Emerging market bonds take on safe haven status

By Hibah Yousuf 

NEW YORK (CNNMoney) -- As they cope with the market's twists and turns, investors are finding comfort in a new kind of security blanket: emerging market bonds.

Typically, investors shun these riskier investments during times of uncertainty in favor of "safer" assets like gold and U.S. Treasuries. But that has started to change.

During the weeks of heightened market volatility in early August, bonds issued in local currencies of emerging markets were the only "risky" asset class to attract investors, according to data from EPFR Global and the Royal Bank of Scotland.

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Sweet or Salty, PepsiCo Tastes Success

By ANDREW BARY
Wall Street is giving PepsiCo little credit these days for its dominant position in snack food and its strength in beverages. Shares of the packaged-foods and soda giant are languishing at a discount to other big consumer stocks amid investor concerns over disappointing 2011 profit guidance. The Street also is worried about management's continued commitment to Pepsi's sugary and salty product portfolio as the company develops and emphasizes healthier foods.
PepsiCo shares (ticker: PEP), at around 65, are down 1.4% in the past 12 months, compared with a gain of 18% for archrival Coca-Cola (KO). Pepsi trades for 14.5 times projected 2011 profit of $4.46 a share, and 13 times estimated 2012 earnings of $4.87 a share. Its price/earnings ratio is sharply lower than that of Coke, at 17 times 2011 estimates, and below the P/Es of food companies such as H.J. Heinz (HNZ), Kraft Foods (KFT) and General Mills (GIS).
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Warren Buffett Explains Why Fear Overshadows Greed

By: Alex Crippen - CNBC

It's a good time to remember one of Warren Buffett's classic rules:  "Be fearful when others are greedy, and be greedy when others are fearful."

With so much fear in the financial markets right now, it's not a surprise that Buffett is being greedy.

He reminds Fortune's Andy Serwer that "the lower things go, the more I buy.  We are in the business of buying."  (He, of course, won't say exactly what he's buying.)

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Wall Street Warns Tim Geithner That The Dollar Is Starting To Lose Its Reserve Status

Submitted by Tyler Durden
The Treasury's Borrowing Advisory Committee, chaired by such luminaries as JPMorgan and Goldman Sachs, which according to some (and by some we mean anyone who cares about such things) is the brains behind the decision-making process of US debt issuance has released its quarterly minutes, in which it has issued one of the most stark warnings about the fate of the US Dollar to date. While it is now a daily occurrence for China and Russia to bash the dollar, for the most part still powerless to provide an alternative (but rapidly gaining), the same warning coming from Jamie and Lloyd has to be taken far, far more seriously. Which is precisely what happened today. As Bloomberg reports, "The Treasury Borrowing Advisory Committee... said the outperformance of haven currencies and those from emerging nations has aided in the debasement of the dollar’s reserve status, according to comments included in discussion charts presented ahead of the quarterly refunding. The Treasury published the documents today. “The idea of a reserve currency is that it is built on strength, not typically that it is ‘best among poor choices’,” page 35 of the presentation made by one committee member said. “The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate.”"
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Investment recommendations (Update1) - Long: C, GM, THQI, JPM, GG ; Short: P, RENN

Lessons From The Brain-Damaged Investor

By JANE SPENCER | Staff Reporter of THE WALL STREET JOURNAL

People with certain kinds of brain damage may make better investment decisions. That is the conclusion of a new study offering some compelling evidence that mixing emotion with investing can lead to bad outcomes.

By linking brain science to investment behavior, researchers concluded that people with an impaired ability to experience emotions could actually make better financial decisions than other people under certain circumstances. The research is part of a fast-growing interdisciplinary field called "neuroeconomics" that explores the role biology plays in economic decision making, by combining insights from cognitive neuroscience, psychology and economics. The study was published last month in the journal Psychological Science, and was conducted by a team of researchers from Carnegie Mellon University, the Stanford Graduate School of Business and the University of Iowa.

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LinkedIn's Competition Is Growing

NEW YORK (Trefis ) -- LinkedIn(LNKD) has seen rapid growth in its monthly unique visitors, from 4.5 million in 2007 to around 50.5 million in 2010. We expect growth to continue, although at a slower pace, due to the larger base effect. New features like LinkedIn Today, LinkedIn Swarm and LinkedIn Skill have beefed up the number of visitors to LinkedIn.

However, competition from other online recruitment services and social media platforms is always increasing.

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US debt: How did superpower reach brink of default?

WASHINGTON: How did the United States, the world's richest nation and sole superpower, come to the brink of a catastrophic default on its debt that could send shockwaves through the fragile world economy? 
Dire economic downturns -- including the worst since the Great Depression of the 1930s -- giant tax cuts, costly wars in Iraq and Afghanistan, and a pricey new health program for the elderly all helped sour Washington's fiscal picture. 
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Google+ Pulls In 20 Million in 3 Weeks

By AMIR EFRATI - WSJ

When Google Inc. launched its Google+ social-networking site three weeks ago, executives

handed out sailor hats to the hundreds of employees working on the project, symbolizing their

year-long journey to that point.

So far, the sailing has been mostly smooth. On Wednesday, Web-traffic watcher comScore Inc.

estimated Google+ has had 20 million unique visitors since its launch, including five million

visitors from the U.S. A Google spokeswoman declined comment.

Read more: http://online.wsj.com/article/SB10001424053111904233404576460394032418286.html#ixzz1Ss53DjY9

Apple likely to replace Exxon Mobil as world's most valuable company

SAN FRANCISCO: Based on Apple's growth trajectory, and a number of catalysts in the pipeline -- from a possible new iPhone this fall to expansions in China -- investors and analysts say Apple could unseat Exxon in the next six months, or latest by the middle of next year. 

The market value of the top U.S. technology company was only $52 billion short of Exxon's $410 billion on Wednesday, even though the largest of the oil majors rakes in more than four times Apple's annual revenue.
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To Monetize Social Media, Humanize It

HBR Blog Network

by Amy Jo Martin

Hi, I'm Amy. A quick introduction is in order here because, while you don't know me, you may know my work. I've spent the past three years building an online brand you may know called Shaquille O'Neal. It's been an amazing voyage navigating the uncharted waters of social media with this Columbus-like pioneer of the medium. Through many experiments with @SHAQ, @DoubleTree by Hilton and@TheRock among others, I've created some best practices, and I've identified some worst practices. I've built my owntwitter presence and started a company, Digital Royalty, which assists brands of all types in increasing their influence using social channels.

I'm here to share all of this with you in a series of posts that will focus mostly on what I deal with everyday, which is the tension that persists between serious social media advocates like myself and the CEOs and boardrooms that I work with. At the highest levels of companies, a remarkably naïve cynicism about social media remains. Put it this way: If I gained a follower every time a CEO rolled his eyes at me when I said "Twitter," I'd be Lady Gaga (11.2 million followers).

The executives' skepticism seems to be rooted in the remarkably persistent idea that social media somehow is not worth their time, a fad, or not for serious business. I'm here to argue that their position is not only foolish, but also irresponsible.

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Goldman says recession risk rising

By Colin Barr July 18, 2011

A recession is "clearly a possibility," the bank that until recently was America's biggest booster said in cutting its economic growth forecasts yet again.

Goldman Sachs, which just seven months ago was the loudest voice for a stronger than expected U.S. recovery, now expects U.S. output to creep ahead at a snaillike 1.5% clip in the second quarter and a less than vigorous 2% in the third.

Friday's call stands as quite a comedown for economist Jan Hatzius, who in May forecast a 2% expansion in the second quarter and a 3.25% gain in the third quarter – numbers that themselves represented a retreat from the firm's bullish start-of-the-year forecast.

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Android Could Be A Billion-Dollar Business, For Microsoft

posted by TREFIS TEAM
Android is the leading smartphone platform in the world with over 500,000 device activations every day. It is one of Google’s most successful businesses helping Google capture mobile search market share and revenues that will top $1.3 billion in 2012. Microsoft owns several patents relating to Android technology and so Android’s success is quickly becoming a boon for Microsoft, which has established licensing agreements with several Android manufacturers to settle patent infringement claims. After landing several key licensing agreements and with a big Samsung agreement reportedly in the works, Android is well on its way to becoming one of Microsoft’s fastest growing money makers.
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The Problem with Groupon's Business Model - Rita McGrath - Harvard Business Review

The Problem with Groupon's Business Model - Rita McGrath - Harvard Business Review

Groupon is poised for its debut as a public company. One of the fastest growing of the recent hatch of Internet darlings, the deal-a-day company was worth $5.3 billion to Google just a few short months ago, in November of 2010. Somewhat astonishingly, Google's offer was spurned and the company set its sights on going public. The smart money went along, with Groupon valued at $15-20 billion, according to some observers anticipating rich pickings in the IPO-to-come.

How Banks Plan To Compete With Groupon

Jul. 11 2011 - 12:00 pm
Credit card companies are sitting on a wealth of information about their clients — they have a running record of everything they buy. Due to strict rules entitling consumers to financial privacy, though, banks are limited in the secondary use of that data. However, they’ve happened upon a rather ingenious way to work around that restriction.
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US trade deficit tops $50bn on rising oil prices

AFP

3:44PM BST 12 Jul 2011

The trade gap expanded to a seasonally adjusted $50.2bn from a downwardly revised $43.6bn in April, according to figures released by the Commerce Department.

Most analysts had expected the gap to increase only marginally in May, to around $44bn, after the April deficit shrank to the lowest level of the year, reflecting the impact on US supply chains of Japan's earthquake and tsunami disaster.

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Facebook vs Google tech wars: Isn't this also a Microsoft vs Apple thing?

Kamya Jaiswal, ET Bureau Jul 10, 2011, 11.51am IST
When 750 million people across the world are allowed to make free video calls, it is "something awesome". Especially because these 750 million want to talk to each other — they are friends on Facebook. But when you compare it with a service that allows 10 simultaneous video calls for free, Facebook's big bang seems a desperate catch-up. What makes the blow worse is that they are playing catch-up with a service launched just three weeks ago – Google +.
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Groupon, Living Social and the Wait to Get Paid

• Joshua M Brown
 
• July 10th, 2011

• News broke at the end of this week that social offers site Living Social was signing with Deutsche, Bank of America and JPMorgan to underwrite an initial public offering.  This follows Groupon's filing which included a risk disclosure section that read like late-career Edgar Allen Poe.
  While there is no question that these deals will be red hot, at least initially, there is a huge gap in understanding how these companies differ from each other.  The differences are important, they will ultimately determine valuation and market share.
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Oil sands in Canada eyed by U.S., China

Rob Gillies, Associated Press

Sunday, July 10, 2011

Calgary, Alberta -- In the northern reaches of Alberta lies a vast reserve of oil that the United States views as a pillar of its future energy needs.
China, with a growing appetite for oil that may one day surpass that of the United States, is ready to spend the dollars for a big piece of it. The oil sands of this Canadian province are so plentiful that they will be able to serve both of the world's largest economies as production expands in the coming years. But that will mean building at least two pipelines, one south to the Texas Gulf Coast and another west toward the Pacific, and that in turn means fresh environmental battles on top of those already raging over the costly and energy-intensive method of extracting oil from sand.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/09/BUUV1K1BAU.DTL#ixzz1Rkc5QaZO

New Financing Values Twitter As High As $7 Billion

WSJ:
Twitter Inc., the fast-growing Internet messaging service, is privately raising hundreds of millions of dollars in a new financing round that values the company at as high as $7 billion, said a person familiar with the matter.
The move comes seven months after Twitter, which lets people broadcast and read messages called tweets, raised $200 million in a financing round led by Kleiner Perkins Caufield & Byers that valued the company at $3.7 billion. It's unclear which investors are participating in the new round.

Read more: http://online.wsj.com/article/SB10001424052702304803104576428020830361278.html#ixzz1RGhTRAzY

Moody's Warns on China Debt

WSJ:
Moody's Investors Service said China's main government auditor may have understated banks' loans to local governments by half a trillion dollars, escalating the ratings firm's warnings that the scale of such loans could pose a threat to China's banking system.‬
‪In the absence of a clear plan to reduce local-government debt, Moody's views the credit outlook for Chinese banking system as potentially turning to negative, the ratings firm said Tuesday.‬
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Netflix expands to 43 new countries

By Julianne Pepitone @CNNMoneyTech July 5, 2011: 12:16 PM ET
NEW YORK (CNNMoney) -- Netflix is rapidly expanding its international service, with plans to launch in 43 countries in Latin America and the Caribbean later this year.
The new markets -- which include Mexico, Central America, South America and the Caribbean -- will give those members access to Netflix content in Spanish, Portuguese or English. They'll be able to watch "American, local and global TV," Netflix said Tuesday.

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Is Facebook worth the price?

Jun 29th 2011, 18:28 by A.D. | LOS ANGELES (The Economist)
ON MONDAY, news surfaced that a small investment fund, GSV Capital, had purchased $6.6m worth of private shares of Facebook, valuing the popular social network at $70 billion. The shares of GSV Capital, which are publicly traded, shot up 42% on the news, adding $14m to the fund’s market value. That suggests the stock market believes Facebook is worth roughly twice its current private market valuation.


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Zynga IPO Implies a $15-$20 Billion Valuation

Published: Tuesday, 28 Jun 2011 | 1:00 PM ET
By: Kate Kelly
CNBC Reporter

As a Harvard Business School student, Mark Pincus scoffed at Wall Street firms whose interview questions he felt were beneath him. Now he’s hiring some of those very companies to help take his game maker, Zynga, public.

Zynga, the San Francisco Internet company responsible for FarmVille, Zynga Poker, and other popular online games, plans to file registration documents with the Securities and Exchange Commission as early as Wednesday to launch an initial public offering of stock, say people familiar with the matter.

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China's debt bomb

By Katie Benner June 28, 2011: 10:41 AM ET
(CNN Money)

As the world watches the Greek credit crisis unfold, a Sino-debt disaster is brewing halfway around the world.

Jim Chanos, the hedge fund manager who is famously shorting China, told Fortune late last year that the country was "embarking on something unprecedented." He was referring to the massive construction boom that has been underway for years, and that was supercharged by a 2008 stimulus package that pumped four trillion yuan ($586 billion) into the economy. In his opinion, the speculative bubble in real estate would end in a big pop, empty buildings, and pain for the country's broader economy.

For those who side with team Chanos, data is seeping out of China that suggests that he may right.
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Fed set to buy $300B more Treasuries

By Chris Isidore @CNNMoney June 28, 2011: 9:54 AM ET

NEW YORK (CNNMoney) -- QE2 is just about done. But the Federal Reserve will still be buying massive amounts of long-term Treasuries.

In fact, the Fed's purchases over the next year will likely be at least $300 billion. That's half the size of QE2 -- even if QE3 never takes place. Think of it as QE 2.5. 

While the Fed's efforts to pump about $600 billion of new cash into the economy over the last eight months comes to an end this week, the program, known as quantitative easing or QE2 for short, was not the only way the central bank was an active buyer of Treasuries.
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Citi Plays Catch-Up In China And Russia, Stock Smells Like $56

Jun. 24 2011 - 2:23 pm
posted by TREFIS TEAM
(Forbes - Investing)

Citigroup announced its move into the consumer and retail banking sector in Russia last week reinforcing its focus on emerging markets.

This move comes on the heels of the group’s investment banking joint venture in China that will allow it to offer underwriting and merger & acquisition (M&A) advisory services in the country.

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Apple's iPhone Deal with China Mobile Has Huge Profit Potential

By Douglas McIntyre - Posted 9:00AM 06/24/11

Apple (AAPL) buys many of the components for its electronic devices from Chinese suppliers. Now, it plans to get more aggressive about selling those devices in the world's largest cell phone market, which could substantially boost its earnings. Beijing's Ministry of Industry and Information Technology has just announced that there are now 910 million mobile phone subscribers in China. Users of 3G networks rose to almost 74 million. The number of wireless subscribers in the world's most populous nation is more than three times the number in the U.S., and its growing much more rapidly.

TheShanghai Daily reports Apple will begin to sell the iPhone this fall with China Mobile (CHL), by far the largest wireless operator in the People's Republic. Apple already has a partnership with smaller China Unicom (CHU). "A new iPhone with China Mobile's network will debut and the cooperation will be announced in September," China Mobile's Beijing-based marketing official Liu Yang said on his microblog, according to the newspaper.

See full article from DailyFinance:http://srph.it/mA6qyb

Oil Prices Were Already Falling, So Why Tap Reserves Now?

Published: Thursday, 23 Jun 2011 | 11:55 AM ET
By: Jeff Cox
CNBC.com Staff Writer
An aggressive global effort to drive down oil prices even further appears aimed not only at easing gasoline prices but giving a boost to a faltering economy.
Dual announcements on Thursday by the US Department of Energy and International Energy Agency that reserve stockpiles would be released came even as the price of US crude had fallen more than 16 percent in just two weeks, while the more widely used Brent crude was down about 12 percent.

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A Look Inside the Fed’s Balance Sheet

JUNE 21, 2011, 4:49 PM ET

By Phil Izzo (WSJ)

Ahead of the Federal Reserve‘s policy-setting meeting tomorrow and the coming end this month of QE2, it’s worth taking a look at the latest figures from the Fed’s balance sheet.

Assets on the Fed’s balance sheet sit at around $2.811 trillion as of last Wednesday. That’s up from less than $1 trillion prior to the recession. During the recession the Fed expanded its balance sheet through several programs aimed at keeping markets functioning. As markets stabilized the Fed shifted out of emergency programs and into purchases of U.S. Treasurys, mortgage-backed securities and agency debt securities to drive down interest rates and encourage more borrowing and growth in two separate rounds of what is known as quantitative easing.

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Grupo Financiero Galicia Looking For Triple Digits In Growing Argentinean Economy

Jun. 21 2011 - 10:46 am (Forbes)

Is Argentina overheating?Grupo Financiero Galicia S.A. (GGAL – Snapshot Report) is expected to see triple digit earnings growth in 2011 as the Argentinean economy heats up. Shares, however, have fallen in the last few weeks, making this Zacks #1 Rank (strong buy) even more attractive.

Grupo Galicia is the holding company for Banco Galicia, one of Argentina’s oldest banks, which provides financial services to corporations and individuals throughout Argentina. It also is a big supplier of credit cards.

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RIM starts handing out layoff notices, report says

TORONTO | Tue Jun 21, 2011 8:32pm IST
(Reuters) - BlackBerry maker Research In Motion has started to hand out layoff notices after it said on Friday it would cut an unspecified number of jobs, a local newspaper said on Tuesday.

A spokesman for the Canadian company could not be reached immediately to confirm the report in the Waterloo Region Record, which serves the Ontario city where RIM is headquartered.

The report gave no specific numbers on the layoff notices, but noted that RIM employs about 17,500 workers globally, including 9,000 in the Waterloo region.

Shares of RIM, which once dominated the business segment of the smartphone market, have dropped about 27 percent since it revealed dismal quarterly results and lowered its full-year outlook on Friday.

The stock is down more than 50 percent this year after a series of missteps as it tries to keep pace with Apple Inc and other innovators in the smartphone and tablet computer markets.

(Reporting by Frank McGurty; editing by Janet Guttsman)

If Greece Defaults, What Happens to Portugal and Ireland—and Spain?

By Gonzalo Lira

MONDAY, JUNE 20, 2011

So it looks like Greece is about to go down the toilet. Last year, Greece got a bailout—so this year (wouldn’t you know it), they want another.
But it’s looking like France, Germany, Holland and the UK are all balking at the reality of having to save the Greek’s hide once again. Boris Johnson, the flamboyant Mayor of London,openly called for Greece to exit the euro in an op-ed in the Telegraph. Several of the participants in the negotiations are asking for Greece to make deeper austerity cuts first, before getting more bailout money—.

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Is it the summer of 2008 all over again?

By Paul R. La Monica June 20, 2011: 12:42 PM ET

NEW YORK (CNNMoney) -- Is Greece the 2011 version of Lehman Brothers?

More and more investors are starting to worry that this summer could be a mirror image of the dog days (emphasis on dog) of 2008.

Big banks, particularly in Europe, have massive exposure to Greek debt. And just as Lehman's bankruptcy in September 2008 led to meltdowns at other big financial firms, the worry is that if Greece defaults, it could be the first proverbial domino to fall.

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Why the economic recovery is lagging—Posner

06/19/2011

The U.S. economy is stagnant; the proposition that we had a mere “recession” which “ended” two years ago, is, like the terminology of sovereign default (“debt restructuring”), just an exercise in euphemism. Real (that is, inflation-adjusted) GDP per capita has declined by almost 3 percent since 2007. (This is on the assumption that the first-quarter 2011 increase in GDP at an annual rate of 1.8 percent, not adjusted for inflation or population growth, will be the full-year real per capita increase—in fact, if unadjusted GDP grows by less than 3 percent for the year as a whole, the real per capita GDP will decline.) At the same time, the national debt has soared (it is currently $14.3 trillion, of which $9.7 trillion is “public debt”—that is, debt owed bondholders rather than social security annuitants and other entitlement holders), and unemployment exceeds 9 percent, with about half the unemployed not having worked for at least six months.


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Number of the Week: Compensating for High Gas Price

By Justin Lahart (WSJ)

138.45 billion: Gallons of gasoline the U.S. is forecast to consume this year, according to theEnergy Information Administration.

The price of gasoline eased in recent weeks, but it’s still high. At the current level of $3.71 for a gallon of regular, the U.S. would spend $140 billion more at the pump annually than a year ago, when it fetched $2.70. That’s equal to about 1.3% of the $10.9 trillion consumers look likely to spend this year according to a forecast from Macroeconomic Advisers.

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