Quote from the Yomiuri newspaper (interview with BOJ Governor Kuroda) and reported on the wires (source, Bloomberg).
The Yomiuri Shimbun is one of the five national newspapers in Japan & part of the Yomiuri Group, Japan’s largest media conglomerate.
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Happy New Year Mr. K. Now, please shut up so we can enjoy the holiday
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Added: Thanks to the truly excellent folks at Bloomberg we have the details of the Yomiuri newspaper interview. The Yomiuri English language website is not updating today; ordinarily it would, even on a Japanese holiday, but Yomiuri is moving its operations into a new buliding today! But, that hasn’t stopped the Bloomberg reporters. Kudos indeed.
BOJ Governor Haruhiko Kuroda said the central bank won’t necessarily end or scale back its stimulus program in 2 yrs, and will continue it until inflation stabilizes at 2%
Kuroda said achieving 2% inflation in 2 yrs is the BOJ’s goal
Says that while economic growth rate will probably drop in the April-June quarter (the consumption tax rate will be raised to 8% from 5% in April), it will improve after that
Kuroda said he isn’t very worried about the impact of the tax increase
Growth in China's factories slowed slightly in December as export orders and output weakened, official data showed on Wednesday, adding to views that while the world's second-largest economy remains resilient, it lost some steam in late 2013. The official Purchasing Managers' Index (PMI), published by the National Bureau of Statistics, dipped to 51.0 in December. Many economists have said China's economy was likely to show weaker momentum in the final three months of 2013 after a rebound between July and September, due to slowing credit growth and a fall-off in restocking demand. Domestically, tight liquidity is weighing on factory output and orders," said Li Heng, an economist at Minsheng Securities in Beijing.
It's that time of year again, when we begin to think of what the next one will bring. I will be doing my annual forecast issue next week, but my friend Gary Shilling has already done his and has graciously allowed me to use a shortened version of his letter as this week's Thoughts from the Frontline. So without any further ado, let's jump right to Gary's look at where we are and where we're going.
Review and Forecast
By Gary Shilling
In the third quarter, real GDP grew 2.8% at annual rates from the second quarter. Without the increase in inventories, the rate would be 2.0%, in line with the 2.3% average growth since the economic recovery commenced in the second quarter of 2009.
Furthermore, the step-up in inventory-building from the second quarter may have been unintended, suggesting cutbacks in production and weaker growth in future quarters. Also, consumer spending growth, 1.5% in the third quarter, continues to slip from 1.8% in the second quarter and 2.3% in the first while business spending on equipment and software actually fell at a 3.7% annual rate for only the second time since the recovery started in mid-2009. Government spending was about flat with gains in state and local outlays offsetting further declines in federal expenditures. Non-residential outlays for structures showed strength as did residential building. The 16-day federal government shutdown didn't commence until the start of the fourth quarter, October 1, but anticipation may have affected the third quarter numbers.
Recovery Drivers
The 2.3% average real GDP growth in the recovery, for a total rise of 10%, has not only been an extraordinarily slow one but also quite unusual in structure. Consumer spending has accounted for 65% of that growth, actually below its 68% of real GDP, as shown in the second column of Chart 1. Government spending—which in the GDP accounts is direct outlays for personal and goods and services and doesn't include transfers like Social Security benefits—has actually declined. Federal outlays fell 0.4% despite massive stimuli since most of it went to welfare and other transfers to state governments. But state and local spending dropped 0.9% due to budget constraints.
Residential construction accounted for 9% of the gain in the economy. This exceeds its share of GDP, but still is small since volatile housing normally leaps in recoveries, spurred by low interest rates. But deterrents abound. The initial boost to the economy as retrenching consumers cut imports was later reversed. So net exports reduced real GDP growth by 0.4% in the 13 quarters of recovery to date.
Inventory-building accounted for a substantial 19% of the rise in real GDP, suggesting the accumulation of undesired stocks since anticipation of future demand has been consistently subdued. Nonresidential structures fell 0.1% as previous overbuilding left excess space. Equipment spending contributed 20% of the overall growth, but has failed to shoulder the normal late recovery burst.
Nevertheless, the small intellectual property products component, earlier called software, accounted for 5% of overall growth compared to its 3.9% share of GDP. This reflects the productivity-enhancing investments American business have been using to propel profit margins and the bottom line in an era when sales volume has been weak and pricing power absent.
As we predicted over three years ago in our book The Age of Deleveraging: Investment strategies for a decade of slow growth and deflation, and in many Insights since then, economic growth of about 2% annually will probably persist until deleveraging, especially in the financial sector globally and among U.S. consumers, is completed in another four or five years. Deleveraging after a major leveraging binge and the financial crisis that inevitably follows normally takes around a decade, and since the workdown of excess debt commenced in 2008, the process is now about half over. The power of this private sector deleveraging is shown by the fact that even with the immense fiscal stimuli earlier and ongoing massive monetary expansion, real growth has only averaged 2.3% compared to 3.4% in the post-World War II era before the 2007-2009 Great Recession.
Optimists, of course, continue to look for reasons why rapid growth is just around the corner, and their latest ploy is the hope that the effects of individual income tax hikes and reduced federal spending this year via sequestration have about run their course. Early this year when these negative effects on spending were supposed to take place, scare-mongers in and out of Washington predicted drastic negative effects on the economy. But federal bureaucrats apparently mitigated much of the effects of sequestration, and the income tax increases on the rich, as usual, didn't change their spending habits much. So the positive influences on the economy as sequestration fades and income tax rates stabilize are likely to be equally minimal.
Furthermore, small-business sentiment has fallen recently. The percentage of companies that look for economic improvement dropped from -2 in August to -10 in September and -17 in October to a seven-month low. Those expecting higher sales declined from +8 to +2 in October. Most of the other components of the index fell, including those related to the investment climate, hiring plans, capital spending intentions, inventories, inflation expectations and plans to raise wages and prices. Other recent measures of subdued economic activity include the New York Fed's survey of manufacturing and business conditions and industrial production nationwide, which fell 0.1% in October from September.
The New York Fed's Empire State manufacturing survey index for November fell to 2.21%, the first negative reading since May. Every component dropped—orders, shipments, inventories, backlogs, employment, the workweek, vendor performance and inflation.
Global Slow Growth
The ongoing sluggish growth in the U.S. is indeed a global problem. It's true in the eurozone, the U.K., Japan and China. Recently, the International Monetary Fund, in its sixth consecutive downward revision, cut its global growth forecast for this year by 0.3 percentage points to 2.9% and for 2014, by 0.2 percentage points to 3.6%.
It lowered its 2013 forecast for India from 5.6% to 3.8%, for Brazil from 3.2% to 2.5% and more than halved Mexico's to 1.2%. For developing countries on average, the IMF reduced its 2013 growth forecast by 0.4 percentage points to 5%, citing the drying up of years of cheap liquidity, competitive constraints, infrastructure shortfalls and slowing investment. It also worries about their balance of payment woes. For 2014, the IMF chopped its growth forecast for China from 7.8% to 7.3% and from 2.8% to 2.6% for the U.S.
Fiscal Drag
Fed Chairman Bernanke continually worries about fiscal drag. Without question, the federal budget was stimulative in earlier years when tax cuts and massive spending in reaction to the Great Recession as well as weak corporate and individual tax collections pushed the annual deficit above $1 trillion. But the unwinding of the extra spending, income tax increases and sequestration this year and economic recovery—weak as it's been—have reduced the deficit to $680 billion in fiscal 2013 that ended September 30.
From here on, the outlook is highly uncertain with persistent gridlock in Washington between Democrats and Republicans. So far, they've kicked the federal budget and debt limit cans down the road and they may do so again when temporary extensions expire early next year. It looks like many in Congress have no intention of resolving these two problems and may be jockeying for position ahead of the 2014, if not the 2016, elections.
In our many years of observing and talking to Congressmen, Senators and key Administration officials of both parties, it's clear that Washington only acts when it has no alternative and faces excruciating pressure. A collapsing stock market always gets their attention, but the ongoing market rally, in effect, tells them that all is well or at least that it doesn't require immediate action.
The Fed
With muted economic growth and risks on the downside, distrust in the abilities or willingness of Congress and the Administration to right the ship, and falling consumer and business confidence, the burden of stimulating the economy remains with the Fed. Janet Yellen, the likely next Chairman, seems even more committed than Bernanke to continuing to keep monetary policy loose. The Fed plans to reduce its buying of $85 billion per month in securities but the negative reactions by stocks (Chart 2), Treasury bonds (Chart 3) and many other securities to Bernanke's hints in May and June that purchases would be tapered and eliminated by mid-2014 made a strong impression on the Fed. Similarly, the release of the minutes of the Fed's October policy meeting— which again said officials looked forward to ending the bond-buying program "in coming months" if conditions warranted—resulted in an instant drop in stock and bond prices.
The Fed is trying to figure out how to end security purchases without spiking interest rates, to the detriment of housing, other U.S. economic sectors and developing economies. It's moving toward "forward guidance," more commitment to keep the short-term interest rate it controls low than its present pledge to keep it essentially at zero until the current 7.3% unemployment rate drops to 6.5% and its inflation rate measure climbs to 2.5% from the current 1.2% year-over-year.
The hope is that a longer-term commitment to keep short-term rates low will retard long rates as well when the Fed tapers its asset purchases. This strategy appears to be having some success. Treasury investors are switching from 10-year and longer issues to 2-year or shorter notes. This is known as the yield-steepening trade as it pushes short-term yields down and longer yields up. As a result, the spread between 2-year and 10-year Treasury obligations has widened to 2.54 percentage points, the most since July 2011. Banks benefit from a steeper yield curve since they borrow short term and lend in long-term markets. But borrowers pay more for loans linked to long-term Treasury yields. There's a close link between the yield on 10-year Treasury notes and the 30-year fixed rate on residential mortgages.
The Fed has already signaled that it may not wait to raise short rates until the unemployment rate, a very unreliable gauge of job conditions as we've explained in past Insights, drops below 6.5%. Bernanke recently said that "even after unemployment drops below 6.5%, the [Fed] can be patient in seeking assurance that the labor market is sufficiently strong before considering any increase in its target for the federal funds rate." At that point, the Fed will consider broader measures of the job market including the labor participation rate. If the participation rate hadn't fallen from its February 2000 peak due to postwar baby retirements, discouraged job-seekers and youths who stayed in school since job opportunities dried up with the recession, the unemployment rate now would be 13%.
The Fed is well aware that other than pushing up stock prices, its asset-buying program is having little impact on the economy. In a recent speech, Bernanke said that while the Fed's commitment to hold down interest rates and its asset purchases both are helping the economy, "we are somewhat less certain about the magnitude of the effects on financial conditions and the economy of changes in the pace of purchases or in the accumulated stock of assets on the Fed's balance sheet." We wholeheartedly agree with this sentiment, as discussed in detail in our October Insight. Tapering Fed monthly purchases only reduces the ongoing additions to already-massive excess member bank reserves on deposit at the Fed.
Inflation-Deflation
Inflation has virtually disappeared. The Fed's favorite measure of overall consumer prices, the Personal Consumption Expenditures Deflator excluding food and energy (Chart 4), is rising 1.2% year-over-year, well below the central bank's 2.0% target and dangerously close to going negative.
There are many ongoing deflationary forces in the world, including falling commodity prices, aging and declining populations globally, economic output well below potential, globalization of production, growing worldwide protectionism including competitive devaluation in Japan, declining real incomes, income polarization, declining union memberships, high unemployment and downward pressure on federal and state and local government spending.
With the running out of 2009 federal stimulus money and gas tax revenues declining as fewer miles are driven in more efficient cars, highway construction is declining and construction firms are consolidating and reducing bids on new work even if their costs are rising. Highway construction spending dropped 3.3% in the first eight months of 2013 compared to a year earlier. Also, states are shifting scarce money away from transportation and to education and health care. We've noted in past Insights that aggressive monetary and fiscal stimuli probably have delayed but not prevented chronic deflation in producer and consumer prices.
Why does the Fed clearly fear deflation? Steadily declining prices can induce buyers to wait for still-lower prices. So, excess capacity and inventories result and force prices lower. That confirms suspicions and encourages buyers to wait even further. Those deflationary expectations are partly responsible for the slow economic growth in Japan for two decades.
Low Interest Rates
With the Fed likely to continue to hold its federal funds rate close to zero, other short-term interest rates will probably remain there too. So the recent rally in Treasury bonds may well continue, with yields on the 10-year Treasury note, now 2.8%, dropping below 2% while the yield on our 32-year favorite, the 30-year Treasury "long bond," falls from 3.9% to under 3%. Even-lower yields are in store if chronic deflation sets in as well it might. Ditto for the rise in stocks, which we continue to believe is driven predominantly by investor faith in the Fed, irrespective of modest economic growth at best. "Don't fight the Fed," is the stock bulls' bellow. Supporting this enthusiasm has been the rise in corporate profits, but that strength has been almost solely due to leaping profit margins. Low economic growth has severely limited sales volume growth, and the absence of inflation has virtually eliminated pricing power. So businesses have cut labor and other costs with a vengeance as the route to bottom line growth
Wall Street analysts expect this margin leap to persist. In the third quarter, S&P 500 profit margins at 9.6% were a record high but revenues rose only 2.7% from a year earlier. In the third quarter of 2014, they see S&P 500 net income jumping 14.9% from a year earlier on sales growth of only 4.7%. But profit margins have been flat at their peak level for seven quarters. And the risks appear on the downside.
Productivity growth engendered by labor cost-cutting and other means is no longer easy to come by, as it was in 2009 and 2010. Corporate spending on plant and equipment and other productivity-enhancing investments has fallen 16% from a year ago. Also, neither capital nor labor gets the upper hand indefinitely in a democracy, and compensation's share of national income has been compressed as profit's share leaped. In addition, corporate earnings are vulnerable to the further strengthening of the dollar, which reduces the value of exports and foreign earnings by U.S. multinationals as foreign currency receipts are translated to greenbacks.
Speculation Returns
Driven by the zeal for yield due to low interest rates and the rise in stock prices that has elevated the S&P 500 more than 160% from its March 2009 low, a degree of speculation has returned to equities. The VIX index, a measure of expected volatility, remains at very low levels (Chart 5). Individual investors are again putting money into U.S. equity mutual funds after years of withdrawals. "Frontier" equity markets are in vogue. They're found in countries like Saudi Arabia, Nigeria and Romania that have much less-developed—and therefore risky—financial markets and economies than Brazil and Mexico.
The IPO market has been hot this year. The median IPO has been priced at five times sales over the last 12 months, almost back to the six times level of 2007. And many IPOs have used the newly-raised funds to repay debt to their private equity backers, not to invest in business expansion. Through early November, IPOs raised $51 billion, the most since the $62 billion in the comparable period in 2000. Some 62% of IPOs this year are for money-losing companies, the most since the 1999-2000 dot com bubble. Some hedge fund managers are introducing "long only" funds with no hedges against potential stock price declines.
The S&P 500 index recently reached an all-time high but corrected for inflation, it remains in a secular bear market that started in 2000. This reflects the slow economic growth since then and the falling price-earnings ratio, and fits in with the long-term pattern of secular bull and bear markets, as discussed in detail in our May 2013 Insight.
High P/E
Furthermore, from a long-term perspective, the P/E on the S&P 500 at 24.5 is 48% above its long run average of 16.5 (Chart 6), and we're strong believers in reversions to well-established trends, this one going back to 1881. The P/E developed by our friend and Nobel Prize winner, Robert Shiller of Yale, averages earnings over the last 10 years to iron out cyclical fluctuations. Also, since the P/E in the last two decades has been consistently above trend, it probably will be below 16.5 for a number of years to come.
This index is trading at 19 times its companies' earnings over the past 12 months, well above the 16 historic average. This year, about three-fourths of the rise in stock prices is due to the jump in P/Es, not corporate earnings growth. Even always-optimistic Wall Street analysts don't expect this P/E expansion to persist in light of possible Fed tightening. Those folks, of course, are paid to be bullish and their track record proves it. Since 2000, stocks have returned 3.3% annually on average, but strategists forecast 10%. They predicted stock rises in every year and missed all four down years.
Housing
Residential construction is near and dear to the Fed's heart. It's a small sector but so volatile that it has huge cyclical impact on the economy. At its height in the third quarter of 2005, it accounted for 6.2% of GDP but fell to 2.5% in the third quarter of 2010 (Chart 7). That in itself constitutes a recession, even without the related decline in appliances, home furnishings and autos.
Furthermore, the Fed can have a direct influence on housing. Monetary policy is a very blunt instrument. The central bank only can lower interest rates and buy securities and then hope the economy in general will be helped. In contrast, fiscal policy can aid the unemployed directly by raising unemployment benefits. But by buying securities, especially mortgage-related issues, the Fed can influence interest rates and help interest-sensitive housing. The rise in 30-year fixed mortgage rates of over one percentage point last spring probably has brought the housing recovery to at least a temporary halt. Each percentage point rate rise pushes up monthly principal and interest payments by about 10%.
Of course, many other factors besides mortgage rates affect housing and have been restraining influences. They include high downpayment requirements, stringent credit score levels, employment status and job security and the reality that for the first time since the 1930s, house prices have fallen—by a third at their low.
Capital Spending
Many hope that record levels of corporate cash and low borrowing costs will propel capital spending. And spending aimed at productivity enhancement, much of it on high-tech gear, has been robust as business concentrates on cost-cutting, as noted earlier. But the bulk of plant and equipment spending is driven by capacity utilization, and while it remains low, there's little zeal for new outlays.
That's why capital spending lags the economic cycle. Only after the economy strengthens in recoveries do utilization rates rise enough to spur surges in capital spending. And as our earlier research revealed, it's the level of utilization, not the speed with which it's rising, that drives plant and equipment outlays. So this is a Catch-22 situation. Until the economy accelerates and pushes up utilization rates, capital spending will remain subdued. But what will cause that economic growth spurt?
Government Spending
It's unlikely to be government spending. State and local outlays used to be a steady 12% or so of GDP and a source of stable, well-paying jobs. But no more. State tax revenues are recovering (Chart 8), but the federal stimulus money enacted in 2009 has dried up, leaving many states with strained budgets.
Pressure also comes from private sector workers who are increasingly aware that while their pay has been compressed by globalization and business cost-cutting, state and local employees have gotten their usual 3% to 4% annual increases and lush benefits. As a result, those government people have 45% higher pay than in the private sector, 33% more in wages and 73% in additional benefits. Oversized retiree obligations have sunk cities in California and Rhode Island and pushed Illinois to the brink of bankruptcy. Hopelessly-underfunded defined benefit pensions are a major threat to state and local government finances.
Municipal government employment is down 3.3% from its earlier peak compared to -0.2% for total payroll employment (Chart 9). And since these people are paid 1.45 times those in the private sector, two job losses is the equivalent of three private sector job cuts in terms of income. Real state and local outlays have fallen 9.5% since the third quarter of 2009.
Federal direct spending on goods and services, excluding Social Security, Medicare and other transfers, has also been dropping, by 7.2% since the third quarter of 2010. Both defense and nondefense real outlays are dropping, and this has occurred largely before the 2013 sequestration. At the same time, federal government civilian employment, civilian and military, has dropped 6% from its top (Chart 10).
U.S. Labor Markets
The U.S. labor market remains weak and of considerable concern to the Fed. Recent employment statistics have been muddled by the government's 16-day shutdown in October and the impasse over the debt ceiling. Initially, 850,000 employees were furloughed although the Pentagon recalled most of its 350,000 civilian workers a week into the shutdown.
The unemployment rate has been falling, but because of the declining labor participation rate. We explored this phenomenon in detail in "How Tight Are Labor Markets?" (June 2013 Insight). As people age, their labor force participation rates tend to drop as they retire or otherwise leave the workforce. With the aging postwar babies, those born between 1946 and 1964, this has resulted in a downward trend in the overall participation rate—but it doesn't account for all of the decline.
The irony is that participation rates of younger people tend to be higher than for seniors, but are declining. For 16-24-year-olds, the rate has declined sharply since 2000 as slow economic growth, limited jobs and rising unemployment rates have encouraged these youths to stay in school or otherwise avoid the labor force.
Meanwhile, the participation rates for those over 65 have climbed since the late 1990s as they are forced to work longer than they planned. Many have been notoriously poor savers and were devastated by the collapse in stocks in 2007-2009 after the 2000-2002 nosedive, two of only five drops of more than 40% in the S&P 500 since 1900.
Part-Timers
An additional sign of job weakness is the large number of people who want to work full-time but are only offered part-time positions—"working part-time for economic reasons" is the Bureau of Labor Statistics term (Chart 11)—and these people total 8 million and constitute 5.6% of the employed. This obviously reflects employer caution and the zeal to contain costs since part-timers often don't have the pension and other benefits enjoyed by full-time employees.
This group will no doubt leap when Obamacare is fully implemented in 2015, according to its current schedule. Employers with 50 or more workers have to offer healthcare insurance, but not to those working less than 30 hours per week. When these people and those who have given up looking for jobs are added to the headline unemployment rate, the result, the BLS's U-6 unemployment rate, leaped in the Great Recession and is still very high at 13.8% in October.
The weakness in the job market is amplified by the fact that most new jobs are in leisure and hospitality, retailing, fast food and other low-paying industries, which accounted for a third of the 204,000 new jobs in October. Manufacturing, which pays much more, has added some employees as activity rebounds but growth has been modest.
Real Pay Falling
With all the downward pressure on labor markets, real weekly wages are falling on balance. The folks on top of the income pile have recovered all their Great Recession setbacks and then some, on average. The rest, perhaps three-fourths of the population, believe they are—and probably still are—mired in recession due to declining real wages, still-depressed house prices, etc. Consequently, the share of total income by the top one-fifth, which has been rising since the data started in 1967, has jumped in recent years. The remaining four quintile shares continue to fall, although falling shares do not necessarily mean falling incomes.
The average household in the top 20% by income has seen that income rise 6% since 2008 in real terms and the top 5% of earners had an 8% jump. The middle quintile gained just 2% while the bottom 29% are still below their pre-recession peak. A study of household incomes over the 2002-2012 decade shows that the top 0.01% gained 76.2% in real terms but the bottom 90% lost 10.7%. In 2012, the top 1% by income got 19.3% of the total. The only year when their share was bigger was 1928 at 19.6%.
Real median household income, that of the household in the middle of the spectrum, continues to drop on balance, only leveling last year from 2011 (Chart 12). In 2012, it was down 8.3% from the prerecession 2007 level and off 9.1% from the 1999 all-time top. Americans may accept a declining share of income as long as their spending power is increasing, but that's no longer true, a reality that President Obama plays to with his "fat cat bankers" and other remarks.
Households earning $50,000 or more have become increasingly more confident, according to a monthly survey by RBC Capital Markets, but confidence among lower-income households stagnated, created a near-record gap between the two. Of the 2.3 million jobs added in the past year, 35% were in jobs paying, on average, below $20 per hour in industries such as retailing and leisure and hospitality. Since the recession ended, hourly wages for non-managers in the lowest-paying quarter of industries are up 6% but more than 12% in the top-paying quarter. These income disparities are reflected in consumer spending. In the first nine months of this year, sales of luxury cars were up 12% from a year earlier but small-car sales rose just 6.1%.
Consumer Spending
With housing, capital spending, government outlays and net exports unlikely to promote rapid economic growth in coming quarters, the only possible sparkplug is the consumer. Consumer outlays account for 69% of GDP, and with falling real wages and incomes, the only way for real consumer spending to rise is for their already-low saving rate to fall further.
Even the real wealth effect, the spur to spending due to rises in net worth, is now muted. In the past, it's estimated that each $1 rise in equity value boosted consumer spending by three cents over the following 18 months while a dollar more in house value led to eight cents more in outlays. But now the numbers are two cents and five cents, respectively.
True, the ratio of monthly financing payments to their after-tax income has been falling for homeowners, freeing money for spending. Those obligations include monthly mortgage, credit card and auto loan and lease payments as well as property taxes and homeowner insurance. Nevertheless, for the third of households that rent, their average financial obligations ratio has been rising in the last two years as rents rise while vacancies drop.
Declining gasoline prices have given consumers extra money for other purchases, and are probably behind the recent rise in gas-guzzling pickup truck and SUV sales. Furthermore, the automatic Social Security benefit cost-of-living escalator will increase benefits by 1.5% in 2014 for 63 million recipients of retirement and disability payments. Still, with low inflation in 2013, the basing year, that increase is smaller than the 1.7% rise last year and the lowest since 2003, excluding 2010 and 2011 when there were no increases due to a lack of inflation. Social Security retirement checks will rise $19 per month to $1,294, on average, starting in January.
In any event, retail sales growth is running about 4% at annual rates recently, about half the earlier recovery strength (Chart 13). And a lot of this growth has been spurred by robust auto sales, allegedly driven by the need to replace aged vehicles.
Shock?
Insight readers know we've been waiting for a shock to remind equity investors of the fundamental weakness of the economy, and perhaps push the sluggish economy into a recession. With underlying real growth of only 2%, it won't take much of a setback to do the job.
Will the negative effects of the government shutdown and debt ceiling standoff, coupled with the confusion caused by the rollout of Obamacare, be a sufficient shock? The initial Christmas retail selling season may tell the tale, and the risks are on the down side. Besides the consumer, we're focused on corporate profits, which may not hold up in the face of persistently slow sales growth, no pricing power and increasing difficulty in raising profit margins.
Nevertheless, we are not forecasting a recession for now, but rather more of the same, dull, slack 2% real GDP growth as in the four-plus years of recovery to date.
If you like what you read and would like to keep up with Gary for the next year, you can subscribe to Gary Shilling's Insight for one year for $335 via email. Along with 12 months of Insight you'll also receive a free copy of his full report detailing why he believes it will be "advantage America" in the coming years and a free copy of Gary's latest book, Letting Off More Steam. To subscribe, call 1-888-346-7444 or 973-467-0070 between 10 am and 4 pm Eastern time or email insight@agaryshilling.com. Be sure to mention Thoughts from the Frontline to get the special report and free book in addition to your 12 months of Insight (available only to new subscribers).
I am home for the holidays until January 8, when I leave for Dubai and then Riyadh for a week. There is the potential for a day trip to Abu Dhabi to meet with Maine fishing buddy Paul O'Brien. Then I am back home for a week before I fly to Vancouver, Edmonton, and Regina for a three-day speaking tour at those cities' respective annual CFA forecast dinners. A note from a reader in Edmonton pointed out that it is already -30 there. I am actively hunting for my thermal underwear.
Oddly enough, my calendar then shows me home for four weeks before I head to Laguna Beach, CA, for a speech and then hop a plane to Miami. You would think that someone who flies as much as I do would have done a cross-country flight more than a few times, but this will be my first time ever to fly coast to coast in the US.
As noted last week, all my kids will be in town tonight, and we will celebrate our "official" family Christmas tomorrow. The poor grandchildren have had to wait three extra days to open their presents, but I keep telling them that waiting builds character. I get looks back from them that say they're not sure what character is but they want nothing to do with it.
I have always enjoyed this time of year as an interlude for contemplating the future. For whatever reason, since I was in college I have paused as the new year approached to think about where I wanted to be in five years. Given that I'm 64, that means I've gone through this process some 42 times and seen the completion of 37 five-year planning cycles.
My batting average to date is 0 for 37. I never end up where I thought I was going to be, although there are times when I at least get the direction right, and fortunately there even a few times when the new midcourse correction means things turn out even better than planned.
Next week I write my 2014 forecast, for which the theme will be "Uncertainty." Yet even in the face of overwhelming uncertainty, I will still come up with a personal five-year plan. Given the rather unique set of opportunities that have been presented to me in the past year, the plan is rather ambitious. And I expect it to change a lot. Among other projects, I expect to be announcing several new letters in the coming months that will be specifically directed to strategic portfolio planning. Right now our plan is to make these letters more or less freely available.
But the one thing that will hopefully not change is that I will be writing this letter to you, as together we try to make sense of the world. As the year draws to a close, I want to thank you for being part of my family of readers. And may the coming year surpass all your most wildly optimistic plans.
(Reuters) - Bombardier Inc (BBD-B.TO) said on Tuesday it received a firm order from an undisclosed customer to buy 38 business aircraft in a deal valued at about $2.2 billion. The Canadian plane maker said the order was for 28 Global business jets and 10 Challenger 605 jets. Bombardier on Monday announced an order for 10 Challenger 350 business jets from an undisclosed customer in a deal worth about $259 million. Shares of Bombardier closed at C$4.61 on the Toronto Stock Exchange on Tuesday.
Target Corp, which is dealing with one of the largest ever payment-data breaches in U.S. retail history, said on Tuesday that some of the gift cards it sold over the holiday season were not activated properly. "We are aware that some Target gift cards were not fully activated and apologize for the inconvenience," Target spokeswoman Molly Snyder said in an e-mail. Shoppers can bring the cards to the guest service desk at their local Target stores or call 1-800-544-2943 for assistance, Snyder added. Target's consumer perception scores dropped to their lowest level since 2007 after the breach, a survey showed.
Apple Inc has never worked with the U.S. National Security Agency and is unaware of efforts to target its smartphones, the company said in response to reports that the spy agency had developed a system to hack into and monitor iPhones. Germany's Der Spiegel reported this week that a secretive unit of the NSA, which is under fire for the extent and depth of its spying programs around the world, makes specialized gear and software to infiltrate and monitor a plethora of computing devices, including mobile phones. The report included an NSA graphic dated 2008 that outlined a system in development called DROPOUTJEEP, described as a "software implant" that allows infiltrators to push and pull and retrieve data from iPhones such as contact lists. In a statement issued Tuesday, the NSA did not comment on any specific allegations but said that its interest "in any given technology is driven by the use of that technology by foreign intelligence targets."
Billionaire investor Steven A. Cohen's SAC Capital Advisors is ending its life as a hedge fund with a 20.10 percent gain this year, marking one of the industry's best returns even after SAC pleaded guilty to insider trading charges, a source familiar with the numbers said. Cohen reported the number to outside investors on Monday as he prepares to stop managing money for wealthy clients after his firm last month agreed to plead guilty to insider trading and pay a $1.2 billion penalty. The number, although not final for the year because it does not include returns made on the last two days of the year, puts SAC among the $2.5 trillion hedge fund industry's best performers for 2013. The returns, possibly the last that outside investors with Cohen will see, are sure to mark a high point in an otherwise tough year for SAC.
U.S. consumers' mood improved as 2013 drew to a close, with many optimistic about their future job prospects, while home prices rose again in October, though the pace of gains slowed. The data releases provided more evidence of strength in the U.S. economy, which appears to have overcome headwinds caused by an autumn government shutdown, higher taxes and rising mortgage rates. We had better GDP growth even though interest rates have gone up with the Fed," said Gus Faucher, senior economist at PNC Financial Services, adding "2014 will be a better year with less fiscal drag." The rise in the Conference Board's index of consumer attitudes to 78.1 in December brought it to within reach of levels last seen before a standoff in Congress over fiscal policy caused the government to shut down in October.
Hewlett-Packard Co said it would cut 5,000 more jobs, bringing the total number of layoffs to 34,000, or 11 percent of its workforce. The company said in a regulatory filing on Monday that it would record ...
(Reuters) - China's largest auto parts company made a surprise bid for Fisker Automotive just days before the bankrupt maker of the Karma plug-in hybrid sports car was to be sold to a Hong Kong tycoon, according to court documents. Fisker creditors asked the U.S. Bankruptcy Court in Wilmington, Delaware, to scrap Fisker's agreed sale to a company affiliated with Richard Li and instead hold an open auction at which auto parts supplier Wanxiang America Corp plans to bid. Wanxiang has agreed to make an initial bid of $24.725 million and said it will assume some liabilities of Fisker, according to documents filed at late Monday's deadline to object to Fisker's plans.
Sales of vehicles able to drive themselves will account for about 9 percent of global auto sales in about two decades, according to a forecast published on Tuesday by auto industry consultant IHS Automotive. The study focused on autonomous cars, which can drive with "no attention needed by the driver," IHS analyst Egil Juliussen said. But by 2035, sales of self-driving cars will reach 11.8 million, or 9 percent of the 129 million global auto sales expected that year, said Juliussen. The pace of growth for self-driving cars will exceed that of electric cars, which have been hobbled by the high cost of batteries, Juliussen said.
Not only did gold futures fall in 2013, but they plunged, the first yearly decline since 2000 and the biggest since 1981. Why were the forecasts so wrong?
While we all have that one friend who is constantly littering our Facebook timelines with YouTube links to “Hilarius!” [sic] commercials, most of us hate advertisements. Even the ones that are funny or interesting the first time you see them will inevitably begin to grate after you see it for the 10th time in an hour. But some ads never even earn that initial chuckle, and instead go right to pushing that nerve that makes you want to body-slam your beloved 55″ TV.
Last week, we asked you to send in your nominations for the worst ads of 2013, and many of you took precious time out of your holiday weekend to share your thoughts on the commercials most deserving of public shaming.
Okay, okay, I’ve gone on long enough… just bring on the bad ads.
• Badvertiser of the Year: Kmart
It hasn’t exactly been a blue-light special year for the once-popular bargain retailer. Not only did Sears’ ugly little cousin earn heaps of hate for idiotically choosing to open before breakfast on Thanksgiving, it also had three of the most-nominated ads from Consumerist readers.
The Joe Boxer ad wasn’t Kmart’s first go at juvenile humor in 2013. The retailer began its “edgy” ads in the spring with the derision-deserving “Ship My Pants” ad:
Finally, Kmart really earned its Badvertiser of the Year honor by closing out 2013 with a series of ads that capture that whole “GIF” craze that someone at Kmart’s ad agency presumably heard about from her brother’s 13-year-old daughter… in 2011:
• Special Achievement in Badvertising Award: GEICO
While GEICO didn’t have any single ad that rose to the top of the nominations pile, the insurance company did have the widest variety of ads nominated — probably because GEICO has at least four different ad series that it is flogging to death on American TV.
The most-hated of GEICO’s many, many spokesthings wasn’t the gecko or the pig, but the schticky folk duo inexplicably placed into ads to explain the poor jokes contained therein. And when you add them to the most obnoxious dromedary to ever roam the cubicles, you get this special taste of hell:
We wouldn’t be shocked if that loudmouth camel becomes a full-fledged GEICO mascot. Just look at what the company has done with the pig that some people claimed to have enjoyed from that one commercial several years back. Now it’s driving, flying on planes, attending sporting events, and getting involved in romantic relationships with human females:
Then there’s the latest addition to GEICO’s rogues gallery of shills, the “Did You Know” ads, where people try to make up for stating the company’s old marketing language by making utterly moronic statements:
There’s also the gecko, but the less said about that animated turd the better.
• Humbert Humbert Award for Stepdad of the Year: Kay Jewelers — “Open Hearts”
This creeptastic ad, featuring a soon-to-be stepdad giving a young girl the same diamond necklace he’s already given to her mom, first popped up toward the end of 2012 then quickly disappeared, presumably because Kay realized the horrifying subtext of the ad. Nope. The bling retailer was just saving it up to ick out the public again this holiday season.
• The Pedestrians Be Damned Award: Zales — “Race to Black Friday”
Perhaps the car that eventually runs over the mom in the above Kay Jewelers commercial was driven by the idiot in this short Zales ad for Black Friday:
• The “We Don’t Think That’s What You Meant To Say” Award: Chevy — “Second to Nobody”
Do you have that friend who says “penultimate” when he means ultimate? Or that co-worker who thinks “lucked out” means you’re out of luck? Maybe he or she got a job writing ad copy for Chevrolet, because we don’t think that this Silverado ad was meant to imply that Chevy is in third place behind Dodge Ram and Ford:
• The Shove This Down Your Throat Award: Wendy’s
Forget that sketchy kid hanging around the playground trying to get your kid to smoke a cigarette. There’s a bigger danger in town — the Wendy’s shill who pops up everywhere people are trying to eat, but who rarely seems to be eating (though we’ve seen her do a horrendous job of faking it at least once).
Says reader Emily of the following ad, in which “Wendy” sexualizes a burger on a brioche bun for a drooling male, “I always had a hunch that this chick was some sort of skinny feeder who gets off on watching her friends get fat while she remains skinny. This just confirms it.”
• Achievement in Abuse of Long-Form Advertising: Samsung — “Geared Up”
After years of iPhone dominance in the smartphone market, the Samsung Galaxy series proved that an Android brand could stand out from the crowd to compete. At the same time, the company used this 2:30 ad to demonstrate that it should probably keep its trap shut and just let the product sell itself.
“I had thought about getting a Galaxy Watch,” comments Consumerist reader George. “Then I saw this ad and didn’t want people to assume I was a stalkerish a-hole who hounds an obviously uninterested woman into giving him her phone number.”
• Failed Attempt at Coining a Punny Catchphrase, Electronics Division: Microsoft — “Scroogled”
Getting the public to latch on to your marketing language is the dream of every ad copywriter, but it helps if your attempt at introducing that catchphrase doesn’t result in everyone watching pointing out that your company is just as guilty of the same sketchy practices you’re accusing your competitor of:
• Failed Attempt at Coining a Punny Catchphrase, Food Division: Yoplait — “Swapportunity”
It also helps if your catchphrase isn’t awkward to say and likely to earn blank stares from anyone you attempt to use it on:
• Meet the New Flo Award for Loudmouth Spokesperson Who Needs to Just Back Off a Bit: The Phillips Colon Health Lady
Because there is nothing more appropriate than loudly speaking about intestinal distress on crowded buses, planes and other public places, Phillips introduces the Colon Health Lady.
Says Consumerist reader Todd, “I think this might be a good commercial because I feel sick to my stomach after every time the Colon Health Lady pops up.”
• The “This is Why We Hate You” Award: Lexus — “Red Ribbon 2013″
In 200 years, future post-apocalyptic generations will tell tales of the decadent 21st century, in which people in gaudily huge houses not only presented each other with overpriced Toyotas, but also topped these deluxe wheels with a tacky red ribbon.
While Lexus’s red-ribbon ads have long earned boos from the public, this year’s Christmas commercial took the notion to new aspirational heights, with the impossibly handsome couple handcrafting a sparkling red ribbon to adorn the three gifted vehicles (yes, three cars) parked outside a mammoth house that might be an appropriate size for the Earl of Grantham:
MUSIC CATEGORIES
• The “We Just Discovered Auto-Tune” Award: (TIE) Yoplait & McDonald’s
The yogurty yahoos at Yoplait earn their second award with this ad that had to have been made back in 2005 when Auto-Tune and crowd-sourced advertising was still in vogue:
Then there’s this McDonald’s ad featuring future Bieber-esque burnout Austin Mahone, demonstrating that he can neither sing nor stay focused on the task at hand:
• The Mute Button Award for Worst Original Jingle: WeBuyAnyCar.com
For years, daytime TV viewers have been scrambling for the remote every time they sense this commercial is about to launch into one of the most ear-destroying songs you’ll never be able to get out of your head. Today, it finally gets the recognition it truly deserves:
• The “Mangle That Tune” Award for Horrid Cover Versions of Existing Songs: Party City
Every big party season, the folks at Party City cue up some already overplayed song, change the lyric to be more party-centric, then unleash it upon the public until TV viewers’ minds turn into brain pudding.
The most cited example of Party City’s crimes against the eardrums was this tortured version of the Mambo No. 5:
Thanks to everyone who helped by nominating the ads they loathed the most in 2013, even those whose nominations didn’t make the cut. There were many, many more ads that deserved demerits this year and we wish we had time to call them all out. But if we did that, we’d be here until next New Year’s Eve.
Americans’ confidence in the nation’s economy stood at -21 at the beginning of 2013 and has managed to show a modest improvement to -17, according to the latest survey by Gallup. The confidence survey ...
First things first: If you don’t like naughty language (think: word for genitalia that rhymes with “clock”), you’re probably not going to want to read Patton Oswalt’s Twitter response to a company asking if he’d like to get paid for tweeting about popular brands. If you don’t mind a bit of potty talk and some rather cringeworthy topics, then you’re gonna love everything the comedian said. Because it’s relentlessly harsh and awesome and happy new year to us all.
While of course, there are many celebrities who will tweet about this, that and the other thing for a buck, Oswalt is not one of those gleeful endorsers — something anyone who is even vaguely familiar with the comedian would know or could discover with a quick search of his past work.
So why would a company solicit him to do just that, and on Twitter where everyone can see it, no less? Shrug. There is no reason, but it happened.
First came the tweet from a company called Brander Influencers (via Splitsider):
@pattonoswalt I'd love to invite you to get paid to tweet for awesome brands targeted at comedians and comedy fans! DM us!—
That’s all it took for Oswalt to start tearing down a merry path to ridicule with the below tweets, until he finally took mercy on the company and ended his tirade of hilarity. Again, be warned that there is some NSFW language and other things that might make some people uncomfortable.
.@BA_Influencers Can we cut out the middleman and you guys just take a big, wet shit right on my soul? Might save time.—
Isn’t it a good thing when you get a bonus item with your lunch? Not when that bonus item is a dead, uncooked frog hanging out in the middle of the bowl. That’s what a Wall Street Journal staffer allegedly found in her bowl at a Manhattan Pret-a-Manger. It was a tuna salad. Not a frog salad. We cannot emphasize this enough.
Here at Consumerist, we noticed a strange uptick in reports of dead animals in packaged vegetables. Most of these animals were frogs, and we came to call all animals included in food that weren’t meant to be there, from rats to insects to chunks of snake, “free frogs.”
This is going to happen when we eat organic greens, fresh from the field. We get it. Sometimes it’s hard to accept the dual nature of our food, as plants that once grew outside and animals that once walked around. Maybe because when we’re paying premium prices for someone to clean and chop those vegetables and make a salad for us, we expect that salad to be free of dead animals that we didn’t order.
Wall Street Journal colleagues blogged and Instagrammed about the free frog, reporting that the diner who found it was “pretty shaken.”
Guys, to be clear, it wasn't my salad. It was a colleague's, and she was pretty shaken, understandably!—
Pret A Manger contacted Gothamist to let them know that they’re taking the froggy very seriously.
At Pret A Manger, we take issues like this very seriously. Our lettuce is sourced from farms that do not use any pesticides on its produce, therefore organic matter does very rarely manage to pass through our production process. We are currently looking into this issue to make every effort that this does not happen again.
By Megha Rajagopalan BEIJING (Reuters) - An eccentric Chinese recycling magnate said on Tuesday he was preparing to open negotiations to buy the New York Times Co . Chen Guangbiao, a well-known philanthropist, is something of a celebrity in China. He said he expected to discuss the matter on January 5, when he is due to meet a "leading shareholder" in New York. Donald Trump, the real estate magnate who sells Trump-branded bottled spring water, was trying to figure out a way to buy the Times earlier this year, according to a report in New York magazine, which said that details of Trump's plans were "scant." It is unlikely that the Times, which has long been controlled by the Ochs-Sulzberger family, would sell to Chen.
Drivers fueled up for the lowest price in three years during 2013, according to AAA, and even lower prices are expected in 2014. The motorist group reports that the national average price for a gallon ...
In this world, there are no guarantees. But everyone has the right to have their own name, and one Hawaii woman believes that includes the right to include her entire 36-character surname on her driver’s license. She just won the fight to include all 35 letters and one character with a new change to the state’s policy, so she can be loud and proud about its length. Teaching people to pronounce it is a whole other matter. [via the Associated Press]
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Theflyonthewall.com provides the latest financial news as it breaks. Known as a leader in market intelligence, The Fly's real-time, streaming news feed keeps individual investors, professional money managers, active traders, and corporate executives informed on what's moving stocks. Sign up for a free trial at theflyonthewall.com to see what Wall Street is buzzing about.
Theflyonthewall.com provides the latest financial news as it breaks. Known as a leader in market intelligence, The Fly's real-time, streaming news feed keeps individual investors, professional money managers, active traders, and corporate executives informed on what's moving stocks. Sign up for a free trial at theflyonthewall.com to see what Wall Street is buzzing about.
China will continue prudent monetary policy and keep policy consistent and stable in 2014, central bank Governor Zhou Xiaochuan said on Tuesday. Zhou reiterated in a new year message that China will push ...
China's quest to solve its $3 trillion-and-growing public debt problem by starting a domestic municipal bond market hinges on the one thing its officials are most afraid of: transparency. As markets absorb the results of China's latest audit of its state finances, Beijing's long-standing vow to develop a municipal bond market to curtail rapid growth in other types of hidden public debt will take centerstage once more. By letting local governments sell bonds for cash, China wants to rely on nimble markets rather than inflexible regulations to keep spendthrift units in check. A bond market is the centerpiece in China's blueprint to mop up fiscal troubles and keep its economy growing at an even pace, giving it needed room to start other bold financial reforms.
After years of being overshadowed at home and practically unheard of overseas, Japan's whisky distilleries are expanding capacity as their malts become serious contenders against Scottish and Irish brands. Exports are booming at Nikka, owned by Asahi Group Holdings, and at Suntory Holdings, which is ramping up production at its Yamazaki distillery for the first time in 45 years as domestic sales recover from a prolonged slump. But some are concerned the distilleries may be caught out if the enthusiasm for whisky changes as it did in the 1990s, when several smaller players shut down as Japanese drinkers shifted to beer, clear spirits and imported liquor. The difficulty is that you're making it today for 20 or 50 years' time," said Marcin Miller, an importer of small-batch Japanese whisky with his British company Number One Drinks.
Theflyonthewall.com provides the latest financial news as it breaks. Known as a leader in market intelligence, The Fly's real-time, streaming news feed keeps individual investors, professional money managers, active traders, and corporate executives informed on what's moving stocks. Sign up for a free trial at theflyonthewall.com to see what Wall Street is buzzing about.
China suspended imports of U.S. drugmaker Pfizer Inc's AIDS-related drug Diflucan on Tuesday, citing a problem with late paperwork, the country's food and drug watchdog said in a statement on its website. Pfizer, the largest drugmaker in the United States, contravened Chinese law when one of its France-based factories failed to submit a supplementary application on time, the China Food and Drug Administration (FDA) said in the statement. With the country's healthcare spending forecast to nearly triple to $1 trillion by 2020 from $357 billion in 2011, according to consulting firm McKinsey, China is a magnet for makers of medicines and medical equipment. Pfizer has taken steps to resolve the issue and is working with China's FDA to ensure its products comply with Chinese law, it said in a statement on its Chinese-language website.
China may buy more Iranian oil next year as a state trader is negotiating a new light crude contract that could raise imports from Tehran to levels not seen since tough Western sanctions were imposed in 2012, running the risk of upsetting Washington. An increase would go against the spirit of November's breakthrough agreement relaxing some of the stringent measures slapped on Iran two years ago over its nuclear program. The November deal between Tehran and the group known as P5+1 -- made up of the United States and five other global powers -- paused efforts to reduce Iran's crude sales but required buyers to hold to "current average amounts" of Iranian oil imports. That agreement was seen as a reward for a softer diplomatic tone from Tehran that was forced, some U.S. officials and lawmakers say, by U.S. and EU sanctions that slashed Iran's oil exports by more than half to about 1 million barrels per day (bpd) and cost it as much as $80 billion in lost revenue.
When Deutsche Telekom's new Chief Executive Tim Hoettges takes office on Wednesday, a revival of mergers and acquisitions in the sector and a dramatically changing competitive landscape in Germany will pose his biggest challenges. Hoettges will draw on such experience to decide how Deutsche Telekom, Europe's third-largest telco by sales, should navigate consolidation on both sides of the Atlantic and take on a rejuvenated Vodafone in Germany. Born in Solingen, a city in the prosperous eastern state of North Rhine-Westphalia, Hoettges is said to be straightforward, traditional and intense, unlike his long-time friend and outgoing CEO Rene Obermann, who is known for his easy charm. "Hoettges is not known for schmoozing corporate colleagues or politicians," said another banker who worked for him.
(Reuters) - Netflix Inc raised the salary of its Chief Executive Reed Hastings by 50 percent to $6 million for 2014, a regulatory filing showed, as its stock quadrupled in value this year amidst new programming and a growth in subscriber base. Hastings will receive $3 million each in cash and stock options for the year, according to the filing with the U.S. Securities and Exchange Commission made late on Monday. Other top executives including Chief Financial Officer David Wells and Chief Content Officer Ted Sarandos will also get a pay hike in 2014, it said. In November, Netflix added four new television series and one miniseries from Disney's Marvel unit, and in December it secured the rights to make new episodes of a spinoff of the "Breaking Bad" television series, available within days to customers in Latin America and Europe, starting in 2014.
The Canadian dollar rose from almost the lowest point in more than three years on bets the currency had fallen too far, too fast after the Federal Reserve announced it would slow its monetary stimulus program.
Canada’s currency was still headed for a yearly decline against its U.S. peer as the Fed was set to allow borrowing costs rise when it begins reducing bond-buying in January. Both the Fed and the Bank of Canada are forecast to keep benchmark short-term interest rates unchanged through the second half of 2015, according to Bloomberg economist surveys. Speculators pared bets against the loonie from a seven-month high.
“We’re seeing some marginal recovery in the Canadian dollar, primarily on rebalancing and position squaring,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada, by phone from Toronto. “One can make an argument that if risk continues to take a bid, then I think some of those drivers that we’ve seen a few years ago will likely come back into the forefront and could push the Canadian dollar stronger as a risk-related currency.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Global stocks are closing out 2013 sitting on sizable gains courtesy of super-easy monetary policies and an improving economic outlook, though some emerging markets have less to crow about as funds return ...
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Isn’t it a good thing when you get a bonus item with your lunch? Not when that bonus item is a dead, uncooked frog hanging out in the middle of the bowl. That’s what a Wall Street Journal staffer allegedly found in her bowl at a Manhattan Pret-a-Manger. It was a tuna salad. Not a frog salad. We cannot emphasize this enough. 
