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 SANDERS MARKET REPORT

by Emily C. Sanders, CPA

December, 2008 

The global financial markets in 2008 can be seen as an "annum horribilius", to quote Erasmus, and the 2009 economy will present many growing challenges.  This is a historic time with rapid fire litany of ugly news in every conceivable respect, of which the Bernard Madoff ponzi scheme disaster was the moral bottom.  Almost everything that has been predicted was proven wrong, and as a civilization, global imbalances have caused Americans to re-examine long-held assumptions about our standard of living and our institutions.   2008 marks the end of an era of global credit expansion based on the US dollar as the primary international reserve currency.  One of the only major bright spots this year has been the Beijing Olympics.  2008 was the year when long-held market beliefs and models were questioned, such as: a well-diversified portfolio of stocks and bonds will shield one from all risk; buying and holding quality stocks is the best long-term strategy; the regulators will protect individual investors from market abuses; if you save and minimize debt to manage investment risk you won't be adversely impacted; and a good education shields one from job loss. 

 

2009 will kick off a new administration and high hopes, yet not enough to stall the rise in unemployment to near 10% by year-end and the collapse of many national retail names.  Expect unprecedented trials of business figures and a high-profile executive to be sentenced to jail: Dick Fuld, former CEO of the now-defunct Lehman Brothers.  Housing prices will bottom in the second half of 2009 as the inventory of unsold homes declines, aided by lower mortgage rates; stock markets will get better once the bond markets thaw further, and Fed Chairman Ben Bernanke's policies of massive monetary stimulus will be vindicated, although gold will continue its rise.  China and India will regain their footing as the economic growth spots in the world order, not without civil unrest.  The key to wealth-building success in 2009 will be tactical in nature, along with willingness to pivot frequently including the use of covered call options as volatility continues at a high pitch.  Confidence will be slow to be restored, and indecision will linger.  While oil prices were manipulated by speculators in mid-2008 (and current low prices are like a tax cut for Americans), look for oil to return to $60/barrel in early 2009 and for a big infrastructure push to be made for alternative energy.

 

There is always a disposition in people's minds to think that existing conditions will be permanent.  Consistently declining equity prices are not the norm historically.  The stock market has recorded positive total returns in 71% of the 82 years since 1926.  A super-boom has just been completed that lasted more than 30 years, and assets of all types have been "marked down".  The flip side to this painful reality is that for those having cash or access to credit, next year will present opportunities to purchase financial and real assets at values not to be seen for another few decades.  Forced liquidations by institutional investors, mutual funds and hedge funds have been partly responsible for the market's violent moves to the downside.  The hedge fund industry is shrinking from $2 trillion to under $1 trillion.  Having less money invested in hedge funds is good long term because it means less volatility and less competition for investment ideas.  Almost half the gains of the next bull market will be reaped in the first six months, long before the recession is declared officially over in 2010.  Much has been made of the parallels between now and the nightmarish Great Depression of the 1930's.  Make no mistake, there are similarities, however, the current crisis is more akin to the 1973-74 recession, and an end is in sight.  Be patient - while there won't be a fast recovery, this too shall pass. 

 

In this season of good will, we thank you for your business and association, and trust that you are blessed with the things that matter most in life:  the love and support of family and friends, the joy of giving, and good health.

Emily Sanders

Sanders Financial Management

Atlanta, Georgia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE JP54 SPOTS BELOW ARE AVAILABLE FOR 52/48 with 10% LIFTABLE IN HOUSTON OR ROTTERDAM
 
* 100mmbbl spot
* 300mmbbl spot
* 500mmbbl spot
* 1 billion bbl spot
 
Attached is a template NCNDA/MFPA (all intermediary groups go in Buyer Group #2).
Please have your buyer fill in the desired amount from the specified above and return it together with an ICPO with authorization for soft probe to: ARAMCO

In 2008 to date we have negotiated generous credit facilities for clients at their request -

**Example, a large international commercial real estate development company seeking funding for further development activities worldwide is offered a $1 billion dollar loan at Libor plus 2% (4.72%) versus collateral of a top 25 world bank guarantee at 110% of loan.

**Example, an individual client wishing to purchase a 5 star hotel

overseas for $250mm is offered a $180mm loan with interest at the U.S. five year note rate plus 3.5% (approx. 6.27%), fixed for 5 years, then floating, versus the hotel as collateral and $70mm US equity participation by our client.

**Example - A large US conglomerate wishes to have receivables created when it sells auto parts to its commercial customers financed at a favorable rate, thereby allowing the supplier customers to have more credit at better rates. Loan terms currently being negotiated.

 

Procedures for CONTRACT Purchases of Fuel

 

 

DIESEL GAS D2 OIL GOST 305-82

RUSSIAN ORIGIN * CONDITION OF DELIVERANCE, CIF, C/F

 

Minimum 100,000 MT to 500,000 MT x 12 = $550/$545

500,000 MT to 1,000,000 MT x 12 = $540/$535

1,000,000 MT+ x 12 = $520/$515

call 404-228-5355 for procedures

 

Ellery McLanahan attended the Atlanta ACG Conference in February, 2008 - the Premier M&A and Private Equity Event in the Southeastern United States. Sponsers included SunTrust Robinson Humphrey, AIG, KPMG, Houlihan Lokey, Powell Goldstein, VRA Partners and Wachovia.

Over 1000 Investment Banks and Private Equity professionals were in attendance. Please use RBS as a source of information on approaching Private Equity Groups for capital, buyouts and financing. Also RBS can direct your group towards specialized investment banking firms, such as logistics and transportation as an example to assist in raising large amounts of capital for acquisition or M&A. Call Ellery McLanahan, Principal, at 404-228-5355 for followup information.

RBS has orders to buy and sell petroleum products, both spot and term. Among our product offerings are Gasoline- 87-95 octane, Jet Fuel (both grades), Diesel - D2, and crude oil from Kuwait,

Saudi Arabia (direct and secondary market), UAE, Venezula, and Nigeria. We seek to buy and sell to refineries through their mandated agents.

At the present time we are buyers of 500,00MT of 93 & 95 gasoline, CIF delivery to Asian market, term contract. We are also buyers of 1mm bbls per month Jet Fuel, A-1, CIF to Asian market. We are in touch with a seller of an allocation of Kuwait Petroleum, 5mm bbls per month for 5 years. We are in touch with a seller of 1mm bbls per month of Diesel, D-2. Please check us for prices and terms at ElleryMcL@yahoo.com.

At this time we have 700,000MT of steel and iron scrap available in original condition from construction sites in Alaska, minimum order is 100,000MT on a cash and carry basis. Also we can arrange monthly delivery of up to 400,000MT steel and iron scrap from the U.S. west coast. Additionally we are working with a worldwide company that can provide cement to our clients, minimum order 50,000MT. Check for price and terms on all the above - ElleryMcL@yahoo.com.

In July, 2007 RBS secured an order for 100,000 low price GSM cell phones that can do remote programming to the SIM Card IMSI etc. Additionally RBS has current orders for Nokia 8800 Sirrocco (original new euro specs) 50,000 units. Also orders for 1500 units of Nokia 6300

(new euro or UK specs). Our ability to supply quality cell phones at very competitive prices is making this important segment of our business grow. Please contact RBS (Ellery McLanahan) for quotes on your commercial cell phone needs.