China-Arab States Expo opens in Ningxia

 The first China-Arab States Expo, a key platform to promote the relationship between China and the Arab states, kicked off on Sunday morning in northwest China's Ningxia Hui Autonomous region.         Yu     Zhengsheng , chairman of the National Committee of the Chinese People's Political Consultative Conference, attended the exposition, which runs until Sept. 19 in the Ningxia capital, Yinchuan.

Foreign leaders, including King Abdullah II Bin Al-Hussein of Jordan, King Sheikh Hamad bin Isa Al-khalifa of Bahrain and Vanuatu Prime Minister Moana Carcasses Kalosil attended the opening ceremony.

More than 7,300 domestic and overseas officials, exhibitors, purchasers and investors from Jordan, Kingdom of Saudi Arabia, Syria, Kuwait and other countries have been attracted to the fair.

Source: Xinhua

Japan to be completely without nuclear power for some weeks

Japan will be fully without nuclear power on Sunday as Kansai Electric Power Co.'s Oi No. 4 reactor is shut down for regular safety inspections, officials said.

This will be the first time Japan is without nuclear power since July 2012, The Japan Times reported.

Inspections of nuclear reactors normally take four to six weeks.

Japan relies on nuclear power for about 32 percent of its electricity prior to the March 2011 earthquake and tsunami.

Fannie Mae and Freddie Mack, Quo Vadis?

  Saving mortgage giants Fannie Mae and Freddie Mack "was the single most important thing we did to prevent disaster—real disaster," said Mr. Paulson in a recent interview. But five years later, he adds, "it didn't occur to me that we'd be here with nothing done."
  Fannie and Freddie remain the largest single piece of unfinished business from the financial crisis. As record profits have replaced huge losses, some now question whether cosmetic changes could substitute for the more radical overhaul of the companies envisioned five years ago.
 The Obama administration, congressional leaders and the financial industry all insist that Fannie and Freddie must change. But figuring out exactly how to reshape or replace them is proving harder than most anyone imagined.
 The biggest reason is that the firms play such a central role in the mortgage market, including access to the 30-year, fixed-rate mortgage. That product, which doesn't exist in much of the world, is popular with Americans who enjoy stable payments even if interest rates rise.
 The firms don't make loans. They buy them from lenders and package them into bonds. That middleman role created deep markets for mortgage securities by matching banks with investors willing to manage the risks of holding long-term, fixed-rate mortgages.
Fannie and Freddie got into trouble because they took on more risk over the past two decades while using their political clout to beat back attempts to force them to hold more capital.
As the housing bust deepened in 2008, by August 2008,Treasury officials concluded the firms didn't have enough capital and feared what would happen if investors lost confidence in Fannie and Freddie. 
 On Friday, Sept. 5, 2008, Treasury Secretary summoned the companies' chief executives to separate afternoon meetings and told them they were being taken over. Two days later, the firms had been effectively nationalized.

Source: WSJ

USA REAL STATE. SAM ZELL's CAUTION

In an article published in the Wall Street Journal of today in an interview with one the most aggressive
real state investors of the 1990's, he gives his feeling of the state of the market today and the future.
"Sam Zell gained the nickname "the grave dancer" in the early 1990s for buying beaten-down real-estate properties and riding them to huge recoveries.
He has done relatively little buying since the market crashed five years ago, viewing prices as remaining too high, even as rivals such as Blackstone Group and Carlyle Group  made big acquisitions.
  Mr. Zell says "he has a low of just 30% of his personal investment portfolio in real-estate investments, down from 40% about seven years ago. In 1990, half his money was tied to real estate".
 "We're dealing with a world that's dramatically more volatile, and that requires more caution and care than before" 
  The 71-year-old real estate mogul has been one of the biggest, most aggressive commercial-real-estate investors for decades, accumulating a net worth of $4 billion, according to Forbes magazine. In 2007, for example, he practically defined the top of the market with his deal to sell Equity Office Properties Trust to Blackstone Group for a record $39 billion—a deal that netted him personally around $1 billion, said people close to him.

Mr. Zell's opinion is one side of a heated debate in the market, with some investors convinced values will keep rising and others arguing that economic growth in the U.S. and elsewhere has been artificially enhanced by loose central-bank policies and will slow when the easy money ends.

Commercial-property values have rebounded strongly and hit record territory this year. An index compiled by Green Street Advisors that fell 61.7 in May 2009 from 100 in August 2007 climbed back to 104.3 last month. But in recent months, prices have stalled because of rising interest rates, Green Street says".

SpaceShipTwo, la navicella spaziale per turisti

"Lo SpaceShipTwo ha compiuto il secondo volo verificando per la prima volta tutte le sue parti. Oltre l’impiego del motore a razzo ibrido, acceso nel volo del 29 aprile scorso, ora sono state verificate le parti aerodinamiche nelle varie configurazioni. Queste sono elementi determinanti perché è proprio il movimento a garantire il corretto e sicuro rientro dal balzo quasi cosmico.
La navicella pilotata da Mark Stucky e Clint Nichols è salita a 19.812 metri raggiungendo la velocità di 1,6 Mach (1 Mach è la velocità del suono). Prima era salita alla quota di 14 mila metri appesa sotto la fusoliera del jet WhitKnightTwo. Qui si è sganciata e ha acceso il motore a razzo che ha funzionato per venti secondi come previsto.
Richard Branson ha scritto  sul suo blog. «La nostra navicella è ora il veicolo alato commerciale superiore a tutti nella storia». Sarà appunto la Virgin Galactic, la società creata dal miliardario britannico Branson, a effettuare i voli ai confini dello spazio con lo SpaceShipTwo. E, dopo il successo del collaudo, lo stesso Branson ha precisato che nei primi mesi del 2014 inizieranno i voli commerciali e sul primo ci sarà anche lui.
Finora 625 persone hanno versato un anticipo per riservarsi un posto. E dopo la prova dell’aprile scorso Branson ha alzato il prezzo del biglietto da 200 mila a 250 mila dollari".

Corriere dell Sera

Herd Investing.The Financial Crisis and the Institutional Investor "herding behaviour"

"The global financial crisis caught many financial market participants by surprise. Institutional
investors, by and large, were no exception. As the crisis intensified, concerns about capital
preservation arose, and several investors responded by abandoning long-term investment
strategies, reducing risk exposures, and switching to safer asset classes, usually with the
intention to switch back as soon as market conditions improved.
 This institutional investors tended to move with the rest of the market. This “institutional herding” is what we refer to as procyclical investment behavior .

Many institutional investors have long investment horizons, which allow them to ride out
short-term volatility in asset prices. In theory, they should be able to avoid the pitfalls of
herding, which tend to hurt performance in the long run. Recent financial stress episodes
have, however, demonstrated that various types of institutional investors are not immune to
herd behavior. This “institutional herding” is what we refer to in this paper as to in procyclical investment behavior.
  Examples of Institutional Herd behavior: Pension Funds(1),Life Insurers(2),Endowment Funds(3),
Mutual Funds(4),Sovereign Wealth Funds(5) and Central Banks(6).
1. Were net sellers of equities during the financial crisis.
2. They contributed to the downward spyral  in the equities markets, they sold equities to
bolster their balance sheets.
3. Harvard endowment decreased its uncalled capital commitments by roughly
US$3 billion,
4. Some SWFs decided to reduce exposures to, in particular, U.S. and U.K. banks
in the second quarter of 2009.
5. Central bank reserve managers joined the flight to quality and collectively pulled
out more than US$500 billion of deposits and other investments from the banking
sector from December 2007 to March 2009.

 With long-term investment horizons Institutional Investors should be able to avoid  the pitfalls of
herding, which tend to hurt performance in the long run. Recent financial stress episodes
have, however, demonstrated that various types of institutional investors are not immune to
herd behavior.
During periods of global financial distress , where investors’ procyclical strategies can accentuate the fragility, of the financial system.
           In particular, prolonged very low interest rates and unconventional
monetary policy measures could push many institutional investors’ risk appetite to the point
of creating significant adverse side effects, including possible mispricing of credit risk and
underestimation of liquidity risks".

Source: IMF Working Paper
            Monetary and Capital Markets Department
            by Michael G. Papaioannou, Joonkyu Park, Jukka Pihlman, and
            Han van der Hoorn 

U.S. More sellers are testing the market after swift home-price gains YoY

In an article published today in the Wall Street Journal, the issue is if the housing inventories have reached bottom? "Housing inventories increased in August and stood just 2.5% below their levels of a year ago, offering the latest sign that more sellers are testing the market after swift home-price gains over the past year.  Half of all homes listed in August had been on the market for less than 92 days, up from 85 in July and 79 in May, but still below the median market time of 100 days last year.over the past year.
 Nationally, there were 1.98 million homes listed for sale in August, according to a report released Thursday by Realtor.com. That was up by more than 24% from the low point in February and up 1% from July. Inventories have increased for six straight months.
The report suggests that inventory may have hit a bottom earlier this year after an extended two-year decline, and home-buyer traffic has eased following a period in which mortgage rates have increased by more than one percentage point. 
Inventories in nine of the nation’s top 30 housing markets were above their levels of last August, led by Los Angeles, where inventory was up by 17.4% from a year ago to its highest level since April 2012. Inventories in Atlanta were 13.9% above last year’s level. Other gains were reported in Orlando, Fla. (up 7.1%); Orange County, Calif. (6.9%); Miami (5.1%); Philadelphia (4.2%); and Phoenix (2.8%).
 Half of all homes listed in August had been on the market for less than 92 days, up from 85 in July and 79 in May, but still below the median market time of 100 days last year".

Marc Faber : We have to look at each Emerging Market separately

We have to look at each emerging market

separately because of the diverging performances. Since 2009 we have

seen great performances in the Philippines, Malaysia, Indonesia and

Thailand, where markets went up by three to four times. On the other

hand are markets like India, Brazil or Russia, which are still down in

dollar terms by 50% from their highs. Therefore, each emerging market is

in a different position at the moment.

In my view, there has

been a huge correction in Indonesia and Thailand from the recent highs.

The market is down by around 30-35% from the April-May high, but

following a rebound, we will see further weakness.

Indian stocks,

because of the currency weakness, have already experienced a very

substantial bear market. It may last a little longer, but we surely are

coming into a buying range. 

Dilma visita o Estaleiro Inhaúma,no Rio de Janeiro

A presidenta da República, Dilma Rousseff, e a presidente do Petrobras, Maria das Graças Silva Foster, visitaram, nesta quarta-feira (11/09), o Estaleiro Inhaúma, no Rio de Janeiro. Além de vistoriar as obras de conversão da P-74, a primeira plataforma que irá para a área de cessão onerosa, e de revitalização do local, a presidenta acompanhou o início da operação assistida do Terminal de Ilha Comprida, na Baía de Guanabara. Em seu discurso para os trabalhadores do Estaleiro Inhaúma, Dilma Rousseff exaltou a indústria nacional, ressaltando que o setor naval emprega hoje mais de 70 mil trabalhadores. “Vamos mostrar ao mundo que aquela, que já foi a segunda maior indústria naval nos anos 80, voltou e vai ser uma das maiores indústrias navais do mundo”, disse a presidenta. Dilma garantiu que foi acertada a decisão de produzir no Brasil plataformas e sondas. “Acreditamos na capacidade do trabalhador brasileiro e das empresas desse país. O resultado dessa luta é o fato desse estaleiro estar de pé e produzindo”, ela enfatizou, acrescentando: “O setor de petróleo e gás será muito promissor para geração de empregos no Brasil”.  
 A conversão do navio petroleiro do tipo VLCC (Very Large Crude Carrier) no FPSO (unidade flutuante que produz, armazena e transfere petróleo e gás) P-74 é a primeira grande obra em execução no Estaleiro de Inhaúma após a sua retomada e representa o início de uma nova era. Assim como a P-74, no Inhaúma ainda serão feitas as obras de conversão das outras três plataformas destinadas aos campos da cessão onerosa, no Pré-Sal da Bacia de Santos: P-75, P-76 e P-77. Cada plataforma terá capacidade de produzir até 150 mil barris de petróleo por dia e de comprimir 7 milhões m³ de gás natural por dia. As atividades de conversão do casco da P-74 incluem a inspeção de chapas, a substituição integral dos equipamentos originais, além da fabricação e a instalação de 13 mil toneladas de estruturas novas necessárias à colocação dos módulos, das linhas de produção e do novo sistema de ancoragem, entre outros. As obras de revitalização do Inhaúma e de conversão do casco da P-74 geram cerca de 6 mil empregos. A previsão é de que elas sejam concluídas em dezembro de 2013 e agosto de 2014, respectivamente. 

Petrobras

A Petrobras informa produção de petróleo de todos os campos da companhia

A Petrobras informa que produção de petróleo (óleo, mais líquido de gás natural - LGN) de todos os campos da companhia no Brasil em julho foi de 1 milhão 888 mil barris por dia (bpd), volume 4,6% abaixo do produzido no mês anterior (1 milhão 979 mil barris). Incluída a parcela operada pela empresa para seus parceiros, a produção exclusiva de petróleo no Brasil chegou a 1 milhão 946 mil bpd, indicando uma redução de 4,7% em relação a junho.

 A produção total (petróleo e gás natural) da Petrobras no Brasil, em julho, atingiu a média de 2 milhões 282 mil barris de óleo equivalente por dia (boe/d), volume 4,9% abaixo do produzido em junho. Incluída a parcela operada pela Petrobras para empresas parceiras, o volume total produzido em julho foi de 2 milhões 386 mil boe/d, 4,1% menor do que no mês anterior.

 Somado à produção da empresa no exterior, o volume total de petróleo mais gás natural atingiu, em julho, a média de 2 milhões 490 mil boe/d, 4,9% abaixo da produção total de junho.

Petrobras informa a venda de 100% das ações da Petrobras Colombia Limited (PEC) para a Perenco

A Petrobras informa que seu Conselho de Administração, em reunião realizada hoje, aprovou a alienação de 100% das ações de emissão da Petrobras Colombia Limited (PEC) para a Perenco, pelo valor de US$ 380 milhões.

Os ativos da Petrobras Colombia que fazem parte da transação incluem participações em 11 blocos de exploração e produção em terra com produção média líquida de 6.530 boed (barris de óleo equivalente por dia) além dos oleodutos de Colombia e Alto Magdalena, com capacidade de transporte de 14.950 bpd (barris por dia) e 9.180 bpd, respectivamente.

A conclusão da transação está sujeita a determinadas condições precedentes usuais, incluindo a aprovação da Agência Nacional de Hidrocarburos – ANH.

A Petrobras continuará presente na Colômbia através de seus ativos de exploração no mar e de distribuição, além de um bloco exploratório em terra.

Esta operação representa mais um importante passo no Programa de Desinvestimentos da Petrobras (Prodesin), previsto no Plano de Negócios e Gestão 2013-2017.

Bce: «In Italia rischi crescenti per l’obiettivo disavanzo al 2,9% del Pil»

Il forte aumento del fabbisogno finanziario italiano, salito a 51 miliardi a luglio 2013 dai quasi 28 del luglio 2012, «mette in risalto i rischi crescenti per il conseguimento dell’obiettivo di disavanzo delle amministrazioni pubbliche nel 2013 (2,9% del Pil)». È quanto scrive la Banca centrale europea nel suo bollettino mensile, sottolineando che «il peggioramento è dovuto soprattutto all’erogazione di sostegno al settore finanziario e al rimborso di arretrati».
 Il rischio insomma, avverte la Bce, è che l’Italia superi di nuovo la soglia psicologica del 3% di deficit.
Ora l’allerta della Bce «per il conseguimento dell’obiettivo di disavanzo delle amministrazioni pubbliche nel 2013». «Al fine di ridurre ulteriormente gli squilibri e di promuovere la competitività, la crescita e la creazione di posti di lavoro — ha scritto la Banca centrale diretta da Mario Draghi — è necessario che i paesi dell’area dell’euro continuino a portare avanti il proprio programma di riforme. I governi non dovrebbero vanificare gli sforzi già compiuti allo scopo di ridurre il disavanzo pubblico e riportare il rapporto debito/pil su un percorso discendente».

Corriere della Sera

Brasília tem o m² de imóvel mais caro do país

As cidades de Brasília, Rio de Janeiro e São Paulo têm o metro quadrado de imóveis usados mais caro do país, segundo levantamento do portal imobiliário Agente Imóvel em 12 capitais referente a agosto.

Para comprar um imóvel em Brasília, é preciso desembolsar em média R$ 9.098 por metro quadrado. No Rio, R$ 8.158, e em São Paulo, R$ 6.921.

O preço médio mais baixo do metro quadrado é encontrado em Florianópolis --R$4.022. O valor quadrado nas demais cidades pesquisadas também fica abaixo dos R$ 5.000.

Fohla de Sao Paulo

La vigne ne cesse d'inspirer les créateurs de soins pour la peau

Bien connue pour son action sur la circulation sanguine,la vigne ne cesse d'inspirer les créateurs de soins pour la peau depuis une quinzaine d'années. 

Première à exploiter cette plante dans une crème, la marque Caudalie réussit dès 1995 à s'imposer dans les pharmacies avec sa ligne aux pépins de raisin. "A l'époque, on savait déjà que les polyphénols issus de la vigne étaient de puissants antioxydants, mais ils étaient si fragiles qu'on ne pouvait pas les intégrer dans un soin, se souvient Mathilde Thomas, cofondatrice de Caudalie. Nous avons donc travaillé avec des scientifiques de l'université de Bordeaux qui nous ont aidés à les stabiliser." L'idée naît alors que le "paradoxe français", cette exceptionnelle résistance aux maladies cardio-vasculaires dans les régions résistance aux maladies cardio-vasculaires dans, fait fantasmer le monde entier. Encouragées par le succès de Caudalie en pharmacie, de nombreuses marques extraient de nouveaux ingrédients de la vigne.

Des sarments du Château d'Yquem dans la luxueuse crème L'Or de Vie, de Dior, aux lignes entièrement inspirées par le raisin (la marque française Oenolia ou encore l'enseigne espagnole Vigne Cosmétiques), la vigne est aussi à l'origine d'un actif star de l'anti-âge, le resvératrol, décliné par de nombreuses maisons. Mais, au-delà de son efficacité reconnue scientifiquement, cette plante permet surtout d'évoquer l'art de vivre à la française. L'illusion d'un millésime et d'un repas étoilé sur la peau.

Le Monde

Brasil PBI caiu 0.33% en juhlo

Depois do firme avanço no mês de junho, a economia brasileira voltou a mostrar contração em julho. O      


 Indice de Atividade Econômica do Banco Central (IBC-Br), que busca antecipar o comportamento do Produto      
Bruto (PIB) caiu 0,33% em julho, na série com ajuste sazonal. Além disso o Banco Central reviu os dados de 

junho, que agora registram alta de 1,03% sobre maio, ante leitura inicial de 1,13%. 


A variação mensal de menos 0,33% foi melhor do que a  média projetada pelas 13

instituições financeiras consultadas pelo Valor Data, que sugeria contração de
0,6% em julho ante junho, no dado ajustado. O intervalo de projeções variava de queda de 0,1% a 1%.

Source: Valor Económico

U.S. Economic Indicators

Advance retail sales for August missed expectations, rising 0.2% month-over-month (m/m), compared to the 0.5% advance forecasted by economists surveyed by Bloomberg, but July's 0.2% gain was upwardly revised to an increase of 0.4%. Moreover, August sales ex-autosincreased 0.1%, versus expectations of a 0.3% increase, while the 0.5% gain in the previous month was revised to a 0.6% rise. Finally, sales ex-autos and gas were higher by 0.1% m/m in August, compared to the 0.3% increase that was anticipated, and July's rise of 0.4% was adjusted higher to a 0.6% increase. The report was mixed as the upward revisions to July's data was a positive sign, along with gains in August sales for autos, home furnishings, electronics & appliances, as well as department stores. However, sales of building materials and clothing were lower m/m. 

In other consumer-related news, the preliminary University of Michigan Consumer Sentiment Index fell more than expected, dropping to 76.8 in September-the lowest reading since April 2013-from 82.1 in August, compared to economists' expected dip to 82.0. The disappointing report came as both the economic conditions and the outlook components of the report declined solidly. On inflation, the 1-year outlook rose from 3.0% in August to 3.2% this month, and the 5-year inflation outlook ticked higher to 3.0% from 2.9%. 

Source:Schwab

Marc Faber: Gold & Miners Most Attractive Relative To Other Assets

Given the negative sentiment, Marc Faber likes investing in gold. Why? Because it is a buy RELATIVE TO other assets. Investors should not look at it necessarily in absolute terms, but in comparison to paintings, collectibles, the Dow Jones, S&P 500, the Russell 2000, ea.

He adds to it that the S&P 500 was trading at 1554 in March 2000 which is only 10% higher today. Gold has been an excellent investment because it is 5 times higher right now. The investment has worked on a long term basis, not for investors who joined the hype in 2011

FMI Christine Legarde at G-20 Leaders' Summit

“As noted by the (G-20) Leaders, coordinated action has done much to stabilize the world economy and the financial system. Leaders also recognize that much remains to be done to get the world economy working better. Global growth remains subdued, its underlying dynamics are changing, and market volatility and stability risks persist. Just as some advanced economies have begun to gather momentum, many emerging markets are slowing, and policy makers are grappling with challenges arising from domestic and external developments. Unemployment, in particular among young people, also remains high in many countries.
The action plan of G-20, recognizes the need for fiscal consolidation to reflect economic conditions, the need to push forward on financial oversight and regulation, and the importance of comprehensive structural reforms to support growth.
“It is also right that monetary policy remain supportive where appropriate. I am pleased that the G-20 recognizes the need to ensure that exit from unconventional monetary policy, when it comes, should be orderly and clearly communicated. Both advanced economies and emerging markets will have to address their domestic challenges in order for spillovers to be effectively managed. The IMF will continue to engage in these area".

Ms. Christine Lagarde

Group of 20 Leaders’ Summit in St. Petersburg, Russia

US Energy Revolution

The increasing U.S. production of oil and gas through unconventional extraction techniques—such as natural gas extracted from shale rock formation—could provide a boost to the manufacturing sector. However, our analysis suggests that the “pull” from the energy boom to manufacturing has been limited. Based on the scenarios in the2013 Annual Energy outlook by the U.S. Energy Information Administration, additional production of oil and gas would result in a positive contribution to manufacturing growth of around 0.1 – 0.3 percentage points per year through the end of the decade.

Nondurable goods, such as the production of chemicals or primary metals, would benefit much more than sectors that rebounded strongly from the recession, such as computers and electronics and automobiles.

Source: IMF

Il numero uno di al Qaeda: «Attacchiamo gli Usa sul loro territorio»

Al Qaeda delinea la sua strategia di attacco: «Dobbiamo continuare questa guerra sul territorio degli Stati Uniti», ha spiegato Ayman al Zawahri, il capo di al Qaeda, in un messaggio audio. Occorre attaccare, «qui e là», gli Stati Uniti per fiaccarne l'economia e limitarne le enormi spese per la sicurezza: un appello ai suoi seguaci affinché gli Stati Uniti ed i loro alleati siano attaccati ovunque.

PUNTO DEBOLE È L'ECONOMIA - Secondo al Zawahri l'economia è «il punto debole dell'America ed essa è traballante a causa di tutte le spese militari impegnate per la sicurezza» del paese. «Per fare restare l'America sotto pressione e in stato d'allerta - ha detto il successore di Bin Laden - occorre qualche attacco qui, qualche attacco là. Abbiamo già vinto la guerra in Somalia, in Yemen, in Iraq ed in Afghanistan. Dobbiamo dunque continuare questa guerra sul loro territorio». Nel suo messaggio al Zawahri ha anche invitato gli jihadisti ad agire da soli o in gruppo per condurre questi attacchi «disparati».

Corriere della Sera

World Bank:The Emerging Pattern of Global Investment

A snapshot in 2030 will reveal a world in which more than two-thirds of all global investment and
 and half of the global accumulated capital stock will be in developing economies. This is in sharp contrast with recent history. Currently, almost 70 percent of
the world’s capital stock resides in the developed world, and in 2000 developing countries’ share
in global investments was only about 20 percent.
Projections made by the World Bank indicate
that, by 2030, global aggregate investment activity will far and away reside in China—with 30
percent—while India and Brazil (7 percent and 3
percent, respectively) will account for shares comparable to the United states and Japan (11 percent and 5 percent, respectively). Developing asia
will collectively hold capital stocks exceeding 55
percent of the entire developed world’s.
This shift in investment activity toward the
Global south coincides with rapid catch-up
growth that began during the 1990s as developing countries integrated into global markets,
underwent structural transformations, and
improved their institutions. assuming a continuation of needed reforms, this catch-up process is
expected to carry on over the course of the next
two decades. in fact, the shift in allocation of
the global capital stock corresponds closely to
a similar rise in developing countries’ share of
global gross domestic product (GDp). Currently,
roughly 70 percent of global GDp is produced
in high-income countries, and that share will
decline to around 50 percent by 2030. indeed,
the capital-to-GDp ratios of developing countries as a group and high-income countries as a
group differ very little, even as the ratio can vary
substantially across individual countries: in both
groups, the size of the capital stock is about 2.5
times the size of annual GDp, and this ratio is
expected to increase gradually over time. as labor
productivity in developing countries catches up
with the higher levels that exist in high-income
countries, the global distribution of capital per
capita will become more equal.
with much higher productivity".

Source: World Bank

About spillover effects of US Fed tap of bond buying program

On the question of the spillover effects from the fed’s potential tapering, again let me remind what Managing Director Lagarde said in the context of the G-20 last week, which was, “I’m pleased the G-20 members recognize the need to ensure that exit from one conventional monetary policy when it comes should be orderly and clearly communicated. At the same time there was also a clear recognition that emerging markets need to address their domestic challenges in order to effectively manage the spillovers.”

Gerry Rice
Director
Communications Department IMF

Chinese Economists Don’t Worry About the Fed’s Taper

In article published today in the Wall Street Journal writing about the gradual end of easy money:
"The winding down of U.S. monetary easing could trigger “a mild financial crisis” in some emerging economies, but not China, says Li Daokui, an economist at Tsinghua University and a former adviser to the central bank.

On the plus side, he says, the gradual exit from so-called quantitative easing by the U.S. Federal Reserve will take the pressure off China to appreciate its currency — a good thing for exporters because it will make their goods more competitive in international markets.

On the minus side, emerging markets like Brazil, India and Indonesia — all vulnerable to rising interest rates in the U.S., and capital outflows — are big trading partners of China".

Precious Metals Prices 8.27 a.m. Eastern Time

Gold Price Futures     3 months   US$   1,217.57


Silver Price Futures    3 months   US$       21.84

MARKETS TURN LOWER AHEAD OF FED, SYRIA DEVELOPMENTS

The FTSE 100 was trading slightly lower on Friday morning, pulling back from yesterday's close of 6,586.08 - its highest closing level since August 13th - as investors await the Federal Reserve policy meeting next week and continue to digest developments in Syria. The heavyweight mining sector was providing the main drag. 

Meantime, and closer to home, the BoE´s Chief economist - Spencer Dale - has reportedly said that forward guidance is not an attempt to add stimulus by pre-comitting to lower for longer rates policy, which would push inflation above target. As an aside, the pound's trade-weighted index rose to 82.7 earlier on Friday.

"The decline in both base and precious metals is putting pressure on the mining sector this morning, keeping the FTSE 100 resolutely below the 6600 level as investors take shelter in more defensive stocks," said Brenda Kelly, Senior Market Strategist at IG. "European indices and gold prices have seen additional losses, as market expectations of a Fed asset-purchase reduction announcement next week were ramped up." 

Kelly said that falls this morning were also fuelled by rumours that former Treasury Secretary and well-known hawk Larry Summers will succeed Fed Chairman Ben Bernanke in January.

Syria meanwhile continues to be closely watched as the US and Russia continued their talks in Geneva over a plan to have Bashar al-Assad hand over chemical weapons to international control in exchange for avoiding US military action.

US Secretary of State John Kerry described his talks with Russian counterpart Sergei Lavrov as "constructive" as they began the second day of their discussions with United nations-Arab League envoy Lakhdar Brahimi.

TSE 100: Miners slump as metals weaken

Falling gold, silver and copper prices hit mining stocks this morning. Gold in particular was at a five-week low and looks set to record its worst weekly loss since June as speculation ramps up about the Fed meeting. Gloomy comments on the precious metal from Goldman Sachs also weighed on prices today, with the bank saying that gold will slip to $1,050 an ounce next year from the current $1,316 level (as of this morning).

Source: LiveCharts