Bamboo Innovator

Washington’s Worst Mistake of 2014? Veteran regulators warn against making asset managers too big to fail.

Washington’s Worst Mistake of 2014?

Veteran regulators warn against making asset managers too big to fail.

Dec. 16, 2013 7:19 p.m. ET

Some consequences of government action remain largely unforeseen until a moment of crisis. That will not be the case if Washington regulators forge ahead on a misguided attempt to treat every large financial firm like a bank. Read more of this post

The Top Post On Reddit’s Bitcoin Page Is A Suicide Hotline Phone Number

The Top Post On Reddit’s Bitcoin Page Is A Suicide Hotline Phone Number

ROB WILE

DEC. 18, 2013, 12:15 PM 3,549 9

Bitcoin is down 25% in the past 24 hours on USD exchanges, to an average of $559. As a result, redditors decided to perform a public service by “stickying” — artificially boosting the profile of — a post linking to a suicide hotline phone number. This is also the No. 5 post on reddit overall. Check it out:

The Threat to Mandela’s Economic Legacy

The Threat to Mandela’s Economic Legacy

By Mike Cohen December 12, 2013

Nelson Mandela, who died on Dec. 5, emerged from 27 years in prison in 1990 pledging to seize South Africa’s mines and banks. Instead, his government slashed spending and courted foreign investors, paving the way for the longest period of growth in the country’s history. “Only a Mandela could have realigned the African National Congress’s economic policy from the mindset of the 1950s to the world of the 1990s and beyond,” says Robert Schrire, a politics professor at the University of Cape Town. “He recognized that for the poor to prosper, the rich had to feel they had a future in the country.” Read more of this post

The Hidden Danger in Public Pension Funds; Their investments expose government budgets and taxpayers to 10 times more risk than in 1975

The Hidden Danger in Public Pension Funds

Their investments expose government budgets and taxpayers to 10 times more risk than in 1975.

ANDREW G. BIGGS

Dec. 15, 2013 6:26 p.m. ET

The threat that public-employee pensions pose to state and local government finances is well known—witness the federal ruling earlier this month that Detroit’s pension obligations are not sacrosanct in a municipal bankruptcy. Less well known is that pensions are larger and their investments riskier than at any point since public employees began unionizing in earnest nearly half a century ago. Read more of this post

The Gatsby Curve: How Inequality Became a Household Word

The Gatsby Curve: How Inequality Became a Household Word

By Brendan Greeley December 12, 2013

Alan Krueger stuck his head into the office in Washington, D.C., where the Council of Economic Advisers keeps its pool of research assistants and offered a deal. Krueger, then the council’s chairman, needed a name for a graph. He offered a bottle of wine to the researcher who could come up with the best one. The winner: “The Great Gatsby Curve.” That was in 2011. Krueger admits now that he’s not sure he ever delivered the wine. Read more of this post

Swiss Christmas Trees Feel Chill as Franc Helps Rivals

Swiss Christmas Trees Feel Chill as Franc Helps Rivals

By Patrick Winters – Dec 19, 2013

For 50 years, Alfred Spaltenstein and his family have grown Christmas trees at their farm outside of Zurich. Now the strong Swiss franc is threatening to spoil his festive spirit. Read more of this post

Spanish Defaults Surge as Banks Forced to Come Clean: Mortgages

Spanish Defaults Surge as Banks Forced to Come Clean: Mortgages

By Sharon Smyth and Charles Penty – Dec 18, 2013

Liliana Proano Males won’t be decorating her house in Madrid this Christmas because she’s about to lose it. Males and her husband, who was fired from his job during the depths of the financial crisis in 2009, can no longer afford their mortgage. With Spain’s persistently high unemployment rate now at 26 percent, the couple is among the 350,000 homeowners who may be foreclosed upon by lenders in the next two years as the housing crisis worsens, according to AFES, a Madrid-based association that advises on restructuring debt. Since 2008, about 150,000 families have been hit with a foreclosure. Read more of this post

Secret Inside BofA Office of CEO Stymied Needy Homeowners; “I can’t believe Bank of America was allowed to do the horrible things it did to me and others.”

Secret Inside BofA Office of CEO Stymied Needy Homeowners

Isabel Santamaria thought she finally caught a break in her effort to save her Florida home from foreclosure after nine frustrating months: She reached Bank of America Corp.’s Office of the CEO and President. Read more of this post

Russia to Get Tough on Shadow Economy; Central Bank Cracking Down on Institutions That Engage in ‘Dubious Financial Operations’

Russia to Get Tough on Shadow Economy

Central Bank Cracking Down on Institutions That Engage in ‘Dubious Financial Operations’

ANDREY OSTROUKH

Dec. 18, 2013 9:26 a.m. ET

MOSCOW—The Bank of Russia will seek to rein in the county’s shadow economy by purging “illegitimate” banks in an effort to reduce billions of dollars in capital outflows, central bank chairwoman Elvira Nabiullina said Wednesday. Read more of this post

Robust Auditor Reports Lure Investors: PCAOB Audit Chief; But CFOs have felt that auditor reports shouldn’t say more than that their companies’ financials were reported fairly

December 12, 2013

Robust Auditor Reports Lure Investors: PCAOB Audit Chief

But CFOs have felt that auditor reports shouldn’t say more than that their companies’ financials were reported fairly.

David M. Katz

While CFOs have opposed proposals to make auditor reports more than pass-fail check-offs of company financials, adding information to the report could attract capital markets investment, the chief auditor of the Public Company Accounting Oversight Board contends. Read more of this post

Promise – and potential – in Israel; Ari Shavit offers an unvarnished but optimistic assessment of his homeland

Promise – and potential – in Israel

December 12, 2013: 7:42 AM ET

Ari Shavit offers an unvarnished but optimistic assessment of his homeland.

By David Whitford, editor-at-large

FORTUNE — For my first trip to Israel I prepared three ways. First I watched NationalGeographic’s IMAX movie, Jerusalem,  which helped me get my bearings. Next I reread Thomas Friedman’s 1989 classic, From Beirut to Jerusalem — still a terrific introduction to the region’s cast of characters (and a gripping foreign correspondent’s memoir to boot). Finally I followed Friedman’s advice to President Obama and Israeli Prime Minister Benjamin Netanyahu, and I read Ari Shavit’s just-published bestseller, My Promised Land: The Triumph and Tragedy of Israel. Read more of this post

NYC Taxi Drivers See Green as New Cabs Cruise to Brooklyn

NYC Taxi Drivers See Green as New Cabs Cruise to Brooklyn

Six coats of DuPont GS028 paint did more than change Porfirio Valdez’s 2006 Lincoln Town Car from black to the color of a green apple. The new look almost doubled his income, too. Read more of this post

Norway Business Group Sees Long Effort to Rebuild Investor Faith

Norway Business Group Sees Long Effort to Rebuild Investor Faith

Norway will need years to smooth out the damage caused by unexpected cuts to gas pipeline tariffs and the withdrawal of support for its export credit lender, according to the head of its biggest business group. Read more of this post

Misleading CEO Pay-for-Performance Numbers Target of SEC

Misleading CEO Pay-for-Performance Numbers Target of SEC

With its stock price depressed and shareholders objecting to how much its top officers were paid, Weatherford International Ltd. (WFT) worked to show that its chief executive officer was sharing the pain. Read more of this post

Jim Rogers On “Buying Panic” And Investments Nobody Is Talking About

Jim Rogers On “Buying Panic” And Investments Nobody Is Talking About

Tyler Durden on 12/18/2013 19:22 -0500

Submitted by Nick Giambruno via Doug Casey’s International Man, 

I am very pleased to have had the chance to speak with Jim Rogers, a legendary investor and true international man. Jim and I spoke about some of the most exciting investments and stock markets around the world that pretty much nobody else is talking about. You won’t want to miss this fascinating discussion, which you’ll find below.

Nick Giambruno: Tell us what you think it means to be a successful contrarian and how that relates to investing in crisis markets throughout the world.

Jim Rogers: Well, there are two aspects of it. One is being a trader, being able to buy panic, and nearly always if you are a trader or an investor, if you buy panic, you are going to do okay. Read more of this post

Gold Town Turns to Dust as Metal Decline Shutters Mines

Gold Town Turns to Dust as Metal Decline Shutters Mines

A half-dozen unemployed workers from the Blyvooruitzicht gold mine southwest of Johannesburg finish off the last scraps of a slaughtered cow in the searing October heat. Since losing their jobs in August, meals have become much less predictable. Read more of this post

Gold Funds See Unprecedented 31% Slump With World Losing Faith

Gold Funds See Unprecedented 31% Slump With World Losing Faith

Investors are dumping gold-backed exchange-traded products at the fastest pace since the securities were created a decade ago, mirroring the steepest price drop in 32 years. Read more of this post

Gold Drops Below $1,200 an Ounce for First Time Since June

Gold Drops Below $1,200 an Ounce for First Time Since June

Gold fell below $1,200 an ounce in London and New York for the first time since June as an improving U.S. economy prompted the Federal Reserve to cut stimulus and reduced demand for precious metals as alternative assets. Read more of this post

FINANCE PROFESSOR: Bitcoin Will Crash To $10 By Mid-2014

FINANCE PROFESSOR: Bitcoin Will Crash To $10 By Mid-2014

MARK T. WILLIAMS, CONTRIBUTOR DEC. 17, 2013, 5:18 PM 64,400 159

Bitcoin was above $1,200 a few weeks ago. Today it’s worth around $610. In Bitcoin World, a week can be the equivalent of a decade. At the start of December, Bitcoin topped out at over $1,200 as e-currency evangelists trumpeted the endless possibilities to be unleashed, comparing it to the breakthroughs not achieved since the start of the internet revolution.  Bitcoiners claimed market disruption would bring credit card companies and payment platforms such as Western Union to their knees.  Some even claimed that Bitcoin would supplant the U.S. dollar as the new global reserve currency.  Adding more helium to the story, the Winklevoss twins of Facebook fame, not being shy about talking up their own book, predicted prices would rise to a staggering $40,000 per coin. Read more of this post

Fidelity Plants Flag in Hedge-Fund Turf; Fidelity Investments launched two “event-driven” mutual funds, the latest foray by the firm into a sector traditionally dominated by hedge funds

Fidelity Plants Flag in Hedge-Fund Turf

JOE LIGHT

Dec. 18, 2013 7:10 p.m. ET

Fidelity Investments launched two “event-driven” mutual funds, the latest foray by the firm into a sector traditionally dominated by hedge funds. The launch on Wednesday of the Fidelity Event Driven Opportunities Fund and Fidelity Advisor Event Driven Opportunities Fund comes as alternative funds continue to pull in a record amount of investor cash. This year through November, alternative funds have taken in $88.55 billion, according to research firm Morningstar Inc., MORN -0.43% up from $18.34 billion in all of last year. Read more of this post

Fed’s $4 Trillion Assets Draw Lawmaker Ire Amid Bubble Concern

Fed’s $4 Trillion Assets Draw Lawmaker Ire Amid Bubble Concern

The Federal Reserve’s balance sheet is poised to exceed $4 trillion, prompting warnings its record easing is inflating asset-price bubbles and drawing renewed lawmaker scrutiny just as Janet Yellen prepares to take charge. Read more of this post

Farewell to the Age of Free Trade

Farewell to the Age of Free Trade

By Joshua Kurlantzick December 12, 2013

Since the end of World War II and the birth of the modern global economy, business leaders have come to accept an iron law: International trade always expands faster than economic growth. Between the late 1940s and 2013, that assumption held true. Trade grew roughly twice as fast as the world economy annually, as fresh markets opened up, governments signed free-trade pacts, new industries and consumers emerged, and technological advances made international trade cheaper and faster. Read more of this post

The Inside Story of GM’s Comeback and Mary Barra’s Rise

Exclusive: The Inside Story of GM’s Comeback and Mary Barra’s Rise

By Tim Higgins and Bryant Urstadt December 12, 2013

Dan Akerson, the chairman and chief executive officer of General Motors (GM), arrives at the company’s Technical Center on Nov. 13 to address about 1,000 engineers and designers. The sprawling, multibuilding campus in Warren, Mich., is about 15 miles north of downtown Detroit and includes a planetarium-like laboratory for studying secret prototypes under shadowless lighting. The helicopter landing pad used by former Vice Chairman Bob Lutz, the self-appointed king of the “car guys,” is here, too. The Tech Center isn’t GM’s headquarters, though it almost was: In 2009, GM was ready to move to Warren, abandoning downtown Detroit to the hustlers and hockey fans before political considerations scuttled the plan. Read more of this post

European Banks Dump Massive Amounts of Subordinated Debt on Investors ; Big rise in subordinated debt issuance by EU banks

December 17, 2013 6:34 pm

European Banks Dump Massive Amounts of Subordinated Debt on Investors ; Big rise in subordinated debt issuance by EU banks

By Christopher Thompson

Europe’s banks are preparing for the possibility their creditors could face losses in the event of bank failure by issuing bumper amounts of subordinated bonds designed to absorb losses. Read more of this post

European Banks Aren’t as Healthy as Investors Think

European Banks Aren’t as Healthy as Investors Think

By Erin Davis | 12-16-13 | 06:00 AM | Email Article

As the European Central Bank prepares to complete yet another stress test of the European banks, we question whether it is focusing on the right metrics. Given the significant increase in the sector’s stock prices over the past 16 months, we think investors might be too optimistic as well. We acknowledge that the banks are in better shape than they were, as the average core Tier 1 ratio has improved to 13.5% from 10% in 2010. However, we caution that European banks’ unweighted capital ratios have not improved nearly as much as headline regulatory capital levels would lead one to believe. For example, one more relevant measure (tangible common equity/tangible common assets) shows that the majority of European banks fail to meet a reasonable 5% standard. Shell-shocked investors who think brighter days are here again for European banks should be more wary. Read more of this post

EU Banks Shrink Assets by $1.1 Trillion as Capital Ratios Rise

EU Banks Shrink Assets by $1.1 Trillion as Capital Ratios Rise

By Ben Moshinsky – Dec 16, 2013

European Union banks have shed more than $1.1 trillion of assets since the end of 2011 in a shift away from risky investments such as asset-backed debt as regulators push lenders to shore up their balance sheets. Read more of this post

End of QE will test diversification faith

End of QE will test diversification faith

By Ewen Cameron Watt

Equities and bonds may no longer diversify portfolio risk

Diversification, the great free lunch of investing, is often taken for granted by investors. Bonds and equities have acted as effective portfolio diversifiers for much of the new millennium because of their different return and volatility patterns. Two of the three main assets in a typical portfolio, cash being the third, moved in opposite directions during financial crises such as 2001 and 2008. Read more of this post

Emerging nations produce more electronic waste than the West; By 2017, the annual piles of waste would be the weight equivalent of 200 Empire State Buildings or 11 Great Pyramids of Giza

Emerging nations produce more electronic waste than the West

OSLO — China and other emerging economies have overtaken Western nations in dumping old electronic goods, from television sets to mobile phones, and will lead a projected 33 per cent increase in the amount of waste from last year to 2017, a United Nations-backed alliance said in a report yesterday.

BY –

5 HOURS 7 MIN AGO

OSLO — China and other emerging economies have overtaken Western nations in dumping old electronic goods, from television sets to mobile phones, and will lead a projected 33 per cent increase in the amount of waste from last year to 2017, a United Nations-backed alliance said in a report yesterday. Read more of this post

Developing countries lost nearly US$1 trillion to fraud, corruption and shady business transactions in 2011, vastly outpacing the foreign aid they received and the pace of dirty money leaving emerging nations is accelerating

Updated: Friday December 13, 2013 MYT 7:53:26 AM

Developing nations lose US$1tril

WASHINGTON: Developing countries lost nearly US$1 trillion to fraud, corruption and shady business transactions in 2011, vastly outpacing the foreign aid they received and the pace of dirty money leaving emerging nations is accelerating, a new report found. Read more of this post