Recession looming???

In a recent e-mail I received from a financial analyst who follows the stock market, he said that rail-car shipments have trended down and that that trend has always been a leading indicator of an upcoming recession.

I also want to point you to this .....

Dr. Hussman calls recession:

“Since October, the economic evidence has shifted from supporting a growing risk of recession, to a guarded expectation of recession, to the present conclusion that a U.S. recession is not only a risk but an imminent likelihood….”

And, Dr. Hussman expects the S&P to fall at least 40-55% (from its recent peak):

“We’ll certainly welcome outcomes that better reflect our experience in other complete market cycles, but we won’t do touchdown dances if the market collapses. The likely distress as the current market cycle is completed is something I wish on nobody. The unfortunate reality is that someone will have to hold stocks over the completion of this cycle, and it would best be those who have either carefully evaluated and dismissed our concerns, or those who have appropriate risk tolerances and investment horizons to weather the likely 40-55% loss in the S&P 500 that would comprise a rather run-of-the-mill retreat from the 2015 valuation extremes.”

Read Dr. Hussman’s most recent complete market-commentary at this link:

http://www.hussmanfunds.com/wmc/wmc160118.htm

But, this guy says that we are headed for further growth in 2016!

http://www.calculatedriskblog.com/2016/01/private-investment-and-business-cycle.html

WTF! – Bespoke Tranche Opportunities??? - Where is Lewis Black when I really need him?!

Totally off subject (i.e., this post has nothing to do with reprographics!)

A couple of nights ago, I went to see the movie, “The Big Short”.  Although the movie was, I think, very well done (and Steve Carrell’s performance was absolutely terrific), the movie – well, the subject matter covered – made me very angry.  To think that there were a huge number of people involved in the enormous fraud (the fraud that caused a huge financial collapse and the Great Recession) and to learn that only one person was convicted of committing a crime – made me very angry, upset, yes, totally pissed me off.  (How anyone can trust a ratings agency is beyond my imagination.)  JFC!

During the Great Recession, there was lots of stuff written about:

-CMO’s (Collateralized Mortgage Obligations)

-MBS’ (Mortgage-Backed Securities)

-CDO’s (Collateralized Debt Obligations)

… and we also heard the words “tranche” and “tranches”

And, we learned about Credit Default Swaps (CDS) which, basically, were bets that obligations would fail (i.e., become worthless or become worth a lot less than what they were originally sold for)

We learned that junk mortgages (shit mortgages) were packaged into securities, securities which were fraudulently rated AAA, and sold to investors (all around the world).

Not only did most of the investment banks package and sell CMO’s, MBS’ and CDO’s, they also, when they realized that those packages were going to fail, began making bets (CDS’) so that they could earn huge profits on the junk they packaged and sold.  MF’ers!

At the end of the movie, a statement appeared on the screen that said that, within the past couple of years, a new type of “bet” has been created by Wall Street firms…..  “Bespoke Tranche Opportunities”

I sat there thinking, “WTF is a “Bespoke Tranche Opportunity???!!!”

Here are a couple of articles I found that explain that:

High Risk Investment That Brought Down The U.S. Economy Returns, With A New Name

When a restaurant fails a health code inspection, sometimes the easiest thing to do is to close up shop, let people forget what happened, then slap a new sign on the door and reopen under a new name. That’s essentially what the world’s biggest banks are doing with a complex, high-risk investment product that helped destroy the global economy less than eight years ago.

Goodbye, “collateralized debt obligations.” Hello, “bespoke tranche opportunities.” Banks including Goldman Sachs are marketing that newfangled product, according to Bloomberg, and total sales of “bespoke tranche opportunities” leaped from under $5 billion in 2013 to $20 billion last year.

Read the complete article at this link:

http://thinkprogress.org/economy/2015/02/05/3619325/bespoke-tranche-opportunities-are-your-god-now-america/

And, here’s another article to read:

http://www.bloomberg.com/news/articles/2015-02-04/goldman-sachs-hawks-cdos-tainted-by-credit-crisis-under-new-name

Russell Genest, former VP of Sales for NRI, is now “The Connector” at 1550a - Building Digital Revolution

At 1550a, Russell ("The Connector") joins Rich Nitzsche (“The Scientist”) and Darren Rizza (“The Visionary”).

Not sure what all that means, but, congratulations to Russell on his new gig.

Here’s what they say about their company:

We are visionary, strategic, and digitally informed thought leaders, leaning on a combined six decades of business technology leadership in professional services within the building design and construction industry.

Our expertise and experience guide building industry owners - building owners, design firm owners, construction firm owners - on their ongoing growth and success based in an evolving digital strategy for their processes of design, delivery, operations, and management.

Darren Rizza was formerly with several different A/E firms, including Bergmeyer Associates, Payette Associates, Swanke Hayden Connell, SOM, AutoDesk, and Cubellis

Rich Nitzsche was formerly with several different A/E (and construction related) firms, including SOM, ESD,  AECOM, Perkins & Will, and LTC.

http://www.1550a.com

From the current issue of the Larry Hunt Newsletters - on starting a copy center business from scratch … in a foreign country

I just received the January 2016 edition of The Larry Hunt Newsletters.  As many of you know, The Larry Hunt Newsletters include three different newsletters, “Color Copy News”, “High-Speed Copy News” and “Wide-Format News.”  These newsletters have long been a great source of information for those in our industry who make equipment-buying-decisions. 

When I read through the January issue, I noticed that Dirck Holscher (who is the current publisher/editor of the Larry Hunt Newsletters) responded to a reader’s question.  You’ll see that question …. and Dirck’s response …. below my initial comments.

Dirck was one of the initial shareholders in Copy General Europe (and he is still a shareholder.)  I had the awesome pleasure of doing consulting work for Copy General Europe after I retired from NGI (National Graphic Imaging / FL/GA).   The founding shareholder of CG Europe was Paul Panitz (who Dirck mentions below), one of the very first “imaging industry” people I became friends with (I met Paul in 1970/71 ... and, yes, I am ancient!)  Paul Panitz was inducted into the Reprographics 101 Reprographics Industry Hall of Fame, last year, and there is a separate archive devoted to Paul (known as The Panitz Archives.)

Okay, here we go with the question one of LH Newsletters’ readers asked Dirck, followed by Dirck’s response.  (I did get permission from Dirck to post this on the Reprographics 101 Blog.) (This comes from page 6 of the January 2016 issue):

Getting Started in Europe ... A reader writes, “I’m curious about your past business experience. How did you develop the opportunity of owning the copy businesses in Europe? Was there no competition serving the market? Did a customer you currently have ask you to open facilities in that market?”

Editor’s comments: We got started in Europe because an old friend of mine, Paul Panitz, was travelling in Europe at just the time the Berlin Wall came down. Great changes were taking place in the entire region, but especially in Poland, Czechoslovakia, Hungary and East Germany. Paul had just sold a successful business in the Washington, D.C., area, and since he felt he wasn’t ready to retire, he was looking for new opportunities.

He was in the right place at the right time. The first thing that caught his eye was the opportunity to invest in independent newspapers in Poland. Under Communist rule, there was no free press. The media were under the thumb of the government and the party. Paul’s willingness to invest in these papers was important in re- establishing a free press in Poland.

While travelling in eastern Europe, Paul noticed that the most-developed and western-facing country was Hungary, particularly its capital, Budapest. Yet one vital thing was missing. Because of Communist control in Budapest, the entire city had virtually no copy shops or printers. Printing was totally controlled by the state, with no access to the general public. Paul saw this as an opportunity, since Hungary was finally opening to the West, and massive changes were taking place in its government and in society as a whole.

One day I received a fax from Paul. He outlined what he had observed, and he thought we should get together to discuss the opportunities. He proposed lunch ... in Budapest. He told me he had arranged for an open plane

ticket and several nights in the historic Gellert Hotel. This was an offer I couldn’t refuse. However, I did have second thoughts as, several weeks later, I was driving in from the old Ferihegy airport in a beat-up Trabant taxi. I saw the convoys of Russian troops heading out to the airport (it was many months before the last Soviet troops left Budapest). I thought at the time that “the Communists are heading out as the capitalists are arriving.”

I was intrigued with what I saw and felt there was a tremendous opportunity for a U.S.-style copy-shop operation in Budapest. Western companies were streaming in to do business in Hungary. And newly privatized Hungarian companies were free to do business in the West and needed Western-style marketing materials in order to be taken seriously.

It took us almost a year to get the first store open. Finding retail space was very difficult. There was no ready source for production copiers, and bindery equipment of any kind was totally unavailable. We finally persuaded Kodak to sell us some basic high-speed equipment. Service, though, had to come from Austria, several hours away. We brought in older bindery equipment from our operations in the U.S.

Once we finally got going, the rest was history. The first store became so busy we had to open a second, then a third. Ultimately we had six stores in Budapest and several locations in other parts of Hungary. We then expanded into the Czech Republic and Poland. Copy General has also had locations in Russia, China, Costa Rica and several other countries.

Copyright 2016 by Larry Hunt Publications. No part of this report may be copied or reproduced in any form without the express written consent of Larry Hunt Publications. Material presented in this publication is based on the best information available, but cannot be guaranteed for completeness or accuracy. To subscribe, contact Larry Hunt Publications, P.O. Box 1269, Berryville, VA 22611 – (540) 336-3360, fax (888) 345-3860, email:dirck@larryhunt.com, website: www.larryhunt.com. Editor: Dirck Holscher

E-mail from Joel to Dirck:

Hi Dirck,

Hey, thanks for the Newsletter.

I really enjoyed reading the piece you wrote about Copy General getting started in Europe.

If you don't mind, I would like to print-to-pdf that page of the newsletter so that I can post it in "The Panitz Archives", which is linked to the Reprographics 101 Reprographics Industry Hall of Fame.

By the way .... small world .... and I don't think I mentioned this to you before .... but, shortly after I reunited with Paul, which took place in early 2007, I bumped into Rafael Luis Aparacio at the IRgA convention in late May 2007.  Rafael was then CEO of Service Point (HQ'd in Barcelona.)  I had already known Rafael for several years.  But, when we talked at the convention, and I mentioned Paul to him, he said, "I was with Kodak at the time Paul started in Budapest, and I was the salesguy who worked out Paul getting his first Kodak copiers in Budapest!"  I later passed along to Paul Rafael's "hello."  So, Dirck, I got a smile when I saw you mention "Kodak" in the newsletter/article.

Dirck’s response to my e-mail:

Kodak was instrumental in getting us equipped in Budapest. They really went out on a limb placing machines in a country where there was no real print for pay market, except for what we were trying to create. We eventually worked with Sir Ralph Land and others at Rank Xerox to place engineering machines, but originally I believe all our copiers came from Kodak.

The Future of Reprographics ???

This afternoon, I received an e-mail from a long-time reprographics industry friend who said, "we just finished our best year ever, sales and profits, and I am excited...."

He also asked me this question, "do you have any articles or links (to articles) on the future of the (reprographics) industry and where things in imaging are going?"

If any of you have any articles - re the above referenced subject - or links to articles, please let me know.  

Thank you.