Diary of a Financier

Top Newsstuffs (January 20-26)

In Bookshelf on Sun 26 Jan 2014 at 05:55

What did I used to do on Sundays?

Rail traffic weekly: Big uptick undoes 2014’s slow start | Association of American Railroads (AAR)
Weekly traffic +5.8% y/y; growth spikes to positive +0.3% ytd.
8 of 10 carload groups posted gains: minerals +20.9%, petroleum +13.3; metallic ores -1.5.
$XLE $USO $UNG $XME

Chinese credit worries rise as large shadow bank default looms | naked capitalism
Global markets sold off >1% after China’s flash PMI reported a surprise contraction (49.6), but lost in that noise was bigger news:
China Credit Trust warned investors that it’d default on an upcoming (1/31) RMB 3B ($500mm) principal repayment of “trust products,” which are like WMPs with less duration mismatch for qualified investors.
Trust products (12% of GDP) have become an increasing source of capital for China’s shadow banks, and their implicit guarantee means “who bears the losses in the event of a default (banks/government/investors) could set an important precedent” for confidence to avert a credit crisis a la US off-balance sheet SIVs.
[I’m of the opinion that China is a known unknown & therefore the problem’s been identified with enough time to fix it without an implosion. Previously: Chinese WMPs, BANs/LGFVs, non-performing loans & preemptive action.]
#Shadow banking $FXI $GXC #Liquidity #Insolvency

Shipping rates collapsing in 2014 | Market Currents (Seeking Alpha)
Capesize rates -71.5% ytd (overnight -20% @ $11,128 on 1/23)
Baltic Dry Index -44 ytd
Supramax -23 ytd
Panamax -20 ytd
[Previously: Shipping costs plunge as Columbia disrupts Drummond coal exports]
$VLCCF $BALDRY

Battle of the Box | stratechery
Discusses cloud data storage wars, cheifly between rivals #Dropbox (consumer) & #Box (enterprise):
As opposed to the “walled-garden” approach of a Google Chromebook or even Apple’s iCloud, which is only accessible from your $AAPL devices, “thin clients” like Dropbox have a horizontal strategy that allows users to access multimedia from any device.
Challenges come both in penetrating enterprise & from proprietary devices’ barriers to entry.
#SaaS #Freemium #Cloud

Japan’s coming “Wage Surprise” | Shinzo Abe (Project Syndicate)
The Japanese PM says Abenomics’ third arrow (structural reforms & deregulation) is underway & discussed the “wage surprise”:
As a result of government discussions with private sector leaders, 2014 will show “an upward, virtuous cycle whereby increased wages lead to more robust growth… draws its inspiration from the Netherlands, where a consensus emerged in the early 1980’s that in order to sustain employment, the burden of taming rampant inflation should be shared by employers and the employed… enshrined in the 1982 Wassenaar Agreement.”
[Previously]
#Wealth effect #Trickle down economics #Penetrating glimpse of the obvious (PGO)

–Romeo

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  1. Update: China Credit Trust bailed out by “unidentified buyer” | ZeroHedge
    http://www.zerohedge.com/news/2014-01-27/china-trust-bailout-unidentified-buyer-distorts-market-risks-are-snowballing

    “There are plenty more trust products facing maturity/default in the short-term… [then] 2Q & 3Q this year will be another peak trust maturing period.”

  2. […] murmurs of a "hard landing" first hit MSM–the manifestation of a known-unknown being discounted. Previously] #Grey swan #Shadow banking $FXI $GXC #Liquidity […]

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