Investment by acronyms makes no sense; Albert Edwards of Société Générale has renamed the Brics a “Bloody Ridiculous Investment Concept

Last updated: January 14, 2014 11:26 pm

Investment by acronyms makes no sense

By James Mackintosh

Lower prices can prove to be value traps

Albert Edwards of Société Générale thinks everything is overvalued – even popular acronyms. A look at the performance of the past few years suggests he has a point. Read more of this post

In the Bond Market, Lower Expectations Became the Reality; The bond investing free lunch is over; Rising interest rates have pushed prices lower, sending total returns into negative territory

In the Bond Market, Lower Expectations Became the Reality

The bond investing free lunch is over

Rising interest rates have pushed prices lower, sending total returns into negative territory

By CARLA FRIEDJAN. 10, 2014

BONDS lived down to expectations last year. The threat of rising interest rates, which had lurked in the ether for five years, finally materialized, pushing prices lower. Read more of this post

How the crash of safe assets fueled the financial crisis

How the crash of safe assets fueled the financial crisis

Published: Monday, 13 Jan 2014 | 12:54 PM ET

By: John Carney | Senior Editor, CNBC.com

Looking back now, the financial crisis and the deep recession that followed still appear mysterious. How was it that an uptick in mortgage defaults led to a situation where 12 of the 13 most important financial institutions in the U.S. were near failure, where millions of American were thrown out of their jobs, and from which the economy still apparently bears deep scars? This chart may hold the answer. Read more of this post

Hedge Fund Capital Greenwich Borrows Most in 358 Years

Hedge Fund Capital Greenwich Borrows Most in 358 Years

Greenwich, Connecticut, the top-rated home to hedge funds AQR Capital Management and Traxis Partners, is selling the most debt in its 358-year history.

The offering of $85 million in one-year notes on Jan. 16 will pay for a new auditorium at Greenwich High School, renovations to a fire station and a refurbishing of the Nathaniel Witherell nursing home. Read more of this post

Graduates Lack Jobs in Sri Lanka’s Post-Conflict North

Graduates Lack Jobs in Sri Lanka’s Post-Conflict North

By IRIN on 10:25 am January 13, 2014.
University graduates in northern Sri Lanka, which is recovering from decades of civil war, are looking at a sparse employment landscape with few opportunities on offer, say officials. Read more of this post

Germany Snubs Export Critics as Surplus Outstrips That of China

Germany Snubs Export Critics as Surplus Outstrips That of China

A prominent member of Chancellor Angela Merkel’s government rejected criticism of Germany’s export surplus, saying that Europe’s biggest economy isn’t about to change course. Read more of this post

Fall of REITs Puts Their Rhythms in Doubt; Recent Performance, Report Cast Doubt on Correlation With Rates

Fall of REITs Puts Their Rhythms in Doubt

Recent Performance, Report Cast Doubt on Correlation With Rates

ROBBIE WHELAN

Jan. 14, 2014 6:51 p.m. ET

Do bonds and REITs march to their own beats? That question was the crux of “Urban Legend: The Myth of REIT Interest Rate Sensitivity,” a report issued late last year by the National Association of Real Estate Investment Trusts. It argued that the sharp decline in REIT stock prices wasn’t so much the result of rising interest rates, but was due mainly to misperceptions by investors.

Read more of this post

Failing elites threaten our future; Leaders richly rewarded for mediocrity cannot be relied upon when things go wrong

January 14, 2014 5:06 pm

Failing elites threaten our future

By Martin Wolf

Leaders richly rewarded for mediocrity cannot be relied upon when things go wrong

©Ingram Pinn

In 2014, Europeans commemorate the 100th anniversary of the start of the first world war. This calamity launched three decades of savagery and stupidity, destroying most of what was good in the European civilisation of the beginning of the 20th century. In the end, as Churchill foretold in June 1940, “the New World, with all its power and might”, had to step “forth to the rescue and the liberation of the old”. Read more of this post

Economists: there is no such thing as the ‘economic approach’; Economics is not a method but a subject – one defined by the problems it tackles

January 14, 2014 4:50 pm

Economists: there is no such thing as the ‘economic approach’

By John Kay

Economics is not a method but a subject – one defined by the problems it tackles

Forty years ago, Chicago economist Gary Becker wrote an essay describing “the economic approach to human behaviour”. In his view, “the combined assumptions of maximising behaviour, market equilibrium and stable preferences, used relentlessly and unflinchingly, form the heart of the economic approach”. He went on to claim: “The economic approach is a comprehensive one that is applicable to all human behaviour.” His own work included an economic analysis of family life. In 1992, he was awarded the Nobel Prize in economics for “having extended the domain of microeconomic analysis to a wide range of human behaviour”. Read more of this post

Danish Banks Face Tougher Credit Rules to Tackle Record Debt

Banks in Denmark Face Tougher Credit Rules to Tackle Record Debt

Denmark’s financial regulator is looking into the option of cracking down on banks’ lending policies to address the nation’s record household debt load. Read more of this post

Booming German mid-sized firms offer few riches for banks

Booming German mid-sized firms offer few riches for banks

Mon, Jan 13 2014

* Banks target booming Mittelstand in weak European backdrop

* Competition driving down margins on loans to Mittelstand

* Long-term banking relationships may be tough to break

By Andreas Kröner

FRANKFURT, Jan 13 (Reuters) – Cut-throat competition and decades-old banking relationships mean lenders aiming to profit from Germany’s booming middle-sized companies may be chasing a mirage. Read more of this post

Bonds Captivate $16 Trillion of Pensions; Bond buyers stung by the first losses in more than a decade can look to pension funds from companies such as Ford Motor Co. (F) for a measure of redemption.

Bonds Captivate $16 Trillion of Pensions

Bond buyers stung by the first losses in more than a decade can look to pension funds from companies such as Ford Motor Co. (F) for a measure of redemption. Read more of this post

As Refinancing Wanes, Banks Remain Wary of New Loans

JANUARY 14, 2014, 9:20 PM

As Refinancing Wanes, Banks Remain Wary of New Loans

By PETER EAVIS and JESSICA SILVER-GREENBERG

The stars seem to be aligning in the housing market. Home prices have been rising for many months, and the federal government is providing immense support to bolster the mortgage market. The big banks that make home loans are strong enough to provide credit to borrowers, as seen in the fourth-quarter results reported Tuesday by JPMorgan Chase and Wells Fargo. Read more of this post

Why Vanguard is a role model for the fund industry; Almost a quarter out of every dollar invested in long-term mutual funds and ETFs in 2013 went to The Vanguard Group

Jan. 13, 2014, 9:49 a.m. EST

Why Vanguard is a role model for the fund industry

By Chuck Jaffe, MarketWatch

Almost a quarter out of every dollar invested in long-term mutual funds and ETFs in 2013 went to The Vanguard Group, according to Morningstar Inc.

Among all fund companies, Vanguard has finished first or second in terms of inflows in all but two of the past 20 years

At the risk of sounding like a commercial for the Valley Forge, Pa.-based giant—which controls well over $3 trillion in assets worldwide—the question is, “Why invest anywhere else?” Read more of this post

A productivity crisis is stalking the global economy with most countries failing last year to improve their overall efficiency for the first time in decades

Last updated: January 14, 2014 6:02 pm

Productivity crisis haunts global economy

By Chris Giles in London

A productivity crisis is stalking the global economy with most countries failing last year to improve their overall efficiency for the first time in decades. Read more of this post

Wells Fargo Is Now No. 1 Bank Profit Maker

Wells Fargo Is Now No. 1 Bank Profit Maker

J.P. Morgan Hurt by Legal Costs

DAN FITZPATRICK and SHAYNDI RAICE

Jan. 14, 2014 2:12 p.m. ET

J.P. Morgan saw fourth-quarter earnings fall from a year earlier amid regulatory settlements and weak trading results. Maureen Farrell breaks down whether the skies are finally clearing for the bank. Photo: Getty Images. Read more of this post

‘Earth is Gold’: Graft Probe Turns Eyes to Turkey Building Boom

‘Earth is Gold’: Graft Probe Turns Eyes to Turkey Building Boom

By Nick Tattersall on 12:00 pm January 14, 2014.
Istanbul. Look closely on a clear day, and the silhouette of Istanbul’s historic peninsula, its minarets puncturing the sky, has changed for the first time in centuries.

Three luxury towers, their top-floor apartments selling for upwards of a million dollars apiece, loom on the horizon, graceless symbols of Turkey’s rapid modernization during a decade of Prime Minister Tayyip Erdogan’s rule. Read more of this post