Worries of crash persist in Toronto’s condo alley

Worries of crash persist in Toronto’s condo alley

Ian Austen, The New York Times | 13/07/03 8:20 AM ET
Sandwiched between two rail lines in Toronto’s core, great factories once produced the finest Canada could offer the world: Magic baking powder, Brunswick bowling alley flooring and Massey Ferguson farm equipment.

What once was a no-brainer decision, locking in your mortgage rate for five years or even 10 years, now has a question mark attached to it. Read more

Those factories and many others here have been long abandoned or demolished, but the area is bustling. It is now called Liberty Village and it is packed with high-rise condominiums, largely built over the last five years, with many more still under construction. Read more of this post

Zhou Pulling China Punch Bowl Set to Shape Legacy as PBOC Chief

Zhou Pulling China Punch Bowl Set to Shape Legacy as PBOC Chief

Zhou Xiaochuan earned distinction as the G-20’s longest-serving central bank chief helping keep China out of a financial crisis the past decade. In the wake of June’s record liquidity squeeze, his legacy hangs in the balance.

Zhou and his colleagues at the People’s Bank of China left investors, bankers and market participants in the dark for four days after the overnight lending rate between banks hit a record 11.7 percent June 20 before releasing a week-old statement as the central bank’s first word on its objectives. Zhou himself kept mum until he reiterated a pledge to maintain market stability on June 28. Read more of this post

Tiger Moms Crave Diapers From Japan; Kao has a 30% market share in Japan compared with Unicharm’s 34%

July 3, 2013, 12:07 PM

Tiger Moms Crave Diapers From Japan

By Mayumi Negishi

Japan’s second-largest diaper maker is apparently struggling to meet surging demand from Tiger Moms.

Kao Corp.’s breathable Merries diapers have gained a reputation abroad for being good for a baby’s development, appealing to mothers who want to maximize the head start they give their children, Kao Chairman Motoki Ozaki said in a recent interview. Read more of this post

U.S. Prepares to Place Stricter Rules on 8 Biggest Banks

U.S. Prepares to Place Stricter Rules on 8 Biggest Banks

JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Goldman Sachs Group Inc. are among eight U.S. banks facing a new round of domestic rules on capital and debt that would be even stricter than global standards approved today.

Regulators will push banks to maintain a leverage ratio of capital to assets that exceeds the 3 percent minimum set by the Basel Committee on Banking Supervision, Federal Reserve Governor Daniel Tarullo said today, and the Federal Deposit Insurance Corp. said a proposal may be published next week. Another measure “in the next few months” would compel banks to hold a set amount of equity and long-term debt to help regulators dismantle failing lenders, Tarullo said. Read more of this post

Tata to Ambani Vie for First India Bank Permits in a Decade

Tata to Ambani Vie for First India Bank Permits in a Decade

Tata Sons Ltd., which manages India’s biggest business group, and firms controlled by billionaires Anil Ambani and Kumar Mangalam Birla are among 26 seeking the country’s first new banking licenses in more than a decade.

The companies yesterday met the Reserve Bank of India’s deadline to apply for the permits, it said in a statement published on its website. Read more of this post

Junk-Loan Rates Soar on Record 43% on Debt as Buyers Balk; Investors are demanding more in interest to fund the $550 billion market for leveraged loans

Junk-Loan Rates Soar on Record 43% on Debt as Buyers Balk

Junk-rated companies agreed to boost interest rates on more U.S. loans than any time since at least 2011, as lenders extracted more compensation with prices of the floating-rate debt tumbling from a six-year high.

Drug distributor Valeant Pharmaceuticals International Inc. (VRX) to toothbrush-maker Water Pik Inc. were among companies that sweetened terms on $17.7 billion of loans in June, accounting for 43 percent of total deals, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data. That’s 10 times greater than in May and the highest in data going back to January 2011. Twenty issuers failed to get loan financing, versus 22 for the first five months of the year, as the average price of the senior-ranking debt fell by the most since May 2012. Read more of this post

How Student Loans Subsidized the American Dream

How Student Loans Subsidized the American Dream

On July 1, the rate of a subsidized Stafford student loan doubled to 6.8 percent from 3.4 percent, after Congress shut down for the Independence Day holiday without taking action to prevent a scheduled increase. If lawmakers fail to reach a retroactive agreement before the August recess, the average Stafford borrower will have to pay back about $800 more than under the previous rate for every year of loans. Read more of this post

Cornell University Awash in Debt Chases Donors in ‘Pay-as-You-Go’ Expansion

Cornell Awash in Debt Chases Donors in ‘Pay-as-You-Go’ Expansion

David Skorton’s appointment as president of Cornell University seven years ago ushered in a $4 billion fundraising campaign, the school’s largest ever and first in more than a decade.

Skorton has since increased the goal to $4.75 billion and extended it four years to 2015. Now he’s preparing to kick-start a second effort to finance a $2 billion technology campus as the upstate New York Ivy League school expands on Roosevelt Island in Manhattan. Read more of this post

Numbers Go Missing From China Factory Report Without Explanation; China No Longer Making Up Numbers, Now Simply Deleting Them

China No Longer Making Up Numbers, Now Simply Deleting Them

Tyler Durden on 07/02/2013 08:18 -0400

For many years, the Chinese politburo (not to be confused with the US Department of Labor) had a simple solution to accusations that central planning doesn’t work: just make up the economic numbers. However, a few months ago China found itself in hot water when it became impossible to pretend its manipulated numbers were even remotely credible, driven by a massive discrepancy between China exports to Hong Kong and HK imports from China. The immediate result by China, and the PBOC, as it attempted to regain some credibility was an drastic and epic move to force capital reallocation, in the process nearly wiping out its banking sector when interbank lending rates exploded to over 25%. For now, China appears to have regained some control even if the ensuing CNY1 trillion deleveraging that is imminent is sure to lead to unprecedented pain for the country that is more addicted to credit creation than any other. But in the meantime, China has once again fallen bank to doing what it does best: manipulating economic data, in this case the recently announced PMI. Only this time there is a twist: instead of goalseeking reported data to comply with some artificial reality that Beijing approves of, now China is simply flat out refusing to report numbers, period!

Numbers Go Missing From China Factory Report Without Explanation

By Bloomberg News – Jul 1, 2013

An official report on China’s manufacturing in June omitted numbers for export orders, imports and inventories of finished goods, without any explanation for the gaps. Five of 12 sub-indexes usually released with the Purchasing Managers’ Index were absent from today’s releases from the National Bureau of Statistics and the China Federation of Logistics and Purchasing. The others were for backlogs of work and quantities of purchases. The statistics bureau didn’t immediately respond to e-mailed questions asking for comment. Read more of this post

Kevin Rudd is ditching the optimism of his predecessor and selling himself as the best leader to steer Australia through a downturn as Chinese demand wanes. Rudd’s language puts him more in tune with voters than the message of prosperity and employment growth emphasized by Gillard and former Treasurer Wayne Swan

Australia Recession Risk Flagged by Rudd in Rhetoric Shift

Kevin Rudd is ditching the optimism of his predecessor and selling himself as the best leader to steer Australia through a downturn as Chinese demand wanes.

The new prime minister, who ousted Julia Gillard last week as the ruling Labor party headed toward a landslide election loss, is channeling his ex-boss Ross Garnaut in flagging that the end of a China-led mining boom could lead to a recession. He’s highlighted the dangers posed by a slowing China in at least five statements and warned policies advocated by his opponent Tony Abbott would result in British-style contraction. Read more of this post

New Family Office Angst; the annual cost of running a $100 million family office is as high as 1% of assets, or $1 million. That’s four or five times more expensive than the cost of operating a larger shop of, say, $1 billion

July 1, 2013, 4:19 P.M. ET

New Family Office Angst

By Robert Milburn

According to Robert Casey, senior research director at the Family Wealth Alliance, the annual cost of running a $100 million family office is as high as 1% of assets, or $1 million. That’s four or five times more expensive than the cost of operating a larger shop of, say, $1 billion.

As Penta first noted two years ago, compliance costs associated with the Dodd-Frank financial legislation was forcing single and multifamily offices to merge. That’s what it has done. The market for single family offices seems to have reached the mature stage, with no asset growth since 2005, while the average assets of a multifamily office have grown threefold to $7.4 billion. Read more of this post

Myanmar’s religious violence threatens South-east Asia

Myanmar’s religious violence threatens South-east Asia

Renewed violence between Buddhists and Muslims in Myanmar appears to be spreading regionally. Since May, at least eight people have died in a series of retaliatory attacks by Muslims from Myanmar against Myanmar Buddhists in Kuala Lumpur, which has a community of Myanmar refugees and illegal workers.

9 HOURS 22 MIN AGO

Renewed violence between Buddhists and Muslims in Myanmar appears to be spreading regionally. Since May, at least eight people have died in a series of retaliatory attacks by Muslims from Myanmar against Myanmar Buddhists in Kuala Lumpur, which has a community of Myanmar refugees and illegal workers.

Concerns abound that the violence among Myanmar nationals in Malaysia may radicalise non-Myanmar Muslims, and this could lead to a vicious cycle of reprisals and counter-reprisals. Read more of this post

Private equity’s new fee trick

Private equity’s new fee trick

By Dan Primack July 1, 2013: 11:44 AM ET

Private equity fund fees don’t always cover what they are supposed to cover.

FORTUNE — Almost all private equity funds charge their investors an annual management fee, which is used to cover such overhead as salaries, office space and administrative functions. It’s usually around 2% on uncalled capital, and begins to ratchet down as the fund ages.

We can quibble on whether 2% is an appropriate percentage — particularly when certain fund sizes become stratospheric — but it’s a fairly simple arrangement that both sides can easily understand before signing on the dotted line. Unfortunately, however, some private equity firms are beginning to violate the spirit of these agreements, by outsourcing certain activities and applying the charges on top of the baseline management fee. Read more of this post

New Chinese law: Visit your parents

New Chinese law: Visit your parents

By Meng Meng and Katie Hunt, for CNN

July 2, 2013 — Updated 1036 GMT (1836 HKT)

Hong Kong (CNN) — Lola Wang, a 28-year-old marketing officer in Shanghai, makes a six-hour trip to Shandong to see her parents twice a year — once during the Lunar New Year and again during the National Day holiday in October.

“I feel like I should visit my parents more but having a job in the financial industry means I have to work long hours and sacrifice some of my personal time for work,” Wang, an only child, tells CNN. Read more of this post

Loosening of real estate-related companies’ financing are unfounded and the relevant regulatory bodies are deeply dissatisfied with this incident

Loosening of real estate-related companies’ financing are unfounded

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more media reports emerged that the news on re-commencing real estate-related companies refinancing policies were unfounded, and the relevant regulatory bodies are deeply dissatisfied with this incident JRJ reported from media reports claiming that listed companies with a real estate business may have their financing channels conditionally loosened, and reportedly this new policy was already approved by China SecuritiesRegulatory Commission (CSRC) chairman Xiao Gang. However, more media reports then emerged which denied that claim, and reported that the relevant regulatory bodies were deeply dissatisfied with this incident, and may conduct investigations into how such claims came to be. Previously, 21st Century Business Herald reported on various comments made by a high-level management of a listed company with real estate business,who said that for refinancing and restructuring policies for listed companieswith real estate businesses had shown some signs of loosening. According to him, after liaising with relevant officials from SCRC, he discovered that previously when a real-estate related company wishes to restructure andchange its business into other industries/sectors, it must first be stripped of allreal estate development business before the application for businessrestructuring can even be submitted, but under the new policies applications can be made even if the company hadn’t yet completely stripped of its real estate business. Another point of focus is that, once these restructuring guidelines arecompleted, length of restructuring applications will be significantly shortened from at least a few months to only one to two months. In addition, the management personnel was quoted saying that he found a case where a listed developer had obtained approval for restructuring into another industry/sectorwithout first stripping itself away from its real estate development business. Read more of this post

Likonomics: what’s not to like. Likonomics stands for: No stimulus, Deleveraging, Structural reform

Stimulus v reform in China

Likonomics: what’s not to like

Jul 1st 2013, 9:52 by S.C. | HONG KONG

JAPAN is still enjoying the effects of Abenomics, a campaign to reflate the economy named after Shinzo Abe, the prime minister. (The campaign stopped consumer prices, excluding fresh food, falling in the year to May.) China, on the other hand, is now enduring the effects of something called “Likonomics”. Pronounced lee-conomics, the term has nothing to do with Facebook’s economy of endorsements. It refers instead to the emerging doctrine of Li Keqiang, China’s prime minister, who has overseen the country’s economy since March. The term was coined on June 27th by three economists at Barclays Capital: Yiping Huang, Jian Chang and Joey Chew. Like the three “arrows” of Abenomics, Mr Li’s strategy comprises three parts, they argue. Unlike the arrows of Abenomics, however, all of them hurt. Read more of this post

Assam’s planters are responsible for more than 11% of the world’s total tea production

More people are drinking tea, but the world’s No. 2 producer is reeling

By Devjyot Ghoshal 2 hours ago

Devjyot Ghoshal is a former Southeast Asia correspondent for Business Standard. He will attend Columbia University’s journalism school as a Fulbright scholar this fall.

KOLKATA, India—Headlines about India in recent days have focused on heavy rains and a rescue mission in Uttarakhand, a northern province straddling the Himalayas. It rained 275% above normal levels last month, initially marooning more than 100,000 people and killing hundreds. Read more of this post

K-pop vs. democracy: Hong Kongers vote with their feet at annual protest rally. “We like K-pop, but we don’t like the government. Coming here is more meaningful”

K-pop vs. democracy: Hong Kongers vote with their feet at annual protest rally

By Doug Meigs 7 hours ago

Hong Kong youths faced a dilemma yesterday: join an annual rally for democracy in the middle of a typhoon, attend a K-pop concert funded by property developers, or just stay home.

The choice was simple for three soaked and giggling 16-year-old girls. “We like K-pop, but we don’t like the government. Coming here is more meaningful,” said Mimi. Her friends Holly and Eliza, huddled under umbrellas, nodded their approval. They joined throngs trudging from Victoria Park to Central District in the rain. Organizers estimated attendance at 430,000; police estimated the tally at 66,000. Read more of this post

World Bank President: No country safe from social upheaval

No country safe from social upheaval: Kim

World Bank chief says recent waves of global turmoil signal need for more risk-taking if war on poverty and inequality to succeed

BY JEREMY TORDJMAN

AFP-JIJI, JUL 1, 2013

WASHINGTON – No country in the world is immune from unrest arising from poverty and inequality, according to World Bank President Jim Yong Kim. The protests in Brazil, Turkey, and elsewhere show that even governments that have made significant efforts already cannot let up in programs to help the poor, the doctor said in an interview. “There’s no country in the world that is immune from having this kind of citizen’s movement rise up to demand even more,” he said. “It shows that the power of civil society and the power of citizens to rise up is unlike anything we’ve seen in history. Read more of this post

For financial geeks, a do-it-yourself hedge fund site: Quantopia

For financial geeks, a do-it-yourself hedge fund site

Tim McLaughlin, Reuters | 13/07/01 4:37 PM ET
BOSTON — In the secretive world of hedge funds, algorithms are not shared because they provide the juice behind market-beating returns, and are a key reason why hedge funds charge their clients “two and twenty” – an annual fee equivalent to 2% of assets, plus 20% of gains.

Now startup company Quantopian offers a tantalizing proposition for software and financial geeks who want to trade like a hedge fund manager — but don’t want to pay those steep fees. The Boston-based firm is bringing together a community of people who build algorithms used for trading stocks. Read more of this post

The Spanish government has approved a plan to sell a quarter of its state-owned properties in an attempt to raise hundreds of millions and fill the government’s empty coffers

Spain’s property sale of the century

July 2, 2013 – 2:01PM

Fiona Govan

The Spanish government has approved a plan to sell a quarter of its state-owned properties in an attempt to raise hundreds of millions and fill the government’s empty coffers. Some 15,000 properties, from office buildings to agricultural land, will be put up for sale over the next seven years. The measure is the latest in a series of moves to bring Spain’s budget deficit to within the EU target of 3 per cent by 2016 from 7.1 per cent of GDP last year. Read more of this post

Loan Practices of China’s Banks Raising Concern

July 1, 2013

Loan Practices of China’s Banks Raising Concern

By DAVID BARBOZA

SHANGHAI — Text message solicitations began arriving on the mobile phones of many of China’s wealthy last month, promising access to lucrative wealth management products with yields far above the government’s benchmark savings rate.

One message read: “China Merchants Bank will issue a high interest financing product starting from June 28th to 30th. The product will be 90 days with a 5.5% interest rate. Please call us now.” Read more of this post

As Bond Market Tumbles, Pimco Seeks to Reassure Investors

JULY 1, 2013, 2:30 PM

As Bond Market Tumbles, Pimco Seeks to Reassure Investors

By NATHANIEL POPPER

As investors prepare for a long-term shift in interest rates, few large financial firms are as vulnerable as the giant money manager Pimco.

Over the last 30 years, the company has been one of the biggest beneficiaries of steadily falling interest rates, which have made bonds, and Pimco’s trademark bond mutual funds, into star investments. The environment propelled Pimco’s transformation into the fifth-largest asset manager in the world, landed it in many retirement plans and gave its leader, William H. Gross, an aura of invincibility. Read more of this post

Singapore’s Clean Image Sullied by Indonesian Smog; If the smog becomes an annual crisis, some multinational companies may consider relocating offices, key operations and expatriate families out of Singapore

Singapore’s Clean Image Sullied by Indonesian Smog

By Martin Abbugao on 4:17 pm July 1, 2013.
Singapore. Singapore’s clean and green reputation has taken a hit from Indonesian forest fires and its standing as a corporate and expatriate haven could be hurt if the smog becomes an annual scourge, analysts warn.

Singapore has long been a destination of choice for thousands of foreign companies and expat families drawn by its gleaming infrastructure, topnotch healthcare and education, and lush green environs that offer a high quality of living. Read more of this post

Sixteen years after the baht’s devaluation on July 2, 1997, Thailand appears to have regained its footing. Yet ample risks to economic and financial stability remain because of the volatility of capital flows and a deteriorating trade account

Kingdom a long way from 1997, yet more shocks may loom

Thanong Khanthong
The Nation July 2, 2013 1:00 am

Sixteen years after the baht’s devaluation on July 2, 1997, Thailand appears to have regained its footing. Yet ample risks to economic and financial stability remain because of the volatility of capital flows and a deteriorating trade account.

Over the past three or four months, Thailand has lost a chunk of its foreign-exchange reserves in a hurry. According to the Bank of Thailand’s website, as of June 21, the central bank’s forex reserves stood at US$172.6 billion (Bt5.348 trillion) – down $10 billion from February’s $182 billion. Read more of this post

Indonesia’s bakery industry is expected to witness unparalleled growth in the next few years as middle-class professionals embrace a more Western, urban lifestyle

BAKERIES FLOURISH AS MIDDLE CLASSES ADOPT NEW LIFESTYLE

Nurfika Osman, The Jakarta Post, Jakarta | Business | Mon, July 01 2013, 11:57 AM

Indonesia’s bakery industry is expected to witness unparalleled growth in the next few years as middle-class professionals embrace a more Western, urban lifestyle.

Young professionals are gradually changing their eating habits by including in their menus wheat-based products, such as bread, croissants, donuts, brioches, pies, quiches, muffins and cupcakes. Read more of this post

Golden Era Fades for China’s Banks as Crunch Raises Default Risk

Golden Era Fades for China’s Banks as Crunch Raises Default Risk

Chinese banks’ valuations are close to their lowest on record as the nation’s interbank funding crisis exacerbated investors’ concern that earnings growth will stall and defaults may surge as the economy slows.

Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, ended Hong Kong trading last week at 5.3 times estimated earnings, data compiled by Bloomberg show. The Beijing-based bank may report profit of $41 billion for 2013, according to the average of 17 analysts’ estimates. Wells Fargo & Co. (WFC), with net income forecast at $20 billion, trades at 11 times earnings. Read more of this post