Thursday September 24 Housing and Economic stories

TOP STORIES:

Franklin Templeton suffers record outflows - (www.ft.com) Analysts are slicing their earnings forecasts for Franklin Templeton, as the US asset management group wrestles with some of the worst outflows from its mutual funds in its history. Investors pulled more money from the Templeton Global Bond fund, run by emerging markets trader Michael Hasenstab, in August than in any previous month, while Franklin's global equities business has now suffered 16 consecutive months of outflows. Shareholder concern centers on several major Franklin funds' exposure to emerging markets, and on the company's heavy reliance on retail investors, who are quicker to pull their money in volatile markets. "This is an asset manager that is more leveraged than others to emerging markets," said Glenn Schorr, analyst at Evercore ISI Group. "Usually that is a good thing. Now it is a bad thing. What they happen to have most of, is what has gotten beaten up the most."

The Fate Of The Bursting Tech Bubble Is In The Hands Of Just One Company - (www.zerohedge.com) In a world in which everything is up if only one excludes all the things that are down, a favorite pastime of "strategists" has become announcing how high S&P500 earnings would beif only one excluded energy companies... and the impact of the dollar... and China's economic slowdown... and the Emerging Markets currency crisis... and the [cold|hot|just right] weather... and rising labor costs... and everything else that stands between revenue (non-GAAP of course, just ask Tesla) and the bottom line. What if one does the inverse: what if instead of eliminating the worst performing sectors (and all other factors that detract from performance in a priced to centrally-planned perfection world) one eliminates the biggest company in the world, Apple? The result is troubling. As can be seen in the chart below, when it comes to second quarter earnings, Apple made all the difference in the world, literally, between gains and losses for what was otherwise one of the "best" performing sectors. In fact, AAPL provided a whopping 6% swing in IT sector EPS for Q2, pushing them from down 1.5% Y/Y without AAPL to +4.4% with AAPL.

Record percentage of Asian companies destroying shareholder value - (www.ft.com)  A record percentage of Asian companies are destroying value for their shareholders, in a sign of the increasing strains caused by the region’s slowing economies and as the prospect of higher US interest rates looms. A total of 38 per cent of companies in the region — excluding Japan — return less on their invested capital than those funds cost them in the first place, according to analysts at CLSA, the regional brokerage. The percentage burning through cash — 13 per cent — is also at a three-year peak, while a fifth are borrowing to pay dividends. The study, of the 2,500 biggest companies in Asia-Pacific outside Japan, comes as company watchers raise the alarm about the quality of financial reporting, notably in Hong Kong. There, the number of warnings that auditors have made about the health of companies has risen sharply. The number of profit warnings to the city’s stock exchange is also rising fast, with 1,285 filed so far this year; the highest by this point in the calendar in the eight years for which data are available.

UniCredit plans to cut around 10,000 jobs: source - (www.reuters.com) Italy's biggest bank by assets, is planning to cut around 10,000 jobs, or 7 percent of its workforce, as it seeks to slash costs and boost profits, a source at the bank told Reuters on Monday. The planned cuts will be concentrated in Italy, Germany and Austria, several sources said, adding that they include 2,700 layoffs in Italy that have already been announced. A UniCredit spokesman declined comment beyond noting that the bank's CEO Federico Ghizzoni had on Sept. 3 said there were no concrete numbers on potential lay-offs, after a report said it was considering eliminating 10,000 positions in coming years. Ghizzoni is reworking a five-year strategic plan, unveiled only last year, that will aim to boost revenue and cut costs. The revised plan is expected to be announced in November. "The plans are for 10,000 job cuts," the bank's insider said, speaking on condition of anonymity. "They will be mainly in Italy, Austria and Germany."

Deutsche Bank Plans to Cut About 25% of Jobs  - (www.reuters.com) Deutsche Bank AG, Germany’s largest lender, is considering cutting about 23,000 jobs, or almost one quarter of its workforce, Reuters reported, citing unidentified people in the finance industry. The bulk of the reductions will come mainly from technology operations and the sale of its Deutsche Postbank AG unit, Reuters said. Deutsche Bank employed 98,647 people at the end of June, including 14,940 at Postbank, a German consumer lender, according to its filings. Klaus Winker, a spokesman for Deutsche Bank in Frankfurt, declined to comment. Co-Chief Executive Officer John Cryan, 54, who replaced Anshu Jain in July, is pressing ahead with the bank’s plan to bolster profitability by reducing expenses and cutting back businesses. On his first day in the job, he pledged to sell the Postbank unit, as outlined in April, and tackle the company’s “swollen” cost base and “antiquated and inadequate” technology.

OTHER STORIES:

China unveils details of state-firm reform as growth sputters - (www.reuters.com)
Fed to dominate week of central bank meetings - (www.reuters.com)
The Fed’s Policy Mechanics Retool for a Rise in Interest Rates - (www.nytimes.com)
German carmakers party under China cloud - (www.reuters.com)
Germany’s export machine braced for China slowdown - (www.ft.com)

Record percentage of Asian companies destroying shareholder value - (www.ft.com)
China Official Says Hong Kong Chief Above Judiciary, Legislature - (www.bloomberg.com)
Russia's Lavrov says Moscow to continue military support of Syria: reports - (www.reuters.com)
Clashes, militant bombing, kill nine in southeast Turkey - (www.reuters.com)