World Business

Some players may think the boom in energy, metals, and food is rewriting the rules of investing. Don’t bet your portfolio on it

by Ben Steverman

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As oil ascends above $140 per barrel, the hot—some statement overheated—goods market has become Topic A on Wall Street and Main Street.

Lawmakers worry about manipulation and excessive view. Market participants debate the pros and cons of government law, and badger that a ideal bubble is forming in key wares like oil. Meanwhile, consumers feel the be niggardly as they pay much more for food and energy.

But investors face their own article of merchandise dilemma.

In the past year, investing in commodities has provided healthy returns while stocks, bonds, and other investments have been standing or dropped in value.

Many investing. advisers have spent the past several years steering small portions of portfolios—many times 3% to 5%—into commodity index funds. Commodities offered a way to weaken expose to danger in a portfolio, they argued. Commodities can protect against inflation and move independently of other investments, often gaining value while public funds or bonds fall (or vice versa).

As a result, pension funds, hedge funds, and individuals began to pour money into the commodities market, at the outset in a trickle, then in a steady stream, and at once in a torrent. One favored vehicle: exchange-traded funds (ETFs) that track a diffused array of commodities. According to TrimTabs Investment Research, added than $38 billion is now held in article of merchandise ETFs, up more than 30% in the past five months.

But investors are also starting to realize the favor of the commodities has its drawbacks.

For one thing, says Susan Elser of Elser Financial Planning in Indianapolis, "commodities have become a highly volatile investment class."

Most of Elser’s clients are in their late 50s or older, and she’s not willing to put their retirement nest eggs in an investment head of predication prone to wild swings from month to month. Market participants disagree on whether speculators are to reproach for the current cheerfulness. But there’s no doubt that if oil can rise 40% in the first seven months of 2008, it can just as easily fall by a similar percentage at added design in the future.

Another problem with commodities is they are a poor paroxysm in the place of investors saving for the extended term.

For one thing, the forces pushing commodity prices higher can change superscription. Keith Hembre, cardinal economist at First American Funds (FAF), says the flow of investing dollars may be lifting prices somewhat, but the "underlying strength" of oil and other commodities is rapid economic growth in emerging markets. Low interest rates in those overseas economies have added to the interrogation, and sparked worries here and there inflation worldwide.

"Ultimately what will put a head-gear on prices is a tightening of monetary policy globally, particularly in emerging markets where the primary source of desire to obtain has been," Hembre says. If overseas central bankers don’t raise rates, the U.S. Federal Reserve may be studiously sought to hike engage rates in place, pushing the U.S. into a deep recession that would in turn slow from the top to the bottom of world growth and commodity exaction.

At more point, the commodities boom will stop, and this points to another drawback to investing in commodities: The healthy returns for commodities of the last few years have been unusual. Commodities be able to often go for years or decades offering investors weak or negative returns.

Over the long term, "the expected go of a commodity is really zero percent," says Avani Ramnani of Athena Wealth Advisors in Jersey City, N.J. And that’s before investors subtract transaction costs.

Unlike shares in a corporation that be able to be augmented and grow, or a bond that pays out interest reaped ground year, commodities are subject to the laws of supply and demand: In past commodity booms, higher prices have eventually cut into demand or spurred more supply. Prices didn’t take care of rebellion forever—they eventually stabilized or even fell.

"This whole trend of touching money into the commodities market, I don’t think it’s a healthy act as far as concerns individual investors," Ramnani says. An allocation to commodities does "humiliate the risk" of a portfolio, she says, "but it lowers the return as well." For investors putting away money during the term of the long haul, "it doesn’t serve any design," she says.

One more danger for article of merchandise investors may be the hardest to foretell: Investors in commodities face a political backlash that could disrupt markets. A U.S. Senate hearing distance June 24 showed lawmakers are seriously considering interstitial to stop or slow speculation. The general statement was "Ending Excessive Speculation in Commodity Markets: Legislative Options."

Michael Masters, of Masters Capital Management, told senators that scheme is artificially raising article of merchandise prices, and backed proposals to limit or block institutional investors from directly investing in the market. "In the last five years, institutional investors have adopted the mistaken feeling of certainty. that commodities futures are an investable asset class, similar to capital place of traffic investments," Masters said.

Among the institutional investors, of course, are the common funds that invest in commodities.

The Commodity Futures Trading Commission is studying whether index funds verily are inflating market prices artificially. The government agency promises to fame its conclusions to Congress by Sept. 15.

It’s impossible to predict how much longer the commodities hum will continue. But for investors, this superheated investment class may be getting over hot to handle.

Venture capital steadfast Highland Capital Partners gives student entrepreneurs a business boost with access to its expertise and contacts

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From left, Alex Bain, founder and president, and Craig Lund, founder and CEO, FanZanimal; Dan Peer, founder, Ann DeWitt, director of business development, and Motomu Shimaoka, founder, Leuko Bioscience; and Will O’Brien, founder and CEO, Project Einstein. Shawn G. Henry

by Spencer E. Ante

In the spring of 2007, Michael Sullivan was trying to outline revealed how to append some mojo to his startup, Affine Systems. As a graduate student in applied mathematics at Harvard University, Sullivan had co-founded the company in the fall of 2006 with classmate Bobby Impollonia. Working out of their homes, the two computer whizzes had whipped up a software program to let media companies know if their copyrighted videos show up on the Internet. But like many engineers, they didn’t be aware of much from one place to not the same business, and they hadn’t yet put cheek by jowl a function plan.

Then they heard about an unusual summer program that had just been started by Highland Capital Partners, a venture capital firm through offices in Boston and Silicon Valley. The program was designed as a denomination of summer camp for entrepreneurs. Open to undergraduate and graduate students, it offered aspiring entrepreneurs a $7,500 stipend, free office space, and access to Highland’s rod and external part contacts. Sullivan applied and got in. Last May, he and Impollonia started the 10-week program.

They ended up with a lot more than a récollecté booster. Highland’s partners helped Affine calling a craft plan, land their first test customers, and hire two older executives. Ultimately, last hibernate, Highland put venture money into Affine, one of two companies in the program to get funding. "They bestow you full access to their entire network," says the 27-year-old Sullivan. "I don’t consider there’s anything else like it."

Venture capital firms have all along had traditional internship programs, like those at law firms and investment banks. College kids consume the summer tagging along to meetings and listening to presentations. But VCs have never been comfortable giving students real responsibility for making investments.

Highland’s summer camp, that started its helper year through the advent of 10 new students this month, is a adapted to practice compromise. VCs focus on their walk of life and maintain control over investment decisions, yet they get an injection of new ideas from bright youngsters—by no strings attached. Highland’s program isn’t exceptional. A maniple of other venture firms run similar summer camps, including Lightspeed Venture Partners, which is offering 19 students office space, mentoring, and up to $15,000 in grant money to help them jump-start their trade. "We are trying to connect with high-potential people," says Michael Gaiss, a senior vice-president at Highland who runs its program.

For this summer’s camp, the fast received 140 applications from students at Stanford, Harvard, Northwestern, and other top schools in advance of choosing four teams. In return for its efforts, Highland asks one thing: If the startup raises venture capital within 180 days from the end of the program, the firm gets an option to co-invest up to 50% of the total financing. Highland didn’t launch the essay thinking it was going to fund a lot of companies, but last year it ended up financing two of the eight teams, including Affine.

For the budding entrepreneurs, the proposition is clear: Besides the free space and a modest stipend that covers the rent, Highland’s participants get to moil side by lateral with professional business builders. Highland’s full-time staff is a stairwell away on the help floor, while the teams occupy a first-floor space with the feel of a grad school dorm room. To calamity facing vapor, in that place’s a putting green in unit office and a basketball hoop-petticoat in another. Every so often, the teams will kick back on a patio, drink some beers, and fire up the barbecue.

The cell-phone maker’s choice to eventually give away its smartphone software will mean more mobile Web use—and more Google search ads

by dint of. Olga Kharif

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Nokia (NOK) rocked the wireless industry June 24 with news it would purchase the deal out of Symbian, a maker of mobile-phone software, that it didn’t already own—and then give absent the software for nothing.

The prospect of free software would sure lure users not present from competing cell-phone software makers (BusinessWeek.com, 6/24/08) including Google (GOOG), which in the past year threw its hat into the cell-phone software ring by spearheading the creation of Android, one operating system for wireless devices. Or so the argument runs.

But Nokia’s put in motion may play right into Google’s hands, by helping to nurture a blossoming of the mobile Web and inducement demand for all manner of cell-phone applications—and most weighty, the ads sold by Google. "There’s nullity to say that this isn’t what Google’s represent was all along," says Kevin Burden, research director, mobile devices at consultancy ABI Research. "They might regard wanted a besides open device environment anyway. This might have been Google’s end game."

Google, which makes money from ads placed on Web pages and alongside search results, stands to benefit from anything that helps spread the use of the Web—have existence it on computers or the advanced cell phones known as smartphones that run Symbian software. With the desktop search place of traffic showing signs of slowing, the company needs to ramp up usage of its applications from variable devices. U.S. mobile search ad sales are expected to rise to $1.4 billion in 2012 from $33.2 the masses in 2007, according to consulting firm Kelsey Group.

But in the U.S. market, Google has protracted been hampered in getting its applications onto cell phones on the side of a variety of reasons. To now, Web search on phones has been too dead or awkward, mobile premises plans and smartphones are oftentimes lavish, and carriers and cell-phone makers place restrictions without interruption which applications run on their employment plans and devices.

Google has tried to aptitude the tide in component by lobbying regulators to make wireless airwaves open to a wider range of applications. It’s also been pushing the Federal Communications Commission to make some airwaves available for free public broadband use.

The creation of the Open Handset Alliance, a consortium of more than 30 companies developing Android, is another part of this multipronged effort to remove some costs publicly inhibiting handset makers from making cheaper phones proficient to access the Web. The hope is that by keeping Android free, more people would be able to bestow smartphones and log onto the mobile Web—and ultimately use Google applications. After all, 82% of Apple (AAPL) iPhone owners use the Internet from one side the smartphone—five times the average consumer’s method, according to Nielsen Mobile.

Nokia may be able to bring to pass a lot of that groundwork, much greater quantity easily. Android lacks gradation, and as a startup effort it’s been prone to glitches and delays. It would take months for Android to start to significantly impact smartphone sales. Symbian is even now the world’s most popular smartphone operating universe, with 56% of the market.

With Symbian set free and open, Burden of ABI Research expects to bump his smartphone sales projections for 2009 by a "single-digit percentage." While smartphones account during 10% of the total handset market today, they could reach up to 25% of the total in three to four years, thanks in part to the Nokia announcement, says Jack Gold, president of consultancy J. Gold Associates.

Analysts and lawyers are warning that the decision to make allowance custom top-level domains will have being a “nightmare” during the term of brand managers

by David Meyer

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On Thursday, the Internet Corporation for Assigned Names and Numbers (ICANN) voted to allow–in addition to else traditional top-level domains (TLDs), such as .com and .org–theoretically any TLD at all, as long as it is no longer than 64 characters long. The application process for of that kind consuetude TLDs looks set to be arduous and the criteria rationally austere, but observers say the new body will create confusion.

“This has the in posse for perfect primordial confusion,” reported John Mackenzie, of the law firm Pinsent Masons, on Friday. “The attraction for cybersquatters is not going to subsist setting up a registry that matches someone besides’s brand; it will be in the generic TLDs. All of a sudden, every brand will be forced to register their designation at .store, .buy and .london to cease from anyone else acquirement it.”

Mackenzie added that a similar effect was seen whenever the .eu TLD was introduced. “Our clients didn’t scarceness the .eu domain name but they felt they had no choice,” he told ZDNet Asia’s sister site ZDNet UK on Friday. “They had to register their brands as .eu names. Before that, it was .info and .biz and all the others. Each time a new TLD is introduced, large brands incur expense a chance on defensive registrations to avoid the greater expense of recovering the names from cybersquatters further down the line. ICANN has just multiplied those costs. It’s a brand owner’s nightmare.”

Roy Illsley, a senior research algebraist at the Butler Group, echoed Mackenzie’s sentiments. “It’s going to give brand managers a massive cephalalgy,” he said. “There will be a very large number of in posse extensions. If [the stigma owners] don’t use them, then, if someone else gets them, it does potential brand damage.”

“If you go beyond the stain, it’s [slogans like] ‘Every petty helps’ from Tesco,” Illsley continued. “Can anyone use that? Once you’ve [made any TLD possible], you’ve really opened a can of worms.”

However, a spokesperson for Nominet, the forming that runs the .uk TLD, told ZDNet UK on Friday that applying to set up a new TLD would involve “a significant investment”.

“Once you’re up and running, you’ll be in on account of the long haul,” Nominet’s spokesperson said. “You will have to prove [beforehand that] that you’ve got the right operational skills and technical background and infrastructure to maintain stability on the internet. It’s hard to say exactly how it’ll turn out. There is an ‘counteraction’ phase in there as in a proper manner; people will be able to oppose certain applications. I don’t think [ICANN] require made that section of the process totally clear at the moment.”

Citi’s chief land officer for Bangladesh, Mamun Rashid, talks over what opportunities lie in advance for the surround with a bank

by Lara Wozniak

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Bangladesh remains one of the few remaining outposts in investment banking in Asia. But banks are steadily investing in the country and last year Citi established an investment banking presence in Bangladesh. The bank’s chief country officer for the rude, Mamun Rashid, explains the kind of opportunities contrive ahead for Citi in Bangladesh.

What investment banking opportunities are there in Bangladesh?There is a wide stroll of opportunities to help clients in Bangladesh raise capital to bear up their advancement or advise them without ceasing opportunities to grow either domestically or internationally. We are also seeing an increased good from companies looking to dress in Bangladesh.

A novel example of this would be the annunciation in mid-June where AK Khan & Co signed a definitive agreement for the sale of its 30% adventure in TMIB to NTT DoCoMo for a purchase account of $350 million. [TMIB is the third part largest mobile operator in Bangladesh, through around 7.1 million subscribers as of December 2007: AKK is one of the largest and oldest private sector corporations in Bangladesh.]

The acquisition by NTT DoCoMo determination serve to increase its footprint in the fast growing Asian wireless market. What better example of the increasing between nations investment passion into Bangladesh than an investing. by one of the world’s leading corporations?

On the capital markets front, the pace of privatisation is increasing and the government has started floating state-owned enterprises. Last year alone 14 companies were listed on the Dhaka Stock Exchange from one side IPOs. The degree of progress of ameliorate has been impressive and the government and regulators have done a good job in promoting development. Over the past five years the Asian Development Bank together with the Securities Exchange Commission have developed new commercial rules, public issue rules, pacification systems and bond issuance rules to govern the market and create added transparency in the marketplace.

More and more companies in Bangladesh are in like manner increasingly using risk management products and hedging in today’s volatile global markets. This is also something where we can play a role via our equities, fixed income, currencies and commodities teams to help clients navigate these volatile markets, including hedging against future rises in commodities prices.

What is Citi’s history in Bangladesh?Citibank established its presence in Bangladesh through a representative office in 1987. The bank opened its first full-service branch in Dhaka in 1995 and the second derivative line in Chittagong in 2000. At present, Citibank Bangladesh has four branches, and two offshore banking units in the export processing zones in both Dhaka and Chittagong.

Our operations include the major business units of Citi’s Institutional Clients Group, such as corporate and commercial banking, global transaction services. We also believed a license for investment banking operations earlier this year.

How sophisticated are some of Bangladesh’s governing companies? What products and services do they use?There is a noticeable become greater in sophistication, the dialogue we are having with some of our clients in the country is evolving fast: ‘What are my opportunities in the between nations essential markets?’ or ‘Give me some local and regional ideas to help me expand our business…’ are now formal discussions that were not so common just a few years ago.

Our main business however remains in the global transaction services space. Many companies in Bangladesh are looking for-cost effective and flexible action management services. In April, Citi signed a network arrangement which will yield our clients to use the more than 10,000 post offices in Bangladesh for their regular banking services. Also this year we signed an agreement by Dhaka Electric Supply Authority to offer our CitiConnect services to help them facilitate online hedge-bill collections and recompense services. We are furthermore active in the corporate and commercial banking space, providing corporate loans and other products to small- and medium-sized companies and multinationals in the country.

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Concern about street protests triggered by a distribute to reopen the country to beef imports from the United States and the prospect of labor league strikes over pay added to the pessimistic view, the Federation of Korean Industries (FKI) said in a relation on its survey about the business climate for July.

The business survey index compiled by the FKI, the nation's biggest lobby group for big companies, lay low to a seasonally adjusted 91.2 in the place of July from a revised 96.3 for June.

The figure is the lowest since 82.3 in January 2005.

A reading below 100 means more companies expect their business stipulations to worsen than to meliorate.

Unionized metal habitual devotion to labor workers in South Korea, including those at car makers such as Hyundai Motor Co (005380.KS), uttered that they would stop work for two hours in succession Wednesday to demand a reworking of the flesh of neat-cattle deal with the United States.

Oil prices touched a record high of nearly $143 a barrel on Friday, with investors piling into article of merchandise markets as stock markets and the dollar plunged.

(Reporting by Kim Yeon-hee; Editing by Alan Raybould)

Original text: http://us.rd.yahoo.com/dailynews/rss/business/*http://news.yahoo.com/s/nm/20080629/bs_nm/korea_economy_survey_dc

WASHINGTON He thinks of her every time he gazes at the painting - a blazing orange sun she drew a small in number years after the tragedy. It is the only splash of pervert in his pygmean K Street office and it gives him great happiness, and a stab of sorrow.

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He thinks of her every time he plucks a unused $5 bill from his wallet and sees the large purple digit emblazoned in the corner. It reminds him of how he used to sort her money: $1 bills in one envelope, fives and tens in others.

And of course he thought of her last month when a founded without interruption appeals court ruled on a case that could termination in the redesign of the entire U.S. publicity. It was one of the great legal victories of 53-year-old attorney Jeffrey Lovitky’s career, and he wishes she could have been there to share it.

But had she been in that place, it might never have happened.

For the lawsuit filed on account of the American Council of the Blind was none just about discrimination or changing the bills and notes; circulating medium so the blind can distinguish a $1 bill from a $20.

It was about a brilliant, gifted woman who changed so divers perceptions and overcame so many obstacles that those who knew her never doubted her ability to continue inspiring immense change, even from the serious.

It was round the commemorative record of a smile.

—

In his second-floor office, Lovitky sifts through a well-thumbed photo album. “Here’s a Sandy smile,” he says, plucking a picture from the page. “And here’s one. And this is truly a Sandy smile.”

The pictures show a petite brunette nestling into his shoulder below a cherry blossom tree, playfully pushing him in an oversized beach wheelchair on the sand, clutching his arm at a black tie event at which she was receiving yet another award.

His eyes mist at the memory - Sandra Welner, the refulgent physician whose dazzling smile and tenacious spirit stole Lovitky’s heart.

He found her after placing a personal ad in a Jewish gazette - or really, she rest him. He remembers the note she wrote in response - not the bickering, but the tone. She sounded so intelligent, so smart, so interesting, and however there was some obscure reference to a disability.

SOFIA, Bulgaria Extremists throwing rocks, bottles and gasoline bombs have attacked the Bulgarian capital’s first gay ornament parade.

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Police say they prevented the extremists from harming the 150 or in such a manner people in the march end Sofia. No serious injuries have been reported.

Police say they detained about 60 people for harassing the parade participants.

Gays face widespread contrariety in Bulgaria and opposition to Saturday’s flaunting has been fierce. The far-right Bulgarian National Union had called for “open resistance” to the gay pride parade with a campaign featuring posters that say: “Be Intolerant, Be Normal.”

Bulgaria’s of influence Orthodox Church said the march should be banned as it undermines the country’s Christian traditions.

DEARBORN, Mich. —

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Every morning, just about getting coffee, Mark Fields fires up his laptop to pore over a computer model showing real-time U.S. auto sales figures.

On this morning in the middle of May, the some one who heads Ford Motor Co.’s Americas operations has seen enough.

The line on a chart showing subcompact car sales for the first brace weeks of the month goes almost straight up. The one for pickup trucks, Ford’s biggest profit center, runs almost straight from the top to the bottom of.

High gasoline prices and the economic downturn are changing the market very much faster than anyone anticipated. Without action, Ford would be making moreover many trucks and not enough cars, a formulary in opposition to a residue sheet peppered with parentheses.

“This is going on 10 weeks where we’re seeing this not get any better,” Fields recalled in a newly come interview. “So we’d better act, and we’d greater good do now.”

Eleven miles away at General Motors Corp., they were reaching the same conclusions. Consumers were delaying big-ticket purchases. Those who bought weren’t going for GM or Ford trucks and sport utility vehicles, instead snapping up lawful about anything that gets more than 30 miles per four quarts.

At both companies, executives were alarmed. Eventually they made almost desperate decisions that will cost thousands of jobs, change the vehicles people drive and determine whether their businesses survive.

“We be in want of to get in front of it,” Mike DiGiovanni, GM’s executive director of global market and industry analysis, recalls speech. “If you stay too long on it, the pain would beget a lot worse.”

While both companies say they took quick action, critics wonder why they didn’t make more fuel-efficient vehicles sooner. After all, there were many signs that elastic fluid prices would do nothing but rise.

“Obviously they were making accurate too a great quantity circulating medium off their SUVs and pickups,” said Roland Hwang, vehicle policy director for the Natural Resources Defense Council. “They couldn’t really fully conceive of a world where they would have to rapidly extricate themselves from those markets and those profits.”

At GM and Ford, the aggrieve came quickly. Ford was first, announcing upon the body May 22 that it would dramatically divide truck and SUV production and smack its salaried work force. Factory closures are practicable when the company announces specifics nearest month. A week later, Ford announced accelerated plans for a super-compact car to be built in Mexico and sold in the U.S.

Ford likewise unprincipled its long-stated goal of turning a profit in 2009 and now says it will be difficult to break even next year.

KHURAIS OIL FIELD, Saudi Arabia —

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This massive oil field surrounded by the desolate sands of Saudi Arabia’s vast orient desert feels like the middle of nowhere.

But that which happens over the nearest year at Khurais, single of Saudi Arabia’s last undeveloped cyclops oil fields, could hold the key to what drivers will discharge one’s obligation to at the pump for years to come.

Under way at Khurais and two other smaller fields nearby is what Saudi Arabia calls the one only largest expansion of oil production capacity in history.

With consumers howling over record fuel prices and the United States pushing Saudi Arabia to produce greater quantity oil, this patch of small pebbles 100 miles west of the Saudi capital of Riyadh has become one of the most important places in the creation economy.

Saudi Arabia’s state-owned oil company, Aramco, is spending $10 billion to build the infrastructure to pump 1.2 million barrels of oil by day by next June from the Khurais field and its two smaller neighbors. That alone would be greater amount of than the complete individual production of OPEC members Qatar, Indonesia and Ecuador.

The project forms the centerpiece of the Saudi plan to increase the total amount of oil it can produce to 12.5 million barrels on this account that day through the end of 2009 - up from a little more than 11 a thousand thousand barrels per lifetime now.

Consuming nations have pushed Saudi Arabia to boost production amplitude even further and also want the universe’s lop oil exporter to institute pumping more crude immediately to bring down record oil prices hovering near $140 a barrel. They say oil production has not kept up with increased demand, especially from China, India and the Middle East.

Saudi Arabia plans to produce 9.7 the great body of the people barrels of oil per day, or 11 percent of the world’s sum, in July. It is the but nation with significant excess capacity that it could put on the market quickly.

But the kingdom has resisted calls to grow production further, saying financial speculators and the falling dollar are to lay for high oil prices, not a shortage of supply.

These disagreements came to a head June 22 at a fine meeting of oil producing and consuming nations hosted by Saudi Arabia. In the end, Saudi Arabia said it could increase oil production extent of room to 15 million barrels per day grant that needed in future years. But it gave no indication that footprint, or an immediate increase in output, was necessary or planned.

The civil tussle over output masks the challenge Saudi Arabia faces in boosting production capacity by the agency of developing giant fields like Khurais.

“That is what people don’t perceive the worth of,” said Manouchehr Takin, an oil expert at the London-based Centre for Global Energy Studies. “These are major projects, and people don’t realize they aren’t that at ease.”