The China Dream a far cry from the American Dream – it’s Meng

The China Dream a far cry from the American Dream – it’s Meng

Created: 2013-6-20 0:16:59, Updated: 2013-6-21 12:41:38

Author:Thorsten Pattberg

Many Western commentators translate Zhongguo Meng as “Chinese Dream,” thereby patronizing China’s socio-cultural originality and marketing it as a franchise of the “American Dream.”
But are the two civilizations really sleeping on the same pillow?
What is that – a “China Dream”- if not first a Western translation? Read more of this post

Li Zuojun, China’s most successful economics doomsayer

Li Zuojun, China’s most successful economics doomsayer

Staff Reporter

2013-06-26

Chinese investors are holding their collective breaths to see if the banking crisis predicted two years ago by renowned Chinese economist Li Zuojun will come to fruition in the next couple of months.

Li, the deputy director at the Development Research Center of China’s State Council, penned an article in Sept 2011 predicting that there will be a major banking crisis in July or August this year caused by excessive local government debt or a housing bubble. Read more of this post

PBoC hints at new status quo for China’s banks; credit crunch’s fallout may be felt for months to come around the world in the form of slower Chinese growth and weaker appetite for commodities from copper to oil

June 26, 2013 12:56 pm

PBoC hints at new status quo for China’s banks

By Simon Rabinovitch in Shanghai

The acute phase of China’s cash squeeze appears to have ended, with no major casualties to mention.

But analysts say the crunch’s fallout may be felt for months to come around the world in the form of slower Chinese growth and weaker appetite for commodities from copper to oil. Read more of this post

Kevin Rudd returned as Australia’s prime minister, defeating Julia Gillardin a leadership vote that marks a stunning turnaround for a figure whom she toppled three years ago but has remained popular among voters

Updated June 26, 2013, 6:20 a.m. ET

Rudd Beats Gillard in Leadership Vote

ENDA CURRAN

SYDNEY— Kevin Rudd returned as Australia’s prime minister, defeating Julia Gillardin a leadership vote that marks a stunning turnaround for a figure whom she toppled three years ago but has remained popular among voters.

Mr. Rudd’s decisive victory in a leadership ballot among ruling Labor party members on Wednesday caps a bitter tussle for the premiership that has been likened to a classical drama ever since Ms. Gillard led the party revolt that ousted Mr. Rudd in 2010. Read more of this post

ETF Tracking Errors in Rout Shows Access Comes With Risks

ETF Tracking Errors in Rout Shows Access Comes With Risks

By Christopher Condon and Michelle Kaske – Jun 23, 2013

Investors lured to exotic assets by the convenient access that exchange-traded funds provide were reminded last week that they can’t dodge the volatility or illiquidity of those markets.

Dozens of ETFs, mainly those tracking emerging-market stocks, sold at big discounts to their underlying holdings as investors fled developing nations. The $468 million iShares MSCI Indonesia Investable Market Index Fund, run by New York-based BlackRock Inc. (BLK), traded 7 percent below the value of its holdings on June 20, the largest discount among U.S.-traded ETFs with at least $100 million in assets, according to data compiled by Bloomberg. Read more of this post

Four Reasons Non-GAAP Metrics Are Exploding

June 25, 2013, 4:36 PM ET

Four Reasons Non-GAAP Metrics Are Exploding

Emily Chasan

U.S. companies are relying more and more on non-traditional financial reporting metrics to run their companies and communicate with investors.

Since U.S. securities regulators relaxed their stance on the use of non-GAAP measures in 2010, many companies have begun to report metrics like customer churn rates and average revenue per user. Companies can include such metrics in financial reports as long as they aren’t misleading. Read more of this post

Getting the price of assets right is a delicate balance

Getting the price of assets right is a delicate balance

Wednesday, June 26, 2013

Andrew Sheng, President of the Fung Global Institute, is a former chairman of the Hong Kong Securities and Futures Commission, and is currently an adjunct professor at Tsinghua University in Beijing. Xiao Geng is Director of Research at the Fung Global Institute

Building and maintaining the infrastructure of property rights – the rules, laws, registers, and administrative and judicial structures that define, protect, and enforce such rights and regulate economic transactions – has traditionally been the responsibility of national governments. But, as the world economy has become increasingly interconnected, a global property-rights infrastructure (PRI) has emerged – further raising the stakes of developing effective national PRIs and accurate price-discovery mechanisms. Read more of this post

Italy faces restructured derivatives hit; Audit finds potential loss of billions and reveals euro-entry tactics

June 26, 2013 1:04 am

Italy faces restructured derivatives hit

By Guy Dinmore in Rome

Italy risks potential losses of billions of euros on derivatives contracts it restructured at the height of the eurozone crisis, according to a confidential report by the Rome Treasury that sheds more light on the financial tactics that enabled the debt-laden country to enter the euro in 1999.

A 29-page report by the Treasury, obtained by the Financial Times, details Italy’s debt transactions and exposure in the first half of 2012, including the restructuring of eight derivatives contracts with foreign banks with a total notional value of €31.7bn. Read more of this post

Bond yields threaten recovery in global banks’ balance sheets

June 25, 2013 7:04 pm

Bond yields threaten recovery in global banks’ balance sheets

By Tom Braithwaite in New York and Patrick Jenkins in London

The recovery in global banks’ balance sheets is under threat from a surge in bond yields, according to senior bank executives and analysts preparing for the quarterly earnings season.

Banks have built giant portfolios of liquid securities, partly at the behest of regulators and also because they have not found better opportunities to lend a flood of deposits.Under new capital rules, unrealised losses in these “available for sale” portfolios hit banks’ equity capital. Read more of this post

Brazil’s love of the car begins to backfire for political leaders; Anger over poor investment in public transport

Last updated: June 25, 2013 4:26 pm

Brazil’s love of the car begins to backfire for political leaders

By Joe Leahy in São Paulo

In Entreatos, a documentary film about his election in 2002, Luiz Inácio Lula da Silva, former Brazilian president, describes his “middle-class” pride when he bought a car in the 1970s.

“I felt like a king,” said the man who started out as a metal worker in what was then Brazil’s equivalent of Detroit, the car-manufacturing hub of São Paulo known as “ABC Paulista”. Read more of this post

The dangers of courting Asean consumers; Much of the growth in southeast Asia has been credit-fuelled

June 25, 2013 7:39 pm

Inside Business: Credit dependency looms over Asia’s middle classes

By Jeremy Grant

For furniture shoppers on the high streets of Britain, the name Courts will probably forever be associated with furious customers who attacked the company’s staff and threw bricks through shop windows as it sank into administration eight years ago.

But in southeast Asia, the name is rapidly becoming emblematic of the big trend sweeping the region: the rise of a middle class of consumers, and of companies chasing their wallets. Read more of this post

Golden ratings era ending for emerging markets

Golden ratings era ending for emerging markets

Fri, Jun 21 2013

By Sujata Rao

LONDON, June 21 (Reuters) – A decade of improvement in emerging market credit ratings is coming to an end as higher borrowing costs and commodity price falls threaten to lay bare many countries’ failure to reform during the good times. Between 2007 and 2012 emerging economies earned almost 200 rating upgrades from the three main agencies, nearly half of them promotions to the top ‘investment grade’ category. Given the weight investors still assign to credit ratings, that was a huge driver for much of the $8 trillion or so that has flowed to emerging stock and bond markets since 2004. Read more of this post

Bond king Bill Gross and his protégé Mark Kiesel are among the hardest hit from bonds’ recent declines, a sign the selloff has caught some of the most trusted hands in the investing community

Updated June 25, 2013, 8:15 p.m. ET

Bond Selloff Creates Fits for the ‘King’

MIN ZENG and KIRSTEN GRIND

Bond king Bill Gross is one of the hardest hit from the broad credit market selloff.

Pacific Investment Management Co.’s $285.2 billion Total Return Bond Fund has lost 3.65% in June alone, making it the 12th-worst performer among 177 similar bond funds tracked by data firm Lipper. Read more of this post

Ruchir Sharma: How Emerging Markets Lost Their Mojo; Investors have once again come to see state companies as slow-witted giants, prone to overinvest and overbuild

June 25, 2013, 7:08 p.m. ET

Ruchir Sharma: How Emerging Markets Lost Their Mojo

Investors have once again come to see state companies as slow-witted giants, prone to overinvest and overbuild.

RUCHIR SHARMA

Emerging economies have lost nearly $2 trillion in stock-market value since the global financial crisis hit in late 2007. The full blame for this meltdown, and then some, can be placed at the door of their state-owned companies, which account for a third of these economies’ roughly $9 trillion market capitalization.

Over the past five years, the value of private companies in emerging economies—including Brazil, Russia, India and China, as well as Mexico, Indonesia and Turkey—has remained broadly stable. Meanwhile, the value of state-owned companies (defined here as companies with a government ownership stake of at least 30%) dropped by more than 40%. Today there is only one state company (PetroChina) among the 10 most valuable companies in the world, down from five in 2008. Read more of this post

Weak Links Mar Investing in China; Stocks Trail the Rest of the Economy as State-Owned Companies Get Preferential Treatment for IPOs

June 25, 2013, 8:13 p.m. ET

Weak Links Mar Investing in China

Stocks Trail the Rest of the Economy as State-Owned Companies Get Preferential Treatment for IPOs

SHEN HONG

The selloff in China’s stock market abated on Tuesday, but a key issue for investors remains: The country’s financial system puts state-owned companies ahead of private businesses.

The Shanghai Composite Index fell 0.2% on Tuesday after tumbling 5.3% on Monday, its biggest one-day percentage decline since August 2009, on worries about a credit crunch. Chinese shares initially began trading on Tuesday with another sharp drop, but recovered after Chinese central-bank officials sought to soothe investors. Read more of this post

Brazil riots raise questions over sporting mega-events

Brazil riots raise questions over sporting mega-events

Tue, Jun 25 2013

By Brian Homewood

BERNE (Reuters) – Brazilian anger against the cost of staging the World Cup could undermine the argument that host countries benefit from sporting mega-events as they become too big for most countries to handle.

UEFA’s idea of splitting the Euro 2020 championship into mini-tournaments hosted in 13 different countries could be one of the alternatives which organizers could follow in the future, analysts say. Read more of this post

Wall Street’s $8 Billion CMBS in Limbo as Bulls Retreat

Wall Street’s $8 Billion CMBS in Limbo as Bulls Retreat

Wall Street firms spent the past six months increasing commercial mortgage origination as investors bought the most debt in six years. That’s now backfiring as banks prepare to market $7.5 billion of loans earmarked to be sold as bonds before credit markets took a dive this month.

Investors are demanding 1.2 percentage points more than the benchmark swap rate to buy new commercial mortgage backed securities tied to shopping malls, skyscrapers, hotels and apartment buildings, according to data compiled by Bloomberg. That’s up from 72 basis points in February, the narrowest spread since sales revived in 2009, the data show. Lenders’ profits are eroded when values of the securities fall. Read more of this post

Americans Exit Harrods Top 10 as Chinese Flock to Store

Americans Exit Harrods Top 10 as Chinese Flock to Store

The days of Americans being the biggest overseas shoppers at London’s Harrods store are over.

While seven years ago U.S. visitors were the top foreign spenders at the purveyor of luxury fashions and specialty teas, they are now outnumbered by wealthy customers from China and the Middle East, according to Managing Director Michael Ward. Read more of this post

While Toyota generated the highest return last year among the world’s five biggest automakers by sales, Akio Toyoda, 57, is the lowest-paid chief of the group, earning less than one tenth as much as his best-compensated counterpart

Toyota President Delivers Highest Returns for Lowest Pay

Toyota Motor Corp. (7203) made its name on the value and efficiency of its cars. Its chief executive is earning a similar reputation for his compensation.

While the company generated the highest return last year among the world’s five biggest automakers by sales, President Akio Toyoda, 57, is the lowest-paid chief of the group, earning less than one tenth as much as his best-compensated counterpart. Read more of this post

Taiwan Cuts Capital Gains Tax on Share Sales, Removes Threshold

Taiwan Cuts Capital Gains Tax on Share Sales, Removes Threshold

Taiwan lawmakers voted to roll back provisions of a capital gains tax on stock sales of more than NT$1 billion ($33.3 million) and removed an index price threshold that depressed shares.

Tax on capital gains from transactions of more than NT$1 billion was reduced to 0.1 percent from the 2.25 percent under the original law. Lawmakers also removed a 8,500-point close threshold for the Taiex index before the tax could go into effect. Legislative Yuan President Wang Jin-pyng announced the passage of revisions in a special legislative session today. Read more of this post

Foreign Funds Erase Inflow Into Indonesia Stocks This Year; Philippine Stocks Enter Bear Market as Foreign Outflows Surge

Foreign Funds Erase Inflow Into Indonesia Stocks This Year

Foreign fund flows into Indonesian equities turned negative for the first time this year after investors pulled money from the stock market for a 22nd day.

Foreigners sold a net $68 million worth of Indonesian stocks yesterday, according to data compiled by Bloomberg, taking total outflows this year to $20 million. The Jakarta (JCI) Composite Index fell for a fifth day, dropping 0.2 percent to 4,418.872, its lowest close since Jan. 28. Read more of this post

Brazil’s World Cup Scorn Deepens Rout as Budget in Danger

Brazil’s World Cup Scorn Deepens Rout as Budget in Danger

The record rout in Brazilian bonds is deepening on speculation President Dilma Rousseff’s vow to boost spending to placate protesters will swell the budget deficit at a time when a stagnating economy saps tax revenue.

Brazil’s real-denominated bonds due 2023 have plunged this month, causing yields to jump to a 15-month high of 11.63 percent on June 21 even as the Treasury offered to buy back the notes in five unscheduled auctions this month. In the same span, the cost to protect its sovereign dollar debt against losses for five years soared to a 20-month high and exceeded that of lower-rated Turkey for the first time in seven years. Read more of this post

Abe Recovery Pits Graduate Jobs Against Senior Savings

Abe Recovery Pits Graduate Jobs Against Senior Savings

In the heart of Tokyo on a March afternoon, Akitsugu Yamamoto, clean-cut and clad in a dark business suit, is looking for a job at an employment agency whose name translates as New Grad Hello Work.

In a couple of days, Yamamoto, 27, will be leaving Waseda University, one of Japan’s top educational institutions, with a graduate degree in public management — and no job offers, Bloomberg Markets will report in its August issue. Read more of this post

Taiwan’s Prodigal Companies Come Home as China Labor Costs Rise

Taiwan’s Prodigal Companies Come Home as China Labor Costs Rise

For eight years, the former Taroko Textile Corp. factory in Hsinchu County, Taiwan, has been empty, a victim of the migration of manufacturing to the mainland. Now, as China’s supply of cheap labor wanes, work is returning.

ITEQ Corp. (6213), which makes materials electronics companies need to build circuit boards, is installing equipment as part of a NT$2 billion ($66 million) refurbishment to begin production by the end of 2014, said Eric Liu, head of investor relations. It will be the company’s first new factory in Taiwan since 1998. ITEQ began moving work to Guangdong in southern China in 2002. Read more of this post

Lexus Made in Japan Risks China Irrelevance

Lexus Made in Japan Risks China Irrelevance

When shopping last year for his first car, Will Zhang considered a Lexus CT200h and a BMW 320i. Though he preferred the Lexus, he went with the BMW because at 340,000 yuan ($55,400) it was 18 percent cheaper.

“The Lexus has superior quality, performance and fuel economy,” said the 32-year-old manager at a Shanghai property developer. “But I chose the BMW for the price.” Read more of this post