Fun Friday reads

Fun Friday reads

Fun Friday reads
Good news about the American economy continues to emerge. In a recent issue of WP we quoted a fund manager betting on a recovery in the U.S. economy. The latest report on jobs in the United States supports that optimistic take. Read more here.
 
Tempering the optimism, some serious banker types are suggesting that global growth is going to be, generally, lower and slower in the years ahead. The so-called “New Neutral” story told by PIMCO`s Bill Gross continues to play out. Click here for more.

WP sales whiz Trevor Biggs sent this story over, remarking that, ``If you can’t trust JP Morgan, who can you trust?” No kidding. In an interview a couple weeks ago with WP, Chris Nicola, the founder WealthBar.com, suggested that the ability of an advisor firm to protect and maintain client data is going to be a key defining traits of successful firms in the years ahead. His suggestion was that the financial advisor firms that can set up and maintain a secure network are going to be the winners. “It is amazing to think the industry still does not have a code on financial data management,” he said at the time. Those comments came to mind in light of the JP Morgan news. Details here.
 
The CFA Society of Toronto held its 57th annual Fearless Forecast dinner this week. Last year’s event featured well-known U.S. advisor Barry Rithotlz. A couple of stories he said he read this week:
  •  http://www.bloombergview.com/articles/2014-10-02/warning-flags-in-the-stock-market
  • http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/01/the-middle-class-is-poorer-today-than-it-was-in-1989/

These kinds of stories are great. A similar event seems to happen every once a year or so. Last time a mop fell on a trader's keyboard sending out a bunch of accidental sell orders. Watch out for the dreaded “fat finger.” Link to news here.

Wednesday's 57th annual forecast dinner included a prediction that coal prices would be down in the year ahead as the Chinese economy cools. Which makes sense. Growth in the Middle Kingdom is lagging. But, come on $2 for a coal company? Could there be something else happening here? According to some the deal is all about the controversial trade deal Stephen Harper signed with China, the so-called FIPA deal that came into effect on October 1st.
 
Here’s a story about the deal: http://thetyee.ca/Opinion/2014/09/30/Flaws-in-FIPA/

Here is a story about the sale of the coal company by a Japanese company to a Chinese firm this week: http://www.cbc.ca/news/canada/calgary/2-gets-chinese-firm-controlling-stake-in-grande-cache-coal-1.2785280

Some are using the term “regulatory arbitrage" to describe the sale of a company that is said to be worth $1 billion.  According to online prophets:
  • “The arbitrage is clear. The company was sold to China for a token amount because China can exploit the Canada-China FIPA advantage that the original owners don't have. There is a tax arbitrage due to the write down.”
  • “Now that the Canada-China FIPA is in full force, we will begin to see a lot of Canadian resource sector businesses sold to China for $2 and options to take advantage of China's un-level playing field advantage in Canada."
 
 
This is a great idea... http://www.financial-planning.com/news/regulatory_compliance/planners-frustrated-by-hurdles-to-helping-soldiers-in-crisis-2689331-1.html

Nuite Blanche takes place this Saturday in Toronto. Scotiabank was smart to snag the sponsorship to those all-night, city-wide art event. In just a couple years it has become radically popular, is the “it” thing for the young crowd. What other event draws 400,000 people to the downtown core? Here's a story about an art piece that allows one to "hear" economic statistics. Have you listened to GDP data lately? Link here.