Month: September 2013

Debt ceiling as strategy is ‘disastrous’: Bill Clinton

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Using the debt ceiling fight as a political strategy to reduce government spending is “disastrous,” former Democratic President Bill Clinton said Thursday.

Policymakers have long used budget fights as an opportunity to call attention to another issue they care about, Clinton said. “That`s fine, but to do it as a strategy to actually stop from paying America`s bills is disastrous.”

Clinton, who served two terms from 1993 to 2001, presided over two government shutdowns. Appearing on “ Closing Bell ,” he said a government shutdown would be a “significant negative” today, though, because economic conditions were much better in the `90s and “it was still bad.”

“This is coming not at a time like in `96 when the economy is picking up and the deficit`s going down and people think we`re going in the right direction anyway,” he said. “We managed our way through it, but it`s a lousy way to run a railroad.”

The threat of a government shutdown looms as lawmakers debate whether to raise the USD 16.7 trillion debt limit and pass a spending bill to keep the government funded beyond Oct. 1, when the new fiscal year starts. Clinton suggested the problem is uniquely American.

“They`ve already voted to spend this money, so under our system, which other countries don`t do, they have to vote again to borrow the money to cover the spending they`ve already voted for,” he said. “So that creates an opportunity since it always sounds bad `raising the debt ceiling.`”

On the issue of the ongoing military conflict in Syria, Clinton said if still president he would “keep the door open” for diplomacy, but also put pressure on Syria and Russia to work together to remove chemical weapons from the war-torn country. Due to Syria`s ethnic diversity, Clinton said negotiation is the best way to bring peace “if you don`t want war to break out again.”

Asked by CNBC`s Maria Bartiromo what President Barack Obama could have done differently, Clinton said “he could have used air power sooner.” Then again, he said things worked out after Russia-led negations led Syria to agree to turn over all of its chemical weapons. After all, he suspects Russian President Vladimir Putin must be perturbed by al-Qaeda linked terrorist groups “interfering in the Syrian conflict.”

Speaking of US-Russian relations, Clinton said Putin will eventually have to rethink his anti-American stance because Russia will not be able to operate an energy-driven economy forever.

“Russia`s economy should be based on the fact that every year in the international computing contests, with lots of, scores and scores of universities, there are always two Russian universities in the top five. That`s the key to Russia`s future,” Clinton said. “So I think Putin may be rethinking some of his strategy. He has milked this anti-American cow about as long as he can milk it.”

-By CNBC`s Drew Sandholm with Reuters. Follow him on Twitter @DrewSandholm

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s top housing market headed for correction?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mumbai saw its most expensive apartment sale on record last month, with a sea-facing duplex located in the highly sought after Malabar Hill area fetching a staggering $9.1 million, according to local media reports.

This record-breaking sale stands in stark contrast to growing pessimism over the broader outlook for Mumbai’s subdued residential property market, which faces a subdued job market, lower household incomes and higher interest rates.

The combination is increasing the risk of a home-price correction in India’s financial center over the coming months, analysts say, noting housing prices in Mumbai have risen nearly 70 percent over the past four years.

(Read more: India’s central bank follows Fed with market surprise)

“With sentiment low, only buyers that are from double-income households or [are] financially well-off are committing to real estate; the majority remain cautious. Investors also aren’t active in the market, they are waiting on the fence,” Sanjay Dutt, executive managing director for South Asia at Cushman & Wakefield told CNBC.

Critical period

The next six months will be a critical period for developers to assess whether or not they need to cut prices, analysts say, as upcoming religious festivals including Diwali, which falls in November, and Gudi Padwa next March are regarded as an auspicious time to buy real estate.

(Read more: Is it time to scoop up Vietnam properties?)

(Read more: Emerging markets handed golden opportunity to restore confidence)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Japan’s consumer inflation rises to 5-year high

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Japan’s core consumer prices, which exclude volatile food prices, rose 0.8 percent in August from a year earlier, recording their biggest annual rise in almost five years.

The rise in the core consumer price index (CPI) marked the third straight month of increases and was above analyst expectations in a Reuters poll for a 0.7 percent rise.

(Read more: Is Japan’s economic recovery gaining traction?)

It is the latest sign that aggressive monetary easing from the Bank of Japan this year is helping to push Japan out of the deflation that has hampered the economy for almost two decades.

Higher energy prices helped boost inflation, while a weak yen lifted the cost of imports and is something that could undermine consumer spending going forward.

And despite the positive CPI number on Friday, some economists say it’s still too early to call a turnaround in Japan’s inflation outlook.

“In our view, this is still early days,” Paul Gruenwald, chief economist, Asia Pacific at Standard and Poor’s Ratings Services, told CNBC Asia’s “Squawk Box.”

“We have to dislodge two decades of deflation expectations to get back to 2 percent inflation and we’ll wait to see if Mr. Kuroda aggressively uses his balance sheet to make that happen,” he added, referring to Bank of Japan Governor Haruhiko Kuroda.

 Japan’s consumer price index, when food and energy prices are stripped out, fell 0.1 percent in August from a year earlier, the same pace of decline seen in July.

The BOJ has a 2 percent inflation target, which it plans to meet over a two-year time frame by pumping more than USD 70 billion a month into the economy.

(Read more: Will Japan’s elderly get burned by ‘Abenomics’?)

Weakness in the yen, which has fallen 15 percent against the dollar this year, is seen as key to pushing Japan out of deflation.

“Dollar-yen is kind of tough here, it’s basically just tracking the spread between U.S. Treasuries and JGBs [Japanese government bonds],” said Mirza Baig, head of foreign exchange and interest rate strategy for Asia at BNP Paribas.

“There is a continuing bias to want a weaker yen but honestly I don’t see the catalyst for a very sharp move higher when Treasury yields are trading in such an anchored manner, so we’ll have to wait for dollar-yen to go higher when domestic story really picks up,” he added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Will a shrinking wage gap bring production home?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The wage gap between developed and emerging economies is set to shrink significantly, according to new research, and could lead to a major shift in where companies base their manufacturing operations.

PricewaterhouseCoopers` (PwC) Global Wage report, published on Thursday, found that all emerging economies are expected to show significant convergence in wage levels relative to the US and UK by 2030. The shift looks to be most marked in China, India, Mexico and the Philippines.

India`s current average monthly wage, for example, is around 25 times smaller than that of the US, but PwC estimates that by 2030 it is likely to be just 7.5 times smaller. Similarly, average wages in the US are now 7.5 times greater than in Mexico, but by 2030 are projected to be just 3.8 times more.

Higher labor productivity growth in these emerging economies will drive this boost to wages, PwC said, along with a long-term appreciation of local currencies. This contrasts with the developed world, where real wages tend to rise more slowly than productivity.

“The direction of change is clear,” said John Hawksworth, PwC`s chief economist. “The large wage advantages enjoyed today by many emerging economies will shrink as their productivity levels catch up with those in advanced economies and their real exchange rates rise as a consequence.”

This shrinking wage gap will have “major implications” for global business, the report claimed, as labor costs rise in countries previously deemed low-cost production havens.

There is already a growing trend of global businesses moving at least some of their manufacturing operations home, with companies including Apple, Caterpillar and General Electric all announcing plans to shift production back to the US from overseas over the last year.

It comes amid increasing pressure, from both workers-rights groups and consumers, to provide at least some domestic jobs. There is also widespread concern about the labor conditions of workers in foreign factories, highlighted by a deadly fire at a garment production facility in Bangladesh earlier this year.

According to PwC, countries such as China, Poland and Mexico will be seen as less attractive places to base manufacturing facilities as a result of the change in relative wages, but could become more important as consumer markets.

Whereas those countries with wages that remain relatively low compared to China – such as India and the Philippines – are likely to become more appealing production locations.

However, the report stressed that India would only benefit from the shift if it improved its infrastructure and cut its red tape.

PwC partner Michael Rendell added that it was crucial for businesses to prepare themselves for this shift in the wage landscape.

“Companies planning for this today will find themselves with significant advantages, particularly in terms of people costs,” he said.

“It`s inevitable that the manufacturing and services industries in countries will transform as the cost base evolves, and also that there will be winners and losers. Governments, regulators and business communities need to be ready for that shift.”

– By CNBC`s Katrina Bishop. Follow her on Twitter @KatrinaBishop

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Taper tantrum to ruffle Asia bond markets, ADB warns

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The prospect of the Federal Reserve`s much-anticipated taper is hurting Asian bond markets, a report from Asian Development Bank has found.

According to the report, local bond markets in Asia are still expanding, but at a more modest pace, as a direct result of investors being more cautious amid greater volatility and weaker growth in the region.

Emerging markets have taken a battering in recent months as fears of a reduction in the Fed`s USD 85-billion-a-month bond buying program prompted sharp capital flows from the region.

Iwan Azis, head of the office of regional economic integration at the Asian Development Bank, told CNBC on Thursday that the current situation is not as dire as the 1997-1998 Asian financial crisis, when Asian bond yields spiked as investor cash exited the region, but warned that “tough times certainly lie ahead.”

“Asia`s bond markets – and its borrowers – are better placed to stand up to this latest round of global volatility than they were in 1997-1998 but tough times certainly lie ahead,” said Azis.

(Read More: Why Fed Won`t Trigger Messy Rerun of 1994 in Asia )

According to the report, in contrast with market conditions in 1997-1998, governments and companies now hold more of their debt in local rather than foreign currencies and they hold longer-dated debt than before, meaning they are less vulnerable to currency depreciation and sudden shifts in borrowing costs and investor appetite.

However, the market is expanding at a slower pace, the report found. At the end of the second quarter of this year, there was USD 6.8 trillion in local currency bonds outstanding in emerging East Asia, a 1.7 percent on quarter increase, but a slower growth rate than the 2.9 on quarter rise in the first quarter.

(Read More: Asia`s high-yield bonds still a premium play: HSBC )

Meanwhile, on the issuance side, there were signs of borrowers holding back amid higher funding costs in the region, ADB said.

From April to June USD 827 billion in new bonds were sold, 4 percent more than the first quarter, but this was largely due to a near 27 percent increase in issuance by central governments and agencies. Meanwhile, corporate issuance slumped 20.1 percent on-quarter to USD 168 billion as new bond sales by companies in the People`s Republic of China (PRC) near halved.

Emerging East Asian companies also found it tougher to borrow in the major foreign currencies. Issuance of foreign currency denominated debt slumped from USD 81 billion in the first five months of the year, to USD 7.5 billion in June and July.

(Read More: Why Asian Bonds Aren`t Just Short-Term Bets )

To address the issue of weakening demand in the Asian bond market, ADB said the region needs to develop more stable sources of funding, including more foreign direct investment (FDI), which tends to be more stable than capital market investment and would attract a wider range of bond investors, such as pension funds.

The report also warned that, as a result of caution surrounding the Fed`s eventual tapering, many Asian governments had missed the opportunity to raise cheap funds to finance USD 8 trillion`s worth of critical infrastructure spending required in the region between 2010 and 2020.

“That will be a further constraint on growth and poverty reduction going forward,” the report said.

(Read More: Asian Sovereign Bonds Becoming Alternative Safe Bets? )

ADB`s Azis told CNBC Asia`s Squawk Box on Thursday that one positive the region could take from the tapering fallout, however, was that it had proven a wake-up call for the countries that most need to press ahead with structural reform.

“I`m not that pessimistic about it, because in a way what`s happened since May after the quantitative easing tapering discussion is eye opening for the policy makers as well as the markets in this region,” he said.

– By CNBC`s Katie Holliday: Follow her on Twitter @hollidaykatie

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US to exhaust borrowing capacity by Oct 17: Treasury

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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USTreasury Secretary Jack Lew warned Congress on Wednesday that the United States would exhaust its borrowing capacity no later than Oct 17, at which point it would have only about USD 30 billion in cash on hand.

The fresh estimate adds another layer of pressure on lawmakers to raise the USD 16.7 trillion debt limit and comes as Congress struggles to pass a spending bill to keep the government funded beyond Oct 1, when the new fiscal year starts.

“If the government should ultimately become unable to pay all of its bills, the results could be catastrophic,” Lew said in a letter to congressional leaders.

The fate of the debt ceiling is up in the air with Democratic and Republican lawmakers once again deeply divided over how to extend the Treasury’s borrowing authority.

The Republican-controlled House of Representatives, which used the debt ceiling to extract fiscal concessions from Democrats in 2011, is focused on dismantling Obama’s health care law in exchange for their debt limit vote.

House Republican leaders said there is no decision yet on what might be contained in a debt limit bill that could hit the House floor as early as Friday.

But President Barack Obama has said he will not negotiate with Republicans on extending the Treasury’s borrowing capacity and Democratic lawmakers are pushing for a clean debt limit raise.

A spokesman for Republican House Speaker John Boehner said Lew’s warning was “another reminder that we need to work together soon on a bill that raises the debt limit and deals with causes of the debt by cutting Washington spending and increasing economic growth.”

“It should remind President Obama that refusing to negotiate with Congress on solutions just isn’t an option,” Boehner’s spokesman Michael Steel said.

The government has been scraping up against the debt ceiling since May, but it has avoided defaulting on any of its obligations by employing emergency measures to manage its cash, such as suspending investments in pension funds for federal workers.

Previously, the US Treasury had said those cash management tools would be exhausted around mid-October, at which time it expected to have USD50 billion in cash on hand.

In his letter on Wednesday, Lew said the updated estimate reflected fresh information on quarterly tax receipts and the activities of certain large government trust funds.

In an attempt to get ahead of the looming debt limit deadline, the Republican-controlled House passed a temporary spending bill that included a provision that would direct the Treasury to pay bondholders and Social Security retirement payments if Congress does not raise the cap on time.

Lew dismissed the provision and repeated the administration’s position that any plan to prioritize certain government payments over others would be “simply default by another name.”

“There is no way of knowing the damage any prioritization plan would have on our economy and financial markets,” he said.

Lew also warned that a repeat of the brinkmanship over the debt limit seen in 2011, which led to a downgrade in the United States’ pristine credit rating, would inflict even more harm on the economy now.

“If the government should ultimately become unable to pay all of its bills, the results could be catastrophic,” he said.

Read more:

Health care is the economy, Obama insists

9 things you must know about a government shutdown

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Vietnam: The next hot property market?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After the long, grinding downturn in Vietnam`s property market, some investors say now is the time to jump back in.

Vietnam`s listed real-estate companies have bottomed out, said David Roes, CEO of Asean Investment Management, which has about 90 percent of its USD 10 million under management invested in the country.

After a four-year bear market, “you`ve still got relative valuations in real estate that are incomparable to any other market,” he said. Listed real-estate companies often have 14 to 15 percent dividend yields and trade at 2.5 to 3 times earnings, sometimes with zero debt, he said.

In 2007, the country`s property market hit a wall after peaking with a bit of a “flipping frenzy,” which was crushed in the following years by double-digit inflation, lending rates above 12 percent and multiple devaluations of Vietnam`s local currency, the dong.

Credit for developers dried up and the dong devaluation boosted the cost of imported materials and labor, leading to many abandoned projects.

But now Vietnam`s property laws are changing and the prices of undeveloped land purchased from farmers will no longer be set by the government, meaning the cost will rise and companies with existing land banks can realize value, he said.

“The downturn has hit rock bottom,” agreed Jason Ng, a director at VinaCapital. Ng noted the government is planning to introduce new regulations allowing foreigners to purchase both apartments and landed properties and to permit them to rent out those properties.

He also noted both developers and buyers of social housing will be offered preferential loan rates of around 6 percent.

“We hope that will spark new interest in the property market,” Ng said. VinaCapital`s VinaLand closed-end fund, listed on the London Stock Exchange (London Stock Exchange: LSE-GB)`s AIM section, has around USD 466.5 million under management. The fund, which trades in US dollars, peaked at around USD 1.70 in 2007; it is now trading around USD 0.44.

But while Ng sees value in the end-buyers, Roes is distinctly “wholesale” on his property picks, avoiding the “retail” finished products, which he still sees as too expensive.

He`s avoiding the high end, especially high-end retail developments, but likes urban developments in tier-two and tier-three cities, where there`s little competition. He also looks at industrial estates, commercial properties and some mall developments.

Among his top stock picks, Roes likes Apec Investment JSC, noting it`s trading at just 2.5 times its 2014 earnings, with a 14 percent dividend yield. The stock has a USD 5.5 million market capitalization, compared with a net asset value (NAV) in excess of USD 100 million, he notes.

The company just sold 5 hectares of industrial park land near a new Samsung (Korea Stock Exchange: 593-KR) factory expansion outside Hanoi for a 100 percent markup, with a profit equal to 25 percent of its market capitalization, Roes said.

Among other property plays, Roes also tips Thang Long Investment Group, which trades around 1.5 times its 2015 earnings, with a USD 3.0 million market cap compared with an over USD 100 million NAV, and Van Phat Hung, which has a USD 6.4 million market cap compared with its over USD 120 million NAV.

-By CNBC.Com`s Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here’s how much it cost Apple to build new iPhones

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Turns out Apple`s (NASDAQ: AAPL) new iPhone 5S and iPhone 5C are more alike than you might think, according to the research firm IHS, which took both devices apart to check out the internal components.

The 16GB iPhone 5S, which features the fingerprint sensor, costs Apple at least USD 199 to build and the 64GB model costs the company about USD 218 to make, according to IHS data shared with All Things D.

Apple`s iPhone 5C, though, doesn`t cost that much less to produce than the iPhone 5S. The iPhone 5C costs between USD 173 and USD 183 to make, according to IHS. The devices are similar in production cost because they really aren`t all that different.

“I would say that they`re almost the same phone, except that the 5S has the fingerprint sensor, the A7 processor and some newer memory chips that consume less power. Beyond that, they`re basically the same,” said IHS analyst Andrew Rassweiler, who oversaw the teardown work.

The most expensive components for both models are those that are associated with the display screen, coming in at a combined cost of about USD 41. The vendors for the display screens likely include Sharp, Japan Display and LG Display, according to IHS.

Before its unveiling, the iPhone 5C was thought to be a much cheaper model of the iPhone. But Apple made it clear that was not the case when it revealed the phone`s pricing during its product event earlier this month. The unsubsidized iPhone 5C costs USD 549 for a 16GB model and USD 649 for a 32GB model. Many analysts had expected the device to cost about USD 300 to USD 350 without a contract.

Apple`s iPhone 5S ranges in price from USD 649 to USD 849 without a contract.

Apple didn`t respond to a request for comment, according to All Things D.

Read the full report on All Things D.

–By CNBC`s Cadie Thompson. Follow her on Twitter @CadieThompson.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Is the Fed taper starting to look more distant?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Since the US Federal Reserve shocked markets last week with its decision not to scale back its monetary stimulus, the argument is building that taper may not happen at all, or at least not for a long time.

Investors have been fretting over the beginning of taper ever since Fed chairman Ben Bernanke first uttered the “T-word” in late May. The reduction in the constant flow of easy money out of the US central bank panicked investors, prompting a broad selloff that saw emerging markets in particular take a beating.

Edward Dempsey, chief investment officer of Pension Partners, said despite intense speculation over when the tapering will happen, in his view it could get pushed out for some time.

“There’s a school of thought that thinks maybe never,” said Dempsey, referring to the potential onset of tapering.

 “The Fed stared into the deflationary abyss and backed away. They are lowering their growth forecasts, they are telling us that economic growth going forward is weaker than they previously thought,” he added.

The US central bank has always said it would only reduce the pace of its bond buying program if the economy was strong enough to withstand it. The bank set thresholds, namely that unemployment would need to fall to 6.5 percent, from current levels of 7.3 percent, and said it would only taper if inflation rose to 2.5 percent, from current lows of 1.5 percent.

However, economic data out of the world’s largest economy has disappointed in recent months, and last week the Fed reduced its growth projections for this year and next. The bank also warned that fiscal tightening in Washington in the form of sequestration spending cuts remained an obstacle to growth in its most recent Federal Open Market Committee meeting.

Dempsey said it was clear the US economy had not recovered enough to warrant a taper anytime soon.

“We have evidence of [slower growth] in the US, looking at casual dining chains that keep reporting lower and lower top line sales. That’s where an average American would be eating out,” he added.

Read More: Some traders got’no taper’ decision news early

But Dempsey believes the main factor holding back the onset of tapering is Bernanke’s reluctance to carry out a major policy change just before his term expires on January 31.

“Bernanke’s term is up in January [and] for him to taper [it] would be a major shift or policy change that he would lock his successor into; it’s not logical. Because why would he want to lock his successor into a policy change that they may not agree with?” added Dempsey.

Following the withdrawal of Lawrence Summers’ – the more hawkish candidate – bid to be the next Fed chairperson earlier this month, vice-chair Janet Yellen now looks to be a shoo-in for the role. Dempsey told CNBC that an extremely dovish new Fed chairperson would push out the chance of tapering even further.

Read More: Defeat of Larry Summers could lead to a government shutdown

“Yellen is the presumed next chairman. She is very dovish and is on record as saying that she would vote for interest rates below zero if there was such a thing to vote for…I suspect that [if Yellen gets the role] we might not see tapering for quite a long time.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China’s economic growth more like 4%: Marc Faber

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China’s economy is probably growing at an annual rate of 4 percent, said Marc Faber, editor and publisher of the Gloom, Boom and Doom Report, brushing aside a recent string of upbeat economic numbers from the world’s second biggest economy.

“I said to an economist I think China is growing at 4 percent per annum and he said do you mean minus 4 percent?,” Faber told CNBC on the sidelines of a hedge fund conference in Singapore on Wednesday.

“I don’t think [China’s economic growth] is minus 4 percent, but we do have to adjust a lot of economic statistics for the credit that has been pushed into the system that is not sustainable in the long-run,” he added.

China’s economy grew 7.7 percent last year and the country has a 2013 growth target of 7.5 percent.

Economists say high credit growth is one of the main risks facing China’s economy and in recent months the central bank has taken some steps to address the issue such as allowing tight liquidity conditions in money markets.

August industrial production, retail sales and fixed asset investment data were all stronger-than-expected, boosting optimism about the outlook for China’s economy.

But Faber brushed aside recent data pointing to a rebound in China’s economy, saying he was looking at other indicators such as trade data from regional neighbors that might provide a better picture of Chinese demand.

“You have to look at other indicators that are more reliable such as export data from Taiwan and South Korea,” he said.

The latest data from Taiwan shows exports rose 3.6 percent on year in August, below market expectations for a 3.9 percent increase.

Faber reiterated his favorable view on gold, saying the previous metal was relatively inexpensive.

“In the long-run, we have a huge bull-market in gold. Between 1999 and 2011, we peaked at USD 1,921 and went down to USD 1,180 and are now slightly above USD 1,300,” he said.

“I think gold and especially gold equities are relatively inexpensive and the S&P [500] is relatively high,” he added.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow