Turkey: Clash of values; Political and cultural conflicts have raised concerns for the system that brought prosperity

January 13, 2014 6:58 pm

Turkey: Clash of values

By Daniel Dombey

Political and cultural conflicts have raised concerns for the system that brought prosperity

As a corruption probe swirled around his government and his family in December,Recep Tayyip Erdogan, Turkey’s prime minister, returned to the tactic he used against last year’s mass protests: he blamed his problems on a vast international plot. Read more of this post

The Wrong Way on Bank Risk

The Wrong Way on Bank Risk

Regulators have been working hard to make new global capital rules more palatable for banks. They should now raise the minimum requirements high enough to make the risk of financial disaster more bearable for everyone else. Read more of this post

The Inequality Nightmare

DONALD KABERUKA

JAN 8, 2014

The Inequality Nightmare

ABU DHABI – “The poor cannot sleep, because they are hungry,” the Nigerian economist Sam Aluko famously said in 1999, “and the rich cannot sleep, because the poor are awake and hungry.” We are all affected by deep disparities of income and wealth, because the political and economic system on which our prosperity depends cannot continue enriching some while it impoverishes others. Read more of this post

‘The Chinese Have the Necessary Vision’; the impending global ascent of brands from emerging economies

01/08/2014 04:37 PM

Brand Expert Interview

‘The Chinese Have the Necessary Vision’ Twenty years ago, China exported six cars. Last year it exported a million. Marketing expert

Twenty years ago, China exported six cars. Last year it exported a million. Marketing expert Nirmalya Kumar speaks to SPIEGEL about the impending global ascent of brands from emerging economies.

SPIEGEL: Professor Kumar, in your recent book, you predict the breakout of future world brands from emerging markets, particularly from China. Are you not a bit premature? Even in Asia, the newly rich prefer Western brand icons like Apple or Armani to cheap local labels. Read more of this post

The Accounting Wizardry Behind Banks’ Strong Earnings

The Accounting Wizardry Behind Banks’ Strong Earnings

By Dawn Kopecki January 14, 2014

Wells Fargo (WFC) reported a personal-best $5.6 billion in fourth-quarter earnings today, overtaking JPMorgan Chase (JPM) as the most profitable U.S. bank. JPMorgan reported $5.3 billion in fourth-quarter income and $17.9 billion for all of 2013, not too shabby for a year in which the bank spent $23 billion on legal settlements. Read more of this post

Surprise! Audits Dig Deeper

January 14, 2014, 12:40 AM ET

Surprise! Audits Dig Deeper

Senior Editor

There are good surprises and bad surprises, but when it comes to an annual audit there’s only one kind. Read more of this post

Spanish Refit Erodes Chinese Edge as Business Lured Back Home

Spanish Refit Erodes Chinese Edge as Business Lured Back Home

Almost 10 years ago, Priviet Sportive SL was losing business to Chinese suppliers. These days, the Spanish clothes designer is snatching orders back as falling wages at home let it produce garments at a lower cost. Read more of this post

Scandinavian Debt Crisis Waiting to Happen Puzzles Krugman

Scandinavian Debt Crisis Waiting to Happen Puzzles Krugman

Scandinavia, which attracted investors during Europe’s sovereign debt crisis, is now coming under international scrutiny on concern that record household debt levels from Denmark to Sweden aren’t sustainable. Read more of this post

Nontraded REITs Get Aggressive; Sector Becomes a Bigger Buyer of Commercial Real Estate

Nontraded REITs Get Aggressive

Sector Becomes a Bigger Buyer of Commercial Real Estate

ROBBIE WHELAN

Updated Jan. 14, 2014 9:54 p.m. ET

A few weeks ago, Griffin-American Healthcare REIT II Inc. closed on the purchase of four senior-housing facilities collectively known as the West Loop Portfolio. The $300 million deal is noteworthy because it highlights the growing importance of so-called nontraded real-estate investment trusts in the world of commercial real-estate acquisitions. Read more of this post

Nestlé admits to errors in India expansion push

January 14, 2014 4:47 am

Nestlé admits to errors in India expansion push

By Amy Kazmin in New Delhi

Nestlé, the world’s biggest food company, has admitted to erring in India by ignoring more affluent consumers as it pursued those spending pocket change on sweets and noodles. Read more of this post

MARC FABER: We’re In A Gigantic Financial Asset Bubble That Could Burst Any Day

MARC FABER: We’re In A Gigantic Financial Asset Bubble That Could Burst Any Day

MAMTA BADKAR

JAN. 14, 2014, 7:02 PM 6,405 13

As stocks returned a whopping 30% in 2013, there have been growing concerns about a stock market bubble. Especially considering that the rally supported by only meager earnings growth. Read more of this post

Lamborghini Plans SUV in 2017 in Luxury Push Into Segment

Lamborghini Plans SUV in 2017 in Luxury Push Into Segment

Lamborghini SpA, Volkswagen (VOW) AG’s Italian supercar division, plans to start building the Urus sport-utility vehicle in three years, the brand’s first model in the segment since the Rambo Lambo of the 1990s. Read more of this post

IPO Split-Offs Gain Popularity

January 14, 2014, 12:31 AM ET

IPO Split-Offs Gain Popularity

VIPAL MONGA

Senior Editor

That’s the number of IPO split-offs companies did last year. A lukewarm environment for mergers and acquisitions encouraged companies to turn to the red-hot equity markets to shed units and raise capital. Read more of this post

Investors exit hedge funds at fastest rate in four years

Investors exit hedge funds at fastest rate in four years

Mon, Jan 13 2014

LONDON (Reuters) – Investors pulled out money from hedge funds at the fastest rate for more than four years in December, following a year in which many managers’ performance disappointed, new data showed on Monday. Read more of this post

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