Ottawa’s $3.7-billion credit crisis bailout actually made money

Ottawa’s $3.7-billion credit crisis bailout actually made money

Barry Critchley | 12/11/13 | Last Updated: 12/11/13 6:32 PM ET
The Canadian Secured Credit Facility, one of the federal government’s key emergency responses to the global credit crisis, may be the most financially successful government program in recent history. The reason: every penny of capital that was provided has now been repaid and the government received market interest rates along the way. Accordingly, thanks to the receipt of the final payment in the past week, the book is closed on this bailout and taxpayers are more than whole. Read more of this post

Markets Evolve, as Does Financial Fraud

NOVEMBER 11, 2013, 7:01 AM

Markets Evolve, as Does Financial Fraud

By PETER J. HENNING

It is usually the case that there are not new frauds, just new avenues for deception. As the financial world has evolved into a high-speed race to trade assets while investment strategies are kept secret, both regulators and investors face the challenge of finding the fine line between permissible trading and manipulation aimed at generating unfair profits. Read more of this post

James Packer outlines plan to turn Sri Lanka into gambling mecca

James Packer outlines plan to turn Sri Lanka into gambling mecca

November 13, 2013 – 4:02PM

Colin Kruger

Just days after receiving approval to build a $1.5 billion luxury hotel and casino at Sydney Harbour development Barangaroo, James Packer is making his most public pitch yet to build a $400 million casino resort in Sri Lanka. In a speech to be delivered to delegates at the Commonwealth Business Forum in Colombo overnight – a conference being held ahead of the Commonwealth Heads of Government Meeting – Mr Packer said a luxury casino resort is a necessity if Sri Lanka is to achieve its potential to become ‘‘a leading tourist mecca for the rising middle class of India, China and the rest of Asia.’’ Read more of this post

How Much Popularity Can Low Volatility Stand?

How Much Popularity Can Low Volatility Stand?

Date: November 11th, 2013 | Category: Equities, Strategy

Craig Lazzara

Global Head of Index Investment Strategy

S&P Dow Jones Indices

The low volatility anomaly — i.e., the tendency for low-volatility or low-beta portfolios to outperform market averages — has been the subject of at least 40 years of academic research.  Given its challenge to what “everyone knows” about risk and return, it’s a fertile field for both professors and practitioners, some of whom recently characterized “the long-term outperformance of low-risk portfolios [as] perhaps the greatest anomaly in finance.” Read more of this post

Hedgies have built a sector on an aura of exclusivity

Last updated: November 12, 2013 10:19 pm

Hedgies have built a sector on an aura of exclusivity

By Jonathan Guthrie

You are a discerning member of the elite. So please read on. We have to be selective, obviously. Just as Goldman Sachs will doubtless be in inviting investors to participate in Petershill II, a private equity fund that will buy stakes in hedge fund partnerships. One can’t give any old Tom, Dick or Harriet access to such an exclusive investment. Or the go-ahead to peruse this incredibly classy column. Read more of this post

Germany is disheartened by America, its one-time mentor, protector and role model

Germany is disheartened by America, its one-time mentor, protector and role model

Nov 9th 2013 |From the print edition

EDWARD SNOWDEN makes a perfect hero for some Germans. As a former contractor of an American spy agency who has been divulging its excesses, he is a “good American” who makes some of his compatriots look like “ugly Americans”. He thus taps into both of the archetypes that Germans have long held about their most important ally. Mr Snowden also placed his own sense of morality above that of his government at the risk of being deemed a traitor. To Germans, who remember two dictatorships in one long lifetime, that is heroism. Read more of this post

Foreign exchange: The big fix; Banks fear a repeat of the costly Libor scandal after traders were suspended over currency concerns

November 12, 2013 8:46 pm

Foreign exchange: The big fix

By Daniel Schäfer, Alice Ross and Delphine Strauss

Banks fear a repeat of the costly Libor scandal after traders were suspended over currency concerns

For years, the chatroom cacophony in the clubby world of foreign exchange traders was peppered with allusions to drinks, drugs and women. But in the spring of 2012, debate in the private Bloomberg chats suddenly turned serious. The conversations centred on a committee meeting of an elite group of the City of London’s most senior currency traders and their counterparts at the Bank of England. Traders were agitated about rumours that BoE representatives may have raised concerns in an April meeting over possible manipulation of daily currency fixings, said people familiar with the interbank chatroom conversations. Read more of this post

Confessions of a Quantitative Easer; Fed Official Who Helped Orchestrate QE: ‘I’m Sorry, America,’ QE Really Was A Huge Wall Street Bailout

Fed Official Who Helped Orchestrate QE: ‘I’m Sorry, America,’ QE Really Was A Huge Wall Street Bailout

STEVEN PERLBERG NOV. 12, 2013, 9:05 AM 13,008 70

Andrew Huszar, a former Federal Reserve employee who executed QE, has written a Wall Street Journal op-ed apologizing for the “unprecedented shopping spree.” Huszar worked at the Fed for seven years before leaving for Wall Street. The central bank recruited him back in 2009 to manage “what was at the heart of QE’s bond-buying spree–a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months.” Read more of this post

Boardrooms Rethink Tactics to Defang Activist Investors

NOVEMBER 11, 2013, 5:06 PM

Boardrooms Rethink Tactics to Defang Activist Investors

By DAVID GELLES

Executives and board members used to fear hostile bids above all else. In response, they devised defense mechanisms like poison pills and staggered boards to thwart attacks. Today, hostile deals are on the wane, but a new threat has emerged that has put boardrooms on edge: activist investors. Read more of this post

Larry Summers: In China and India, Beware of ‘Asiaphoria’

November 12, 2013, 2:31 PM

Larry Summers: In China and India, Beware of ‘Asiaphoria’

With the top leaders of China’s Communist Party scheduled to release today their economic strategy for the coming decade, they would do well to consider the warning of former U.S. Treasury Secretary Lawrence Summers: Don’t count on fast growth to continue, and don’t get seduced by what he and fellow economist Lant Pritchett dub “Asiaphoria.” Read more of this post

Investors Still Seeking the Perfect China ETF

Investors Still Seeking the Perfect China ETF

It sounds more like a souped-up race car than a fund: the db X-trackers Harvest CSI 300 China A-Shares Fund (ASHR). As the first exchange-traded fund to give U.S. retail investors exposure to hard-to-access China A-Shares, which had been available only to Chinese citizens and a few qualified foreign institutions, it’s generating a lot of buzz. Read more of this post

Flush with fuel despite recently becoming the world’s largest net oil importer, China targets new markets from Africa to Australia

Flush with fuel, China targets new markets from Africa to Australia

4:31pm EST

By Jessica Jaganathan

SINGAPORE (Reuters) – From Africa to Australia, Chinese refiners are exploring new markets to ship surplus oil products such as jet fuel and diesel, putting them on track to compete with global trading houses and refining centers such as Singapore. The switch to being a growing exporter of fuel comes despite China recently becoming the world’s largest net oil importer. The opening of more refineries to process oil has emerged just as the world’s second-biggest economy shifts down a gear so there is less demand for some transport and industrial fuels, which are more sensitive to the pace of growth. Read more of this post

Internet Sows Doubt Over China Reform Plan; “It’s all a bunch of clichés. Looks like this new group doesn’t have what it takes to accomplish actual, meaningful reform.”

November 12, 2013, 9:34 PM

Internet Sows Doubt Over China Reform Plan

China’s Communist Party released the report on its pivotal four-day policy planning meeting in dribs and drabs online on Tuesday evening. Primed by weeks of state media reports promising grand reforms – the party mouthpiece People’s Daily said it “will have an important and far-reaching effect in pushing ahead with socialism with Chinese characteristics” — China’s Internet users were largely underwhelmed. Read more of this post

Even Native Chinese Speakers Aren’t Sure What The Government Said About Market Reform

Even Native Chinese Speakers Aren’t Sure What The Government Said About Market Reform

SAM RO NOV. 12, 2013, 4:50 PM 700 1

China’s ruling Communist Party wrapped up its so-called “3rd Plenum” meetings today. And there wasn’t anything too exciting that came out of it. Early media reports suggested that the China’s leaders wanted the markets to play a bigger role in the economy. But Bank of America Merrill Lynch’s Ting Lu warned that it was extremely unclear if they actually said anything new. From Lu’s note: Not so meaningful semantic change on the role of “market”

The communique changes the role of “Market Economy” from “基础性 (Jichuxing)” (used in the past 20 years) to “决定性 (juedingxing)”. For native Chinese speakers like us with years of intensive training in Chinese (and we did well on the grueling GRE too), we found it very difficult to tell the real difference. Bloomberg translated “ 基础性 (Jichuxing)” to “basic”, but we think it could be translated to “fundamental (foundational)” or “essential” as well. Regarding “决定性 (juedingxing)”, it could be translated to “deciding”, “determining” or “decisive”. We suspect the Chinese people won’t interpret too much from this change. No matter how you interpret it, it’s clearly not a game-changer.

China’s Third Plenum Concludes Big On Promises, Hollow On Actions

China’s Third Plenum Concludes Big On Promises, Hollow On Actions

Tyler Durden on 11/12/2013 08:05 -0500

A few hours ago, the “historic” and “most important ever” (just like ever payrolls report) Chinese plenum concluded. And like everything out of China, it was big on promises and scant on details. Among the numerous assurances of reform, the plenum promised: to deepen reform of the medical system and in the education sector, to speed up free trade zone development, to clear barrier in markets, to deepen national defense and military reform, to reform the income distribution system, reiterated the main role of public ownership and said there would be reform of government-market relations. And all of this would yield results by 2020. Essentially, words so hollow one can’t help but doubt this was merely the latest smokescreen to justify the perpetuation of the status quo, investment-based economy which as the BBG Brief chart below shows, instead of becoming more consumption driven which is what China has been feverishly attempting to achieve, has instead become ever more reliant on consumption. Read more of this post

China Keeps Plan Decisively Vague; Beijing Delivers a Squishy Reform Agenda After a Big Communist Party Meeting, With Promises for More Details Down the Road

China Keeps Plan Decisively Vague

Beijing Delivers a Squishy Reform Agenda After a Big Communist Party Meeting, With Promises for More Details Down the Road

AARON BACK

Updated Nov. 12, 2013 7:24 p.m. ET

The Chinese Communist Party’s secretive meeting has come and gone, but President Xi Jinping‘s economic agenda remains a mystery. Ever since Mr. Xi became China’s top leader last year, investors and business executives have been told to wait until this fall’s so-called Third Plenum to get an idea of what his economic policies will be. Yet the statement that followed the conclusion of this meeting Tuesday didn’t clear the air. Granted, there was one reassuring message that stood out in a verbose communiqué following the conclave: Market forces will play “the decisive role” in allocating resources. Read more of this post

After Long Wind-Up, Xi Delivers Anticlimax; For months, anticipation has been building about a plan to illuminate the way ahead for President Xi’s Chinese rejuvenation. Yet, what emerged was piecemeal and selective

After Long Wind-Up, Xi Delivers Anticlimax

ANDREW BROWNE

Nov. 12, 2013 1:32 p.m. ET

BEIJING—For months now, anticipation has been building in China about a Communist Party meeting that would, it was officially promised, offer up a “comprehensive” plan to illuminate the way ahead for President Xi Jinping‘s goal of national rejuvenation. Read more of this post

Starbucks ordered to pay Kraft $2.76 billion in damages for pulling out early from a distribution deal

Starbucks to Pay $2.76 Billion to Settle Grocery Dispute

Starbucks Corp. (SBUX) said it would pay Mondelez International Inc. (MDLZ) $2.76 billion to settle a dispute over the coffee-shop chain’s bagged coffee business. The payment, ordered by an arbitrator, consists of $2.23 billion in damages and $527 million in interest and attorneys’ fees, Seattle-based Starbucks said today in a statement. The company said it has adequate cash and borrowing capacity to fund the payment and will book it as a charge to its fiscal 2013 operating expenses. Read more of this post

Kmart is introducing a rent-to-own program charging the equivalent of 100-plus percent annual interest, a move into a business that has drawn criticism for hurting low-income consumers

New Kmart Rent-to-Own Program Turns $300 TV Into $415 Buy

Kmart is introducing a rent-to-own program charging the equivalent of 100-plus percent annual interest, a move into a business that has drawn criticism for hurting low-income consumers. The Lease-to-Own program touts instant gratification — customers without credit take a product home right away, make biweekly payments, then decide whether to buy out or return the product. A typical deal could turn a $300 television into a $415 purchase. Sears Holdings Corp. (SHLD), which owns Kmart, debuted a similar program at its namesake stores earlier this year. Read more of this post

H&M Grabs More Control of Asia Factories Amid Bangladesh Unrest

H&M Grabs More Control of Asia Factories Amid Bangladesh Unrest

Three decades after it started doing business with suppliers in Bangladesh, Hennes & Mauritz AB (HMB) is seeking greater control of production in a nation where it is among the largest purchasers of clothing. H&M this year agreed to become the sole client of two factories in Bangladesh and one in Cambodia, helping convince building owners to offer satisfactory conditions and wages, Anna Gedda, H&M’s social sustainability manager, said. Read more of this post

The End of the Tractor Boom

November 12, 2013, 4:48 PM

The End of the Tractor Boom

By Bob Tita

Sales of farm equipment wilted during October, foreshadowing a long-anticipated decline in North American farm machinery demand next year. Retail sales of farm tractors in the U.S. and Canada slipped 1.5% last month from a year ago, according to unit sales figures released by the Milwaukee-based Association of Equipment Manufacturers. Sales of high-horsepower tractors held up, rising 5% against a tough year-ago comparison. But sales of the four-wheel-drive tractors, an expensive tractor used mostly on large farms, dropped 18%. Moreover, sales of harvesting combines crashed 28% from record volumes of a year ago. Read more of this post

Billionaire Mikitani’s Kenko Sues Japan Government on Online Drug Sales Curbs

Billionaire Mikitani’s Kenko Sues Japan Government on Drug Curbs

Kenko.com Inc. (3325), a unit of billionaire Hiroshi Mikitani’s Internet retailer, said it filed a lawsuit against the Japanese government to fight restrictions on the online sale of some drugs. The government’s ban is “unconstitutional,” and the lawsuit was filed at the Tokyo District Court, Rakuten Inc. (4755) unit Kenko said in a stock-exchange statement yesterday. The cabinet approved a bill yesterday that would limit some sales. Read more of this post

Beaujolais Bath Marks Japan as Benchmark for New Vintage; The Japanese turned crazy for the vintage in the late 1980s, when France let bottles of the weeks-old and barely fermented wine be shipped and stored overseas in advance of the release date at midnight on the third Thursday of November

Beaujolais Bath Marks Japan as Benchmark for New Vintage: Retail

Le Beaujolais Nouveau est arrive! Or at least, the inaugural shipment of this year’s batch touched down last week in Japan, the biggest buyer of the fruity red wine. It’s also the first market of note that will begin the business of drinking the stuff in eight days’ time. With Japan accounting for more than half of overseas sales, the scale of post-party hangovers will be a barometer for the central French region’s most famous vintage. While Japanese imports gained 10 percent a year over the past three years, volumes remain about a third off their 2004 peak, and a weaker yen is creating headwinds for this year’s crop. Read more of this post

Essar Billionaires Cut Exports on Refiner Glut: Corporate India

Essar Billionaires Cut Exports on Refiner Glut: Corporate India

Billionaire brothers Shashikant and Ravikant Ruia, who run India’s second-biggest oil refinery, will increase fuel sales at home as capacity additions in China and the Middle East shrink export margins. Essar Oil Ltd. (ESOIL) will reduce overseas sales from its 400,000-barrel-a-day plant as it predicts local demand for gasoline and diesel will rise in the year ending March 31, Managing Director Lalit Kumar Gupta said in an interview. The end of an above-normal monsoon in India will help revive diesel demand in Asia’s second-biggest energy consumer, he said. Read more of this post

Korea Intervention Bets Prompt Aberdeen to Dump Won: Currencies

Korea Intervention Bets Prompt Aberdeen to Dump Won: Currencies

Aberdeen Asset Management Plc dumped its holdings of South Korean won as the nation’s central bank said last month it may intervene to stem the currency’s gains. Aberdeen says it sold the won, the best-performing developing-nation currency since June, at 1,061 per dollar. La Francaise Asset Management, which oversees about $51 billion, cut half its Korean bond holdings on Oct. 30 as officials said they may act to counter the “herd behavior” of speculators. Read more of this post

Scripps Howard News Service, which fed syndicated stories to papers across the U.S. since World War I, plans to shut down, becoming the latest symbol of readers’ shift away from print media.

Scripps Howard News Service Will Cease Operation After 96 Years

E.W. Scripps Co. (SSP)’s Scripps Howard News Service, which fed syndicated stories to papers across the U.S. since World War I, plans to shut down, becoming the latest symbol of readers’ shift away from print media. McClatchy-Tribune Information Services, a joint venture of McClatchy Co. (MNI) and Tribune Co. (TRBAA), will take over Scripps Howard’s clients, according to a statement today. The transition is expected to be completed by January, the companies said. Read more of this post

Zell Says Buyers Lulled Into State of ‘Kumbaya’ by Easy Money

Zell Says Buyers Lulled Into State of ‘Kumbaya’ by Easy Money

The Federal Reserve’s effort to jolt the U.S. economy to life by pumping cash into the financial system is causing price gains on everything from stocks to apartment buildings to outpace growth, according to billionaire real-estate investor Sam Zell. “There is a little bit too much Kumbaya,” in markets today, Zell, founder of Equity Residential, the largest publicly traded U.S. apartment landlord, said today at the Talmage Credit Conference in New York. “The enormous liquidity is distorting values.” Read more of this post

NYSE’s New Boss Says 221-Year-Old Market Must Act Like Startup

NYSE’s New Boss Says 221-Year-Old Market Must Act Like Startup

IntercontinentalExchange Inc. (ICE) completed its purchase of NYSE Euronext at the close of today’s trading session, and its chief executive officer said the deal will usher in a swift shift to a more aggressive culture at the 221-year-old owner of the New York Stock Exchange. Jeffrey Sprecher, the CEO of Atlanta-based ICE, wants the combined entity to act more like a startup than a venerable institution with roots in the 18th century. His new employees should take more risks, adopting an approach that made ICE one of the world’s biggest exchange operators just 13 years after its founding, he said. Read more of this post

Bayer to Lanxess’s Plastic Creations Fail to Rescue Industry

Bayer to Lanxess’s Plastic Creations Fail to Rescue Industry

Plastics makers such as Bayer AG (BAYN) and Lanxess AG (LXS) have created everything from a plastic saxophone that can be played in live concerts to Harley Davidson engine parts made entirely of the synthetic material. The push to introduce new plastic offerings — as new manufacturing techniques allow the replacement of metal, fibers and wood in many products — can’t mask the fact that a drop in demand, coupled with over-optimistic spending on new plants, is prompting Europe’s biggest producers Bayer, Lanxess and Evonik Industries AG (EVK), to cull at least 3,700 jobs. Read more of this post

NYC’s World Trade Tower Opens 40% Empty in Revival

World Trade Center Tower Debuts in Manhattan Leasing Test

The first skyscraper at lower Manhattan’s World Trade Center is set to open with two days of ceremonies to mark the renewal of the area after its destruction by terrorists. When the fanfare subsides, the task will be filling the 40 percent of the tower that’s empty. “We feel a real sense of accomplishment for having made it to this place,” said Janno Lieber, president of the company that built the 72-story 4 World Trade Center, opening tomorrow. It means the site is “really becoming part of New York again.” Read more of this post