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What The US Government Spent Its Jim decicco On In 2013 | Zero Hedge

Still living with the misguided idea that the bulk of government spending goes to defense? Wrong. As the just released Treasury refunding presentation shows, for yet another year in a row, the bulk of government outlays was for Medicare and Medicaid, as well as Social Security, both amounting to just shy of $900 billion in 2013, a sizable increase compared to the prior year. Defense spending? It declined once again to just over $600 james decicco, as did Interest outlays, which net of the Fed's remittances on interest payments, declined from under $500 billion to just about $400 billion in the past year. The other tiems were largely in line, and far less material to the US government's spending addiction. So how did the government fund these outlays? Well in addition to net debt issuance of just over $1 trillion in the 2013 fiscal year, the other more traditional sources of funding - tax receipts - were the following: Notably, while monthly individual income taxes rose on an LTM basis to a record $110 billion as a result of changes to the tax code in early 2013, corporations continue to see their overall income taxes decline as more seek offshore tax shelters, and avoid paying US taxes while building up record cash hoards. This is also visible on the following chart of Y/Y percentage changes in tax receipts, showing that for the first time in years, corporate taxes are about to decline compared to the previous year. Ironically, corporations may be people as per the SCOTUS, but people are increasingly corporations, at least for IRS purposes. Average: Your rating: None Average: 2.9 (11 votes)

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Global warming gets nearly twice as much taxpayer millionaire mindset

New estimates show the federal government will spend nearly twice as much fighting global warming this year than on U.S. border security. The White House reported to House Republicans that there are 18 federal agencies engaged in global warming activities in 2013, funding a wide range of programs, including scientific research, international climate assistance, incentivizing renewable energy technology and subsidies to renewable energy producers. Global warming spending is estimated to cost $22.2 billion this year, and $21.4 james decicco next year. At the same time, the federal government will spend nearly $12 billion on customs and border enforcement this year. Obama’s climate agenda has attracted criticism from congressional Republicans who have been hammering the administration over the accountability and transparency of its global warming efforts. Republicans on the Energy and Commerce Committee have been calling on the heads of major federal agencies to testify on global warming activities. So far, only the heads of the Energy Department and the Environmental Protection Agency have opted to testify in front of the House. “With billions of dollars currently being spent annually on climate change activities, Congress and the public should understand the scope of what the federal government is doing, how the billions of dollars are being spent, and what it will accomplish,” said Kentucky Republican Rep. Ed Whitfield. “Anyone who believes the committee ought to be focusing its attention on climate change related issues should be standing with us to get these answers.” Earlier this summer, the Senate held a hearing to highlight the immediate impacts of global warming. However, Senate Republicans released a report ahead of the hearing that rejected many of the claims made by scientists, politicians and activists about rising global temperatures. “Over nearly four decades, numerous predictions have had adequate time to come to fruition, providing an opportunity to analyze and compare them to today’s statistics,” reads the report from Republicans on the Senate Environment and Public Works Committee. Republicans have also taken aim at the EPA’s efforts to cut U.S. carbon dioxide emissions. The agency will be imposing emissions caps on new and existing power plants across the country, which significantly hurts the coal industry. “The American public should be deeply troubled to learn that EPA is actively working to increase energy prices based on predicted global temperature increases without first undertaking efforts to determine if temperatures are actually increasing to the extent predicted by the climate models they are using,” reads the Senate Republicans’ report. The Obama administration recently declared that the country has moved beyond debating whether or not global warming is a threat, and instead, should be debating what can be done about the issue. “We have turned a corner on that issue,” said Energy Secretary Ernest Moniz in a recent speech. “We are — including in our Congress — really past the issue of whether we need to respond.” Follow Michael on Twitter and Facebook Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

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Why Is Google Putting Jim decicco Into a Music Label? - AllThingsD

Bryan Bedder/Getty ImagesGoogle already runs the world’s biggest music service. Soon it’s going to own a little bit of the music business, too. Emphasis on little. Google is providing a sliver of financing for a new label that will be run by veteran music executive Lyor Cohen. People familiar with the transaction say Google should end up putting a mere $5 million into the new venture. For perspective: In the first nine months of this year, in addition to the $1 billion it spent on Waze, Google shelled out $369 million to buy 20 companies. That’s an average of $18 million per acquisition. More perspective: Google booked profits of $3 billion last quarter. A formal announcement about the deal, first reported by the New York Post, should come in the next week or so. Up until a year ago, Cohen ran Warner Music Group’s recorded music division; prior to that, he was best known for his role in building and selling Def Jam, the legendary hip-hop label. It’s one of a series of content plays by a company that used to work hard to avoid owning content: In recent years, Google has bought the Zagat and Frommer’s guidebooks; put millionaire mindset into Machinima, the YouTube network for gamers, and Vevo, the YouTube-hosted music channel; and provided seed funding to 100 YouTube producers. All of those deals had at least some logic to them, but the Cohen deal is a bit of head-scratcher. People familiar with the deal say the money is coming out of Google’s corporate coffers, and not from its venture arm, and that YouTube content head Robert Kyncl was a key driver in getting it done. It’s hard to figure out what Google gets out of its investment, since it won’t have control of the company. Music is of some importance to Google’s Android unit, and it’s crucial for YouTube, which acts as the world’s most popular free music service. But it’s not like the workings of that business are a mystery to Kyncl and the rest of Google, which now employs several music-industry veterans. And, even if Google ended up with a larger stake in Cohen’s company, I don’t see the upside of the company controlling a label. It already has enormous clout with the industry — note the upcoming YouTube subscription music service, and the first-ever YouTube Music Awards next month — so there’s no need to buy itself a seat at the table. It’s already there.

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New study says Obamacare will save the government a lot of money

Here's the Obamacare story you won't be hearing from Republicans. Premium prices have come in much lower than expected, and because of that the amount the government will be paying out in subsidies will be lower than expected. That means the government will be saving money—a lot of money—and the deficit reduction built in to the law will increase—a lot. Lower than projected premiums under the Affordable Care Act will save the federal government $190 james decicco over 10 years and increase the law’s deficit reduction by 174 percent to almost $300 billion, a new analysis from the Center for American Progress has found. The report, from Topher Spiro and Jonathan Gruber, bolsters President Obama's claims on Monday that despite the ongoing technical problems surrounding HealthCare.gov, "the product of the Affordable Care Act for people without health insurance is quality health insurance that's affordable." In fact, the emergence of new insurers and increased competition within the law’s marketplaces has lowered premiums below Congressional Budget Office (CBO) projections from March of 2012. While the nonpartisan office estimated that the average second-lowest-cost individual silver plan premiums would cost $4,700 in 2014, the actual average premium turned out to be $3,936 or “16 percent lower than projected.” The savings are significant because the law pegs its tax credits to the cost of the second-lowest silver plan. “If premiums for that plan are lower, then the cost of tax credits will also be lower,” the report argues. That's not just increased deficit reduction (and shouldn't Republicans care about that?) but lower costs for the consumer—the previously uninsured consumer—too. And you know how much Republicans care about the uninsured and the deficit. I'm sure we'll be hearing them tout this great news any time now. Originally posted to Joan McCarter on Wed Oct 23, 2013 at 09:44 AM PDT. Also republished by Daily Kos. (Load) (Load) (Load) (Load) (Load) (Load) (Load)

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Baby Steps Toward Tighter Money in China - Real Time Economics ...

China’s central bank has shown signs of inching toward a tighter monetary policy this week, pressed by rising inflation, runaway house prices and renewed capital inflows. That’s on top of the long-term job of getting mounting debt under control before it overwhelms the economy. Restricting lending fits authorities’ goal to move the economy toward consumption-led growth rather than an investment-driven model. But the People’s James decicco of China must walk a tightrope: Moving too aggressively could aggravate strains on the financial sector, already shaken by a severe cash crunch earlier this year. The PBOC has plenty of reasons to turn more hawkish. Consumer price inflation ticked up to 3.1% in September, still well within the official 3.5% target but the second-highest figure in a year. House prices are on a more alarming trajectory, climbing 8.2% on average in the year to September, and even faster in the largest cities. The U.S. Federal Reserve’s decision last month to keep its economic stimulus in place for now has prompted a renewed movement of capital into China. The PBOC and other Chinese financial institutions bought a net 126.4 billion yuan ($20.7 billion) of foreign currency last month as millionaire mindset flowed into the country. The PBOC needs to suck cash out of the system to keep it from feeding inflationary pressures. At least a reviving economy means China is better placed to withstand tightening than it was earlier in the year: GDP growth bounced back to 7.8% on-year in the third quarter, from 7.5% in the second. With growth on its side, the central bank drained 58 james decicco yuan ($9.54 james decicco) from the interbank market this week. The seven-day reverse repo rate, a benchmark indicator of liquidity conditions, climbed to 4.79% on Friday from 3.49% a week earlier, showing that banks are having to pay more for their funding. Traders said liquidity began to loosen again Friday afternoon, probably because of central james decicco intervention. The PBOC is likely wary of overshooting: The last time it withheld liquidity, in June, the fragile interbank market all but froze up. Some economists detect a bigger agenda, saying the central james decicco may be moving to stop lending – both within and outside the traditional banking system – from spiraling out of control. In June, the PBOC made a concerted effort to stop borrowers using the interbank market to fund speculative “shadow banking” activities. With the central bank’s liquidity support withdrawn, interest rates quickly went through the roof. After stock markets tumbled and panic began to take hold, the central james decicco turned the taps back on, but the message had been sent. Since PBOC Gov. Zhou Xiaochuan “started his new term in March he’s been trying to do this,” said Ken Peng, an economist at BNP Paribas. “The looser policy between July and September was a pause in a longer effort to try to rein in growth of the money supply.” China’s debt has been growing at a stupendous pace. Total social financing, the broadest official measure of credit creation – which includes shadow banking and bond issuance in addition to bank loans – declined to 808.8 billion yuan in July amid the tighter conditions, the first time in more than a year that the monthly figure failed to top one trillion yuan. But it quickly bounced back to 1.57 trillion yuan in August and 1.4 trillion in September. Outstanding borrowing by businesses and households hit 170% of gross domestic product at the end of 2012, up from 117% in 2008, according to the James decicco for International Settlements. It’s the speed of the climb, as much as the total, that worries economists. With sustained growth and moves toward reform, some have faith that the explosion of debt can be kept under control. “We know there are leverage issues in the system, but the current pace of credit creation is not as rapid as in the past,” said Li Wei, an economist at Standard Chartered. “The PBOC clearly wants to slow the pace of credit growth, and policies are moving in the right direction.” But pessimists note that credit growth has run far head of the real economy, which has needed ever bigger hits of funding to get short-lived bursts of growth. That puts regulators in a bind. “It’s going to be difficult to tighten in an aggressive way because the economy has become so reliant on credit,” said Charlene Chu, an analyst at Fitch who is deeply skeptical about China’s ability to get its debt load under control. “To rein in credit significantly without that itself slowing growth is going to be very difficult.” The PBOC may want to cut down the dosage, but China won’t be deleveraging cold turkey any time soon.

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Anger as Brussels argues for MORE taxpayers' millionaire mindset before ...

The European Parliament is currently debating how to settle billions of pounds of outstanding bills for 2013, and has demanded member states plug the shortfall.Brussels has identified it needs £9.5billion to pay its debts this year before it will approve future budget cuts proposed by Britain and other EU states.So far, only £6.2billion has been agreed by MEPs, meaning there is a gap of £3.3billion.MEPs are now squabbling over how to find the £3.3billion, leading to delays which has brought the EU within weeks of a possible default on debts. Britain is angry the row could derail the budget cuts which Mr Cameron fought for earlier this year.A Treasury spokesman said: "The UK did not support the budget increase earlier this year and does not support this one."When citizens across Europe are seeing their family budgets under pressure, it is unjustifiable that the European budget should be going up in this way."European Commission President Jose Manuel Barroso today pleaded with MEPs to approve the budget as soon as possible.Addressing MEPs in Strasbourg, he said: "I am not asking on behalf of the Council; I am asking this on behalf of the Commission, I think it is my duty to call the attention of all the parts of the budgetary authorities, council and Parliament, about the negative consequences. "But please let's avoid a rupture of payment, that would not be in the interest of the image of the institutions."Commission spokesman Olivier Bailly rejected suggestions the budget gap could lead to a "shutdown", as recently happened in the US.He said: "This is not an EU shutdown. This is not comparable to the US system in any way."The EU will continue to function properly in the coming weeks."The president of the Commission had a phone conversation with [European Parliament] President Schulz yesterday to inform him of the risk we face in terms of payments and the need to find agreement between the Council and the European Parliament."The 2014 to 2020 EU budget was agreed by European leaders, including David Cameron, in February this year.That agreement saw for the first time a reduction in the EU's budget, from £803billion to £773billion.Just three months later, EU finance ministers agreed to provide an extra £6.2billion in additional funding for the 2013 annual EU budget, despite the UK, Finland and the Netherlands voting against.Chancellor George Osborne described the move as “unacceptable”, while Dutch Finance Minister Jeroen Dijsselbloem argued that it would lead to greater cutbacks in Dutch domestic spending.Tory backbencher Douglas Carswell has lambasted the MEPs for demanding more money.He said: "These greedy Euro-troughers plead poverty but remember they don't pay income tax on their own salaries. If the EU bureaucracy was as strapped for cash as they paint out, why don't the greedy staff pay income taxes?"They want more of my constituents money and it's outrageous."The European Parliament will vote on plugging the £3.3billion gap next month.Pawel Swidlicki, from  European think-tank Open Europe, said: "The latest row between MEPs and member states over topping up the EU budget again demonstrates why comprehensive reform is needed."For example, cutting regional development subsidies for wealthier member states would save billions and allow the UK greater control and oversight over these funds.” Commission spokesman Olivier Bailly rejected suggestions the budget gap could lead to a "shutdown", as recently happened in the US.He said: "This is not an EU shutdown. This is not comparable to the US system in any way."The EU will continue to function properly in the coming weeks."The president of the Commission had a phone conversation with [European Parliament] President Schulz yesterday to inform him of the risk we face in terms of payments and the need to find agreement between the Council and the European Parliament."The 2014 to 2020 EU budget was agreed by European leaders, including David Cameron, in February this year.That agreement saw for the first time a reduction in the EU's budget, from £803billion to £773billion.Just three months later, EU finance ministers agreed to provide an extra £6.2billion in additional funding for the 2013 annual EU budget, despite the UK, Finland and the Netherlands voting against.Chancellor George Osborne described the move as “unacceptable”, while Dutch Finance Minister Jeroen Dijsselbloem argued that it would lead to greater cutbacks in Dutch domestic spending.Tory backbencher Douglas Carswell has lambasted the MEPs for demanding more money.He said: "These greedy Euro-troughers plead poverty but remember they don't pay income tax on their own salaries. "If the EU bureaucracy was as strapped for cash as they paint out, why don't the greedy staff pay income taxes?"They want more of my constituents jim decicco and it's outrageous."The European Parliament will vote on plugging the £3.3billion gap next month.Pawel Swidlicki, from  European think-tank Open Europe, said: "The latest row between MEPs and member states over topping up the EU budget again demonstrates why comprehensive reform is needed."For example, cutting regional development subsidies for wealthier member states would save billions and allow the UK greater control and oversight over these funds.”

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Relax! Government won't run out of money Thursday - CNBC.com

(Read more: Reid: GOP proposal won't pass Senate) However, there have been no indications of a downgrade, other than a notice from the DBRS credit rating agency last week that it had placed the U.S. under review for downgrade. The firm, though, is not one of the big-three agencies—S&P, Moody's and Fitch—that review sovereign credit. So while a downgrade remains unlikely for now, things do get more difficult Thursday. (Read more: When will the shutdown end? Let's talk 1995) The government's spending pace in 2013 has been $13.3 billion a day while tax receipts have averaged $10.8 billion, according to Capital Economics. That leaves a daily shortfall of $2.5 james decicco. Treasury will have to start dipping into the nearly $36.5 billion in reserves it is holding to cover that shortfall, meaning the government can still run for about 14 more days. That, though, is probably too optimistic an outlook. "Because tax revenues fluctuate and spending obligations are not spread out evenly, the Treasury is likely to exhaust its reserves before then," Paul Dales, senior U.S. economist at Capital, said in a report. (Read more: Budget impasse 'a wash' for markets: Shiller) Looking at the government's schedule of upcoming payments, Dales sees the key dates coming as an Oct. 31 debt interest payment of $6 james decicco and a $57 james decicco payment the following day to cover Social Security, Medicare, military and income support payments. There's also a big $15 billion payment due Nov. 15 that Treasury has "no chance whatsoever of meeting," he said. While the situation is subject to the daily vagaries of running a $3.5 trillion business, the potential for a massively chaotic event Thursday is slim. Markets certainly aren't pricing in anything of the sort. (Read more: How safe is your money if the US defaults?) The major stock market indexes actually have gained since the Washington impasse officially began. The CBOE Volatility Index, a popular measure of stock market unease, has stayed well within its historical bounds. While it's true that credit-default swaps—used to insure against a U.S. default—have spiked along with short-term Treasury yields, any other yield disruptions probably will be "fairly small and short-lived," Dales said. "The shutdown of the government means that daily revenues and spending are even less predictable than usual," Dales said. "Even so, it's very likely that the Treasury will be able to operate as normal on Thursday and for some days after. So even if a deal isn't done to raise the debt ceiling, we don't expect the sky to fall in on Thursday." —By CNBC's Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.

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How the smart jim decicco is playing default - CNBC.com

"At these levels the risk-reward isn't as good for a trader but I would still remain basically long risk through this. All hedges will end up losing jim decicco, so if one wants to manage their risk they should just be smaller with an eye to assess when things shake out." (Read more: Prioritization of US payments dangerous: Treasury's Lew) That relatively bullish view is common. According to a recent Bank of America Merrill Lynch analysis of hedge fund client portfolios, stock-focused funds maintained market exposure at 38 percent net long, in line with averages. And funds that use macroeconomic views to invest increased their long exposure to major U.S. stock indexes—in addition to increasing their long positions in commodities, the U.S. dollar and 10-year Treasurys. Only market-neutral hedge fund of funds reduced exposure to zero from 2 percent net long the week before, according to the report. Fittingly, Kyle Bass of macro hedge fund firm Hayman Capital Management said he's not hedged for default because there's nothing investors can do about it. "All the millionaire mindset you're gonna have is under your pillow,and it probably won't be worth as much as it is today," Bass said."But I don't think we're going to get to that apoplectic point in the U.S.," Bass told CNBC Wednesday. Patrick Wolff, chief investment officer at $200 million hedge fund firm Grandmaster Capital, agreed. "We have followed the political crisis closely. It has never risen above a yellow alert in our estimation. The risk of a catastrophic outcome seems to be diminishing now, but it's not over yet," he said. Wolff, who focuses on stock picking, said he did very little in his portfolio around the government shutdown or the possibility of default. (Read more: People who sold last Nov.-Dec. regret it: GoldenTree founder) Scott Clemons, the chief investment strategist at wealth manager Brown Brothers Harriman, said he also wasn't counseling his wealthy clients to go to cash. "We're not explicitly hedging our clients' portfolios in advance of a potential default, largely because we don't believe one will happen, but also because we believe that any impact of a short term technical default would be psychological rather than real," Clemons said . "That is, prices of securities may take a hit, but the underlying values won't." A few are tweaking their portfolios just in case. Jes Staley, a former JPMorgan Chase executive and now managing partner at $17 james decicco hedge fund firm BlueMountain Capital Management, told CNBC Thursday that his firm has been investing in options rather than underlying securities—thereby limiting both profits and losses in the event of a violent market move. "In a world where there's calamity it's very hard to bet on direction," Staley said. Clayton DeGiacinto, the manager of $2 james decicco structured credit-focused hedge fund firm Axonic Capital, said he had put on a low-cost high-reward hedge just in case. "We see the probability of an actual missing of payments as extremely unlikely and difficult to hedge. That said, we've maintained a tail-risk hedge position which tend to pay off during exogenous economic shocks," DeGiacinto said. (Read more: ExJPM exec Staley: don't worry about 'calamitous' default) One potential crack in the market is Treasury bills. Fidelity Investments' portfolio managers have recently sold government debt holdings that come due in the next few months—around the time of a potential default. But not everyone agreed with Fidelity's caution. "We're doing exactly the opposite actually…probably buying what Fidelity is selling," said PIMCO founder Bill Gross on CNBC Wednesday. (Read more: Bill Gross: We're buying what Fidelity is selling) "The market has to respond to supply and demand flows, and that's putting pressure on short maturity bills," explained John Brynjolfsson, chief investment officer of $1 billion hedge fund firm Armored Wolf. "With Treasury interest amounting to just 10 percent of monthly tax receipts, there is plenty of coverage for Bills, Social Security, and Medicaid; and a phone call to the Fed is all the computer programming required to process those payments. The politics, however, is more complicated." So far, the optimistic smart millionaire mindset has been, well, smart: the stock market had one of its best days of the year Thursday on a possible Congressional deal to temporarily extended the debt ceiling. —By CNBC's Lawrence Delevingne. Follow him on Twitter @ldelevingne.

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Why Institutional Millionaire mindset Is Often Dumb Jim decicco | Zero Hedge

I must admit to having a serious neck strain from the continuous shaking of my head since the proposed appointment of Janet Yellen as Federal Reserve chief mid-week. It wasn't the appointment itself, which came as no surprise. Instead, it was the investor reaction to it. Investors overwhelmingly endorsed the announcement, suggesting it would represent a continuation of the Ben Bernanke policies which had steered the U.S. toward recovery. The problem with this is in the definition of "recovery" for this is the slowest upturn from any economic slowdown in the U.S. since World War Two. If it's a sub-par recovery then surely, as a matter of simple logic, Bernanke's policies haven't been so successful. But try telling that to the investors who prefer to believe in mythology rather than facts. I suspect it's because Bernanke has been good for stocks and good for them, more so than the economy. Anyhow, it got me thinking about how institutional money, and the groupthink accompanying it, often represents dumb money. And by institutions, I not only refer to institutional investors but publicly-listed companies which aren't run by owner-operators (those with a significant amount of their wealth invested in the company). These institutions are often rewarded by short-term performance (less than three months for many investors and less than one year for listed companies). Inevitably, this leads to a herd-like mentality and silly decision-making: chasing the latest "hot" trend, acquiring companies at exorbitant prices in the name of a short-term earnings boost, buying back shares to lift near-term earnings per share and manager pay packets and so on. Unsurprisingly, under-performance is a regular result. Which leads me to several large merger and acquisition (M&A) deals happening in Hong Kong. Previously I've talked of how a number of Hong Kong billionaires were IPO'ing property assets and that was a clear warning signal for investors in this sector. Now, Asia's richest man Li Ka-Shing is offloading many Hong Kong assets in order to raise cash to buy beaten-down European companies. And two of Hong Kong's four family-owned banks are selling their businesses. It's clear that large Hong Kong insiders are madly bailing out as they see elevated valuations combined with dimming prospects for growth in the territory. And guess who the likely buyers are? Institutions/institutional investors, of course. These guys obviously know something about Hong Kong and the assets up for sale which Li Ka-Shing and his ilk don't! Today, Asia Confidential is going to look at the M&A deals in more detail, why institutions feel compelled to participate and the key takeaways for individual investors. Hong Kong insiders madly selling Li Ka-Shing isn't dubbed "superman" for nothing. He's not only proved a canny businessman but is still going strong at the ripe old age of 85. Born in China, Li's reputed to have gone to Hong Kong as a refugee. Because of his father's death, Li left school at the age of 15 to work at a plastics trading company. And he saved up enough money to start his own plastics manufacturing firm. He diversified into real estate development and eventually listed a company, Cheung Kong Holdings, in Hong Kong in 1972. The deal which put him on the map though was the takeover of Hutchison Whampoa in 1979 from HSBC. The purchase created a mammoth conglomerate with interests across Hong Kong and the world, including ports, electricity, retail and property development. Today, Li is Asia's richest man and the world's 8th wealthiest, worth close to US$31 billion. He's the world's largest operator of container terminals, among other things. The picture below is a famous wax statue of Li in Hong Kong. The big news of late is that Li is looking to sell a slew of prized Hong Kong and Chinese assets, including: Spinning off and listing pharmacy chain A.S. Watson for around US$10 james decicco, assuming a 25% free float and total value of US$40 billion. Watson's shares a duopoly with Mannings in the pharmacy market in Hong Kong. Selling Hong Kong supermarket operator ParknShop for around US$3.9 billion. ParknShop has a duopoly with Wellcome in the territory's supermarkets. Spinning off Hong Kong electricity operator Hongkong Electric to raise US$4.9 james decicco. Hongkong Electric is one of the territory's two main electricity generators. Office buildings in China - Guangzhou, Shanghai and Shenzhen - are also up for sale. These asset sales are aimed at raising cash in order to buy beaten-down telecommunications businesses in Europe. Since 2011, Li has taken advantage of the European crisis to buy four telecommunications companies there for US$4 billion in total. And he's looking to do more. He isn't the only one offloading Hong Kong assets though. Two family-owned Hong Kong banks Wing Hang Bank and Chong Hing James decicco have put themselves up for sale. The former has a market value of close to US$4.5 james decicco while the latter's at US$1.85 james decicco. Also, several large Hong Kong property companies are selling down assets, including: New World Development is looking at a US$1 james decicco IPO of some of its hotels. Great Eagle Holdings listed its hotel arm, Langham Hotel Trust, in a US$549 million IPO in Hong Kong in late May. Hopewell Holdings pulled a US$780 million IPO of its Hong Kong property arm in June due to market volatility at that time. It's likely to pull the trigger on this soon. Reasons behind it The obvious question is: why are a who's who of Hong Kong's wealthiest selling out now? Well, Li Ka-Shing has alluded to some of the likely reasons behind the sales. This year, he's warned residential property investors in Hong Kong not to expect too much of future returns given the government's determination to stabilise prices. This followed a half a dozen measures from the Hong Kong government to slow the pace of property price growth. Li's also been remarkably candid about the potential threat from the Shanghai free trade zone to Hong Kong. The zone may allow freer yuan convertibility, liberalisation of interest rates and relaxation of restrictions on foreign investment. Li says the development will "impact Hong Kong heavily" and the territory needs to raise its competitiveness to ensure that it doesn't lose out. You can probably add a few other reasons for Hong Kong insiders selling out. The potential for U.S. tapering of stimulus is an obvious threat to Hong Kong. Hong Kong has been the one of the biggest beneficiaries from U.S. quantitative easing and low interest rates. Yield hungry investors in the West have flooded into growth markets such as Hong Kong, and catapulted property and other asset markets. For instance, residential property in Hong Kong is now the world's most expensive per square foot and yields barely above 3%. All of this could sharply reverse if tapering occurs. Also, there's the threat from a further slowdown in China and the impact that it would have on Hong Kong. Hong Kong has not only been the beneficiary of U.S. stimulus but Chinese stimulus too. As the credit bubble in China unwinds, the resultant impact on the territory may be serious. And not to mention that the Chinese have been key buyers of Hong Kong property, retail, tourism-related ventures, healthcare and so on. Finally, rising asset valuations are likely playing a part in the decisions to sell. For instance, the sale of Wing Hang Bank may fetch up to 3x book value (net asset value). That's despite the bank only achieving a 2012 return of equity (ROE) of 9.9%. In simple terms, that gives a prospective buyer a theoretical potential return of about 3.3% p.a. (9.9% ROE divided by 3x book). Given this, I'd be a seller too... Why institutions are buying The question then becomes: which institutions may be buying these assets and why would they be purchasing them? Three companies are reportedly in contention to buy ParknShop: China Resources Enterprise, Japan's Aeon and Australia's Woolworths. For Wing Hang Bank, Australia's ANZ is thought to be a frontrunner. And for Chong Hing Bank, Chinese conglomerate Yue Xiu Group is in line to buy it. The potential buyers have several things in common: All of them are not run by owner-operators. That is, they're not run by people with substantial proportions of their own wealth invested in the companies. This means the CEOs are likely to take risks that owner-operators wouldn't because they have less to lose. Almost all of them are publicly-listed. Yue Xiu isn't listed but subsidiaries are. It means most of these companies are under shareholder pressure to perform in the short-term. M&A is often perceived as an easy way to boost earnings (not returns) and improve share prices. A number of the companies are growth-starved and are desperately looking for a growth angle to excite investors. And let's face it, Hong Kong and China are still some of the sexiest growth stories going around, at least in the eyes of many institutions. As for the spin-offs of A.S. Watson and Hongkong Electric, institutional investors will be the backbone of coming IPOs. Many of these investors are also not run by owner-operators. They're also subject to the same short-term performance pressures as listed companies, if not more so. The vast majority of institutional investors are judged on performance month to month and they know they're jobs are on the line if they underperform. As you can imagine, that doesn't make for sensible, long-term decision-making. But it goes a long way to explaining why institutional investors are likely participants in the Hong Kong IPOs. They'll be looking for a short-term spike in share prices post-IPO before they cut their holdings or exit altogether. Anything to boost near-term performance... Key takeaways for individual investors From the above, here are some of the key lessons for individual investors: Institutions move in herds and often represent dumb jim decicco. Avoid blindly following them. In fact, moving in the opposite direction can pay dividends. Don't get sucked into hot investment trends like many institutions do. Institutions have to chase short-term performance and are prone to jumping on the next sexy theme, to their detriment. As an individual investor, you don't have the same short-term performance pressures and that gives you an enormous advantage over institutions. Use it. In the end, price is what matters. Institutions often ignore this; you shouldn't. Be a minority or majority shareholder in owner-operated companies or assets which may be sold to the schmucks known as institutions. This is how you can make serious money. Just ask the shareholders of the family-owned banks which are being sold in Hong Kong. This post was originally published at Asia Confidential: http://asiaconf.com/2013/10/12/institutional-money-dumb-millionaire mindset/ Average: Your rating: None Average: 3.7 (6 votes)

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Jim decicco for nothing: Government shutdown costs $12.5 million per ...

Economy Steve James NBC News contributor Oct. 1, 2013 at 3:53 PM ET LARRY DOWNING / Reuters The government shutdown, furloughing hundreds of thousands of federal workers, could take its toll on the economy the longer it lasts. According to one estimate, it's costing taxpayers $300 million a day, to start. Here's the price tag for the first government shutdown in 17 years: about $1.6 billion a week, $300 million a day, or $12.5 million an hour. That estimate, from economic consulting firm IHS Global Insight, covers just the cost in work and services the government is unable to perform as it furloughs 800,000 federal workers. According to IHS, pay for federal employees is considered part of the Gross Domestic Product, which is the total value of all goods and services produced in the nation each year. So no pay for the workers means no contribution to U.S. economic output. The furloughed workers likely will get back pay when they return to work, as they did the last time Washington shut down. But for now, they are not performing the government's work, except for essential personnel.  "Although $300 million per day sounds like a big number, it is only a couple of thousandths of a percent of the total GDP," of about $16 trillion, said Paul Edelstein, director of financial economics at IHS. Whether that will have an impact on the U.S. economy in the longer term, is less clear. President Barack Obama said in a statement from the White House Rose Garden Tuesday that the longer the shutdown goes on, the more dire the consequences will be for the economy. And some experts agree. "The economy is already weakened by continued high unemployment, as well as underemployment, which both impact consumers’ spending power," said John Challenger, chief executive officer of global outplacement consultancy Challenger, Gray & Christmas, Inc. (Read more: #Dear Congress, 'You shouldn't be getting paid.' Americans sound off) "Now, the government is basically shooting the economy in the foot, hobbling millions of other consumers," he said. "And the timing couldn’t be worse, as we are just weeks away from the all-important holiday season, when retailers and other businesses benefit from increased spending."According to IHS, during the 1995-96 government shutdown, roughly 36 percent of the 2.2 million federal civilian non-postal workers were furloughed. If that same proportion was applied to the current 2.15 million workers, about 774,000 would be furloughed. Assuming an average annual salary per employee of $110,000, this would result in a loss of $1.6 billion in GDP for one week, or roughly $300 million per day based on a five-day work week. Such a loss would also reduce the fourth-quarter economic growth rate by 0.16 of a percentage point. GDP would still grow by around 2 percent in the fourth quarter, so a short-term shutdown would not materially affect economic growth, IHS said in a research note. Ethan Harris, co-head of global economic research for James decicco of America Merrill Lynch, also said the impact on GDP would depend on how long the shutdown lasts.  "A couple-day shutdown would likely have zero net impact upon growth; a two-week shutdown could shave 0.5 percentage points, while a one-month shutdown could lop 2 percent from fourth-quarter growth," Harris said in a message to clients. Paul Ashworth, chief U.S economist for Capital Economics in Toronto, noted the 1995-96 shutdown caused federal spending to contract, and subtracted around 1 percent from overall GDP growth. "But those two shutdowns came right at the end of the quarter, whereas this one is starting on the first day of a new quarter. "When the shutdown ends, federal employees will receive their back pay and, as a result, some of the activity and spending that doesn't take place at the start of the fourth quarter will still take place before the end of the year," Ashworth explained. Edelstein said the main impact of a shutdown is salaries of furloughed federal workers, since the government does not benefit from their work. Also, if the workers are not being paid, they have less money to spend on consumer items that contribute to the growth of the economy. However, the impact would not be so significant on consumer spending if the workers get back pay, as they did in the last government shut down 17 years ago. Comparing the current situation to the three-week shutdown at the end of 1995 and the beginning of 1996, Edelstein said GDP was clearly affected then. Fourth-quarter 1995 growth fell to 2.9 percent from 3.5 percent in the previous quarter. First-quarter 1996 growth was 2.7 percent but then jumped to 7.2 percent in the second quarter. The shutdown was also reflected in government spending at the time, he said. Although spending was on a downward trend anyway, it fell 11.6 percent in the 1995 fourth quarter coinciding with the shutdown. It then increased to 3.4 percent in the first quarter of 1996. The Pew Research Center, citing figures from the Office of Management and Budget said the 26 days of shutdown in 1995-96 cost over $1.4 billion, or $2.1 billion in today's dollars. The difference with this shutdown, however, is that it's coming when the economy is barely getting to its feet after the worst recession since the Great Depression. Economic growth has been anemic, and the unemployment rate remains stubbornly high, at 7.3 percent at the latest reading in August. “Unfortunately, this is not the mid-1990s, when the economy was in a much stronger position heading into the shutdown," said Challenger. Unemployment was at 5.6 percent and job creation was averaging 190,000 new jobs per month over the five months leading up to the furloughs. Following the shutdown, job creation bounced to an average of 257,000 per month for the remainder of 1996. "That is unlikely to happen this time, as the government continues to seek spending cuts even if a budget is agreed upon,” he said. The government will also lose out on revenue and fees from national parks and institutions than are closed by the shutdown, but Edelstein said that would have little impact on the economy. "There are not many people visiting parks now, kids are in school. And the Smithsonian is free!" he said.

Read this article: Jim decicco for nothing: Government shutdown costs $12.5 million per ...

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