The Deutsche Bank AG – DOJ Dance

Richard Wottrich is an exclusive contributor to Seeking Alpha. The following article was posted October 4th, 2016: Summary Deutsche Bank continues to pursue a swift deal with the U.S. Department of Justice (DOJ). Will a DOJ deal take pressure off Deutsche Bank’s share price? The German government is publicly refusing to backstop Deutsche Bank.   Deutsche Bank continues to pursue a swift deal with the U.S. Department of Justice (DOJ) Deutsche Bank didn’t trade in Germany (DBK) on Monday, a holiday, but its U.S.-listed stock (NYSE:DB) was down to $12.81 (- 2.17%) by midday, resuming a roller-coaster ride for the bank’s shares. Bank officials are seeking to negotiate a swift deal with the U.S. Department of Justice (DOJ), which is demanding a fine of up to $14 billion for selling U.S. toxic mortgage-backed securities leading up to the 2008 global financial meltdown. The odds of the DOJ agreeing to such a deal ahead of the U.S. presidential election on November 8th are slim and none – hence the uncertainty will continue for at least another month. Deutsche Bank has assets of $2 trillion and over $247 billion in cash on hand.The bank just sold Abby Life, a British insurance subsidiary, for $1 billion. Deutsche Bank AG is also selling a $3.9 billion stake in Chinese lender Huaxia Bank Co. and is seeking permission to move those proceeds out of China. In the Orwellian-speak of the global banking world “too-big-to-fail” banks’ are called G-SIBs, for globally systemically important banks. Deutsche Bank is a G-SIB and thus a surrogate for the entire European Union banking sector. Deutsche Bank is the lead...

Seeking Alpha Article – Benchmarking Tesla

Benchmarking Tesla Published on Seeking Alpha Apr. 12, 2016 11:39 AM ET DSI Global View LLC Summary Is Tesla fairly valued and can we measure Tesla’s value via benchmarking? Conclusion is that Tesla stock is a sell. Is it time to short Tesla? What does the near term future hold for Tesla?   Is Tesla fairly valued and can we measure Tesla’s value via benchmarking? Tesla (NASDAQ:TSLA) and its all-electric “Applesque” Model S have become stock market darlings and government supplicants, synonymous with the battle against climate change and the evolution of the electric automobile. But is Tesla worth its $250 share price and market capitalization/revenues ratio of 8.18 times its 2015 revenues? The purpose of this article is to determine Tesla’s value via benchmarking. When it comes to best practices in valuing a company through benchmarking the goal is to find good best-in-class corporate comparables. Through such comparisons we may see how financial ratios between two corporations correlate or diverge. We compare market perceptions and behaviors relating to the corporations to measure how risk is factored into their respective valuations. Because Tesla is valued at such a high market capitalization, we will focus on big corporations and their market capitalization/revenue ratios to isolate their relative market valuations. Relative capital expenditures also are isolated to demonstrate the impact on corporate future cash flows. Tesla has sold just 125,000 cars in 13 years. In 2015 Tesla says it delivered a bit over 50,000 cars. Meanwhile the total of all autos sold globally hit 88 million in 2015. Tesla’s unit production is not material to the automotive industry. Clearly almost the...

2016-2020 Mega Trends

  January 6, 2016, Atlanta USA Richard L. Wottrich, CEO & Senior Advisor, International Services As the saying goes, “Facts are stubborn things.” DSI deals in facts and analysis based upon Big Data trends and the resulting emerging patterns of human behavior. The balance of this decade portends several disturbing trends that appear as recurring and persistent: Middle East War – In case you missed it, the Middle East is embroiled in a Shia – Sunni war centered on ISIS in Syria and Iraq. ISIS is a proxy for the broader historical conflict between the Princes of Saudi Arabia and the Ayatollahs of Iran. Meanwhile Turkey is taking advantage of this by leaning in hard on its Kurdish minorities. Nigeria is waging a similar war against its Islamic terrorists. Afghanistan is failing as Western Forces withdraw. Christian and Jewish minorities across the Middle East are being purged. The bitter fruit of this has been over one million refugees straining the European Union and its open-border Schengen Agreement. The silver lining is that the EU Developed Economies have declining birth rates and dwindling labor pools. Germany understands this and welcomes migrants, as it has previously welcomed millions from Turkey. The question is in the EU’s ability to assimilate disparate cultures. The French experiment has failed thus far, as have most EU member states, as millions of young people cannot find meaningful jobs. As we learned in the Iraqi War, the Developed Economies can cope with the cut-off of a few million barrels of oil a day in the short term, as Iraq climbs back to exporting a million barrels day. However,...

Tax Inversions – That Giant Whooshing Sound

  by Richard Wottrich, December 20, 2015 By Richard Wottrich, CEO & Senior Consultant, International Services December 20, 2015, Chicago USA  The Prussian general Carl von Clausewitz (1780 – 1831) famously said, “War is merely the continuation of politics by other means.” Ever since humanity organized itself into discreet power centers eons ago, nations have competed for territory, finite resources, people and ideas. The companion of this competition has always been war. If the companion of competition among nations is war, then their offspring is taxation. Those in power use taxation by force to expropriate the labor and wealth of others. Hence in today’s modern world of advanced IT finances, with the movement of money but a click away, the red herring is often proffered by those in power: “Taxation is a moral obligation.” Nothing unleashes the fury of the electorate whipped up by the political elites quicker than the stern lights of a big U.S. multinational corporation leaving the shores of America for more friendly tax climates – a practice known as ‘tax inversion.’ A tax inversion is nominally an American term meaning the re-incorporating or merger a company overseas in order to reduce the tax burden on income earned abroad. Corporate tax inversion as a strategy is used by companies that receive a significant portion of their income from foreign sources, since that income is taxed both abroad and in the U.S. when brought back on shore. This is a tax situation peculiar to the U.S., as it is one of the few countries to tax foreign earnings brought back home after they have already been taxed in their...

Turkey and the Fight against ISIS – World Affairs Council of Atlanta

August 17, 2015, Atlanta USA DSI Global View LLC CEO Richard Wottrich participated last Thursday evening in the World Affairs Council of Atlanta Briefing “Turkey and the Fight Against ISIS.” DSI is a member of the World Affairs Council of Atlanta.  Featured speakers and panel participants included: Özgür Kıvanç Altan, consul general, Consulate General of the Republic of Turkey in Miami USA – Altan spoke regarding the recent elections in Turkey, the recent decision to open their air basis to U.S. strikes on Isis, and the issue of a ‘buffer zone’ on the Syrian border with Turkey. Dr. Joshua Walker, Ph.D., nonresident transatlantic fellow, German Marshall Fund of the United States – Walker currently serves as the Vice-President of Global Programs at APCO Worldwide in the Office of the CEO and is also a Transatlantic Fellow at the German Marshall Fund of the United States in Washington, DC. Hrair Balian, Director, The Carter Center – Balian joined The Carter Center in 2008 as director of the Conflict Resolution Program. Mr. Balian oversees the program’s efforts to monitor conflicts around the world and coordinates the Center’s cross-program efforts in the Middle East. He is also an adjunct professor at the Emory University Law School, teaching an advanced international negotiations seminar. DSI Global Team Partner Maggie Kruger joined Wottrich at the Briefing. Kruger is a Packaging Industry and Adhesives Industry expert who owns Adhesive Technologies.  Adhesives Technologies designs and manufacturers adhesives solution for everything from carpet squares for Big Box chains to bonding tapes for AstroTurf. Maggie recently spent a month in Istanbul investigating locations for a new manufacturing facility in-country. DSI is a...

Top EDM DJ Earns $66 Million

Media Sector Analysis – Electronic Dance Music (EDM) Richard L. Wottrich, CEO & Senior Consultant, International Services, DSI Global View LLC Atlanta USA Half of all humans on earth are under age 30 (Millennials). If you do not know what trance, rave, house, techno, deep house, breakbeat, dubstep, acid house, gabber, or hardcore mean, then you are over age 30. Welcome to the world of Electronic Dance Music (EDM). EDM is mostly a high-energy, pop-driven, commercial strain of dance music. EDM is a global phenomenon. EDM is a $7 billion plus global industry that is growing rapidly in all markets. DJ’s have become the new icons of Millennial Generation. Companies such as Live Nation Entertainment, Inc. (NYSE:LYV) and SFX Entertainment Inc. (NasdaqGS:SFXE) sell-out stadiums at concert festivals with multiple DJs who lead the charts. EDM multi-day festivals and raves are the hottest form of live entertainment. Venues include the Las Vegas Electric Daisy Carnival; TomorrowLand in Brazil this year; Sensation in multiple cities worldwide; and, Ultra Music Festival in Miami and other global venues. Globally EDM concerts grossed $4.2 billion in 2013. The Top 10 DJs include Calvin Harris, number one at $66 million; David Guetta; Tiësto; Deadmau5; and, Skrillex, an LA six-time Grammy winner. According to the Forbes’ 2014 Electronic Cash Kings list the Top 10 DJs earned a combined $268 million last year, eleven percent more than 2013. EDM Top DJ social media “likes,” grew their followers by more than 350% apiece in 2013, according to data from Rankings EDM Monitor. EDM composer Richie Alick explained its mainstream appeal to me recently. “My friends are either out...