International hospitality awards usually go to hotels with the most creative design, impeccable service and attention to amenities like ultra-plush bathrobes. But the winner of the latest “hospitality innovation award” from PKF hotelexperts was selected on entirely different criteria.
The New Zealand Superannuation Fund, the country’s sovereign-wealth fund, has averaged a solid 8.8% annual return since it was founded in September 2003. But it gained 19.2% in 2012 and 25.8% in the fiscal year ending in June 2013. How come? CEO Adrian Orr told Institutional Investor in an interview that the financial crisis forced it to think differently about how it invests money.
In response to signs that the US Federal Reserve could start winding down its massive stimulus program this year, investors pulled some $25.5 billion out of emerging market bond funds over 17 weeks, according to Barclays estimates. The flight of capital has reversed recently, but it’s not likely to all go back. The Institute of International Finance (IIF) now predicts that $153 billion fewer dollars will flow into emerging markets in 2013 than did in 2012, and total inflows of cash will fall further in 2014. In June, it had estimated that inflows in 2013 would fall just $70 billion.
The privacy scandal that shook Bloomberg in May could be coming back to bite it. Today, Markit and Thomson Reuters formally announced their new messaging system for finance professionals, Market Collaboration Services. It seems designed to compete with the chat function on Bloomberg terminals, to which Bloomberg owes part of its dominance as a data provider. The two companies said today that Bank of America Merrill Lynch, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase and Morgan Stanley were all on board.
Citigroup this week agreed to pay $30 million to settle allegations that analyst Kevin Chang improperly revealed inside information about Apple’s supply chain to clients at at four different firms before his report was publicly available. It’s the latest installment of a war on “insider trading 2.0,” in which regulators are trying to eliminate advantages firms offer only their best clients.
Wayne Kinkel thought he was out of luck when his golden retriever decided that a stack of five $100 bills was a more enticing meal than what was in the dog bowl. “He’s been notorious for eating paper products,” said the Montana-based graphic designer. “I knew right away what had happened.”
The world of finance has been abuzz with speculation over which stock exchange Twitter will choose to list its shares. That traditionally would likely have gone to the tech-focused Nasdaq exchange. But recent software glitches—including around Facebook’s troubled 2012 listing—have hurt the exchange’s reputation. In fact, reports suggest that the listing is more likely to end up on the New York Stock Exchange (NYSE). Those talks still could be continuing.
Watson may have racked up cash on Jeopardy and Deep Blue may have beaten chess champion Garry Kasparov, but if robots are managing your money right now then they’re probably doing one thing: losing it.
Daniel Loeb, head of hedge fund Third Point and a prominent activist investor, is after his latest victim: Sotheby’s CEO William Ruprecht, who Loeb wants to oust from the company.
Yesterday, the US Securities and Exchange Commission (SEC) announced that it would give an unnamed whistleblower $14 million for helping it pin down a case against a firm or individuals. The details are hazy—partly because the whistleblower didn’t want to be identified—but the message is clear: If you report securities violations to the SEC and help them win a case, you could win big.
It’s just a week until third-quarter earnings season for US companies kicks off in earnest, and so far the numbers don’t look pretty. The number of companies that have already said they’re looking at a bad third quarter is at a record high, according to Factset (pdf), which has tracked earnings guidance since 2006. Meanwhile, according to Thomson Reuters data, during the last two quarters companies have slashed their earnings expectations more than at any point since 2001.
Believe it or not, Goldman Sachs is on Github. For all you non-programmers out there, Github is a platform that allows developers to write software online and, frequently, to share it with others. For banks—which have typically kept technology behind closed doors—that’s an alien concept. And for Goldman, being on Github is even stranger.
The US Securities and Exchange Commission (SEC) could stay open for “a few weeks” even if the US government shuts down, spokesman John Nestor said in a statement today. This could quiet concerns that Twitter’s initial public offering could be delayed because of a government shutdown. Here’s the full statement:
A US government shutdown is looming and politicians are hardly closer to averting it. If the shutdown went into effect, dozens of government agencies would be affected. But some of the most public-facing and time-sensitive agencies are the two financial market regulators—the Securities and Exchange Commission and the Commodity Futures Trading Commission—that make the wheels of US markets spin. Those agency could close their doors potentially for weeks, slamming the breaks on non-urgent government matters like processing IPO filings, investigating most financial crimes and passing the Dodd-Frank financial reform bill.
When journalists get early access to US Federal Reserve statements, the system has flaws that make it easy to see how the information could get out early. That’s what may have happened last week with the Fed’s surprise decision not to taper its bond-buying program. The news started to move markets at the very millisecond of its official release, earlier than should have been possible.
Copying a credit card’s number or even the data out of its magnetic strip is easy. But imagine if all your information were embedded in the very fabric of any piece of plastic in a way that’s invisible to the naked eye.
If there’s one kind of banking that’s been repeatedly touted since the financial crisis, it has to be wealth management. Banking, we’re told, needs to become more boring. And in wealth management, the incentives of money managers are more directly aligned with those of their customers.
Mark Zuckerberg beat the twins Cameron and Tyler Winklevoss to the punch in launching Facebook. Now someone else seems to be stealing a march on their plan to launch an investment scheme for bitcoin.
If there’s been one clear beneficiary of the housing crisis, it’s landlords. With people losing or unable to purchase homes, the rental market has been flooded with demand. And though the housing market has improved a lot since 2008, the amount of money the typical American household pays in rent is at an all-time high ($735, see chart below).
In his harshest words to date on the subject, New York attorney general Eric Schneiderman said that early releases of private, market-moving data to premium subscribers amount to “insider trading 2.0.”
BlackBerry’s largest shareholders—led by Fairfax Financial Holdings—have just floated a $4.7 billion deal to take the company private, after five years of spiraling downwards. That works out to $9 per share, or 6% of BlackBerry’s peak share price.
Media outlets—ourselves included—have made fun of new rules that will allow private companies and hedge funds in the US to advertise that they’re raising money. Those rules, lifting a ban on “general solicitation,” are part of the JOBS Act passed last year, and go into effect today. But as funny as the new rules may seem (A hedge fund, advertise on a billboard?), they could be transformative. And their effect on hedge funds is the least important reason.
On Sept. 18, gold futures surged nearly $20 in the 30 seconds after the US Federal Reserve released the news that it would not “taper” the monetary stimulus it’s feeding the economy. Someone made a lot of money off of that—potentially by dubious means.
Catastrophe bonds—essentially a gamble on the likelihood of natural disasters—have been the fifth best-performing asset class since the financial crisis, according to research conducted by Deutsche Bank (and shown above). If you had invested your money at the fall of Lehman Brothers in September 2008, only silver, gold, and high-yield debt from the US and the European Union would have made you more money.
