News Summary

News Summary
It has been rather quiet weekend, with two topics

dominating the media. First Chinese authorities have
removed the head of Chinas securities regulator following a
dramatic year of stock market turmoil and a failed
government rescue effort. According to Xinhua News Agency,
Liu Shiyu, who is the chairman of Agricultural Bank of China
and a former central banker, will replace Xiao Gang. The
other big news is the Brexit vote. British PM David Cameron
announced on Saturday that a referendum on Britains
membership of the EU will be held on June 23.
Rather interesting report seen in Xinhua News on the
dismissal of Xiao Gang. FT wrote Xiao did not resign but that
the Communist partys Central Committee and the State
Council, Chinas cabinet, dismissed Xiao. Critics also
blamed Xiao for failing to identify the bubble, which was
driven largely by retail investors, as it was inflating. Margin
finance exploded in the early months of last year. Official
margin loans hit Rmb2.3tn in late June, up from about
Rmb400bn a year earlier. Lightly regulated, grey-market
margin lending may have added Rmb1tn more (page 12).
WSJ said this move comes amid what appeared to be a
public campaign by Beijing in recent weeks to counter global
pessimism about Chinas growth prospects and economic
stewardship. The newspaper revealed that at a meeting last
summer attended by President Xi Jinping and other senior
officials, Xiaos face went pale when President Xi expressed
dissatisfaction with how Chinese regulators handled the
market-rescue effort (page 12).
A Xinhua report said with ample development room, solid
growth foundations and abundant policy tools, China is
believed to be able to continue to deliver above 6.5% GDP
expansion in the next five years. China's urbanization rate in
terms of registered urbanites is lower than 40%, compared
with an average of 70% in developed countries and 60% in
developing countries with similar per capita income. China's
consumers are feeling confident and upbeat despite the
economic slowdown; China's interest rates are at relatively
high levels compared with near-zero rates in many
developed countries; government could also continue to
loosen its grip on the market and open up more sectors to
private investors (page 13).
British PM David Cameron said a deal struck with EU leaders
will give the UK "special status" and he will campaign with
his "heart and soul" to stay in the union. Cameron met his
cabinet on Saturday and announced changes to the treaty
(see page 2) and EU referendum vote on June 23. The
decision by Michael Gove, the justice secretary, to advocate
Brexit, will give intellectual edge to an Out campaign that
lacks leadership and is still struggling to define what
Britains future would look like outside the bloc. Sunday
Telegraph said UK Cabinet split apart just minutes after
Cameron called a historic in-out referendum on membership
of the European Union as six of his senior ministers
demanded that Britain sever its links with Brussels. It
highlighted names like John Whittingdale, Priti Patel,
Theresa Villiers, Chris Grayling and Iain Duncan Smith all
backing Brexit. Writing in todays Sunday Telegraph, Ms
Villiers, the Northern Ireland Secretary, said it is time to
take back control and that as long as Britain is beholden to
European courts we cannot say we run our own country
(page 4).
While most articles were negative, one report in the Sunday

Telegraph praised Cameron for taking on the EU-28 and won.
The PM has pushed for a guarantee that Britains financial
services sector - arguably the single biggest driver of
economic prosperity in the UK over the last 20 years remains untouched by Brussels' attempts to "complete
economic and monetary union. The paper said these banks
will be out to rally for Remain In Camp (see page 6).
The Australian said after Cameron announced the
referendum, the market focuses attention on Mayor of
London, Boris Johnson. Bookmakers say if Johnson joins the
Leave campaign which sorely needs a charismatic leader
the odds on the country remaining in the EU would shorten
dramatically. Current odds are 2/7 for Britain to remain in
the EU, and 5/2 to leave (page 7).
Our strategist Bipan Rai published his view and said
uncertainty aspect is where the problem lies for investors
in British assets. The more discordant the debates are, the
more likely that British assets will be impacted negatively.
The reason for this is that Britain is one of the largest net
debtors among developed nations in the world as negative
investment income has driven its wide current account
deficit. Put simply, foreigners have earned more from UK
assets than what UK investors have earned from foreign
assets. Years of accumulated deficits have swelled onto its
balance sheet with gross external liabilities still over 500% of
GDP. Comparatively, the gross external liabilities of the
United States and Canada are both less than 200% of GDP.
The size of the UKs balance sheet only highlights how
vulnerable it is to any event that sparks outflows.
Meanwhile, Europes new banking watchdog ordered the
biggest Eurozone banks to boost their capital levels by 0.5
percentage point on average after a yearlong assessment of
their risks (page 8).
Very bullish report from Barrons Online published late
Saturday that economic growth in the US could be the best
in years. Barrons expects economic growth to run at an
annual rate of 2.8% through the first half of this year then
accelerate to 3.2% by the second half. Employment gains
and the tight labor market are already driving up wages and
salaries. That is boosting consumer spending, which is
encouraging capital investment, which is causing businesses
to hire, which, in turn, is driving employment gains (page 9).
Japanese Prime Minister Shinzo Abe said hes not considering
a snap general election this summer to coincide with a
scheduled upper house poll, and that he has no intention of
delaying a planned increase in the nations consumption tax.
Speaking to Nippon Hoso radio, Abe said he would raise the
levy to 10% in April 2017 unless there was a big economic
shock. Abe backed the Bank of Japans new negative interest
rate policy, saying it was not the cause of the current market
turmoil. He also said that individuals deposit rates wouldnt
turn negative (page 14).
Finally, BHP Billiton is to publish its half-year results on
Tuesday, it is expected to reduce the $6.6bn pay-out
among the largest in the FTSE 100 by about 50%. BHP also
faces billions of dollars in damages after a dam holding
waste from its Samarco mine burst last year. The company
may also be forced to write down the value of its some of its
operations, including its shale gas and oil fields in America
(page 14).
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.
UK News
EU deal gives UK special status, says PM
Taken from the BBC Saturday, 20 February 2016
David Cameron says a deal struck with EU leaders will give

the UK "special status" and he will campaign with his "heart
and soul" to stay in the union.
The PM said the agreement, reached late on Friday after two
days of talks in Brussels, would include a seven-year
"emergency brake" on welfare payments.
He added it also included changes to EU treaties and would
be presented to his cabinet at 10:00 GMT.
EU exit campaigners said the "hollow" deal offered only "very
minor changes".
The agreement on renegotiating the UK's EU membership
was announced by European Council president Donald Tusk,
who tweeted: "Deal. Unanimous support for new settlement
for #UKinEU."
It paves the way for the UK to hold an in/out referendum on
EU membership, which has been promised by the end of
2017 but is expected in June this year.
The new deal includes:
Cuts in child benefit for the children of EU migrants

living overseas - applicable immediately for new
arrivals and from 2020 for the 34,000 existing
claimants
The amending of EU treaties to state explicitly that

references to the requirement to seek ever-closer
union "do not apply to the United Kingdom",
meaning Britain "can never be forced into political
integration"
A seven-year "emergency brake" on migrants' inwork benefits in cases of "exceptional" levels of

migration - recognised by the European Commission
as happening in the UK now. Brake must be released
after seven years, without exception.
The ability for the UK to enact "an emergency

safeguard" to protect the City of London, to stop UK
firms being forced to relocate into Europe and to
ensure
British
businesses
do
not
face
"discrimination" for being outside the Eurozone
German Chancellor Angela Merkel predicted the package of
reforms would "elicit support in the UK for the country to
remain in the EU".
'In Britons' hands'
Mr Tusk said it "strengthens Britain's special status", while EU
Commission president Jean-Claude Juncker described it as
"fair".
Mr Tusk added: "We didn't walk away from the negotiating
table. We were willing to sacrifice part of our interests for
the common good, to show our unity.
"I deeply believe the UK needs Europe and Europe needs the
UK. But the final decision is in the hands of the British
people."
Once Mr Cameron has briefed his ministers at Saturday's
cabinet meeting, they will be free to campaign for either
side in the referendum.
Mr Cameron said he would shortly announce the date of the
vote and said he was "disappointed" but not surprised that
one of his key allies, Justice Secretary Michael Gove, was to
campaign for the UK to leave the EU.
(Full article click - BBC)
---
The Reckoning: Five points on which to judge

the deal
Taken from the FT Saturday, 20 February 2016
David Camerons new settlement with the EU was seven

months in the making, but some of its most important
elements were left to a Brussels summit finale. Hammered
out through 30 hours of, at times, gruelling talks, the prime
ministers closing settlement can be judged on five main
points.
Sovereignty and ever-closer union
Result: Britain wanted clear language exempting it from the
EUs treaty mantra of ever closer union. The language
makes clear that Britain enjoys a specific situation in the
union, which means it is not committed to future political
integration. When the treaty is next changed, it will be
made clear that ever-closer union does not apply to the
UK.
Verdict: This was always a big symbolic demand for Mr
Camerons Conservative party, with limited legal value. The
language may not be poetic, but it is clearer than earlier
versions. In a nod to critics, including Belgium and Italy, the
language in the deal is narrowed to primarily pertain to the
UK, rather than the whole EU. This will not concern Mr
Cameron too much.
Safeguards for the City of London
Result: Britain sought guidelines to better manage relations
between the UK and a more integrated eurozone. Most of
these principles including non-discrimination and betterdefined patches for financial authorities were not watered
down in the final agreement, in spite of a fierce two-week
battle with France over wording. Mr Cameron also secured a
form of emergency brake, which is supposed to enforce
these principles. It allows Britain on its own to escalate
an issue for discussion by EU leaders.
Verdict: This is the most consequential part of the
agreement, but also the hardest to interpret. Mr Cameron
gave few concessions to France in the final drafting battle.
But none of the terms override the EUs voting rules, or
preclude the possibility of the EU expanding its oversight of
the City (just the thing the UK wants stop). The emergency
brake is a political threat, rather than a legal shield.
Treaty change
Result: Mr Cameron initially wanted full-on treaty change
to put his reforms in primary law. Faced with resistance,
British officials changed tack and sought a binding promise
that UK-specific reforms would be incorporated into the
treaties when they were next changed. On the night, Mr
Cameron emerged with pledges that areas defining the UKs
sovereign position in the union and the safeguards for noneurozone countries would eventually be enshrined in the
treaties; no promises were made on benefit reform.
Verdict: This is a qualified victory for Mr Cameron. France
was one of a handful of countries objecting to such a treaty
promise. Others, like Portugal and Belgium, were concerned
that it would trigger complex ratification procedures that
would hold up the UK deal. Mr Camerons main concession
was on benefits: the reforms are legally right at the margins
of what is possible under EU law. A promise of treaty change
would have provided an extra guarantee.
Benefits emergency brake
Result: The benefits emergency brake was a work-around to
help Mr Cameron deliver his most contentious pledge. He
promised a four-year ban on in-work benefits for new
migrants, but it was impossible legally and politically. The
brake model was a more acceptable alternative because it is
temporary, and justified as an exceptional measure. Mr
Cameron wanted the regime in place for up to 13 years;
eastern European countries insisted on five years. The
compromise was a seven-year period neatly matching the

seven-year period of transitional migration curbs that Britain
did not apply during the EUs big eastern enlargement in
2004.
Verdict: This fix falls short of Mr Camerons commitments in
the Tory manifesto. Few economists believe it will reduce
migration. Mr Cameron wanted a significantly longer period
for the emergency brake. However, the complex model
adopted does allow him to trumpet a policy that many said
was impossible: a restriction on in-work benefits on
individual migrants for four years. The final hurdle is the
European parliament, which must pass the legislation after
the referendum. The political leaders of the parliament
made no joint statement explicitly backing the reform
something Mr Cameron had sought.
Child benefit
Result: Exports of child benefit were Mr Camerons first
target in his clampdown on migrant access to the welfare
system. This proved more contentious than expected.
Eastern Europe wanted to stop lots of countries applying
such curbs:almost 100,000 children in Poland receive child
benefit from parents working overseas around Europe. The
final deal paves the way for legislation allowing countries to
index payments of overseas child-benefit according to the
cost of living or benefit rates of the country where the child
resides. To secure support, Mr Cameron also agreed to a
transition period, meaning existing claimants of child benefit
would not lose out until 2020.
Verdict: This is the area where Mr Cameron conceded most.
The payments are reduced rather than stopped. And existing
claims will continue for almost four years. If falls well short
of Mr Camerons referendum promise. This area is
symbolically important, but in fiscal terms small beer. Even
if Mr Cameron had totally stopped exports of child benefit, it
would have saved just 30m.
(Full article click - FT)
---
EU vote called today
Taken from the Times Saturday, 20 February 2016
David Cameron will call a referendum on Britains

membership of the EU today but will be opposed by Michael
Gove, one of his closest friends and allies.
The prime minister will call the poll, almost certainly for
June 23, after a cabinet meeting at 10am that will split the
Conservative partys top team.
Mr Cameron effectively launched the campaign to remain in
the bloc at the end of a gruelling two-day Brussels summit at
which he said he had secured a special status for the UK.
He was forced to give further ground on a manifesto pledge
to deny child benefits to EU migrants whose offspring did not
live in Britain to break a deadlock with eastern European
countries. In return he won backing for a seven-year
restriction on in-work benefits, which he claims will reduce
migration from the EU to Britain.
Mr Cameron was also able to point to an exemption for
Britain from ever-closer union as well as treaty change
safeguarding non-euro countries from further integration.
He described the decision of Mr Gove, the justice secretary,
to back Brexit as disappointing but not surprising. All eyes
are now on Boris Johnson, the London mayor. Some in the
prime ministers circle expect Mr Johnson to follow Mr Gove
towards Brexit.
After the deal was announced Mr Cameron said: I have
delivered on the commitments that I made at the beginning
of this process. Britain is permanently out of the ever-closer
union. We have tough, new restrictions on the access to the
UK welfare system for EU migrants. We will never join the
euro. We have secured vital protections for the economy. It
enables me to recommend that the UK remain in the EU with

the best of both worlds. Donald Tusk, president of the
European Council, said that there was unanimous support for
the deal between Britain and the EU.
With the agreement expected to be finalised overnight, Mr
Cameron is set to hold the first cabinet meeting on a
Saturday since April 3, 1982, after Argentina invaded the
Falkland Islands.
In Brussels, Mr Cameron was caught in a diplomatic pincer
movement as France, the leading opponent to safeguards for
the City of London, joined eastern and central European
countries, led by Poland, in resisting cuts to migrant
benefits. Diplomats from that bloc called Mr Cameron
arrogant.
The prime minister had hoped to finish the talks by
yesterday morning, but the mood darkened as a British
breakfast to sign off the deal became first a lunch and
finally a dinner.
Alexis Tsipras, the Greek prime minister, had sent the
process into further disarray during the afternoon by warning
that, unless other countries promised not to close their
borders to refugees crossing his nation, he would refuse to
sign up to the agreement.
President Hollande undermined Mr Cameron by dismissing an
impassioned plea that he faced political suicide unless his
demands were met. I am not going to let Great Britain into
a situation in which it could satisfy its public opinion, which
is itself divided, at the risk of not allowing Europe to go
forward, he told France Inter radio. Mr Hollande had sided
with eastern European countries opposed to British demands
for restrictions on welfare benefits paid to EU migrant
workers in Britain. Poland led the resistance, demanding
that Mr Cameron be allowed to curb in-work benefits for a
maximum of seven years, not 13 as he wanted. The countries
also demanded that migrants receiving child benefit for
offspring in their home countries continued to get the
payments at British rates. In the end a compromise was
reached under which existing claimants would, like new
arrivals, receive payments at local rates from 2020.
Tomas Prouza, the Czech Europe affairs minister, tweeted
just before the dinner showdown that the Visegrad group of
four eastern European countries were in a war room
preparing their latest response to Mr Cameron.
French diplomats have suggested that Mr Cameron made a
serious error of judgment by presenting a draft agreement,
tabled by EU negotiators on February 2, as a more-or-less
done deal. He presented the draft text as a deal after it
was published but it was an institutional offer from Brussels,
not a text agreed by 28 governments, a French diplomat
said. We cannot be blamed for this problem.
Charles Michel, the Belgian prime minister, urged Mr
Cameron to set aside his red lines to find a compromise. Its
quite clear. There is no second chance. Its now or never, he
said.
Eurosceptics condemned Mr Camerons negotiations as a
feeble, worthless and irrelevant piece of pantomime as
they held a rally to kick-start the campaign for Brexit. David
Davis, the former Europe minister, said that the summit had
revealed the undemocratic, institutional arrogance of
Brussels. It shows the utter disregard Brussels has for
member states, he said.
(Full article click - Times)
---
Let the big arguments over Britain in Europe

begin
Taken from the FT Sunday, 21 February 2016
This is about nothing less than the prosperity and security of

Britain and its place in the world
Three years after David Cameron promised the British people
a referendum on their membership of the EU, the country is
finally, mercifully, at the start of the full-blown campaign.
Until now, the dominant question in the Brexit debate has
been whether the prime minister could reconfigure Britains
membership of the bloc so that he could be better placed to
argue for the UK to remain.
After much frustration, Mr Cameron has returned from
Brussels brandishing a new settlement that gives Britain a
special status in the EU. But this pact was always going to
be of marginal importance when set against the central
choices on the economy and security that voters must make
when they vote this summer.
When the UK and EU reached a draft settlement earlier this
month, the Financial Times judged it reasonable, given what
Mr Cameron was seeking to achieve. The danger for the
prime minister was that other EU leaders would water down
the draft, especially on politically sensitive issues such as
migrant benefits and Britains relations with the eurozone.
In the event, the original pact remains intact and, in places,
is even improved. Britain is exempted from ever closer
union, a statement of limited legal value but of symbolic
importance. The UK can, on its own, cry foul at future EU
summits if it believes the City of London is being
discriminated against by the eurozone.
Of most political significance, Mr Cameron has defended
Britains right to restrict in-work benefits for EU migrants for
four years. This falls short of a commitment made in the
Conservative manifesto and is unlikely to affect migrant
flows into the UK something the prime minister has
pledged to tackle. Still, it is a concession that many thought
the EU would never give him.
Mr Cameron raised such high expectations for his
renegotiation that the result will inevitably disappoint. In his
2013 Bloomberg speech committing to a referendum, he
promised to secure fundamental, far reaching change in
the terms of Britains membership. But this was never
realistic.
The prime ministers room for manoeuvre was restricted
because the UK already has opt outs from the euro, the
Schengen passport-free zone and many agreements on
justice and home affairs. As a result, other countries were
always going resist Britain opting for more a la carte Europe.
Negotiating with 27 other heads of government turned out to
be tricky far more so than John Majors horse-trading with
11 EU states over Britains Maastricht treaty opt-out. With
populist sentiment across the continent running high, many
were reluctant to do the British special favours even the
Central Europeans who have benefited from UK historic
support for enlargement. Mr Cameron has compounded his
difficulty by failing to cultivate allies in Europe over the past
six years, too often playing to the Eurosceptic gallery at
home.
The stage now moves from Brussels to the referendum in
Britain. The decision by Michael Gove, the justice secretary,
to advocate Brexit, will give intellectual edge to an Out
campaign that lacks leadership and is still struggling to
define what Britains future would look like outside the bloc.
Personalities matter, not least because turnout will do much
to determine the final result. But the debate ahead should
aim higher. This is about nothing less than the prosperity and
security of Britain and the countrys place in the world. Lord
Bramall, the 92 year old former head of the British Army, has
lent much needed perspective with his warning that the UKs
departure would leave the EU weakened and demoralised
and that the breakdown of the bloc would be a far greater
threat to Britains national security than some irritating and
unnecessary meddling from Brussels.
Few plebiscites have been as consequential for Britain,
Europe and for transatlantic relations. Once battle is joined,
Mr Camerons renegotiation will be seen for what it was: a
device that did little more than allow him to manage his
fractious Conservative MPs.
Now the national interest must prevail as the prime minister
moves from the back rooms of Brussels to the front room of
the British people. He should deliver on his pledge to make
the case for membership with all my heart and all my
soul.
---
EU referendum: An extraordinary 24 hours in

politics - Cabinet divided moments after
historic vote called
Taken from the Sunday Telegraph 21 February 2016
Prime Minister announces EU referendum will be held on

June 23 but senior ministers Michael Gove, John
Whittingdale, Priti Patel, Theresa Villiers, Chris Grayling and
Iain Duncan Smith all back Brexit
David Cameron's Cabinet split apart just minutes after he
called a historic in-out referendum on membership of the
European Union as six of his senior ministers demanded that
Britain sever its links with Brussels.
In an extraordinary 24 hours in British politics, the Prime
Minister announced a June 23 referendum but was then
faced with the prospect of one fifth of Government ministers
opposing his bid to keep Britain in the EU.
Mr Cameron yesterday made an emotional plea on the steps
of Downing Street for voters to reject the leap in the dark
of a British exit from the EU, saying that remaining a
member of the bloc is essential for economic and national
security.
Britain is safer, stronger and better off in a reformed EU,
he insisted.
However, moments after his address to the nation he faced a
heavily coordinated show of defiance from his own ministers
led by Michael Gove, the Justice Secretary, who is also one
of Mr Camerons closest allies.
Mr Gove travelled to the headquarters of the Vote Leave
campaign alongside Iain Duncan Smith, Chris Grayling, John
Whittingdale, Theresa Villiers and Priti Patel. The ministers
were photographed with a sign calling for Britain to take
back control.
He then released a 1,500-word statement in which he spoke
of his pain at opposing Mr Cameron but said that the EU is
creating economic misery and is built to keep power and
control with the elites rather than the people.
He appeared to echo Mr Camerons safer, stronger and
better off phrase but instead used the words freer, fairer
and better to describe why Britain should leave the EU. It
will intensify speculation that Boris Johnson, the London
Mayor, who is yet to declare his position, could join the
campaign to leave the EU.
Writing in todays Sunday Telegraph, Ms Villiers, the Northern
Ireland Secretary, said it is time to take back control and
that as long as Britain is beholden to European courts we
cannot say we run our own country. The so-called gang of
six are now set to be joined by at least 12 junior ministers
and more than 100 Conservative MPs.
Mr Cameron will today continue making the case for Britain
to stay in the EU and has promised to introduce a British Bill
of Rights designed to ensure that UK sovereignty is

guaranteed by making the Supreme Court supreme.
He will attempt to head off his Eurosceptic critics by
publicly challenging the Leave campaign to set out exactly
what Britain would look like outside the EU, senior sources
said.
The swift, unprecedented split came within minutes of Mr
Cameron convening the first Saturday Cabinet meeting since
the Falklands conflict. He began with a passionate 20-minute
address setting out the deal he secured on Friday night in
Brussels after 30 hours of intense negotiations. He told
ministers his deal gave Britain special status in the EU and
that he would campaign heart and soul to remain in the
bloc.
He hailed a four-year emergency brake of migrants access
to full rates of benefits in the UK that could remain in place
for seven years. Mr Cameron also assured his Cabinet that he
had secured an opt-out for Britain from future European
treaties to make clear that the references to ever-closer
union do not apply to Britain.
(Full article click - Telegraph)
---
Jeremy Warner: The gloves are finally off for

epic Brexit fight
The risk of staying in seems to be that of being repeatedly

over-ruled and disadvantaged by the eurozone majority
With the pantomime of the renegotiation over, its time to
get down to the serious stuff. For pro-EU voices in business
and the City, the renegotiation was always unimportant. It
was merely part of the political dance, and was never likely
to yield the reformed Europe of initial ambition.
As it is, the supposed City carve out from eurozone
regulation, leaving Britain free to regulate its financial
sector as it sees fit, has been further watered down in the
final agreement, and seems to be now almost wholly
meaningless.
Yet that does not appear to bother mainstream finance
unduly. For the City, the big prize has always been a
completed single market in services, and a capital markets
union. Provided these things are delivered, the rest doesnt
matter.
It remains to be seen how much damage evident
disappointment with the renegotiation does to the remain
in campaign. Europes refusal, or rather inability, to grant
meaningful opt-outs may have permanently alienated some
voters. Or it may be quickly forgotten. Whatever the answer,
there is now a clear choice to be made in or out.
The main economic risk of staying in seems to be that of
being repeatedly over-ruled and disadvantaged by the
eurozone majority. Other than that, however, and the
potential for budgetary savings, it is hard to point to any
obvious economic upside in leaving. This is basically the
Achilles heel of the still quarrelsome Vote Leave campaign.
It is, on one hand, quite easy for the remain camp to point
to any number of possible economic downsides.
The potential for gain is confined to what my fellow
Telegraph columnist Andrew Lilico describes as the grand
vista of opportunity outside, new challenges in the wider
world, new dreams to dream, new schemes to scheme.
Eloquently put, certainly, but if this was proposed as a
business plan, it wouldnt quite hack it.
In any case, how is the EU an impediment to pursuing the
wider world? It doesnt seem to have deterred Germany,
which is far more successful in Britains former
Commonwealth than the UK. There are good reasons for
leaving the EU, but the economic case is yet to be made.
Banking deterrent
The banking season kicks off again this week, and pretty
dispiriting reading it is likely to make, too. One banking
chief who will be thanking his lucky stars he got his rights
issue away when he did is Bill Winters, of Standard
Chartered. If he had waited for the full-year results, due on
Tuesday, he would never have managed it. Since his
emerging markets bank raised its 3.3bn, the shares have
bombed and now struggle to match even the once deeply
discounted price of the rights.
Its a similar story of value destruction more or less
everywhere. All hope of a recovery in sentiment has been
obliterated by the rout of recent weeks. Investors have again
gone on strike. Its not hard to see why. And, no, it is not
merely a reflection of renewed economic slowdown,
negative interest rates and the commodities bust.
At least some part of it is down to the actions of regulators,
who on the one hand insist on lorry loads of new capital but
on the other seem intent only on confiscating anything
raised by fining the banks to kingdom come for past
misdemeanours.
It is said that virtually everything raised by the European
banking sector since the onset of the crisis (not counting
government bailouts) has been spent on fines and
compensation, leaving banks unable to meet stringent new
capital requirements except by means of balance sheet
contraction. You cannot have an expanding economy without
a healthy banking sector, yet regulators have served only to
make it sicker still.
There is no sign of a let up. The banking season will bring
news of yet further humungous provisioning for pension
protection insurance mis-selling. This apparently neverending compensation gravy train helps support UK
consumption, but it scarcely makes the banks any more able
to lend. UK banks are slightly better placed than their
continental peers but its much the same story.
The banking system remains broken. In such circumstances,
it does not matter how much free money the central bank
provides, there is no mechanism for getting it through to the
real economy.
Peer-to-peer lending
Is peer-to-peer lending an accident waiting to happen, or is
it, as its sponsors claim, a revolution in banking that will
eventually challenge the dominance of conventional lenders?
Im hoping its the latter, but there are plenty of sceptics,
not least the former Financial Services Authority chairman,
Adair (Lord) Turner. Hes warned that P2P is a potential
source of losses that would make the worst bankers look
like absolute lending geniuses. He may or may not be right.
Certainly, it is vigorously disputed by Rhydian Lewis, chief
executive of RateSetter, one of the three big P2P start-ups.
Having surpassed 1bn in lending, he claims risk assessment
procedures are just as demanding as the big high street
banks, if not more so. But if they did materialise, would big
losses in P2P matter? As things stand, the total size of P2P is
too small to be systemically important. Nor is it covered by
deposit insurance, which makes its lending more akin to
equity investment than traditional credit. Unlike fractional
reserve banking, P2P lenders dont create money.
If default levels turn out to be higher than anticipated, the
investor must simply grin and bear the losses. One or more
of these lenders will certainly go down in the next recession.
Provisioning is typically less than 2pc of the loan book, which
is a lot less than losses high street banks sustain in even a
mild downturn. No doubt some investors dont fully
understand the risks, but they can hardly claim they were
not warned. When the balloon goes up, there will be no
compensation.
Still, if you dont fancy risking your money with P2P

borrowers, you should soon be able to invest in these lenders
directly. All three of the market leaders are planning stock
market flotations over the next two to three years
assuming the next recession does not floor them beforehand,
that is.
---
EU deal: How David Cameron took on the

eurozone and won
Government's battle with France over protecting the City

emerges as one of Prime Minister's biggest triumphs in sevenmonth renegotiation slog
David Cameron is an unlikely champion of a euro
superstate.
Since embarking on a bid to redraw Britain's settlement with
Europe - beginning with his seminal Bloomberg speech in
January 2013 - the Prime Minister has urged the 19-member
eurozone to pursue deeper reforms in a bid to shore up its
shaky institutional foundations.
"It is in all our interests for the eurozone to have the right
governance and structures to secure a successful currency
for the long-term", Mr Cameron told an audience at Chatham
House last November, as he officially unveiled his
renegotiation demands.
Britain, of course, will have nothing to do with Brussels' pipe
dreams of a euro parliament, single treasury or common
banking union.
In echoing federalist calls for a quantum leap in euro
integration, Mr Cameron is less an EU visionary than an EU
retrograde.
There may be no appetite among the euros peoples to
devolve their tax and spending powers to Brussels, but the
Prime Minister has been happy to indulge and encourage the
fantasy that the single currency is on a one-way track
towards fiscal union.
His lip service to integrationists has served to highlight that
the European Union is truly a two speed project, indelibly
divided by the euro ins and euro outs.
It is monetary union, rather than then Schengen area or the
single market, that is the real beating heart of a united
Europe and where the bulk of Brussels political capital will
be spent over the next decades.
But as Mr Camerons seven month diplomatic blitz wound
down to an end this weekend, it was his desire to have his
cake and eat it on euro-area reform that came to most irk
the EUs powerful foundational member states.
Safeguarding the City
As part his aversion to being roped into anything resembling
"ever closer union", the Prime Minister has pushed for a
guarantee that Britains financial services sector - arguably
the single biggest driver of economic prosperity in the UK
over the last 20 years - remains untouched by Brussels'
attempts to "complete economic and monetary union.
Chancellor George Osborne has led the effort to safeguard
the City of London from any rules or regulations that could
put British-based banks at a disadvantage to their 19
eurozone counterparts, damaging the integrity of the single
market.
Even governor of the Bank of England Mark Carney had
waded in; urging the Treasury to secure a principled and
upfront guarantee that Britain can never discriminated
against outside the euro.
But core eurozone member states such as France,
Germany and Belgium, protest the UK has always stood on
the fringes of its integrationist projects and should not be
allowed to stand in the way of their attempts to protect

themselves against another financial crisis.
France has led the charge against any preferential "light
touch" treatment for the City which could undermine the
financial stability of the euro and spread the contagion of a
la carte Europe.
No country can have the right to a veto, no country can
withdraw from the common rules, otherwise another country
will demand exceptions", said French president Francois
Hollande, arriving at the start of this weeks mammoth EU
leaders summit in Brussels.
Slamming the single rulebook
As well as having a permanent opt-out from joining the euro,
the UK is not party to the EU's landmark banking union
project, devised after the financial crisis to break the toxic
link between sovereigns and lenders that bought the euro to
its knees after 2009.
Banking union has been one of the few areas of modest
success Brussels can boast in the last year, setting out
harmonised rules on how to resolve failing banks and
subjecting financial institutions to a single supervisor in the
form of the European Central Bank.
Cumulatively, these laws - known as the "single rulebook in
EU jargon - became an unlikely battleground between Paris
and London in the interminable rounds of drafting and
redrafting of Britains new settlement over the past
fortnight.
It is flexibility to act outside the rulebook that Mr Osborne so
cherishes. But in the series of draft renegotiation texts that
preceded this weeks make-or-break summit, Britain's room
to manoeuvre narrowed in every interaction.
The last version released before the start of Thursdays
summit, circumscribed the UKs ability to operate under its
own regulatory regime by removing a reference to Britains
different provisions outside the rulebook, replacing it with
a reference to mere specific provisions.
Paris also opposed the use of the word existing to describe
the role of the EUs financial supervisors, fearing it would be
hijacked by the British to permanently hinder future
expansion of Brussels' regulatory powers.
Delivering victory
Yet, the final version of the deal thrashed out over 30 hours
and over two three-course meals in Brussels Justus Lipsius
building, delivered Mr Cameron his victory over the
eurozone.
Britain or any individual non-euro member state can now
pull an emergency lever over eurozone laws they have
reasoned opposition to, forcing leaders to hold back from
implementation until their concerns are addressed.
The settlement also enshrines a level playing field in
financial regulation for euro ins and euro outs, appeasing
both sides concerns over discriminatory practices. Both
these provisions will eventually be written into EU law when
the bloc's legal settlment is opened up within the next five
years.
The eurozone cannot act as bloc to undermine the integrity
of the single market, the Prime Minister told a packed press
room during a broadcast aired live on the BBCs News at Ten
on Friday night.
Our financial services can never be forced to relocate
inside the eurozone just because they are based in the UK.
We have secured vital protections for our economy said Mr
Cameron.
The protections will address real concerns in the Treasury
that the EU will develop a sprawling framework which will
clamp down on the reckless Anglo-Saxon lenders which
many on the continent still blame for bringing crisis to
European shores back in 2009.
As it stands, there is a caucus of majority eurozone states 19 euro-ins against the nine euro nine euro-outs - that could,
in theory, railroad British interests to serve the cause of EU
integration.
ECB president Mario Draghi has been one of the most
powerful defenders of the status quo. He repeated his
determination to preserve the sanctity of monetary union
more than four times when quizzed by MEPs earlier this
week.
Mr Draghi has warned that any lingering ambiguity over
Britains role outside the euro could have systemic
implications for the functioning of the single currency area.
EU mission creep
The Chancellor has reasons to be wary of Brussels' mission
creep in areas of financial oversight. Although seemingly
benign when all is well in the world, bank regulations and
capital rules quickly concentrate minds when the global
economy finds itself in the midst of another downturn.
In the aftermath of the last financial crisis, the UK had its
fingers burnt over the EU's decision to press ahead with a
controversial banker bonus cap in 2012.
Four years on, and having given up on a legal challenge
against it, British regulators are still pressured by Brussels to
crackdown any attempts by banks to circumvent the pay
ceiling which limits bonuses to 200pc of salaries.
Other British battlegrounds include the much-resented
Financial Transactions Tax, a radical attempt to impose a
single levy on Europe's financial sector. This was initially
vetoed by the UK at the EU level, but is still being pursued
by a group of euro states.
Britain was also forced to take the ECB to court over a ruling
which would compel all European clearing houses to be
based in the continent last year.
And yet, for all the Governments determined pursuit of
safeguards for the City, Londons financial hub has remained
largely silent on the prospect of being subject to a uniform
regulatory regime from Brussels.
Most of UKs largest banks have come out in favour of staying
in the EU in a bid to preserve their access to the single
market. Britain exported financial services worth around
20bn, or 1.1pc of GDP, to the continent in 2014.
Faced with prospect of losing their ability to operate freely
across borders, Britains largest banks are expected to rally
around the Remain camp as early as next week.
---
All eyes on Boris Johnson over EU referendum
Mr Johnson said he would make a decision today after

considering the finer details of the EU deal negotiated by
the prime minister.
He was encouraged to back the Leave campaign, headed by
Nigel Lawson, the father of Nigella Lawson, by the UKIP
leader Nigel Farage.
Heres my guess: If we think that Boris is very ambitious
and wants to be Prime Minister, if he backs David Cameron in
this referendum, in my opinion he will never be Prime
Minister, Farage said on LBC radio.
Either Cameron loses and that whole side of the argument
is discredited and the Tory Party seeks somebody else.
But say David Cameron wins, well then I think the
Chancellor, George Osborne, would be the automatic
successor, and youre then maybe looking at Boris waiting
until 2025 or something like that.
If Boris wants to be Prime Minister, he has to back the
Leave side.
Nonetheless other senior ministers Michael Gove, John
Whittingdale, Priti Patel, Theresa Villiers, Chris Grayling and
Iain Duncan Smith have all supported the Leave vote and
they began an immediate telephone campaign supporting a
Brexit.
Lets take back control, was their message.
Mr Gove, the Justice secretary, said the development of
democratic self government which was exported to the US,
India, Canada and Australia brought prosperity and peace
to millions and it was a critical consideration in his decision
to vote Leave.
He said: Our membership of the European Union prevents
us being able to change huge swathes of law and stops us
being able to choose who makes critical decisions which
affect all our lives. Laws which govern citizens in this
country are decided by politicians from other nations who
we never elected and cant throw out.
Earlier Cameron had urged the country to stay with a
reformed EU, acknowledging the referendum was one of
the biggest decisions this country will face in our lifetimes.
He said outside Number 10 Downing Street: The choice is in
your hands but my recommendation is clear.
I believe that Britain will be safer, stronger and better off
by remaining in a reformed European Union.
He was backed by Theresa May, Home Secretary who said it
was in the national interest to remain in the EU for reasons
of security, protection against crime and terrorism, trade
with Europe, and access to markets around the world.
(Full article click - Australian)
Taken from the Australian Sunday, 21 February 2016
Such is the cult following of the Mayor of London,

bookmakers have anticipated a dramatic swing in Britains
referendum on membership in the European Union
depending on whether Boris Johnson elects to back the
Leave campaign.
Immediately after British Prime Minister David Cameron
announced the referendum date of June 23, and celebrated
securing a reworked deal with the EU member states after
marathon two day negotiations, all eyes were on Johnson.
Would he stay true to his well-publicised convictions over
the past decade he used to be a journalist deriding the EU
shenanigans with relish or would a back room political
deal with fellow old Etonian Cameron sway his public
pronouncements?
Bookmakers say if Mr Johnson joins the Leave campaign
which sorely needs a charismatic leader the odds on the
country remaining in the EU would shorten dramatically.
Current odds are 2/7 for Britain to remain in the EU, and 5/2
to leave.
European News
Europes Biggest Banks Ordered to Boost Capital
Taken from the WSJ Saturday, 20 February 2016
New banking watchdog, in first eurozone-wide review, cites

risks to lenders from low rates
Europes new banking watchdog ordered the biggest
eurozone banks to boost their capital levels by 0.5
percentage point on average after a yearlong assessment of
their risks.
The so-called Single Supervisory Mechanism, established in
late 2014 as part of Europes efforts to head off its debt
crisis, warned in a report published on Friday that overall
risks for the roughly 130 large eurozone banks it supervises
have not decreased compared to 2014.
It said many banks were still recovering from the 2012
financial crisis and they continue to face risks and
headwinds. The biggest risk consists in adapting their
business models to a new environment of low interest rates,
the supervisor said.
It is the first time that the eurozones single banking
watchdog has reviewed the riskiness of the blocs biggest
banks based on a common standard. The task previously fell
to national regulators, who took different approaches to
capital levels and business risks.
The review aims to restore confidence in Europes battered
banking sector, which has come under renewed pressure in
recent weeks amid broader concerns around the health of
the global economy. The MSCI Europe Financials Index has
fallen more than 15% so far this year.
The eurozone banks need to boost their core tier one capital
ratios to 9.9% on average this year from 9.6% last year, and
set aside an additional 0.2% of capital as a buffer against the
risk posed by systemically-important institutions, the
supervisor said. The supervisor informed the banks of its
decision in late December.
Core tier one ratios are a key measure of a banks balance
sheet strength, comparing equity capital to risky assets.
The report shows that five banks didnt have enough capital
to meet the current requirements, including one that fell
significantly short. It didnt name the banks. Some lenders,
though, wont need to boost their capital at all because they
already meet or exceed the requirements.
The report shows that five banks fell short of common equity
Tier 1 capital requirements, a widely used measure of a
banks financial strength, including one that fell significantly
below the required level.
To assess the strength of the banks, the supervisor looked at
four elements: business models, governance and risk
management, risks to capital and risks to liquidity and
funding. Its additional capital demands consisted of a 0.3percentage-point increase based on its own assessment of
risks, and a further 0.2-percentage-point for capital buffers
that are being gradually phased in.
The review provides a holistic view of banks risk profiles,
and uses forward-looking elements such as stress tests, said
Korbinian Ibel, director general at the European Central
Bank responsible for microprudential supervision. Mr. Ibel
said the SSM had hired more than a thousand staff since its
establishment in late 2014 and was now the biggest
supervisor in the world.
Each bank is graded on a four-point scale, and receives a
decision document that may include additional capital or
liquidity requirements or other demands, such as restrictions
on certain businesses. Those documents are confidential but
banks may choose to publish them.
The SSM is housed within the ECB in Frankfurt, and the banks
it supervises account for around 85% of all eurozone banking
assets.
(Full article click - WSJ)
---
Europes banks fear the CoCo market is dead

Issuance of bonds, which are designed to make banks safer,

could grind to a halt as new jitters hit the world's financial
system
Europes bankers fear they may never again be able to issue
CoCo bonds, if the dive in prices this month has left
investors too afraid to buy the bonds.
Lenders had planned to issue 40bn of bonds this year,
leaving them with a gap in their financing plans.
Banks have even made approaches to regulators to warn
them that the industry may not be able to meet officials
plans for issuing the bonds if prices do not bounce back
soon.
CoCos, formally known as contingent convertible bonds and
classed as AT1 securities, are bonds which are designed to
make banks safer.
Banks can stop paying the interest coupon on bonds when
profits evaporate, in the same way as they do with dividends
on shares. And when a banks capital buffer falls below a
fixed level, the CoCos are turned into shares or wiped out
completely.
Investors bought the CoCos for their relatively high interest
payments, but this month panicked that banks may struggle
to pay the coupons in future.
Although banks led by Deutsche Bank and Credit Suisse
reassured investors that they can easily pay their bills,
prices fell by as much as 25pc and have only bounced back
part of the way.
As a result, some industry insiders fear banks will not be
able to sell any more CoCos.
If prices stay at these levels, no bank will be able to issue
and you end up with an unsustainable capital structure,
said one senior figure in European investment banking.
Another financier warned CoCos have been shown to be
destabilising as they have been the cause of market panic,
and hopes that the instruments will fall from favour with
regulators.
CoCos are self-destructive, they are pro-cyclical and they
are expensive for banks to issue, the banker said. I dont
think there has [ever] been much capacity in the market for
them.
No British or European banks have issued CoCos this year,
down from 33bn in 2014 and 31bn in 2015, according to
data firm Dealogic despite estimates from S&P Global
Market Intelligence that banks in Europe plan to issue 40bn
of CoCos this year.
Lenders have made initial approaches to regulators to sound
out their views on the matter.
The Bank of England declined to comment, but the British
regulator is not thought to be overly concerned by the state
of UK banks capital positions.
Instead, the authorities are believed to be more inclined to
view the recent moves in pricing as a welcome recognition
by investors of the risks involved in holding CoCos.
However the European authorities are understood to be
more divided on the topic.
Europes banks planned to issue 40bn of CoCos this year,
leaving them in a more difficult position.
Officials at the European Central Bank are believed to be
broadly in favour of keeping CoCos as they are, but a strong
contingent, including some German officials, are thought to
be less enthusiastic about keeping the pressure on banks to

issue the bonds.
But it may be difficult deciding what to replace the bonds
with.
One option would be to issue shares, though that would also
upset existing shareholders whose stakes in the banks would
be diluted by the move.
Alternatively banks could slim down further, selling off loan
portfolios and cutting lending. This would reduce the assets
against which the banks have to hold capital, but would also
be opposed by regulators who want banks to lend more to
support the stalling economy.
A third option would be to issue more traditional bonds. Tier
2 bonds are typically relatively junior bonds which get wiped
out in a crash and tick some of the right boxes with
regulators.
The bonds also reassure investors as the interest payments
are mandatory, not optional as with CoCos, so will not
disappear the moment a bank cuts its dividend.
However, regulators want banks to be able to save money by
cutting the coupon payments, and so may be unlikely to
allow banks to issue extra T2 bonds in lieu of CoCos, leaving
the industry in a quandary.
Currently regulators are likely to force banks to wait, in the
hope that prices recover to a sustainable level, reopening
the market to new issuance of CoCos.
Lawyers active in the sector hope the European Banking
Authority (EBA) will give banks and investors more guidance
on the type of occasion in which it will make banks suspend
payments, making investors less twitchy over the CoCos.
The EBA declined to comment.
News Americas
What Recession? GDP Set to Grow 3%
Taken from the Barrons Online Saturday, 20 February 2016
The gloomy stock market notwithstanding, economic growth

in the U.S. could be the best in years.
Is the U.S. economy going through a growth pause, or is this
the pause before the onset of recession? The answer to that
question highlights two quite divergent outcomes for 2016
one good, one terrible. We subscribe to the former view. But
before we make our case, lets consider the bear argument.
If recession is imminent, then economic output will contract
for an extended period, the stock market will continue to
head south, and credit spreads will rapidly rise. The nearfull-employment economy, signaled by Januarys jobless rate
of 4.9%, will quickly unravel and vault toward 6% within
months.
But what if, as often happens, the indicators signaling
recession are false alarms? Then, the generally quite
favorable fundamentals at this stage in the expansion should
dominate. Indeed, we expect economic growth to run at an
annual rate of 2.8% through the first half of this year, then
accelerate to 3.2% by the second half.
Growth of real economic output in 2016 would therefore
come in at 3%, by the conventional fourth-quarter-overfourth-quarter measure. This would make 2016 the bestperforming calendar year since the expansion began in mid2009. Under this scenario, the job market will continue to
tighten, as the unemployment rate falls toward 4%. Credit
spreads will narrow, and the stock market could rebound,
probably touching new highs by the end of this year. The
wild card: the presidential election.
Our 3% outlook, while upbeat, isnt off the charts. According
to the Feb. 10 release from the monthly Blue Chip Economic
Indicators, the consensus of 50 forecasters projects growth
in 2016 at 2.4%. Blue Chips optimistic consensus of top 10
forecasts puts growth at 3% to 3.1%.
Skeptics might wonder if these two divergent routes to
famine or feast are too extreme. Might there be a more
plausible in-between scenario that splits the difference
between recession and accelerating growth?
To begin with, while a 3% increase in gross domestic product
might sound unduly ambitious, this reflects only the lowered
ambitions of the current era. Every expansion since World
War II has gone through intervals of slow growth. However,
all have had years in which economic growth ran at 4% or
better, including the 2002-07 expansion. If the economy rises
by 3% this year, the current expansion will still retain the
dubious honor of being the weakest on record (see chart
above).
Growth of 4% seems unattainable due to the drag on exports
from weak economies abroad, combined with a strong dollar
that makes those exports more costly, plus below-par
performance of the small-business sector and slowed
expansion of the labor force, owing mainly to the retirement
of baby boomers. But if the vicious cycle of recession is
avoided, a virtuous cycle should ensue, as positive factors
reinforce one another.
Employment gains and the tight labor market are already
driving up wages and salaries. That is boosting consumer
spending, which is encouraging capital investment, which is
causing businesses to hire, which, in turn, is driving
employment gains. The virtuous cycle has also begun to
include the housing sector. Employment gains make it
possible for more people to form households, which spurs
demand for apartment buildings and detached homes,
which, in turn, leads to greater gains in employment.
With faster top-line growth, corporate profits can also rise.

Profit increases typically slow long before an economic
expansion runs out of steam. The pace of the bull market of
the past few years has probably slowed, but stock prices can
still reach new highs.
IF RECESSION IS AROUND the corner, it will turn history on its
head. Take the impact of oil since the mid-1970s. As the
chart below shows, each of the past six recessions has been
preceded by a spike in crude prices, often called an oil
shock. The logic is straightforward: Businesses and
consumers suffer financial shock when this essential
commodity suddenly becomes more costly.
The current collapse in petroleum prices has also been
called an oil shock, even though plunging tabs for such items
as gasoline, heating oil, diesel fuel, and jet fuel have
enriched those same businesses and consumers.
Of course, cheaper crude does hurt energy producers. But
since most publicly traded companies are consumers of
energy, it makes no sense for the broad stock indexes to
track oil. The recent pattern in which the Standard & Poors
500 index moves up and down in concert with crude seems
to reflect equity traders belief that a low price for crude
signals an economic slowdown.
Hopefully, the market will soon break out of this circularreasoning trap. If Barrons is right that oil will rise to $55 a
barrel by December, this pattern will be broken by events.
Our Feb. 6 cover story, Here Comes $20 Oil, referred to
the likely final leg of the energy bear market, which
should end by April, before a rebound to $55 by
December.
Defaults by the energy sector on loans are hurting U.S.
banks. But according to estimates by economist Carsten
Valgreen of Applied Global Macro Research, such loans
account for no more than 4% of the banks total loan book.
So even if losses on these loans run as high as one-half, this
should hardly trigger a banking crisis.
As Valgreen also points out, in all three categories of bank
lendingcommercial and industrial, consumer, and
residential real estateconventionally calculated loss ratios
are near historic lows. Bank lending has been gathering
steam, observes Rennaissance Macro Research economics
head Neil Dutta, noting that over the 13 weeks through Feb.
3, commercial bank lending accelerated across all
categories. Valgreen, who helps run a hedge fund that trades
on such insights, believes that the recent selloff in U.S.
banking stocks offers a unique buying opportunity.
Another channel through which low energy prices supposedly
threaten recession: weakness in developing lands that export
oil. Making matters worse is slower economic expansion in
China, Japan, and the euro zone.
But while U.S. growth will certainly take a hit from lower
exports to the global market, Michael Lewis, economics
chief at Free Market, observes, In the modern era, there is
not a single recession that can be traced to foreign economic
woes.
For example, the 1998 meltdown in the Asian economies that
caused a brief selloff in the U.S. stock market didnt trigger
the recession that many expected at the time. Adds Lewis:
While a U.S. sneeze can give the rest of the world the
proverbial flu, the reverse still does not happen.
To be sure, the ultralow interest rates maintained by the
Federal Reserve have created a breeding ground for financial
excesses that, when painfully corrected, often bring
recession. But so far, it appears that the Fed and the
economy have been lucky. Major excesses are hard to find.
Even if stocks make new highs by the end of the year,
standard price/earnings ratios will be noticeably below their
peak of 2000, especially if earnings make modest gains. And
the home-price bubble that started to burst in 2007 is a long

way from forming again. The classic excess cited in the
textbooksthe excessive buildup of inventoriesis hardly
present today, especially in light of the cuts to inventory
investment in the second half of last year.
ONE INDICATION that the economy has found renewed
strength: the labor force turnaround of prime-age workers
25 to 54. Much of the reason for slowed growth in the labor
force has been demographic. The baby boomers are reaching
retirement age, and they are merely following a predictable
life cycle by leaving the workplace. But as Barrons has
pointed out (Works for Squares, Aug. 30, 2014), another,
far more disconcerting trend was also evident: lower
participation by prime-age workers.
This unanticipated trend is a key reason that forecasters
have been surprised by how far the unemployment rate has
fallen, despite modest growth. Skeptics have therefore
dismissed the decline as bogus. Why place any value on a
statistic that becomes more favorable as job seekers stop
seeking jobs? But that is no longer true of prime-age
workers, and the turnaround is due to the full-employment
economy signaled by the jobless rates decline to 4.9%.
The prime-age labor force fell to a low of 100.6 million in
second-quarter 2014 from its fourth-quarter 2007 peak of
104.4 million. Over the past six calendar quarters, however,
it has rebounded by 1.3 million, to 101.9 million in January.
The unemployment rates decline over this period, to 4.9%
from 6.2%, has therefore been accompanied by more primeage job-seekers rejoining the workforce.
THE RECENT TREND in the unemployment rate also tells us
something about the diminished chances of recession.
Evidence shows that increases in joblessness consistently
lead economic turndowns. In the 12 months before all 11
recessions since World War II, the jobless rate rose on a
three-month basis at least once, and usually several times,
no doubt because it started to feel the tremors from
reduced economic activity before the recession hit.
In the 12 months prior to the 2008-09 recession, the
unemployment rate rose on a three-month basis no fewer
than seven times. Before the previous recession, of 2001, it
climbed five times, and before the 1990-91 recession, six
times.
But over the past 12 monthsin fact, over the past three
yearsthe three-month change in the unemployment rate
has generally been negative and occasionally flat; it hasnt
risen even once. The last three-month increase in
joblessness occurred as of January 2013, when it hit 8%.
Further confirming the positive trend in the labor markets:
the persistent decline in new claims for unemployment
insurance. As Free Markets Lewis points out, initial claims
are one of the most reliable leading indicators, typically
giving ample warning of recessions. But, he adds, there is
not even an inkling [of a rise] yet. In the four weeks
through Feb. 13, weekly claims averaged 273,000, one of the
lowest figures in decades.
For real GDP to grow by 3% this year, real consumer spending
must do its part, rising at an annualized 3% or more in each
calendar quarter. So far, at least, consumption seems to be
off to a good start. Based on the solid retail sales report for
January, economist Neil Dutta is tracking 3.2% growth in the
current quarter. If that persists, it will be noticeably higher
than the lackluster performance of 2015, when real
consumption for the full year rose by just 2.6%. Last year,
the money generated by the boost to disposable personal
income was mainly saved, rather than spent.
Applied Global Macro Research economist Jason Benderly
predicts that consumption will rise by 3.4% this year. His
forecast seems plausible if, as he expects, three factors that

figured in 2015s weak performance recede this year.
The first factor, which weighed on consumer spending, was a
fall in confidence. Benderly has found the best indicator of
consumer confidence isnt the standard surveys of
confidence, but rather credit spreads. The spread between
yields on Baa corporate bonds and 10-year Treasuries
widened steadily over the course of last year and is now
even wider. But as recession fears recede, this spread should
start narrowing. That should signal a rise in confidence, he
argues, accompanied by a rise in spending.
The second factor is, ironically, faster growth of wages and
salaries. Benderly has found that consumer spending
responds with a lag when wage-and-salary growth
accelerates. That happened last year, with the extra income
going into extra saving. This year, however, consumer
spending should start to catch up with the increase in
income.
THE FINAL FACTOR is also a lagged response, in this case, to
lower energy prices. Benderly has found that when prices of
necessities decline, consumers initially save much of the
windfall, only to spend it later. So last years plunging energy
costs went into savings, but much of it will be spent on
consumption this year.
Another key component of economic outputinvestment in
plant and equipment was hurt by the severe cutbacks by
the energy sector. But if the oil price rebounds to $55, as
Barrons expects, then key parts of energy investment will
make a comeback before the year is out, says Citigroup
senior energy analyst Anthony Yuen. And in general, Benderly
anticipates a gradual rebound in U.S. manufacturing, as it
responds with a normal lag to the pickup in retail sales.
The government portion of output, which began to make
small contributions to growth in 2015, should pick up a bit
this year, too, given the turnaround in state and local
employment. Residential investment, which has been making
steady contributions to GDP growth, should also climb a bit
faster, as rising incomes spur greater household formation, in
turn causing greater production and spurring greater
employment and formation of households.
In short, the virtuous cycle should dominate.
(Full article click - Barron's)
---
CFIUS releases data on its reviews with a lag of more than a

year. It also does not release publicly details of the
transactions it reviewed, or the concerns that were raised,
although those are contained in a classified version of its
report to Congress.
China was the leading source of investments reviewed by
CFIUS in 2014, with investors filing 24 notices, just ahead of
the 21 filed by investors from the UK.
A senior treasury official said that CFIUS treated investments
from China no differently than it did any others. But
investments from China have long drawn more political
scrutiny than others in Washington. Beijing has repeatedly
expressed concerns that Chinese companies are unfairly
singled out.
Deals are getting approved all the time and the US remains
one of the best markets in the world for foreign investment.
In a letter sent to the Treasury this week, 45 Republican
members of Congress asked for CFIUS to conduct a full and
rigorous review of a proposed bid by a group of Chinese
investors for the Chicago Stock Exchange. The deal, if
approved, would for the first time give a Chinese company
control over part of the USs equity trading infrastructure,
they said.
Should you determine [that the Chongqing Casin Enterprise
Group] maintains a close relationship with the Chinese
government and therefore the Chinese military we
would urge CFIUS to deny this transaction, the members of
Congress wrote.
Chris Brewster, a CFIUS specialist at Stroock & Stroock &
Lavan, a Washington law firm, said the committees annual
report showed that the US still remained open to foreign
investment. But he warned that it also indicated the breadth
of deals examined by the committee was growing to include
things such as real estate.
"Deals are getting approved all the time and the US remains
one of the best markets in the world for foreign investment.
But CFIUS reviews are also getting more aggressive, he said.
US reviews of investments made by China

increase
The US has been reviewing a growing number of foreign

investments for national security reasons in recent years,
with investments from China the leading targets for review,
according to new data released by the US Treasury on Friday.
The disclosure contained in the annual report to Congress of
the Committee on Foreign Investment in the US comes amid
a number of new mergers and acquisitions out of China being
submitted for review. Those include the mooted $42bn
takeover of Switzerlands Syngenta by ChemChina, one of
that countrys largest state-owned conglomerates, and a bid
announced this week for the Chicago Stock Exchange, which
has already drawn calls from Congress for a review.
According to the report released on Friday, CFIUS received
147 notices from companies voluntarily seeking national
security reviews in 2014. That number was up from 97 in
2013 and the most seen since 2008, when a record 155
notices were filed.
Less than half of those notices 52 were deemed worthy
of a subsequent investigation on national security grounds.
Just one of these transactions was rejected, while a dozen
applications for review were withdrawn voluntarily by
companies.
News Asia
China Moves to Dispel Doubts on Economy
China dismisses top market regulator
Chinas leaders fired a top regulator and set out specifics on

how they intend to restructure the economy
Chinas leaders moved to dispel perceptions of disarray in
the management of the worlds second-largest economy,
firing a top regulator and setting out specifics on how they
intend to restructure the economy without having growth
fall off a cliff.
The departure of Xiao Gang as head of the China Securities
Regulatory Commission, first reported by The Wall Street
Journal on Friday, was announced by the official Xinhua
News Agency on Saturday morning. In a brief, Xinhua said
the decision was made by the State Council, Chinas cabinet.
The move came amid what appeared to be a public
campaign by Beijing in recent weeks to counter global
pessimism about Chinas growth prospects and economic
stewardship.
Mr. Xiao had been in the hot seat for months. He was the
official primarily faulted for a bungled mid-2015 stockmarket rescue that for the first time made President Xi
Jinping look vulnerable.
At a meeting last summer attended by Mr. Xi and other
senior officials, Mr. Xiaos face went pale when Mr. Xi
expressed dissatisfaction with how Chinese regulators
handled the market-rescue effort, according to people
familiar with the situation.
Then in January, an invention Mr. Xiao had championeda
circuit breaker to prevent a stock-market free fallwent
spectacularly awry, worsening a selloff to trigger the worstever start to a year for Chinese stocks. The circuit breaker
was shelved after only four days in use.
Such missteps, paired with clumsy attempts to reverse or
explain them, have exposed Chinas leaders to speculation
that they have lost their once-steady economic touch.
Mr. Xiaos successor at the stock regulator is Liu Shiyu,
current chairman of the Agricultural Bank of China and a
former central-bank deputy governor, Xinhua said.
Mr. Xiao is expected to be reassigned as a deputy secretarygeneral of the State Council, officials with direct knowledge
of the matter said. In that position, he would be asked to
assist Premier Li Keqiang on economic issues, the officials
said, but it is a less powerful position than the securitiesregulatory chief.
Also Friday, Beijings top economic mandarins gathered at a
historic Beijing guesthouse to present a unified message on
the governments resolve to create a consumer-driven
economy and leave behind Chinas old formula of relying on
cheap exports abroad and infrastructure investment at
home.
They indicated reforms need to happen soon.
If we miss the window of opportunity to push through the
structural reforms, we would suffer severe consequences,
said Yang Weimin, a deputy director of the Office of the
Central Leading Group for Financial and Economic Affairs.
That office, headed by President Xis top economic adviser,
Liu He, is highly influential in shaping Chinas economic
policies.
Mr. Yang said the next two years are crucial in reducing debt
and closing zombie businesses and factories churning out
unneeded goods, reforms outlined in the governments fiveyear plan that runs through 2020.
The economic conference of the China 50 Forum, a think
tank founded by Mr. Liu, took place ahead of a meeting of
Group of 20 finance officials in Shanghai next week, and
those attending also included Chinas central-bank governor
and finance minister.
The head of Chinas securities regulator has been fired

following a dramatic year of stock market turmoil and a
failed government rescue effort.
Xiao Gang will be replaced as chairman and Communist party
secretary of the China Securities Regulatory Commission by
Liu Shiyu, chairman of Agricultural Bank of China and a
former central banker, state news agency Xinhua reported on
Saturday.
The brief announcement indicates Mr Xiao did not resign but
that the Communist partys Central Committee and the State
Council, Chinas cabinet, dismissed Mr Xiao. That suggests
top leaders blamed him for failing to head off the stock
market bubble that grew from late 2014 until the middle of
last year. The main stock index hit a seven-year high on June
19 but had shed nearly half of its value by late January,
erasing almost Rmb30tn ($4.6tn) from the Shanghai and
Shenzhen exchanges.
Mr Xiao was viewed as the face of the all-hands-on-deck
market rescue effort that ultimately failed to halt the
market rout. In early July, a coalition of state-owned
financial institutions informally known as the national
team poured money into the stock market in an effort to
prop up prices, supported in part by loans from the central
bank and major state banks.
Goldman Sachs estimated in September that state buyers
had spent Rmb1.5tn to rescue the market. The national
team owned at least 6 per cent of total mainland market
capitalisation by the end of September.
Beyond state buying, the CSRC also temporarily banned large
shareholders from reducing stakes, cracked down on bearish
bets in the equity futures market and teamed with police to
investigate so-called malicious short selling.
The rescue temporarily stabilised the market in late July but
a sharp sell-off resumed in late August and the CSRC
eventually announced that the national team would halt
large-scale interventions.
Critics also blamed Mr Xiao, 57, for failing to identify the
bubble, which was driven largely by retail investors, as it
was inflating. Margin finance in which investors borrow
money to buy shares exploded in the early months of last
year. Official margin loans hit Rmb2.3tn in late June, up
from about Rmb400bn a year earlier. Lightly regulated, greymarket margin lending may have added Rmb1tn more.
Mr Liu, 54, will be viewed as a safe choice as Mr Xiaos
replacement, analysts say. He took over the chair of AgBank,
Chinas third-largest lender, in December 2013 after rising
through the ranks of the central bank, eventually becoming
deputy governor in 2006. Early in his career he worked at
China Construction Bank and in financial agencies within the
Shanghai government.
Mr Liu has previously emphasised the need to raise the
equity-financing share in Chinas overall fundraising
structure and build a multi-level capital market, a buzz
phrase that refers to different stock and bond markets
serving different kinds of companies.
---
Taken from the WSJ Saturday, 20 February 2016
Chinas chairmanship of the G-20 this year had earlier been

seen as a venue for it to promote new models for running
the world economy. But after the economys stumble recent
stumble, major trade partners are looking for signs that
Beijing has plans to rectify its economic problems.
Mr. Yang said the government was in the process of tallying
up things like the number of zombie businesses, the kind of
overcapacity they account for and the number of workers
they employ.
He took aim at vested interests opposed to the overhauls
and said the government wouldnt provide subsidies and
banks wouldnt lend to firms mired in overcapacity and
debt.
Those responsible for overseeing state assets shouldnt drag
their feet just because shutting down those firms would
decrease the amount of assets they oversee, and local
governments shouldnt protect zombie firms, he said.
Central bank Gov. Zhou Xiaochuan said the moves must be
paired with stimulating demand through monetary and fiscal
policies. His deputy at the Peoples Bank of China, Yi Gang,
said the government would be mindful of the effects on
employment from drastic restructuring, indicating Beijing is
unlikely to carry out any massive factory closures to avoid
unrest.
But Mr. Yi also stressed that China would avoid flooding the
market with too much credit.
The central bank, which has tried to steer lending to the
corners of the economy where it is most needed, on Friday
said it had raised the amount of deposits some banks hold in
reserve because of their failure to lend to farmers and small
businesses as required.
In a move to ease a housing glut afflicting large parts of
China, the finance ministry said that it was reducing deed
taxes for home buyers. The reduced tax rates wont apply to
the few big cities, such as Beijing, Shanghai and Shenzhen,
where demand remains strong.
The twists and turns in Beijings economic messaging have
left global investors wondering whether Beijing is putting
reforms on the back burner to rekindle growth with old-style
stimulus. A record surge in bank lending in January fanned
such speculation.
Chinese officials involved in decision making agree that
Beijing is treading a fine line between restructuring the
economy and preventing instability. Many Chinese officials
say privately that it will take determination of the kind
showed by former Premier Zhu Rongji when he pushed
through painful reforms. Mr. Zhu led a charge two decades
ago to shake up Chinas bloated state sectoran effort that
resulted in the closure of some 60,000 companies and layoffs
of about 40 million workers.
Uncertainty about Chinas slowdown, compounded by
Beijings mixed signals, led some global hedge-fund
managers, including Kyle Basss Hayman Capital Management
in the U.S., to pile up bets against Chinas currency, setting
up a showdown between Wall Street and Chinese policy
makers.
Western officials, including the International Monetary Fund
Managing Director Christine Lagarde and U.S. Treasury
Secretary Jacob Lew, have urged Beijing to better
communicate its policy intentions. Mr. Zhou, the centralbank governor, recently broke a monthslong public silence to
give an interview to Chinas Caixin magazine, saying China
will press ahead on reforms in a pragmatic manner.
There have also been calls inside China for action rather
than words.
Policy makers should stop the empty talk and really start
looking into what the problems are and trying to solve
them, said Xin Bin, an economist at the Development
Research Center, a think tank affiliated with Chinas cabinet,

on the sidelines of Fridays forum.
Some of the criticism of Beijings handling of the economy
has cited policy bottlenecks as a result of Mr. Xis
micromanaging leadership style.
Amid the efforts by the Communist Party to regain mastery
of the economic narrative, President Xi on Friday went on a
whirlwind tour of Chinas three flagship state news
organizations, his first visit to state media since taking
power three years ago.
In between conducting a live video chat with villagers
receiving poverty-alleviation assistance and trying out the
evening-news anchor chair at China Central Television, he
instructed journalists to focus on positive reporting.
(Full article click - WSJ)
---
China Voice: Can China continue medium-high

growth?
Taken from the Xinhua News Sunday, 21 February 2016
With ample development room, solid growth foundations and

abundant policy tools, China is believed to be able to
continue to deliver above-6.5 percent GDP expansion in the
next five years.
China is and will be a developing country for some time, yet
its development gap with Western countries will gradually
narrow, a process that will continuously create new demand
and supply.
For instance, car ownership in China was 106 to every 1,000
people in 2014, compared with 800 in the United States, 620
in Germany and 340 in the Republic of Korea.
Lavish Chinese shoppers spend big on high-end products
during overseas trips, indicating that domestic enterprises
could earn big if meet such demand.
China's urbanization rate in terms of registered urbanites is
lower than 40 percent, compared with an average of 70
percent in developed countries and 60 percent in developing
countries with similar per capita income.
Rapid urbanization will last for many years, and can bring
about a broad range of investment opportunities from homes
and underground pipelines to railways and roads.
While China is phasing out energy-intensive and noncompetitive factories, it is fostering the growth of new
sectors including advanced equipment manufacturing, new
materials, new energy, information technology and
biotechnology.
These emerging business will continuously supply new
products and services, thus, resulting in new demand.
Increasingly well-off Chinese are willing and financially able
to consume.
People born after 1980 spend 40 percent more than earlier
generations, according to research by the Alibaba Group and
the Boston Consulting Group.
Robust e-commerce and convenient delivery services have
connected nearly every part of China, meaning there is
ample room to further tap in to consumption potential.
China's consumers are feeling confident and upbeat despite
the economic slowdown, beating the global average and
most regional peers, according to a survey by market
research firm Nielsen.
In an epitome of exploding online transaction, sales revenue
for Alibaba's Tmall marketplace totalled 91.2 billion yuan (14
billion U.S. dollars) during the "Single's Day" shopping spree
last November, surging 60 percent year on year.
Although ailing global demand has substantially dragged
down China's foreign trade, the government-pushed exports
of advanced industrial production capacity and cooperation
with countries along the Belt and Road will open new
frontier of overseas-driven growth.
Every year over 7 million college graduates -- more than the

population of some countries -- enter the workforce, which
may be shrinking in quantity in an aging China but increasing
in quality.
Although young people are now more willing to spend, the
Chinese are much more inclined than Westerners to save,
which ensures abundant capital in the banking system to
fund economic expansion.
China's interest rates are at relatively high levels compared
with near-zero rates in many developed countries.
In the next five years, policy makers can further lower
interest rates and reduce the amount banks must hold as
reserve to boost investment and consumption.
Despite recent drops, China still holds the world's largest
foreign exchange reserve, which is a powerful weapon and
can be used to cushion financial volatility.
The government could also continue to loosen its grip on the
market and open up more sectors to private investors.
To accomplish the target of building a moderately
prosperous society in all respects, China needs to maintain
its growth momentum. And the country is able to do that.
(Full article click - Xinhua)
---
Billiton to slash $6.6bn payout
Taken from the Sunday Times 21 February 2016
THE worlds largest miner is set to slash its dividend as it

hunkers down for a long period of low commodity prices and
a barrage of fines over a mine disaster in Brazil.
When BHP Billiton publishes half-year results on Tuesday, it is
expected to reduce the $6.6bn (4.6bn) payout among the
largest in the FTSE 100 by about 50%. The company is also
widely expected to change its policy of maintaining or
increasing its dividend every year to one that pays out in
proportion to profits.
Like its rivals, BHP is grappling with a plunge in profits after
the vertiginous drop in the price of its key products iron
ore, copper, coal and oil.
The company also faces billions of dollars in damages after a
dam holding waste from its Samarco mine burst last year,
levelling a village. Seventeen people died and a river was
polluted.
BHP is in talks over setting up a rehabilitation fund, after
the Brazilian government filed a suit seeking 3.4bn in
damages.
The company hopes to announce the fund in the coming
weeks. The size of it will depend on the extent of what it is
expected to pay for, such as the rebuilding of the village and
cleaning up the river. It will not cover potential claims from
the families of the victims. A police investigation is under
way.
The disaster has added strain to BHPs balance sheet at an
already difficult time. Morgan Stanley expects the company
to earn just $981m in net income this year, down from
$6.4bn last year.
The company may also be forced to write down the value of
its some of its operations, including its shale gas and oil
fields in America. The price of crude has plunged from $115
a barrel in 2014 to just $33.
Rival commodity giants Glencore, Anglo American and Rio
Tinto have all suspended or cut their dividends in recent
months.
(Full article click - Times)
---
Abe Says He's Not Planning to Call Snap Poll or

Delay Tax Hike
Taken from the Bloomberg News Sunday, 21 February 2016
Japanese Prime Minister Shinzo Abe said Saturday that hes

not considering a snap general election this summer to
coincide with a scheduled upper house poll, and that he has
no intention of delaying a planned increase in the nations
consumption tax.
Speaking in an interview on Nippon Hoso radio, Abe said he
would raise the levy to 10 percent in April 2017 unless there
was a big economic shock on the scale of the collapse of
Lehman Brothers, or a major earthquake. "At this point, its
not at a Lehman-shock level, but it is necessary to keep
carefully monitoring the economy."
The worlds third-largest economy contracted in the final
three months of 2015, with the misery compounded by data
last week that showed exports in January fell the most since
2009. Wage gains have stagnated, consumer prices are
barely rising and households are reluctant to spend. This
year, the benchmark Topix index has plunged more than 16
percent and the yen has gained against the dollar amid
concerns over Chinas slowdown and U.S. growth.
Abe has fought and won three straight elections on a vow to
revive the economy with his Abenomics plan of loose
monetary policy, flexible spending and structural reform. But
the current economic woes are complicating his calculus on
whether to call a lower house election to take advantage of
a divided opposition. He neednt go to the people until
December 2018.
Abe backed the Bank of Japans new negative interest rate
policy, saying it was not the cause of the current market
turmoil. He also said that individuals deposit rates wouldnt
turn negative.
The prime minister also said he hoped to visit Russian
President Vladimir Putin at an "appropriate time," saying the
pair have "established trust." The Asahi newspaper reported
earlier this month that hed make the trip around the time
of Japans Golden Week holiday in late April through early
May.
(Full article click - BBG)

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It has been rather quiet weekend, with two topics

While most articles were negative, one report in the Sunday

David Cameron says a deal struck with EU leaders will give

Cuts in child benefit for the children of EU migrants

The amending of EU treaties to state explicitly that

A seven-year "emergency brake" on migrants' inwork benefits in cases of "exceptional" levels of

The ability for the UK to enact "an emergency

The Reckoning: Five points on which to judge

David Camerons new settlement with the EU was seven

compromise was a seven-year period neatly matching the

EU vote called today

Taken from the Times Saturday, 20 February 2016

David Cameron will call a referendum on Britains

enables me to recommend that the UK remain in the EU with

Let the big arguments over Britain in Europe

This is about nothing less than the prosperity and security of

EU referendum: An extraordinary 24 hours in

Prime Minister announces EU referendum will be held on

of Rights designed to ensure that UK sovereignty is

Jeremy Warner: The gloves are finally off for

The risk of staying in seems to be that of being repeatedly

Still, if you dont fancy risking your money with P2P

EU deal: How David Cameron took on the

Government's battle with France over protecting the City

allowed to stand in the way of their attempts to protect

All eyes on Boris Johnson over EU referendum

Mr Johnson said he would make a decision today after

Taken from the Australian Sunday, 21 February 2016

Such is the cult following of the Mayor of London,

New banking watchdog, in first eurozone-wide review, cites

Europes banks fear the CoCo market is dead

Issuance of bonds, which are designed to make banks safer,

be less enthusiastic about keeping the pressure on banks to

The gloomy stock market notwithstanding, economic growth

With faster top-line growth, corporate profits can also rise.

the home-price bubble that started to burst in 2007 is a long

forecast seems plausible if, as he expects, three factors that

CFIUS releases data on its reviews with a lag of more than a

US reviews of investments made by China

The US has been reviewing a growing number of foreign

China Moves to Dispel Doubts on Economy

China dismisses top market regulator

Chinas leaders fired a top regulator and set out specifics on

Taken from the FT Saturday, 20 February 2016

The head of Chinas securities regulator has been fired

Taken from the WSJ Saturday, 20 February 2016

Chinas chairmanship of the G-20 this year had earlier been

Research Center, a think tank affiliated with Chinas cabinet,

China Voice: Can China continue medium-high

With ample development room, solid growth foundations and

Every year over 7 million college graduates -- more than the

Billiton to slash $6.6bn payout

Taken from the Sunday Times 21 February 2016

THE worlds largest miner is set to slash its dividend as it

Abe Says He's Not Planning to Call Snap Poll or

Japanese Prime Minister Shinzo Abe said Saturday that hes

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