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• Wall Street Journal: Data Suggest China’s Economy Stabilizing
• “Spain’s banks are now, finally, blowing out bad real estate to bottom-feeding hedge funds”
• Fortress, Blackstone, Apollo say now is the time to sell on surge
• Fonterra pulls ‘DCD’ milk powder in Sri Lanka, disputes test
• Swiss National Bank says the cap on the Swiss franc “is the top priority”
• The Reserve Bank of Australia is growing confident about Australia’s economy over the medium term
• Reuters article: China to let banks sell off loans in prelude to possible bailout
• Bloomberg article: China Factories Turn to Undocumented Labor as Local Wages Jump
• Goldman Sachs, Morgan Stanley, Bank of America all hiring FX dealers
• Bitcoin ticker being tested for inclusion on Bloomberg
• Greece posts a budget surplus for January – July 2013

Wall Street Journal: Data Suggest China’s Economy Stabilizing Posted: 11 Aug 2013 12:48 AM PDT Just catching up on the Wall Street Journal over the weekend. Data Suggest China’s Economy Stabilizing (The Wall Street Journal is often gated, so if you're unable to access the article try a search of Google news using the headline) The main points: China showed more signs of economic resilience in July Economists are cautious about whether the fresh signs of strength are pointing toward a more sustained rebound in the months ahead Mike posted on the better than expected Chinese industrial production data late in the Asian day on Friday: Chinese industrial production July: y/y +9.7% vs +9.0% exp

“Spain’s banks are now, finally, blowing out bad real estate to bottom-feeding hedge funds” Posted: 11 Aug 2013 12:39 AM PDT A great little article from one of my favourite blogs. Admittedly I started reading this blog because of its title, and I only dip in from time-to-time. It says that Spain’s banks are now selling distressed real-estate assets to hedge funds … “And so the healing has begun in the Spanish real estate market”, “Buy Spain, buy it now.” The author quotes this article in the Wall Street Journal: Private-Equity Firm H.I.G. to Buy Spanish Real-Estate Assets (The Wall Street Journal is often gated, so if you're unable to access the article try a search of Google news using the headline) Spanish officials managing soured assets from the country’s real-estate collapse announced their first big property deal, choosing Miami-based private-equity firm H.I.G. Capital to buy a majority stake in a package of 939 homes known as Project Bull. Jeff Matthews Is Not Making This Up Mathews also adds that the UK economy is “already catching fire—believe me, it's on fire: just look at the data”

Fortress, Blackstone, Apollo say now is the time to sell on surge Posted: 11 Aug 2013 12:27 AM PDT One for the equity and equity-derivative traders: Private-equity managers from Fortress Investment Group to Blackstone Group … say now is the time to exit investments as stocks rally and interest rates start to rise. Fortress is preparing holding for public offerings Says this is a better time for selling existing investments than making new investments Apollo Global Management CEO said last month the environment is ripe for selling because  credit markets are hot and equities strong Bloomberg data shows a 20% decline in the number of private equity deals

Fonterra pulls ‘DCD’ milk powder in Sri Lanka, disputes test Posted: 11 Aug 2013 12:11 AM PDT Sri Lankan authorities ordered New Zealand-based Fonterra to withdraw milk powder Authorities said testing showed traces of the toxic agricultural chemical dicyandiamide (DCD), Fonterra has withdrawn to milk powder from sale, but has disputed the accuracy of the testing It said two batches of milk powder had been removed from shops last month … But Fonterra’s chief executive said the product was clean and safe and it was contesting the Sri Lankan results and the ban. “We are definitely fighting it, because we have clear certificates – DCD-free, stamped, when it was exported, when it was imported – all clear,” Fonterra’s chief executive Theo Spierings told Television New Zealand.

Swiss National Bank says the cap on the Swiss franc “is the top priority” Posted: 10 Aug 2013 11:58 PM PDT Jean-Pierre Danthine,the Swiss National Bank’s vice chairman, told Swiss Sunday newspaper Le Matin Dimanche “At the moment, the cap on the franc is the top priority” and that it will enforce its cap on the Swiss franc for as long as it is necessary. He said that the SNB’s cap on the exchange rate limited its capacity to act on interest rates, but, in addition, “The opposite is also true: we’re intervening on exchange rates because interest rates are at zero”. He added “On the day the SNB decides to raise short-term interest rates, there can no longer be a cap that’s being enforced” Said rates will rise again “one day” Said banks are underestimating the risks, and that a rise in rates would have a “significant negative impact on banks” Maybe the banks are underestimating the risks, but Swiss consumers seem to be more cautious, data on Wednesday showed Q3 Swiss consumer confidence coming in 10 points lower than economists forecast

The Reserve Bank of Australia is growing confident about Australia’s economy over the medium term Posted: 10 Aug 2013 07:23 PM PDT A good wrap-up from the Wall Street Journal (ungated). In summary: In its Statement on Monetary Policy the Reserve Bank of Australia has subtly altered its language, no longer saying that benign inflation gave it "scope" to cut further, but that rates will be adjusted "as needed". This altered language is a signal that policy makers are growing confident about Australia's economy over the medium term. The RBA will not be on hold as they let previous cuts work their way through the economy and wait for signs of recovery to become more apparent. - It appears to me that the future path for interest rates in Australia is, as always, data-dependent. If the ‘transition’ (from mining investment to other sectors of the economy) slows, or does not produce economic growth sufficient to propel employment gains then its back to the chopping board for the bank (inflation allowing, of course)

Reuters article: China to let banks sell off loans in prelude to possible bailout Posted: 10 Aug 2013 07:22 PM PDT This is an interesting article from Reuters. China is developing a new trading platform to  enable banks to sell off loans to a wider range of investors. At present banks have two choices for disposing of non-performing loans, sell “in private deals, mostly with big state-backed asset management firms, or keep rolling them over indefinitely to avoid booking a loss”. Hardly appealing. But the China Banking Regulatory Commission (CBRC) is working to introduce a system to allow for price discovery for loan transfers thereby increasing transparency in pricing, and so making it more attractive to potential investors. Most analysts believe Beijing will eventually be forced to use some public funds to help peel off bad loans from state banks, but the ability to draw in at least some private capital could reduce the cost of that bailout. More details at the link, and also more from the always-excellent Izabella Kaminska at FTAlphaville (read with free registration): The idea is mainly for banks to be able to shed non-performing assets from their balance sheets and free them up to support the economy with fresh credit. She also quotes one analyst as saying that if the initiative is successful it could pave the way for a significant boost to Chinese asset valuations as well as significantly revive Chinese commodity purchases.

Bloomberg article: China Factories Turn to Undocumented Labor as Local Wages Jump Posted: 10 Aug 2013 07:22 PM PDT Bloomberg reports that as wages in China have grown to help boost consumer spending factories along the east-coast export corridor are importing undocumented and lower-paid workers from Myanmar and Vietnam: "Thousands" of workers from Vietnam and Myanmar were discovered working illegally in Shenzhen between 2010 and 2012, the state-run China News Service reported, citing a local prosecutor. These workers are paid about what half a local makes No health care No pensions - Sounds familiar …

Goldman Sachs, Morgan Stanley, Bank of America all hiring FX dealers Posted: 10 Aug 2013 06:17 PM PDT Goldman Sachs, Morgan Stanley, Bank of America and others are hiring FX dealers, taking on Deutsche Bank, Citigroup, Barclays and JPMorgan Chase as volumes and volatility increase and the regulatory environment is seen as more favourable. Banks are seeking  larger share of the market. Volatility in major currencies has created opportunities for Wall Street banks to make money facilitating client trades… Competition is particularly intense among banks because the foreign exchange sector is under fewer new regulations than other areas of trading More information at the link. above.

Bitcoin ticker being tested for inclusion on Bloomberg Posted: 10 Aug 2013 06:16 PM PDT Bloomberg is testing a bitcoin ticker. The ticker is available on staff terminals under {XBT Crncy<GO>} . This is according to a ‘source inside Bloomberg’. Mt. Gox and TradeHill are pricing sources. An official confirmation is expected from Bloomberg on Monday.

Greece posts a budget surplus for January – July 2013 Posted: 10 Aug 2013 06:16 PM PDT Greece has posted a budget surplus of 2.5 billion euros in the first seven months of 2013, beating its 3.1 billion euro deficit target according to deputy finance minister Christos Staikouras in a newspaper interview. A formal announcement is expected Monday. The figures exclude local government and social security funds

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