Emerging Stocks Drop Most in 2 Weeks on China Data, Fed - Bloomberg Emerging Stocks Drop Most in 2 Weeks on China Data, Fed - Bloomberg

Thursday, June 21, 2012

Emerging Stocks Drop Most in 2 Weeks on China Data, Fed - Bloomberg

Emerging Stocks Drop Most in 2 Weeks on China Data, Fed - Bloomberg

Emerging-market stocks dropped the most in more than two weeks after data signaled China’s manufacturing in June may contract for an eighth month and the U.S. Federal Reserve cut economic growth estimates.

The MSCI Emerging Markets Index (MXEF) fell 1.2 percent to 937.30 at 9:18 a.m. in London, the biggest intraday fall since June 8. The Shanghai Composite Index (SHCOMP) slumped 1.4 percent to the lowest level since March 29. OAO Sberbank, Russia’s biggest lender, slid 1.1 percent as financial stocks led the emerging-markets index lower. The BUX Index (BUX) tumbled 1.5 percent in Hungary and the WIG20 Index (WIG20) retreated 1.1 percent in Warsaw.

A preliminary reading for a purchasing managers’ index from HSBC Holdings Plc and Markit Economics showed China’s manufacturing may shrink this month. Euro-area services and manufacturing output contracted for a fifth month in June, suggesting the economy may fail to grow in the current quarter. Fed officials cut their estimate for U.S. growth in 2012 to between 1.9 percent and 2.4 percent, and extended its Operation Twist program.

China has a very weak economy that will certainly force the government to implement some stimulus soon,” said Petcharat Powattanasatien, head of equity investment at Bangkok-based Kasikorn Asset Management Co., which manages more than $24 billion of assets. “The disappointment on the U.S. economy also hurt sentiment in the equity market.”

U.S. Growth

The Fed’s new forecast range for U.S. growth compares with an April forecast of 2.4 percent to 2.9 percent. The 48.1 preliminary reading for Chinese PMI compares with a final 48.4 for May. A reading above 50 indicates expansion. If confirmed on July 2, it would equal the run of below-50 readings from August 2008 to March 2009.

A composite index based on a survey of purchasing managers in both manufacturing and services industries in the 17-nation euro area was stable at 46, the same reading as in May, Markit said.

The Hang Seng China Enterprises Index (HSCEI) of Chinese companies listed in Hong Kong slid 1.6 percent, the steepest decline in more than two weeks. Lenovo Group Ltd. (992), the world’s second- biggest maker of personal computers, tumbled 9.4 percent, the most since February 2010, after China Times said the company lowered its guidance for shipment growth this year.

Dongyue Group (189) plunged 15 percent after the Chinese chemical maker said its profit for the six months ending June 30 may decrease as the global economic slowdown cut demand for its products.

Greece Review

South Korean’s Kospi Index and Taiwan’s Taiex Index sank 0.8 percent as the two nations failed to win an upgrade to developed market status from MSCI Inc.

Greece’s stock market was put under review for reclassification to emerging markets by MSCI, a change that would make the European Union nation the first advanced country to be cut to developing status. Qatar and the United Arab Emirates will keep their frontier classification, MSCI said in a statement yesterday.

The MSCI Greece Index fell 0.2 percent to 10.31 by 11.31 a.m. in Athens today, heading for its first decline in four days.

The FTSE/JSE Africa All Share Index (JALSH) retreated 0.4 percent in Johannesburg as metals prices slid. The ISE National 100 Index (XU100) gained 0.3 percent in Turkey, whose sovereign debt was upgraded to one level below investment grade by Moody’s Investors Service yesterday.

An MSCI index of emerging-market energy shares slumped 1.7 percent, the most since May 30. Oil futures in New York slid as much as 1.7 percent in electronic trading to $80.03 a barrel, the lowest price since Oct. 4. Financial shares slid 1.2 percent, according to MSCI.

To contact the reporters on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net; Jason Webb in London at jwebb25@bloomberg.net.

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net.

June 21 (Bloomberg) -- Adrian Mowat, Hong Kong-based chief Asian and emerging-market strategist at JPMorgan Chase & Co., talks about investment strategy. He also discusses the Federal Reserve's decision to extend Operation Twist while speaking with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Growth worries hit world stocks, commodities - Reuters India

LONDON | Thu Jun 21, 2012 3:00pm IST

LONDON (Reuters) - Rising concern about global growth triggered falls in shares and commodities on Thursday after data showed Chinese and European factory activity slowing, a day after the Federal Reserve extended its stimulus policy due to a weakening U.S. recovery.

In Europe preliminary manufacturing and service sector data across the 17-nation euro area showed the downturn in the private sector was becoming entrenched as falling orders and rising unemployment hit confidence.

The data also showed Germany's private sector shrank in June for the second month running, with manufacturing activity hitting a three-year low.

"It is a worryingly steep downturn we are seeing (in Europe) and it is spreading from the periphery, which has been falling at an increased rate, through to Germany," said Chris Williamson, chief economist at Markit, which compiled the data.

Earlier, a similar survey of private sector activity in China compiled by HSBC showed its giant factory sector had shrunk for an eighth straight month in June on weaker demand for exports.

MSCI's global equity index fell 0.4 percent to 309.95 points, snapping a week of gains, while Brent crude oil touched an 18-month low of $91.62 a barrel, and copper dropped 1.6 percent to $7,425 a tonne.

The falls began after the Fed announced it had chosen to extend its current bond-buying programme, dubbed "Operation Twist", rather than implement more quantitative easing as some had hoped.

The U.S. central bank also announced its was lowering its 2012 and 2013 growth and employment forecasts for the world's largest economy, and said it would consider more stimulus measures if the situation worsened.

The dollar firmed against a basket of major currencies after the Fed's decision and stood at 81.63 on Thursday, above a one-month low of 81.186 earlier this week.

However, the weak data from Europe saw the single currency drop 0.4 percent to $1.2650, down from a high of $1.2744 posted on Wednesday.

The FTSEurofirst 300 index of top European company stocks was down 0.7 percent at 1,007.12 points after hitting its highest closing level since May 11 at 1,022.52 points on Wednesday.


Spain's growing funding problems were also undermining sentiment in European markets.

The government sold 2.2 billion euros of new medium-term bonds on Thursday, with yields on the five-year debt rising to 15-year highs, hours before the government is expected to finalise a multi-billion euro rescue package for its banks.

Sources have told Reuters Spain's bank audit will say that up to 70 billion euros is needed to recapitalise the banks, but Madrid is expected to ask for more to try and convince markets that it has the problem covered.

Signs that the euro zone was moving to help Spain have helped ease pressures in the debt market, with 10-year Spanish government bond yields falling 9 basis points to 6.67 percent on Thursday after rising to close to 7.3 percent last week.

But German Bund prices were also on the rise, after hitting their lowest level in nearly eight weeks on Wednesday, sending 10-year yields down three basis points to 1.58 percent.

Euro area finance ministers are due to meet later, and among the long list of items on their agenda is a proposal to extend a deadline for Spain to meet its budget deficit target, and a plan to allow Europe's new bailout fund to buy government debt.

The debt-purchasing plan, floated by Italian prime minister Mario Monti at this week's G20 summit, is controversial and may not be decided until an EU leaders meeting next week, but has taken some pressure off both Italian and Spanish debt markets. (Additional reporting by; Editing by Will Waterman)

Ask the experts: Financial Training 2012 - Financial Times

Welcome to the Financial Times Ask the Experts Financial Training 2012. With the ongoing financial crisis, financial training is still at the top of the agenda for many. Our panel of experts will be available to answer your questions on Wednesday, 20 June 2012, between 14.00 and 15.00 BST. Post your questions now to ask@ft.com and they will be answered on the day.

On the panel are:

Scott Rostan: founder of Training The Street. Scott began his professional career as an analyst with Merrill Lynch´s M&A group in New York. After gaining transactional experience in a broad range of industries and with a wide spectrum of clients, Scott decided to draw more directly on his teaching gifts.

Pablo Triana: professor at Esade Business School. Pablo has held several roles in the financial industry and is a graduate of NYU Stern and American University.

Della Bradshaw: FT Business Education Editor.


I have a Masters in Statistics and an MBA in banking and finance and I would like to do a financial course. My friends have advised me to do a CFA (chartered financial analyst) and FRM (financial risk management), someone also told me to do ACCA or ACA. Can you please advise me?

Pablo: CFA or FRM are important qualifications with global recognition, but they are not full-fledged academic programmes. Depending on one´s career status and goals, CFA/FRM can be a better option than a masters degree from a university or a business school, but you won´t gain many of the benefits of earning and experiencing a masters degree.

What many people do is earn a Masters in Finance and then, once they are back in the workplace, prepare for the CFA or FRM. Some masters degrees actually help you get ready for these exams.

Della: Why do you want to do a finance course? What kind of job do you want to have when you have finished? Clearly a financial analyst course would help you get a job in that sector, an accountancy qualification would help you become an accountant. I would suggest that you get a little more work experience before deciding what kind of career you want and then invest in more training.

Scott: Depends on your goals from the financial course. CFA skills are often most applicable to those interested in asset management, investment management and/or research. Risk management is a growing area in finance as companies think about how to best manage various risks. Accounting obviously gives a different set of important skills. Based on my experience with MBAs, they usually possess a solid foundation in accounting for finance with a focus on “financial statement analysis.”

With your Masters in Statistics and MBA, you possess great analytical skills. Ask yourself what you would like to accomplish from the additional courses (new job, additional skills in current job, career switch) and then research the time, cost and format.

Hello there, I was just wondering where the best online MBA programme is offered? By best I mean a programme that is internationally accredited and recognised by reputable universities.

Saeed Sheshehgar

Della: The Financial Times publishes an annual listing - NOT a ranking - of online MBAs here.

Scott: This is a relatively new and emerging approach for MBAs. With the advances in technology, distance learning options are exploding. (The one I know best is where I am an adjunct professor of finance: the University of North Carolina Kenan-Flagler Business School, which has launched a successful online programme called MBA@UNC).

US News now includes rankings of online programmes in their annual rankings. I am sure there are similar ones for non-US schools.

In terms of the “best,” it depends on your fit and programme offerings. A few questions to ask yourself: Why are you interested in an MBA? What are your plans post-graduation? How will the MBA help your achieve those goals? What attracts you to the online format vs. a live programme?

In terms of recognition, I believe most employers will still focus on the school’s overall name and reputation vs the individual online programme’s reputation.

I recently graduated from Loughborough Business School with a 2.1 BSc in finance and am looking for a role in the front office, with a view in the long-term to work on a macro trading desk. How beneficial would a masters or MBA be to finding such a role, or would working from the ground up be a better way to go?

Della: An MBA is generally a post-experience degree, essentially for those who want to move from a functional role to a managerial role, while a Masters in Finance is usually (but not always) a pre-experience degree which digs deep into financial calculations, methodologies and business context.

The latter would clearly be appropriate for you at this stage in your career, but so too would a myriad of other financial programmes and certificates - I won’t list them all as I can’t cope with all the acronyms. Some work experience would certainly help you decide what kind of career would be available to you and what you would enjoy.

Pablo: An MBA or MiF can help you get a front office job certainly. Of course, it is not a requirement but it can help a lot. Actual experience can obviously be a better route to a top job but an academic programme can provide a wider view of the entire financial industry and may help you switch between functions and firms.

Scott: If your long term goals are a macro trading desk, ground up is probably the better way to go. Broadly speaking, the trading side of finance mostly values people with market experience.

For example: I know of a large, global investment bank where 10 per cent of the summer MBA interns but about 33 per cent of the summer analyst class are going into capital markets; their philosophy, as with most banks, for trading side is to hire mostly analysts – usually the vast majority of hiring into trading - and then develop and promote the talent from within that group.

While a master or MBA can help with learning new skills, it doesn’t replace the pulse of the market and hands-on market experience.

Are there any insights you can give for mature age students entering the finance industry? I am 41 years old and am undergoing a career change after a career as a concert pianist. I hold a doctorate of music, I have just finished my first year of a BSc with the University of London International Programme (lead college LSE) and will sit the CFA Level 1 exam this year. I would love to work for a major investment bank. Do the benefits of my ‘maturity’ outweigh a possible ‘negative’ in my age, or vice versa?


Della: I think your previous career and your academic credentials, as well as your maturity, should make you a fascinating recruit for an investment bank. I just hope they have the sense to employ you.

Scott: Very interesting career switch! I think your “maturity” can be viewed as a positive and a negative, depending on the role you are looking for in a major investment bank.

For example, if you are looking to work in the M&A/advisory and industry coverage areas, the junior level professionals tend to be younger (just out of college or business school) and work very long hours (typically 80-100+ per week); as we get older (I am in your “maturity” level, shall we say), those time commitments are difficult, not only physically but also on a family dynamic.

But if you are interested in more financial consultant or asset management side of a bank, the entry point at an older age could be easier and these areas may be interested in people with a more varied set of life skills and experiences.

Small word of advice: you will need to be honest with yourself about probably being trained by and working for someone who is younger! Finance, as you know, is loaded with talented people in their 20s and 30s. This could make for an interesting work dynamic, but given your seriousness in course work and with the CFA Level 1, you seem to possess (ahem…) the maturity to make it work.

Thanks for keeping this invaluable and helpful section on your online portal of business education.

I seek your guidance in admission as I am in confusion state. I want global exposure and am seeking a long term career in marketing. At present, I am in India, working as a software engineer. What are the placement prospects abroad as I have a few friends returning back from the US after higher education ending up jobless.

Should I go for a CAT (India) or GMAT? An MBA in India or abroad? Is there any difference between a full-time and part-time MBA? Why choose an MBA? And can you share with me data of US, Australia and Canada related to b-schools with good employment rates?

Tarun Kakkar

Della: There are so many questions here it is hard to know where to begin to answer them. As a starting point, it is worth asking yourself which country you want to live and work in. If the answer is India, then the CAT and an Indian business school would be appropriate - either a PGP programme or a post-experience MBA.

If you want to work overseas, some countries are more welcoming to graduates from overseas and you rightly highlight Australia and Canada as two such countries. In both our MBA and Masters in Management (PGP) rankings we publish employment data.

Scott: That’s a loaded question with many, many parts. Let me try to help end your state of confusion. Overall advice: Be realistic with your goals. If you are interested in marketing, then I would try to attend the best marketing institution available to you. But bear in mind the institution you choose will open up some possibilities and close others.

Each decision opens and closes doors at the same time – just keep on progressing through. Job placement rates are obtainable for each school. My recommendation here is to also ask about the “internship” placement rates (typically summer jobs in between first and second year) and how many students got an internship in their stated area of preference as more and more companies are using the internship as the “summer interview” for full time positions.

As for India vs abroad – depends on the reputation, programme offerings and your goals post-school. If you are interested in marketing, I would try to get into the highest ranked marketing programme in a reputable school you can, no matter where it is.

Full-time vs part-time – depends on your career goals. If you are looking for a full career switch (sounds like it with engineer to marketing), the full-time programmes offer a good opportunity to immerse yourself fully in the school work, network and try something new with an internship. The part-time programme may make more financial sense in the near term (keeping your salary is nice), but it may be tough to make the career switch if you are fully employed (no internship opportunity, harder to interview, tougher “why make the switch from engineering to marketing” question, etc.)

And why pursue an MBA – that’s the key question to ask yourself. What skills do you want to learn? What are your career goals? How will an MBA help you? Is it worth it? Are there other avenues in your current career path that can expand your skill sets?

Finally, I recommend you have some personal reflection here. Speak to friends with MBAs and friends in the business world who work with MBAs about your situation. Just be open and honest with them and yourself.

What are your recommendations for a financial markets programme for somebody with a law background? Is there a Masters in Finance degree (preferably online, since I am working full-time) which would provide a good understanding of the way the financial markets function?


Della: Off the top of my head, I can’t think of any joint programmes Raluca, but there are an increasing number of law schools and business schools working together because the two sectors are so closely aligned. This is particularly true in Europe, the US and Canada.

Pablo: Law plus finance is a good combination. Some schools offer degrees covering both areas.

Scott: I have known a good number of lawyers making the switch to investment banking over the years. They often bring expertise with contracts, negotiations and tax & structuring. Therefore, M&A and industry coverage are natural fits for a lawyer.

The area I see as weakest for lawyers is threefold: (1) financial statement analysis, (2) corporate valuation and (3) financial modeling. While a finance degree or MBA will help address those areas, there are many ways to learn these skills.

My company, Training The Street, and many of our competitors offer workshops in various formats (weekdays, weekends, evenings, online, live) and self-studies in these areas. Many of the investment banks use these as pre-work for lateral hires (loosely throwing the lawyer turned banker into this category) or a crash course training programme for those that the entry level programme (typically for new analysts and new associates) does not make sense.

Please would you answer the following questions:

1. Coming from a technical IT background in terms of education and work experience (recently on the IT side of a risk function), what is the best route (e.g. training, certification CFA, CRM, working in junior business roles, etc.) to increasing the opportunities of working on the business side of the fence?

2. Our son is hopefully doing well at his GCSE exams, having just sat them, and prefers the rigours of essay writing, particularly the structured essays in history where an argument has to be presented with evidence. He also enjoys the pure mathematics subject and he is sitting further mathematics. His research so far has led him to look at reading economics with mathematics or economics at university. His A-level subject choices are therefore: mathematics, further mathematics, history and economics. Is this approach valid for a career in the City of London (investment banks, brokers, consultancies), preferably in the business departments, not IT?


Della: (1) I would have said an MBA - full-time, part-time or by distance learning - would be your best bet, as you already have lots of technical skills. (2) Sounds perfect!

Scott: (1) Making the switch from IT to the business side can be tricky. Ask yourself why you want to pursue this and what makes you attractive to the employer? All of the options you mentioned will help. Some people also try the MBA “career switch” route, but this is the most expensive and potentially disruptive in terms of salary loss, family dynamics, etc.

The CFA is a good option if you are interested in the asset management/research side of finance. My one bit of advice here: Fully leverage your IT skill set!!! For example, knowing HOW the science works in an area gives a tremendous advantage to writing in depth research on IT trends or a technology company’s new products. It is much easier to learn accounting and finance than it is to learn the “science of IT.” But analytical skills are only one part of the equation: communication, interpersonal and teamwork skills are also critical for a client interfacing, “business side” role.

(2) Absolutely! I was personally an economics major (with some maths emphasis) myself. Most bank’s analyst classes are comprised of “business/finance/accounting” and “liberal arts/sciences” majors. For large companies, it is not unusual to have one-third to one-half of the class made up of non-business/finance/accounting. Companies are looking to hire talent - analytical skills, good attitude, work ethic vs actual expertise in a subject area. The accounting, valuation and financial modeling skills can be developed through practical training and transaction experiences.

Most of the pre-experience masters ranked in the FT 2012 ranking are located in Europe whereas the financial industry grows mainly in Asia. How can a European student learn more about Asia? How can you catch job opportunities in EMEA?

Clement Tubery, Master in International Finance student, HEC Paris

Della: That’s a great question Clement. If you are studying at a business school, especially a top-rated one such as HEC, you will obviously have the help of the careers office in doing this. But you are absolutely right in pointing out that it is Europe, rather than the US or Asia, where these finance degrees are popular.

So, what kind of qualifications do financial professionals in Asia hold? I suspect that the predominant qualification in Asian countries are certificate programmes such as the CFA or the various accountancy degrees, which are portable across country boundaries. I also think that speaking Mandarin might go a long way to help in China!

Pablo: It is true that most finance programmes are based in Europe (and the US). This is probably mostly due to the existence of mature markets and established business schools. With Asia flourishing we should see leading programmes emerging from there, especially given the promise of enticing job opportunities in the region. It’s important to point out that Asian students make up a large proportion of finance students at European and American schools.

Scott: Currently, the three main hiring hubs for financial services are Hong Kong, London and New York. While there are plenty of others, most companies feed through those three.

Asia has been and probably will be in the near future the growth for the financial service sector. Keep reading the financial press about Asian markets. Explore school exchange programmes in Asia to spend a year or semester abroad. Pursue an internship in Asia (probably trickier for a non-Asian, but not impossible).

Also, starting in London or New York will give a solid experience and then maybe a job transfer in the future to Asia could occur. And catching job opportunities in EMEA is the same as everywhere else: have a strong resume, interview well and perform well during an internship. Most banks use the internship as the primary feeder into their full-time hiring class.

I graduated with a degree in accounting and finance and I am a CFA Level I candidate. I am having difficulty getting a job in the finance industry in Malaysia for two reasons. First, its limited job openings which usually require you to have years of experience, even if it is just an entry level finance job. Second, its focus on Islamic finance, which I have never studied in an overseas university. I tried to apply to finance jobs in Singapore, Hong Kong and China but I never got any replies. I think the reason for this is due to the permanent residency requirement, which I do not have.

I also tried to apply for a Master in Financial Engineering or Master in Finance, which largely based its curriculum in quantitative subjects. They told me that they aim for engineering students or students with a background in mathematics and physics. I have difficulty in securing any masters degree due to my bachelor degree not meeting the admission requirement. I want to enrol onto a masters degree for two reasons: Its network opportunity and its more quantitative curriculum.

So, my question is, can you please give me some advice regarding how to break into finance industry in Asia and how to secure a place on a masters programme based on my profile?

Peter Low

Della: I am sorry to hear you are having such difficulties, Peter. I certainly think a CFA qualification will help. While Masters in Financial Engineering degrees are for the highly technical and numerate, Masters in Finance programmes cover a range of skills and topics and are open to participants from less technical backgrounds. Look out for degrees in finance and economics for example, or business and finance. A programme like this would be most effective in augmenting your current qualifications.

Pablo: Many finance programmes are not quantitative-theoretical and do not demand a scientific background at all. While finance education has been “quantified” (excessively, in my opinion), there are still many schools that recognise that finance is a business, not a science and should be treated as such in academic quarters. Some of the world´s top finance programmes are NOT quantitative and are open to any type of student.

Scott: Everyone’s situation is different and unique. I am better suited to help you with the finance industry question: network, network and network some more! If you don’t know people in the sector, get out there and show initiative and try to meet some more. Network through the CFA, friends, acquaintances and alumni from your school. You never know when talking to someone at the right time about the right situation will turn into a job lead.

Finance jobs in Asia right now are tough to come by – the companies are hiring, but the rate has slowed. Broadly speaking, job hiring in finance follows anticipated capital markets activity – more deals, more people. It is a cyclical business and the cycle is down right now. And you need to get some experience somehow.

Internships could be a good way to go, even if unpaid. Companies often like to hire a known quantity (someone they have met and know through an internship) vs someone new. Just getting your foot in the door is key and may turn into something.

I am less qualified to help with the masters question, but keep trying. Maybe take a course in the evenings or weekends to round out your skill set. That could help with the admissions requirement. And, if this is the serious end goal, maybe you should explore going back to the bachelors programmes first in those areas.

Access to superior education helps developing countries (ie. Paraguay, where I live) benefit from developed countries’ expertise and knowledge and deepen its capital markets, making it more attractive to foreign capital and at the same time ensuring the adoption of sound principles in their local financial markets. But, the offer of such masters programmes and, more importantly, financial aid offers are very limited. Why do you think universities haven’t made decisions on this matter?

Scott: I think the scarcity is caused by the demand side – positions for the programmes and financial aid dollars are very, very competitive. It is a global world and the schools know it. Schools will often highlight their percentage of international students to demonstrate this. Money is tight though: university and government budgets are under pressure, so there is a limited amount of financial aid available.

Universities are setting up campuses in other areas of the world and expanding exchange programmes to attract a more global audience. Online programmes could be another option for you as you can tap into the expertise you want, but stay local in Paraguay.

Dear financial experts, I am a finance professional and very well versed with the ongoing financial crisis that started in 2007. I have noted the whole hearted approach scholars, professionals and practitioners have taken to finding a lasting solution, however, what they have achieved is to get a short term reprieve from the absolute impact of this crisis.

Currently, the European economy is not doing fine, neither are other economies, I therefore conclude even emerging countries economies are not growing at the expected growth rate had USA, Europe, etc been doing fine.

My challenge therefore goes to you the expert team - isn’t it now clear that the global financial crisis is well beyond the dependability of finance expert’s credential and skills in numerical ability or there investment acumen? Would then be a need of change in tact, strategy, and resources in tackling this growing monster be an ideal approach rather than sticking to same computer simulated scenario strategy.

Scott: That’s a deep and tricky question that I don’t have the answer to. And I personally don’t feel anyone has the answer to the best solution. However, as a guest expert here, I’ll give you my thoughts:

The causes of the global financial crisis are many-fold with numerous parties involved. And getting to a better solution will also take the contributions of many parties - with differing interests!

The computer simulated scenario strategies played a part, but it wasn’t the sole cause of the crisis. If you step back and use common sense like “if it seems too good to be true, then it probably is,” things should be better. Using computer models to forecast things is a new fact of life. Key thing – and I teach this in class all the time - the models and forecasts are only as good as the assumptions you put into it. “Garbage in, garbage out” is my favorite saying here. Is it realistic to assume your home in the USA will approximately double in value over 5-10 years? Probably not, but it did in the early to mid-2000s for many home owners, enough to cause some (not all) to think this will continue. So what assumption should we use for future property appreciation? How much is my home equity worth now? In 5 years? In 25 years?

So yes, I agree with you, the world needs a change in ‘tact, strategy and resources’. But the million (or should I say trillion) dollar question is what is that change? The world needs creative thinkers like yourself, so keep thinking about how you and everyone else can help make this a better world!

Stocks point to lower open after Fed - click orlando

U.S. stock futures point to a lower open on disappointment in the Federal Reserve's limited action, and more signs of a global economic slowdown hitting both China and Europe.

The Dow Jones industrial average, S&P 500 and Nasdaq futures were lower Thursday morning. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Investors have a number of new economic reports to chew on Thursday, as they continue to digest the news that the Fed is extending its "Operation Twist" program.

The Fed said Wednesday that it will extend Twist -- its policy of swapping short-term Treasuries in its portfolio for bonds with a longer duration -- until the end of the year, in an effort to jumpstart sluggish economic growth and hiring in the United States. The Fed said it stood ready to take additional action if needed.

But the move fell short of the full-blown injection of additional cash into the economy, through asset purchases known as quantitative easing that many investors have been calling for. U.S. stocks closed mixed Wednesday following the Fed's announcement.

Overseas economic reports released Thursday show it's not just the U.S. where the the economy is weaker than hoped.

The preliminary report for HSBC Manufacturing Purchasing Managers' Index showed China fell to a seven-month low -- a sign that factories there are being hit by sluggish demand, both domestically and overseas.

Meanwhile, Europe's PMI index for June remained at the near three-year low, as manufacturing output in Germany -- the most important European economy -- fell at the fastest rate in three years. That's the second straight month of decline there.

The latest economic data comes as eurozone finance ministers are gathering in Luxembourg for a two-day summit.

The continent's leaders are facing pressure to announce new measures to combat their sovereign debt crisis, which remains of grave concern even after news that Greek politicians formed a coalition government led by a pro-bailout party.

Spain's bond auction of 2-, 3-, and 5-year bonds Thursday morning resulted in 2-year yields doubling from the prior auction, and sent yields for the 5- and 7-year notes also markedly higher. But the yield on the benchmark 10-year Spanish bond, which pushed past 7% earlier this week, fell to 6.5%. That's down 0.2 percentage points from Wednesday's level, indicating fears that the eurozone's fourth largest economy will need a bailout may be lessening.

CNNMoney's own Fear and Greed index shows investors less fearful, although still in fear territory. But the index had been in extreme fear territory until last week.

Domestic economic reports on tap for Thursday in the United States include the latest look at initial jobless claims and existing home sales.

World markets: European stocks fell in morning trading. Britain's FTSE 100 slid 0.5%, while the DAX in Germany shed 0.4% and France's CAC 40 was off 0.3%.

Asian markets closed mix after HSBC's flash manufacturing report and in reaction to the Fed meeting. The Shanghai Composite lost 1.4% while the Hang Seng in Hong Kong was down 1.3% at the close. But Japan's Nikkei closed 0.8% higher.

Economy: Initial jobless claims for the week ended June 16 are expected to total 380,000, according to a survey of analysts by Briefing.com -- down from 386,000 in the week prior.

Existing home sales for May are expected to come in at an annualized rate of 4.56 million. The Conference Board's Leading Economic Indicators Index for May is expected to remain unchanged, after decreasing by 0.1% in April.

Companies: Drugstore chain Rite Aid and food producer ConAgra are scheduled to release their quarterly results before the bell.

Rite Aid is expected to report a loss of four cents a share on $6.43 billion in revenue, according to a survey of analysts by Thomson Reuters. ConAgra is expected to post earnings of 50 cents a share on $3.38 billion in revenue.

Shares of Bed Bath & Beyond sank more than 10% in after-hours trading Wednesday, after the retailer offered disappointing guidance for the current quarter.

Currencies and commodities: The dollar rose against the euro and Japanese yen, but lost ground versus the British pound.

Oil for July delivery fell 83 cents to $80.62 a barrel.

Gold futures for August delivery dropped $15.80 to $1,600.00 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury was little changed, leave the yield near the 1.66% level reached late Wednesday.

Stocks to watch at ASX close on Thursday - Australian Financial Review

Stocks to watch on the Australian stock exchange at close on Thursday:

Apn News & Media Ltd (APN) – down 2.5¢ at 71¢

Media and advertising company APN is moving into online retail, paying $36 million for a controlling stake in brandsExclusive.

Billabong International Ltd (BBG) – in a trading halt, last traded at $1.83

Surfwear company Billabong has launched a $225 million fund raising venture it says is vital for its future.

BHP Billiton Ltd (BHP) – down 40¢ at $32.20

An Aboriginal elder has returned to the Federal Court to tell "a good story" in his bid to block the $30 billion expansion of the Olympic Dam copper, uranium and gold mine in South Australia's north.

Funtastic Ltd (FUN) – in a trading halt, last traded at 16¢

Toy distributor Funtastic Limited says it has raised up to $24.6 million to reduce bank debt and improve its gearing ratios.

Fairfax Media Ltd (FXJ) – steady at 59¢

Unions are asking Fair Work Australia to force Fairfax to meet with them to discuss its future plans for the company and explain the logic behind its decision to cut 1900 jobs.

Pacific Energy Ltd (PEA) – up 2¢ at 46¢

Independence Group NL (IGO) – down 13¢ at $3.55

Anglogold Ashanti LTD (AGG) – up 13¢ at $7.26

West Australian power company Pacific Energy will build a power station at the Tropicana gold project, its largest project win for several years.

Qantas Airways Ltd (QAN) – down 2¢ at $1.14

Qantas will cut more than 100 jobs at Sydney Airport as it transfers its component maintenance operations to Melbourne.

Telstra Corporation (TLS) – up to $3.60

Musicians says the latest music streaming service, launched by Telstra, will help the industry suffer less from illegal downloading.

Japanese Stocks Advance on Yen Prospects, New BOJ Members - Businessweek

June 21 (Bloomberg) -- Japan stocks rose a second day on speculation the yen’s gains will slow after the U.S. Federal Reserve refrained from adding stimulus. Shares also advanced as lawmakers confirmed two economists seen to support loose monetary policy for the Bank of Japan’s board.

Canon Inc. (7751), a camera maker that gets 27 percent of its revenue in the Americas, rose 1.4 percent after the yen fell against the dollar yesterday in response to the Fed announcement. Fanuc Corp. (6954), a maker of automation controls used in Chinese factories, fell 0.9 percent after a report China’s manufacturing may contract for an eighth month in June. Renesas Electronics Corp. (6723) gained 3.1 percent on a report private equity firms KKR & Co. and Silver Lake may invest in the chipmaker.

The Nikkei 225 Stock Average (NKY) gained 0.8 percent to 8,824.07 at the 3 p.m. trading close in Tokyo. The broader Topix Index advanced 0.9 percent to 753.96, with about four stocks gaining for each that dropped. Shares also rose on a government report foreign investors were net buyers of Japanese stocks last week for the first time in nine weeks. Japan was the only major market in Asia to rise today.

“We are seeing a sense of relief after a risk-off period,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. “The BOJ board is turning a bit more pro- monetary easing, even though things won’t change much as long as the governor remains the same.”

Both houses of parliament approved Prime Minister Yoshihiko Noda’s appointees to the Bank of Japan’s board, confirming Takahide Kiuchi of Nomura Securities Co. and Takehiro Sato of Morgan Stanley MUFG Securities Co., two economists who are seen by some analysts as favoring loose monetary policy.

Topix Valuation

The Topix fell 14 percent from this year’s peak on March 27 amid concern policy measures won’t be enough to support a global economy hindered by Europe’s debt crisis and China’s slowdown. Shares on the index are valued at 0.89 times book value. A number below one means a company can be bought for less than the value of its assets.

Foreign investors made 58.8 billion ($738 million) in net purchases of Japanese shares last week, based on reports from designated major investors released today by the Ministry of Finance in Tokyo.

Futures on the Standard & Poor’s 500 Index fell 0.4 percent today. The gauge retreated 0.2 percent yesterday after the Fed lowered its U.S. growth forecast to between 1.9 percent to 2.4 percent from an April projection of 2.4 percent to 2.9 percent.

Stopping short of adding to total asset purchases, the U.S. central bank said it will extend its Operation Twist to replace $267 billion of short-term bonds with longer-term debt through year-end. The program had been due to end this month.

Canon added 1.4 percent to 3,275 yen after Japan’s currency fell to 79.70 per dollar yesterday, the weakest since June 13. Honda Motor Co. (7267), Japan’s second-largest carmaker by market value, rose 3.5 percent to 2,665 yen. A weaker yen boosts the value of exporters’ earnings when repatriated.

Mixed Blessing

More asset buying, or quantitative easing, from the Fed would be a mixed blessing for Japanese stocks because it improves the U.S. growth outlook while weakening the dollar against the yen, said Seiichiro Iwamoto at Mizuho Asset Management Co. in Tokyo. A weaker yen boosts the value of exporters’ earnings when repatriated.

“Investors are disappointed without QE3, but people in the Japanese market don’t feel that way because the yen won’t be strengthening,” said Iwamoto, who helps oversee about $34 billion.

Japanese stocks pared gains after the HSBC Holdings and Markit Economic purchasing index fell to 48.1 this month from 48.4 in May, signaling China’s manufacturing may shrink for an eighth month. The Shanghai Composite Index dropped 1.3 percent.

‘Investor Sentiment’

“Declines in the manufacturing reading and China’s stocks are weighing on investor sentiment,” said Hiroaki Hiwada, a strategist at Tokyo-based Toyo Securities Co. “That’s prompting profit-taking this afternoon after Japan’s stocks rose more than market participants had expected in the morning.”

Fanuc lost 0.9 percent to 12,840 yen. Hitachi Construction Machinery Co. (6305) , a machinery maker that relies on China for 17 percent of its sales, slid 0.7 percent 1,513 yen.

Renesas gained 3.1 percent to 334 yen after the Yomiuri newspaper reported KKR and Silver Lake are in talks to invest “several tens of billions of yen” in the chipmaker, which is seeking support after at least five straight quarterly losses.

Nissan Motor Co. (7201) added 1.9 percent to 762 yen as the carmaker plans to cut its domestic output by 14 percent to improve efficiency and counter the strong yen cutting into overseas earnings.

The Nikkei 225 Volatility Index (VNKY) slid 7 percent to 20.92, a fourth day of decline, indicating traders expect a swing of about 6 percent on the benchmark gauge over the next 30 days.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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