Stockmarket investors are more optimistic than the fundamentals warrant

Stockmarket investors are more optimistic than the fundamentals warrant

Jan 4th 2014 | From the print edition

EQUITY markets finished 2013 with a bang, with the S&P 500 index delivering a return to investors of more than 30%, once dividends are included. And investors’ optimism appeared to be borne out by trends in the American economy, the world’s largest, as third-quarter growth figures were revised higher on December 20th to show an annualised gain of 4.1%. Read more of this post

Soros: The World Economy’s Shifting Challenges

GEORGE SOROS

George Soros is Chairman of Soros Fund Management and Chairman of the Open Society Foundations. A pioneer of the hedge-fund industry, he is the author of many books, including The Alchemy of Finance and The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means.

JAN 2, 2014

The World Economy’s Shifting Challenges

NEW YORK – As 2013 comes to a close, efforts to revive growth in the world’s most influential economies – with the exception of the eurozone – are having a beneficial effect worldwide. All of the looming problems for the global economy are political in character. Read more of this post

Secret of Higher Interest Rates Revealed

Secret of Higher Interest Rates Revealed

I can only imagine what the average person must think when he reads what passes for economic analysis in the daily press. Let me give you an example.

Last week, on the heels of strong economic data, the 10-year Treasury yield closed above 3 percent for the first time since July 2011. That was enough to send up flares and elicit warnings about the effect on economic growth. Read more of this post

Rousseff Buoyed by Rising Poor Even as Brazil Rating Drop Looms

Rousseff Buoyed by Rising Poor Even as Brazil Rating Drop Looms

Brazil’s once-richest man, Eike Batista, is watching his empire crumble. The 16 percent plunge in the Sao Paulo stock exchange in 2013 was second-worst in the world. Meanwhile, Luzia Souza is faring better than ever in the country’s poorest state. Read more of this post

Pop Mogul Turns Holocaust Refuge Into Swedish Asylum for Profits

Pop Mogul Turns Holocaust Refuge Into Swedish Asylum for Profits

Bert Karlsson, a pop impresario who once led Sweden’s main anti-immigration party, is using the biggest influx of asylum seekers in more than 20 years as a business opportunity. Read more of this post

Pimco Sees Dim Sum Refinancing Boom on Cash Crunch

Pimco Sees Dim Sum Refinancing Boom on Cash Crunch

Pacific Investment Management Co. sees a 2014 boom in issuance outside the mainland by Chinese companies, driven by a record amount of Dim Sum bonds set to expire and a cash crunch in domestic markets. Read more of this post

Long time gone: Can American labour policies face the challenge of long-term joblessness?

Long time gone: Can American labour policies face the challenge of long-term joblessness?

Jan 4th 2014 | ATLANTA | From the print edition

THE budget deal that Republicans and Democrats cobbled together in December left several pieces of business unfinished. Among them was the fate of extended unemployment-insurance (UI) benefits. First passed in 2008 and extended several times since, these provide workers with up to 47 weeks of federally funded benefits after they have drawn the maximum their states allow (usually 26 weeks). America’s government has enacted such measures in every recession since 1957. The most recent extension expired on December 28th, leaving roughly 1.3m Americans suddenly cut off and setting the stage for a huge political battle early in 2014. Read more of this post

Latin America’s largest economy enters an unpredictable election year

Latin America’s largest economy enters an unpredictable election year

Jan 4th 2014 | SÃO PAULO | From the print edition

“IT’S not about the 50 cents” reads a scrawl on a shop shutter on Avenida Faria Lima, one of São Paulo’s main thoroughfares. Next door, the message is blunter: “Screw the police”. Six months after a small demonstration against a 50-cent rise in bus fares blew up into the biggest street protests Brazil had seen in a generation, few visible signs remain of the wider anger they revealed—about corruption, poor public services and rising living costs. Recent attempts to organise a reprise have attracted only a few hundred marchers. Support for the president, Dilma Rousseff of the Workers’ Party, which plummeted after June’s protests, has rebounded. A poll in November of voting intentions in next October’s elections gave her 47%, against 30% for her two likeliest adversaries combined. Read more of this post

How the United States is reinventing itself yet again

How the United States is reinventing itself yet again

By Vivek Wadhwa and Alex Salkever, Updated: January 2 at 8:12 am

We have moved from the Great Recession to the Great Malaise. Despite massive government stimulus, the world’s largest and most advanced economy continues to limp sideways. Unemployment remains stubbornly high. Growth remains slow and prospects for employment growth remain bleak. Wages continue to stagnate. Recent college graduates and young professionals may well be the first generation to live a life inferior to those of their parents, conventional wisdom holds. The United States has entered a period of slow decline, much like the sun finally setting on the British Empire in the 20th century. Read more of this post

Gross’s Mistake on Fed Taper Echoes Across Pimco Funds

Gross’s Mistake on Fed Taper Echoes Across Pimco Funds

Bill Gross, the money manager known as “The Bond King,” misjudged the timing and impact of the Federal Reserve’s plan to scale back its asset purchases in 2013, spurring the Pimco Total Return Fund’s (PTTRX) biggest decline in almost two decades. Read more of this post

Global house prices: Castles made of sand; Monetary policy may call an end to the house-price party

Global house prices: Castles made of sand; Monetary policy may call an end to the house-price party

Jan 4th 2014 | From the print edition

HOUSE prices are now rising in 18 of the 23 countries we track across the globe, compared with just 12 a year ago. America tops our table: the Case-Shiller index released on New Year’s Eve reported price increases of 13.6% in the year to October 2013. Homes have risen in value by 24% since their March 2012 trough, but they remain 20% below their peak in April 2006. Read more of this post

Flipping the Coin on the Value of Stocks ‘Experts’

Flipping the Coin on the Value of Stocks ‘Experts’

SPENCER JAKAB

Updated Jan. 2, 2014 3:04 p.m. ET

Look out above! Financial markets are full of surprises. But before 2014 even started, an annual ritual followed a set script: Wall Street strategists predicted further gains for stocks. Perhaps the only head-scratcher is that their targets imply a mere 7% rise in 2014 following what was the best year for the S&P 500-stock index since 1997.

Read more of this post

Berkshire Converts Crisis-Era Gypsum Wallboard Maker USG Investment to Stock

Berkshire Converts Crisis-Era USG Investment to Stock

Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) is benefiting from another financial-crisis wager by converting debt it held in gypsum wallboard maker USG Corp. (USG) into more than $600 million in common stock. Read more of this post

Erdogan Crisis Adds Fuel to 2013 Bond Rout: Turkey Credit

Erdogan Crisis Adds Fuel to 2013 Bond Rout: Turkey Credit

The selloff that sent Turkish local-currency debt plunging five times more than emerging-market peers last year is showing few signs of easing, amid a standoff between Prime Minister Recep Tayyip Erdogan and the judiciary. Read more of this post

Bitcoin-Equipment Boom Benefits TSMC, AMD Sales, Report Says

Bitcoin-Equipment Boom Benefits TSMC, AMD Sales, Report Says

Taiwan Semiconductor Manufacturing Co. (2330), Advanced Micro Devices Inc. (AMD) and other companies have seen more than $200 million in sales in 2013 for computing components used to create Bitcoins, Wedbush Securities Inc. said. Read more of this post

Bill Gross’s Flagship Fund Suffers Biggest Loss Since 1994

Jan 2, 2014

Bill Gross’s Flagship Fund Suffers Biggest Loss Since 1994

MIN ZENG

It was a bruising year for the world’s biggest bond fund run by high-profile fund manager Bill Gross, as the fund suffered the biggest annual loss since 1994. Read more of this post

Bank of Finland Warns Debt Level Poised to Double: Nordic Credit

Bank of Finland Warns Debt Level Poised to Double: Nordic Credit

The Bank of Finland is warning that the euro area’s best-rated economy risks sliding down a path that could see its debt burden rival Italy’s. Finland has little room to deviate from a proposal to fill a 9 billion-euro ($12.3 billion) gap in Europe’s fastest-aging economy if it’s to avoid debt levels doubling in the next decade and a half, according to the central bank. Read more of this post

Are U.S. Stocks Cheap? P/E ratios can make equities look cheap or pricey based on how they are calculated. How to make sense of this key question

THURSDAY, JANUARY 2, 2014

Are U.S. Stocks Cheap?

By JACK HOUGH | MORE ARTICLES BY AUTHOR

P/E ratios can make equities look cheap or pricey based on how they are calculated. How to make sense of this key question.

Based on the ratio of share prices to earnings, are U.S. stocks more expensive or cheaper than usual? That’s a simple but important question with a complicated answer. Last year, the Standard & Poor’s 500 index of large U.S. companies gained 30%, not counting dividends, its strongest result since 1997. Earnings for index members hit record highs, too. The index stands at 15.2 times forecasted operating earnings for 2014, according to S&P. (More on “operating” in a moment.) The average since 1988, when S&P began tallying operating earnings, is 18.7 times trailing earnings. That suggests that stocks could gain more than 20% in 2014 and still be reasonably priced. But there are three problems with that thinking. Read more of this post

A new hope or false dawn for Mexico’s oil refiners?

A new hope or false dawn for Mexico’s oil refiners?

2:45am EST

By David Alire Garcia

TULA, Mexico (Reuters) – Mexico’s oil refining industry, saddled for years with bloated costs, chronic underinvestment and generous government fuel subsidies, ought to be on the verge of a bright new dawn. Read more of this post

Berkshire Seen Failing Buffett 5-Year Test for First Time

Berkshire Seen Failing Buffett 5-Year Test for First Time

Warren Buffett probably missed his target for the first time in 44 years.

Berkshire Hathaway Inc. (BRK/A), his $292 billion company, is poised to report that it failed to increase net worth more rapidly than the Standard & Poor’s 500 Index during the past five years, according to analyst estimates. It would be the first time the billionaire investor fell short of the goal since he took over the Omaha, Nebraska-based company in 1965. Read more of this post

At Papers, Berkshire Rewrites Its Script; Warren Buffett’s Conglomerate Is Buying and Retooling Newspapers

At Papers, Berkshire Rewrites Its Script

Warren Buffett’s Conglomerate Is Buying and Retooling Newspapers

ANUPREETA DAS

Jan. 1, 2014 6:09 p.m. ET

Warren Buffett, tossing a newspaper at Berkshire’s 2012 annual meeting, typically favors stable, growing businesses in industries with good prospects. Reuters

Shortly after Warren Buffett‘s Berkshire Hathaway Inc. BRKB +0.44% bought the Richmond Times-Dispatch newspaper in 2012, things began to change. Eight-year-old newsroom computers were replaced. A malfunctioning sound system in the 180-seat auditorium of the paper’s downtown Richmond, Va., headquarters was fixed. The company also spent $1.3 million last year to upgrade the paper’s production plant. Read more of this post

Billionaires Worth $3.7 Trillion Surge as Gates Wins 2013; 58-year-old tycoon’s fortune increased by $15.8 billion to $78.5 billion, as shares of Microsoft rose 40 percent

Billionaires Worth $3.7 Trillion Surge as Gates Wins 2013

The richest people on the planet got even richer in 2013, adding $524 billion to their collective net worth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 300 wealthiest individuals. Read more of this post

11 Expert Tips To Help You Be More Productive In 2014

11 EXPERT TIPS TO HELP YOU BE MORE PRODUCTIVE IN 2014

WHO DOESN’T WANT TO FIGURE OUT HOW TO GET MORE DONE? OR GET THINGS DONE MORE EFFICIENTLY? WE ASKED SOME OF THE MOST PRODUCTIVE PEOPLE WE KNOW HOW YOU CAN TACKLE THE NEW YEAR’S WORK.

BY KATHLEEN DAVIS

Last year I used a kitchen timer to force myself to focus; I blocked the Internet and email so I couldn’t get distracted; I set an auto-response on my email; I wrote a lot of to-do lists. I even started getting up earlier. Read more of this post

The Fascinating Reason People Thought The Telephone Would Be A Total Flop

The Fascinating Reason People Thought The Telephone Would Be A Total Flop

JAY YAROW

2 MINUTES AGO 0

Venture capitalist Ben Horowitz has a big post on why people should be optimistic about technology companies. In it, he talks about how some of the most fundamental products in our lives today were laughed at by outsiders when they were first introduced.  Read more of this post

Theft by other means: China’s assault on foreign companies

Wednesday, January 1, 2014

Theft by other means: China’s assault on foreign companies

Derek Scissors | December 19, 2013, 8:16 am

If Senator Max Baucus becomes the next US Ambassador to China, he will start day one with a very big problem. China’s economic reform program is barely a month old and already appears fraudulent in critical respects. In particular, attacks on foreign companies, which began earlier this year, are growing far more threatening. The health of the American technology industry, especially, is at risk, and the credibility of US policy is being challenged. Read more of this post

Three Predictions for Xi Jinping in the New Year

Jan 1, 2014

Three Predictions for Xi Jinping in the New Year

By Russell Leigh Moses

Former political star Bo Xilai was publicly excoriated then thrown behind bars in 2013, while Chinese Communist Party chief Xi Jinping found new ways to reach out to the public. Both show a party working to get its message out about corruption and its common cause with the public, even as it works to keep power for itself. What that in mind, here are some developments to watch for in the new year. Read more of this post

Revlon to Exit Operations in China, Cut 1,100 Jobs

Revlon to Exit Operations in China, Cut 1,100 Jobs

Revlon Inc. (REV), the maker of cosmetics under its namesake and Almay brands, will cease operations in China and eliminate about 1,100 positions, including 940 beauty advisers, as it restructures its struggling business. Read more of this post

SOE Reform in China — Big Changes On the Way

SOE Reform in China — Big Changes On the Way

Peter Fuhrman

Chairman and CEO China First Capital

December 24th, 2013Leave a commentGo to comments

China’s state-owned enterprises (SOEs) are a lucky breed, or so conventional wisdom would have it. They have lower cost of capital and less competitive pressures of private sector competitors. China’s big banks (also state-owned) are always happy to lend, and if things do turn sour, China’s government will bail everyone out. Read more of this post

Rawhide in China

Rawhide in China

David Keohane

| Jan 02 11:30 | 3 comments | Share

China says rollover. From the FT’s Simon Rabinovitch:

Faced with a mountain of maturing loans this year, China has given local governments the go-ahead to issue bonds as a way of rolling over their debt to avoid defaults. The announcement by the National Development and Reform Commission, a top central planning authority, is the most explicit official endorsement of a massive debt refinancing operation that has become unavoidable and is already under way, analysts said. Read more of this post