Wall Streeters Are Starting To Pass Around This Chart Showing The Market On The Cusp Of A Big Crash

Wall Streeters Are Starting To Pass Around This Chart Showing The Market On The Cusp Of A Big Crash

JOE WEISENTHAL NOV. 22, 2013, 5:49 AM 24,700 37

Dan Greenhaus of BTIG (@danBTIG) includes this chart in his latest nightly email. It shows the current market aligned with the market in the days before the Depression. What does the chart mean? Dan has the best take: Indeed, we recently devoted an entire conference speech to pushing back on the idea of an equity bubble. How do we know the story remains? The chart below, overlaying the S&P 500 today against equities in the 20s/30s is now starting to make the rounds. Without getting too personal, “chart overlaying” is lazy and this is no less so. But it does remind us that as much as everyone thinks everyone else is “all bulled up,” these views still persist and have shown no indication they are going away any time soon. This is the crucial thing, which Dan nails. It’s not that the chart has any predictive value. It’s just interesting that everyone’s passing it around. 

South Korea’s major conglomerates saw their profitability deteriorate sharply this year

Top 10 conglomerates suffer sharp margin erosion

2013.11.21 17:59:19

South Korea’s major conglomerates saw their profitability deteriorate sharply this year. Even the top-notch conglomerates, including the biggest Samsung Group and second-biggest Hyundai Motor Group, posted weaker operating margins. 83 listed subsidiaries except financial firms under the top 10 conglomerates by assets excluding public firms made 36.3 trillion won ($34.2 billion) in operating profit on an individual basis in the first three quarters this year, down 4.7 percent from 38.1 trillion won a year ago, according to corporate information provider Chaebul.com and electric notice system of Financial Supervisory Service Thursday.  Read more of this post

Korean tire makers are challenging top-tier rivals such as Bridgestone and Michelin as they continue to supply more tires to German premium carmakers

2013-11-22 17:59

Tire makers challenge global majors

By Choi Kyong-ae

Korean tire makers are challenging top-tier rivals such as Bridgestone and Michelin as they continue to supply more tires to German premium carmakers. The most recent achievement in line with this was a deal signed by Hankook Tire with Mercedes to provide ultra high-performance tires for the German marque’s S-Class luxury sedan which went on sale in Europe from September. Read more of this post

Sugar mills in India, the world’s largest producer after Brazil, are betting on government subsidies to end the biggest industry shutdown in the nation’s history and stem losses at companies

Sugar Mills Seek State Aid to End Worst Impasse: Corporate India

Sugar mills in India, the world’s largest producer after Brazil, are betting on government subsidies to end the biggest industry shutdown in the nation’s history and stem losses at companies. Mills in Uttar Pradesh, the state that is India’s biggest cane producer, will call off the shutdown only if the government agrees to pay part of the cane price to growers, M. Srinivaasan, president of the Indian Sugar Mills Association, said in a phone interview yesterday. Bajaj Hindusthan Ltd. (BJH) and Balrampur Chini Mills Ltd. (BRCM) are among those that want the state to bear about 20 percent of the cane costs, he said. Read more of this post

Fosun Pharma Rebounds After Denying Chairman Arrest Rumors

Fosun Pharma Rebounds After Denying Chairman Arrest Rumors

Shanghai Fosun Pharmaceutical Group Co. (2196), a maker of modern drugs and traditional Chinese medicine, rebounded in Shanghai trading after the company’s parent denied speculation that its Chairman Guo Guangchang had been detained. The rumors are “unfounded,” parent Fosun International Ltd. (656) said in an e-mailed statement. The company will take all necessary steps to get to the bottom of the situation, according to the statement, which cited Guo. Fosun Pharma shares traded 3.1 percent lower at 18.04 yuan as of 2:41 p.m. local time, after earlier tumbling as much as 10 percent, the worst intra-day slide since October 2009. “The rumor of the chairman being arrested is probably the main reason affecting the company’s shares,” said Sam Chi Yung, a strategist at Delta Asia Securities Ltd. in Hong Kong. “This kind of rumor affects stock prices quite a lot.” The 21st Century Business Herald reported the rumors that Guo had been barred from leaving Hong Kong on its website. Guo was in Beijing visiting China Datang Corp. Chairman Chen Jinxing today, the company posted on its official Weibo page after the rumors surfaced.

Natasha Khan in Hong Kong at +852-2977-4630 or nkhan51@bloomberg.net

Chinese tycoon eyes property assets to save struggling shipbuilder

Chinese tycoon eyes property assets to save struggling shipbuilder

12:03am EST

By Yimou Lee and Umesh Desai

HONG KONG (Reuters) – An offer by the billionaire owner of Glorious Property Holdings Ltd (0845.HK: Quote,Profile, Research, Stock Buzz) to take the company private for HK$4.57 billion($589 million) is seen as an effort to save a struggling shipbuilder he founded that is laden with debt. Zhang Zhirong’s offer came late on Thursday, just hours after the shipbuilder he founded, China Rongsheng Heavy Industries Group (1101.HK: Quote, Profile, Research, Stock Buzz), said a unit had received a claim from a local government seeking at least 1 billion yuan ($172 million) for an alleged breach of contract, among other things. Read more of this post

China’s Path to U.S.-Style IPOs Confronts Get-Rich-Quick Culture

China’s Path to U.S.-Style IPOs Confronts Get-Rich-Quick Culture

China’s plan to allow the market a greater role in initial public offerings hinges on stamping out a raft of practices that deceive investors, from lax underwriting standards to executives who falsify earnings to obtain higher valuations. The proposed switch to a U.S.-style IPO model comes after a 14-month moratorium on Chinese offerings and is part of a wider push by the Communist Party to lessen government control of the economy. The so-called registration system would leave questions of IPO supply and timing of deals to companies, not Chinese regulators who now must approve most facets of an offering. Hurdles abound, including creating a legal system robust enough to guard against stock-sale fraud. Read more of this post

China’s ‘rejuvenation index’ greeted with derision

November 22, 2013 11:28 am

China’s ‘rejuvenation index’ greeted with derision

By Jamil Anderlini in Beijing

Chinese president Xi Jinping has pledged to reduce the role of central planning in the economy and usher in the “great rejuvenation of the Chinese nation”, but the unveiling this week of the country’s latest ‘rejuvenation index’ has been greeted with derision by many ordinary people and online commentators. By the end of 2012, the Chinese nation was 65.3 per cent rejuvenated, according to the index published by the Social Development Research Centre of the National Development and Reform Commission, China’s powerful state planning agency. Read more of this post

China regulator orders more disclosure on shadow bank products: sources

China regulator orders more disclosure on shadow bank products: sources

5:43am EST

By Weihao Cao and Gabriel Wildau

BEIJING/SHANGHAI (Reuters) – The China Banking Regulatory Commission (CBRC) will require banks to report detailed information on their holdings of wealth management products beginning in 2014, four sources with direct knowledge of the new regulations told Reuters on Friday. Wealth management products (WMPs) are short-term investment products that Chinese banks market to clients as a higher-yielding alternative to traditional bank deposits. They have become a crucial element of China’s shadow banking system, which analysts warn has contributed to excessive debt growth that has led to a build-up of financial risk. Read more of this post

Singapore Says Money-Mule Cases Increase as Residents Swindled

Singapore Says Money-Mule Cases Increase as Residents Swindled

Singapore police and banks urged the city-state’s residents to be wary of fraudsters seeking to use their bank accounts to funnel illegal funds after an increase of reported cases this year. The number of reported cases of illegitimate cash being given to so-called money mules to hand over to a third party increased to 133 in the first nine months of this year, up from 93 for all of 2012, the police, the city’s bank association and the National Crime Prevention Council said in a statement today. The amount of illegal monies in those cases fell to S$15.5 million ($12.4 million) from 2012’s S$24.6 million. Read more of this post

Many Singapore SMEs have no growth strategy: Poll

Many SMEs have no growth strategy: Poll

Companies are busy trying to cut costs and raise productivity 

Published on Nov 22, 2013
Singapore’s small and medium-sized enterprises (SMEs) seem to have lost their appetite for growth. — ISTOCKPHOTO AND ST ILLUSTRATION

By Yasmine Yahya

BACKGROUND STORY

TOUGH TIMES

Only 7 per cent expect to achieve double-digit growth – the lowest level in the study’s 11-year history.

44 per cent expect no discernible growth, while another 9 per cent expect revenues to shrink.

Markedly fewer firms are doing business overseas: 46 per cent, down from 54 per cent last year.

75 per cent this year say they have a business strategy, down from 85 per cent last year.

Singapore’s small and medium-sized enterprises (SMEs) seem to have lost their appetite for growth.
They are too focused on grappling with an ever tougher business environment, a new survey has found. Read more of this post

Brookfield Asset Management regularly generates hundreds of millions in profit through complex related-party dealings

Brookfield’s Looking-Glass World

By: RODDY BOYD | November 18, 2013

Edel Rodriguez

A wry investor might be forgiven for concluding that peering at Toronto-based Brookfield Asset Management’s filings is akin to Lewis Carroll’s Alice peeking behind the mirror and finding a universe in reverse. Consider the third-quarter earnings just released by the real estate management, energy and infrastructure conglomerate, disclosing a handsome $813 million in net income for those three months, walloping the $334 million the public company reported for the same period last year. But instead of popping corks, investors who read the filing will probably want to reach for a bottle of aspirin. Read more of this post

A rise of passives, a rise of scrutiny

November 15, 2013 6:26 pm

A rise of passives, a rise of scrutiny

By Chris Flood

Index-based investing is expanding rapidly across global financial markets in a shift that offers big rewards to providers of popular benchmarks. It is also, however, attracting growing scrutiny from regulators. The most visible evidence for the rise of index-based investing comes from growth in the exchange traded funds industry which now commands assets of $2.3tn. Trillions of dollars more are held in index-based portfolios by pension and sovereign wealth funds and other institutional investors. Read more of this post

The Balkanisation of banking: Putting Humpty together again; Regulators risk fatally fracturing the financial system. It need not be so

The Balkanisation of banking: Putting Humpty together again; Regulators risk fatally fracturing the financial system. It need not be so

Nov 23rd 2013 |From the print edition

OF THE many things that keep financial regulators awake at night, perhaps the most alarming prospect is the collapse of a sprawling international bank with local operations. “The one thing they don’t want to be blamed for is if a big foreign bank blows up in their market,” says a senior executive at just such a bank. Read more of this post

Investing in frontier markets: Fishy tale; The story of a dollar-bond issue in Mozambique is a parable of easy money

Investing in frontier markets: Fishy tale; The story of a dollar-bond issue in Mozambique is a parable of easy money

Nov 23rd 2013 | MAPUTO |From the print edition

A DESPERATE search for bonds that pay a decent rate of interest and a keen desire for exposure to economies that are still growing quickly have taken rich-world investors to some exotic places. The raciest bets are made in so-called frontier markets, poorer places with even less mature financial sectors than emerging markets. Africa is full of them. Rwanda and Tanzania, for example, have found willing buyers this year for their debut issues of dollar-denominated bonds. The farthest edge of the investing frontier has now reached Mozambique. Read more of this post

In Retailing Years, PetSmart Shows Its Strength

In Retailing Years, PetSmart Shows Its Strength

SPENCER JAKAB

Nov. 21, 2013 4:40 p.m. ET

Before Americans became obsessed with 140-character bon mots or status updates, cat videos dominated cyberspace. Even today, we spend over 10 times as much on our pets as the combined U.S. revenue of Twitter Inc. TWTR +2.46% and Facebook Inc. Fluffy and Fido aren’t only big business but fairly recession-proof, as shareholders ofPetSmart  Inc. PETM +1.44% happily discovered. The retailer went public 20 years ago but spent the first 15 tracking the broad stock market. It fell hard in the early months of the financial crisis as investors figured superpremium pet foods, if not pets themselves, would be a casualty of the downturn. Read more of this post

Rivals Aim to Break German Hold on China Luxury-Car Market

Rivals Aim to Break German Hold on China Luxury-Car Market

U.S., British and Swedish Car Makers Spending Billions of Dollars to Crack Growing Demand

COLUM MURPHY

Nov. 20, 2013 2:01 p.m. ET

GUANGZHOU, China—For Chinese car buyers, luxury means German. Audi AGNSU.XE +0.30% , BMW AG BMW.XE +0.31% and Daimler AG DAI.XE +0.12% ‘s Mercedes-Benz combined hold more than 70% of the country’s about $40 billion annual market for high-end vehicles. Now, a club of smaller scale luxury brands have China in their cross hairs. In the past yearGeneral Motors Co. GM -0.84% ‘s Cadillac, Tata Motors Ltd. 500570.BY -0.61% ‘s Jaguar Land Rover, and Chinese-owned Swedish brand Volvo have detailed plans to spend billions of dollars on factories in China that would bring at least half a million additional luxury cars to the market beginning 2015. Read more of this post

Reforming China’s state-owned firms: From SOE to GLC; China’s rulers look to Singapore for tips on portfolio management

Reforming China’s state-owned firms: From SOE to GLC; China’s rulers look to Singapore for tips on portfolio management

Nov 23rd 2013 | HONG KONG |From the print edition

SHORTLY before his confirmation as China’s “paramount leader” in 1978, Deng Xiaoping paid a visit to fast-growing Singapore. He planted a tree on a hill overlooking Jurong, a bustling industrial park built on what was once marshy wasteland close to the city-state’s harbour. Singapore’s success as a trading hub impressed Deng, who imposed his vision of economic reform on China’s Communist Party the following month, at an historic meeting known as the “third plenum”. Read more of this post

PBOC Says No Longer in China’s Interest to Increase Reserves

PBOC Says No Longer in China’s Interest to Increase Reserves

By Bloomberg News – Nov 20, 2013

The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation. “It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes. Read more of this post

On China’s roads, where luxury risks becoming ordinary

On China’s roads, where luxury risks becoming ordinary

4:19pm EST

By Samuel Shen and Norihiko Shirouzu

GUANGZHOU, China (Reuters) – Luxury car dealers are resorting to offering customers massages, mini-golf and other gimmicks, hoping this will give them an edge in a ferociously competitive Chinese market where brand loyalty is less common than in the West. Premium car sales slowed in China last year as the economy eased off the throttle and new Communist Party leadership was installed, but momentum is returning, and China is set to overtake the United States as the world’s top luxury car market by 2020 with annual sales of close to 3 million cars. Read more of this post

Luxury Car Dealers In China Are Using All Sorts Of Gimmicks To Lure Customers

Luxury Car Dealers In China Are Using All Sorts Of Gimmicks To Lure Customers

SAMUEL SHEN AND NORIHIKO SHIROUZU, REUTERS 48 MINUTES AGO 633

GUANGZHOU, China (Reuters) – Luxury car dealers are resorting to offering customers massages, mini-golf and other gimmicks, hoping this will give them an edge in a ferociously competitive Chinese market where brand loyalty is less common than in the West. Premium car sales slowed in China last year as the economy eased off the throttle and new Communist Party leadership was installed, but momentum is returning, and China is set to overtake the United States as the world’s top luxury car market by 2020 with annual sales of close to 3 million cars. Read more of this post

ICBC chairman sees inevitable rise in China bad loans

Last updated: November 20, 2013 6:14 pm

ICBC chairman sees inevitable rise in China bad loans

By Simon Rabinovitch and Paul J Davies in Beijing

The head of China’s biggest bank has warned that bad loans will inevitably rise and weaker lenders will be wiped out as the government relaxes its grip on the economy. But Jiang Jianqing, chairman of Industrial and Commercial Bank of China, the country’s largest lender by assets, also hit back at those foreign critics who have raised questions about the resilience of China’s banks after the lending spree that powered the country through the 2008 global financial crisis. ICBC was prepared for the challenges and should not be held to impossibly high standards, he said. Read more of this post

Electric VS hydrogen: China iIs battleground for auto giants

Updated: Friday November 22, 2013 MYT 1:16:52 PM

Electric VS hydrogen: China is battleground for auto giants

GUANGZHOU/BEIJING: German auto giants Volkswagen AG, BMWand Daimler see China’s future as being electric – encouraged by generous government subsidies – but that bet puts them at odds with some of their Asian rivals. While the Europeans were heralding the all-electric vehicle at the Guangzhou auto show this week, Toyota Moto and Honda Motor  were unveiling hydrogen fuel cell cars at shows inTokyo and Los Angeles. Read more of this post

China’s State TV Grapples With Advertising Slowdown

China’s State TV Grapples With Advertising Slowdown

CCTV Departs From Practice of Disclosing Ad-Auction Results as Companies Find New Ways to Reach Out to Customers

LAURIE BURKITT

Updated Nov. 20, 2013 10:38 p.m. ET

China Central Television is feeling the shift of advertising to the Internet. Shown, Communist Party officials with CCTV’s Spring Festival cast. Xinhua/Zuma Press

SHANGHAI—China’s most powerful propaganda outlet is grappling with a problem familiar to media companies world-wide: How to keep advertisers in the digital age. China Central Television this week departed from past practice and declined to disclose results of a closely watched auction for advertising slots for next year. In a written response to questions, the state-run broadcaster said only that its ad-auction sales growth this year was in line with the country’s economic growth. China’s economy grew 7.8% in the third quarter from a year earlier. Read more of this post

China’s Smaller Cities Thirst for the Luxe Life

November 20, 2013

China’s Smaller Cities Thirst for the Luxe Life

By JEN LIN-LIU

CHENGDU, China — Just yards away from the enormous statue of Mao Zedong in Tianfu Square, Chengdu’s two most exclusive malls are doing a brisk business on a Wednesday afternoon. Shoppers in the Louis Vuitton flagship at the Yanlord Landmark mall are buying this season’s handbags in bright purples and blues. Just outside the store, a woman in crystal-encrusted high heels and a man carrying a bulging Dior shopping bag walk by. And two men stroll along arm-in-arm, one holding a black Bottega Veneta hand-braided clutch. Read more of this post

China’s Bribery Culture Poses Risks for Multinationals

China’s Bribery Culture Poses Risks for Multinationals

To the risks of doing business in China — an authoritarian government, sprawling market, worsening pollution — add another one: running afoul of local and U.S. anti-corruption laws. Multinational companies are working to navigate bribery risks in China, where possible corruption by JPMorgan Chase & Co., GlaxoSmithKline Plc and Avon Products Inc. have sparked probes by the U.S. or Chinese authorities. Read more of this post

China regulator drafts new rules to tame shadow banking

China regulator drafts new rules to tame shadow banking

Thu, Nov 21 2013

* Banks use complex deal structures to evade lending curbs

* Risky corporate credit disguised as interbank loans

* Trust firms used for loans to real estate, local govts

* Rules target use of secret “drawer agreement” guarantees

By Hongmei Zhao and Gabriel Wildau

SHANGHAI, Nov 22 (Reuters) – China’s financial regulators are preparing new rules to crack down on explosive growth in complex interbank transactions used to evade lending restrictions, senior bankers who have seen drafts of the regulations told Reuters this week. The measures, likely to be put in place early next year, aim to curb excess credit growth to prevent a debt crisis as China’s economy slows. Despite a string of new rules earlier this year, banks have found ways to expand credit through shadow-banking channels that have raised concerns over the potential for systemic risk. Read more of this post

China corporate financing squeezed as reform plans spark rate spike

China corporate financing squeezed as reform plans spark rate spike

Thu, Nov 21 2013

* 10-year government bond yields at 8-year high

* Market expects interest-rate reform to raise funding costs

* Spike in rates forces firms to delay bond sales

* Policymakers seek de-leveraging to avoid debt crisis

By Gabriel Wildau

SHANGHAI, Nov 21 (Reuters) – Chinese bond yields have surged as the market starts pricing in interest rate reform, a development that makes borrowing more expensive and threatens China’s fragile economic recovery. Chinese bond prices have been hammered in recent days on expectations that reforms to loosen government control of interest rates will cause funding costs to rise. Bond prices move inversely to interest rates so when bond prices fall, their yields rise. Read more of this post

China Central TV: champion of the people with a blurred picture

November 20, 2013 3:15 am

China Central TV: champion of the people with a blurred picture

By FT reporters

At the end of October, a young journalist in handcuffs, green prison jacket and a freshly shaved head appeared on China Central Television, the state-owned national broadcaster, and confessed to taking bribes in exchange for writing negative articles about a large Chinese company. Just days earlier, the newspaper that employed Chen Yongzhou, 27, had published front-page banner headlines calling for his release, while human rights groups had mobilised to defend him. But after his admission on national television, the issue quickly died away. Read more of this post