The Many Ways That Cities Cook Their Bond Books; The $3 trillion municipal debt market is rife with creative accounting

Updated May 31, 2013, 7:01 p.m. ET

The Many Ways That Cities Cook Their Bond Books

The $3 trillion municipal debt market is rife with creative accounting.

By STEVE MALANGA

It has been a busy few weeks for the Securities and Exchange Commission. In May, the SEC charged two cities—Harrisburg, Pa., and South Miami, Fla.—with securities fraud for allegedly deceiving investors in their municipal bonds.

This follows similar fraud charges against states, New Jersey in 2010 and Illinois in March, after SEC investigators uncovered what they called “material omissions” and “false statements” in bond documents related to those state’s pension funds. Read more of this post

Trust: Easy to Break, Hard to Repair; renowned short-seller Jim Chanos points out that the average investor is right not to trust the integrity of the financial markets

May 28, 2013, 11:18 AM

Trust: Easy to Break, Hard to Repair

By Jason Zweig

In this interview, the renowned short-seller Jim Chanos points out that the average investor is right not to trust the integrity of the financial markets. (Someone showed a nice touch by posting it on April Fool’s Day.)

In the interview, Chanos makes three important points.

First, in recent years financial fraud has rarely been detected and exposed by the people the public might reasonably expect to do so: accountants, regulators and law-enforcement authorities, whom Chanos calls “the normal guardians of the marketplace.” Instead, frauds more often have been rooted out by whistleblowers, short-sellers and journalists. Read more of this post

China’s Economic Empire: The biggest threat from Beijing is the aggressive spread of state capitalism.

June 1, 2013

China’s Economic Empire

By HERIBERTO ARAÚJO and JUAN PABLO CARDENAL

HONG KONG — THE combination of a strong, rising China and economic stagnation in Europe and America is making the West increasingly uncomfortable. While China is not taking over the world militarily, it seems to be steadily taking it over commercially. In just the past week, Chinese companies and investors have sought to buy two iconic Western companies, Smithfield Foods, the American pork producer, and Club Med, the French resort company. Europeans and Americans tend to fret over Beijing’s assertiveness in the South China Sea, its territorial disputes with Japan, and cyberattacks on Western firms, but all of this is much less important than a phenomenon that is less visible but more disturbing: the aggressive worldwide push of Chinese state capitalism.

By buying companies, exploiting natural resources, building infrastructure and giving loans all over the world, China is pursuing a soft but unstoppable form of economic domination. Beijing’s essentially unlimited financial resources allow the country to be a game-changing force in both the developed and developing world, one that threatens to obliterate the competitive edge of Western firms, kill jobs in Europe and America and blunt criticism of human rights abuses in China. Read more of this post

Why Canadians may never realize their dream of having U.S. prices

Why Canadians may never realize their dream of having U.S. prices

Dan Ovsey | 13/05/23 | Last Updated: 13/05/23 10:36 AM ET
In 2011, an average of 3.4 million Canadians made a conscious choice to hop in their vehicles each month and make a run for the border — to shop.

That trend is likely to grow in the near future given that the federal government’s 2013 budget announced the introduction of new tariffs to be imposed on goods entering Canada from 70 different countries, costing Canadian consumers an estimated $330-million more each year in retail prices.

Cross-border shopping is far from new, of course. For decades, Canadians have been traversing the 49th parallel for deals on everything from clothing and accessories to household goods, electronics and furniture. Even when the exchange rate was unfavourable and duties had to be paid at the border, the price difference still made a cross-border shopping trip worthwhile. Read more of this post

Vending machines in Japan have become a stubborn barometer of the country’s struggle against deflation

May 31, 2013

One Obstacle Won’t Budge in Japan’s Fight With Deflation

By HIROKO TABUCHI

TOKYO — Vending machines stocked with sodas are ubiquitous here, tucked away, it seems, in every nook and cranny of the country. They are found along Omotesando, the tree-lined shopping avenue known as the Champs-Élysées of Tokyo, and their glow lights up the back streets of hot spring towns like Hakone. They are even atop Mount Fuji, Japan’s 12,000-foot, snow-capped mountain.

The vending machines are also a symbol of the country’s big economic problem: deflation. The price of a soda in a vending machine has stubbornly remained the same for 15 years. Now, as back then, a can of Georgia Coffee, Pocari Sweat sports drink or Kirin Lemon soda typically sells for 120 yen, roughly $1.20. Some discount machines sell cans for as little as 80 yen, less than the price they fetched in the 1980s. Read more of this post

Infosys Brings Back Founder as Chairman in response to shareholder demands to revive the struggling technology company

June 1, 2013, 5:43 a.m. ET

Infosys Brings Back Founder

By DHANYA ANN THOPPIL

BANGALORE—India’s Infosys Ltd. 500209.BY +3.00% brought back its founder, N.R. Narayana Murthy, in response to shareholder demands to revive the struggling technology company.

Mr. Murthy was named executive chairman and added to the board Saturday. He will hold the post for five years. He served as the chief executive, chairman and chief mentor of Infosys before being appointed chairman emeritus in 2011. Read more of this post