financializer news A weblog highlighting financial topics making news in the international media.

White House: Obama and Ryan planned a private lunch following a joint meeting with Senate Majority Leader Mitch McConnell, whose focus this year is largely on protecting vulnerable Republicans and keeping the Senate in GOP hands come November, according to MSNBC. As Ryan swept into the speakership in October, the White House was cautiously optimistic that the policy-minded Republican, given a powerful mandate by his unruly caucus, might be able to work with Obama in 2016 on a narrow set of issues with some bipartisan overlap. Obama meeting with House Speaker Paul Ryan on Tuesday is his first since the Wisconsin Republican took the helm more than three months ago, the long delay illustrating the lack of urgency for Obama in engaging with a Congress clearly resolved to wait him out. Although Obama has scaled back his legislative ambitions from the sweeping proposals he pushed earlier in his presidency, he still needs Congress to help finish what he started in certain areas — trade being chief among them. Just as Ryan and McConnell were heading to the White House, the Republicans and Democrats running to replace Obama were shuttling from Iowa to New Hampshire for the next step in a presidential primary that now the dominant force in the political conversation. But with campaign season in full bloom, enticing Republicans to work with Obama on much of anything is becoming an increasingly arduous task, especially as many lawmakers facing competitive primaries seek to avoid votes that conservative challengers could use against them. (news.financializer.com). As reported in the news.

Roy Hodgson: Related:Euro 2016: England cross Channel with hope but expectations tempered The manager and his assistants, Ray Lewington and Gary Neville, have identified their preferred opponents for the May fixtures, with the Socceroos probably joined by two European teams, according to The Guardian. Portugal are likely to be one of them. The Football Association is finalising plans to take one friendly fixture to the north-east of England and another to the north-west at the request of Roy Hodgson, who wishes to recreate a tournament feel. The FA is expected to confirm all three opponents and venues later this month but the final friendly before the tournament in France is set to take place at Wembley. Australian media say this year match will be on 27 May. England have not played Australia since the friendly at Upton Park in 2003, when the Socceroos beat Sven-Goran Eriksson side 3-1. (news.financializer.com). As reported in the news.

Falling oil prices: Oil prices extended losses Tuesday as Russia crude output reached record high, according to Xinhua China. Russia oil output climbed 1.5 percent in January, reaching a post-Soviet high level, according to the data from Russian Energy Ministry. With no major data came out of the country, U.S. investors focused on the oil market. Falling oil prices triggered market appetite for safe-haven assets. The dollar index, which measures the greenback against six major peers,was down 0.11 percent at 98.903 in late trading. The greenback fell 0.8 percent against the yen on Tuesday. (news.financializer.com). As reported in the news.

margin debt: Margin trading, where investors borrow money from a broker to buy stocks, fuelled growth in China stock market and raised concerns that margin debt has created a bubble, according to Xinhua China. Traders have been taking advantage of lower borrowing costs after the central bank cut interest rates. The total margin trading balance on the Shanghai and Shenzhen bourses stood at 899.6 billion yuan on Monday, with the margin lending balancing at 897.6 billion yuan and security lending at 2 billion yuan. This high-risk but lucrative investment practice was favored by Chinese investors during the stock market frenzy last summer, with the balance peaking at over 2 trillion yuan in mid-June 2015. With the stock market plunging in July and August, the margin trading balance decreased to slightly above 900 billion yuan in September 2015, before increasing again to 1.17 trillion yuan by the end of December of 2015 as the market recovered. To contain the risk in a highly-leveraged stock market, the securities regulator decided to cap the size of margin trading and short selling for the first time, at four times a brokerage net capital, the same month the market peaked. (news.financializer.com). As reported in the news.

New York Mercantile Exchange: The S&P 500 tumbled 36.35 points, or 1.87 percent, to 1,903.03, according to Xinhua China. The Nasdaq Composite Index shed 103.42 points, or 2.24 percent, to 4,516.95. The Dow Jones Industrial Average slid 295.64 points, or 1.80 percent, to 16,153.54. Oil prices continued to plunge Tuesday, with the U.S. oil settling below 30 U.S. dollars a barrel again, as hopes for a deal between OPEC and Russia on output cuts faded away. With no major economic data due out Tuesday, quarterly results from big companies were in focus. The West Texas Intermediate for March delivery moved down 1.74 dollars to settle at 29.88 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April delivery decreased 1.52 dollars to close at 32.72 dollars a barrel on the London ICE Futures Exchange. (news.financializer.com). As reported in the news.

Georgian England: Some 250 years ago, Georgian England was the richest society that had ever existed, and yet food shortages still afflicted large segments of the population, according to Market Watch. Adolescents sent to sea by the Marine Society to be officers’ servants were half a foot shorter than the sons of the gentry. From the dawn of agriculture until well into the Industrial Age, the common human condition was what nutritionists and public-health experts would describe as severe and damaging nutritional biomedical stress. A century of economic growth later, the working class in the United States was still spending 40 cents of every extra dollar earned on more calories. In the U.S., roughly 1% of the labor force is able to grow enough food to supply the entire population with sufficient calories and essential nutrients, which are transported and distributed by another 1% of the labor force. Today, food scarcity is no longer a problem, at least in high-income countries. (news.financializer.com). As reported in the news.

current valuations: Don’t miss: Apple could offer investors shelter in a recessionary storm, according to Market Watch. Applying a stress test to their coverage universe, using worst-case, price-to-earnings valuations seen during the 2008-to-2009 recession, RBC analysts said they believe the shares of most companies could still fall another 50% or more from current levels. Based on current valuations, the prices of most stocks don’t appear to have factored in a recession scenario, hence the downside should we see a recession could be rather severe, RBC Capital Markets’ global equity team wrote in a research note to clients. The concern for RBC analysts stems from the recently volatility in the stock market, caused by macro weakness, softness in China and commodity market challenges. Fact Set Caption outside of wrapper for normal article images Nearly half of S&P 500 companies have now reported fourth-quarter results through Tuesday morning, and earnings-per-share is headed for a 5.8% decline on the year, according to Fact Set, compared with an estimated 5.7% decline as of Friday. On Monday, Deutsche Bank strategist David Bianco said the second-half of 2015 was clearly a profit recession for S&P 500 companies, and suggested it probably won’t be until the second half of this year that healthy growth returns. (news.financializer.com). As reported in the news.

real economic growth: The index is now on the way back to the same level from where it had once risen, according to Deutsche Welle. It mainly a psychological problem associated with the stock market, as the country is still posting relatively strong real economic growth. For many years, the economy had experienced double-digit growth and then suddenly - since June 2014 - there had been a bull run on the Shanghai stock exchange, with the benchmark index surging by around 150 percent within a short period of time. However, I see China facing major problems in this regard in 2016. But with growth slowing, do you believe the government is slowly losing its control on this front No, the control exercised by the government is not at risk. Economic data in China are mostly predetermined by the government. (news.financializer.com). As reported in the news.

stock market: Chief Executive Sergio Ermotti said volatile markets in early 2016, and the relative strength of the Swiss franc, meant it was too early to make revenue forecasts this year, according to Euro News. But he said the bank was sticking with its plan to invest more in its Chinese business and double its number of clients there, despite the country slowing economic growth and wild gyrations in its stock market. The Swiss bank shares fell 8 percent to hit their lowest in almost a year after it reported a fourth-quarter net new money outflow of 3.4 billion Swiss francs at its wealth management arm, as an exodus from emerging markets and Europe offset inflows from Asia and Switzerland. Clearly we have to manage these next few quarters of volatility in China but the trend remains intact, he told an analyst conference call. UBS has reshaped its strategy in the wake of the global financial crisis, slimming down its investment bank and focussing more on wealth management, which now accounts for in excess of 50 percent of its operating profit. Ermotti said the bank was keeping its general annual goal of 3-5 percent net new money at its wealth management business despite the fourth-quarter outflow. (news.financializer.com). As reported in the news.

pink diamond ring: Among gifts that Yucheng Chairman Ding Ning gave his president, Zhang Min, were a $20 million Singapore villa, a $1.8 million pink diamond ring, luxury limousines and watches and more than $83 million in cash, Xinhua stated, according to Euro News. The alleged scam underscores the risks in China fast growing and loosely regulated wealth management product industry, with many products peddled through online financial investment platforms and privately run exchanges. But executives at Ezubao parent company, Yucheng Group, now say it was a complete Ponzi scheme , which used investor funds to support a lavish lifestyle, the official Xinhua News Agency reported this week. Products promising annual returns of up to 14 percent have drawn in investors at a time when savings rates are low and property is no longer a guaranteed get-rich-quick bet. China P2P and the online finance industry also serve as a critical channel for the emerging small business and consumer market, which is often ignored by banks and mainstream financial institutions. iResearch predicts China unsecured consumer finance market alone will triple in size by 2019, reaching outstanding loans of over $1.7 trillion. A report on China stock market crash authored last year by former senior officials, including former central bank vice governor Wu Xiaoling, said Chinese retail investors are short-sighted, have a weak investment philosophy and a herd mentality. (news.financializer.com). As reported in the news.

: The All Ordinaries index rose by 0.75 of a per cent to close at 5,094, according to Australian Broadcasting Corporation. The ASX 200 index added 38 points to finish on 5,044. The gains were capped by some soft manufacturing data from China, with official figures showing factory activity last month shrank at its fastest pace in nearly three-and-a-half years. Bega Cheese was the biggest loser, shedding 10.5 per cent to $6.32 after announcing Coles supermarkets would change suppliers for its own brand of cheese when their current five-year contract ends early next year. Meanwhile the Australian dollar lost steam after the release of the Chinese manufacturing data. Adventure retailer Kathmandu went the other way, jumping 11.6 per cent to $1.54 after forecasting higher sales and profits for the first half of the year. (news.financializer.com). As reported in the news.

: Its economic design did much to move international travel within reach of middle-class vacationers rather than just the privileged few, according to CNN. However, the venerable Boeing 747 may be nearing the end of its production life -- its manufacturing rate is to be halved to six a year. But as the world first wide-body airliner, the Boeing 747 went on to change not only aviation but the entire tourism industry. A shift toward newer and more efficient aircraft that can land at smaller airports and a tendency to use former passenger planes for freight has reduced Boeing remaining 747 order book to just 20, after building more than 1,500 since 1969. It was a huge commercial risk that required borrowing some $2 billion from a banking consortium, the largest amount of money ever borrowed by any corporation at that time. Read More Revolutionizing mass air travel Boeing decision to develop a new, giant airliner bigger than those of its competitors in the mid 1960s was a bold move. (news.financializer.com). As reported in the news.

: Ezubao was the most spectacular player in a booming online investment industry that Chinese authorities have been struggling to regulate, according to The Toronto Star. Firms ranging from established Internet companies such as Alibaba to virtually unknown upstarts have flooded into the business, promising higher returns than those at state-run banks. State media outlets reported the arrests late Sunday and state broadcaster CCTV aired purported confessions from two former employees at Ezubao, an Anhui Province outfit that rose from obscurity to become China largest online financing platform in the span of about 18 months. Ezubao promised investors that borrowers on its platform would pay back loans at interest rates between 9 per cent and 14.6 per cent, but 95 per cent of those borrowers were fictional entities created by Ezubao, a former company executive told investigators. Police shut down the operation in December, prompting scores of protesters to gather in Beijing to demand their money back. The company advertised heavily online and bought expensive ad spots that aired just before the widely viewed nightly newscast on CCTV, the state broadcaster, former investors told The Associated Press. (news.financializer.com). As reported in the news.

Nasdaq: New York markets were narrowly mixed, with the Dow Jones industrial average losing 17.12 points to 16,449.18, while the S&P 500 declined 0.86 of a point to 1,939.38 and the Nasdaq added 6.42 points to 4,620.37, according to The Toronto Star. In commodities, the March contract for benchmark crude oil fell $2 to end trading at US$31.62 a barrel, while March natural gas plummeted 14.6 cents to US$2.152 per mm Btu and April gold rose $11.60 to US$1,128.00 a troy ounce. The Toronto Stock Exchange S&P/TSX composite index fell 147.76 points to end the day at 12,674.37, reversing direction on a big rally that closed out trading last week. Craig Fehr, Canadian market strategist at Edward Jones in St. Oil took another hit after a survey of Chinese purchasing managers showing the outlook for the country manufacturing industry fell to its lowest level in more than three years. Louis, said three related factors that drove driven market weakness in early January — sliding oil prices, volatility in Chinese and stumbling global growth — were all on display Monday. (news.financializer.com). As reported in the news.

statisticians: But the pessimists have a point, even if they sometimes overstate the January magic, according to The Guardian. According to statisticians at Reuters, this year started with Wall Street biggest first-week fall in more than a century, and the 8% monthly decline in the MSCI world index made January performance worse than 96% of the months on record. Although the data on investment returns in the United States actually show that January profits have historically been on only slightly better than the monthly norm, the widespread belief in a bullish January effect has made the weakness of stock markets around the world this year all the more shocking. So, just how worried about the world economy should we be Three fears now seem to be influencing market psychology: China, oil and the fear of a US or global recession. We saw this in the first four days of the year, when the sudden fall in the Chinese stock market triggered January global financial mayhem. China is surely a big enough problem to throw the world economy and equity markets off the rails for the rest of this decade. (news.financializer.com). As reported in the news.

St Thomas Developments: Everybody been wondering about the site, says Patrick Quigley, principal of St, according to The Toronto Star. Thomas Developments, which in 2014 acquired the highly coveted property that nearly every developer in Toronto has tried to buy. Except for its temporary automobile occupants while serving as a parking lot, the land has been a gaping hole in the heart of Toronto rapidly redeveloping downtown. His company, owned by a private Hong Kong-based firm, compelled the vendors with a straightforward offer, he says, and the deal closed quickly. E., a grand vision for the site, which Quigley reckons is one of downtown last full city block developments, is being revealed. And now, with this month launch of 88 Queen, a master-planned, multi-tower mixed-use community at 88 Queen St. (news.financializer.com). As reported in the news.

dispute settlement provisions: Labor trade spokeswoman Penny Wong told a caucus meeting in Canberra on Monday there were potential economic benefits, but the claims needed to be properly analysed, according to Nine News Australia. The opposition also holds concerns about investor-state dispute settlement provisions, which allow foreign investors to sue the government if their profits are affected by any Australian law or policy. The Trans-Pacific Partnership is set to be signed by Trade Minister Andrew Robb and other partner country ministers at a ceremony in Auckland on Thursday. The government says the TPP will eliminate over 98 per cent of tariffs in the TPP region, removing import taxes on about $9 billion of Australian trade. Senator Wong assured the caucus the agreement would be scrutinised by the parliament treaties committee. Industries including beef, dairy, sugar, horticulture, seafood, minerals, manufacturing and services are tipped to benefit. (news.financializer.com). As reported in the news.

Benoit Coeure: He backed the idea of creating a euro zone treasury, a step that would be unpopular by many euro zone states who want to protect their autonomy, according to Euro News. One element here will be to strengthen the euro area executive with a euro area treasury, be it within the Commission or as a separate body, he said. Benoit Coeure, who sits on the ECB Executive Board, called for a strong political commitment to complete Economic and Monetary Union so as to give the public, businesses and markets a strong signal that we are serious about making the euro a lasting success. Another element will be to build up a genuine legislative capacity at euro area level and to make institutions acting in the euro area interest, such as the European Stability Mechanism, accountable to it. Copyright 2016 Reuters. Coeure also argued that for Europe recovery to become structural, and thus to increase growth potential and reduce structural unemployment, monetary policy action is not enough on its own. euronews provides breaking news articles from Reuters as a service to its readers, but does not edit the articles it publishes. (news.financializer.com). As reported in the news.

Michael Darda: The three-month average of 48.20 is the lowest seen since the Great Recession ended in July 2009, according to Market Watch. The ISM index decline into contraction territory since October is even more worrisome for investors, considering the Federal Reserve started raising interest rates in December. The Institute of Supply Management manufacturing index for January inched up to 48.2 from 48.0 in December, but remained firmly in contraction territory—below 50.0—for a fourth-straight month. Fact Set Caption outside of wrapper for normal article images Michael Darda, chief economist and market strategist at MKM Partners, said there has only been five times in history, going back to 1948, that the Fed raised short-term interest rates when the ISM index was below 50. Fact Set Caption outside of wrapper for normal article images To reach that median decline, the S&P 500 SPX, -0.04% would have to tumble another 12% from current levels. In every case, the U.S. economy was in a recession within one to five months—with a median stock market decline of about 18% after the tightening, Darda wrote in a note to clients. (news.financializer.com). As reported in the news.

Chinese business model: Internet Plus is a new Chinese business model that applies information technology in more traditional industries, such as Internet+Retail, according to Global Times China. Though such a concept will take time to root in China dynamic economy, at a macro-economic level all the abandoned offices I visited reflect an interesting local trend. We spent several months seeking a suitable office space, visiting over 20 properties across the city, many of which had been recently vacated by Shanghai first wave of "Internet Plus" startups. Based on my conversations with real estate agents and property owners while perusing these ghost-offices , I was able to piece together clues about the demise of these failed startups. So a bunch of tech-savvy tuhao in Shanghai started selling themselves to venture capitalists, angel financiers and private investors, each boasting that they had the talent, the team and the technology. Internet Plus was one of last year biggest buzzwords on the Chinese interwebs, with success stories like Alibaba, Tencent and Baidu enticing millions of young entrepreneurs to team up with techies to get in early on the future of China surging IT economy. (news.financializer.com). As reported in the news.

state broadcaster: He has given us a decision that he is going to step down, FA vice-chairman Lars-Christer Olsson told state broadcaster SVT on Monday, according to Euro News. Hamren, who took over from Lars Lagerback in 2009, will take charge of the side when they open their Euro 2016 campaign against Ireland at Stade de France on June 13, before further Group E matches against Italy and Belgium. euronews provides breaking news articles from Reuters as a service to its readers, but does not edit the articles it publishes. Despite beating neighbours Denmark in a playoff to reach the finals, Hamren had been expected to quit after the tournament, with Sweden failing to make the 2014 World Cup and finishing third in their Euro qualifying group behind Austria and Russia. Copyright 2016 Reuters. (news.financializer.com). As reported in the news.

ECB: Overall, growth is low by historical standards, Mario Draghi told lawmakers in the European Parliament, according to Euro News. The ECB is willing to contribute its share to ensuring that the recovery remains firmly on track, he said, before listing risks that could undermine the economy. Growth prospects are slowly improving in advanced economies, but the outlook in emerging markets is more subdued. He said these risks were the global economic environment, the financial system situation, economic policies of euro zone member states and political uncertainty surrounding the European project . euronews provides breaking news articles from Reuters as a service to its readers, but does not edit the articles it publishes. Copyright 2016 Reuters. (news.financializer.com). As reported in the news.

: It then started to take a drastic nose dive, with the index falling to a low of 2,638.30 points in January, according to Global Times China. The Global Times talked to some stock investors about how the markets' slump has affected their lives and how they are dealing with it. The benchmark Shanghai Composite Index reached a multiyear high of 5,178.19 in June 2015. Some of the interviewees also said how they planned to make the most of the upcoming Chinese New Year holiday in a financially difficult time. It then started to take a drastic nose dive, with the index falling to a low of 2,638.30 points in January. The benchmark Shanghai Composite Index reached a multiyear high of 5,178.19 in June 2015. (news.financializer.com). As reported in the news.

NLD: The NLD victory in that ballot was widely expected, but its assumption of power by no means assured: The party won parliamentary elections held in 1990, but the military intervened and nullified the vote, according to The Japan Times. This time, however, the will of the people prevailed and the NLD now leads the parliament and will select the government that will take office in a few months’ time. On Monday, National League of Democracy representatives took their seats as the majority party in Myanmar National Assembly, a result of elections held two months ago. The outgoing administration has pledged to cooperate with the new government. The NLD lacks experience in governance and faces formidable national challenges. That may not be enough to guarantee a smooth transition, however, much less success. (news.financializer.com). As reported in the news.

Jim Crow: He spoke publicly in favor of rights for women of all races, according to CNN. He had the ear of President Abraham Lincoln but sometimes complained that Lincoln was moving too slowly on emancipation. Douglass rose to serve in several prominent positions in government, ran an abolitionist newspaper, fought Jim Crow laws and wrote three autobiographies that have become classics. He went on to call Lincoln the nation "greatest president." On Monday, the first day of Black History Month and more than a century after his death, Douglass was honored with the Google Doogle of the day. As the nation first black president time in office comes to a close, the issues of police treatment of African-American men and women, economic opportunity, the prison system, inclusion in K-12 schools and higher education, and even the Oscar nominations are increasingly subjects of discussion and debate. Today #Google Doodle honors the life and work of Frederick Douglass → https://t.co/3Ya7c8hODj #Black History Month Google February 1, 2016 Douglass' struggle still resonates. (news.financializer.com). As reported in the news.

China economy: A reading above 50 indicates expansion, while a reading below 50 reflects contraction, according to Xinhua China. The index, below the market forecast of 49.6, fell to its lowest level since August 2012, as China economy is seeking new growth engines amid a housing market slowdown and a campaign to cut industrial overcapacity. The purchasing managers' index came in at 49.4, down from December 49.7, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing. NBS statistician Zhao Qinghe attributed the retreat to slowing factory activity ahead of the Chinese New Year holidays in early February, as well as the trimming of industrial capacity. China stock market opened lower following the data release, with the benchmark Shanghai Composite Index down 0.24 percent at 2,730.98 points. The economic slowdown both at home and abroad also affected aggregate demand and foreign trade growth, Zhao explained. (news.financializer.com). As reported in the news.