HfW : How Bloggers Make Money On INSTAGRAM

Source here

"I have an idea if you're open to it," Danielle Bernstein, 22, a personal style blogger who runs We Wore What, wrote me recently.

I'd emailed Bernstein to ask if she'd be open to explaining the business of bloggers being paid by brands to feature their products on Instagram. Most people are probably aware this is going on as they flick through their feeds (#spon), but the money and business practices behind it are inconsistent—and often obscured.

She proposed she'd take me through how she makes money from Instagram, as long as she was the only blogger in the piece. "It's super important who I associate myself with in this industry," she says. "It's not that I don't like other people, but there are some other bloggers that it's random seeming to associate myself with."

Bernstein has 992,000 followers on her Instagram @weworewhat. When she gets to a million, which she predicts will happen in the next 10 to 15 days, she can charge "a good amount more" for sponsored content. "It's a big milestone," she says.

Right now, Bernstein's rate card, through Next Models, sets her range for the cost of a single piece of sponsored content (i.e. one Instagram shot) from $5,000 to $15,000. This rate can go up or down, depending the terms of the deal, such as if a brand wants a long-term commitment or multiple Instagram pictures. "Everything's negotiable," Bernstein says, laughing. "I'm Jewish."

According to experts who spend a significant portion of their days figuring out how brands and so-called creators can play together nicely on Instagram, we're at some kind of mid-point. There are still plenty of products sent out gratis to bloggers with fingers crossed that they'll throw a picture of themselves online using it. Bernstein does this, too, albeit selectively. Milly recently send her an electric blue bag that was too bright for her taste. Bernstein wrote back, "I love this bag, but do you have it in black?"

But there's also just as much contracted—often agent-negotiated—work where the blogger agrees to feature the brand in a certain number of Instagrams, often promising not to put any competitors in the same shot (or even hold off mentioning them for a week or so). Industry estimates say brands spend more than a $1 billion per year on sponsored Instagram posts. Particularly in fashion, "there's a rapidly developing economy on Instagram," says Thomas Rankin, co-founder and CEO of Dash Hudson, a program that lets you make your Instagram posts shoppable. Instagram founder Kevin Systrom even went to Paris Fashion Week, attending Jean Paul Gaultier's couture salon and meeting with Karl Lagerfeld and Louis Vuitton's Nicholas Ghesquière, to learn more about the style bloggers, models, editors, designers, and clothing brands who create such a large portion of content on the photo-sharing site.

Recently, Bernstein's done Instagram-only work for Lancôme and Virgin Hotels. Lancôme had her feature its new foundation, Miracle Cushion, in a picture of her morning routine and as part of her on-the-go makeup bag. For Virgin Hotels, she posed at the opening of the one in Chicago with Virgin's owner Richard Branson. "Last year was definitely my most profitable," she says. "I hate talking about money, but let's just say it's more than I could have ever imagined as a 22 year old. I fully support myself, and it's in the mid-six figures. I save, I invest, I'm trying to be smart about it all and learn as I go."

Bernstein is at the top end of this new Instagram economy, but it's one with a big income gap. On average, if you have hundreds of thousands of followers you can make anywhere from $500 to $5,000 a post, but if you have upwards of 6 million followers, your fee can be $20,000 to $100,000 a shot. "Which is kind of crazy," Rankin says.

Part of what makes the idea crazy that bloggers would be paid five figures for a picture of them doing something like sitting on their couch is that it just looks so casual—which is, of course, the point. Indeed, when Bernstein worked on a campaign for Project Runway, part of her well-paid contracted work was posting pictures of herself sitting on her couch. "I'd say I was watching the show," she says.

In fact, when Rankin approves blogger's Instagrams before they're posted on behalf of a brand, the only negative feedback he gives if he thinks something looks too posed. "It's not an editorial photo," he says. "We're not trying to be in a magazine. We're trying to create a moment."

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HfW: 19 Secrets Your Millionaire Neighbor Won’t Tell You

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The secret to financial freedom.

From time to time we bring you posts from our partners that may not be new but contain advice that bears repeating. Look for these classics on the weekends.

That’s right. Although having a million bucks isn’t as impressive as it once was, it’s still nothing to sneeze at.

In fact, CNBC reports that in 2013 there were 13.2 million millionaires in the United States alone.

That’s a lot of people, people. And the odds are one or two of them are living near you.

Heck, one of them might even be your neighbor. In fact, the odds are very good that it is your neighbor.

But, Len, you don’t know my neighbor. That guy doesn’t look anything like a millionaire.

Well, guess what? Your suburban millionaire neighbor called (oh yeah, we go way back) and the two of us had a nice little chat.

Here’s a few things he shared with me but apparently doesn’t want to tell you. (No offense, I’m sure.)

1. He always spends less than he earns. In fact his mantra is, over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2. He knows that patience is a virtue. The odds are you won’t become a millionaire overnight. If you’re like him, your wealth will be accumulated gradually by diligently saving your money over multiple decades.

3. When you go to his modest three-bed two-bath house, you’re going to be drinking Folgers instead of Starbucks. And if you need a lift, well, you’re going to get a ride in his ten-year-old economy sedan. And if you think that makes him cheap, ask him if he cares. (He doesn’t.)

4. He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

5. He realized early on that money does not buy happiness. If you’re looking for nirvana, you need to focus on attaining financial freedom.

6. He never forgets that financial freedom is a state of mind that comes from being debt free. Best of all, it can be attained regardless of your income level.

7. He knows that getting a second job not only increases the size of your bank account quicker but it also keeps you busy — and being busy makes it difficult to spend what you already have.

8. He understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.


9. He’s a big believer in paying yourself first. Paying yourself first is an essential tenet of personal finance and a great way to build your savings and instill financial discipline.

10. Although it’s possible to get rich if you spend your life making a living doing something you don’t enjoy, he wonders why you do. Life is too short.

11. He knows that failing to plan is the same as planning to fail. He also knows that the few millionaires that reached that milestone without a plan got there only because of dumb luck. It’s not enough to simply declare that you want to be financially free.

12. When it came time to set his savings goals, he wasn’t afraid to think big. Financial success demands that you have a vision that is significantly larger than you can currently deliver upon.

13. Over time, he found out that hard work can often help make up for a lot of financial mistakes — and you will make financial mistakes.

14. He realizes that stuff happens, that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner and can be triggered from multiple sources: the death of the family’s key bread winner, divorce, or disability that leads to a loss of work.

15. He understands that time is an ally of the young. He was fortunate enough to begin saving in his twenties so he could take maximum advantage of the power of compounding growth on his nest egg.

16. He knows that you can’t spend what you don’t see. You should use automatic paycheck deductions to build up your retirement and other savings accounts. As your salary increases you can painlessly increase the size of those deductions.

17. Even though he has a job that he loves, he doesn’t have to work anymore because everything he owns is paid for — and has been for years.

18. He’s not impressed that you drive an over-priced luxury car and live in a McMansion that’s two sizes too big for your family of four.

19. After six months of asking, he finally quit waiting for you to return his pruning shears. He broke down and bought himself a new pair last month. There’s no hard feelings though; he can afford it.

So that’s it. Now you know what your millionaire neighbor won’t tell you.

Oh, and, um, would you be so kind to keep this just between you and me? I’d hate to ruffle anyone’s feathers or cause of any kind of neighborly spat.

Please?

Thanks. You’re a peach.

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HfW : EPF to cover country’s financing gaps?

This was made public in The Sun Daily (here)

PETALING JAYA: Bank of America Merrill Lynch Global Research said there have been concerns whether the Employee Provident Fund (EPF) will be called upon to cover financing gaps due to a wider fiscal deficit, lower Petroliam Nasional Bhd (Petronas) dividends and a cash-strapped 1Malaysia Development Bhd (1MDB).

"Concerns are nevertheless mounting that with a wider fiscal deficit, potentially lower Petronas dividends and a cash-strapped 1MDB, the EPF will be called upon to forsake returns, cease its foreign diversification and cover the financing gaps of government-linked entities," its Asean economist Chua Hak Bin said in a report yesterday.

"That would be a huge setback for the EPF's commendable track record," he added.

Chua highlighted the EPF's omnipresence with funds of RM637 billion (US$174 billion) and accounting for 50% of MGS and 13% of the stock markets.

Rule changes are moreover in favour of increasing contributions and reducing withdrawals.

EPF inflows are a sufficiently large magnitude to provide some support to both the domestic bond and equity market, as foreign portfolio inflows dwindle.

EPF net contribution flow was about RM23 billion in 2014. Total foreign portfolio investment registered a net outflow of RM9.6 billion in 2014, although most of the portfolio outflows were concentrated in Q4 (RM20.6 billion). This was when oil prices collapsed, raising concerns over the impact on the fiscal and current account balances.

Foreign holdings of Malaysian Government Securities (MGS) have however been relatively resilient. While foreign holdings fell RM8.7 billion over July to Dec last year, they have risen some RM6.1 bilion in Jan-Mar this year.

However Chua said, there have also been concerns whether the EPF's heavy presence will depress yields on MGS and boost stock market valuations.

"Despite underperforming, the Kuala Lumpur Composite Index's (KLCI) still trades at about 17 times price-to-earnings ratio, higher than valuations on Singapore, Hong Kong, Thailand or Korea stocks," he said, adding the EPF's captive holding has also reduced the KLCI velocity.

Chua said poor liquidity in turn has hurt trading and investment interest, adding that Malaysia will issue RM5.5 billion of its 5.5-year bonds.

With total investment funds of RM637 billion at the end 2014, EPF is ranked seventh in the world when measured against the size of Malaysia's economy, in which EPF is ranked below Japan, Korea, China and Singapore, but above India and Taiwan.

Meanwhile, as a share of gross domestic product (GDP), Malaysia's EPF is the third largest after Norway and Singapore.

The research house expects EPF's fund inflows will remain large, reflecting both favourable demographics with a rising labor force and wages.

It noted that net EPF contributions increased 28.5% to RM23.3 billion in 2014, about RM1.9 billion per month, while active membership grew 2% last year, over 10% since 2010.

"We expect EPF fund inflows to remain high over the next decade given the growing working-age population and favorable demographics."

EPF's assets grew by 7.9% in 2014, in which it has increased the proportion of risky assets to sustain returns.

Compared to a decade ago, EPF has increased its portfolio share of equities to 42%, while reducing the share of MGS to 26% and money market instruments.

EPF also has increased its foreign allocation significantly to 23%, raising overall returns and reducing over-concentration risk on domestic assets.

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Check out what GST has in store for you!

I believe many have seen this of late. Yeah I know I have been slow in updating my blog of late.

Anyways, this applies to Malaysians effective April 1st 2015.

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Unit Trust Funds - The type of Investment for you

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MANY have looked far and wide for Ms Right (Investment), the one with the sexy, super model looks and outgoing personality (attractive, high double-digit growth and guaranteed returns).

The good news is that Ms Right might actually have been with us all this time, amongst close friends (unit trust funds). Ms Right, however, might not necessarily have the glitzy characteristics; instead we have the humble, charming and loving personality (well diversified, proven track record and consistent returns).

Interested to know how to find Ms Right? Or are we avoiding a relationship with Ms Right because we won’t risk broken hearts (suffering losses)? For the relationship to work, there are some basic ground rules:

1) Know the purpose of your investment. Are you investing because everyone is making good returns and you feel left out? In this case, you might be investing on the wrong basis.

2) Then, establish a timeframe for your investments. Do you need the money in the short to medium term? If yes, then investing might not be for you.

Investment returns can be volatile over shorter periods. However, for the longer term, say four to six years, the returns from investments might very pleasantly surprise you.

3) Next, a proven strategy is essential. For example, dollar cost averaging, putting in regular investments, setting profit and loss target levels. At which point perhaps do we need to realign our portfolio? What about creating a suitable portfolio that caters for the amount of risk you can handle and looking out for opportunities during crisis periods?

4) Lastly, are your investments reviewed periodically? That does not mean daily, weekly or even monthly reviews. A six-monthly review can ensure our investments stay the course and are aligned to our goals.

A successful relationship with Ms Right needs nurturing, commitment, and constant input and feedback.

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10 Things To Consider Before You Hit Retirement

Point 6,7 and 9 are reasons why you need to start investing in mutual funds for long term investment.

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You have been working your whole life, saving for your retirement. Most of us have millions of ideas about what it’ll be like when it finally comes to the moment where we break away from the 9-to-5 rut. However, with a few more years to go before the day finally arrives, it’s time to take serious action, and get things in order for your golden years ahead.

Most of us would want to achieve financial freedom by then and having not to worry about money any further. To ensure everything is in order when your last conventional pay cheque comes your way, here are 10 things you need to do:

1. Decide on your goal

Many a times when we plan for our retirement, we don’t have a clear picture of how we really want to retire. Do we want to retire at a small and quiet village, outside of town, or perhaps stay in a small(ish) condominium in town, where everything is within walking distance?

By this time, with just a few years to your retirement, you should really have a clear idea whether you want to upsize or downsize your lifestyle post-employment.

The first question you ought to ask yourself is what you want after you retire. Travel around the world and eventually, retire at one of the Caribbean islands? Whatever your goal is, you need to align your retirement plan towards achieving it.

2. List down your obligations

Before embarking on your adventure after retirement, you should consider any financial obligations you may have that can adversely affect your finances after employment.

Do you still have dependents (parents or children) you have to support even after you retire? Will your child(ren) still be in college, with hefty tuition fees coming your way every few months?

How about your lifestyle? If you have planned for your retirement optimally, you should not have to downsize your lifestyle too much. The key word here is sustainability. You should have a clear idea of how much you need every month during your retirement, and how long your retirement fund will last.

3. Clear your debt

Ideally, you should have cleared all your debts before you hit retirement. By clearing your debts, you improve your net worth and credit rating which might be helpful should you need to take another loan in the future.

Credit card debts are usually the first priority to be cleared off due to its high interest rates, followed by personal loans and car loans. There has been an ongoing debate on whether home loans should be cleared off sooner than needed for the peace of mind of being debt-free. If you think paying off home loan last is a better idea, perhaps you should look into the option of refinancing your mortgage.

Currently, Malaysia’s base lending rate is at 6.85%. Comparing with the historical rates, it might seem to be a little high too high to refinance your mortgage. But consider this: after retirement, you’ll lose your primary source of income (for some, only source of income) and your ability to take up a new loan diminishes.

If you have to refinance your mortgage by then, banks might quote you a higher rate, require a guarantor, or simply reject your application. Perhaps it might be a good idea to lock in a fixed mortgage rate to avoid being exposed to interest rate volatility in times of economic uncertainty.

4. Preserve your assets

When we are still earning an income, we mostly focus on accumulating assets. However, when retirement hits you, more focus should be put on preserving your existing assets.

A person may own multiple properties and be worth millions of Ringgit, but he or she may not be able to even afford lunch! In finance, two terms arise: solvency is the ability to meet its long-term ( more than two  years) financial obligations, and liquidity is the ability to meet short-term (less than two years) obligations by converting assets quickly into cash.

In other words, how we preserve our assets depends on our ability to sustain our short-term needs (daily expenses and outflow) without needing to liquidate (force sale) our assets. Consolidating your assets by consulting wealth management and financial planning advisories may be a good idea to have clearer view of your current financial health and have more control in monitoring and preserving your assets.

5. Create or update your will

To prevent your family from exploding into those family feuds infamously depicted in Hong Kong soap operas, updating your will (or create one if you don’t have one yet) is essential. Jokes aside, it is important to have estate planning so that you can be assured that your family is being taken care off  in the manner of your preference.

Having a will doesn’t just ensure your hard-earned assets are distributed properly and rightfully, according to your wishes, it also helps your family go through the process quicker and with greater ease. Remember, avoid hassles by having different wills for assets in different countries and jurisdictions.

6. Review your investment portfolio

As you retire, you would require a substantial steady stream of income to replace your previous conventional income that takes care of your daily expenses and other obligations.

As result, your capacity or holding power of your investment is limited. Perhaps toning down your investment appetite from aggressive high capital growth equities to a more conservative and passive, dividend paying funds such as bonds or government securities might be a good idea. Reviewing your risk tolerance is essential to sustain good cash flow and preserve your assets.

Here are some financial mistakes you should avoid before you hit retirement.

 7. Establish passive income

If the retirement you envisioned for yourself is one where you stop working completely, it becomes even more crucial for you to establish at least one source of passive income, which will be your new primary source of income.

As an alternative to your investments, you can also create another stream of income by working part-time or taking up freelance jobs. For those who have years of professional work experience, they can opt for consulting or an advisory role to other firms or institutions – this may not exactly be ‘passive’ but if it’s something you enjoy doing, it wont feel like a job for sure!

Setting up a mamak or a sundry shop as a small business might also be a good idea (seriously, mamaks rarely fail and typically have healthy profit margins).

8. Healthcare

The unfortunate thing with healthcare is that it becomes more expensive the older we get. Most people give up one their medical card due to the exorbitant price they have to pay — especially in view of the diminishing income after retirement.

Therefore, it is important for one to have a clear idea of their health and fitness level before they hit their golden years. Prevention is certainly better than cure.

Find out if you have any medical conditions that may require substantial amount of money to finance, especially when healthcare cost is escalating to the tune of 12% per annum. Maintain your medical card, review the policy to ensure it is adequate, then set up a budget for rainy days, that could include medical emergencies.

9. Withdraw your EPF

Should you withdraw everything or should you withdraw a set amount regularly? Prematurely withdrawing and depleting your EPF, even if you can, may bring adverse effect to your retirement savings. Unless you have a strong reason or solid financial plan to invest elsewhere that could potentially provide better returns, EPF should be remained untouched and used as a last resort as this will be retirement fund  for the next 10 to 20 years.

If you don’t think your EPF savings enough is adequate to outlive your retirement years, you can consider withdrawing some of the money for selected investments.

10. Continue working

Retirement is really just a phase that everyone goes through. According to the Life After Work survey conducted by HSBC, 22% of Malaysians plan to semi-retire because they need to bridge an income shortfall.

Review your retirement savings before your retirement to have an understanding of whether you stand financially post-employment. Will you be able to live comfortably on that savings, or do you need to continue working to generate income for your golden years?

For some, the idea of not doing anything for next one to two decades may not be conceivable at all! However, the point is to plan for your retirement so semi-retirement is an option and not a means to survive.

We need to start retirement planning as early as possible in order to have a comfortable retirement in years to come. However, planning your retirement is not just about saving money religiously, but also about making the right decisions at the right time to boost your savings.

These 10 steps should be done just a few years before you retire. This will still give you some room to make up for any shortfalls.

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Challenging times in Penang

Most of you who might have missed out this article. Here it is below or alternatively the link

THE Penang property sector is expected to see some challenges going forward. Real Estate and Housing Developers’ Association (Rehda, Penang) chairman Datuk Jerry Chan expects another 30% decline in property transactions in 2015 from the 30% drop recorded in 2014.

Chan says: “We expect to see little or no appreciation for high-end condominiums going forward. The mid-range high-rise properties with price tags of RM400,000 to RM500,000 are likely to see appreciation. We also expect to see lower demand for landed residential properties priced between RM3.5mil and RM5mil.”

Another indicator of the bumpy road ahead is the high rejection rate for housing loans, which according to Rehda Penang deputy chief Datuk Toh Chin Leong is 50% for some projects. “You don’t see this three years ago, but it has been happening for the last 18 months,” Toh says.

Notwithstanding the challenges predicted by the association, there are at least 10 residential addresses in Penang where prices have appreciated substantially since 2009, unaffected by the economic uncertainties.

Raine & Horne director Michael Geh says these addresses are not in the premier category, but are sought after because of their pricing, location and facilities.

“They have benefited from the new infrastructure, malls and other amenities that have mushroomed around them. Owners are not speculators and would not give them up unless the offer is good. This is another reason why these properties have appreciated rapidly,” Geh says.

On the island, the five addresses are Springfield Condominium in Sungai Ara, Krystal Suria in Bukit Jambul, Leisure Bay in Tanjung Tokong, Marina Tower in Relau.

In the south-west district, where the Penang International Airport is located, prices of Springfield Condominium, Krystal Suria, and Marina Tower have appreciated between 164% and 233% (see table)

In the north-east district, prices of Leisure Bayand Midlands Condo have appreciated by about 200%.

The second bridge project, announced in 2006, the construction of the Subterranean Penang International Convention and Exhibition Centre in Bayan Baru and the Penang Waterfront Convention Centre next to the Penang Bridge, have helped to boost prices. Both convention centres will be ready this year and 2017 respectively.

On the mainland in central Seberang Prai, the popular addresses are Taman Pauh in Permatang Pauh, Taman Sejahtera in Alma, Putra Bertam in Bertam, and Juru Indah in Juru. In North Seberang Prai, it is Taman Dahlia in Jalan Raja Uda.

Landed terraces in Taman Pauh, Taman Sejahtera, Putra Bertam and Juru Indah have risen between 43% and 60% since 2009.

The second bridge project linking Batu Kawan in South Seberang Prai and Batu Maung in the southern part of the island has driven up property prices located at both ends of the bridge.

Using 2006 as a benchmark, Geh says the price of vacant land has increased to between RM250 per sq ft (psf) and RM300 psf in Batu Maung from RM50 to RM60 psf. “Pricing depends on whether the land has been zoned for agriculture, commercial or residential use,” he says.

Prices for new two to three-storey terraces south of the island start from RM1.2mil, compared with about RM450,000 prior to 2006.

“New condominiums in similar locations are now priced at between RM700,000 and RM800,000, compared with between RM250,000 and RM300,000 prior to 2006, when the bridge was first announced,” he says.

Properties located in the prime locations of central Seberang Prai and south Seberang Prai have also increased significantly.

Henry Butcher Seberang Prai’s associate director Fook Tone Huat says vacant land in the area, especially those in south Seberang Prai where the second bridge is located, are between RM42 and RM60 psf, a huge jump from 2006’s RM8-RM9 psf.

Land prices in central and north Seberang Prai were then between RM20 and RM40 psf, compared with today’s range of between RM50 and RM120 psf. The increase in land prices has translated into higher property prices.

“New landed properties such as double-storey terraced units in south Seberang Prai are now priced between RM360,000 and RM450,000 compared with between RM150,000 and RM200,000 prior to 2006,” Fook says.

Double-storey terraces in prime locations in central and northern Seberang Prai have doubled, from RM200,000-RM270,000 to RM400,000-RM630,000.

“We are also seeing a number of life-style condominium projects being planned in Bukit Mertajam this year with prices between RM300 and RM350 psf,” Fook says.

As for the secondary or sub-sales market, double-storey terraces, depending on location, are priced between RM300,000 and RM600,000.

Aspen Group Holdings Sdn Bhd and PE Land Sdn Bhd’s plans to develop an Ikea store and the RM1bil Penang Designer Village, which also includes a RM200mil premium outlet respectively, will drive up prices further in Seberang Prai, especially those located near the second bridge.

Moving forward, Geh says south-west district properties will benefit from the state government’s plans to transform the Bayan Baru township into an international business process outsourcing (BPO) area. Two multi-storey blocks will replace the current Penang Development Corp headquarters. The 29 and 25-storey blocks will house retail and recreational facilities.

“In the north-east district, the opening of the Gurney Plaza and Gurney Paragon shopping malls respectively in 2001 and 2013 and the increase in food and beverage outlets in the Pulau Tikus and Tanjung Tokong neighbourhoods have boosted prices.

Eastern & Oriental Bhd’s plan to undertake RM25bil worth of residential and commercial projects for the second phase of Seri Tanjung Pinang over the next 20 years is another boon for the island. This involves reclaiming 307ha in Tanjung Tokong.

The first stage of land reclamation is expected to take about 30 months and the development of residential and commercial projects another 10 years. The gross development value is about RM8bil.

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Asian economies downshift, from China to Singapore

PUBLISHED: Jan 2, 2015 

China’s growth engine looks to have ended last year on a flat note as its massive factory sector sputtered in December, though ebbing price pressures also offered scope for more policy stimulus from Beijing and across much of Asia.

The tale was similar from Singapore to South Korea to Indonesia as manufacturers struggled with weak demand, both at home and abroad.

China’s official Purchasing Managers’ Index (PMI) slipped to 50.1 in December from November’s 50.3, its lowest level of the year and just above the 50-point level that is supposed to separate growth from contraction.

There was better news from China’s services sector, which accounts for close to half of the economy, where the PMI edged up to 54.1 in December from November’s 53.9.

Yet many analysts suspect economic growth for all of 2014 will undershoot the government’s 7.5% target, marking the weakest expansion in 24 years.

With factories able to make more than consumers wanted to buy, the pressure was intense to cut prices.

“The price measures show very strong disinflationary forces,” said analysts at Nomura.

“With no inflation pressure, we expect more policy easing in the first quarter, including a 50 basis-point cut in the bank reserve requirement ratio, to shore up domestic demand.”

Disinflation was a feature across much of the region.

India’s PMI showed input prices slumped to a near six-year low, even as overall manufacturing activity picked up to its fastest in two years.

The HSBC PMI, compiled by Markit, rose to 54.5 in December from 53.3, the 14th straight month above the 50-mark that separates growth from contraction.

Yet India’s annual inflation rate has slowed to only 4.38%, the lowest since the government started releasing the data in 2012 and potentially a green light for easing by the Reserve Bank of India (RBI).

“With the disinflationary trend gaining ground, the RBI is expected to find space for some rate cuts in 2015,” said Pranjul Bhandari, chief India economist at HSBC.

In South Korea, consumer prices grew at the slowest clip in more than 15 years in December, opening the door for further rate cuts there.

Its version of the PMI contracted slightly but did show some improvement in December to stand at 49.9, from 49.0 in November.

Indonesia was not even that fortunate as its PMI slipped to 47.6 in December, the lowest since the survey began in April 2011 and a third consecutive month of contraction.

Singapore also disappointed as economic growth slowed more than expected in the fourth quarter and the manufacturing sector contracted in the face of erratic global demand, which could continue to weigh on Asia’s trade-reliant economies well into the new year.

The city-state’s gross domestic product expanded by an annualised 1.6%, well short of the 3% analysts expected and mainly due to a reversal in manufacturing.

“The external demand story remains very lacklustre at this juncture,” said Selena Ling, an economist at Oversea-Chinese Banking Corp, adding that Japan, China and Europe were all slowing down.

“Unlike 2014, when we started on a strong note for the first half and after that the momentum tapered off, we could be starting 2015 on a relatively soft note, especially as people are looking forward to the Fed to normalise policy.”

Asian exporters will get some relief as the US economy shifts into higher gear, though they did not benefit as much from the American recovery in 2014 as they had in the past.

The US Federal Reserve has indicated it will start raising rates from zero later this year as long as the economy continues to improve and unemployment falls further.

The US Institute for Supply Management’s measure of manufacturing is due later on Friday and is expected to show a still strong reading around 57.6 for December.

In contrast, the December PMIs from the eurozone are seen staying subdued, which will only add to pressure for more aggressive action from the European Central Bank (ECB).

In an interview with German financial daily Handelsblatt published today, ECB president Mario Draghi acknowledged the risk that inflation would stay too low for too long.

“We are in technical preparations to adjust the size, speed and compositions of our measures early 2015, should it become necessary to react to a too long period of low inflation,” he said.

“There is unanimity within the Governing Council on this.”

The ECB council meets on Jan 22 and markets are wagering heavily it will finally decide to start buying sovereign debt, a major reason the euro hit 29-month lows today.

Read more here

China Steps In as World's New Bank

Article here

Thanks to China, Christine Lagarde of the International Monetary Fund, Jim Yong Kim of the World Bank and Takehiko Nakao of the Asian Development Bank may no longer have much meaningful work to do.

Beijing's move to bail out Russia, on top of its recent aid for Venezuela and Argentina, signals the death of the post-war Bretton Woods world. It’s also marks the beginning of the end for America's linchpin role in the global economy and Japan's influence in Asia.

What is China's new Asian Infrastructure Investment Bank if not an ADB killer? If Japan, ADB's main benefactor, won't share the presidency with Asian peers, Beijing will just use its deep pockets to overpower it. Lagarde's and Kim’s shops also are looking at a future in which crisis-wracked governments call Beijing before Washington. 

China stepping up its role as lender of last resort upends an economic development game that's been decades in the making. The IMF, World Bank and ADB are bloated, change-adverse institutions.  When Ukraine received a $17 billion IMF-led bailout this year it was about shoring up a geopolitically important economy, not geopolitical blackmail.

Chinese President Xi Jinping's government doesn't care about upgrading economies, the health of tax regimes or central bank reserves. It cares about loyalty. The quid pro quo: For our generous assistance we expect your full support on everything from Taiwan to territorial disputes to deadening the West’s pesky focus on human rights.

This may sound hyperbolic; Russia, Argentina and Venezuela are already at odds with the U.S. and its allies. But what about Europe? In 2011 and 2012, it looked to Beijing to save euro bond markets through massive purchases. Expect more of this dynamic in 2015 should fresh turmoil hit the euro zone, at which time Beijing will expect European leaders to pull their diplomatic punches. What happens if the Federal Reserve’s tapering slams economies from India to Indonesia and governments look to China for help? Why would Cambodia, Laos or Vietnam bother with the IMF’s conditions when China writes big checks with few strings attached?

Beijing’s $24 billion currency swap program to help Russia is a sign of things to come. Russia, it's often said, is too nuclear to fail. As Moscow weathers the worst crisis since the 1998 default, it’s tempting to view China as a good global citizen. But Beijing is just enabling President Vladimir Putin, who’s now under zero pressure to diversify his economy away from oil. The same goes for China’s $2.3 billion currency swap with Argentina and its $4 billion loan to Venezuela. In the Chinese century, bad behavior has its rewards.

If ever there were a time for President Barack Obama to accelerate his "pivot" to Asia it's now. There's plenty to worry about as China tosses money at rogue governments like Sudan and Zimbabwe. But there’s also lots at stake for Asia's budding democracies. The so-called Washington consensus on economic policies isn't perfect, but is Beijing's model of autocratic state capitalism with scant press freedom really a better option? With China becoming Asia's sugar daddy, the temptation in, say, Myanmar might be to avoid the difficult process of creating credible institutions to oversee the economy.

There could be a silver lining to China lavishing its nearly $4 trillion of currency reserves on crisis-plagued nations: It might force the IMF, World Bank and ADB to raise their games. Competition, as Lagarde, Kim and Nakao would agree, is a good thing. But more likely, China's largess will encourage bad policy habits and impede development in ways that leave the global economy worse off.

Warren Buffett Tells You How to Turn $40 Into $10 Million

Warren Buffett Tells You How to Turn $40 Into $10 Million

By Patrick Morris 

Warren Buffett is perhaps the greatest investor of all time, and he has a simple solution that could help an individual turn $40 into $10 million.

A few years ago, Berkshire Hathaway CEO and Chairman Warren Buffett spoke about one of his favorite companies, Coca-Cola, and how after dividends, stock splits, and patient reinvestment, someone who bought just $40 worth of the company's stock when it went public in 1919 would now have more than $5 million.

Yet in April 2012, when the board of directors proposed a stock split of the beloved soft-drink manufacturer, that figure was updated and the company noted that original $40 would now be worth $9.8 million. A little back-of-the-envelope math of the total return of Coke since May 2012 would mean that $9.8 million is now worth about $10.8 million.

The power of patience

I know that $40 in 1919 is very different from $40 today. However, even after factoring for inflation, it turns out to be $540 in today's money. Put differently, would you rather have an Xbox One, or almost $11 million?

But the thing is, it isn't even as though an investment in Coca-Cola was a no-brainer at that point, or in the near century since then. Sugar prices were rising. World War I had just ended a year prior. The Great Depression happened a few years later. World War II resulted in sugar rationing. And there have been countless other things over the past 100 years that would cause someone to question whether their money should be in stocks, much less one of a consumer-goods company like Coca-Cola.

The dangers of timing

Yet as Buffett has noted continually, it's terribly dangerous to attempt to time the market:

"With a wonderful business, you can figure out what will happen; you can't figure out when it will happen. You don't want to focus on when, you want to focus on what. If you're right about what, you don't have to worry about when" 

So often investors are told they must attempt to time the market, and begin investing when the market is on the rise, and sell when the market is falling.

This type of technical analysis of watching stock movements and buying based on how the prices fluctuate over 200-day moving averages or other seemingly arbitrary fluctuations often receives a lot of media attention, but it has been proved to simply be no better than random chance. 

Investing for the long term

Individuals need to see that investing is not like placing a wager on the 49ers to cover the spread against the Cowboys, but instead it's buying a tangible piece of a business.

It is absolutely important to understand the relative price you are paying for that business, but what isn't important is attempting to understand whether you're buying in at the "right time," as that is so often just an arbitrary imagination.

In Buffett's own words, "if you're right about the business, you'll make a lot of money," so don't bother about attempting to buy stocks based on how their stock charts have looked over the past 200 days. Instead always remember that "it's far better to buy a wonderful company at a fair price."

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