This column highlights the most interesting and useful business and financial commentary from around the Web each day. Use our comments section to post your own suggestions for blog content that you've read or written.
The Wall Street Journal: Real Time China Report
Link: Apple Unveils Raft of New Features Aimed at China
“If Chinese Apple
(AAPL) fans once felt neglected, Apple appears to be making up for it now.
“At its Worldwide Developers Conference in San Francisco on Monday, the consumer electronics maker unveiled a host of upcoming features for its operating systems specifically tailored to Chinese users, including integration with Chinese Internet services – including popular microblogging site Sina Weibo, search engine Baidu, and video sites Youku and Tudou – as well as easier input for emoticons and Chinese pinyin, the system used in China for spelling Chinese words in Roman letters.”
Link: Watch Out Asset Managers, Hedge Funds Will Top $5 Trillion By Taking Your Clients
“In just five years, the hedge fund industry will double in size to a staggering $5.1 trillion in assets.
“That’s a huge jump considering hedge fund performance has been anything but impressive since 2011. Hedge funds trailed the S&P 500 (^GSPC) in the first four months of 2012 returning 5% versus a 11.2% gain for the S&P 500.
“Despite the poor performance of late a new report from Citi shows that the hedge fund industry will jump from its current $2.1 trillion to $5.1 trillion by 2016. By comparison, the US mutual fund industry
has $13 trillion in assets; and that’s an industry open to retail investors rather than just accredited investors hedge funds are limited to.”
Financial Times: Alphaville
Link: Banks seek to offload risk on insurers
“In Tuesday’s FT, Brooke Masters reported
on a rather novel approach that some banks are trying to take in order to reduce their capital requirements. The trick is to reduce the predicted loss that would be experienced if a borrower were to default. This is effectively done by getting an insurer to guarantee the future value of the collateral held as security for the loan.
"The collateral in question is, however, no ordinary collateral. It’s intangible, like patents, for example.”
All Things D
Link: How Garmin Failed to See the iPhone Threat
“I laid out an even stronger case that the mobile phone represented a long-term threat to his businesses. He was unswayed. Phones were a commodity, low-margin market, and phone manufacturers could never obtain the expertise in mapping and navigation that Garmin
(GRMN) had worked so hard to create.
“I was sincerely surprised at how readily an engineer as smart and visionary as Kao could dismiss the apparent trajectory that mobile phones were so clearly already on by 2003. Moore’s law, I reasoned, applied just as much to phones as it did to traditional computers. Just a few years would yield huge advances in processing power even on the smaller processors put in phones, thus giving them the ability to do much more than they could today.”
Link: Pimco Reports First Treasury Holding Increase In 2012, First Duration Increase Since October 2011
“Overnight, Pimco's flagship Total Return Fund posted its monthly update, with several notable highlights. First, total holdings in the fund rose to a record $260.7 billion, a $2 billion increase over April. Next, following months of consecutive reduction in the firm's Treasury holdings, the TRF reported its first TSY increase, rising from 31% to 35%, a modest number historically, but definitely a change in trend. It also appears that Gross has had his fill of MBS, which as we all know too well by know, is how he plans on frontrunning the Fed's next QE episode.”
No positions in stocks mentioned.