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How Many ‘Greater Fools’ Does It Take to Make a Bubble?

Sep 27, 2013

THE INTELLIGENT INVESTOR

How Many ‘Greater Fools’ Does It Take to Make a Bubble?

JASON ZWEIG

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Where do market “bubbles” come from? A team of neuroscientists and economists has produced the first scientific evidence for what prudent investors have long believed: Paying attention to what others are doing is the easiest way for traders to get carried away. This new research can’t prevent the mass contagions that lead to bubbles. But it might help you step back before you get swept up in the next one. Economists have struggled and failed to explain why markets turn into manias. Some have denied bubbles exist; others have argued bubbles must somehow be “rational.” Often, the argument is that bubbles are caused by “uninformed” traders, or “dumb money,” while the “smart money” sits on the sidelines. The latest findings suggest, however, that bubbles might be caused not by traders who lack information but by those who have too much.

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New Warning Issued on China Local Government Debt

September 27, 2013, 2:04 p.m. ET

New Warning Issued on China Local Government Debt

WILLIAM KAZER

BEIJING—China’s local government debt has nearly doubled since 2010, an official newspaper reported Friday, raising fresh concerns about potential repayment problems and the health of the banking system. The state-run Economic Information Daily, quoting the results of a government audit, didn’t give a figure for the new level of local debt. But a doubling of the total found in the last audit in 2010 would put the tally at around 20 trillion yuan ($3.28 trillion)—or almost 39% of the nation’s gross domestic product last year. China has been concerned that local-government debt levels were rising quickly as economic growth slowed and local administrations and the companies they hold stepped up borrowing to give the economy a helping hand. Most of China’s local governments are forbidden from borrowing money directly, so they have created local-financing vehicles to skirt the restrictions and raise funds for infrastructure and other projects. Those vehicles racked up massive debt levels in 2009 and 2010 as China rolled out a giant infrastructure-based stimulus program in the wake of the financial crisis. Read more of this post

2,564 Birthday anniversary of Confucius celebrated around China

Birthday anniversary of Confucius celebrated around China

(Xinhua)    16:44, September 28, 2013

A performer takes part in a memorial ceremony to mark the 2,564th birthday anniversary of Confucius at the Confucius Temple in Qufu, east China’s Shandong Province, Sept. 28, 2013. Qufu is known as the hometown of the great Chinese philosopher and educator Confucius. (Xinhua/Guo Xulei)

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Have-Nots Squeezed and Stacked in Hong Kong

September 27, 2013

Have-Nots Squeezed and Stacked in Hong Kong

By BETTINA WASSENER and GRACE TSOI

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In Hong Kong, a Cubicle to Call Home: One of Asia’s premier banking, trading and logistics centers is a difficult place for low-income residents to live.

HONG KONG — On the first floor of a hulking residential building, at the end of a dimly lighted corridor, a narrow door opens up into Hong Kong’s economic underbelly. Twenty-two men live in this particular 450-square-foot apartment in the neighborhood of Mong Kok, in cubicles each hardly larger than a single bed, stacked above one another along two narrow passageways that end in a dank toilet and shower room. Each cupboardlike cubicle has a sliding door, a small television, some shelves and a thin mattress. Most of the men have lived here for months, some for years. “Luckily there is air-conditioning. If not, sleeping would be impossible,” said Ng Chi-hung, 55, who is unemployed and occupies one of the bottom bunks. “If you live in such environment, you have to adapt to everything.” Read more of this post

Book Review: ‘David and Goliath’ by Malcolm Gladwell

September 27, 2013, 6:07 p.m. ET

Book Review: ‘David and Goliath’ by Malcolm Gladwell

Malcolm Gladwell too often presents as proven laws what are just intriguing possibilities and musings about human behavior.

CHRISTOPHER F. CHABRIS

David Boies is the super-lawyer who represented IBM against the U.S. government, the U.S. government against Microsoft, Al Gore against George W. Bush and gay marriage against California’s Proposition 8. A man at the top of his profession, presiding over a firm of 200 lawyers, he would seem to be a metaphorical Goliath. But Malcolm Gladwell sees this literal David as a figurative David too, because Mr. Boies came from humble origins and faced mighty obstacles to success. Read more of this post

The “Breaking Bad” school: The best show on television is also a first-rate primer on business

The “Breaking Bad” school: The best show on television is also a first-rate primer on business

Sep 28th 2013 |From the print edition

THERE are obvious reasons for watching “Breaking Bad”: for once the Hollywood hype surrounding the television series is justified. But there is also a less obvious reason: it is one of the best studies available of the dynamics of modern business. A Harvard MBA will set you back $90,000 (plus two years’ lost income). You can buy a deluxe edition of all five seasons of “Breaking Bad”, complete with a plastic money barrel, for $209.99, or a regular edition for less than $80. Read more of this post

James Packer’s former money man shares the billionaire’s top tips: You only need one or two very good ideas per year

Matthew Smith Reporter

James Packer’s former money man shares the billionaire’s top tips

Published 27 September 2013 10:13, Updated 27 September 2013 10:14

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Paul Skamvougera: You only need one or two very good ideas per year

It’s been a rapid rise for Paul Skamvougeras, who took over from Perpetual’s star fund manager John Sevior in July 2011. Despite his background in managing money for James Packer, investors weren’t immediately convinced with the replacement. “He might be good but is he Sevior good?” they asked. Fast forward two years and its “John who?” after “Skamma” notched up a 31.2 per cent return to July 31. Now he’s been asked to step into the breach once more following the departure of Charlie Lanchester. Today Skamvougeras talks about his three biggest positions and what he learnt from James Packer.  Read more of this post

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