Hello, View fans. Here are some of my morning reads.
Selective disclosure in muni-bond markets
It’s perfectly legal, and that can be a problem. Mike Cherney and Kelly Nolan of the Wall Street Journal make some good points in this article, which focuses on Puerto Rico bonds and selective disclosures to a handful of investment firms by government officials: “Securities laws generally require firms to disclose what they say to investors if the information is both material and nonpublic. These regulations don't apply to municipalities, in part because of concerns about the federal government interfering in state and local affairs.” So money managers with access to public officials have an advantage. As usual, some investors are more equal than others.
Andy Xie on the challenges facing India and China
The former Morgan Stanley economist, who recently was chosen for Bloomberg Markets magazine’s annual 50 Most Influential list, has a piece for Beijing-based Caixin Online comparing India and China. He says the main question is whether they will reform before or after a crisis: “India and China are suffering growth challenges. While the immediate reasons for the challenge –- overdependence on hot money for India and overreach of the export/investment model for China –- are different, both missed two golden opportunities to address their problems.”
An insider’s warning about the insurance industry
From the Financial Times: “The chairman of Lloyd’s of London has warned of the danger that a rush of capital into the insurance industry will cause `systemic problems’ akin to those of the banking sector during the financial crisis. John Nelson, head of the historic insurance market, spoke out about the risks of adverse consequences from non-traditional funding of insurance, which he said was occurring `on a scale not seen before.’” Some insurers may be charging too little for the risk they take on.
The perils of investing in state-controlled Chinese companies
PetroChina Co. used to be worth more than $1 trillion. It has lost $768 billion in value since 2007 and is the target of a widening corruption probe, Bloomberg News reports. “PetroChina functions like a proxy for the government in stock markets, rather than a representative of investors trying to maximize profit,” says Lin Boqiang, director of Energy Economics Research Center at Xiamen University in Fujian province. Good line.
A tick-tock on the Microsoft-Nokia deal
Nick Wingfield of the New York Times has a behind-the-scenes play-by-play on the sale of Nokia’s handset business, drawn from interviews with insiders. It’s access journalism, but colorful reading. In one scene, Microsoft chief Steve Ballmer tripped on a glass coffee table, “fell to the floor, hit his head and began bleeding above his eyebrow.” Afterward, “his security detail patched him up, and Mr. Ballmer resumed negotiations.”
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)