Why is Beijing cracking down on peaceful civil movements? By clamping down on these movements, the party’s security arm has not only turned against public interest, but also, paradoxically, against the ruling bloc itself.

Why is Beijing cracking down on peaceful civil movements?

Monday, 22 April, 2013, 8:56am

Xiao Shu

By clamping down on these movements, the party’s security arm has not only turned against public interest, but also, paradoxically, against the ruling bloc itself.

Xi Jinping’s administration is sending out very contradictory signals about its commitment to the rule of law and the fight against corruption. Since he became president in March, Xi has repeatedly called for ruling the country by its constitution and, in his own words, going after “both the tigers and the flies” of corrupt party officials.

However, barely a month after he took office, at least eight activists, including lawyer Ding Jiaxi, and activists Zhao Changqing and Li Wei, were detained for demanding transparency on government officials’ assets.

The police officers who rounded up these activists say they were suspected of “illegal public assembly”, referring to a public speech against corruption, delivered on March 31 by activist Hou Xin and three others in Beijing’s busy Xidan shopping district.  Read more of this post

China Hot Market Without Profit Seen in Pretty Lady Card; “Some may never earn a profit out of it, but they have to join the fight, as that’s the most efficient way of grabbing deposits and cross- selling other financial services.”

China Hot Market Without Profit Seen in Pretty Lady Card

By Bloomberg News – Apr 22, 2013

The website of China Citic Bank Corp.’s Ms. Magic card is displayed on a computer screen. Ms. Magic card has attracted more than three million users since August 2005, according to the Beijing-based company

Huaxia Bank Co. (600015)’s Pretty Lady credit card, co-issued with Deutsche Bank AG (DBK), entices women with triple points for cosmetics and fitness-club memberships. The Ms. Magic card from China Citic Bank Corp. (998) dotted with Swarovski crystals offers free beauty treatments and health insurance.

They’re part of a high-end competition being waged by banks for a spot in consumers’ wallets in the world’s fastest-growing market for credit cards, even as delinquencies have tripled in the past four years and profit remains elusive.

“Credit cards are the ultimate growth area and also the battlefield for banks in China,” said Rainy Yuan, an analyst in Shanghai for Taipei-based Masterlink Securities Corp. (2856) “Some may never earn a profit out of it, but they have to join the fight, as that’s the most efficient way of grabbing deposits and cross- selling other financial services.” Read more of this post

Bond Scam Uncovered in 2010 Apparently Resurfaces

04.22.2013 15:28

Bond Scam Uncovered in 2010 Apparently Resurfaces

Police arrest prominent financial executives for allegedly trading in inter-bank market through a type of account abused three years ago

By staff reporter Zhang Yuzhe

(Beijing) – Financial regulators have closed in on a number of suspects who apparently cheated in the bond market using a method that came to light in late 2010.

Police have arrested a number of prominent financial executives, including Yang Hui, managing director of the fixed-income department at CITIC Securities, China’s largest securities firm.

The scandal has attracted the attention of the highest levels of government. Vice Premier Wang Qishan, head of the Communist Party’s Central Discipline Inspection Commission, has told regulators to investigate all cases and punish the perpetrators.

The rule breakers were apparently using a tactic that involved a regulatory loophole in the bond market. The loophole was exposed by a 2010 investigation into Zhang Rui, then an official in the Ministry of Finance’s Department of Exchequer. Read more of this post

China Manufacturing Grows at Slower Pace as Recovery Falters “The government needs to help translate the easy liquidity conditions into real growth.”

China Manufacturing Grows at Slower Pace as Recovery Falters

By Bloomberg News – Apr 22, 2013

China’s manufacturing is expanding at a slower pace this month, fueling concern that the world’s second-biggest economy is faltering.

The preliminary reading of 50.5 for a Purchasing Managers’ Index (EC11CHPM) released by HSBC Holdings Plc and Markit Economics compared with a final 51.6 for March. The number was also below the median 51.5 estimate in a Bloomberg News survey of 11 analysts. A reading above 50 indicates expansion.

China’s stocks slumped as the data added to an unexpected slowdown in economic growth, reported last week, that prompted banks including Goldman Sachs Group Inc. to cut full-year forecasts. In Washington, central bank Governor Zhou Xiaochuan said April 20 that a 7.7 percent first-quarter expansion was reasonable and “normal,” highlighting reduced expectations after 10 percent-plus rates during the past decade.

“This paints a picture of a continued painfully slow recovery for China’s manufacturing sector,” said Yao Wei, China economist at Societe Generale SA in Hong Kong. “The government needs to help translate the easy liquidity conditions into real growth.” Read more of this post

Sichuan quake: Chinese government was warned of disaster; researcher “shared the findings with many counterparts in Beijing and Sichuan but only a few people paid any attention”

Sichuan quake: Chinese government was warned of disaster

One of China’s leading seismologists warned that a devastating earthquake would strike the exact area where more than 200 people have now lost their lives.

By Malcolm Moore, Beijing

3:27PM BST 22 Apr 2013

Professor Chen Yuntai, twice president of China’s Seismological Society, warned in the wake of the 2008 Wenchuan earthquake that the same fault line was likely to rupture again in the coming years. The warning was reported to China’s top leaders in Reference News, a daily internal briefing for the Communist party, but was not acted upon. “We collected the data from the Wenchuan earthquake and we calculated that there would be another big quake around 60 miles to the south west, which is Baoxing county,” he said.

“We gave a seminar organised by the Chinese Academy of Sciences 10 days after the Wenchuan earthquake and a reporter for Xinhua (the state news agency) wrote it up for the Politburo. “I shared the findings with many counterparts in Beijing and Sichuan but only a few people paid any attention,” he said. “I was worried because I was sure that there would be this aftershock”. Read more of this post

Asia Gravitates to Cheap Chic

April 22, 2013, 2:29 p.m. ET

Asia Gravitates to Cheap Chic

By MARIKO SANCHANTA in Hong Kong and LAURIE BURKITT in Beijing

Move over, luxury brands. For the first time in Asia, inexpensive retailers such as Zara and Uniqlo chains are growing at a faster pace than their high-end counterparts, reflecting a shift in consumer tastes and the growing dominance of “fast fashion” globally.

As China’s middle class has grown, so too has the demand for brands and stores that reflect its budget. Chen Jing, a 20-year-old in Beijing who makes 3,000 yuan ($485) a month working at a restaurant, said she regularly shops at H&M and Inditex SA’s ITX.MC +0.05%Zara. “I shop for style and look for popular brands,” Ms. Chen said.

In terms of new entrants and brands to the retail market, midrange fashion retailers are now expanding at a faster rate in Asia than luxury brands, according to a report to be released this week by CBRE, a real-estate services firm.

“This is the first time this has happened,” said Sebastian Skiff, executive director of CBRE Retail in Asia. “It’s only natural that after being here for so long [the luxury retailers] are likely to grow at a slower pace.” Read more of this post

Eurozone picture dimming, no light at end of tunnel yet even for Germany

Tuesday April 23, 2013

Eurozone picture dimming, no light at end of tunnel yet even for Germany

LONDON: An early peek this week at how the eurozone economy performed in April could cement the case for the next instalment in an unprecedented campaign of monetary easing by the world’s major central banks. A preliminary survey of purchasing executives from the 17-country bloc is likely to furnish the new evidence of economic weakness that Jens Weidmann, the president of Germany’s hardline central bank, says is needed for the European Central Bank (ECB) to cut interest rates. The composite index derived from the survey by data providers Markit is likely to be unchanged at 46.5, well below the 50 threshold denoting expansion. The eurozone economy, in short, remains dead in the water. Read more of this post

A Visual History Of All Asset Bubbles

A Visual History Of All Asset Bubbles

Tyler Durden on 04/22/2013 19:45 -0400

Maybe not all, but certainly the vast majority of the most popular asset bubbles since before even the Tulip Mania of 1637 (including the Kipper and Wipper currency debasement of the German 30 years War, circa 1621, which is appropriately enough deja vu in contemporary retrospect, only the war is missing). While it may be worth noting that all the bubbles to the right of center have been central-bank induced (except for that amulet bubble of 2006, although even that is likely debatable), we will not note it as it is quite obvious even without us highlighting this simple fact. One can only imagine what would happen to asset prices – all of them – when the world’s central banks, which are now collectively and voluntarily “all in” on reflating the biggest asset bubble of all time across all asset classes, decide to close the liquidity spigots (if ever).

Mark Yusko’s Presentation on Japan From The Grant’s Conference

Monday, April 22, 2013

Mark Yusko’s Presentation on Japan From The Grant’s Conference

Today we wanted to highlight a presentation that Mark Yusko of Morgan Creek Capital Management gave at the Spring 2013 Grant’s Interest Rate Observer Conference.  Entitled “This Time For the Money”, his presentation focused on Japan. In it, he argued that the current rally in Japanese equities is just getting started and that there’s a lot of room to run.  This, he points out, is largely affected by “Abenomics” where the government has unveiled a massive attempt to combat Japanese deflation via aggressive monetary easing. Yusko points out that there will be winners and losers in Japan and offers some ideas.  As potential winners, he listed Toyota, Marubeni, Mitsui, Mitsubishi UFJ, Sumitomo Mitsui Financial, Mizuho, and Japan Securities Finance. As far as potential losers go, he questioned whether or not the short squeeze is over in names such as Sharp, Panasonic, Sony, and Fujitsu.  Yusko also singled out airlines and food companies as they struggled during the last reflation.  Will it be different this time around?

http://www.docstoc.com/docs/document-preview.aspx?doc_id=153808386

China needs faster financial reform to curb shadow banking risks: think tank

China needs faster financial reform to curb shadow banking risks: think tank

10:15am EDT

BEIJING (Reuters) – China must speed up market-based financial reforms to contain wild growth in shadow financing as well as the mounting risks stemming from the sector, a government think tank said in a report on Monday. Shadow banking traditionally includes activities such as pawnbroking and peer-to-peer lending but now embraces vast off-balance sheet guarantees and loans in the banking system. China needs a more liberalized interest rate regime and a unified bond market to prevent borrowers and investors from rushing to the opaque shadow banking system for new funding and higher returns, said the report made by the Chinese Academy of Social Sciences (CASS), a top government think tank. “Chinese government must step up a series of financial reforms in the near future to crimp the incentives for the blind and explosive expansion of shadow banking system,” said Zhang Ming, a researcher at CASS.

Read more of this post

New regulations will wipe out $17 billion in trading revenue for global investment banks and force some to exit the bond trading business entirely

New rules to wipe out $17 billion in bank trading revenue: report

11:53am EDT

By Lauren Tara LaCapra

NEW YORK (Reuters) – New regulations will wipe out $17 billion in trading revenue for global investment banks and force some to exit the bond trading business entirely, according to a Deutsche Bank report released on Monday. New rules being implemented in Europe and the United States will push bond and derivatives trading onto exchanges as soon as this summer, which is expected to reduce the income banks make from trading with clients. Regulations are also boosting capital requirements for banks, as well as margin and collateral requirements for clients. That raises the cost of doing business and may lead clients to trade less, Deutsche Bank analysts said in the report. Their estimate of $17 billion in lost trading revenue represents 9 percent of sales and trading revenue for global investment banks in 2012.”We think that the long-run result of these changes will be a wave of industry exits from fixed income, currency and commodities sales and trading by second-tier players,” the analysts said. “For the purposes of this report, we view all banks with less than a 6 percent market share as ‘at risk’ of exit from full-service fixed income, currency and commodities sales and trading.” Read more of this post

U.S. Stocks Dominate Global Equities the Most Since 2004

U.S. Stocks Dominate Global Equities the Most Since 2004

The combination of this month’s retreat in global equities and gains by U.S. consumer stocks has made American companies the five biggest in the world for the first time in eight years.

Exxon Mobil Corp. (XOM), Apple Inc. (AAPL), Google Inc., Berkshire Hathaway (BRK/A) Inc. and Wal-Mart Stores Inc. (WMT) are now the largest by market value, according to data compiled by Bloomberg. PetroChina Co., one of three Chinese stocks in the top five last year, slipped to No. 6. Two companies that relied on banking profits, Citigroup Inc. and General Electric Co., fell out since American firms last held the leading spots at the end of 2004.

The shift in the rankings, a barometer of investor expectations for profits and economic growth, shows increasing confidence in Federal Reserve Chairman Ben S. Bernanke’s $2.3 trillion of stimulus spending. Gains in retailers, computer- device makers and media companies have preceded increases in gross domestic product in the past as markets anticipated improving consumer demand.

“U.S. authorities have done an incredible job of maintaining the recovery and encouraging the consumer,” said Henk Potts, who helps oversee $282 billion as an equity strategist at Barclays Wealth in London. His team ranks U.S. shares as their top asset for 2013. “An aggressive policy is working. The U.S. consumer is in great shape. That trend continues to be very supportive of economic growth.” Read more of this post

In the past 11 years Australia has become one of the most expensive places to live, costlier than New York, London, Frankfurt and Singapore on everything from five-star hotels, car rentals, public transport, a pint of beer, cigarettes, jeans and an iPhone

Australia: The costs are spiralling

April 23, 2013

In the past 11 years Australia has become one of the most expensive places to live, costlier than New York, London, Frankfurt and Singapore on everything from five-star hotels, car rentals, public transport, a pint of beer, cigarettes, jeans and an iPhone.

The survey, compiled by Deutsche Bank on prices and price indices on a range of products collected largely from the internet, concludes the US is the cheapest developed country in the world and Australia and Japan two of the more expensive.

According to the survey, Sydney remains the most expensive place for a weekend away, almost double the cost of a weekend holiday in New York. To put it into perspective, New Zealand weekend getaways are 25 per cent cheaper than in New York. Read more of this post