Arapaho Research Partners
GRAPHENE: MIRACLE MATERIAL WITH EXTRAORDINARY COMMERCIAL POTENTIAL

Graphene is often described as a “miracle material” with the potential to radically change the world.  Ballistic conductance, zero band gap and incredible strengthare all frequently cited as being the defining features of graphene. 

IBM is examining whether graphene’s magnetic traits will allow it to be utilized in medical devices to identify diseases in their earliest stages. The company is also working with the U.S. Department of Defense’s Advanced Research Projects Agency to investigate whether graphene can improve mobile phone efficiency, wireless signal clarity and radar quality.

Nokia is researching graphene’s potential use in cell phones and touch screens, with the latter usage expected to become commercialized relatively soon,potentially in a foldable phone?

Currently, nearly 200 companies are invested in graphene research, and governments are pumping billions more into it.  

With Dr. Manish Chhowalla, Donald H. Jacobs Chair in Applied Physics at Rutgers University, we discuss:

  • Graphene use in electrochemical storage. The next generation of batteries and super capacitors will require electrodes that can store large amount of energy chemically. Graphene is an excellent candidate for such applications.
  • The high strength and superior process ability of graphene makes it very desirable for lightweight but robust composites and thus it is becoming the material of choice in industries such as aerospace, automobile, biomedical, marine and sports, to name just a few.
  • Graphene use in the next generation of electronics. The excellent electronic properties of graphene make it interesting for post silicon electronics. For example, the next generation of electronics will require hundreds of gigahertz switching speeds. Graphene offers an inexpensive and practical way to achieve such frequencies.
  • Large scale manufacturing of graphene. Those applications mentioned above and numerous others will be enabled by reproducible and efficient manufacturing of graphene with properties that are tailored for specific applications.
CYBER THREAT: ARE YOUR INVESTMENTS PROTECTED?

An ever-growing reliance on technology in customer interactions, proprietary data storage and even normal business operations is creating increased risk for companies working to ensure these systems remain uncompromised.

As threats of cyber-attacks expand across industries, and given the potential material impact on operations, the security of these digital technologies from internal and external threats is vital. 

A number of bills are moving through Congress as U.S. policymakers become increasingly concerned thatterrorists could mount a cyber-attack that could shut down critical infrastructure, such as electricity plants or financial systems.

There have also been a number of high-profile private-sector breaches, including ones involving defense contractors such as Lockheed Martin Corp., Google and Citigroup. 

Cyber-threats appear more prominently in certain industries, particularly ones where large amounts of personal data are handled daily. Retailers, already keenly aware of privacy laws and their effect on how sensitive personal data may be collected and used need to be especially aware of the risks cyber-threats present. Acyber-attack on the computer systems holding such sensitive information could result in a breach of these privacy laws.

The Cyber threat is growing at an alarming rate. What actions must Corporations take?

Arapaho Research Partners is hosting a conference call  to analyze the near term threat to national defense and U.S. economic viability represented by cybercrime.

With Robert Harren, President at BEAM IT Security, Inc., we’ll discuss:

  • The risks currently faced by U.S. Corporations with respect to the poaching of sensitive data by Russia and China and what can be done.
  • Expected effect on Defense and other sensitive, related companies as a result of the Pentagon’s recent move to ‘fast track’ cyber weapon acquisition?
  • The cyber threat facing those who have made, or are contemplating making, the move to cloud computing.
  • Companies likely to benefit from the sale of hardware and/or software in the global drive for IT security.
  • What companies should be doing today to protect themselves from internal as well as external cyberthreats tomorrow.
EUROPEAN AUTOMOTIVE: THE CAPACITY CRISIS

The European car industry seems to be reaching a tipping point, with a grinding price war underway in a withering market, combined with high overheads from excess manufacturing capacity.

Industry executives are desperate to beat the overcapacity that hurts profits and leaves them vulnerable to overseas competitors. They want the region’s leaders to accept that they must close plants and make politically toxic job cuts to survive.

European car industry association ACEA discussed how it will intensify its lobbying efforts with the European Commission and come up with a pan-European fix for excess output at a meeting on the sidelines of the Geneva Auto Show.

However, the pain is not being shared equally. Demand for luxury cars is holding up better than the mass market and some automakers are proving more successful than others in tapping stronger demand from North America and emerging markets.

Japanese car maker Nissan Motor Co underscored its confidence on the first media day of the Geneva show by saying it would invest $200 million to build its new Invitation compact car in in Sunderland, England.

Meanwhile, Volkswagen AG threw out a challenge to the world’s largest car makers by volume, General Motors and Toyota Motor Corp, as Chief Executive Martin Winterkorn said the German company was confident of achieving its long-term target of stealing the top spot after strong car deliveries at the start of the year.

Arapaho Research Partners is hosting a conference call to review the outlook for the European Automotive Industry.

With Elias Luna, Advisor to Daimler AG, we will examine:

  • The likelihood and potential timing of a European Commission led drive for a fix to the pan-European capacity issue
  • The potential for further tie-ups such as the alliance between Peugeot and GM and the complications the Peugeot alliance will cause Fiat and others
  • Expectations for manufacturer profitability given the convergence of a consumer consumption cutback in the face of a capacity crisis
  • The expected ramifications on the European supplier base given a continued volume downturn and the potential capacity rightsizing
ELECTRIC BATTERIES: WHAT WILL DRIVE GROWTH?

The expansion of distributed photovoltaic solar power capacity, the adoption of plug-in electric vehicles, and the spread of dynamic pricing programs will all be key drivers in the growth of electric batteries.

Some vehicle manufacturers and their suppliers are betting big on the future of Electric Vehicles. Panasonic Corp. recently announced (2/24) it will supply lithium-ion battery cells to four hybrid and plug-in hybrid models that Ford Motor Co. plans to launch later this year. BASF is also getting in on the act. BASF and Daimler AG’s Smart brand recently presented a joint concept vehicle Smart Forvision, a prototype of an improved version of the Smart Fortwo.

There are many hurdles to overcome before manufacturers achieve widespread consumer acceptance of EV’s. Not surprisingly, there is a wide range of estimates as to the real market potential for the electric battery as well as to when EV’s will make economic sense.

An even greater market opportunity for the electric battery has received far less visibility.

Situated at the edge of the power grid, either at the distribution transformer or at the customer premise is community and residential energy storage (CRES) systems. These energy storage systems are typically much smaller than utility-scale or bulk energy storage systems. Nonetheless, utilities, vendors, and government agencies are currently testing CRES systems for use in smoothing peaks in electricity demand, enabling voltage support and frequency regulation, and providing islanding capabilities.

Although the CRES sector is still nascent, market conditions, technology capabilities, and economics are beginning to align in a way that signals significant growth opportunities over the coming decade.

Arapaho Research Partners is hosting a conference call on Wednesday, March 14th at 11am US EST to review the assumptions and associated economics behind the growth estimates in the electric battery market.

With John Wallace, Chairman of Enova Systems we’ll discuss:

  • The real market potential for electric battery use in the Automotive Vehicle and Utility Industries as well as the hurdles and likely timeframe to the varied commercial applications.
  • The economics of the global market for electric battery powered vehicles.
  • The safety requirements and implications for large amounts of energy stored in a utility oriented battery. What happens when things go wrong? Likely effects of public policy?
  • The expected effects of the ongoing convergence of technology in most areas of battery design and manufacturing.
SHIPPING: INDUSTRY IN FLUX

Will the Eurozone financial crisis spark a fresh wave of shipping insolvencies? One thing is for sure, funding problems at several leading European banks have started to accelerate a downward spiral in vessel values. Furthermore, competing in what is shaping up as the worst conditions in some shipping markets in the last 25 years has many expecting a significant shakeout.

Some of the world’s most influential shipping financiers have indicated that liquidity problems are precluding even normal, ongoing ship purchases; increasing pressure on prices. This, in turn, is prompting banks to worry about the value of similar ships pledged as collateral on their loans.

What will it take to normalize the shipping markets? When will normalization likely occur?  Who will be the beneficiaries of the changes that must take place along the way?

Arapaho Research Partners is hosting a conference call to analyze the current state of the Global Shipping Industry and explore what will take place between here and market normalization.

With Captain. Franck Kayser, Chief Operating Officer, The Containership Company ASA we’ll discuss:

  • The current state of supply and demand and how it is expected to affect future freight rate levels? Who is making money under existing conditions?
  • How is the world’s container vessel fleet expected to change over the next two years? Where are we with respect to new capacity coming on stream?
  • Is more carrier consolidation likely? Where are the opportunities within the industry?
  • The outlook for startup and market niche companies versus the bigger players going forward.
ARE EUROPEAN BANK AND SOVEREIGN DEBT RATINGS IN A DEATH SPIRAL?

The Summit is behind us and it would appear not much has changed.

Nothing has been put in place to adequately address the near term funding requirements facing European Banks and Sovereigns.

Several Sovereigns are in or near recession and are being required to increase their austerity programs with no growth plans in sight.  Potential for a significant downturn is increasing.

While European banks scramble to meet new, higher capital requirements and reduce their risk exposure, it remains unclear who will buy the debt Eurozone governments hope to issue in coming months. Moreover, widespread, ongoing deleveraging activity may work to further deteriorate their capital position.

Arapaho Research Partners is hosting a conference call to analyze the ramifications of the latest EUpolicy and macroeconomic developments on the Ratings Outlook throughout the European Union.

With Vincent Truglia, former Managing Director, Moody’s Sovereign Risk Unit we’ll discuss the ratings outlook for European Banks and Sovereigns.

EURO: THE ENDGAME

Despite considerable pressure, the ECB remains reluctant to decisively intervene on behalf of Italy and Spain. Perhaps even more troubling, fear appears to be spreading beyond Italy and Spain, to France, Finland and the Netherlands, as evidenced by Tuesday’s sell-off in the Eurozone bond markets.

While European banks scramble to meet new, higher capital requirements and reduce their risk exposure, it remains unclear who will buy the debt Eurozone governments hope to issue in coming months.

Many potentially promising policy proposals to quell the crisis thus far (issuing common euro zone bonds, mutualizing the euro zone’s debt stock, allowing the ECB to create money or act as a lender of last resort) have been resisted by the German government, German central bank and the ECB.

Moreover, in response to a few non-Eurozone nations public urging for the ECB ­­to provide the resources necessary to underpin the bond market, ECB policymakers warned against attempting to lure it into crisis management.

Arapaho Research Partners is hosting a conference call to analyze the ramifications of the latest macroeconomic developments on the common currency as well as the future of the European Union.

With Dr. Desmond Lachman, Resident Fellow at the American Enterprise Institute we’ll discuss:

  • The likelihood that Italy will be forced to restructure its public debt and exit the monetary union.
  • The most significant ramification on the banking system should the financial sector be allowed to decouple from sovereign risks.
  • Whether or not the ESFS will be able to effectively prop up the Italian and Spanish bond markets without IMF or German conditionality.
  • The likelihood of asset sales, credit restrictions and an intensified European credit crunch if banks are left to improve their own capital portfolios.
GLOBAL AUTOMOTIVE OUTLOOK: POST FUKUSHIMA

Economic uncertainty and waning scrappage programs are making the business of forecasting European sales trends difficult.

April figures showed a 2.6 percent increase in new car sales in Germany. However sales fell in all other major markets; with a drop of 23.3 percent in Spain, 11.1 percent in France, 7.4 percent in Britain and 2.2 percent in Italy.

Moreover, the European Commission has warned that financial markets, particularly some sovereign-bond segments, would remain fragile, and damaging negative feedback loops could pose a major risk to the economic outlook.

In addition, the recent political changes in the Middle East and North Africa and the economic fallout of the earthquake and tsunami in Japan have heightened uncertainty. These events constitute downside risks to global economic activity, which could be detrimental to the European recovery

With our Advisor, Elias Luna, Principal at Luna & Goodman Advisors, we’ll discuss:

  • Which manufacturers will be introducing the hot products that consumers are likely to buy despite economic uncertainty?
  • How the market is positioned for its first real dose of Hybrids.
  • How are the Koreans and Japanese expected to fare in Europe?
  • Which of the European manufacturers will excel in China?
  • We’ll also analyze the country by country outlook for sales, market share expectations by manufacturer and the product introductions that will make a difference.
EU PIIGS: CAN THE EURO SURVIVE?

The Eurozone debt crisis is showing every sign of intensifying despite massive IMF and ECB financing to Europe’s periphery. The Greek economy appears to be collapsing, which is seriously undermining its budget performance. At the same time, the new Irish government is struggling to meet its electorate’s demands for a modification of Ireland’s IMF-EU bailout program, while a political vacuum in Portugal is increasing market pressure on the country to seek an IMF-EU bailout package.

Growing electorate resistance to bailout packages in Germany, the Netherlands, and Finland is complicating agreement on a credible and coordinated EU response to the deepening Eurozone debt crisis.

Last week’s resolutions at the EU Summit offered no real solution to the continent’s debt problems. Instead, they are a largely unconvincing attempt to continue building old European castles in the sky, which require both a more tightly knit political union of the continent and the promise of sound budget management.

With our Advisor, Desmond Lachman, Resident Fellow at the American Enterprise Institute for Public Policy Research, we’ll analyze the ramifications of the coming recessions and further bailouts on the common currency and the future of the EU.

CRE SIGNALS: A DATA DICHOTOMY

Recent evidence indicates a strengthening U.S. economy given growing employment figures, declining initial jobless claims, and improving business and consumer confidence.

Some data points even suggest that the fundamentals of the commercial real estate industry are slowly improving and support the view that the industry is moving past the bottom of the cycle.

However, many believe these data points describe only a very specific grouping of properties; that outside this select group there isn’t any improvement.

One thing is certain,  real estate values remain a remarkable 50% off their peak.   To make matters worse, more than $1.3 trillion in bank debt, CMBS and insurance company debt is coming due by 2014.  A total of $350 billion is due in 2017!

Put in perspective, the whole commercial debt market is currently lending about $150 billion per year.

With Arapaho Research Advisor, Steven Marcussen, Executive Director at Cushman & Wakefield,  we’ll analyze the variables that will come into play in answering the critical question:  Will rising rates force a market collapse?

MIDDLE EAST MAYHEM

Oil prices rose to near $105 a barrel in Asia on Thursday, following reports that crude production in Libya has dropped more than estimated, as fresh battles between the forces loyal to Moammar Gadhafi and rebels led to damage of key oil infrastructure in the country.

Make no mistake it is not just Libya that is creating uncertainty about the future.

Since January major changes have occured. Zine el Abidine ben Ali, Tunisia’s long term President was overthrown Jan. 15 after 23 years in power; in Egypt, President Hosni Mubarak steped down on Feb 11 after 30 years in power; in Libya, rebels have seized half the country as Moammar Gadhafi continues to cling to power; in Bahrain, the majority Shiites seek power in the streets from the Sunni king; in Yemen, after 32 years in power, President Ali Abdullah Saleh fights off protesters in the capital, tribes in the hinterland, separatists in the south and religious rebels in the north; in Morocco, Algeria, Jordan and even Saudi Arabia demonstrators march for democracy.

What if the unrest reaches Saudi Arabia and gasoline hits $5 or $10 per gallon? Consider not just of the impact on America and Europe, but of the poorest countries on earth in Africa and Latin America and Asia.

With our Advisor, Mohsin Khan, a senior fellow at the Peterson Institute for International Economics, we’ll discuss the most likely outcomes of the unrest in the Middle East and North Africa and the associated political and economic ramifications.