Bamboo Innovator

A Record Market Is Not All That It Seems

November 22, 2013

A Record Market Is Not All That It Seems

By FLOYD NORRIS

THE stock market flirted with historical highs this week, with the Dow Jones industrial average trading over 16,000 and the Standard & Poor’s 500 exceeding 1,800 for a time. But are stock prices really at record levels? Adjusted for inflation, the answer would seem to be that they are not. On Monday, the first day the S.&P. 500-stock index traded above 1,800, it closed at 1,791.53. That was 17 percent higher than the peak reached in the spring of 2000, when the country was in the midst of a love affair with technology stocks. Adjusted for inflation, however, it is 14 percent lower than the 2000 close, as can be seen in the accompanying chart. Read more of this post

Activist investor Bill Ackman said he will take his bet against Herbalife Ltd. (HLF) “to the end of the earth” even after losing as much as $500 million on the investment

Ackman Says He’ll Take Herbalife Bet to End of the Earth

Activist investor Bill Ackman said he will take his bet against Herbalife Ltd. (HLF) “to the end of the earth” even after losing as much as $500 million on the investment. Ackman, whose Pershing Square Capital Management LP sold short at least 20 million Herbalife shares last year, was unapologetic about recently reducing the position. He stuck with claims that the company swindles unsophisticated consumers with false get-rich promises using overpriced products, such as vitamins, skin creams and meal-replacement shakes, that hide a pyramid scheme. He said he still is urging U.S. regulators, elected officials and community activists to help shut it down. Read more of this post

Spaniards Abandon Porsche Dreams in Post-Crisis Reality

Spaniards Abandon Porsche Dreams in Post-Crisis Reality

When Hugo Ramos was a teenager in La Coruna in northwest Spain, he dreamed of a good job, his own apartment and a flashy car. After a two-year recession in the country, those goals have been scaled back. “I wish I could buy a Porsche, but for that I would need a full-time job and that’s not going to happen anytime soon,” said Ramos, a 21-year-old unemployed mechanic who works odd jobs like delivering pizzas, lives with his parents and drives a two-decade-old Seat Cordoba sedan. Read more of this post

No, Bitcoin isn’t the Segway of currencies

No, Bitcoin isn’t the Segway of currencies

By Timothy B. Lee, Updated: November 22 at 9:59 am

The Atlantic’s Matthew O’Brien is one of the Internet’s smartest commentators on economic policy. But like a lot of economics writers, he’s been slow to appreciate the disruptive potential of Bitcoin, the Internet’s first completely open payment network. O’Brien says that Bitcoin is the new Segway: a technological marvel that dazzles nerds but will fail to catch on with ordinary consumers. Bitcoin is comically impractical, he suggests: “The people who have bitcoins have no reason to spend them, and the people who don’t have no reason to get them. They don’t want a currency whose value you can’t predict from one hour to the next. They don’t want to buy things anonymously. And they don’t want transactions to be irreversible.” Read more of this post

Some Stock Bulls Tread Lightly Into 2014; Strategists Take Cautious Approach on How Far S&P 500 Can Climb

Some Stock Bulls Tread Lightly Into 2014

Strategists Take Cautious Approach on How Far S&P 500 Can Climb

STEVEN RUSSOLILLO and ALEXANDRA SCAGGS 

Nov. 22, 2013 6:51 p.m. ET

Stock-market strategists, typically a bullish bunch, are taking a cautious approach to 2014. The S&P 500-stock index is heading into the final weeks of 2013 with a 27% gain despite a sluggish global economy, stalling corporate earnings growth and worries about a pullback by the Federal Reserve in its efforts to support the U.S. economy. But even as many strategists expect an improved backdrop next year, and for interest rates to stay low, they are expecting the stock rally to cool significantly. Forecasts center on gains in the mid-to-high single-digit percentages for the S&P 500 in 2014. Read more of this post

Dealer Fees for Arranging Car Loans Are Drawing Scrutiny From U.S.

NOVEMBER 22, 2013, 11:08 AM

Dealer Fees for Arranging Car Loans Are Drawing Scrutiny From U.S.

By RACHEL ABRAMS

Updated, 3:13 p.m. | When Pedro Lantigua, a 32-year-old truck driver from Oklahoma City, decided to trade in his vehicle last summer, he walked into his local dealership and drove off with a brand-new Chevrolet Silverado. Like millions of Americans, he agreed to a loan arranged by the dealer. Unlike most buyers, Mr. Lantigua actually knows how much he spent on that service, but only because the details came out when he sued the dealer for breach of contract related to his trade-in. Read more of this post

Curious tale of the central Asian oligarchs and the City of London

Curious tale of the central Asian oligarchs and the City of London

Mining firm ENRC bids farewell to the Stock Exchange but its Uzbek and Kyrgyz creators are here to stay

Simon Goodley and Mark Hollingsworth

The Guardian, Friday 22 November 2013 23.34 GMT

It is May 2010 at Monaco’s vast Le Sporting banquet hall, where 800 guests have responded to an invitation from one of central Asia’s most powerful, and secretive, oligarchs. The host has packed the venue’s gardens with white roses and arranged for entertainment from the singer Jennifer Lopez and French DJ David Guetta. Several guests execute an impromptu lezginka, a traditional dance from the Caucasus, and a crowd forms to shower them with $100 and €100 bills, a sign of the donors’ respect, which is then paid to the musicians. Read more of this post

Counting the cost of currency risk in emerging bond markets

Counting the cost of currency risk in emerging bond markets

Fri, Nov 22 2013

By Sujata Rao

LONDON (Reuters) – Once a source of rich returns for yield-hungry investors, emerging markets are hammering home a long-ignored truism: banking on currency strength to enhance returns on stocks and bonds is not a one-way ticket to profits. Currencies such as the rupiah and lira have slumped 10-20 percent this year as a seismic shift in global capital flows rattles even relatively robust markets, exacerbating international investors’ losses on the underlying assets. Read more of this post

Bubble or not, maybe the all-powerful Federal Reserve isn’t so all-powerful after all

Bubble or not, maybe the all-powerful Federal Reserve isn’t so all-powerful after all

By Zachary Karabell, Saturday, November 23, 10:24 AM

Toward the end of her Nov. 14 confirmation hearing to be the next chair of the Federal Reserve, Janet Yellen faced a question from Sen. Mike Johanns (R-Neb.) about the effect of years of easy-money policies at the Fed: “Here’s what I’m saying. . . . I think the economy has gotten used to the sugar you’ve put out there. And I just worry you’re on a sugar high.” Yellen, who has been vice chair of the central bank since 2010, was not given time to address the charge, but her prominent role in supporting such policies gives us a strong sense of her answer. Read more of this post

Wall Streeters Are Starting To Pass Around This Chart Showing The Market On The Cusp Of A Big Crash

Wall Streeters Are Starting To Pass Around This Chart Showing The Market On The Cusp Of A Big Crash

JOE WEISENTHAL NOV. 22, 2013, 5:49 AM 24,700 37

Dan Greenhaus of BTIG (@danBTIG) includes this chart in his latest nightly email. It shows the current market aligned with the market in the days before the Depression. What does the chart mean? Dan has the best take: Indeed, we recently devoted an entire conference speech to pushing back on the idea of an equity bubble. How do we know the story remains? The chart below, overlaying the S&P 500 today against equities in the 20s/30s is now starting to make the rounds. Without getting too personal, “chart overlaying” is lazy and this is no less so. But it does remind us that as much as everyone thinks everyone else is “all bulled up,” these views still persist and have shown no indication they are going away any time soon. This is the crucial thing, which Dan nails. It’s not that the chart has any predictive value. It’s just interesting that everyone’s passing it around. 

South Korea’s major conglomerates saw their profitability deteriorate sharply this year

Top 10 conglomerates suffer sharp margin erosion

2013.11.21 17:59:19

South Korea’s major conglomerates saw their profitability deteriorate sharply this year. Even the top-notch conglomerates, including the biggest Samsung Group and second-biggest Hyundai Motor Group, posted weaker operating margins. 83 listed subsidiaries except financial firms under the top 10 conglomerates by assets excluding public firms made 36.3 trillion won ($34.2 billion) in operating profit on an individual basis in the first three quarters this year, down 4.7 percent from 38.1 trillion won a year ago, according to corporate information provider Chaebul.com and electric notice system of Financial Supervisory Service Thursday.  Read more of this post

Korean tire makers are challenging top-tier rivals such as Bridgestone and Michelin as they continue to supply more tires to German premium carmakers

2013-11-22 17:59

Tire makers challenge global majors

By Choi Kyong-ae

Korean tire makers are challenging top-tier rivals such as Bridgestone and Michelin as they continue to supply more tires to German premium carmakers. The most recent achievement in line with this was a deal signed by Hankook Tire with Mercedes to provide ultra high-performance tires for the German marque’s S-Class luxury sedan which went on sale in Europe from September. Read more of this post

Sugar mills in India, the world’s largest producer after Brazil, are betting on government subsidies to end the biggest industry shutdown in the nation’s history and stem losses at companies

Sugar Mills Seek State Aid to End Worst Impasse: Corporate India

Sugar mills in India, the world’s largest producer after Brazil, are betting on government subsidies to end the biggest industry shutdown in the nation’s history and stem losses at companies. Mills in Uttar Pradesh, the state that is India’s biggest cane producer, will call off the shutdown only if the government agrees to pay part of the cane price to growers, M. Srinivaasan, president of the Indian Sugar Mills Association, said in a phone interview yesterday. Bajaj Hindusthan Ltd. (BJH) and Balrampur Chini Mills Ltd. (BRCM) are among those that want the state to bear about 20 percent of the cane costs, he said. Read more of this post

Fosun Pharma Rebounds After Denying Chairman Arrest Rumors

Fosun Pharma Rebounds After Denying Chairman Arrest Rumors

Shanghai Fosun Pharmaceutical Group Co. (2196), a maker of modern drugs and traditional Chinese medicine, rebounded in Shanghai trading after the company’s parent denied speculation that its Chairman Guo Guangchang had been detained. The rumors are “unfounded,” parent Fosun International Ltd. (656) said in an e-mailed statement. The company will take all necessary steps to get to the bottom of the situation, according to the statement, which cited Guo. Fosun Pharma shares traded 3.1 percent lower at 18.04 yuan as of 2:41 p.m. local time, after earlier tumbling as much as 10 percent, the worst intra-day slide since October 2009. “The rumor of the chairman being arrested is probably the main reason affecting the company’s shares,” said Sam Chi Yung, a strategist at Delta Asia Securities Ltd. in Hong Kong. “This kind of rumor affects stock prices quite a lot.” The 21st Century Business Herald reported the rumors that Guo had been barred from leaving Hong Kong on its website. Guo was in Beijing visiting China Datang Corp. Chairman Chen Jinxing today, the company posted on its official Weibo page after the rumors surfaced.

Natasha Khan in Hong Kong at +852-2977-4630 or nkhan51@bloomberg.net

Chinese tycoon eyes property assets to save struggling shipbuilder

Chinese tycoon eyes property assets to save struggling shipbuilder

12:03am EST

By Yimou Lee and Umesh Desai

HONG KONG (Reuters) – An offer by the billionaire owner of Glorious Property Holdings Ltd (0845.HK: Quote,Profile, Research, Stock Buzz) to take the company private for HK$4.57 billion($589 million) is seen as an effort to save a struggling shipbuilder he founded that is laden with debt. Zhang Zhirong’s offer came late on Thursday, just hours after the shipbuilder he founded, China Rongsheng Heavy Industries Group (1101.HK: Quote, Profile, Research, Stock Buzz), said a unit had received a claim from a local government seeking at least 1 billion yuan ($172 million) for an alleged breach of contract, among other things. Read more of this post