Can Singapore’s political model be transplanted into China?

Can Singapore’s political model be transplanted into China?

Thursday, November 21, 2013 – 08:10

Li Xueying

Hong Kong Correspondent

The Straits Times

For years, the Chinese government sent thousands of officials to be trained in Singapore’s universities, trying to tease out how their country can emulate the Singapore system that combines a dominant-party rule with an open economy. At the end of their course, they “remain unconvinced that we have told them everything”, says Straits Times journalist Peh Shing Huei, recounting what a Singapore diplomat once told him. Read more of this post

Asian credit hedge fund manager Blue Rice Investment Management to close

Asian credit hedge fund manager Blue Rice Investment Management to close

BY DOUGLAS APPELL | NOVEMBER 20, 2013 3:40 AM | UPDATED 12:45 PM

Blue Rice Investment Management, a hedge fund manager focused on Asian credit, will return capital to investors and close down by the end of 2013. In a telephone interview, Guan Ong, founder and principal of Blue Rice, said the likelihood of a long period of market turbulence as the U.S. Federal Reserve “tapers” its monetary stimulus made “doing the right thing” by investors while they’re still enjoying gains for the year the best option. Read more of this post

Italian-Thai ditched as Thailand, Myanmar seize Dawei special economic development zone

Italian-Thai ditched as Thailand, Myanmar seize Dawei development zone

Thursday, November 21, 2013 – 19:10

Reuters

BANGKOK – Thailand and Myanmar seized control on Thursday of the multi-billion dollar Dawei special economic zone from Italian Thai Development Pcl to rescue the floundering project and convince foreign investors to finally come on board. The takeover of the strategically located complex, billed as a gateway for trade with Southeast Asia, follows years of delays that have been blamed largely on the Thai firm’s failure to secure private investment and agree on a power source for the 250 sq km (100 sq mile) deep-sea port, petrochemical and heavy industry hub. “If ITD continues, it’s impossible for new investors to come in,” Set Aung, a former economist and now a deputy central bank governor in Myanmar, said during a meeting of Thai and Myanmar officials in Bangkok on Thursday. Read more of this post

Vietnamese Lessons for Burma; What Asia’s new investment hot spot can learn from the successes—and failures—of the last Big Thing

Vietnamese Lessons for Burma

What Asia’s new investment hot spot can learn from the successes—and failures—of the last Big Thing.

CURTIS S. CHIN AND JOSE B. COLLAZO

Nov. 20, 2013 11:42 a.m. ET

There’s an undeniable buzz about Burma among business leaders these days, with investors betting on the long-stagnant economy becoming the next Asian tiger. But as exciting as this situation is, it helps to recall that it is not unprecedented. The case to study is Vietnam, another once-hot economy that has fallen out of favor, and now offers investors pointers on things to watch out for in Burma, as well as tips to Burma’s leaders on traps to avoid. Read more of this post

KL plans sharp hike in tax on homes

KL plans sharp hike in tax on homes

Wednesday, Nov 20, 2013

Pauline Ng

The Business Times/MyPaper

KUALA LUMPUR – Kuala Lumpur property owners, an estimated 10-16 per cent of whom are foreigners, are facing sharply higher assessment payments of up to 300 per cent, following the latest move by City Hall (DBKL) to boost its coffers. DBKL’s “Notice of revision of valuation list” has been posted to home owners, detailing the proposed annual value on which assessment is payable. Read more of this post

Yellen Should Focus on Innovation, Not Inflation

Yellen Should Focus on Innovation, Not Inflation

President Barack Obama has shown a determination to redistribute wealth by increasing government spending, despite unsustainable deficits. We shouldn’t be surprised if Janet Yellen, the president’s nominee to be Federal Reserve chairman, shares his objective. After 30 years of Fed chairmen who pursued anti-inflationary policies, the central bank is now attempting to engineer an unexpected bout of inflation. One consequence of this policy is that it transfers wealth from lenders to borrowers. Yellen, whose nomination could be put to a Senate vote the week of Dec. 9, will probably redouble these efforts. Read more of this post

Wall Street’s Short Sellers Are Salivating Waiting For This Bubble To Pop; “Short selling as a strategy is like an umbrella. People don’t think they need one until it starts to rain and they get wet.”

Wall Street’s Short Sellers Are Salivating Waiting For This Bubble To Pop

LAWRENCE DELEVIGNE, CNBC
NOV. 20, 2013, 10:39 AM 4,053 2

With the Dow Jones industrial average flirting with 16,000, hedge fund managers that focus on betting against stocks see a once-in-a-lifetime opportunity to make money on what they see as an epic equity bubble. “This is it. It’s the bottom of the ninth and we’re about to hit a home run,” said John Fichthorn, co-founder of Dialectic Capital Management and an expert on shorting stocks. “I believe this is the best opportunity I will see in my life as a short seller.” Read more of this post

Virtual-Currency Craze Spawns Bitcoin Wannabes; Entrants Include Litecoin, Worldcoin and Even Bbqcoin; a Ticket to Fortune?

Virtual-Currency Craze Spawns Bitcoin Wannabes

Entrants Include Litecoin, Worldcoin and Even Bbqcoin; a Ticket to Fortune?

JOE LIGHT

Updated Nov. 20, 2013 9:00 p.m. ET

Owner Taylor Minor waits on customers at Stoney Creek Roasters in Cedarville, Ohio, which accepts a form of payment called bbqcoin. Ty Wright for The Wall Street Journal 

Gary Thomas plans to get rich off virtual currencies—but not bitcoin. The electrical engineer is betting big on newcomers like alphacoin and fastcoin. Mr. Thomas started trading the digital currencies from his home outside Boston earlier this year. He said he is convinced this is his ticket to fortune, even after an earlier attempt—investing in Internet stocks during the dot-com bubble—ended in disaster. Read more of this post

Turning workers into capitalists: Employee share ownership has merit. But that does not justify further government incentives

Turning workers into capitalists: Employee share ownership has merit. But that does not justify further government incentives

Nov 23rd 2013 |From the print edition

IN AN effort to rebuild New England’s cod industry after the war of independence, George Washington signed a law in 1792 giving shipowners “allowances” (ie, subsidies) to offset the tariffs they had to pay on their inputs. Two conditions were attached to the support: shipowners had to sign a profit-sharing agreement with their crew, with whom they also had to split the allowance. Thus one of America’s first tax breaks was designed to encourage owners to share profits with their workers. Read more of this post

The chief of Europe’s sixth-biggest PE group EQT urged his peers to “focus more on building companies than avoiding taxes” if they want to keep their licence to operate amid greater regulatory and political scrutiny of the sector

November 21, 2013 5:29 pm

Private equity groups told to alter focus

By Anne-Sylvaine Chassany in Paris

The chief of Europe’s sixth-biggest private equity group has urged his peers to “focus more on building companies than avoiding taxes” if they want to keep their licence to operate amid greater regulatory and political scrutiny of the sector. The plea made by Conni Jonsson, EQT’s managing partner, on Thursday at a conference in Paris was received with a warm round of applause, as private equity companies both in Europe and in the US face criticism from politicians and unions that they exploit tax loopholes to boost their returns. Read more of this post

Slowing buybacks could spell trouble for U.S. stocks

Slowing buybacks could spell trouble for U.S. stocks

12:20pm EST

By Chuck Mikolajczak

NEW YORK (Reuters) – With just over a month remaining in a year that has seen the S&P 500 rocket to new records, one of the rally’s drivers could have peaked: stock buybacks. In the last few years, major U.S. companies, including IBM, Apple and Exxon Mobil have dramatically boosted share repurchases. Overall, Federal Reserve data shows corporations are the primary buyer of equities – while pension funds, mutual funds and households have increasingly been sellers in recent years. Read more of this post

Pubs turns focus from property to staff; For a long time in the pub industry, the property market came before pubs. Whoever was running the pub – and how well they were doing it – did not matter

November 21, 2013 7:05 pm

Pubs turns focus from property to staff

By Duncan Robinson

For a long time in the pub industry, the property market came before pubs. Whoever was running the pub – and how well they were doing it – did not matter. “In the past, you used to churn the tenants,” says Stephen Billingham, executive chairman of Punch Taverns, which has 4,000 pubs across the UK. “If they failed, you brought in somebody new.” Read more of this post

Nobelist’s Valuation Measure Draws Questions

Nobelist’s Valuation Measure Draws Questions

ALEXANDRA SCAGGS

Nov. 21, 2013 12:06 p.m. ET

Bubble-hunting economist Robert Shiller‘s stock-market valuation measure is waving a yellow flag, but there is a debate brewing over whether even that is too alarming a picture. Of 15 stock-market valuation measures tracked by Bank of America BAC +2.97% Merrill Lynch’s stock strategy team, Mr. Shiller’s cyclically adjusted price/earnings ratio is the only one above its long-term average. Read more of this post

Goodwill Testing May Soon Get Simpler for Private Companies

November 22, 2013, 3:14 AM ET

Goodwill Testing May Soon Get Simpler for Private Companies

EMILY CHASAN

Senior Editor

Annual tests companies use to check whether assets they have acquired have lost value and need to be written down could become simpler soon. The Financial Accounting Standards Board is set to decide on Monday whether to endorse changes proposed by its new Private Company Council that would let private firms choose to amortize so-called goodwill from past acquisitions on their balance sheets. The proposal would also allow simplify and limit the testing that triggers write-downs. Read more of this post

Get big or die trying: Finding a better way to deliver pensions

Get big or die trying: Finding a better way to deliver pensions

Nov 23rd 2013 |From the print edition

PENSION funds have had a pretty good 2013: rising share prices and higher bond yields have reduced their funding deficits. Nevertheless, the combined strains of volatile markets and improved longevity are causing the industry to have a rethink, as a World Bank conference in Cape Town revealed this week. Some funds in the Dutch system, long regarded as among the best in the world, have been forced to cut benefits to pensioners because of funding shortfalls. In Canada, the Ontario Teachers’ Pension Plan, often praised for its sophistication, has had to reduce inflation protection for workers who retired after 2009—a cut in pensioners’ real incomes. Read more of this post

Fed Casts About for Endgame on Easy-Money Policy

Fed Casts About for Endgame on Easy-Money Policy

JON HILSENRATH and VICTORIA MCGRANE

Updated Nov. 20, 2013 3:35 p.m. ET

Federal Reserve officials, mindful of a still-fragile economy, are laboring to devise a strategy to avoid another round of market turmoil when they pull back on one of their signature easy-money programs in the months ahead. Central-bank officials have been debating for months when to start paring the $85 billion-a-month bond-purchase program. They were surprised during the summer when their discussions and public pronouncements on the potential timing rocked markets, pushing interest rates higher and stock prices down. Read more of this post

Every month that the Fed’s quantitative easing goes on, the exit strategy becomes more difficult and dangerous

Phil Gramm and Thomas R. Saving: Janet Yellen’s Greatest Challenge

Every month that the Fed’s quantitative easing goes on, the exit strategy becomes more difficult and dangerous.

PHIL GRAMM and THOMAS R. SAVING

Nov. 21, 2013 6:50 p.m. ET

With the Senate Banking Committee on Thursday approving Janet Yellen‘s nomination to lead the Federal Reserve, her confirmation is virtually assured. Less certain is what Ms. Yellen ultimately intends to do with Fed policy on quantitative easing, now entering its 34th month. She is committed to maintaining QE for now, but does she have an exit strategy? The Fed needs one, because the economic stakes could not be higher. Read more of this post

Eurozone banks’ asset shedding hits SMEs

Last updated: November 19, 2013 7:23 pm

Eurozone banks’ asset shedding hits SMEs

By Christopher Thompson

Never mind the banks, the bigger impact of next year’s eurozone stress tests could be on small businesses. As banks shed assets ahead of the tests, pruning their assets, lending to companies across the single currency zone has suffered. And the scale of bank deleveraging yet to come is daunting. To comply with new capital requirements Royal Bank of Scotland estimates the eurozone’s biggest banks need to cut an additional €2.6tn from their balance sheets – at €31.3tn collectively in September, they remain among the biggest of any region in the world. That is on top of €3.5tn in asset cuts already made since May 2012. Read more of this post

Europe’s Most Entrepreneurial Country? It’s Ireland

Europe’s Most Entrepreneurial Country? It’s Ireland

BEN ROONEY

Nov. 20, 2013 12:15 p.m. ET

Ranking tech entrepreneurialism is a tricky task and whatever measure you come up with is going to annoy somebody, but by at least one measure, Europe’s most entrepreneurial country is Ireland. What does “most entrepreneurial country” mean? In this analysis, we looked at Dow Jones VentureSource data on the total amount of venture capital raised by tech companies in each European country since 2003, divided by population to get the per capita figure, then averaged it out over the 39 quarters. Read more of this post

Does cheapness predict subsequent outperformance?

November 21, 2013 4:10 pm

Does cheapness predict subsequent outperformance?

By Dominic Picarda

Europe looks cheap, but the US is pricey

Nothing sets off alarm bells quite like investors claiming that old valuation rules no longer apply. The classic case of this was during the technology bubble of the late 1990s. Faced with internet firms that made little or no profit, analysts spurned traditional valuation tools and cooked up new techniques based – among other things – upon website clicks. When investors woke to the incoherence of this “new paradigm”, technology stocks collapsed. Read more of this post

BMW, Cadillac Aim to Pull Plug on Tesla With Pricey New Cars

BMW, Cadillac Aim to Pull Plug on Tesla With Pricey New Cars

JOSEPH B. WHITE

Nov. 20, 2013 6:25 p.m. ET

LOS ANGELES— Tesla Motors Inc. TSLA -3.95% is about to get deep pocketed rivals in the luxury electric luxury car market after largely having the business to itself since the 2012 launch of the Model S sedan. BMW AG BMW.XE +0.31% , General Motors Co. GM -0.84% ‘s Cadillac and VolkswagenAG VOW3.XE +0.08% ‘s Porsche and Audi NSU.XE +0.30% brands are among the luxury brands using this week’s Los Angeles Auto Show to promote new plug-in models aimed at affluent, eco-conscious Californians who make up the heart of Tesla’s buyers. Read more of this post

Blame Rich, Overeducated Elites as Our Society Frays

Blame Rich, Overeducated Elites as Our Society Frays

Complex human societies, including our own, are fragile. They are held together by an invisible web of mutual trust and social cooperation. This web can fray easily, resulting in a wave of political instability, internal conflict and, sometimes, outright social collapse. Analysis of past societies shows that these destabilizing historical trends develop slowly, last many decades, and are slow to subside. The Roman Empire, Imperial China and medieval and early-modern England and France suffered such cycles, to cite a few examples. In the U.S., the last long period of instability began in the 1850s and lasted through the Gilded Age and the “violent 1910s.” Read more of this post

Big trucks still rule Detroit in energy-conscious era

Big trucks still rule Detroit in energy-conscious era

8:38am EST

By Paul Lienert

DETROIT (Reuters) – Five years into a remarkable rebound from near-disaster, the Detroit 3 automakers still count on sales of pickup trucks and SUVs in the North American market for the bulk of their global profits, despite efforts to shift buyers into smaller, greener vehicles as part of a broader move to remake the Motor City. Promotion of green technologies, notably hybrid and electric vehicles, has been a signature policy of the Obama administration, which oversaw the $80 billion taxpayer-funded bailout in 2009 of General Motors and Chrysler. Read more of this post

Asset price ‘security alerts’ mask real risks

Last updated: November 22, 2013 9:44 am

Asset price ‘security alerts’ mask real risks

By Tracy Alloway in New York

Defining value is hamstrung by assumptions and expectations

Any reader who has flown commercially in the US during the past dozen years will no doubt have a passing awareness of the Homeland Security Advisory System. The now defunct terrorism threat scale was rolled out to indicate the threat level faced by the nation, from green – for a “low” risk of an attack – to red for “severe”. I was this week reminded of the now-moribund warning system thanks to a flight to Florida and a new research report by Fitch Ratings that draws an unusual parallel between the nation’s old colour-coded scale and US accounting rules. Read more of this post

Anxiety Over Asset Bubbles From Homes to Internet Rising in Poll

Anxiety Over Asset Bubbles From Homes to Internet Rising in Poll

Asset bubbles are forming in Internet and social media stocks as well as in the housing markets of London and China, according to the latest Bloomberg Global Poll. Eighty-two percent of the responding investors, analysts and traders who are Bloomberg subscribers said Internet and social media shares are either at or near unsustainable levels. Seventy-three percent said the same of Chinese house prices and 69 percent identified London homes as already or almost frothy. They were less concerned about U.S. housing, with 31 percent seeing prices approaching or at excessive levels. Read more of this post

An ECB Negative Deposit Rate? Don’t Hold Your Breath, Says Citi

An ECB Negative Deposit Rate? Don’t Hold Your Breath, Says Citi

Tyler Durden on 11/20/2013 13:18 -0500

While the FOMC Minutes due out in less than an hour is what everyone is looking forward to, the big surprise announcement of the day was the repeat of a rumor released initially 6 months ago, namely that the ECB is considering negative deposit rates – a concept we first speculated aboutback in June of 2012. Alas, just like last time, the latest incarnation of the NIRP rumor appears to be merely more hot air (and certainly will be exposed as such once the non-compliant mostly German ECB members hit the tape). One person who says not to hold your breath for an ECB negative rate, is Citi’s Valentin Marino, who says not only is a negative deposit rate unlikely before the results of the AQR and stress tests as it would accelerate bank deleveraging, but that it “could worsen the pervasive credit crunch and add to the growth headwinds and deflation risks in in the currency block. It would erode investors’ confidence in Eurozone’s financial institutions and accentuate their relative underperformance.”  Read more of this post