Asian shares hold near 3-week high as China trade calms nerves

 Asian markets held steady near three-week highs on Thursday, as investors were cautiously optimistic after upbeat trade data from China eased concerns over the global economyand helped take some of the sting off the recent emerging markets turmoil.

The new Federal Reserve Chair Janet Yellen's reassurance on U.S. monetary policy and economic outlooks also appear to have done enough for now to underpin risk appetite.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, having erased all of its losses since late January, sparked by fear over emerging markets. Japan's Nikkei was off 0.4 percent after a 0.6 percent gain the previous day.

The recent selloff in emerging markets were driven by worries about a slowdown inChina and the Fed's tapering of its massive stimulus. As a result, investors were relieved after a strong performance in China's January trade data on Wednesday.

Adding to the positive mood, the U.S. Congress approved legislation on Wednesday to increase the country's debt limit for a year, avoiding a repeat of a nasty political showdown that led to government shutdown in October.

Investors are now looking ahead to U.S. retail sales and jobless claims due later in the day.

On Wall Street, shares were almost flat on Wednesday after a four-day rally as investors pondered whether valuations had become stretched.

Emerging market shares had a better day, with MSCI's index of emerging market stocksadding 0.9 percent.

In the currency market, the British pound stood out after a surprisingly upbeat economic outlook from the Bank of England prompted markets to price in an interest rate hike in early 2015.

The sterling edged up to $1.6610 (1.000 pounds), getting near its 2 1/2-year high of $1.6667hit late last month.

In contrast, the euro slipped to $1.3589, pulling further away from highs of $1.3684 hit on Tuesday after dovish comments from a top European Central Bank official.

ECB Executive Board member Benoit Coeure said the idea of cutting into negative territory the rate the ECB pays banks to hold their deposits overnight was "a very possible option".

Source: Reuters

ECB still assessing if lower inflation temporary - Coene

The European Central Bank is awaiting further information, particularly signs on whether the current easing of euro zone inflation is temporary, before it acts, Governing Council member Luc Coene said.

Annual inflation in the 18-member euro zone slowed to 0.7 percent in January from 0.8 percent in December, confounding expectations of a rise and matching a four-year low hit last October.

The ECB left interest rates at record low last week, but put markets on alert for a possible move in March, when the Governing Council should have new forecasts from the bank's staff extending into 2016.

"We have said at the last Governing Council that we wanted to have more information on a number of elements so we first need this information before we can say anything meaningful," Coene told Tuesday's news conference presenting the Belgian central bank's annual report.

In comments embargoed until Thursday, Coene said the fact that euro zone inflation had fallen to 0.7 percent in January was not sufficient grounds alone to act.

Coene said the governing council needed to assess whether the slowing of inflation was simply the result of a downward adjustment of prices in euro zone periphery nations to a new equilibrium.

"Once this equilibrium is found prices will resume their normal behaviour. So is it really something temporary until we have the new equilibrium or is it a real development of inflationary tendencies that is coming?" he said.

"Also the 0.7 in itself is not sufficient element to decide if we absolutely have to do something."

Source: Reuters

U.S. South, East Coast lashed again by deadly snow and ice storm

A deadly winter storm gripped the southeastern United States on Wednesday, crippling travel, knocking out power to 363,000 homes and businesses and encasing magnolia and palmetto trees in ice.

The weather was blamed for at least 13 deaths in the region, including three who were killed when an ambulance transporting a patient skidded off an icy road in Carlsbad, Texas, the Texas Department of Public Safety said.

Winter storm warnings and advisories were in place from Arkansas east to much of the Atlantic coast, the National Weather Service said. The storm is expected to sock the northeastern United States in the next two days with up to 15 inches of snow, it said.

Snow and freezing rain that were pummeling South Carolina and North Carolina created a dangerous commute for drivers in a hurry to get home as the snowfall got heavier and the ice thickened.

A possibly historic accumulation of ice as well as heavy snow was expected to add up to nearly 8 inches of frozen precipitation for Charlotte, North Carolina, and 9 inches were forecast for Spartanburg, South Carolina, meteorologists said.

More than an inch of ice was possible from central Georgia into South Carolina by Thursday morning, according to forecasters.

Traffic on interstate highways ground to a halt, and at least one snow plow went off a North Carolina highway into a ditch. The icy gridlock was reminiscent of a snowstorm that shut down Atlanta just two weeks ago.

Governors declared states of emergencies from Louisiana to New Jersey, and hundreds of schools, colleges and offices throughout the region shut down. The basketball game between arch rivals Duke University and the University of North Carolina was called off.

More than 3,300 U.S. flights were canceled and about 2,800 delayed on Wednesday, according to flight-tracking website FlightAware.com. Another 3,700 flights were canceled for Thursday, with about half of the flights to and from Washington and New York called off.

Hardest hit were Hartsfield-Jackson International Airport in Atlanta and Charlotte Douglas International Airport in North Carolina.

The U.S. Department of Energy reported that 363,000 power customers were without electricity as of mid-afternoon. More than a third of them were in Georgia, where some residents may have to wait up to a week for power to be restored, said Georgia Power spokeswoman Amy Fink.

Source: Reuters

LG Electronics unveils larger-screen phone to take on Samsung, Apple

 South Korea's LG Electronics unveiled a revamped version of its large-screen smartphone G Pro on Thursday, seeking to woo customers ahead of a rival offering from market leader Samsung Electronics later this month.

Apple Inc is also widely expected to launch its new iPhone with a bigger screen this year.

The G Pro 2 boasts a 5.9-inch screen, bigger than the 5.5 inch screen of the previous model and one of the biggest on the market. It also has a 1-watt speaker system, a first for smartphones and will be powered by a Qualcomm Snapdragon 800 processor.

The unveiling of the new G Pro had been expected later this month. LG's earlier timing may have been prompted by market leader Samsung's decision to unveil a version of its flagship Galaxy S smartphone on February 24 at the Mobile World Congress in Barcelona, three weeks earlier than expected.

The G Pro 2 will be on the market in Korea in late February. LG, the world's fourth-biggest smartphone maker by sales, did not announce a global sales target for the phone.

LG Electronics has improved products and sales sharply in recent years and its global smartphone sales jumped 81 percent in 2013, according to data from Strategy Analytics. Even so, heavy promotion costs for high-end models has seen its phone division post two consecutive quarters of losses.

Credit rating agency Moody's Investors Service downgraded LG Electronics' credit ratings last week, citing persistent pricing pressures and the high costs of marketing new products, particularly mobile phones.

U.S. Congress approves one-year debt limit extension, removing default risk until 2015

With the clock ticking, U.S. Congress approved a year-long extension of the nation's debt limit on Wednesday, removing the threat of a default until after the 2014 midterm election.

The bill with no policy demands marked a surrender of the congressional Republicans who once vowed to seek concessions in exchange for a debt limit increase, handing victory to U.S. President Barack Obama and Democrats who have refused to bargain over the issue.

The House and the Senate voted on Tuesday and Wednesday respectively to raise the government's borrowing limit until March 2015, allowing the Treasury to borrow as needed to fulfill the payment obligations. The votes were generally carried by Democrats in both chambers.

A suspension of the debt limit enacted by the Congress in October expired on Feb.7. Treasury Secretary Jacob Lew said last week extraordinary measures which can be used to slow the default risk may exhaust on Feb. 27 and the borrowing authority may not go beyond that day.

Without an increase in the statutory borrowing limit, the federal government would face the threat of an historic default that could wreak havoc on global financial markets and hurt economic recovery.

BOEHNER'S CAPITULATION

House Speaker John Boehner stunned House Republicans on Tuesday morning when he dropped a plan which would have tied the debt ceiling increase to a reversal of planned cuts to military pensions approved in December bipartisan budget deal. He floated the proposal Monday night but abandoned it after he realized it won't win enough support.

"We don't have 218 votes, and when you don't have 218 votes, you have nothing," Boehner told reporters at the Capitol Hill.

During past two weeks, the House GOP leaders had struggled to come up with policy provisions to attach to an increase in the nation's borrowing limit. Options vary from Keystone XL pipeline to Obamacare insurance provisions. As all the attempts to pass a bill solely on Republican support failed, Boehner had no choice but to allow a vote on a bill with no conditions attached.

The so called "clean" debt limit bill marked a retreat from a long-held Republican strategy of extracting concessions in exchange for a debt-limit hike, reflecting the lack of consensus and the growing sense of urgency for Republicans pressed by a Feb. 27 deadline.

The showdown which led to a government shutdown last October undercut Republicans position and arguing power. House Republican leaders who had drawn a lesson from the hardening realization, sought to shield themselves from blame for another round of crisis- like fiscal uncertainty.

NEW ERA OF FISCAL TALKS?

In a statement welcoming the vote, Lew said "this week's action combined with the two-year budget agreement and the omnibus spending bill - all of which passed Congress with bipartisan majorities - will provide certainty and stability to businesses and financial markets and should add momentum to the economic growth forecasted in 2014."

Republicans have used the tactic of default threat over the past three years to gain budget concessions. Bitter partisan brinkmanship resulted a deal in 2011 forcing 2.1 trillion dollars spending cuts over a decade. The fight also cost the United States its triple-A credit rating from Standard & Poor's.

This week's actions are relatively calm and less confrontational compared with the past showdowns. Shifting from bold demand of grand bargain on taxes and spendings, Republicans pushed for modest concessions.

Ahead of this year's midterm elections, Republican leaders, who are cautious toward engaging in any fiscal battle which they are not likely to win, turn to pin their hopes on the troubled rollout of Obamacare and the unpopularity of the healthcare law. They would also exploit the underlying weakness in the labor market and the economy to batter the Obama administration and fortify themselves.

Source: Xinhua

A responsible, unbiased America is always welcome in East Asia

Arriving against the backdrop of rising tensions in East Asia, U.S. Secretary of State John Kerry on Thursday kicked off his fifth Asian trip since taking office a year ago in another move to carry out President Barack Obama's "Pivot to Asia" strategy.

However, he would find himself further disappointed if he simply tries to take a tougher stance on China, as reported by some Western media, and continues to appease his traditional ally Japan, the real trouble-maker in the region.

If Uncle Sam truly wants to play a constructive role, the top U.S. diplomat should bear in mind that a responsible and unbiased America is always welcome in East Asia, but any one-sided appeasement would ruin his efforts and fundamentally erode regional stability, which would in the end jeopardize Washington's own interests.

For one thing, appeasement to Japan would embolden hawkish Japanese Prime Minister Shinzo Abe to take more provocative and aggressive moves, which will surely annoy not only China, but also South Korea -- which, while another U.S. ally and a main pillar of "Pivot to Asia," at the same time has bitter territorial and historic disputes with Japan.

For another, a more provocative and aggressive Japan nurtured by U.S. appeasement would cause turbulence in building a new type of major-power relations between China and the United States as agreed by Obama and his Chinese counterpart, Xi Jinping, last year.

As a rising power sticking to peaceful development, China -- an interlinked and essential political and economical partner of the United States -- has been sincere to seek a stable and productive "new model relationship" with the American side.

Washington is expected to show equally sincere respect and care for China's core interests over its territorial and historic disputes with Japan.

It has to be noted that the "harder U.S. line on China" remarks made by Kerry's top aide Danny Russel before his trip were not constructive because it is Japan rather than China that should be blamed for the rising tension in the region.

The Obama administration should take an equal and unbiased stance when dealing with China, Japan and South Korea. It would be better an offshore balancer rather than a direct competitor, for its biased stance would bring political appeasement, which goes against the stability and prosperity of the region.

Kerry's Asian trip offers a rare opportunity to the United States and regional stakeholders for better mutual understanding. Hopefully, it could pave the way for positive cooperation in the region. After all, the Pacific Ocean is big enough for cooperative China-U.S. relations.

Source: Xinhua

China's new energy vehicles fueled up

A campaign to put more new energy vehicles on the streets of China's cities has set new goals in the hope of stirring up a disinterested domestic market.

A latest announcement from the central authorities included 12 more cities in a program to advance the use of environmentally friendly cars, taking the total number of cities and regions involved to 40.

Given lackluster national sales in 2013, the cities - including Beijing - having been set specific sales targets and are expected to act as icebreakers, getting the sector's frozen situation on the move again.

Cities in eastern regions are required to promote not less than 10,000 units by the end of 2015, while assignments for the rest were set at 5,000 units.

Beijing and Shenzhen have their own targets of 35,000 units, pushing up the total for the 40 cities to around 320,000 units, according to Hongyuan Securities' calculation.

That means at least 160,000 units of new energy cars should be sold this year, over nine times last year's national sales. In 2013, sales of new energy vehicles stood at just 17,642 units, according to the China Association of Automobile Manufacturers.

Although the targets seem implausible, analysts still have faith that the market will take off in the next two years. A research report forecast that the central government would implement an array of measures to guarantee target will be met.

The Ministry of Finance (MOF) has made the first move by renewing subsidies for new energy passenger cars in 2014 and 2015.

The MOF also demanded that local authorities speed up improvements to infrastructure and forbade any preferential treatment for local auto makers.

Echoing the ministry, local governments are pushing forward with favorable measures during their annual legislative conferences, with 12 provinces strongly supporting new energy vehicles.

The government of northwest China's Shaanxi province has signed a preliminary agreement with Samsung SDI of the Republic of Korea to establish China's largest car battery plant and expect to break ground in the second half of this year.

Beijing will construct five large to medium-sized charging stations and 35,700 charging posts for pure electric vehicles and plug-in hybrids, as well as two hydrogen stations for fuel cell cars.

Benefitting from top-down policies, China's auto manufacturers are making their own plans to expand the new energy vehicle market.

BYD Auto, a Chinese automobile manufacturer based in south China's Shenzhen, has strong sales of electric buses and taxis, which are easily seen in Shenzhen and in the provinces of Shaanxi and Hunan.

The proportion of new electric coaches has grown quickly from 2 percent in 2010 to 9.9 percent in 2012. The figure is expected to approach 20 percent in 2013.

Jia Xinguang, an independent auto analyst, believes electrification of public transportation services should be supported by government policy.

Hongyuan Securities made similar conclusion, predicting 20,000 electric coaches would be sold this year and 40,000 in 2015.

Electric family cars still have a bumpy road ahead, according to the brokers, as lagging infrastructure, safety concerns and tradition made price-sensitive consumers hesitate.

Tesla Motors, whose high-performance electric cars have generated a buzz in the U.S. and Europe, is bringing confidence to Chinese car buyers and improving their ecological awareness.

Zhang Junyi, an auto analyst with Roland Berger Strategy Consultants, said that "Tesla could be a catfish put into the sardine pool of China," adding dynamism into the sector.

Source: Xinhua

BoE expected to raise interest rate in second half 2015: experts

Although the Bank of England (BoE) has revised its forward guidance policy, scrapping its 7 percent unemployment target, the central bank will not raise the benchmark interest rate until the second half of 2015, said economists in London Wednesday.

During the press release of its quarterly Inflation Report, Mark Carney, the governor of BoE said the central bank would now be looking at wider range of indicators, including wages, labor participation, productivity and unemployment rate, as the policy targets.

He said the recovery is gaining momentum and better than expectation, but there was still "scope" for the economy to maintain the interest rate at record low of 0.5 percent, and the assets purchasing plan would not be scaled back until the base rate rising.

Following Federal Reserves, British central bank implemented the forward guidance policy last August, asserting to remain the ultra low interest rate target and 375 billion pounds (621.67 billion U.S. dollars) quantitative easing policy until unemployment rate hit the 7 percent threshold.

Peter Spencer, chief economic adviser to the EY ITEM Club, a London-based independent economic think tank, commented that "Today's update to forward guidance was inevitable, with the recent unemployment having forced Mark Carney's hand."

BoE has also raised its economic growth forecast for 2014 to 3.4 percent, revised from 2.8 percent it made previously. In medium term, however, unemployment rate in Britain will sink to 6-6.5 percent, down from 7.1 percent in the three months to last November.

"Carney has insisted that rates will remain low for some time, which should put the bed the uncertainty surrounding the immediate path of monetary policy. But the outlook for the next couple of years is less certain and there will be an onus on BoE to steer the markets through greater levels of communication, in particular more interviews and speeches," said Spencer in his email comment.

Spencer also said BoE's new guidance for the pace of tightening do not alter their view that the first rate rise will come in the third quarter of 2015, because the central bank wants to sustained pickup in real wages and a more balanced recovery.

Jonathan Loynes, Chief European Economist at Capital Economist, also told Xinhua that the basic message that BoE is in no hurry to tighten monetary policy, and will tread very cautiously when it does.

The central bank will seek to use policy to absorb the economy's spare capacity, and there is scope to use up spare capacity further before raising rates, said Loynes.

Even "when BoE raises rates, it will do so only gradually. Any rises in rates will be limited, and that the shock of asset purchases will remain unchanged until rates rise," added Loynes.

The London-based economic research company remains its forecast on the first rate hike happening late next year.

Source: Xinhua

China's fundamentals healthier than other EMs: Deutsche Bank

China's economic fundamentals are much healthier than other emerging markets (EMs) like Argentina and Turkey, Deutsche Bank said in a report on Wednesday.

Since the beginning of December, the MSCI Emerging Markets index, a key indicator of equity market performance, has declined 13 percent.

The Chinese H share index has dropped by 16 percent during the same period, close to the falls in the country equity indices of Turkey (22 percent) and Argentina (19.8 percent), and sharper than that of Brazil (12.7 percent).

Sell-offs in many emerging markets, especially Turkey, Argentina and Brazil, were triggered by their sharp currency depreciation. This was caused by the United States' tapering of its quantitative easing policy,market fears of an external debt crisis, the negative impact of local rate hikes, high inflation and potential economic contractions, as well as political instability.

"It appears that the market believes that China's economic situation has deteriorated by as much as those in Argentina and Turkey in recent weeks. Some investors are now asking us when China will ease its macro policy to stimulate the Chinese economy, which is a question no one in the Chinese government is talking about, simply because there is no such need." read the Deutsche Bank report, by Ma Jun, its chief economist for Greater China.

"We think this market perception of China is wrong. We strongly believe that China's economic fundamentals are much healthier than most other EMs and China is one of the least vulnerable EM economies to U.S. tapering in 2014," wrote Ma.

The report argues that China's political situation is stable, partly due to the success of the anti-corruption campaign, while other EM countries, such as Thailand, Turkey, South Africa, India and Brazil, are now either experiencing serious political challenges and/or facing very uncertain election outcomes.

In addition, China is implementing the most aggressive structural reforms in decades, including necessary ones to address the country's financial risks. This determination is not seen in most other EMs due to political stalemate, according to the report.

Source: Xinhua

Kennedy pledges to help reduce burden in Okinawa

US Ambassador to Japan Caroline Kennedy has told the governor of Okinawa that she will cooperate in reducing the burden of US military facilities on communities in the prefecture.

Kennedy arrived in Okinawa on Tuesday for a 3-day visit, her first there since assuming the post last year. On Wednesday, she met its governor Hirokazu Nakaima.

At their meeting, Nakaima said hosting more than 70 percent of US military facilities in Japan has caused Okinawa to suffer crimes, accidents and environmental problems.

Source: NHK

US approves shale gas exports to Japan

Japan has received permission from the US government to import natural gas from the southern state of Louisiana. US officials have now approved all plans for gas exports involving Japanese firms.

The US Department of Energy gave the go-ahead on Tuesday. The project in Louisiana involves Japanese trading firms Mitsui and Mitsubishi, and the shipping company Nippon Yusen.The firms expect to ship 8 million tons of natural gas to Japan each year, starting in 2017. Tokyo Electric Power Company will use some of the gas.

Source: NHK

Alibaba to boost presence in digital mapping sector

Alibaba is making a move to boost its capabilities in the digital mapping sector. Digital mapping takes large amounts of data and translates them into virtual images much as Google Earth does. Alibaba made an offer to acquire Beijing-based AutoNavi Holdings in a deal valuing the company at about 1.6 billion U.S. dollars. The offer edged out Alibab's domestic competitors Baidu and Tencent, and could be bad news for U.S. tech giants Google and Apple.

China's internet juggernaut may just get bigger. Alibaba Group, known as China's Groupon, Ebay, Twitter and Paypal combined, could soon also become the Google Maps and Mapquest of China.

Alibaba already owns 28 percent of digital mapping service AutoNavi, and has offered to acquire the remaining 72 percent for $21 dollars per share.

"Most of Alibaba's merchants are national or international exporters and importers. So the more local merchants have been using Google Maps and Mapquest in order to direct customers to their stores and locations. This basically means that for the first time now, Alibaba has its own in-house integrated solution for its own merchants to plug in map applications in order to guide customers to those local merchants," said Sam Hamadeh, CEO of research firm PrivCo.

The move points to Alibaba's focus on mobile growth, but it's also part of a broader strategy to edge out competitors Baidu and Tencent. Google and Apple would also likely lose out in this digital land grab.

"It's a loss to Google Maps, certainly, but I think the biggest loser in this is Apple," Hamadeh said. "Apple, finally after years of trying, finally got a cellphone distribution deal with China Mobile. China Mobile is actually one of the largest customers of AutoNavi... I think the natural acquisition would have been the leading mapping provider in China which is AutoNavi and Alibaba beat them to it."

The acquisition would also better position Alibaba in what's known as O2O commerce integrating online commerce, with offline commerce. This would in theory lay the platform for consumers to use smartphones to locate nearby stores, and then use Alibaba's own payment service Alipay to complete transactions, expanding Alibaba's already massive ecosystem.

PrivCo estimates that the AutoNavi acquisition will add $3.4 billion U.S. dollars to Alibaba's IPO valuation, bringing it to $138.4 billion U.S. dollars.

Alibaba is expected to file for an IPO in March, and list in May.

Source: CCTV

China land prices surge

Several new property projects got listed in the market in January under unreachable price tags. It was a surprising result after a year-long property curb. But some analysts still find that the overall market is cooling.

Housing prices in China have once again started to jump this year. Home buyers are questioning the effect of tough curbing measures employed in 2013. The culprit could be the role land plays in local governments' finances.

"The marketization measures promised by the government haven't taken effect yet. And the old curbing measures are still ongoing. So, now it's a blank period when the policy sentiment is unclear. More importantly, local governments still see land sales as a major source of income. So, they're still actively leasing land," said Chen Aipin from Shenzhen Housing Research Association.

Looking ahead, China's surging property market may have finally hit the skids. Sales declined sharply in January compared to December even when controlling for softness caused by the Spring Festival holiday. That's according to China Confidential, a Financial Times research group. Official data shows that prices remained high in December, but would fall in the coming months.

Property-sector loans accounted for one-third of total loans last year but a slowdown could mean trouble for real estate developers. That's because many borrowed through shadow finance channel and could struggle to pay back retail investors who effectively loaned to them via wealth management products. A lot of that investment has flowed through China's shadow banking system, the unregulated credit that allows banks to shunt loans to dodgy borrowers.

Housing investment remains a big engine in China's economy. Slower growth could help end China's dangerous reliance on credit-backed investment but an abrupt slowdown would rattle global markets and throttle commodity prices.

Source: Xinhua

China's latest service trade data exceeds expectations

China's services trade saw a sizeable boost as it grew nearly 16 percent last year.

The company that Arnaud Sebban works for has been designing and building warehouses in China for 17 years. The Shanghai-based company has already expanded its warehouse services to many other cities including Tianjin and Guangzhou. Sebban says they ended up with four-fold growth last year continuing investment in logistics infrastructure.

"To be frank, a lot of competitors face a very difficult time in 2013, because of a slow down in investment from Europe and the U.S.. We mananged to pass through this crisis, thanks many to the huge investment that arises in China in the logistics sector. So we see a very good future in this field for the next five years," said Sebban, Business Development Director at GSE.

Authorities say that combined domestic and foreign investment in logistics warehouses reached 300 billion yuan in the first three quarters of last year in China, up nearly 40 percent year on year.

One analyst says structural improvement in many industries have become a main driver helping to grow the overall service trades market.

"With economic development and structural improvements in industry, industrial jobs are becoming more professional," said Prof. Qiang Yongchang at Fudan University. "In making electronic chips, for example, there are now many companies that provide wiring design services. They're everywhere and will design whatever you want. The more professional the jobs become, the greater the demand for such services will be."

China's Ministry of Commerce says that market passed the 500-billion-yuan mark the end of last year.

Source: CCTV

Bad-loan troubled Italian banks prepare for EBA test

The ongoing financial crisis has almost ended for much of the eurozone and many of its member countries are expecting their economic conditions to improve this year. However, that’s not the case in Italy where numerous banks continue to struggle.

The central bank of Italy says non-performing loans or loans least likely to be repaid to Italian banks have reached 150 billion euros. That’s roughly equal to 10 % of Italy’s GDP. The alarming level of bad loans resulted from the economic crisis.

Two of Italy’s largest banks -- Unicredit and Intesa Sanpaolo -- carry non-performing loans of 47 billion and 55 billion euros respectively. That’s almost two-thirds of the total. Meanwhile, Monte Paschi di Siena, Italy’s third largest bank, lost 730 million euros in trading derivatives from 2006 to 2009 and was bailed out by the government last year. The government has had to intervene again as the situation worsens for Italian banks in the wake of the crisis.

The European Banking Authority has decided to examine 124 banks in the European Union, 15 from Italy.Many of the banks are said to have decided on self-improvement measures in advance of the exams.

Besides creating bad banks, it’s estimated that Italian banks may need 6.5 billion euros in recapitalization to meet the minimum 5.5% capital requirement set by the EBA. The stress tests will take months to assess the solidity of Europe’s banks. The results will be released in October.

Source:CCTV

Meet Alphaworks, The New Crowdfunding-Inspired Investment Platform From betaworks

As crowdfunding swings into the mainstream, the folks at betaworks are dreaming up new and creative ways to leverage the power of the masses. A new venture called Alphaworkstakes the traditional crowd-funding model, as made famous by Kickstarter and Indiegogo, and offers equity to backers instead of a product.

Here’s how it works:

Alphaworks will start out with three “sponsors,” (betaworks, SV Angel, and Lerer Ventures) who will structure venture deals as they normally would. But instead of gobbling up all those shares on their own, a chunk of the round will be left open.

This is where it gets interesting.

Let’s use See.Me, the pilot venture deal for Alphaworks, as an example. See.Me has an active user base of designers, photographers, filmmakers and creators who can share their work and earn money from it on See.Me’s platform. For now, See.Me generates revenue by taking a 5 percent transaction fee on tips and donations made from user to user, but eventually the company will get into postcard creation and distribution. After that, See.Me’s printing efforts will extend into T-shirts. (Wearables, FTW!)

The company is raising a $1.25 million Series A from betaworks, Founder Collective, OATV, Box Group, and potentially accredited investors on the brand new Alphaworks platform.

Of the $1.25 million, $1.1M has already been committed by the above investors, while $150K worth of shares has been left open to Alphaworks backers purchasing equity. A small number of shares will be reserved for non-investor types who are active on the See.Me platform, and will be offered in the form of a grant.

See.Me is using the Alphaworks site, the betaworks site, and its own website to promote the initiative.

For community-based products, like marketplaces, games, and social networks, this is the first time crowdfunding has been a viable way to raise capital.

“What excites me most is the potential for Alphaworks to be used by non-tech companies,” said See.Me founder William Etundi Jr. “The local coffee shop or book store or band can stay alive and grow because they’re owned by their community and fans, and that’s something really special.”

Of course, there are obstacles.

“We’ll have the same challenge that a lot of platforms and services have in the earliest stage which is tracking your most passionate and best users, because they’re the basis of a community,” said SVAngel’s David Lee.

Though the JOBS act has opened up lanes for this type of financing, the law still requires that only accredited investors can purchase equity. To give you some perspective, Nick Chirls (who heads up investments at betaworks) has been closing deals for a few years now, but isn’t technically an accredited investor.

But betaworks expects legislation to change very soon, opening up the opportunity to purchase equity to even more people.

“It actually makes sense that only accredited investors would be allowed to by securities,” said Ken Lerer. “When it comes to investments, people should only move forward with both eyes wide open, and be able to afford the possibility that they might lose their money. As a person, and not as a professional investor, I would never want to have people invest in something when they can’t afford to lose the money.”

Alphaworks was built to simplify the legalese and complexities of trading securities officially, so that investors don’t need to worry about the fine print. They simply choose the number of shares they’re interested in, and pay through ACH.

betaworks, Lerer Ventures and SVAngel have invested $1.5 million in Alphaworks.

“Philosophically this is so consistent with what we do at betaworks,” said John Borthwick. “We are all users, and we love the businesses we build and invest in. With Alphaworks, we can open other users up to being owners.”

Source: TechCrunch

Marc Andreessen: Tech Is Still Recovering From A Depression

Venture capitalist Marc Andreessen, Palantir co-founder Joe Lonsdale and Goldman Sachs COO Gary Cohn sat down today at the Goldman Sachs conference in San Francisco, to talk about the thing investors always talk about: Tech.

The Netscape founder, taking the same stance he’s had for years, was ever the ebullient optimist. (Because what else are VCs paid to do?)

He argued that advances in mobile and chip-making technology signaled exponential expansion of the market. He said tech isn’t overhyped and could have “decades” of growth ahead of it. Echoing economist Carlota Perez’s research, he said world-changing technologies like the web usually settle into a more mature deployment phase after an initial period of hype and investor frenzy.

Andreessen was hopeful about how the Internet of Things could transform the way people live, and credited Moore’s law with the potential to put a chip in everything: “What if we chipped every kid? What if we chipped every dog?”

Both Andreessen and Lonsdale said this Cambrian explosion of software and hardware companies like Anki and Oculus VR (both A16z investments) is a boon for big data and security startups.

Andreessen is famously bullish on Bitcoin.

“I would not encourage your grandmother to put her life savings in it,” he said. “[But] every single smart computer science person I’ve had look into it has reached the same conclusion — it’s a fundamental breakthrough in technology.”

He gushed: “For the first 20 years of the Internet, you couldn’t do this … Bitcoin is the first Internet-native approach of dealing with money. He said that corrupt governments and flimsy central banking systems would be Bitcoin’s true test.

“The prospect of a new technology is a big deal once you get out of the West,” he said.

Lonsdale used Bitcoin as an example of “how industries work” and “how they should work” and views healthcare and education as some of the biggest targets for reform.

“It’s very clear that all these systems were built back in the 70s and 80s. You’re seeing these giant gaps that are being filled in.” He was also weary of social media investments in 2014, because he wants entrepreneurs to make bigger bets.

Andreessen said our current moment in time fits right into Perez’s model of technological and societal change.

Andreessen said we’re in the “deployment” phase. He brought up Perez’s cycle of new fundamental technologies: At first they’re not taken seriously, then way too seriously, then there’s a financial crash and then the same amount of seriousness.

“Tech is recovering from the depression,” Andreessen said, referring to the 2008 financial crash, and insinuating that we are now in a sweet spot. “The ratio of public tech PEs [price-to-earnings ratios] versus public industrial PEs, tech is undervalued. Relatively, tech PE ratios are really low. I know a tech company with a PE of six. We’re so far away from bubble territory that it’s unfair to compare this to the late 90s.”

Source: TechCrunch

Dance:Tanyeli ,Turkish belly dancer on Turkish TV

US Equity Markets and US Treasuries Data

"The major U.S. indices closed the trading session in mixed fashion following yesterday's impressive surge for stocks, which coincided with testimony from the Central Bank's new Chairwoman Janet Yellen signaling that the Fed will continue its highly accommodative policy. The recent rally for stocks paused, despite some stronger-than-expected Chinese trade data and as both Legislative bodies passed a "clean" measure to suspend the debt limit on the federal government's borrowing authority until March 2015, sending it on to President Obama to be signed into law. Treasuries were lower as the lone release on the domestic docket revealed a decline in weekly mortgage applications. In light equity news, Deere & Co's better-than-expected quarterly expectations were offset by agriculture demand concerns, while Dow member Procter & Gamble Co trimmed its profit outlook. Gold and the U.S. dollar were nearly unchanged, while crude oil prices were higher".

U.S. INDICES			Value				Change
	DJIA			15963.94				-30.83
	Nasdaq Comp.			4201.29				10.25
	S&P 500			1819.26				-.49
	NYSE Advancing Issues						1761
	NYSE Declining Issues							1290
	NYSE Trading Volume							3.3 bln
	NASDAQ Advancing Issues							1358
	NASDAQ Declining Issues							1170
	NASDAQ Trading Volume							2.0 bln

As of 04:00 p.m. Eastern

	U.S. TREASURIES			Yield				Change
	3-month bill			0.05%				n/a
	6-month bill			0.09%				n/a
	2-year note			0.35%				- 1/32
	5-year note			1.57%				- 8/32
	10-year note			2.76%				- 14/32
	30-year bond			3.72%				- 23/32

Source: Schwab