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Daily Scan: Asia extends global rally; VW scandal widens
<p>November 4</p> <p>Asia shares remained in the green until the final bell today extending a global rally. In Japan the Nikkei rose 1.3% following Tuesday's holiday, boosted by a Japan Post's strong trading debut. It is the country's  biggest privatization in decades. China also saw sharp gains  after Zhou Xiaochuan, head of the People’s Bank of China, hinted that the Shenzhen-Hong Kong Connect programme, which will give global investor freer access to mainland shares, could begin this year.</p> <p>Over in Europe Volkswagen shares plunged 8.4%  after the car maker said its emissions-testing scandal had widened to encompass a broader set of infractions affecting about 800,000 more cars potentially costing an extra $2 billion. The Stoxx Europe 600 was 0.6% higher in early trade.</p> <p>Here is what else you need to know:</p> <p>Japan Post, in biggest IPO of year, rockets 26%. Following its long-awaited and successful stock market debut, Japan Post Bank says it will use its giant pool of deposits to become a more aggressive international investor, outlining plans to push more of its $500 billion investment fund towards global risk assets. The $11.9 billion offering was the biggest since the $25 billion Alibaba IPO in 2014. Financial Times (paywall)/ AlJazeera</p> <p>ASEAN stumbles on South China Sea row. South East Asian defense ministers meeting in Malaysia have failed to agree on a closing statement for their summit, amid a row over Chinese activity in the South China Sea. BBC</p> <p>China confirms historic meeting with Taiwan leader. President Xi Jinping is set to meet Taiwanese President Ma Ying-jeou in Singapore this Saturday, Beijing confirmed through its Xinhua news agency. The tete-a-tete would be the first for the  leaders from either side of the Taiwan Strait since 1949. Taiwanese are already planning a protest. SCMP (paywall)</p> <p>Air bag supplier Takata could pay up to $200 million in fines. The National Highway Traffic Safety Administration says that the Takata air-bags have ruptured, causing seven deaths and injuring almost 100 others in the U.S. Takata owes $70 million in fines, and could pay another $130 million if it does not comply, or if the NHTSA finds other safety violations. Reuters</p> <p>HSBC may wait to move headquarters. The European bank has been growing in Asia. In recent years it has been getting pummeled by regulatory violations and fines in the U.S. and Europe. HSBC seems to be edging toward a future in Asia, but says it wants to make sure that that decision makes long term sense. U.S. News &amp; World Report</p> <p>U.S. Navy admiral tells China that exercises are not a threat. During the first of a three day visit to China, Admiral Harry Harris told Peking University that US naval exercises near territory claimed by China were not “a threat to any nation” but were designed to defend freedom of navigation in international waters. </p>
Bill Gross says its time for the Fed to turn on 'Operation Switch'
<p>Forget 2012's "Operation Twist," it's time for "Operation Switch," says Bill Gross in his latest investment outlook. Central banks need to raise their inflation targets to benefit the markets, he says. The Fed needs to produce a steeper yield curve to allow businesses and savers to increase their profit margins. Gross explains:<br /> I propose an “Operation Switch”. Instead of 2012’s “Operation Twist”, which sold 2-5 year notes and reinvested the proceeds in longer dated Treasuries now resting in their portfolio, the Fed should do just the reverse. After all, the twist did nothing to improve YOY GDP growth – it may in fact have lowered it as the above argument claims – dropping GDP in the 4th quarter of 2013 to .9% YOY following the “Twist” in 2012. The Fed now holds upwards of $2 trillion longer dated Treasuries and mortgages that can be “switched” into 2-5 year paper, steepening the yield curve and benefiting savers, liability-based businesses, and the economy itself. But they won’t, you know. Yellen and Draghi believe in the Taylor model and the Phillips curve. Gresham’s law will be found in the history books, but his corollary has little chance of making it into future economic textbooks. The result will likely be a continued imbalance between savings and investment, a yield curve too flat to support historic business models, and an anemic 1-2% rate of real economic growth in even the most robust developed countries.<br /> &nbsp;</p>
Learn from the book of GRONKonomics
Lifestyle
<p>Rob Gronkowski is a stud on the football field, and in financial advising.</p> <p>The 26-year-old New England Patriots star hasn't spent a penny of his NFL paychecks, reports CBS. The paycheck money, which totals more than $16.3 million from five seasons, goes straight into his savings account, while the Gronk lives off his endorsement money. With his notorious frat-boy lifestyle, that shouldn't be much of a financial struggle. Now Gronkowski is teaming up with Capital One to share his personal finance tips with fans through his GRONKonomics program.</p> <p>Through his social media accounts and Capital One Gronkowski encourages fans to set short-term goals and try automatic transfers to savings accounts. It's all about financial fitness he says.</p> <p>Who wouldn't take financial advice from the Gronk?<br /> Photo: WEBN-TV</p>
12 tips from Jordan Belfort, the ‘Wolf of Wall Street’
Lifestyle
<p>&nbsp;</p> <p>We’ve all seen the movie "Wolf of Wall Street," featuring Leonardo DiCaprio as the infamous stock broker Jordan Belfort. Some of us may have even seen the 1987  film, "Wall Street," starring Michael Douglas as Gordon Gecko, another character willing to do anything to get to the top of the stockbroker game -- even if it means breaking some laws. But how many of you realize that you can actually learn from these bad guys? The advice we glean, however, is all legal and fair game. Just remember – no insider trading, says Finbuzz.</p> <p> Keep up the tone of a conversation. Demonstrate confidence while selling. Try to keep the intrigue and spark the customer’s interest.<br /> During the first four seconds of a meeting or a call, you should stay especially focused to show your intellect, enthusiasm, and expertise.<br /> Keep in mind the “do not like – really like” information on a scale of 0 to 10. The customer uses this scale to evaluate three factors – you, your company, and the product.<br /> Consider the “decision-making barrier.” Sell your vision of a more positive future! Keep in mind the fact that people fall into two groups. It is very easy to sell anything to the first group, and impossible to the second.<br /> Also keep in mind the “payment threshold” or the “pain threshold.” The customer is more likely to make a purchase once it’s passed. Your task is to maintain the customer and convince him that he/she really needs the deal.<br /> Use the fact that people do not buy logic. People buy emotions.<br /> Sales manager needs to know what to say when he/she hears: “I’ll think about it.” That’s when the sale itself begins.<br /> If you ask, “When shall I call back?” you are deviating from your goal. You should go back a few steps and once again comment on your offer.<br /> Having recognized the profound problems that the client experiences, you will dramatically increase the chances of successfully completing the transaction.<br /> It is important to collect information to better understand your client and their needs.<br /> People fall into four categories: ­20% of people are ready to buy; 30%­ are willing to buy, but not now; 30% are curious, and 20% are not ready. Your task is to make 30% more people joi­n the first group of those who are eager­ to buy.<br /> You should be able to explain more than once that your product is stunning.</p> <p>Photo: FinBuzz</p>
Daily Scan: China, Taiwan to meet for first time in 66 years; car sales on record pace
<p>&nbsp;</p> <p>Updated throughout the day</p> <p>November 3</p> <p>Stocks trimmed late afternoon gains Tuesday, but still savored the run-up in the energy sector -- which rallied on the prospect of less pumping in troubled Libya and Brazil. West Texas Intermediate crude surged 3.6% to $47.79. The Dow Jones Industrial Average ended 0.50% higher at 17,918.15 while the S&amp;P 500 rose 0.27% to 2,109.  Meanwhile, the 10-year U.S. Treasury sank 12/32 to yield 2.213%, the highest in more than a month. Bond traders are getting antsy about a rate hike -- strong auto sales are probably making them surmise that a rate liftoff in December is becoming likelier than ever. They will be keeping a close eye on Wednesday's ADP private jobs report -- a harbinger of the national report on Friday for October.</p> <p>Here’s what else you need to know:</p> <p>China, Taiwan leaders to meet for first time since 1949. Chinese President Xi Jinping will meet Taiwan's President Ma Ying-jeou on Saturday in Singapore, according to a Taiwanese government news agency. Beijing did not make a parallel announcement. The meeting is politically fraught -- if it happens. Many Taiwanese oppose closer ties to the mainland and are already planning protests. Wall Street Journal (paywall)</p> <p>Car sales on track for a record in 2015. Sales are going, vroom,vroom, vroom -- on pace for 18.2 million based on October numbers, which had been expected to fade to less than 18 million on an annualized basis. The sales are surprising given that other areas of consumer spending have weakened of late. Reuters</p> <p>A walk down financial meltdown memory lane. At the depths of the Great Recession, car sales plummeted to 10.4 million. That was 2009. A lifetime ago. Reuters</p> <p>Tesla rallies in after hours despite earnings disappointment. In the third quarter the electric carmaker posted and adjusted loss of $0.58/share, much worse than the analyst expectations of $0.50. But investors took heart that Tesla was optimistic about future deliveries. CNBC</p> <p>Air-bag supplier Takata could pay $200 million in fines. The National Highway Traffic Safety Administration says that the Takata air-bags have ruptured, causing seven deaths and injuring almost 100 others in the U.S. Takata owes $70 million in fines, and could pay another $130 million if it does not comply, or if the NHTSA finds other safety violations. Reuters</p> <p>BlackRock to buy Bank of America's money-market fund unit. BlackRock is buying the $87 billion business to boost its own cash-management business from $285 billion to $372 billion. Reuters</p> <p>HSBC may wait to move headquarters. HSBC says it may need more time to decide if it will move its HQ to Asia. The European bank has been growing in Asia, while getting pummeled by regulation violations and fines in the U.S. and Europe. HSBC seems to be edging toward a future in Asia, but says it wants to make sure that that decision makes long term sense. </p>
Beware the 'murder holes'
<p>The markets are littered with awful investment products, and investors need to beware, writes Josh Brown in his blog "The Reformed Broker." Simon Lack, a friend of Brown and financial professional, explains the problem with non-traded real estate investment trusts, as one example:<br /> "But suppose you run a company that is designed primarily to enrich the sponsors at the expense of the buyers? What if you knew that drawing the interest of research analysts is likely to result in reports that are critical of fees charged to investors, and the conflicts of interest in your business model? Then you would conclude that the higher cost of financing caused by the absence of a public listing is a reasonable price to pay for the higher fees you can charge away from the glare of investment research. Because if there’s no public listing, there are no commissions to be earned from trading in the stock, and no commissions means there is little incentive to produce research coverage."<br /> In this post-financial crisis world, why do investors continue to trust and pour money into investments they don't understand? Is the onus on the investors to do more research, do regulations need to play a role, or should the industry self-regulate such "murder holes," as Brown calls them?<br /> Photo: Mike Mozart</p>
Finance: Which are the highest paying jobs?
<p>Bankers’ salaries have come in for a lot of bad press of late, and the following are the highest in the whole industry.</p> <p>Salary benchmarking site Emolument.com analyzed data collected from 5,400 finance professionals working in the United Kingdom. To those familiar with the finance industry the results may not be particularly surprising, but it may help those driven by financial rewards choose a finance specialism.</p> <p>Certain specialisms pay far more than others at MD level<br /> Although salaries for analysts are fairly consistent across all specialisms, pay packets differ wildly by the time you reach MD level. Those who become MDs in Structuring, Trading and M&amp;A can earn nearly twice as much as those in Fund Management and Institutional Sales.</p> <p>Investment bankers dominate the top spots, with those in Structuring earning over $1,000,000, Trading $928,000 and M&amp;A $879,000. In contrast Fund Managers earn $467,000 and Institutional Sales $507,000.<br /> Analysts in Structuring and Trading earn around 60,000, before their pay skyrockets when they reach MD level. This massive increase is due in part to the fact that bonuses grow significantly as bankers progress through the ranks, with analysts receiving 10-20% of their base salary in bonuses and MDs receiving up to 150% as a bonus.<br /> Graduates should check bonus payments when choosing a specialism</p> <p>This is particularly important for young graduates to consider as they look to decide on an area of finance specialism in which to build a career. At the analyst level it may look as though all specialisms are created equal, but that is certainly not the case later on in your career.</p> <p>“The golden age of bonuses may be well and truly over, with a narrowing pay gap between bankers and other jobs such as asset managers or consultants, bankers are still by far the best paid employees in Europe,”:said Alice Leguay, COO and co-founder at Emolument. “With public perception at an all-time low, the prospect of a fat paycheck probably helps make up for the social stigma of being a banker in our post-2008 world.”</p> <p>Finance as a sector is fairly well remunerated on average, but as the data shows, there are huge discrepancies between different specialisms which should be considered when planning a career path.</p> <p>This article was originally published by ValueWalk. <br /> Photo: </p>
Coming soon to a gas station near you: A car (or smartphone) that pays for your next refill
FinTech
<p>No more fumbling for your wallet or your smartphone.</p> <p>In a new deal inked between FIS and SAP, your car's computer system will be able to pay for your next trip to the gas station.</p> <p>Mobile payments are hot -- but not nearly as widespread as everyone dreams. Acccording to one study, in 2013 only 1% of gas station customers used their mobile phone to pay to fell 'er up.</p> <p>Could this be the tipping point? Perhaps. Think of all those gas stations from coast to coast and spending a tad less time on a cold, rainy night at the gas pump. Sounds pretty compelling.</p> <p>Oh, and if you insist, you can use your smartphone rather than the car to pay.<br /> Photo: loubeat</p>
Square readying IPO prepares to hit the road for Thanksgiving pricing
<p>Square is ready to hit the road. According to unnamed sources at CNBC, the payment app founded by Twitter CEO Jack Dorsey is revving up to price its shares by Thanksgiving week.</p> <p>In a filing with the SEC, Square has said it hopes to raise $275 million. The company raised money last year at a valuation of $6 billion.</p> <p>Square is a favorite among payments mavens and it is ubiquitous among small merchants. But just how it makes money is unclear. It seemed destined for greatness when Starbucks forged a deal with the fledgling company about three years ago. Turns out, Starbucks is a better negotiator than Square, which never got much customer traction for its wallet.  Investors are also concerned about just how much attention Dorsey will be paying to the payments company, which is in a very crowded space.</p> <p>&nbsp;</p>
Junk Bond ETFs: Old black is the new black again
<p>If exchange trade funds inflows are an accurate gauge, market participants have largely scoffed at interest rate concerns this year while pouring billions of new assets into fixed income ETFs. Year-to-date, two bond funds rank among the top 10 asset-gathering ETFs while no bond funds are found among the year's worst outflow offenders.</p> <p>That statistic du jour being bandied about is that bond ETFs listed around the world now have over $500 billion in combined assets under management. Even in what is a tricky environment for bonds and fixed income funds, high-yield corporate bond ETFs are contributing to that growth.</p> <p>To this point in the fourth quarter, four of the top 10 asset-gathering ETFs are bond funds and the leader of that pack is the SPDR Barclays Capital High Yield Bnd ETF ...</p> <p>Full story available on Benzinga.com<br /> Photo: Got Credit</p>