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Get ready for stocks to drop 25 percent: Pro - (www.cnbc.com) Once the Fed begins to truly reduce its massive bond buying program later this year, markets could see a quarter of their value wiped off the books, a private equity pro told CNBC on Friday. Jay Jordan, founder of the Jordan Company, issued the dire warning during an interview on CNBC's "Squawk Box," saying a 25 percent drop could extend to all asset classes. He blames the monetary policies of former Fed chair Ben Bernanke for artificially inflating asset prices through super-low interest rates. Lawrence Bossidy, former CEO of Honeywell, agreed with the basis of Jordan's warning, but not the numbers. He called Jordan's forecast an "alarm." "I question the depth of the decline," Bossidy said on "Squawk Box." "I don't think we're going to go down 25 percent."
Minimum wage hike's
unexpected drawback for the poor - (www.cnbc.com)
For most of us, the prospect
of a 40 percent raise in pay would probably be pretty exciting. It would mean a
big jump in disposable income, and would probably make it possible to do some
things—take that vacation, replace that old car—that weren't really in the
cards before. The current push to increase the federal minimum wage from $7.25
per hour to $10.10, however, while it would constitute a nearly 40 percent pay
raise for minimum wage workers, would almost certainly not translate into a
similar increase in their economic wellbeing. For simplicity's sake, consider a
minimum wage worker who regularly works 40 hours per week, 52 weeks per year.
This worker would earn $15,080 per year at $7.25 per hour, and $21,008 at
$10.10. That is, unquestionably, a substantial increase. But because of the way
programs to aid the poor in the U.S. are structured, that shift would cause
federal benefit payments to many minimum wage workers to be significantly
reduced. Assistance program for the poor are, by definition, income-based, so
as income rises, the payments are either reduced or, in some cases, cut off
entirely.
Spooked by defaults, China banks begin retreat from risk -
(www.reuters.com) Some
of China's struggling firms are finally getting the reception that regulators
have been hoping for - a cold shoulder from banks in the form of smaller and
costlier loans. Reuters has contacted over 80 companies with elevated debt
ratios or problems with overcapacity. Interviews with 15 that agreed to discuss
their funding showed that more discriminate lending, long a missing ingredient
of China's economic transformation, has become a reality. Up against a cooling
Chinese economy and signs that authorities
will not step in every time a loan goes bad, banks are becoming more hard-nosed and
selective about whom they lend to. There are signs that even state-owned firms,
in the past fawned over by lenders for their government connections, have to
contend with higher rates, lower lending limits and more onerous checks by
banks.
Turkey
calls Syria security leak 'villainous,' blocks YouTube - (www.reuters.com) Turkish
Prime Minister Tayyip Erdogan on Thursday denounced as "villainous"
the leaking of a recording of top security officials discussing possible
military action in Syria to the video-sharing site
YouTube. Turkish authorities ordered the shutdown of the site. Erdogan's
foreign minister Ahmet Davutoglu called the posting a "declaration of
war," an apparent reference to an escalating power struggle between
Erdogan and rivals. The anonymous posting was an audio file with photographs of
the officials involved. It followed similar releases on social media in recent
weeks that Erdogan has cast as a plot by his political enemies, particularly a
Turkish Islamic cleric based in the United States, to unseat him ahead of March
30 elections. The posting took the campaign to a higher level, impinging on a
highly sensitive top-level meeting of security officials.
Japan
to Speed Up Spending as Consumers Flash Warning: Economy - (www.bloomberg.com) Japan will speed up deployment of
government cash in coming months as a surprise drop in consumer spending in
February triggered concern the nation’s long-awaited inflation is now damaging
purchasing power. Finance Minister Taro Aso told reporters that data showing a
slump in household expenditure two months before the first sales-tax increase
since 1997 was a problem, and Prime Minister Shinzo Abe’s administration will
pour 40 percent of outlays for the next fiscal year into the April-June
quarter. He’d already pledged to fast-track stimulus spending. Data today also
showed inflationary pressures are spreading even before the 3 percentage-point
sales-tax increase take effect on April 1, as the price of durable goods soared
the most since the early 1980s. With officials striving to prevent a repeat of
the recession that followed the rise in the levy 17 years ago, the central bank
also may face calls for action.
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