Posts Tagged ‘Finance’

global-economy

BEIJING—China’s aggressive response to plunging share prices undercuts its pledge to have the market play a decisive role in the economy and risks cementing investors’ belief that Beijing will always bail them out.

Over a tense weekend, the government oversaw several steps to stem the selling frenzy that sent the benchmark Shanghai Composite down 29% in three weeks as of Friday. Brokerage firms, mutual-fund managers and an investment arm of the government pledged to buy stocks. New share offerings were suspended, quotas for foreigners to buy stocks were increased and the central bank vowed to provide funds to help investors borrow to buy shares.

While the flurry of rescue moves may stem panic in the short term, some economists warned that if not implemented carefully, it could encourage another market bubble even as the existing one deflates. Investors are likely to conclude that Beijing will make good on even reckless investments, they say.

“You could’ve been excused as a punter for thinking there was no downside risk here,” said ING Group economist Tim Condon.

Full Story @ [Wall Street Journal]

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Interviewed by The Independent on Sunday, Mr Saviano said of the international drugs trade that “Mexico is its heart and London is its head”. He said the cheapness and the ease of laundering dirty money through UK-based banks gave London a key role in drugs trade. “Antonio Maria Costa of the UN Office on Drugs and Crime found that drug trafficking organizations were blatantly recycling dirty money through European and American banks, but no one takes any notice,” he said. “He found that banks were welcoming dirty money because they need cash, liquidity during the financial crisis. The figures are too big to be rejected …. Yet there was no reaction.”

US justice officials concluded HSBC was guilty of “stunning failures of oversight – and worse, that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and facilitate hundreds of millions more in transactions with sanctioned countries”, including money banked for Middle East terror groups.

He accused the British Government, together with Austria, of consistently blocking anti-money-laundering moves by the European Union. “They will carry on like that until someone gets killed here by the Russians or the Italians. ” he said. Mr Saviano said he feared one reason was because banks are a key source of political funding.

“Every time there’s an election campaign, I wonder if someone will come forward and start a campaign on money laundering … but it never happens. The reason, I am convinced but I don’t have the proof, is that a good part of the money that comes from money laundering goes into the election campaign. Not illegally, legally, because it can come in because of a lack of regulation.”

Full Story @ [independent.co.uk]

So, the question then is: just what is Citigroup doing with its soaring Precious Metals (excluding gold) exposure, and why is such a dramatic place taking place at precisely the time when not only JPM is cornering the entire “Other” Commodity derivatives market in the form of a whopping $4 trillion in derivatives notional, but in the quarter after none other than Citigroup itself was responsible for drafting the swaps push-out language in the Omnibus bill.

And also: how is it legal that JPM is solely accountable for 96% of all commodity derivatives while Citigroup is singlehandedly responsible for over 70% of all “precious metals” derivatives? Surely even by the most lax standards this is illegal, but what makes the farce even greater is that all of this taking place out of FDIC-insured entities!

The final question, which we are absolutely certain will remain unanswered, is whether any of these dramatic surges have anything to do with the recent move in precious metals prices, or rather the complete lack thereof, even as Europe is on the verge of its first member officially exiting the Eurozone, and China’s stock market is suffering its worst market crash since 2008. Oh, and we almost forgot: with both JPM and Citi now [own] well over 50% of the derivatives market in two critical categories, who is the counterparty!?

Full Story @ [Zero Hedge]

global-economy

teleSUR spoke with UK anti-poverty activist John Hilary, who criticized the behavior of Greece’s creditors who have demanded more austerity.

The International Monetary Fund made over US$1.5 billion as a result of the interest charged to Greece through its bailout loans, according to John Hilary, executive director of the War on Want, who spoke to teleSUR in an exclusive interview Tuesday.

The leftist Syriza government led by Prime Minister Alexis Tsipras will conduct a referendum Sunday to consult with the Greek people and determine whether they approve or reject the terms set out by creditors, which include tax increases and cuts to pensions.

Tsipras opted to call for the referendum after negotiations broke down between the government and its creditors, who insisted on more of the same policies that have pushed the Greek economy into a severe economic recession.

“The only people who are benefiting from keeping the debt going are the bankers, they’re the ones who made a killing out of Greece’s debt,” Hilary told teleSUR. “Of the money that has been handed out in the so-called bailouts, 10 percent has gone into the Greek economy and 90 percent has gone straight back to the bankers and the other financiers who are holding that credit,” said Hilary.


Source: [TeleSur]

Colt foundered financially after losing key military contracts. Bondholders blame Sciens for letting the military contracts slip away due to alleged failure to invest to keep Colt competitive. Sciens denies mishandling the company. Colt, Sciens and a lawyer for bondholders didn’t respond to a request for comment on the interest from the Morongo.

The Morongo aren’t taking sides, said Vickie Driver, a Texas bankruptcy lawyer advising the tribe on how to find a way in to the chapter 11 action. “We’re open, ready to talk. Colt needs something to right its ship,” she said.

One of the largest tribal business conglomerates, the Morongo run a $250 million resort and casino on tribal land, as well as a golf club and travel center. The tribe also owns the Hadley Fruit Orchard stores and online business, and it has an alliance with Nestle Water North Americas which sells water bottled at a $26 million plant on the reservation. “Manufacturing in the Northeast is a very good diversification play,” Mr. Ryce said.

If it is money Colt needs, the tribe has it, Mr. Ryce said. Colt could still be put up for sale, and if it is, the Morongo will bid. Should the company choose a turnaround plan, the Morongo could step up as a chapter 11 plan “sponsor,” or outsider that funds the relaunch of a reorganized business.

If it’s an advantage in winning back U.S. government military supply contracts lost in recent years, the tribe has that, too, thanks to federal programs for Native American businesses, Mr. Ryce said.

Colt makes sense as a business investment for the Morongo. The tribe’s interest, however, is economics tinged with patriotism, according to its lawyer.

Full Story @ [Wall Street Journal]

Treasury Secretary Jacob Lew (center) speaks with (from left) Sen. Ben Cardin, D-Md., Ellicott Dredges GM Craig Murdock and CFO Joseph Wendel during a tour of the company’s manufacturing facility in March. Lew was on hand to promote investment in American infrastructure. The company has utilized the Export-Import Bank’s services.


An agency of the federal government will have to stop doing business today. That’s because members of Congress went home last week for the July Fourth recess without reauthorizing the Export-Import Bank.

The bank helps American companies sell their goods overseas. The bank’s critics say they’re stopping corporate welfare.

Back in May of this year Boeing threatened to outsource jobs if ex-im bank is shut down.

Source: [NPR]