Kaput. Fini. Terminado. 完. законченный. Done. Over. No more.
Dan Harris writes: Not sure why nobody has just come out and said this yet, but Hong Kong as an international business and financial center is no more. I take no comfort in saying this because I have many friends in Hong Kong and I’ve always loved going there, but Hong Kong’s special position is over. Kaput. Fini. Terminado. 完. законченный. Done. Over. No more.
For the last few months I have been relentlessly asking everyone I know in Hong Kong or who used to be in Hong Kong or who at one time contemplated setting up a business in Hong Kong how what has been happening in Hong Kong has and will or would impact their doing business in Hong Kong. Based on those responses and on my own experience with how international companies operate, I foresee the following:
Companies that were deciding between Hong Kong or Singapore for their Asian headquarters will choose somewhere other than Hong Kong.
Growing companies with offices in Hong Kong and with offices somewhere else in Asia will increase their hiring outside Hong Kong and decrease or eliminate their hiring in Hong Kong.
Companies with offices in Hong Kong and with offices somewhere else in Asia will be move personnel from their Hong Kong office to their other offices.
Fewer contracts will be drafted with Hong Kong as the venue for arbitration.
Companies will move their Hong Kong bank accounts elsewhere. It is no coincidence HSBC stock hit its 52 week low today.
Travelers will choose somewhere other than Hong Kong as their Asia stopover. It is no coincidence Cathay Pacific stock hit its 52 week low today.
Hong Kong stocks dived on Friday morning after vote counting indicated a win for the “Leave” camp in the referendum on Britain leaving the European Union.
The Hang Seng index nosedived 4.67 per cent or 974.22 points, trading at 20,132.02 at Friday’s morning close. At one point, the index lost 1,023.34 points or 4.9 per cent. The H-share Index also fell 4.58 per cent or 402.21 points to 8,382.86.
Pound sterling fell sharply by more than 12 per cent in morning trade to its lowest level in 30 years on the Brexit news, with analysts believing the currency has no hope to bounce back in the near term.
Chinese yuan also fell to a five year low with onshore yuan down 0.54 per cent to trade at 6.6101 before bouncing back to 6.6091 yuan per US dollar at 12.30am, while the offshore yuan down 0.79 per cent to trade at 6.6360 yuan per US dollar. Read the rest of this entry »
In its bluntest warning to date on the costs of policy inaction, the IMF said “financial and economic stagnation” could take hold unless governments prevented a “pernicious feedback loop of fragile confidence, weaker growth, low inflation and rising debt burdens” from forming.
José Viñals, the head of the IMF’s financial stability division, said a prolonged slowdown could knock around 4pc off global output relative to current expectations over the next five years amid repeated bouts of market turmoil.
Mr Viñals said a $1.3 trillion (£912bn) corporate debt timebomb in China also posed “potentially serious challenges” to financial stability if defaults pushed banks over the edge.
The IMF’s global financial stability report said a “loss of market confidence” would drag global bourses into a bear market.
Under this scenario, Stocks in the UK, US, eurozone and China would lose a fifth of their value over two years, it estimated.
The triple threat of slower growth, rising risks from China and diminished faith in policymakers’ ability to prevent a fresh downturn meant households and businesses were likely to save more and spend less in the uncertain global environment.
Economic powerhouses such as China and India would see output losses of more than 4pc by 2021 compared with current IMF forecasts, it said, while world output world be 3.9pc lower relative to the baseline.
“This would be roughly equivalent to foregoing one year of global growth, said Mr Viñals.
Low inflation and nominal growth would also push debt burdens in struggling countries such as Greece and Japan to fresh highs.
This would “entrench secular stagnation worldwide” the IMF warned.
Mr Viñals called for a “more balanced and potent policy mix for improving the growth and inflation outlook”.
He urged policymakers in the eurozone to help banks deal with an “elevated” number of so-called non-performing loans – where debtors are usually three months behind on payments.
In China, the IMF called for an end to implicit subsides that allowed zombie companies to remain in business. It also said Beijing should equip regulators with the tools needed to police China’s increasingly complex financial system.
“Much is at stake. Additional measures are needed to deliver a more balanced and potent policy mix. If not, market turmoil may recur and intensify, said Mr Viñals.
“Monetary policy was becoming “overburdened”, the IMF said. Growth-friendly fiscal policies and wider reform would be needed to support the recovery and boost investment and consumption. Read the rest of this entry »
Apparently, the two had discussed Emanuel’s plans to go to Cuba backstage before the event, but Allen spilled the beans with this question.
Chicago Mayor Rahm Emanuel became angry with Politico reporter Mike Allen on Wednesday for revealing his vacation plans during a Playbook Breakfast event.
“Well, first of all, thanks for telling everybody what I’m going to do with my family. You just had a private conversation with me, and now you decide to make that public. I really don’t appreciate that. I really don’t…I’m expressing to you now publicly my displeasure.”
Apparently, the two had discussed Emanuel’s plans to go to Cuba backstage before the event, but Allen spilled the beans with this question.
“Headed these holidays to Cuba, why?” Allen asked.
“Well, first of all, thanks for telling everybody what I’m going to do with my family,” he said. “You just had a private conversation with me, and now you decide to make that public. I really don’t appreciate that. I really don’t … I’m expressing to you now publicly my displeasure.”
Ed Driscoll writes: “Bachelor Pad Economics,” Aaron Clarey tells me about his new book in our latest podcast interview, is focused upon “maximizing your amount of time on this planet to spend on you and leisure and not be slaving away eighty hours at the office and just so you can afford that big mansion in the suburbs or the BMW SUV.”
Clarey stresses the importance of minimalism in his financial planning…
(18 minutes and 51 seconds long; 16.5 MB file size. Right click here to download the interview to your hard drive. Or right click here to download the 3.10 MB lo-fi edition.)
“I’m the biggest capitalist there ever was. But truthfully, the only thing that really matters, the true source of happiness is other humans. And the great thing about humans is they’re free.”
Is it possible to enjoy America’s decline from your swank bachelor’s pad, knowing that you’re financially prepared to ride out the worst of the remaining years of the Obama era?
Call it the new China Syndrome: Although Asia’s biggest economy is slowing down markedly, credit continues to surge. Dead-end projects and dying industries are sucking up an ever-larger portion of new credit, while more productive borrowers are starved for funds.
Nowhere is this more evident than in China’s shadow banking sector, the non-bank financiers that have pumped credit into the economy at a spectacular rate. Trust companies – firms that sell investment products to Chinese savers and use the proceeds to make loans or buy other types of assets – have posted the fastest growth.
A Reuters examination of proprietary data shows that as little as half of trust loans issued in 2012 were used to finance current economic activity, such as a new investment project or increased production at an existing factory.
The other half may have been used for refinancing old debt that funded past projects but is…
We’re just inviting you to take a timeout into the rhythmic ambiance of our breakfast, brunch and/or coffee selections. We are happy whenever you stop by.
pundit from another planet 