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.

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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

‘Earth is Gold’: Graft Probe Turns Eyes to Turkey Building Boom

‘Earth is Gold’: Graft Probe Turns Eyes to Turkey Building Boom

By Nick Tattersall on 12:00 pm January 14, 2014.
Istanbul. Look closely on a clear day, and the silhouette of Istanbul’s historic peninsula, its minarets puncturing the sky, has changed for the first time in centuries.

Three luxury towers, their top-floor apartments selling for upwards of a million dollars apiece, loom on the horizon, graceless symbols of Turkey’s rapid modernization during a decade of Prime Minister Tayyip Erdogan’s rule. Read more of this post

Wave of China IPO suspensions in setback for reforms

Wave of China IPO suspensions in setback for reforms

12:27am EST

By Pete Sweeney and Lu Jianxin

SHANGHAI (Reuters) – Five Chinese companies said on Monday they were postponing initial public offerings (IPOs), in a blow to Beijing’s reformist drive to give market forces a “decisive” role in the country’s stock exchanges. Read more of this post

The death of China Railway Group’s president left his successor an escalating challenge: collecting on unpaid construction-work bills in an industry plagued by record debt as borrowing costs surge

President Death Leaves Heir Overdue Rail Payments: China Credit

The death of China Railway Group Ltd. (390)’s president left his successor an escalating challenge: collecting on unpaid construction-work bills in an industry plagued by record debt as borrowing costs surge. Read more of this post

Rising rates will help cure China’s credit addiction; The government must act before the bubble bursts

January 12, 2014 3:08 pm

Rising rates will help cure China’s credit addiction

By Joe Zhang

The government must act before the bubble bursts, writes Joe Zhang

In June and December last year, China’s interbank interest rates jumped from their normal level of about 3 per cent to peak as high as 9 per cent a year. The shockwaves did not stop there. Banks scrambled for deposits and pushed up interest rates on their wealth management products. Funding costs in the vast shadow banking sector also moved up, while stocks and bonds suffered falls. Read more of this post

New frontiers: The fate of China’s economic reforms will be determined locally. Our first article looks at a wealthy city near the coast; our second, at a poorer one inland

New frontiers: The fate of China’s economic reforms will be determined locally. Our first article looks at a wealthy city near the coast; our second, at a poorer one inland.

Jan 11th 2014 | FOSHAN | From the print edition

THE furniture market in Foshan claims to be the biggest in the world. It boasts a bewildering mix of things to sit on, sleep in and eat at. One shop, named the “Louvre”, offers a range of styles from neoclassical to postmodern, which an assistant defines as a cross between European and modern, suitable for “successful people”. Read more of this post

China’s peer-to-peer lending boom is beginning to turn to bust. Dozens of the P2P lending websites that sprang up in recent years have shut as borrowers default on loans

Last updated: January 12, 2014 3:48 pm

Reversal of fortune in China’s peer-to-peer lending boom

By Simon Rabinovitch in Shanghai

China’s peer-to-peer lending boom is beginning to turn to bust. Dozens of the P2P lending websites that sprang up in recent years have shut as borrowers default on loans. The biggest companies are unscathed so far, but the rapid collapse of smaller rivals highlights the mounting difficulties in the Chinese micro-lending industry as economic growth slows and monetary conditions tighten. Read more of this post

China’s biggest drug distributor says two former executives are the target of a corruption investigation, widening a graft probe that has focused on foreign pharmaceutical makers

Chinese drug company targeted in corruption case

By Associated Press, Updated: Monday, January 13, 1:08 PM

BEIJING — China’s biggest drug distributor says two former executives are the target of a corruption investigation, widening a graft probe that has focused on foreign pharmaceutical makers. Read more of this post

A year-long sales crisis for Yum Brands in China is testing the ingenuity and determination that helped Sam Su build KFC into one of the most successful foreign brands in the world’s most populous market

KFC’s Crisis in China Tests Ingenuity of Man Who Built Brand

Sam Su, Vice Chairman of Yum Brands, Working to Win Back Confidence in Asia

JULIE JARGON and LAURIE BURKITT

Jan. 12, 2014 8:00 p.m. ET

Sam Su, vice chairman of Yum Brands, spoke in New York in December. Andrew Spear for The Wall Street Journal

Sam Su for years ran one of the highest-flying foreign business operations in China. These days, he’s trying to pull it out of a tailspin. As China head for Yum Brands Inc. YUM -0.04% for the past 16 years, Mr. Su built its KFC arm into the biggest foreign restaurant chain—and one of the most successful foreign brands—in the world’s most populous market. Yum has more than 6,000 restaurants in China, including Pizza Huts and other, smaller brands—about three times as many as rival McDonald’s Corp. Read more of this post

Many Asian democracies have fallen prey to abuses of power and privilege

January 12, 2014 9:35 am

Fears for Bangladeshi democracy rumble across region

By Victor Mallet

Many Asian democracies have fallen prey to abuses of power and privilege

Democracy in Bangladesh might not be as dead as Khaleda Zia, the country’s opposition leader, would have the world believe, but the pseudo-election just staged there certainly suggests it is gravely ill. Read more of this post

Asia Firms Go Abroad on Hong Kong to Singapore Curbs: Mortgages

Asia Firms Go Abroad on Hong Kong to Singapore Curbs: Mortgages

Developers in Singapore and Hong Kong, cities which last year implemented some of their most-restrictive curbs to rein in residential property prices, are shifting focus to the U.S., China and the U.K. as demand is stifled at home. Read more of this post

Indonesia Bans Ore Exports in Compromise Push for Smelting

Indonesia Bans Ore Exports in Compromise Push for Smelting

Indonesia’s ban on mineral ore exports will cut global nickel supplies while allowing Freeport-McMoRan Copper & Gold Inc. (FCX) to keep exporting copper concentrates. Nickel climbed to the highest level in two weeks. Read more of this post

Park Extols Korea Bonanza With a North-South Unification

Park Extols Korea Bonanza With a North-South Unification

President Park Geun Hye, who became South Korea’s first woman leader by promising a more “creative economy,” begins her second year vowing to pursue the unprecedented prosperity she said will result from unification with North Korea amid flagging interest from many citizens more than six decades after the peninsula’s war. Read more of this post

The combined operating profit of Samsung Group and Hyundai Motor Group took up over 30 percent of all South Korean companies’ operating profit for the first time

Samsung, Hyundai Motor operating profit portion tops 30% for first time

2014.01.13 15:06:27

The combined operating profit of Samsung Group and Hyundai Motor Group took up over 30 percent of all South Korean companies’ operating profit for the first time. This raises a concern that the Korean economy’s heavy reliance on the two conglomerates would increase instability in the financial market and real economy when the country is hit by a crisis.  Read more of this post

Singapore Exports Recovery Seen Limited as Worker Shortage Bites

Singapore Exports Recovery Seen Limited as Worker Shortage Bites

Alcotec Precision Engineering Pte. owner Colin Kua turned down nearly a third of his customers’ orders last year as he grappled with Singapore’s labor shortage. This year may be tougher. Read more of this post

Barter in Myanmar

Barter in Myanmar

By Jamil Maidan Flores

 on 9:55 am January 13, 2014.
Aung San Suu Kyi may become president of Myanmar after all. It’s still a struggle, but in recent days the odds have improved in her favor. The national clamor has gotten louder that the constitutional provision strongly barring her from seeking the presidency be abrogated. Read more of this post

When Does A Bubble Spell Trouble?

Jan 10, 2014

When Does A Bubble Spell Trouble?

JASON ZWEIG

The minutes of the latest Federal Reserve policy meeting, released this past week, show that central bankers have been worrying that the financial markets might turn into a bubble — the term for a perilously overvalued situation that can burst without warning or mercy. Read more of this post

What You Know About Retirement Investing Is Wrong; Invest less in stocks early in retirement and more later, a study recommends

What You Know About Retirement Investing Is Wrong

Invest less in stocks early in retirement and more later, a study recommends

ANNE TERGESEN

Updated Jan. 12, 2014 4:48 p.m. ET

You probably know the conventional wisdom: People just entering retirement should have a big portion of their savings—say, 40% to 60%—invested in stocks to help their nest egg grow over time. And as they age, all but the wealthiest should gradually reduce their equity exposure to protect against 2008-style market declines. Read more of this post

US dollar era could end: Nobel laureate Thomas Sargent

US dollar era could end: Nobel laureate Thomas Sargent

Staff Reporter

2014-01-13

Nobel Prize laureate Thomas Sargent says the era of the US dollar as the world’s largest trade currency could come to an end, China Entrepreneur magazine reports. Sargent, who won the Nobel Prize in Economics in 2011, made the comments in an interview during a recent visit to China. Read more of this post

Stocks Losing Allure With Highest Valuation to Bonds Since 2011

Stocks Losing Allure With Highest Valuation to Bonds Since 2011

Rising Treasury yields and the biggest equity market rally in 16 years are leading one measure of stock valuations to the most bearish level since 2011. Profits as a percentage of Standard & Poor’s 500 Index’s price, known as earnings yield, totaled 5.76 percent last week, compared with the 2.86 percent payout on 10-year Treasuries, according to data compiled by Bloomberg. At 2.9 percentage points, the gap, which narrows as equities get more expensive relative to debt, is the smallest since March 2011. Read more of this post

Stock-Picking Hedge Funds Win in 2013

Stock-Picking Hedge Funds Win in 2013

ROB COPELAND

Jan. 12, 2014 4:32 p.m. ET

In a lackluster year for many hedge funds, the standouts piled into stocks early and pressed their bets as markets climbed. Many funds with outsize returns achieved the results less by employing sophisticated strategies or using leverage to magnify bets than by simply picking the right stocks. Read more of this post