Meet The 2 Iranians At The Center Of The “Stolen Passport” Plot

“The more information we get, the more we’re inclined to conclude that it was not a terrorist incident,” says the Interpol Secretary General Ronald Noble according to CNN, as details of the 2 Iranians at the center of the “stolen passport” uncertainty are identified. As CNN reports, Noble gave their names and ages as Pouri Nourmohammadi, 18, and Delavar Syed Mohammad Reza, 29 and added “they are not likely to be members of a terrorist group.” Of course, the more dismal unknown is that of the entire plane and its passengers and crew which remain missing without a trace.

 

 

Via CNN,

The two passengers in question entered Malaysia using valid Iranian passports, Noble said at a news conference. But they used stolen Austrian and Italian passports to board the missing Malaysian plane, he said.

 

 

Noble gave their names and ages as Pouri Nourmohammadi, 18, and Delavar Syed Mohammad Reza, 29.

 

 

Further, there’s no evidence to suggest either was connected to any terrorist organizations, according to Malaysian investigators.

 

 

“We have been checking his background. We have also checked him with other police organizations of his profile, and we believe that he is not likely to be a member of any terrorist group,” Khalid said.

 

CNN obtained an iReport photo of the two men with two of their friends, believed to have been taken Saturday before the plane disappeared. In it, they are posing with the two others, whose faces CNN has blurred to protect their identities.

Of course the biggest factor is now what happened to Flight 370? CNN sees 4 scenarios:

1. Scenario: Mechanical failure?

Fact: The absence of a debris field suggests the possibility that pilots were forced to ditch the plane and it landed on water without breaking up, finally sinking to the ocean floor.

Analysis: But if that were the case, then why no emergency signal? These planes are able to perform a “miracle on the Hudson” maneuver. They have the ability to glide more than 100 miles and belly land on the water with both engines out, says former 777 pilot Keith Wolzinger, now a civil aviation consultant with The Spectrum Group. During the time it would take for a plane to glide 100 miles, it seems likely that pilots would be able able to send an SOS.

Fact: The missing plane had suffered a clipped wing tip in the past, but Boeing repaired it, and the jet was safe to fly, said Malaysia Airlines CEO Ahmad Jauhari Yahya on Sunday.

Analysis: “Anytime there’s been previous damage to an airplane, even though it’s been repaired, and repaired within standards … it kind of sends a warning flag,” says Wolzinger. Experts agree the Boeing 777 is one of the world’s most reliable aircraft. During its development it was subject to some of the most rigorous testing in commercial aviation history. “I’ve been talking with colleagues,” Wolzinger says. “We’re all baffled by this.” The 777 boasts some of the most powerful and well-tested engines in the world, he says. “The reliability of airliner engines in general is impeccable these days,” he says. “This is a safe plane.”

2. Scenario: Pilot error

Fact: So far, there are no known indications that pilot error contributed to the aircraft going missing.

Analysis: Some aviation experts have compared Flight 370 to the crash of Air France Flight 447 in 2009. All 228 passengers and crew died when the plane went down in a storm in the Atlantic en route from Brazil to Paris. After an expensive, nearly two-year search across the deep ocean floor, the twin-engine Airbus A330’s wreckage was finally found and the voice and data recorders recovered. A French investigation blamed flight crew for failing to understand “they were in a stall situation and therefore never undertook any recovery maneuvers.” But unlike Flight 447, weather was reported as good along Flight 370’s scheduled route and didn’t appear to present a threat.

Asiana Airlines Flight 217 — a Boeing 777 — fell short during a runway approach last July at San Francisco International Airport. Three people were killed and more than 180 others hurt. National Transportation Safety Board investigators have focused on pilot reliance on automated flight systems as a possible contributor to the crash, but a final report has not yet been released.

3. Scenario: Bomb? Or ‘dry run’?

Fact: Two stolen passports have been linked to people who held tickets for the flight.

Analysis: This points to the possibility that someone on a terrorism watch list may have boarded the plane and blown it up. However, the stolen passports don’t necessarily mean the plane was an actual target. It’s possible, says former U.S. Department of Transportation Inspector General Mary Schiavo, that terrorists may have been performing a “dry run” for a future attack. Or, Schiavo said, “it could be just criminal business as usual,” because “there are lots of stolen passports” used by travelers around the world.

Fact: So far, no debris field of plane wreckage has been linked to the 777, which would indicate a bomb blast.

Analysis: When Robert Francis, former vice chairman of the U.S. National Transportation Safety Board, heard about the missing plane, his immediate thought was: “For some reason the aircraft blew up and there was no signal, there was nothing.” The fact that the plane disappeared from radar without warning indicated to Francis “there was something unprecedented that hasn’t happened before.”

What about satellite technology? Is it possible that data from orbiting satellites might show a flash or infrared heat signature from an explosion? Very unlikely, says satellite expert Brian Weeden, who spent years tracking space junk in orbit for the U.S. Air Force. Dozens of government and private satellites orbit the earth, looking down from distances from 300 kilometers to 1,500 kilometers (185 to 930 miles). It’s a long shot that one of them coincidentally floated over at the exact right time and location to capture a flash from an explosion.

However, there’s an “off chance,” Weeden says, that a super secret U.S. government satellite orbiting 22,000 miles in space might have grabbed evidence. These satellites are in geosynchronous orbit. As a group, they can observe virtually the entire globe. “We know that their mission is to detect ballistic missile launches via heat,” says Weeden, now a technical adviser for Secure World Foundation. “We don’t know if they’re sensitive enough to track something like a bomb blast, even if that’s what happened.”

Then there’s another unanswerable question: Would the government hesitate to release such an image for fear of revealing the satellite system’s ultraclassified capability?

4. Scenario: Hijacking?

Fact: Before it disappeared, radar data indicated the plane may have turned around to head back to Kuala Lumpur. Is that a clue that a hijacker had ordered the plane to change course?

Analysis: So far, there have been no reports that the flight crew sent any signals that a hijacking had occurred.


    



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“Magic” Collateral: A Frank Look At The Sheer Credit Horror About To Be Unleashed In China

While the world is terrified about what China – where corporate bond defaults are now permitted – may be about to unleash on the world, most are all too happy to remain in a state of delightful ignorance. We decided to take a peek behind the scenes.

Recall that as we have repeatedly shown in the calendar of coming Chinese bond default, on March 31, a borrower named “Magic” (no comment) is set to default on a CNY196 million Trust.

The default may or may not happen, as there is always a high likelihood it will simply be bailed out as has happened frequently in the past, but regardless of the final outcome, here is what is really going on behind the scenes. From Bank of America:

31 Mar 2014, Rmb196mn borrowed by Magic Property & arranged by CITIC Trust

 

Details: invested in an office building in Chongqing. The Chongqing developer ran into financial problems in mid-2013. CITIC Trust tried to auction the collateral but failed to do so because the developer has sold the collateral and also mortgaged it to a few other lenders.

 

Potential outcome: The developer and the trust company may share the repayment.

 

Reasons: 1) When CITIC Trust sold the product, it did not specify the underlying investment project. 2) The local government has intervened, fearing social unrest. A local buyer of a unit in the office building committed suicide as he/she could not obtain the title to the property due to the title dispute between the trust and the developer.

Please re-read that first part again:

CITIC Trust tried to auction the collateral but failed to do so because the developer has sold the collateral and also mortgaged it to a few other lenders.

So, “Magic” not only sold the collateral… but also mortgaged it to a few other lenders: lenders who count its as a perfectly performing asset when in reality they have zero claims to it. Did they steal that straight from the MF Global instruction manual?

Now add this:

“The local government has intervened, fearing social unrest. A local buyer of a unit in the office building committed suicide as he/she could not obtain the title to the property due to the title dispute between the trust and the developer.”

… and multiply by a few thousand since precisely this kind of gross abuse of underlying collateral is the main reason why China can magically create trillions in debt out of thin air with zero collateral constraints, each and every year, no questions asked.

Well, the time to ask a question or two has finally arrived.


    



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Bank Of England Restructures After FX Probe But Not Responsible “For Hunting For Rigging Of Markets”

“We can’t come out of this with a shadow of doubt about the integrity of the Bank of England,” Governor Mark Carney told MPs this morning on the heels of the report, as we noted here, that found no collusion by the bank to manipulate FX rates. A senior BoE employee was told of “attempts to move the market” but “did not convey to [Monetary Policy Committee member Paul Fisher] that markets were being rigged,” and therefore was suspended. While many have called this “as bad as Libor” the BoE remains adamant of its lack of involvement but is still restructuring itself – adding that “it isn’t our job to go out hunting for rigging of markets.” Nope, just to ignore it, we presume. MPs were not impressed.

 

Via The BBC,

The Bank of England will restructure following claims that some of its officials knew about alleged foreign exchange rate fixing.

 

Governor Mark Carney told MPs on the Treasury Committee that it would create a new deputy governor position with responsibility for markets and banking.

 

 

But he said it had no warning of the alleged manipulation before October.

 

The Bank currently has three deputy governors, with responsibility for monetary policy, financial stability and prudential regulation.

 

The Treasury Committee hearing was aimed at finding out what Bank officials knew of the alleged foreign exchange rate fixing claims.

 

 

Mr Carney said it had no information that anyone from the Bank condoned, facilitated or took part in market manipulation.

 

“We can’t come out of this with a shadow of doubt about the integrity of the Bank of England,” he added.

 

 

The bank said there was no evidence its staff had colluded to rig the market.

 

 

The minutes of meetings from 2006 were published last Wednesday following a Freedom of Information request.

 

They show that a senior member of the Bank of England’s staff was told of “attempts to move the market” at a meeting with senior foreign exchange dealers from some of the world’s largest banks.

 

Traders are alleged to have communicated with each other to agree the rate of exchange for foreign currency deals.

 

It is thought some traders may have used online chat rooms to set a benchmark for currency trades.

 

Andrea Leadsom said that the minutes should have set off alarm bells.

 

However, Monetary Policy Committee member Paul Fisher, also appearing in front of the committee, said those minutes “did not convey to me that markets were being rigged”.

 

“It isn’t our job to go out hunting for rigging of markets,” he adds.

But, as Bloomberg notes, this is far from over…

Uk Treasury Committee Chairman Tyrie Says Early Signs From Boe Response To Fx Rigging Allegations Are Not Encouraging


    



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Bitcoin Exchange ‘Faced 150,000 Hack Attacks Every Second’ Showing ‘Technology Risk’

DAILY PRICE REPORT
Today’s AM fix was USD 1,348.00, EUR 973.57 and GBP 810.44 per ounce.
Yesterday’s AM fix was USD 1,334.25, EUR 961.55 and GBP 800.87 per ounce.

Gold rose $0.7 or 0.05% yesterday, to $1,339.90/oz. Silver dropped $0.08 or 0.38% to $20.81/oz.

Gold in US Dollars – 1 Year (Bloomberg)

Gold rose in all currencies again today and headed towards a four month high in dollar terms as the standoff between Russia and Ukraine led to demand for gold as a haven. Silver surged 1.4%, platinum added 0.3% to $1,481.60/oz and palladium rose 0.3% to $777.80/oz.

Resistance is between $1,350 and $1,360 and above that at and $1,435 per ounce.

The U.S. and Europe are continuing to threaten Russia, the world’s biggest energy producer and miner of palladium, with economic sanctions for sending troops into Ukraine’s Crimea region. Ukraine’s new prime minister prepared to meet President Obama and western nations threatened further repercussions if Russia failed to defuse tensions.

In South Africa, more than 70,000 members of the Association of Mineworkers and Construction Union have been on strike since January. South Africa is the largest producer of platinum and second biggest for palladium after Russia.

Speculation that terrorism may have contributed to the missing plane in Malaysia may also be leading to a safe haven bid. Fingers are being pointed at Iran which could lead to renewed geopolitical tension between Iran and some western nations.

Bitcoin Exchange ‘Faced 150,000 Hack Attacks Every Second’
Mt. Gox’s lawyers confirmed yesterday that 750,000 Bitcoins belonging to the firm’s customers had gone “missing”, along with around 100,000 units that the company owned.

Bitcoin exchange Mt. Gox faced massive hacker offensives last month. It is alleged that it came under some 150,000 DDoS attacks per second for several days ahead of its spectacular failure.

The Tokyo based exchange, which filed for bankruptcy protection at the end of February, admitted that it has lost half a billion dollars in the digital currency. It has come under serious cyber attacks in particular since around February 7, the Yomiuri Shimbun reported.

While Mt. Gox faced hacker attempts to steal Bitcoins, the exchange also confronted massive distributed denial of service (DDoS) attacks, crippling its technology and systems, the Japanese newspaper said without naming its sources.

Under DDoS attacks, hackers hijack multiple computers to send a flood of data to the target, crippling computer systems. The attacks on Mt. Gox lasted for several days, the newspaper said.

Unlike physical gold bullion, Bitcoin is generated by complex chains of interactions among a huge network of computers around the planet. This creates advantages and disadvantages.

Bitcoin has huge dependency on systems and technology. In this, there is a resemblance with the modern digital banking system as the world is pushed towards a cashless society. Were hack attacks launched on banks, investment providers or exchanges, many of whom are now wholly dependent on website technology and user interfaces, and investors would be exposed and could incur losses.

Technological risk and systemic risk are another important reason to own physical gold coins and bars in segregated and allocated accounts. Having the ability to pick up a phone, fax or email and take delivery of bullion is also important.

Mark Karpeles, chief executive of Mt. Gox, apologised for the collapse at a news conference earlier this month, blaming a “weakness in our system”, but predicted that the market will grow.

Our modern financial system and its dependence on technology is far more vulnerable than is realised.

The 7 Key Bullion Storage Must Haves
A diversification into precious metals remains prudent and will again protect investors, both retail and institutional, pensions owners and savers, over the medium and long term. However, this is only the case if bullion owned is physical bullion coins and bars.

Download your copy of ‘7 Key Allocated Gold Storage Must Haves’ here.


    



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Yen Breaks 103, Sends Stocks Reeling

It’s all about the fun-durr-mentals… but, just in case you don’t believe that, this morning’s angst over copper financing and China credit concerns has sparked notable carry unwinds (USDJPY below 103 and AUDJPY 93) and therefore US equities are tumbling (tick for tick). This morning’s volatility in stocks was considerable around the open suggesting a lot of uncertainty and nervousness.

 

Charts: Bloomberg


    



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The Hiringless Non-Recovery In Full Farce

The latest JOLTS numbers are out, and while most economists look at the simple headline Job Openings number, which printed at a disappointing 3.974MM, below the expected 4.015MM, and a drop from the unrevised 3.990MM last month (conveniently revised lower to 3.914MM to make the sequential change appear as an increase), as well as down from the 4.126MM in November, far more interesting data can be found in the Hires and Separations data series. As we have shown before, when it comes to the “recovery” in the job market, there is no greater myth than “employers are finally looking to hire at past economic peak levels.” Because while the monthly job increase may have stabilized in the mid-100k range, the actual hiring is nowhere near close to where it should be based on historic patterns.

The chart below shows that while there has traditionally been near 100% correlation between the 1 year cumulative change in payrolls, and the monthly amount of job hires, in the New Normal this is anything but true.

The simple explanation: the only reason why it “seems” things have gotten back to normal, is not because there is hiring, but because companies have put a freeze on terminations, and with quality jobs few and far between, workers still refuse to leave existing jobs voluntarily, further confirmed by the Quits print which just dropped to 2.375MM, the lowest since October as confidence in finding a better paying job has rapidly evaporated. Perhaps the snow is to blame for that too?

Finally, confirming just how bad the job situation has gotten recently, here is the JOLTS chart of net turnover, i.e., hires less separations which is the functional equivalent of the NFP’s monthly job gains print, which according to JOLTS in January printed at the lowest level since August 2012.

Wait for it… wait for it… “Snow.”


    



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Chinese Credit Concerns Clobber Copper; Collapse Continues To Lowest Since July 2010

Copper futures prices are plunging once again, back under $3.00 back at the lowest levels since July 2010. The last 3 days have seen prices drop over 7.5% as China credit contagion concerns surge and letters-of-credit from last summer's cash-for-copper financing deals roll-off and businesses need the cash. The vicious circle of tumbling collateral values (copper and Iron ore) is exacerbating the tightening financial conditions in China as banks hoard liquidity, unwilling to lend to the over-capacity industries that the government has deemed unworthy. Rumors today of further defaults triggered this latest drop, and as we noted previously, there are a lot more to come.

Copper futures intraday are collapsing…

 

Which takes it back to July 2010 levels…

 

and LME Copper (where much of the L/C cash-for-copper deals were held) is also in freefall.

 

Rumors today of another Chinese corporate default, the second in a row are adding fuelt to the fire.  Via BusinessWeek,

Baoding Tianwei Baobian Electric Co. (600550)’s bonds and stock were suspended from trading today after the Chinese electrical equipment maker said it reported losses for a second year running.

 

The company, which also makes solar panels and is based in the northeast province of Hebei, reported a net loss of 5.23 billion yuan ($852 million) in 2013 versus a 1.55 billion yuan earnings deficit a year ago, according to a statement to the Shanghai stock exchange yesterday. The exchange, in line with its rules, will decide in seven trading days whether to continue the trading halt on Tianwei Baobian Electric’s bonds until its losses are reversed.

 

Investor scrutiny of China’s onshore bond market is mounting after Shanghai Chaori Solar Energy Science & Technology Co. last week became the first company to default. Chaori Solar’s failure to pay has stoked speculation more companies may miss debt deadlines also.

This should not be surprising – there are many more trusts and bonds to come…

As we warned previously,

Naturally, for an economy in which credit creation is of utmost importance, the loss of one such key financing channel will have very unintended consequences at best, and could potentially lead to a significant "credit event" in the world's fastest growing large economy at worst.

And don't look at what's coming down the shadow banking default pipelines, as we showed before. via BofA's David Cui

12 potential defaults reported by the media

Table 1 summarizes the information on the 12 major potential defaults in the trust industry that have been reported by the media. Most of them are coal mine related and heavily concentrated in one area, Shanxi Province. So far it seems to us that most of them may get extended upon the due date. The only exception over the next few months appears to be a product issued by China Credit Trust for a lead and zinc miner in Sichuan, Nonggeshan. Even without any major default over the next few months, the process of debt restructuring can be messy and weigh heavily on market sentiment.

19 Feb 2014, Rmb109mn borrowed by Liansheng & arranged by Jilin Trust

  • Details: This Rmb109mn tranche is part of a six-tranche trust product worth a total of Rmb973mn arranged by Jilin Trust for Liansheng, a Shanxi coal miner. The other five tranches have matured since 2H 2013 and remain overdue.
  • Potential outcome: Repayment may be extended.
  • Reason: Liansheng is undergoing a debt restructuring coordinated by the Shanxi provincial government. 1) The provincial government plans to help out involved financial institutions to ensure the region’s access to ongoing financing. According to people close to the situation, the implicit guarantee practice will most likely continue with the Liansheng’s case. 2) Trust companies may have to follow banks to help the miner out. Banks have agreed to extend their mid/long term loans by three years. Top 3 banks have total debts of Rmb10.6bn to Liansheng; top 3 trust lenders, Rmb3.7bn.

(Shanghai Securities News, 2/11; Economic Information, 2/13)

21 Feb 2014, Rmb500mn borrowed by Liansheng & arranged by Shanxi Trust

  • Potential outcome: repayment may be extended.
  • Reason: Same as the Jilin Trust case.

(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14)

07 Mar 2014, Rmb664mn borrowed by Liansheng & arranged by Changan Trust

  • Details: Other than the Rmb664mn product to mature on Mar 7, Changan Trust arranged another two products for Liansheng, totaling Rmb536mn which matured in Nov 2013. Both products remain overdue.
  • Potential outcome: repayment may be extended.
  • Reason: Same as the other Liansheng cases.

(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14)

31 Mar 2014, Rmb196mn borrowed by Magic Property & arranged by CITIC Trust

  • Details: invested in an office building in Chongqing. The Chongqing developer ran into financial problems in mid-2013. CITIC Trust tried to auction the collateral but failed to do so because the developer has sold the collateral and also mortgaged it to a few other lenders.
  • Potential outcome: The developer and the trust company may share the repayment.
  • Reasons: 1) When CITIC Trust sold the product, it did not specify the underlying investment project. 2) The local government has intervened, fearing social unrest. A local buyer of a unit in the office building committed suicide as he/she could not obtain the title to the property due to the title dispute between the trust and the developer.

(Source: Financial Planning Weekly, 3/6/2013; Guangzhou Daily, 4/6/2013, Boxun, 5/10/2013)

14 May 2014, Rmb1.5bn borrowed by Liansheng & arranged by China Jiangxi International Trust

  • Potential outcome: repayment may be extended.
  • Reason: Same as the other three Liansheng cases.

(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14)

30 May 2014, Rmb140mn borrowed by Nonggeshan & arranged by China Credit Trust

  • Details: invested in a lead and zinc mine in Sichuan.
  • Potential outcome: Likely to default.
  • Reasons: 1) Compared to coal mines of Zhenfu and Liansheng, the lead and zinc mine is a much less attractive asset: it is located in the mountains over 5,000 meters in altitude, inaccessible for 6 months of the year due to weather conditions, with low lead/zinc content; 2) According to an unnamed regulator, the central government is comfortable with trust defaults in the range of Rmb100-200mn.

(Source: 21st Century Business Herald, 31/7/2012; Caiing, 1/27)

25 Jul 2014, Rmb1.3bn borrowed by Xinbeifang & arranged by China Credit Trust

  • Details: Xinbeifang is another Shanxi coal miner.
  • Potential outcome: repayment may be extended.
  • Reason: Xinbeifang is negotiating with an SOE to sell some of its coal mine assets.

(Source: China Securities Journal, 1/15)

27 Jul 2014, Rmb319mn borrowed by Hongsheng & arranged by Huarong Trust

  • Details: Hongsheng is a Shanxi coal miner. Huarong sold another trust product for it which will mature in 4 September 2014, worth Rmb63mn.
  • Potential outcome: repayment may be extended.
  • Reason: Hongsheng may have assets to secure more financing. It issued these two trust products to replace another trust product that matured in Q3 2012. The owner also issued other trust products using his personal property assets as collateral and raised Rmb1.2bn.

(21st Century Business Herald, 20/12/2013)

7 Sept 2014: Rmb400mn borrowed by Zengdai & arranged by CCB Trust

  • Details: 1) The proceeds of the product were invested in financial markets. 2) Its 1st tranche, worth Rmb400mn, matured in Mar 2013 with a 38% loss vs. an expected return of 20-30%. Investors agreed to extend the maturity of the product to Sept 2014. 3) Its 2nd tranche, worth Rmb359mn, matured in June 2013 with a 31% loss vs. an expected return of 20-30%. Investors agreed to extend the maturity of the 2nd tranche to Dec 2014.
  • Potential outcome: The trust company and the investment company may share the losses.
  • Reasons: 1) The investment company refused to repay investors in full at the original due date so the trust company may have to chip in; 2) By Jan 2014, the 1st tranche reported a narrower loss of 24%, and the 2nd tranche, also a narrower loss of 13%; 3) Zengdai may pay on behalf of its investment company for reputation’s sake.

(Source: Securities Daily, 9/7/2013; CCB Trust)

20 Nov 2014, Rmb600mn borrowed by Liansheng & arranged by China Jiangxi Int'l Trust

  • Potential outcome: repayment may be extended.
  • Reason: Same as the other Liansheng cases.

(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14)

23 Dec2014: Rmb1.1bn borrowed by Xiaoyi Dewei & arranged by China Resources Trust

  • Details: Xiaoyi Dewei is a Shanxi coal miner. The trust product originally matured in Dec 2013 but repayment was extended to Dec 2014.
  • Potential outcome: Likely to default.
  • Reason: Both the miner and the trust company refused to repay investors in full at the original due date. There has been no reporting on asset sales by Xiaoyi Dewei.

(Source: Financial Planning Weekly, 11 Nov 2013)

15 Jan 2015, Rmb1.2bn borrowed by Hongsheng’s owner & arranged by Minmetals Trust

  • Details: the collateral is the Shanxi coal miner’s personal property assets.
  • Potential outcome: May be replaced by a new trust product.
  • Reason: Same as the July 2014 Rmb319mn trust product issued by Huarong Trust.

(21st Century Business Herald, 20/12/2013)

2Q/3Q 2014 – the next peak maturing period for collective trusts

We consider the trust market the most vulnerable part of the major financing channels for companies, i.e. loan, corporate bond and trust. The quality of the borrowers in the trust market tends to among the lowest. Within the trust market, collective trust products, i.e. those sold to more than one investor, tend to be risker than single trust products, i.e. those sold to a single investor. This is because investors in single trust products tend to be more substantial in resources, thus most likely more sophisticated in their risk control.

The Wind database lists close to 12,000 collective trust products, worth Rmb1.34tr, which cover roughly half of the collective trust market (Rmb2.72tr as of the end of 2013). It has reasonably good quality data series on the issuing dates and amounts raised. However, data on maturing dates are sporadic. We estimate that the average duration of the trust products is around 2 years. Based on this assumption and the issuing dates, we have mapped out a rough maturing profile of the collective trust market. As we can see from Chart 1, 2Q and 3Q this year will be the next peak maturing period for this market.

 


    



via Zero Hedge http://ift.tt/1g5lVKk Tyler Durden

Ukraine May Have To Go Nuclear, Says Kiev Lawmaker

"In the future, no matter how the situation is resolved in Crimea, we need a much stronger Ukraine," warned Pavlo Rizanenko, a member of the Ukrainian parliament, adding that "If you have nuclear weapons people don't invade you." It would seem tough for the West (and their START Treaty) to get behind a nation that, as USA Today reports, believes it may have to arm itself with nuclear weapons to enforce a security pact to reverse the Moscow-based takeover of Crimea. "We gave up nuclear weapons," (inherited from the Soviet Union) because of the 1991 agreement that The United States, Great Britain and Russia would "assure Ukraine's territorial integrity" but Rizanenko told his government today, "now there's a strong sentiment in Ukraine that we made a big mistake."

 

Via USA Today,

The United States, Great Britain and Russia agreed in a pact "to assure Ukraine's territorial integrity" in return for Ukraine giving up a nuclear arsenal it inherited from the Soviet Union after declaring independence in 1991, said Pavlo Rizanenko, a member of the Ukrainian parliament.

 

"We gave up nuclear weapons because of this agreement," said Rizanenko, a member of the Udar Party headed by Vitali Klitschko, a candidate for president. "Now there's a strong sentiment in Ukraine that we made a big mistake."

 

 

Rizanenko and others in Ukraine say the pact it made with the United States under President Bill Clinton was supposed to prevent such Russian invasions.

 

The pact was made after the Soviet Union dissolved in 1991 and became Russia, leaving the newly independent nation of Ukraine as the world's third largest nuclear weapons power.

 

 

To reassure the Ukrainians, the United States and leaders of the United Kingdom and Russia signed in 1994 the "Budapest Memorandum on Security Assurances" in which the signatories promised that none of them would threaten or use force to alter the territorial integrity or political independence of Ukraine.

 

They specifically pledged not to militarily occupy Ukraine. Although the pact was made binding according to international law, it said nothing that requires a nation to act against another that invades Ukraine.

 

The memorandum requires only that the signatories would "consult in the event a situation arises which raises a question concerning these commitments." Ukraine gave up thousands of nuclear warheads in return for the promise.

 

 

The U.S. and U.K. have said that the agreement remains binding and that they expect it to be treated "with utmost seriousness, and expect Russia to, as well."

 

 

"Everyone had this sentiment that for good or bad the United States would be the world police" and make sure that international order is maintained, Rizanenko said of the Budapest pact.

 

"Now that function is being abandoned by President Obama and because of that Russia invaded Crimea," he said.

 

"In the future, no matter how the situation is resolved in Crimea, we need a much stronger Ukraine," he said. "If you have nuclear weapons people don't invade you."

It would appear this is yet another line or "cost" that Obama will have to weigh but the rhetoric doesn't get much more aggressive than that…


    



via Zero Hedge http://ift.tt/1lSma3F Tyler Durden

The Devil Lurking In The Retail Store Closure Details

"US retail as we have known it for hundreds of years is in sharp decline," warns Bloomberg Brief's Rich Yamarone, adding that "market participants should take note of the fallout in a sputtering US economy." The retail apocalypse, as we discussed here, is dominated by mass layoffs, weak traffic, and poor wage growth and, as Yamarone highlights, it's not hard to see why…

 

Via Bloomberg Brief's Richard Yamarone,

The 13-week moving average pace of retail spending shown by the ICSC-Goldman Sachs Retail Chain Store Index is below that which traditionally signals a slowdown.

 

 

 

 

 

That a lot of the cash not being spent on the high street will show up in online sales is scant consolation for operators of existing infrastructure. There are ripple effects for the towns that surround it, and awful consequences for retail associates and their families.

 

The need for retail employees is essentially limited to clothing and footwear stores since apparel and shoes are not standard items with varying sizes, colors, and fabrics. For the more ubiquitous items like electronics or sporting goods, the need for a dedicated store or staff is diminished. During February, the number of employees at electronics and appliance stores fell by 12,000 to 503,700, while sporting goods, hobby, book and music stores furloughed 8,600 workers.

 

 

Ordering online means reduced foot traffic at malls. The year-over-year change in the ShopperTrak’s month-to-day Retail Traffic Index contracted by 5.2 percent in February – a weak trend that has been lingering for the last 12 months.

 

 

 

 

Economically speaking however, the bottom line remains fewer jobs, the ultimate determinant of income and spending. The broader decline of bricks and mortar retail, have to be factored into any serious forecasting of the direction of the U.S. economy.

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via Zero Hedge http://ift.tt/1iwYKAs Tyler Durden

Watch As Former Chris Christie Aide Bridget Anne Kelly Pleads The Fifth In Bridgegate

Moments ago, a hearing started in which the ongoing investigation of the George Washington bridge closure will focus on the role of Bridget Anne Kelly, Christe’s former deputy chief of staff. The state legislative committee investigating the matter seeks to retrieve subpoenaed documents from Bridget Anne Kelly, and Bill Stepien, his former campaign manager. Just like in the case of IRS commissioner Lois Lerner, so Kelly is expected to plead the fifth. Watch the hearing below.

As reported earlier by Bloomberg:

A New Jersey judge is set to hear arguments today over whether two former aides to Governor Chris Christie must comply with subpoenas by lawmakers seeking documents related to the George Washington Bridge traffic jams.

 

Bridget Anne Kelly and William Stepien asserted their constitutional right to silence, saying that producing documents would harm them in a criminal investigation by U.S. prosecutors. Kelly’s e-mail saying “Time for some traffic problems in Fort Lee” came almost a month before Christie allies directed the shutdown of access lanes to the bridge from Sept. 9 to Sept. 12.

 

A legislative committee investigating the lane closings has urged a judge in Trenton, New Jersey, to rule that the Fifth Amendment doesn’t protect Kelly and Stepien from having to produce documents. Superior Court Judge Mary Jacobson will decide whether they must hand over documents that could shed light on who ordered the tie-ups and why — questions that may imperil Christie’s possible White House bid in 2016.

And courtesy of NJ.com, here is a deeper look at they key players in this morning’s hearing in Trenton:

BRIDGET ANNE KELLY

Former deputy chief of staff to Gov. Chris Christie

Kelly was a longtime staffer to state Assemblyman David Russo (R-Bergen) before Christie hired her in 2010 as director of legislative relations. In April, Kelly, 41, was promoted to Christie’s deputy chief of staff for legislative and intergovernmental affairs, dealing with officials at all levels of government, faith-based and community groups and trade associations. But Christie fired her on Jan. 9 after emails surfaced showing she apparently had advance knowledge of the lane closures at the George Washington bridge. In a now-infamous email she sent weeks before the closures, Kelly said: “Time for some traffic problems in Fort Lee.”

MICHAEL CRTICHLEY SR.

Bridget Anne Kelly’s attorney

Described as having the style of “a professional fighter” who throws “questions like punches,” Critchley has represented clients as diverse as failed presidential candidate John Edwards’ mistress Rielle Hunter, the Archdiocese of Newark, and former Essex County Executive James Treffinger. He is perhaps best known for leading the defense team for 20 reputed members of the Lucchese crime family acquitted of racketeering charges in 1988. He represented Ridgefield Mayor Anthony Suarez, acquitted of bribery charges in the 2009 FBI sting that netted 46 politicians and rabbis. His pro bono work included a $5 million settlement from the state for a foster child abused by his family.

BILL STEPIEN

Christie’s former campaign manager

Stepien was one of Christie’s closest aides, the political ace who ran both of his campaigns for governor and a behind-the-scenes enforcer who kept Republican troops in line in every county and township. He cut his teeth working with Michael DuHaime, Christie’s top strategist, on Giuliani’s presidential campaign and other races. Stepien also worked closely with Bridget Anne Kelly; Christie fired Kelly and cut ties with Stepien as the bridge scandal began to unfold.

KEN MARINO

Bill Stepien’s attorney

A prominent criminal defense lawyer, Marino’s name often shows up in New Jersey’s biggest legal battles. He defended a Goldman Sachs programmer from West Orange accused of stealing the bank’s software code. He defended a West Windsor businessman accused of stealing $13 million in tax dollars and worker compensation premiums. He has represented cities and contractors fighting over millions of dollars.

JOHN WISNIEWKI

Democratic state Assemblyman from Middlesex County, co-chair of the New Jersey Legislative Select Committee on Investigation

Wisniewski, 51, served as Democratic state chairman from 2010-13, during which he honed his skills as the party’s main attack dog against Christie. Wisniewski also led Democrats’ successful effort to redraw the legislative district map, putting in place districts that have helped Democrats retain their majority in both houses of the Legislature. Since 2002, Wisniewski has chaired the Assembly’s influential transportation committee, which put him in place to help lead the investigation into the bridge controversy.

 LORETTA WEINBERG

Democratic state Senator from Bergen County

Weinberg, 79, is a 22-year veteran of the New Jersey Legislature. In 2009, then-Gov. Jon Corzine selected her as his running mate in his unsuccessful re-election bid against Christie. Weinberg, whose district includes Fort Lee, was among the first lawmakers to question why the lanes were closed, filing a public records request seeking information and documents related to the issue in November. She is now co-chair of the joint legislative committee investigating the scandal.

REID SCHAR

Attorney for the joint legislative committee

Schar gained prominence for being the federal prosecutor who led the corruption case against former Illinois Gov. Rod Blagojevich, who was found guilty of multiple corruption charges in June 2011 — including those related to his attempt to essentially sell the Illinois U.S. Senate seat that had been vacated by President Obama. Schar is now a partner at the law firm Jenner & Block LLP and co-chairs the firm’s “white collar defense and investigations practice.” He was hired in January as special counsel to the state legislative committee investigating the bridge controversy.

JUSTICE MARY C. JACOBSON

Superior Court judge

Jacobson, a 60-year-old Bayonne native, was appointed to a Superior Court justice in 2001 by then-Gov. Christie Whitman. She gained national attention last September when she ruled that New Jersey must allow same-sex marriages in the wake of the U.S. Supreme Court’s decision to overturn the Defense of Marriage Act.


    



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