Finding Arbitrage Plays in the New Forever Stamp: Buy them now, use them forever. That’s the promise of the U.S. Postal Service’s “Forever” stamp, which went on sale April 14. (Bloomberg)
A safe-money bet? Think Canada: Afraid that the U.S. dollar is in a long-term decline? Want to protect the value of your portfolio over the long term? Looking for bigger gains than you’ll get from loading up on Swiss francs or burying gold bullion in your backyard?
Try Canada. I can’t think of a better place to stash part of a long-term retirement nest egg than in Canadian stocks. I’ll give you three in this column to add to your long-term retirement portfolio after the current sell-off has run its course. (Jubak’s Journal – MSN Money)
Barron’s Round Table: Marc Faber interview: In January you also recommended shorting the 30-year bond. We presume you’re still bearish: Yes, although near-term these bonds are oversold. It is a great error to think that in an economic slowdown, the rate of inflation automatically drops. Don’t tell me your cost of living is increasing only 2% a year.
As for a new idea, I’d try to short the U.S. retailers, excluding Wal-Mart…It won’t do as badly as the rest of the industry. There will come a time when middle-class households exact their revenge and do better relative to the Wall Street crowd. The problem with Wall Street is this: If you take away the fees earned by structured products and investment banking and mergers and acquisitions, there won’t be much left. I admire Wall Street and the banking system, which when faced with collapsing co
mmission rates invested structured products from which to earn so much. But one day it will dawn even on financial institutions, and on state pension funds, that they are paying a high fee for a very large basket of hedge funds. Some hedge funds are superstars. But out of 7,000 hedge funds, not all are superstars. And it’s not just hedge funds. The whole system is geared to taking a lot of money out of the pockets of clients. Where are the customers’ planes? (Barron’s)
Yen Drops to Lowest Versus Dollar Since 2002 on Treasury Yields: The yen fell to the lowest against the dollar since December 2002 and declined against the euro as Treasury yields near the highest in five years encouraged investment outside Japan. Japan’s currency dropped against all of its 16 most active counterparts tracked by Bloomberg on an increase in carry-trade purchases of higher-yielding assets financed by borrowings in the yen. (Bloomberg)
Carry Over: Time Might be Running Out on the Carry Trade: It is amazing how many people follow a strategy that, in theory, does not work. They do so, of course, because practice outranks theory. And the carry trade, the borrowing of low-yielding currencies to buy high-yielding currencies, has worked in practice. (Economist)
Drink Up: LUXEMBOURG glugs more than 15.5 litres of alcohol per person in a year, more than any other country. One explanation is that the duty on alcohol is relatively cheap in the tiny nation, encouraging booze tourism from its more heavily taxed neighbours. No such explanation for the Irish, however, who quaff 13.7 litres a year, according to the World Health Organisation. European countries, with their cultural acc
eptance of alcohol, tend to dominate the top places. In America, where stricter minumum-age requirements apply, the average person drinks 8.6 litres a year. (Economist)
Fat, Glorious Fat, Moves to the Center of the Plate: These are times of bold temptation, as well as prompt surrender, for a carnivorous glutton in New York.
They’re porky times, fatty times, which is to say very good times indeed. Any new logo for the city could justifiably place the Big Apple in the mouth of a spit-roasted pig, and if the health commissioner were really on his toes, he’d draw up a sizable list of restaurants required to hand out pills of Lipitor instead of after-dinner mints. (New York Times)
Wal-Mart theft: $3 billion a year? Shoppers at Wal-Mart stores across America are loading carts with merchandise — maybe a flat-screen TV, a few DVDs or a six-pack of beer — and strolling out without paying. Employees also are helping themselves to goods they haven’t paid for. The hit is likely to rise to more than $3 billion this year for Wal-Mart Stores (WMT, news, msgs), which generated sales of $348.6 billion last year, according to retail consultant Burt Flickinger III. (MSN Money, AP)
The Week magazine has a great briefing about food imports. This is a must-read:
The Dangers of Imported Food: Each month, federal inspectors turn back tons of tainted food imported from abroad, but experts say that far more gets through. How worried should we be about our food supply? (The Week)
F.D.A. Tracked Tainted Drugs, but Trail Went Cold in China: Ten years later it happened again, this time in Panama. Chinese-made diethylene glycol, masquerading as its more expensive chemical cousin glycerin, was mixed into medicine, killing at least 100 people there last year. And recently, Chinese toothpaste containing diethylene glycol was found in the United States and seven other countries, prompting tens of thousands of tubes to be recalled. (NYT)
1,000 Tube of Toothpaste Seized: The Food and Drug Administration earlier this month issued a worldwide alert of toothpaste from China because DEG levels of 1 to 4 percent were found in brands of Chinese toothpaste that the FDA banned June 1. (Pacific Daily News)
The Next Audit Scare: The IRS is planning to Revive Its Random-Audit Program in Hopes of Foiling Tax Cheats; What to do if you’re chosen. (WSJ)
Carried Away: The argument centres on one long-established discrepancy—the gentler tax treatment of capital gains than annual income. Now it is benefiting people in private-equity firms (and to a lesser extent hedge funds), who receive a large part of their pay in the form of “carried interest”—usually 20% of investment gains. In America these are taxed at the 15% capital-gains rate, rather than 35% income tax. In Britain the benefits are even more generous. Those who hold an investment for two years can pay 10% on the gains, compared with a 40% rate of income tax. (Economist)
Rubin, Summers Say Fund Managers Should Pay Higher Tax Rates: Congress should more than double tax rates for many hedge fund managers and private equity partners who classify their pay as capital gains, former Treasury secretaries Robert Rubin and Lawrence Summers said. (Bloomberg)