Thursday, December 31, 2009

Chinese Slapped in Steel Dispute

By KRIS MAHER and HENRY J. PULIZZI U.S. steelmakers won a case over Chinese steel imports, as the U.S. International Trade Commission voted that the domestic industry has been damaged by subsidized steel from China. The ruling Wednesday will result in duties of between 10% and 16% on future imports of Chinese steel pipes used to extract natural gas and oil. It is the latest in a string of trade decisions against China, the U.S.'s largest trading partner, and threatens to further aggravate trade tensions between the two nations. On Tuesday, the U.S. imposed preliminary antidumping duties on imports of steel-grate products from China, prompting strong reaction from the Chinese, who said it sent a "wrong, protectionist signal." Earlier this year, the Obama administration imposed tariffs of 35% on consumer tires from China, which was answered by a Chinese probe into whether U.S.-made autos were being dumped in China at unfairly low prices. The U.S. International Trade Commission rules unanimously against Chinese steelmakers, in the latest blow in an ongoing trade war between the two countries. The steel-pipe case is the ITC's biggest ever by dollar amount, and comes as the world's recession and overall drop in demand for steel products has left steelmakers competing for a smaller pool of customers. All six commissioners ruled that imports of so-called oil country tubular goods from China, totaling $2.8 billion in 2008, injured U.S. manufacturers. The commission is made up of three Democrats and three Republicans, five of whom were appointed by the Bush administration and one by the Clinton administration. An official in the news department of China's Ministry of Commerce said that China "resolutely opposes" the ruling, adding that the ministry will elaborate in a full statement Thursday. The Chinese government can appeal the decision to the World Trade Organization, and Chinese steelmakers can appeal to a federal district court in New York that handles trade cases. Daniel Porter, a Washington attorney representing the Chinese exporters, said a decision on whether to appeal could be made in several weeks, once a detailed ruling by the ITC explaining the rationale for its decision is made public. "We are obviously disappointed," Mr. Porter said. Chinese steelmakers argued that the U.S. industry is trying to stymie legitimate competition and wasn't injured by the imports. They note the U.S. steel industry was making record profits, especially in 2008, when selling pipe and tube to energy and exploration countries, and argued that Chinese imports increased to meet demand in the U.S. While prices did eventually fall and inventories grew in the U.S., China's steelmakers said the same thing happened around the world as a result of the weakening world economy. But U.S. steelmakers, along with the United Steelworkers, said China tripled its imports into the U.S. -- a big consumer of tubular steel -- causing a 50% drop in prices, swelling inventories and causing the layoffs of 3,000 workers. U.S. Steel Corp. said it was pleased with the ITC's ruling Wednesday. "This enormous surge of unfairly traded goods resulted in an overhang of inventory that crippled the domestic industry," the company said. Pittsburgh-based U.S. Steel and seven other domestic producers, along with the United Steelworkers, filed a trade complaint in April against Chinese producers and exporters, claiming China's government was subsidizing pipe-production costs. Last month, the U.S. Commerce Department imposed countervailing duties on the steel pipes ranging from 10.4% to 15.8%. The ITC's decision Wednesday allows the government to finalize those duties. A worker at a steel-product market this month in Shenyang, China. The U.S. has imposed duties and tariffs on many Chinese products. The Commerce Department and ITC also will make separate decisions in coming months on whether to impose antidumping duties on Chinese steelmakers, if it is determined that the pipe products were dumped onto the U.S. market at prices below the cost of production. The U.S. steel industry, backed by organized labor, is known for filing trade cases against competitors involving several different types of products from wire hangers to steel grates. The energy market -- the key end market for steel pipe -- is critical to steelmakers because it tends to be more resilient in downturns compared to auto and appliance markets, which are hurt when labor and job markets are weak and consumers cut back spending. Drillers use so-called tubular goods to line wells and carry oil and natural gas from wells to consumers. The decision has far-reaching implications, giving domestic producers better pricing power and more incentive to invest in production. They aren't expected to resume production or hire laid-off steelworkers until inventory levels fall. Chinese steelmakers are in a bind because they have excess capacity and can't automatically funnel it to Europe, because the European Union and steel producers there have beefed up trade actions against China as well. Buyers are also affected both near and long term. Prices are expected to rise and some are already looking for alternative suppliers. "By shutting off this Chinese steel, it's going to put a tremendous amount of pressure on the tubular industry," said Mike Jordan, CEO of Mike Jordan Co. in Fort Smith, Ark. Mr. Jordan said his company, which sold $250 million of tubular steel in the past three years, is searching for products from other countries, but he added: "There's not enough quality steel mills in the world to produce the type of steel needed for wells being drilled in the U.S." He predicted domestic steel producers will raise steel prices that could eventually be passed on to consumers. New duties on imported pipe "could tighten up a highly oversupplied market," said Joe Hill, a vice president of Houston energy investment bank Tudor Pickering Holt. While he expects that it will become more expensive to drill wells, tubular goods are a small percentage of well-drilling costs. [steel] —Robert Guy Matthews and Russell Gold contributed to this article. Write to Kris Maher at and Henry J. Pulizzi at

Bond Investors Bet on Japan's Day of Reckoning

By GREGORY ZUCKERMAN And JOANNA SLATER Some hedge funds are starting to wager on painful times ahead for Japan, the world's second-largest economy. These investors, including some who made successful bets against risky mortgages and financial companies in recent years, anticipate trouble for Japan's financial system. Their concern: Government borrowing continues to climb while demand for the nation's debt could taper off. View Full Image Agence France-Presse/Getty Images A currency dealer in Tokyo waits for an order in November. Some bets on derivatives by bearish traders could pay off handsomely if the yen lost a quarter or more of its value. A collapse of the Japanese government-bond market "is going to happen; it's a question of when," said Kyle Bass, head of Hayman Advisors LP, a Dallas hedge fund, who has placed wagers on that outcome. He and others, such as David Einhorn's Greenlight Capital Inc. and a fund run by Daniel Arbess of Perella Weinberg Partners LP, have been buying a variety of investments that could pay off if the Japanese bond market crumbles. Betting against the debt of various nations such as Greece and Ireland has proved a popular move during the past several months as worries have mounted over deteriorating government finances in the aftermath of the financial crisis. But a selloff in Japan's bonds would be much more worrisome than woes in some other countries, because of the size of Japan's bond market, 694.3 trillion yen, or about $7.543 trillion, and the role Japan plays in the global economy. "In Japan, the mist has subsided and you see this huge mountain of debt," said Tom Byrne, a sovereign-credit analyst for Asia for Moody's Investors Service. That has raised concerns among some that "this could blow," although Mr. Byrne doesn't believe that will happen. A spokesman for Japan's Ministry of Finance declined to comment. Not everyone is worried. For starters, the wager against the country's debt has a long and unprofitable history, saddling investors with big losses. And even those with deep convictions about Japan's troubles are hedging themselves. Mr. Bass has placed only a small portion of his $650 million fund in bearish Japanese bond investments. Despite an increasing debt burden and long-standing predictions that demand for government bonds would flag, the market has held up. The biggest buyers remain domestic investors that hold almost all of the nation's debt, such as Japanese banks, pension funds and insurance companies. That has kept yields, which move in the opposite direction of prices, low. The yield on Japan's 10-year government bond hasn't gone above 2% in more than a decade. The presence of domestic, rather than foreign, investors also reduces the possibility of a mass exit from the market. Moreover, Japan has been plagued by bouts of deflation-falling consumer prices since the late 1990s. In November, consumer prices fell for the ninth month in a row. If that persists, bonds may continue to have allure, because even slender yields can look good amid deflation. Even some who believe yields will rise don't expect the big increase envisioned by the hedge-fund pessimists. "I just don't think it's the blowout trade some funds think it is," said George Papamarkakis of North Asset Management LLP, a London hedge fund. But bears maintain there are reasons to bet against Japan. They note that government debt as a percentage of gross domestic product is expected to hit 219% in 2009, up from 120% in 1998, according to the International Monetary Fund. By way of comparison, debt will total 85% of the U.S.'s GDP, and 69% of the U.K.'s, the IMF said. Even net government debt, which subtracts government assets, is high in Japan; the IMF puts it at 105% of GDP in 2009, compared with 58% for the U.S. Some predict that as Japan ages, more people retire and savings rates dip, some purchasers will start pulling back on buying or even turn into sellers. Japan's public pension fund, the world's largest, has said it could become a net seller of holdings in 2010. About three-quarters of the fund's holdings have been in Japanese bonds. "The biggest buyer is now a seller. That's the biggest difference today," said Mr. Bass of Hayman Advisors. To attract buyers, particularly from overseas, yields will have to rise significantly, the bears assert, making it painful for Japan to service its debt. The election of new government leadership in August also has ramped up anxieties of investors, who fear less-experienced officials will spend too freely in an effort to put money in the hands of ordinary Japanese. On Wednesday, the government unveiled a plan to try to spur the economy and cut employment. Japan's government recently stopped short of setting a firm limit on new debt sales in the next fiscal year, a sign for bears that the country isn't committed to fiscal discipline. Bloomberg News Perella Weinberg's Daniel Arbess anticipates trouble for Japan. Some investors burned in the past now find the trade hard to ignore. Back in 1995, David Roche, head of investment consultancy Independent Strategy, predicted that Japanese yields would rocket higher. He went so far as to call the country's debt "junk bonds in drag." That turned out to be "dead wrong," he acknowledged this year, because Japanese investors kept on depositing their savings in banks. The banks funneled the savings, together with cheap money from the central bank, back into government bonds, keeping prices buoyant and yields low. But that arithmetic can't be repeated now, Mr. Roche wrote in a recent report. Although Japan's stock of savings remains large, the savings rate has dropped below 3%, from more than 10% in the 1990s. Traders are betting against Japan's debt in myriad ways. Some bearish traders are entering into option contracts betting on "forward rates," or the direction of Japanese yields. These options are among the most heavily traded of the commonly used bearish tools, so some beginners to the game are embracing them. The downside is investors can find themselves exposed to big losses if yields fall further. Others buy credit-default swaps, derivative contracts that serve as insurance to protect against a default of Japan's debt. The cost to insure $10 million of Japanese bonds is about $70,000 a year for five years. That price has climbed from less than $50,000 since October. Still others are buying more exotic instruments, such as "CMS caps," also called constant-maturity-swap caps, and "swaptions." These interest-rate options reward a buyer if Japanese rates climb over the next few years, but limit downside because there is only a one-time upfront payment. Mr. Bass has purchased protection on about $12 billion of Japanese bonds, according to a person close to his firm, a move that is costing him about $6 million, a skimpy price because most investors still doubt the trade will succeed. If 10-year yields, currently at 1.3%, rise to 3% or so, Mr. Bass won't make that much; but if they hit 4%, he would make about $125 million on his $6 million investment. He will make at least $125 million for each subsequent percentage-point rise, according to people close to the firm. Still, such bets are on the rise. Traders said they can see increased interest in derivatives that would pay handsomely in extreme outcomes, such as if interest rates on Japanese government bonds multiplied several times, or if the yen lost a quarter or more of its value. Write to Gregory Zuckerman at and Joanna Slater at

Wednesday, December 30, 2009


  近期,市场关于推出期待已久的股指期货预期不断升温,继证监会主席尚福林等多位监管层领导密集表态将尽早推出股指期货后,近来有关股指期货的声音从来都没有停止过,股指期货似乎也离投资者越来越近了。股指期货一旦推出,对整个市场影响深远。主要表现在:   1、股指期货推出,将提升蓝筹股的估值水平及流动性。因股指期货跟踪的标的指数是沪深300指数,预期股指期货推出后沪深300指数权重股的需求将明显增加,估值会有所提高,这些股票的流动性也将改善。   2、股指期货概念股将受益。可以从两个角度考虑,一是直接受益者,包括期货公司、券商乃至基金公司等,因股指期货推出将给他们带来新的业务发展机遇, 使其业务收入多元化,增加盈利;二是间接受益者,包括与交易有关的软件公司以及与之相关的软件商系统集成商等,因股指期货的推出后,将增加期货公司业务 量,对交易软件的需求也会提升,从而提高这些股票的盈利。   3、股指期货推出将使得市场投资策略多元化。比如可以利用股指期货进行套期保值,可以作为现货流动性管理的工具,还可以利用股指期货套利;这些策略的增加,同时也使得金融产品更加丰富,金融业将迎来全新的发展机遇。   4、但是,估值期货推出不影响股票的价值和市场的长期走势,不过短期可能有波动。从国外市场推出股指期货的运行情况来看,股指期货并没有改变各自股票 市场的长期走势,总体上继续维持股指期货推出之前的轨迹。不过,短期来看,考虑到市场层面的心理因素,将因蓝筹股的需求增加从而带来积极因素,从而较大影 响指数表现。   从以上分析,我们认为可以从以下几个方面把握股指期货推出后出现的机会:   1、期货类板块及相关股指期货概念股:股指期货推出将提升期货的成交量,期货类公司及提供交易分析的软件提供商直接受益,相关个股有中国中期 (000996 股吧,行情,资讯,主力买卖)、中大股份 (600704 股吧,行情,资讯,主力买卖)、恒生电子 (600570 股吧,行情,资讯,主力买卖)等。   2、券商板块:股指期货推出将使得大盘股成交量放大,利好券商的经纪类业务;另外,券商板块市值也较大,占沪深300指数的权重相应较大,可以关注大市值券商股,比如海通证券 (600837 股吧,行情,资讯,主力买卖)等龙头券商股。   3、占沪深300指数权重大的个股:沪深300指数编制采用派许加权综合价格指数进行计算,其中的自由流通比例是指总股本扣除公司创建者、高级管理 者、国有股、战略投资者、员工限制流通股、冻结股份等不能流通股票的股本比例。目前沪深300前十大权重股为:招商银行 (600036 股吧,行情,资讯,主力买卖)、交通银行 (601328 股吧,行情,资讯,主力买卖)、中国平安 (601318 股吧,行情,资讯,主力买卖)、民生银行 (600016 股吧,行情,资讯,主力买卖)、中信证券 (600030 股吧,行情,资讯,主力买卖)、兴业银行 (601166 股吧,行情,资讯,主力买卖)、浦发银行 (600000 股吧,行情,资讯,主力买卖)、中国神华 (601088 股吧,行情,资讯,主力买卖)、万科 (000002 股吧,行情,资讯,主力买卖)A、北京银行 (601169 股吧,行情,资讯,主力买卖)。这些个股因对沪深300指数影响较大,预计将获得市场更多关注。   4、对指数影响较大的板块和个股:这类板块直接影响大盘走势,在股指期货推出后将成为撬动大盘走势的支点,市值靠前的申万行业分类二级板块是银行、石 油、煤炭、保险、房地产。个股方面尤其注意高杠杆的中石油、工行、建行、中石化、中行等,因其市值巨大,其波动将显著影响上证指数,进而影响沪深300指 数的波动。   5、指数型基金:尤其关注50ETF基金。以及跟踪沪深300的指数基金,比如易方达沪深300等;另外还可关注有50%仓位跟踪沪深300指数的封闭基金--基金普丰 (184693 股吧,行情,资讯,主力买卖)。   结合以上分析,我们认为集多重受益于一身的个股最值得关注,比如证券类板块的海通证券等龙头券商,本身受益股指期货带来的经纪业务增加,同时又是沪深300样本权重股。   最后,股指期货若推出,将使得短期内蓝筹股波动较大,进而使得指数波动较大,进而使得我们前期判断大盘走势的逻辑出现较大的偏差,我们将密切关注。 (中信金通)

Monday, December 28, 2009

Fed Proposes Bank Deposits to Soak Up Money in System

WASHINGTON—The Federal Reserve on Monday proposed allowing banks to set up the equivalent of certificates of deposit at the central bank, a move to help the Fed mop up money pumped into the economy to prevent inflation from taking off later. Under the proposal, the Fed would offer "term deposits" that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy. The proposal comes as no surprise. Fed Chairman Ben Bernanke and other Fed officials have repeatedly said the creation of such deposits would be one of several tools the Fed could use to drain money from the economy when the time is right. Against that backdrop, the Fed said the proposal "has no implications for monetary policy decisions in the near term." With both the economy and the financial system on the mend, the Fed this year started to wind down and scale back some emergency lending programs. Many of those programs were set up during the height of the financial crisis in the fall of 2008 when some credit markets virtually shut down. Lending conditions have improved but still aren't back to normal. They continue to restrain the economic recovery. The Fed's balance sheet has ballooned to more than $2 trillion, reflecting the creation of lending programs intended to ease the financial crisis. That's more than double what it was before the crisis struck. The Fed will need to mop up that money or it could trigger inflation down the road. The Fed proposed that the interest rate paid on the term deposit be set through an auction mechanism. Banks wanting to hold a term deposit would bid in regularly scheduled competitive auctions. The banks would indicate both the interest rate at which they are willing to be paid and the amount of money they want to deposit into the account at that interest rate. Given that process, it's unclear now what the rates on the accounts would be. The Fed said it anticipated term deposits with "relatively short maturities" likely ranging between one and six months. It said deposit maturities wouldn't exceed one year, and no early withdrawals of money in the accounts would be allowed. The public, the banking industry and other interested parties will be given an opportunity to weigh in on the proposal. The plan could be revised before a final rule is adopted. Most economists don't believe the Fed will start raising its key bank lending rate, which also influences a range of consumer lending rates, until the middle of next year. The Fed at its meeting earlier this month kept rates at a record low and pledged to hold them there for an "extended period" to foster the recovery.

Late Holiday Shopping Puts Retailers Ahead

By ANN ZIMMERMAN And RACHEL DODES Retailers won the closely watched holiday skirmish with shoppers, who opened their wallets a little bit despite a still struggling economy, fewer discounts than last year and limited variety on store shelves, according to newly released data. A late boost from procrastinating consumers and an extra day of shopping between Thanksgiving and Christmas increased total retail sales, excluding automobiles and gas, 3.6% over the year-earlier period through Christmas Eve, according to MasterCard Inc.'s SpendingPulse unit. Still, excluding the extra shopping day, the sales increase would have been closer to 1%, MasterCard said. While some retail sectors fared better than others, overall "I'd call it a good season because the profits will be good," said Maggie Gilliam, president of Gilliam & Co., an independent retail research and advisory firm in New York. Retailers are increasingly confident that the shopping season this year performed substantially better than last year's, when consumer appetites for anything but essentials were minimal and stores cut their prices to the bone to try to lure customers. Despite these efforts, the 2008 holiday season was the worst in decades. This year, store owners believe they navigated the tough economic terrain better by discounting a few items and offering other promotions, but keeping prices relatively steady for much of their inventory. This set up a game of chicken, with consumers hoping for signs of panic among retailers that would prompt last-minute price drops and retail executives betting that signs of a possible economic recovery would cause customers to finally give in and shop. "From August through November, we saw sales of nonfood items rise in the mid-to-high single digits," said Richard Galanti, chief financial officer at Costco Wholesale Corp. "We saw a heck of a lot of sales in December, too. Even sales of discretionary items picked up, but remember that was against weakness a year ago." The holiday retail sales results were in line with industry forecasts, which had ranged from a 1% drop to a 2.6% increase. But the last week of the month is expected to provide an added boost, as shoppers head to malls for after-Christmas sales and to redeem gift cards that are projected to have been sold in higher numbers this year. In Manhattan, Saks Fifth Avenue was mobbed Saturday morning with shoppers eager to partake in the 70% off sale on designer clothing that lasted until noon. Bradley Schleyer, a 34-year-old Manhattan resident in the manufacturing business, picked up a Ralph Lauren fleece vest for $150 and a Robert Graham button-down shirt for $60. "The deals are good, but the prices are still pretty high this year," Mr. Schleyer said. View Full Image Associated Press Early morning shopper Josie Yumul, left, takes advantage of a sale at Target in Colma, Calif., the day after Christmas. During the same period last year, overall retail sales fell 3.4% as the global financial crisis, the sharp decline in the stock market and a deep recession dragging into its second year chastened shoppers. This year, with shoppers worried about the highest unemployment rate in decades and hampered by restricted access to credit, retailers expected a pretty lackluster holiday and planned accordingly. "Last year was more of a free fall, while this year is more about stability," said Michael McNamara, vice president of research and analysis for MasterCard Advisors, in an interview Sunday. Nonetheless, this year's season got off to a slow start, with sales over the Thanksgiving weekend rising just 0.5%, according to the National Retail Federation. By last Sunday, only 70% of shoppers had finished their holiday shopping, compared with 80% a year ago, according to the International Council of Shopping Centers, a Washington-based trade group. But the group still expects sales to rise 1% for the season. Journal Communitydiscuss“ I thought sales would be down this year as a result of increased unemployment but America's lust for shopping never ceases to amaze me. ” —Michael Landskroner Several sectors showed gains, including electronics and jewelry sales, rising 5.9% and 5.6%, respectively. Overall apparel sales and sales at luxury emporiums were relatively flat, and department-store sales fell 2.3%, according to Mastercard SpendingPulse, whose data are based on sales activity in the MasterCard payments network and estimates for all other payment forms, including cash and checks. Lord & Taylor, a privately held department store with 46 stores mostly in the Northeast, is evidence that retailers must remain nimble. Its chief executive, Brendan Hoffman, said Lord & Taylor bet that sales would be up during the holidays, so it kept inventories stable instead of cutting back, sensing an opportunity to steal market share from competitors that might be out of stock on key items. Associated Press "Business was better than we feared it would be," Mr. Hoffman said, so raising inventory levels "paid off." Many of the big retailers are now expected to post sales ahead of their modest plans, particularly Macy's Inc., Costco., Target Corp. and Kohl's Corp., according to Charles Grom, a retail analyst at J.P. Morgan Chase & Co. "They all had a pretty good month," Mr. Grom said. None of the retailers would comment directly on December sales results, which will be released Jan. 7. With less merchandise to clear in the next few weeks, some stores are bringing in new winter apparel that they manufactured at lower costs so they can immediately mark the items down and not hurt margins, experts said. Stores such as J.C. Penney Co. are also stocking new spring merchandise for juniors to take advantage of gift-card redemptions. Sales of store-branded gift cards are expected to rise 1.9% this season, according to Mercator Advisory Group. As predicted, sales over the Internet notched relatively strong growth in the season, rising 15.5%., according to MasterCard. Although online sales tend to wind down by the weekend before Christmas as free-shipping offers expire, a snowstorm that walloped the East Coast from North Carolina to all points north the Saturday before Christmas meant that many shoppers had little choice but to turn to their computers to finish off their gift lists. Retailers continued to offer promotions on their Web sites through Christmas and beyond. Teresa Mannix tied together Best Buy Co.'s online and in-store discounts to snare a Dyson vacuum cleaner the day after Christmas at the company's Manassas, Va., store. She placed her order on the Web and then picked it up at the store, saving time and at least $100, she said. —Elizabeth Holmes contributed to this article. Write to Ann Zimmerman at and Rachel Dodes at

Sunday, December 27, 2009

Auto Suppliers Turn Around

By MATTHEW DOLAN And JEFF BENNETT Auto-parts suppliers are making a surprising turnaround, defying fears earlier in the year that many would collapse amid the car industry's downturn and the bankruptcy filings of General Motors Co. and Chrysler Group LLC. But quick restructurings, some through bankruptcy court, along with financial aid from the government and a brightening sales outlook for 2010 now have many suppliers looking up. The stocks of TRW Automotive Holdings Corp., BorgWarner Inc., ArvinMeritor Inc. and Goodyear Tire & Rubber Co. still trade well below their 2007 levels, but the shares have soared since hitting lows back in March. Goodyear, which supplies tires as well as parts like windshield wipers, above, has seen its shares rise as parts makers expect a stronger 2010. On Tuesday, TRW, a maker of brake, steering and electronic components, said it has raised $400 million in new loans, an accomplishment in a sector that had been all but locked out of new borrowing for most of the year. Other suppliers on the mend include seat-maker Lear Corp., which reorganized in bankruptcy court. Its new stock started trading at $50.50 in November but is now near $70. Dana Holding Corp., a maker of axles and drive shafts, slashed costs and is paying down debt, sold a piece of its business to a Mexican parts supplier and now expects a significant increase in earnings in 2010. Its stock fell to 19 cents in March but is now trading over $10.40. American Axle & Manufacturing Holdings Inc. has renegotiated its credit payments, booked new business and says it can now turn a profit even if 2010 U.S. auto sales only reach 11 million cars and trucks, which would still be a depressed level by historical standards. American Axle's stock is now hovering above $7.50, up from just 29 cents back in March. "The recession forced all parts suppliers to make their cost structures very lean and now they are potentially positioned for explosive earnings growth as vehicle production gets back to normal," said Morningstar Inc. auto analyst Dave Whiston. Earlier this year, many feared than the interdependent network of dozens of large suppliers supported by hundreds of small parts makers would struggle to stay in business as auto makers slashed production. Both GM and Chrysler shut down all of their North American plants for extended periods as part of their Chapter 11 reorganizations. Some suppliers are still hurting. Visteon Corp., for example, is still restructuring under Chapter 11 protection. But widespread disaster across the industry was averted when government cash infusions and payment guarantees for GM and Chrysler kept the most important suppliers afloat. Restructuring consultancy Grant Thornton International Ltd., for example, predicted in March that without a managed bankruptcy process, some 500 suppliers were at high risk of going out of business because of the cascading effect of reduced volumes and uncertainty around government support. Indeed this year, 14 of the top 150 auto-parts suppliers declared bankruptcy. More than 40 smaller parts makers sought similar restructuring protection and dozens of others quietly shuttered their doors permanently, according to an industry group's tally. Before filing for bankruptcy, GM made critical payments to suppliers early, which also helped cash-strapped companies avoid trouble. Suppliers even weathered the summer when GM and Chrysler temporarily shut down factories for up to three months to draw down their swollen inventories. Without the factories running, suppliers had no income. The government's cash-for-clunkers rebate program had the opposite effect, taxing suppliers to ramp up production quickly while it was still difficult to access the necessary capital because of tight credit markets. This fall GM said it began paying direct materials suppliers weekly instead of monthly in an effort to help struggling suppliers' cash flow and keep their doors open. GM also said it would let suppliers keep a larger share of savings generated from approved cost reductions. It's gone so well that GM is returning $140 million of the $290 million GM was loaned from the government's supplier bailout package. At its peak, GM's support program involved 375 suppliers, but only about 70 are now still enrolled. Many companies are finding that managing the upturn could be more difficult than weathering the downturn. With auto makers looking to ramp up production, many suppliers are finding it challenging to secure the necessary raw materials and the crucial working capital required to restart production. Still, even with the financial strides, the supplier sector faces a challenging 2010 and its health continues to worry the Obama Administration as well as the leading auto makers. Many suppliers will continue to see cash outflows in 2010 as a result of increases in working capital requirements to meet higher production demand, according to Fitch Ratings. Auto makers, which are continuing to shrink their supply base, are trying to pick the companies offering the best products and then rewarding them with more business. Ford Motor Co., for example, is aiming to reduce the number of suppliers it uses to 1,650 this year from 2,198 in 2008. The small private parts makers will take the biggest hit as the larger, healthier players begin buying assets to improve their product portfolio. "We have seen restructuring on the larger players but it's the smaller players where real focus will be in 2010," CSM Worldwide auto analyst Jim Gillette said. "There is still a huge amount of unneeded capacity."


[赵承]说得太好了。经济发展最终是为了改善民生。我们的一揽子计划民生是重点,临近年终,也想请总理解释一下一揽子计划在民生方面我们采取的政策以及带来的实惠,在新的一年里,改善民生还有什么新的计划?[12-27 15:37]   [温家宝]你说得非常对。我们经济发展最终的目的都是为了不断提高人们日益增长的物质文化需求,也就是说为了改善民生。如果说涉及改善民生,在整个应 对金融危机当中,我们始终把它摆在重要位置。在财政非常困难的情况下,我们提高了退休职工的待遇和低保的水平。[12-27 15:38]   [温家宝]这里我只想说,今年我们做了两件大事。第一件事就是推进医药卫生体制改革。医药卫生体制改革现在可以很清晰地划 分为五个环节。一是新农合。二是在城市职工和居民中广泛地实行医疗保险。这两项工作涉及到每一个人。我可以告诉你,现在参加新农合的已经超过8亿人,城镇 职工和居民参加医疗保险的已经超过4亿人,两项加在一起已经超过12亿人。当然,我也应该客观地说,我们现在的保障水平还比较低。[12-27 15:39]   [温家宝]三是加强基层医疗卫生机构建设,城市社区、农村乡镇以及村卫生医疗单位的基础设施建设,我们投入了大量的资金。四是推进基本药物制度。全国 大约400多组,其目的就是改变以药养医的状况,解决群众看病贵的问题,这项工作还在进行当中。[12-27 15:43]   [温家宝]五是推进公立医院改革试点。我们为了医药卫生体制改革,三年筹备了8500亿元资金支持。这项涉及全国人民健康的大事,我们一定要克服种种困难,切实把它办好。[12-27 15:43]   [温家宝]我把话再说回来,我们今年开始试行农民的养老保险,也就是说通过两条渠道,一条就是国家财政,另外一条就是农民自筹。从今年开始,从试点单 位开始,年满60岁的农民,每月可以拿到55块钱。这个钱并不多,但它跨越了一个时代。我仅举这两个例子来说明我们把民生放在重要的位置。[12-27 15:45]   [赵承]您刚才讲的关于我们农村的很多政策都是历史性的转变,刚才你谈到农民,现在还有一个农民工的问题想向总理问一下。总理您接受新华社专访的消息,今天上午十点就在新华网和中国政府网上公布了。[12-27 15:46]   [温家宝]是吗?[12-27 15:47]   [温家宝]第二件事情就是从今年开始,我们在农村试行农民的养老保险试点。今年的试点规模大约是10%,但是实际上已经超过这个数字。这项工作实际上 是把公共的财政资源向农村倾斜。大家知道,这些年来,农民为我们国家作出了很大的贡献,甚至作出了许多牺牲。如果说你现在看工人的组成,大部分是农民来 的。我们连续6年粮食取得丰收,是农民的贡献。我们完全减免了农村的各项税务负担,结束了几千年农民种田上税的历史。中央财政每年要花1200亿,减轻农 民负担大约1600亿。与此同时,我们实行对农民种粮的各种补贴,几项最主要的补贴,合计每年中央和地方财政支出也是1200亿。也就是说农民从过去要缴 纳税费1200亿,到现在国家要给他们补贴1200亿,这不是一个简单的数字计算,而是质的变化。[12-27 15:47]

Tuesday, December 22, 2009

China Telecom to Offer BlackBerry on Mainland in Bid to Gain Ground


HONG KONG—China Telecom Corp. became the second Chinese mobile operator to sign a deal with Canada-based Research In Motion Ltd. to offer BlackBerry devices on the mainland, in a move that could help the telecom company gain competitiveness in the third-generation wireless market.

The company joins China Mobile Ltd. in offering BlackBerry devices. The agreement also could help China Telecom gain ground against China Unicom (Hong Kong) Ltd., which offers Apple Inc.'s iPhones.

China Telecom spokesman Jacky Yung said Monday the company is working out the practical arrangements with RIM. It doesn't have a timetable yet for when it will start offering the BlackBerry devices. He also said the company is still in talks with Palm Inc. to offer Palm's handsets on the mainland.

China Telecom, China's largest fixed-line operator by subscribers, acquired China Unicom's code division multiple access business in October 2008 as part of a government-mandated restructuring of the country's telecommunications sector.

China Telecom has been striving to improve the operation with better network coverage and more handset models for consumers.

China Telecom hopes the BlackBerry handsets will give it an edge to attract an elite customer base in Chinese cities.

Since 2006, RIM has offered BlackBerry devices to big businesses in China through China Mobile, the world's top telecom operator by subscribers.

Earlier this month, RIM said it will offer BlackBerry handsets to individual users and small businesses in China through China Mobile. RIM also plans to introduce a BlackBerry handset running on a Chinese-developed mobile-phone technology called time division synchronous code division multiple access.

Analysts said the news is positive for China Telecom because more handset choices will help it add mobile users. However, the move may not significantly boost the company's earnings in the near term, they said.

Bonds Are Signaling a Stronger Recovery

By EMILY BARRETT and JOANNA SLATER A closely watched bond-market measure of investor optimism hit a record Monday, amid signs the U.S. economy's recovery is strengthening. That measure is the yield curve -- the difference between short-term and long-term interest rates on government bonds. That number is at its highest level ever, surpassing the record set in June, and signals that investors are expecting a stronger economic turnaround ahead. The milestone comes amid a broad sell-off in government bonds, as investors shift money into riskier assets like stocks in anticipation of stronger growth. Last year, investors dumped stocks and sought the safety of government bonds amid the financial panic. That drove up the prices of government debt, and thus drove down the yields on some to record lows. That trend has reversed. On Monday, stocks jumped on positive words from Wall Street analysts and news of acquisitions in the mining and health-care sectors. The Dow Jones Industrial Average rose 85.25 points to 10414.14, putting it in positive territory for the month. The Dow's strongest component was Alcoa, the aluminum maker whose business is closely tied to the economic cycle, which rose 7.9%. Low trading volumes at the end of the year may also be exaggerating market movements. The interest-rate development is good news for banks, which normally borrow at short-term rates and lend at long-term rates. The bigger the difference, all else being equal, the bigger their profit. Higher profits mean banks can refill their coffers, which have been drained by bad debts, and return to health. The yield curve steepens when the Federal Reserve, which controls short-term interest rates, keeps them low to spur the economy. But at the same time investors, expecting growth to resume and with it the possibility of inflation, sell longer-term government bonds, which sends their prices down and their yields up. The difference between the yields, in this case on 2-year and 10-year notes, is the main gauge of the yield curve. On Monday, the difference reached 2.81 percentage points. The gap between short- and long-term yields tends to stretch on the way out of economic trouble. Before this year, the yield curve was last near these levels in 1992 and 2003. In both instances, the economy was pulling out of a recession, and staged a sustained recovery. However, on both occasions it took a year or more before the Federal Reserve decided the economy was strong enough to warrant interest rate increases. The gap could widen further, said Tony Crescenzi, a portfolio manager at Pacific Investment Management Co. in Newport Beach, Calif. The previous peaks "didn't occur until the expansion was gaining some steam, and we don't know yet that's the case," Mr. Crescenzi said. The steeper yield curve is being driven by investors selling off government bonds. The 10-year Treasury tumbled Monday, sending its yield up to 3.686%, the highest since mid August. The yield on the 2-year Treasury rose to 0.872%. The widening gap stems from a bout of optimism about the U.S. economy, combined with a sense that the Federal Reserve is still months away from raising borrowing costs. The gap is great news for banks, because they can borrow for the short term at low rates and then lend at higher long-term rates. In the 1990s, a steep yield curve helped pull the U.S. banking industry out of a catastrophic crisis, making it much easier for financial institutions to borrow money at a lower rate, lend it at a higher rate, and put the difference in their pockets. By the end of the decade, earnings growth, fueled by the favorable gap in interest rates and strong consumer spending, had risen to as much as 20% a year. A rash of better-than-expected economic data in recent weeks has pushed investors to expect better growth. That could lead to inflation, which could eat away at the value of government bonds, making them less attractive. Meanwhile, the Fed has said it intends to maintain its benchmark interest rate near zero for an extended time, which helps keep a lid on yields of shorter-term government securities. "The Fed isn't going anywhere, at least for now," said Dan Greenhaus, chief economist at Miller Tabak & Co. As a result. At this time last year, the gap was 1.27 percentage points. At the crisis onset, in June 2007, the yield curve was inverted: a phenomenon in which short-term yields are higher than long-term ones, a development which often augurs a recession. Write to Emily Barrett at and Joanna Slater at

Existing-Home Sales Rise 7.4%

--previously owned home sale in Nov: 7.4% increase against 3.3% exp, 6.54 mil vs 6.09 mil in Oct --inventory 3.52 mil in Nov, 6.5 month vs 7 months in Oct --avg price 172,000 By JEFF BATER, LUCA DI LEO and MEENA THIRUVENGADAM WASHINGTON -- Sales of previously owned homes rose in November more than expected as low prices and tax relief helped buyers surmount worries about the job market. Separately, the government said U.S. economic recovery wasn't as strong as earlier thought, and revised its third-quarter numbers down for the second time to show lower construction and inventory investments. Related Home resales rose by 7.4% to a 6.54 million annual rate from 6.09 million in October, the National Association of Realtors said Tuesday. Inventories kept shrinking. Prices fell -- but the decline was the smallest in two years. Economists surveyed by Dow Jones Newswires expected a 3.3% increase in sales during November, to a rate of 6.30 million. While credit conditions remain difficult and joblessness in the U.S. sits at 10%, historically low prices and borrowing costs are supporting purchases. The economy is recovering from recession, and first-time buyers can get an $8,000 tax incentive. "This clearly is a rush of first-time buyers not wanting to miss out on the tax credit," NAR economist Lawrence Yun said. Going forward, the realtors expect a temporary sales drop, with a sales surge in the spring. The report Tuesday was another positive for the housing market, recovering from a big bust. Year over year, resales were 44.1% higher last month than the level in November 2008. October existing-home sales rose a revised 9.9%; originally, NAR said sales surged 10.1%. The average 30-year mortgage rate was 4.88% in November, down from 4.95% in October, Freddie Mac data showed. The NAR reported the median price for an existing home last month was $172,600, down 4.3% from $180,300 in November 2008. The decline was the smallest since a 4.1% drop in November 2007. Inventories of previously owned homes decreased by 1.3% at the end of November to 3.52 million available for sale. That represented a 6.5-month supply at the current sales pace, compared to 7.0 in October; the 6.5 was the lowest in nearly three years. Regionally, sales in November compared to October rose 6.6% in the Northeast, 8.4% in the Midwest, 4.8% in the South, and 10.6% in the West. Of the 6.54 million in overall U.S. resales, 33% were distressed, which includes foreclosures. That compares to a range of 45% to 50% in months during late 2008 and early 2009.

Greece’s Credit Rating Cut to A2 by Moody’s on Debt

By Anna Rascouet Dec. 22 (Bloomberg) -- Greece had its credit rating cut one step to A2 by Moody’s Investors Service, sparking a rally in its bonds as concern eased that a steeper downgrade would make its debt ineligible as collateral at the European Central Bank. “There is some relief that it’s only one notch,” said Peter Chatwell, London-based fixed-income strategist at Calyon, Credit Agricole SA’s investment-banking arm. Moody’s “talks quite positively about Greece’s liquidity situation.” The downgrade puts Greece’s rating five steps above non- investment grade and two higher than the levels assigned to it by Standard & Poor’s and Fitch Ratings. The ranking is the lowest among the 16 euro-member states and the same as that of Poland and Botswana. Moody’s said in a statement today the new rating carries a “negative” outlook, meaning it’s more inclined to cut it again than leave it unchanged or raise it. “Greece is extremely unlikely to face short-term liquidity or refinancing problems unless the ECB decides to take the unusual step of making the sovereign debt of a member state ineligible as collateral for bank repurchase operations,” Arnaud Mares, a senior vice president at Moody’s in London, said in the statement. It’s a “risk that we consider very remote.” Greek stocks rose, with the benchmark ASE Index climbing as much as 3.5 percent. ‘Not Too Negative’ The yield on the Greek 10-year bond tumbled as much as 23 basis points, the most since Dec. 16, and was 22 basis points lower at 5.73 percent as of 11:00 a.m. in London, from 6 percent yesterday. The yield on the two-year note fell 10 basis points to 3.41 percent. “It could have been worse,” Holger Schmieding, European economist at Bank of America Merrill Lynch in London, wrote in a research note today. “Relative to many other things that have been said about Greece in the last few days, the comments from Moody’s are not too negative.” The difference in yield between the 10-year note and that of the German bund, Europe’s benchmark government security, narrowed 27 basis points to 250 basis points. It was 184 basis points at the start of this month. Credit-default swaps on Greek government debt dropped 7 basis points to 282, according to CMA DataVision prices. Budget Deficit Prime Minister George Papandreou’s government, which came to power in October promising higher spending and wages, is trying to persuade investors it can cut its deficit from 12.7 percent of gross domestic product to below the European Union’s 3 percent limit by 2013. The nation “remains focused” on reducing the deficit and will intensify efforts to bolster the economy, the Finance Ministry said in an e-mailed comment from Athens following the Moody’s announcement. “The government knows what it needs to do, but we’ll be looking very closely at implementation,” Sarah Carlson, the lead sovereign analyst on Greece at Moody’s, said in an interview from London. “Public acceptance of these measures is absolutely key to the success of stabilizing Greece’s situation over the long term.” Further cuts from Moody’s would cast doubt on the eligibility of Greek debt at the ECB’s money market operations. Moody’s is the only major ratings company grading Greece above BBB+ after cuts from Standard & Poor’s and Fitch Ratings earlier this month. A downgrade of two more notches would mean Greek bonds won’t be accepted by the ECB if it reverts to its pre- crisis collateral rules in a year’s time. Further Downgrade? The negative outlook “means that over the next 12 to 18 months, there is a more than 50 percent probability that we downgrade them again,” Carlson said. Goldman Sachs Group Inc. said Dec. 17 that the ECB should revise its collateral rules to end what it says is the Moody’s veto over Greek bond eligibility. The ECB currently accepts bonds rated BBB- as collateral after relaxing its rules in response to the financial crisis. Greek bonds will recover next year, according to Frankfurt- Trust, the investment-management unit of Germany’s BHF-Bank. “We are careful on Greece, we only have small positions,” said Ralf Ahrens, head of fixed-income portfolio management at Frankfurt Trust, which has about $20 billion in assets. “But we expect that these bonds will come back again and gain in the first quarter of next year. I can imagine that the spreads will tighten.” To contact the reporter on this story: Anna Rascouet in London at

Monday, December 21, 2009


中国铝业 (601600 股吧,行情,资讯,主力买卖)在近5个月的时间里遭到了机构大规模、有组织的抛弃,市场龙头地位被焦作万方 (000612 股吧,行情,资讯,主力买卖)取代   12月18日午后,有色集体跳水,中国铝业(601600.SH)由14.50元被一笔巨单直接砸到跌停价13.64元,显然,有大资金急不可耐的地择了清仓。   "虽然量不大,但这是我这半年做的最失败的一笔投资。"盘后,深圳一位私募基金投资总监陈先生对理财周报说,7月中国铝业初露狰狞之后,他轻仓杀入,作为中长期持有的战略品种布局。   "最后亏了15%出局,很郁闷。我当时还认定了它会是龙头呢。"   昔日铝霸王,今日冷宫中。中国铝业在近5个月的时间里遭到了机构大规模、有组织的抛弃。而在市场中,它的表现远远落后于焦作万方、南山铝业 (600219 股吧,行情,资讯,主力买卖)、中孚实业 (600595 股吧,行情,资讯,主力买卖)。中国铝业到底怎么了?   35家机构倾巢撤退中国铝业   中国铝业上市之初,显现出了难得的王者霸气,此后带领整个有色板块跌入股价的零头,这被广泛归之于有色金属价格的暴跌。由于铝行业大面积的产能过剩,期货价格一直滞后于铜、铅锌和锡等。   因而遭到机构的普遍抛售,但中铝 (601600 股吧,行情,资讯,主力买卖)抛售之烈。莫此为甚。   理财周报统计现实,近3个月来,共计16家国内券商对中国铝业作出了投资评级,评级为"中性"的11家,"增持"的5家,"买入"的为0家,其中下调评级的有4家,上调评级为0家。考虑到卖方报告的潜规则,这相当于没有一家券商推荐基金买入中国铝业。而在最新的各券商2010年度策略报告中,理财周报亦未发现一家券商将中国铝业列为2010年金股。   事实证明,基金们充分采纳了卖方分析师们的意见。根据中国中铝和各大基金公司2009年中报显示,截至6月30日,共计39家基金持有中国铝业,加之太平洋 (601099 股吧,行情,资讯,主力买卖)保险,投资机构累计持有中国铝业流通股3.78%股权。   而三季报显示,34家基金和太保全面撤出,仅剩下上证50交易型开放式指数证券投资基金、诺安平衡 (320001 股吧,行情,资讯,主力买卖)证券投资基金、嘉实沪深300 (160706 股吧,行情,资讯,主力买卖)指数证券投资基金、广发稳健 (270002 股吧,行情,资讯,主力买卖)增长开放式证券投资基金、德盛安心成长混合型证券投资基金等5家基金留守,仅持有1.61%流通股股权。三月之间累计抛售约8500万股。   "你看图形,毫无疑问,这一批筹码就是7.29大跌之前那一拨有色行情中,机构清仓大甩卖卖出来的。"上述私募陈先生说。彼时,中铝一改疲态,跃为有色龙头逼空突破20元,继而跌回原形,一直在12-15元间徘徊。   "后来我一看三季报股东结构,明白了原来这个龙头是基金出货拉出来的,后来有基金的朋友告诉我,有些基金之间在中铝问题上达成了共识:就是不看好。"   而同期,对其他重要铝业股如焦作万方、中孚实业等同业股身上,机构表现都更为稳健。在近5个月的行情中,焦作万方、南山铝业、中孚实业轮番取代了中国铝业的市场龙头地位。焦作万方的股价创出新高;中孚实业的股价也调整有限。   机构为什么不看好中国铝业   机构到底为何不看好中国铝业?   "中国铝业的问题很多,不是一两句话说得清楚的,只是大家都心知肚明了,就懒得在报告中写了。"深圳一家券商分析人士说,   "最重要的问题就是,大家对他的成本控制完全没信心。尤其中报出炉券商都大跌眼镜,怎么还亏了35亿?它这笔亏损没法让人预期今年能扭亏,明年日子也不一定好过。"   银河证券一位分析师也表示,中国铝业在行业内的盈利能力和成本控制水平都不算好。数据显示,20009年三季报中铝以毛利率-1.21%、净利率-7.77%,在整个铝行业中位列倒数第二,焦作万方毛利率9.03%,净利率3.25%,产业链结构与中铝相似的南山铝业分别为13.67%和7.64%。   当时中国铝业的解释是:2季度复产投入一次性增加成本2亿元;2季度比1季度销量下降,减少毛利3亿元;期货收益比1季度减少了2亿元。   实际上,另有国家某矿产研究机构知情人士告诉理财周报记者,中铝开工成本增加2亿,并不算吃惊,以中铝旗下处境最艰难,一度全停的山东铝业为例,其一分厂氧化铝生产完全复产就需要6个亿,特种材料厂氧化铝生产线需要1.3亿,电解铝厂更不是个位数能解决。   另一位不愿透露姓名的分析师告诉记者,中国铝业作为大国企的负担太重了。"作为大国企,他是所有铝业上市公司中最听话的。"分析师形象地比喻到。今年由于金融危机影响,我国房地产、交通和汽车行业产量萎缩,导致铝产品需求量减少,国家要求各地铝厂停产,相对于其他企业的顽固抵抗,中国铝业却是积极响应,成为停产规模最大的铝企业。而留下的问题是,复产成本将是巨大的。   中铝的成本去了哪里   普遍认为中铝的第一成本压力在能源。   经测算,销售电价上调2.5分,电解铝行业平均生产成本将上涨350-380元/吨左右,即生产成本上升2-3%。而据介绍,国内电解铝上市公司中,中国铝业、焦作万方、中孚实业、神火股份 (000933 股吧,行情,资讯,主力买卖)和南山铝业,自备电厂比例都较高。中国铝业在这方面的优势事实上很大,其山东、包头、抚顺等分厂已经获取直购电3-9分钱优惠,在电价上调时所受到影响最低。   "实际上我认为根源在两个方面问题,一个是铝土矿资源先天问题,另一个是管理上包袱实在太重了。"上述矿产研究结构人士说。   "铝土矿矿石根据其所含的主要含铝矿物分为:三水铝石型、一水软铝石型和一水硬铝石型。国外主要是三水铝石型,我国则主要是一水硬铝石型铝土矿,三水铝石型铝土矿极少。国外的三水铝石型铝土矿具高铝、低硅、高铁的特点,矿石质量好,适合耗能低的拜耳法处理。我国铝土矿的一般特点是高铝、高硅、低铁(只有广西矿为高铁)。因含氧化硅较高,故铝硅比较低,多数在4至7之间,加工难度大,氧化铝冶炼多用耗能高的联合法。"他说,"这先天决定了中国大部分铝厂盈利能力缺陷,即便是提高自给率也不行。"   "同时,我去看中铝那些分厂,什么医药、宾馆、游泳馆、商场乱七八糟一堆,国家说收购这些包袱全过来了。"   在采访中,很多分析师都提到,中国铝业盘做的太大,给企业本身带来很多问题。一位分析师则表示,产量太大也可能成为劣势。由于代表行业的平均水平。所以势必也就不能代表尖端水平。他甚至打了个比方:"刘德华是歌坛天王,但是他现在的关注度可能不及周杰伦等新星。因为大家一般都比较关注新人。"   "对中铝,市场曾有诸多幻想,包括我在内,现在我认为该放弃了,不大动手术或者大动作,不会有太大投资价值。"上述矿产研究机构人士说。(理财周报 蒋卓颖)

Sunday, December 20, 2009

Citadel Broadcasting to File for Bankruptcy

By MIKE SPECTOR and SARAH MCBRIDE Citadel Broadcasting Corp., the third-largest radio broadcaster in the U.S., filed for bankruptcy in New York on Sunday. Citadel, which owns and operates 224 stations across the country, listed debt of more than $2.4 billion and assets of about $1.4 billion. As of Sunday morning, only Citadel's voluntary petition had been filed with the bankruptcy court. Citadel is expected to file a deal supported by lenders collectively owed $2 billion, known as a "prearranged" deal in bankruptcy parlance. These lenders plan to swap a big portion of their debt for equity in a reorganized Citadel, effectively handing them control. The deal would reduce Citadel's debt load to about $762.5 million, people familiar with the matter said. The company will need to solicit more creditor support in court to get its reorganization plan approved by a judge. Citadel's board approved the filing in recent days. A Citadel spokesman declined to comment. The filing is a blow to private-equity firm Forstmann Little & Co., which owns 28.7% of Citadel, according to the company's bankruptcy filing. A person familiar with the investment said the firm had invested $1.5 billion in Citadel but sold off a substantial portion of the stake over the years, leaving an exposure of about $250 million. Citadel Chief Executive Farid Suleman is likely to remain at the helm once the company emerges from Chapter 11 protection, the people familiar with the situation said. Mr. Suleman could not be reached for comment. Citadel's fall is emblematic of the troubles ravaging radio broadcasters, which took on loads of debt during boom times and now face a harsh advertising climate. Citadel loaded up on debt to finance its acquisition of Walt Disney Co.'s ABC Radio stations in 2006. At the time, radio was a $20 billion a year industry. But 2006 turned out to be a peak. Mr. Suleman has said he would have "sold, not bought" had he known where the economy was heading. Other radio companies face similar struggles. Clear Channel Communications Inc. took on more than $17 billion to go private last year and just refinanced some debt. Emmis Communications Corp. has had to get amendments on debt agreements twice this year and Regent Communications Inc. fell into technical default earlier this year after auditors questioned whether it could avoid bankruptcy. In recent months, Citadel hired law firm at Kirkland & Ellis LLP and investment bank Lazard Ltd. for restructuring advice. Write to Mike Spector at and Sarah McBride at

Saturday, December 19, 2009

Currency contortions

Dec 17th 2009 From The Economist print edition Tensions are likely to rise further over China's exchange rate Illustration by M. Morgenstern A COMMUNIST leadership always on full alert for violations of national sovereignty has lately grown shrill over calls by American and European policymakers to raise the value of the Chinese yuan, kept low by a heavily managed currency regime. Recently the prime minister, Wen Jiabao, presided over a grumpy summit between China and the European Union. There he berated his guests for their “unfair” pressure to revalue the yuan. The mantra of Mr Wen and other Chinese leaders is that the yuan ain’t nobody’s business but their own. This message cannot be immune forever to reason, and an almighty international ruckus over the Chinese currency looks likely in the coming months. A tiny economy may enjoy what Martin Wolf, a columnist at the Financial Times, calls “the liberty of insignificance”. But China is the world’s largest exporter, with $2.3 trillion of foreign-exchange reserves. The scale and consequences of its currency regime are alike unprecedented. A fast-growing economy with the world’s largest current-account surplus ought to see its currency rise. Instead, China’s is sinking because the yuan is in effect pegged to a falling dollar. The yuan has fallen by 14% against the euro over the past ten months. The real trade-weighted exchange rate is back to where it was in 2002, despite moves to revalue the currency in 2005. That is one reason the value of the yuan cannot be solely a domestic matter. Another has to do with “global rebalancing”. Simply put, American households need to repair their balance-sheets by paying down debt. That implies a rise in American saving, a fall in American consumption and an increase in exports, helped by a cheaper dollar. The best outcome for global growth would be for American belt-tightening to be matched by a rise in consumption in countries with current-account surpluses and savings to spare, China above all. Yet China’s exchange-rate policy shifts the adjustment onto others. China bridles at the criticism. Its officials say that though the yuan has fallen this year, it has risen against most other currencies except the Japanese yen since the start of 2008. Moreover, a year ago, China embarked on a huge fiscal stimulus. Its 4 trillion yuan ($586 billion) package has been a success. China is growing strongly whereas most rich countries are in recession. How dare others say it is not pulling its weight? The Chinese have a point. Their stimulus-induced boom has buoyed up the world economy and contributed to global rebalancing. Its huge external surplus has almost halved. But the worry is that the nature of the stimulus—focused on state-directed lending for investment—will perpetuate a lopsided economy. Especially if the stimulus encourages over-investment in sectors already burdened with too much capacity, current-account surpluses could surge once again in future. Some of these fears are probably exaggerated. China is enjoying a property and construction boom, which should boost consumption in future. But the hard truth is that China’s economy is still too dependent on investment and exports, a dependence that the stimulus has not changed. This will prove particularly problematic if America is really serious about raising its saving rate and reducing its appetite for Chinese goods. China needs to shift faster to a new economic model that emphasises consumers over producers, something often portrayed as a matter of unleashing the suppressed spending power of a high-saving population. Actually, as even a cursory trip through China would tell you, the country has been in the grip of a consumer boom for years, with car sales rising by over a third a year, and huge demand for travel, consumer goods and housing. Rebalancing, Jonathan Anderson of UBS argues, is not a matter of addressing household savings which, though high as a share of people’s income, is not abnormal as a share of the national cake (because incomes are a small share of the economy). Rather it is corporate saving that has seen a sharp rise. Corporate saving lies at the heart of China’s “excess” savings and the rise in the current-account surplus, from 2.8% of GDP in 2003 to 11% at its peak. The profits hoarded as a result, Mr Anderson argues, represent market share grabbed from foreign producers with the aid, this year, of a cheap currency. Rebalancing through a rise in the exchange rate would be one way to shift those savings back. The corporatist state As for what China’s leaders will now do, the signs don’t bode well. The leaders say a stable currency plus the stimulus are the anchors for President Hu Jintao’s trumpeted notions of a “harmonious society” and a “new socialist countryside”. That is, they create jobs. But not enough. Chinese growth is heavily skewed in favour of investment, not employment. Joblessness in large export sectors (consumer goods, electronics, and so on) does not seem to bother the leaders unduly. When exports collapsed a year ago, migrant workers in the factories melted back into the countryside. Indeed, if the leadership really cared about domestic demand, it would presumably not send quite so much of it abroad in the form of vast current-account surpluses. No, the leaders are in thrall not to the workers but to vested interests in state-run heavy industry and finance. In turn, the Communist Party guards its power by controlling the taps of a banking system that takes below-market-rate deposits from China’s households and passes them for next to nothing to the country’s corporate borrowers. This is no people’s republic. Whatever the economics of the currency regime, the politics of it are clear: the Communist Party is listening to the concerns of state-owned enterprises. And that is why Mr Wen and his colleagues not only decry debate about the exchange rate abroad. They also squelch debate at home.

The Great Stabilisation

Dec 17th 2009 From The Economist print edition The recession was less calamitous than many feared. Its aftermath will be more dangerous than many expect. IT HAS become known as the “Great Recession”, the year in which the global economy suffered its deepest slump since the second world war. But an equally apt name would be the “Great Stabilisation”. For 2009 was extraordinary not just for how output fell, but for how a catastrophe was averted. Twelve months ago, the panic sown by the bankruptcy of Lehman Brothers had pushed financial markets close to collapse. Global economic activity, from industrial production to foreign trade, was falling faster than in the early 1930s. This time, though, the decline was stemmed within months. Big emerging economies accelerated first and fastest. China’s output, which stalled but never fell, was growing by an annualised rate of some 17% in the second quarter. By mid-year the world’s big, rich economies (with the exception of Britain and Spain) had started to expand again. Only a few laggards, such as Latvia and Ireland, are now likely still to be in recession. There has been a lot of collateral damage. Average unemployment across the OECD is almost 9%. In America, where the recession began much earlier, the jobless rate has doubled to 10%. In some places years of progress in poverty reduction have been undone as the poorest have been hit by the double whammy of weak economies and still-high food prices. But thanks to the resilience of big, populous economies such as China, India and Indonesia, the emerging world overall fared no worse in this downturn than in the 1991 recession. For many people on the planet, the Great Recession was not all that great. That outcome was not inevitable. It was the result of the biggest, broadest and fastest government response in history. Teetering banks were wrapped in a multi-trillion-dollar cocoon of public cash and guarantees. Central banks slashed interest rates; the big ones dramatically expanded their balance-sheets. Governments worldwide embraced fiscal stimulus with gusto. This extraordinary activism helped to stem panic, prop up the financial system and counter the collapse in private demand. Despite claims to the contrary, the Great Recession could have been a Depression without it. Stable but frail So much for the good news. The bad news is that today’s stability, however welcome, is worryingly fragile, both because global demand is still dependent on government support and because public largesse has papered over old problems while creating new sources of volatility. Property prices are still falling in more places than they are rising, and, as this week’s nationalisation of Austria’s Hypo Group shows, banking stresses still persist. Apparent signs of success, such as American megabanks repaying public capital early (see article), make it easy to forget that the recovery still depends on government support. Strip out the temporary effects of firms’ restocking, and much of the rebound in global demand is thanks to the public purse, from the officially induced investment surge in China to stimulus-prompted spending in America. That is revving recovery in big emerging economies, while only staving off a relapse into recession in much of the rich world. This divergence will persist. Demand in the rich world will remain weak, especially in countries with over-indebted households and broken banking systems. For all the talk of deleveraging, American households’ debt, relative to their income, is only slightly below its peak and some 30% above its level a decade ago. British and Spanish households have adjusted even less, so the odds of prolonged weakness in private spending are even greater. And as their public-debt burden rises, rich-world governments will find it increasingly difficult to borrow still more to compensate. The contrast with better-run emerging economies will sharpen. Investors are already worried about Greece defaulting (see article), but other members of the euro zone are also at risk. Even Britain and America could face sharply higher borrowing costs. Big emerging economies face the opposite problem: the spectre of asset bubbles and other distortions as governments choose, or are forced, to keep financial conditions too loose for too long. China is a worry, thanks to the scale and composition of its stimulus. Liquidity is alarmingly abundant and the government’s refusal to allow the yuan to appreciate is hampering the economy’s shift towards consumption (see article). But loose monetary policy in the rich world makes it hard for emerging economies to tighten even if they want to, since that would suck in even more speculative foreign capital. Walking a fine line Whether the world economy moves smoothly from the Great Stabilisation to a sustainable recovery depends on how well these divergent challenges are met. Some of the remedies are obvious. A stronger yuan would accelerate the rebalancing of China’s economy while reducing the pressure on other emerging markets. Credible plans for medium-term fiscal cuts would reduce the risk of rising long-term interest rates in the rich world. But there are genuine trade-offs. Fiscal tightening now could kill the rich world’s recovery. And the monetary stance that makes sense for America’s domestic economy will add to the problems facing the emerging world. That is why policymakers face huge technical difficulties in getting the exit strategies right. Worse, they must do so against a darkening political backdrop. As Britain’s tax on bank bonuses shows, fiscal policy in the rich world risks being driven by rising public fury at bankers and bail-outs. In America the independence of the Federal Reserve is under threat from Congress. And the politics of high unemployment means trade spats are becoming a bigger risk, especially with China. Add all this up, and what do you get? Pessimists expect all kinds of shocks in 2010, from sovereign-debt crises (a Greek default?) to reckless protectionism (American tariffs against China’s “unfair” currency, say). More likely is a plethora of lesser problems, from sudden surges in bond yields (Britain before the election), to short-sighted fiscal decisions (a financial-transactions tax) to strikes over pay cuts (British Airways is a portent, see article). Small beer compared with the cataclysm of a year ago—but enough to temper the holiday cheer.

Friday, December 18, 2009

BlackBerry Sales Surge, but Palm Cools Off

Handset Makers on Divergent Paths With Research In Motion Posting 59% Jump in Profit and Rival Posting Another Loss By YUKARI IWATANI KANE And PHRED DVORAK Research In Motion Ltd. reported surging profits and sales of its BlackBerry devices while rival Palm Inc. posted another quarterly loss amid signs that consumer demand waned for its newest smart phones. The results showed the diverging paths of a market leader and an underdog in an increasingly competitive smart-phone market. Shares of the two companies moved in opposite directions in after-hours trading. RIM's shares jumped 12% to $71.21, while Palm's shares fell 8.7% to $10.70. In a positive sign for both companies, RIM and Palm shipped more phones than Wall Street had expected during the latest quarter, despite stiff competition from Apple Inc.'s iPhone and phones that run Google Inc.'s Android operating system. Overall, RIM said it shipped 10.1 million handsets for the quarter ended Nov. 28, more than the 9.6 million analysts expected. Palm shipped 783,000 smart phones in its quarter ended Nov. 27, higher than analysts' average expectation of about 700,000. RIM launched its Storm 2 device in October and Palm had started selling its Pixi phone last month. "The competition has clearly been overestimated," said Shaw Wu, an analyst with Kaufman Bros. "The big picture is that we're still at the early stages of smart-phone adoption... and it's premature to declare that there is only one winner." But Palm showed signs of weakness in sales of its Pixi as well as its flagship device, the Pre. The company said 573,000 phones actually sold through to consumers during the quarter, down 29% from the prior quarter ended in August and down 4% from a year earlier. RIM, based in Waterloo, Ontario, reported its profit climbed 59% to $628.4 million, or $1.10 a diluted share, for its fiscal third quarter from a year earlier. Its revenue rose 11% to $3.92 billion from a year ago. RIM Co-Chief Executive Jim Balsillie said some strength comes from sales overseas, where analysts say an increasingly mainstream set of consumers may be attracted to cheaper offerings like a newly released, low-cost version of the BlackBerry Curve. Some 80% of new subscribers were nonbusiness users. The results came the same day that some BlackBerry users in North America faced delays in receiving email on their devices. RIM later said technicians isolated and resolved the issue and it was investigating the cause. For Palm, the loss for its fiscal second quarter narrowed to $85.4 million from $506.2 million a year ago, when it took big tax charges. But its operating loss of 37 cents a share was wider than Wall Street's projection for a 32-cent-a-share loss. Palm's revenue also fell 59% to $78.1 million following a change in how the Sunnyvale, Calif., company accounts for smart-phone revenue over a two-year period instead of immediately. If revenue wasn't deferred, Palm would have posted revenue of $302 million. Palm's expenses rose 21% from a year ago as it spent more on marketing and sales. The company said it would continue to invest in marketing its products in coming months as it seeks to regain market share. ---- RIMM Devices--- Q3 During the quarter, RIM shipped approximately 10.1 million devices, including its 75 millionth BlackBerry smartphone. Approximately 4.4 million net new BlackBerry® subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was approximately 36 million. Q2 During the quarter, RIM shipped approximately 8.3 million devices. Approximately 3.8 million net new BlackBerry® subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was approximately 32 million. Q1 During the quarter, RIM shipped approximately 7.8 million devices. Approximately 3.8 million net new BlackBerry® subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was approximately 28.5 million. Q4 2008 RIM shipped approximately 7.8 million devices in the fourth quarter and approximately 26 million devices during fiscal 2009. Approximately 3.9 million net new BlackBerry® subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was approximately 25 million.

尚福林在财经年会上发表重要讲话 称诸多重要举措将出

  12月18日,财经年会《2010:预测与战略》在北京举行,中国证监会主席尚福林在会场表示,今后证监会将继续深化改革,持续加强监管,并为创业板建立转板和退出机制。将进一步推动新股发行制度改革,推动上市公司并购重组,促进产业整合和经济结构调整,推进证券创新。适时推出股指期货和融资融券,更好的服务经济社会发展。以下为尚福林在会上发言全文:   我们必须保持审慎和清醒的认识,把应急与谋远结合起来,增强工作的主动性和前瞻性。   国际金融危机传导路径、影响后果以及解决对策的分析和研究,深化了我们对资本市场发展和监管工作的深入。去年以来我们坚决贯彻党中央、国务院远近结合的原则,坚持加强市场基础性制度建设,深化市场改革创新,在维护市场总体稳定的同时实现了市场新的发展。   第一、新股发行制度改革平稳推进。   发行环节是整个资本市场形成的前端,如何顺应市场发展的要求,进一步理顺新股发行体制,一直是我们改革的一项重点工作。今年以来,按照分步实施,逐步完善的思路,新股发行制度改革有序实施,强化了市场内在的约束,推动发行人、投入者、承销商和保荐人等市场主体归位尽责,在此基础上新股发行工作平稳重启,截止到目前已经安排了66家新股发行,总体看新股发行制度改革达到了阶段性的目标。同时,我们也看到新股发行制度改革以后,市场对于发行价格的约束机制尚不健全。这次新股发行制度改革有一个非常大的变化,证监会不再对发行价格实行窗口指导,取消窗口指导之后的发行价格和以前的发行价格相比,发行价格在往上走。说明市场对于发行价格的约束机制还不健全,所以说改革还没有完成,我们还需要不断的培育和完善市场机制。   第二,创业板市场形成了良好的开局。   推出创业板是多层次资本市场体系建设和制度创新的一项基础工作,也是我国资本市场应对国际金融危机,服务经济发展的一项重要举措。经过长期的酝酿和精心准备,我们在创业板制度设计,发行审核,投资者适当性管理,市场监管等方面做出了一系列符合市场实际的制度安排。今年10月,创业板市场正式启动,首批28家创业板公司上市交易,目前尚有已发行待上市的公司14家,在审的企业现在有161家,创业板实现了一个良好的开端。但是,确实它也有一些问题。创业板的风险毕竟比主板市场风险要高,在此我也要重申,希望广大投资者能够审慎理性的参与创业板投资。   第三,公司债券市场发展取得了突破。   针对长期以来直接融资比重偏低,特别是股票融资与债券融资发展不平衡的格局,我们把债券市场发展放在了更加突出的位置。充分发挥公司债券在扩大融资中的作用,积极扩大债券融资规模,协调有关各方共同推动上市商业银行在上市交易所参与交易试点,截止到11月底,今年以来已经有34家公司发行公司债632.1亿元,同比增长了119%。   第四,期货市场功能日益深化。   大力发展期货市场对于支持实体经济管理风险,掌握重要的商品定价权具有重要的意义。今年以来,大力加强期货市场基础建设,实施期货市场统一开户制度,强化对期货公司的风险管理,陆续上市了螺纹钢、线材、早籼稻和聚乙烯四个品种,已上市期货品种累计达到21个,关系国计民生的大宗商品交易品种体系初步形成。   第五,行业规范发展态势基本形成。   今年以来深入开展了上市公司治理整改年活动,着力加强证券公司分类监管,规范证券投资基金评价业务,加强对基金投资管理人职业行为的管理,强化中介机构信托义务和受托责任,保持对老鼠仓、短线操纵、内幕交易等市场违法违规行为的高压态势。截止11月底,开展各类案件调查199起,做出行政处罚和市场进入决定64项。   截止到12月15日,在我国资本市场上上市公司的家数是1700家,总市值是24.25万亿元,流通市值是14.93万亿元,前三季度上市公司实现的总收入是8.43万亿元,相当于同期GDP的38.7%。前11个月,我国期货市场共成交18.83亿手,成交金额113.38万亿元,分别同比增长55.78%和72.57%。在宏观经济形势总体回升向好的背景下,我国股市在全球市场中率先回升,我们的市场在去年11月份开始触底回升,它和国家推出一揽子刺激经济发展的计划是同步的,这反映了大家对于国家经济政策的支持和信任度。世界市场中大部分市场是今年三月份开始回升。市场规模、容量以及市场活跃度、影响力等等都在稳步提升,市场功能得到发挥,经受了国际金融危机一次严峻考验。为了支持金融体系稳健运行,促进经济平稳较快发展做出了应有的贡献。   二、进一步拓展资本市场功能,服务经济平稳较快发展。   最近,刚刚闭幕的中央经济工作会议强调,做好明年经济工作,要保持宏观经济政策的连续性和稳定性,继续实施积极的财政政策和适度宽松的货币政策,根据新形势、新情况,着力提高政策的针对性和灵活性,努力实现经济平稳较快发展。作为经济体系和金融业的重要组成部分,资本市场的发展必须坚持服务和服从国民经济发展的全局,把服务实体经济、促进资本市场与实体经济相协调作为改革发展的出发点和立足点,进一步拓展市场的功能,着力推动经济发展方式转变和经济结构调整,促进国民经济平稳较快的发展。   第一,深化资本市场资源配置的功能,增强经济发展的内在动力,实现经济平稳较快发展需要引导社会资金参与投资。随着我国资本市场容量的扩张和运行质量的改善,企业利用资本市场健全机制,融入资本市场的意向都非常积极。广大投资者通过资本市场进行财富管理的意愿也在增强。充分发挥资本市场的资源配置功能,可以将社会储蓄转化为长期投资,促进资本形成、积聚和流转,有效引导民间资金流向政府鼓励的项目和符合国家产业政策的领域,这样有利于我国经济向依靠科技进步、劳动者速度提高和管理创新的发展模式转变,增强经济的动力与活力。   第二,强化资本市场促进并购重组的作用,促进经济结构调整和优化。这次中央经济工作会议对优化经济结构,提高经济发展质量和效率提出了新的、更高的要求。随着上市公司占国民经济比重的不断提高,上市公司并购重组日趋活跃,资本市场已经成为我国企业重组和产业整合的一个主要平台。要将支持促进符合条件的企业并购重组纳入资本市场服务宏观经济的组成部分,通过发挥并购重组市场机制和内在的约束作用,鼓励优质资产和优势项目向上市公司集中,促进淘汰落后产能,推动传统产业存量调整,引导产业有序转移。同时,带动资金、技术、人才等社会资源向优质企业集中,为促进产业升级和经济结构调整提供动力支持。   第三,发挥资本市场推动技术创新的优势,促进战略性新兴产业加速发展。这次国际金融危机深刻影响全球产业格局和经济社会发展的路径,传统制造业面临转型升级,发达经济体在危机应对中普遍重视新能源、新材料、节能环保、信息网络技术等新型产业的培育和发展,具有自主知识产权和创新能力的新兴产业正在成为引领全球经济的新的增长点。通过资本市场提供风险共担、利益共享的机制,有利于促进各类创新资源与资本市场的有效融合,形成创新型企业和创业投资、资本市场的良性互动。以创业板的推出为契机,资本市场将进一步加大对战略性新型产业的支持力度,鼓励各类创新资源与资本市场有效融合,推动建立和完善以企业为核心、以市场为导向、以资本为纽带,产学研相结合的创新体系,促进我国新型产业的形成和发展。   第四,拓宽资本市场优化资源配置的渠道,提高我国企业和经济的竞争力。国际金融危机不会改变经济全球化的大趋势。随着全球化生产要素在全球范围内的自主流动和配置,产业结构在全球范围内重新调整组合,金融体系和资本市场的发达程度,直接影响各国经济体的综合国力与核心竞争力。随着我国资本市场体系渐趋完善,市场化定价机制逐步形成,上市公司的市场价值逐渐成为并购、出资、合作、交易的基础,改变了以前以引进资产定价的交易方式,在引进来和走出去的过程中维护了我国企业正当权利。今年以来我国资本市场总体规模跃居全球第三位,境内市场影响力显著提高,不少境外公司希望在我国市场上市,为拓展我国企业的发展空间参与全球合作拓展了一个重要的平台。   三、深化改革创新引导和规范资本市场健康发展。   在这次国际金融危机中虽然国际经济金融体系遭受重创,但金融在市场经济中的核心地位并没有改变,资本市场在经济发展中的基础性作用没有改变。当前和今后一个时期,我们将继续加强和改善市场的基础建设,注重培育和发挥市场的机制作用,提升资本市场,服务国民经济的能力,针对市场出现的新情况、新问题,加大打击违法违规行为的力度,推动资本市场稳定健康发展。   第一,加强市场的基础建设,完善市场化运行机制,继续加强市场基础性制度建设,不断强化资本约束和价格约束,积极培育和发挥市场机制的作用,强化对上市公司、证券期货经营机构的常规监管和现场检查,建立健全跨市场监管的制度安排;加强信息披露监管,推动完善合规管理,提高市场的透明度;进一步加强法制建设,不断完善符合我国市场发展需要的法律法规体系。   第二,发挥市场的整体功能,增强服务经济发展的能力,要进一步推进新股发行制度改革,坚持循序渐进分步实施,逐步完善新股价格形成与承销配售机制,积极推动上市公司并购重组,支持优势企业利用并购重组做优做强,促进产业整合与经济结构调整;根据市场实际需要积极稳妥推进证券、期货品种创新,适时推出融资融券股指期货,不断拓展资本市场价格发现、资源配置、风险管理功能。处理好深化改革、提高效率与维护市场稳定的关系,更好的服务经济社会发展的全局。   第三,完善多层次市场体系,拓展发展的广度和深度。持续推进公司债券市场的建设,积极发展交易所债券市场,丰富债券品种,完善债券管理体制,进一步发挥公司债券在扩大直接融资中的作用。我国的债券市场应该说是我们资本市场发展当中的一个短腿,主要在资本市场发行和交易的还是股票,债券市场发育不够,我们要持续的推进公司债券市场的发展。要进一步加大对创业板市场的监管,处理好规范与发展、监管与服务的关系,使创业板真正成为创新型企业发展壮大的平台。要择机扩大待办股份转让系统试点范围,推进场外市场建设,理顺主板、创业板与场外市场的层次关系,建立健全转板与退市机制,形成相互补充、互相促进、协调发展的多层次市场体系。   第四,加强和改进市场监管,保护投资者合法权益,以落实投资者适当性管理制度为抓手,丰富投资者教育的渠道和方式,切实增强投资者的法制观念与风险意识,培育理性、审慎的投资文化,建立健全保护投资者合法权益的长效机制,完善对异常交易、尤其是并购重组中的内幕交易,短线操纵等新型违法违规行为的快速反应机制,依法严厉查处老鼠仓,利益输送等违法违规案件。   各位来宾,女士们,先生们,维护资本市场稳定运行,引导和规范资本市场健康发展是党中央、国务院做出的重要决策,是监管部门与市场主体共同肩负的责任。中国证监会将坚持以科学发展观为指导,继续深化改革,持续强化监管,破解重点难题,创新发展模式,保护投资者的合法权益,不断提高市场效率,增强市场竞争力,努力为转变经济发展方式,保持经济平稳较快发展做出更大的贡献。谢谢大家!

Thursday, December 17, 2009

The Case for Higher Real Rates

December 17, 2009 By Richard Berner & David Greenlaw | New York We think 10-year Treasury yields will jump to 5.5% by the end of 2010, driven primarily by a rise in real rates to 3% or more. That call is clearly inconsistent with the consensus view of modest growth and declining inflation, and it is light years away from the current level of real TIPS yields at 1.3%. Even those who agree with our somewhat upbeat view of sustainable growth and moderate inflation think that our rate call just does not jibe. We reiterate our rate forecast. Although we have outlined the factors behind our call over the past six months, investors are demanding and deserve more explanation. The purpose of this note is to elaborate on the framework and factors driving our call. In a nutshell, we think real rates are well below long-term norms. Over the next 12 months, unprecedented net saving shortfalls, a revival in investment, a less accommodative Fed, uncertainty about inflation and concerns about the sustainability of US fiscal policy will likely boost real rates significantly above those norms. Here we focus on the role of saving and investment. Long-term real risk-free rates tend to fluctuate around 3%. The framework for determining real rates varies with the time horizon, as different horizons change the emphasis on the factors involved. In the long run, and on average through the cycle, real rates should reflect returns on capital and potential real growth. Those who believe that returns on investment, productivity and potential growth have declined in recent years would argue that there should be a corresponding decline in real rates. We do not buy that story; productivity and potential growth are certainly lower than they were in the 1960s and in the late 1990s, but at about 2% and 2.5%, respectively, they are in line with the average of the last 60 years. Returns on capital declined as corporate overinvestment in the technology boom boosted capital-output ratios, and returns have declined cyclically in the recession. But to maintain profitability, Corporate America has slashed capital spending and boosted productivity; witness the 3.8% increase in labor productivity over the year ended in 3Q. Meanwhile, investors need compensation for taking on duration risk (e.g., the risk of holding a ten-year security as opposed to rolling over ten one-year instruments). Our colleague Jim Caron thinks that this ‘term premium' for risk in normal times should be at least half a percentage point or 50bp. Adding that to the 2.5% potential growth rate yields a 3% norm for real, risk-free yields. Thus, we think real, risk-free, long-term rates may fluctuate around that 3% norm, well above today's levels. But supply and demand can prevail in the short term. In the short-to-medium term, other factors can persistently drive real rates away from those long-term norms. In our view, the spectrum of real yields over a medium-term timeframe is determined by supplies of saving and demands for investment, or their financial counterparts, the supply and demand for credit. Of course, saving always equals investment ex post; the ex ante question is always at what price - what interest rate - will the market clear? Explaining today's rate levels is simple as pie. We find it easy to explain why real rates are exceptionally low despite record-low net national saving. First, the deepest recession since the Great Depression has clobbered investment across the board - in housing, corporate capital and inventories - and it is the excess of saving over investment that has driven rates down. In the corporate arena, the non-financial corporate financing gap (the difference between internally generated cash flows and corporate fixed and inventory investment) fell to a record low of -2.8% of non-financial corporate GDP in 3Q. Correspondingly, the demand for credit has plummeted to record lows. Second, on the supply side, the Fed designed its Large-Scale Asset Purchase programs (LSAPs) to take massive amounts of duration and convexity risk out of the fixed income markets. The LSAPs thus keep rates lower than they would otherwise be, inducing investors through portfolio balance effects to take on more risk. In our view, when investment rebounds, even modestly, the supply/demand balance driving real interest rates will change dramatically. Moreover, as the Fed ends the LSAPs early in 2010, duration and convexity will return to the fixed income markets, and portfolio balance effects will begin working in reverse to tighten the supply of credit. In the very short run, technical factors may be the primary catalyst for higher yields. For example, our colleague Jim Caron believes that sellers of high-strike interest rate insurance may have to sell bonds as rates go up - in a move akin to convexity hedging by mortgage investors and servicers (see 2010 Global Interest Rate Outlook: The World Is Uneven, November 30, 2009; and Asymmetric Risks Point To Higher Yields, Steeper Curve, December 10, 2009). Jim and team believe that those technical factors could push 10-year yields up quickly to 4.5%. In what follows, we present a review of the coming changes in saving-investment (im)balances that point to higher real yields. The end of quantitative easing and rising term premiums will further add to the pressure on yields. Slight rise in saving would still leave it close to record lows. Net national saving in relation to the size of the economy is a critical building block in our analysis. Fueled by rising wealth and easy credit, national saving has trended lower over the past 35 years - with the exception of the mid-1990s. Over the past year, while personal saving has risen significantly in response to the plunge in household net worth, ultra-aggressive fiscal stimulus and declines in national income relative to output took net national saving to a record-low -2.6% of GDP by 3Q09. Our analysis of the four sources of saving - personal, corporate, government and saving from abroad - indicates that net national saving will increase somewhat over the next year, but will only get back into positive territory in 2011. For the consumer, we believe that caution and modest wealth gains will push personal saving gradually higher. In our view, that will not result in consumer retrenchment; on the contrary, we think income will be growing rapidly enough to provide wherewithal for spending growth of roughly 2% in real terms, and to boost the saving rate by about a percentage point over the next year from 4.5% to 5.5% (representing about a US$120 billion increment to saving). That is consistent with employment gains of about 1%, a half-hour increase in the workweek, a rebound in property income (such as dividends), and further significant growth in unemployment insurance benefits, Cobra assistance and the second installment of the Making Work Pay tax credit. Corporate America will also contribute modestly to private saving, as stronger revenue gains will boost the top line and higher profit margins will boost the bottom line. In turn, companies are able to expand margins and exploit the operating leverage in their businesses because they have slashed capacity. For example, recent gains in production have lifted operating rates by some 250bp from their lows. We expect that much of the profit gain henceforth will be paid out in dividends rather than retained; dividends have plunged by a record 21% over the past two years. As a result, undistributed profits (the net corporate contribution to national saving) likely will decline as a share of GDP in 2010. Government dissaving is likely to decline somewhat through 2010, and inflows of saving from abroad probably will increase as the current account deficit widens. With regard to the US budget deficit, however, we would stress two points that represent a one-two punch for interest rates: First, Federal red ink will remain well above all past records for at least five years, and neither the Administration nor Congressional leaders have so far put forth any credible plan to reduce future deficits. Second, as discussed below, Treasury debt managers are making dramatic changes to the maturity of debt issuance, which will change the balance between supply and demand out the curve. We expect the Federal budget deficit to be about US$1.3 trillion in F2010 - a shade below the US$1.4 trillion gap seen in F2009. The slippage reflects a modest pick-up in tax revenue as the economy begins to grow and a pullback in outlays aimed at supporting the financial sector, which should more than offset an acceleration in stimulus spending tied to the American Recovery and Reinvestment Act that was enacted last February and other new measures (such as the expanded homebuyer tax credit and bonus depreciation changes). As a result, total government dissaving may decline slightly in the year ahead. But the real story in Treasury issuance is that the composition is shifting dramatically towards coupon securities as debt managers attempt to gradually boost the average maturity of the Treasury debt outstanding from its current level of about 4 years up to a range of 6-7 years. Gross coupon issuance - the best gauge of the supply burden confronting the market - likely will top US$2.5 trillion in the current fiscal year, up 40% from F2009. In fact, the increase in coupon issuance during the year ahead should be about equal to the amount of total issuance in a ‘normal' year (such as F2008). That step-up in supply, coming as the Fed concludes its Treasury buying program and as the Fed tapers its purchases of RMBS, constitutes a key source of uncertainty in our analysis. The overall data on government dissaving are not sufficient for us to gauge the impact on rates of large budget deficits and the Treasury issuance required to fund them. Inflows from global investors to increase again. Despite strong export gains, rising oil and other import prices likely will combine with rising imports and shrinking US surpluses on services and investment income to widen the nominal current account deficit. As represented by the GDP accounts, we estimate that the corresponding inflows from global investors will rise by about 0.6% of GDP to 4.2% over the four quarters of 2010, or by about US$110 billion. Yet that inflow won't likely come easily in today's context. Concerns about sovereign credit risk and fiscal sustainability imply that global investors will demand a concession to buy US debt. Although the US won't default on its debt, investors are always handicapping the risks of owning even the benchmarks for global sovereign credit. Ex ante, investment is poised to increase more than saving; higher rates required to clear market. At first blush, the increased saving that we expect may sound bullish for interest rates. What many fail to appreciate, however, is the extent to which investment outlays will rise over the course of the next year in spite of the rise in rates. Housing, of course, is credit-sensitive, but credit availability and collateral requirements are as important as interest rates. The fact that traditionally measured housing affordability has skyrocketed and yet housing is staging only a modest recovery from a record plunge speaks to the importance of credit availability. Our hunch is that improved availability in the coming year means that housing demand will improve even as rates rise. For Corporate America, there is a parallel story. Capital spending plunged in the recession to an unprecedented degree, and new investment is needed to rebuild capital stocks. The ‘accelerator' of rising output on a sustained basis and improved corporate cash flow will also drive capex higher. Moreover, empirical work suggests that corporate capital spending is relatively insensitive to changes in interest rates. Finally, we believe that companies will shift from a record 10 quarters of liquidation to accumulating inventories by year-end. Combined, this shift to sustainable growth in housing, business investment and inventories will result in a significant increase in private credit demand. The upshot is that the necessary balance between rising saving and rising net investment is unlikely to occur at today's interest rates. Finally, two other factors are expected to lift real interest rates. First is a repricing of the likely path for short-term interest rates. Currently, fed funds and eurodollar futures are pricing in a 90bp move up in rates by year-end 2010, and a cumulative move by year-end 2011 of about 200bp - less than what we expect through year-end 2010. As a result, we think the market has more repricing of the yield curve to do. Second, uncertainty over fiscal credibility and inflation will lift term premiums and likely add to the looming pressure on real yields.

Pimco’s Gross Boosts Cash to Most Since Lehman Failed (Update2)

By Wes Goodman and Garfield Reynolds Dec. 18 (Bloomberg) -- Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., cut holdings of government debt and boosted cash to the most since Lehman Brothers Holdings Inc. collapsed in September 2008. Gross increased cash in the $199.4 billion Total Return Fund’s to 7 percent in November from negative 7 percent in October, according to Pimco’s Web site. The fund can have a so- called negative position by using derivatives, futures or by shorting. The fund reduced government-related debt to 51 percent of assets from a five-year high of 63 percent in October. Mortgages fell to 12 percent, the lowest since Pimco’s figures started in 2000, from 16 percent. Under what Newport Beach, California-based Pimco has termed the “new normal,” investors should be prepared for lower-than- average historical returns with heightened government regulation, lower consumption, slower growth and a shrinking global role for the U.S. economy. Federal Reserve officials on Dec. 16 said the economy is strengthening and left the target rate for overnight loans between banks in a range of zero to 0.25 percent at the conclusion of its two-day policy meeting. The FOMC met after a week of reports suggesting economic growth picked up in the fourth quarter. Retail sales climbed 1.3 percent in November, twice as much as anticipated in a Bloomberg News survey of economists. Inventories rose in October for the first time since August 2008, and exports in the same month increased to the highest levels in 11 months. Growth, Jobs Gross said last month that the central bank is unlikely to raise interest rates until nominal gross domestic product increases 4 percent to 5 percent for another 12 months. GDP grew at a 2.8 percent annual pace in the third quarter, the Commerce Department said on Nov. 24. While the economy has returned to growth after the deepest recession since the 1930s, most economists surveyed by Bloomberg News predict the unemployment rate will exceed 10 percent through June. Consumer spending is still below its level of two years ago. The unemployment rate fell to 10 percent in November from a 26-year high of 10.2 percent the previous month, the Labor Department said on Dec. 4. The U.S. lost 11,000 jobs, compared with 125,000 jobs in a survey of economists by Bloomberg News. Mark Porterfield, a Pimco spokesman, has said the company doesn’t comment on fund holdings. 16 Percent Return Pimco’s government-related debt category can include conventional and inflation-linked Treasuries, agency debt, interest-rate derivatives and bank debt backed by the Federal Deposit Insurance Corp., according to Pimco’s Web site. Cash and equivalent securities may include commercial paper, short-term government and mortgage-backed securities, short- maturity company bonds and money market derivatives, according to the site. The Total Return Fund yielded 16 percent in the past year, beating 55 percent of its peers, according to data compiled by Bloomberg. The one-month return is 0.1 percent, outpacing 51 percent of its competitors. Pimco is a unit of Munich-based insurer Allianz SE. Derivatives are financial obligations whose value is derived from an underlying asset such as debt, stocks or commodities. Futures are agreements to buy or sell assets at a later specific price and date. Shorting is borrowing and selling an asset in anticipation of making a profit by buying it back after its price has fallen. To contact the reporter on this story: Wes Goodman in Singapore at