Bank recruitment runs into red-faced factor; Only 2% of students considering career in finance; More than a quarter of students would be too embarrassed to admit to their friends that they were taking up a job in banking

May 13, 2013 8:05 pm

Bank recruitment runs into red-faced factor

By James Pickford, London and South-East Correspondent

More than a quarter of students would be too embarrassed to admit to their friends that they were taking up a job in banking, according to research that underlines the failure of banks to win over public opinion following the financial crisis. António Horta-Osório, chief executive ofLloyds Banking Group, said the result – in which only 2 per cent of students surveyed said they were considering embarking on a career in banking – was “very worrying”.  Read more of this post

Investors bracing for slower growth in China are turning to a formerly little-used currency trade: selling Australian dollars and buying Mexican pesos

Updated May 13, 2013, 7:53 p.m. ET

Currency Investors Turn to Unlikely Pair

By ERIN MCCARTHY and MATTHEW WALTER

Investors bracing for slower growth in China are turning to a formerly little-used currency trade: selling Australian dollars and buying Mexican pesos. The bet is that Australia’s economy, and its currency, will suffer as Chinese demand cools for raw materials like iron and coal. Mexico, with closer ties to the resurgent U.S. economy, is seen as more insulated if commodities prices fall. Read more of this post

Melting Ice Cap Draws China, Japan to Seek Arctic Riches

Melting Ice Cap Draws China, Japan to Seek Arctic Riches

Japan, China and South Korea are seeking to expand their influence in the Arctic as melting ice caused by global warming offers potentially lucrative access to resources and shipping shortcuts in the region.

Asia’s biggest economies are among 14 applicants seeking observer status on the eight-nation Arctic Council, which holds its biennial ministerial meeting in Sweden on May 15. Member countries include the U.S., Russia, Canada, Denmark, Finland, Iceland and Norway.

Winning approval would mean greater sway in international discussions over a region estimated to contain 90 billion barrels of oil, according to the U.S. Geological Survey. With climate change resulting in an Arctic that will be almost ice-free in the summer by 2050, according to a U.S. government study, the organization is facing an increase in maritime traffic and environmental disruption. Read more of this post

Chinese Power Consumption Collapses: Economic Growth Slowest Since Early 2009

Chinese Power Consumption Collapses: Economic Growth Slowest Since Early 2009

Tyler Durden on 05/13/2013 11:52 -0400

Not much to add here. If there still is any confusion why China is desperately manipulating its economic data, so balatantly in fact that virtually everyone has now noticed, this chart should put all doubt to rest. According to CLSA’s Chris Wood using NEA data, China’s monthly power consumption (the most accurate proxy for underlying economic strength according to the current premier) growth slowed from 5.5% YoY in Jan-Feb 2013 to 1.9% YoY in March, the slowest growth rate since May 2009 (as discussed in-depth here). And just to make CNBC’s life easier, we will prespin this data: the lack of growth merely shows there is much pent up growth on the sidelines, even if the country is now injecting more debt to just maintain the flatline, than ever.

Institutional Investors Need to Stop Abdicating Their Responsibilities

Institutional Investors Need to Stop Abdicating Their Responsibilities

08 MAY 2013 – ASHBY MONK

Allow me to channel Winston Churchill by saying that capitalism is the single worst economic coordination system in the world … except for all the other models that have been tried. In short, capitalism’s got its problems but it’s still better than any of the alternatives. And that means it’s worth our while to spend some time thinking about how to improve it (rather than replacing it with something silly).

I’m clearly not alone in thinking this, as a growing army of finance and business people look to render capitalism more “inclusive” and “conscientious.” As evidence of this enlightened perspective, witness sustainable development initiatives, impact investing, community based investing, SRI, ESG, CSR, SEE, PRI, OMG, LOL, WTF, and all the other random combinations of letters that will transform icy-veined capitalists into… this guy.

I think all those initiatives are great. Expanding the number of risks that investors price in their investment decision-making can only create value in the long run, if done with rigor and routine. But it hasn’t seemed to be enough to meaningfully change the system because these strategies operate at the margin. To really transform capitalism for the better, there’s a more basic approach that could be very significant: empowering the ultimate sources of capital to be better stewards of their capital. Let me explain (and reiterate something I’ve argued for a long time now). Read more of this post

China “shadow banking” growing fast, having risen nearly 70 per cent over the past two years and now total more than half the size of the world’s second-largest economy

China “shadow banking” growing fast

POSTED: 13 May 2013 7:36 PM

AFP/fl
China’s shadow banking activities have risen nearly 70 per cent over the past two years and now total more than half the size of the world’s second-largest economy.

BEIJING: China’s shadow banking activities have risen nearly 70 per cent over the past two years and now total more than half the size of the world’s second-largest economy, ratings agency Moody’s said on Monday. Shadow banking includes private lending, off-balance-sheet vehicles and trusts, and allows borrowers to circumvent banks’ formal underwriting standards, as well as official regulation. Such lending has surged 67 per cent since the end of 2010, Moody’s said in a report, reaching an estimated total of 29 trillion yuan (US$4.7 trillion) at the end of last year, or 55 per cent of China’s GDP. The rapid growth was partly due to some borrowers having difficulties obtaining regular bank loans, according to the report, and threatened the health of the banking system and the overall economy. “Shadow banking may encourage excessive financial leverage in the broad economy and add to credit bubble concerns,” Moody’s said. “Given the substantial scale and growth of shadow banking activities in China, we are doubtful of the banks’ ability to isolate themselves from a significant increase in defaults in the shadow banking domain.” China’s banking regulator has sought to rein in non-transparent lending activities and in March ordered banks to step up checks on wealth management products as part of a bid to boost risk control and openness. But Moody’s said: “The impact from shadow banking on banks will depend on the amount and timing of losses and how they are allocated, variables that are difficult to assess at this point, given the lack of transparency and fast-evolving nature of shadow banking in China.”

Everyone Will Be Debating The WSJ Story About The Fed Considering Ways To End QE

Everyone Will Be Debating The WSJ Story About The Fed Considering Ways To End QE

Joe Weisenthal | May 12, 2013, 7:22 PM | 2,992 | 16

Futures are down modestly in early Sunday trading, and one possibility for that is the story that came out after the bell on Friday in the Wall Street Journal from Fed whisperer Jon Hilsnerath titled Fed Maps Exit From Stimulus. The gist: The Fed is seriously thinking about how it might begin the QE wind-down process. Given the widespread belief that Fed stimulus is a major tailwind for the market, talk of QE wind-down is invariably something of a negative. In tonight’s “Closing Print” note, Mike O’Rourke from JonesTrading thinks the article’s existence is pretty significant.

He writes:

The WSJ’s Jon Hilsenrath published a story Friday evening titled “Fed Maps Exit From Stimulus – Timing of Wind-Down Is Uncertain, but Focus Is on Managing Unpredictable Market Expectations.”  We suspect the twitter taper caper on Thursday opened the window for the FOMC to provide some clarity as to where policy stands.  Here are some key questions.  Is this story important?  Can it be taken at face value and should markets move?  The answer is yes, yes and yes.  The WSJ placed the article prominently on the cover of the Saturday edition, so they believe they have an important story.  It is a Hilsenrath story, and in the post-recession QE era the Fed has used him to foreshadow almost every major monetary policy move. Finally, in a tape where QE is the dominant theme, any indication of policy slowing or reversing course is meaningful.  Read more of this post

China’s Data Manipulation In One Chart, And Why The Real Data Implies Weakest GDP Growth In Over 20 Years

China’s Data Manipulation In One Chart, And Why The Real Data Implies Weakest GDP Growth In Over 20 Years

Tyler Durden on 05/12/2013 13:31 -0400

By definition, exports from country A have to equal imports from country B. Unless country A is China. Then, central planning magic happens, as can be seen in the chart below showing the misreporting of Chinese exports to HK compared to HK’s reported imports from China, which is just the latest nail in the coffin of Chinese economic data “integrity.” The issue, however, is that since China manipulates its data “upward”, as does the rest of the civilized, “unmanipulating” world, none of the ‘very serious people‘ have any incentive in calling China out – because suddenly all the world’s growth data may fall under the microscope, as perhaps it should – after all it was less than two years ago that we observed that the entire world was exporting over $300 billion more than it was importing (numbers which should net to zero), leading us to wonder if it was aliens that were importing all the excess Louis Vuitton bags… So for those actually interested, here is Sean Corrigan of Diapason breaking down the true numbers behind China’s economy, who using real export and import data ex-manipulation and fudging, that China’s reported 7.7% GDP would translate into a 5.5% Q1 GDP growth, the lowest rate of growth in 20 years! Read more of this post

China Officials Seek Career Shortcut With Feng Shui

May 10, 2013

China Officials Seek Career Shortcut With Feng Shui

By DAN LEVIN

In Hunan Province, a boulder was placed outside a government building to create better feng shui for superstitious civil servants.

ZOUMAJIE, China — Outraged peasants protesting land grabs. Jilted mistresses plotting revenge. Provincial investigators seeking out graft.

For top officials at the local land resources bureau beleaguered by these and other headaches, there could only be one explanation for the miasma of misfortune they believed was threatening their careers last year: the pair of ferocious stone lions that guarded the state-owned China Tobacco building across the street from their offices.

An official confided that the secret weapon the land bureau used was feng shui, the ancient practice of arranging objects and designing architecture to improve one’s health, prosperity and luck. For proof, he nodded toward a stone wall in the parking lot that was built to block the feline statues’ harmful qi, or energy.

“Our bureau wasn’t doing so well until we erected the barrier last year,” said the official, who gave only his last name, Chen. “Now things are a lot better.” Read more of this post

The Son also Rises: nepotism doesn’t disappear in China, it just gets a promotion

The Son also Rises: nepotism doesn’t disappear in China, it just gets a promotion

Monday, 13 May, 2013, 12:00am

News›China

CHINA BRIEFING

Wang Xiangwei xiangwei.wang@scmp.com

The history of graft in China has come full circle amid reports of children of powerful officials stepping into their parents’ shoes

Throughout Chinese history, the expression ya nei originally meant palace guards but later referred generally to children of government officials. In traditional Chinese opera and drama, they are immortalised as the worst of the worst – vile, violent and corrupt. Dressed in silk and drooped in gold, ya nei roamed the streets, beating people for no particular reason or kidnapping young girls and forcing them to become concubines. They usually escape punishment thanks to their powerful fathers and relatives. Today, such characters may go by a different name, guan er dai – the second-generation government officials, or princelings, particularly those of top mainland leaders. While they may no longer go around beating people or abducting girls, they invariably take advantage of their parents’ power and influence to enrich themselves or their families. Judging by the rising number of reports in state media, the guan er dai are now using their nepotistic connections for what is termed “riding a rocket” – being promoted rapidly through government or party ranks to fill positions that, usually, have been vacated by their parents. Read more of this post

Ancient Buddhist temple in China bogged down by fake monks and debt

Ancient Buddhist temple in China bogged down by fake monks and debt

Sunday, 12 May, 2013, 7:31pm

Patrick Boehler

A provincial city’s ambitious plans for turning an ancient Buddhist temple near Xian into the world capital of Buddhism and listing it on a stock exchange have stagnated, leaving the temple surrounded by fake monks and sham Buddha statues.

Famen Temple houses a Buddhist relic. Photo: AP[1]In an investigative report [2], the Guangzhou-based Southern Weekly documents how the project involving the 1,700-year-old Famen Temple in Shaanxi province – which boasts the ownership of Buddha’s finger bone – went horribly wrong.

Now, fake monks from Hubei province roam a nearby scenic park that opened in 2009 and that tourists and pilgrims mistaken as part of the temple. The impostors get commission for collecting donations to the Shaanxi Famen Charitable Foundation. But clueless visitors do not know the foundation is a front for the operating company of the park, Shaanxi Famen Temple Scenic Park Cultural Industrial Group, and is not related to the temple, the weekly reported last week. Read more of this post

European companies wrote off a record €350bn in bad debt last year, more than the annual GDP of Austria, Denmark or Finland.

May 12, 2013 11:03 pm

European groups write off record €350bn in bad debt

By Richard Milne, Nordic Correspondent

European companies wrote off a record €350bn in bad debt last year, more than the annual GDP of Austria, Denmark or Finland.

The amount of write offs increased 7 per cent in the past year and 27 out of the 31 countries surveyed by Intrum Justitia, a Swedish credit management company, saw either a worsening in credit conditions, or no change. The debt amounts to 3 per cent of all outstanding invoices in European companies.

“It is the highest level of bad debt losses so far, and the forecast is bleak. Three per cent of all receivables; think of the net profit margin of companies in Europe and that is a big part of it,” Lars Wollung, Intrum Justitia’s chief executive, told the Financial Times. Read more of this post