Monday, March 28, 2011

Personal Income and Outlays 03 2011

Stocks Shining as Bonds Lose Luster

Stocks Shining as Bonds Lose Luster

The U.S. stock market has powered back in the face of major global uncertainty. It may have bond investors to thank for that.

Money managers and advisers say there has been a steady undercurrent of cash heading out of bonds and into equities. While there remains unease about U.S. fiscal policy, with the Federal Reserve having pinned interest rates essentially at zero for so long, investors are capitulating and moving into stocks.

"We're in the early innings of a big asset allocation shift," says Jason DeSena Trennert, chief investment strategist at Strategas Research Partners.

That, some suggest, is what helped stocks rally last week despite spreading political turmoil in the Middle East, sustained higher oil prices, the ongoing nuclear crisis in Japan and looming problems for Portugal.

Analysts say investors, tired of earning nothing on their cash, are taking advantage of dips in the stock market to buy. Above, a trader works on the floor of the New York Stock Exchange last week.
"These kinds of events two years ago would have produced a significant de-risking" in which investors bail out of stocks, says Erin Browne, director of macro trading at Citigroup. "And we didn't see that."

Analysts say investors, tired of earning nothing on their cash, are taking advantage of dips in the stock market to buy. That sentiment has been largely missing since late 2008 amid the drubbing that was handed to many who tried to pick the bottom of that brutal bear market.

The recent inclination to buy the dips has been particularly strong among investors who missed the market's big rally since March 2009 because they were sitting in cash or gravitating toward bonds.

While the Dow Jones Industrial Average did decline in the first half of this month, losing 5% through March 16, it rallied back just as quickly and is now back where it started the month. On Friday, the Dow gained 50.03 points, or 0.4%, to close at 12220.59, its sixth gain in seven sessions.

After domestic stock funds registered outflows in the early part of March—to the tune of $5.6 billion, according to the Investment Company Institute—there is evidence that investors moved back into equity funds in recent days, according to global fund-flow tracker EPFR Global.

Driving this trend has been increased confidence that the U.S. economy, while still weak when it comes to housing and job growth, is well on its way to a self-sustaining recovery. And with the simple passage of time from the worst of the financial crisis in 2008, investors are less worried about protecting their money at all costs.

"You had a lot of people at the beginning of the year still not believers in the economy; I think more people are believers now," said Michael Strauss, chief economist and market strategist at Commonfund.

In one shift, some investors are less enthusiastic about the outlook for corporate and high-yield bonds than in the earlier stages of the recovery. The market value of the Barclays U.S. High Yield Index roughly doubled over the past 18 months to $968 billion, and few see similar gains ahead.
"The once-in-a-lifetime opportunity in credit is gone," said Leon Cooperman, chairman of hedge-fund manager Omega Advisors, at a conference sponsored by Strategas last week. And Treasurys "are screaming to be shorted," Mr. Cooperman added.

That leaves stocks. "At worst, stocks are the best house in a bad neighborhood," Mr. Cooperman said. If the U.S. can address its fiscal problems, "they could be the best house in a good neighborhood."

Making investors comfortable with stocks, even two years into a bull market, is that valuations aren't extreme by most measures. Stocks "are cheap relative to history, they're cheap relative to inflation and they're cheap relative to interest rates," Mr. Cooperman said.
Stocks are trading at a price equivalent to 13 times earnings, compared with the average of the past 10 years of about 17 times, according to FactSet.

A shift into stocks and out of bonds is exactly what the Federal Reserve had been hoping for when it started its second round of quantitative easing last year.

By pumping cash into the financial system, the Fed was aiming to force investors to move into riskier investments, such as stocks, that could eventually feed through into the broader economy.

"It's a desire of the Fed to push money out of shorter-term riskless instruments and into riskier things, like stocks," says G. Scott Clemons, chief investment strategist for Brown Brothers Harriman.

According to the ICI, the amount of money in money-market funds has come down steadily over the past four weeks, from $2.75 trillion at the beginning of March to $2.73 trillion last week. Much of that money is likely to be flowing into the equity markets, say those who watch fund flows.

After a 24% jump in the Dow between the end of August and mid-February, many investors were waiting for a pullback before jumping into stocks.

For some, that point came in mid-March and, in particular, on March 16, when the Dow fell by as much as 300 points amid fears of a nuclear meltdown in Japan. In the days since, the market has moved higher as investors bet the worst was over in Japan and the Middle East. They also figured those events would have relatively little impact on the U.S. economy.

As well, investors deemed the spike in oil prices a relatively minor drag on the economy.

"If you were worried about Japan or the Middle East or oil and sell stocks, what do you do with the proceeds?" Mr. Clemons says. "Put it in cash, where you earn nothing and are eroded by inflation? You could buy bonds, but yields are so low that the tradeoff of risk to yield isn't terribly attractive."
Write to Jonathan Cheng at and Tom Lauricella at

期指巨头针锋相对 市场气氛偏多

  期指巨头针锋相对 市场气氛偏多





  虽然量价关系(总持仓与行情走势)与前20席位净持仓变化所反映出的信息有所分歧,但加上单个席位持仓数据变化所反映出的信息,我们大致可以感觉得到市场氛围仍是偏向于多方的。再结合技术形态看,沪深300指数站在了20日均线之上,RSI指标也处于强势区,短期内价格继续惯性上冲的可能性非常大,但此时仍应保持谨慎,密切关注前期高点附近的阻力。 (期货日报 长江期货 周利)

Thursday, March 24, 2011

资金链倒逼房价 靴子或将落地

资金链倒逼房价 靴子或将落地




Wednesday, March 23, 2011

外资高速入楼市获得证实 地产"限外令"基本失效

外资高速入楼市获得证实 地产"限外令"基本失效

手机免费访问 2011年03月23日 14:22 中金在线/财经编辑部  查看评论   房地产私募基金悄然集结 千亿外资“伏击”国内楼市

  本报记者 林喆


  “走FDI途径、实行基金化运作,是外资进入国内地产项目的主要特点,而外资投资的项目绝大部分是商业地产。”阳光股份 (000608 股吧,行情,资讯,主力买卖)副总裁杨宁在接受中国证券报专访时表示。





  2007年4月,新加坡政府产业投资公司设立特殊目的公司(SPV)Reco Shine Pte Ltd,认购阳光股份非公开发行的1.2亿股股票,获得29.12%的持股比例,成为阳光股份的控股股东。随后,阳光股份与新加坡政府产业投资公司在土地开发和项目运营上开始“出双入对”。2008年以来,阳光股份共斥资逾30亿元相继收购家世界18个物业组成的资产包等项目,其相当一部分资金来源于新加坡政府投资公司。





















  中国证券报 林喆

Tuesday, March 22, 2011

Treasurys Losing Streak Hits Three

Treasurys Losing Streak Hits Three


NEW YORK—Treasurys prices dropped Monday for a third straight session as investors took heart from some encouraging pieces of news on the Japan nuclear crisis, and after the U.S. Treasury surprised the market with plans to start selling mortgage-backed securities.

Japanese authorities reported progress over the past 24 hours in containing the nuclear crisis, having made some progress in the twin goals of cooling reactors at the Fukushima Daiichi nuclear power plant and restoring electric power to internal cooling systems. The plant was damaged in the earthquake that hit the country 10 days ago and concerns about radiation leakage have roiled global financial markets over the last week.

The news helped encourage market participants to tiptoe back into riskier assets, such as stocks, and part with low-risk U.S. Treasury securities.

"The situation is slowly getting better" in Japan, said Adam Brown, managing director of U.S. government bond trading at Barclays Capital Inc. in New York, though developments in the country remain a primary focus for the market. "Right now, this market is being driven by geopolitical events," he said, "and first and foremost is Japan."

In afternoon trading, the price of the benchmark 10-year Treasury note was off by 16/32 to yield 3.326%; the two-year's price was down 3/32 for a yield of 0.637%. Yields move inversely to prices.

Treasurys prices were also under pressure after the Treasury Department's surprise announcement that it will start selling off the $142 billion portfolio of agency guaranteed mortgage-backed securities it purchased during the financial crisis.

"The market was not prepared for this," said Tom Tucci, head of government bond trading at RBC Capital Markets. The move means more intermediate government securities will come back into the market, which will weigh especially on Treasurys maturing in the next five to 10 years.

Mr. Tucci, however, said "people who are trying to make this sound like the beginning of a rate rise are out of their minds."

The Treasury said it will sell about $10 billion a month, depending on market conditions, and could wind down the program in about a year. The government acquired the securities—mostly 30-year, fixed-rate MBS guaranteed by either Fannie Mae or Freddie Mac—from October 2008 to December 2009 to help stabilize the mortgage market.

The Treasury is selling the securities now because the market has "notably improved," according to a department statement. A Treasury official said the program could net about $15 billion to $20 billion in profits for taxpayers.

There was heavy selling after the news as some market participants misunderstood the announcement as coming from the Federal Reserve and signaling a chance in monetary policy. When those investors realized that that wasn't the case, the market managed to recoup some ground into the afternoon.

The longer-term impact of the Treasury mortgage selling on the market is likely to be subdued, Mr. Brown said, given the small amounts.

Selling "is just not that big compared to the sizes and volumes that go through the Treasurys market," said Mr. Brown.

Meanwhile, investors were also tuned into news coming from the Middle East. Allied air strikes against Moammar Gadhafi's forces in Libya further escalated a conflict that has disrupted the country's oil exports for a month. Yet the establishment of a no-fly zone calmed market participants, at least for the time being.

The development was "seen as a decisive action, which encourages risk-taking," said Richard Gilhooly, a strategist at TD Securities in New York.

Write to Deborah Lynn Blumberg at

M2 Growth Becomes Less Indicative

1. Why did the central bank continue to raise RRR when M2 growth has fallen below its target?
M2 growth has been an important indicator for us to determine how severe the government’s tightening measures are.
However, M2 growth has been below expectations for two months and February’s figure was already below the 16% target
(and is not expected to rebound visibly in March), so will the government’s further RRR hikes lead to overtightning?

We think the significant slowdown in M2 growth rate cannot be explained by effective credit tightening alone. Meanwhile, the amount of the PBoC’s FX purchase remained large, as evidenced by the fact that January-February M2 growth was
significantly outsized by new loans and the PBoC’s FX purchases. If January-February M2 growth is measured by new loans and FX purchases, then February’s M2 growth should be 17.6%.

Our conclusion is that the sharp slowdown in M2 growth indicates that financial institutions’ other liabilities have
increased substantially, replacing M2 as the source of funding. Going deeper, this reflects the fast growth in direct
financing that led to disintermediation, through which some household and corporate deposits are converted to
interbank items that are not included in M2. The disintermediation process has accelerated this year, making M2
growth less indicative of market liquidity.
side, increases in interbank transactions (interbank lending and deposits) in January-February were of the second largest size, only after deposits. After being deducted by interbank transactions on the assets side, net liabilities from interbank
transactions increased Rmb440bn in January-February, more than half of the increase in deposits.

Disintermediation is the reason why banks have become more dependent on interbank transactions as a source of funding. With negative interest rate, households and enterprises are more willing to invest their funds in the form of wealth management products, funds, insurance, and stocks, through which some of their deposits are converted to interbank deposits (not included in M2).

As we can see from the balance sheet of financial institutions, on the liabilities
The central bank’s introduction of the concept of total financing means that it will not only look at M2 growth for
quantitative monetary controls, but also refer to market interest rates. The substantial pullback of repo rates
probably have been the main trigger of this RRR hike.
play a bigger role in guiding the government’s policy tightening, as market interest rates have a greater impact on direct
financing. Actually, the three RRR hikes this year all took place when repo rate pulled back (7-day repo rate dropped to 2.5% before the previous two hikes, and fell to 2% before this hike), indicating that the central bank’s final objective is to keep market interest rates at reasonable levels—neither too high or too low (may try to keep the 7-day repo rate at ~2.5-3%).
As the share of direct financing increases, market interest rates will

The People’s Bank of China announced it will raise the required reserve ratio by 0.5ppt starting from March 25, the ninth RRR
hike since last year and the third this year. After this hike, the required reserve ratio will reach 20%, well above the peak of
17.5% in 2008.














Monday, March 21, 2011

More Volatility Awaits the Treasury Market

More Volatility Awaits the Treasury Market


Turmoil in Japan and the Middle East drove U.S. Treasury debt to its most volatile week in more than a month last week and traders are bracing for further big swings.

Prices are likely to be buffeted by competing forces: Japanese companies and insurers are likely to sell Treasurys as they bring yen home to finance repairs after the devastating earthquake. As the same time, worries that Japan's nuclear crisis could worsen, a well as turmoil in the Middle East, are driving other investors to buy Treasurys, seen as a haven.

A gauge of volatility in U.S. equity markets hit an eight-month high last week, while a similar measure in the Treasury market rose to the highest level since early February.

"Nothing is settled in Japan. Nothing is settled in the Middle East and potentially there are more problems in the euro zone," said Ray Remy, head of fixed-income trading in New York at Daiwa Capital Markets America Inc., one of the 20 primary dealers that trade directly with the Federal Reserve and are obligated to bid on Treasury bond auctions.

Despite a recent European Union agreement intended to address the euro-zone debt crisis, bond market participants fear trouble may flare up again at any time. Portugal's credit rating was downgraded by Moody's Investors Service last week.

Mr. Remy said support for Treasurys will also come from Japan in the near term. Dollars raised as Japan sold yen to drive down the currency are likely to be recycled into the Treasury market, he said. That could bolster demand for Treasury notes to be sold in the last week of this month, especially an auction of two-year debt, he said.

Friday, global stocks gained, while Treasurys and other haven investments fell in response to news that Libya had declared a cease-fire in its struggle against rebel groups, although fighting continued. At the same time, concerted intervention by major central banks to halt the yen's rise eased concern about the world economy.

Yet the problem of radiation from a damaged nuclear plant in Japan remained unresolved. International forces attacked Libya over the weekend, underscoring the uncertainty about the situation there. Yemen declared a state of emergency as the death toll from clashes between government forces and protesters continued to rise.

James Golden, head of Treasury trading in New York at primary dealer Jefferies & Co., expects the benchmark Treasury note's yield, which moves inversely to its price, will fall to near 3% in the next few weeks unless uncertainty about Japan, the Middle East and North Africa abates. The note's yield, which moves inversely to its price, traded at 3.277% Friday, down from the recent peak of 3.77% in early February.

But Toby Nangle, who helps oversee $51.6 billion as director of asset allocation at Baring Asset Management in London, said Treasury yields at the moment don't provide attractive value. He said that Japan's humanitarian and nuclear crisis may not have a big impact on the global economy, adding that the joint intervention by the Group of Seven industrialized nations to weaken the yen is likely to support the Japanese economy.

A stronger yen has dealt added pressure to Japan's economy by making its exports more expensive abroad. The intervention is expected to aid Japanese exporters and boost the country's recovery effort.

James Caron, global head of interest-rate strategy at primary dealer Morgan Stanley in New York, said that the 10-year note's yield hasn't fallen consistently below 3.25%, showing investors don't expect Japan's problems to affect economic growth and inflation expectations, which he said are still "pretty high."

"The market still prices in that we are going to pass Japan and Japan will fix itself," said Mr. Caron. "If anxiety is reduced, you are going to see a pretty big selloff in Treasurys. Fundamentals still support higher yields."

Some big fund managers such as Vanguard Group and Pacific Investment Management Co. are betting that Treasury bond prices will fall in coming months. By the end of February, Bill Gross, Pimco's founder and co-chief investment officer, had dumped all holdings of Treasury notes and bonds in the Total Return Fund, the world's biggest bond fund by assets.

"Once we pass the period of flight-to-quality flows, Treasury yields will rise," said Robert Auwaerter, head of the fixed-income group at Vanguard Group in Valley Forge , Pa. "We position for higher interest rates."

Mr. Auwaerter said the crisis in Japan is unlikely to undermine U.S. economic growth, adding that a rebuilding boom will emerge in Japan in coming months and Japanese investors will sell Treasurys to send funds home for the reconstruction effort.

Write to Min Zeng at

Markets Back in Lockstep as Risk Bets Return

Markets Back in Lockstep as Risk Bets Return

Just when markets seemed headed back to normal, the "risk on/risk off" trade has come roaring back.
Across financial markets, trading patterns more commonly seen in 2010 are returning. Stocks and the dollar are consistently moving in opposite directions, as are stocks and Treasury securities.

It is a trading pattern that was common for much of 2010 as investors swung in and out of markets en masse–buying "risk on" investments like stocks when they felt brave, and "risk off" assets such as Treasurys and the dollar when they wanted safety.
That pattern broke down earlier this year, in what some had seen as a return to normalcy. But the tensions in the Middle East and nuclear crisis in Japan have seen it return, frustrating investors who are seeking to trade on fundamental factors instead of headlines. The U.S. and coalition military strikes in Libya that began this weekend could become yet another flashpoint for worry.

"We are just plagued today with the lack of long-term trends, and it's because of people reacting to the issues of the day,"said Jim Sarni, managing principal at Los Angeles money manager Payden & Rygel. "You get long-term investors trying to anticipate what hedge funds are going to do—and not do— so they don't get caught on the train tracks."

Many investors think markets could be at risk of knee-jerk moves for the foreseeable future, a result of the increasingly volatile nature of global markets, and liquidity being pumped into markets by the Federal Reserve.

In a crisis, according to the market adage, all assets are correlated, meaning that ordinarily unrelated investments suddenly swing up and down as if they are connected, as investors shed risk and hunker down. The latest episode has been a case in point.

The U.S. dollar and stock market have increasingly moved in opposite directions, in an example of what analysts call a negative correlation. That link persisted for much of 2010, but had faded dramatically earlier this year, according to data compiled by Nomura Securities International.

Theoretically, the dollar and U.S. stocks shouldn't have much of a relationship. The value of the dollar affects corporate profits, but it doesn't typically have a big impact on the health of U.S. companies and the economy. But in the risk-on/risk-off era, the dollar has become a haven to which traders retreat when they are in risk-off mode.

"For the time being, at least, it looks like we are back to risk-on/risk-off," Nomura currency strategist Anish Abuwala said.

Similarly, a negative correlation between stocks and 10-year Treasury notes, which peaked last summer, has returned, according to data compiled by research firm Birinyi Associates Inc. That is a sign that investors are dumping stocks and buying Treasurys when they flip the risk-off switch. The negative correlation between stocks and Treasurys last week was its highest since last September, according to Birinyi.

In another sign of risk aversion, the average correlation of individual stocks to the broader Standard & Poor's 500-stock index last week rose to its highest level since December, according to Birinyi data. In February, that average correlation had dropped to its lowest level in four years, a period that extends well before the financial crisis.
Still, many correlations aren't as strong as they had been. And some market relationships have changed completely. Some are taking that as a sign that the return to risk on/risk off trading may be fleeting, and that fundamentals are still playing a role in investing decisions.

"Our belief is that we are still migrating away from the risk-on/risk-off mode," said Matt Toms, head of U.S. public fixed-income investments at ING Investment Management. "We think correlations will continue to decline."

Stocks and oil prices, for example, no longer move in lock step as they did for much of last year. Then, both were considered speculative plays that investors bought when feeling frisky and sold when gripped by anxiety.

Lately, the stock-oil relationship is on the rocks. Their correlation has turned slightly negative, according to Birinyi data, as investors have worried that higher oil prices could choke off the global economic recovery.
Gold and stocks were strongly correlated last year, too, but have almost no relationship this year, according to Birinyi data.

More broadly, risky assets have shown some resilience in the face of a barrage of downbeat news, potentially a sign that investors are finally able to look past the headlines. The Dow Jones Industrial Average, at its worst, fell only about 6% from its Feb. 18 high. Junk bonds suffered an even milder decline, losing just 1% in price during that time.

A return to fundamentals would be welcome news to many investors who have been frustrated by the unpredictable and seemingly irrational nature of market moves in recent years.

One motivation for investors parking money in apparently safe bonds and dividend-paying large-cap stocks has been an aversion to being mowed down in riskier trades by hedge funds, proprietary trading desks and fast-trading computers using exotic algorithms.
The rise of exchange-traded funds, which buy and sell entire sectors or markets at a time, has tended to push correlations higher, making it harder to judge investments on old-fashioned criteria, such as whether they are expensive or cheap.
"Non-professional investors feel they don't get a fair shake, that they have no capability whatsoever to understand the forces that are really driving the market," said Dan Genter, chief executive and chief investment officer of RNC Genter Capital Management in Los Angeles. "The fact is, they're right."
Mr. Genter, like Mr. Toms, thinks fundamentals will gain power in financial markets, as the memories of recent crises fade. But both agree with the skeptics that over the longer haul, the trend is toward greater correlations and away from fundamentals.
Dramatic swings may also have been sharpened in recent years by the flood of money steadily being pumped into the market by the Federal Reserve. That easy cash almost forces investors to take big risks, although they recoil from them at the first sign of danger.
"The end of quantitative easing is going to be a pivotal event for the risk-on/risk-off mentality," said Clark Yingst, chief market analyst for brokerage firm Joseph Gunnar. "The whole thing has been facilitated by QE."
Write to Mark Gongloff at

Friday, March 18, 2011

Coal's Return to Fashion

Coal's Return to Fashion


Rumors of coal's demise increasingly look premature. The commodity has plenty of critics, concerned about its environmental impact. But even more-pressing safety concerns about nuclear power, after Japan's earthquake, could lead countries to raise coal usage to make up for energy shortfalls. Meanwhile, U.S. regulators this week gave coal-fired power plants some breathing space. With thermal coal supply already constrained, that should lead to higher prices—and extra profits for producers.

The delicate balance in global coal markets means any demand shift can lead to significant price swings. Major coal-producing areas such as Australia, South Africa and Colombia were hit by severe weather in the first quarter, leading to supply constraints. Deutsche Bank already expects a market deficit this year, with total seaborne thermal exports at 805 million tons and import demand at 823 million tons.

The price effect may not be uniform. Japanese demand will soften near term as coal users face production outages: Tohoku Electric Power, Japan's second-largest thermal coal importer, this week suspended its coal imports because of damage to its generating plants. Spot prices for Australian coal, the source of 70% of Japanese imports, have fallen 4% this week to $123.50. But if the plants come back online coal usage could rise in the second half. Citi estimates demand for thermal coal in Japan could increase by 7 million tons this year overall.

.In Europe the shift could prove quicker: Previous expectations of declining coal demand are now rapidly being reversed. Germany's decision to suspend seven nuclear reactors is key: The lost electricity generating capacity will have to be made up in part from coal, adding around 3 million tons of European imports in 2011. Deutsche now forecasts European prices could rise to $145 per ton next year, from around $122 now.

Meanwhile, the U.S. Environmental Protection Agency appears to have softened its line on coal-fired power plants this week. The EPA wants a 91% reduction in mercury emissions from power plants, which had led some analysts to predict mass shutdowns of coal-fired stations unwilling to invest in the necessary filtration equipment. Credit Suisse, for example, forecast 60 gigawatts, or 18%, of capacity to close. But the EPA now estimates that figure at just under 10GW.

There are clouds to this rapid reassessment of coal's prospects. Natural gas could prove a cleaner, more popular replacement for nuclear power. Nuclear capacity shutdowns might prove shorter than expected. And governments may also seek to promote other energy sources like wind and solar more strongly, although these remain higher cost and less reliable than coal.

But major producers—such as Xstrata, Anglo American and Bumi Resources—could now have a powerful adjunct to the story of growing Indian and Chinese coal demand. A week is often said to be a long time in politics. For global coal markets, this last one may turn out to have been highly significant.

Write to Andrew Peaple at

The Story Behind the Yen's Record Surge

The Story Behind the Yen's Record Surge

A day after a heart-stopping rally drove the Japanese yen to one of its sharpest ascents in history, traders and bankers blamed a freak onslaught of forced buying by Japanese individual investors and hedge funds—a barrage that came at the exact time of day when the currency market is at its most vulnerable.
In what seemed like an echo of the "flash crash" in U.S. stocks last May, the Japanese yen moved 4.6% within minutes on Wednesday, a surge that drove the currency through a record that held for 16 years and wreaked havoc on trading portfolios around the world.
The move—which took the dollar from 80 yen to 76.32 shortly after 5 p.m. in New York—was one of yen's biggest in history. It snapped back almost as quickly, jumping above 79 by the time Asian markets were in full swing.
"It wasn't pretty," said Robert Sinche, global head of currency strategy at RBS Global Bank and Markets. "You had a period where there was a lot of forced buying of the yen and just nobody on the other side."
The biggest surprise was that the move occurred in one of the most actively traded corners of the world's financial markets. Trading between the dollar and the yen totals some $570 billion every day and such sharp moves are rare.
But a confluence of buying by Japanese individuals, who can make up as much as 30% of trading in the yen, and hedge funds, many of whom had been predicting the yen would fall after the devastating earthquake and tsunami, came at the least active time for the market, when many traders weren't at their desks.
Currency trading is often seen as a 24-hour affair, but every day, around 5 p.m. in New York, most of the electronic trading platforms shut down for 10 or 15 minutes. At that time, there is a changing of the guard between New York staff and Asia. Computer systems are reset. Those thin conditions also mean that currencies are vulnerable to fast swings.
The yen recovered in Asia, and traded in a fairly narrow band in the U.S. on Thursday, moving to around 78.87 late in the day but remained above its previous record.
A coordinated intervention in the world's currency markets as the G-7, in a very rare move, agrees to a concerted effort to drive down the yen. WSJ's Jake Lee and Hong Kong Bureau Chief Peter Stein discuss.
Still, many were surprised that the Bank of Japan stayed on the sidelines. Some predicted the bank might move after a meeting of Group of Seven officials late in the day on Thursday. Others speculated the central bank may never step in to calm the yen's ascent.
Policy makers typically avoid currency interventions, in part because they often fail to work over the long term. To succeed, they usually require a coordinated, global effort and broader policy changes. Central banks last acted together in 2000 to boost the euro. The Bank of Japan had limited success in its last effort to push down the yen in September 2010.
Throughout much of the day Wednesday, the yen was on the rise but failed to cross the 80 level. Just before 5 p.m., however, the Japanese currency suddenly broke through. At first it bounced off its all-time high of 79.75, but then a wave of yen buying, predominantly against the U.S. dollar but also against the Australian dollar, swept through the markets.
Integral Development, which operates electronic trading networks, saw a flood of yen buying out of Japan. Volumes were eight times normal, said Harpal Sandhu, president of Integral. Some 90% of the trades were for less than $100,000. Typically at that time of day, 40% of the trades are from individual investors, Mr. Sandhu said.
Associated Press
A candle chart displaying the conversion rates of the U.S. dollar against the Japanese yen is shown at a foreign exchange firm on Thursday.
"We think there were Japanese retail traders who were placing orders prior to going to work," Mr. Sandhu says.
Many of the trades appeared to have been stop-loss orders left in the market which would automatically buy yen as the currency hit certain levels. Others were unwinding so-called carry trades, which required them to buy yen and sell other currencies.
Conditions quickly deteriorated. Banks widened the gap between the prices where yen could be bought or sold to 50 or 100 so-called pips—tiny increments of currency prices. In normal trading, spreads are around 0.8 to one pip.
At Barclays Capital, the bank's electronic trading system went offline for its routine 15-minute reset at 5 p.m. Amid the heavy trading, the bank's risk management systems delayed the restart until 5:29 p.m.
At the same time, there was a surge of forced yen buying linked to derivatives, mainly options. The first wave kicked in as the old high was breached around 79.75 yen, again around 78 yen which was hit around 5:18 p.m. and then again near 77 yen, pierced just two minutes later. That burst of buying took the yen to its high of 76.32.
David Gary, New York-based head of foreign-exchange derivatives at Deutsche Bank AG, said many investors had bet against the yen using a special kind of option called a "knockout."
An option gives its buyer the right, but not the obligation, to exchange a currency at a predetermined price in the future. Banks hedge against the risk of having to pay out clients trading such options. So, when knockout levels, such as 78 yen, were hit, Deutsche Bank and other banks had to buy more yen.
When trading did get under way in Asia, however, big Japanese players, particularly corporations, jumped in to sell yen but they retreated as the Japanese central bank remained on the sidelines.
—Neil Shah
contributed to this article.
Write to Tom Lauricella at and Katie Martin at

Thursday, March 17, 2011

Yen Climbs to Record Against Dollar

Yen Climbs to Record Against Dollar

Traders Cite Deluge of Late-Day Buy Orders; Questions Swirl on Possibility of Central-Bank Intervention

The Japanese yen rocketed to an all-time high against the U.S. dollar on Wednesday but gave back some ground in Asian trading on Thursday, as markets were buffeted by worries about the nuclear crisis in Japan.
The dollar rose to 79.31 yen Thursday in Asian trading after a sudden plunge by three yen to a record low of 76.32 yen on Wednesday. The fall, which pushed the yen more than 5% lower than late Tuesday's close of 80.81 yen, came late in the New York session and before Asian markets opened, a time when activity and staffing on trading desks generally is at its thinnest in the 24-hour-a-day currency markets.

Meanwhile, the Bank of Japan said it would pump five trillion yen, or about $63 billion, into money markets for a fourth consecutive day, part of its efforts to stem the currency's rise, which makes Japanese products more expensive overseas.

The yen had been on the rise against the dollar for much of the day, a continuation of a recent trend driven by talk that Japanese companies and individuals were buying yen to bring money home after last week's earthquake and tsunami. However, the yen had stopped short of piercing its previous post-World War II high against the dollar at 79.75.
It stalled at about 80 yen in part because many traders had been expecting the Bank of Japan to step in at that level. For Japan, a rising yen could further damage an economy already crippled by the earthquake and tsunami.

But when the dam broke, traders said the move was fueled by a cascade of orders to automatically buy yen once certain levels were breached. Traders said these buy orders had been left in the markets either on behalf of individual and institutional investors, or else were linked to currency derivatives.

Meanwhile, Japanese Finance Minister Yoshihiko Noda said Thursday that he is closely watching foreign-exchange markets, saying there have been nervous moves in thin trading conditions.

Taken together with comments by another senior Ministry of Finance official Thursday, the comments show Japanese officials appear to believe speculators are to blame for the yen's volatility, not repatriation flows back into Japan as some have conjectured.

Wednesday's move is one of the five-largest ever in the yen, according to Kathy Lien, director of currency research at Global Futures & Forex.

The surge came amid volatile trading across financial markets as speculation swirled over the fate of the nuclear plants stricken by Friday's quake. Comments from various energy officials whipsawed the markets, which already were vulnerable after enduring the political turmoil in the Middle East and North Africa. Underlying worries about the health of the U.S. economy in the wake of worse-than-expected housing data added to the fragile situation.

"It's been a very difficult time for the financial markets to sort through the headlines to figure out what's true and what is not," said Greg Anderson, a currency strategist at Citigroup Inc.
Associated Press
A candle chart displaying the conversion rates of the U.S. dollar against the Japanese yen is shown at a foreign exchange firm on Thursday.
Many in the market offered up differing reasons for the yen's strength. Some cited the beginning of repatriation by Japanese insurers of money that will be needed to pay damage claims resulting from the earthquake and tsunami. Others said the yen buying was driven in part by Japanese investors exiting riskier investments abroad.

"Japanese investors, in particular, at times of crisis bring home yen," said David Mann, currency strategist at Standard Chartered Bank. Mr. Mann said the end of March also is the fiscal year-end for many Japanese corporations, who typically would be repatriating earnings from abroad.

The Dow Jones Industrial Average fell 242.12 points, or 2%, to 11613.30 in a session driven by speculation over the state of the reactors at Japan's Fukushima Daiichi plant. The Dow's drop was its biggest one-day slide in seven months, and sent the index briefly into negative territory for the year. The Dow is now down 5% in March. U.S. stock futures pointed to another drop Thursday as investors tried to gauge how the Japanese government will react to the yen's appreciation.

The Standard & Poor's 500-stock index and the Nasdaq Composite index tumbled into negative territory for the year, as the S&P 500 recorded declines in all of its 10 sectors.

The swings across financial markets marks a change from the start of the year when investors were becoming more comfortable that the global economic recovery was on track.
The sudden moves likely caught some traders flatfooted.
"If you are long dollar-yen, you have definitely been getting hurt over the last few days. It is a fairly popular position," said Nadeem Walji, of Duma Capital Management, a fund that makes trades on macro trends.
The question on the minds of many traders, however, was at what point the Bank of Japan will step in and whether it would ask other countries to help with the effort. U.S. officials likely would be reluctant to do that.
The earthquake, tsunami and nuclear disaster, while certain to hurt the Japanese economy in the near term, doesn't appear to be turning into a threat to global economic growth. Japan is the third-largest economy in the world, but it hasn't been contributing much to global growth because its economy has been stagnant.
It is, however, a major link in the global supply chain, and its inability to bring its nuclear-power plants under control adds to global uneasiness at a time when confidence is in short supply.
The Bank of Japan has pumped roughly 45 trillion yen (nearly half a trillion U.S. dollars) into its financial system and expanded its purchases of securities to support asset values. By printing more yen, the Bank of Japan can help to hold down the currency's rise.
Broadly, "it is hard to see this as yen-positive event" in the long run, said Kenneth Rogoff, a Harvard University professor and former chief economist of the International Monetary Fund. Mr. Rogoff said the Japanese government is going to need to run up an already immense debt burden to rebuild.
Some argue that given the magnitude of the crisis, the Bank of Japan will act decisively. It last intervened in September, when the yen actually was weaker than it is today against the dollar, just below 83 yen. At that time the Japanese central bank launched its biggest one-day intervention effort, buying some $20 billion in the open market.
"The BoJ could even prove more aggressive in currency markets in the current situation than it had been last year," wrote Stephan Maier, currency strategist at UniCredit Bank Milan, in a research note Wednesday.
—Jon Hilsenrath and Steve Eder contributed to this article. Write to Tom Lauricella at and Jonathan Cheng at

Wednesday, March 16, 2011

After Japan Quake, Gas Should Eclipse Solar

After Japan Quake, Gas Should Eclipse Solar

Even as it reels from multiple catastrophes, investors still seem to think of Japan as the land of the rising sun: Solar power stocks have jumped sharply.

Japan's nuclear crisis has boosted a solar sector which faces chronic oversupply. Solar cheerleaders will be heartened particularly by Germany's shutdown of several nuclear power plants, since that country accounted for 40% of solar installations over the past two years, according to Credit Suisse estimates.

Solar power is safer but it cannot replace nuclear energy. In 2008, nuclear plants generated 13.5% of the world's electricity, according to the International Energy Agency. Solar power accounted for 0.06%. This understates the investment in solar power required to fill the gap, however, because nuclear plants run most of the time while solar power is by definition intermittent. In 2008, nuclear plants globally generated 80% of their total potential output. Solar units eked out 9%.

Solar power also remains relatively expensive. U.S. government projections for new plants entering service in 2016 put the total cost for electricity from solar photovoltaic units at nearly double the projected cost of new nuclear plants in 2009 dollars. Even if the latter now rise, solar power must compete with other fuels, most notably cheap natural gas. Those same government projections put the cost of electricity from modern gas-fired units at just 30% the cost of solar power.

Politically, gas faces its own problems, given concerns over shale drilling. But then solar power's higher costs and subsidies are also a political issue in these straitened times, which is why governments have been reining in incentives. Japan's tragedy could persuade them to cut the solar power industry some slack. But natural gas's better economics and reliability should make it the biggest beneficiary.

Write to Liam Denning at

Tuesday, March 15, 2011

央票利率超越定存 央行发出加息信号

央票利率超越定存 央行发出加息信号

手机免费访问 2011年03月15日 13:49 中金在线/财经编辑部  查看评论   1年期央票发行放量 利率上行或暗示加息













Monday, March 14, 2011

Japan Triggers Shift In U.S. Nuclear Debate

Japan Triggers Shift In U.S. Nuclear Debate
Alan GreenblattMarch 14, 2011, 4:31 PM

The Exelon Byron Nuclear Generating Station in northern Illinois. Nuclear power accounts for 20 percent of the U.S. electricity supply. (Jeff Haynes/AFP/Getty Images)
The nuclear power industry had been experiencing something of a rebirth in the United States, following decades of doubt. That's been put at risk by the crisis unfolding at a nuclear power plant in Japan in the wake of a devastating quake and tsunami there.

With that situation still in flux, attention should remain focused on dealing with the immediate safety issues in Japan, says Jim Owen, a spokesman for the Edison Electric Institute, an association of electric utility companies.

"There will be plenty of time later on for a, hopefully, thoughtful dialogue," Owen says.

But officials in Owen's industry recognize that problems in Japan are bound to have repercussions when it comes to nuclear policy in the U.S. Already, some members of Congress have called for a "time out" when it comes to nuclear power plant approvals.

"There are some serious problems, even without the Japan crisis," says Richard Caperton, an energy policy analyst at the Center for American Progress, a progressive think tank.

"Even though we have a very safely operated fleet of plants in the U.S., there's always the risk that something very bad could happen," he says.

A Long Time To Recover

Nuclear power plant construction had been largely moribund in the U.S. for decades following a partial core meltdown at Three Mile Island, a nuclear plant in Pennsylvania, in 1979.

The plant's containment system was ultimately not breached. But safety concerns were heightened nonetheless — and were exacerbated by the near-simultaneous release of The China Syndrome, a popular film dramatizing nuclear meltdown.

"Nuclear orders were already down," says Tom Cochran, a senior scientist in the nuclear program at the Natural Resources Defense Council, an environmental advocacy group, "but Three Mile Island was the final straw that ended commitment to any new reactors for more than two decades."

American public support for nuclear power reached its nadir following the 1986 disaster at Chernobyl, when radioactive material escaped a nuclear power plant in Ukraine, then part of the Soviet Union. In a 1988 Harris poll, just 30 percent of Americans favored the construction of more nuclear plants. By March 2010, Gallup found that 62 percent of Americans supported nuclear power, although the industry still had a big NIMBY problem.

"I don't know if concerns about reducing our dependence on foreign oil or $4-a-gallon gas prices will trump renewed worries about nuclear power," says Karlyn Bowman, a polling expert at the conservative American Enterprise Institute.

A Nuclear Revival

President Bush embraced nuclear power as a means to help the U.S. achieve greater energy independence. And nuclear power, which accounts for 20 percent of the nation's supply of electricity, began in recent years to win over some unexpected allies in the environmental community.

Environmental activists had long been skeptical about nuclear power because of concerns about safety and disposal of toxic waste. But some embraced nuclear as a carbon-free energy source that could cut down on greenhouse gases that contribute to climate change.

"Nuclear energy is the only non-greenhouse-gas-emitting power source that can effectively replace fossil fuels and satisfy global demand," Patrick Moore, a co-founder of Greenpeace, wrote in 2005.

President Obama has expanded on Bush's nuclear energy push. Last year, the Obama administration used $8.3 billion from funds set aside by the Bush administration to help construct two reactors in Georgia.

Obama's budget, released last month, calls for $36 billion in loan guarantees for further nuclear power plant construction.

The Debate In Washington

It's that pot of money that will now be subject to greater scrutiny in Washington. On Wednesday, the House Energy and Commerce Committee, which had already been set to look into energy and nuclear funding, is set to question Energy Secretary Stephen Chu and other administration officials about the incident in Japan and its meaning for the U.S.

"I don't want to stop the building of nuclear power plants," Joseph Lieberman (I-CT), who chairs the Senate Homeland Security and Governmental Affairs Committee, said on CBS's Face the Nation Sunday. Lieberman has been a nuclear power proponent.

"But I think we've got to quietly put ... the brakes on until we can absorb what has happened in Japan as a result of the earthquake and the tsunami," Lieberman said, "and then see what more, if anything, we can demand of the new power plants that are coming on line."

Three days before the quake struck Japan, John Rowe, the chairman of Exelon Corp., which is the nation's largest operator of nuclear power plants, had said he would not be investing in any more because they cannot compete with natural gas at current prices. He also called on Congress not to expand the nuclear loan guarantee program beyond the $18.5 billion allocated under the Bush administration.

Industry Insists On Safety

Nuclear power proponents say that the domestic industry will apply any lessons available from the situation in Japan. They have traditionally stepped up safety efforts in the fact of new challenges, such as the risk of terrorism following the 2001 attacks on the World Trade Center.

"It's absolutely true that once the investigations are completed after the situation is stabilized, any lessons that can be gleaned by that will be applied by the industry, not only in the U.S. but around the world," says Owen, the Edison Electric Institute spokesman.

On its website, the Nuclear Energy Institute, an industry trade group, says it would be "premature to draw conclusions from the tragedy in Japan about the U.S. nuclear energy program."

"We remain fundamentally committed to nuclear power and the expansion of nuclear power in the U.S. as a safe and clean emissions-free source of electric generation," Owen says.

Concerns May Grow

Cochran, the NRDC scientist, says that the nuclear industry won't win with arguments that the plants in Japan faced challenges that are different from those in the U.S.

He says that the industry was able to make such a case following the 1986 Chernobyl explosions. That plant had a significantly different design from that of plants in the U.S., and the Soviet safety culture was considered weak.

"But here you have an industry, the Japanese nuclear industry, that is not too different from the U.S.," Cochran says. "Same reactors, same sort of safety culture, same concerns about not exposing the population to radiation."

The possibility of things going badly wrong — perhaps especially at coastal plants located along faults in California — is something that will draw more attention than it has in recent years, says Caperton, the energy policy analyst at the Center for American Progress, which has published studies critical of the costs of nuclear power generation.

"The American nuclear renaissance was largely overstated in the first place," he says. "Most utilities don't want to build new nuclear plants; most state regulators don't want them for rate payers; and banks won't finance them."

Aftershocks for Japan's Power Industry

Aftershocks for Japan's Power Industry


The precarious situation at several Japanese nuclear reactors after last week's devastating earthquake leaves big risks hanging over the economy.

The impact of a severe nuclear accident could be broad. It would affect consumer and corporate sentiment—hardly on a high already, with the strong yen and weak government finances casting a pall over any recovery. It could also hurt Japanese companies hoping to benefit from a recent global reawakening of interest in nuclear power.

Even if an extreme nuclear situation is avoided, the damage inflicted on the Fukushima plants, as well as conventional thermal plants, has made a big dent in the region's power-generating capacity. Some one-quarter of the electricity supplied to the region served by Tokyo Electric Power, which runs the Fukushima plants, has been knocked out, the Agency for Natural Resources and Energy said. And even if conventional plants come back online faster, some reactors probably never will, after having corrosive seawater pumped into them. Any shortfall would be particularly noticeable in the peak summer months.

The region that includes Tokyo accounts for nearly 40% of gross domestic product and so far seems largely unaffected by the earthquake itself. But the knock-on effect there, from compromised generating capacity in the nearby prefecture that bore the brunt of the damage, could prove a significant drag. Given the long lead times required to replace electricity-generating capacity, that could hobble a key region of the Japanese economy for many months, if not years. Rolling blackouts already in place in and around Tokyo may just be a taste of the ripple effects to come.

Write to James Simms at

Saturday, March 12, 2011

Bamboo capitalism

Bamboo capitalism

China’s success owes more to its entrepreneurs than its bureaucrats. Time to bring them out of the shadows

Mar 10th 2011 | from the print edition

FEW would deny that China has been the economic superstar of recent years. Thanks to its relentless double-digit annual growth, it has become the world’s second-largest economy and in many ways the most dynamic. Less obvious is quite what the secret of this success has been. It is often vaguely attributed to “capitalism with Chinese characteristics”–typically taken to mean that bureaucrats with heavy, visible hands have worked much of the magic. That, naturally, is a view that China’s government is happy to encourage.

But is it true? Of course, the state’s activity has been vast and important. It has been effective in eradicating physical and technological obstacles: physical, through the construction of roads, power plants and bridges; technical, by facilitating (through means fair and foul) the transfer of foreign intellectual property. Yet China’s vigour owes much to what has been happening from the bottom up as well as from the top down. Just as Germany has its mighty Mittelstand, the backbone of its economy, so China has a multitude of vigorous, (very) private entrepreneurs: a fast-growing thicket of bamboo capitalism.

These entrepreneurs often operate outside not only the powerful state-controlled companies, but outside the country’s laws. As a result, their significance cannot be well tracked by the state-generated statistics that serve as a flawed window into China’s economy. But as our briefing shows, they are an astonishing force.
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The Mittel Kingdom

First, there is the scale of their activities. Three decades ago, pretty much all business in China was controlled by one level of the state or another. Now one estimate—and it can only be a stab—puts the share of GDP produced by enterprises that are not majority-owned by the state at 70%. Zheng Yumin, the Communist Party secretary for the commerce department of Zhejiang province, told a conference last year that more than 90% of China’s 43m companies were private. The heartland for entrepreneurial clusters is in regions, like Zhejiang, that have been relatively ignored by Beijing’s bureaucrats, but such businesses have now spread far and wide across the country.

Second, there is their dynamism. Qiao Liu and Alan Siu of the University of Hong Kong calculate that the average return on equity of unlisted private firms is fully ten percentage points higher than the modest 4% achieved by wholly or partly state-owned enterprises. The number of registered private businesses grew at an average of 30% a year in 2000-09. Factories that spring up alongside new roads and railways operate round-the-clock to make whatever nuts and bolts are needed anywhere in the world. The people behind these businesses endlessly adjust what and how they produce in response to extraordinary (often local) competition and fluctuations in demand. Provincial politicians, whose career prospects are tied to growth, often let these outfits operate free not only of direct state management but also from many of the laws tied to land ownership, labour relations, taxation and licensing. Bamboo capitalism lives in a laissez-faire bubble.

But this points to a third, more worrying, characteristic of such businesses: their vulnerability. Chinese regulation of its private sector is often referred to as “one eye open, one eye shut”. It is a wonderfully flexible system, but without a consistent rule of law, companies are prey to the predilections of bureaucrats. A crackdown could come at any time. It is also hard for them to mature into more permanent structures.

Cultivate it, don’t cut it

All this has big implications for China itself and for the wider world. The legal limbo creates ample scope for abuse: limited regard for labour laws, for example, encourages exploitation of workers. Rampant free enterprise also lives uncomfortably alongside the country’s official ideology. So far, China has managed this rather well. But over time, the contradictions between anarchic opportunism and state direction, both vital to China’s rise, will surely result in greater friction. Party conservatives will be tempted to hack away at bamboo capitalism.

It would be much better if they tried instead to provide the entrepreneurs with a proper legal framework. Many entrepreneurs understandably fear such scrutiny: they hate standing out, lest their operations become the focus of an investigation. But without a solid legal basis (including intellectual-property laws), it is very hard to create great enterprises and brands.

The legal uncertainty pushes capital-raising into the shadows, too. The result is a fantastically supple system of financing, but a very costly one. Collateral is suspect and the state-controlled financial system does not reward loan officers for assuming the risks that come with non-state-controlled companies. Instead, money often comes from unofficial sources, at great cost. The so-called Wenzhou rate (after the most famous city for this sort of finance) is said to begin at 18% and can even exceed 200%. A loan rarely extends beyond two years. Outsiders often marvel at the long-term planning tied to China’s economy, but many of its most dynamic manufacturers are limited to sowing and reaping within an agricultural season.

So bamboo capitalism will have to change. But it is changing China. Competition from private companies has driven up wages and benefits more than any new law—helping to create the consumers China (and its firms) need. And behind numerous new businesses created on a shoestring are former factory employees who have seen the rewards that come from running an assembly line rather than merely working on one. In all these respects the private sector plays a vital role in raising living standards—and moving the Chinese economy towards consumption at home rather than just exports abroad.

The West should be grateful for that. And it should also celebrate bamboo capitalism more broadly. Too many people—not just third-world dictators but Western business tycoons—have fallen for the Beijing consensus, the idea that state-directed capitalism and tight political control are the elixir of growth. In fact China has surged forward mainly where the state has stood back. “Capitalism with Chinese characteristics” works because of the capitalism, not the characteristics.

Quake Disrupts Key Supply Chains


The earthquake that struck northeast Japan Friday forced shutdowns across a broad spectrum of the country's industries, but the bigger impact for companies could come in the weeks ahead as the disruptions make their way through the global supply chain.

The 8.9-magnitude earth quake, one of the largest on record, has crippled activity for now in a country that is a critical source of parts for consumer electronics, as well as a key producer of automobiles, auto parts, steel and other goods.

Quake Hits Japan

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Global Impact

Waves Hit Hawaii, Force Evacuations
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View Japan Quake Videos
Live Updates

Live Blog: Updates From Japan Real Time
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Plants don't appear to have suffered widespread, catastrophic damage, but production delays could be enough to affect some tightly calibrated industries.

The earthquake affected operations at dozens of semiconductor factories, raising fears of shortages or price increases for a number of widely used components—particularly the chips known as flash memory that store data in hit products like smartphones and tablet PCs.

Many key chip plants, including most of the factories run by companies like Toshiba Corp. and SanDisk Corp. that account for the bulk of Japan's flash-memory production, were far removed from the quake's epicenter, and most are designed to withstand such events.

But some manufacturers are likely to be affected by other issues, particularly disruptions in transportation of finished goods to airports or ports, as well as the movement of employees and supplies to production plants. Even relatively short disruptions could further stress a supply chain already stretched tight in spots over the past year by strong demand for hot gadgets.

"This could have a pretty substantial impact for the next quarter on the whole supply chain," said Len Jelinek, an analyst at IHS iSuppli, a market-research firm that focuses on the electronics industry.

Jim Handy, another market-watcher at the firm Objective Analysis, said he expects "phenomenal" price swings and large near-term shortages as a result of the quake.

Chip companies based in Japan generated about $63.8 billion in revenue in 2010, accounting for about one-fifth of the semiconductor market, IHS iSuppli said. Their presence is felt most in the key market for what the industry calls NAND flash memory, chips at the heart of products like Apple Inc.'s iPhone and iPad. Japanese companies, led by Toshiba, account for about 35% of global flash revenue.

Toshiba is inspecting all of its factories for damage, U.S. spokeswoman Deborah Chalmers said. "In addition to delivery interruptions that may arise from factory damage, shipments of product may be affected by disruptions in road, rail, sea and air transportation within and from Japan," Ms. Chalmers said.

SanDisk, which manufactures flash memory in a joint venture with Toshiba, said its operations south of Tokyo felt "modest" impact. Spokesman Mike Wong said manufacturing operations were stopped temporarily and there was "some loss" of silicon wafers that were being processed. Operations have since resumed, but the overall impact is still being assessed, Mr. Wong said.

Companies with factories close to the quake's epicenter include Freescale Semiconductor Inc., which makes chips called microcontrollers in a factory in Sendai. Robert Hatley, a spokesman for the Austin, Tex., company, said the Sendai facility was evacuated and currently has no electrical power. The company is making plans to evaluate the plant's condition once power is restored, Mr. Hatley said.

The earthquake struck off the coast of the Tohoku region, which occupies the northern section of Japan's main island. While often overshadowed by the Pacific industrial region that lies between Tokyo and Osaka, Tohoku does host big factories for major manufacturing companies.

Auto makers reported some of the most serious damage. Honda Motor Co. said a 43-year old male employee died at its research and development center in Tochigi Prefecture, north of Tokyo, when the wall of a cafeteria crumbled. Honda added that more than 30 employees at several facilities in the same prefecture were injured. The car maker said it halted operation of three plants in Tochigi, Saitama and Shizuoka.

Toyota Motor Corp. said its two Central Motor Co. and Kanto Auto Works Ltd. subsidiaries shut two plants in Miyagi and Iwate in northern Japan. Nissan Motor Co., meanwhile, suspended operations at five factories in Fukushima, Tochigi and Kanagawa prefectures. Small fires broke out at its Tochigi and Iwaki plants but have been extinguished, it said.

The shutdowns come at a time of strong recovery in global auto sales. U.S. auto sales clocked their strongest pace in 18 months in February, and demand in China's market remains strong as well.

Ian Fletcher, senior analyst at IHS Global Insight's automotive unit in the U.K., said the auto industry recovered quickly from a smaller earthquake in the northern part of Honshu, Japan's main island, in June 2008. Friday's earthquake, he said, "is a significantly larger event."

"They will have enough components for a day or so, but the big question is how badly the supply chain has been affected," Mr. Fletcher said. He noted that in 2008 car production was disrupted when a supplier was unable to deliver piston rings.

The auto industry, which has grappled with shortages of chips and conductors over the past year, could also feel the impact of disruptions in Japan's electronics sector.

Paul Romano, chief operating officer of Fusion Trade Inc., an Andover, Mass.-based company that buys and sells electronic components, said a significant amount of components like capacitors and resistors are made in Japan. If factories are affected, "there will be a significant impact because we're coming through a shortage of electronic components," he said.

View Full Image

Kyodo/Associated Press
A toppled chimney damaged a factory building in Sendai, Japan, as a result of Friday's earthquake.

The three primary Japanese suppliers that build critical parts for Boeing Co.'s 787 Dreamliner escaped major damage in Friday's earthquake, according to a senior Boeing executive.

Scott Fancher, general manager of the Dreamliner program, told reporters that the company and its suppliers—Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd. and Fuji Heavy Industries Ltd.—are still inspecting their factories and manufacturing equipment, but so far have discovered no major damage.

The Japanese firms are responsible for the 787's wing structures, main landing gear and part of the forward fuselage, underscoring the country's role in the global supply chain.

While the devastation will affect production on some scale, some economists say damage to the country's industrial base could have been much worse. "They dodged an enormous bullet with this one," said Marcus Noland, deputy director of the Peterson Institute for International Economics. "Sendai isn't the industrial heartland of Japan."

The disruptions affected a wide range of industries. Consumer electronics giant Sony Corp. said it stopped operations at six electronic-components manufacturing plants in Fukushima and Miyazaki. A plant making Blu-ray discs and other products in Miyagi also experienced flooding on its first floor, Sony said.

Disneyland operator Oriental Land Co. decided to close the Tokyo Disneyland and Disney Sea theme parks on the outskirts of Tokyo Saturday, a spokeswoman said. There were about 70,000 visitors at the two theme parks when the quake hit. No injuries were reported, but with train service suspended, several thousands of people were still stuck in the parks Friday night.

Oil refiner Cosmo Oil Co. suffered a major fire at a facility in Chiba near Tokyo.

Gap Inc., which has 131 stores in Japan, said all of its roughly 6,000 employees were accounted for except for those at its outlet in a tsunami-effected area. Based on early reports, the company said its Sendai Kurax and Ikebukuro Tobu stores suffered significant damage

—Dana Mattioli, Elizabeth Holmes and Peter Sanders contributed to this article.

Thursday, March 10, 2011

央行意外上调三月期央票利率 引发加息忧虑

央行意外上调三月期央票利率 引发加息忧虑
手机免费访问 2011年03月10日 11:56 中金在线/财经编辑部 













央行意外上调三月期央票利率 引发加息忧虑
手机免费访问 2011年03月10日 11:56 中金在线/财经编辑部  查看评论   编者按:中国央行周四发行了320亿元的3个月期央票,其参考收益率上调16个基点至2.7944%;由于央行今天还实施了720亿元的91天期正回购操作,令本周公开市场首度出现近四个月来的资金净回笼,规模达到100亿元。鉴于当前三个月期央票的二级市场收益率为2.5623%,与一级市场呈现严重倒挂,因此市场将央行本次意外上调一级市场发行收益率的行为视为加息信号……


  中国央行10日在公开市场发行了320亿元3月期央票,发行利率出人意料地跳升了16.3基点,达到2.7944% 央行同时展开了720亿元91天期正回购,一周内回笼资金达到2150亿元,实现净回笼100亿元,结束了持续16周的净投放。

  320亿元的3月期央票发行量较上周增加了310亿元,并且创下去年11月份以来该品种的发行量新高 。

  上海一商业银行交易员表示,原来以为不会上调3月期利率了,毕竟一级市场利率已经超过二级市场,不再倒挂了 。


  虽然3月期央票发行放量,利率上调,但是由于近期到期资金仍然维持高位,业内人士认为紧缩政策可能还会再次使用 。

三月央票收益率走升引加息猜疑 一年央票成焦点

  * 公开市场本周净回笼100亿元人民币,为近四个月首见

  * 三月期央票发行收益率意外走升逾16bp至2.7944%

  * 央行公开市场回笼资金功能逐渐恢复

  * 是否为加息信号还需观察下周一年期央票走势



















  回笼 投放


  央票发行(周二) 10

  (周四) 320

  正回购 (周二) 1,100

  (周四) 720

  央票到期 2,050

  正回购到期 --



央票相当于中央银行发行的债券,中央银行发行央票,金融机构购买央票,获得利息收入,而金融机构在二级市场进行央票出售,有一个利率差。现在的情况是,二级市场央票的利率比一级市场高,也就是说金融机构从央行买入央票,立即在二级市场出售,就会亏损。 央票和存款准备金率一样是重要的公开市场操作手段,除了有回笼资金、维持市场上的货币供应量等功能外,还被视为提供市场基准利率的重要手段一般来说,当央票发行利率持平或略高于二级市场收益率水平时,机构对央票的需求将保持相对稳定。 但今年(2010) 5、6月份以来,由于受银行资金面紧张影响,央票二级市场收益率不断上行,央票一、二级市场利率持续出现倒挂。截至11月26日,3月、1年和3年央票发行利率分别低于二级市场111个基点、68个基点和75个基点。利率倒挂,直接导致一级市场认购热情持续下降,从而引起各期限央票发行量的不断萎缩.

Wednesday, March 9, 2011

Rewriting Pension History

Rewriting Pension History

Some Big Firms Move to Recognize Gains and Losses in the Years They Occur

Some big companies are changing how they account for their pension plans in a way that could make their earnings look better in coming years.

AT&T Inc., Verizon Communications Inc. and Honeywell International Inc. recently ended a longstanding practice in which they "smooth" large gains and losses generated by pension assets into their financial results over a period of years. From now on, these companies will count all such gains and losses in the same year they are incurred.

.While the moves might seem like arcane accounting steps, they have important implications for investors. The companies say the changes will make their earnings reporting more transparent, but they also sweep away tens of billions in past pension losses the companies have yet to smooth into—and hurt—their results. By charging them against their earnings from 2008, when the losses were incurred, they are taking lumps for years that many investors may no longer care about.

"They'll put the bad news behind them" said David Zion, an accounting analyst with Credit Suisse.

Still, the accounting change will make it clearer to investors how pension plans' performance affects the companies' income statements, where it is factored into operating earnings. And the current rock-bottom interest rates make it a good time to make such a change. Any increases in rates could improve pension-plan performance, and clearing away the old losses will heighten the impact that better performance has on the companies' earnings.

Under current accounting rules, companies with defined-benefit pension plans, which promise to pay specified amounts to retirees, have the option to take several years to spread the cost of large pension gains and losses into earnings. That means that when a plan's investment results are much better or worse than expected—as with the 2008 market downturn—it can have a significant effect on earnings for years.

For that and other reasons, the system of accounting for pension results in earnings long has been widely criticized. The Financial Accounting Standards Board, the U.S. accounting rule maker, has examined the issue before but hasn't made any changes, though they may revisit it soon. AT&T, Verizon and Honeywell changed their accounting methods on their own initiative. While the details differ, all three said they would start recognizing some or all of their deferred losses in the year they occur, through a "mark-to-market" adjustment to fourth-quarter earnings to reflect their pension plan's returns for the year.

All three assessed the bulk of the change's impact against 2008 earnings, the height of the market meltdown. AT&T, for example, said its 2008 pension costs would increase by $24.9 billion because of the change, compared to a $3 billion increase for 2010. The company reduced its 2008 earnings by $15.5 billion as a result, from a profit of $12.9 billion to a loss of $2.6 billion.

An increase in interest rates could benefit the companies' pension plans if, as expected, they move higher. That is because pension obligations that may be paid out decades into the future are discounted back to their present value. When rates are low, there's less discounting, and the obligations stay relatively high. But when rates rise, the future obligations will be discounted more aggressively, moving their present value lower.

That means a lower base on which the company has to pay interest costs, which could translate into lower pension costs, improved pension performance and better earnings.

"Clearly the mark-to-market approach is preferable accounting," said Kathleen Winters, Honeywell's controller. But she acknowledged that "the low interest-rate environment made this a good time to do this."

Such factors were "not the driving force behind the change," said an AT&T spokeswoman. "It's about more transparency, a simpler accounting method." A Verizon spokesman declined to comment.

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Associated Press

AT&T is one of the companies redoing the way it accounts for pensions.
.General Electric Co. and International Business Machines Corp. plan a related though less-sweeping step. They will start providing data on their operating earnings with some pension-related elements removed. "We just wanted to take it out," said an IBM spokesman. A GE spokeswoman declined to comment.

For AT&T, Verizon and Honeywell, the change has a potential downside: Without smoothing of pension results, their earnings may show more year-to-year volatility. A market surge could propel that year's earnings drastically higher, but a plunge could hollow out earnings, leaving investors who don't dig beneath the reported numbers vulnerable to surprises. Though logical for the companies, the change "has a lot of risk" for investors, said Alan Glickstein, a senior consultant at Towers Watson, a human-resources consulting firm.

Still, others may follow in the footsteps of the three companies. According to The Analyst's Accounting Observer, 74 companies in the Standard & Poor's 500-stock index had both underfunded pension plans and unrecognized losses equal to at least half their pension assets at the end of 2009.

A potential candidate is DuPont Co., which has $9 billion in unrecognized losses. The company's 2010 pretax earnings of $3.7 billion were weighed down by $507 million of past losses that were amortized into its results. Eliminating smoothing would get rid of that weight. Goodyear Tire & Rubber Co. has $3.2 billion in unrecognized losses. Spokesmen for DuPont and Goodyear declined to comment.

Write to Michael Rapoport at