Daily: BIS Report; States Getting Act Together; Majority in Germany and France want Greece Out

June 26, 2012

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Research:

Defense Policies Against Currency Attacks: Predictions in a Global Game with Multiple Equilibria ~ RePEc might be a good idea to brush up policy responses now that emerging markets currencies are predictably nearing crisis territory

Responding to a Shadow Banking Crisis: The Lessons of 1763 ~ FRB given this was conducted by the Fed, naturally, they speak favorably of putting out the fire with flammable material

Minyanville on the BIS report ~minyanville

  • The stock market hit new highs in 2007, then collapsed; likewise, inflation will rise before bonds collapse- O’Shea, Comac Capital

An MIT Education for Less than $2000 ~ TEDx

BIS 82nd Annual Report ~ BIS

On the limits of Central Banking ~BIS

US:

State planned spending is for a gain of 2.2% versus a 35 year average of 5.7% and below the 4.4% rise in state tax revenue. $MUB -

  • States, forced by balanced budget amendments and inability to print, have balanced their budgets mostly through spending cuts instead of tax increases.
  • Real estate is surging, which should further buoy tax revenues.

The Economy is Slowing Down ~ WSJ

China:

Publicis, a French advertising company, hit by stagnant China Ads ~ Bloomberg

“The Nine Nations of China” ~ @prchovanecStill more parallels to the former Soviet Union

  • In Beijing, between 70% and 80% of all deadly cancer cases are related to the environment Global Association of Risk Professionals (PDF, 2008)
  • One-third of the urban population is breathing polluted air
  • One-fourth of Chinese citizens lack access to clean drinking water

Summary of hedge funds bearish China thesis’ – Kynikos, Pivot, Eclectica etc, (PDF)

  • In previous infrastructure-driven investment bubbles, the peak in market expectations has coincided with the peak in growth momentum ~ Pivot
  • Idle capacity in China’s steel sector is equivalent to the total steel production capacity of Japan and South Korea combined, planning more
  • Too much to list, great compilation
  • Amid this ocean of excess Chinese steel supply, China’s NDRC recently approved three new steel plants

‘China is presently in default on approximately $260 billion of bonds due to mature in 1960′ –Have
heard this now a few times

World:

Poll: 78% in Germany, 65% percent in France, 51% in Spain, 49% in Italy Want Greece to Exit Euro ~ Mish

Harder Times Coming For Brazil, says BIS ~ Forbes
predictable ~historysquared

  • Brazil defaults on consumer debt up to 7.4% in April; lending growth slowed to 18% from record 34% ~ Bloomberg

AA corporate bonds in China yield 5.48%, according to Chinabond, vs 9.86% for yields on AA bonds in India

Italian corporate and household bad debt totaled 109 billion, up 15% from a year earlier ~ Bloomberg

Foreign currency denominated deposits held in Singapore’s banks rose 43% y/y in March on safe haven flows. ~ Bloomberg

Japanese corporates hoarding cash, an uptick in global economy could reduce this cushion at the same time GPIF turned sellers. Bloomberg

“When the global economy and capital flow slow down, it’s going to expose a lot of problems in [BRIC] countries” ~ Stephen Jen, SLJ

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