Can You Get a Refund From a Bad Hedge Fund?

April 26, 2013, 5:08 p.m. ET

Can You Get a Refund From a Bad Hedge Fund?

By JASON ZWEIG

Disgruntled hedge-fund investors might be able to make new use of an old technique to erase some of their losses. Earlier this month, David Blass, chief counsel of the division of trading and markets at the Securities and Exchange Commission, gave a speech before an investment-law group in which he warned that many “private funds”—hedge funds, private-equity portfolios and the like—might be breaking the law when they sell to investors. Mr. Blass’s message wasn’t entirely new. Unless they can meet a series of tests to be exempt, private-fund managers have long been required to register as broker-dealers if they solicit outside investors by selling interests in their funds. Registering compels them to follow SEC rules on how they sell their wares. But Mr. Blass’s speech also threw a fresh spotlight on the question of whether the hedge-fund industry has been following the law. And it reminded alert investors of an unusual—but rare and difficult—way to bail out of a rotten fund.

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The Criminal Mind: Advances in genetics and neuroscience are revolutionizing our understanding of violent behavior—as well as ideas about how to prevent and punish crime

April 26, 2013, 7:28 p.m. ET

The Criminal Mind

Advances in genetics and neuroscience are revolutionizing our understanding of violent behavior—as well as ideas about how to prevent and punish crime.

By ADRIAN RAINE

Donta Page’s brain scan, left, shows the reduced functioning of the ventral prefrontal cortex—the area of the brain that helps regulate emotions and control impulses—compared to a normal brain, right.

In studying brain scans of criminals, researchers are discovering tell-tale signs of violent tendencies. WSJ’s Jason Bellini speaks with Professor Adrian Raine about his latest discoveries. The scientific study of crime got its start on a cold, gray November morning in 1871, on the east coast of Italy. Cesare Lombroso, a psychiatrist and prison doctor at an asylum for the criminally insane, was performing a routine autopsy on an infamous Calabrian brigand named Giuseppe Villella. Lombroso found an unusual indentation at the base of Villella’s skull. From this singular observation, he would go on to become the founding father of modern criminology. Lombroso’s controversial theory had two key points: that crime originated in large measure from deformities of the brain and that criminals were an evolutionary throwback to more primitive species. Criminals, he believed, could be identified on the basis of physical characteristics, such as a large jaw and a sloping forehead. Based on his measurements of such traits, Lombroso created an evolutionary hierarchy, with Northern Italians and Jews at the top and Southern Italians (like Villella), along with Bolivians and Peruvians, at the bottom. These beliefs, based partly on pseudoscientific phrenological theories about the shape and size of the human head, flourished throughout Europe in the late 19th and early 20th centuries. Lombroso was Jewish and a celebrated intellectual in his day, but the theory he spawned turned out to be socially and scientifically disastrous, not least by encouraging early-20th-century ideas about which human beings were and were not fit to reproduce—or to live at all. Read more of this post

Bee venom has become the buzziest antiaging ingredient. The ingredient appears in a number of high-end beauty products from Guerlain to Manuka Doctor; “Your brain thinks that [you’ve been] bitten and it sends back a signal that the skin needs to heal itself”

April 26, 2013, 2:50 p.m. ET

Here’s the Sting

Bee venom has become the most buzzed-about antiaging ingredient

By ELIZABETH HOLMES

The toxic ingredient appears in a growing number of high-end anti-aging serums, masks and moisturizers from various companies. Manuka Doctor, a line from New Zealand, boasts a purifying process that removes extraneous elements such as pollen dust or bee bits. The U.K. brand Heaven Skincare claims to use a secret ingredient that activates the bee venom.

The key ingredient is said to improve skin by setting off an elaborate chain reaction. “Your brain thinks that [you’ve been] bitten and it sends back a signal that the skin needs to heal itself,” said Maria Hatzistefanis, founder of Rodial, a London-based skin care line known for its use of exotic ingredients, which recently debuted bee venom products. Once this brain signal has been sent, as the theory goes, blood rushes to the area, triggering an increase in the production of wrinkle-smoothing collagen. Deborah Mitchell, maker of Heaven, describes venom products as a topical, natural alternative to Botox. “Straight away, the skin tightens and firms,” she said, noting that many users report a slight tingling—a sign the product is working. Read more of this post

Instant noodle sales top 100 billion units a year

Instant noodle sales top 100 billion units a year

“The results show that instant noodles have become a global standard dish,” said Norio Sakurai, an official with the Osaka-based association. -AFP
Fri, Apr 26, 2013, AFP

Tokyo – Global sales of instant noodles have topped 100 billion units annually, an industry group said Friday – more than one monthly serving of the portable meal for every person on the planet. Five decades after the easy-to-cook food’s launch, sales climbed again last year with China, Indonesia and Japan rounding out the world’s top-three consumers, according to the Japan-based World Instant Noodles Association. “The results show that instant noodles have become a global standard dish,” said Norio Sakurai, an official with the Osaka-based association. “We think global sales will continue growing particularly in some developing nations.” Of the 101.4 billion units sold worldwide last year, China, including Hong Kong, accounted for 44.0 billion servings, followed by Indonesia with 14.1 billion units, Japan at 5.4 billion units and Vietnam close behind with 5.1 billion units. Instant noodles, which come dried or pre-cooked and can be boiled quickly with accompanying flavour packets, were invented in Japan by Momofuku Ando, founder of major noodle maker Nissin Foods, in 1958.

Weak yen puts POSCO, Hyundai out on limb

2013-04-26 17:01

Weak yen puts POSCO, Hyundai out on limb

Korean automobile, steel and electronics manufacturers are singing the blues due to falling margins from exports, caused by the yen’s weakness, while Japanese rivals are seeing an uptick in global sales

By Na Jeong-ju

South Korean firms are suffering heavy setbacks in global markets due to the weakening yen, while their Japanese rivals are rebounding strongly on their price competitiveness. Hardest hit are Korean automobile, steel and electronics manufacturers that compete neck-and-neck with Japanese firms in major markets around the world. The yen’s weakness has cut the earnings of Korean exporters. Hyundai Motor, the country’s largest automaker, said its first-quarter net profit dropped 14.9 percent from a year to 2.08 trillion won ($1.8 billion), compared with 2.4 trillion won a year earlier. In the January-March period, sales rose 6 percent on-year to 21.3 trillion won, but operating profit dropped 10.7 percent to 1.8 trillion won. “We earlier predicted the yen-dollar rate would move between 86 to 87 yen in the first quarter, but the average rate was 94 yen. That negatively affected our profitability,” an executive of Hyundai Motor said. Hyundai Motor, which competes with Toyota, Honda and other Japanese carmakers, could lose its competitive edge for some time as the yen’s weakness is expected to continue for the time being. Kia Motors, the second-largest automaker affiliated with Hyundai Motor, also announced its first-quarter net profit fell 34.7 percent from a year earlier to 783.9 billion won during the same period. Its operating profit dropped 35.1 percent to 704.2 billion won, as sales fell 6 percent to 11.08 trillion won. POSCO, the country’s leading steelmaker, also suffered damage. Its first-quarter net profit sank 54 percent from a year earlier to 292 billion won. Sales dipped 10.6 percent on-year to 14.58 trillion won, and operating income also dropped 4.7 percent to 717 billion won. The poor performances by Korean exporters are in stark contrast to a strong recovery of Japanese firms. Read more of this post

Beyond Korean style: Shaping a new growth formula; Reduce housing payments + End the education “arms race.” + Create an entrepreneurial SME sector

Beyond Korean style: Shaping a new growth formula

April 2013 | byWonsik Choi, Richard Dobbs, Dongrok Suh, Jan Mischke, Eunjo Chon, Hangjip Cho, Boyoung Kim, and Hyunmin Kim

Beginning in the 1960s, South Korea has set economic-development records with a growth formula that focused on heavy-industry and manufactured exports. GDP has tripled in just the past 20 years, and South Korea became the first nation to go from being a recipient of aid from the Organisation for Economic Co-operation and Development to being a member of its donor committee. South Korea is the leading supplier of LCD screens, memory chips, and mobile phones and is the world’s number-five automaker. Yet the nation’s GDP growth is increasingly decoupled from the lives of its middle- income citizens. The number of middle-income households—earning 50 to 150 percent of median income—has fallen from 75.4 percent of the population to 67.5 percent since 1990, and more than half of middle-income households are cashflow constrained when the full costs of housing payments are counted. The squeeze contributes to trends that could affect future growth, including a plummeting personal-saving rate and one of the world’s lowest fertility rates. Beyond Korean style: Shaping a new growth formula, a new report from the McKinsey Global Institute (MGI), explores the causes of these economic challenges and makes specific recommendations for combatting them. Among the report’s findings: Read more of this post

Changing times force Taiwan to raise welfare spending

24 April 2013 Last updated at 21:05 GMT

Changing times force Taiwan to raise welfare spending

By Cindy SuiBBC News, Taipei

Working six days a week at a Taipei noodle stall, Hsu Ching-ni earns only $500 a month, not nearly enough to support her family of seven including three children, or even pay rent.

Instead, they have to survive on welfare. “I’m the only one in my family working. My husband suffered a stroke and can’t work. My parents-in-law are elderly. If it weren’t for the welfare, I don’t know where we’d be,” says Ms Hsu. The number of people like her in Taiwan is on the rise. But whereas in previous decades residents mostly depended on themselves, the government has been forced to restructure its social welfare system to help them. Read more of this post

The Rise of the ‘Aztec Tiger’: Under a charismatic new leader, Mexico is roaring toward a turnaround

April 26, 2013, 7:33 p.m. ET

The Rise of the ‘Aztec Tiger’

Under a charismatic new leader, Mexico is roaring toward a turnaround

By NICOLAS BERGGRUEN and NATHAN GARDELS

Two decades ago, one of Mexico’s leading social critics proclaimed Los Angeles “the heart of the Mexican dream.” Pedro P. agreed, leaving behind his native Oaxaca for work as a gardener in the city’s San Fernando Valley. After 14 years as an undocumented immigrant, however, Pedro, age 44, is heading home at the end of April, drawn by an economic resurgence south of the border that has led some observers to label Mexico the “Aztec tiger.” Read more of this post

China Top Leaders Warn on Financial Risks as Rebound Falters as PSC, China’s top decision-making group, held a special economy-focused session, the first time since 2004

Chinese leaders more worried about financial risks than slower growth

Kate Mackenzie

| Apr 26 07:59 | 14 comments | Share

China’s Politburo Standing Committee, the country’s top decision-making group, held a special session yesterday to discuss the economy — apparently the first time they’ve held this sort of economy-focused meeting since 2004, according to Xu Gao at China Everbright Securities (via Bloomberg).

So what came out of it? It’s always hard to tell, but it probably wasn’t good news for anyone hoping for big stimulus measures.

The official Xinhua report is here and its headline suggests some worry at the economic growth rate. “China needs to cement its domestic economic growth momentum and guard against potential risks in financial sectors,” seems to be the key line, from the third paragraph, although it goes on to point out that Q1′s 7.7 per cent growth that had many China watchers worried was in fact higher than the 7.5 per cent official target. Read more of this post

Japan casino lobby in legalization push; market could out-strip Vegas

Japan casino lobby in legalization push; market could out-strip Vegas

7:14am EDT

By Nathan Layne and Farah Master

TOKYO/HONG KONG (Reuters) – After Singapore, Japan?

A pro-casino group of Japanese lawmakers has tapped an influential member of the ruling Liberal Democratic Party (LDP) as its leader and plans to submit legislation this year aimed at opening the world’s third-largest economy to casino gambling. Although casinos are illegal, Japanese are already active gamblers, and a pinball-like game called pachinko generates some $200 billion in revenue each year – about the same as Toyota Motor Corp. Japan is often touted as the next major casino market after Chinese enclave Macau, the world’s biggest gambling hub, which raked in revenue of $38 billion last year.

A large and wealthy population coupled with a proximity to Shanghai and Beijing has the potential to transform Japan into a lucrative gaming center, providing tax revenues to shore up the state’s ailing finances, analysts say. Broker CLSA estimates Japan’s gaming market could be worth at least $10 billion if two large-scale integrated resorts are approved – more than Singapore’s $5.9 billion and Las Vegas’ $6.2 billion in 2012. Read more of this post

Perverse advantage; A new book lays out the scale of China’s industrial subsidies

Perverse advantage; A new book lays out the scale of China’s industrial subsidies

Apr 27th 2013 | Shanghai |From the print edition

CHINA is the workshop to the world. It is the global economy’s most formidable exporter and its largest manufacturer. The explanations for its success range from a seemingly endless supply of cheap labour to an artificially undervalued currency. A provocative new book* by Usha and George Haley, of West Virginia University and the University of New Haven respectively, points to another reason for China’s industrial dominance: subsidies.

The Chinese government does not report all subsidies made to domestic industrial firms, so the Haleys plugged the holes with information from industry analysts, policy documents, non-governmental outfits and companies themselves. By looking at the gaps between end-user prices and benchmark prices, they have cobbled together numbers on many of the subsidies enjoyed by the biggest industrial state-owned enterprises (SOEs).

On their conservative calculations, China spent over $300 billion, in nominal terms, on the biggest SOEs between 1985 and 2005. This help often came in the form of cheap capital and underpriced inputs unavailable to international rivals. The glass industry got soda ash for a song, for example. The auto-parts business got subsidies worth $28 billion from 2001 to 2011 through cheap glass, steel and technology; the government has promised another $10.9 billion by 2020. The subsidies to the paper industry topped $33 billion from 2002 to 2009. All industrial SOEs benefited from energy subsidies. Read more of this post