Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every dayin the early am at GEI News (membership not required for access to "The Early Bird".).
'Let them sell their summer homes': NYC pension dumps hedge funds (Reuters) New York City's largest public pension is exiting all hedge fund investments in the latest sign that the $4 trillion public pension sector is losing patience with these often secretive portfolios at a time of poor performance and high fees. The board of the New York City Employees Retirement System (NYCERS) voted to leave blue chip firms such as Brevan Howard and D.E. Shaw after their consultants said they can reach their targeted investment returns with less risky funds. The move by the fund, which had $51.2 billion in assets as of Jan. 31, follows a similar actions by the California Public Employees' Retirement System (Calpers), the nation's largest public pension fund, and public pensions in Illinois.
Miami real estate is melting down (CNBC) The Miami real estate slowdown is becoming a meltdown — with the most expensive areas getting hit hardest. The number of sales and prices in posh Miami Beach — home to many of the city's most expensive and highest-profile properties — fell during the first quarter, according to a new report. Meanwhile, inventory soared by roughly a third compared with the prior-year quarter.
Revenue Down? No Problem: Bank Stocks Climb With Cost Cuts (Bloomberg) Banks found a way to please investors when they couldn’t increase revenue: cut pay, fire employees and shut branches. JPMorgan Chase & Co. and Bank of America Corp. led financial stocks higher this week after the two biggest U.S. lenders reported reductions in first-quarter expenses that beat analysts’ estimates. Costs and the number of employees rose at Wells Fargo & Co., the worst performer Thursday among the largest U.S. banks.
IMF urges shake-up of Greek bailout (Financial Times) Last year’s deal on an €86bn bailout to prevent Greece from leaving the eurozone may need to be completely renegotiated with more realistic fiscal targets for the International Monetary Fund to take part in the rescue, its chief has warned. Christine Lagarde said that forcing Athens to achieve the demanding budget surplus targets written into the bailout well into the future is “highly unrealistic”. High quality global journalism requires investment. Her statements are a clear sign that Ms Lagarde is now confronting the possibility of pulling the IMF out of the Greek rescue after nearly six years during which the fund’s reputation has taken a battering. Although Athens and its eurozone partners agreed to a third bailout in July, the IMF has not yet signed up. Germany has repeatedly warned it may no longer be able to support the deal if the IMF quits. Econintersect: The IMF is merely stating what has been obvious but vigorously denied by the EU for several years.
Kerry: Shooting down Russia jets 'would have been justified' (BBC News) The US military would have been within its rights to shoot down Russian aircraft that flew close to one of its warships in the Baltic Sea, Secretary of State John Kerry says. Two Russian jets flew within meters of the ship on Monday, US officials said. Russia's defense ministry said the Su-24 fighter jets "turned away in observance of all safety measures" after observing the USS Donald Cook. Mr Kerry criticized the gesture and said contact had been made with Moscow.
Putin blasts Panama Papers 'provocation,' soothes crisis-hit Russians (Reuters) Vladimir Putin on Thursday dismissed media reports that billions of dollars in Panama offshore accounts might be linked to him as a U.S.-backed "provocation", as he told ordinary Russians that the country's economic crisis will ease next year. He also made critical remarks aimed at Goldman Sachs.
Strong quake kills 2, injures 45 in Japan (Associated Press, MSN News) At least two people were killed and 45 injured by a magnitude-6.5 earthquake that knocked down houses and buckled roads in southern Japan on Thursday night. Both victims are from the hardest-hit town of Mashiki, about 15 kilometers (9 miles) east of Kumamoto city on the island of Kyushu, said Kumamoto prefecture disaster management official Takayuki Matsushita. Earlier, Japanese Red Cross Kumamoto Hospital said it had admitted or treated 45 people, including five with serious injuries. The quake struck at 9:26 p.m. at a depth of 11 kilometers (7 miles) near Kumamoto city on the island of Kyushu, the Japan Meteorological Agency said. There was no tsunami risk.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
CITs gaining ground in 401(k) plans (Employee Benefit News) Collective investment trusts, also known as collective trust funds, have been gaining traction over the past decade, particularly as part of target-date funds included in 401(k) plans. Collective trusts are very similar to mutual funds in that they use the same strategy but they aren’t saddled with some of the same expensive marketing requirements because they aren’t overseen by the Securities and Exchange Commission. Collective trusts are only offered to ERISA-qualified 401(k) plans, according to Jake Gilliam, senior multi-asset class portfolio strategist for Charles Schwab Investment Management. Charles Schwab has been offering target-date funds in a collective trust format since the early 2000s.
Meb Faber’s Radical Dividend Investing Strategy: Avoid Dividend Stocks (ThinkAdvisor) Here’s an unorthodox investing strategy that’s super tax-efficient and could boost returns by nearly 50%: Avoid dividend stocks to improve “dividend investing.” Really. Research scientist-cum-money manager Meb Faber – the witty, popular blogger with an independent and systematic approach to investing – in early March emerged with the idea as a way to increase returns – and reduce taxes. With it, he is questioning one of the most hallowed strategies of investing. But sure enough, Faber’s research found that, by removing the dividend and using a value approach instead, investors can add another 50 to 100 basis points to after-tax returns, he told ThinkAdvisor in an interview.
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