Japanese Men’s Allowance at 1982 Low as They Await Abenomics

Japanese Men’s Allowance at 1982 Low as They Await Abenomics

The average Japanese husband’s monthly allowance slumped to the lowest level since 1982 at the start of the financial year as workers await the dividends promised by Abenomics.

Salarymen’s spending money, typically set by wives managing family budgets, was 38,457 yen ($386), down 3 percent from last year and less than half the 1990 peak, according to Shinsei Bank Ltd., a Tokyo-based lender whose data go back to 1979. The survey of 2,000 people was done April 20th and 22nd via the Internet, the report published June 28 showed. Read more of this post

Emerging Markets Hit by Converging Forces

Updated July 1, 2013, 9:15 p.m. ET

Emerging Markets Hit by Converging Forces

ALEX FRANGOS in Hong Kong and PATRICK MCGROARTY in Johannesburg

Countries from Turkey to Brazil to China are getting hit by a brutal combination of events, as economies slow, investors pull out cash, commodity prices tumble and protesters take to the streets—all fresh reminders that these markets can be difficult places to try to make money.

An outflow of funds from so-called emerging markets has picked up pace over the past month, triggered by expectations among some investors that the days of easy money globally are coming to an end as the U.S. economy recovers. Read more of this post

Hong Kong Realtors May Lose Jobs on Curbs, Midland Says

Hong Kong Realtors May Lose Jobs on Curbs, Midland Says

About a third of Hong Kong’s property agents may lose their jobs over the next year if the government persists with its real estate curbs, according to realtor Midland Holdings Ltd. (1200)

“For the industry, we’re probably looking at the lowest point for over two decades,” Angela Wong, deputy chairman and the daughter of Midland chairman and founder Freddie Wong, said. “The worst thing is that it’s now a stagnant market so we’re not sure whether we should expand or contract. This is tough.” Read more of this post

What are the accounting standards in China? How prevalent is accounting fraud?

July 1, 2013

The Chinese Financial System: An Introduction and Overview

By: Douglas J. Elliott and Kai Yan

The fear of slower Chinese growth has significant ramification for the global economy. The importance of China, and the central role of its financial system in fuelling that nation’s growth, led Douglas Elliot and Kai Yan to write a comprehensive overview of the Chinese financial system in the backdrop of the 5^th meeting of the U.S.-China Strategic & Economic Dialogue.

Key questions this report will address include:

What is the overall structure of China’s financial system?

Who regulates the financial system?

How does political influence on personnel appointments affect the large state-owned financial institutions?

What are the accounting standards in China? How prevalent is accounting fraud?

Inside China’s Bank-Rate Missteps

Updated July 1, 2013, 7:34 p.m. ET

Inside China’s Bank-Rate Missteps

LINGLING WEI and BOB DAVIS

BEIJING—A rare peek into the actions of China’s leaders in a month when a Chinese cash crunch spooked global investors shows a leadership falling short in its struggle to redirect China’s economy and also faltering in its efforts to communicate its intentions to markets.

The People’s Bank of China instigated the cash shortages that catapulted Chinese interest rates to nosebleed highs during the past two weeks because the central bank felt it had no alternative amid what it saw as out-of-control credit growth, according to an internal document reviewed by The Wall Street Journal. Read more of this post

Shadow Banking Threatens China’s Economy—but What Is It, Exactly?

Shadow Banking Threatens China’s Economy—but What Is It, Exactly?

By Ryan Perkins

Last week, the Shanghai interbank offered rate (Shibor), China’s once-anonymous version of London’s LIBOR, made news around the world when it suddenly spiked at all time high. Expected to lower this rate by injecting cash into struggling Chinese banks, the People’s Bank of China (the country’s equivalent of the Fed) instead did nothing, leading to speculation that China’s leaders were finally prepared to tackle the economy’s overheating problem. In the process, the media appears to have finally taken notice of the potential dangers that lurk within the byzantine industry that is Chinese finance. Reviewing the headlines, a series of arcane, sinister terms leap out: Off-balance sheet lending. Inter-corporate finance. And, most prominently, shadow banking. Read more of this post

How Fed Avoids Deterring Bondholders With 7% Jobless Is Mystery

How Fed Avoids Deterring Bondholders With 7% Jobless Is Mystery

Unemployment will fall to about 7 percent in the fourth quarter, according to economists at five of the world’s largest banks, creating more confusion among investors about the Federal Reserve’s bond-buying plans.

Fed Chairman Ben S. Bernanke said last month that the central bank could stop purchasing assets around the middle of next year when joblessness “would likely be in the vicinity of 7 percent.” Bank of Tokyo-Mitsubishi UFJ, Barclays Plc, Citigroup Inc., Deutsche Bank AG and UBS AG all predict the rate will be either at or just above that level in the fourth quarter, six months sooner than Bernanke projected. Read more of this post

Italy Pushes $1,280 Silk Sweaters as Recession Cure

Italy Pushes $1,280 Silk Sweaters as Recession Cure

In a small workroom whose window overlooks the Umbrian countryside, women hold gray silk-linen cardigan sweaters up to light tables one-by-one, checking every knot and seam. When a worker finds a hole, she puts the sweater in a bag destined for repair or recycling.

This is how Brunello Cucinelli’s fashion company tapped demand for quality Italian goods to lift sales of its $1,280 sweaters and other products by 15 percent last year. It’s a bright spot in a country where unemployment yesterday reached a record, industrial production is down 25 percent from 2007 and the longest slump in more than 20 years isn’t abating. Read more of this post

China’s Slowdown Could Slam Hong Kong

China’s Slowdown Could Slam Hong Kong

In the run-up to Hong Kong’s return to China in 1997, the world wondered what officials in Beijing would do with the place. Would Hong Kong’s dynamism and openness catalyze change in China, or would the Communist Party try to remake the freewheeling city-state in its image?

Sixteen years on, we know it’s more the latter than the former. Beijing has shackled Hong Kong with one bad, handpicked leader after another. China’s commissars and their local lackeys continue to push anti-sedition laws, patriotic education and Mandarin on 7 million people who seek democracy and prefer Cantonese. Read more of this post

ETF Investors Are Caught by Surprise as Prices Diverge

ETF Investors Are Caught by Surprise as Prices Diverge

David Blain, a financial adviser in New Bern, North Carolina, likes exchange-traded funds so much he’s put all his clients’ money in them. He also thinks individual investors trading ETFs on their own may be in for surprises when markets come under stress.

Share prices for dozens of ETFs last month strayed to their biggest discounts in a year against the published value of their holdings, or net-asset values, as investors fled stocks and bonds around the world. The price of the $362 million iShares MSCI Philippines Investable Market Index Fund swung from a 4.7 percent premium to a 6.1 percent discount and back to a 2 percent premium in the space of nine trading days through June 25. Read more of this post

Nowhere to Hide in Worst Bond Losses Since 2008

Nowhere to Hide in Worst Bond Losses Since 2008: Credit Markets

Investors are finding no shelter from the worst corporate-bond losses in almost five years as debt plunges for the most creditworthy to the riskiest borrowers in every industry worldwide.

Company debentures erased 2.2 percent the last three months, the worst quarterly decline since a 5.2 percent plunge in the period ended September 2008, when the collapse of Lehman Brothers Holdings Inc. ignited the worst credit crisis since the Great Depression, Bank of America Merrill Lynch index data show. All 16 industries in the index lost during the period, from a 0.7 percent decline for the debt of automakers to a 3.5 percent drop in energy-company bonds. Read more of this post

Chinese Malls Waive Rents as Vacancies Loom

Chinese Malls Waive Rents as Vacancies Loom: Real Estate

Chinese landlords are forgoing rent and paying to outfit stores for mass-market fashion brands including Zara and H&M, a bid to blunt the impact of a boom in shopping-mall construction that threatens to push up vacancies.

Preferential leasing terms were reserved until recently for luxury brands such as Louis Vuitton and Gucci, which are coveted because they bring shoppers into malls. Now moderately priced labels are being enticed with offers as landlords work harder to fill shops, according to Cushman & Wakefield Inc. and RET Property Consultancy Ltd. Read more of this post

Levying the land: Governments should make more use of property taxes

Levying the land: Governments should make more use of property taxes

Jun 29th 2013 |From the print edition

TAXES on property go back a long way. Ancient civilisations from Greece to China had levies on land. In 11th-century England the Domesday Book, a record of who owned what land, documented William the Conqueror’s tax base. Britain had a window tax in the late 17th century, well before it introduced an income tax. In America local governments have raised money from property taxes since the colonial era; the federal income tax has been in place only since 1913. Read more of this post

Mars Promotes Bite-Size Snickers, Following Hershey’s Cue

June 30, 2013

Mars Promotes Bite-Size Snickers, Following Hershey’s Cue

By JANE L. LEVERE

COPYING the strategy of the Hershey Company, its archrival Mars has introduced a bite-size Snickers, which it will begin promoting on Monday through advertising and social media. Mars began distributing the new product, Snickers Bites, in May. It is a bite-size, unwrapped cube of Snickers, sold in a 2.83 ounce bag and an eight-ounce resealable pouch, which is meant to be shared. Suggested retail prices are $1.49 and $2.99. Snickers Bites is the first new Snickers product introduced by Mars since it began selling Snickers Peanut Butter Squares in 2011; Mars has been selling the original Snickers candy bar, which it created, since 1930. Mars introduced Milky Way Bites in May, in packaging similar to that of Snickers Bites. Read more of this post

PBOC’s inaction exposes lack of money channeled to real economy; China set a world record in May after its M2 money supply surged to 104 trillion Chinese yuan (US$16.84 trillion)

PBOC’s inaction exposes lack of money channeled to real economy

Staff Reporter

2013-07-01

Though China’s banks might feel the squeeze from the central bank’s frozen accounts these days, the country is far from being out of money supply. China reported the world’s highest broad M2 money supply in May, the party-run Beijing Youth Daily reported.

China set a world record in May after its M2 money supply surged to 104 trillion Chinese yuan (US$16.84 trillion), but local banks have been struggling with a liquidity strain since late May, pushing the interbank borrowing rate higher, the newspaper said. Read more of this post

China’s President Xi Jinping said officials shouldn’t be judged solely on their record in boosting GDP, the latest signal that policy makers are prepared to tolerate slower economic expansion

Xi Says GDP Not Officials’ Sole Focus in Signal on Growth

China’s President Xi Jinping said officials shouldn’t be judged solely on their record in boosting gross domestic product, the latest signal that policy makers are prepared to tolerate slower economic expansion.

The Communist Party should instead place more importance on achievements in improving people’s livelihood, social development and environmental quality when evaluating the performance of officials, the Xinhua News Agency reported June 29, citing Xi at a meeting on personnel management on the eve of the 92nd anniversary of the party’s founding. Read more of this post

Yingluck Axes Thai Commerce Minister After Moody’s Rice Critique

Yingluck Axes Thai Commerce Minister After Moody’s Rice Critique

Thai Prime Minister Yingluck Shinawatra dropped Commerce Minister Boonsong Teriyapirom from the Cabinet following criticism that a policy to buy rice at above-market rates jeopardized the country’s fiscal position.

The move comes about a week after Yingluck cut guaranteed rice-purchase prices by 20 percent to stem losses the government estimates at about 137 billion baht ($4.4 billion) for last year. Moody’s Investors Service said on June 3 the subsidies hamper Thailand’s goal of achieving a balanced budget by 2017 and are negative for the nation’s sovereign ratings. Read more of this post

Europe Stocks Addicted to Emerging Markets Stretching Valuations as European companies are relying on emerging markets for a third of all revenue for the first time ever

Europe Stocks Addicted to Emerging Markets Stretching Valuations

For the first time ever, European companies are relying on emerging markets for a third of all revenue, stretching equity valuations as Chinese growth slows and protests turn violent from Turkey to Brazil.

Led by Swatch (UHR) Group AG and SABMiller Plc (SAB), Europe will get 33 percent of sales from developing nations in 2013, almost three times as much as in 1997, according to data compiled by Morgan Stanley and Bloomberg. While U.S. enterprises make 70 percent of their revenue at home, businesses in Europe, mired in the longest recession on record, are forecast to obtain less than 50 percent from their own economies this year. Read more of this post

Pawnbrokers Thriving as Poorest Aussies Bear Brunt of Slowdown

Pawnbrokers Thriving as Poorest Aussies Bear Brunt of Slowdown

On a sidewalk in Sydney’s Bankstown neighborhood, where unemployment is more than double Australia’s average, Dave Cox pulls the starter cord of an edge trimmer to prove it works as he tries to sell it to pawnbroker Cash Converters International Ltd. (CCV)

“The economy is pretty crap right now,” 38-year-old truck driver Cox, who’s between jobs, said after he offloaded the snipper for A$30 ($28). In the past month, he sold an iPhone and got a loan at Cash Converters, whose sales last year grew faster than any other Australian retailer that didn’t make a major acquisition. “It just feels bad out there.” Read more of this post

Who Goes to Cash Reveals Extent Bonds Will Turn Into Bear Market

Who Goes to Cash Reveals Extent Bonds Will Turn Into Bear Market

Investors who poured $1.26 trillion into bond funds in the past six years pulled out record amounts of cash last month, leaving the world’s biggest fixed-income managers struggling to stem the flow.

The funds saw $61.7 billion of withdrawals as money market mutual fund assets rose $8.17 billion in the week ended June 25, according to TrimTabs Investment Research and the Money Fund Report. Bank of America Merrill Lynch’s Global Broad Market Index dropped 2.9 percent in the past two months, the most since the inception of the daily gauge in 1996, as Federal Reserve Chairman Ben S. Bernanke laid out possibilities for reducing the $85 billion in monthly bond purchases supporting the economy. Read more of this post

Mortgage Bond Prices Collapse By Most Since 1994 ‘Bond Market Massacre’

Mortgage Bond Prices Collapse By Most Since 1994 ‘Bond Market Massacre’

Tyler Durden on 06/30/2013 10:39 -0400

“What just occurred [in the mortgage-backed-securities (MBS) market] is indicative of just how important QE is,” as government backed US mortgage bonds suffer their largest quarterly decline in almost two decades. As Bloomberg reports, the $5 trillion market lost 2% in Q2, the most since the ‘bond market massacre’ in 1994 (when the Fed unexpectedly raised rates) as wholesale mortgage rates spiked by the most on record in the last two months. The reason these bonds have been hardest hit – simple – fear that the Fed’s buying program is moving closer to an end. “The Fed, at times during this period, was the only outlet in terms of demand for securities,” explains one head-trader, as the Fed’s current buying provided demand as other investors retreated and has grown as a percentage of forward sales by originators tied to new issuance, which is set to fall as higher rates reduce refinancing. With Fed heads talking back what Bernanke hinted at, there was a modest recovery in the last 2 days in MBS but the potential vicious cycle remains a fear especially now that “what was once deemed QE Infinity is no longer viewed that way.” Read more of this post

Bear market in gold pummels Einhorn’s Greenlight fund

Bear market in gold pummels Einhorn’s Greenlight fund

Sun, Jun 30 2013

By Jennifer Ablan

NEW YORK (Reuters) – Investors in David Einhorn’s Greenlight Capital Management’s offshore gold fund were down 11.8 percent in June, bringing their year-to-date losses in the fund to 20 percent, two sources close to the matter said on Sunday.

Einhorn, one of the most widely followed hedge fund managers and known for warning about Lehman Brothers’ precarious finances before it collapsed, has also seen his flagship $8 billion Greenlight Capital fund under recent pressure though it is still up for the year. Read more of this post