The Deutsche Bank crisis could take Angela Merkel down – and the Euro

MATTHEW LYNN
Matthew Lynn 26 SEPTEMBER 2016 • 4:43PM

The Telegraph

here are some words that make such an unlikely pairing that we find it hard to put them together.  Italy and efficiency, for example. Or Bake Off and Channel 4. And ‘Germany’ and ‘banking crisis’ is another one. Our image of German banks, and the German economy, as completely rock solid is so strong that it takes a lot to persuade us they might be in trouble.

And yet it has become increasingly hard to ignore the slow-motion car crash that is Deutsche Bank, or to avoid the conclusion that something very nasty is developing at what was once seen as Europe’s strongest financial institution. Its shares have been in free-fall for a year, touching a new low of 10.7 euros on Monday, down from 27 euros a year ago. Over the weekend, the German Chancellor Angela Merkel waded into the mess, briefing that there could be no government bail-out of the bank.

COSCO sees Greece's Piraeus among world's top 30 ports by 2018

Thu Sep 22, 2016 | 2:10pm EDT

Reuters

By Angeliki Koutantou | ATHENS
China's biggest shipping company, COSCO Shipping, plans to ramp up container volume at Greece's biggest port in Piraeus by 35 percent by 2018, the port's new managing director, Fu Cheng Qiu, told Reuters on Thursday.

COSCO Shipping, which owns the world's fourth-largest container shipping fleet, bought 51 percent of the port's operating company last month for 280.5 million euros ($315.5 million), one of Greece's biggest and most strategic privatizations since a debt crisis began in 2009.

Why Euro Looks Stuck Even as Fed Gears Up to Move

On a trade-weighted basis, the euro has actually risen since quantitative easing started in 2015
The Wall Street Journal

By RICHARD BARLEY
Aug. 30, 2016 7:36 a.m. ET
3 COMMENTS
Once upon a time, signs the Federal Reserve was gearing up to increase rates would have been big news for the euro. Policy divergence was a key focus for foreign-exchange traders. But times have changed.

True, the euro declined against the dollar in the wake of the Jackson Hole conference, but it was far from an extraordinary move. And the bigger picture is that at $1.117, the single currency is in the middle of a relatively narrow range that has held since February.

This economist thinks China is headed for a 1929-style depression

Published: June 30, 2016 2:23 p.m. ET

MarketWatch

Andy Xie is among the loudest voices warning of an inevitable implosion

By SUE CHANG
MARKETS REPORTER

Andy Xie isn’t known for tepid opinions.

The provocative Xie, who was a top economist at the World Bank and Morgan Stanley, found notoriety a decade ago when he left the Wall Street bank after a controversial internal report went public. Today, he is among the loudest voices warning of an inevitable implosion in China, the world’s second-largest economy.

Xie, now working independently and based in Shanghai, says the coming collapse won’t be like the Asian currency crisis of 1997 or the U.S. financial meltdown of 2008.

World stocks, sterling fight back after Brexit beating

Tue Jun 28, 2016 5:11am EDT Related: HOUSING MARKET, DAVOS
LONDON | BY MARC JONES
Reuters

World stocks rose for the first time in three days and sterling and the euro climbed on Tuesday, as investors made a rush for Brexit-bashed assets hammered by some of the biggest falls since the 2008 collapse of Lehman Brothers.

Bargain hunting trumped still widespread uncertainty over Britain's vote to leave the European Union, as the bloc's leaders, including soon-to-be-ex UK Prime Minister David Cameron, headed for their first post-vote meeting in Brussels.

European shares .FTEU3 jumped 2.4 percent in early trading having plunged over 10 percent since Friday.

Forecast Bright for Greek Tourism, Despite Refugee Crisis

Voice of America
http://www.voanews.com/content/greece-tourism/3332701.html

Margaret Besheer
May 16, 2016 3:10 PM

Despite the ongoing migrant and refugee crisis, Greece expects to welcome a record 27 million tourists this year.

“I think it’s an achievement given the fact that we have capital controls, we still have the refugee and migration crisis - which make tourists think twice if they want to visit Lesbos or some other places that are migration hubs,” the government’s top spokesperson Lefteris Kretsos told reporters on Monday.

“Greece is a brand name in tourism. It was always, and I think it will always be,” he added.

Like the US, China wants a national electricity grid. Unlike the US, China’s just building it.

Vox
http://www.vox.com/2016/3/30/11332900/china-long-distance-transmission
Updated by David Roberts on March 30, 2016, 3:00 p.m. ET

Wind and sunlight are often concentrated in sparsely populated, remote areas. Getting wind and solar power to the population centers where it's needed involves building long-distance power lines. Lots of them.

Earlier this week I wrote about a new long-distance power line in the US and the long, slow path it took to win approval. It was proposed in 2009; construction is expected to begin next year and finish in 2020. Like everything involving electricity in the US, it had to navigate a skein of overlapping jurisdictions, multiple state and local authorities, and federal rules. Every landowner and stakeholder had their say.

So I chuckled when I ran across this Reuters headline yesterday: "China pushes for mandatory integration of renewable power." That's the other way to do it!

China Weighs Letting Banks Sell Bad Debt to Investors

By CHRIS BUCKLEYMARCH 12, 2016

The New York Times


BEIJING — China is exploring a new way to grapple with its mounting pile of bad corporate debt, though its top central banker sought on Saturday to dispel worries that the plan would simply shift the burden to other parts of the country’s vast economy.

Under the tentative proposal, Chinese officials would allow banks saddled with growing quantities of bad loans to sell that debt to investors, said Zhou Xiaochuan, the governor of the People’s Bank of China. The goal is to help alleviate one of the major drags on China’s economy, the world’s second largest after the United States’ and a major driver of global growth.

But Mr. Zhou and a deputy central bank governor, Pan Gongsheng, said they would take steps to make sure the effort did not create the kind of risk-laden financial products that played a major role in the 2008 global financial crisis. The effort would be modest, regulators would monitor it closely, and mom-and-pop investors would be kept out, they said.

“There’s no need to exaggerate,” Mr. Zhou said at a news conference held as part of China’s annual legislative session in Beijing. “There’s not certainty that this would be a very big market.”

China’s Outflows of Money Slowed in February

By KEITH BRADSHERMARCH 7, 2016

The New York Times

HONG KONG — Few economic statistics have gone as quickly from obscurity to the center of attention from international financial markets lately as China’s foreign currency reserves, widely seen as the best barometer of how long China can avoid a possible devaluation someday of its own currency.

Monthly changes in the reserves these days mainly reflect how much money is being sent out of the country by Chinese companies and families nervous about the country’s economic slowdown and sweeping anticorruption investigations. Over the last five weeks, the Chinese government has waged an aggressive campaign to stem the outflow, through almost daily pledges by officials not to devalue and through much tighter enforcement of the rules on sending money overseas.

Forget fracking. Choking and lifting are latest efforts to stem U.S. shale bust

Thu Mar 10, 2016 2:32am EST Related: GLOBAL ENERGY NEWS
BY SWETHA GOPINATH AND AMRUTHA GAYATHRI

Reuters

Something is awry in the beleaguered U.S. shale patch: older wells, which normally gush oil or natural gas in their first few months before rapidly depleting, are not petering out as quickly as they should.

When oil prices began falling a year and a half ago in the deepest rout in a generation, many analysts expected U.S. crude production, especially from fracking in the new shale plays that contributed to a global supply glut, to follow quickly.

Are investors starting to not care about China?

Seema Mody
2-3-2016
11 Hours Ago

CNBC

The news out of China, bad or good, just doesn't seem to have as much bite anymore.

Sure, downbeat Chinese economic data on the first day of trading in 2016 ignited a global market sell-off. But as the year has worn on, the impact is diminishing.

Tuesday's disappointing manufacturing data showing activity at Chinese factories in February contracted and was at the lowest level since November 2011 didn't translate into higher stock market volatility or investor angst. In fact, U.S. markets surged as traders' focus turned elsewhere.

Similarly, news to start the week that China's central bank was cutting reserve requirements failed to generate a rally, as monetary easing otherwise might.

China's PMI Reports Show Slowdown Deepening as Services Slip

  Bloomberg News
March 1, 2016 — 3:01 AM EET Updated on March 1, 2016 — 9:11 AM EET

Bloomberg

China's factory gauge extended its stretch of deteriorating conditions to a record seven months while a measure of services fell to the weakest in seven years, underscoring the challenge for policy makers as they seek to cut overcapacity in manufacturing without derailing growth.
The manufacturing purchasing managers index dropped to 49 in February, missing the median estimate of 49.4 in a Bloomberg News survey of economists. It hasn’t been weaker since January 2009. Numbers below 50 indicate conditions worsened. In a sign China’s slowdown is spreading, the non-manufacturing PMI -- which has been outperforming the factory measure -- fell to the lowest level since December 2008.

What Russia's Failing Economy Means For Putin's Legacy And Military Ambitions

The WorldPost spoke with Sergey Aleksahenko, former deputy chairman of the Russian Central Bank.
 02/20/2016 08:01 am ET | Updated 2 hours ago

THe Huffington Post

The World Post


Alexandra Ma
Editorial Fellow, The Huffington Post


Russia is in the middle of its worst economic crisis since 2008.

The country's economic output declined by 3.7 percent in 2015 and is projected to decrease by a further 1 percent in 2016, according to International Monetary Fund estimates published in January. Inflation soared to 15.4 percent in 2015, compared with 7.8 percent in 2014.

The decline is partly the result of the international sanctions imposed following Russia's annexation of Crimea in March 2014. Large trade and investment partners, including the European Union and the United States, cut off Russia's access to foreign loans and capital markets and froze assets belonging to high-level Russians.

Cheap Cigarettes Are Burning Greece's Finances

By Nikos Chrysoloras

February 8, 2016 — 2:01 AM EET

On an unremarkable morning on Stournari street in downtown Athens, just a few blocks away from the epicenter of every riot the city has seen during its recent crisis years, two men of Asian origin politely and openly hawk cigarettes to passersby.

The illegal packs of R.G.D.-branded smokes cost 1.50 euros ($1.70) each, less than half the price of 20 Marlboros or Prince at one of Greece’s ubiquitous street kiosks.

As Prime Minister Alexis Tsipras walks another tightrope between creditor demands for additional belt tightening and a social backlash, the scene exposes an unhealthy truth: Greeks could smoke, drink and gamble their way out of their next financial hole, if only they were taxed on all of it.

BofA: The Oil Crash Is Kicking Off One of the Largest Wealth Transfers In Human History

A $3 trillion shift year from oil producers to global consumers.

 Joe Weisenthal

 TheStalwart

February 1, 2016 — 4:49 AM EET

Bloomberg

Economists are still hotly debating whether the oil crash has been a net positive for advanced economies.

Optimists argue that cheap oil is a good thing for consumers and commodity-sensitive businesses, while pessimists point to the hit to energy-related investment and possible spillover into the financial system.

A new note from Francisco Blanch at Bank of America Merrill Lynch, however, puts the oil move into a much bigger perspective, arguing that a sustained price plunge "will push back $3 trillion a year from oil producers to global consumers, setting the stage for one of the largest transfers of wealth in human history."

Blanch and his team already see evidence that the fall in the price of crude is having a positive impact on demand, and say that it could accelerate even further if prices don't pick up.

As Taiwan’s Workers Flock to China, Concerns About Economy Grow

By AUSTIN RAMZYJAN. 13, 2016

The New York Times

TAIPEI, Taiwan — Jason Lee spent most of the last decade building a business in a field for which Taiwan is famous. With three friends, he founded an animation studio here, churning out TV shows and special effects for games and films.

But costs rose and orders dried up, and they closed up shop in 2011. A few years later, Mr. Lee left Taiwan for mainland China, where he was hired to run an animation studio in the city of Qingdao. Five months ago, he started his own studio there. He has 20 employees, a number he hopes to double after the Chinese New Year next month — growth he could not have imagined in Taiwan.

A New Economic Era for China Goes Off the Rails

By KEITH BRADSHERJAN. 7, 2016

The New York Times

HONG KONG — When President Xi Jinping of China convened a group of top officials to discuss the economy last month, the highly publicized meeting was seen as a moment of triumph.

A stock market plunge last summer, and a messy currency devaluation that followed, had faded from global view. In the relative calm, he seemed to usher in a new era of economic management, promising policy coordination at the highest levels to prevent another bout of turmoil.

Less than three weeks later, his plans have been derailed as China’s stock market and currency once again rattle investors around the world. The latest rout sets up a challenge for Mr. Xi, who has positioned himself as the master of the country’s economy.

Stocks Fall Sharply on China Slowdown Worries

Stoxx Europe 600 falls 2.2%, led by 3.3% drop in Frankfurt’s exporter-heavy DAX index

The Wall Street Journal

By RIVA GOLD

Jan. 4, 2016 4:20 a.m. ET

1 COMMENTS

Global stocks sold off sharply on the first trading day of 2016 following fresh signs of an economic slowdown in China.

Weaker-than-expected manufacturing data and a falling currency triggered declines in mainland Chinese stocks so steep that authorities halted trading there for the rest of the day.

European stocks also fell sharply, with the Stoxx Europe 600 down 2.2% in early trade, led by a 3.3% drop in Germany’s exporter-heavy DAX index.

The euro area's uninspiring recovery

Sep 2nd 2015, 13:29 BY P.W. | LONDON

Economist

EARLIER this year, a genuine revival in the euro area appeared to be under way. European equity markets were buoyant and consumers had become more confident. The recovery, which had been faltering and feeble since the spring of 2013, looked set to accelerate. That bout of optimism has proved fleeting and there is now increasing doubt about whether the euro area can pull itself out of a rut of low inflation and sluggish growth. The European Central Bank (ECB) is not expected to act on September 3rd when its governing council meets. But it may well indicate a preparedness to provide more stimulus, if necessary.

Get Receipts, Win a Car: How Greece’s VAT Lottery Plan Worked in Portugal

By  PATRICIA KOWSMANN

The Wall Street Journal

Greece has been mocked for coming up with unusual measures to tackle tax evasion, from hiring students and tourists as undercover inspectors to offering lottery prizes tied to sales-tax receipts.

To know if at least one of these measures work, take a look at Portugal.

Since April last year, the Portuguese government has been running a raffle for people who demand receipts for the goods and services they buy, thereby forcing those businesses to pay value-added taxes. The result? More than 40 lucky Portuguese are now in the possession of a brand new Audi. And revenue from VAT has risen more than 4%, or €563 million ($611 million), while private consumption rose just 2%.