All posts by James Cannon

About James Cannon

James Cannon is an experienced hedge fund analyst. He has served on the advisory boards for various different Fortune 500 companies as well as serving as an adjunct professor of finance. James Cannon has written for a variety of Financial Magazines both on and off line. Contact James at james[at]businessdistrict.com

Discussions Lead to Chinese Mega Soybean Purchase

China,

As a result of high-level trade talks a week ago, China has agreed to purchase 600,000 tons of soybeans grown in the USA. As a result of the purchase, the price of soybean futures in the US climbed by more than 1 percentage point on the Chicago Board of Trade.

Soybeans. Photo courtesy CSIRO


The deal will result in the shipment of about 10 boatloads of soybeans, which will be spaced over the time period between October and December, all heading off to Chinese shores.


The announcement about the soybean purchase came on the heels of the bad news that Chinese trade officials had cancelled a scheduled visit to US farm states. Except for this one decision, trade talks had proceeded positively. More negotiations between the US and China are scheduled for October has the trade war between the two powerful global economies continues.


In early September this year a Chinese state news agency reported that some farm products, pork and soybeans, were no longer subject to additional tariff increases. The announcement helped to reduce tensions between the trading partners and make way for the recent soybean deal.

Best Destinations for Business Travelers in the US

News, , , ,

Business travelers spend lots of money during their peregrinations for their companies. Global business travelers spent more than US$1.3 trillion in 2017, with China and US businesses the top two spenders. Expedia, the on-line travel agency looked its annual data and discovered that out of a total of 405 million trips made for business by Americans, about 60% extended their stays for fun.


The following three cities were found be the best US cities in which adding a few days to your business stay is the most fun according to small business solutions marketplace Fundera.


In first place was Los Angeles. Strategically situated in one of the sunniest US cities, a visitor can count on great weather, but there is a lot more to LA than sunshine. Gorgeous beaches, fantastic restaurants, non-stop entertainment opportunities and world-class museums are just the beginning of what makes LA such a great place to chill.


What must have been a close second is of course New York City. One of the great cities of the world, despite cold winters and hot/humid summers, the Big Apple is unquestionably the go-to place for an exciting vacation chock-full of an almost endless variety of activities suitable to every taste. From Broadway shows to lovely parks, the city that never sleeps is good choice for an after-work break.


In third place comes Dallas; but it ranks first in US cities not along any coast. This city is a wonderful compromise in its size, convenience and culture. Since it is not a mega metropolis like LA or NY, it might have less by way of choices for restaurants and hotels, but it makes up for that in the calm, cool atmosphere created by a smaller, friendlier and easier to get-around in environment. Not to mention the Dallas airport is a hub for just about anywhere else you might want to travel to in the US.


Fundera says that an average stay in a Dallas hotel is just under $190 per night, lower than in less-populated cities such as San Francisco or Miami. The Dallas Fort-Worth Airport is 20 miles from downtown, but even during rush hour it will only take 40 minutes to arrive.

Toshiba LNG Division Sold to Total SA

Companies,

Unburdening itself from its somewhat risky liquified natural gas venture, Toshiba Corp. completed the sale of Toshiba LNG Corp to oil and gas powerhouse Total SA of France for $15 million. The sale is part of the Japanese firm’s restructuring process.

Technigaz Mark III type LNG membrane inside an LNG carrier. Photo courtesy of Thinfourth


The sale was announced in June when Toshiba realized it would have a hard time profiting from US-produced LNG for Japanese utilities due to the fall of the price of LNG. As it is, the sale to Total SA will still result in a loss for Toshiba of about $847 million for the fiscal year ending in March. Toshiba plans to pay Total about $815 million to take the contracts Toshiba is already committed.


Toshiba’s deal with the US firm to have the rights to process U.S.-produced gas into 2.2 million tons of LNG each year for 20 years beginning in 2019 was brokered back in 2013.
Toshiba’s restructuring comes in the wake of a fraud scandal that came to light in 2015, and after Westinghouse Electric Company, a nuclear power subsidiary, went bankrupt in 2017.

Banking Guidance for Students

News

When students head off to college for the first time, it is vital to have the correct checking account for their needs. Credit card companies are fully aware of this and thus offer all sorts of incentives to sign up with them. But choosing the right bank – especially for those who have never done it before – can be a little overwhelming. Deciding whether or not to get a credit card is also very important.

According to Michelle Smith Source Financial Advisors Manhattan CEO, students should not “feel pressured to open a credit card because [they are] opening a bank account.”

Why is this advice being given though?  What are the issues with credit cards, in particular for students?  One answer is: reality.  There are many promises made to those signing up for a credit that are simply not true such as price deals (which turn out to be not such great deals) and cashback deals (also not all that attractive in reality).  When you factor in interest payments and fees the “deals” can actually be the opposite of “a good deal.”

Managing credit cards can be a challenge.  Why would a student – often away from home for the first time – want to be burdened with tracking debts and payments and managing deadlines every month?  Student life should be a fun experience and the only pressure involved should come from studying, not card management.

Also, if payment deadlines are missed, interest rates can spike to 20 percent or even more. Youngsters often get misled into believing that credit limit is their money, when in reality it is money that the bank is loaning you at a very high interest.

So as Michelle Smith suggests, students should not “feel pressured” to get a credit card.  A bank account is different, but a credit card – as noted in this article – is something quite different.

Private Equity Company KKR & Co to Buy Major Stake in China Lighting Company

News

Kohlberg Kravis Roberts & Co, a New York-based private equity firm, says it will purchase a majority of shares of China-based NVC China for US$794 from parent company NVC Lighting Holding Ltd.


The companies announced that they will be creating a strategic partnership in which, when done, KKR will hold 70% of shares and NVC Lighting will own the remainder of the stocks.


NVC Lighting is planning on paying shareholders a special dividend after the deal is sealed, of HK$0.9 (US$0.01) a share. The deal is expected to be finalized during the fourth quarter of 2019.


The investment came from KKR’s flagship Asian Fund III. Since 2007 the fund has invested over US$4.5 billion in Chinese companies.