Diamond News Archives

(Bloomberg Opinion) -- China’s latest welcome to foreigners smells of desperation.

Global funds no longer need quotas to buy Chinese stocks and bonds, the State Administration of Foreign Exchange said in a statement Tuesday. That removes a hurdle to foreign investment that’s been in place for almost two decades, since the nation first allowed access to its capital markets.

Scrapping the quota is less a confident liberalization by a maturing economy and financial system than an overt admission that the country needs money. China has been edging dangerously close to twin deficits in its fiscal and current accounts. It needs as much foreign capital as it can get – even in the form of hot portfolio flows – to keep control over the balance of payments and avoid a further buildup of debt.

Contrary to stereotypes, China is no longer a frugal nation that sells a lot abroad and buys little in return. The country's middle class is now traveling and using credit cards overseas. Trade, meanwhile, is undergoing a sharp slowdown, with exports to the U.S. slumping 16% from a year earlier in August amid an escalating trade war.

This thirst for overseas funds explains why China has been opening its financial services industry, allowing global investment banks to take majority control of their local brokerage joint ventures after years of resistance.

The latest move is largely cosmetic. For all practical purposes, the limits have already become redundant. The overall cap on inward investment now stands at $300 billion; two-thirds of that is unused.

The 17-year-old qualified foreign institutional investor, or QFII, program fell out of favor long ago because of relatively high expenses and strict rules on repatriating money. Most overseas investors in China now buy and sell through the Connect trading pipes that link Hong Kong with...

The European Central Bank is widely expected to push its deposit rate further into negative territory Thursday, but the move comes as investors, economists and policy makers worry that the move could take a further toll on the region’s battered banking sector.

After all, the negative rate means banks must pay for the privilege of parking excess reserves at the central bank.

The worry for policy makers is that a further hit to the banking sector’s profitability would add to worries over financial stability while also limiting the ability of banks to provide new loans to the real economy.

In other words, further rate cuts could become counterproductive, effectively serving to tighten financial conditions in the eurozone, noted analysts at Rabobank, in a note.

The Stoxx Europe 600/ex-U.K. Banks Index 184275, +1.87%^[1]  has rallied 6.8% in September but is down 2.6% for the year to date and is off 18.8% over the last 12 months. That’s compared with a 14.3% year-to-date rise for the pan-European Stoxx 600 Europe Index SXXP, +0.08%^[2], which is up 3.3% over the last 12 months. The S&P 500 SPX, -0.42%^[3]  is up 18.7% year-to-date and 3.6% over the last year.

So with that in mind, the ECB is also expected to take steps aimed at easing the pain....

(IDEX Online) - GIA (Gemological Institute of America) has released a software update for its iD100 gem-testing device. The upgrade means the instrument can

distinguish natural pink diamonds from laboratory-grown (HPHT and CVD) diamonds and diamond simulants.

GIA also released a free update to the existing GIA iD100 software with the expanded capability to screen blue-to-green and brown diamonds. This update must be installed before the pink diamond software upgrade can be added.

"These two significant improvements make proper identification of laboratory-grown diamonds more easily accessible to retailers and manufacturers around the world by expanding capabilities of the GIA iD100," said Tom Moses, GIA executive vice president and chief laboratory and research officer. "This is part of our mission to ensure the public trust in gems and jewelry."

The new software can be purchased from the GIA Store for $249 for current owners. It is pre-installed on new devices. ...

For the 2020 fiscal year, the federal budget deficit is expected to hit a massive $1 trillion—the first time in U.S. history that it will have expanded so rapidly in a time of peace and prosperity.

The most recent estimate by the Congressional Budget Office (CBO) puts total federal debt at a whopping 144 percent of gross domestic product (GDP) by 2049. This level of debt is not only unprecedented but also unsustainable. It puts everyone’s financial security at risk.

And if you’ve been keeping up with the Democratic presidential debates, things could get even worse. Medicare-for-all, the Green New Deal, reparations—these programs, while admirable and potentially beneficial, would add trillions more to the already-ballooning national debt.

Remember, it’s the policies that we should be paying attention to, not partisan politics.

Years ago, it might have taken $1 trillion to move the U.S. economy by 2 percent of GDP. What is that number today? It might take $10 trillion or more.

Low, Low Corporate Bond Yields Encourage Record Borrowing

Speaking of debt, you may have heard that a record number of companies last week sought financing in the bond market. It’s no coincidence they rushed to the trough all at once. Average yields for investment-grade corporate debt are near an all-time low right now, making borrowing very inexpensive and attractive. Apple, Deere, Walt Disney and Coca-Cola were among the record 49 companies that issued as much as $54 billion through this past Wednesday. Apple alone sold $7 billion, its first bond deal since 2017....