China Urbanization to Hit Roadblocks Amid Local Opposition

China Urbanization to Hit Roadblocks Amid Local Opposition

China’s plan to encourage hundreds of millions of rural residents to settle in cities to boost growth faces opposition from local governments, according to Li Tie, an official with the nation’s top economic planning agency.

Officials, researchers and company executives highlighted challenges at an urbanization forum in Beijing on Aug. 10. They cited the strain on local-government finances, the dangers of overbuilding and the cost of scrapping the hukou, or residence permit, system that denies migrants the welfare, health and education benefits of city dwellers.

Premier Li Keqiang has championed urbanization as a “huge engine” for growth as he seeks to shift the world’s second-largest economy toward a model that relies on consumption rather than investment and exports. As policy makers draft plans for the new leadership’s reform agenda ahead of a key Communist Party meeting later this year, Li is grappling with vested interests that could stymie some of his plans. Read more of this post

China trips up retail grocery chains; “The reality is that growing a grocery store chain in Asia is very difficult – ParknShop is dominant in Hong Kong but has struggled elsewhere”

August 11, 2013 2:26 pm

China trips up retail grocery chains

By Paul J Davies in Hong Kong

If Tesco’s joint venture with China Resources is an admission of defeat for the UK supermarket group in the world’s second-largest economy, it is also a warning to potential bidders for ParknShop.

Foreign grocery store operators might be tempted to see the Hong Kong-based chain – the subject of a recently announced “strategic review” by parent Hutchison Whampoa – as a stepping stone into China, but the costs and difficulties of growing a fresh food business in such a vast country are easily underestimated. Read more of this post

China to set up more private banks to help small firms; Banks are encouraged to tolerate higher non-performing loans when they lend to smaller firms

China to set up more private banks to help small firms

1:45am EDT

BEIJING (Reuters) – China’s cabinet has unveiled plans to set up more private banks to boost financial support for cash-starved smaller firms, in the latest bid to bolster the slowing economy. “We will actively develop small-sized financial institutions and open up the channel for private capital to enter the financial sector,” the cabinet said in a set of guidelines published on the central government’s website: www.gov.cn. “We will promote trials by private capital to initiate the establishment of private banks responsible for their own risks, as well as financial leasing companies and consumer finance companies and other financial institutions.” Read more of this post

China Poised to Gain Control as Shipyard Shakeout Looms

China Poised to Gain Control as Shipyard Shakeout Looms: Freight

China grew into the world’s leading shipbuilder over the last decade as hundreds of private yards opened to compete with state-run companies. Now, the government is poised to regain control as the industry heads for consolidation.

The number of shipyards in China has swollen to 1,647, contributing to a global capacity glut. To stabilize the industry, one third to a half of the yards will probably have to disappear through acquisitions and closings, according to executives and analysts. Read more of this post

Beijing Plates Harder to Win Than Roulette Spur Loopholes

Beijing Plates Harder to Win Than Roulette Spur Loopholes: Cars

Raising the money was once the big obstacle to auto ownership in China. Now it’s getting the right license plates.

To ease congestion in the biggest cities, officials are trying to cap the number of vehicles. In Beijing, residents have a better chance of winning at roulette than in the capital’s monthly lottery for new auto licenses. In Shanghai, buying a set of plates in the city’s auction system can mean spending more than on the car itself.

Small wonder then that resourceful motorists are finding ways around the rules. An entire industry has sprung up to help them, from services that register cars in other towns, to brokers of surplus licenses to thieves and counterfeiters of plates. Read more of this post

A credit crisis in Shenmu, a bustling northwest China county that built its riches on coal, highlights urgency of economic transition

Credit crisis highlights urgency of economic transition

English.news.cn   2013-08-11

XI’AN, Aug. 11 (Xinhua) — A credit crisis in Shenmu, a bustling northwest China county that built its riches on coal, has stoked concerns regarding how quickly the country can complete its economic transition. Hundreds of underground banks that mushroomed in Shenmu during more prosperous times have failed to collect large amount of debts, as prices of coal and real estate have fallen sharply. Lured by annual earnings of 20 percent, more than 20 billion yuan (3.3 billion U.S. dollars) in private funds is believed to have swarmed into local underground banks, which previously lent to investors at annual rates of more than 30 percent, according to a local resident surnamed Meng. The borrowers could invest the funds in coal mines or real estate for higher profits, Meng said. Read more of this post

In North Asia, a Growing Crisis of Confidence in Nuclear Power

In North Asia, a Growing Crisis of Confidence in Nuclear Power

By Faith Hung & Antoni Slodkowski on 3:38 pm August 9, 2013.
Taipei/Tokyo. A nuclear power plant in Taiwan may have been leaking radioactive water for three years, the government has said, adding to a growing crisis of confidence in North Asia about nuclear safety.

Japan is struggling to contain radioactive water pouring out of the Fukushima nuclear plant that was wrecked by a 2011 tsunami. In South Korea, prosecutors are conducting a massive investigation into forged safety certificates and substandard parts at many of its reactors. Read more of this post

UGL to Spin Off Property Unit DTZ After Posting 45% Drop in Profit; Acquired DTZ (Revenue $1.1 Billion) in Dec 2011 for $120.2 Million Vs Singapore’s ERA $103 Million (Revenue $274 Million)

UGL to Spin Off Property Unit After Posting 45% Drop in Profit

UGL Ltd. (UGL), the Australian company that acquired U.K. real estate broker DTZ Holdings Plc in 2011, plans to split its operations into two listed companies by June 2015 to allow each to follow its own growth strategy.

UGL will create two companies, one focused on global property services and the other on engineering, construction and maintenance services in Australia, New Zealand and Asia, it said in a statement to the Australian stock exchange today. The company today reported underlying profit after tax in the 12 months to June 30 fell 45 percent from a year ago to A$92.1 million ($84.7 million). Read more of this post

Ticketmaster Wants in on the Scalping Act; Resellers, Long the Enemy, Invited to List Tickets on New TM+ System

August 11, 2013, 6:11 p.m. ET

Ticketmaster Wants in on the Scalping Act

Resellers, Long the Enemy, Invited to List Tickets on New TM+ System

HANNAH KARP

Live Nation Entertainment Inc. LYV -1.23% and its Ticketmaster subsidiary have a new strategy for dealing with their sworn enemies, ticket scalpers: If you can’t beat ’em, join ’em.

Heavy-metal fans looking for tickets to see Black Sabbath at the First Midwest Bank Amphitheatre near Chicago this month are getting a taste of the new approach. On Live Nation’s website, an unusual seating map lists available face-value seats right alongside pricier seats being offered for resale by others. A block of seats nine rows from the stage was recently listed for their face value of $156 each, including fees; one row back, a reseller was offering a pair for $360.80 each. Read more of this post

AmBev Weathering Brazil’s First Beer Drop-Off in Decade

AmBev Weathering Brazil’s First Beer Drop-Off in Decade

Brazilians are drinking less beer for the first time in a decade. Cia. de Bebidas das Americas, Latin America’s biggest brewer, says it can still boost profit.

AmBev, as the Anheuser-Busch InBev NV (ABI) unit is known, is promoting higher-margin premium beers and repackaging cheaper offerings to make them more affordable after a surprise volume drop, Chief Executive Officer Joao Castro Neves said last week in a conference call. It’s also expanding in Brazil’s North and Northeast, where sales aren’t slowing as in other regions.

“Even though we’re expecting volumes to be down, that’s a volume number, not a profit number,” Lauren Torres, an HSBC Holdings Plc analyst, said by telephone from New York. “They could actually still grow their company, still generate cash and pay dividends.” Read more of this post

CFTC subpoenas metals warehousing firm as inquiry heats up

CFTC subpoenas metals warehousing firm as inquiry heats up

2:03am EDT

By Josephine Mason

LONDON (Reuters) – The U.S. commodities market regulator has subpoenaed a metals warehousing firm, seeking all of its documents and communications related to the London Metal Exchange since January 2010, as an inquiry into complaints about inflated metals prices gathers steam.

The U.S. Commodity Futures Trading Commission (CFTC) sent the subpoena last week, a source with direct knowledge of the matter said, after a letter from the regulator last month ordered the warehouse firm to preserve emails, documents and instant messages from the past three years. Read more of this post

Oil Sands Industry Turns to Algae to Appease Obama

Oil Sands Industry Turns to Algae to Appease Obama

Canada’s response to President Barrack Obama’s challenge to reduce emissions of global-warming gases from the oil sands starts with sewage and algae.

The paste-like crude extracted from the oil sands is softened by heat and steam to make it flow though pipelines. Burning natural gas to process the fuel creates carbon dioxide that researchers believe can be combined with waste water and fed to algae, which can be processed into cattle feed and other useful products.

“We’re taking CO2 and making it into a valuable product,” said John Parr, vice president at Canadian Natural Resources Ltd. (CNQ), the country’s third-largest oil-sands producer by market value, in a phone interview. “There’s a business case that can be made for it.” Read more of this post

Yes Bank Loses Almost Half Its Market Value on India Crunch; Indian Banks to Drop on Record Yield Inversion

Yes Bank Loses Almost Half Its Market Value on India Rate Surge

Yes Bank Ltd. (YES), the best-performing Indian bank stock last year, has lost almost half its market value in less than a month on investors’ concern that a record surge in interest rates will erode profits and boost defaults.

The stock has tumbled 43 percent, the most in the S&P BSE Bankex Index, since the Reserve Bank of India on July 15 began taking emergency steps to tighten liquidity and bolster the rupee. Mumbai-based Yes Bank, which gets 69 percent of its funding from bulk deposits and debt, is among lenders that are most vulnerable if rates remain high, according to Espirito Santo Securities India Pvt. Read more of this post

India’s Path to Prosperity Doesn’t Run Through Cities

India’s Path to Prosperity Doesn’t Run Through Cities

Indian leaders often warn that they need to shift the majority of their country’s population — almost 70 percent — from rural to urban areas. “Our salvation,” Prime Minister Manmohan Singh claims, “lies in moving people out of agriculture.” Finance Minister P. Chidambaram confirms, “My vision is to get 85 percent of India into cities.”

These dedicated urbanizers claim to have history on their side: the shift from agriculture to urban industry and manufacturing is how Europe, the U.S. and, more recently, China enhanced their productivity and created capital for broader investments to modernize their economies. Read more of this post

What Korean and Japanese literatures tell about countries

2013-08-11 13:55

What Korean and Japanese literatures tell about countries
By Yoon Sung-won, Kim Da-ye
John Treat, a professor of East Asian languages and literature at Yale University, is a rare Western scholar with extensive insight into Korean literature, especially that from the Japanese colonial period. His association with Korea was formed almost accidentally, partly because he had long hair in his youth. In 1971, Treat was sent to Vietnam to serve as a civilian employee in a military hospital. After six months of service, he went to Japan for “rest and recreation” where he witnessed a stark contrast between the war-torn Vietnam and the peaceful, affluent and liberated Japan. Treat went back to Japan as a student, and his girlfriend and he planned to travel to Taiwan during the summer vacation. He wasn’t granted a visa because of his lengthy hair. The couple decided to visit Korea instead, taking a boat from Kobe to Kyushu and then to Busan. They spent a week in Korea, hitchhiking around. More than 20 years later, Korea revisited Treat’s life. The scholar specialized in Japanese literature back then, and a Japanese colleague recommended him to study Korean writers under the Japanese colonial rule who wrote both in Korean and in Japanese. Treat found the idea interesting and began learning the Korean language in his 40s. The author of several works of fiction  and non-fiction is now an authority in the study of pro-Japanese Korean writers under the colonial rule. Last year, he published a paper on Yi Kwang-su, a prominent writer whose reputation has been tainted for having collaborated with the Japanese regime, in the Journal of Asian Studies. In the abstract, Treat wrote, “Yi Kwang-su, Korea’s most distinguished modern novelist as well as one of its more notorious pro-Japanese partisans during the colonial period, offers a compelling test case for how we might attempt to not only understand, but also morally adjudicate, his support of Japan’s occupation of his country. With the ongoing debate over collaboration with the German Reich in mind, I contend that the case of colonial Korea presents us with important first-order ethical issues to resolve.” The professor is now working on a book dealing with the same subject, “Collaboration, Conversion and Modernity: Korean Writers under Japanese Rule.” Treat visited Korea this summer for a special purpose — teaching at Ewha Womans University. He taught an unusual subject, “Same Sex Desire in East Asian Literature.” He said he had a “wonderful experience” at Ewha. On the day of the interview, he was going to grade final papers. He said he previewed the papers in class and he found the level of analysis was as high as he would get at Yale. The professor talked to The Korea Times further about how Japanese and Korean literature differ from each other; why Korea hasn’t won a Nobel Prize in literature; and what he thinks of pro-Japanese Korean writers during the colonial period. The following questions and answers have been edited. Read more of this post

Korean Companies Struggle to Gain Traction in Japan

August 11, 2013

Korean Companies Struggle to Gain Traction in Japan

By ERIC PFANNER

TOKYO — Brandishing a new Sony Xperia as she left a mobile phone shop in a trendy part of Tokyo, Nisako Hanawa, a 17-year-old student, explained that she had chosen that brand “because of its cool design and its good reputation.”

Asked about another leading smartphone maker, Samsung Electronics of South Korea, she and a friend exchanged quizzical looks. “Samsung?” Miss Hanawa asked. “I haven’t heard of it.”

Samsung Electronics may be the largest consumer electronics company in the world, selling one out of every three smartphones and one in five televisions. LG, the other giant electronics maker in Korea, has a significant share of TV and washing machine markets in Europe and the United States. But here in trend-obsessed Japan, consumers have not caught on that elsewhere in the world some Korean products are knocking Japanese rivals off the shelves.

Many Japanese explain away the absence of Korean brands by claiming the quality is inferior. “South Korean products are still affected by a ‘cheap and nasty’ image, which remains prevalent among Japanese above a certain age,” wrote Hidehiko Mukoyama, an economist at the Japan Research Institute, in a research paper about Japan-South Korea trade relations.

The evidence says otherwise. Korean-made TVs, phones, washers and cars rate higher than many Japanese brands in independent tests by Consumer Reports, CNet and others. LG TVs have been getting favorable reviews in Japan. A local magazine, HiVi, recently rated a 32-inch, high-definition, 3-D-capable LG set-top ahead of televisions in its category from Mitsubishi and Sharp.

The unfamiliarity is not because tariffs make Korean products costlier. Japan eliminated the import duty on many Korean electronics products, including TVs and smartphones.

But this last holdout is finally being cracked open. In 2008, LG stopped selling its televisions in Japan, but it reintroduced them two years later. Now many of the biggest electronics retailers in Japan, including the No. 1 player, Yamada Denki, and the second-biggest chain, Biccamera, sell LG TVs.

At a suburban Tokyo branch of Nojima, a major Japanese retail chain, LG televisions are displayed prominently alongside sets from domestic brands like Sony, Sharp, Panasonic and Toshiba.

Kohei Tomizawa, a sales clerk, said LG TVs were selling briskly, though not as well as those from Sony. LG sets “tend to be more popular with younger people, and younger people don’t buy as many televisions as older customers, who tend to prefer well-known Japanese brands, like Sony,” Mr. Tomizawa said.

The quality myth may be less believable to a younger generation of consumers. With South Korean food and television shows popular in Japan, LG has latched on to the popularity of K-pop music across Asia and beyond. It has run ads for its smartphones in Japan that feature Kara, a Korean group that is popular in Japan.

“I think things have improved compared to the old days, thanks to the influence of Korean popular culture,” said Byoung-Uk Lee, assistant director of the Korea Trade-Investment Promotion Agency in Japan.

LG said it sold about $675 million worth of TVs, smartphones, washing machines, vacuum cleaners and other goods in Japan last year, up about 45 percent from 2010.

Samsung also pulled out of Japan in 2007, after failing to make much of a dent here. (The biggest Korean carmaker, Hyundai Motor, also beat a retreat from Japan shortly thereafter.)

But Samsung has come back for a second shot in Japan, starting with its smartphones. NTT Docomo, the largest mobile phone carrier in Japan, has turned to Samsung to try to fend off rising competition from two rival network operators, SoftBank and KDDI.

Those two companies have been poaching customers from Docomo, which does not offer the popular iPhone. “Docomo needs Samsung, and that is giving it an opening,” said Michito Kimura, an analyst at IDC, a research firm.

Starting in May, Docomo plastered Japanese cities with advertising posters featuring the flagship Samsung Galaxy S4 smartphone alongside a Sony Xperia A. The campaign, for what Docomo bills as its “summer collection,” is the first time that any Japanese carrier has given such prominence to a Samsung phone.

So far, the results of Docomo’s embrace of Samsung have been mixed. Analysts say Samsung smartphones have been a tougher sell in Japan than in other countries where consumers are familiar with the brand through the televisions and other goods.

Docomo said that under its summer promotion, it had sold 400,000 Galaxy S4 phones through mid-July, but that was less than half the total of Sony Xperia A handsets.

Apple dominates the Japanese smartphone business, holding a 40 percent market share in the first quarter, according to IDC. Sharp, with 15 percent, and Sony, with 13 percent, follow. Samsung has not cracked the top five vendor ranks.

Japanese and Korean news media have reported that Samsung is considering re-entering the Japanese television market. Samsung declined to comment.

To succeed in Japan, Samsung will have a lot of work to do changing a mind-set. But some analysts, like Sea-Jin Chang, the author of “Sony vs. Samsung: The Inside Story of the Electronics Giants’ Battle for Global Supremacy,” are convinced that South Korean companies have a brighter future in Japan.

“Japanese customers favor domestic producers,” said Mr. Chang, executive director of the Center for Governance, Institutions and Organization at National University of Singapore. “No Korean or Western firms were good enough for them, except Apple. But you will find more Korean firms accepted in the Japanese mainstream in the future.”

Falsified Reports After Fukushima Fan Anti-Nuclear Korea

Falsified Reports After Fukushima Fan Anti-Nuclear Korea

For Seoul residents, South Korea’s decision to keep four nuclear reactors offline because of faked safety reports means power shortages, and a summer of sweltering homes and offices. Lee Jin Gon has bigger concerns.

“We feel unsafe day and night,” Lee said, pointing at the cause of his nervousness, one of the closed reactors in the town of Yangnam, a four-hour journey southeast of the capital. “We became worried about nuclear safety after the Fukushima accident. Now it’s worse,” he said, adding that locals have held protests to close the whole plant. Read more of this post

Mantra to Expand in Indonesia Amid Tourism Boom: Southeast Asia

Mantra to Expand in Indonesia Amid Tourism Boom: Southeast Asia

Mantra Group, the Australian hotel operator controlled by CVC Asia Pacific Ltd., plans to open 20 hotels in Indonesia in the next three years and manage about the same number of properties in Thailand in six years.

The closely-held company, which opened its first resort under its four-star Mantra brand in March in Bali, is in talks to add six more hotels in the resort province, Chief Executive Officer Bob East said in an interview in Sydney. The Gold Coast, Queensland-based company, which is also in initial talks to run a hotel in Jakarta, will either sign management agreements or take minority stakes in properties in the country, he said. Read more of this post

Indonesia: A delicate succession; In next year’s presidential election, all eyes will be on the governor of Jakarta

August 11, 2013 4:30 pm

Indonesia: A delicate succession

By Ben Bland

In next year’s presidential election, all eyes will be on the governor of Jakarta, writes Ben Bland

Almost every Thursday for the past six years, Maria Katarina Sumarsih has stood outside Indonesia’s presidential palace with a group of other victims of human rights abuses, calling for justice. Some protest about the hundreds of thousands who were killed in the anti-leftist purges of the late 1960s, which cemented the rise to power of General Suharto, who ruled Indonesia from 1966 to 1998. Ms Sumarsih is mourning the loss of her son, who was one of more than a dozen student protesters shot dead by the army while calling for political and economic reforms in central Jakarta during the chaotic period that followed the ousting of Suharto. Read more of this post

Taiwan struggles to win over Chinese students

August 11, 2013 1:45 pm

Taiwan struggles to win over Chinese students

By Sarah Mishkin in Taipei

When Taiwan opened its universities to mainland Chinese students two years ago, many in the Taipei government hoped the decision might help the small democracy to influence its authoritarian neighbour. Many of the hundreds of mainland students who have since arrived say their studies have been an eye-opening look at how democracy and an open civil dialogue can work in Chinese society. But Taiwan’s anxiety about its growing economic dependence on China, which has never relinquished its claim to the island, is hampering its soft power push, say students and professors. Read more of this post

Even Dead Feel the Weight of Debt Crisis in Spain; Funeral services carry the highest VAT tax rate, alongside entertainment like nightclubs, and luxury products

Even Dead Feel the Weight of Debt Crisis in Spain

By Alexandra Di Stefano Pironti on 12:05 pm August 10, 2013.
Barcelona,Spain. Even in death, people in Spain cannot escape the economic crisis. Funeral services carry the highest VAT (value added tax) rate, alongside entertainment like nightclubs, and luxury products. “I paid over 7,000 euros ($9,300) for my husband’s funeral, and it was a simple service, with one of the simple coffins, which cost 2,600 euros ($3,450), without mementos or music, and only a few flowers. Besides, instead of a burial, we had him cremated, which is even less expensive,” Ana Mara Robles, a 66-year-old pensioner, told IPS. “For a middle-class family, that price is abusive,” said Robles, who retired a few months ago after working for years in the Barcelona traffic department. Jordi Valmana general manager of the “Cementiris de Barcelona” municipal company that administers the cemeteries in this city in northeast Spain, said: “Funeral services are essential for society and the public.” “The fact that VAT was raised from eight to 21 percent in late 2012 is appalling, and I think it’s a political mistake for funeral services to be charged the same tax as discotheques,” he told IPS. Read more of this post

They come for the politics, but stay for the money; Washington transforms political believers into members of the get-rich club

August 11, 2013 6:58 pm

They come for the politics, but stay for the money

By Jacob Weisberg

Washington transforms political believers into members of the get-rich club, says Jacob Weisberg

It’s a funny thing about Washington: everyone complains about it, but no one ever seems to leave. Take former House leader Richard Gephardt. The Missouri Democrat twice ran for president as a voice of organised labour. Today he pockets $7m a year to lobby on behalf of corporate clients and advise them on busting unions. Or consider former journalist Jeffrey Birnbaum, who used to write exposés of the lobbying trade for The Wall Street Journal. Today he works for Haley Barbour, Mississippi’s Republican former governor who is now one of the most influential lobbyists in Washington. Read more of this post

Bond Hubris Overwhelms Fed in Riskiest Sectors of Credit Markets

Bond Hubris Overwhelms Fed in Riskiest Sectors of Credit Markets

Bond investors trying to divine when the Federal Reserve will reduce its unprecedented monetary stimulus are increasingly looking to the riskiest parts of the debt market, which are booming like before the financial crisis.

The amount of loans made this year that lack standard protections for lenders exceed the all-time high set in 2007, and only one other time have investors pumped more money into funds that buy lower-rated loans than they did last week. Bonds rated in the lowest category of junk accounted for the greatest percentage of speculative-grade offerings last month since 2011. Read more of this post

The Next Private-Equity Investors: Mom and Pop

 | SATURDAY, AUGUST 10, 2013

The Next Private-Equity Investors: Mom and Pop

By LAWRENCE C. STRAUSS | MORE ARTICLES BY AUTHOR

Private-equity holdings, which are illiquid and usually take many years to bear fruit, normally aren’t associated with mutual funds, which provide daily liquidity. But the day is fast approaching when mom-and-pop investors will be able to invest in private-equity holdings, says David M. Rubenstein, co-CEO

The Carlyle Group’s David Rubenstein sees mutual funds eventually offering small investors a chance to get a piece of the action. The Carlyle Group (ticker: CG), a Washington, D.C.–based private-equity firm that went public in 2012. Since Rubenstein, now 64, helped found the firm in 1987, its assets have gone from $5 million to about $180 billion. Carlyle is one of the industry’s behemoths, along with rivals such as Blackstone Group (BX) and KKR (KKR). Carlyle’s portfolio includes stakes in TCW Group, an asset manager; HCR ManorCare, which owns and operates nursing homes and assisted-living facilities; and Accudyne Industries, whose products include air compressors. Rubenstein says that while flows from institutional investors, such as pension funds, haven’t returned to pre-financial-crisis levels, more money now is pouring in from sovereign wealth funds and private banks. Last week, while announcing a disappointing second-quarter loss of seven cents a unit, the firm disclosed that it had raised $7 billion for future investments. Although Carlyle invests all over the world, the U.S. “is by far the most attractive place in which to invest, certainly for the types of things that we do,” Rubenstein adds. Barron’s spoke with him recently in his midtown Manhattan office. Read more of this post

Deutsche Börse’s News Service for Traders Draws Scrutiny of Investigators; A look at Need To Know News sheds light on growing concerns about data releases

August 11, 2013, 10:38 p.m. ET

Deutsche Börse’s News Service for Traders Draws Scrutiny of Investigators

A look at Need To Know News sheds light on growing concerns about data releases

BRODY MULLINS  and SCOTT PATTERSON

Need To Know News was formed in 2004 by a Chicago investment firm, Allston Trading, whose traders thought they sometimes weren’t getting economic data as fast as some competitors. John Harada, pictured here, is an Allston co-founder who later became the news service’s owner.

WASHINGTON—Several times a month, the Labor Department invites news reporters to a sealed room for an early look at soon-to-be-released reports such as the unemployment rate. One organization attending in recent years stands out from the rest. Founded by an investment firm and now owned by the Deutsche Börse stock exchange, Need To Know News has operated with an overriding mission: sending data directly from the government through high-speed lines to financial firms that are able to trade on it instantly. Some have paid $375,000 a year for the service. The ability of such an organization to gain a position at the heart of the government’s system for releasing economic reports turns on its head an embargo arrangement created decades ago to give writers time to digest complex data and produce reports for broad public dissemination. Read more of this post

Money managers trying to gauge the stock market’s direction have started looking to the buyout business for signals, and they don’t like what they are seeing

Aug 11, 2013

Stock Investors Take a Cue From Private Equity

By E.S. Browning

Money managers trying to gauge the stock market’s direction have started looking to the buyout business for signals, and they don’t like what they are seeing. With the Dow Jones Industrial Average up 18% this year and the Federal Reserve planning to cut back on the bond-buying it uses to stimulate markets, some investors worry that the stock market has gotten pricey and could pull back. They see evidence in the behavior of buyout firms that specialize in taking companies private. “There are a lot of people who think this is a better time to sell than to buy,” and in particular the buyout firms, said David Joy, chief market strategist at Ameriprise Financial Inc., which oversees $700 billion for its clients. When sophisticated investors pull back, some analysts believe, it is a sign that the smart money is growing skeptical on the outlook for stocks. Read more of this post

Insider Case Highlights Ties of Friends, Family; Prosecutors Allege a U.S. Couple Made More Than $1 Million on Tips From a Banker

August 11, 2013, 5:42 p.m. ET

Insider Case Highlights Ties of Friends, Family

Prosecutors Allege a U.S. Couple Made More Than $1 Million on Tips From a Banker

JEAN EAGLESHAM

Married in 2007, millionaires in 2012, fugitives in 2013—now, Shawn Hegedus and Danielle Laurenti sit in Mecklenburg County jail in North Carolina, awaiting federal trial.

In one hot week last summer, prosecutors allege, the couple made more than $1 million from insider trading, spent most of it on 550 gold bars in midtown Manhattan and laundered $100,000 in a Las Vegas casino. Read more of this post