Natto Makers to Public Baths Suffer in Abenomics Divide

Natto Makers to Public Baths Suffer in Abenomics Divide

Almost everything Mikio Matsushita’s factory near Tokyo needs to produce natto is imported, from the soybeans used in the fermented Japanese snack to the polystyrene trays in which they’re packaged.

The reliance on imports, combined with the domestic market focus for the quintessentially Japanese product, puts Matsushita on the losing end of government policies that aid heavy exporters by weakening the country’s currency.

Expenses have surged for Matsushita’s company as the yen’s slide boosts its costs for beans grown in China and North America. The fuel it uses to steam the beans and for the natto’s polystyrene packaging, both petroleum products derived from imported crude, have also gotten more expensive. Read more of this post

Japan PM Abe’s true test; rising Govt bond yields

Published: Monday June 17, 2013 MYT 8:47:00 AM

Japan PM Abe’s true test; rising Govt bond yields

TOKYO: Abenomics’ massive monetary stimulus was supposed to depress long-term interest rates to spur economic activity, but the Japanese government bond market has other ideas.

Banks, unable to make money on their Japanese government bonds (JGBs) anymore, have begun sloughing off their holdings, putting upward pressure on yields. Major banks sold off about 11 percent of their holdings in April alone.

Large lenders have hiked their prime rates to make up for the loss of earnings on JGBs, which threatens to price potential borrowers out of the mortgage market, while higher long-term rates could sap corporate Japan’s already anaemic demand for loans. Read more of this post

Indonesia Coal, Oil May Be Depleted in 10 Years

Indonesia Coal, Oil May Be Depleted in 10 Years

By Tito Summa Siahaan on 9:26 pm June 14, 2013.
Indonesia may find itself without the fossil fuels crude oil and coal in the next decade, unless there are major new discoveries, according to an annual report released by British energy giant BP.

The Statistical Review of World Energy 2013, which was released on Thursday, showed that Indonesia may run out of oil by 2024, holding constant the figures for production and proven reserves.

The report showed oil production from the Southeast Asian nation stood at 918,000 barrels per day last year, with remaining reserves at 3.7 billion barrels. Oil consumption was 1.56 million barrels in 2012. Read more of this post

As Australia’s resources investment slows more rapidly than expected, economists say the central bank is running out of time to reignite other parts of the economy

June 16, 2013, 3:45 p.m. ET

Economists See Risk of Australian Recession

By JAMES GLYNN And RACHEL PANNETT

GEELONG, Australia—At Oppy’s Bistro in this industrial heartland, bartender Gael Fedley is thousands of miles—both literally and figuratively—from a resources boom that’s led Australia to grow faster than any major developed economy in recent years.

A string of factory closures in the town, around an hour’s drive from the country’s second-biggest city, Melbourne, is having an impact on a once-thriving business. Fewer customers stop by Oppy’s now, while regulars have less money to spend on booze and little cause to celebrate. Read more of this post

Faltering Economy in China Dims Job Prospects for Graduates; “The only thing that worries them more than an unemployed low-skilled person is an unemployed educated person”

June 16, 2013

Faltering Economy in China Dims Job Prospects for Graduates

By KEITH BRADSHER and SUE-LIN WONG

HONG KONG — A record seven million students will graduate from universities and colleges across China in the coming weeks, but their job prospects appear bleak — the latest sign of a troubled Chinese economy.

Businesses say they are swamped with job applications but have few positions to offer as economic growth has begun to falter. Twitter-like microblogging sites in China are full of laments from graduates with dim prospects.

The Chinese government is worried, saying that the problem could affect social stability, and it has ordered schools, government agencies and state-owned enterprises to hire more graduates at least temporarily to help relieve joblessness. “The only thing that worries them more than an unemployed low-skilled person is an unemployed educated person,” said Shang-Jin Wei, a Columbia Business School economist. Read more of this post

Record Soybean Glut Is Seen Worsening as China’s Appetite Eases

Record Soybean Glut Is Seen Worsening as China’s Appetite Eases

Soybean imports by China, the biggest buyer, may be lower than official U.S. forecasts, deepening a glut and weighing down prices as global reserves are set to reach a record.

Inbound shipments will be 63 million metric tons in the 12 months starting Oct. 1, less than the U.S. Department of Agriculture’s June 13 projection of 69 million tons, according to the median of 14 estimates of China-based crushers and researchers by Bloomberg. Soybeans, which rose to a record $17.89 a bushel in Chicago during the 2012 drought in the U.S., slumped 14 percent this month and are in a bear market along with corn and wheat. Read more of this post

China’s Bearish ETF Bets Most Expensive in Two Months on concern a local money-market cash crunch will deepen a slump in Asia’s biggest economy.

Bearish ETF Bets Most Expensive in Two Months: China Overnight

Options traders are paying the most in two months to protect against drops in the largest Chinese exchange-traded fund in the U.S. on concern a local money-market cash crunch will deepen a slump in Asia’s biggest economy.

The cost of three-month puts on the iShares FTSE China 25 Index Fund (FXI) soared to the highest since September last week, option data compiled by Bloomberg showed. The 4.3-point premium of puts over calls was the widest since April 17. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. slumped the most in four months last week, led by a 16 percent drop in Yanzhou Coal Mining Co. Read more of this post

The Fed Is Tightening, Whether or Not It Wants To

The Fed Is Tightening, Whether or Not It Wants To

The Federal Open Market Committee, the group of central bankers that sets U.S. monetary policy, will meet next week. The members will have to consider the possibility that in trying to clarify their “exit strategy” from quantitative easing and zero interest rates, they’ve tightened policy more than they intend.

Monetary conditions are certainly tightening. The accompanying graph depicts the market’s expectation of the federal funds rate, the baseline short-term interest rate the Fed targets, from now to 2016. It shows that expected rates have risen sharply over the last month. (Expected rates hadn’t moved much before that this year.)

The market had thought last month that, in April 2016, the Fed would have the rate at 0.75 percent. It now thinks it will be 1.15 percent at that time. Since the target rate is set in increments of 0.25, that implies a 60 percent chance of 1.25 percent and a 40 percent chance of 1 percent. Similar hikes have occurred across the board. Read more of this post

Infosys’s Painful Recovery May Take Three Years, 66-year-old Murthy Says

Infosys’s Painful Recovery May Take Three Years, Murthy Says

A sales recovery at Infosys Ltd. (INFO), India’s second-largest software exporter, will take at least 36 months and may be painful, Chairman and co-founder N.R. Narayana Murthy said.

The company will adopt flexible pricing and refocus on winning large outsourcing deals as it looks to boost growth and narrow the lead of bigger rival Tata Consultancy Services Ltd. (TCS), Murthy said yesterday at the annual shareholders meeting in Bangalore.

“There will be some pain along the way,” said Murthy, a billionaire who was voted to the company’s board as a director yesterday. “I request your understanding and patience.” Read more of this post

Water Management Biggest Risk to China Shale Gas, Bernstein Says

Water Management Biggest Risk to China Shale Gas, Bernstein Says

Water management is the biggest challenge to shale gas development in China amid concern that extraction of the fuel will contaminate drinking supplies, according to Sanford C. Bernstein & Co. China’s government will need to find ways of getting capital and technology into its shale-gas sector without compromising environmental standards, said Neil Beveridge, a Hong Kong-based analyst at the consultant. “Despite very little knowledge of fracture stimulation or shale drilling, there is already a perceived concern of potential risks to clean-water contamination,” Beveridge said in an e-mailed report today. “While water is abundant in Sichuan, clean water is less so.” China is the “biggest shale opportunity” outside of the U.S., according to Bernstein. The country has the world’s largest shale gas resources, estimated at 4,746 trillion cubic feet (134.4 trillion cubic meters), it said, citing data from the Ministry of Land and Resources and the U.S. Energy Information Administration. Within China, Sichuan has the largest potential and the Silurian Longmaxi shale is the most prolific, the consultant said. In hydraulic fracturing, or fracking, drillers shoot a mixture of water, sand and chemicals underground to free oil and natural gas trapped in shale-rock formations.

To contact the reporter on this story: Chou Hui Hong in Singapore at chong43@bloomberg.net

South Korea Tightens Capital Flow Checks to Catch Tax Dodgers

South Korea Tightens Capital Flow Checks to Catch Tax Dodgers

South Korea is strengthening supervision of foreign exchange transactions as President Park Geun Hye broadens her country’s part in a global crackdown against tax evasion.

The Financial Supervisory Service and Korea Customs Service will have enhanced rights to investigate cross-border transactions at companies, the Finance Ministry said in an e-mailed statement today. Failure to report details of funds wired, assets acquired or the annual balance in investments may be subject to fines, the statement said.

Policing tax evasion has crept up the political agenda worldwide as governments struggle to pay for social programs amid high unemployment and weak economic growth. U.K. Prime Minister David Cameron yesterday said tax havens under Britain’s legal supervision pledged to fall in line with international agreements on exchange of information, a key topic at a meeting of the Group of Eight nations that begins tomorrow. Read more of this post

Malaysians getting into debt to sustain lavish lifestyles; Civil servants and low-income earners were having bigger household and personal debts than those in the middle and high-income groups

Malaysians getting into debt to sustain lavish lifestyles

Civil servants and low-income earners were having bigger household and personal debts than those in the middle and high-income groups. -The Star/ANN
Sun, Jun 16, 2013
The Star/Asia News Network

PONTIAN – Malaysians are getting themselves deeper into debt, leading to many youths and university graduates becoming bankrupts even as they enter the job market.

Deputy Finance Minister Datuk Ahmad Maslan said civil servants and low-income earners were having bigger household and personal debts than those in the middle and high-income groups.

He said most of those trapped in the debt syndrome were earning below RM3,000 (S$1,205) a month.

“One of the reasons they are borrowing money is to sustain an extravagant lifestyle, including buying things using credit cards. Read more of this post

Thailand’s boom: To the northeast, the spoils

Thailand’s boom: To the northeast, the spoils

Sat, Jun 15 2013

By Paul Carsten and Pairat Temphairojana

UDON THANI, Thailand (Reuters) – Steel girders jut from the low skyline of the Thai city of Udon Thani near the Laos border as workers lay cement for a new shopping mall, one of many illustrating a boom in the Thai economy beyond the bright lights of Bangkok.

The malls, factories and construction sites in Thailand’s northeast are emerging alongside its farms as a potent economic fuel in one of Asia’s top emerging markets. Growth in Thailand, Southeast Asia’s second-biggest economy, has begun to slow, but the economy of the northeast is in the grip of a boom.

The economic renaissance of “Isaan”, Thailand’s poorest and most populous region, has coincided with expansionary policies – from wage increases to farm subsidies – that are enriching an area at the heart of a “red shirt” protest movement that backed Prime Minister Yingluck Shinawatra in a 2011 election. Read more of this post

Bond Sales Slow Amid Climbing Credit Risk in Europe on Stimulus

Bond Sales Slow Amid Climbing Credit Risk in Europe on Stimulus

Sales of corporate bonds in Europe fell to the lowest in two months this week as the cost of insuring the debt against losses rose with investors anticipating a withdrawal of central banks’ stimulus measures.

Coca-Cola HBC AG (CCH), the world’s second-biggest bottler of the soft drink, and Rolls-Royce Holdings Plc (RR/), Europe’s largest maker of aircraft engines, led companies selling 6.3 billion euros ($8.4 billion) of bonds, down from 12.3 billion euros last week and the least since the week ending April 6, according to data compiled by Bloomberg. The Markit iTraxx Europe Index of credit-default swaps protecting against losses on 125 investment-grade borrowers was up four basis points on the week to 108.

Credit investors are concerned the U.S. Federal Reserve will trim its bond-buying program if it sees sustained employment growth, restricting support that has kept borrowing costs near record lows. Bank of Japan policy makers decided not to take additional steps to spur growth or extend the maturity of bank loan facilities earlier this week. Read more of this post

The Plight Of Europe’s Banking Sector, Its €650 Billion State Guarantee, And The “Urgent Need” To Recapitalize

The Plight Of Europe’s Banking Sector, Its €650 Billion State Guarantee, And The “Urgent Need” To Recapitalize

Tyler Durden on 06/15/2013 12:37 -0400

A month ago we quantified that just the overt European bank undercapitalization (excluding spillover effects from counterparty liability and derivative exposure) resulting from non-performing loans, is a staggering €500 billion. These NPLs “reduce the capacity of banks to lend, hindering the monetary policy transmission mechanism. Bad debts consume capital and make banks more risk averse, especially with respect to lending to higher risk borrowers such as SMEs. With Italy (NPLs 13.4%) now following the same dismal trajectory of Spain’s bad debts, the situation is rapidly escalating (at an average of around 2.5% increase per year).” The implied conclusion is that Europe has kicked the can far longer than it should, and as a result its banks have become zombie shell with unprecedented accrued losses, supported explicitly by their various governments, and thus, by the ECB, which is now in the business of preventing sovereign failure (despite its repeated promises otherwise).

And since the topic of quantifying how big the sovereign assistance to assorted banks – both in Europe and the US (which Bloomberg calculated at $83 billion per year) – has become a daily talking point, we are happy to read that Harald Benink and Harry Huizinga have reached the same conclusion as us in their VOX analysis, and further have shown that in Europe the implicit banking sector guarantee by the state is a whopping €650 billion. Read more of this post

Glocalization of hallyu

2013-06-05 17:21

Glocalization of hallyu

By Shim Jae-yun

Psy seems to have largely failed this time, despite his flamboyant remark over the possible repeat of his success in the United States, following his release of the sensation “Gangnam Style.” “Gentlemen” lagged far behind at 46th on the Billboard Chart as of May 31, compared to the fifth rank on May 4. This is a sharp dip from the second place registered by his previous hit “Gangnam Style.”  Read more of this post