If You’re a Bond Investor, Beware of the Seesaw; SEC has a basic reminder for investors enticed by rising interest rates on bonds: When rates climb, prices fall.

July 20, 2013

If You’re a Bond Investor, Beware of the Seesaw

By JEFF SOMMER

THE Securities and Exchange Commission issues frequent bulletins about what it calls “investment frauds and scams” — a frightening taxonomy of plots and stratagems aimed at separating investors from their money. The agency’s alerts range from warnings of Madoff-style Ponzi schemes to “pump and dump” operations intended to temporarily inflate a stock price. They also include cautionary notes about polite offers of assistance from predators posing as government regulators. Lately, though, the S.E.C. has been giving a warning of a different sort. Bearing the general title “Interest Rate Risk,” this latest bulletin is a cry for understanding. It’s about bonds, and for most people, the subject is confounding. Read more of this post

Shoppers Drug Mart’s pharmacist associate model a hidden jewel for Loblaw

Shoppers Drug Mart’s pharmacist associate model a hidden jewel for Loblaw

Armina Ligaya | 13/07/20 | Last Updated: 13/07/19 4:46 PM ET
If Loblaw Companies Ltd. successfully buys Shoppers Drug Mart, it will not only inherit the pharmacy retailer’s vast network of stores — particularly key locations in the hearts of Canada’s urban centres — it will also benefit from the advantages afforded by the owner-operators of those stores: pharmacists.

While pure-play food and drug retailers such as Metro and Rexall appear to have the most to lose in the impending nupitals of Loblaw and Shoppers Drug Mart, Monday’s $12.4-billion deal stands to challenge a far broader swath of retail companies — from Old Navy to Sears to Sephora — as the two Canadian retail giants begin stocking their strongest brands and categories in each other’s stores. Read more of this post

Renewable energy in Spain: Sustainable energy meets unsustainable costs

Renewable energy in Spain: Sustainable energy meets unsustainable costs

Jul 20th 2013 | MADRID |From the print edition

ÁNGEL MIRALDA was proud of his 320 solar panels in a field near Benabarre, in northern Spain. They added 56 kilowatts of clean-energy capacity to a country that depended on oil imports. The panels cost €500,000 ($735,000): €150,000 from an early-retirement pay-off from IBM’s Barcelona office, the rest from a bank loan. The government promised a 10% annual return on such projects. That was in 2008. Five years later, after subsidies were cut on July 12th for the third time since 2012, his income is down by 40% and he is struggling to repay the loan. “There is no legal security in Spain,” he complains. Mr Miralda is the victim of a bungled, overambitious renewables programme. Governments everywhere want to turn green and create environmentally friendly jobs. But as Spain shows, good intentions are not enough. If the policies are wrong, the benefits are wasted, the jobs disappear, the costs remain—and business investors bear the brunt. Read more of this post

Lighting rural India: Villagers enjoy sunlight after dark

Lighting rural India: Villagers enjoy sunlight after dark

Jul 20th 2013 | ATRAULI, UTTAR PRADESH |From the print edition

FLY by night over Uttar Pradesh in northern India, the country’s most populous state, and its cities appear as dazzling islands. In between, however, lies an inky sea. Perhaps two-thirds of Uttar Pradesh’s 200m people have no regular electricity. In India as a whole, 700m, or more than half of the population, suffer unreliable connections to the national grid, or none at all.

On paper, plans exist for linking the country’s northern and southern grids. That would help, yet nobody expects rural India to be properly plugged in for a long time yet. Meanwhile, villagers soldier on with paraffin lamps, which harm lungs and emit a dim light that is of little use for school homework. Darkness breeds danger, so women stay home after the sun goes down. A lack of electricity limits business, as markets and shops close early. Banks have been ordered to reach villages, but they need electricity. And though most Indians have mobile phones, many struggle to recharge them. Lots of India’s 400,000 mobile-phone towers are powered at least in part by diesel generators, which are noisy, dirty and costly. Power can account for two-fifths of a mobile-phone company’s operating costs. Read more of this post

Hauling New Treasure Along the Silk Road; With freight trains as their caravans, manufacturers like Hewlett-Packard are reviving an ancient way to ship products made in China to markets in Western Europe

July 20, 2013

Hauling New Treasure Along the Silk Road

By KEITH BRADSHER

AZAMAT KULYENOV, a 26-year-old train driver, slid the black-knobbed throttle forward, and the 1,800-ton express freight train, nearly a half-mile long, began rolling west across the vast, deserted grasslands of eastern Kazakhstan, leaving the Chinese border behind.

Dispatchers in the Kazakh border town of Dostyk gave this train priority over all other traffic, including passenger trains. Specially trained guards rode on board. Later in the trip, as the train traveled across desolate Eurasian steppes, guards toting AK-47 military assault rifles boarded the locomotive to keep watch for bandits who might try to drive alongside and rob the train. Sometimes, the guards would even sit on top of the steel shipping containers. Read more of this post

A Bizarre Goldman Sachs Aluminum Moving Scheme Has Allegedly Cost US Consumers $5 Billion In The Past 3 Years

A Bizarre Goldman Sachs Aluminum Moving Scheme Has Allegedly Cost US Consumers $5 Billion In The Past 3 Years

ADAM TAYLOR JUL. 20, 2013, 6:20 PM 5,341 24

The Federal Reserve is currently “reviewing” a landmark 2003 decision that first allowed regulated banks to trade in physical commodity markets. Why exactly shouldn’t banks be able to trade physical commodities? To see one argument, take a look at a big report from David Kocieniewski in today’s New York Times. According to Kocieniewski, a Goldman Sachs-owned company has been involved in an elaborate plan to move around aluminum in a way that has inflated market prices. The report states that every time an American consumer buys a product containing aluminum, they pay a price that has been affected by this maneuver. Sources told The New York Times that in total the plan has cost American consumers more than $5 billion over the last three years, Kocieniewski’s investigation centers on Metro International Trade Services, an aluminum storage company that Goldman Sachs bought three years ago. According to the Times, since Goldman bought the company the average wait time at the storage facility has gone up more than 20-fold. As the wait times are longer, the companies’ revenues for storing the aluminium are higher. This cost is reflected in the market price of aluminum. Aluminum storage facilities are not allowed to mindlessly sit on aluminum — industry standards require them to move 3,000 tons of the metal every day. However, according to the Times, Metro International gets around this law by moving the metal between its own warehouses every day. One analyst estimated that around 90% of the metal moved each day went to another Goldman-owned warehouse. The body that governs the industry has shown little interest in reforming the practice, Kocieniewski writes. This may be because the body — the London Metals Exchange — collects 1% of the rent from aluminum storage facilities. Limiting the amount of rent received would cost it millions. This all makes for a somewhat absurd working environment. Workers told the Times that they’d routinely see the same drivers making three or four round trips a day. Some warehouses reportedly sat empty 12 or more hours a day, the Times reports, despite the huge backlog. If the practice is as the Times describes it, it is very hard to see what value is given to society by the activity. A loose coalition of companies that use aluminium — including Boeing and Coca-Cola — have begun to put pressure on Goldman. However, the issue may go beyond aluminum — JP Morgan, Blackrock and Goldman have all been given approval by the SEC to buy a large amount of copper available on the market and stockpile it, Kocieniewski reports. Read more of this post