TOP STORIES:
China
Steel Mills Slide as Credit Squeeze, Iron Ore Panic Grips - (www.bloomberg.com) Chinese steel companies, the world’s largest,
helped drive a regional industry benchmark index to a seven-month low as concern
builds that some mills face financial difficulty amid a government credit
squeeze.“They are having trouble accessing finance,” Yunde Li, chairman of
Ishine, a unit of ChinaZhongsheng Resources Holdings Ltd.,
which processes iron ore in Shandong, said today in an
interview in Perth. Some of Ishine’s steel mill customers cannot make their
payments to his company, Li said through a translator, declining to name the
companies. Closely-held steel mills in China are struggling to
get funding at the moment and that’s led to panic selling of iron ore,
according to Morgan Stanley. The nation’s top banking regulator said yesterday
strict credit guidelines will be imposed on mills that were big polluters and
users of energy. “The capital squeeze on steel traders has started to affect
mills,” said Henry Liu, Hong Kong-based executive director of China Merchants
Capital and head of its commodities research department. “It looks like the
credit crunch is worsening.”
How
States Are Cracking Down on Small Business Tax Cheats - (www.businessweek.com) Small businesses and the self-employed stiff
the federal government on billions of dollars (PDF) in unpaid
taxes each year, according to IRS estimates of the tax gap. That’s the
difference between taxes owed and and the amount actually collected. States
also have tax gaps: California’s is about $10
billion annually, and the Golden State is investing $670
million over five years in technology to improve its collections, expected to
raise an additional $1 billion a year in tax revenue. California isn’t alone.
According to interviews with revenue officers from 30 states published last
week by Bloomberg BNA (subscriber only), states are betting on new
compliance tools aimed at collecting billions of dollars in unpaid taxes. While
those efforts aren’t focused solely on Main Street, there are plenty of
developments small business owners would do well to keep up on. Here are four
takeaways from the BNA report:
Venezuelan
Businesses, Starving for Dollars, May Get Some Relief - (www.businessweek.com) Oswaldo Contreras is hoping that Venezuela’s
third foreign exchange system will be the charm. Contreras, who sells vitamins,
shampoos, and accessories to pet stores, has been buying dollars on the
country’s black market to pay for the products he sells, all of which are
imported. Over the last year, the black market rate has soared to more than 90
bolivars to the dollar, or roughly 14 times the official exchange rate. “What I
import isn’t regarded as a priority,” says Contreras, explaining why he has no
access to officially sanctioned mechanisms for procuring dollars. “I have no
choice but to hit the black market. I am hoping that the new auction will make
the dollar more affordable.” Venezuela plans to kick off as soon as tomorrow
the new SICAD 2 auction, which will enable companies and individuals to buy and
sell dollars under the supervision of the Central Bank of Venezuela.
Puerto
Rico Gets a Break With Rates on Its Bonds - (www.nytimes.com) Puerto Rico is expected to sell roughly $3
billion in bonds on Tuesday at interest rates that are considerably lower than
many investors in the municipal market had expected, providing a rare bright
spot for the cash-squeezed island. The lower yields, investors say, are being
driven by a combination of factors, including a recent flow of investments in
mutual funds that are large buyers of municipal
bonds, Puerto Rico’s progress in closing its chronic budget gap, its
improved financial disclosures and a general sense of relief that the
commonwealth still has access to the debt market. “There’s a very explicit,
almost to the point of jarring, acknowledgment of many problems,” said Robert
Donahue, a managing director at Municipal Market Advisors, referring to a
long-sought liquidity report issued last week by the Puerto Rican government.
“Now the commonwealth has opened the curtain.”
Copper
Slumps to 44-Month Low on Concern China Demand Is Slowing - (www.bloomberg.com) Copper reached a 44-month low in London amid
concern demand is weakening in China, the biggest consumer of the metal.
Futures traded in Shanghai touched the lowest price since 2009. The metal
slumped this week after figures showed exports from China unexpectedly fell the
most since 2009 last month. The nation’s central bank will cut reserve ratios
for lenders next quarter amid increased downside risks to the economy, Nomura
said in a report. China’s industrial output slowed in February as retail sales
sped up, economists said before data tomorrow. “The markets were spooked by the
export data, and if retail sales and industrial production come in iffy, it
won’t look good,” said Rob Montefusco, a trader at Sucden Financial Ltd. in
London.
Yellen
Job One Is Redoing Rate Guidance Without Roiling Markets - (www.bloomberg.com)
Fed set to ditch 'threshold' guidance under Yellen - (www.reuters.com)
Fed set to ditch 'threshold' guidance under Yellen - (www.reuters.com)
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