New York, Beijing, Geneva

China's New Megacities.

On Tuesday 29 November, Michiel Hulshof gave a lecture at Delft University of Technology in the Netherlands on one of the most fascinating developments of our times: the rise of the Chinese megalopolis and its consequences for China and the rest of the world.

Many people are talking about housing and urbanization in China but only a few have as much background as Mr Hulshof and Mr Roggeveen.

Over the next two decades around 300 million Chinese villagers will move to the city, creating the largest urban society in the world. Cities like Shijiazhuang (9 million inhabitants), Wuhan (10 million) and Chongqing (30 million) are developing at breakneck pace into huge metropolises. In size they rival global cities like Chicago, London and Moscow, but their names are still unknown in the rest of the world.

Journalist Michiel Hulshof and architect Daan Roggeveen recently published “How the City Moved to Mr Sun” about these unexplored megacities.

Some very interesting comments at the end of the lecture about the complaints of the new upper middle class in China.

A welcome background picture amongst the many superficial opinions and short TV documents on this important subject.

One caveat:

You need the Microsoft Silverlight Player to see the lecture.

Submitted by Administrator on Wed, 12/07/2011 - 15:44

Alternative Betas For Equity Investors.

Investments in equities is more than a binary choice between active and passive.

“There is a third option for investors who wish to allocate to equities—non-price-weighted strategy indexes, which offer an alternative and complementary choice. Since the publication of “Fundamental Indexation” in the Financial Analysts Journal, many asset managers and indexers have created a dizzying array of “alternative betas” or “strategy indexes” designed to offer investors passive investment vehicles that are grounded in the hypothesis of market inefficiency. “

Our conclusion: Nobody wants to buy new highs.

But relative strength strategies are delivering excellent results.

Dorsey Wright Money Management has more about this in

Investment Return Factors and Momentum Over Multiple Cycles.

Advisors Perspectives article is here.

Submitted by Administrator on Thu, 11/24/2011 - 12:45

The Hydrofracking Tide

The booming energy business in North America. Hydraulic fracking and oilsands are changing many landscapes.

Some of the world’s biggest energy producers have poured C$123 billion (US$120 billion) into Canada’s oil sands since 1997. The Canadian Energy Research Institute, or CERI, predicts that these companies will pay another C$137 billion by 2020 to tap the Florida-sized region’s unique advantage: rising oil production taking place in a stable democracy that’s close to the massive American market.

The Syncrude Project is a Joint Venture undertaking among Canadian Oil Sands Partnership #1, Imperial Oil Resources, Mocal Energy Limited, Murphy Oil Company Ltd., Nexen Oil Sands Partnership, Sinopec Oil Sands Partnership and Suncor Energy Oil and Gas Partnership, as the project owners, and Syncrude as the project operator. Syncrude’s Mildred Lake facility is located 40 kilometres north of Fort McMurray.

Bloomberg magazine about Alberta, Canada, one of the planet’s most coveted -- and contested -- petroleum hot spots.

Submitted by Administrator on Wed, 11/23/2011 - 17:53

A Closer Look at Corporate Cash Balances In The US.

Jason Voss at the CFA Institute digs into this subject.

Contrary to popular perception US corporations seem to be accumulating cash at a slower rate than profit growth.

Put another way, it appears that U.S. corporations have an excess of cash on their balance sheets if — and only if — you: (1) ignore cash balances from 2007 to 2009; and (2) compare the corporate cash balance in the second quarter of 2011 to those in 2010. Even then, any cash considered “excess” is only $24.2 billion, which is just 1.18% above the actual cash balance of $2,047.3 billion .

The weighted average interest rate for the U.S. corporate liquid assets (shown below) is estimated at 0.51% as of 30 June 2011. Compare this weighted average return to an estimated core consumer price index of 1.7% for 2011. Consequently, the net rate of return on almost $2,000 billion of economic value is –1.19%!

You can find the whole story here. Part 1 Part 2 .

Submitted by Administrator on Wed, 11/23/2011 - 13:53

Correlation Between Energy Use And GDP Growth

The OilDrum asks the question if a decoupling of energy consumption from GDP growth is possible.

Unsurprisingly they come up with a negative answer.

Prior to 2000, world real GDP (based on USDA Economic Research Institute data) was indeed growing faster than energy use, as measured by BP Statistical Data. Since 2000, energy use has grown approximately as fast as world real GDP–increases for both have averaged about 2.5% per year growth. This is not what we have been told to expect.

Why should this “efficiency gain” go away after 2000? Many economists are concerned about energy intensity of GDP and like to publicize the fact that for their country, GDP is rising faster than energy consumption. These indications can be deceiving, however. It is easy to reduce the energy intensity of GDP for an individual country by moving the more energy-intensive manufacturing to a country with higher energy intensity of GDP.

If GDP growth and energy use are closely tied, it will be even more difficult to meet CO2 emission goals than most have expected. Without huge efficiency savings, a reduction in emissions (say, 80% by 2050) is likely to require a similar percentage reduction in world GDP. Because of the huge disparity in real GDP between the developed nations and the developing nations, the majority of this GDP reduction would likely need to come from developed nations. It is difficult to see this happening without economic collapse.

Submitted by Administrator on Tue, 11/22/2011 - 14:20

NASDAQ:Tired Leaders

Submitted by Administrator on Mon, 11/21/2011 - 11:20

Give Me Credit

Submitted by Administrator on Tue, 11/15/2011 - 15:10

The Possible Future Of Science

IFTF's new "Future of Science" forecast, laid out in a new map titled "A Multiverse of Exploration".

Boingboing has the summary .

Submitted by Administrator on Tue, 11/15/2011 - 14:36

The Not So Fine Art of Window Dressing

MF inquiry lays open industry wide practices.

Submitted by Administrator on Fri, 11/04/2011 - 16:20

Paul Volcker Talks

Paul Volcker´s interview at Charlie Rose

Thanks to Cullen Roche at Pragmatic Capitalist for the pointer.

Submitted by Administrator on Wed, 10/26/2011 - 11:02

Recent Technology IPO´s. A Closer Look.

Why certain companies are valued more highly than others in an IPO and over the long run as public companies.

CNN Money Talking tech valuations with Blackstone's Eric McAlpine

Valuation in Tech is driven by growth. Approximately 80% of public sector valuation revenue multiples can be attributed to a company's growth rate and there's an over 90% correlation between earnings multiples and earnings growth.

Submitted by Administrator on Tue, 10/25/2011 - 11:57

US: Bear Market Rally Or Start To A New Bull Market?

The McClellan Market Report sees some positive developments recently.

Submitted by Administrator on Sun, 10/23/2011 - 14:12

The Role Of Energy A Major Factor For The Current Economic Problems?

Dr. Carey King, a research associate at the Jackson School of Geosciences at The University of Texas at Austin tries to answer the question and comes up with a few interesting remarks.Energy quality (measured by EIR) might be a contributing factor in the current recession – another argument for maintaining cheap, abundant energy sources to ensure economic growth.