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Monthly Archives: January 2012

U.S Falls to 47th in Press Freedom Rankings after Occupy Crackdown

By Ellen Connolly

Sweeping protests around the world made it an extremely difficult year for the media, and tested journalists as never before, the annual report into press freedom reveals.

The annual report by Reporters Without Borders has been released, showing the United States fell 27 points on the list due to the many arrests of journalists covering Occupy Wall Street protests.

The slide in the United States places it just behind Comoros and Taiwan in a group with Argentina and Romania.

Read the rest here.

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McDonald’s drops ‘pink slime’ ingredient from beef

McDonald’s (MCD -0.49%) clientele can finally rest easy, as “dog food” is coming off the menu at the Golden Arches.

 

In the wake of an outcry by the celebrity chef Jamie Oliver, McDonald’s said on Thursday said it will stop using ammonium hydroxide, a common ingredient in cleaning solutions that’s dubiously dubbed “pink slime,” in its beef patties. Read More.

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Fitch Downgrades Italy, Spain, Ireland, Belgium, Cyprus and Slovenia

Fitch downgrades Italy, Spain, Ireland, Belgium, Cyprus and Slovenia
Fitch Ratings has today concluded its review of the six eurozone sovereigns it placed on Rating Watch Negative (RWN) on 16 December 2011. The rating actions on the long-term (LT) and short-term (ST) Issuer Default Ratings (IDRs) are as follows: -Belgium LT IDR downgraded to ‘AA’ from ‘AA+’; Negative Outlook; ST IDR affirmed at ‘F1+’ -Cyprus LT IDR downgraded to ‘BBB-‘ from ‘BBB’; Negative Outlook; ST IDR affirmed at ‘F3’ -Ireland LT IDR affirmed at ‘BBB+’; Negative Outlook; ST IDR affirmed at ‘F2’ -Italy LT IDR downgraded to ‘A-‘ from ‘A+’; Negative Outlook; ST IDR downgraded to ‘F2’ from ‘F1’ -Slovenia LT IDR downgraded to ‘A’ from ‘AA-‘; Negative Outlook; ST IDR downgraded to ‘F1’ from ‘F1+’ – Spain LT IDR downgraded ‘A’ from ‘AA-‘; Negative Outlook; ST IDR downgraded to ‘F1’ from ‘F1+’

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$GSVC’s Portfolio of Investments

Bloom Energy Corporation $1,771,335 Secondary marketplace and direct from stockholder Provider of solid oxide fuel cell technology that generates power onsite from a wide variety of fuel sources
Chegg, Inc. $5,999,996 Direct from stockholder Online textbook rental company serving students nationwide
Facebook, Inc. $6,587,500 Secondary marketplace Leading online social network
Gilt Groupe, Inc. $5,499,250 Secondary marketplace and direct from stockholder Online shopping destination offering its members access to discounted prices on merchandise, restaurants and vacations
Groupon, Inc. $2,035,200 Secondary marketplace Online provider of daily coupons for various consumer products
Kno, Inc. $2,250,000 Direct from issuer Provider of education software, digital textbooks and social engagement tools for students
PJB Fund LLC(3) $4,000,000 Direct from borrower Debt investment linked until maturity to the value of Zynga, Inc., a developer of online social games
Serious Energy, Inc. $712,380 Secondary marketplace Products and services to make buildings more energy-efficient
SharesPost, Inc. $2,250,000 Direct from issuer Online marketplace for the exchange of private company equity
Silver Spring Networks, Inc. $1,101,430 Secondary marketplace Hardware, software and services that connect devices on the smart grid
TrueCar, Inc. $1,999,997 Direct from issuer Online automotive research destination
Twitter, Inc. $6,932,493 Secondary marketplace and direct from stockholder Short messaging platform
ZoomSystems $250,000 Direct from stockholder Automated retail vending machines

Recent buys:

Investment Details:

Since the end of the quarter ended September 30, 2011, GSV made new investments in a number of companies, including:

ZocDoc, Inc., a free online service for patients to find and schedule doctor and dentist appointments. ZocDoc’s investors include Khosla Ventures, Bezos Expeditions, DST Global, Founders Fund, Goldman Sachs, and Marc Benioff, Chairman and CEO of Salesforce.com.

Grockit, Inc., a leading social learning game provider. Grockit’s investors include Benchmark Capital, Atlas Venture and Integral Capital Partners.

The Echo Systems Corp., a social analytics and engagement platform that enables brands to extract insights from website visitors, reward their most influential customers and drive more revenue per user.

Control 4, Inc., a leading provider of the operating system for the smart home. Control4 investors include Foundation Capital and Cisco.

The investments completed since September 30th represent approximately $21 million in investments and 30% of GSV Capital’s Net Asset Value

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***TODAY’S DOUBLE DIGIT WINNERS***

No. Ticker % Change
1 SOA 41.00
2 QPSA 31.25
3 RENN 27.16
4 STVI 26.72
5 LEXG.OB 26.15
6 CPHD 25.62
7 FFN 23.35
8 ONSM 21.16
9 CNAM 19.75
10 NLS 18.65
11 SQNS 18.01
12 VHGI.PK 17.75
13 DANG 17.54
14 LSKY 17.35
15 GSVC 16.89
16 AEN 16.57
17 TWER 16.26
18 ELX 15.10
19 AMLN 15.08
20 BCRX 14.52
21 DHT 14.30
22 INVN 14.00
23 INUV 13.89
24 SPMD 13.62
25 TSON 13.43
26 WMS 13.33
27 INFA 13.22
28 YOKU 12.24
29 SINA 12.20
30 RAM 11.78
31 URZ 11.72
32 LNG 11.70
33 DATE 11.41
34 ANX 11.29
35 FSLR 11.24
36 BITA 11.11
37 WEBM 10.96
38 ISS 10.89
39 CMM 10.71
40 RMD 10.58
41 USU 10.43
42 QMM 10.34
43 MCOX 10.32
44 PCRX 10.22
45 JKS 10.06
46 SVVC 9.90

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In Punishing Year for Hedge Funds, Biggest One Thrived

(via NYT DealBook)

 

BY AZAM AHMED
Ray Dalio, the head of Bridgewater Associates, at Davos this week. Bridgewater is bullish this year on gold as a hedge against inflation.Chris Ratcliffe/Bloomberg NewsRay Dalio, the head of Bridgewater Associates, at Davos this week. Bridgewater is bullish this year on gold as a hedge against inflation.

The world’s biggest hedge fund is also one of the best performers.

Bridgewater Associates, which manages nearly $120 billion, posted returns of 23 percent in 2011 — a year when the average hedge fund portfolio lost 5 percent.

Against the backdrop of fear over European debt and stagnant global growth, the hedge fund, led by one of Wall Street’s more enigmatic titans, Ray Dalio, sidestepped the mess. The fund did it with bets on United States Treasuries, German bonds and the Japanese yen, according to people familiar with the firm’s investment strategy, who spoke on condition of anonymity because the information is private.

Such performance adds up. Over the last 20 years, Bridgewater had annualized returns of 14.7 percent, amounting to $50 billion of gains for investors. Over the same period, the Standard & Poor’s index of 500 stocks returned about 8.7 percent a year.

A big chunk of Bridgewater’s gains came in recent years, a volatile period that felled many funds. As the financial crisis wreaked havoc, Bridgewater notched positive, albeit modest, returns in 2008 and 2009. The next year, the firm had gains of 45 percent versus about 10 percent for the average hedge fund.

The firm has managed to post big numbers even as assets have swollen, defying conventional wisdom and industry experience. Investors poured money into Paulson & Company in recent years, after the founder, John A. Paulson, earned billions of dollars betting against subprime mortgages. Assets at Paulson topped $38 billion at the beginning of 2011, but many of his portfolios suffered last year, with one of the main funds losing 50 percent.

Bridgewater has been able to avoid that fate, in part, because it follows a go-anywhere strategy. The fund’s managers assess the political, economic and regulatory environments around the world, and then make bets using commodities, currencies and other assets.

“It’s become a more macro world,” said Charles T. Cassidy of Cambridge Associates, a consulting firm that advises more than 900 investors with more than $3 trillion in overall assets.

This year, Bridgewater is bullish on gold as a hedge against inflation. The managers are said to believe that governments will need to print more money to help reduce mounting sovereign debt, which could hurt the dollar but help gold. Bridgewater is also betting against the Australian dollar and several emerging-market currencies.

The success comes as Bridgewater finds itself under the microscope for its peculiar culture and odd rules. Mr. Dalio, a graduate of Harvard Business School, is a fervent disciple of radical transparency, a set of beliefs that preaches the pursuit of truth at all costs. For instance, midlevel employees can criticize top management if they think a certain market position is foolish.

In an embodiment of his principles, Mr. Dalio wrote a roughly 120-page treatise, called “Principles,” that is part diary, part philosophical musing and part self-help guide. New employees are required to read it, and it is available to the public online. Mr. Dalio, the son of a homemaker and a jazz musician, writes of his poor grades in high school and a subpar ability to remember names or grasp foreign languages.

Bridgewater’s office in Westport, Conn., has a Big Brother vibe, employees say. Overhead videocameras tape employees throughout the day. To root out problematic behavior, employees are subjected to withering critiques from co-workers. These sessions are recorded and, in the interest of transparency, anyone can pull a copy of the video from the hedge fund’s library.

Former employees say that while it can be an intense and unpleasant place to work, the intellectual environment is invigorating. Ideas are tested vigorously for their soundness. And employees are constantly pushed to improve their investment skills, even if that can be painful at times.

In the wake of some negative publicity that portrayed the firm as strange and inflexible, Bridgewater has begun an unofficial image campaign. Last year, Mr. Dalio appeared on CNBC, where he called the reports “a misunderstanding” and said they had “affected employment.”

Bridgewater also began conducting focus groups at Ivy League schools with students bound for Wall Street. Participants in the 90-minute sessions received $100 gift certificates for voicing their opinions on the firm. In true Bridgewater spirit, they were asked to be as honest as possible.

“Bridgewater has done an extremely good job with its culture, where they challenge each other openly to come up with the truth,” said Dick Del Bello, a senior partner at Conifer Group, a brokerage firm and hedge fund administrator. “Their track record over 20 years is pretty compelling.”

Kevin Roose contributed reporting.

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Facebook Said to File for IPO Next Week

Facebook Inc., the largest social- networking site, may file for its initial public offering on Feb. 1 and is close to hiring Morgan Stanley to handle the deal, the Wall Street Journal reported, citing unidentified people. Read More

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EU hates Volcker rule

Yeah yeah, and their latest financial rules would have made trading their own bonds much cheaper than U.S. treasuries.

Read here:

DAVOS, Switzerland—The European Commission will complain to Treasury Secretary Timothy Geithner that proposed U.S. regulations could discourage banks from trading European sovereign bonds, potentially increasing funding costs for the Continent’s governments and worsening its credit crunch.

Michel Barnier, the European commissioner for the internal market, said in an interview that he plans to raise objections with Mr. Geithner next month about the potential impact of the so-called Volcker rule, which would restrict U.S. banks from making bets with their own capital.

“I will talk to Mr. Geithner next month.…We can’t accept extraterritorial consequences or Europe will be tempted to do the same thing,” Mr. Barnier said.

The issue is particularly sensitive because many European countries are struggling to raise funds at affordable rates amid the euro zone’s debt crisis.

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GS: Latest Gingrich logic vacuum

If you listen to everything he says, it will compress your head to a volumeless state.

Read here:

Newt Gingrich took aim at Wall Street and by extension Republican presidential opponent Mitt Romney yesterday as the former U.S. House speaker said he isn’t running for president to “represent Goldman Sachs.”

Yet the investment firm Gingrich derided and the banking industry as a whole stand to gain from his proposals to eliminate the capital gains tax and repeal two financial-sector measures, four analysts said in separate phone interviews.

Gingrich’s tax package, which also calls for a reduction of the personal income and corporate tax rates, would be beneficial to many on Wall Street, including those at Goldman Sachs Group Inc., an investment banking firm based in New York, the analysts said.

“This is negative political rhetoric that’s not based on anything, either his own history or his proposed policies,” said Douglas Holtz-Eakin, an economic policy adviser to Republican presidential candidate John McCain in 2008. “He is proposing a flat, consumption-style tax, which gives incentives for people to use the financial system.”

Gingrich’s comments yesterday are “inconsistent with what he’s proposing,” said Holtz-Eakin, president of the American Action Forum, an anti-tax organization based in Washington. “It’s hard to defend on the logic.”

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Because we’re all eyeing Natty, when to buy?

Read here:

Natural gas has gotten a much needed boost over the last couple weeks, rising over 15% after a catastrophic drop in the last year. The rally came in reaction to Chesapeake Energy’s (CHK) announcement that it was cutting capital expenditures by more than 2/3’s from last year, suggesting lower supplies. In addition, President Obama suggested in his State of the Union address that he’d seek to use more natural gas as a bridge between crude and renewables, suggesting stronger demand.

As econ 101 taught us: less supply + more demand = higher prices. So what’s the trade now that the tape has digested these news items and rallied sharply?

Rich Ilczyszyn, founder of iiTrader.com likes natural gas here and suggests the U.S. Natural Gas fund (UNG) as a way for retail investors to play. “UNG is definitely something I’d take a look at here,” he says in the attached clip, and offers two bullish catalysts to support the idea:

1. The huge downtrend has been accompanied by massive shorts. When shorts are forced to cover it “scoots the market up,” as Ilczyszyn puts it, leading to gains building on gains, particularly when there’s a fundamental basis for the move.

2. It’s a relatively low-risk trade, in his view.

Those who’ve been long natural gas over the last few years may take issue here. To be clea, Ilczyszyn isn’t saying there isn’t danger that the perennial “next big thing” can’t continue it’s trend lower, just that natural gas isn’t going to go to zero, and sees your downside risk that $2.

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Obama decries college costs in Ann Arbor, MI

It’s fitting he gave this speech in Ann Arbor; the birthplace of pointless majors of study.

ANN ARBOR, Mich. (AP) — President Barack Obama called Friday for an overhaul of the higher education financial aid system, warning that colleges and universities that fail to control spiraling tuition costs could lose federal funds.

The election year proposal was also a political appeal to young people and working families, two important voting blocs for Obama. But the initiative faces long odds in Congress, which must approve nearly all aspects of the president’s plan.

Speaking to students at the University of Michigan, Obama said he was “putting colleges on notice” that the era of unabated tuition hikes is over.

“You can’t assume that you’ll just jack up tuition every single year. If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down,” Obama said on the final stop of a three-day post-State of the Union trip to promote components of his economic agenda.

Obama told the largely supportive student audience that the nation’s economic future depended on making sure every American can afford a world-class education.

“In the coming decade, 60 percent of new jobs will require more than a high school diploma,” he said. “Higher education is not a luxury. It’s an economic imperative that every family in America should be able to afford.”

The president first announced the outlines of the financial aid proposal during Tuesday’s State of the Union address. His plan targets what is known as “campus based” aid given to colleges to distribute in areas such as Perkins loans or in work study programs. Of the $142 billion in federal grants and loans distributed in the last school year, about $3 billion went to these programs. His plan calls for increasing that type of aid to $10 billion annually.

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Fitch ushers mass EU downgrades

Italy (A+ to A-), Spain (AA- to A), Ireland (Outlook negative), Cyprus (BBB to BBB-), Belgium (AA+ to AA)

Happy Friday

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Documentary: Speaking Freely With Chalmers Johnson

A wonderful mind opens up to give you a warning message. While highly political, this body of truth and knowledge bears directly upon the markets.

Cheers on your pleb weekend activities.

[youtube://http://www.youtube.com/watch?v=nfJNFSYFmZs 450 300] [youtube://http://www.youtube.com/watch?v=Xa8ImA_wSKI 450 300]

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