מציג פוסטים מתאריך 2010

a reuters special report: AIG's return from the grave

an interesting bit of economic reading: a special report by reuters, telling of the way AIG has made since its rescue by the U.S government in 2008. Worth a reading for any economic-oriented mind, but pages 5-6 were of special interest to me, and would be to anyone who wants to know a little more of the behind-the-scenes of the processes that lead to the rescue, and the following process of solving the break-or-keep-together dilemma. The success of the choice of the government to bail AIG out, both in stabilising a falling economic eco-system and in what now seems like a smart financial investment by the U.S government may serve as lessons for many future policy makers.

the shift between China and the U.S as leading economies is accelerating

A news item telling of Lenovo choosing to focus on China and ignore the United States in regards to its leading technological products is, in my mind, the strongest signal yet of the U.S losing its leading role, even in setting the tones and fashions. In the last great shift - from the European powers to the United States, it took ages for the Americans to become world taste-setters. Seems like Globalization is making these processes much faster. The queen (US) is dead. long live the queen (China) !

וורן באפט: הקנייה של ברקשייר האת'אווי ב-1964 היתה שגיאה פיננסית

המשקיע האגדי וורן באפט, מספר בראיון מה היתה השתלשלות העניינים שהביאה אותו לרכוש חברת טקסטיל כושלת ב-1964, ומדוע הרכישה הזו היתה שגיאה פיננסית שלולא עשה אותה, חברת האחזקות שבבעלותו היתה שווה כפליים. סיפור מרתק עם לקח בצידו על חשיבותה של ההגינות בעסקים שכדאי ללמד בבתי-הספר למינהל עסקים.

Obama's oil spill

Recently, I've suggested that in the not-too-distant future, Obama's administration, and president Obama in person, shall become the scapegoat of the american public, in regards to the golf-of-mexico oil spill.

Seems like wheels of this expected phenomena have already started rolling, although I have to confess I'm quite surprised at the speed of the process. Two news bits which include, in my mind, preliminary hints to the future plot:
An interesting news item, dealing with the impressions of fishermen of the current status of fish and water in the gulf , portrays people who do not believe Obama's administration declerations (one might suggest that after Katrina in 2005, and the slow response of the administration to the Macondo spill, these people have quite a case against the U.S administration, as a whole, but lets not forget that these claims must be taken with a grain of salt, considering the competing interests at stake here.... did anyone say legal actions ?).�…

News sources already start to sing in unison: the Macondo spill is already over....

With the usual excellent timing one learns to expect from news sources, and even though the Macondo well is still not premanently sealed, already stories realizing the damages are not as high as previously estimated, and that BP deserves some credit for its management of the crisis, start to accumulate. The choir is here people. I personally guess that the next development in this crowd-behavior will be, once that BP stops being a scapegoat... to find another... 

If this prophecy actually comes true, it might be another proof that free market forces do come to their senses in the long term. One cannot expect kittens to guard the cream, and in really high-risk industries, there is only one way to ensure 200% safety precautions taken, and way-unneeded security measures used, just-in-case. we call that regulation. heavy regulation. the same kind of regulation that used to exist until the late 80's in the financial arena of the United States, as a lesson from 1929 and the great depres…

גם בארה"ב מדברים על כסף יהודי

מתברר שגם בארה"ב יש מי שמוטרד מהכסף היהודי. עצוב.

complexity of life (bp, none-bp, etc)

A rather strange accident near the Louisiana creates a new oil leak from an abandoned oil well in Barataria bay, a site that has just been cleaned from BP's spill.... news pieces regarding BP's slimmer future claim that the only unforeseeable is the litigation's aspect... but such events present the complexity of things.
As this is an abandoned well, whose owner is out of business, the Federal Oil Spill Liability Trust will be the one covering the costs of the cleanup. But now, when future damages to the bay are considered, and when BP is sued by people who consider themselves damaged by the environmental damages to the bay, who should they sue ? Will the new cleanup stand to the standards practiced in the recent BP-financed cleanup ? Which contamination was worse ? Which one was more devastating ? It is quite clear that in a complex situation, it is much harder to find the blame....

Although I know the media accepts BP's PR as its coming asset-sale is related to the acc…

Seems like Obama's administration didn't get the 20 billion fund after all

'Will you stop writing about BP ?' I am told by the few who choose to read my thoughts, but with the risk of losing those few who do read me (or at least of having another post skipped by them, for after all - isn't it the purpose of the headline ? to guide the reader to read or to save his precious time ?), I wish to dedicate a few more lines to that sad affair of BP's oil disaster in the gulf of Mexico. The reason is that in an article that seemingly relates to BP's CEO coming demise, a surprising news item is hidden, which I haven't seen anywhere, and which tells that the 20 Billion dollars fund details have never been finalised and agreed uupon, despite the impressions Obama's administration tried to create.
Charles Ortel, a managing director at Newport Value Partners, and a fan of political intrigue, told Aaron Task of 'Yahoo Finance Tech Ticker' that of 'a July 7 email from Rachael MacLean in BP Investor Relations - North America, who wrote…

Yet another BP post: this time regarding its safety history

A friend who has read my last post regarding BP, sent me an interesting article about BP's Dismal Safety Record, and wondered whether I'd still claim BP has a reasonable safety policy. Well, what can I tell you, my friends ? I've read that article. as usual, it is very critical about BP, but when you ignore the harsh statements which claim "there is evidence BP has one of the worst safety track records of any major oil company operating in the United States", and get down to the facts mentioned in the article, you are left with 4 clear accusations:
'BP refineries in Ohio and Texas have accounted for 97 percent of the "egregious, willful" violations handed out by the Occupational Safety and Health Administration (OSHA). OSHA statistics show BP ran up 760 "egregious, willful" safety violations, while Sunoco and Conoco-Phillips each had eight, Citgo had two and Exxon had one comparable citation.'
'After a 2005 BP refinery explosion in…

is BP sending Hayward to its version of Siberia?

Persistent news rumors are that Anthony Hayward will be replaced today as BP's CEO, and that hayward will "be offered a job with the company's joint venture in Russia"... considering Hayward's fire-drawing remarks earlier this year about his wish to get his life back, one has to wonder if this isn't a particularly cruel act by BP's board... is it their version os Siberia ? an act to publicly clarify their opinion of the man ? or is Russia considered among BP's senior management (which currently operates, as far as I understand from London and Houston) as an excellent location for senior management to get one's life back ? I guess the only solution to these question can be given by Mr. Hayward himself, and that the best answer would be by his acceptance or rejection of this new Russian position...

(btw, For anyone interested in the possible logic behind Hayward's stepdown, this is a nice explanation).

[update: an interesting piece at the NY time…

בונוסים באפריקה

אפריקה, לא היבשת השחורה, אפריקה ישראל, תחלק בונוסים למנהלים. הייתי מצפה שחלוקת בונוסים תאפיין חברה מצליחה, שהקופה שלה מתפקעת ממזומנים, ואחרי השקעות מרשימות בעתידה של החברה, ואחרי חלוקת דיבידנדים ראויה, החליטה לתגמל גם את העובדים שהיו מהגורמים להצלחותיה. אבל אפריקה הזו, היא חברה שרק לא מזמן עמדה על פי תהום, שביקשה מאנשים שהילוו לה כסף לוותר על חלק מהמגיע להם, כדי למנוע את הגעתה לחדלות-פרעון, ואשר עדיין נושאת על גבה חוב לא פשוט. אם אני בעל אגרות חוב או בעל מניות באפריקה (ואינני. לכל אדם צריכים להיות קווים אדומים), אני פונה לביהמ"ש. תרבות-של-עושק. אין מילה אחרת לתאר את התרבות הארגונית שסבורה שלנושא תפקיד בחברה מגיע בונוס על עצם תפקודו הרגיל בחברה, כשמדובר בחברה שאיננה משגשגת בצורה יוצאת דופן.
ולמקרה שדעתי לא ברורה מספיק: לא מגיעים פרסים על עצם הצלתה של חברה מהתפרקות. הפרסים יגיעו בסיבובים הבאים, כשהחברה תתאושש ותחזור לרווחיות גבוהה. אבל בשביל זה נדרשים סבלנות, אורך-רוח, התמדה, מסירות, נחישות, ותום-לב. תכונות שלצערי כנראה אינן נפוצות במיוחד בהנהלה הבכירה של אפריקה ישראל. וכל מי שחוש…

yet another BP related post

You might have noticed I've been posting a post a week recently, in relation to the spill in the gulf of Mexico, and news items discussing British Petrolium. It isn't that I've been hired by BP to do media work for them. This is, after all, a nice little blog with a select few readers (an elite, naturally, but as elites go, not a numerous crowd), and no person in his sane mind, regardless of the amount of U.S Dollars he spends on compensations and oil-contamination cleaning efforts, would start giving away money to anonymous blogs.

The explanation is much simpler. As an investor, I've been interested in BP's stock for several months before the April spill. The decline of the stock presented, in my mind, a unique opportunity to buy an undervalued company (and i'm far from being a minority here), and as troubled companies shares tend to be volatile, the fact that I bought what in my mind is an amazingly cheap stock, with impressive profits in a not too distant fu…

Analysts expect BP to be paying fines, damages, legal costs and other expenses for years

I keep seeing articles stating "Analysts expect BP to be paying fines, damages, legal costs and other expenses for years", regarding the spill in the gulf of mexico. But learning similar past events, with the Exxon Valdez being a well known sample, I have to doubt these claims. Adding to it BP's recent assets sale, combined with its commitment to establish a fund, and assessing the legal ramifications of such a commitment, when remembering the protections oil companies like BP enjoy, I'd be quite surprised if BP's total losses regarding this sad incident will pass the 6 Billion mark. People forget that once the well is sealed (and it seems we are getting closer to that happy moment), the accumulation of damage will slow, or even stop. The current statistics regarding the lower-than-expected pressure in the currently-sealing cap may indicate that the spill wasn't as large as claimed. And most importantly - the biggest oil-clearing navy ever currently operates …

worst oil spill in u.s history ?

Somehone, I keep bumping into news items, that define the BP oil spill in the gulf of Mexico, as the "worst in US history". Checking Wikipedia on this teaches us that at best (or worst, as things discussed), it is currently, the 2nd worst, and we are still talking estimates.
The habit of newspapers to try and tag things as "The Best!", "The Ugliest!", "The Worst!" is understandable, for the wished impact of news-selling, but the impact it has on public knowledge is horrible. People build their perceptions of life and reality by this bits, and as this information is inaccurate at best, These stories contribute to our partial knowledge of the world around us, and assure that decision-making processes will keep being flawed, for a long time ahead. 
So lets repeat the known truth:  No One Really Knows How Much Oil has been Spilled into the Gulf in recent months. No One. There are only ESTIMATES. It is very possible that we will always have Only Estimat…

מודי'ס חותכת את דירוג האשראי של אירלנד. אז מה ?

סוכנות הדירוג מודי'ס הודיעה שהיא חותכת את דירוג האשראי של אירלנד, בגלל יחס החוב-תוצר.
יש לי סוד בשבילכם.
חלק מהתאגידים  הגדולים בעולם מתנהלות עם יחס מקביל של חוב ל- EBITDA העומד על  200%, 300% ויותר.  ואף אחד לא חושב שזה לא בסדר.  לא זאת בלבד, אלא שיש ענפים כלכליים שלמים, בהם זה נחשב הכרחי, בגלל סוגי ההשקעות הנדרשים.
היו תקופות שהיה מקובל לגמרי שמדינה מתנהלת עם יחס חוב-תוצר של 130%, 250%, 200% ויותר.
כך למשל, בתקופות של משברים ומלחמות זה סביר לחלוטין שמדינה תיכנס לחוב שייקח לה כמה שנים לכסות.
אין בזה שום דבר רע.
זה הגיוני לגמרי שכדי למנוע אסון, מתחייבים לסכומי כסף שישולמו בעזרת השגשוג של השנים הבאות, שהושג על ידי מניעת אותו אסון.
הקביעות של מאסטריכט וכולי, הן הנחות שרירותיות, שלא ערוכות היטב להתמודדות עם זמנים של משבר, ואפשר להסתדר בהחלט טוב גם בלי להיות צמודים אליהן, כל זמן שמודעים למשמעויות ההכרעות שמקבלים.
כי כמובן שאינני אומר שחוב זה תמיד טוב - יש חוב טוב, שמונע משבר או מהווה השקעה לעתיד, ויש חוב רע - שהוא בזבוז כספים ללא תועלת עתידית.
אבל מכאן ועד סימון כל מצב של כניסה לחוב גבוה כשלי…

yet another pointless accusation

NY Times joins all other accusing fingers pointed at British Petrolium, describing it as a company with a record which is of "a History of Boldness and Blunders", but reading through that article  one just can't seem to find the facts for these accusations, other than a very persistent government aiming to put all the blame away from its regulatory agencies. Furthermore, the article includes some rather confusing paragraphs, in which BP appears to be an organization commited to safety. It turns out that the current BP chief executive , Tony Hayward, "set up a new companywide management system toevaluate risks, standardize safety practices and improve decision-making" and initiatives regarding personal safety of employees, which began during his predecessor's time, were expanded under Mr. Hayward: "Visitors today see signs at company offices exhorting workers not to walk and carry hot coffee at the same time, to stick to marked walkways in parking lots …

Why boycotting British Petrolium is stupid...

A well written argument, explaining why it isn't BP that should be boycotted, but oil as a product.

BP under fire ? or is it that due process is under fire ?

forbes has the story on the current pressures on BP, how the company is reacting, and how other issues, among them the insignificant aspect known as "due process" is seen... 

ההפרטה נכשלה ?

[פורסם במקור ב-21/5/2010 בבלוג שלי (ז"ל) בדה-מארקר, ועם מהלכי הקונסולידציה של הבלוגים שלי ומעברי אל בלוגפוסט, מגיעים גם פוסטים כמו זה. עם הקוראים הסליחה על אי-הסדר...]

קראתי בעונג רב את מאמרו של גיא רולניק ההפרטה נכשלה - צריך לעצור אותה. פה ושם עצרתי ושפשפתי את עיניי. לפרקים גם חזרתי לראש העמוד כדי לוודאי שלא שלי יחימוביץ או יצחק בן-אהרון הם שכתבו את הכתבה הזו.

פשוט תענוג.

פעם המלחמה בריכוזיות היתה הסיסמא המרכזית של מקדמי ההפרטה, שהסבירו את הנורא והאיום שבבעלות המדינה על נכסים וחברות. היום המלחמה בריכוזיות הופכת בעצם להיות מלחמה בכוחותיו הברוטליים של השוק הפרטי.

כדאי רק לזכור שבמאבק הזה הפוליטקאים שלנו, שוב ושוב, פועלים בעד הטייקונים . וכשגם הם וגם הפקידים עושים את זה, לא נשאר מי שיפעל בעדנו - הציבור הרחב.

עוד כדאי לזכור, שאם האמריקאים מתקשים אך מנסים להתמודד עם התופעה הנוראה המכונה גדול-מכדי-ליפול (too big to fail), אז גם לנו, אזובי-הקיר, כדאי לפעול כשהלקח הזה למול עינינו (מישהו אמר אפריקה ולא התכוון ליבשת השחורה?), והתמריץ הזה מסייע לנו במלאכת הפירוק של הקונגלומרטים הישראליים.


why the "too big to fail" policy must end

Too big to fail needs to end.

It must end.

Corporations that are as large or larger than states, are not new.

Size becoming a factor that guarantees government bailouts is new.

Once a corporation knows that the national or international economy depends on its existence, then the "worst case uncle sam will come along and help us" mentality comes to life, and as we all know from socialist countries miserable experience of the 60s and 70s and early 80s, this is a killer mentality for a healthy economy and a free & functioning society.

There is only one solution: just like the antitrust law, a set of laws preventing corporations reaching the size and strength that means they cannot be allowed to fail.

Being so large that you risk the financial stability of the nation or the world, is just as unfair as being a monopoly.

Over a hundred years ago, american legislators were courageous enough to realize monopoly is a danger to free society. now it is time to realize that too big to fai…