Turn Bad Stress Into Good

May 7, 2013, 8:12 p.m. ET

Turn Bad Stress Into Good

The Right Type of Pressure Can Boost Daily Performance; Taking More Control


Kate Matheny isn’t exactly someone who shies away from stress. Throughout her career, the Aurora, Colo., certified public accountant has pursued a progression of high-pressure management jobs. “I’m hard core,” says the 44-year-old wife and mother of two. “I wanted to be on top of the food chain [at work], and I wanted to be a great mom”—one who could attend lacrosse games, drive carpool and help with homework even after an hour-long commute and workdays that started, more often than not, with a 5 a.m. marathon-training run.

That is, until she hit the proverbial wall.

After months of losing sleep, dropping weight and “feeling pushed to the brink of losing my mind” by her juggling act, Ms. Matheny decided she had to address her stress—and turn it to her advantage. The new job she recently switched to still has its share of pressure, but with more support from her boss and more flexibility in her schedule, she says she feels great.

Contrary to popular belief, stress doesn’t have to be a soul-sucking, health-draining force. But few people know how to transform their stress into the positive kind that helps them reach their goals. Read more of this post

Latest China bailout reveals risk of local government’s hidden debts; A Chinese local government has apparently used public funds to repay the debt of a private firm

Latest China bailout reveals risk of local government’s hidden debts

Tue, May 7 2013

By Gabriel Wildau

SHANGHAI (Reuters) – A Chinese local government has apparently used public funds to repay the debt of a private firm, in a case that raises fresh questions about whether recent estimates of local government debt properly account for the full range of local liabilities. It is not the first time local officials have bailed out a private enterprise, but the fact that the municipal government had formally guaranteed the debt highlights the lack of visibility on the extent of localities’ hidden commitments. Read more of this post

When the CEO Burns Out: Job Fatigue Catches Up to Some Executives Amid Mounting Expectations; No More Forced Smiles

May 7, 2013, 6:47 p.m. ET

When the CEO Burns Out

Job Fatigue Catches Up to Some Executives Amid Mounting Expectations; No More Forced Smiles


A few years ago, James Green began to dread work. He dragged himself out of bed every morning and trudged through New York’s Penn Station, trying to muster a “game face” for his office at Giant Realm, an online advertising network. But Mr. Green wasn’t just any manager at the company; he was the CEO. And he was burned out on the job. Companies and managers are equipped to handle job fatigue among employees, but what happens when burnout—described as persistent fatigue, detachment or resentment triggered by excessive work and stress—strikes the top boss? More companies might soon find out. An uncertain economy, shareholder discontent and mounting expectations to deliver results have made the lives of chief executives more stressful, management experts say. And while few executives publicly acknowledge burnout, researchers studying the issue say it is more common than previously thought. In one study conducted by Harvard Medical School faculty, 96% of senior leaders reported feeling burned out to some degree, with one-third describing their burnout as extreme. Read more of this post

Nat Rothschild Rues ‘Terrible Mistake’ in Deal Gone Sour

Nat Rothschild Rues ‘Terrible Mistake’ in Deal Gone Sour

Nat Rothschild, dressed in a hooded sweater, jeans and hiking boots, perches on a cowhide sofa in his relatively modest chalet-style apartment in the Swiss ski resort of Klosters.

He recalls the fateful day in October 2010 when, as he scanned the globe for business opportunities, he first heard the word Bumi, Bloomberg Markets will report in its June issue.

Ian Hannam, a well-known JPMorgan Chase & Co. (JPM) investment banker, had e-mailed Rothschild suggesting he look at two coal companies, including PT Bumi Resources (BUMI), linked to the Bakrie family, a powerful Indonesian business dynasty.

“He said it was the best deal he had ever seen in his life,” Rothschild says. Read more of this post

Tips from Wall St hedge fund gurus fail to reward faithful

May 7, 2013 7:27 pm

Tips from Wall St hedge fund gurus fail to reward faithful

By Dan McCrum and Arash Massoudi in New York

Advice from the gurus of Wall Street may be rather less valuable than their fans would like to believe. Investors who bought on the basis of top tips from one of New York’s most celebrated hedge fund conferences last year spectacularly failed to beat the market. The Ira Sohn Investment conference held at New York’s Lincoln Center brings together the leading lights of the hedge fund community to share market insights as a way of raising money for cancer research. But a Financial Times analysis of last year’s tips shows decidedly mixed results. An investor who followed every top idea from the 12 speakers last year would have made 19 per cent, less than the 22 per cent gain available from a passive index fund tracking the US stock market. Many of the ideas have proved woefully miscued, including some from the most high-profile managers who will return to the stage on Wednesday: David Einhorn of Greenlight Capital and Bill Ackman of Pershing Square. Read more of this post

Here’s Taco Bell’s Brand New ‘Low End’ $1 Menu

Here’s Taco Bell’s Brand New ‘Low End’ Menu

Ashley Lutz | May 7, 2013, 6:02 PM | 2,569 | 6

Taco Bell announced last week that it was rolling out a new “low-end” menu at select stores across the country. Now we finally get to see what’s on the $1 menu, which is being tested in Sacramento and Kansas City. Pending results, the menu could roll out nationwide in the near future, company reps told us. The menu includes new items, such as a spicy potato taco, spicy beef mini quesadilla, shredded chicken mini quesadilla, and a beefy cheesy burrito. Check it out:

screen shot 2013-05-07 at 5.33.58 pm



Bankers Warn Fed of Farm, Student Loan Bubbles Echoing Subprime

Bankers Warn Fed of Farm, Student Loan Bubbles Echoing Subprime

A group of bankers that advises the Federal Reserve’s Board of Governors has warned that farmland prices are inflating “a bubble” and growth in student-loan debt has “parallels to the housing crisis.” The concerns of the Federal Advisory Council, made up of 12 bankers who meet quarterly to advise the Fed, are outlined in meeting minutes obtained by Bloomberg through a Freedom of Information Act request. Their alarm adds to a debate on the Federal Open Market Committee about whether the benefits from their monthly purchases of $85 billion in bonds outweigh the risk of financial instability. While Chairman Ben S. Bernanke has argued the program is worth pursuing, Fed Governor Jeremy Stein and Kansas City Fed President Esther George are among those who have voiced concerns that an extended period of low interest rates is heightening the risk of asset bubbles. “Agricultural land prices are veering further from what makes sense,” according to minutes of the council’s Feb. 8 gathering. “Members believe the run-up in agriculture land prices is a bubble resulting from persistently low interest rates.” Read more of this post

Brazilian pension funds go global

May 7, 2013 7:11 pm

Brazilian pension funds go global

By Joseph Leahy in São Paulo

As little as a year ago, Brazil’s greatest concern was the currency war – a tsunami of international funds that it believed was threatening to inundate its financial markets and those of other emerging countries.

Now, Brazilian real interest rates have fallen so low that, in a dramatic reversal, the country’s own pension funds are looking abroad. While their initial offshore investments will not amount to anything like a tsunami, it marks the start of what may prove to be an important step in the maturing of Brazil’s financial industry. Read more of this post

Korean firms far behind in creativity

2013-05-07 16:25

Korean firms far behind in creativity

By Kim Rahn

The government is aiming to achieve a “creative economy” by adopting more creative and innovative ideas in all industries. In reality, however, employees think Korea’s working culture is far from creative. If the corporate cultures of global firms famous for creativity, such as Google or Facebook are graded at 100, the average score for Korean companies would be 59.2, mainly due to hierarchism, a survey showed Tuesday. The survey was conducted recently on 500 workers by the Korea Chamber of Commerce and Industry (KCCI). According to the study, the smaller the size of a company, the lower a score it obtained. Asked the reasons for such low grades, 61.8 percent of those surveyed cited the country’s hierarchical culture or rigid communication system in which juniors always have to obey superiors. When multiple responses were given, 45.3 percent said the corporate culture puts more value on the organization than on individuals. “Seniors give orders and juniors follow. That’s all. Some seniors even think that juniors who make suggestions about work are impertinent,” said a steel company worker who asked not to be named. Read more of this post

The liquidity crisis at the STX Group, Korea’s 13th largest conglomerate, is weighing heavily on creditor banks amid dismal earnings outlook for the banking sector

2013-05-07 18:12

STX crisis may spill into banking sector

Credit extended to cash-strapped group reaches W13 tril.

By Na Jeong-ju

The liquidity crisis at the STX Group, the country’s 13th largest conglomerate, is weighing heavily on creditor banks amid dismal earnings outlook for the banking sector.

Creditors of STX may suffer losses totaling 13.2 trillion won ($12.1 billion) if the group collapses, according to the Financial Supervisory Service (FSS). Read more of this post

China Export Gains Spur Renewed Skepticism of Figures

China Export Gains Spur Renewed Skepticism of Figures: Economy

By Bloomberg News  May 8, 2013

China’s export growth unexpectedly accelerated in April even as shipments to the U.S. and Europe fell, spurring Bank of America Corp. and Mizuho Securities Co. analysts to say the figures were inflated by fake reports. The 14.7 percent increase, reported by the General Administration of Customs in Beijing today, was led by a 57.2 percent jump in shipments to Hong Kong that highlighted suspicions of false transactions used to mask capital flows into China. A customs spokesman said last month that the agency would investigate the “extraordinary” gain in trade with Hong Kong. The report deepens skepticism on the reliability of trade data from the world’s largest exporting nation, with Royal Bank of Scotland Group Plc saying export gains may be overstated by 9 percentage points. Regulators announced a crackdown this week on companies using trade reports to disguise speculative money inflows chasing a yuan that’s already exceeded last year’s gains against the dollar. “Exports actually haven’t done all that well,” Louis Kuijs, the RBS chief China economist who previously worked for the World Bank, said on Bloomberg Television from Hong Kong. That reflects a “pretty weak global picture, weak demand for Chinese exports” and the impact from yuan appreciation on China’s shipments, he said. Today’s report showed a 0.1 percent drop in U.S. shipments and 6.4 percent decline in exports to the European Union. Previous figures showed China’s shipments to Hong Kong rose 92.9 percent in March, while Hong Kong said imports from China rose 13.8 percent.  Read more of this post

What keeps Israeli companies out of China? A survey by Globes Research and PwC Israel reveals the opportunities, and the difficulties in exploiting them.

What keeps Israeli companies out of China?

A survey by Globes Research and PwC Israel reveals the opportunities, and the difficulties in exploiting them.

6 May 13 18:06, Avi Temkin

“There is a real fear that Israeli companies will not be astute enough to exploit the huge opportunities that have been created by China’s economic growth, especially in the light of the government’s twelfth five-year plan, because of lack of knowledge or fear of failure. The companies need to understand however that those are the markets where the big growth will happen, and if the management doesn’t understand this, then the board of directors should take action,” says Gerry Seligman, an international tax partner in the New York office of PwC US residing in the Tel Aviv office of PwC Israel, following the publication of a broad survey of business models of Israeli companies in China. The survey, by Globes Research and PwC Israel, is based on dozens of interviews with company managers, government officials, and researchers.

Israel Export Institute director Ofer Sachs explains that exports to China are concentrated in three main sectors: electronic components; minerals; and chemicals. These account for 71% of total Israeli exports to China. In other industries, it seems that Israeli companies are finding it hard to expand exports to China, and in some cases they are actually declining. Read more of this post

China’s struggling automakers jump on SUV boom

China’s struggling automakers jump on SUV boom

2013-05-08 01:44:44 GMT2013-05-08 09:44:44(Beijing Time)  SINA.com

BYD is known for electric cars but this year’s flagship model is the S7, a gasoline-powered SUV. It comes with an interior air purifier, radar to help with backing and digital TV. An onboard hard drive can hold 1,000 films. This is China’s Year of the SUV. Whatever their specialties used to be, automakers ranging from global brands to China’s ambitious rookies are scrambling to cash in on the explosive popularity of sport utility vehicles. “We are selling vehicles that have extensive technologies,” said Isbrand Ho, BYD’s director of export sales. “These are all on … premium models for European marques but we are making it available to the everyday person.” Read more of this post

Tanning Beds Should Carry Skin Cancer Warnings, FDA Says

Tanning Beds Should Carry Skin Cancer Warnings, FDA Says

Tanning beds would be forced to warn young people of the dangers of skin cancer and face tighter oversight under a proposal from U.S. regulators.

The Food and Drug Administration proposed today that sunlamp products recommend against use by those younger than 18 years old and warn frequent users to regularly screen for cancer. The proposed order would also require sunlamp products seek FDA clearance before sale, the agency said in a statement.

The risk of melanoma, the deadliest type of skin cancer, rises 75 percent in those exposed to ultraviolet radiation from indoor tanning, the FDA said. The agency has been reviewing its oversight of tanning beds since 2010 and still could choose to propose banning the products for use by young people, said Jeffrey Shuren, director of the FDA’s Center for Devices and Radiological Health. Read more of this post

Scientists said Wednesday that flu infections were rising among pigs raised for slaughter on farms in south and southeastern China, also plagued by bird flu

Study shows flu infections rising among Chinese pigs

POSTED: 08 May 2013 9:24 AM
Scientists said Wednesday that flu infections were rising among pigs raised for slaughter on farms in south and southeastern China, also plagued by bird flu.

PARIS: Scientists said Wednesday that flu infections were rising among pigs raised for slaughter on farms in south and southeastern China, also plagued by bird flu.

And the risk of spillover to humans was “constant or growing”, according to one of the authors of a study published in Proceedings of the Royal Society B. Read more of this post

JOLTS Jolts Jobs Report Cheerleaders, Implies Worst Job Growth Since September 2010

JOLTS Jolts Jobs Report Cheerleaders, Implies Worst Job Growth Since September 2010

Tyler Durden on 05/07/2013 12:49 -0400

In the aftermath of last week’s decidedly weak unemployment report (pre-spun to appear strong while ignoring the major drop in average weekly hours worked, which would have resulted in a massive drop in payrolls had total demand for labor stayed constant from March), many were looking for some confirmation, or denial, from today’s Job Openings and Labor Turnover (JOLTS) survey which provides the labor breakdown by new job openings, hires, separations, quits and layoffs for the preceding month. On the surface, the March JOLTS survey was a disappointment – analysts look at the report to see how the Job Openings trend is doing as an indication of labor demand (a decline from 3.899MM to 3.844MM, and down from a year ago, or 3.848MM, as well). More importantly, New Hired tumbled to the lowest since December, printing at 4.259MM, down from 4.451MM in February, and down from 4.435MM a year earlier.  On the exit side, workers indicates less leverage as well, with voluntary Quits, or worker-initiated departures, down 126K from 2.286MM to 2.160MM, while involuntary discharges, or terminations, spiked by 121K from 1.572MM to 1.693MM. As Stone McCarthy explains, this “hints at a less favorable environment for the labor market, especially when the increase in the number of layoffs (+121,000) is taken into consideration.” However, the biggest surprise from the JOLTS report is not in any of the standalone series, but in the time progression of the Net Turnovers number, which is simply the total new hires less total separations. Historically, the Net Turnover number tracks the total monthly nonfarm payroll change (establishment survey) on a almost tick for tick basis. Not this time. In fact as the chart below showed, the upward revised March NFP number to 138K, which preceded the even more optimistic, and much cheered April print of 165K, which sent the S&P and the DJIA soaring to new all time highs on Friday, not only did not get a confirmation, but in fact the JOLTS survey for Net Turnovers  – which came at only 46K in March compared to a revised 138K jobs added per the establishment survey – implied that the real NFP number in March should have tumbled to a level last seen in September of 2010! Looking at only the difference between the monthly NFP change and the implied JOLTS monthly job change, we find only the third highest discrepancy since the Great financial crisis, as can be expected implying a far greater bullish upside bias reported by the BLS in the non-farm payroll data. In fact, on a three monthly moving average, the “bullish bias” difference to NFP reported data is now only as big as it was just after the Lehman failure!  Of course, this data only looks back through March. It is quite possible that the April JOLTS data will be so strong, that it overwhelms the time series on both a monthly, and a moving average basis, promptly catches up to where it should be… Somewhere 150K higher than what the April payroll print of +165K suggested. Somehow, we doubt it.

NFP to Jolts Difference_0 NFP to Jolts_1_0 Read more of this post

Australia: Rising debt weighs heavily on any future boom

Rising debt weighs heavily on any future boom

May 8, 2013

Clancy Yeates

When confidence is building in the property market, as it has been lately, it can be easy to get swept up in the hype. Many of us know people who have made small fortunes on property. After all, house prices rose 6 per cent each year in the boom years between 1995 and 2005. Might this happen again?

Household indebtedness

There are entire industries – from real estate agents to mortgage brokers – that like to believe so. Some of the less scrupulous operators even like to mention this boom era in their sales pitch, implying it may soon return. While there are signs the housing market could be strengthening at the moment – prices are up 2.7 per cent nationally in the past year – a long-term view suggests we won’t see a return to the boom days of old. Why not? Perhaps the biggest reason is household debt. There were several reasons prices rose so quickly in the past, but the big one was that people bid them up by borrowing more. As this week’s graph shows, we went from borrowing about 50 per cent of disposable income in the early 1990s to 150 per cent – where it has settled. This increase occurred because we were taking out bigger home loans. Such a staggering rise was only possible because debt became a lot cheaper, thanks to a one-off drop in interest rates, and competition in banking.

But both these factors are highly unlikely to be repeated, and here’s why.

RH-353-clancy_20130507155153601145-300x0 Read more of this post

Indian economy: An unfinished project; New Delhi has introduced reforms to revitalise business. But many disillusioned investors are not convinced

May 7, 2013 6:58 pm

Indian economy: An unfinished project

By James Crabtree and Victor Mallet

New Delhi has introduced reforms to revitalise business. But many disillusioned investors are not convinced

At a private meeting in Mumbai’s seafront Taj Mahal hotel last month, finance minister Palaniappan Chid­ambaram made corporate India an unusual offer. Sitting in the hotel’s ballroom were most of the country’s leading industrialists, including billionaires Anil Ambani and Kumar Birla, who were gathered to discuss how to re-energise their nation’s flagging economy. “I’ve come here with one mission: to understand your problems and to fix them,” Mr Chidambaram said, according to one of those present. The finance minister then offered a bouquet of flowers to any participant able to report that none of their big investments was held up by bureaucratic obstacles linked to the government. As the conversation progressed round the table, and one tycoon after another complained of multibillion-dollar projects lying unfinished for the want of some official clearance or other, the flowers went unclaimed. Read more of this post

Malaysian Prime Minister Najib Razak’s election win without the bulk of ethnic Chinese voters is set to pose the biggest test yet

Najib Win Masks Biggest Test After Malaysian Chinese Exodus

Malaysian Prime Minister Najib Razak’s election win without the bulk of ethnic Chinese voters is set to pose the biggest test yet for the pro-Malay affirmative action policies instituted by his father more than three decades ago. The May 5 ballot left Najib’s United Malays Nasional Organisation with 109 parliamentary seats, almost enough to govern without any of its 12 allies in the Barisan Nasional coalition, Election Commission data showed. At the same time, the alliance as a whole took just 47 percent of the popular vote, the lowest since 1969, when Sino-Malay race riots flared. With opposition chief Anwar Ibrahim — ally of the mainly ethnic-Chinese Democratic Action Party that expanded its seats – – planning protests tonight over electoral fraud concerns, Najib, 59, is calling for national reconciliation. To get that, he may need to temper the same preferential-contract and job rules that helped secure his victory among rural Malays.

“UMNO is looking strong, but it’s a false dawn,” said Edmund Terence Gomez, a professor at the University of Malaya in Kuala Lumpur who edited a book on the race-based programs. “They know they need structural changes, and if they don’t do it they will face serious consequences in the next election.” Gomez said the biggest change needed is the removal of policies that restrict certain government contracts to Malays and indigenous groups together known as Bumiputera, or “sons of the soil.” They make up about 60 percent of Malaysia’s 29 million people. Abdul Razak, Najib’s father and Malaysia’s second prime minister, initiated the preferences in the wake of the 1969 riots that killed hundreds. Read more of this post

Bears Keep a Distance From Great White Short; Canada looks like a tempting target for short sellers

Updated May 7, 2013, 6:54 p.m. ET

Bears Keep a Distance From Great White Short


Canada looks like a tempting target for short sellers. The country’s commodity-and-debt-fueled boom has slowed, and consumer debt is at records. There are concerns about a housing bubble after residential-property prices surged nearly 90% over the past decade. And some analysts smell trouble from the economy’s reliance on natural resources, as commodities prices fall and the U.S., long an importer of Canadian crude, produces more of its own oil. Despite all that, some hedge funds and other big investors are agonizing over whether to make big bets against, or sell short, Canadian investments. “I want to [short Canada] very badly,” said Vishaal Bhuyan, who runs Nariman Point, a New York hedge fund that manages more than $20 million. “But their housing bust is more slow-moving than ours was and there are no” perfect ways to bet against the Canadian housing market. The fund has held off on betting against Canadian investments.

MI-BV815_CANADA_NS_20130507175411 Read more of this post

Soros’ billion dollar bet on Aussie rate cut pays off

Billion dollar bet on rate cut pays off

May 8, 2013 – 9:46AM

Mark Hawthorne

screen shot 2013-05-07 at 9.57.07 pm

It may go down as one of the great currency bets in Australian dollar history – a $US1 billion gamble on a Reserve Bank rate cut that has delivered a $US19 million ($18.65m) profit in 36 hours. The beneficiary, if you believe the rumour mill, is investment legend George Soros. Best of all, it appears the 82-year-old American pulled off the deal three times, all with different foreign exchange brokers in Asia, for a tidy profit of almost $US60 million. Read more of this post

The 20 Hottest Startups From The World’s 2nd-Biggest Startup Factory – Israel

The 20 Hottest Startups From The World’s 2nd-Biggest Startup Factory – Israel

Julie Bort | May 7, 2013, 9:32 PM | 5,273 | 1

BillGuard’s community manager Marina Boykos left the U.S. to work at an Israeli startup in Tel Aviv Israel calls itself the “startup nation.” Israelis say that technology is the country’s No. 1 export. By some counts, Israel is home to 4,800 startups today. It’s also home to least two dozen accelerator/incubator programs in the Tel Aviv area, alone, including some run by Microsoft and Google. There are more incubators in other cities, too, including a program in Jerusalem run by Jerusalem Venture Partners on a campus so big it has its own restaurant and nightclub.  All of this is to say that as a startup hub, Israel is second only to Silicon Valley. So it’s not easy to name the nation’s hottest, most exciting startups because everywhere you turn there are young companies doing really cool things. Business Insider recently spent a week exploring Israel’s super hot startup community, meeting with founders, employees and venture capitalists.

(Disclosure: Microsoft and Jerusalem Venture Partners paid some of the travel expenses for this trip.)

We asked everyone to name the nation’s coolest, hottest startups.

Waze: crowdsourced traffic reports

Waze is far and away the hottest, most talked about startup in Israel these days. It’s an internationally popular maps-and-navigation app for 30 million drivers worldwide. Drivers report their traffic problems, which is a great way to get real time traffic info. At one point, Apple was rumored to be buying Waze. That didn’t happen but the company is doing so well that co-founder Uri Levine has become an angel investor in other Israeli startups, like Pixtr, the app that makes people look gorgeous in photos. Waze has offices in Palo Alto, Calif. and New York. Read more of this post

3D printing: the new, bottom-up industrial revolution

3D printing: the new, bottom-up industrial revolution

When Joseph Schumpeter described capitalism as a process of creative destruction more than 70 years ago, he couldn’t have conceived of the miracle that is 3D printing.

By Allister Heath

4:10PM BST 07 May 2013

Yet this hair-raising technology is about to tear apart existing structures in a way that would undoubtedly have shocked even Schumpeter, a great economist struck by the free market’s revolutionary, anti-conservative tendencies.

Remarkably, 3D printing allows actual objects to be designed and created (or “printed”) surprisingly quickly with a computer connected to a printer-like device, using special material (often plastic, but increasingly almost anything) as “ink” and “paper”. With the costs of the machinery nearing mass-market levels, 3D printing is poised to take off, blurring the distinction between digital and physical realms, democratising manufacturing and turning large chunks of the global economy upside-down.

Yet the news that the first workable gun has been produced with a 3D printer will have reawakened the inner Luddite in many Britons. Surely, many will argue, such a technology is far too dangerous to be unleashed on the world: imagine what terrorists could do with it. Read more of this post

The data crunchers are invading Hollywood. Solving Equation of a Hit Film Script, With Data

May 5, 2013

Solving Equation of a Hit Film Script, With Data


LOS ANGELES — Forget zombies. The data crunchers are invading Hollywood.

The same kind of numbers analysis that has reshaped areas like politics and online marketing is increasingly being used by the entertainment industry.

Netflix tells customers what to rent based on algorithms that analyze previous selections, Pandora does the same with music, and studios have started using Facebook “likes” and online trailer views to mold advertising and even films.

Now, the slicing and dicing is seeping into one of the last corners of Hollywood where creativity and old-fashioned instinct still hold sway: the screenplay. Read more of this post

Adobe’s subscription model and the future of software

Adobe’s subscription model and the future of software

By Hayley Tsukayama, Wednesday, May 8, 12:45 AM

Those waiting to grab the next Adobe Creative Suite may be disappointed — there won’t be anything for you to pick up.

Adobe announced Monday that it will no longer sell boxed versions of its software, or even the option to buy individual programs from the popular suite. And Adobe is dropping the well-known Creative Suite (most often abbreviated to CS), shifting all the programs under the “Creative Cloud” brand that it uses for Web apps, to reflect that it’s not interesting in leaving the cloud any time soon. From now on, the company said, anyone who wants to buy Photoshop, Dreamweaver, Illustrator or other parts of its Creative Suite software can subscribe to them monthly as part of a software package. The update will be available starting next month for an annual membership that breaks down to $49.99 per month for the full suite. Those who own products from CS3 through CS5.5 will get a discount on the first year of the new cloud service, for $29.99 per month. Individual app subscriptions also are available for $19.99 per month.

Plenty of software companies only distribute their software through downloads. Microsoft and Apple offer their operating systems through digital downloads. And when was the last time you took a good look at the PC gaming section of your local store? Digital downloads and hubs such as Steam or Origin have made those sections shrink — in some stores — to nothing. Read more of this post

This Is Your S&P; This Is Your S&P Without Tuesdays

This Is Your S&P; This Is Your S&P Without Tuesdays

Tyler Durden on 05/07/2013 12:02 -0400

Since the mid-November lows, the S&P 500 has gained a remarkable 268 points on the back of faith, hope, and Bernanke/Kuroda charity. But perhaps what is more mind-numbing is that this efficient market has given us more than 50% of those gains on Tuesdays. With 17 up-days in a row, Tuesday is the Monday dip-buyers dream. Since 1/18, absent Tuesdays, the S&P 500 has gone nowhere. Maybe Bob Geldof needs to write a new song for the US investor “I do like Tuesdays”, or at least a slightly revised cover version of the Bangles’ “Manic Tuesday”. What would we do without Tuesdays? Tuesday is a massive outperformer… and just to be clear… Tuesday’s gains dwarf the rest of the week’s total gains…

20130507_SPX1_0 20130507_SPX2

The Relation between Earnings Management and Pro Forma Reporting

The Relation between Earnings Management and Pro Forma Reporting

Ervin L. Black Sr. Brigham Young University – Marriott School of Management

Theodore E. Christensen Brigham Young University – Marriott School of Management

T Taylor Joo University of Arkansas – Department of Accounting

Roy Schmardebeck University of Arkansas

May 1, 2013

We investigate the association between past and current earnings management and the likelihood that companies will disclose pro forma earnings. Specifically, we investigate how prior earnings management, current-period operating performance, real earnings management, and accruals management influence the probability that a company will disclose an adjusted earnings metric in its earnings press release. We also explore how these same factors influence the likelihood of aggressive pro forma disclosures. We define aggressive disclosures as those that exclude recurring items, use earnings exclusions to convert a Generally Accepted Accounting Principles (GAAP) loss to a pro forma profit, or convert a GAAP earnings metric that falls short of earnings expectations to a pro forma earnings number that meets or exceeds expectations. The results indicate that companies with more constrained balance sheets (i.e., those that have used up their accruals in prior periods) and less current-period earnings management (i.e., those with lower abnormal accruals) are more likely to disclose pro forma earnings and do so aggressively. Moreover, we find some evidence that companies using more real earnings management and with better operating performance are less likely to report aggressive pro forma numbers. These results suggest that while more past earnings management is consistently positively associated with aggressive pro forma reporting, we find evidence of a substitute relation between aggressive pro forma reporting and both abnormal accruals and real earnings management. In sum, managers are more likely to disclose aggressive pro forma earnings when they (1) have a more constrained balance sheet, (2) are less able to manage earnings with accruals or real earnings management, and (3) have less profitable operations. Finally, we find evidence that investors appear to understand these tradeoffs as they discount pro forma disclosures in the presence of higher levels of prior earnings management.

CEO Implicit Motives: Their Impact on Firm Investment and Firm Performance; Using 6160 annual CEO letters to shareholders for 585 S&P 500 companies for the period 1992 to 2010 to examine how CEO implicit motives impact the quality of their judgment and decision making

CEO Implicit Motives: Their Impact on Firm Investment and Firm Performance

Kevin J. Veenstra McMaster University – DeGroote School of Business

April 30, 2013

Using 6160 annual CEO letters to shareholders for 585 S&P 500 companies for the period 1992 to 2010, I examine how CEO implicit motives (need for Achievement, need for Power, and need for Affiliation) impact the quality of their judgment and decision making. I find that while implicit motives for CEOs as a group have not changed significantly over time, there is a marked relationship between the competitiveness of a company’s industry type and the implicit motive attributes of the CEO it hires. Using revenue growth, size adjusted stock returns, return on assets, and Tobin’s Q as proxies for JDM quality, I show that after controlling for firm and year fixed effects, performance is increasing in a CEO’s need for power and decreasing in a CEO’s need for achievement; and that the effects of implicit motives are persistent, even three years after being measured. My results suggest that, in addition to characteristics such as functional career track, military experience, and number of external board seats held, implicit motives play a significant role in the determination of what makes each CEO unique and drives subsequent firm performance. My results have practical implications for many company investor relations departments who in recent years have been discontinuing the annual CEO letter, but may have not considered this useful disclosure role.

‘Seize and Hold with Both Hands’: The Political Implications of Corporate and Securities Law Reforms Under Hu Jintao

‘Seize and Hold with Both Hands’: The Political Implications of Corporate and Securities Law Reforms Under Hu Jintao

Andrei Molchynsky McGill University

November 2012

In March 2013, the Fifth generation of Chinese leaders, headed by Xi Jinping and Li Keqiang, officially took over from the previous leadership headed by Hu Jintao and Wen Jiabao. One of the most important corporate legal reforms during the Hu-Wen administration were the amendments of the PRC Securities Law and Company Law. In this article, the author argues that the Securities Law and Company Law reforms and the continued restructuring of the state enterprises may be viewed as the government’s attempt to uphold the legitimacy of the one-Party rule. More specifically, it is argued that the government regulation of the securities market has been serving the financing needs of state-owned enterprises, while promoting the political needs of the Party. This paper also discusses the involvement of the Chinese Communist Party in corporate governance, demonstrating the Party’s presence in the operation and management of listed and, to a lesser extent, non-listed companies. Finally, the author will show how China’s program of corporate and securities reform tries to reconcile with the official ideology of the Communist Party.

The Roots of the Industrial Revolution – Institutions or (Socially Embedded) Technological Know-How?

The Roots of the Industrial Revolution – Institutions or (Socially Embedded) Technological Know-How?

Carles Boix Princeton University – Department of Politics and Woodrow Wilson School of Public and International Affairs

Scott F. Abramson Independent
EPSA 2013 Annual General Conference Paper 32A

We reassess the literature of growth by looking at the evolution of the European economy from around 1200 to 1900. Employing a comprehensive dataset for the European continent that includes geographic and climate features (1200-1800), urbanization data (1200-1800), per capita income data in the second half of the 19th century, location of proto-industrial centers (textile and metal sectors from 1300 to the Industrial Revolution), political borders and political institutions, we estimate the geographic, economic and political covariates of urbanization (commonly used as a proxy for per capita income) and 19th-century per capita income. Taking an instrumental variables approach, exploiting random climatic variation across time and space in the propensity of territory to support large, urban, populations, we show that the process of economic take-off (and of a growing economic divergence across the European continent) was caused by the emergence and growth of cities and urban clusters in an European north-south corridor that broadly runs from southern England to northern Italy. In contrast to previous findings in the institutionalist literature, we then show that fortunes of parliamentary institutions in early modern Europe played a small part in the success of the industrial revolution and the distribution of income across the continent in late 19th century. Rather, industrialization took place in those territories that had a strong proto-industrial base, often regardless of the absence of executive constraints (in the two centuries preceding the industrial revolution).

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