，中铝资产总额近2000亿元，具备了进入世界500强企业的实力。公司控股的中国铝业股份有限公司分别在纽约、香港、上海上市，排名世界资源矿业公司第8位，成为我国最大的有色金属企业和全球第二大氧化铝生产企业。
肖亚庆表示，实施“走出去”战略，是适应经济全球化趋势和我国经济持续较快发展的新形势，统筹国内发展和对外开放的必然选择，对于利用好国际国内两个市场、两种资源，充分体现和发挥改革开放成果和经济社会发展的比较优势，实现科学发展有着重要的意义。
目前，中铝公司正积极在全球铝土矿资源最为丰富的澳大利亚、越南、几内亚、印度和印度尼西亚等开发资源，同时也在南美、周边国家等铜资源丰富地区进行海外铜矿开发，部分项目已取得重大进展。
据肖亚庆介绍，中铝未来力争在境外获取比较多的铜资源，希望能达到国内产能一半的水平。据悉，目前中铝正与部分南美、非洲的铜矿带国积极接触，以获取更多的海外矿源。
纽约: Aluminum Corp of China Ltd(ACH)US$52.06 -1.89 (↓3.50%)
上海: Aluminum Corp CHN 'A' CNY1(SHA 601600)RMB40.35 -0.18 (↓0.44%)
香港: Chalco(2600.HK)HK$16.32 -0.34 (↓2.04%)
Eight Tips for 2008 -- Darling Fired, UBS Sold: Matthew Lynn
Dec. 27 (Bloomberg) -- Shortly before the 1929 stock-market crash that ushered in a global recession, U.S. economist Irving Fisher made a rightly celebrated forecast: ‘‘Stock prices have reached what looks like a permanently high plateau.’’
That should be enough to warn anyone off making predictions, particularly where finance and business are concerned. Still, we are stuck in some quiet space between Christmas and New Year, so here are a few things that might happen in 2008.
One: The dollar recovers.
Dollar bulls were about as easy to find in 2007 as a Led Zeppelin reunion ticket. The tumbling dollar was one of the big financial stories of the year. But the laws of economics haven’t been repealed quite yet. They tell us that after a currency is devalued, exports pick up, imports decline, and the trade deficit starts to shrink. We’ll see that happen in 2008, and by the end of the year, the currency markets will have noticed, and started pushing up the dollar again. Pretty soon, everyone will be describing the U.S. as the new Germany -- an export powerhouse with huge trade surpluses, and everyone fretting about how they can get consumers shopping again.
Two: Europe gets a free airline.
The three most powerful words in marketing are ‘‘new,’’ ‘‘improved’’ and ‘‘free.’’ That third one is the best of all. The ‘‘free’’ culture of the Internet is spreading into the real economy. Some newspapers are now free. So are broadband deals. It won’t be long before someone launches a free budget airline. Plenty of flights are sold for a fiver. So why not get rid of the token charge most of the budget airlines now ask for? You can give the flights away and make the money on car rentals, baggage allowance, and onboard cups of coffee.
Three: Alistair Darling gets fired.
The U.K. economy is likely to face its toughest year in more than a decade. The housing market looks weak, the government will be forced to turn off the spending taps, and London’s financial district is facing big layoffs. Somebody will have to take the blame for that, and Prime Minister Gordon Brown, even though he spent the last 10 years as chancellor, certainly isn’t going to volunteer. Instead, his hapless replacement as chancellor, Alistair Darling, who is already ensnared in the Northern Rock Plc fiasco, will take the rap. And his successor? Brown’s chief crony, Schools Secretary Ed Balls.
Four: The Facebook IPO tops the bull market.
The social-networking Web site Facebook Inc. has become one of the hottest properties on the planet. Back in October, Microsoft Corp. paid $240 million for a 1.6 percent stake in the business, valuing the whole thing at $15 billion. If it stages an initial public offering late in 2008, expect Facebook’s value to have multiplied several times since then. Amid a frenzy of wildly bullish predictions, and with stock markets surging again, its value will go to $50 billion or more. Years later, however, we’ll look back at the Facebook deal as the top of the 2002-2008 bull market.
Five: UBS gets sold.
In soccer, there is a useful phrase: ‘‘Form is temporary, but class is permanent.’’ In European banking, there is no more class act than UBS AG. Its form, however, has been terrible. The Swiss bank has been forced to write off $10 billion in losses on subprime investments. With a burnt-out share price, UBS looks like a bargain. It recently raised fresh capital from an ‘‘unidentified Middle Eastern investor.’’ Why remain ‘‘unidentified’’ unless you plan to raise your stake further? Don’t be surprised if UBS is owned by one of the oil-rich sovereign wealth funds by the end of 2008.
Six: Bring back the peseta.
For years, people have been warning that Spain’s massively overheated property market is a catastrophe waiting to happen. We have seen the wobbles already. In 2008 we’ll see the crash. The trouble is, there won’t be anything Spain can do about it. The European Central Bank didn’t stop prices from soaring and it won’t stop them from plummeting either. The result? The Spanish will start to wonder if handing over control of their currency to Frankfurt was such a good idea after all.
We have already seen campaigns in Italy to bring back the lira. By the end of next year, we’ll see campaigns in Spain for the return of the peseta.
Seven: Paris gets the 2012 Olympics.
The least surprising news of 2007? That was the soaring cost of the 2012 London Olympics. The bill will rise to more than 9 billion pounds ($18 billion), triple the original estimate. And there are still four years to go. At the current rate of price inflation, the Olympics will soon be devouring the entire British economy. In 2008, Londoners will wake up to the madness. French President Nicolas Sarkozy will step in with an offer to take the games back. The reaction? Londoners will breathe a sigh of relief, start muttering ‘‘Merci, merci’’ and tell him Paris is welcome to the circus.
Eight: Yet more Greenspan predictions.
To coincide with the paperback of his memoirs ‘‘The Age of Turbulence,’’ former Federal Reserve Chairman Alan Greenspan will return to the lecture circuit and the television studios with a series of nerve-shaking predictions. The bull market? It’s finished. The dollar? Kaputt. A new Ice Age? It’s imminent. Fluffy bunnies from Mars? They are about to invade our planet. Well, if big Al says it, it must be true.
Taiwan court clears Ma Ying-jeou of graft charges
TAIPEI, Taiwan (AP) -- Taiwan's High Court on Friday cleared opposition presidential candidate Ma Ying-jeou of graft charges, rejecting an appeal by prosecutors.
The decision clears the way for Ma to represent the Nationalist Party against Frank Hsieh of the ruling Democratic Progressive Party in Taiwan's March 22 presidential elections.
HONG KONG, Dec 28 (Reuters) - China will push a long-waited reshuffle of the country's telecoms industry in 2008, creating players that operate both wireless and fixed-line services to address unbalanced competition, state media cited the country's top telecoms regulator as saying.
An overhaul of the sector, dominated now by four players that have evenly split mobile and traditional fixed-line services licenses between them, is also expected to precede the issuance of licenses to offer faster third generation services, which will represent a boon for equipment vendors such as Motorola.
Industry sources have speculated for more than a year that Beijing intended to split up China Unicom's <0762.HK> wireless networks and hand them off to fixed-line players China Telecom <0728.HK> or China Netcom <0906 HK>. But that, and other proposals have been dogged by infighting and local interests, the sources say.
Now, Beijing realises that full service players serve the industry's best interests, the Xinhua News Agency reported.
China Telecom, defying the market's slide on Friday, climbed nearly 2 percent in the morning, though Netcom -- which some analysts fear may lose out in any sector revamp because it lags its rival in market share -- slid 1.5 percent.
China Mobile slid 1.2 percent, reflecting Asian stock market weakness after the assassination of Pakistani opposition leader Benazir Bhutto, which some fear will spur regional instability.
"Operating a single type of business not only goes against technology trends, it has also fostered serious imbalances in the
telecoms industry's development,"
Minister for Information Industry Wang Xudong was cited as saying by Xinhua news agency late on Thursday.
"A full-service business model is now the telecoms industry's most reasonable one."
Shares in mainland fixed-line telecom operators had surged since the beginning of this week after Xinhua reported separately that the firms would get licenses for mobile services "at an early date".
The Xinhua report, published over the weekend, quoted an official from China's Ministry of Information Industry and suggested that long-awaited industry restructuring would start soon.
Newly listed HK IPO: XINGYE COPPER (0505.HK), listed on 27 Dec'07 @ HK$1.70.
興業銅業(0505.HK)續升13%，高見$3.95
2007年12月28日 10:12:23 a.m.
趕上本年最後一班車，興業銅業(0505.HK)昨日掛牌急升93%，表現遠超預期，今早升勢持續，進一步高見$3.95，最新報$3.73，逆市續升13%，成交5634萬股。
該股公開發售獲4.6倍超購，一手中籤率30%，下限1.7元定價，集資淨額2.07億元；保薦人為中銀國際。
Rio Tinto again rejects BHP Billiton offer in shareholder letter
Thu Dec 27, 5:03 AM ET
SYDNEY (AFP) - Anglo-Australian mining giant Rio Tinto on Thursday reiterated its opposition to a takeover proposal from BHP Billiton in a letter to shareholders outlining latest developments in the bid.
Rio Tinto chairman Paul Skinner repeated his board's belief that BHP Billiton's three-for-one share offer "significantly undervalued Rio Tinto and its prospects".
Skinner pointed to Rio Tinto's growth prospects in iron ore and copper, as well as its position as a global leader in aluminium.
"Together these are positioned to capture strong growth in demand in the developing economies, including China and India," he said in the letter released to the Australian Stock Exchange.
Skinner said he was "pleased" to inform shareholders that the British Takeover Panel had ruled BHP Billiton must either announce a firm intention to make an offer for Rio Tinto by February 6.
The ruling, given Friday, came after Rio Tinto successfully invoked Britain's so-called "put up or shut up" laws, which allow a company to put a time limit on potential buyers to clarify their position during a takeover bid.
BHP Billiton responded to the deadline last Sunday, saying it was still seeking talks with Rio Tinto and had not yet decided on whether to proceed with a formal bid.
A merger between BHP Billiton and Rio Tinto, the world's largest and third largest miners respectively, would create the planet's largest producer of coking coal, thermal coal, copper and aluminium.
Customers in China, whose economic boom has fuelled demand for resources, have expressed disquiet at the prospect of the mega-merger, fearing it would give BHP Billiton too much power to set prices.
In Hong Kong, the South China Morning Post, citing unnamed sources, reported last Monday that China had sanctioned state-owned companies to examine possible strategies to block the proposed deal.
Rio Tinto shares were up 3.27 dollars (2.84 US) or 2.4 percent at 135.71 and BHP Billiton shares rose 64 cents or 1.6 percent to 41.16 dollars in late afternoon trading on a rising Australian market.
Rio in good shape without BHP, chairman tells wavering investors
Jamie Freed
December 28, 2007
NEARLY two months after his board swiftly rejected a $US150 billion takeover proposal from BHP Billiton, Rio Tinto's chairman, Paul Skinner, has reassured investors his company remains focused on delivering its potential and on maximising value.
In a letter to Rio shareholders released to the stock exchange yesterday, Mr Skinner said he was pleased to inform them of the British Takeover Panel's decision to force BHP to make a formal offer by February 6 or walk away for at least six months.
He noted that although the deadline applied only to an offer for Rio's London-listed shares, BHP would be unable to take control of one arm of its dual-listed structure without having made an offer to shareholders of both entities. About 77 per cent of Rio's shares are listed in Britain, home to Mr Skinner, a former managing director of Shell.
Mr Skinner takes an active interest in Rio's management and unlike his BHP counterpart, Don Argus, takes part in results briefings alongside the chief executive, Tom Albanese, and the finance director Guy Elliott.
Convincing Rio's mainly London-based investors that the BHP offer undervalues the company has been a task undertaken by Mr Skinner over the past two months. BHP has offered three of its shares for each Rio share, but some analysts believe it will take a ratio closer to 4:1 to obtain the support of the Rio board.
Rio plans to continue its charm offensive leading up to the February 6 "put up or shut up" deadline, which coincides with the release of BHP's half-year financial results. Rio, which has traditionally reported its earnings before BHP, has elected to release its full-year results on February 13. Rio's results will include figures from its enlarged aluminium division for the first time, following its $US38 billion acquisition of Canada's Alcan.
BHP's chief executive, Marius Kloppers, has so far not revealed whether BHP plans to raise its proposed offer - or whether it will even make a firm offer before the Takeover Panel deadline.
"BHP's offer has so far under-whelmed the market," the Fat Prophets analyst Gavin Wendt told clients this month.
"We believe it's unlikely that the company will walk away, as that would be seen virtually as an admission of defeat.
"We don't think, however, that BHP will want to put its current proposal on the table, because the market hasn't liked it.
"If BHP's seriously interested then it's going to have to come up with a higher offer, as the market has made that perfectly clear, as has Rio."
Iran, Malaysia Sign $16 Billion Gas Deal
AFX News Limited
Wednesday, December 26, 2007
Iran and Malaysia signed a $16 billion agreement to develop two Iranian gas fields, state-run television reported Wednesday, describing the deal as the largest energy contract in Iran.
Iran's Pars Oil and Gas Company (POGC) and Malaysia's SKS Ventures signed the multibillion dollar contract to develop Golshan and Ferdows gas fields in southern Iran.
The contract was formally signed by Ali Vakili, director of POGC, and Mokhtar Al-Bokhari, director of SKS Ventures, in the capital Tehran on Wednesday, according to the report.
"This contract worth $16 billion. Some $6 billion is for development of offshore and $10 billion for development of onshore gas fields for a period of 25 years," Vakili told the official IRNA news agency.
Iran's Oil Minister, Gholam Hossein Nozari, said the deal was a vindication of his country's efforts to counter pressures to isolate his nation.
"This is the biggest investment contract in the country's energy sector," the official IRNA news agency quoted Nozari as saying.
The multibillion dollar contract was signed weeks after China's biggest oil refiner, Sinopec, and Iran signed a $2 billion agreement on developing the Yadavaran oil field despite U.S. calls for sanctions over Iran's nuclear program.
China rejected U.S. complaints about the deal. That agreement, coinciding with U.S.-led efforts to pressure Iran with threats of tighter economic sanctions to rein in Tehran's nuclear program, drew a sharp rebuke from Washington.
Nozari said an economic boom in southeastern Asia has sharply increased its need for imported oil and gas and that the contract with Malaysia has to be seen in that light.
The reserves at the Golshan gas field, 65 kilometers from the southern port city of Bushehr, is estimated more than 50 trillion cubic feet of gas and it is expected to produce 2.5 billion cubic feet of natural gas per day.
The Ferdows' gas reserves is estimated at around 10 trillion cubic feet and it would produce more than 880 million cubic feet of gas on a daily basis.
Copyright 2007 AFX News Limited. All Rights Reserved.
2007-12-28
曾淵滄：環保徵稅政策利好港鐵
廉價的居屋紅灣半島搖身一變，變成豪宅海濱南岸，而且銷情理想，平均平方呎約7000元，發展商新創建（659）與新地（016）自然賺大錢，利潤可能高達60億元。新創建賺到錢，母公司新世界發展（017）自然也分到利潤。新地規模大，海濱南岸發展所取得的利潤，佔整體利潤的比例不高，但佔新創建、新世界發展的比例就大得多。不過海濱南岸也是新創建一項比較特殊的項目，新創建的主力還是交通與基建。中國內地的基建是有前途的行業，是不受宏觀調控影響的行業；新巴就比較麻煩，燃料價格上漲，將來更可能得付進入市區的環保稅，長遠而言，為了環保，特區政府會多一些鼓勵鐵路交通多過道路交通，以減少汽車排放廢氣。前一陣子，百佳超市主動要求顧客每取一個膠袋要捐0.2元，引起諸多批評。現在，特區政府終於決定立法，要強制徵收每個膠袋0.5元的膠袋稅，相信不必多久，也會推出電子道路收費系統，向進入中環市區的車輛徵稅，以改善空氣質素。
汽車巴士股受影響
今後，有關環保的收費會不斷增加，因為只有收費才能改變人們的習慣，改善環境。環保徵稅的政策會影響股市，汽車股會受影響，巴士股會受影響，港鐵（066）則得利。親戚從上海帶來一本我寫的書，當然，這是收不到版權稅的翻版書，雖說是翻版書，印刷也很不錯，不像深圳賣的翻版DVD水平般低，看一半就沒了。該不該追究？我想還是算了吧！反正我又不是靠寫稿維生，有了翻版書也不錯，多一些上海人認識我。現在我已算是正式打入上海市場，《上海證券報》每日有我的專欄；《上海股市資訊》雜誌每期也有我的專欄；也曾經受邀到上海開投資講座。常常聽人說：中國有13億人口，每人讓你賺1元，就有13億元。哈哈！說不定有一天，香港眾多股評家都想移居上海呢！真混賬，我又一次胡言亂語、得意忘形。已經準備好明日又有不少人在他們的專欄狠狠地教訓我，我是不斷地接受批評，可惜陋習難改。
Dec. 28 (Bloomberg) -- STX Shipbuilding Co., the first South Korean company to set up a yard in China, received an order from the Middle East to build four bulk carriers valued at 187.8 billion won ($200 million).
The 58,000-deadweight-ton vessels will be delivered by June 2011, the Jinhae, South Korea-based company said in a regulatory filing today, without identifying the buyer.
Shipping lines, including STX Pan Ocean Co. and Pacific Basin Shipping Ltd., have ordered more vessels this year to transport raw material to China, the world's biggest buyer of iron ore used to make steel. That has fetched South Korean shipyards record orders for a fifth year.
A total of $78.6 billion were spent in the first 11 months of this year for new bulk carriers, more than triple the $23.4 billion spent for all of 2006, according to London-based Clarkson Plc, the world's biggest shipbroker.
STX Shipbuilding climbed 3 percent to close the year at 50,000 won in Seoul. The stock has more than tripled this year, the fourth-biggest gainer among the 200 largest companies traded on South Korea's Kospi index.
Densha Otaku(でんしゃ おとこ), Singapore Version
Extracted from a forum:
“Men seduce women to get sex while women entice men for monetary gain. That’s the way it has always been the world over.”
The man’s version of events.
I Met The Most Beautiful Lady In MRT Yesterday
It was about 9pm yesterday. I was in City Hall MRT when a very beautiful lady entered my MRT cabin. She was very delicate features, porcelain skin and the most beaming eyes I have laid my eyes upon. She was dressed in office wear (white blouse, black skirt) and it seems rather perculiar that she is dressed like so on a Sunday. The cabin was packed and there was barely space for new passengers. I was leaning against the glass partition next to the entrance door. There was a few space left in front of me and she stood right there, in front of me.
I was very nervous. This is the first time in my 27 years that I stood so close to a beautiful lady. She was, I guesstimate, 13.5 cm away from me. My heart was racing, for reasons i could not explain. Maybe it was dumbstruck. Maybe it was love at first sight. But I was mesmerized by her shimmering beauty.
I wanted to make small talks. But i don't know how. Nor do I have the courage to do so. Oh god please help me, i pray silently. Alas, after 30 secs of deep thoughts, I chickened out. You see, throughout my existence on earth, my life has revolved around jap animation, video games and internet surfing. I barely socialized in my free time. I am what they call a compulsively shy inadequate (CSI), or more popular known in popular folklore as ubergeek.
So i chickened out and decided to spend the rest of the MRT journey staring down at the ground (yes. I did not even have the courage to look upfront at her). Halfway through the journey, the MRT got more packed and she got closer to me (8.7cm?). But as you know, I have already decided to forgo this chance encounter and leave it as it is.
After we just left Orchard MRT station, the most scariest thing in my life happened. There was this guy who was standing behind her. He was middle aged, about in his 40s. Also dressed in office wear (white shirt, black trousers). He was moving nearer and closer to me as the journey progress. I thought he was weird but i thought nothing of it. In no time, he was virtually 3.2 cm away from the lady and 9.5cm away from me.
Suddenly (as i was observing his movements for some time now), I notice his hand inching closer towards the lady's back. Lo' and behold, soon he placed his hand comfortably on the lady's waist (similar to how a bf would place his hands around his gf's waist). I looked up at the lady (prob the first time i looked at her clearly since my first glance) and saw a change of expression (a sign of discomfort really), and she tried to move away but the guys keep on following her.
I thought to myself "Just shout at him to stop it, miss. There's so many people. Just do it."
Alas, after 30 secs, she still doesn't do it. Instead, she closed her eyes and grimaced.
"Why? Why didn't you shout for help?" I thought. It was at this point that I realized that i had to do something. None of the other people on the train knew what was going on as it was very packed. Only I knew since i was so close to the scene.
I wanted to shout at him to stop... But i couldn't. I didn't dare. What if he beat me up? What if... Excuses ran through my mind like a coward swims in the sea. After 10 secs of hesitating, I still had not have the sense of mind to stop this insidious act of discomfort.
In a moment of madness, the words suddenly came out of my mouth "Hey, do you want to change places?" At this very moment, i swear i could see the tension around her air dissipate like dust in the solar system. Her grimace was gone and was replaced by a breath of relief. Without a word, she just move towards me and i made way to switch places with her. After so, i heard a "Thanks" whispered to my ears.
Somehow, I think the guy sensed that I knew what was going on and like the coward that he is, he moved away from us to the other cabin. So after he was gone, the lady just smiled at me sweetly.
OH MY GOD! you have no idea how i felt at that moment. I felt like Superman. Batman. GI JOE, Russell Crowe. All rolled into one superlicious fantastic four combination sensation.
I didn't know how to respond. So I just smiled shyly and looked down at the ground.
Soon, i was at our destination, Novena. I looked up at her one last time and I still saw her smiling at me. I smiled back shyly again and just before I step out of the train, i said bye to her.
Oh man! You blew it you fool. Here you have the most beautiful lady smiling at you and you are walking away from here? But what can i do? I'm a CSI and I cannot make out more than 5 lines of sensible sentences in a conversation with a girl.
With a heavy heart, i walked out of the train, condemning myself to a life without love. Just at this moment, i sense a warm touch to my arm. I turned around and I saw her with her outstretched hands over my arm. She had also stepped out of the train.
What is happening? I thought.... oh no.... what do i do next?
You could imagine the tense situation. A girl holding onto a guy's arm, both looking at each other, not knowing what's next, with the MRT leaving both of them behind.
After 3 secs of intense pressure, she spoke. "Could you go with me to the station control and make a witness report to what happened just now?" Phew.... I was relieved. Of course I agreed. So again, the shining smile on her face appeared again and we soon proceeded to the station control to make the report.
There, we did not talked to one another. I just explained what happened to the officer and after they took my testimony and contact details and told me i could go. Just before I left, the lady suddenly asked me if she could have my contact details.
OH MY GOD! She's asking for my contact details. Heart... beat... running... fast....
Then she said she wanted to treat me to lunch for my help. So shyly and obligingly, I provided her my contact details and she thanked me and said she will be in contact with me soon. I smiled back and bid my goodbyes to her as i walked away. As i walked away, i swear i could still see that beautiful smile of hers.
HAPPINESS! I truly learned the true meaning of that word at that very moment.
So when i reached home yesterday, my mind was all about that incident. I couldn't watch my naruto or play my wow. I barely could sleep. All the time, the images of that incident just keep on replaying in my mind.
So here i am now, replaying the incident YET AGAIN as i write this entry. I apologize for this very long entry but i am sort of lost at this moment.
What should I do? What if she called? What should I say? How should I respond? Why didn't they teach how to handle this sort of situation in school?
I am lost. truly lost, like a feather is a featherduster.
*********************************
The woman’s version of events.
I Met The Most Nerdy Guy in MRT Yesterday.
It was about 9pm yesterday. I was in City Hall MRT when I entered my MRT cabin. I was dressed in office wear (white blouse, black skirt) after meeting a client (I am an insurance, MLM and housing agent). The cabin was packed and there was barely space for new passengers. I stood near the glass partition next to the entrance door. There was a few space left in front of me and I noticed a guy near to me.
This is the first time in my XX years (Girl age is secret hokay) that I stood so close to the most nerdy guy in the MRT. He was, I guesstimate, 13.5 cm away from me. My heart was not racing certainly, for reasons i dun need even explain. Maybe it was dumbstruck. Maybe it was gross at first sight. But I was not mesmerized by his nerdy look.
I dun want to make small talks and throughout the journey. This guy was staring down at the ground instead of looking at me. Halfway through the journey, the MRT got more packed and I moved closer to him (8.7cm?) and enjoy tormenting him.
After leaving Orchard MRT station, the scariest thing in my life happened. There was this guy who was standing behind me. He was middle aged, about in his 40s. Also dressed in office wear (white shirt, black trousers). He was moving nearer and closer to me as the journey progress. I thought he was weird but I thought nothing of it. In no time, he was virtually 3.2 cm away from me and 9.5cm away from the nerd.
I felt something touching my back and it was the guy's hand. The nerd looked at me and I gave him a " Are you going to help me, you bloody nerd" look and I tried to move away but the fat arse keep on leaning his body towards me.
None of the other people on the train knew what was going on, as it was very packed. Only the nerd knew since he was so close to the scene.
Just as I was resigning myself to fate, the nerd suddenly said, "Hey, do you want to change places?" At this very moment, I signed a breath of relief. I move towards me and switch places with him. I whispered " Thanks" to his ears but he did not heard what I said inside my heart. Thanks you stupid nerd, now the fatso ate my tofu. Chiu ish so WOLS".
Soon the fatso move away and I smiled at him sweetly. Maybe can sell him some MLM, insurance or property next time
I think he felt like he was Superman. Batman. GI JOE, Russell Crowe. All rolled into one supercilious fantastic four combination sensation.
He smiled shyly and looked down at the ground.!@#@$% What the fark is this guy doing. He just enjoyed looking at the ground more. Maybe he sells rocks?
Soon, he was about to alight at Novena. He looked up at me and I smile at him and he smiled back shyly again and just before he steps out of the train, he said bye to me.
I walked out of the train and stopped him. The nerd looked stupidly at me and I told him I want to make a report about the incident in the train. Of course He agreed. So again, I smiled at him again (Must charm him ma)
He explained what happened to the officer and after they took his testimony and contact details and told me I could go. Just before I left, I asked him for his contact details.
Then I said I wanted to treat him to lunch for his help but actually I want to sell him products la.
HAPPINESS! I truly learned the true meaning of that word at that very moment. Can make money since he is so charmed by me.
I am really evil. Want to sell products to him. What should I do? Should I call him? What should I say? How should I respond?
China's textile industrial output surges 21.9%
(Xinhua)
Updated: 2007-12-28 15:02
China's textile industrial output for 2007 is forecast to reach 3.05 trillion yuan (US$416.8 billion), a 21.9 percent increase year-on-year, according to a report released on Thursday by the Textile Industry Association.
Large scale textile enterprises, with annual sales exceeding two million yuan, were expected to realize profits of 115.2 billion yuan this year, a 32 percent jump over the previous year. The export value would reach US$177.2 billion, a 20.1 percent increase year-on-year. This was compared with the import value of US$18.9 billion, which experienced a growth of 4.4 percent.
However, with the ongoing appreciation of the yuan and the textile export tax rebate reduction, the low-cost edge of Chinese textile products was gradually weakening.
The yuan broke through the 7.32 mark on Thursday afternoon to stand at 7.3186 yuan against one US dollar, up more than 6.6 percent accumulatively.
The yuan's appreciation was hitting the country's textile industry hard. According to an estimation by webtextile.com, every one percent rise in the yuan would cause two to six percent drop in textile commodity profit.
Price hikes of international crude oil and wool also put chemical fiber enterprises and the wool industry under huge pressure.
As the world largest textile exporter, China made tremendous efforts to extricate itself from these predicaments. These included further exploring domestic and overseas markets and counteracting the adverse impact of rising costs by technological innovation and industrial upgrading. In addition, developing countries in Asia and Africa had become a major engine for export growth, the report said.
Despite constantly rising oil prices and the continuous appreciation of the yuan, the export value of China's textile industry was expected to increase by 15 percent in 2008.
"Although the RMB appreciation is painful for the textile industry for the time being, it is hoped that the RMB exchange reform would help adjust export orders of the industry so that only the competitive could survive," said an industry expert.
BEST OF DOUG NOLAND
December 28, 2007
…..Morgan Stanley’s bombshell. "During the fourth quarter, the firm recognized a total of $9.4 billion in mortgage related writedowns as a result of the continued deterioration and lack of liquidity in the market for subprime and other mortgage related securities since August 2007. Of this total, $7.8 billion represents writedowns of the firm’s U.S. subprime trading positions…"
Morgan Stanley’s CFO: "As you are aware, over the past year our trading group decided to short the subprime market. The traders were short the lowest tranche of the subprime securities with a notional value of approximately $2.0bn. The traders decided to cover the cost of the negative carry in the short position. To do so they went long approximately $14bn of the super senior AAA or BBB subprime securities we refer to as mezzanine. As the Credit markets declined dramatically, the implied cumulative losses in the subprime market "ate" (unclear) into the value of the super senior AAA tranche we were notionally long. As a result, not withstanding the short position, the implied losses of the notional long generated a major net loss when the position was marked-to-market. The loss was non-linear with the decline of the relevant ABS index, given the long/short structure of this particular trade."
Analyst question: "I know everyone is dancing around it, but I guess my question would be to help us understand how this could happen – that you could take this large of a loss? I would imagine that you have position limits and risk limits, as such. It behooves me to think that you guys could have one desk that could lose $8 billion?"
CFO: "Look, let’s be clear. One, this trade was recognized and entered into our accounts. Two, it was entered into our risk management system. It is very simple – it’s simple and very painful. So I’m not being glib. When these guys stress-lossed (tested) the scenario on putting on this position, they did not envisage in their stress losses that we could have this degree of defaults, right? It is fair to say that our risk management division did not stress those losses as well. It is as simple as that. There was a big fat tail risk that caught us hard, right? That’s what happened. Now, with hindsight, can you catch these things? We are not unique being long these positions, right? What is unique is that this was a trade that was put on as a proprietary trade and we have learned a very expensive and, by the way, humbling lesson."
Morgan Stanley’s stock was up 8% for the week, despite reporting the first loss in its 72 year history. Investors were apparently comforted with the news of a $5bn equity infusion from the China Investment Corporation (controlled by the Chinese Finance Ministry).
The marketplace should be petrified with the revelation of an $8bn loss on a single trade that was not "rogue" - nor did it apparently even circumvent risk management processes. Instead, it appears to be a "simple" case of a devastating failure in the models used to structure a highly leveraged "hedged" trade. At the heart of the issue were illiquidity and a collapse in the value of a leveraged position, in a development that is very much systemic in nature. As the CFO stated, the company is "not unique being long these positions." Morgan Stanley is quite fortunate that they do retain a strong global franchise in what remains a period of extraordinary Global Credit Bubble excess. They still enjoy the capacity to plug part of the hole in their equity base…..
Morgan Stanley’s CFO stated that the company was caught hard by "big fat tail risk." I don’t believe it was a case of "tail risk" at all. Devastating illiquidity and market losses were inevitable, only the timing was unclear. Broker/Dealer assets ballooned 140% in just four and one-half years to $3.2 TN. During this same period, the asset-backed securities market (including "private-label" MBS) inflated 120% to almost $4.3 TN. Myriad sophisticated structures, financial guarantees, liquidity agreements, and leveraging strategies were implemented to perpetuate the greatest financial Bubble in history. As with all great schemes of leveraged speculation, the minute the music stops collapse ensues. Underlying Acute Fragility is exposed with the inevitable reversal of speculative and leverage-based market liquidity.
To keep the music playing required increasingly egregious excesses – ever greater quantities of increasingly risky loans, structures and leveraging. The Credit Insurers came to play a critical role in perpetuating the Bubble. They could not resist the allure of easy "profits" insuring Wall Street’s creative "structured Credit products," while at the same time aggressively expanding their traditional guarantee business at the top of a Historic Credit Cycle. The Credit insurers destroyed themselves.
We expect further significant and imminent weakness in "structured Credit products" – certainly in the illiquid markets for CDOs and Credit default swaps (CDS). Keep in mind that the economy is only now succumbing to recessionary forces, and we’ve yet to experience the failure of a major financial institution in the U.S. There will be many, and it’s worth noting that Rescap’s CDS prices surged again this week. It’s amazing to watch the massive central bank liquidity injections inflate the value of government and quasi-government backed securities, while having minimal impact on the imploding market for Wall Street-backed securities. It’s impossible to rectify the damage from the bursting Bubble, and there’s today literally trillions of increasingly impaired Wall Street securities overhanging the debt markets.
Doug Noland is a market strategist at Prudent Bear Funds. Their website is www.prudentbear.com.
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