Wall Street digs in for a debt default; Traders are talking about the prospects of “dirty prices” and other default oddities

Wall Street digs in for a debt default

By Stephen Gandel, senior editor October 4, 2013: 9:49 AM ET

Traders are talking about the prospects of “dirty prices” and other default oddities.

FORTUNE — On Thursday, the Treasury Department released a report anticipating what would happen if we have a debt ceiling default. One prediction: a financial crisis that could “echo the events of 2008 or even worse.” It’s hard to see exactly how that could happen. If Treasury bonds were to plummet after a debt default, that could cause other bonds to drop in value as well, creating big losses for the banks — and perhaps putting them in jeopardy. But banks have been anticipating a jump in rates for a while. Many banks have already shown investors what would happen if rates suddenly rose three percentage points, which is a big jump. It’s not pretty, but no bank appeared to be in jeopardy. Read more of this post

Regional Control Eludes Indonesian Firms

Regional Control Eludes Indonesian Firms

By Tito Summa Siahaan on 1:30 pm October 5, 2013.
Semen Indonesia may be one of the the biggest companies in Southeast Asia’s biggest economy, but its rival, SCG of Thailand, has a larger regional presence. (JG Photo/Dhana Kencana)

Telekomunikasi Indonesia, Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia, Indofood Sukses Makmur, Gudang Garam, Bumi Resources and Adaro Energy. These Indonesian firms are part of the top 50 listed companies in Southeast Asia by revenue, according to the Asean Investment Report, published by the Asean Secretariat in July. The largest of them all, state-controlled telecommunication firm Telekomunikasi Indonesia, ranked 13th in the list that was dominated by companies from Thailand, Singapore and Malaysia. More strikingly, in the same report, of the 10 largest banks in the region by assets, none hailed from Indonesia. Household names like Mandiri and BRI are well known within Indonesia, but outside, they lack cache and are minnows compared to regional champions such as DBS Group Holdings, OCBC and United Overseas Bank — all from Singapore. Even with the list based on financial reports of 2011, the data show that Indonesian corporations are still trying to catch up with their regional counterparts. Read more of this post

Policy Missteps Seen As Hurting Indonesia’s Appeal to Investors

Policy Missteps Seen As Hurting Indonesia’s Appeal to Investors

By Francezka Nangoy on 12:30 pm October 5, 2013.
DBS Group Holdings’ decision to bail out of its planned acquisition of Bank Danamon Indonesia this year may be one example of why investors are concerned about nationalism and protectionism issues in Indonesia. DBS’s deal was the most anticipated acquisition in Indonesia’s financial sector, highlighting the interest of foreign investors in Indonesia’s growing economy. Read more of this post

Bicycles and rickshaws in India: Some say Kolkata should back-pedal on its bicycle ban

Bicycles and rickshaws in India: Some say Kolkata should back-pedal on its bicycle ban

Oct 5th 2013 |From the print edition

TRAVEL within any Indian city is usually crowded and slow. But Kolkata (formerly Calcutta), capital of West Bengal, has certain advantages. Its underground rail network, which was the first to open in India in 1984, is being extended. Uniquely in the country, electric trams clatter along its streets. Public transport may look dilapidated but it functions reasonably well: urban ferries, suburban trains, smoky buses and motorised rickshaws shunt around the city’s 14m residents. Read more of this post

What Deng Taught Xi Jinping: Pragmatism Trumps Ideology

What Deng Taught Xi Jinping: Pragmatism Trumps Ideology

By Christopher Johnston on 12:40 pm October 4, 2013.
When Xi Jinping became leader of the Chinese Communist Party he chose the location of his first official visit carefully. He did not pay tribute at Mao’s tomb, or tour the rural heartland of Hu Jintao. Instead, the new General Secretary traveled to Shenzhen, a prosperous special economic zone once overseen by his father. There he laid flowers at a bronze statue of Deng Xiaoping. Read more of this post

‘Property tours’ in China: Free travel, no commitment required

‘Property tours’ in China: Free travel, no commitment required

Staff Reporter

2013-10-05

“Excellent shops available, with down payment of 100,000 yuan (US$16,300) and a guaranteed lease period of 15 years at an annual return rate of between 8%-18%. Free transportation and accommodation will be provided to those who wish to see the shops over the National Day holiday.” The above advertisement has proved attractive for potential buyers keen to take advantage of getting a free trip with no commitment to buy anything required. Read more of this post

China gambles on theme park, whale sharks to lure punters from Macau casinos

China gambles on theme park, whale sharks to lure punters from Macau casinos

By Farah Master

HENGQIN ISLAND, China (Reuters) – It’s being touted as China’s answer to Orlando, a $5 billion resort and theme park complete with a mega rollercoaster and a whale shark tank situated on a sleepy southern island next to the world’s biggest gambling hub Macau. Chimelong, which is set to partially open next month, is the linchpin of China’s ambitious plans to expand Hengqin into a leisure hub similar to the coastal U.S. city globally renowned for its natural attractions and theme-park resorts by Walt Disney Co (DIS.N: Quote, Profile, Research, Stock Buzz) and Universal Studios. Read more of this post

The latest trend in emerging-market exchange-traded funds is to leave out the biggest countries. But the focus should be on companies, not countries

SATURDAY, OCTOBER 5, 2013

New ETFs: Christening a Sinking Ship

By BEN LEVISOHN | MORE ARTICLES BY AUTHOR

The latest trend in emerging-market exchange-traded funds is to leave out the biggest countries. But the focus should be on companies, not countries.

What was once a brilliant marketing concept has collapsed like a ton of bricks. That would be the BRICs, of course, the term for Brazil, Russia, India, and China coined by Goldman Sachs’ Jim O’Neill in 2001. Once a favorite of investors, it’s now so far out of favor that the latest trend seems to be excluding them from new emerging-market exchange-traded funds. But that ship has already sailed. Read more of this post

The asset-quality review: Close scrutiny of Europe’s banks may turn up unexpected shortfalls

The asset-quality review: Close scrutiny of Europe’s banks may turn up unexpected shortfalls

Oct 5th 2013 |From the print edition

THE ink on the agreements that will hand supervision of the euro area’s biggest banks to the European Central Bank (ECB) is barely dry. Yet the ECB is already enmeshed in squabbles with national banking supervisors over the extent of its powers and the rigour with which it will undertake its first big task, a warts-and-all review of the balance-sheets of the banks it will take charge of in a year’s time. Read more of this post

Riding the wave: Corporate dealmakers should heed the lessons of past merger waves

Riding the wave: Corporate dealmakers should heed the lessons of past merger waves

Oct 5th 2013 |From the print edition

WHY mergers and acquisitions (M&A) come in waves is not fully understood. Companies’ fortunes are affected by the economy’s ebb and flow, but this does not seem enough to explain why merger activity crests and breaks so dramatically. Yet crest and break it does. In America there have been at least five merger waves, in which the number of deals swelled, peaked then tumbled. The first, in the 1920s, ended with the onset of the Great Depression. It was less obvious why the following ones—in the 1960s and then in each decade since 1980—were so strong. Now, say some experts, a powerful sixth wave is forming. Read more of this post

Business creation in Germany: A vigorous start-up scene has yet to produce its first big breakthrough; “All of the entrepreneurial spirits left here 200, 300 years ago,” jokes Maxim Nohroudi in his Berlin office

Business creation in Germany: A vigorous start-up scene has yet to produce its first big breakthrough

Oct 5th 2013 | BERLIN |From the print edition

“ALL of the entrepreneurial spirits left here 200, 300 years ago,” jokes Maxim Nohroudi in his Berlin office. That is obviously not quite true. He met his business partner at Düsseldorf airport in 2010, their flight grounded by the eruption of Iceland’s Eyjafjallajökull volcano. If only there were an app to compare their options to get back to Berlin by schedule, price and time required, they thought. Now there is: Waymate, which quickly compares both inter-city and intra-city means of travel. To make money, Waymate plans to sell adverts aimed at people based on their location. Eventually the app will allow data to travel two ways, so that users can tell each other when a bus is stuck in traffic. Read more of this post