Japan's 'Abenomics' may pave way for investment, Mitsubishi says

Mitsubishi Corp Chairman Yorihiko Kojima said on Wednesday that Japan's economic reform agenda could, if successful, pave the way for the company's expansion in the country's energy sector.

A sweeping economic policy overhaul by Prime Minister Shinzo Abe aimed at pulling the world's third largest economy out of a 15-year deflationary period - a policy dubbed " Abenomics" - has succeeded in building market optimism, he said."The challenge now is converting this positive sentiment into genuine improvements in the real economy," he said at a luncheon sponsored by Boston College's Chief Executives' Club of Boston.
"This is related to the government regulations, therefore we are always communicating," he said, referring to Mitsubishi's interest in expanding its energy business in Japan.
Since taking office in December, Prime Minister Abe and the Bank of Japan have gambled on massive fiscal and monetary stimulus to spark life in the economy, and signs of an upswing are accumulating.
But pessimists have argued that the benefits of "Abenomics" may be short-lived and will not prompt companies to spend more on investment and wages, unless they are accompanied by a raft of structural reforms like tax cuts and changes to labor laws.
Mitsubishi Corp is a multinational Japanese company covering finance, banking, machinery, chemicals, food and energy businesses. It employs about 60,000 people in approximately 90 countries and is part of the Mitsubishi Group of Companies, best known in the United States for its automobile brand.

NewsOnJapan

Telco deal allows Teléfonica more time to solve dilemma

Telefónica de España’s decision to increase its share in the Telco consortium, which controls Telecom Italia, created a wave of speculation in the Brazilian market. The future of mobile carrier TIM, controlled by Telecom Italia; possible candidates to buy it; the competition in the mobile telecommunication market and market concentration were debated on Tuesday. Government, regulatory agencies, competitors, lawyers and analysts tried to understand what is allowed or forbidden in that possible change in control, that according to experts creates a problem for the may links in that chain.

According to the business model announced by the Spanish telecom, the company will inject capital in Telecom Italia, guaranteeing the company’s financial balance for a period, calms down Telco’s bank partners, which needed the cash, and also stops the shares from being sold to a third party.

In the meantime, Telefónica tries to solve the regulatory engineering for the deal in Brazil and Argentina, to avoid the superposition of licenses and frequencies that would create market concentration in TIM. In Brazil’s case, if the issue is not solved, the company would control Vivo and TIM simultaneously, something regulators don’t even consider accepting. Because of that, in the way it’s conducting the deal, Telefónica wins time, since it will take over the Italian company gradually; voting shares will only be converted starting in January 2014.

Valor Economico

Euro-Zone Crisis:IMF More Fiscal Integration to Boost Euro Area Resilience

At its inception, it was thought that the euro area would at
most face moderate country-specific shocks, made rare by a common commitment to fiscal
soundness. In fact, not only have there been larger and more frequent idiosyncratic shocks but also
more idiosyncratic policies. For instance, many countries did not build sufficient fiscal buffers in
good times. Moreover, spillovers from idiosyncratic policies were not sufficiently taken into account.
Worse, the coupling of domestic fiscal and banking risks, together with extensive financial linkages
across countries, turned country-specific shocks into systemic ones, as there were no existing
mechanisms to deal with such shocks.
What are the minimal elements of a fiscal union that would make a future crisis less severe?
The ultimate scope and shape of the fiscal union will remain a matter of social and political
preferences. But to address the gaps identified above, four elements seem essential: (i) better
oversight and stronger incentives for sound national fiscal policies to build buffers and ensure
common concerns are addressed; (ii) subject to better oversight and stronger incentives, some
system of temporary transfers or joint provision of common public goods or services (e.g., organized
by a centralized budget) to increase fiscal risk sharing, (iii) credible pan-euro area backstops for the
banking sector to help break the sovereign-banking loop in the financial system, and (iv) some form
of common borrowing (backed by common revenue) to finance better risk sharing and stronger
backstops, and to reduce the potential for large portfolio shifts between sovereigns by providing  a
safe asset.

Brasil : O Banco Central está adotando as providências para asegurar estabilidade do sistema financeiro e da economia.

Em relação ao cenário internacional, o principal destaque é o processo de
transição em curso na economia mundial. Diga-se de passagem, transição
positiva, pois significa que a recuperação da maior economia do mundo está
ganhando força e isso representará à frente maior crescimento da economia e
do comércio global.
Nos últimos cinco anos, o mundo conviveu com a flexibilização das condições
monetárias nas economias avançadas. A política monetária convencional foi ao
extremo, com taxas de juros próximas a zero. Além disso, foram adotadas
várias iniciativas não convencionais, como a injeção direta de liquidez nos
respectivos sistemas financeiros.
No entanto, o processo de normalização das condições monetárias nas
economias avançadas já se iniciou.
A comunicação do Banco Central dos Estados Unidos, parte integrante desse
processo, mudou desde meados de maio. E essa mudança se refletiu nas
variáveis financeiras.
Os mercados se anteciparam aos fatos e os preços dos ativos financeiros se
tornaram mais voláteis, oscilando ao sabor de cada dado sobre o ritmo de
atividade da economia norte-americana.
As economias emergentes foram as mais impactadas por esse aumento da
volatilidade.
No entanto, o Brasil se preparou para enfrentar essa transição.
O sistema financeiro está sólido, com elevados níveis de capital, liquidez e de
provisões.
E o Banco Central está adotando as providências necessárias para assegurar a
estabilidade do sistema financeiro e da economia e o bom funcionamento está adotando as providênciasdos
mercados.
No Brasil, nos últimos anos, observamos uma mudança na composição dos
ingressos de recursos estrangeiros, com o aumento dos capitais de mais longo
prazo e a moderação dos capitais de curto prazo. Essa recomposição tem sido
importante especialmente nesse momento de maior volatilidade nos mercados
internacionais.

Além disso, ao longo dos últimos dois anos, continuamos ampliando nosso
colchão de segurança e de liquidez. Adicionamos quase US$90 bilhões às
nossas reservas internacionais, que hoje ultrapassam US$370 bilhões.
Esse colchão permite ao Banco Central,ofertar proteção (hedge) aos agentes econômicos e liquidez aos diversos
segmentos do mercado.
Em 22 de agosto, o Banco Central do Brasil anunciou o programa de leilões de
swap cambial e de venda de dólares com compromisso de recompra.

Discurso do Ministro Alexandre Tombini
Presidente do Banco Central de Brasil
Na Comissão Mista de Orçamento do Congresso Nacional

Too soon to say commodity super cycle over: McKinsey

Too much emphasis has been placed on Chinese demand for historically strong prices of industrial metals and not enough on rising mining costs, the McKinsey Global Institute (MGI) said in a report on Thursday.

The institute, the research arm of consultancy McKinsey & Company, also said it was too soon to call an end to the so-called super-cycle of commodities that sent prices soaring after 2000.

Despite recent declines, on average commodity prices are still almost at their levels in 2008 when the global financial crisis began. Talk about the death of the super-cycle appears premature," the report said.

"They have risen more sharply than global economic output since 2009."

The 19-commodity Thomson Reuters-CRB index .TRJCRB surged 200 percent from 2000 to a peak in July 2008, then plunged in subsequent months as the global financial crisis hit, before recovering.

The institute says demand from China, the world's biggest consumer of raw materials, is given too much credit for the rally in commodity prices.

"McKinsey's Basic Materials Institute finds that, while demand from such emerging markets has played a major role, the changing cost of supply has also been an important factor," the report said.

"A combination of geological issues and input cost inflation has put significant upward pressure on prices."

The report does not make any forecasts, but warns about various trends.

While renewable technologies and electric vehicles could drive demand for some metals, such as rare earths, new technology could also curb demand for certain metals.

Source: Reuters

JPMorgan in talks to settle government probes for $11 billion

PMorgan Chase & Co is in talks with government officials to settle federal and state mortgage probes for $11 billion (6.84 billion pounds), two people familiar with the matter said on Wednesday.

The sum could include $7 billion in cash and $4 billion for consumers, said the sources, who asked not to be identified because the negotiations are private.

The talks are fluid and the $11 billion amount could change, the people familiar with the matter said. The discussions include the U.S. Department of Justice, the Securities and Exchange Commission, the U.S. Department of Housing and Urban Development and the New York State Attorney General, the sources said.

JPMorgan is hoping to ease some of the pressure that regulators have been putting on the bank for months. The bank sidestepped the worst losses in the financial crisis, but it has looked less smart since May 2012, when it said it was losing money on derivatives bets that became known as the "London Whale" trades.

Source:Reuters

Economic News BNN

• In the commodities space, Oppenheimer notes in its weekly strategy piece that sentiment towards commodities is low (with the exception of oil where sentiment remains bullish), but starting to turn up in key markets such as natural gas, gold and copper. An RBC note this morning highlights the high long position by large and small speculators in oil, while the commercials are near record short positions
• 
  
• Debt ceiling debacle – could it happen? Although Ted Cruz’s (he of renounced Canadian citizenship fame) talking and talking and talking (and still talking) cannot delay the vote, the time is short. The vote in the Senate on the House bill (which defunds the healthcare act) is expected to occur today but procedurally there are a few things that need to happen. As well, the bill that passes the Senate (without the defunding clause but with details that will allow an extension of the debt ceiling) will likely not make it to the House until Sunday. Midnight Monday is the deadline.Traders see uncertainty and uncertainty means risk which ultimately means more volatility than we all care for. Markets are down modestly on the worry

             

             Source :Frances Horodelski  

                           Bnn  

La banda larga cresce. Ma il Web divide.

 La banda larga è mobile, ma è anche più uomo che donna. Secondo l’ultimo rapporto della Commissione Onu – Itu (International Telecommunication Union) sullo stato dei collegamenti a banda larga nel mondo e secondo le sue analisi Paese per Paese, è la versione mobile della broadband la tecnologia più promettente e in crescita del momento. In un solo anno infatti sarebbero aumentate del 30 per cento nel globo le connessioni per accedere alla Rete via smartphone, tablet, o per il WiFi accessibile dal proprio computer portatile e a fine 2013 le stime parlano di accessi alla mobile broadband triplicati rispetto a quelli su rete fissa. Ma mentre i dati totali sono lusinghieri, con 70 Paesi in cui oltre il 50 per cento della popolazione è connessa, l’Italia resta sempre nelle retrovie delle classifiche. Per esempio con una penetrazione del solo 22,1 per cento della banda larga (fissa), la metà rispetto alla Svizzera, prima classificata al mondo. Nel contempo, un secondo rapporto Onu indica le differenze di genere nell’accesso alle connessioni: gli uomini che usufruiscono di banda larga sarebbero 200 milioni più delle donne. E i Paesi in via di sviluppo continuano a faticare allargando il gap tra la loro situazione e quella dell’Occidente. 
Il rapporto annuale della Broadband Commission (qui in versione pdf) presentato nei giorni scorsi a New York è la fotografia più veritiera dei collegamenti dati a banda larga nel mondo. Registra l’adozione di piani nazionali dedicati alla diffusione delle connessioni, e analizza in che modo il loro sviluppo possa aiutare il mondo in diversi campi, dall’istruzione ai diritti, passando per la soglia di povertà e l’educazione. L’Italia, pur difendendosi, non compare mai in alto alle classifiche di Paese in Paese: nel 2012 la percentuale di persone che usavano internet era del 58 per cento, che corrisponde al 57esimo posto in classifica. In questa fascia dominano i Paesi scandinavi (Islanda, Norvegia, Svezia e Danimarca sono i primi), mentre passando alla penetrazione della banda larga fissa è la Svizzera lo stato modello: 41,9 su 100 la hanno in casa o al lavoro, contro i 22,1 italiani (l’Italia è 38esima, superata anche dall’Ungheria e dalla Slovenia.
I obiettivi che la Commissione Onu si era data entro il 2015: che ogni nazione sviluppi il suo piano per la broadband, che questa sia accessibile universalmente, che vi abbiano accesso almeno il 40 per cento delle abitazioni, che la penetrazione sia del 60 per cento nei Paesi sviluppati, del 50 in quelli in via di sviluppo e del 15 in quelli meno sviluppati. Come ha dichiarato a New York il commissario Paul Kagame, «oltre al 2015, i prossimi passi dovranno prevedere un uso intelligente della banda larga per migliorare la fornitura dei servizi nell’educazione, salute, settore bancario e così via. La banda larga dovrà anche aiutare i giovani nel mondo in via di sviluppo a innovare e divenire più competitivi a livello globale». 

Corriere della Sera

Budget bill stalls in Washington

"U.S. stocks were little changed on Wednesday, with the S&P 500 facing a possible fifth straight day of declines, as the lack of progress in Washington threatened a government shutdown in just six days.

Investors weighed the potential for a U.S. government shutdown against the possibility of a last-minute deal in Congress, keeping indexes near the unchanged mark. Traders also grappled with uncertainty about Federal Reserve policy after the central bank's decision last week to keep its stimulus measures intact.

"As a result, short term, there isn't a clear trade to make a big bet on."

Texas Senator Ted Cruz delivered marathon diatribe of nearly 22 hours against President Barack Obama's healthcare overhaul, which delayed Senate consideration of a stop-gap funding measure needed to fund government agencies until November.

Adding to the drama, U.S. Treasury Secretary Jack Lew warned Congress that the United States would exhaust its borrowing capacity by October 17.

Data showed orders for long-lasting U.S. manufactured goods barely grew in August, in a possible sign that companies are holding back on investments due to uncertainty over government spending. A separate report showed sales of new single-family homes rose in August but held near their lowest levels this year, as a sharp rise in interest rates weighed on the U.S. economy".

Source; Reuters

Exchange Rate Predictability

The year 1983 was a turning point in studies on the prediction of the exchange rate. Two great economists R.A.Meese and K.S.Rogoff have published a surprising study. In it they showed the difficulties of all models built so far to "explain" the behavior of the exchange rate outside the sample period, which, in itself, was not very new. The worse was to come: a purely mathematical model and without any theoretical support , called "random walk ", seemed to dominate - in terms of forecast - the sophisticated models built with the "fundamentals"! This fact has been called the "Meese-Rogoff puzzle." It has stimulated 
much of the research of the following thirty years.
After an analysis of more than 150 theoretical and empirical articles, the author, Barbara Rossi, summarizes her observations in five conclusions:

1) the successful forecast of the exchange rate, in a range outside the used sample, depends on the choice of the predictor. Although there is disagreement, in the literature, empirical evidences generally are not favorable to traditional predictors (interest rate, productivity, prices, GDP and currency). On the other hand, the estimate of the exchange rate between two countries that coordinate their interest rates under the same criterion (Taylor rule) seems more promising;

2) usually linear models seem to be more successful. In linear models of only one equation, the choice of the predictor is more important than the specification of the model itself;

3) the transformation of informational data (trend extraction, use of filters, seasonal corrections) can have an effect on the predictive ability of the model. This does not appear to depend on the frequency of the information, but it is sensitive to the choice of the country;

4) empirical results show that the choice of the model that will control the predictive ability, the horizon in which it will be made, the sample period and the method of evaluation are very important. The random walk without drift is the benchmark that must be overcome, and

5) finally, the author says: "In general, some factors (Taylor rule fundamentals and net foreign asset) reveal some ability of predictability in a shorter horizon, and other (monetary fundamentals, especially in panel models) a predictive skill at long-term horizons. She continues: "none of the predictors, models or tests shows systematic empirical support for all models, countries and time horizons. Typically, when the predictability appears, it does so occasionally for some countries and for a short period of time", to conclude: "Thus, the puzzle proposed by Meese and Rogoff, in 1983, does not seem to have been convincingly overcome so far.”

I am not qualified to assert, but I suspect that the use of Taylor rule fundamentals in the construction of exchange rates between two countries can be a victim of "petitio principii". If the hypothesis is true, it further increases the poverty of results of 30 years of active research on the predictability of the exchange rate, of which some economists seem so secure at expense of their credibility and profession.

Antonio Delfim Neto

Valor Economico

Antonio Delfim Netto is an economist and professor. He graduated, in 1951, from University of São Paulo’s School of Economics and Business (FEA). He was finance secretary for the state of São Paulo, finance minister, agriculture minister, planning minister and Brazil’s ambassador do France

Construction of new Petrobras refineries to be hired by April 2014

After a redesign conducted abroad to lower project costs, Petrobras intends to invite bids between March and April 2014 to hire services to execute the construction work of refineries Premium I and II, to be located in Maranhão and Pará states, respectively.

In an interview with Valor PRO, the real-time news service of Valor, the state-owned oil giant CEO, Maria das Graças Foster, admitted that the company is trying in the Premium refineries to extract “lessons learned so they are not repeated.” The lesson learned, in that case, is linked to the construction of the Abreu e Lima refinery, with an estimated price tag of $17 billion, almost seven times the original budget.

Ms. Graça Foster, as she’s known, said PDVSA would only join Abreu e Lima if it injects 40% of the $17 billion. She said Petrobras would not accept less. Payment in oil could be a solution, but as long as it’s upfront. “Not in installments. I need the money.”

The Petrobras CEO said that despite the recent strengthening of the dollar, the deficit in domestic fuel prices to international ones is still “relevant.” The dollar’s retreat to R$2.20 lowered the deficit, but the company’s business plan was drawn with the dollar at R$2.

Ms. Graça Foster admitted that the price difference creates financial difficulties. “Since Petrobras is investing a lot - $45 billion last year – what seems a short term causes a great deal of stress to the company,” she said, trying to dismiss the idea that the effect is temporary.

The executive said she expects the company’s production in 2013 to be below the target’s ceiling – a variation of 2% higher or lower than last year’s result, of 2.1 million barrels a day. But she expects a production leap in 2014, reinforced by nine new rigs.

U.S. New Home Sales

Softer prices are giving a lift to new home sales which jumped 7.9 percent in August to a nearly as expected annual rate of 421,000. Downward revisions, though modest this time around, appear for the third month in a row and include a 4,000 downward revision to July to 390,000 in a month that shows a 14.1 percent plunge compared to June (revised 1,000 lower to 454,000).

New homes are coming into the market and likely contributed to another dip in the median price, down 0.7 percent in the month to $254,600 which is the fourth monthly decline in a row. The year-on-year rate for the median price is up only 0.6 percent and is down from high single digit to low double digit gains earlier in the year.

The number of new homes for sale rose 6,000 in the month to an adjusted 175,000 but supply relative to sales, given the August jump in sales, slipped to 5.0 months from 5.2 months in the very soft sales month of July. But supply is up relative to June's 4.3 months and to low 4 month readings earlier in the year and against 4.6 months in August last year.

Regional sales data show strong gains in the Midwest and South and also the Northeast. Sales in the West fell sharply.

The new home market has been bumpy this year but appears to be oscillating higher. Despite higher mortgage rates and still soft jobs growth, confidence in the market, as expressed by home builders in the housing market index, is very strong. The Dow is moving slightly lower in initial market reaction to today's report.

Source: Bloomberg

Brasil:Indústria de material de construção está pessimista

A intenção de investir ao longo dos próximos 12 meses diminuiu entre empresários da indústria de materiais de construção. Em setembro, 67% manifestaram intenção de investir, patamar inferior aos 74% de agosto deste ano e aos 81% de setembro de 2012, de acordo com pesquisa divulgada nesta quarta-feira, 25, pela Associação Brasileira da Indústria de Materiais de Construção (Abramat).

O nível atual de utilização da capacidade instalada se manteve em 83% em setembro, mesmo nível de agosto, mas abaixo dos 83% vistos no mesmo mês de 2012. A sondagem apontou também que 60% das empresas estão indiferentes em relação à suas expectativas sobre as ações do governo para o desenvolvimento do setor a médio prazo. Outras 21% das empresas estão pessimistas e 19%, otimistas.

A Abramat atribuiu a queda nas intenções de investimento à incerteza sobre a desoneração do Imposto sobre Produtos Industrializados (IPI) para o setor de materiais de construção, após cinco anos de contínua desoneração. Também há incerteza sobre a velocidade de recuperação das vendas para o segmento da infraestrutura, que estiveram fracas em 2012 e neste ano.

"As empresas estão em um momento importante de planejar seus investimentos e é um momento bom para o governo anunciar a desoneração para os próximos anos", afirmou o presidente da associação, Walter Cover, em nota.

Brasil, Presidente do Banco Central nao comparte o pessimismo.

O presidente do Banco Central, Alexandre Tombini, combateu, em depoimento no Senado, as visões pessimistas de economistas do setor privado sobre a retomada da atividade econômica não apenas no curto prazo, mas também sobre a capacidade de crescimento do Brasil em prazos mais longos, que está ligada à evolução do Produto Interno Bruto (PIB) potencial.

Source: Valor Economico

"L'existence d'une bulle spéculative reste à démontrer à Paris"

L'existence d'une bulle spéculative reste à démontrer. Les prix du marché sont soutenus par un décalage important entre offre et demande.

La tendance actuelle est plutôt à la stabilité ou à une très légère baisse. Les volumes des ventes à Paris ne cessent, en revanche, de baisser depuis plus de cinq ans. Cela participe à la rareté des biens permettant aux prix de se maintenir.

En cas de forte hausse des taux, l'effet serait désastreux sur les primo-accédants. Les vendeurs seront obligés de s'adapter en baissant leurs prix.

Le marché des résidences secondaires est particulièrement touché par la baisse des prix. Cependant, les stations balnéaires majeures – Vannes par exemple – bénéficient toujours d'une demande soutenue qui permet de maintenir les prix. L'abattement exceptionnel de 25 % va permettre de voir réapparaître de nouveaux biens sur le marché.

Le Monde

Les chefs d'entreprise voient l'avenir un peu plus en rose

"A la veille de la présentation en conseil des ministres du projet de loi de finances(PLF) pour 2014, qui fait grincer les dents des ménages et des entreprises, le ministre de l'économie, Pierre Moscovici, n'a pas résisté au plaisir d'annoncer, douze heures avant l'Insee, une amélioration "substantielle" du climat des affaires en septembre. L'indicateur de retournement s'est inversé pour la première fois depuis 2011 et est repassé dans la zone positive, a précisé M. Moscovici, qui était l'invité mardi 24 septembre du journal de France 2.

"Je ne veux pas jouer Monsieur Tout-va-bien, je connais les difficultés, nous sommes confrontés à une tâche de redressement car nous avons trouvé le pays dans une situation difficile", a-t-il ajouté. Mais les Français doivent savoir "que lapolitique qui est menée porte ses fruits, que les efforts qu'ils font, portent leurs fruits".

De fait, si tout est loin d'être parfait, l'indicateur du climat des affaires, calculé àpartir des réponses de chefs d'entreprise des principaux secteurs d'activité, a de nouveau gagné 3 points en septembre pour s'établir à 94. Il reste toutefois en dessous de sa moyenne de longue période .

Dans l'ensemble des enquêtes publiées mercredi, seule celle concernant l'industrie recule d'un point à 97. Cette "pause" dans l'amélioration, pour reprendrel'expression de l'Insee, était attendue après le très bon chiffre de la production industrielle au printemps (+ 2,6 % en 2013).

"Nous attendions un contrecoup. La hausse de l'ordre de 2 % de la production industrielle, due à un fort rattrapage dans l'automobile, n'était pas en ligne avec les enquêtes, et les données de juillet ont été plutôt mauvaises", précise le patron de la conjoncture à l'Insee, qui souligne néanmoins la nette amélioration (+ 10 points) des perspectives personnelles de production des industriels".

Le Monde

China to inaugurate Shanghai Free Trade Zone on Sept. 29

China will officially launch the pilot free trade zone (FTZ) in Shanghai on Sept. 29, taking a solid step forward to boost reforms in the world's second-largest economy.

Preparation work is going smoothly, sources with the Shanghai municipal government said on Tuesday.

Covering almost 29 square kilometers, the zone will be created modeled on existing free trade businesses in the country's economic hub -- Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone.

Chinese Premier Li Keqiang said earlier this month that for the pilot FTZ, a negative list approach will be explored and priority will be given to easier investment and greater openness.

China's legislature has given the green light to the State Council, or the Cabinet, to modify laws related to foreign enterprises in the zone.

Source: Xinhua

China's petrochemical income up 9.9 pct Jan.-July

The main business income of China's petrochemical industry grew 9.9 percent to 6.60 trillion yuan (1.07 trillion U.S. dollars) in the first seven months of 2013, said the country's top economic planner on Wednesday.

The industry's net profit totaled 221 billion yuan, up 43 percent year on year, or 45 billion yuan, said the National Development and Reform Commission (NDRC) in a statement on its website.

The NDRC attributed the profit surge to refining businesses having turned losses into a profit in the Jan.-July period.

According to the NDRC, the petrochemical industry's output of crude oil, refined oil and ethylene from January to August reached 317.16 million tonnes, 195.88 million tonnes and 10.53 million tonnes, up 4.7, 5.7 and 5.6 percent, respectively.

Meanwhile, the industrial added value of large chemical manufacturers of raw material and products rose 12 percent from the same period last year. 

Source: Xinhua

China replaces five members of its central bank's monetary policy committee,

China has replaced five members of its central bank's monetary policy committee, according to a circular released on Wednesday by the State Council, China's Cabinet.

Chaired by People's Bank of China (PBOC) governor Zhou Xiaochuan, the committee welcomes five new members: Xiao Jie, deputy secretary-general of the State Council; Wang Bao'an, vice minister of finance; Pan Gongsheng, vice governor of the PBOC; Xiao Gang, chairman of the China Securities Regulatory Commission; and Hu Huaibang, president of the China Banking Association.

Other members include Zhu Zhixin, vice chairman of the National Development and Reform Commission; PBOC vice governor Hu Xiaolian; Yi Gang, PBOC vice governor and head of the State Administration of Foreign Exchange; Ma Jiantang, director of the National Bureau of Statistics; Shang Fulin, chairman of the China Banking Regulatory Commission; and Xiang Junbo, chairman of China Insurance Regulatory Commission.

The committee also features Qian Yingyi, dean of Tsinghua University's School of Economics and Management, Chen Yulu, president of the Renmin University of China, and Song Guoqing, professor of the National School of Development at Peking University.

You Quan, Li Yong, Du Jinfu, Guo Shuqing and Jiang Jianqing are no longer members of the committee, according to the circular.

Source: Xinhua

U.S. Economic Indicators Update

MBA Purchase Applications
Mortgage rates fell sharply in the September 20 week while mortgage applications rose sharply. Purchase applications jumped 7.0 percent to their highest level since July. This marks back-to-back weekly gains and points to strength this month for underlying home sales. Refinancing applications, where volumes have been swinging widely this month, rose 5.0 percent. Rates, reflecting the Federal Reserve's decision to delay tapering, dropped across all maturities with the average 30-year fixed rate for conforming loans ($417,500 or less) down 13 basis points in the week to 4.62 percent. Next housing data on the Econoday calendar will be later this morning at 10:00 a.m. ET with new home sales for August, a month when purchase 
applications were flat.

Durable Good Orders
August durables order beat expectations but July was revised down notably. New factory orders for durables in August edged up 0.1 percent after dropping a huge 8.1 percent in July. The July estimate originally was down a monthly 7.4 percent. Market expectations for August were for a 0.5 percent decline. The transportation component rose 0.7 percent after a monthly 21.9 percent plunge in July. The transportation rebound came from motor vehicles. Excluding transportation, durables orders slipped 0.1 percent, following a decrease of 0.5 percent in July. Analysts projected a 1.0. percent boost for the latest month.

Within transportation, motor vehicles rose 2.4 percent, nondefense aircraft fell 1.2 percent, and defense aircraft dropped 11.8 percent. Outside of transportation, gains were seen in fabricated metals, machinery, and "other." Components that declined were primary metals, computers & electronics, and electrical equipment.

Nondefense capital goods orders made a partial rebound in August, increasing 1.5 percent after a 3.3 percent decline in July. Shipments for this series made a 1.3 percent comeback, following a decrease of 1.4 percent the month before.

Manufacturing in August was soft outside of autos. Recent regional surveys for September have been mixed and the Markit flash PMI showed deceleration

Source: Bloomberg

GERMAN CONSUMER CONFIDENCE HITS SIX-YEAR HIGH

German consumer confidence reached its highest level in six years, even though income expectations dropped, according to the GfK forecast for October published on Wednesday.

Specifically, the GfK consumer confidence for October rose from a revised 7 in September to 7.1. Consensus had been expecting a slight increase to 7 from the 6.9 first reading for September.

GfK said that the economic expectations are on a "clear upward trend" and noted that the "willingness to buy once again improved on the record value of the previous month". 

The market research institute did note the decrease in income expectations for the second consecutive month, but clarified that the indicator continues to be at "an extremely high level"

Source: LiveCharts

Government Seeks to Show Countrywide Unit Misled Fannie, Freddie on Quality of Home Loans

According to an article published today in the Wall Street Journal:
"The government started its "Hustle" case against Bank of America Corp.arguing the bank's Countrywide unit misled executives at Fannie Mae and Freddie Mac about the quality of loans they bought in 2007 and 2008.
 The program—called the "Hustle" by Countrywide after the acronym HSSL, which stood for "high-speed swim lane" misled executives at mortgage-finance companies Fannie and Freddie about the quality of loans that Countrywide sold them, the government's lawyers argued Tuesday at U.S. District Court in Manhattan.
In his opening argument before the court, Pierre Armand from the U.S. attorney's office in Manhattan said the promise of quality loans at the Hustle program was "largely a joke," arguing that the program ignored red flags and removed controls that were in place to protect against making bad loans. The government alleges Countrywide made $165 million from the program.

Brendan Sullivan, a partner at the law firm Williams & Connolly LLP, opened his arguments on behalf of Bank of America by stating that no fraud was committed. Mr. Sullivan said the evidence will show "decent, normal people, putting their kids out to school, going to their mortgage application business where there are thousands of mortgages."

The case has pulled back the curtain on how Countrywide, the nation's largest mortgage lender until its sale to Bank of America in 2008, struggled to deal with declining lending volumes amid industry concerns over loan quality as the housing boom turned to bust. The Hustle program didn't continue after Bank of America bought Countrywide".

Alibaba decided to do IPO in New York

Chinese e-commerce company Alibaba Group Holding Ltd ALIAB.UL has decided to pursue an initial public offering in New York after talks with Hong Kong regulators broke down over a listing in the Asian financial hub, sources familiar with the discussions said on Wednesday.

The decision ends weeks of negotiations between the company, the Hong Kong stock exchange and the city's regulators over Alibaba's shareholding structure, which had delayed the launch of a sale that may be worth more than $15 billion.

The debate centered on the ability for Alibaba to list in Hong Kong and, at the same time, allow its "partners" - a group of founders and senior employees - to keep control over the makeup of its board.

The choice of New York should make it easy for Alibaba founder Jack Ma and his management team to keep a tight grip on the company with a dual share structure that's common to Internet companies including Google Inc and Facebook Inc .

"We've come to the end of dialogue with Hong Kong and we're pivoting to the U.S. to start the listing process," a company source familiar with the discussions said.

Alibaba has engaged U.S. law firms to start working on its IPO and will soon be hiring banks to manage the listing, added the company source, who was not authorized to speak publicly on the matter.

Several brokerages raised their valuation on Alibaba because of the strong earnings growth, pegging it as high as $120 billion, above the $100 billion valuation put on Facebook before its IPO last year. Yahoo has a market capitalisation of about $32 billion.

Yahoo, which owns 24 percent of Alibaba, is keen to sell part of its stake. Softbank is the company's biggest shareholder with a 35 percent stake, while Ma, former Chief Financial Officer and co-founder Joe Tsai, and other company executives own about 10 percent.

Source: Reuters