We need to find a fairer way of providing Goods and Services to the rest of the people on Earth.Cryptocurrencies and/or Gold Standard of money....maybe the answer to fight hyperinflation caused by too much printing of paper/fiat currencies by Governments and Central Banks all over the World. (https://nomorefiatmoneyplease.blogspot.com)
Tuesday, December 8, 2020
Equity market bubble will 'end in tears,' Rosenberg warns - BNN Bloomberg
Equity market bubble will 'end in tears,' Rosenberg warns - BNN Bloomberg: Veteran Bay Street economist and strategist David Rosenberg is warning that a return to a more normalized interest rate environment could stop the record-breaking market rally in its tracks.
Friday, November 27, 2020
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Wednesday, November 4, 2020
Here's how Ant can rise again after that IPO shock
[TAIPEI] Ant Group will survive the 11th-hour suspension of its blockbuster US$35 billion listing in Shanghai and Hong Kong if the company can learn from its technology peers. If there's one thing that founder Jack Ma and Chinese regulators probably agree upon, it's that finance and technology make for a powerful combination. The mix is where they ran into trouble. Halting the initial public offerings (IPOs) due to a "change in regulatory environment" is the government's way of asserting that Ant is more fin than tech. Mr Ma and team won't get away with being digital cowboys riding roughshod over the financial system.
Alibaba Group, which owns a third of Ant, took an immediate hit on Tuesday, falling by a record 9.7 per cent for its New York-listed shares. It was down as much as 9.3 per cent on Wednesday in Hong Kong.
Making too much money may not be the real sin - as Deng Xiaoping famously stated, to get rich is glorious. But having too much power over the nation's financial levers intrudes on government territory.
China's state-owned banks are a policy tool. Not only does Ant control a growing payments platform, Alipay, but its loans and wealth management businesses have climbed to dominate their rivals.
China's financial regulator plans to discourage lenders from using Ant's platforms, which act as a conduit for loans from banks to consumers, Bloomberg News reported on Wednesday, citing people familiar with the matter whom it didn't name.
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On the surface, that looks really bad. Yet ensuring banks comply with new rules is what we'd expect from a regulator and puts pressure on Ant's executives to quickly bring its own business model into line.
As my colleague Shuli Ren pointed out, comments Mr Ma made last month at the Bund Summit in Shanghai seem to have led to the suspension. He compared China's banks to pawn shops demanding sufficient capital to back loans. Ant's model is famously different, relying instead on reams of customer data to manage risk.
Mr Ma described the financial system as following rules designed by a club of old people, and said the country needs "policy experts, but not experts in red tape".
The path forward seems clear. Rather than shut Ant down, or scuttle the IPOs altogether, Beijing is likely to force important changes to its business model. Tencent Holdings and Baidu know how this works: reflect, repent and renovate. They got past regulatory hiccups by coming out more patriotic than ever.
To understand what Ant could look like after the dust has settled, let's consider Beijing's longer-term goals.
One is to roll out a central bank cryptocurrency. As my colleague Andy Mukherjee has outlined, the rise of fintech in areas such as money-market funds and wealth management has led to risk accumulating in shadow banking.
One of the government's strategies behind a digital token is to level the playing field back towards traditional lenders, who have been trailing technology in other ways. Expect Ant to embrace this virtual yuan-backed currency.
Another goal is to expand the surveillance state, where data informs every aspect of daily life. The more questionable uses involve tracking individuals, cracking down on dissent, and enforcing standards of behaviour.
Yet keeping a digital footprint of the economy can lead to efficiency in allocating capital, lending money, and even managing supply chains. Fintech proponents make this argument when they say that the new system needn't follow old rules.
Ant and Beijing are likely to meet in the middle. Regulators outlined new draft rules for the sector this week that include Basel-style capital requirements. As a result, Ant would need to provide at least 30 per cent of the funding for loans it makes. That figure is currently closer to 2 per cent, with the capital requirement equal to around US$14 billion, according to estimates by Jefferies analysts Chen Shujin and Alfred He. While possibly a slight drag on profit, this shouldn't trouble Ant, given the IPOs were set to raise 2.5 times that number.
We may also see Ant provide regulators with greater access to its data, as a way to prove that its model can better manage risk while teaching them how things are done. In return, Beijing will have greater access to information it can use to build a broader model of the economy and its citizens.
A final change is likely to be Mr Ma himself. Companies often talk about key-man risk in terms of how the business may suffer if the linchpin executive departs. For Ant, this problem is reversed: Mr Ma hanging around could be the liability.
China's second-richest man had already stepped away from Alibaba after taking too much of the spotlight away from political leaders. He no longer has any official position at the e-commerce behemoth. Yet he holds voting control and a significant stake in Ant.
As with Alibaba, Mr Ma is likely to put his vast holdings into a philanthropic trust, set up charities and think tanks, and retire from public life.
Ant could then rise from its IPO ashes like the patriotic fintech phoenix that Beijing ultimately wants.
BLOOMBERG
Sunday, November 1, 2020
Huawei plans to build chip plant without US technology: FT
[SHANGHAI] Huawei Technologies plans to build a chip plant in Shanghai without using American technology, as China's biggest tech company by sales seeks a new strategy to overcome increasingly tight US sanctions, the Financial Times reported.
The fabrication facility is expected to start with the manufacture of low-end 45nm chips, the paper said on Sunday, citing people familiar with the project. Huawei aims to make 28nm chips for "Internet of things" devices by the end of 2021, and produce 20nm chips for 5G telecom equipment by late 2022, the report said.
Huawei has no experience in fabricating chips and the plant would be run by Shanghai IC R&D Center, a research company backed by the city's government, according to the report.
China has laid out a path toward greater economic self-sufficiency in its new five-year plans, and vowed to build its own core technology, saying it can't rely on buying it from elsewhere.
BLOOMBERG
Wednesday, October 28, 2020
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