Bamboo Innovator

Squandering America’s Debt Advantage; Even if the Debt-Ceiling Crisis Is Resolved, Washington Could Have Tarnished One of Its Most Valuable Assets

Updated October 10, 2013, 8:14 p.m. ET

Squandering America’s Debt Advantage

Even if the Debt-Ceiling Crisis Is Resolved, Washington Could Have Tarnished One of Its Most Valuable Assets

SPENCER JAKAB

Testifying to Congress on Thursday about the debt ceiling, Treasury Secretary Jack Lew stressed that American politicians throughout history “have universally understood the importance of protecting one of our most precious assets, the full faith and credit of the United States.” Despite recent theatrics, it is a safe bet that most of today’s political leaders understand it, too. On Thursday, Washington appeared closer to a resolution, although that remained uncertain, to the political crisis that threatened to force the U.S. to default on its debt. Read more of this post

Sotheby’s, Christie’s Square Off in Test of Strategies; Christie’s Seeks Less Wealthy Customers, While Sotheby’s Targets Millionaires

Sotheby’s, Christie’s Square Off in Test of Strategies

Christie’s Seeks Less Wealthy Customers, While Sotheby’s Targets Millionaires

KELLY CROW, SARA GERMANO and DAVID BENOIT

Updated Oct. 10, 2013 7:51 p.m. ET

For two centuries, the world’s chief auction houses— Sotheby’s BID +1.75% and Christie’s International—have shined a spotlight on everything from pricey vases to Van Goghs. But now, it’s the houses’ own strategies that are getting a closer look. An assault on Sotheby’s management by its largest shareholder, hedge fund Third Point LLC, has called attention to the sharp differences in how the two longtime rivals have gone about boosting sales and their bottom lines. While Christie’s is branching out to appeal to less wealthy people who may prefer to bid for art over the Internet, Sotheby’s has refocused on catering to the millionaires who make up its core customer base. Read more of this post

Top global hedge fund Brevan Howard takes emerging markets hit

Top global hedge fund Brevan Howard takes emerging markets hit

6:12pm EDT

By Matthew Goldstein, Jennifer Ablan and Katya Wachtel

NEW YORK (Reuters) – Brevan Howard Asset Management LLP, one of the world’s largest hedge fund firms with $40 billion in assets, is posting lackluster performance in its flagship fund and heavy losses in its emerging market portfolio. Two people familiar with the numbers said on Thursday that the flagship, the roughly $28 billion Brevan Howard Master Fund, is virtually unchanged for the year as of October 4. The portfolio, the firm’s largest and making macro economic bets, was up about 3.8 percent as of the end of June but has been declining since. Read more of this post

Costs for European chocolatiers have jumped almost a third in the past year because of a surge in key ingredient prices, raising prospects of a further squeeze in margins

Last updated: October 10, 2013 10:56 pm

Chocolatiers face bitter Christmas as cocoa surges

By Emiko Terazono in London

Costs for European chocolatiers have jumped almost a third in the past year because of a surge in key ingredient prices, raising prospects of a further squeeze in margins in a supply scramble ahead of Christmas, Valentine’s day and Easter. Cocoa butter, which provides the melting quality in chocolate, surged almost 70 per cent in the year to August, while milk powder jumped 50 per cent, leading to a 31 per cent rise in the cost of making a bar of milk chocolate, according to commodity data specialists Mintec. Read more of this post

The appeal against convictions in a landmark corruption case is a test for Brazil; green brooms have been used as symbols of protest against political corruption in Brazil

October 10, 2013 7:17 pm

Brazil: Given the brush-off

By Joe Leahy

The appeal against convictions in a landmark corruption case is a test for the country

Copacabana clean-up: green brooms have been used as symbols of protest against political corruption in Brazil

Covered in tattoos, trucker Edilson da Silva is not one to hold his tongue. But even he has to be careful what he says when it comes to the São Paulo state police. Highway officers impounded his removal truck last Saturday in a remote rural outpost on the state’s coastal road because of a problem with a document. “I do the talking here,” one officer barks when Mr da Silva tries to complain that he is being given the wrong information repeatedly about the procedure to “liberate” the truck. It is Wednesday and he is on day five of his quest. The costs mount – lost income, the fee charged for each day the truck remains in the compound and transport to and from the police post – and then there is the fear of being asked for a bribe. Read more of this post

As Jakarta MRT Breaks Ground, Hopes for Reliable Public Transport Rise

As Jakarta MRT Breaks Ground, Hopes for Reliable Public Transport Rise

By Lenny Tristia Tambun & SP/Hotman Siregar on 3:40 pm October 10, 2013.

Governor Joko Widodo officiated the ground-breaking ceremony for the city’s mass rapid transit system on Jalan Tanjung Karang in Dukuh Atas, Central Jakarta, on Thursday morning, ushering in a new era of public transport for a city plagued by gridlock. “Bismillah ir-Rahman ir-Rahim [In the name of Allah, the most beneficent and the most merciful], I declare the MRT groundbreaking to start,” he said at the location. Read more of this post

Singapore capitulates to special inteest group and do not go the way of Australia and the UK to ban product commissions altogether

PUBLISHED OCTOBER 11, 2013

EDITORIAL

Advisers must earn their commissions

FINANCIAL advisers would have heaved a sigh of relief at the Monetary Authority of Singapore’s response to the consultation exercise on the Financial Advisory Industry Review (FAIR) recommendations. Since the FAIR panel convened last year, there was much speculation on whether Singapore would go the way of Australia and the UK to ban product commissions altogether. The regulator’s response to public feedback is measured, clearly seeking to strike a balance between maintaining the viability of an industry where thousands of advisers rely on commissions for their livelihood, and yet seeking to protect retail investors’ interests. The fact that not all the FAIR panel’s recommendations were accepted testifies to just how challenging the balancing act has been – and remains so. Read more of this post

Shanghai’s Zone of Timidity; Capital controls prevent a serious challenge to Hong Kong

Updated October 10, 2013, 7:23 p.m. ET

Shanghai’s Zone of Timidity

Capital controls prevent a serious challenge to Hong Kong.

The main result so far of Shanghai’s “free trade zone,” which opened September 29, has been confusion. The rules governing it remain unclear, no senior leaders showed up for the launch, and most foreign banks are taking a wait-and-see attitude before deciding whether to open branches. The disarray suggests a battle is underway within the Communist Party over financial reform, and that the trade zone is a proxy. Read more of this post

China’s Urban Slowdown; Fewer Chinese are moving to cities, which threatens Beijing’s plan to raise GDP through urbanization

October 10, 2013, 1:25 p.m. ET

China’s Urban Slowdown

Fewer Chinese are moving to cities, which threatens Beijing’s plan to raise GDP through urbanization.

PHILIP BOWRING

The latest International Monetary Fund World Economic Outlook predicts a sustained fall in growth rates in developing countries, including China. But many a China bull continues to find solace in the prospect of stepping up urbanization as a means of sustaining China’s medium-term GDP growth. In principle it is an attractive proposition. Cities have sprung up over the past two decades and, judged by the rise in prices, there is apparently an insatiable demand for housing. Yet demographic shifts, including the slower rate at which young people are moving into cities, threaten to derail China’s grand urbanization plan. Read more of this post

Japan Needs More Brawling Billionaires

Japan Needs More Brawling Billionaires

Japan is being treated to a juicy spectacle as two of its richest and most innovative entrepreneurs brawl in public over Internet market share and visions for the future. But what’s most important about the fight between Masayoshi Son and Hiroshi Mikitani is the example it’s setting. The two men have much in common. They are self-made billionaires who founded game-changing technology companies — Son with mobile-phone carrier SoftBank Corp., Mikitani with e-commerce giant Rakuten Inc. Each is his company’s largest shareholder, fully fluent in English (a rarity in corporate Japan) and U.S.-educated (Son at the University of California at Berkeley; Mikitani at Harvard University). Both are married with two kids. Both make splashy investments in overseas Internet companies (Son in Alibaba Group Holding Ltd.; Mikitani in Pinterest Inc.). Both are sports nuts who own baseball teams. Read more of this post

Anti-government protesters dog Taiwan National Day

Anti-government protesters dog Taiwan National Day

Published on Oct 10, 2013

Activists holding placards with defaced images of Taiwan’s President Ma Ying-jeou march along a street to protest against Mr Ma’s policies during National Day celebrations in Taipei on Thursday, Oct 10, 2013. Thousands of anti-government protesters gathered on the fringes of Taiwan’s carefully choreographed National Day celebrations on Thursday, waving banners and chanting slogans denouncing the policies of Mr Ma.

TAIPEI (AP) – Thousands of anti-government protesters gathered on the fringes of Taiwan’s carefully choreographed National Day celebrations on Thursday, waving banners and chanting slogans denouncing the policies of President Ma Ying-jeou. The large-scale protests against his increasingly unpopular government were the first to dog the normally staid National Day observance since Mr Ma entered office in 2008. Police kept the estimated 10,000 protesters well away from the downtown Taipei plaza where Mr Ma delivered an address calling for Taiwan to improve its economic performance. He shared the podium and on occasion chatted comfortably with legislative speaker Wang Jin-pyng, whom Mr Ma has attempted to oust from both his job and from the ruling Nationalist Party over allegations that Mr Wang pressured prosecutors not to appeal the acquittal on influence peddling charges of an opposition lawmaker. But the attempts have backfired amid charges that Mr Ma colluded with high-level judicial officials to press his case against longstanding rival Mr Wang, and allegations have surfaced that the initial evidence against Mr Wang was gathered by an illegal wiretap conducted by an elite prosecutorial unit.

Hershey Adds First New Brand in 30 Years; Lancaster Caramels Were Launched Initially in China

Hershey Adds First New Brand in 30 Years

Lancaster Caramels Were Launched Initially in China

LESLIE JOSEPHS

Oct. 10, 2013 11:15 a.m. ET

Hershey’s Lancaster caramels first debuted in China.The Hershey Company

NEW YORK— Hershey Co. HSY +2.30%plans to start selling a line of caramels—its first new brand in 30 years—in the U.S. early next year, after launching the product this year in China. The new brand, dubbed Lancaster, is the first from Hershey to have its debut outside of the U.S., the company said Thursday. It started selling them in three Chinese cities in June, as part of an effort to grow its presence there, where candy is becoming more popular. Read more of this post

U.S. Shale-Oil Boom May Not Last as Fracking Wells Lack Staying Power

U.S. Shale-Oil Boom May Not Last as Fracking Wells Lack Staying Power

By Asjylyn Loder October 10, 2013

Chesapeake Energy’s (CHK) Serenity 1-3H well near Oklahoma City came in as a gusher in 2009, pumping more than 1,200 barrels of oil a day and kicking off a rush to drill that extended into Kansas. Now the well produces less than 100 barrels a day, state records show. Serenity’s swift decline sheds light on a dirty secret of the oil boom: It may not last. Shale wells start strong and fade fast, and producers are drilling at a breakneck pace to hold output steady. In the fields, this incessant need to drill is known as the Red Queen, after the character in Through the Looking-Glass who tells Alice, “It takes all the running you can do, to keep in the same place.” Read more of this post

Caesars Woos Gamblers With Wheel Taller Than London Eye

Caesars Woos Gamblers With Wheel Taller Than London Eye

With $23 billion in debt, the most of any U.S. hotel or casino company, Caesars Entertainment Corp. (CZR) wanted to spruce up its stretch of the Las Vegas Strip without dropping a bundle or adding to a glut of rooms in the city. So the owner of Caesars Palace and Planet Hollywood bet its tight expansion budget on a 550-foot Ferris wheel and “party district” right in the middle of the Strip, where 20 million people amble past its eight properties each year. Read more of this post

China’s Latest Move To Unwind A $2 Trillion Investment Product Is Bad News For Chinese Banks; “The key change is to remove an implicit guarantee of principle and yield, in the form of ‘expected return,’ by WMPs”

China’s Latest Move To Unwind A $2 Trillion Investment Product Is Bad News For Chinese Banks

MAMTA BADKAR 32 MINUTES AGO 0

The Shanghai Composite fell 1% on Thursday, with Chinese brokerages taking the biggest hit. Citic Securities, China’s largest brokerage, was down 3.7%. This comes on news that the government wants banks to unwind the controversial wealth management products (WMPs) and switch to asset management plans (AMPs). WMPs make up the $2 trillion powder keg at the heart of China’s banking system. In a quest for higher returns, tons of people have been pouring their wealth into WMPs, which are sold as high yielding,  low-risk investments offering “expected” instead of “guaranteed or promised returns.” This flood of deposits is key reason behind the surge in social financing and banks’ fee income in recent years. WMP holders largely view these as “investments as deposits” according to Bank of America’s David Cui, while in reality they take the hit if the investments go bad. And it is “this perception mismatch” that “prompts banks to seek undue risks when investing ‘other people’s money he writes. This has obviously been unsustainable. In late 2012, we saw investors take to the streets when WMPs they bought from Huaxia Bank soured. AMPs on the other hand will only provide investors with a “possible range of returns,” and they are open-ended. Initially they will only be allowed to invest in direct debt financing instruments (DDFIs) like securitized bank loans and other such assets, that can be traded on China’s interbank market. So what’s the rationale for switching to AMPs? “The key change is to remove an implicit guarantee of principle and yield, in the form of ‘expected return,’ by WMPs,” writes Cui. Read more of this post