Men twice as likely to contract the lethal H7N9 bird flu than women: report

Men twice as likely to contract H7N9 than women: report

Staff Reporter, 2013-04-30

Men are twice as likely to contract the deadly H7N9 avian influenza than women, according to Taiwan’s Central Epidemic Command Center. Based on analysis of existing H7N9 cases reported in China, which have risen to 125 as of Sunday, including 23 deaths, the center found that there were twice as many male victims than there were female. In terms of age, those 50 years or older account for 74% of all cases, with patients aged between 30 to 39 following at 11%, and those aged between 40 and 49, accounting for 7%. Patients aged between 20 and 29 account for 5%, while only 3% of victims are under ten years old. Read more of this post

Technology Start-Ups Take Root in Berlin

APRIL 29, 2013, 9:06 PM

Technology Start-Ups Take Root in Berlin


BERLIN — Near the Rosenthaler Platz subway station here, signs of the city’s high-tech future blend seamlessly with its communist past. Decrepit breweries and stables have been converted to communal offices decked out in colorful Ikea furniture. Achingly cool coffee shops with names like Betahaus and St. Oberholz are packed with programmers in their 20s and 30s hunched over shiny new laptops. And even as the city’s unemployment broadly remains high, vintage clothing stores selling patent-leather Dr. Martens boots for 180 euros, or $235, entice technology transplants from across Europe with promotions in English. “I got sucked into Berlin,” said Henrik Berggren, a Swedish college dropout who moved here in 2011 to work on his e-book venture, ReadMill. “It became clear that this was the place to be.”

More than two decades after the fall of the Berlin Wall, the German capital has gone from a cold war relic to one of the fastest-growing start-up communities. Engineers and designers have flooded into Berlin in recent years, attracted by the underground music scene, cutting-edge art galleries, stylish bars and low rent. Read more of this post

How LinkedIn Saved Its Engineers From Marathon Late-Night Coding Sessions

How LinkedIn Saved Its Engineers From Marathon Late-Night Coding Sessions

Max Nisen | Apr. 29, 2013, 8:11 PM | 3,462 | 12

LinkedIn is a favored company among tech investors. It had a massive IPO, lived up to expectations afterwards, and continues to impress with the amount and variety of its revenue sources. That doesn’t mean there haven’t been some bumps along the way. Bloomberg Businessweek’s Ashlee Vance writes that as the company grew, “when LinkedIn would try to add a bunch of new things at once, the site would crumble into a broken mess, requiring engineers to work long into the night and fix the problems.”

Late nights are a part of Silicon Valley’s culture, they’re a right of passage and a bonding activity, but by the fall of 2011, the infrastructure problems were intolerable. So some of LinkedIn’s top engineers decided to completely stop engineering work on new features and dedicate the whole department to fixing the site’s core infrastructure. They called the effort “Project Inversion.”  It took about two whole months. But they ended up with something that was also much more efficient. Now algorithms do much of the review work humans had to do in the past, and new features can be added directly into the site. All of the company’s code is centralized and everyone can work on it continuously. There are fewer late night cram sessions and there’s more time to develop new and innovative features.  Read more of this post

Most Chinese Cities Don’t Need And Can’t Afford The Subway Systems They’re Building: The Economist

Most Chinese Cities Don’t Need And Can’t Afford The Subway Systems They’re Building

The Economist | Apr. 29, 2013, 10:30 AM | 1,604 | 7

NOT many global cities of nearly 9m people lack an underground line, but until the end of last year the eastern city of Hangzhou was one of them. Now city slickers and rural migrants squeeze together inside shiny new carriages, checking their smartphones and reading free newspapers like commuters the world over. There is standing-room only in the rush hour and, with tickets at less than a dollar, the metro is revolutionising the way people travel across town. Two other Chinese cities—Suzhou and Kunming—have also opened their first underground lines in the past year, and the north-eastern city of Harbin is preparing to open one too. Four more cities have just added a new line to their existing systems. At least seven others have begun building their first lines.

If all the metros approved by central officials are built, 38 cities will have at least one line by the end of the decade, with more than 6,200km (3,850 miles) of track (London has nearly 400km.) As with many infrastructure projects in China, including the high-speed rail network above ground, questions abound about the wisdom and potential wastefulness of such ambitions. Many of the underground systems are needed, but some are being built in cities that are too small to justify the exorbitant expense. By some estimates the total bill could approach $1 trillion, not including the cost of operation. Zhao Jian of Beijing Jiaotong University reckons that metros in fewer than 20 of the 38 designated cities make sense. He says that perhaps ten of those could be replaced with cheaper light rail, which runs above ground. The minimum core urban population that can qualify a city for an underground system is 3m people, but even a place that big may find the operating costs crippling. Mr Zhao says the systems in Harbin and Kunming are unnecessary. Read more of this post

Effortless Perfection: Do Chinese Cities Manipulate ‘Blue Skies?’

Effortless Perfection: Do Chinese Cities Manipulate ‘Blue Skies?’

Dalia Ghanem University of California, San Diego (UCSD)

Junjie Zhang University of California, San Diego

April 16, 2013

It is alleged that some Chinese cities manipulate their air pollution data to comply with the air quality standards set by the central government of China. This paper tests this hypothesis by using a unique data set. First, we employ a discontinuity test to detect the cities that reported dubious pollution data around the cutoff for “blue-sky days.” Then, we propose a panel matching approach to identify the conditions under which irregularities may occur. Over the period 2001-2010, 55% of cities reported dubious PM10 pollution levels that led to a discontinuity at the cutoff. Suspicious data reporting tends to occur on days when the potential manipulation is least detectable. Our findings indicate that the official daily air pollution data are not well behaved, which provides suggestive evidence of manipulation.

13 year-old cancer girl from Florida fashions her big dream

Cancer girl fashions her big dream


Tuesday, Apr 30, 2013
The New Paper

At 13, she has already been made a honorary face of CoverGirl, a US cosmetics brand. Talia Joy Castellano also has a video blog on YouTube which has generated about 39 million views so far. Talia is from Orlando, Florida, and despite having terminal cancer, dreams big. She has now achieved another dream – to become a fashion designer. Talia is set to launch a collection for teenagers with Los Angeles-based designer, Urbana Chappa, the Daily Mail reported. Ms Chappa, who runs a women’s wear label called Maison De Urbana, decided to help fulfil Talia’s dream of becoming a fashion designer after hearing the teen’s inspirational story on The Ellen DeGeneres Show last year. She flew to Florida on April 15 to meet her at the Arnold Palmer Hospital for Children in Orlando, to help bring her design ideas to life. They discussed about launching the brand in the coming weeks. Talia said she wanted to “show young teens that they can express themselves with clothes”. Read more of this post

Hong Kong-based Richland Capital is shutting down its hedge funds despite outperforming peers, an unexpected move for a successful operator in an Asian industry which is struggling to raise assets

Hong Kong-based Richland to shut hedge funds in surprise move

Mon, Apr 29 2013

By Nishant Kumar

HONG KONG (Reuters) – Hong Kong-based Richland Capital Management Ltd is shutting down its hedge funds despite outperforming peers, four sources said, an unexpected move for a successful operator in an Asian industry which is struggling to raise assets. Richland is one of Asia’s best-known hedge funds. It manages $100 million between two funds and advises on an additional $150 million for wealthy clients, according to a fund information document obtained by Reuters. The hedge fund, founded in 2006 by former HSBC Holdings Plc (HSBA.L: QuoteProfileResearchStock Buzz) trader Alex Au with Eva Lo, who earlier worked at Credit Suisse Group AG (CSGN.VX: QuoteProfile,ResearchStock Buzz), has made money for its main Richland Asia Absolute Return Fund each year since launch, including a 5.3 percent gain in 2008. An e-mail to Lo and Au remained unanswered. The sources, who have direct knowledge of the matter, declined to be named as they were not authorized to speak on the matter. It was not immediately clear why Richland was closing. Typically, hedge funds shut down in response to poor performance or clients withdrawing large amounts of money, but Richland has suffered from neither. “Today is the day when funds are winding down,” one of the sources said. Launched in December 2006 with $10 million, the Richland Asia Absolute Return Fund managed about $75 million in February this year, the fund document showed. The fund gained 14.1 percent in 2012 and was up about 6 percent in the first quarter of 2013, according to fund performance data seen by Reuters, outperforming a 10 percent gain in the benchmark Eurekahedge Asia index last year and 5.8 percent in the March quarter. The second fund, Richland Emerging Opportunities Fund, returned 13.1 percent last year and was up about 18 percent in the first quarter of 2013. So far, 23 hedge funds have shut down in Asia, compared with 18 launches, according to data from Eurekahedge. Last year, 169 hedge funds closed in Asia, exceeding 139 launches.

CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law

CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law

Former fashion jewelry saleswoman Rebecca Gonzales and former Chief Executive Officer Ron Johnson have one thing in common: J.C. Penney Co. (JCP) no longer employs either. The similarity ends there. Johnson, 54, got a compensation package worth 1,795 times the average wage and benefits of a U.S. department store worker when he was hired in November 2011, according to data compiled by Bloomberg. Gonzales’s hourly wage was $8.30 that year. Across the Standard & Poor’s 500 Index of companies, the average multiple of CEO compensation to that of rank-and-file workers is 204, up 20 percent since 2009, the data show. The numbers are based on industry-specific estimates for worker compensation. Almost three years after Congress ordered public companies to reveal actual CEO-to-worker pay ratios under the Dodd-Frank law, the numbers remain unknown. As the Occupy Wall Street movement and 2012 election made income inequality a social flashpoint, mandatory disclosure of the ratios remained bottled up at the Securities and Exchange Commission, which hasn’t yet drawn up the rules to implement it. Some of America’s biggest companies are lobbying against the requirement.

Read more of this post

Why the China Dream Might Be a Mirage; Will the vested interests getting obscenely rich in Beijing let President Xi rewrite China’s model?

Why the China Dream Might Be a Mirage

If global economists are distraught over the gloomy numbers coming out of China, imagine how Xi Jinping must feel. China’s president, officially in the post for barely a month, is still consolidating his power. At home, he confronts a widening rich-poor gap and endemic pollution, not to mention bird flu and rivers overrun with dead pigs. Abroad, China’s erstwhile ally North Korea is looking increasingly unhinged. Now Xi faces intense pressure to retool the Chinese economy if he wants to build on gains the Communist Party has delivered over the last 30 years. Xi could be excused for feeling a tad bitter. He’s in this awkward position largely because of the failings of his predecessor, Hu Jintao. That may sound like an odd way to characterize Hu’s tenure. During his decade in office, China grew at rates of more than 10 percent, surpassed Japan to become the world’s No. 2 economy and matured into a key diplomatic actor. Hu and his premier, Wen Jiabao, should have used this time to wean the Chinese economy off its obsessive reliance on exports and investment. Yet too many well-placed figures were getting too rich. Modestly paid politicians mysteriously became multimillionaires. Local governments amassed mountains of debt for boondoggle projects. Hu and Wen presided over a robber-baron era that would have made Cornelius Vanderbilt and J.P. Morgan blush.

By contrast, Xi has been saying all the right things about revamping the economy so that domestic demand, not sweatshop labor, drives growth. He talks about the need to attack chronic graft and to preserve the environment. He has made noises about increasing spending on research and development, and has promised to institute a more inclusive urbanization strategy. One of the most tantalizing questions in economics is whether Xi has the courage to oversee such an ambitious rewriting of China’s model. Yet the real question is this: Will the vested interests getting obscenely rich in Beijing let him? Read more of this post

Japan’s “Abenomics” detractors brace for “I told you so” moment

Japan’s “Abenomics” detractors brace for “I told you so” moment

Mon, Apr 29 2013

By Tomasz Janowski and Chikako Mogi

TOKYO (Reuters) – In the shadows of Prime Minister Shinzo Abe’s formidable PR machine, a small, tenacious group of “Abenomics” detractors is battling to be heard and waiting for their “I told you so” moment. Being a contrarian in a society that values consensus and conformity is hard enough, but it is even harder for academics, commentators and investors who are attacking Abe’s economic revival plan as misguided and potentially dangerous. The plan relies so much on changing attitudes formed during years of decline that critical voices are more than just part of the political debate. Criticism could undermine Abe’s efforts and there are many skeptics reluctant to openly challenge policies that are giving Japan long-forgotten optimism and hope.

Read more of this post

New gene therapy trials aim to mend broken hearts

Published: Tuesday April 30, 2013 MYT 8:06:00 AM

New gene therapy trials aim to mend broken hearts

LONDON: British scientists are stepping up clinical tests of gene therapy in a bid to help people with advanced heart failure pump blood more efficiently. Researchers said on Tuesday they planned to enrol patients into two new clinical trials using Mydicar, a gene therapy treatment made by privately held U.S. biotech company Celladon. After more than 20 years of research, the ground-breaking method for fixing faulty genes is starting to deliver, with European authorities approving the first gene therapy for an rare metabolic disease last November. In the case of heart failure, the aim is to insert a gene called SERCA2a directly into heart cells using a modified virus, delivered via a catheter infusion. Lack of SERCA2a leads to ever weaker pumping in people with heart failure. Although drugs offer some relief, there is currently no way of restoring heart function and the prognosis for those with advanced disease is worse than for many cancers. Read more of this post

Online Ads Can Now Follow You Home

April 29, 2013, 8:06 p.m. ET

Online Ads Can Now Follow You Home

Firms Are Helping Brands Like Expedia Serve Ads to Users Across PCs and Mobile Devices


Advertisers already know what people are up to on their personal computers. But understanding their online whereabouts on smartphones or tablets has remained elusive. A number of companies are trying to better pinpoint mobile users’ online activity with new software and techniques they say could help advertisers track users across devices. By harvesting cross-screen identities, the ad industry could serve ads to mobile phones based on the interests people express when surfing the Web on their PCs. “Every retailer is trying to figure out cross-platform activities,” said Jeff Warren, vice president of mobile and online partner marketing at online travel company Expedia Inc.EXPE -4.27%

MK-CC833_mobile_G_20130429180034 Read more of this post

Iris Scans Seen Shrinking $7 Billion Medical Data Breach

Iris Scans Seen Shrinking $7 Billion Medical Data Breach

Iris scanners aren’t just for airport border-control agents and spy movies anymore.

Clinics and hospitals around the world are acquiring technology that identifies people based on physical traits to improve patient safety and stamp out fraud. HCA Holdings Inc. (HCA) hospitals in London, as well as health-care providers across the U.S., are buying so-called biometric technologies.

Biometrics makers, such as Safran SA (SAF), Fujitsu Ltd. (6702) and closely held AOptix Technologies Inc. and M2Sys Technology, say demand from health-care providers is growing. While ensuring the right person gets the right treatment is the main reason for buying biometrics, hospitals and patients see another benefit: reducing the risk of data breaches that can lead to identity theft.

“It’s a form of health-care fraud,” said Pam Dixon, executive director of the World Privacy Forum, a San Diego-based nonprofit research organization. “You can make a lot of money very quickly as a criminal with a low probability of getting caught. It’s a far easier crime to commit than robbing a bank.”

Identify theft is leaving hospitals with unpaid bills and consumers on the hook for costly treatment they didn’t receive. Data breaches, which include lost and stolen information, may cost the health-care industry in the U.S. as much as $7 billion a year, according to a survey conducted by the Ponemon Institute, a Traverse City, Michigan-based organization that studies privacy, data protection and security. Read more of this post

Goldman Sachs Jim O’Neill’s Farewell Letter

Jim O’Neill’s Farewell Letter

Tyler Durden on 04/29/2013 12:03 -0400

Over the years, Jim O’Neill, former Chairman of GSAM, rose to fame for pegging the BRIC acronym (no such luck for the guy who came up with the far more applicable and accurate PIIGS, or STUPIDS, monikers, but that’s neither here nor there). O’Neill was correct in suggesting, about a decade ago, that the rise of the middle class in these countries and their purchasing power would prove to be a major driving force in the world economy. O’Neill was wrong in his conclusion as to what the ultimate driver of said purchasing power would be: as it has become all too clear with the entire world drowning in debt (and recently China), it was simply debt, which moved from the funding developed world consumption to handing out credit cards to consumers in the developing world. O’Neill was horribly wrong after the Great Financial Crisis when he suggested that it would be the BRIC nation that would push the world out of depression. To the contrary, not only is the world not out of depression as the fourth consecutive year of deteriorating economic data confirms (long since disconnected with the actual capital markets), but it is the wanton money (and bad debt) creation by the central banks of the developed world (as every instance of easing by China has led to an immediate surge of inflation in the domestic market) that has so far allowed the day of reckoning, and waterfall debt liquidations, to take place (and certainly don’t look at the stock index performance of China, Brazil, India or Russia). Despite his errors, he has been a good chap having taken much of the abuse piled upon him here at Zero Hedge somewhat stoically, as well as a fervent ManU supporter, certainly at least somewhat of a redeeming quality. Attached please find his final, farewell letter as Chairman of the Goldman Asset Management division, as he moves on to less tentacular pastures.

From Jim O’Neill

The World.

For my last Viewpoint, I have chosen to focus on the world. Attached is the opening presentation I gave at the 2013 GSAM Growth Markets Summit last Thursday in New York. It was a brilliant event and I wanted to thank all our guests who joined us as speakers, panellists, and in particular our clients who attended. The main theme was the growth that has taken place in the evolving world and the challenges that go with it.

New Book on Buffett: “The Oracle & Omaha: How Warren Buffett and His Hometown Shaped Each Other”

The Oracle & Omaha: How Warren Buffett and his hometown shaped each other

Warren Buffett, “The Oracle of Omaha,” often speaks fondly of his hometown. The city provided him a comfortable home base, away from Wall Street’s distractions. In return, Omaha benefited from the worldwide attention that came his way and from the generosity of his early investors. It turned out to be a profitable relationship for both The Oracle & Omaha.



Buffett’s decision to hire two investment lieutenants is paying off for Berkshire Hathaway, and it’s paying off for the two younger money managers, too.



Investors earn handsome paychecks by handling Buffett’s business

By Steve Jordon

Warren Buffett’s decision to hire two investment lieutenants is paying off for Berkshire Hathaway, and it’s paying off for the two younger money managers, too. Todd Combs, 42, and Ted Weschler, 51, are expected to receive bonuses exceeding $50 million each based on their investment results in 2012, evidence that they and Buffett made the right choices when they connected. Weschler and Combs had admired Buffett long before meeting him, and both actively sought connections that led to their hiring.  Read more of this post

Obama spends more time playing golf and on holiday (976 hours) than on the economy (474 hours) since his Jan 2009 elections: Government Accountability Institute Report

Obama spends more time playing golf than on the economy: Report

LONDON — In an analysis of the presidential diary and newspaper reports, the Government Accountability Institute found that United States President Barack Obama has spent 976 hours since his January 2009 election on holiday and playing golf.



LONDON — In an analysis of the presidential diary and newspaper reports, the Government Accountability Institute found that United States President Barack Obama has spent 976 hours since his January 2009 election on holiday and playing golf. In contrast, he has only spent 474.4 hours in economic meetings. “As a government watchdog group, we just tabulate the numbers and let others decide how to interpret them,” said Mr Peter Schweizer, president of GAI, which compiled the report. “People understand that presidents have the most stressful job in the world and need a break from time to time. There will be some who will be encouraged by the numbers and some who will wish the president spent more time in economic meetings.” The American news website Breitbart claimed that the survey may have underestimated Mr Obama’s time devoted to recreation. GAI calculated a round of golf as taking four hours, but Breitbart pointed out that Mr Obama said last year that playing golf is “the only time that for six hours, I’m outside”. “Like most people, presidents still do work while on vacation,” said Mr Schweizer. “So we really went out of our way to fairly and accurately reflect how the president spends his time.” Breitbart also said that the analysts had been generous when calculating how much time Mr Obama spent in economic meetings. Anything on the White House calendar even remotely connected to economics, such as “Obama meets with Cabinet Secretaries” or “Obama has lunch with four CEOs” counted as an economic meeting. The president said in 2011 that the economy was his main priority, reported The Daily Telegraph. “You should know that keeping the economy growing and making sure jobs are available is the first thing I think about when I wake up every morning,” he told an audience of UPS workers. “It’s the last thing I think about when I go to bed each night.” But the GAI report showed that the amount of time spent on the economy has fallen significantly in the years since his 2009 election. In 2009, Mr Obama spent 187.2 hours in economic meetings. A year later that number dropped to 127.8 hours. In 2011 the total fell to 73 hours. By the end of 2012, the president had spent 100 fewer hours on finance than in his first year in office, with a total of 80.4 hours devoted to the economy. AGENCIES

Trillion-Dollar Student Loan Bubble Cracks With Pulled Sallie Mae Bond Deal

Student Loan Bubble Cracks With Pulled Sallie Mae Bond Deal

Tyler Durden on 04/29/2013 08:19 -0400


In 2007 a small number of French hedge funds imploded over sudden losses stemming from highly leveraged bets made on the unstoppable subprime mortgage market. At the time, a few saw the writing on the wall; but many simply wrote it off as just another over-levered hedge fund and the subprime mortgage market was ‘fine’. Fast forward six years and as we have discussed numerous times (most recently here and here) there is a bubble, potentially far bigger than subprime, in student loan debt. As one of the last remaining outlets for state-sanction credit creation, this is a big deal; but, of course, the popping of the bubble (or even a slight leak) is eschewed since there is so much ‘reach for yield’ and the Fed’s got your back. That is until this week. As WSJ reportsSallie Mae (SLM), the nation’s largest non-government student lender just cancelled a $225 million debt offering as investors  decided they simply were not getting paid enough for risk – amid rising student loan defaultsSimply put, there’s a limit to what investors will tolerate. SLM was offering a stunningly low 3.5% interest on the deal and investors snubbed it, “There are certain limits that can’t, or shouldn’t, be crossed if you’re an investor,” adding that, “we’re beginning to see what the tolerances are.” This is a significant shift since SLM and other issuers of debt backed by student loans sold $7.8 billion worth of securities this year through last week, up from $5.7 billion in the same period of 2012. With the portion of student borrowers who are late on their debt payments by 90 days or more climbing to 31% in 2012, from 24% in 2008; we wonder if this is the tipping point for the student debt in 2013 that was generally ignored in subprime in 2007, until it was too late.

Updated April 25, 2013, 7:23 p.m. ET

Investors Say No to Sallie Mae Bond Deal

Poor Demand for Security Backed Only by Excess Cash Flows Shows Limits to Appetite for Risk


There’s a limit to how much risk investors will tolerate.

Student-loan company Sallie Mae SLM +0.24% canceled a $225 million bond offering on Thursday after about two weeks on the market, according to people familiar with the deal. The move may mark a line in the sand: Investors whose thirst for yield has revived all manner of riskier asset classes decided they weren’t getting paid enough to buy at the offered price amid rising student-loan defaults. Read more of this post

The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors’ Reaction

The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors’ Reaction

Benjamin Segal INSEAD – Accounting & Control Area

Dan Segal Interdisciplinary Center (IDC) Herzliyah; Singapore Management University – School of Accountancy

April 23, 2013
INSEAD Working Paper No. 2013/54/AC

Using a comprehensive sample of non-earnings 8-K filings from 1996 to 2011, we examine whether firms engage in opportunistic reporting of mandatory and voluntary news. We find strong evidence of opportunistic reporting of negative news, especially among public firms. Public firms are more likely to delay disclosure of negative news, report negative news after trading hours, and report on the last day of the week. We also find evidence of opportunistic bundling of news. Our findings support the notion that managers engage in strategic disclosure by delaying or obfuscating negative news in order to mitigate the potential market reaction. Factors such as the risk of litigation, information asymmetry, and corporate governance influence reporting behavior. Further analysis of the market reaction to opportunistic disclosure uncovers no evidence of investor inattention or under-reaction.

How Entrepreneurs Come Up With Great Ideas: There is no magic formula. But that doesn’t mean there’s no formula at all.

April 29, 2013

How Entrepreneurs Come Up With Great Ideas

There is no magic formula. But that doesn’t mean there’s no formula at all.


At the heart of any successful business is a great idea. Some seem so simple we wonder why nobody thought of them before. Others are so revolutionary we wonder how anybody could’ve thought of them at all. But those great ideas don’t come on command. And that leaves lots of would-be entrepreneurs asking the same question: How did everybody else get inspiration to strike—and how can we work the same magic? To find out, we turned to the experts—investors, advisers and professors who have seen and heard countless success stories, as well as entrepreneurs who have written success stories of their own. They saw inspiration coming from all sorts of sources—everyday puzzles, driving passions and the subconscious mind. Here’s what they had to say. Read more of this post

P&G has a higher PE than Google as investors drive up the shares of dividend-paying companies, fueling a debate over whether these haven stocks are getting dangerously expensive

Updated April 28, 2013, 4:42 p.m. ET

In Stocks, Payouts Trump Potential



Analysts expect paper-towel, toothpaste and soap maker Procter & GamblePG +0.68% to churn out per-share earnings growth of about 6% this year. Google‘sGOOG -0.95% profits will jump 18%, other analysts predict. So which stock is hotter? The answer: P&G, trading at 18 times projected per-share earnings and far above its five-year average of 15.4, according to data provider FactSet. In contrast, Google has a P/E ratio of 16.6, below its five-year average of 17.2. Investors are attracted by P&G’s sturdy dividend yield of 3.1%, assuring them at least a modest return on a stock known for its reliable performance. Google pays no dividend.

Investors searching for higher yields are driving up the shares of dividend-paying companies, fueling a debate over whether these traditional haven stocks are getting dangerously expensive. Some buyers argue that dividend stocks have entered a period where demand for income will keep valuations high, perhaps for years, thanks to Federal Reserve easy-money policies that are expected to remain in place at least into 2015. Skeptics say the “this time is different” thesis will prove wrong, and that investors will discover they have overpaid. Read more of this post

Economies Of Scale As A Service; ARM has 2300 employees, but there are>35 billion ARM-based chips; What happens is that moats dry up, and are bridged, and previously impregnable incumbents start looking very vulnerable

Economies Of Scale As A Service


posted yesterday

Credit where it’s definitely due: this post was inspired by a Twitter conversation with Box CEOAaron Levie.

Don’t look now, but something remarkable is happening. Instagram had twelve employees when it was purchased for $700 million; all of its actual computing power was outsourced to Amazon Web Services. Mighty ARM has only 2300 employees, but there are more than 35 billion ARM-based chips out there. They do no manufacturing; instead they license their designs to companies like Apple, who in turn contract withcompanies like TSMC for the actual fabrication. Nest Labs and Ubiquiti are both 200-employee hardware companies worth circa $1 billion…who subcontract their actual manufacturing out to China. Warren Buffett has long advocated investing in businesses with “moats” around their business model. Often that moat is an economy of scale; the notion that a hundred widgets cost a dollar each but a million widgets only a dime apiece. Read more of this post

Switzerland Shorn of Bankers Proves Industrial Juggernaut; “Switzerland is like a Silicon Valley for the manufacturing industry. It would be a mistake to move to a pure service economy.”

Switzerland Shorn of Bankers Proves Industrial Juggernaut

Behind the headline-grabbing job reductions at Switzerland’s biggest banks is a manufacturing boom that is keeping the economy ahead of the rest of Europe.

Even after 10,000 Swiss job losses at banks led by UBS AG (UBSN) and Credit Suisse Group AG (CSGN) in the past five years, the nation’s unemployment rate has fallen to 3.1 percent, the lowest of Europe’s 10 biggest economies and less than the rate a decade ago. The nation of 8 million is adding workers in factories that make electrical equipment, airline seating, toilets and drugs.

“People think that precision engineering, watchmaking and the medical industry are minor, but collectively added up, they are quite sizeable in Switzerland,” said Hubertus Von Gruenberg, chairman of Zurich-based ABB Ltd. (ABBN), the world’s largest maker of power transformers. Banks are “overemphasized” in the public perception as there’s a big finance industry relative to the size of the country, he said, adding that the industrial base is “powerful and important.”

Banks and insurers had 152,000 full-time employees last year, compared with 588,000 who work for industrial companies. The banking industry’s share of domestic economic output fell to 6.2 percent in 2011 from 8.7 percent in 2007, according to the most recent data from the Swiss Bankers Association.

“Switzerland is like a Silicon Valley for the manufacturing industry,” said Markus Koch, a partner at Deloitte AG in Zurich. Given the higher cost base, no Swiss manufacturer would survive if it’s not world leading or top quality, he said. Read more of this post

GM’s China Bet Mimics Toyota’s Bet on U.S. Last Century

GM’s China Bet Mimics Toyota’s Bet on U.S. Last Century

General Motors Co. (GM), the largest carmaker in the U.S., is shifting its center of gravity to China, where it sells more cars and now invests more money. GM’s announcement at the Shanghai auto show this month that it is spending $11 billion by 2016 on new plants, products and people in China demonstrates a change in priorities. GM is investing $1.5 billion in North America this year, where it has a more modest factory footprint. GM’s focus on China parallels the strategy Toyota Motor Corp. (7203) employed in the last century, when the Japanese automaker poured investment in the U.S. market, where it saw its greatest growth potential. Now, Detroit-based GM is taking the lead in the world’s largest auto market by building four new assembly plants in China to boost its factory capacity to 5 million vehicles annually, twice what it sold in the U.S. last year.

“This is what the Japanese did in the ’70s when the U.S. became their most important market,” said Rebecca Lindland, an automotive consultant with Rebel Three Media & Consultants in Cos Cob, Connecticut. “What GM is doing is really smart because it’s proactively investing in a market that, for the foreseeable future, is going to be the world’s largest.” GM rose to a 52-week high of $30.71 last week. It fell 0.7 percent April 26 to $30.50. It has gained 5.8 percent so far this year compared with an 11 percent increase in the Standard & Poor’s 500 Index. The company will announce quarterly results later this week. Read more of this post

China’s Military Says No Plates for Porsches in Corruption Crackdown

China’s Military Says No Plates for Porsches in Crackdown

China will ban the use of military number plates on luxury cars, including Porsche and Bentley, in a crackdown on abuse of vehicle management within the armed forces amid President Xi Jinping’s campaign against corruption.

The change was ordered by the Central Military Commission, headed by Xi, and is part of the military’s effort to reinforce discipline and protect its image, the PLA Daily, the armed forces’ official newspaper, said in a report yesterday.

A new license system will go into force on May 1 to clamp down on the sale and use of legal and counterfeit military plates in order to “maintain social harmony, stability and the reputation of the military,” the paper said. Existing plates for all military vehicles will be canceled, it said.

The use of military license plates on luxury cars “is at odds with our army’s glorious tradition and not conducive to building the military’s morals,” according to a commentary in the newspaper. Vehicle management is “a political task to maintain forever the nature, principle and true color of the armed forces,” it said. Read more of this post

Highest-Paid Workers Driving Shell Off Australian Shores

Highest-Paid Workers Driving Shell Off Australian Shores

Escalating costs to build liquefied natural gas plants on land in Australia, where energy workers earn the highest salaries in the world, are driving developers out to sea in search of billions of dollars in savings.

Exxon Mobil Corp. (XOM) plans to use the world’s largest ship to turn gas into liquid at an offshore field, eliminating the need for investment in pipelines and port facilities. Woodside Petroleum Ltd. (WPL) is studying sea-based technology since ditching plans this month for an onshore plant for its Browse project.

After starting work on $180 billion in LNG terminals on land, developers are considering about $85 billion in floating projects to keep Australia competitive with suppliers in North America and East Africa. The floating export terminals will be built in Asian shipyards where labor costs are lower, including South Korea, the world’s biggest shipbuilder after China. Read more of this post

“Indonesia was a hot market about seven to eight years ago. But the time of the low-hanging fruits is over. The whole environment has become too frothy.”

Symphony Shies From Frothy Prices in Indonesia: Southeast Asia

Symphony International Holdings Ltd. (SIHL) said it’s seeking private-equity deals in markets including Malaysia and Thailand as assets in Indonesia, where it has invested for more than two decades, have become overvalued. An increasing number of buyout firms seeking companies that serve the growing middle class in the world’s fourth-most populous nation has pushed prices of privately-owned businesses higher, Anil Thadani, director at Symphony, an Asia-Pacific private-equity firm founded in 1981. “Indonesia was a hot market about seven to eight years ago,” Thadani, who is chairman of Symphony’s investment manager, said in an interview on April 26. “But the time of the low-hanging fruits is over. The whole environment has become too frothy.” Buyout firms are counting on rising domestic consumption in Southeast Asia’s biggest economy to boost returns as a slowdown in global growth has weakened prices of commodities such as coal and palm oil. Private spending accounts for more than 60 percent of the economy, according to government data. “We invested in Indonesia in the ’80s, and we did very well,‘‘ said Thadani, 66. ‘‘So over the last couple of years, we stayed away as we always do when we see herd behavior. Private equity is a lot about buying at the right price. And at the moment, the price isn’t right in that country.’’ Read more of this post

Billionaires Flee Havens as Trillions Pursued Offshore

Billionaires Flee Havens as Trillions Pursued Offshore

Billionaire Dmitry Rybolovlev, Russia’s 14th-richest person, and his wife, Elena Rybolovleva, have been brawling for almost five years in at least seven countries over his $9.5 billion fortune. In a divorce complaint originated in Geneva in 2008, Rybolovleva accused her husband of using a “multitude of third- parties” to create a network of offshore holding companies and trusts to place assets — including about $500 million in art, $36 million in jewelry and an $80 million yacht — beyond her reach. She has brought legal action against the 48-year-old Rybolovlev in the British Virgin Islands, England, Wales, the U.S., Cyprus, Singapore and Switzerland, and is seeking $6 billion.

The suits provide a window into the offshore structures and secrecy jurisdictions the world’s richest people use to manage, preserve and conceal their assets. According to Tax Justice Network, a U.K.-based organization that campaigns for transparency in the financial system, wealthy individuals were hiding as much as $32 trillion offshore at the end of 2010. Fewer than 100,000 people own $9.8 trillion of offshore assets, according to research compiled by former McKinsey & Co. economist James Henry.

“For a lot of people, it’s not just the objective of not paying taxes,” Philip Marcovici, an independent Hong Kong-based tax lawyer and board member of Vaduz, Liechtenstein-based wealth adviser Kaiser Partner Group, said in a telephone interview. “It’s the objective of obtaining the human right to privacy and seeking confidentiality about their financial affairs.” Read more of this post

Roboticists developed a robot arm that moves and finds objects by touch, a vital ability if robots are ever to begin to undertake tasks in human environments

April 28, 2013

Researchers Put Sense of Touch in Reach for Robots


Finding and recognizing objects by touch in your pocket, in the dark or among items on a cluttered table top are distinctly human skills — ones that have been far beyond the ability of even the most dexterous robotic arms. Rodney Brooks, a well-known roboticist, likes to demonstrate the difficulty of the challenge for modern robots by reaching into his pocket to find a particular coin. Now a group of roboticists in the Department of Biomedical Engineering at the Georgia Institute of Technology in Atlanta, led by one of Dr. Brooks’s former students, has developed a robot arm that moves and finds objects by touch. In a paper published this month in the International Journal of Robotics Research, the Georgia Tech group described a robot arm that was able to reach into a cluttered environment and use “touch,” along with computer vision, to complete exacting tasks. This ability is vital if robots are to leave the world of factory automation and begin to undertake tasks in human environments, like patient and elder care or rescue missions during emergencies. Read more of this post

Venture Capitalists Are Making Bigger Bets on Food Start-Ups

April 28, 2013

Venture Capitalists Are Making Bigger Bets on Food Start-Ups


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Unreal, a candy company based in Boston, says it uses 25 percent less sugar than other candy on the market.

What if the next big thing in tech does not arrive on your smartphone or in the cloud? What if it lands on your plate? That idea is enticing a wide group of venture capitalists in Silicon Valley into making big bets on food. In some cases, the goal is to connect restaurants with food purveyors, or to create on-demand delivery services from local farms, or ready-to-cook dinner kits. In others, the goal is to invent new foods, like creating cheese, meat and egg substitutes from plants. Since this is Silicon Valley money, though, the ultimate goal is often nothing short of grand: transforming the food industry.

“Part of the reason you’re seeing all these V.C.’s get interested in this is the food industry is not only is it massive, but like the energy industry, it is terribly broken in terms of its impact on the environment, health, animals,” said Josh Tetrick, founder and chief executive of Hampton Creek Foods, a start-up making egg alternatives. Some investors say food-related start-ups fit into their sustainability portfolios, alongside solar energy or electric cars, because they aim to reduce the toll on the environment of producing animal products. For others, they fit alongside health investments like fitness devices and heart rate monitoring apps. Still others are eager to tackle a real-world problem, instead of building virtual farming games or figuring out ways to get people to click on ads. Read more of this post

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