1 China solar bond default may trigger global tremors
(Linda Yueh on BBC) Not big news for most countries, but China has had the
first ever default of a corporate bond. Chaori Solar, a solar equipment maker,
can't afford to pay 89.9 million RMB ($14.7m) in interest due on a one billion
RMB bond issued in March 2012. It's the first default of publicly traded debt
in China since the government started regulating in 1999. Although small, it
could send tremors through not just China but global markets.
Normally
when a company warns that it can't afford a payment, it's viewed as a worrying
development. For China, though, attitudes are sanguine as this is viewed as a
test case for how the government will deal with what should be a normal
procedure. For China, which didn't have much of a corporate bond market until
recently, this is new. But, the market in corporate debt has grown quickly in
the past decade, reaching an estimated $12 trillion by the end of last year.
As Chaori
Solar is a corporate bond issued by a struggling company and not a product of
the shadow banking system like a trust, some observers would like to see market
forces work. Otherwise, it's hard to see how financial markets can expand and
deepen as the government cannot feasibly stand behind all capital markets
unlike what it has done so far in the banking system.
The
challenge for financial reform is that the sequence of policies matters.
Allowing default may well help develop the market, but the questions that it
could raise about the rest of the financial system, namely the banks and shadow
banks, may be a step that the Chinese government would rather not tread. A
junk-rated bond could have wider repercussions beyond China.
http://www.bbc.com/news/business-26478382
2 Why Russia can't afford another Cold War (James B
Stewart in The New York Times) It’s no wonder the crisis in Ukraine this week
drew comparisons to Hungary in 1956 and Czechoslovakia in 1968 or that a chorus
of pundits proclaimed the re-emergence of the Cold War. But there’s at least
one major difference between then and now: Moscow has a stock market.
Under the
autocratic grip of President Vladimir Putin, Russia may be a democracy in name
only, but the gyrations of the Moscow stock exchange provided a
minute-by-minute referendum on his military and diplomatic actions. On Monday,
the Russian stock market index, the RTSI, fell more than 12 percent, in what a
Russian official called panic selling. The plunge wiped out nearly $60 billion
in asset value.
Mr. Putin
seems to be “following the old Soviet playbook,” in Ukraine, Strobe Talbott, an
expert on the history of the Cold War, said this week. “But back then, there
was no concern about what would happen to the Soviet stock market. If, in fact,
Putin is cooling his jets and might even blink, it’s probably because of rising
concern about the price Russia would have to pay.” Russia is far more exposed
to market fluctuations than many countries, since it owns a majority stake in a
number of the country’s largest companies.
Gazprom,
the energy concern that is Russia’s largest company by market capitalization,
is majority-owned by the Russian Federation. At the same time, Gazprom’s shares
are listed on the London stock exchange and are traded over the counter as
American depositary receipts in the US as well as on the Berlin and Paris
exchanges. Over half of its shareholders are American, according to JP Morgan
Securities. And the custodian bank for its depository receipts is the Bank of
New York Mellon. The old Soviet Union, in stark contrast, was all but
impervious to foreign economic or business pressure, thanks in part to an
ideological commitment to self-sufficiency.
By
contrast, today Russia is seen to be too weak and vulnerable economically to go
to war. The energy boom is considered over, and Europe can turn the tables on
Russia after its prior gas supply cuts in 2006 and 2009. Europe can replace
this gas with liquefied natural gas, gas from Norway and shale gas.
During
the Cold War, there were few, if any, Russian billionaires. Today, there are
111, according to Forbes magazine’s latest rankings, and Russia ranks third in
the number of billionaires, behind the US and China. The billionaire Russian
elite — who are pretty much synonymous with Mr. Putin’s friends and allies —
are the ones who would be severely affected by visa bans, which were imposed by
President Obama on Thursday.
http://www.nytimes.com/2014/03/08/business/why-russia-cant-afford-another-cold-war.html?ref=business&_r=0
What I never saw coming was this bizarre situation in which the fields that you'd think of as the most modern, the most cutting edge – tech, physics, engineering – were replicating working conditions so sexist they make Mad Men look like Spare Rib. Not only are there no women to start off with in this area, but the ones there are leave.
Dr Anna Zecharia, from Science Grrl (set up to get more girls into science), thinks there's been a change in gender stereotyping; things are moving, fast, in the wrong direction. "If you look at the gender marketing of toys, sexual objectification of all women, boxing people in to very narrow, old-fashioned gender models, everything in my culture values my physicality above all my other attributes." It's hardly surprising, then, that girls persistently underperform in what they call "self-efficacy tests" (how good you think you are), compared to their performance in, well, everything else.
Universities have a case to answer, too. I have heard a story about how the computer science teams had to be allocated handicaps, and were given one AI student and one girl. In Edinburgh university, this century. A geophysicist (who wished to remain anonymous) said: "When you're a female science student, it's a bit like being a professional woman in the Middle East. You're neither male nor female. You're a third sex, to them."
http://www.theguardian.com/world/2014/mar/07/female-techies-stone-age-work-culture-sexist
4 India's young voters and old leaders (Khaleej Times) With 100 million new voters, almost a quarter of whom are in the 18-19 age group, Indian political parties will have to dramatically rejig their manifestos for the forthcoming elections. Though parties such as the Congress and the BJP are projecting ‘younger’ leaders such as Rahul Gandhi (who is 43) and Narendra Modi (at 63, he is well beyond the retirement age for most Indians), the political outfits continue to be in the stranglehold of gerontocratic apparatchiks, most of who are clueless about the needs and aspirations of the young.
Many of
the regional parties are also dominated by leaders in their ‘70s and ‘80s, who
are loath to let the younger generation take control of their outfits. In Uttar
Pradesh, the largest state which accounts for 80 of the 543 seats in the lower
house of parliament, 74-year-old Mulayam Singh Yadav is reluctant to give
Akhilesh, his son (who is the state’s chief minister) the freedom to run his
administration as he desires. Down south in Tamil Nadu, both the Dravidian
parties are headed by ageing and dominating leaders — M. Karunanidhi, 89, of
the DMK, and J. Jayalalithaa, 66, of the AIADMK, who is also a prime
ministerial aspirant.
The
average age of the UPA cabinet, headed by Prime Minister Manmohan Singh (who is
a ripe old 81), in both its first and second terms was above 67. Surprisingly,
in a country with a median age of 26.7 — which means half the population, or
more than 625 million people are below this age — political parties have
ignored the young for years.
Mainstream
political parties received a jolt recently when the Aam Aadmi Party, a new
political group, appeared to attract the youth in large numbers. However, its
disappointing performance in the national capital, where it was in power for
less than 50 days and appeared to be on a self-destruct mode, marked by
theatrics and populist gimmicks, have disenchanted young voters.
http://khaleejtimes.com/kt-article-display-1.asp?xfile=/data/editorial/2014/March/editorial_March15.xml§ion=editorial
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