Fixing What’s Wrong With Economics 101

Fixing What’s Wrong With Economics 101

Harvard’s most popular course is Ec 10, the introductory class in economics. This fall, 760 undergraduates were enrolled — almost half the school’s freshmen. Economics is the most popular major at Harvard, Yale and Princeton. Rightly or wrongly, these students and others will have an outsized impact on policy making, so it matters how the subject is taught. Yet many, especially those who only take first-year classes, get a misleading impression of how the economy works. We can do better. Read more of this post

Brace for bumpy ride in emerging markets

December 5, 2013 12:11 pm

Brace for bumpy ride in emerging markets

By Gillian Tett

Banks and hedge funds have been stealthily creating ‘hit lists’

This week, the Indian government can breathe one tiny sigh of relief. After a year in which the rupee has gyrated dramatically, amid fears about a US “taper” and poor growth, the Indian currency hit a one-month high against the dollar of Rs61.53 on Thursday. Read more of this post

Greenspan Baffled Over Bitcoin ‘Bubble’: “To Be Worth Something, It Must Be Backed By Something”; Ron Paul: Bitcoin could ‘destroy the dollar’; Bitcoin Boom Spreads to IPhones With Mobile-Payment Apps

Greenspan Baffled Over Bitcoin ‘Bubble’: “To Be Worth Something, It Must Be Backed By Something”

Tyler Durden on 12/04/2013 19:07 -0500

“In order for currencies to be ‘exchangeable’ they have to be backed by something,” is the remarkably ironic initial comment from none other than debaser-of-the-entirely-fiat-dollar Alan Greenspan when asked about the “bubble in bitcoin,” by Bloomberg TV’s Trish Regan. Unable to “identify the intrinsic” backing of Bitcoin (or see bubbles in equity, credit, real estate, or greater fools) Greenspan is, apparently, capable of identifying Bitcoin “as a bubble,” because “there is no fundamental means of “repaying’ it by any means that is universally accepted.” The farcical double-speak continues as the Maestro does a great job of making Bitcoin (which Ron Paul earlier noted could be the “destroyer of the dollar”) look even better than the readily-printed fiat we meddle with every day. Read more of this post

Diners not biting on KFC’s China revival campaign

Diners not biting on KFC’s China revival campaign

7:19am EST

By Lisa Baertlein and Adam Jourdan

NEW YORK/SHANGHAI (Reuters) – Yum Brands Inc’s KFC website in China trumpets the slogan “Trust in every bite”. That message is part of the company’s new “I Commit” campaign intended to reassure customers in its largest market, who have cut back on visits since Chinese media reports a year ago about excessive antibiotic use by a few KFC suppliers. Read more of this post

An Expensive Play on China’s Bad Debts; Investors Shouldn’t Volunteer as Guinea Pigs in Beijing’s Cinda Experiment

An Expensive Play on China’s Bad Debts

Investors Shouldn’t Volunteer as Guinea Pigs in Beijing’s Cinda Experiment

AARON BACK 

Updated Dec. 3, 2013 2:21 a.m. ET

China Cinda Asset Management has essentially become a state-owned hedge fund that specializes in distressed assets. Now foreign investors are invited to bet on its success in a Hong Kong public offering. They should pass. Beijing created Cinda in 1999 to take nonperforming loans off the books of state-ownedChina Construction Bank.601939.SH -0.22% It never made money on this batch of loans, which it was forced to buy at face value and eventually had to fob off on the government. It later was able to buy more loans at deep discounts, and since 2010, take over debts that Chinese companies owe each other. These business lines have been profitable, according to pre-IPO documents. Read more of this post

Steve Case: Don’t let the United States turn into Detroit

Steve Case: Don’t let the United States turn into Detroit

By Matt McFarland, Updated: December 3 at 12:05 pm

AOL co-founder Steve Case stressed the need for the United States to remain innovative Tuesday at an event hosted by the Aspen Institute in Washington. “We kind of led on the digital information revolution. We need to lead in the next revolution, otherwise our economy will start stagnating and we’ll never be able to solve some of the fiscal problems,” Case said. Read more of this post

Shell to GE Lured by Gas-Fueled Ships on Record Supply

Shell to GE Lured by Gas-Fueled Ships on Record Supply

Royal Dutch Shell Plc (RDSA), General Electric Co. (GE) and a company co-founded by T. Boone Pickens are planning investments in natural-gas-powered shipping as record U.S. output spurs the merchant fleet to use a new fuel. Clean Energy Fuels Corp., which Pickens helped start, will begin construction next year on the country’s first fuel station for cargo ships running on liquefied natural gas in Jacksonville, Florida. Shell said in March it’s planning LNG plants for the Great Lakes and Gulf Coast. GE, evaluating five locations, says the U.S. will need 50 to 100 small-scale plants for ships, trains, mining and trucks by 2025, each costing $50 million to $150 million. Read more of this post

OPEC Inaction Masks Looming Supply Glut in 2014: Energy Markets

OPEC Inaction Masks Looming Supply Glut in 2014: Energy Markets

Even with OPEC forecast to keep its output quota unchanged at a meeting this week, falling oil demand and prospects for increased supply from some member states mean the group’s leader, Saudi Arabia, will have to cut production anyway. The kingdom and its allies Kuwait, Qatar and the United Arab Emirates will need to produce about 2 million barrels a day less in 2014 to prevent a glut, the Centre for Global Energy Studies predicts. That’s equal to annual revenue of about $80 billion at today’s prices. The 12-nation group meets in Vienna on Dec. 4 and will reaffirm its collective limit of 30 million barrels a day, according to 22 of 24 analysts and traders surveyed by Bloomberg News. Read more of this post

In Fracking, Sand Is the New Gold; Energy Boom Fuels Demand for Key Ingredient Used in Drilling Wells; 100 Sand Mines in Wisconsin

In Fracking, Sand Is the New Gold

Energy Boom Fuels Demand for Key Ingredient Used in Drilling Wells; 100 Sand Mines in Wisconsin

ALISON SIDER and KRISTIN JONES

Dec. 2, 2013 7:49 p.m. ET

The race to drill for oil in the U.S. is creating another boom—in sand, a key ingredient in fracking. Energy companies are expected to use 56.3 billion pounds of sand this year, blasting it down oil and natural gas wells to help crack rocks and allow fuel to flow out. Sand use has increased 25% since 2011, according to the consulting firm PacWest, which expects a further 20% rise over the next two years. Read more of this post

Versace Valuation May Be as Over the Top as Its Clothes

DECEMBER 3, 2013, 2:09 PM

Versace Valuation May Be as Over the Top as Its Clothes

By QUENTIN WEBB

Versace’s valuation looks as aggressive as its outfits. The Italian fashion house, which is sizing up buyout firms and sovereign wealth funds to finance a capital increase, believes it is worth more than 1 billion euros, or $1.36 billion, and could triple in value in three years. There is real potential, because Versace has fallen behind industry trends. But a big price tag for a skimpy minority stake next to a powerful family? That’s hard to pull off. Read more of this post

Heavy Inventories Threaten to Squeeze Clothing Stores

Heavy Inventories Threaten to Squeeze Clothing Stores

Retailers’ Weak Thanksgiving Showing Could Force Tough Markdowns

SUZANNE KAPNER

Dec. 3, 2013 9:58 p.m. ET

It isn’t just Americans who need to go on a diet after Thanksgiving. Apparel retailers need to slim down, too. Chains including Abercrombie & Fitch Co. ANF +5.79% , Chico’s FAS Inc., Gap Inc.GPS -1.13% and Victoria’s Secret came into the fourth quarter with heavy inventory loads. The concern now is the retail industry’s weak showing over Thanksgiving weekend will force them to take bigger markdowns that could hurt their fourth-quarter profits. Read more of this post

Adidas chief admits mistakes have taken toll

December 3, 2013 1:29 pm

Adidas chief admits mistakes have taken toll

By Alice Ross in Frankfurt

The chief executive of Adidas has admitted that the German sports equipment company has made mistakes and not performed as well as senior executives had hoped. Speaking to investors at its Bavarian headquarters in Herzogenaurach, Herbert Hainer, head of the world’s second-largest sportswear company by sales, said that the environment “had served up a constant stream of challenges”, including cost pressures, currency swings and a “persistently weaker” European market. Read more of this post

Worst Raw-Material Slump Since ’08 Seen Deepening

Worst Raw-Material Slump Since ’08 Seen Deepening

By Elizabeth Campbell – Dec 2, 2013

The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide. The Standard & Poor’s GSCI Spot Index of 24 raw materials fell in December 83 percent of the time since 1971 when the benchmark gauge was posting losses for the year through November, data compiled by Bloomberg show. The average December loss was 3.9 percent, which if it happened this time would mean a 7.8 percent drop for the year. Read more of this post

Raw Sugar Extends Longest Slump Since August 2012 on Supply Glut

Sugar Reaches Three-Year Low as Indian Dispute Ends; Cocoa Drops

Sugar fell to a three-year low in London on speculation exports from India will speed up after the end of a cane-price dispute that delayed processing in the world’s second-biggest producer. Cocoa retreated in London. All mills in Uttar Pradesh state will start processing cane by Dec. 12 after ending a shutdown, C.B. Patodia, president of Uttar Pradesh Sugar Mills Association, said in an interview yesterday. India is returning to the export market and may ship out as much as 3 million metric tons of sugar, Abinash Verma, director general of the Indian Sugar Mills Association, said in an interview in London last week. Read more of this post

Commodity trackers flee for surging stocks

December 4, 2013 8:59 am

Commodity trackers flee for surging stocks

By Gregory Meyer in New York

Index-tracking commodity investors are fleeing the strategy at a record pace as surging stock markets leave raw materials in the dust. New estimates from Citi show $36bn was redeemed from passive commodities investments in the year to November, a “massive retrenchment” from net inflows of $27.5bn in all of 2012. Read more of this post

Tingyi Considers Food Deals With $1.6 Billion War Chest

Tingyi Considers Food Acquisitions With $1.6 Billion War Chest

Tingyi (Cayman Islands) Holding Corp. (322), PepsiCo Inc.’s Chinese partner, is considering buying instant food businesses to boost growth after annual sales expanded at the slowest pace in eight years. The maker of Master Kong brand ready-to-drink teas and snacks is seeking acquisitions, and will likely form a new strategic alliance next year, Chief Financial Officer Frank Lin said in an interview in Taipei on Nov. 29, declining to provide details. It’s considering both domestic and overseas brands for deals and cooperations, he said. Read more of this post

Robin Li Passes Wang Jianlin as China’s Wealthiest Man

Robin Li Passes Wang Jianlin as China’s Wealthiest Man

Robin Li passed Wang Jianlin as the richest man in China today by just $64 million, according to the Bloomberg Billionaire Index.

The founder of China’s largest Internet search engine Baidu Inc., has become the wealthiest individual in the world’s second-biggest economy, 14 days after he took the No. 2 spot. Li’s net worth has climbed by $4.8 billion, or 65 percent, to $12.231 billion so far this year as Baidu shares rallied. Wang, chairman of closely-held Dalian Wanda Group, has seen his fortune rise by $2.9 billion to $12.167 billion in 2013. Four of China’s top billionaires are worth about $12 billion. Read more of this post

Inside China’s Version of Silicon Valley; Entrepreneurs, Investors Rub Elbows in Beijing’s Zhongguancun District

Inside China’s Version of Silicon Valley

Entrepreneurs, Investors Rub Elbows in Beijing’s Zhongguancun District

PAUL MOZUR

Updated Dec. 3, 2013 8:11 p.m. ET

BEIJING—On the outside, China’s answer to Silicon Valley doesn’t look the part: It’s a crowded mass of electronics malls, fast-food joints and office buildings in northwest Beijing, bisected by congested highways. But in these nondescript offices China is nurturing a growing class of tech entrepreneurs and venture capitalists, whose promising startups are challenging the long-held idea that China’s Internet companies merely copy the products of the West. Read more of this post

Disney rethinks its China strategy

December 2, 2013 4:00 pm

Disney rethinks its China strategy

By Howard Yu and Stefan Michel

The story. When China lifted a ban on Walt Disney characters in 1978 and joined the World Trade Organisation in 2001, the US entertainment company saw a huge potential new market for sales and distribution of film, television content and DVDs in an increasingly liberalising economy. Read more of this post

China’s Top 100 Brands: Private Companies Gaining Ground

Dec 3, 2013

China’s Top 100 Brands: Private Companies Gaining Ground

China Mobile ranked as the country’s No. 1 brand in 2013, according to research from Millward Brown and WPP. China’s homegrown private brands are gaining ground against their state-backed peers, reflecting progress, experts say, in the country’s push to rebalance the economy. Read more of this post

China’s Latest IPO Investment: Death

Dec 2, 2013

China’s Latest IPO Investment: Death

ISABELLA STEGER

If childbirth was the investment theme for November in China, then this month investors will have the chance to invest in something quite the opposite — a funeral services provider. Shanghai-based Fu Shou Yuan Group Ltd. is set to become the first such company in the country to go public. The biggest operator of cemeteries and provider of funeral services in China is looking to raise around $200 million in an initial public offering in Hong Kong, a person with knowledge of the matter said Tuesday. Read more of this post

A Profitable Trade: Illicitly Shipping BMWs to China; Lucrative Re-Sales of Luxury Cars Targeted by Federal U.S. Investigators

A Profitable Trade: Illicitly Shipping BMWs to China

Lucrative Re-Sales of Luxury Cars Targeted by Federal U.S. Investigators

ANDREW GROSSMAN

Dec. 2, 2013 6:57 p.m. ET

In the U.S., the sticker price for a BMW BMW.XE -1.77% X5 sport-utility vehicle is just over $56,000. In China, BMW advertises the same car for nearly three times that, creating an opening for arbitragers to buy the vehicles in the U.S. and ship them to China for a quick profit. Read more of this post

Uncovering the market’s hidden blue chip stocks in Australia

Uncovering the market’s hidden blue chip stocks

December 4, 2013 – 2:20PM

Most investors know Woolworths and Commonwealth Bank of Australia are some of the most reliable earners listed on the ASX. That’s a big reason why they are considered the bluest of blue-chip stocks. But if a steady earnings profile makes a blue-chip stock, then the list would extend beyond the top 50 to include other names – some better known than others – such as Carsales.com, Mermaid Marine, Silver Chef and Corporate Travel Management. What most investors want when they buy shares in a company is exposure to a business that’s on a firm financial footing, a history of steady earnings growth, and decent prospects – all at a reasonable price. Sounds simple, really – except we all know it’s not. But we’ve tried to make things a little bit easier for you by measuring the stability of earnings, operating income and dividends paid of each and every one of the biggest 300 listed companies by market capitalisation, to come up with a short list of the businesses that have had the steadiest earnings profile over the past 10 years.

Read more of this post

Shareholder Activism Rises Down Under; The Most Recent Target Is Seen as a Test of Activism Efficacy for Larger Companies

Shareholder Activism Rises Down Under

The Most Recent Target Is Seen as a Test of Activism Efficacy for Larger Companies

ROSS KELLY

Dec. 2, 2013 6:35 a.m. ET

Shareholder activism, made popular in the U.S. by the likes of Carl Icahn and Dan Loeb, is taking root in Australia as investors bristle over years of poor returns and conservative capital management. Washington H. Soul Pattinson SOL.AU -1.03% & Co., Australia’s second-oldest listed company, is the latest to find itself in the cross hairs of investors who think management isn’t doing enough to generate value. In October, the 110-year-old company, which has interests in businesses ranging from pharmaceutical retailing to coal mining, became the subject of an assault by two of its largest shareholders: Australian fund manager PerpetualLtd. PPT.AU -1.21% and investment banker Mark Carnegie. Read more of this post

Australia Food-Bowl Dream Seen at Risk as Foreign Cash Shunned

Australia Food-Bowl Dream Seen at Risk as Foreign Cash Shunned

Prime Minister Tony Abbott’s election pledge to turn Australia’s remote north into a food bowl for Asia has set him on a collision course with his own government over foreign ownership of agricultural land. Local farmers and officials have warned Abbott’s vision for the sparsely populated region will fail unless he allows greater investment from countries such as China and Indonesia. The government’s decision last week to block a U.S.-led $2 billion purchase of crop handler GrainCorp Ltd. has put a cloud over Abbott’s vow after his Sept. 7 election win that Australia is “open for business.” Read more of this post

Taubman’s Bet on Asia Shakes Investors’ Faith; Investors Worry the Company Is Too Tied Up in Asia Projects

Taubman’s Bet on Asia Shakes Investors’ Faith

Investors Worry the Company Is Too Tied Up in Asia Projects

ROBBIE WHELAN

Dec. 3, 2013 7:57 p.m. ET

In late October, executives from Taubman Centers Inc., TCO +0.32% the luxury retail real-estate empire built by the Taubman family of Michigan, gathered with local officials and business leaders in Hanam City, South Korea, to celebrate the groundbreaking of a massive mall the company is building there. Read more of this post

Lessons from Asia’s reversal of fortunes; Myanmar’s emergence on the international stage is stealing some of Thailand’s thunder

December 2, 2013 5:55 pm

Lessons from Asia’s reversal of fortunes

By Gwen Robinson

Myanmar’s emergence on the international stage is stealing some of Thailand’s thunder, writes Gwen Robinson

The short flight from Bangkok to Yangon on Sunday took the usual 55 minutes and transported passengers from Thailand’s thriving metropolis to the more surreal world of Myanmar’s former capital. But this time, the “tale of two cities” – one just emerging from the shadows, the other on a rapid development track – had reversed, like a movie in which the actors suddenly swap roles. Read more of this post

China Bond Trading Dives; Cheapening Bond Prices Fail to Whet Investors’ Appetite

China Bond Trading Dives

Cheapening Bond Prices Fail to Whet Investors’ Appetite

SHEN HONG

Dec. 2, 2013 4:31 a.m. ET

SHANGHAI—Trading volume in China’s bond market has plummeted in recent months, in another reminder of how the country’s shifting interest-rate environment has taken a toll on a once fast-expanding financial sector. Read more of this post

Hong Kong Confirms City’s First Human Case of Bird Flu

Hong Kong Confirms City’s First Human Case of Bird Flu

Hong Kong has reported its first confirmed human infection of H7N9 avian influenza, the strain of the virus that has killed 45 people in China this year. The victim is a 36-year-old Indonesian domestic helper, who had traveled to the neighboring mainland Chinese city of Shenzhen, where she bought and slaughtered a chicken, Hong Kong’s government said yesterday in statement. Read more of this post