Tag Archives: Morgan Stanley

When in doubt

It started 5 days ago when I wrote ‘Bitches on parade‘ (at https://lawlordtobe.com/2019/08/26/bitches-on-parade/). The premise from my point of view is that you cannot heckle a country based on a lack of evidence (read: CEO Jamie Dimon), so whilst he pulled out of the Saudi Conference, he was eager and willing to take a chunk of a $2,000,000,000,000 pie at the drop of a hat (any hat). The man has no principles when it comes to money, which is fine. Yet now the entire event is exploding in several directions as the Guardian (at https://www.theguardian.com/business/2019/aug/29/political-uncertainty-puts-london-listing-in-doubt-for-saudi-aramco) informs us that “state oil company may rule out the London Stock Exchange amid Britain’s rising political uncertainty“, in one word brilliant! Two years of whining and lack of decision is not about to hit the British MP field in a massive way. It gets to be even better when we consider the impact for the EU as a larger field, the current favourite according to insiders will be the Japan’s Tokyo stock exchange. If that happens, I get to smile whilst a whole range of bonuses will not arrive with Wall Street, the ECB or London (I am least happy about London missing out). There is a price, there is a cost to doing business and it seems that this week Saudi Arabia is making the tally to that event.

And now we see that the field changes. With quote: “Saudi energy minister, Khalid al-Falih, reignited plans for the float earlier this summer after announcing that officials were working to list the company within the next two years. Aramco announced earlier this month, in its first investor call, that it is ready for the listing whenever its shareholders agreed market conditions were “optimal”” It is here that we need to see the profit, the sudden option for Tokyo, who was not in the race at all also implies the added risk that Tokyo says ‘yes’ (read: Hai!) too eager giving the Saudi Aramco executives a much larger bonus than they expected, making the wave on the market gives rise that there will be two waves and these executives get to enjoy the windfall of both waves. I reckon that Lürssen Yachts (optionally Damen Yachts and CRN) will get to look forward to at least 5 additional commissions for yachts over 90 meters before the end of the year.

There is a much larger issue; it is not merely who gets what, and where we buy in. Bloomberg gave us on Thursday: “It’s been a good week for those seeking to pare bets on a market that brokers including Morgan Stanley say has become too expensive, given weakening fundamentals. MSCI on Tuesday wrapped up the second phase of including Saudi shares in its developing nations index, prompting billions of dollars in inflows from passive funds. Some active managers took advantage of the increased liquidity to reduce their holdings“, there is no way for me to comment on the issue as stocks are not my trade EVER! Yet consider the quote ‘brokers including Morgan Stanley say has become too expensive‘, yet they too are rallying to get their fingers on Aramco. Business is hard and I am fine with the directness that the market needs to be. Yet Aramco is different, everyone wants in and as such Saudi Arabia gets to elect the offerings and as such some players are about to enter the new field, they are optionally becoming the next Ricky Fuld, who was the only person not offered a deal in 2008 whilst the others got one. I am not sure on how to see that, The Wall Street Journal gives us ‘Branded a Villain, Lehman’s Dick Fuld Chases Redemption‘, these people walked away with massive amounts whilst almost one in two households got foreclosed in the end, that is a massive amount of anger to deal with and I personally believe that the Saudi’s will do business with everyone, just a certain group of people will have to be willing to cut their margins by a fair bit. Certain actions have impact and will have a considerable impact of the option to do business, Saudi Arabia could afford to wait, of those people had only decided to wait factual evidence, that would have been nice, not?

I believe that their hypocrisy on Jamal Khashoggi now has a price (to some degree); in addition the economic turmoil gives Saudi Arabia the option to select the host, who will gain a lot. I never considered Japan before today on this, but the choice makes sense.

We could go with the option: ‘When in doubt select the ally that seems more sincere‘ or we can go with ‘Be careful who you wake up with presented and insincere morals‘ I reckon that Wall Street and Especially the ECB need to learn from the second option. No matter how things unfold, pretty much everyone will be keeping 100% attention on the Tokyo exchange, something that has not happened in a long time and Aramco made it happen. And all whilst this is going on, the UK is still in all kinds of childish banter, especially by opposition parties. So when we get the Jeremy Corbyn quote “avoiding a No Deal Brexit” my (absolutely less than diplomatic) response would be “If you weren’t such a stupid dick, you could have done something 2 years ago, but you all played the ‘it will blow over’ tactic ignoring the democracy when they majority decided to Brexit!“, and now the mess is becoming even larger as London lost the option for hosting the Aramco deal. We even see Dutch issues with: “Dutch Foreign Minister Stephen Blok said on Thursday that “serious talks” on Brexit had taken place in Brussels this week, but warned the two sides “are not there yet” on a deal“, there was never going to be a deal, all delays were set to try and overthrow Brexit, now you see that there will be a much larger impact and there will be trade deals in the end no company will walk away from the option to tap into a 69 million consumer base.

That was a clear setting from the very beginning, anyone ignoring that part is delusional. Let’s not forget that the need to exceed shareholder expectations also automatically imply that the EU customer base representing half a billion people also means that 13.5% of them will not ever be shunned, someone else will walk in and take over.

For some, the entire Aramco was icing on the cake and now that this falls away and falls away from Europe also means that the EU will have several grim numbers to report in January 2020, plenty of people are already scared whit less and ready to retire as soon as the October 2019 numbers are released.

When in doubt, never trust Status Quo to actually remain. It is the deadliest of traps and it just sprung.

 

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Bitches on parade

Yes, the time is now nearing. Bloomberg gives us (at https://www.bloomberg.com/news/articles/2019-08-25/bankers-head-to-saudi-arabia-to-compete-for-world-s-biggest-ipo), and as it starts with “Global banks will this week start making their case on why they should be hired for what’s set to be the world’s biggest initial public offering“, we see an interesting shift. It is the initial public offering (IPO) towards Aramco and all the bankers are dressing up like they are the bitches on the Easter parade. The question is how will these American bankers be seen? Those who were eager to exploit their options; events emphasized via media friends these so called events of Jamal Khashoggi. Should they be allowed to make a bid? As Bloomberg informs us on “The oil producer was originally working with Evercore Inc. and Moelis, as well as HSBC Holdings Plc, JPMorgan Chase & Co. and Morgan Stanley“.

Now let’s walk a little time line, Morgan Stanley chairman and chief executive James Gorman gave the people on January 24th 2019 (several sources) ““The murder of Jamal Khashoggi in the Saudi consulate in Istanbul was utterly unacceptable,” Gorman said as he responded to questions on a panel“, yet actual and factual evidence was never presented, was it? Merely speculation on events and evidence that remains debatable. OK, I feel certain that Khashoggi is unlikely to be alive, but there is nothing pointing at ACTUAL evidence and the essay by Agnes Calamari never changed my position. Perhaps merely wrongly chosen words by James Gorman, which now implies he should not be part of this $100 billion+ windfall (I’ll take his place). Then we get to J.P. Morgan Chase CEO Jamie Dimon, he pulled out of the conference on October 2018, so he should be disregarded as well (I’ll fill in for him too). Now, HSBC Holdings Plc held their ground, in light of innuendo, the active use of implied events that remained unproved, HSBC Holdings Plc kept a straight wave; this was business, not emotion, so I say welcome HSBC (if I had a say in the matter).

And the story on Evercore Inc. and Moelis is simple, they blew their chanced way before July 2019, as such it seems that they are out of the picture too. I am of course willing (for a modest fee) to take any of those three seats, business is business. I have no idea what I would be doing, yet uniting with HSBC whilst we share 50% and I get a really nice retirement bonus to unload my part to them is not out of the question. This is a market worth well over 100 billion, I’ll be really willing to take a 7.5% part and hand the rest over to HSBC, I reckon that I am the first person in their history to hand them close to $40 billion for them being supportive to my needs, the average hooker gets $50 at best, so there! Oh, and I do realise that there are Chinese banks eager to take place, so it might end up being a three way split.

And a man like me has dreams, with that amount a nice house in belle air and a super yacht becomes an actual reality (yes, I am typing this whilst I am not awake at present). The stage for me is simple and clear.

For the other players the case is less nice. I believe that those being sanctimonious and hypocrite need to be held to account. There is a consequence to play certain games and resetting the ledger so that they can courtesan themselves into a market worth will over 100 billion is not that acceptable to me and it should not be acceptable to you either.

The entrepreneur gave us yesterday ‘Why Saudi Arabia Is Being Increasingly Seen As The Place To Be To Start A Business In The Middle East‘ (at https://www.entrepreneur.com/article/338516), they are right, but they need to see the thorns that the roses bring. the article starts so nice with: “Alper Celen’s decision to trade his cushy job at the prestigious global management consulting firm’s Scandinavian offices for a move to Saudi Arabia to grow a start-up there didn’t make much sense to his colleagues“, yet these players need to realise that this is an Islamic nation, under Islamic law and etiquette. It is a lot more rigid than France is and I have seen a 6 figure Euro deal fall away because the salesperson accidentally used ‘pour toi‘ (informal) instead of ‘pour vous‘ (formal), the buyer walked away and went straight to the competitor. When it’s merely €100K most ‘big players’ will shrug, yet now the game comes in suitcases set to the billion dollar plus that game becomes a whole new dimension. The problem is that those you talk to are indifferent to the billions, it is their bread and butter for you it optionally is not. Those players in dime sized poker games are all willing to bluff like the cardinal for the large games, but a bluff is still a bluff, when you are found out, or seen as unworthy, you will lose a lot, you will lose it all and you might not have the means to get back from where you came.

Yes, you can win big, but the whole game is larger and there is every indication that the Saudi families have kept score on those rallying behind a journalist no one cared about, with a larger lack of evidence of any kind. Soon we see their move and their idea of the Easter Parade flaunting their dresses on Takhassusi St hoping that they are still regarded to be in the game and perhaps they are. I merely wonder if they should be allowed to be in there (HSBC excluded from this consideration).

Now that Vision 2030 is off to the races they all want in (as would I), yet in all this, after all they did and all that they connected to, should they be allowed to? We have to pick certain fights and that is fine, we have certain values which make us jump in certain directions and that is fine too, but to make a 180 degree turn when it is about the money, should we accept such a party in that event when there are hundreds who want to take a slice of that cake? I do not think so.

The events regarding the Saudi conference were larger, there was a distinct impact and as such those play that game should not be allowed to play when the large trophies become available. I lost my option to an apartment in Rotterdam because I did not have the right ‘friends’, OK, fine, but you cannot rely on me giving you a pass when you come knocking. It is then a tits for dad situation at that point and now that there are really serious gains, those people should always be disregarded.

I suddenly remember a quote from Age of Ultron; there we hear: “Keep your friends rich, your enemies rich and wait to see which is which“, well Saudi Arabia found that out, after they discovered that, they have no real need to keep the charade up, so as I personally see it, goodbye Evercore Inc. and Moelis, JPMorgan Chase & Co. and Morgan Stanley, it was nice knowing you. The nice part is that when they are evicted from the offer, they will have to reconsider the game they played, the media they embraced and the values that they gave to fattening the cow whilst ownership remained in the air. I actually love it when people get to learn a lesson by losing billions, it feels like that for one moment, one tiny moment the playing field was level for all of us.

The Aramco train is now officially on the road and we will hear a lot more in the coming month, I for the most will be most interested to see how much the Chinese banks end up with. And yes, I have woken up and I know that any chance for any of those billions were delusional at this point. Yet there is always tomorrow.

Hot News

In light of all this, Al Jazeera reported less than two hour ago ‘Houthis ‘fire 10 ballistic missiles’ at Saudi airport‘, at this moment, I see Arab News, Saudi Gazette and two more all having a version of that, yet nothing on the BBC, not the Guardian, not the Washington Post, not the LA Times and not Reuters. I got the news before all them and I have nowhere near their tools. So, are you still convinced that some people should be allowed at certain tables to fill their pockets whilst they shun the people whose money they want? And as we realise the quote “The rebels fired 10 Badr-1 ballistic missiles at Jizan airport, killing and wounding dozens, the group’s military spokesperson said in a statement on Sunday“, a quote made by Colonel Turki al-Malki, we need to see that US corporations are playing a convoluted game. Consider the impact that some have, do you think that when the newsgroups get wind that something really matters to the heads of these banks that they go to bed and sleep, not with 100 billion for grabs. The world media is all about fairness and then jinxes the game by taking balance away. From my point of view it is increasingly important that those players are denied a seat at the table (any table for that matter). Saudi Arabia needs to take a hard look at who they consider their friends. In light of all the unreported news of events by Houthi forces I feel more and more inclined to think that the US is turning into a player that no one should ever consider an ally, their only allegiance is to currency, I hope that the people who need actual allies realise that part before it is too late.

 

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Nationalisation, the second tier

The news is fresh, it is new news, yet it was foreseen, it wasn’t really news, but the drive has come visible, much more visible than most expected. As some might focus on the Guardian and the image of a beautiful young lady as she is afraid for her life, as she seeks refugee status in Australia, we see all the men and many women feeling sorry for Rahaf Mohammed al-Qunun. It might be correct, it might not. I do not know, yet what the Guardian is not telling you is seen in the Arab News (at http://www.arabnews.com/node/1431206/saudi-arabia), there the news is: ‘Saudi Arabia goes full steam with Saudisation of sales jobs‘. I think it is good that any nation pushes for national held jobs, no matter what country it is happening in. So as we read: “Saudi Arabia’s Ministry of Labor and Social Development announced on Sunday that it would be providing citizens with job opportunities in an attempt to reduce unemployment. The job opportunities will be in sales roles, including medical equipment stores, construction and building materials shops, car spare parts shops, carpet shops and sweets shops, according to Saudi state news agency, SPA.” I think it is good that the news is seen, yet what about the impact? It is not a national thing, it is regional, Oman is doing the same, Qatar has been doing it for a while and the UAE is on a similar trend. If it works it is great, yet what everyone forgets is the announcements of 6 months ago, this basically impacts Google, Apple and a few other players (the FAANG group as a whole) as they were opening their offices in Saudi Arabia as well, so from the Saudi view it is great to be Saudi. Many people all over the world dream of a Google job and now we see that Saudi’s are added to that knowledge pool. And that is what it is a knowledge pool that can drive Arabian IP to a much larger extent. In light of Neom City, in light of new Financial Districts in Riyadh, we see the opportunity for growth, yet do these events constitute actual growth as that question is equally important.

If we accept the same news two days ago (at http://www.arabnews.com/node/1430961/business-economy), we see that the headlines might give us ‘CEO of Saudi Arabia’s newest technology investment fund STV shoots for the moon‘, we might giggle, yet perhaps that same feeling came upon us when in 2001 a man named Mark Zuckerberg had an idea, how did that end? We can also consider that as Abdulrahman Tarabzouni is a MIT graduate, so he optionally has a better education than Mark Zuckerberg had (Harvard), which is me, myself and I starting a competitive flame between those two schools. The nice part here is that the STV (the investment fund) has half a billion to start with, so they can cream the best start-ups to truly grow their perspective and turn it into billions of wealth, if properly set their idea of a hundred times over might be conservative. We tend to not look into those directions, yet the ownership of IP is not merely an essential it is a wealth maker and a wealth breaker and as an MIT graduate he would (read: should) be able to see the difference between the wheat and chaff, it makes for all the difference.

Even as the Arab News introduces in opposition: “Some analysts point to two difficulties in the STV strategy: The high valuations of the global technology sector, and the comparatively high levels of geopolitical risk associated with the region, and the Kingdom, in the minds of some foreign investors.” We need to recognise that being first implies the avoidance of ‘high valuations of the global technology sector‘, the second part is ‘geopolitical risk associated with the region‘; that second part might not be zero, yet there is no clear danger to the Kingdom of Saudi Arabia, in addition as the footing of Iran diminishes the growth of Saudi Arabia will flourish, as well as the fact that the involvement and connections of Abdulrahman Tarabzouni with Saudi Aramco, Careem, Morgan Stanley, Oracle, Microsoft, Syphir tech company, Google, Member of investment committee, Middle East Venture Partners, as well as advisory roles at public and technology institutions in KSA, it would be my personal believe that if this person cannot navigate the rivers of political risk, no one would ever be safe to invest in Saudi Arabia and as we see billions from the FAANG group go that way soon enough, we can pretty much consider the second risk a dud in all that (for now).

The progress that Saudi Arabia is showing in 5G, now equalling the largest players on the western hemisphere shows not only the commitment for the Middle East, it shows that Saudi Arabia is taking the non-petroleum options extremely serious. It goes even further when we consider the news a mere 4 hours ago: “T-Mobile CEO to regulators: China is beating US on fast 5G wireless but our Sprint deal can change that“, how exactly will that happen? Merging Sprint and T-Mobile sounds nice, but they still lack higher technology equipment, Huawei beat them and the longer these players remain in denial, the larger the damage and that is where the STV can cash in. Any Huawei linked technology start-up has close to a 20% advantage over anything else. Let’s not forget that players like Verizon are not really using 5G, or as they say 5G Evolution, which I discussed in ‘Tic Toc Ruination‘, where we see: “We are given “Verizon’s network is not yet 3GPP compliant. It uses Verizon’s own 5G specification, but will be upgraded to be 3GPP compliant in the future“, so does that mean that it is merely a Verizon issue opening the market for Sprint, or are they both involved in that same pool of marketed pool to some form of ‘5G’ branding, and not the standard?” (at https://lawlordtobe.com/2018/12/06/tic-toc-ruination/), something clearly seen from various sources a month ago, so how was their technology backdrop solved? It was not! I made additional observations in ‘That did not take long‘ (at https://lawlordtobe.com/2018/12/22/that-did-not-take-long-2/) where we see: “we are (again) confronted with what Neville Ray CTO of T-Mobile calls: ‘duping customers into thinking they’re getting something they’re not‘, America will not end dead last here, but they will be trailing (as currently is implied) behind more than one Middle East Arabic nation“, an observation I made on December 22nd last year, so not only am I proven right a few times over, the fact that for what I observe to be high paid people hiding behind presentations and wording whilst not having the actual goods is merely the facade of defeat presenting itself as ‘innovative opportunity‘, so we are watching these people heralding their Edsel whilst it is about to go up against the Maserati Gran Turismo and optionally the Mercedes-Maybach S 650 Sedan as well, and in what Universe does the Edsel have any kind of a chance? Parking perhaps (it is not that big) but how can you see innovative technology as innovation when parking is your only way to shine?

the sad part is that I have been talking to stone walls for 2 years now, the upside is that when they fail I have the documentation showing just how stupid they have been, and the end is nowhere in sight. I prepared issues on optional 5G tourism, cyber protection and a few other places that will really open up the valves of disgust from consumers when they are confronted with the impact on their daily lives. Even outside of governmental infrastructures Huawei is set in a stage where they have billions in optional business in both information and SME environment. The large presentation based players (like 5G Evolution) were so intent on pushing the large infrastructure that they forgot that actual business comes from other area’s and when the first sale is done, they are merely left with the stage where they wait for consumers to catch up, that part is no longer a given. We see part of that (at https://asia.nikkei.com/Business/Business-Trends/CES-2019-to-offer-glimpse-of-future-for-5G-AI-and-Huawei), where we are treated to: “About 4,500 companies are set to take part in this year’s CES, which continues to expand beyond consumer electronics as tech pervades once-mechanical industries like automotives. China now stands out in developing and applying both 5G and AI technologies. A decade ago, Japanese home electronics makers had a substantial presence in the Central Hall, an area packed with big-name companies. But as they have lost prominence, Chinese companies have emerged to fill the gap. Huawei Technologies, Alibaba Group Holding and Haier Group will all have exhibits in the Central Hall.” This matters as it is direct visibility; this is the direct stage in Las Vegas and its CES2019, people will get to see 4500 companies and some there proclaiming to equal Huawei, yet less than 5 will optionally have something to show the people on that level and I am speculating that they merely equal Huawei at best and this is one month before the Mobile World Congress 2019 in Barcelona where Huawei is set to take the centre stage and most of the attention. We cannot speculate what we will see exactly, but we will know on Sunday 24th February, and we will then optionally see the Samsung 5G router (not Mobile) and optionally several 5G mobiles, yet at that point we can use the dictionary torpedoes to sink that hype seeking content, contant that we have been exposed to from several sources. That part is not only visible, the results as shown by one source, gives us that AT&T is just not up to scrap at present.

Even as I have no real confirmation on how accurate the results are (so be aware of that), we are shown what PC Mag gave the people earlier and with the cautionary footnote (as would be appropriate): “remember that these are just test speeds ant that they will most likely improve with time. More importantly, there are still no 5G smartphones available yet, so these tests in the AT&T 5G network are just part of a process“, the fact that we see the results as in the image are bad, really really bad for a 5G environment!

From my point of view, test or not, their 5G should have knocked it out of the park leaving us with the entire 5G Evolution bit as what I personally would see as a sham, not a champ.

Nationalisation is only as good as the goods you have and in this the partnership with Huawei was essential and at present more and more technologists are stating the same thing. So those with a Huawei partnership will leave the others behind them on a larger scale in several layers and structural foundational flaws, the impact when the others cannot deliver will be fun to see, especially to mock on a daily foundation. I reckon that we have that right when we are treated to bloated presentations where we are left in the dust with the message: ‘It is great to be a consumer, in this age‘. Do not worry, we have his number and will point out that flaw soon enough several times.

We are finally seeing the impact of iterative technology versus frog leaping ahead. The iterative players will soon diminish, so from the Saudi point of view, they did bet on the right horse and that impact will give them multiple victories soon enough. You see, do you still think that the larger players will stay in a place with inferior abilities? When exactly was that ever an option for those who wanted to stay in the major leagues of technology?

 

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Up for grabs

Have you ever considered a deal that is almost too sweet to consider. Have you ever walked straight into a room seeing that one special item thinking that the price is off, too good to be true. Yet, you look again, as inconspicuous as possible and as you do the maths in your head three times over, you start to realise that you are there, others are there but they either missed the deal, or they were looking at something else. That is where I find myself this morning. Not unlike a day in 2001, as I walked into a small obscure bookshop where I noticed the original 7 hardcover books of Tolkien’s the Lord of the rings with his autograph, the price? £39, I felt like a thief when I paid the man, he sold it with a blank expression in his eyes. I walked out shaking like a leaf and I remained in denial for at least two more days. This is how I feel now when I look at Handelsblatt Global (at https://global.handelsblatt.com/finance/goldman-sachs-weighs-deep-london-cuts-amid-brexit-concerns-685516), where I see ‘Goldman Sachs Weighs Deep London Cuts amid Brexit Concerns‘, could they actually be this stupid? Could I get my fingers on Goldman Sachs for almost literally an apple and an egg? That is a Dutch expression for selling or purchasing something for anything massively below expected price. Like buying the Ducati 1299 Panigale for only £99.95. It’s a world gone mad, and in this case Goldman Sachs will end up doing their own devaluation. Consider the facts. They move away from the central Hub London, which has been there for a lot longer than the Euro, they are now moving to Germany where there is a civil law system and the KWG (Kreditwesengesetz) is Iron Law. Whilst at the same time, its two nephews German Solvability Directive (SolvV) and German Mindestanforderungen an das Risikomanagement (MaRisk) can rock the foundations of the Goldman Sachs board in Germany in ways they have never comprehended (or so it seems). That is the move they are ‘advertising’? That article, with a picture of Lloyd Blankfein, the CEO of Goldman Sachs, like he is looking out of a window wondering where the hell his retirement is at. At that same move, we see the quote “Personnel in Goldman’s trading business who develop new products as opposed to advising customers would move to the bank’s headquarters in New York, the sources said“, so those making new products will move away from the area of the people buying it, so they either fly back and forth (impacting contribution) or work remotely alienating their customer base. So is this a serious considered move?

If so, than Goldman Sachs needs to realise fast that once their UK base is deflated to the size they claim, and when the Frexit vote passes, Italy and Germany will not have any options to keep it all afloat. More important, with logistical options diminished and having pissed off France and England, they would have to face conditions to move to France and they end up not getting a foothold into the UK to the degree they once had, because the competitors of Goldman Sachs, like Morgan Stanley would have gobbled up a few of the London links Goldman Sachs lost, in addition, CITIC who took a few body blows will be hungry for whatever Goldman Sachs left in the air as they moved to the mainland, lowering the value of Goldman Sachs overall. In that atmosphere Lloyd Blankfein needs to realise that the move is more than just a bad idea. Perhaps he does know, perhaps this is another shot over the bough to the UK telling them to play nice or else. This from a firm who in a 639-page report was accused of misleading investors and setting out to depress the US mortgage market, ensuring that it would win high stakes bets that the market would fall. That firm is playing footsie and chicken with the UK? Well, that is one that they will not just lose, it will be the act that any person with an apple and egg (preferably boiled hard) could walk into the board of directors offering that as payment for the firm. I wonder who in that board of directors will take the offer first. For the Macquarie group the move would be very nice, that group could grow a lot. They might resort to taking the small fish that Goldman Sachs left alone, but those 800 firms might not have stellar results, but they have remained stable for at least half a decade and even as we agree that stable is not sexy, it does make for a very nice secure foundation to grow on, good luck getting such results from Poland, France or Spain. and as France and Spain are founded on the local markets for language reasoning, the Frexit groups will see Goldman Sachs as a remnant of dire pasts, is that regard there is (a speculation by me) the chance that Goldman Sachs would, through the move facilitate the customers they had to port away as those clients are no longer represented through London, which still has a sizeable value to the clients they had whilst in London.

You might think that this is all untrue and that Goldman Sachs will continue in London in a diminished capacity. Well, consider that one of the largest greed driven entities is downsizing by 50%, do you think that this is merely a corporate downsize? the 50% moving away had its jobs to do, by doing it somewhere else, it is not doing in an additional location, it is doing it in another place, with a different set of admin laws and goals. If you had an accountant, and he is sacking 50% of its staff, do you think you get the same level of service, or is it possible that whomever remains in London needs to look at twice the amount of clients? And if we accept that, how much care will you receive at the same amount of annual contribution? With its posturing Goldman Sachs forgot the cardinal rule, it needs clients and clients in the UK remain, clients remain but their perception on begotten service will diminish and they will seek the firm giving them the service that they expect to receive, the time they expect to receive and GS will be only half its size with other offices in different time zones. So yes, there will be a consequence for Goldman Sachs. The offer that seems too good to be true. So as CITIC, Morgan Stanley start their campaigns, their visibility with advertisement like: ‘the firm that has been in London for the longest of times remains, and we will give the same amount of attention and resources, dedicated to you, your business and what you need‘. That firm could start up softening the Goldman Sachs clients and the moment the announcement of the move comes they just need to invite those clients to a nice breakfast meeting with a deal ready to be considered for signing. You see, the moment the move is announced and the moment Frexit will seriously start, the investors will realise that the UK market was a lot more important and when XNYS:GS hits (-4.62%), I’ll just walk in holding an Apple and an Egg seeing who in the board of directors will take the deal.

As HSBC and UBS are closing ranks with Goldman Sachs, you have to consider that I am wrong!

That is only fair. Let’s face it, I have no economic degree. Yet, when Brexit came, when it became something serious, these people were all ignoring it, they were all claiming that it would never go this far. I was proven correct and now the Financial Gravy Train is changing gears as it’s not as profitable as some expected it to remain, those people are trying to restore their Status Quo and their amount of gravy per pay check. Yet, the unfounded move, the emotional outcry of these people making no less than 50 times the average income, those people are trying to force open a dialogue and a new place of exploitation. The quote: “UBS chairman Axel Weber said that about 1000 of the Swiss bank’s 5,000 employees in London could be affected by Brexit, while HSBC Chief Executive Stuart Gulliver said his bank will relocate staff responsible for generating around a fifth of its UK-based trading revenue to Paris” is actually a lot more funny than even he realised (at http://www.afr.com/business/banking-and-finance/goldman-sachs-hsbc-ubs-all-warn-of-moving-jobs-from-london-on-brexit-20170118-gtu8cj). You see, Frexit is still growing and it is slowly becoming a realistic prospect. So when the Wall Street Journal stated 15 hours ago “A “Frexit” would likely unleash chaos across the currency union and undermine the broader EU in a way Britain’s departure wouldn’t“, we now see that those 20% revenue generating people from UBS will be on the shores of a Civil Law country  whilst the confusion is only increasing. As for the other part of me being correct, we’ll have to make this small sidestep. On May 15th 2013 (yes 3.5 years ago), I forecasted in ‘A noun of non-profit‘ (at https://lawlordtobe.com/2013/05/15/a-noun-of-non-profit) “Consider a large (really large) barge, that barge was kept in place by 4 strong anchors. UK, France, Germany and Italy. Yes, we to do know that most are in shabby state, yet, overall these nations are large, stable and democratic (that matters). They keep the Barge EU afloat in a stable place on the whimsy stormy sea called economy. If the UK walks away, then we have a new situation. None of the other nations have the size and strength of the anchor required and the EU now becomes a less stable place where the barge shifts. This will have consequences, but at present, the actual damage cannot be easily foreseen“, I made the prediction of loss of stability, in addition, a quote not from me “Movements in sovereign spreads affect CDS spreads and bond yields of Italian banks, and are transmitted rapidly to firm lending rates“, this was predicted by Edda Zoli at the IMF. Do some of you remember the issues in Italy on losing the credit rating it had is now a clear marker to consider. Even as the parameters for the Italian downturn are not matching completely the elements in play include the ones I and Zoli stated, meaning that Italy will get a few more negative bumps to deal with (not major ones though).

You still think I am that wrong? I have been involved with data cleaning for decades, I have seen the ‘weighting games‘ some played and now that the party is over, they are running for the high ground, whilst making boasts of clearing away from the market like horse traders. This is all fine, yet the players that are not as big can now shore up their levels of stability growing their overall value by a massive amount, because that is where the UK now is, its economic forecast is growing and the rash statements are doing the opposite as the competitive peers of Goldman Sachs are almost volunteering their free time to help Goldman Sachs pack up and leave the UK so that they can move in on the Goldman Sachs share, because there is no way that Goldman Sachs will not lose a fair chunk of it.

So as Frexit grows (I never expected it to be this strong at present, just a really serious factor), we now see that Marine Le Pen is now leading the polls for the first time after taking advantage of Fillon’s declining popularity among France’s working class voters. I think that this is not the only part, the increased forecast of the UK is doing equal reinforcement of the end of the Euro and perhaps even the end of the European Economic Community. Not because that was the goal, but the fact that all these small nations were too deep in debt and Italy, the third anchor is in massive problems, that large barge cannot remain afloat with only the German anchor in place. My view of 2013 is now showing to be the correct one.

Is it a done deal? No it is not. Someone with actual power in Goldman Sachs could realise that these boast fests are counterproductive and that the boasts only achieved that some doors can no longer be opened by Goldman Sachs. They would have to call, make a proper appointment and they would have to sweeten whatever deal they are hoping for, impacting their dividend in the process. Goldman Sachs played a hand that held a few Trump cards (pun intended) and without those the next few hands will need to be played extra careful and cautious. You see, they lost a little more because those playing now might not have considered 2012 Amsterdam. There we see: “De bank verloor in de nasleep van de crisis veel klanten door negatieve berichtgeving over de rol van Goldman Sachs in de kredietcrisis van 2008. De bank wil deze klanten nu terugwinnen. Het nieuwe kantoor moet vooral de dienstverlening naar klanten toe verbeteren” meaning “translated: The bank lost in the aftermath of the crises many customers through negative messaging on the role of Goldman Sachs in the Credit Crises of 2008. The bank wants to regain these customers. The new office will have to increase the service levels to clients“. This part has two sides, not only regarding clients they will lose in London, in addition, the Dutch clients had a benefit in time zones regarding London, and they will not have that with Germany. So there is more than one fish on the Barbie (read: BBQ) and the impact will be felt and smelled. You see, Amsterdam was never an option for Goldman Sachs, yet as more important reasons GS frowned at the capping of bonuses in 2013 as mentioned by minister Dijsselbloem at that time. Which is rather funny as Germany in this 2017 election year is actually moving in hard on to cap executive pay. This we got from Handelsblatt Global Edition just a week ago, so the move could potentially come with a few nasty sides for those working through the move.

OK, I will admit that Goldman Sachs might not be up for grabs, but it should be clear that if they do move, they will be receiving a few body blows and those come at a price for many at Goldman Sachs. The question however is not, if that is the hard part, the hard part comes when the winner is announced in merely 16 weeks, at that point we will see how realistic Frexit has become. You see, it is not just Marine Le Pen and Front National, Independent Emmanuel Macron, former economy minister will also hold the referendum and together they represent a lot more than a mere majority of the French population, the fact that this reverberates with the populous is an issue for too many as he is not proclaimed left or right, he places himself in the middle making the Fremainers a minority with less and less people in it. Making the move of Goldman Sachs to Germany lacking wisdom as France and the UK will have to unite in whatever trade deals they can have meaning that the UK forecast will grow faster and faster, whilst the French forecast will be less and less dire. The only one who gets to look at that label will be Goldman Sachs.

What a difference a boast makes! Could be a nice future Goldman Sachs slogan, if they survive the ordeal!

 

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In This War!

We look at the news that is now taking on a she said, she said path, whilst he said is ignored towards what another he is stating. This is not a battle of sexes (which is a nice change). No this is almost like the US Senate versus Congress (also known as the fruits and nuts department of US politics), this is British politics in the Brexit phase that is now following. People dragging their feet, people going over simple narrow-minded seeding of statements whilst throwing the custard pies in as many faces as possible. It is like watching toddlers getting off the rocking chair. In all this there are also corporate players who have been hiding behind others whilst spreading unsolicited memo’s leaving them in the open to read with a ‘top secret‘ stamp on it. It almost feels like the GCHQ soap that we saw in Cheltenham 1991 (could be 1989 or 1990).

Anyway, when we hold people to account for their statements we will get these ‘miscommunication’ issues which will waste everybody’s time and it will not get anything done. That first part is seen in the Guardian in an opinion piece by Toby Helm (at http://www.theguardian.com/politics/2016/sep/10/brexit-camp-abandons-350-million-pound-nhs-pledge). My issue started with “dropped their pre-referendum pledge of a £350m-a-week spending bonanza for the NHS“. Let’s be clear here! Nigel Farage has stated on several occasions that the 10 billion pounds (34 million a day), should not go towards the EU, it should be spend in the UK on people for the UK. In addition, he stated on Good Morning Britain that he could not guarantee that it (£350 million a week) would go to the NHS. That was months ago! Even earlier (at https://www.youtube.com/watch?v=bkr_Qjey8s8), we see Nigel Farage talking about the debate that is required around NHS. I believe he is right, in all this the debate he opened is one that the Tories and Labour aren’t stating they are slinging mud. In that part we see that Nigel was promising to put 3 billion (out of the 10 billion) towards the NHS. It was an intent to do!

He literally said ‘we could put 3 billion pounds‘ (around 5:55 into the story). Means it was not a given, just an option! In this Nigel Farage was right. Labour and Conservatives had ideas which meant borrowing more money. Also, let me remind the readers that it was Labour who stuffed up the NHS IT program costing the tax payers 11 billion pounds. It was a complete failure and large loss, one of the largest the NHS ever faced.

Now of course we can sling mud all over and as a Conservative I guarantee you that you will lose at that point. The NHS is on the verge of collapse and neither side has done anything to truly take care of business. UKIP sees it as a disgrace and so it should be, because it has been known for over 15 years that the UK is largely an aging population, meaning the pressures on the NHS will only increase, that while it is being drained. In this we also need to take a look at the TTIP and the dangers it poses. We can try to have faith in the marketing joke the EU is when we see the focal point that is useless (at http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_153010.4.7%20Pharmaceuticals.pdf). This is especially seen when we see the elements around protecting Intellectual Property:

– Companies to profit from their research and remain amongst the most competitive in the world- Patients to benefit from new medicines.
We won’t negotiate anything in TTIP which would:

– Upset this delicate balance, or
– Increase costs for EU countries

The TTIP is about profit, especially for American Pharmaceutical companies!

Places like EFPIA are not lying to you, they are just misrepresenting the needs. Because a strong TTIP is not what they state ‘How a Strong Pharmaceutical Chapter in TTIP will Benefit the EU‘, it gives massive powers to the Pharmaceutical industries, whilst stopping generic medication from getting in. And here is the crux for the NHS, to get part of their budgets to meet up with reality, there will be a massive need for generic medication. For over 2 years I have pleaded to get stronger ties with India that has a growing market of generic medical solutions. A partial solution can be found here! Now, it will not solve all, there are still patented medicinal solutions we need and they will be bought, yet the fact that pharmaceutical industries want another 20 years of exclusivity is just not proper, not realistic and not acceptable. The US should have cleaned house in that market decades ago, but they were only focused on flaccid politicians requiring Viagra. Now that the game is up they all want a little more (read: twice as much). This is not how patents are supposed to work, they never were!

Consider the following two quotes: “The EU and India are taking steps to end a trade row sparked by an EU ban of 700 Indian pharmaceutical products after New Delhi cancelled talks on a free trade accord earlier this month“, which was in August 2015 by the way! As well as “Modi personally argued that the long-stalled talks on a free trade accord should be revived, India’s turnaround puzzled the 28-nation bloc, which insisted the ban was a minor, technical issue unconnected to trade“, it was all about the product, not about trade, the issue that the EU licking the heels of Washington gives us “the delays risk leaving India isolated. While Modi is trying to double India’s global exports to $900 billion in five years, Europe’s top negotiator now spends more time on the Transatlantic Trade and Investment Partnership (TTIP) with Washington“, you see, this 900 billion market is stopping an almost 2 trillion market of US pharmacy. Even if it is not all UK, what would you rather see? The NHS spending 90 million, or 2 billion on the same amount of medication? Let’s not forget it is down for over 13 billion at present. The NHS needs this generic solution and at present having strong ties with India makes a lot more sense than the ties with the US that are bringing the UK down, all because they would not clean their own stables!

This is and remains the foundation of Brexit, so when we see the Guardian quote “Anna Soubry, the pro-Remain Tory MP and former minister for small business, said it was outrageous that the Leave campaigners had “peddled that lie” during the campaign and were now quietly abandoning it“, we need to tell Anna Soubry that she needs to stop whining like a politician and start giving out papers that clearly define on how the NHS can be stopped to collapse, because as a fellow Tory she does know that from the moment the Tories came to power in 2010, too little has been done to revive the No Holy Sanctum, so actions are required. The fact that the previous administration from 1997 onwards also made its shares of mistakes as well as waste an additional 10 billion, means that massive effort needs to go into the NHS, having to listen to a whining Anna Soubry (in this matter) is a waste of everybody’s time. I am actually not happy to phrase it this way, because Anna has had quite the political career. Not into the limelight for too much, but I always saw her as upcoming House of Lords material, mainly because she has been outspoken on more than one occasion, at times this is how we hope our Lords would be. I never minds whether a person was right or wrong, just that they would be an evolving wisdom. Those vague stating politicians (as too many are) would never be Lords material, Anna still is in my eyes. This does not mean I will agree on her, or on my party. Things need to get done and too many aren’t getting it done.

In addition, we see all these financial doomsayers who are now resetting the view of Brexit in less negative ways. It is not as bad as they thought it was. This is their view on managed bad news. Another piece of the puzzle, where too many people were trying to demand that the Status Quo remain. When spending has not had the incentive of growth and managed bad news was used to dim the impact, now we see the opposite where their doom is not happening and now they are revising the numbers upwards (at https://www.theguardian.com/business/2016/sep/09/city-banks-revise-brexit-doom-and-gloom-forecasts). Here we see the ‘bitches’ of Wall Street: Goldman Sachs, Morgan Stanley and Credit Suisse revising their numbers as the trade deficit is now falling for the UK and that gap is now optionally turning into the momentum of a better economy. So, is my view too extreme when we see the quote “Morgan Stanley initially forecast the economy going negative by 0.4% in the third quarter of 2016, but this week changed that to expectations of 0.3% growth“. This makes me state ‘How stupid or non-comprehending is your staff?‘ I would like to add personally to James P. Gorman: “You now have 7 quarters of data showing that managed bad news is never a real solution and that the Status Quo of finance is a mere illusion. So will you in the near future clean house and start being a visionary instead of remaining a facilitator?

I know, diplomacy has never been my forte, yet as Apple is likely to lose up to a 2% market share over the coming tax year, he needs to wake up and kick the right people into gear before he has to do a negative 2 trillion dollar speech, and perhaps I might just have oversimplified the problem for both you and him!

These are only parts of the solution, but we need to tackle them one at a time. Because the intricate mess both sides of the isle is trying to make them will not solve anything. I will go one step further, I am almost driven to get one additional degree in Medicine, move to the UK and work at the NHS trying to resolve the problems! You see, one of my lifelong idols is Lord Baden-Powell. I was never a boy scout (in more than one way), but I have always taken one of his quotes to heart “Try and leave this world a little better than you found it!” It is the master of all thoughts, because it does not make you solve things, it is not my burden, just leaving it a little better, a little cleaner is all we all need to do. The simplicity is that if all 68 million Britons do just that, we could all turn the UK into the paradise it once was and can be again in almost no time at all.

The simplicity of any solution is the one step you actively take! Because when it is done you take the next step! This is what happens when we are not stopped for too long by too many managers trying to figure out WHAT to do, just to start doing it. That is the brilliance of Brexit. That step has been taken, now we take the next step and the one after it. So many politicians have been too worried about looking good that they forgot about actually doing anything good. I reckon that the inactions towards the NHS and housing are ample pieces of evidence to show that I am right, and the Mud Ladle of Blame goes to both sides of the isle.

In all this the one massive reason for me to remain towards the Brexit side is the one no one seems to discuss, or perhaps the press is being told not to dig too deep into that side. You see, one of my major issues has been and still is Mario Draghi. Bloomberg gets close with the quote “About three months ago, the Draghi-led European Central Bank started buying corporate bonds in the region for the first time. The results have been dramatic and, at times, alarming” (at https://www.bloomberg.com/gadfly/articles/2016-09-07/companies-are-getting-paid-to-be-rated-junk-in-europe). You see, the simple clarity is that you cannot use a credit card spending over a trillion thinking it will have no impact of your credit score. The quote “Investors are now literally paying European companies to borrow. Sanofi, a French drug maker, just became the first nonfinancial private company to issue debt that yields less than zero” as well as “Bonds of some investment-grade European companies now carry negative yields” are just two examples of the mess and the nightmare that will soon hit too many places. Then there is “Less clear is how investors are justifying purchases of junk-rated bonds that promise nothing and come with big risks“, which is what we saw on Cyprus and in Greece. No one is held accountable and those screaming for more money have no idea and no option to pay it back. It was never a solution! So Draghi spending a trillion plus leaving the credit card to be added to the workload of his successor is not ever a solution. Moreover, the EU nations have to come up with paying it back somehow, so leaving this collection of spenders seems much better than to play possum and ignore that credit card, because that debt comes with interest and there is not one government in the EU who doesn’t have their own national credit card maxed out, which means that our children will have to work of this debt. That is not a world I ever accepted to be in!

Now consider the last quote “Does this mean risky debt in Europe getting less risky? No. Fundamentals are, in fact, deteriorating, according to the Bank of America strategists, with investors recovering less from defaulted debt than they have in the past“, which is partially the problem and the issue I have with the USA. Wall Street is setting up a scenario that is reminiscent of the old Pyramid schemes, with the difference that they quickly want to cash in one more time and breaking free from whatever remains. It is wrong on many levels, so as there is one more round of bonds and stimulus, the previous instigators cash in and get out with as much as possible, knowing that they will survive in the next two decades whilst the ones not getting out drown and lose all. This is why the Draghi method is so dangerous and we need to get away from it Brexit was part one, although Frexit (part two) is not a guarantee, the fact that Sarkozy is now ready to set a referendum if elected should be ample warning for the US (read: Wall Street) that the status quo route is no longer acceptable and too many nations are willing to let it all fall back to nationalism if pushed, should be more than enough for Wall Street to find a ‘live with the loses solution‘. Something we all know will never happen!

So in this war there is the immediate need to stop misinformation and above all get something done, in this case fix the NHS, it should be the only issue on the agenda of both isles for the rest of the year, that whilst Brexit moves forward. It is a tall order to deliver no matter how you slice it, but whomever does will have the support of the people for a long time to come, because that aging population will still hold the majority for well over a decade.

 

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