Junk
Yield Premiums Soar on China’s Looming First Default - (www.bloomberg.com) The
extra cost to borrow for China’s riskiest companies is at the highest in 20 months
as soaring interest rates heighten concern the nation will experience its first
onshore bond default. The yield gap on
five-year AA- notes over AAA debt jumped 27 basis points last month to 224, the
most since June 2012, Chinabond indexes show. Ratings of AA- or below are
equivalent to non-investment grades globally, according to Haitong Securities
Co., the nation’s second-biggest brokerage. The similar spread in the U.S. is
403 basis points, Bank of America Merrill Lynch data show. The failure of coal
companies to meet payment deadlines for trust products has increased concern
over debt defaults, with the equivalent of $53 billion of bonds sold by
renewable energy, construction materials, metals and mining companies due in
2014. A report on Jan. 30 signaled China’s factories are contracting for the first
time since August amid signs of financial stress including mounting losses and
bailouts.
Italy
Banks May Face Up to $20 Billion Capital Gap, ABI Says - (www.bloomberg.com) Italian banks,
which have raised money, sold assets and cut costs to boost capital, may face a
shortfall of as much as 15 billion euros ($20 billion) as regulators scrutinize
their balance sheets this year. “We are confident that the Italian banks will
pass the stress test exercise without major problems,” Giovanni Sabatini,
general manager of the Italian banking association, said in an interview in
Rome. He agrees with an estimate made by the Bank of Italy of a potential
capital shortfall of 10 billion euros to 15 billion euros. “That’s manageable.”
Global-Warming
Slowdown Due to Pacific Winds, Study Shows - (www.bloomberg.com) Stronger
Pacific Ocean winds may help explain the slowdown in the rate of global warming
since the turn of the century, scientists said. More powerful winds in the past
20 years may be forcing warmer seas deeper and bringing cooler water to the
surface, 10 researchers from the U.S. and Australia said yesterday in the
journal Nature. That has cooled the average global
temperature by as much as 0.2 degree Celsius (0.36 Fahrenheit) since 2001. Scientists
have been trying to find out why the rate of global warming has eased in the
past 20 years while greenhouse-gas emissions have surged to a record.
Yesterday’s paper elaborates on a theory that deep seas are absorbing more
warmth by explaining how that heat could be getting there.
And
now it's global COOLING! Return of Arctic ice cap as it grows by 29% in a year - (www.dailymail.co.uk)
- 533,000
more square miles of ocean covered with ice than in 2012
- BBC
reported in 2007 global warming would leave Arctic ice-free in summer by 2013
- Publication
of UN climate change report suggesting global warming caused by humans pushed
back to later this month
A chilly Arctic summer has left 533,000 more square miles of ocean covered with ice than at the same time last year – an increase of 29 per cent.
A chilly Arctic summer has left 533,000 more square miles of ocean covered with ice than at the same time last year – an increase of 29 per cent.
The rebound from 2012’s record low
comes six years after the BBC reported that global warming would leave the
Arctic ice-free in summer by 2013.
Instead, days before the annual autumn
re-freeze is due to begin, an unbroken ice sheet more than half the size of
Europe already stretches from the Canadian islands to Russia’s northern shores.
Turkey
Struggles to Protect Its Lira - (www.nytimes.com) It was
late afternoon in Istanbul. But seven time zones away, on Wall Street, the
opening bell was ringing. Seconds later, in a dingy alley of Istanbul’s vast
Grand Bazaar, several dozen men with cellphones pressed to their ears began
gesturing and shouting loudly. They were currency traders, who every day buy
and sell tens of millions of dollars, euros and Turkish liras in a narrow space
that is sheltered by a sagging blue-striped canopy and furnished with an old
refrigerator and a few plastic stools. The traders had been noisily plying
their craft since early morning. But when they learned from the television screens
inside the nearby gold shops that the Dow Jones industrial average had opened
higher in New York, the trading turned even more tumultuous. The dealers locked
in or unwound their bets on which direction the dollar would head in relation
to the Turkish lira.
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