| Global News Coverage for Investment Professionals |  |
- Asian leaders reject Obama's push for stronger Chinese currency
Despite a visit from U.S. President Barack Obama, the Asia-Pacific Economic Cooperation ignored efforts to present a united front to support a strengthened Chinese yuan. A closing statement at the group's meeting avoids mentioning the impact of exchange rates on trade. "The challenge Obama is facing is that the influence of the U.S. is rapidly waning and that he has little credibility" on trade issues, said Marc Faber, a fund manager at Marc Faber in Hong Kong. "Obama talked about free trade, but recently the U.S. slapped tariffs on Chinese-made tire imports." Bloomberg
(15 Nov.), Bloomberg Businessweek
(15 Nov.)
- IMF chief presses China to allow yuan to strengthen
Allowing the Chinese yuan to rise would not only lead to a "healthier global economy" but also strengthen the domestic economy, International Monetary Fund Managing Director Dominique Strauss-Kahn said. "Allowing the renminbi and other Asian currencies to rise would help increase the purchasing power of households, raise the labor share of income and provide the right incentives to reorient investment," he said. Google/Agence France-Presse
(15 Nov.)
- GM to start repaying U.S., Canada soon, source says
General Motors will start paying back loans from the governments of the U.S. and Canada much sooner than anticipated, a source said. A $1.2 billion payment is expected to be made toward the end of December, with the U.S. getting about 85% and the rest going to Canada. GM received $50 billion in government aid. NYTimes.com
(15 Nov.), The Detroit News
(15 Nov.)
- Airbus, Boeing forecast recovery for airlines next year
Executives at Airbus and Boeing said orders are no longer being delayed by airlines, a signal that the industry's slump is ending. Economic growth in 2010 is expected to help airlines repair their balance sheets, said Randy Tinseth, Boeing's head of marketing for commercial planes. "Next year will be a year of recovery, and in 2011, airlines will return to profitability," Tinseth said. Bloomberg
(16 Nov.)
- "Clean coal" brings together U.S., Chinese energy giants
Some of the biggest energy corporations in the U.S. and China are teaming up to search for "clean coal" technology that extracts more energy and reduces carbon emissions. Duke Energy and Southern Co. are collaborating with Chinese firms to make coal more efficient and friendly to the environment. "There's a perception that the U.S. leads in this technology and China lags," said Armond Cohen, executive director of the Clean Air Task Force. "That's not so. In some key areas, China is more advanced. There's a lot to share." Bloomberg Businessweek
(13 Nov.)
- RBS criticized for helping Kraft fund Cadbury bid
Royal Bank of Scotland came under fire from unions and members of the British Parliament for making a $1.05 billion loan to Kraft Foods. The loan will help Kraft finance its takeover bid for U.K. candy maker Cadbury. The groups asked the government to examine the effect the bid would have on jobs in the country. RBS received substantial bailout funds from the U.K. and is partly owned by the government. "It hasn't escaped our attention that we have got a bank that is owned by the taxpayer partly funding this bid," said a spokeswoman for Unite, the union representing Cadbury workers. The Guardian (London)
(14 Nov.)
- U.K. investors move cash back into stocks, bonds
A report by the Investment Management Association shows that U.K. investors purchased $4.5 billion in stock and bond funds in September. It was the sixth month in a row that more than $4 billion was paid into such funds. "Savers are obtaining tiny returns on cash deposits at the moment and are looking for an alternative home for their money," said Ben Yearsley of financial adviser Hargreaves Lansdown. The Times (London) (subscription required)
(16 Nov.)
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| Economics |  |  |
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- Japanese, Chinese officials warn of asset bubbles
Bank of Japan Governor Masaaki Shirakawa joined China Banking Regulatory Commission Chairman Liu Mingkang to warn that the loose money policy of the U.S. Federal Reserve could fuel an asset bubble. Shirakawa warned of "new, real and insurmountable risks to the recovery of the global economy" because of the Fed's policy. "The continuous depreciation in the dollar, and the U.S. government's indication that, in order to resume growth and maintain public confidence, it basically won't raise interest rates for the coming 12 to 18 months, has led to massive dollar arbitrage speculation," Liu said. Bloomberg
(16 Nov.)
- Japan posts fastest GDP growth in 2 years
Japan's GDP grew at an annualized rate of 4.8% in the third quarter, according to preliminary data from the Cabinet Office. That marks the second consecutive quarter of expansion and the biggest jump in GDP for the country in two years. The largest factor driving the growth was a 1.6% increase in capital spending by businesses. Bloomberg Businessweek/The Associated Press
(15 Nov.), CNN
(15 Nov.)
- Chinese-U.S. economic ties uncomfortable but unbreakable
U.S. President Barack Obama's first official visit to China comes at a time when the countries are extremely economically intertwined. Neither appears particularly comfortable with the arrangement, but neither sees a good alternative. The U.S. needs China to buy its debt, and China needs access to U.S. consumers to buy its exports. "We are in a fairly advanced stage of economic mutual interdependence," said Kenneth Lieberthal, a specialist on China at the Brookings Institution. "I think the Chinese can pull the rug out from under our economy only if they want to pull the rug out from under themselves." The Washington Post
(16 Nov.), Los Angeles Times
(16 Nov.)
| Geopolitical/Regulatory | | |
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- U.K. doesn't want EU to rush through financial reform
A powerful committee of the Britain Parliament urged the EU to slow down action on creating a pan-European financial regulator and take more time and get the job done right. John McFall, chairman of the Treasury Select Committee, said he is worried that EU officials are under pressure to take final action at a meeting Dec. 2. "We consider that is far too fast," he said. "The proposals will set in place a framework which should last for many decades, and there should be proper time for consideration. Otherwise this could end up as a recipe for a muddle." Google/The Press Association (U.K.)
(15 Nov.), Telegraph (London)
(16 Nov.)
- EU considers capping pay for hedge fund managers
The European Commission is considering a proposal to limit compensation for hedge fund managers. "It is important that we create a level playing field between different parts of the financial industry," a spokeswoman said. The Alternative Investment Management Association said it opposes capping executive pay at hedge funds. EurActiv.com
(13 Nov.)
- Regulators, bankers to discuss crisis lessons in Frankfurt
About 500 speakers, including German Chancellor Angela Merkel, bank CEOs and central bankers, are set to address thousands of participants at Euro Finance Week in Frankfurt this week. Participants will debate the financial crisis and lessons to be learned from it. Jean-Claude Trichet, president of the European Central Bank, will discuss "Tomorrow's Monetary Order and Financial Markets." Reuters
(16 Nov.)
| Financial Products | | |
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- Invesco to launch first ETF focusing on Build America Bonds
Invesco is scheduled to launch its first exchange-traded fund investing in Build America Bonds. The bonds provide a rebate that effectively lowers the interest rate paid by state or local governments that issue them. But interest paid to investors is unaffected. The PowerShares Build America Bonds Portfolio Fund will follow the Bank of America Merrill Lynch Build America Bond Index. The ETF, with a net expense ratio of 0.28%, will trade on NYSE Arca. IndexUniverse.com
(13 Nov.)
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