Which countries are the most and least corrupt?

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

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The bloody civil war in Syria is having yet another impact: The nation is now considered one of the most corrupt in the world, according to newly released data from the anti-corruption group Transparency International.

The organization`s annual “Corruption Perceptions Index,” first published in 1995, is one of the most closely watched barometers of the issue. The group surveyed experts on public sector corruption in 177 countries, grading each nation on a scale of zero to 100, with zero being “highly corrupt” and 100 being “very clean.”

Syria has never been considered particularly virtuous, but growing attention to the business dealings of President Bashar al-Assad and his associates helped its score plunge to 17 from 26 in 2012. The country now ranks near the bottom-tied with Turkmenistan and Uzbekistan for 168th place. It ranked 144th last year. 

But no nation has a monopoly on corruption, according to the study, which found that 70 percent of the countries scored 50 or below.

“The `Corruption Perceptions Index 2013` demonstrates that all countries still face the threat of corruption at all levels of government, from the issuing of local permits to the enforcement of laws and regulations,” Huguette Labelle, chair of Transparency International, said in a statement.

America`s ranking

The US turned in a mediocre performance, according to the study. The world`s largest economy scored 73 in this year`s index-identical to last year-which puts it in a tie with Uruguay for 19th place. Canada, Germany, Great Britain and Japan are among countries considered cleaner than the United States.

Transparency International and others have criticized the US for relatively lax controls on money laundering. Other issues considered include campaign finance and government contracting. The US has never finished higher than 14th (in 2000) and has come in as low as 24th (2011), though the organization says year-to-year comparisons can be misleading because of changes in methodology.

This year`s least-corrupt countries are Denmark and New Zealand, which both scored 91. The most corrupt are Afghanistan, North Korea and Somalia, each scoring a mere 8 out of 100 points.

Russia matched last year`s score of 28 points, finishing in a nine-way tie for 127th place. China improved by one point, for a score of 40, tying with Greece for 80th place.

That score is a marked improvement from a year ago, when Greece was in the depths of a financial crisis. The resulting reforms may have helped boost last year`s score of 36 points, but it is still perceived to be the most corrupt country in the euro zone, the study said.

Global corruption

An alarming number of countries worldwide are infected with toxic levels of corruption, with more than two-thirds of the 177 nations included having unacceptably high levels of “abuse of power, secret dealings and bribery,” according to a press release issued by Transparency International.

However, even top-performing nations struggle with undue influence exerted over government via backroom deals, campaign financing and awarding of government contracts.

Double-dealing, bribery and other forms of misconduct affect all categories and levels of government, ranging from a local municipal office issuing permits to a national government agency charged with enforcing laws and regulations. Controlling corruption in policing, justice systems and the activities of political parties is especially important, according to a press release that accompanied the results.

The index is based on data collected over the past two years by 13 different entities, including the Economist Intelligence Unit, the World Bank, and World Economic Forum. It rates each country examined on a scale from 0 (highly corrupt) to 100 (“very clean”).

Any rating below 50 is considered more corrupt than clean.

Five European Union member states earned scores below 50, including Italy, Greece, Romania, Slovakia and the Czech Republic.

Notwithstanding the occasional crack-smoking mayor, Canada also outranks the US with a score of 81.

Countries that improved their standings on the index this year include Myanmar, Brunei, Lesotho, Senegal, Nepal, Estonia and Latvia.

Others that have lost ground this year include high-ranking Australia, Slovenia and Iceland, as well as Spain, the Gambia, Guinea-Bissau, Libya, Mali, Eritrea, Mauritius, Yemen, Guatemala, Madagascar and Congo Republic.

The index, of course, is not without its limitations. It measures only about half of the 322 countries around the globe and focuses only on corruption in the public sector (government agencies, justice system, etc.).

Transparency International warns that countries ranking at the bottom of the index are not necessarily the most corrupt societies overall.

“Corruption remains notoriously difficult to investigate and prosecute,” and will likely stymie efforts to tackle international scourges such as extreme poverty, climate change, and economic crisis, Transparency International said in a press release.

The group calls on international bodies such as the G20 to “crack down on money laundering, make corporations more transparent and pursue the return of stolen assets.”

Copyright 2011 cnbc.com

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Meet ‘Bitcoin Jesus’, a virtual currency millionaire

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

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The astronomical rise in the value of bitcoin – which has surged more than 8000 percent over the course of 2013 – has created a new breed of digital currency multi-millionaires.

34-year-old Roger Ver began investing in bitcoins in early 2011 – and made his first million from the virtual currency that same year – which saw prices skyrocket from around USD 0.30 to USD 32.00 before settling at USD 2. He bought his first bitcoins at around USD 1.

(Read more: Bitcoin`s surge due to `excess liquidity`: Faber )

With prices currently hovering above USD 1,000, his virtual wealth has since exploded. Ver says he doesn`t feel “richer” but that his wealth is “much more liquid than it would be in a normal bank account.”

Ver is one of hundreds of investors that have struck it big with bitcoin. But his association with the virtual currency extends far beyond just owning it.

He has helped seed about a dozen different businesses involving bitcoin and actively promotes the currency, earning him the nickname “Bitcoin Jesus”.

“I believe Peter Vessenes [chairman of the Bitcoin Foundation] gave me the title when we were at a BBQ together. I was explaining bitcoin to about two dozen high school kids. The kids were all enthralled by bitcoin, and hanging on my every word,” he said.

(Read more: Bitcoin breaks $1,000 barrier for the first time )

“Peter then commented that `it`s like you are a Bitcoin Jesus, and you have all your disciples around you`,” he added.

His venture MemoryDealers.com, a website that sells discounted computer parts, became the first mainstream business to accept Bitcoins as payment. It`s also worth noting that it was through this business that he made his first million, in dollar terms, back in 2003.

Ver`s nickname is as colorful as his past. Born and raised in Silicon Valley, he moved to Tokyo, Japan in 2005 after serving 10 months in federal prison for selling a product called “Pest Control Report 2000” – which he described as a firecracker used by farmers to keep animals away from their cornfields – on eBay.

Before that, in 2000, he tried his hand in politics, running for California State Assembly as a Libertarian, but lost.

Bitcoins are “incredibly cheap”

Bitcoin`s meteoric rise in the recent weeks has led to concerns that it may be a speculative bubble, but Ver says this is not a concern for him.

At USD 1,000, Ver regards Bitcoin as “incredibly cheap”, noting that if it gains in popularity as he anticipates, each Bitcoin would be worth tens or hundreds of thousands of dollars.

“The rapid price rise is due to people with money starting to realize how important of an invention Bitcoin is,” he said.

“Bitcoin will experience many bubbles along its way to improving the lives of everyone on the planet. I`m not concerned with the short-term price fluctuations,” he added.

Ver, who currently uses Bitcoins to pay factories in China to produce electronics components for his company, says he plans to use them “to promote the ideas of Voluntaryism and economic freedom” in the future.

(Read more: Regulators see value in Bitcoin, and investors hasten to agree )

This past weekend, Ver made the largest-ever bitcoin-based charitable donation. Ver donated 1000 bitcoins (over USD 1 millions) to the Foundation for Economic Education – an American organization that promotes the principles of laissez-faire economics, private property, and limited government to students.

-By CNBC`s Ansuya Harjani; Follow her on Twitter @Ansuya_H

Copyright 2011 cnbc.com

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Get ready for 10 percent drop in 2014: Goldman

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

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Goldman Sachs’ chief US strategist, in an appearance Monday on CNBC, downplayed fears of a bubble in equities and the effect an expected drawdown of the Federal Reserve’s economic stimulus program would have on the financial markets.

Forecasting next year’s economic picture, David Kostin told CNBC that the S&P 500 could hit 1,900 by the end of 2014 and the economy will continue to improve, but investors should be prepared for a 10 percent correction during the same time frame.

“Generally speaking, earnings are rising and the economy is getting better, and that’s a positive backdrop,” Kostin said on “Squawk on the Street.” “The second issue is the probability of a drawdown. The market is now up almost 50 percent in 18 months with no 10 percent correction. It’s basically been a straight shot up.”

Read more: Goldman most upbeat on Japan, Europe stocks in 2014

Kostin told CNBC that he predicted the market had a 67 percent probability of a correction next year, based on quantitative analysis and simulations. He expected an increase in earnings per share, and that multiples will remain around 15 times earnings, saying they could jump to 16 times earnings.

Reiterating Goldman’s position that the Federal Reserve would begin to taper its massive asset-purchasing program in March 2014, Kostin said low interest rates in the years after the financial crisis of 2008 allowed companies to shore up debts.

“Most companies have refinanced their debt, they’ve extended their maturities,” Kostin said. “They’ve taken advantage of this very, very low, unprecedented low interest rates environment to optimize their debt profile. That’s an important issue.”

Read more: Goldman predicts steep losses for gold in 2014

Kostin also told investors to look toward companies that use capital for stock buybacks and dividends, pointing to aerospace and defense company Northrop Grumman as an example. Kostin predicts a 9 percent increase in overall capital spending by companies next year, he said.

“In general companies that buy back shares over time, that’s a positive indication,” Kostin said.

In July, Kostin told CNBC the markets remained fairly priced, and that the single best trade was to sell bonds and buy stocks, in particular dividend payers. He said the outlook through December was “likely to be a story of improving economic activity,” and forecast that the S&P 500 could hit 1,750 by the end of the year.

The index closed trading last week at 1,805.

Read more: Markets fairly priced, equities only place to be: Goldman

—By CNBC’s Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from “Squawk on the Street”

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China’s Nov factory activity sticks to steady pace: HSBC

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

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China’s manufacturing activity maintained its steady growth in November, a HSBC purchasing mangers’ index (PMI) released on Monday showed.

The final reading of the HSBC November PMI stood at 50.8, down a touch from 50.9 in October but better than a flash estimate of 50.4. A number above 50 is consistent with expansion in manufacturing activity while a number below this level indicates a contraction.

The final HSBC PMI reading comes just a day after China said its official PMI stood at 51.4 in November, unchanged from the previous month and above market expectations. Factory growth held at an 18-month high.

Read more: China’s new plan for growth—and less government

Recent economic news coming out of the world’s second biggest economy has defied expectations for a modest slowdown in the final months of the year.

“Our clients are going into 2014 much more optimistic,” Michael Klibaner, regional director and head of research, China at Jones Lang LaSalle, told CNBC after the release of the PMI data.

“The whole concern about the hard landing is off the table at this point, you don’t hear those words at all, which is such a big change from three or four months ago. I’m quite optimistic about 2014, we’re in a period of synchronized growth, from Japan to Europe to China,” he said.

Read more: China’s economic reforms: What you need to know

The HSBC PMI survey showed that a sub-index of new orders hit an eight-month high of 51.7 in November from 51.5 in October, although new export orders dipped to a three-month low.

— Follow us on Twitter:@CNBCWorld

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India’s GDP on Friday – here’s what to expect

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

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India’s economy appears to be stuck in neutral, with gross domestic product (GDP) growth forecast to remain below 5 percent for the fourth consecutive quarter in the July-September period.

GDP data, due out on November 29, is expected to show that Asia’s third largest economy grew 4.6 percent on year, according to a Reuters poll, following 4.4 percent growth in the previous three months.

“The appointment of a new central bank governor in September has helped to stabilize the currency and financial markets, although this is unlikely to have had much of an impact on real economic activity,” wrote economists at Moody’s Analytics – who forecast growth of 4.5 percent.

“The weight on confidence created by persistent inflation, the weak central government, a volatile rupee, and an uncertain policy environment continues to drag heavily on demand, particularly business investment. Little appears to have changed in the third quarter,” they added.

(Read more: India tops China as most attractive investment venue)

While the government set up the Cabinet Committee on Investment (CCI) to fast track clearances for large projects in January this year, approvals have yet to translate into actual activity on the ground.

On top of a subdued investment environment, a revival in inflationary pressures looks to have weighed on private consumption, said Radhika Rao, India economist at DBS.

“This along with the hurt to employment and income prospects on (the) weak industrial sector likely slowed consumption spending,” Rao, who also forecasts a 4.5 percent GDP print, said.

(Read more: Onion crisis leaves trail of tears across India)

Economists say the small pickup in growth was likely driven by better agricultural output on above-normal rainfall in the September quarter, sustained government spending, and buoyant exports.

Exports have been a bright spot for the economy in the recent months, jumping by 13.5 percent to USD 27.27 billion in October, for example, on the back of a recovery in global demand and depreciation of the rupee which boosts price competitiveness.

 Taimur Baig, chief Asia economist at Deutsche Bank, however, believes the positive drivers of the economy provided a greater boost to the growth than most anticipate.

“The growth figure could well be a pleasant surprise to the markets,” he said, forecasting GDP rose at a rate of 5.5 percent during the quarter – the best performance in a year.

“There has been a modest revival in the industrial and construction sectors, finance and trade look buoyant, and public spending has been robust lately. Add to this the impact from a good monsoon and high prices to agriculture sector activity and income,” he noted.

(Read more: India’s woes deepen as GDP misses expectations)

India’s economic performance has proved to be a major disappointment in recent times, with growth decelerating from above 9 percent in 2010 to as low as 4.4 percent in the April-June quarter – lagging far behind economic rival China, which has managed to maintain growth rates above 7 percent this year.

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

Greece’s emerging market status: Good news really?

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

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Greece formally lost its developed market status on Wednesday, with Greek equities moving into the MSCI Emerging Markets Index instead.

The move came after MSCI, a leading provider of equity indexes, said in June that the Greek index failed to meet criteria regarding securities borrowing and lending facilities, short selling and transferability.

It prompted fears that such a downgrade might drive away investors, but many analysts argue that the outlook for Greek stocks is now in fact a lot rosier.

Read more: Emerging Market Switch Could Boost Greek Stocks

“For the index-aware Developed Market investors, Greece has certainly been off the radar; it’s been a small part of a large universe. There will certainly be more attention on this market now as a bigger part of what is however a smaller universe,” Matthew Beesley, head of global equities at Henderson Global Investors told CNBC.

“Furthermore, for Emerging Markets managers, given some of the budget-deficit induced macro problems across their universe, Greece at least presents a different set of challenges”, he said.

The MSCI Greece included just two companies: telecoms giant Hellenic Telecommunications (OTE), and OPAP, the recently privatized Greek gambling company, the biggest one in Europe.

With the move to emerging markets, more companies have gained access to the index. It will now comprise of ten stocks: Alpha Bank, Follie Follie, Hellenic Petroleum, Jumbo, National Bank of Greece (NBG), OPAP, OTE, Piraeus Bank,PPC & Titan Cement. The weighting of the index thus changed from 0.02 in the developed markets pool to 0.4 in the emerging market index.

This is the first time that the MSCI has downgraded a country from developed to emerging. In its annual market reclassification review, the MSCI checks criteria like economic development, size and liquidity, and market accessibility.

Greek stocks have been hit hard by the euro zone’s debt crisis. The benchmark ASE lost fell 51.8 percent in 2011, and although it picked up in 2012, foreign investment inflows remained negative. In 2013 – with positive inflows – the ASE index is up 31.9 percent to date.

Read more: From Developed Back to Emerging: Greece’s Full Circle

This year marks the return of net capital inflows from foreign investors; they had reached 1.9 billion euros (USD 2.57 billion) by the end of October.

“Investor confidence in Greece has grown. In October 71.69 percent of buys in terms of transaction value came from foreign investors. The average daily trading value reached 147 million euros during the current quarter (as of beginning of October). And 40 percent of the activity comes from banking stocks, which shows how interest in Greek banks has returned after the successful recapitalization program,” Socrates Lazaridis, Chairman of the Athens Exchange and CEO of the Hellenic Exchanges Group said.

“The move to the emerging markets index has also increased foreign investors’ interest and that is evident from the increase in visits to Greece from different funds to find out more about certain companies”, he said.

Greece is in its sixth year of recession and is burdened with 240 billion euros in loans from the so-called Troika; the European Commission, the European Central Bank and the International Monetary Fund.

Unemployment in Greece has reached a record high of 25 percent, but other economic data has improved and an exit from the euro remains “unthinkable” for now, writes Michael Harris, an equity strategist at BofA Merrill Lynch, in a report.

Read more: Greece’s Recovery Coming – But at a Cost

He says these improvements have been embodied by the recent Greek stock rally. “The index move has helped at the margin as plenty of GEM (Global Emerging Markets) investors are revisiting Greece, but as Greece is very small in GEM they would unlikely be doing so, were it not for a sense of Europe is improving and hope the worst is near over for Greece”, he told CNBC.

The government last week submitted its 2014 budget and is hoping to achieve 0.6 growth in 2014 and a primary surplus of 1.6 percent of GDP, even though unemployment is expected to remain at all-time highs at 24.5 percent.

“The fiscal correction is progressing and a primary surplus is possible in 2013,” wrote Deutsche Bank analysts in a report.

But “a gap in funding over the next few years needs to be addressed,” they wrote. The Greek government has still not come to an agreement with its foreign lenders of how to plug this gap. A funding shortfall that has emerged for the second half of 2014 and disagreement over how much this will be had the Troika leave Greece last week to return to Athens in early December for further negotiations.

Read more: Greek government prepares for another storm

Follow us on Twitter:@CNBCWorld and follow Nefeli on @nefeliagk

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Is the Fed trying to ‘fool’ the bond market?

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

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A sharp rise in US Treasury yields should act as a reminder to the Federal Reserve not to ignore developments in the bond market as it deliberates when to pull back its hefty monetary stimulus, one market analyst told CNBC.

The yield on the benchmark 10-year Treasury is trading around 2.71 percent, up about 20 basis points from where it was a month ago.

Read more: Where are Treasurys going? Just watch gold

“Putting aside what the Fed wants to do, the bond markets have tightened for them [policymakers],” said Peter Boockvar, chief market analyst at The Lindsey Group, a Washington-based economic advisory firm.

“Interest rates are up dramatically in the US, off the early summer lows, and that’s something that the Fed shouldn’t ignore. It fooled the bond market once in early September when it did not taper,” Boockvar told CNBC Asia’s “Squawk Box.”

“It will be very interesting to see how they treat the bond market in the next couple of meetings since we are at 2.70 percent in the 10-year [Treasury],” he said.

Many economists expect the Fed to start unwinding its USD 85 billion-a-month bond buying program in the first quarter of next year in response to signs of strength in the US economy.

Read more: Fickle Fed: Taper could arrive in ‘coming months’

Bond yields have been rising since early May in anticipation of the Fed tapering. The concern about yields rising too quickly is that they could derail a recovery in the housing market, and in turn the economy, since yields on Treasurys affect the interest rates on fixed-rate mortgages, analysts say.

“What we have is still a fragile economy where consumption and investment are still not seen as strong enough to drive growth, so there is a feeling that the Fed has to continue to support growth,” said Timothy Riddell, head of global markets research for Asia at ANZ Bank in Singapore.

Indeed, the move in the Treasury markets in recent months has raised some concerns about bond yields rising too fast, too soon.

CNBC host and former hedge fund manager Jim Cramer said in June that the sharp rise in Treasury yields was a sign that the Fed had “lost control” of the bond market.

Read more: Cramer: Bernanke`s Fed has lost control of the bond market

“We saw 2.80 percent [on 10-year yields] just last week, so we could easily see that in a matter of days if we get a good number on the jobs data, so next week is a really important week,” Boockvar said, referring to the release of the key monthly U.S. jobs report next Friday.

Riddell at ANZ Bank said the rise in Treasury yields was contained and reflected a move back from low levels when markets were braced for a period of weak growth and no inflation. The yield on 10-year bonds fell to a record low around 1.38 percent in July 2012.

“We’re looking at yields pushing up towards the 3-3.5 percent level over the course of the year, which I would say is a controlled rise in long-term yields,” he said.

“It`s a natural response that once the healing process [of the economy] becomes embedded, yields rise, markets have to expect that,” Riddell added.

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

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Shoppers beware – the 12 scams of Christmas

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

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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

China’s reform drive threatens to derail yuan

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

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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