Chairman Ben Bernanke Lecture Series Part 3

Lecture Notes:

Thanks
Paul

Quote of the Day

" Inflation is a thief in the night and if we don’t act promptly and decisively we will always be behind.”

AIG and AIA

Another stock that could be active on Tuesday is American International Group(AIG) after CEO Robert Benmosche said in an appearance on CNBC that he expects taxpayers to realize a profit of $5 billion to $10 billion on their bailout investment in the insurance giant.

The shares jumped nearly 3% on Monday to close at $29.06 amid the broad market rally, and it's gained roughly 22% year-to-date. Deutsche Bank lifted its price target on AIG to $40 from $35 on Monday, saying it expects the company to ramp up repurchase activity.

"We believe that AIG is likely to buy back far more of its own shares than the market price would indicate and we believe those share buybacks happen at a pace that is far faster than currently anticipated," said the firm, which has a buy rating on the stock. "We believe $15-20 billion (or even more) worth of buybacks over the next twelve months is achievable as the Treasury and AIG sell off the remaining non-core assets. We believe BVPS book value per share growth in excess of 30% is possible if shares continue to hover around their current price."

Thats y there should be strong flow in 1299.hk today. 

Thanks

Paul

What are they indicating?

- HSBC Preliminary PMI for Mar remaining below 50

- Surprisingly large trade deficit in Feb

- Slowing growth of CPI in Feb ( 3.2% YoY v.s. 4.5% YoY in Jan)

- Reference exchange rate set by PBOC reached record high of 6.2891 RMB/USD on Friday

- GDP growth target cut to 7.5% announced earlier this month

- 2nd RRR cut in Feb since the tightening ended last year





Pete

Jim Rogers: China Slowdown Means Opportunity

“I certainly expect the world to have more of a slowdown in the next year or two, and that will be an opportunity for all of us,” he said.

While Rogers said he was long commodities, he also had a safety valve.

“Right now I’m short emerging market stocks as a potential hedge,” he said.

Rogers also remained long gold and silver.

At $1,600, gold would be a buy, he said, adding that he would increase his position even more at $1,500 per ounce.

“If it got down to $1,200 or $1,300 I hope I’m smart enough to buy a lot more,” he said, noting that it was not a prediction.

“Gold is going to go much higher — and silver — over the next decade,” he said.

via [ CNBC ]

A Gift To My Children. By Jim Rogers

A Good Book To Read By Jim Rogers

Thanks
Paul

LECTURE 2: THE FEDERAL RESERVE AFTER WORLD WAR II

Lecture  Notes: http://www.federalreserve.gov/newsevents/files/bernanke-lecture-two-20120322.pdf

Thanks
Paul

4G美夢中移動發得太早 / The Truth of 0941.HK

中移動（ 941）公佈業績前夕，多家投行忽然將中移動未來的 4G發展，當係寶，吹捧一番。此時把中移動的 4G，形容為動人的高增長故事，是過早發美夢，太有童話色彩。

市場份額收縮，增長緩慢，中移動近年面對的挑戰，與它的技術制式有莫大關係。要了解 4G何時可以出台，又是否能夠幫助中移動扭轉劣勢，免不了牽涉一些較為沉悶的技術細節。

首先，是內地 4G發牌未有耐。工信部部長苗圲上周在出席兩會會議期間，接受央視採訪時表示，中國正在進行的 4G規模試驗，已取得進展，但是距離正式商用還需要經過大規模試驗和試商用過程，發放 4G牌照或許還需要兩到三年時間。

起碼要等兩至三年

不是一年半載，是兩至三年。根據工信部過去不斷延遲放行 3G的歷史，恐怕兩至三年的時間表，也會有遲冇早。中移動即將全面進入 4G時代，真係發夢冇咁早。

中移動心急進入 4G時代，是要擺脫目前在 3G市場的下風。工信部 09年破天荒將三種不同制式的 3G牌，分配予中移動、中電信（ 728）及聯通（ 762），使到中國的流動通訊業罕有地同時存在三種制式。因為財政實力鶴立雞群，而被指派肩負起推動國產標準任務的中移動，硬啃了的國產 3G制式，不但未成熟，而且自閉，外國手機廠商的支援又遲又少，中移動客戶可選擇的 3G機種，遠遜聯通和中電信。

以最具指標作用的 iPhone為例，至今都沒有配合中移動推出國產 3G制式機款的打算，使到中移動在 3G業務的競爭上，大為落後。
中移動近幾年積極向各界力銷的 4G制式 TD-LTE，技術上是第三代流動網路的進階版。 LTE分為兩種， FDD-LTE源於歐式、美式 3G，另一種 TD-LTE則是中移動現時國產 3G制式的伸延版。兩者各有優劣， TD的優點是在同一條頻譜可以容納更多數據， FDD較適合手機網絡，語音方面做得比較好，亦相對穩定。

頻譜未定　蘋果唔會賣賬

中移動幾年來努力推動 TD-LTE成為國際標準，就是要抹去自己一家公司獨撐國產 3G制式的劣勢。不過儘管日本、波蘭、中東等地陸續有採納 TD-LTE制式的營運商，但 FDD的發展仍然大為超前， 2012年底前，全球可以提供 4G的營運商，絕大部份都是 FDD，包括美國兩大龍頭 AT&T及 Verizon。

另外，全球不少電訊商，包括香港的營運商在內，即使打算以 FDD及 TD雙軌並行，但業界分析， TD-LTE可能只是飾演大配角，專門給平板及手提電腦等疏導額外的數據流量。
中移動發展 4G所遭遇的另一個難題，是內地頻譜資源之爭。國際通用的幾段頻譜，中移動都未必可以短時間內到手，手機商未必願意特別照顧中移動。

國際幾個常用的 4G頻譜，在內地早已各有山頭。例如 2.3GHz是軍用雷達使用的波段，為免干擾，中移動只能夠在室內使用。至於 700MHZ現時屬於廣電總局，要出讓予中移動，並非易事。工信部官員亦深知問題所在，曾經幾次公開講過要重新劃分頻譜，但部委與部委的深層次矛盾，並不是一朝一夕可以解決。結果，中移動就只餘下 2.6Hz這條高頻的頻譜，以及現有的 3G頻譜，有機會轉為商用 4G頻譜。

以為在 4G時代，可以重新跟隨國際主流制式之一，手機款式問題得以解決，但頻譜問題，隨時令中移動繼續承受單打獨鬥之痛，蘋果等手機大廠，仍然會以國際的 4G波段為頻譜標準。最近美銀美林的報告便估計，蘋果盛傳於 9月推出的 iPhone 5，就算有 4G，亦未必關照到中移動，事關中移動 4G到底落戶哪條頻率，仍是懸念，而中移動建網亦需時，蘋果不會輕易將 iPhone供應給網絡未完善的電訊商。
目前，歐美盛行的 4G頻譜都與中移動有落差，蘋果無理由會為一個客，增加整體額外成本。何況，「顧全大局」一向不是蘋果的作風（最新推出的 iPad的 4G制式，也只先照顧美加的電訊商）。只要看看手執六億客戶的中移動，與蘋果談判推出 3G國產制式 iPhone，仍然沒有結果，就知道蘋果的一貫立場，所以我認為美銀美林的估計的確合情合理。

3G客被搶　盈利添壓

外界又曾憧憬，美國高通（ Qualcomm）將於今年第二季推出的萬能芯片，即是支援所有 3G及 4G制式的芯片，會改變國產制式被孤立的局面。但美銀美林引述行業消息指出， TD部份測試仍然需時，看來中移動要寄望高通的科技可以解困，還要等一段時間。

我預見，中移動未來兩年在吹噓 4G的同時，將不斷被同業搶去 3G新客， 2G減價競爭越來越激烈，亦會開始反映在業績上。中移動的市盈率雖然只有 12倍，在未來兩年，核心盈利甚至有倒退的可能。中移動未來兩至三年面對的挑戰，也許還是被低估了。
外界對中移動 4G的寄望，似乎來得太早了。事實跟幻想，往往有段距離。

via [ Apple Daily ]

LECTURE 1: ORIGINS AND MISSION OF THE FEDERAL RESERVE

Lecture Notes: http://www.federalreserve.gov/newsevents/files/bernanke-lecture-one-20120320.pdf

Thanks Paul

Ben Bernanke Back To School

In March 2012, Chairman Ben S. Bernanke will deliver a four-part lecture series about the Federal Reserve and the financial crisis that emerged in 2007. The series begins with a lecture on the origins and missions of central banks, followed by a lecture that will discuss the role and actions of the Federal Reserve in the period after World War II. In the final two lectures, the Chairman will review some of the causes of, and policy responses to, the recent financial crisis, focusing specifically on the actions of the Federal Reserve.

Lecture 1: Origins and Mission of the Federal Reserve

Watch live on March 20, 2012 12:45 p.m. ET

Lecture 2: The Federal Reserve after World War II

Watch live on March 22, 2012 12:45 p.m. ET

Lecture 3: The Financial Crisis and the Great Recession

Watch live on March 27, 2012 12:45 p.m. ET

Lecture 4: The Aftermath of the Crisis

Watch live on March 29, 2012 12:45 p.m. ET

Live video of each lecture will be available to the public at http://www.ustream.tv/federalreserve . 

Transcripts and video recordings will be made available following each lecture. 

Thanks

Paul

Why Apple Will Hit $1,650 by the End of 2015?

Why Apple Will Hit $1,650 by the End of 2015

-few days ago, a posted video suggested Apple will hit $700 mark. Now, people are talking about 3 years down the road.
-the article has its points, in an ideal scenario?  i can foreseen Apple is going to diversify its technology slowly and get into iTv and iAd and iPay... but hummm... too optimistic? 
-interesting to read some of the comments people wrote:
 >"What is extraordinary is that with this huge growth potential analysts consensus forecasts are for Apple’s earnings growth to slow dramatically, to o% in 2015. This was Zacks’ consensus EPS growth forecasts on 27 Feb 2012:
Sep. 2012: 54.7%
Sep 2013: 11.7%
Sep 2014: 7.5%
Sep 2015 0%
Current Apple share price is based on these ridiculously conservative forecasts, which just goes to show why Apple’s shares are such good value"
>Apple could do a stock split. 
>"this BULL market is artificial, have you seen the volume, most of the volume is in $AAPL"

Thanks
Lawrence Tsang

The most controversial questions posed to Fed Chairman Ben Bernanke at his lecture to George Washington University students today focused on one topic: gold.
While acknowledging the long history of the gold standard and its importance in the development of central banking, Ben Bernanke made crystal clear that we're never going back to the gold standard.
He explained that the argument supporting the gold standard has two parts: 1) the "desire to maintain the value of the dollar"—implying a "desire to have very low price stability, and 2) an aversion to allowing "the central bank to respond with monetary policy to booms and busts," explaining that "the advocates of the gold standard don't want to give the central bank that power."
But regardless of the impetus for these arguments, he explains, a return to the gold standard now "would not be practical for monetary reasons or policy reasons":
Bernanke pointed out various reasons that there's simply "not enough gold" to sustain today's global economy. First, extracting gold from the ground is a costly and uncertain endeavor. There is a limited amount of gold in the world, and it just doesn't make sense in the modern world for central or commercial banks store large amounts of gold in vaults. The size of the gold supply and inconvenience of the metal renders it too impractical to keep up with the pace of global commerce.
Second, while advocates of the gold standard are right that prices remain stable in the long-term, "on a year to year basis, that's not true." Limited supplies of gold—or changes to the supply of gold—cause prices of goods to be volatile in the short-term, regardless of long-term price stability.
In a rebuttal to the second part of that argument, Bernanke explained, "the commitment to the gold standard is that no matter how bad [the economy gets] we're going to stick to the gold standard."
He pointed to a substantial tome of economic research finding that the gold standard aggravated the Great Depression, saying "the gold standard was one of the main reasons the Great Depression was so bad and so long." The inability of the Federal Reserve to control monetary policy—open up credit, address unemployment, and drive business demand—left it with much less power to avert or mitigate the decade-long crisis. Bernanke added that countries not tied to the gold standard also had a much easier time getting out of the Depression. In the modern world, he said, "we've seen that problem with various kinds of fixed exchange rates."
Ultimately, he concluded that the gold standard hasn't really worked since the end of WWI. "Economic historians argue that after World War I the labor movements became much stronger," so we consequently saw, "much more attention to employment and business cycles." That prevents our economies from suffering exaggerated boom and bust cycles, and allowed the Fed to mitigate the effects of the recent financial crisis.
Sorry, Ron Paul. We think Bernanke just destroyed your position.

Read more: http://www.businessinsider.com/ben-bernanke-explains-why-well-never-see-another-gold-standard-2012-3#ixzz1pkqlDsFF

China fear hits miners.

CANADA STOCKS-TSX down as China fear hits miners, Viterra slips
-a slight slow down in China with a decline in expected growth in 2012
-therefore, less demand in commodities? copper/gold/oil and gas/potash seem to be the major ones to sustain a developing country. 
-few major commodities companies stocks dropped.

Thanks
Lawrence

Apple May Climb Above $700 as IPad Sales Begin, Analysts Say

http://www.bloomberg.com/news/2012-03-14/apple-may-climb-above-700-as-new-ipad-sales-begin-analysts-say.html

Pete

Wen's last press conference

• "We will step-up exchange rate reforms," he promised, adding that recent activity in Hong Kong currency derivatives markets signaled the value of the yuan "is possibly near an equilibrium level".

• "Economic development has also produced unfair distribution, a lack of trust, graft and other problems," Wen said. "I'm deeply aware that solving these problems needs the advance of political system reform, as well as economic system reform, and especially reform of the leadership system of the party and state." 

• Many analysts said it seemed unlikely that any major reforms would be delivered ahead of a leadership handover, which is scheduled to begin towards the end of this year when Hu and Wen retire from their posts in the Communist Party.

• Wen said home prices, which have started to decline after soaring 10-fold in the last decade, remained "far from returning to reasonable levels".

• Softer property prices have stopped local authorities from selling land to raise money needed to service debts. Economists believe that some 20 to 30 percent of those loans may to turn sour, which could cripple the banking system. But Wen said the debt risks were manageable.

Read more :

http://www.reuters.com/article/2012/03/14/us-china-npc-wen-idUSBRE82D07320120314

Pete 

go for LG?

(Reuters) - Flat screen maker LG Display Co Ltd is supplying touch-screen panels for Apple Inc's new iPad, a source close to the matter said on Wednesday.
Bloomberg reported earlier that Samsung Electronics Co Ltd was the sole supplier for the new iPad, launched last week, after LG and Japan's Sharp Corp failed to meet the U.S. company's quality requirements, quoting an analyst from research firm iSuppli.
"LG is also in a panel supply deal with Samsung for the new iPad," the source said.
The source was not authorized to speak to the media and declined to be identified.

Thanks
Mike

REE: Rare Earth Elements

EU Joins U.S., Japan in Challenging China’s Rare-Earth Export Restrictions

REE: Rare Earth Elements example: tungsten, molybdenum, dysprosium, terbium, europium, neodymium and yttrium
Usage: clean-energy technologies such as wind turbines and solar panels

Notes from article:
- China produces at least 90 percent of the world’s rare earths, 17 chemically similar metallic elements used in Boeing Co. (BA) helicopter blades, Nokia Oyj (NOKIA) cell phones, Toyota Motor Corp. hybrid cars and wind turbines.
- China’s policy goal is to protect resources, environment, not to distort market or guard industry, the country’s Ministry of Commerce said in statement on website.
- The U.S.-China trade deficit widened to $295 billion last year and the imbalance is a main source of friction between the two countries.
- We all thought that China was being unfair,” Moreno said.


Another article discussed the same topic
China’s rare earth monopoly challenged
-Foreign companies pay up to twice as much as Chinese firms for rare earth metals, the EU says.
“These restrictions… benefit Chinese industry,” the official said. “Therefore they are against WTO rules.”
The EU directly imports 350-million euros worth of rare earths from China each year,
-China accounts for about 97% of the world’s output of the 17 rare earth metals, which are crucial for global electronics production and the defence and renewable-energy industries


Thoughts:
-it is surprisingly to see China actually is the main producer of REE instead of being the consumer, since they have always been the major consumer in natural resources like copper and gold.
-the commodity prices and its demand and supply has been strongly linked with politics between countries, like how could China and US achieve a "fair" trade situation. What is fairness? When did trade and business become non-beneficial?
-it is interesting to see China has a policy goal to "protect resources, environment, not to distort market or guard industry",  what regulation and law have they enforced?

Thanks
Lawrence

Asia Week Ahead: Japan, India Rates In Focus

Japan: Interest Rate, Asset Purchase (Tuesday) 
India: Interest Rate (Thursday), Federal Reserve Budget Deficit (Friday)
China: Meeting WrapUp
HK: China Mobile (Thursday), Tencent Holdings Ltd.(Wednesday)  

Thanks
Paul Ng

Europe Focus

The Greek government on Friday announced that 83.5% of its private-sector creditors agreed to a bond-swap deal, moving Greece closer to securing a crucial second bailout, which could get finalized next week.

Because the rate was short of 90%, Athens exercised collective-action clauses to force more bondholders to participate. That move prompted the International Swaps and Derivatives Association committee to declare a “restructuring credit event,” which triggers a payout of some $3.2 billion in CDS on Greek debt.

All 15 members of an International Swaps and Derivatives Association committee — consisting of big banks like Goldman Sachs and J.P. Morgan, and investors like Elliott Management and PIMCO — ruled the move a “restructuring credit event.” ISDA will hold an auction on March 19 to determine how much will be paid out on CDS contracts.

As of last week, the net exposure on CDS was $3.2 billion. So if the auction showed the recovery value to be 25%, then 75% of the $3.2 billion, or $2.4 billion, would be paid out to owners of CDS.

In a conference call Friday, ISDA Chief Executive Officer Robert Pickel said he does not see a significant impact on the financial market from the Greek default and that most of the Greek CDS exposure is collateralized.

Both euro-area finance ministers and the International Monetary Fund will hold meetings next week to seek formal approval on the bailout package.

via MarketWatch

US Focus

The FOMC announcement  (13 March) 

• FOMC policy meeting is expected to leave rates unchanged. 
• Market focus will be on comments on changes in the relative strength of the economy, changes in inflation worries, and whether the Fed is willing to undertake new options.
• Market expectations likely were raised by the March 7 Wall Street Journal article (unnamed sources) stating that the Fed is considering "sterilized" buying of long-term bonds-shifting the average maturity of the Fed's holdings and offsetting the longer-term purchases with sales elsewhere on the balance sheet.
• But several District presidents oppose QE3 and likely will raise questions about this new idea. Key questions likely would be whether the Fed will lose money on these transactions as interest rates rise. And if the Fed will lose money, will that impede how quickly the Fed can unwind its balance sheet as the economy eventually heats up. And even will potential Fed losses have an impact on the federal deficit (annual Fed profits are handed over to the Treasury). The cost/benefit analysis for the alleged new Fed option may not play out well.

Producer Price Index (15 March) 

• The PPI rebounded 0.1 percent in January, following a 0.1 percent dip the prior month. The core PPI jumped 0.4 percent, following a 0.3 percent rise in December. By major components, energy declined 0.5 percent in January, following a 0.4 percent decrease. Food decreased 0.3 percent in the latest month. Upward pressure in the core came from pharmaceuticals, light trucks, and tobacco products.

Consumer Price Index (16 March)

• The consumer price index in January rose 0.2 percent, following no change in each of the prior two months. Excluding food and energy, the CPI firmed to a 0.2 percent increase from December's 0.1 percent increase. Energy rose only 0.2 percent, following a 1.3 percent decrease in December. Food price inflation held steady at 0.2 percent. Within the core, upward pressure came from apparel, recreation, tobacco, and medical care. In contrast to these increases, the index for used cars and trucks declined for the fifth month in a row and the index for airline fares dipped in the latest month

From Bloomberg

ROBERT SHILLER: This Might Be The 'End Game' For Falling Home Prices

• Anyone who follows Robert Shiller closely knows that it's hard to get him to commit to calling a bottom in the housing market, which continues to see prices fall.
• "I just don't see any scientific way to be assured what it's going to do," he told CNBC in an interview today. This is coming from the same economist who predicted the housing bubble in the second edition of his book Irrational Exuberance.
• However, his tone seems to have turned a bit more optimistic.
• "It could turn around," Shiller told CNBC's Brian Sullivan.  "We're seeing some good news now.  Starts, permits, confidence, the NAHB housing index is strikingly up.  It's still low, but it's up."
• CNBC's Mandy Drury pursued the matter further:  "Where is the endgame, Robert?"
• "Well, in terms of housing, we might be at the end game," Shiller responded. "Home prices are back to a normal level. They could just stay here, and that would be all right, right?
• "Housing is very affordable, interest rates are down, prices are down to kind of a normal level. They haven't overshot normal. So maybe in terms of housing, this it it. This is it."
• "Did you just say this may be the bottom?" asked Sullivan.
• "It might be, yeah," answered Shiller. "Things can turn quickly and sharply. It's too soon to tell."
• So, he's willing to admit that it might be a bottom.  But still, he's reluctant to commit.

Read more: http://www.businessinsider.com/robert-shiller-end-game-home-prices-2012-3?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=Money%20Game%20Select&utm_campaign=MoneyGame%20Select%202012-03-10#ixzz1ogRkLuGh

An Interesting Article About Tips For Success From Li Ka-shing

8 (Genuine!) Tips For Success From Asia's Richest Man Li Ka-shing

8 points from the article:

• As a leader, one should spend more time than others planning for the future.
• I do not get overly optimistic when the market is good, nor overly pessimistic when the market is down.
• A good reputation for yourself and your company is an invaluable asset not reflected in the balance sheets.
• It doesn’t matter how strong or capable you are; if you don’t have a big heart, you will not succeed.
• To be a successful manager, attitude and ability are equally important ingredients. A leader inspires others to greatness. A boss dominates his subordinates and makes them feel small.
• Though a universal formula for success is difficult to come by, caution signs for failure are posted everywhere. Establishing a structure that serves to minimize failure will prove to be a shortcut to success.
• Successful managers should also have a keen eye for talent. They not only select people who are smarter than themselves, but also avoid picking corporate superstars whose reputation precedes them.
• The art of good management lies in the capacity to accept change, and the ability to meld new and traditional thinking.

–from the Li Ka Shing Foundation

China's Economy Should See 'Soft-Landing'; Supportive For Base Metals

China's Economy Should See 'Soft-Landing'; Supportive For Base Metals – Scotiabank

- an article from PDAC 2012, Prospectors & Developers Association of Canada's annual convention, one of the bigger convention of mining industry which will end today, Wed.
- China represents 42% of global demand for the four main base metals: copper, zinc, nickel and aluminum...which is a great number for a single country.
- Demand of metals in China has a great potential to grow based on new adjustments in political and social plan in China:
>China's plan to build more housing for lower-income citizens will offset the decline in private sector housing.
>a top Chinese banking regulator said recently that municipal governments, which have seen mounting debts, can roll over bank loans as long as projects are 60% complete. She said when that announcement came out, copper prices rose sharply, which underscores the importance the Asian nation has to the red metal.
>China's National Development Reform Commission said government-led infrastructure projects will rise 15%-20% in 2012
few trends:
- The recent trend of rising auto sales
- governments are seeking more revenue from resources and inflation.


how long would this trend sustain? as long as China keeps growing?

Thanks
Lawrence

Unhealthy but better than unreal

YUM brand, the company that owns KFC, Pizza Hut, Taco Bell..... is currently at its' 52 week high ($66 +). This company has been expanding its' business in PRC rapidly in the past two years. With the 2011 annual report coming up, I expect the company to continue to do well in the Asia geography (China). China has the world's biggest population. The younger generation in China have more exposure to the western culture in the past 10 years. They start to watch European soccer, play American basketball and eat Western food. Also, China does not have great food standards. You often will hear the news saying food manufacturers producing fake food. Even if you go to a high end restaurant, there is still a chance that the restaurant will give you something "nasty". Thus, this brings better business to these western franchise restaurants. Even though fast food may be unhealthy, they are still better than a lot of places around the city. As a result, I believe YUM will make another amazing profit from China area and will beat the estimate of investors. I encourage to purchase some shares even at this price.

Thanks
Mike

Barack Obama on Jeremy Lin

Thanks
Paul

2 MIN 沽100K 張 期金

Thanks
Desmond