Rewards shift to stock pickers in U.S. market rally

Rewards shift to stock pickers in U.S. market rally

2:34am EST

By David Randall

NEW YORK (Reuters) – It’s a good time to be a stock picker. Some 57 percent of U.S. funds run by active managers are beating their benchmark indexes this year, according to fund-tracker Morningstar. That is the best overall performance for the industry since 2009 and well above the 37 percent of funds that typically top the indexes. Stock pickers are doing well in part because after more than four years of marching higher en masse, stocks have started to separate themselves into leaders and laggards. The lines of demarcation became more pronounced during the past few weeks as U.S. companies reported their recent quarterly results. Read more of this post

Property hot spots from Canada to China renew easy-money bubble fears

Property hot spots from Canada to China renew easy-money bubble fears

Alan Wheatley and Tim Reid, Reuters | 01/11/13 8:22 AM ET
LONDON/LOS ANGELES — From China to Canada and London, fast-rising property markets are haunting the global economy again, five years after the U.S. subprime mortgage bubble burst and triggered the worst financial crisis since the 1930s. For now, house price inflation is neither as high nor as widespread as it was in the middle of last decade. Except in a few cases, the warning signals are flashing amber, not red, and several countries have acted to cool overheating markets. Read more of this post

How Turkey made its railway tunnel under the Bosphorus earthquake-proof

How Turkey made its railway tunnel under the Bosphorus earthquake-proof

By Philip A. Stephenson @phantomath November 1, 2013

This week, the world’s first transcontinental tunnel was opened in Turkey. Istanbul’s Marmaray tunnel connects Europe and Asia, delving 1.4 kilometers (0.87 miles) across the Bosphorus Strait at  a depth of 60 meters (185 feet), breaking records for an immersed tube tunnel. The name is a portmanteau of “Marmara” (the Turkish body of water just outside the strait) and “ray,” the Turkish word for “rail.” As construction was a mere 20 kilometers from the active North Anatolian earthquake fault, the tunnel segments had  to be built to withstand earthquake magnitudes up to 9.0. Read more of this post

Higher Swiss Leverage Ratio Could Mean End of Universal Bank

Higher Swiss Leverage Ratio Could Mean End of Universal Bank

Swiss Finance Minister Eveline Widmer-Schlumpf said lenders including UBS AG (UBSN) and Credit Suisse Group AG (CSGN) may have to pull out of investment banking as she called for their leverage ratios to be raised. “Banks would have to consider whether to carry on with investment banking or focus even more on asset management,” Widmer-Schlumpf was quoted as saying in an interview with Schweiz am Sonntag. Banks “must be organized in such a way that the state isn’t ultimately held liable.” Read more of this post

Emerging-Stock Rally Raises Concern; Some Analysts Expect a Volatile Time; Avoiding the ‘Fragile Five’: India, Brazil, Turkey, Indonesia and South Africa

Emerging-Stock Rally Raises Concern

Some Analysts Expect a Volatile Time; Avoiding the ‘Fragile Five’

E.S. BROWNING

Nov. 3, 2013 3:20 p.m. ET

Investors have rediscovered developing countries, sending their stocks up 16%, as a group, since late June. A growing number of analysts who follow these countries, known in the trade as emerging markets, find that troubling. Their message: Proceed at your own risk. Emerging markets are exciting to investors because for much of the past decade, EM stocks and bonds delivered the big gains. Many investors still are nervous about U.S. stocks, even though many major U.S. indexes are in or near record territory. Read more of this post

Dutch government is planning to sell all $12 billion of the US mortgage bonds acquired during the 2009 bailout of ING as prices of the securities soared, more than doubling in some cases from lows that year

Dutch Gamble on U.S. Housing Debt After Patience Wins

The Dutch government’s decision to hold onto U.S. mortgage debt acquired during the 2009 bailout of ING Groep NV (INGA) has paid off so far as prices of the securities soared, more than doubling in some cases from lows that year. The nation now is planning to sell all $12 billion of the bonds, many of which are tied to borrowers who were deemed more risky after failing to document their incomes or taking on mortgages with growing balances. ING, the Netherlands’ biggest financial-services company, said last week the current market value of the bonds is about 71 percent of the face amount. The government may see a gain of almost 800 million euros ($1.1 billion), Finance Minister Jeroen Dijsselbloem told Parliament. Read more of this post

Big finance is a problem, not an industry to be nurtured; To bring down our debt levels, we cannot avoid shrinking the financial sector

November 3, 2013 5:23 pm

Big finance is a problem, not an industry to be nurtured

By Dirk Bezemer

To bring down our debt levels, we cannot avoid shrinking the financial sector, says Dirk Bezemer

Many western economies have both large financial sectors and exorbitant private debt-to-output ratios. This is no coincidence. Each loan is a debt, so a large financial sector implies high debt levels. For example, in the mid-1980s, loans by UK banks to UK companies and households were less than a quarter of gross domestic product; today they amount to 130 per cent. Add non-bank borrowing to that, and total private debt today stands at well over twice UK GDP. Read more of this post

Stratospheric Views, and Prices; Hard as it may be to believe, the price per square foot for luxury apartments in New York City is considerably less than it is for luxury elsewhere in the world

November 3, 2013

Stratospheric Views, and Prices

By JULIE CRESWELL

Walking slowly to the windows facing the meadow of green that is Central Park, Gary Barnett slips into salesman mode as he spreads his arms wide, embracing the sweeping bird’s-eye view he has from the 87th floor of his shimmering skyscraper in Midtown Manhattan. Noting a visitor’s gasp at the stunning vista, he smiles. “That’s what we want. We want the ‘Oh, wow,’ ” he says. Read more of this post

Shopping Mall Giant Westfield Group Focuses on U.S., U.K., Cautious on China

Westfield Group’s Retail Therapy

Shopping Mall Operator Focuses on U.S., U.K., Cautious on China

ROSS KELLY

Nov. 3, 2013 8:29 p.m. ET

Westfield Group, WDC.AU +0.46% one of the world’s largest shopping mall operators by revenue, is all about attracting big spenders. From Prada and Gucci to high-end restaurants, its malls cater to customers who are willing to pay for prized goods. So it may be surprising that Peter Lowy, the company’s joint chief executive, takes a cautious approach to investment. Despite a balance sheet bolstered by more than $6 billion from asset sales since the start of 2012, Westfield has resisted risky expansions into emerging markets like China. For now, it has no plans to join the rush of luxury brands and main-street retailers vying for the favor of Asia’s increasingly affluent middle classes. Read more of this post

The Fed is locked in a QE prison of its own making; US policymakers are caught in a trap – a seemingly inescapable dilemma that stems directly from the massive scale of QE

The Fed is locked in a QE prison of its own making

US policymakers are caught in a trap – a seemingly inescapable dilemma that stems directly from the massive scale of QE

Last Wednesday, at its monthly meeting, the Fed’s monetary committee voted to keep QE going – ordering the purchase of another $40bn of mortgage-backed securities and another $45bn of Treasuries, so $85bn in total. Photo: AP

By Liam Halligan, Economic Agenda

6:30PM GMT 02 Nov 2013

Back in the spring, Ben Bernanke told the world that “tapering” would start “later this year”. The Federal Reserve Chairman was indicating, in other words, that America’s central bank would start to wind-down its $85bn-a-month money-printing habit by the end of 2013. Such an outcome now looks increasingly unlikely. My view, in fact, is that the Fed, could soon unleash more, not less, quantitative easing – ramping up the policy rather than tapering. Such an outcome, were it to happen, would be incredibly risky. Speeding up monetary stimulation, rather than slowing it down, could spook financial markets – and even cause a panic. Yet in recent weeks, I’ve heard several well-placed economists and policymakers, especially in the US, start to contemplate such action. Read more of this post

How China Profits From Our Junk

How China Profits From Our Junk

By Adam Minter

China’s reputation as the “world’s factory” is well-established. But what happens to everything the world throws away? Since 2002, the Shanghai-based journalist Adam Minter has sought to find out. The son and grandson of scrap metalists, Minter traveled throughout the world to investigate how what we discard—and reuse—helps drive the global economy. Minter, who has written for a variety of publications (including both the print and digital versions ofThe Atlantic), now writes a weekly column on China for Bloomberg. In this excerpt from his forthcoming book Junkyard Planet, which will be published by Bloomsbury Press on November 12,  Minter travels to the epicenter of the global scrape trade: southern China. Read more of this post

Less sin, more shrek in Macau as China takes aim in corruption fight

Updated: Monday November 4, 2013 MYT 7:39:41 AM

Less sin, more shrek in Macau as China takes aim in corruption fight

MACAU: The media scrum surrounding the politically connected chairman of a Chinese financial services company was interested in one particular unpaid loan. The amount – $1.3 million (816,224 pounds) – was nothing extraordinary. But the story behind it was. Xie Xiaoqing, chairman of Rongzhong Group, was sued in January for failing to repay the money to Sands China Ltd, U.S. billionaire Sheldon Adelson’s Macau gambling unit. Xie has said he wasn’t gambling and the money was for a friend. A spokesman for his company said Xie was not available to comment. Read more of this post

Xi Borrows From Mao Playbook in Power Play Ahead of China Plenum

Xi Borrows From Mao Playbook in Power Play Ahead of China Plenum

The mission for the near-dozen Communists sitting round a table at a Beijing ministry was explicit: criticize their boss, who was present. Party cadres carefully recorded their comments as they spoke, in an echo of sessions held decades ago under Chairman Mao Zedong’s direction. “Every party member, every division chief, each department head and the ministers have to go through it,” said 31-year-old Tang, who participated in the September gathering and asked to withhold his full name and work unit because he isn’t authorized to talk to reporters. “There are clear instructions that criticism must be genuine. For instance, you can’t say ‘Oh, you have worked too hard and should take more breaks.’” Read more of this post

Hong Kong luxury home buyers queue amid talk of last hurrah

Hong Kong luxury home buyers queue amid talk of last hurrah

4:04pm EST

By Yimou Lee and Alice Woodhouse

HONG KONG (Reuters) – In a shopping mall in one of Hong Kong’s prime retail districts, more than 100 people wait patiently to take a lift to the sales floors – not to buy luxury bags or clothes, but high-end apartments with price tags of up to $4.4 million. Foster Lee, a 30-year-old banker, was among the lucky ones who won the chance to buy a unit after a ballot in which more than 1,600 people signed up for just 80 luxury units on offer. Read more of this post

Could fracking boom peter out sooner than DOE expects?

Could fracking boom peter out sooner than DOE expects?

Wendy Koch, USA TODAY10:46 a.m. EST November 3, 2013

The future of the U.S. fossil fuel industry rests largely on fracking, which has brought a surge in oil and gas production. Energy experts disagree, though, on how long this boom will last.

STORY HIGHLIGHTS

Fracking has led to a surge in U.S. oil and gas production

Yet energy experts disagree about how long this shale boom will last

The U.S. government cites uncertainties in its own mixed forecast

Surging oil and gas production is nudging the nation closer to energy independence. But new research suggests the boom could peter out long before the United States reaches this decades-old goal. Many wells behind the energy gush are quickly losing productivity, and some areas could hit peak levels sooner than the U.S. government expects, according to analyses presented last week at a Geological Society of America meeting in Denver. Read more of this post

Big Oil’s Tricky Mix of Shale and Scale

Big Oil’s Tricky Mix of Shale and Scale–Heard on the Street

Size Isn’t an Advantage in the Shale Patch

LIAM DENNING

Nov. 3, 2013 3:32 p.m. ET

If you are going to be big, you have to make it work for you. The problem for Big Oil is that one of the world’s biggest opportunities, shale, doesn’t necessarily reward bigness. Royal Dutch Shell‘s RDSB.LN +1.39% partial retreat from U.S. shale this year suggests it overreached as it scooped up assets there. Latecomers always risk getting the crumbs after first-movers have picked up the choice cuts. But there also is a structural problem confronting Big Oil. Read more of this post

India throws rings of protection around divisive candidate Modi

India throws rings of protection around divisive candidate Modi

4:10pm EST

By Sanjeev Miglani

NEW DELHI (Reuters) – – Indian security forces are preparing for one of their most challenging assignments in decades, protecting prime ministerial candidate Narendra Modi in a country with a grim history of political assassinations. A series of small bombs killed six people at a rally the Hindu nationalist leader held in the city of Patna on October 20. Read more of this post

Apollo Tyre says problems reaching a deal with Cooper’s U.S. labor union and a lack of information about a Cooper JV in China have made it impossible to raise the more than $2 billion in debt it needs to close the deal

Cooper Tire, Apollo Tyre Head to Court

With Deal in Limbo, Debate is Over Problems Reaching Labor Contract

LIZ HOFFMAN

Updated Nov. 3, 2013 7:15 p.m. ET

A $2.2 billion takeover of Cooper Tire & Rubber Co. CTB -0.31% is on the skids. Whether it closes—and at what price—may hinge on a judge’s interpretation of one of the fuzziest deal terms around. India’s Apollo Tyre Ltd. agreed in June to buy Cooper Tire for $35 a share. Cooper’s shareholders approved the deal in September, teeing up an Oct. 4 closing date. But Apollo didn’t show up to close. Read more of this post