Tag: finance

Despite Draghi’s explanation that a QE program in Europe (due to the greater extent of bank lending vs capital market financing) would not be “as efficient” as the Fed’s program, his comment that:

• *DRAGHI SAYS COUNCIL WILL REFLECT HARD ON DESIGN OF QE

Has provided just enough “hope” juice to drive the EUR lower and ramp bond and stock prices across Europe (for now). We will have to see what the half-life of this jawboning is.

EUR slides…

 

Bonds rip tighter in spreads…

 

and Stocks pop…

 

Amazing… just so much “faith” that they know what they are doing…

via Zero Hedge http://ift.tt/1k34qmo Tyler Durden

So much for those already abysmally low Q1 GDP forecasts. Moments ago, the Census Bureau released trade data for February which crushed expectations of an improvement from $39.1 billion (revised to $39.3 billion) to $38.5 billion, and instead rose 7.7% to $42.3 billion, the highest monthly trade deficit since September. This was driven by a 0.4% increase in imports to to $231.7 billion offset by a drop in exports of 1.1%  to $192.5 billion. The goods deficit increased $2.2 billion from January to $61.7 billion in February; the services surplus decreased $0.8 billion from January to $19.4 billion in February.

The breakdown of imports and exports:

Exports of goods and services decreased $2.0 billion in February to $190.4 billion, reflecting a decrease in exports of goods. Exports of services were nearly unchanged.

• The decrease in exports of goods mostly reflected decreases in industrial supplies and materials and in capital goods that were partly offset by increases in consumer goods and in other goods.
• Exports of services were nearly unchanged. Increases in other private services, which includes items such as business, professional, and technical services, insurance services, and financial services, and in royalties and license fees were mostly offset by a decrease in passenger fares.

Imports of goods and services increased $1.0 billion in February to $232.7 billion, mostly reflecting an increase in imports of services. Imports of goods also increased.

• The increase in imports of services was mainly accounted for by an increase in royalties and license fees, which included payments for the rights to broadcast the 2014 Winter Olympic Games.
• The increase in imports of goods mostly reflected an increase in automotive vehicles, parts, and engines. Capital goods decreased.

Perhaps all those impressed by America’s energy independence will be curious to know that the trade deficit excluding petroleum imports was $22.4 billion, in other quite a bit in total energy imports despite the shale boom, which according to some has peaked already. Some other energy trade related data:

• Feb. non-crude petroleum imports narrowed to $5.7b from $5.9b m/m; 22.8% of total petroleum imports
• Crude oil imports averaged 7.590M b/d in Feb. compared to 8.275M b/d in Jan.
• Oil imports from OPEC rose to 45.6% of the total
• Oil imported from Canada and Mexico was 46.2% of total in Feb. vs 46.9% in Jan.
• Petroleum deficit in real dollars at $11.9b in Feb.
• Petroleum exports fell in real dollars to $6,312b in Feb. after $7,151b in Jan

Finally, and most amusingly, in the breakdown of trade with regional partners, we find this pearl:

• The goods deficit with China decreased from $27.8 billion in January to $20.9 billion in February. Exports decreased $0.5 billion to $9.9 billion, and imports decreased $7.5 billion to $30.7 billion

So net deficit with China tumbled… at precisely the same time China reported its net surplus with the US soared! With so much data manipulation is it any wonder thee lies are just so glaring now?

Most notably however, is that as a result of this “unexpected” surge in the deficit, the Q1 GDP forecast cuts, anywhere between 0.2% and 0.4% are set to begin. To wit:

We are revising down our estimate of Q1 real #GDP growth to +2.0% from +3.1% previously in light of the deterioration in net exports.

— Joseph A. LaVorgna (@Lavorgnanomics) April 3, 2014

via Zero Hedge http://ift.tt/PpiUz0 Tyler Durden

Despite hope that this time is different, and after a few weeks of improvement that was extrapolated as back-to-the-status-quo for us all, initial jobless claims rose by their most week-over-week in 10 weeks, missed expectations, and hover just below the average of the last year. Not exactly the positive trend that so many would like to use to build their “so buy stocks” thesis. This follows ADP’s miss and the ISM reports’ internal jobs indices misses. Of course, a ‘bad’ claims data is great news for more un-tapering.. the bulls, let down by Draghi, now need Friday’s payroll data to be truly dismal.

 

via Zero Hedge http://ift.tt/Pp7GdM Tyler Durden

As we noted previously, there was a low expectation that Mario Draghi would unleash a much-hoped-for QE but we suspect the devil of the dovish details will come in the press conference when the bespectacled banker will prove that open-mouth operations and the promise of “whatever it takes” at some point in the future are just as powerful (for now) as any actual monetary policy. Rates lower for much much longer… studying negative rates… contemplating asset purchases… preparing to fire OMT… Euro is too strong comments… expect a wild ride… EURUSD is at 1.3760 as he starts.

 

via Zero Hedge http://ift.tt/Pp7Hys Tyler Durden

Yesterday when we reported that a “Furious Russia Will Retaliate Over “Illegal And Absurd” Payment Block By “Hostile” JPMorgan“, in which we explained that unlike previous responses to Russian sanctions by the West, which were largely taken as a joke by the Russian establishment, this time Russia is furious, we said that “we certainly can not be the only ones looking forward to the epic battle prospect that is Vlad “Shootin” Putin vs JP “Fail Whale” Morgan.” Alas the title fight lasted for just about a day, and was won, with a technical knock out in the first round, by none other than the former KGB spy who can now add the whale which manipulates all markets to its trophy case which includes about 100 statues of a crushed and beaten John Kerry. 

Because after shocking the world with its unilateral decision to halt Russian money transfers without a direct order from the administration, Reuters reports that JPM has folded and will process said payment from Russia’s embassy in Kazakhstan to insurance agency Sogaz, easing tension after Moscow accused the U.S. bank of illegally blocking the transaction under the pretext of sanctions.

In other words, Putin 1 – Jamie Dimon 0.

More from Reuters:

The confrontation threatened to further strain ties between Washington and Moscow, locked in the worst standoff since the Cold War over Russia’s annexation of Ukraine’s Crimea region.

 

“Following consultation with our regulators, we are processing this transaction,” JPMorgan said in a statement.

 

Last month, Washington imposed sanctions, including visa bans and asset freezes, against several Russians close to President Vladimir Putin and against Rossiya Bank, which it said was the “personal bank” for the leader’s inner circle.

 

The destination for the embassy payment was insurance agency Sogaz, which is 48.5 percent owned by Abros, a wholly-owned subsidiary of Bank Rossiya.

 

Industry consultants in Moscow say financial institutions are unclear about how to apply the new rules in some situations, such as when dealing with subsidiaries of companies which have either been sanctioned or which have shareholders that have been punished.

 

Several Western investors and their banks are facing quandaries over individual situations.

 

Guidelines on the U.S. Treasury department’s website from the U.S. Office of Foreign Assets Control says that property which is more than 50 percent owned by a person on the sanctions blacklist is affected and advises acting “with caution” when ownership interests are less than 50 percent.

 

“It is up to private companies and lawyers to figure out who is subject to sanctions,” said one Moscow-based lawyer. “Of course (a U.S. bank) is more scared of the American (authorities than the Russian ones).”

Needless to say, this is quite anticlimatic, as we were certainly looking forward to the discovery of JPM documents which would be released into the public domain following the imminent annexation of all JPM offices in Russia. Looks like we’ll have to wait a little longer.

Meanwhile, if even Jamie Dimon…. 

….can’t stand up to Putin…. who can?

via Zero Hedge http://ift.tt/1pVa3Cy Tyler Durden

All talk, no action. That’s what, as usual, happened at the ECB today where after much bluster and QE rhetoric from everyone including former permahawk Jens Weidmann, the ECB did precisely as most had expected. Nothing.

Monetary policy decisions

 

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.25%, 0.75% and 0.00% respectively.

 

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.

As for that rapidly deteriorating inflation chart in Europe, don’t worry. It will fix itself.

 

As will Europe’s non existant private sector loan creation.

 

Because quite frankly, the actual economy doesn’t matter as long as Greece can issue bonds at the same rate it did a decade ago, but only with 20% more unemployment.

Expect even more nothing from Draghi at the press conference next at 8:30 am.

via Zero Hedge http://ift.tt/PoT666 Tyler Durden

• Russia says expects answers on NATO troops in eastern Europe (Reuters)
• Dealers say GM customer anxiety rising, sales may take hit (Reuters)
• China Unveils Mini-Stimulus Measure (WSJ)
• Londoners Priced Out of Housing Blame Foreigners (BBG)
• New earthquake in Chile prompts tsunami alerts (Reuters)
• Ukrainian Billionaire Charged by U.S. With Bribe Scheme (BBG)
• Chinese Investments in U.S. Commercial Real Estate Surges (BBG)
• Old Math Casts Doubt on Accuracy of Oil Reserve Estimates (BBG)
• US secretly created ‘Cuban Twitter’ to stir unrest (AP)
• Gazprom’s $910 Billion Gaffe Shows Putin Economy Waning (BBG)
• Same old song:  Apple Bulls Bet New Products Will Bring Stock Revival  (BBG)
• ECB seen as unlikely to act despite deflation fears (FT)

 

Overnight Media Digest

WSJ

* General Motors Co Chief Executive Mary Barra withstood a second day of withering attacks from lawmakers, with one senator saying the nation’s largest auto maker should face criminal liability and another saying she needed to fix its “culture of coverup.” (http://ift.tt/1pSwvwa)

* Mary Barra learned late about faulty ignition switches. The larger an organization gets, the less likely it is that bad news will travel smoothly up the chain. At big corporations, say organizational experts, doing the right thing is often incompatible with pleasing the boss. (http://ift.tt/1sbVQ6c)

* Boeing Co said it will try to sell its new aerial refueling tanker to South Korea as its long-running battle with Airbus Group NV expands from commercial jets into specialized military aircraft. (http://ift.tt/1pSwwA2)

* Investors are snapping up low-rated securities backed by companies, home mortgages and car loans at a clip rarely seen since the financial crisis, as fund managers and others tire of paltry yields on safer assets. (http://ift.tt/1pSwvMx)

* Juniper Networks Inc is slashing its global workforce by 6 percent. The job cuts that will mostly occur immediately and largely affect middle-management roles. Activist shareholders Jana Partners and Elliott Management Corp have pushed for the network-gear company to make large cuts to costs and enact programs to return capital to shareholders. (http://ift.tt/1saZ8GM)

* The Internal Revenue Service’s plan to tax virtual currencies could crimp their use as an alternative to cash or credit for retail transactions. The IRS, in a ruling last week, said under existing law bitcoin and its brethren are property, not currency. That means anyone who spends bitcoin, even on a $2 cup of coffee, may have to pay taxes based on any “gain” over that bitcoin’s original value. (http://ift.tt/1saZaP6)

* Wausau Paper Corp said President and CEO Henry Newell has stepped down and Chairman Thomas Howatt plans to retire as the tissue company faces pressure from activist investors. (http://ift.tt/1saZ8GU)

* Frank Perkins Hixon pleaded guilty to insider trading on Wednesday, punctuating the downfall of the former senior deal maker at Evercore Group Llc. Hixon admitted he used confidential information from his job working on mergers and acquisitions at the investment bank in trades that netted himself more than $700,000. (http://ift.tt/1pUR76Q)

* Pacific Investment Management Co’s mutual funds suffered a 10th straight month of redemptions in March, although Pimco’s chief executive said there is no link between the firm’s management turmoil and the outflows. Investors pulled $7.3 billion out of Pimco last month, following outflows of $2.5 billion in February and $5.7 billion in January, to lift the first-quarter total to more than $15 billion, according to fund tracker Morningstar Inc. (http://ift.tt/1saZb5m)

* Accounting giant PricewaterhouseCoopers is expected to complete its acquisition of management-consulting firm Booz & Co Thursday and is renaming Booz “Strategy&.” The deal, announced last fall, is among the most prominent acquisitions by an accounting firm in years, and it furthers PwC’s recent push into the consulting field. (http://ift.tt/1pSwyYQ)

* Zillow Inc said it would begin providing real-estate listings for a Chinese real-estate portal, giving Chinese investors more access to the U.S. housing market. (http://ift.tt/1pSwwQL)

 

FT

The first quarterly figures show London’s house rates rose twice as fast as the rest of UK according to a property survey by Nationwide.

A study by Deloitte shows management shareholding in listings over the last three years was much higher than established listed companies.

A legal opinion by law firm Slaughter and May says that the Financial Conduct Authority could face three potential allegations of market abuse in the wake of a controversy over the leak of market sensitive probe by the regulator that led to a sell-off of insurers’ shares.

Danish bank Saxo Bank is set to back social trading, and argue that investors in the UK want to interact with others and share information.

U.S. investment bank Goldman Sachs Group Inc was fined 37 million euros ($50.94 million) by European regulators for running a cartel along with 11 other subsea power cable firms.

 

NYT

* Just as Citigroup Inc was putting a troubled past of taxpayer bailouts and risky investments behind it, the bank now finds itself in the government’s cross hairs again. Federal authorities have opened a criminal investigation into a recent $400 million fraud involving Citigroup’s Mexican unit, according to people briefed on the matter. (http://ift.tt/1pSwN64)

* After facing a House subcommittee investigating General Motors Co’s ignition-switch recall a day earlier, GM’s Chief Executive Mary Barra was bombarded with a more aggressive line of questioning by senators on Wednesday. (http://ift.tt/1pSwN6a)

* Amazon.com Inc is a retailer that makes and sells entertainment. On Wednesday, it took a big step toward a future in which shopping and video are tightly linked, perhaps even inseparable. The company began selling a device, Amazon Fire TV, that lets consumers watch Amazon’s extensive video library as well as play a wide array of games on their television sets. (http://ift.tt/1pSwM27)

* A prominent executive is leaving JPMorgan Chase & Co as her powerful trading operation has stopped performing up to expectations. The departure of Blythe Masters, the head of JPMorgan’s giant commodities unit, comes as the bank completes a sale of crucial parts of that business. (http://ift.tt/1pSwNmu)

* Chrysler, a unit of Fiat Chrysler Automobiles, is recalling more than 850,000 sport utility vehicles because of a possible braking problem. The recall covers the 2011 to 2014 Jeep Grand Cherokee and Dodge Durango models, including about 644,000 in the United States. (http://ift.tt/1pSwOXz)

 

Canada

THE GLOBE AND MAIL

* The political future of Toronto-area Conservative MP Eve Adams is uncertain after Prime Minister and Conservative party leader Stephen Harper ordered a party investigation into the power struggle that went behind an Ontario nomination. (http://ift.tt/1otq0Td)

* Two new cases of measles in Calgary area have taken the total number of infected people to five. The two individuals are from the Western Canada High School in Calgary, which was warned in late January of a measles exposure. (http://ift.tt/1mCHuHU)

Reports in the business section:

* In an effort to block Goldcorp Inc’s hostile bid, Osisko Mining Corp cut a complicated deal with Yamana Gold Inc and two Canadian pension funds. Toronto-based Yamana will use cash and its stock to buy a 50 percent interest in Osisko’s mining and exploration assets. (http://ift.tt/1otq3yd)

NATIONAL POST

* Toronto mayor Rob Ford was the sole vote against the city council’s motion on naming a city street in honor of Nelson Mandela. The decision surprised many members of the Toronto city council and ensued a huge commotion on social media. When reporters approached Ford on his surprising decision, he stood up in city council to say he voted the wrong way and asked for a re-vote. (http://ift.tt/1mCHvM1)

* An Alberta court has ruled against a constitutional challenge that opposes the provincial government’s monopoly on health care. Alberta Court of Queen’s bench ruled against a claim to obtain private health insurance, saying that an Albertan can’t rely on the Supreme Court’s 2005 Chaoulli decision because provincial law bans private health insurance. (http://ift.tt/1mCHvM9)

FINANCIAL POST

* Imperial Oil Ltd is struggling to work out manufacturing and installation-related defects at its $12.9 billion Kearl oil sands mine nearly one year after production began. (http://ift.tt/1mCHvMd)

* Home sales in the Vancouver region picked up in March compared to a year earlier. However, they were still well below the long-term average for the month, according to the city’s real estate board. (http://ift.tt/1otq3yr)

 

China

CHINA SECURITIES JOURNAL

– China will accelerate urbanisation in shanty towns to promote investment and consumption, Premier Li Keqiang said in the weekly State Council meeting. The move also aims to help boost the broader economy.

– Local securities firm Sealand Securities Co announced it will raise under 5 billion yuan ($805.72 million) via private placements. It will also issue corporate bonds for under 2 billion yuan.

SHANGHAI DAILY

– Shanghai will become the second city in the country after Beijing to introduce the China V-emission standards for new vehicles, starting April 30, in a bid to tackle air pollution.

21st CENTURY BUSINESS HERALD

– The National Development and Reform Commission has approved raising of transport fees by private-owned commercial rail operators such as Shenhua Energy. Shenhua will be able to charge a fee of 0.20 yuan per tonne, from 0.15 yuan per tonne, from April 1 for its Inner Mongolia-Shaanxi rail road.

CHINA DAILY

– China lacks a new engine of economic growth and is still in the process of developing news ways to stimulate the economy, said Guo Tianyang, director of the Research Center of the Chinese Banking Industry at the Central University of Finance and Economics in Beijing, while other analysts said the country’s bad debt is expected to increase.

– China may sell debt and is considering other ways to raise funds for combating climate change, an official at the country’s top economic planner said on Tuesday.

 

Britain

The Telegraph

SSE BOSS ATTACKS ‘SCAREMONGERING’ OVER ENERGY COMPETITION PROBE

(http://ift.tt/1mASaHb)

Energy companies should not “scaremonger” over the impact of a competition probe, the chief executive officer of SSE has said, in a thinly veiled attack on rival Centrica Plc .

BIDS FOR CHANNEL 5 EXPECTED TO BE LESS THAN HALF 700 MLN STG ASKING PRICE

(http://ift.tt/1mAS9mu)

The sale of Channel 5 is expected to attract bids of less than half the 700-million pound price tag attached to the broadcaster by its owner Richard Desmond, it can be disclosed.

The Guardian

MONEY SHOP OWNER DOLLAR FINANCIAL TO BE SOLD TO LONE STAR FOR $1.3 BLN

(http://ift.tt/1mASaHh)

Dollar Financial, the U.S. short-term lending specialist behind the Money Shop, Britain’s largest high-street payday lender, is to be sold to private equity house Lone Star for $1.3 billion.

LORD MYNERS FACES STRUGGLE TO OVERHAUL CO-OPERATIVE GROUP BOARD

(http://ift.tt/1k0Jmgn)

Lord Myners is facing an uphill struggle in the coming days to persuade members of the loss-making Co-operative Group Ltd to endorse his plans to overhaul its board and replace it with a plc-style structure.

The Times

GOOD NEWS AS ACCENTURE GOES ON HIRING SPREE

(http://ift.tt/1k0JkVM)

One of the world’s biggest management consultants, Accenture Plc, is to hire 2,000 people in the United Kingdom this year in a move hailed by the prime minister as “more good news for the British economy.”

GLENCORE, GERTLER AND CONGO’S LOST MILLIONS

(http://ift.tt/1k0Jmgp)

Glencore Xstrata helped to pave the way for a cut-price deal that has led to $71 million in mining royalties going to its joint venture partner instead of the world’s poorest country.

Sky News

COWDERY NETS 200,000 STG PROFIT AFTER FCA FIASCO

(http://ift.tt/1k0Jmgt)

The founder of the closed life insurer Resolution has netted a profit of almost 200,000 pound on shares he bought after last week’s botched launch of a probe into the sector by the City regulator.

NATIONWIDE – HOME PRICES UP 10 PCT IN LAST YEAR

(http://ift.tt/1k0JkVO)

Average house prices have risen by nearly 10 percent in the last year, according to a property survey. Nationwide said year-on-year prices were up 9.5 percent in March, the biggest annual jump since mid-2010

 

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Jobless claims for week of March 29 at 8:30–consensus 320K
International Trade Balance for February at 8:30–consensus -$38.8B
March ISM non-manufacturing index for March at 10:00–consensus 53.3

ANALYST RESEARCH

Upgrades

Acuity Brands (AYI) upgraded to Buy from Hold at Canaccord
Eli Lilly (LLY) upgraded to Outperform from Market Perform at Cowen
Intel (INTC) upgraded to Overweight from Neutral at Piper Jaffray
Monsanto (MON) upgraded to Overweight from Neutral at JPMorgan
Newfield Exploration (NFX) upgraded to Buy from Neutral at UBS
OpenTable (OPEN) upgraded to Buy from Neutral at Citigroup
Sun Bancorp (SNBC) upgraded to Neutral from Underperform at Sterne Agee
Willis Group (WSH) upgraded to Buy from Neutral at Nomura

Downgrades

BB&T (BBT) downgraded to Outperform from Strong Buy at Raymond James
Broadcom (BRCM) downgraded to Neutral from Overweight at Piper Jaffray
CF Industries (CF) downgraded to Neutral from Buy at Citigroup
CSX (CSX) downgraded to Equalweight from Overweight at Barclays
Cheniere Energy (LNG) downgraded to Neutral from Outperform at Credit Suisse
Citigroup (C) downgraded to Neutral from Buy at Sterne Agee
Deutsche Bank (DB) downgraded to Neutral from Overweight at JPMorgan
G&K Services (GK) downgraded to Neutral from Outperform at RW Baird
Marcus (MCS) downgraded to Neutral from Buy at B. Riley
National Retail Properties (NNN) downgraded to Sell from Neutral at UBS
Norfolk Southern (NSC) downgraded to Neutral from Overweight at Atlantic Equities
Orion Energy (OESX) downgraded to Hold from Buy at Ascendiant
VIVUS (VVUS) downgraded to Underweight from Neutral at Piper Jaffray

Initiations

Altera (ALTR) assumed with an Overweight at Piper Jaffray
Apollo Global (APO)initiated with an Outperform at Bernstein
BP (BP) initiated with a Market Perform at Cowen
Blackstone (BX) initiated with an Outperform at Bernstein
Cavium (CAVM) assumed with a Neutral at Piper Jaffray
Chevron (CVX) initiated with a Market Perform at BMO Capital
Chevron (CVX) initiated with an Outperform at Cowen
China Mobile Games (CMGE) initiated with an Overweight at Barclays
ConAgra (CAG) initiated with an Equal Weight at Morgan Stanley
ConocoPhillips (COP) initiated with a Market Perform at BMO Capital
ConocoPhillips (COP) initiated with a Market Perform at Cowen
Dollar General (DG) initiated with a Hold at Jefferies
Exxon Mobil (XOM) initiated with an Outperform at Cowen
Exxon Mobil (XOM) initiated with an Underperform at BMO Capital
J.M. Smucker (SJM) initiated with an Equal Weight at Morgan Stanley
KKR (KKR) initiated with an Outperform at Bernstein
Occidental Petroleum (OXY) initiated with an Outperform at Cowen
Petrobras (PBR) initiated with a Market Perform at BMO Capital
Royal Dutch Shell (RDS.A) initiated with a Market Perform at Cowen
Royal Dutch Shell (RDS.A) initiated with an Outperform at BMO Capital
Total (TOT) initiated with an Outperform at BMO Capital
Total (TOT) initiated with an Outperform at Cowen

COMPANY NEWS

Yahoo (YHOO) said all traffic between data centers now encrypted
Novartis (NVS) appointed Dirk Koshce as head of Novartis Pharmaceuticals, announced a third-party internal review of IITs, placed a temporary moratorium on all IIT funding in Japan
Credit Suisse (CS) announced charge of CHF 468M for litigation provision
Plug Power (PLUG) acquired ReliOn, which develops hydrogen fuel cell stack technology and fuel cell systems, for $4M
Fusion-io (FIO) announced a collaboration with Oracle (ORCL) on the development of flash-aware interfaces for MySQL
Cypress Semiconductor (CY) announced that CFO Brad Buss will retire later this year and said it sees Q1 revenue exceeding the high end of its previous $169M-$171M range

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Resources Connection (RECN)

Companies that missed consensus earnings expectations include:
Greenbrier (GBX), Texas Industries (TXI), Dominion Diamond (DDC), Mitcham Industries (MIND), National American University (NAUH)

NEWSPAPERS/WEBSITES

Federal authorities open up criminal probe of Citigroup’s (C) Mexican unit, NY Times reports
Boeing (BA) to cut as many as 300 Australian contrators, WSJ reports
RBS (RBS) to close 44 branches, Reuters says
Yelp (YELP) receives subpoenas monthly over users, WSJ reports
Sanofi (SNY) on lookout for acquisitions, expects growth in Africa, Reuters says
Google (GOOG) could ship up to 11M Chromebooks worldwide by 2019, DigiTimes says
Yahoo’s (YHOO) goal of raising encryption could clash with advertising, WSJ reports
Google’s (GOOG) LeBeau hired by Facebook (FB), TechCrunch reports

SYNDICATE

BG Medicine (BGMD) files to sell common stock
Catalyst Pharmaceutical (CPRX) files to sell common stock
Exact Sciences (EXAS) files to sell $125M in common stock
Kindred Biosciences (KIN) 3M share Secondary priced at $18.00
LDR Holding (LDRH) to sell 3.8M shares for holders
Tarena (TEDU) 15.3M share IPO priced at $9.00
Venaxis (APPY) files to sell common stock

via Zero Hedge http://ift.tt/PoT660 Tyler Durden

Being that markets are unrigged and all, at least according to every single proponent of HFT that is, futures have done their overnight levitation as they have every day for the past month driven by the one staple – the Yen carry trade – even if in recent days the broader market slump during the actual daytrading session mostly impacted biotechs yesterday. And since any news is good news, we don’t expect today’s main event, the ECB’s rate announcement and Draghi press conference, both of which are expected to announce nothing new despite Europe’s outright inflationary collapse which most recently dropped to 0.5%, the lowest since 2009.

Incidentally this is the new trend in central bank watching: yesterday JPM pushed back its “imminent” forecast for a BOJ QE boost to July, however adding that Kuroda may just as easily boost QE in May or June. In other words, the new forward guidance paradigm, now that quantiative forward guidance is dead, is don’t do anything rash or stupid, like shorting, because central banks can announce QE any moment. They won’t…. But they could.  And because deflation is a “temporary” phenomenon when it comes to the actual announcement of QE, like with the ECB today, which has jawboned about QE five ways from Sunday meaning it certainly won’t do it, but two to three months down the road, nobody knows, just buy into the manipulated, centrally-planned market like an obedient little Pavlovian dog.

Nikkei 225 (+0.84%) outperformed again, buoyed by another record close in the S&P 500, although reports of a mini-stimulus in China were offset by continued property curbs in Beijing which saw Shanghai Comp settle lower (-0.7%). Also of note, Chinese Non-Manufacturing PMI fell to 54.5 from 55.0 and HSBC Services PMI rose to 51.9 from 51.0. Stocks in Europe gradually edged lower as focus remained firmly on the looming ECB policy announcement, with Bunds also lower following the absorption of supply from Spain and France, both enjoying drop in funding costs.

In overnight markets, Asian equities are poised to close higher for the 7th straight session, and the 11th time in 14 days, led by the Nikkei (+1.3%). China’s authorities fleshed out detail of their mini-stimulus plan following yesterday’s State Council’s weekly meeting. The State Council said that the government will ease criteria for small micro firms to apply for tax concessions and that they will issue US$24bn worth of bonds to fund high speed rail development in the country’s western and central regions. A total of 6,600km or rail lines will be built this year. The government also announced measures to fund the construction of social housing and urban regeneration projects. Chinese rail and construction material stocks are up today but the overall Shanghai index is underperforming (-0.11%) the rest of Asia. It’s safe to say the news has been largely priced in over the last few weeks in equity and commodity markets. Staying in China, the latest service PMIs were contradictory in some respects, with the official release falling 0.5pts to 54.5 while the HSBC services PMI rose to 51.9 (from 51.0).

Looking ahead to today, the key focus will be the ECB meeting and Draghi’s press conference. All but 3 of 57 economists surveyed by Bloomberg expect the ECB to leave the main refinancing rate unchanged. Similarly, all bar 2 economists expect the ECB to leave deposit rates at zero %. In the European morning the final Euroarea services PMI (preliminary 52.4) will be released together with services PMIs in Italy (consensus: 52.3) and Spain (53.7). After the ECB, the US February trade report, jobless claims and the ISM nonmanufacturing are scheduled. Some economists may revise their estimates for Friday’s NFP depending on the outcome of the employment component of the ISM non-manufacturing.

 

Bulletin headline summary from Bloomberg and RanSquawk

• Treasuries steady, 5Y yields holding year YTD highs, 10Y highest since Jan., amid expectations tomorrow’s payrolls report will add to evidence weakness in 1Q eco data was due to abnormally bad weather.
• ECB announces rate decision today at 7:45am ET, Draghi press conference at 8:30am; analysts are split on any unconventional policy measures, with most expecting the central bank to keep rates on hold and keep a dovish tone
• China outlined a package of measures including railway spending and tax relief to support the economy and create jobs after a slowdown endangered Premier Li Keqiang’s target of 7.5% growth this year
• With Russian forces massed near the country’s border with Ukraine in a high state of readiness, NATO leaders warned that any incursion across the frontier would be a “historic mistake”
• Putin is now defying Obama in Syria by sending more and deadlier arms to help Bashar al-Assad score a string of advances against insurgents, military experts say
• U.K. Independence Party leader Nigel Farage won a second debate on EU membership with Deputy Prime Minister Nick Clegg, according to snap polls, raising  pressure on the larger parties that are committed to keeping Britain in the bloc.
• Sovereign yields higher. Asian stocks mixed, Nikkei +0.8% and Shanghai -0.7%. European equity markets mixed, U.S. stocks futures little changed. WTI crude, copper and gold lower

US Event Calendar

• 7:30am: Challenger Job Cuts, y/y, March (prior -24.4%)
• 7:30am: RBC Consumer Outlook Index, April (prior 51.8)
• 8:30am: Trade Balance, Feb., est. -$38.5b (prior -$39.1b)
• 8:30am: Initial Jobless Claims, March 29, est. 319k (prior 311k); Continuing Claims, March 22, est. 2.843m (prior 2.823m)
• 9:45am: Bloomberg Consumer Comfort, March 30 (prior -31.5)
• 9:45am: Markit U.S. Services PMI, March final, est. 55.5; (prior 55.5); Markit U.S. Composite PMI, March final (prior 55.8)
• 10:00am: ISM Non-Manufacturing Index, March, est. 53.5 (prior 51.6)
• 12:30pm: Fed’s Lockhart speaks in Miami
• 4:00pm: Fed’s Bullard meets reporters in St. Louis
• 11:00am: POMO – Fed to purchase $90m-$1.15b notes in 2036-2044 sector

EU & UK Headlines

Focus remained firmly on the looming ECB policy announcement this morning, with Bunds also failing to benefit from the absorption of supply from Spain and France, both enjoying drop in funding costs, and also somewhat mixed EU PMIs. Elsewhere, in spite of more hawkish comments by BoE’s Carney who said that  interest rates could increase ahead of next general election, UK Gilts have outperformed its peers following the release of weaker than expected UK Services PMI which fell to its lowest level since June 2013.

US Headlines

USTs traded steady this morning, with bull steepening in the front-end of the curve underpinning the cautious sentiment ahead of looming risk events. In swaps space, 4y has been particularly active ahead of the expected USD 1bln 4y deal launch by the World Bank later today.

Equities

Heading into the North American open, stocks in Europe are seen mixed, with financials outperforming in spite of the looming risk events (ECB later today and NFP on Friday). In spite of this, US equity futures are still pointing to a minor positive open.

FX

Despite the uncertainty surrounding the upcoming ECB policy announcement, GBP underperformed EUR this morning, underpinned by the release of weaker than expected UK Services PMI which fell to its lowest level since June 2013. Looking elsewhere, despite the cautious sentiment and unfavourable interest rate differential flows, USD/JPY remained better bid, holding onto gains made overnight.

Commodities

Heading into the North American cross over, both WTI and Brent crude futures are seen lower, though the price action this morning has been somewhat muted as attention remains on risk events due out later today and also Friday’s NFP report. In terms of latest commentary, Libyan rebels have agreed to hand over the Zueitina oil port to PM Theni in a ‘few days’ and have told the Libyan parliament ‘ready to open ports in 24-48 hours’. Elsewhere, the Iraqi crude Kirkuk–Ceyhan pipeline, which currently has a 300,000K bpd capacity out of a total potential 1.1mln bpd, has had its repairs delayed by attacks with exports remaining halted and Kurdish crude exports also delayed, according to North Oil.

In conclusion, here is the traditional event wrap up from DB’s Jim Reid

Will the ECB lead markets closer towards a monetary oasis today? They’ve been unpredictable of late but following their inaction at the February and March meetings, DB expects no hard policy changes today, with rates remaining at 0.25%. They do expect Draghi to push the “de facto loosening” argument in his press conference. This is the view that as the economic recovery comes through it will help raise inflation and so reduce real interest rates, easing policy. Another prong of “verbal loosening” could be the increased potential for QE, following on from Bundesbank President Jens Weidmann’s comments late last month that he could back QE under certain conditions. DB could see this twin track communication strategy of “de facto loosening” arguments and the mention of “other policy option potential” (negative deposit rates, asset purchases) to be the main takeaway from today’s meeting. Whilst market consensus also expects no change in the ECB policy rate there is a feeling that the recent disappointing inflation numbers (CPI inflation fell to 0.5% in March, its lowest rate since the 2009 recession) might increase the debate on further stimulus within the ECB, although here it’s probably useful to highlight that inflation hasn’t come in much lower than the ECB expected last month. Adding to the external debate yesterday was IMF Managing Director Christine Lagarde who said the ECB should do, “more monetary easing, including through unconventional measures,” to combat, “low-flation”.

In terms of markets, one of the main themes yesterday was the rise in UST yields, which was almost enough to stall the fortnight-long rally in emerging markets. The combination of better US data and benign political headlines was enough to send the intermediate part of the treasury curve up to 7 month highs in yield terms. Indeed the whole UST curve was a little weaker yesterday but the five year and seven year part of the UST curve shifted upwards by 6bp and 7bp respectively, bringing them both to within several basis points of the 2013 highs. Most of the move came after the release of the March ADP employment report where the headline came in broadly in line with consensus estimates (+191k vs 195k expected). But the bigger surprise was in the prior revisions where the February ADP number was revised upwards to 178k versus the original 139k print. In the detail of the report, construction, trade and transportation sectors recorded solid gains. Professional and business services (+53k) which captures a broad array of high-end and low-end service sectors, contributed the most to the headline number. Elsewhere US factory orders were better than expectations up +1.6% in February (vs +1.2% expected), rebounding from prior months where the weather made it harder for shippers to fill orders.

In overnight markets, Asian equities are poised to close higher for the 7th straight session, and the 11th time in 14 days, led by the Nikkei (+1.3%). China’s authorities fleshed out detail of their mini-stimulus plan following yesterday’s State Council’s weekly meeting. The State Council said that the government will ease criteria for small micro firms to apply for tax concessions and that they will issue US$24bn worth of bonds to fund high speed rail development in the country’s western and central regions. A total of 6,600km or rail lines will be built this year. The government also announced measures to fund the construction of social housing and urban regeneration projects. Chinese rail and construction material stocks are up today but the overall Shanghai index is underperforming (-0.11%) the rest of Asia. It’s safe to say the news has been largely priced in over the last few weeks in equity and commodity markets. Staying in China, the latest service PMIs were contradictory in some respects, with the official release falling 0.5pts to 54.5 while the HSBC services PMI rose to 51.9 (from 51.0).

Coming back to yesterday, there was a trio of Fed speakers who did little to stem the rise in treasuries. Of the three speakers, the comments from the St Louis Fed’s Bullard were perhaps the most surprising. Bullard, who is viewed as somewhat of a median between the hawks and doves, said he expects a rate hike in Q1 of 2015 and that he sees unemployment falling to 6% by December 2014. He also made some hawkish comments warning of asset bubbles and financial stability. Bullard is not a voter on the FOMC until 2016— at which point he says the fed funds rate will be at 4% or 4.25% which is towards the top end of the Fed’s “dot chart”. The Fed’s Lockhart reiterated that the hurdle for a change in the pace of QE tapering is high and he sees a hike in rates in the second half of 2015. The San Francisco’s John Williams said that rate hikes should start in the second half of 2015 and should stay extraordinarily low into 2017.

Emerging market equities strung together their 9th gain in a row, though yesterday’s 0.42% rise in the MSCI EM index was the smallest rise since the winning streak began. The backdrop of rising US rates and stronger data proved to be a bit of a drag for EM and there was some profit-taking in EMFX with BRL (-0.3%), MXN (-0.3%) and PLN (-0.04%) lower. The Russian complex underperformed (RUB -1%, MICEX -0.2%, 10yr bonds +12bp) after weak demand at a Russia bond auction. At the other end of the spectrum, Brazil’s Bovespa gained 2.85%, before the COPOM announced a 25bp rate hike. In Europe, aside from the ECB talk, there was plenty of focus on Greek bonds which rallied 26bp yesterday amid talk of Greece’s return to international bond markets and with Greek officials saying that the country’s 2015 fiscal gap was below EUR1bn (ekathimerini). Periphery government bonds outside of Greece were a little weaker yesterday though, as they took a breather following an impressive Q1 run. A recent FT article suggested that European banks now hold more sovereign debt than at any time since the eurozone crisis. Government debt accounted for 5.8% of their combined assets in February, up from 4.3% in January 2012. In Italy 10.2% of bank assets were government debt in February, up from 6.8% in January, while in Spain the figure has risen to 9.5% from 6.3%. In Portugal the figure has climbed to 7.4% from 4.6%, said the FT citing ECB data.

Looking ahead to today, the key focus will be the ECB meeting and Draghi’s press conference. All but 3 of 57 economists surveyed by Bloomberg expect the ECB to leave the main refinancing rate unchanged. Similarly, all bar 2 economists expect the ECB to leave deposit rates at zero %. In the European morning the final Euroarea services PMI (preliminary 52.4) will be released together with services PMIs in Italy (consensus: 52.3) and Spain (53.7). After the ECB, the US February trade report, jobless claims and the ISM nonmanufacturing are scheduled. Some economists may revise their estimates for Friday’s NFP depending on the outcome of the employment component of the ISM non-manufacturing.

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

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

So what exactly is a reverse mortgage?

In a nutshell, it’s a specific type of home equity loan available only to people aged 62 and over, which has the added benefit of not carrying any interest payments and is only due upon death or once the homeowner is no longer using it as a primary residence. As you can see, this might be viewed as an attractive cash flow option for older Americans who didn’t save for retirement. That could be a lot of people, considering that Fidelity estimates 48% of baby boomers have not put away enough to retire.

While I have covered the various ways in which Americans are scraping by in the current feudal economy, from food stamps and disability fraud, to student loans and living in mom and pop’s basement, this reverse mortgage thing is a piece of the puzzle I have been missing.

These mortgages are not insignificant either. According to Inside Mortgage Finance, originations were up 20% in 2013, hitting $15.3 billion. So when you see that older guy working the cashier at Wal-Mart and wonder to yourself how he is surviving, the answer may increasingly be a reverse mortgage.

Oh, and since the FHA is originating many of these loans, you the taxpayer will be on the hook!

Let’s start out with some excerpts from the U.S. Department of Housing and Urban Development’s post: Frequently Asked Questions about HUD’s Reverse Mortgages.

The Home Equity Conversion Mortgage (HECM) is FHA’s reverse mortgage program, which enables you to withdraw some of the equity in your home.  The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements and more.

 

1. What is a reverse mortgage?

 

A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you.  However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

 

5. What are the differences between a reverse mortgage and a home equity loan?

 

With a second mortgage, or a home equity line of credit, borrowers must make monthly payments on the principal and interest.  A reverse mortgage is different, because it pays you – there are no monthly principal and interest payments.  With a reverse mortgage, you are required to pay real estate taxes, utilities, and hazard and flood insurance premiums.

See there really is a magic money tree. Thanks FHA!

6. Will we have an estate that we can leave to heirs?

 

When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid.  All proceeds beyond the amount owed belong to your spouse or estate.  This means any remaining equity can be transferred to heirs.  No debt is passed along to the estate or heirs.

Moving along, we learn from the New York Post that:

Cash-strapped baby boomers, taking the TV advice of the Fonz and former US Sen. Fred Thompson, have opted for reverse mortgages in increasing numbers.

 

Inside Mortgage Finance, a trade publication covering the housing industry, said borrowers took out some $15.3 billion of these loans last year, an increase of 20 percent over 2012.

 

Reverse mortgages, which let homeowners age 62 and up borrow money against the value of their homes, have become a popular way for boomers without significant assets to fund retirement.

Is this something you’d expect to see five years into a genuine economic recovery, or it is a reaction to a ponzi consumption based economy plagued with zero income growth?

“I would only consider the reverse mortgage as a last resort. They cost a lot, and there are better ways to pay for retirement,” said Charles Hughes, a financial adviser.

 

“Gone are the days of gleefully burning the mortgage and passing the home on to the children,” he adds in a client publication.“They can be a valuable tool for those who need cash and have no other option,” says adviser Anthony Ogorek. Nevertheless, Ogorek asks clients to explore every option before taking the pricey loans.

 

Yes, a home with a reverse mortgage will never be foreclosed on in the owner’s lifetime. But it can be a different story for heirs, whom lending companies can strong-arm to pay the mortgage off in full after the borrower dies, under threat of foreclosure. At the very least, it means dealing with often-confusing red tape in a time of grief and stress.

 

For these unfortunates, a reverse mortgage was literally mortgaging the future.

USA! USA!

Reuters provided a similar perspective a couple of weeks ago:

U.S. baby boomers desperate for retirement income are increasingly turning back to a financial product that, after the housing bust, had been left for dead: the reverse mortgage.

 

Many retirees haven’t saved enough to cover expenses for the rest of their lives. But many of them have one major asset – a home. A reverse mortgage allows them to borrow against that, and they don’t have to make any payments on the loan until they move or die.

 

Borrowers took out $15.3 billion of the loans in 2013, an increase of 20 percent from the year before, according to industry publication Inside Mortgage Finance. The record year was 2009, when there were $30.21 billion of reverse mortgage loans made.

 

But at this stage, most bigger lenders are uncomfortable with the loans – for example, in 2011, Wells Fargo & Co and Bank of America backed out of the business. Wells has cited factors including unpredictable home values and the level of delinquencies as reasons for it to stay away from reverse mortgages.

 

The government agency that guarantees these loans, the U.S. Federal Housing Administration, found them to be risky, too. Losses on reverse mortgages were a big reason for the agency’s $1.7 billion taxpayer bailout last year – and some experts worry it could end up in similar trouble again.

 

“The FHA is at risk from these loans, and the taxpayers are at risk too,” said James Bothwell, a consultant and former chief operating officer of the Federal Home Loan Bank system.

Ah, always nice to see that the government is willing to put the taxpayer on the hook for loans so risky even the banksters won’t touch them.

Every day, 10,000 baby boomers turn 65, the traditional retirement age in the United States. And 48 percent of them report they are not on track to cover the basics in retirement, according to financial services company Fidelity. Sixty percent have less than $100,000 in retirement savings, estimates brokerage Charles Schwab Corp.

Walter’s larger rival, Ocwen Financial Corp, estimates the potential size of the reverse mortgage market at $1.9 trillion, leaving a lot of room for growth from the $90 billion of these loans outstanding at the end of September.

 

Lenders charge high fees for making these mortgages, and then bundle them into U.S. government-guaranteed bonds that are sold to investors. The margins on selling these loans can be three to five times the margins on regular mortgages, said Don Currie, president of lender High Tech Lending. Banks can also collect fees for performing tasks like sending out account statements to borrowers.

 

To tout the benefits of the product, reverse mortgage lenders have turned to Hollywood pitchmen. Liberty Home Equity Solutions, which Ocwen purchased in April 2013, uses Robert Wagner, star of the “Hart to Hart” television series, in its advertisements. Commercials for Quicken Loans’ One Reverse Mortgage featured “Happy Days” star Henry Winkler. Fred Thompson, a former U.S. Senator and star on television’s Law & Order series, promotes loans for American Advisors Group.

Hollywood, good for pumping Obamacare and reverse mortgages. Nice.

“There are lots of mortgage lenders who see declining volumes and may view (reverse mortgages) as an opportunity to increase revenues,” said David Stevens, president of the MBA and a former commissioner of the FHA.

 

For some homeowners, reverse mortgages can fill a real need. Janie Baratta, 63, was getting hounded by bill collectors after her husband died in 2012. The former biological researcher at the University of California at Irvine had $50,000 in credit card bills she had run up during his illness, and there was still a $1,500 mortgage on her three-bedroom ranch in Irvine, California. Her $4,000 pension and social security were not enough to cover her expenses.

 

Then in 2012, she got a $300,000 reverse mortgage from High Tech Lending. Today, her credit cards are paid off. So is her regular home loan.

 

Reverse mortgages also discourage elderly homeowners from undertaking repairs and maintenance that someone else might do more proactively, said Mark Calabria, a former staff member of the Senate Banking Committee. That can hurt the value of the property, which in turn cuts into the proceeds that lenders will receive when it comes time to sell the home, leaving the FHA potentially on the hook because of its guarantee.

Still confused? Don’t worry, former U.S. Senator Fred Thomson is here to clear things up for ya.

Nice touch with the goatee, Fred. Really makes you seemed connected with the average man on the street.

Pay close attention to this trend. I expect it to become increasingly covered in the mainstream media.

What a joke.

via Zero Hedge http://ift.tt/QHgzRi Tyler Durden

As noted previous articles… the global central banks have begun to realize that the success of their reflationary efforts has resulted in yet another speculative bubble in asset classes, specifically stocks and real estate.

 

Nowhere are these issues more evident today than in China.

 

Many commentators have spent a great deal of ink proclaiming China to be the next great economic power. While it is true China has seen dramatic improvements in its economy over the last 30 years, my view has been and remains that most of the “growth” of the China “miracle” is just a debt-fueled bubble built upon a loose foundation of Government corruption and fraud.

 

The reason 99% of investors fail to see this is because:

 

1)   They believe Chinese economic data as gospel.

2)   They fail to understand China’s economic policies from a political perspective.

 

Regarding #1, Chinese economic data is absurdly gimmicked to the point of making the US’s look clean in comparison (no small feat).  Indeed, back in 2007, no less than current First Vice Premiere of China, Li Keqiang, admitted to the US ambassador to China that ALL Chinese data, outside of electricity consumption, railroad cargo, and bank lending is for “reference only.”

 

Put another way, one of the top-level Chinese politicians admitted in private that China’s economic data is a total fiction. However, the reality is even worse than this admission. The truth is that even China’s electrical consumption data is dodgy at best as it has become a political tool for the Chinese Government to illustrate its “growth” much like China’s GDP.

 

The reason for this economic gimmicking pertains to #2 above: the political perspective of China’s economic data. As a communist regime, China’s government has one focus and one focus only. It’s not economic growth for growth’s sake, nor is it improving the quality of life for China’s population.

 

No, China’s Government is obsessed solely with remaining in power.

 

The reasoning for this is that a Government job remains the easiest, cushiest means of becoming wealthy in the People’s Republic. Case in point, last year Chinese officials are known to have stolen at a minimum the equivalent of $157 billion.

 

The CDIC report, which was obtained by the Economic Observer newspaper, suggested that nearly 10,000 luxury homes had been sold by government officials in Guangzhou and Shanghai alone last year.

 

It also claimed that an astonishing $1 trillion (£630 billion), equivalent to 40 per cent of Britain's annual GDP, had been smuggled out of China illegally in 2012.

 

Economists and experts cast doubt on the figure, but said the flow of money from China was dramatic. Li Chengyan, a professor at Peking University, suggested that a total of roughly 10,000 officials had absconded from China with as much as £100 billion.

 

http://ift.tt/13Z0sAC

 

To put the above numbers in perspective, this theft is equal to roughly 2% of China’s total GDP. On a per official basis, we’re looking at roughly $15.7 million… not over the course of a decade but in ONE year.

 

In contrast, the average college graduate in China makes $2,500 per year. So you’re talking about an average theft equal to over 6,250 years’ worth of work for a college educated Chinese civilian.

 

A few other indications of just who is getting ahead in China:

 

• Immediate family members of Premiere Wen Jiabao control assets worth at least $2.7 billion.
• Gong Aiai, a deputy chief of a county bank, (not even a major bank) was found to have assets worth $160.2 million.
• Zhang Xiuting, an anticorruption official, is currently under investigation for amassing 19 properties along with his former wife.

 

In simple terms, many, if not most of the people who have gotten wealthy in China over the last few decades were corrupt Government officials or those close to them. In this light, you can see that China’s Governmental policies are all really aimed at one issue: keeping the Government in power by keeping the Chinese population content enough not to demand real change.

 

All other issues (economic growth, improved air quality, stimulus projects, etc.) are secondary to this issue. And the single biggest threat to Chinese officials’ abilities to live high on the hog is inflation.

 

Nearly 40% of China lives off of $2 a day. Your average college graduate in China makes just $2,500 per year. In an economy such as this, a rise in prices in costs of living can be devastating for the population.

 

Inflation is a stealth tax and one that is terrifying officials in China. Note the recent publicity campaigns to crack down on corruption and maintain price stability. Whenever things reach a boiling point, we could very well see a “China Spring” similar to the Arab Spring that shook the Middle East in late 2010/ early 2011.

 

This concludes this article, swing by http://ift.tt/RQfggo for a number of FREE investment reports including Protect Your Portfolio, How to Buy Gold at $273 per Ounce, and What Europe’s Crisis Means For You and Your Savings.

 

Best Regards

 

Phoenix Capital Research

 

 

 

 

 

 

 

via Zero Hedge http://ift.tt/1pRpjjN Phoenix Capital Research