- Published on 15, April 2013
Gold, which was seen as a safe haven to counter the uncertainty and volatility in the recession period, on Friday saw its price plunge 20% from its record 2011 high of $1920.30 to a two-year low below the $1500-$1525 support zone, triggering bearish sentiments. After a 12-year bull run, a clear turn in the gold cycle is finally visible, but will this trend continue?
Speculation that the Federal Reserve may wind down its Quantitative Easing program amidst signs of an economic recovery has led to gold prices declining this year. And the prices haven’t recovered despite concerns surrounding the Cyprus bank bailout, weak US jobs data report and the Bank of Japan’s stimulus program.
- Published on 12, April 2013
With the mission to reduce fiscal deficit to 1.7% of the US GDP, the Obama budget of 2014 has proposed some controversial spending cuts and tax increases in his $3.77 trillion budget for 2014, rubbing both Democrats and Republicans in the wrong way.
The projected budget shortfall for the 2014 fiscal year, starting October 1, is $744 billion or 4.4% of GDP, down from $973 billion in 2013, and four years of post-recession deficits exceeding $1 trillion. The budget calls for reducing deficit by $1.8 trillion over 10 years or $4 trillion in total, a goal that is acceptable to both parties.
- Published on 11, April 2013
On April 4, 2013, the Bank of Japan unleashed its most radical stimulus program of injecting around $1.3 trillion over next two years, committing to open-ended asset buying and nearly doubling the monetary base to $2.9 trillion by the end of 2014. The aim is to end 15 years of stagnation and set a goal of 2 percent inflation in next two years.
While the financial markets buzzed on the news with the Nikkei stock index jumping 2.2 percent and almost touching a 4-1/2-year closing high, the Yen plummeted more than 3 percent against the dollar and 4 percent against the euro. The 10-year government bond yield hit a record low. The Japanese Yen has declined to the lowest level against the dollar since 2008 and some analysts say investors are attracted to even the relative stability of the Euro.
- Published on 08, April 2013
Quarterly funds raised by real estate private equity funds plunged to a 10-year low of $5.2 billion across the globe in the first quarter of 2013 as fundraising in the real estate sector continued to be challenging.
According to a quarterly update report by global private equity research firm Preqin, “Twenty closed-end private real estate funds held final closes in Q1 2013, raising an aggregate $5.2bn, a 79% decrease on the $25bn raised in Q4 2012 and the lowest quarterly total since the $5 billion raised in Q3 2003.” Preqin anticipates that the latest quarterly figures could improve slightly by 10-20% as more information becomes available.
- Published on 03, April 2013
Following a string of oversight failures that led to the collapse of Northern Rock, payment protection insurance and still-evolving Libor interbank rate-rigging scandals, the UK regulatory authorities are cleaning up their act. Early this week, the Financial Services Authority’s (FSA) supervision and consumer protection divisions were restructured into three separate regulators, marking the second major revamp in recent times.