Search results for Jon Markman
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Posted
Sep 30 2009, 07:32 AM
by
Jon Markman
Money Blog: Top Stocks Blog - MSN Money
The two major earthquakes in Samoa and Indonesia over the past day have left hundreds dead, thousands homeless and millions frightened. It's way too soon to assess the business impact on the region, but generally such devastating events end up having a surprisingly positive regional effect, in time, as affected areas are rebuilt at great expense.
The U.S. stock market reaction has been negative, in tandem with some disappointing domestic economic news, yet in time, historically, such events have led to higher markets. Working off a list of seven major earthquakes/tsunamis in the past century, shown below, Markethistory.com determined that the Dow Jones Industrials Average has tended to advance sharply over the next 30 trading days.
In six of the seven cases, the Dow rose by an average of 3.9%, and in the one other case was down just 1%. Overall, the U.S. market averaged a return of 3.2% over the next five weeks.
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Posted
Sep 18 2009, 02:39 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
If you're an out-of-work behavioral finance specialist, I have a project for you: Figure out why there's a three-year cycle of optimism and pessimism among investors.
ISI Group analysts pointed out in a note to clients this week that investors in the past decade and a half have been getting overly happy and overly gloomy every three years. I never thought about it before, but it seems to be true enough.
Back in 1997, investors grew gloomy and global markets tanked amid the Asian currency crisis. But three years later, in 2000, investors became overly sunny about the Internet revolution and the market topped.
Three years after that, in 2003, investors were too bearish again after terror attacks, Enron's collapse and a three year decline in stocks, and the market hit bottom. Three years after that, in 2006, investors got too bullish again amid hopes about globalization, China, a housing boom and economic Goldilocks scenarios -- and the real estate market topped out.
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Posted
Sep 14 2009, 05:49 PM
by
Jon Markman
Money Blog: Top Stocks Blog - MSN Money
No wonder the unemployment rate is so high. The new head of Chrysler has top jobs at five separate companies himself.
Sergio Marchionne, the new hands-on CEO at Chrysler Group LLC in Detroit, is also the CEO of Fiat SpA in Turin, Italy. And he's the chairman of CNH Global NV, an Amsterdam-based farm equipment company. And he's vice-chairman of the Swiss bank UBS AG. And he's also chairman of SGS S.A., a goods-inspection company in Geneva.
The dude is a one-man executive temp agency. I guess he doesn't like to be bored.
Bloomberg reports that the Canadian-Italian exec sleeps only three to four hours a night, often on the corporate jet; works every weekend; and takes only five days of vaction per year. The news service says he travels with a small backpack containing two BlackBerry devices and two iPhones -- one each for Chrysler, Fiat, CNH and UBS, plus a spare for emergencies.
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Posted
Sep 14 2009, 03:37 PM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
President Obama's tough-love speech to Wall Street on Monday underlined the increasing importance of government's role in the markets over the coming years. Whether you call it state capitalism, socialism or some other epithet, investors have come to believe policy makers worldwide must keep up their application of adrenaline to financial systems while businesses and consumers are getting their act together.
Any hint of withdrawal of governments' love will spook the markets, so you really need to put your antenna up every time policy makers speak on this subject. In the past week were three important comments along these lines in China, Europe and Washington. Pay attention.
Chinese Premier Wen Jiabao pledged Thursday to continue his government's aggressive stimulus efforts, saying the world's third-largest economy faces persistent problems and uncertainties from the global recession despite an upturn in growth. The Wall Street Journal reported that in a speech to business leaders at a World Economic Forum meeting in the northeastern port city of Dalian, Wen reaffirmed the government's confidence that it can reach 8% growth in gross domestic product this year.
He said Beijing's efforts to propel growth have been "timely, forceful and effective." China's economic growth accelerated in the second quarter to 7.9% from a year earlier, up from 6.1% in the first quarter. Wen didn't offer fresh initiatives or discuss additional outlays beyond the already announced stimulus spending. So far so good; this will keep China in rally mode.
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Posted
Sep 01 2009, 06:26 PM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
When the century-old investment bank Lehman Brothers collapsed a year ago, it spawned not just a global financial firestorm but a cottage industry of insider accounts of where it all went wrong. Three major books have been published and more are on the way -- each proposing to tell us the darkest secrets of the world's worst-run brokerage. (My take on it: New column.)
Any endeavor that pits Type A personalities against each other in a battle for control of the public discourse is bound to be competitive, and one like this in which reputations are at stake will naturally be especially fierce. That makes the effort by Lawrence G. McDonald, a former vice president at Lehman, particularly compelling, as he was first out of the gate.
In a late-night conversation from his vacation in Paris, the former fixed-income trader told me that the book, "A Colossal Failure of Common Sense," took him and co-author Patrick Robinson one hundred and seventy-three 17-hour days to research and write -- including Christmas and New Year's. Not that anyone's counting. Because he was first off the starting line with a publishing contract and a plan, he managed to grab co-workers for interviews "at a golden moment of frustration," he says, a time when they wanted the bad apples at Lehman exposed. The bottom line is about what you'd imagine: An overmatched boss failed to listen to smarter underlings and drove the company into the ground. The details are amazing, which makes the read compelling even if you feel you know the whole story already.
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Posted
Aug 28 2009, 06:34 PM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Emerging markets have rocketed higher in the past few months as investors have lost their inhibitions and spread the money that was stashed in Treasury bills last year into risk assets. Since the March lows, they're up 70% to 90%, which would be a good return for half a decade in less ebullient times, much less half a year.
Strangely enough these kinds of gains probably can be maintained, as the companies underlying the indexes are still pretty cheap and are exhibiting the fastest real growth in the world. You know all about China, but they're not the only ones: On a quarter-over-quarter annual rate, Thailand's economy expanded 9.6% while South Korea's economy grew 9.6%. And according to analysts at the ISI Group in New York, China's economy is on track to expand 14% in the third quarter by the same measure -- so the gains are continuing.
Improvements are being driven by a turnaround in exports as the freezing of trade finance has thawed and inventories around the world are depleted -- forcing managers to place new orders. Taiwan's export orders are up 47% from their low while Estonia's exports are up 23%, Singapore's are up 15%, and Germany's are up 6.2%. Even the U.S. is enjoying a 43% turnaround in semiconductor equipment orders. Take that, bears.
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Posted
Aug 06 2009, 11:58 AM
by
Jon Markman
Money Blog: Top Stocks Blog - MSN Money
 We're finally seeing some brand-name companies hit the new high list. Among them this week were Whole Foods Markets, up 15% this week in a return to a level not seen since last May, Lumber Liquidators, a value-focused wood products company dependent on residential construction, up 17% this week to a new all-time high, and Dollar Thrifty Auto Group, now up more than 30x in six months.
It's great to see these smaller companies figure out how to survive and thrive in the downturn. For business junkies, this is like watching a series of MBA case studies unfold before our eyes in real time. You just have to be so impressed with their managers' ability to blunt the predations of lower revenue by cutting expenses, improving marketing and gaining share.
LL reported earnings that beat analyst estimates as its executives pushed into new markets, lowered costs and competed with its much larger rivals on price. It sells lumber at 2% to 40% cheaper than Home Depot and Lowe's by buying directly from mills and spending less on store locations. Analysts believe the company can continue to increase margins and lift market share, meaning this is most likely a small-cap company with a bright future.
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Posted
Jul 20 2009, 02:45 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Evidence is mounting that renewed weakness in the economy has begun to pummel states and cities, a development that will impede the progress of the federal government's fiscal stimulus efforts. The latest word of borderline terror emerged over the weekend from Pennsylvania and Silicon Valley.
On Friday, the government of Philadelphia reported that it has stopped paying its vendors and suppliers because it lacks the cash. The mayor of the nation's sixth most populous town blamed state lawmakers who were slow to approve a request to hike the city sales tax. The mayor also wanted rules changed that would allow it to contribute less to a pension plan.
Philly announced it won't spend money on anything but payroll, debt service and emergencies until the state gives the go-ahead to up taxes to 8% for a period of five years. The city's problems are the same as seen in cities and states across the country: Widespread layoffs have led to lower spending at retailers, which has in turn yielded lower tax revenue. While the city's income is variable, though, its obligation to pay city retirees is fixed.
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Posted
Jul 14 2009, 07:47 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
ExxonMobil's decision to tie its future to pond scum (news) really has the alternative-energy skeptics buzzing today. But the concept of generating transportation fuel out of algae is not really so far fetched.
Fossil fuels like crude oil, natural gas and coal are nothing more than organic matter compressed over a few hundred million years into liquid, vapor or solid form. Mass-producing special forms of algae in the way that the oil giant's new partner, Synthetic Genomics, has proposed is just a matter of speeding the process up a bit.
I profiled Synthetic and its chief scientist, Craig Ventner, a year ago in a column, "Genomics: Our oil-crunch cure?" As I explained then, it's helpful to think of algae as an efficient biological system for turning sunshine and carbon dioxide into fuel. If you then think of of creating super-algae out of DNA strands in the same way that computer engineers create software code, and you're a little farther toward understanding why algae is considered to be Fuel 2.0. Here is a video of Ventner explaining the concept at a TED conference in 2007.
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Posted
Jun 19 2009, 04:23 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Hey, you remember how China and the rest of the world got all up in arms about "Buy American" provisions of the federal stimulus package last winter? Well it turns out that Bejing has decided to go the same route, and they are also being roundly criticized.
The National Development and Reform Commission, which is China's top planning agency, has issued a set of directives ordering government agencies to buy local products whenever possible for state-financed projects. Planners apparently want to ensure that the roughly $580 billion in stimulus benefits Chinese firms first, and everyone else last.
This caught the world by surprise because Beijing has actually shown leadership in fighting protectionism elsewhere. The World Bank's top economist in China, Ardo Hansson, said he found the new rules shocking because he believed Beijing leadership had understood, as a major exporter, better than anyone that limits on procurement were harmful.
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