All power for Friedrich Merz – Handelsblatt Morning Briefing

it works for Friedrich Merz, the new boss of the battered CDU. What could be better for an opposition leader than being reprimanded by the Foreign Minister for “pithy comments”? Yesterday, Merz accused Chancellor Olaf Scholz of mental absence in the Bundestag: “You don’t lead, neither in Germany nor in Europe.” After all their lazy hours, the Union faction enjoyed such a strong rhetorical appearance.

Perhaps it was then that the somewhat wooden party friend Ralph Brinkhaus realized that he had to give way as parliamentary group leader. This happened in a one-to-one conversation. Merz will take over in February. The Union is most happy about a change without any dirt. A repetition of the intrigues surrounding the chancellor candidacy was a nightmare for most.

In geopolitical disputes like the one surrounding Ukraine, it is not volume that counts, but strength of mind. In the end, what counts is who can make a pact with whom after the words have been jingled. As collateral damage, it is currently becoming apparent that China is moving closer to Russia.

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  • In a telephone conversation with his American colleague Antony Blinken, China’s Foreign Minister Wang Yi asked all parties to exercise restraint. Russia’s legitimate security concerns must be “taken seriously and resolved.” In the 21st century, all parties should “completely abandon the Cold War mentality”.
  • The EU, meanwhile, initiated proceedings against China before the World Trade Organization (WTO). The People’s Republic has removed Lithuania from its own customs list, making trade practically impossible. Lithuania’s exports to China collapsed by more than 90 percent. The Baltic state had previously allowed Taiwan to have its own representation in the country. But China sees Taiwan as a breakaway province.
  • China is “a risk for the world economy”, writes Professor Bert Rürup in his column “Der Chefekonom”. China’s rise had been the driver of the global economy for three decades, but now there is a threat of a braking effect due to Corona, trade disputes and aging – “all China strategies need to be put to the test”.

Perhaps we should pause and listen to the Chinese general and philosopher Sunzi. He wrote around 500 BC. The book “The Art of War” states: “The wisest warrior is the one who never has to fight.”

The more the conflict with Russia escalates, the better the Americans get into business. With their liquefied shale natural gas (LNG), they want to compensate for part of the natural gas deliveries from Russia that may be available. Qatar, our good ally in all matters of football commerce, is also available. The Emir had already announced last November that he was “a sincere partner of Germany”. The largest Arab investor wants to spend around ten billion euros more on its various holdings in German companies. According to our information, Sheikh Tamim Al Thani and US President Joe Biden will soon be discussing exactly what the emergency supply alliance should look like in Washington.

The stock exchange’s poetry album is full of sayings that deal with anti-cyclical behavior. “Buy when the guns are banging – sell when the violins are playing,” wrote Carl Mayer von Rothschild. Warren Buffett translated this into the jargon of modern cowboy capitalism: “Be greedy when others are afraid.” But where should the willing greedy strike who assumes that after the stock prices have been beaten down there are bargains to be found everywhere? In our weekend report, we address this in the popular “Ask Dr. summer” after.

Our stock market expert Ulf Sommer examines four methods of finding undervalued stocks.

  • The value investing of veterans Warren Buffett and Charles Munger. They are interested in companies with little debt, low stock prices (as measured by earnings), high dividend yields, and good book values ​​on the balance sheet. You end up here with Coca-Cola, Amazon, Apple, Bank of America and American Express.
  • The Substance Method. The aim is to find the best possible price-to-book value ratio. The list includes Deutsche Bank, Fresenius, Bayer, BMW and Beiersdorf.
  • The dividend strategy. Stocks with high dividends and low prices are in demand. This applies to Allianz, Procter & Gamble, Sanofi, Novartis and Munich Re.
  • The quick and dirty approach. He looks at companies in unethical industries like oil, tobacco, and arms. They are profitable, but morally contaminated. RAE Systems, General Dynamics, British American Tobacco, Philip Morris, and ExxonMobil show up here.

The nervousness in the market in view of the turnaround in interest rates and the Ukraine crisis will not make us forget even the most sophisticated theory. But the trained investor knows from stock market guru André Kostolany that stock market profits are pain and suffering: “First comes the pain, then the money.”

Jens Spahn (CDU), once Germany’s most popular politician, is now just a shadowy man from the reserve zone. What is being talked about is the legacy of the ex-health minister. In 113 court cases at the ministry headquarters in Bonn, the helpers of successor Karl Lauterbach (SPD) are dealing with old suppliers of masks. Spahn had hired them in March 2020 in an “open house” process. Everyone who bid got an order – which resulted in costs of 6.4 billion euros. Because the consultants who were later hired by EY reversed many orders, for example due to quality defects, there was an avalanche of lawsuits.

In one case, the Lauterbach authority received a rebuff from the Bonn Regional Court. She should pay 2.1 million euros plus interest to the mask dealer. According to the court, one failed to grant a “period for supplementary performance” when withdrawing from the purchase contract “because of defective services”. There is a risk of hundreds of millions of euros in costs for mask waste and annual interest payments in the double-digit million range. Spahn’s political skills have their price.

My cultural tip for the weekend: “Serge” by Yasmina Reza, a novel about remembering that has now been published in German – here using the example of the fate of the Poppers, a middle-class Jewish family in Paris. The title character: a consultant who has little success and who consoles himself with gluttony and alcohol. The high point: the fragile family model breaks up on a trip to Auschwitz with the two siblings and the children. Serge refuses the intended culture of remembrance. And at some point his brother Jean says: “Nothing can be expected from the memory. This fetishism of memory is mere appearance.”

Canadian rocker Neil Young no longer wants to listen to his music on Spotify.

And then there’s the Canadian rock veteran Neil Young, 76, who after a spectacular hand-to-hand fight withdraws his music from the Spotify streaming platform. The Grammy winner was upset about podcaster Joe Rogan, 54. In his show “The Joe Rogan Experience”, published exclusively on Spotify, he spread fake news about corona and vaccinations. Spotify has “become a site of potentially deadly disinformation.”
Since the Swedish company was silent about these sounds, Mister Young leaves only a few songs on Spotify. Looks like the streaming service has put the podcaster over the rock star. He might just pick up the guitar and sing it again: “Keep on rockin’ in the free world.”

Have a great weekend, rock it.
It greets you cordially
Hans Jürgen Jakobs
Senior editor
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