From Zero Hedge:
It seems like it was only yesterday when we were praising the miraculous 4 sigma move in AAPL stock, when it soared by nearly $40 in one trading session. It wasn't: it was November 19. Which is why it probably shouldn't be surprising that two short weeks later AAPL stock has just seen its biggest dollar fall in absolute terms in history, down $37 dollars or nearly 7%, its biggest one-day percentage drop since September 2008. Why? Nobody really knows, but when the world's biggest company by market cap trades increasingly like a penny stock, does anyone really care? In absolute terms, AAPL has lost nearly $35 billion in market cap in several hours today: more than the market cap of BlackRock, Morgan Stanley or Wal-Green, with no real material news except for the occasional weak order hearsay (which one didn't really need considering the US and global consumer is totally tapped out), and various other rumors. One thing is certain: the 240+ hedge funds who owned the stock as of September 30, and which did their best to paint the tape for November, are now at a complete loss what to do to delay what was certainly going to be a redemption avalanche for the second month in a row.
http://www.zerohedge.com/news/2012-12-05/aapl-suffers-biggest-market-cap-loss-ever
Friday, December 7, 2012
Wednesday, December 5, 2012
Yuan and Won: Now this is New
China has been the largest trading partner of Korea. Any moves and policy changes coming out of China have been significant to Korea. This currency swap deal seems to be associated with the USD status in the long term context.
Geopolitics has been an important part in the global economic landscape as well.
From Zero Hedge:
There has been much fanfare over the swap lines that China's central bank has established with numerous countries. Many observers see those lines as evidence of the internationalization of the yuan and its increasing importance in the global economy.
We were somewhat more skeptical, recognizing that the swap lines were not being used. It seemed it was mostly about optics and less about substance.
However, earlier this week South Korea and China made an announcement that suggests a new and more substantive evolution. Essentially, China and South Korea indicated they will activate the swap line (KRW 64 trillion and CNY360 bln roughly equivalent to $59 bln). The purpose is to lend yuan and won to importers/exporters via banks to facilitate the settlement of bilateral trade flows.
Reports suggest the central bank of South Korea will begin holdings meetings with domestic firms to explain how the new facility will work. Initially, yuan loans of 3-6 months is anticipated. Chinese firms will have new access to won, though the details are not immediately clear.
China is South Korea's single largest trading partner, accounting absorbing a quarter its exports. Bilateral trade was about $220 bln last year, but only 3% was settled in the yuan or won, with the latter having a greater share. SWIFT, the major global transactions services company, reports that the yuan, which is not fully convertible, was the 16th most used currency in terms of world payments in October.
China has been keenly pursuing the internationalization of the yuan. Data from the PBOC shows that during the first three quarters of this year, about 11.4% of China's total trade or CNY2.05 trillion (~$329 bln) was settled in yuan. In 2011, about 8.4% of China trade was settled in yuan.
However, the China-Korea agreement is not just about the yuan. The Korean won will also be used to settle trade. This is important. The internationalization of the yuan is being bolstered by a larger effort to use local currencies to settle trade flows. China is the world's largest exporter. South Korea is the world's seventh largest exporter.
The agreement took a couple of years to negotiate and could be template for others. The deputy director general of the Bank of Korea's international department said that it intends to arrange similar agreements with others trading partners.
Lastly, it seems noteworthy that the security issues and the escalation of the territorial dispute appears on a completely separate track from the closer economic integration. Although these seems like a contradiction, it does not appear necessary to be resolved in the short to medium term.
http://www.zerohedge.com/contributed/2012-12-05/yuan-and-won-now-new
BoE's Andrew Haldane: Loss Of Income Caused By Banks As Bad As a 'World War'
From the Telegraph:
The economic impact of the global financial crisis has been as bad as a world war and as a result public anger at banks was reasonable and understandable, said Andrew Haldane, a senior Bank of England official
Mr Haldane, the Bank's executive director for financial stability, told BBC Radio 4's The World at One on Monday that the scale of the loss of income and output as a result the crisis started by banks was as damaging as a "world war".
"There is every reason why the general public ought to be deeply upset by what has happened – and angry," he said.
"If we are fortunate, the cost of the crisis will be paid for by our children. More likely it will still be being paid for by our grandchildren."
Mr Haldane, the Bank's executive director for financial stability, said banks needed to be more honest about the risky assets on their books if confidence was to be restored to the system and lending to business was to flow again.
"Investors will be much less willing to put their money into the banking system. They will lack confidence in the banking system and will either charge very high rates for lending that money to banks or will just withdraw their money entirely," he warned.
He urged banks to "spring clean" their balance sheets to get credit into the system and create a "springboard" for a recovery in the economy.
http://www.telegraph.co.uk/finance/financialcrisis/9719300/Loss-of-income-caused-by-banks-as-bad-as-a-world-war-says-BoEs-Andrew-Haldane.html
The economic impact of the global financial crisis has been as bad as a world war and as a result public anger at banks was reasonable and understandable, said Andrew Haldane, a senior Bank of England official
Mr Haldane, the Bank's executive director for financial stability, told BBC Radio 4's The World at One on Monday that the scale of the loss of income and output as a result the crisis started by banks was as damaging as a "world war".
"There is every reason why the general public ought to be deeply upset by what has happened – and angry," he said.
"If we are fortunate, the cost of the crisis will be paid for by our children. More likely it will still be being paid for by our grandchildren."
Mr Haldane, the Bank's executive director for financial stability, said banks needed to be more honest about the risky assets on their books if confidence was to be restored to the system and lending to business was to flow again.
"Investors will be much less willing to put their money into the banking system. They will lack confidence in the banking system and will either charge very high rates for lending that money to banks or will just withdraw their money entirely," he warned.
He urged banks to "spring clean" their balance sheets to get credit into the system and create a "springboard" for a recovery in the economy.
http://www.telegraph.co.uk/finance/financialcrisis/9719300/Loss-of-income-caused-by-banks-as-bad-as-a-world-war-says-BoEs-Andrew-Haldane.html
Still Not Spreading the Wealth Around
From Zero Hedge:
Obama has always claimed to want to spread the wealth around. Yet, as I stressed this June (and in my first ever blog post way back in July 2011!) that’s the exact opposite of what he has achieved.
And it’s getting worse, not better.
Wages-as-a-proportion-of-GDP just hit another all-time low:
And corporate-profits-as-a-proportion-of-GDP just hit another all-time high:
Obama might throw a lot of rhetoric about fighting for the middle class.
But the reality has been the opposite. America today is all about the enrichment of big banks, financial corporations and the military-industrial complex, while the working class has rotted.
http://www.zerohedge.com/news/2012-12-03/guest-post-still-not-spreading-wealth-around
Obama has always claimed to want to spread the wealth around. Yet, as I stressed this June (and in my first ever blog post way back in July 2011!) that’s the exact opposite of what he has achieved.
And it’s getting worse, not better.
Wages-as-a-proportion-of-GDP just hit another all-time low:
And corporate-profits-as-a-proportion-of-GDP just hit another all-time high:
Obama might throw a lot of rhetoric about fighting for the middle class.
But the reality has been the opposite. America today is all about the enrichment of big banks, financial corporations and the military-industrial complex, while the working class has rotted.
http://www.zerohedge.com/news/2012-12-03/guest-post-still-not-spreading-wealth-around
Jim Quinn: All I Want For Christmas Is The Truth
From Zero Hedge:
We find ourselves more amazed than ever at the ability of those in power to lie, misinform and obfuscate the truth, while millions of Americans willfully choose to be ignorant of the truth and yearn to be misled. It’s a match made in heaven. Acknowledging the truth of our society’s descent from a country of hard working, self-reliant, charitable, civic minded citizens into the abyss of entitled, dependent, greedy, materialistic consumers is unacceptable to the slave owners and the slaves. We can’t handle the truth because that would require critical thought, hard choices, sacrifice, and dealing with the reality of an unsustainable economic and societal model. It’s much easier to believe the big lies that allow us to sleep at night. The concept of lying to the masses and using propaganda techniques to manipulate and form public opinion really took hold in the 1920s and have been perfected by the powerful ruling elite that control the reins of finance, government and mass media. How many Americans are awake enough to handle the truth? Abraham Lincoln once said that he believed in the people and that if you told them the truth and gave them the cold hard facts they would meet any crisis. That may have been true in 1860, but not today.
http://www.zerohedge.com/news/2012-12-03/guest-post-all-i-want-christmas-truth
We find ourselves more amazed than ever at the ability of those in power to lie, misinform and obfuscate the truth, while millions of Americans willfully choose to be ignorant of the truth and yearn to be misled. It’s a match made in heaven. Acknowledging the truth of our society’s descent from a country of hard working, self-reliant, charitable, civic minded citizens into the abyss of entitled, dependent, greedy, materialistic consumers is unacceptable to the slave owners and the slaves. We can’t handle the truth because that would require critical thought, hard choices, sacrifice, and dealing with the reality of an unsustainable economic and societal model. It’s much easier to believe the big lies that allow us to sleep at night. The concept of lying to the masses and using propaganda techniques to manipulate and form public opinion really took hold in the 1920s and have been perfected by the powerful ruling elite that control the reins of finance, government and mass media. How many Americans are awake enough to handle the truth? Abraham Lincoln once said that he believed in the people and that if you told them the truth and gave them the cold hard facts they would meet any crisis. That may have been true in 1860, but not today.
http://www.zerohedge.com/news/2012-12-03/guest-post-all-i-want-christmas-truth
Sunday, December 2, 2012
"If I speak in the tongues of men or of angels, but do not have love, I am only a resounding gong or a clanging cymbal. If I have the gift of prophecy and can fathom all mysteries and all knowledge, and if I have a faith that can move mountains, but do not have love, I am nothing. If I give all I possess to the poor and give over my body to hardship that I may boast, but do not have love, I gain nothing.
Love is patient, love is kind. It does not envy, it does not boast, it is not proud. It does not dishonour others, it is not self-seeking, it is not easily angered, it keeps no record of wrongs. Love does not delight in evil but rejoices with the truth. It always protects, always trusts, always hopes, always perseveres.
Love never fails. But where there are prophecies, they will cease; where there are tongues, they will be stilled; where there is knowledge, it will pass away. For we know in part and we prophesy in part, but when completeness comes, what is in part disappears. When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put the ways of childhood behind me. For now we see only a reflection as in a mirror; then we shall see face to face. Now I know in part; then I shall know fully, even as I am fully known.
And now these three remain: faith, hope and love. But the greatest of these is love."
1 Corinthians 13
Love is patient, love is kind. It does not envy, it does not boast, it is not proud. It does not dishonour others, it is not self-seeking, it is not easily angered, it keeps no record of wrongs. Love does not delight in evil but rejoices with the truth. It always protects, always trusts, always hopes, always perseveres.
Love never fails. But where there are prophecies, they will cease; where there are tongues, they will be stilled; where there is knowledge, it will pass away. For we know in part and we prophesy in part, but when completeness comes, what is in part disappears. When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put the ways of childhood behind me. For now we see only a reflection as in a mirror; then we shall see face to face. Now I know in part; then I shall know fully, even as I am fully known.
And now these three remain: faith, hope and love. But the greatest of these is love."
1 Corinthians 13
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