Monthly Archives: November 2014

ECB Said to Expand Covered Bond Purchases From Spain to Germany

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“The European Central Bank bought Spanish covered bonds in a third day of asset purchases that has seen it acquire notes from Italy to Germany, according to people familiar with the matter.  The ECB is adding to French and Portuguese securities it bought this week, said the people, who asked not to be identified because they’re not authorized to talk about it. The central bank has been buying bonds in parcels from 5 million euros ($6.3 million) to 20 million euros. German politicians warned against buying government bonds on a large scale, also known as quantitative easing, and Bundesbank President Jens Weidmann said such a move comes with risks.”

http://www.bloomberg.com/news/2014-10-22/coene-tells-l-echo-ecb-has-no-proposal-on-corporate-bonds.html

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Central banks becoming major investors in stock markets

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“In the years since the financial crisis, central banks have leapt to the forefront of public policy making. They have taken responsibility for lowering interest rates, for maintaining stability of financial institutions, and for buying up government debt to help economies recover from recession.  Now it seems that they have become important in another area, too, in starting to build up holdings of equities. One of the reasons for the move into equities reflects central banks’ efforts to compensate for lost revenue caused by sharp falls in interest rates driven by official institutions’ own efforts to repair the financial crisis.”

http://www.marketwatch.com/story/central-banks-becoming-major-investors-in-stock-markets-2014-06-16/print

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Japan’s Pension Fund Cutting Local Bonds to Buy Equities

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“Japan’s public retirement-savings manager will put half its holdings in local and foreign stocks and start investing in alternative assets as the world’s biggest pension fund seeks higher returns.  The 127.3 trillion yen ($1.1 trillion) Government Pension Investment Fund set allocation targets of 25 percent each for Japanese and overseas equities, up from 12 percent each, it said at a briefing today in Tokyo. GPIF will reduce domestic bonds to 35 percent of assets from 60 percent.  The new allocations were released hours after the Bank of Japan unexpectedly added to monetary easing, sending the Nikkei 225 Stock Average to a seven-year high.”

http://www.bloomberg.com/news/2014-10-31/japan-s-pension-fund-cutting-local-bonds-to-buy-equities.html

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Bank of Japan’s Kuroda’s Stunning, Doubled-Down QE ‘Experiment’

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“The unprecedented increase in ‘quantitative and qualitative monetary stimulus’ announced Friday, October 31, by Bank of Japan governor Kuroda Haruhiko is one of the most risky, if not reckless, and possibly disastrous actions in the history of world central banking. Japan is now conducting ‘a laboratory experiment’ and ‘Governor Kuroda’s monetary experiment has in effect morphed into a strategy of devaluation plus financial repression.’ [..] ‘it is well known that Prime Minister Shinzo Abe, who keeps a stock monitor in his offices, sees rising stock prices as critical to voter confidence in Abenomics and hence his own approval ratings.'”

http://www.forbes.com/sites/stephenharner/2014/11/04/reactions-to-bojs-kurodas-stunning-doubled-down-qe-experiment/

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Beijing to back United States over new FATCA law against tax evasion

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“Mainland China has been included on a list of jurisdictions co-operating with the United States on a new law to halt tax evasion.  It removes the threat of blacklisting or penalties that had been hanging over Chinese financial institutions. The Foreign Account Tax Compliance Act (Fatca) is a US law that requires financial institutions around the world to provide information on US taxpayers to the US government. The move will enable Beijing to obtain information on mainland Chinese taxpayers in the US, which will help in its fight against tax evasion and corruption. The US authorities will impose a 30% withholding tax on US-related income going through financial institutions that do not comply with Fatca.”

http://www.scmp.com/business/banking-finance/article/1542111/beijing-back-united-states-over-new-fatca-law-against-tax

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China-U.S. Visa Deal a Problem for U.S. Immigration Consultants

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“A deal to ease visa requirements between China and the U.S., combined with Beijing’s crackdown on corruption, spells trouble for the industry serving Chinese who want to emigrate.  That business is already under pressure as countries such as Canada shut down programs that effectively allowed rich people to buy citizenship. China is the top source for investment-based immigration in countries such as the U.S., Canada, Australia, Cyprus and Portugal. Chinese looking to buy permanent residency sometimes pay tens of thousands of dollars in fees to the agencies, which are based in China and overseas.”

http://online.wsj.com/articles/china-u-s-visa-deal-a-problem-for-agencies-helping-chinese-emigrate-1415900300

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U.S., China mutually extend visas to 10 years to boost trade, tourism

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“Under the deal, which the United States will put into effect on Nov. 12, both countries would extend the terms of multiple entry short-term tourist and business visas to 10 years from one year, the White House said in an accompanying statement. Student visas would be extended to five years from one year.  The extension matches what is currently allowed for citizens of nations with close relations with the U.S., such as European countries and Brazil.  A senior U.S. official said the visa agreement would allow the United States to tap into the fast-growing market of Chinese tourists traveling abroad.  It will also make it easier for Chinese businesses and investors to get involved in U.S. projects.”

http://www.reuters.com/article/2014/11/10/us-china-usa-visas-idUSKCN0IU0Q020141110

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China’s stock market finally opens to foreigners

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“Starting on Monday, investors anywhere in the world will able to purchase shares of companies listed on the Shanghai Stock Exchange. It’s yet another sign that China is opening up its economy.  Previously, only a select group of institutional investors that met certain qualifications had access to Shanghai’s $2 trillion market.  The bad news is the new program, known as the Shanghai-Hong Kong Stock Connect Program, is a bit clunky for everyday U.S. investors.  A typical American can only buy shares in Shanghai by first going through a broker in Hong Kong who then must go through the Hong Kong Stock Exchange, which is linked to the Shanghai Exchange.”

http://money.cnn.com/2014/11/11/investing/china-stocks-market-open-up/

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Inside a Chinese Bitcoin Mine

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“The first thing you notice as you approach the warehouse is the noise. It begins as soon as you step out of the car, at which point it sounds like massive swarm of angry bees droning away somewhere off in the distance. As you step through the doors it becomes a deafening and steady roar; a combination of tens of thousands of tiny ASIC chips hashing away, and dozens of large industrial fans serving to cool down the ‘workers’. The next thing that hits you as you enter is the wind. The deeper into the building I walked, the more powerful the gust became, coming from behind me and rushing past, across the giant warehouse floor full of machines.”

http://www.thecoinsman.com/2014/08/bitcoin/inside-chinese-bitcoin-mine/

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China begins direct convertibility to Asia’s #1 financial center, Singapore

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“The Chinese government announced that the renminbi will become directly convertible with the Singapore dollar… effective tomorrow morning.  It’s clear this deal has been in the works for a while, and it’s another major step towards the continued internationalization of the renminbi and unseating of the dollar as the world’s dominant reserve currency.  For decades the renminbi has been a tightly controlled currency. It’s only been in the last few years that the Chinese government started loosening those controls, primarily in response to the obvious need for a dollar competitor. China is taking the lead in providing the world with another option.”

http://www.sovereignman.com/trends/the-dollar-decline-continues-china-begins-direct-convertibility-to-asias-1-financial-center-15435/

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