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from Breakingviews:

Mud sticks for China’s warring heavy industries

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By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

In China, the stodgy world of construction equipment has become a hotbed of fraud accusations, espionage and attempted kidnapping. It shows what happens when fierce competition comes without clear rules.

Shares in Zoomlion, which makes pumps for liquid concrete and digging equipment, rose 6 percent on Oct. 28 after a newspaper that had questioned the company’s finances admitted it hadn’t checked its facts. Zoomlion, which denied the accusations all along, suggested an unnamed competitor was behind the rumours.

This is not the first instance of alleged foul play between rivals. Changsha-based Zoomlion and its cross-town rival Sany, effectively the Coca-Cola and PepsiCo of concrete pumps, have been fighting publicly for over a year. In July, Zoomlion denied media reports that it was behind an attempt to kidnap Sany’s chairman’s son. In December, Sany said it was moving to Beijing to escape “malicious competition”. Over the same period, both companies’ valuations and sales have slumped.

from Photographers' Blog:

The women of China’s workforce

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Shanghai, China

By Aly Song

Sometimes a good story comes naturally.

As a follow-up to China’s mighty urbanization policy, I gained access to a huge construction site within a new residential development zone some 30 kilometers (18 miles) from Shanghai’s city center. My original plan was to photograph the lives of Chinese migrant workers at night. I imagined that they would probably go to some colorful places and do some interesting things after nightfall. But I was completely wrong – every day they went straight back to their dormitories, where they would eat, chat, play some poker, probably watch an outdoor movie once a month, and that’s it!

I was about to give up when I noticed that there were many women at the dormitories. I got curious so I asked other workers: “Your boss has no problem having wives living here too?” One of them replied: “They also work here at the construction site.” To be honest, I was very surprised because in my mind, construction work has always been a job for men.

from Breakingviews:

Feature: Nest-flyers are poised to supercharge U.S. economy

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By Dan Indiviglio
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Flying the nest should pay big economic dividends in the United States. As jobs return, the expectation is that droves of 20-somethings will ditch their roommates or vacate Hotel Mom & Dad to get their own places. They may rent more than they buy, but the effects still look profound. Between home building and related activity like furniture sales, Breakingviews reckons new household formation could account for up to a whopping 30 percent of GDP growth through 2019.

Residential construction in large part powered U.S. output during the boom last decade. Ground was broken on the building of over 2 million new homes in 2005. According to the Census Bureau, between 2009 and 2011, so-called housing starts plummeted to an average of just 580,000.

from MacroScope:

U.S. housing outlook still promising despite rise in rates: Citigroup economist

U.S. housing sector fundamentals remain favorable despite the recent rise in interest rates and the sharp drop in housing starts in June, says Citigroup economist Peter D'Antonio.

Housing starts fell 9.9 percent to a ten-month low of 836,000 units in June.

But the decline was almost all in the volatile multi-family sector, D'Antonio notes. Single-family starts remained in a range just below 600,000, while multi-family fell 26 percent to 245,000.

from Global Investing:

Emerging markets’ export problem

Taiwan's forecast-beating export data today came as a pleasant surprise amid the general emerging markets economic gloom.  In a raft of developing countries, from South Korea to Brazil, from Malaysia to the Czech Republic, export data has disappointed. HSBC's monthly PMI index showed this month that recovery remains subdued.

With Europe still in the doldrums, this is not totally unsurprising. But economists are growing increasingly concerned because the lack of export growth coindides with a nascent U.S. recovery. Clearly EM is failing to ride the US coattails.

from MacroScope:

U.S. housing recovery running out of steam? Not so fast, says Coldwell Banker CEO Huskey

U.S.home resales unexpectedly fell in December, but the drop was not large enough to suggest the recovery in the housing sector is running out of steam.

The National Association of Realtors said on Tuesday that existing home sales dropped 1.0 percent last month to a seasonally adjusted annual rate of 4.94 million units.

from Breakingviews:

Caterpillar’s Chinese lesson: dig below top line

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

As a company that makes excavators, Caterpillar should know the importance of digging. The U.S. machine maker has taken a $580 million write-down on a Chinese mining equipment producer it bought less than a year ago, erasing three quarters of that deal’s value. The accounting fraud that Caterpillar claims to have found at ERA Mining may not have been visible at the time of the purchase. But the low quality of its target’s rapid growth was.

from Breakingviews:

Property slowdown leaves China on shaky ground

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By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China’s property chickens are coming home to roost. Last week’s economic data shows that a year of falling prices is finally changing developers’ speculative behaviour.

from MacroScope:

U.S. housing slump: Six years and counting

Just as Americans begin to regain some hope that the housing sector might be on the mend, we get another batch of data showing the sector’s not quite there yet.

Groundbreaking on homes fell unexpectedly in March to an annual rate of just 654,000, down from 694,000 in February and well short of the 705,000 Reuters consensus forecast. Some context: permits peaked above 2.2 million in early 2006, at the apex of the housing bubble. On the bright side, permits for future construction rose to their highest level in 3-1/2 years.

from Global Investing:

Three snapshots for Tuesday

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A good sign for UK growth - activity in Britain's construction sector unexpectedly accelerated in March, the Markit/CIPS  Purchasing Managers' Index rising to 56.7 from February's 54.3.

An update on cross-asset performance this year as we head into the 2nd quarter:

Equity risk premium by region:

 

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