Record $175 Billion Due Makes Banks Worst Losers

Record $175 Billion Due Makes Banks Worst Losers

Banks are leading losses in China’s bond market this quarter as investors brace for a record $175 billion in debt due in 2014 and Standard & Poor’s warns that bad loans will escalate. Notes issued by financial companies including China Construction Bank Corp. have lost 2.7 percent since the end of June, the most among the sectors tracked by Bank of America Merrill Lynch’s China Broad Market Index. The overall gauge slipped 1.8 percent, more than the 0.1 percent drop for industry securities globally. China’s banks have 1.07 trillion ($175 billion) of bonds maturing in 2014, up from 970 billion yuan this year, according to Citigroup Inc. Read more of this post

JPMorgan Warns: Increasing Rates Have “Reduced The Remaining Refinance Opportunity By More Than 50%”

JPMorgan Warns: Increasing Rates Have “Reduced The Remaining Refinance Opportunity By More Than 50%”

Tyler Durden on 09/09/2013 19:57 -0400

About an hour ago, Bank of America served the latest indication that the US housing “recovery” (also known as the fourth consecutive dead cat bounce of the cheap credit policy-driven housing market in the past five years) may be on its last breath. Namely, the bank announced that it will eliminate about 2,100 jobs and shutter 16 mortgage offices as rising interest rates weaken loan demand, said two people with direct knowledge of the plans and reported by Bloomberg. In some ways this may be non-news: previously we reported, using a Goldman analysis, that up to 60% of all home purchases in recent months have been, which of course shows just how hollow the “recovery” has been for the common American for whom the average home has once again become unaffordable. However, judging by an update presentation given earlier today by the CFO of none other than JP “fortress balance sheet” Morgan, things are rapidly going from bad to worse for the banking industry as a result of the souring mortgage market for which, absent prop trading, loan origination is the primary bread and butter. Read more of this post

Hidden fund costs are hurting investors

September 9, 2013 11:52 am

Hidden fund costs are hurting investors

By Pauline Skypala

The easiest way to make money is to take it from other people: that is what the financial services industry does, and for proof of its efficacy look no further than the results last week of UK fund platform provider Hargreaves Lansdown. It reported a 28 per cent rise in pre-tax profits over the year to the end of June, and an impressive profit margin of 65.8 per cent. The company’s two founders are now billionaires, and shareholders have done well too, with the shares up more than 400 per cent over five years. They have prospered by sharing in the growth of customers’ assets. Read more of this post

DeVry Lures Medical School Rejects as Taxpayers Fund Debt

DeVry Lures Medical School Rejects as Taxpayers Fund Debt

When he was a child, David Adams pretended to operate on his stuffed animals. As a teen, the Salt Lake City native became a paramedic. He wanted to train to become a physician after graduating from the University of Utah with a bachelor’s degree in health promotion and education in 2009 but was rejected by two dozen U.S. medical schools. Three years later, he earned a Master of Science in medical health sciences from Touro University Nevada and applied again, Bloomberg Markets will report in its October issue. Adams was accepted to American University of the Caribbean School of Medicine, which is owned by Downers Grove, Illinois-based DeVry Inc. (DV) Read more of this post

Canada’s public retirement funds are moving into dealmaking and taking on more risk

September 9, 2013 7:48 pm

Pension plans: Flying solo

By Anne-Sylvaine Chassany

Canada’s public retirement funds are moving into dealmaking and taking on more risk

Hunting for a bargain: following years of low interest rates that have dented their returns, Canadian pension funds are seeking to cut back on the fees they pay private equity firms  In October 2010, London-based private equity group BC Partners found itself in abidding war over Vue, the UK’s second-largest cinema operator. Its rivals included an assortment of buyout firms but one of the bidders stood out: a Canadian pension fund. In the end, neither BC Partners nor the Ontario Municipal Employees Retirement System (Omers) won the auction. But the bid whetted the Canadians’ appetite. Read more of this post

BlackRock to JPMorgan See Deeper Emerging-Market Bond Losses; “We’re not yet convinced that we’ve seen the worst in terms of flows out of emerging markets”

BlackRock to JPMorgan See Deeper Emerging-Market Losses

Wall Street’s biggest firms are predicting intensifying bond losses in emerging markets, where borrowing costs have already soared to the highest in more than four years versus U.S. corporate debt, as the Federal Reserve considers curtailing record stimulus. “We’re not yet convinced that we’ve seen the worst in terms of flows out of emerging markets,” Jeffrey Rosenberg, the chief investment strategist in fixed-income at New York-based BlackRock Inc. (BLK), the world’s largest asset manager, said in a telephone interview, expressing his own views. “We see a lot of valuation change but we see the potential for even more valuation change.” Read more of this post

Battle-weary policy makers do not want to believe that an emerging market crisis is possible. But there are striking resemblances now to the economic troubles these countries suffered in the 1990s

Sept. 9, 2013, 6:31 a.m. EDT

No country is safe from emerging market meltdown

Commentary: Repeat of 1990s debt crisis would threaten global growth

By Satyajit Das

SYDNEY (MarketWatch) — Battle-weary policy makers do not want to believe that an emerging market crisis is possible. But there are striking resemblances now to the economic troubles these countries suffered in the 1990s. Then, loose monetary policies pursued by the Federal Reserve and the Bank of Japan brought large capital inflows into emerging markets, especially Asia. In 1994, Federal Reserve Chairman Alan Greenspan withdrew liquidity, resulting in a doubling of U.S. interest rates over 12 months. In the 1994 ‘Great Bond Massacre’, holders of Treasury bonds suffered losses of around $600 billion. Trading losses led to the bankruptcy of Orange County in California, the effective closure of Kidder Peabody and failures of many investment funds. Read more of this post

Nissan-Beijing Traffic System to Help Ease World’s Worst Commute

Nissan-Beijing Traffic System to Help Ease World’s Worst Commute

Beijing, once voted the city with the world’s most onerous commute, is getting help from an automaker to ease its traffic jams.

Nissan Motor Co. (7201) jointly developed a real-time traffic information system with the Chinese capital that provides motorists the fastest route to their destinations, based on road conditions provided by the city’s traffic information center. The suggested shortcuts are delivered through a dashboard-mounted device similar to a global positioning system. Read more of this post

Thailand to Scrap Luxury-Goods Tax to Lure Travelers From China

Thailand to Scrap Luxury-Goods Tax to Lure Travelers From China

Thailand’s government said it will scrap import duties on luxury watches, clothes and cosmetics to help the country compete with Hong Kong and Singapore for wealthy travelers from markets including China. The duty on some luxury goods will be cut to zero from 30 percent by the end of the year, Permanent Secretary for Finance Areepong Bhoocha-Oom told reporters in Chonburi province. Read more of this post

GE to IBM Ending Retiree Health Plans in Historic Shift

GE to IBM Ending Retiree Health Plans in Historic Shift

America’s biggest employers, from GE to IBM (IBM), are increasingly moving retirees to insurance exchanges where they select their own health plans, an historic shift that could push more costs onto U.S. taxpayers. Time Warner Cable Inc. (TWC) yesterday said it would steer retired workers toward a privately run exchange, days after a similar announcement by International Business Machines Corp. General Electric Co. (GE) last year said it, too, would curb benefits in a move that may send some former employees to the public insurance exchanges created under the 2010 Affordable Care Act. Read more of this post

Secret Swiss Accounts Said No Longer Safe for Tax Dodging

Secret Swiss Accounts Said No Longer Safe for Tax Dodging

Taxpayers who still believe they can hide secret Swiss bank accounts from the Internal Revenue Service are “beyond foolish,” the top U.S. tax prosecutor said as a five-year crackdown expands to new offshore havens. The enforcement drive has forced a “remarkable” change in the ability of the U.S. to find secret accounts in Switzerland, the world’s largest offshore financial center with about $2.2 trillion of assets, said Kathryn Keneally, assistant attorney general in the Justice Department’s tax division. Read more of this post

Sequoia Capital Pulls Back From South America

SEPTEMBER 6, 2013, 10:15 AM

Sequoia Capital Pulls Back From South America

By VINOD SREEHARSHA

SÂO PAULO, Brazil — Sequoia Capital has decided to manage its activities in South America from its headquarters in California after its lone partner here, David Velez, left to start his own venture, people with direct knowledge of the firm’s plans said. The move, which these people said had been in the works for several months, shows the difficulty the Silicon Valley venture capital firm has faced in finding attractive investments in the region, even as start-ups have proliferated in recent years. Read more of this post

China’s Credit Levels Echo U.S. Crisis; Quick Jump in Country’s Debt is Reminiscent of Previous Meltdowns

September 8, 2013, 6:53 p.m. ET

China’s Credit Levels Echo U.S. Crisis

Quick Jump in Country’s Debt is Reminiscent of Previous Meltdowns

ALEX FRANGOS

Investors have made billions betting against economies in which debt is rising and home prices are soaring. They have had particular success targeting the banks that fund these booms. Right now, their target is China. Some compare China to the U.S. in 2007. Others cite Japan before the 1989 real-estate bust. China bulls acknowledge the risks but say the government has the money and expertise to defuse the problems. Until recently, the bears were winning the tug-of-war, pushing down the prices of Chinese banks until they were the cheapest of any major economy based on price-to-book value, a measure for how investors rate the quality of a bank’s assets. But recently, the Chinese economy and markets have perked up. Chinese banks, reflected in the Hang Seng H Financial Index, have rallied 17% since July 3, even as they warned of rising bad debts and said they would likely have to raise capital. Read more of this post

Chinese Zombies Emerging After Years of Solar Subsidies

Chinese Zombies Emerging After Years of Solar Subsidies

Only five solar-power vendors remain in a space built for 170 at a sprawling complex of offices stacked three stories high outside Xinyu city in China’s southeast. Locked doors and empty offices are what’s left of the government’s audacious plan to dominate the global solar industry. What happened in Xinyu is being replicated across China, which used subsidies and $47.5 billion of credit to wrest supremacy from Germany, Japan and the U.S., saddling an industry with losses for at least two years. Read more of this post

Goldman believes China’s credit losses could reach up $3 trillion; “If you went to a meeting with Bank of China today and mentioned NPLs, they would stare at you blankly and refer you to someone senior.”

Updated: Monday September 9, 2013 MYT 7:29:22 AM

China Locks Foreign Investors Out Of Another Bad-Debt Cleanup

HONG KONG: Chinese banks have a colossal mess of bad debts to clean up for the second time in as many decades, but they are unlikely to call in the financial world’s most efficient mop and broom. Read more of this post

U.S. firms’ enthusiasm for China cools as political, economic uncertainty deepens

U.S. firms’ enthusiasm for China cools as political, economic uncertainty deepens

By Simon Denyer, Published: September 6

BEIJING — American companies’ enthusiasm for investing in China has been dampened by a combination of policy uncertainty, an economic slowdown and narrowing profit margins, the head of the U.S.-China Business Council said Friday. Attacks on Western values and on foreign companies’ business practices this year have also unsettled some U.S. businesses operating in China, while barriers to foreign investment in many sectors of the economy remain substantial, escalating concerns about the extent to which the firms will be allowed to benefit from growth in the world’s second-largest economy. Read more of this post

Tycoon Wu Bing, who has an intertwined relationship with the country’s oil industry and Sichuan officialdom, has reportedly been detained by authorities.

Wu Bing, tycoon with HK ties, believed to be in detention

Monday, 09 September, 2013, 12:00am

Keith Zhai and Joanna Chiu

Wu Bing, one of the richest men in Sichuan, has not been seen in public since May 22

Tycoon Wu Bing, who has an intertwined relationship with the country’s oil industry and Sichuan officialdom, has reportedly been detained by authorities. Wu Bing in an undated photoWu, who also goes by the name Li Ruochen and Wu Yongfu, is chairman of Hong Kong-registered Zhongxu Limited and the behind-the-scenes owner of various businesses, including Zhongxu Investment Corporation, a company based in Sichuan’s capital, Chengdu, registration documents show. Read more of this post

Those Big Fat Chinese Weddings

Those Big Fat Chinese Weddings

By Christina Larson September 06, 2013

“The shape of the bra cup is built into the dress,” says Chen Yaping, marketing director at Galatea Bridal Boutique in Beijing, pointing to a rack of well-endowed white wedding gowns. “It doesn’t matter how big you are.” Galatea, which takes its name from an ancient Greek myth, is one of numerous bridal shops launched recently in China’s capital, catering to a fast-growing bridal industry—estimated at $57 billion by the China Wedding Industry Development Report—that now mixes Western precedents and local characteristics. A display case within the store exhibits jeweled tiaras next to towering 9-inch, rhinestone-encrusted silver platform heels. Read more of this post

Oriental DreamWorks Rewrites Its China Production Strategy

Oriental DreamWorks Rewrites Its China Production Strategy

SEPTEMBER 6, 2013 | 08:43AM PT

Patrick Frater

Describing Oriental DreamWorks as a “Chinese content company,” the outfit’s head of production Joe Aguilar this week laid out a substantially expanded production mandate for the one-year old joint venture. Aguilar announced that Oriental DreamWorks now intends to be involved in animated TV production, live action films, live action TV – including reality formats, as well as mobile and Internet content. Read more of this post

China is developing helicopters with the ability to fly at speeds twice the current average, according the country’s major aircraft maker

China develops new generation of high-speed aircraft

Monday, September 9, 2013 – 11:36

Zhao Lei

China Daily/Asia News Network

CHINA – China is developing helicopters with the ability to fly at speeds twice the current average, according the country’s major aircraft maker. Lin Zuoming, chairman of Aviation Industry Corp of China, said the company is developing new-generation helicopters that can travel up to 500 kilometers an hour. “We have been keeping pace with other countries in the research and development of ultrafast helicopters,” he added. Read more of this post

China embraces ‘British Model’, ditching Mao for Edmund Burke

China embraces ‘British Model’, ditching Mao for Edmund Burke

David Cameron might be reassured to know that China’s Communist leadership is studying the long arc of British history with intense interest, even if Russia’s Vladimir Putin deems our small island to be of no account.

Professor Li said the 18th Century Irish philosopher Edmund Burke is now all the rage in Chinese universities, studied for his critique of violent revolution, and esteemed as the prophet of stability through timely but controlled change. Photo: Quirky China News / Rex Features

By Ambrose Evans-Pritchard

4:30PM BST 08 Sep 2013

“We want to learn from the British model,” said Daokui Li, a memberChina’s upper chamber or `House of Lords’ (CPPCC) and a professor at Beijing’s Tsinghua University. “Today’s leaders in China are looking carefully at the British style of political change over the last 400 years, analysing the difference with France,” he told me at the annual Ambrosetti gathering of world policy-makers at Villa d’Este on Lake Como. “England went through incredible changes: a war against the US; wars against France; wars against Germany twice, the rise and decline of empire; and universal suffrage. Yet society remained stable through all this turmoil, with the same institutions and political structure. We think the reason is respect for tradition, yet willingness to make changes when needed.” Read more of this post

Beijing must break with Confucius to stamp out corruption

Beijing must break with Confucius to stamp out corruption

Editorial

2013-09-08

Following the recent trial of former Chongqing Communist Party secretary and Politburo member Bo Xilai, Beijing has continued its latest anti-graft campaign with investigations into four top-level oil sector executives during this past week. The investigations have seen the removal of Jiang Jiemin as the head of the State-owned Assets Supervision and Administration Commission. Jiang has also been accused of corruption during his stint as chairman of China National Petroleum Corp (CNPC). Read more of this post

Behind China’s Spree Killers; A criminal psychologist explains why so many in China are resorting to senseless violence and what we can do about it

Behind China’s Spree Killers – Economic Observer Online

By Liu Jinsong (刘金松), Xie Liangbin (谢良兵), Chen Zhe (陈哲) and Li Haojie (李浩杰)

Issue 635 , Sept 2, 2013

On Aug 19, a man entered a bus in Anyang, Henan Province and started indiscriminately slashing passengers with a knife. Two were killed and 13 injured. Less than a week later the same thing happened in Chengdu, leaving another four dead and 11 injured.  June saw the deadliest of these random attacks when an arsonist set fire to a bus in Xiamen, leaving 47 dead. In recent years, senseless attacks like these on bystanders seem to have been increasing in frequency. The perpetrators in each case had their own motivations, but what do they all have in common? And what can society do to prevent these attacks? Read more of this post

A boom of emerging-market listings prompted the Australian SIC to publish a report warning investors that these companies frequently failed to implement good corporate governance; 760 of ASX’s 2184 listed entities had operations or assets in emerging markets

Michael Bleby Reporter

Chasing the dragon: oversubscribed 99wuxian IPO closes

Published 06 September 2013 08:25, Updated 06 September 2013 11:46

Ross Benson says 99wuxian’s IPO has attracted a strong response despite not being particularly large. Photo: Rob Homer

The backers of 99wuxian are celebrating after the Chinese provider of an online marketplace for smartphone users closed its initial public offering just two weeks into a planned four-week period it had allowed to raise $20 million. The oversubscribed offering of 40-cent Chess Depositary Interests (CDIs), which are expected to start trading on the ASX on October 8, gives the company a market capitalisation of just under $410 million. About half of the shares will go to funds and half to individual investors, 99wuxian chairman Ross Benson said. Read more of this post

As protest looms, Cambodia’s strongman Hun Sen faces restive, tech-savvy youth

As protest looms, Cambodia’s strongman Hun Sen faces restive, tech-savvy youth

Thu, Sep 5 2013

By Prak Chan Thul

PHNOM PENH (Reuters) – At the Bonna Business Center, a tiny Internet cafe near the opulent mansion of Cambodia’s long-ruling Prime Minister Hun Sen, coffee is served with a big lump of dissatisfaction. “They talk about seven percent economic growth,” says Ou Rithy, 27, who hosts weekly political discussions at the cafe with other young Cambodians. “But I’m still a poor man.” He blames Hun Sen’s ruling Cambodian People’s Party (CPP), which won a recent general election widely criticized as rigged but lost the nation’s heart and soul – its restive, tech-savvy and increasingly outspoken youth. Read more of this post

Unilever buys Maryanne Shearer’s T2, with annual sales of A$57 million, to expand tea presence

Unilever buys Maryanne Shearer’s T2 to expand tea presence

Published 09 September 2013 09:02

Sue Mitchell

T2’s Maryanne Shearer has sold her business to Unilever for an undisclosed sum.

She opened her first teashop on Brunswick Street in Melbourne’s funky Fitzroy in 1996 and made her name selling brews such as Sencha Quince, Liquorice Legs and Strawberries & Cream. Now Maryanne Shearer, the founder of Australia’s fastest-growing premium tea chain T2, has sold out to the world’s largest tea company, Unilever. The purchase price was not disclosed, but with annual sales around $57 million and a record of strong double digit sales growth, it’s fair to assume that Ms Shearer, 50, will be able to retire in comfort when she finally tires of tea. Read more of this post

How the Resources Race Is Institutionalizing Poverty

How the Resources Race Is Institutionalizing Poverty

By Tunggadewa Mattangkilang on 7:01 pm September 7, 2013.
Balikpapan/Jakarta. It is not only plantations but also oil and gas companies that threaten to turn parts of Papua into an industrial wasteland. American multinational ConocoPhillips announced that it was planning to restart exploration, including seismic testing, in the Warim block — located several hundred kilometers inland from Merauke, Papua — in the near future. Read more of this post

Thailand is Southeast Asia’s most prolific carmaker, streets ahead of nearest-rival Indonesia

Boom times for the ‘Detroit of Southeast Asia’

Published: 2013/09/09

BANGKOK: At a high-tech factory in the world’s fastest growing auto production hub, industrial robots and white-suited workers put the finishing touches to hundreds of cars rolling off the assembly line each day. It could be a scene from Toyota City or Detroit, but this is Thailand, a country better known for its beaches and rice paddies. With major carmakers hit by a global economic downturn, the Southeast Asian nation has emerged as a rare bright spot in recent years. Thailand’s auto production surged 70 per cent in 2012 from the previous year, to 2.48 million vehicles, according to the Paris-based International Organisation of Motor Vehicle Manufacturers. In contrast, China and India saw only single-digit gains. Read more of this post

Legoland owner to develop $90 million KidZania Singapore themepark

Legoland owner to develop KidZania Singapore

Sunday, September 8, 2013 – 09:30

Jasmine Ng

The Business Times

SINGAPORE – Malaysia’s Themed Attractions and Resorts – owner of Legoland and Sanrio Hello Kitty Town in the country – is launching its first overseas theme park, KidZania Singapore, to tap rising travel demand in the region. It has partnered Maybank, Discovery Networks Asia-Pacific, Yakult, Canon and The Soup Spoon to set up five establishments in KidZania – an indoor theme park where children can pretend to be surgeons, pilots, runway models, journalists, chefs, firemen and many other professions. Read more of this post