Saw this article from Seeking Alpha. David Merkel on a book written by Homer and Sylla on "A History of Interest Rates 4th edtion".
Saturday, December 27, 2008
A History of History Rates
SEC Glass Seagall 99 and 04
SEC has really done a very bad job.
The Sarbanes-Oxley Act of 2002, also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called Sarbanes-Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002 in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of the affected companies collapsed, shook public confidence in the nation's securities markets. Named after sponsors Senator Paul Sarbanes and Representative Michael G. Oxley, the Act was approved by the House by a vote of 334-90 and by the Senate 99-0. President George W. Bush signed it into law, stating it included "the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt."
http://en.wikipedia.org/wiki/U.S._Securities_and_Exchange_Commission
The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA) in 1999. The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.
The argument for preserving Glass-Steagall (as written in 1987):
The argument against preserving the Act (as written in 1987):
The repeal enabled commercial lenders such as Citigroup, which was in 1999 then the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities.
http://en.wikipedia.org/wiki/Glass-Steagall_Act
SEC 2004 - On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks. They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary. A lone dissenter — a software consultant and expert on risk management — weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington. One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told — those with assets greater than $5 billion.
http://sites.google.com/site/ec510fall08/04-bank-rule
Cheung Kong Group
Cheung Kong (Holdings) Limited (Cheung Kong Holdings) is the flagship of the Cheung Kong Group, headquartered in Hong Kong, and one of Hong Kong's leading multi-national conglomerates.
In Hong Kong alone, the Group has nine companies.
Cheung Kong (Holdings) Limited
Hutchison Whampoa Limited
Cheung Kong Infrastructure Holdings Limited
Hongkong Electric Holdings Limited
Hutchison Telecommunications International Limited.
Hutchison Harbour Ring Limited
TOM Group Limited.
CK Life Sciences Int'l., (Holdings) Inc.
TOM Online Inc.
The Chairman of Cheung Kong Holdings is Mr. Li Ka Shing (李嘉誠), while his elder son, Mr. Victor Li, is the Managing Director and Deputy Chairman.
Cheung Kong Holdings is one of the largest developers of residential, office, retail, industrial and hotel properties in Hong Kong. With its long history of property development expertise and residential estates, Cheung Kong Holdings has built many of Hong Kong's most notable landmark buildings and complexes. Mr. Li Ka Shing founded Cheung Kong Industries in 1950 as a plastics manufacturer. Under his leadership, the company grew rapidly and eventually evolved into a property investment company. "Cheung Kong (Holdings) Limited" was developed in a successful way from 1970s.
1928 Li Ka-shing is born in Shantou, China
1940 Moves to Hong Kong
1950 Starts Cheung Kong factory making plastic flowers
1958 Makes first property investment
1964 First son Victor is born in Hong Kong
1966 Second son Richard is born in Hong Kong
1972 Li Ka-shing's company lists on Hong Kong stock exchange as Cheung Kong Holdings
1979 Li Ka-shing buys property and trading conglo Hutchison Whampoa from HSBC
1983-90 Victor Li works on real estate projects for his father in Vancouver
1985 Li Ka-shing buys Hongkong Electric, the territory's main power supplier
1985 Victor Li graduates in construction management and engineering from Stanford
1985 Hutchison Telecom to launch mobile phone service in Hong Kong
1987 Richard Li graduates from Stanford with a degree in computer science ?
1987 Richard Li becomes partner in Gordon Capital, a Toronto investment bank
1987 LKS bought 52 percent of Husky Oil from Nova of Canada.
1990 Victor Li returns to Hong Kong to work for Cheung Kong
1990 Richard Li returns to Hong Kong to work for Hutchison Whampoa
1991 Richard Li launches Star TV
1991 He bought Nova's stake and merged Husky with Renaissance Energy in 2000.
1993 Richard Li sells Star to News Corp. for $950mm, launches Pacific Century Group
1994 Li Ka-shing establishes Orange mobile phone service in Britain
1996 Richard Li establishes Pacific Century CyberWorks
1996 Launches Cheung Kong Infrastructure Holdings to consolidate construction ops
1996 Victor Li kidnapped. Father paid more than $100 million for his release
1999 Richard Li announces Cyberport, a government-backed real estate venture
1999 Li Ka-shing sells Orange to Mannesmann, gets 10% of German firm's shares
1999 Victor Li's kidnapper, Cheung Tze-keung, executed in China
1999 Victor Li becomes MD of Cheung Kong and deputy chairman of Hutchison Whampoa
2000 January Li Ka-shing establishes Tom.com
2000 Mannesmann bot by Vodafone in biggest takeover,ends up with USD15bn stock
2000 February Tom.com's IPO is oversubscribed 669 times
2000 February Richard Li buys Cable & Wireless HKT for $38 billion
2005 LKS sold USD1bn stake in CIBC and donates it to LKS foundation.
The story begins in 1979, when Li Ka-shing purchased what became the controlling interest in one of the oldest, 19th century British trading houses, or "hongs" of Hong Kong, known as Hutchison-Whampoa. Already a millionaire from real estate and property management investments, Li launched a diversification program through HW that involved trading, cargo and container operations, logistics, warehousing, engineering and even retail sales.
Li expanded into the utility and energy fields in 1985 by acquiring a 33 percent interest in Hong Kong Electric Holdings Ltd. Two years later in 1987, Li expanded overseas again, this time by taking a 43 percent interest in Husky Oil, an oil and gas company based in Canada. Since then, Husky Oil ownership has shifted to 46 percent ownership by Li and his family, 49 percent-owned by HW and 5 percent by the Canadian Imperial Bank of Commerce. Husky ranks among Canada's top producers of crude oil, natural gas and recovered sulfur.
The 1990s brought continued diversification and expansion to Li's holdings. In 1993, Li became involved in a bidding war over Hong Kong's Miramar Hotel & Investment Company. Interestingly, Li's partner in the bid was CITIC Pacific, the Hong Kong-listed arm of the China International Trust and Investment Corporation that is controlled by the Communist Chinese government. His "opponent" (to whom he "lost") in the Miramar bidding was Mr. Lee Shau-kee -- Li's partner in many other joint ventures. Li's partnerships with CITIC and Lee in various investment and development initiatives are frequent and diverse. Mr. Li's interest in hotels continued through 1994 when Hutchison International Hotels entered into joint ventures with the Beijing government over two of the oldest hotels in the capitol. The Chinese tycoon has also formed a subsidiary called Cheung Kong Infrastructure, as a diversified infrastructure company committed to the fast-growing Asian infrastructure market, especially mainland China. CKI divisions include:
CKI Materials, which is one of Asia's most successful cement, concrete, asphalt and aggregates operators.
CKI Energy, which has interests in power plants in four provinces in China, including Guangdong, Henan, Liaoning and Jilin.
CKI Transportation, the portfolio of which comprises a variety of road transportation systems, ranging from a section of the National Trunk Highway System to city roads and ring roads.
Then there is the arguably largest "public works" project in the world -- the Panama Canal. Under the terms of the Carter-Torrijos Treaty of 1977, the United States was due to relinquish control of the canal and associated port facilities in a time-phased process culminating in a complete turn over to the Panamanian government on Dec. 31, 1999. In 1996, the Panamanian government of President Ernesto Balladares opened bidding on the port terminal concessions at both the Atlantic and Pacific entrances of the canal. Under bidding practices and circumstances that were reportedly fraudulent, HW won the bidding. HW subsidiaries Hutchison Port Holdings and the Panama Ports Company now effectively control the Panama Canal.
HW has done well as the operator of Hong Kong International Terminals, the world's largest independently owned container terminal, and, profits from HW port and related services totaled $3,097 million in Hong Kong dollars. As the world's biggest independent port operator, Hutchison Port Holdings has invested in 17 ports, operates 79 berths and handles about 10 percent of global container traffic. Operating ports include Shanghai in China; Felixstowe, Thamesport, Harwich in the UK; Freeport Container Port on Grand Bahama Island; and a 50 percent interest in the Grand Bahama Airport Company, which comprises an 11,000-foot long runway capable of handling the world's biggest aircraft. This investment also includes a 780-acre tract of land between the airport and container port. Plans are being prepared to develop this into an industrial park, which will also contain a sea/air business center. Other investments in the Bahamas include three hotels and two golf courses.
Not satisfied with controlling Britain's three principal seaports and the Panama Canal, Li's European expansion includes a $357 million plan to acquire the continent's largest container handler, Europe Combined Terminals in Rotterdam, Holland. The European Commission launched a four-month investigation into the proposed deal, ending with a determination to allow HW to negotiate a 35 percent stake in ECT.
In further bids to "diversify," Li has purchased all of South Australia's electricity distribution and retail assets, also pledging to acquire a 25 percent stake in the Bangkok Transit Systems Company's "Skytrain" project -- costing Mr. Li between $100 and 200 million.
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=18750
http://en.wikipedia.org/wiki/Cheung_Kong
Wednesday, December 24, 2008
PCCW Stock Crash
2 key things abt the PCCW - the cyberport project as well as the bidding for the HKT project. Alot of investors got hurt when the price dropped significantly.
RLI dropped out of Stanford shortly before graduation, he joined some financial company to learn deal making and was for a while trying things out in Canada, but was persuaded to join Hutchinson-Whampoa during which he started a number of initiatives. The best known being the establishment of a satellite TV company, a loan from the father, which was sold to the Murdoch group (profit US$400M); 6x return on a 3yr horizon. However, he soon launched out on his own, buying a small Singapore finance company, renaming it Pacific Century Regional Development and injecting some of his HK based high tech operations into it, so that PCRD became their holding company.
In 1999 the HK government initiated the Cyberport project, basically a business park specially designed to support high tech operations, and in early 2000 awarded it to Li's Pacific Century Cyber Works company without going through the full competitive bidding process, which aroused some criticism. This is a 2bn, 240k sqm venture.. but PCCW was allowed to build the project on prime RE without competitive tender.
This was overshadowed when PCCW bot over HKT in Aug 2000, sidestepping Singtel in the process. The bought over was financed by a package of USD11bn in debt and PCCW shares. It enticed investors with some high tech schemes that PCCW will be able to implement once in control. However, with the dot-com crash, stocks dropped from S$4 to 20c at one point. PCCW was the worst performing blue chip on HKSE on 2002 and 2003from intense local telco competition and a struggling international JV Reach with Telstra. In 2003, C&W cashed out of its 14.7% stake in PCCW, taking out USD1.9bn instead of the USD5bn worth in 2000. PCCW purported to hv launched a STG2bn bid for C&W but got rebuffed in feb 2003. RLI gave up CEO in jul 03 but remained chairman. Jack So left MTRC to run PCCW.
For a number of years PCCW diligently worked to reduce its debt burden, including inviting China Netcom to purchase a 20% share holding at HK$5.90 per share, well above the then market price (for US1bn capital injection). This brought hope that PCCW would be able to actively expand its business in China. A saving grace was an early bet on IPTV .
RLI tried to sell PCCW in 2006 to potential buyers like Macqaurie and TPG. But got rejected. After the apparent China veto, Leung stepped on to the scene to buy the 23% stake for $1.2 billion in a shadowy deal that sent the company's stock plunging. Leung will borrow 70% of the acquisition price from PRCD, company 75% owned by the younger Li, and no explaination of the source of the remaining 30%. RLI will still hold on 3% of the company and walk away with USD991mm after resigning as chairman.
In 2008, Li’s PCRD and the China Unicom-China Netcom Group are proposing to buy out other shareholders of PCCW for US$1.9 billion, or at a 45% premium to its last traded price. Li and PCRD, and China Netcom currently own 28.5% and 19.5% of PCCW respectively. The deal is structured in such a way that China Netcom would increase its stake in PCCW to 33% and PCRD and Li’s to 67%. For one thing, there is more to the deal than meets the eye. PCCW will pay Netcom and Li/PCRD US$2.3 billion in dividends immediately after the buyout, which is expected to cost them US$1.9 billion upon completion. In other words, the reason the two major shareholders are able to do a deal like this in the midst of a severe global credit crunch is that they are actually getting paid to do it. For their part, Li and Netcom say they would be taking over a hugely indebted group — PCCW’s net debts will rise to US$4.7 billion after it pays out the dividends. But investment bankers are already being sounded out for a separate listing of PCCW’s telecom assets within 18 months of the holding company’s privatisation.
PCCW is the leading internt service provider in HK using the Netvigator brand for dialup modem and DSL service.
http://blog.360.yahoo.com/blog-XIIfDzQobqO5oCYM9UTvZzgKHH4Org--?cq=1&p=285
http://en.wikipedia.org/wiki/PCCW
Asia Peregrine Story
Alot of my ex-colleagues used to be from Peregrine. Doesn't it sound so familiar that the investment banks levered up on so much risk and now they hv to fire so many people? Why don't people ever learn?
Peregrine was founded in 1988 with an initial investment of $38 million by former race car driver Philip Tose and Francis Leung. Both ex-citibankers and had a large number of connections to Hong Kong's business elite including Li Ka-shing, Gordon Wu and Larry Yung. Goal was to profit from the expanding Asian economy by underwriting stocks and bonds to provide capital for the Asian countries.
The company was characterised as "arrogant", and thrived on taking risks. Commenting on their investing during the Tiananmen Square protests of 1989, Leung said, "These events were just a hiccup. We decided we wanted to take advantage of depressed market conditions at the time". In 1994, to create an Asian bond market, they hired Andre Lee from Lehman Brothers to head their fixed income department. Lee, a French Canadian-Korean who grew up within the American military presence in Seoul, was described as a "wild man" and "a salesman who could 'sell snow to the Eskimos.'" By 1996, Lee's operations provided one half of Peregrine's profits. In 1997, Lee stated that infrastructure deals will be "the real phenomena that will create Asian bond markets. Almost single handedly, Lee created the Asian junk bond market.
In 1998, financial markets were changing. Peregrine underwrote the bond issue by Steady Safe, an Indonesian transportation company of $265 million dollar, half of Peregrine's capital. On the surface, the deal looked secure, although repayment would be in Indonesian rupiah. The deal was undersubscribed, and Peregrine was left with the remaining bonds. Following the collapse of Steady Safe along with several other losses during the Asian financial crisis, the company lost all liquidity and after unsuccessful negotiations with would-be suitors and white knights, and closed in January 1998. The Greater China team stumbled into the arms of BNP Paribas, while a substantial portion of the Asia team (ex-China) was hired by Banco Santander.
BNP Paribas Peregrine is now the investment banking arm of BNP Paribas in Asia. At the end of 2006, BNP announced it was aligning its branding throughout Asia, and the Peregrine name was dropped.
http://en.wikipedia.org/wiki/Peregrine_Investments_Holdings
Friday, December 19, 2008
China Reform History - From FT
Long, slow path of reform
1976: Cultural Revolution ends with the death of Mao Zedong, bringing to a close a decade of economic stagnation
1978: Deng Xiaoping asserts himself as leader and sets the country on the path of “reform and opening”
1984: Dismantling of rural communes largely completed, allowing peasant farmers to farm their own land and sell any excess produce for a profit
1989: Against a backdrop of inflation above 20 per cent, protests erupt across the country in solidarity with students in Tiananmen Square calling for political liberalisation
1990-1991: China’s first stock exchanges since the Communist victory in 1949 are opened in Shanghai and Shenzhen
1992: Deng tours southern China to press for faster economic reforms and quell the influence of party conservatives opposed to market liberalisation, sparking a fresh wave of market growth
1997: Hong Kong returns to Chinese rule
1998: The Asian financial crisis hits China, contributing to widespread layoffs in the state sector
2001: China joins the WTO, sparking spurt in export and investment-led growth
2005: China unpegs the renminbi from the dollar, letting it float within a tightly managed band
Saturday, December 13, 2008
Reliance Group
The company was founded by the legendary Dhirubhai Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 34 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India.
Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain.
The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and retail.
Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products.
The Group exports products in excess of US$ 20 billion to 108 countries in the world. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail Limited) and Reliance Industrial Infrastructure Limited.
Reliance Anil Dhirubhai Ambani Group, a group of Indian companies headed by Anil Ambani, including:
- Reliance Capital
- Reliance Communications
- Reliance Entertainment
- Reliance Energy
- Reliance Power
Reliance Industries Limited (NSE: RELIANCE) is India's largest private sector conglomerate (and second largest overall) with an annual turnover of US$ 35.9 billion and profit of US$ 4.85 billion for the fiscal year ending in March 2008 making it one of India's private sector Fortune Global 500 companies, being ranked at 206th position (2008). [1] It was founded by the Indian industrialist Dhirubhai Ambani in 1966.
Though the company's oil-related operations forms the core of its business, it has diversified its operations in recent years. After severe differences between the founder's two sons, Mukesh Ambani and Anil Ambani, the group was divided between them in 2006. In September 2008, Reliance Industries was the only Indian firm featured in the Forbes's list of "world's 100 most respected companies". It is headed by Mukesh Ambani, son of late Dhirubhai Ambani. Reliance Industries Limited has a wide range of products from petroleum products, petrochemicals, to garments (under the brand name of Vimal), Reliance Retail has entered into the fresh foods market as Reliance Fresh and launched a new chain called Delight Reliance Retail and NOVA Chemicals have signed a letter of intent to make energy-efficient structures.
Once-inseparable brothers, Mukesh (right) and Anil (left) Ambani fought publicly and bitterly for months over control of Reliance Group. The company was founded by their late father and is now one of India's largest companies, with revenue equal to 2.6% of the country's gross domestic product. Rumor was that Mukesh was trying to tighten control over group's ambitious telecom venture. In mid-June, their mother Kokilaben brokered peace: Mukesh will now run Reliance Industries ($21 billion market cap) and IPCL ($1 billion) while Anil will get Reliance Energy ($2.8 billion), Reliance Capital ($1 billion), Reliance Infocomm (est. $3 billion) and reportedly more than $1billion in cash.
Key Dates
1948: Gujarat native Dhirubhai H. Ambani, aged 16, travels to Aden and begins working as a clerk at a service station.
1958: Ambani returns to India and sets up an import-export business, eventually focusing on the textile market, which becomes Reliance Textiles.
1966: Reliance launches textile manufacturing, building its first factory.
1977: Reliance goes public in one of India's first and largest public offerings.
1981: The company begins construction of a polyester filament yarn facility in Patalganga.
1986: After Ambani suffers a stroke, sons Mukesh and Anil take over day-to-day direction of the company; the company launches its first petrochemicals production as part of a vertical integration strategy.
1991: Reliance Refineries Ltd. is established in preparation for further vertical integration.
1993: Reliance Refineries goes public and changes its name to Reliance Petroleum.
1997: Reliance Petroleum launches construction of India's largest oil refinery at Jamnagar.
1999: Reliance wins a bid for 12 exploration blocks auctioned off by the Indian government.
2002: Reliance locates the largest Indian natural gas field in decades; Dhirubhai Ambani dies at age 69; Reliance Petroleum is merged into Reliance Industries.
2004: Reliance discovers a new natural gas field in the Bay of Bengal; the company acquires Germany's Trevira, becoming the world's leading manufacturer of polyester.
2006: Reliance Industries is broken up between the Ambani brothers.
http://en.wikipedia.org/wiki/Reliance#Companies
http://www.answers.com/topic/reliance-industries
The Rhone Valley
I really like the Rhone wines bcos it is quite value for money. Think it is quite a good balance of stength and body to go along with. Some of my fav producers include Marcoux, Domanine de Pegau, Pierre Usseglio and Vieille Julienne.
The Rhone river begins life way to the north of Switzerland. It widens to become the central region of the rhone valley, which spans roughly btw Lyons and Avignon. Divided into north/south at the town of Valence.
The Northern rhone is a land of steep slopes carved into the granite hillsides. Vines cling to near vertical surface. Predominant red wine area but some expensive wines originate here. Southern rhone gives way to a broad valley floor. Enormous quantity of mediocre reds produced but pockets of superb quality exist.
North Rhone - Syrah (called shiraz outside france) and Viognier for whites although it is used sparingly in reds as well. Marsanne and Rousanne are also grown for whites. In the South Rhone, grenache, syrah and Mouvredre and Cinsaut are used for red and Grenanche Blanc, Picpoul, Marsanne and Rousanne are used for the whites.
The famous wine of Hermitage takes it names fom the hill of Hermitage above the town of Tain. Deep, dark and serious, these are strapping, tannic and vigourous in youth as they grow more finese and complex as they age over 20yrs or more. White hermitage is also produced.
Cote Rote can contain up to 20% of white viognier. More often than not, its 100% syrah. More approachable than Hemitage, more aromatic and graceful. Crozes hermitage are more easily available made from less formidable slopes around hermitage. It is a syrah with some quality but lower priced. St Joseph and Cornas are other syrahs with strong personality but on opp bank of the river.
Northern rhone also produced some very rare and expensive white wines from viognier grape such as Condrieu and Chateau Grillet. Clean and highly aromatic and at the same time powerful and full bodied. Just south of Côte Rôtie we find Condrieu, and here the colour changes from red to white. This is a wine made solely from the Viognier grape, a lovely variety, which is also used to add interest to Côte Rôtie. This, in my opinion, is the Rhône's finest white wine. At its best it is heady and intense, but it maintains balance, with fresh acidity and sensible alcohol - this latter characteristic being the point on which all New World Viognier wines disappoint me - they can be intense, but generally have excessive, mouth-searing alcohol. Unlike many wines of the Rhône, Condrieu is best enjoyed young - within a few years of bottling. St Joseph is prob the North's most underrated appellation for red and white. Juicy and best drunk young <10yrs.
Top northern producers include Guigal, Jaboulet, Chapoutier, Chave and Grippat.
For the southern A vast amount of light, easy-drinking wine is made, sometimes using the technique of carbonic maceration found in Beaujolais. The Cotes Du Rhone consists of 17 villages. Rather like the Beaujolais Villages, the best are sometimes labelled with the village name, appearing only in tiny print: Cairanne, Sablet, St-Gervais, Seguret, etc. These should be superior wines, spicy, strong and suitable candidates for 5 to 10 years cellaring. They have lower yields and higher alcohol than the basic appellation. Whites in the south tend also to be blends. Modern techniques mean they are usually fresh and enjoyable.
The name CDP means "The Pope's new castle", a reference to when nearby Avignon became the home of the papal court in the 14th century. No fewer than 13 grape varieties are permitted in CDP, which is easily the leading wine of the Southern Rhone. In theory this means the wine-maker has various options at his or her disposal each vintage depending on how individual grape varieties have performed. In practice, most CDP is made up of the 3 highest quality grapes: Grenache, Mouvredre and Syrah. This is a wine which is invariably high-alcohol, heady and rich.
The wines of Gigondas and Vacqueyras are built in a similar style to CDP and can offer high quality, often substantially cheaper than their famous neighbour.
A good deal of quality fortified sweet wine is made too, the most famous example being the Muscats of Beaumes-de-Venise. These are "Vins Doux Naturels", that is they are fortified wines, made by adding spirit part way through fermentation. This produces a wine that is high in alcohol and sugar, and is dominated by grapey flavours.
The Rhône Valley has been fortunate with a recent run of good vintages in 2000, 1999 (north better), and 1998. 2001 was excellent in the south, whereas floods ruined the 2002 vintage. Other good vintages include, for the north, 1995, 1994, 1991 (Côte Rôtie and Cornas only), 1990, 1989, 1988, 1987, 1986, 1985, 1983, 1982, 1980 and 1978. For the south, 1995, 1994, 1990, 1989, 1988, 1985 and 1978.
Monday, December 08, 2008
"Six Decades of Dom Perignon"
"My only regret in life is that I did not drink more champagne"
John Maynard Keynes (1883-1946) economist.
Champagne - White sparkling wine produced from Champagne in NE France. 2bn bottles produced yearly, 250mm are champagnes. Apparently, there are 58 million bubbles in a opened bottle. First vintage luxury cuvee Dom Perignon was in 1921 and released 1936. Named after 17th century Benedictine monk DOm Pierre Perignon of the Abbey of Hautvilliers near Epernay, a viniculture visionary who had exceptional palate responsible for many ideas that are practised today. He is credited with introducing blending to champagnes and successfully contain the local sparkling wine in reinforced glass bottles by sealing them with spanish corks.
Cuvee Dom Perignon is a vintage, meaning that it is only made in the best yrs and all grapes used were harvested in the same yr. Current cellar master is Dr Richard Geoffrey. Geoffrey selects the best grapes from 25-50 vineyards to create cuvee Dom Perignon. Generally age in contact with lees in the bottle for abt 7yrs. Roughly a blend of pinot and chardonnay, abt 50% depending on vintage. Grand cru vineyards from Cotes Du Blancs for chardonnay and Montagne De Reims for Pinot Noir and a little bit of pinot from the premier cru Hautvillers is also always in the blend perhaps for sentimental or historical reasons. One innovations of Geoff is the Enotheque, a library collection of mature Dom Perignon min 10yrs but oftern 15 or more. Quite overwhelming stuff.
Pierre Gimonnet, Blanc de Blancs, Special Cuvée 1er Cru, 'Gastronome' Brut 2004
- Pale bright yellow. Finish clean and dry. Nice to start off dinner. S$98
2000 Dom Pérignon - Pale gold with white beads. Smoky aromas and toasty.
1990 Dom Pérignon - Elegant, best of the lot. Can taste the fine bubbles.
1985 Dom Pérignon Œnoteque - Floral, velvety and buttery. Better than 76. S$1299
1976 Dom Pérignon Œnoteque - chewy powerful,layered richness. A bit strong. S$1498
1969 Dom Pérignon - Honey nose and coffee. A little bubbly dessert wine?
1952 Dom Pérignon - Deep golden. leather and meat on palate. Chateau Yquiem without sugar.S$1380
1994 Reinhold Haart "Piesporter Goldtröpfchen" Auslese - Kerosene nose. S$252
Ambience at Prive was good. But food, i think is so-so.
The "Six Decades of Dom Perignon" Dinner
7:30pm, Saturday 6th December 2008 at Privé, Marina at Keppel Bay
Pre Dinner Canapes
Pierre Gimonnet, Blanc de Blancs, Special Cuvée 1er Cru, 'Gastronome' Brut 2004
Dinner
Carpaccio of Swordfish with Olive Oil, White Soya Sauce, Sesame Seeds and Chives
Dom Perignon 2000
Composed plate of Foie Gras, Hokkaido Scallop, Cured Salmon with Salmon Roe, Fines de Claires Oysters au naturel, and Morel Mushroom Soup
Dom Perignon 1990 & Dom Perignon 1952
Slipper Lobsters in Muscat de Beaumes de Venise Sauce with Polenta
Dom Perignon Œnoteque 1976
Chaource and Brie de Meaux
Dom Perignon Œnoteque 1985 & Dom Perignon 1969
Grand Marnier Soufflé
1994 Reinhold Haart, Piesporter Goldtröpfchen Auslese
Menu by Wayne Nish - One of few chefs in the world to have had a total of 16 stars bestowed upon him by The New York Times, as well as a Michelin star in 2006, Master Chef Wayne Nish's career spans nearly three decades, a considerable range of cuisines, and the reputation as one of America's most innovative culinary talents.
Drawing inspiration from New York City's historical and cultural diversities, the Japanese-Norwegian-Maltese Nish has made headlines for his iconoclastic approach in the kitchen, transcending global boundaries to create dishes that are truly his own.
Acclaimed for his work at NYC's legendary restaurants, La Colombe d'Or and The Quilted Giraffe, Nish went on to open his own restaurant, March (where he earned his Michelin star) that remained a centerpiece on the New York dining scene for nearly 17years. Nish and his restaurants have also received numerous other culinary accolades aside from the New York Times and the Michelin Guide, including four-star reviews by Forbes, Newsday, a "Best Of New York" Gault Millau Award, a "Restaurant Of The Month" award by Bon Appetit, and "The Golden Dishes" award by GQ Magazine.
Nish has participated as a guest chef and judge on many prestigious culinary programs, and other prominent special events including major fundraisers. He has also appeared as a special guest chef on numerous radio, cable, and TV shows including the original Iron Chef series in Japan, where he was the first American contestant.
Tata and India
India put in $60bn in spending to boost export, RE and infra. Budget deficit projected to be above 8% Mar 2009. Key repo rate slashed by 100bps to 6.5%. Also injected more than $60bn in primary liquidity. Tata Motors and Mahindra and Mahindra were hit badly. Hundreds of textile business went bust and exports dropped 12.1%. Vodafone to appeal against India tax ruling... another potential pitfall in investing in India.
Mr Tata family led conglomerate has a history of 140 years. Just 12 months ago the group and its statesmanlike chairman symbolised the ascendancy of Indian business, making bold acquisitions overseas and increasing its revenues at double-digit percentage rates.
A multinational with revenues in the year ended March of $62.5bn, 350k employees and ops in industries from steel to vehicles, telcos and retailing, the Tata group penetrates almost every area of Indian life. Tata Motors is India’s largest truckmaker, Tata Steel its biggest pte sector steelmaker and Tata Consultancy Services its largest info technology outsourcing company.
Controlled by three family-run trusts, an unlisted parent company, Tata Sons, acts as a provider of strategic direction and capital to the group, whose listed op companies are given leeway to run themselves. The group’s central figure is its 70-year-old chairman, a scion of the Tata business clan. The family hails from Mumbai’s Parsee community, an ethnic minority that traces its origins to Iran and follows the ancient Zoroastrian religion.
Mr Tata launched internationalisation by buying Britain's Tetley Tea in 2000. In 2006, the group followed this with the largest overseas acquisition by an Indian company: the £6.7bn acquisition by Tata Steel of Corus, the Anglo-Dutch steel producer. Previously, no Indian overseas acquisition had been worth more than $1bn. And Tata this year bought Jaguar and Land Rover, the lossmaking Ford marques, for $2.3bn. But perhaps the high point of Mr Tata’s career came in January when he unveiled the prototype of the Tata Nano – the world’s lowest-cost car, with a price tag of around $2,000 – at the Delhi motor show.
As the year wore on, the news started to turn sour. The first setback came when a firebrand politician named Mamata Banerjee began a blockade in September of the site of the Nano plant in West Bengal, the communist-ruled state in India’s east whose capital is Calcutta. Ms Banerjee accused the Tata group of using land forcibly taken from farmers for the plant.
Mr Tata countered that the politician’s supporters were violently obstructing his workers from completing the plant. Disgusted, he eventually shifted the plant to the western state of Gujarat, delaying production by a yr. The episode threatened to take the sheen off the Tata group’s reputation as the acceptable face of Indian capitalism. While Mr Tata accused Ms Banerjee of exploiting the farmers, studies show that the state had used force to appropriate the site of the factory, which stood on fertile rice fields.
But the group’s real troubles began with the worsening of the global liquidity crunch that followed the collapse of Lehman. In Nov, Mr Tata warned of tough times to come for at least 12 months, calling on them “drastically” to reduce costs so as to avoid getting into “irretrievable positions”. Tata steel by far the biggest subsidiary, half of rev, was hit badly. Tata India has the biggest margin compared to the lowest at Corus. Corus still has the technology to provide Tata. Tata Steel is down 81%. Tata Motors, another flagship, has seen auto sales collapsed in the past 2 months. forcing the plants to close 5x to reduce inventories. Struggling to refi loans $3bn loan for jaguar and rover. Hope is to keep on milking Tata cash cow's, Tata consultancy services.
The outsourcing industry has bot in $40bn of rev in 2007. But even that is slowing down. Larger groups include TCS, Infosys technologies and Firstsource.
Saturday, December 06, 2008
Pte Equity- TPG and Apollo
Profit in Adversity - Wall St Debt specialists back in demand. FT ~ 10Aug
When Michael Milken entered prison in 1991 from Drexel Burnham Lambert in LA, HY had revolutionised the mkt, developing a mkt for non-IG new companies and for corporate raiders who dont hv money. He is still banned by the mkt and 2nd career as philanthropist. Ex-colleagues at Drexel are applying lessons in 1980s to navigate the mkt and generate returns from risky debt. Unable to borrow money from the banks to take large companies private, they are looking to buy bombed-out debt at discount prices with the hope that a recovery will generate their customary big profits.
Turmoil has put a premium on credit analysis skills- the ability of companies to pay back their debt under a variety of economic scenarios. Apollo, Leon Black, was the first to recognize the significance of the deal. Apollo and GSO had bot $4.2bn LBO of the Clear Channel Communications from CSFB, DB and RBS. GSO was formed in 2005 by 2 ex-Drexel, Bennett Goodman and Tripp Smitth along with Doug Ostover, who worked in DLJ bot by CSFB in 2000. GSO had bot $13bn of debt with template for selectively buyout deals at bargain prices. They expect pte equity style high returns on the safest, most snr debt. Banks are still holding $500bn of loans and junks bonds ($40bn). Most of the buyout deals had few of the std terms and conditions - borrowers had the right to cease paying int in cash and issue more debt, with the slightest waiver fees. GSO, TPG and Apollo had been really active.
Its largest deal, it bought debt in Alltel at the same hefty discount and will be paid off at 100 cents on the dollar, as the telco company’s owners – GS and TPG – sold it to Verizon two months later. Another big payday came when GSO bought debt of Tribune, a troubled newspaper, at 66 cents on the dollar, watched it rise to 75 cents when Tribune sold Newsday, one of its crown jewels, and quickly sold out.
GSO locked in funding for 12 yrs. We hv learnt that there can be zero liqudiity when you most need it. We saw how quickly a firm can go down. We hv all lived through cycles.
"The last thing you want is to be big and junior in the capital structure," says Mr New. "If you are too early, you lose money." Last month, GSO bought Stolle Machinery, which makes the machines used to produce beverage and food cans. GSO also provided the bulk of the debt for the buy-out of Weather Channel by its parent, Blackstone, acting in a group with Bain Capital and NBC Universal. Also looking to clear out b/s for dresdner and csfb and take adv of the gap left banks to buy companies.
Apollo Management has pursued a similar brand of credit-oriented analysis. Along with Blackstone-owned GSO, it has been the most aggressive in buying up non-distressed debt from distressed sellers at bargain prices, steering clear of sectors such as car parts, automakers and airlines.
In a letter to investors five months ago, Mr Black boasted that only one of his investments, Linens-N-Things, had not worked out according to plan. Since then, however, Apollo’s portfolio of private-equity investments has taken a turn for the worse, with fashion retailer Claire’s Stores, property broker Realogy and Harrah’s Entertainment all ailing.
Thursday, December 04, 2008
Chinese Property ~ Reuters article
This is such a slow death ~ Xover hitting over 1000 and every single hedge fund is setting up gates for their redemption.
Some key extracts from the article
- Month long rally in prop shares could end soon.
- Govt stimulus plan subbed developers.
- Govt plan for social low income housing and to secure ind like cement and steel.
- Chinese prop 10%GDP, recovery in 2001 cos of supply glut,consumer,lending cond.
- CSFB exp drop in further 10~15% in 2009.
- $7bn hot money from property funds in 2007.
- Vacancy in office space to go to 18% from 12%.
- LT trend of urbanisation slowing .. 8m flock to cities but may not do so now.
BEIJING/HONG KONG, Dec 3 (Reuters) - A month-long rally in Chinese property shares could end soon and fresh losses may be in store after a massive government economic stimulus plan snubbed developers who are struggling to survive slumping home sales.
"The winter has really come, and it'll last one or two years," Zhang Baoquan, chairman of Beijing-based developer Antaeus Group, said at a conference in Beijing. "Developers will get no real benefit from the government money," he added. "It's for social (low-income) housing, to secure industries like cement and steel." Rampant real estate speculation, which sucked in billions of dollars in foreign capital last year, led China's stock markets into a bubble in 2007 that burst this year. The Shanghai composite index .SSEC has most more than 60 percent of its value in 2008.
Still, property stocks listed in Shanghai have rallied 32 percent since Beijing unveiled a $585 billion fiscal stimulus package and China's central bank cut rates by an aggressive 108 basis points in the last month. The sector's rise has exceeded the broader market's 7 percent increase in that time.
But recent gains may be a false hope, industry experts and money managers said. A lasting recovery in China's property market, which makes up 10 percent of the economy, could be as far off as 2011 as developers deal with a glut of supply, consumers put off big purchases and tight lending conditions linger.
Credit Suisse strategists expect property prices to fall a further 10 to 15 percent in 2009. "We suggest investors use short-term technical rebounds as exit opportunities to trim their exposures to the sector. Long-term investors should reenter the market only when a more sustainable recovery trend is confirmed, which could come asearly as in the second half of 2009," they said in a research note.
Beijing's stimulus package is focused on infrastructure and building 4 million low-income housing units, projects that are eschewed by big developers because of their low profit margins. Fat-cat developers also garner scant central government sympathy because of big profits they made during a speculative boom.
After a five-year bull run, home sales slumped at the end of 2007, especially in southern cities like Guangzhou and Shenzhen, as government efforts to cool the overheated sector took effect. As a result, unsold housing inventory has piled up to about 20 months' worth of sales, economists say, a bigger oversupply than in the United States, where it is about 11 months.
Nick Yao, a fund manager with Aberdeen Asset Management in Hong Kong, had been trying to find opportunities to tap growth in Chinese property stocks for a long time.
But with many developers struggling with high debts, he decided to take what he called a "conservative" approach by owning Hong Kong-based developers with some commercial Chinese exposure, such as Hang Lung Properties (0101.HK: Quote, Profile, Research, Stock Buzz), Swire Pacific (0019.HK: Quote, Profile, Research, Stock Buzz) and Sun Hung Kai Properties (0016.HK: Quote, Profile, Research, Stock Buzz).
"Hong Kong companies have been through a few cycles of their own so are more conservative and more capable of managing a downturn," Yao said. "And their balance sheets tend to be stronger, with the cash flow they can generate from Hong Kong."
FOREIGN MONEY
Aside from Hong Kong developers, foreign property funds invested about $7 billion in China in 2007, according to KPMG.
Earlier this year, MGPA, a private equity real estate firm partly owned by Australia's Macquarie Group Ltd (MQG.AX: Quote, Profile, Research, Stock Buzz), raised a $3.9 billion fund to invest in Asia, some of which was leveraged and spent on Chinese commercial property.
However, the fund is bit more gun shy on China now and would rather wait until the second half of next year. "Now that property values are falling, it's certainly coming back on our radar, but I think it's too early go in and buy at the moment," said Simon Treacy, the firm's Asia chief executive.
Treacy expected vacancy rates in office buildings to rise to 18 percent in the next year from around 12 percent now. Investors in Chinese developers, and foreign funds run by institutions like ING (ING.AS: Quote, Profile, Research, Stock Buzz), Citigroup (C.N: Quote, Profile, Research, Stock Buzz) and Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz), are betting on a long-term trend of mass urbanisation, which has seen some 8 million Chinese flock to cities each year.
However, a sharp slowdown in export manufacturing, particularly in the Pearl River Delta, will probably slow the migration to big cities. And most rural people cannot afford the downpayments on homes in the city, said Ha Jiming, chief economist at China International Capital Corp (CICC).
"People want to work in the cities for 10 years and then go and build their own house back in their village," Ha said. Of course there are China property bulls out there. Adrian Ngan, executive director of research at CCB International in Hong Kong, has been telling investors to buy mid-cap residential developers like KWG Property Holdings (1813.HK: Quote, Profile, Research, Stock Buzz), CC Land Holdings Ltd (1224.HK: Quote, Profile, Research, Stock Buzz) and Shimao Property Holdings Ltd (0813.HK: Quote, Profile, Research, Stock Buzz).
He said valuations have become attractive, with some stocks trading close to book value, and local governments will likely be more flexible on building regulations to put people to work.
That developers would turn to provincial government connections is perhaps not surprising given Beijing's unspoken message to property tycoons, as it tries to focus on shoring up employment -- fend for yourselves.
Monday, December 01, 2008
Healthy Lifestyle
- Healthy lifestyle
- No smoking
- Dont consume excessive alcohol
- Cut down caffeine
- Avoid preserved food
- Avoid charred food
- Reduce stress level
- Adequate sleep
- Exercise more