Pimco’s El-Erian: Do not bet on a broad emerging market recovery

January 8, 2014 6:00 am

Do not bet on a broad emerging market recovery

By Mohamed El-Erian

Valuations are more attractive but stock picking is important

One striking aspect of last year’s markets is the extent to which emerging marketassets underperformed those in advanced economies. As investors search for returns this year among some frothy asset markets, such unusual underperformance attracts even greater attention. Read more of this post

Did Goldman Just Kill The Music? – “The S&P500 Is Now Overvalued By Almost Any Measure”

Did Goldman Just Kill The Music? – “The S&P500 Is Now Overvalued By Almost Any Measure”

Tyler Durden on 01/11/2014 12:46 -0500

“As long as the music is playing, you’ve got to get up and dance…. We’re still dancing.”

– Chuck Prince, July 2007

Late last night the music may have just skipped a major beat after Goldman released a Friday evening note that is perhaps the most bearish thing to come out of Goldman’s chief strategist David Kostin in over a year, (and who incidentally just repeated what we said most recently a week ago in “Stocks Are More Expensive Now Than At Their 2007 Peak“). To wit: Read more of this post

Cut Out the Wolves of Wall Street With ETFs

Cut Out the Wolves of Wall Street With ETFs

After watching “The Wolf of Wall Street,” the thought of investing though a financial middleman may seem as appealing as diving into the ocean right after seeing “Jaws.” Read more of this post

Covered Bond Shock Forces Denmark to Examine ‘Plan B’ for Banks

Covered Bond Shock Forces Denmark to Examine ‘Plan B’ for Banks

Denmark is mapping out a new battle plan to protect $555 billion in mortgage bonds after Europe’s bank regulator proposed rules that threaten to trigger a sell-off of the securities. Read more of this post

Challenging year forces Brazil to rethink growth strategies; Brazil: the end of an era as outflows hit 10-year high

January 9, 2014 8:10 pm

Challenging year forces Brazil to rethink growth strategies

By Samantha Pearson in São Paulo

Plastered across shop windows along São Paulo’s main Paulista Avenue this week is one word: ‘liquidação’ (sale). Stores in Brazil’s biggest city are offering discounts of up to 90 per cent as they frantically try to clear stock after the worst Christmas in a decade. Read more of this post

Central banks’ influence set to wane, despite rise in reserves

January 7, 2014 8:35 pm

Central banks’ influence set to wane, despite rise in reserves

By Delphine Strauss in London

Central banks rebuilt foreign currency reserves in the third quarter of 2013 but their influence in currency markets may decline as the US Federal Reserve scales back its exceptional stimulus. Read more of this post

Can Norwegian Air Shuttle Become the Cheapest Global Airline?

Can Norwegian Air Shuttle Become the Cheapest Global Airline?

By Devin Leonard January 09, 2014

It’s snowing in Copenhagen as Norwegian Air Shuttle Flight DY7041 lifts off. There are nearly 300 passengers on board, most of them Norwegians, Swedes, and Danes eager to escape the gloom that engulfs their part of the world in late November. Today they will arrive in Florida faster than usual. This is the first direct flight from Scandinavia to Fort Lauderdale. And it’s a bargain: The tickets are a fraction of what larger airlines charge. Read more of this post

Can a Hungry World Say No to GM Crops and Still Have Food Security?

Can a Hungry World Say No to GM Crops and Still Have Food Security?

by Marc Van Montagu | Jan 7, 2014

The world is running low on food. Can we afford to reject GM crops out of hand?

Rice provides up to 80 percent of food calories for poor societies, but lacks micronutrients such as Vitamin A. Worldwide, every year, hundreds of thousands of children die due to a lack of Vitamin A and multiples thereof become permanently blind. Read more of this post

Buy $3 Trillion in Stocks. What Could Go Wrong?

Buy $3 Trillion in Stocks. What Could Go Wrong?

Of the five economic proposals Jesse Myerson lists in Rolling Stone, one stands out, though not in a positive sense: that the U.S. start a sovereign wealth fund. It’s a proposal that would prove problematic for capital markets, pose thorny conflicts of interest, and offer vast opportunities for cronyism and graft. Read more of this post

BlueCrest Builds a Hedge Fund Empire

BlueCrest Builds a Hedge Fund Empire

By Jesse Westbrook January 09, 2014

When hedge fund managers venture into new areas, they typically move gradually. Not Michael Platt, co-founder of BlueCrest Capital Management. To expand from fixed-income investing into stocks, he negotiated a $750 million loan from 16 banks in July, allowing his firm to hire at least 25 money managers and provide them with capital to start trading immediately, according to two people with knowledge of the loan who asked not to be identified because it isn’t public. “I can’t think of any other examples like this,” says Daniel Celeghin, a partner at Casey Quirk & Associates, which advises hedge funds on fundraising. “It’s just the nature of finance, where if you are big and successful, people want to do business with you.”

Read more of this post

Bitcoin Banned by Alibaba’s Taobao After China Tightens Rules

Bitcoin Banned by Alibaba’s Taobao After China Tightens Rules

Alibaba Group Holding Ltd., China’s largest e-commerce website, will ban the sale of Bitcoin and other virtual currencies after the country’s central bank tightened regulations in December. Read more of this post

Big carmakers: Kings of the road; Size is not everything for mass-market carmakers. But it helps

Big carmakers: Kings of the road; Size is not everything for mass-market carmakers. But it helps

Jan 11th 2014 | From the print edition

AS THE first estimates of worldwide car sales in 2013 come in, it is clear that Toyota, when its production is combined with that of its affiliates Daihatsu and Subaru, is on the brink of becoming the first member of the “10m club”. It will swiftly be followed by GM and Volkswagen (see chart), both of which are also enjoying continued growth, especially in the world’s largest car market, China. Makers of luxurious models with strong brands, such as BMW and Jaguar Land Rover, can do well selling relatively small volumes of cars for handsome profits. But despite rising sales in America and Britain, and the apparent end of a six-year downturn in continental Europe, life is getting tougher for a squeezed middle, selling mainly mass-market models at margins that are slim at best. Read more of this post

Banking rivalries: Risk on, risk off; Goldman Sachs is sticking to trading while Morgan Stanley bets on wealth management

January 9, 2014 7:51 pm

Banking rivalries: Risk on, risk off

By Tom Braithwaite

Goldman Sachs is sticking to trading while Morgan Stanley bets on wealth management

Only two pure Wall Street investment banks survived the financial crisis intact. One came to be viewed as so powerful that it had become a problem for society. The other was considered lucky simply to have made it. Read more of this post

Baltic Dry Index Collapses 35% – Worst Start To Year In 30 Years

Baltic Dry Index Collapses 35% – Worst Start To Year In 30 Years

Tyler Durden on 01/10/2014 09:11 -0500

When this indicator of global trade rises, everything is rosy and reams of asset-gatherers and talking-heads wil quote it as indicative of how great the world is. When it drops – silence. There’s always an excuse – over- or under-capacity, too many ships, too few ships, etc. However, the last 2 weeks have seen a 35% collapse in the cost to ship bulk. There is a relative seasonal pattern over the holiday period – with shipping costs rising into the holiday and falling after but… this is the biggest drop from a Christmas Eve since at least 1984, 30 years! Seems like the inventory stacking of Q4 had absolutely no follow-through whatsoever… All thepost-Thanksgiving exuberance has been eviscerated from the Baltic Dry Index… and some context – this is the worst post-holiday start to the year since at least 1984!!

Bailout Risk, Far Beyond the Banks; In the too-big-to-fail parade, what about a closer look at the asset management firms that oversee trillions of investor dollars?

Bailout Risk, Far Beyond the Banks

JAN. 11, 2014

By GRETCHEN MORGENSON

Everyone knows that the largest of our nation’s banks would be destined for a taxpayer bailout if they ran into trouble anytime soon. But which nonbank financial institutions — say, asset management companies offering hedge funds or mutual funds — might also pose too-big-to-fail risks because of their size and interconnections? Read more of this post

Ars deathwatch 2014: Companies on the edge of relevance; These five companies won’t die, but they may not escape 2014 in one piece

Ars deathwatch 2014: Companies on the edge of relevance

These five companies won’t die, but they may not escape 2014 in one piece.

by Sean Gallagher – Jan 4 2014, 9:30pm MPST

With all of the holiday cheer now behind us, it’s time to take stock of the year ahead. And while 2013 was a good year for the stock market and a somewhat better-than-recessionary year for the economy as a whole, the ravages of the past twelve months have placed a handful of technology-related companies at a crossroads—one that could lead to a miraculous recovery, an acquisition, or the sort of corporate undeath that turns them into intellectual property zombies that feed on other companies’ brains for survival. Read more of this post

An Advantage Vanishes for Money Funds; In a turnaround from decades past, money market bank deposits are paying more interest, on average, than money market mutual funds

An Advantage Vanishes for Money Funds

By ANNA BERNASEK

JAN. 11, 2014

When money market mutual funds were invented back in 1971, they offered something new. Investors could earn higher yields than on bank deposits, with nearly the same liquidity and safety. But that has changed. Currently, a money market deposit at Citibank pays about five times as much interest as an investment in the Fidelity Cash Reserves fund — though, in today’s low-rate environment, the yields are minuscule. Read more of this post

Accounting watchdogs are examining the role of RSA’s former auditor Deloitte in Ireland over the irregularities that left the FTSE 100 insurer with a £200m hole in its accounts

January 10, 2014 9:48 pm

Accounting watchdogs to look at RSA auditors

By Alistair Gray, Insurance Correspondent

Accounting watchdogs are examining the role of RSA’s former auditor Deloitte in Ireland over the irregularities that left the FTSE 100 insurer with a £200m hole in its accounts. Read more of this post

A new voice for investors to drive culture change; Shareholders can and must drive a real breakthrough in the pace of change towards better corporate cultures

A new voice for investors to drive culture change

Shareholders can and must drive a real breakthrough in the pace of change towards better corporate cultures.

By Helena Morrissey

7:09PM GMT 11 Jan 2014

Taking part in Barclays CEO Antony Jenkins’s guest-edited Today programme on New Year’s Eve, I was struck by just how far we are from reconciling the goals of corporate responsibility and profitability. Read more of this post

‘Low Beta Bubble’ is ‘On The Verge of Deflating’: BofA

January 6, 2014, 3:26 P.M. ET

‘Low Beta Bubble’ is ‘On The Verge of Deflating’: BofA

By Brendan Conway

In investing, boring is often best. But there are cases where it isn’t — like when seemingly every investor wants staid and secure. Utility and telecom stocks showed it during 2013 when they sold off sharply due to investors’ interest-rate fears. The trend looks bigger than one bout of rate worries to Bank of America Merrill Lynch’s quantitative strategists. Read more of this post

Arrogance undoes the Turkish model; Erdogan’s high-handedness threatens country’s prosperity

January 8, 2014 6:33 pm

Arrogance undoes the Turkish model

Erdogan’s high-handedness threatens country’s prosperity

For much of the past decade, Recep Tayyip Erdogan, Turkey’s prime minister, has been hailed for the political and economic transformation he has wrought in his country. Since his moderate Islamist-rooted AK party came to power in 2002, Turkey has enjoyed political calm following years of unstable coalition governments. The Turkish economy has tripled in size in dollar terms, making it one of the world’s most dynamic emerging markets. When the Arab uprisings erupted in 2011, Turkey’s example of a democracy working in a Muslim majority state was lauded as a model for others in the region to follow. Read more of this post