Richemont Chairman Warns Global Economy Is “Very Precarious… There Will Be Tears”

Richemont Chairman Warns Global Economy Is “Very Precarious… There Will Be Tears”

Tyler Durden on 12/03/2013 10:11 -0500

While most of the world’s elites are bathing in a sea of liquidity and propagandizing the status quo to keep the dream alive, Richemont Chairman Johann Rupert has unleashed a torrent of uncomfortable truthiness this morning:

*REMGRO CHAIRMAN RUPERT ‘VERY CONCERNED’ ABOUT GLOBAL ECONOMY

*GLOBAL ECONOMY ‘VERY, VERY PRECARIOUS,’ RUPERT SAYS

*WORLD HEADING FOR ‘BIG INFLATION’ OR `BIG DEPRESSION’: RUPERT

*GLOBAL ECONOMY HEADED FOR ‘TEARS’: REMGRO, RICHEMONT CHAIRMAN

*RUPERT SAYS HIS BIGGEST CONCERN IS JOBLESS GROWTH

And while things are good now, the owner of the Cartier brand warned if the global economy doesn’t do well, Richemont is not well positioned.

Via Bloomberg,

“It is very, very precarious,” Rupert said at the annual general meeting in Cape Town of Remgro Ltd., where he is also chairman.

 “There will be tears, but we don’t know when, and we don’t know whether it’s going to be a big inflation or whether it’s going to be a depression. Just hedge your bets.”

 “The luxury goods market is very cyclical and relies on consumers discretionary spend,” Rey Wium, an analyst at Renaissance Capital in Johannesburg, said by telephone. “When times are tough, consumers will tighten their belts.”

Penny Pricing for U.S. Stocks Said to Get Scrutinized

Penny Pricing for U.S. Stocks Said to Get Scrutinized

Securities executives are trying to determine if the 12-year-old decision to narrow the price increments for American stock trading has harmed investors, according to two people with knowledge of the matter. Representatives from exchanges, brokers, mutual funds and regulatory agencies held two conference calls yesterday to discuss concerns about market structure, said the people, who requested anonymity because the discussions were private. One topic was the U.S. mandate in 2001 to trade equities in pennies rather than eighths or sixteenths of a dollar, they said. Read more of this post

Mondelez Follows Microsoft Selling Bonds in Europe as Costs Fall

Mondelez Follows Microsoft Selling Bonds in Europe as Costs Fall

U.S. food and beverage company Mondelez International Inc. (MDLZ) is following Microsoft Corp. selling bonds in Europe as borrowing costs fall. The maker of Oreo cookies is marketing 18-month floating-rate notes and fixed-rate bonds due January 2017 and January 2021, according to a person familiar with the matter. The average yield investors demand to hold corporate bonds in euros instead of government debt dropped six basis points this week to 123 basis points, the lowest since June 12, Bank of America Merrill Lynch index data show. Read more of this post

Keeping Shareholders in the Dark; The Securities and Exchange Commission is failing to put investor interests first

December 3, 2013

Keeping Shareholders in the Dark

By THE EDITORIAL BOARD

Protecting investors and ensuring proper corporate governance are the essence of the mission of the Securities and Exchange Commission. But you wouldn’t know that from the recent actions of the agency and its chairwoman, Mary Jo White. Last week, the S.E.C. unwisely removed from its regulatory agenda a plan to consider a rule to require public companies to disclose their political spending — even though the case for disclosure is undeniable. Basic investor protection requires that shareholders know how corporate executives are spending shareholder money. Good corporate governance requires that companies are transparent about their use of corporate resources. Shareholders know this and have demanded disclosure. Read more of this post

Investors invited to join forces to rein in wayward governance

December 2, 2013 10:04 pm

Investors invited to join forces to rein in wayward governance

By David Oakley, Investment Correspondent

Britain’s largest shareholders are joining forces with the world’s biggest international investors in a groundbreaking initiative to curb boardroom excesses and improve company performance. An Investor Forum, a central recommendation of economics professor John Kay’s 40,000-word report on UK equity markets last year, will be created to tighten checks on all London-listed companies over pay, auditing and strategy and to promote long-term decision-making. Read more of this post

Inflation-Linked Bonds Boom

Inflation-Linked Bonds Boom

Governments in Emerging Markets Plan New Issues

ANJANI TRIVEDI

Governments in emerging markets are turning to inflation-linked bonds, some for the first time, as they look to tap more avenues to raise cash and signal they’re serious about keeping a cap on price increases. An Indian trader counted money at a wholesale market in Hyderabad. A fourfold surge in the cost of onions helped push Indian inflation to a seven-month-high in September. Read more of this post

How Peugeot and France ran out of gas

How Peugeot and France ran out of gas

5:36am EST

By Sophie Sassard, Mark John and Gilles Guillaume

PARIS (Reuters) – The rush to Paris’s Charles-de-Gaulle airport for flights to China began on Friday, October 11. A first set of bankers booked onto the 10-hour overnight Air China Flight; over the next 48 hours, they were followed by top management from PSA Peugeot Citroën and the French Finance Ministry. Peugeot was ailing – and it had just started talks about selling a stake to state-owned Chinese automaker Dongfeng. Read more of this post

Gold Drops Below Cash Cost, Approaches Marginal Production Costs

Gold Drops Below Cash Cost, Approaches Marginal Production Costs

Tyler Durden on 12/02/2013 19:32 -0500

As we showed back in April, the marginal cost of production of gold (90% percentile) in 2013 was estimated at between $1250 and $1300 including capex. Which means that as of a few days ago, gold is now trading well below not only the cash cost, but is rapidly approaching the marginal cash cost of $1125… Of course, should the central banks of the world succeed in driving the price of gold to or below its costs of production (repressing yet another asset class into stocks) then we fear the repercussions will backfire from a combination of bankruptcies, unemployment, and as we have already seen in Africa – severe social unrest (especially notable as China piles FDI into that region). Read more of this post

Potter Says New Repo Tool Should Increase Fed’s Control of Rates

Potter Says New Repo Tool Should Increase Fed’s Control of Rates

Simon Potter, the Federal Reserve Bank of New York’s markets group chief, said the Fed’s reverse repurchase agreement program now being tested will probably play a central role in the eventual removal of record stimulus. Market “participants have indicated that they expect that a facility, if executed in full scale in the future, should be an effective tool for increasing the Federal Reserve’s control of short-term money market rates,” Potter said today in the text of speech in New York. He is in charge of the System Open Market Account used in implementing monetary policy. Read more of this post

Europeans Struggle to Put Out Cigarettes as Nicotine Trumps Bans

Europeans Struggle to Put Out Cigarettes as Nicotine Trumps Bans

Never mind the smoking bans, high taxes and the pictorial death warnings. Europeans still rank as the world’s heaviest smokers. About 28 percent of adults smoked in 2011 in Europe as more French picked up the habit, according to statistics released today by the World Health Organization’s regional office in Copenhagen. Tobacco-related illnesses cause 16 percent of deaths in Europe, compared with 12 percent globally, the WHO said. Read more of this post

E-Cigarettes to Fracking Rules Seen in 2014 Surge

E-Cigarettes to Fracking Rules Seen in 2014 Surge

Over the next 12 months, the Obama administration is due to issue regulations governing everything from e-cigarettes to smoke-stack emissions in what experts predict will be a second-term rush to put rules in place before leaving office. “In every administration, these things have to be wrapped up in at least the second to last year,” Cindy Skrzycki, author of “The Regulators: Anonymous Power Brokers in American Politics,” said in an interview. Skrzycki said 2014 will be an important year for agencies to get new rules under way. Read more of this post

Bitcoin’s 80-Fold Jump Unlikely to Last: Offit Capital

Bitcoin’s 80-Fold Jump Unlikely to Last: Offit Capital

Bitcoins probably won’t become a popular method of exchange as competing “crypto-currencies” crowd the market, confusing merchants and sending them back to credit cards and cash, Offit Capital said. “Why should I pay $1,000 for a Bitcoin when I can acquire a Bbqcoin for $10 or a Hobonickle for 10 cents?” Todd Petzel, chief investment officer of the New York-based private wealth-management firm, said in a report today. “They are all costless to produce, and consequently ultimately worth as much.” Bitcoins, which aren’t regulated by any country or banking authority, jumped 80-fold from a year earlier to about $1,200 last week. They traded at $1,04.98 today at 5:57 p.m. in New York on online exchange BitStamp. The currency, which exists as software in an open online system, gained credibility after law enforcement and securities agencies said at U.S. Senate hearings last month that it could be a legitimate means of exchange. Bitcoins fall short as a viable currency because there is a finite supply, Petzel said. The software that creates bitcoin dictates there can be only 21 million in circulation. “A Picasso drawing could sell for one Bitcoin and a Starbucks latte for one one millionth of a Bitcoin,” he said. “An absolute fixed quantity of currency in circulation is a recipe for extreme deflation and all the problems that come with it.”

To contact the reporter on this story: Gerrit De Vynck in Toronto at gdevynck@bloomberg.net

Bill Gross Explains What “Keeps Him Up At Night”

Bill Gross Explains What “Keeps Him Up At Night”

Tyler Durden on 12/03/2013 08:14 -0500

The choice extracts from Bill Gross’ just released latest monthly letter:

What keeps us up at night? Well I can’t speak for the others, having spoken too much already to please PIMCO’s marketing specialists, but I will give you some thoughts about what keeps Mohamed and me up at night. Mohamed, the creator of the “New Normal” characterization of our post-Lehman global economy, now focuses on the possibility of a” T junction” investment future where markets approach a time-uncertain inflection point, and then head either bubbly right or bubble-popping left due to the negative aspects of fiscal and monetary policies in a highly levered world.  Read more of this post

How Bad Bank Cinda squares China’s debt triangles

How Cinda squares China’s debt triangles

By John Foley

NOVEMBER 27, 2013

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China Cinda has spotted a clever arbitrage. The Chinese “bad bank”, which is revving up for a Hong Kong initial public offering (IPO), has recently been doing brisk business by borrowing cheaply from other banks and using those funds to buy up companies’ short-term loans to each other. In doing so, it has found a way to square China’s dreaded “debt triangles”. Read more of this post

Biggest Bank in Norway Dismisses Hard Landing in Real Estate Bet

Biggest Bank in Norway Dismisses Hard Landing in Real Estate Bet

DNB ASA (DNB) says predictions of a hard landing in Norway’s property market are unfounded as the nation’s biggest bank sees scope for house prices to rise next year. “We don’t expect any sharp decrease in house prices but actually believe there might be a very limited price increase and potential upside for 2014 and stable prices in the year or two after that,” Chief Executive Officer Rune Bjerke said in a Nov. 29 interview at DNB’s headquarters in Oslo. Read more of this post

Second daughter of Samsung boss Lee Kun-Hee promoted to top job of president at the firm’s de-facto holding company

Daughter of Samsung boss Lee Kun-Hee promoted to top job

By AFP | 2 Dec, 2013, 10.53AM IST

SEOUL: The second daughter of Samsung chairman Lee Kun-Hee has been made a president at the firm’s de-facto holding company, it said Monday, cement his family’s hold on the South Korean giant. Lee Seo-Hyun will lead management planning at the Everland’s fashion business, Samsung said in a statement. The 40-year-old was previously vice president of Cheil Industries, which was the former fashion unit before it handed over operations to Everland. Her older sister — Lee Boo-Jin — has been a president at Everland since 2010, overseeingbusiness strategy, while their only brother, Lee Jae-Yong, was made vice chairman ofSamsung Electronics last year. Lee Kun-Hee is chairman of the group’s flagship unit Samsung Electronics and de facto leader of the entire business empire. The move is the latest promotion in recent years of the three heirs of the founding family, which controls Samsung through a complex web of share cross-holdings in group subsidiaries centred on Everland. There was no major reshuffle of top executives within Samsung Electronics — the world’s top maker of mobile phones and TVs. The senior Lee is largely credited with turning Samsung — founded by his father in 1938 — into a global brand and the country’s largest business group. He stepped down as the group’s chairman in 2008 after being found guilty of tax evasion but returned to the post in 2010 after receiving a presidential pardon.

From Singapore to Sweden, Back to Housing Bubbles

NOURIEL ROUBINI

NOV 29, 2013

From Singapore to Sweden, Back to Housing Bubbles

NEW YORK – It is widely agreed that a series of collapsing housing-market bubbles triggered the global financial crisis of 2008-2009, along with the severe recession that followed. While the United States is the best-known case, a combination of lax regulation and supervision of banks and low policy interest rates fueled similar bubbles in the United Kingdom, Spain, Ireland, Iceland, and Dubai. Read more of this post

SEA Games: Myanmar ‘100 per cent’ ready for Games as the clock ticked down to the biggest sports event in the nation’s troubled history

SEA Games: Myanmar ‘100 per cent’ ready for Games

Friday, November 29, 2013 – 21:01

AFP

YANGON – Myanmar is “100 per cent” ready for the Southeast Asian Games, a senior official said Friday, as the clock ticked down to the biggest sports event in the nation’s troubled history. In a major test of Myanmar’s infrastructure and organisation, thousands of athletes, officials, media and visitors will descend for the 22-day multi-sport event starting on Sunday. Read more of this post

Italian Banks’ Woes Hurt Small Firms

Italian Banks’ Woes Hurt Small Firms

Credit Lines, Charitable Spending, Are Cut

GIOVANNI LEGORANO

Updated Dec. 1, 2013 2:53 p.m. ET

SENIGALLIA, Italy— Pietro Fattorini, owner of a marble company in the eastern Italian region of Marche, recently filed for bankruptcy protection. But it isn’t for lack of demand. The 23-year-old company he founded has plenty of orders from overseas clients. Mr. Fattorini’s problem is much closer to home. His longtime bank, Banca Marche, lost more than €750 million ($1.01 billion) in 2012 and the first half of this year. As a result, the bank cut his credit lines last year, choking off the funds he needs to survive. Read more of this post

China regulators focus on shadow banking, which involves mostly wealth-management products (WMPs) sold as a higher-yielding alternative to traditional bank deposits

Updated: Monday December 2, 2013 MYT 6:46:26 AM

Regulators focus on shadow banking

BY YAP LENG KUEN

REGULATORS are placing more emphasis on shadow banking, which involves mostly wealth-management products (WMPs) sold as a higher-yielding alternative to traditional bank deposits. Beginning next year, China’s bank regulator will require banks to report detailed information on their WMP holdings, says Reuters, quoting sources. Read more of this post

Rental yields of private residences could take a further hit in the coming months as more foreigners opt to rent HDB flats and the number of condominium units on the market exceeds demand

Private property rental yields likely to fall: Analysts

SINGAPORE — Rental yields of private residences could take a further hit in the coming months as more foreigners opt to rent Housing and Development Board (HDB) flats and the number of condominium units on the market exceeds demand, property analysts told TODAY.

BY LEE YEN NEE –

5 HOURS 1 MIN AGO

SINGAPORE — Rental yields of private residences could take a further hit in the coming months as more foreigners opt to rent Housing and Development Board (HDB) flats and the number of condominium units on the market exceeds demand, property analysts told TODAY. Read more of this post

Singapore Equity Trading Plummets on Penny-Stock Curbs

SGX Equity Trading Declines to 2011 Low: Southeast Asia

The value of equities traded on Singapore Exchange Ltd. (SGX) sunk to a two-year low last month, threatening to slow the bourse’s earnings growth, as brokerages restricted investments in so-called penny stocks after three commodity companies plunged. The average value of shares transacted daily on Southeast Asia’s biggest exchange fell to S$914 million ($728 million) in November from S$1.3 billion a year earlier, according to data compiled by Bloomberg. That’s the lowest since December 2011. Trading sank 36 percent in the past two months after a slump in Asiasons Capital Ltd., Blumont Group Ltd. and LionGold Corp. erased $6.9 billion in market value over three days in early October, the data show. Read more of this post

Singapore oil traders end year on a whimper; “There’s no retrenchment by the companies. Traders are leaving essentially because they are not getting any bonuses”

PUBLISHED DECEMBER 02, 2013

Oil traders end year on a whimper

More than three-quarters of trading houses here won’t give bonuses this year amid market gloom

RONNIE LIM RONNIE@SPH.COM.SG

There will be no merry round of “musical chairs” this year-end for oil traders here – PHOTO: AP

[SINGAPORE] There will be no merry round of “musical chairs” this year-end for oil traders here. On the contrary, quite a few have bailed out in case their seats get yanked from under them, industry players tell BT. “The trading market has generally been very difficult. Trading costs are high, and there has been insufficient volatility and no clear market trends,” one trading executive lamented. Read more of this post

Instil ‘can do’ spirit in staff, Singapore SMEs urged

Instil ‘can do’ spirit in staff, SMEs urged

Friday, Nov 29, 2013

Rachel Scully

The Straits Times

SMALLER firms need to generate a mindset change among their staff to instil a “can do” mentality, said Acting Manpower Minister Tan Chuan-Jin yesterday. Mr Tan told about 220 representatives from small and medium-sized enterprises (SMEs) that bosses should work on motivating their workers to get the best out of them. “You need to imbue that ‘it is okay if we fail, but we get up and try again’ spirit in your employees… (and they will) go the extra mile as they believe they are an essential part of your team,” he said. Read more of this post

Japan’s yakuza mobsters becoming ‘Goldman Sachs with guns’

Japan’s yakuza mobsters becoming ‘Goldman Sachs with guns’

Sunday, December 1, 2013 – 14:30

AFP

TOKYO – Japanese mobsters driving flash cars purchased with bank loans. Executives bowing in apology for loaning millions to those underworld figures. And high-level officials vowing to squash the crime syndicates, known as yakuza. Japan Inc. is engulfed in its worst mob scandal in years and it’s shining a rare light on the links between big business and shadowy organised crime groups usually known for low-brow ventures like extortion and loan sharking. Read more of this post

Hero Fights Honda to Sate Female Scooter Demand: Corporate India

Hero Fights Honda to Sate Female Scooter Demand: Corporate India

Hero MotoCorp Ltd. (HMCL), India’s largest motorcycle maker, plans to unveil additional models in February to woo women customers for its scooters and fight Honda Motor Co.’s surge in the two-wheeler market. Rising demand for personal transport in India’s villages and small towns, especially among women, is spurring the 18 percent growth in the nation’s scooter sales, Anil Dua, New Delhi-based Hero’s senior vice-president for sales and marketing, said in a Nov. 27 interview in the city. Hero also aims to tap the expanding 125cc motorcycle segment, Dua said. Read more of this post

For Rent in Europe: Trendy Jeans, Washing Machines; Rental, Secondhand Deals Shows How Companies Are Trying to Court Strapped Consumers

For Rent in Europe: Trendy Jeans, Washing Machines

Rental, Secondhand Deals Shows How Companies Are Trying to Court Strapped Consumers

RUTH BENDER

Updated Dec. 1, 2013 7:31 p.m. ET

Anouk Gillis often sports a pair of organic-cotton jeans she ordered online. But she doesn’t actually own them. Rather than buying the pants, which retail for around €100 ($135), Ms. Gillis signed a 12-month lease with their designer, the small Dutch fashion label Mud Jeans. The terms: a €20 deposit and monthly installments of €5. After a year, Ms. Gillis, who is also Dutch, can decide to buy the jeans, return them, or exchange them for a new pair. Read more of this post

India’s Mars mission enters second stage; outpaces space rival China

India’s Mars mission enters second stage; outpaces space rival China

2:24pm EST

By Shyamantha Asokan

NEW DELHI, Dec 1 (Reuters) – India’s first mission to Mars left Earth’s orbit early on Sunday, clearing a critical hurdle in its journey to the red planet and overtaking the efforts in space of rival Asian giant China. The success of the spacecraft, scheduled to orbit Mars by next September, would carry India into a small club, which includes the United States, Europe and Russia, whose probes have orbited or landed on Mars. Read more of this post

Cut from the same cloth: Esprit tries on Zara for fashion makeover

Cut from the same cloth: Esprit tries on Zara for fashion makeover

4:10pm EST

By Clare Baldwin and Sarah Morris

HONG KONG/MADRID (Reuters) – Esprit Holdings’ (0330.HK: Quote, Profile, Research, Stock Buzz) chief is doubling down on a bet to fix the struggling clothing retailer he took charge of a year ago by revamping its existing business model and recreating it in the image of his former employer-now-rival, Zara. Jose Manuel Martinez Gutierrez, 44, has stacked his management suite with veterans of Zara owner Inditex (ITX.MC: Quote, Profile, Research, Stock Buzz), the world’s biggest retailer whose model of rapidly changing fashion analysts say is among the best in the industry. Read more of this post