Wal-Mart to Widows Will Feel U.S. Food Stamp Cuts

Wal-Mart to Widows Will Feel U.S. Food Stamp Cuts

By Derek Wallbank and Alan Bjerga – Nov 1, 2013

Annie Crist says she dreads telling her two daughters that cuts in food-stamp benefits taking effect today means less chicken and fewer hamburgers for dinner. And with deeper cuts looming as part of a possible U.S. budget deal, Crist and other recipients may feel an even greater pinch — along with retailers such as Wal-Mart Stores Inc., Target Corp. and Kroger Co. Read more of this post

Trusts and financial transparency: Trusts, foundations and other “legal arrangements” are a vulnerable flank in the fight against dirty money

Trusts and financial transparency

The weak link

Oct 31st 2013, 16:50 by M.V. | NEW YORK

A FEW years ago Mark Morris, a Zurich-based tax consultant with a conscience, requested a meeting with the European Commission to explain the many devious ways in which tax evaders were using shell companies and other vehicles to conceal their interest in offshore bank accounts. The official he met “seemed uninterested and offered me 20 minutes,” Mr Morris recalls, “but once I started describing all the loopholes his eyes lit up. Two hours later he was still listening, scribbling furiously.” Read more of this post

Public Pension Funds Need to Show the Money

Public Pension Funds Need to Show the Money

By David Crane – Oct 31, 2013

Syndicated columnist David Sirota is on a mission to prevent public pension funds from investing in “alternative assets” such as private-equity and hedge funds. In Salon this month, Sirota criticized these investments as “a transfer of retirement income to Wall Street.” In another column responding to a piece I wrote defending pension-fund investment in such alternatives, he characterized the practice as “con artistry.” Read more of this post

Property hot spots renew easy-money bubble fears

Property hot spots renew easy-money bubble fears

2:36am EDT

By Alan Wheatley and Tim Reid

LONDON/LOS ANGELES (Reuters) – 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

Perhaps half a million people live illegally in Britain. The government’s draconian new immigration bill will not change that much

Perhaps half a million people live illegally in Britain. The government’s draconian new immigration bill will not change that much

Oct 26th 2013 |From the print edition

MARY, a Zimbabwean woman, first came to Britain in 2003. She flew in on a South African passport and immediately claimed asylum. Her claim was rejected, as the Home Office believed she really was South African. But, like many asylum seekers, she did not leave. Several years—and appeals—later, she was almost deported, but avoided it by cutting herself with a blade she found in her cell. She has no right to be in Britain, let alone to work or claim benefits. But nor is she likely to be deported. “I don’t really know what happens now,” she says. Read more of this post

Pay and economic growth: A shrinking slice; Labour’s share of national income has fallen. The right remedy is to help workers, not punish firms

Pay and economic growth: A shrinking slice; Labour’s share of national income has fallen. The right remedy is to help workers, not punish firms

Nov 2nd 2013 |From the print edition

IMAGINE the proceeds of economic output as a pie, crudely divided between the wages earned by workers and the returns accrued to the owners of capital, whether as profits, rents or interest income. Until the early 1980s the relative sizes of those slices were so stable that their constancy became an economic rule of thumb. Much of modern macroeconomics simply assumes the shares remain the same. That stability provides the link between productivity and prosperity. If workers always get the same slice of the economic pie, then an improvement in their average productivity—which boosts growth—should translate into higher average earnings. Read more of this post

MSCI Puts ISS on Block amid Proxy Firm Headwinds

October 31, 2013, 6:09 PM ET

MSCI Puts ISS on Block amid Proxy Firm Headwinds

CFO Report Editor, WSJ Pro

This article was originally posted on our sister blog, Risk & Compliance Journal.

By Gregory J. Millman

MSCI Inc. announced in its third quarter earnings release that it was exploring strategic alternatives for its influential proxy advisor and governance-services provider ISS. The announcement comes as the proxy advisory business is facing regulatory scrutiny, market headwinds, and questions about the validity of its analytical models. The announcement quoted Henry A Fernandez, chairman and chief executive of MSCI, saying of ISS that,  “Over the past three years, MSCI has worked hard to return that business to a growth track.” Mr. Fernandez further said, “the Governance business reported organic revenue growth of 7% and Adjusted [earnings before interest, tax, depreciation and amortization] growth of 12%. We believe the time is right to explore our strategic alternatives.” A spokesman for ISS declined to comment beyond the release.

FedEx and UPS have turned Memphis and Louisville into “aerotropolises”

FedEx and UPS have turned Memphis and Louisville into “aerotropolises”

Nov 2nd 2013 | MEMPHIS |From the print edition

AFTER most Memphians have gone to bed and before they switch on their coffee-makers, around 150 jets land at Memphis International Airport and take off again. They have no passengers—just stuff. A Boeing 777 jet may feel cramped to those sardined in coach class, but with all the seats and compartments stripped out it is immense—able to carry 225,000 pounds (102 tonnes) of cargo non-stop from Tennessee to Shanghai. Read more of this post

Fed’s Bubble Alarm Stuck on Snooze

Fed’s Bubble Alarm Stuck on Snooze

By Jonathan Weil – Oct 31, 2013

The Federal Reserve’s policy of unrestrained quantitative easing has worked like rocket fuel for U.S. stocks this year. Case in point:Rocket Fuel Inc. It’s the sort of company that probably couldn’t have done an initial public offering absent a raging bull market. Rocket Fuel says its business is “big data” and “artificial intelligence” (as opposed to real intelligence). Mainly, it helps advertising agencies place orders for online ad campaigns. Read more of this post

Chinese investors sour on Brazil

Updated: Friday November 1, 2013 MYT 3:03:00 PM

Chinese investors sour on Brazil

SAO PAULO: For Chinese investors, Brazil is no longer the promised land. After making a big push into the South American giant in search of raw materials such as iron ore, as well as a promising market for their consumer goods, Chinese executives have grown frustrated with stagnant economic growth, heavy costs and what they see as a political and popular backlash against their presence. As a result, Chinese investment is falling. As much as two-thirds of the roughly US$70bil in projects announced since 2007 is either on hold or has been cancelled, according to interviews with Chinese and Brazilian officials.

Read more of this post

Britain’s plans for a high-speed railway are deeply flawed. Spend the money on boring stuff instead

Britain’s plans for a high-speed railway are deeply flawed. Spend the money on boring stuff instead

Nov 2nd 2013 |From the print edition

THE Victorians did Britain a favour by building such a terrific railway network. A map of the country’s lines resembles a dense tangle of blood vessels, clotted around London, the West Midlands and the urban north-west. France’s, by contrast, looks like a lazy spider’s web. But the Victorians also bequeathed to their successors a powerful sense of inferiority. Surely the nation ought to be able to build like that again? Read more of this post

Britain runs towards nuclear energy as other countries flee

Britain runs towards nuclear energy as other countries flee

Oct 26th 2013 |From the print edition

TOURING the muddy, unfinished site of Calder Hall, Britain’s first nuclear power station, in 1955, The Economist’s correspondent detected an “infectious, irresistible sense of excitement”. Some fear the flattened earth at Hinkley Point in Somerset, soon to host Britain’s first new reactors since 1995, will give way to a money pit. On October 21st the government said that a consortium led by EDF, a state-controlled French firm, has committed to building Hinkley C. To secure the £16 billion ($26 billion) construction costs, the government has promised EDF a price of £92.50 per megawatt hour for the power it generates—about twice the current wholesale price of electricity. Read more of this post

Hybrid corporate bonds: The rating game; The latest fashion in corporate borrowing has a familiar air

Hybrid corporate bonds: The rating game; The latest fashion in corporate borrowing has a familiar air

Nov 2nd 2013 |From the print edition

AS CORPORATE-BOND issuance has swelled in recent years, so have its more exotic offshoots. None is more exotic than “hybrid” bonds, of which €23 billion-worth ($32 billion) have been issued in Europe this year, according to Royal Bank of Scotland, more than doubling the size of the market. Banks have been issuing instruments called hybrid bonds for a while, most recently as part of the effort to strengthen their balance-sheets after the financial crisis. Investors in such issues will be “bailed in” (their debt converted into equity) if the bank gets into trouble. But corporate hybrid bonds are different—indeed they are rather odd creatures. Their main appeal is that they are treated by rating agencies as part-bond, part-equity; most recent issues have been classified as half-and-half. Read more of this post

Greek survivors of the crisis are those that move fast and think creatively

Survivors of the crisis are those that move fast and think creatively

Nov 2nd 2013 |From the print edition
APOSTOLOS KAISIDIS is thankful that in 2008, after nearly half a century dealing in cars, his family firm moved out of Thessaloniki, Greece’s second-largest city, to a cheaper place 50km away, and started repairing vehicles as well as selling them. If it hadn’t, “we would probably be bankrupt now,” he says. In crisis-ridden Greece, companies have had to adapt to survive. Read more of this post

Buffett’s $40 Billion Cash Pile Provides Acquisition Fuel

Buffett’s $40 Billion Cash Pile Provides Acquisition Fuel

Warren Buffett, who aims to have $20 billion in cash at his Berkshire Hathaway Inc. (BRK/A), isn’t investing fast enough to keep money from piling up. Berkshire will post a $4.3 billion third-quarter profit, according to an estimate from Barclays Plc, adding to a cash hoard of $35.7 billion at the end of June. Buffett also got back $4.4 billion this month that was lent to help Mars Inc. buy Wm. Wrigley Jr. Co. in 2008. Read more of this post

Money mirage exposes emerging markets; The real problem for EM assets is illusion of abundant liquidity

October 31, 2013 8:45 am

Money mirage exposes emerging markets

By Gillian Tett

The real problem for EM assets is illusion of abundant liquidity

If a shock was to hit Brazil, India, Indonesia – or any other emerging market country – tomorrow, how would investors react? Would asset values adjust smoothly, amid an explosion of trading flows? Or would markets instead freeze up, as liquidity evaporated? It is not an academic question. Earlier this year, when investors started to speculate about an American “taper” – or wind-down from quantitative easing – this mere conjecture was enough to spark a dramatic gyration in the value of some emerging market assets, such as Indian or Brazilian equities. Read more of this post

Asia’s Rising Debt Brings Back Memories of 2007

October 31, 2013, 3:17 AM

Asia’s Rising Debt Brings Back Memories of 2007

NATASHA BRERETON-FUKUI

With debt levels rising across Asia in an era of easy money, many observers have asked if the region is facing a repeat of the 1997 Asian financial crisis. Perhaps a more relevant question is whether it’s 2007 all over again. A report this week by Standard & Poor’s Ratings Services notes similarities between Asia’s rising household debt – fueled by waves of cash unleashed by quantitative easing in the developed world — and the excessive private-sector borrowing that helped trigger the U.S. subprime mortgage crisis and a global recession. Read more of this post

Are China’s Banks Next?

Are China’s Banks Next?

Simon Johnson, a former chief economist of the IMF, is a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-founder of a leading economics blog, The Baseline Scenario. He is the co-author, with James Kwak, ofWhite House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.

30 October 2013

WASHINGTON, DC – America’s recent bout of dysfunctional politics and the eurozone’s on-again, off-again crisis should, on the face of it, present a golden opportunity to China. To be sure, the malaise in the United States and Europe is likely to hurt Chinese exports; but, over the long term, China wants to reorient its economy toward domestic consumption. With the Tea Party wing of America’s Republican Party scaring investors out of the dollar, interest in the Chinese renminbi’s potential as an international reserve currency can only increase. Read more of this post

China GDP figures wrong by US$610bil: report

Updated: Wednesday October 30, 2013 MYT 5:51:58 PM

China GDP figures wrong by US$610bil: report

BEIJING: China’s economy would be at least 3.7 trillion yuan (US$610bil) bigger than Beijing thinks if the country’s local government statistics were to be believed, state media reported Wednesday. The Economic Information Daily tallied up gross domestic product (GDP) data from 28 of mainland China’s 31 provincial-level authorities, and arrived at 42.4 trillion yuan for the first nine months of the year. But the figure for the whole country, already announced by Beijing, is 3.7 trillion yuan lower. The discrepancy – which has been in place for more than two decades – has been widening rapidly in recent years, the Economic Information Daily said. Read more of this post

A different approach in design and marketing in the past decades has catapulted Pernod Ricard to its current leading position in the world’s liquor market

2013-10-30 16:44

Pernod Ricard rises on unique marketing

By Choi Kyong-ae

A different approach in design and marketing in the past decades has catapulted Pernod Ricard to its current leading position in the world’s liquor market.
Back in the 1980s, most advertisements took a similar form as they were manufactured based on customers’ daily lives but the French liquor company decided not to join the mainstream to sell its products. Read more of this post

Why you shouldn’t buy shares in Legoland owner Merlin Entertainment

Why you shouldn’t buy shares in Legoland owner Merlin Entertainment

Questor editor John Ficenec says investors should avoid buying shares in Merlin Entertainment when it floats

By John Ficenec, Questor editor

1:03PM GMT 30 Oct 2013

Merlin Entertainments, the owner of Alton Towers and Madame Tussauds, is launching its £3bn IPO. Will this be another Royal Mail and rocket on day one or will it fall as flat as Facebook? Will Merlin conjure up Royal Mail style gains? First up, the theme park owner is a very different animal from Royal Mail. Spending on trips to theme parks is discretionary and dependent on consumer confidence and therefore more cyclical. Questor thinks Merlin revenue and profitability is therefore exposed to a downturn. Read more of this post