New York Financial Writers 2018 Follies Intro.

Korn Ferry: In Germany, New Lessons on Succession

In a move that rocked the political sphere, Germany’s chancellor Angela Merkel has recently announced she’d step down in three years. Sure, that’s a ways off, but Merkel has held the position for more than decade and been a clear if not stable fixture that will be hard to replace. And for now, few experts see any obvious replacements. 

Succession plans in the political world are, of course, different than those at a company. “There’s no assurance that the up-and-comer politician might not get impatient and challenge the leader to an election,” says Alan Guarino, Vice Chairman in our CEO and Board Services practice for Korn Ferry in New York. “It’s not like corporate America.” Still, a growing number of firms are waking up to the often-ignored importance building high-level pipelines far in advance.  Read more here.

WSJ: What Is the Real Effective Exchange Rate?

By SIMON CONSTABLE

In reports explaining why some currencies plunged this year, analysts may have mentioned the Real Effective Exchange Rate, or REER.

The REER provides a broader assessment of a currency’s value than simply comparing the value of one country’s currency against another country’s currency. Read more here.

Photo by Annie Spratt on Unsplash

Barron's: How Electric Vehicles Should Give a Jolt to Copper Miners

By SIMON CONSTABLE

Copper prices have dropped 18% in recent weeks, creating a long-term opportunity to get in on some cheap copper-mining giants with generous dividend payouts. Their prospects will depend on a major technological transition: the move from gasoline-powered to electric vehicles.

“If you’re bullish on global growth over the next 18 to 24 months, you have to own copper-related assets, especially since current prices aren’t high enough to fund new-mine development,” says Adam Johnson, founder and author of the Bullseye Brief financial newsletter. Read more here.

Forbes: More Upside In Gold Prices

By SIMON CONSTABLE

This month's rally in gold prices may not be over.

That's because investors are still heavily betting on a decline in the value of the precious metal. When speculators overwhelmingly bet in one direction then a move in the opposite way is often the result. Read more here.

Forbes: Gold Outperformed Bitcoin In October

By SIMON CONSTABLE

When investing in alternative assets gold remains the king.

The yellow metal performed far better than the world's best-known cryptocurrency, Bitcoin, during October's market volatility. Read more here.

John Batchelor Radio Show: What Does Brexit Do For Scotland?

By SIMON CONSTABLE

Mid East Eye: Saudi Economy May Pay High Price for Khashoggi Killing

By SIMON CONSTABLE

Saudi Arabia’s economy will likely pay a high price over the recent killing of dissident Saudi journalist Jamal Khashoggi, a sordid affair that sparked global outrage and which may prompt some action by the United States and other governments.

However, the longer-term issue is that investors will likely shun Saudi Arabia because the killing highlights the kingdom’s political instability, and that shakiness is something from which investors tend to shy away or exact a high price. Read more here.

Forbes: Message From The Bond Market -- More Turmoil For Stocks

By SIMON CONSTABLE

Already stocks have had a volatile fall, but it could get even worse.

That's because a change in the bond market is pointing to a sharp decline in stocks unless something changes, according to one analyst. Read more here.

Forbes: The Italian Financial Mess Ain't Over Yet

By SIMON CONSTABLE

The disagreement between the European Union and the recently-formed Italian government coalition, ain't over yet.

Quite the contrary. It could run and run, according to a recently published report. Read more here.

Photo by Emma Fabbri on Unsplash

Forbes: How A Small Scottish Biotech Firm Could Win A Decisive Battle Against Cancer?

By SIMON CONSTABLE

A small Scottish-based biotech company could soon win a decisive battle in the war against cancer. 

NuCana, led by biotech industry veteran Hugh Griffith, is developing therapies that could radically change cancer treatment. Despite only being founded in 2008 the firm has already captured the interest of investors with good results from clinical trials of the compounds. Read more here.

Barron's: Get Ready for Big Oil Stocks in Europe to Rise if Prices Do

By SIMON CONSTABLE

Favorable valuations, a change in investor outlook, and a surge in oil prices could lift the stocks of major European oil producers.

“If you have a broad rally in energy, I think it is safe to say that both European and American investors will look at some of the big oil names globally and find them interesting,” says Steve Chiavarone, a portfolio manager at Federated Investors in New York. “Those companies with bigger dividends will become attractive again.” Read more here.

Korn Ferry: Europe’s Rattling Political Power Plays

By SIMON CONSTABLE

The upheaval keeps building up across western Europe’s political landscape. Germany’s center-right parties, which the country’s chancellor, Angela Merkel, represents, are increasingly getting squeezed at the polls. In Italy, the coalition government is having trouble developing a budget. And across the English Channel, the UK prime minister’s cabinet is in turmoil while Ireland’s president faces five challengers in an election on Friday.

Pundits have their own views on each country’s issues, but private-sector leaders are likely to see a simple lesson across the board: When the landscape changes, fundamentals become ever more important. Read more here.

Korn Ferry: Picketing for Equal Pay

By SIMON CONSTABLE

For years, it was a topic that would surface in studies and headlines, but rarely beyond. Then several countries began to get serious, requiring companies to report differences in gender pay gaps or trying to close it themselves. A few big firms spent millions trying to make up the pay difference between men and women in the same job. Read more here.

Forbes Russia: Time to Bet on Putin

By SIMON CONSTABLE

Санкции против Ирана, который скоро будут введены, а также невысокие котировки будут способствовать повышению стоимости акций российских компаний в краткосрочной перспективе. Хотя это ралли может продлиться недолго, там тем не менее существует возможность получить некоторое количество легких денег.

Read more here.

Russian President Vladimir Putin

Kremlin.ru, CC BY 4.0, via Wikimedia Commons

Barron's: It’s Time to Bet on British Stocks — Even With Brexit Looming

By SIMON CONSTABLE

It’s an opportune time to bet on British stocks.

The country’s economy is strong, stocks are inexpensive relative to those in the U.S., and when the Brexit drama passes, the pound sterling should rise.

Investors playing a likely rally should purchase the iShares FTSE 250 exchange-traded fund (ticker: MIDD.UK). Read more here.

Forbes: Time To Bet On Putin?

By SIMON CONSTABLE

Love him or hate him, now might be the time to place a bet on Russian President Vladimir Putin.

Not exactly him, but rather the Russian stock market. Read more here.

Russian President Vladimir Putin

Kremlin.ru, CC BY 4.0, via Wikimedia Commons

SFS: Borrowing and Business -- What You Don't Know Can Hurt Your Finances

By SIMON CONSTABLE

So, you’re feeling confident enough about your business to go shopping for a loan. 

Congratulations! But before you start looking you should understand these five important areas impacting loans, beginning with the difference between interest rates and APR. Read more here.

Korn Ferry: Has Brexit Hit the Disaster-Prepping Phase?

The EU and UK split-up is still not until the end of next March, but the warnings have already begun--with the British government preparing citizens for a world with no agreement or regulations set between its own country and Europe. Indeed, one memo sounds very much like a disaster-prep, suggesting companies stockpiling goods and products. Read more here.

Barron's: Bayer Battling Back Against Legal Woes

By SIMON CONSTABLE

Shares of struggling German health-care and chemical giant Bayer revived a bit on Thursday as the company got at least a temporary reprieve from a huge jury award that held its weed killer Roundup liable for a plaintiff’s cancer.

There is likely to be more positive news for long-term investors, as this and related cases against Roundup proceed through the court system. Read more here.

Daniel Case, CC BY-SA 3.0, via Wikimedia Commons

WSJ: A Replacement for Libor Gains Traction

By SIMON CONSTABLE

A benchmark borrowing cost known as the secured overnight financing rate, or SOFR, is gaining traction as a replacement for the better known but sullied Libor as the rate underpinning a range of global debt instruments. Read more here.

Avsankur©, CC BY-SA 4.0, via Wikimedia Commons

Barron's: Italian Bonds Are Cheap — but for Risk Takers Only

By SIMON CONSTABLE

Italy’s political circus is sending local bond prices tumbling and yields higher. But the country’s real economic risk also offers a contrarian opportunity to buy long-dated Italian bonds at discounted prices.

“If you think the current political situation gets resolved, then Italian bonds offer really good returns,” says Ihab Salib, head of international fixed income at money-management firm Federated Investors. He concedes that this isn’t a consensus opinion. Read more here.

John Batchelor Show: The Euro, Brexit etc.

By SIMON CONSTABLE

Photo by Maryna Yazbeck on Unsplash

Forbes: Why Investors Should Expect Gold To Jump

By SIMON CONSTABLE

Gold traders are now extremely bearish on the price of gold bullion.

It's a sign that the price of the yellow metal will likely jump. Read more here.

Forbes: Blame The Banks For Low Productivity Growth

By SIMON CONSTABLE

Economists have long wondered why productivity growth slowed over the past few decades. But now there could be an answer.

The banks did it, at least according to the conclusion of a recent study from the National Bureau of Economic Research.

What's more, the authors have a stark warning about the reliance on finance for economic growth. Read more here.

Forbes: Will Venezuela Get The Government It Needs?

By SIMON CONSTABLE

Earlier in September the U.S. Ambassador to the United Nations, Nikki Haley, joined a group of people on the street who were protesting the President of Venezuela, Nicolas Maduro.

“We need your voices to be loud, and I will tell you going to tell you the United States voice is going to be very loud,” Haley said.

Her words raise the chances that Venezuela's rotten regime may bite the dust, which has the potential to be great for the downtrodden people of that country and also for investors. Read more here.

Nicolas Maduro

Photo by Eneas De Troya,

CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>,

via Wikimedia Commons

Barron's: The Euro Is Due for a Rebound

By SIMON CONSTABLE

The euro looks set to bounce.

The rebound will come once investors perceive that the European Central Bank is becoming more assertive in managing the common currency area’s monetary policy.

“It’s not yet priced into the financial markets,” says Axel Merk, founder and chief investment officer of money management firm Merk Investments. Read more here.

Forbes: Jeremy Corbyn A Bigger Threat To London Than Brexit

By SIMON CONSTABLE

Move over Brexit, the biggest threat to London's status as Europe's leading financial center is now Jeremy Corbyn, the leader of Britain's increasingly left-leaning Labour Party. Read more here.

Jeremy Corbyn

Photo by David Martyn Hunt from Warwick, UK,

 CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, 

via Wikimedia Commons

Korn Ferry: The United Nations’ Entourage

They descend each fall into New York City, ambassadors and consuls attending the annual United Nations General Assembly. And as they give speeches and make headlines, each dignitary comes along with a retinue of diplomats, helpers, and hangers-on—a little noticed but key entourage. Read more here.

Forbes: Why The Mid-term Elections Means Stocks Will Surge

By SIMON CONSTABLE

Smart investors should consider buying stocks now.

The reason is that the market usually does far better in the fourth quarter (October through December) in years when there is a midterm election than when there is not one, new research shows.  Read more here.

Barron's: Turkish Stocks Might Be Ready for A Bounce -- If You Hurry

By SIMON CONSTABLE

There’s potential for some trading profits in Turkey.

 

So far this year Turkey’s stocks and currency have taken a hammering. But the recent stabilization of the Turkish lira may be paving the way for a bounce in stocks. “We think that the lira has fallen so much that it has gone from overvalued to undervalued and now is cheap from a fundamental perspective,” says Sergi Lanau, deputy chief economist at the Washington D.C.-based Institute of International Finance. 

Read more here.

Photo by Meg Jerrard on Unsplash

Korn Ferry: Do We Really Need To Meet Again?

By SIMON CONSTABLE

It sounds like something out of a Dilbert cartoon—having a meeting about a meeting—but it happens more often than many leaders want to admit, and this week it’s happening at the highest echelons of government.

Starting Wednesday, leaders in the European Union will be meeting in Austria to decide whether they should have another confab in mid-November. Blame the negotiations over Brexit, Britain’s exit from the EU bloc, for the sudden proliferation of such gatherings. This week’s effort will be an additional meeting to the already scheduled regular one for mid-October. The October date is considered too soon to expect any progress in the wrangling over how the EU and United Kingdom will interact with each other after the split. Read more here.

Korn Ferry: Beyond Theresa May

The talk is gettering louder—months after questions about Britain’s Prime Minister Theresa May’s tenure first made news. Now, the opposition Labour Party claims it could come into power by year-end, forcing even skeptical UK executives to consider what that might mean to their business—particularly the HR side of it. Read more here.

Barron's: ObsEva -- A Small Biotech With a Promising Pipeline

By SIMON CONSTABLE

A small Swiss biotech company focused on women’s reproductive health has three promising treatments reaching key development stages in the next few months that could pay off for investors. Read more here.

Photo by Mika Baumeister on Unsplash

John Batchelor Show: Aramco IPO fail, Venezuela's petro fail, Turkey lira fail, Brexit unknown

By SIMON CONSTABLE

Forbes: Central Banks On Gold Buying Spree Over Dollar Worries

By SIMON CONSTABLE

The world's central banks are on a gold buying spree that has lasted more than a decade. That's the longest period of consistent gold acquisition by the so-called official sector in more than half a century.

But this time the motivations of the buyers are different than they were back in the 1950s, and they are worrying. That's why investors should take note, including anyone who owns the SPDR Gold Shares (GLD) exchange-traded fund, which holds bars of solid bullion.

In the distant past, central banks had to buy gold because of its vital role in the global financial system. Now they are choosing to do so because they are worried about the dollar. In other words, they've been scared into this bullion buying binge. Read more here.

Gold Bars

Photo by Roger Attington on Unsplash

WSJ: What Is Market Breadth?

By SIMON CONSTABLE

Some stock-market strategists are increasingly concerned about something called “market breadth,” or rather the current lack of it. But what does it mean, and why should you care?

Market breadth is a measure of how many stocks are moving the major indexes. It can serve as one indicator of how much staying power a rally is likely to have. Read more here.

Photo by Mark Finn on Unsplash

Korn Ferry: Coke’s New Caffeine Lift

Almost from its creation over a century ago, Coca-Cola has been synonymous around the world with fizzy, caffeinated soft drinks. But now the company’s leaders want to the company to branch out into a considerably different type of caffeine charge. Read more here.

Briefings: Lessons on Borrowing...$200 million at a Time

By SIMON CONSTABLE

There I was, saying it in all seriousness: “Hey, fella! Can you spare $200 million?” The reply was nonchalant: “Let’s see what we get.” A few hours later, back came $220 million in the electronic equivalent of cold hard cash. The next day, a similar discourse. “How about another $200 million?” “We’ll find out soon enough,” was the response. The result: $195 million to add to the $220 million. Read more here.

BBC TV: No, Globalization Isn't Over

Forbes: Venezuela's Latest Lurch Into Insanity

By SIMON CONSTABLE

Venezuela just lurched from the absurd into the insane.

While the country suffers the brutal effects of hyperinflation, its socialist president, Nicolas Maduro, just mandated that the country's banks now must accept a certain type of cryptocurrency.

It's hard to know how that will help ease its economic crisis. Read more here.

Middle East Eye: Uncertainty around Aramco IPO shows Saudi dysfunction

By SIMON CONSTABLE

The apparent delay in the sale of Saudi Arabia's mammoth-sized oil firm Aramco is a symptom of dysfunctional government, analysts say. 

It is just one example of bizarreness emanating from the kingdom, which says it wants to unhook its economy from oil dependence.

Earlier this month, a slew of conflicting reports broke claiming that the initial public offering (IPO) of the state-owned oil company was either off or delayed. Read more here.

Forbes: Turkey To Face Brutal Credit Crunch

By SIMON CONSTABLE

Not only is Turkey suffering a currency crisis it is now headed for a brutal credit crunch, according to new research. Read more here.

Korn Ferry: Greece-- One Down, Still Many More to Go

Things haven’t been great for Greece. Its people have been subject to crushing cutbacks in civil services and a troubled economy for nearly a decade. And while this week brought good news—the country successfully completed an emergency bailout loan program—leaders there face the daunting task of reinvigorating the nation’s people and economy. “You have to win hearts and minds,” says Kirsta Anderson, the London-based global solutions leader for Korn Ferry’s Culture Transformation practice. Read more here.

BBC World News: Is Globalization Over?

By SIMON CONSTABLE

BBC interview with David Lubin (Citigroup) and me a few days ago preceded by a report from the U.S. Interview starts around 2.49 minutes into the video.

Forbes: 9 Things You Need To Know About Turkey

By SIMON CONSTABLE

Turkey is in a mess.

Its currency is in a tailspin and inflation is out of control.

There really is a lot going on so here are some important things to know.

Forbes: How Trumponomics Torpedoed Gold Prices

By SIMON CONSTABLE

Gold's not been having a good year, and you can lay the blame at the door of Trumponomics. Read more here.

Forbes: Recession Signals From The Bond Market, A Phantom Menace

By SIMON CONSTABLE

Some economists have caught a case of recession jitters all because of what is happening to the so-called yield curve.

But the case for an economic slowdown based on interest rates is flawed, new research shows. That's in part because the Federal Reserve is largely responsible for changes in the yield curve and at the same time, the Fed no longer has the power to shock the markets with its actions. Read more here.

Barron's: Wheat Will Rise On Bad Weather

By SIMON CONSTABLE

Extreme weather is expected over the next 12 months and is likely to push up wheat prices to levels not seen since 2012. Read more here.

Photo by rajeev ramdas on Unsplash

Korn Ferry: UAE’s Prime Minister to Bosses ==> Make Your Employees Happier

By SIMON CONSTABLE

It doesn’t sound like something that would attract the attention of a country’s leader, at least not in countries where grumbling employees may be the norm. But when Sheikh Mohammed bin Rashid Al Maktoum, the prime minister of the United Arab Emirates, recently heard that only 60% of employees in five government departments were satisfied with their jobs, he gave the managers of the departments new orders: Fix the problem in six months. Read more here.

United Arab Emirates

Photo by Christoph Schulz on Unsplash