News links for 21 Feb 2014
“At the moment Turkey’s banks have a large stock of external debt, around 21 per cent of the value of their deposits. On their own the banks may be able to deal with a slightly higher rate of NPLs, but the risk is of a double whammy of rising external costs and a deteriorating loan book. If any rise in the cost of servicing this foreign currency denominated debt and in securing funding from abroad is passed on to borrowers the this could create a vicious cycle, as higher borrowing costs push the economy down even further, and turning a credit boom into a deep bust.”
French automaker Peugot has suspended production in Brazil, blaming the economic situation in Argentina. This is yet another sign of a deteriorating economic situation in South America
Consumer confidence in Argentina plummeted 23.4%, the worst number month-to-month since 1998. This is a very negative sign and to me signals that we should expect the economic situation in Argentina to deteriorate further. Watch Argentina and Brazil.
The Brazilian government is cutting spending and reducing its growth estimates. Growth estimates were 3.8%. They are now 2.5%. Growth has stalled in Brazil, with 2.7% in 2011, 1% in 2012 and 2% in 2013. Expect more of the same in 2014. Analysts expect 1.79% in 2014. This will have a negative impact on corporate balance sheets and make Brazil more vulnerable to crisis via corporate problems.
“Wal-Mart Stores Inc, famed for its low prices, has stumbled in the one major market where consumers say price is less of a driver in their buying decisions: China. There, consumers say they want food that is safe and authentic, and, after 17 years, Wal-Mart is changing its approach, closing some big-box stores that never quite caught on with locals. Instead, it’s focusing on private-label products and imports, putting its stamp on quality and safety.”
“Chinese government officials have quietly become more sceptical about foreign banks’ research reports and are avoiding senior economists at global banks, partly because of growing mutual distrust over the scale and seriousness of the country’s debt problems.”
“If the Austrian government decides to let a bank with a balance sheet worth nearly 9 percent of economic output fail, wiping out creditors including Bavaria’s state bank BayernLB, it could be the biggest jolt to the euro zone since Cyprus hit savers in 2013 to avoid collapse.”
The inventory builds and weak same-store sales have macro implications.
“Fewer than one in five Japanese companies plan to raise base wages in the coming business year, a Reuters survey shows, a stark sign that Prime Minister Shinzo Abe’s stimulus policies are still struggling to gain traction.”
“Using the extension with a Gmail account, senders will be notified when someone opened their email and who opened the email. If that’s not useful – or for some, disturbing – enough, Streak will also tell you where the email was opened. The extension will put the email on a map, giving the user real-time location updates about the recipients.”
“After years when it was effectively the only place to go, they say, it has been exposed as having inadequate technology, a lack of resources to improve technology and poor customer service. If the platform does get up and running again, it could only be to let people have their money so they can go elsewhere.”
“According to a great deal of research, positive fantasies may lessen your chances of succeeding. In one experiment, the social psychologists Gabriele Oettingen and Doris Mayer asked eighty-three German students to rate the extent to which they “experienced positive thoughts, images, or fantasies on the subject of transition into work life, graduating from university, looking for and finding a job.” Two years later, they approached the same students and asked about their post-college job experiences. Those who harbored positive fantasies put in fewer job applications, received fewer job offers, and ultimately earned lower salaries. The same was true in other contexts, too. Students who fantasized were less likely to ask their romantic crushes on a date and more likely to struggle academically. Hip-surgery patients also recovered more slowly when they dwelled on positive fantasies of walking without pain. “