Missed call has become part of daily life in India as a proxy for a pre-decided short message like “thinking of you” or “call me back” and often morph into modern-day Morse codes

Mobile advertising in India: Marketing a missed call

Aug 17th 2013, 8:30 by A.A.K. | MUMBAI

A TELEVISION advertisement in India for a mobile-phone operator opens with four friends staring forlornly at their car’s smashed windshield. “Call the police,” mutters one. His friend whips out a phone, dials for help and promptly hangs up after one ring. Others look at him quizzically. “I’ve given them a missed call,” he says sheepishly. “They’ll call back.” Everyone, incredulous, rolls their eyes in his direction, as the voiceover encourages viewers to switch to the operator’s dirt-cheap call rates.

The ad, in good humour, portrays how the missed call has become part of daily life in India. According to one estimate, 65% of India’s 860m mobile subscribers prefer it to a quick call. It is a proxy for a pre-decided short message like “thinking of you” or “call me back”. Missed calls often morph into modern-day Morse codes too. Roadside tea vendors routinely accept dropped calls from nearby mom-and-pop stores as a nudge for service; newspapers use it to urge customers to renew subscriptions; and bank balances can be requested the same way. Read more of this post

The Problem With Delhi’s Rich Kids: In India’s capital, the children of the nouveau riche often get whatever they want, apart from happiness

August 18, 2013, 9:00 AM

The Problem With Delhi’s Rich Kids

By Vibha Kumar

A woman I went to college with in New Delhi, now 29, lives in her family home on Prithviraj Road, one of the toniest parts of the capital. She has a shiny new convertible BMW 3 series, bought by her father. She doesn’t have a job. She called me recently and we met for lunch. She looked dull and withdrawn. She told me she was extremely depressed and felt that her life wasn’t worth living. She isn’t the only Delhi rich kid to feel this way. Sanjay Chugh, a Delhi-based psychiatrist, says he treats three or four young, wealthy, unhappy patients a day. “Such children are often brought up being told that they have nothing to worry about and that money can take care of everything,” he said. Often, newly wealthy parents don’t want their children to go through the hardships they experienced growing up, Mr. Chugh says. But they fail to teach them there is more to life than fancy drinks, new toys and branded clothes. On a recent evening at a posh lounge in Delhi, I saw Prada and Gucci-clad teenagers arrive in Lamborghinis, Jaguars and Porsches. They air kissed and went to the bar. “Hedonism is back,” a note on bar’s website says. After an hour or so of drinking, a chubby guy in the group got the bill. “Oh, just 60? Not bad,” he said loudly. It was 60,000 rupees ($1,000.) An acquaintance in Delhi says she spends most afternoons in her apartment, sitting on the couch drinking beer and smoking marijuana. Read more of this post

India can’t be a Jugaad Economy Forever

India can’t be a Jugaad Economy Forever

by Dinesh Narayanan | Aug 19, 2013

India has to implement key reforms in at least three areas—energy, land and labour—to get its economy back on track. It also needs to expand the ambit of economic and political freedom

Overview.indd Overview.indd

World Bank data suggest that India was ninth in the world in terms of new businesses registered in 2011. The cost of starting up a business is still high but it has steadily fallen from 70.1 percent of per capita gross national income in 2008 to 49.8 percent in 2012. The time taken to start a business in India has fallen from 33 days four years ago to 27 days in 2012. Newly released Planning Commission numbers show that India reduced extreme poverty by 15.3 percent  in seven years; that is, 138 million people were lifted out of absolute misery between 2004-05 and 2011-12. In the same period, millions of Indians moved up the social ladder to be counted as middle class. Sales of luxury cars, designer clothes and high-tech gadgets have been growing at 15-20 percent. A Bain & Company report on luxury has been quoted as estimating the number of people with disposable incomes of over $100,000 to top 132,000 in 2013, up 60 percent since 2006. Read more of this post

Chaebol criticized for handing shares to minors in advance to pay less gift tax

2013-08-19 10:54

Chaebol criticized for handing shares to minors

The number of stock-rich South Korean minors jumped 10 percent this month from a year earlier, data showed Monday, as more rich people handed over wealth to their offspring in advance to pay less gift tax. According to the data by local research firm Chaebul.com, the number of minors with shares worth more than 100 million won ($89,887) came to 268 as of Friday, compared to 243 tallied a year earlier. The number of South Korean minors with shares worth more than 1 billion won also jumped 31.3 percent over the cited period to reach 105, the data also said. Of the minors tallied, seven of them had shares worth more than 10 billion won. The richest in terms of value of shares held was the GS Group’s Executive Vice President Huh Yong-su’s eldest son, whose shares were worth 44.5 billion won, trailed by his second son at 18 billion won. The eldest son of Chung Mong-jin, who heads chemicals maker KCC Corp., ranked third with 17.2 billion won. The research firm said the on-year increase was brought on by a drop in the local bourse this year that made it cheaper for stockholders to turn over shares to their kids. Lower stock prices translate into lower gift taxes. South Korea’s benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,920.11 Friday, down 1.97 percent from 1,957.91 tallied a year earlier. (Yonhap)

Korea’s leading brokerage houses are reeling from the unprecedented earning shocks many suffered between April and June in the wake of the prolonged market slump

2013-08-18 16:48

Soaring loss hits Hyundai Securities

By Yi Whan-woo
A number of the nation’s leading brokerage houses are reeling from the unprecedented earning shocks many suffered between April and June in the wake of the prolonged market slump. Among them, Hyundai Securities suffered the worst performance, with its operating loss expanding to 25.6 billion won ($23 million) in the first quarter from the previous year’s 11.4 billion won loss. Brokerages close their books in March. Daeshin Securities also had its operating loss more than double to 14.3 billion won during the same period. The worsening performance was due mainly to a toxic mixture of sluggish trading caused by the prolonged market slump and the rise in yields on bonds following U.S. Federal Reserve Chairman Ben Bernanke’s remark on ending the economic stimulus policy. Bernanke said in June that the U.S. economy offers hints of the possibility of beginning to slow the pace of its bond-buying stimulus. KDB Daewoo Securities, the No. 1 market player, posted an operating profit of 3.76 billion won ($3.36 million) in the April-June period, down 86.8 percent from the previous year and worse than the 56 percent forecasted by FnGuide, a financial news provider. Samsung Securities posted an operating profit of 15.4 billion won, a 63 percent year-on-year decrease. Mirae Assets Securities said its operating profit fall by more than six-fold during the same period, down 19.8 billion won in 2011 to 3 billion won this year. In contrast, there are a couple of firms that have managed to weather the market slump. Korea Investment & Securities posted an operating profit of 24.7 billion won in the first quarter, up 10 percent from a year before. Shinhan Investment, the securities arm of Shinhan Financial Group, and Hana Daetoo Securities, also saw their operating profits jump by 298 percent and 606 percent, respectively, to 19.7 billion won and 4 billion won, during the cited period.

Older S. Koreans flock to smartphones

Older S. Koreans flock to smartphones

Weon Yo-hwan/ Sohn Yoo-ri

South Korea’s ‘Silver Mobilian’ is making headway in maneuvering smart devices. ‘Silver Mobilian’ is the newly-coined term that combines ‘silver’ with ‘mobilian’ referring to those changing their way of living with mobile devices. It means financially well-off older generation who utilizes mobile devices and social networking service (SNS) in active manners. Smart devices including smartphones and tablet PCs are no longer excusive tools for young generation. The rate of wireless internet usage among those in their 50s grew a startling 35.2 percent compared to a year ago, according to the Korea Internet & Security Agency (KISA)’s report released earlier this year. The growth among those in their 50 was steeper than among those in their 20s (5.3 percent) or 30s (19.6 percent).  Read more of this post

The Kaesong Trap: Restarting the industrial zone may restrict Seoul’s ability to respond to the North’s provocations

August 18, 2013, 1:03 p.m. ET

The Kaesong Trap

Restarting the industrial zone may restrict Seoul’s ability to respond to the North’s provocations.

BRUCE KLINGNER

South and North Korean negotiators reached a preliminary agreement last week to reopen the jointly run industrial zone in Kaesong. But their success against considerable odds raises several questions.

Most fundamentally, why does Seoul want to return to Kaesong in the first place? The benefits lop-sidedly accrue to Pyongyang, providing a steady source of hard currency to the beleaguered regime. On the southern side, there is no economic incentive, corporate advocacy or political interest in expanding the complex. Even before the most recent round of North Korean threats, Kaesong was on life-support. Read more of this post

Thai Growth Slows as Scope for Monetary Stimulus Seen Limited

Thai Growth Slows as Scope for Monetary Stimulus Seen Limited

Thai economic growth slowed for a second quarter as exports cooled and local demand weakened, with rising household debt restricting the scope for monetary easing.

Gross domestic product increased 2.8 percent in the three months through June from a year earlier, after expanding a revised 5.4 percent in the previous quarter, the National Economic and Social Development Board said in Bangkok today. The median of 16 estimates in a Bloomberg survey was 3.3 percent.

Southeast Asian nations from Singapore to Indonesia have seen exports falter as growth slows in China, and Europe and Japan struggle to sustain economic recoveries. The Bank of Thailand will hold the policy interest rate at 2.5 percent at its Aug. 21 meeting, a Bloomberg survey showed, after Assistant Governor Paiboon Kittisrikangwan said last month that household debt at 80 percent of GDP limits the scope for further easing. Read more of this post

The maker of the popular Beats by Dr. Dre headphones is looking to buy out its Asian partner and bring in a new investor that can provide it with fresh funds for growth; HTC’s shares have lost nearly 90% of their value since April 2011, when HTC was second only to Apple in U.S. smartphone sales

Updated August 18, 2013, 6:50 p.m. ET

Beats By Dre Looks to Drop HTC

Headphones Maker Is in Talks With Investor for Debt Financing, Minority Stake

SERENA NGEVA DOU and HANNAH KARP

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Luke Wood, left, the president of Beats Electronics, with co-founders Jimmy Iovine and Dr. Dre in 2012.

The maker of the popular Beats by Dr. Dre headphones is looking to buy out its Asian partner and bring in a new investor that can provide it with fresh funds for growth, people familiar with the matter said. The moves come as the founders of Beats Electronics LLC—music mogul Jimmy Iovine and American hip-hop producer and artist Andre Young, better known as Dr. Dre—are broadening the company’s business from headphones to include speakers, audio systems in cars and consumer electronics and a soon-to-be-launched online streaming music service. It also comes only a couple of months after the company shelved a separate deal that would have raised hundreds of millions of dollars in cash for acquisitions and investments, as well as allowing the founders to be paid a dividend without giving up their controlling interest in Beats Electronics.

Read more of this post

Disruptions: Texting Your Feelings, Symbol by Symbol

AUGUST 18, 2013, 10:58 AM

Disruptions: Texting Your Feelings, Symbol by Symbol

By NICK BILTON

10-BITS-tmagArticle

A colorful symbol alphabet that contains nearly a thousand images of cute animals, food items and expressive smiley faces can sometimes convey what words cannot.

I recently had to sit my friend down for a modern-day digital intervention. It wasn’t that he was using his phone at dinner, or that he was hitting “reply all” on e-mail threads, or leaving unnecessary voice mail messages. No, this was much worse. A few weeks ago my friend, Michael Galpert, who is 30-year-old and is founder of SuperCalendar, a personal assistant Web site, lives in New York City and was visiting the West Coast for work. I set him up on a date with a friend who lives in Los Angeles. The first date went well and the two decided to see each other again. Read more of this post

Next Out of the Printer, Living Tissue

August 18, 2013

Next Out of the Printer, Living Tissue

By HENRY FOUNTAIN

20PRIN-articleLarge

Darryl D’Lima, an orthopedic specialist, worked with a bioprinter in his research on cartilage at Scripps Clinic in San Diego.

SAN DIEGO — Someday, perhaps, printers will revolutionize the world of medicine, churning out hearts, livers and other organs to ease transplantation shortages. For now, though, Darryl D’Lima would settle for a little bit of knee cartilage.

Dr. D’Lima, who heads an orthopedic research lab at the Scripps Clinic here, has already made bioartificial cartilage in cow tissue, modifying an old inkjet printer to put down layer after layer of a gel containing living cells. He has also printed cartilage in tissue removed from patients who have undergone knee replacement surgery. Read more of this post

Inside the Phone-Plan Pricing Puzzle; complex plans make comparison shopping nearly impossible, a tool that discourages customers from jumping ship

July 31, 2013, 7:52 p.m. ET

Inside the Phone-Plan Pricing Puzzle

An Analysis of Some 700 Wireless Options Underscore the Complexity and Confusion in the Market

THOMAS GRYTA

To understand how confusing wireless plans have become, just walk into an AT&TInc. T -0.49% store. The second largest U.S. carrier offers far more plans than its rivals—nearly 30 combinations alone for individuals, and many of its packages contradict one another. For example, customers can sign up for 900 minutes of talk, unlimited texts and 300 megabytes of data for $100 a month. But a “mobile share” plan that is $30 cheaper offers unlimited talk and texts and the same amount of data. The muddled pricing isn’t unique to AT&T. The four major carriers offer a total of nearly 700 combinations of smartphone plans—a family of five alone would have more than 250 options to choose from, according to a Wall Street Journal analysis of smartphone plans offered by the four biggest U.S. carriers. “It is always a cumbersome, somewhat root canalish experience,” said Erin Riordan, of Naperville, Ill., who has five children and manages an account with six lines from AT&T that produces a $495 monthly bill. She has considered switching carriers, but has been overwhelmed by the detailed service contracts, network coverage, the multiple plan options and whether moving will actually save her any money. “I consider myself to be pretty educated but it makes me want to stick a fork in my eye,” Mrs. Riordan said. Confusing plans are as old as the cellphones themselves, although there is some hope that the structures may simplify as competition in the industry heats up. Read more of this post

How LinkedIn Became A Wall Street Juggernaut

How LinkedIn Became A Wall Street Juggernaut

GLENN SOLOMON

Saturday, August 17th, 2013

Glenn Solomon is a Partner with GGV Capital. Some of his recent investments include Pandora, Successfactors, Isilon, Domo, Square, Zendesk, Quinstreet and Nimble Storage. His personal blog, focused on growth stage entrepreneurs who are thinking big; can be found at here. Follow him on Twitter@glennsolomon.

In 2010, had you suggested to the smartest Silicon Valley entrepreneurs and investors that LinkedIn would have a larger market value in 2013 than Groupon, Zynga or Twitter, you would have been laughed at. Had you hypothesized that LinkedIn would be worth more than Groupon, Zynga and Twitter combined and worth nearly one-third the value of Facebook, no one would have believed you.  LinkedIn just wasn’t as exciting as the internet darlings of the day, and, as a result, there were many LinkedIn doubters at that time, myself included. Read more of this post

Graphene: A new miracle in the material world; It is lighter than a feather, stronger than steel, yet incredibly flexible and more conductive than copper

Graphene: A new miracle in the material world

Britain is investing £60m in developing graphene. But are our businesses already falling behind in the race to exploit it, asks Rebecca Clancy.

Graphene is a planar sheet of carbon atoms arranged in a hexagonal pattern. Stacked graphene sheets form graphite, used in pencils.

By Rebecca Clancy

9:23PM BST 18 Aug 2013

It is lighter than a feather, stronger than steel, yet incredibly flexible and more conductive than copper. It has been hailed as “the miracle material”, its possible uses apparently almost endless. The material is graphene, a single layer of carbon atoms forming a regular hexagonal pattern, extracted from graphite, with astonishing properties and impressive potential. Unbreakable, foldable touch screens for mobile phones; a revolution in how drugs are administered; protective coating for everything from food packaging to wind turbines, faster computer chips and broadband; batteries of infinitely higher capacity than today’s – these are just a few of graphene’s possibilities. Read more of this post

Dash Is Turning Cars Into Futuristic, Data-Collecting Machines With An App And A Cheap Plastic Dongle

Dash Is Turning Cars Into Futuristic, Data-Collecting Machines With An App And A Cheap Plastic Dongle

ALYSON SHONTELL AUG. 17, 2013, 12:42 PM 3,728 7

photo 4-11

Dash is made possible by this dongle which fits in a car’s OBD port. Dash can tell you why your check engine light is on and what needs to be replaced in your car.

Jamyn Edis is the CEO and co-founder of Dash, a platform that tracks 300 real-time data points in cars to make them smart vehicles.

A few months ago, just as the weather was starting to warm, a green Mini Cooper convertible rolled to a stop in front of Business Insider’s New York City headquarters. The door popped open and Jamyn Edis greeted me with a beaming smile and a pair of aviators. We were ready to take a Dash around Manhattan. Jamyn Edis and Brian Langel have been creating smart technology products for more than two decades combined. Last year, as HBO’s VP of Emerging Technology and Research Development, Edis entered the New York startup scene and advised founders going through a competitive accelerator program called TechStars. Now, the mentor has become the mentee. Edis and Langel recently founded a company called Dash, which was selected to be one of 11 startups in the 2013 TechStars New York class. Dash’s goal is to turn all vehicles into talking, data-collecting smart cars using nothing but a plastic dongle and a mobile app.  Read more of this post

“Sync is the new save”; Dropbox’s ambitious bid to “replace the hard drive” by making it easy for users to sign into Dropbox from many other apps

August 18, 2013 3:50 pm

Dropbox hopes to exploit tech rivalries

By Tim Bradshaw in San Francisco

“Sync is the new save,” declared Drew Houston, chief executive of Dropbox, at the cloud storage company’s first developer conference in San Francisco last month,writes Tim Bradshaw.

Mr Houston made an ambitious bid to “replace the hard drive” by making it easy for users to sign into Dropbox from many other apps. His hope is that this will make users more likely to pay for extra storage and, crucially, make them less prone to switch to Apple or Google’s rival products. Read more of this post

Beauty boxes by The Lilac Box sells like hot cakes in Malaysia

Beauty boxes by The Lilac Box sells like hot cakes in Malaysia

By Jacky Yap 19, Aug 2013

Malaysia-based The Lilac Box’s beauty boxes are a hit with consumers, selling out fast for each edition.

Earlier this year, there was a lot of hype around the beauty box subscription business. In January, we saw Australia-based bellabox closing an A$1.3 million (US$1.2 million) Series A round. Indonesia’s Lolabox was also launched by former Rocket Internet executives, with the backing of GRUPARA, one of Indonesia’s most active private equity fund.

Around the same time, Taiwan’s online beauty industry has also seen some activities. Japanese venture capital firm CyberAgent Ventures has put their skin in the game by investing in Taiwan based Fashionguide, a beauty and cosmetics social networking platform. Beauty sampling platform VanityTrove also commenced its consolidation in the Southeast Asia market with itsacquisition of Rocket Internet’s Glossybox in Taiwan. Read more of this post

Pemandu CEO: Innovation is not dead in Malaysia; Lim Kon Liang makes better hospital beds much more cheaply than the established manufacturers and they are sold to more than 40 countries world wide

Updated: Monday August 19, 2013 MYT 9:05:12 AM

Innovation is not dead in Malaysia

TRANSFORMATION UNPLUGGED BY IDRIS JALA

While innovation happens, we need it to happen much more often

WE can all certainly appreciate that one of the most difficult of things to teach – and to learn – is without doubt innovation, the ability to do things differently from how it was done before to bring about beneficial change for a person, organisation or country.

It’s almost a state of mind, an attitude which encourages the creative process in solving problems by looking at things from different angles and taking unconventional but effective measures in a holistic manner to bring about desired change. Read more of this post

Viacom to let Sony stream its programs, bypassing traditional pay TV providers

Viacom to let Sony stream its programs

BLOOMBERG

AUG 16, 2013

SAN FRANCISCO – Sony Corp. has reached a preliminary accord to stream cable television programming from Viacom Inc. over the Internet to TVs, game consoles and Blu-ray players, a source said.

Under the deal, Sony would use the Web to deliver shows such as “SpongeBob SquarePants” and “Teen Wolf” to homes with those products, bypassing traditional pay TV providers, said the source. The service also would sell Viacom shows and movies on demand. Read more of this post

Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age

Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age [Hardcover]

Susan P. Crawford J.D. (Author)

Book Description

Publication Date: January 8, 2013

Ten years ago, the United States stood at the forefront of the Internet revolution. With some of the fastest speeds and lowest prices in the world for high-speed Internet access, the nation was poised to be the global leader in the new knowledge-based economy. Today that global competitive advantage has all but vanished because of a series of government decisions and resulting monopolies that have allowed dozens of countries, including Japan and South Korea, to pass us in both speed and price of broadband. This steady slide backward not only deprives consumers of vital services needed in a competitive employment and business market—it also threatens the economic future of the nation. This important book by leading telecommunications policy expert Susan Crawford explores why Americans are now paying much more but getting much less when it comes to high-speed Internet access. Using the 2011 merger between Comcast and NBC Universal as a lens, Crawford examines how we have created the biggest monopoly since the breakup of Standard Oil a century ago. In the clearest terms, this book explores how telecommunications monopolies have affected the daily lives of consumers and America’s global economic standing. Read more of this post

What Jiu Jitsu teaches us about media companies

What Jiu Jitsu teaches us about media companies

BY BRYAN GOLDBERG 
ON AUGUST 8, 2013

For a brief period of time, I studied Brazilian Jiu Jitsu. And I wasn’t very good at it.

Nevertheless, I put in a real effort and put up with the not-so-appealing aspects of it — having some dude squash my face into the ground, gasping for breathe while a normally-stoic Korean teenager choked me, etc.

At a time when martial arts, and the UFC in particular, has grown in popularity, the very act of fighting has changed, both in reality and in the popular consciousness.

Gone are the days when 80s action stars traded punches with German terrorists. Today, we understand that fighting usually takes place on the ground, with a lot more grappling than striking. You are just as likely to win a fight by choking your opponent with your legs (i.e. a triangle choke) as you are through a good old-fashion nose break. Read more of this post

Start the Presses! It’s How You Sell Newspapers; As iconoclastic as it may sound, it’s time to stop chasing the digital ghost.

August 18, 2013, 5:32 p.m. ET

Start the Presses! It’s How You Sell Newspapers

As iconoclastic as it may sound, it’s time to stop chasing the digital ghost.

ERIC SPITZ

This month has seen a couple of successful businessmen with no newspaper experience acquire two of America’s storied media institutions. Many people are wondering why.

I cannot answer for these new owners, but I may be able to shed some light. A year ago my business partner, Aaron Kushner, and I bought Freedom Communications, which includes the Orange County Register, the nation’s 14th-largest daily newspaper. Neither Aaron nor I came from the newspaper industry, but we are both entrepreneurs inclined to question the conventional wisdom. Read more of this post

TV’s Unnatural Monopolies; The rationale for government regulation is collapsing in the face of technological change

August 18, 2013, 5:25 p.m. ET

Crovitz: TV’s Unnatural Monopolies

The rationale for government regulation is collapsing in the face of technological change.

L. GORDON CROVITZ

The big loser in the battle between Time Warner Cable TWC -0.24% and CBSCBS -0.56% is not the cable company, the network or the viewers who lost access to their favorite shows. The big loser is Washington, whose efforts to regulate what used to be called television grow more futile with every new video technology.

Lawmakers and regulators still treat broadcasters and cable operators as “natural” monopolies. That gives them a rationale to layer on bureaucratic rules setting out how the industry should be run. Read more of this post

Book-publishing giant Penguin Random House is trying its hand at television, expanding a media diversification that began a few years ago when Bertelsmann’s Random House started a movie unit to spur sales of its titles

August 18, 2013, 7:51 p.m. ET

Publisher Makes TV Play

JEFFREY A. TRACHTENBERG

Book-publishing giant Penguin Random House is trying its hand at television, expanding a media diversification that began a few years ago when Random House started a movie unit to spur sales of its titles.

Penguin Random House’s first TV co-production, “Heartland Table,” will make its debut Sept. 14 on the Food Network, starring little-known chef Amy Thielen. Ten days later, Ms. Thielen’s first cookbook, “The New Midwestern Table,” will be published by Clarkson Potter, a Penguin Random House imprint. Read more of this post

U.S. Stocks Beat BRICs by Most Ever Amid Emerging Market Flight

U.S. Stocks Beat BRICs by Most Ever Amid Emerging Market Flight

Investors are favoring U.S. stocks over emerging markets by the most ever as fund flows and volatility measures show institutions are increasingly seeking the relative safety of American equities.

Almost $95 billion was poured into exchange-traded funds of American shares this year, while developing-nation ETFs saw withdrawals of $8.4 billion, according to data compiled by Bloomberg. The Standard & Poor’s 500 Index (SPX) trades at 16 times profit, 70 percent more than the MSCI Emerging Markets Index. A measure of historical price swings indicates the U.S. market is the calmest in more than six years compared with shares from China, Brazil, India and Russia. Read more of this post

Twilight of Bernanke Years Shows No Sign of Buyer’s Rem

Twilight of Bernanke Years Shows No Sign of Buyer’s Rem

U.S. markets are backing up Ben S. Bernanke’s assertion that he has the best inflation record of any Federal Reserve chairman since World War II.

Since Bernanke took office in February 2006, inflation as measured by the personal-consumption-expenditures price index has averaged 1.9 percent. Criticism from Republicans, including House Speaker John Boehner of Ohio, that the Fed’s stimulus would spark a rapid acceleration in prices is unfounded, bond yields show. Traders anticipate prices will rise at a 2.17 percent rate in the next decade, near the Fed’s 2 percent goal. Read more of this post

The glut of capital that desperately requires guidance; Capital demands solutions that the world currently lacks

August 18, 2013 4:32 pm

The glut of capital that desperately requires guidance

By John Authers

Capital demands solutions that the world currently lacks

What happens when there is too much capital? It may be a good problem to have, but it demands solutions that the world currently lacks.

Measure capital as the sum of all financial assets and, according to the management consultants Bain & Company, global capital tripled between 1990 and 2010 – driven by financial wizardry, and increasing leverage. As financial services groups introduced new products, and populations looked for new ways to save, the supply of financial assets outstripped growth in the underlying economy. Read more of this post

Tapering plan drives investors into riskier debt

August 18, 2013 6:21 pm

Tapering plan drives investors into riskier debt

By Stephen Foley and Vivianne Rodrigues in New York

The Federal Reserve’s plan to end quantitative easing, in part to prevent financial bubbles, is in fact driving investors into riskier corners of the debt markets.

While the safest bonds have sold off hardest since Ben Bernanke, Fed chairman, set a timetable for tapering its monetary stimulus, the best-performing fixed-income assets have been the lowest-rated junk bonds. Read more of this post

More than 100 mutual funds have 80% of their assets in ETFs, which are cheaper and more efficient to trade. So why are the mutual funds that invest in them more expensive?

SATURDAY, AUGUST 17, 2013

Mutual Funds Use ETFs as a Shortcut

By STEVE GARMHAUSEN | MORE ARTICLES BY AUTHOR

ETFs have become increasingly popular with all sorts of investors—including mutual fund managers. More than 100 mutual funds have 80% of their assets in ETFs, which are cheaper and more efficient to trade. So why are the mutual funds that invest in them more expensive?

File under: If you can’t beat ’em, join ’em. The popularity of the $1.5 trillion exchange-traded-fund industry is indisputable. But what’s surprising is how popular ETFs have become with mutual-fund managers. In fact, the past five years have seen the launch of about 100 funds that hold at least 80% of their assets in ETFs, according to Morningstar. And it’s becoming more and more common for managers of conventional mutual funds to use ETFs here and there for “tactical” purposes. Read more of this post

Inverse ETFs in the Hot Seat

SATURDAY, AUGUST 17, 2013

Inverse ETFs in the Hot Seat

By BRENDAN CONWAY | MORE ARTICLES BY AUTHOR

Leveraged ETFs have a bad rap—as they should. But while they could be disastrous for your portfolio, they probably won’t damage the health of the market. Probably.

For individual investors, leveraged exchange-traded funds present a number of dangers, most prominently the chance to lose a lot of money very quickly. But are they dangerous to the health of the market, as well? These niche ETFs are built specifically for traders: They aren’t meant to be held, even overnight. If you own, say, a Direxion triple inverse Chinese-stock fund for more than a day, your investment moves in unpredictable directions, since the strategies used to create the leverage are reset every single day. So, if you hold one of these leveraged or inverse ETFs—and there are now some 250 of them—your return over time will bear little relation to the underlying index. It’s for this reason the Financial Industry Regulatory Authority has come down on the industry, and fined four big-name brokerages last year, for wrongly selling these ETFs to buy-and-hold clients. Read more of this post

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