The man in charge of bond investment at Norway’s biggest bank said monetary stimulus would save the world — for now.
Next month, the European Central Bank (ECB) might step in to rescue the region’s “dysfunctional banking system,” DNB Asset Management fixed income head Svein Aage Aanes said.
“Many are a bit skeptical but I still think the central banks have some dry gunpowder left,” Aanes said on Thursday in an interview in Oslo. “The ECB can do much. This will calm down.”
The banking sector needs to be rescued, with yields now so high that lenders cannot issue subordinated debt, Aanes said.
Investors are counting on the ECB to “calm down” markets with rate cuts, more quantitative easing or again step in with specific measures for the banking system, he said.
However, the risk is that the “development becomes self fulfilling,” Aanes said.
Part of what is rattling global markets is a slowdown in China.
However, investors are underestimating the power of the Chinese government to steer the world’s second-largest economy through the turmoil, Aanes said.
“Against what normally would’ve been a clear bubble situation there’s a government in China that has completely different tools and the ability to intervene through regulations and capital controls,” he said. “It’s a terror balance between an unbalanced economy and a government with a big foreign exchange reserve and economic muscle.”
“If we think credit spreads will narrow because someone will clean up in this round, that’s a good investment,” Aanes said.
Central banks would at some point need to “break this loop” because markets are relying on “monetary experiments on a scale that has never been tested before,” Aanes said.
“What is the end game? I don’t have the answer. No one has,” he said. “The risk is obviously, if this doesn’t hold, a financial Armageddon.”
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last