Inside Buffett’s Brain; Math-minded researchers are attempting to distill the mind of the world’s greatest investor. Even if they fall short of replicating Warren Buffett’s craft—and they will—there are good lessons here about what it takes to beat

Inside Buffett’s Brain

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 Math-minded researchers are attempting to distill the mind of the world’s greatest investor. Even if they fall short of replicating Warren Buffett’s craft—and they will—there are good lessons here about what it takes to beat the market.

Warren Buffett isn’t merely a great investor. He’s also the great investor you think you can learn from, and maybe even copy (at least a little). Read more of this post

Watsons sells 25% stake to Singapore’s Temasek

Watsons sells 25% stake to Singapore’s Temasek

Staff Reporter

2014-06-04

Hong Kong business tycoon Li Ka-shing has sold a nearly 25% stake in Hutchison Whampoa’s personal care store chain Watsons to Temasek Holdings of Singapore for HK$44 billion (US$5.5 billion) after speculation arose that the retailer was planning to go public this year. Read more of this post

China Scrambling After “Discovering” Thousands Of Tons Of Rehypothecated Copper, Aluminum Missing

China Scrambling After “Discovering” Thousands Of Tons Of Rehypothecated Copper, Aluminum Missing

Tyler Durden on 06/04/2014 09:22 -0400

“Banks are worried about their exposure,” warns one warehousing source, “there is a scramble for people to head down there at the minute and make sure that their metal that they think is covered by a warehouse receipt actually exists.”

The rehypothecated catastrophe that we discussed in great detail here (copper financing)here (all commodities), and here (global contagion) appears to be gathering speed as the China’s northeastern port of Qingdao has halted shipments of aluminum and copper due to an investigation by authorities after they found “there is a discrepancy in metal that should be there and metal that is actually there.”

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Copper prices are tumbling already (despite Gartman’s most recent prognostication on Dr. Copper’s China recovery meme) as the world’s 7th largest port disallows any shipments until the probe is complete.

“It’s such a massive port I would think virtually everybody has exposure,” warned one analyst, adding that this will bebearish for metals as “a lot of Western banks will try to offload material and try not to deal with Chinese merchants.

Reuters reports,

China’s northeastern port of Qingdao has halted shipments of aluminium and copper due to an investigation by authorities, causing concern among bankers and trade houses financing the metals, trading and warehousing sources said on Monday. Port authorities could not immediately be reached for comment. China has a public holiday on Monday.

 

“We were told we can’t ship any material out while they do this investigation,” a source at a trading house said. The port of Qingdao is China’s third-largest foreign trade port and the world’s seventh-largest port, trading with 700 ports in more than 180 countries, according to its website (www.qdport.com/).

 

Banks are worried about their exposure,” one warehousing source in Singapore said.

 

There is a scramble for people to head down there at the minute and make sure that their metal that they think is covered by a warehouse receipt actually exists,” he said.

Metal imports have been partly driven in China as a means to raise finance, where traders can pledge metal as collateral to obtain better terms. In some cases the same shipment can be pledged to more than one bank, fuelling hot money inflows and spurring a clampdown by Chinese authorities.

It appears there is a discrepancy in metal that should be there and metal that is actually there,” said another source at a warehouse company with operations at the port.

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We hear the discrepancy is 80,000 tonnes of aluminium and 20,000 tonnes of copper, but we hear that the volumes will actually be higher. It’s either missing or it was never there – there have been triple issuing of documentation,” he said.

 

Beijing last year set new rules to curb currency speculation amid signs that hot money inflows helped push the yuan to a series of record highs. The rules required banks to tighten the management of their foreign exchange lending and types of clients that are able to access those loans.

 

“It’s such a massive port I would think virtually everybody has exposure,” the trading source said.

 

“Once the investigation is over, it could be bearish for metals. I think that a lot of Western banks will try to offload material and try not to deal with Chinese merchants,” the trading source added.

Critically – this is a major problem for any shadow-banking credit creation process as if the rehypothecated commodity-backed CCFDs are ultimately unwound, 1) someone will not get their collateral (payment problems – bailouts?), 2) less real collateral means less real credit expansion (which banks can;t fill because the firms that use this method of financing are anything but creditworthy), and 3) liquidation of any assets will proceed rapidly…

Goldman concludes that “an unwind of Chinese commodity financing deals would likely result in an increase in availability of physical inventory (physical selling), and an increase in futures buying (buying back the hedge) – thereby resulting in a lower physical price than futures price, as well as resulting in a lower overall price curve (or full carry).” In other words, it would send the price of the underlying commodity lower.

 

 

 

Finally, as we showed before when it comes to commodity financing deals, in terms of total notional value, both copper and aluminum pale by comparison to the one metal most used (by value) in China as a funding substitute: gold

As we commented previously:

When we previously contemplated what the end of funding deals (which the PBOC and the China Politburo seems rather set on) may mean for the price of other commodities, we agreed with Goldman that it would be certainly negative. And yet in the case of gold, it just may be that even if China were to dump its physical to some willing 3rd party buyer, its inevitable cover of futures “hedges”, i.e. buying gold in the paper market, may not only offset the physical selling, but send the price of gold back to levels seen at the end of 2012 when gold CCFDs really took off in earnest.

 

In other words, from a purely mechanistical standpoint, the unwind of China’s shadow banking system, while negative for all non-precious metals-based commodities, may be just the gift that all those patient gold (and silver) investors have been waiting for.  This of course, excludes the impact of what the bursting of the Chinese credit bubble would do to faith in the globalized, debt-driven status quo. Add that into the picture, and into the future demand for gold, and suddenly things get really exciting.

So if tens of thousands of tons of copper and aluminum are suddenly “missing”, one can assuredly say: “at least the gold is still there.” Right?

 

Why Having Too Many Choices Is Making You Unhappy

WHY HAVING TOO MANY CHOICES IS MAKING YOU UNHAPPY

MORE OPTIONS MEANS MORE POSSIBILITIES TO BE PERFECTLY CONTENT–RIGHT? HERE’S WHY DECISION FATIGUE IS SAPPING US OF HAPPINESS AND MAKING US REGRET THE CHOICES WE MAKE.

BY JANE PORTER

Amazon sells 1,161 kinds of toilet brushes. I know this because I recently spent an evening trying to choose one of them for the bathroom in my new apartment. Nearly an hour later, after having read countless contradictory reviews and pondering far too many choices, I felt grumpy and tired and simply gave up. The next day, I happily bought the only toilet brush the local dollar store offered. Read more of this post

To Celebrate Immigration, A Reminder About Who Built America

TO CELEBRATE IMMIGRATION, A REMINDER ABOUT WHO BUILT AMERICA

BY RAE ANN FERA

To mark Immigration Heritage Month, Welcome.US creates a message of unity, and a reminder that almost all Americans came from somewhere else.

Immigration reform is a hot-button topic, one that’s complicated, far-reaching and divisive. Unfortunately, the conversation about immigration often gets rendered down to a simplistic “us and them” continuum. But pulling back focus on the topic reminds us that almost all Americans are descended from immigrants; that in its early days, the country was built by the dreams and hard work of people who came from somewhere else. Read more of this post

Walmart’s ‘Made in USA’ push exposes strains of manufacturing rebirth

Walmart’s ‘Made in USA’ push exposes strains of manufacturing rebirth

1:23am EDT

By James B. Kelleher

(Reuters) – When Walmart pledged last year to buy an extra $250 billion in U.S.-made goods over the next decade, it appeared to be just what was needed to help move America’s putative manufacturing renaissance from rhetoric to reality.

But suppliers trying to reshore production as part of the initiative by the world’s largest retailer are running into practical problems as they try to restart long-idled corners of U.S. manufacturing. Read more of this post

China state media calls for ‘severe punishment’ for Google, Apple, U.S. tech firms

China state media calls for ‘severe punishment’ for Google, Apple, U.S. tech firms

2:03am EDT

BEIJING (Reuters) – Chinese state media lashed out at Google Inc, Apple Inc and other U.S. technology companies on Wednesday, calling on Beijing “to punish severely the pawns” of the U.S. government for monitoring China and stealing secrets.

U.S. companies such as Yahoo Inc, Cisco Systems Inc, Microsoft Corp and Facebook Inc threaten the cyber-security of China and its Internet users, said the People’s Daily on its microblog, in comments echoed on the front page of the English-language China Daily. Read more of this post

China’s best-selling spirit Baijiu seeks a foothold in the West

China’s best-selling spirit Baijiu seeks a foothold in the West

Tue, Jun 3 2014

By Leslie Gevirtz

NEW YORK (Reuters) – Just as Russia has its vodka, Mexico its tequila and Scotland its Scotch, China has its own distilled spirit, baijiu.

Baijiu is the world’s biggest-selling spirit category and represents a $23 billion market, according to research reports by McKinsey & Co and UBS. Read more of this post

It costs more to house the dead than the living in HK

It costs more to house the dead than the living in HK

Wednesday, June 4, 2014 – 17:18

Reuters

HONG KONG – There’s one thing even Hong Kong’s more than 40 billionaires will struggle to buy – a final resting place on their home turf. Read more of this post

Yogyakarta sultan refuses to take sides

Yogyakarta sultan refuses to take sides

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Wednesday, June 4, 2014 – 11:49

The Jakarta Post/Asia News Network

The Sultan and governor of Yogyakarta, Sri Sultan Hamengkubuwono X has insisted on his neutrality in the upcoming presidential election while hoping that if Joko “Jokowi” Widodo and Jusuf Kalla win the presidency they will use their power in the interests of the people. Read more of this post

India likely to ease restrictions for foreign online retailers next month

India likely to ease restrictions for foreign online retailers next month

7:38am EDT

By Nandita Bose and Rajesh Kumar Singh

MUMBAI/NEW DELHI (Reuters) – India could allow global online retailers such as Amazon.com Inc to sell their own products as early as next month, removing restrictions that could boost competition in one of the world’s biggest, and most price-sensitive, retail markets. Read more of this post

Open up about Tiananmen ; Chinese deserve a full accounting of the 1989 events

Open up about Tiananmen

By Tom Malinowski, Wednesday, June 4, 7:53 AM

Tom Malinowski is assistant secretary of state for democracy, human rights and labor.

Twenty-five years ago, it was possible to believe that the contest between democratic and authoritarian ideas of how societies should be organized was ending. East Germans breached their wall; Chileans voted to end the dictatorship of Augusto Pinochet; and on June 4, 1989, in Poland, Solidarity won the first round of Eastern Europe’s first free, post-Communist election. But June 4 was also the day Chinese troops put down student-led protests in Tiananmen Square, ending hopes that China would join the changes sweeping the world. Ballots and bullets competed to define the age. The contest of ideas continued. Read more of this post

Beijing’s anti-graft campaign touches China Central TV

Last updated: June 2, 2014 2:16 pm

Beijing’s anti-graft campaign touches China Central TV

By Charles Clover in Beijing

The man in charge of one of China’s most notorious television shows, aimed at naming and shaming corporate malpractice, has himself been targeted in a bribery investigation by prosecutors, China’s official news agency says.

The case focuses on the head of China Central TV’s advertising department, Guo Zhenxi, who is also in charge of the Consumer Day programme, a show that targets companies – particularly foreign ones – for poor service, shoddy goods and high prices to Chinese consumers. Read more of this post

Hong Kong’s West Kowloon Cultural District – and its real estate; What you can buy for HK$5m = Nothing. Prices in nearby Olympic start at about HK$7m

May 30, 2014 1:09 pm

Hong Kong’s West Kowloon Cultural District – and its real estate

By Josh Noble

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Were this an emerging arts hub in almost any other city, property prices would surely be soaring in anticipation

Hong Kong has long been known as a city of trade and finance, but rarely one of culture. Despite the slogan “Asia’s world city”, it remains sorely lacking in the theatres, museums and music venues such a label might suggest. Most artistic endeavours have been driven – or torpedoed – by commercial interests, thanks to exorbitant rents and a particularly cut-throat form of capitalism. The drab signage for the once-promised culture park – standing dusty and alone on the edge of barren wasteland – long seemed a symbol of faded ambition. Read more of this post

TV content is king, but growth is tricky; Broadcasters are betting that, by owning the rights to quality content, they will be able to hold on to viewers and revenues, despite competition from online platforms such as Netflix and Y

June 4, 2014 8:34 am

TV content is king, but growth is tricky

By Henry Mance

It was July 2007 when Silvio Berlusconi’s Mediaset group and others sealed the acquisition of Big Brother producer Endemol.

Even by pre-crisis standards, that deal – which valued the production company at €3.4bn, or about 15 times its earnings before interest, taxes, depreciation and amortisation – seems foolhardy. Read more of this post

Samsung Everland IPO adds to leadership transition talk

June 3, 2014 11:45 am

Samsung Everland IPO adds to leadership transition talk

By Song Jung-a and Simon Mundy in Seoul

The theme park operator at the heart of Samsung’s labyrinthine shareholding structure has announced plans to float, in what analysts called part of efforts to transfer power to the next generation of the South Korean group’s founding family.

“Through the IPO, we aim to strengthen management transparency in line with global standards,” said Samsung Everland on Tuesday, as it outlined plans for a public listing in the first quarter of next year. Read more of this post

Chipmaker MediaTek taps into connected home appliance market

June 3, 2014 2:02 pm

Chipmaker MediaTek taps into connected home appliance market

By Daniel Thomas, Telecoms Correspondent

Taiwanese chipmaker MediaTek plans to tap into the growing market for connected home appliances and wearable products with technology designed to help make devices for the so-called “internet of things”.

The company will make its first step into the market for connected home products, with components to support devices from connected fridges and TVs to cameras, smart bulbs, plugs and locks. Read more of this post

Schroders’ commodity hedge fund to shut

June 3, 2014 8:02 pm

Schroders’ commodity hedge fund to shut

By Gregory Meyer in New York

A prominent backer of commodities hedge funds is shutting down after investors frustrated by market doldrums and high management fees took their money elsewhere. Read more of this post

World Entrepreneur of the Year: the judging process

June 3, 2014 7:58 pm

Methodology and judging process

By Maria Pinelli

World Entrepreneur of the Year: the judging process

EY Entrepreneur of the Year (EOY) was founded in 1986. Since then it has expanded to 150 cities in 60 countries with awards presented each year to a thousand of the world’s leading entrepreneurs.

The awards are judged by entrepreneurs, including many former EOY winners. It is a celebration of entrepreneurial spirit and recognition for some of the world’s most inspiring entrepreneurs – whose innovation, new products, services and job creation are so critical to the health of the global economy. Read more of this post

Disruptive influences in class; US technologists believe they are on the brink of an educational revolution

June 3, 2014 3:44 pm

Disruptive influences in class

By Sarah Mishkin

As an engineer at Google, Max Ventilla built products used by millions every day. Now he wants to use the lessons he learnt there to revolutionise one of the few fields technology has yet to disrupt: primary school.

He and his team of technologists and teachers at the start-up, AltSchool, are trying out their theories on how to use modern tech to improve schools and encourage new ones, in a one-room schoolhouse tuck­ed away in San Francisco’s relatively unfashionable Dogpatch neighbourhood. Read more of this post

Should business people go to university? People who want to found and run companies should not feel obliged to study financial subjects

June 3, 2014 3:19 pm

Should business people go to university?

By Luke Johnson

People who want to found and run companies should not feel obliged to study financial subjects

Afriend and her 17-year-old daughter asked me for advice recently. The daughter wants to run a business, and isn’t sure if she should bother with university – and if she does, what subject should she study? Read more of this post

Legitimate business unlocks growth in Mexico; Spur has been big improvements in policy but also in governance

June 3, 2014 7:46 pm

Legitimate business unlocks growth

By Martin Wolf

Spur has been big improvements in policy but also in governance

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If Narendra Modi, India’s prime minister, seeks an example of a democratically elected leader embarked on radical reform, he could look to Enrique Peña Nieto. True, the latter is president of a far- smaller country, and a richer one – Mexico’s average standard of living is double India’s, although poor economic performance in recent decades has narrowed the gap substantially. The two countries’ leaders confront related challenges. Both need to generate market-oriented growth in economies that show a huge gulf between a high-productivity formal sector and a low-productivity informal one. Mr Peña Nieto has embarked on bold reforms. Is his the model to be followed? Read more of this post

Schools must enthuse the coders of tomorrow

June 3, 2014 4:41 pm

Schools must enthuse the coders of tomorrow

By Kenneth Baker

Gadgets make up global businesses yet schools barely teach practical skills, says Kenneth Baker

The most inventive period in our history was from 1700 to 1850, when the Industrial Revolution changed the economy of the world and made Britain, for a time, its richest country. Read more of this post

QE and the Tokyo stock market (part two, banks and others)

QE and the Tokyo stock market (part two, banks and others)

Andrew Smithers | Jun 03 08:30 | 1 comment | Share

In my last blog I emphasised the importance of foreign investors for the Tokyo stock market, but suggested that their future behaviour was either unpredictable or momentum based. If the latter assumption is correct, foreigners are likely to amplify rather than lead changes in the market’s direction and to assess its prospects we therefore need to look at the other participants.
Chart one (below) shows that Japanese banks have been rapidly reducing their holdings of government bonds. These have fallen from 20 per cent of total assets to 14 per cent. This has had a beneficial impact in that the risk that banks will suffer large losses when interest rates rise has been much reduced.

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Big banks rethink dealmaking strategies in Asia; Regulators and investors more interested in the here and now

June 3, 2014 12:02 pm

Big banks rethink dealmaking strategies in Asia

By Jennifer Hughes in Hong Kong

Regulators and investors more interested in the here and now

Matt Hanning piled out of his family car in a hurry and into Sydney’s Shangri-La hotel where he was greeted by Kuok Khoon Hong. The scion of Malaysia’s Kuok family and chief executive of Wilmar, the agribusiness group, was in town looking to buy Australia’s Goodman Fielder. Read more of this post

Samsung Everland IPO advances succession plan; Governance structure to change with profit made from listing

Samsung Everland IPO advances succession plan

Governance structure to change with profit made from listing  

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June 04,2014

Less than a month after Samsung SDS announced plans to go public this year, the de facto holding company of the country’s largest conglomerate released its initial public offering plan yesterday with a goal of completing the process by the first quarter of 2015.  Read more of this post

“How can he act as the leader of education when he is unwilling to teach his own flesh and blood?” Irony for “God of study” Koh Seung-duk who thinks he is the best man to be Seoul’s top education policymaker

Updated : 2014-06-04 01:18

Irony for “God of study”

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By Joel Lee

Koh Seung-duk, also known as the”God of Study,” is most famous forpassing state exams in law, diplomaticand administrative services whenyoung and writing self-help bookstouting his personal stock marketsuccess.
He also claimed to be the only livingperson to have law degrees fromHarvard, Columbia and Yale.  Read more of this post

Holography: Samsung’s next innovation engine

Updated : 2014-06-03 18:14

Holography: Samsung’s next innovation engine

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Holograms of singer Psy and dancers are screened at the Klive concert hall in Euljiro, Seoul, Jan. 16, which is capable of projecting holographic content.

The venue and the concert have been co-arranged by the Ministry of Science, ICT and Future Planning, KT and YG Entertainment Read more of this post

What really happened at Tiananmen?

What really happened at Tiananmen?

BY GREGORY CLARK

JUN 3, 2014

Over the years the “black information” people in the U.S. and U.K. governments have had some spectacular successes — the myth that the Vietnam War was due to Beijing using Hanoi as a puppet to head its advance into Asia, that Iraq harbored weapons of mass destruction, that Kosovar ethnic cleansing of Serbs in Kosovo was in fact Serbian ethnic cleansing of Kosovars, and now the claims that Moscow was responsible for the pro-Russian protesters in eastern Ukraine. But the greatest achievement of them all still has to be the myth of a June 4, 1989, Tiananmen Square massacre, with talk of hundreds if not thousands of protesting students mowed down by military machine guns. Read more of this post

To find the world’s only museum chronicling the brutal crackdown on the 1989 Tiananmen protests, look for the skinny office building wedged between a Tibetan-themed pub and a sports bar on the edge of a Hong Kong tourist district

The June 4th Museum offers images that are largely unknown inside China, such as the celebrated photograph of ‘Tank Man,’ the lone protester who defied a column of tanks. | AP

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ASIA PACIFIC / POLITICS & DIPLOMACY

Half of visitors to H.K. facility are mainland Chinese

Tiananmen museum keeps memories alive

AP

JUN 3, 2014

HONG KONG – To find the world’s only museum chronicling the brutal crackdown on the 1989 Tiananmen protests, look for the skinny office building wedged between a Tibetan-themed pub and a sports bar on the edge of a Hong Kong tourist district — and take the elevator to its tiny fifth floor. Read more of this post

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