GE partners with AT&T, Cisco, Intel for Industrial Internet

General Electric Co announced partnerships with AT&T Inc, Cisco Systems Inc and Intel Corp to expand its 'Industrial Internet' service that allows its customers to analyze data and predict outcomes.

The service helps customers analyze industrial 'big data'- data so large that it is difficult to process using traditional database and software. This would help customers minimize downtime, increase productivity, lower fuel costs and reduce emissions.

By connecting machines to the network and the cloud, workers can track, monitor, and operate GE's machinery wirelessly from anywhere through secure and machine-to-machine communications, GE Software's Corporate Officer Bill Ruh said.

According to technology research group Wikibon, industrial data is expected to grow at two times the rate of any other big data segment over the next decade.

Source: Reuters

John Romanishin, Daniela Rus, and Kyle Gilpin MIT’S M-BLOCKS: A NEW CLASS OF ROBOT CUBES THAT SELF ASSEMBLE

By building simple, independent modules that can separate and recombine at will, you can design a robot of flexible functionality. Such modular robots have been around for a long time. Indeed, we’ve covered plenty in the past. But none are as simple as MIT’s M-Blocks, and it’s that simplicity that’s got folks excited.

The first thing you’ll notice about M-Blocks is how they move. All locomotion is self-contained—there are no external moving parts. Each block contains a 20,000 RPM flywheel which imparts angular momentum to each cube. They can move across the floor, roll over each other, and even leap about like a Mexican jumping bean.

The result is a system of discrete components capable of joining together to form a shape and then breaking apart and reassembling into another shape.

M-Blocks are distinct from other modular robots because, instead of being in control throughout the assembly process, there are moments of chaos, where the blocks’ location isn’t precisely regulated. That would be a problem for self-assembling robots that require certain external components to match up perfectly to unite.

What makes this chaos acceptable in M-Blocks? Magnets. When they are close to one another, the magnets on the cubes’ edges passively align their poles and straighten the cube, allowing the face magnets to snap together.

Because there is no special orientation required—for connectors to meet up, for example—any side will do.

These edge magnets also allow the cubes to pivot around each other. Because the magnets are chamfered, the magnets touch when they pivot, and the bond is strengthened.

In the future, the team envisions equipping special blocks with more horsepower to pull weaker blocks along or battery packs for extra juice. Eventually, some blocks might carry cameras, lights, or grippers to maneuver objects or handle tools. At the current scale, the team thinks advanced versions of M-Blocks might be used to repair infrastructure, build and reconfigure scaffolding, or assemble furniture or heavy equipment.

But it’s taking the design smaller that really sparks the imagination.

Reduced to nanoscale, swarms of M-Blocks might become the voxels of self-assembling macro-bots. The smaller the block—the higher the robot’s voxel resolution. Or made compatible with human biology, they could be used to attack tumors or repair organs.

M-Blocks make such dreams ever so slightly more realistic because of their simplicity. The simpler the constituent parts, the cheaper and easier they are to make, control, and miniaturize. Complexity can arise in how they come together and in which configurations—not unlike cells in living things.

Olivier Blanchard, IMF World Economic Outlook, October 10, 2013

Failure to lift the debt ceiling would, however, be a major event. Prolonged failure would lead to an extreme fiscal consolidation and almost surely derail the U.S. recovery. But the effects of any failure to repay the debt would be felt right away, leading to potentially major disruptions in financial markets both in the United States and abroad. We see this as a tail risk, namely a low probability risk, but were it to happen, it would have major consequences.

Now, fiscal risks in the United States, as worrisome as they are, should not, however, lead us to lose sight of a bigger picture, and this is what you and we should be focusing on. It is difficult to do this week, but we have to try.

Looking to the bigger picture,advanced economies are slowly strengthening, more or less as we forecast in the past. At the same time, emerging market economies have slowed down and they have slowed down more than we had forecast last July.

So, let me give you the basic numbers here. We forecast growth in advanced economies to be 1.2 percent this year and 2 percent next year, so this is actually more or less the same as our July forecast. We forecast growth in emerging markets and developing economies to be 4.5 percent this year, 5.1 percent next year, and that is a downward revision of 0.5 percent and 0.4 percent, respectively, relative to our July forecast.

These two evolutions, strengthening recovery in advanced economies and a slowdown in emerging market economies, are leading to tensions. In particular, emerging market economies are facing the challenge of slowing growth in the context of  tougher global financial conditions. 

In the U.S., private demand continues to be strong. On the assumption that fiscal accidents are avoided, which is the underlying assumption of our forecast, recovery should strengthen. Growth will be higher next year than it is this year. It is, therefore, time to make plans for exit from both quantitative easing and zero policy rates, although it is not time yet to implement these plans.

Moving on to Japan, the recovery in Japan continues. Whether it can be sustained depends very much on Abenomics, as it is called, meeting two major challenges. The first, reflected in the debate, about the increase in the consumption tax is the right pace of fiscal consolidation.

The second is a credible set of structural reforms to transform what is now a cyclical recovery into sustained growth.

Let me turn to core Europe. Core Europe is at last showing some signs of recovery. This is not due to major recent policy changes but partly to a change in mood, I would say, which could be self-fulfilling or at least partly self-fulfilling. Now, I have talked here about core Europe. South and periphery countries are still struggling. Definite progress on competitiveness and exports is not yet strong enough to offset depressed internal demand.

Now, the major news, as I said at the start of this press conference, comes from emerging markets, where growth has declined often more than we had forecast in July. So, the obvious question is whether this reflects a cyclical slowdown or a decrease in potential growth. That is a very hard question to answer and we will know the answer only in time. Based on what we know today, the answer is both.

On the first, while some decrease in growth relative to the 2000s is probably inevitable, structural reforms can help and are now becoming more urgent:rebalancing toward consumption in China to removing barriers to investment in India or Brazil.

On the second challenge, which is the cyclical adjustment, then standard advice also applies. Countries with large fiscal deficits, of which there are a few, should consolidate; countries with inflation running persistently above target should tighten; and more importantly than what they do to interest rates, they should put in place a credible monetary framework, which some countries still do not have.

Now, the increase in U.S. long rates makes the advice even more relevant than it was, say, six months ago. Normalization of interest rates in advanced economies is likely to lead to a partial reversal of the earlier capital flows, and this is where the tensions come in. As investors repatriate funds, countries with weaker fiscal positions or high inflation are particularly exposed. The right response for emerging market economies faced with these issues must be twofold.

First, where needed, they have to put their macro house in order to clarify the Monetary Policy Framework to maintain fiscal sustainability. Second, in response to the capital outflows of a slowdown in capital inflows, they should let the exchange rate depreciate in response to these flows.

FMI  Olivier Blanchard, Economic Counsellor and Director of the Research Department.

Croissance : l'Insee confirme l'embellie en 2013

Dans son point de conjoncture publié jeudi 3 octobre, l'Insee souligne qu'"en France, l'éclaircie du deuxième trimestre se confirmerait au second semestre" de l'année 2013. Après une croissance du produit intérieur brut (PIB) confirmée de 0,5 % entre avril et juin, les experts de l'institut de conjoncture estiment que la croissance a été nulle au troisième trimestre mais devrait à nouveau accélérer sur les trois derniers mois de 2013, à +0,4 %.

Sur l'ensemble de 2013, en moyenne annuelle, la croissance ressortirait donc selon l'Insee à 0,2 %, après 0 % en 2012. A première vue, pas de quoi s'enthousiasmer. Mais, comme le souligne l'Insee, "ce faible écart masque une nette accélération au cours de l'année 2013". Le glissement annuel du PIB atteindrait 0,8 % en fin d'année, alors qu'il était de -0,2 % en 2012, explique Cédric Audenis, responsable de la conjoncture à l'Insee. "C'est le rebond de la production manufacturière" qui a porté cette reprise, souligne-t-il. Selon lui, l'autre point saillant de cette photographie de l'économie française est le fait qu'au quatrième trimestre le PIB en volume retrouverait son niveau d'avant-crise, c'est-à-dire celui du premier trimestre 2008.

De là à dire que l'économie française est engagée sur une voie rapide, il y a un pas que les spécialistes de l'Insee ne franchissent pas. "Nous sommes dans une reprise un peu particulière, avec des facteurs de déséquilibre qui persistent. La France n'enchainera pas les 0,4 % de croissance par trimestre pendant trois ans",relativise M. Audenis.

   La vigueur et la pérennité de la reprise dépendront beaucoup de l'extérieur. Selon l'Insee, la demande adressée à la France devrait rester dynamique d'ici la fin de l'année et soutenir les exportations, même si les entreprises souffrent de l'appréciation de l'euro observée depuis mi-2012.

Dans ce contexte, l'embellie sera timide sur le marché de l'emploi. L'Insee prévoit que l'emploi dans le secteur marchand continuera de reculer aux troisième et quatrième trimestre, mais moins sévèrement que lors des trimestres précédents. Malgré ces destructions de postes, l'emploi total va progresser au deuxième semestre, en raison de la montée en puissance des emplois d'avenir.

Le Monde

«Google investirà in Italia, ma serve la banda larga»

 Le opportunità concesse dal digitale al rilancio dell’economia e della creatività italiana. E un ospite d’eccezione: presidente esecutivo ex amministratore delegato di Google Eric Schmidt. Si chiude a Roma “Big Tent Made in Italy: la sfida digitale”, evento organizzato da Mountain View in collaborazione con Unioncamere. «Google investirà in Italia per sostenere le eccellenze del Paese. Ma il Governo dovrà garantire la banda larga veloce ovunque, nulla può accadere senza questo», è stata la sentenza di Schmidt. 
Secondo Schmidt, occorre puntare sulla formazione, in particolare «sull’alfabetizzazione digitale». È anche necessario «aprirsi ulteriormente», modificare leggi che ingessano il mercato. Per Schmidt bisogna «incoraggiare il libero mercato. Molti pensano che sia il Governo a creare posti di lavoro ma non è cosi. Il settore privato dà lavoro, il Governo deve concentrarsi sulla scuola, sulla formazione».

Premesse fondamentali per quella che, come detto, è la promessa del presidente esecutivo di Mountain View . «Google investirà in Italia per sostenere e valorizzare le eccellenze nascoste del Paese». L’intervento di Schmidt è così proseguito: «In un Paese con il 40% di disoccupazione giovanile - ha spiegato - trovare soluzioni alla portata del tessuto imprenditoriale che aiutino a far crescere il fatturato delle imprese, il Pil del Paese e allo stesso tempo utilizzino il talento dei giovani, sembra imprescindibile. Ecco perché, come Google, abbiamo deciso di fare un investimento importante in Italia e offrire il nostro contributo per accompagnare il made in Italyalla conquista dell’economia digitale. Ci concentreremo su tre aree: far conoscere le eccellenze nascoste dell’Italia, diffondere tra gli imprenditore le competenze digitali, valorizzare i giovani come promotori della transizione digitale dell’economia italiana».

Source: Corriere della Sera

South China Sea true name?

"One of the biggest points of contention when discussing territorial disputes in the South China Sea is what to call the expanse of water in the first place.

Internationally, it’s mostly known as the South China Sea. But the Philippines calls it the West Philippine Sea, while Vietnam refers to the East Sea. China calls it the South Sea in Chinese, and the South China Sea in English.

Philippine President Benigno Aquino III, however, opted to call it “this sea known by many names” in remarks Wednesday to other Association of Southeast Asian Nations leaders in Brunei. In case no one was clear on what he meant, he added a geographic descriptor placing it “west of the Philippines, east of Vietnam, north of Malaysia, south of China.”

In the context of the prickly debates between ASEAN members and China over who has sovereignty over the waters, Mr. Aquino’s wording might seem like a fudge designed not to ruffle too many feathers. The South China Sea is claimed in whole or in part by China, the Philippines, Vietnam, Brunei, Malaysia and Taiwan, and the dispute over sovereignty has become increasingly heated in recent years. Vietnam has complained that Chinese fishing vessels are interfering with oil exploration in its waters, while the Philippines is angered by a growing Chinese presence at Scarborough Shoal, which it claims as part of its territory.

“Our development as a region cannot be realized in an international environment where the rule of law does not exist,” Mr. Aquino said, according to a transcript of his remarks released by the Philippine government. “This sea known by many names, a problem now, presents an opportunity for ASEAN and all other parties to collectively exercise the observance of the rule of law.”

The difficulty as far as Beijing is concerned, however, is that the Philippines isn’t confining the dispute to ASEAN’s discussions with China, but is also seeking a ruling from the United Nations on the legality of China’s claim to the sea.

The Philippines launched its petition declaring China’s claims invalid in January under the U.N.’s Convention on the Law of the Sea, which provides for exclusive economic zones stretching to 200 nautical miles from a country’s territorial waters. China, though, disputes the U.N. arbitrators’ rights to rule on the Philippines’ claim and is refusing to cooperate in the process.

Since then, the relationship between the Philippines and China has grown testier. In September, the Philippines said China had asked Mr. Aquino not to attend an ASEAN-China trade exposition in Nanning, after the Philippines refused to comply with unstated Chinese stipulations, widely speculated to have been a demand for Manila to withdraw its action at the U.N".

Source: The Wall Street Journal

Japan Auto Makers Post China Sales Gains

"Sales in China by Japan's biggest auto makers surged last month, one year after a territorial dispute between Beijing and Tokyo slammed their sales in the world's largest auto market.
The year-over-year September sales gains disclosed on Tuesday by Toyota Motor Corp,Honda
Mortor Corp and Nissan Motor Corp. in part reflected weakness in the year-earlier month—all three reported declines of greater than 30% in September 2012. It was the first time in the past 12 months that all three Japanese car makers reported significant year-over-year growth that wasn't caused by seasonality or unusual circumstances.

Nissan said its September sales in the country rose 83% to 117,100 vehicles. Toyota, the world's largest car maker by sales, said it sold 72,100 cars, up 63% from a year earlier, while Honda said its car sales in China more than doubled to 73,990 units.

Nissan, which is the top Japanese brand by sales in China, said it aims to sell 1.25 million vehicles in China this year, a 6% increase compared with the 1.18 million vehicles it sold last year.

"Sales volumes of Japanese car makers are restoring to the normal level. Given the low base in the fourth quarter of 2012, I think the situation will continue in the coming months," said John Zeng , a managing director at consulting firm LMC Automotive.

Still, the recovery is slow due to fierce competition, he said. "There are no signs that the island dispute will come to an end soon," he said. "As long as the tension exists, Japanese car makers will remain conservative in China. Meanwhile German and U.S. are revving up investment, putting more pressure on the Japanese."

"The market shares of Japanese car companies had begun to decline even before the island dispute. In 2007, they accounted for 28% of cars sold in China. By 2010, that share had fallen to 23%, according to estimates by consulting firm Deloitte based on data from the China Association of Automobile Manufacturers".

Source: The Wall Street Journal

Chinese Leaders. Xi Jinping and Li Keqiang

Xi Jinping

Xi Jinping has become China's new Communist Party chief, and is now certain to take over next year as the country's President as well.

He is a so-called 'princeling', the privileged son of a former top leader, learning Chinese politics from an early age when his father was purged and he himself was sent to work in the countryside.

Mr Xi's close ties to the military and his support for state-owned industries suggest he's conservative.

Born in Beijing in 1953, Mr Xi studied chemical engineering in Tsinghua before joining the Party in 1974. He worked in Hebei, Fujian and Zhejiang, before being named Shanghai party chief in 2007 and tasked with cleaning up a corruption scandal.

He has a reputation for straight-talking, telling officials in 2004: 'Rein in your spouses, children, relatives, friends and staff, and vow not to use power for personal gain.'

To many inside China, Mr Xi is less famous than his wife - the folk singer Peng Liyuan.

Li Keqiang

  Li Keqiang is the current Premier of the People's Republic of China and party secretary of the State Council.

Li Keqiang's career has seen him rise from manual labourer on a rural commune to provincial party chief and now a leader-in-waiting.

He has a reputation for caring about China's less well-off, perhaps the result of a modest upbringing.

He is close to Hu Jintao, who he worked with in the party's youth league, and he is widely expected to take over from Wen Jiabao as China's premier. But his easy-going manner and consensual style has prompted some to question whether he is dogged enough to tackle strong vested interests which dominate much of China's economy.

Born in 1955 in Anhui Province, Mr Li reportedly rejected his father's offer of a local party career, enrolling instead at Beijing's Peking University to study law. Mr Li became deputy party secretary for Henan Province in 1998, and became China's youngest provincial governor a year later.

China media Concern: US shutdown

Chinese media express concern that the partial shutdown of the US government will have a serious impact on the global economy.

"The world is not unfamiliar with America's arrogance. It is this arrogance that led to the US decision to bypass the United Nations and launch a war in Iraq. It is the same arrogance that often lets America use its domestic policy to kidnap the global economy,"The Peoples Daily says.

The paper adds that the shutdown is only adding more uncertainties to a volatile global market.

"After all, the volume and influence of the US economy are unusual. If a gigantic economic entity chooses to look for trouble, it will only add new elements of uncertainty and instability to the world economy, and erect more severe challenges for its full recovery and healthy growth," it says.

State-run Xinhua news Agency also feels the US shutdown has the potential to make global financial markets more volatile this week.

Shen Dingli, a professor at China's Fudan University, feels "the US partial shutdown could become a recurrent theme".

"It can be predicted that this time the US government shutdown will not last for too long, but bipartisan political struggles on Obama's healthcare reform will continue in the long-term, signifying that the next shutdown is not too far," it says.

Meanwhile, papers and experts support President Xi Jinping's call to bolster China's co-operation with other Asia-Pacific Economic Co-operation (Apec) member nations.

"To build the Asia infrastructure investment bank or a relevant specific fund, funding can be provided by governments, entrepreneurs and financial institutions from Apec members, and China could contribute a relatively large part to the fund," the China Daily quotes Fan Bi, a senior researcher at the China Centre for International Economic Exchanges, as saying.

The People's daily says "China and the Asean have the responsibility to work together to expand co-operation and eliminate interference and properly handle differences".

Source: BBC

Samsung launches world's first smartphone with curved screen

"Samsung Electronics Co Ltd on Wednesday launched the world's first smartphone with a curved display, a variant of the Galaxy Note which moves the Asian giant a step closer to achieving wearable devices with flexible - even unbreakable - screens.

Curved displays are on the frontlines of Samsung's innovation war with rivals such as Apple Inc and LG Electronics Inc, as the South Korean firm seeks to expand its lead in the slowing market for high-end smartphones.

"It's a step forward for having unbreakable gadgets and flexible devices eventually. But for now, the new phone is more of a symbolic product," said Hana Daetoo Securities analyst Nam Dae-jong, adding that Samsung did not yet have capacity for large-scale production of curved touch-screens for the new Galaxy Round.

The Galaxy Round is Samsung's attempt to gauge consumer appetite for curved phones although its lack of other eye-catching features means it is unlikely to be a hit, he said.

"I don't think it'll be massively compelling enough for gadget buyers as ... the curved display doesn't come with many unique features," he said".

Source: Reuters

The Strategy Behind China's(foreign) Aid Expansion Part I

  According to an article published today in the Wall Street Journal:

"In 2001, China spent roughly $1.7 billion on foreign aid. By 2011, the annual foreign-aid figure had risen to $189.3 billion. Part of the increase reflects the growth in China's economy. But this is an increase with a purpose, and China's foreign-aid programs are as different from aid programs conducted by the U.S. and other Organization for Economic Cooperation and Development countries as East is from West.

Beijing's aid is explicitly linked to benefits for China as much as it is to benefits for recipients. The aid is financed by loans, while the U.S. and OECD subscribe to a definition of "development aid" that confines the term solely to grants. Notably, the quid pro quo aspects of China's aid have a more capitalistic tinge than aid emanating from the capitalist donors, which may be why China's minister of commerce rather than its foreign affairs minister is principally responsible for overseeing the multiple other agencies involved in the programs.

Between 2001 and 2011, China's pledged foreign aid was $671 billion, divided among 93 emerging-market countries. In 2010, annual aid pledged by China was $169 billion and in 2011, $189 billion—equivalent to about 3% of its reported GDP and more than twice the size of the officially reported budget of the ministry of defense.

Slightly over 80% of the pledged aid is allocated for development of natural resources and, secondarily, for infrastructure. The tangible benefits for China are through the explicit consignment of production from the resource-development projects for export to China, as specified in the loan agreements that govern the programs. Proceeds from these exports are deposited in escrow accounts established by the two banks that principally fund the programs—the China Development Bank and the Export-Import Bank of China. The loans provided by the banks typically carry 3% interest, with repayments scheduled over 15-years plus an additional five-year grace period".

Housing Sales Build Hope for China Growth

  According to an article published today in the Wall Street Journal:

"Some of China's listed property developers have reported strong results in recent days, signaling robust demand in the crucial real-estate sector that could bolster flagging domestic growth.

  China Vanke Co., the country's largest property developer by market value, said Wednesday that sales in September totaled 15.57 billion yuan ($2.54 billion), up 29.3% from the same month a year earlier and up 1.9% from August.

The area sold in September totaled 1.31 million square meters, up from 1.05 million a year earlier though down a bit from August's 1.33 million.

September and October mark the peak season for home purchases.

A day earlier Hong Kong-listed Country  Garden Holdings  Co. said that it had surpassed its full-year sales target of 62 billion yuan with more than a quarter still to go: As of Sept. 30, sales stood at 64.7 billion yuan. And last week Sunac China , a property developer based in the city of Tianjin, said its September housing sales were up 71% from a year earlier to 36.4 billion yuan, with strength in Shanghai, Chongqing and Hangzhou. Sunac's average selling price per square meter was up 23% from a year earlier, to 20,510 yuan from 16,620 yuan.

Listed property developers in China have posted good housing sales since early this year, underpinned by new launches and strong market sentiment, especially in major cities. After staying on the sidelines in 2011 and 2012, buyers have flocked back to the home market—many driven by concerns that prices will rise out of reach if they delay.

Sales in the January-September period totaled 128.5 billion yuan, Shenzhen-based China Vanke said in a filing to the Shenzhen Stock Exchange.

Sales growth is going to be sustainable for some of the larger developers, such as Country Garden, which have ventured into new cities such as Yantai and Nanjing and are gaining market share from competitors, said Nicole Wong , an analyst at CLSA''.

OECD Indicators Point to Economic Pickup in China, Russia

According to an article published today in the Wall Street Journal:
"Economic growth is set to pick up in China and Russia, as well as in major developed economies, according to the Organization for Economic Cooperation and Development's composite leading indicators.
The OECD's leading indicators , suggest that after slowing earlier this year, economic output is reviving.
 The leading indicators suggest that growth in Russia may also be set for a pickup, although they continue to point to slower growth in Brazil and India. Both economies have been affected by a withdrawal of capital as investors anticipate stronger growth in developed economies, and an eventual tightening of monetary policy by developed-country central banks.

According to the leading indicators, Germany will continue to lead the euro zone's modest recovery, with Italy poised for a pickup in growth after almost two years of declining activity, and France is also set for a pickup.

The leading indicators continue to point to firming growth in the U.S. and Japan, the two largest developed economies, as well as the U.K.

The Paris-based think tank said its leading indicator of economic activity in its 34 developed-country members rose to 100.6 in August from 100.5 in July".

IMF: Premature Fed Exit Could Fuel $2.3 Trillion in Global Bond Losses

According to an article published today in the Wall Street Journal:

"A premature exit by the U.S. Federal Reserve from its easy money policies could cause $2.3 trillion in global bond portfolio losses, the International Monetary Fund warned Wednesday.

Although the IMF assumes in its latest economic forecasts that the U.S. central bank will unravel its policies at a tempered pace, the fund said the market's volatile reaction to Fed exit comments earlier this year show there is still a risk of moving too fast.

"Engineering a smooth transition to monetary normalization will require a clear and well-timed communication strategy by the Federal Reserve to minimize interest rate volatility," said Jose Vinals, the IMF's top financial counselor.

"Containing longer-term interest rates and market volatility has already proven to be a substantial challenge, as shown by the sharp rise in bond yields and volatility since May," he said.

Wary about higher borrowing costs choking global growth and fueling volatility, especially in emerging markets, the IMF studied how a premature exit strategy might impact markets in its latest Global Financial Stability Report.

The fund said long-term interest rates could jump one percentage point on a sharper, front-loaded winding down of Fed bond-purchases than the market expected. As that rate shock traveled around the globe, it could generate "aggregate losses on global bond portfolios [worth] 5.6%, or $2.3 trillion," the IMF said".

"That figure doesn't include other potential losses, such as in equity, real estate or currency markets".

Asian Currencies Shrug Off Yellen Nomination

U.S. President Barack Obama decision to nominate Janet Yellen to replace Ben Bernanke when he steps down as chairman of the U.S. Federal Reserve next year didn't have much of an impact on Asian currencies in the immediate aftermath of the news, as it did little to reduce uncertainty about more pressing issues.

The Indonesia rupiah, the Indian rupee and the Malaysian ringgit, seen as the region's vulnerable and volatile currencies, fell against the dollar in early trading, and analysts said the currencies will likely mildly underperform their Asian peers.

"The likes of the Indonesia rupiah and the rupee will suffer today as the negativity starts to permeate into FX markets," Nick Verdi, currency strategist at Barclays said by phone, referring to various factors that have hurt sentiment recently but especially the current impasse in U.S. politics that has partially shut the government as well as a looming Oct. 17 deadline for raising the country's debt ceiling.

The rupiah was down 3% in afternoon trading, the worst performer in Asia so far in the day. The ringgit and rupee had erased earlier losses.

Source: LiveCharts

LONDON MIDDAY: MARKETS PAUSE AT THREE-MONTH LOW AS UK DATA DISAPPOINTS

Disappointing UK production figures and the ongoing political deadlock in the US weighed on market sentiment on Wednesday morning, with the FTSE 100 subdued after hitting a three-month low the day before. 

London's benchmark FTSE 100 index was trading broadly flat by midday, erasing earlier losses, after ending Tuesday's session at 6,365.83, a level not seen since July 3rd when it closed at 6,229.87. 

Alastair McCaig, Market Analyst at IG, said of the price action: "Confidence that the US will get its act together is slowly turning into fear, and the chances of the FTSE seeing a 6,200 handle in the coming days are increasingly likely."

Not even the news that well-known dove Janet Yellen will be nominated as the next chair of the US Federal Reserve lifted stocks this morning. Yellen will be the first female at the head of the US central bank and is widely expected to argue for a continuation of aggressive monetary easing started by her predecessor, Ben Bernanke. 

UK data fails to impress

Domestic economic data was providing some downwards pressure on markets after industrial production unexpectedly declined by 1.1% in August, its biggest fall since September 2012. This was worse than the revised 0.1% expansion in July and well below than the 0.4% increase expected. 

Core manufacturing production meanwhile slipped by 1.2%, missing the consensus forecast for 0.4% growth.

"August's weak industrial production and trade figures signal that gross domestic product (GDP) growth in the third quarter might not be quite as strong as the business surveys have suggested," said UK Economic Samuel Tombs from Capital Economics. 

Nevertheless, he pointed out that these falls do not reverse all of the rise in production seen in the previous two months. "Indeed, industrial production is still on track to make a small positive contribution to GDP growth in third quarter."

Impasse continues Stateside

There has been some, albeit small, developments on the debate over the debt ceiling overnight after President Barack Obama said he was open to a short-term deal to raise the debt ceiling and reopen the government but only if it is not attached to conditions. 

He said he was willing to hold budget talks with the Republicans as long as they lift "threats" against the economy and stop demanding concessions in policy in exchange for a deal. "[They] don't get to demand ransom in exchange for doing their jobs," the President said.

According to reports, Senate Democrats are planning a test vote in the coming days over whether to give Obama to authority to raise the debt ceiling in the short term.

However, House Speaker John Boehner remained defiant, saying that an immediate increase in the debt ceiling without conditions was "unconditional surrender". He said: "There's going to be a negotiation here [...] It's time to have that conversation."

Source: Live Charts

HOCHSCHILD CHAIRMAN INCREASES STAKE AHEAD OF PROPOSED ACQUISITION

Eduardo Hochschild, the Executive Chairman of Hochschild Mining, whose great uncle founded the Peruvian mining and cement-focused group, this week grew his already sizeable stake with the purchase of a further 16.9m shares. 

Paying 155p a share, Hochschild spend a total of £26.2m, although this would have made but a small dent in his estimated $2.1bn fortune. 

The transaction has taken the director's stake in the group to just over 199.3m shares. 

Hochschild Mining also announced a much more modest purchase by Nigel Moore, a Non-Executive Director, who acquired 12,149 shares at 153.50p for a total of £18,649. His holding in the company now stands at 26,434. 

The purchases were part of a placing made in relation the agreement last week by the precious metals miner, in which it agreed to acquire the remaining share of two gold and silver mines in Peru from its partner there.

The FTSE 250 group proposed to raise between $48m and $96m from institutions and revealed it had secured a $340m senior bridge financing facility to complete the acquisition from International Mineral Corporation (IMZ), in which Hochschild is a 3.2% shareholder. 

As part of this Eduardo Hochschild provided an irrevocable undertaking to vote all of his current shareholding (then 54% of the currently issued share capital), as well as all shares that he indirectly subscribed to as part of the placing, in favour of the acquisition at an upcoming extraordinary general meeting. 

Source:LiveCharts

FTSE 100 MOVERS: RETAILERS HIT BY BRC FIGURES

Blue-chip retailers Marks & Spencer, Next and Kingfisher were among the worst performers of the day after data from the British Retail Consortium (BRC) showed that UK retail sales growth slowed for the second straight month in September. 

According to the BRC, like-for-like sales growth fell to an annual rise of 0.7% last month, from 1.8% the month before - analysts were looking for a pick-up to 2%.

A number of cyclicals were in the red as risk appetite was scaled back on the back of concerns over the US and China. BHP Billiton, Rio Tinto and Glencore Xstrata were all out of favour, along with financials Standard Life, Lloyds and Prudential.

HSBC was also lower after selling a portfolio of non-performing personal unsecured and secured loans to the Paragon Group of Companies for £13.5m.

Meanwhile, Antofagasta was on the rise after Bank of America Corp. reiterated its 'buy' rating on the stock. 

ITV also provided a ray of light, after Exane BNP reportedly raised its target price for the broadcaster. 

Source: LiveCharts

ESM MAY DECIDE FATE OF AILING BANKS, EU COMMISSIONER SAYS

The European Union (EU) Internal Market and Services Commissioner Michel Barnier said that the European Commission could be the resolution agency for the winding down of financial institutions before the permanent bailout fund, known as the European Stability Mechanism (ESM) takes over.

"The bailout fund could take over banking resolution as soon as it has become a European institution", Barnier told the German business daily Handelsblatt on Wednesday. 

The EU commissioner did note however that an agreement still needed to be reached on whether the resolution authority would cover all the region's banks or, as Germany has demanded, that it only be responsible for larger banks considered to be a systemic risk. 

Barnier said that small banks could also go bankrupt "and rock the whole system. I don't think much of the idea of leaving the resolution of smaller banks to national supervisory agencies, but it is true that we need to find a compromise." 

EU finance ministers are expected to discuss the issue as part of the larger framework for the banking union in the October 14th Eurogroup meeting and the October 15th Ecofin gathering in preparation for the European Council meetings, known as the European Summit, scheduled for October 24th and 25th. 

The Council's official agenda states that "the European Council, in the presence of ECB President Draghi, will assess the state of play in the completion of the banking union, in particular the implementation of the single supervisory mechanism and the remaining pending proposals to complete the banking union"

Source:LiveCharts

ASIA: HANG SENG TUMBLES ON WASHINGTON GRIDLOCK

Stock markets in Asia were mixed on Wednesday, with Hong Kong stocks coming under pressure on nerves about the US government shutdown, now entering its ninth day, while a weaker yen helped Japanese stocks push ahead.

The benchmark Nikkei 225 index closed up 143 points at 14,037 in Tokyo while the broader Topix advanced 1.5% to 1,166. The Hang Seng retreated 144 points to 23,033 in Hong Kong.

Shares of internet giant Tencent spearheaded losses in Hong Kong as investors booked profits among technology stocks. 

Meanwhile the impasse in Washington continued to drain market confidence; however news that President Barack Obama plans to nominate Janet Yellen as the new US Federal Reserve Bank chief brought some cheer.

Japanese exporters such as Toyota Motor increased 3.0%, Fast Retailing firmed 0.8% while Honda Motor rose 0.5% as the yen weakened against the dollar. Real estate firm Sumitomo Realty & Development rallied 3.4%. 

Chinese trade and inflation data at the weekend and at the start of next week will come under scrutiny as investors gauge the underlying strength of the economy. 

Analysts still searching around for that "third arrow" 

Before the opening bell Credit Suisse put out a research note in which it reduced its exposure to Japanese equities to 7% overweight from 16% overweight. 

Amongst the reasons cited for cutting their exposure to Japanese equities were the [some] signs of weaker relative growth momentum and the fact that net fiscal tightening in calendar year 2014 is greater than in any other region (-0.9% of GDP) loom large.

As well, they went on to explain that there has been little detail on the so-called "third arrow" of structural economic reforms] - and the rate of foreign equity buying is already extremely high, they pointed out (which means that less demand can be expected from this source going forward). 

Source: LiveCharts

CHINA OFFERS 25 OFFSHORE OIL LICENSES TO OVERSEAS OPERATORS

London's listed oil explorers will be among those bidding to work with China National Offshore Oil Corporation (Cnooc) after it offered 25 offshore blocks to foreign firms. 

Cnooc, the largest state-run offshore oil producer in the People's Republic, announced that it is looking for cooperation projects with overseas companies for an unprecedented 25 blocks, covering a total area of 102,577 sq km.

The move comes as China strives to increase domestic oil output in the face of a growing crude deficit.

Crude oil demand from the People's Republic is growing faster than supply, with Chinese government data showing supply has grown an average of 2.2% annually since 2002 but oil demand is expected to grow by about 4% this year and next.

A statement from Cnooc said 17 of the blocks were located in the South China Sea, including 15 blocks of deep-water depth, three blocks in the East China Sea and five in the Yellow Sea and Bohai Sea, with none of the blocks positioned in disputed territorial waters.

Last year Cnooc offered 26 blocks, of which six required deep-water drilling. 

The state-run company explained that foreign companies may access the data related to the blocks once they had applied for the projects, with data to be made available until December 30th.

Cnooc has previously outlined plans to double its oil and gas production by 2020 and triple it by 2030 from 2010 levels. 

London-listed companies with existing interests in Asia include Royal Dutch Shell, BP and Premier Oil.

Source:  LiveCharts

Akira Amari: Abenomics may take 10 years to work

Japan's aggressive policies aimed at reviving its economy may take 10 years to have a full impact, Akira Amari, Japan's minister in charge of economic revitalisation, has told the BBC.

Known as Abenomics, these include easing monetary policy, boosting stimulus and reforming key sectors.

Some of these steps have already been introduced and have boosted growth.

But he warned that while it is easy to implement monetary stimulus measures, scaling them back can be tricky.

He told the BBC's chief business correspondent, Linda Yueh, that Japan's central bank was likely to "learn from the experiences" of the US Federal Reserve, which is widely expected to reduce its key stimulus programme in the coming months.

"The Fed Chairman, Ben Bernanke, is experimenting with it," Mr Amari said in an exclusive interview with the BBC.

"That's why one word from him can move stocks and currencies."

'Dozens of targets'

Japan's Prime Minister, Shinzo Abe, who came to power in December last year, has made reviving the economy his top priority.

Continue reading the main story

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Abenomics aims to raise total capital investment by 10% within 3 years”

Akira AmariMinister in charge of economic revitalisation, Japan

He has unveiled a series of aggressive measures to try to achieve that.

The measures are based on what are known as the "three arrows" - monetary policy, fiscal stimulus and structural reforms - to ensure long-term sustainable growth in the world's third-largest economy,

The first arrow of monetary policy is aimed at ending Japan's nearly two-decades-long fight with deflation or falling prices.

One of the first steps that Mr Abe took was to get Japan's central bank to double its inflation target to 2%. He has even suggested that the bank should print "unlimited yen" to help achieve its inflation target.

The second arrow has prompted Mr Abe's government to announce plans to boost government spending on infrastructure, in order to help boost growth further.

Mr Amari told the BBC that the steps had already had a positive impact on the Japanese economy.

Revised data released last month showed that Japan's economy expanded 0.9% in the April-to-June quarter from the previous three months. That translates into an annualised growth of 3.8%.

Meanwhile, consumer prices in Japan have now risen for three months in a row.

Mr Amari said that the third arrow - reforming key sectors - was aimed at encouraging private investment in the country, which will aid growth even more.

He said that "Abenomics aims to raise total capital investment by 10% within three years", adding that the target was not a difficult one to achieve.

"It can be achieved in one-and-a-half years. The aim is to replace low productivity facilities with higher productivity ones."

However, he added that the government had "dozens of targets" in terms of sectors where it wants to boost investment and "each has its own timeframe, whether it's three or 10 years".

He said the government planned to introduce tax incentives, to encourage companies to increase their investment.

"By increasing investment by 10%, growth will be raised by 1.3%," he added.

Source: BBC

Why do Japanese children lead the world in numeracy and literacy?

Emphasis on rote learning, theory and compulsory study to age of 18 pays off, but critics say it stifles critical thought

Japan's state education system is often criticised for quashing original thought among pupils in favour of rote learning, and for placing an emphasis on theory rather than practical skills, especially when it comes to English. But it is this traditional approach that has helped Japanese pupils easily outperform their counterparts in England and Northern Ireland.

Formal, intense instruction in maths and the Japanese language begins at the age of six and continues through to 15, the earliest age at which pupils can leave school. Those who elect to go on to senior high school - the rough equivalent of an English sixth form college and a traditional route to higher education - through to age 18 must study an eclectic range of subjects, including maths, Japanese literature and English.

Japanese senior high school teachers, and their pupils, are often incredulous when they learn that 16- to 18-year-olds in England can drop maths and literature and study just three A-level subjects of their choice. Japan's approach - rote learning accompanied by regular reviewing and testing - has proved hugely successful in establishing basic academic skills among pupils. The country's literacy rate is frequently put at 99%.

According to guidelines introduced by the education ministry, Japanese children should have learned how to read 1,006 kanji - Chinese characters used in the modern Japanese writing system - by the time they leave primary school, and a further 1,130 characters by the time they end their compulsory education at the age of 15.

Those who continue to senior high school are expected to be able to write all 2,000-plus characters - considered the minimum requirement to function in Japanese society.

Source: The Guardian