Fisher Capital Management World News: A Voice of Reason on IPv6 Day

Longtime technology professionals may be excused from exclaiming, “Aw man, now this again!” when it comes to the ongoing debate about IPv6. That’s because it really does look a lot like what many went through throughout the late 1990s in the lead-up to Y2K.
Go back to the months and years before January 1, 2000, and it seemed two equally strong, equally dogmatic and dramatically opposed viewpoints were trumpeted everywhere as loyalists vied for the time, attention and dollars of IT managers.
In one camp, the entire world was going to plunge into darkness at the stroke of midnight because programmers years ago decided to save only two digits in the date field. Technology as we knew it would stop, planes would fall from the sky, and the very infrastructure of our world would fall apart. In short: Everybody panic!
In the other camp, loyalists calmly looked at the situation and said, “Nah, it’s cool.” According to them, nothing would ever come of it: Go about business as usual and don’t bother with it.

The same kind of shouting match is now going on in the IPv4 vs. IPv6 debate. Essentially, the argument is over whether or not the Internet as it’s been designed using IPv4 is running out of IP addresses to assign. Clearly, if so, it’s a bad thing, as the number of network-connected devices is expected to keep expanding wildly for the foreseeable future–unless, of course, they can’t even get on the network because the fundamental underpinning of the technology, the IP address, has run its course.

Fisher Capital Management Warning: BOK issues blanket warning on debt

Bank of Korea Governor Kim Choong-soo, right, holds a meeting with chief executives at the BOK’s headquarters in central Seoul yesterday. [NEWSIS]

Korea’s central bank governor cautioned companies, individuals and the government yesterday on the danger of taking on an unreasonable level of debt.
During a meeting with corporate executives yesterday, Bank of Korea Governor Kim Choong-so said, “corporations, the government and individuals should pay close attention to how much debt they take on.”
The BOK’s 25 basis point rate hike last Friday will increase interest payments for debt holders.
Kim also commented on Korea’s mounting household debt.
“We should keep an eye on those who take out loans that have no ability to pay them back.”
Yet he expressed confidence that Korea’s record household debt – which recently exceeded the 800 trillion won mark – is manageable.
A number of the country’s largest conglomerates were represented at the meeting, including Kim Young-chul, Dongkuk Steel president & CEO; Alfred S. Koh, Samsung SDS CEO; Huh Chang-soo, GS Engineering & Construction chairman; Huh Myung-soo, GS E&C president & CEO; and Yoon Young-doo, Asiana Airlines chief executive.
“The housing market doesn’t look so optimistic,” said GS E&C’s chairman, blaming it on financial authorities’ tight management of project financing loans, causing builders to suffer from unsold apartments.
Regarding the airline industry’s outlook, Asiana Airlines Chief Executive Yoon said: “The industry was sluggish in March and April due to Japan’s massive earthquake, but after hitting bottom in April, the number of visitors to Japan is on the rise. And since oil prices have stabilized, the industry is likely to do fine in the third and fourth quarter when demand peaks.”
Meanwhile, S&P’s downgrade of Greece’s credit rating to the lowest possible level did not negatively affect the local stock market.
The Kospi rose by nearly 30 points on relief over China’s inflation data.
“The local market was buoyed by relief over the index that had been giving fears the most to the market,” said SK Securities analyst Kim Young-jun.
He added that S&P’s credit rating downgrade of Greece did not negatively affect the local market as much since, “Greece had already received non-investment grades by credit rating agencies before the most recent downgrade in its sovereign rating by S&P. So large institutional investors had not been able to invest in Greece anyway.”

Fisher Capital Management World News: Titanic: How can a disastrous ship be celebrated?

More than 1,500 people died when the Titanic sank. So why is the centenary of its launch being proudly celebrated in Northern Ireland, asks Tom de Castella.

No other ship comes close to rivalling the gigantic shadow cast by the Titanic. A hundred years after its completion, it’s still the most iconic vessel to have set sail.
Its tragic maiden voyage has become shorthand for catastrophic hubris – the “unsinkable” ship that hit an iceberg and sank, causing the deaths of 1,503 passengers and crew. And yet in one corner of the UK, the Titanic is a byword not for disaster but a source of pride and nostalgia.
When its hull was launched at Belfast’s Harland and Wolff shipyard on 31 May 1911, it was the largest ship in the world, measuring 886ft (270m) long.
And in Northern Ireland that’s where the story ends, says Mick Fealty, editor of the news site Slugger O’Toole.

Rather than a maritime disaster, the Titanic is an engineering triumph. There’s a common Belfast joke, says the Irish writer Ruth Dudley Edwards, that taps into this feeling: “It was fine when it left us.”

Fisher Capital Management World News: Big fall in UK retail sales raises fears about recovery

UK retail sales volumes tumbled 1.4% during May – the biggest monthly fall since January 2010 – according to official data yesterday which raised further worries over the state of the consumer sector and the momentum of economic recovery.
The decline in sales during May, revealed in seasonally-adjusted figures from the Office for National Statistics, was much steeper than the 0.6% fall forecast by the City.
Food sales tumbled by 3.7% month-on-month – their biggest drop since June 2008. Non-food sales declined by 0.6%, with the household goods, clothing, footwear, and textiles, and department store categories all showing falls in volumes.

Fisher Capital Management Warning: Maine Regulators Warn of Fake Lending Scam

The state’s Consumer Credit Protection Bureau says a fake company is offering fictitious loans to consumers who send money in advance.

State financial regulators are warning about a scam by what officials are decribing as a “fake” lender purported to be located in Wells, Maine.

David Leach of the state Consumer Credit Protection Bureau says “North Lake Equity Group” has offered loans by telephone and over the Internet to consumers in several states, if potential borrowers make several payments to the company in advance.

Leach says the address of the unlicensed company is fictitious and that it corresponds to an undeveloped lot between Wells Highs School and the Wells Town office.

“When we cut the press release we had three folks that had been contacted by the company and at least one that had been victimized,” he says. “And now, actually this morning, I got a call from a Maryland consumer who had lost over $1,900.”

Leach says in the United States, advanced fee consumer loans are illegal.

Fisher Capital management Warning: Investors Take Warning: Storm Clouds Gathering

As parties go, this one’s been raging for quite a while. After dipping below 6,600 just two short years ago, the Dow Jones Industrial Average has now nearly doubled.

If you were fortunate enough to invest in stocks near the market bottom – and if you bought the right stocks – you’ve made a killing. (Take a look at my personal portfolio and you’ll see what I mean.)

But that’s history. If you don’t own stocks, stock mutual funds, or ETFs, is now the time to buy? And if you were lucky (or smart) enough to pull the trigger back in 2009, is it time to sell and protect your profits and/or your principal?

The answer to both questions is no. Back on March 11, in this Ask Stacy column, I said the market wasn’t looking good and that I’d be reluctant to buy in the immediate future. But I also believe that the economy will continue to recover, so there’s no reason to bail either. In short, this is one of those times when the long-term investor adjusts their expectations – but not their portfolio.

Trouble ahead?

When I say adjust your expectations, what I mean is brace for some short-term bruising. Here are a few economic headwinds around these days…

• The end of QE2: The government’s second program to keep interest rates low – known as quantitative easing, or QE – is set to end in June. This program, through which the Federal Reserve has been buying about $75 billion in treasury bonds weekly, is designed to keep interest rates low. When the buying stops, some say rates could rise and stocks could fall. Here’s an article from U.S. News & World Report with more details.
• Job growth is slowing: After last week’s announcement that only 54,000 jobs were created in May, economists are fretting that consumer spending will slow. Since consumer spending makes up 70 percent of the U.S. economy, that’s a potential drag on stocks.
• Political wrangling over the debt ceiling. As I wrote a couple of weeks ago, our nation is now bumping up against its credit limits. Some think refusing to increase the government’s ability to borrowisn’t that big a deal, while others think failing to raise the debt ceiling would be catastrophic. But one thing’s for sure: Stocks won’t respond well if the government is unable to meet all of its obligations when the limit is reached on August 2.
• High gas prices: Money you spend on gas helps the Middle East and big oil companies but doesn’t help the American economy.
• Housing prices: Home prices nationwide are now at their lowest since 2002. According to this AP article, homeowners have now lost more equity than during the Great Depression of the 1930s – back then, it took 19 years for prices to recover. If folks are afraid to buy or can’t sell, that’s another drag on the economy.
• The European debt crisis: It may not seem that Greece’s problems could affect us, but with the increasingly global economy, when Europe sneezes, U.S. markets could catch a cold. Recently, Standard & Poor’s cut Greek government debt to junk status, and stocks worldwide took a hit.
• Emerging market slowdown: While our economy has been sputtering, emerging economies in Asia and elsewhere – most notably, China – have been going gangbusters. But the Chinese government recently raised interest rates and took other measures to keep their economy from overheating – a negative for the many U.S. companies that do business there. According to this recent CNN/Money article, “It goes without saying that a healthy Chinese economy is key to keeping the U.S. and global recovery on track.”

Those are some of the problems that stocks are currently facing, and they’re reason enough to be concerned about the short-term. But as I said earlier, while these concerns are enough to keep me on the sidelines, they’re not enough to chase me out of the stock market. Why haven’t I sold a single share?

The good stuff

• Interest rates are still low: Although the Fed’s QE2 program will end soon, the Fed has signaled they’re not concerned about inflation and will keep interest rates low until they’re sure the economy is growing again. Low interest rates are good for stocks.
• The economy is still growing: While only 54,000 jobs were added during May – a number far below estimates – jobs were still added and the economy is still growing. An economy that’s growing at a snail’s pace isn’t the same as one that’s shrinking. In a speech this week, Federal Reserve Chairman Ben Bernanke said, “The economic recovery appears to be continuing at a moderate pace, albeit at a rate that is both uneven across sectors and frustratingly slow from the perspective of millions of unemployed.”
• Gas prices are coming down: At a national average of $3.76/gallon, prices are already down from a few weeks ago. From this May 7 AP article: “It’s going to be $3.50 per gallon this summer,” oil analyst Andrew Lipow said. “At the very least, you can expect prices to fall 40 cents or so over the next several months.”
• Emerging markets are still growing: As I mentioned above, China is putting the brakes on its economy. But China’s economy is still expected to grow close to 10 percent this year. That’s a huge number.
• The debt crisis will be dealt with: While politicians may take it down to the wire, they’ll probably approve an increase in our nation’s debt ceiling. And while the process of dealing with our massive budget deficit won’t be pretty, it’s a lot better for the country and the stock market than ignoring it.

In a January story called 3 Places to Put Money Now, I suggested putting money into stocks, real estate, and paying off debt. While paying off debt is always a great place to put money, my assumption regarding real estate was almost certainly too optimistic – at this point it looks highly improbable that housing prices will begin any sort of a turnaround this year. As for stocks, while the jury is still out, I’m concerned: I wasn’t expecting this degree of slowdown. But I’m still not throwing in the towel – yet.

Bottom line? Expect tough sailing in the immediate future and keep your eye on the news. If our economic recovery continues to falter, that’s going to be reflected as lower stock prices. Long-term, however, I’m still looking for stocks to do well. So if you’re putting money monthly into stock mutual funds at work or elsewhere, don’t stop. But don’t expect any easy money for the next few months.

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Fisher Capital Management Warning: BOK issues blanket warning on debt

Bank of Korea Governor Kim Choong-soo, right, holds a meeting with chief executives at the BOK’s headquarters in central Seoul yesterday. [NEWSIS]

Korea’s central bank governor cautioned companies, individuals and the government yesterday on the danger of taking on an unreasonable level of debt.
During a meeting with corporate executives yesterday, Bank of Korea Governor Kim Choong-so said, “corporations, the government and individuals should pay close attention to how much debt they take on.”
The BOK’s 25 basis point rate hike last Friday will increase interest payments for debt holders.
Kim also commented on Korea’s mounting household debt.
“We should keep an eye on those who take out loans that have no ability to pay them back.”
Yet he expressed confidence that Korea’s record household debt – which recently exceeded the 800 trillion won mark – is manageable.
A number of the country’s largest conglomerates were represented at the meeting, including Kim Young-chul, Dongkuk Steel president & CEO; Alfred S. Koh, Samsung SDS CEO; Huh Chang-soo, GS Engineering & Construction chairman; Huh Myung-soo, GS E&C president & CEO; and Yoon Young-doo, Asiana Airlines chief executive.
“The housing market doesn’t look so optimistic,” said GS E&C’s chairman, blaming it on financial authorities’ tight management of project financing loans, causing builders to suffer from unsold apartments.
Regarding the airline industry’s outlook, Asiana Airlines Chief Executive Yoon said: “The industry was sluggish in March and April due to Japan’s massive earthquake, but after hitting bottom in April, the number of visitors to Japan is on the rise. And since oil prices have stabilized, the industry is likely to do fine in the third and fourth quarter when demand peaks.”
Meanwhile, S&P’s downgrade of Greece’s credit rating to the lowest possible level did not negatively affect the local stock market.
The Kospi rose by nearly 30 points on relief over China’s inflation data.
“The local market was buoyed by relief over the index that had been giving fears the most to the market,” said SK Securities analyst Kim Young-jun.
He added that S&P’s credit rating downgrade of Greece did not negatively affect the local market as much since, “Greece had already received non-investment grades by credit rating agencies before the most recent downgrade in its sovereign rating by S&P. So large institutional investors had not been able to invest in Greece anyway.”