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4th Quarter GDP was revised up today from a dismal -0.1 percent to a dismal +0.1 percent, confirming the stagnation character of the American economy.  All the fine rhetoric from the White House and its chorus of apologists cannot hide the fact that US economy is stuck in the mud. This should come as no surprise of course.  Why should anyone expand their business or take on new employees in this environment?  Heaven forbid that anyone should make a profit or try to get rich.  That's the new sin. So, what is left is stagnation.  An economy that rewards people for not working and punishes those who wish to employ capital is an economy that is going nowhere.  Obama has managed to accomplish what few thought possible.  He has shut down the mighty American economic engine.

Coach Arsene Wenger (above) should have a happier summer      This past Monday, Premier League team Arsenal F.C published its financial statements for the first half of the season, posting a profit of about 17.8 million pounds.      While profits from this period are just half of those from the previous period, Arsenal fans can rejoice in the fact that the reduced income is due to an increase in player investments. Over the past six months, the team brought on the likes of Lukas Podolski, Santi Cazorla, and Olivier Giroud, and the club also announced extending contracts with the talented Jack Wilshire and Theo Walcott.    Although the increase in spending is and should be considered a good thing for Arsenal as a football team, major problems still exist. The team has failed to win a trophy for seven years, and sit at fifth place in the current Premier League table, one spot away from Champions League qualification. Should Arsenal fail to qualify f...

After the election that took place on Monday, Italy finds itself in political gridlock. The center-left, led by Pier Luigi Bersani, hold a majority in the lower house while the center-right coalition, led by Silvio Berlusconi, won enough seats in the Senate (117) to deprive the center-left of the majority it needed to govern. Beppe Grillo, a former satirist turned populist-politician, received 25.5% of the popular vote and won 54 seats in the Senate in what is perhaps the clearest demonstration of the dissatisfaction by the Italian people with the electoral system. Mario Monti, the outgoing technocrat that led the government after Berlusconi resigned in the midst of a crisis in 2011, received a lowly 10.5% of the votes for the lower house and 9.1% for the Senate, corroborating the displeasure that the public has for the austerity measures and tax hikes enacted under his government that managed to quell some of the fear ever-present in the marketplace. SX5E - Euro Stoxx 50 Index (...

They say that the only constant in life is 'change'. Well, not always. Hopefully, with this new fund, you will find comfort in its stability. Furthermore, it aims to provide more returns than the current Fixed Deposit rate, and is more stable than equities. Riding on the growth of the Asian countries, investors have the opportunity to diversity their portfolio and increase the returns. This fund is only available until 4 April 2013 ! What is CIMB-Principal Enhanced Opportunity Bond Fund? It is a close-ended fund that aims to provide investors with total return through investments in a portfolio of debt securities primarily in bonds. The fund seeks to achieve its overall objective by providing total returns consisting of a combination of interest income and capital appreciation .  Investment Strategy Under general market conditions, between 70% to 99% (both inclusive) of the Fund’s net asset value (“NAV”) will be invested in non-ringgit debt securities primarily in bonds (i...

Question Consider an initial value ODE of the following form write a function to return the value of y at x=b given. For this example we are going to implement the Euler method as given by where w at the nth step gives an estimate for the value of y at x=b. As with all programs we start by thinking about what are the parameters and local variables in the problem. It is clear from the specification here that the parameters are a, b, n, as well as the function to be integrated itself although as we are not interested in writing a generic algorithm we can ignore the last one. Start with an empty program with libraries for input/output to screen/file and mathematical functions. #include <iostream> #include <fstream> #include <cmath> using namespace std; int main() { return 0 ; } Compile and run the program to check you have everything set up ok. Next shall declare the external parameters first, followed by the local parameters and then initialise any valu...

Everyone knows, except Obama, that the entitlements are $70 trillion in the hole from an actuarial point of view.  This means that, in finite time, they will run out of money. So that, it is very, very clear that future generations will get nothing at all from social security and medicare regardless of the amount that they pay in. Unless something is done. This we know (except for Obama, of course, who seems to know nothing). All of this means that sooner or later, social security and medicare will be fixed.  Running out of money is a fix. That does solve the problem. A simple solution is to move out the age of eligibility for medicare (and index it).  Do the same for social security.  Means test both programs.  Raise medicaid eligibility requirements.  Doing these things would mean that social security and medicare will never run out of money. So, a simple fix, can make things work.  If we do it now.  Delay means that when you do act, the actions...

Every wonder why we didn't cover the IPO for Tune Ins ? Other than CNY mood, it's because of the unexciting part of this new stock. Why? Please read on... Tune Ins Holdings Sdn Bhd (TIH) operates 2 core businesses. First, it provides online insurance where insurance products are sold as part of the customer’s online booking process with their partners namely AirAsia, Tune Hotels and AirAsia Expedia. TIH also operates a general insurance business, through 83.26% owned subsidiary - TIMB. Why invest in Tune Insurance Holdings? Wide and cost effective distribution channels Provide ease in buying coverage Exclusive partnership with AirAsia Ability to ride on AirAsia’s robust growth Additional revenue and cost synergies from TIMB Robust industry prospects However, some of the above investing reasons had also became the disadvantages of TIH. It's reliant on AirAsia business is too important. TIH's success is very much depends on the success of AirAsia businesses, and because...

Come join Finance Society this upcoming Tuesday for a resume and cover letter workshop. Members of our executive board will be teaching you the steps of building the two professional documents. At the end of the workshop you will also have a chance for an one-on-one critique session. Bring a copy of your resume.

Joe Stiglitz has penned an interesting article on the growing inequality of measured income in the United States.  The facts that he uses, of course, are subject to the usual limitations.  If you ignore everything the government does and all employee benefits, then you get one answer.  If you include government spending and employee benefits you get an entirely different answer.  But, lay that aside for the moment, because, I think, Stiglitz is on to something.  There is growing inequality of opportunity in America, but not for the reasons Stiglitz is implying. It is no wonder that wealthy liberals are at the forefront of the call for reduced inequality.  They know that their policies will solidify their exalted status in society. They are not at risk. The simplest example can be read in today's editorial in the NY Times in support of raising the national minimum wage from $ 7.25 per hour to $ 9.00 per hour.  That kind of policy won't hurt the liberal ...

Conserving Capital with Kyle Cameron It All Made Sense Until He Said That EVERYONE Profits I have decided to give a central theme to my blog posts for the Finance Society from here on out.   This first post will explore the theme chosen, its centrality to finance, and the chat that inspired the idea.   Capital conservation has to be the most important topic in finance, and as such deserves a little defining.   Finance poses the question: How do I best allocate assets?   As a subcategory, capital conservation concerns itself with the logical follow-up: How do I avoid poor allocations of assets?   Indeed, capital allocation is what Warren Buffett was referring to in his quote, “ The first rule of investing is don't lose money; the second rule is don't forget Rule No. 1 ”.   However, despite the world famous investor’s reference to capital allocation as the first rule, I would argue that most people – financiers, economists, and other busine...

Last week, the U.S. Justice Department’s legal suit against Standard and Poor’s Rating Services captured much public attention and gave rise to a heated debate. It is by far the first legal case against a rating agency over the cause of the crisis. The government believed that the rating giant should be accounted for its overly optimistic ratings toward mortgage-backed securities and collateralized debt obligations that misled the market and cost investors billions of dollars. Moreover, over the past few years, the government has been investigating whether the firm’s management was involved in intentionally pushing the standards lower for certain kinds of bonds, a misconduct that would potentially bring about a serious disaster for this New York based company. Indeed, before the housing bubble burst and the crisis began, most MBS’s and CDO’s were given AAA ratings because rating analysts all agreed that the investment was so diverse that it could provide investors a safe ne...

Housing analysts have been giddy for the past year about the comeback of their industry, whose collapse led to the Great Recession. 2012 ended up being the third worst year for housing ever, but still beat 2011 and 2010. New and existing home sales, housing starts, and prices jumped in 2012; Countless experts expect an even stronger recovery for 2013. I imagine people are excited because a major housing rebound typically leads to a broader economic recovery. The logic is as more people put equity into their homes, they experience a psychological effect causing them to feel more free to spend disposable income, increasing economic activity - a phenomenon known as the “wealth effect.”   Can bullish expectations for housing actually simulate a long-awaited recovery to Main Street? The more I think about it, the clearer it becomes that it’s not being driven by the typical American families who lost their homes in the economic crash. In fact, it’s being fueled by the banks, private...