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Showing posts from February 9, 2015

McKinsey & Company : A cheat sheet on lower oil prices

Commentary




Oil prices have plunged, helping consumers but worrying energy-reliant countries and companies. Here’s a cheat sheet on what’s happening and its implications.




February 2015 | by Scott Nyquist






A little background: over the past seven-plus months, the price of a barrel of oil dropped from $107 to less than $50. This took prices to 2009 levels and surprised just about everyone. Stock markets do not like surprises, and many global indexes have dropped, adding another wrinkle of worry to an already wobbly global economic recovery. Let’s consider some of the implications.





The good news


For US consumers, the drop in oil prices is excellent. A two-car family that drives 2,000 miles a month might have to buy 100 gallons of gas. With the average price per gallon now $1.25 less than it was at its 2014 peak, that adds up, essentially, to a $125-a-month raise. For American households, spending on gas is on track to be the lowest since 2003.






European and Japanese consumers, who drive much less…

The Eurozone: Collateral Damage

By John Mauldin | Feb 09, 2015 Greece in a Nutshell
A Game of Chicken, European-Style
European Deflation
The 2015 Strategic Investment Conference
The Cayman Islands, Dallas, Florida, Switzerland, and New York


Collateral damage. Unintended consequences. Friendly fire. Certainly no one intended to have a global banking meltdown when they let Lehman Bros. go under.

Now we’re watching another Greek drama that could have significant unintended consequences – far beyond anything the market has priced in today. Then again, maybe not. Maybe the market is right this time. When we enter unknown territory, who knows what we will find? Fertile valleys and treasure, or deserts and devastation? Today we look at the situation in Europe and ponder what we don’t know. Greece provides a wonderful learning opportunity.

At the end of this letter I’ll mention our Strategic Investment Conference, which will be in San Diego, April 30–May 2. This week we have confirmations from George Friedman of Stratfor and Bi…

CULTURE OF CORRUPTION AT DOLE COMES UNDER SPOTLIGHT

by Ellen Rosen

9:01 PM PST
February 8, 2015







(Bloomberg) -- While the Delaware courts are known for deferring to the decisions made by boards of directors, deference apparently has its limits.



Delaware Chancery Judge Travis Laster last week refused to dismiss a case challenging the 2013 privatization of Dole Food Inc. by Chief Executive Officer David Murdock. Murdock, members of the board of directors and Deutsche Bank AG, which helped structure the deal, sought to have the case thrown out rather than face a trial now set for Feb. 23.




Laster seems to believe that the Dole deal requires greater scrutiny. In his Feb. 5 ruling he said that investors raised legitimate questions about how the deal was negotiated by Murdock and whether officials of Deutsche Bank AG helped him structure the transaction to the detriment of shareholders.



Investors have uncovered evidence raising doubts about whether Dole directors “were sufficiently independent from Murdock to bargain with him at arm’s length,” the j…