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Taiwan Business Bank
Выбор редакции
31 декабря 2015, 22:00

Federal Reserve Board announces approval of application by Taiwan Business Bank

Federal Reserve Board announces approval of application by Taiwan Business Bank

01 апреля 2013, 14:13

Week Ahead Drivers

The US dollar is little changed here at the start of the second quarter, as European markets remain on holiday.  Short-covering is making the yen the best performing currency today.  The dollar traded below JPY93.50 for the first time March 6.  The next level of support is seen near JPY93.00. The yen's gains came in conjunction with a 2.1% drop in the Nikkei and a 3.3% slide in the Topix.  No sector escaped the carnage, but health care, utilities, financials and basic materials were hit the hardest.  We note that in the options market, the premium for downside insurance (puts on the Nikkei) is trading at the largest premium (over calls) in eight months.  This is a sign that the longs are getting nervous and paying up for protection. The Nikkei closed below its 20-day moving average for the first time since late February and the 5-day moving average may fall below the 20-day average late this week for the first time since mid-November, just after elections were called and an Abe victory anticipated.  There seems to be some growing skepticism of the impact of Abenomics, along the lines we have outlined. There are three sets of drivers in the week ahead:  central bank meetings, economic data and the ongoing heightened state of anxiety in Europe. I. Four Central bank meetings: The Reserve Bank in Australia is the first to meet.  Practically no one expects a resumption of its easing cycle.  Recent economic data has been a bit firmer than was the case at the March meeting.  However, we suspect there is sufficient uncertainty about the economic outlook, with appreciation of the trade-weighted currency, to deter the RBA from declaring an end of the cycle.  The statement to leave the door ajar to additional rate cuts, which we expect to materialize in late Q2 or early Q3. Bank of Japan: The long awaited first BOJ meeting with the new management team will conclude on Thursday.  The market has a good sense of what is going to happen.  The BOJ is expected to bring forward from next year the beginning of opened-end QE.  It will likely combine the monthly rinban operations with its asset purchase program.  The former includes buying JPY21.6 trillion of long-term government bonds a month.  The latter includes purchases of  JPY44 trillion of JGBs up to 3-years of duration.  The BOJ is also expected to suspend its self-imposed constraint that limits its JGB purchases to bank notes in circulation.   Given the extreme market positioning, we suspect that Kuroda & Co have to shock and awe investors, otherwise the risk of a short-covering yen bounce would seem to increase. Bank of England:  Governor King has been outvoted at the past two MPC meetings, with the majority refusing to renew the gilt purchase program, in part, the recent minutes revealed, because of concern it would lead to fresh sterling weakness.  Chancellor of the Exchequer Osborne formally endorsed the MPC's flexible inflation targeting.   We suspect the BOE wants to avoid pre-committing Carney, who becomes governor in July, especially given the decisions on forward guidance to be decided in August.  This means that the window to resume gilt purchases, assuming a three-month period, is closing after this week's meeting. European Central Bank:  With the regional economy showing no compelling signs of bottoming and price pressures easing, a case can be made for easier monetary policy by the ECB, and we suspect some board members will advocate a cut in the 75 bp repo rate.   However, on balance we expect the consensus to lean against a move at this stage.  A repo rate cut will have little bearing on the key overnight rates, which continue to trade a few basis points above the zero deposit rate.  A repo rate cut is largely symbolic, and we suspect that the consensus will find a repo rate cut now would be sending the wrong signal.  Half a year ago, the ECB unveiled the Outright Market Transaction facility.  It was not intended to be a panacea, but rather, to buy time for European officials to act.  They have not moved in the direction the ECB desires.   Cyprus and other regional banking issues will likely be featured in the Q&A of Draghi's press conference. II.  Economic Data:  In Asia, Japan's Tankan survey and several PMI reports were released earlier today.  Japan's Tankan survey generally showed modest improvement in sentiment, though among the large manufacturers, the pessimists still outnumber the optimists (-8 from -12 in December).  However, news that capex was expected to fall 2.0% after a 6.8% increase in the Dec survey and expectations for a 5.0% pace is troubling.    The recent string of economic data shows little impact from a weaker yen.  Exports continue to fall.  Industrial output is weaker than expected and the grip of deflation has not slackened.  Separately, Japan reported that vehicle sales fell the most in six quarters (9.4%).  The end of the government's subsidy for fuel efficient cars last September continues to impact activity. China's official manufacturing PMI saw a modest increase to 50.9 from 50.1.  This was just below expectations.   The HSBC reading was stronger at 51.6, matching expectations.  Of note, new orders, output and exports all increased, while price measures moderated.  Separately, we note that over the weekend, Beijing and Shanghai imposed new restrictions aimed at curbing activity in the housing market.   The US dollar has been gently easing against Chinese yuan and a new marginal 19-year low was recorded today.  To keep this in perspective the yuan has appreciated by about 0.35% against the dollar thus far this year. South Korea's PMI rose to 52.0 from 50.9 and is at the highest in a year.  However, this news was not sufficient to offset the disappointing export growth (0.4% vs expectations 1.8%) in March and a soft inflation report (-0.2% in March for a 1.3% year-over-year rate).  Today's data likely brings forward measures to ease monetary policy to compliment the fiscal stimulus the government will unveil later this month. Separately, Taiwan's PMI rose to 51.2 from 50.2.  India's slipped to 52.0 from 54.2, which is the main exception to the data that is generally showing modest improvement in the region.  In Europe, the PMIs are featured and the risk is to the downside.  Greece reported its manufacturing PMI today.  At 42.1, it showed deterioration from the 43 reading in February.  Output, orders, inventories and employment fell.  The day before the ECB meets, the preliminary March consumer inflation report for the euro area will be released.  Price pressures have been falling and a new 2 1/2 year low is expected (1.6% vs 1.8% in February).  Like the PMI reading, the risk to inflation is also on the downside. The US employment report is the main feature.  The consensus expects private sector employment to have expanded on par with the 200k seen on average over the last three and six months.  The improving tone of the labor market appears to be a reflection of a slowing in lay-offs rather than an increase in employment. The US auto sector is an important driver of manufacturing, consumption and business investment.  US auto sales are expected to remain near 5-year highs, with domestic producers continuing to pick-up market share. Given market positioning (long US dollars mostly), and the fact that analysts appear to have adjusted their forecast to reflect the resilience of the economy, there is scope for disappointment or buy the rumor sell the fact type of activity.   Canada reports employment figures at the end of the week as well.  A repeat of the 50.7k job growth posted in February is unlikely to be repeated.  A minor uptick in jobs is expected.  At the same, Canada is expected to report its first trade surplus since last March. III.  European Crisis The fallout from Cyprus will continue to command attention.  The capital controls will be reviewed at the end of the week.  The optimists are thinking the duration will be measured in weeks, while the pessimists are thinking of months, if not years (as is the case in Iceland).  In addition, the sharper the economic contraction, the greater the likelihood that Cyprus will require more aid..  The market will also watch developments in Slovenia closely as it appears to have become the favored candidate to succeed Cyprus in needing assistance.  Separately, Italy's political situation is entering a new phase now that PD's Bersani has formally failed to cobble together a government.  Over the weekend, Napolitano had seemingly used a resignation threat to up the ante.  He named ten senior statesmen and politicians to a committee that will see if there is a limited agenda that can be agreed upon by all the key stake holders.  Another technocrat government may be coming at a poor time. The shallow roots of democracy have been laid bare by the fact that the Cypriot parliament is not needed for the terms of the assistance program, but the Germany parliament must agree. There is still a sense that EU officials were responsible for Berlusconi's exit in late 2011.  Even now Draghi's call to Napolitano over the weekend is read (by some) as reflecting nefarious intent of unduly influencing Italian politics by dissuading him from resigning early to make way force new elections.  We suspect that Napolitano's threat of resignation was a tactical ploy to force higher level negotiations,

Выбор редакции
25 марта 2013, 16:26

Key Events And Issues In The Week Ahead

Via Goldman and SocGen While the news flow is dominated by Cyprus, it will be important to not lose sight of the developments in Italy, where we will watch the steps taken towards forming a government. The key release this week is likely to be US consumer confidence. Keep a watchful eye on the health of the consumer in the US after the tax rises in January. So far, household optimism and demand has held up better than expected. The IP data from Taiwan, Singapore, Korea, Thailand, Japan will provide a useful gauge on activity in the region and what it reflects about global activity, however Chinese New Year effects will need to be accounted for in the process. Monday 25 March Singapore CPI (Feb). Bloomberg Consensus: +4.1% yoy. Last: +3.6% yoy. Taiwan Industrial Production (Feb). Bloomberg Consensus:-9.2% yoy. Last: +19.2% yoy. Also of interest: Fed Chairman Bernanke, NY Fed President Dudley speak. Tuesday 26 March New Zealand Trade Balance (Feb): Bloomberg Consensus:-NZD12mn. Last: -NZD305mn. Singapore Industrial Production (Feb). Bloomberg Consensus: -7.0% yoy. Last: -0.4% yoy. US Durable Goods Orders (Feb). Bloomberg Consensus: 3.9%. Last: -4.9%. US Consumer Confidence (Mar). Bloomberg Consensus: 67.5. Last: 69.6. Also of interest: Philippines Trade Balance (Jan). Wednesday 27 March Korea Consumer Confidence Index (Mar). Last: 102. Thailand Manufacturing Production Index (Feb). Bloomberg Consensus: 3.0%. Last: 10.1. Germany GKF Consumer confidence (Apr). Bloomberg Consensus: 5.9. Last: 5.9. Sweden NIER Business and Consumer Survey (Mar). Bloomberg Consensus: 97.0. Previous 94.7. Switzerland KOF Leading Indicator (Mar). Bloomberg Consensus: 1.04. Previous 1.03. Euro area Harmonised CPI Mar (Flash): Bloomberg Consensus: Previous: +1.8%. Euro area Consumer Confidence Mar (Final). Bloomberg Consensus: -23.5 Previous: -23.5 (Flash). Canada CPI (Feb). Bloomberg Consensus: +0.7%mom. Last: 0.1%mom. Thursday 28 March Korea Current Account (Feb). Last: USD2253.6mn. China Industrial Profits Jan-Feb. Last: +5.3% yoy. Taiwan Central Bank Policy Meeting. Bloomberg Consensus 1.875%. Last: 1.875%. India Current Account Balance 4Q. Last: -US$22.3 bn. UK GFK Consumer Confidence (Mar): Bloomberg Consensus: -27.0. Previous: -26.0. Germany Unemployment (Change) (Mar). Bloomberg Consensus:-2k. Previous: -3k. Italy Business Confidence (Mar). Bloomberg Consensus: 88.0. Previous: 88.5. US GDP Q4 - third release. Bloomberg Consensus +0.5%qoqann.  Last:+0.1%qoqann. US Chicago PMI (Mar). Bloomberg Consensus: 56.5. Last: 56.8. Also of interest: Japanese retail trade (Mar), Australia Private sector credit, India fiscal deficit. Friday 29 March Japan CPI (Feb): Bloomberg Consensus: -0.7%yoy. Last: -0.3%yoy. Japan Industrial production (Feb). Bloomberg Consensus: 2.5%mom. Last: 0.3%mom. Korea Industrial Production (Feb). Bloomberg Consensus: -5.3% yoy. Last: +7.3% yoy. Thailand Exports (Feb). Last: +15.6% yoy. US Personal Income (Feb). Bloomberg Consensus: +0.9%. Last: -3.6%. US Personal Spending (Feb). Bloomberg Consensus: +0.6%. Last: +0.2%. US Core PCE Price Index (Feb). Bloomberg Consensus: +0.5%. Last: Flat. US Reuters/U. Mich Consumer Sentiment—Final (Mar). Bloomberg Consensus: 72.7. Last: 71.8 TOP ISSUES FOR THE WEEK AHEAD WAITING FOR A NEW ITALIAN GOVERNMENT President Napolitano last week officially asked Mr Bersani to attempt to form a government following the fragmented election outcome on 24 and 25 February. It is no easy task and weekend press reports are not encouraging. We expect Mr Bersani to inform President Napolitano at the end of this week of whether he believes he can be successful. The best case is that some form of compromise can be reached that will allow Italy to move ahead with a minimalist reform programme, potentially including electoral reform (although electoral reform will not be easy as each party wants something different). Should Bersani fail, which remains a very real possibility, President Napolitano is likely to put in pace a caretaker government until new elections can then be held (September seems the most likely timing). New elections, however, could very well see further fragmentation. Moreover, even if Bersani manages to form a government, the risk is that it will have a very short lifespan. MARKET ISSUES: Italy on “policy auto-pilot” seems to be the base case currently discounted by markets. As also highlighted by our Fixed Income strategists, risks to this scenario are clearly biased to the downside. NO US GOVERNMENT SHUTDOWN The risk of a US government shutdown was taken off the table with both the House and the Senate approving legislation to fund the government to the end of the fiscal year (30 September). Negotiations over the FY14 budget continue and the next key date now is 18 May when the debt ceiling is reinstated. MARKET ISSUES: Fiscal policy is likely to be off the market radar screens for now. As the debt ceiling approaches, lots of headlines can be expected but we see the risk of the US going to a technical default as very low. CROSS ATLANTIC DIVIDE TO CONTINUE Our US data guru Brian Jones has a number of above-consensus calls in what promises to be another week in the sweet spot for the US. Full details of previews can be found in our Week Ahead Calendar, but highlights include February durable goods orders at +6.0 mom, January Case-Shiller home prices at 1.29% mom and Q4 GDP at +0.7%. March sentiment surveys are expected to ease lower, but remain firmly in expansion territory. Consumer confidence is the one negative where we look for a drop to 63.5 in the Conference Board reading. Turning to the euro area, the disappointing PMI readings last week should be echoed in the EU Commission’s March Economic Sentiment Index. February M3 data, moreover, are expected to show still weak bank lending data. The next bank lending survey on 24 April will further insight on credit supply conditions. Not all is gloom and doom, however, as we expect French households to have increased spending by 0.3% mom in February, after a slump of -0.8% in January. MARKET ISSUES: Although the FOMC statement and press conference offered some further input on when asset purchases will stop, clarifying the condition of “significant improvement in the outlook for the labour market”, overall guidance remains vague. For now, the US is in the sweet spot. Hope is that US recovery will suffice to pull the euro area out of the doldrums. In our opinion, much more is  required and we expect the cross Atlantic gap to remain wide in 2013. MIXED DATA FROM ASIA Some better data out of Japan, and notably better industrial production (we look for +4.0% mom in February) should help underpin hopes that the Japanese economy is finally bottoming out. Looking over to Korea, however, we expect to see further confirmation of a soft patch in both the February industrial production data and the March sentiment indicators. MARKET ISSUES: Our forecasts suggest that the recent picture of mixed data from Asia will continue this week. Overall, however, the picture remains one of recovery albeit modest.

04 марта 2013, 14:10

Previewing The Key Macro Events In The Coming Week

In the upcoming week the key focus on the data side will be on US payrolls, which are expected to be broadly unchanged and the services PMIs globally, including the non-manufacturing ISM in the US. Broadly speaking, global services PMIs are expected to remain relatively close to last month's readings. And the same is true for US payrolls and the unemployment rate. On the policy side there is long lost with policy meetings but we and consensus expect no change in any of these: RBA, BoJ, Malaysia, Indonesia, ECB, Poland, BoE, BoC, Brazil, Mexico.  Notable macro issues will be the ongoing bailout of Cyprus, the reiteration of the OMT's conditionality in the aftermath of Grillo's and Berlusconi's surge from behind in Italy. China's sudden hawkishness, the BOE announcement and transition to a Goldman vassal state, and finally the now traditional daily jawboning out of the BOJ. Sunday 3rd China Services PMI (Feb): The non-manufacturing Purchasing Managers’ Index fell to 54.5 in February from 56.2 in January. Monday 4th Confirmation Hearing for BOJ Leadership Nominees: Given how much FX markets focus on potential policy changes at the BOJ after the nomination of the new leadership, the confirmation hearing could become an important driver of the JPY. Also interesting: Fed Yellen Speech, Spanish unemployment (Feb), UK Hometrack house prices (Feb), UK Construction PMI, Turkey consumer prices (Feb). Tuesday 5th Global Services PMIs (Feb): Broadly speaking, global services PMIs are expected to remain relatively close to last month's readings. US Non-Manufacturing ISM (Feb): Consensus expects 55.0 after 55.2 in Jan. RBA Meeting: The strong consensus view is that the RBA will retain a 3.00% cash rate at its March meeting, albeit with an explicit easing bias intact. Financial markets also perceive the RBA to be in ‘wait and see’ mode – ascribing just an 18% chance of a rate reduction this Tuesday. Also interesting: Taiwan and Philippines CPI, Fed Lacker Speech, Australia Balance of Payments (Q4) and Retail sales (Jan). Wednesday 6th US Factory Orders (Jan): Consensus expects -2.2% mom after +1.8% in Jan. Australia GDP (Q4): We currently expect GDP growth of +0.5% qoq - as rising consumption, housing construction & net exports, offsets weakness in company profits & business investment. In contrast, current RBA forecasts imply stronger growth of +1.2% qoq in the quarter. Consensus expects a +0.6% qoq growth. Brazil central bank policy meeting: GS and consensus expect unchanged SELIC at 7.25%. Poland monetary policy meeting: We continue to think that the Polish MPC will keep the base rate on hold, at 3.75%. This is more hawkish than market pricing, which suggests around 60% probability of a cut next week and around 50bps more in cuts until end-2013. Consensus is skewed to another 25bps cut in March. BoC monetary policy meeting: GS and consensus expect unchanged rates at 1.00%Also interesting: Fed's Beige Book, Fed Fisher and Plosser Speeches, ADP Employment Change (Feb), Eurozone GDP (Q4) Thursday 7th BOJ Meeting: Ahead of the leadership change and after the increases in the APP announced at the previous meeting, we do not expect any mayor change at this meeting. ECB Meeting: Consensus expect no change in policy, some expect a 25 bps rate cut. BoE Meeting: Consensus expects no change in BoE policy at this meeting. Goldman expects the Bank of England to engage in further easing in the coming months, in line with the arrival of its very own Mark Carney's "but this is likely to come through credit easing initiatives, which would likely be announced in conjunction with “other UK authorities”. US Trade Balance (Jan): Consensus expects a $43bn deficit after $38.5bn in December. Also interesting: Australia, Chile and Taiwan Trade data, US Weekly Claims, Fed supervisory stress test, Hungary IP, Brazil IP, Mexico inflation, Japan GDP (revised). Friday 8th Japan Balance of Payments (Jan): Customs-cleared trade data for January showed exports up 6.4% yoy, the first rise in eight months. Meanwhile, imports rose 7.3%, resulting in a ¥1.6 tn trade deficit. the income account balance remained around a ¥1 tn surplus while the service account showed a somewhat larger deficit yoy. As a result, the current account in January would be -¥768.5 bn, the largest deficit within a statistically comparable timeframe (i.e. since 1985). China Trade Balance (Feb): Exports and imports growth will likely fall substantially as the Chinese New Year distortions get reversed. US Non-farm Payrolls (Feb): Consensus expects +160k after +157k in Feb. GS expects +150k. GS and consensus expect the unemployment rate to remain unchanged at 7.9%. Mexico central bank policy meeting: In our view the MPC will likely wait for more data in order to ascertain whether the current disinflation trend continues and consolidates, and also whether domestic demand will require monetary stimulus. As such, we expect the central bank to hold this week, but assess very close to a 50% probability of a 50bp-75bp once-off rate cut between late April and early July. Also interesting: China Money Supply and Loan Data (Feb). The same data as the Goldman summary above, from the visual perspective of SocGen: And again from SG, here are the Top Issues for the week ahead: EUROGROUP TO REITERATE GERMAN DIET Monday’s Eurogroup meeting (ahead of the 14-15 March EU Council) is set to discuss a bailout for Cyprus, but with still apparent divides over the shape of a bailout (and notably whether bank depositors should take losses), the risk is that no final agreement will be reached this week. When we log in to watch the press conference (with the indicative starting time of 19h00 CET) we’ll be looking for any hints of additional softening in what we long ago termed the “German Diet” of austerity and structural reform. Our expectation is there will be none, which will be a clear message to Italy’s future government. MARKET ISSUES: The euro debt crisis has no easy overnight fix. Last year, the spring brought a reality check on just what the LTRO could and could not achieve. It seems that the time has now come for one on the OMT. OMT HAS CONDITIONALITY, BUT THE ECB CAN DO MORE Market consensus (and our own view) is that there will be no tangible action at this week’s ECB meeting. The press conference, however, will be given close scrutiny. We expect President Draghi to deliver the simple message that OMT comes with the strict conditionality of an ESM programme, but when it comes to the economy and banks the ECB could do more with a potential future rate cut and additional LTROs. MARKET ISSUES: This message should come as no surprise, but the reminder that the OMT comes with full-blown ESM conditionality is never agreeable. We expect the March Sentix investor sentiment reading to post a greater-than-consensus decline (to ?8.0), indicating that already sentiment has suffered in the fallout from the Italian election. CHINA TO BE LESS DOVISH ON SHORT-TERM STIMULUS The slogan “making progress while maintaining stability” set at the Central Economic Work Conference in late 2012 is set to dominate the National People’s Congress (NPC) from 5 March to 17 March. We expect the 7.5% GDP growth and 4% CPI targets to be maintained, but broad money growth may be lowered to 13-13.5% from 14%. If confirmed, this would lend further support to Wei Yao’s view of more pre-emptive monetary policies and thus less upside to economic recovery. On structural reform, the NPC is a venue more for setting frameworks, rather than concrete measures. Nonetheless, two measures should be voted on: (1) an amendment to the land management law to give a greater slice of land sale revenues to farmers and (2) a proposal to merge the troublesome Ministry of Railways into the Ministry of Transport. MARKET ISSUES: Hopes of more short-term policy stimulus are set to be disappointed, but a more aggressive stance on structural reform should be reassuring for long-term stability. US SILVER LINING Midnight Friday the sequester kicked in and, with that, $85bn of cuts. Our forecast already discounts about half the cuts and we still see some chance for some of the cuts to be legislated away. The silver lining, as highlighted in this week’s US Focus, is that this will ease market fears of an early QE exit and all the more so coupled with Ben Bernanke’s dovish testimony last week. On the data front, the February employment report is centre-stage and we look for +225K non-farm payrolls – the highest reading in three months. MARKET ISSUES: Signs of housing recovery coupled with increased clarity on the policy frontshould pave the way for a sustainable recovery. The sweet spot will be the combination of continued QE and better economic news. TEMPTING, BUT NO BOE ACTION THIS WEEK Cracks in the MPC voting, as we have seen of late are typically a sign that a policy change is imminent. We expect that the more worrying inflation profile, further exacerbated by sterling weakness since the UK downgrade will keep the BoE on hold this week. Moreover, the February Inflation Report would have been a more opportune timing for a move. MARKET ISSUES: Expectations are set to remain in place for further BoE easing action – all the more so as Mark Carney’s arrival date approaches. BOJ AWAITS ITS NEW LEADER We see no action from the BoJ this week ahead of the upcoming leadership change. Focus now is on the nomination process as Prime Minister Abe seeks parliamentary support for his candidate, Mr Kuroda. MARKET ISSUES: As we discussed in BoJ's challenge for a regime change, we expect the new BoJ leadership to be one fully supportive of Abeconomics and expect to see a substantial expansion of monetary. RBA ON HOLD RBA Governor Stevens noted in his recent testimony that there is already considerable stimulus in the pipeline. Moreover, AUD depreciation is an additional argument against easing this week. We do, however, expect the RBA to maintain a dovish tone. MARKET ISSUES: No change from the RBA is the market consensus. The global mood on risk is set to be the more important driver this week. CBR ON HOLD Although recent economic news has been unimpressive, the Central Bank of Russia appears concerned by accelerating inflation and, although Chairman Ignatiev expects to see a decline in inflation over the coming months, we see no change in the policy stance this week. MARKET ISSUES: We continue to see room for a future rate cut. Source: Goldman, SocGen

25 февраля 2013, 16:50

Key Macro Events In The Coming Week

Next week’s calendar is packed with important events and releases, aside of course from the biggest event of the week which are the Italian elections. In fact we already got the first one in the form of China's disappointing HSBC flash PMI which consensus expectations would print stable yet which dropped to a 4 month low. On Friday, the ISM is expected to come out mildly softer vs last month’s strong 53.1 print and consensus at 52.5. Chicago PMI will also be followed by markets on Thursday. On the central bank front markets will be primarily looking for further news on the BOJ leadership succession front. From the perspective of Fed speakers, Chairman Bernanke’s testimony ahead of the Senate Banking Committee will also be followed as markets continue to track the Fed’s assessment of the economic recovery. In the global currency warfare front, the Bank of Israel is expected to cut policy rates by 25bps on Monday, as well as the National Bank of Hungary on Tuesday. Monday February 25 China Flash PMI: Consensus expectations are for a read of 52.2, almost flat from last month’s 52.3 Israel MPC: Consensus expectations are for no change from the current level of 1.75%. Goldman sees a 25 bps cut. Also interesting: Mexico Current Account, Singapore CPI Tuesday February 26 Hungary MPC: Consensus expects the Central Bank to cut the policy rate by 25 bps to 5.25%. US Consumer Confidence: Consensus forecasts an improvement in US consumer confidence in February from 58.6 to 62.0. US Case Shiller Home Price Index: Consensus expectations are for an increase of 0.5%, down from 0.6% from the last report. US New Home Sales: Consensus at 3.0% better than last month’s -7.3% reading. Fed Chairman Bernanke testifies at the Senate Banking Committee Also Interesting: US Richmond Fed, Mexico Trade Balance, Taiwan Export Orders, Japan Retail Sales Wednesday February 27 US Durable Goods Orders: Consensus at -4.0% on a plunge in airrcraft orders, after a strong December read of 4.3%. Also interesting: Euro Area Consumer Confidence, UK Q4 revised GDP Thursday February 28 US Q4 GDP (Second Estimate): Consensus at 0.5% up substantially from the first estimate at -0.1% US Chicago PMI: Consensus at 54.1 down from last month’s 55.6 US Initial Jobless Claims: Consensus expects 360,000, stable from last month’s 362,000. Also interesting: Germany Retail Sales, Euro Area HCPI, Japan Unemployment Rate, Japan/South Korea Industrial Production, India Q4 GDP Friday March 1 US ISM Manufacturing Index: Consensus at 52.5 down from last month’s 53.1. US U. Michigan Consumer Sentiment: Consensus expects no change from last month’s read both at 76.3. US Personal Spending: Consensus expects an increase of 0.2%, stable from last month. US Personal Income: Consensus expects a 2.0% decline. Russia MPC: Central Bank expected to be on hold. Global PMIs Also Interesting: US Construction Spending, Euro Area Unemployment rate, Korean Exports, Canada GDP, Brazil Trade Balance, Chile MPC minutes, Polish Q4 GDP. Visually from SocGen: And also from SocGen, top issues for the week ahead: TOP ISSUES FOR THE WEEK AHEAD UK DOWNGRADE ON WEAK GROWTH OUTLOOK Citing the “continuing weakness in the UK's medium-term growth outlook” and the challenges that this poses to the government's fiscal consolidation, Moody’s Friday lowered the UK’s rating from Aaa to Aa1. Moody’s now have a stable outlook on the UK, suggesting no further downgrade is imminent. S&P and Fitch (both still attribute a triple-A rating to the UK) have a negative outlook. Over the weekend, Chancellor Osborne stated that the change in rating would not trigger any change in policy, but politically the downgrade does bring a setback. The UK’s loss of a full suite of triple-A ratings follows those of the US and France as recent examples. Debt sustainability is the big picture issue, and while the Fed and the BoE have been able to deliver financial repression offering some relief on debt snowballs, the situation for the European periphery clearly remain a far greater challenge. As we have highlight on numerous occasions, the ECB’s OMT brought the final brick in effectively addressing the issue of funding. Solvency, however, requires economic growth. We’ll be writing more about this next week, but this is where we see the much greater challenge. This week in the UK, the upwards revision to construction output and industrial production offer the possibility of what would be a welcome upside revision to the preliminary Q4 GDP report at ?0.3%, but our baseline is for unchanged. The breakdown is set to show weak consumer spending in Q4, albeit partly related to Olympic driven swings. A modest improvement in the CBI distributive trades survey will offer some encouragement on the UK consumer, but the overall picture remains weak. The February PMI survey at the end of the week, however, is set to see a modest pullback to 50.3 from MARKET ISSUES: Lacklustre data will keep hopes of the “Carney put” active. 1 MARCH US SEQUESTER DEADLINE Unless Congress decides otherwise, 1 March will see $85bn worth of spending cuts strike government programs (with about half on defence spending). Based on recent developments the sequester is likely to kick in on Friday. If not subsequently reversed, our Chief US Economist, Aneta Markowska, estimates that this would take 0.2pp off GDP for the remainder of this year. The next key date on the US budget agenda then is the 27 March expiration of current continuing resolutions. At this stage, the GOP do not intend to shutdown government and we believe they will be happy to extend funding. Should Congress fail to agree a budget blueprint by 15 April, then legislators would see pay withheld. Finally, on 18 May, the temporary removal of the debt ceiling ends. MARKET ISSUES: Uncertainty on the budget outlook is set to remain for now, but once lifted this alone should prove a positive. MIXED GLOBAL SENTIMENT A flurry of sentiment data will hit the tapes this week from across the world. Last week’s advance manufacturing PMI for the euro area declined to 47.8, and this despite gains in Germany and France. The implication is further weakness on the European periphery and we look for weaker sentiment readings in both Italy and Spain for February. In the UK, we also look for modest decline to 50.3. Turning to the US the February PMI should see the third consecutive monthly gain, climbing to 54. In Asia, we expect PMI in China to post a modest gain to 51 after 50.4. A bounce in the Bank of Korea’s business confidence for March will add confidence to the cyclical recovery in Asia, albeit in part related to seasonal factors. MARKET ISSUES: The global economic picture remains divided and with that the debate on the next steps on policy action. While the QE exit debate dominates in the US, the question remains whether the ECB and BoE can and will do more. A NEW BOJ GOVERNOR This week could see a new BoJ governor nominated as Mr Shirakawa prepares to step down on 19 March. According to press, the most likely  candidate is Asian Development Bank President Mr. Kuroda. Mr. Kuroda has been supportive of Abenomics, and this suggests further BoJ easing on the cards. The government will consult with opposition parties before officially presenting the nominee to the Diet, since both the lower and the opposition-lead upper house must confirm the nomination. MARKET ISSUES: With the G20 critical of currency interference, the new BoJ leadership will be careful to communicate any policy easing as having a domestic focus (perfectly mirroring the Fed’s communication on QE).

22 февраля 2013, 04:07

Immigrant Votes Count In NYC's 2013 Mayoral Race

NEW YORK -- A full 40 percent of the people who call New York City home and 30 percent of all its registered voters were born abroad. So it’s no wonder that the Democrats vying to become the city’s next mayor lean heavily on a well-known set of bromides about international migrants, the immigrant experience and their influence on New York. At least two of those running or considered likely to run are themselves immigrants. Immigrants are “woven into the fabric of New York City,” an “essential source of labor,” “innovation,” and amount to the city’s “lifeblood,” candidates contacted by The Huffington Post said. They are also a substantial voting block living in a diverse array of socioeconomic conditions. Jackie Vimo, the director of advocacy at The New York Immigrant Coalition, describes what unites those from Eastern Europe living in Brooklyn with those from Southeast Asia who have relocated to Queens: the struggles to find economic opportunity, suitable work and pay and places to live and educate themselves and their children. “It’s all the stuff that lies in the gap between the lovely things that people say about immigrants in New York City and their lived experiences,” Vimo said. Christine Quinn, the speaker of the New York City Council who also represents a Manhattan district, has not officially declared her candidacy but is widely considered the race’s front runner. Quinn, a white, American-born woman who is both the first female and openly gay individual to serve as the council’s speaker, had about $6.19 million in her campaign coffers as of January, according to New York City Campaign Finance Board records. As speaker, Quinn controls which bills come to the full council for a vote. Quinn’s support for a streamlined permit and inspection process for small business owners -- many of them immigrants -- is well known. The council is also considering legislation that could lower some vendor fines, an issue of huge importance in the city's immigrant communities where many work as vendors or own and operate small stores. “As Speaker I have made it a priority to lessen the burden on New Yorkers who are trying to open and run small businesses,” Quinn wrote The Huffington Post. Quinn has also sponsored a council proposal to fund English-language learning courses for nearly half of the estimated 33,000 young undocumented immigrants living in New York who are eligible for temporary, renewable work permits and visas under the Obama administration’s deferred action program. “This will guide immigrants into safer, higher-earning jobs and career paths and will give students an incentive to stay in school,” Quinn said. Demand for these courses is expected to grow if federal immigration reform includes an English-language proficiency mandate. Critics say that Quinn has blocked votes on a mandatory paid sick-time bill for workers living in the city, and has also courted the endorsement of outgoing Mayor Michael Bloomberg, an independent billionaire intent on creating a business-friendly city. Immigrant workers are clustered in the often low-wage and hourly-pay industries that do not offer paid sick time to their workers, Vimo said. Quinn described the idea of mandating paid sick leave as, “a worthy and admirable goal, one I would like to make available for all,” but said the economy remains too fragile to implement such a requirement for employers at this time. As the economy continues to “evolve,” she plans to discuss the idea with proponents, she siad. John Liu, New York’s Comptroller, a former Queens city councilman and the first Asian-American elected to city-wide office, ranks among the list of undeclared but not exactly cash-poor candidates. Liu, who immigrated to the United States from Taiwan with his parents as a young child, had roughly $3.12 million in his campaign war chest in January, according to public records. (Lui’s campaign fundraising has also been mired in controversy and the subject of at least two investigations. One campaign aid was arrested in November and a second campaign staffer taken into custody this month.) Liu said he was shaped by the experience –- coming to a new country, learning a new language, and watching his father accept a bank teller job far less complicated and prestigious than the work he performed for the Bank of Taiwan, and his mother labor in what he called a sweatshop. He ranks providing quality education to New York City’s children -- particularly those of immigrants –- among his priorities. He also wants to limit the fines and fees assessed against small business owners and ensure that city policy aims to do more than help immigrants, he said. “A lot of times, people will talk about immigrants as an important community that needs services, that needs resources, and that is all true,” Liu said. “But immigrant communities need opportunities, immigrant workers need better wages and sick time. The small businesses they open with their blood, sweat and tears on every block of New York need tax relief.” He believes that the city could use its potentially lucrative contracts with builders, suppliers and service providers to mandate paid-sick time for the low wage, often immigrant workers on their payrolls and create pressure on other business to voluntarily do the same. Liu also wants to see the city carefully examine tax abatements offered to large businesses and the tax rate paid by smaller business, as he believes the latter -- often owned by immigrants –- are helping to subsidize the former. Liu said that 85 percent of the city’s small businesses would owe no corporation taxes under his plan. Bill de Blasio, the New York City Public Advocate, an elected ombudsman between residents and the government, is also vying to lead the city after officially declaring his candidacy in late January. De Blasio, who is white, hails from Brooklyn and his wife is African-American, which some political analysts believe could give him an edge with voters of color. His campaign had collected about $3.53 million in donations as of last month, according to New York Campaign Finance Board records. De Blasio also responded to The Huffington Post’s questions with written statements and references to previous media reports. His staff described de Blasio as a “staunch supporter,” of mandatory, paid sick leave; a man who has focused on efforts to reduce the burden of “excessive fees on small businesses;” and one who has worked to enhance city supports such as technical advice and access to capital that would help immigrant-owned businesses grow. This month, the small-business resource provider ACCION USA and the Fund for Public Advocacy, a nonprofit that is a part of de Blasio’s public advocate office, released a survey of 625 immigrant business owners in all five boroughs. Researchers found that 92 percent started and sustained their businesses without outside help on financing, counseling, marketing or applying for licenses and permits. And nearly four in five business owners said they needed one or more permits or licenses. “This is one of the most dynamic and resilient parts of our economy,” said de Blasio in a statement issued after the survey results were made public. “If they actually received help from the City commensurate with their weight in the economy, they could add thousands more jobs right in their own neighborhoods.” Sal Albanese, another mayoral candidate, is a Democrat, former city schoolteacher and council member who represented a district in Brooklyn. When his campaign reported its fundraising activities in January, Albanese had drawn in $134,615. And, like Liu, Albanese is an immigrant. Born in Italy, Albanese also arrived in the United States with his parents as a young child. His disabled father struggled for nearly two years to find an Italian speaking doctor. His mother labored as a piece worker and sample maker in the city’s once-thriving garment district. Albanese wants to see expanded city spending on ESL courses. Demand is not only likely to increase if Congress makes language proficiency a requirement of immigration reform, but the courses will also help to serve a large backlog of people in need of nighttime and weekend help to learn the English language, according to Albanese. “Obviously language is very, very important,” he said. “I remember where I came here from Italy walking in to a classroom. I couldn’t even tell them where I lived and it was pretty traumatic.” Albanese is also in favor of reducing the fines and fees that can be levied against small businesses, describing these costs as the city’s, "current cash cow.” Albanese wants to put in place a system of fine-free warnings and gradually increasing fines for businesses that fail to comply with city requirements. As a former teacher, Albanese would ideally like to see the city’s college system return to a tuition-free enrollment plan, but said that such a step may not be financially feasible at this time. Instead, he said, other cuts -- such as tax abatements for corporations -- should be eliminated and the savings used to cut tuition prices in half. In the 1990s, while on the city council, Albanese sponsored one of the country’s first living wage bills. A city analysis later found that 70,000 people –- many of them low-wage immigrants -- saw pay increases when the bill became law, he said. Kevin Coenen Jr., a white, American-born retired New York City firefighter who divides his time between a home in Long Island and an apartment in Manhattan, has raised little for the mayoral race. Coenen had $1,600 in his campaign coffers last month, according to public records. Representing several of the city's boroughs -- Coenen was born on Staten Island and raised primarily on Long Island -- his primary concerns include the city’s elevated and rising rents, the continued need for federal immigration reform and the exploitation that the failure to create new policy facilitates. Go into any restaurant in the city and everyone –- the customers, the managers, the staff –- know that the majority of the people working behind the scenes are immigrants, many of them undocumented, he said. And, he noted, the vast majority of these workers make less than minimum wage. Like other Democrats vying for the mayor’s chair, Coenen would like to see limits on the fines levied against vendors and other small business and a clearer, easier appeals process put in place. Business owners should be able to work their way through it without the help of a costly lawyer, he said. “This may sound simple, but I’m really about everybody’s well being,” Coenen said. “Right now in this city, it doesn’t seem as if people are given proper opportunities, the rents are very high, the taxes are very high and too many people are just struggling.” Democrat William “Bill” Thompson Jr., a former New York City Comptroller and the only African-American who has formally declared himself a candidate in the race, and former New York Congressman Anthony Weiner, who has been rumored to be considering a run, did not respond to requests for comment. The city’s mayoral primary is currently set for September but may be moved up to June, according to the New York Daily News.

11 февраля 2013, 16:14

Quiet Start To G-20 "Currency Warfare Conference" Week

In what has been a quiet start to week dominated by the G-20 meeting whose only purpose is to put Japan and its upstart currency destruction in its place, many are expecting a formal G-7 statement on currencies and what is and isn't allowed in currency warfare according to the "New Normal" non-Geneva convention. Because while there may not have been much overnight news, both the EURUSD and USDJPY just waited for Europe to open, to surge right out of the gates, and while the former has been somewhat subdued in the aftermath of the ECB's surprising entry into currency wars last week, it was the latter that was helped by statements from Haruhiko Kuroda (not to be confused with a Yankee's pitcher) who many believe will be the next head of the BOJ, who said that additional BOJ easing can be justified for 2013. He didn't add if that would happen only if he is elected. Expect much more volatility in various FX pairs as the topic of global thermonuclear currency war dominates the airwaves in the coming days. What to expect today via SocGen: A quiet start to the week is not expected to bring major changes to the positioning in currencies from late last week, though a number of pitfalls lie ahead before the G20 finmin meeting gets underway on Thursday. Japan is closed today and China is out for most of this week celebrating Lunar New Year, which should have an impact on liquidity. There is not much data to contend with today and this will put the onus on speeches by ECB members Nowotny and Weidmann. President Draghi managed to stop the ascent of the EUR in its tracks last week when he acknowledged that the appreciation of the currency could lead to a revision next month of the inflation projection. In the meantime, however, crude oil prices are moving quickly towards $120pb. If this proves sustained (not so according to our SG commodities team, year-end target $112.3) and the EUR’s climb is (soon) exhausted, there is not much revision to inflation to be done. Brent crude is up 11% since the last staff forecasts in December. The euro effective exchange rate is up 5% or only half that. If this continues, Draghi’s iteration last week could easily end up being a faux pas. Having said that, (bond) markets would need to decide whether the danger of higher energy prices is a threat to the economic recovery or bring the risk of higher inflation. The G20 meeting is billed as the most important event this week in light of the JPY depreciation and reactions from different export nations. In the past, G7/20 meetings have often been noteworthy for failing to take action. Will it be different this time? Japanese officials tried to calm things down a bit on Friday (though not PM Abe), suggesting that behind the scenes other countries are applying some pressure. Whether that’s enough to re-direct JPY flows remains to be seen. And a full summary of recent events via Deutsche A busy week lies ahead for macro watchers with the Eurogroup/ECOFIN meetings beginning today, followed by Obama's State of the Union address; and BoJ/G20 meetings rounding out the week's calendar. We'll preview more of the week ahead later in today's EMR but first we'll recap some of the more interesting headlines over the weekend. Startingwith Europe first, in Italy the embargo on the publication of opinion polls ahead of upcoming elections began on Saturday. An average of polls calculated by Reuters just prior to the blackout showed the centre-left's Bersani on 34.7%, or 5.7 points ahead of Berlusconi. The anti establishment Five-Star Movement was running third on 16%, with Monti's centrists trailing on 13.6%. DB’s economists believe that a compromise between the PD-led centre-left coalition and Monti’s centre still appears the most likely working solution after the election. The winning coalition at national level will gain at least 54% of the seats in the lower house regardless of the victory margin. In the lower house, although the PD-led  centre-left, whose PM candidate is Bersani, continues to enjoy a non-negligible lead over ex-PM Berlusconi’s centre-right in the opinion polls, the gap between the two coalitions has been shrinking materially. Assuming that the above gap provides a margin large enough for the centre-left to win the majority premium in the lower house, the centre-right could still block the centre-left from obtaining an outright majority in the Parliament by winning in just two large regions such as Lombardy and Veneto in the race for the Senate. Our economists write that it is highly unlikely that ex-PM Berlusconi’s centre-right would gain an outright majority in the Senate. As we've previously stated, the fear was always that the pro-reform parties would not be well clear by the time the poll embargo began, so it will be interesting to see how Italian markets trade in the lead up to elections on the 24th-25th. Across the Atlantic, the focus was on the much smaller-than-expected US trade deficit (December trade balance -$38.5bn vs. -$46.0bn expected). In fact, it was the narrowest trade deficit since January 2010 and was enough to raise Q4 GDP growth from -0.1% as originally reported to +0.7%. The data helped the S&P500 (+0.57%) forge a new post-financial crisis high on Friday of 1517.9, albeit on low volumes as market activity seemed to shut down early ahead of snow storms which hit the North East on the weekend. Indeed S&P500 volumes were the  lowest for a Friday since the last Friday of 2012 (Dec 28th). Staying in the US, it was reported by Bloomberg over the weekend that US Senate democrats are close to finalizing a plan to delay spending sequesters until the end of the year, or a period of 10 months. Half of the cost of the $120bn plan would covered by revenue increases including setting a minimum 30% effective tax rate for the highest income earners and limiting the deductibility of costs in moving jobs outside of the US. The other half would be funded by more specific defense reductions and cuts to agricultural subsidies (Bloomberg). Returning to Europe, in an interview in Germany's Handelsblatt newspaper, the ECB's Asmussen said that France's economic problems "lie within the country" and are not a function of the exchange rate. Asmussen said it was "extremely important" that France meet its public deficit target this year, saying if the forecasts indicate the target being missed, it is in the Paris government's own interest to take additional measures (Reuters). Some better news for Spain with Fitch affirming the country's BBB ratings with negative outlook after the market close on Friday.  Fitch's Spanish rating remains one notch above Moody's and S&P's. Elsewhere in Europe, EU leaders agreed to a 7-year budget that cuts spending for the first time, bowing to UK PM David Cameron's insistence on a real-terms cut in EU spending. The deal sets the budget for 2014-2020 at EUR960bn down from an original proposal of EUR1.047 trillion and less than the EUR994bn spent in the current budget cycle. The budget requires the approval of the European Parliament (Bloomberg). Ahead of today's Eurogroup meeting, the FT is reporting that Eurozone finance ministers are considering a plan for a "bail-in" of uninsured bank depositors and sovereign bond investors in Cyprus. The plan is intended to produce a more sustainable debt position for Cyprus by reducing debt to 77% of GDP compared with 140% under a full bailout plan. The article says that the plan is only one option being considered at this stage with some EU officials cautioning against the risk of contagion if the plan were to be adopted. Moving to Asia and overnight markets have been very quiet with Lunar New Year holidays in China, Hong Kong, Singapore, Taiwan and South Korea. Japan is also closed today for National Founding holidays. Currency markets remain open although liquidity remains generally thin across the board. USDJPY is flat overnight at 92.7, with a small spike after Asian Development Bank President, and potential BoJ governor candidate, Haruhiko Kuroda was quoted as saying that additional monetary easing can be justified for 2013. In addition, Japan's economy minister said on Saturday that the government will step up efforts to lift the economy so that the Nikkei stock index will rise to 13,000 (or 17%) by the end of the first quarter. The Australian dollar is down 0.22% against the greenback at 1.0296 while Australia's ASX200 has closed with a 0.24% loss. Previewing the rest of the week ahead, the IMF's Christine Lagarde will join the Eurogroup meeting today to discuss Cyprus, Greece and direct bank recapitalisations. Obama delivers his annual State of the Union address to Congress on Tuesday. Also on Tuesday, Mario Draghi will appear before the Spanish parliament in Madrid and will probably touch on the ECB's OMT program. The European Commission is scheduled to unveil its proposals for a financial transaction tax on Thursday. On Friday, a two-day G20's central banker governors and finance ministers meeting commences in Moscow where we can expect more rhetoric on currency valuations (or devaluations!). For the data watchers, the highlights will be Wednesday's retail sales report on Wednesday and the advanced Q4 GDP estimate for the Euro area, Germany, France and Italy on Thursday. Consensus is for output to be down 0.4%, 0.5%, 0.2% and 0.6% for the Euro area, Germany, France and Italy respectively. That aside, other notable data include French IP on Monday, Eurozone IP and the BoE's inflation report on Wednesday and UK retail sales on Friday. In the US, Friday's industrial production and Michigan consumer sentiment survey are worth watching. In terms of earnings, 74 of Stoxx600 companies (accounting for 15% of index market cap) will be reporting including Barclays, BNP Paribas, Societe Generale, Nestle and Glencore. The US earnings season begins to wind down with 53 S&P500 companies accounting for 9% of the market cap slated to  report. An Italian bond auction is scheduled for Wednesday where a 2017 floater, 2.75% 2015, 4.5% 2026 and 5% 2040 bonds will be auctioned. In Asia, the BOJ begins its two day meeting on Wednesday. The market expects no change in policy and for the central bank to revise up its assessment of the economy. On the same day, Japan's preliminary 4Q GDP is released - consensus is for Japan to record its first expansion in three quarters (Cons:+0.1% QoQ). A quiet week other in Asia with China closed all week while Hong Kong and Singapore will reopen on Thursday and Wednesday respectively.

08 февраля 2013, 15:50

Friday From the Archives: A Dozen Keepers from March 2005

A Dozen Keepers from March 2005: Brad DeLong : Moving Day...: From Movable Type to Typepad Brad DeLong : Dean Baker, J. Bradford DeLong, and Paul Krugman (2005), "Asset Returns and Economic Growth" http://www.j-bradford-delong.net/movable_type/pdf/BDK-BPEA_20050629.pdf | A note for the next time I teach graduate macro Brad DeLong : A Positive Program for Social Security | Brad DeLong : Four off-the-top-of-my-head reasons to oppose the Bush private-accounts Social Security plan… Brad DeLong : I Should Have Assigned This to My Undergraduates: Sam Bowles and Herb Gintis (2002), "The Inheritance of Inequality" http://www.umass.edu/preferen/gintis/intergen.pdf Brad DeLong : The Innumerate Right (Michael Barone Is an Embarrassment to the Press Corps Edition) Brad DeLong : The Washington Post Says: "Shut Up About Paul Wolfowitz's Qualifications or We'll Kill Your Development Bank!" Brad DeLong : "Packed with Economists"?: The Economist says that the 1993 Clinton health care plan was designed by economists. Economists disagree Brad DeLong : Some Damn Fool Thing in the Strait of Taiwan: I was reading the always-incisive (though sometimes mad) Niall Ferguson… Brad DeLong : M$FT: I never understood Microsoft as a business… Brad DeLong : Joenertia II: Joe Lieberman is an awful man, and was an awful senator Brad DeLong : Getting Really Medieval: Eugene Volokh wishes our constitution had been written not by James Madison but by Ruhollah Khomeini Brad DeLong : George W. Bush Goes Way Off Message Brad DeLong : Mankiw 0, Liberals 3: Specious and misleading arguments for George W. Bush's Social Security privatization plan weblogging

04 февраля 2013, 20:00

Strong deposits

YUAN deposits in Taiwan may reach 140 billion yuan (US$22 billion) within a year after local banks in the island launch yuan business this week, a private report said. The banks can take deposits and extend loans in yuan this week at the earliest after establishing clearing accounts with the Bank of China's Taipei branch. The sources of yuan liquidity in Taiwan come from Taiwan's bilateral trade surplus with China's mainland, deposits held by Taiwan offshore banking units, and deposits to be transferred by Taiwan businesses in Hong Kong, DBS Bank said in a report yesterday.

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04 февраля 2013, 12:53

Taiwan expected to increase use of yuan

TAIWAN'S yuan liquidity pool is expected to reach 140 billion yuan (US$22 billion) within a year after banks on the island launched business in the currency this week, a private report said.

30 января 2013, 18:44

Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings

Michael Snyder, ContributorActivist Post Does a shadowy group of obscenely wealthy elitists control the world?  Do men and women with enormous amounts of money really run the world from behind the scenes?  The answer might surprise you.  Most of us tend to think of money as a convenient way to conduct transactions, but the truth is that it also represents power and control.  And today we live in a neo-feudalist system in which the super rich pull all the strings.  When I am talking about the ultra-wealthy, I am not just talking about people that have a few million dollars. As you will see later in this article, the ultra-wealthy have enough money sitting in offshore banks to buy all of the goods and services produced in the United States during the course of an entire year and still be able to pay off the entire U.S. national debt.  That is an amount of money so large that it is almost incomprehensible. Under this neo-feudalist system, all the rest of us are debt slaves, including our own governments.  Just look around - everyone is drowning in debt, and all of that debt is making the ultra-wealthy even wealthier.  But the ultra-wealthy don't just sit on all of that wealth.  They use some of it to dominate the affairs of the nations.  The ultra-wealthy own virtually every major bank and every major corporation on the planet.  They use a vast network of secret societies, think tanks and charitable organizations to advance their agendas and to keep their members in line.  They control how we view the world through their ownership of the media and their dominance over our education system. They fund the campaigns of most of our politicians and they exert a tremendous amount of influence over international organizations such as the United Nations, the IMF, the World Bank and the WTO.  When you step back and take a look at the big picture, there is little doubt about who runs the world.  It is just that most people don't want to admit the truth.The ultra-wealthy don't run down and put their money in the local bank like you and I do.  Instead, they tend to stash their assets in places where they won't be taxed such as the Cayman Islands. According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe. google_ad_client = "pub-1897954795849722"; /* 468x60, created 6/30/10 */ google_ad_slot = "8230781418"; google_ad_width = 468; google_ad_height = 60; U.S. GDP for 2011 was about 15 trillion dollars, and the U.S. national debt is sitting at about 16 trillion dollars, so you could add them both together and you still wouldn't hit 32 trillion dollars. And of course that does not even count the money that is stashed in other locations that the study did not account for, and it does not count all of the wealth that the global elite have in hard assets such as real estate, precious metals, art, yachts, etc. The global elite have really hoarded an incredible amount of wealth in these troubled times.  The following is from an article on the Huffington Post website... Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens, representing up to $280 billion in lost income tax revenues, according to research published on Sunday. The study estimating the extent of global private financial wealth held in offshore accounts - excluding non-financial assets such as real estate, gold, yachts and racehorses - puts the sum at between $21 and $32 trillion. The research was carried out for pressure group Tax Justice Network, which campaigns against tax havens, by James Henry, former chief economist at consultants McKinsey & Co. He used data from the World Bank, International Monetary Fund, United Nations and central banks. But as I mentioned previously, the global elite just don't have a lot of money.  They also basically own just about every major bank and every major corporation on the entire planet. According to an outstanding NewScientist article, a study of more than 40,000 transnational corporations conducted by the Swiss Federal Institute of Technology in Zurich discovered that a very small core group of huge banks and giant predator corporations dominate the entire global economic system... An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. The researchers found that this core group consists of just 147 very tightly knit companies... When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group. The following are the top 25 banks and corporations at the heart of this "super-entity".  You will recognize many of the names on the list... 1. Barclays plc 2. Capital Group Companies Inc 3. FMR Corporation 4. AXA 5. State Street Corporation 6. JP Morgan Chase & Co 7. Legal & General Group plc 8. Vanguard Group Inc 9. UBS AG 10. Merrill Lynch & Co Inc 11. Wellington Management Co LLP 12. Deutsche Bank AG 13. Franklin Resources Inc 14. Credit Suisse Group 15. Walton Enterprises LLC 16. Bank of New York Mellon Corp 17. Natixis 18. Goldman Sachs Group Inc 19. T Rowe Price Group Inc 20. Legg Mason Inc 21. Morgan Stanley 22. Mitsubishi UFJ Financial Group Inc 23. Northern Trust Corporation 24. Société Générale 25. Bank of America Corporation The ultra-wealthy elite often hide behind layers and layers of ownership, but the truth is that thanks to interlocking corporate relationships, the elite basically control almost every Fortune 500 corporation. The amount of power and control that this gives them is hard to describe. Unfortunately, this same group of people have been running things for a very long time.  For example, New York City Mayor John F. Hylan said the following during a speech all the way back in 1922... The real menace of our Republic is the invisible government, which like a giant octopus sprawls its slimy legs over our cities, states and nation. To depart from mere generalizations, let me say that at the head of this octopus are the Rockefeller-Standard Oil interests and a small group of powerful banking houses generally referred to as the international bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes. They practically control both parties, write political platforms, make catspaws of party leaders, use the leading men of private organizations, and resort to every device to place in nomination for high public office only such candidates as will be amenable to the dictates of corrupt big business. These international bankers and Rockefeller-Standard Oil interests control the majority of the newspapers and magazines in this country. They use the columns of these papers to club into submission or drive out of office public officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government. It operates under cover of a self-created screen [and] seizes our executive officers, legislative bodies, schools, courts, newspapers and every agency created for the public protection. These international bankers created the central banks of the world (including the Federal Reserve), and they use those central banks to get the governments of the world ensnared in endless cycles of debt from which there is no escape.  Government debt is a way to "legitimately" take money from all of us, transfer it to the government, and then transfer it into the pockets of the ultra-wealthy. Today, Barack Obama and almost all members of Congress absolutely refuse to criticize the Fed, but in the past there have been some brave members of Congress that have been willing to take a stand.  For example, the following quote is from a speech that Congressman Louis T. McFadden delivered to the U.S. House of Representatives on June 10, 1932... Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and iniquities of the Federal Reserve Board has cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it. Sadly, most Americans still believe that the Federal Reserve is a "federal agency", but that is simply not correct.  The following comes from factcheck.org... The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system, and thus own the Fed banks. According to researchers that have looked into the ownership of the big Wall Street banks that dominate the Fed, the same names keep coming up over and over: the Rockefellers, the Rothschilds, the Warburgs, the Lazards, the Schiffs and the royal families of Europe. But ultra-wealthy international bankers have not just done this kind of thing in the United States.  Their goal was to create a global financial system that they would dominate and control.  Just check out what Georgetown University history professor Carroll Quigley once wrote... [T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Sadly, most Americans have never even heard of the Bank for International Settlements, but it is at the very heart of the global financial system.  The following is from Wikipedia... As an organization of central banks, the BIS seeks to make monetary policy more predictable and transparent among its 58 member central banks. While monetary policy is determined by each sovereign nation, it is subject to central and private banking scrutiny and potentially to speculation that affects foreign exchange rates and especially the fate of export economies. Failures to keep monetary policy in line with reality and make monetary reforms in time, preferably as a simultaneous policy among all 58 member banks and also involving the International Monetary Fund, have historically led to losses in the billions as banks try to maintain a policy using open market methods that have proven to be based on unrealistic assumptions. The ultra-wealthy have also played a major role in establishing other important international institutions such as the United Nations, the IMF, the World Bank and the WTO.  In fact, the land for the United Nations headquarters in New York City was purchased and donated by John D. Rockefeller.The international bankers are "internationalists" and they are very proud of that fact. The elite also dominate the education system in the United States.  Over the years, the Rockefeller Foundation and other elitist organizations have poured massive amounts of money into Ivy League schools.  Today, Ivy League schools are considered to be the standard against which all other colleges and universities in America are measured, and the last four U.S. presidents were educated at Ivy League schools. The elite also exert a tremendous amount of influence through various secret societies (Skull and Bones, the Freemasons, etc.), through some very powerful think tanks and social clubs (the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, the Bohemian Grove, Chatham House, etc.), and through a vast network of charities and non-governmental organizations (the Rockefeller Foundation, the Ford Foundation, the World Wildlife Fund, etc.). But for a moment, I want to focus on the power the elite have over the media.  In a previous article, I detailed how just six monolithic corporate giants control most of what we watch, hear and read every single day.  These giant corporations own television networks, cable channels, movie studios, newspapers, magazines, publishing houses, music labels and even many of our favorite websites. Considering the fact that the average American watches 153 hours of television a month, the influence of these six giant corporations should not be underestimated.  The following are just some of the media companies that these corporate giants own...Time Warner Home Box Office (HBO) Time Inc. Turner Broadcasting System, Inc. Warner Bros. Entertainment Inc. CW Network (partial ownership) TMZ New Line Cinema Time Warner Cable Cinemax Cartoon Network TBS TNT America Online MapQuest Moviefone Castle Rock Sports Illustrated Fortune Marie Claire People MagazineWalt Disney ABC Television Network Disney Publishing ESPN Inc. Disney Channel SOAPnet A&E Lifetime Buena Vista Home Entertainment Buena Vista Theatrical Productions Buena Vista Records Disney Records Hollywood Records Miramax Films Touchstone Pictures Walt Disney Pictures Pixar Animation Studios Buena Vista Games Hyperion BooksViacom Paramount Pictures Paramount Home Entertainment Black Entertainment Television (BET) Comedy Central Country Music Television (CMT) Logo MTV MTV Canada MTV2 Nick Magazine Nick at Nite Nick Jr. Nickelodeon Noggin Spike TV The Movie Channel TV Land VH1News Corporation Dow Jones & Company, Inc. Fox Television Stations The New York Post Fox Searchlight Pictures Beliefnet Fox Business Network Fox Kids Europe Fox News Channel Fox Sports Net Fox Television Network FX My Network TV MySpace News Limited News Phoenix InfoNews Channel Phoenix Movies Channel Sky PerfecTV Speed Channel STAR TV India STAR TV Taiwan STAR World Times Higher Education Supplement Magazine Times Literary Supplement Magazine Times of London 20th Century Fox Home Entertainment 20th Century Fox International 20th Century Fox Studios 20th Century Fox Television BSkyB DIRECTV The Wall Street Journal Fox Broadcasting Company Fox Interactive Media FOXTEL HarperCollins Publishers The National Geographic Channel National Rugby League News Interactive News Outdoor Radio Veronica ReganBooks Sky Italia Sky Radio Denmark Sky Radio Germany Sky Radio Netherlands STAR ZondervanCBS Corporation CBS News CBS Sports CBS Television Network CNET Showtime TV.com CBS Radio Inc. (130 stations) CBS Consumer Products CBS Outdoor CW Network (50% ownership) Infinity Broadcasting Simon & Schuster (Pocket Books, Scribner) Westwood One Radio NetworkNBC Universal Bravo CNBC NBC News MSNBC NBC Sports NBC Television Network Oxygen SciFi Magazine Syfy (Sci Fi Channel) Telemundo USA Network Weather Channel Focus Features NBC Universal Television Distribution NBC Universal Television Studio Paxson Communications (partial ownership) Trio Universal Parks & Resorts Universal Pictures Universal Studio Home Video And of course the elite own most of our politicians as well.  The following is a quote from journalist Lewis Lapham... "The shaping of the will of Congress and the choosing of the American president has become a privilege reserved to the country’s equestrian classes, a.k.a. the 20% of the population that holds 93% of the wealth, the happy few who run the corporations and the banks, own and operate the news and entertainment media, compose the laws and govern the universities, control the philanthropic foundations, the policy institutes, the casinos, and the sports arenas." Have you ever wondered why things never seem to change in Washington D.C. no matter who we vote for? Well, it is because both parties are owned by the establishment. It would be nice to think that the American people are in control of who runs things in the U.S., but that is not how it works in the real world. In the real world, the politician that raises more money wins more than 80 percent of the time in national races. Our politicians are not stupid - they are going to be very good to the people that can give them the giant piles of money that they need for their campaigns.  And the people that can do that are the ultra-wealthy and the giant corporations that the ultra-wealthy control. Are you starting to get the picture? There is a reason why the ultra-wealthy are referred to as "the establishment".  They have set up a system that greatly benefits them and that allows them to pull the strings. So who runs the world? They do.  In fact, they even admit as much. David Rockefeller wrote the following in his 2003 book entitled "Memoirs"... "For more than a century, ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that is the charge, I stand guilty, and I am proud of it." There is so much more that could be said about all of this.  In fact, an entire library of books could be written about the power and the influence of the ultra-wealthy international bankers that run the world. But hopefully this is enough to at least get some conversations started. So what do you think about all of this?  Please feel free to post a comment with your thoughts below...This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. var linkwithin_site_id = 557381; linkwithin_text='Related Articles:' Enter Your Email To Receive Our Daily Newsletter Close var fnames = new Array();var ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';fnames[1]='FNAME';ftypes[1]='text';fnames[2]='LNAME';ftypes[2]='text';var err_style = ''; try{ err_style = mc_custom_error_style; } catch(e){ err_style = 'margin: 1em 0 0 0; padding: 1em 0.5em 0.5em 0.5em; background: FFEEEE none repeat scroll 0% 0%; font- weight: bold; float: left; z-index: 1; width: 80%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz- initial; -moz-background-inline-policy: -moz-initial; color: FF0000;'; } var mce_jQuery = jQuery.noConflict(); mce_jQuery(document).ready( function($) { var options = { errorClass: 'mce_inline_error', errorElement: 'div', errorStyle: err_style, onkeyup: function(){}, onfocusout:function(){}, onblur:function(){} }; var mce_validator = mce_jQuery("#mc-embedded-subscribe-form").validate(options); options = { url: 'http://activistpost.us1.list-manage.com/subscribe/post-json? u=3ac8bebe085f73ea3503bbda3&id=b0c7fb76bd&c=?', type: 'GET', dataType: 'json', contentType: "application/json; charset=utf-8", beforeSubmit: function(){ mce_jQuery('#mce_tmp_error_msg').remove(); mce_jQuery('.datefield','#mc_embed_signup').each( function(){ var txt = 'filled'; var fields = new Array(); var i = 0; mce_jQuery(':text', this).each( function(){ fields[i] = this; i++; }); mce_jQuery(':hidden', this).each( function(){ if ( fields[0].value=='MM' && fields[1].value=='DD' && fields[2].value=='YYYY' ){ this.value = ''; } else if ( fields[0].value=='' && fields [1].value=='' && fields[2].value=='' ){ this.value = ''; } else { this.value = fields[0].value+'/'+fields[1].value+'/'+fields[2].value; } }); }); return mce_validator.form(); }, success: mce_success_cb }; mce_jQuery('#mc-embedded-subscribe-form').ajaxForm(options); }); function mce_success_cb(resp){ mce_jQuery('#mce-success-response').hide(); mce_jQuery('#mce-error-response').hide(); if (resp.result=="success"){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(resp.msg); mce_jQuery('#mc-embedded-subscribe-form').each(function(){ this.reset(); }); } else { var index = -1; var msg; try { var parts = resp.msg.split(' - ',2); if (parts[1]==undefined){ msg = resp.msg; } else { i = parseInt(parts[0]); if (i.toString() == parts[0]){ index = parts[0]; msg = parts[1]; } else { index = -1; msg = resp.msg; } } } catch(e){ index = -1; msg = resp.msg; } try{ if (index== -1){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } else { err_id = 'mce_tmp_error_msg'; html = ' '+msg+' '; var input_id = '#mc_embed_signup'; var f = mce_jQuery(input_id); if (ftypes[index]=='address'){ input_id = '#mce-'+fnames[index]+'-addr1'; f = mce_jQuery(input_id).parent().parent().get(0); } else if (ftypes[index]=='date'){ input_id = '#mce-'+fnames[index]+'-month'; f = mce_jQuery(input_id).parent().parent().get(0); } else { input_id = '#mce-'+fnames[index]; f = mce_jQuery().parent(input_id).get(0); } if (f){ mce_jQuery(f).append(html); mce_jQuery(input_id).focus(); } else { mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } } } catch(e){ mce_jQuery('#mce-'+resp.result+'-response').show(); mce_jQuery('#mce-'+resp.result+'-response').html(msg); } } } BE THE CHANGE! 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27 января 2013, 01:00

Dave Eggers: 'We tend to look everywhere but the mirror' – interview

Novelist and publisher Dave Eggers on writing, politics, the state of the States, and his latest novel, A Hologram for a KingYour portrayal of Saudi Arabia [in A Hologram for the King] sounds note-perfect – from the female surgeon who wears male trunks to go swimming to the foreign labourers fighting over a discarded cellphone. Did you do research trips there? What did you think about it as a country?I went to Saudi Arabia in 2010, and spent most of my time in Jeddah and the King Abdullah Economic City. Before I went, I'd talked to friends who visited the kingdom, and some who'd lived there, so I had some sense of what to expect. But when I got there, what struck me more than anything was how quickly it's changing. The internet arrived about 10 years ago, and more and more people have access to satellite TV, and now the youth of Saudi are insisting on change. And under King Abdullah, there's been movement on many fronts. The King Abdullah University of Science and Technology is one example — women and men mix more freely there – and the arts in general are far more accepted and even liberated than ever before. I did a forum recently with three young Saudi artists, including Haifaa Al-Mansour, the first feature-film director from the kingdom, and all three were optimistic about where things are headed. In 10 more years, I think we'll see some profound reforms. The "hologram" of the title seems to refer not only to a new kind of IT technology but to the idea that the systems of modern finance were built on a mirage. Do you think capitalism has been shown wanting? Did we lose something tangible and real during those years we believed in endless credit?There's also the hologram of Alan's life. He's been raised to expect that, as an American businessman, he'll be given a certain kind of regal treatment abroad, but finds that things have changed. He's on the sidelines now, and has no idea how to get back into the game. And at home, the American Dream that was promised to guys like Alan seems increasingly unavailable. The financial system, the banks, the venture capitalists — these players don't have use for a guy like Alan. Your prose in Hologram is sparse; so subtle it creeps up on you. How much do you work on your prose style? Do you need to keep reminding yourself to strip it back?Getting the tone just right for Hologram took a while. I'm naturally inclined toward a more dense, maximalist style, but that wouldn't have been right for this book, and for Alan's story. He's a middle-aged man stuck in a desert, so the prose had to be spare and exact. Did you consciously set out to write a novel about the global financial crisis?I'd been taking notes for a few years for a novel about a man who'd been in manufacturing, but found himself adrift when his industry moved to Taiwan and China. I grew up north of Chicago, not far from where the Schwinn bicycle plant used to be, and was conscious of the fact that these beautiful, everlasting bikes were made just down the road. When the plant closed, psychically it was a big blow to Chicago, and ever since, there's been very little manufacturing done in or near the city. And that's very strange, given how central industry had been to the city's identity since the beginning.So I'd been thinking about this guy, Alan Clay, who he was and where he was in his life, and then one day I heard about the King Abdullah Economic City, and about American businessmen waiting in the desert for an audience with the king. That seemed the perfect place for Alan, for a guy who knows he's in trouble but doesn't know how to find his way out. So he travels thousands of miles, to a desert, to wait for the approval of a despot. I liked that; it has a strong parallel to our own economy. The American economy had a lot of problems, and for the solutions we tend to look everywhere but the mirror. Is it true you write without the distraction of the internet? Do you think the internet helps or hinders thought processes?I've never had WiFi at home. I'm too easily distracted, and YouTube is too tempting. About eight years ago, I had a DSL line for about three months, and I remember waking up one day, thinking I'd spend a few minutes on YouTube before getting to work. Next time I looked up, it was 1pm, and I was watching a 20-year-old video by Kajagoogoo. That proved that I couldn't have WiFi at home. You're married to a writer. Do you show her your work as you're writing it?I do. Periodically I'll ask Vendela [Vida] to look at something, to make sure I'm not wasting my time. The book shows both a man and a global system in stasis. How much of this was influenced by your own impending middle age?Impending nothing. I'm 42, which is middle age in my world. The last couple days, actually, I've had this feeling that my ribs are broken, all of them. It hurts to walk, to breathe. I can't figure that out. Could I have broken all my ribs while sleeping or sitting on the couch? I need to figure this out.A Hologram for the King is a beautiful physical object: how important is it for you that a book is a thing to be cherished?McSweeney's as a publishing company is built on a business model that only works when we sell physical books. So we try to put a lot of effort into the design and production of the book-as-object. For Hologram, we worked with a great printer near Detroit, and that collaboration proved, on a small level, that you can make manufacturing work here in the States if you're willing to work within the capabilities of existing machinery and expertise — and the occasional constraints can actually make the object better. Besides, the manufacturing costs in China, when you consider time and shipping, make Detroit more logical much of the time.You founded one of the most influential literary magazines in the US. Do you feel pessimistic about the future of publishing?There's never been a better time, I don't think, to be a writer or publisher. The playing field is more democratic than ever, in that any small publisher can get a book to any reader in the world with relative ease. That's very new, and good for everyone. I'm also encouraged because it looks like ebooks' share of the market might be levelling out. I always hoped there'd be a plateau, and after that, ebooks and physical books would enjoy a kind of permanent détente. At least for the moment, that seems to be what's happening.Do you own a Kindle?I don't. I've never read a page on an e-reader. But I have no problem with them as another path to the text. But for me, because I write on a Mac, I spend so many hours looking at a screen already, so when I want to read a book or a newspaper, I like the paper in my hands – for contrast as much as anything.You're the founder of 826 Valencia and have done a lot of human rights and charity work over the years. Should authors have a moral conscience?I don't know if authors should as a rule do anything but try to write well. But sitting in your garage, writing – or pretending to write, while actually watching Kajagoogoo videos – sometimes it makes you feel a little useless. Sometimes you feel like getting out in the world and seeing if you can be useful in some more immediate or tangible way. With our nonprofits, they all emerged from situations where it just seemed logical. I knew teachers, and I knew writers with free time on their hands, so it made sense to create a centre where we could help schools with one-on-one attention to student writing. That idea works everywhere, and in London it works with the Ministry of Stories (cofounded by Nick Hornby) and First Story.You've experienced the shocking and sudden deaths of close family members: are you scared of death?Well, there's a familiarity now that precludes fear.Why did you choose to do this interview over email?My hope is that I sound smarter and more focused this way. In person I tend to ramble.You're famed for blending fact and fiction: how difficult is that to pull off? Do you find facts liberating or restricting?These days, I don't have any nonfiction planned. Writing fiction is far more liberating and enjoyable on a daily basis. But I came up as a journalist, and my education was as a journalist, so research, and trying to tell a story that might have an impact – those things will likely always be part of the mix.President Obama recommended his cabinet read What Is the What. Have you ever met the president and, if so, what was he like?I met him briefly, during the campaign, back in 2008. There was a small fundraiser in Berkeley, and we all got to spend a few minutes with him. I've met some other elected leaders over the years, and almost uniformly there's a stiffness about them, a certain distance — even if they're known for their charm. But Obama has a realness about him that's not fakeable. He is exactly who he appears to be. I don't have to tell anyone from London what a bonehead Romney is, but outside of being a verbal klutz, he was the most unknowable, and mercurial, and utterly dangerous, politician since Nixon. With President Obama, you know who he is morning, noon and night. That kind of certainty, and moral clarity, is essential to a country trying to find its footing again.What is the best book you read last year?There are a bunch of books I could mention, but the book I find myself pushing on people more than any other is The Yellow Birds by Kevin Powers. The author fought in Iraq with the US army, and then, many years later, this gorgeous novel emerged. Next to The Forever War by Dexter Filkins, it's the best thing I've read about the war in Iraq, and by far the best novel. Powers is a poet first, so the book is spare, incredibly precise, unimproveable. And it's easily the saddest book I've read in many years. But sad in an important way. We need to feel sad, profoundly sad, about what we did in Iraq. We deserve a hundred years of sadness.Dave EggersFictionPublishingElizabeth Dayguardian.co.uk © 2013 Guardian News and Media Limited or its affiliated companies. 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25 января 2013, 20:39

Taiwan to let banks do yuan trade

TAIWAN will follow Hong Kong and Singapore as an offshore yuan center by allowing local banks to conduct yuan business.

25 января 2013, 16:44

Frontrunning: January 25

Fed Pushes Into ‘Uncharted Territory’ With Record Assets (BBG) Next up in the currency wars: Korea - Samsung Drops on $2.8 Billion Won Profit-Cut Prediction (BBG) China Warns ‘Hot Money’ Inflows Possible on Easing From Abroad (Bloomberg) BOJ Shirakawa affirms easy policy pledge but warns of costs (Reuters) Merkel Takes a Swipe at Japan Over Yen (WSJ) Wages in way of Abe’s war on deflation (FT) Italian PM under fire over bank crisis (FT) Senior officials urge calm over islands dispute (China Daily) Spain tries to peel back business rules (FT) Rifts Over Cyprus Bailout Feed Broader Fears (WSJ) Soros Says the Euro Is Here to Stay as Currency War Looms (BBG) Deutsche Bank Debt Salesmen Said to Go Amid Pay Overhaul (BBG) Cameron pitches new deal as good for EU (FT)   Overnight Media Digest WSJ * U.S. President Barack Obama nominated a former prosecutor turned white-collar criminal defender, Mary Jo White, as his choice for top U.S. securities regulator. * Microsoft's quarterly earnings slipped 3.7 percent as the software giant reported weaker sales in its business and entertainment divisions, though revenue in its core Windows business strengthened. * Citigroup Inc's private bank has decided to pull its $187 million investment from SAC Capital Advisors LP, the latest in a string of client defections that have occurred amid scrutiny of the hedge-fund firm. * JP Morgan will not be trying 'staple financing' in the potential Dell deal, a possible ramification of a court decision criticizing what was once a common practice on Wall Street. * Samsung Electronics Co on Friday said its fourth-quarter profit rose 76 percent to a record high on strong smartphone sales and higher margins in its chip business. * Morgan Stanley Chairman and Chief Executive James Gorman is expected to take a second straight annual pay cut for 2012, as the securities firm continues to struggle to get back on track. * Casino operator Las Vegas Sands Corp has stopped executing international money transfers for its high-rolling customers and is overhauling its compliance procedures as it faces scrutiny from U.S. and international regulators, people familiar with the matter said. * Bristol-Myers Squibb Co agreed to pay $80 million to settle cases involving 15 patients killed or hurt during company-sponsored testing of an experimental drug for hepatitis C.   FT BARCLAYS EXECUTIVES FACE MOUNTING LIBOR PRESSURE Top executives at Barclays were aware the bank was manipulating its submissions to Libor rate-setting panel in November 2011, almost a year earlier than previously disclosed, emails suggested. (link.reuters.com/tud55t) OSBORNE STICKS TO AUSTERITY PLAN Finance minister George Osborne will not be diverted from his austerity plan even if data on the strength of British economy disappoints. (link.reuters.com/xud55t) GOVERNMENT TO DELIVER CHILDCARE BOOST Britain's coalition government is planning to spend 1.5 billion pounds on a package of measures to help families cope with nursery fees. (link.reuters.com/vud55t) FEARS RAISED OVER ECB FUNDING SCHEME Senior bankers are becoming increasingly concerned about the European Central Bank's special longer-term funding scheme, saying that it could encourage the creation of a two-tier banking market. (link.reuters.com/dyd55t) RETAILERS MAKE APPEAL ON TAX AVOIDANCE High street retailers said the government needed to take action to stop tax avoidance by multinational companies. (link.reuters.com/bed55t) RIM BOOSTED BY LENOVO INTEREST Lenovo has signalled it could be interested in buying Research In Motion, lifting the shares in the troubled Canadian maker of BlackBerry smartphones   NYT * U.S. President Barack Obama tapped Mary Jo White, a former United States attorney turned white-collar defense lawyer, to lead the Securities and Exchange Commission. He also renominated Richard Cordray as director of the Consumer Financial Protection Bureau. * Jill Sommers, a Republican regulator overseeing the investigation into MF Global's collapse, has abruptly decided to depart the Commodity Futures Trading Commission, the agency said. * After a year of mixed financial performance at Morgan Stanley, the firm's chief executive, James Gorman, is expected to take a second annual pay cut. * AT&T sold a record number of smartphones over the holiday season, but its quarterly earnings took a hit from pension costs and Hurricane Sandy. * Microsoft's biggest product in decades, Windows 8, helped lift sales of the company's flagship operating system business, but not enough to rejuvenate overall growth. * Greenhill reported a 4 percent drop in advisory revenue last year, a week after larger rivals JPMorgan Chase & Co and Morgan Stanley posted much larger declines. * HCA Holdings, the largest profit-making hospital chain in the United States, was ordered to pay $162 million after a judge ruled that it had failed to abide by an agreement to make improvements to dilapidated hospitals that it bought in the Kansas City area several years ago. * A federal appeals court in the United States tossed out $172 million in damages that Mattel had been ordered to pay MGA Entertainment, the maker of Bratz dolls. It was the latest move in a bitter nine-year legal dis   Canada THE GLOBE AND MAIL * An executive from a Quebec engineering firm has testified that many of the province's top engineering companies, including the troubled giant SNC Lavalin Group Inc, colluded to pay political kickbacks and to win fixed construction contracts. Michel Lalonde, the president of Genius Conseil, told Quebec's construction inquiry on Thursday that a list of top companies were complicit in the scheme to secure road and sewer design and construction surveillance contracts by sending bribes and kickbacks to the political party headed by the city's mayor. * Shawn Atleo, national chief of Assembly of First Nations, said any divisions in the aboriginal community are trumped by shared objectives, including ending "the status quo", and that many of the community's goals are similar to those of the rest of Canadians. Reports in the business section: * Talisman Energy Inc plans to slash its general and administrative (G&A) costs by "at least 20 per cent over all", Helen Wesley, the company's executive vice president of corporate services, told the CIBC Whistler Institutional Investor Conference on Thursday. * Agrium Inc raised its fourth-quarter earnings estimate based on robust grain and oilseed prices that are helping boost demand for its fertilizers and other products. The Calgary-based company said it expects fourth-quarter earnings to be slightly above C$2 per share, compared with its previous guidance of C$1.50 to C$1.90. NATIONAL POST * Facing drastically falling oil revenue, Alberta Premier Alison Redford set the stage for serious spending cuts and possible tax hikes during a televised fireside chat on Thursday. Redford blamed a "bitumen bubble" and warned Albertans about austere times to come. The government has forecast a deficit in the current fiscal year of C$3 billion. FINANCIAL POST * At least one Calgary oil executive is appealing to Canadian pocket books as the U.S. state department decides the fate of TransCanada Corp's Alberta-to-Texas Keystone XL pipeline. Export constraints on Alberta heavy oil production are costing each Canadian C$1,200 per year, Cenovus Energy Inc CEO Brian Ferguson said on Thursday. * Canadian wireless carriers must make changes to their networks and systems to support 911 emergency text messages from hearing and speech impaired persons, the federal telecom regulator said on Thursday. The service would only be provided to the hearing and speech impaired who have pre-registered for it with their wireless carrier, the Canadian Radio-television and Telecommunications Commission (CRTC) said.   China CHINA SECURITIES JOURNAL -- China will build six control standards, including PM2.5, in 113 cities and will release the monitoring data before the end of December this year, Environment Minister Zhou Shengxian said. -- The number of Chinese mobile phone users reached 1.11 billion as of the end of 2012, according to Ministry of Industry and Information Technology data released on Thursday. -- China Financial Futures Exchanges has approved the application of account opening from several QFII institutions. CHINA DAILY (www.chinadaily.com.cn) -- Alibaba Group Holdings, China's largest e-commerce company, plans to join hands with partners to build a logistics network across China that can support 100 billion yuan worth of transactions a year within the next decade. -- China is expected to lead emerging economies in spending on consumable products, with an estimated average annual increase in total consumer spending of 15 percent every year to 2016, according to a report released by the Economist Intelligence Unit and U.K. research firm Mintel. SHANGHAI DAILY -- Shanghai expects to set up China's first free trade zone in Waigaoqiao in Pudong New Area as the city bids to become a global trade hub by 2020, a senior official said. Unlike a bonded area, a free trade zone offers businesses lower taxes, a more liberal currency exchange and better efficiency due to less supervision. CHINA BUSINESS NEWS -- New bank loans in January are expected to reach between 1 trillion yuan and 1.2 trillion yuan as the economy rebounds, according to market participants. Total new loans for 2013 are expected to reach 8.5 trillion yuan to 9 trillion yuan.   Fly On The Wall 7:00 Market Snapshot ANALYST RESEARCH Upgrades AMC Networks (AMCX) upgraded to Equal Weight from Underweight at Morgan StanleyAutodesk (ADSK) upgraded to Conviction Buy from Sell at GoldmaneBay (EBAY) upgraded to Outperform from Market Perform at BernsteinEQT Midstream Partners (EQM) upgraded to Outperform from Neutral at Credit SuisseHorizon Bancorp (HBNC) upgraded to Outperform from Market Perform at Raymond JamesJPMorgan (JPM) upgraded to Buy from Hold at Deutsche BankKLA-Tencor (KLAC) upgraded to Hold from Sell at Deutsche BankNetEase.com (NTES) upgraded to Buy from Neutral at UBSQLogic (QLGC) upgraded to Equal Weight from Underweight at Morgan StanleySTMicroelectronics (STM) upgraded to Outperform from Neutral at Exane BNP ParibasSony (SNE) upgraded to Buy from Neutral at BofA/MerrillTiffany (TIF) upgraded to Overweight from Neutral at HSBCUnion First Market (UBSH) upgraded to Outperform from Neutral at RW Baird Downgrades Canadian Pacific (CP) downgraded to Sell from Hold at CanaccordCity National (CYN) downgraded to Neutral from Buy at SunTrustDime Community (DCOM) downgraded to Equal Weight from Overweight at BarclaysFlextronics (FLEX) downgraded to Neutral from Buy at UBSFlowserve (FLS) downgraded to Buy from Strong Buy at CL KingFord (F) downgraded to Equal Weight from Overweight at BarclaysGoldman Sachs (GS) downgraded to Hold from Buy at Deutsche BankGoldman Sachs (GS) downgraded to Neutral from Buy at CitigroupHanmi Financial (HAFC) downgraded to Market Perform from Outperform at FBR CapitalIAMGOLD (IAG) downgraded to Neutral from Buy at BofA/MerrillJanus Capital (JNS) downgraded to Sell from Neutral at CitigroupJanus Capital (JNS) downgraded to Underperform from Neutral at Credit SuisseMedtronic (MDT) downgraded to Hold from Buy at WunderlichNoble Corp. (NE) downgraded to Hold from Buy at JefferiesScripps Networks (SNI) downgraded to Underweight from Equal Weight at Morgan StanleySelect Comfort (SCSS) downgraded to Equal Weight from Overweight at BarclaysSkullcandy (SKUL) downgraded to Neutral from Overweight at Piper JaffrayUnited Continental (UAL) downgraded to Underperform from Neutral at BofA/MerrillVirginia Commerce (VCBI) downgraded to Market Perform from Outperform at FBR Capital Initiations Accenture (ACN) initiated with an Overweight at EvercoreActavis (ACT) initiated with an Overweight at Morgan StanleyAmazon.com (AMZN) initiated with a Buy at ISI GroupAon Corp. (AON) initiated with a Market Perform at Wells FargoBioMed Realty (BMR) initiated with a Neutral at GoldmanBioScrip (BIOS) initiated with a Buy at SunTrustBoston Properties (BXP) initiated with an Overweight at EvercoreBrown & Brown (BRO) initiated with a Market Perform at Wells FargoForestar Group (FOR) initiated with a Buy at DA DavidsonMarsh & McLennan (MMC) initiated with an Outperform at Wells FargoPark-Ohio (PKOH) initiated with an Outperform at Imperial CapitalRed Hat (RHT) initiated with an Outperform at Northland SecuritiesStarz (STRZA) initiated with a Sell at Stifel NicolausStarz (STRZA) initiated with an Underweight at Evercore HOT STOCKS AT&T (T) sees FY13 EPS growth to be upper-single digits or higherConsensus for FY13 revenue is $128.3BSees FY13 consolidated margins to be stableStarbucks (SBUX) targets opening of about 1,300 net new stores globally in FY13Expects to open 1,500 new stores in U.S. over next five yearsSaid China a ”significant market opportunity,” expects to have 1,500 stores there by 2015Court of Appeals agreed with Mattel (MAT), verdict, damages on MGA's claims reversedBelkin to buy Cisco's (CSCO) home networking unitJuniper (JNPR): Trends driving network investment in cloud/mobility intactSees improved momentum in routing in 2013 in Europe and U.S. Expects to expand FY13 operating margins City National (CYN) expects net income to grow 'very modestly' in 2013US Airways (LCC) reached tentative agreement with flight attendants EARNINGS Companies that beat consensus earnings expectations last night and today include:KLA-Tencor (KLAC), Synaptics (SYNA), QLogic (QLGC), ResMed (RMD), Rambus (RMBS), Tempur-Pedic (TPX), Juniper (JNPR), Microsoft (MSFT), Cirrus Logic (CRUS) Companies that missed consensus earnings expectations include:Key Technology (KTEC), E-Trade (ETFC), Sterling Financial (STSA), AT&T (T) Companies that matched consensus earnings expectations include:Western Alliance (WAL), IBERIABANK (IBKC), Starbucks (SBUX) NEWSPAPERS/WEBSITES U.S. electricity producers have increased their use of natural gas now that technological advances have unlocked vast amounts of the fuel in shale rock formations. But executives at some top utilities are wary of relying too heavily on natural gas to make electricity, concerned that its current low price may not last, the Wall Street Journal reportsAs Samsung Electronics (SSNLF) and Apple (AAPL) attempt to defend their dominance in the smartphone market, the latest data show China’s Huawei Technologies Co. ranked third in terms of market share for the first time, an indication that a rapid increase of smartphone users in China and other emerging markets may be starting to alter the global landscape, the Wall Street Journal reportsInnovation Network Corp. of Japan, a Japanese state-backed fund, wants a Nissan Motor Co. (NSANY) and NEC Corp. JV to buy Sony’s (SNE) lithium-ion battery unit to prevent rivals in China and Taiwan from getting its technology as the TV maker looks to offload non-core businesses, the Daily Yomiuri said, Reuters reportsLockheed Martin (LMT) is challenging the U.S. government in court over $13.6M in research tax credits in a case that tests the often unclear line between research and production, with future R&D claims by other companies possibly at stake, Reuters reportsFed Chairman Bernanke’s unprecedented bond buying pushed the Fed’s balance sheet to a record $3T as he shows no sign of softening his effort to bring down 7.8% unemployment, Bloomberg reportsOver half of the $18T in national daily trading of energy swaps has moved to futures exchanges from the over-the-counter market in response to the U.S. regulatory overhaul aimed at increasing transparency--Dodd-Frank--following the 2008 financial crisis, Bloomberg reports SYNDICATE Adecogro (AGRO) files to sell 8.7M shares of common stock for holdersAnthera Pharmaceuticals (ANTH) files to sell common stockArrowHead Research (ARWR) files to sell common stock and warrantsBG Medicine (BGMD) enters $12M common stock purchase agreement with Aspire CapitalBright Horizons (BFAM) 10.1M share IPO priced at $22.00Chuy's (CHUY) 4.5M share Secondary priced at $25.00

22 января 2013, 16:41

Frontrunning: January 22

Geithner allegations beg Fed reform (Reuters) BOJ Adopts Abe’s 2% Target in Commitment to End Deflation (BBG) Bundesbank Head Cautions Japan (WSJ) In speech, Obama pushes activist government and takes on far right (Reuters) Atari’s U.S. Operations File for Chapter 11 Bankruptcy (BBG) Israel goes to polls, set to re-elect Netanyahu (Reuters) Apple May Face First Profit Drop in Decade as IPhone Slows (BBG) EU states get blessing for financial trading tax (Reuters) Indian Jeweler Becomes Billionaire as Gold Price Surges (BBG) Europe Stocks Fall; Deutsche Bank Drops on Bafin Request (BBG) Algeria vows to fight Qaeda after 38 workers killed (Reuters) GS Yuasa Searched After Boeing 787s Are Grounded (BBG) Slumping pigment demand eats into DuPont's profit (Reuters) Overnight Media Digest WSJ * U.S. President Barack Obama began his second term on Monday by setting an agenda for the next four years built on bedrock Democratic social policies, in a provocative speech coming at a time of deep partisanship in the capital and lingering economic uncertainty across the country. * Jonathan Baum, chairman and chief executive of Bank of New York Mellon Corp's mutual-fund unit, has left the firm, the company said Monday. * International investigations into the battery malfunctions that grounded Boeing Co's 787 jet are accelerating, with U.S. and Japanese experts pursuing some new and possibly differing leads. * Wal-Mart Stores Inc is warning suppliers that it is adopting a "zero tolerance policy" for violations of its global sourcing standards, and soon plans to immediately sever ties with anyone who subcontracts work to factories without the retailer's knowledge. * Japan's central bank agreed to adopt a 2 percent inflation target and strengthened its monetary-easing program in a bid to rid the economy of long-running deflationary pressures. * Bundesbank President Jens Weidmann warned Japan not to "politicize" its exchange rate by pursuing an overly aggressive monetary policy, reflecting mounting concern in Europe that other central banks may cheapen their currencies as a means of stimulating economic growth. * Federal officials are expected to slap a Deutsche Bank AG unit with a $1.5 million penalty in coming days after concluding that its energy-trading arm extracted illicit profits from the California electricity marketplace in 2010. * Mary Jo White, who made her name pursuing terrorists, mobsters and white-collar criminals as a federal prosecutor in New York, is the Obama administration's likely pick to lead the Securities and Exchange Commission, according to people familiar with the administration's search. * House Republicans on Monday moved to extend U.S. borrowing authority until May 19, setting a timeline for the next phase of budget wrangling between the White House and Congress.   FT RULES ON OFFICE-FLAT CONVERSION TO EASE Developers will be able to convert office buildings into blocks of flats without asking councils for permission under radical changes to the English planning system. (link.reuters.com/keh45t) WEIDMANN WARNS OF CURRENCY WAR RISK The erosion of central bank independence around the world threatens to unleash a round of competitive exchange rate devaluations, which leading economies have so far avoided during the financial crisis, the president of Germany's Bundesbank warned. (link.reuters.com/qeh45t) OBAMA DEFENDS ROLE OF STRONG GOVERNMENT Barack Obama mounted a vigorous defence of interventionist government and the role of a social safety net in an uplifting and uncompromising speech that marked the formal opening of his second term as president. (link.reuters.com/seh45t) HEATHROW AND BA DID NOT ACT ON SNOW ALERT The operator of Heathrow and airlines led by British Airways decided against taking pre-emptive measures to deal with snow that could have prevented the airport's descent into chaos on Friday, the Financial Times has learnt. (link.reuters.com/heh45t) GRADE TO STEP DOWN AS OCADO CHAIRMAN Online grocer Ocado will reveal on Tuesday that Michael Grade will step down as chairman later this year. Grade has been chairman of Ocado for seven years and brought the lossmaking company to market in an 800 million pound float three years ago. (link.reuters.com/geh45t) HUAWEI IN PLEDGE TO DISCLOSE MORE INFORMATION Huawei has pledged to start disclosing more detailed financial and shareholding information as the Chinese telecoms equipment maker tries to dispel fears over suspected ties to the Chinese military, which are hampering its global expansion. (link.reuters.com/veh45t) FRUIT FARMERS LOOK TO FOREIGN LABOUR INFLUX British ministers are under pressure to allow migrant workers from Russia, Ukraine and Turkey into the UK to mitigate a predicted shortage of fruit pickers which is threatening the 3 billion pounds a year horticulture industry. (link.reuters.com/duh45t)   NYT * U.S. President Barack Obama ceremonially opened his second term on Monday with an assertive Inaugural Address, arguing that "preserving our individual freedoms ultimately requires collective action." * The Bank of Japan set an ambitious 2 percent inflation target and pledged to ease monetary policy "decisively" by introducing open-ended asset purchases, following intense pressure from the country's audacious new prime minister, Shinzo Abe. * As Facebook and Twitter become as central to workplace conversation as the company cafeteria, federal regulators are ordering employers to scale back policies that limit what workers can say online. The agency has pushed companies nationwide, including giants like General Motors, Target Corp and Costco, to rewrite their social media rules. * Aerospace represents the latest frontier for China, which is eyeing parts manufacturers, materials producers, leasing businesses, cargo airlines and airport operators. The country now rivals the United States as a market for civilian airliners. And the new leadership named has publicly emphasized long-range missiles and other aerospace programs in its push for military modernization. * Atari's U.S. unit, Atari Interactive, filed for Chapter 11 protection on Monday as part of an effort to cleave itself from its French parent. * After four months of fierce bidding between two Asian tycoons, a multibillion-dollar battle for control of Fraser & Neave appears to have reached its end. A bidding deadline on Monday evening came and went, meaning the victor will probably be TCC Assets, which is controlled by Charoen Sirivadhanabhakdi of Thailand. * The Maloof family has agreed to sell a controlling stake in the Sacramento Kings, one of the NBA's most troubled and well-traveled franchises, to an investment group led by Christopher Hansen, a hedge fund manager who intends to move the team to Seattle by next season and rename them the SuperSonics. * A report from the International Labor Organization predicted jobless levels to rise to 202 million worldwide this year, and said government budget-balancing was hurting employment. * Jeroen Dijsselbloem, the new president of the group of ministers overseeing the euro, said on Monday he wanted to heal the rift over austerity policies that had bred mistrust between southern and northern nations using the currency   Canada THE GLOBE AND MAIL * The demand for university education is not slowing down, as high school students continue to apply to Ontario institutions in record numbers. Preliminary figures released by the Ontario Universities' Application Centre showed that the number of high school students applying to first-year programs in the fall climbed by 2.4 per cent over the previous year. * Cable sweepers and "hydrophobic" coatings are part of the British Columbia government's new plan to winterize the Port Mann Bridge, where last month vehicles and motorists were pummelled with ice falling from overhead cables. More than 340 insurance claims have been filed since the Dec. 19 snowstorm, according to ICBC spokesman Adam Grossman. Reports in the business section: * Rona Inc's two largest shareholders are taking matters into their own hands, installing a turnaround expert who is familiar with reducing costs to lead the board of directors. The hardware retailer named Robert Chevrier as executive chairman, replacing Robert Paré, a Montreal lawyer who took the chairman's role in May, but who had little retail or operational experience. * Sun News Network is pinning its hopes for survival on a ruling by Canada's broadcast regulator. Canada's newest and most controversial news channel has argued its signal must be broadcast into every Canadian home if it is ever going to recover from losses that have already reached C$17 million a year. NATIONAL POST * Canadian Prime Minister Stephen Harper's government said on Monday it will not include Governor General David Johnston in any future policy discussions with First Nations, further clouding its battle of wills with aboriginal leaders. * Dan Ross, the former assistant deputy minister of defence materiel, has blamed the Stephen Harper government's culture of secrecy and a lack of accountability at all levels for the failure of the F-35 stealth fighter program. FINANCIAL POST * Bank of Canada will deliver a one-two punch on Wednesday, combining its latest interest rate decision with the central bank's latest quarterly outlook for the domestic and global economies. * The Alberta provincial government said on Monday that its March 7 budget for 2013-14 will make a course correction from big spending to big belt tightening as a shortage of pipeline space and competition in oil production in the United States have tempered the surge in global oil prices.   China CHINA SECURITIES JOURNAL --A total of 1,271 funds in 70 fund companies made profits of 104.6 billion yuan ($16.81 billion) in the fourth quarter of last year, from a loss of 179.6 billion yuan in the third quarter, data showed. --China's National Development and Reform Commission said it will reduce credit card comissions next month, with analysts expecting it could help merchants save 4 billion yuan a year. SHANGHAI SECURITIES NEWS --A netizen has demanded U.S. fruit distributor Chiquita explain why slices of apples sold in FamilyMart stores in Shanghai fail to turn brown after 80 hours, sparking a debate online whether the steps Chiquita is taking to protect apple slices from oxidizing are unhealthy. SHANGHAI DAILY (www.chinadaily.com.cn) --Subsidised license plates for new energy vehicles in Shanghai received a lukewarm welcome, with only one customer applying for the plates on the first day they were made available. CHINA DAILY (www.chinadaily.com.cn) --Chinese vehicle exports topped 1 million units for the first time in 2012, up 29.7 percent. --Shanghai saw a contraction in total trade in 2012, the first time in three years. PEOPLE'S DAILY --China's central government will invest 122.2 billion yuan to support the domestic spring ploughing industry, the finance ministry said.   Fly On The Wall 7:00 AM Market Snapshot ANALYST RESEARCH Upgrades ASML (ASML) upgraded to Buy from Hold at ABN AmroASML (ASML) upgraded to Hold from Sell at Deutsche BankBank of Kentucky (BKYF) upgraded to Outperform from Neutral at RW BairdGoodrich Petroleum (GDP) upgraded to Outperform from Market Perform at BMO CapitalPrecision Castparts (PCP) upgraded to Buy from Neutral at UBSResearch in Motion (RIMM) upgraded to Outperform from Sector Perform at Scotia CapitalViacom (VIAB) upgraded to Buy from Neutral at GoldmanVimpelCom (VIP) upgraded to Overweight from Neutral at HSBCWESCO (WCC) upgraded to Outperform from Neutral at Credit Suisse Downgrades ARM Holdings (ARMH) downgraded to Hold from Buy at Benchmark Co.Amgen (AMGN) downgraded to Neutral from Outperform at Credit SuisseBecton Dickinson (BDX) downgraded to Neutral from Buy at MizuhoDiamond Offshore (DO) downgraded to Neutral from Outperform at Credit SuisseF5 Networks (FFIV) downgraded to Hold from Buy at NeedhamFirstEnergy (FE) downgraded to Underperform from Hold at JefferiesFortinet (FTNT) downgraded to Market Perform from Outperform at JMP SecuritiesLRR Energy (LRE) downgraded to Neutral from Outperform at RW BairdOch-Ziff Capital (OZM) downgraded to Market Perform from Outperform at Keefe BruyetteOpen Text (OTEX) downgraded to Hold from Buy at Stifel NicolausRoche (RHHBY) downgraded to Neutral from Outperform at Exane BNP ParibasTrinity Biotech (TRIB) downgraded to Neutral from Buy at Roth CapitalUrban Outfitters (URBN) downgraded to Neutral from Overweight at Atlantic EquitiesUroplasty (UPI) downgraded to Market Perform from Outperform at JMP Securities Initiations ExactTarget (ET) initiated with an Outperform at Credit SuisseLivePerson (LPSN) initiated with a Neutral at Credit SuissePBF Energy (PBF) initiated with a Hold at Deutsche BankPBF Energy (PBF) initiated with an Outperform at Credit SuisseS&W Seed (SANW) initiated with an Overweight at Piper JaffrayVerint Systems (VRNT) initiated with a Neutral at Credit Suisse HOT STOCKS Ericsson (ERIC) to acquire IT services capabilities from Devoteam in France KKR (KKR), Blackstone (BX) said to be among those in talks for Life Technologies (LIFE), Bloomberg reportsCaterpillar (CAT) to record $580M goodwill impairment charge in Q4Shaw Communications (SJR) reported Shaw family acquired 750,000 class B sharesSeaCube (BOX) to be acquired by Ontario Teachers' Pension for $23 per shareNeoPhotonics (NPTN) subsidiary to acquire OCU unit from LAPIS Seminconductor for $36.8MBGI-Shenzhen extended tender offer for Complete Genomics (GNOM)FDA approved Botox (AGN) to treat overactive bladderFDA approved Mallinckrodt's (COV) Gablofen prefilled syringe OM Group (OMG) divested Advanced Materials business for up to $435M (FCX)DaVita (DVA) formed JV with RHC in TaiwanDaimler AG (DDAIF) created subsidiary for innovative mobility servicesPearson (PSO) sees tough market conditions continuing into 2013 EARNINGS Companies that beat consensus earnings expectations last night and today include:DuPont (DD), Signature Bank (SBNY), TAL Education (XRS) Companies that missed consensus earnings expectations include:Verizon (VZ), Sierra Bancorp (BSRR) NEWSPAPERS/WEBSITES International investigations into the battery troubles that grounded Boeing’s (BA) Dreamliner 787, are growing, with U.S. and Japanese experts pursuing some new and possibly differing leads, the Wall Street Journal reportsApple’s (AAPL) future is getting harder to read. Their move into new markets and its more complex supply chain are making its growth prospects more difficult to understand and predict, say longtime investors and analysts, the Wall Street Journal reportsMicrosoft (MSFT) CEO Steve Ballmer is not the right leader for the software company but holds his grip on it by systematically forcing out any rising manager who challenges his authority, claims former senior executive Joachim Kempin, who has written a book about his time at the company, Reuters reportsSouth Africa's Competition Tribunal today gave the green light to the proposed takeover of global miner Xstrata (XSRAY) by Glencore (GLNCY). But the tribunal attached some conditions to the $33B deal to limit the merger's impact on job losses in the mining sector, Reuters reportsConsumption of high fructose corn syrup, used to sweeten products from Coca-Cola (KO) to H.J. Heinz (HNZ) ketchup and linked to obesity, is falling in the U.S. as health-conscious consumers drink less soda, Bloomberg reportsThe world’s biggest investors are moving away from allocating money to government bond markets based on their amount of debt, a strategy that has favored the largest borrowers for three decades, Bloomberg reports BARRON’S A $14 per share LBO undervalues Dell (DELL) Rockwell Automation, ABB provide good opportunities for robotics (ROK, ABB, ADEP, CGNX)Crocs' (CROX) operational shifts could raise 2013 EPS by 11% to $1.55Fossil (FOSL) could reach over $120 per share as earnings are reportedData usage providing return on LTE investment for Verizon (VZ), AT&T (T) Intel's (INTC) “branch prediction” on hybrid PCs a risky move SYNDICATE Performant Financial (PFMT) files to sell 7M shares of common stock

14 января 2013, 16:31

Frontrunning: January 14

Guess who doesn't believe in the "great rotation out of bonds and into stocks": Abe Aids Bernanke as Japan Seen Buying Foreign Debt (BBG) AIG Sues Federal Reserve Vehicle in Dispute Over Lawsuit Rights (WSJ) JPMorgan Said to Weigh Disclosing Whale Report Faulting Dimon (BBG) Ugly Choices Loom Over Debt Clash (WSJ) Credit Suisse to cut bonus pool by 20 percent (Reuters) Brazilian Bikini Waxes Make Crab Lice Endangered Species (BBG) EU redrafts plan for bank rescue funding (FT) JCPenney stock plunges after bad holiday (NY Post) Regulator Comments Buoy Shanghai Stocks (WSJ) Japan voters back PM Abe's efforts to spur growth, beat deflation (Reuters) Cameron averts row over Europe speech (FT) Swatch Buys Harry Winston Jewelry Brand for $1 Billion (BBG) UPS Adandons TNT Express as EU Moves to Reject Takeover (BBG) Chinese labor unions to give more to needy workers (China Daily) Overnight Media Digest WSJ * Apple Inc has cut its orders for components for the iPhone 5 due to weaker-than-expected demand, people familiar with the situation said. (http://link.reuters.com/fex25t) * Nissan Motor Co Ltd's upscale Infiniti vehicles will be introduced into its home market in Japan in as soon as two years for the first time, some 25 years after the brand was launched, the head of the luxury vehicle division said. (http://link.reuters.com/tax25t) * General Motors Co on Sunday took the wraps off a seventh-generation Chevrolet Corvette sports car that the company hopes will become the poster child for a 2013 product blitz designed to buff GM's top-selling Chevrolet line. (http://link.reuters.com/wax25t) * JaguarLand Rover, the luxury car company owned by Tata Motors Ltd, sold a record 357,773 vehicles globally last year. (http://link.reuters.com/zax25t) * Taiwan's HTC Corp is taking its smartphones to Myanmar, joining an expanding list of foreign companies seeking a foothold in one of Asia's last investment frontiers. (http://link.reuters.com/bex25t) * American International Group Inc filed a lawsuit against Maiden Lane II, a vehicle created by the Federal Reserve Bank of New York during AIG's government bailout to acquire some of its troubled mortgage bonds, in a dispute over potentially valuable rights to sue issuers of the bonds. (http://link.reuters.com/cex25t) * JPMorgan Chase & Co's board is expected to dock the 2012 bonuses of Chief Executive James Dimon and another top executive because of the "London Whale" trading debacle, said people close to the company. (http://link.reuters.com/xax25t) * Some of the first airlines to operate the Boeing Co 787 took unusual steps to mitigate reliability problems and keep their marquee jets on schedule, even before U.S. regulators last week ordered a sweeping review of the Dreamliner program, according to industry officials and flight records. (http://link.reuters.com/vax25t) * Senior Indian tax officials plan to meet with representatives of Vodafone Group Plc this week to try to resolve a tax dispute with the British company, a senior finance-ministry official said. (http://link.reuters.com/gex25t) * Dubai Group, a holding company owned by the emirate's ruler with interests in property and financial services, and four international banks have agreed to resolve their legal differences in a push to finish a $10 billion debt restructuring, two people familiar with the matter said. (http://link.reuters.com/hex25t) * The showdown over U.S.'s debt ceiling could force the government to consider drastic steps to manage its limited cash, including delaying trillions of dollars of payments to employees, Social Security recipients, contractors and others.   FT Countries seeking aid from the euro zone's bank rescue fund, the European Stability Mechanism, will still need to shoulder a large part of the cost of future bailouts themselves, according to a draft proposal. The European Union will set out reforms this year to support a pan-European telecoms market, said commission vice-president Neelie Kroes in an interview. Investment bank Goldman Sachs is planning to delay UK bonus payouts until after April, when the top rate of income tax falls to 45 percent. Spanish utility Iberdrola has scrapped plans to sell its stake in Britain's Scottish Power after recent asset sales went better than expected. Joe Plumeri, the outgoing head of insurance broker Willis, criticised 'contingent commissions', the practice of insurance brokers receiving payments from underwriters.   NYT * Citic Telecom International Holdings Ltd's stock rose as much as 18 percent on Monday in Hong Kong after an announcement on Sunday that it would pay $1.2 billion to Britain's Cable & Wireless Communications Plc and Portugal Telecom SGPS SA to acquire a further 79 percent of Companhia de Telecomunicações de Macau. * Google Inc has become one of the most prolific and popular developers of apps for the iPhone, in effect helping its competitor, Apple Inc, make more appealing products - even as relations between the companies have deteriorated. * At an invitation-only gathering hours before the North American International Auto Show was scheduled to open for press previews, General Motors Co introduced the 2014 Corvette, the seventh generation of Chevrolet's hallmark sports car. * The creators of "South Park" are branching out beyond the underpants business. Taking after the Gnomes on the animated series who ardently practice American capitalism, Trey Parker and Matt Stone have wooed investors and raised money to form their own production studio, which they plan to announce on Monday. * Until recently, investors had been all too eager to pour millions into any web start-up with rapid growth, regardless of whether it made money or even had plans to do so down the road. But after Facebook Inc's rocky initial public offering and flameouts at Zynga Inc and Groupon Inc, venture capitalists are entering a picky phase. * Economic growth remained sluggish and politics often intruded on the markets, yet stocks achieved solid returns last year all the same. The Standard & Poor's 500-stock index rose 13.4 percent for the year, even with a 1 percent decline in the fourth quarter. * After a sharp economic slowdown through much of last year, China's economy is growing again - but not at its previous double-digit pace, and with signs that inflation might become a problem again. * An investigation into work performed on the troubled $3.2 billion Croton water treatment plant in the Bronx, one of the New York city's largest public works projects, has uncovered fraud and other crimes that are expected to lead to criminal charges against two men, and a deferred prosecution agreement, according to people with knowledge of the case. * Pharmacies around the New York city struggled to meet the demand for flu vaccinations on Sunday, a day after Governor Andrew Cuomo declared a public health state of emergency in response to a drastic increase in the number of flu cases this year.   China PEOPLE'S DAILY -- A commentary says China needs urgently to strengthen its efforts to fight pollution as smog caused by air pollutants has smothered Beijing and some other major Chinese cities for the past several days. SHANGHAI SECURITIES NEWS -- Inflation will be the biggest risk that threatens stability of China's economy in 2013, Jiao Jinpu, a Chinese central bank official told a forum over the weekend. -- China's economy is expected to grow 8 percent in 2013, slightly faster than 2012, said a research report by the State Information Center, a top government think-tank. China will announce 2012 GDP growth figures this week. CHINA SECURITIES JOURNAL -- The China Securities Regulatory Commission issues the country's first guidelines for standards of compiling statistics in the securities and commodity futures industry. -- An analysis by this newspaper warns against the increasing risk from China' surging asset management products issued by banks and other financial institutions. CHINA DAILY (www.chinadaily.com.cn) -- Growth of China's retail sales is likely to expand to 15 percent in 2013 from an estimated 14.3 percent in 2012 as the government makes fresh efforts to boost domestic consumption, the China General Chamber of Commerce, an industry association, said in a report.   Canada THE GLOBE AND MAIL * Plans will likely proceed for more First Nations protests this week, with possible blockades of railways and highways. Politicians can also expect to be greeted by more protesters when they return to their official House of Commons duties at the end of January. However, two of Ottawa's most prominent aboriginal critics took steps this weekend to soften their tone. * The Canadian government is in early stages of providing military training to Niger, a country struggling to cope with the spreading Islamic extremism afflicting neighbouring Mali and the region. Reports in the business section: * Three former Nortel Networks Corp executives, accused of fraudulently manipulating Nortel's financial results in 2002 and 2003, will learn their fate in a Toronto courtroom on Monday when a judge will deliver his verdict in their long-running fraud trial. Former CEO Frank Dunn, former CFO Douglas Beatty and former controller Michael Gollogly are accused of pushing the money-losing company to profitability and triggering special "return to profitability" bonuses for themselves. * Leading shareholders of Inmet Mining Corp said the company is shopping a significant but minority stake in Cobre Panama, the $6.2 billion copper project it is developing in Central America, as it works to fend off a hostile takeover from rival First Quantum Minerals Ltd. NATIONAL POST * Former cabinet minister Martin Cauchon has made a late entry into the already crowded federal Liberal leadership race. Cauchon submitted his nomination papers and a $75,000 entry fee just hours before the party's registration deadline on Sunday midnight. * Calls are mounting for Attawapiskat Chief Theresa Spence to end her liquid-only diet, now in its 35th day. Chief Spence has been on a diet of water, fish broth and tea since Dec. 11 in her push for a meeting with Prime Minister Stephen Harper and the Governor-General.   Fly On The Wall 7:00 AM Market Snapshot ANALYST RESEARCH Upgrades Allscripts (MDRX) upgraded to Strong Buy from Market Perform at Raymond JamesAnalog Devices (ADI) upgraded to Outperform from Neutral at Credit SuisseCTC Media (CTCM) upgraded to Buy from Neutral at GoldmanCapital One (COF) upgraded to Buy from Neutral at GoldmanCisco (CSCO) upgraded to Outperform from Market Perform at William BlairCisco (CSCO) upgraded to Outperform from Neutral at RW BairdCovance (CVD) upgraded to Buy from Neutral at GoldmanDeere (DE) upgraded to Neutral from Underweight at JPMorganEncana (ECA) upgraded to Buy from Hold at Societe GeneraleFacebook (FB) upgraded to Buy from Hold at Deutsche BankFusion-io (FIO) upgraded to Overweight from Neutral at JPMorganGrainger (GWW) upgraded to Buy from Hold at WunderlichHalozyme (HALO) upgraded to Outperform from Market Perform at BMO CapitalHess Corp. (HES) upgraded to Neutral from Underperform at Credit SuisseHewlett-Packard (HPQ) upgraded to Neutral from Underweight at JPMorganInfosys (INFY) upgraded to Overweight from Equal Weight at BarclaysInfosys (INFY) upgraded to Overweight from Neutral at JPMorganNorfolk Southern (NSC) upgraded to Buy from Hold at Deutsche BankPAREXEL (PRXL) upgraded to Neutral from Sell at GoldmanVerisk Analytics (VRSK) upgraded to Overweight from Equal Weight at BarclaysXilinx (XLNX) upgraded to Outperform from Neutral at Credit Suisse Downgrades ARM Holdings (ARMH) downgraded to Neutral from Overweight at Piper JaffrayAmerican Express (AXP) downgraded to Neutral from Buy at GoldmanEMC (EMC) downgraded to Neutral from Overweight at JPMorganHuntsman (HUN) downgraded to Market Perform from Outperform at Wells FargoIBM (IBM) downgraded to Neutral from Overweight at JPMorganJDSU (JDSU) downgraded to Neutral from Buy at GoldmanMaxim Integrated (MXIM) downgraded to Neutral from Outperform at Credit SuisseNokia (NOK) downgraded to Underweight from Equal Weight at BarclaysOld Dominion (ODFL) downgraded to Hold from Buy at Deutsche BankPlains Exploration (PXP) downgraded to Neutral from Positive at SusquehannaRush Enterprises (RUSHA) downgraded to Hold from Buy at WunderlichScripps Networks (SNI) downgraded to Hold from Buy at Deutsche BankWerner (WERN) downgraded to Hold from Buy at Deutsche Bank Initiations Rock-Tenn (RKT) initiated with an Overweight at BarclaysWilliams (WMB) reinstated with an Overweight at Barclays HOT STOCKS Harry Winston (HWD) sold luxury brand to Swatch Group (SWGAY) for $750MNews Corp. (NWSA), Sky Deutschland and its new bank syndicate reached agreementIcahn acquired 1.56% of Transocean (RIG) shares, looks to buy moreHumana (HUM) ratings affirmed by A.M. Best, outlook stableHostess Brands selected Flowers Foods (FLO) as stalking horse bidder for the majority of assets related to its bread business for $360MGroupon (GRPN) acquired Glassmap, terms not disclosed NEWSPAPERS/WEBSITES Will this finally be the year that investors dump bonds and return to stocks? Some signs are indicating that maybe, possibly, the tide is beginning to reverse. For the week ended Wednesday, U.S. investors plowed $18B into stock mutual funds and exchange-traded funds, the largest one-week total since June 2008, the Wall Street Journal reportsAuto makers (GM, F, FIATY) have found a quicker path to improved fuel efficiency, reinventing the way traditional gas-powered cars are built. They’re cutting weight by substituting more plastics, aluminum and magnesium, including materials once found only in high-end race cars, the Wall Street Journal reportsThe U.S. economy is expected to grow by 2.5% in 2013, improving to 3.5% growth in 2014, said Chicago Fed President Charles Evans. He also forecast the U.S. unemployment rate would be 7.4% this year, easing to about 7% in 2014, Reuters reportsCVC Capital Partners and Royal Bank of Scotland (RBS) sold a combined $290M stake in Hong Kong-listed luggage maker Samsonite International, according to a term sheet, Reuters reportsJPMorgan Chase’s (JPM) board will consider releasing an internal report this week that faults CEO Jamie Dimon’s oversight of a division that lost more than $6.2B on botched trades, sources say, Bloomberg reportsA group of oil and gas pipeline operators led by Plains All American Pipeline LP (PAA) announced plans just in the past three months to spend about $1B on rail depot projects to help move more crude from inland fields to refineries on the coasts.Warren Buffett’s (BRK.A) Burlington Northern Santa Fe LLC, the largest U.S. railroad, spent $400M on terminals in 2012, Bloomberg reports BARRON’S KeyCorp (KEY) looks prosperous, could be worth $11 per shareEnsco (ESV) stock is a value, could rise further from earnings growthWith a promising year ahead, theater owners (RGC, CNK, CKEC, EPR) could be a good playHD stuns and 'Smart' TVs confound at Consumer Electronic Show in Las Vegas (SSNLF, SNE, SHCAY, GOOG, MRVL, AAPL, LNVGY, NTGR) SYNDICATE Athersys (ATHX) files to sell 20M shares of common stock, warrantsCorMedix (CRMD) files to sell 3.78M shares of common stock for holdersLexington Realty (LXP) to offer $100M in common shares in at-the-market program

14 января 2013, 15:22

Six Considerations Shaping the Investment Climate

The underlying trends seen this year have continued, but after strong follow through in Asia, a more subdued tone has been seen in Europe.  The US dollar is generally softer, except against the yen and sterling.  Japanese markets were closed for holiday, but the MSCI Asia-Pacific Index rose almost 0.3%, lifted by more than a 3% rally in China on speculation that there may be a sharp increase in the cap on foreign investors' ability to invest in Chinese equities. In Europe, the Dow Jones Stoxx 600 is hp about 0.4%, led by a rise in financials.  Spanish stock market is at its highest level in almost a year (Feb 2012) and Italy's market is at its best August 2011, though their bond markets are seeing some profit-taking today.   With a light economic calendar in North America today, Bernanke's speech in Michigan after the markets close may be the highlight. We identify six key factors shaping the investment climate. First, and perhaps most importantly, there has been a perception that the global economy is in better shape than many had feared.  ECB began pushing down the tail risks in Europe.  The EU helped by signaling it is prepared to give several countries including Spain, Italy and France more time to reach their deficit targets.  The Basel Accord’s more liberal definition of liquid instruments and a longer period for the adjustment also encourages risk taking.  China’s economy appears to have found a base after seven quarters of slowing growth.  US politicians averted the worst of the fiscal cliff, which means the recession the CBO warned, is significantly less likely.    Second, reports of the demise of Keynesian economics has been grossly exaggerated.  Japan, the world’s third largest economy, is pursuing Keynesian policies as aggressively.  Before the weekend, the government unveiled a JPY10.3 trillion (~$116 bn) stimulus program.  It forecast that the new spending (which will require new borrowing), will boost growth by 2% and create 600k new jobs. Complementing the stimulative fiscal thrust, the government seeks more monetary accommodation.  The BOJ meets on Jan 21-22 and local reports suggest that the BOJ will likely recognize 1) that the LDP have a strong popular mandate and 2) that in a battle of wills, the government wins as it can re-write the BOJ Act. Third, ECB’s Draghi appeared to signal last week that the bar to further monetary easing is high.  The bar is sufficiently high that a rate cut in Q1, even if contraction from H2 12 carries over into early 2013, is unlikely.  There has been significant improvement in the euro area’s financial condition and the ECB expects that this improvement will remove a headwind on the real economy. Among these improvements is new that the ECB’s balance sheet fell to 2.96 trillion euros in the week ending January 4, which is the smallest it has been since the end of last February.  In addition, there are expectations that some banks will return some of the funds borrowed under the LTRO facility.   We recognize that there are many factors outside of monetary policy and relative size of central bank balance sheets that impact currency movement.  Yet the contrast between the shrinking ECB balance sheet and the expansion of the Fed’s is notable and will encourage euro bulls. In addition, emergency lending assistance, provided by the national central banks, has also fallen in the most recent week to its lowest level in almost six months, though this may soon be adversely impacted by Cyprus as it awaits its aid package.  The latest Target2 report, which covers the month of November, also shows a reduction in Germany’s claims and a corresponding decline in Spain, and Italy’s liabilities.   Key measures of retail deposits in both Italy and Spain rose in November.   Over the weekend the French employers and 3 of the five national unions appear to have struck a deal that could produce greater flexibility in the labor market (euphemism for making it easing to using short-term contracts, downsize work forces and reduce wages), while employers may have to pay a bit more in payroll tax.   Hollande’s neo-liberalism may also help ease investors’ anxieties of the Socialist President. Fourth, the Obama Administration has rejected a constitutional fight over the debt ceiling and has rejected exploiting the platinum coin loophole farce.  This makes a new showdown between the Administration and the Republican-controlled House of Representatives over the debt ceiling, spending authorization and the spending cuts that have been delayed until March 1.    The latest economic data suggests the slowdown in Q4 was more dramatic than previously expected after a 3.1% Q3 GDP print.   Nor should a better Q1 be expected.  The end of the payroll savings tax holiday is expected to hit consumption, which remains a key driver of the economy.    Fifth, the technical condition of the market is more mixed now.  There is little technical evidence of an immediate trend reversal and some of the strong advances of the major foreign currencies at the end of last week appeared to be the re-establishment of positions cut at the end of last year and the “resolution” of the US fiscal cliff.  However, we encourage investors to be particularly sensitive to a deterioration in the technical condition of the foreign currencies, which could be signified by a daily reversal pattern (such as outside down days, or shooting stars).   There have been some large moves in the foreign exchange market in recent days.  Last week, the euro posted its largest rally since September. The yen’s depreciating streak extended to nine weeks, the longest in almost 24 years.  The Canadian and Australian dollars rose to multi-month highs.  The market is vulnerable to a near-term correction. There were some other interesting price developments to note.  The VIX fell to its lowest level since the financial crisis began the middle of 2007.  Gold recorded its first advancing week since November.  MSCI Emerging Market Index snapped an 8-week advancing streak to close lower last week.   At the start of the year, foreign inflows into the equity markets in Indonesia, South Korea and Taiwan are weaker than the start of 2012.   International equity managers may be concern about the impact of the weakness on sectors and companies, especially in South Korea and Taiwan.  Sixth, is the week's economic data.  Given our understanding of the ECB’s stance, we do not expect much of a market response to data from the euro area the covers Q4.  On the other hand, Q4 data from the US and UK may still be seen as new information for investors.  In the UK, inflation figures on Tuesday, which are expected to show some increase in pressures, and the retail sales report on Friday, which will likely be soft, are the main events. The US reports inflation, retail sales, housing starts, industrial production figures and business inventories in terms of hard data.  Only the inventory data (which may be helpful in estimating Q4 GDP) and the January Empire and Philly Fed surveys will be of the most interest, as the earning season gathers steam.    Japan will release several monthly economic reports, but the focus will remain strictly on the government’s stimulus efforts and next week’s BOJ meeting. 

13 января 2013, 23:42

Even Goldman Says China Is Cooking The Books

That China openly manipulates its economic data, especially around key political phase shifts, such as one communist regime taking over for another, is no secret. That China is also the marginal economic power (creating trillions in new loans and deposits each year) in a stagflating world, and as such must be represented by the media as growing at key inflection points (such as Q4 when Europe officially entered a double dip recession, and the US will report its first sub 1% GDP in years) as mysteriously reporting growth even without open monetary stimulus (something we have said the PBOC will not engage in due to fears of importing US, European and now Japanese inflation) is critical for preserving hope and faith in the future of the stock market, is also very well known. Which is why recent market optimism driven by "hope" from Alcoa that China is recovering and will avoid yet another hard landing, and Chinese reports of a surge in Exports last week, are very much suspect. But no longer is it just the blogosphere that is openly taking Chinese data to task - as Bloomberg reports, even the major banks: Goldman, UBS and ANZ - are now openly questioning the validity and credibility of the goalseek function resulting from C:\China\central_planning\economic_model.xls. From Bloomberg: China’s unexpected surge in exports last month renewed concern from analysts at Goldman Sachs Group Inc., UBS AG and Australia & New Zealand Banking Group Ltd. (ANZ) that statistics from the nation can be unreliable.   The 14.1 percent jump from a year earlier was the biggest positive surprise since March 2011, according to data compiled by Bloomberg. The increase didn’t match goods movements through ports and imports by trading partners according to UBS, while Goldman Sachs and Mizuho Securities Asia Ltd. cited a divergence from overseas orders in a manufacturing index.   Smaller trade gains could signal a less robust recovery from a seven-quarter slowdown just as Australian Treasurer Wayne Swan says the economic rebound is a sign of improving global demand. Accurate statistics from the world’s second-biggest economy are increasingly important for domestic and foreign investors and for China’s government, ANZ’s Liu Li-Gang says. Too good to be true: ANZ’s Liu and colleague Louis Lam published research last week that underscored doubts about the quality of China’s economic data. They found that quarterly GDP, industrial production, fixed-asset investment and inflation data published in percentage terms failed to conform to “Benford’s Law,” which holds that in any series of numbers certain patterns will be found only if the statistics are naturally generated. As we have previously observed, even China has previously mocked its own data "fudgability": Li Keqiang, who may succeed Wen Jiabao as premier in March, was quoted in 2007 as saying he watched figures on power, rail cargo and loans because gross domestic product numbers were “man-made.” Li’s remarks were in a U.S. diplomatic cable published by WikiLeaks in late 2010. One reason for the "surge" in recent data may be the demand of the new Politburo to telegraph that all is well following the latest Congress which took place in November, and that the economy is once again picking up, even if in reality it isn't: After China’s statistics bureau reported third-quarter GDP in October, Standard Chartered Plc analysts said the 7.4 percent increase was “too good to be true” when compared with the slowdown in electricity production and the readings of a manufacturing index, while London-based Capital Economics Ltd. said its own analysis indicated expansion of about 6.5 percent.   The median forecast for December exports in a Bloomberg survey of 40 economists was for a 5 percent gain, with the highest estimate at 9.2 percent, after November’s 2.9 percent growth. Goldman Sachs, ranked by Bloomberg as the most accurate forecaster for the indicator, projected a 7 percent rise.   The increase, which was the biggest since May, could indicate exporters’ rush to finish year-end orders and government pressure to report exports before the end of the year to reach the government’s 2012 target of 10 percent growth, Shen Jianguang, Mizuho’s Hong Kong-based chief Asia economist, said in a Jan. 10 note. A possible explanation for how Chinese companies are cooking their export books comes from none other than Goldman: “It is possible that local governments may have tried to boost exports data by either making round trips in special trade zones” or by exporting “earlier than otherwise in an attempt to improve the annual exports data,” Goldman Sachs’ Beijing- based economists Yu Song and Yin Zhang wrote the same day.   Rushed shipments and even faked exports to secure tax refunds may have contributed to the stronger growth data, according to Alistair Thornton and Ren Xianfang, Beijing-based analysts at IHS Inc.   Some trading companies are turning to transportation providers like Shenzhen Global Express Logistics Ltd. for help in shipping goods through so-called bonded zones to claim export tax rebates or charge higher import prices for goods without them physically leaving the country. Shenzhen Global offers customs clearing and other freight services including a “one-day tour,” Lin Yongtai, a manager with the company in the city bordering Hong Kong, said in a telephone interview.   For a fee of 1,000 yuan ($161) per vehicle per day, the company will drive trucks into warehouses in bonded zones, where cargo must clear customs, so that businesses can obtain a refund of value-added tax on the “export” of their products or boost sale prices for goods that carry the cachet of being imported.   “A poor villager can boast he has thousands of yuan of turnover every day, but people later discover he only has one bull -- he takes the bull out every morning and brings it back every evening,” Lin said. “The same applies to some parts of China’s foreign trade.” Of course, there is also the simple test of matching one country's exports to another one's imports (after all, it is a closed loop). Once more, it appears that China is literally pulling numbers out of thin air: UBS economists led by Hong Kong-based Wang Tao pointed to a “quite obvious discrepancy” in the growth of China’s exports to Taiwan and South Korea and those economies’ reported imports from China in recent months, even as historically they have tracked each other well. Finally, that China is openly making up numbers is no surprise: it will continue doing that until, like everywhere else, the discrepancy between perception and reality (usually manifested in the case of China by a lot of angry people breaking something or simply rioting) becomes too glaring for even the most optimistically inclined to ignore. What is a surprise is that it is none other than the banks - the primary carriers of the status quo gene - who are implicitly pulling the rug out from beneath the economy that is supposed to once again, as in 2008 and 2009, provide the bridge from a contracting "here" to a growing "there." The question is why? Is this an attempt to undermine the Chinese leadership which has so far merely sought to grow the economy by fiscal stimuli, while avoiding monetary ones: i.e., finally get the PBOC involved in not only growing the money supply (if not the economy), but in joining the rest of the world's central banks in a race to debase? And if indeed this is the case, what happens when China begins growing its own local inflation in addition to importing everyone else's. Or is it a way to force a drop in a market that hangs on to every piece of good news like a drowning meth addict clutching at the tiniest of straws, allowing the same "skepticism-inducing" banks to buy at cheaper prices? Or, more likely, is this merely a red herring to be used as a scapegoat when the latest dead cat bounce, so optimistically telegraphed by every sell side strategist, fails to materialize once more? After all: when in doubt, blame it all on the upcoming debt ceiling fiasco, and now: made up Chinese data. We are confident we will get the answer very soon.