Mainstream News

China’s brokers pledge to buy stocks to prop shaky markets

"China’s top securities brokerages said on Saturday that they would collectively buy at least 120 billion yuan ($19.3 billion) of shares in a bid to stabilize the country’s stock markets after a slump of nearly 30% since mid-June. The pledge follows near-daily official policy moves over the past week, including an interest rate cut and a relaxation of margin lending rules, that have so far failed to arrest the sell-off, which some market watchers fear could turn into a full-blown crash. While brokerages were likely to focus on stronger, blue-chip companies, Hao said there would be little interest in saving small and wildly overvalued 'growth' firms. Such companies are favored by ordinary investors." Continue reading →

Continue ReadingChina’s brokers pledge to buy stocks to prop shaky markets

MSCI backs itself into corner on China share inclusion into global index

"MSCI’s decision to defer including Chinese shares in its emerging market benchmark share indexes for a second time may have trapped the index provider into making promises it can’t keep, both to Beijing and to its investor constituents. MSCI’s clients want Beijing to open its capital accounts so they can reliably move their money in and out of China’s markets, but the economy is facing its slowest growth in decades, which has led to capital flowing out of the country. For China, inclusion in the index could over time bring an estimated $400-billion into its stock markets and would help in its drive to internationalize the yuan currency." Continue reading →

Continue ReadingMSCI backs itself into corner on China share inclusion into global index

Greek bank official dismisses ‘haircut’ report as “baseless”

"Greek leaders have repeatedly dismissed the possibility they will have to 'bail-in' depositors to prevent the collapse of the banking system. But citing bankers and businesspeople with knowledge of the measures, the Financial Times reported: 'The plans, which call for a 'haircut' of at least 30 percent on deposits above 8,000 euros, sketch out an increasingly likely scenario for at least one bank.' The report quoted a source as saying: 'It (the haircut) would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout programme.' The head of Greece's Bank Association dismissed the report as 'completely baseless'." Continue reading →

Continue ReadingGreek bank official dismisses ‘haircut’ report as “baseless”

Chicago Public Schools’ pain is these financial firms’ gain

"Struggling to make payments for pensions and pay down billions of dollars in debt, the Chicago Public Schools last week announced 1,050 layoffs and $200 million in spending cuts to keep the school system afloat. Dozens of financial and legal firms have been paid $18.1 million in fees from CPS borrowing and debt-refinancing deals since 2011, according to records obtained by the Chicago Sun-Times. CPS still owes billions on borrowing deals dating to the mid-1990s, when then-Mayor Richard M. Daley took formal control of the school system, which then began renovating and building schools using borrowed money." Continue reading →

Continue ReadingChicago Public Schools’ pain is these financial firms’ gain

Puerto Rico’s Crisis Deals a Blow to Municipal-Bond Funds

"In a low-interest rate world, Puerto Rico’s bonds have offered investors juicy yields over the past several years. Puerto Rico’s $3.5 billion in general-obligation bonds issued in 2014 initially had a yield of 8.7%. The yield on 10-year U.S. Treasury notes, by contrast, hovered between 2% and 3% last year. But now investors are getting a fast lesson on the risk that comes with those sorts of high yields. More than half of all U.S. municipal-bond funds, or 298 of 565, have invested in Puerto Rico’s debt, according to the most recent fund holdings compiled by Morningstar." Continue reading →

Continue ReadingPuerto Rico’s Crisis Deals a Blow to Municipal-Bond Funds

Greeks awake to shuttered banks on day after voters reject austerity

"Greeks awoke Monday to the stark reality of the country's accelerating crisis — shuttered banks and ATMs with little cash — hours after they voted resoundingly to reject more austerity measures in exchange for another bailout. The results — 61% voted 'no,' compared with 39% for 'yes' — left the bankrupt country's future in the European Union and its euro currency uncertain. Greece entered a second week of severe restrictions on financial transactions and faced the prospect of even limited amounts of cash drying out, with no prospect of an immediate infusion. Greece imposed the restrictions to stem a bank run after the vote was called and its bailout program expired." Continue reading →

Continue ReadingGreeks awake to shuttered banks on day after voters reject austerity

Greece defaults on $1.7 billion IMF payment

"Greece became the first developed country to default to the IMF, an organization of 188 nations that tries to keep the world economy stable. Greece will now be cut off from access to IMF resources until the payment is made. The move came hours after the country made a desperate attempt Tuesday to halt its plunge into economic chaos by requesting a new European bailout. Greece asked for a two-year bailout from Europe, its third in six years. Greek banks remained shut Tuesday and limits on cash withdrawals were in place as the country tried to stave off financial collapse before the vote. Daily withdrawals are limited to 60 euros, or about $67." Continue reading →

Continue ReadingGreece defaults on $1.7 billion IMF payment

China’s Stocks Enter Bear Market as Rate Cut Fails to Stop Rout

"Chinese stocks tumbled, sending the benchmark index into a bear market, as signs of an exodus by leveraged investors overshadowed the central bank’s effort to revive confidence with an interest-rate cut. The retreat marks an end to the nation’s longest-ever bull market, a rally that’s lured record numbers of individual investors and convinced traders to bet an unprecedented amount of borrowed money on further gains. Zhang Gang, a strategist at Central China Securities strategist in Shanghai, called Monday’s losses 'panic selling' that will likely continue as margin investors are forced to liquidate their holdings and the recent selloff spurs more mutual fund redemptions." Continue reading →

Continue ReadingChina’s Stocks Enter Bear Market as Rate Cut Fails to Stop Rout

Indian in US? Your Account is Now Under Delhi Surveillance

"Thousands of Indian citizens in the US – from IT workers, health professionals, students and everyone else under the sun – will soon be innocent victims to snooping by the Indian government. If an Indian citizen holds a bank account in the US, minute details about his/her bank account will be shared with New Delhi by Washington. Although India gets access only to bank account information of Indian citizens, the US can get access to even information of 'non-US entities' operating in India if it has even one American working for them. That means information about any Indian corporation or organisation would be provided to Washington on request, if it has an American on rolls." Continue reading →

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Russia boosting gold holdings as defence against ‘political risks’

"Russia is increasing its gold holdings because gold is a reserve asset that is free from legal and political risks, a senior central banker said on Tuesday. The comments by Dmitry Tulin, who manages monetary policy at the central bank, reflect Russian fears that the country's overseas assets could be frozen as part of a possible toughening of Western sanctions over the Ukraine crisis. 'As you know we are increasing our gold holdings, although this comes with market risks,' Tulin told lawmakers in the lower house of parliament. 'The price of it (gold) swings, but on the other hand it is a 100 percent guarantee from legal and political risks.'" Continue reading →

Continue ReadingRussia boosting gold holdings as defence against ‘political risks’