AsianBondsOnline Newsletter (5 September 2011)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20110905.pdf?src=wdh&id=Vd7k9wdkOhnXujvrtQLVzHQl3Ygf9j

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News Highlights - Week of 26 August - 2 September 2011

Gross domestic product (GDP) growth in the Philippines fell to 3.4% year-on-year (y-o-y) in 2Q11-the fourth straight quarter of slowing growth. The 2Q11 data brought the country's GDP growth in 1H11 to 4.0% y-o-y following 4.6% growth in 1Q11. The slowdown in GDP growth was due to faltering global demand that curbed exports and investments. Despite the global slowdown, the Philippine economy benefited from a robust rebound in the agriculture sector; the sustained, albeit slowing, performance of the manufacturing sector; and balanced growth in the services sector. On the demand side, consumer spending also boosted GDP with growth of 5.4% y-o-y in 2Q11.

*Japan's industrial production rose 0.6% in July from the previous month, the slowest monthly growth rate since March. In the Republic of Korea, industrial output in July grew at the slowest pace in 10 months, 3.8% y-o-y, as annual growth rates in manufacturing and producers' shipments fell. In Viet Nam, industrial production surged 5.8% y-o-y and 4.3% month-on-month (m-o-m).

*Retail sales in Hong Kong, China grew 29.1% y-o-y to HKD35.2 billion in July on account of robust local consumption and tourist spending. In Viet Nam, the total value of retail sales of goods and services increased 22.2% to VND1,224 trillion (USD59.7 billion) in the first 8 months of the year.

*Consumer price inflation for the Republic of Korea accelerated to 5.3% y-o-y in August, the highest level in 3 years, mainly triggered by a sharp increase in food prices. In Thailand, consumer price inflation in August rose to 4.3% y-o-y, the highest level since September 2008, spurred by escalating food costs.

*The Republic of Korea's trade surplus plunged to USD821 million in August from USD6.3 billion in the previous month, amid strong import growth and only modest export growth. In Thailand, the current account surplus widened to USD3.6 billion in July from USD2.5 billion in June, as the trade surplus for the month increased to USD2.7 billion from USD1.9 billion in the previous month.

*The People's Bank of China (PBOC) announced its plan to include the margin deposits of commercial banks-the deposit paid by clients to secure the issuance of banker's acceptance and letters of credit-as part of the reserve requirement in order to mop up excessive liquidity. Meanwhile, the State Bank of Viet Nam issued its decision, effective 1 September, to increase foreign currency reserve requirement ratios for demand deposits and time deposits.

*Last week, notable bond issuances from the People's Republic of China included commerical paper from Sinohydro Group (CNY1 billion), Shaanxi Regional Electric Power (CNY1 billion), and Metallurgical Corporation of China (CNY3 billion). In the Republic of Korea, steel producer Posco priced a KRW500 billion 5-year bond at a coupon rate of 3.99%. In Thailand, Glow Energy Public Company Ltd. issued a 10-year bond worth THB5.6 billion with a 5.0% coupon.

*Government bond yields fell last week for all tenors in Viet Nam and for most tenors in the Republic of Korea, Malaysia, the Philippines and Singapore. Yields rose for all tenors in the PRC and for most tenors in Thailand. Yield movements were mixed in Hong Kong, China; and were mostly unchanged in Indonesia. Yield spreads between 2- and 10- year maturities widened in the Philippines and Thailand, while spreads narrowed in most other emerging East Asian markets.

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Fw: Absolute Return Letter September and Global corporate ratingactivity-First Half 2011

---

From: MANOJ JETHVA <manoj.jethva@gmail.com>

Date: Sat, 3 Sep 2011 09:27:27 +0530

To: manoj.jethva<manoj.jethva@gmail.com>

Subject: Absolute Return Letter September and Global corporate rating activity-First Half 2011

With Regards

Manoj Jethva

+91-9224668855

 

 

Michael Lewis Gets Taken Off The Pedestal

via Capital Mind by Deepak Shenoy on 8/30/11
Michael Lewis gets skewered on his Vanity Fair piece on Germany, by Scott Locklin:

Michael Lewis is the preeminent financial journalist of our age. In many ways, Michael Lewis is the

only financial journalist of our age. No other author on finance is so widely read. His articles are widely taken as something like the conventional wisdom. This is a great tragedy, as, despite the fact that Michael Lewis is unarguably a great writer, he's a terrible journalist. Reading a Michael Lewis article on finance is much like watching the evening news. It gives you the impression that you're well informed, but in reality, you've been deceived by noise.

The entire piece is a good read, and reveals that:

• Germany didn't have a financial crisis,• Lewis is overboard on the turd thing. Without revealing the source, the funniest comment I heard was that his kid is getting potty trained, which makes him overexposed to poop. I don't find that hard to believe :)• Lewis didn't talk about how Germany managed to not get wet when it was raining all over the world. Yeah, that's true. For the stories don't tell you enough.• Lewis' Iceland piece left out the villains. (Read)• There is a toilet museum in Delhi!​◦ He wrote, in 2007, about how the "growing derivatives markets" brought stability to the economic system​The Sarbanes-Oxley Act sticks a wrench in the American market for initial public offerings, and the capital-raising business simply removes itself to London and Hong Kong. Thailand installs capital controls and the markets force it to reverse its policy, virtually overnight -- again with nary a ripple. The Brazilian real is now less volatile than the Swiss franc; Botswana's debt is now more highly rated than Italy's. Oil prices double, the U.S. housing market tanks -- no matter what happens, financial markets adjust quickly and without hysteria. …

There are obviously a few things to worry about just now in the world, but the inability of traders to find a sensible price for the spread between European junk and European Treasuries isn't one of them.

◦ Uh oh.◦ Janet Tavakoli totally kills him for that, saying he mangled facts in his eagerness to create a story. Janet was one of those that predicted the crisis and maintains, with strong evidence, that wall street banks behaved recklessly, and knowingly frauded customers.
I've felt for a while since that Vanity Fair article that Lewis held something back. There were obviously enough juicy tidbits to work with – with Deutsche Bank being one of the major players in the worldwide crisis, with German banks levered

more than 50 to 1 (which implies that a 2% drop in asset values will wipe them out) and consequently, with their banking system allowing them to lie and borrow against collateral that, in other less blind countries, would classify as toilet paper. No, they have indeed not had a financial crisis, but they are like a pig that keeps getting fatter and looks healthier until…that day.

The drama of Europe will have to be written. I will look forward to books by Roger Lowenstein, Niall Ferguson, Frank Partnoy and yes, even Michael Lewis. Because to piece the story together, you have to read more than one book, and read more than one web site. Of the lot, I would (now) give Lewis the least importance. He is entertaining, but indeed has dropped in my mind after the above articles. I'll read his books, but won't expect to get the full story.

(Note: I have recommended his book "

Panic"  on the right sidebar of this blog. It consists of writing from a number of authors, not just Lewis. I still think his other books are good reads.)

Read the full article at

http://capitalmind.in/2011/08/michael-lewis-gets-taken-off-the-pedestal/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CapitalMind+%28Capital+Mind%29

Roubini Sees 60% Chance of A Double Dip in 2012

via Value Investing News by jacobwolinsky on 9/1/11

By EconMatters

Party heardy NYU economist Nouriel Roubini went on Bloomberg TV on Aug. 31 to give his latest prediction of the global economy: "We've reached a stall speed in the economy, not...

Read article at

http://www.valuewalk.com/financial-crisis/roubini-sees-60-chance-double-dip-2012-china-brazil-risk/