Failure to Hike Debt Limit Means Global Catastrophe?

One week has already passed since the Oct. 1 federal government shutdown forcing massive furloughs of workers and suspension of services not excepted by the Anti-Deficiency Act.

Because Congress did not enact regular appropriations or a continuing resolution for the 2014 fiscal year, appropriations have lapsed, and about 800,000 federal employees were indefinitely furloughed without pay, while another 1.3 million “excepted” employees were required to report to work for some indefinite period without pay until an appropriations bill is passed or their function is no longer excepted.

The U.S. government has shut down 18 times since 1976. The last actual shutdown came in 1996 and lasted three weeks.

Two basic questions that come to mind:

1) What really happened here that got us again at that same impasse of 17 years ago?
2)  What are the implications if the government were to ever default?

READ MORE: http://www.wnd.com/2013/10/failure-to-hike-debt-limit-means-global-catastrophe/

By Ziad K Abdelnour

One week has already passed since the Oct. 1 federal government shutdown forcing massive furloughs of workers and suspension of services not excepted by the Anti-Deficiency Act.

Because Congress did not enact regular appropriations or a continuing resolution for the 2014 fiscal year, appropriations have lapsed, and about 800,000 federal employees were indefinitely furloughed without pay, while another 1.3 million “excepted” employees were required to report to work for some indefinite period without pay until an appropriations bill is passed or their function is no longer excepted.
The U.S. government has shut down 18 times since 1976. The last actual shutdown came in 1996 and lasted three weeks.
Two basic questions that come to mind:

1. What really happened here that got us again at that same impasse of 17 years ago?
2. What are the implications if the government were to ever default?

Read more at http://www.wnd.com/2013/10/failure-to-hike-debt-limit-means-global-catastrophe/#SoIgvrwEeAaeWfKH.99

How to Turn The Economy Around?

People keep asking me what would I do if I had the power to turn the US Economy around given my 25 year experience on Wall Street

Well here’s my 2 cents.... Fasten your seat belts.

I believe the first thing to be done is to abolish the Federal Reserve. It is owned by and operated for the benefit of the biggest banks in the world. Its sole purpose has been to enrich the few at the expense of the many through its insidious use of inflation and debt issuance. It has been around for less than 100 years and has debased the USD by 96%. The U.S. Treasury has the authority to issue the currency of the country. It did so from 1789 until 1913.

The 2nd thing to do would be to reinstitute the Glass-Steagall Act because Wall Street cannot be trusted to manage their risk properly. This would separate true banking activities from the high risk gambling that brought the economic system to its knees. Privatizing the profits and socializing the losses is unacceptable.

Read More: http://www.financialpolicycouncil.org/fpcnew/blogdetails.aspx?id=35/How-to-turn-the-economy-around

4 Major Power Brokers Shaping Our Global Capital & Financial Markets

I believe four major actors—petrodollar investors, Asian central banks, hedge funds, and private equity—are today’s the key power brokers playing an increasingly important role in the world’s financial markets.

Excluding cross-investments between them, oil investors, Asian central banks, hedge funds, and private-equity firms together held $20 trillion in assets at the end of 2012. Their assets have tripled since 2000, making them two-thirds the size of global pension funds.

Together these four players are reshaping global capital markets in a major way. They each represent large new pools of liquidity with longer-term investment horizons than traditional investors that allow them to pursue higher returns—and risks. They have markedly diversified the investor base and expanded private markets for capital. They are spurring financial innovation, enabling the more efficient spreading of risk, and spreading liquidity.

Although the boom years ended in late 2008 as the financial crisis escalated and the global economy slumped, we believe the power brokers fared relatively well though their paths have greatly diverged: petrodollar and Asian sovereign investors are more influential than ever, while the rapid growth of hedge funds and private-equity firms has halted abruptly.

Petrodollar investors—including central banks, sovereign-wealth funds, high-net-worth individuals, and other investors from the major oil-exporting countries—remain today the largest of the four classes of power brokers over the next five years under all of our scenarios. In the base case, we project that the foreign financial assets of these investors will rise to nearly $9 trillion by year end 2013. In the quick fix, with the price of oil staying at nearly $100 a barrel, their assets grow to more than $13 trillion, nearly half as large as the assets of the world’s pension funds for that same year.

The sovereign investors of Asia—its central banks and sovereign-wealth funds—see their foreign wealth grow to $7.5 trillion by year end 2013 in our base case. China, with its foreign financial assets growing to $4 trillion, accounts for more than half of this total, though its current-account surplus declines relative to GDP. In the quick fix, with world GDP and trade recovering more quickly, the foreign assets of Asian sovereign investors grow to $8.5 trillion.

Regarding the hedge fund industry, although it is starting to slowly recover from the bloodbath of 5 years ago, we expect assets to recover slowly to $1.5 trillion by year end 2013. That’s slightly better than the total at the end of 2008 but still well below the peak in 2007. A major constraint on the growth of hedge funds is the size of their investors’ portfolios: the collective wealth of pension funds, insurance companies, endowments, sovereign-wealth funds, high-net-worth individuals, and other such investors fell from $91 trillion in 2007 to an estimated $75 trillion by the end of 2008. In our conservative base-case scenario, battered but resilient, in which the economic recovery doesn’t begin until mid-2015 – bar any extraordinary event that could delay the process - , it takes four to five years for these investors’ assets to regain their 2007 levels. Unless the appetite for investments in hedge funds increases a good deal, this delay will substantially curtail their fund-raising.

As for private-equity buyout funds, their assets under management fall in our base case, to $1 trillion by year end 2013. For starters, the collective wealth of their investors (like those of hedge funds) has declined sharply. Second, this scenario assumes that megadeals—leveraged buyouts worth more than $3 billion a piece, which dominated private equity during the boom—won’t revive anytime soon, because investors have less appetite for them, and banks working through credit losses face funding constraints. Meanwhile, private-equity managers are looking beyond buyouts, to other types of investments, such as distressed debt, infrastructure, real estate, and venture capital. We therefore project that total private-equity assets under management will grow modestly in our base case, to $3.4 trillion by year end 2013.

No one knows how the still prevailing financial and economic turmoil will play out, but our analysis shows that in virtually any scenario, the power brokers will remain a significant force in global capital markets. Oil exporters and Asian and Middle East sovereign investors will continue to be major players, controlling vast pools of wealth. Hedge funds and private-equity buyout funds are down but not out.

The evidence to date gives some reason for optimism that the risks these players pose are manageable. Nevertheless, the concerns being raised by the rise of the new power brokers are real and justify careful monitoring.

We at the Financial Policy Council suggest that the four players would be wise to note public concerns and voluntarily take steps to minimize them.

Share your thoughts

What is the Definition Of An Entrepreneur? Who Are The Real Entrepreneurs?

Are You Really The Entrepreneur You Claim To Be?

It is real funny but it looks like everyone without a job today calls himself an entrepreneur, and--judging by the way the word is thrown around--you might think every one of those self employed people is.

The term is applied to politicians and college presidents, cabdrivers and bookies. People like Donald Trump and Richard Branson are held up as models of entrepreneurship. Meanwhile, newspapers routinely refer to lone wolfs trying to sell something at a profit as entrepreneurs.

Read More: http://www.financialpolicycouncil.org/blogdetails.aspx?id=58/Are-You-Really-The-Entrepreneur-You-Claim-To-Be

Ziad K Abdelnour: My Thoughts Regarding Wealth Redistribution

Much of the rhetoric we're hearing in the media today talks about the huge gap between rich and poor. Politicians on both sides discuss this issue, but neither seems to get to the root of the problem.

It's true that the gap between the richest 10 percent of the country and the remaining 90 percent is growing, but from that point on, most politicians get it wrong.

The issue isn't a matter of “wealth redistribution”, nor is it about protecting current tax rates. The real issue at hand is that most Americans just don't understand the rules of personal finance. They believe what they hear from friends or people selling them products. It comes down to a lack of financial education.

Schools are turning out students who are not fully prepared for the real world. They might know the basics of history, science, math, and English, but there is no real teaching of money in school. I majored in economics and finance and I spent 25 years on Wall Street honing my skills, so I know firsthand how boring the topics can be. But I'm not talking about the heavy theory or detailed rules. I'm talking about simple personal finance -- the money issues that will come up for people in the real world.

It is a sad fact today that when students they break out on their own, they are left unarmed when sellers of credit come calling. To be clear, it's not that people are dumb -- the sly and ingenious credit card companies make handling credit seem easy. But either way, the new consumers don't see or know that taking on debt at a young age is killing their financial security. Saving at a young age is critical. Simple facts about personal finance are not taught and thus bright people are caught making financial mistakes.

Plans to redistribute wealth take money from those who know what they're doing financially and give it to people who don't know basic financial principles. The subprime mortgage crisis was a perfect example of that. Hardworking taxpayers were paying to bail out banks and individuals who made negligent transactions. People who were financially ignorant were allowed to take big loans from equally ignorant (or in some cases, criminal) mortgage brokers. Greed from Wall Street made it worse. Had more people known about simple financial principles, this would not have happened, nor would we be arguing about how to pay for it.

It's not a matter of fiscal theory or taxation. It's all about education. I'm not a fan of big government, but this is one place the government can step in and help. If there were mandatory programs for graduation that included personal finance, our economy could be on the right track in a generation or two.

While no politician is doing much to solve the real issue here, I think that we as entrepreneurs can begin to fix this problem. Have lunch with your staff and teach them about personal finance. If you're not up to teaching the class, bring in an expert. Make sure the expert isn't selling something or else you could be adding to the confusion. Refer them to the Financial Policy Council and start attending our events.

If we start by educating our staffs, we can work to build a financially intelligent country and get back on track at the same time. Plus, isn't this a great benefit to give to the people who make your company work? If you invest in their financial knowledge, I'm sure it will help your bottom line.

I strongly believe any redistribution of wealth by the government, in either the executive, legislative, or judicial branches, has no place in a free, democratic society.

Some of our politicians reach for all the favorite conservative buzzwords. But they fail to cite any evidence to refute the simple, and I think quite obvious, assertion that the marketplace works most efficiently when entry of new businesses is a realistic possibility and predatory pricing is outlawed. That's what the antitrust laws are supposed to accomplish. And business people who compete fairly and squarely need not worry about them for a moment.

You know you are capitalism’s ideal puppet when winning the lottery is your only chance to realizing financial freedom.

Want to change the outcome and start truly learning the process? The Financial Policy Council is the place to be. See for yourself.

Thanks

Ziad K Abdelnour

On the Most Frequently Asked Questions regarding our Oil derivatives Trading Business

As part of Blackhawk’s close group of family and friends; and to set the record straight, we thought we’d share with you the Most “Frequently Asked Questions” when dealing with Oil Trading at large if you’re seriously interested in closing deals in this space.

1. Are there certain laws you have to follow in International Global Trading?

2. What is a soft offer?

3. Isn't the buyer with the money the most important thing in securing an oil deal?

4. Is there a difference in a "RFQ" (Request for Quote) from an End Buyer to a Buyer/Seller as opposed to a "RFQ" from the Buyer/Seller to the Supplier?

5. If I have secured a supplier should I ask for a mandateship?

6. What is really POP?

7. What does NCND or NCNDA mean?

8. Is the NCNDA any protection for an intermediary?

9. What does FPA, IFPA or IMFPA mean?

10. Does the MFPA (Masters Fee Protection Agreement) enforce payment of commission?

11. Please help me understand the real meaning of LOI and ICPO

12. What does BCL mean?

13. What does RWA mean?

14. What does  EXW  stand for and mean?

15. What does FAS mean?

16. What does a DLC  mean in the international trading business?

17. What is the best form of DLC?

18. Should I as intermediary accept a revocable letter of credit from the buyer for payment of goods?

19. You have said in the past that a TDLC (Transferable Documentary Letter of Credit) can only be transferred once.  If that is the case, then if it is transferred to me from the end buyer. How do I get to transfer it to the supplier? Please explain the mechanics of this TDLC.

20. What does Swift  MT 760 mean?

21. What does this mean? Branches of a bank in different countries are considered to be separate banks. Am I to understand that branches of a bank in the same country are considered to be the same bank?...Know more


Thanks,

Ziad K Abdelnour

How disruptive is your Investment Model?

I am Ziad K. Abdelnour and I am often asked what are the key industries that are positioned to be today the most disruptive ones out there and which we at Blackhawk Partners would be very keen on taking a real close look at.

So I thought of sharing some of them with you in the hope of catching your attention and sharing feedback.

1. Natural Gas:

I believe Natural gas is still in the very early stages of general adoption, and that there is a huge potential in the making in here ... at least to become a more self sufficient energy focused nation. Though natural gas engines currently comprise 3 percent of truck engines, I predict that penetration will rise to 10 or 15 percent by 2020--allowing investors to capitalize on "niche truck and bus applications."

2. Software Defined Networking (SDN):

Cloud computing has clearly wreaked havoc on the traditional PC-centric hardware and software model. I think this is just the beginning as I believe the cloud model is likely to disrupt digital networking in a major way. The size of the market: $51 billion. Offsetting the likely declines and commoditization of the hardware, I expect to see the emergence of a new networking software segment, though it is too early to size it given we’re still in the stage of nascent start-up activity.

3. 3D Printing:

What makes 3D printing so special--besides the fact that it allows users to print anything from machine parts to gun parts--is the medium's customizable nature. 3D printing currently makes up a $2.2 billion market--with forecasts for a compound annual growth rate of 23 percent. But there's something else to consider: The 3D printing industry operates within the design-to-manufacture value chain, which by some estimates is a $30 billion opportunity.

4. Big Data:

Social networks, blogs, email platforms and web browsers are all generating humongous quantities of data, and it needs to be stored somewhere. That's great news for the companies that currently make up Big Data's $11 billion market. And there's even better news for entrepreneurs still hoping to break in. The industry has a projected compound annual growth of 32 percent over the next five years. Without a doubt plenty of opportunities to capitalize on in the space.

5. Cancer Immunotherapy:

Immunotherapy drugs work differently than those used in chemotherapy or targeted therapy by stimulating the body's immune system to enhance or restore a natural attack on cancer cells. In addition to the obvious medical benefits, I believe the new drugs to tap into a multi-billion dollar market.

These are by no means investment recommendations but some general thoughts as to where I believe the most disruptive industries lie ahead of us.

 Share your thoughts

Thank you very much.

                                                                                         -by
                                                                               
                                                                                Ziad K Abdelnour