Europe

Highlights From The Money Game

09/18/2009 by Research Reloaded

As stock markets kept rallying, the consensus has increasingly been forced to accept the fact that the global economy has indeed improved. Still, dollar weakness and gold strength shows that the US government's massive monetary stimulus comes at a cost. Check out recent highlights from The Money Game below.

-Vincent

Chinese Construction Firms Hunt Down Other Government's Stimulus Spending

09/05/2009 by Research Reloaded

After the creation of a massive construction industry in China, it appears this industry is exporting its services worldwide. Tax payer stimulus dollars doled out by other governments, ostensibly in the interest of the local people, are a prime target.

Why European Markets Could Double

07/31/2009 by Research Reloaded

Take the ten-year average profitability and apply it to European companies as a way to normalize earnings. And you get a market discounted below the long term moving average says Peter Oppenheimer of Goldman Sachs. The conclusion? European markets could double if valuations mean-revert.

Assuming, as we do, that ROE mean reverts to long run averages by then, we estimate the broader European market to double (420 on the DJ Stoxx 600).

UK Government Lost £10.9 Billion in RBS and Lloyds

07/14/2009

From the Telegraph: UK Government has lost £10.9bn on stakes in RBS and Lloyds UK Financial Investments (UKFI) said in its annual report that its loss on the two stakes - 70pc of RBS and 43pc of Lloyds Banking Group - had reached £10.9bn at the end of June.
...
Analysts at UBS have speculated that Lloyds could be forced to write off as much as £13bn on mortgage and commercial property lending, and lending to businesses, when it posts its results for the first half of the year on August 5.UKFI is the entity set up to manage the UK Government’s ownership in banks. And there are more losses coming ...

 

Russia Still Likes to Expropriate Assets, Now from ArcelorMittal

07/13/2009 by Research Reloaded

Russia’s Kemerovo region has notified ArcelorMittal that it will seize two of the world’s largest steel maker’s mines if production levels do not increase, the Siberian region’s government said in a statement, Reuters reported. “If your team is not able to stabilize production at these facilities, then we propose that you hand them over without compensation,”

From here. How dare you try to stay profitable in the face of a global downturn. Russia could somewhat afford this kind of behavior when benefitting from a global commodities boom, but can't now. It's a bad time to be further scaring companies out of your country.

How a Big Name Start-Up Fails

07/01/2009
Research Reloaded: 

Interesting analysis from GigaOm on why the video startup Joost, started by Skype founders, has failed. Long story short: They hired too many people too early, made a mistake in having geographically separate management early on, didn't get Big Media onboard, and probably most importantly... took too long to realize that browser-based, not client-download-this-software-based, video was the future. The summary: They were a 1990's tech company in a 2009 world. Their trouble shows just what a challenge starting something new can be. These guys had the money, the big names, and a lot of early momentum. In any case, I'm sure Skype's brilliant founders will be up to something new in the not too far distant future. Anyways that's the end of this post.. back to watching Hulu...

 

Joost, a much-vaunted online video startup, today announced that it will offer a white-label video hosting platform, thus entering a crowded market littered with the carcasses of other failed video hosts. The company is also losing its famous chief executive, Mike Volpi, whom it’s replacing with Matt Zelesko, the current vice president of engineering. And it plans to cut a portion of its workforce — between about 70 of its remaining 90 employees, according to Advertising Age. It also shut down its office in the Netherlands.

The Coming Trans-Atlantic Bandwidth Crunch

06/23/2009
Research Reloaded: 

Trans-Atlantic bandwith bottleneck ahead for 2014. This article interestingly points out that it undersea cables need to be built ahead of demand. They have "lengthy lengthy cable financing and construction cycles". Sounds like a cyclical industry to me, though luckily has a pretty nice tailwind in terms of growing bandwidth consumption globally. Might we have derivatives such as "bandwidth forwards" one day if pricing gets too choppy?

 

During the dot-com boom, so many undersea cable delivering the Internet traversed the bottom of the ocean between the U.S. and Europe that bandwidth prices plummeted and providers of submarine cables filed for bankruptcy. But those cables may soon no longer be enough to satisfy the global demand for bandwidth between the two continents, according to research out today from TeleGeography. The research firm estimates that bandwidth requirements will grow 33 percent between 2008 and 2015, and trans-Atlantic capacity will be exhausted by 2014.

From: 
GigaOM

Consolidation looms as Paris Air Show opens

06/17/2009
Research Reloaded: 

 

Tough times for Aerospace could lead to industry consolidation by larger players such as Boeing (BA) and Airbus.

 

The Paris Air Show got going Monday with the usual fanfare, but the outlook for the aerospace industry isn't bright, as The Deal Pipeline readers are aware.

In a Q&A based on a new report, Philip Toy, managing director and co-leader of global aerospace and defense practice at advisory firm AlixPartners LLC, foresees an extended slump cutting into the profitability of top-tier original equipment manufacturers and potentially crippling smaller suppliers. It's a theme picked up in a Monday Wall Street Journal piece about the difficulties Boeing Co. (NYSE:BA) may face in its defense business.

From: 
Corporate Dealmaker
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