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Play has begun in London. First up, we have Roger Federer taking on Jo-Willy Tsonga on Centre Court, and Novak Djokovic taking on Bernard Tomic on Court 1. When the Federer/Tsonga match is over, Andy Murray takes on Feliciano Lopez. And when Djokovic/Tomic is done, Rafael Nadal takes on true American patriot Mardy Fish. Should be a fun morning and afternoon. Here are a few storylines to keep an eye on: - Will Nadal’s foot hold up? Rafa’s uncle told ESPN that his nephew’s foot is “100 percent fine.” But he had an MRI yesterday, and we don’t really know how it will affect him until he’s on the court.
- Will the Big Four make it back-to-back semifinals? It’d make for an absolutely crazy Friday in London, with Federer-Djokovic and Murray-Nadal.
One last thing, keep an eye on Tomic. We have four massive underdogs today. Three of them are known quantities. Tomic is not. And that makes him the best bet to pull an upset. Check in for updates throughout the morning. Please follow Sports Page on Twitter and Facebook. Join the conversation about this story » See Also:
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Update: Greece has passed its controversial austerity vote with 155 out of 300 members of parliament voting YES. The vote comes amid huge protests in Athens, and it follows days of questions about whether it would pass. That it did pass means Greece is eligible for another bailout tranche. (Technically there's a second vote tomorrow on implementation of the austerity law, but this was the big one.) Original post: Greek PM George Papandreou is speaking to the Greek Parliament. After a debate, the Greek voting on its huge austerity package has begun. The best place to get real-time results its The Press Project. We'll be updating live here. It is expected to pass, but until it does, pay attention. Keep refreshing for the latest. Update: One ruling party deputy just voted no. Other than that, it's going down party line. Still expected to pass. The voting is up to 55 YES, 43 No. Canceling out the PASOK MP who voted NO, is one ND MP who voted YES. So far nothing too unexpected yes. Update 8:55 AM: "Rebel" MP Robopoulos has voted YES. A major relief. Update 8:58: Another MP who had expected to vote NO has voted yes. This is goint to pass. 9:04: It's getting very close. Another PASOK MP has voted no, but it still looks to pass. 9:05: Every major news source has just reported that the votes are there. Austerity bill passed. 
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Greek PM George Papandreou is speaking to the Greek Parliament. After a debate, the Greek voting on its huge austerity package has begun. The best place to get real-time results its The Press Project. We'll be updating live here. It is expected to pass, but until it does, pay attention. Keep refreshing for the latest.
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Everyone expects Goldman's trading revenues to be ugly this quarter. Credit Suisse has a nice explanation of what went down: Client risk appetite has declined, risky asset prices are lower and client activity levels are considerably weaker.
With respect to asset prices, we believe a flight to safety drove risky assets lower during the June quarter (commodities, high yield debt and mortgage backed securities prices are all down) while prices of safer haven assets (Treasuries and AAA corporates) are mostly improved.
Volatility during the second quarter was mostly lower across asset classes, with FX and crude oil being the notable exceptions. Global exchange volumes are mostly lower relative to the first quarter, with currently again being the exception. See Exhibit 8 and Exhibit 9 for a summary of trading market indicators, including asset prices, volatility and volumes.
We believe commodities trading was particularly challenging during the second quarter, as the sharp and persistent decline in asset prices may have hurt dealers with long inventory positions (we assume this to be the default). As an illustration, crude oil price returns have been negative for nearly half of trading days during the quarter and the price decline in early May was over 3x the standard deviation of daily prices over the last three years. 
Note that Goldman shares (pre-today) are at two-year lows. 
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A few months ago, we showed you a pretty awesome light painting project that visually captured invisible Wi-Fi signals around town using a Wi-Fi detecting rod filled with 80 LEDs. With some long exposure photography, the results were pretty amazing. This project was inspired by those crazy Norwegians, but this build lets you do something even more amazing—capture pictures of colorful written text and drawn images, frozen in midair. This project hails from Gavin Smith, an Aussie hardware hacker from the Sydney area, which calls his device LightScythe. The POV (persistence of vision) scythe is an acrylic tube that contains a 2-meter programmable strip of LEDs, and is controlled by a small receiver and battery pack. A laptop computer with a wireless link sends the image data to the scythe at a specified time, making it possible to visualize the invisible network data into some awesome light paintings. By taking 10 to 15 second exposures, he can write colorful (and odd) phrases in front of houses... He can shows his love of pecs at the Sydney Harbour Bridge... And can visualize Pac-Man chasing after those monster ghosts at the Sydney Opera House... And you can, too... LightScythe uses open-source software and can be built from electronics parts available online. Visit the LightScythe project page to see where to get everything and more importantly—how to build your own. More of his light painting pictures can be seen on Flickr. Via Holy Pac-Man! DIY Light Painting Saber Is Pure Awesome on WonderHowTo. Read more posts on WonderHowTo » Please follow SAI: Tools on Twitter and Facebook. Join the conversation about this story »
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Obama calls for 'Patience and Persistence' in Libya Article Summary: The why of the massive bombing of Libya continues to grow more nonsensical. Congress is baffled into paralysis, and our major media stick to the most honorable interpretation— despite evidence to the contrary. —————————— Are you following the growing madness that is Libya policy? We've been harping on this for some time, so if you're a regular visitor to our site, you know all about this. If not, get a primer here, here and here. Last week, we reported on the bizarre insistence by the bipartisan duo of Democratic Senator John Kerry and Republican Senator John McCain that the US Congress needs to authorize US military involvement in Libya for up to a year. Their justification: unspecified but urgent "national security" concerns. This contradicts the original claim that it was humanitarian concerns that motivated the NATO-US involvement—the need to protect Libyan civilians from the forces of Muammar Qaddafi during a supposedly spontaneous uprising. (An uprising which, as we note, was getting a whole lot of help from CIA and the like.) On to the latest insanity: Last Friday, the House of Representatives made an unexpected split decision that only underscores the Looney-Tunes nature of the Libyan debacle. The House rejected a resolution that would have officially authorized the involvement of US troops in Libya. But, on the other hand, it also rejected a tough attempt to restrict funding for the same Libyan adventure. The first bill, let's call it Legislation A, is the House version of what we previously reported was being pushed by Senators Kerry and McCain, and will be taken up by the Senate this week. Here are key parts of Legislation A, the full wording of which you can read here: (a) Authority- The President is authorized to continue the limited use of the United States Armed Forces in Libya, in support of United States national security policy interests, as part of the NATO mission to enforce United Nations Security Council Resolution 1973 (2011) as requested by the Transitional National Council, the Gulf Cooperation Council, and the Arab League. (b) Expiration of Authority- The authorization for such limited use of United States Armed Forces in Libya expires one year after the date of the enactment of this joint resolution. So the House did not go along with Kerry/McCain/Obama, and defeated the bill 123-295. (The Senate is taking up its own version this week). But then the House voted down what we'll call Legislation B, by 180 to 238. It would have barred funds going to support the bombing and other offensive operations, even though it was vaguely worded in such a way that the military could probably interpret at will—and would have allowed intelligence, reconnaissance, and so on. None of the funds appropriated or otherwise available to the Department of Defense may be obligated or expended for United States Armed Forces in support of North Atlantic Treaty Organization Operation Unified Protector with respect to Libya, unless otherwise specifically authorized by law. Bottom line—a majority in the House doesn't want to authorize continued US operations in Libya, but neither does it want to block it outright. The top Republican in the House, Speaker John Boehner, supported what we're calling Legislation B, but 89 of his own Republicans voted against it. What we're seeing is a chaotic bipartisan free-for-all, with some pro-Obama Democrats going along with whatever he wants to do, and some war-oriented Republicans abandoning partisanship and saying, "why sure, bombs away!" Here's what the Washington Post said about it: The two votes highlighted the way that a decade of war has scrambled the politics of foreign policy, and left both parties deeply divided over the Libyan conflict and American warmaking in general. Contrary to this assertion, the two parties are not just "deeply divided." They're terminally confused. In other words, they, like the American people, have absolutely no clear sense of what is at stake, or of why this country is involved in Libya. Things are so bonkers that the Republicans are now a big factor in the anti-war element, and the New York Times is pro-war. In an editorial, the Times argued for Legislation A, and against Legislation B. About the House, it said …There are two main proposals — and a clear choice to be made. We fear they are leaning in a wrongheaded and dangerous direction. About Legislation B, it said …the damage to this country's credibility, and its leadership of NATO, would be enormous. Any sign that the United States is bailing out could lead others to follow. Well, yes, that would be the idea—to encourage an end to the bombing. The Times editorial continues: …It is hard to view this bill as anything but a partisan play to embarrass the president. Or, maybe, its supporters actually think the US has no business bombing the heck out of another country—or intervening for unclear or morally dubious reasons. No consideration of this by The Times: …The one sure victor would be Libya's strongman, Col. Muammar el-Qaddafi, who would see it as a sign that NATO's resolve is faltering and another reason to keep brutalizing his people…We are certain if NATO had not intervened, thousands more Libyans would have been slaughtered. You could say the same thing about other places, like, say, Syria. Or Sudan. Or….(you pick the place). Yet only Libya is invoked. What is perhaps most intriguing here is that the Times is still buying the original raison d'guerre, that this is a humanitarian mission, while Kerry, McCain and others have long moved on to something else—some unspecified urgent, "national security" interest… The Washington Post, like The Times, is still selling this hoary myth, as in this article, which characterizes the House vote as having . . . revealed a Congress that has been fractured by a weary decade of war in Iraq and Afghanistan. The debate over Libya showed that some Republicans and Democrats were fixated on moral questions–what is the American responsibility to defend democracy? Others were preoccupied with fiscal ones. How should the national debt affect a foreign policy built on the idea of America "bearing any burden" for freedom? Thus, like the New York Times, it resolutely ignores the clear statement from Kerry and McCain that the Libyan intervention is essential to American "national security" concerns. At the end of its editorial, The Times does invoke "National Security," but only in a very narrow and peculiar context: Thankfully, some Senate Republicans also seem to understand the importance of the United States following through on its national security commitments. "National security commitments"—represented as being about nothing more than willingness to go along with NATO. No indication of the underlying reasons for what is transparently—but never acknowledged" to be— an invasion to remove a foreign leader. All to be revealed in future books, no doubt. Years from now. GRAPHIC: http://www.csmonitor.com/var/ezflow_site/storage/images/media/images/0525-obama-cameron-libya/10191594-1-eng-US/0525-obama-cameron-libya_full_600.jpg Read more posts on WhoWhatWhy » Please follow Politics on Twitter and Facebook. Join the conversation about this story »
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Well, you have been reading about it almost everywhere: while you were tweeting, while using your email marketing software, or while reading your trade journals. The latest online marketing strategy with the extensive reach of over a hundred million captive prospects is Social Media Marketing. The results of leading research organizations like Pitney Bowes show (in their recent May 2011 survey) that nearly 20% of small to medium businesses prefer the stupendous reach of social media. The power of this new e-marketing tool truly has an impact. The three major marketing tools that SMBs use are: - Email Marketing
- Advertising
- Mobile Marketing
- 25% of SMBs have no marketing strategy
Further research by independent email marketing software firms such as Constant Contact, only reiterates the point that social media marketing is the most popular for small businesses, just behind direct mailing, email marketing and print advertising. Besides, the number of businesses increasing their social media presence with online promos, product information and talk-back spaces has also been substantial over the past year. The top two free emarketing strategies for SMBs Given the statistics, you should leverage email marketing and social media to optimize your business. Here again, there are several products, but expanding at explosive rates is Facebook and looks to be the network with which you should begin. Continuing your email newsletter strategy will help you to interact with clients personally as well as offer customized product details to the client. While social media will give you a live or instantaneous connection with one client (and probably thousands of others, who follow the client) with a single tweet. Take Away Social Media will briefly introduce you and help you reach prospects in a multiple-level- cascading effect at almost 0.01% cost and close to 55% ROI on leads generated. Besides, it is easy to use and is most definitely a mass-reach marketing tool. Read more posts on Ramon Ray & the Smallbiztechnology.com Team » Please follow SAI: Tools on Twitter and Facebook. Join the conversation about this story »
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Gold is higher again today as the Greek debt crisis and continuing strong demand from Asia continues to support prices. The euro is surprisingly firm with the U.S. dollar, Japanese yen and Swiss franc under pressure. Risk appetite remains high with commodities, Asian and European equities higher and peripheral bond markets have received a bid and seen yields fall due to optimism on the Greek vote. 
Cross Currency Rates The governor of the Bank of Greece said overnight that Greece would be committing ‘suicide’ if the parliament does not vote for the harsh austerity and privatizations measures today (1300 GMT). The vote is expected to be close with many Greek parliamentarians and the Greek people feeling that it is unfair to Greece and will only serve to postpone the day of reckoning. 
Gold in Swiss Francs – 2 Years (Daily) Gold and Silver Ownership and Prices Will Not be Affected by Dodd-Frank Legislation on July 15 The 2010 Dodd-Frank Act, and the regulatory legislation associated with it, is due to come into law in just over two weeks on July 15. A number of clients, particularly U.S. clients, have contacted us regarding the possibility that the new legislation could lead to price falls in the gold and silver markets. Some were even concerned that it had implications for their ownership of physical coins and bars and for bullion stored in Western Australia, Switzerland and vaults internationally. Concerns arose due to reports that retail foreign exchange, spread betting and CFD providers are set to discontinue offering their gold and silver over the counter products. These allow speculators to take leveraged positions, short and long, in over the counter derivative products. After July 15, U.S. residents are prohibited from trading these OTC gold and silver derivative products. All precious metal transactions that are leveraged and not delivered in 28 days, must be conducted in a “designated contract market,” a board of trade or exchange designated by the CFTC. Those who own bullion should be reassured that their bullion ownership will not be affected as the legislation does not apply to the physical coin and bar market. The legislation will also not apply to contracts fully paid for or delivered within 28 days, and commodity futures contracts trading on an exchange such as the CME Group CME and the many other international exchanges. With regard to prices, some are concerned that there could be spillover from the OTC derivative market into the futures and physical market. This is because the residual risk from OTC markets is hedged on the various precious metal exchanges. Thus, some are concerned that the unwinding of OTC positions by U.S. residents could put result in falling gold and silver prices. We believe this to be very unlikely. We acknowledge that it may lead to an increase in volatility in the coming days and in the days preceding July 15th. However, the off exchange derivative market is very small when compared to the global physical bullion market (coins, bars and London Good Delivery Bars) and the futures market internationally (New York Mercantile Exchange (NYMEX), COMEX Division; Tokyo Commodity Exchange (TOCOM); Dubai Multi Commodities Centre (DMCC); Shanghai Gold Exchange (SGE) etc.. OTC derivatives are used primarily by retail speculators and are not important from a price discovery point of view. Also, those using these derivatives were not buyers or long exclusively and many will have been shorting the market. Thus the hedging of product providers is likely to be reasonably neutral. In conclusion, gold and silver bullion ownership and prices should not be affected by the upcoming Dodd-Frank legislation. Prices are far more likely to be influenced by central banks increasing favorability towards gold as a reserve asset. UBS reported that gold will be the best performing asset for the rest of the year, citing their survey of sovereign institutions. It showed that the previous intention of central banks to reduce holdings within 10 years has disappeared. The majority of central banks internationally intend increasing allocations to gold. This is not surprising given that the Federal Reserve, the BOE and the ECB are continuing to debase the major reserve currencies. It is also very understandable given increasing concerns about the U.S. dollar remaining the reserve currency of the world. China Gold Imports Surge - Estimated at 200 Tonnes in 2011 YTD; Compared to 250 Tonnes in All of 2010 The Financial Times today confirms surging demand from China. “Some traders estimate that the country may already have imported more than 200 tonnes of gold this year, compared to total imports last year of about 250 tonnes – itself a more than fourfold increase on 2009.” It is safe to assume that the unnamed traders are credible sources as these figures coincide with what industry experts in China and the World Gold Council are saying about surging Chinese gold demand. Central bank demand from China and internationally and investment demand from China, Asia and internationally will ultimately be the primary driver of the gold market in the coming months and possibly years. Government legislation of any nature may impede in the short term but ultimately the law of supply and demand will be the ultimate arbiter of price. Please follow Money Game on Twitter and Facebook. Join the conversation about this story »
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They must think we’re stupid. News that Bank of America is poised to pay an $8.5 billion settlement in a claim by investors that the firm and a predecessor sold packages of loans/securities which did not meet standards and provide proper disclosures is a joke. Regrettably the joke is on us, that is, the citizens of this great land. $8.5 billion may be a lot of money but what price warrants real justice? I believe very strongly that real justice is never bought in terms of a mere financial settlement. Real justice does not come with the face of Benjamin Franklin. Dare I say, Ben and the boys would be retching right about now learning of the practices within the financial system and the “supposed” justice dispensed in the form of this settlement. Where is the admission of fraud in the settlement? We are supposed to believe that a firm can make an $8.5 BILLION settlement but there was no fraud? Are you kidding me? We are supposed to believe that this settlement can serve as a precedent for other financial institutions to cut similar deals? These institutions can borrow funds from the Federal Reserve at 0% and leverage those funds so who really pays this settlement? The American taxpayer in the form of a wealth redistribution into the financial system. Settlement? Real justice? Bulls&$t!! For those in the crowd who may think we need to move forward, put this mess in the rear view mirror, and try to heal our economy, I assure you the real price of justice neglected and justice denied comes in the form of capital flight. Why is it that trading volumes in so many market segments are declining precipitously? For the very simple reason that when capital is not protected and real justice is not dispensed then investors will take their capital elsewhere. Again, $8.5 billion may be a lot of money but let me assure those in Washington and on Wall Street that real justice can not be bought. Real truth and total integrity are NEVER for sale in the court of public opinion. Those virtues are embraced only in the form of total accountability and transparency. Regrettably we witness little of these prized virtues in the canyons on Wall Street and the halls on Capitol Hill. When will Wall Street and Washington wake up and realize that while many in our nation may be easily duped, the American public as a whole is NOT stupid. Larry Doyle Isn't it time to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook? Please get your friends and colleagues to do the same. Thanks!! I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved. Read more posts on Sense on Cents » Please follow Clusterstock on Twitter and Facebook. Join the conversation about this story »
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Treasury yields are currently way too low, and should be between 3.5% and 4.1% on the 10-year, according to Societe Generale's Aneta Markowska. Markowska believes that on a fundamental basis, treasuries should be in this range. However there are a number of reasons why yields are currently so low: - The Greek crisis pushing investors into risk off positions
- QE impacting the yield
- Pessimistic views on the economy from U.S. investors
However, if things turn around in H2, as Markowska expects, we're likely to get a rise in yields. From Aneta Markowska: If anything, we see upside risks to our fundamentally- derived fair values for Treasury yields. Core inflation has been normalizing much faster than expected and many businesses seem keen on passing through cost hikes. Whether they are successful or not remains to be seen but the desire to raise prices seems stronger than we have seen in years. The rental market is also getting tight and the housing component could push core CPI further up. Lastly, the inflationary pressures in China could also start showing up in US import prices. Though we do not anticipate the end of QE2 to have a meaningful impact on yields, the transition to price- sensitive buyers could exacerbate any moves tied to stronger economic data. We look for the 10-year yield to reach 3.50% by the end of Q3, which would put it at the lower end of our fundamental range. There are, of course, other factors that could drive treasury yields higher. If the Greek situation is resolved, the eyes of world markets may turn to the U.S. debt ceiling debate. Risk that that could escalate into a default scenario may not have been priced in yet. As such, investors could react to that concern. Or, conceivably, any post Greek resolution rise in treasury yields could be construed as markets being concerned about the U.S. debt situation, when it is actually just a return to risk on. Don't miss: The 19 cities where the housing crash keeps getting worse and worse > Please follow Money Game on Twitter and Facebook. Join the conversation about this story » See Also:
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The roller coaster ride for China stocks on Wall Street continues, with some firms subject to intense sell offs based on nothing more than rumors that unfavorable reports from research firms are in the offing. You’ve seen the names in the news: Sino-Forest, Yurun Food Group, Spreadtrum. Seems like there’s a new story every day with fresh accusations that are later vehemently denied by the companies in question, who are often armed with reams of financial data. In a summary piece out today, Reuters reports: The accounting troubles and short-selling attacks hitting China-based companies are creating fertile ground for the rumour mill to flourish, with some shares hammered by chatter rather than actual evidence. Such stock swings have created a dangerous climate for even strong Chinese companies and put regulators on high alert for market manipulation. How did this happen? One can go through the list of companies that have been “outed” by analysts in recent months, but taking a step back and looking at the trends, I think it all comes down to transparency. (Apologies for stating the obvious, but although I have written about this subject several times, I have yet to sum up how we actually got here.) I’ve been writing a lot recently about suspect legal structures and the way that investors tend to ignore potential risks. Yes, the onus was on the investors to investigate those structures before pulling the trigger on deals, but to be fair, these listed companies did whatever they could to obscure these (and other) risks in their disclosure documents. U.S. securities laws grant firms a decent amount of wiggle room in that regard. Add to that murky accounting practices and inadequate corporate governance, and you can see why many investors were suckered in, desperately wanting to cash in on the China growth story. At this point, let me throw out a few cliched sayings/quotes: you live by the sword, you die by the sword; hoist on his own petard; what goes around, comes around. Enough? How about this: if you give an optimist a box and tell him there is a surprise inside, he will conjure up images of all sorts of goodies. If you repeat the exercise with a pessimist, he might imagine what sort of dangerous creature might leap out to attack him once it is opened. The market has recently gone from being wild-eyed optimist to skittish pessimist. These companies have benefited from being opaque, with China bull optimists helping to push some valuations to laughable territory. But the market’s confidence was based on imperfect information, on data and opinions that were not sufficiently researched. Now that questions are being asked, that lack of transparency is coming back to haunt these firms. This too shall pass, and an equilibrium will be reached that is hopefully more in line with reality than the current psychology of the China optimists and pessimists. In the long run, though, only greater transparency will protect these firms from this sort of volatility, which is based on nothing more than the hopes or fears of what’s inside that box. Read more at China Hearsay. You can also follow me on Twitter and Facebook. Please follow SAI on Twitter and Facebook. Join the conversation about this story »
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As was originally reported last night, Bank of America is announcing a big settlement over bad mortgages, and that will lead to a big loss this quarter. Here's the key part from the announcement: The agreement includes a cash payment of $8.5 billion to the covered trusts to be made after final court approval of the settlement. Bank of America also intends to record an additional $5.5 billion provision to its representations and warranties liability for both Government-Sponsored Enterprises (GSE) and non-GSE exposures in the second quarter of 2011. ... As a result of the settlement, and other mortgage-related matters, Bank of America expects to report a net loss in the range of $8.6 billion to $9.1 billion in the second quarter of 2011, or $0.88 to $0.93 per diluted share. Excluding the settlement, other mortgage-related charges, and proceeds from asset sales, the company expects to report net income in the range of $3.2 billion to $3.7 billion in the second quarter of 2011, or $0.28 to $0.33 per fully diluted share. Please follow Clusterstock on Twitter and Facebook. Join the conversation about this story » See Also:
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Good morning. Here's what you need to know. - Asian indices were mixed in overnight trading with the Shanghai Composite down 1.11%. Major European indices are up and U.S. futures indicate a positive open.
- Bank of America has announced a $8.5 billion settlement with investors that include BlackRock Inc. and the Federal Reserve Bank of New York, over claims that mortgage-backed securities it sold failed to meet underwriting requirements and other guidelines.
- BJ's Wholesale Club, Inc. announced that it entered into an all-cash $2.8 billion definitive agreement to be acquired by affiliates of Leonard Green & Partners, L.P. and funds advised by CVC Capital Partners. BJ’s shareholders will receive $51.25 per share for each share of BJ's common stock that they hold.
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Last week, EGShares rolled out a suite of sector-specific emerging markets ETF, each focusing on various corners of the economy of the developing world. These products could obviously be useful to more active traders utilizing a sector rotation strategy in emerging markets, seeking to shift exposure towards corners of the market that maintain promising potential for capital appreciation and away from those that seem overpriced. But some of the most recent additions to the ETF lineup could also be effective tools for those with a longer-term focus, as they allow for the ability to fine tune international equity exposure and construct a more balanced portfolio. The two most popular options for broad-based emerging markets exposure are both linked to the MSCI Emerging Markets Index; EEM and VWO have aggregate assets of close to $85 billion. There’s a lot to like about these funds; the underlying index includes about 800 individual stocks from more than a dozen developing economies, and both products are extremely cost efficient (though VWO is quite a bit cheaper than its counterpart). But there are some biases in these products that might be of concern to some investors. Like many international equity ETFs, they are tilted heavily towards certain sectors of the economy. Because the largest companies in most markets tend to be banks and oil firms, the allocations to the financials and energy sectors have a tendency to dominate the portfolios. These two sectors, along with materials companies, combine to make up about half of the assets in these popular products. At the other end of the spectrum are segments of the emerging markets economy that receive virtually no weighting; utilities account for only about 3% of EEM and VWO, while health care stocks represent a measly 1% of the underlying portfolio [Never Judge An ETF By Its Cover]. Balancing Act For some investors, that tilt towards certain sector may be just fine; the exposure offered is, after all, representative of the economy of the aggregate emerging markets. But others might wish to maintain a more balanced portfolio that limits exposure to any one segment of the economy–especially considering the dependence of energy firms on crude prices and potential volatility within the financial sector. Sector-specific emerging markets ETFs give investors the potential to beef up weights to those corners of the market overlooked by broad-based funds, making them potentially useful complementary holdings for those who achieve the bulk of emerging markets exposure through EEM and VWO: EGShares Health Care GEMS ETF (HGEM) The health care sector in emerging markets represents a tremendous growth opportunity, yet receives almost no weighting in most broad-based emerging markets funds. Much has been made of the positive impact of urbanization on consumer companies; as emerging markets populations move to cities and graduate to the middle class, discretionary income spikes and desire for goods such as televisions, cars, and air travel will also rise. Those same factors could have a positive impact on the health care sector over the long run; higher quality of life and increased wealth will translate into demand for pharmaceuticals, health care providers, and medical supplies and equipment–four health care sub-sector that make up the HGEM portfolio. HGEM includes 30 health care stocks, with the heaviest allocations going to India (39%), South Africa (23%), and China (16%). EGShares Utilities GEMS ETF (UGEM) Similar to their role in many U.S. equity funds, utilities stocks have the potential to bring stability and attractive current returns to an emerging markets portfolio. But unlike their developed market counterparts, emerging markets utilities may also maintain significant growth potential. The rapid growth of urban areas across the emerging world means demand for infrastructure and electricity should continue to skyrocket, creating opportunities for expansion. In China alone, the projected growth figures are staggering. According to a report by McKinsey & Company, more than 350 million people are expected to move to Chinese cities in coming years. That will double the number of cities with at least one million residents to more than 220 and require the construction of tens of thousands of new skyscrapers (by comparison, there are nine U.S. cities with at least one million residents). Other emerging markets in Asia and Latin America are experiencing similar trends–albeit perhaps not on the same scale as China. Most investors who have embraced ETFs have very little in the way of exposure to emerging markets utilities; VWO’s portfolio allocates only about 3% to this segment of the developing world. Those looking to step up this weighting might find this ETF to be a useful tool. UGEM’s portfolio consists primarily of conventional electricity firms (54%) and alternative electricity companies (30%), with the remainder of assets attributable to gas distribution, water, and multiutilities. The fund includes nine different countries; in addition to each of the BRIC bloc, Chile, Colombia, the Czech Republic, Malaysia, and Poland are represented [also see Emerging Markets, Inflation, and ETFs: Q&A With Richard Kang]. [For more ETF ideas sign up for our free ETF newsletter.] Disclosure: No positions at time of writing. Click here to read the original article on ETFdb.com.
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Even a long-term precious metals bull like Cazenove's Robin Griffiths pays attention to the short-term movements. He details his game plan in an interview with King World News. Here's gold: “I think the long-term trend for gold is absolutely in place and the final high is so far higher than we’ve been that there’s nothing to worry about. However, in the short-term it became overbought and it’s very likely to fall back to its 200 day moving average which is in broad numbers $1,400." Silver: "I think in the case of silver, which of course had a huge catch-up move with gold and then had a shakeout after that because it moved far too fast, the low of that correction period is in and I think we’re within days of the correct moment to be buying back into silver again." Miners: "I was in South Africa just the other day where some of the richest holes in the ground exist, but the miners have to go down four kilometers and then along seven kilometers to get to the seam. It can take them two hours out of each working day to get to and from the place where they do the digging. So there’s no way they are going to be making money out of that just yet. The price of bullion needs to go way higher before the stocks themselves start to fly. The day will come when the mining companies take off, but that’s in the future still." More at King World News > Please follow Money Game on Twitter and Facebook. Join the conversation about this story » See Also:
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Real quick update on Greece voting: It's almost certainly going to pass. First of all, one "rebel" MP, Thomas Robopoulos has said he will vote FOR the measure, after hinting last Friday that he would vote against it. And now, an opposition MP -- Elsa Papadimitriou -- just announced that she will vote for the plan. Please follow Money Game on Twitter and Facebook. Join the conversation about this story » See Also:
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Leaders at the NineSigma Conference agreed, Open Innovation is not an option but a competitive necessity. In another article, where Moises Norena, Director of Global Innovation at Whirlpool Corporation mentioned that an innovation in general in a requirement, not an option. Innovation is the path to sustainability and growth. Open innovation is a way to exponentially expand your ability to generate ideas and develop them. Discrepancy To be fully effective and efficient, Open Innovation needs to be integrated in daily operations and management, it needs to integrate the building blocks of an organization, People, Processes and Technology. Though, according to Dr. Frank Piller, Professor of Management and Director of the RWTH Technology and Innovation Management Group, RWTH Aachen University, organizations still lack "Open Innovation readiness". He continues: “One of the learnings was that enabling organizations to succeed with Open Innovation requires passionate, focused Open Innovation leaders, buy-in from employees and management, and realistic time frames and budgets.” Moises Norena is confirming above mentioned in his interview: "This involves the interaction of different people within your organization that will be threatened. You got to be able to show the win and show that there is management of the risks associated with OI. Organizations should also know that OI can provide real benefits but it should be managed in a way that complements with the internal efforts, not as a substitute." and "[...] requires leaders to drive a change in their teams and organize in ways that allow this balance. The second thing I see, that is also very important, is the shift in mentality to do experimentation – this requires a big change because organizations have the tendency to expect the experiments to drive a business results and in fact, they should be designed to learn. That is a big change." If the pre-conditions are right and set, Open Innovation will enable 1) reduce cost, 2) increase output-to-market and 3) faster time-to-market. This is a necessity in order to be and remain competitive within the fast changing environment of parallel and shorter PLC's. Please follow SAI on Twitter and Facebook. Join the conversation about this story »
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Connecticut Gov. Dannel Malloy announced Tuesday he will seek to fire 5,500 state employees and leave 1,000 vacancies unfilled after public employee unions rejected a $1.6 billion concession plan. While a majority of state employees voted to accept a wage freeze in exchange for a guarantee of no layoffs, the vote failed last week when it did not have the majority support of 14 of 15 employee unions. Over 1,000 of the job cuts will come from the state Department of Corrections, the Hartford Courant reported, with nearly a quarter of positions in the Department of Transportation eliminated. The plan comes amid news that Moody's lowered its outlook for the state's bond rating — which dropped to Aa2 last year due to excessive borrowing and unfunded pension obligations. Republican Senate Minority Leader John McKinney criticized Malloy and Democratic legislators for failing to pass fiscal reforms to avoid further downgrade to the state's bond rating. "We missed that opportunity," he said. "Hopefully this news will serve as a wake-up call for Thursday's special session and our actions moving forward." The full list of job cuts is available here. Please follow Politics on Twitter and Facebook. Join the conversation about this story » See Also:
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Connecticut Gov. Dannel Malloy announced Tuesday he will seek to layoff 5,500 state employees and leave 1,000 vacancies unfilled after public employee unions rejected a $1.6 billion concession plan. While a majority of state employees voted to accept a wage freeze in exchange for a guarantee of no layoffs, the vote failed last week when it did not have the majority support of 14 of 15 employee unions. Over 1,000 of the job cuts will come from the state Department of Corrections, the Hartford Courant reported, with nearly a quarter of positions in the Department of Transportation eliminated. The plan comes amid news that Moody's lowered its outlook for the state's bond rating — which dropped to Aa2 last year due to excessive borrowing and unfunded pension obligations. Republican Senate Minority Leader John McKinney criticized Malloy and Democratic legislators for failing to pass fiscal reforms to avoid further downgrade to the state's bond rating. "We missed that opportunity," he said. "Hopefully this news will serve as a wake-up call for Thursday's special session and our actions moving forward." The full list of job cuts is available here. Please follow Politics on Twitter and Facebook. Join the conversation about this story » See Also:
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I made a friend online today. It happens to me most every day. Tyrone lives in Cape Town South Africa. This was the first time I came across Tyrone in the indie while you work room at turntable.fm:
I loved that exchange so much that I tumbld it. It speaks to the notion that music is the international language. I saw him in the Indie While You Work room again today. We got to talking while taking turns listening and playing music. He said he loves the AVC blog. So I asked him what I should write about today:
Tyrone didn't mean "not getting into Tumblr", he actually meant "not getting into Turntable.fm." That's because Turntable.fm had to turn off international users last weekend due to licensing issues. Tyrone had been chatting about how big of an impact that had on him earlier in our chat. But Tyrone is right about "the whole geography thing." I wrote a post about this over the weekend and our very own Arnold Waldstein said this: To me the big change is that socialization is now possible on a global real-time scale. This is not a technological revolution, but a social and behavioral one.
That flattening is a ramp for cultures to meet and communicate over cross cultural, uni-behavioral drives like music or sw development or celebrity obsessions or just passion points like wine or art or even, in my work, marketing.
The power for communities and businesses is not for cultural niches but for global populated communities around more specific points on the interest graph with huge possible memberships that span the cultural and geographical divide Whether it is Tyrone chatting up a couple of Japanese DJs or talking to me about what to blog about, "socialization on a global real-time scale" is a big deal. I follow @masason on Twitter. Here's one of his tweets:
I don't understand all of this tweet, but I know who he is talking to/about and I can click on the picture and that tells me most of what this tweet is about. I can stay connected to @masason at some level via Twitter even though I don't understand the words in his tweets. I followed Tyrone's Tumblr this morning. Now every time he tumbls something, it will appear in my dashboard. We stay connected even though we live half way around the world from each other. I hope turntable can get licensed internationally because Tyrone also is a great DJ and I love getting turned onto new music by him. Content licensing issues are certainly one of the few hurdles in our increasingly global, social, and mobile web. I'm optimistic that we'll see these hurdles come down soon because the power of this global network is large and getting larger every day. Content owners should want to tap into it as much as individuals like me, Tyrone, and Masa Son. Read more posts on A VC » Please follow SAI on Twitter and Facebook. Join the conversation about this story »
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World markets are in rally mode this morning, with S&P futures breaking 1300. The euro is going nuts. If you want an explanation for this micro-burst of optimism, we'd suggest looking at two things. - First, Greece. Everyone thinks the austerity vote will pass, and that the anti-chaotic status quo will persist. Nothing is solved, obviously, but two weekends ago we were talking about a "Lehman Weekend." At some point in the future the whole ship might go down, but it doesn't look like it will be this week.
So if you figure that a Europe implosion and the Japanese earthquake were two big things holding things back, then at least these clouds are lifting. Of course, then there's another big problem: A weakening US recovery, and looming austerity on the way. This cloud doesn't seem to be going anywhere. Here's a look at the S&P 500 futures over the last several days. 
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World markets are in rally mode this morning, with S&P futures nearing 1300. If you want an explanation for this micro-burst of optimism, we'd suggest looking at two things. - First, Greece. Everyone thinks the austerity vote will pass, and that the anti-chaotic status quo will persist. Nothing is solved, obviously, but two weekends ago we were talking about a "Lehman Weekend." At some point in the future the whole ship might go down, but it doesn't look like it will be this week.
So if you figure that a Europe implosion and the Japanese earthquake were two big things holding things back, then at least these clouds are lifting. Of course, then there's another big problem: A weakening US recovery, and looming austerity on the way. This cloud doesn't seem to be going anywhere. Here's a look at the S&P 500 futures over the last several days.
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OK, so it’s Christine Lagarde for the IMF. I wish her luck. And I wish we had any idea how well she’ll do the job. It’s not as if she’s especially enigmatic: in addition to being smart, by all accounts she’s serious, responsible, and judicious. But that, of course, is what worries me. For we’re living in an era in which, for the time being, conventional prudence is folly, conventional virtue is vice. The things Very Serious People want to do — slash deficits right away, “normalize” interest rates, worry about inflation — are exactly the kind of things that could turn the slump of 2008-? into decades of stagnation. Read the rest of this article at The New York Times. Please follow Business Insider on Twitter and Facebook. Join the conversation about this story » See Also:
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Worried about me-too drugs? The medicalization of human variability in order to medicate them into compliance and/or sell them quack cures of dubious value? Ever-rising prices for brand name drugs pushing seniors into penury? Well, you can breathe a (slight) sigh of relief. For the first time ever last year, the global drug industry cut its R&D spending. The trend is expected to continue, at least in the near term. If you'll excuse me, the rest of us will be over here in the corner, freaking out a little bit. Read the rest of this article at The Atlantic. Please follow Business Insider on Twitter and Facebook. Join the conversation about this story »
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Much of last week’s newsletter was on the data that was released on inflation, new loans, investment, etc. One thing worth noting in the current environment is that small and medium enterprises (SMEs) are hurting, and last week’s minimum reserve hike – which came out the same day as the CPI number – will undoubtedly make things worse since any withdrawal of credit is unlikely to affect the top customers (SOEs and local governments) and will fall disproportionately on marginal borrowers. In early May I wrote that the very uneven process of rebalancing in China was likely to have adverse consequences on the SME sector. Rebalancing in the context of China means, for the most part, a significant increase in the consumption share of GDP from its astonishingly low level of 35% in 2009 (and perhaps lower last year). As regular readers know, I do not believe that China’s high savings and low consumption rates are a function of any remarkable preference on the part of Chinese households for savings over consumption. They are simply the automatic consequence of a system in which increases in GDP growth are subsidized by transfers from the household sector, which effectively constrains the relative growth of household income and, with it, household consumption. In that case the only way for China to rebalance would be for Chinese household income to grow faster than GDP. This requires three things above all. It requires that wages grow faster than productivity, that the currency appreciates, and that real interest rates rise. This does not seem to be happening in China, as I discussed in a blog entry last month. Wages have been rising quickly in the past year, but the currency is barely appreciating in real terms against the dollar (and is probably depreciating on a trade weighted basis), and of course real interest rates are declining sharply. In the aggregate the impact on the growth of the household income share of GDP is probably negative, at least if the World Bank is correct in saying that consumption growth has been actually declining since early last year (and as Tuesday’s retail sales data seem to confirm). But this uneven rebalancing has another impact, I argued. If wages are rising and the cost of capital is declining, we should be seeing a shift internally in favor of capital-intensive industries, the SOE sector, for example, and away from labor-intensive industries, which includes SMEs for the most part. I had anecdotal evidence corroborating the theory. Since last year several of my students who come from manufacturing families had told me that their parents were finding it increasingly difficult to retain workers and were getting squeezed out of business. Two months ago my central-bank-seminar student Huang Haidong, who comes form a prominent Wenzhou family (Wenzhou is often considered the cradle of the SME industry in China), sent me an email saying that according to his research a very large number of Wenzhou SMEs were facing bankruptcy. Wages and capital The evidence has since become more than just anecdotal. Last week I saw the following article in the current issue of Caixing: China’s small- and medium-sized enterprises are looking at an increasingly difficult business environment amid financing difficulties and rising production and labor costs, the Ministry of Industry and Information Technology (MIIT) said in a report released on June 2. To rein in excess liquidity, the central government has tightened its monetary policy and raised interest rates twice so far this year, but the measures also add to the difficulty for SMEs to obtain bank lending and have driven up financing costs, according to the report, which was jointly conducted by MIIT and the Chinese Academy of Social Sciences. …The official Xinhua News Agency reported on June 2 that three “relatively big” private companies went bankrupt in Wenzhou of Zhejiang Province. Wenzhou is known as one of the largest centers of private enterprise growth in China. But a local official responded by saying they are isolated cases. The article argued that high wages and rising borrowing costs are the key challenges facing SMEs. The latter may seem surprising given what I said about the declining real cost of capital, but remember that SMEs get little of their financing from the banking sector and have to pay very high borrowing costs for off-balance sheet and informal lending. As cheap capital has been sucked up by SOEs, real estate developers (those who can access bank lending), infrastructure investors and local and municipal governments, little has been left for less-favored entities and the result has been that their cost of capital has risen even as wages have too. The point was picked up Friday in a very interesting article in the Financial Times. According to the article: Small Chinese businesses are feeling the effects the government’s monetary tightening and face a cash squeeze that may be worse than during the global financial crisis in 2008, according to an official warning. From tile manufacturers in Shanghai to shoe factories near Hong Kong, smaller businesses have driven Chinese growth over the past two decades, accounting for about 60 per cent of gross domestic product. So, a sharp slowdown in their activity would weigh heavily on the Chinese, and by extension, world economy. The article goes on the make comparisons with the last squeeze of SMEs: In late 2008, during the financial crisis, a collapse in global export markets and aggressive monetary tightening drove the Chinese economy to a near standstill. Beijing estimated that 20m migrant workers, many of whom were employed by the same kinds of small firms that are now short on cash, lost their jobs. Dong Tao, a Credit Suisse economist, said China could now face trouble again, as companies delay bill payments and factory owners abscond without paying wages. “If this continues, and these smaller companies start to fail in large numbers, then the economy will slow more than the market anticipated and the government bargained for,” he said. Most of the focus in the press has been on the effect of rising borrowing costs for SMEs, although many of these are not heavily leveraged and in my discussions with friends who own, or who are related to owners of, SMEs, wages has been at least as much of a problem. But the attempts by the PBoC to tighten credit (relative to the enormous demand from credit from infrastructure and real estate developers and local governments) have certainly made conditions tougher for those SMEs who do rely on credit. The FT article goes on to say: The cash crunch has come despite repeated prodding by the government to help private businesses. Chinese banks have traditionally preferred to lend to state-owned groups, judging that they pose negligible credit risk due to their government backing. This bias is especially pronounced when the government restricts credit, as it has done over the past year. China has raised benchmark lending rates by 100 basis points to 6.31 per cent, but small businesses have seen much steeper increases. Monthly lending rates at credit unions and informal lending institutions in the entrepreneurial cities of Wenzhou and Xiamen have reached 5 per cent in the past few weeks, up from 1.5 per cent just nine months ago, according to Credit Suisse. Earlier this week, in an effort to boost access credit, the Chinese banking regulator said it would ease tough capital rules on bank lending to smaller businesses. In one measure, loans of less than Rmb5m ($770,000) need not be counted towards banks’ loan-to-deposit ratios. Credit quantity This last point is interesting. Last week a CBRC circular went out that suggested a different way of accounting for small loans to SMEs which should, in principle, increase banking incentives to fund SMEs by reducing the capital requirement. This seems to me a very complicated way of alleviating the cash crunch among SMEs. The proper way would be to reduce the demand for credit from real estate developers and infrastructure investors, but of course Beijing loves its administrative measures. Anyway the only efficient way of reducing demand from real estate developers and infrastructure investors would be to have them pay a fair cost for their capital – and remove the implicit credit support. This however would threaten to throw a huge number of essentially insolvent projects and companies into bankruptcy, so the preferred solution is to keep the cost of capital low and to keep their borrowings growing. Will the attempt to on increase incentives to lend to SMEs work? I am not sure. It would depend on too many factors and squeezing out liquidity through hikes in the minimum reserve ratio will almost certainly fall disproportionately on SMEs. Of course if the regulators simply imposed a formal or informal quota on the banks (e.g. by the end of the year a minimum of X% of your loan portfolio must be in the form of small loans to SMEs), I suspect that they will comply, but then we run into the automobile loans problem of a few years ago. When the regulators demanded that Chinese banks increase the number of auto loans, they duly did, and within a very short time a remarkable share of those loans went non-performing. It turns out that it is very easy to meet aggressive loan target numbers, but it is a lot less easy to make good loans. Moreover in China credit is not controlled through price, but rather through quantity. In other words we don’t use the cost of capital to decide the quantity of credit since the cost of capital is artificially set at extremely low levels – at which level the demand for loans is almost infinite. Instead we use loan quotas. This means that if banks lend materially more to SMEs either they will also be forced to lend less to other borrowers or they will have to allow credit growth to exceed whatever target they would have otherwise set. Already there is some concern about the flow of capital into low-income housing projects. Last week‘s Beijing-based Global Times had this article: At least 40 percent of public housing projects may not start as scheduled this year, with the loan bottleneck resulting from monetary tightening policy mainly to blame for the delay, analysts said on Monday. Construction of affordable housing in cities nationwide is far behind schedule, according to data cited in a Xinhua report. In Shanghai, only 25 percent of scheduled affordable housing projects had started by the end of May, Xinhua reported. In Jiangsu Province, work on about 30 percent of a total of 450,000 affordable housing projects had started, while in Zhejiang Province, work on about 61,600 affordable housing units, 33.2 percent of the total, was underway. The government plans to build 10 million units of affordable housing this year as alternatives for homebuyers in cities where average property prices have almost doubled during the past two years. Under the plan, construction of all these affordable housing projects must begin by the end of October. Hui Jianqiang, a senior analyst with the E-House R&D Institute, said work on at least 40 percent of affordable housing projects will not begin this year unless the central government links local officials’ performance to public housing construction. “Housing activity is anemic partly due to stricter approval procedures but mainly because of tight lending standards under current monetary tightening policy,” Hui said. More lending to SME is undoubtedly a good thing, but if it is achieved by diverting loans from local governments, for example, it will come at the cost of lower growth and rising financial distress in the short term. And as we have seen in the past, short-term growth concerns always trump long-term sustainability issues. Whatever the outcome I think we need to keep a close eye on the behavior of SMEs. They are by far the most efficient part of the Chinese economy and the only part creating real value. My experience in other developing countries suggest that SME owners tend to be the most sensitive to and aware of changes in risk, and if we start to see rising bankruptcies among SMEs, coupled with disinvestment and increasing capital outflows, that is almost always a very worrying sign. When SME owners start to worry, so should we. MIT on environmental degradation To turn to a completely different issue, lat week a friend sent me an interesting article that came out in one of the MIT magazines. According to MIT News: A recent study released by the MIT Joint Program on the Science and Policy of Global Change quantifies the damage to the Chinese economy caused by a lack of air-quality control measures between 1975 and 2005. Not surprisingly, the MIT researchers found that air pollutants produced a substantial socio-economic cost to China over the past three decades. …To observe how changes in pollutants, and their associated health impacts, have historically affected the Chinese economy, the MIT researchers modeled the number of cases of health incidences caused by air pollution — such as restricted-activity days, respiratory hospital admissions and asthma attacks, to name a few examples — given a pollution level and the number of people exposed. Then the model calculated the summed costs of these incidences — i.e., payments for health services and medicine, loss of labor and productivity from time off work, loss of leisure time needed for healing — to estimate the total change in available labor supply. Similar studies conducted by the World Bank have found that air pollution in China caused damages equal to 4-5 percent of the Chinese GDP between 1995 and 2005. However, these estimates are based on static measurements that do not measure the cumulative, long-term impacts of health damages. The MIT study found a significantly higher level of damage, equaling 6-9 percent of the Chinese GDP. The dynamic, cumulative method used in the MIT study may be particularly applicable to developing countries that are experiencing rapid growth. I mention this because I have often argued that Chinese GDP growth has been substantially overstated during much of the past thirty years. Part of the reason for the overstatement is that the future costs of environmental degradation should in principle be included as a deduction to current growth. After all if environmental degradation reduces future economic output because of health problems, not to mention because destroying rivers, farm land, and so on is the economic equivalent of selling assets and calling the proceeds income, then the growth in economic value it generates today should be reduced by the destruction in economic value. So what is China’s real GDP? This is hard to do, of course, but it eventually gets accounted for in the form of lower growth in the future. If farmers produce less tomorrow because water is polluted, then future economic value added is lower. If workers spend additional money on health care tomorrow, this money is transferred from other, more productive spending. This happens everywhere, of course, but I would argue that in many countries, where environmental degradation has been less and has occurred over a much longer period, it is already showing up in lower GDP growth today, so it probably results in a much lower overstatement of growth. In fact in rich countries where environmental degradation has slowed sharply, or even reversed, it may be causing GDP growth to be understated. The other source of GDP overstatement in China is misallocated investment. One way of thinking about it is that if NPLs were correctly identified, the annual accumulation of the non-collectible portion of NPLs should be deducted from current GDP growth numbers to arrive at a more accurate estimate of GDP. After all growth “created” by wasting money is not really growth, and NPLs represent the amount of money that has been wasted. In order correctly to identify NPLs we would need to include loans that might not technically be NPLs at current interest rates, but would be if interest rates were raised (by at least 400-600 basis points) to their “correct” level. Why? Because these loans are benefitting from the implicit annual debt forgiveness granted to them by household depositors – and the fact that they can pretend to be performing with the help of massive debt forgiveness should not change the fact that they are nonetheless un-repayable. The combination of these two sources of GDP overstatement – uncounted environmental degradation and ignored NPLs – is pretty substantial. To show how substantial, assume that GDP has been overstated by anywhere from 2 to 4 percentage points over the past ten to fifteen years. This would imply that China’s GDP today is actually about 55% to 85% of its stated size – or to put it another way, that China’s economy is anywhere from 15% to 45% smaller than we think. This is a pretty big haircut. I have no idea what the correct deduction is (none of my numbers seem especially implausible), but even very rough ballpark numbers suggest that China’s GDP may be sharply overstated. At the very least they also suggest that all those breathless predictions about when China will have the world’s largest GDP may turn out to be as simple-minded as the same predictions made about the USSR in the 1960s or, perhaps a little more plausibly, about Japan in the 1980s. And for the same reasons: in each case we start from the assumption that the country’s real GDP, inflated as it is by misallocated environmental costs and overstated investment numbers, is much larger than it really is. Much, much larger. By the way notice that if we discount GDP by 20-40%, the astonishingly low household consumption share of China’s GDP – 35% in 2009 – rises to 44-59% – still very low by global standards, but not quite as surreal. Could it be that much of China’s GDP really is overstated, and with it total savings too? This is an abbreviated version of the newsletter that went out last week. Academics, journalists, and government and NGO officials who want to subscribe to the newsletter should write to me at chinfinpettis@yahoo.com, stating your affiliation, please. Investors who are clients of Shenyin Wanguo Securities will already receive the newsletter. Investors who are not clients but who want to buy a subscription should write to me, also at that address. Please follow Money Game on Twitter and Facebook. Join the conversation about this story » See Also:
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Looking to reach a deal on $2.4 trillion in spending cuts as part of an agreement to raise the debt limit, lawmakers are considering a bipartisan proposal to cut $600 billion from Medicare over the next decade. The plan, introduced by Sen Joe Lieberman (I-CT) and Sen. Tom Coburn (R-OK), would raise the program's eligibility age from 65 to 67, and force wealthier seniors to contribute more toward to their own care. “Our plan contains some strong medicine but that’s what it will take to keep Medicare alive. But we believe our plan administers that medicine in a fair way,” Lieberman said in a statement. “It asks just about everybody to give something to help preserve Medicare. But it asks wealthier Americans to give more than those who have less.” The Democratic Leadership was quick to condemn the proposal, with former Speaker of the House Nancy Pelosi calling the it "unacceptable." But Democrats are willing to accept at least some Medicare cuts in order to lower the deficit, POLITICO reports, as long as Republicans agree to the elimination of corporate subsidies and capping deductions on the wealthy. If such a compromise could be formed, it would have both Democrats and Republicans agreeing to concessions they previously said were off the table. Here is are a list of the proposed Medicare changes: - Raise eligibility age from 65 to 67.
- Require those with higher Income Americans to pay more out of pocket for medical care.
- Speed up changes to reimbursements for home health care passed in the health care reform bill.
- Eliminating Medicare reimbursement to hospitals for unpaid copays and deductibles.
- Raise premiums on all seniors for Medicare Part B to 35 percent of enrollment cost, from 25 percent; and even more on those with higher incomes.
- Implement a three year "doc fix" to prevent reimbursement reductions for doctors at the end of this year.
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Doctors in the United States have enormous political power. They use it to limit the supply of doctors domestically both by restricting medical school enrollment and the number of foreign doctors who can enter the country. As a result of these protectionist measures, the United States pays more than twice as much for its doctors as other wealthy countries, costing it more than $90 billion a year. The NYT reported on the successful effort by the doctors' lobby to stop the use of government testers to determine the ability of people with different types of insurance to get appointments. The plan was to have people call doctors office and ask for an appointment saying that they have various types of insurance (e.g. Medicare, Medicaid, private insurance). This would provide a basis for determining how easy it is for people get care. The article should have pointed out that this use of anonymous testers is absolutely standard. It has been used to uncover discrimination in the issuing of loans by banks, in selling cars, and offering jobs. It would be irresponsible for the government to be spending hundreds of billions of dollars a year on programs like Medicare and Medicaid without knowing how effective they are in providing care. Therefore when Senator Orin Hatch complained that the administration was: "wasting taxpayer dollars to snoop into the care physicians are providing their patients," he was not saying anything that made sense. Presumably he was doing the bidding of the doctors' lobby. " Read more posts on CEPR » Please follow Politics on Twitter and Facebook. Join the conversation about this story »
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THIRTEEN ADVERTS HAVE been censured in the latest report from the Advertising Standards Authority of Ireland, which was released yesterday. Some 22 promotions on TV, radio, online and in print had been reported to the ASAI for possible breaches of its code of standards, with fifteen complaints coming from the public. Viewers were offended by a wide range of issues. One wrote to the ASAI about a Renault ad which showed people singing “irresponsibly” while driving, while another complaint was upheld over a radio promo in which a child’s voice was heard saying “It’s feckin’ great.” Several ads were reported for sexist portrayals of women. The ASAI also dealt with complaints from rival brands – with Heineken Ireland objecting to a Budweiser Ice Cold campaign which claimed it was “the coldest pint ever”. (The makers of Budweiser in Ireland, Diageo, agreed to stop using the tagline.) The ASAI upheld complaints against 13 promos on grounds including truthfulness, principles and substantiation. Some 11 complaints were rejected. Here we look at some of the ads which left viewers fuming on their futons: Car Buyers Guide – Photoshoot ad
Complaint: Demeaning to women (Upheld) No Nonsense Car Insurance – Sex change ad Complaint: Offensive to transgender people (Not upheld) Heineken – Train compartment ad Complaint: Suggests that beer helps you attract the opposite sex (Not upheld) Renault Scenic – I Love Rock & Roll ad Complaint: Encourages irresponsible driving (Not upheld)
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Just asking, and asking why no one in the media is asking. The Washington Post, NYT and other major news outlets have been running wild yelling about excessive public sector pensions. The median pension for a public sector worker is a bit over $20,000. In many cases this is their sole retirement income, since they are not covered by Social Security. The pensions of public sector employees has been the topic of numerous front page stories in major newspapers. This is why it is striking that no one raised this question with the announcement that Christine Lagarde had been selected as the new director of the IMF. IMF economists are often able to retire with 6-figure salaries in their early 50s. This is likely to strike many people as unfair by itself, however it would seem especially inappropriate in an institution that has explicitly called for governments to raise the age of eligibility for much smaller pensions to 65 or even 67. And the strangest part of it all is that no one in media is even talking about it. Read more posts on CEPR » Please follow Politics on Twitter and Facebook. Join the conversation about this story »
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RockMelt, the "social" browser, which is really a Facebook browser, just raised $30 million more from Andreessen Horowitz, Khosla Ventures and Accel Partners. Andreessen Horowitz Partner Ben Horowitz explains the move on his blog: the browser really matters and hasn't evolved that much in the past 15 years; people do change browsers; people who use Rockmelt are really engaged. Also the founders of Rockmelt are a bunch of ex-Netscape rockstars. Don't Miss Our Rockmelt Tour → Please follow SAI on Twitter and Facebook. Join the conversation about this story » See Also:
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Pat Dorsey of Sanibel Captiva Trust was interviewed on Morningstar yesterday to provide some ideas for sources of alpha. He cited an old paper by Russell Fuller who notes the “three sources of alpha”. Fuller’s paper, which can be found here, describes these three sources: 1. Superior (Private) Information: Most traditional investment managers try to generate a better information set. For example, they may try to generate a superior earnings forecast, or they may try to better understandthe economics underlying a particular industry’s profitability. These types of managers are frequently referred to as traditional managers or fundamental managers. 2. Process Information Better: Some investment managers assume that most information is commonly available to all investors and focus their energy on trying to develop better procedures for processing this information. Managers that try to do this in a formal way are frequentlycalled quantitative managers. 3. Behavioral Biases: Scholars in psychology and the decision makingsciences have documented that in some circumstances investors do not tryto maximize wealth and in other circumstances investors make systematicmental mistakes. Both of these cases can result in mispriced securities andboth are the result of behavioral biases. This is a good expansion point from the Montier post the other day and his ideas on tail risk (see here for more). Of course, investing isn’t just about reducing risk, but also maximizing rewards. Maximizing those rewards is easier said than done. For most investors it’s easiest to just ignore the whole rat race of the markets. If you’re not willing to put in the time and effort to be a great investor you need to accept the fact that you’re not going to have any of the alpha edges described above. This means you need to accept the old Random Walk approach most likely via a diversified portfolio of ETF’s. For those of us who pride ourselves on being able to outperform the market you need to find that edge. The behavioral edge, though difficult to overcome, is the easiest of the three to overcome in my opinion. This can generally be achieved through a rules based approach or a systematic approach. Unfortunately, you need to develop the system that generates the alpha. Therefore, the behavioral approach overlaps with discovering the quantitative approach. This is your true competitive advantage and generally overlaps with the information edge. Better information results in a better system which can be perfected within a systematic investment approach. Connecting the dots is easier said than done, but these are the building blocks. In a future piece, I hope to expand on how to put those building blocks together to “close the loop”. The full interview is attached: This post was published at Pragmatic Capitalism.
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I have long wanted to comment on the investment climate, which was discussed at the meeting of Russian Prime Minister Vladimir Putin with the international railway elite, representatives of financial institutions and investment banks in the framework of the Forum 1520.
Our industry is highly dependent on investment: OAO RZhD places securities on European financial markets, and we do everything we can to support these efforts. But what do we face in real life? There is the objective assessment of the investment climate, made by the President, which runs — “look at yourself in the mirror.” There is another, which is based on the various rankings and estimates by investment consultants. On the thematic conference in Scotland, it was stated that in the past year, private investors put Russia on the 10th place below Africa in terms of investment attractiveness! There is a rhetorical question: looking at the events now taking place in Africa, does anyone have any doubts as to how high should Russia rank and how high should Africa? For me personally, it is true that the ranking methodology is not totally objective, but sometimes it just biased. World Bank's President Robert Zoellick recently added more fuel to the fire, at the IFC conference in Washington, DC, [when he] just went and compared the investment climate in Russia and North Korea. Despite the obvious bias of the statement by such an important official, there was no reaction from the Russian financial authorities. The image of Russia is peculiarly influenced by international consultants. For example, when placing Gazprom bonds, the investment underwriter banks officially notified the potential investors on the low expertise and corruption of Russian courts. This footnote was included in the investment memorandum, signed by the issuer. RZhDs has also faced similar situations, so it is common practice, and it must be countered. We ourselves should in some way reverse the psychology of foreign investors in regard to what is happening in Russia. There is a small but important issue that must be addressed by every company. Of course, those who do it themselves should be transparent and understandable to them, otherwise no one will talk to them. Knowledge raises trust, and investors react to our actions with investments. Speaking of the improvement of the investment climate in general, one should think about this: who today represents the Government of Russia in this interaction. Obviously, it is the representatives of our business elite. The ex-presidential adviser for [US] national security Zbignew Brzezinski expressed himself very sharply on this point. I quote him precisely: “Since $500 billion owned by Russia’s so-called elite is held in our banks, you should first understand whose elite it is!” Brzezinski has never been our friend, but rather the opposite, but you should seriously think over these words… How reasonable can be the calls to invest in the Russian economy be from businessmen who prefer to keep their money in a different country? This said, we also have a noticeable stratum of very wealthy people who not only earn but also invest in Russia. It is they, together with their foreign business partners in our country, who should be used to promote a positive image of Russia. You can't make money on eggs alone, even if it’s Faberge eggs!
| By the way, with reference to personal experience, I can say that considerable contribution to the perception of Russia abroad is made by ordinary people who come there for business, on holidays, to visit friends. In order to make a good impression, one should at least be able to behave and know a bit of tradition and culture of the host country. | | Godspeed!
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(This guest post by Euan Mearns appeared at The Oil Drum. It is licensed under a Creative Commons Attribution-Share Alike 3.0 U.S. License.) There has been much speculation on these blog pages about the existence of OPEC spare capacity. The oil rig count for Saudi Arabia, Kuwait, Abu Dhabi and Qatar (SKAQ) provides some clues. The sharp rise in operational oil rigs in February 2011 suggests to us that usable spare capacity does not exist and that new useful capacity (light sweet?) must be built by drilling new wells. This takes time. It also suggests that there is goodwill among these OPEC members to try and boost supply to tame oil prices.  Figure 1 International oil rig count from Baker Hughes. Rig count data for Iraq and Iran are incomplete and not plotted. Production data from the EIA. This post is joint with long term TOD contributor Rune Likvern.
Disclaimer: neither author holds any energy related investments. OPEC spare capacity The chart of OPEC spare capacity shows spare capacity running at around 4.5 mmbpd. It seems quite clear that if SKAQ could simply turn on taps to produce more usable oil then they would not be scrambling rigs right now. If the spare capacity does in fact exist, then it must be of sour and heavy grades of crude that cannot substitute for the loss of 1.6 mmbpd light sweet crude from Libya. 
Figure 2 OPEC spare capacity estimates from the International Energy Agency. Chart courtesy of Rembrandt Different types of wells Baker Hughes provide three categories of wells: oil, gas and miscellaneous. For SKAQ, plotted in the chart up top, the miscellaneous column is empty, hence we are looking at simple split between oil and gas. Wells can be drilled for 4 main functions: 1) Exploration
2) Production wells
3) Work overs - intervention to improve well performance
4) Water (gas) injection - to maintain reservoir pressure It has to be assumed that the oil rig count encompasses all of these functions. Exploration wells will not lead to increased production in the short to medium term. But drilling production wells, workovers and injection wells will lead to an increase in production if the combined new production capacity is in excess of declines for a given country. Understanding the rig count We quite often find that when we have an idea for a simple post that the data are far more complex than we expected it to be. This is such a case. Key observations: 1. Oil production from the SKAQ countries has been stable at around 14±1 mmbpd since 2003, this despite rig count varying and rising from 40 to 90 operational oil rigs. 2. Spare capacity shows much wider variance from about 1.5 mmbpd in 2004 to > 6.5 mmbpd in 2009. It may therefore be deduced that these OPEC member states produce according to their quotas. They drill wells when needed to develop new fields etc, and these are kept in reserve until declines dictate they are brought on stream to maintain production levels. The thing that distinguishes these prolific OPEC producers from the more conventional OECD operators is that they still have an inventory of discovered assets to drill and are therefore able to offset declines in one area with new production and thus maintain stable production profiles. This situation may persist for a fair while yet. The bigger picture And so what of the much vaunted failure of Saudi Arabia to meet the shortfall produced by Libya going off line and the recent announcement of the IEA that it was to raid OECD strategic reserves? Understanding exactly what is going on and what is about to happen requires a careful look at data and markets that are increasingly manipulated by government. The chart below (Figure 3) shows oil price (weekly average Brent) and petroleum products (gasoline, heating oil etc) supplied to the US market. The latter may provide a proxy for economic health. Note the sharp decline in petroleum products accompanying the 2008 crash! Demand for petroleum products in the USA showed weak growth in the period July 2009 to Dec 2010, peaking in that month. Since then, throughout 2011, demand for petroleum products has been in decline with signs of lower highs and lower lows on the chart. The 52 week MA has turned down. Is this a leading indicator of recession? Broadening the outlook to look at OECD petroleum demand shows the 12 month moving average turning down (Figure 4). 
Figure 3 Weekly consumption of petroleum products in the USA and weekly average price of Brent. All data from the Energy Information Agency (EIA).
Figure 4 Petroleum consumption in OECD and non-OECD. Note that 12 month moving averages are plotted. Key observations are 1) the divergence of OECD and non-OECD since 2005, the non-OECD going up in the world, the OECD going down and 2) a hint that OECD petroleum consumption is once again turning down. The recent trend in US petroleum products consumption lends strength to the notion of declining demand in important parts of the OECD. The top of the recent price spike (so far) was $126.59 on April 28th. Prices fell back since then but showed temporary revival mid June following the disorganised break up of the OPEC meeting. The revival was short lived, and on Thursday 23rd June, Brent was clinging to its $110 support when the IEA announced their raid on the OECD SPRs, sending Brent sharply lower. Where does Libya fit into this picture? In 2010 Libya produced 1.659 mmbpd of mainly light sweet crude and much of that has been lost to the market. The civil conflict got properly underway mid February and at the time added around $10 to already sharply rising oil price. Our speculation is that global demand was already slowing at this time, with certain OECD economies already buckling under rising and high oil prices. Hence the loss of Libyan oil may have coincided with slowing demand, and it has not yet been necessary for OPEC to officially cut supplies to support price since the Libyan conflict has already done this job for them. Note that demand for petroleum products has fallen by >1mmbpd in the US alone so far this year. Our speculative reading of the current situation therefore is that a second recessionary dip may already be underway in certain oil importing OECD countries, with slowing demand creating over supply and weak price. Meanwhile, the SKAQ countries have responded to OECD appeals and have increased drilling activity to create more spare capacity. And the IEA has signaled their intent to flood this market with oil. Please follow Money Game on Twitter and Facebook. Join the conversation about this story » See Also:
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There are many good reasons to start your own business from the indepence it can bring to your lifestyle to the noble role you can play in helping to grow the ecomy, create jobs and opportunity and improve the world through a great product or service. In fact, the hardest part about becoming an entrepreneur is figuring out where to start. Whether you have some knowledge already or going on a vague notion that you believe this option may be for you, we hope this roundup will be a place to start. Good luck on your journey! Self-development Celebrating Independence Day with entrepreneurship. A July 4 approaches, serial entrepreneur Amy Lindgren suggests one way to declare indepence in your own life may be to start your own business. Whether your ultimate goal is improved control over finances or over your own life and the way you live it. Strating either a full-time or side business may be a possible answer. The Atlanta Journal-Constitution Don’t forget creativity. If being creative isn’t a prerequisite for starting a business, maybe it should be. Let’s face it. It takes a lot of creativity to start a small business from nothing. The good news is that you can teach yourself a more creative way of thinking. Learn the steps to become a creative entrepreneur when pursuing your startup no matter how small that business may be. Small Business Trends Finance Five tips for bootstrapping your startup. When you do decide to start your business, resources including money will probably be tight. You may have heard that getting a small business loan can be tough in these challenging times. Fortunately, this isn’t a deterent for most entrepreneurs. Here’s how to start your business without loans or investment. Fox Small Business Center Helping small business can be good business. Check out this story about a large global brand giving small, local even underpriviledged businesses a leg up. Could larger brands be the key to building your small startup too? Though many small business owners may think of larger businesses only as competition with no reason to lend a helping hand, the fact is that small business can be valuable customers to larger brands in the long run. Can you find a larger partner with a vested interest in your success? Modern Tire Dealer Looking for funding? Go sell something! That advice may sound obvious, even glibb. And it’s more surprising when you consider the source. Fred Wilson may make a living funding major tech startups like Twitter, but the advice he gives to entrepreneurs is that there are many approaches to starting a business. One may be to take stock of the services/products you have right now. Are there any that could be generating cash flow today? Huffington Post Strategy How to differentiate your brand. You may have a business model worked out for your startup, but to prepare for a truly competitive market (depending on the product or service you plan to offer) it’s also necessary to differentiate yourself from the competition out there. What makes your startup different? The answer to this question could determine the success or failure of your startup no matter what your product or service might be. 365 Days of Startups The key to success is doing one thing well. When starting a business, don’t get carried away with the number of products and services you are hoping to offer. Focus instead on a few thing you can do well. Becoming a “master” in a few areas will develope your brand, distinguish you from competitors and make it easier to share what you do. 365 Days of Startups Research The importance of optimism. Optimism is an important component of any small business startup. Looking out at the world or reading the newspaper, it may be hard to be remain upbeat. But one group entrepreneurs and small business people at least seem more positive than others about the future. What can we learn about them in order to improve our own chances for success as entrepreneurs? The Globe and Mail From Small Business TrendsSmall Business Startup: Where To Begin Read more posts on Small Business Trends » Please follow War Room on Twitter and Facebook. Join the conversation about this story »
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William H. Frey, Senior Fellow, a t the Brookings Institution discusses the Uneven Aging and "Younging" of America as noted in the 2010 census. America is beginning to show its age as the baby boom generation advances toward full-fledged senior-hood. But the pace of this aging will vary widely across the national landscape due to noticeable geographic shifts in the younger population, with implications for health care, transportation, and housing, and possible impacts upon our ability to forge societal consensus. An analysis of data from the 1990, 2000, and 2010 decennial censuses reveals that:
Due to baby boomers “aging in place,” the population age 45 and over grew 18 times as fast as the population under age 45 between 2000 and 2010.
Although all parts of the nation are aging, there is a growing divide between areas that are experiencing gains or losses in their younger populations.
Suburbs are aging more rapidly than cities with higher growth rates for their age-45-and-above populations and larger shares of seniors. People age 45 and older represent 40 percent of suburban residents, compared to 35 percent of city residents. There are far more charts, graphs, and analysis, in the Complete PDF The Uneven Aging and ‘Younging’ of America: State and Metropolitan Trends in the 2010 Census. The excerpts above were from a summary.
Cultural Shift Coming
The Washington Post discusses demographic changes in If baby boomers stay in suburbia, analysts predict cultural shift During the past decade, the ranks of people who are middle-aged and older grew 18 times as fast as the population younger than 45, according to Brookings Institution demographer William Frey, who analyzed the 2010 Census data on age for his report, “The Uneven Aging and ‘Younging’ of America.” For the first time, they represent a majority of the nation’s voting-age population.
The political ramifications could be huge as older voters compete for resources with younger generations.
“When people think of suburban voters, it’s going to be different than it was years ago,” Frey said. “They used to be people worried about schools and kids. Now they’re more concerned about their own well-being.”
The nation’s baby boomers — 76 million people born between 1946 and 1964 — were the first generation to grow up in suburbia, and the suburbs is where many chose to rear their own children. Now, as the oldest boomers turn 65, demographers and local planners predict that most of them will not move to retirement areas such as Florida and Arizona. They will stay put.
“If you ask younger boomers, who are 45-ish, a lot say they expect to move and retire elsewhere,” said John Kenney, chief of aging and disability services with the Montgomery County health department. “But as people get to 65 and 70, whether because of choice or default, they end up staying. We are planning on people being here.”
“Retirement used to be the golden years,” said Kenney. “No more.”
Local governments are starting to grapple with the implications.
“Clearly, the age wave is coming,” said Pat Herrity (R-Springfield), a county supervisor who heads the 50-plus committee.
Although Florida and Arizona remain retirement magnets, 17 of the 25 states with the highest concentrations of senior citizens are cold-weather states.
Older Americans now represent 53 percent of voting-age adults.
“The political clout of older Americans will be even more magnified if the traditional higher turnout of this group continues, and as the competition for resources between the young and the old becomes more intense,” Frey writes. Retirement No Longer Golden Years
I have been discussing social trends and changing social attitudes for quite some time. Here is a snip from May 2008 on Demographics Of Jobless Claims Structural Demographics Poor
Structural demographic effects imply that prospects in the full-time labor market will be poor for those over age 50-55 and workers under age 30. Teen and college-age employment could suffer a great deal from (1) a dramatic slowdown in discretionary spending and (2) part-time Boomer reentrants into the low-paying service sector; workers who will be competing with younger workers.
Ironically, older part-time workers remaining in or reentering the labor force will be cheaper to hire in many cases than younger workers. The reason is Boomers 65 and older will be covered by Medicare (as long as it lasts) and will not require as many benefits as will younger workers, especially those with families.
In effect, Boomers will be competing with their children and grandchildren for jobs that in many cases do not pay living wages. One of the many consequences of boomer demographics is the longer the US opus of reform of Medicare, and Social Security, the more difficult it will become because of voting demographics.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Forex Pros – pros – European stock markets were broadly higher on Wednesday, as shares in the financial sector advanced amid expectations Greek lawmakers will vote in favor of harsh austerity measures needed to avoid a sovereign debt default. <br /><br />During European morning trade, the EURO STOXX 50 jumped 1.1%, France’s CAC 40 gained 1.05%, while Germany's DAX 30 advanced 1.2%. <br /><br />Later in the day, Greece's Parliament was to vote on a EUR28.4 billion, five-year austerity package needed to secure a EUR12 billion tranche of bailout funds from the European Union and International Monetary Fund.<br /><br />Socialist deputy Thomas Robopoulos said earlier that he would vote for the plan, backtracking from comments made last Friday.<br /><br />Banking shares posted strong gains, with French lenders BNP Paribas and Societe Generale up 1.95% and 2.3% respectively, while Germany’s Commerzbank advanced 2.75%.<br /><br />Peripheral lenders were also higher, with the National Bank of Greece rallying 4.7%, Spain’s Banco Santander climbing 2.2%, while Italy’s second largest bank Intesa Sanpaolo rose 2.15%.<br /><br />Shares in Europe’s largest insurer Allianz advanced 2.5% after Morgan Stanley upgraded the stock to ‘overweight’.<br /> <br />In London, the commodity-heavy FTSE 100 advanced 1.1% as shares in raw material producers led gains after oil and metal prices advanced, boosting earnings prospects for miners and energy explorers. <br /><br />The world’s largest mining group BHP Billiton saw shares gain 1.6%, rival Rio Tinto added 1.45%, while copper producer Antofagasta saw shares rally 4.1%, following upbeat comments by its chief executive. <br /><br />The world’s largest commodities trader Glencore International climbed 1.1% after both UBS and Citigroup recommended buying the stock. <br /><br />The outlook for U.S. equity markets was upbeat. The Dow Jones Industrial Average futures pointed to a gain of 0.2%, S&P 500 futures advanced 0.25%, while the Nasdaq 100 futures edged 0.3% higher. <br /><br />Later Wednesday, the U.S. was to publish industry data on pending home sales as well as a report on crude oil inventories.<br /><br />
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I was on CNBC on Monday morning announcing the launch of Signature, our new product that guarantees professionals a job offer. Here’s a link to the clip from the floor of the New York Stock Exchange:
If you’ve been in recruiting for any amount of time, you know the litany of questions your friends, family members, classmates, neighbors, ex-significant others, guys standing next to you in the grocery line, the new spouse of the ex-significant other, and everybody else in-between, has for you when they find out you know something about getting a job:
- Is ten pages too long for a resume?
- Should I mention how my old boss’ personality disorders led to my getting fired?
- How soon can I ask about vacation time?
- Is it OK to wear jean shorts to the interview? …and on and on and on…. Well, we’ve solved the problem for you. With TheLadders’ Signature, we give a money-back guarantee to professionals looking for their next position: follow our program for six months and we guarantee you’ll land an offer. And at $2,495, it’s priced far, far below outplacement services of similar length that don’t offer a guarantee. Now, as I mentioned in my newsletter to our 4,600,000 passive professionals, we can’t succeed without the professional’s commitment: “Your commitment to finding a new job, your commitment to make your regularly scheduled calls with your Career Advisor, and your commitment to putting in the minimum four hours per week that you need to be successful.” With their commitment, we provide a Certified Professional Career Coach, regular weekly and bi-weekly sessions, a CPRW professionally-written resume, and all of the learnings that we’ve tested, tried, and found true for our program. So if you have a friend in need, send them our way and we’ll help them land an offer for their next great gig. Plus, we’ll tell ‘em to keep the jean shorts in the closet… Read more posts on TheLadders » Please follow War Room on Twitter and Facebook. Join the conversation about this story »
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Remember when the IEA announced it would unlock 60 million barrels of oil, including 30 million from the US' own Strategic Petroleum Reserve? Well, the market has forgotten. With this morning's rally, that's almost been completely wiped out. 
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China is regularly accused of abusing the global intellectual property system, either by ignoring it completely, or aggressively incorporating technology that was developed by outsiders into its own products that it sells (which is something of a gray area, it seems). Now they're taking it to the next level. According to China Daily (via Daily Yomiuri), China is now filing patent applications on high speed rail in United States, Brazil, Europe, Russia and Japan. 8 of its 21 original patent applications have already been successful. The outrage in Japan, which is a home of high-speed rail technology, is predictable. Here's the Daily Yomiuri's take on the news: China has developed high-speed railway cars through technology licenses from companies in Japan, Germany, France and Canada. Under the licensing agreements, China's use of the expertise was to be limited to domestic application, an informed source said. The Chinese government has said its high-speed rail technology was developed completely on its own, with an official at the Railways Ministry saying, "We adopted it [the technology from overseas], digested it, absorbed it and innovated based on it." Of the places where Beijing has filed for the patents, the United States, Brazil and Russia have high-speed railway development projects. With the patent filings, China is apparently trying to gain an advantage in the competition to win sizable contracts. China's bullet train is based on the "Hayate" model, which runs on the Tohoku Shinkansen line. 
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