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January 20 – January 25, 2017


San Francisco becoming a childless city. Now China is making it difficult for banks to move currency overseas.

This week’s post is going to be short a day – I’ll cover it in next weeks’ post – as me and my family are in the process of moving to Phoenix, AZ. Enjoy. 


FT – China GDP hits 2016 target as Trump headwinds loom 1/19. Like clockwork.

Bloomberg Businessweek – Drug Cartels Are Looting Mexican Gas Pipelines 1/12. A reduction in fuel subsidies has caused the price of gas to jump about 20% in Mexico, a side effect – cartels and entrepreneurs are siphoning about $1 billion a year from Pemex (the state oil utility).

WSJ – BT’s Italian Scam Is Just One of Many Problems 1/24. British Telecom’s Italian subsidiary had some shady practices, specifically borrowing cash and disguising it as sales, about £500 million in sales actually…

CoStar – Blackstone’s New REIT Makes First Acquisition 1/25. Blackstone’s new non-traded REIT bought a hotel at UC Davis, more importantly are the different characteristics of Blackstone’s non-traded REIT versus the industry norms. Specifically, fees capped at less than 8.75% and a hurdle rate of 5% before Blackstone participates in the upside.

NYT – When Snap Goes Public, Some Shareholder’s Voting Rights May Disappear 1/24. Sounds like a good deal… for the founders.



WSJ – Daily Shot: India’s Currency in Circulation 01/22

WSJ – California Housing Crunch Prompts Push to Allow Building – Chris Kirkham 1/25


*Note: bold emphasis is mine, italic sections are from the articles.

San Francisco Asks: Where Have All the Children Gone?. Thomas Fuller. New York Times. 21 Jan. 2017.

“A few generations ago, before the technology boom transformed San Francisco and sent housing costs soaring, the city was alive with children and families. Today it has the lowest percentage of children of any of the largest 100 cities in America, according to census data…”

“As an urban renaissance has swept through major American cities in recent decades, San Francisco’s population has risen to historical highs… at the same time, the share of children in San Francisco fell to 13%, low even compared with another expensive city, New York, with 21%. In Chicago, 23% of the population is under 18 years old, which is also the overall average across the United States.”

“In an interview last year, Peter Thiel, the billionaire Silicon Valley investor and a co-founder of PayPal, described San Francisco as ‘structurally hostile to families.'”

“Prohibitive housing costs are not the only reason there are relatively few children. A public school system of uneven quality, the attractiveness of the less-foggy suburbs to families, and the large number of gay men and women, many of them childless, have all played roles in the decline in the number of children, which began with white flight from the city in the 1970s. The tech boom now reinforces the notion that San Francisco is a place for the young, single and rich.”

China clamps down on banks moving currency overseas. Tom Mitchell, Gabriel Wildau, and James Kynge. Financial Times. 22 Jan. 2017.

“Chinese regulators are stamping out moves by banks to shift renminbi out of the country as they attack one of the few loopholes remaining in the country’s strict new capital controls regime.”

“According to several people briefed on rules introduced this month, banks in Shanghai must ‘import’ Rmb100 for every Rmb100 they allow a client to remit overseas, ensuring no net outflows of the Chinese currency. Shanghai-based banks had been allowed to remit Rmb160 overseas for every Rmb100 they brought back into China.”

“The clampdown goes even further in Beijing where banks must import Rmb100 for every Rmb80 they remit overseas on behalf of clients, ensuring a net inflow into the capital.”

“Overseas banks, whose domestic market share in China is tiny, have been more affected by the clampdown because they derive a higher percentage of revenues from cross-border business. ‘This regulation is a bigger nightmare for foreign banks because we are more reliant on cross-border business than Chinese banks,’ one banker said.”

“Bankers have also complained that the central bank and Safe are only communicating regulatory ‘window guidance’ over the phone or during face-to-face meetings, rather than in writing.”

“They added that Safe (State Administration for Foreign Exchange) has instructed banks not to inform clients why their overseas remittances are being rejected and is checking their net renminbi flows on a weekly basis, compared with every month previously.”

Other Interesting Articles

Bloomberg Businessweek

The Economist

Bloomberg – Hedge Funds Risk Treasuries Wipeout After Bearish Bets Soar 1/22

FT – ECB to buy bonds below deposit rate: but what does it mean? 1/20

FT – China’s ‘Kamikaze Squad’ hedge fund leader jailed for five years 1/22

FT – Hong Kong SFC to take legal action against Hanergy directors 1/23

FT – Hong Kong watchdog seeks disqualification of Hanergy founder 1/23

FT – Hedge funds’ bets on rising oil prices hit record high 1/23

FT – China corruption prosecutions drop for first time in five years 1/24

NYT – Doubts Arise as Investors Flock to Crowdfunded Start-Ups 1/24

NYT – In Its Third Month, India’s Cash Shortage Begins to Bite 1/24

WSJ – How Electric Vehicles Could End Car Ownership as We Know It 1/15

WSJ – The Mortgage Market’s $1 Trillion Pocket of Worry 1/19

WSJ – Amazon Expands Into Ocean Freight 1/25



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