South Korea’s Kakao Pushes Boundaries of Social Media; Far From Keeping Things Simple, Ventures Include Basic Messaging, Gaming and Celebrity ‘Friending’

South Korea’s Kakao Pushes Boundaries of Social Media

Far From Keeping Things Simple, Ventures Include Basic Messaging, Gaming and Celebrity ‘Friending’

JONATHAN CHENG 

Feb. 25, 2014 2:15 p.m. ET

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WhatsApp’s Jan Koum next to Kakao’s Sirgoo Lee (right) on Monday. Kakao

BARCELONA— Jan Koum, WhatsApp Inc.’s chief executive, vowed this week to keep his messaging service simple, despite a $19 billion deal to be swallowed up by Facebook Inc. Read more of this post

El-Erian To Gross “I’m Tired Of Cleaning Up Your Shit”

El-Erian To Gross “I’m Tired Of Cleaning Up Your Shit”

Tyler Durden on 02/25/2014 13:17 -0500

Bill Gross, by his own admission, is a demanding boss; but as the WSJ reports, one day last June (amid the bond sell-off), things went a little turbo (leading to Mohamed El-Erian’s recent resignation):

Gross: “I have a 41-year track record of investing excellence… What do you have?”

El-Erian: “I’m tired of cleaning up your shit.” Read more of this post

What Columbus Missed: Royce Rediscovers India

What Columbus Missed: Royce Rediscovers India

by Royce FundsFebruary 25, 2014, 10:11 am

In 1492, Italian explorer Christopher Columbus set sail to discover India. He missed his mark, however, landing in America instead. The rest, as they say, is history—with the exception that more than 500 years later India is still worthy of discovery for many Western investors. Read more of this post

Carl Icahn’s criticism of eBay’s board highlights Silicon Valley’s systemic issues

Carl Icahn’s criticism of eBay’s board highlights Silicon Valley’s systemic issues

BY VIVEK WADHWA

February 25 at 1:08 pm

The compositions of the boards of Silicon Valley companies are once again in the spotlight. Recently, Twitter was called out for having a board comprising of members of the Silicon Valley Boys Club. Now Carl Icahn is accusing eBay board members of being in conflict.  He wrote an open letter to eBay shareholders excoriating its management and board for various alleged lapses in corporate governance. Read more of this post

Small miners size up mergers, deals may be elusive – Reuters survey

Small miners size up mergers, deals may be elusive – Reuters survey

12:09pm EST

By Allison Martell and Euan Rocha

TORONTO (Reuters) – Many of the small Canadian-listed mineral explorers that supply global major miners with new projects are considering merging with peers, according to a Reuters survey, but for most it may be tough to close deals. Read more of this post

Battle for Bitcoin: Will it survive?

Battle for Bitcoin: Will it survive?

Rick Jervis, and Jon Swartz, USATODAY7:58 p.m. EST February 25, 2014

The future of Bitcoin is being hotly debated in the wake of a huge online exchange site, but most say the cryptocurrency will move ahead.

Cryptocurrency experts around the globe are waging a furious back-and-forth battle to predict the future of Bitcoin — but the consensus is that the renegade currency will survive its first big setback just fine. Read more of this post

Are Bill Gross, Frontier Markets Vulnerable?

TUESDAY, FEBRUARY 25, 2014

Are Bill Gross, Frontier Markets Vulnerable?

By JOHN KIMELMAN  | MORE ARTICLES BY AUTHOR

A negative WSJ article puts Pimco’s leader on the defensive. And are frontier markets too rich?

There was one story in the financial press that everyone was talking about Tuesday.

The Wall Street Journal reported in a lengthy front-page feature (the piece is behind a paywall) that Pimco co-founder Bill Gross created a toxic work environmentthat led to last month’s surprise decision by his No. 2, the respected Mohamed El-Erian, to leave the firm. Read more of this post

Does the Capital Market Punish Managerial Myopia?

Does the Capital Market Punish Managerial Myopia?

Jamie Tong 

University of Western Australia; Financial Research Network (FIRN)

Feida Zhang 

Murdoch University – School of Business
February 14, 2014
FIRN Research Paper

Abstract: 
The extant literature provides conflicting arguments on whether the capital market punishes managers’ myopic behavior. Stein (1988, 1989) argues that the capital market is myopic and will push managers to behave myopically. In contrast, Jensen (1988) believes that the capital market is efficient and will punish managerial myopia. However, empirical studies on how the stock market reacts to managerial myopia are scarce. This study aims to fill in this gap by examining how the capital market reacts to managerial myopia. Using managers’ cutting R&D to meet short-term earnings goals as a research setting, this study reveals that the capital market actually penalizes managerial myopia, especially for firms with high investor sophistication. Our results are consistent with Jensen’s (1988) contention that the security market is not shortsighted. Additionally, we document that compensation, especially cash compensation, could be one of the reasons why managers behave myopically.

Sweden’s Banking Model Offers Lessons for Europe

Sweden’s Banking Model Offers Lessons for Europe

20 FEB 2014 – JONATHAN KANDELL

Peter Einarsson’s title is branch manager, but he acts like a CEO.

Einarsson enjoys a degree of autonomy almost unheard-of for a man in his position, running the Svenska Handelsbanken branch in the heart of Stockholm’s financial district as if it were his own business. He doesn’t worry about concentration risk and has broad leeway from senior management to grant loans quickly without approval from higher-ups. “I decide how we should function in the market covered by this branch — whether we should focus more on corporate or retail clients,” he explains. Read more of this post

How to Manufacture More Time in Your Day: Embrace Your Inner Pessimist; Think Like a Chef

HOW TO MANUFACTURE MORE TIME IN YOUR DAY

SOME PEOPLE KNOW HOW TO MAKE THE MOST OF EVERY MINUTE, WHILE THE REST OF US LAMENT THAT THERE’S NOT ENOUGH HOURS IN THE DAY. THE KEY COULD BE AS SIMPLE AS KNOWING WHAT YOU’RE WORKING WITH. HERE’S HOW TO TAKE CONTROL OF THE TIME YOU’RE GIVEN.

BY LAURA VANDERKAM

You know the type: A colleague constantly delivers at work. He exudes a sense of calm, and yet as you get to know him, you find out he’s also coaching soccer, running marathons, and taking a wine-tasting class that he’s never had to skip. Read more of this post

Uniqlo tweaks ‘Made for All’ to give U.S. shoppers a ‘3-D’ fit

Uniqlo tweaks ‘Made for All’ to give U.S. shoppers a ‘3-D’ fit

4:05am EST

By Chang-Ran Kim and Ritsuko Shimizu

TOKYO (Reuters) – Fast Retailing Co’s (9983.T: Quote,ProfileResearchStock Buzz) casual clothing brand Uniqlo is rethinking its “Made for All” strategy, looking to offer lower priced lines in smaller Asian cities and more generous sizes to fit the U.S. market, a top executive said on Tuesday. Read more of this post

China’s $12 trillion corporate debt pushes up refunding costs, drives mergers

China’s $12 trillion corporate debt pushes up refunding costs, drives mergers

4:21am EST

By Matthew Miller and Umesh Desai

BEIJING/HONG KONG (Reuters) – China’s corporate debt has hit record levels and is likely to accelerate a wave of domestic restructuring and trigger more defaults, as credit repayment problems rise.

Chinese non-financial companies held total outstanding bank borrowing and bond debt of about $12 trillion at the end of last year – equal to over 120 percent of GDP – according to Standard & Poor’s estimates. Read more of this post

Physics is enjoying a golden age

Physics is enjoying a golden age

By Michael GersonTuesday, February 25, 8:54 AM E-mail the writer

Each of the GPS satellites that allow me to navigate to a new restaurant carries an atomic clock that needs to be accurate in order to triangulate the speed and position of my moving car. But there are a couple of problems. Einstein’s Theory of Special Relativity predicts that clocks hurtling through space at satellite speed will appear to tick more slowly than earthbound clocks by about 7,000 nanoseconds each day (a nanosecond is a billionth of a second). His Theory of General Relativity, on the other hand, predicts that clocks farther from a massive object (the Earth), will advance faster than clocks on the ground, in this case by a little more than 45,000 nanoseconds. Read more of this post

Lincoln’s Boys: John Hay, John Nicolay, and the War for Lincoln’s Image; A timely and intimate look into Abraham Lincoln’s White House through the lives of his two closest aides and confidants

Lincoln’s Boys: John Hay, John Nicolay, and the War for Lincoln’s Image Hardcover

by Joshua Zeitz  (Author)

A timely and intimate look into Abraham Lincoln’s White House through the lives of his two closest aides and confidants
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Lincoln’s official secretaries John Hay and John Nicolay enjoyed more access, witnessed more history, and knew Lincoln better than anyone outside of the president’s immediate family. Hay and Nicolay were the gatekeepers of the Lincoln legacy. They read poetry and attendeded the theater with the president, commiserated with him over Union army setbacks, and plotted electoral strategy. They were present at every seminal event, from the signing of the Emancipation Proclamation to Lincoln’s delivery of the Gettysburg Address—and they wrote about it after his death. Read more of this post

White hats to the rescue: Law-abiding hackers are helping businesses to fight off the bad guys

White hats to the rescue: Law-abiding hackers are helping businesses to fight off the bad guys

Feb 22nd 2014 | SAN FRANCISCO | From the print edition

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ANDREW WHITAKER has made a career out of breaking into things. A “white hat” hacker in techie jargon, Mr Whitaker leads a team of security specialists at Knowledge Consulting Group who spend their days trying to worm their way into clients’ computer systems to see how vulnerable they are to cyber-criminals, spies and other nefarious “black hats”. The team’s record is both impressive and alarming. Some of the firm’s clients are utilities, and Mr Whitaker and his colleagues often target software that controls critical infrastructure, such as water and power supplies. “We’re getting in pretty much every single time,” he says. Read more of this post

How Abraham Lincoln’s secretaries helped establish his legacy

How Abraham Lincoln’s secretaries helped establish his legacy

Feb 22nd 2014 | From the print edition

Lincoln’s Boys: John Hay, John Nicolay, and the War for Lincoln’s Image. By Joshua Zeitz. Viking; 390 pages; $29.95. Buy from Amazon.comAmazon.co.uk

AMERICANS crave books about Abraham Lincoln. But finding fresh material on their 16th president is tough. So some writers are turning to his acolytes—the cabinet, the generals, the son. Read more of this post

Governing the high seas: In deep water; Humans are damaging the high seas. Now the oceans are doing harm back

Governing the high seas: In deep water; Humans are damaging the high seas. Now the oceans are doing harm back

Feb 22nd 2014 | From the print edition

ABOUT 3 billion people live within 100 miles (160km) of the sea, a number that could double in the next decade as humans flock to coastal cities like gulls. The oceans produce $3 trillion of goods and services each year and untold value for the Earth’s ecology. Life could not exist without these vast water reserves—and, if anything, they are becoming even more important to humans than before.

Mining is about to begin under the seabed in the high seas—the regions outside the exclusive economic zones administered by coastal and island nations, which stretch 200 nautical miles (370km) offshore. Nineteen exploratory licences have been issued. New summer shipping lanes are opening across the Arctic Ocean. The genetic resources of marine life promise a pharmaceutical bonanza: the number of patents has been rising at 12% a year. One study found that genetic material from the seas is a hundred times more likely to have anti-cancer properties than that from terrestrial life.

But these developments are minor compared with vaster forces reshaping the Earth, both on land and at sea. It has long been clear that people are damaging the oceans—witness the melting of the Arctic ice in summer, the spread of oxygen-starved dead zones and the death of coral reefs. Now, the consequences of that damage are starting to be felt onshore.

Thailand provides a vivid example. In the 1990s it cleared coastal mangrove swamps to set up shrimp farms. Ocean storm surges in 2011, no longer cushioned by the mangroves, rushed in to flood the country’s industrial heartland, causing billions of dollars of damage.

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More serious is the global mismanagement of fish stocks. About 3 billion people get a fifth of their protein from fish, making it a more important protein source than beef. But a vicious cycle has developed as fish stocks decline and fishermen race to grab what they can of the remainder. According to the Food and Agriculture Organisation (FAO), a third of fish stocks in the oceans are over-exploited; some estimates say the proportion is more than half (see chart). One study suggested that stocks of big predatory species—such as tuna, swordfish and marlin—may have fallen by as much as 90% since the 1950s. People could be eating much better, were fishing stocks properly managed.

The forests are often called the lungs of the Earth, but the description better fits the oceans. They produce half the world’s supply of oxygen, mostly through photosynthesis by aquatic algae and other organisms. But according to a forthcoming report by the Intergovernmental Panel on Climate Change (IPCC; the group of scientists who advise governments on global warming), concentrations of chlorophyll (which helps makes oxygen) have fallen by 9-12% in 1998-2010 in the North Pacific, Indian and North Atlantic Oceans.

Climate change may be the reason. At the moment, the oceans are moderating the impact of global warming—though that may not last (see article). Warm water rises, so an increase in sea temperatures tends to separate cold and warm water into more distinct layers, with shallower mixed layers in between. That seems to lower the quantity of nutrients available for aquatic algae, and to lead to decreased chlorophyll concentrations. Changes in the oceans, therefore, may mean less oxygen will be produced. This cannot be good news, though scientists are still debating the likely consequences. The world is not about to suffocate. But the result could be lower oxygen concentrations in the oceans and changes to the climate because the counterpart of less oxygen is more carbon—adding to the build-up of greenhouse gases. In short, the decades of damage wreaked on the oceans are now damaging the terrestrial environment.

A tragedy foretold

The oceans exemplify the “tragedy of the commons”—the depletion of commonly held property by individual users, who harm their own long-term interests as a result. For decades scientists warned that the European Union’s fishing quotas were too high, and for decades fishing lobbyists persuaded politicians to ignore them. Now what everyone knew would happen has happened: three-quarters of the fish stocks in European waters are over-exploited and some are close to collapse.

The salient feature of such a tragedy is that the full cost of damaging the system is not borne by those doing the damage. This is most obvious in fishing, but goes further. Invasive species of many kinds are moved around the world by human activity—and do an estimated $100 billion of damage to oceans each year. Farmers dump excess fertiliser into rivers, which finds its way to the sea; there cyanobacteria (blue-green algae) feed on the nutrients, proliferate madly and reduce oxygen levels, asphyxiating all sea creatures. In 2008, there were over 400 “dead zones” in the oceans. Polluters pump out carbon dioxide, which dissolves in seawater, producing carbonic acid. That in turn has increased ocean acidity by over a quarter since the start of the Industrial Revolution. In 2012, scientists found pteropods (a kind of sea snail) in the Southern Ocean with partially dissolved shells.

It is sometimes possible to preserve commons by assigning private property rights over them, thus giving users a bigger stake in their long-term health. That is being tried in coastal and island nations’ exclusive economic zones. But it does not apply on the high seas. Under international law, fishing there is open to all and minerals count as “the common heritage of mankind”. Here, a mishmash of international rules and institutions determines the condition of the watery commons.

The high seas are not ungoverned. Almost every country has ratified the UN Convention on the Law of the Sea (UNCLOS), which, in the words of Tommy Koh, president of UNCLOS in the 1980s, is “a constitution for the oceans”. It sets rules for everything from military activities and territorial disputes (like those in the South China Sea) to shipping, deep-sea mining and fishing. Although it came into force only in 1994, it embodies centuries-old customary laws, including the freedom of the seas, which says the high seas are open to all. UNCLOS took decades to negotiate and is sacrosanct. Even America, which refuses to sign it, abides by its provisions.

But UNCLOS has significant faults. It is weak on conservation and the environment, since most of it was negotiated in the 1970s when these topics were barely considered. It has no powers to enforce or punish. America’s refusal to sign makes the problem worse: although it behaves in accordance with UNCLOS, it is reluctant to push others to do likewise.

Alphabet bouillabaisse

image002A dwindling catch

Specialised bodies have been set up to oversee a few parts of the treaty, such as the International Seabed Authority, which regulates mining beneath the high seas. But for the most part UNCLOS relies on member countries and existing organisations for monitoring and enforcement. The result is a baffling tangle of overlapping authorities (see diagram) that is described by the Global Ocean Commission, a new high-level lobby group, as a “co-ordinated catastrophe”.

Individually, some of the institutions work well enough. The International Maritime Organisation, which regulates global shipping, keeps a register of merchant and passenger vessels, which must carry identification numbers. The result is a reasonably law-abiding global industry. It is also responsible for one of the rare success stories of recent decades, the standards applying to routine and accidental discharges of pollution from ships. But even it is flawed. The Institute for Advanced Sustainability Studies, a German think-tank, rates it as the least transparent international organisation. And it is dominated by insiders: contributions, and therefore influence, are weighted by tonnage.

Other institutions look good on paper but are untested. This is the case with the seabed authority, which has drawn up a global regime for deep-sea mining that is more up-to-date than most national mining codes. For once, therefore, countries have settled the rules before an activity gets under way, rather than trying to catch up when the damage starts, as happened with fishing.

The problem here is political rather than regulatory: how should mining revenues be distributed? Deep-sea minerals are supposed to be “the common heritage of mankind”. Does that mean everyone is entitled to a part? And how to share it out?

The biggest failure, though, is in the regulation of fishing. Overfishing does more damage to the oceans than all other human activities there put together. In theory, high-seas fishing is overseen by an array of regional bodies. Some cover individual species, such as the International Commission for the Conservation of Atlantic Tunas (ICCAT, also known as the International Conspiracy to Catch All Tuna). Others cover fishing in a particular area, such as the north-east Atlantic or the South Pacific Oceans. They decide what sort of fishing gear may be used, set limits on the quantity of fish that can be caught and how many ships are allowed in an area, and so on.

Here, too, there have been successes. Stocks of north-east Arctic cod are now the highest of any cod species and the highest they have been since 1945—even though the permitted catch is also at record levels. This proves it is possible to have healthy stocks and a healthy fishing industry. But it is a bilateral, not an international, achievement: only Norway and Russia capture these fish and they jointly follow scientists’ advice about how much to take.

There has also been some progress in controlling the sort of fishing gear that does the most damage. In 1991 the UN banned drift nets longer than 2.5km (these are nets that hang down from the surface; some were 50km long). A series of national and regional restrictions in the 2000s placed limits on “bottom trawling” (hoovering up everything on the seabed)—which most people at the time thought unachievable.

But the overall record is disastrous. Two-thirds of fish stocks on the high seas are over-exploited—twice as much as in parts of oceans under national jurisdiction. Illegal and unreported fishing is worth $10 billion-24 billion a year—about a quarter of the total catch. According to the World Bank, the mismanagement of fisheries costs $50 billion or more a year, meaning that the fishing industry would reap at least that much in efficiency gains if it were properly managed.

Most regional fishery bodies have too little money to combat illegal fishermen. They do not know how many vessels are in their waters because there is no global register of fishing boats. Their rules only bind their members; outsiders can break them with impunity. An expert review of ICCAT, the tuna commission, ordered by the organisation itself concluded that it was “an international disgrace”. A survey by the FAO found that over half the countries reporting on surveillance and enforcement on the high seas said they could not control vessels sailing under their flags. Even if they wanted to, then, it is not clear that regional fishery bodies or individual countries could make much difference.

But it is far from clear that many really want to. Almost all are dominated by fishing interests. The exceptions are the organisation for Antarctica, where scientific researchers are influential, and the International Whaling Commission, which admitted environmentalists early on. Not by coincidence, these are the two that have taken conservation most seriously.

Empty promises

Countries could do more to stop vessels suspected of illegal fishing from docking in their harbours—but they don’t. The FAO’s attempt to set up a voluntary register of high-seas fishing boats has been becalmed for years. The UN has a fish-stocks agreement that imposes stricter demands than regional fishery bodies. It requires signatories to impose tough sanctions on ships that break the rules. But only 80 countries have ratified it, compared with the 165 parties to UNCLOS. One study found that 28 nations, which together account for 40% of the world’s catch, are failing to meet most of the requirements of an FAO code of conduct which they have signed up to.

It is not merely that particular institutions are weak. The system itself is dysfunctional. There are organisations for fishing, mining and shipping, but none for the oceans as a whole. Regional seas organisations, whose main responsibility is to cut pollution, generally do not cover the same areas as regional fishery bodies, and the two rarely work well together. (In the north-east Atlantic, the one case where the boundaries coincide, they have done a lot.) Dozens of organisations play some role in the oceans (including 16 in the UN alone) but the outfit that is supposed to co-ordinate them, called UN-Oceans, is an ad-hoc body without oversight authority. There are no proper arrangements for monitoring, assessing or reporting on how the various organisations are doing—and no one to tell them if they are failing.

Pressure for change is finally building up. According to David Miliband, a former British foreign secretary who is now co-chairman of the Global Ocean Commission, the current mess is a “terrible betrayal” of current and future generations. “We need a new approach to the economics and governance of the high seas,” he says.

That could take different forms. Environmentalists want a moratorium on overfished stocks, which on the high seas would mean most of them. They also want regional bodies to demand impact assessments before issuing fishing licences. The UN Development Programme says rich countries should switch some of the staggering $35 billion a year they spend subsidising fishing on the high seas (through things like cheap fuel and vessel-buy-back programmes) to creating marine reserves—protected areas like national parks.

Others focus on institutional reform. The European Union and 77 developing countries want an “implementing agreement” to strengthen the environmental and conservation provisions of UNCLOS. They had hoped to start what will doubtless be lengthy negotiations at a UN conference in Rio de Janeiro in 2012. But opposition from Russia and America forced a postponement; talks are now supposed to start by August 2015.

Still others say that efforts should be concentrated on improving the regional bodies, by giving them more money, greater enforcement powers and mandates that include the overall health of their bits of the ocean. The German Advisory Council on Global Change, a think-tank set up by the government, argues for an entirely new UN body, a World Oceans Organisation, which it hopes would increase awareness of ocean mismanagement among governments, and simplify and streamline the current organisational tangle.

According to Elinor Ostrom, who won the Nobel prize for economics in 2009, to avoid a tragedy of the commons requires giving everyone entitled to use them a say in running them; setting clear boundaries to keep out those who are not entitled; appointing monitors who are trusted by users; and having straightforward mechanisms to resolve conflicts. At the moment, the governance of the high seas meets none of those criteria.

Changes to high-seas management would still do nothing for two of the worst problems, both caused on land: acidification and pollution. But they are the best and perhaps only hope of improving the condition of half of the Earth’s surface.

 

Why caste still matters in India

Why caste still matters in India

Feb 24th 2014, 23:50 by A.R. | DELHI

INDIA’S general election will take place before May. The front-runner to be the next prime minister is Narendra Modi of the Bharatiya Janata Party, currently chief minister of Gujarat. A former tea-seller, he has previously attacked leaders of the ruling Congress party as elitist, corrupt and out of touch. Now he is emphasizing his humble caste origins. In a speech in January he said “high caste” Congress leaders were scared of taking on a rival from “a backward caste”. If Mr Modi does win, he would be the first prime minister drawn from the “other backward classes”, or OBC, group. He is not the only politician to see electoral advantage in bringing up the subject: caste still matters enormously to most Indians. Read more of this post