Links: 2013-04-08

News links for 8 Apr 2013

China Buys 1 Million Tons U.S. Wheat After Price Drops – Bloomberg

“China, the world’s biggest consumer of wheat, bought almost 1 million metric tons from the U.S. as prices slumped 30 percent from a four-year high reached in July, state-owned researcher grain.gov.cn said. Wheat jumped as much as 1.4 percent after the news.”

Trust in Gold Not Bernanke as U.S. States Promote Bullion – Bloomberg

“Distrust of the Federal Reserve and concern that U.S. dollars may become worthless are fueling a push in more than a dozen states to recognize gold and silver coins as legal tender.
Lawmakers in Arizona are poised to follow Utah, which authorized bullion for currency in 2011. Similar bills are advancing in Kansas, South Carolina and other states.”

Bericht: Deutschland schuldet Griechenland Reparationen – SPIEGEL ONLINE

According to some Greek estimates, the Germans owe them 162 billion euros in reparations for the damages caused by World War 2, 108 billion for infrastructure damage and another 54 billion for forced credit.

German Industrial Production Increased in February – Bloomberg

“Production (GRIPIMOM) rose 0.5 percent from January, when it contracted 0.6 percent, the Economy Ministry in Berlin said today. Economists forecast a 0.3 percent gain, according to the median of 41 estimates in a Bloomberg News survey. From a year earlier, production dropped 1.8 percent when adjusted for working days.”

Krona Surge Aids Survival of Fittest, Swedish Export Lender Says – Bloomberg

“The krona’s strength will help discipline companies and poses little risk to the economy as a whole as imports grow more affordable, the head of Sweden’s state-owned export lender said.
“The Swedish export industry is good at being effective and streamlining and in the long term that’s the right way to go,” Peter Yngwe, head of Stockholm-based export credit provider, SEK, said in an April 5 interview. “In the short term it’s, of course, tough with a strengthening krona.”
Yngwe, whose company last year lent more than $9 billion to support Swedish exports, joins Riksbank Governor Stefan Ingves and Prime Minister Fredrik Reinfeldt in taking a hands-off approach toward the exchange rate. “

Putin: Aktivistinnen attackieren Russlands Präsidenten in Hannover – SPIEGEL ONLINE

Here’s the best picture of the protest against Putin in Hannover. Notice the two thumbs up sign from Putin and the horrified look of Merkel.

Economic Crisis Hits the Netherlands – SPIEGEL ONLINE

“The Netherlands, Berlin’s most important ally in pushing for greater budgetary discipline in Europe, has fallen into an economic crisis itself. The once exemplary economy is suffering from huge debts and a burst real estate bubble, which has stalled growth and endangered jobs.”

Japan Posts Current-Account Surplus – WSJ.com

“Japan posted its first current-account surplus in four months in February as a sharply weaker yen helped boost the value of income from investments overseas and the Chinese Lunar New Year chipped away at the trade deficit by pulling down the volume of imports.
The current-account balance, the broadest measure of what Japan earns from trade and cross-border investment, recorded a surplus of ¥637.4 billion ($6.5 billion), the Ministry of Finance said on Monday.
The result, which surpassed the ¥448.8 billion surplus expected by economists in a survey conducted by Dow Jones Newswires and the Nikkei, was a sharp reversal from the ¥364.8 billion deficit that was reported in January. However, February’s current-account balance was still down 47% from a year earlier.”

ekathimerini.com | Russia has agreed to restructure Cyprus’s 2.5bln-euro loan, says Putin

“Russia agreed to restructure a 2.5 billion-euro ($3.3 billion) loan granted to Cyprus in 2011, bowing to request by the European Commission, President Vladimir Putin said.
“We are making our own contribution” to help the island, Putin told reporters today at a joint briefing in Hanover with German Chancellor Angela Merkel. “At the request of the European Commission, we decided to restructure this debt.””

Greek banks NBG, Eurobank face state rescue | Reuters

“National bought 84.3 percent of Eurobank via a share swap in February, with a view to absorbing it as part of broader consolidation in the banking industry to cope with fallout from Greece’s debt crisis and deep recession.
But the deal raised the concerns of the “troika” of the European Commission, European Central Bank and International Monetary Fund that it would create a bank too big relative to Greece’s economy and make it difficult to sell in future.”

Where Bank Regulators Go to Get Rich – Bloomberg

“Mary Schapiro, the former chairman of the Securities and Exchange Commission, must take us for fools.
No need to worry about her and the so-called revolving door between government and Wall Street, she told the Wall Street Journal on April 2, after announcing she would be joining the Promontory Financial Group LLC as a managing director in its Washington office, in charge of its governance and markets practice. “In my case, there’s no revolving door,” she said. “I won’t ever be going back to government.”
Oh well, then, I guess that makes it OK that four months after leaving the SEC, Schapiro is joining a firm stuffed to the gills with former government financial-services regulators peddling their knowledge of Washington’s regulatory thicket to the banks and financial-services companies they once oversaw. “

Belgische tienjaarsrente blijft dalen – De Standaard

Belgian ten-year now down to record-low of 1.924%, showing that despite concerns of banking crisis, Belgium is fully coupled to the core and its debt is getting safe haven appeal.

De Grauwe: ‘Europa maakt economie kapot’ – De Standaard

Paul De Grauwe believes the new bail-in plans in Europe, in which even depositors take hits, makes the potential for a banking crisis that much larger. De Standaard, a Belgian daily, covers his thinking here. He believes small countries like Belgium are going to be sacrificed here for the sake of the needs of larger countries like Germany.

Marc to Market: Great Graphic: British Debt over the Centuries

“UK national debt as a percentage of GDP since the late 1600s.   That data itself is drawn from both government data and the work of Reinhart and Rugoff.  “

Barron’s Roundtable Part 3: – Barrons.com

“Bond-fund chief Bill Gross likes gold. Investor Meryl Witmer’s picks include Tribune, fresh out of bankruptcy. And tech expert Fred Hickey is wary of most technology stocks, except EMC.”

Barron’s 2013 Roundtable, Part II – Barrons.com

“Want a get-rich recipe? Start with our experts’ mouthwatering investment bargains in energy, retailing, banking, and more. Up this week: Abby Joseph Cohen, Brian Rogers, Oscar Schafer, and Scott Black.”

2013 Barron’s Roundtable, Part One – Barrons.com

“The members of the Barron’s Roundtable see a year of modest gains for U.S. stocks, trouble for bonds, and good news for gold. Also featured this week: the best investment bets of Felix Zulauf and Mario Gabelli. How to play deal stocks, and Japan.”

Guest post: The case for Cypriot national equity | FT Alphaville

“The result will be a Cyprus National Equity: a single consolidated fund of Cyprus undated Treasury Stock returnable in payment for Cyprus taxes.
This will be supplemented by the flow of debt repayments (after operating costs) to the Cyprus Treasury from the borrowers of nationalised banks.”

El ahorro familiar bajó 2,8 puntos hasta el 8,2% de su renta en 2012,Datos macroeconómicos, economía y política – Expansión.com

Spanish households saved 8.2% of income in 2012. Down from 11% in 2011

A banking union for the Eurozone | vox

“The crisis has highlighted the need for, and difficulties with, a Eurozone banking union. This column argues that, to make a union, you need three crucial ingredients: common supervision, a single resolution mechanism, and common safety nets. The power to control and the resources to rescue must work in parallel. Eurozone leaders have taken the first critical steps, but further progress is needed to strengthen the financial architecture of the single currency.”

China’s local government debt may be £1 trillion more than estimated – Telegraph

““It seems the central government’s debt level is quite transparent, while local government debt isn’t, and therefore it’s not easy to get a clear picture,” he told delegates at the Boao Forum this weekend.
Mr Xiang said that based on his calculations, local governments in China may have amassed more than 20 trillion yuan (£2.1 trillion) of debt, almost double the figure given in a 2011 report by the National Audit Office.”

Low bond yields luring global central banks into equities: survey | Reuters

“The annual survey of 60 central banks with a combined $6.7 trillion in reserves showed that their reserve managers were investing in markets and currencies they would not have considered until recently.
In particular, it highlighted the growing acceptance of equities and emerging market currencies.
The survey, compiled by the Royal Bank of Scotland for Central Banking Publications, was carried out in February. The average holdings of the respondents was $112 billion.”

Pension underfunding grows despite U.S. market rally: study | Reuters

“The cumulative liability among defined benefit pension plans sponsored by companies in the benchmark Standard and Poor’s 500 index increased to $1.56 trillion in 2012 from $1.38 trillion the year before, outpacing the growth in assets.
As a result, the overall funding ratio – a measure of a plan’s assets divided by its commitments – for all plans fell from 79.7 percent to 78.1 percent, the study found.
Low interest rates – which are used to calculate future benefits – were a significant factor behind the increase in pension liabilities, said Russell Walker, a vice president at Wilshire and one of the authors of the report.”

Portugal’s prime minister plans more cuts to health and education spending | World news | The Guardian

“Pedro Passos Coelho chooses not to raise taxes again in order to meet stringent targets set by international lenders”

Why Canadian homeowners are likely just as vulnerable as Americans were – Business, Econowatch – Macleans.ca

“It’s also important to note that neither the U.S. nor Canada include HELOCs in estimates of owner equity, which is rather odd given that they nonetheless represent a claim on said equity. In Canada, in particular, where the Bank of Canada estimates total consumer credit amounts to roughly $486 billion, HELOCs have been by far the fastest growing form of consumer debt in the country over the past decade.”

ekathimerini.com | Some 30,000 households a month have power supply cut

“About 1,000 electricity connections are cut every day in Greece as Public Power Corporation customers are increasingly unable to pay their power bills on time, while accumulated debts to the country’s electricity giant stood at more than 1.3 billion euros at the end of 2012. This is not only due to the economic crisis that has eaten into household incomes, but also to the special property tax paid via power bills.”

Bargain basement banks not such a bargain – FT.com

“while eurozone banks are now cheap, they are not a bargain.
Berenberg Bank suggests buying conservatively-run banks with low loan-to-deposit ratios, such as HSBC, UBS or Handelsbanken. But the rational course for equity investors – doubtless now being put into effect by hedge funds – is to sell short the shares of other banks that look more vulnerable. This is inherently dangerous. But the policy response to Cypriot events of the last two weeks has encouraged investors to do just that.”

Weak Data Expected, Led by Retail Sales – Real Time Economics – WSJ

“Economists expect the parade of weak March data to continue into next week with a reading on retail sales.
Despite higher taxes biting into paychecks, shoppers showed unexpected muscle to start the first quarter. But economists think the spending spree ended in March as miniscule job growth and flat hourly pay kept a lid on income growth.
Total retail sales, to be reported Friday, are forecast to fall 0.2% in March. Excluding autos, store receipts probably also declined 0.2%, says the median projection of economists surveyed by Dow Jones Newswires.”

Christine Lagarde: BoJ was right to launch monetary blitz – Telegraph

“The managing director of the International Monetary Fund (IMF) told an audience in China that: “Monetary policies – including unconventional measures – have helped prop up the advanced economies, and in turn, global growth,”
“The reforms just announced by the Bank of Japan are another welcome step in this direction.””

Portugal Mulls Paying Workers in T-Bills – WSJ.com

“The Portuguese government is considering a plan to pay public workers and pensioners one month of their salary in treasury bills rather than cash after a high court ruled out wage cuts, a person familiar with the situation said Sunday.
“This is one of the ideas being considered,” the person said.”

Greek PM intervenes in ‘difficult’ talks with creditors | World news | guardian.co.uk

“The first instalment, of €2.8bn, is contingent on the governing coalition agreeing to sack 25,000 civil servants by the end of the year and 150,000 by 2015. The demand has placed what is being described as “intolerable pressure” on Samaras’s already fragile administration, with his two junior leftwing partners openly opposing the measure at a time when unemployment is nearing a record 30%.”

Interview with George Soros | South China Morning Post

“Complete transcript of an interview with George Soros in Hong Kong on April 4, 2013.”

Canada provides £170m loan to Telefónica to help save BlackBerry | Technology | The Guardian

“Working capital facility to Spanish group comes as Canadian mobile phone company tries to recover from £425m loss and 40% cut in revenues”

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