Breaking News
FT.com !!
Lance takes the fall for the Cycling sport !!
I feel he did so much for this sport.
"Cycling's governing body gives Lance Armstrong life ban
Cycling’s governing body has banned Lance Armstrong from the sport for life and stripped him of his seven Tour de France titles, saying the American had “no place in cycling”.
Union Cycliste Internationale announced at a press conference in Geneva that it was endorsing the report of the US Anti-Dopiong Agency, which implicated Mr Armstrong in an organised doping ring that encouraged the use of banned substances over several years.
Pat McQuaid, president of the UCI, said this was “a landmark day for cycling”, but insisted that the sport had a future.
He talked about “the painful process of confronting its past”, adding the governing body, which is under pressure to explain why it failed to prevent doping scandal, had nothing to hide. It would hold a special meeting to discuss the USADA report and look at measures to prevent a repeat of the scandal."
Monday, 22 October 2012
Friday, 19 October 2012
China Growth Suggests Economy on the Mend
REF : Bloomberg Business Week !!
"Has China’s economy bottomed out?
Economists and analysts are posing that question following the Oct. 18 announcement that gross domestic product grew 7.4 percent in the third quarter, from a year earlier, down from 7.6 percent growth in the previous three months. China’s economic growth has started to stabilize, Premier Wen Jiabao said in a recent meeting with heads of Chinese companies, industrial leaders, and local government officials, the Xinhua News Agency reported on Oct. 17. The economy will continue to show “positive changes,” Wen said. He has set a target of 7.5 percent growth for the year.
With continued weakness in Europe and North America, “what we see is a good performance. It augurs well for continued soft landing,” John Quelch, professor of international management and dean of China Europe International Business School in Shanghai, said in a telephone interview after China’s statistics bureau released the latest growth figure.
Contributing to the optimistic sentiment: a slew of positive indicators throughout the economy, suggesting a corner may have been turned, following seven quarters of slowing growth. Industrial production, for example, grew 9.4 percent; fixed asset investment in cities grew 20.5 percent; and retails sales were up 14.2 percent—all ahead of estimates. Exports and money supply also grew faster than expected. “In our view the September data suggest that a bottoming out may be in sight,” Louis Kuijs, chief China economist at Royal Bank of Scotland (RBS) in Hong Kong, wrote in an Oct. 18 note.
Add Ting Lu and Larry Hu, China economists at Bank of America Merrill Lynch (BAC) in Hong Kong, in an Oct. 18 note: “We are seeing an increasing amount of evidences for green shoots. This evidence comes from a wide range of sectors including transportation, commodity, exports, property market, credit and money data, tourism in Golden Week [China’s week-long October holiday] and restocking by manufacturing companies.”
The good news has lessened pressure on Beijing to take further loosening measures, even as it prepares for a once-in-a-decade leadership transition, beginning at a Party Congress opening on Nov. 8. China’s central bank has left interest rates alone since July, following two cuts to the benchmark rate in one month. That followed three cuts in bank reserve ratio requirements, starting last November.
“As we saw in 2008 in the U.S., one never wants an economic crisis to accompany a leadership transition,” says Quelch, who predicts China is unlikely to take further accommodative steps before the end of the year. “The Chinese economy has been well managed; there won’t be any urgent or significant challenges that new leadership will have to face within the first 90 days.”
But even as these latest numbers have raised hopes, there are still worrying signs in the Chinese economy, particularly in such industries as steel, cement, and autos, now facing overcapacity following several years of hyper-charged investment growth. “Investment outside of real estate and infrastructure—mainstream corporate investment—appears to be losing speed, weighed down by spare capacity and weak profits,” says RBS’s Kuijs.
Still, Kuijs is predicting that China will grow 7.5 percent this year, meeting the official target, and tick up to 7.8 percent in 2013. “This assumes subdued growth globally but no major turmoil and, in China, a continued pro-growth macro stance but no major, game-changing stimulus,” says Kuijs. “The biggest risk to our outlook is still a larger global downturn combined with financial turmoil.”"
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
"Has China’s economy bottomed out?
Economists and analysts are posing that question following the Oct. 18 announcement that gross domestic product grew 7.4 percent in the third quarter, from a year earlier, down from 7.6 percent growth in the previous three months. China’s economic growth has started to stabilize, Premier Wen Jiabao said in a recent meeting with heads of Chinese companies, industrial leaders, and local government officials, the Xinhua News Agency reported on Oct. 17. The economy will continue to show “positive changes,” Wen said. He has set a target of 7.5 percent growth for the year.
With continued weakness in Europe and North America, “what we see is a good performance. It augurs well for continued soft landing,” John Quelch, professor of international management and dean of China Europe International Business School in Shanghai, said in a telephone interview after China’s statistics bureau released the latest growth figure.
Contributing to the optimistic sentiment: a slew of positive indicators throughout the economy, suggesting a corner may have been turned, following seven quarters of slowing growth. Industrial production, for example, grew 9.4 percent; fixed asset investment in cities grew 20.5 percent; and retails sales were up 14.2 percent—all ahead of estimates. Exports and money supply also grew faster than expected. “In our view the September data suggest that a bottoming out may be in sight,” Louis Kuijs, chief China economist at Royal Bank of Scotland (RBS) in Hong Kong, wrote in an Oct. 18 note.
Add Ting Lu and Larry Hu, China economists at Bank of America Merrill Lynch (BAC) in Hong Kong, in an Oct. 18 note: “We are seeing an increasing amount of evidences for green shoots. This evidence comes from a wide range of sectors including transportation, commodity, exports, property market, credit and money data, tourism in Golden Week [China’s week-long October holiday] and restocking by manufacturing companies.”
The good news has lessened pressure on Beijing to take further loosening measures, even as it prepares for a once-in-a-decade leadership transition, beginning at a Party Congress opening on Nov. 8. China’s central bank has left interest rates alone since July, following two cuts to the benchmark rate in one month. That followed three cuts in bank reserve ratio requirements, starting last November.
“As we saw in 2008 in the U.S., one never wants an economic crisis to accompany a leadership transition,” says Quelch, who predicts China is unlikely to take further accommodative steps before the end of the year. “The Chinese economy has been well managed; there won’t be any urgent or significant challenges that new leadership will have to face within the first 90 days.”
But even as these latest numbers have raised hopes, there are still worrying signs in the Chinese economy, particularly in such industries as steel, cement, and autos, now facing overcapacity following several years of hyper-charged investment growth. “Investment outside of real estate and infrastructure—mainstream corporate investment—appears to be losing speed, weighed down by spare capacity and weak profits,” says RBS’s Kuijs.
Still, Kuijs is predicting that China will grow 7.5 percent this year, meeting the official target, and tick up to 7.8 percent in 2013. “This assumes subdued growth globally but no major turmoil and, in China, a continued pro-growth macro stance but no major, game-changing stimulus,” says Kuijs. “The biggest risk to our outlook is still a larger global downturn combined with financial turmoil.”"
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
Goldman Ex-Employee Says Firm Pushed Europe Bank Options
Oct. 18 (Bloomberg) --
The Saga carries on !!
"Greg Smith, the former Goldman Sachs Group Inc. salesman who publicly accused the firm of ripping off its clients, was denied a raise and a promotion in the weeks before he resigned in March, documents provided by Goldman show.
Smith, 33, told one of his managers in a December 2011 meeting that he expected to earn more than $1 million a year, about double what he was making at the time as an executive director in London, according to a summary of Goldman Sachs’s investigation into Smith’s claims. He also said in the meeting that he wasn’t advancing up the corporate ladder fast enough and expected to win the promotion to managing director he had repeatedly stated as a goal in self-evaluations.
His bosses were incredulous. New York-based Goldman Sachs, the fifth-largest U.S. bank, was about to book its second-lowest profit in a decade and that year had eliminated almost a tenth of its workforce -- 3,400 jobs. The equity-derivatives desk Smith worked for in London had been told that compensation would be down “significantly,” according to the firm’s summary.
“Greg Smith off the charts unrealistic, thinks he shld [sic] trade at multiples,” one of Smith’s managers wrote in a January 2012 internal e-mail after informing him that his raise request and demand for promotion had been turned down.
‘Moral Fiber’
Two months later, Smith made one of the most public exits in Wall Street history, announcing his resignation in a scathing op-ed in the New York Times entitled “Why I Am Leaving Goldman Sachs.” He called the environment at the firm “toxic and destructive,” said senior staff referred to clients by the derogatory term “muppets” and blamed Chairman and Chief Executive Officer Lloyd Blankfein and President Gary Cohn for “a decline in the firm’s moral fiber.”
Smith has since documented his views and experiences in a 276-page book, “Why I Left Goldman Sachs.” Published by Grand Central, it’ll be available for purchase Oct. 22.
Seeking better compensation is “the American way,” according to John Farrell, JPMorgan Chase & Co.’s former human- resources chief. “I don’t think there’s anything wrong with trying to earn more and be promoted.” He added that any writing by former employees about their old workplaces should be taken “with a grain of salt.”
Blankfein Mission
The sudden and public nature of the departure caught Goldman Sachs off-guard. Smith was one of 13,000 vice presidents. Blankfein and Cohn had no idea who Smith was or why he decided to go public with his resignation, according to two people familiar with their thinking at the time.
“It makes me ill how callously people talk about ripping their clients off,” Smith wrote in the Times on March 14.
That day, Blankfein, 58, set in motion a soul-searching mission that would become a months-long investigation into Smith’s allegations. According to two people close to the CEO, he indicated he and the board wanted to know why Goldman Sachs’s radar failed to detect Smith’s dissatisfaction.
Among Wall Street firms, Goldman Sachs was dragged most publicly through Congressional inquiries over its role in the financial crisis, and it paid $550 million in a settlement with regulators. Now Goldman Sachs would have to defend its conduct again.
Jake Siewert, a Goldman Sachs spokesman, says all of the firm’s attempts to talk to Smith after his resignation were rebuffed. Jimmy Franco, director of publicity at Grand Central, said in an e-mail that Smith would not be making statements at this time.
Forensic Specialists
The firm hired forensic specialists to troll through e- mails and taped conversations, according to four people with direct knowledge of the probe. It also conducted interviews with 125 employees who had contact with Smith, going as far back as his summer internship in 2000.
The results of that investigation were shared with Goldman Sachs’s board and regulators including the Washington-based Financial Industry Regulatory Authority and the U.K.’s Financial Services Authority, according to one of the people familiar with the probe.
A nine-page summary was provided to Bloomberg News. While it includes excerpts from Smith’s self-evaluations and quotes directly from internal e-mails, much is excluded. The summary does not, for example, show the context in which some of Smith’s remarks were made, leaving open the possibility of misinterpretation.
Still, the documents paint a picture of Smith that is at odds with the image he fashioned for himself in the op-ed: an altruistic kid from Johannesburg, out of place in the rapacious, wealth-obsessed world of American high finance.
Stanford Grad
Smith wrote in the Times that Goldman Sachs “has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.”
Goldman Sachs’s document shows Smith as a striver, eager to make more money and frustrated when he didn’t advance. In his 2010 self-evaluation he made clear he wanted to stay at Goldman Sachs, saying, “it is my goal to get promoted to managing director.”
“It creates some doubt, some question about his credibility and whether in fact he had an axe to grind,” said James Post, a professor at Boston University’s School of Management who focuses on corporate governance and ethics.
Smith, a graduate of Stanford University in Palo Alto, California, joined Goldman Sachs full-time in 2001 as an analyst in the equities division in New York. He was promoted to associate in 2003 and then vice president in 2006. He transferred to London in 2011 to take a position supporting the desk that sells U.S. equity derivatives to European clients.
Falling Behind
By 2012, Smith had fallen behind his peers. According to Goldman Sachs, he was the lowest-paid among the VPs who started in the same training class. A third of his classmates had become managing directors.
In the op-ed, Smith said he’d advised some of the world’s largest money managers and that his “clients have a total asset base of more than a trillion dollars.” According to Goldman Sachs’s investigation, that description is a stretch.
While Smith did work for some of the firm’s biggest clients, including AQR Capital Management LLC, Government of Singapore Investment Corp., T. Rowe Price Group Inc., Vanguard Group Inc. and the asset-management units of Morgan Stanley and Deutsche Bank AG, he had no direct responsibility for those accounts and didn’t perform an advisory role.
Promotion Denied
At the same time, Smith had, in Goldman Sachs’s assessment, an overgenerous view of his own performance. The documents say he placed in the bottom half of the firm in regular evaluations from 2007, while giving himself scores that were “significantly above” those he received from others.
When his request for a promotion to managing director was denied in January, Smith asked to be moved to a different sales desk. The investigation report says he wanted to generate revenue and cover clients, a step up from the support role he was providing as a marketer and one with a better shot at a bigger paycheck.
Goldman Sachs put a different managing director in charge of Smith as it considered giving him a sales job. The report says he “found the transition difficult” and considered the female MD who ran the desk a peer and not his boss.
‘Vague Concerns’
In February, Smith told a colleague he was concerned that the move he wanted to a different sales desk might not happen, according to Goldman Sachs’s account. A month later, he was gone.
The investigation exonerated Smith’s managers, saying they had not missed warning signs. When he had formal opportunities to raise concerns or criticize individuals, such as performance reviews, he gave his colleagues top marks.
According to Goldman Sachs, Smith never let on that he was disenchanted or resentful until March 12, two days before he resigned. At a regular meeting with a Goldman partner he “expressed vague concerns” about the firm’s direction and complained that its focus was on making money, not serving clients.
Goldman Sachs executives now say they believe Smith had submitted his op-ed by the time that meeting was held.
Taken together, the materials provided by Goldman Sachs challenge the storyline Smith has presented in his op-ed and excerpts from his forthcoming book. Only Smith knows if his public denunciation of the firm was motivated by loathing for what it had become, or instead resentment upon realizing that his career was stuck and a promotion unlikely.
What Smith didn’t know: His future at Goldman Sachs might have been short-lived anyway. The investigation report says Smith’s managers “discussed the possibility of Greg’s departure from the firm.”
To contact the reporters on this story: Erik Schatzker in New York at eschatzker@bloomberg.net ; Stephanie Ruhle in New York at sruhle2@bloomberg.net .
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net . "
===
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
The Saga carries on !!
"Greg Smith, the former Goldman Sachs Group Inc. salesman who publicly accused the firm of ripping off its clients, was denied a raise and a promotion in the weeks before he resigned in March, documents provided by Goldman show.
Smith, 33, told one of his managers in a December 2011 meeting that he expected to earn more than $1 million a year, about double what he was making at the time as an executive director in London, according to a summary of Goldman Sachs’s investigation into Smith’s claims. He also said in the meeting that he wasn’t advancing up the corporate ladder fast enough and expected to win the promotion to managing director he had repeatedly stated as a goal in self-evaluations.
His bosses were incredulous. New York-based Goldman Sachs, the fifth-largest U.S. bank, was about to book its second-lowest profit in a decade and that year had eliminated almost a tenth of its workforce -- 3,400 jobs. The equity-derivatives desk Smith worked for in London had been told that compensation would be down “significantly,” according to the firm’s summary.
“Greg Smith off the charts unrealistic, thinks he shld [sic] trade at multiples,” one of Smith’s managers wrote in a January 2012 internal e-mail after informing him that his raise request and demand for promotion had been turned down.
‘Moral Fiber’
Two months later, Smith made one of the most public exits in Wall Street history, announcing his resignation in a scathing op-ed in the New York Times entitled “Why I Am Leaving Goldman Sachs.” He called the environment at the firm “toxic and destructive,” said senior staff referred to clients by the derogatory term “muppets” and blamed Chairman and Chief Executive Officer Lloyd Blankfein and President Gary Cohn for “a decline in the firm’s moral fiber.”
Smith has since documented his views and experiences in a 276-page book, “Why I Left Goldman Sachs.” Published by Grand Central, it’ll be available for purchase Oct. 22.
Seeking better compensation is “the American way,” according to John Farrell, JPMorgan Chase & Co.’s former human- resources chief. “I don’t think there’s anything wrong with trying to earn more and be promoted.” He added that any writing by former employees about their old workplaces should be taken “with a grain of salt.”
Blankfein Mission
The sudden and public nature of the departure caught Goldman Sachs off-guard. Smith was one of 13,000 vice presidents. Blankfein and Cohn had no idea who Smith was or why he decided to go public with his resignation, according to two people familiar with their thinking at the time.
“It makes me ill how callously people talk about ripping their clients off,” Smith wrote in the Times on March 14.
That day, Blankfein, 58, set in motion a soul-searching mission that would become a months-long investigation into Smith’s allegations. According to two people close to the CEO, he indicated he and the board wanted to know why Goldman Sachs’s radar failed to detect Smith’s dissatisfaction.
Among Wall Street firms, Goldman Sachs was dragged most publicly through Congressional inquiries over its role in the financial crisis, and it paid $550 million in a settlement with regulators. Now Goldman Sachs would have to defend its conduct again.
Jake Siewert, a Goldman Sachs spokesman, says all of the firm’s attempts to talk to Smith after his resignation were rebuffed. Jimmy Franco, director of publicity at Grand Central, said in an e-mail that Smith would not be making statements at this time.
Forensic Specialists
The firm hired forensic specialists to troll through e- mails and taped conversations, according to four people with direct knowledge of the probe. It also conducted interviews with 125 employees who had contact with Smith, going as far back as his summer internship in 2000.
The results of that investigation were shared with Goldman Sachs’s board and regulators including the Washington-based Financial Industry Regulatory Authority and the U.K.’s Financial Services Authority, according to one of the people familiar with the probe.
A nine-page summary was provided to Bloomberg News. While it includes excerpts from Smith’s self-evaluations and quotes directly from internal e-mails, much is excluded. The summary does not, for example, show the context in which some of Smith’s remarks were made, leaving open the possibility of misinterpretation.
Still, the documents paint a picture of Smith that is at odds with the image he fashioned for himself in the op-ed: an altruistic kid from Johannesburg, out of place in the rapacious, wealth-obsessed world of American high finance.
Stanford Grad
Smith wrote in the Times that Goldman Sachs “has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.”
Goldman Sachs’s document shows Smith as a striver, eager to make more money and frustrated when he didn’t advance. In his 2010 self-evaluation he made clear he wanted to stay at Goldman Sachs, saying, “it is my goal to get promoted to managing director.”
“It creates some doubt, some question about his credibility and whether in fact he had an axe to grind,” said James Post, a professor at Boston University’s School of Management who focuses on corporate governance and ethics.
Smith, a graduate of Stanford University in Palo Alto, California, joined Goldman Sachs full-time in 2001 as an analyst in the equities division in New York. He was promoted to associate in 2003 and then vice president in 2006. He transferred to London in 2011 to take a position supporting the desk that sells U.S. equity derivatives to European clients.
Falling Behind
By 2012, Smith had fallen behind his peers. According to Goldman Sachs, he was the lowest-paid among the VPs who started in the same training class. A third of his classmates had become managing directors.
In the op-ed, Smith said he’d advised some of the world’s largest money managers and that his “clients have a total asset base of more than a trillion dollars.” According to Goldman Sachs’s investigation, that description is a stretch.
While Smith did work for some of the firm’s biggest clients, including AQR Capital Management LLC, Government of Singapore Investment Corp., T. Rowe Price Group Inc., Vanguard Group Inc. and the asset-management units of Morgan Stanley and Deutsche Bank AG, he had no direct responsibility for those accounts and didn’t perform an advisory role.
Promotion Denied
At the same time, Smith had, in Goldman Sachs’s assessment, an overgenerous view of his own performance. The documents say he placed in the bottom half of the firm in regular evaluations from 2007, while giving himself scores that were “significantly above” those he received from others.
When his request for a promotion to managing director was denied in January, Smith asked to be moved to a different sales desk. The investigation report says he wanted to generate revenue and cover clients, a step up from the support role he was providing as a marketer and one with a better shot at a bigger paycheck.
Goldman Sachs put a different managing director in charge of Smith as it considered giving him a sales job. The report says he “found the transition difficult” and considered the female MD who ran the desk a peer and not his boss.
‘Vague Concerns’
In February, Smith told a colleague he was concerned that the move he wanted to a different sales desk might not happen, according to Goldman Sachs’s account. A month later, he was gone.
The investigation exonerated Smith’s managers, saying they had not missed warning signs. When he had formal opportunities to raise concerns or criticize individuals, such as performance reviews, he gave his colleagues top marks.
According to Goldman Sachs, Smith never let on that he was disenchanted or resentful until March 12, two days before he resigned. At a regular meeting with a Goldman partner he “expressed vague concerns” about the firm’s direction and complained that its focus was on making money, not serving clients.
Goldman Sachs executives now say they believe Smith had submitted his op-ed by the time that meeting was held.
Taken together, the materials provided by Goldman Sachs challenge the storyline Smith has presented in his op-ed and excerpts from his forthcoming book. Only Smith knows if his public denunciation of the firm was motivated by loathing for what it had become, or instead resentment upon realizing that his career was stuck and a promotion unlikely.
What Smith didn’t know: His future at Goldman Sachs might have been short-lived anyway. The investigation report says Smith’s managers “discussed the possibility of Greg’s departure from the firm.”
To contact the reporters on this story: Erik Schatzker in New York at eschatzker@bloomberg.net ; Stephanie Ruhle in New York at sruhle2@bloomberg.net .
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net . "
===
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
Monday, 15 October 2012
Have you put your portfolio on hold?
Great Article from BLACK ROCK !!
RETHINK THE COST OF CASH
Cash is an essential part of every portfolio. But holding cash and putting your portfolio "on hold" is not a long-term investment strategy, since cash holdings historically have produced negative returns after considering the effects of taxes and inflation.
Cash Averages a Negative Return After Taxes and Inflation1
"So what do I do with my money?"
Cash is an essential part of everyone’s finances and plays an important role in saving and investing. In terms of investment risk, cash is also probably the most conservative option. But safety and comfort come at a price—the probability you will not meet your long-term investment goals. While today’s market conditions understandably produce anxiety, investors with large amounts of cash should take a step back, assess their goals, and work with their financial advisors to make their money work harder for them. Ask your financial advisor about how to build a balanced, diverse portfolio designed for growth even as markets stagnate.
Watch this video, it is so True but get advise before taking any steps !!
http://www.youtube.com/watch?feature=player_embedded&v=KBJ3Ne-BXf8
Steven
Go to the Black Rock Website !!
Interesting ideas :
http://t.co/jO0kDE77
RETHINK THE COST OF CASH
Cash is an essential part of every portfolio. But holding cash and putting your portfolio "on hold" is not a long-term investment strategy, since cash holdings historically have produced negative returns after considering the effects of taxes and inflation.
Cash Averages a Negative Return After Taxes and Inflation1
"So what do I do with my money?"
Cash is an essential part of everyone’s finances and plays an important role in saving and investing. In terms of investment risk, cash is also probably the most conservative option. But safety and comfort come at a price—the probability you will not meet your long-term investment goals. While today’s market conditions understandably produce anxiety, investors with large amounts of cash should take a step back, assess their goals, and work with their financial advisors to make their money work harder for them. Ask your financial advisor about how to build a balanced, diverse portfolio designed for growth even as markets stagnate.
Watch this video, it is so True but get advise before taking any steps !!
http://www.youtube.com/watch?feature=player_embedded&v=KBJ3Ne-BXf8
Steven
Go to the Black Rock Website !!
Interesting ideas :
http://t.co/jO0kDE77
Thursday, 11 October 2012
Goldman Sachs’s Cohn Sees Pain When Fed Ends Quantitative Easing
Oct. 11 (Bloomberg) --
"The Federal Reserve will struggle to end its quantitative easing program, said Gary D. Cohn, Goldman Sachs Group Inc.’s president and chief operating officer.
“I understand what they’re trying to do and I will tell you this, this is going to be difficult to stop or to exit,” Cohn told Bloomberg Television today in Tokyo. “At the end of this -- there will be an end to quantitative easing -- we will have to go through the pains of stopping quantitative easing.”
The Fed last month announced its third round of large-scale asset purchases since 2008, with no limit this time on the ultimate amount it would buy or the duration of the program. Fed Chairman Ben S. Bernanke says stimulus will be expanded until the Fed sees “sustained improvement” in the labor market and that the strategy works in part by boosting the prices of assets such as equities.
“We know the Fed wants to create job growth,” Cohn said. “We know that the Fed wants to create asset appreciation.”
Fed Vice Chairman Janet Yellen said in Tokyo yesterday that policy makers have a plan to normalize monetary policy when the time comes. After it begins to raise its benchmark interest rate from near zero, the U.S. central bank has indicated it wants to sell many of the assets on its balance sheet in a “very gradual and predictable way,” she said.
Normalizing Policy
“We know that this will be a challenging feat to normalize monetary policy,” she said, noting bank balance sheets may be vulnerable to any sharp increase in rates.
The Fed isn’t alone in easing monetary policy, with the European Central Bank and Bank of Japan both adding to stimulus in the past three months. The ECB cut its benchmark interest rate to a record low of 0.75 percent and pledged to buy the bonds of governments that agree to austerity conditions. The Bank of Japan last month boosted its asset-purchase fund by 10 trillion yen and abandoned a floor rate for bond purchases.
“They are all kind of doing the same thing so it has less impact than if other players were on the sideline,” said Cohn.
While he praised ECB President Mario Draghi for doing a “spectacular job” and removing “a lot of risk off the table,” Cohn said the ECB can’t “deal with the real long-term problem of Europe, which is economic growth.” Draghi worked at Goldman Sachs from 2002 to 2005.
Cohn echoed his June view that Europe needs a “moment” like Lehman Brothers Holdings Inc.’s 2008 bankruptcy to solve its debt stress.
“I’m not sure what the moment will be, but I do believe there’s going to be a moment when everyone takes a deep breath and says ‘we’ve got to fix this situation,’” Cohn said.
With the annual meetings of the International Monetary Fund under way in Tokyo, Cohn said the world economy is in a tough place and lacks leadership. Goldman Sachs’ business model is correlated to economic growth, he said. "
To contact the reporters on this story: Sara Eisen in Tokyo at seisen2@bloomberg.net ; Simon Kennedy in Tokyo at skennedy4@bloomberg.net
===
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
"The Federal Reserve will struggle to end its quantitative easing program, said Gary D. Cohn, Goldman Sachs Group Inc.’s president and chief operating officer.
“I understand what they’re trying to do and I will tell you this, this is going to be difficult to stop or to exit,” Cohn told Bloomberg Television today in Tokyo. “At the end of this -- there will be an end to quantitative easing -- we will have to go through the pains of stopping quantitative easing.”
The Fed last month announced its third round of large-scale asset purchases since 2008, with no limit this time on the ultimate amount it would buy or the duration of the program. Fed Chairman Ben S. Bernanke says stimulus will be expanded until the Fed sees “sustained improvement” in the labor market and that the strategy works in part by boosting the prices of assets such as equities.
“We know the Fed wants to create job growth,” Cohn said. “We know that the Fed wants to create asset appreciation.”
Fed Vice Chairman Janet Yellen said in Tokyo yesterday that policy makers have a plan to normalize monetary policy when the time comes. After it begins to raise its benchmark interest rate from near zero, the U.S. central bank has indicated it wants to sell many of the assets on its balance sheet in a “very gradual and predictable way,” she said.
Normalizing Policy
“We know that this will be a challenging feat to normalize monetary policy,” she said, noting bank balance sheets may be vulnerable to any sharp increase in rates.
The Fed isn’t alone in easing monetary policy, with the European Central Bank and Bank of Japan both adding to stimulus in the past three months. The ECB cut its benchmark interest rate to a record low of 0.75 percent and pledged to buy the bonds of governments that agree to austerity conditions. The Bank of Japan last month boosted its asset-purchase fund by 10 trillion yen and abandoned a floor rate for bond purchases.
“They are all kind of doing the same thing so it has less impact than if other players were on the sideline,” said Cohn.
While he praised ECB President Mario Draghi for doing a “spectacular job” and removing “a lot of risk off the table,” Cohn said the ECB can’t “deal with the real long-term problem of Europe, which is economic growth.” Draghi worked at Goldman Sachs from 2002 to 2005.
Cohn echoed his June view that Europe needs a “moment” like Lehman Brothers Holdings Inc.’s 2008 bankruptcy to solve its debt stress.
“I’m not sure what the moment will be, but I do believe there’s going to be a moment when everyone takes a deep breath and says ‘we’ve got to fix this situation,’” Cohn said.
With the annual meetings of the International Monetary Fund under way in Tokyo, Cohn said the world economy is in a tough place and lacks leadership. Goldman Sachs’ business model is correlated to economic growth, he said. "
To contact the reporters on this story: Sara Eisen in Tokyo at seisen2@bloomberg.net ; Simon Kennedy in Tokyo at skennedy4@bloomberg.net
===
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
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Wednesday, 10 October 2012
Asian Summary 10 October 2012
"Asian stocks decline overnight (MSCI Asia Pacific falling 0.8%) after Chinese growth and Europe's debt crisis hurt profits. Alcoa Inc said Chinese growth will cut global demand for Aluminium, while Japanese car sales in China slumped on a territorial dispute. A report later today may show that French and Italian industrial production fell in August. The Dow closed down 0.13% and the S&P off 0.21% after SA futures close."
Asian Stocks Drop With Oil on China, Europe Concern; Won Weakens
Oct. 10 (Bloomberg) --
"Asian stocks fell for a third day, credit risk in the region rose to a one-week high and oil declined as slowing Chinese growth and Europe’s debt crisis hurt corporate profits. The won retreated from an 11-month high.
The MSCI Asia Pacific Index slipped 0.8 percent at 12:11 p.m. in Tokyo, led by Japanese shares. Futures on the Standard & Poor’s 500 Index lost 0.2 percent. Bond risk in the Asia-Pacific region rose to the highest level in at least a week. South Korea’s won weakened 0.4 percent to 1,114.80 per dollar. Commodities as measured by the S&P GSCI Index decreased 0.3 percent as oil fell 0.5 percent. Markets in Taiwan are closed.
Alcoa Inc. said slowing Chinese growth will cut global demand for aluminum, while Japanese car sales in China plunged on a territorial dispute. Data today may show French and Italian industrial production fell in August as Europe’s debt crisis hampers growth. Spain’s Prime Minister Mariano Rajoy is struggling to contain the country’s deficit as he meets with French President Francois Hollande in Paris today.
“We are clearly seeing the impact of a Chinese slowdown globally and it’s indicated in Alcoa’s numbers,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost $100 billion. “Equity markets have had a very strong run. So, it won’t be surprising if they go through some correction.”
More than three stocks fell for every one that climbed on the MSCI Asia Pacific Index. Japan’s Nikkei 225 Stock Average and the broader Topix Index slumped at least 1.4 percent. Toyota Motor Corp. sank 1.8 percent after reporting the biggest drop in China sales since at least 2008. Data today may show Chinese passenger-vehicle sales rose at the slowest pace in eight months.
Alcoa, S&P
The Shanghai Composite Index dropped 0.3 percent, led by materials producers, and Hong Kong’s Hang Seng Index slipped 0.5 percent. Aluminum Corp. of China Ltd., the nation’s biggest producer, declined at least 0.6 percent in Hong Kong and Shanghai. Alcoa, the first company in the Dow Jones Industrial Average to report results, posted earnings and sales that beat analysts’ estimates.
Third-quarter profits and sales for the S&P 500 probably fell in unison for the first time in three years, according to analysts’ estimates compiled by Bloomberg. Five years after the S&P 500 began its decline from a record, per-share earnings may have dropped 1.7 percent on average after they were little changed in the second quarter. Sales may have slipped 0.6 percent, the data show.
The cost of insuring Asia-Pacific corporate and sovereign bonds from default increased, according to traders of credit- default swaps. The Markit iTraxx Asia index of 40 investment- grade borrowers outside Japan added 3.5 basis points to 134, Credit Agricole SA prices show. The gauge is set for its highest close since Oct. 2, according to data provider CMA.
Yuan, Won
China’s yuan weakened for a third day, the longest run of declines since August, on heightened concern the economy is losing momentum. The country’s money-market rate dropped for a second day on speculation cash supply will increase as the central bank adds funds to the financial system. The People’s Bank of China injected a total of 265 billion yuan ($42 billion) via reverse repos yesterday, the second-biggest amount for a single day since Bloomberg started compiling the data in 2004.
The won, which touched 1,109.57 on Oct. 8, the strongest level since Nov. 1, 2011, retreated as 13 out of 16 economists in a Bloomberg survey forecast interest rates will be cut at a central bank policy meeting tomorrow.
The peso fell 0.2 percent as data today showed Philippine exports declined in August for the first time in five months. Malaysia’s ringgit weakened 0.2 percent before a report tomorrow that economists predict will show industrial output fell for the first time in a year.
Euro Weakens
The euro weakened against most of its major counterparts, losing 0.3 percent against the dollar and yen. German Chancellor Angela Merkel urged Greece yesterday to maintain austerity while reiterating her desire to keep the country in the euro. Spain’s economy minister Luis de Guindos said the nation will decide on the “sensitive” issue of a full bailout, taking into account the impact for the whole euro area.
The euro was at $1.2845, after earlier touching $1.2836 the lowest since Oct. 1. The common currency declined to 100.44 yen, also the least since Oct. 1, before trading at 100.53. The Dollar Index, a gauge against six major peers, rose 0.2 percent.
Crude in New York declined to $91.91 a barrel after climbing to the highest close in a week yesterday on increased tension in the Middle East. Brent oil slipped 0.5 percent to $113.98 a barrel. The spread between the two contracts reached $22.49 on Oct. 8, the widest since October 2011.
London-traded Brent prices are “still high” and Saudi Arabia will work toward “moderating” them, Oil Minister Ali al-Naimi said yesterday. U.S. crude inventories probably rose by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Department report tomorrow.
Aluminum for three-month delivery on the London Metal Exchange decreased 0.5 percent to $2,043 a metric ton. Alcoa, the largest U.S. aluminum producer, said global demand for the metal will climb by 6 percent this year, paring a July projection of 7 percent.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net ; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net "
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
"Asian stocks fell for a third day, credit risk in the region rose to a one-week high and oil declined as slowing Chinese growth and Europe’s debt crisis hurt corporate profits. The won retreated from an 11-month high.
The MSCI Asia Pacific Index slipped 0.8 percent at 12:11 p.m. in Tokyo, led by Japanese shares. Futures on the Standard & Poor’s 500 Index lost 0.2 percent. Bond risk in the Asia-Pacific region rose to the highest level in at least a week. South Korea’s won weakened 0.4 percent to 1,114.80 per dollar. Commodities as measured by the S&P GSCI Index decreased 0.3 percent as oil fell 0.5 percent. Markets in Taiwan are closed.
Alcoa Inc. said slowing Chinese growth will cut global demand for aluminum, while Japanese car sales in China plunged on a territorial dispute. Data today may show French and Italian industrial production fell in August as Europe’s debt crisis hampers growth. Spain’s Prime Minister Mariano Rajoy is struggling to contain the country’s deficit as he meets with French President Francois Hollande in Paris today.
“We are clearly seeing the impact of a Chinese slowdown globally and it’s indicated in Alcoa’s numbers,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost $100 billion. “Equity markets have had a very strong run. So, it won’t be surprising if they go through some correction.”
More than three stocks fell for every one that climbed on the MSCI Asia Pacific Index. Japan’s Nikkei 225 Stock Average and the broader Topix Index slumped at least 1.4 percent. Toyota Motor Corp. sank 1.8 percent after reporting the biggest drop in China sales since at least 2008. Data today may show Chinese passenger-vehicle sales rose at the slowest pace in eight months.
Alcoa, S&P
The Shanghai Composite Index dropped 0.3 percent, led by materials producers, and Hong Kong’s Hang Seng Index slipped 0.5 percent. Aluminum Corp. of China Ltd., the nation’s biggest producer, declined at least 0.6 percent in Hong Kong and Shanghai. Alcoa, the first company in the Dow Jones Industrial Average to report results, posted earnings and sales that beat analysts’ estimates.
Third-quarter profits and sales for the S&P 500 probably fell in unison for the first time in three years, according to analysts’ estimates compiled by Bloomberg. Five years after the S&P 500 began its decline from a record, per-share earnings may have dropped 1.7 percent on average after they were little changed in the second quarter. Sales may have slipped 0.6 percent, the data show.
The cost of insuring Asia-Pacific corporate and sovereign bonds from default increased, according to traders of credit- default swaps. The Markit iTraxx Asia index of 40 investment- grade borrowers outside Japan added 3.5 basis points to 134, Credit Agricole SA prices show. The gauge is set for its highest close since Oct. 2, according to data provider CMA.
Yuan, Won
China’s yuan weakened for a third day, the longest run of declines since August, on heightened concern the economy is losing momentum. The country’s money-market rate dropped for a second day on speculation cash supply will increase as the central bank adds funds to the financial system. The People’s Bank of China injected a total of 265 billion yuan ($42 billion) via reverse repos yesterday, the second-biggest amount for a single day since Bloomberg started compiling the data in 2004.
The won, which touched 1,109.57 on Oct. 8, the strongest level since Nov. 1, 2011, retreated as 13 out of 16 economists in a Bloomberg survey forecast interest rates will be cut at a central bank policy meeting tomorrow.
The peso fell 0.2 percent as data today showed Philippine exports declined in August for the first time in five months. Malaysia’s ringgit weakened 0.2 percent before a report tomorrow that economists predict will show industrial output fell for the first time in a year.
Euro Weakens
The euro weakened against most of its major counterparts, losing 0.3 percent against the dollar and yen. German Chancellor Angela Merkel urged Greece yesterday to maintain austerity while reiterating her desire to keep the country in the euro. Spain’s economy minister Luis de Guindos said the nation will decide on the “sensitive” issue of a full bailout, taking into account the impact for the whole euro area.
The euro was at $1.2845, after earlier touching $1.2836 the lowest since Oct. 1. The common currency declined to 100.44 yen, also the least since Oct. 1, before trading at 100.53. The Dollar Index, a gauge against six major peers, rose 0.2 percent.
Crude in New York declined to $91.91 a barrel after climbing to the highest close in a week yesterday on increased tension in the Middle East. Brent oil slipped 0.5 percent to $113.98 a barrel. The spread between the two contracts reached $22.49 on Oct. 8, the widest since October 2011.
London-traded Brent prices are “still high” and Saudi Arabia will work toward “moderating” them, Oil Minister Ali al-Naimi said yesterday. U.S. crude inventories probably rose by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Department report tomorrow.
Aluminum for three-month delivery on the London Metal Exchange decreased 0.5 percent to $2,043 a metric ton. Alcoa, the largest U.S. aluminum producer, said global demand for the metal will climb by 6 percent this year, paring a July projection of 7 percent.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net ; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net "
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
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