News Summary

News Summary
G20 meeting in Shanghai ended on Saturday without strong

conclusion. They concurred that global economics risks have
risen, vowed to accelerate long-promised economic
overhauls to ease the burden on the easy-money stimulus
policies that are fast running out of steam. In the official
communiqu, We will use all policy toolsmonetary, fiscal
and structural to strengthen growth, boost investment and
ensure stability in financial markets. G20 agreed Britains
possible exit from the European Union could pose a risk to
the world economy.
US Treasury Secretary Jack Lew called on G20 members to
redouble their efforts to boost global demand instead of
relying on the American consumer to drive growth.
German Finance Minister Wolfgang Schuble said debtfinanced fiscal policies and easy money monetary policies
may have prevented the financial crisis from spiraling out of
control, but they may have laid the foundation for the next
crisis.
Koichi Hamada, a special economic adviser to PM Abe,
suggested Japan should intervene in exchange markets to
keep investors from pushing the Yens value up.
But the G-20s statement reflected a gathering consensus
that many countries are depending too heavily on monetary
policy to stimulate growth. The statement reiterated a
pledge for countries to refrain from cheapening their
currencies to gain a competitive edgeanother sign of
concern about China, among others.
Nikkei article said while the G20 economies may be living
together, they are far from coordinating their policies. And
this could add fuel to the market volatility. One Japanese
official said G-20 as a whole, did not acknowledge that the
global economy is on the verge of a crisis. One interesting
point made that China slowdown and Fed rate hikes are not
the factors behind market upheavals. Fall in commodities
especially oil have dragged the countries that export these
resources down with them. Now there is talk of Britain
exiting the European Union. This possibility is also casting a
pall on markets. Nikkei warned that there is a lack of policy
coordination and structural reforms from and in the G-20
nations would only add to the existing risk factors (articles
from G20 pages 2-3).
Irish PM Edna Kenny has become the latest leader of a crisishit Eurozone country to suffer at the hands of voters.
Ireland's ruling coalition of Fine Gael and Labour is suffering
a slump in support at national elections with the prospect of
winning a combined 34% that would end their chances of
returning to government. Kenny accepted that the
governments losses meant there was no chance of the
coalition being returned to power. We are looking at
potential hung parliament (see page 9).
Despite a stronger than expected US Q4 GDP growth, Fed Res
Lael Brainard said shocks from abroad may lead the Federal
Reserve to lift short-term interest rates less than some
observers have expected. Speaking in NY, Brainard said the
tightening of financial conditions including the rise in the
dollar had already delivered the equivalent of three quarterpoint interest rate increases in the US (see page 10).
On Brexit, British PM David Cameron wrote on Sunday

Telegraph, appealing to voters that jobs, the cost of living
and family finances are all at stake in the referendum on
June 23. By the way, it is a long article see page 5. Belgian
Prime Minister Charles Michel has criticized some British
supporters of an exit from the EU for dreaming in
Technicolor, adding there would be no chance of a second
vote if the British people decide to leave the bloc in a June
referendum. In Sunday Telegraph poll, more than two thirds
believe leaving EU will have a negative impact on their
business, while just one in 50 says it will be positive. David
Lidington, British Minister of State for Europe warned UK
would be thrust into economic limbo for up to 10 years if
the UK were to leave, as it tried to disengage from the EU on
favourable terms and then establish a set of highly complex
replacement trade deals across the world (page 8).
Echoing German Finance Minister Schubles words on easy
money, former BOE Governor Lord Mervyn King has warned
that the world is on the cusp of another crash because
regulators have failed in their attempts to reform the
financial system in the wake of the last crisis. He said low
interest rates have fuelled asset prices and a desperate
search for yield, leaving central banks trapped in a
prisoners dilemma unable to raise rates for fear of slowing
growth and causing another downturn (page 7).
The AFR - This weekend's capital city auction results show no
evidence that buyers had concerns about a looming house
price crash - as predicted by contrarian research house
Variant Perception in its 'Big Short'-themed report (page 13).
Good piece in The Sunday Telegraph penned by Martin
Gilbert of Aberdeen Asset Management. He said there is no
substitute for visiting a country if you really want to
understand what is going on there. Get there, meet
companies and policymakers and listen to what the people
you meet have to say. Something Kyle Bass doesnt want to
hear. Is China slowdown really so bad? Chinas policymakers
made a deliberate decision a few years ago, to move the
economy away from an investment-led, export-driven model
towards one in which domestic consumption plays the
dominant role. The countrys leaders want growth that is
sustainable. However, its clear that the country is heading
for a softer, rather than harder, landing. You need to look
beyond the stock market for the clues of why, though.
Chinas consumer spending is still motoring (page 14).
On corporate news, FT wrote Barclays is planning to
announce on Tuesday that the British bank has decided to
exit its African operations in a bold move to refocus the bank
on its core UK and US markets. The sale of the banks 62.3%
stake in its Johannesburg-listed subsidiary is worth about
3.5bn at current market prices (page 4). Bank of America is
set to become the latest on Wall Street to show people the
door after several of its rivals set out plans to cut thousands
of positions at financial centres worldwide (page 11). On
bright side, Brazils Petrleo Brasileiro SA on Friday said it
has signed a term sheet with China Development Bank to
obtain loans worth $10 billion in exchange for supplying
petroleum to Chinese companies (page 11).
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright 2013 The Poon Report by Vincent Poon. All rights reserved.
News from Shanghai

G-20 Says Economic Risks Have Risen Globally
Taken from the WSJ Saturday, 27 February 2016
Finance ministers say all tools are needed to sustain growth,

but dont call for coordinated spending
Citing mounting threats to the global economy, world
financial chiefs vowed to accelerate long-promised economic
overhauls to ease the burden on the easy-money stimulus
policies that are fast running out of steam.
Finance ministers and central bankers from the Group of 20
largest economies meeting in Shanghai during the weekend
sought to allay growing concerns that fissures in the global
economyincluding the potential for a sharp deceleration in
the Chinese economycould pitch the world back into
recession.
We will use all policy toolsmonetary, fiscal and structural
to strengthen growth, boost investment and ensure stability
in financial markets, the G-20 said in its official communiqu
issued Saturday after two days of intense talks.
Global markets have shuddered in recent months amid a
souring growth outlook, overall weak demand and anxieties
that Chinas economy may be falling faster than Beijing
acknowledges and might potentially undermine an
increasingly fragile global economy. The International
Monetary Fund earlier this week said it likely would
downgrade its forecast in coming months, calling for a
coordinated program to boost demand.
Theres clearly a sense of renewed urgency among the G20 countries, IMF Managing Director Christine Lagarde said
after the meeting. They dont have much time left.
The G-20 said downside risks and vulnerabilities have
risen, pointing to volatile capital flows, the commodity
price plunge and a potential exit of the U.K. from the
European Union in a list of threats to global growth.
Additionally there are growing concerns about the risk of
further downward revision in global economic prospects,
the group said.
Although the G-20 said countries may need to explore
ramping up spending, its promises fell short of calls by the
IMF and others for a coordinated stimulus package to revive
flagging output. And there was no discussion of any sort of
currency accord, as suggested by some investors, as a way to
temper global economic turmoil.
But the G-20s statement reflected a gathering consensus
that many countries are depending too heavily on monetary
policy to stimulate growth. The statement reiterated a
pledge for countries to refrain from cheapening their
currencies to gain a competitive edgeanother sign of
concern about China, among others.
Weve been practicing monetary policy accommodation
now for many years, and clearly that is an area of
diminishing returns, said Angel Gurra, secretary-general of
the
Organisation
for
Economic
Cooperation
and
Development.
German Finance Minister Wolfgang Schuble said debtfinanced fiscal policies and easy money monetary policies
may have prevented the financial crisis from spiraling out of
control, but they may have laid the foundation for the next
crisis.
Instead, G-20 countries said they would speed up
implementation of previous commitments to restructure
their economies, efforts meant to raise longer term growth
prospects and encourage investors concerned about anemic
expansions.
In 2014, the G-20 outlined a plan to add $2 trillion more in
goods and services to the $75 trillion global economy. Two
years later, the group has failed to deliver more than half of
those promised reforms and growth is more than a half

percentage point lower than forecast rate of 4.1%.
Japanese Prime Minister Shinzo Abes plan to use monetary
easing, government spending and structural reforms to
revitalize a country long mired in low growth has fallen flat.
Brazils government, rocked by a continuing corruption
scandal and in the middle of a two-year-plus contraction,
has put off its reforms, including infrastructure investments
needed to deepen the arteries of commerce. A thicket of
regulations constrain foreign investment in India.
Central banks, however, have kept the easy-money spigots
open. Europe and Japan are now delving into the uncharted
and some say riskywaters of negative interest rates in an
increasingly desperate effort to jump-start perennially
sluggish growth.
Measures such as those that push the value of currencies
down havent been accompanied by promised structural
revamps such as rewriting industry regulations and tax
codes. That, officials say, is undermining the impact of
monetary policy.
Turmoil overseas is weighing on one of the few bright spots
in the global economy, the U.S., where the Federal Reserve
is considering slowing the pace of rate increases. We need
to redouble our efforts to boost global demand rather than
relying on the U.S. as the consumer of first and last resort,
U.S. Treasury Secretary Jacob Lew said.
Meanwhile, as Chinas slowdown grinds on, capital is rushing
for the exits by about $100 billion a month recently, stoking
concerns that Beijing may revert to currency devaluation.
That, in turn, might not only spur investor panic about the
worlds second largest economy, but also trigger a cascade of
other exchange rates depreciations around the globe.
Senior Chinese officials worked hard to reduce anxiety about
the nations economic transition. Chinas central bank
Governor Zhou Xiaochuan played down the likelihood
authorities intend to push the yuan lower.
Many officials praised Beijings statements. There was a
clear and credible communication from the Chinese, said
Pierre Moscovici, Europes economic commissioner.
Enough doubt lingers that G-20 countries said they would
consult closely on exchange rate policies. Its a
commitment to keep each other informed and avoid
surprising each other because thats what you do when you
want to try to conduct your policies in an orderly way, Mr.
Lew said.
Financial sector policy makers agree that China remains one
of the worlds fastest-growing economies and isnt in crisis,
cushioned by $3 trillion in foreign exchange reserves.
Uncertainties abound however, about how successful Beijing
will be in guiding the economy toward consumer demand
and how much pain it is ready to endure in moving away
from the investment-led model that produced years of
growth.
The massive capital outflows and plunges in Chinas stock
markets that have erased trillions of dollars of market
capitalization worry global markets that many Chinese are
losing confidence.
Given the G-20s slow uptake in delivering structural
overhauls, markets may have reason to doubt the groups
ability to take the weight off central banks.
Koichi Hamada, a special economic adviser to Japans prime
minister, suggested Tokyo should intervene in exchange
markets to keep investors from pushing the yens value up.
Sporadic interventions may be needed to punish speculators
who are taking advantage of temporary market psychology
to keep the yen far above its market value, Mr. Hamada
wrote in a blog post on Friday.
(Full article click - WSJ)
---
As economy chiefs
differences emerge
nod
in
agreement,
Taken from the Nikkei Sunday, 28 February 2016
Finance ministers and central bankers from 20 industrial and

emerging economies on Saturday called for using "all policy
tools" to arrest the tumult in global financial markets.
The G-20 fiscal and monetary chiefs also issued a
communique that says they "judge the scale of recent
market volatility has not reflected the underlying
fundamentals of the global economy."
The statement calls on member nations to consider using
monetary, fiscal and structural policy tools, individually and
collectively, to achieve sustainable growth.
The difficult part is the "collectively." While the 20
economies may be living together, they are far from
coordinating their policies. And this could add fuel to the
market volatility.
Value of the yuan
China is seen as having triggered the turmoil, which began
last summer when its stock market went haywire, then
kicked in again at the beginning of January.
Beijing's seemingly haphazard economic policymaking has
undermined market confidence at home and abroad. This
has also left the country's currency vulnerable. And in midDecember, when the U.S. Federal Reserve hiked interest
rates, the yuan came under renewed downward pressure.
The U.S. move hastened capital outflows from the country
which began to feed on themselves.
Japanese Finance Minister Taro Aso used the G-20 meeting to
call on China to "present a package of policies, including
specific structural reform plans and steps to stabilize the
yuan."
Speaking to reporters after the meeting, U.S. Treasury
Secretary Jack Lew said China needs to implement currency
exchange reforms and give the market more say in
determining the value of the yuan.
Chinese Finance Minister Lou Jiwei said Beijing has plenty of
fiscal policy options on the table. It is ready to acquiesce to
the U.S. and other G-20 nations and step on the fiscal
stimulus pedal, provided the spending falls in line with
Chinese leaders' decision in late December on how much to
let the deficit grow.
So as far as policy coordination goes, put China in the
"willing" column.
What other country might go in that column? Unclear. The G20 as a whole, a Japanese government official explained,
"does not acknowledge that the global economy is on the
verge of a crisis."
Therefore, the official continued, the countries are not
thinking of the kind of coordinated currency interventions or
of concerted efforts to implement large-scale fiscal-stimulus
budgets like the ones that chased away the 2008 global
financial crisis.
Existing risk factors
So it will be up to each G-20 member to decide on its own
what specific measures to take to get the markets to calm
down.
China and other emerging countries being hit by capital
outflows largely attribute their woes to the U.S. rate hike;
each has its own interpretation of what the communique
actually calls for.
After the meeting, German Finance Minister Wolfgang
Schaeuble told reporters that the global economy is in
better shape than the market volatility indicates; he
cautioned against further fiscal spending.
Arguably, by using the expression "all policy tools," the G-20
economy chiefs indicated that they are not of the same mind
when it comes to their current intentions and future

policies.
China's economic slowdown and the U.S. rate hike are not
the only factors behind market upheavals. Prices of crude oil
and other important commodities have been plunging,
pulling the countries that export these resources down with
them. The U.S. recovery that was behind the rate hike has
turned out to be tepid. Now there is talk of Britain exiting
the European Union. This possibility is also casting a pall on
markets.
A lack of policy coordination and structural reforms from and
in the G-20 nations would only add to the existing risk
factors.
(Full article click - Nikkei)
UK News
Barclays set to exit African business
Taken from the FT Saturday, 27 February 2016
Barclays new chief executive is planning to announce on

Tuesday that the British bank has decided to exit its African
operations in a bold move to refocus the bank on its core UK
and US markets
After a review of the African business led by Jes Staley, the
banks board decided last week that in principle it made
strategic sense to get out of the continent, according to
people familiar with the matter.
The board has delegated authority to a subcommittee to
examine the practicalities of how and when to sell Barclays
Africa, one of its four main lines of business. By delegating
authority it avoided having to disclose the decision
immediately.
This means that a sale of the banks 62.3 per cent stake in
its Johannesburg-listed subsidiary will depend on numerous
factors, including market conditions and the response of
regulators.
The stake is worth R78bn (3.5bn) at current market prices.
Investment bankers say there are no obvious strategic buyers
for the African business. The value of the stake has fallen in
recent months, making the option of steadily selling the
stake to institutional investors less attractive. Barclays
declined to comment.
Several people who have met Mr Staley recently say he
recognises Africa is one of Barclays few genuine growth
areas, but he believes it is becoming a costly distraction as
the South African rand devalues and the countrys economy
slows down.
The bank also sees extra risks of corruption and misconduct
in Africa. Barclays does not own all of the equity, but it
owns 100 per cent of the risk if something goes wrong, said
one of the people.
The decision to pull out of Africa will reinforce Mr Staleys
strategy of refocusing Barclays on its core British and
American markets. Last month, he announced plans to
further trim the investment bank, cutting up to 1,200 staff
by closing smaller operations in Asia, Brazil, Europe and
Russia.
One benefit of selling out of Africa is that it could address
worries about Barclays capital. Analysts at Jefferies
estimate that a sale could add as much as 0.8 percentage
points to Barclays core capital ratio taking it much closer
to its 12 per cent target.
While we expect the process of selling Barclays Africa
Group to prove more difficult than the market currently
expects...a wholesale exit from Africa would seem to make
sense, Joseph Dickerson, banks analyst at Jefferies, said in
a note this month.
Barclays has had operations in parts of Africa for almost a
century. Barclays Africa Group Limited, which includes the
South African branch network Absa, is one of the largest
banks on the continent, with a R991bn balance sheet. It has
45,000 employees a third of all Barclays staff and 1,267
branches across 12 countries, including Kenya, Ghana,
Tanzania, Mozambique, and Uganda.
But the recent contribution of the African business to the
overall groups profits has been hit by the devaluation of the
South African rand against the British pound. The African
units return on equity was 9.3 per cent last year below
the banks target of 11 per cent.
The rand crashed to all-time lows against leading currencies
late last year. While it partly recovered after South African
president Jacob Zuma reversed his controversial
appointment of a relatively unknown MP as finance minister,

it is still down by a quarter against the pound over the past
year.
South Africas black economic-empowerment rules mean
that Barclays stake in its African business is capped at 75
per cent. The UK bank has a minority of board seats.
Talks over a deal to sell Barclays Egyptian and Zimbabwean
operations to its South African subsidiary broke down this
month, and the bank is now likely to also sell its operations
in those two countries.
(Full article click - FT)
---
UK faces fresh spending cuts in Budget

Britain is facing a new round of spending cuts in next

months Budget, George Osborne has warned, following
new figures that show the economy is smaller than we
thought.
Speaking ahead of the G20 finance ministers meeting in
Shanghai, the UK chancellor said Britain may need to
undertake further reductions in spending because this
country can only afford what it can afford. His words will
send shivers down the spines of senior civil servants who are
already struggling to find additional savings after years of
deep cuts.
Less than a month before the Budget, Mr Osborne will have a
good idea of the shape of the UKs economic forecasts. His
unusually explicit comments suggest they do not look good.
The chancellor told the BBC that the government would use
the annual financial set piece to look at public expenditure
again and that his economic principles were that we must
live within our means. He gave no sense of what scale of
additional cuts he was anticipating.
On existing plans, public spending on services other than
health is set to reach its lowest level as a proportion of
national income since 1948-49, at a time when Britains
population is expanding and ageing.
Whereas Mr Osborne was able to use an unexpected
forecasting windfall to scrap plans for highly controversial
cuts to tax credits in the Autumn Statement, in recent
months the economic news has been running against the
chancellor.
This month the Bank of England downgraded its inflation,
growth and wage forecasts and the likelihood is the Office
for Budgetary Responsibility will have to do the same. It is
probable the chancellor has already seen at least the first
iteration of the OBRs forecast.
Revisions to official data just before Christmas showed that
nominal GDP which measures the value of the economy
without adjusting for the impact of inflation fell to its
lowest rate since 2009.
Although Mr Osborne sought to cast the blame firmly on
global economic factors, much of the weakness in the
government finances is due to tax receipts being persistently
weaker than forecast over a number of years. Slower-thanexpected wage growth, in particular, has meant income tax
receipts have been a continual disappointment.
On Thursday, business investment suffered its biggest fall
since 2014 as the weakening global environment and fears
over a British exit from the EU hit company confidence.
Finance ministers were expected to raise concerns about the
impact on the world economy if Britain leaves at their
meeting on Friday after lobbying from the UK.
With just two months of the financial year remaining the
government has borrowed 66.5bn to cover the gap between
spending and revenues leaving the Treasury with only 7bn
left to spend if it is to meet the OBRs forecast borrowing
figure of 73.5bn for the year ending April 2016.
Slower growth also means Mr Osbornes chances of meeting

his twin fiscal rules that debt should be falling as a
proportion of GDP from this year, and that the public
finances should be in surplus by 2019-20 are also in
jeopardy.
The Institute for Fiscal Studies, the leading economic thinktank, warned a few weeks ago that the chancellor would
have to break a whole series of records if he was to make his
targets.
The IFS estimated that if average earnings did rise 1 per cent
less by 2019-20 than the November forecast, Mr Osborne
could expect to lose 5bn of income tax and national
insurance revenues.
The turmoil in the global markets, which has pulled down
the FTSE 100, could also cost the government another 2bn
in lower capital gains tax receipts.
John McDonnell, Labours shadow chancellor, said the biggest
risk to the UK economy was Mr Osborne
This is a total humiliation for floundering George Osborne.
He has sneaked off to China to admit what Labour have been
saying for months, that his recovery is built on sand.
Labour and a growing coalition that now includes the OECD
and the IMF are calling for an economy based on increased
investment.
---
Belgian Leader Says U.K. Wont Get Second

Chance From EU
Prime Minister Charles Michel says some British proponents

of EU exit are dreaming in Technicolor
Belgian Prime Minister Charles Michel criticized some British
supporters of an exit from the European Union for dreaming
in Technicolor, adding there would be no chance of a
second vote if the British people decide to leave the bloc in
a June referendum.
In an interview with The Wall Street Journal, Mr. Michel
predicted that a vote to leave would likely lead to the
abandonment of current agreements allowing British
immigration officials to check passports of visitors to the
U.K. in France and in Belgium.
Everything will be called into question, absolutely
everything. Our agreements concerning immigration
procedures, economic agreements, our agreements on
security, all of that will be called into question, he said.
Its thus likely that the borders will be on the British
shores.
He said people who argued that after voting to leave, the
U.K. could quickly negotiate a close trading relationship with
the bloclike those developed by Norway or Switzerland
were dreaming in Technicolor.
If Great Britain were out of the EU, it would become a
small power, he said, describing the U.K. today as still a
great political, economic and military power.
After two days of negotiations with other EU leaders, British
Prime Minister David Cameron secured an agreement
granting the U.K. some exceptions to EU rules, paving the
way for a referendum on membership on June 23. During the
summit negotiations, Mr. Michel depicted himself as an
evangelist for what he called Europes fundamental
values.
In his interview, Mr. Michel confronted arguments made by
some supporters of a British EU exit. He strongly disputed
their assertion that a vote to leave would prompt further
negotiations over Britains EU membership, setting up a
second referendum on more favorable terms for the U.K.
Boris Johnson, the mayor of London and a leading proponent
within Mr. Camerons Conservative Party of a British exit, has
hinted that he favors this approach. All EU history shows

that they only really listen to a population when it says
no, he said.
Boris Johnson is seriously wrong when he believes a second
chance is possible, Mr. Michel said.
The Belgian prime minister played an important role in
ensuring that a so-called self-destruct clause was included in
the agreement secured by Mr. Cameron, EU diplomats said.
Under the clause, the accord becomes void following a vote
to exit, with further negotiations based on the agreed texts
ruled out.
Asked if the deal was secure in the face of possible
challenges at the European Court of Justice and amendments
from the European Parliament, he said it was solid. Its a
matter of credibility for each country that has committed
itself, he said.
Mr. Michel said he was delivering a clear message to British
public opinion. Things are simple: on or off, in or out, he
said.
A vote to leave would be followed by invoking Article 50 of
the EU treaty, which foresees two years of negotiations
before a country formally departs. According to Mr. Michel,
negotiations with the U.K. after a vote to leave the EU
would be long and tedious.
He said it was very likely that because the U.K. wouldnt
be able to secure agreement on some issues with all 27
remaining EU members, it would have to negotiate some
aspects bilaterally with each EU country, a process that will
take years.
Mr. Michel said the U.K. has to choose between remaining an
EU member or losing preferential access to its internal
market. You cant have all the advantages of preferential
access to the market and assume none of the
consequences, he said.
Economically speaking, if we re-establish all border checks,
all levies on imports or exports of goodsDo [the British]
think that with losing access to the European market, they
will be stronger? Mr. Michel said.
Mr. Michel said the U.K. had a lot to lose by leaving the EU,
and little to win. Undoubtedly, those who say no to
Europe have an emotional approach, he said. Im not
emotional, Im rational.
He said the agreement secured by Mr. Cameron was
confirmation that the EU was no longer a project in which all
European countries were heading toward a similar level of
integration. We are now, without any doubt, in a project of
Europe with different speeds, he said.
---
David Cameron: Brexit would be 'gamble of the

century'
Taken from the Sunday Telegraph 28 February 2016
In an article for the Telegraph, Prime Minister David

Cameron demands Cabinet rebels answer key questions over
the future for Britain outside the European Union
A week after six of his Cabinet ministers announced they
would campaign against him in the EU referendum, David
Cameron warns the public of the risks of leaving the EU.
He calls on Leave campaigners to spell out the kind of
trading relationship Britain would have outside the EU and
demands that they detail how the UK would cooperate with
other countries to stop terrorists.
In an appeal to voters, the Prime Minister says jobs, the
cost of living and family finances are all at stake in the
referendum on June 23.
On 23rd June, nothing less than the future of our country is
at stake.
If you vote to remain in Europe, I can clearly describe what

youre voting for. Our trade links with a reformed Europe
and the wider world will grow; well keep on working with
our neighbours to make our country safer; and Britain will
continue to help set the rules of the market of 500 million
people on our doorstep, and have a say over the future of
the continent to which we are geographically tied. Thats
the picture of in positive and definitive.
Instead, when the people campaigning for out are asked
to set out a vision outside the European Union, they become
extremely vague. Its simply not good enough to assert
everything will be all right when jobs and our countrys
future are at stake. Thats why today I want to set out some
of the specific questions those who would leave the
European Union must answer. They dont owe it to me; they
owe it to us all, because at the moment what they are
offering is a leap in the dark.
The first question is: what trading relationship would Britain
have with Europe after leaving? Every country thats been
granted full access to the Single Market has had to pay into
the EU, and accept free movement of people but has no
say over rules that govern those things.
Just ask Norway; they pay roughly the same per head to the
EU as Britain does, and they accept twice as many EU
migrants, yet they have no say at the EU Council.
Another suggestion is to negotiate a Free Trade Agreement
or similar with the EU, like Canada, Switzerland or Turkey.
But none of these countries has an agreement that is any
way as comprehensive as the Single Market. Thats OK for
them around a tenth of Canadas exports, for example, go
to Europe; but around half of ours do. Whats more,
Canadas agreement, when it takes effect, will offer less
access for services than we have now. But that sector makes
up three-quarters of our economy. What would that mean for
UK jobs in retail, insurance and creative industries?
A final option is to fall back onto the World Trade
Organisation for trade. But this could be crippling for our
industries, as wed have to accept tariffs that are sometimes
as high as 50 per cent.
The second question is: how long would it take to put a new
relationship in place and how great would the uncertainty
be for families and businesses in the meantime? It took
Switzerland a decade to negotiate their current relationship
with Europe, and Canada seven years and theirs still hasnt
been implemented. Of course, those who advocate leaving
Europe say we should just sign trade deals with other parts
of the world. But how plausible is it that India, China or
Brazil would sign a trade deal with us before they know what
sort of new relationship we have with Europe?
While all this wrangling goes on, there would be huge
amounts of uncertainty, and it would have an impact on
investment and trade and, ultimately, your job, the prices
you pay and your familys finances.
The third question is about security. Today Britain has a
whole set of arrangements with our European neighbours:
the European Arrest Warrant, access to European criminal
records, sharing information to stop terrorists coming to our
country.
Do those who want to leave support this network of security
cooperation? If not, they need to spell out how they intend
to keep people safe. Do they propose individual agreements
with 27 countries? How long would that take? Or do they
propose an agreement with the EU simply to opt back into
all of the arrangements again? Surely that would mean
again we would be subject to rules we would have no
power over influencing the complete opposite of
sovereignty.
Fourth, theres a bigger question about our role in the world:

outside the EU, is Britain more able or less able to get things
done? Of course, were a strong country. Were the 5th
largest economy in the world. Weve got superb armed
forces. But think of the things that have threatened us in
recent years: the prospect of a nuclear Iran;
Russian aggression in Ukraine; the overwhelming impact of
the migration crisis; the poison of Islamist extremism and
terrorism.
European countries have to work together to deal with
them, and it is through the EU that Britain has helped drive
Europes response. And they will remain issues if Britain
leaves the EU. That doesnt mean we cant do things with
NATO or with America but there is a reason that our NATO
allies want us to remain in the EU.
They can see clearly that our membership amplifies our
power as a nation, and that now is not a time for disunity
among Western nations.
As you consider these questions, bear in mind the process for
leaving the EU, as set out in Article 50 of the European
Treaty. A Leave vote would set the clock ticking on a twoyear period to negotiate the terms of exit. If we failed to
reach an agreement, all 27 countries would have to approve
an extension, or wed fall back onto basic rules. That means
that, without an extension, our full access to the Single
Market ceases and our free trade agreements around the
world lapse overnight.
A year ago, the Conservative election manifesto contained a
clear commitment: security at every stage of your life.
Britain is doing well. Our economy is growing;
unemployment is falling to record lows.
We need to be absolutely sure, if we are to put all that at
risk, that the future would be better for our country outside
the EU than it is today.
There is no doubt in my mind that the only certainty of exit
is uncertainty; that leaving Europe is fraught with risk. Risk
to our economy, because the dislocation could put pressure
on the pound, on interest rates and on growth. Risk to our
cooperation on crime and security matters. And risk to our
reputation as a strong country at the heart of the worlds
most important institutions. With so many gaps in the out
case, the decision is clearly one between the great unknown
and a greater Britain. A vote to leave is the gamble of the
century. And it would be our childrens futures on the table
if we were to roll the dice.
(Full article click - Telegraph)
---
Two thirds of companies want Britain to stay in

the EU
An overwhelming majority of some of the biggest companies

in Britain and Europe are against Brexit, a survey backed by
one of the Citys most influential fund managers has found.
More than two thirds believe leaving the European Union will
have a negative impact on their business, while just one in
50 says it will be positive, the poll of 174 large UK and
European-listed companies found.
Two thirds of those surveyed agreed that their company
benefits from membership of the EU, in contrast to only one
in 14 who disagree.
The research was carried out by Fidelity, one of the UKs
biggest institutional investors, among some of the largest
companies it holds shares in.
All of the respondents were either chief executives or
finance directors at firms with a stockmarket value of more
than $100m, while nearly a third were from companies with
a market capitalisation of more than $10bn.
Last weekend the Prime Minister, David Cameron, announced

that a referendum will be held on June 23 to decide
whether Britain should remain in the EU. Two days later,
bosses at some of Britains biggest FTSE 100-listed companies
came out in favour of the In campaign. Fears over a
possible Brexit have sent sterling crashing to its lowest level
against the US dollar since 2009.
Of the European companies that invest in the UK, six in 10
that Fidelity interviewed said a Brexit will have a negative
impact on their investments in the UK. Only 1pc believed it
will have a positive impact on inward investment.
Of the companies that export from the UK to Europe, 40pc
said they were concerned about the impact of an exit on
their exports.
Fidelity has 185.1bn under management and has taken a
neutral stance on Brexit.
---
Worst 'yet to be felt' for pound after largest

weekly tumble in seven years
The pound is heading for a further decline that could see it

slump to the lowest level against the US dollar in three
decades, analysts at Deutsche Bank have warned.
The German bank predicts that after suffering its worst
week since the financial crisis, the pound will fall to $1.28
by the end of the year, 8pc lower than current levels. It
could weaken even more if Britain votes to leave the
European Union. The greatest declines are yet to be felt,
said Oliver Harvey, a currency strategist at the bank.
Sterling endured its worst week since the financial crisis last
week, falling by close to 3.8pc against the dollar to under
$1.39 as fears of a Brexit intensified. If Deutsche Banks
forecasts prove accurate, the pounds slide would take it to
its lowest level against the dollar since 1985.
Investors have become increasingly anxious about the
deterioration in the UKs current account deficit - the gap
between the amount of money flowing in and out of the
economy. The economic impact of this has been delayed by
UK companies paying higher dividends to their investors back
home, Mr Harvey said.
But British corporates are standing on the cusp of an
earnings recession, he said. As the dividends of banks,
miners and telecoms companies come under increasing
pressure, so too will the pound. Foreign earnings repatriated
to the UK will decline, reducing demand for the pound and
weighing on the currency, Deutsche Bank said.
The UK did very well out of the emerging market boom precrisis, and now those chickens are coming home to roost,
Mr Harvey said. Only now are we seeing the economic
effect, the effect thats relevant for sterling, he said,
adding that there had been a confluence of very bearish
factors, with China, emerging markets, and now these
dividend payments beginning to take a hit.
If dividend payouts continue to fall, sterling will start to
feel the full brunt of the [current account] deterioration for
the first time, he said. The possibility of a Brexit is
another negative factor, Mr Harvey added. If the UK left
the EU, sterling would fall a lot faster, sliding to $1.15 by
the end of the year, he said, a loss of almost a fifth.
Jaco Rouw, of NN Investment Partners, said fears surrounding
a possible UK exit from Europe have left sterling 7pc weaker
than it would otherwise have been. Brexit risk only seems
to have been priced in to an extent, as the referendum
outcome is hard to predict, he said.
Brexit would probably be a major shock, having large
repercussions on both the UK and the eurozone. Mr Rouw
believes that sterling could suffer a sharp fall of 5pc to 10pc

if the UK does vote to leave the EU.
---
World economy stands on the cusp of another

crash, warns Lord Mervyn King
Former Bank of England Governor Lord Mervyn King has

warned that the world is on the cusp of another crash
because regulators have failed in their attempts to reform
the financial system in the wake of the last crisis.
Another crisis is certain, and the failureto tackle the
disequilibrium in the world economy makes it likely that it
will come sooner rather than later, Lord King says in his
new book, the exclusive serialisation of which starts in The
Telegraph this weekend.
Since the last crisis, governments and regulators have been
hyperactive at the national and international level but
bankers and regulators have colluded in a self-defeating
spiral of complexity, he claims.
Lord King had a turbulent ten-year reign as Governor of Bank
of England between 2003 and 2013 - a period in which he
was at the heart of a 500bn bailout of Britains broken
banking system in 2008 led by Chancellor Alistair Darling and
Prime Minister Gordon Brown in response to the global crash.
As Governor of the Bank, Lord King was responsible for
Britains interest rate policy and money supply. He says that
Browns tripartite system of financial regulation, created
in 1997 and comprising the Bank of England, the Treasury
and the Financial Services Authority failed to protect
Britains financial system when the credit crunch struck in
2007.
A major failing before 2007 was that the monetary policy
framework designed to deal with good times and the lender
of last resort framework for bad times were not properly
integrated. In the crisis, massive support was extended not
to save the banks but in order to save the economy from the
banks, Lord King says.
The crisis was not a failure of individual policymakers or
bankers Lord King argues but of a system, and the ideas
that underpinned it...There was a general misunderstanding
of how the world economy worked.
Unsustainably high and low spending around the world led to
large
trade
surpluses
and
deficits,
creating
a
disequilibrium between major economies. This distorted
real interest rates and exchange rates and led to bad
investments in housing and property, he says.
Since the crisis, low interest rates have fuelled asset prices
and a desperate search for yield, leaving central banks
trapped in a prisoners dilemma unable to raise rates for
fear of slowing growth and causing another downturn.
However, short-term measures to maintain market
confidence in the aftermath of the crisis has only
perpetuated the underlying disequilibrium, Lord King
argues..
Only a fundamental rethink of how we...organise our
system of money and banking will prevent a repetition of the
crisis. Without reform of the financial system, another crisis
is certain, and the failureto tackle the disequilibrium in
the world economy makes it likely that it will come sooner
rather than later."
---
Brexit would spark decade of economic limbo,

claims top Tory
Taken from the Sunday Observer 28 February 2016
The UK would face a decade of massive economic

uncertainty with potentially disastrous consequences for
business and the pound if it were to vote to leave the EU,
the Europe minister says.
The dramatic warning from David Lidington, a key figure in
David Camerons renegotiation of EU membership, is part of
a frontal assault launched by Downing Street and the Foreign
Office aimed at discrediting the campaign for Brexit, now
headed by Boris Johnson and Michael Gove.
In an interview with the Observer, Lidington, who has served
a record period of six years in his post and has more
experience of EU negotiations than most in the cabinet, says
the UK would be thrust into economic limbo for up to 10
years if the UK were to leave, as it tried to disengage from
the EU on favourable terms and then establish a set of highly
complex replacement trade deals across the world.
The intervention came as finance ministers of the G20 group
of leading industrial nations meeting in China listed a shock
of a potential UK exit from the European Union as one of
the biggest risks to the world economy this year.
David Cameron said: With so many gaps in the out case,
the decision is clearly one between the great unknown and a
greater Britain. Writing in the Sunday Telegraph, he said
Brexit would create huge amounts of uncertainty and
added: It would be our childrens futures on the table if we
were to roll the dice.
Echoing a view shared by the prime minister and George
Osborne, Lidington said that, according to the EU rulebook,
the UK would be cut adrift from European treaties, and
therefore the single market, two years after a vote to leave
before it would have had time to negotiate replacement
trade deals.
Trade deals between the EU and other countries and
bilateral trade deals of any type normally take six, seven,
eight years and counting, Lidington said. Everything we
take for granted about access to the single market trade
taking place without customs checks or paperwork at
national frontiers, the right of British citizens to go and live
in Spain or France those would all be up in the air. It is
massive. It is massive what is at risk.
You would be in complete limbo and I think what that
would do for the pound and for business confidence would
be very serious indeed. It could last a decade.
Boris Johnson performed a sudden U-turn over Brexit, ruling
out the possibility of a second referendum after a Leave
vote something he, Gove and other Outers, including
former Tory leader Michael Howard, have recently suggested
would be possible.
Johnson told the Times he wanted the UK to get out and
then negotiate a series of trade arrangements around the
world and that out is out.
As part of a coordinated assault, foreign secretary Philip
Hammond accused the Leave camp of confusion and of
having no clear idea of what would follow a vote to get out
of Europe. He told the Observer: The Leave campaign has
come up with 20 possible options, but they all contain
significant risk to the British economy. Leave campaigners
now have to answer these key questions: what does leaving
look like? How many years would it take to put in place a
new deal with the EU? And what will happen to our security
cooperation arrangements with the EU?
Until we have their answers, a vote to leave is a leap into
the dark that would put the security of Britains future at
risk.
A document published on 28 Februaryby the Britain Stronger

in Europe campaign says Brexit campaigners have floated 30
different models of independent statehood from Peru to
Iceland, suggested as worthy of replication. The document
highlights differences among Out camp leaders over whether
the UK would end freedom of movement or continue to
make a contribution to the EU budget.
It claims that Matthew Elliott, the chief executive of the
campaign group Vote Leave, has said that the UK would still
retain its membership of the single market but also that
the benefits of the single market are far outweighed by the
costs.
In response, Elliott said: If we vote to remain, we will keep
giving away power and money every year. If we vote to
leave, we will take back control and spend our money on our
priorities.
We will be able to kick out those who make our laws. We
will be able to have a fairer, more humane and more
sensible immigration policy. We will have a new UK-EU
partnership based on free trade and friendly cooperation.
We will regain our independent voice on international bodies
such as the World Trade Organisation, where we have given
away our seat to Brussels. We will have more international
influence to argue for greater international cooperation.
In his Observer interview, Lidington said the Out campaign
was peddling two contradictory arguments. Their first
belief is that inside the EU we cannot achieve any
meaningful change and that too often the other countries
are in some sort of nefarious conspiracy against our
interests.
But their second belief which they hold equally firmly is
that outside the EU these very same countries and
government would rush to give us some new deal that had
all the benefits of EU membership I think the Leave
campaign is still in a state of confusion about what it
actually means by leave.
At the G20 finance ministers meeting US Treasury secretary
Jack Lew expressed clear support for Britains continued
membership of the EU. Our view is that its in the national
security and economic security [interests] of the United
Kingdom, of Europe and of the United States for the United
Kingdom to stay in the European Union.
This is an issue that will be decided by the voters of the
United Kingdom in June and we certainly hope that
[they]reach that conclusion, he added.
Ukip leader Nigel Farage said the G20 statements were no
surprise and examples of mates helping each other out.
Im not surprised that big government gets together to
support David Cameron. This is big banks, big business, big
government all scratching each others backs. I dont think
that impresses voters, he said.
(Full article click - Observer)
Irish Elections
Irish voters snub Fine Gael and Labour
Taken from the FT Sunday, 28 February 2016
Irish voters have delivered a snub to the outgoing centre-left

government of prime minister Enda Kenny after a general
election that has seen the return of Fianna Fil as a political
force and left the country facing a prolonged period of
political uncertainty.
As counting continued late on Saturday after the countrys
most closely-fought election for years, the coalition of Mr
Kennys Fine Gael and the Labour party fell well short of a
parliamentary majority as voters deserted it in favour of an
array of opposition parties, mostly on the left.
Mr Kenny becomes the latest leader of a crisis-hit eurozone
country to suffer at the hands of voters after a five-year
term marked by cuts to public spending, wages and
pensions, and a more recent economic recovery that has yet
to convince many Irish voters.
Fine Gael had a commanding lead in opinion polls just a
month ago. But its hopes of leading the next government
have been hit by a faltering campaign by Mr Kenny, the
routing of Labour which is set to lose around two-thirds of
the seats it held in the outgoing parliament and a sharp
swing back towards Fianna Fil, the main centrist opposition
party.
The outcome means Ireland could be heading into a situation
similar to that of Spain, which is still without a government
two months after its pre-Christmas general election.
The result has already sparked speculation about Mr Kennys
future after his partys unexpectedly bad showing. Fine Gael
won its biggest election victory just five years ago, when
Ireland was in the throes of a punishing austerity era
overseen by a troika of creditors led by the International
Monetary Fund.
An exit poll published early on Saturday by RTE, the state
broadcaster, showed that Fine Gael got 25 per cent of Irish
voters first preference votes in Fridays election, compared
to 36 per cent at the last election in 2011. Fianna Fil
secured 21 per cent. Labour, the junior coalition partner, got
7 per cent, down from nearly 20 per cent five years ago.
These outcomes are among the worst predicted by each
party, and suggest that support for the government
continued to ebb away during the election campaign. Brian
Hayes, Fine Gaels director of elections, described the
predicted vote share as a disappointing result for us of
that there is absolutely no doubt.
Perhaps the biggest winner from the election is Fianna Fil.
It was in power when Ireland suffered its worst financial
crisis between 2008 and 2010, and lost heavily in the 2011
election. But it appears to have staged a remarkable
comeback, testifying to the partys enduring appeal to
voters who abandoned it five years ago but were clearly
ready to go back.
Michel Martin, the partys leader, is generally regarded as
having had a good campaign, and he may well play a role in
deciding who becomes the next prime minister. People have
voted for a change of government, he told RTE.
The other big gainers are a range of independent candidates
and small parties, which harvested a combined 30 per cent
of the vote. Independent candidates are the usual forum for
protest votes in Irish elections, and this outcome means that
some of them may play a role in the next government either
as formal coalition members or informally supporting a
minority administration.
Sinn Fin, the hard-left party that campaigned on a radical
anti-austerity platform, got 16 per cent of the vote lower
than it had been expecting. Still, the former political wing
of the Provisional IRA is likely to also see a rise in its seat

representation in parliament, where it currently has 14 MPs.
Counting continues throughout the weekend. Irelands
system of proportional representation voting, in which voters
can select as many candidates as they wish, means that
multiple counts will be required as excess votes for one
candidate are transferred to second and third preferences,
and so on. However, the country should have a clear idea by
Sunday of the final distribution of seats in the countrys new
parliament.
---
Irish election: Enda Kenny plans to form

government despite losing voters
Taken from the Sunday Observer 28 February 2016
Rival party Fianna Fil celebrates comeback but dismisses

option of grand coalition with taoiseachs Fine Gael
Battered by unexpected losses in the Irish general election,
Enda Kenny has insisted that it is his duty to try to form and
head another government.
With his Fine Gael party expected to lose close to 30 seats,
the taoiseach said on Saturday night that he still has the
responsibility to provide the country with a stable
government in the future and I will consider that very
carefully over the next 36 hours.
Fine Gael came into the general election with 73 seats and,
with the Irish Labour party, had commanded the biggest
majority in Irish political history. Kenny said he would not
step down as party leader despite presiding over the huge
drop in support from this historic high.
He accepted that the governments losses meant there was
no chance of the coalition being returned to power. The
option of a majority government is gone, the option of a
Fine Gael/Labour government is gone so I need to know
the results of all the parties before I decide what is the best
thing to do given my duty and responsibility as taoiseach and
head of government, he said.
As Kenny considers his options Fianna Fil, Fine Gaels
historic rivals from the Irish civil war onwards, was
celebrating a stunning electoral comeback from its
unprecedented hammering in the 2011 general election.
On course to win up to 46 seats, Fianna Fil sources told the
Guardian that it would not be entering any grand coalition
with Fine Gael as part of a unity government that would bury
civil war politics forever. It would be madness to hand over
the mantle of opposition to Sinn Fin, one Fianna Fil
source said.
Earlier Sinn Fin vice-president, Mary Lou McDonald, who
topped the poll in Dublin Central with more than 5,000
votes, described the prospect of a Fine Gael-Fianna Fil
coalition as the stuff of nightmares.
Sinn Fin is on its way to its best ever performance in the
Irish Republic and will probably come out with more than 20
seats. Gerry Adams has once again topped the poll in the
border constituency of Louth and may return to the Dil with
his running mate Imelda Munster.
With counting across the Republic expected to go on for
several days, there will be little time to spare between the
formation of a new government and the set-piece events of
St Patricks Day as well as Easter Sunday 2016, when the
country remembers the centenary of the Easter Rising
against British rule.
The Irish Labour party suffered a similar fate to the Liberal
Democrats in the UK last May, when the Westminster
coalitions junior partner bore the brunt of voters feelings
of betrayal. Irish Labour had 33 seats going into the election
and will be fortunate to return with 10. Its embattled leader,
Joan Burton, managed to hold her seat in Dublin West,

however, despite earlier predictions she would lose it.
Burtons predecessor and the former deputy prime minister,
Eamon Gilmore, said the party had been prepared to take
hard decisions during its time in office.
Gilmore added: I think most people try to make decisions
and get elected at the same time. But there are occasions
when you have to make the choice between doing the right
thing and the popular thing. Our country was broke We
knew we had to take a risk.
The country was facing an existential crisis at that time. It
had to be fixed and it was. We could have ended up with a
second bailout. We could have faced a situation like
Greece.
Independents and leftwing parties have performed strongly
while the Green party has enjoyed a mini-resurrection. The
Greens were reduced to zero seats in 2011 but have, against
expectations, come back into the Dil with two seats.
The smaller parties and the independents may yet play roles
as kingmakers if the two biggest parties make overtures to
them. But the only thing certain about the 32nd Dil is that
it will be highly unstable and unlikely to last more than two
years.
(Full article click - Observer)
News Americas
Fed governor Brainard warns rate rises may be
at slower pace
Shocks from abroad may lead the Federal Reserve to lift

short-term interest rates less than some observers have
expected, a senior central banker said amid rising concerns
about the pace of global economic growth.
Lael Brainard, a member of the Feds board of governors,
said the tightening of financial conditions including the rise
in the dollar had already delivered the equivalent of three
quarter-point interest rate increases in the US, as she argued
the central bank needed to nurture the recovery by being
very cautious with its guidance on rates.
Speaking at the same conference in New York, policymakers
warned of slowing global demand and voiced calls for
countries to work together to bolster activity. Maurice
Obstfeld, chief economist at the International Monetary
Fund, said some form of co-ordinated response was
compelling. Peter Praet, an executive board member at
the European Central Bank, warned that global growth was
losing momentum and that weak pricing pressures were a
signal of poor world demand.
Finance ministers and central bankers are struggling to agree
on ways of boosting global growth in meetings of the G20 in
Shanghai. The IMF has urged bold measures amid
indications it is preparing to lower its global growth
forecasts.
Official figures on Friday morning showed the US economy
grew more rapidly than previously estimated in the fourth
quarter of 2015, while inflation picked up in January along
with household spending. But data in other major markets
have been less encouraging. The Fed kept policy on hold in
January amid deep uncertainty about the potential impact
of overseas developments and market gyrations on the US
economy.
Ms Brainard, who is one of the more dovish policymakers at
the Fed, told the conference that factors including spillovers
from weaker foreign economies could mean there is less of a
divergence between US monetary policy and rates set in
other major economies, where policy is expected to remain
loose.
As policy adjusts to the evolution of the data, the
combination of heightened spillovers from weaker foreign
economies, along with a lower neutral rate, could result in a
lower policy path in the United States relative to what many
had predicted, Ms Brainard said in her speech.
She highlighted falling inflation expectations in markets and
surveys as being deserving of policymakers attention,
adding that lower unemployment may not drive inflation up
as much as historical relationships suggested. Although
Chinas imports from the US are modest, the question marks
over its foreign exchange policies and changes in its growth
drivers have had broader global spillovers that may pose
risks to the US outlook.
The speakers were at a conference sponsored by the
University of Chicago Booth School of Business. The event
was focused on the ways in which the Fed should best
communicate with markets, as attendees discussed a paper
arguing the central bank should avoid calendar-based
guidance to steer markets on the rates outlook.
That notion met with pushback from some policymakers.
John Williams, the San Francisco Fed chief, said time-based
guidance could be like a sledgehammer that acts as a
powerful tool to move expectations when required.
---
Bank of America prepares to make investment

banking job cuts
Traders at Bank of America are in for an unsettling few

weeks as their employer eyes a higher-than-usual number of
job cuts at its capital markets and investment banking
operations.
The US bank is set to become the latest on Wall Street to
show people the door after several of its rivals set out plans
to cut thousands of positions at financial centres worldwide.
The number of employees to go at Bank of America could not
be determined on Friday but people familiar with the matter
said it was likely to be higher than the 5 per cent who are
typically axed each year in investment banking.
Competitors including Morgan Stanley and Credit Suisse have
already laid down plans for cuts as pressures mount on
trading businesses particularly in fixed income, currencies
and commodities.
First-quarter FICC revenues are set to drop by an average 15
per cent at Bank of America, Citigroup, JPMorgan and
Morgan Stanley, analysts at Goldman Sachs estimated this
week.
Structural challenges tougher regulations and a shift
toward electronic trading have combined with a cyclical
downturn as choppy financial markets have made clients less
likely to trade.
Bank of America, which is based in Charlotte, North
Carolina, declined to comment on the planned cuts, which
were reported earlier on Friday by Business Insider.
Brian Moynihan, chairman and chief executive, said at the
World Economic Forum in Davos last month that further cuts
across the bank were likely.
The lender has not set a cost-cutting target publicly,
although it has committed to keeping annual expenses
beneath $13bn while seeking to expand the business.
More than 10,000 jobs went across all the banks divisions
last year, reducing the total headcount to about 213,000 at
the end of the year. Bank of America does not disclose how
many people work at its global banking and global markets
business.
Last month, the bank published its biggest annual profit in
nearly a decade as it seeks to draw a line under the financial
crisis.
However, revenues fell and some analysts are concerned
about the banks ability to keep up the pace of cost-cutting,
which has boosted its financial performance.
Revenue from FICC sales and trading fell 4 per cent last year
to $8.7bn, the third successive annual decline.
Bank of Americas shares have dropped by a quarter this
year, making it the worst performing bank stock in the S&P
500.
---
Brazils Petrobras Signs $10 Billion China Loan

Pact
Details of deal still under discussion, though financially

pressed state energy firm says it would supply oil to Chinese
companies
Brazils financially pressed state-controlled energy company
Petrleo Brasileiro SA on Friday said it has signed a term
sheet with China Development Bank to obtain loans worth
$10 billion in exchange for supplying petroleum to Chinese
companies.
The deal, details of which are still under discussion, was
vaguely outlined during a May 2015 visit to Brazil by Chinese
Premier Li Keqiang. At that time, Brazilian President Dilma
Rousseff suggested the money could be used for drilling in
the pre-salt geological formation, referring to large, ultradeepwater oil deposits off Brazils coast that Petrobras is
struggling to develop.
Petrobras didnt comment further on the loan or about the
companys intentions for the proceeds.
Saddled with the global oil industrys largest debt burden,
Petrobras has grown increasingly strapped for cash as oil
prices have fallen to their lowest in more than a decade.
The companys strategy to pay down its debt has so far
hinged on raising more than $14 billion through asset sales
this year, at a time when oil companies around the world are
doing the same.
Eager for natural resources, China has become a familiar
lender to Latin America in recent years, using its state banks
to offer loans to distressed companies and governments that
have been shut out of private debt markets.
Petrobras dollar bonds maturing in 2020 are trading at just
75 cents on the dollar, reflecting investor doubts about the
companys ability to repay creditors. The bonds have been
downgraded to so-called junk status in recent months
alongside the Brazilian government, which itself has racked
up a large budget deficit and a substantial debt load.
On Feb. 24, Moodys Investors Service became the latest
credit-ratings firm to downgrade Petrobras, noting the
company has about $23 billion in debt maturing this year and
next. And of the $25 billion in cash holdings reported in
September, Moodys says Petrobras will likely need $8 billion
to $10 billion for its day-to-day operations.
Free cash flow will remain negative in the foreseeable
future, Moodys said. Although Moodys recognizes that the
companys has attractive valuable assets, execution of the
sale program as planned may be difficult under current
global industry conditions and Brazils economic and political
situation.
News Asia
Malaysia Leader Najib Razak Lashes Out Against
His Critics in Party and Media
Ruling party suspends senior official and probes website that

reports on fund scandal
Malaysias ruling party on Friday suspended a deputy party
president who called to step up investigations into alleged
graft at a multibillion-dollar state investment fund, as the
government heightened efforts to contain media reports on
the issue.
Prime Minister Najib Razak, as head of the ruling party, has
sidelined party members who have raised questions over the
scandal at the 1MDB fund, which he set up in 2009 to propel
economic growth.
His government also is scrutinizing media that report into
the matter and is proposing changes to Malaysian law to
allow caning and life imprisonment for journalists and others
who are found guilty of receiving leaked documents.
On Friday, the editor of an online news organization that has
reported extensively on the fund said he was ordered to
appear before police after the government communications
regulator said it blocked access to the website this week.
Its a form of intimidation, said Jahabar Sadiq, chief editor
of the website, the Malaysian Insider. They just want to
shut this down.
Police tweeted that the websites coverage of the fund was
confusing and wanted to take a statement from Mr. Jahabar.
He hasnt been charged with a crime. The police couldnt be
reached for comment.
Mr. Najib, in a blog post Friday, blamed online media for
constructing their own version of reality with click bait
headlines that serve their own agendas. He added: This is
an unhealthy practice of journalism.
Meanwhile, the ruling United Malays National Organization,
or UMNO, suspended UMNO official Muhyiddin Yassin, citing
his failure to support the party president, Mr. Najib. The
prime minister had previously fired Mr. Muhyiddin from his
role as deputy prime minister and four other ministers. Some
had criticized the fund.
Mr. Muhyiddin couldnt be reached for comment on Friday,
but in the past has defended his demands for more
investigations into the fund, 1Malaysia Development Bhd., or
1MDB.
Another UMNO party member last year lost his leadership
post in the party after filing a police report against 1MDB for
alleged financial mismanagement.
The scandal revolves around payments of almost $700
million into Mr. Najibs personal bank accounts via banks,
companies and entities linked to 1MDB ahead of a 2013
election that Mr. Najibs ruling party narrowly won.
The events have transfixed Malaysia since the deposits were
first reported last summer by The Wall Street Journal, citing
a Malaysian government investigation. The probe didnt
name the source of the funds or say what happened to the
money.
Last month, Malaysias attorney general, Mohamed Apandi
Ali, cleared Mr. Najib of wrongdoing, saying the biggest
chunk of the deposits into his accounts were a legal donation
from Saudi Arabias royal family. Mr. Apandi didnt name the
donor or provide documents and said most of the money was
returned later. A Saudi official said the countrys finance and
foreign ministers had no knowledge of a donation.
Mr. Najib will travel to Saudi Arabia on a three-day official
visit next week to attend an economic forum, the Foreign
Ministry said.
Mr. Apandi ordered domestic probes of the matter to cease,

and Mr. Najib urged the country to put the scandal behind it.
Malaysias anticorruption agency contested Mr. Apandis
decision to close the case with an oversight panel. The panel
this week advised the agency to continue its probe into the
matter.
Efforts to reach Mr. Najib were unsuccessful. He has denied
wrongdoing or taking money for personal gain. The 1MDB
fund also has denied wrongdoing and said it is cooperating
with the probes.
A series of Malaysian bodies, including the police, auditor
general, antigraft agency and the central bank, are all
investigating the matter. So are other jurisdictions where
1MDB money also allegedly flowed, including the U.S., Abu
Dhabi, Singapore, Switzerland and Hong Kong. The Swiss
attorney general last month said a total of $4 billion had
been misappropriated from 1MDB through complex financial
structures.
Mr. Najibs government has aggressively pushed back against
accusations of wrongdoing. Officials this month produced
and distributed on university campuses a 79-page booklet
titled 1MDB: Who Says There Are No Answers? It says the
fund is selling assets to pare over $11 billion in debt and
denies it lost money.
Authorities also banned the use of the logo Bersih
meaning clean in Malaywhich anti-Najib protesters
emblazoned on yellow T-shirts and posters at their rallies.
But the governments continuing crackdown against the
media is adding to a sense in Malaysia that the government is
ramping up efforts to contain the scandal, some Malaysians
say.
When you act against the media it seems like you have
something to hide. Its bad for the countrys image, said
Sheila Krishna, a taxi driver in Kuala Lumpur, the Southeast
Asian nations capital.
Many of Malaysias leading newspapers are state-owned and
largely have ignored the 1MDB issue. But the more-vibrant
online news portals such as the Malaysian Insider have run
almost daily stories on the fund.
Last summer, faced with mass street protests over 1MDB, the
government temporarily suspended the print publishing
license of the Edge Media Group, which owns the Malaysian
Insider. It has since restarted publication.
Some of Mr. Najibs cabinet ministers have also lashed out at
The Wall Street Journal, saying the newspaper is allied with
Mr. Najibs rivals, which include opposition parties and some
senior UMNO members.
Where is the proof for any of this? How do we know that
any of these people exist? How do we know that the report is
genuine and not fake? Malaysias communications minister,
Salleh Said Keruak, said in reference to an earlier Journal
article this week. Nothing happens by chance at a paper
like the WSJ.
A spokeswoman for Dow Jones, which owns the Journal,
said, We continue to stand behind our fair and accurate
reporting of this evolving story.
Yet, some question why the prime minister isnt taking legal
action over stories, including those in the Journal, if he
claims they are wrong.
Najib is not going to sue WSJ because reports in the
publication [are] correct and he is in the wrong, Mahathir
Mohamad, who was Malaysias longest serving prime minister
before stepping down in 2003, said this week.
Added Phil Robertson, deputy Asia director of Human Rights
Watch: Apparently, Najib is willing to sacrifice Malaysias
prior respect for freedom of online expression if it means he
can successfully stifle critical reporting about his
governments policies.

---
The big Aussie short won't be in Sydney

Taken from the AFR Saturday, 27 February 2016
There will be a housing oversupply in all major capital cities

except Sydney by mid-2017, but house prices will only fall
modestly, writes Robert Mellor.
Since 2002, when The Economist magazine started calling
Australian
residential
property
prices
substantially
overvalued, we have seen many overseas commentators,
including some recent visitors to Australia, predict
corrections of 20 per cent to 50 per cent to median prices.
Often their analysis is based on examining the ratio between
median house prices and incomes at a capital city or
national level, and comparing them to historical figures and
other OECD countries. This is a flawed analysis of housing
affordability. By comparing historical data, it is not taking
account of the substantial impact on housing affordability
from the decline in housing interest rates since the mid1990s.
When comparing our house price-to-income ratio, overseas
analysts should use household income data rather than
individual income. They point to our figures being way out of
line with many other countries, in particular the United
States. I believe this analysis is not a reason to predict a
major correction in house prices in Australia, nor even in our
highest-priced cities, Sydney and Melbourne.
Australians are free to choose to spend a higher proportion
of their income on housing but less than the US on health
and defence. That is a choice we make as a society and, by
the way, we were doing so back in the 1970s and 1980s.
I am not saying there won't be price corrections in
residential property markets around Australia over the next
two to five years. But, with the exception of mining towns,
the declines are likely to be limited to between 5 per cent
to 10 per cent in nominal terms in certain capital cities.
In particular, in market segments such as high-density
apartments in the Melbourne and Brisbane CBDs, nominal
price declines could go as high as 10 per cent to 20 per cent,
because we are going to see a massive oversupply develop in
these markets over the next one to two years.
CONTRARY VIEW
While some continue to talk about the undersupply of
dwellings across Australia, BIS Shrapnel has been highlighting
for the past year that the majority of capital city markets,
with the exception of Sydney, will be going into oversupply
by mid-2017.
It needs to be understood that since 2010, house-price
growth in Brisbane, Adelaide, Perth, Hobart and Darwin has
been below the inflation rate and given these cities are
already oversupplied, or will be by 2017, we think modest
nominal declines are possible and falling real prices are
certain over the next three years.
In Sydney, despite a record 45,000 dwelling commencements
in calendar 2015, it needs to be remembered that between
2006 and 2014, there was a massive underbuild and it was
this undersupply that has driven price growth of over 55 per
cent in median house prices in Sydney since September
2012.
Rental vacancy rates remain at 2 per cent and there is an
extremely low risk that any oversupply will develop in the
Sydney market before 2020, unless high-density apartment
commencements are sustained at current record levels.
Given the drop in investor demand over the past six months,
we forecast an easing in off-the-plan apartment sales over
2016-17 and 2017-18. In this scenario BIS Shrapnel's forecast
is for median apartment prices to decline by a modest 5 per
cent to 7 per cent by late 2018 and even less for detached
houses.
In summary, we are forecasting modest price corrections in
residential property markets across the major capital cities
rather than dramatic declines of 20 per cent to 30 per cent.
(Full article click - AFR)
---
No 'Big Short' as auction results round out

strong February
Taken from the AFR Sunday, 28 February 2016
This weekend's capital city auction results show no evidence

that buyers had concerns about a looming house price crash
- as predicted by contrarian research house Variant
Perception in its 'Big Short'-themed report.
Both CoreLogic RP Data and Fairfax-owned APM reporting
national preliminary clearance rates above 70 per cent from
a busy weekend of more than 2000 auctions.
In Sydney, the preliminary auction clearance rate fell slightly
from 76.5 per cent last weekend to 73.3 per cent, based on
673 out of 872 auctions, while in Melbourne the clearance
rate rose from 74.1 to 75 per cent based on 1162 out of 1327
auctions, according to CoreLogic RP Data.
The auction clearance rate also rose in Brisbane (58.3 per
cent), Adelaide, (72.7 per cent), and Canberra (69.6 per
cent). Nationally the clearance rate strengthened from 71.8
to 72.4 per cent based on 2113 reported results.
The solid results come just days before Tuesday's Reserve
Bank monetary policy meeting, where it is expected to keep
the cash rate on hold at a record low 2 per cent.
"This week marks the fourth consecutive week of the
combined capital city clearance rate being above the 70 per
cent mark, with the stronger than expected auctions results
continuing through the final week of February," said
CoreLogic RP Data in its Weekend Market Summary.
"Capital city auction results haven't recorded a four week
period where the clearance rates was consistently higher
than 70 per cent since early September last year."
CoreLogic RP Data and Moody's Analytics said on Friday in a
new report they expect 2.2 per cent growth in Sydney house
prices this year and 7.2 per cent growth in Melbourne.
Commenting on the weekend's auction results, CoreLogic RP
Data said: "The robust rate of auction clearance, together
with the CoreLogic Home Value Indices continuing to show a
moderate rate of growth through February suggest housing
markets are continuing to demonstrate a controlled
slowdown rather than any signs of a sharp correction," the
housing market data group said.
This was in stark contrast to the Variant Perception report
titled 'I know a guy who can get things done' by US economist
Jonathan Tepper, which forecast a 50 per cent fall in house
prices in Sydney and Melbourne and warned that "Australia
now has one of the biggest housing bubbles in history".
The report has for the most part been savaged by Australian
housing experts and economists, including the Australian
Financial Review's Chris Joye, though one fund manager,
Melbourne-based APT Capital Management, which is shorting
banks, listed real estate agents and mortgage insurers,
agreed with the report and said the market would crash in
2016. LF Economics' Lindsay David and Phillip Soos forecast a
crash before the end of 2017.
At both Sydney and Melbourne's top end housing markets
there was strong evidence of buyer appetite with a
waterfront Hunter's Hill sandstone mansion on a 1900 square
metre block selling for $6.51 million, more than $1 million
above the buyer's guide of $5.5 million. It sold through
Nicholas McEvoy and Narelle Scott of BresicWhitney.
In North Turramurra on Sydney's upper north shore, a threebedroom knock-down on a large 975 sq m block had a
reserve of $1.1 million and sold for $1.55 million with 30

registered bidders.
"A few years ago the area would never have hit a million
dollars but over the years this has changed dramatically
which is evident in today's result, said selling agents Charles
Caravousanos and Belinda Shearer of Savills Cordeau
Marshall.
In Melbourne, a four-bedroom Toorak home off a quiet cul de
sac sold for just under $5.8 million through David Colbran
and Greg Herman of Sotheby's International Realty. The price
guide was $5 million plus.
(Full article click - AFR)
---
China will bounce back and continue to drive

global growth for decades
Economists have often said, when America sneezes, the

world catches a cold reflecting the importance of the US to
the global economy. But the past 12 months suggest the
worlds immune system is more sensitive to Chinas sniffles
than was previously thought.
The countrys economic slowdown and the overdue lancing
of the bubble in its stock market have made the worlds
central bankers and policymakers realise that China now has
a huge influence on global markets.
I was in Beijing and Shanghai last week in part to attend the
G20 summit in my role as a board member of the Institute of
International Finance but also to see for myself what is
happening in China. There is no substitute for visiting a
country if you really want to understand what is going on
there. Get there, meet companies and policymakers and
listen to what the people you meet have to say.
This is especially the case with somewhere like China
because it can be opaque and a lot of what is written about
the country is nonsense. You can only get so much
information to form a view from sitting in an office 6,000
miles away.
One of my most interesting meetings was with Dr Pan
Gongsheng, deputy governor of Chinas central bank. It is
true that the economy is slowing. Never mind the validity of
the official figures, the 6.9pc growth achieved last year is a
far cry from the double-digit expansion achieved a few years
ago.
But is this slowdown really so bad? The change in the pace of
growth is as much by design as by accident. Chinas
policymakers made a deliberate decision a few years ago, to
move the economy away from an investment-led, exportdriven model towards one in which domestic consumption
plays the dominant role. The countrys leaders want growth
that is sustainable.
For a long time investors have focused on Chinas
manufacturing data as an indicator to how well or badly the
economy is doing. Recent weakness in the manufacturing
data has been interpreted as a big negative and has ignored
the growth of service industries, especially in the private
sector.
Real estate, finance, hospitality, retail, transport,
construction and other services accounted for some 55pc of
GDP in 2014, up from 47pc in 2006, according to data
compiled by CLSA and Citic Securities.
As the economy continues to move to a more domestic
focus, this share will continue to rise. This is not to say
everything is rosy in China. In recent years, western leaders
watched with wide-eyed wonder at their Chinese
counterparts handling of the economy. They looked on in
envy at Beijings ability to manage the economy at a time
when the world seemed to be closing in.
That reputation has taken a major dent recently. They

successfully deflated a bubble in the property market but
that meant that Chinas army of retail investors piled into
the domestic stock markets. The authorities should not have
tried to prop this over-leveraged and speculative bubble.
They should have let it pop but chose to intervene and then
did so in a messy, unclear and unsuccessful way.
While they were bungling the rescue of the stock market,
the authorities made a mess of communicating a loosening in
renminbi policy, which fuelled suspicions the country was
seeking to devalue its way out of trouble. This is prompting
wealthy locals to move their cash offshore and in response
the government is making it harder for money to be moved
overseas.
Local government and corporate debt are big problems, the
state sector is bloated and inefficient, while the property
market remains fragile. Whilst my trip provided comfort on
the state of the economy, my views on the stock market
remain unchanged. We have always been very cautious about
investing in Chinese companies because so many are opaque
and many have woeful corporate governance.
Its obvious if you spend time in China to see that the
Shanghai and Shenzhen stock markets operate like casinos.
Trading activity is dominated by retail investors who buy on
rumours and flee at the first sign of trouble. Its much more
sensible to expose yourself to Chinas growth by investing in
companies which arent based there but do business there.
Its a much easier way of investing in companies with decent
growth prospects, that have quality management and adhere
to good levels of transparency and accounting standards.
From speaking to companies, economists and analysts in
China, its clear to me that the country is heading for a
softer, rather than harder, landing. You need to look beyond
the stock market for the clues of why, though. Chinas
consumer spending is still motoring. Consumers have taken
to internet shopping at a startling pace.
Barely 15pc of the population had shopped on the internet a
few years ago. Now over 40pc have. Chinese shoppers spent
nearly $8bn (5.7bn) in the first 10 hours of the countrys
equivalent of Cyber Monday or Black Friday. Chinese
authorities might have lost some of their reputation for
financial competency, but they have $3.4trillion in foreign
exchange reserves to soften the blow of a slowing economy.
Unlike many policymakers in the West, those in Beijing still
have plenty of tools at their disposal to avert economic
disaster and to help the country to develop. The
announcement last week of the opening up of the bond
market to long-term international investors is a prime
example and is a step in the right direction.
Ultimately China will shake off its current sniffles to
continue to be a driver of global growth for decades to
come.
---
Liu Xiaoming, Chinese ambassador to the UK:

The Chinese economy is still full of power
A glass is filled halfway with water. Pessimists would say its

half empty, while optimists would say its half full. The same
is true when it comes to the Chinese economy. Quite a few
pessimists have been forecasting doom and gloom since the
beginning of the year. However, they have failed to see the
countrys resilience and the new driving forces that have
emerged.
In fact, the recent moderation in Chinas growth is the
anticipated result of reform measures and regulation. This is
therefore the new normal: we are seeing slower yet
better quality growth helped along by proactive and deeper
reforms. Of course, Chinas growth rate could easily have
exceeded 7 per cent if the energy- and- pollution-intensive
industries had been given free rein, or if massive stimulus
measures had been applied.
China, however, chose not to opt for this kind of
unsustainable growth because it would come with a huge
cost and would sacrifice the long-term development of China
and the world.
Instead, China has chosen to focus on the following five key
areas: addressing excess capacity, downsizing property
inventories, expanding effective supply, helping enterprises
reduce cost and guarding against financial risks. This
approach, like losing weight, wont be without its
discomforts or pain. But just as perseverance will see one
through a diet to less fat, stronger muscles and a healthier
body so it is with the Chinese economy.
Despite the moderation in growth, the fundamentals of the
Chinese economy remain strong. While the stock and foreign
exchange markets have their own patterns, the key is to look
at the bigger picture. It is true that the 6.9 per cent growth
in 2015 was the lowest for China in 25 years. But this was
achieved by an economy that is 10 trillion dollars in size.
The actual increment is equivalent to the yearly GDP of a
medium-sized country and it is larger than the amount
generated by double-digit growth years ago.
In other words, against the background of the sluggish world
economy, China remains one of the fastest-growing major
economies and it contributes over one quarter of global
growth. Consumption now accounts for two thirds of Chinas
growth and the service sector now makes up more than half
of GDP.
Chinas solid material foundation, abundant human resources
and vast market potential will continue to provide a sound
basis and condition for sustained economic growth. The gap
between the eastern and western regions, and between the
urban and rural areas, indicates ample spaces and untapped
potentials for further development. Moreover, the ongoing
process of new industrialisation, IT application, urbanisation
and agricultural modernisation is generating strong driving
forces for growth. Chinas fiscal deficit and government debt
is also secure and much lower than that of the US, Europe
and Japan, leaving enough room for further positive
regulation.
Going forward, five new engines will drive forward Chinas
economy. The first engine is the 13th Five Year Plan. With its
five key development concepts innovation, balanced
growth, a green economy, opening up and inclusive
development this Plan will map out the way for China to
get over the middle-income trap and join the high-income
economies.
The second engine is supply-side reform. Rather than being a
copy of Reaganomics or Thatcherism, Chinas supply-side
reform is a response to the economic new normal in
China. Its core mechanism is to replace ineffective and low-
end supply with effective and high-end supply, which will

increase competitiveness.
The third engine is open development. China will continue to
improve its domestic business environment in terms of legal,
international and business-friendly practices.
The fourth engine is Chinas active involvement in global
economic governance and in providing public goods. The
Asian Infrastructure Investment Bank, officially inaugurated
last month, is just one example of this.
The fifth engine is innovation-driven development. China
will optimise the allocation of key resources in order to
stimulate innovation, to create new demands and new
supply, and to give rise to new businesses.
Since the financial crisis, China has made an outstanding
contribution to global growth. It is widely recognised as the
worlds economic powerhouse and has fulfilled its
responsibility as a key global player. Make no mistake: that
engine is still full of power and will continue to bring
opportunities and benefits to the world.
Although Zhou was an ancient state, it had a reform
mission. This line from a 3000-year-old Chinese work, the
Classic of Poetry, best portrays the countrys commitment to
reform. Today, reform and innovation remain the source of
confidence and strength for China. There is every reason to
look to a world-embracing China for steady progress and for
a promising economic future.

News Summary

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News Summary

G20 meeting in Shanghai ended on Saturday without strong

On Brexit, British PM David Cameron wrote on Sunday

News from Shanghai

Finance ministers say all tools are needed to sustain growth,

those promised reforms and growth is more than a half

Taken from the Nikkei Sunday, 28 February 2016

Finance ministers and central bankers from 20 industrial and

when it comes to their current intentions and future

Barclays new chief executive is planning to announce on

appointment of a relatively unknown MP as finance minister,

UK faces fresh spending cuts in Budget

Britain is facing a new round of spending cuts in next

Slower growth also means Mr Osbornes chances of meeting

Belgian Leader Says U.K. Wont Get Second

Prime Minister Charles Michel says some British proponents

hinted that he favors this approach. All EU history shows

David Cameron: Brexit would be 'gamble of the

In an article for the Telegraph, Prime Minister David

If you vote to remain in Europe, I can clearly describe what

Fourth, theres a bigger question about our role in the world:

Two thirds of companies want Britain to stay in

An overwhelming majority of some of the biggest companies

Last weekend the Prime Minister, David Cameron, announced

Worst 'yet to be felt' for pound after largest

The pound is heading for a further decline that could see it

believes that sterling could suffer a sharp fall of 5pc to 10pc

World economy stands on the cusp of another

Former Bank of England Governor Lord Mervyn King has

Brexit would spark decade of economic limbo,

The UK would face a decade of massive economic

A document published on 28 Februaryby the Britain Stronger

Irish voters have delivered a snub to the outgoing centre-left

of the Provisional IRA is likely to also see a rise in its seat

Irish election: Enda Kenny plans to form

Rival party Fianna Fil celebrates comeback but dismisses

Joan Burton, managed to hold her seat in Dublin West,

Shocks from abroad may lead the Federal Reserve to lift

Bank of America prepares to make investment

Traders at Bank of America are in for an unsettling few

Brazils Petrobras Signs $10 Billion China Loan

Details of deal still under discussion, though financially

Ruling party suspends senior official and probes website that

Mr. Apandi ordered domestic probes of the matter to cease,

(Full article click - WSJ)

The big Aussie short won't be in Sydney

There will be a housing oversupply in all major capital cities

No 'Big Short' as auction results round out

This weekend's capital city auction results show no evidence

reserve of $1.1 million and sold for $1.55 million with 30

China will bounce back and continue to drive

Economists have often said, when America sneezes, the

That reputation has taken a major dent recently. They

Liu Xiaoming, Chinese ambassador to the UK:

A glass is filled halfway with water. Pessimists would say its

end supply with effective and high-end supply, which will

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