Property speculators in China switch from housing to cemeteries

Property speculators in China switch from housing to cemeteries

Liang Shih-huang and Staff Reporter

2013-06-02

Speculative practices surrounding property prices in China have spread from large scale housing projects to the grave, as investors increasingly eye the lucrative cemetery market, driving up market prices by nearly a hundred-fold over the past ten years.

Many insurance companies are also eying the profitable cemetery market to boost revenue, with analysts estimating that if the trend continues, in another six decades a burial plot in China will cost 100 times more than real-estate. Read more of this post

Courting Thrifty Shoppers With Value and Quality: Companies like Procter & Gamble are promoting their value by introduced less expensive alternatives to its premium products to court cost-conscious shoppers

June 2, 2013

Courting Thrifty Shoppers With Value and Quality

By STUART ELLIOTT

Ads for Iams So Good, which will cost 15 percent less than the Iams line, will emphasize “wholesome ingredients,” not  cost; New ads for Vonage carry the theme “Crazy generous” and feature a chief generosity officer.

ALMOST five years after the financial crisis, the economy has improved significantly, but remains uncertain enough that millions of worried Americans continue to watch how they spend. That has left marketers and agencies trying to figure out the right tone and tack to take in selling products as varied as cars and cans of soup.

Many on Madison Avenue are deciding to focus on value, as in value for money, celebrating thriftiness as they did during the dark days of 2008 and 2009 but also, in an effort to keep ads from growing stale, suggesting that product attributes like quality matter, too, in a “you get what you pay for” fashion. Read more of this post

In China, Concern of a Chill on Foreign Investments

JUNE 2, 2013, 2:15 PM

In China, Concern of a Chill on Foreign Investments

By NEIL GOUGH

China was booming, and Nina Wang, a Hong Kong billionaire, wanted a piece of the action.

It was 1995, and a group of investors was setting up the first nationwide joint-stock bank of the Communist era to be primarily owned by nongovernment companies.

But Ms. Wang, considered to be the richest woman in Asia and a flamboyant figure who wore her hair in pigtails well into her 60s, faced an obstacle: Foreigners were barred from holding stakes in Chinese financial institutions. Read more of this post

Goldman Sachs’s recent exit from South Korea illustrates the problems global asset managers face in trying to build a viable presence in the country

June 2, 2013 5:41 am

South Korea proves tough market to crack

By Song Jung-a in Seoul

Goldman Sachs’s recent exit from South Korea illustrates the problems global asset managers face in trying to build a viable presence in the country. The dearth of domestic investment platforms and limited sales opportunities are proving a real stumbling block, experts say.

Eight of the 22 foreign asset managers active in South Korea suffered losses in the final quarter of last year. There is fierce competition over fees, with 84 fund management companies jostling for a bigger share of Asia’s third-largest funds market – a market dominated by local heavyweights that include Samsung Asset Management and Mirae Asset. But while foreign managers have suffered, the large domestic players, which also include KB Asset Management and Korea Investment Management, made millions of dollars in profits during the final three months of last year, despite challenging market conditions. Read more of this post

China blocks MasterCard processing renminbi transactions

June 2, 2013 6:02 pm

China blocks MasterCard processing renminbi transactions

By Simon Rabinovitch and Jamil Anderlini in Beijing

China has blocked MasterCard from processing credit card transactions in renminbi, raising concerns about Beijing’s willingness to fully open up the sector after the World Trade Organisation found that it unfairly restricted foreign card companies.

According to a document obtained by the Financial Times, the Chinese central bank ordered last month that EPayLinks, an online payment platform, stop issuing renminbi-settled credit cards in partnership with MasterCard. Read more of this post

Heirs to four of Thailand’s most prominent family-run businesses share a common goal: ensuring their businesses secure a foothold in Asean over the next 10 years

Business scions share insights

Sucheera Pinijparakarn
The Nation June 3, 2013 1:00 am

From right: Suphachai Chearavanont, CEO of True Corporation, Thapana Sirivadhanabhakdi, CEO of Thai Beverage, Tos Chirathivat, executive director of the Central Group of Companies and CEO of Central Retail Corporation (CRC), and Puttipong Prasarttong-Osot

Sons of four big families give an insight into their thinking, plans

Heirs to four of the Kingdom’s most prominent family-run businesses share a common goal: ensuring their businesses secure a foothold in Asean over the next 10 years.

Thai Beverage is building a clear footprint for its non-alcoholic-beverage business, after acquiring Singapore-based Fraser and Neave (F&N). ThaiBev wants to be a regional powerhouse. In preparation for this, it is restructuring its organisation, working processes and human resources to ensure it is equipped for the step into Asean, according to Thapana Sirivadhanabhakdi, ThaiBev chief executive officer and president. Read more of this post

India’s Apollo Tyres: Our technology people travelled the length and breadth of the country in the cabin of a truck to understand the real life of a driver

Onkar Kanwar: I was a novice in the business and that was to be my biggest advantage

by Onkar Kanwar | Jun 3, 2013

Onkar Singh Kanwar says his decision to take Charge of Apollo Tyres was instrumental in pulling the company back from the brink of bankruptcy

Do I quit, even before I have begun the job?’ and ‘do I fight the person I respect the most just because I believe in something different?’ As I look back, in my 50 years-plus professional life, I think these two questions have defined everything I know about friendship, values and business, and have touched every aspect of my life—personal and professional. These are moments that either made me what I am or showed me who I am. In 1979, I had taken upon myself to revive the ailing tyre business of my father Raunaq Singh.
The accounts showed that in just two years, Apollo Tyres had wiped out its net worth four times over and on a capital base of Rs 80 million; the losses were Rs 300 million; tyres were being returned faster than they were being produced, as the technology was coming from an international company and had not been localised; shop floor employees had stopped work. Not ideal conditions to step into business for anyone!  Read more of this post

South Korea fosters start-ups to boost economic shift

South Korea fosters start-ups to boost economic shift

AP

JUN 1, 2013

SEOUL – Kwon Sun-beom’s future was mapped out. Talented in math and science, he attended a specialized high school and majored in electronic engineering at a prestigious university. Lifetime employment at one of South Korea’s towering conglomerates beckoned.

Instead, while his peers were seeking jobs at Samsung and LG, he scaled back his studies and started a company with friends. Together they invented a garbage bin that compresses rubbish using solar power and wirelessly communicates to be collected when full. Read more of this post

North Korean economy surrenders to foreign currency invasion

North Korean economy surrenders to foreign currency invasion

Sun, Jun 2 2013

By John Ruwitch and Ju-min Park

CHANGBAI, China/SEOUL (Reuters) – Chinese currency and U.S. dollars are being used more widely than ever in North Korea instead of the country’s own money, a stark illustration of the extent to which the leadership under Kim Jong-un has lost control over the economy.

The use of dollars and Chinese yuan, or renminbi, has accelerated since a disastrous revaluation of the North Korean won in 2009 wiped out the savings of millions of people, said experts on the country, defectors and Chinese border traders.

On the black market the won has shed more than 99 percent of its value against the dollar since the revaluation, according to exchange rates tracked by Daily NK, a Seoul-based news and information website about North Korea. Read more of this post

As Philippines booms, overseas workers begin to return home

As Philippines booms, overseas workers begin to return home

MANILA — Last year, Mr Mateo Ragonjan took a leap of faith. The executive sous-chef of a seven-star luxury hotel in Abu Dhabi packed his bags to take up a similar job back home in the Philippines.

BY –6 HOURS 39 MIN AGO

MANILA — Last year, Mr Mateo Ragonjan took a leap of faith. The executive sous-chef of a seven-star luxury hotel in Abu Dhabi packed his bags to take up a similar job back home in the Philippines.

He is one of a small group of like-minded Filipinos returning home, a sign of confidence in an economy that for decades has seen millions leave in search of better prospects.

Mr Ragonjan, 41, now helps run a 300-man kitchen that caters to guests and high-rollers of Manila’s newest and most luxurious casino resort. He is one of 400 overseas Filipinos who came home to work at the US $1.2 billion (S$1.5 billion) Solaire Resort & Casino in Manila Bay.

“The Philippines is booming at the moment, so I thought it was the right time to go back,” Mr Ragonjan said. Read more of this post

Deficit Deal Even Less Likely, to delay until after the 2014 midterm elections

Updated June 2, 2013, 8:25 p.m. ET

Deficit Deal Even Less Likely

Improving U.S. Fiscal Health Eases Pressure for a ‘Grand Bargain’ Amid Gridlock

By PETER NICHOLAS, JANET HOOK and DAMIAN PALETTA

Shrinking near-term federal deficits, slowing health-care cost increases and partisan gridlock have all but wiped out the likelihood for a deal this year to reduce long-term U.S. deficits, perhaps delaying a compromise until after the 2014 midterm elections, White House officials and congressional lawmakers said.

The prospects for such a “grand bargain” this year have been unclear for some time, but parties to the discussions said in recent days the chances appear to have further diminished due to signs the government’s fiscal health is improving. That has removed the pressure needed to force compromises. Read more of this post

Mortgage Investors Get Blindsided; Bonds Backed by Subprime Loans Had $1 Billion of Previously Undisclosed Losses

June 2, 2013, 8:26 p.m. ET

Mortgage Investors Get Blindsided

Bonds Backed by Subprime Loans Had $1 Billion of Previously Undisclosed Losses

By AL YOON

Some mortgage investors got an unexpected refresher course on the risks of subprime debt when they received notice of $1 billion of previously undisclosed losses.

The unhappy surprise came with May’s monthly statements on dozens of bonds backed by 75,743 home loans made before the financial crisis to borrowers with less-than-pristine credit. Many of the losses on the $15.2 billion of loans outstanding likely weren’t reported to bondholders for a year or longer.

Behind the sudden losses is a standoff between Wells Fargo WFC -1.70% & Co., the nation’s largest mortgage lender, and Ocwen Financial Corp., OCN -1.31% the largest servicer of subprime loans, over the treatment of loans subject to a type of modification in which the borrower’s repayment schedule has been extended to reduce the monthly payment. Read more of this post

Bonds’ Point of No Return About a Standard Deviation Away

Bonds’ Point of No Return About a Standard Deviation Away

The biggest monthly loss in fixed-income securities since 2004 has still left global yields short of the tipping point that would signal a bear market in bonds.

Yields on U.S. Treasuries (USGG10YR), German bunds and Japanese government bonds are about one standard deviation above their historical norm. Treasury 10-year rates have reached two standard deviations above the average twice since 2009, and each time the notes rallied. While sovereign yields at 1.39 percent are above the record low of 1.14 percent set May 2, they are about half the 3.64 percent average of the past 20 years, based on Bank of America Merrill Lynch’s Global Government Index.

Bonds lost 1.5 percent in May after Federal Reserve policy makers sent mixed signals about whether they would slow the pace of their $85 billion a month in debt purchases this year. Tame inflation and lower global growth estimates from the International Monetary Fund indicate the world’s central banks won’t pull back anytime soon, averting a further rout. Read more of this post

BIS warns of dangers of cheap money driving up stock prices

June 2, 2013 8:24 pm

BIS warns of dangers of cheap money driving up stock prices

By Claire Jones, Economics Reporter

Markets are “under the spell” of the world’s central bankers, with cheap money driving stock prices to record highs despite a lack of good economic news, the Bank for International Settlements has said.

The BIS, the so-called central bankers’ bank, on Sunday became the latest high-profile financial institution to warn that low rates and a plentiful supply of cash from quantitative easing had prompted investors to drive asset prices to record highs in spite of signs that a meaningful recovery continues to elude the global economy.

In the latest edition of its influential quarterly review, the BIS said further easing by some of the world’s big central banks in recent months had “helped market participants tune out signs of a global growth slowdown”. Read more of this post

John Kay: Financial system ‘waiting for next crisis’

June 2, 2013 10:33 pm

Financial system ‘waiting for next crisis’

By David Oakley, Investment Correspondent

John Kay, the economist and author, will warn this week that the world is heading for another financial crisis because the economic system is geared around trading profits that create market bubbles that inevitably burst.

Almost a year after the publication of his groundbreaking review of the UK’s equity markets, the London School of Economics professor will say in a keynote speech this week that the world is “waiting for the next crisis”.

Prof Kay, who is a columnist for the Financial Times, warns: “I think the eurozone does look likely to be it [the next crisis].” Read more of this post

Low interest rates spell doom for some pension plans in U.S.

Low interest rates spell doom for some pension plans in U.S.

BY MICHAEL A. FLETCHER

THE WASHINGTON POST

JUN 3, 2013

INDIANAPOLIS – It was no small matter for the ILM Group’s executives when they froze the pension plan that has provided retirement security for the firm’s employees since 1947.

The financial pressure of maintaining the plan had been mounting on the small insurer for years. But until March, ILM had not given in, even as tens of thousands of other employers did. It held on when the Sept. 11, 2001, terrorist attacks rocked the economy, flat-lining the stocks that fund the pension payments. It also kept the plan intact when the Great Recession shrank its holdings by 29 percent. Read more of this post

The New R&D: Repurchases and Dividends

The New R&D: Repurchases and Dividends

Joshua M Brown

May 30th, 2013

“If you look at total R&D growth, including the corporate and government side, the U.S. is now at the low end. We’re seeing other countries, from Germany to Korea to China, make much bigger bets. And if that persists for long enough, it’s going to have an impact.”
– Rob Atkinson, president of the Information Technology and Innovation Foundation (ITIF)

Shut up, Rob.

What do you mean America doesn’t do R&D anymore? We do it all day long – so long as the R&D we’re talking about means Repurchases & Dividends.

Buybacks, payouts, more buybacks, more payouts – it’s like Candyland for the 20% of America that owns 90% of the stock market and everyone else can go wait in the Home Depot parking lot where we’ll pick them up to dig us a swimming pool later on. Read more of this post

Treasuries Decline Will Be Volatile on Stimulus Exit, BIS Says; “With the outstanding volume of government bonds greater than ever, interest-rate risk” is at a record high in most advanced economies

Treasuries Decline Will Be Volatile on Stimulus Exit, BIS Says

Treasuries are set to extend losses and price swings may intensify as growth allows central banks to withdraw stimulus, the Bank for International Settlements said.

“Yields will go up as the economy recovers,” Stephen Cecchetti, economic adviser and head of the monetary and economic department at the BIS in Basel, Switzerland, told reporters on a conference call on May 31. “The ride to normality will almost surely be bumpy, with yields going through calm and volatile periods.”

Benchmark 10-year note yields rose the most since December 2010 last month amid speculation that the Federal Reserve will begin tapering its $85 billion a month bond-buying program. Chairman Ben S. Bernanke said on May 22 that the central bank could cut the pace of its purchases if policy makers see indications of sustained improvement in growth. Read more of this post

ZEW’s Fuest Sees Japan-Style Stagnation as ECB Tools Exhausted

ZEW’s Fuest Sees Japan-Style Stagnation as ECB Tools Exhausted

Europe faces Japan-style stagnation as governments delay reforms and the European Central Bank comes close to exhausting its options, said Clemens Fuest, president of the ZEW Center for European Economic Research.

“I would expect the politicians to really take the problems in hand and face the need to restructure the banking system,” Fuest said in an interview in Mannheim, Germany. “But I see the risk that what’s concentrated on now is shunting the problems down the road and going the Japanese way, into stagnation. The ECB has done its part to solve the crisis. The central bank has used up most of its ammunition.” Read more of this post

Economic Crisis Renewed Quest for Answers

June 2, 2013, 3:46 p.m. ET

In Economics, Hunt for Answers

By BRENDA CRONIN

CAMBRIDGE, Mass.—On Tuesday mornings, graduate students and professors fill a classroom here to watch doctoral candidates run the economic gantlet. For an hour and a half, the presenters explain their works in progress to the crowd, who pepper them with questions, critiques and suggestions. The sessions weren’t always so lively, said Harvard professor Benjamin Friedman, who has been participating in the university’s Research in Macroeconomics seminars for years. The packed classrooms these days—a contrast with the thinly attended presentations a decade ago—illustrate how the 2008 financial crisis and the accompanying recession have revived scholarship in macroeconomics. “Academics are looking…for areas that have lots of unsolved questions,” said James Poterba, a professor at the Massachusetts Institute of Technology and president of the National Bureau of Economic Research. There has been “a substantial uptick in interest and excitement around macroeconomic research.”

Read more of this post

Sweden Housing Crash Coming Up; Average Swede to Repay Mortgage in 140 Years; Swedish Central Bank Ponders New Rules

Sweden Housing Crash Coming Up; Average Swede to Repay Mortgage in 140 Years; Swedish Central Bank Ponders New Rules

Posted: 01 Jun 2013 10:01 PM PDT

Average Swede to Repay Mortgage in 140 Years

Swedish repay their mortgages so slowly that it will take 140 years on average, according to the IMF.

The International Monetary Fund lamented Friday that Swedish households pay their mortgages so slowly that they are planning to do an average of 140 years.

“Financial stability is […] reinforced by a steady reduction in repayment schedules – that exceed an average of 140 years,” the IMF said in a statement after a mission in Sweden. Read more of this post