Asian Stocks Swing Between Gains and Losses on China CPI
By Jonathan Burgos & Sarah Jones – Jan 11, 2013 10:58 AM GMT+0700
Asian stocks swung between gains and losses as China’s inflation accelerated and Japan approved 10.3 trillion yen ($116 billion) of stimulus measures.
Agile Property Holdings Ltd., a Chinese developer whose chairman was charged this week with indecent assault, dropped 2.6 percent in Hong Kong. Sharp Corp. jumped 10 percent after the Mainichi newspaper reported that Japan’s biggest maker of liquid-crystal displays expects to post an operating profit for the first time in five quarters. Sony Corp., the nation’s largest maker of consumer electronics, added 1.3 percent as the yen fell, boosting the outlook for Japanese exporters.
The MSCI Asia Pacific Index dropped 0.1 percent to 131.96 as of 12:54 p.m. in Tokyo, erasing gains of 0.3 percent. The gauge is posed to advance less than 0.1 percent advance this week, extending increases to an eighth week, the longest winning streak since March 2012, on speculation Japan’s new government will introduce more stimulus measures and as China’s export data added to signs the world’s second-largest economy is recovering.
“Inflation is a potential threat to the market,” said Li Jun, a strategist at Central Chin Securities Co. in Shanghai. “Though it won’t trigger an immediate interest-rate increase, it will weigh on investors’ sentiment. The market lacks catalysts for more gains in January and needs to consolidate.”
China’s Shanghai Composite Index (SHCOMP) dropped 0.5 percent. The nation’s consumer prices index rose 2.5 percent in December from a year earlier, the National Bureau of Statistics said today in Beijing. That compares with the 2.3 percent median estimate of 42 analysts surveyed by Bloomberg News and a 2 percent pace in November.
Hong Kong’s Hang Seng Index (HSI) swung between gains and losses. Australia’s S&P/ASX 200 Index lost 0.2 percent. South Korea’s Kospi Index dropped 0.8 percent after the nation’s central bank left its key rate unchanged as expected.
The MSCI Asia Pacific Index (MXAP) rose yesterday to the highest level since August 2011 as Chinese export data beat forecasts. Shares on the gauge traded at 14.2 times estimated earnings, compared with 13.3 times for the Standard & Poor’s 500 Index and 12 times for the Europe Stoxx 600 Index.
Japan’s Nikkei 225 Stock Average (NKY) advanced 1.2 percent, heading for its ninth week of gains, the longest streak since December 1988, as the yen’s weakness boosted the outlook for the nation’s exporters. A weaker currency increases the overseas income of automobile and electronics manufacturers when repatriated.
The yen touched 89.35 versus the dollar, the weakest level since June 2010, on speculation the Bank of Japan will cooperate with Prime Minister Shinzo Abe’s government to ramp up efforts to stimulate the economy. Japan’s currency extended its ninth week of declines after the nation posted wider-than-expected current account and trade deficits.
“There is significant scope for the equity market to outperform in 2013 if Abe’s promised reforms are undertaken,” said Sean Darby, chief global equity strategist at Jefferies Group Inc. in Hong Kong. “A weaker yen would be beneficial for export-led sectors such as the automobile, electronics and machinery sectors.”
Futures on the S&P 500 Index were little changed today. The benchmark index for U.S. equities yesterday advanced to the highest level in five years, led by a rally in financial shares, as China’s export data added to signs the global economy is recovering.
Japan moves closer to China in holding of US Treasuries
Updated: 2012-10-17 23:13
By WEI TIAN ( China Daily)
Japan increased its holdings of United States Treasury securities by more than China did in August, making it more likely that China will cease to be the chief foreign creditor to the US.
China’s holdings of long-term US financial assets increased by $4.3 billion to $1.154 trillion in August, showing their second consecutive monthly increase after the country reduced its holdings in June, according to a report on the US Treasury Department’s website on Tuesday.
Meanwhile, Japan added $5.3 billion to its holdings in August, taking them to $1.122 trillion and extending its purchases of the assets into a fifth consecutive month.
China’s holdings have decreased by $124.9 billion in the past 12 months, or by nearly 10 percent, while Japan has increased its by $214.5 billion, or by 23 percent year-on-year.
With the difference between the two countries’ holdings now amounting to $32.1 billion, analysts say China could cease being the chief foreign creditor to the US as soon as this year.
“The huge stockpile of China’s holdings of US debt mainly results from the country’s long-term trade surplus and lack of investment channels,” said Wang Zihong, director of the economics office of the Institute of American Studies at the Chinese Academy of Social Sciences.
“But faced with greater pressure from the sluggish global economy this year, China’s trade situation isn’t allowing much of a trade surplus to exist,” Wang said.
If Japan again becomes the chief foreign creditor to the US, that change will mark the second time it has surpassed China to claim that title.
China became the largest foreign holder of US Treasury securities, overtaking Japan, for the first time in September 2008. Japan reclaimed its position in September 2010, only to cede it again later.
“Let’s not pay a lot of attention to (which country) is the number one US creditor,” Wang said. “This is not the Olympic gold metal list. We’ll just purchase the amount we need.”
“Buying and selling US debts in the short term is meant to maintain the value of our nation’s foreign currency assets, which is our top priority,” said He Weiwen, co-director of the China-US/EU Study Center at the China Association of International Trade.
China’s decision to reduce its holdings of US debt during the past 12 months showed its determination to diversify its foreign assets, he said.
“China is still going to keep a fair amount of these holdings in its portfolio, but I don’t see a need to add much more… for the recent QE3 (third round of quantitative easing) has weakened the dollar and led to a depreciation of dollar assets.
“Although historical experiences have told us that the value of the dollar is likely to rebound, we should remain cautious about US Treasury securities.”
Meanwhile, He said China is reforming its system for administrating foreign exchange.
Some think the slower purchases of US securities will leave China faced with a dollar shortage. But He said it is still too early to make such an assertion.
Japan’s Treasury purchases have come amid attempts to defend the yen against appreciation that could impede the country’s exports, He said.
Following the US Federal Reserve’s recent decision to embark on another round of stimulus, Japan has said it may intervene again in the currency market.
“We still have a great need for overseas money,” said Dominic Konstam, head of interest-rate strategy in New York at Deutsche Bank AG, one of the 21 primary dealers that trade with the Federal Reserve.
“Whatever deficit we’re running, we’re going to supply a lot of Treasuries and someone’s going to buy them. And if it’s not China, it will be someone else.”
Foreign investors made $42.9 billion in net purchases of US Treasury notes and bonds in August, down from $49.5 billion the month before. Private foreign investors bought a net total of $24.4 billion in Treasury notes and bonds after buying a net of $24 billion the previous month.
Signs suggest stable Q3 growth
Updated: 2012-10-17 23:13
By Chen Jia ( China Daily)
China’s economy in the third quarter showed signs of taking a turn for the better, a development expected to support growth, Premier Wen Jiabao said.
Many analysts saw the premier’s statement as suggesting that the country’s economic slowdown bottomed out in the past three months.
“China’s economy will continue to stabilize as government policies get further implemented,” said Wen, according to a report from the central government website on Wednesday.
The premier made those remarks at meetings he held from Friday to Monday with economists, business executives and local government officials.
The National Bureau Statistics is set to release economic data about the country’s third quarter on Thursday.
“We didn’t adopt a large stimulus package to promote growth, and many enterprises have been pushed to adjust their business structures to fight against the current risks,” Wen said.
On Thursday, top Chinese economists called for the country to lay the foundation for its own stable growth by moving more quickly to make market reforms and embracing a “new period of openness”.
China can only maintain a high rate of economic growth in the next decade by allowing industries that are able to compete internationally to develop in a relatively unimpeded way, scholars said at a forum at Tsinghua University.
The 18th National Congress of the Communist Party of China, the occasion for a change in the country’s top leadership, is scheduled take place in three weeks. Policy advisers said the government’s chief task in the coming years will be to change the country’s fundamental way of achieving economic growth.
Free competition should be encouraged among highly profitable industries, such as telecommunications and transportation, said Justin Yifu Lin, former chief economist for the World Bank.
China’s economic development in the past 32 years, result in an average annual GDP growth rate of 9.9 percent, has been “a miracle”, Lin said.
“Per capita income reached $5,400 in 2011, meaning it is already a middle-income country.”
China, if it doesn’t come to rely on a new source of economic growth, may face difficulties similar to those found in Latin American countries, he said.
Amid the sluggish global economy, China’s growth has slowed in six quarters in a row, decreasing to 7.6 percent in the second quarter this year.
At least one other economic indicator, though, rebounded slightly in September. China’s official factory Purchasing Manager’ Index increased to 49.8 from 49.2 in August, the first increase it had shown in five months.
A score above 50 on the index indicates expansion.
In addition, the rate of increase in exports bounced back to 9.9 percent from 2.7 percent in August, suggesting that market demand had become stronger.
“The pattern of economic growth has become obvious by now, as is proved by the narrowed trade surplus and the fast increase in residents’ consumption,” said Li Daokui, a former adviser to the central bank, who is also a professor at Tsinghua University.
“However, the Chinese economy may pass through a difficult period during the next three to five years, along with the restructuring, which started at the beginning of the 12th Five-year Plan (2011-15),” Li said.
The proposed market reforms are expected to boost high-tech and emerging industries’ growth and strengthen businesses’ ability to compete internationally, economists said.
“One of the priorities is to develop medium-sized and small financial institutions to channel more capital into the private sector,” Lin said.
October 15, 2012
Signs of Possible Recovery Buoy Chinese Exporters
By KEITH BRADSHER
GUANGZHOU, China — Buyers from around the world thronged the cavernous halls of the Canton Fair at its opening day on Monday as a new and somewhat more optimistic mood seemed to take hold among Chinese exporters.
With only a few exceptions, exporters of products as varied as hammers, electric fans and gaudy wall decorations for nightclubs said that demand from emerging markets and the United States was beginning to recover.
“It’s getting better,” said Zhang Lu, the sales manager of Ningbo Dabu Welding Technology, which sells welding helmets with heavily tinted safety visors and designs on the sides that include flaming skulls and American eagles.
China’s credit squeeze also appears to be easing. Chen Wenfei, the assistant general manager of Jiangmen Ruirong Pump Industry, said that a recent bank loan to buy factory equipment and rising export orders had allowed the company to hire 30 workers, bringing the total to 330.
The loan process “was very fast — we are an existing customer, and they increased our credit line,” said Mr. Chen, whose company exports water well pumps to the Mideast and North Africa.
Yet demand in China is still flat, executives from provinces across China said in interviews. Many companies still have sizable inventories of unsold goods. And while Chinese exports to many markets have been surprisingly strong this fall, sales to Europe are still falling, with no end in sight.
In the latest sign of chronic overcapacity, wholesale prices were down 3.6 percent last month from a year earlier, China’s National Bureau of Statistics announced Monday. Prices are still rising at the consumer level but at an ever slower pace, up 1.9 percent last month from a year earlier.
The mood at the Canton Fair, China’s main export fair with nearly 60,000 exhibition stalls, has nonetheless improved strikingly from the previous session of the twice-a-year event, last held in April, even though any economic recovery in China itself seems narrowly based and may not last.
The Chinese government announced Saturday that exports grew 9.9 percent last month, almost twice as fast as most forecasts, while a broad measure of the money supply also increased faster than expected.
The nascent economic recovery seems not to depend on a sustainable revival of consumer spending in China.
Instead, it appears heavily dependent on exports — which may cause additional job losses in struggling overseas economies and could result in increased calls from politicians like Mitt Romney, the Republican candidate for president of the United States, for more confrontational trade and currency policies toward China.
The early signs of an improving economy are also underpinned by investment spending, largely financed by a potentially inflationary surge in loans from state-owned banks to government construction projects.
“It seems that while people are searching for signs of China’s consumption taking the lead, it is the good old exports and investment that might lead the recovery again, at least in the short term,” Wang Tao, a China economist at UBS, wrote in a research note Monday.
Many economists expect the Chinese government to announce Thursday that economic growth in the third quarter was barely short of the official target of 7.5 percent. But Chinese business executives said that the reality was worse for many companies selling in the domestic market, leaving considerable room for a rebound.
“All industries are going down, but why aren’t the official statistics going down?” asked Bob Wang, the sales manager of Kralle Tools, a manufacturer in Wenzhou, an eastern city, that makes circular saw blades for lumber mills.
He said he believed that government officials had been underestimating the extent of China’s slowdown to avoid losing face.
Liu Jianjun, the chief spokesman for the Canton Fair, cautioned in a statement Sunday that foreign demand still had not fully recovered. “For the next few months, the export situation will remain very difficult,” Mr. Liu said.
With real estate markets in much of the world still weak, Chinese exporters of construction products are less bullish than exporters of other goods.
“This year’s business is worse than last year’s,” said Renee Wong, the export manager of Heng Feng Aluminum, which is based in Foshan in southern China and exports aluminum window frames to Africa, Australia and Poland. “It’s a hangover from the global financial crisis.”
American buyers nonetheless appeared to be more numerous than usual at the Canton Fair on Monday, with many catching the first two-hour morning train from Hong Kong. Demand from countries that export commodities and populous nations has also been unexpectedly robust.
“Australia is steady, India is strong — Europe is slowly falling asleep,” said Marlies Janssen, the Dutch chief executive of Retail D’sign Factory, a design and purchasing company based in Shanghai that specializes in vacuum cleaners and kitchen blenders.
But Japanese buyers were conspicuous by their near absence from the fair, a consequence of a territorial dispute over seven uninhabited islands in the East China Sea that set off anti-Japanese demonstrations in many Chinese cities, with dozens of Japanese cars destroyed.
Chinese exports have benefited partly from a halt to the appreciation of the renminbi, China’s currency, against the dollar this year.
The renminbi has bobbed up and down around 6.3 to the dollar, even weakening by 1 percent for a while in the summer.
Investors have been taking money out of China as the real estate market has weakened and the prospects for appreciation have faded, offsetting the continued inflows from China’s persistent trade surpluses.
The product that seemed to draw the biggest crowds at the Canton Fair was one of potentially dubious legality. It was the “stealth license plate,” a remote-controlled electric frame for car license plates that can slide a black cover over the plate in two seconds to prevent the plate from being identified by automatic cameras at toll plazas or police speed traps.
Two lights in a plug-in dashboard display indicate whether the front and rear license plates are visible.
A saleswoman for the company, ZheJiang HongXu Industrial in Yongkang City, China, said that the devices could not be sold in China but were being exported to the United States, Russia and Kazakhstan.
She fell silent when her manager loudly ordered her not to discuss the product with any journalists.
Banyak Orang Kaya di Asia Ketimbang Amerika-Eropa
Oleh: Vina Ramitha
ekonomi – Selasa, 25 September 2012 | 16:57 WIB
INILAH.COM, Singapura – Jumlah orang dengan kekayaan bersih tinggi (HNWI) di Asia, untuk pertama kalinya, melebihi Amerika Utara dan Eropa.
Laporan Capgemini dan Royal Bank of Canada (RBC) ini menyebutkan, orang kaya Asia sebenarnya sudah melebihi Amerika sejak 2011. Namun tahun ini, meski jumlah kekayaan turun, orang kaya Asia masih lebih banyak.
Kawasan Asia Pasifik kini menjadi rumah 3,37 juta HNWI atau orang-orang yang memiliki setidaknya US$1 juta untuk investasi. Di Amerika Utara sebanyak 3,35 juta dan 3,17 juta di Eropa.
Orang kaya Asia yang 54% berada di Jepang, 17% di China dan 5% di Australia, jumlah total asetnya turun ke US$10,7 triliun tahun lalu dibandingkan US$10,8 triliun pada 2010. Sedangkan Amerika Utara mencapai US$11,4 triliun.
Laporan Asia-Pacific Wealth Report oleh Capgemini dan RBC Wealth Mangement ini diawasi oleh manager-manager kekayaan, agen propertihigh-end, peritel barang mewah dan bisnis lainnya yang menjadi pilihan investasi orang-orang kaya. [ast]
Dunia akan menghadapi guncangan ekonomi jilid tiga
Oleh Barratut Taqiyyah – Senin, 15 Oktober 2012 | 06:49 WIB
WASHINGTON. Perekonomian global tengah menghadapi guncangan utama jilid tiga atas pertumbuhan dalam lima tahun terakhir. Salah satu penyebabnya adalah perekonomian emerging market, mulai dari China hingga Brazil, mencatatkan perlambatan. Hal ini memicu perdebatan seberapa besar pemerintah harus memberikan respon terhadap masalah ini.
Kejutan ketiga guncangan ekonomi diramal akan terjadi pada pekan ini, di mana China akan melaporkan pertumbuhan ekonominya yang diprediksi tumbuh 7,4% pada kuartal lalu. Jika hal itu terjadi, maka, angka itu menjadi pertumbuhan paling lambat dalam tiga tahun terakhir.
Ekonomis mengunkapkan, perlambatan ekonomi China akan memukul perekonomian negara kaya yang saat ini sudah melemah kekuatannya. Penurunan sekitar 1% atas pertumbuhan ekonomi China menyebabkan penurunan harga komoditas sebesar 1,5 poin. Kondisi ini mengancam negara-negara yang kaya komoditas seperti Kanada. Di sisi lain, 80% barang-barang dari negara ini diimpor dari Jepang, Korsel, dan Taiwan. Sementara itu, Jerman juga menderita akibat perlambatan permintaan dari capital goods mereka.
Asal tahu saja, kekuatan negara maju setelah tiga tahun pasca negara-negara industri memimpin dunia keluar dari resesi subprime mortgage, semakin menipis. Kondisi itu semakin memburuk akibat krisis utang Eropa. Salah satu buktinya dapat dilihat dari prediksi pertumbuhan Badan Moneter Internasional (IMF) yang hanya mencatatkan pertumbuhan rata-rata 5,8% dalam lima tahun hingga 2016 mendatang. Angka tersebut lebih rendah 2 percentage poin dari periode posisi lima tahu sebelum krisis 2009.
Pertemuan Menteri Keuangan di IMF dan Bank Dunia di Tokyo pada akhir pekan lalu lebih menekankan pada penanganan masalah tersebut. Pimpinan Bank Sentral Korea Selatan, misalnya, mengimbau untuk terus menambah stimulus. Sementara Rusia dan Brazil menyerukan agar negara-negara kaya segera memperbaiki kondisi perekonomian mereka.
“Ada kecemasan bahwa dalam jangka pendek, mesin yang menyokong pertumbuhan besar saat ini mengalami perlambatan pertumbuhan. Mereka tetap tumbuh, namun pertumbuhannya lebih lambat dari yang diantisipasi oleh dunia,” papar Jacob Frenkel, chairman JPMorgan Chase International.
Pertemuan IMF yang berakhir kemarin (14/10) menandai dua hal. Pertama, optimisme bahwa Eropa saat ini memiliki infrastruktur kebijakan yang dapat mengatasi guncangannya. Kedua, perpecahan pendapat antara IMF dan Jerman mengenai penting tidaknya bailout dikucurkan oleh negara-negara yang membutuhkan seperti Yunani.
Negara-negara maju termasuk Swiss, Jepang, dan Brazil saat ini tengah bersiaga seiring penguatan mata uang mereka. Sementara, para delegasi tidak menyetujui usulan besaran penghematan anggaran seiring dorongan kepada AS untuk menghindari kekacauan keuangan mereka.
“Para menteri mendiskusikan respon jangka pendek mengenai perekonomian ekonomi, namun, opini mereka tidak selaras ke satu arah. Dunia memiliki masalah kepemimpinan saat ini,” jelas Menteri Keuangan Korsel Bahk Jae Wan.
Uni Eropa Raih Nobel Perdamaian 2012
Jumat, 12 Oktober 2012 | 16:44 WIB
OSLO, KOMPAS.com – Uni Eropa meraih Hadiah Nobel Perdamaian 2012 atas peran panjangnya dalam menyatukan benua itu, kata
Komite Nobel Norwegia, Jumat (12/10). Penghargaan tersebut dipandang sebagai dorongan bagi blok itu saat berjuang untuk mengatasi krisis utang yang menggunung.
Komite Nobel memuji peran ke-27 negara Uni Eropa karena mampu membangun kembali benua itu setelah Perang Dunia II dan karena perannya dalam menyebarkan stabilitas ke bekas negara-negara komunis setelah runtuhnya Tembok Berlin tahun 1989.
“Perserikatan itu dan para pelopornya telah lebih dari enam dekade berkontribusi bagi kemajuan perdamaian dan rekonsiliasi, demokrasi dan hak asasi manusia di Eropa,” kata Presiden Komite Nobel, Thorbjoern Jagland di Oslo.
“Dalam suatu periode tujuh puluh tahun, Jerman dan Perancis telah berperang tiga kali. Hari ini perang antara Jerman dan Perancis tidak terpikirkan. Hal ini menunjukkan bagaimana, melalui berbagai upaya dengan tujuan baik dan dengan membangun rasa saling percaya, musuh sejarah dapat menjadi mitra dekat,” kata Jagland ketika menjelaskan keputusan komite itu untuk pemilihan tahun ini.
Presiden Parlemen Eropa, Martin Schulz, menyambut baik penghargaan itu dengan mengatakan, hal tersebut merupakan pengakuan rekosiliasi pasca-perang di Eropa dan akan menjadi inspirasi. “(Kami) sangat terharu dan merasa terhormat bahwa Uni Eropa meraih Hadiah Nobel Perdamaian,” kata Schulz dalam sebuah pernyataan disebarkan di Twitter.
“Uni Eropa adalah tentang rekonsiliasi. Hal ini dapat menjadi inspirasi. Uni Eropa merupakan sebuah proyek unik yang menggantikan perang dengan damai, benci dengan solidaritas.”
Lembaga penyiaran publik Norwegia, NRK, mengatakan satu jam sebelum pengumuman resmi bahwa Uni Eropa akan meraih Nobel Perdamaian.
Terkait pengumuman itu, hadiah senilai 1,2 juta juta dollar akan diberikan Komite Nobel kepada Uni Eropa di Oslo pada 10 Desember mendatang.
Jobless claims fall to lowest in four and a half years
By Doug Palmer
WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits fell sharply last week to the lowest level in more than four and a half years, according to government data on Thursday that suggested improvement in the labor market.
The news could help President Barack Obama in his tight race for re-election on November 6 against Republican challenger Mitt Romney, who says Obama has mishandled the economy.
But a second report released on Thursday hinted at weaker U.S. and global demand. The U.S. trade deficit widened in August to $44.2 billion, as U.S. goods exports fell for the fifth consecutive month and imports declined fractionally.
Initial claims for state unemployment benefits fell 30,000 to a seasonally adjusted 339,000, the Labor Department said.
It was the lowest number of new claims since February 2008, about a year before Obama took office in the midst of the global financial crisis.
“This is a positive signal for the economy. The overall trend seems to be that the labor market is improving,” said Brian Kim, a currency strategist at RBS Securities in Stamford, Connecticut.
A Labor Department analyst noted that seasonal factors had predicted a very large increase in claims last week, which he said would be typical for the first week of the calendar quarter. Unadjusted claims did rise, but far less than expected, resulting in the sharp drop in the seasonally adjusted figure.
The analyst cautioned against reading too much into one week’s figure, and noted that one state had reported a decline in claims last week when an increase was expected. He said no states had been estimated for the report.
Still, economists said the labor market was showing signs of getting stronger.
Zach Pandl, strategist at Columbia Management in Minneapolis, said “you do have to be cautious about possible distortions. But with that caveat, the jobless claims numbers have been modestly encouraging over the last few weeks.”
The prior week’s figure was revised up to show 2,000 more new jobless aid applications than previously reported.
Economists polled by Reuters had forecast claims edging up to 370,0000 last week. The four-week moving average for new claims, a better measure of labor market trends, fell 11,500 to 364,000.
U.S. stocks opened higher, while Treasury debt prices fell after the data and the dollar extended gains against the yen.
Recent data on the U.S. labor market has been encouraging.
Employers added a modest 114,000 jobs to their payrolls in September, but the unemployment rate dropped sharply to 7.8 percent, also the lowest level since Obama took office.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell to 3.27 million in the week ended September 29, the latest data available. It was the lowest since May.
The monthly trade gap increased to $44.2 billion, from an upwardly revised estimate of $42.5 billion in July, the Commerce Department said. Analysts were expecting an August trade gap of about $44.0 billion.
Overall U.S. exports dropped 1.0 percent as troubles in Europe continue to weigh on global growth, while imports fell 0.1 percent in a sign of faltering U.S. demand for consumer products, autos and capital goods.
“It looks like net exports will contribute negatively to GDP (gross domestic product) growth, subtracting as much as half a percentage point,” said Michael Moran, chief economist at Daiwa Securities America in New York.
Exports of oil, chemicals and other industrial supplies fell to the lowest level since February 2011, helping pull down the entire goods category, despite an increase in capital goods exports to the second-highest level on record.
Services exports defied the overall trend and rose to a record $52.8 billion, due mostly to an increase in professional and business services and transportation.
Services imports also set a record, reflecting licensing fees to broadcast the Summer Olympic games in Britain.
The average price for imported oil rose slightly in August to $94.36 per barrel, helping to push the monthly oil import bill higher.
A separate Labor Department report showed that overall U.S. import prices rose 1.1 percent for the second consecutive month in September, while U.S. export prices rose 0.8 percent.
Both increases were above expectations.
Analysts surveyed before the report had expected a 0.7 percent increase in import prices and a 0.4 percent rise in export prices.
(Reporting by Doug Palmer; Additional reporting by Gertrude Chavez-Dreyfus and Ellen Freilich in New York; Editing by Andrea Ricci)
Now for the soft part
The heyday of “factory Asia” may be ending sooner than anyone thought
Oct 6th 2012 | from the print edition
PARK JAE-SANG has shown the way forward. The South Korean rapper, known as PSY, this week topped the pop charts in Britain and lay second in America. His gloriously inane video, “Gangnam Style” (with some 350m online viewings so far), has proved that Asia’s economic powerhouses can lead the world in exporting intangible goodies as well as things you can drop on your foot. Facing an alarming economic slowdown, much of Asia needs to learn the lesson: service industries are the future.
That is a crude summary of the latest “Outlook” for the region published this week by the Asian Development Bank (ADB). For almost the entire region, it is far gloomier than the ADB’s previous forecast in April—if still startlingly perky by Western benchmarks. In Asia as a whole, excluding Japan, economic growth this year is expected to slow to 6.1%, from 7.2% in 2011.
Much of this can be blamed on the feeble state of the rich-world economy. Since April, fears that the euro zone is on the brink of a cataclysmic meltdown have eased somewhat. Yet they are not about to go away altogether, and optimism over the prospects for the biggest market for much of Asia’s exports is still remote. Add in an anaemic recovery, at best, in America, and the worry that its economy might tumble off a fiscal cliff in December, and the outlook for external demand is bleak. In China exports to Europe fell by about 5% in the first eight months of this year, compared with a year earlier.
Indeed, it is China that accounts for much of the regional slowdown, with the ADB’s forecast for GDP growth in 2012 cut to 7.7%, from 8.5% just in April. Year-on-year growth in the third quarter is expected to have been not much more than 7%, the seventh successive quarterly slowdown. Investment in both Chinese infrastructure and manufacturing has grown less frenetically. Economic uncertainty has acted as a drag on consumption. Yet, by the ADB’s reckoning, “external factors” account for about two-thirds of China’s slowdown.
“Internal factors are dominant”, however, in India, which has not followed the East Asian pattern of labour-intensive manufacturing and export-led growth. There the ADB has made an even sharper cut in its forecast for 2012 growth, from 7% to 5.6%. A late monsoon, continued inflationary pressures and a government that has only just started trying to escape from policy paralysis have all dented investor and consumer confidence.
Slower growth in China and India has a knock-on effect in the rest of Asia, for which China in particular is an ever more important market. Yet South-East Asia is proving rather resilient, even if the new kid on the regional block, reforming Myanmar, has too small an economy yet to have much of an impact. In Indonesia growth is driven largely by domestic demand and is still on course to reach around 6% this year. The Philippines, a new favourite among some foreign investors, may fall not far short of that. Thailand, meanwhile, has recovered rapidly from calamitous flooding in 2011.
However, developing Asia faces a challenge more fundamental than riding out another cyclical downturn in the West. The ADB has warned before of the dangers of growth fuelled by natural bounty and cheap labour. As wages rise, manufacturers find themselves unable to compete either with lower-cost producers elsewhere or, in higher-value-added products, with more advanced economies. They get stuck in a “middle-income trap”.
Now the ADB is arguing that, with demand from the advanced economies for its manufactures unlikely to pick up strongly soon, Asia needs to shift to a model based more on rising domestic demand and relying more on its service industries. As farmers’ children across Asia have left the land to work in factories, farming’s share of output has dropped, so industry’s share is now far higher than in the OECD countries. But before developing Asia’s industrialisation has run its course, the region needs to replicate the success in services, which now account for just 48.5% of its GDP, compared with 75% in advanced economies.
Asia has some extraordinary success stories in high-end services: not just the “Korean wave” washing through the world’s pop cultures, or the Bollywood movies watched from Kandahar to Kansas, but some of the world’s best airports, airlines and hotels. Then there is India’s world-beating information-technology services and outsourcing industry. Last year this produced $76.4 billion in revenues and employed 2.5m people.
That is a drop in the ocean, however, in India’s half-a-billion-strong labour force, even counting the four additional jobs elsewhere that each IT job is claimed to create. Most of those working in what count as service jobs across Asia lead less modern and productive lives: shopkeepers, rickshaw-pullers, foot-masseuses, security guards, barbers, road-sweepers, dhobi-wallahs, lift attendants, rubbish-pickers and so on. What is needed, the ADB argues, is a boost for “high-value modern services”, such as IT and finance. This would create jobs (especially for women), meet the growing need of an urbanising population for more sophisticated services, and open up new export markets.
Blocked service roads
The obstacles to this are huge, including the shortcomings of education systems, telecommunications and other infrastructure and, in the ADB’s words, “above all, burdensome regulations which protect incumbent firms”. Powerful vested interests, like some of China’s state enterprises (see article), stand in the way.
A strong service sector does not ensure an escape from the middle-income trap, or lessen the importance of industry. The two places where services have leapfrogged manufacturing, India and the Philippines, are a long way from rich-country status. But without more developed services, Asia will struggle to generate the decent jobs its people will need as it gets used to what the ADB calls a “new era of moderate growth”.
Analysis: Greek reform pledge on trial as state sales resume
By Anthony Deutsch and Harry Papachristou
ATHENS (Reuters) – As Greece’s privatization program resumes this month, nearly half a year behind schedule, at stake is not just the billions of euros it needs to raise, but the credibility of its commitment to reforms demanded by its creditors.
Greek politicians are under intense pressure at home to resist foreign calls to sell state assets on the cheap and raise fast cash to pay down government debt.
More challenging still will be efforts to use privatization as a tool to uproot corrupt business practices and restore foreign investors’ confidence in Greece.
The 15-month-old Hellenic Republic Asset Development Fund aims to transform dozens of state businesses to increase value before leasing or selling them through a series of tenders.
The first major sales – gambling company OPAP, state gas business DEPA and several prime real estate projects – could be completed as early as the first quarter of 2013, putting the fund back on track after wildly missing a 3 billion euro target this year. It now expects to generate just 300 million in 2012.
Many hope privatization proceeds will help break the cycle of austerity and recession in Greece, where economic output has declined by almost a quarter since 2008 and unemployment is nearing 25 percent.
Greece, the most indebted euro zone nation relative to GDP, has repeatedly missed targets set under its EU/IMF bailouts and risks being forced out of the single currency.
If successfully executed, economists say the privatizations could add an annual 3.5 percent to GDP from 2013, enough to return Greece to growth, and create 150,000 long-term jobs.
A leading fund official said the delays had been largely down to the need to get companies in a state to sell.
“As the interest for Greece is waning, you can’t proceed with tenders where the assets are not 100 percent clean and attractive,” the official said on condition of anonymity.
“We’re having a deep dive in all the companies to single out all the major issues the companies have, to deliver them to the market,” he said.
WOOING FOREIGN INVESTMENT
To create greater transparency and attract foreign investors, the fund was set up in July 2011 as an independent agency, with English as its official language.
Its core task is raising 19 billion euros by 2015, but more important will be how Greece is perceived by international markets to be meeting criteria for its 173 billion euro bailout.
“It is absolutely critical we send a signal of change,” the top official said.
The privatization fund got off to a rocky start, with repeat general elections in May and June having stalled activity by more than five months. Its first head, Costas Mitropoulos, quit less than a year into the job, citing a lack of political will.
“The newly elected government has not given … the necessary level of support,” he wrote in a July resignation letter. “On the contrary, in an indirect but systematic manner, the government has acted to undermine the authority and credibility of the fund.”
A high-level Greek official speaking on condition of anonymity said the current privatization target, down from an initial 50 billion euros, is still unrealistic because “the credibility of Greece is at a low”.
Investors are more interested in high-yield government bonds than sinking money into 30-year infrastructure projects with uncertain outcomes, the official said, citing conversations with major U.S. fund managers.
WINDS OF CHANGE
Still, there are signs business practices are changing for the better in a country one official jokingly called “the last Soviet-style economy in Europe”. One good example came early this year.
Russian oil executive and former energy minister Igor Yusufov strolled into the fund’s Athens office “with a buxom blonde woman on one arm and a gold watch on the other. He offered 250 million euros in cash (to buy the entire Greek gas network)”, said a person who was in the room.
In pre-crisis Greece, a deal might have followed, enriching powerful individuals but robbing the Greek people of the true value of the state assets.
Instead, Yusufov’s investment vehicle, Fund Energy, was dropped from the tender process for DEPA, the public gas corporation 14 companies are now bidding for, which is expected to fetch more than four times that amount.
Fund Energy did not confirm the details of its prior involvement. It complained at the time that its exclusion from the tender process was “unlawful”, but said this week it was still interested in Greek energy assets.
The privatization program requires a raft of bureaucratic reforms. At least 77 technical regulations, government decrees and ministerial guidelines must pass through Greece’s notoriously slow legislature, including the creation of new market regulators.
In September, the first small deal was reached when the fund said it would raise at least 81 million euros from the long-term lease of a shopping mall that once housed the broadcast center for the Athens 2004 Olympics.
Next month, the sale of the highly profitable State Lotteries operator is expected, followed by the state’s remaining 33 percent in football betting monopoly OPAP and a controlling stake in DEPA.
Other businesses and properties slated for privatization are regional ports, airports and a multi-billion-euro, top seaside property at the site of the former Athens airport of Hellenikon.
“The finance minister and the prime minister are very keen to show the Europeans things are moving ahead, and a key priority is to show privatization is being accomplished,” said Wolfango Piccoli of Eurasia, the political risk consultancy.
“It’s a huge priority for the government. Not just revenue, but most important is to send a signal.”
(Additional reporting By Douglas Busvine; Editing by Will Waterman)
IMF Shakes Austerity Orthodoxy for New Pragmatism
IMF Shakes Austerity Image
Illustration by Bloomberg View
By the Editors Oct 9, 2012 5:30 AM GMT+0700
Five years ago, the International Monetary Fund was looking for a role. Thanks to the global recession and its aftermath, it has one.
Today, if the IMF didn’t exist, governments would have to invent it. At a time of global economic peril, the agency serves not just as an emergency lender to distressed governments but also as an indispensable forum for economic collaboration and accountability.
At the IMF’s annual meeting, which takes place this week in Tokyo, finance ministers and central bankers will again explain their policies to one another and discuss cooperating more effectively. Just a talking shop, a skeptic might say.
True, real policy coordination is still an ambition more than a reality, and much more needs to be done (especially in cross-border financial regulation, to name just one area). Yet don’t dismiss the value of the IMF as a global economic secretariat and font of collective knowledge.
Changes in its worldview can shift the terms of the discussion among governments and exert a subtle pressure on policy. If investors and opposition politicians paid closer attention and helped to press the case at the national level, governments would find the IMF’s advice even harder to ignore, which would be a good thing.
The IMF used to demand a severely conservative orthodoxy in fiscal and financial affairs. Its officials never saw a budget deficit that wasn’t too big or a financial restriction that wasn’t choking growth. As a dispenser of aid to governments under financial duress, the IMF could insist on its way or else, and rarely flinched from doing so.
That made the IMF controversial, and in some quarters detested. It was attacked, including by economists with Nobel prizes, for acting as an instrument of capitalist oppression, concerned only with the repayment of odious debts and to hell with the human consequences. Almost always, in fact, the IMF’s role was merely to explain the facts to government officials who would prefer not to hear them.
That much, at least, hasn’t changed. But the facts have, and so has the IMF’s thinking. In the past few years, through public statements and its many publications, the IMF has moved a great distance.
On fiscal affairs, its watchword is no longer “austerity now” but cautious pragmatism. It used to be more fiscally conservative than the average government. For the moment, it’s arguably less so, often emphasizing the dangers of too much fiscal tightening too soon.
On international capital flows, where it once deplored any and all restrictions, it’s coming around to judicious use of controls under certain circumstances.
Inflation was previously the spawn of the devil; the new view says it’s bad, but there can be worse things. When demand is deficient and fiscal restraint unavoidable, says the IMF’s new World Economic Outlook, adequate and possibly unorthodox “monetary accommodation” (which it might once have called gambling with inflation) is vital.
On all these points, we agree. The recession has thrown doubt on a lot of supposed certainties — or should have. With interest rates pinned at zero, fiscal policy must shoulder a bigger role in countries where public debt isn’t so high as to rule out stimulus. In today’s accelerated financial markets, cross-border capital flows can be so disruptive (especially in developing or undiversified economies) that mild controls, intelligently applied, might sometimes be better for growth and stability than laissez faire.
Digging out from a balance-sheet recession — one brought on by excessive debt and prolonged by sustained deleveraging — may require a bit more tolerance of inflation risk than usual, if the alternative threatens to be endless recession and outright repudiation of debt. That trade-off ought to at least be calmly examined, not ruled out of bounds.
As a member of the “troika” (along with the European Commission and the European Central Bank) policing fiscal reform in the euro area, the IMF is the one sounding the alarm about self-reinforcing cycles of austerity and recession.
While insisting, as it should, that plans for better, medium-term fiscal control in countries with bailout programs are real, it’s warning against doing too much, too soon — in marked contrast to statements from Berlin and other European capitals.
Addressing the U.S., the IMF implores Congress and the Barack Obama administration to deal as quickly as possible with the fiscal cliff of abrupt spending cuts and tax increases that will take effect in January unless legislation is passed.
In each of these debates, the new pragmatic IMF is the voice of reason. It’s impressive to see such a culturally conservative institution leading this change, rather than being reluctantly dragged along. We’ll be even more impressed when governments start acting on its advice.
October 8, 2012
World Bank Lowers Asian Growth Forecast
By BETTINA WASSENER
HONG KONG — The developing economies of East Asia will grow less rapidly this year than previously expected, the World Bank said on Monday, but domestic demand and economic stimulus measures will allow growth to accelerate again next year.
The euro zone crisis and a looming “fiscal cliff” in the United States continue to pose “considerable risks” to the global outlook, but in East Asia and the Pacific — a region that includes countries such as China, Thailand and Indonesia but not Japan and India — robust domestic demand is helping growth remain well above that in other parts of the world, the bank said in its latest report on the region.
The World Bank cut its forecast for the region to 7.2 percent this year, from a previous projection, made in May, of 7.6 percent. The number is also sharply lower than the 8.2 percent expansion the region managed in 2011.
The bank also lowered its forecast for 2013 to 7.6 percent from the 8.0 percent it had projected in May.
The reduced forecasts are the latest in a string of such cuts by economists around the world as they assess the impact of slowing demand for Asian goods in the West’s struggling economies.
Last week, the Asian Development Bank said it expected emerging Asia — a wider grouping of countries than those included in the World Bank’s report on Monday — to expand just 6.1 percent this year, and 6.7 percent in 2013.
Still, resilient domestic demand looks likely to compensate for the drop-off in external demand, and combined with stimulus measures announced by governments across the region, should lead to slightly faster growth again next year, the World Bank said.
“Weaker demand for East Asia’s exports is slowing the regional economy,” Pamela Cox, World Bank east Asia and Pacific regional vice president, said in a statement Monday. “But compared to other parts of the world, it’s still growing strongly, and thriving domestic demand will enable the region’s economy to bounce back to 7.6 percent next year.”
Most major central banks in Asia have sought to prop up growth by lowering interest rates; some, including the Chinese central bank, have also lowered the reserves that banks need to hold against deposits, which frees up more cash for them to lend.
For China, the World Bank now expects growth of 7.7 percent — a downward revision from its previous forecast of 8.2 percent, and a sharp slowdown from the 9.3 percent expansion recorded last year.
Gross domestic product data for the third quarter of this year, due out on Oct. 18, are expected to further underline China’s slowdown; economists polled by Reuters expect the economy to have expanded just 7.4 percent compared with the same period last year. The second-quarter figure was 7.6 percent.
The World Bank noted Monday that ambitious investment plans announced by some local governments could face funding constraints, “not least because governments are feeling the pinch of a cooling real estate market, which lowers land sales revenues.”
Moreover, it said, Chinese policy makers are having to balance support for growth with concerns of a rebound in housing prices — a balancing act that is reducing their ability to take more forceful stimulus steps.
On a more positive note, the World Bank said that recent economic data for China “suggest some rebound in activity,” while recent efforts to step up investment project approvals could support the recovery in investment in the coming quarters.
“We therefore believe that the risk of a ‘hard landing’ remains small,” the World Bank said. The bank expects growth in China to pick up to 8.1 percent next year, as the impact of stimulus measures kicks in and global trade rallies.
Negara Hampir Bangkrut, Yunani Jual Pulau dan Bangunan Bersejarah
Angga Aliya – detikfinance
Senin, 08/10/2012 11:15 WIB
Jakarta – Punya uang berlebih? Berminat membeli salah satu pulau di Yunani, seperti Rhodes atau Corfu? Atau mungkin bangunan bersejarah, pelabuhan atau bahkan gedung pemerintahan?
Ya benar, gedung dan pulau itu memang sengaja dijual oleh pemerintah Yunani dalam rangka mengejar target syarat untuk mendapatkan dana talangan dari Uni Eropa. Beberapa aset milik negara kini mulai dilepas demi menggenjot dana.
Berdasarkan data Lembaga Aset Pemerintah Yunani alias Hellenic Republic Asset Development Fund (HRADF) terdapat lebih dari 70.000 aset milik negara yang ditawarkan kepada investor demi dana sebanyak 19 miliar euro atau Rp 221 triliun sampai tahun 2015.
Salah satunya adalah sebuah komplek pelabuhan dan hotel seluas 119.800 meter persegi di salah satu pantai Yunani, area 450.000 meter persegi di daerah Rhodes yang memiliki lapangan golf 18 lubang dan pantai sepanjang 6,4 km di Corfu.
Selain itu, ada juga bandara di Athena dan arena olimpiade yang pernah digunakan untuk perhelatan olahraga antar negara pada tahun 2004 lalu.
Selain tanah, Yunani juga menawarkan gedung-gedung pemerintahan, yaitu Kementerian Hukum, Kesehatan, Pendidikan dan Kebudayaan. Tapi, gedung-gedung ini tidak untuk dijual, melainkan disewakan.
Pekan lalu, Yunani sudah berhasil menyewakan gedung International Broadcast Centre yang dulu dipakai untuk menyiarkan Olimpiade 2004. Gedung ini disewa oleh pengembang Grup Lamda sebilai 81 juta euro (Rp 945 miliar) selama 90 tahun.
“Tawarannya masuk akan secara finansial,” kata CEO Lamda Development, Odisseas Athanassiou kepada CNBC, Senin (8/10/2012).
Ia juga menampik kabar bahwa perjanjian sewa itu dilakukan hanya untuk memuaskan para kreditur Yunani saja. Akan tetapi, Sam Zell, Komisaris dari perusahan real estat di Amerika Serikat (AS), Equity Group Investments, menilai harga itu terlalu tinggi dan jauh di atas rata-rata properti di AS.
Unemployment Rate Falls to 7.8%
By JOSH MITCHELL And SARA MURRAY
The nation’s unemployment rate fell to its lowest level since January 2009, suggesting job growth picked up over the summer and shifting questions in the presidential race about which candidate can best fix the nation’s ailing economy.
The U.S. unemployment rate fell to 7.8% in September, the lowest level in more than 31/2 years. Payrolls increased by 114,000 with private companies adding 104,000 jobs. Sudeep Reddy and Phil Izzo join The News Hub to review the data. Photo: Getty Images.
The unemployment rate slid to 7.8% in September, falling below 8% for the first time since President Barack Obama’s inauguration, the Labor Department said Friday. Employers added a seasonally adjusted 114,000 jobs last month, a tepid pace that was countered by the fact that figures for previous months were boosted above initial estimates. Those figures reflected that the nation added 181,000 jobs in July and 142,000 jobs in August, showing that job growth in the third quarter was far higher than in the spring.
The national unemployment rate fell below 8 percent for the first time since President Barack Obama took office. Addressing a rally of his supporters, Obama told the crowd America has come ‘too far’ to turn back to old policies.
The unemployment rate and the number of jobs are obtained from separate surveys and don’t always align to convey the same picture of the labor market. That was the case this month. Overall, the report suggested the labor market—while stronger than it was during the spring—remains sluggish. The big drop in the jobless rate was in part due to workers settling for part-time jobs because they couldn’t find full-time work.
Some economists said the decline in the jobless rate likely occurred over a longer period than the report indicates, because the way the government calculates job growth and the jobless rate can be flawed and lead to artificial jumps that are later revised.
“I take these numbers with an enormous grain of salt,” said economist Joshua Shapiro of consultancy MFR Inc. in New York. “I think the underlying trend is pretty clear in terms of the labor market—that it’s still struggling quite mightily.”
The report is one of the final major gauges of the economy before voters head to the polls Nov. 6 to choose the next president. The jobless rate is now back to where it was when Mr. Obama took office, potentially strengthening the president’s argument that the economy is on the right path and gradually healing from a deep recession. However, just one president, George W. Bush, in recent decades has won re-election when the unemployment rate was unchanged or higher than when he took office.
GOP presidential candidate Mitt Romney has said the economy is greatly underperforming and that the president’s policies have impeded faster growth.
Friday’s report is the first since the Federal Reserve’s decision to commence an ambitious stimulus program—buying $40 billion a month of mortgage-backed securities until the U.S. job market substantially improves. The latest numbers offer some good news with the falling unemployment rate but also suggests that job creation, while steady, remains slower than the Fed would like.
The Jobs Report
Real Time Economics: Impossible To Manipulate Labor Survey Data, Former BLS Head Says
MarketBeat: Jack Welch Says It’s a Conspiracy
Campaigns Seize on Jobs Report
Jobs Under Obama
Why Did Rate Drop?
Economists: This Is Progress
Welch Tweet: ‘Chicago Guys’
Messrs. Obama and Romney have sparred over whose economic policies would lay the best foundation for job creation.
At Wednesday’s debate, Mr. Romney criticized the president for presiding over a period of high unemployment and stagnant wages that he said has squeezed middle-class families.
“If I’m president I will create—help create—12 million new jobs in this country with rising incomes,” Mr. Romney said.
Mr. Obama highlighted steady growth: The private sector has added nearly five million jobs since February 2010. And he called for a “new economic patriotism” that embraces spending on education, training, energy and other areas to speed the recovery.
Jeremy Zirin, Chief U.S. Equity Strategist for UBS Wealth Management, reviews the September employment data and looks at what the data mean for the economy. Photo: Getty Images.
Private companies accounted for most of the growth in September payrolls, adding 104,000 jobs.
In the private sector, employment increased in health care as well as transportation and warehousing. Manufacturing employment fell by 16,000.
Governments, meanwhile, added 10,000 positions as the federal and state-level workforces grew.
So far this year, overall job growth has averaged 143,000 a month, compared with 153,000 in 2011.
Average earnings rose by seven cents to $23.58 an hour, while the average workweek edged up by 0.1 hour to 34.5 hours in September.
A broader measure of unemployment—which includes job seekers as well as those in part-time jobs–held steady at 14.7% in September.
—Jeffrey Sparshott and Eric Morath contributed to this article.
IMF Desak Zona Euro Cepat Atasi Krisis
Kamis, 4 Oktober 2012 | 8:56
PARIS – Ketua Dana Moneter Internasional Christine Lagarde, Rabu, mendesak para pemimpin zona euro untuk bergerak cepat mengatasi krisis utang blok itu.
Ia memperingatkan dorongan terbaru untuk pasar melalui sebuah keputusan Bank Sentral Eropa (ECB) akan segera bisa menghilang. “Tidak seorang pun punya kemewahan waktu, ini benar-benar mendesak,” kata Lagarde kepada harian Prancis Figaro dalam komentar untuk tampil pada Kamis.
Dia mengatakan, keputusan oleh Bank Sentral Eropa untuk membeli utang yang diterbitkan oleh pemerintah zona euro yang kesulitan adalah mendasar, dan memperingatkan bahwa para pemimpin politik harus tidak membiarkan dampak dari tindakan ini menghilang.
Pada awal September, Presiden ECB Mario Draghi berjanji untuk membantu negara-negara seperti Spanyol dengan membeli volume terbatas obligasi untuk menurunkan biaya pinjaman.
Berita itu mengirim pasar melonjak karena para investor melihat titik balik dalam krisis.
Tetapi Spanyol harus terlebih dahulu meminta mitra zona euro secara resmi untuk bantuan keuangan, sebuah tindakan yang Perdana Menteri Spanyol Mariano Rajoy katakan pada Selasa itu tidak segera.
Pasar uang telah bereaksi negatif terhadap ketidakpastian yang didorong oleh komentar perdana menteri Spanyol itu.
Lagarde mengatakan kepada Figaro, biaya solusi meningkat seiring berjalannya waktu, dan menambahkan orang-orang Eropa lebih bertindak cepat di tingkat nasional, semakin dinamis bisa berubah. (ant/gor)
Giliran proyeksi Indonesia yang dipangkas ADB
Oleh Herlina KD – Rabu, 03 Oktober 2012 | 15:48 WIB
JAKARTA. Dampak perlambatan ekonomi global mulai merembet ke Asia, khususnya China dan India. Imbasnya, pertumbuhan ekonomi Indonesia juga ikut terancam. Alhasil, Asian Development Bank (ADB) merevisi proyeksi pertumbuhan ekonomi Indonesia tahun 2012 menjadi sebesar 6,3% dengan inflasi sekitar 4,4%.
Semula, ADB memperkirakan pertumbuhan ekonomi Indonesia sebesar 6,4% pada tahun ini. Proyeksi ini juga lebih rendah ketimbang realisasi pertumbuhan ekonomi 2011 yang sebesar 6,5%. Pada tahun 2013, ADB memperkirakan ekonomi Indonesia bakal tumbuh 6,6%.
Ekonom Senior ADB Edimon Ginting mengungkapkan dampak perlambatan pertumbuhan ekonomi di China dan India sebagai imbas krisis Eropa sudah merembet ke dalam negeri. Sehingga, pertumbuhan ekonomi Indonesia berpotensi terkoreksi menjadi 6,3% di tahun ini.
Meski mengalami penurunan, Edimon menilai pertumbuhan ekonomi Indonesia ini masih jauh lebih baik ketimbang negara-negara lain di kawasan Asia. Alasannya, “Daya tahan Indonesia lebih baik ketimbang negara lain. Salah satu penyebabnya, investasi masih tumbuh cukup tinggi,” ujarnya Rabu (3/10).
Bagaimana kuartal III?
Dampak perlambatan ekonomi global semakin terasa pengaruhnya ke Indonesia pada semester II tahun ini. Jika pada kuartal I dan II tahun ini ekonomi Indonesia masih bisa tumbuh masing-masing 6,3% dan 6,4%, maka pada kuartal III diperkirakan tidak akan lebih tinggi dari kuartal I dan II.
Edimon memperkirakan ekonomi Indonesia pada kuartal III akan tumbuh sekitar 6,3%. “Pendorongnya, investasi, konsumsi masyarakat, dan belanja pemerintah yang terus naik. Di sisi lain, penurunan ekspor semakin kecil,” ujarnya.
Dalam hitungannya, investasi bakal mengkontribusi pertumbuhan sekitar 4%, dan konsumsi masyarakat 2,5%.
Sebelumnya, Pelaksana tugas (Plt) Kepala Badan Kebijakan Fiskal (BKF) Bambang Brodjonegoro mengatakan kondisi ekonomi makro Indonesia cukup stabil saat ini. Ia mencontohkan, angka inflasi masih di level rendah dan arus investasi juga masih mengalir deras. Makanya, “Kita masih yakin kuartal III pertumbuhan ekonomi di kisaran 6,3% – 6,5%,” katanya Senin (1/9).
Ia menambahkan, beberapa sektor yang bakal menopang pertumbuhan ekonomi kuartal III antara lain tingginya investasi asing yang masuk ke dalam negeri, dan penyerapan belanja modal pemerintah yang semakin baik. Selain itu, konsumsi masyarakat yang cukup tinggi juga ikut menyumbang pertumbuhan ekonomi.
ADB: Ekonomi RI Beruntung Tak Kena Krisis Global
Rista Rama Dhany – detikfinance
Rabu, 03/10/2012 12:28 WIB
Jakarta – Bank Pembangunan Asia (Asia Development/ADB) memperkirakan pertumbuhan ekonomi Asia melambat dari 7,2% di 2011 menjadi 6,1% di 2012. Namun ekonomi Indonesia beruntung, kenapa?
Senior Country Economist Indonesia Resident Mission ADB Edimon Ginting mengatakan, pertumbuhan ekonomi di kawasan Asia tahun ini mengalami pertumbuhan ekonomi yang tidak kuat.
Menurut Edimon, pertumbuhan ekonomi Indonesia akan tetap tumbuh tinggi mencapai 6,3%. “Bahkan di 2013 pertumbuhan ekonomi Indonesia tetap tumbuh lagi menjadi 6,6%,” ungkapnya.
Faktor yang mendorong ekonomi Indonesia tetap tumbuh tinggi adalah kepercayaan bisnis di Indonesia masih tinggi dan kinerja ekspor akan membaik pada kuartal IV-2012.
“Dan dampak ekonomi global yang mengalami slowdown tidak akan terlalu berdampak, selain itu Indonesia beruntung memiliki tingginya konsumsi masyarakatnya yang menjadi kontribusi besar bagi pertumbuhan ekonomi Indonesia,” kata Edimon dalam paparan ADB Outlook 2012 Update, di Menteng, Jakarta, Rabu (3/10/2012).
Menurut Edimon, pelemahan pertumbuhan ekonomi di seluruh kawasan Asia ini diakibatkan oleh melemahnya pertumbuhan ekonomi di China dan India yang selama beberapa tahun ini menjadi motor penggerak pertumbuhan ekonomi di Asia.
“ADB memperkirakan ekonomi Asia melemah tahun ini hanya mencapai 6,1% dibandingkan tahun sebelumnya yang mencapai 7,2%. Sedangkan pada 2013 diprediksi pertumbuhan ekonomi di Asia masih tumbuh 6,7% tetapi masih rendah dibandingkan 2011,” kata Edimon.
“Penyebab utama dari pelemahan pertumbuhan di China dan India, yang diakibatkan turunnya investasi dari capital outflows (dana asing yang keluar), dan ekspor yang menurun,” ujarnya.
Bahkan kata Edimon, dampak penurunan di India lebih besar lagi karena melambatnya reformasi sehingga berdampak pada pelambatan ekonomi.
“Untuk mencegah penurunan lebih tinggi, satu cara paling efektif adalah meningkatkan pembangunan infrastruktur, infrastruktur merupakan sumber pertumbuhan ekonomi,” ucapnya.
European Stocks Advance After Spanish Stress-Test Results
By Tom Stoukas – Oct 1, 2012
European stocks advanced as test results showed the stress to the Spanish banking system was within estimated limits, outweighing weakening economic data from Asia. U.S. index futures climbed, while Asian shares slid.
Xstrata Plc (XTA) rose 1.8 percent after its board recommended shareholders vote in favor of a $33 billion takeover offer by Glencore International Plc. (GLEN) Nokia Oyj (NOK1V) fell 0.7 percent after Credit Suisse Group AG downgraded the stock.
The Stoxx Europe 600 Index (SXXP) gained 0.7 percent to 270.43 at the 8:34 a.m. in London. The gauge rallied 6.9 percent in the quarter ended Sept. 30 as the Federal Reserve and European Central Bank started bond-buying programs. Standard & Poor’s 500 Index futures added 0.2 percent today, while the MSCI Asia Pacific Index retreated 0.5 percent.
Spanish stress tests reported a capital deficit of 59.3 billion euros ($76 billion) for the country’s banks, less than the 100 billion euros agreed as part of a bailout. The tests of 14 lenders showed seven, including Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA and CaixaBank SA, had no capital shortfall, while those with deficits included Bankia group, Catalunya Banc and Banco Popular (POP) Espanol SA.
A Chinese factory index came in at 49.8 for September, the first time it fell below 50 for two straight months since 2009, a statistics bureau report showed in Beijing. Japan’s Tankan index of large manufacturers’ confidence fell to minus 3 for the past quarter. South Korean shipments slid for a third month.
In the euro area, the jobless rate probably climbed to 11.4 percent in August, according to the median estimate of economists in a Bloomberg News survey before the European Union’s statistics office releases the report. The figure would be the highest in data compiled by Bloomberg going back to 1990.
Analysts are lowering estimates for European earnings growth by 52 percent, clashing with investors whose confidence in the ECB helped send equity valuations to a 2 1/2-year high.
While the Euro Stoxx 50 Index surged 25 percent over the past four months, matching the three biggest rallies in the past decade, more than 12,000 estimates compiled by Bloomberg show net income will grow 13 percent next year, down from the 27 percent forecast in January. The gauge is trading at 9.5 times next year’s projected profit, near the highest since April 2010.
Xstrata gained 1.8 percent to 975 pence after its board recommended shareholders vote in favor of a $33 billion sweetened takeover offer by Glencore. The decision came after gaining assurances over the combined company’s board and separating the approval of incentive payments from a vote on the offer.
Banco Popular has been suspended from trading in Madrid, Spain’s stock-market regulator said today. The Spanish bank will seek to raise as much as 2.5 billion euros ($3.2 billion) from a share sale as it tries to cover a capital shortfall identified in the stress tests, a person familiar with the matter said.
The results showed the country’s sixth-biggest lender by assets had a capital shortfall of 3.22 billion euros in an adverse economic scenario.
Nokia, the Finnish phonemaker attempting a comeback, slid 0.7 percent to 2 euros. Credit Suisse cut the stock to underperform from neutral, meaning that investors should sell the shares.
Michelin & Cie, (ML) the world’s second-largest tiremaker, advanced 1.3 percent to 61.74 euros. UBS AG upgraded the shares to buy from neutral.
September 29, 2012
As Money Pours Down, It’s No Wonder That Stocks Are Up
By JEFF SOMMER
THE markets are getting plenty of help from the world’s big central banks. Will it be enough to keep the current rally going?
The overall economy is sluggish at best, and unemployment has remained above 8 percent since early 2009. Yet despite a decline last week, stock investors have been on a roll. In the three months ended on Friday, the Standard & Poor’s 500-stock index rose 5.8 percent. In Europe, stocks fared even better for the quarter, with the Euro Stoxx 50 index up 8.4 percent. Japan was a laggard, as the Nikkei index dropped 1.5 percent, but in Hong Kong the Hang Seng index rose 7.2 percent.
During much of this period, the Federal Reserve and other central banks have been flooding the planet with money. Cause and effect is hard to prove, but it seems reasonable to assume that the central banks have had something to do with the markets’ buoyancy. “Clearly central bank actions have been a major factor in the market rally,” Ethan Harris, chief North American economist at Bank of America Merrill Lynch, wrote in a recent report. News reports of “super dovish” announcements by the Fed and the European Central Bank correlated neatly with stock market climbs, he found.
On Sept. 6, for example, Mario Draghi, president of the European Central Bank, said that under certain conditions it would buy unlimited amounts of government bonds, a move that could lower borrowing costs for Spain and other troubled countries in the euro zone. Stocks immediately rose around the world.
The next week, the Fed met the market’s expectations, and then some. It extended its plans for maintaining near-zero short-term interest rates into the middle of 2015. And it announced that it would increase its bond-buying to a total of $85 billion a month for the rest of the year, with a focus on mortgage-backed securities, a program aimed at giving the housing market another lift. What’s more, the Fed linked the duration of its loose policies to the state of the job market. As long as the unemployment rate remained unacceptably high, the Fed planned to maintain its expansionary monetary policy, Ben S. Bernanke, the Fed chairman, said in a news conference.
“We will be looking for the sort of broad-based growth in jobs and economic activity that generally signal sustained improvement in labor market conditions and declining unemployment,” Mr. Bernanke said.
Last week, however, the markets gave up ground. The central banks aside, it’s easy to see why the bullish mood might darken quickly. A partial list of dangers includes rising tensions in the Mideast, a contentious election campaign and a looming “fiscal cliff” in the United States, an unresolved and multifaceted financial crisis in Europe, and a global economy that is far from robust.
Little of this would appear to augur well for stocks, except that the central banks have tilted the odds on the bullish side, at least for now, some analysts say.
“A modestly growing economy with the cyclically sensitive sectors at still-depressed levels is a relatively stable and safe, if not exciting, environment,” said Larry Kantor, head of research at Barclays, in a recent report. “When this is combined with a central bank committed to aggressively supporting growth through higher asset prices, it amounts to a very attractive environment for taking risk.”
In fact, Barclays calls the current version of its flagship quarterly research publication “Global Outlook: Don’t Fight the Fed.”
OF course, no one knows where the markets are going day to day. After their recent run upward, and even without the emergence of any nasty news, stocks could easily “consolidate,” that is, decline for a while before moving upward again. And because the global economy is already rather weak, an external shock — a disruptive geopolitical event — could alter perceptions abruptly.
Some analysts are not upbeat even now. The Economic Cycle Research Institute, an independent forecasting organization with an excellent record, says it believes that the United States is already in recession, and that action by the Fed won’t change that. “Unfortunately, the economy is just going to have to ride out the business cycle,” Lakshman Achuthan, chief operations officer of the institute, said recently. “The Fed’s actions have been increasingly ineffective.” The relationship between the economy and the stock market is complex, he said, and it’s not always clear whether the market is predicting the direction of the economy, reacting to it or responding to other factors.
Robert Rodriguez, managing partner and chief executive of FPA, an asset management firm in Los Angeles, says it’s possible that fund managers, seeking to bolster their returns, will “continue to pile into stocks in the remainder of this year and push them to even higher levels.” But he says he believes that the market is already overextended, and his firm has begun to reduce its stock exposure.
Mr. Rodriguez anticipated the subprime mortgage crisis and the financial crisis. But, as he acknowledged ruefully in an interview, he “was early, and got out of the market too soon, and could well be doing so again.” Still, he says he fears what he calls “the unintended consequences of the expansionary activities of the central banks.”
Another credit bubble is likely if the banks persist in trying to prop up the global economy, he said. As he sees it, the fundamental problem in the United States can’t be solved by the Fed. “We must get our fiscal house in order,” he said, “and we have only a limited amount of time to do it.”
For the next several months, though, he suspects that Wall Street’s fascination with the Fed may well keep stocks rising.
Mendesak dan Layak, Unifikasi Sistem Perbankan Eropa
Penulis : Robertus Benny Dwi Koestanto | Rabu, 26 September 2012 | 08:08 WIB
JAKARTA, KOMPAS.com- Pembuat kebijakan Bank Sentral Eropa, Panicos Demetriades, menyatakan, rencana Uni Eropa untuk mempersiapkan mekanisme pengawasan tunggal untuk perbankan di zona euro pada akhir 2012 adalah ambisius, tapi layak. Rencana ini masih menjadi perdebatan di kalangan pemimpin Uni Eropa.
“Dalam pandangan saya, setiap usaha harus dilakukan segera mungkin namun harus dilakukan secara bertahap dalam setiap pendekatannya,” kata Demetriades, yang merupakan Gubernur Bank Sentral Siprus seperti dikutip tim riset Monex Investindo Futures di Jakarta, Rabu (26/9/2012).
Dia mengatakan, skema pengawasan itu sangat diperlukan karena itu adalah prasyarat untuk rekapitalisasi langsung oleh Mekanisme Stabilitas Eropa (ESM), dana talangan permanen Uni Eropa.
Rencana untuk pengawasan tunggal serikat perbankan Eropa telah menjadi satu komponen dari kerangka yang lebih luas, bersamaan dengan asuransi deposito Eropa. Hal itu, menurut dia, merupakan bagian dari skema resolusi untuk mengatasi krisis keuangan saat ini dengan membantu memutuskan hubungan antara pemerintah dengan bank.
“Untuk negara dengan sistem perbankan yang besar seperti Siprus, serikat perbankan sangat penting karena akan memisahkan risiko pemerintah dari risiko perbankan,” kata Demetriades.
Bernanke Goes All In: What It Means for You
By Jeff Macke | Breakout – 6 hours ago
In an unprecedented and controversial move, the Federal Reserve today announced the initiation of an open-ended round of Quantitative Easing (QE3) and extended the period for which it will keep rates between 0 and 1/4% to mid-2015.
Here is the paragraph from the FOMC statement that sums it up:
“….The Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions…should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”
Translating from Fed-Speak, the purchase of mortgage-backed securities is Quantitative Easing. Unlike QE1 and QE2, no dollar amount or time-limit was placed on the program. The Fed essentially announced it will be purchasing $40 billion in MBS per month until further notice.
This is a monster, huge, gargantuan change from prior operations. QE1 “cost” $1.7 trillion. QE2 was half a trillion, give or take. The new plan isn’t really QE3, because it’s never scheduled to end. It is an entirely different, frightening animal.
What makes it scary is contained in the next paragraph:
If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.
Employment is weak and is expected to be despite the Fed’s best efforts. In response, the Fed is opening the spigots even further and vowing to continue to do so until this failed strategy starts working. There’s a certain willful spunkiness to the plan, but in terms of economics it’s little short of bizarre.
Bottom Line: The Fed has made up new rules by lifting all restraints on existing policies. Should they desire different stimulus, the Fed will need to invent a whole new policy. It’s a bullish move in the sense that pouring more money into the system inflates values. Stocks, gold, oil… basically everything except the dollar “should” go up in value.
Longer term we’re now way, way into unknown territory. As Bernanke himself often says, monetary policy isn’t a panacea. Then again, the same man just gave the economy the biggest injection it’s ever seen. How will it all end? Literally nobody knows, but for now stocks are higher, bears are furious and bulls are giddily confused.
Also, the president just got re-elected. But that’s a for a different column.
Jerman setujui dana bailout, bursa Eropa meriah
Oleh Rika Theo, Reuters – Rabu, 12 September 2012 | 15:49 WIB
LONDON. Saham-saham top di Eropa melesat ke rekor tertinggi baru dalam 14 bulan. Pelaku pasar menyambut gembira keputusan Mahkamah Konstitusi Jerman yang menyetujui dana bailout baru Eropa senilai 700 miliar euro.
Kabar yang ditunggu-tunggu ternyata sesuai harapan pasar. Persetujuan Jerman atas dana yang disebut Emergency Stability Mechanism itu penting karena menjadi kunci rencana pembelian obligasi oleh European Central Bank (ECB).
Jerman menyetujuinya dengan syarat Uni Eropa dapat menjamin takkan ada penambahan dana bailout secara finansial dari Jerman tanpa persetujuan parlemen.
Pelaku saham ikut menyambut baik kabar ini. Indeks FTSEurofirst 300 sempat melompat le level tertingginya sejak Juli 2011 pada 1.114,33. Setelahnya, indeks acuan saham-saham blue chip Eropa itu terhitung naik 0,5% di 1.112,93.
Kenaikan juga terjadi di bursa Jerman sendiri. Di Frankfurt, indeks DAX naik 0,3% pada pukul 10.16 pagi. Indeks FTSE London naik 0,32% ke 5.810,68.
Euro langsung melejit ke level tertinggi baru dalam 4 bulan di level US$ 1,29017 dari sebelumnya US$ 1,2845.
Wen Signals China Has Ample Policy Room to Meet Growth Target
By Bloomberg News – Sep 11, 2012
Chinese Premier Wen Jiabao signaled there’s more room for fiscal and monetary policy to support growth, saying the nation has full confidence it will meet its economic goals for the year.
“Be it monetary or fiscal, we still have ample strength,” Wen said yesterday at the World Economic Forum in the Chinese city of Tianjin. The government has 100 billion yuan ($16 billion) in a fiscal stabilization fund and “we will appropriately use that for preemptive policy and fine-tuning to propel stable economic growth,” he said.
The government is trying to prevent growth this year from slipping below the 7.5 percent target set in March, which would already be the weakest since 1990.
Economists at Barclays Plc and UBS AG lowered expansion forecasts as Wen grapples with slowing industrial output and export gains, increasing pressure to ease policy.
“The government has fiscal and monetary war chests to revive growth but there does not seem to be much appetite to roll out a large-scale stimulus package,” said Wang Qinwei, a London-based economist with Capital Economics who previously worked at the People’s Bank of China.
The country will continue to place more emphasis on ensuring stable growth, Wen said. He reiterated that China will maintain a proactive fiscal policy and prudent monetary policy and said the nation has implemented a series of steps to promote domestic demand.
Officials in China have refrained from easing monetary policy since cutting interest rates in June and July and lowering banks’ reserve requirements three times from November to May. Authorities have shied away from stimulus near the scale of a 4 trillion yuan package announced in 2008, amid a global crisis when 20 million migrant workers lost their jobs.
China needs to “moderately lower” interest rates, Li Daokui, a former central bank adviser, told reporters in Tianjin yesterday. Growth will pick up in the fourth quarter and China’s new infrastructure investment plans will benefit expansion at the start of next year, he said.
Inflation that accelerated for the first time in five months in August may limit any monetary easing.
The government last week said it approved subway and road projects across the country. Wen last month urged extra measures to support exports and help meet economic targets as a decline in industrial companies’ profits added to evidence that the nation’s slowdown is deepening.
UBS and ING Groep NV on Sept. 7 cut their full-year forecasts for economic expansion to 7.5 percent. The deceleration in China’s growth will probably extend into a seventh quarter, based on projections from ING and Bank of America Corp.
The benchmark Shanghai Composite Index (SHCOMP) of stocks fell 0.7 percent yesterday and is down 14 percent in the past year.
Asia’s biggest economy expanded 7.6 percent in the second quarter from a year earlier, the slowest pace in three years, after the government moved to counter inflation and surging property prices in the wake of the 2008 stimulus.
The last stimulus resulted in a “large hangover in the form of worries about bad debt and overinvestment,” said Wang of Capital Economics. “The authorities are now increasingly aware that stimulus only worsens China’s economic imbalances.”
Europe’s debt crisis and anemic U.S. growth may hinder a rebound in exports while at home a slump in earnings is deterring companies from spending and banks face rising bad debts.
President Hu Jintao said Sept. 8 that economic expansion faces “notable downward pressure,” some small and mid-sized companies are “facing a hard time and exporters are facing more difficulties.”
Companies including China Cosco Holdings Co., China’s largest listed shipper, are bearing the brunt of weakness in exports. The company lost 4.87 billion yuan in the first half and its top two executives pledged to waive their salaries until profits resume.
China’s exports rose less than 3 percent for a second month in August while imports had the first non-holiday decline since 2009 as the nation’s slowdown and Europe’s turmoil curbed demand at home and abroad. At the same time, new yuan loans were the highest of any August on record.
Hu Says China Growth Is Facing ‘Notable Downward Pressure’
By Bloomberg News – Sep 8, 2012 12:06 PM GMT+0700
Chinese President Hu Jintao said a slowdown in exports is putting downward pressure on the world’s second-biggest economy, and he pledged to boost domestic demand and promote more balanced growth.
“Economic growth is facing notable downward pressure, some small and medium enterprises are facing a hard time and exporters are facing more difficulties,” Hu said today at the Asia-Pacific Economic Cooperation CEO Summit in Vladivostok, Russia. “We have an arduous task of creating jobs for new entrants to the labor force.”
The slowdown is increasing pressure on Hu as China tries to ensure a smooth transition of power to a new generation of leaders at a once-in-a-decade Communist Party Congress this year. Europe’s debt crisis and anemic U.S. growth may hinder a rebound in exports while at home a slump in earnings is deterring companies from spending and banks face rising debts.
Asia’s biggest economy expanded 7.6 percent in the second quarter from a year earlier, the slowest pace in three years, after the government moved to counter inflation and surging property prices after its 2009 stimulus. Exports in July rose 1 percent from a year earlier and shipments in the first seven months rose 7.8 percent, compared with a 23.4 percent rise in the same period in 2011.
UBS AG and ING Groep NV yesterday cut their full-year forecasts for economic expansion to 7.5 percent, which would be the slowest pace in 22 years.
“They’ve screamed from the rooftops for three years they are trying to slow things down to kill inflation and to kill the property bubble,” Jim Rogers, chairman of Singapore-based Rogers Holdings, said in a Sept. 7 interview in Vladivostok. “Now it’s happened.”
The deceleration in China’s economic growth will probably extend into a seventh quarter, with ING estimating a slowdown to 7.1 percent and Bank of America Corp. projecting 7.4 percent for the three months ending September.
Data due tomorrow may show industrial output growth slowed to 9 percent in August from a year earlier, the slowest pace this year, according to the median estimate in a Bloomberg News survey of 35 economists. Exports last month probably rose 2.9 percent from a year earlier, according to a separate survey before a Sept. 10 report. Overseas shipments climbed 24.5 percent in August last year.
Hu said China’s economy was characterized by a “lack of balance, coordination and sustainability” and that the country would promote “inclusive growth” to improve people’s lives.
China’s Gini coefficient, a measure of inequality, has risen more than any other Asian economy in the last two decades, Murtaza Syed, the International Monetary Fund’s resident representative in Beijing, said in February. The government hasn’t released an overall Gini figure since 2000 although Bo Xilai, the ousted former Communist Party secretary of Chongqing, said in March it had exceeded 0.46, above the point that triggers social unrest.
“The route we’ve taken is to allow a portion of the population to grow wealth before everyone else,” China Construction Bank Corp. Chairman Wang Hongzhang said in a panel discussion at the APEC summit today. “By 2050 we hope to have a society where a large part of the population can share in that equitably.”
Hu’s standing with international investors has suffered ahead of the leadership change later this year. In a quarterly Bloomberg Global Poll published yesterday, two in five voiced pessimism about the impact of his policies on the investment climate in China. That’s up from less than one in three in May and is the highest negative reading since the poll began asking that question two years ago.
China this week announced approvals for infrastructure spending, including 800 billion yuan ($126 billion) in new subway and rail projects, to support growth as Europe’s debt crisis crimps exports and a property crackdown damps domestic demand. The National Development & Reform Commission, the top planning agency, said Sept. 6 it approved plans to build 2,018 kilometers (1,254 miles) of roads, a day after it backed plans for subway projects in 18 cities.
Chinese shares surged on the news, with the benchmark Shanghai Composite Index (SHCOMP) closing 3.7 percent higher yesterday, the biggest advance since Jan. 17.
By focusing on infrastructure spending to boost growth, Hu and Premier Wen Jiabao may risk exacerbating the imbalances they have pledged to combat.
Spending on roads, bridges, subways and other public-works projects surged in 2009 and 2010 as much of a 4 trillion yuan ($586 billion at the time) stimulus, and an unprecedented expansion in bank lending, was directed toward local government projects. That led to a rise in debt at the local level to at least 10.7 trillion yuan as of 2010, according to an official audit.
“The unintended consequences of this are legion,” Tim Condon, chief Asia economist at ING in Singapore, wrote in a note yesterday, referring to the infrastructure spending. “They include corruption scandals — for example, the railways minister was sacked and expelled from the Party over corruption charges — poor quality construction — the collapse of a section of the Yangmingtan bridge in Harbin city is emblematic – – and stretched local government finances.”
Ma Kai, a State Councilor and general secretary of the State Council, China’s Cabinet that’s headed by Premier Wen Jiabao, said today that China’s economic growth is sustainable and has “great potential.”
“We will turn the huge potential demand of 1.3 billion residents into real demand,” he said at an international investment forum in the eastern city of Xiamen. “I believe the unprecedentedly large and rapidly growing China market will bring more opportunities to foreign investors.”
Wakil PM Belanda: Kebangkitan Indonesia Pelajaran Buat Eropa
Eddi Santosa – detikfinance
Jumat, 07/09/2012 14:00 WIB
Verhagen, Resepsi Diplomatik HUT ke-67 RI (e.santosa/detikcom)
Den Haag – Ekonomi Indonesia kini menunjukkan pertumbuhan sangat mengesankan dengan rata-rata lebih dari 6% per tahun berturut-turut. Dalam masa-masa ketidakpastian saat ini, Eropa dapat belajar dari pengalaman Indonesia.
Demikian disampaikan Wakil Perdana Menteri merangkap Menteri Ekonomi, Pertanian dan Inovasi Maxime Jacques Marcel Verhagen dalam sambutannya selaku tamu kehormatan pada Resepsi Diplomatik dalam rangka HUT ke-67 RI di Wisma Duta, Wassenaar, Rabu malam atau Kamis (6/9/2012) WIB.
“Kini ekonomi Indonesia menunjukkan angka-angka pertumbuhan sangat mengesankan, dengan pertumbuhan GDP rata-rata lebih dari 6% per tahun berturut-turut,” ujar Verhagen.
Dikatakan, 14 tahun lalu Indonesia mengalami krisis berat menyusul krisis keuangan Asia. Sekarang beban utang Indonesia telah menyusut dari 150% GDP menjadi kurang dari 25% GDP pada 2011, salah satu terendah di ASEAN.
“That is making most European countries jealous these days. Hal itu membuat sebagian besar negara-negara Eropa saat ini iri,” imbuh Verhagen, yang sebelumnya menjabat Menlu di era Hassan Wirajuda itu.
Menurut Verhagen, dengan prestasinya itu tidak aneh jika Indonesia menjadi pasar luar negeri sangat penting bagi perusahaan-perusahaan Belanda seperti Unilever dan Friesland Campina. Juga tidak aneh bahwa banyak perusahaan-perusahaan lainnya telah mengikuti jejak mereka.
“Itulah pula mengapa Belanda menjadi investor asing terbesar ke empat di Indonesia,” cetus Verhagen.
Pada bagiannya, lanjut Verhagen, Belanda bangga menjadi mitra dagang Indonesia terbesar kedua di UE. Belanda juga merupakan pintu gerbang ke UE, sebagaimana banyak ekspor Indonesia mencapai tujuannya melalui pelabuhan Rotterdam atau Bandara Internasional Schiphol.
Selain itu Asosiasi Eksportir Belanda (Fenedex) menempatkan Indonesian pada ranking ketiga setelah Cina dan India dalam hal ekspektasi pertumbuhan.
“Separuh dari anggota Fenedex memperkirakan akan mencapai angka penjualan lebih tinggi di Indonesia tahun ini,” pungkas Verhagen.
Selain Verhagen, resepsi diplomatik itu dihadiri oleh 400 tamu penting antara lain Ketua Mahkamah Agung G.J.M. Corstens, Panglima AB Jenderal Tom Middendorp, mantan Menlu Bernard Bot, anggota senat dan parlemen, para Sekjen dan Dirjen pemerintahan Belanda, para Dubes negara sahabat, kalangan bisnis dan profesional, serta tokoh masyarakat.
Pada kesempatan tersebut, Menteri Verhagen menerima potongan pertama nasi tumpeng dari Dubes RI untuk Kerajaan Belanda Retno LP Marsudi, dengan iringan harapan agar hubungan Indonesia-Belanda tetap mesra dan mendatangkan manfaat bagi rakyat.
Resepsi juga dimanfaatkan untuk mempromosikan Indonesia dengan paket bingkisan bagi para tamu berisi sampel produk dan informasi mengenai Indonesia. Juga top kuliner dalam sajian rijstafel berupa nasi goreng, sate kambing, sate ayam, cendol, gethuk Magelang, lumpia, risoles, ragam minuman dan aneka jajanan pasar lainnya.
Produk-produk dan kelezatan khas kuliner Indonesia yang mengesankan diharapkan dapat membekas dan mendorong orang untuk mengunjungi Indonesia atau restoran-restoran Indonesia di Negeri Belanda dan negara lainnya, terutama negara asal para Dubes negara-negara sahabat.
Draghi gets ECB backing for unlimited bond-buying
By Eva Kuehnen
FRANKFURT (Reuters) – The European Central Bank agreed on Thursday to launch a new and potentially unlimited bond-buying program to lower struggling euro zone countries’ borrowing costs and draw a line under the debt crisis.
Seeking to back up his July pledge to do whatever it takes to preserve the euro, ECB President Mario Draghi said the new plan, aimed at the secondary market, would address bond market distortions and “unfounded” fears of investors about the survival of the euro.
The scheme, to which Germany’s Bundesbank reiterated its opposition, would focus on bonds maturing within three years and was strictly within the ECB’s mandate, Draghi said. Only one member of the ECB Governing Council had dissented, he said.
“Under appropriate conditions, we will have a fully effective backstop to prevent potentially destructive scenarios,” Draghi told a news conference after the central bank’s monthly meeting On Thursday.
“No ex-ante quantitative limits are set on the size of outright monetary transactions,” he said, using the formal term for ECB bond-buying programs.
Investors were on tenterhooks, waiting to hear how decisively the ECB would act to help bring down the borrowing costs of Spain and Italy, after disagreements among policymakers on the plan were played out in public last week.
Draghi’s statement at least met expectations, analysts said. With the bond-buying plan the focus of Thursday’s meeting, the ECB kept interest rates on hold, leaving its main rate unchanged at 0.75 percent.
“The details … released today add to the credibility of the safety net taking shape in the euro zone and should support demand for euro zone assets,” said Andrew Cox, G10 strategist at CitiFX in New York.
Euro zone blue chip stocks soared 3.2 percent to levels not seen since March in response.
Pressure on Draghi intensified after an unsubstantiated German newspaper report last week that Bundesbank chief Jens Weidmann had considered resigning over his opposition to bond-buying, although several sources say he has made no such threat and believes in staying at the table to argue his case.
Draghi succeeded in securing overwhelming support on the Governing Council for the plan despite Weidmann’s opposition.
“In the most recent discussions, as before, Bundesbank President Jens Weidmann reiterated his frequently substantiated critical stance towards the purchase of government bonds,” the German central bank said in a statement.
“He regards such purchases as being tantamount to financing governments by printing banknotes,” it added.
Other ECB policymakers saw a greater urgency to help Spain and Italy and prevent the euro zone crisis from deepening.
Draghi said the ECB would only help countries that signed up to and implemented strict policy conditions, with the euro zone’s rescue fund also buying their bonds, and preferably with the IMF involved in designing and monitoring the conditions.
Renewed ECB intervention in the euro zone’s bond markets is crucial to buy governments time to come up with a longer-term response to the bloc’s debt crisis, which began in early 2010.
Spanish and Italian government bond yields have fallen significantly since Draghi said on August 2 that the ECB would buy bonds issued by Madrid and Rome. They fell further after he fleshed out his plan to intervene on Thursday.
The ECB would not target specific bond yields, Draghi said.
ECB debt purchases – which would succeed the bank’s Securities Markets Programme that has been dormant since March – would be suspended if countries did not comply with the terms.
With Germany’s constitutional court not due to rule on the new ESM rescue fund until next week, there was no prospect of the ECB intervening immediately.
Highlighting the euro zone’s economic predicament, Draghi said growth in the region would recover only gradually. Fresh ECB staff projections pointed to the economy contracting this year by between 0.2 and 0.6 percentage points.
One downside for policymakers may be an increase in commodity prices, which were buoyed by the ECB announcement. Brent crude oil gained rose $1.50 on Thursday to $114.59 a barrel and wheat rose 8 cents a bushel to $8.54.
Draghi also said the ECB was prepared to waive its senior creditor status on bonds it purchased – meaning it would be treated equally with private creditors in case of default.
The central bank hopes that by removing private investors’ concern about being paid back last in the event of a sovereign default, they will not head for the exits if the ECB intervenes and buys bonds.
The ECB assumed preferred creditor status in Greece’s debt restructuring earlier this year, leaving private investors to suffer a writedown in the value of their Greek sovereign bond holdings while the paper it held was untouched.
In another potential sop to the Bundesbank, Draghi said all bond purchases would be “sterilized” by taking in an equivalent amount in deposits from banks to avoid any risk of inflation.
The ECB’s insistence on countries agreeing to strict conditions before it buys their bonds fed doubts about whether Spain would seek help, and led to disappointment with the new ECB bond-buying programme among some investors.
Draghi said bond buys would be tied to “strict and effective conditionality” and focused on debt maturities up to 3 years.
“The involvement of the IMF shall be sought also for the design of country-specific conditionality and the monitoring of such programs,” he said, adding that now it was up to the governments of the euro zone to act.
International Monetary Fund chief Christine Lagarde welcomed the new ECB bond-buying programme and said the global lender was ready to cooperate “within our frameworks”.
Spanish Prime Minister Mariano Rajoy and German Chancellor Angela Merkel said they did not discuss conditions for aid for Spain, despite expectations Rajoy would seek Germany’s support for a bailout in a bilateral meeting in Madrid on Thursday.
“A lot depends on the country asking for help through the ESM, and Spain doesn’t seem to be ready,” said Francois Savary, chief investment officer at Reyl in Geneva. “It means that a lot remains in the hands of politicians.”
(Writing by Mike Peacock and Paul Carrel; Editing by Paul Taylor)
Spanyol lebih buruk dari krisis Indonesia di 1998
Oleh Dyah Megasari, The Guardian, CNBC, Reuters – Kamis, 06 September 2012 | 12:44 WIB
MADRID. Perbankan Spanyol berada dalam kondisi memprihatinkan. Sumber pendanaan bank yang berasal dari dana pihak ketiga (DPK) terancam “punah”. Perhitungannya, bank kehilangan €1 dari setiap simpanan sebesar €20.
Kondisi ini terjadi selama Juli dan dirilis oleh European Central Bank (ECB). Penarikan dana besar-besaran selama bulan tersebut merupakan yang terburuk sejak 15 tahun terakhir. Masyarakat mulai mengantisipasi kalau-kalau negara ini ditendang dari kesatuan mata uang tunggal.
“Ekonomi Spanyol melemah lebih dalam dan lebih cepat dari perkiraan sebelumnya. Ini yang membuat masyarakat khawatir,” ujar Robert O’Daly dari Economist Intelligence Unit.
Secara umum, total penarikan dana nasabah mencapai 74 miliar euro. Nilai tersebut setara dengan 5% dari total deposit nasional.
Peneliti asal Nomura, menghitung, penarikan dana di perbankan Spanyol bahkan jauh lebih buruk dari yang pernah dialami Indonesia saat krisis keuangan melanda Asia di akhir 1990-an. Gambarannya, jumlah dana yang sudah keluar dari Spanyol di kuartal II setara dengan 52,3% Gross Domestic Product (GDP) negara itu. “Dua kali lipat dari yang terjadi di Indonesia yakni 23% dari PDB,” ulas Jens Nordvig, global head G10 FX strategy, Nomura.
Krisis mata uang
Nordvig menganalisis, tanpa ada aliran euro dari ECB, Spanyol akan mengalami krisis mata uang utama. Terlebih, pemodal asing juga telah menarik dananya dari aset-aset keuangan dalam jumlah besar.
Penarikan dana akan lebih kompleks lagi jika dirunut dari basis kepemilikannya yakni rekening penduduk dan non-penduduk. “Secara keseluruhan penarikan ini sangat ekstrem dan menimbulkan keprihatinan serius atas implikasi yang diakibatkan terhadap stabilitas perbankan,” papar Nordvig.
Data dari Bank of Spanyol yang menjadi acuan Nomura, menunjukkan investor asing adalah penjual terbesar surat berharga Spanyol pada kuartal terakhir. Arus keluar akibat kejadian ini mencapai 19,4% dari PDB. Terdapat juga penarikan besar-besaran atas rekening penduduk setempat pada bank asing. Pada kuartal terakhir, arus keluar dari sumber tersebut adalah 16,7% dari PDB.
Spanyol kini tengah dihadapkan dengan babak baru krisis utang zona euro. Tapi pemerintah setempat sejauh ini menolak meminta bailout dari Uni Eropa dan kreditur internasional lainnya, kecuali bantuan yang telah disepakati untuk menyelamatkan sektor perbankan.
Meski begitu, Nomura yakin bahwa Spanyol itu tak bisa menghindari bailout penuh yang berarti ECB akan lebih besar berperan di pasar obligasi. “Skala pelarian modal yang terjadi selama beberapa bulan terakhir mendukung pandangan ini,” jelas Nordvig.
Ulasan Nomura tak sepenuhnya diyakini tepat. Analis lain berpendapat bahwa asumsi tersebut terlalu berlebihan. “Penurunan dana simpanan lebih disebabkan oleh aturan baru dan pengalihan aset ke obligasi jangka pendek,” ulas Carlos Garcia, Bankir Senior Societe Generale. Obligasi jangka pendek sendiri tidak diperhitungkan oleh sektor perbankan sebagai produk simpanan.
Dollar, Yen Gain as Moody’s Spain Review Fuels Haven Bid
By Kristine Aquino and Masaki Kondo – Aug 31, 2012 6:19 AM GMT+0700
The dollar and yen were set for weekly gains versus most of their peers as Moody’s Investors Service said its review of Spain’s debt rating for a possible downgrade will continue, spurring demand for haven assets as the euro region’s fiscal turmoil deepens.
Europe’s shared currency remained lower following a two-day decline after Spanish Prime Minister Mariano Rajoy delayed seeking a second rescue for his country as three regions said they will need emergency loans. The greenback was supported before data that may show improving consumer sentiment and factory orders and as investors weigh whether Federal Reserve Chairman Ben S. Bernanke will announce new stimulus when he speaks at an annual symposium in Jackson Hole, Wyoming later today.
Enlarge image U.S. Federal Reserve Chairman Ben S. Bernanke
Ben S. Bernanke, chairman of the U.S. Federal Reserve. Photographer: Joshua Roberts/Bloomberg
“The dollar and yen are resilient as it’s a risk-off market,” said Ken Takahashi, assistant vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “I don’t think Bernanke will make any commitment to specific policy in Jackson Hole.”
The dollar fetched $1.2503 per euro at 7:48 a.m. in Tokyo after climbing 0.5 percent in the previous two days to close at $1.2506 yesterday. The yen was at 98.28 per euro after rising 0.3 percent to 98.33 in New York. The greenback was little changed at 78.60 against its Japanese counterpart.
The dollar has gained 0.1 percent against the euro since Aug. 24, paring its decline this month to 1.6 percent. The yen rose 0.2 percent versus the shared currency in the past five days and has fallen 2.2 percent since July 31.
Moody’s review of Spain’s credit score started on June 13 and will probably continue through September, the New York based ratings firm said in a statement yesterday.
The review is dependent on the scope of the nation’s bank recapitalization, support available under the European Stability Mechanism and potential changes to the region’s existing crisis- management framework, Moody’s said. The company reduced Spain to its lowest level of investment grade on June 13, cutting it three steps to Baa3 from A3.
PDB AS Naik 1,7% di kuartal II 2012
Oleh Dian Pitaloka Saraswati – Rabu, 29 Agustus 2012 | 20:29 WIB
Produk Domestik Bruto atau Gross Domesic Product naik 1,7% di kuartal II tahun 2012 dibandingkan kuartal sebelumnya. Ekonomi Amerika Serikat terus membaik, meskipun kenaikannya tidak setinggi kuartal I 2012 yang naik sekitar 0,2%. Penyebab melambatnya PDB riil pada kuartal kedua terutama tercermin deselerasi di Personal Consumer Expenditur (PCE) atau pengeluaran pribadi serta di investasi tetap non hunian dan investasi tetap perumahan. Untungnya penurunan tersebutebagian diimbangi oleh yang angka penurunan yang lebih kecil dari pengeluaran pemerintah federal, kspor, dan penurunan yang lebih kecil secara investori investasi swasta. Data-data tersebut akan menjadi pertimbangan The Fed dalam rapat mereka pada tanggal 12-13 September mendatang perihal stimulus untuk mendukung pertumbuhan ekonomi AS.
BURSA ASIA: Indeks MSCI Asia Pacific naik 0,3% Jadi 120,21
Kamis, 16 Agustus 2012 | 09:13 WIB
HONG KONG: Harga-harga saham di Asia naik setelah pemerintahan China menyatakan inflasi mendesak Negeri Tirai Bambu itu untuk menyesuaikan kebijakan moneternya.
Hal itu menjadi indikasi positif bagi pertumbuhan perekonomian negara dengan perekonomian terbesar kedua di dunia itu.
Indeks MSCI Asia Pacific naik 0,3% menjadi 120,21 pada pukul 09.51 pagi di Tokyo. Pasar China dan Hong Kong belum dibuka.
Indeks Nikkei 225 naik 0,9%, bursa Australia S&P/ASX 200 naik 0,5%. Indeks bursa Korsel Kospi turun 0,2%. (Bloomberg/spr)
China Can Meet Growth Target on Positive Signs, Wen Says
By Bloomberg News – Aug 15, 2012
Chinese Premier Wen Jiabao said easing inflation allows more room to adjust monetary policy and positive signs are emerging in the economy, expressing confidence after July data showed a further slowdown in growth.
“We have the conditions and capabilities, and will be sure to fulfill this year’s economic and social development targets,” Wen said during a two-day inspection tour to the eastern province of Zhejiang, the official Xinhua News Agency reported yesterday. He said downward pressure on the economy remained “relatively large,” according to state radio, and state television reported him as saying there’s “growing room for monetary policy operation.”
The comments may bolster speculation China will cut banks’ reserve requirements or benchmark interest rates again after inflation slowed to a 30-month low in July, export growth collapsed and new yuan loans trailed estimates. Zhejiang, an export base, is among the hardest-hit regions by the economic slowdown.
“Policy makers have made clear in recent weeks that supporting economic growth is their central concern,” Qinwei Wang, an economist at Capital Economics Ltd. in London, said in an e-mail. “We continue to think that more policy support will be announced soon, including a further cut to the required reserve ratio, and that more infrastructure projects proposed by local governments will be given the go-ahead.”
Wang is a former employee People’s Bank of China, according to his profile on Capital Economics’ website.
The reports yesterday didn’t specify which targets China will meet, including the 7.5 percent goal for gross domestic product growth set in March. Expansion was 7.8 percent in the first half, and Deutsche Bank AG last week lowered its third- quarter forecast to 7.5 percent from 7.9 percent.
“In the recent months, especially since July, there are some positive changes in the economy,” said Wen, 69, as cited by state television. Domestic demand is showing greater effect in supporting economic growth, industrial output in eastern Chinese regions is picking up and China’s job market remains stable, he said.
Consumer prices rose 1.8 percent in July from a year earlier, the government said last week. Exports increased 1 percent, after an 11.3 percent rise in June. New local-currency lending was 540.1 billion yuan ($85 billion), lower than all 30 estimates in a Bloomberg News survey, compared with 919.8 billion yuan the previous month.
China has cut the reserve-requirement ratio for banks three times starting in November and lowered interest rates in June and July while accelerating approvals of investment projects.
Wen said his trip was intended to “enhance confidence.” China’s existing policies, including the two rate cuts, “have, and will continue to, play an important role in promoting economic development” and people’s livelihoods.
Aug. 14, 2012, 12:04 a.m. EDT
China’s neo-capitalism beating U.S. free markets
Commentary: China wins economic battle by borrowing U.S. ideas
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Yes, America’s locked in a deadly economic battle with China, a great 21st century war between two “one-party superpowers.” And our “free-market capitalist” party is losing to China’s “neo-capitalism.”
Yes, the communist party has invented its own hybrid “state-capitalism.” Now China’s winning, because Chinese rulers learned a crucial lesson: “one-party” authoritarianism doesn’t work.
A laborer holds a shovel as he looks on at a construction site in Beijing’s central business district.
But American politicians still don’t get it. Instead, going the opposite direction, in a brutal war for “one-party” control, as conservatives fight for total control of the government and a rebirth of the extreme free-market capitalism of Ayn Rand and her disciple Paul Ryan.
But it didn’t work last decade. Won’t work this time. Worse, it will trigger a new crash, bigger than the 2008 Wall Street meltdown. But what a bizarre contradiction: American drifting toward “one-party” authoritarian rule. While China is borrowing the best of our capitalism and roaring ahead to recapture its ancient role as the world’s superpower.
Yes, China is winning the 21st century economic war. In a few years China’s GDP will overtake America’s GDP and continue racing ahead of America for a generation.
Here’s the warning: A couple years ago the headline of a Foreign Policy feature by Nobel economist Robert W. Fogel, a renown China scholar, made clear what’s ahead: “$123,000,000,000,000: Why China’s Economy Will Grow to $123 Trillion by 2040.”
By 2040, China’s GDP at 40% of world, as USA’s GDP shrinks to 14%
China’s emerging economic superpower status is a direct result of China’s new hybrid political economy where the old “one-party” communist rule has been stealing the best of capitalism, mixing it with government planning and investment policies and racing to win the prize as global superpower. Listen to Fogle’s disturbing forecast in Foreign Policy:
“In 2040, the Chinese economy will reach $123 trillion, or nearly three times the economic output of the entire globe in 2000. China’s per capita income will hit $85,000, more than double the forecast for the European Union, and also much higher than that of India and Japan. In other words, the average Chinese megacity dweller will be living twice as well as the average Frenchman when China goes from a poor country in 2000 to a super-rich country in 2040. Although it will not have overtaken the United States in per capita wealth, according to my forecasts China’s share of global GDP — 40% — will dwarf that of the United States (14%) and the European Union (5%) 30 years from now. This is what economic hegemony will look like by 2040.”
So China’s on a roll. Meanwhile, over in America, we’ve become our own worst enemy in this economic war with China, essentially handing them the lead, handicapping ourselves by going deeper and deeper in debt — to China no less.
We’re surrendering our middle class tax dollars to China who turns around and invests those massive reserve dollars as cash and collateral to buy, build and own companies, agriculture lands, energy and mining reserves, and commodity assets all across the planet, while America’s political infighting saps our strength, handicapping us in this war with China.
China is wins while myopic narcissists handicap America
Bloomberg BusinessWeek’s recent feature “The Fiscal Cliff We All Saw Coming” is a perfect example of why America is now its own worse enemy, handicapping ourselves, helping China roar ahead on the way to a 40% to 14% global GDP superpower victory by 2040.
Admit it, we’re throwing the game. BW’s Brendan Greeley aptly characterizes America’s incredible ineptitude in this battle between our free-market “fiction” and China’s aggressive hybrid neo-capitalism that’s beating us in global markets. Listen:
“Now, more than a decade’s worth of tax cuts are set to come due in six months, each dreamed up and extended under the fiction that it would be temporary. In 2011 they contributed $1.1 trillion to the debt. In total, since 2001, the CBO calculates that tax cuts have put the Treasury $6.1 trillion in the red. This is what Washington now calls a crisis: completely predictable arithmetic, compounded over a decade by a consistent refusal to acknowledge reality. The fiscal cliff has been clearly visible in the distance for years. The reason we’re talking about it now is that, right on schedule, it’s finally become too big to ignore. The bottom line: The fiscal crisis shouldn’t come as a surprise: The Bush tax cuts had an expiration date because Congress knew they’d lead to big deficits.”
Wake up America: Do you see the denial, the lies, the delusions, the hypocrisy imbedded in our fictional “free market” capitalism? It’s killing America. Everyone in Washington knew in advance the tax-cuts-for-the-rich would add $6.1 trillion in debt, handicapping us.
Worse, the ship’s sinking and the clowns running our government want to make those temporary cuts permanent? That’s suicidal self-destruction. Yes, we are our own worst enemy. And like drug addicts loving the highs — tax cuts, debt, power — we can’t stop.
Two “one-party” nations: China adding capitalism, USA monopolistic
Let’s repeat for emphasis: China’s winning its economic race against America by moving away from a “one party” totally-planned communist economy. Today they’re mixing in the best of Adam Smith’s 1776 pure brand of capitalism. They’ve discovered that capitalism makes them richer, both individually and as a nation.
Yes, the Chinese are loving our capitalism.
Meanwhile, on this side of the planet, America is subtly rejecting Adam Smith’s pure capitalism in favor of what Vanguard’s founder, Jack Bogle calls “mutant capitalism.”
That’s right: America’s power elite is turning away from capitalism, obsessed with becoming a “one-party” nation with monopoly power controlled by a Super-Rich elite that is guided by the extreme, rigid dogma of capitalism’s high priestess Ayn Rand, whose principles are now imbedded in the Ryan Budget.
Two superpowers going in opposite directions: China absorbing the best of capitalism, while American conservatives are sabotaging democracy and free-market capitalism in favor of a monopolistic “one-party” nation favoring a Super-Rich anarchy.
USA’s suicidal infighting surrendering 21st century to China
That pretty much describes America’s new zeitgeist: An elite bloc of Super-Rich conservatives is spending over a billion dollars to achieve “one-party rule:” Their goal, absolute power over America, the presidency, Senate and House, and ultimate control over the Fed’s money machine, Supreme Court, taxing powers and appointments in all regulatory agencies … that’s the goal, a new “one-party” America.
Fortunately for the Chinese, over the past few generations they’ve learned that “one party” absolute rule doesn’t work. And in the last decade, Americans also discovered it doesn’t work here. But we forgot. And unfortunately, both political parties are guilty of creating this mess over the past generation.
Worse, no matter who’s elected president, nothing will change. Why? The internecine political drama will intensify no matter how much our self-destructive infighting damages our economy. The quest for absolute political power distorts the brain.
But in the process, we’re surrendering the 2040 victory to China with our rigid dogma about no-compromise, no-new-taxes, permanent tax cuts for the rich, more defense spending.
Fortunately, Stiglitz sees some hope, a new America Revolution?
Yes, there is hope, though not soon enough. Our brutal elections and fiscal cliff battles will push us into more of the same well into the next presidential term. We really are our own worse enemy, so America’s economy may have to get much worse before our arrogant Super Rich and their bought politicians and lobbyists are shocked awake.
We saw that ray of hope in Jared Bernstein’s recent Rolling Stone interview of Nobel economist Joseph Stiglitz and his new book, “Price of Inequality: How Today’s Divided Society Endangers Our Future”:
Stiglitz warns, “let me put it very forcefully: No large economy has ever recovered from an economic downturn through austerity. It’s not going to happen in the United States and it’s not going to happen in Europe.” Someday the Super Rich are going to wake up to the “realization that unless the country does well together, even the 1% won’t do well.”
Yes, he sees hope in, of all places, capitalist self-interest, a tipping point, sudden epiphany:
“When you have a highly divided society, it’s hard to come together to make investments in the common good,” so “one of two things, or both, can happen: One, the 1 percent will realize that the direction we’re going is not even in their own self interest, and, two, the 99 percent realize that they’ve been sold a bill of goods.”
And trigger a revolution? Maybe. Stiglitz warns that America has “reached a level of inequality that is really intolerable and we are all paying that price.” But until a sudden global shock and a great awakening, America will just keep surrendering the future to China.
Inflasi harga konsumen di Cina secara mengejutkan menguat bulan Juli lalu,
seperti dilaporkan oleh data resmi hari ini (9 Agustus 2012).
Dalam laporannya, National Bureau of Statistics of China mengatakan bahwa
CPI Cina naik dengan tingkat tahunan 0,1% ke 1,8% dari minus 0,6% pada
bulan sebleumnya atau urun 2,2% dari Juni sebelumnya. (finance roll/dk)
- August 8, 2012, 8:25 AM
Vital Signs Chart: Consumer Credit Growth
By Conor Dougherty
Growth in consumer credit has slowed amid more caution. Total consumer credit outstanding increased $6.5 billion to $2.58 trillion in June from a month earlier, the slowest pace in eight months. Consumers cut back on credit- card debt — a sign that a recent slowdown in growth has some people more wary of spending — while student loans continued to rise.