Friday, January 15, 2016

Chinese consumer electronics giant Haier is buying GE's appliance unit for $5.4 billion

Chinese consumer electronics giant Haier is buying GE's appliance unit for $5.4 billion

General Electric GE AppliancesJoe Raedle/Getty ImagesGeorge Daniel Fortney dusts off General Electric appliances at Fortney's Appliance store on January 23, 2009 in Fort Lauderdale, Florida.
BEIJING (AP) — Chinese appliance maker Haier is buying General Electric Co.'s appliance unit for $5.4 billion to expand its global presence.
Haier and GE announced the sale Friday and said they agreed to form a strategic partnership to cooperate in areas such as the Internet, healthcare, and advanced manufacturing.
Haier, headquartered in the eastern Chinese city of Qingdao, is the world's biggest appliance maker, with 2014 revenue of $32.6 billion.
GE's sale of its appliance unit comes in the midst of an effort by the company to shift its focus to higher-technology and higher-profit areas such as medical equipment.

Goldman just got wiped out

Goldman just got wiped out

Goldman Sachs' fourth-quarter earnings essentially just got wiped out.
The bank said on Thursday that it will pay a $5 billion settlement related to residential mortgage-backed securities it sold between 2005 and 2007.
Under the terms of the settlement, Goldman will pay a $2.385 billion civil monetary penalty, make $875 million in cash payments, and provide $1.8 billion in consumer relief.
The bank also said that its fourth-quarter earnings results will be reduced by approximately $1.5 billion. To put that in perspective, analysts had been expecting the bank to report net income of $1.63 billion.
Goldman is scheduled to report earnings on Wednesday, January 20.
Here's the release from the bank:
The Goldman Sachs Group, Inc. (NYSE: GS) today announced that it has reached an agreement in principle to resolve the ongoing investigation of the Residential Mortgage-Backed Securities Working Group of the U.S. Financial Fraud Enforcement Task Force (RMBS Working Group).
The agreement in principle will resolve actual and potential civil claims by the U.S. Department of Justice, the New York and Illinois Attorneys General, the National Credit Union Administration (as conservator for several failed credit unions) and the Federal Home Loan Banks of Chicago and Seattle, relating to the firm's securitization, underwriting and sale of residential mortgage-backed securities from 2005 to 2007.
The agreement in principle will reduce earnings for the fourth quarter of 2015 by approximately $1.5 billion on an after-tax basis.
Under the terms of the agreement in principle, the firm will pay a $2.385 billion civil monetary penalty, make $875 million in cash payments and provide $1.8 billion in consumer relief. The consumer relief will be in the form of principal forgiveness for underwater homeowners and distressed borrowers; financing for construction, rehabilitation and preservation of affordable housing; and support for debt restructuring, foreclosure prevention and housing quality improvement programs, as well as land banks.
Lloyd C. Blankfein, Chairman and Chief Executive Officer of The Goldman Sachs Group, Inc., stated, "We are pleased to have reached an agreement in principle to resolve these matters."
The agreement in principle is subject to the negotiation of definitive documentation, and there can be no assurance that the firm, the U.S. Department of Justice and the other applicable governmental authorities will agree on the definitive documentation.

Oil crashes below $30

Oil crashes below $30

Oil crashed past the $30 (£20.85) per barrel mark for the second time in a week this morning, as sentiment on the world's most watched commodity continues to stink.
As of 12:40 p.m. GMT (7:40 a.m. ET) both major benchmarks, West Texas Intermediate and Brent crude, were trading well below the $30 mark, and they have even gone lower than $29.50. WTI leads the losses and has fallen more than 5.6% in trade Friday. At pixel time it's worth $29.44 ($20.47) a barrel.
oil 2 jan 15Investing.com
Brent isn't faring much better, seeing losses in excess of 4.6%. Both benchmarks are now trading at virtually identical levels.
Screen Shot 2016 01 15 at 10.34.20Investing.com
Oil has now dipped below the $30 mark for the second time this week. Brent hit $29.96 a barrel briefly on Wednesday before recovering to close the day at around $30.20 (£21).
Today's drop below $30 looks like its going to stick, and that's one of the biggest worry traders have right now. Many fear this will trigger an even bigger sell-off and make $20, or even $15 oil, a reality.
Oil's seemingly relentless march toward zero is being driven by a few crucial factors. Fears about China are everywhere in the markets, as the country's stock markets continue to suffer in the first couple of weeks of 2016.
All three of China's major indexes closed down by about 3% on Friday afternoon, erasing any gains made Thursday. The Shanghai Composite is down 18% this year, and it has hit its lowest level since December 2014.
The glut of oil created by the OPEC nations, led by Saudi Arabia, is also proving to be a huge challenge to global oil traders. Speculation in the markets that western sanctions against Iran will be lifted at the weekend, has also helped drive prices down today. Iran has vowed to return to pre-sanction levels of production, meaning that another 500,000 barrels per day will be pumped into the market.
Europe's markets haven't reacted well to the renewed slump in both Chinese equities and oil, and all the continent's major indexes are trading in the red so far Friday.
2016 just doesn't seem to get any better.
More: Oil

Chinese new bank lending misses the mark in December - DAVID SCUTT

Chinese new bank lending misses the mark in December

Photo: Julia Vynokurova/ Getty.
Chinese new bank lending has disappointed to the downside in December, increasing by 597.8 billion yuan.
The figure was below expectations for an increase of 700 billion yuan, and short of the 697.3 billion yuan level of a year earlier.
Over the year outstanding loans increased by 14.3%, below the 14.9% rate of November and forecasts for a deceleration to 14.8%.
Broad money growth, or M2, also missed to the downside, expanding by 13.3% compared to estimates for growth of 13.5%. It was also 0.4% below the 13.7% clip seen in the 12 months to November.
Despite the deceleration in bank lending and M2, total social financing (TSF) – the broadest measure of liquidity that captures lending from non-traditional sources – soared to 1.82 trillion yuan from 1.02 trill yuan in November.
While a large increase, it’s not unusual.
In December 2014, TSF rose to 1.69 trillion yuan, an increase from 1.15 trillion yuan a month earlier.
The increase came as Chinese firms raised a record amount on the corporate bond market, along with a likely acceleration in shadow banking finance.
Zhu Qibing, a Beijing-based analyst at China Minzu Securities, told Bloomberg that “the jump in aggregate financing is due to the steady growth of off-balance-sheet lending and direct financing in the past few months”.
“Companies have the desire to borrow, but banks are still reluctant to lend,” he said.

Chinese stocks are now in a bear market

Chinese stocks are now in a bear market

Chinese stocks have fallen 20% from their peak, entering a so-called bear market.
A bear market often signals further falls and growing investor pessimism. It's worse than a correction, which is a 10% downward move within a short time, because fewer buyers are willing to pick up bargains.
On Friday, the Shanghai Composite plunged more than 3%, despite the best efforts of China's "National Team," or government agencies that buy stocks to prop up the market.
Here's the chart:
China BearGoogle
Here's the Bloomberg News report on why that happened (emphasis ours):
Friday's decline was attributed to persistent investor concerns over volatility in the yuan and a report that some banks in Shanghai have halted accepting shares of smaller listed companies as collateral for loans.
There was also bad news in the monthly bank lending figures, which signalled slower growth than expected. Chinese new bank lending came in at 597.8 billion yuan for December, below expectations for an increase of 700 billion yuan and short of the 697.3 billion yuan from a year earlier.
More: China

Thursday, January 14, 2016

US jobless claims rise

US jobless claims rise

[WASHINGTON] New claims for US unemployment insurance benefits rose modestly last week in a labour market that nevertheless is seen continuing to tighten, official data released Thursday showed.
The Labour Department reported initial jobless claims, a sign of the pace of layoffs, rose by 7,000 to 284,000 in the week ending January 9.
The four-week moving average, which helps to smooth week-on-week volatility, rose by 3,000 to 278,750. A year ago it was 293,000.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, predicted substantial volatility in claims in the first weeks of the year but said the downward trend remained on track.
"Claims are very unpredictable and can be volatile in the first few weeks of the year because the seasonals can't track exactly the speed with which people hired for temporary jobs over the holidays are laid off," he said.
"We see nothing in these data or other indirect measures of labour market activity to suggest that payroll growth will slow anytime soon, beyond the inevitable reversal of the boost to sectors like construction from the very warm late fall and early winter weather," he added.
The US economy capped a solid year of jobs growth in 2015 with a surge of 292,000 jobs added in December. That took total jobs created during the year to 2.65 million, the second-best year, after 2014, since the 1990s.
The unemployment rate held at 5.0 per cent for a third consecutive month, near the level considered full employment by the Federal Reserve.
AFP

Global clean energy investment hits record US$329b in 2015: research

Global clean energy investment hits record US$329b in 2015: research

[LONDON] Clean energy investment worldwide reached a record US$329.3 billion in 2015 as investors shrugged off falling fossil fuel prices and currency fluctuations and installed the highest ever amount of renewable power capacity, research showed on Thursday.
China made the most clean energy investments in 2015 at US$110.5 billion, 17 per cent more than in 2014. Other emerging markets also saw huge gains, such as South Africa, Chile and Mexico.
Investment in renewable sources of energy, such as wind and solar, was 4 per cent higher than 2014's revised figure of US$315.9 billion and was nearly six times the amount of 2004, Bloomberg New Energy Finance said in a report.
Renewable capacity installation was 30 per cent higher than in 2014, with 64 gigawatts of wind and 57 GW of solar photovoltaic (PV) commissioned last year.
The climb occurred even though prices for oil and natural gas plunged, Europe's economy remined weak and the US currency strengthened, which reduced the dollar value of non-dollar investments.
"These figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices," said Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance.
"They highlight the improving cost-competitiveness of solar and wind power, driven in part by the move by many countries to reverse-auction new capacity rather than providing advantageous tariffs, a shift that has put producers under continuing price pressure."
REUTERS

Singapore mortgage benchmark rates climb to seven-year high

Singapore mortgage benchmark rates climb to seven-year high

[SINGAPORE] Singapore short-term interest rates used to set mortgages surged to a seven-year high on speculation central bank activity in the currency market is resulting in rising borrowing costs.
"The authorities are buying their currencies and selling US dollars," said Hideo Shimomura, the chief fund investor in Tokyo at Mitsubishi UFJ Kokusai Asset Management. "They are absorbing liquidity from the market. The money market is drying up."
The three-month Singapore interbank offered rate climbed to 1.25300 per cent. The three-month swap offer rate advanced to 1.76235 per cent. The figures are at the highest levels since October 2008, according to data compiled by Bloomberg. While both are used to set mortgage rates, Sibor-based loans are more common, according to PropertyGuru Pte's website.
The Singapore dollar has fallen 1.4 per cent against its US counterpart this year, sliding as a rout in the Chinese yuan roiled global markets.
The Monetary Authority of Singapore maintains its dollar within an undisclosed target band against a basked of other currencies. The MAS will intervene in the foreign exchange market when the currency reaches the edge of the policy band on either side or when there is undue volatility or speculation in the Singapore dollar, according to the central bank website.
The interventions may affect liquidity by increasing or decreasing the amount of Singapore dollars in the banking system, the website says.
MUFJ Kokusai's Shimomura says it's too early to buy the Singapore dollar.  "The renminbi is depreciating, and that affects Asian currencies," he said. "We are not bullish on Asian currencies. It's premature to step in."
BLOOMBERG

Jakarta attacks confirm regional fears over IS: analysts

Jakarta attacks confirm regional fears over IS: analysts

[JAKARTA] A "Paris-style" suicide strike on the Indonesian capital Thursday confirmed Southeast Asian governments' worst fears - that citizens returning from fighting alongside the Islamic State group in the Middle East could launch attacks at home.
Regional nations have been warning for months of the possibility of attack, mirroring concerns expressed by European authorities fearful of the intentions of people returning home from conflict.
The blasts and gunfire that rocked Jakarta came after six years of relative calm, following a government crackdown that weakened the country's most dangerous homegrown Islamic networks.
"We know that (IS) has the desire to declare a province in this region and there are groups in this region... that have pledged allegiance to (IS)," said Kumar Ramakrishna, an expert on southeast Asian militant groups at Nanyang Technological University in Singapore.
"The threat of returning Southeast Asian fighters radicalised in the Iraq/Syria region (is) also another factor of concern, together with the possibility of self-radicalised lone wolves appearing in the scene." Thursday's attacks left five attackers and two civilians, including a Westerner, dead and 19 others wounded.
National police spokesman Anton Charliyan told AFP that authorities had a "strong suspicion" an IS-linked group carried out the assault and that it was designed to replicate the November strike on Paris that claimed 130 lives.
Although the toll was much lower, the selection of soft targets in the heart of the capital terrified citizens, and social media erupted with disturbing images and video footage, and the hashtag #KamiTidatTakut (We are not afraid).
The strike was launched just weeks after Indonesia issued a heightened alert and arrested several suspected militants, some of them from IS-linked cells.
The Soufan Group, a New York-based security consultancy, says that of the 500-700 Indonesians who travelled abroad to join IS's self-proclaimed caliphate across swathes of Syria and Iraq, scores have since returned.
The threat posed by returning foreign fighters is not a new one for Indonesia.
The country's counter-terror chief has recalled that Indonesians who trained with Islamic militants in Afghanistan in the 1990s came back and launched terror attacks, including the 2002 Bali bombings.
Indonesia, the world's most populous Muslim-majority nation, launched a crackdown that neutered the networks, and attacks in recent years have mostly been low-level and have targeted domestic security forces.
More recently, the country has banned support for IS and its ideology, but experts worry that Indonesian laws are not adequate for tackling the new threat and that the region is failing to pull together.
"The governments in this region must work together to prevent the creation of a satellite of the caliphate because if such a satellite is declared, the threat in Southeast Asia will grow," said regional terrorism expert Rohan Gunaratna.
"There are groups based both in Indonesia and the Philippines that have pledged allegiance to IS and those groups must be dismantled." Indonesia and Southeast Asia have also been a target for Al-Qaeda, with the terror network's chief Ayman al-Zawahiri calling for a regional "battle" in remarks released this week.
Addressing Muslims in Indonesia, the Philippines, Malaysia and neighbouring countries, Zawahiri said the region's Muslims were "leading an ideological and political battle against the seculars and the enemies of the religion".
One strategy being deployed by Indonesia's counter-terror chiefs is to leverage a handful of former IS members who have returned from the Middle East disenchanted with their experiences.
They are looking to publicise their stories of misery and disappointment - at the hands of a jihadist leadership which gave them little respect or responsibility - in a bid to deter potential recruits.
But the threat is unlikely to dissipate.
"Indonesia has faced a rising threat of this kind of terrorist attack over the past year," said Hugo Brennan, an Asia analyst Verisk Maplecroft.
"The warning signs have been there for all to see."
AFP

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