Soft touch FX regulation falls under harsh glare

Soft touch FX regulation falls under harsh glare

Fri, Mar 7 2014

By Jamie McGeever and Carmel Crimmins

LONDON (Reuters) – In July 2006, during lunch at an upmarket restaurant overlooking the sprawling Smithfield meat market in the City of London, Bank of England officials and senior bank dealers discussed evidence of potential manipulation of the foreign exchange market. People at the lunch said the attempts to move the market meant the process of establishing official prices – known as “fixing” – was becoming “increasingly fraught”. Read more of this post

South Africa’s rattletrap taxis move millions – and an economy

South Africa’s rattletrap taxis move millions – and an economy

8:14am EDT

By David Dolan

SOWETO, South Africa (Reuters) – Zakes Hadebe’s minibus taxi has nearly half a million kilometers on the clock, a broken speedometer and a fuel gauge he struggles to keep just above empty. Read more of this post

Beware the Market Whiplash of Geopolitics; Ukraine’s crisis illustrates the risks of short-term investing in many emerging markets

Beware the Market Whiplash of Geopolitics

By JEFF SOMMERMARCH 8, 2014

Investing is hard enough when you’re focused on fundamentals like earnings, debt loads and cash flow.

But when you add geopolitics and military skirmishes to the mix, it turns into something else entirely: gambling. And that’s usually treacherous, even if it’s occasionally extraordinarily rewarding. Read more of this post

When You Evaluate a Fund Manager, Look Beyond Results

When You Evaluate a Fund Manager, Look Beyond Results

By PAUL SULLIVANMARCH 7, 2014

THIS Sunday will be five years to the day since the low point for the Standard & Poor’s 500 stock-index during the Great Recession. Since bottoming out on March 9, 2009, at 676.53, the index has risen some 170 percent. Read more of this post

The once and future currency: A new book examines the world’s love-hate relationship with the dollar

The once and future currency: A new book examines the world’s love-hate relationship with the dollar

Mar 8th 2014 | From the print edition

“LUMPY, unpredictable, potentially large”: that was how Tim Geithner, then head of the New York Federal Reserve, described the need for dollars in emerging economies in the dark days of October 2008, according to transcripts of a Fed meeting released last month. To help smooth out those lumps, the Fed offered to “swap” currencies with four favoured central banks, as far off as South Korea and Singapore. They could exchange their own money for dollars at the prevailing exchange rate (on condition that they later swap them back again at the same rate). Why did the Fed decide to reach so far beyond its shores? It worried that stress in a financially connected emerging economy could eventually hurt America. But Mr Geithner also hinted at another motive. “The privilege of being the reserve currency of the world comes with some burdens,” he said. Read more of this post

The brains of the party: As the task of governing China has become more complex, so too has the question of how ideas filter to the top

Chinese politics

The brains of the party

Mar 10th 2014, 2:34 by G.E. | BEIJING

FEW people have heard of the journalInternal Reference of Ideology and Theory. It is published in such secrecy by the Central Party School in Beijing that only several dozen people read it. They just happen to be the most powerful people in China. Nicknamed the “express train”, it is one of a few vehicles trusted to carry ideas directly to the desks of President Xi Jinping and his colleagues on the Politburo. Read more of this post

Barely Stearns in China

Barely Stearns in China

David Keohane | Mar 10 08:06 | 1 comment | Share

A Texas sharpshooter and a China analyst walk into a bar…

Last week’s default of little Chaori 11, China’s first onshore corporate default, brought with it some analyst hyperbole which has been rightly called out. Leaving aside for a moment this was BofAML’s second Bear Stearns call this year, their point was that Chaori 11 would be the moment that the market started to seriously re-assess financial risk in China. So far, not so much. Read more of this post

Wanxiang chairman builds empire spanning various sectors

Wanxiang chairman builds empire spanning various sectors

Staff Reporter

2014-03-10

Wanxiang Group founder and chairman Lu Guanqiu in Beijing, November 24, 2013. (Photo/Xinhua)

Wanxing Group, China’s leading auto parts maker, recently returned to the public spotlight in a high profile manner after finalizing an overseas deal in February, according to Guangzhou’s Time Weekly. Read more of this post

It takes $290,000 in cash to rent an apartment in Seoul

It takes $290,000 in cash to rent an apartment in Seoul

By Matt Phillips @MatthewPhillips 5 hours ago

Many Koreans who rent apartments don’t actually pay rent.

You read that right. They don’t make monthly rent payments.

Don’t start planning your move to Seoul just yet. There’s a catch. To get one of those apartments, on average, you need to plunk down the equivalent of almost $300,000. Read more of this post

Flight MH370: Stolen passports shine light on Bangkok’s role as global haven for criminals

Flight MH370: Stolen passports shine light on Bangkok’s role as global haven for criminals
(03-10 20:04)

Thailand’s role as a hub for criminal networks using false documents is in the spotlight after two passengers on the missing Malaysia Airlines flight MH370 used passports stolen in the country, sparking fears of possible a terrorist attack.
(Pictured, policemen in Bangkok display 2 million methamphetamine pills seized in Lampang province in a 2012 seizure).  Read more of this post

Volvo-Geely’s Li Shufu: If international companies are to succeed in China, they must learn locally to prosper globally; Volvo, like other western car firms, has learned that you cannot just be present in China to succeed

If international companies are to succeed in China, they must learn locally to prosper globally

Volvo, like other western car firms, has learned that you cannot just be present in China to succeed

By Li Shufu

9:00PM GMT 09 Mar 2014

When the global auto industry gathered in Geneva last week to show off its latest products for 2014, the impact of China on sales, output and profitability was a common theme. Read more of this post

Snack-maker Graze.com, which manufactures and delivers letterbox-sized parcels of healthy snacks to subscribers, has reported “unprecedented” growth in the US, traditionally the graveyard for small British firms

Snack maker Graze.com smashes US targets

Snack-maker Graze.com, which manufactures and delivers letterbox-sized parcels of healthy snacks to subscribers, has reported “unprecedented” growth in the US, traditionally the graveyard for small British firms.

Graze.com now boasts more than 100,000 subscribers across the US.

By Rebecca Burn-Callander, Enterprise Editor

7:00AM GMT 10 Mar 2014

Graze.com launched into the American market in December last year. Within a week, the company had signed up 30,000 subscribers across 48 states. Three months on, the company has smashed its first quarter targets, with 100,000 customers signed up. Read more of this post

SK’s global projects adrift with boss jailed

2014-03-09 18:18

SK’s global projects adrift with boss jailed

Na Jeong-ju

Just a decade ago, SK Group’s major revenue sources were limited to domestic telecommunications, energy and construction markets. Read more of this post

The degradation of the outside director system is all the more lamentable, when considering that the nation introduced it in 1998 in the aftermath of the Asian financial crisis to check wayward chaebol and its top managers

2014-03-10 17:04

Watchdog or lapdog?

When Tongyang Group committed a series of managerial mistakes and wrongdoings in 2012, few of its outside directors tried to oust its chairman, Hyun Jae-hyun. Most of them helped to keep the problems secret or lobbied to defend Korea’s 38th-largest conglomerate and its owner. Had they fulfilled their duty to follow proper checks and balances, some 50,000 individuals might not have seen their investments go up in smoke.  Read more of this post

High-yield bonds draw investors as emerging debt loses them; “As long as things are going OK, the (high-yield) market is OK, but there are big fat tail risks.”

High-yield bonds draw investors as emerging debt loses them

By Carolyn Cohn

LONDON (Reuters) – Shove over, emerging markets – high-yield debt has taken your place.

Emerging-market bonds, star performers just a year ago, are being replaced by high-yielding corporate debt from developed markets by investors searching for yield. Read more of this post

All’s Not Well as Coca-Cola Bottling Indonesia’s Water License Gets Tangled in Bureaucracy

All’s Not Well as Coca-Cola Bottling Indonesia’s Water License Gets Tangled in Bureaucracy

By Dion Bisara on 09:45 pm Mar 09, 2014

Jakarta. Even after operating in Indonesia for more than 20 years, a local unit of Australian soft-drink bottler Coca-Cola Amatil isn’t spared from the country’s notorious red tape — becoming instead a symbol of the bureaucratic hurdles that hold back foreigners from investing in this country. Read more of this post

Wison Engineering Says Chinese Police Arrested Billionaire Chairman

Wison Engineering Says Chinese Police Arrested Chairman

Chinese Company Says Hua Bangsong Arrested on Bribery Allegations

WAYNE MA

Updated March 10, 2014 3:37 a.m. ET

Hua Bangsong, founder and chairman of Wison Engineering Services at a news conference in Hong Kong in this Sept. 15, 2012, file photo. Reuters

BEIJING—Chinese police have arrested the founder and chairman of Chinese oil-engineering provider Wison Engineering Services Co. on allegations of bribery, the company said in a statement to the Hong Kong Stock Exchange. Read more of this post

China’s dangerous need for speed; Growth target risks being prelude to another credit binge

March 9, 2014 5:37 pm

China’s dangerous need for speed

Growth target risks being prelude to another credit binge

Since taking power last year, the new leadership in Beijing has insisted that it will place less emphasis on how fast China expands, and put a greater focus on the quality of its economic growth. Xi Jinping, president, and Li Keqiang, premier, have both stressed that China must reduce its addiction to cheap credit, lower its reliance on business investment and pay more attention to the quality of life of its citizens, for example by taking concrete steps to reduce pollution levels. Read more of this post

Britain needs a strategy to make the best use of its shrinking military capabilities. It isn’t getting one

Britain needs a strategy to make the best use of its shrinking military capabilities. It isn’t getting one

Mar 8th 2014 | From the print edition

WHAT kind of armed forces does Britain need? In a dangerous and unpredictable world, how should the country spend its shrinking defence budget? Worryingly, it has put off answering these questions—and time for thinking is short. The next 18 months could determine whether the country remains a global military power or settles for inexorable military decline and growing irrelevance to its French and American allies. Read more of this post

Nuclear power in Japan: Start ’em up; The government and voters are putting economics before atoms, opening the way for Japan to restart its nuclear power plants

Nuclear power in Japan: Start ’em up; The government and voters are putting economics before atoms, opening the way for Japan to restart its nuclear power plants

Mar 8th 2014 | TOKYO | From the print edition

JUST three years on from the catastrophic meltdown in March 2011 of three reactors at the Fukushima Dai-ichi plant, Japan is taking steps to revive its nuclear dream. A rush to restart some of the country’s 48 mothballed commercial nuclear reactors is well under way. Hundreds of technicians from utility firms are camped out in downmarket Tokyo hotels, working at the beck and call of the Nuclear Regulation Authority (NRA), the country’s new nuclear watchdog, in hopes of meeting new safety requirements. On February 25th the government published a draft energy plan which put nuclear power at the core. It is a sharp reversal of the previous energy strategy, devised by a former government in 2012, eventually to eliminate nuclear power altogether. Read more of this post

The smog of war: China’s prime minister opens parliament by declaring pollution the enemy

The smog of war: China’s prime minister opens parliament by declaring pollution the enemy

Mar 8th 2014 | BEIJING | From the print edition

THE annual session of China’s rubber-stamp parliament, the National People’s Congress, is rarely remarkable for the rhetorical flourishes of the leaders who address it. But at the opening on March 5th of this year’s nine-day meeting the prime minister, Li Keqiang, in his maiden speech, deviated at least a little from the usual stodgy fare. China, he said, must “declare war” on pollution. The blanket of smog that often shrouds much of the country, he said, was nature’s “red light”, warning about the risks of “blind development”. Growing public furore about pollution has at last goaded China’s leaders into admitting the urgency of the problem. Read more of this post

Infosys co-founder enters India politics with a bang as a candidate for the governing Congress party in Bangalore in the coming general election, a rare boost for a party whose popularity has collapsed after a decade in power

March 9, 2014 4:11 pm

Infosys co-founder enters India politics with a bang

By Victor Mallet in New Delhi

Nandan Nilekani, one of India’s best-known businessmen, will stand as a candidate for the governing Congress party in Bangalore in the coming general election, a rare boost for a party whose popularity has collapsed after a decade in power. Read more of this post

Currency Zone Defies Mainstream Economics Profession With Continued Controversial Policies

Why Euro-Zone Chiefs Buck the Trend

Currency Zone Defies Mainstream Economics Profession With Continued Controversial Policies

SIMON NIXON 

March 9, 2014 4:58 p.m. ET

The euro zone is used to being criticized by the mainstream economics profession.

Since the start of its debt crisis, the currency union has been attacked for imposing too much fiscal austerity, for failing to create jointly guaranteed euro-zone bonds and for refusing 
to directly recapitalize weak banks from common euro-zone funds. Read more of this post

Economists’ obsession over GDP gives the concept an unnecessary air of mystification

March 9, 2014 5:37 pm

‘GDP’, by Diane Coyle

Review by Samuel Brittan

Economists’ obsession over gross domestic product gives the concept an unnecessary air of mystification

GDP: A Brief but Affectionate History, by Diane Coyle, Princeton University Press, RRP$19.95/£13.95

What does an economist do? Ask this question in a normal gathering and one of the least offensive responses is that they obsess over gross domestic product. Yet the mere mention of GDP is enough to stir up a hornet’s nest of misunderstandings. To some it is a supreme goal of national policy; to others an obsession of a degenerate culture. In fact it is neither. Read more of this post

Drought, funding hurting Australia’s ‘food bowl to Asia’ dream

Drought, funding hurting Australia’s ‘food bowl to Asia’ dream

March 10, 2014 – 8:14AM

Australia’s lofty ambitions to become a “food bowl” for a rapidly growing middle-class in Asia are in danger of falling at the farm gate due to the country’s harsh, drought-prone climate and a lack of investment in agricultural innovation. Read more of this post

Car Makers Try to Make Bigger Profits on Smallest Models; Toyota, a brand known in most markets for solid, reliable cars, is taking a crack at humor in its campaign for the Aygo. The catchphrase: “Go fun yourself.”

Car Makers Try to Make Bigger Profits on Smallest Models

They Share Some Costs, Offer Customized Features

GILLES CASTONGUAY And DAVID PEARSON

Updated March 7, 2014 2:25 p.m. ET

Mini cars, such as the Renault Twingo, above, and the Toyota Aygo, were being showcased at the Geneva auto show the past week. The car makers are rolling out new versions but still trying to figure out how to make money on these vehicles, which often sell for less than $14,000. ITAR-TASS/Zuma Press Read more of this post

“When Does The Party End?”” – Goldman Finds Revenue Multiples Have Never Been Higher; the median company’s EV/sales ratio is now the highest in 35 years, surpassing even the dot com bubble

“When Does The Party End?”” – Goldman Finds Revenue Multiples Have Never Been Higher

Tyler Durden on 03/08/2014 13:23 -0400

With stocks rising to record high after record high, and with even Goldman’s clients now asking “When does the party end?” as noted by Goldman’s David Kostin overnight, the answer is simple: nothing has changed. Specifically, between the Fed’s ongoing monetization of tens of billions monthly in bonds, the missing piece to the equation is also a known one – corporate buybacks. In fact as Goldman admits, “February was the busiest month in our buyback desk’s history.” (which surely is Chinese walled off from Goldman’s prop trading desk). Why? Because as Reuters reported previously, this was the second-busiest week ever recorded for high-grade bond issuance. And with the use of proceeds certainly not going to capex, companies continue to buyback their shares in record amounts to mask the decline in actual cash earnings by lowering the amount of shares outstanding and thus keeping EPS rising or flat. Read more of this post

New Norm for Stock Investors: Performance Matters; Stocks Are No Longer Moving in Tandem With Broad Market

New Norm for Stock Investors: Performance Matters

Stocks Are No Longer Moving in Tandem With Broad Market

ALEXANDRA SCAGGS And DAN STRUMPF

March 9, 2014 1:49 p.m. ET

Stock pickers are starting to breathe a sigh of relief. Read more of this post

Caterpillar, Sany Heavy Take Digs at Each Other; Each Lays Claim to No. 1 Ranking in China, but It Depends How You Parse It

Caterpillar, Sany Heavy Take Digs at Each Other

Each Lays Claim to No. 1 Ranking in China, but It Depends How You Parse It

JAMES R. HAGERTY

March 7, 2014 2:57 p.m. ET

LAS VEGAS— Caterpillar Inc. CAT -0.56% reported progress in its long struggle to win a bigger slice of the Chinese market, the world’s biggest battleground for makers of construction equipment. Read more of this post