Irrational Exuberance Overtakes Asia

Irrational Exuberance Overtakes Asia

What does Alan Greenspan have to do with rallies in Indian stocks, hopes for a resurgent Japan and the blind faith that China can grow at a rate of 7 percent forever? More than you’d think.

Call it the Greenspanization of Asia. The former chairman’s tenure at the Federal Reserve, from 1987 to 2006, established a new political compact of sorts, whereby governments abdicated responsibilities to unelected central bankers. The “Greenspan put” that flooded markets with cash whenever things got dicey has become the default position in Washington. In Asia today we’re seeing an even more dangerous escalation of the practice – – papering over cracks in economies that desperately need tougher, structural reforms. Read more of this post

Explosive bank loan rise may spark tightening of credit in China

Explosive bank loan rise may spark tightening of credit in China

Thursday, Dec 12, 2013

Gao Changxin China Daily/Asia News Network

The Chinese central bank said Wednesday that new yuan loans grew more than expected in November, as its leaders met in Beijing to discuss policies, including growth targets, for next year. Chinese banks extended 624.6 billion yuan ($103 billion) of new yuan loans in November, almost 24 per cent higher than the 506.1 billion lent in October. Read more of this post

Guangdong to Freeze Trading Unless Emitters Take Part in Auction

Guangdong to Freeze Trading Unless Emitters Take Part in Auction

China’s southern province of Guangdong won’t allow companies to trade emission permits they receive free of charge from the government unless they participate in auctions starting next week, an official said. The 242 participating companies won’t be able to buy or sell permits accounting for 97 percent of their emission quotas until they purchase the balance at auctions, said the official with the Guangzhou-based China Emissions Exchange. He asked not to be named because he isn’t authorized to speak to the media. Read more of this post

China Pledges to Tackle Local Government Debt Amid Reform

China Pledges to Tackle Local Government Debt Amid Reform

China’s leaders pledged to tackle local government debt next year while creating a stable economic and social environment to promote reforms. The government will maintain continuity and stability in its macro-economic policies in 2014 and stick to a prudent monetary policy and proactive fiscal policy, China Central Television reported, citing a statement from the annual Central Economic Work Conference that ended yesterday. Read more of this post

Aussie Float Architects Urge Devaluing 30 Years After Peg

Aussie Float Architects Urge Devaluing 30 Years After Peg

Architects of the float of Australia’s dollar, trading at a similar level to when exchange controls were lifted 30 years ago, say the currency must devalue and economic reform be renewed to avert a recession. Peter Jonson, who advised the central bank chief of the time, and Ross Garnaut, who counseled then-Prime Minister Bob Hawke, say the resource investment boom has rendered Australia uncompetitive. General Motors Co. this week cited an elevated exchange rate in deciding to stop making iconic Holden cars in the nation, as did Qantas Airways Ltd. on Dec. 5, when it flagged a record first-half loss and 1,000 job cuts — announcements that echoed the economy’s early 1980s malaise. Read more of this post

Shale Boom Shakes U.K.’s $33 Billion Chemicals Industry: Energy

Shale Boom Shakes U.K.’s $33 Billion Chemicals Industry: Energy

The U.S. shale gas boom is reverberating across Britain’s chemical industry, the nation’s second-largest export earner.

The 20-billion pound ($33 billion) chemicals business is losing sales to lower-cost competitors such as in the U.S., where new supplies from domestic shale drilling have reduced prices for natural gas, the fuel used in making chemicals such as plastics. By 2020 the chemicals industry in the U.S. will be 21 percent larger than in Europe, from near parity now, according to the American Chemistry Council. Read more of this post

Ikea Wolf Toy Gets Renamed in China After Old One Deemed Vulgar

Ikea Wolf Toy Gets Renamed in China After Old One Deemed Vulgar

Ikea changed the Chinese name of its stuffed wolf toy because the earlier version sounded like a vulgarity in Cantonese, after the toy became a symbol of government opposition in Hong Kong. The new name of the plush toy wolf from the Little Red Riding Hood fairy tale contains the Chinese character for “good fortune.” The earlier name sounded like a vulgar anatomical reference in the Cantonese dialect which uses the same characters as Mandarin but pronounces them differently. Read more of this post

New Delhi Voters Jolt Old Order

New Delhi Voters Jolt Old Order

Thrilling new energies are coursing through Indian democracy. On Sunday, a rude jolt was delivered both to the governing party in the capital, New Delhi, and to the very nature of political power as commonly understood and often cynically exercised. Assembly elections in Delhi, India’s only city-state, resulted in the ruling Congress party — which has headed India’s coalition government since 2004 — being booted out of power after three consecutive terms in office. It won only eight of the 70 seats on offer. Ordinarily, such an unambiguous expression of voter discontent would have meant a huge swing toward some other long-established party: in this case, the Bharatiya Janata Party, the main opposition group both in Delhi and on the national level. But while this was the case in three other states that also had elections — Madhya Pradesh, Rajasthan and Chhatisgarh, all of which voted or returned the BJP to power — in Delhi the story was far more surprising. Read more of this post

Rupee Aids Bajaj Overseas as Honda Grabs Share: Corporate India

Rupee Aids Bajaj Overseas as Honda Grabs Share: Corporate India

Bajaj Auto Ltd. (BJAUT), which lost its ranking as India’s second-largest two-wheeler maker to Honda Motor Co. this year, is banking on the rupee’s longest losing streak in 12 years to boost exports as sales drop at home. Motorcycle deliveries by Pune, India-based Bajaj have fallen 14 percent this year, the most among India’s nine producers of the vehicle, compared with a 30 percent jump in Honda’s local two-wheeler sales, which includes scooters. Bajaj’s exports have grown for four straight months since August, the Society for Indian Automobile Manufacturers said. Read more of this post

Indonesia’s president to weigh into mineral export confusion

Indonesia’s president to weigh into mineral export confusion

Wednesday, Dec 11, 2013

Reuters

JAKARTA, Dec 11 (Reuters) – Indonesia’s president will make the final decision in a furious debate over next month’s scheduled ban on the export of unprocessed metal ore, an issue that pits nationalist-minded lawmakers against officials desperate not to lose revenue. Read more of this post

Many Indonesians think vote-buying ‘acceptable’: Poll

Many Indonesians think vote-buying ‘acceptable’: Poll

Friday, December 13, 2013 – 18:18

AFP

JAKARTA – More than 40 percent of Indonesian voters consider politicians seeking to buy support at elections acceptable, a survey showed Friday, months before national polls in the graft-ridden country. In what it described as an “alarming” survey, Jakarta-based pollster Indikator found that 41.5 percent of 15,600 people interviewed did not have a problem accepting cash or a gift from would-be lawmakers. Read more of this post

Osaka Seeks to Lure Biggest Pension Fund to Airport Concessions

Osaka Seeks to Lure Biggest Pension Fund to Airport Concessions

New Kansai International Airport Co. is seeking to attract Japan’s state-run retirement fund to a sale of two airport concessions that could raise as much as 1.2 trillion yen ($12 billion). Read more of this post

McKinsey Return to BOE Spurs 1960s Memory of Unfinished Business

McKinsey Return to BOE Spurs 1960s Memory of Unfinished Business

McKinsey & Co. consultants working at the Bank of England are competing with the ghosts of their predecessors.

Governor Mark Carney is giving the U.S. firm another shot at transforming the three-century-old institution, more than four decades after the BOE first hired it to conduct a full-scale examination of operations. The impact of the original review was “limited,” according to former BOE official Guy de Moubray, who participated in the study. Read more of this post

The 2014 Contrarian Investment Tour, From Rupees to Copper

The 2014 Contrarian Investment Tour, From Rupees to Copper

Don’t try to catch a falling knife. It’s one of the oldest saws on Wall Street. But to make a lot of money, sometimes you have to get a little bloody.

So say contrarians like Brian Singer. The risk is great, “but the return is of such an astounding magnitude, you’re willing to do it,” says Singer, manager of the William Blair Macro Allocation Fund (WMCNX). Read more of this post

How Ireland Charmed the Germans to Lead Nation Out of Bailout Wilderness

How Ireland Charmed the Germans to Lead Nation Out of Bailout Wilderness

As a cold day last February turned to early evening twilight, Alan Dukes strode through the lobby of Dublin’s Merrion Hotel when a familiar figure lurking in the shadows stopped him.

Sean Kinsella, private secretary to Finance Minister Michael Noonan, told the banker that his boss wanted to see him. The pair scurried across the road to Noonan’s office. There, Dukes learned for the first time of the plan to close the bank he led, the former Anglo Irish Bank Corp., emblem of the financial boom and bust that had crippled Ireland. Read more of this post

Haircut Deficit: Kids Living in Basements a Drag on U.S. Services Spending

Haircut Deficit: Kids Living in Basements a Drag on U.S. Services Spending

The U.S. economy is suffering a service interruption.

Consumer spending on services — everything from rents and water bills to health care and haircuts — is a laggard as the economy has recovered from the worst recession since the Great Depression. Such expenditures adjusted for inflation have risen 6.3 percent since mid-2009, compared with a 34 percent surge in outlays on durable goods such as automobiles and appliances, according to data from the Commerce Department in Washington. Read more of this post

With a hole in its heart, South Africa buries Mandela

With a hole in its heart, South Africa buries Mandela

8:27pm EST

By Ed Cropley

QUNU, South Africa (Reuters) – South Africa buries Nelson Mandela on Sunday, closing one momentous chapter in its tortured history and opening another in which the multi-racial democracy he founded will have to discover if it can thrive without its central pillar. Read more of this post

Are Bitcoins the Criminal’s Best Friend?

Are Bitcoins the Criminal’s Best Friend?

Until very recently, the virtual currency known as bitcoins could be mistaken for just another Internet fad (the Winkelvoss twins of Facebook fame even had a role). But when federal law enforcement closed the “Silk Road,” the wildly popular online illegal-drug emporium that used Bitcoin as a medium of exchange, politicians and policy makers took notice. Criminals, it turns out, really like bitcoins, which can be exchanged for nefarious purposes on the “Dark Web,” with complete anonymity and, it seems, impunity. Read more of this post

Most Americans Don’t Know Bitcoin While Some Guess Xbox

Most Americans Don’t Know Bitcoin While Some Guess Xbox

Some Americans think Bitcoin is an Xbox game. Others think it might be an iPhone app. The majority have no idea it’s a virtual currency they can use to buy everything from T-shirts to Tesla Motors sedans, according to a Bloomberg National Poll. Only 42 percent of Americans who responded to the Dec. 6-9 telephone survey correctly identified Bitcoin, which has gained more than 80-fold in value this year as its popularity expands. Read more of this post