Q&A: (Almost) all you need to know about China Development Bank (CDB)

Q&A: (Almost) all you need to know about China Development Bank

May 29, 2013 12:33pm by Simon Rabinovitch

China Development Bank is one of the world’s largest but least understood financial institutions. Riddled by debt 15 years ago, CDB has now comfortably surpassed the World Bank as the biggest international lender to developing countries. And that only begins to tell the story about CDB. Overseas development lending is a small part of its overall business, with most of its Rmb7.5tn ($1.2tn) in assets focused on catalysing China’s own growth. But CDB is an opaque institution. Chinese banks are difficult to penetrate under the best of circumstances. Unlike its major domestic peers, CDB is unlisted and hence provides even less disclosure.

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Shell under the skin, 10 years after crisis

Shell under the skin, 10 years after crisis

7:31pm EDT

By Andrew Callus

LONDON (Reuters) – A decade ago, Royal Dutch/Shell’s (RDSa.L: Quote, Profile, Research, Stock Buzz) boss was fighting to close the gap between the truth about his company’s oil and gas reserves and the much larger figure in its accounts.

He lost the fight, and his job. Scandal engulfed one of the world’s biggest companies, exposing years of neglect.

Fast forward to May 2013, and the surprise news that chief executive Peter Voser will retire next year caused barely a ripple. Shell has recovered shareholder confidence. But while the risks may all be in the open now, they remain big. Read more of this post

Mexico Housing Bust Bruises Investors, Buyers

May 29, 2013, 7:58 p.m. ET

Mexico Housing Bust Bruises Investors, Buyers

By AMY GUTHRIE

HUEHUETOCA, Mexico—Hardly anyone turns up nowadays at a HomexHOMEX.MX +6.87% sales center for low-income homes in this dusty town north of Mexico City. On a recent Saturday, a banner promising “well-being” flapped in the wind near a sign that read “a new life awaits you.” Even the lone saleswoman on duty, Carolayn León, says she no longer believes in her employer after several missed paychecks.

She isn’t the only one who has lost faith. Home buyers and investors are turning their backs on Mexico’s low-income housing darlings, bringing a government-fueled boom that lasted more than a decade to a screeching halt. Scores of new homes in far-flung communities sit empty, while banks have canceled credit lines to some of the country’s biggest housing companies. Read more of this post

Latin America Boom Starts to Fade; “If commodity prices fall to 2003 levels, all that support for Latin American growth could be removed,”

Updated May 29, 2013, 7:17 p.m. ET

Latin America Boom Starts to Fade

Slowdown in China, a Major Commodities Importer From the Region, Drags on Growth; Xi to Visit

By PAULO WINTERSTEIN in São Paulo and DARCY CROWE in Bogota

A decadelong commodity boom in Latin America that lifted millions out of poverty is showing signs of fatigue, as fading demand in China hits consumers and corporate earnings from Bogotá to Brasilia. The latest evidence of a regional slowdown came Wednesday, when Brazil said its economy grew just 1.9% in the first quarter compared with the year-earlier period, far below estimates for 2.4% growth. Compared with the previous three months, Brazil’s GDP grew a modest 0.6%. Finance Minister Guido Mantega said he would lower his current forecast for 3.5% growth this year by an unspecified amount. “It’s evident that we won’t get an impulse from trade for some time to come and that the commodities boom has passed,” said Andre Perfeito, chief economist at Gradual Investimentos, a brokerage in São Paulo. Read more of this post

CHART OF THE DAY: What The Bond Market Sell-Off Looks Like On A 222-Year Chart

CHART OF THE DAY: What The Bond Market Sell-Off Looks Like On A 222-Year Chart

Matthew Boesler | May 29, 2013, 1:48 PM | 6,162 | 1

The big story in markets over the past few weeks has been the sell-off in the Treasury bond market and the accompanying rise in bond yields to their highest levels in over a year. Goldman strategists are out with a call declaring the sell-off “for real” this time after a number of false starts. The chart below, via Global Financial Data, shows the 10-year Treasury yields going back to 1791, as well as concurrent activity in the stock market. The chart isn’t granular enough to see the move over the past few weeks, but it does show the rise in interest rates since bottoming out about a year ago. 

“If Myanmar fails to build a compelling growth plan and implement it effectively, today’s goodwill and cautious optimism could evaporate all too rapidly”

May 29, 2013, 2:00 p.m. ET

McKinsey Warns Over Myanmar Investor Risk

By SHIBANI MAHTANI

A new report from global consulting firm McKinsey & Co. warns of “major risk of disappointment” for companies entering Myanmar despite the country’s recent reforms, particularly if the government fails to solve sectarian strife that again erupted in mob violence this week.

“The first thing the government is going to have to do is ensure a stable political situation,” said Heang Chhor, senior partner at McKinsey and one of the principal authors of the report, which is one of the first comprehensive looks at Myanmar’s economic potential, compiling half a year of independent research and interviews from the Southeast Asian country where data are notoriously hard to come by and often unreliable. Read more of this post

China’s spurned mistresses can’t be relied on to bust graft

China’s spurned mistresses can’t be relied on to bust graft: paper

6:43am EDT

BEIJING (Reuters) – China must not rely on whistle-blowing mistresses to expose corrupt officials, China’s top newspaper said on Wednesday, after a string of such incidents has led to some people hailing the girlfriends as graft-busters.

President Xi Jinping has singled out corruption as a threat to the Communist Party’s survival, and the keeping of mistresses in lavish apartments, which breaks party rules, has come to represent to many people the excesses of power in China.

In a recent high-profile case, Liu Tienan, once the deputy chief of China’s top planning agency, was sacked after his mistress told a journalist that Liu had helped defraud banks of $200 million, state media reported. Read more of this post

Mothers Turn Breadwinners for 40% of U.S. Households With Kids

Mothers Turn Breadwinners for 40% of U.S. Households With Kids

Mothers are the primary or only breadwinners in a record 40 percent of U.S. households with children, according to a study released today.

About 5.1 million of those workers are married women earning more than their spouses, boosting median family income in this group to almost $80,000, compared with the nationwide figure of $57,100 for all families with children, according to the Pew Research Center. Another 8.6 million households are headed by single mothers who report an annual median family income of just $23,000.

The report from Washington-based Pew highlights an economic divide between married and single mothers that has grown amid a steady decline in the fortunes of U.S. households. Median household income in the U.S. in 2011 was $50,054, its lowest level since 1995 and the fourth drop since 2007. Read more of this post

Gold Diverging From Fine Wine as Bullion Investors Lose Faith

Gold Diverging From Fine Wine as Bullion Investors Lose Faith

Gold and wine prices that tracked each other in the past decade amid demand for alternative assets are now diverging after bullion slumped into a bear market as some investors lost faith in the metal as a store of value.

The Liv-ex Fine Wine 100 Index (LIVX100) tripled in the past 10 years and gold advanced fourfold. The wine gauge rose 5.9 percent this year as bullion slid 17 percent. Credit Suisse Group AG said May 16 that the metal may drop to $1,100 an ounce in a year, or 21 percent less than now. The Wine Investment Fund, which manages about $50 million of assets, expects the Liv-ex gauge to rise by about another 7.6 percent by the end of December. Read more of this post

Brazil World Cup Kick-Starts Billionaire Boon as Farmers Lose

Brazil World Cup Kick-Starts Billionaire Boon as Farmers Lose

Monica Piaia’s catering company in downtown Cuiaba, the capital of the Brazilian grain-belt state of Mato Grosso, is doing so well that she has tripled her staff and acquired a third building since 2010 to handle a sixfold increase in demand.

The reason for her success is clear. A stone’s throw from her headquarters, where industrial-sized kettles bubble and delivery vans are loaded, 500 workers are toiling to finish one of the 12 stadiums nationwide that will host the 2014 soccer World Cup.

Three times a day, Piaia delivers food to workers there and at several of the 56 construction sites that will give Cuiaba new roads, a trolley and an airport terminal by June 2014, Bloomberg Markets magazine will report in its July issue. Read more of this post

Latin America Disappoints After Squandering Commodity-Boom Era

Latin America Disappoints After Squandering Commodity-Boom Era

Latin America is disappointing investors, economists and businesses with slower-than-forecast growth as waning commodity prices and strong currencies hit nations that failed to diversify and become more competitive.

The five biggest investment-grade markets in the region — magnets for foreign capital as rich countries stalled — expanded below projections or show signs of weakness. Mexico’s gross domestic product missed estimates in a Bloomberg survey, while economists polled by Brazil’s central bank cut the country’s 2013 outlook this week for the second time in seven days, anticipating the worst three-year period in a decade. Read more of this post