El País Interview Mario Draghi, President of the ECB

A modest recovery in Europe 

“The recovery – albeit modest – is robust. We are growing and inflation is improving. Europe’s GDP has returned to its pre-crisis level, although this has taken seven and a half years…The main drivers behind this recovery have been low oil prices and our monetary policy. This recovery is stronger than past ones because it is based on the increase in consumption and domestic demand, and not only on exports.”

Politics has been and will continue to be a major influencer

“Indeed, political uncertainty is dominant. This year we have suffered a multitude of uncertainties: first there was the slowdown in China and the stagnation of world trade, then the Brexit referendum and the election in the United States. The key question is how much this political uncertainty is going to affect the economic recovery…In the medium term it is not yet clear what the consequences of past, current and future political uncertainty will be. There will be consequences, that much is certain.”

On Brexit

“The longer the negotiations take, the longer the uncertainty. It will be more difficult for investors and other economic agents in the UK to make decisions. Now, the impact of course is going to be stronger on the UK than it is on the EU and on the euro area, but certainly the UK is a large economy, so it will have an effect here too.”

There are no bubbles in the Euro area

“We are monitoring financial stability risks, but we see no bubbles in the euro area. There are house price increases in Milan, Barcelona and some German cities, but they are selective and limited to specific areas. In order to speak of bubbles there must be a hike in prices and strong increases in lending. We are not seeing that dynamic. Lending is growing, but at rates of 3%, not at the 15% we saw before the crisis.”

Having weighed the pros and cons of low interest rates, low rates are essential for recovery

“We are aware that low interest rates affect the interest rate margins of some banks, but they also have positive effects on bank profitability by supporting the recovery, reducing loan losses and increasing the valuation of assets. We also cannot deny that some people, like pensioners without debt who rent their homes, may be hurt by low interest rates. The only honest answer that we can give them is that the low interest rates are essential for a full recovery, and when this is achieved interest rates will rise.”

Full transcript at:


Trump Cabinet Picks CNBC Interview Notes 11.30.16

Steve Mnuchin

Tax cuts are #1 priority

” This will be the largest tax change since Reagan. We’ve talked about this during the campaign. Wilbur and I have worked very closely together on the campaign. We’re going to cut corporate taxes, which will bring huge amounts of jobs back to the United States…We’re going to get to 15 percent and bring a lot of cash back into the U.S.”

Middle income tax cut promised

“we think by cutting corporate taxes we’ll create huge economic growth. And we’ll have huge personal income. So, the revenues will be offset on the other side. We’ll have a big middle income tax cut. That’s another big part of this in simplifying taxes. Taxes are way too complicated and people spend way too much time worrying about ways to get them lower.”

Offsetting tax cuts with reductions in deductions

“Any reductions we have in upper income taxes will be offset by less deductions. … There will be no absolute tax cut for the upper class. There will be a big tax cut for the middle class, but any tax cuts we have for the upper class will be offset by less deductions that pay for it.”

Open communication with business leaders

” First thing I would say is it starts with an attitude. Of this administration, this president, this vice president-elect is going to have open communications with business leaders. You can see this started because the president-elect called up the CEO of United Technologies and said it’s important to keep jobs here. And Wilbur and I will continue that. And again as he said, this is a great first win without us even having to take the job.”

Want to encourage banks to lend

” So, as we look at Dodd-Frank, the number one problem with Dodd-Frank is it’s way too complicated and cuts back lending. So we want to strip back parts of Dodd-Frank that prevent banks from lending. And that will be the number one priority on the regulatory side.”

We’re going to look at what to do with the Volcker rule

“the number one problem with the Volcker Rule is it’s too complicated and people don’t know how to interpret it. So we’re going to look at what to do with it, as we are with all of Dodd-Frank. The number one priority is going to be make sure that banks lend.”

Interest rates are going to stay low for the next couple of years

“I think interest rates are going to stay relatively low for the next couple of years. We’re in a period time of low interest rates. I think we’ll stay there. And interest rates have come up a little bit, which I think makes sense. I think we’re going to be looking at the Treasury all different types of opportunities. We will look at potentially extending the maturity of the debt because eventually we are going to have higher interest rates, and that is something this country is going to need to deal with.”

Thoughts on Yellen:

“You know, look. I think she’s done a good job at the Fed…I’m not going to comment on whether she should or she shouldn’t [serve out her term]…But I will say we do have two [Fed] governor spots to fill, and that will be high on the priority list.”

Wilbur Ross

Mexico not just about lower costs, also have better trade deals

“Believe it or not, Mexico has better treaties with the rest of the world than the United States does. We’re going to fix that…On a typical car, they save twice as much on tariffs going into Europe out of Mexico as they do going into Mexico to save labor.”

Tariffs are the last thing

“Everybody talks about tariffs as the first thing. Tariffs are the last thing. Tariffs are part of the negotiation. The real trick is going to be increase American exports. Get rid of some of the tariff and non-tariff barriers to American exports.”

It’s just not true that corporate tax cuts will only go to dividends

” That’s just not true. And it’s also not true that all jobs are created equal. A guy who used to work in a steel mill now flipping hamburgers, he knows it’s not the same. So it’s the quality of jobs as well as the quantity, and one of the problems with the recovery is when the newly created jobs are not nearly as remunerative as were the jobs that were lost. That’s a very big structural problem.”

Diana Shipping 3Q16 Earnings Call Notes

Diana Shipping’s (DSX) CEO Simeon Palios on Q3 2016 Results

Anastasios Margaronis

If Trump’s criticism leads to action then the effects would be profound

“Macroeconomic developments now, the recent election in the United States has seen Donald Trump elected to the Presidency of the largest economy in the world. Some of the policies he has been advocating prior to his election are implemented. There are fears that the new era of protectionism will see global trade as a share of world GDP fall. Several trade agreements that have so far been criticized by the President elect. If his criticism will lead to actions then the effects on world trade would be profound.”

Outlook remains difficult, but recovery more likely than it was a few quarters ago

“All in all the outlook for the Panamax market remains difficult. Fleet capacity is projected to grow by around 1% in 2016 and 2017. However this slow rate of growth does not yet appear to be enough to help support a significant improvement in the market environment. Significantly more scrapping is required going forward to help bring equilibrium to the market sooner rather than later. All we can say with a reasonable degree of confidence with the dry bulk carrier market is that if the supply continues along the path it has been following for the last 18 months or so and further down the road demand growth picks up from present level the market is bound to eventually reach equilibrium. The prospect of such an important development has become much more likely now that it was a few quarters — than it was a few quarters ago but only few ships were being demolished and owners were still ordering new buildings in large numbers.”

$8000 per day rates give us the opportunity to go beyond 2018 without a problem

“any rate in the vicinity of an average of $8,000 it gives us the opportunity to end up well after the beginning of 2018 without having a cash problem. Let alone the fact that today as we speak you can fix a Capesize vessel at $11,200 for a year on a time charter basis with an 8 lakh charter and a Panamax at $8,000.”

Not modelling any further acquisitions

“The model that we used earlier describing our ability to sustain in that environment for till the middle of 2018 did not include any further acquisitions. However, depending on the charter these has assumptions above the charter rates that we estimate to receive in 2017 which possibly is having a low side but if the market showed signs of improvement we may consider investing $20 million let’s say for one or two vessels. Don’t forget that this acquisition is not burning any cash because if you buy a vessel full equity for example today, you don’t burn any cash with the existing time charter rates. But the cash flow position described earlier does not include any further acquisitions.”

We have a main shareholder who is going to participate in any equity offering

“The termination of discussions, it is because we are considering one year and a half as time that maybe sufficient not to need to raise equity for the company. And as regards the reason why we are resisting in issuing equity today is because it is not necessary and because we do not want to dilute the existing shareholders but certainly another thing that it should be clear to everyone is that — the main shareholder is going to participate in any equity offering if it happens after a year from today or a year and a half. And he is not — we are not resisting in diluting the shareholders and Mr. Palios. We are resisting in diluting the shareholders because even if it was to be an equity offering today Mr. Palios was going to participate.”

Ioannis G. Zafirakis

Explanation for stopping talks with lenders

Hi, this is Ioannis speaking. Let me start by saying that we initiated the coal story proactively and we took the decision to stop the discussions. The reason why the discussion were stopped it was because we were not getting anywhere although we had a good reference point. At the end of the day we couldn’t arrive into a meaningful result for everyone. So the same way we initiated as I said, the same way we stopped the discussions.

Don’t have a cash flow problem until the second quarter of 2018

“we have the power to sustain even worse charter rate scenario to date easily till we first — up to second quarter of 2018 before we have a cash flow problem. In the scenario where you run the numbers with existing charter rates then you go even after third quarter of 2018. So why should we be talking about an equity offering or some analyst talk about an equity offering.”

Trump Transition Team Call 11.29 Notes

Washington Post: “President-elect Trump’s transition team is holding daily media calls to update the press on how the transition is progressing. We will be posting the transcripts from these calls after they happen. ”

Jason Miller, the transition team’s communications director

Tom Price is point person on repealing and replacing Obamacare

“the president-elect nominated chairman of the House Budget Committee, Congressman Tom Price, from Georgia’s 6th Congressional District as secretary of Health and Human Services. Dr. Price is a renowned physician who’s earned a reputation for being a tireless problem solver and really Congress’ point person on repealing and replacing Obamacare.”

Some of the legislative points of interest on Obamacare replacement

“the President-elect has laid out a number of markers, as we talk about expanding HSAs, allowing folks to be able to buy insurance across state lines, administering Medicaid at the state levels. There are number of markers that the President-elect has laid out. Obviously we’ll be expanding on that. But it’s important to point out that Dr. Price and Ms. Verma will really be our point people who will be leading the charge on this front. We’re working hand and hand with our congressional leaders and with the Vice-President-elect has been very passionate on this issue to actually come up with a plan that we go forward with.”

Sean Spicer, the Republican National Committee’s communications director

68 meetings with potential cabinet members

“The president and the vice president-elect now had 68 total meetings with people to potentially join the administration or share their ideas. And the vice president and the president-elect have received congratulation calls or spoken with over 41 world leaders.”

Tiffany 3Q16 Earnings Call Notes

Tiffany (TIF) Q3 2016 Results

Mark Aaron – Vice President, Investor Relations

Sales in the US pressured by macro

“Sales in the U.S. were again pressured by lower spending attributable to local customers, which we believe was tied to macro, market and political uncertainties. Interestingly, spending by customers that we identify as foreign tourist actually rose in the quarter in contrast to a decline in the first half, as continued lower spending attributed to Chinese tourists was more than offset by increased spending attributed to visitors from Japan and elsewhere.”

Effect of Trump on 5th Ave store

“There certainly has been a lot of attention focused on the potential effect of activities related to the recent U.S. Presidential Election on stores along the relevant part of Fifth Avenue. What we’ve seen has been some adverse effect on traffic in our Flagship store, as well as the continuation of sales softness relative to last year and to our other U.S. stores this year. Because of obvious uncertainty, we will maintain a cautious outlook in the near-term and we cannot provide any assurance that sales in these both in the fourth quarter and beyond will not be negatively affected.”

Soft demand across Europe

“Demand across Continental Europe remained soft, although, varying degrees and has been especially soft in Paris since the tragic events of last year. Economic conditions also likely contributed to weak spending by domestic customers in many countries.”

Fashion jewelry strongest, statement jewelry weakest

“The best performing jewelry category was fashion jewelry, which posted a modest increase over last year. This was driven by an increase in gold jewelry sales tied to the strength of the T collection, which we have continued to build upon with new designs… At the other extreme was continued softness across the statement, fine and solitaire jewelry category, led by decline in high-end statement sales, which in contrast had posted strong growth last year, performing roughly in line with the prior year on a worldwide basis was the engagement jewelry and wedding bands category, with results varying by region.”

Hewlett Packard Enterprise FY 4Q16 Earnings Call Notes

Hewlett Packard Enterprise’s (HPE) CEO Meg Whitman on Q4 2016

Uneven demand is a new normal

“Sure. So, listen, I would characterize this quarter as uneven global demand. But I have to say, I’ve been characterizing the last three or four years the uneven global demand. This feels like the new normal to me. There will be spots that do better, spots that are not as good as last quarter. And my view is, our performance is entirely in our own hands, yes, we’re influenced by the global demand.”

Tim Stonesifer

Keeping an eye on currencies

“Yes, sure. So, as far as Q4, we did see a little bit of that pressure, but not significant. But to your point, as you look, I mean, the currency environment has definitely been volatile in the last few weeks. And to your point, when you look at sort of where the rates are to-date versus where we guided, call it, mid-October, some of the rates are unfavorable. For example, if you look at the euro, the euro was at 110, and now it’s probably at 106, 107 something like that. So, given our global footprint that does put some pressure on the operations now. Having said that, it’s very early in the year and we do have some hedging programs in place. So we didn’t feel it was prudent at this stage to adjust our guide. And then in addition to that, the teams are being very proactive and very aggressive around the cost structure. There are also to your point in EMEA, we’re looking at opportunities to improve pricing to offset some of that pressure. So, I would just say this to wrap it up is, we’re keeping a close eye on the currencies. And at the same time we’re also implementing operational actions to help mitigate any pressure.

Thyssen Krupp 4Q16 Earnings Call Notes

thyssenkrupp’s (TYEKF) CEO Heinrich Hiesinger on Q4 2016 Results

Cyclic improvement in Steel Europe, but not an improvement in structural weakness of industry

“We have also initiated a comprehensive transformation program at Steel Europe. We do see clear cyclic silver lining but to be clear, you should not confuse cyclic improvement with structural weaknesses of an industry. The pressure from imports from raw materials, especially in coking coal, from excess capacities and from current and especially threatening cost decrease related to the European trading scheme, remains high. Despite the strong position versus most peers and great efforts and achievement from leadership team and our employees, Steel Europe has earned its cost of capital in the last fiscal year.”

Guido Kerkhoff

There’s clearly overcapacity worldwide in

Yes. With that let me come to your question regarding steel. I mean, once again, what we’ve seen underlying in this industry is an overcapacity here in Europe and worldwide, and that was forming our belief that a consolidation move overall can help to overcome this issue. Now, steel market is always cyclical. So, you might have always couple of months that look better and a couple of months that look worse, as we have largely experienced last year where the first half was very bad. That doesn’t mean that overall the necessity of consolidation as we’ve lined out is clearly out there and we still see it, and that’s why we continue to go down that route.

Deere 4Q16 Earnings Call Notes

Deere & Company’s (DE) Q4 2016 Results

Josh Jepsen

Farm cash receipts should be about the same in 2017 as 2016

“Given the large crop harvests in 2015 and consequently to lower commodity prices we are seeing today, our 2016 forecast calls for cash receipts to be down about 6% from 2015 levels. Moving to 2017, we expect total cash receipts to be approximately $367 billion, about the same as in 2016 as lower livestock cash receipts are offset by higher crop receipts.”

Anticipate lower industry sales in China

“In China, slower economic growth persists and ag policy changes are causing short-term uncertainty for most domestic and global markets. As a result, we anticipate lowered industry sales. Turning to India, the government continues to focus on reviving growth in the ag sector and improving farm incomes.”

Market demand for construction equipment continues to be weak

“Moving to Slide 16 and looking at the economic indicators on the bottom part of the slide. GDP growth is positive. Construction spending is increasing and housing starts are expected to exceed 1 million units again this year. In spite of these positive signals, the market demand for construction equipment continues to be weak. Factors contributing to the weakness have not changed dramatically over the past quarter. Conditions in the oil and gas sector, for example, continued to be slow. Also, construction contractors are delaying fleet replenishment because of the uncertain markets. Rental utilization rate declines persist, leading to a reduction in fleets and elevated levels of used inventory. Housing starts in the U.S. for single-family homes remain below the long-term average and multifamily home construction is slowing due to overbuilding in some parts of the country. On balance, Deere’s construction and forestry sales are forecast to be up about 1% in 2017 with positive currency translation of about 1 point. Global forestry markets are expected to be roughly flat in 2017. C&F’s full year operating margin is projected to be about 3.5%.”

Tony Huegel

We’re modelling different scenarios for the Trump presidency, but at this point they are speculation

“Yes. I am going to take that question and make it broader than just tax. And what I would tell you is the thing – the most important thing is anything that’s being talked about in media and anywhere else is obviously speculation at this point in terms of what may or may not happen. And so certainly internally, we are evaluating different scenarios. So, the short answer to your question is the, of course, we are looking at what that impact may or may not be, but we are looking at all kinds of scenarios, because at the end of the day, we want to be prepared for whatever does become reality. But we are – at this point, it would be premature to talk about that publicly just because it would be pure speculation, so – but we do appreciate the question.”

Urban Outfitters 3Q17 Earnings Call Notes

Urban Outfitters’ (URBN) CEO Richard Hayne on Q3 2017 Results

Strength in digital channel offset weakness in brick and mortar

“Within the digital world, customers continued to migrate from desktop to mobile as preferred method of interaction. Mobile devices now account for almost 2/3 of total Company digital sessions. The strength in the digital channel more than offset the weakness in stores with total retail segment comp sales increasing by 1% in the third quarter. The disparity in channel results demonstrates that the consumers’ affinity for digital shopping continues to grow. Her expectations around functionality and service levels in this channel are also growing. This is why we continue to make significant investments in personnel and technology that will expand our online assortments, enhance and personalize the digital experience, give us more insight into customer preferences and permit us to deliver orders faster and more reliably. Improving our capabilities in the digital channel is one of our strategic priorities.”

Shift in fashion silhouette continues

“During the quarter, we also saw a shift in fashion silhouette, that I’ve alluded to on prior calls, begin to strengthen. This emerging trend which seems to have its roots in Europe, is not impacting all brands equally. Predictably, younger, more fashion-forward customers are adopting these new looks more readily. So in Q3, the Urban and Free People brands benefited from the shift while the Anthropologie brand did not. In the fashion industry, times of rapid change, like we see when silhouettes shift, offer the greatest opportunities but also pose the greatest risks. Now let me turn your attention to the Anthropologie brand where third quarter top-line results were very similar to Q2. ”

It can take 3-4 years for a fashion shift to take place

“I actually think that it was 2006, 2007 if I recall correctly, but you might be right. I think that we’re in another shift that is similar. It’s going to take awhile. Probably takes three to four years to actually get through and as I said, the ups and downs in that period can be reasonably severe. So I think that each of the brands has a different customer segment that will adapt to the shift at different times and at different levels.”

Frank Conforti

Expenses will leverage in DTC but that will deleverage expenses in stores

“This is Frank and you’re right. That dynamic on DTC has been going on for some time and I think as it continues to increase in penetration, you’ll continue to see delivery expense and logistics expense to leverage relative to the total of URBN. Where there’s an incremental offset though is relative to the increased penetration, you do see reduced — and leverage relative to store property, so as DTC increases, it does deleverage delivery expense and logistics expense but it does then provide for some offset opportunity in store property.”

David McCreight

Customer metrics are strong, just buying less apparel at a lower price

“customer metrics are super strong. She’s just buying less apparel and apparel at a lower price and, as that cycle turns back and you combine and then we come out of the apparel cycle in positive shape and you add to it the power of the other expanded categories, we think it could really become a very nice inflection point when you think about the strength of the in-store experience and then what we’re investing in in digital as well. ”

Star Bulk Carriers 3Q16 Earnings Call Notes

Star Bulk Carriers’ (SBLK) CEO Petros Pappas on Q3 2016 Results

Commodity prices appear to have reached bottom

“. After more than two years of strong declines, commodity prices appear to have reached a bottom during the first half of 2016 and have experienced a strong recovery rally during the last couple of months. We believe that the monetary and fiscal stimulus that took place in China during 2015 and first half 2016 has resulted in a healthy recovery of steel consumption as well as electricity requirements. Home prices have continued to increase, while steel mill production and profitably has also improved. It is encouraging that both iron ore and coal internal production in China have continued to record strong declines during the first 10 months of 2016. This has partly been the result of government regulation, such as a 276-workday restriction on coal mining that came into effect during the second quarter of 2016.”

No reason to be that positive on the market until after 2018 or 2019

“The major problem is if we become too positive about the market, which I don’t think there is a basis right now. I think there is a basis to become very positive about the market after 2018, 2019. I think we will see a very strong market after that. But for 2017, I don’t see the reason to be that positive. I believe that this additional deadweight will require demand of about 4% to 5%, which we will probably not see. And the problem is going to be that people might stop scrapping. Not to mention potentially some people ordering.”

Customers don’t view the current market as sustainable

“Hi, Herman. Well, first of all, I think that charters believe that the market is not sustainable. That’s number one. So they would not experience for let’s say one-year because they probably think that at some point later on in time, the rate would fall again. However, as the market is pretty strong right now, and especially in the Atlantic, what charters do is they give us like one-year charters. Because if they don’t, they will have to pay $15,000 and $17,000 and $18,000 a day for the next trip.”

Capital is not as available as it used to be. We have all lost a lot of money

“Well, hi, Ben, thank you for the question. I think that first of all, equity capital is much less than what it used to be. We have lost – all of us have lost a lot of money. So on that side, I don’t see much capability for newbuildings. Also, the Western banks will probably not finance newbuildings. I mean, the banks have talked – I think it’s the last thing in their agenda right now. I think the only risk of ordering comes through China in case Chinese banks in cooperation with the state decide to give 90% finance to finance vessels in their home yards. That’s I think the only risk that we are in right now.”

I don’t know what the Trump affect is going to be

“Now I don’t know what the Donald Trump affect is going to be in the market. You guys are all in the States. You can probably judge better than I can. On the one hand, maybe there’s going to be measures that boost the American economy. On the other hand, if there is issues with the trade act with other countries that could create protectionist – build protectionist walls for trade. So I don’t know the plus or minus what is going to be the final effect there.”