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Chicago Tribune (July 19)

2012/ 07/ 21 by jd in Global News

“The Chicago-based futures industry needs to better protect its clients.” Unlike banks (backed by the FDIC) or brokers (backed by the SIPC), the futures industry lacks a backstop to protect customer accounts. Last year MF Global went bankrupt, with customers losing up to $1.6 billion of their own supposedly safely segregated funds. More recently, Peregrine Financial Group went bankrupt. Customer funds are again missing. “There is no substitute for a well-capitalized insurance fund covering customer accounts…. The industry’s version of the FDIC and SIPC needs to be put in place soon — before the next firm goes belly up and takes its customers’ money with it.”

 

New York Times (July 18)

2012/ 07/ 20 by jd in Global News

Continuing reports that “big investors systematically receive early word of important company developments” is an unwelcome development for everybody. “The result will be a less robust market, a less robust economy and a less wealthy society, as individuals are unable to mass the sums needed for retirement. But until the stock markets are restored to health — with rules and protections that are clearly understood and enforced — individual investors have reason to be wary.”

 

Bloomberg (July 16)

2012/ 07/ 19 by jd in Global News

“For the first time in recent history, the average Canadian is richer than the average American…. The net worth of the average Canadian household in 2011 was $363,202, while the average American household’s net worth was $319,970.” Canadians are also enjoy a lower unemployment rate at 7.2% versus 8.2% for the U.S. Canadians are benefiting from the Alberta tar sands, which now ranks as the world’s third largest oil reserves.

 

Forbes (July 16)

2012/ 07/ 18 by jd in Global News

Free markets and technology promote competition, revolutionizing one industry after another. “The legal profession is also starting to get hit by the whirlwinds of what Joseph Schumpeter called creative ­destruction. There’s a proliferation of legal apps that show you how to write wills and take care of other such tasks without the bother and expense of an attorney. There will soon be numerous businesses with low-paid lawyers manning call centers to answer any questions. Entrepreneurs in India will also train individuals to handle routine legal matters in the U.S., via the Web and phone. State bar associations will howl, but strictures preventing individuals from taking bar exams without first completing law school will be undermined by the Web.”

Free markets and technology promote competition, revolutionizing one industry after another. “The legal profession is also starting to get hit by the whirlwinds of what Joseph Schumpeter called creative ­destruction. There’s a proliferation of legal apps that show you how to write wills and take care of other such tasks without the bother and expense of an attorney. There will soon be numerous businesses with low-paid lawyers manning call centers to answer any questions. Entrepreneurs in India will also train individuals to handle routine legal matters in the U.S., via the Web and phone. State bar associations will howl, but strictures preventing individuals from taking bar exams without first completing law school will be undermined by the Web.”

 

Chicago Tribune (July 15)Chicago Tribune (July 15)

2012/ 07/ 17 by jd in Global News

American politicians “have their compression shorts in a knot over the news that the U.S. athletes competing in London will march wearing berets and blazers made in China.” They should relax. “The U.S. Olympic Committee got the outfits from Ralph Lauren, which made them in China. That’s not exactly unusual these days.” Given the economics, it’s sensible and “it’s folly to resist that reality….The Games, like international markets, are a truly global phenomenon that binds the people of the Earth together. They are no place for petty nationalism.”

American politicians “have their compression shorts in a knot over the news that the U.S. athletes competing in London will march wearing berets and blazers made in China.” They should relax. “The U.S. Olympic Committee got the outfits from Ralph Lauren, which made them in China. That’s not exactly unusual these days.” Given the economics, it’s sensible and “it’s folly to resist that reality….The Games, like international markets, are a truly global phenomenon that binds the people of the Earth together. They are no place for petty nationalism.”

 

The Economist (July 14)

2012/ 07/ 16 by jd in Global News

With unemployment over 8% and full year growth expected to now come in at less than 2%, the U.S. economy still looks weak. The Economist notes, however, the ”comeback kid” is making progress. “America’s economy is certainly in a tender state. But the pessimism of the presidential slanging-match misses something vital. Led by its inventive private sector, the economy is remaking itself …. Old weaknesses are being remedied and new strengths discovered, with an agility that has much to teach stagnant Europe and dirigiste Asia.”

 

Financial Times (July 12)

2012/ 07/ 15 by jd in Global News

“The banking sector hardly needs another scandal.” In just two weeks, Barclays has been sanctioned for market fixing Libor submissions, the Royal Bank of Scotland had a system failure which hindered customer account access, and now HSBC is being hauled in front of Congress for money laundering. “With the world’s biggest banks entangled in investigations, it is foolish to think that the industry, already scraping the bottom of the barrel of public goodwill, has put the worst behind it.”

 

Washington Post (July 11)

2012/ 07/ 14 by jd in Global News

“The eclipse of the long-term shareholder has been accompanied by the eclipse of the individual shareholder.” Over 90% of shares in U.S. companies were held by individuals in the 1950s when the average share was held 7 years. Today, it’s about 30-35% and just 6 months. Institutional investors now make up the difference, but this raises some problems. “Investment funds that hold shares in many different companies often lack the resources to focus on a single corporation’s performance.” As such, they may not be properly fulfilling their role in ensuring effective corporate governance.

 

Wall Street Journal (July 10)

2012/ 07/ 13 by jd in Global News

“The Government Accounting Standards Board has issued new rules that aim to crystallize government pension liabilities. It failed on that count, but it did succeed, albeit inadvertently, in making the case for defined-contribution plans.” By using artificially high expected rates of return in their calculations, local governments have created a massive pension liability that will eventually come due.

 

New York Times (July 10)

2012/ 07/ 12 by jd in Global News

“The recent heat wave that has fried much of the country, ruined crops and led to heat-related deaths has again raised the question of whether this and other extreme weather events can be attributed to human-induced climate change. The answer, increasingly, is a qualified yes.” While individual events such as floods, hurricanes and heat waves cannot be blamed directly on global warming, the consensus is that global warming increases the frequency of these and other extreme weather events.

“The recent heat wave that has fried much of the country, ruined crops and led to heat-related deaths has again raised the question of whether this and other extreme weather events can be attributed to human-induced climate change. The answer, increasingly, is a qualified yes.” While individual events such as floods, hurricanes and heat waves cannot be blamed directly on global warming, the consensus is that global warming increases the frequency of these and other extreme weather events.

 

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