Month: October 2013

Japan’s factory output rebounds in September

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

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Japan’s industrial output rose 1.5 percent in September from the previous month, official data on Wednesday showed.

The figure was lower than a Reuters forecast for a 1.8 percent increase, but was still a bounce from the 0.9 percent decline in August.

The government also raised its assessment of output for the first time in six months.

Manufacturers remained cautiously optimistic going forward, expecting output to rise 4.7 percent in October but decline 1.2 percent in November, according to a survey by the government.

The yen was little changed after the data; dollar-yen traded at around 98.19 mid-morning in Tokyo.

The figures come on back of much better-than-expected retail sales and household spending data on Tuesday, which analysts attribute to the aggressive economic policies by Prime Minister Shinzo Abe, widely known as ‘Abenomics,’ rolled out earlier this year to revive the economy.

 But Paul Gambles, managing partner of MBMG International, said the policies, much like the quantitative easing (QE) undertaken by the Federal Reserve in the U.S., will do more harm than good to Japan’s economy in the long run .

“What it will do is put too much money trapped in corporate balance sheets,” Gambles told CNBC on Wednesday.

“If any of the [Fed] QEs worked well, it was QE 1 for a short period of time. Since then, the QEs have clearly had a very negative effect on the economy, and I think we are going to be in the same boat with ‘Abenomics’ – everybody will be cheer-leading it for a few more months and maybe into next year, but at some point it will become more of a drag than a stimulus,” 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

It’s crisis time for Obamacare

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

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It’s quickly turning into crisis time in Washington for President Barack Obama’s health care reform law with the federal website crashing again and a series of hearings set for this week along with a major address from the president.

Read more: GOP to grill Sebelius on Obamacare

The problems with HealthCare.gov are now well documented and continued with an outage on Sunday. But even if the website gets fixed by the end of November, as the White House promises, potentially bigger problems lie ahead.

Read more: Another Obamacare glitch: Data center shuts down

Middle income consumers are starting to get hit with sticker shock as previously low-priced plans get canceled and replaced with higher-dollar coverage. Stories of consumers getting plans canceled directly contradict Obama’s promise that people who like their plans could keep them under the new law. Defenders of the law say that the new plans will be better. But they will also cost more at a time when wages are stagnant.

And many of these middle class consumers hit by higher rates do not qualify for the federal subsidies intended help millions of lower income consumers get covered, many for the first time. Anger from consumers is likely to add to already rising political pressure to delay or alter the law.

Read more: Being ‘just scared’ an improvement: Goldman exec

This is especially true for Democratic senators such as Mary Landrieu of Louisiana and Kay Hagan of North Carolina facing tough re-election battles next year in states Obama lost. A group of these vulnerable Democratic senators recently signed a letter to embattled Health and Human Services Secretary Kathleen Sebelius asking that the March 31st open enrollment deadline for Obamacare get pushed back.

Republicans in the House, meanwhile, may seek to increase the pressure this week by again voting to delay the mandate for individuals to buy insurance or face a tax penalty. Calls for an individual mandate delay, fiercely opposed by the administration, will likely becoming overwhelming if the federal website is not functioning seamlessly by Dec 1.

Even if the mandate is delayed, the millions of young, healthy and currently uninsured people the law depends on to make the economics work could ultimately decide paying the penalty is better than buying insurance. That could spark a “death spiral” for the law, an outcome that would be devastating for the Obama presidency and Democrats hopes in 2014 and beyond.

The hearings begin on Tuesday but the main event comes Wednesday when Sebelius squares off against Republicans at a House Energy and Commerce Committee hearing. Obama speaks on the health care law the same day at Faneuil Hall in Boston, the place then-Gov. Mitt Romney in 2006 signed the Massachusetts law cited as the model for Obamacare.

ALSO IN WASHINGTON THIS WEEK – The House-Senate budget conference begins Wednesday at 10 a.m. EDT with a meeting that should be little more than a photo-op and a chance for the 29 members to speechify on their priorities. No one in D.C. holds out much hope that the conference will produce any kind of “grand bargain” on spending, tax reform and entitlements.

There is some hope they could find a smaller bargain that replaces the 2014 sequester cuts with longer term entitlement changes. But that’s also difficult in that Democrats won’t agree to Social Security or Medicare cuts without significant additional tax revenues that Republicans view as impossible.

The chances still seem greater that the committee fails and a much smaller group must cut another temporary deal to keep the government open and raise the debt ceiling again nearly next year.

By Ben White, POLITICO’s chief economic correspondent and a CNBC contributor. White also authors the daily tip sheet POLITICO Morning Money [politico.com/morningmoney] Follow him onTwitter: @morningmoneyben

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

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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

Data will be the key as Fed meeting starts

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

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As the Federal Reserve begins its two-day policy meeting Tuesday, markets will get a look at how consumers behaved just before the government shut down.

Economists expect September`s retail sales to be up 0.1 percent, when the numbers are released at 8:30 a.m. ET. The report is one of many that were delayed when the government shut down for 16 days starting October 1.

“We know car sales fell a lot in September, so retail sales could be slightly negative,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi. “If the consumer is two-thirds of the economy and if they`re not looking too well, (Fed officials) are not going to be rushing to taper.”

“It might start some people thinking 1.5 percent [Q3] GDP [gross domestic product], not 2 percent. Confidence came off due to the shutdown,” Rupkey said. “The fourth quarter doesn`t look as solid, whether or not it`s an outlier.”

The Fed last met in September and surprised markets when it did not announce plans to “taper” or reduce its $85-billion-a-month bond-buying program. Economists now believe there is little chance the Fed will reduce its quantitative easing program at this week`s meeting; most think it will not move until March.

“I think it will be pretty much cut and dry, very minor statements being made,” said Rupkey of the October meeting. But he also said the Fed might decide to cut back on its bond buying at the December meeting. “December will be much more interesting. We`ll have two more employment reports. We`ll have the bad one in November, and then one in December,” he said.

Rupkey said October`s jobs report, due for release on Nov. 8, could be very poor due to the temporary impact of the government shutdown. Economists expect the November report to then be artificially inflated by the return of workers.

Other data expected Tuesday includes the producer price index for September, which was also delayed. It will be released at 8:30 a.m. The SandP/Case Shiller home price index will be reported at 9 a.m. and business inventories and consumer confidence will be released at 10 a.m.

“I think the market has to come to a conclusion on where the economy is right now. I don`t think we`ve really had any good data that`s telling us where we are… so you have a market that`s waiting around, and the leadership is getting more defensive,” said James Paulsen, chief investment strategist at Wells Capital Market.

Materials and consumer discretionary were the worst performers Monday, while defensive consumer staples and telecommunications had the best gains. The Dow Monday finished down 1 point at 15,568, and the SandP 500 was up 2 points at 1762.

“Obviously the Fed`s not going to do anything… They`re waiting around for the same thing we`re waiting for. That December meeting could be interesting. I`m not saying I put great odds on it, but if the data comes out in November and December and shows that we`re okay, they could taper then,” Paulsen said.

Paulsen said the market is taking the earnings season in stride. “If anything, it turned out a little bit better than expected,” he said. “I`ll be looking at the confidence number, the retail numbers, the claims numbers…you`ve to get to December before you get clean monthly reports.”

Some economists expect the hit to growth from the shutdown to have been about 0.2 percent a week, or a total 0.5 percent from fourth quarter GDP.

Companies due to report earnings before the opening bell on Tuesday include BP, Pfizer, Deutsche Bank, UBS Aetna, Cummins, Archer-Daniels Midland Johnson Controls, JetBlue Air Products Goodyear, US Steel, Nokia, Thomson Reuters, Allergan, Valerio energy and Occidental Petroleum.

Those due to report after the close include Aflac, LinkedIn, Dreamworks Animation, Yelp, Western Union, United Health Services, Cabot, Caesars Entertainment, Baidu, Flextronics, Genworth Financial, Cirrus Logic and Shutterfly.

Apple reported better-than-expected fiscal-fourth-quarter earnings and revenues Monday, but its stock immediately sold off on the company`s lower-than-expected gross margin forecast. But it recovered later during the company`s conference call.

“I think the market was gasping for air today, and you could see some kind of pull back, but I don`t` think it`s going to be because of Apple,” said Steve Massocca of Wedbush Securities.

“I think the market is expensive and certain parts of the market are very, very expensive,” he said. “That could continue for a while.”

-By CNBC`s Patti Domm. Follow here on Twitter @pattidomm.

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

Still easiest to do business in Singapore, Hong Kong

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

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Singapore and Hong Kong remain the two easiest places for small-to-medium sized businesses to operate, while powerhouse China ranked lower than several African nations, according to the World Bank`s 2014 Doing Business report.

The rankings measure each country`s regulations on 11 business life-cycle events, including starting a business, getting electricity and construction permits, enforcing contracts, paying taxes and getting credit.

“On average around the world, starting a business takes seven procedures, 25 days and costs 32 percent of income per capita in fees,” the report said.

The variations can be wide: In New Zealand, which kept its no.3 ranking this year, it can take one procedure, half a day and little in the way of fees to start a business, but in Suriname and Venezuela, entrepreneurs wait 208 and 144 days respectively, the report noted.

Among the reasons why Singapore retains its top rank is its early adoption not only of electronic filing for public administration, but also a “trade single window,” which eases trade by allowing cross-border traders to submit customs data through a single gateway.

“Trading across borders has been easiest in Singapore since 2007,” it said, while second-ranked Hong Kong is the easiest place to get construction permits.

But China lags behind Zambia and Rwanda

China edged up to rank at 96 from 99 in 2013 after making it easier for businesses to get credit and enforce contracts, the report said, while the U.S. retained its no.4 ranking.

Ukraine, Rwanda, Russia, the Philippines and Kosovo are among countries improving the most in the past year, the report noted. Ukraine improved the most, rising to rank at 112, from last year`s 140, with reforms in eight of the ten topics the data tracks, it said.

Rwanda climbed to rank at 32 from last year`s 54, while the Philippines rose to 108 from 133 and Kosovo advanced to 86 from 96.

Myanmar made its debut on the list, ranking at 182 out of a total 189 countries. “Old laws and regulations still apply in Myanmar, including the Companies Act of 1914, the Code of Civil Procedure of 1908 and the Evidence Act, 1872,” the report noted. Myanmar requires more than $58,000 in deposit capital before registering a business, it noted.

South Sudan and Libya were also added to the rankings for the first time, coming in at 186 and 187 respectively.

“In Libya the civil code and the civil and commercial procedure codes all date back to 1953. In South Sudan the challenge is not updating old laws and regulations but creating new ones from scratch. This process takes time. Yet since independence in 2011, South Sudan has passed a company law, tax law and insolvency law,” it noted.

– By CNBC`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

Should the US be treated like an emerging market?

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

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After a partial government shutdown, a near-miss on a potential debt default and a Chinese ratings agency downgrade, why doesn’t the US get treated like an emerging market?

Pundits have compared the US with developing nations for years, citing issues ranging from crumbling infrastructure to healthcare to education, but in the wake of the 16-day government shutdown and near-default on the national debt, the comparison has moved away from the fringes. Chinese rating agency Dagong cut its rating on US debt to parity with Brazil, with a negative outlook.

Read more: Brand America has been damaged: WPP CEO

“If any other country on the planet played the government game that was just played in the States, the currency would have been destroyed and the bonds would trade up to distress levels. The only reason it didn’t is no one can afford to let that happen,” said James Sullivan, JP Morgan’s head of Asean equity research.

 “Why aren’t people selling down Treasurys more aggressively than they did? Because no one can afford to let the dollar fail. And the too-big-to-fail argument, at least for me, is a driver of why it doesn’t,” he said, citing the dollar’s status as a reserve currency.

But it isn’t just the dollar’s reserve currency status providing the prop.

Read more: Sell US, buy European assets: Strategist

“Despite all of its flaws, (the US) remains the biggest, deepest and most transparent market for investors to deal in. You can’t underestimate the value of transparency,” said Boris Schlossberg, managing director of foreign-exchange strategy at BK Asset Management.

But that market depth means US assets aren’t being priced based on macro-economic fundamentals, said Dr. Marie Owens Thomsen, senior economist at Credit Agricole.

“This allows them to trade above their merits,” she said.

Read more: US rating must reflect creditor nations’ view: Dagong

For the US to trade more fairly on its merits, “we need to have alternatives to US financial markets. Those are coming,” she added, noting she’s watching the development of China’s currency closely. “When the renminbi becomes convertible, things could change quickly. Come 2030, we could have a very different world financial system.”

 Others are unequivocal about the US’s developed market status: “It’s certainly not sensible to talk about the United States as a country that has profound financial vulnerability,” said Ramin Toloui, co-head of emerging markets portfolio management at Pimco, which has nearly USD 2 trillion under management.

“Empirically, historically, there’s a difference between the ability of developed countries to carry debt and emerging market countries,” he said, citing factors including per-capita income and the perceived strength of institutions, as well as the dollar’s reserve-currency status.

(Read more: Funds’ shift away from US isn’t just about the debt ceiling)

“There is a tremendous demand for holding US assets,” Toloui said, but added, “that is not a reason for political leaders to be complacent about economic growth or about the long-term trajectory of the debt.”

Other factors also support the developed market status.

“From a soft asset perspective, it’s still the best educated and most productive workforce on the planet. It’s very hard to bet against that. The government has been doing its best to cause doubt about that,” Sullivan said.

But he noted, from a “hard asset” perspective, the US needs massive infrastructure investment.

“What’s undeniably favorable for the US is the level of living standards and the per capita income. After all, these things are universally very good. On that score, it’s hard to compare the US with an emerging economy,” said Thomsen.

(Read more: Obama: Shutdown slowed economic growth, damaged US credibility)

“What’s more worrying is the rate of change” on structural reforms, she said. “It’s not as positive,” she added.

“The countries that will win are those that undertake the most structural reform, or have the most favorable momentum of the rate of change. That momentum is much greater in Japan, China and Europe than it is in the US That’s what’s worrying for the US,” she said.

By CNBC’s Leslie Shaffer. Follow her on Twitter: @LeslieShaffer1

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

Chinese stocks: Time to take profit?

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

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After a four-month rally, it`s time to take some money off the table in China`s market, Nomura said, turning more cautious before the Party Congress in November.

“The third Plenum of the 18th Party Congress may indeed surprise the market positively on medium-term structural fixes, but it may offer little short-term growth upside,” it said in a note. China`s Communist Party leaders will hold the third plenary session in November to set the country`s economic agenda.

“The medium-term fixes to a few intertwined issues (local government financing vehicles, bank nonperforming loans, property/land prices and corruption) may bring upon unease in the capital market before things settle and improve,” the bank said.

The Shanghai Composite is up around 8 percent since the end of June, outperforming many regional counterparts, which suffered a bout of volatility over the period as funds flowed out of the region amid concerns the US Federal Reserve would beging to taper its asset purchases and constrain liquidity.

Nomura expects the plenum is likely to disappoint the market on three key areas: the one-child policy, land reforms and urbanization. “Big changes in [these] areas may add to short-term macro growth at the expense of medium-term social and political viability,” it said.

Local media has reported in recent months that Beijing may revise the unpopular one-child policy either later this year or early next year, possibly allowing a second child if only one of the parents is an only child, compared with the current requirement for both parents to be only children.

China`s economic overhaul depends on moving millions of rural Chinese into towns and cities, but it requires overhauling land and household registration policies making many reluctant to move.

The bank raised the cash portion of its model China portfolio to 10 percent from zero. It removed Anhui Conch ICBC China Shenhua  China Southern Airlines  and China Communications Services from its model portfolio. Its additions are Baosteel, Datang International uaneng Renewable and Sunny Optical.

“This move is aimed at locking in some gains and raising cash so that we can put the cash to use when the index trades lower/sideways in coming months.” Nomura expects long-term value-focused funds will step in to buy the dips and set a floor for Chinese equities.

Others also see reasons to tap the brakes on China bullishness. In a report titled “Curb Your Enthusiasm,” Credit Suisse  said “renewed enthusiasm from both the buy- and the sell-side has gone too far.” It cited data indicating hedge funds have recently increased net long positions in China, while net buy recommendations from the “sell side” are well above average.

While it noted China has seen a bounce in economic growth, with third-quarter gross domestic product rising 9.1 percent in annualized terms, it doesn`t expect growth to accelerate any further from here and other indicators, such as money creation, paint a more negative picture.

The bank also cites continuing structural concerns, such a credit bubble, worries on the real-estate sector and investment.

“In the near term, Chinese macro surprises appear to have peaked, and suggest that relative earnings momentum is set to weaken,” Credit Suisse said. “We remain concerned about excess capacity leading to falling producer prices and falling profits. We note that within a global context, China has the lowest non-financial margins.”

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

Singapore: Wealthy nation that can’t afford to retire

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

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The Southeast Asian city-state of Singapore may boast of the highest percentage of millionaires in the world, but retiring in this wealthy financial hub is becoming even more difficult for the common man.

According to a latest study by HSBC, the citizens of this country, which has one of the highest per capita incomes in the world, face the grim prospect of running out of their savings almost halfway through retirement as the high cost of living and increased life expectancy eats into their nest egg.

Singapore has gradually moved up human resources firm Mercer’s global rankings of the world’s most expensive cities, moving to sixth place in 2012 from eighth in 2011 and eleventh in 2010.

Read more: Singapore’s High Cost of Living May Come at a Cost

“There is cause for concern from the finding that the retirement savings of people in Singapore will run out after nine years, which is about the time they are entering into frail retirement and a stage of their lives when medical costs and other elderly care expenses are expected to rise,” Paul Arrowsmith, head of retail banking and wealth management, HSBC Singapore, said in the report released on Wednesday.

“People are living longer, through tougher economic times, and expectations about their standard of living in retirement have risen,” Arrowsmith added.

More than half of the 1,000 Singaporeans interviewed for the survey said that either they were not adequately prepared or not prepared at all for retirement as they expected to continue working beyond the age of 65 to be able to afford their desired lifestyle.

One also needs more money to fund one’s retirement in Singapore. According to the study, the annual household income required to lead a “comfortable” retired life in Singapore is the third highest among Asia’s major economies, behind Australia and Hong Kong, at $48,773. This figure is 68 percent higher than what was needed in 2011, the survey, which has been running for eight years, found.

The rising cost of living in Singapore has 58-year-old Singaporean Janice Tan worried about her retirement.

“I think the cost of living is really escalating a lot,” Tan told CNBC. “During the Chinese New Year season, when I went to buy the goodies, it really shocked me, because the cost is really going up too fast.”

Tan and her husband are currently paying for the education of their two children, including a 21-year-old daughter studying in Perth, Australia. While Tan, an administration professional, hopes to retire soon, she says she knows it might be another 10 years before that happens.

“As human beings we want more – a more comfortable life. That’s where the worries come in on whether you will able to survive,” Tan said.

According to the study, of those not saving for retirement, nearly half said they were being held back by the cost of day-to-day living.

Read more: Protest Puts Political Risk in Singapore’s Future

High costs have become a major cause of discontent among Singapore’s residents. This prompted a rare protest over the weekend in which about 3,000 people participated. They were voicing concerns over swelling costs driven by an influx of foreigners.

Foreigners, who account for almost 40 percent of Singapore’s 5.3 million people, have been blamed for pushing up housing prices and taking up jobs in one of Asia’s major business centers.

Read more: Singapore Firms Hit by Foreign Labor Laws

Retirement Fears

The top three fears about retirement cited by Singaporeans were poor health, financial hardship and not having enough money to provide for good healthcare, according to the study.

With retirement savings drying up at a time when Singaporeans are most vulnerable to health problems, funding medical bills could become a big burden, HSBC said.

Tan backed that sentiment, saying that medical bills from a motorcycle accident that her husband was involved in last year have been a drain on their finances.

“As we get older, I realize it [funding health costs] is a more important thing to sort out,” said Tan. But the high cost of living is coming in the way. “I can’t imagine how much more the cost of living is going to go up to,” she added.

—By CNBC.com’s Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu

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

This Asian nation faces a growing crisis from aging

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

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While most of Southeast Asia is expected to enjoy relatively young populations in the decades ahead, one country appears to be bucking the trend in a big way.

Thailand, the region`s second-biggest economy after Indonesia, is aging rapidly and economists say not enough is being done to prepare the country for the demographic change taking place.

The United Nations (UN) expects Thailand`s working-age population, those aged between 15 and 64, to peak in 2017. Its data show that 8.9 percent of the population was aged 65 and over in 2010. This is projected to increase to 19.5 percent in 2030.

“Thailand`s aging demographic is very serious and there is a sense that this is not being discussed at the policy level,” said HSBC ASEAN economist Su Sian Lim.

“If you look at the UN`s population projections, the working-age population will decline as early as 2017 – that has very significant growth implications,” she said. “The productive part of the labor force is disappearing.”

An aging population can have important long-term consequences for an economy – from pressure on state finances and the health care system to lower economic growth rates if the workforce is not large or productive enough to support retirees.

Old man

According to BofAML Thailand is the only country in Southeast Asia that will join the ranks of Northeast Asian countries such as China and Japan in seeing their working-age population shrink over the next decade.

In short, BofAML analysts believe Thailand has emerged as the “old man” of Southeast Asia.

“We have been used to seeing developing economics such as Thailand growing at annual rates of 5 to 6 percent – that growth would be in question with an aging demographic,” said Seng Wun Song, regional economist at CIMB Bank in Singapore.

Economists attribute a successful contraception program introduced in Thailand in the 1970s for the falling birth rate, which means fewer working-age people in the future.

Thailand`s fertility rate declined to 1.6 percent in 2011 from 2 percent in 1992, near developed peers such as Singapore, which has a fertility rate of about 1.2 percent, and well below levels seen in the Philippines and Indonesia.

It`s not the only country grappling with an aging society: Japan, China, the US and much of Europe is in the same boat.

The Singapore model

Analysts say Thailand urgently needs to implement policies that address the declining population in the same way that Singapore has done in recent years.

Singapore also faces an aging population and low birth rate but has worked to offset this in recent years through steps such as ramping up migration. Those policies mean Singapore`s population is expected to peak later than its regional peers.

In August, the Thai National Economic and Social Development Board urged the government to draw up a family-development plan to cater for a highly dependent population after 2040 and to promote sufficient retirement savings, local newspaper `The Nation` reported.

It says that by 2040, a quarter of the Thai population could be over the age of 65.

“I`m sure we can do better,” said Supavud Saicheua, head of research at Thailand`s Phatra Securities, talking about measures taken to support an aging population.

“There is now universal healthcare and benefits are being expanded from a social security system set up several decades ago,” he said. “Industrial workers and civil servants have pension funds. But over 20 million workers in the agricultural and informal services sectors do not have such schemes and it is likely that they will not have enough savings to retire on.”

Rotjana Patikarapong, who left Thailand five years ago and lives in Singapore with her family, says she would not consider returning home to retire.

“We don`t have a system like the CPF in Singapore and there doesn`t seem to be a policy about caring for the elderly,” she said, referring to Singapore`s Central Provident Fund – a compulsory savings scheme that citizens can use for retirement, housing or healthcare.

Analysts say one option for Thailand to address the aging population quickly is to encourage more migration. Reforming the education system to produce a more productive labor force is another area the government should look at more closely, they add.

“There is a lot of room to increase labor productivity – reform of education to produce the right manpower is something that is long overdue,” said Phatra Securities` Saicheua.

Whatever the government does it needs to do quickly, added HSBC`s Lim.

“The longer you leave it the harder the problem of addressing an aging population becomes,” she says. “And Thailand has left it very late.”

-By CNBC.Com`s Dhara Ranasinghe; Follow her on Twitter @DharaCNBC

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

In start-up bubble, $4 billion is the new $1 billion

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

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The latest news on the CNBC Disruptor50 companies upending the status quo in the markets:

Instagram and Tumblr fleeced?

Forty is the new 30, and 80 is the new 60, and in the land of capitalist milk and honey—otherwise known as Silicon Valley—is USD 4 billion the new USD1 billion?

Pinterest just wrapped up a gargantuan round of funding, USD 225 million, that values the company at USD 3.8 billion. For that, Pinterest offers not even a single dollar of revenue, at least not yet. But it has a plan for world domination, and that’s all that matters.

When Monsanto bought agricultural algorithm start-up Climate Corp.—founded by Google engineers—for USD 930 million recently, you could almost hear the screams in Silicon Valley for leaving USD 70 million on the table and ruining a sure billion-dollar thing for everybody else. It seems the billion-dollar payday given the likes of Instagram, Tumblr and Waze is downright cheap in the app arms race.

Pinterest’s latest round was almost double its valuation in a fundraising earlier this year, but at least it’s not like investors with a low risk tolerance are exposed to this type of bet: The lead investor was Fidelity Investments, one of the biggest managers of individual investor retirement assets in the US

Read more: 11 ways your daily routine will never be the same

Whatsapp in Arabia: Chapter 2

A few weeks ago Whatsapp’s website was hacked by a group representing Palestinian political interests. It’s also a well-told tale that social media played a significant role in the Arab Spring uprisings. So it’s pretty obvious that the powers in the Middle East are paying attention to what “the kids” are downloading and using to communicate.

No surprise, then, that Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, deputy ruler of Dubai, met with Jan Koum, the typically elusive co-founder and CEO of the world’s most downloaded app, this past week.

Koum announced last week that Whatsapp had reached 350 million active monthly users—up 50 million since August. By comparison, Twitter has 230 million active monthly users.

It’s possible that the sheikh was seeking some advice on how to hail a private cap by app, as Dubai announced plans to launch its own Uber-like private car app service, according to a report in The Wall Street Journal.

Read more: The booming business of 3-D printing

Thom Yorke, we have a new music service for you to hate

You know what I’ve always thought would be really cool? Pandora or Spotify with actual live footage of the bands playing the streamed music, or at least the videos. I mean, those screen-saver-level graphics on Pandora are barely above an Atari 2600 game level.

Well, for those about to rock, there may be a new Google-backed music service to stream you, in video. YouTube is preparing an on-demand music service—akin to Spotify, but with video—to launch later this year, sources told Billboard.

Like Spotify, it will have free and premium tiers and an unlimited catalog similar to the offering of the All Access subscription music service from Google (YouTube’s parent).

Read more: Why Google’s Chromecast isn’t an Apple killer … yet

Kabam’s IPO roadshow?

Free-to-play video game maker Kabam has some big fans (and backers), including Google Ventures. And it’s also reportedly readying an IPO. If true, no one could expect it to be valued anywhere near Pinterest—based on Pinterest’s zero revenue=high valuation formula.

Kabam is making too much money for its own good. In fact, it just raised its 2013 revenue forecast by about 8 percent, to USD 325 million, thanks to outperformance of games including “Dragons of Atlantis,” CEO Kevin Chou told Reuters.

Another record on Kickstarter—this time, its own

More than 5 million backers and 50,000 projects: Kickstarter is officially the world’s leading crowdfunding platform.

Of the more than USD 837 million total pledged to Kickstarter projects, USD 718 million has actually made its way from backers’ wallets to campaign owners (minus Kickstarter’s 5 percent cut, and another 3 percent to 5 percent for Amazon Payments’ credit card processing fees), according to a VentureBeat report. Next up: USD 1 billion in crowdfunded projects served.

The SEC’s new rule on crowdfunding should help, if you can get through its almost 600 pages.

The road from dried fruit and beef jerky to eyeglasses

Want to know what it takes to start an eyewear company that becomes an even bigger craze than the one Steve Martin founded in “The Jerk” that drove everyone crazy? Read this interview with Warby Parker co-CEO Neil Blumenthal in The New York Times.

If we didn’t end up with $99 designer eyewear, we might have wound up with $99 designer beer jerky. Slim Jim, you’ve been warned. It’s not just Oliver Peoples that can see his monopoly disrupted.

Read more: Death of the textbook, and the 50-pound bookbag

Ouya’s mea culpa

Gaming console upstart Ouya went quickly from darling to massive mess, and CEO Julie Uhrman has provided a video recitation of all the screw-ups.

“We have done a lot of things wrong. We’ve made a lot of mistakes, and I think one thing that’s really unique about us is that we’re going to continue to make them,” Uhrman said. Well, that should give Ouya backers confidence.

 Sharing economy docudrama

The companies of the sharing economy, from Airbnb to Uber, are among the most wanted capitalists in America. It’s probably never been a better time to be a regulator with time on your hands.

Yet the companies know they have to play by the rules once they get big enough—hence, the hiring of lobbyists, funding of studies showing the businesses’ positive economic influence and the making of movies.

Al Gore did his climate change film (which in a roundabout way was great marketing for every clean-tech company funded by his VC firm, Kleiner Perkins). Now, car-for-hire company Uber is the subject of a friendly documentary film, the Washington Post reports.

Read more: Edison’s light bulb has a longer life than you might think

About time Airbnb!

Speaking of playing the capitalist game the old-fashioned way, it’s one of the hallmarks of industry marketing to talk up the glow you cast over the economy and then throw out numbers to prove it. (One could literally drown in the ink spilled in recent years over how many millions of jobs and billions of dollars fracking will contribute.)

So it was time for Airbnb to put together a study highlighting its community’s positive economic impact in New York, where State Attorney General Eric Schneiderman has subpoenaed data on all 15,000 Airbnb hosts in a bitter legal battle.

By its own (paid survey firm’s) count, Airbnb has generated USD 632 million in economic activity in New York City in one year and supported 4,580 jobs throughout all five boroughs. Nearly 90 percent of Airbnb hosts rent their residence and use the income to help their families get by.

Airbnb guests spend more time and money in New York than typical tourists do. No word if the study counted the sale of illegal drugs like Molly at wild parties hosted in apartments rented by reckless kids or donations from the real estate and hotel lobby generated to Scheiderman’s re-election campaign .

Hacking pays

Cyberattack start-up Bromium has doubled its total funding with a round this past week that raised USD 40 million. Led by Meritech Capital Partners, it brought total funding to USD 75.7 million.

Bromium’s pitch is that fighting malware with traditional fire is a losing battle: It’s already won, and the only way to wage and win a new war against cyberattackers is to isolate viruses rather than try to keep them out entirely.

—By Eric Rosenbaum, 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

Biz confidence booms, hiring returns: CFO Council survey

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

Listen to the Article (6 Minutes)

Five years after the global financial crisis, chief financial officers from around the globe see economic growth improving over the next six months and are looking to expand their companies’ workforce, according to a new survey.

CNBC asked 33 chief financial officers (CFO) from Europe and Asia who make up the CNBC CFO council what their assessment was of global economic growth.

 The overwhelming majority of respondents—65 percent—see the global economy modestly improving over the next six months, with 4 percent seeing it “strongly improving” over the same period. When asked to rank the health of certain business conditions, most CFOs said stock market valuations were “modestly high” and 48 percent said credit availability was high.

Read More: CNBC expands the Global CFO Council

The survey – conducted between October 21 and 23 – includes CFOs from companies such as Unilever and Lenovo. It also showed that employment figures could be about to get a boost. Over half of respondents said that they were looking to hire new workers over the next six months, compared with just 4 percent saying they planned to lay off staff, and 40 percent predicting no change.

 The results are in line with optimistic calls from the International Monetary Fund (IMF). In October, the international body held its growth estimate for developed countries — including the euro area, the US, UK, Japan and Canada — at 1.2 percent in 2013 and 2.0 percent in 2014.

However, the BRIC countries — the acronym coined in 2001 for the then-fast-growing economies of Brazil, Russia, India and China — suffered some of the largest growth downgrades by the IMF. It cut its 2013 outlook for each of Russia, India and China, and its 2014 forecast for all four BRIC nations. It now expects global growth of 2.9 percent this year, a cut of 0.3 percentage points from July’s estimate, and attributed the cut to weakness in emerging economies.

Read More: IMF cuts growth forecast for emerging world

CNBC’s CFO Council survey reflected these concerns over emerging markets. Over 80 percent of respondents had fears over slowing growth to some degree. Just 9 percent indicated that they were unconcerned. When asked about macroeconomic issues, emerging market slowdown and China’s slowing growth received a significant degree of concerned responses.

Read More: Global CFO Council: DC policy not affecting us

 China’s economy grew 7.8 percent (year-on-year), according to official data on October 18, its fastest pace this year, but signs already point to the pickup being short lived with an unexpected fall in exports in September, weak factory output and retail sales figures suggesting gross domestic product might see a dip again in the fourth quarter.

Aside from fears of slowing growth, another macroeconomic issue that CFOs feared was the threat of cyber attacks. Out of ten possible fears for companies, cyber attacks received the greatest amount of “highly worried” responses.

CNBC.com’s Matt Clinch. Follow him on Twitter@mattclinch81

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