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Video: The 3 best finance movies ever made
Lifestyle, 4:01
<p>With the “Wizard of Lies” and “The Big Short” set to hit the screens next year, I thought it was best to revisit some finance movies we’ve loved over the decades and see which ones still pack a punch.</p> <p>Here’s my top three:</p> <p>Margin Call, 2011</p> <p>Arguably the best – and most realistic – finance movie of the 21st century so far, Margin Call chronicles 24 tense hours inside an unnamed investment bank (rumored to be Goldman) that has just discovered its MBS holdings are about to go horrifyingly toxic. Its stars Jeremy Irons as the creatively-named bank CEO, John Tuld, Kevin Spacey as the firm’s S&amp;T chief, Sam Rogers, and a whole host of A-listers which includes Demi Moore in a very Erin Callan-esque role.</p> <p>American Psycho, 2000</p> <p>Okay, so this isn’t exactly a finance movie, but you’d be hard-pressed to find anything as cult-followed as this – save for my #1 – within the community. American Psycho follows Patrick Bateman (Christian Bale), a Vice President at Pierce &amp; Pierce’s M&amp;A department who has unhealthy desire for all material things as well as a penchant for a bit of rape and serial killing. Interestingly, Bale used Tom Cruise as an inspiration for the role, noting his “very intense friendliness with nothing behind the eyes.” Check it out, it’s bone.</p> <p>Wall Street, 1987</p> <p>The gold standard. Hilariously, Oliver Stone set out to create Gordon Gekko as the absolute impersonation of greed, only to have Michael Douglas play the part a little bit too well. Aside from winning an Oscar for his role, Douglas inspired thousands to land a career on Wall Street – and has been routinely stopped on the streets because of it. Hell, there's even a lizard named after Gordon, Cnemaspis gordongekkoi.</p> <p>Honorable mentions:</p> <p> Trader, 1987<br /> Trading Places, 1983<br /> Rogue Trader, 1999</p> <p>Anything else I missed?<br /> Photo: R. Measel Photography</p>
Japan then and now
Capital Markets
<p>September 2015</p> <p>Late in 2006, Matthews Asia was wrapping up a special report titled “Japan Reawakens.” The timing of that AsiaNow publication, just ahead of the Global Financial Crisis, was unfortunate to say the least. With the ensuing economic turmoil, Japan fell asleep again, sliding off the radar screens of many investors. But as interest in Japan has more recently re-emerged, I thought it would be important for us to take a look back and consider what we previously published. Has Japan evolved the way we had envisioned? What’s changed and what hasn’t? And most importantly, where do we go from here?</p> <p>Governance at Japan Inc.</p> <p>A major theme in that issue of AsiaNow was “Restructuring of Japan Inc.” We discussed topics such as shareholder-friendly governance, the shakeup of cross shareholdings, using catchy phrases like “this is not your father’s Japan” and “from stakeholders to shareholders.” We spoke too soon. Japan’s corporate governance made little improvement in the years that followed. The Global Financial Crisis ushered many companies back into their cocoons, where they found comfort in cash-hoarding practices that shielded them during tough times. I recall a steel company executive telling me, “We survived because we had this cash, why should we pay it out?” Only recently, have the tides begun to shift again.</p> <p>Japan’s Stewardship Code of 2014 and its Corporate Governance Code in 2015 are measures that reflect the strong determination of Prime Minister Shinzo Abe’s administration to bring Japan’s corporate governance practices further in line with global practices. In reality, the code itself still falls short of global best practices, and needs continued improvements. For instance, it does not mandate a majority independent board, there are few repercussions for non-compliance and it lacks a regular monitor-and-review process.</p> <p>Still, we’ve observed a noticeable change in how corporate managers interact with investors and the market in general—some more than others. That changing mindset is evidenced by the increase in shareholder returns in the form of both dividends and share buybacks. On the back of strong earnings, dividend payouts for firms on the Tokyo Stock Exchange’s 1st section have reached a historical high. Note that the figures in the chart below reflect only dividends and buybacks that have already been executed. There are even more buybacks announced but yet to be executed.</p> <p>However, improving corporate governance isn’t simply about paying out excess cash. Ultimately, Japanese corporate managers need to become better stewards of capital. That means improving capital returns by unwinding unproductive cross shareholdings and investing for growth. Already, several major financial institutions have announced plans to comprehensively review their cross shareholdings. Japanese firms have also been active in cross border acquisitions with more than US$50 billion spent year-to-date as they invest for growth.</p> <p>These developments give me some hope that progress will be made over the next several years. Remember, change in Japan rarely happens quickly. There may even be times when it looks like it’s taking a step back. Hence, it’s important for investors to temper expectations, have some patience and let the evolution play out.</p> <p>The Evolving Relationship with Asia</p> <p>Another major theme from the AsiaNow newsletter, published in 2007, was Japan’s integration with Asia. Back then, the relationship was mo</p>
NexAsia Week Ahead: Greek elections; US GDP coming up
Capital Markets
<p>Good morning everyone. With the Fed decision over and done with, attention is set to shift to global politics this week as Greece hits the polls and Shinzo Abe outlines his plans. The Bank of Japan is scheduled to reveal its monetary policy decision though, and the U.S. is about to unveil its final Q2 GDP growth rate as well, so we still have a lot of biggies from the economic data front coming.</p> <p>Here’s what you should look out for:</p> <p>Sunday:</p> <p>7:00 am – Greek parliamentary elections</p> <p>Monday:</p> <p>2:00 pm – Germany August MoM PPI – Forecast: -0.4% from 0%</p> <p>3:00 pm – Switzerland Q2 current account</p> <p>4:30 pm – Hong Kong Q2 current account</p> <p>4:30 pm – Hong Kong August YoY inflation rate – Forecast: 2.24% from 2.5%</p> <p>6:00 pm – Bundesbank month report</p> <p>10:00 pm – U.S. August existing home sales – Forecast: 5.4 million from 5.59 million</p> <p>Tuesday:</p> <p> 9:30 am – Australia Q2 QoQ house price index – Forecast: 2% from 1.6%</p> <p>10:00 am – China August CB leading economic index</p> <p>2:00 pm – Switzerland August balance of trade</p> <p>10:00 pm – Eurozone September flash consumer confidence – Forecast: -7.26 from -6.9</p> <p>10:00 pm – Richmond Fed September manufacturing index – Forecast: -2 from 0</p> <p>Wednesday:</p> <p>9:45 am – China September flash Caixin manufacturing PMI – Forecast: 47 from 47.3</p> <p>12:00 pm – Malaysia August YoY inflation rate – Forecast: 3.47% from 3.3%</p> <p>1:00 pm – Singapore August YoY inflation rate – Forecast: -0.3% from -0.4%</p> <p>3:00 pm – France September flash Markit services PMI – Forecast: 51.3 from 50.6</p> <p>3:00 pm – France September flash Markit manufacturing PMI – Forecast: 48.9 from 48.3</p> <p>3:30 pm – Germany September flash Markit services PMI – Forecast: 54.7 from 54.9</p> <p>3:30 pm – Germany September flash Markit manufacturing PMI – Forecast: 52.8 from 53.3</p> <p>4:00 pm – Eurozone September flash Markit services PMI – Forecast: 53.9 from 54.4</p> <p>4:00 pm – Eurozone September flash Markit manufacturing PMI – Forecast: 52 from 52.3</p> <p>8:30 pm – Canada July MoM  retail sales – Forecast: 0.25% from 0.6%</p> <p>9:00 pm – ECB President Mario Draghi speech</p> <p>9:45 pm – U.S. September flash Markit manufacturing PMI – Forecast: 52 from 53</p> <p>Thursday:</p> <p>6:45 am – New Zealand August balance of trade</p> <p>9:35 am – Japan September flash Nikkei manufacturing PMI – Forecast: 51.65 from 51.7</p> <p>4:00 pm – Germany September IFO business climate – Forecast: 107.8 from 108.3</p> <p>4:00 pm – Bangko Sentral ng Pilipinas interest rate decision – Forecast: unchanged at 4%</p> <p>4:00 pm – Taiwan August YoY industrial production – Forecast: -1.46% from -2.99%</p> <p>4:30 pm – Hong Kong August YoY imports</p> <p>4:30 pm – Hong Kong August YoY exports</p> <p>4:30 pm – Hong Kong August balance of trade</p> <p>5:00 pm – Italy July MoM retail sales – Forecast: 0.2% from -0.3%</p> <p>8:00 pm – Brazil August unemployment rate – Forecast: 7.6% from 7.5%</p> <p>8:30 pm – U.S. August MoM durable goods orders – Forecast: -2.4% from 2.2% (revised from 2%)</p> <p>8:30 pm – U.S. August MoM durable goods orders ex-transport – Forecast: 0.15% from 0.6%</p> <p>8:30 pm – U.S. Sept 19 initial jobless claims – Forecast: 269,000 from 267,000</p> <p>10:00 pm – U.S. August new home sales – Forecast: 510,000 from 507,000</p> <p>Friday:</p> <p>5:00 am – Fed chair Janet Yellen speech</p> <p>7:30 am – Japan August YoY core inflation rate – Forecast: -0.1% from 0%</p> <p>7:30 am – Japan August YoY inflation rate – Forecast: unchanged at 0.2%</p> <p>12:00 pm – Malaysia July unemployment rate – Forecast: unchanged at 3.1%</p> <p>1:00 pm – Singapore August YoY industrial production – Forecast: -5.33% from -6.1%</p> <p>8:30 pm – U.S. Q2 final QoQ corporate profits – Forecast: 1.3% from -8.8%</p> <p>8:30 pm – U.S. Q2 final QoQ GDP growth rate – Forecast: 3.7% from 0.6%</p>
Mr. Tepper builds his dream house
Lifestyle, 4:01
<p>A lot of great things have been done out of love, but few are as awesome as those done out of spite.</p> <p>Jon Corzine, the bearded former CEO of the ill-fated MF Global, reportedly passed over David Tepper for a partnership at Goldman Sachs – twice – while he was ran the firm back in the early 90’s. Well, the future multi-billionaire did not take kindly to that.</p> <p>Fast forward to 2010, Tepper bought Corzine’s former beachfront mansion from the man’s ex-wife, and promptly razed the 6,165 square foot pad to build his own mini fiefdom on the 6.5 acre oceanfront plot instead.</p> <p>Further sticking it to Corzine, Tepper told the New York Mag “you could say there was a little justice in the world” when he bought and leveled the place.</p> <p>And it’s finally finished! The 15,000 square foot mansion now boasts a T-shaped pool, an elegant-looking motor court, a tennis court with an ocean view, and various other amenities fit for a man who bagged $4 billion in 2009 alone.</p> <p>Curbed Hamptons has some pretty cool aerial photos of the place here. Check it out.</p> <p>Photo: Wiki</p>
Barron's Weekend Roundup: Financial advisors offer insight; Alibaba fights back
Capital Markets
<p>In this week's cover story, Barron's asks four financial advisors for insight to retirement planning. For starters, try communicating clearly- with family and advisors. Market volatility may seem scary, but many times investors need to hold on and think long term while talking out their concerns with their advisor.</p> <p>China fears have been hurting Wynn Resorts, but now the company's stock is set to more than double, argues Barron's. Gambling in Macau has been steadily declining, hurting the hotels and resorts in the area. But Wynn is still betting on Macau, opening a new property there early next year. When Macau stabilizes, Wynn is ready to take advantage.</p> <p>Last week's cover story slaughtered Alibaba, predicting the stock will tank 50%. Barron's stands by its story, but this week it's printed a letter from Alibaba fighting the accusations.  Jim Wilkinson, head of international corporate affair at Alibaba, writes that the Barron's story included factual inaccuracies and doesn't fully understand Alibaba's business plan.<br /> Photo: Dan Farber </p>
Yellen flinches
Asset Management
<p>It is long past time for the Federal Reserve to start raising short-term rates. The unemployment rate is already very close to the Fed’s (new, lower) long-term projection of 4.9% and set to fall further in the next year, even if the Fed had already started lifting rates. Nominal GDP growth – real GDP growth plus inflation – is up at a 4.1% annual rate in the past two years, slightly exceeding the Fed’s long-run projection of 4% growth.<br /> Regardless, the Fed left short-term rates unchanged at today’s meeting and issued, on net, a more dovish statement than after the last meeting in July. Although the Fed acknowledged better business investment, it also provided three reasons for keeping rates unchanged, including (1) lower market-based measures of inflation, (2) global economic developments (which means China-related issues) and (3) financial developments (the recent correction in equity prices).<br /> We don’t think any of these factors warranted a longer wait for rate hikes. There’s always going to be some excuse to postpone rate hikes. The longer the Fed waits the more likely it is that the US economy eventually requires the kind of aggressive rate hikes that can cause a future recession. Raising rates by 25 basis points today wasn’t going to stop anyone from fracking a well or inventing a new App.<br /> In addition to the dovish statement, the Fed slightly marked down its estimates for the long-run average unemployment rate as well as inflation for the next few years. Both of these changes give the Fed more room to temporarily justify keeping rates unchanged.<br /> Consistent with the changes in the economic outlook, the median forecast from the Fed’s key decision-makers is that the Fed will only raise rates by 25 basis points this year, versus a prior median forecast of 50 basis points. In addition, the median estimate of the long run average federal funds rate fell to 3.5% from a prior estimate of 3.75%.</p> <p>The one bright spot in today’s statement was that Richmond Fed Bank President Jeffrey Lacker dissented. He would have raised rates by 25 basis points today.<br /> So where does that leave the likely course of monetary policy over the next several months? We believe a rate hike by the end of this year is still likely, but not a slam dunk. The next Fed meeting is in late October. But we see third quarter real GDP growth coming in at about a 2% annual rate. And it’s hard to see a Fed so skittish that it didn’t raise rates today willing to raise rates in that environment. Instead, December is more likely than October. By that time we should have some indications that real GDP is accelerating in the fourth quarter. However, we also can’t completely dismiss the possibility of the Fed waiting until 2016.<br /> The smartest investors know that the starting time for rate hikes is much less important than how high rates will ultimately go. In that sense, today’s news was a sideshow and we expect more aggressive rate hikes in 2016 than the Fed and markets now anticipate.<br /> This information contains forward-looking statements about various economic trends and strategies. You are cautioned that such forward-looking statements are subject to significant business, economic and competitive uncertainties and actual results could be materially different. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time and are the opinion of the individual strategist. Data comes from the following sources: Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, the Federal Reserve Board, and Haver Analytics. Data is taken from sources generally believed to be reliable but n</p>
Hedgie gives NYC teachers a pay boost
Lifestyle, 4:01
<p>Reward good teachers instead of punishing the bad, says Jim Simons, founder of hedge fund Renaissance Technologies.</p> <p>Simons' philanthropic organization, Math for America, gives high performing teachers a bonus, reports Business Insider. The 20-year-old group awards 800 math and science teachers in New York City public schools $15,000 a year. U.S. teachers are paid about $56,383 annually on average, lower than other developed countries, and about 1.3% lower than 13 years ago.</p> <p>"Beating up the bad teachers" does nothing but hurt the education community, says Simons in a recent TED talk interview. Rewarding the good teachers is a better approach, he says. "There's a great morale among them. They're staying in the field. Next year, it'll be 1,000 and that'll be 10 percent of the math and science teachers in New York [City] public schools," says Simons. </p> <p>&nbsp;<br /> Photo: collectmoments<br /> &nbsp;</p>
VC exit activity remains strong despite rising valuations
Venture Capital
<p>U.S. VC exit activity has slowed this year. 2014 exits harkened back to the dot-com days, though last year’s total was partially skewed by the massive $22 billion sale of WhatsApp. Absent that deal, 2014 was still a post-2000 record by both count and value, so a slowdown isn’t surprising. What has changed over the past five years is the sheer number of exits happening, topping out at 986 last year. Through 1H, 2015 totals aren’t too far behind at 427, and capital exited levels should compare favorably to prior years, as well.</p> <p>IPO activity, on the other hand, is well off last year’s pace. 121 VC-backed companies went public in 2014 versus only 42 companies through June of this year. Market volatility will likely dictate IPO activity through the rest of the year, though the number of still-private unicorns hints at stronger IPO numbers—at some point. Until then, acquisitions remain the exit of choice for VC, with another 385 sales finalized in 1H totaling $23 billion in value. M&amp;A made up 90% and 85% of VC exit counts and value, respectively, through the first half.</p> <p>Large exits ($500M+) accounted for the lion’s share (58%) of total capital exited in 1H, down slightly from 63% in 2014. Most years going back to 2006 saw $500M+ exits account for 40% or less of total exit value, and sometimes as little as 21% (in 2009).</p> <p>This article is an excerpt originally posted on ValueWalk. </p> <p>&nbsp;</p>
Jim Chanos reading list
Hedge Funds
<p>Jim Chanos started Kynikos Associates in 1985 and the group has since become the world's largest exclusive short-selling investment firm. As of mid 2015, The hedge fund manages approximately $6 billion in assets.</p> <p>Throughout his investment career, Chanos has identified and sold short the shares of numerous well-known<br /> corporate financial disasters; among them Baldwin-United, Commodore International, Coleco, Integrated Resources, Boston Chicken, Sunbeam, Conseco and Tyco International. His celebrated short-sale of Enron shares was dubbed by Barron's as "the market call of the decade, if not the past fifty years."</p> <p>Chanos’ most famous short landed Chanos on the cover of Barron’s in 2002 as “The Guy Who Called Enron.” But the list of his targets stretches from Michael Milken’s junk bond empire through the real estate boom of the late 1980s, the telecom bubble of the late 1990s, Dennis Kozlowski’s Tyco and Bernie Ebbers’s WorldCom at the turn of the century, subprime mortgage lenders and home builders in 2007, and most recently China.</p> <p>For more on Jim Chanos, head over to ValueWalk’s Jim Chanos Resource Page, where you can find a detailed rundown of his background, bio and investment philosophy.<br /> Jim Chanos: Recommended books<br /> The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals<br /> Frank Paternoy. The story of a 20th century Swedish businessman named Ivar Kreugar, who convinced everyone that he's a tycoon in the match business. Really, he just borrowed money in the U.S. and loaned it out in Europe in exchange for match companies.</p> <p>Bernard Baruch: The Adventures of a Wall Street Legend<br /> James Grant. This biography of Bernard Baruch considered to be renowned as the definitive story about the notorious financial wizard and presidential advisor.</p> <p>Waterloo: The History of Four Days, Three Armies, and Three Battles</p>
What we’re reading: Stanley Druckenmiller, China’s currency reserves, and Lucille Bluth
Capital Markets
<p>From Mark Dow’s thoughts on the Fed rate decision to a speech from the former right hand of Soros, here are some are some great reads for you this weekend:</p> <p>Stanley Druckenmiller at the Lost Tree Club. Stanley Druckenmiller’s the man, and here’s an older speech from him detailing his early years, his mistakes, his triumphs, and his thoughts on ZIRP circa January 2015. Sam Reeves’ epic burning of Bill Gross in the intro alone is well worth your time. Check it out. Cove Street Capital (pdf)</p> <p>The Fed, international weakness, and the impotence of monetary policy. Here’s a short, sweet, and excellent take on Federal Reserve Chair Janet Yellen’s recent presser. Will ZIRP remain this year or will the Fed take a leap of faith? It’s hard to tell, that’s for sure. Behavioral Macro</p> <p>Is China running out of reserves and does it matter? With Beijing defending the yuan with the fury of a thousand Vikings, everyone seems to have an eye on the nation's currency reserves, questioning what its erosion could mean for the country. Here’s an interesting take on it. PIIE</p> <p>This is nuts, when’s the crash? FT Alphaville had this intriguing piece on VC’s, Unicorns, and the “sharing economy,” littered with graphs on how awesome the whole thing really is. Or not. FT Alphaville</p> <p>Who said it: Donald Trump or Lucille Bluth? With Trumpalooza raging on, BuzzFeed decided to play around with the Donald’s gaffes and compare them with those of that delightful juggernaut of political incorrectness – Lucille Bluth. BuzzFeed<br /> Photo: Marketa</p>