Salient to Investors: Christine Lagarde at the IMF said the US must create a long-term plan for handling the deficit or risk its position as the world’s economic leader. The IMF said the US economy remains on track, and expects 2 percent in 2012 and 3 percent in 2014. Read
READ MORE... →Salient to Investors: Ray Dalio at Bridgewater Associates said: 2013 will be a game changer for the economy as investors reallocate money – currently getting very bad returns – after risks including Europe’s sovereign debt crisis receded. Money will move into stocks and other assets, as well as into goods and services Central banks
READ MORE... →Salient to Investors: Dan Ariely at Duke and Nina Mazar at Rotman School of Management write: Our brains are hard-wired to choose short-term payoff over long-term gain. Saving money as a habit is especially important, so use commitment devices like pre-committing to saving a percentage of future wage increases. Studies show
READ MORE... →Salient to Investors: George Soros said institutions that invest in hedge funds should expect poor performance because of high fees – typically 2 percent of assets and 20 percent of returns – and because hedge funds are such a dominant force in the market, so can’t, as a group, outperform it. Soros
READ MORE... →Salient to Investors: Wayne Lin at Legg Mason said people are jumping on the bandwagon: earnings are better, economic data is trending good, Washington have got the message that they need to work together. 76 percent of S&P 500 companies have topped analysts’ estimates. The S&P 500 is at 14.9 times reported earnings versus the average
READ MORE... →Salient to Investors: James Picerno writes: Steve Clemons and Richard Vague say the financial crisis and Great Recession were caused primarily by massive private debt. But saying debt is the main catalyst that routinely triggers recessions goes too far. The credit crunch of 1966 was not accompanied by an economic downturn. Gary Gorton
READ MORE... →Salient to Investors: Executives and economists said Britain’s pledge to hold a referendum on leaving the EU may damage investment and jeopardize an economy facing its first triple-dip recession. Adam Posen said the prospect of a referendum will hurt investment in the UK, and to stretch it out until 2017 is
READ MORE... →Salient to Investors: Swedish Prime Minister Fredrik Reinfeldt said the US will never afford the welfare benefits enjoyed by Europeans unless it raises taxes, and America’s federal deficit is unsustainable. The OECD says the US has the 4th smallest tax burden relative to GDP, after Mexico, Chile and Turkey. Global investors say the
READ MORE... →Salient to Investors: At least 20 analysts lowered price targets after Apple reported its slowest growth rates in years and said the trend will continue. Abhey Lamba at Mizuho Securities USA said Apple may more closely resemble a value stock, as growth has slowed much faster than anticipated. Avi Silver at Credit Agricole Securities
READ MORE... →Salient to Investors: Copper traders are bullish for a third consecutive week on the fastest expansion in Chinese manufacturing in two years. ETF Securities said $28 million went into its ETFS Physical Copper ETP last week, the most since its introduction in 2010. Barclays said China consumes 42 percent of the world’s copper,
READ MORE... →