News links for 19 Feb 2014
“Depositors have withdrawn nearly $1 billion from a bank linked to a foundering rice-subsidy program, the bank said Monday, in one of the first signs that Thailand’s months-old political stalemate is starting to affect the economy.”
“Industry is mired in red tape. Hiring is arduous. Finding land is a trial. Power cuts are frequent. Manufacturers also get clobbered by unreasonable tax demands, as Nokia of Finland, which operates its largest factory in India, has recently discovered.”
“China’s central bank has removed nearly $8bn (£4.7bn) from the money markets in a bid to control the amount of credit in the country’s financial system.”
“Unless you are an aficionado of the great moments of Chinese Communist history, you probably won’t have heard of Wuhan (it is the site of Chairman Mao’s legendary swim across the Yangtze). But perhaps more than any other Chinese city, it tells the story of how China’s remarkable three decades of modernisation and enrichment, its economic miracle, is apparently drawing to a close, and why there is a serious risk of a calamitous crash.”
“Robert Peston travels to China to investigate how this mighty economic giant could actually be in serious trouble. China is now the second largest economy in the world and for the last 30 years China’s economy has been growing at an astonishing rate. While Britain has been in the grip of the worst recession in a generation, China’s economic miracle has wowed the world. “
“Back in October 2012 the actual level of M1 had just broken below the 16% trend line and since then M1 has kept inching downward compared to both the 16% and 15% trend lines and recently we have broken 15% tend line. This is obviously a very crude measure of monetary conditions in China, but I nonetheless think that the indication is pretty clear – monetary conditions are clearly getting tighter in China and I think it is fair to say that monetary conditions are disinflationary rather than inflationary.”
Sweden is in deflation now. The month-to-month change of 1.2% in January was so large it brought the year-on-year change to negative territory at -0.2%. The central bank is worried. If overvalued house prices fall, they will have a big problem.
This article is on bankrupy Austrian bank Hypo Alpe Aldria, now costing taxpayers billions via a bailout. Will cos taxpayers up to 4 billion euros more. (translation follows): “Hypo had 13.5 billion euros of credit on its books davon 5 Mrd., of which 8.5 billion had no large servicing problems. “Bad debt”. 3.5 billion has been written down since the last statement, bringing the total writedowns to 10 billion euros.”
“Advertising sales are a tough slog for both — and for a lot of the same reasons. Media buyers say they are slow, cocky and downright stingy. Both take too long to develop ad products. Amazon’s sales approach is too pushy; Apple is too reticent to foster relationships. Most frustrating: Neither is willing to cough up enough of the consumer data that attracts advertisers to them in the first place.”
This is a great article featuring only personal testimonies of the middle class in Argentina and how they are coping with the inflation in country.
Inflation expectations for the coming year in Argentina are 35%
“A new report by Brazilian banks suggests a legal battle over the consequences of economic plans launched nearly three decades ago could cost them more than $140 billion, more than double their previous estimate. Consumer advocates have said that amount is exaggerated and is a way for banks to pressure Supreme Court justices to get a favorable rule for financial institutions. Savers across the country claim they weren’t paid enough interest on their savings by banks as Brazil navigated its way through a series of economic plans designed to stabilize prices between 1986 and 1991. As the government sought to cut down on inflation, savers claim the interest on savings accounts didn’t keep up with rising prices.”
“According to Philip Turner of the Bank for International Settlements, the emerging-market corporate sector is now a repository of potential systemic risk because companies have been engaging in a carry trade. Through their overseas subsidiaries, they have been borrowing at the exceptionally low rates engineered by central bankers in the developed world to invest in domestic assets. “
This merger makes no strategic sense