Posts for 'Money' Category

China's stocks may drop as much as 10 percent over the next six months as the government curbs money supply growth to reduce liquidity and rein in property speculation, according to China International Capital Corp. “Stocks could fall 5 to 10 percent in the next three to six months as money supply growth reverts to the norm,” Hao Hong, global equity strategist for CICC in Beijing, said in a report.

China's M1 monthly money supply, which includes money in circulation and demand deposits, rose 32 percent in December from the previous year. While the level fell 6.6 percent from the previous month, the first time in 11 months, it's still “unsustainably high” compared with the average of 20 percent growth during previous peaks of China's monetary cycles, he said.

Hong recommends consumer and health-care companies, saying that they have “pricing power” and can pass off higher prices to consumers as inflation accelerates. The benchmark Shanghai Composite Index has fallen 3.8 percent this year on concern the government will tighten monetary policy to curb record loan growth and prevent bubbles in the nation's property and stock markets. Chinese property prices rose 7.8 percent in December, the fastest pace in 18 months, adding urgency to government efforts to rein in speculation.

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Asian currencies fell, led by South Korea’s won, on speculation regional central banks will intervene to stem rallies this year that risk hurting a recovery in exports. The won, Philippine peso and Indonesian rupiah all strengthened to the highest levels in at least 15 months yesterday after China reported.

A rebound in overseas sales, bolstering the outlook for global trade. Technical indicators that traders use to predict exchange-rate movements signaled the dollar was poised to climb against Asian currencies. “The market has turned a bit cautious with talk that some regional central banks are intervening” to prevent appreciation, said Suresh Kumar Ramanathan, a foreign-exchange strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “The moves yesterday were too fast for most regional currencies.”

The won weakened 0.6 percent to 1,126.35 per dollar as of 11:43 a.m. in Seoul, according to data compiled by Bloomberg, after yesterday reaching 1,117.40, the strongest level since September 2008. Malaysia’s ringgit slid 0.3 percent to 3.3465 and the rupiah fell 0.4 percent to 9,183.

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Copenhagen is a numbers game: temperatures, emissions, and allowances. But the most important numbers are probably the ones preceded by dollar signs.  “Money is even more important now the parties are coming up with only a political statement not a legally binding agreement,” says David McCauley, Principal Climate Change Specialist, Asian Development Bank.

Political statements won’t reduce emissions; cash will. So said South Africa the day before talks began. It offered to cut carbon emissions to 34 percent below expected levels by 2020, but only if the rich world provided money to help.

Then the president of the African Development Bank, Donald Kaberuka, said he wanted 40 billion dollars a year from rich countries “to enable low-income countries to adapt.” These statements crystallize the money matters at the heart of Copenhagen.

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Money can be more important than force. This is one of the messages from the British army in its first counter-insurgency warfare manual to be published for eight years. Taking in lessons learned from Iraq and Afghanistan, it says money must not be used simply as "bribes". It must be used as rewards – for intelligence, for providing local security, as compensation for the use of houses, for short-term job creation and, as it puts it, for "settling grievances which are either real or perceived".

British army commanders have long been jealous of the money available to their US counterparts. "The hoops that I had to jump through to get the very few UK pounds that were available were also amazing; the American divisional commanders were resourced and empowered in ways that we could only dream of," the new counter-insurgency field manual quotes an anonymous senior British officer as saying.

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Recently China, Russia, Brazil and other nations with large U.S. dollar investments have called for eliminating the dollar's pre-eminent position as the world's reserve currency. This sentiment was supported by a United Nations' panel, and some oil-producing countries have also started moving away from the greenback. The Organization of Petroleum Exporting Countries is discussing a general retreat from the dollar as the principle currency for international oil commerce.

World Bank President Robert B. Zoellick, a former U.S. Treasury official, has warned that the dollar's place in the global economy cannot be taken for granted. These developments should be of grave concern to U.S. policymakers.

Printing the world's currency of choice delivers substantial benefits to America, and losing that status would cause serious harm. Most fundamentally, diminishing the dollar's importance is a threat to American national security.

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 U.S. commercial paper issuance rose for an eighth straight week while bank borrowing costs held near record lows on Thursday, further evidence of improvement for struggling credit markets. However, plenty of concern remained on the economic front, forcing key European central banks to keep official interest rates on hold.

Commercial paper, a key short-term lending instrument for corporations that was buffeted heavily by the global financial crisis, showed signs of perking back up. Total loans outstanding rose by $67.6 billion to $1.299 trillion.

The U.S. central bank's Commercial Paper Funding Facility, which started in October 2008, had as much as $350.5 billion in top-rated, three-month CP in late January. Since then, its CP holdings had fallen to $42.7 billion as of last week, indicating banks are increasingly able to access funds in the private market.

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Have the words that hold so much sway over the consumer dollar been usurped? Nick Churchouse reports.

Child-trafficking, cocoa, the volatile coffee market and cotton-picking poverty. These things do not typically pop to mind when shopping, but are exactly what consumers' fair trade dollars are helping prevent.

But what makes trade fair, and who says?

Trade has been unfair for centuries, at its worst underpinning slavery, child prostitution, the corporate rape of Third World resources and a never-ending poverty cycle in developing countries.

A burgeoning social conscience is fuelling efforts to stamp out the remnants of such practices, and consumer knowledge of fair trade is the pointy end of that conscience.

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Total money market mutual fund assets fell by $21.35 billion to $3.559 trillion for the week, the Investment Company Institute said Thursday.Assets of the nation's retail money market mutual funds fell $4.97 billion in the latest week to $1.163 trillion.

Assets of taxable money market funds in the retail category fell by $4.12 billion to $908.46 billion for the week ended Wednesday, the Washington-based mutual fund trade group said. Retail tax-exempt fund assets fell $850 million to $254.18 billion.

Assets of institutional money market funds fell by $16.38 billion to $2.396 trillion for the same period. Among institutional funds, taxable money market fund assets fell by $16.21 billion to $2.211 trillion; assets of institutional tax-exempt funds fell by $170 million to $185.53 billion.

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FOREIGN Minister Shah Mehmood Qureshi has returned from Istanbul emptyhanded. The Malakand Pilot Project that he took with him to the meeting of the FoDP, containing the required technical details and how the money needed was to be spent, won praise.

So did his briefing regarding the momentous task of handling millions of internally displaced persons, setting up camps, distributing more than 100,000 tons of food and arranging education for over 50,000 students.

The Foreign Minister had a series of meetings with his counterparts from friendly countries. He, however, failed to secure pledges of urgent support. While the Tokyo meeting held in April had pledged some $5.7 billion in aid, what Pakistan has received so far is a paltry $300million.

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Among the issues for our legislative branch to ponder is the topic of financial regulatory reform. This is the touchy area of how and why the economic meltdown happened in the past year and preventing the next banking crisis from ever happening again. Within the reform is a proposal regarding IRAs that will attempt to get more workers to save for retirement.

This proposal is for employers to set up mandatory automatic- enrollment IRAs. And if the plan passes, companies would put employee contributions into IRA accounts through direct payroll deposits. We all know how easily we put off financial decisions. The benefits packet is full of forms and charts and typically there are web sites with all the self-help tools.

Even the decision of choosing a mutual fund from the vast selection offered by the 401(k) provider, can be intimidating. So the busy employee does nothing. It is a real shame to have an employee retirement plan offered and not to seize the opportunity. In some cases, that avoidance means missing a matching contribution from the employer as well.

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