Warren Buffett's Advice: How to Get 'Fair Shake' on Wall Street

Warren Buffett's Advice: How to Get 'Fair Shake' on Wall Street: "So, you always want to look at costs. When somebody comes around to you and says, 'I'm going to sell you this wonderful security but there's this big chunk in it for me," you get suspicious.
(Read More: Buffett Still Buying Stocks, Sees 'Good Value')

As they say, when a person with experience meets a person with money, the person with the money gets the experience and the person with the experience gets the money."



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U.S. stocks see worst monthly decline in over a year - Market Snapshot - MarketWatch

U.S. stocks see worst monthly decline in over a year - Market Snapshot - MarketWatch:

Stocks endured heavy selling in most of the sessions this week, as sharp drops in emerging-markets currencies prompted nervous investors to flee riskier assets including stocks and lock in profits from a spectacular year.



“We can blame the recent pullback on the emerging markets or capital flows, but at the end of the day, it was going to happen anyway because markets rallied a bit too much at the end of last year,” says Jim Russell, senior equity strategist for U.S. Bank Wealth Management.



“We would consider this as a buying opportunity. The jury is out on whether stocks will have a bigger correction, but for longer-term our outlook is positive,” he added.

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Do yourself a favor: Care less about the stock market - David Weidner's Writing on the Wall - MarketWatch

Do yourself a favor: Care less about the stock market - David Weidner's Writing on the Wall - MarketWatch: "The market is really just a yardstick of our confidence, right?

Actually, no.

That’s because most of us who own stocks don’t hold much and most people don’t own any stocks at all.

How is the market a reflection of this silent majority?

The reality is that stocks are not only owned by a minority of Americans, but by a minority of that minority – and a very wealthy minority at that."



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44 per cent drop in SMRT's Q3 earnings, with rail operations in the red | AsiaOne Business

44 per cent drop in SMRT's Q3 earnings, with rail operations in the red | AsiaOne Business: ""Our fare business continues to face cost pressures arising from ongoing efforts to meet heightened demands on service, reliability and capacity," said SMRT chief executive Desmond Kuek. He said rising costs will be mitigated partially next year by the recently approved fare adjustments, and the company's continuing efforts to drive higher productivity and cost efficiency.

"We are engaging the authorities on a timely transition to a viable and sustainable model for the trains and bus businesses," said Mr Kuek. The firm also continues to explore rail business opportunities overseas, he said."



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A hard landing in China: The risks in one graphic

A hard landing in China: The risks in one graphic:



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What the EM sell-off means for European stocks

What the EM sell-off means for European stocks:



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IMF calls for ‘urgent action’ amid EM crisis

IMF calls for ‘urgent action’ amid EM crisis:



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Could this currency sell off like Argentina’s peso?

Could this currency sell off like Argentina’s peso?:



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Blackstone Has Record Fourth-Quarter Profit on Fund Exits - Bloomberg

Blackstone Has Record Fourth-Quarter Profit on Fund Exits - Bloomberg: "er of alternative assets such as private equity and real estate, posted a record fourth-quarter profit as the carrying value of its holdings gained and it sold assets. The shares rose the most in a year.

Economic net income, a measure of earnings excluding some costs, more than doubled to $1.54 billion, or $1.35 a share, from $670 million, or 59 cents, a year earlier, New York-"



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Ghost of 1929 haunts, as 1997-style crisis hits - Outside the Box - MarketWatch

Ghost of 1929 haunts, as 1997-style crisis hits - Outside the Box - MarketWatch:



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Ghost of 1929 haunts, as 1997-style crisis hits - Outside the Box - MarketWatch

Ghost of 1929 haunts, as 1997-style crisis hits - Outside the Box - MarketWatch:



"For now, I continue to recommend investor protect themselves from a worsening crisis by focusing on defensive assets like Treasury bonds and making opportunistic short-side plays. Examples include a position in the leveraged Direxion 3x Treasury Bond Bull TMF +2.22%  and a short against Brazilian steelmaker Companhia Siderurgica Nacional SID -0.06%  . Both positions are carrying gains of more than 7% since I added them to my Edge Letter Sample Portfolio.

Disclosure: Anthony has recommended TMF and SID short to his clients.

Anthony Mirhaydari is founder of the Edge, an investment advisory newsletter, as well as Mirhaydari Capital Management, a registered investment advisory firm. "



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Emerging Stocks Head for Worst Start Since 2008 on Fed Taper - Bloomberg

Emerging Stocks Head for Worst Start Since 2008 on Fed Taper - Bloomberg:



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Calm Broken in Markets Amid Concern of Emerging Contagion - Bloomberg

Calm Broken in Markets Amid Concern of Emerging Contagion - Bloomberg: "“My phone hasn’t stopped ringing in the past few days, and I met with about half of my clients, as some of them have direct exposure to emerging-market currencies,” Lorne Baring, who manages about $500 million as managing director of B Capital in Geneva, said in a telephone interview, adding the firm reduced emerging-market exposure prior to the selloff. “They want to know my views on whether the situation is going to get worse, and I tell them yes, it will.”"



'via Blog this'

Asian cities most at risk of extreme weather

Asian cities most at risk of extreme weather: "Japan's Tokyo, Manila in the Philippines and China's Pearl River Delta region — one of the most densely urbanized areas in the world — top Swiss Re's list of cities most at-risk in terms of population. Only one non-Asian city, Los Angeles, made the top 10."



'via Blog this'

Chinese can’t say neigh to feng shui in year of the horse

Chinese can’t say neigh to feng shui in year of the horse: ""In theory, wood produces fire. Fire produces illumination. Everything looks good for the stock market," Chua said. "But I did a little divination and a very simple and answer came to me and it says: disasters," he added.

"Too much fire will cause an imbalance," Chua said, citing concerns more "freaky weather" could be ahead. But he expects the entertainment and energy sectors will perform well, while the property will likely be volatile."



'via Blog this'

‘Huge amount of downside’ in S&P: Fleckenstein

‘Huge amount of downside’ in S&P: Fleckenstein: ""If they taper, they're going to get a lot of weakness. People are being very macho right now, they think that if the Fed tapers it's going to be OK—and it might be for a little while. But the market's going to end up lower if they keep tapering, and they're going to have to come back the other way. Then at some point, people will see that the Fed is trapped, because what they do doesn't work, and they can't stop," Fleckenstein said."



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‘Huge amount of downside’ in S&P: Fleckenstein

‘Huge amount of downside’ in S&P: Fleckenstein:



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Transport Fare Hike Draws Protest in Singapore - Southeast Asia Real Time - WSJ

Transport Fare Hike Draws Protest in Singapore - Southeast Asia Real Time - WSJ:



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Buying opportunities abound as Nikkei falls: Analysts

Buying opportunities abound as Nikkei falls: Analysts:



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Why is SMRT Raising Fares? | Balding's World

Why is SMRT Raising Fares? | Balding's World:

Why is SMRT Raising Fares?

Posted on January 29, 2014

Share

Lost amid the Anton Casey mess was the announcement that SMRT would raise fares by more than 3% in 2014 and additional 3% in 2015.  With yesterdays announcement that SMRT profit had fallen by more than 40%, SMRT appears destined to take increasingly stronger steps to maintain profitability.  While people have understandably been upset by the fare increase, there appears to be a poor understanding of how this fits into the larger picture of Singaporean public finances and the Temasek portfolio.



Transportation companies and especially public transport companies are notoriously unprofitable.  There is a reason there are virtually no listed public transportation companies and that is because they are unprofitable.  Throughout the world, whether it is North America, Europe, or even Asia (Singapore and Hong Kong excluded) public transportation companies like bus and rail companies do not make money.  Public transport train, subway, and bus companies from Japan to Germany are rarely profitable enterprises.

SMRT is an immensely profitable firm.  Despite being in a difficult industry, SMRT has posted net profit margins of nearly 20% as recently as 2010 and even in its most difficult recent year still managed to post a net profit margin of 7.3% equaling $83 million SGD.  In other words, despite declaring a healthy net profit, SMRT has also declared its business model “unsustainable”.  This begs the question: what is driving the unreliability and financial problems at SMRT?

SMRT is receiving subsidized profits via government funds.  Though most people are aware of the subsidized fares available to seniors and students, there are two much larger and less obvious ways the government subsidizes SMRT.  First, the Singapore government has been gifting buses to the SMRT most recently to the tune of $1.1 billion SGD resulting in an annual implied subsidy.    If we take a simple scenario assuming this money was loaned to SMRT over 10 years at 5% annual interest, this would necessitate annual payments of $142 million SGD.  Consider, that SMRT only recorded net income of $161 million in 2011 declining to $83 million for the year ending March 31, 2013.  It becomes obvious how important this implicit subsidy become to SMRT reporting yearly net profits around 10%.





Second, though there is no public statement about the agreement between SMRT and the government on the rail, subway, and light rail assets, given the generosity of the government to SMRT with regards to buses, it stands to reason that they are displaying a similar level of generosity with regards to rail assets.  The government of Singapore paid for out of public funds and built rail and subway lines and then reach an agreement for SMRT to pay the government for the use of these assets.  If the government is not charging SMRT a cost plus rate for the use of those rail assets, as is the most likely scenario, this represents an additional significant subsidy.  Given the large amount of money invested by the Singaporean government over time but the longer expected of life span of rail assets when coupled with the bus subsidy, it would be conservative to estimate an implied subsidy of greater than $200 million SGD annually to SMRT.  Given their recent net profit of $83 million and their $163 million in 2010, this implied subsidy represents between 125-250% of net profits.







This matters because SMRT is a publicly traded firm and a portfolio company of Temasek.  SMRT is publicly traded and counts Temasek as its dominant shareholder.  Temasek repeatedly boasts its superior asset management in producing 16% annualized returns since 1974 and SMRT has produced consistently high rates of return producing an 18% net profit in 2010.  Given the close links between the government and Temasek, each has an incentive to ensure continued profitability even if that means the government gives money to Temasek managed firms so they can declare a profit.  SMRT is only making a profit because of government subsidies not due to superior management.  If the government wants to give money to SMRT for the purpose of maintaining service, this would be a reasonable use of public funds.  However, the government giving money to SMRT so it can declare a profit and increase the rate of return for government linked shareholders is nothing less than cronyism.

Let me strongly emphasize that given the difficult nature of the public transportation industry, I am not philosophically opposed to public private partnerships in this area.  However, it seems to be a clear conflict of interest and inappropriate for the government to be subsidizing the profits of a publicly listed firm that is owned by a government owned investment firm.  SMRT clearly has no profits without government subsidies and the subsidies should not be used to allow Temasek or other executives to meet profit or return targets for bonuses.

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SMRT's profits crashed 44.1% to $14.2m | Singapore Business Review

SMRT's profits crashed 44.1% to $14.2m | Singapore Business Review:

SMRT's profits crashed 44.1% to $14.2m



But here's why no one is surprised.



According to OCBC Investment Research, as expected, SMRT reported another set of lacklustre results for 3QFY14. Although revenue climbed 4.1% YoY to S$293.3m due to positive contribution from all segments except its Taxi and LRT operations, PATMI dipped 44.1% to S$14.2m as operating expenses increased at a faster pace of 10.6%.



Here's more:



The main culprit was a 21.4% hike in SMRT’s staff costs to S$119.6m, which formed 40.8% of its topline, versus 35.0% in 3QFY13.



For 9MFY14, revenue rose 4.3% to S$874.4m but PATMI slumped 52.8% to S$45.0m. SMRT’s Rail operations (Train and LRT combined) recorded its first ever quarterly loss of S$0.2m in 3QFY14, while its overall fare business (Train, Bus and LRT) suffered a S$9.0m operating loss, in contrast to 3QFY13’s S$7.4m operating profit.



In terms of balance sheet strength, SMRT’s net gearing increased from 8.3% as at 31 Dec 2012 to 63.7% as at 31 Dec 2013, largely due to the payment of S$392.7m for 17 trains and operating assets taken over from the LTA.

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Subprime Called Safer Makes Comeback as 'Nonprime’: Mortgages - Bloomberg

Subprime Called Safer Makes Comeback as 'Nonprime’: Mortgages - Bloomberg:



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China Manufacturing Index Shows Contraction - Bloomberg

China Manufacturing Index Shows Contraction - Bloomberg: "“China’s growth momentum will continue to weaken in coming quarters,” Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, said in a note. “The market continues to underestimate the degree of the ongoing slowdown and further negative surprises are in stock as the year progresses.”"

China Credit Trust Co. has repaid the principal to some investors of its 3-billion-yuan ($495 million) high-yield product, according to investors who accepted the bailout offer. Averting the nation’s biggest trust default in at least a decade may reinforce investors’ belief in implicit guarantees and the government’s willingness to back risky products, stoking their appetite for products in the $1.7 trillion trust market.

China will struggle to maintain 7.5 percent economic growth this year and next year, Li Daokui, a former People’s Bank of China academic adviser, said last week at the World Economic Forum in Davos, Switzerland. He said that excessively fast declines in property prices could be a risk, while shadow banking isn’t a major threat.

HSBC’s survey is based on responses from more than 420 manufacturers and is weighted more toward smaller companies. The official PMI is based on questionnaires sent to about 3,000 companies.

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Asian Stocks Slump on Fed Cuts to Bond Buying, China PMI - Bloomberg

Asian Stocks Slump on Fed Cuts to Bond Buying, China PMI - Bloomberg:



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Roubini says emerging markets pose tail risk to global economy - The Tell - MarketWatch

Roubini says emerging markets pose tail risk to global economy - The Tell - MarketWatch:



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Rent rises to boost Fortune's income | South China Morning Post

Rent rises to boost Fortune's income | South China Morning Post:



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When a Giant Gain Causes Pain - MoneyBeat - WSJ

When a Giant Gain Causes Pain - MoneyBeat - WSJ:

If you have a small stake in a company, you own the stock. But if that stake suddenly grows enormous, the stock owns you. Thinking rationally about it then can become all but impossible—even if you have a doctorate in economics.



No matter how closely you analyzed a stock when you bought it, if it has since gone way up, then it is time to start analyzing yourself, says Meir Statman, a professor of behavioral finance at Santa Clara University.



“What many people are afraid of when they have a stock with a big gain,” he says, “is regret.” So you need to figure out which will bother you more: selling the stock and then watching it go up even more, or not selling and then watching it go down.



To manage both kinds of regret on a highflying stock, consider selling, say, 20% in five equal installments at regular intervals. That reduces the risk of selling too soon and of holding too long. As Terrance Odean, a behavioral-finance professor at the University of California, Berkeley, puts it: “Investors should diversify emotionally as well as financially.”



— Write to Jason Zweig at intelligentinvestor@wsj.com, and follow him on

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Look to currencies to see the next move for stocks - MarketWatch

Look to currencies to see the next move for stocks - MarketWatch:



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Is China really running out of cash?

Is China really running out of cash?:



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Economic shifts in US and China batter markets

Economic shifts in US and China batter markets:



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Emerging market currency 'contagion' spreads

Emerging market currency 'contagion' spreads:

Tim Ash, head of emerging market research at Standard Bank, said people had fallen out with emerging markets.



"The story is about fundamentals—so many emerging markets have dodgy fundamentals," he told CNBC. "You've got Turkey, Brazil, Argentina, Egypt—everyone's got problems."

But he stressed that although this was the broader picture, Friday's moves were "pure contagion."



"Even the good guys that investors like—like Mexico and Poland—are being pulled lower," he added.



"Markets are taking a long, hard look at a number of vulnerable countries, notably Turkey, and don't like what they see in terms of the credibility of the policymaking regime," said Nicholas Spiro, managing director of Spiro Sovereign Strategy.

(Read more: Emerging market currencies the Fed can't touch)

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Stocks are at risk from outside shocks as U.S. recovers - Market Extra - MarketWatch

Stocks are at risk from outside shocks as U.S. recovers - Market Extra - MarketWatch:



'via Blog this'

Emerging market currency 'contagion' spreads

Emerging market currency 'contagion' spreads:

Benoit Anne, head of global emerging market strategy at Societe Generale, told CNBC the market's "panic mode" was directly linked to the Fed.

"We have huge psychological fear that is going to emerging markets, despite a global environment that hasn't changed that much," he said.

"My bias at this stage — although it's a bold one — is that this is all about the credibility of the Fed with respect to its forward guidance. This fear that the Fed is going to tighten quicker than expected is translating into emerging markets."

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How about a 50% crash? - MarketWatch

How about a 50% crash? - MarketWatch:

The triggering event for such a selloff would most likely be somehow associated with the Federal Reserve. Inability to control interest rates or a misstep in the taper could trigger extreme volatility. Just a simple loss of confidence in the Fed and/or its new Chair could be a catalyst for the first significant decline in years.



Complacency is at extreme levels, based largely on confidence in the Federal Reserve being able to stave off any and all evil forces in global financial markets. However, during previous periods of confidence and extreme bullishness, the Fed has been proven unable to stop significant stock-market declines.



While no one can forecast the future, one can get a feel for the "mood of the market" and whether the tide is ebbing or flowing. At this point, it's quite possible that the high-water mark has been reached and that the tide may be turning. In the final analysis, whether or not we see a 50% crash is irrelevant since all market environments offer potential opportunity for those who are ready to change and adapt to the challenges of today's new

'via Blog this'

China hands 'death sentence' to 75% of solar cell makers- Nikkei Asian Review

China hands 'death sentence' to 75% of solar cell makers- Nikkei Asian Review:



'via Blog this'

China crisis may be unavoidable- Nikkei Asian Review

China crisis may be unavoidable- Nikkei Asian Review:



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Number of unionised jobs lost soars 76%

Number of unionised jobs lost soars 76%:



'via Blog this'

Berkshire Is Said to Face Start of U.S. Systemic-Risk Scrutiny - Bloomberg

Berkshire Is Said to Face Start of U.S. Systemic-Risk Scrutiny - Bloomberg: "“We will never become dependent on the kindness of strangers,” Buffett wrote in the 2010 letter. “Too-big-to-fail is not a fallback position at Berkshire.”"



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Cache Logistics Trust Handles Its Way to Higher Distributions for the Year | The Motley Fool

Cache Logistics Trust Handles Its Way to Higher Distributions for the Year | The Motley Fool:



'via Blog this'

Nouriel Roubini on China and Japan conflict: It looks like 1914 war

Nouriel Roubini on China and Japan conflict: It looks like 1914 war:



'via Blog this'

China HSBC PMI falls to 49.6, first contraction in 6 months

China HSBC PMI falls to 49.6, first contraction in 6 months:



'via Blog this'

3 risks that could crash the market - Jeff Reeves's Strength in Numbers - MarketWatch

3 risks that could crash the market - Jeff Reeves's Strength in Numbers - MarketWatch:



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3 signs stocks are overpriced - Brett Arends's ROI - MarketWatch

3 signs stocks are overpriced - Brett Arends's ROI - MarketWatch:

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Public transport fare review: 8 things you should know

Public transport fare review: 8 things you should know:

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Chinese Stocks to Trail World for Fifth Year: Chart of the Day - Bloomberg

Chinese Stocks to Trail World for Fifth Year: Chart of the Day - Bloomberg:
Chinese stocks may trail global peers for a fifth straight year as higher borrowing costs hurt earnings and a flood of initial public offerings divert funds from existing shares, according to Bank Julius Baer & Co.

The CHART OF THE DAY shows the Shanghai Composite Index’s lowest price-earnings ratio on record versus the MSCI All-Country World Index has failed to lure investors. The Chinese benchmark gauge has underperformed the global measure every year since the start of 2010, the lower panel shows, while the number of new accounts opened to trade shares in the most-populous nation has dropped 94 percent from the 2007 peak.

The Shanghai gauge lost 5 percent this year through yesterday in the worst start since 2002, as Bank of China Ltd. (3988) touched a record low and China Life Insurance Co. fell for seven of the past eight days. A cash crunch in the interbank market last month spurred Chinese companies to offer bonds at the highest yields since the 1997 Asian financial crisis, while the securities regulator has approved about 50 IPOs to end a more-than yearlong freeze in first-time sales.

“There are concerns about liquidity, with IPOs restarting,” said Kelvin Wong, an analyst at Julius Baer in Hong Kong. “There’s a lack of interest in big-cap names like banks and insurers. Stocks will still have quite a positive return this year but may underperform global markets.”
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Goldman's Kostin: Stocks are starting to look overvalued - The Tell - MarketWatch

Goldman's Kostin: Stocks are starting to look overvalued - The Tell - MarketWatch:

'via Blog this'

Goldman's Kostin: Stocks are starting to look overvalued - The Tell - MarketWatch

Goldman's Kostin: Stocks are starting to look overvalued - The Tell - MarketWatch: "“The multiple expansion cycle provides another lens through which we view equity valuation. There have been nine multiple expansion cycles during the past 30 years. The P/E troughed at a median value of 10.5x and peaked at a median value of 15.0x, an increase of roughly 50%. The current expansion cycle began in September 2011 when the market traded at 10.6x forward EPS and it currently trades at 15.9x, an expansion of 50%. However, during most (7 of the 9) of the cycles the backdrop included falling bond yields and declining inflation. In contrast, bond yields are now increasing and inflation is low but expected to rise.

“Simply put, the earnings yield gap between the S&P 500 and ten-year Treasury yields currently equals about 325 bp. Goldman Sachs Economics forecasts bond yields will creep higher to 3.25% by year-end 2014, a rise of just 25 bp. If the earnings yield gap remains unchanged, then the ‘fair value’ multiple according to the Fed model would be 15.2x at year-end 2014.”"

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ARA Asset Management: Tentacles of Gowth

ARA Asset Management: Tentacles of Gowth:
Tentacles of Gowth

• Acquisition of real estate platform in Korea ;
immediate foothold into a new market
• Private Funds business continue to grow steadily
• BUY with SOTP target price of S$2.08
Acquisition of a fund management platform in Korea,
with a potential to grow further. ARA recently entered
into a conditional sale and purchase agreement for the
acquisition of Macquarie Real Estate Korea Limited (“MREK”)
for an undisclosed sum. MREK manages two privately held
REITs with an AUM of KRW588.4bn (US$554.1m). We view
this M&A transaction positively as it will enable ARA to gain
an immediate foothold into Korea, a new market for the
group. Through MREK, an established real estate platform,
ARA will gain valuable experienced personnel and new
partnerships with investors. In addition, we see potential
synergies and growth through the launch of new products,
tapping a larger investor base going forward.

Growing private fund business. The private fund arm
continues to grow steadily with the launch of a new platform,
Morningside Investment Partners, LLC (MIP) and a US-based,
public pension fund has committed US$240m as seed capital.
MIP, which has an initial term of eight years, will pursue a
core-plus strategy of investing in real estate assets in
Singapore/ Malaysia/Hong Kong. This complements ARA’s
suite of different fund products that focuses in other
geographic regions. Together with MREK, fees from MIP will
contribute positively to a higher recurring base in 2014.

BUY, TP S$2.08 maintained. We believe that the group
remains on track to meet its targeted S$2bn growth in AUM
for 2014, supported by new private funds, while its REITs
continue to acquire (Suntec, Fortune and Prosperity) and grow
its recurring income fee base. Maintain our BUY Call, SOTP
target price of S$2.08. This is based on 20x PE of its REIT/fund

'via Blog this'

Did Soros Just Predict a China Crash? - Bloomberg

Did Soros Just Predict a China Crash? - Bloomberg:

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BMW at $213,000 Is Singapore Way to Encourage Train Rides - Bloomberg

BMW at $213,000 Is Singapore Way to Encourage Train Rides - Bloomberg:

'via Blog this'

Watch Cashin: This could spark 'outright selling'

Watch Cashin: This could spark 'outright selling':

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Treasurys skid after strong ADP report - Bond Report - MarketWatch

Treasurys skid after strong ADP report - Bond Report - MarketWatch:

'via Blog this'

Treasurys skid after strong ADP report - Bond Report - MarketWatch

Treasurys skid after strong ADP report - Bond Report - MarketWatch:

'via Blog this'

Treasurys skid after strong ADP report - Bond Report - MarketWatch

Treasurys skid after strong ADP report - Bond Report - MarketWatch:

'via Blog this'

Economic Calendar

Economic Calendar:

'via Blog this'

Fed minutes, ADP jobs data: Clues about tapering and labor market - Capitol Report - MarketWatch

Fed minutes, ADP jobs data: Clues about tapering and labor market - Capitol Report - MarketWatch:

'via Blog this'

Looking at ARA Asset Management Limited through the Eyes of an Investing Master | The Motley Fool

Looking at ARA Asset Management Limited through the Eyes of an Investing Master | The Motley Fool:

'via Blog this'

Goldman to JPMorgan Say Sell Emerging Markets After Slide - Bloomberg

Goldman to JPMorgan Say Sell Emerging Markets After Slide - Bloomberg:

'via Blog this'

China’s Credit Hole Seen Limiting 2014 Growth Prospects - Bloomberg

China’s Credit Hole Seen Limiting 2014 Growth Prospects - Bloomberg:

'via Blog this'

What could go wrong for stocks? - Irwin Kellner - MarketWatch

What could go wrong for stocks? - Irwin Kellner - MarketWatch:

Welcome to the first item that could derail the market – disappointing corporate profits. Speaking of profits, here is another: profit-taking. After this recent run, few will be able to resist taking some money off the table. And whenever the urge to sell is greater than the urge to buy, stock prices invariably take a header.

Another caution sign is that nearly everyone expects another gain for stocks this year – especially after the last three – and that makes it all the more likely that the market may not cooperate.

What makes this year different from those of the recent past is the fact that the Federal Reserve is no longer actively seeking to keep the market afloat by making it extremely cheap for business to borrow money.

In anticipation of this, long-term interest rates have jumped by a full percentage point, underlining the need on the part of investors to minimize risk-taking. As a result, housing, a key support for this economy, appears to be slowing.

In conducting its tapering program, the Fed could easily misjudge the strength of the economy if it places too much emphasis on the unemployment rate and not enough on the employment rate.

The reported rate of unemployment could fall reflecting mainly people giving up looking for work, rather than finding jobs. The low level of the employment rate in the face of a fall in the unemployment rate would seem to bear this out.

If you are looking for reasons to be less bullish this year, you need look no further than Washington. Although all is quiet inside the Beltway for the moment, it would not take much for partisan politics to flare up and inject new monkey wrenches into the economic outlook.

There could be trouble in other countries, such as wars, currencies and the like. Back home, there could be something completely unexpected, like another recession.

One thing seems certain: stocks are unlikely to be as buoyant in the New Year as they were in the old. Let’s hope that at the very least they can stay afloat. 

Irwin Kellner is MarketWatch's chief economist.

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Record amounts flow into stock funds in 2013 - MarketWatch

Record amounts flow into stock funds in 2013 - MarketWatch:

'via Blog this'

Cash crunch signals policy dilemma for China's central bank

Cash crunch signals policy dilemma for China's central bank:

'via Blog this'

Can oil markets handle another Iraq violence spike?

Can oil markets handle another Iraq violence spike?: ""No major oil fields are located in the west of Iraq. For now, there is no direct impact on current operations," Weinberg added. The most prized oil assets are in the north and south of the country."

'via Blog this'

ISM services index lags as new orders fall - MarketWatch

ISM services index lags as new orders fall - MarketWatch:

'via Blog this'

Britain’s modest fiscal consolidation pays off - Marsh on Monday - MarketWatch

Britain’s modest fiscal consolidation pays off - Marsh on Monday - MarketWatch:

'via Blog this'

New year, new woes for China stocks

New year, new woes for China stocks: ""People haven't been paying enough attention to the stock market," he said. "They've been looking at GDP [gross domestic product] numbers, while the stock market has been telling them that something isn't right there. Does it [the stock market] go down from here? I think so.""

'via Blog this'

Treasury Yields Climb to Highest Since 2011 as Tapering to Begin - Bloomberg

Treasury Yields Climb to Highest Since 2011 as Tapering to Begin - Bloomberg:

'via Blog this'

China is No. 1 risk for world economy: George Soros - The Tell - MarketWatch

China is No. 1 risk for world economy: George Soros - The Tell - MarketWatch: "the major uncertainty facing the world today is China, writes the billionaire investor in a column for the Project Syndicate website. He says: “There is an unresolved self-contradiction in China’s current policies: restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years.”

The People’s Bank of China moved to rein in debt in 2012, but then the world’s No. 2 economy experienced “real distress,” Soros writes. So China’s Communist Party reasserted its supremacy, ordering steelmakers to restart their furnaces and bankers to ease credit.

China’s economy turned around, and party leaders also announced major reforms in November. “These developments are largely responsible for the recent improvement in the global outlook,” Soros says."

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U.S. stocks end mostly lower after Bernanke speech - Market Snapshot - MarketWatch

U.S. stocks end mostly lower after Bernanke speech - Market Snapshot - MarketWatch:

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How to lose money in the market in a hurry - Mark Hulbert - MarketWatch

How to lose money in the market in a hurry - Mark Hulbert - MarketWatch:

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Li sells Nanjing IFC - The Standard

Li sells Nanjing IFC - The Standard: "

Tycoon Li Ka-shing has sold his only commercial property in Nanjing for about 3 billion yuan (HK$3.84 billion) to mainland conglomerate SanPower Group
This is the fourth time that the chairman of Cheung Kong Holdings (0001) has offloaded assets in the mainland since last August, for a total of at least 12.6 billion yuan.

A SanPower Group spokesman said the group has acquired the Nanjing IFC for more than 2 billion yuan from ARA Asset Management Ltd, a subsidiary of Cheung Kong, Xinhua News Agency reported yesterday.

Other sources close to the deal said the price tag could reach up to 3 billion yuan."

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China’s big warning for US markets

China’s big warning for US markets:

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'Dr. Doom' Roubini gets bullish on global economy

'Dr. Doom' Roubini gets bullish on global economy:

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