Posts tagged Money

It’s no surprise that Twitter – the ingenious and versatile social platform – has been called the “new ticker tape” and is hailed as a valuable tool for gaining an edge in the markets.

After all, dating to the advent of carrier pigeons, every technology breakthrough finds financiers and speculators among the earliest adopters.

The first ticker-tape machines were installed in only a handful of New York banks. Big investment firms were among the first to buy access to undersea telegraph cables. Cheap fiber networks spurred the creation of high-frequency trading bots and $8 online stock trades.

As for Twitter, as far back as October 2010, an academic paper asserted that its “mood predicts the stock market.” New research from the MIT media lab finds that “social traders” – those who monitor peers’ ideas and investment activity – seem to have better trading results than others.

To read more go to Yahoo Finance

In recent years, the criticism about giant Wall Street hedge funds — those that command billions of investor dollars from pension funds, endowments and the wealthy — is that they’re simply too big to beat the market.

But a number of the hedge fund leaders who had giant paydays last year bucked the trend. They earned their riches the old-fashioned way: by posting big returns on their investments.

Certainly, plenty of hedge fund titans took home billion-dollar paydays last year despite the fact they lagged the big gains in stocks. For example, Steven A. Cohen, who controls $15 billion in assets at SAC Capital Advisors, which has been under intense scrutiny by government investigators, fell just short of the market’s returns for 2012. His take-home pay, however, was about $1.4 billion, earning him the No. 3 spot among the best-paid hedge fund managers.

The Bridgewater Associates founder Ray Dalio, the colorful manager whose “Principles” manifesto discusses the virtues of hyenas’ killing wildebeests, also could not quite beat the market. Yet he ended the year $1.7 billion richer, according to the annual ranking released on Monday by Institutional Investor’s Alpha.

But for several on the richest list, good stock bets meant good paydays.

David Tepper, who oversees $15 billion of assets at Appaloosa Management, turned a modest loss in 2011 into a 30 percent gain after fees last year thanks, in part, to big bets on Citigroup, Apple and US Airways. Gains in those stocks helped Mr. Tepper, who charges his investors a 2 percent management fee and takes 20 to 30 percent of any profits, earn a $2.2 billion payday. That was enough to place him No. 1 in the rankings by Institutional Investor’s Alpha. A spokesman for Mr. Tepper declined to comment.

Read the rest of the article here:

A growing body of research tells us that success is not so much a function of raw intelligence, but of work, circumstances and time applied to a specific skill.

It’s a theme that helps power the American meritocracy and drive the dream that anyone can make it if they just try hard enough – even in the knowledge economy.

But it may not be entirely true.

A new study from Jonathan Wai, research scientist at Duke University, finds a strong correlation between brainpower and success – especially wealth. As the study states: “the top one percent in wealth highly overlaps with the top one percent in brains.”

About 45 percent of billionaires are in the top one percent of cognitive ability, the study states. Billionaires were generally smarter than Fortune 500 CEOs, where 38.6 percent were in the top 1 percent of brains. Senators ranked just below that, with 41 percent, along with federal judges 41 percent. Members of the House were less smart, with 21 percent. (The smartest sub group of the American rich and powerful are male Senate Democrats).

Even among billionaires, however, there are wide variations in brainpower. Billionaires who made their fortunes from investments and technology were far more likely to be in the top one percent of brains; 69 percent and 63 percent of them were brain-one-percenters. Billionaires who made their money in fashion and retail, as well as food and beverage, were less brainy: with 25 percent and 23 percent of them in the brain elite, respectively.

So higher brainpower is not just concentrated at the top: it’s concentrated among certain segments of the top.

Read here:

http://www.cnbc.com/id/100637179

Exclusive: Offshore financial industry leak exposes identities of 1,000s of holders of anonymous wealth from around the world

Millions of internal records have leaked from Britain’s offshore financial industry, exposing for the first time the identities of thousands of holders of anonymous wealth from around the world, from presidents to plutocrats, the daughter of a notorious dictator and a British millionaire accused of concealing assets from his ex-wife.

The leak of 2m emails and other documents, mainly from the offshore haven of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as much as $32tn (£21tn) stashed in overseas havens.

In France, Jean-Jacques Augier, President François Hollande’s campaign co-treasurer and close friend, has been forced to publicly identify his Chinese business partner. It emerges as Hollande is mired in financial scandal because his former budget minister concealed a Swiss bank account for 20 years and repeatedly lied about it.

In Mongolia, the country’s former finance minister and deputy speaker of its parliament says he may have to resign from politics as a result of this investigation.

But the two can now be named for the first time because of their use of companies in offshore havens, particularly in the British Virgin Islands, where owners’ identities normally remain secret.

The names have been unearthed in a novel project by the Washington-based International Consortium of Investigative Journalists [ICIJ], in collaboration with the Guardian and other international media, who are jointly publishing their research results this week.

The naming project may be extremely damaging for confidence among the world’s wealthiest people, no longer certain that the size of their fortunes remains hidden from governments and from their neighbours.

BVI’s clients include Scot Young, a millionaire associate of deceased oligarch Boris Berezovsky. Dundee-born Young is in jail for contempt of court for concealing assets from his ex-wife.

Young’s lawyer, to whom he signed over power of attorney, appears to control interests in a BVI company that owns a potentially lucrative Moscow development with a value estimated at $100m.

Another is jailed fraudster Achilleas Kallakis. He used fake BVI companies to obtain a record-breaking £750m in property loans from reckless British and Irish banks.

As well as Britons hiding wealth offshore, an extraordinary array of government officials and rich families across the world are identified, from Canada, the US, India, Pakistan, Indonesia, Iran, China, Thailand and former communist states.

The data seen by the Guardian shows that their secret companies are based mainly in the British Virgin Islands.

Sample offshore owners named in the leaked files include:

• Jean-Jacques Augier, François Hollande’s 2012 election campaign co-treasurer, launched a Caymans-based distributor in China with a 25% partner in a BVI company. Augier says his partner was Xi Shu, a Chinese businessman.

• Mongolia’s former finance minister. Bayartsogt Sangajav set up “Legend Plus Capital Ltd” with a Swiss bank account, while he served as finance minister of the impoverished state from 2008 to 2012. He says it was “a mistake” not to declare it, and says “I probably should consider resigning from my position”.

• The president of Azerbaijan and his family. A local construction magnate, Hassan Gozal, controls entities set up in the names of President Ilham Aliyev’s two daughters.

• The wife of Russia’s deputy prime minister. Olga Shuvalova’s husband, businessman and politician Igor Shuvalov, has denied allegations of wrongdoing about her offshore interests.

•A senator’s husband in Canada. Lawyer Tony Merchant deposited more than US$800,000 into an offshore trust.

He paid fees in cash and ordered written communication to be “kept to a minimum”.

• A dictator’s child in the Philippines: Maria Imelda Marcos Manotoc, a provincial governor, is the eldest daughter of former President Ferdinand Marcos, notorious for corruption.

• Spain’s wealthiest art collector, Baroness Carmen Thyssen-Bornemisza, a former beauty queen and widow of a Thyssen steel billionaire, who uses offshore entities to buy pictures.

• US: Offshore clients include Denise Rich, ex-wife of notorious oil trader Marc Rich, who was controversially pardoned by President Clinton on tax evasion charges. She put $144m into the Dry Trust, set up in the Cook Islands.

It is estimated that more than $20tn acquired by wealthy individuals could lie in offshore accounts. The UK-controlled BVI has been the most successful among the mushrooming secrecy havens that cater for them.

The Caribbean micro-state has incorporated more than a million such offshore entities since it began marketing itself worldwide in the 1980s. Owners’ true identities are never revealed.

Even the island’s official financial regulators normally have no idea who is behind them.

http://www.guardian.co.uk/uk/2013/apr/03/offshore-secrets-offshore-tax-haven

America’s most common jobs come with lousy pay.

Workers in seven of the 10 largest occupations typically earn less than $30,000 a year, according to new data published Friday by the Bureau of Labor Statistics. That’s a far cry from the nation’s average annual pay of $45,790.

Food prep workers are the third most-common job in the U.S., but have the lowest pay, at a mere $18,720 a year for 2012. Cashiers and waiters are also popular professions, but the average pay at these jobs tallies up to less than $21,000 annually. There are 4.3 million retail sales workers out there, making them the most common job, but the position pays only $25,310 for the year.

Among the 10 most popular professions, only the nation’s 2.6 million registered nurses earn a good living, bringing home nearly $68,000 a year on average. Another two of the most common jobs — secretaries and customer service representatives — have an average annual wage of about $33,000.

Wages have been in the spotlight this year as the debate over income inequality intensified. Middle-class Americans have been losing ground, as median household income dropped by more than $4,000 since 2000.

Part of this decline stems from a disappearance of middle-class jobs and an explosion of lower-paying ones. Some 58% of the jobs created during the recovery have been low-wage positions, according to a 2012 report by the National Employment Law Project. These low-wage jobs had a median hourly wage of $13.83 or less.

President Obama has been pushing to raise the federal minimum wage to $9 an hour, and several states are considering increasing their minimum wages.

Billionaire hedge fund manager David Tepper is still extremely bullish and he thinks the S&P could rise 20 percent or more this year, CNBC’s Kate Kelly reported on “Halftime Report” citing an unnamed source familiar with his thinking.

Tepper, the founder of $12 billion-distressed-debt hedge fund Appaloosa Management, doesn’t see much more than short term volatility, Kelly said.

She added that he’s surprised that the year-to-date hasn’t been stronger, according to a source familiar with Tepper’s thinking.

Tepper also sees real GDP growth of 2.25% and a lot of cash on the sidelines.

Tepper has a track record for being one of the best performing hedge fund managers on the Street.  So far this year, he’s up more than 10%.  February was flat for Tepper, according to Kelly. 

Back in January, Tepper told Bloomberg TV’s Stephanie Ruhle that he was going to “come out of the closet” as being bullish in 2013. 

His reasoning was that there there were no major negatives and basically nothing to really be bearish about.

“This country is on the verge of an explosion of greatness,” he told Bloomberg TV, ”An explosion of greatness.”

Read more: http://www.businessinsider.com/tepper-thinks-sp-could-rise-20-percent-2013-3#ixzz2NRFjjO00

New allocations to hedge funds may more than triple this year, pushing the global industry’s assets to a new high, according to an annual survey by Deutsche Bank AG. (DBK)

Hedge fund assets worldwide may increase 11 percent to $2.5 trillion by year-end, according to the survey by the Germany’s largest bank. Investors indicated they will add $123 billion of capital to the industry, in addition to investment returns that are expected to boost assets by $169 billion, the Frankfurt- based bank said.

Hedge funds are forecast to draw more net deposits as investors, especially institutions, pursue more stable returns with low correlation with other assets such as stocks and bonds, the report showed. The $2.3 trillion global industry gained an average 6 percent last year, taking in $34.4 billion of net inflows, according to Chicago-based data provider Hedge Fund Research Inc.

http://www.bloomberg.com/news/2013-02-25/new-hedge-fund-deposits-to-triple-in-2013-deutsche-bank-says.html

1. Super Bowl Winner

TIMOTHY A. CLARY/AFP/Getty Images

Indicator Explained: Root for the NFC Division team. A win from an old NFL team (today’s NFC) 
portends a market increase for the rest of the year 80% of the time. Trend stretches all the way back to when the AFL and NFL played for the Vince Lombardi Trophy. 

Bullish Or Bearish In 2013? Bullish. This is a bit confusing, but it’s because this year’s champs, the AFC Division Baltimore Ravens, were actually a NFL team in Cleveland. 


2. Coupons

Indicator Explained: When the economy is bad, shoppers look to save any way possible. Things get better, coupon demand decreases. The volume of coupons rose until 2010 – peaking at more than 178 billion coupons just for consumer packaged goods. That’s about 570 coupons for each American. 

Bullish Or Bearish In 2013? Bullish. After demand hit highs in 2010, coupon volume has fallen. Coupon issuance was down about 8% through last June (the latest figures available). 

Source: NCH


3. Sports Illustrated Swimsuit Edition

REUTERS/Carlo Allegri

Indicator Explained: Bespoke Investment Group research has proven that an American on the nudey cover portends a bull market. 

Bullish Or Bearish In 2013? Bullish. Supermodel and Michigan native Kate Upton graced the cover again this year.




4. Men’s Underwear

AP Photo/H&M

Indicator Explained: Rarely seen, rarely replaced. When men start shopping for these long-lasting garments, consumer confidence seems higher. 

Bullish Or Bearish In 2013? Bearish. Men’s underwear was 3% of the overall menswear industry in 2008. It has since shrunk to 2.2%, and it is expected to contract further during the next five years.

Source: IBIS World


5. Divorce Rates

Indicator Explained: Financial problems strain a marriage, and make it more likely to break apart. 

Bullish Or Bearish In 2013? Unclear. The latest accurate figures are outdated (from 2009), but show an overall decrease in divorce, regardless of the economy.

Source: U.S. Census Bureau



6. Help-Wanted Ads

Indicator Explained: More help-wanted ads, more demand by employers. This means employers are hiring, likely a sign of greater business and consumer spending. It’s a measure valued enough to be tracked by the Conference Board, which distributes some of the most widely read reports, like the Consumer Confidence Index and Leading Economic Indicators Index. 

Bullish Or Bearish In 2013? Bullish. There were more than 5 million help-wanted ads posted in January, up 15% from a year earlier.

Source: Conference Board


7. Napa Valley Wine Auction

AP Photo/Eric Risberg

Indicator Explained: Held in luscious Northern California, samplings of prime vintages and dainty finger-foods help pry dollars from the attendees of this annual event. During more prosperous times, the event raises more money. A 2003 study by wine industry consulting firm Motto Kryla Fisher found overwhelming correlation between increases in auction proceeds and the Dow Jones industrial average. 

Bullish Or Bearish in 2013? Bullish. The auction took more than $8 million last year, up from $7.3 million a year earlier. This year’s event will take place in May.

[More from Forbes: Full List: 10 Quirky Economic Indicators]


8. Lipstick

Indicator Explained: Leonard Lauder is something of a wannabe economist, in addition to being a former executive of the eponymous cosmetics company. He posited that women tended to buy more lipsticks and makeup during tough economic times—a more cost-conscious way to maintain a glamorous appearance than, say, splurging on a new handbag. 

Bullish Or Bearish in 2013? Bullish. Lipsticks sales are indeed set to rise again this year. But lipstick sales have seemed fairly recession-proof in the last two decades. Plus, not all cosmetics companies reported results in the past few years, making it hard to draw a clear correlation.

Source: IBIS World


9. Diapers

Indicator Explained: Parents in past recessions went without and still managed to keep up spending on their children. Not so during the latest financial crisis. Diaper sales fell during the financial crisis, as seemingly essential goods became luxuries. 

Bullish Or Bearish In 2013? Bullish. The diapers industry is expected to continue to grow, reaching $5.4 billion. For perspective, the industry totaled more than $5.7 billion just four years ago.

Source: Euromonitor


10. Hot Waitresses

AP Photo/Matt York

Indicator Explained: In hard times, attractive females who’d normally work as models or try to put out their shingle as starlets instead turn up as Hooters hostesses. 

Bullish Or Bearish In 2013? Unclear. We suggest you perform your own field research on this. Lunch break!

http://finance.yahoo.com/news/what-10-quirky-indicators-tell-us-about-today-s-economy-182851210.html

There is nothing more tedious in the world today than the sequester. The word itself sounds like a prescription sleeping aid. So let’s keep this brief.

Read all the boring details here: http://www.theatlantic.com/business/archive/2013/02/everything-you-need-to-know-about-the-sequester-the-most-boring-budget-crisis-ever/273442/

For the first time since the New Deal, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation’s elderly, according to a growing consensus of new research.

SOURCE:  Washington Post.