- China’s Rescue of Troubled Trust May Stoke Risk-Taking. China’s eleventh-hour rescue of wealthy investors in a high-yield trust threatens to drive more money into the nation’s $6 trillion shadow-banking industry, undermining regulators’ efforts to deter excessive risk-taking. Industrial & Commercial Bank of China Ltd., the nation’s largest lender, yesterday told customers who had invested in the 3 billion-yuan ($496 million) trust product that they can sell their rights to unidentified buyers to recoup the principal. Some clients plan to visit ICBC branches to demand more interest ahead of tomorrow’s 5 p.m. deadline for accepting the offer, according to Du Ronghai, a Guangzhou-based investor. Averting the nation’s biggest trust default may reinforce investors’ belief in implicit guarantees and the government’s backing of such risky products, stoking their appetite for products in the $1.67 trillion trust market. The bailout underscores the pressure on authorities to maintain financial and social stability even as they aim to prune the government’s role in the world’s second-largest economy and curtail debt.
- Shanghai Sells Residential Land at Record Amid Competition. Shanghai sold a residential plot of land at a record price amid rising competition among developers for sites in cities with fast price gains as some local governments tighten property curbs.
- Rajan Signals India Inflation-Target Shift as Vote Tensions Boil. India central bank Governor Raghuram Rajan signaled he’s preparing to follow through on proposals to make inflation the bank’s top priority even at the risk of friction with Prime Minister Manmohan Singh’s government.
- Santander, BBVA Face Profit Drain on Emerging Currencies. Banco Santander SA (SAN) and Banco Bilbao Vizcaya Argentaria SA (BBVA), Spain’s biggest banks, face a fresh risk to earnings as the slump in emerging market currencies threatens to slow growth from Brazil to Turkey. Santander relies on consumer banking in Latin America for more than a third of profit, while BBVA has made Turkey, whose lira is the second-worst performer against the euro over the last three months, a centerpiece of growth plans. Santander reports fourth-quarter results on Jan. 30 and BBVA a day later. Rio Olympic Infrastructure Costs of $2.3 Billion Are Set to Rise.
- Rio Olympic Infrastructure Costs of $2.3 Billion Are Set to Rise. Brazilian authorities today announced 5.6 billion reais ($2.3 billion) will be spent on infrastructure directly related to the 2016 Rio de Janeiro Olympic Games and those costs will rise as projects are added. The announcement comes months behind schedule, and after pressure on public bodies to reveal exactly how much it will cost for Rio to be the first South American city to host the quadrennial showpiece. Delays and cost overruns to several projects related to this year’s soccer World Cup have sharpened the focus on the Olympics.
- Argentina’s Lying Prices Show Capital Control Limits: Currencies. When Argentina decided last week to ease limits on dollar purchases, it became the latest emerging-market nation to acknowledge that capital controls usually fail in masking an economy’s flaws.
- Idle Workers Sweep Italy Streets as Alessi Shuns Layoff Fund. When Michele Alessi saw orders drop at his namesake kitchenware designer he paid his staff to sweep streets and prune trees rather than have them stay home tapping a state-backed layoff fund.
- European Stocks Rise as Siemens Advances on Profitability. European stocks advanced, following their largest three-day slump in seven months, as mining companies climbed and banks rebounded from a three-week low. BHP Billiton Ltd. and Rio Tinto Group both rose more than 1 percent. Banco Santander SA, which generates most of its sales from Latin America, gained 1.6 percent to halt an eight-day losing streak. F&C Asset Management Plc (FCAM) jumped 6.1 percent after Bank of Montreal agreed to buy the owner of the U.K.’s oldest investment fund for 708 million pounds ($1.2 billion). The Stoxx Europe 600 Index increased 0.7 percent to 324.22 at the close of trading.
- WTI Rises for First Time in Three Days on U.S. Weather. WTI for March delivery rose as much as 69 cents to $96.41 a barrel and was at $96.28 as of 1:20 p.m. London time in electronic trading on the New York Mercantile Exchange. The contract fell 1 percent to $95.72 yesterday, the lowest price since Jan. 21. The volume of all futures traded was about 42 percent below the 100-day average.
- Yellen Faces Test Bernanke Failed: Ease Bubbles. Janet Yellen probably will confront a test during her tenure as Federal Reserve chairman that both of her predecessors flunked: defusing asset bubbles without doing damage to the economy. The central bank’s easy money policies already have led to pockets of frothiness in corporate debt and emerging markets. The danger is that unwinding such speculative excesses will end up shaking the financial system and hurting growth.
- Deep South Set for Rare Winter Storm Amid U.S. Frigid Front. A rare winter storm is forecast to bring heavy snow and icing to parts of the Deep South today as temperatures continue to drop across the U.S. behind an Arctic front sweeping the country. The storm will extend from the central Gulf Coast to the southern Mid-Atlantic coast today, the National Weather Service said in a bulletin at 3:16 a.m. New York time. A wintry mix is possible as far as southern Los Angeles.
- DuPont(DD) Sales Forecast Trails Estimates as Currency Costs Climb. DuPont Co. (DD:US), the biggest U.S. chemical maker by market value, forecast 2014 earnings that missed analysts’ estimates as the company predicted higher costs from foreign currency exchange. Sales this year will climb 4 percent to about $37 billion, Wilmington, Delaware-based DuPont said today in a statement, trailing the $38.1 billion average of 17 estimates compiled by Bloomberg.
- Ford’s(F) Profit Tops Estimates Before 2014 Record Rollouts. Ford Motor Co. (F) reported quarterly profit that topped analysts’ estimates buoyed by growth in North America and Asia, as F-Series pickups extended sales leadership in the U.S. and the Focus compact drove demand in China.
- Nucor(NUE) Profit Forecast Misses Estimates as Steel Prices Decline. Nucor Corp. (NUE), the largest U.S. steel producer by market value, forecast first-quarter profit that missed analysts’ estimates as steel prices were expected to decline.
- Poll Finds Americans Anxious Over Future, Obama's Performance. President to Face Unsettled Nation in State of the Union Speech.
- 'We have a Constitution': Boehner warns Obama on exec orders. House Speaker John Boehner issued a stern warning to President Obama ahead of Tuesday night's State of the Union address: "We have a Constitution. We abide by it. If he tries to ignore it, he's going to run into a brick wall."
CNBC:
ZeroHedge:
- The 'Economic' State Of The Union. (graph)
CNN:
- Ukraine government resigns, parliament scraps anti-protest laws amid crisis. (video) Ukrainian President Viktor Yanukovych accepted the resignation of Prime Minister Mykola Azarov and his government Tuesday, amid a political crisis fired by violent protests on the country's streets. Azarov and his Cabinet will continue in their roles until a new government is formed, a notice on the presidential website said. Yanukovych's announcement comes only hours after Azarov submitted his resignation and as the national parliament met in an emergency session aimed at ending the crisis.
- Corning(GLW) warns of further fall in LCD glass prices. Specialty glass maker Corning Inc warned that prices of LCD glass would decline further in the current quarter, raising concerns about growth in its display business. Corning shares fell as much as 9 percent on Tuesday.
- Emerging market sell-off, Fed moves hit currency carry trades. A sell-off on emerging markets is likely to flush out many of the remaining carry trade investors who went there in search of higher returns, and this shift should boost more liquid currencies such as the dollar, yen and Swiss franc.
- China is biggest risk to emerging markets. Tight credit and slowing growth create ripple effect across EMs. Debt markets have now seen 17 straight weeks of outflows and equities 13 weeks, the latter the longest streak in 11 years, according to data from BofA Merrill Lynch.
- Britain's economic recovery: unbalanced and unsustainable. Iraq and Iran plot oil revolution in challenge to Saudi Arabia. Iraq's goal of pumping 9m barrels a day of crude could be a game changer for oil prices and British companies.
- Iraq and Iran plot oil revolution in challenge to Saudi Arabia. Iraq's goal of pumping 9m barrels a day of crude could be a game changer for oil prices and British companies.
- Germany Sheds One Third of Solar Jobs in 1 Year. Number of people employed in solar-cell and solar-module production fell to 4,800 in thr yr through November, citing data from Germany's Federal Statistics Office. The industry is suffering from Chinese manufacturer pricing, according to the report.
- RBI's Rate Hike Leaves India Inc Disappointed.
India Inc. today expressed disappointment over the Reserve Bank
increasing the key rate by .25% and hoped that banks would refrain from
hiking lending rates as such a move will scuttle economic recovery. "The
monetary policy statement of the RBI has disappointed the industry.
Growth has been anemic and investments have been hit hard over the last
two years and there are signs of contraction in employment opportunities
across industries," Ficci said in a statement. The
Reserve Bank of India today raised key policy rate by .25 per cent to 8%
in a bid to curb inflation, a move that may translate into higher EMIs
and push up the cost of borrowing for corporates.
The Reserve Bank today raised key policy rate by 0.25 per cent to 8 per cent in a bid to curb inflation, a move that may translate into higher EMIs and push up the cost of borrowing for corporates.
NEW DELHI: India Inc today expressed disappointment over the Reserve Bank increasing the key rate by 0.25 per cent and hoped that banks would refrain from hiking lending rates as such a move will scuttle economic recovery.
"The monetary policy statement of the RBI has disappointed the industry. Growth has been anaemic and investments have been hit hard over the last two years and there are clear signs of contraction in employment opportunities across industries," Ficci said in a ..
India's
statistics office is likely to say in two weeks that growth this year
will slump further to an 11-year low, undermining the government's
optimism that it would at least be flat at 5% on the back of a recovery
in the second half.
The advanced estimate for FY14 is set to come in below that level, said an official who didn't want to be named.
The economy expanded 4.6% in the first half and would need to rise 5.4% in the second for growth to come in at 5%, which doesn't lo ..
The advanced estimate for FY14 is set to come in below that level, said an official who didn't want to be named.
The economy expanded 4.6% in the first half and would need to rise 5.4% in the second for growth to come in at 5%, which doesn't lo ..
Gloomy outlook: India's GDP may sink below 5% to an 11-year low
Xinhua:
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