Is China Pushing away from Diet of U.S. Treasuries?; Meet the New Old-Boy Network; Banks Finally Draw a Line?
Is China Pushing Away from U.S. Treasuries (YahooFinance)
In February, China held $1.251 trillion in U.S. Treasuries. In March, the figure dipped to $1.250 trillion. That’s a billion dollar change in a month. Is that a big deal? On the surface, it may not seem like it. But if China begins to unwind from U.S. debt at the same time the Federal Reserve scales back its quantitative easing, that combination could pose trouble for America. It could ignite a sell-off of U.S. debt. However, the more prevalent view is that if China backs away from the table and the Fed slows down its buying of debt, others will gladly step in. Japan comes to mind, as Prime Minister Abe’s efforts to devalue the yen, and kick-start his country’s economy look to be working. So, in the grand scheme of things, if China has had its fill, in an ironic twist, it won’t matter if it comes back later for more.
Meet the New Old-Boy Network (Bloomberg)
Yahoo’s $1.1-billion acquisition of Tumblr is just the most recent evidence that the world’s looking at a brand new old-boy network. A century or so after Carnegie, Kennedy, Vanderbilt and their group of cronies fashioned their fortunes together, the 21st century version of their old-boy network is skewing much younger. Just ask Tumblr CEO David Karp, the 26-year-old who started his company in 2007. In little over five years, he joins Facebook’s Zuckerberg, Google’s Page and Brin, Instagram’s Systrom and Kreiger as 20-to-30-somethings who form the core of the Internet’s wunderkind. If the trend is bestowing ungodly amounts of money on younger CEOs, within a decade, might we be talking about a group of Teenage Titans running the world? Gulp.
Banks Finally Draw a Line in the Sand? (CNBC)
In California, a bank yesterday went public and drew a line about what it will not do to turn a profit. One of the world’s largest adult film stars, Chanel Preston, was told by representatives of a bank that her business account had been closed for “compliance issues.” While this action is not the first time bankers have balked at working with this industry, this situation has gone public. It also brings a spotlight on just how far banks will go today to please their investors — as opposed to the no-holds-barred attitude some people had after the banking industry’s near meltdown in 2008. Conservative investors likely will applaud the decision. When the world’s financial system teetered on the brink in 2008, only massive cooperation and tough love were able to pull it back from the abyss. Since that time, an emphasis on cleaner balance sheets, safer investment assets and better crisis management efforts have strengthened the once-wobbly sector. However, we’ve seen banks come under fire more often recently for allowing greed to take priority over morality, so this instance is of putting propriety above producing profits for shareholders is a bit of a twist.