Daily Archives: Jun 7, 2012

Call it what you like: “green lettuce”“fresh avocado” or “your Benjamin”. Just don’t use the word “dollar” when talking about any value of Venezuela’s currency, the bolivar, other than the official one.

Although there are eccentrically-named Venezuelan websites that do dare to track the black market exchange rate, which fell to record lows this week, on the whole it’s best not to talk about it at all – the government is likely to take a dim view. Read more

For those trying to make sense of China’s surprise rate cut on Thursday, there is a classic glass half-empty, half-full feeling.

On the one hand, by cutting interest rates by 25 basis points, Beijing is sending a clear message that it is serious about tackling the country’s slowing growth. And indeed, markets reacted positively, with equities and commodities rallying on hopes that China will refuel the investment engine enough to help the global economy muddle through its current doldrums.

But China bulls shouldn’t get too excited yet. The timing of the announcement – coming just two days ahead of a raft of May data releases – also seems to suggest that the economy is retrenching much faster than anyone in Beijing expected. Read more

Is it 2008 all over again? Argentine farmers are on strike and global crisis is in the air.

Like in 2008, Cristina Fernández was early into her term. And just like in 2008, she faced mid-term elections the following year (in which the government fared poorly). This time, some commentators see her pulling out all the stops to do well in the mid-terms to pave the way for rewriting the constitution to stay on for a third term, despite economic slowdown and hints that she wants a new generation to take over. Read more

South African corporates are feeling the double whammy of policy uncertainty at home as the African National Congress gears up for a key conference this month, and the eurozone crisis weighing heavily on manufacturers and general sentiment.

A report on Thursday from the South African Chamber of Commerce described the situation as “Harsh Economic Realities” as it released data that showed business confidence in Africa’s largest economy had hit a 10-year low. Read more

There is always a danger in using the word “inevitable”. Take the development of shale gas in central and eastern Europe.

It’s all very well KPMG describing it in such terms. Of course almost all of the countries in the region want affordable energy, but that’s not how some of the locals see it. The ‘Nimby’* contingent, aided by modern technology, are very active in the region. And politicians are taking note. Read more

Others may worry that the Chinese economy is on rocky foundations, but not Deloitte Touche Tohmatsu, which has decided to invest another $160m in the mainland over the next three years – notwithstanding concern about economic growth, or Beijing’s plans to localise the foreign auditing firmsRead more

Electronic highway billboards usually confine their information to grim news about traffic jams and road temperatures, but on Thursday those on the road leading out of Warsaw had an altogether happier message: “The A2 is open all the way to Berlin!!!”.

Working under enormous public and government pressure, contractors building the final sections of Poland’s east-west A2 highway managed to open the road to traffic just before midnight on Wednesday. Read more

Chinese investments in Europe tripled in 2011, and could reach as much as $250bn-$500bn by 2020, the FT reported on Thursday. Is China taking over corporate Europe? Read more

Here we go… China has cut its lending rates for the first time since 2008, dropping the benchmark one-year lending rate to 6.31 per cent, while the one-year deposit rate is 3.25 per cent. The 25 basis points cut was a surprise – the consensus among economists polled by Reuters was for rates to be held.

China has previously cut the required reserve ratio by 150 basis points over the last nine months, which reduces the amount of cash and deposits Chinese banks have to hold against loans. Read more

* Brazil inflation falls near two-year low

* China investment in Europe triples

* Mittal to reduce China steel ambitions Read more

Cars, computers, now food. Until Bright Food bought the British cereal maker Weetabix last month, the “food and beverage” category had yet to join in the trend of Chinese consumer companies making western acquisitions.

But as the growth prospects in the food market go down, and the competition in the market intensifies, the cereal deal may mark a turning point for the Chinese food industry. Read more

Thursday’s thoughts from the BB team: a fading revolution in Egypt; Russia unites with China and divorces BP; and India’s confusing online war and offline slump. Plus: Brazil’s biggest rubbish dump closes; and how (un)welcome are foreigners in China? Read more

With tensions rising in the South China sea, gung-ho investors may be looking to add a bit of firepower to their portfolio.

Nomura, the Japanese investment bank, says an “Asian arms race” is sweeping nations from China to Australia, a structural theme that could provide a lucrative opportunity for investors. Read more

By Anoop Singh and Laura Papi of the IMF

India’s macroeconomic landscape continues to be challenging. Growth has slowed, while the current account deficit has widened, and inflation is still above the Reserve Bank of India’s comfort zone. We are forecasting growth to recover modestly in 2012/13 from 6.5 per cent in 2011-12. Can India still make it happen? And what would it take? Read more

Readers of The Big Short will recognise this once-fashionable trick of financial engineering: 1) Take some debt rated BBB, BB+, and A-. 2) Bundle it together. 3) Get it rated AAA 4) Flog it to investors.

Recent reports from China suggest that this technique is beginning to catch on among the most cash-strapped of businesses: SMEs. Read more

* Brazil inflation falls near two-year low

* China overseas investment grows

* Beijing dims the lights on data for investors Read more