Exclusive outtakes from industry leaders
The latest deal for Greece, including a new policy package and possible financing, does not contemplate the restructuring of its debt, but financial markets keep speculating on the possibility it may be the first of the euro-zone countries to reschedule its public debt. Who do you think may follow?
What do gold and wine have in common?
Well, too high of a high price, according to Jeffrey Rubin, director of research at Birinyi Associates, the stock market research and money management firm.
Rubin told the Reuters Investment Outlook Summit on Tuesday that he thought gold prices were “certainly a little frothy” at current levels and that he would rather be a buyer of the gold miners such as Newmont Mining Corp, Barrick Gold Corp, or Freeport-McMoRan Copper and Gold Inc. Gold hit an all-time high above $1,250 an ounce on Tuesday as investors piled in due to fears that European credit contagion could lead to a double-dip recession.
The U.S. economy is experiencing an ongoing but slow recovery, says Barry Ritholtz, director of equity research at Fusion IQ. But that’s not stopping him from enjoying discounted prices in a low-inflation environment, at least when it comes to his personal spending habits. The world is on sale if you’ve got the money to spend, he told the Reuters Investment Outlook summit in New York when asked, for example, if he might spend less while on a vacation or forego a purchase or two.
“I am an enormous counter-cyclical spender. At the top of the bull market I don’t want to buy anything. I am a seller into a bull market. We have been buying a ton of stuff over the past year. We got two new cars long before the May…. so we picked up two new cars. We’re doing work on the house. We’re adding a kitchen. I got my wife a very lovely birthday gift. She got me a very lovely birthday gift. We’ve been buying artwork. We’ve buying jewelry. I love to buy stuff when it is on sale. I hate to buy top dollar for it.
Some of the world’s leading names in the hedge funds and private equity industries are visiting the Reuters bureaus in New York, London and Hong Kong this week to discuss the outlook for the sector in a series of exclusives interviews as part of the 2010 Reuters Hedge Funds and Private Equity Summit.
Private equity is still struggling with the triple problem of raising funds, exiting investments and striking deals — although the last has become a little easier of late. M&A has picked up and there have been a few single-digit billion LBO deals struck in recent months. Still, volatile markets have been making for an uphill struggle to exit investments, and raising money for new funds is uphill. On top of that, executives are facing the possibility of higher tax and tougher scrutiny on their firms.
Restructuring: You shouldn’t be afraid to do it, even more than once if you have to, and even if your own family doesn’t understand it. Just ask John Riccitiello, chief executive of videogame publisher Electronic Arts. Here’s what he said at the Reuters Global Media Summit on Tuesday:
A company that doesn’t restructure in the face of that dramatic transformation, I don’t know what they’re doing. GM had a great decade in the ’70s building large cars… They didn’t restructure in the face of what was obvious. The music industry kept telling us they wanted to buy albums, and then they tried to sue us. It didn’t serve them well. … We look at the future and we are aggressively embracing it… .
Even the rich aren’t as well-off as they were a year ago but that’s not stopping the wealth management industry from focusing on what the future of private banking will look like after the economic downturn has passed. Click below to view my latest story:
An invitation to the Reuters Central European Investment Summit may sound perfectly acceptable to many policy makers and executives but not to Czech central banker Mojmir Hampl. It’s not that he objected to visiting our Vienna office and being interviewed by a crew of editors — Hampl was ready and willing to do that. He just questioned the very idea of lumping together all the different countries in a very diverse region.
“I’m a bit disappointed that the key topic is how the Central and Eastern European region will develop,” Hampl told us, reviving a complaint often heard around the region. It’s a serious issue, one that has bothered many policy makers in central European countries, who grew frustrated at the height of the financial crisis that investors were not differentiating between those with sound fundamentals such as the Czech Republic and Poland and those on decidedly shakier ground.
By Petra Spescha
European economists have been nearly unanimous about what Europe’s recovery from the crisis will look like on a chart: L-shaped — a severe slump with a prolonged period of flat or minimal improvements in the economy.
But at the Reuters Central European Investment Summit Ewald Nowotny created a new shape when he tried to clarify a statement he made to an Austrian newspaper earlier this month about the economic turnaround.
Reuters Central European Investment Summit, September 28-30, 2009
The former Communist countries of central Europe have been the last to be hit by the global economic crisis, but th e hit they took was among the hardest. Only big neighbour Russia’s deep plunge into recession is rivaling the sharp fall from record economic growth that’s in store this year for the economies between the former Soviet Union and Western Europe.
Global risk aversion and deleveraging exposed the weaknesses that the countries had been able to gloss over during the boom years – which in retrospect appeared to have been, in some countries, a colossal binge bankrolled by cheap foreign credit extended by Western European banks that had to come to an end when funding dried up.
It not only trumpeted the idea, but was one of the first big local firms to take out offices in a sleek glass skyscraper by the Moscow River, surrounded by foundation pits and towers of naked steel girders that were to become Moscow’s Canary Wharf.