Sunday 11 July 2010


** Summer-loving ** 11th July
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Honey-traps, spy-swaps, renegade prisoners, quiet politicians and the best week for financial markets in a year (Dow Jones +5.1%) as the world’s largest ever IPO gets going from another giant Chinese bank (Agricultural Bank of China - $22.1bn), punctuated a week that sees the start of the summer holidays in earnest, as the last of the schools shut their doors till September..ahh, those where the days of 3-mth long school summers. Another small victory for China in tandem with rising exports above expectations saw Google back-down from its chest-thumping as the allure of huge-profits overrode its “social-concerns” and subsequently brought the renewal of its operating licence on the Chinese mainland. As pressure momentarily eases for those involved in the always-strenuous financial world, it seems pressure has been increasingly emanating from FIFA on the incredible Madeeba (Nelson Mandela) to attend the closing ceremony of the world-cup tonight and it’s culmination as he hands the trophy over to Spain – yep, Spain.

You know summer is in full swing across the streets of great cities like London, when almost every spare square inch of pub-garden-space and pavement is battled over, ice-cream van queues packed with sweaty-children stretch for miles and restaurants mysteriously run-out of ice just when you order that all-important wine-chiller-bucket – I’ve never understood why they don’t stock-up the night before? Air-conditioning machines are as rare as an England World Cup win and the city generally does not cater for the heat, simply because it does not normally experience anything resembling a traditional summer!

A city more accustomed to the stereotypical doom and gloom of rain and heavy-grey-overcast transforms into a resplendent world-capital-city in the glorious sunshine, even if very few Londoners have actually gotten any sleep in the last month during those balmy evenings. If only the British would learn to refrain from complaining no matter what temperatures they are faced with. It doesn’t take a genius in the meteorological department to figure-out summers are getting hotter. Enterprising air-conditioning firms are working over-time to rip-off, I mean charge customers for urgent installations.

The London summers also brings another kind-of-wave. The annual Middle Eastern month-long-tour-of-Knightsbridge is well under-way, with the cars, the bling and the musky-scents all in full-force around Harrods and a few other carefully selected establishments, but little really outside SW1 (for more info please see last year’s piece:

With the economic crisis putting the UK towards the very-top-of-the-list-in-debt-to-GDP, austerity packages introduced in recent weeks and a concern for maintaining Sterling’s competitive position in the global currency market (Cable currently 1.50, exactly where the exporters and retailers want it) the welcome influx of oil-money spreading its way across every-facet of London life, from taxis to restaurants, the Dorchester to Harvey Nichols, should not be looked down at but rather openly welcomed. London is a lucky enough capital city to continue to attract the big-spenders from all over the world and ensures its always robust and enviable position as a city never destined for a deep-recession. There is simply far too much money here for that to occur and far too much money willing to enter the city on top of that.

Knowing your enemy when faced in battle is a critical factor in deciding between the victor and the vanquished. Getting into the minds and comprehending the culture of those that you are in conflict with is the only method to truly anticipating their movements and strategy. Ancient armies would frequently capture enemy soldiers and rather than subject to torture, bestow upon them gifts and other lavishes (you can guess what) to elicit nuggets-of-information about their home kind. So with all this knowledge of historically tried and tested methods, why are so many rookie mistakes made at top-levels of defence management? A recent report that, at the UK’s not-so-“secret” eavesdropping HQ , far-too-few ethnic minorities are employed surprises given the current commotion surrounding the revelation and subsequent deportation of a number of Russian and US spies.

In this day and age of global-fear-of-terrorism and constant communication coupled with the breakdown of cultural barriers across great swathes of the globe, all in the name of the “internet”, it is amazing that such a critical aspect of national-security and intelligence gathering can be overlooked. How can you truly tap-into the psyche of a hostile people and use that knowledge for good, if those willing to assist you are not given ample opportunity in the correct positions of influence. Even worse, apparently those ethnic minorities that are employed by such “intelligence-gathering” agencies are constantly subjected to taunts and remarks combined with ceaseless doubts of their allegiances – now come on, if you cannot even trust those that you have asked to help with the very matter of defusing a potentially volatile situation half-way across the world what hope is there for the peaceful conclusion of any efforts made in that actual land? Incredible how the lesson taught by history is all too-often ignored

On the spying theme, the heavy media interest in the swap that took place this week in docile Vienna can be attributed to the glamorisation of “spies”. The apparently low-level comrades deported from the US – even the ever-eloquent-Biden said “those guys didn’t really do very much while here” – were scrutinised from every angle and their entire life-stories picked through for the world to see. Not such a difficult thing these days with everyone posting endless photo-journals of their boring daily activities on Facebook.

The story quickly narrowed in-on, of course, of the more...shall we say...“easy-on-the-eye”...voluptuous Russian-with-an-English-name, Anna Chapman. The fascination across the City of London was especially amusing as investment bankers across the square-mile and as far as Canary Wharf could all be heard exclaiming “but I’ve definitely bought her a few drinks before!” on the revelation she had lived and worked in London’s financial industry for several years and under (ahem) some of those very same bankers.

Hani Kobrossi

Saturday 26 June 2010


** Burger-nomics ** 21st-25th June
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There are of course serious events taking place this week where world leaders gather to discuss the still stubbornly bad economy. They desperately seek a resolution that will ensure the viability of the current banking system and permit trust in sovereign debt for some years to come. The “Golden Rule” here? Well, he who has the gold - makes the rules. Watch for a number of well-sounding-bites-of-wisdom from the opposing US and Chinese delegations as the G8 followed by the G20 (wouldn’t want the others feeling left out now would we?) sit in Canada – my personal favourite this week “The economy is like water. Water does not boil at 99 degrees, but one extra centigrade can make a lot of difference” – classic stuff from China’s Confucius pedigree . Who says economics is not mired in science huh?

Our favourite scene of the geopolitical week? Easy come on! What better photo-op than Obama munching on a burger with Medvedev whilst sharing a portion of fries at “Ruth’s Hell Burger”? I’m sure there are many ways to break-the-ice between two leaders of quite-large nuclear arsenals (still pointed at one another) but here’s hoping Obama’s method doesn’t backfire with a nasty case of meat-poisoning. Lucky for Obama that they weren’t ordering a burger in Dubai from the always reliable waiting-staff, or they may have ended up with a resplendent specimen adorned with all the necessary trimmings but missing one vital ingredient – the patty itself! Yep, it recently did happen in one of Dubai’s swankier hotels, seriously. Obama’s critics will no doubt point to a soft-approach, fretting about concessions being made and the US appearing “weak” but others will agree that Obama’s personality is continuing to show the US is maturing as a super-power and recognising the importance of avoiding past mistakes that have proven costly and destructive. An open-minded-manner in approaching geopolitics must be a better way of doing things.

Even more impressive than the records broken at Wimbledon - with the longest match in history having been battled out over an incredible 70-68 games in the final set over a muscle-aching 12 hours - was the fact that not a single drop of rain managed to find its way onto any of the courts as the sun-shone down on a wonderfully dry collection of strawberry munching spectators. Some of the fun will have been dented by the UK’s announcement of a hike in VAT by 2.5% to 20% - less cream on top of those strawberries next year. Another surprise for England was of course their football team’s ability (term used loosely) to finally put some effort behind their professed “love-for-the-game” and string together one-or-two passes to bring about a goal. France’s failure to proceed to the knock-out stages was well deserved (karma can be a cruel mistress – just ask Thierry Henry’s hand) and the Bafana-Bafana brigade were able to achieve little more than an outpouring of supporter empathy by having the ignominious honour of being the first host nation to fail to make it to the second round. The fun in the world cup is really just getting going, and true political rivalries will now come into play with matches such as England vs Germany bringing out the worst in the British (and German to be honest) press. Some colourful headlines surely being read right now. Will Cameron and Merkel even shake hands at the end of the G20 or will they simply swap shirts? – ewwww, come to think of it, please just shake hands Angela.

China’s Move...
Currency markets have not exactly continued to jump up-and-down-with-joy after what seemed like an earth-shattering decision to allow a strengthening of the Renminbi. Initial euphoria at the top-of-the-week swiftly turned as dry as an over-cooked Chinese stir-fry – within 48 hours to be precise. As with most China official department announcements, the importance of last week’s significant financial alteration is only perceived by listening to what was not said. No clear direction or level was mentioned, and only an ambiguous desire to maintain “stability” of the strengthening economy’s path-to-success and possible transformation to a consumer society touted.

The move was of course timed to coincide with the aforementioned G20, but those more savvy investors and China-watchers out-there had known about the decision for some weeks. The real effect was a reinforcement of China’s assertion that she, and only she, will make such strategic decisions and will do so outside of the intense (and often economically unwarranted) pressure of the more protectionist US law-makers out there. Bowing to what many within China view as a currently beleaguered and dramatically tarnished corrupt-capitalist system, as opposed to China’s carefully controlled capitalist-ish-state, is not an option for the People’s Party. It did always say that it would do what was necessary at a time that it considered correct, so far there has been no deviation from this stated course.

The problem is that there are those in the US that really do believe all their woes stem from China’s cheap-manufacturing sector. How silly the media can be, but even worse is how utterly gullible a collection of people can be with minimal influence and exertion of nationalistic stereo-typical grievances – a mere five minutes of research on the subject by those very individuals seemingly against anything Chinese, would elicit an understanding of how intertwined the two economies are and just how exactly the US consumer has been able to purchase all those really necessary extra TVs-for-their-cars’-back-seats, not to mention the home-barbeques large-enough to cook for the entire USA football squad. The move by China is the first positioning of the chess-pieces for the longer-term plan.

China approaches policy with an exceptionally long-term (election-worry free) outlook. In fact, spend any time talking with those involved in the financial markets across Hong Kong and they will display a belief that developed capitalist nations execute policy based on short-term crowd-pleasing necessity, whilst those without the need to pander to lobby-groups and ensure a maximum number of votes, think more altruistically. Now, discussing whether a control-state-economy is really acting in the best interests of its people at all times takes us to a whole other conversation, but the crux of the issue is that China’s authorities are doing what they have planned all-along – crucially, the currency move will not only placate and quieten some of the more educated masses out there but begin the training of China’s own banks with the skills required to manage a truly floating currency – i.e. teaching the banks how to trade FX and deal with the consequences of an introduction of a number of new policy levers, not least interest rates. So the whole exercise is a training issue. One which the world needs more than many understand. Without a stable China over the next few difficult years, the rest of the developed world will have a much tougher time trying to rebalance their grotesquely inflated trade deficits.

Dead and loving it...
More impressive than the news this week of one million Chinese millionaires now spending merrily through a supposed equal-income communist system ,was that the prize for the largest generation of wealth (in one year) must be awarded to someone that had in fact been dead the entire time – that’s right, the white-gloved genius of pop music - and more controversial than those caught siphoning off oil from the US Gulf Coast to sell on as “diluted-Gasoline” – Michael Jackson himself. Sales of his albums and surrounding paraphernalia generated almost a $1bn in profit since his sad demise. Now that is what you call making money in your (rather permanent) sleep. Second highest revenue-generating “dead” musician? Many still eagerly await his messianic return. Elvis of course. He would have definitely known where Obama can munch on the best burgers to his heart-exploding content!

Thursday 17 June 2010

Fine lines

** Fine lines ** Thursday 17th June
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After what started as a rather boring competition, the world cup’s football extravaganza - please DO NOT call it “soccer” all you US-educated-Superbowl-loving fans - has suddenly turned into a semblance of the quality normally demanded of such a talented (and well-paid) collection of players. The steady build-up to the faster-paced tempo and more fulfilling match-watching has been similar to recent market activity around the globe. We had a disastrous opening gambit to June, but just as the investor-base realised Europe was not going to disappear in an eruption of fiscal mismanagement even more spectacular than the fireworks display that felled Pompeii a few thousand years ago (AD 79 - fact), valuations have once again looked attractive to those fortunate enough to have sold earlier in the year (April would have been a good time for that) and are now able to re-enter the market with vigour ahead of the understandable desire to switch those annoying screens off (any excuse) and head out to the summer beaches. One positive aspect of all Europe’s woes – the yachts and villas available for rent in some of the more desirable Mediterranean locations are thankfully affordable – is there a whiff of conspiratorial short-selling pressure on Spanish sovereign debt just as Marbella’s normally exorbitant five-star resorts gear up for the July-onslaught? You smart hedge-funders you – your secret is safe with me.

Axe-ing the Evil
What is it with the Iranian leadership and their ability to irritate the entire world? They are not even playing in the world cup and are still the most talked about member of the axis of evil – even those plucky-in-defence North Koreans elicited a wry smile a few days ago, from both ardent opponents to the “axis” and members of the “anti-US-hegemony” fan-base. There is very little to laugh about the latest round of economic sanctions imposed upon Iran though, bringing further undue hardships on her people, in addition to a recent re-flaring of the aggressive rhetoric from both sides. We all know Obama wants a diplomatic solution, but I think we also all know that Obama will end-up using the mightiest military force ever known to man – whether directly or indirectly (more on that below) – to ensure a end to the threatening situation that the American people, and its regional allies, will be content with.

Iran even has a role to play in the current debate enraging the oil-rich Gulf – no, not Persian-Gulf but the US Gulf-Coast – quickly turning from a picturesque to “take-a-picture-of-me-swimming-in-this-viscous-black-gold” collection of beaches, as thousands and thousands of barrels of oil continue to spew from the depths of its waters. Despite the best efforts of the firm seemingly blamed for the entire disaster, The Petroleum Company For The Former Empire of The Nations Of Great Britain – no wait, sorry, that’s not the correct name, that must have been overheard when Fox News was accidentally switched on in the background, we do of course mean the Anglo-Persian Oil Exploration Firm That Made Millions For The UK – no sorry, wrong one again, we are talking of the re-branded BP here aren’t we? Yes, just plain and simple BP, that’s the British company we wanted. Darn, mistaken once more, there is no British in BP. So it’s just BP. Whatever it’s called, watching the BP Chairman being grilled by congress is another expression of what has seemingly become a US national-pastime: venting emotional anger on prime-time TV and almost brining to tears the very captains-of-industry purposefully created by the most capitalist of capitalist systems in the world.

Crossing the line...
Hmm, all this fuss about whether or not Obama has paid enough attention to the issue - undoubtedly an eco-disaster - and is doing enough to “punish” the evil BP, has detracted from a glaringly obvious and frustratingly misdirected wonder of media creativity – that the original miscreant of the accident that led to the spill was indeed the US owned, managed and staffed Trans-Ocean. Wait, it gets better. Who was BP working for and under contract to when operating what had only months before been heralded as a wonderful new deep-drilling technology? Yep, you guessed it, another immensely US-centric firm and in fact the original soccer-watching-Superbowl-loving-gas-guzzling-provider, Halliburton itself! The whole thing smacks of foul-oil-tasting-irony.

If the US was not so hell-bent on drilling its very lands in the most dangerous circumstances known to man, driven by an ever-greedy and desperate desire to devour every drip of oil possible to ensure a continuation of their glutinous way of life, this entire saga would not have transpired in the first place. Sorry, but you cannot push people to the very limits of human technology for your own pronounced desires only to fully blame and loudly berate when something goes wrong – especially when the risks were clearly understood and sanctioned by the highest authorities in the land at the time. If Obama’s White House is really trying to hurt his preceding administration’s corporate affiliate, he should lay-off the BP bashing (significantly now also owned by US investors by the way) and turn some of his ire closer to home.

Reading in-between the lines
What also caught my eye this week was the little distributed story of Saudi Arabia apparently acquiescing to Israel’s request to fly-through a narrow corridor to allow an attack on Iran’s (suspected) nuclear reactors. This is typical of the Middle East. Rather than focus on pressuring Iran themselves through a number theoretical regional capabilities and pressure points (access to banking facilities, assistance with oil refining etc.), the flammable Pandora’s box has been dusted-off and placed in front of the eager-to-open hands of the Israelis.

Allow us to investigate: the Middle East, controlling almost 3/5 of the world’s known oil supplies, is unable to deal with one of its own trouble-making neighbours. What does it do instead? Does it request assistance from one of the more neutrally inclined powers to facilitate the removal of such threat? If you thought “yes” for even a moment then, my Arabian-watching friends, you clearly have not read enough about Middle Eastern history and the seemingly self-destructive desire to consistently strike the wrong strategic decision at the absolute crucial moment. The single most problematic choice is opted for – an implicit agreement to turn-a-blind-eye (presumably busy cheering Germany in the World Cup) as the, US-supplied, Israeli air force (used to be US-trained, now they train the US – who trains the Saudi’s?) streak through a narrow flight path provided at the top of the Saudi Kingdom’s airspace to provide a direct enough bomb-run for a debilitating blow to Tehran’s nuclear programme. That’s the plan at least.

The reality is no doubt far more complicated and the conclusion and ripple effects a further several-hundred times over. US-trained Israeli warplanes screeching across the Gulf skies, on their sight-seeing trip to Iran that should end with a bang, will naturally irritate the famed Arab-street. Surely the leadership across the region anticipates this. Maybe that’s why the “rumours” that made up the story were not more widely distributed and made a swift exit from the journalistic editorial commentary.

So as we enter the weekend, a few things to contemplate on and discuss amongst yourselves. Surely important questions will be raised across many a dinner-table. Or then again, maybe most will simply hold aloft a few beers as they cheer their favourite football team and ask deeply insightful questions that strike hard at the very heart of those vital life-changing issues – “is the ref blind or what?!”


Hani Kobrossi

Monday 14 June 2010

Who’s World-Cup is it anyway?

** Who’s World-Cup is it anyway? ** Monday 14th June
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It sometimes takes an immovable object to block an unstoppable force.

My recent gallivanting around the globe was felled by a rather nasty, not-to-mention-excruciatingly-painful (not that I’m looking for any sympathy of course) wound that will suffice in its description as simply making the finding of a comfortable seating position nigh on impossible – come to think of it, just being able to sit would be a good start!

And so it is, that after a near a 4-mth silence, a slicing review of current affairs and cynicism on future development seems ripe for a return. How have you all survived not knowing anything about crucial daily geopolitical matters?..such as the latest Gold/Oil/$£/Global market prices, Abu Dhabi/Dubai melodramas, Berlusconi’s dastardly love-affairs, whether or not the Baltic Dry Index really has any baring whatsoever on global trading levels and when exactly is it again that the Chinese will rule the world?, not to mention healthy and heartening servings of humour-infused observations. No, I’m not talking about the online version of the (still free for now, pheww, unlike the move by ‘The Times’), but the satisfaction that originates only from informed-free-and-open discussion of those matters that count.

With all that has happened in the interim of the last piece and today’s wonderful orgy-like-ambience-of-daily-world-cup-matches, one can be excused for skipping over the immense amount of tantalising material out there: UK coalition governments doomed to fail, Greek kebab-busting-debts seemingly capable of dooming the Euro alongside with it, sinking of Korean ships at the hands of the ‘it-wasn’t-me-North-Koreans’, peaceful Thai protesters beaten into submission, violent earthquakes ravaging Latin American lands, 3D TV all of a sudden becoming a must-have all because of some blue characters running around a colourful 3D-World (unfortunately my prediction did not win the best-film Oscar as predicted in the end-of-year piece), US and global markets finally realising that you can fool some of the people all of the time but only buy-all-of-the-people-and-keep-global-markets-rising-with-huge-amounts-of-government-spending-and-ridiculously-low-interest-rates for only, well...oh..about a year.

Yep, March 2009 to March 2010 was good fun guys and gals, but reality can be a real stinker. Performance of global markets since March 2010? Everyone out there will know just how bad it’s been since we last inspected the health of global returns. And how can justice be served for not mentioning anything about the theatre surrounding Apple and the runaway success of the iPad (no, this isn’t being written on one - can’t seem to get the hang of the touch-screen and lack of ‘old-fashioned’ keyboard-feedback) or more entertainingly the saga of the ‘stolen’ iPhone..or the failing iPhone at its new launch – seriously though, why is the world so impressed with two-way video calling when it was available over 5-years ago on any number of Nokia’s?? Incredible branding/marketing/design/stupidity/near-religious-followers, that’s why.

With so much already written in the elapsed time of our last communiqué (that’s what travel will do to you, broadens the vocabulaire), why even bother pointing out the oil-spill of environmental-disaster-proportions that has strained US/UK relations (Obama still the man, but going a little too far in pandering to public outrage against BP when it was in fact an outsourced-to US-owned firm that suffered the tragic accident in the first-place). Indeed, some suspect a coating of aforementioned gulf-coast-oil on the very same football that brought-about the horrendous fumble of an easy-save from the England goalkeeper in the recent world-cup match against the US

Speaking of near-religious followers, the World-Cup is of course amongst us – just in case you had not noticed since you were living in some remote lost-tribal village alongside the Iguacu falls....or a woman. Oooohhhh..that must have incensed quite a few out there. But come on. The truth is there are many of the female variety out there who abruptly transform into die-hard football fans every four years without ever acknowledging the rules of the game, or even brandishing themselves with the very basic knowledge of historic rivalries, individual talents or the offside-rule (the what? Yeah exactly...just please don’t ask me please to explain). Male football fans are quite similar all-around the world. Female fans, despite great appreciation for the efforts made to fit into tightly-hugging football shirts and shorts (especially the eye-catchingly awesome yellow of Brazil, and the mysteriously shapely blue of Argentina) certainly are not all the same.

Currently residing in the Middle East - despite having spent little time here in the last few months - and most recently having travelled to the most feminine-ruled of cities in the world (Beirut for the unfamiliar), an number of telling observations of the female football ‘fan’ have been made. First, there is no such thing as a true Middle-Eastern world-cup fan. Man or woman. This of course arises from the fact that there is very seldom a Middle Eastern football team in the competition (unless you really want to count Algeria – many prefer not to) or the off-occasion where the Saudis were able to beat (read: bribe) enough teams within their qualifying group to make it through. The fact is Middle Eastern football teams just aren’t very good. Why do you think Qatar want to host the 2022 World Cup so bad? Not to have the honour of staging the competition but just to be able to finally play in the sacred thing through the automatic slot they receive!

So it goes that each individual, from the young to the old, male and female, pledge allegiance to their favoured-adopted side long before the first tackle has been lunged (going for the ball of course) or Vuvuzela has been annoyingly blown for hours and hours and hours (and hours) on end – did we mention how annoying the Vuvuzela’s ‘sound’ is? The favourites around this part of the world: Germany and Brazil (Italy and Argentina equal third). Now, Brazil being a favourite is understandable and acceptable. Brazil are incredible. They have won more world-cups than any other nation. They play more attractive, innovative and skilfully-impressive football than any other nation on earth, and they have those wonderfully attired Brazilian supporters that camera men love to focus on at every opportunity (it’s the yellow again). It is easy to understand why the likes of UAE nationals, Qataris, Kuwaitis and even those in Yemen with TVs (and the expensive Al Jazeera world-cup package) are prone to cheer for such a team filled with pedigree and talent.

Even supporting Italy and Argentina is equally digestible. Both play exquisite football and have a history of winning (noticing a trend amongst the Middle Eastern choices by any chance? Yep – glory hunters). Both have that extra ummph in their game and their national supporters and icons, stylish and aspiring, are worthy of note (even Berlusconi). BUT Gerrrrrmany....Germany?? Zeee Germans?? Why on earth would any sane individual who was not actual born in Germany, married to a German, employed by a German firm and being forced to watch football in his German boss’s Miele-designed kitchen, want to knowingly and willingly chant, cheer and sing for so dull a team (please note, Sunday’s performance against Australia did not serve to support this already though-out piece...not helpful).

Apart from having won the competition a frustratingly large number of times, always making it to either the semis or even the final, there is no justification as a football-fan-outsider to shout for the Germans. They always, always play the most insipid brand of football out there (again...last night...not helping..oops), always leave you wishing you had not watched the match you just did watch, and apart from some damn good draft beer have very little to offer in way of cultural entertainment – no, the female supporters clad in the national kit do not look that good. Middle Eastern supporters have a choice of any team they would like to pledge allegiance to, and in a rare occasion indeed, it is the competition of a sport where the US is not the most powerful force by any means – so the problem of a knee-jerk reaction to simply vie for whatever team is playing against the ‘great devil’ (even as they munch on their Big Mac after finishing off the last episode of Lost and having just driven home in their Escalade) is out of the way.

So what must the reason be? It can only be the glory-hunter in the Middle Eastern supporter that would cause one to reach so low into the attractive-talent-bag of international football (ask a more fundamentalist-inclined Iranian though and you might get a different, WW2 themed-answer – not nice) The desire to feel a part of the competition for as long as possible may also have something to do with it. You can understand why a young UAE national would like to remain a part of the festivities when Claus is sat beside him in class grinning and basking in the glory of another win on penalties against England (please NOT again) long after Algeria have been kicked out at the group stage - a happy-desert-camper he will not be,

This is certainly expressed in Lebanon’s scintillating Beirut. Strangely for a people and country that normally revels in being compared to either the Italian or French (not to mention having been a French-ruled mandate for over a quarter of a century), Germany is again the team of choice if the prolific display of horizontally striped black, red and yellow flags is anything to go by.

The female supporters there look forward to the endless displays of football almost as much as the ‘males’ (in quotation marks for a reason) – where else can they, in skimpy-attire attributed to a tight-fitting football shirt (‘it shrunk when the maid washed it’), cavort and taunt a captive audience with a guaranteed male dominant percentage for weeks on end, edging closer and closer during the matches to their own idea of a stunning goal?

To ensure success, a team with a historically proven ability to remain in the competition until the later stages is essential. It actually suits both the men and the women, and an unwritten understanding of unflappable support for Germany engulfs once every four years. A few brave souls will give-in to sense and bravely hoist Argentinean or Brazilian flags, but if you are single and looking to have the biggest football-barbeque on the block you already know which powerful European-industrial-nation you are supporting.

So the stage has been set. The adopted teams spoken for and some already victoriously supported. Whichever team you are following, and for whatever reason - yes, you ‘girl-fans’ out there, we’re onto you but we love having (some of) you around regardless, the next few weeks will elicit multiple expressions of emotion, yells of joy and screams of angst - please not England again in penalties.

Only one thing is for sure, you will all be infinitely-more-comfortably-seated on your sofas than myself.


Hani Kobrossi

Monday 15 February 2010

Carnivale Tears

As the world’s romantics (and suckers for commercialised holidays) return to their desks content their feelings have been adequately expressed and requited for another year, a busy week awaits ahead: Afghanistan is embroiled in yet another “surge” by coalition forces as they run amok the mountains of a land that refuses to give in to any intruding force, Iran declares itself a veritable “nuclear force” alongside increased calls for pre-emptive strikes from either US or Israeli forces (same thing no?), Hilary Clinton tours some of the world’s largest oil (Saudi) and gas (Qatar) producers in the Gulf region presumably ensuring undisturbed supplies of their most precious exports in events related to the preceding sentence and economic figures suggest Japan’s economy is not quite ready to relinquish its position as the world’s second largest economy to China just yet (despite Toyota’s woes), at the same time as our ever-market-savvy friends here in Dubai briefly stun investors with rumours of a 7yr haircut-debt-deal – since denied but doing nothing to assuage tired/cynical/fed-up investors devoid of patience.

With the Chinese New Year taking us into the Year of the Tiger, most major markets across Asia are shut for the extended celebrations, leaving Japan to fall moderately (Nikkei -0.78%) and little to steer investors on this Monday morning through the usual barrage of upcoming economic indicators: including (from the US) Fed meeting minutes on Wednesday and much-focused on inflation figures via PPI (+0.8% cons) on Thursday, as well as the much-anticipated details of a European (basically German) deal to “facilitate” Greece’s problems – maybe Greece could rein in some of the huge spending they seem to love on advertising their bountiful tourist attractions across almost every major new network every fifteen minutes – seems a strange juxtaposition sandwiched between commentaries on sovereign meltdowns and irresponsible public spending – a lesson Dubai never learnt when deciding to “open” a (since closed) record-breaking-tower in the midst of its own debt issues. It’s quite tough out there for any sovereign spending huge amounts of money whilst simultaneously running out of cash and in the unlucky position of possessing neither a globally used currency nor a globally feared military – well played Uncle Sam.

What about moves in commodities given heightened anxiety across the Gulf region? History would dictate that a short-term spike in the price of oil (currently trading slightly lower today in fact just below $74/brl) will occur the moment aggressive rhetoric inevitably turns into action leading to pain and disgust across motorists at fuel pumps from Berlin through London to Texas (hybrids still not too high on the agenda for the nature-lovers there - a Prius just doesn’t have enough room for all those essential rifles). Oil has in fact hovered around $75/brl since falling at the end of Jan, almost sitting around waiting for something interesting (dangerous also) to happen, or already fully-pricing in any supply disruptions. In conjunction with a renewed desire to hold US$s (Cable 1.56, Euro/US$ 1.36) and a slight return of risk-aversion, a semblance to markets this time last year currently exists. Optimists out there will welcome this as long as a strong period of rising performance prevails somewhere around March…and if not…well..that’s the fun of markets. European bourses are putting in a good performance at the start of the week, the FTSE, DAX and CAC40 all rising more than 70bps as pressure relieves amongst investors preoccupied by Greek, Spanish and Portuguese jitters. US futures are pointing to a less than inspiring open – DJIA -21pts, S&P -2.2pts.

With the geo-political scene immersed in what is looking like the beginning-of-the-end-game vis-à-vis the Iranian nuclear issue (Hillary’s trip as documented above a slight give-away) the Carnivale celebrating Brazilians have been more distracted by the furore created over the choice of a 7-yr old girl to lead the traditional parade in Rio de Janeiro. Disputes over whether a sexually-tinged role should be represented by such a young-girl dominated media there for days on end and spilled over into debates on even Fox News, where some dim-witted conservative said “nothing like this would ever happen in the US!” Really?? What about the 5yr-old dolled-up “junior beauty queens” you endlessly parade around middle-America huh? Anyway, at the crucial moment of her role it seems she broke down in tears when overcome by the pressure of leading the parade. The reason for her succumbing to the intense scrutiny at that precise moment in time a mystery to her father and many that knew her as they were confident in her ability to handle the situation. Commentators were equally saddened but then focused on the crowds filled with celebrities that had attended the festivities and spotted Madonna sitting in the stands – that poor 7-yr old girl must have thought she had come to save her and adopt her to a better home in the US and cried out of fear!

Best Rgds,

Friday 12 February 2010

Convenient Support

Apologies for the lack of consistent market commentary in the last couple of weeks but travel itineraries have proved slightly hectic with many visiting delegations travelling-the-well-trodden-path through the Middle East - the weather around the Gulf is lovely this time of year, making for an attractive destination for a number of visiting professionals on supposedly “official business”.

As Europe plans to save Greece (and itself), Bernanke prepares markets for an end to the spending-spree at the same time as China’s figures express another surge in bank lending, Iran demonstrates against (or celebrates, depending on which news channel you are watching) to mark the Islamic (31st anniversary) revolution. The world watches in anticipation of another attempt by the disenfranchised Iranian youth to rock the ruling authority’s (increasingly isolated) boat as recent sabre-rattling has peaked (even animals have been catapulted into space!) amid worrying signs of persistent internal friction. The authorities have apparently learnt from perceived mistakes though, as tighter internet controls and preventive measures are imposed to curtail past widespread use of technology to convey opposition to the incumbent powers. Who has ended up getting the sharp-end of the stick again after a recent bad experience in China? – yep, that apparently-oh-so-evil expression of Western hegemony – Google! Might help avoid further problems for the internet-leader if Google moved its headquarters to somewhere a little less controversial – like North Korea maybe.

Bad news for another company persists and damages Japan’s once-glowing reputation as blood-thirsty Western (read: Fox news) media pounce again and again on every piece of PR damaging Toyota woes, delivering mighty blows to once-stuff-of-legendary-quality Toyota processes - tarnishing the world’s largest car-company. Toyota seemingly forgot to check the blind-spot when changing lanes, causing a collision of immensely significant negative repercussion. Tales of deaths caused by faulty/shoddy manufacturing striking deep into the proud mindset of corporate Japan. Disaster mitigation will dictate a difficult time ahead for the company in the short-term, as recalls and safety-aware buyers pick other manufacturers. Amazing how things can change. Even implying that a Toyota was not of immaculate construction just a year ago was akin to denouncing a Big Mac as “tasteless”. Then again, McDonald’s suffered its own moment of near-path-to-destruction a few years back amidst a health-driven dramatic fall in sales, so it seems the mightiest do indeed fall the hardest. Hopes are that Japan’s well-documented and less than swift to address-internal-issues culture does not get in the way of Toyota re-accelerating away from a potentially destructive stall.

Where’s the return?
As discussed in January, these markets are providing a slight case of indigestion for those expecting much simpler-softer times after the incredible events of 2009. Without exception, every major developed market is posting a disappointingly negative YTD return (avg -5%), with the normally smile-inducing emerging markets adding to the losing team performance (Chile the only star in all Latin America etching out +4.7%). Where have things gone wrong? They haven’t really. This was expected after the fatigue inducing non-stop rally of 2009. The dips are the best times to get back in. Risk appetite has waned, expressed by the rise of the US$ (Cable 1.56, Eur/USD 1.37) as Gold ($1,078/oz and Oil ($75/brl) have both stabilised as investors remain unsure how the rest of the year’s “recovery” will pan-out. Emotional responses to uncertainty across global market recovery and a general lack of consensus prevailing at present. Sticky and frankly difficult markets are most likely to continue until the next major positive catalyst that will again express itself in the form of a rebound in employment. Until then, these markets remain the domain of day traders and ulcer-immune investors.

On a sadder note, read that the affable (if you like partying) US congressman Charlie Wilson passed away yesterday. His life was chronicled in a recent Hollywood movie, describing his prime role in financing the covert war in Afghanistan in the 1980s to repel Soviet forces through funding of the well(US)-armed Mujahideen (modern day Taliban). So much could be written about how the US often repeats its mistakes in backing a certain group of people when in their interests to do so, only to then ignore their basic demands and requirements when no longer ‘strategically” important to them. With the latest set of events in Iran and undoubtedly an underlying level of support against the incumbent powers from US and Western influences, mistakes being learnt from lessons past is high on the agenda again.

Best Rgds,

Tuesday 2 February 2010

** Soft-Shell Crab Index 2.0 - Clawing Back ** Tuesday 2nd February

An entire month and no special focus on the UAE…well, let’s make up for lost time:

Still clawing
Ahhh Dubai Dubai – or “Doobie” as some fondly call it – what an action-packed-boom-to-bust-epic-infused-roller-coaster-ride you have provided us in the last twelve months. The thrills and spills, bluffs and calls, highs and (very) lows entwined with such generous helpings of underlying personal and business scores (read: vendettas) being settled, worthy of a high-budget-mini-series lavished with luxury-fittings.

The important opening and even more significant renaming of Burj Khalifa at the turn of the year proved a watershed for the much-derided and clearly walking-injured-once-shining state. Plenty of misguided, overly-aggressive and almost venomously vengeful criticism encircled the stricken-city’s gleaming towers during those dark-publicity days. Copious amounts were written, reported and spun (much of it inaccurate) and the sooner much of it is forgotten - as only fickle mass-crowd-memories can swiftly manage – the better and fairer.

What of the lingering issues though? No, I’m not talking about the mountain-of-debt that must still be addressed and the will-they-won’t-they rename the DIFC (Dubai International Financial Centre) alongside a fried-chicken-retail-outlet – that’s KFC for those of you that couldn’t figure it out – yep, Khalifa Financial Centre..catchy no?...we’re not talking about the reduction in traffic and sense of slowdown apparent across once-buzzing construction sites and hyper-driven-marketing offices, that’s all old news and this piece is not interested in senselessly badmouthing Dubai, it’s intended to facilitate its rehabilitation. Sometimes the path to redemption starts with some hurtful truths.

Like the much-touted Internet 2.0 revolution taking place, Dubai is re-inventing itself as any good city that experiences and survives a boom-and-bust scenario must. Dubai 2.0 is only at the very early stage of incarnation and the general look-and-feel of what the city will be/offer/do is still to be decided and clarified. What is certain is that the magnitude of events witnessed since the last time we investigated a snapshot of relative cost-of-living across the city would be expected to result in a rather forceful re-shaping of Dubai’s ethos. Well…has it?

Some of you will recall an analysis of the relative cost-of-living looked at almost exactly a year ago through the Soft-Shell-Crab-Index a (cruder and simpler of course) equivalent to the Economist’s "Big Mac Index" - where PPP (Purchasing Power Parity) is calculated in US$-terms to determine whether a particular currency is under/overvalued based on the price of a Big Mac at every McDonald's in every capital city in the world where one is sold. The soft-shell-crab-index is inspired by the ever-growing presence (welcome to the Nobu-Zuma fray Okku and Nozomi – you’ve had it easy till now!) of Asian “con-faux-fusion” eateries, all struggling to attract the rather limited crowd of affluent(ish) diners capable and willing to fork-out the necessary spend for a decent night out.

Let’s get straight to the claw of the issue – last year, through the index and at the height of the global economic crisis that felled great cities from Hong Kong across to New York and ushered in a new-era of lower prices, Dubai was found to confusingly buck-the-trend and out-price similar establishments by a full 25%. Yep, that’s Dubai 25% more expensive than its illustrious peers. That was with only two restaurants at the time serving the dish in an up-market environment. There are now at least five all serving rather similar fare, and although with an increase in supply you would assume a case for lower prices through economies-of-scale (lower import costs etc.) guess what the reality is? Yep, almost too obvious to keep you waiting….Dubai is still in fact almost 25% more expensive than the average cost of Tokyo, Singapore (a new entrant), Hong Kong, Mykonos (welcome also), London, Miami (fun defined), New York, Las Vegas (no people, it’s not like Dubai) and Los Angeles in current US$ terms*.

How can that be I hear you scream?! After everything that has happened in this vibrant and resilient city, where real-estate bubbles have burst with a bubble-gum like twang splattering the faces of many a happy-go-lucky punter (back to Blighty boyz), prices remain significantly higher across the soft-shell-crab-loving board than some of the most historically over-priced and wealth-attracting-centres of business and entertainment. Again, indirect taxes set-aside, especially for the (so)overpriced drinks capable of inducing a headache long before the hang-over has even had a chance to kick-in ($45 for a double-premium-vodka-on the-rocks, wo-awww-ww), the discrepancy is quite simply ridiculous and frankly indecent. That many do not own-up-to-the-fact is not an acceptance of the over-priced regime they face, rather a strange collusion-of-silence brought on by the unwillingness of many here to be the first to admit as much. Last year, it was questioned how much longer this would continue. Now the question must be why is it being allowed to continue?

A nasty case of the crabs aside, the often painful-on-the-wallet price discrepancy continues throughout the very fabric of so-called “cost-of-living” barometers. Without looking at mundane baskets such as milk and eggs etc, average lifestyles in Dubai consist of shopping and luxury items after all (that’s the image the city strives for is it not? Not of people going shopping for a carton-of-semi-skimmed and a farmer’s dozen, but of finely attired night-owls looking to taste the gold-lined edge of the high-life) - but even here the “tax-free” myth of the city does not pull-through into competitive prices. With the Dubai Shopping Festival in full-swing at the moment, shops across the vast (and impressive) Dubai Mall advertise 50% discounts and “bargain prices’. A cursory check of items found throughout other chain-outlets and department stores in London and New York provided a rather worrying trend – even at “sales” prices, eight out of ten “luxury” items came in a staggering 30% more expensive.

Come on, that’s just ridiculous you franchise owners out there. How can you ask Dubai residents (ex-pats at least, not the lucky locals born on a field of literally-liquid-gold-dreams – just jealous I hear you say?... damn right.aren’t you?!) to put up with prices intended to capture a captive-tourist market and shopping-demographic that never even see (nor have to care about) the mightier-than-black-charge-card bill at the end of the month. Even a well-practiced rip-off city, through many years of perfecting itself as a slick-tourist-trap destination - like Venice - understands the price differential game; restaurants there have separate menus for tourists and residents, with residents having to present an ID card for the honour of being handed the vastly better-value-for-money (70% lower) price lists. Now that’s smart and progressive. Take note Dubai.

So where do we go from here? Well it’s the same old message which I’m afraid simply is not translating fast enough into action. Although hotel prices have reportedly been slashed and bargain package holidays are touted throughout the internet to visiting sun-seeking hordes, the average Dubai dweller is still having to pay a ridiculous premium on the perceived right to enjoy oneself by eating and drinking well. Of course, Dubai is part of an Islamic state and alcohol is technically illegal etc., but a 100% premium on a Vodka-Martini (always ordered “very dirty”) when compared to one of the most expensive bars in notoriously-expensive Vegas (again, no real comparison) is really stretching the home-advantage a little too far.

Dubai has plenty going for itself, its success as the number one viable-choice for those wanting to live and work across the region absolutely secured and unlikely to be rivalled given the critical-mass it has achieved. What about being fair to those making that choice though? The only policy that will ensure economic success on top of destination-of-choice-awards will be an honest pricing policy where paying for quality eating/dining/shopping does not have to feel as if one is unwittingly partaking in a heavily burdensome debt-repayment plan.

Soft-Shell-Crabs can be battered, deep-fried, sautéed or sometimes grilled. For all the positive aspects of residing here, pricing policy can sometimes make living in Dubai feel like all four methods of preparation in one.

* All pricing information attained from enquiries carried-out between 1st and 2nd February by contacting (or checking online) each represented establishment where soft-shell-crab is known to be served in the listed cities. Variances in size and quality may of course exist but calculations are based on the limitations of the information provided. The above is personal market commentary

Best Rgds,

Thursday 28 January 2010

Mountains of jobs

Mountain top diplomacy…
A freezing-cold-and-isolated mountain top village may not sound like the ideal place for a gathering of the world’s business and political (too often too similar) leaders, as the Davos summit kicked off this week with an emphasis on the “road-to-recovery” – just the name pinned to the gathering is intended to evoke positive emotions amongst the uninvited (and warmer) public, eager to learn how the exalted ones will continue to spend..we mean “think” of course…their way out of the dangerous depths of economic recession and slowing growth. As the leaders lead, (denied) rumours of China averting a Greek tragedy increase – as strange as it first sounded when hitting the news-wires, China’s huge reserves ($2.4trn) would hardly notice the necessary out-flux of cash to end Greece’s embarrassing troubles and would serve as another expression of the much-touted shift in global influence to the East.

Toyota’s own red-face-inducing troubles have sadly amplified with a recent US recall spreading to vehicles delivered across Europe (1.1m are affected) – sharp falls in the company’s share price (-14% in 7 days) pointing to long-lasting damage to a once untouchably-lofty reputation. Seems Japan’s leading car-maker’s troubles are arriving exactly when most needed by struggling US firms – coincidentally, Ford and Chrysler have just launched suspiciously Japanese-like compact vehicles (for US car firms “compact” once meant less than 15ft-wide behemoths) not that there is any insinuation of corporate wrongdoing of course, that’s saved for the dispute between the French government and Renault, with Renault complaining they are being pressured to move production of eastern-European made vehicles back to France – no no, c’est pas vrai..the socialist-French-government would never interfere in corporate affairs now would they?

Which Job?
Jobs Jobs Jobs – not Steve Jobb’s new iPad, which does definitely look cool but can’t understand where it will fit (immediately at least) into the market between a phone and a laptop, not big enough to be a useful laptop (with no actual keyboard) but too big to fit into your pocket as a phone replacement – Obama’s jobs are in focus today. With US unemployment still hovering around 10%, in a typically eloquent and rallying State of the Union speech, where for a few moments - in front of the television cameras at least - US politicians did actually look united, a focus on continual job creation pandered to the masses - we’re talking the good old-fashioned hardened get-up-in the-morning and produce something useful to society during the day kinda job. Investment banking doesn’t really tick many of those boxes – in its modern super-destructive-super-derivatives-form at least.

Coupled with the (Volcker) proposed bank reforms, recently backed by George Soros but opposed by some (surprise surprise) bank heads, the White House administration is certainly trying its best to live up to the promise to relate to the very people that voted them in to power, rather than be influenced by even more powerful corporate lobbying groups and other “special interest” fund-raisers – a tough job to say the least and once that may unfortunately seal Obama’s fate as a one-term President. Despite declaring “the worst of the storm has passed” in reference to the economic crisis, one cannot help but feel the clouds above his head are only now gaining strength.

Over the jitters….
As all the above shapes its way into financial models and analyst forecasts, altering perceptions of possible future government measures, exit plans, re-entry plans and even planning plans, investors have been faced with a difficult month’s trading. We examined the emotional responses underlining investment decisions, suggesting these dips were offering good opportunities to increase positions in markets where recovery and market performance will combine for decent returns in what will surely be a tough 2010. So far today, Asia has put in a gutsy performance after a clearly difficult week, with China’s gentle push on the stimulus brake amplifying and affecting investor sentiment – today’s rise ends the worst falling streak for the MSCI Asia-Pac Index since 2004, Europe has picked-up on this positive turn and opened strong (+1.2% across the CAC40, FTSE and Dax right now), with US futures singing-along too – DJIA indicating +42pts and S&P 5.4pts. Gold and Oil have both hovered around levels reached earlier in the week ($1,092/oz, $74.3/brl respectively) as the USD oscillated and fell slightly in the last 24 hours (cable at 1.62) – some concerns US fiscal stimuli spending will continue to pressure the greenback

Warming up…
Investors are starting to recover from the sudden jitters that filtered through after the realisation that excessive amounts of lending will not continue forever, the return-to-earth slightly jarring for some but necessary. Now that the impulsive reaction has passed, long-term money-managers and the more strategically focused will once more set their sights on the general global recovery outlook, hoping that decent levels of GDP growth in many parts of the emerging world can continue to push the more developed markets through their restructuring (de-leveraging) periods.

Hopes will remain that those leaders “summiting” in Davos and shivering in the cold high-altitude winds will remain warm enough to make globally beneficial decisions. Nothing warms the hearts, hands and heads of a true-capitalist like the promise of mountains of cash.

Monday 25 January 2010

Down…but not out

Ufffff….despite wishing there was a more positive opening tone to what is the last week (already) of the first month of the year – next thing you know we’ll be wishing one another a Happy Easter, having swiftly passed through the fake-but-commercially-viable mine field that is Valentine’s Day – there is not much to be jumping up and down about with joy. In fact, since the terrible Haiti disaster, unfortunate plane-crashes, shrinking bonuses (ok, certainly nowhere near as bad as the first two but still a little disturbing for some), set-backs for Obama losing that Massachusetts seat, the now well-documented desire to overhaul the “too-big-to-fail” system of banks – read: re-introducing Glass-Steagall – not to mention jitters cruising through the investor community as a slew of US earnings miss a few targets or at least fail to out-do expectations, markets and general attitudes to the strength of late 2009’s recovery have stuttered, shuddered and now slanted steadily south.

Losing steam…
Whereas some may be tempted to return to (negative and disheartening – so I hear) talk of bear markets, double-dips, hidden monsters-in-the-unemployment-closet, not to mention prolonged reliance on the investment community drug-of-choice otherwise known as “super-huge-amounts-of-liquidity”, recent falls which may well continue in the short-term do not necessarily signal the beginning-of-the-end. Sure, 2009 was a great year for equities…we all loved the great big green numbers on our screens after a rather aggressive yet welcome bear market bull-run that started in April and never-looked-back, but logic would indeed dictate that fast-paced momentum eventually loses steam.

That “hiss” of deflating market returns you heard at the end-of-last-week was the first release of built-up-anxious-vapour..a pause in the midst of an optimistic movement. With red on the screen for the last few days, and again today as Asia falls at least around 50bps across most markets, with China’s CSI even lower (-1.1%), Hong Kong shedding 62bps and recently well-performing but now back in negative YTD return land Japan falling 74bps on its Nikkei flagship, the very human desire to slow-things down when a watershed presents itself has made itself apparent. Apart from the obvious turn of the year divider, Obama’s (or we should be honest and say Volcker’s) bank-busting-plan provided more than enough reason to relieve pressure on the accelerator for a moment, or two, or three…

Can’t really blame such emotive responses over the weekend (prophesising huge market trouble ahead) when considering the S&P amongst other global markets have just experienced their worst performance in over 5 months. These market woes are being reflected in Obama’s Oval Office – serious creaks in his administration and a continuing resistance to his new wave of thinking. His short-lived “yes we can” period of hope replaced by such silly initiatives symptomatic of the less amiable elements of US politics; allowing unlimited payments to political parties from lobbyist groups for example. Worries about just how far the US really travelled down “the new path” growing with each day he loses more influence.

So what to do in the next few days and weeks faced with such volatile markets? Many would suggest you take caution along with the rest and sit back. They would be wrong. Instead, sit-up and think about what we are going through and it may become clear that now is actually a great time to buy into the dips for the medium-to-long-term. As mentioned above, we had a great run for most of 2009. Don’t forget that before the bulls took over, markets had continued their stomach-churning falls through till March, dropping almost 30% across the majors. Sentiment turned quickly then, and through the eye-of-the-storm of the “twilight zone” – where earnings forecasts are downgraded even as markets start to rise – great gains were made (+40% YoY for many major indices) by those that were first to respond and believe, before any proof was offered – faith in other words.

A modicum of faith is now required if the dips are to be bought into. We are not talking blind-faith though as history - as it so often does - points the way. After the rush comes the pause for rest. Once rested, the fitter are the first to speed-up again. It was seen in the 1930s (where there were several dips and surges), in the recessions of the 70s and 80s, and even after the tech-bust in 2001. Those that feel they missed out last-year should be the first to feel lucky to have the opportunity to get in for their turn in 2010. Those that did well in 2009 will likely exercise more caution but again – that’s only human. Those stocks and markets that brought (moderate) joy to investor spreadsheets over the last few months will make way for the laggards and the overlooked. Much of it is in the charts, and much of it is in the gut.

There are gains to be made across emerging markets (again) some forgotten developed markets (Japan) and some well-chosen firms listed in weak markets (the UK) but operating internationally and effectively in emerging markets (Cadbury, now Kraft, springs to mind).

Markets and the general economic environment will be tough for the rest of the year, notwithstanding that the investor community will face a difficult recovery process once their super-caffeinated-infused-directly-into-the-artery-liquidity-drink runs out of its juice.

Wednesday 20 January 2010

Excess CO2

Quicker than usual today as have been experiencing the joys of travelling around the GCC (when exactly did they say that train network will be ready?) and will be doing so again shortly.

Politics? – markets don’t care
As US markets have risen to another 15-month high overnight (Dow 10,725, S&P 1,150) despite further losses reported from Citi (nothing unexpected though), signs of inflation in a still badly-positioned UK economy and another rise towards $80/brl for crude – along with a sharply appreciating USD – bull market players are continuing to push those attempting to exercise more caution aside. Some bad news has hit our favourite halo-wearing US President as a traditionally Democratic seat in Massachusetts was lost to the Republicans which will cause some trouble for the make-or-break healthcare reforms the current White House administration has put so much (well-intentioned and well-needed) effort behind since last summer.

Markets have already reacted across some of those healthcare related names that may take advantage of a turn in reform sentiment but more worrying for Obama the fall-out from a possible reneging on one of his most important campaign promises – not the best time to be meeting with an upset President, as leaders of the financial industry must surely be worrying some aggression will find an outlet their way.

Elsewhere, rumours that China is increasing efforts to reign-back back lending and bring-about a serious slow-down in economic stimulus measures has jittered most investors across Asia, with some significant falls on the CSI300 this morning (-3.22%) spilling over into HK (Hang Seng -1.88%) and surely dampening any positive follow-through from that strong S&P showing last night (+1.25%), indeed Europe looks set to open slightly lower.

20 days into the New Year and still nothing to write about lothario-legend Silvio Berlusconi! Where is our prolific charmer? Must still be recovering from “corrective surgery” following his last moment of crowd interaction.

Plenty of it..but renew anyway…
Watching an extremely oil-rich nation spend so much time and energy (pun intended) on investigating and then rewarding the best alternative power-generating resources would strike many as a long-sighted necessity but a bit of a waste of time (and money) for at least the next 50 years – not for the leaders of Abu Dhabi though. The “Future Energy Summit” currently underway in the UAE’s capital city has attracted a great deal of attention from international energy firms intent on getting a foothold into Abu Dhabi’s much-touted Masdar City initiative – a city that is being built with the intent of being totally carbon-neutral and self-sustaining.

The irony of an oil-producing nation spearheading the world’s first eco-friendly city is of course not lost on anyone but the vision and effort should be applauded - whether or not you are one of the more cynical that does not believe in all the climate-change mumbo-jumbo anyway (remember those damning emails released shortly before the inconclusive Copenhagen summit).

Taking advantage of current access to wealth and a bit-of-a-wave in eco-friendly solutions is a smart move that will not only placate many negatively inclined to a “dirty-energy” exporting nation such as the UAE, but also bring about one of the region’s most needed and essential elements capable of producing a viable and sustainable economy – manufacturing. Whilst we have discussed this at length a few times, the position Saudi, Qatar and Abu Dhabi find themselves in today requires a strong manufacturing sector for both economic and political requirements.

As populations grow and wealth spreads (it spreads slowly, the rich in this part of the world do not really like to throw it around the masses) discontent threatens to increase as more find themselves out of work, dependent on the state and envious of those that do in fact control the nations’ resources (and supercars, and yachts and…). This may take some time of course, say another 50-75 years, but it is certainly smart to prevent a problem from occurring rather than trying to solve one once it has taken shape.

The Mastercard move…
By providing and creating the opportunity for global firms to set-up shop across the Middle East with more intensive purposes than simply distribution, manufacturing in all shapes and forms will create an outlet for a regional population growing in number through natural demographics and immigration, preventing the restlessness that often evolves through inaction – Saudi’s spurt in fundamentalism and a worrying trend towards radicalism in 2001-2006 prompted the Kingdom’s ruler to focus steadily on gearing up the manufacturing sector there. Abu Dhabi is a long way off in terms of Saudi’s population numbers, but with forecasted growth figures pointing to a 200% increase by 2050, spending money now to keep money coming in tomorrow in a peaceful society is clearly viewed as priceless.

The summit itself appeared extremely well-organised and equally well-attended with a lavish award-giving ceremony (no Ricky Gervais hosting unfortunately) recognising the year’s best innovation in renewable energy. Walking around the venue one could not help but wonder what exactly extremely short-dresses and high-heels - that attractively attired “stand helpers” - had to do with environmentally-friendly efforts(?) but the fact large numbers of attendees were walking around (and around, and around), spending a lot of time attentively locked into deep discussion with the aforementioned helpers (clearly knowledgeable about all aspects of their represented business, sure) meant for whatever reason, it was working – possibly a little too much needless conversation-induced-carbon-dioxide being produced though.

Monday 18 January 2010

Blue and Dry

Weekend aftermath…
Stick or carrot? Management gurus and psychologists the world-over have spent the weekend locked in argument over bonus-payments as they discuss the pros and cons of promising large wads of cash for good performance, mainly in the hope of assuaging the immense levels of discontent throbbing amongst the masses (mostly in the UK and US – the media to blame, naturally) as due dates for bonus-payment near ever closer. Concerns over China’s break-neck growth were beginning to surface, as articles increasingly focus on similarities between their large levels of fiscal and monetary stimulus, rises in asset prices across the spectrum and levels of productivity per capita with those of Japan in the late 80s before their bust and “lost decade”. China is nowhere near Japan’s equivalent level of development and wealth in the late 80s though (look closer to the late 60s instead) so in-depth analysis and comparisons leave the majority of such arguments without merit – many more years of wealth generation lay ahead for the Chinese. Dubai World debt is reportedly being offered by some of its smaller institutional holders in the market, a sign that discussions have met with disapproval from some creditors who likely want to exit and be done with the whole affair – seems Abu Dhabi is holding steady at refusing to implement a total sweep of its neighbours’ troubles, pushing negotiations to the limit – fair enough. Also, what seemed a long-shot in the Arabian Gulf is surprisingly nearer to conclusion after announcements that the GCC have agreed on details for implementing a region-wide train network in a (much needed and efficiency inducing) $15bn project - let’s hope there’s no disagreement about whose country’s leader’s portraits will adorn each carriage and let’s not even begin thinking about the arguments that will be held when they initiate “conversations” (shouting is not really conversing) to decide what on earth they are going to name it!

A year since the inauguration of not only a new President in the US but a new, warmer and more charming chapter in the continuing story of international relations, a reminder of what “once was” popped up on our screens when Obama invited Clinton (not such a bad thing) and his predecessor Bush (far more frightening) to provide a consolidated response to the ongoing Haiti crisis. As Bush re-took the podium he so seldom dared to step-upon during his actual tenure as so-called “leader of the free world” (he neither led nor provided evidence of freedom for others) a horrified hush crept across the gathered reporters re-living those dark days but late-night TV comedians across the country rubbed their hands in glee at the prospect of gathering priceless new material for days to come – alas, despite his message containing the usual informal tendencies it was serious enough to hear him out, just. As the aid continues to flow, exposing the better side of human generosity, the uglier angle of political wrangling and bureaucracy is hampering efforts, with even France (mon dieu) lobbing a couple of badly-timed insults across the pond in a blame-game with the US – important not to lose sight of the individuals left homeless and without food or water who could not care less whose fault it is that essential supplies are bottle-necked at the airport.

Holiday but ok…
Markets have kicked off the week without the usual prospect of a US open later in the afternoon - with holidays there for remembering Martin Luther King – falling a little from the outset across most of Asia after a rather weak performance at the end-of-last-week: Hong Kong off about -1%, Japan -1.2%, some small gains in Korea (+60bps), Singapore (+27bps) and China shrugging off global-media concerns about its future growth prospects with the CSI gaining just under +1%. Japan Airlines is keeping investors guessing as it flirts between American Airlines and Delta offers, the one offering greater autonomy likely to win. With little direction from major US earnings and bereft of major market-moving news, not such a bad performance overall to get us going in the third week of Jan (remember, no more Happy New Year salutations so late in the game unless you want people to know how little you value them). Still early trading in Europe but so far so good, with about +40bps of gains across the majors there. Currencies have moved in the USD’s favour since the middle-of-last-week, appreciating 2% versus GBP (cable at 1.638 right now) and 1% versus Eur (New Yorkers will be smiling as they remember how their city was practically conquered by strong-Euro wielding French over the holidays walking on “Fis-avenoueee”), Gold has managed to stay out of the news for a few weeks but has quietly remained above $1,130/oz (only 7% shy of its recent high) and surprisingly no-one is even mentioning Oil in the news at the moment despite a quite volatile week of trading which saw oscillation between almost $84/brl and a steep drop to $77.8/brl (-7.5%).

Drying the rate…
With all the talk of China’s continued surge but worries growing over a possibly overheated economy, worth stopping and taking a look at our fair-weathered-friend-of-an-indicator, the Baltic Dry Index (BDI). In the last 60days the cost of transporting a container of goods has actually dropped by almost 30% and is still a full 75% lower than what it cost to move items around in May 2008. How can one of the world’s largest exporters be overheating if something as simple as the BDI is at an exceptionally low-level historically? Inventory levels have improved somewhat around the world, and it was certainly a decent Christmas for many retailers by recent anecdotal evidence (which will be confirmed in Q4 numbers as the month wears on), but were shoppers really buying the latest items or taking full-advantage of troubled retailers who were having to dump all they could find onto the display shelves in a bid to generate revenue from otherwise dead stock? From what was seen across the sales of London and New York (even Dubai, where it’s on sale even if not officially “on sale” – just ask for a discount and it will be gladly provided) there is good volume buying but of items that had been gathering dust for at least the last couple of years. Until the ability to amass disposal income powerful enough to purchase fully priced “new” items spreads throughout the ranks of consumers both high and low, a full-blown recovery is not likely in full swing.

The blues…
Amidst continuing geo-political troubles, that beacon of all things great and fake (yet strangely entertaining) Hollywood’s protagonists lashed on the make-up and sponsored outfits (and the girls got dressed too) gathering to oh-so-melodramatically initiate the start of their “awards” season – should people doing what they love and getting paid millions for it really be handed a golden-statue on top-of-it-all? Apart from smiling that no one else was amused by most of host Ricky Gervais’s jokes (that pond between UK humour and US sensibilities is still quite deep), that a totally fabricated and absolutely fantastical CGI-reality-fusion film (Avatar) walked away with two of the most significant awards speaks volumes on where the human psyche is currently gravitating – unable (or unwilling) to deal with the tough realities of earth-bound life, audiences prefer to watch a (blue) alien race toiling for their own survival in a distant planet, albeit still at the hands of evil men.

If bonuses are dealt as harsh a blow as the blood-thirsty public are vying for, a certain earth-bound-clan of self-styled-masters who prefer to entitle their power to the rest of the universe will ensure those aliens won’t be the only blue group of people out there.

Thursday 14 January 2010

Back of the Net

First, a moment to focus on the terrible natural event in one of the world’s poorest countries that has brought a human outpouring of support and empathy for Haiti over the last 48 hours. At its time of need, the richer countries that both immediately neighbour and historically relate to it have made heart-warming efforts to support the aid effort. The disaster striking home when receiving emails from colleagues that were either residing there or visiting – all are hoping the suffering is limited and feel for the unimaginably enormous losses incurred. Bad things seem to happen to the least deserving.

Salty markets…
A little blip and we’re off again. Alcoa missing its earnings alongside China’s surprise reserve requirement ratio rate hike on its banks caused global markets to take a small step back (China actually fell 2.5% yesterday, dragging most of the surrounding Asian markets down with it, Europe stuttered as it shed about 50bps across its majors) but as with most things that require a slight retreat before re-advancing, they have since initiated a move forwards, with nice green screens all across Asia and Europe this morning (Japan +1.6%, CSI +1.8%, Europe roughly 50bps back-up across the majors and US futures indicating a decent opening, S&P +0.7pts, Dow +7) Intel’s strong numbers, emerging market currencies and signs of economic strength in Australia have all tallied to push markets higher today. The troubles Japan Airlines has been facing (heart-breaking to witness once awe-inspiring Japanese firms descending into chaos and dreaded near-bankruptcy) spooked a few investors around the airline industry but quickly resolved when the isolated nature of JAL’s problems became clear. The world really has changed when the Japanese are being helped by international money.

We haven’t mentioned the price of Oil in a few weeks, missing a high of $84/brl in that time and still trading higher than $80/brl today. The shift in currencies has obviously altered investor sentiment towards both Oil and Gold (trading at $1,137/oz today, +33bps), with recent weakening across the USD in particular (Cable dipped to 1.59 last week, back at just-shy of 1.63 now) adjusting 2010 hedging policies and the spike in Oil possibly catching some off-guard as it steadily rose through the latter half of December and then shot-up in the first few days of the New Year - when surely many were still either too fat from excessive Christmas Turkey meals to direct enough blood-low to the brain, or recovering from days of partying in between the eating and New Year’s Eve.

Either way, a rise in US consumption levels coupled with the long-lasting and excruciatingly cold winter-snap holding much of northern Europe hostage, not to mention bringing the ill-prepared UK to a standstill, has maintained a heavy demand on natural resources beyond seasonal norms (Qatar must be loving all the extra need for Gas – how nice that they recently opened the Gas terminal in southern England providing near to 40% of the country’s demand). What’s up with the UK collapsing every which way when challenged with slightly adverse weather anyway? They complain of water shortages when it’s too hot in summer and run-out of gritting salt when it’s too cold – run out of water and salt? A country that is an island runs out of water and salt? Someone please explain…

China raises rates..and the stakes
China kicked off the New Year (the Western one at least – theirs is in a month or so) in much the same form – stealing the limelight by surprising markets (but rather than stimulating share prices upwards with huge amounts of spending, they caused investors to pull-back a little) with the hike in the official reserve requirement ratio, essentially forcing banks to reign back lending in a precursor to what many believe will be an actual hike in the base-rate to ensure an over-heated economy does not develop into a scalding bubble.

Whilst China affected markets and global sentiment with a necessary and quite prudent economic manoeuvre, it also presented a few problems for one of the world’s largest tech-firms when Google insinuated that its systems in China had been hacked into by the government and then threatened to pull-out of the country (where it is the number two player to the local domestic provider - Baidu) unless censorship of the net was scaled-back. Whilst Google’s position may be admirable in the face of freedom of expression and other liberal blah blah tendencies (not that it isn’t worthy of being taken seriously but, you know, the usual stuff) one can’t help but feel Google may have played this slightly wrong. After all, it is a foreign company operating in what is a centrally-controlled state that takes its own position more seriously than anything else, including business and international reputation.

China probably also won’t shed a tear if Google does pull-out, leaving Baidu to reign supreme across the net – providing an undoubtedly more pliable party to deal with/push around. First to flee China was Yahoo, then E-Bay and now maybe Google - certainly not an advertisement for ease-of-access and openness in the world’s largest web-market. The not-without-severe-turbulence fast-flying rise of China continues at the outset of the new decade, a path many foresaw would be littered with obstacles such as these. The latest internet-based machinations may resemble an own goal if much-needed foreign companies, importing essential expertise and know-how, conclude the prospect a 1bn consumers is not worth the Politbureau induced headache (notice the French choice of spelling there, softer than -buro).

Why Mr President!?
Elsewhere, one institution that certainly had a decent 2009 was the Fed. They reported a $47bn profit from their bail-out investments and if that was not enough Obama has announced a possible fee on some of the larger banks to help recoup even more money for the common taxpayer – all in the aid of reducing the rather large budget deficit ($1trn est for 2010) politicians are beginning to round-up on as the administration’s greatest burden. President Obama - whom I still like, definitely more than super-bonus-tax Gordon Brown – wants to raise $120bn to plug a couple of holes in the Treasury. It would take much more to rectify the difficult debt position the US finds itself in, but every little helps I guess. Could we please ensure around $119.99bn of those fees don’t come from Citi?

Great timing Mr President! Just as the US banks are preparing to reward their oh-so-hard-working and deserving employees with extremely large and (only fair no?) wads of cash for services rendered (or jobs destroyed – you pick) the government spoils all the fun-to-be-had in February by reminding the voting public just how evil we – uhhh..I mean the investment banking community of course - all are. Coupled with the UK’s adamant wish to “make the financial community pay for the recession” or otherwise known as the desire to “kick-all-the-bankers-out-of-London” policy, the investment banking community is not going to find it easy to get paid without feeling a (tiny) bit guilty.

Heading off to China to start a web-censorship firm isn’t sounding too unattractive about now.

Best Rgds,

Monday 11 January 2010

Happy 2010 - if you pay for it

What’s the etiquette when it comes to wishing someone a Happy New Year? Certainly the second week of January is still early enough in the game to greet those you are speaking with for the first time with best wishes for the remaining 348 days or so. The third week of Jan is acceptable but may be stretching it just a little - as evidently someone you have not spoken with until then is not that close a friend or associate (apologies in advance to those I will be calling next week) - and the cut-off point must be February. After all, who wants to be reminded that we have already passed an entire month of a new year where we thought things would be dramatically fresh and different but everything has so far plodded along in much the same vein and that gym membership subscribed-to in a moment of admirable resolution has been banished quicker than a protein-shake-can-be-mixed. So, Happy New Year to you all out there! Please enjoy those gleaming gym-machines and colourful-brand-new-dry-fit-shorts for the next couple of weeks.

New Year, Same Markets…
Where do we start when facing down the barrel of an optimistic 52 (well, 51 now) weeks of trading? With a more than decent performance already under our belts after five days to feel good about (+2.7% on the S&P500, +2% FTSE, +2.5% in Hong Kong) and China already surprising the investor community with strongly impressive trading figures (exports increasing 55% compared to this time last year), bullish talk continuing throughout the fund management community as cheap money relentlessly floods into asset classes in the search for yield, sentiment is strong out there, fervent enough to assume a strong first few months. Getting past the first quarter may seem simple enough, and even making it to the half-way point with our heads-held-up-high is less than uncertain. What happens when all the money has been spent and the powers-that-be must begin thinking of possible exit strategies towards the latter part of the year is the problem.

Early discussions and comment across the media and client-base would point to an affirmation of high-expectations for more-of-the-same in the first half of two-O-one-O, or is it twenty-ten, or two-thousand-and-ten(?), whatever you might like to call it. A few worries do persist though – financial journalists last weekend re-invigorated discussions of over-doing the bounce, and the potential for the rapid deflation of bubbles (especially in emerging markets) created and still being created through the unprecedented levels of government spending – but no one seems too concerned or willing to focus on those inevitable dangers right now. Happiness is a strong enough human emotion to ensure the enjoyment of a profitable-ride for some time to come. Tears can be dealt with at a later date. Geo-political forces may have their own say in the next six months, primarily concerns over Iran’s nuclear programme and the international community’s increasingly hawkish stance towards the constant procrastination with efforts to diffuse the apparent pursuit of a weapon that may de-stabilise the already fragile Middle-Eastern political status-quo.

NYC – the tipping is the point
Having travelled in the last few weeks around two of the world’s major cities (London and New York - now back in one with the tallest if maybe not quite the most important building renamed (Burj Khalifa) in honour of its ultimate benefactor), there were a few more interesting incidences of what 2010 may have in store. Strikingly, arriving on the East coast of what is still the world’s most powerful nation (churning out $14trn in GDP, still x3 China’s annual output) a level of fear seemed to be gripping the (exceptionally cold with a frankly insulting wind-chill factor slapping you across the face!) island of Manhattan. A single individual had failed in detonating a home-made explosive device on a US national airline, succeeding in only burning himself but at the same time bringing to its knees an entire global travel system.

Incredible as it seems, this one individual had ensured delays of up to five hours at international airports for flights coming into the US, and even once through US immigration there was little talk of anything else on the major news networks. For such a powerful nation, with one of the most feared armies in human history, one could not help but feel a little bemused at the level of fear one fumbled incident (as serious as it may have been, it was amateurish at best) could create amongst an entire population. Or was that really the case? Once you switched off the blushed-to-scary-perfection-presenters on oh-so-neutral-and-high-brow channels such as Fox News (must be one of the worst culprits in the spreading of undue fear and ignorance) and exited onto the streets of what many term the “capital-of the-universe”, the crowded streets of NYC betrayed the sense of siege some would have wanted you to believe was prevailing across the country.

As if collectively called to visit world-famous icons such as the ever-shining representation of liberty with “that” Statue and the Empire State (take the Express Pass, trust me), tourists oblivious to seemingly both terrorist attempts and greedy-bankers destroying jobs and wealth - you could easily exchange descriptions there if you like - thronged the spacious avenues from Mid-Town to the Financial District (which was eerily quiet). What were the New Yorkers thinking themselves though? Well, first you had to find one. It seemed the entire island had been handed over to the tourists apart from a couple of the more local areas.

It was in those areas, where the affluent spread their wings as widely as Central Park dominates the view-from-atop, that levels of confidence in the ability to recreate success from temporary failure shone-through. Historians point to one of the US’s greatest strengths being its lax-treatment of those having suffered bankruptcy – both corporate and personal – and attribute much of the underlying emotive credence that success is achievable to the absence of total failure, or at least the absence of the existence a heavily negative stigma attached to failure (failure is in fact oft-viewed as a necessary experience on the path to success). More than one encounter with NYC residents confirmed that reaching close to rock-bottom and surviving really only does make you stronger. There was no surprise then when even meeting waiters that had only several months earlier been running Silicon-valley based internet firms or real-estate companies in Seattle and now working on their latest business plans to ”revolutionise the food delivery business” in metropolitan areas.

Second chances are worth $14trn/yr it seems.

Any city where the cab-drivers regale (often unprompted) their passengers with tales of their past entrepreneurial activity and future ambitions, simultaneously informing of their rather profitable investments made on the markets in 2009 and then still demanding a tip at the end of the journey before the passenger’s hand has even made for his wallet, is a winner in my books. The sheer undiluted sense of optimism and unrelenting belief that things will get better is contagious and positively infects every facet of daily-life. You are not allowed to look depressed in a city like New York. You are not allowed to sound sad, and you most certainly cannot get away with talk of defeat or doom-and-gloom. When the human spirit is so fragile and has been assailed from every angle with talk of the end of our consumer civilisation as we know it, it is strangely heartening to witness capitalism still thriving in the heart of its creator’s domain.

I’ll tell you what’s amazing in New York (and other parts of the US in fact). The expectation of being paid for your services is built-in to the very fabric of people’s daily activities. You cannot so much as guarantee a bell-captain in a hotel (not bell-boy, oh not, not in NYC, there they are all bell-“captains”), nor ensure you sit at a reserved restaurant table anywhere in the vicinity of the time you reserved it for, without having to pay for it. A Benjamin here and a Franklin there makes the world of difference. In fact, it doesn’t just make a difference, it makes things happen. Need to jump a queue to grab a much-sought after table (a three hour wait) in a movie-made-famous café? No worries – just slap the palm with a note worthy of recognition and hey-greenback-presto you are in there.

Now, some societies would frown upon the need to have to pay above-and-beyond what most would assume is a naturally provided service, and in most cases they would be right. There is also a rather fine line between working for money and only working when there is extra money involved. In other cities the incessant need to go that “little extra” could become a sour experience, but somewhere as vibrant and (dare I say it – in love with the power that money brings in an enduring affair of greed) it passes as daily activity – a routine that separates the “haves” from the “have nots”. Its widespread acceptance results it in being accepted.

To have or not to have…
The key difference in a NYC type society and somewhere like Asia though? The belief amongst the “have nots” that they are only temporarily not the “haves” – that through a number of years of honest-hard-work (or within a matter of months for others through not-so-honest hard work) the status that wealth brings with it, and the (literally) opening of restaurant doors it proffers is an attainable goal. This is of course the very basis of the ‘American Dream”. Whilst it is always spoken about, often written about and nowadays sung, rapped and hip-hopped about (go Alicia Keys “Concrete jungle where dreams are made of,
There’s nothing you can’t do, New York, New York”) there is nothing as invigorating as experiencing it hard-and-fast, first-hand.

On the way out of a trendy restaurant in a once industrial part of Downtown, a have-not individual requested donations from the “have” diners exiting, blessing each and every one as they handed over modest dollar bills. One generous diner must have handed him something a little more substantial at one point, as he got up off the ground when realising the note’s value and chased the cab the diner had entered to ensure he thanked him excitedly, jumping up and down whilst declaring “the dream is alive!”

A city where certain nightclubs and lounges only provide guests with the chance to enter if they have personally been provided with the proprietor’s private mobile number to which a text message must be sent, requesting the key-code sequence for that particular evening which must then be tapped-into the innocuous looking front door with a red-light above, only then granting entry to the (admittedly impressive) bar/lounge where drinks cost as much as a small home in Korea, and the clientele ache to be noticed whilst doing their best to hide. Only a city where those without the code feel they might one day be sitting in that lounge looking out can get away with such a notion.

No matter who you spoke with, whether they were relative new-comers or long-standing dwellers of their proud-city, a self-belief that they were in the right place prevailed. Sure, there is talk and awareness of the rise of China and other great emerging countries, but no one seems too immediately bothered when they notice that many from those countries still decide to move to theirs to pursue their dreams. That must be one of the main attractions of somewhere with the dynamism of NYC – that it is attractive to others, and every one always wants to feel they are where others want to be.

What’s ahead…
The indicators for 2010 are clear. The desire for governments to continue to stimulate economies is strong and the majority feel it is still necessary to avoid a relapse into the fearful quarry of a deeper recession and avoid the dreaded depression factor. Central banks may be accused of failing to focus on asset-price inflation once again in their goal of controlling consumer-price inflation. The more optimistic out there argue that markets are experiencing a “sweet-spot” as developed nations continue to recover and pull themselves out of recession, but remain fragile enough to ensure governments remain reluctant to nip the return-to-form in the bud by raising rates. This is indubitably providing more incentive for markets to rise and investors to diversify into riskier assets. It appears there is a green light to enjoy the inflating of a few bubbles here and there for some time to come before difficult questions must be asked and decisions made about when enough-is-enough. As always, timing will be everything.

Run down the 2010 path…
How about those New Year resolutions we all made in the last few weeks? That gym scenario again looms tall. Difference between cities around the world and attitude of its inhabitants to their resolve to adhere to the belief certain changes will impact positively on their lives? Gyms in London, Hong Kong and Tokyo all market special offers in January to attract new members. What do New York gyms do? Actually increase prices in January to catch the extra demand and lock their members in for 12 months minimum.

As per the tag-line of the gyms’ most visible brands - keep running in 2010.

Best Rgds,