Wednesday, March 4, 2009
The above diagram shows the consolidation down from the big banks on the left to a much smaller number on the right.
As you have heard me say it before Australia had a lot more banks than it has now and guess what the US is going the same way. Aivars
Now before you tell me that man is responsible for warming, see the book Guns Germs and Steel for a narrative on how people like the aborigines walked to continents like Australia and then became stranded from the rest of civilization when the sea level was 500 feet lower. They have discovered standing trees in Lake Ontario at a depth of 120 feet that are radio carbon dated as 12,000 years old.
Anyway the brilliance of some people to create a market where there was none and nothing is produced is nothing short of brilliance enjoy Aivars
Staff - Richard L. Sandor, Ph.D., Dr. Sc.h.c.
During 1997 and 1998 Dr. Sandor served as Second Vice Chairman - Strategy for the Chicago Board of Trade. His responsibilities included both electronic trading and new products. Richard Sandor is currently a director of ICE Futures, and American Electric Power. He is also a member of the design committee of the Dow Jones Sustainability Index. Prior to the creation of theChicago Climate Exchange, Dr. Sandor held senior executive positions in the financial services industry. He was a senior financial markets executive with Kidder Peabody, Banque Indosuez and Drexel Burham Lambert.
Dr. Sandor has been a faculty member of the School of Business Administration at the University of California, Berkeley, and held a faculty position at Stanford University. He was a visiting professor of Finance at Northwestern University, and was named the first Martin C. Remer Visiting Distinguished Professor of Finance in the Graduate School of Management. He was recently Distinguished Adjunct Professor at Columbia University Graduate School of Business where he taught a course on Environmental Finance.
Dr. Sandor has served on numerous committees and boards including the Chicago Board of Trade, the Chicago Mercantile Exchange, the London Financial Futures Exchange, the Banking Research Center of Northwestern University, the Columbia University Futures Center and the Board of Visitors of the International Program Center at the University of Oklahoma. He assisted the New York Mercantile Exchange on the design of the options contract for crude oil. He was also a member of the International Advisory Board of the Marché à Terme International de France (MATIF), the Financial Products Advisory Committee of the Commodity Futures Trading Commission. Dr. Sandor was an expert advisor to the United Nations Conference on Trade and Development (UNCTAD) on tradable entitlements for the reduction of greenhouse gas emissions. He was also a participant in the working group for the Regional Clean Air Incentives Market for the South Coast Air Quality Management District, Los Angeles.
From 1991 to 1994, Dr. Sandor was a Non-Resident Director of the Chicago Board of Trade (CBOT) and was Chairman of its Clean Air Committee. That committee developed the first spot and futures markets for sulfur dioxide emission allowances and supervised the annual allowance auctions conducted on behalf of the U.S. Environmental Protection Agency. He also served as Vice Chairman of the CBOT Insurance Committee and was the originator and co-author of the catastrophe and crop insurance futures and options contracts.
Dr. Sandor received his Bachelor of Arts degree from the City University of New York, Brooklyn College, and earned his Ph.D. in Economics from the University of Minnesota in 1967.
Dr. Sandor has been involved in numerous civic and charitable activities. He is a member of the Board of Governors of The School of the Art Institute of Chicago and is a Major Benefactor of the Art Institute of Chicago. He is also currently a member of the Board of Trustees of the International Center of Photography, New York.
Publications and Presentations
Richard L. Sandor, Michael J. Walsh and Rafael L. Marques, "Greenhouse-Gas-Trading Markets", The Royal Society, June 2002.
Richard L. Sandor and Michael J. Walsh, "Kyoto or Not: Opportunities in Carbon Trading Are Here." Environmental Quality Management. Spring 2001
Richard L. Sandor and Michael J. Walsh, "Some Observations on the Evolution of the International Greenhouse Gas Emissions Trading Market", in Emissions Trading: Environmental Policy's New Instruments, Richard F. Kosobud, editor. John Wiley & Sons. January 2000.
Richard L. Sandor, "Introduction", Insurance and Weather Derivatives - From Exotic Options to Exotic Underlyings. Helyette Geman, ed. Risk Books. September 1999.
Monday, March 2, 2009
In Australia in the early 90's it took 2 years after the financial crash. Companies like Coles Myer the 6th largest retailer in the world went from hoarding cash to paying a stable dividend. Looks like those questions are being asked now. From Barrons, Aivars.
Apple: What Should It Do With The Cash?
In my print column in Barron’s over the weekend, I took a look at the great gobs of cash piling up on the balance sheets of large technology companies. Among other things, I asked readers to suggest what Apple (AAPL) might do with its $28 billion cash pile. So far, at least, the company has shunned the obvious alternatives: it isn’t buying back large blocks of stock, it isn’t paying out in the form of dividends, and it isn’t in the habit of making large acquisitions. They just pile it up. But with short-term returns under 1%, you would think that at some point Apple might want to do something with the ever-increasing pile
The column ended this way:
The most fascinating situation involves Apple, which pays no dividend, doesn’t aggressively buy back stock, and rarely makes acquisitions. Every quarter, its money pile climbs higher. Maybe they’d like a nice bank? (Bank of iMerica?) Or how about a car company? Plug-in hybrid, four-wheel drive iPhones? Who wouldn’t want one of those?
Have an idea for Apple’s cash? E-mail me.
Anyway, quite a few people took me up on the offer; I’ve excerpted some of the responses below. There are plenty of ideas: Develop new products! Make acquisitions! Keep the pile stacking higher! Or pay it out!
If you have a better idea , please share your thoughts in the comment section below, or e-mail me at firstname.lastname@example.org.
- “AAPL should announce that starting in Fiscal 2009 all net profits will be paid out to shareholders in the form of an annual cash dividend. In 2009 this should be approximately $5.50/share (free cash flow is actually noticeably higher due to conservative revenue recognition on iPhones). At the current stock price ($90) this would equate to a 6% yield. I believe it is quite reasonable to assume that the stock price will rise sharply in response to this shareholder friendly action. If the stock moved up so that the yield moved down toward 4%, a $125 stock price could be expected. This is a no-brainer method to create shareholder value. All the cash-rich tech giants should be following this strategy. Otherwise, balance sheets will continue to grow, and with short-term interest rates unlikely to rise anytime soon, hoarding mountains of cash is just plain poor financial management.” - Carl Goldsmith, Chief Investment Officer, Delta Asset Management
- “Use it to create an army of Steve Jobs clones.” - Doug Pike
- “With its history of fiscal responsibility, why not let Apple use its $28 billion cash to help bail out the U.S. Treasury. Oh, wait, that wouldn’t be fiscally responsible, would it? - Bill Schweitzer
- “Apple should buy Sprint (S). 50 million subs for about 500 a piece.” - Ken Krogulski
- “Wouldn’t Sandisk (SNDK) be a good acquisition for Apple? Many synergies, including their flash memory for iPods and iPhones, and SSDs for their notebooks. Not to mention their little share of the MP3 market.” - Richard Ferrentino
- “I think a perfect acquisition for Apple would be Electronic Arts (ERTS).” - Nick
- “Apple will need a new growth engine after the iPhone growth slows down. They’re in the computer, phone and MP3 business, so why not jump into the video game market next? An acquisition of major video game publishers and developers, such as Take-Two Interactive (TTWO), Electronic Arts and another one or two major names could be had for less than $15-$17 billion in total. Apple would own the best IP in the video game industry and instantaneously be able to build its own new console with the best IP in the industry. And think of the synergies for its developers to create games in the iPhone and future iPhones that compete with Nintendo’s DS and Sony’s PSP.” - James Mansour, George Washington Law, class of 2010
- “I’m surprised someone like Apple (or even Dell) hasn’t snapped up Isilon (ISLN). They sell a clustered storage hardware/software solution that has been popular in large data set environments (media, oil & gas, scientific). To Apple more specifically, it would enhance (create) a storage offering that plays well in the media/entertainment space - where their systems are popular.” - Tom Tierney
- [Buy] TiVo (TIVO). Best interface. High-end users willing to pay high margins. Good client list that will enable them to cross sell other Apple products to work with the TIVO interface. Sort of a trojan horse.” - domini66
- “You nailed it, the iBank. The perfect ‘utility bank’ would put these old banking dinosaurs out of their misery. Your iPhone or other Apple device would act as your debit/credit and or cash machine card. You direct deposit paychecks to iBank or set up EFT from brokerage accounts to your iBank account. Get better rates on balances (like ING). We’d probably love to get nickel-and-dimed by the iBank for service rather than pay $20 or more a month for the privilege of maintaining a non-interest bearing checking account or $2 per transaction to access our own cash. I’ve done almost anything to avoid setting foot in a bank over the last 20 years. iBank should be able to do for banking what iTunes did for music. - John M. Coughlin, Jr.
- “My wife and I started a small company, and three years in we are making it. One reason: Apple. Now, people ask us how we run an international consultancy, providing executive coaching and workplace performance seminars to of all clients investment banks, using Apple computers…We found a way. My advice to Apple: seek out every small business with tech needs and answer their questions. Up the one-to-one and ProCare Programs, get applications that make running small businesses better, and be there when I refer a colleague to the products.” - Jason W. Womack, The Womack Company
- “They desperately need to develop quickly a new Netbook. They have the resources to do this based on their great notebook models. The netbooks out there right now are all crappy or lacking in some features. Sony, Asus and Acer are all just so-so, and have lousy keyboards to start with. Some don’t have CD drives. Apple, last but not least, sees all this and can come up with one that has all the ingredients that people need… An apple netbook would sell in the millions for sure.” - Vic Strano
- “It may be a natural fit for AAPL to look at the home theater matket.” - Glenn F
- “One thing Apple has is patience; they’ve rarely rushed a product to market. Similarly, they may recognize that as the economy weakens, time is on their side. What they could buy [for] $10 today, may well be down to $7 next November. Patience!” - Charles D. Hoffman
- “If I were AAPL I would hog the cash in t-bills.” - Robert Howarth