Christmas taper talk picking up steam

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

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Even with spotty economic data, the unofficial odds are rising that the Fed will announce plans at its December meeting to taper its bond-buying program.

But a number of Fed watchers still believe it’s more likely the Fed will take action to cut the USD 85 billion a month in asset purchases in January or March. Bond yields have been rising on the possibility, and stocks have floundered this week.

Wednesday’s stronger-than-expected ADP report showed that private sector hiring rose in November at the highest rate in a year. That, in turn, gave rise to speculation that the government jobs report on Friday will also be better than expected. ADP said 215,000 new jobs had been added to private sector payrolls, well above the 170,000 expected.

Economists look for 180,000 nonfarm payrolls in November and an unemployment rate of 7.2 percent, according to Reuters. That compares with October’s surprise gain of 204,000 jobs and bump in the unemployment rate to 7.3 percent.

“The more that strong data comes in the probability goes up [for Fed tapering], but it’s unlikely it will go above 50 percent” for December, said Pimco strategist Tony Crescenzi. “The Fed has not paved the way yet. It hasn’t prepared markets, so it will probably take a bit more time. Stronger data rolling in are fresh, and the Fed doesn’t react to short-term spates of data. It reacts to cumulative data. It doesn’t alter the chances for December, but it does keep in place January and February, and reinforces the probability that have been assigned to those months.”

Mesirow Financial economist Diane Swonk said she sees about a 45 percent chance that the Fed will act in December.

“I think what financial markets have really underestimated is how much the Fed would like to pivot,” Swonk said. “The question is are financial markets ready for it or not.” She said the Fed has an opportunity to use its December meeting statement to clarify its message on wind down the quantitative easing program, while also emphasizing that it plans to keep short-term rates near zero for a long time.

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“The bloodshed is not going to be what it was. Markets have been through this dance before. The markets need to focus on how good is this retail season. The economy is still not that great,” Swonk said, adding that many carry trades were unwound during the summer.

Markets had been primed for the Fed to announce a pullback in bond purchases in September, but it held off and said it was concerned about the economy and possible fiscal headwinds. But now that the jobs numbers appear to be on positive trajectory and the risks of another fiscal disruption have decreased, traders expect to see the Fed move within the next few months. But the actual timing is a mystery, and street expectations have shifted.

Ahead of the September meeting, bond yields rose, with the 10-year briefly touching 3 percent. Yields have been rising this week, as some data surprised positively, and the 10-year reached 2.85 percent Wednesday, the highest level since Sept. 18. The ISM manufacturing survey Monday was stronger than expected. However, the survey Wednesday showed a surprise slowdown in services sector activity and employment expanding at a lower rate.

Bespoke’s Economic Indicator Diffusion Index shows that more economic indicators are coming in ahead of estimates than there had been in recent weeks, but the index is still weighed down by more misses and hasn’t been positive since Sept. 12.

Read more: US economic data: confusing, but focus on jobs

Traders will be focused on Thursday’s data, which include weekly jobless claims and third-quarter GDP at 8:30 a.m. ET. GDP is expected to be up 3.2 percent, after a first reading showed it gained 2.8 percent. Factory orders are at 10 a.m., and chain stores report on November sales during the morning.

Swonk expects third-quarter growth to come in at about 3.3 percent but said the Fed will look past the headline number.

“The current quarter looks around 1 percent,” she said. “They’re looking at the fact that it was driven by inventories and not the right way to get there. … We slowed down over the summer on demand and that’s what the Fed cares the most about. It’s a complex decision they’ve got to make.”

Stocks Wednesday were mixed with the Dow and S&P 500 lower, and Nasdaq less than a point higher at 4,038. Reports about a budget deal in Washington propped up stocks midday, but they sunk later. The Dow finished off its lows at 15,889, down 24. The S&P was down 2 at 1,792.

A budget deal in Washington would slightly tip the odds in favor of earlier tapering, since traders still see budget feuding as a point of concern for the Fed. The continuing resolution to fund the government runs out Jan. 15 and budget conferees are hoping to have a proposal by the end of next week.

David Ader, chief Treasury strategist at CRT Capital, said a big jobs number on Friday could get the Fed to act in December.

“I’m leaning toward 200,000-plus nonfarm payrolls,” he said. “I’d say the odds are 75 percent for an announcement of a tapering to begin in January. I think it would be very modest. I think the Fed is concerned about it.”

If the employment report hits the consensus number and comes in at about 180,000, Ader said, it would be ambiguous and not clear what the Fed would do.

Read more: Don’t worry about 2014 tapering: Pro

Swonk said the Fed is concerned about the impact its withdrawal would have on the mortgage market, but also about continuing the program for too long as the Treasury issues fewer bonds and the Fed buys up the available mortgages.

She expects to see about 160,000 nonfarm payrolls for November.

“If they get 250,000, slam dunk, they are going to do tapering,” Swonk said. “If we get 200,000, there’s a 55 percent chance they don’t” move in December.

—By CNBC’s Patti Domm. Follow here on Twitter@pattidomm

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Forget the Christmas party, employees want cash instead

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

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Companies planning to splash out on Christmas parties for their hard-working staff shouldn’t bother, according to new research, as most employees would prefer the cash instead.

Some 71 percent of workers in the UK would rather have the money their employer spends per-head than a party, research by life and pension group Metlife found. And perhaps surprisingly, even 65 percent of younger workers, aged between 18-24, would opt for a pay-out over an end-of-year bash.

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This reluctance to party might be down to the fact that many workers are forced to take time off over the Christmas season, Metlife said.

A third of employees based in the UK said they have to take holiday over Christmas and New Year because their organization closes, with that number rising to 50 percent in the case of small and medium sized enterprises (SMEs), according to a poll conducted by Consumer Intelligence.

“Christmas parties can be great for morale and rewarding staff for their hard work throughout the year but it does seem as if most staff would rather just have the money,” said Tom Gaynor, employee benefits director at MetLife UK

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“In any case, bonuses or cash payments have to be taxed, while employers can spend up to £150 ($245) a head on Christmas parties without employees having to pay tax. Workers probably are better off enjoying the party.”

Nearly six out of British 10 workers will enjoy a Christmas party this year, the research found, with employees based in London the most likely to have a festive do.

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‘Universal’ frustration with India reforms: Hero CEO

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

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Indians are frustrated by the slow pace of government reforms aimed at reigniting the country`s previously stellar growth, said the head of India`s Hero MotoCorp, the world`s largest motorcycle manufacturer.

India`s growth has disappointed for several quarters, with growth decelerating from above-9 percent in 2010 to as low as 4.4 percent in the second quarter 2013 – lagging far behind economic rival China , which has maintained growth rates above 7 percent this year.

Last Friday, official numbers showed India`s economy grew by 4.8 percent in the third quarter year-on-year.

“The frustration with the pace of reforms is somewhat universal. It is not just with me alone. It is upsetting when you can see that things need to be done, and don`t get done,” said Sunil Kant Munjal, the Indian chief executive of New Delhi-based Hero MotoCorp.

In particular, efforts to reignite the Indian economy have been hampered by low investment and bureaucratic bars to launching and sustaining much-needed infrastructure projects.

The slow pace of reforms has also been cited by analysts as one reason why Indian assets were particularly hard hit by the turmoil that swept through emerging markets earlier this year amid worries about a scaling back of US monetary stimulus.

Against that backdrop the rupee hit a record low against the US dollar in August.

“It would take significant structural reforms to elevate Indian growth back to the 8 or 9 percent level and that there is no sign that is going to happen any time soon. One of the big problems is the inability to get large investment projects off the ground,” said Mark Williams, the chief Asia economist at Capital Economics, after the latest growth numbers were published.

“Across the country, projects have stalled or haven`t got approval to even start. So something has to be done to clear that backlog,” he said.

Investors in India have also been deterred by concerns about its fractured political landscape, particularly in the run-up to its national election in May 2014.

Munjal said that the current government, led by the center-left Indian National Congress, had increased the pace of reforms over the last year, but that this would likely fall-off as the election neared.

“To be fair to the government, while they were slow for a number of years, in the last year or so they have picked up the pace a bit more… I expect the focus on industry and the economy to tail-off as the election comes nearer,” he said.

-By CNBC`s Katy Barnato

Copyright 2011 cnbc.com

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Will strong US jobs data hasten the taper?

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

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ADP’s private sector payrolls report will be watched Wednesday as the warm-up act for Friday’s important government jobs report.

ADP kicks off what is a heavy calendar of data, which could add to volatility Wednesday. There are 173,000 private sector jobs expected, up from ADP’s report of 130,000 for October.

Stocks sold off Tuesday, with the Dow and S&P 500 lower for a third session, amid speculation that stronger data will encourage the Fed to pare back its bond-buying program sooner than expected. The Dow was off 94, at 15,914, and the S&P 500 was down 5, at 1,795. The 10-year Treasury was at 2.78 percent in afternoon trading, off its earlier highs.

The ADP report, at 8:15 a.m. ET, will be followed by international trade data at 8:30 a.m. New home sales and ISM nonmanufacturing data are at 10 a.m. The Fed’s Beige book on the economy is released at 2 p.m.

Read more: Nervous investors need to embrace the selloff

The ADP number is not viewed as an accurate reflection of the government’s monthly report but as a guide.

“It’s had an average miss of 41,000,” said John Briggs, head of cross-asset strategy at RBS. But, he added, economists’ consensus estimate has missed the monthly nonfarm payroll number by slightly more.

While always important, the government jobs report is even more sensitive for markets this month as it is the last big key piece of data the Fed will have before it meets Dec. 17 and 18. While most Fed watchers expect no action to taper bond purchases at that meeting, the odds increase if the nonfarm payrolls are stronger than expected.

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According to Reuters, the November jobs report is expected to show a rise of 180,000 nonfarm payrolls and a slightly lower unemployment rate of 7.2 percent. October’s 204,000 jobs was a surprise, as were the revisions to August and September reports.

Read more: Insiders favor selling as market hits new highs

“I think markets are going to be on the defensive into the number,” Briggs said. “Expectations are only calling about 30 percent for a December taper. The risk is that [the jobs report] moves it. Generally a little bit higher yields make sense to me.”

He expects the bond market to stay choppy ahead of the Fed meeting.

“Risk appetites are low,” Briggs said. “It’s been a tough year for many fixed-income investors.”

One fixed-income market that’s had its share of selling is municipal bonds. The Detroit bankruptcy and other troubled credits, such as Puerto Rico, have roiled the market. It had a muted reaction to a federal judge’s ruling Tuesday, formally declaring Detroit bankrupt.

Read more: Detroit eligible for bankruptcy protection: Judge

 Muni experts say the credit concerns and expectations for Fed’s taper have combined to drive outflows from bond funds.

Read more: Gross: Fed will keep rates low until at least 2016

“I see it as credit positive in a perverse way,” said John Donovan of Drexel Hamilton. “Today is maybe the first step in saying cities and municipalities can go into Chapter 9 bankruptcy and can use a restructuring process to take care of their problems.”

It also cleared the way for governments in Michigan to cut pensions if necessary, he added.

Municipal bonds have traded better recently. Donovan said the MMD ratio, which reflects the yield of the 10-year high-grade muni versus the 10-year Treasury, reached 110 percent in September.

“That was due to mutual fund outflows, as a result of both credits” and concerns about tapering, he said

That ratio is now a more normal 96 percent—still cheap historically.

Blake Anderson, muni strategist at Mesirow Financial, said the way the media covers stories like the Detroit bankruptcy also influences market psychology, but the Fed is a big factor.

“The taper fears have tempered the public’s appetite for long-duration bonds, and the credit story just adds anxiety,” he said.

What else to watch

There is an OPEC meeting in Vienna on Wednesday, which is not expected to result in any change in production, though some members would like to see cutbacks.

Oil prices rose Tuesday after reports of the January opening of TransCanada’s Keystone Gulf Coast pipeline, which will move crude from Cushing, Okla., to Port Arthur, Texas. West Texas Intermediate climbed 2.4 percent, to $96.04 a barrel.

Crude supplies in Cushing are at their highest level since July, or 40.6 million barrels as of Nov. 22. In addition to the OPEC meeting, EIA oil and gasoline inventory data come out at 10:30 a.m. ET.

—By CNBC’s Patti Domm. Follow here on Twitter@pattidomm

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

BOJ talk spices up Japan markets

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

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Talk of further monetary stimulus from the Bank of Japan helped push the yen to a six-month low and lifted the Nikkei  to a six-month high on Tuesday, and the move in Japanese assets may have further to run, analysts say.

Comments made by Bank of Japan (BOJ) governor Haruhiko Kuroda on Monday fueled speculation of further easing, after he told participants at a conference “we are ready to adjust monetary policy without hesitation if risks materialize.”

The dollar-yen hit a six-month high of 103.37 per dollar in Asia on Tuesday, while stocks powered to their highest level since 2007 to close at 15,749 on Tuesday. Better-than-expected US economic data increased expectations of a near-term tapering of the Federal Reserve`s asset-purchase program also helping to boost the dollar-yen.

Japan`s domestic currency and its stock market are closely correlated as a weaker currency is good news for the nation`s exporters.

Analysts said easing expectations could be realized in the next six months.

“The BOJ will have to act when demand and prices are weakening again. Both domestic demand and price trends have likely reached a plateau, so any deterioration of business conditions, either during the tax hike next spring or in the international environment, will trigger further quantitative easing by the BOJ,” said Martin Schulz, a senior economist with the Fujitsu Research Institute, adding that he expected the bank to expand its stimulus program in May.

Meanwhile technical analysts told CNBC they also saw Japan`s stock market powering higher.

“The Nikkei is going to be heading north quite strongly,” technical analyst Ray Barros, CEO of Ray Barros Trading Group told CNBC. “We`ve just taken out the upside resistance level of 15,000. If we can take that out I`d be looking for 17,000,” he added.

However, other analysts said they were less convinced that the Nikkei`s recent winning streak was here to stay.

Mark Konyn, CEO of Cathay Conning Asset Management, told CNBC Asia`s Cash Flow he expected the momentum behind Japanese stocks to continue in the short term, but in the absence of a real improvement in inflation expectations, future gains would likely be limited.

“In the short term there is probably further to run particularly with a weaker yen and slightly improving numbers on the inflation front, but beyond that we are going to need to see a real adjustment in terms of inflation expectations which we haven`t seen yet,” said Konyn.

Japan`s financial markets have seen a turnaround this year, ever since Prime Minister Shinzo Abe launched his ambitious late last year to haul the economy out of an over a decade long period of deflation. His plan, which involves aggressive easing, fiscal stimulus and structural reform has helped power stocks over 51 percent higher year-to-date, while the yen has weakened around 19 percent against the dollar.

But Konyn added that investors needed to remember that the Bank of Japan did not have limitless means to prop up the economy.

“We`re going to need to see wage inflation over the next six months, because if you look at the Bank of Japan and its ability to keep on expanding its balance sheet, it`s going to run out of powder within the next six to seven months before it reaches limits where it isn`t able to go any further, so we really need to see those expectations change,” he added.

Meanwhile David Roche, global strategist at Independent Strategy, also told CNBC he was also concerned about Abenomics working out in the long term.

“It [Abenomics] will run out of steam by next May because it won`t deliver on supply side reforms,” he said.

“Without the market reforms, there is no miracle in Japan and the market will wake up to this when the consumer has finished spending ahead of the consumer tax price increase in May and then the whole thing will fall back,” he added, referring to the upcoming hike in sales tax to 8 percent from 5 percent scheduled for April.

– 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

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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

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World’s most big-hearted nation: The United States

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

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The United States is the world`s most generous nation, according to a global index of giving, as a higher proportion of Americans helped a stranger than any other country in the world.

The 2013 World Giving Index – published annually by international nonprofit organization Charities Aid Foundation – looks at three measures: monetary giving, volunteering and helping of strangers in a typical month. The survey, published on Tuesday, was carried out in 2012 across 135 countries.

The US made a significant improvement in charitable behavior, rising to the top position from fifth place last year.

Meanwhile, three countries tied for second place this year: Canada, Myanmar, and New Zealand. Australia, which was the highest-ranked nation in both the 2010 and 2012 reports, dropped to the seventh position.

Rounding out the bottom of the World Giving Index was Greece, reflecting the sluggish economic recovery in the indebted euro zone nation.

Overall, the index found that the world had become a more generous place, with the percentage of people donating money, volunteering time, and helping a stranger growing in 2012 compared with 2011.

The average proportion of people helping strangers across the countries surveyed in 2012 was 47 percent, up 2.4 percentage points from 2011.

The next highest increase was in volunteering time, up 1.4 percentage points, at 19.7 percent.

And finally, the number of people donating money was 28.5 percent, an increase of 1.3 percentage points.

While levels of giving remain below those recorded five years ago, emerging economies are surging ahead in charitable donations. In India, for example, 244 million people give money to charity in a typical month, up from 163 million in the previous year.

According to the survey findings, there are gender differences when it comes to giving patterns.

Women are more likely to donate money to charity than men – a global trend that has been in place since 2008. This comes despite a reported worsening of the imbalance between men and women in terms of global employment.

On average, 28.7 percent of women globally give to charity in a typical month, 0.9 percentage points ahead of the equivalent figure for men.

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

Copyright 2011 cnbc.com

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

Can Japan’s answer to WhatsApp take on the world?

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

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Free messaging service Line has taken Japan by storm over the past few years, but can the company, which is posing a very real threat to the hugely popular WhatsApp, continue to expand at such a rapid pace?

Last week, Line, a subsidiary of South Korea`s Naver Corp, reported its global user base had surged to 300 million, up from 150 million in April, and only 50 million users behind WhatsApp.

Fans say the app`s cutesy stickers, often depicting baby animals and oversized emoticons, together with its games, are central to its appeal.

According to 30-year old Hiroko Yamakawa, who lives in Tokyo, everyone she knows in Japan is using the app, even her parents.

“I use it so much and it has now become essential to my daily life. I use this tool to communicate with my friends, family, colleagues… everyone,” she said.

“I like it because the stickers are so good they express different emotions precisely, and it has sense of humor. I even sometimes only use the stickers to express my feelings,” she added.

Line says 80 percent of its users are now based outside of Japan where it has 50 million users. In Southeast Asia it`s already popular in Thailand, the Philippines, Indonesia and India. The company has also ventured into Western Europe and Turkey, and is popular in Hispanic countries including Spain and Mexico.

However, its user base is still outnumbered by WhatsApp in many countries. For instance, Line has 13 million users in India, in contrast to WhatsApp`s 25 million, but it claims to have gained its 10 million in just three months, a statistic likely to the nerves of its competitors.

Its exponential rate of growth is astonishing. It took the firm 19 months to generate 100 million users, but it added another 100 in the next six months after that, and another 100 million again over the following four months, Line said.

There is no doubt that Line has enjoyed huge success in Japan and other global markets, but analysts told CNBC the firm could face challenges moving into markets where its brand presence is not as strong as its competitors.

“The main risk [to Line] is through the competition, from a growth perspective,” Jiong Shao, regional head of internet research, at Macquarie Securities, told CNBC.

“If you are dominant in Japan, fine, but in order to grow further you may have to go to the Middle East or Indonesia. In these types of markets you are competing with either the entrenched guys or the other players,” he said.

Gaining traction in a market where the brand is relatively unknown can be an issue for free messaging service providers, as they rely so heavily on `word-of-mouth,` analysts told CNBC.

Neo Sijin, a 23-year old student from Singapore, told CNBC she had downloaded Line but never ended up using it.

“I was attracted to Line because they had really cool stickers, and like Twitter, it allows you to update your statuses. But I soon got bored of it because I realized that no one uses Line and everyone is on WhatsApp,” she said.

Macquarie`s Shao said breaking into completely new markets could prove a challenge for Line, though he noted that it would be a challenge for every player in the space.

“If you don`t compete as well, for whatever reason – it could be that you are not spending as much marketing dollars or you are not targeting the right users – that`s the risk from the growth forecast perspective. All the new competitors want these same markets just as badly as Line does,” he added.

But Shao pointed out that free messaging providers like Line and China`s WeChat have an edge over WhatsApp because their strategies have more room for growth from a monetization standpoint.

Line makes most of its money through selling its stickers and games, earning around  USD 10 million a month from sticker sales, while WhatsApp`s main source of revenue is derived from its initial one-off charge to download the application.

“Line and WeChat and all these other players have formed a new path to prosperity. They have used the messaging as the glue and have built that out into a social network. Now Line makes most its money from games and who know what`s next?” he added.

Line reported third-quarter gross revenue of  USD 165 million, up 50 percent on the previous quarter. The company is rumored to be considering an IPO worth $10 billion, but the rumors have not been confirmed, Reuters reported last month.

–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

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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

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

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

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

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

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”

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