With a single bill, Israel is looking to revamp its economy and hopefully reduce income inequality, showing that a democracy can achieve change

JANUARY 7, 2014, 4:54 PM

Overhaul of Israel’s Economy Offers Lessons for United States

By STEVEN DAVIDOFF

Americans may talk about income inequality, but Israel has done something about it. The Israeli parliament, the Knesset, has voted to break up the country’s corporate conglomerates. The move followed mass protests in 2011 over the concentration of wealth in Israel. 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

Watch out for investment banana skins in 2014

January 10, 2014 7:16 pm

Watch out for investment banana skins in 2014

By Jonathan Eley

FT Money this week held another investor round table, bringing strategists and managers of retail and institutional money together with some of the newspaper’s own well-known columnists. What follows is an edited transcript of the discussion, which took place on Thursday. Read more of this post

Wall St. Shock: Take a Day Off, Even a Sunday

JANUARY 10, 2014, 9:45 PM

Wall St. Shock: Take a Day Off, Even a Sunday

By WILLIAM ALDEN and SYDNEY EMBER

For the ambitious college graduates who flock to Wall Street, working into the wee hours or even pulling all-nighters is an unwritten expectation of the job. Spending both Saturdays and Sundays at the office is the norm. Read more of this post

The Vicious Circle of Income Inequality

The Vicious Circle of Income Inequality

JAN. 11, 2014

By ROBERT H. FRANK

Almost every culture has some variation on the saying, “rags to rags in three generations.” Whether it’s “clogs to clogs” or “rice paddy to rice paddy,” the message is essentially the same: Starting with nothing, the first generation builds a successful enterprise, which its profligate offspring then manage poorly, so that by the time the grandchildren take over, little value remains. Read more of this post

The Edifice Complex Driving Turkey’s Scandal

The Edifice Complex Driving Turkey’s Scandal

By Mehul Srivastava and Benjamin Harvey January 09, 2014

An hour’s drive north of Istanbul, two giant concrete towers flank the Bosporus, one in Asia, the other in Europe. By 2015 a $2.5 billion suspension bridge will hang between the towers, which will reach 322 meters (1,056 feet). Nearby, a Manhattan-size swath of forest is being readied for a $14 billion airport, one of the world’s largest. Read more of this post

The economic soothsayers possess no crystal ball; There are not many easily falsifiable theories in macroeconomics, so some prefer the micro side

January 9, 2014 4:40 pm

The economic soothsayers possess no crystal ball

By Samuel Brittan

There are not many easily falsifiable theories in macroeconomics, so some prefer the micro side

It is with some relief that I find my normal column date falls outside the season for new year forecasts. These are either banal or inspired guesses. The advocates of economic soothsaying tend to say that all life involves forecasts – for example, that the ground will not crumble under your feet when you step outside the door. But that is not really the point at issue. What is under discussion is whether theworld economy, or any particular economy, will continue to recover at recent moderate growth rates, fizzle out or soar to unsustainable proportions. My guess (not, I stress, my forecast) is that it will continue to recover, but that the risk of excessive expansion will occur in 2015, which – not entirely a coincidence – is election year in the UK and the run-up to a presidential election year in the US. Read more of this post

The Bitcoin-Mining Arms Race Heats Up

The Bitcoin-Mining Arms Race Heats Up

By Ashlee Vance and Brad Stone January 09, 2014

Joel Flickinger’s two-bedroom home in the hills above Oakland, Calif., hums with custom-built computing gear. Just inside the front door, in a room anyone else might use as a den, he’s placed a desk next to a fireplace that supports a massive monitor, with cables snaking right and left toward two computers, each about the size of a case of beer. Flickinger has spent more than $20,000 on these rigs and on a slower model that runs from the basement. They operate continuously, cranking out enough heat to warm the house and racking up $400 a month in electric bills. There isn’t much by way of décor, other than handwritten inspirational Post-it notes:
“I make money easily,” one reads.  Read more of this post

Ten reasons why gold bugs lost their shirts

Ten reasons why gold bugs lost their shirts

January 9, 2014

If it looks like a bubble … the gold price over the past 30 years. It has been quite the ride for gold: from under $USUS500 an ounce a decade ago, to above $USUS1900 in 2011, gold gained more than 400 per cent. Read more of this post

Swiss Fear Immigration as German Influx Stokes Anxiety

Swiss Fear Immigration as German Influx Stokes Anxiety

When seeing a doctor, ballet dancer Iris Inderbitzin wants to be able to speak her local dialect. With more than 284,000 Germans living in Switzerland, that at times can be a challenge. Read more of this post

State-owned assets: Setting out the store; Advanced countries have been slow to sell or make better use of their assets. They are missing a big opportunity

State-owned assets: Setting out the store; Advanced countries have been slow to sell or make better use of their assets. They are missing a big opportunity

Jan 11th 2014 | NEW YORK | From the print edition

THE past quarter of a century has seen several bursts of selling by the world’s governments, mostly but not always in benign market conditions. Those in the OECD, a rich-country club, divested plenty of stuff in the 20 years before the global financial crisis. The first privatisation wave, which built up from the mid-1980s and peaked in 2000, was largely European. The drive to cut state intervention under Margaret Thatcher in Britain soon spread to the continent. The movement gathered pace after 1991, when eastern Europe put thousands of rusting state-owned enterprises (SOEs) on the block. A second wave came in the mid-2000s, as European economies sought to cash in on buoyant markets. Read more of this post

Richest Danes Face Benefit Cuts as Universal Welfare Abandoned

Richest Danes Face Benefit Cuts as Universal Welfare Abandoned

Denmark’s richest citizens are finding themselves cut off from some welfare benefits as Scandinavia’s weakest nation reviews state-paid services once considered a universal right. Read more of this post

“The demand for marijuana is insatiable”; Pot Shares Rally 21% to 1,700% as Speculators See Green

Pot Shares Rally 21% to 1,700% as Speculators See Green

They’ve got high hopes.

Bruce Perlowin, the chief executive officer of Hemp Inc. (HEMP) who has seen his stock soar 205 percent to 8 cents in the last three days, says investors are suddenly bidding up marijuana companies because they want to find “the next Microsoft.” Robert Frichtel, his Advanced Cannabis Solutions Inc. up 144 percent after posting $455 in sales last quarter, said “euphoria” is driving gains that in some cases top 1,700 percent. Read more of this post

Overstock’s First Day Of Bitcoin: $130,000 Sales, 840 Transactions, CEO “Stunned”

Overstock’s First Day Of Bitcoin: $130,000 Sales, 840 Transactions, CEO “Stunned”

Tyler Durden on 01/11/2014 15:56 -0500

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

Upon the conclusion of the Senate hearing on Bitcoin this past November, I tweeted that I thought we had entered Phase 2 of the Bitcoin story. A month later, following news that Andreessen Horowitz had led an venture capital investment of $25 million in Coinbase, I wrote: Read more of this post

No Barbarians at the Gate; Instead, a Force for Change; It’s no longer an insult to be called an activist investor

JANUARY 6, 2014, 6:42 PM

No Barbarians at the Gate; Instead, a Force for Change

By ALEXANDRA STEVENSON

It’s no longer an insult to be called an activist investor.

Once painted as greedy corporate raiders, they would amass large stakes in a company and, through brute force, push for changes in the company’s leadership and business practices. They reveled in their image of attacking the fortress of corporate America. Now, some three decades later, their efforts have become more sophisticated and they are often seen as a good thing, shaking up companies too entrenched in their ways. Read more of this post

Merton’s message: give up on alpha. Instead the focus should be on goals-based investing

Merton’s message: give up on alpha

Posted By AMANDA WHITE On 18/12/2013 @ 9:37 pm In IN CONVERSATION | No Comments

Nobel Prize winner, Robert Merton, has thrown down the gauntlet. He claims that by focusing on a retirement income goal he can beat any competitor that is managing a 70:30 portfolio that has wealth accumulation as the goal. Do you dare take him on?

The defined contribution pension management industry has it wrong, according to Professor Robert Merton. “There is so much competition over getting alpha, but everyone has access to the same hedge funds. Give up! That’s not what is important,” Merton says. Read more of this post

Manchester United: Profits before goals; Recent setbacks for one of the world’s most famous football clubs reflect the owners’ approach

January 10, 2014 7:08 pm

Manchester United: Profits before goals

By Simon Kuper and Roger Blitz

Recent setbacks for one of the world’s most famous football clubs reflect the owners’ approach

With a warning that his results “have not lived up to our standards”, the Glazer family lost patience and fired their club’s coach. Read more of this post

Madonna Addicted to Sweat Dance Plugs Toronto Condos: Mortgages

Madonna Addicted to Sweat Dance Plugs Toronto Condos: Mortgages

Who better to promote Toronto’s slumping condo market than the Material Girl.

Madonna, whose 2012 tour was the top-grossing act of the year worldwide with $296.1 million in revenue, will lead an “Addicted to Sweat” dance class next month at her Hard Candy Fitness studio inside Aura, a new 78-story condo tower in Toronto. The luxury development will also feature a sculpture-studded public gallery, a marble-lined lobby and a five-bedroom penthouse priced at C$18.4 million ($17 million). Read more of this post

Lansdowne Rides Airline Bet to Top Europe Hedge-Fund List

Lansdowne Rides Airline Bet to Top Europe Hedge-Fund List

On Oct. 11, the U.K. government sold a majority stake in Royal Mail Plc, the British postal service, in an initial public offering. Interest from both retail and institutional investors was strong. When the trading frenzy died down, two names emerged with large positions: Lansdowne Partners Ltd. and The Children’s Investment Fund Management UK LLP. Read more of this post

Is Keeping It Simple for Banks Stupid?

Is Keeping It Simple for Banks Stupid?

Regulators rightly want to remedy a serious flaw in the financial system: The complexity of bank capital requirements has made them vulnerable to manipulation. In the rush to embrace simplicity, however, policy makers could inadvertently make safe investments unattractive for banks. Read more of this post

Ireland’s Rebound Is European Blarney; Once the Celtic Tiger, the Irish economy has been severely chastened by austerity

Ireland’s Rebound Is European Blarney

By FINTAN O’TOOLEJAN. 10, 2014

DUBLIN — I was talking just before Christmas to a young man who sells shoes in a department store in Dublin. He told me that a television news crew had filmed interviews in the store the previous day. They wanted to know if sales were picking up during the vital holiday period, indicating that the battered Irish economy was, after five grim years, on the rise at last. Read more of this post

In the Second Machine Age, it’s all about getting smarter, faster

If I Had a Hammer

JAN. 11, 2014

Thomas L. Friedman

MY favorite story in Erik Brynjolfsson and Andrew McAfee’s fascinating new book, “The Second Machine Age,” is when the Dutch chess grandmaster Jan Hein Donner was asked how he’d prepare for a chess match against a computer, like I.B.M.’s Deep Blue. Donner replied: “I would bring a hammer.” Read more of this post

Ignore Wall Street Is Skagen’s Advice With Emerging Markets Bet

Ignore Wall Street Is Skagen’s Advice With Emerging Markets Bet

Skagen AS, a Norway-based investor that has outperformed funds run by Goldman (GERIX) Sachs Group Inc. and JPMorgan Chase & Co. (JPM) over the past decade, is telling clients to ignore Wall Street’s biggest banks and buy emerging markets. Read more of this post

How to tax and regulate marijuana

How to tax and regulate marijuana

Jan 11th 2014 | From the print edition

THEY came to Denver, the mile-high city, to get high. They shivered in the cold as they waited for the first legal recreational marijuana (cannabis) shops in Colorado to open on January 1st. It is too early to judge whether the experiment is working, but the early signs are good (see article). The first American state to allow toking-for-fun has not been seized by reefer madness. Its pot shops are more orderly than, say, a British pub at closing time. One report claimed that 37 Coloradans died of marijuana overdoses on the first day of legalisation, but it was in the Daily Currant, a spoof newspaper. Few readers were fooled: one reason why Americans keep voting to relax marijuana laws is that they have mostly come round to the view that dope is less hazardous than booze. Read more of this post

Half of US Congress Are Millionaires: Study

Half of US Congress Are Millionaires: Study

By Agence France-Presse on 12:33 pm January 11, 2014.
Washington. For the first time ever, half of US Congressmen, both Democrats and Republicans, are millionaires, according to figures from a group that examines the influence of money on politics. Read more of this post

Germany grapples with rush of immigrants from Bulgaria, Romania

Germany grapples with rush of immigrants from Bulgaria, Romania

AFP-JIJI

JAN 5, 2014

BERLIN – Germany, Europe’s top economy, is grappling with how to handle immigration from poor EU members Romania and Bulgaria now that their citizens can seek work anywhere within the bloc. Read more of this post

German Inflation Fears Fade—After 90 Years

German Inflation Fears Fade—After 90 Years

By Birgit Jennen January 09, 2014

When Walter Baltes was five, he thought money always came in bundles of bank notes like those his grandmother hauled to the bakery to buy bread. It was 1923, in the town of Witten in Germany’s industrial heartland, and the Reichsbank was printing marks nonstop to pay reparations from World War I. “I am very careful with money, which probably has something to do with my experience,” says Baltes, 95. His frugality notwithstanding, he says these days he sees “absolutely no risk of inflation.” Read more of this post

Funds face being pinched in a closing information gap; Watchdogs crack down on investment managers’ traditional edge

January 10, 2014 4:17 pm

Funds face being pinched in a closing information gap

By Brooke Masters in London

Watchdogs crack down on investment managers’ traditional edge

It is getting harder and harder to find an edge these days. Back in the day, fund managers achieved good results by cultivating company executives to get an early sniff of looming problems and successes. Then regulators cracked down on the practice of selective information sharing. The US passed regulation FD (for fair disclosure) in 2000 and the UK began enforcing rules requiring prompt disclosure of material information. The rise of the internet and high-frequency trading also cut down on information asymmetry and sped up market reaction to news when it occurred. Professionals are also finding that there are fewer inattentive punters to exploit. Institutional investors now hold more than 60 per cent of US shares, up from just 10 per cent in the 1970s; and the average holding period of UK shares has dropped from five years in the 1960s to well under a year now. Read more of this post

From Non-GAAP To Non-Sense: David Stockman Slams The “Earnings Ex-Items” Smoke-Screen

From Non-GAAP To Non-Sense: David Stockman Slams The “Earnings Ex-Items” Smoke-Screen

Tyler Durden on 01/11/2014 17:47 -0500

We noted on Thursday, when Alcoa reported, that “non-recurring, one-time” charges are anything but; indicating just how freely the company abuses the non-GAAP EPS definition, and how adding back charges has become ordinary course of business. But it’s not just Alcoa, and as David Stockman, author The Gret Deformation, notes Wall Street’s institutionalized fiddle of GAAP earnings made P/E multiples appear far lower than they actually are, and thereby helps perpetuate the myth that the market is “cheap.” Read more of this post