Since the beginning of year, the economic environment exhibits improvement over time. Investors are gaining confidence in economic growth. As a result of swelling personal wealth, people are looking for wealth assets and equity stock market is benefited from rising demand for wealth investment.
The speculative trading portfolio suffers further depreciation as the underlying stocks dive lower in opposite to the rising market. It is a difficult situation for decision. It appears that market is working against the porfolio. There is a painful experience during the financial meltdown period. The portfolio was long in most stocks and short in one stock for hedging. As market fell, the long stocks also fell but the shorted stock shot up more than triple in valuation. It was liquidated near the peak. Currently this stock is only one third of the shorted price, in other words, about one tenth of the liquidation price. If the stock position was held, it would be currently 60% profit rather than 200% loss.
Hot money continues to circulate in the capital market. Market participants should be prepared for turbulence or otherwise ignore short term profit and loss but focused on long term appreciation.
Why Obama Is Wrong and Romney and Ryan Are Right About Taxing the Rich: Glenn Hubbard
"What both Rep. Ryan's and Gov. Romney's plans have in common is the notion of tax reform: broaden base and lower the rates, both corporate and individual," says Glenn Hubbard, Dean of Columbia Business School and
an economic adviser to Romney.
Like nearly all Republicans, Hubbard is adamantly opposed to President Obama budget, which calls for raising the top marginal tax rate to 39.6% from 35% today.
Based on the Simpson-Bowles plan, Reps. Steve LaTourette (R., Ohio) and Jim Cooper (D., Tenn.) proposed a plan to lower marginal tax rates but also eliminate or dramatically limit tax breaks, which typically benefit the wealthiest Americans most.
PIMCO’s Bill Gross: QE3, Inflation, Muted Growth on the Way
Another round (or two) of quantitative easing from the Federal Reserve, muted growth and an end to the 30-year bull run in government bonds.
Gross says long-term interest rates have been rising in recent weeks for two principal reasons. "Yes, inflation is rearing its head. We're seeing that in oil prices and other commodities, and we're seeing it in the numbers," he said. The consumer price index has risen 2.9% in the past 12 months.
Bond holders tend to fear strong growth because it has the potential to ignite inflation and boost interest rates, thus reducing their returns. Gross says that while the economy has improved, it shows no signs of overheating. He believes the U.S. economy is growing at about a 2% annual rate in the first quarter "and probably beyond."
Large Hedge Funds Fared Well in 2011
Hedge funds have endured a rough year. Tumultuous markets. Tighter regulations. An insider trading crackdown.
But despite the lackluster environment, the top managers still took home $14.4 billion in 2011.
Even when returns suffer, the largest hedge funds can collect big paychecks, thanks to the fees they charge pensions, endowments and wealthy individuals to manage money.
The average hedge fund lost 5 percent in 2011, according to Hedge Fund Research Composite Index, which tracks nearly 2,000 portfolios. That compares with a 2 percent gain for S&P 500.
Sun Hung Kai dives as billionaire Kwok brothers arrested
More than $5 billion was wiped off the market value of Sun Hung Kai Properties on Friday, after the billionaire owners of Asia's largest real estate developer were arrested on suspicion of corruption.
Hong Kong's Independent Commission Against Corruption (ICAC) arrested Raymond and Thomas Kwok in the agency's biggest investigation since it was set up in 1974 to root out what was seen as widespread corruption in the government and police.
The arrests on Thursday come just days after Hong Kong elected Beijing-loyalist Leung Chun-ying as its next leader, pledging land for cheaper public housing, and as soaring property prices, the most expensive in the world, have stirred public discontent. Home prices almost doubled in the five years to end-2011, according to real estate broker Knight Frank.
"This is not good for the image of Hong Kong, which used to have a high reputation for integrity," said Joseph Wong, a former senior government official and colleague of Hui. "The impression is that government policies tend to favor the rich tycoons, particularly rich property developers. These sort of cases will only add to the suspicions."
The Kwoks are worth $18.3 billion, according to Forbes magazine, the second-biggest family fortune in Hong Kong after Asia's richest man, Li Ka-shing, founder of rival developer Cheung Kong (Holdings).
Shares in Sun Hung Kai slumped more than 15 percent to 15-week lows when they resumed trading on Friday. The company owns some of the former British colony's largest properties, including its tallest building, the International Commerce Centre that houses Morgan Stanley and the Ritz Carlton.
"This is justice. They're among the biggest, richest men in Hong Kong. The power of the property sector is too strong, but the business-government connection is the same around the world," Terry So, an elderly chauffeur, told Reuters near the Sun Hung Kai Centre.
The South China Morning Post reported that the ICAC was looking into suspected debts of more than HK$100 million ($12.9 million) linked to Hui, and a related, unsecured loan of HK$50 million.
Hui was Chief Secretary under Hong Kong's leader Donald Tsang in 2005-07, a post that would entitle him to government housing. But he chose to stay in his 4,000 square foot Leighton Hill apartment - a pink and tan marble residential tower that overlooks the Happy Valley racecourse and was developed by Sun Hung Kai.
The unfolding scandal has gripped Hong Kong, the world's most densely populated city which was returned to Chinese rule by the British in 1997.
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