China said it will start an investigation to ensure the accuracy of data filed by companies as part of efforts to improve the reliability of statistics in the world’s second-largest economy

China Starts Probe to Ensure Accuracy of Economic Data

China said it will start an investigation to ensure the accuracy of data filed by companies as part of efforts to improve the reliability of statistics in the world’s second-largest economy.

There is an urgent need to prevent fraud in data submission, National Bureau of Statistics head Ma Jiantang was cited by China Information News today as having said on June 24. Those found submitting inaccurate information for major statistics may be “severely punished,” the newspaper, published by the bureau, reported without citing anyone. Read more of this post

Why Are So Many College Graduates Driving Taxis?

Why Are So Many College Graduates Driving Taxis?

It’s a parent’s nightmare: shelling out big money for college, then seeing the graduate unable to land a job that requires high-level skills. This situation may be growing more common, unfortunately, because the demand for cognitive skills associated with higher education, after rising sharply until 2000, has since been in decline.

So concludes new research by economists Paul Beaudry and David Green of the University of British Columbia and Benjamin Sand of York University in Toronto. This reversal in demand has caused high-skilled workers to accept lower-level jobs, pushing lower-skilled people even further down the occupational ladder or out of work altogether. If the researchers are right (which is not yet clear), the consequences are huge and troubling — and not just for college grads and their parents. Read more of this post

Ratings Ratio Worst Since 2009 as Profits Slow: Credit Markets

Ratings Ratio Worst Since 2009 as Profits Slow: Credit Markets

Corporate creditworthiness in the U.S. is deteriorating at the fastest pace since 2009 with earnings growth slowing as yields rise from record lows.

The ratio of upgrades to downgrades fell to 0.89 times in the first five months of the year after reaching a post-crisis high of 1.55 times in 2010, according to data from Moody’s Capital Markets Group. At Standard & Poor’s, the proportion has declined to 0.83 as of last week from 1 a year earlier.

The Federal Reserve has pumped more than $2.5 trillion into the financial system since markets froze in 2008, helping companies improve profitability by lowering their borrowing costs. Policy makers are considering curtailing $85 billion in monthly bond buying intended to prop up the economy as analysts surveyed by Bloomberg forecast earnings growth of 2.5 percent in the current quarter, the least in a year. Read more of this post

Brazil Burns With Bus Fares Double NYC: Chart of the Day

Brazil Burns With Bus Fares Double NYC: Chart of the Day

Residents of Sao Paulo and Rio de Janeiro devote a bigger share of their paychecks to mass transit than counterparts around the world even after winning a fight to revoke a 9-cent increase in bus fares.

The CHART OF THE DAY shows residents of Brazil’s two biggest cities must work an average 10 minutes to pay for a bus ticket, more than twice the time needed in Paris or New York. The comparison is based on the latest report by UBS AG on purchasing power in 72 cities. In Beijing and Mumbai, less than four minutes of work buys a ticket. Read more of this post

Chinese Banks Stop Lending Due To Liquidity Freeze

Chinese Banks Stop Lending Due To Liquidity Freeze

Tyler Durden on 06/26/2013 08:16 -0400

If one thought the schizophrenic lies out of Europe between 2010 and 2013 were bad enough (the bulk of which it now appears were orchestrated by Mario Draghi), here comes China, a country which already has a “credibility” issue so to say, which has no choice but to lie as blatantly as possible in order to preserve some semblance of stability. The reason: as first forecast here months ago, and as has subsequently materialized, the credit/liquidity collapse in the country that lives and breathes on credit creation (the bulk of which is created in the shadow banking system) is rippling through the banking sector and causing unprecedented fallout for a financial industry that is already starved for every marginal yuan (and in a Keynesian “credit=growth” world, the economic crush is just waiting beyond the next corner). Not unexpectedly following news that various retail and online banking services had been impaired in the early part of the week at China’s biggest banks, now Caixin reports that banks are simply shutting lending to both businesses and individuals.

Read more of this post

World’s Most Indebted Households Face Rate Pain: Nordic Credit

World’s Most Indebted Households Face Rate Pain: Nordic Credit

By Frances Schwartzkopff – Jun 26, 2013

Danish consumers, who owe banks more than three times their disposable incomes, are about to find out how sustainable that debt load is as interest rates rise.

Signals from the U.S. Federal Reserve that it’s preparing to scale back monetary stimulus have already sent mortgage costs higher as yields rise across global bond markets. The Nykredit Index of Denmark’s most traded mortgage bonds sank this week to its lowest in more than four months after investors sold assets once coveted for their haven status. Read more of this post

Quarterly fund statements could trigger another bond market sell-off; Lousy performance could mean more volatility, observers say; ‘that’s how these things get legs’

Quarterly fund statements could trigger another bond market sell-off

Lousy performance could mean more volatility, observers say; ‘that’s how these things get legs’

By Jeff Benjamin

Jun 25, 2013 @ 12:22 pm (Updated 4:11 pm) EST

Even if the recent volatility in the financial markets starts to calm down, the bond market could experience a second stage of selling as mutual fund investors start receiving their quarter-end statements and react with even more selling.

“What is scary here is the forces of mutual fund investors’ seeing their net asset values drop, and they are going to start dropping significantly,” said Dan Toboja, senior vice president of fixed income at Ziegler Capital Markets. Read more of this post

Why Did Chinese ATMs Stop Working?

Why Did Chinese ATMs Stop Working?

On Sunday morning, while China was taking a weekend breather from the financial fireworks caused by the government’s weeklong self-inflicted cash and credit crunch, customers of the Industrial and Commercial Bank of China, the world’s largest bank, woke to an unpleasant surprise: Their deposits were not available for withdrawal by ATM or teller (online or in-person).

The social-media reaction was swift, filled with exclamation points and lacking in confidence for ICBC, or the Chinese banking system as a whole. “I was just at ICBC to make a withdrawal and was told the system was undergoing an upgrade and withdrawals are temporarily unavailable,” tweeted a user in Shenyang on Sina Weibo, China’s leading social-media platform. “I called the service hot line, finally someone answered and said they don’t know the answer!!!!!!! ICBC: When can we withdraw money? Who can give a clear answer??????????????” Read more of this post

China steel firm goes bust as slowdown, supply glut bite; chairman of Jiangxi Steel sought to abscond with 200 million yuan after the company’s credit lines were suddenly cut off and the plant shut down

China steel firm goes bust as slowdown, supply glut bite

Wednesday, Jun 26, 2013

Reuters

BEIJING – A steel firm in the eastern Chinese province of Jiangxi has been declared insolvent and shut down after failing to pay its debts, adding to jitters in a sector struggling with overcapacity and weak prices, the China Business News reported on Wednesday.

China’s steel mills have been producing at near record rates in recent months despite a downturn in demand and a long decline in prices due to a massive supply glut. Industry experts have warned that closures are inevitable. Read more of this post

Devendra Shah turned Parag Milk Foods into one of the most profitable dairy businesses. His secret: High-value milk products, especially cheese

How Parag Milk Foods Got it Right with Cheese

by Samar Srivastava | Jun 26, 2013

Devendra Shah’s call to go for milk products has paid off for the company—75% of revenues come from cheese, flavoured yoghurt and ghee

Devendra Shah turned Parag Milk Foods into one of the most profitable dairy businesses. His secret: High-value milk products, especially cheese

In early 2008, a few months before the global economy went into a tailspin, Devendra Shah, the pudgy boss of Parag Milk Foods, took his boldest bet ever. In those days, India, which produces 127 million litres of milk a day, converted just 40 tonnes of that yearly flood into cheese, according to industry estimates. Most of this was made by Amul and sold to retail consumers.

Shah, who had set up his dairy 16 years ago in 1992 in Manchar, an hour’s drive from Pune, believed that India was on the cusp of a huge jump in cheese consumption. Now, this was before Indians had begun devouring pizzas faster than companies could serve them. Dominos had only 62 stores across India, a fraction of the 576 it has today. Other pizza chains, where they existed, were relatively smaller. Read more of this post

Post-90s Chinese Grads Confront Nepotism

Post-90s Grads Confront Nepotism – Economic Observer Online

By Li Yu (李谕) and Wu Weiting (吴娓婷)
Issue 625, June 24, 2013
The majority of university students graduating this year were born in 1990 and 1991, meaning the “Post-90s Generation” is entering the real world. But this entrance hasn’t been a very welcoming one.

A record 6.99 million-strong graduating class paired with an economic slump has resulted in what’s been deemed the worst job-hunting season in history. As of the beginning of June, only 33 percent of these graduating seniors had signed employment contracts. Read more of this post