China’s official figures both understate and overstate inflation

China’s official figures both understate and overstate inflation

Mar 15th 2014 | HONG KONG | From the print edition

IS CHINA’S economy underheating? Not long ago, many people would have scoffed at the suggestion. The country is known for searing property prices, hot-money inflows and the steam escaping from its financial furnaces. The stock of outstanding credit, broadly defined, climbed to over 180% of GDP at the end of 2013, according to the central bank, and over 215%, according to an even broader measure by Fitch, a ratings agency. Read more of this post

Japan’s pension giant: Risk on; The world’s largest pension fund is changing the way it invests, with big consequences for the market

Japan’s pension giant: Risk on; The world’s largest pension fund is changing the way it invests, with big consequences for the market

Mar 15th 2014 | TOKYO | From the print edition

WHEN George Soros, a billionaire investor, met Shinzo Abe, the prime minister of Japan, at Davos in January, he hectored him about asset management. Japan’s massive public pension fund needed to take more risk, he reportedly told Mr Abe. With ¥128.6 trillion ($1.25 trillion) of assets, the Government Pension Investment Fund (GPIF) is the world’s biggest public-sector investor, outgunning both foreign rivals and Arab sovereign-wealth funds. Yet its mountain of money is run by risk-averse bureaucrats using an investment strategy not much more adventurous than stuffing bundles of yen under a futon. It keeps around two-thirds of assets in bonds, mostly of the local variety. Like an investing novice, it mostly follows indices passively, and hardly ventures abroad. Read more of this post

Are credit markets getting frothy again?

Are credit markets getting frothy again?

Mar 15th 2014 | From the print edition

SETH KLARMAN, who runs Baupost Group, a big hedge fund, is worried. In his latest letter to investors, he writes that “a sceptic would have to be blind not to see bubbles inflating in junk-bond issuance, credit quality and yields.” Recalling the credit boom, he adds that “here we are again, mired in a euphoric environment in which some securities have risen in price beyond all reason…and where caution seems radical and risk-taking the prudent course.” Read more of this post

Brazil’s presidential election: Winning hearts and likes; Social media will play a big part in this year’s campaign

Brazil’s presidential election: Winning hearts and likes; Social media will play a big part in this year’s campaign

Mar 15th 2014 | SÃO PAULO | From the print edition

IN JUNE Brazil’s elites received a rude introduction to the power of social media. Protests, many convened via Facebook, saw millions take to the streets to air disaffection with politicians. Those same politicians now want to harness social networks for their election campaigns. Read more of this post

Dallying with a monster: In failing to snuff out vigilantism, Mexico is running big risks

Dallying with a monster: In failing to snuff out vigilantism, Mexico is running big risks

Mar 15th 2014 | From the print edition

THE rule of law has long been a stranger to the sweltering lowlands known as the Tierra Caliente in the Mexican state of Michoacán. The site of battles over land in the 1940s and 1950s, the area suffered an exodus of migrant workers to California. In the 1970s the drug trade took root there, attracted by the proximity of the port of Lázaro Cárdenas and the remoteness of the federal government in Mexico City. Not content with trafficking methamphetamines, the latest mafia to lord it over the Tierra Caliente, the whimsically named “Knights Templar”, established a tight grip over its invertebrate society, co-opting local authorities, extorting protection money and raping women. Read more of this post

Egypt’s tourism firms: It’s murder on the Nile

Egypt’s tourism firms: It’s murder on the Nile

Mar 14th 2014, 11:08 by A. F. | CAIRO

KARIM EL SHARKAWY, the boss of Tarot Tours Garranah, one of Egypt’s biggest tourism operators, clocks in every morning at the firm’s offices in Cairo, and expects his staff to do the same. Strict timekeeping is a new experience for his employees. But the company, like its rivals, is having to do all it can to contain costs as it suffers a fierce downturn with no end in sight. Read more of this post

Fighting corruption in India: A bad boom; Graft in India is damaging the economy. The country needs to get serious about dealing with it

Fighting corruption in India: A bad boom; Graft in India is damaging the economy. The country needs to get serious about dealing with it

Mar 15th 2014 | From the print edition

IN THE early hours of February 20th 2010 Uday Vir Singh, an Indian forestry officer, bluffed his way past a private militia guarding a dusty port called Belekeri. For months suspicious-looking convoys of trucks had been thundering across India to the port’s quays on the country’s west coast, just south of the Goan beach where the super-spy mayhem which opened “The Bourne Supremacy” was filmed. Read more of this post

WARREN BUFFETT: ‘Stay Away From Bitcoin. It’s A Mirage’

WARREN BUFFETT: ‘Stay Away From Bitcoin. It’s A Mirage’

ROB WILE MARKETS  MAR. 14, 2014, 8:33 PM

On CNBC just now, Warren Buffett said the following when asked of Bitcoin’s potential.

The FTC has opened an investigation into Herbalife [Update]

The FTC has opened an investigation into Herbalife [Update]

Dan McCrum

| Mar 12 17:31 | Comment | Share

Part of the LIVING THE HERBALIFE SERIES

After we got in touch with the company to tell them we were writing this story, they halted trading and put out a statement confirming the investigation.

The Federal Trade Commission has opened a formal investigation into Herbalife, the multi-level marketing company that hedge fund manager Bill Ackman has called a pyramid scheme, according to people familiar with the situation. Read more of this post

Is the value premium a liquidity premium?

Friday, March 7, 2014

Is the value premium a liquidity premium?

JP Koning

Is the value premium a liquidity premium?

The “High minus low” strategy: Source

If you haven’t read Clifford Asness and John Liew’s recent article on market efficiency, you should. There’s plenty of meat in the article, but the one sinew I want to chew on is this above chart.  It shows the cumulative returns to a strategy called HML, or “high-minus-low.”  Read more of this post

Regulators Size Up Wall Street, With Worry; “It is not going to work if we approach it from a lawyerly standpoint. It is more like a priest-penitent relationship.”

MARCH 12, 2014, 8:51 PM  56 Comments

Regulators Size Up Wall Street, With Worry

By PETER EAVIS

Money laundering, market rigging, tax dodging, selling faulty financial products, trampling homeowner rights and rampant risk-taking — these are some of the sins that big banks have committed in recent years. Read more of this post

Sudden collapse of iron ore price casts shadow on Australian economic prospect

Sudden collapse of iron ore price casts shadow on Australian economic prospect

by Jeremy Zhao

CANBERRA, March 15 (Xinhua) — The Australian Bureau of Statistics (ABS) on Thursday posted the biggest monthly full-time payroll surge since 1991. Although the jobless rate held still at 6 percent, the number of full-time jobs increased by 80,500 across the country in February. This is surprisingly good data, showing that the economy is recovering and the central bank’s low interest policy has worked. Read more of this post

Is being in Asia a disadvantage for startups?

Is being in Asia a disadvantage for startups?

By J. Angelo Racoma

In some cases, it could be, although OnlinePianist CEO Nimrod Cohen advises entrepreneurs to find their strengths

Is being in Asia a disadvantage for startups? This particular argument has been raised time and again. While there are opportunities specific to the region (or any other region for that matter) that would be ripe for the picking for entrepreneurs, there are simply some industries that can prove difficult to crack. Read more of this post