Monthly Archives: January 2016

Pressure on China central bank for 15% yuan depreciation: sources

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“China’s central bank is under increasing pressure from policy advisers to let the yuan currency fall quickly and sharply, by as much as 10-15 percent, as its recent gradual softening is thought to be doing more harm than good.  The PBOC has spent billions of dollars buying yuan over recent months to defend the exchange rate, but has failed to stabilize market sentiment. The currency has steadily lost another 2.6 percent against the U.S. dollar even after the bank sprung a surprise devaluation of nearly 2 percent in August.  China’s foreign exchange reserves fell by more than half a trillion dollars last year as the central bank bought yuan to support the exchange rate.”

http://www.reuters.com/article/us-china-markets-yuan-policymakers-idUSKBN0UL24020160107

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China stocks up after circuit breaker rule axed, yuan fixed higher

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“Chinese markets have had a turbulent start to 2016, buffeted by the PBOC’s lower yuan fixings against the dollar, two days of stock exchange suspensions, weak factory and service sector surveys, and worries about looming share sales by major stakeholders once a ban on such sales expires. The circuit breaker came under fire for kicking in too soon with its initial pause in trading, and then encouraging a rush to sell before a second trigger halted the day’s trade permanently. Sources told Reuters that China’s foreign exchange regulator has ordered banks in some trading hubs, including Shenzhen, to limit clients’ dollar purchases this month, the latest attempt to stem capital outflows.”

http://www.reuters.com/article/us-china-markets-idUSKBN0UM02K20160108

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Shanghai Fund Manager Dumps All Holdings in ‘Insane’ Market

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“‘This is insane,’ Chen Gang, chief investment officer at Shanghai Heqi Tongyi Asset  Management Co., said in an interview on Thursday. ‘We were forced to liquidate all our holdings this morning,’ said Chen, whose firm manages about 300 million yuan ($45.5 million).  Many private funds and hedge funds in China have agreements with investors spelling out mandatory liquidation levels if their holdings drop below a certain value. The CSRC capped the size of stakes that major investors are allowed to sell at 1 percent of a company’s shares for three months effective Jan. 9, the regulator said in a statement on Thursday. The restriction replaces an existing six-month ban that is due to expire Friday.”

http://www.bloomberg.com/news/articles/2016-01-07/shanghai-fund-manager-dumps-all-holdings-as-market-goes-insane–ij3q4f91

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Obamacare architect: High-deductible plans overdone

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“One of the chief architects of the president’s health law said Friday the plans offered on government-run exchanges need to be more affordable in order to boost participation rates. High-deductible plans are part of the problem, Dr. Ezekiel Emanuel added. ‘We’ve overplayed the high-deductible plans. People are feeling this is less and less insurance. And just more and more, ‘I’m paying out of my pocket.” According to the government, the penalties for not getting health insurance are going up substantially in 2016.  The penalty is calculated as a percentage of taxable household income or per person, whichever is higher.”

http://www.cnbc.com/2015/11/20/obamacare-architect-high-deductible-plans-overdone.html

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James Bovard: Budget bill leaves no boondoggle behind

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“While Congress made scant effort to protect average Americans from rampaging regulators, it hustled to include a provision requesting the Capitol Police to permit sledding on Capitol Hill.  House Freedom Caucus member Tim Huelskamp, R-Kan., summarized the GOP leadership’s wacky reasoning: ‘Give the Democrats what they want now so next time they won’t want as much.’ Republicans have been thunderously promising for decades to protect Americans against federal waste, fraud and abuse. At this rate, Republicans’ credibility gap will soon rival the $18 trillion federal debt.”

http://www.usatoday.com/story/opinion/2015/12/17/budget-bill-leaves-no-boondoggle-behind-column/77476422/

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U.S. Probes Treasuries Niche That Investors Claim Is Rigged by Big Banks

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“Traders at global banks colluded to artificially inflate the price of instruments that allow them to sell U.S. debt before they own it, and then bought the debt at auctions for an artificially suppressed price, unfairly profiting at investors’ expense, according to several lawsuits filed against the banks. The banks haven’t responded to those allegations in court. The probes and lawsuits come as many primary dealers’ bond-trading businesses have been squeezed by recent capital requirements from regulators, which have limited how much risk banks can take. This year, dealers’ purchases at Treasury note and bond auctions for their own trading books represent the smallest share on record.”

http://www.bloomberg.com/news/articles/2015-11-09/u-s-probes-treasuries-niche-that-some-investors-claim-is-rigged

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Bumpy year drags U.S. IPO listings back to 2009 levels

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“New share listings in the United States has their worst year since 2009, Thomson Reuters data showed on Tuesday, as a number of deals were pulled or priced below their initial range.  Global listings were down 26 percent compared with 2014, at $185.9 billion.  The strong run of deals at the beginning of the year was blown off course during the summer, as concerns over a slowdown in China and uncertainty around a looming U.S. rate rise increased volatility to levels not seen since 2011, at the height of the European debt crisis.  Also, the China Securities Regulatory Commission (CSRC) abruptly suspended listings approvals in mid-June.”

http://www.reuters.com/article/us-banks-equity-markets-idUSKBN0U500F20151222

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Millions missing after party-loving mayor went on the run

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“Last summer the mayor of a forgotten corner of Brazil went on the run, accused of skimming millions from public funds. Lidiane Leite bragged about how much money she had on Instagram and directed staff back at the office via social media. Known as the WhatsApp mayor, she became an emblem of Brazilian corruption.  ‘I can buy whatever I want,’ she boasted. ‘I’m going to spend money on what I want and I don’t care what people say about me.’  Alarm bells rang. Now, after months of looking into the affairs of small, sleepy Bom Jardim, with its mango trees and cattle, prosecutors believe $4m (£2.7m) may have been embezzled from the public coffers.”

http://www.bbc.com/news/magazine-35242163

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Households lost from quantitative easing; gov’ts, big business won [2013]

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“The big winners, to the tune of $1.6 trillion by the end of 2012, were the governments of the US, the UK and eurozone, from the reduced costs of servicing their debts and from the increased profits made by the their respective central banks (who magically create money to buy government debts which pay them interest).  McKinsey believes that households have been significant losers from cheap money. How much have they lost? Well McKinsey says that from 2007 to 2012, the cumulative net loss of interest income for American households was $360bn, compared with a cumulative net loss of $160bn for eurozone citizens and $110bn (£70bn) for British people.”

http://www.bbc.com/news/business-24939396

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Societé General Strategist: Yellen’s Dithering Fed Is Destined for Infamy

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“The Federal Reserve’s failure to recognize its role in driving the third dangerous asset bubble in 15 years will destroy the central bank’s reputation for good, said Albert Edwards, global strategist at Societe Generale. Edwards said it’s too late to avoid another massive collapse in asset prices.  ‘This time the Fed’s largesse has fueled another corporate debt explosion,’ he said. ‘The real rate of corporate borrowing is even greater than was seen during the late 1990s tech bubble. This is 100 percent attributable to the Fed’s excessively loose monetary policy.'”

http://www.newsmax.com/Finance/StreetTalk/Albert-Edwards-Janet-Yellen-Ben-Bernanke-Alan-Greenspan/2015/12/17/id/706234/

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