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Jul 12, 2011

China unable to sell out local bond for first time Finance ministry fails to sell about 1.1 billion yuan in three-year paper: MarketWatch | Markets - Caixin Online.

Caixin Online Archives
By Chen Lu 

BEIJING ( Caixin Online ) — The Ministry of Finance failed to sell some of its three-year local-government bonds in its first auction so far in 2011, on a lukewarm response from the market to the bond issuance.
On July 11, the MOF launched an auction on behalf of local governments for 25.4 billion yuan ($3.93 billion) in five-year bonds and 25 billion yuan in three-year bonds. Yield rates were 3.84% and 3.93%, respectively. However, about 1.1 billion yuan worth three-year bonds failed to garner bids.
 About Caixin
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The MOF plans to sell 200 billion yuan in local-government bonds in 2011.
This is the first time the Ministry of Finance failed to auction off all of its local bonds. In addition, the yields are much higher than expected. Sealand Securities earlier predicted the yields of three-year bonds would be no higher than 3.55%, and five-year bonds at 3.65%.
The lower-than-expected sales and high interest rates suggest a tepid market for local bonds, which have low liquidity compared to central government bonds. Shi Lei, head of the fixed-income department at Ping An Securities told Caixin that traders are now more interested in corporate bonds.
He said traders should not be worried about default as these local-government bonds are backed by the government, but warned of higher yields in future bonds issuance.
Jing Xiaoda, a fixed-income analyst at Essence Securities said that while the higher yields are partly fueled by concerns of default, a larger concern was low liquidity.
He noted that the yield on the three-year bonds was higher than that of five-year bonds. The same inversion in yields occurred two months ago, a signal of greater market concerns over short-term inflation over long-term inflation. See this report at Caixin Online.

The australian Business Briefing: Yuan for the money for Twiggy

Wall St falls as Ireland cut to junk
Wall St Steven Russolillo US stocks closed lower this morning as a downgrade of Ireland to junk overshadowed hints the Fed may consider additional stimulus.
Moody's cuts Ireland to junk
Ireland Andrew J. Johnson MOODY'S downgraded Ireland into junk territory, saying the country will likely need another round of official financing.
Fed split on to tighten or QE3
Ben Bernanke Tom Barkley US Fed officials are divided on whether to tighten or stimulate the weakening US economy, minutes from June show.
China's $1US trillion promise
China flag Matt Chambers CHINA is planning to invest $US1 trillion overseas in the next five to 10 years, and it has its eye firmly on Australia.
Yuan for the money for Twiggy
Seven Group Holdings executive chairman Kerry Stokes and Fortescue Metals Group CEO Andrew Forrest Matt Chambers MINING billionaire Andrew Forrest surprised his peers yesterday by announcing he would conduct business with China in yuan.
Macarthur soars on bid hopes
Coal bucketwheel Sarah-Jane Tasker MACARTHUR Coal shares surge 37 per cent on hopes that a rival bidder will trump the $4.7bn Peabody Energy offer
Carbon muddies the water for investors
sharemarket Geoffrey Newman INVESTORS are struggling to disentangle the impact of the carbon tax on the sharemarket from more general global forces.
Certainty to help M&A pipeline
Macarthur Coal Michael Bennet PEABODY Energy's $4.7bn bid for Macarthur Coal could signal more resources deals because carbon tax uncertainty has been removed.
Financial Markets
Fed split on to tighten or QE3
Ben Bernanke Tom Barkley US Fed officials are divided on whether to tighten or stimulate the weakening US economy, minutes from June show.
Gold settles at record high
Oil rises on QE3 signals
Financial Markets Coverage
Mining & Energy
Yuan for the money for Twiggy
Seven Group Holdings executive chairman Kerry Stokes and Fortescue Metals Group CEO Andrew Forrest Matt Chambers MINING billionaire Andrew Forrest surprised his peers yesterday by announcing he would conduct business with China in yuan.
China's $1US trillion promise
Gold settles at record high
More Mining & Energy

The Australian Capital Circle: Carbon plan panned by voters

Capital Circle Newsletter

Carbon plan panned by voters
The road back for Labor will be long and hard with a new poll showing voters are still angry, despite promised tax cuts and welfare boosts.

Julia Gillard is in Brisbane today. She'll tour a shopping centre mid-morning and visit a power station about noon. She has a string of radio interviews scheduled.
Tony Abbott is in Melbourne where he visited the city's wholesale fish markets about 5am with wife Margie and daughters Bridget and Frances. He'll attend a morning tea in Aspendale and will be a guest panelist on Ten's 7PM Project tonight. He's done Triple-M radio in Adelaide and several other interviews.
Galaxy poll: The News Ltd tabloids have the results of the first poll conducted since the release of the government's carbon tax package on Sunday. The findings are dire for Labor, with 63 per cent of respondents calling for an early election. Just 29 per cent are in favor of the tax and 60 per cent opposed - and that's after the announcement of billions in carbon compensation. The picture is much the same as that painted by yesterday's Newspoll, conducted before the carbon tax announcement. The Galaxy Poll of 500 voters was conducted on Monday night. (See the Daily Telegraph and the Herald Sun)
Home fires: As Julia Gillard's shoe leather tour shifts into overdrive, Tim Mathieson has been left to his own devices. But the first bloke isn't the sort to just mope around The Lodge. The footy-loving former hairdresser recently played host to ex-Richmond poster-boy Geoff Raines. The pair go way back. Raines told Triple-M: "I haven't done Kirribilli, but I've done The Lodge. Julia was away too... He entertained me well. We looked after The Lodge and we did it in reasonable style."
Numbers man: Labor uber-nerd Andrew Leigh has been presented with the Economics Society of Australia's Young Economist Award. The award is made every two years to Australia's best economist under 40. The Member
Peter Brent
Peter Brent
How low can it go?
Newspoll has now recorded a primary vote of 27 for the Gillard government and a two party preferred one of 42. Other measures have moved…

Financial & Forex info | W. P. Carey Announces Two Transactions

Investing for the long run
W. P. Carey Announces Two Transactions
Build to Suit Financing in Martinsville, VA and Acquisition of Restaurant Site in Downtown Chicago
NEW YORK, NY – (MARKET WIRE) – 07/11/11 – Investment firm  W. P. Carey & Co. LLC (NYSE: WPC) announced today that CPA®:17 – Global, one of its publicly held non-traded REIT affiliates, has agreed to provide build to suit financing for an operations center and office facility in Martinsville, Virginia. The financing will total approximately $14.5 million. When completed, the 93,000 square foot facility will be leased to ICF International under a long term lease. The project will be developed by Panattoni Development Company.

In addition, W. P. Carey announced that CPA®:17 – Global has acquired an approximately 14,000 square foot land site in the River North neighborhood in downtown Chicago to be leased to CRO-San Luis Development, LLC ("CRO"). CRO is building a Cantina Laredo restaurant on the site that is anticipated to be completed and open in August. The purchase price for the land was approximately $7 million.

Commenting on the ICF financing, W. P. Carey Director Chad Edmonson noted, "We are pleased to complete this build to suit financing. In a market where traditional construction loans remain extremely difficult to obtain, our strong balance sheet allows us to partner with developers and tenants to fund the construction of build to suits without involving a construction lender. This marks our second project with Panattoni in the last twelve months, and it represents a continued emphasis on working with best-in-class developers to provide a comprehensive solution to tenants. Adding this asset to our portfolio is consistent with W. P. Carey's goal of investing in critical assets of growing companies that can provide diversity to our portfolios as well as a source of steady ongoing income."

Christopher A. Ciliberti, Partner in charge of Panattoni's Virginia/DC operations, added, "Because of
W. P. Carey's experience with build to suit financing, coupled with our recent relationship with them on another build to suit facility in Europe, they were able to provide a financial structure that proved to be a fit for both parties. Additionally, W. P. Carey delivered a financial commitment that provided for 100% of development costs for the project, eliminating financing risk for us and for the client."

Commenting on the acquisition of the Chicago parcel, W. P. Carey Managing Director Gino Sabatini added, "The acquisition of the strategically located corner in the River North area off North Michigan Avenue represented an opportunity to acquire a site with substantial long term land value that will generate attractive current income through a long term lease with CRO. We feel this is a great addition to the CPA®:17 portfolio in terms of adding diversity, providing current return and giving the portfolio an opportunity for substantial future appreciation."

W. P. Carey & Co. LLC
W. P. Carey & Co. LLC (NYSE: WPC) is an investment management company that provides long term sale leaseback and build to suit financing for companies worldwide and manages a global investment portfolio of approximately $11 billion. Publicly traded on the New York Stock Exchange (WPC), W. P. Carey and its CPA® series of income-generating, non-traded REITs help companies and private equity firms unlock capital tied up in real estate assets. The W. P. Carey Group's investments are highly diversified, comprising contractual agreements with approximately 275 long term corporate obligors spanning 28 industries and 17 countries.

Individuals interested in receiving future updates on W. P. Carey via e-mail can register at

This press release contains forward-looking statements within the meaning of the Federal securities laws. A number of factors could cause the Company's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact the Company, reference is made to the Company's filings with the Securities and Exchange Commission.

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U.S. Department Of The Treasury: Consumer Financial Protection Bureau Outlines Bank Supervision Approach

Consumer Financial Protection Bureau Outlines Bank Supervision Approach

CFPB Will Begin Its Examination Program for Large Banks on July 21
WASHINGTON – The Consumer Financial Protection Bureau (CFPB) today outlined the agency’s approach to supervising large depository institutions to ensure compliance with federal consumer financial protection laws – a supervisory process that will begin on July 21, 2011.
“The new consumer agency is here to make sure that markets work for American families, and our bank supervision program is a big part of that,” said Elizabeth Warren, Special Advisor to the Secretary of the Treasury on the CFPB. “Starting on July 21, we will be a cop on the beat – examining banks and protecting consumers.”
Scope of Bank Supervision Program
Leading into the recent financial crisis, consumer financial protection authorities were spread among seven different federal agencies. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) streamlined consumer protection oversight authority into the CFPB – promoting greater efficiency and accountability for American consumers.
The consumer agency will conduct examinations to help ensure that consumer financial practices at large banks conform with consumer financial protection legal requirements. The CFPB’s bank supervision program will oversee the 111 depository institutions that have total assets over $10 billion.  Subsidiaries and all other affiliates of these institutions also fall under the CFPB’s authority.  These institutions collectively hold more than 80 percent of the banking industry’s assets.
Staffing and Training
A diverse and talented team of examiners throughout the country, managed out of satellite offices in Chicago, New York, San Francisco, and Washington, D.C., will form the front line in the CFPB’s supervisory efforts.   Each of these satellite offices will be the nexus for CFPB supervision in their respective areas of the country.  Having examiners and field managers focused on these regions will help ensure that the CFPB understands the business practices and dynamics in different markets throughout the country.  The examiners working in those regions will spend much of their time on-site at depository institutions and at other consumer financial services companies. 
A large part of the CFPB’s supervision staff will be made up of experienced examiners: By the end of July, the CFPB supervision team will include more than 100 staff members transferring directly from the Federal Deposit Insurance Corporation, the Federal Reserve System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. The CFPB expects eventually to have several hundred examiners on board, coming from a variety of backgrounds, including state regulatory agencies and industry.  Experienced examiners will sharpen their skills in workshops before being deployed, and examiners new to consumer financial protection will receive extensive technical and professional skills training. 
Supervision Process
CFPB supervision will be an on-going process of pre-examination scoping and review of information, data analysis, on-site examinations, and regular communication with regulated entities, prudential regulators, and as well as follow-up monitoring. For most depository institutions supervised by the CFPB, periodic examinations will be conducted.  For the largest and most complex banks in the country, the agency will implement a year-round supervision program that will be customized to reflect the consumer protection and fair lending risk profile of the organization. 
Monitoring will be a constructive process, ensuring that, where required, consumer risks are addressed and compliance programs are strengthened. Analyzing information that is unique to the institution – for example, lending activities, fee structures, and marketing practices – as well as assessing product trends at the market level, will also allow the CFPB to detect and address risks to consumers as they develop. Institutions will generally be advised of upcoming examinations and receive status updates throughout the supervision process.
During an examination, the CFPB will assess each institution’s internal ability to detect, prevent, and remedy violations that may harm consumers by reviewing the institution’s internal procedures and conducting interviews with personnel. Examiners will look at the products and services the institution offers, with a focus on risk to consumers. The institution’s compliance with requirements during the entire life cycle of the product or service will be reviewed, including how a product is developed, marketed, sold and managed.  Fair lending reviews will be conducted to detect and address potential discriminatory practices, and, more generally, the institution’s policies and practices will be evaluated to ensure compliance with consumer financial protection laws and regulations. 
If a company is not fully compliant, the CFPB will seek corrective actions, including strengthening the company’s programs and processes to ensure that such violations do not recur and, where appropriate, that remedies are instituted. When necessary examiners will coordinate and work closely with CFPB’s enforcement staff to implement appropriate enforcement actions to address harm to consumers.
Next Steps
On July 21, the CFPB will reach out to banks and their affiliates to establish channels of communication and to introduce them to the agency’s supervision and examination process. The CFPB has already made great strides in reviewing information received from federal and state regulatory agencies about the depository institutions for which it will assume responsibility.  In the weeks following July 21, CFPB examiners and managers will:
  1. Become familiar with the structure, business strategies, operations, and risks of the organizations they will be supervising;
  2. Communicate and coordinate the CFPB’s efforts with federal and state regulatory agencies;
  3. Finalize the CFPB’s plans to supervise and examine the organizations under its jurisdiction; and
  4. Begin conducting the agency’s first round of on-site examinations.
This process will begin remotely in most instances, and CFPB examiners will then begin on-site reviews at the supervised institutions to continue their work.  Over the next several weeks, the CFPB will conduct further outreach to banks that fall under its jurisdiction. The CPFB will provide additional information via letter to the 111 institutions, and will conduct informational roundtables starting in early August.
The CFPB will post on its website the initial phase of its Examination Manual, which is the field guide for examiners supervising both banks and other consumer financial services companies. The publication of the manual will be accompanied by a general invitation for feedback and suggestions for improvements from the banking industry, nonbank financial services companies, federal and state agencies, consumer and community groups, and the general public.  

Reuters - Daily Investor Update: Europe and tech push Wall Street to 3rd day of losses


Europe and tech push Wall Street to 3rd day of losses
NEW YORK (Reuters) - Stocks closed lower for a third straight day on Tuesday as Europe's fiscal woes and a weak start to tech earnings gave investors little reason to buy even after the recent losses. | Full Article

Moody's cuts Ireland to junk, warns of second bailout
July 12, 2011 04:06 PM ET
NEW YORK (Reuters) - Moody's Investors Service on Tuesday cut Ireland's credit rating to junk status, saying the country will likely need further official financing before it can return to international capital markets. | Full Article
Trade gap surges to nearly 3-year high on oil
July 12, 2011 11:43 AM ET
WASHINGTON (Reuters) - The U.S. trade gap widened sharply in May to its highest level in nearly three years as surging oil prices helped push imports to a near record and exports fell slightly from April's all-time high. | Full Article
New York's AG seeks data on Bank of America $8.5 billion pact
July 12, 2011 04:26 PM ET
NEW YORK (Reuters) - New York's attorney general has requested data from 20 institutional investors that agreed to a $8.5 billion settlement with Bank of America Corp over their holdings in soured mortgage-backed securities. | Full Article
WaMu, shareholders clash again over bankruptcy exit
July 12, 2011 04:16 PM ET
WILMINGTON, Delaware (Reuters) - It's Washington Mutual Inc vs. shareholders, round II. | Full Article

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