The Swiss Stairway to (Monetary) Heaven; As central banks offer cheap credit, Switzerland cashes in along with corporations

WEDNESDAY, SEPTEMBER 4, 2013

The Swiss Stairway to (Monetary) Heaven

By RANDALL W. FORSYTH | MORE ARTICLES BY AUTHOR

As central banks offer cheap credit, Switzerland cashes in along with corporations.

According to the old (pre-PC) joke, heaven is where the police are British, the cooks are French, the mechanics are German, the lovers are Italian and everything is organized by the Swiss. Hell is where the police are German, the cooks are British, the mechanics are French, the lovers are Swiss and everything is organized by the Italians. To update to the 21st century, heaven for managing a nation’s money is Switzerland, which knows a bit about the subject, even more than making chocolates, running the elite ski resorts or world-class pharmaceutical companies. Management of wealth seems embedded in the nation’s genome as nowhere else (although Singapore seems to have absorbed much of the same facility.) So it should come as little surprise the citizens of Switzerland were among the big winners Tuesday when Nokia exploded higher following news that Microsoft (ticker: MSFT) would buy its handset business and patents. The Finnish telecom’s American depositary receipts (NOK) surged over 30% Tuesday on the news. Read more of this post

Nearly 5 mln Britons earn below living wage: survey

Nearly 5 mln Britons earn below living wage: survey

(Xinhua)    20:30, September 04, 2013

Britain now has 4.8 million people, which represents 20 percent of the total employees inBritain, earning below the living wage, a surge from 3.4 million in 2009, according to asurvey released by think tank Resolution Foundation on Wednesday. The Low Pay Britain 2013 report said the economic downturn pushed a further 1.4 millionemployees below the living wage, a basic standard necessary for living, calculated at 7.20pounds (11.25 U.S. dollars) an hour outside London and 8.30 pounds in London in April2012. Read more of this post

McDonald’s Dollar Menu is primed for inflation

McDonald’s May Revamp Dollar Menu After Pressure

By Leslie Patton – Sep 4, 2013

McDonald’s Corp.’s (MCD) Dollar Menu is primed for inflation. The burger chain is testing a new version, dubbed Dollar Menu and More, that includes items selling for as much as $5. The new lineup is being tested in five markets in the U.S., Ofelia Casillas, a spokeswoman for the Oak Brook, Illinois-based company, said in an e-mail. One test includes $1, $2 and $5 fare; another has $1, $1.79 and $4.99 items. “It just sounds like they’ll be raising prices,” Peter Saleh, a New York-based analyst at Telsey Advisory Group, said in an interview. The industry’s “definition of value has moved up from the Dollar Menu to $1.50 or $2.” Read more of this post

Interest rates on mortgages for pricey homes have dropped below those on smaller mortgages, an event that lending executives say has never happened before.

Updated September 4, 2013, 7:43 p.m. ET

‘Jumbo’ Mortgage Rates Fall Below Traditional Ones

A Flip That Hasn’t Happened Before, Say Lending Executives

NICK TIMIRAOS

Interest rates on mortgages for pricey homes have dropped below those on smaller mortgages, an event that lending executives say has never happened before. Borrowing rates for so-called jumbo mortgages, which are too big for government backing, historically have been set higher than rates on what are known as conforming loans, which are backed by Fannie Mae, FNMA +1.60% Freddie MacFMCC +1.77% or government agencies. Read more of this post

Germany’s Energy Poverty: How Electricity Became a Luxury Good

09/04/2013 07:15 PM

Germany’s Energy Poverty: How Electricity Became a Luxury Good

By SPIEGEL Staff

Germany’s agressive and reckless expansion of wind and solar power has come with a hefty pricetag for consumers, and the costs often fall disproportionately on the poor. Government advisors are calling for a completely new start.

If you want to do something big, you have to start small. That’s something German Environment Minister Peter Altmaier knows all too well. The politician, a member of the center-right Christian Democratic Union (CDU), has put together a manual of practical tips on how everyone can make small, everyday contributions to the shift away from nuclear power and toward green energy. The so-called Energiewende — literally “energy turnaround” — is Chancellor Angela Merkel’s project of the century. Read more of this post

Germany is being crushed by its export obsession; The country’s recent success has been based on cutting wages, writes Adam Posen

September 3, 2013 5:29 pm

Germany is being crushed by its export obsession

By Adam Posen

The country’s recent success has been based on cutting wages, writes Adam Posen

If Germany’s economic model is the future of Europe, we should all be quite troubled. But that is where we seem to be going. The apparently successful re-election campaign of Angela Merkel, the Christian Democrat chancellor, promises “Germany’s future in good hands”. More, in other words, of the same. The policy response to the eurozone crisis is likely to remain a programme to induce member states to follow Germany’s path to competitiveness: cutting the cost of labour. Make no mistake; that has been the basis of the nation’s export success in the past dozen years; and exports have been its sole consistent source of growth in that period. But low wages are not the basis on which a rich nation should compete. Read more of this post

EU clamps down on money market funds to tame a fund sector that lubricates financial markets with short-term money but worries regulators by offering banklike promises that are vulnerable to investor panics

September 4, 2013 11:11 am

EU clamps down on money market funds

By Alex Barker in Brussels

Regulatory divisions over reining in “shadow banking” were laid bare by a Brussels clampdown on money market funds that falls short of Franco-German demands for a “brutal” ban yet still riles the industry and goes beyond US proposals. The European Commission proposal unveiled on Wednesday aims to tame a fund sector that lubricates financial markets with short-term money but worries regulators by offering banklike promises that are vulnerable to investor panics. Read more of this post

Don’t blame the Fed for emerging market woes

September 4, 2013 9:24 am

Don’t blame the Fed for emerging market woes

By Patrick Zweifel

Emerging market stocks began to lose steam as far back as 2010

When in doubt, blame a central banker. For investors burnt by the decline in emerging market stocks, it is tempting to point the finger at US Federal Reserve Chairman Ben Bernanke. Had the Fed chief refrained from laying out a timetable for the withdrawal of monetary stimulus, developing world equity markets would surely have avoided a pernicious sell-off. The trouble with this neat theory is that it quickly unravels under scrutiny. The Fed’s role in the latest chapter of the emerging market story, while influential, has been somewhat overstated. The real villains of the piece are to be found elsewhere and they have been shaping events for some time. Read more of this post

Big Mergers Often Don’t Produce the Desired Gains Advocates Predict

September 3, 2013, 6:42 p.m. ET

History Isn’t on Side of Microsoft-Nokia Tie Up

Big Mergers Often Don’t Produce the Desired Gains Advocates Predict

SCOTT THURM

In business, struggling firm plus struggling firm rarely equals success. So say students of corporate strategy, who are skeptical that Microsoft Corp.MSFT -2.15% can rejuvenate its lagging mobile-phone efforts through its planned acquisition of Nokia Corp.’s NOK1V.HE +0.50% handset business. “The evidence suggests that combining two weaklings doesn’t create a strong player,” says Robert Bruner, dean of the Darden School of Business at the University of Virginia, and a longtime student of mergers. Read more of this post

Record radiation readings near Fukushima contaminated water tanks – Now High Enough To ‘Kill An Unprotected Person Within Hours’

Record radiation readings near Fukushima contaminated water tanks — Now High Enough To ‘Kill An Unprotected Person Within Hours’
12:10am EDT

By Aaron Sheldrick and Mari Saito

TOKYO (Reuters) – Radiation readings around tanks holding contaminated water at the crippled Fukushima nuclear plant have spiked by more than a fifth to their highest levels, Japan’s nuclear regulator said, heightening concerns about the clean-up of the worst atomic disaster in almost three decades. Radiation hotspots have spread to three holding areas for hundreds of hastily built tanks storing water contaminated by being flushed over three reactors that melted down at the Fukushima Daiichi plant in March 2011. The rising radiation levels and leaks at the plant have prompted international alarm, and the Japanese government said on Tuesday it would step in with almost $500 million of funding to fix the growing levels of contaminated water at the plant. Read more of this post

China Record Drop in Credit Growth Puts Momentum at Risk

China Record Drop in Credit Growth Puts Momentum at Risk

China’s leaders are extending a clampdown on credit, prompting analysts from JPMorgan Chase & Co. to Societe Generale SA to caution that the economy is vulnerable to weakening after the pickup so far this quarter. New yuan loans were probably little changed in August, after aggregate financing, the broadest measure of credit, posted a fourth straight drop in July, the longest streak in 11 years of data. Analysts’ median estimates point to the fastest industrial-output gain since December and the slowest producer-price decline in six months. Read more of this post

PetroChina’s days of super-charged spending may be over as the Chinese national oil giant seeks to steer clear of the legacy of former chairman Jiang Jiemin, now under an official corruption probe

Updated: Wednesday September 4, 2013 MYT 11:18:49 AM

Under New Management, Scandal-Hit PetroChina Changes Course

HONG KONG: PetroChina Co Ltd’s days of super-charged spending may be over as the Chinese national oil giant seeks to steer clear of the legacy of former chairman Jiang Jiemin, now under an official corruption probe. PetroChina will likely record an annual drop in capital spending for 2013, according to company officials and industry specialists. That would be its first such decline since its Hong Kong and New York stock market listings in 2000. Read more of this post

Abe Adviser Hamada Doubts Japan Economy Showing Real Improvement

Abe Adviser Hamada Doubts Japan Economy Showing Real Improvement

By Keiko Ujikane and Takashi Hirokawa – Sep 4, 2013

Koichi Hamada, an adviser to Prime Minister Shinzo Abe, said it was too early to know whether Japan’s economy has turned the corner under the economic policies known as Abenomics. “Various economic indicators, including investment data, are picking up, but I’m not sure if they show a meaningful improvement,” Hamada said at an event today at Bloomberg’s Tokyo office. Read more of this post

Nepal’s smugglers cash in on India’s love of gold

Updated: Wednesday September 4, 2013 MYT 1:41:07 PM

Nepal’s smugglers cash in on India’s love of gold

KATHMANDU: After a long drive from across the border in China, the white truck arrived in Nepal’s capital at dawn with a seemingly innocuous cargo of Chinese-made clothes. But hidden in a cylinder inside the vehicle’s front bumper was the latest haul of gold smuggled from Tibet – bars weighing some 35kg and worth several million dollars on the black market. Nepal’s police were waiting for the truck and its 24-year-old driver just inside the city, after tracking them for several days along the highway that connects Nepal with China. “We had been informed from our reliable source that a consignment of gold was on its way from Khasa (a border town in Tibet),” Uttam Kumar Karkee, a senior superintendent, who led the operation in July told AFP. Read more of this post

Bollywood Cuts Costs as Rupee Crisis Bites

Bollywood Cuts Costs as Rupee Crisis Bites

By Agence France-Presse on 6:01 pm September 3, 2013.
Mumbai. Bollywood producers have long been fond of filming in exotic foreign locations, but the spiralling Indian currency has seen spending on movie sets abroad drop by one third, according to a study released Monday. The Associated Chamber of Commerce and Industry of India (ASSOCHAM) said that the amount spent on Bollywood movies outside of India in the past four months has declined by 30 to 35 percent compared with the previous four-month period. Read more of this post

Hong Kong’s Needy Children Wait for Homes

Hong Kong’s Needy Children Wait for Homes

By Agence France-Presse on 5:40 pm September 4, 2013.
Hong Kong. Life could have turned out very differently for Mary, who like many other 12-year-old girls in Hong Kong enjoys shopping, music and going out with friends, while she dreams of one day travelling the world as a flight attendant. Mary was taken into foster care when she was three years old, her biological parents addicted to drugs and unable to look after her as they drifted in and out of prison. But she is one of the luckier ones in a city where a growing number of children are waiting for care as the number of couples who can afford to provide it is falling, social workers say, due to high property costs, a lack of space in the city and the fact that both partners often have to work to support a family. Read more of this post

Indonesia Faces Price Rise as Currency Weakens; At malls across Jakarta, a small Caffè Americano at Starbucks is up 9% since early August; taxi has raised minimum fares by more than 16%

Updated September 3, 2013, 7:41 p.m. ET

Indonesia Faces Price Rise as Currency Weakens

Weakening Currency After Fund Exodus Compounds the Problem

BEN OTTO

JAKARTA—Indonesia’s currency weakened to its lowest level in more than four years against the dollar Tuesday, underscoring the reality that consumers in Southeast Asia’s largest economy are facing after a harrowing summer slide: Inflation is taking hold and prices are rising. The rupiah has been in decline since last year, but an exodus of cash in the recent emerging-markets selloff led to a 6% slide in August alone. Meanwhile, prices were already beginning to increase after the government raised the cost of fuel this year, and a weaker rupiah has compounded the trend by making the country’s many imports more expensive. Recently, the government has tightened monetary policy, making concessions on growth in order to contain inflation. Read more of this post