Morning Bamboo Insight: 02/07/2014
July 2, 2014 Leave a comment
Daily Bamboo Insight
Macro
1. ECB Must Embrace Role as Zombie Killer; Low Interest Rates Encourage Banks to Paper Over Unrecognized Losses, Says the Bank for International Settlements
2. In a recent paper titled “Banks As Secret Keepers,” four economists argue that banks are necessarily opaque institutions, concealing their portfolios and concentrating on hard-to-value assets
3. With Markets at Peaks, Some Say Air Feels Thin; Global Junk-Bond Sales Hit a High in the First Half, but Some Investors Are Wary: ‘This Is a Time for Caution’
http://online.wsj.com/articles/with-debt-yields-low-firms-dash-for-cash-1404158180
http://online.wsj.com/articles/with-markets-at-peaks-some-say-air-feels-thin-1404167926
4. Where in the World is the Kuwait Investment Authority? On the trail of the world’s oldest-and most elusive-sovereign wealth fund.
http://ai-cio.com/print.aspx?id=2147489062
Asia Pacific
1. Steer Clear of China’s Aluminum Crush
2. India’s Auditor Suggests Canceling Reliance Jio’s Licenses; Government Report Cites Irregularities in How the Company Acquired the Licenses
http://online.wsj.com/articles/india-auditor-suggests-revoking-some-reliance-jio-licenses-1404143573
3. Thailand’s Divided Military; Gen. Prem Tinsulanonda’s arch-royalist faction may control the top posts, but most soldiers support former Prime Minister Thaksin
http://online.wsj.com/articles/thailands-divided-military-1404148174
4. Kathmandu founder Jan Cameron’s retail empire collapses again; Cameron’s private company DSG, which operates more than 140 Crazy Clarks and Sams Warehouse discount variety stores, has gone into receivership
http://www.brw.com.au/p/entrepreneurs/kathmandu_founder_jan_cameron_retail_1kxvqwwnSFwwta84vYXvMO
5. Modi pitches India’s frugal space prowess at rocket launch
6. Macau gambling revenue sees first decline in over 4 years
7. Australia’s dependence on China commodity appetite increases
8. China general’s ousting tightens Xi’s grip on military; “One of the things that Deng commanded was, ‘We either get the PLA out of business, or you get out of the PLA’,” he said of the order to businessman officers
http://www.channelnewsasia.com/news/asiapacific/china-general-s-ousting/1226340.html#
9. 600,000 Chinese Die Each Year From Working Too Hard
http://www.zerohedge.com/news/2014-06-30/600000-chinese-die-each-year-working-too-hard
10. What Psy’s ‘Hangover’ Doesn’t Say About Korea’s Drinking Culture
Life
1. World Cup: Jurgen Klinsmann’s Yoda; Menotti’s central belief is that the key to victory isn’t defensive organization or keeping hold of the ball, but trying to score as many goals inside 90 minutes as humanly possible
http://online.wsj.com/articles/world-cup-jurgen-klinsmanns-yoda-1404165139
2. The Evolution of Trust; The evolution to more frugal, deinstitutionalized living that has created the sharing economy may also lead to less involvement of government in everyday life
TMT
1. Tencent’s Online Shopping Doesn’t Come Cheap; Company Spends $736 Million for 20% of 58.com
2. When Big Data Isn’t an Option; Companies that only have access to “little data” can still use that information to improve their business
3. The Incredible Shrinking Tech Spending Projections
4. With Software Eating Hardware, Silicon Valley Enters “Hard” Times
http://techcrunch.com/2014/06/30/with-software-eating-hardware-silicon-valley-enters-hard-times/
Health
1. New Weapon in Fight Against ‘Superbugs’; A soil sample from a national park in eastern Canada has produced a compound that appears to reverse antibiotic resistance in dangerous bacteria
Consumer
1. Grocery manufacturers are struggling to adapt to the online world and need to invest in smarter packaging, presentation and supply chains to reap the long term benefits
2. “When Esprit went public in 1998 they said ‘we want to buy your business and fold it into Esprit’; “When multinational companies buy small privately-owned entrepreneurial businesses they often lose their soul”
3. Nestlé U.S. Chief Looks for Brands to Fix or Toss; Number of Product Variations Is Slashed, Lean Cuisine Gets a Makeover
http://online.wsj.com/articles/nestle-u-s-chief-looks-for-brands-to-fix-or-toss-1404172061
Investing Process
1. Banks as Secret Keepers
Columbia Business School – Finance and Economics
Yale School of Management; National Bureau of Economic Research (NBER)
Massachusetts Institute of Technology (MIT) – Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)
University of Pennsylvania – Department of Economics; National Bureau of Economic Research (NBER) June 2014 NBER Working Paper No. w20255
Abstract: Banks are optimally opaque institutions. They produce debt for use as a transaction medium (bank money), which requires that information about the backing assets – loans – not be revealed, so that bank money does not fluctuate in value, reducing the efficiency of trade. This need for opacity conflicts with the production of information about investment projects, needed for allocative efficiency. Intermediaries exist to hide such information, so banks select portfolios of information-insensitive assets. For the economy as a whole, firms endogenously separate into bank finance and capital market/stock market finance depending on the cost of producing information about their projects.
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