Greek Prime Minister George Papandreou will press President Barack Obama to help Europe combat “unprincipled speculators,” who he said have roiled markets and threaten a new global financial crisis.

“Europe and America must say ‘enough is enough’ to those speculators who only place value on immediate returns, with utter disregard for the consequences on the larger economic system,” he said in a speech yesterday in Washington. Read Story

Obedient to intensifying U.S. government pressure to crack down on offshore tax evaders, in January Israeli banks began ordering clients they identify as "Americans" or "U.S. tax residents" to close investment accounts they hold in Israel. It is apparently an anticipatory measure, ahead of changes in U.S. law. Local banks are apparently responding to changes in American regulations as their legal counsels interpret them. Read Story

China, the world's biggest holder of foreign exchange reserves, renewed its commitment to the U.S. Treasury market on Tuesday but said it would be wary of substantially boosting its gold holdings. Read Story

States and companies have started investing very differently when it comes to the billions of dollars they are safeguarding for workers’ retirement.

Companies are quietly and gradually moving their pension funds out of stocks. They want to reduce their investment risk and are buying more long-term bonds, Mary Williams Walsh writes in The New York Times.

But states and other bodies of government are seeking higher returns for their pension funds, to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees. Higher returns come with more risk.

“In effect, they’re going to Las Vegas,” said Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board, which oversees public plans in that state. “Double up to catch up.” Read Story

Italy, saddled with the euro region’s second-largest debt, is the “biggest threat” to the economy of the 16-member bloc, according to Nobel Prize-winning economist Robert Mundell.

“Italy has got to be worried,” Mundell, a professor at Columbia University, said today in a television interview in New York. “If Italy became a target then this would create a big problem for the euro. Whatever is being done to Greece, possibly to Portugal and maybe Ireland, has to also save Italy from that problem.” Read Story

Vietnamese businesses are expected to continue investing in foreign countries this year, according to the country’s Ministry of Planning and Investment (MPI).

Vietnamese businesses are expected to look into overseas projects in mining, industrial crop cultivation and processing industries.

According to MPI statistics Vietnam invested in 465 projects worth US$7.73 billion in more than 50 countries and territories by the end of 2009.

Processing and manufacturing industries were at the top of the list with 102 projects worth US$429 million.

“This year, traditional markets including Laos, Cambodia, Russia, Malaysia and Algeria will still be attractive destinations for Viet Nam investors,” the MPI said.

“However, businesses will also expand their investments to the US, South Korea and Singapore.” Read Story

Manufacturing has long been the poor relation of the British economy, often characterised as a sector in inexorable decline, overshadowed by the booming modernity of super-sexy high finance. But in the wake of the collapse of the banks, politicians from across the spectrum are turning back to making things, in an effort to "re-balance" the British economy. And to coincide with "Manufacturing Week", business is laying out what is needed to turn the rhetoric into reality. Read Story

In a case that has tax planning and legal structuring implications for businesses investing in China, it is apparent that the failed deal with Hummer has its roots not just in the ability for Tengzhong Heavy Industrial Machinery to persuade the central government that it was a good idea, but also that an alternative structure, to move the deal offshore as a Tengzhong ownership has also been knocked back.

While Beijing was cool on the deal – Hummer vehicles do not fit with the central government’s policy of promoting fuel efficient vehicles, and was unsure that Tengzhong possessed the expertise to make the deal work – the implications for investors in China can be placed into two categories: political interference and potential China tax liabilities for the seller. Firstly, the fact that the central government can and is fully prepared to impose its own will on domestic businesses (it’s a reminder that China remains far from being a free market). And that government interference, which can become political rather than commercial, still has the status of final decision. The implications of this are well known of course, however the Hummer bid is a stark reminder that when courting Chinese buyers, the government lurks behind the scenes. Political due diligence in China, finding out if deals will actually progress or not, will become an increasingly important part of any foreign company’s strategy when it comes to investing. Read Story

The private equity firm Aureos Advisers is proof of how the business world is not only shifting east but also south. Run by the Sri Lankan-born Sev Vettivetpillai, Aureos has amassed $1.2bn (£790m) of investment under management and last year raised $150m to invest in African companies selling in local markets.

"That's a large sum of money in a market where raising capital is tough. Leverage was a game when cheap debt was around," he says of the old private equity market. "Today a large chunk of growth is in emerging markets and we have proved you can invest responsibly in these markets and achieve attractive returns while paying attention to building sustainable businesses." Read Story

The Hang Seng ETF, which is called Hang Seng BeES, will be available for trading on the National Stock Exchange (NSE). The interesting thing about this ETF is that it offers the Indian investor a way to diversify geographically in an easy and convenient manner. On the face of it, such diversification should be a good idea because it would offer an investor an asset that may counteract a weakness in one area withbetter returns in another.

However, that’s the theory. We need to see whether such diversity is actually offered by the Hang Seng. The connection between two investments can be of many different types. The ideal would be if the two assets have a negative or inverse correlation. This means that when one asset does badly, the other does well. Traditionally, gold and stocks and stocks and bonds were supposed to have such correlations. Certainly, the Indian stock markets and the Hong Kong market do not have this kind of correlation. Read Story

The Bahamas has the world's fifth largest balance sheet among international financial centres with some $941.5 billion in assets and liabilities, an International Monetary Fund (IMF) survey has revealed, prompting a leading local attorney to urge this nation to enter into bilateral investment treaties to further its competitive edge.

Michael Paton, a former Bahamas Financial Services Board (BFSB) chairman, told Tribune Business that the Fund's survey indicated the need for this nation to "strategically enter" into bilateral investment treaties with other countries in a bid to attract a greater share of global capital flows. Read Story

Why the biggest foreign holding in one of his funds is the Washington Post.

CHRIS BLAINE: On this Market Review podcast we chat to Walter Aylett, founder of Aylett & Company Fund Managers. Walter, as part of your fund management company, you run a hedge fund. Could you just explain exactly what a hedge fund is.

WALTER AYLETT: Yes sure, it's a product that tends to be on the riskier side of the investment spectrum and the reason why it can be more risky than say a long only equity unit trust, is that the fund manager can use a few exotic instruments like futures, derivatives, options and then can gear the fund up - in other words, borrow money to invest in assets. Read Story

Michael Flynn, global head of institutional business at Cordea Savills, said a growing trend among local investors is their interest in core property assets overseas - a previously unheard of strategy.

Australian institutional investors traditionally preferred to keep their core investments locally, while allocating 100 per cent of their international property mandates to opportunistic or value-add investments offshore.

However, investors have learned that allocating 10 - 15 per cent of their portfolio to high risk international property altered the risk profile of their entire property book, subsequently exposing them to market crashes such as the GFC, said Flynn. Read Story

Olivier Blanchard, normally at MIT but currently the chief economist at the IMF, has released an interesting and important paper on how the crisis has changed, or should have changed, how we think about macroeconomic policy. The most surprising conclusion, presumably, is the idea that central banks have been setting their inflation targets too low:

Higher average inflation, and thus higher nominal interest rates to start with, would have made it possible to cut interest rates more, thereby probably reducing the drop in output and the deterioration of fiscal positions.

To be a bit more precise, I’m not that surprised that Olivier should think that; I am, however, somewhat surprised that the IMF is letting him say that under its auspices. In any case, I very much agree. Read Story

One of the early year themes we have been discussing on our subscriber site has been our expectation for an increase in market volatility. Probably about three weeks back we wrote, “Unlike the consensus and big Street houses which have been predicting/expecting falling volatility in 2010 after an already accomplished death defying drop in volatility during 2009, we’re not so sure shorting volatility is such a wonderful investment idea right here. Although we could be dead wrong, we believe 2010 will present us with a great opportunity to buy volatility. We could be very close right now.” We’re not reprinting this to proverbially pat ourselves on the back as the year is still very young. Secondly, anyone spending time patting themselves on the back in this business are usually about 15 seconds away from having the proverbial rug pulled out from under them. Anything can happen, so judgment is reserved for now as we’ll just have to see what happens on the financial market front as we move forward. We think an increase in volatility is in store not only for the financial markets, but also in a much broader context we’d like to discuss in this missive. We want to quickly talk about another type of volatility – economic volatility. And we want to take a look at the long term in the hope that perhaps we can “see” the future more clearly. Here’s the question that may indeed morph into an investment theme for 2010 and beyond that we’d like to pose. Looking ahead, will the US economy be more or less volatile than we have experienced over what is close to the last thirty years? Yes or no? If indeed were are anywhere even close to the mark regarding our thoughts that economic volatility will increase, then that has direct and meaningful implications for equity and broader business valuations. Let’s start digging through some facts. Read Story