Foreign Reports

Foreign Reports was founded in 1956 by Harry Kern, who had previously been foreign editor of Newsweek, in which capacity he traveled extensively throughout the world, but especially in the Far and Middle East.

Newsweek and Time during that period were practically the sole elements of the U.S. news media reporting on world activities in a timely fashion. As foreign editor, Harry Kern also was editor-in-chief of the magazine's International Edition and thus had the privilege of picking who or what would adorn the cover of those editions. Since various foreign leaders, or aspiring ones, angled to get their pictures on the front of Newsweek, Kern was a popular visitor in many foreign capitals. In the process, he managed to befriend both current and future leaders and to gain insights into how their policies were developed.

Foreign Reports grew out of these unique circumstances, as Kern saw a need among growing multinational companies with sizable stakes around the world for a level of international political reporting that surpassed what was then being carried in the daily newspapers of the period. From Newsweek, he brought with him to Foreign Reports two bureau chiefs, one in Beirut and one in Tokyo. From these "bureaus" of Foreign Reports came a steady stream of insightful reporting on the regions they covered. Among its initial major subscribers were the world's major oil companies, but also other industrial and banking concerns.

By the early 1980s, the nature of the world oil business began to change in a number of different ways, all of which affected how Foreign Reports would be able to continue to provide services to its client base. The major international oil companies were gradually losing their equity ownership of Middle East oil production and many needed to forge different kinds of relationships with producing governments. In addition, a new class of players in the oil market was gradually emerging as interest and liquidity grew in the futures market. World oil prices had been practically a secret in the early days of Foreign Reports and had been remarkably stable in general during the firm's first 16 years, but it would be another ten years before price volatility would become a major reason for the firm to develop another service for its clients.

OPEC did not institute its first quotas until 1982, just as crude oil prices were beginning to come under downward pressure in the market. When prices did eventually start to crash in late November 1985, no other reporting service in the industry had so closely chronicled how that crash would materialize as Foreign Reports had done. The firm had watched intensely how then Saudi Petroleum Minister Ahmed Zaki Yamani had wrestled over new ways to price Saudi Arabia's oil as he cruised the Mediterranean on his yacht during August 1985. Foreign Reports was the first to report that Yamani, just before that Labor Day, had got off his yacht and signed "net-back pricing deals" with his main international customers. These deals that would cut all previous supports for crude oil prices and lead prices from the high $20s to the single digits within nine months. Incredibly, in those early days of the NYMEX, futures prices did not start to decline until the day after Thanksgiving.

As the pace and sophistication of NYMEX trading has accelerated greatly since those days, and as access to the incredible amounts of information over the internet has exploded, the services that Foreign Reports has offered have also changed, while still staying with time-tested methods: follow the narrative; know the actors; know their characters; understand the rules; understand cultures and histories; pay ever increasing attention to separating the wheat from the chaff in an information-laden age; and communicate concisely and clearly.