Charlie Munger: Lessons From an Investing Giant

Aug 30, 2013

THE INTELLIGENT INVESTOR

Charlie Munger: Lessons From an Investing Giant

By Jason Zweig

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One of the least appreciated virtues in investing is courage. Filings with the Securities and Exchange Commission in March and again this month show the extraordinary gumption of Charlie Munger, Warren Buffett’s business partner and vice chairman of Berkshire Hathaway. Mr. Munger, who will turn 90 years old next Jan. 1, is a model for individual investors who wonder how they can possibly beat the professionals at their own game. The pros have more information than you, and their trading machines are faster. But you still have an edge over them—so long as you play a different game by your own, more sensible rules. You can be patient; the pros can’t. You don’t have to be part of the herd; they do. Above all, you can be brave; they almost never are. What makes Mr. Munger a model for individual investors? In the first quarter of 2009, during the most desperate days of the financial crisis, Mr. Munger took 71% of the cash at Daily Journal, a small publishing company he chairs, and poured it into the bank stocks that so many other investors were fleeing. By March 31, 2009, his bet already had gained 60%. With other purchases he made later, Mr. Munger invested $49.7 million into stocks and bonds that today are worth $128.4 million, according to financial statements Daily Journal filed on Aug. 20. Read more of this post

From humble beginnings in a father’s living room, Ng Cheong Choon’s Rainbow Loom, a kit to make bracelets out of rubber bands, has skyrocketed in popularity; 600 retailers carry Rainbow Loom, and just over one million units have been sold at a retail price of $15-17

August 31, 2013

Rainbow Loom’s Success, From 2,000 Pounds of Rubber Bands

By CLAIRE MARTIN

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Cheong Choon Ng, above, designed Rainbow Loom, a suddenly popular crafts kit that turns rubber bands into bracelets. The key to selling the kits, it turned out, was educating buyers about how to use them.

LAST weekend in Fair Harbor, N.Y., on Fire Island, a few dozen children gathered on the boardwalk for the local tradition of selling lemonade, baked goods and painted seashells to passers-by at sunset. Among the children was Julia Colen, a 12-year-old vacationer from New Jersey, who in addition to hawking cupcakes and drinks was presiding over a stand overflowing with brightly colored bracelets. Julia and a friend had made the jewelry out of tiny rubber bands, using a crafts kit called Rainbow Loom. “We had a lot, at least 100,” Julia estimated of their inventory, which they priced at $1 to $2 apiece. Sales were impressive that night — “we made like $68,” she said. Read more of this post

What Amazing Leaders Do Differently

What Amazing Leaders Do Differently

Shane Snow

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In my work as a startup founder over the last few years, I’ve been fortunate enough to find myself surrounded by some incredible young leaders, be mentored by a few wise executives, and spend time with rockstar leadership thinkers like Jack Canfield and Sir Freeman Dyson. It’s been humbling, but awesome. As I’ve attempted to step into the role of leader myself (along with my two fantastic cofounders), and fumbled repeatedly along the way, I’ve come to appreciate great leaders who make what turns out to be a very hard thing look easy. Amazing leaders often do things counter-intuitively. Here are seven patterns I’ve observed in the best leaders in my life, despite the natural pressure for powerful people to do otherwise:

They change their minds.

One of the most courageous things a leader can do is admit when he or she is wrong, and admit it often. Tim Cook, CEO of Apple, said that the late Apple founder Steve Jobs was a notorious, but deliberate, flip-flopper. “I saw it daily,” Cook said in an interview with AllThingsD. “This is a gift, because things do change, and it takes courage to change. It takes courage to say, ‘I was wrong.’” Read more of this post

The Seven Deadly Sins of Investing; Financial crisis be damned—investors are still making the same mistakes the always have

August 30, 2013, 5:58 p.m. ET

The Seven Deadly Sins of Investing

Financial crisis be damned—investors are still making the same mistakes the always have.

KIRSTEN GRIND

It has been nearly five years since the depths of the U.S. financial crisis, and investors have learned a lot since then. Or have they? Despite the downturn that left many investors reeling from losses on everything from real estate to the stock market, when it comes to investor behavior—those hard-wired instincts that drive us all—little has changed, say psychologists and financial advisers. Investors still make the kinds of mistakes that have gotten them in trouble for decades. They are wooed by the hottest new trend, they want to follow the crowd—consequences be damned—and they just can’t seem to pay enough attention to important details, such as the steep annual fees charged by many mutual funds. Read more of this post

What if Apple’s iWatch is… a TV?

What if Apple’s iWatch is… a TV?

By Jonny Haskins, 11 hours ago

Jonny Haskins has a theory about Apple’s iWatch. It was originally published on his own blog, Pixel Lounge.

Like many people, I enjoy guessing as to what technology is going to bring and what innovations will transform our lives.  The quicker we all innovate, the quicker I will be to owning my life’s dream – that flying car (it better be in my lifetime!). In today’s world, things are so mundane and boring, so drip-fed to us commercially and unsystematically, that our dreams of the future are comparatively dull.  An exception is Elon Musk who seems to be the one person in the world who’s challenging this approach and is not scared about taking on the auto industry with his electric Tesla’s and hovering rockets, not to mention the challenging foray of other ideas like a levitating Hyperloop train in a vacuum tube. Read more of this post

Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change

Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change Hardcover

by Edmund S. Phelps (Author)

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In this book, Nobel Prize-winning economist Edmund Phelps draws on a lifetime of thinking to make a sweeping new argument about what makes nations prosper–and why the sources of that prosperity are under threat today. Why did prosperity explode in some nations between the 1820s and 1960s, creating not just unprecedented material wealth but “flourishing”–meaningful work, self-expression, and personal growth for more people than ever before? Phelps makes the case that the wellspring of this flourishing was modern values such as the desire to create, explore, and meet challenges. These values fueled the grassroots dynamism that was necessary for widespread, indigenous innovation. Most innovation wasn’t driven by a few isolated visionaries like Henry Ford; rather, it was driven by millions of people empowered to think of, develop, and market innumerable new products and processes, and improvements to existing ones. Mass flourishing–a combination of material well-being and the “good life” in a broader sense–was created by this mass innovation.

Yet indigenous innovation and flourishing weakened decades ago. In America, evidence indicates that innovation and job satisfaction have decreased since the late 1960s, while postwar Europe has never recaptured its former dynamism. The reason, Phelps argues, is that the modern values underlying the modern economy are under threat by a resurgence of traditional, corporatist values that put the community and state over the individual. The ultimate fate of modern values is now the most pressing question for the West: will Western nations recommit themselves to modernity, grassroots dynamism, indigenous innovation, and widespread personal fulfillment, or will we go on with a narrowed innovation that limits flourishing to a few?

A book of immense practical and intellectual importance, Mass Flourishing is essential reading for anyone who cares about the sources of prosperity and the future of the West. Read more of this post

When Work Is Challenging, Economies Thrive

When Work Is Challenging, Economies Thrive

by Justin Fox  |  12:30 PM August 30, 2013

“In economics, consumption is the sole end of production,” the late, great Swedish economist, politician, and social commentator Gunnar Myrdal wrote in 1930. “This is a stock phrase of all the textbooks since Adam Smith: Man works in order to live.” Myrdal, though, didn’t think that was right: [T]here are many people who live in order to work, who consume in order to produce, if we like to use those terms. Most people who are reasonably well off derive more satisfaction in their capacity as producers than as consumers. Indeed, many would define the social ideal as a state in which as many people as possible can live in this way. Read more of this post

Nike Patents Golf Shirt Design That Could Double as Coach; The clothing will have tighter material in areas key to a repetitive movement, like a golf swing. The snugger fit increases muscle stimulation, giving a better feel that will improve form, help a coach normally would provide by watching the golfer perform

Nike Patents Golf Shirt Design That Could Double as Coach

Nike Inc. (NKE) says it can make a golf shirt that could replicate what a coach does. The world’s largest maker of sporting goods obtained about a dozen patents on Aug. 27, including one invention with the potential to irk golf pros. “A coach or trainer can greatly improve an athlete’s form or body positioning, which can result in improved athletic performances,” Nike said in a patent filed with the U.S. Patent and Trademark Office. “For most people, however, a coach or trainer is not always available” and there isn’t an easy way to check positioning on your own, Nike said. Enter what the sponsor of Tiger Woods describes as “articles of apparel providing enhanced body position feedback.” The clothing will have tighter material in areas key to a repetitive movement, like a golf swing. The snugger fit increases muscle stimulation, giving a better feel that will improve form, help a coach normally would provide by watching the golfer perform, the document said. Nike has prospered even in hard times with a sustained focus on innovation, from air-pocket sneaker soles in the 1980s to last year’s Flyknit shoe, whose upper is woven like a sock. While these aren’t always the company’s best-sellers, they give its brand credibility — as does paying the world’s most famous athletes to wear them on television. Read more of this post

Astronomers say they may have solved a cosmic mystery: why gravitational monsters known as black holes are inept at swallowing their prey

August 29, 2013, 10:25 p.m. ET

Scientists Shed New Light on Black Holes

GAUTAM NAIK

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A composite image of the region around the black hole at the center ofthe Milky Way, with X-ray emissions shown in the inset.

Astronomers say they may have solved a cosmic mystery: why gravitational monsters known as black holes are inept at swallowing their prey. A black hole can form in space when a large star dies and its matter gets crunched into a much smaller volume. The resulting gravitational pull is so great that even light can’t escape. Given this power, one theory was that black holes indiscriminately consumed everything that passed within their reach. However, scientists recently observed that this scenario isn’t always the case—and they now believe they understand why. Read more of this post

Hulbert on Investing: Beyond the Superstar CEO; Companies with a strong corporate culture are a much better indicator of long-term success

August 30, 2013, 6:10 p.m. ET

Hulbert on Investing: Beyond the Superstar CEO

Companies with a strong corporate culture are a much better indicator of long-term success.

MARK HULBERT

The chief executive Microsoft MSFT -0.45% chooses to succeed Steve Ballmer will most likely fail to transform the company into the cutting-edge high-tech player so many on Wall Street say they want. That is because Microsoft is under enormous pressure to follow a CEO search process that is “irrational,” according to Rakesh Khurana, a professor of leadership development at Harvard Business School. Most companies that have been in Microsoft’s current position—a one-time industry leader whose future prospects appear to be fading—searched for a new CEO “with as much star power as possible,” he said in an interview, in order to restore shareholder confidence and boost its stock price. Read more of this post

Mini-brains raise big hopes and fears

August 30, 2013 6:43 pm

Mini-brains raise big hopes and fears

Synthetic neuroscience will soon face serious ethical issues

The science-fiction prospect of a living, thinking “brain in a dish” took a small but significant step toward reality this week. Researchers have grown a mini-brainfrom human stem cells in a Vienna biotechnology lab. This pea-sized “cerebral organoid” has the characteristics of a nine-week-old embryo’s brain, with active neurons. While it is far from demonstrating anything like conscious thought or sentience, and its creators are interested in understanding neurological disease rather than artificial intelligence, the mini-brain is an unexpected achievement that could soon be taken further – raising profound ethical issues. Read more of this post

Contrary to conventional wisdom that humans are essentially selfish, scientists are finding that the brain is built for generosity

August 30, 2013, 6:34 p.m. ET

Hard-Wired for Giving

Contrary to conventional wisdom that humans are essentially selfish, scientists are finding that the brain is built for generosity

ELIZABETH SVOBODA

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New research shows that not only do humans have a generosity gene, but there’s a biological basis for why giving feels good. Author Elizabeth Svoboda explains.

The Darwinian principle of “survival of the fittest” echoes what many people believe about life: To get ahead, you need to look out for No. 1. A cursory read of evolutionary doctrine suggests that the selfish individuals able to outcompete others for the best mates and the most resources are most likely to pass their genes on to the next generation. Then there is classical economic theory, which holds that given the choice, we will often opt for a personal benefit over a personal loss, even if that loss involves a benefit to someone else. The philosopher and economist John Stuart Mill championed the self-centered theory in the mid-1800s, describing man as a creature that “does that by which he may obtain the greatest amount of necessaries, conveniences and luxuries, with the smallest quantity of labor and physical self-denial.” Read more of this post

The Man Who Invented Modern Probability; Mathematics: Chance encounters in the life of Andrei Kolmogorov

The Man Who Invented Modern Probability

Mathematics: Chance encounters in the life of Andrei Kolmogorov.

BY SLAVA GEROVITCH ILLUSTRATION BY LINCOLN AGNEW

If two statisticians were to lose each other in an infinite forest, the first thing they would do is get drunk. That way, they would walk more or less randomly, which would give them the best chance of finding each other. However, the statisticians should stay sober if they want to pick mushrooms. Stumbling around drunk and without purpose would reduce the area of exploration, and make it more likely that the seekers would return to the same spot, where the mushrooms are already gone. Read more of this post

The psychology of scarcity: Days late, dollars short; Those with too little have a lot on their mind

Aug 31st 2013 |From the print edition

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Scarcity: Why Having Too Little Means So Much. By Sendhil Mullainathan and Eldar Shafir. Times Books; 288 pages; $28. Allen Lane; £20. Buy from Amazon.com,Amazon.co.uk

THE authors of this book both study people for a living—often people who lack money. They may be vegetable sellers in Chennai, India, who borrow money at dawn and repay with exorbitant interest at dusk. Or they may be ill-paid office managers, like Shawn from Cleveland, Ohio, who lives from pay cheque to pay cheque, always finding that there is “more month than money”. Read more of this post

The chief of Cognizant says an organization’s culture is passed along via its rituals, heroes and legends.

August 31, 2013

Francisco D’Souza of Cognizant, on Finding Company Heroes

By ADAM BRYANT

This interview with Francisco D’Souza, chief executive of the information technology company Cognizant, was conducted and condensed by Adam Bryant.

Q. What were some early lessons for you?

A. I was very fortunate in my upbringing. My father was a diplomat, and so, until I was 18, we traveled to a new country every three years. After finishing high school in the Caribbean, I wound up in Hong Kong when I was 18. We realized that there were few universities that taught in English, and so I went to one in Macau that focused on working professionals. I went to school at night and on weekends. My days were free, and I got a job as a bank teller. It was a small bank, and they still used a punch-card system. I had taught myself as a teenager how to program. I went to the branch manager and told him he ought to consider new technology. He said: “Fine. Help me figure it out.” We bought a computer. We wrote the software, and I wound up supervising a couple of people when I was 19. Read more of this post

Best way to deal with copycats? Don’t

Best way to deal with copycats? Don’t

BY ERIN GRIFFITH 
ON AUGUST 30, 2013

Warby Parker has worked really hard to build up its brand. Like, really, really hard. A-B testing the difference between “collegiate” and “preppy” hard. It has paid off — Warby Parker has a strong brand, and naturally, others in the world want to capitalize on it. The company has dealt numerous copycats as it has grown from a tiny e-commerce operation out of Blumenthal’s apartment to a company with 16 physical retail stores locations and 150 employees. At one point, Bluefly launched an eyewear vertical which even stole images of Warby Parker’s products. “Copycats suck,” co-CEO Neil Blumental said at PandoMonthly New York last night. He couldn’t help from ranting about the most notorious copycatters, the Samwer brothers, and their cloning vehicle, Rocket Internet. Read more of this post

A new species of shark that “walks” along the seabed using its fins as tiny legs has been discovered in eastern Indonesia called the bamboo shark

‘Walking’ Shark Discovered in Indonesia

By Agence France-Presse on 6:10 pm August 30, 2013.
A new species of shark that “walks” along the seabed using its fins as tiny legs has been discovered in eastern Indonesia, an environmental group said Friday. The brown and white bamboo shark pushes itself along the ocean floor as it forages for small fish and crustaceans at night, said Conservation International, whose scientists were involved in its discovery. The shark, which grows to a maximum length of just 80 centimeters is harmless to humans, was discovered off Halmahera, one of the Maluku Islands that lie west of New Guinea. Bamboo sharks, also known as longtail carpet sharks, are relatively small compared to their larger cousins, with the largest adult reaching only about 120 centimeters in length. They have unusually long tails that are bigger than the rest of their bodies and are found in tropical waters around Indonesia, Australia and Papua New Guinea. Conservation International said the discovery of the shark, which was first disclosed in the International Journal of Ichthyology, “should help draw diver interest to this mega-diverse but largely undiscovered region.” Ketut Sarjana Putra, Indonesia country director for the group, said the Hemiscyllium halmahera shark could “serve as an excellent ambassador to call public attention to the fact that most sharks are harmless to humans and are worthy of our conservation attention”. Conservation International, whose scientists discovered the shark along with colleagues from the Western Australian Museum, added it came at a time when Indonesia was increasing its efforts to protect shark and ray species.

Man Isn’t Alone; Apes Also Suffer Midlife Crises

August 30, 2013, 7:38 p.m. ET

Man Isn’t Alone; Apes Also Suffer Midlife Crises

ROBERT M. SAPOLSKY

The petroleum industry is still absorbing the recent, surprising resignation of Peter Voser, CEO of Royal Dutch Shell. Mr. Voser had been riding high with many successes during his stewardship of the petroleum giant. Yet, at the peak of his game at age 54, he resigned, wanting a “lifestyle change,” and to spend more time with his family. If this constitutes a midlife crisis for Mr. Voser, he appears to have dealt with it with a steady hand. But there is no shortage of people, amid their own midlife crises, going off the rails in ways both small—sudden obsessive exercising, immersion in bungee jumping, the imprudent hair transplant—and large—affairs, crackpot investments, substance abuse, or starting a “cultural revolution” in the company. Read more of this post

How Snacking Became Respectable; Before they became standard fare in American life, snacks drew suspicion and even scorn

August 30, 2013, 7:54 p.m. ET

How Snacking Became Respectable

Before they became standard fare in American life, snacks drew suspicion and even scorn

ABIGAIL CARROLL

As parents take their kids back-to-school shopping this year, it isn’t just new jeans and notebooks that will be checked off the list, but also booty for the pantry: snacks to help bridge the gap between the end of the school day and dinner. When it comes to American eating, snacking is ubiquitous—at home, at work, everywhere. But snacking wasn’t always such a regular or accepted part of the American eating routine. Snack foods once drew suspicion and even scorn—that is, before they were redeemed. Read more of this post

Only A Few People In History Have Dared To Use Sarin Gas

Only A Few People In History Have Dared To Use Sarin Gas

BRIAN JONES AUG. 30, 2013, 10:42 AM 8,534 11

The attack reportedly occurred Aug. 21. Last week, pictures and amateur videos trickled into the Western media depicting residents of a Syrian suburb twitching and struggling to breathe. Their pupils were constricted. They were confused. And then there were the dead, who showed no external injuries. Noah Shachtman with Foreign Policy wrote that upon seeing the images, weapons experts and U.S. intelligence officials had little doubt what weapon wreaked that havoc. They thought it was Sarin. Developed in Nazi Germany in 1938 by a team of German scientists seeking a tougher pesticide, Sarin works as an “off-switch” for the body’s glands and muscles. Most victims die because they are no longer able to breathe, according to the Centers for Disease Control and Prevention, which calls Sarin “the most volatile of the nerve agents.” It kills within seconds. Even the Nazis, however, chose not to use deadly sarin gas or other chemical weapons during WWII.

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The history of chemical weapons: The shadow of Ypres; How a whole class of weaponry came to be seen as indecent

The history of chemical weapons: The shadow of Ypres; How a whole class of weaponry came to be seen as indecent

Aug 31st 2013 |From the print edition

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“CLEARLY,” wrote an exasperated Winston Churchill in the summer of 1944, “I cannot make head against the parsons and the warriors at the same time.” Through most of that July the British prime minister had been asking his military chiefs to reconsider the question of using poison gas against Germany, telling them he wanted “cold-blooded calculation” rather than moralistic arguments about the unique iniquity of chemical weapons. The joint chiefs unanimously came down against the idea. Churchill grumpily acquiesced. Read more of this post

Asia sees widespread McDonald’s refugee phenomenon

Asia sees widespread McDonald’s refugee phenomenon

Staff Reporter

2013-09-01

McDonald’s introduced 24-hour operations in its chains in Japan in 2006, and since then a number of homeless people have chosen to stay in its stores for a long-term stay due to its cheap costs, earning them the name McDonald’s refugees. Media outlets in mainland China, Hong Kong and South Korea have also done their own reports on the phenomenon which has been widely seen across the region, NetEase’s online news unit reports. These homeless or jobless people, who cannot afford to pay normal rentals due to low income, have chosen to stay in 24 hour restaurants like McDonald’s. Always-open restaurants started in China in 2006, with the media reporting the refugee phenomenon at a Beijing location in December 2006. In 2007, Hong Kong and South Korea media began similar reports, finding more and more low-income people choosing to stay at McDonald’s for the long-term. Read more of this post

Laos Bourse to Open Bond Trading, Triple New Stocks after posting a loss every year since it opened in 2011

Laos Bourse to Open Bond Trading, Triple New Stocks to Halt Loss

Lao Securities Exchange will start trading bonds and triple the number of listed companies next year to raise revenue after posting a loss every year since it opened in 2011.

The exchange, the second-smallest by market capitalization among 84 global bourses tracked by Bloomberg, after Swaziland, plans to begin government bond trading for the first time early next year, according to Chief Executive Officer Dethphouvang Moularat. It will also expand the number of listed stocks to six, from two, he said. Laos World Co. Ltd., a trade exhibition operator, and a state-controlled cement maker are among companies to join the Laos Composite Index. (LSXC) Read more of this post

What’s the Difference Between U.S., Chinese Corruption?

What’s the Difference Between U.S., Chinese Corruption?

Forming opinions in the absence of facts is a dangerous business, which is why it’s premature to draw conclusions about whether the government is on the right track with its investigation of JPMorgan Chase & Co.’s hiring practices in China. That said, if the feds are going to make a case, they will need a lot more evidence on the bank than what the New York Times offered today in its latest article on the subject. Maybe they will find it. The article relies on information from people whom the Times didn’t identify. So it’s sometimes hard to tell whose version of events we’re getting — the government’s or JPMorgan’s. The article does refer to a “confidential government document” as a key source, although it obviously isn’t very confidential because the Times said the document was sent to JPMorgan. Read more of this post

Wahaha needs a new business model, says Kelly Zong

Wahaha needs a new business model, says Kelly Zong

Staff Reporter

2013-08-31

Kelly Zong, the daughter of Hangzhou Wahaha chairman Zong Qinghou, has said the beverage empire that has made her father one of China’s richest men is gradually losing its advantage in terms of business model and product lines. Her father’s anointed successor, Zong has rarely discussed in the past the management issues and future development concerns of the company, worth an estimated 32 billion yuan (US$5.2 billion). She revealed her apprehensions about the company’s business model recently however in an interview with ifeng.com, the news website run by Hong Kong’s Phoenix TV network. Read more of this post

Too big to hail: China’s banking behemoths are too beholden to the state. It is time to set finance free

Too big to hail: China’s banking behemoths are too beholden to the state. It is time to set finance free

Aug 31st 2013 |From the print edition

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AT FIRST sight, China seems to have a superb banking system. Its state-controlled banks, among the biggest and most profitable in the world, have negligible levels of non-performing loans and are well capitalised. That appears to suggest that the country’s approach should be applauded. Not so. For one thing, though China’s banking system is stable, its banks are not as healthy as they seem. The credit binge of recent years has left them with far higher levels of risky loans than they acknowledge. And a profit squeeze is coming. The banks are having to work harder to keep both their biggest depositors, who are tempted by alternative investment products, and their biggest borrowers, who are turning to the bond market instead. As a consequence, the country’s Big Four banks—Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China and China Construction Bank—will no longer make easy money by merely issuing soft loans to state-owned enterprises, or SOEs (see article). Read more of this post

China’s War On Online Gossip Is Starting To Get Scary

China’s War On Online Gossip Is Starting To Get Scary

ADAM TAYLOR AUG. 31, 2013, 11:49 AM 1,730 2

china-rumors

An image featured on China’s gossip-reporting website

These days its rare to read a story about the gritty side of Chinese life without a mention of an overseas gossip website, or an angry reaction from Weibo’s online mob, the so-called “human flesh search engine.” Authorities aren’t too pleased with the gossipy world online — perhaps understanding that frequently this gossip is designed to undermine politicians and officials. A state-directed campaign to clamp down on rumors dates back at least a few years, with state-run newspapers comparing gossip to heroin and cocaine in 2011. However, in the last month there appears to have been a notable uptick in the war on rumors with arrests and people detained: It’s starting to get some people worried. Read more of this post

SEC Is Shocked, Shocked by Business as Usual in China

SEC Is Shocked, Shocked by Business as Usual in China

According to a Bloomberg News report, the Securities and Exchange Commission is on the verge of figuring out how business is actually done in China. The key to this discovery is a spreadsheet that the SEC obtained from JPMorgan Chase & Co.. It includes two key sets of data: the names of the offspring of some of China’s most prominent families, and a list of “specific deals pursued by the bank.” According to the Bloomberg report, combining these two data sets has provided investigators with a Rosetta Stone-like insight into how the bank just might make money in the Middle Kingdom: The spreadsheet, which links some hiring decisions to specific transactions pursued by the bank, may be viewed by regulators as evidence that JPMorgan added people in exchange for business, according to one person with knowledge of the review. Read more of this post

Foreclosures rising in China’s “entrepreneur city” Wenzhou as properties drop below mortgage values

Foreclosures rising in Wenzhou as properties drop below mortgage values

Staff Reporter

2013-09-01

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Many upscale housing units in Wenzhou are reportedly half empty amid a bout of foreclosures. (Photo/Xinhua)

Foreclosures are spiking in the city of Wenzhou in east China’s Zhejiang province as shrinking property prices have turned properties into negative equity, reports the Shenzhen-based Security Times. Since hitting a peak around two years ago, property prices in Wenzhou have declined sharply, so much so that the market value of many properties has fallen below the amount of their corresponding loans, turning them into negative-value assets. Read more of this post

Corrupt, anonymous and in thrall to the party – China is not the new Japan; However big the statistics say the Chinese economy is, it will never reach its full potential until the state relinquishes its grip

Corrupt, anonymous and in thrall to the party – China is not the new Japan

However big the statistics say the Chinese economy is, it will never reach its full potential until the state relinquishes its grip

Will Hutton

The Observer, Sunday 1 September 2013

It is a paradox. China is the world’s leading exporter ahead of both the US and Germany. If you trust its figures, it is the second biggest economy. Yet it succeeds in making only 9.5% of internationally applicable, so-called “triadic”, patents. This is a country whose growth has not been propelled by innovation. The failure is matched by a parallel failure of Chinese firms to develop as multinationals. When Japan was rising to global economic prominence in the 60s and 70s, its car and electronics companies became household names. No such claim can be made for China. Its big companies, still either state-owned or heavily state-influenced, are largely anonymous. There are certainly no Chinese multinationals of the standing of, say, Toyota, Sony or Hitachi.

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