How long can the U.S. dollar defy gravity?

Bribing Your Way Into Yale Is a Waste of Money

2019-03-14T21:22:00.000-07:00

Students who apply to Ivy Leagues and then choose to go elsewhere end up faring just as well in life.

Any parents who bribed and cheated to get their kids into elite universities would be buying into a pervasive misconception. It’s easy to assume that because students from elite schools make more money (they do), that going to those schools is what causes them to make more money. This is wrong.

How do we know? When researchers have investigated the value of going to a top high school or college, they’ve found the long-term financial benefits are, as one paper says, “comparable to zero.” That is, students with the same abilities and ambitions will do equally well whether they go to an elite college or not. It’s the kids who make the school – not the school that makes the kids.

In one telling study, a team of Princeton University economists followed students of comparable test scores and grades who applied to the most elite high school in the Boston area – Boston Latin. Some were admitted and others were rejected. The researchers also looked at comparable students accepted and rejected by second-tier selective high schools in the Boston area.

Boston Latin boasts much higher average SAT scores than second-tier schools, and those in turn boasted of higher SATs scores than the nonselective schools. The implication is the quality of education at these elite education boosts SAT scores.

But when the economists compared students with similar grades and test scores at the time they applied to high school, they found their later SAT scores were indistinguishable, whether they went to Boston Latin or not. The economists did the same comparison between similar students applying to second-tier schools and those attending unselective high schools, and again found SAT scores were indistinguishable.

The findings suggest there was absolutely no SAT advantage to going to the better schools. The higher average SATs in Boston Latin were probably caused by the selection process; the schools only admitted kids who did well on other tests, and those other test scores correlate to SAT scores.

This is all laid out in the book “The Formula: The Universal Laws of Success,” which I’ve been rereading. As the author, Albert-Laszlo Barabasi, wrote: “We’ve established that, as a group, the Boston Latin kids do perform better when compared to their counterparts. … What the data tells us, though, is that the difference … is not because the school enhances their performance. It’s because high achievers continue to excel no matter what education a school offers.”

Another pair of economists, one also at Princeton University and the other at the research firm Mathematica, demonstrated that going to an Ivy League school doesn’t help people make more money. They found it’s more likely that Ivy League schools select for the kinds of students likely to make more money as adults.

In an initial study in 2002 and a follow-up study published in 2011, they compared students at Ivy League schools to those who were accepted but chose, perhaps for financial or personal reasons, to attend less selective colleges. In the second study, they also included students who had applied to Ivy League schools but were not accepted.

On average, Ivy League graduates come out earning twice as much as graduates of less selective schools, but when the researchers compared only students who were accepted into the Ivy League, there was no difference between those who went and those who did not, provided those rejected graduated from some other college.

The 2011 study, which was popularized in this New York Times column, showed that future financial success for comparable students didn’t even hinge on where they were accepted, but did correlate with where they applied. The researchers speculate that applying to Harvard shows ambition, and ambition is correlated to financial success.

If the Ivy League bribery scandal played out as prosecutors suggest, with parents paying off officials, then some of the applicants deserve sympathy – for they are, like everyone else, limited by their own talents and ambitions. And those honest families trying to follow the rules can take heart that even if the cheaters hadn’t been caught, they wouldn’t have bribed their way into anything of lasting value.

8 Weird Signs Your Body’s Trying to Tell You Something

2018-09-10T22:44:00.002-07:00

Most of the time, a twitchy eyelid or an irksome knee, is just that—no biggie. But there are instances when a seemingly insignificant health quirk may be your body’s way of saying, Hey there, let’s go to the doc.
“Most people know the major symptoms of something like a stroke or heart attack, but sometimes you get weird presentations of serious problems,” says Jake Deutsch, M.D., founder and clinical Director of CURE Urgent Care in New York and an Attending Physician in the ER at Hackensack University Medical Center. Here are eight to watch for.
Check-Ups Every Guy Needs >>>

1. A Cough that Won’t Quit

If you get over a nasty cold and your cough lingers for weeks, you may have developed what’s called post-bronchitis syndrome.
“It’s like asthma,” says Mitchell Gaynor, M.D., assistant clinical professor of medicine at Weill Cornell Medical College and author of The Gene Therapy Plan: Taking Control of Your Genetic Destiny with Diet and Lifestyle. “People think unless you’re wheezing and short of breath it’s not asthma, but that’s not true.”
What’s happening: Your airways temporarily get smaller.
“The cough responds to an inhaler, so you treat it like asthma until it resolves in a few months,” he says.
Training Q&A: Should You Exercise When You’re Sick? >>>

2. You’re the Coolest Guy in the Room—Literally

Are you always reaching for a hoodie? Frequently getting the chills when no one else is? Have your thyroid function tested; it could be a sign of an underactive thyroid, Gaynor says. Other symptoms to look out for: a puffy face, fatigue, hair loss (on your body, too) and weight gain.
6 Best Fixes for Hair Loss >>>

3. Brain Fog

If you’re feeling a little out of it despite getting a good night’s sleep (and a strong cup of coffee), think about what you’ve been eating. Loading up on bread and pasta? Also have white spots on your tongue? Go see a gastroenterologist as you could have celiac disease, Gaynor says.
“There’s a huge gut-brain connection, and if gluten is causing inflammation in your gut, you’re malabsorbing nutrients and you’ve disturbed your gut’s microbiome,” he adds. “You may not have any stomach upset except that you feel bloated sometimes.”
7 Easy Ways to Beat Bloat >>>

4. A Weird Taste in Your Mouth

It may be metallic—or just a different, unpleasant taste. Regardless, if it’s persistent and you haven’t recently had a cold (which can affect taste buds), get checked out and bring all the vitamins and over-the-counter meds you regularly take to the doctor with you.
“Overdosing on vitamins can cause it,” Deutsch says.
Multis, as well as iron and calcium supplements, and even zinc lozenges can cause it. The taste usually goes away when the vitamins flush out of your system, but if you’re taking daily vitamins, you keep replenishing the (too-high) levels. Not popping pills? It’s even more important to see your doc: “The taste could mean a more complicated problem with your sinuses or a tumor compressing nerves that help with your sense of smell and taste,” Deutsch says.
Taking Too Many Supplements May Increase Your Cancer Risk >>>

5. Bleeding Gums

Seeing red when you floss or brush is a signal of gingivitis or periodontal disease. That’s not so weird, but what is: If you ignore it, you increase your risk for various chronic diseases.
“Inflammation in the gums releases inflammatory mediators into the blood that can damage the lining of blood vessels, which allows plaque to build up,” Gaynor says.
Aside from heart problems, the inflammation can also increase your risk for type-2 diabetes.
Low-Fat Yogurt Protects Against Diabetes >>>

6. You Crave and Chew Ice

Have you recently become a vegan? Crunching away on cubes can signal an iron deficiency. Experts aren’t exactly sure what’s behind the link, but a study in the journal Medical Hypothesis suggests that what people are really after is the stimulating effects from the crunch, crackle, and cold. If you’re deficient in iron, there may be less oxygen in the blood (iron is needed to transport O2) so you’re usually fatigued, Deutsch says.
“People may crave the reaction they get from chewing ice—it wakes them up.”
Should You Go Vegan Before 6? >>>

7. Come-and-go Jaw Pain

Intermittent shooting pains in the side of your jaw, at the hinge, is often diagnosed as TMJ, or temporal mandibular joint disorder, caused by damaged cartilage or misalignment. But it can be misdiagnosed, and instead indicate Lyme disease.
“Lyme disease affects certain nerves that causes the pain in the jaw,” Gaynor says. “In the old days before we knew about the connection, we treated it as TMJ.”
About 30,000 cases of Lyme are reported to the CDC each year, but new data estimates the number may actually be closer to 10 times that.
“Lyme disease has a number of weird presenting symptoms—it could be anything from irregular heart rhythms and fatigue to manic depression,” Gaynor says.
What Healthy Guys Need to Know About Their Heart >>>

8. Never-ending Hiccups

Aside from driving you insane, hiccups that last for a day or two or longer could be triggered by lung or esophageal cancer, says Gaynor.
“The central nervous system controls hiccups and these types of cancers emit antibodies that affect the part that trigger hiccups,” he says.
Persistent hiccups might also indicate a stroke, Deutsch says.
10 Ways to Cancer-Proof Your Life >>>

3 Reasons You Might Get Less Money Out of Social Security Than Expected

2018-09-10T22:38:00.001-07:00

3 Reasons You Might Get Less Money Out of Social Security Than Expected

Counting on Social Security? These moves might set you back financially.

Maurie Backman

(TMFBookNerd)

Sep 10, 2018 at 7:04AM

Millions of older Americans count on Social Security to pay the bills later in life. But if you're not careful, you could end up with far less money from Social Security than you might have initially anticipated. Here are three reasons why your benefits might come in lower than expected -- and what to do about them.

1. You're planning to file before your full retirement age

Your Social Security benefits are based on your earnings history -- specifically, your top 35 working years. But the age at which you file for benefits could cause them to go down. For each year you file ahead of full retirement age, or FRA, your benefits will be reduced by a certain percentage, up to a maximum of 30% (assuming your FRA is 67 and you file at the earliest possible age of 62).

IMAGE SOURCE: GETTY IMAGES.

Here's what full retirement age looks like depending on the year you were born:

Year of Birth	Full Retirement Age
1943–1954	66
1955	66 and 2 months
1956	66 and 4 months
1957	66 and 6 months
1958	66 and 8 months
1959	66 and 10 months
1960	67

DATA SOURCE: SOCIAL SECURITY ADMINISTRATION.

Let's say your earnings record entitles you to $1,500 a month at an FRA of 67. If you file at 62 instead, you'll knock your monthly benefits down to $1,050. Worse yet, that reduction will remain in effect for the rest of your life (unless you withdraw your application for benefits and repay the full amount you collect within a year of claiming).
Now if you happen to find yourself in a situation in which you need money immediately -- say, you've lost your job or encounter a series of costly medical issues -- then you may have no choice but to file for Social Security before reaching FRA. Otherwise, know when you're entitled to collect your benefits in full, and aim to hold off until FRA before pulling the trigger.

2. Your earnings history is inaccurate

As stated above, your Social Security benefits are based on your income during your top 35 years of earnings. But if the Social Security Administration (SSA) has erroneous information on file, you could end up losing out.
Imagine you earned $85,000 your last year on the job, only for some reason, the SSA only has $48,000 on file. It's odd, but it could happen. Similarly, the SSA might have gaps in your work history so that it only has you down as working for 32 years instead of 35. If that's the case, you'll get $0 factored into your personal benefits calculation for three years, thereby bringing down the total amount you're entitled to collect.
To avoid losing money to what could be nothing more than an administrative glitch, be vigilant about checking your earnings record and report any mistakes you find to the SSA as soon as you spot them. Keep in mind that the SSA won't send copies of your earnings statements unless you're 60 or older, so if you're younger than 60, you'll need to create an account on the SSA's website and review them there.

3. You're aiming to work and take benefits simultaneously

Though you're allowed to work and collect Social Security at the same time, you should be aware that if you do, you risk having a portion of your benefits withheld depending on how much you earn. For the current year, your first $17,040 in income is exempt from what's known as the Social Security earnings test. Beyond that, however, you'll lose $1 in benefits for every $2 of earnings you bring in so that if you earn $18,040 a year, you'll have $500 in benefits withheld.
That said, if you'll reach FRA later this year, your first $45,360 of income is exempt from the earnings test. After that, you'll lose $1 in benefits for every $3 you earn.
Keep in mind, however, that the above rules only come into play if you haven't yet reached FRA. Once FRA kicks in, you can earn as much as you'd like and it won't impact your benefits whatsoever -- which is yet another good reason to hold off on filing until that point. Another thing you should know is that whatever money is withheld from your Social Security payments initially will be added back once FRA hits. In other words, you're not losing that money forever -- you're just not getting it right away.
If you're counting on Social Security to provide a sizable portion of your income, then be sure to read up on the program's various rules. The more you know about Social Security, the greater your chances of getting the most money possible from it.

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technology and Work Life balance

2018-09-10T22:33:00.001-07:00

In Britain, calls for a 4-day week: Can it be done?

LONDON — Increasing numbers of workplaces around the world are embracing technology, and a greater array of tasks is being automated. In the eyes of one major British labor organization, that need not be a threat to workers, but may instead offer an opportunity: less time working.

“I believe that in this century, we can win a four-day working week, with decent pay for everyone,” Frances O’Grady, the head of the Trades Union Congress, an umbrella group, said in a speech at the labor federation’s annual conference. That, she said, would help workers reap the benefits of technological change.

The economist John Maynard Keynes had predicted that people would eventually work for just 15 hours a week. Instead, technology has led to unpredictable, more intensive and longer hours at work, the Trades Union Congress said. “This is a return to the days of piecework, creating a culture where workers are required to be constantly available to work,” the group said in a report.
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It is not the only organization scrutinizing how technology affects productivity and work-life balance.
Who is experimenting with a shorter workweek?

• A trial of a six-hour workday in Goteborg, Sweden, led to happier, healthier and more productive employees. The problem: It was too expensive.

•Perpetual Guardian, a firm that manages trusts and estates in New Zealand, instituted a four-day week and kept wages the same. It said productivity increased among its staff when working hours were reduced to 32 hours from 40. The company is now considering whether to make the change permanent.

• In an effort to close a hefty gap in its state budget in the years after the 2008 financial crisis, Utah trimmed the workweek. Proponents said the move had the effect of improving the offering of government services available online and was better for the environment, but the state also benefited from volunteer groups picking up the slack when government organizations were closed.
•Amazon, the online retail behemoth, has tested a small pilot program for a 30-hour workweek, where staff worked reduced hours, though for reduced pay.

What else is being done to guard against encroaching technology?

•France has created a law giving workers the “right to disconnect.” It requires companies with more than 50 employees to negotiate a new protocol to ensure that work does not spill into after-work hours, an effort to prevent cases of burnout, which officials say are becoming more prevalent.

• Several measures have been taken in Germany to improve work-life balance. The country’s Labor Ministry ordered its supervisors in 2013 not to contact employees outside office hours. In 2011, the German automaker Volkswagen began shutting off its BlackBerry servers at the end of the workday. Daimler, another German car company, deletes emails sent to employees while they are on vacation.
So will we all have 3-day weekends soon?

Unfortunately not. It may be feasible for some companies, but it is unlikely to happen across entire economies in the years to come.
Any such change, even if it were possible, would not occur overnight, said Alex Bryson, a professor who specializes in labor studies at University College London. Companies that wanted to limit working hours would have to make investments to help their workers become more productive, which would take time and cost money, he said.

“It’ll be a gradual switch,” added Paul Swinney, the head of policy and research at the Center for Cities, a London-based think tank. “We’ll see a bit of that with some people deciding to work four days one week and five another. It’ll change gradually along with social norms.”
“In 50 or 100 years’ time, it may be that four days is the norm,” he continued, “but we shouldn’t expect it by 2020.”

Republicans have become ‘silent’ on deficit reduction, Romney says

2018-09-10T22:21:00.001-07:00

Republicans have become ‘silent’ on deficit reduction, Romney says

Mitt Romney, the former Republican presidential nominee and current Senate hopeful in Utah, on Monday called out members of his party for putting their long-espoused goal of deficit reduction on the back burner once President Trump won the White House, in a rare mention of the issue by a candidate in this year’s midterm elections.

In a message posted on his Senate campaign website, Romney said that Republicans “have been shouting about this as long as I can remember.”
“We called for an amendment to balance the budget,” he said. “Just a few years ago, the Tea Party movement brought new energy to the issue. But now that Republicans are in charge in Washington, we appear to have become silent about deficits and debt.”
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Romney’s 2012 running mate, now-House Speaker Paul D. Ryan (R-Wis.), built a reputation as a deficit hawk and a vocal advocate for entitlement reform over his years in Washington. But with Trump’s ascension to the White House, Ryan and other Republicans on Capitol Hill have largely punted on deficit reduction , working instead to pass a $1.4 trillion tax cut as well as a sweeping $1.3 trillion spending bill.

Romney made no mention of either measure in the statement on his campaign website. But he pointed to the country’s $21 trillion national debt as well as a recent forecast by the Congressional Budget Office that deficits will soon balloon to more than $1 trillion per year.
“I’m not saying we should immediately cut one trillion dollars from government spending,” Romney said. “But I am saying, with a booming economy, full employment, a soaring stock market, and record asset values, we should be shrinking the deficit, not growing it.”

In the post, Romney, the former chairman of Bain Capital, sought to strike an everyman tone. He related the story of how he bought his “first house” and was shocked to realize that of his $246 monthly mortgage payment, $241 went toward interest.

That led to a change in how he approached spending, Romney said.

“Henceforth, credit card balances would be paid on-time and in-full,” he said. “If we wanted something we could not immediately afford, we would save before we bought it; I figured we could get about twice as much stuff by saving rather than by buying on credit.”

In his past campaigns, Romney has at times stumbled when making comments about wealth. In 2012, he mentioned that his wife, Ann Romney, drives “a couple of Cadillacs” while he drives “a Mustang and a Chevy pickup truck,” a comment that prompted his campaign to offer up details and drew attention to the fact that his family owns several cars in different states.
He has also previously described his net worth as “between 150 and 200 some-odd million,” an estimate that raised some hackles due to its breadth.
felicia.sonmez@washpost.com

Capitalism the Apple Way vs. Capitalism the Google Way

2017-07-13T04:24:00.000-07:00

Whichever company’s vision wins out will shape the future of the economy.

While lots of attention is directed toward identifying the next great start-up, the defining tech-industry story of the last decade has been the rise of Apple and Google. In terms of wealth creation, there is no comparison. Eight years ago, neither one of them was even in the top 10 most valuable companies in the world, and their combined market value was less than $300 billion. Now, Apple and Alphabet (Google’s parent company) have become the two most valuable companies, with a combined market capitalization of over $1.3 trillion. And increasingly, these two behemoths are starting to collide in various markets, from smartphones to home-audio devices to, according to speculation, automobiles.

But the greatest collision between Apple and Google is little noticed. The companies have taken completely different approaches to their shareholders and to the future, one willing to accede to the demands of investors and the other keeping power in the hands of founders and executives. These rival approaches are about something much bigger than just two of the most important companies in the world; they embody two alternative models of capitalism, and the one that wins out will shape the future of the economy.

In the spring of 2012, Toni Sacconaghi, a respected equity-research analyst, released a report that contemplated a radical move for Apple. He, along with other analysts, had repeatedly been pushing Apple’s CEO, Tim Cook, to consider returning some of Apple’s stockpile of cash, which approached $100 billion by the end of 2011, to shareholders. Cook, and Steve Jobs before him, had resisted similar calls so that the company could, in the words of Jobs, “keep their powder dry” and take advantage of “more strategic opportunities in the future.”

But there was another reason Apple wouldn’t so readily part with this cash: The majority of it was in Ireland because of the company’s fortuitous creation of Apple Operations International in Ireland in 1980. Since then, the vast majority of Apple’s non-U.S. profits had found their way to the country, and tapping into that cash would mean incurring significant U.S. taxes due upon repatriation to American soil. So Sacconaghi floated a bold idea: Apple should borrow the $100 billion in the U.S., and then pay it out to shareholders in the form of dividends and share buybacks. The unusual nature of the proposal attracted attention among financiers and served Sacconaghi’s presumed purpose, ratcheting up the pressure on Cook. A week later, Apple relented and announced plans to begin releasing cash via dividends.

The results of Sacconaghi’s report were not lost on Silicon Valley, and Google responded three weeks later. At the time, the share structure that the company put in place when it went public in 2004 was becoming fragile. This original arrangement allowed Google’s founders to maintain voting control over the company, even as their share of ownership shrunk as more shares were issued. The explicit premise was that this structure would “protect Google from outside pressures and the temptation to sacrifice future opportunities to meet short-term demands.”

World’s Richest Made $237 Billion in 2016

2016-12-28T09:44:00.001-08:00

It has been a good year for the Big Bulls in the market, despite the bitter experience for small caps.

China, Brexit, Trump trigger wild ride for global equities
Rich get richer as fortunes whipsaw through $4.8 trillion

In a year when populist voters reshaped power and politics across Europe and the U.S., the world’s wealthiest people are ending 2016 with $237 billion more than they had at the start.

Triggered by disappointing economic data from China at the beginning, the U.K.’s vote to leave the European Union in the middle and the election of billionaire Donald Trump at the end, the biggest fortunes on the planet whipsawed through $4.8 trillion of daily net worth gains and losses during the year, rising 5.7 percent to $4.4 trillion by the close of trading Dec. 27, according to the Bloomberg Billionaires Index.

“In general, clients rode through the volatility,” said Simon Smiles, chief investment officer for ultra-high-net-worth clients at UBS Wealth Management. “2016 ended up being a spectacular year for risk assets. Pretty remarkable given the start of the year.”

The gains were led by Warren Buffett, who added $11.8 billion during the year as his investment firm Berkshire Hathaway Inc. saw its airline and banking holdings soar after Trump’s surprise victory on Nov. 8. Buffett, who’s pledged to give away most of his fortune to charity, donated Berkshire Hathaway stock valued at $2.6 billion in July.

Berkshire Bonanza

Warren Buffett

Photographer: Daniel Acker/Bloomberg

The U.S. investor reclaimed his spot as the world’s second-richest person two days after Trump’s victory ignited a year-end rally that pushed Buffett’s wealth up 19 percent for the year to $74.1 billion.

“2016’s been event-driven with global news driving prices rather than fundamentals,” said Michael Cole, president of Ascent Private Capital Management, which has about $10 billion of assets under administration. “The belief that Trump is going to come in and deregulate big parts of the economy is driving the markets right now.”

The individual gains for the year were dominated by Americans, who had four of the five biggest increases on the index, including Microsoft Corp. co-founder Bill Gates, the world’s richest person with $91.5 billion, and oilman Harold Hamm.

The country’s richest were largely opposed to a Trump presidency during the election, including Dallas Mavericks owner Mark Cuban, who told the media in May that stocks could fall as much as 20 percent if Trump were to win the election.

Wealth Administration

U.S. billionaires -- including Buffett -- favored Trump’s rival Hillary Clinton. Still, they profited from his victory when they added $77 billion to their fortunes in the post-election rally fueled by expectations that regulations would ease and American industry would benefit.

The New York real estate mogul is building a cabinet heavy on wealth and corporate connections, and light on government experience, a mix that hedge fund billionaire Ray Dalio said last week would unleash the "animal spirits" of capitalism and drive markets even higher. Dalio is the world’s 63rd-richest person with $14.1 billion.

Wilbur Ross

Photographer: Drew Angerer/Getty Images

Investors and executives welcomed Trump’s picks, including billionaire Wilbur Ross to lead the Department of Commerce and former Goldman Sachs Group Inc. executive Steven Mnuchin as his Treasury secretary, who have a combined net worth of at least $5.6 billion, according to the index.

“You know, I was not opposing Trump as much as most people,” Saudi Arabian billionaire Mohamed Bin Issa Al Jaber said in a Dec. 11 interview. “He’s capable and -- as a businessman -- he’s shrewd about the bottom line. The people he’s surrounding himself with have baggage but they’re also successful and shrewd.”

France’s Bernard Arnault was the sole non-American representative among the five best performers, adding $7.1 billion to take his fortune to $38.9 billion. His LVMH Moet Hennessy Louis Vuitton SE said the Chinese luxury-goods market is improving.

Gates remained the world’s richest person throughout the year. Amancio Ortega, Europe’s richest person and founder of the Zara clothing chain, was in second place on the index for most of the year until he ceded it to Buffett in November. Ortega, who dropped $1.7 billion in 2016, is the world’s third-richest person with $71.2 billion.

Harold Hamm

Photographer: Andrew Harrer/Bloomberg

Wildcatter Hamm’s fortune was propelled by a strengthening oil price and expectations a Trump administration will slash fossil-fuel regulations. Hamm added $8.4 billion to more than double his fortune to $15.3 billion. He led the 49 energy, metals and mining billionaires, who were the best-performing category on the ranking, adding $80 billion and reversing the $32 billion fall they had in 2015.

Billionaire brothers Charles and David Koch each dropped $2 billion after Koch Industries reported on its website that annual revenue is estimated to be "as high as $100 billion," compared with the estimate of "as much as $115 billion" that the conglomerate published on the site previously. Company spokesman Rob Carlton stated in a Nov. 17 e-mail that Koch revenue fluctuates with the price of commodities.

Technology fortunes were the second-best performing on the ranking, with 55 billionaires adding $50 billion to their fortunes over the year, despite worries that a Trump presidency might introduce policies that could hurt their companies.

“I think we’ll have to see what the policies of the administration are,” Google co-founder Sergey Brin told the media gathered on the red carpet of the annual Breakthrough Prize gala in Silicon Valley in December. “I certainly hope they will be pro-science, pro-technology and all the things this world has really benefited from.”

Jeff Bezos

Photographer: Patrick Fallon/Bloomberg

Amazon.com Inc. founder Jeff Bezos, who doubled his fortune to $60 billion in 2015, led gains among technology executives again this year, rising $7.5 billion in 2016 on robust sales growth at the online retailer. He was followed by Facebook Inc. co-founder Mark Zuckerberg, who added $5.4 billion.

Hidden Wealth

Some of the industry’s biggest relative gains went to the founders of the world’s leading startups, such as Uber Technologies Inc.’s Travis Kalanick and Snap Inc.’s Evan Spiegel. The so-called "unicorn" billionaires, which include Spotify Inc. co-founder Martin Lorentzon, who was identified as a billionaire for the first time in 2016, secured a series of mammoth funding rounds while moving closer to testing their fortunes on the public markets.

Other billionaires uncovered by the Bloomberg index in 2016 included the father and son behind Jose Cuervo tequila, New York real estate developer Axel Stawski and Kosovo construction tycoon Behgjet Pacolli.

Marcos Galperin

Photographer: David Paul Morris/Bloomberg

The index also unveiled 11 surviving family members of reclusive Thai entrepreneur Chaleo Yoovidhya, the inventor of Red Bull, whose heirs share a combined $22 billion net worth, the world’s largest energy-drink fortune. Three billionaires emerged in Argentina, including the country’s first technology billionaire Marcos Galperin, as markets rose on enthusiasm for President Mauricio Macri’s finance-friendly economic policies.

Wang Jianlin

Photographer: Justin Chin/Bloomberg

Most fortunes outside of the U.S. didn’t get the same boost from Trump’s victory, and were hurt by fluctuating commodities prices and the rise of the dollar, the currency used for the Bloomberg ranking. Nine of the 10 biggest decliners in 2016 were from outside the U.S., led by China’s second-richest person, Wang Jianlin, who lost $5.8 billion. Wang ended the year as the world’s 21st-richest person with $30.6 billion.

Nigeria’s Aliko Dangote, the richest person in Africa, lost $4.9 billion or one-third of his wealth as the combined effect of falling oil prices and the June devaluation of the naira pushed him to No. 112 with $10.4 billion. Dangote was the world’s 46th-richest person in June.

Saudi Arabia’s Prince Alwaleed Bin Talal Al Saud fell $4.9 billion, a 20 percent drop. Alwaleed said in November that all of his stakes in public companies including Citigroup Inc. are potentially for sale, reversing a longstanding policy that some of his most prized shareholdings were “forever.”

Chinese Downturn

Wealth creation in China turned negative for the first time since the inception of the Bloomberg index five years ago, with the country’s richest losing $11 billion in 2016 amid a slump in the Shanghai Shenzhen CSI 300 index and a 7 percent decline for the yuan against the dollar.

Alibaba Group Holding Ltd. founder Jack Ma closed the year with $33.3 billion, adding $3.6 billion in 2016. He dropped in and out of his place as Asia’s richest person for the first four months of the year before claiming it for good in May after Alibaba’s finance affiliate, which is laying the groundwork for an initial public offering expected as soon as next year, completed a record $4.5 billion equity fundraising round.

China has 31 billionaires on the index with $262 billion, trailing the U.S.. which has 179 billionaires who control $1.9 trillion, and Germany, whose 39 individuals have $281 billion. Russian billionaires also began to put the negative effects of U.S. and European sanctions behind them, reversing the combined $63 billion declines for 2014 and 2015 and adding $49 billion in 2016.

Looking Ahead

Wealth managers for the world’s richest are girding themselves for similarly frenetic start to 2017 as the seismic changes voters demanded this year start to take shape.

"Expect the unexpected," said Sabine Kaiser, founder of SKadvisory, which advises family offices on venture capital and private equity. "I don’t think family offices are overly concerned or getting too nervous but after Brexit and Trump they’ve resigned themselves to market volatility."

from

https://www.bloomberg.com/news/articles/2016-12-28/as-populists-won-2016-ballots-world-s-richest-made-237-billion

Half a Million Jobs Lost as Textile Crisis Hits Pakistan's Economy

2016-09-20T21:55:00.000-07:00

More than 500,000 jobs lost in two years as factories close
Improving power, gas supply may halt export drop: central bank

A neglected waiting area, empty reception and dim lights greet visitors at what used to be the biggest textile factory in the northern industrial area of Pakistan’s economic hub.

At its peak Al-Abid Silk Mills Ltd. employed 7,600 employees in Karachi, now only a handful can be seen in the near-abandoned garment workshop. It’s one of hundreds that have shut down over the past few years, contributing to Pakistan’s exports falling to their lowest in six years.

An abandoned textile factory.

Photographer: Asim Hafeez/Bloomberg

Exporters from South Asia’s second-largest economy, including textile manufacturers who account for more than half of all overseas shipments, say buyers have shifted to countries including Bangladesh and Vietnam as continual power outages impede their ability to meet order deadlines, while complaining that the government has provided scant support.

“The government has never planned how we need to go forward with the textile industry,” Naseem Sattar, the 80-year-old chief executive officer of Al-Abid, said as he smoked in his office in the derelict plant. “Such a factory is considered a national asset and we got no help.”

Despite a pick up in economic growth after the government submitted to an International Monetary Fund program in 2013 to avert a balance of payment crisis, Pakistan’s exports have fallen as global demand slows and the nation tries to overcome an energy shortage. Overseas shipments for the year through June fell to $21 billion, the lowest level since 2010, according to Pakistan Bureau of Statistics.

“Internally you have constraints on energy and then manufacturing keeping exports down,” said Turab Hussain, head of the economics department at the Lahore University of Management Sciences. “If oil prices go up and exports don’t pick up there will be pressure on your balance of payments and currency.”

About 100 member factories have shut down and at least 500,000 people have lost jobs in the past two years, according to Saleem Saleh, acting secretary general of All Pakistan Textile Mills Association, the biggest contributor to the nation’s textile exports. About two-thirds of the members of the Pakistan Bedwear Exporters Association have stopped working in the past five years, according to its head Shabir Ahmed.

Most factories shutting down are small or mid-sized plants unable to bear the extra cost of prolonged power outages. Meanwhile, larger factories have invested in their own power, including diesel generators, to cope with the nation’s electricity deficit of about 3,000 megawatts.

The IMF, which is set to conclude its three-year, $6.6 billion loan program with Pakistan at the end of this month, is pointing to a number of causes, including the local currency it says is overvalued by as much as 20 percent.

“The continued decline in exports is a cause for concern, to a good extent that’s due to a fall in international prices for cotton and other commodities,” Harald Finger, the IMF’s mission chief for Pakistan, said in a July interview. Domestically “there are security issues, there are continued power outages, even though they are declining now, that’s still a factor. There are issues around the business climate, and so on, and also one of these factors is also the real effective exchange rate.”

Yarn bobbins sit in a closed textile mill.

Photographer: Asim Hafeez/Bloomberg

About half of the Pakistan’s exports are shipped to six countries, while 40 percent of total textile exports are primary commodities, including cotton yarn sent to China, Minister of Commerce Khurram Dastgir Khan told lawmakers in Islamabad’s parliament on Sept. 5. Pakistan’s apparel exports grew less than half the pace of Bangladesh and Vietnam before the recent fall during 2005 to 2012, according to World Bank data.

For buyers, Pakistan’s competitors are also more alluring due to the country’s tarnished security image after years of insurgency, bombings and violence.

Security Perception

“If you can get the same price in Vietnam or India or Bangladesh, I think it’s still the case that most purchasers will still choose the other countries because their purchasing managers dare to go there,” said Mattias Martinsson, the Stockholm-based chief investment officer at Tundra Founder AB, which holds about $160 million in Pakistani stocks. “They can go freely around and don’t have to be afraid” which isn’t their perception of Pakistan, he said.

Even so, the country’s security situation has improved with an army push against insurgents after more than 100 students were killed by the Pakistani Taliban at a military school in 2014 in the northern city of Peshawar. About 449 people died in terrorist-related violence last year, the lowest in 10 years, according to the South Asia Terrorism Portal.

The government recognizes the industry’s malaise and Prime Minister Nawaz Sharif on a visit to Karachi on Sept. 8 said boosting exports is a top priority and his administration will soon announce relief measures.

‘Cannot Ignore’

Sharif is also pegging his 2018 re-election prospects on ending the daily power blackouts, relying on a surge of Chinese investment and projects worth $46 billion that were announced last year.

“Economic growth and exports are interlinked,” Sharif said. “We cannot afford to ignore our exports.”

A worker operates a sewing machine at a textile manufacturer in Karachi.

Photographer: Asim Hafeez/Bloomberg

Pakistan already announced in June azero-rated sales tax regime for five export industries, including textiles. Borrowing has become more attractive with the discount rate at its lowest in more than four decades. Sharif this month asked the ministry of commerce to arrange a duty-free import of five million bales of cotton to plug a domestic shortage this year.

Despite these measures, State Bank of Pakistan Governor Ashraf Mahmood Wathra says the nation needs to diversify products and exports markets away from those on a declining trend. However, he expects improved electricity and gas supplies this year to stem some of the drop in exports.

‘Very Happy’

“When I speak to industrialists, I see them more comfortable than two-to-three years ago,” Wathra said. Textile exporters complain about tax refunds being delayed by the authorities, but otherwise “they are very happy with the interest rate and refinance rate,” he said.

Sattar, whose factory used to make $100 million annual revenue at its peak, doesn’t agree. He wants to get his plant running again, but is unable to repay loans taken to purchase the milling machines. Sattar is now being hounded by banks and the country’s anti-graft agency, he said.

“If you are drowning, they push you further down,” he said. “Textiles are going away from Pakistan.”

Koreans Are Reluctant to Get Married, Let Alone Have Babies

2016-08-22T08:27:00.002-07:00

South Koreans are likely to have fewer weddings and babies this year than ever before, part of a demographic shift that risks hobbling the nation’s economy.

The number of marriages and births recorded during the first five months of 2016 hit the lowest levels for the same period in any year since the nation’s statistics office started compiling monthly data in 2000.

The figures underscore the challenge facing the government, which over the past decade has poured 80 trillion won ($72 billion) into efforts to reverse the falling birthrate. Prime Minister Hwang Kyo Ahn said this month that the country faces a crisis that threatens to limit long-term economic growth.

Many young South Koreans say they can’t afford to get married or have children. They cite housing costs as one of the biggest obstacles. Record-low interest rates meant to spur economic growth have fueled a property boom that has priced many of them out of the market. Meanwhile, the unemployment rate among those 15 to 29 years old is 9.2 percent—more than double the national average.

“Previous policies were focused on getting married women to have more babies, but a more fundamental problem could be that young people without jobs are finding it difficult to get married,” said Yoo Jin Sung, a Seoul-based research fellow at the Korea Economic Research Institute. “Youth unemployment is raising the age at which people get married and have their first babies, which can affect the total number of babies they plan to have.”

Women also say South Korea’s corporate culture makes life challenging for working mothers, leaving many reluctant to get married and have children.

Reversing the demographic tide is becoming more urgent. The country will pass two unwelcome milestones next year: its workforce will begin shrinking and people aged 65 and older will outnumber those 14 and below. Without successful government action, the economy’s potential growth rate will fall to 2 percent between 2026 and 2030, from about 2.7 percent now, the Hyundai Research Institute estimates.

The demographic decline is already entrenched: The number of women in their 20s and 30s is expected to fall to about 5.5 million by 2030, down from 7.3 million in 2010, according to the government’s statistics office.

Former Flipkart CEO’s Employee Clash Shows Indian Startup Trauma

2016-08-22T08:24:00.003-07:00

India’s largest startups are starting to let people go
Job cuts point to belt-tightening as funding starts to fizzle

India’s largest online shopping service is heating up, and not in a good way. Flipkart’s regular Friday townhall grew tense after employees incensed by hundreds of job cuts openly accused management of betrayal. Taken aback, chairman Sachin Bansal countered that the departures stemmed from poor performance and he lost his job as chief executive for the same reason.

The co-founder admitted the company had missed financial targets in recent months, prompting an overhaul of its top rungs, according to employees who attended the meeting. He didn’t elaborate but recent moves -- including a brief decision to go mobile app-only after ditching its fashion site -- may have granted an opening to a hard-charging Amazon.com Inc.

Bansal’s unusual candor, which drew applause, underscores the plight of the country’s technology sector as competition intensifies and funding begins to dry up. Flipkart Online Services Pvt and Ola -- two of India’s largest startups -- have jettisoned staff and tightened their belts to sustain a bruising battle with Amazon and Uber Technologies Inc. Following in Flipkart’s footsteps, ANI Technologies PVT’s Ola has shuttered smaller brand TaxiForSure, acquired over a year ago for $200 million, and let go of staff. It’s offered severance benefits and “outplacement” to those discharged, the company said without specifying numbers.

“Call it by whatever name, Flipkart, Ola and several smaller startups like Snapdeal and Zomato are cleaning up their operations to cut costs,” said Satish Meena, an analyst at Forrester Research Inc,’s e-commerce and consumer devices practice. “There will be further job reductions as they encounter an increasingly tight funding scenario and no clear funding picture in the coming quarters.”

As Flipkart and Ola contract, Amazon and Uber are expanding. Amazon said in May its Indian headcount grew 40 percent last year and it would continue to “hire aggressively” to scale up. It’s also spending lavishly on advertising and marketing. Uber, which has brought several top-level Indian executives into the fold recently, said hiring is “picking up pace” to support its growing operations.

Fundraising and deals in India’s thriving technology ecosystem hit records in 2014 and 2015, fuelled by the promise of a fast-expanding internet and smartphone population. Nearly $8.9 billion of venture capital flowed into startups via 965 deals last year, according to data provided by London-based research firm Preqin.

Certain segments remain attractive. Hike Messenger became India’s newest internetunicorn after securing a round of funding at a valuation of almost $1.4 billion from investors including Tencent Holdings Ltd. But Preqin’s numbers show the pace of funding is faltering, as investors grow wary of valuations and begin to focus on profitability. In the first two quarters of 2016, only $3.3 billion flowed into startups through 644 deals, it said.

Flipkart has seen multiple executive exits in past months, including that of its chief people officer and its chief product officer Punit Soni, a former Google executive from Silicon Valley. Bansal himself was replaced by younger co-founder Binny Bansal (no relation) in January. The company’s also put off recruiting from the Indian Institute of Management in Ahmedabad, a branch of the prestigious management school that’s long been a favorite wellspring of talent.

“For many startups, growth is flattening and investors too are asking them to face up to the new realities,” Meena said.

China Is Grappling With Hidden Unemployment

2016-08-22T08:24:00.002-07:00

Researcher puts underemployment at 5% and 10% at zombie firms
State-run coal and steel companies keep idle workers in limbo

Cracks are starting to show in China’s labor market as struggling industrial firms leave millions of workers in flux.

While official jobless numbers haven’t budged, the underemployment rate has jumped to more than 5 percent from near zero in 2010, according to Bai Peiwei, an economics professor at Xiamen University. Bai estimates the rate may be 10 percent in industries with excess capacity, such as unprofitable steel mills and coal mines that have slashed pay, reduced shifts and required unpaid leave.

Many state-owned firms battling overcapacity favor putting workers in a holding pattern to avoid mass layoffs that risk fueling social unrest. While that helps airbrush the appearance of duress, it also slows the shift of workers to services jobs, where labor demand remains more solid in China’s shifting economy.

“Underemployment in overcapacity industries is a drag on the potential improvement of productivity in China, which will lead to a softening wage trend,” said Grace Ng, a senior China economist at JPMorgan Chase & Co. in Hong Kong. “It would exert pressure on private consumption demand and in turn affect the overall rebalancing of the economy."

Underemployment Tripled

Other projections indicate the employment situation is even worse. An indicator of unemployment and underemployment produced by London-based research firm Fathom Consulting has more than tripled since 2012 to 13.2 percent.

The official jobless rate isn’t much help for economists: it’s been virtually unchanged at about 4.1 percent since 2010 even as the economy slowed. The gauge only counts those who register for unemployment benefits in their home towns, which doesn’t take into account 277 million migrant workers. Total employment is 775 million, National Bureau of Statistics data show.

The NBS also compiles a newer survey-based jobless rate for big cities, which has been holding steady at about 5 percent, but that index isn’t updated on a regular basis. There’s no official underemployment rate.

With the newly-added labor force now in decline as the population ages, workers should become more scarce during the boom of the labor-intensive services sector. That suggests economic slowdown is the main culprit of labor under-utilization, said Fielding Chen, an economist at Bloomberg Intelligence in Hong Kong.

Bai bases his estimate on average labor activity and worker productivity. From 2004 to 2008, underemployment was effectively near zero following rapid productivity gains from China’s 2001 admission to the World Trade Organization and state-owned industry reforms.

Global Rates

Bai’s rate is lower than numbers for other countries, which use varying methodologies. The U.S. rate known as U-6 is 9.7 percent, down from a record 17.1 in 2009. Australia’s underemployed ratio is 8.7 percent. Mexico’s underemployment rate is 7.68 percent.

Conflicting objectives complicate China labor market dynamics. Even as President Xi Jinping and other top leaders pledge to reduce overcapacity, other official policies prevent widespread firings, in turn letting unprofitable "zombie companies" lock up broad swaths of the labor force by keeping them in limbo with shorter shifts and less pay.

In the heart of coal country, Shanxi Luan Mining Group Co. has said it put some workers on leave to alleviate pressure from downward prices and save money on wages. In Liaoning province, Angang Steel Co. has slashed some salaries by half as it aims to cut total pay by 10 percent this year and ordered early retirement for 3,600 workers, China Youth Daily reported in June.

“Underemployment is especially rampant at state-owned companies,” said Zeng Xiangquan, a professor of labor and human resources at Renmin University in Beijing. "The government tends to overprotect them." That keeps laid-off workers from getting retrained and hired into new jobs in more thriving sectors like services or high-end manufacturing, Zeng said.

Zombie Companies

Zombies make up about 7.5 percent of industrial businesses, which are mostly state-owned enterprises in the northeast rust belt and the less-developed western regions, the official Xinhua News Agency reported in July, citing Renmin economics professor Nie Huihua.

"There’s no quick fix," said Fathom economist Laura Eaton. "In the short term, to reduce the problem of underemployment in China, the government should allow those ‘zombie companies’ with low productivity growth and excess capacity to default or shut down."

If policy makers act swiftly, history shows it’s possible for them to tighten that unwanted slack back to where it used to be, said Bai, who has tracked China’s underemployment back to the beginning of the reform and opening up in 1978.

Bai’s research shows that underemployment peaked in 1983, 1990 and 2002, but fell sharply after each episode. China began SOE overhauls and extended economic reforms from rural areas to cities in 1984, pushed further overhauls in 1992, and enjoyed an export-led lift off in the early 2000s after WTO entry.

More fiscal policy support for the economy and funding to help fired miners and steelworkers get new skills would be good steps toward a solution, JPMorgan’s Ng said.

If the other accompanying structural changes let the stronger services sector and healthier new industries tap idle productivity, Bai said, underemployment could decline once again.

— With assistance by Xiaoqing Pi, and Miao Han

Dubai Developer of World's Tallest Tower Going to New Heights

2016-04-10T21:34:00.002-07:00

Emaar Properties PJSC plans to build a $1 billion skyscraper in Dubai that will exceed the height of the Burj Khalifa, currently the world’s tallest building.

The tower within its Dubai Creek Harbour project will be “a notch taller” than the 828-meter Burj Khalifa, Chairman Mohamed Alabbar said at a press conference on Sunday, declining to be more specific. Construction will start at the end of June and will finish before Dubai hosts the World Expo in 2020.

“We wanted to build a new landmark for Dubai,” Alabbar said. “When we look at Downtown and the Burj Khalifa, the area is almost full to the rim.”

Dubai, the Gulf’s tourist and business hub, is developing hotels and entertainment projects as it aims to attract 20 million tourists annually by 2020 from 10 million in 2012. Emaar’s new tower will have an observation deck, gardens and 18 to 20 floors available for shops, restaurants and other tourist facilities, Alabbar said. The project will be financed by 50 percent of equity and 50 percent of debt.

http://www.bloomberg.com/news/articles/2016-04-10/dubai-developer-of-world-s-tallest-tower-going-to-new-heights

The World Has Started Spending More on Weapons

2016-04-04T22:09:00.003-07:00

Global military spending has begun rising in real terms for the first time since the U.S. began its withdrawal of troops from wars in Iraq and Afghanistan, according to theStockholm International Peace Research Institute.

Defense budgets rose 1 percent to $1.68 trillion in 2015, making up about 2.3 percent of the world’s gross domestic product, Sipri said in a report Tuesday. While the U.S. spent the most at $596 billion, that was down 2.4 percent compared with 2014, while China’s outlay increased 7.4 percent to $215 billion.

Concern about a possible advance by Russia into North Atlantic Treaty Organization territory following the Crimea invasion and hostilities in east Ukraine led to a surge in spending in Eastern Europe, as Chinese ambitions in the South China Sea spurred arms purchases among Southeast Asian states.

Defense budgets have been under pressure since the financial crash, with some of the world’s biggest spenders, including the U.K., France and Germany, scaling back amid austerity programs. Following the November terror attacks in Paris and the expansion of campaigns against Islamic State, those countries plan “small increases” in 2016, Sam Perlo-Freeman, the report’s author, said.

Russia, where slumping oil receipts have weighed on the economy, fell to fourth position in the global rankings, with Saudi Arabia taking third spot. The Mideast country, also hurt by the lower price of crude, would have cut spending too had it not been for the $5.3 billion cost of its military campaign in Yemen.

http://www.bloomberg.com/news/articles/2016-04-04/global-military-spending-rose-in-2015-stockholm-peace-institute

A Conversation With Panama's Suddenly Notorious Offshore Lawyers

2016-04-04T22:06:00.002-07:00

For decades now, Jurgen Mossack and Ramon Fonseca have been the go-to guys in Panama for international investors looking to put their money in far-flung places.

But even before the world learned their names Sunday .. in reports that alleged their firm played a critical role in helping political leaders around the world move money offshore -- the lawyers knew their lucrative partnership had begun to fray.

During a four-hour interview last week, Mossack and Fonseca sounded like two men in retreat: the go-go days of cranking out shell companies en masse for clients was over; the firm’s been considering scaling back its international franchising; and Mossack was expressing frustration about how Fonseca’s political ambitions were earning them unwelcome scrutiny from regulators and the media. Just days earlier, Fonseca had stepped down as a special adviser to President Juan Carlos Varela, saying he wanted to focus his attention instead on the business.

“We are going to make ourselves the right size smaller,” Fonseca said. For the co-head of a firm that over the past few decades has helped revolutionize the way companies and wealthy individuals structure their investments across the globe -- and popularized the British Virgin Islands as a hub -- the statement marks a big drop in ambition.

Many of the details of Mossack Fonseca’s operations were revealed in a documents leakthat the International Consortium of Investigative Journalists says showed how scores of celebrities and world leaders have been shuffling billions of dollars through banks and shell companies. Among those who the ICIJ says used the firm’s services to help them stash money overseas are Argentine President Mauricio Macri, Ukrainian President Petro Poroshenko and associates of Russian President Vladimir Putin.

Officials from all three countries denied any wrongdoing, as did the law firm, which said in a statement over the weekend that it “does not foster or promote illegal acts.” It also refused to comment on any of the clients named in the reports. On Monday, Mossack said in a phone interview that the leak stemmed from the hacking of the firm’s computers and that an outside sleuth had been hired to investigate.

‘da Vinci Man’

Of the two men, it is Mossack, a 68-year-old with German roots, who displays a keen mastery of the nuts and bolts of the business. He did most of the talking during the March 29 interview in their Panama City headquarters. The building is sleek, with a distinctive glass-facade, but looks diminutive amid the skyscrapers that dominate the financial district. Across the street is the iconic F&F Tower, a helix-shaped building that helped give the booming city its nickname “Dubai of the Americas.” As the two men spoke that morning, they were flanked by their legal director and two consultants. In all, the firm employs some 500 people in Panama and across the globe.
If Mossack is the nitty-gritty guy, Fonseca, 63, is the self-proclaimed dreamer.
He boasts that his friends have labeled him “a da Vinci man” for his interests in politics, law, business, letters and philanthropy. He’s penned a half-dozen novels over the years, and for a while as a young man had considered becoming a priest.
It was during his time as a bureaucrat at the United Nations in Geneva, where he was surrounded by international lawyers, that Fonseca said he was lured by the mysterious world of offshore businesses. “One day it occurred to me that I could do it too,” he said. “I created my little office and left the UN and started with one secretary to create and sell companies.” He’d join up with Mossack soon thereafter.

Like Selling Cars
http://www.bloomberg.com/news/articles/2016-04-05/a-conversation-with-panama-s-suddenly-notorious-offshore-lawyers

Panama Papers rock financial world

2016-04-04T22:02:00.000-07:00

A huge leak of documents has rocked the financial world revealing how some among the rich and powerful use tax havens to hide their wealth.

The files leaked from a Panamanian law firm called Mossack Fonseca contain 40 years of data and include information on more than 210,000 companies in 21 offshore jurisdictions, from Panama to Hong Kong.

The files show how Mossack Fonseca clients were able to launder money, dodge sanctions and avoid tax.

In one case, the company offered an American millionaire fake ownership records to hide money from the authorities in direct breach of international regulations that stop money laundering and tax evasion.

More than 60 relatives and associates of heads of state and other politicians are implicated.

For instance, the files reveal a suspected billion-dollar money laundering ring involving close associates of Russia’s President, Vladimir Putin.

Also mentioned are the brother-in-law of China’s President Xi Jinping; Ukraine President Petro Poroshenko; Argentina President Mauricio Macri; the late father of UK Prime Minister David Cameron and three of the four children of Pakistan’s Prime Minister Nawaz Sharif.

The documents show that Iceland’s Prime Minister, Sigmundur Gunnlaugsson, had an undeclared interest linked to his wife’s wealth. He is now facing calls for his resignation.

The scandal also touches football’s world governing body, Fifa, the BBC reported.

Although there are legitimate ways of using tax havens, most of what has been going on is about hiding the true owners of money, the origin of the money and avoiding paying tax on the money.

The 11.5 million documents were obtained by the German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ).

It is the biggest leak in history, dwarfing the size of those released by the Wikileaks organisation.

http://www.lankabusinessonline.com/panama-papers-rock-financial-world/

China Said to Intervene in Stocks After $590 Billion Selloff

2016-01-05T04:12:00.000-08:00

Market intervention is said to a bad act. But however this has both antagonist as well proponents view over the course.Here I do not want to talk over the course of market intervention. Recently China is facing a clear melt down in their economy due to various reasons. Manufacturing has been in records low and their growth has been recorded below value since 1990's.
China has been intervening the market to stop the market crash slowly through over a year of period and it has been viewed with mixed terms. However most important fact is, whether it may be intervention or any term "Should the government to be allowed to use public money to buy falling starts ?"
It's said to be that Chinese intervene market in early of last year 2015 heavily on march to June has caused the market to blossom and hit the sky with artificially created hype in June to July in 2015. And now it is going down steadily.
2016 year starts with high lost. "does this has the impacts of market intervene during last year which cause the artificial hype in June ?? "

Now Chinese authorities putting restrictions on big shots. Putting restrictions on trades in bigger volumes.
Big players loose money, value in big numbers. But surely the restrictions will give a temporary relief for the devastating market. But for how long ?
What will be the impacts? Does these interventions means that China to be regarded as a good territory for investments ? Who says "yes" Who says "No"
Or China as field of investment or a plain which give a reasonable fair opportunity for investors to secure their investment against big shots. Specially against the Monkey Merchant. (famous monkey theory in Stock Market)

Below is a good article i have read n the bloomberg which capture snapshot of a story of inrvetion with mixed feeling or rather antagonist approach over intervention.

====================================================================

State funds buy after CSI 300 index tumbled 7% on Monday
CSRC signals six-month selling ban on major holders to stay

China moved to support its sinking stock market as state-controlled funds bought equities and the securities regulator signaled a selling ban on major investors will remain beyond this week’s expiration date, according to people familiar with the matter.

Government funds purchased local stocks on Tuesday after a 7 percent tumble in the CSI 300 Index on Monday triggered a market-wide trading halt, said the people, who asked not to be identified because the buying wasn’t publicly disclosed. The China Securities Regulatory Commission asked bourses verbally to tell listed companies that the six-month sales ban on major stockholders will remain valid beyond Jan. 8, the people said.
Chinese policy makers, who took unprecedented measures to prop up stocks during a summer crash, are stepping in once again to combat a rout that erased $590 billion of value in the worst-ever start to a year for the nation’s equity market. While the intervention may ease some selling pressure, it also undermines authorities’ pledge to give markets more sway in the world’s second-largest economy.
“The market has got some help from state funds and that will support shares in the short term,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co. “However, in the long run, the market will need its own strength to hold up. It can’t always rely on the national team.”
China’s CSI 300 index rose 0.3 percent at the close, after earlier falling more than 2 percent. The plunge on Monday triggered the nation’s circuit breakers on their first day in effect, dealing a blow to regulatory efforts to calm one of the world’s most volatile bourses. Authorities are trying to prevent market turmoil from eroding confidence in an economy set to grow at its weakest annual pace since 1990.

The sales ban on major holders, introduced in July near the height of a $5 trillion rout, will stay in effect until the introduction of a new rule restricting sales, the people said. Listed companies were encouraged to issue statements saying they’re willing to halt such sales, they said.
Several firms did so this week. The controlling holder of Shenzhen-listed Zhejiang Century Huatong Group said in an exchange filing it wouldn’t sell shares on the secondary market for another year after its previous commitment expires in January. Changshu Tianyin Electromechanical Co., a maker of refrigerator-compressor parts, said its controlling holders won’t pare holdings over the next nine months.

International Concern

The regulatory ban, announced on July 8, applied to investors with holdings exceeding 5 percent in a single stock, along with corporate executives and directors. The restriction drew criticism at the time from foreign investors including Templeton Emerging Markets Group and UBS Wealth Management, who saw the intervention as a step too far. Goldman Sachs Group Inc. estimated the ban kept $185 billion of shares off the market.
An extension would come as a surprise to many investors. All seven strategists and fund managers surveyed by Bloomberg at the end of last month said they expected regulators to let the ban lapse this week.
“We don’t really like market intervention,” Stephen Ma, a senior portfolio manager at LGM Investments Ltd., whose parent oversees more than $254 billion. “The government should have learned their lesson last summer.”

Chinese policy makers used purchases by government-linked funds to prop up shares as the CSI 300 plunged as much as 43 percent over the summer. State funds probably spent $236 billion on equities in the three months through August, according to Goldman Sachs. The CSRC didn’t immediately respond to a faxed request for comment.

From Worst to First: Bitcoin's Price Ends 2015 on Top

2015-12-30T21:37:00.002-08:00

After a year filled with its share of doom and gloom, the verdict is in: Bitcoin won 2015.

As trumpeted by headlines in CNBC and Bloomberg, bitcoin was the best-performing currency of the year, netting near-40% gains, more than double its nearest competition, the Somali Shilling and Gambian Dalasi. The development contrasts with bitcoin's performance from 2014, in which it lost56% of its value, the most among global currencies.

A look at the CoinDesk USD Bitcoin Price Index (BPI) from October on reveals an impressive upward arch that contrasts with the choppy peaks and valleys of the year's earlier months.

Though the exact reasons are unclear, many pundits are pinning the currency's turnaround on the growing enterprise fascination with blockchain tech and the renewed mainstream attention from stories such as the alleged discovery of bitcoin's founder, Satoshi Nakamoto.

But as we head into 2016, a big question remains to be answered: Will recent price positivity continue to buoyed by fundamental market improvements?

While only time will provide the answer, we take a look back at the price movements over the last 12 months for clues and considerations.

January

Despite starting the year at just over $300, the bitcoin price crashed to a low of around $170 on 14th January, losing 37% of its value in two days. As an example of just how sudden and dramatic the drop was, even noted bitcoin bull Barry Silbert proclaimed the market had "capitulated".

The last time the price had crossed the $200 line had been in late October 2013, before its meteoric rise to more than $1,000.

The low price wasn't bad news for everyone, however. Traders got busy accumulating new positions and exchanges had their busiest day since a price rally in November 2014.

The price rebounded somewhat over the following 12 days to just over $270 and ended the month on a high note as the price rocketed over $300, seemingly at the news that exchange and wallet provider Coinbase had closed a $75m funding round.

February

February started on a low note as Coinbase euphoria waned and the price fell back below $250.

Mid-month, however, the bitcoin price gained nearly $50 in four days of trading. This represented a 23% gain over that period.

Soon, as was to become tediously common, the price once again settled back below $250, undulating around $240 before a slight climb to over $250 to close the month.

March

Bitcoin price gains that peaked at $286 were supported by strong volume growth early in the month. Some 3.67m BTC changed hands on the week ending 7th March, which was a 55% increase over the previous seven-day period.

The second half of the month saw a reprisal of the slump to the low $200s.

April to June

The above pattern was to repeat through the three months April to June, when the price generally sat level at between $220 and $240.

The best one could say about the situation, perhaps, was that the notoriously volatile digital currency had "found a floor", a positive for those who consider the digital currency a viable store of value.

The development wasn't so good for traders, of course, but many have said that low volatility is key if bitcoin is ever to go mainstream as a method of payment.

On 17th June, after months of relative calm, the price of bitcoin finally broke out of the doldrums and spiked to a high of $257.

One of the most prominent theories that emerged to explain the rise was related to the market's timing, which roughly coincided with growing indications that Greece would possibly default on its debt obligations – the 'Grexit', as it had been nicknamed.

The fervent hope among many in the bitcoin community was that Greeks would switch to the digital currency as they saw their banks accounts frozen and ways to move money in or out, such as PayPal and Western Union, were shut off in the country while a deal was hammered out with the EU.

Despite media reports selling that line, some commentators said it was just as likely that the price rise was a coincidence and the evidence for Greeks adopting bitcoin was very thin on the ground.

The price dropped slightly in the days after, before finishing June on a high of over $260.

July

On 13th July, the bitcoin price continued to climb, shooting past the $300 mark and reaching its highest level since 10th March.

Many still put the rises down to the economic situation in Greece; others attributed it to the psychological effect of people hoping for such a trend.

Mid-month, CoinDesk launched a reader's poll that concluded that some 62% of bitcoin enthusiasts believed the digital currency would be worth less than $500 at the end of this year. (While the trend is in the right direction to top $500, it's looking like our readers were right as we go to press).

After the possibly-Greek-influenced climb early in July, the price dropped slightly and spent the rest of the month around $275 to $290.

August

A general downward price trend through the month was interrupted by two notable negative events brought about by a single bitcoin exchange.

Firstly, on the 19th August, a 'flash crash' at Hong Kong-based Bitfinex caused the price of a bitcoin to nosedive 14% in a period of just 30 minutes.

The price had been holding steady between $250 and $255, but dropped to a low of $214.36 just before midnight (UTC). In the same period, the Bitfinex price sank 29% to $179.35.

The exchange told CoinDesk at the time that the flash crash was triggered when several leveraged positions were forcibly closed in close proximity to each other.

Then, on the 24th, just a few days later, the price slumped again after Bitfinex closed its order book for seven hours, citing issues with its post-trade processing.

September

Generally uneventful, September's prices hovered in the $230 to $240 range, with a peak at around $245 on 8th September.

What was promising, however, was the signs of a rising trend towards the close of the month, though it closed at just $236.

October

That upward trend noted at the end of September continued through October until it achieved a price of over $260 on 13th October, its highest price in two months.

The raise may have been caused by a sudden surge in bitcoin trading volume driven predominantly by the Chinese exchanges Huobi and OKCoin.

Bobby Lee, CEO of Chinese exchange BTCC, told CoinDesk at the time that his platform has seen a significant volume increase, though he dismissed much of his competitors' volume as "artificial".

Those behind the volume, he said, are not traders but consumers sucked into a Russian ponzi scheme, MMM.

The price trend nonetheless continued skywards and on 28th October it broke through the $300 barrier on the CoinDesk BPI for the first time in over three months.

Soon after, the price was at a new high for 2015, peaking at $333.75 on the 30th.

November

The positive trend continued into November, with the price rapidly reaching, first $400 on the 3rd, then over $480 on the 4th of the month.

The sudden rise prompted Wedbush Securities to revise its 12-month projections for the price of bitcoin and revealing it expects the price to rise to $600 over the next year.

After a sharp drop on the 11th that took the price back down to close to $300, it settled down to a new normal of around $325 for much of the remainder of the month, with a rise at the close to over $370.

December

So, here we are in the closing month of 2015, and the price is trending up.

On the 15th, it reached the highest level since September 2014, climbing to more than $465 across most major exchanges.

Despite a slight drop since then, pundits are enthusiastic, with many arguing the industry is poisedfor a positive start to 2016.

What is your prediction for the bitcoin price in 2016? Provide your thoughts below.

http://www.coindesk.com/bitcoin-price-in-2015-doom-and-gloom-give-way-to-positive-years-end/

Ex Agent Gets 6 Years Prison for Betrayal in Silk Road Probe

2015-12-30T21:10:00.001-08:00

A government agent who stole $820,000 in bitcoins while investigating an online drug emporium was sentenced to almost six years in prison after a prosecutor said his deceit amounts to a “breathtaking abuse of trust.”

Shaun Bridges, who worked for the Secret Service, hijacked the account of an administrator for the Silk Road black market website to syphon off the digital currency. The U.S. said Bridges deserved a harsh sentence because the administrator was working as a government informant and was put in danger when Silk Road’s founder assumed he was the thief and tried to have him killed.
The informant, Curtis Green, sobbed on the witness stand Monday as he told a San Francisco federal judge he received more than 30 death threats as word got out that he had stolen from the Internet bazaar for drugs, hacker tools and other contraband. He said he couldn’t bring himself to describe in court the graphic threats to his grandchildren.

"So you can imagine the mental stress and anguish that it put me through," he said.
U S District Judge Richard Seeborg said when he imposed the 71 month senetence that Bridges commited and exteremely serious crime. he called it an extraordinary betrayal of public trust that could have gotten a person killed

http://www.bloomberg.com/news/articles/2015-12-07/federal-agent-should-get-six-years-for-bitcoin-theft-u-s-says.

Bitcoin's Creator Reportedly Living Suburban Life in Australia

2015-12-30T21:07:00.004-08:00

Bitcoin’s elusive founder has for years evaded the efforts of tech geeks, journalists and fans to reveal his or her true identity. The mystery may finally have been solved.

The person who unleashed the virtual currency anonymously in 2009 is probably a 44-year-old academic living in suburban Sydney, according to Wired magazine.

Citing e-mails, deleted blog posts and documents, Wired identified Craig Steven Wright as the likely developer of the original bitcoin software under the pseudonym Satoshi Nakamoto. Gizmodo also identified Wright, along with his late friend Dave Kleiman, as being behind the currency.

Wright’s social-media profile suggests a man with an enthusiasm for virtual currency and computing. In addition to numerous college degrees and a stint as a chef, hisLinkedIn profile lists him as the chief executive officer of DeMorgan Ltd., which has researched bitcoin, proposed a bank for the currency, and offers wallet and exchange services. After years of mystery and failed efforts to unmask Nakamoto, many in the bitcoin community remain skeptical about Wright, who participated in a Las Vegas bitcoin event just weeks ago via videoconference.

“If the real Satoshi does appear, his opinion would be difficult to ignore,” said Yuzo Kano, who quit Goldman Sachs Group Inc. to open bitcoin exchange BitFlyer Inc. in 2014. “It’s possible that Mr. Wright was one of the people involved in the original bitcoin and there are in fact multiple Satoshis.”

Libertarian Roots

Bitcoin gained an early reputation as a tool for selling drugs and laundering money. The currency’s libertarian roots, with no central issuing authority and a public ledger to verify transactions, has become more mainstream with its adoption by merchants around the world. Its underlying technology has also drawn interest from banks including Goldman Sachs and Citigroup Inc.

Wired’s evidence for naming Wright as the currency’s creator includes 2008 blog posts discussing bitcoin, along with e-mails, transcripts and accounting forms that corroborate the link. The real Nakamoto proposed bitcoin that same year before the software was rolled out in early 2009.

Wired also cited a 2014 administrator’s report into Hotwire Preemptive Intelligence Pty., which indicated the e-payment software firm was backed by A$30 million ($22 million) of bitcoins owned by its managing director Wright.

‘Stash of Bitcoins’

Amid the speculation, bitcoin climbed on Wednesday to hit its highest levels since early November. The reports mentioned a legal arrangement that keeps a very large chunk of 1.1 million bitcoins locked up in a trust until 2020. That would remove the risk of a big supply hitting the market anytime soon and driving down the price.

Wired reported that whoever is the real Nakamoto “appears to control a stash of bitcoins easily worth a nine-figure fortune.”

If that person is Wright, he doesn’t appear to have been spending it on an opulent lifestyle. His modest home in the Sydney suburb of Gordon lies in a quiet tree-lined street about 13 kilometers from Sydney’s central business district.

Wireless Hacking

Police raided the house on Wednesday as they assisted an investigation by the Australian Taxation Office. The raid was unrelated to media reports about Wright’s possible involvement in bitcoin, the police said.

Wright’s LinkedIn profile listed time working for ASX Ltd., operator of Australia’s biggest stock exchange, as well as OzEmail, one of the country’s first Internet service providers. Under education, it shows multiple Master’s degrees, a PhD in computer science and a doctorate in theology.

A message sent to the profile wasn’t returned and information from the profile such as work history and education has been removed since Wired’s report. The same person is listed as a lecturer at Charles Sturt University, specializing in encryption, cybercrime and wireless hacking. The university’s media office didn’t provide a phone number for Wright’s office and e-mails sent to his university address bounced back.

A woman who answered the phone at DeMorgan on Thursday said neither Wright nor Ramona Watts, reported by Gizmodo to be his wife, were at the office and the company wasn’t interested in talking to anyone. Then she hung up. Watts didn’t return messages left on a mobile-phone number that was listed as hers on the company website.

‘Fabricated Evidence’

While the true identity of Satoshi Nakamoto has occupied some bitcoin fans, others such as Gregory Maxwell said knowing who started the currency doesn’t matter.

Maxwell, an early contributor to bitcoin protocol on software collaboration site GitHub, has doubts about some of the evidence cited by the publications in naming Wright.

“I’ve reviewed some of the evidence being used, and much of it is clearly fabricated,” Maxwell, who is also chief technology officer at cryptocurrency innovation firm Blockstream, said by e-mail. “It is unlikely that the evidence which cannot yet be shown to be true or false has merit.”

Previous Leads

This is not the first time a publication claimed to have found the elusive inventor. TheNew York Times and New Yorker magazine have both tried to find whomever is behind the pseudonym. In a cover story last year, Newsweek identified the real Satoshi Nakamoto as a California physicist, who denied the report.

Some fans would prefer Nakamoto’s true identity remain an enigma.

“The cloud of mystique surrounding bitcoin’s creation makes it all the more interesting,” Alex Waters, CEO of bitcoin payment processor Coin.co, said by e-mail. “That being said, I think the technology stands on its own as a product of great human achievement regardless of who held the pen to the white paper.”

http://www.bloomberg.com/news/articles/2015-12-10/bitcoin-s-creator-reportedly-living-suburban-life-in-australia

Astounding Rise in Passive Management

2015-12-30T20:56:00.000-08:00

This year brought a lot of good news for those in passive management - 2015.

Passive is popular, that's for sure.

As Bloomberg's Eric Balchunas reported earlier, 2015 has seen a record $365 billion in net inflows to low-cost and passively managed index funds and exchange-traded funds (ETFs) at the same time that $147 billion has been withdrawn from active mutual funds. Unfortunately for Wall Street and active managers, Bank of America Merrill Lynch analysts led by Savita Subramanian suggest the trend will continue.

"In the past four years, passive investments have gone from one-fifth of long-only assets under management to one-third today," the BofAML team said in a note. They added: "Passive funds still only make up about one-third of the U.S. large cap space, far from critical mass."

Here's a look at the flows into or out of active and passive funds since the end of 2008, with passive managers dominating.

Despite this rapid increase for inflows to passive investments, it still makes up a small share of total funds, as Subramanian said.

If active managers were delivering stellar returns, the trend might change. Alas, they haven't been.

According to BofAML, only 40 percent of active managers are beating the indices they are measured against. Those focusing on value plays have proven the most adept at beating benchmarks this year, while core managers have the lowest success rate, the bank said.

What could help turn this around?

According to the BofAML note, active managers tend to have a bias toward growth stocks, an aversion to foreign-exposed companies, and a preference for lesser-quality names, as measured by Standard & Poor's common-stock rankings. The funds will need to outperform in those areas to start having better luck against their benchmarks.

http://www.bloomberg.com/news/articles/2015-12-30/these-charts-show-the-astounding-rise-in-passive-management

The Final Days of the Bitcoin Foundation?

2015-12-30T20:54:00.001-08:00

With support dwindling, funds almost depleted, and ex-board members under criminal investigation, bitcoin’s pioneering advocacy group is a symbol for the digital currency’s growing pains.

Bruce Fenton, executive director at the Bitcoin Foundation, opened its Dec. 15 board meeting with a sense of urgency: “We need additional funds if we wish to retain employees.” The numbers didn’t look good. In two years, the foundation had seen at least $7 million evaporate. As of Nov. 30, its total assets stood at $12,553.06.

To sustain the Bitcoin Foundation’s operations, which have included lobbying, putting on conferences, and providing technical support for the digital currency, Fenton urged the group to find ways to raise money quickly. They considered cold-calling ex-members, and Fenton said he’s working on marketing materials for prospective donors to explain the organization’s purpose. “There is no material saying what the foundation does,” he said.

Eventually, Jim Harper, a board member and senior fellow at Cato Institute, a think tank, interjected. He questioned whether the foundation was offering its members enough value to warrant its existence, according to minutes released on Dec. 21 from the meeting. “Asking for money is just throwing money away,” Harper said. Olivier Janssens, another director, suggested that the organization may not be “fixable.”

The Bitcoin Foundation has become a symbol of the challenges facing the digital asset it was designed to steward. While advocates have promoted bitcoin as a global, decentralized currency for the Internet age, it’s proved to be more volatile than many penny stocks. Its role in money laundering and other illegal activity is a constant source of questions, and the price fluctuates with each regulatory clampdown or criminal investigation. In November 2013, it reached a high of $1,137 before falling to $183 in January 2015 following a slew of problems, including the collapse of Mt. Gox, once the world’s largest bitcoin exchange.

Police officers carry pieces of evidence from the house of Mark Karpelès, head of defunct Bitcoin exchange Mt. Gox, in Tokyo on Aug. 3.

Photographer: Jiji Press/AFP/Getty Images

Beyond financial trouble, two former Bitcoin Foundation board members have been charged with crimes. Mark Karpelès, former chief executive officer of Mt. Gox, wasarrested in Tokyo and charged with embezzlement in September. Charlie Shrem, former vice chairman of the Bitcoin Foundation, resigned before pleading guilty to helping launder money for transactions through the illicit online marketplace Silk Road. He’s currently serving two years in a federal prison.

Several people still involved with the Bitcoin Foundation said the wounds may never heal. “I don't know if the foundation has a future,” Gavin Andresen, a former board member who now holds the title of chief scientist, wrote in an e-mail. “It is very difficult to regain trust once trust has been lost, and the illegal behavior of two of the foundation's former board members destroyed a lot of trust.”

When the Bitcoin Foundation was formed in 2012, the group was intended to give legitimacy to a relatively unknown technology. By the end of that year, bitcoin traded at about $13. The organization grew almost in lockstep with the popularity of bitcoin. Comprising pioneering coders and entrepreneurs behind the digital currency, the Bitcoin Foundation would soon become a familiar face in Washington, spreading the gospel of bitcoin around the world.

U.S. lawmakers and congressional committees appreciated having a central figure to represent bitcoin, but foundation members have sometimes become punching bags for politicians. At an event in 2013 attended by Andresen, who was appointed to lead bitcoin development by the anonymous creator, Satoshi Nakamoto, a Justice Department prosecutor compared bitcoin with child pornography, according to a reportin the Washington Post.

A man named Satoshi Nakamoto, one of many people believed to be the creator of bitcoin, fends off photographers. He's denied involvement.

Photographer: Allen J. Schaben/LA Times via Getty Images

Techies bought into the promises of bitcoin and were eager to donate to further its cause. At the end of 2013, the Bitcoin Foundation reported $7 million in assets, according to meeting minutes. As demand for bitcoins rose, so did the value of the foundation’s funds, much of which were held in the digital currency. In 2014, its ambitions began expanding with the addition of a lobbying operation in Europe.

Then things changed. By mid-2014, funds were down to $4.6 million, and the burst of the bitcoin bubble that year took a toll on the foundation almost immediately. “I hired lobbying in Brussels in 2014, and then we scaled it right back because the money was gone,” Harper said in an interview after the contentious Dec. 15 board meeting. According to the minutes from that meeting, the organization has cut its budget by 95 percent from previous years. Its conference business now faces stiff competition from other events, such as Inside Bitcoins and Money20/20.

About a year ago, when bitcoin’s price had fallen to about $374, the foundation said it would discontinue public policy efforts and concentrate on providing technical development to bitcoin. The reason was simple: It didn’t have the money to do both. “It thrived while the bitcoin price was rising, so it never put a plan in place to sustain it,” Harper said. “When the price dropped, the foundation ran out of money. The last year has just been cutting costs, shrinking budgets, bringing things under control.”

The pressure revealed the foundation’s underlying weaknesses. Supporters were inexperienced at raising money, and until recently, few paid attention to expenses, Harper said. “They were spending thousands of dollars per month on Web services that would have cost a couple hundred,” he said. Bobby Lee, a Bitcoin Foundation board member, referred questions about expenses to Fenton, who didn’t respond to a request for comment. In a further e-mail, Lee acknowledged “budget and leadership problems in the past.”

Bitcoin has weathered hard times better than the foundation has. The price is back up to $426. Venture capital firms have invested more than $1 billion in bitcoin-related startups, according to research from CoinDesk. Finance and tech companies, including IBM, Overstock, Nasdaq, and the biggest banks, are experimenting with the technology for use in everything from money transfers and contracts to issuing stock. Coin Center, a year-old organization with backers such as BitPay, has staff in Washington developing bitcoin policy. There’s also the Digital Chamber of Commerce, a trade association. Those two organizations recently formed the Blockchain Alliance to help law enforcement investigate criminal activity involving bitcoin’s underlying technology.

Roger Ver, whose evangelism for the digital currency earned him the name Bitcoin Jesus, provided the Bitcoin Foundation with funds early on. An ex-convict who had been sentenced to 10 months in federal prison after selling about 14 pounds of explosives without a license on EBay, Ver said the foundation’s demise, if it were to happen, wouldn’t affect bitcoin. “There are lots of different bitcoin foundations, so the name may change, but the mission will carry on,” he said. “I don’t think it matters at all if the Bitcoin Foundation were to close. The Bitcoin Foundation laid the groundwork for the ecosystem that we have today.”

But Lee is determined to resuscitate his organization. “Despite the recent negativity about the Bitcoin Foundation, there are still many people who believe in the need for a global non-profit platform that advocates for bitcoin,” Lee wrote in an e-mail. “The past 18 months were tough for bitcoin and its entire ecosystem; I did not give up on bitcoin then, and I will not give up on Bitcoin Foundation today.”

At the December board meeting, Lee suggested that dissenters should resign. “If someone does not want to be on that ship, they should step off the board,” Lee said. After much debate, Janssens and Harper elected to dissolve the organization, but they were outvoted by Lee and the two other directors.

By the end of the meeting, Harper agreed to step down, and Janssens was removed from the board. “None of this is personal,” said Chairman Brock Pierce. The two ousted men were dismissed. “Don’t thank me,” Janssens said. “I was removed for a bulls--- reason.”

On Dec. 22, the Bitcoin Foundation said it appointed three new board members. The foundation is also considering a revised mission statement, with a focus on technical development, advocacy, and regulatory efforts. Finally, the board “voted to continue the existence of the foundation” and established an optional board seat for bitcoin’s mysterious creator, “if and when Satoshi ever reveals him or herself.”

http://www.bloomberg.com/news/articles/2015-12-30/the-final-days-of-the-bitcoin-foundation-

This Island Says Everything About Australia's Shifting Economy

2015-12-30T20:52:00.004-08:00

On the largest island in Australia’s Great Barrier Reef World Heritage Area, $60 billion of liquefied natural gas terminals are helping feed China’s hunger for energy. The next major construction project may appeal to its tourists.

Four decades after his father bought a cattle property on Curtis Island, American businessman Tim Reigel is seeking government approval to turn it into a five-star holiday destination. It’s the latest chapter for the 30-by-15-mile strip, located beside the famous coral reef, which state authorities predict will become one of the world’s largestLNG hubs.

The gas-to-guests transition is a microcosm of the economic shift happening in Australia. The nation, at the tail end of the biggest resources boom since the 1850s Gold Rush, is counting on tourists, especially from China, to help soften a plunge in mining and energy investments. These days, the majority of people coming to the tropical isle are there to help build the LNG facilities, not for the pristine beaches or endangereddugongs and snubfin dolphins. Once the projects are completed, most of those workers will leave.

“LNG is a tiny part of the Curtis Island story,” Reigel said by phone from his Los Angeles home. “I don’t care how many billions they’ve spent on it. Most of the island experience is very divorced from that.”

Yellow Patch, Curtis Island.

Source: QRE Pty

The three LNG projects on the island, about twice as big as Martha’s Vineyard, occupy about 2 percent of the land area on its southwestern tip, a couple of miles from the central Queensland port town of Gladstone.

The island’s workforce has already halved from a peak of 14,500 people last year and will drop to a “very small number” next year, according to contractor Bechtel Group Inc. The last project, a ConocoPhillips-Origin Energy Ltd. venture, is due to begin production this month.

The exodus is hurting local businesses, such as Scotties restaurant, two blocks from the harbor, which once counted among its clientele directors of BG Group Plc, operator of the $20 billion Queensland Curtis LNG plant. The U.K. company said Wednesday that the second stage of the plant’s development is finished.

“I had three fantastic years, like everyone else, when all the big guys were coming to town -- the engineers, the executives,” owner Scott McCarthy said. “Now, it’s been going downhill at a rapid pace. What we need is another big project to be announced, but with the commodity markets being as low as they are, that’s probably not about to happen.”

Cheaper Holiday

Fresh sources of income are needed to fill the gap, said Janu Chan, an economist with St. George Bank Ltd. in Sydney. Tourism may help, especially after the Australian dollar slipped against all but three of the Group of 10 currencies in the past year, making it cheaper to holiday in Australia for most overseas visitors.

Nearby Gladstone, originally named Port Curtis, is starting to woo travelers. Carnival Corp.’s P&O Cruises is scheduled to dock there six times next year, enabling passengers to visit the reef or even take a boat tour of the LNG plants, said Mayor Gail Sellers. Still, she’s not counting on Curtis Island drawing crowds of vacationers anytime soon, she said.

Yellow Patch

Unlike the Whitsunday Islands, about 600 kilometers further north, with their white-sand beaches, azure water and dense rain forest, the island that English explorer Matthew Flinders landed on in 1802 is more rustic and rugged. Among its features are a 20-story-high sand dune, called Yellow Patch, tranquil billabongs and flatback turtle nests.

Its raw beauty may pose a challenge to resort developers, said Graham Reynolds, a Brisbane picture framer who wrote a book about Curtis Island’s history.

“Perhaps you might get clever operators who can wrest some of that latent charm out of the place,” said Reynolds, who spent part of his childhood on the island, where his uncle was a maritime pilot.

Universal Partners BV, a Dutch real estate investment company, had planned to develop the northern tip of Curtis Island, which it said was the largest freehold, or non-leased, island-property in Australia. The plan didn’t gain traction with state and local governments and was shelved almost a decade later, said Rob Johnson, a designer who worked on the project and is now based in Jakarta.

Luxury Villas

“Sooner or later there will be a resort on Curtis Island,” said Reigel, who is pushing ahead with his plans for Turtle Street Beach Resort, a A$100 million ($72 million) project featuring 177 luxury villas and apartments, tennis courts, pools, a bar and restaurant. The proposal has drawn interest from Chinese investors, he said.

If approved by the Australian government, design work could begin immediately with the first stage of construction finished by the end of 2017, according to documents that Reigel’s company, QRE Pty, filed last month with environment authorities.

Reigel’s father, Bill, a former stockbroker, led a group of U.S. investors that acquired the cattle property, Monte Christo, in the mid 1970s with the goal of building a resort there. The proposal stalled in the 1980s, while the government considered setting up a naval base on the island.

In 1989, three years after his father died, Reigel started the effort to obtain state and local government clearance, the filing shows. The plans have been tied up in a “complex” approvals and negotiation process with government agencies since, while about 14,000 hectares have been given up for national and conservation parks.

Tourism Drive

The impetus for tourism developments is increasing. The Australian government estimates thousands of extra rooms are needed in capital cities and in Queensland state to meet its target of doubling visitor spending to as much as A$140 billion by 2020, and investors are responding. The country has the strongest hotel pipeline in more than a decade, said Karen Wales, senior investment specialist at the Australian Trade Commission.

Current projects in Queensland include the A$600 million redevelopment of Lindeman Island and plans by Aquis Group, controlled by Hong Kong developer Tony Fung, to build an A$8 billion casino-resort with 7,500 rooms on a former sugarcane farm north of Cairns.

Although industries outside minerals and energy are helping the economy, they are unlikely to plug the investment hole that resources companies have left, St. George’s Chan said. Resources-related infrastructure projects total more than A$90 billion in the Gladstone area alone.

“We’re a fly on an elephant’s behind in terms of the size and type of projects that happen around Gladstone,” Reigel said. “But the role we fill is helping to provide diversity to the industrial base.”

http://www.bloomberg.com/news/articles/2015-11-25/mixing-mojitos-and-gas-on-barrier-reef-is-australia-s-new-normal

The World Economy's Winners and Losers in 2015

2015-12-30T20:48:00.000-08:00

http://www.bloomberg.com/news/articles/2015-12-30/the-world-economy-s-winners-and-losers-in-2015

The Celtic Tiger rises, China holds up, Brazil and Russian sink deeper

When the final numbers are tallied, 2015 will probably count as another disappointing year for global growth.

The muted performance came even as central banks continued to pump in liquidity, oil prices plunged again and inflation was moderate.

It was also a year of divergent performers. While tumbling commodity prices took the shine off big emerging markets Russia and Brazil, other emerging economies like India and Vietnam surprised on the upside. In the developed world, robust U.S. jobs growth prompted the Federal Reserve to tighten monetary policy for the first time since 2006, while the gloom around neighboring Canada deepened.

With the year drawing to a close, here's a look at some of the winners and losers:

Mixed performance:

In advanced economies, smaller European nations were among the best performers. Ireland's economy grew by 7 percent in the third quarter--faster than China--and well ahead of the euro area's 1.6 percent growth in the same period.

By contrast, the picture was more subdued in Finland. The northernmost euro member, which was among the most vocal critics of Greece during its crisis bailout negotiations, is suffering as key industries like paper making and consumer electronics struggle. Weak export demand from Russia is also hurting.

In the emerging market world, clear standouts included Vietnam, Tanzania and, wait for it, China. Even after a $5 trillion stock market rout and what's tipped to be the slowest growth in 25 years, China's overall gross domestic product growth remains relatively robust compared to its peers. India's economy also expanded faster than expected in the third quarter when GDP rose 7.4 percent from a year earlier, after a 7 percent expansion in the previous quarter.

The weakest performers included the usual suspects. Russia is on track for its longest slump in two decades mostly because of lower oil prices. Brazil has been dogged by the commodities slump, political turmoil, a corruption scandal and a widening budget gap. Goldman Sachs Group Inc. warned that the nation is sinking into “an outright depression."

A notable absentee from the list is Venezuela: that's because the central bank hasn't published GDP data for the year.

Honorary mention:

Japan gets a special mention for the recession that never was. A data revision meant that GDP expanded in the third quarter rather than contracting as previously thought, meaning the world's third largest economy avoided a second recession in three years. Some economists say the performance shows Japan's economy is on an overall improving track, even if significant challenges remain.

Employment:

Away from the GDP numbers, employment data around the world paints a mixed picture.

The lowest jobless rates can be found in nations such as Japan and Switzerland, or Thailand and Singapore, but Western Europe remains stricken by high levels of joblessness. Double digit unemployment in places like Greece and Spain underscore the challenges ahead.

Note: All unemployment data reflect national measures, some of which might have different methodologies.

Oil prices slump further, Tokyo hit by yen strength

2015-12-20T23:11:00.000-08:00

World is experiencing a low oil price for a reasonable period. Various economical aspects tries to define and explain the ongoing economic activity. With all these activities, there is one key explanation which everybody does not in a comfortable zone to utter.
Whether this climate is really a actual or neutral climate created by the equilibriums of the world economy ? or by with force ? some artificially created ?
Who has created ? who get the benefit and who will suffer ? Who will be targeted by this ?

Various questions will be popped up.

Whether it's been an artificial or not ... below is one of articles who has included lots of information I found with Yahoo.

It basically creates a dilemma or and excitement of looking at the relationships among low oil price and Japanese Yen.

Something worth at looking.

-------------------------------------------------------------------------------------------

Oil prices extended their losses Monday, adding to worries about the global economy, while Tokyo led most Asian markets lower as a stronger yen hurt Japan's exporters.

With Wednesday's US Federal Reserve interest rate hike well in the past, analysts said concerns about the global economy returned and traders were now looking ahead to the next increase.

However, while markets will begin winding down for the Christmas break Friday there are some key economic figures due for release this week, including US economic growth and home sales as well as Japanese inflation and spending.

Crude continued to slide as an ongoing supply glut showed no sign of easing, with figures Friday showing an increase in the number of US rigs drilling, fuelling worries output will continue apace.

US benchmark West Texas Intermediate lost 0.6 percent to $34.50 a barrel and Brent sank one percent to $36.50 in early Asian trade.

Prices have slumped by almost a fifth since December 4 when the OPEC oil producers' group decided against limiting its production, despite tepid demand and the supply glut.

The commodity has sunk more than 60 percent from above $100 in summer 2014 and are now at levels not seen since the financial crisis.

"There hasn’t been any significant signs of a pick-up in demand and we haven’t seen any meaningful cuts to production," Ric Spooner, a chief analyst at CMC Markets in Sydney, told Bloomberg News.

"Nothing has really changed in the oil market over the past couple of months apart from the price."

- Toshiba plunges -

Japan's Nikkei suffered hefty selling pressure as the dollar retreated after Wednesday's Fed-fuelled rally, hitting exporters whose goods are made more expensive overseas.

The greenback slipped to 121.17 yen Monday, well below last week's high above 123 yen touched after the US rate rise. The dollar was also down against the euro.

Tokyo-listed Toyota and Fast Retailing, which operates the Uniqlo clothing brand, each shed more than two percent.

Scandal-hit conglomerate Toshiba lost more than nine percent following a weekend report in the leading Nikkei business daily that it will likely record a fiscal year net loss of about $4 billion.

In a statement Monday, Toshiba said it would hold a board meeting later in the day and discuss "structural reform".

The 140-year-old company was this year hit by revelations that executives systematically pressured underlings to inflate profits in a years-long scheme to hide poor results.

Tokyo's Nikkei stock index ended the morning session 1.7 percent lower. Among other markets Sydney shed 0.4 percent and Singapore was 0.5 percent lower.

However, Hong Kong was up 0.4 percent and Shanghai added 0.8 percent. The losses tracked a sell-off in New York and Europe.

- Key figures at 0300 GMT -

Tokyo - Nikkei 225: DOWN 1.7 percent at 18,664.32 (break)

Sydney - S&P/ASX200: DOWN 0.4 percent at 5,085.30

Hong Kong - Hang Seng: UP 0.4 percent at 21,831.63

Euro/dollar: UP to $1.0882 from $1.0870 late Friday

Dollar/yen: DOWN to 121.17 yen from 121.26 yen

New York - Dow: DOWN 2.1 percent at 17,128.55 (close)

London - FTSE 100: DOWN 0.8 percent at 6,052.42 (close)

https://sg.news.yahoo.com/oil-prices-slump-further-tokyo-hit-yen-strength-034856979--finance.html

Dollar Better Than Gold? Ask Venezuela

2015-05-15T03:53:00.001-07:00

Venezuela's recent experience is instructive. The Chavez regime had moved away from the fiat US dollar and had the bulk of its reserves in gold. Last month, Venezuela's reserves had been drawn down to about $19 bln, of which $14 bln was thought to be gold.

Venezuela has found out the hard way that dollars are better than gold. At the end of last month, it swapped 1.4 mln troy ounces of gold for $1 bln with a large US bank.

Venezuela's gold was discounted by a little more than 40% and it will pay interest on the dollars it receives. The swap is four years in duration, and at the end of it, Venezuela has the first right to buy the gold back.

It is true that Venezuela has a relative extreme macro economic situation. The IMF expects the economy to contract 7% this year after 4% contraction in 2014. Inflation is projected to be well over 100% and the fiscal deficit may be 20% of GDP. The black market rate for the bolivar has depreciated by nearly 50% so far this year. We suspect that when push comes to shove, and it will, Venezuela is more likely to officially devalue than default on its local debt.

One of the advantages for Venezuela of the gold swap is that by some accounting it may still count the gold as part of its reserves. This underscores that central bank reserves many not always be what they seem. Central banks have used a number of ploys to hide the extent of their intervention, like operating in the forward market or conducting off-balance sheet operations, like Brazil's currency swaps. Similarly, Russia had included its sovereign wealth funds in its reserve calculations, but they are not liquid or available.

The dollar's status as the primary reserve assets is partly a function the liquidity and depth of the US capital markets. Gold is not a particular liquid or deep market. Countries cannot service their debt with gold. To monetize it, Venezuela is paying a steep price--a 40% haircut plus interest on its dollar borrowings.

This is not about the present or future price of gold. Venezuela's experience speaks to the use of monetary gold. To service one's debt and pay for imports, one needs paper money or claims thereof. About three quarters of the US reserves are in gold and almost 70% of German reserves are in gold. Greece and Portugal also hold a high proportion of reserves in gold.

This says something about the low level of currency reserves as well as the gold holdings. US gold reserves are worth around $800 bln. Portugal 's economy is about a tenth of the size of the UK, but it has about 70 tonnes more of gold.