Junk Soup: UBS Unloaded Rotten Securities on Leipzig
An investigation by the United States Securities and Exchange Commission has revealed for the first time the methods with which the Swiss investment bank UBS sought to palm off bad debt securities on German municipalities. It succeeded in Leipzig.
The American banker couldn’t even pronounce the name of his German client when he appeared for the interview on the morning of Sept. 20, 2012: Kommunale Wasserwerke Leipzig, quite a tongue twister for a Wall Street man. But it wouldn’t make much difference, he reasoned, because hardly anyone in America was likely to have heard of it before.
By the afternoon of the next day, after undergoing 12 hours of questioning by the American financial regulatory agency, the Securities and Exchange Commission (SEC), John Simon* knew he was mistaken. SEC enforcement division lawyer Andrew H. Feller was in fact very well informed, after having read through emails and call logs, and he knew whom Simon had met in New York, London and South Africa. The SEC attorney could even pronounce the name of the city of Leipzig’s water utility relatively well.
Feller had spent two years investigating the methods Simon had used to develop risky deals involving water treatment plants in the eastern German state of Saxony for UBS, a major Swiss bank. In the end, Leipzig faced potential losses of €300 million ($400 million), joining the ranks of many German municipalities that had lost vast sums of money in complex Wall Street deals.
There had already been a number of court cases to examine the ways in which local politicians in Germany had been led astray in global financial markets. The SEC investigation now outlined a more comprehensive picture and shed light on the dubious role played by the banks. When the SEC in Washington concludes its investigation, known by its file No. 11728, it will likely lead to a reassessment of the actions of German cities before and during the financial crisis.
Were City Managers Duped?
Until now, it was widely felt that local politicians and the managers of their municipal operations often had only themselves to blame. With a mixture of naïveté and greed, they had bought financial products of which they understood neither the names nor the risks they were taking by making those investments.
It is now emerging that international bankers developed aggressive strategies to dispose of toxic securities by selling them to German municipalities. It appears the banks deliberately targeted inexperienced provincial managers and sold them bad deals from which only the banks could profit.
Internal bank documents and court records show that shortly before the financial crisis began, UBS apparently sold securities to the city of Leipzig for which the risks were almost impossible to calculate, earning a sizeable profit in the process. "The supposed transaction only served the purposes of banks and criminal racketeers and is null and void, as far as we are concerned," says current Leipzig Mayor Burkhard Jung, a member of the center-left Social Democratic Party (SPD).
It was too late by the time city managers realized that in order to insure their sewage treatment plants, they were to be liable for the mortgage-backed securities of American banks.
Much is at stake. If the SEC can prove that the bankers acted fraudulently, other investment banks could also face consequences resulting from past deals. In Berlin, J.P. Morgan is claiming €155 million from a similar deal with the city’s public transport authority. In the case of the Leipzig water utility, UBS will likely be slapped with substantial fines. Leipzig, on the other hand, will probably not be ordered to pay the €300 million the Swiss bank has sought to recover in a lawsuit filed against the city.
A City Discovers Turbo-Capitalism
The story began in the late 1990s, when local politicians and the managers of municipal operations discovered turbo-capitalism, along with its seemingly endless possibilities for increasing wealth. Cross-border leasing was the magic word.
In the transactions, cities sold their infrastructure to US financial investors, who then leased the facilities back to the municipal governments. It was purely an accounting transaction that promised to benefit everyone involved, or at least it seemed that way. The investors benefited by reducing their US tax liability, and they passed on a portion of these savings to the municipalities in the form of "cash value benefits."
Leipzig was a particularly avid participant in the game. First city officials sold off the convention center, followed by the city’s streetcars. Sewage networks and sewage treatment plants were also targeted for sale to American investors.
Moving More than Water
Klaus Heininger was especially fascinated by this business model. The head of Kommunale Wasserwerke Leipzig (KWL) had moved to Leipzig from Bavaria. Self-confident, risk-taking managers like Heininger were in great demand there at the time. But soon Heininger realized that the classic business of managing the city’s water supply was no longer sufficiently attractive. "We move more than water," was his motto.
Starting in 2000, he began moving hundreds of millions of euros back and forth. Banks, trusts and offshore companies around the world became involved in the business of selling and leasing back Leipzig’s sewage networks and wastewater treatment plants. The deal went through and initially provided Leipzig with €22 million in revenues.
Meanwhile in New York, financial managers were developing new ideas to keep the lucrative business with European municipalities going. Simon was one of the hundreds of determined men and women rushing around Wall Street with oversized cardboard cups of coffee in their hands. It was before the crash, when everything seemed possible and even the most absurd-seeming financial products promised to develop into enormous deals. A former business partner referred to Simon as "a cool guy who can sniff out a good deal right away," someone who meant $30 million when he said 30 bucks.
Simon had gone to law school in the early 1990s. Later, working for the investment bank Credit Suisse First Boston, he set up cross-border leasing arrangements with European cities for US investors. He moved to UBS in 2002, where he also worked with municipalities.
But the golden days of cross-border leasing were over. The US government had closed the tax loophole in 2004, thereby obstructing new deals with European cities.
A Bank Unloads Its Risks
Simon and his department developed a new business model, code-named "Matilda." The investment bankers set their sights on existing deals with European customers in order to sell them new financial products: special credit derivatives to supposedly hedge the old lease agreements.
For UBS, this type of transaction had several benefits. For one thing, it provided the bank with substantial commissions and fees. Besides, it enabled UBS to use the products to unload its own risks onto the municipalities.
All Simon needed now were customers onto whom he could palm off a high-risk product that was in fact more of a time bomb than an insurance policy. The UBS manager knew who could help him: two German investment bankers with whom he had set up cross-border leasing arrangements at Credit Suisse First Boston in the past. They had since established a small, discreet company in Switzerland called Value Partners.
On April 10, 2006, Simon wrote his first email about the Matilda project to Value Partners. He wrote that UBS wanted to offer special credit derivatives known as Collateralized Debt Obligations (CDO) within the context of cross-border leasing. The CDOs could serve as an insurance policy if there were problems with the municipal facilities that had been sold and leased back.
The best part of it was that the offer would initially cost the customers nothing and in fact provide them with profits — as long as they hedged the bank’s risks in return.
It didn’t take the two Germans long to identify a potential client. In an April 19 email, they wrote to KWL’s Heininger, with whom they were familiar from earlier leasing deals. There were ways to "optimize" the existing lease agreements, they explained.
Part 2: Internal UBS Fears of ‘Risk to Our Reputation’
Soon afterwards, Value Partners was able to report positive signals from Leipzig: "Our client is very much money minded — so please make sure your colleagues are pricing very competitive and fast," one of the emails to Simon reads. Apparently Simon complied, informing his UBS colleagues that if a deal were reached, the client stood to make between "$22 and 28 million" and that "there will likely be a similar fees for the firm." By firm he meant UBS.
Things happened very quickly after that. In early May 2006, Heininger attended a meeting at the UBS branch in London, the center of European investment banking. Simon had flown in from New York for the meeting.
A Witch’s Cauldron at UBS
Paul Valota* of the Exotic Desk, as the bank’s internal witch’s cauldron was known, handled the presentation. Although Valota and his UBS colleagues reportedly mentioned risks, they did so with a highly placating tone, as Heininger recalls today. "The world would end before risks are realized here," the bankers reportedly said.
But things didn’t go quite as smoothly as that. KWL’s attorneys, for example, reportedly voiced their concerns about the deal. They argued the financial risks were too great, and in doing so they struck a nerve. The UBS bankers disagreed. The financial products were structured in such a way — for good reason, from their point of view — that "UBS" would "benefit the most if the customer suffers losses," Valota wrote to his colleagues.
There was also growing resistance within the bank. The UBS loan auditing division allegedly submitted its veto, saying that it doubted whether the German clients were capable of properly assessing the risks, and feared a "risk to our reputation in the event of losses."
To exert pressure within the bank, Simon allegedly brought in his superiors. The banker responsible for risk products, Simon is said to have told his team soon afterwards, had gotten involved "to ‘force’ Internal Credit to revise its initial decision and approve the deal."
Bank Auditors Unconvinced
German UBS managers also campaigned for the deal. "Based on everything we know, this is a suitable transaction," a Frankfurt banker in charge of municipal deals wrote in an email to London. But the Frankfurt team couldn’t have gathered much information by that point. Its response was received at 12:58 p.m. on June 7, all of three minutes after the inquiry from London had been sent.
But the bank’s auditors still weren’t convinced, so Simon and his colleagues played their last trump card. They allegedly asked the brokers at Value Partners to state — untruthfully — that they had developed the deal themselves and offered it to KWL, that they had also familiarized KWL with all the risks involved and that only then had Value Partners approached UBS with Heininger’s mandate.
On June 8, 2006, one of the Value Partners brokers signed this bogus statement, which was sufficient to set aside the UBS auditors’ objections. UBS was now no longer responsible for the risky deal, at least on paper. The deal was perfect a few minutes later, and the first of four CDO transactions with KWL was signed in London.
Simon’s bosses were pleased. "It is this type of collaborative effort that we in the IB want to see… On behalf of the management here, we thank you," a senior UBS investment banker wrote to Simon a day later. Another bank manager was already thinking about further projects. "Please let us stay connected to Value partners and involved with future transactions. Nice work," he wrote.
The deal had also been worthwhile for Simon’s contacts at Value Partners and Heininger. Two weeks after it was signed, UBS transferred $21.1 million to an American trust account for KWL. Value Partners had power of attorney for the account. On the same day, its advisors transferred $3.2 million to an offshore company in the Caribbean, which then forwarded the funds to Heininger’s private account with a bank in Liechtenstein.
A few months later, the winners in the deal met to celebrate on the Cape of Good Hope in South Africa. Value Partners had invited the UBS bankers to a safari and a wine-tasting event. Simon and Valota posed for pictures with the hosts. The photos depict the men, smiling and looking triumphant, drinking toasts with red wine and waving around rifles like big game hunters in the savannah.
Heininger wasn’t there. He had already served his purpose, since the deal with Leipzig was intended to open the door to a new global market. Value Partners already had its sights set on potential UBS clients, including municipal and government companies in Austria, Hong Kong and Singapore.
But then the financial crisis erupted, and the CDOs proved to be a high-risk product that caused substantial losses for cities and their enterprises.
It was already late in the game when Leipzig Mayor Jung realized what a time bomb his city was sitting on. The deal had been carefully concealed. The funds were transferred through the US State of Delaware, a corporate tax haven, while the transactions were posted to accounts in London, to which there was no reference whatsoever in the Leipzig accounts. Only when the losses incurred by the secret London accounts were uncovered was the extent of the problem exposed. In December 2009 UBS, for the first time, presented the city of Leipzig with a bill for €20 million.
Now the city’s auditors discovered that Heininger’s deal had created uncontainable risks for Leipzig. As it turned out, the securities were no real insurance for cross-border leasing agreements. The banks had allegedly fabricated this explanation, probably because they believed that anyone who could be talked into a risky deal without understanding it could be fooled a second time.
As it turned out, the CDO products held by KWL were nothing but a melting pot for toxic financial securities. As the collapse of the US real estate market approached, UBS began adding more high-risk candidates to the mix. The list reads like a who’s who of crash candidates. It begins with Lehman Brothers and the US mortgage bank Freddie Mac, followed by Iceland’s Kaupthing Bank, the US bank Washington Mutual and, finally, in the fall of 2007, US mortgage lender Fannie Mae. They were all bankrupt a year later. By 2010, 13 securities were completely worthless; UBS added eight of those to the Leipzig portfolio after it had signed the contract to buy the CDOs.
Leipzig’s mayor has come up with a fitting analogy. "Imagine the following," he says. "To pay the mortgage insurance for your single-family home, you assume the credit insurance for a skyscraper in an earthquake zone."
Heininger and his advisors at Value Partners were arrested on corruption charges in the spring of 2010.
Simon in faraway New York became nervous. In March 2010, he wrote to an acquaintance: "Enter ‘UBS and Value Partners’ into your web browser. Something will come up in German, but then just click on ‘translate’ next to the articles. The transaction that I worked on with former friends/colleagues more or less turned into Germany’s Bernie Madoff scandal."
Bernard Madoff had defrauded New York investors out of $65 million and was sentenced to life in prison in 2009. It was very disconcerting to him, Simon wrote, that "the original idea came from me."
A Conviction over a $3 Million Bribe
An email written by one of Simon’s associates two months later could well pose far more of a problem for UBS. The associate, a financial advisor, had informed Simon that a Value Partners employee was still in custody, because he was considered a flight risk, and had allegedly confessed to having distributed fees and "bribed Heininger with about $3 million." He found it hard to believe, he added, "that UBS was blind to where these amounts were going."
The German judiciary had little interest in the global aspects behind what appeared to be a local corruption scandal. For the judges in Saxony, the confessions by Heininger and his advisors meant that the matter was closed. On Jan. 19, 2011, the Leipzig regional court sentenced Heininger to four years and 11 months in prison for accepting bribes, and the other advisors to three years in prison for bribery. UBS had managed to avoid prosecution once again.
That is now likely to change. The SEC began investigating UBS for its involvement in the Leipzig CDO deal in 2011. Feller and two other SEC investigators examined many emails and draft agreements and interviewed witnesses in New York, London and Berlin.
The SEC has no official comment on the allegations, and UBS and KWL, citing the pending case, also have no comment. UBS bankers Simon and Valota, who were involved in the Leipzig deal at the time, did not respond to inquiries, while their former boss let it be known, through his current employer’s spokesman, that he had "no comment."
UBS is already reducing the relative importance of its investment banking operation and slashing jobs. The Leipzig team has been eliminated. Simon now works for a law firm in Cincinnati, Ohio, as head of the firm’s structured lending department. Valota and his former bosses have also found new jobs in the financial sector.
Meanwhile, Heininger is in court again, together the Value Partners advisors. A regional court in Dresden has been hearing the case for almost a year, but this time it is not only corruption that is at issue, but also the exorbitant financial loss to the city of Leipzig.
UBS plays only a marginal role in the case, and German financial regulators have not even addressed the Leipzig transactions.
* Names changed by the editors
Translated from the German by Christopher Sultan
Statistics: Posted by yoda — Tue Jun 18, 2013 1:24 pm
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Memo to the G8: the global economy’s about to fall apart
Posted on 18 June 2013
Self-satisfied and sanctimonious the G8 world leaders descended on Northern Ireland this week to solve the problems of the world over dinner and walks between Ireland’s inevitable rain showers.
It’s great propaganda but nothing more. Down in the bowels of the global economy something very nasty is stirring. The addiction to money printing and stimulus is about to cause a very unpleasant reaction.
The worst cases are in Asia so it is easy enough to ignore on Western TV, and China and Japan are only too happy to play along with the show.
In Japan money printing is a failure. It has actually driven up interest rates. The banks are dumping government bonds because interest rates are rising and they fear inflation.
That’s not supposed to happen. They are supposed to sit tight while the government depresses rates. The yen is strengthening, and that’s bad for exporters.
In China the burden of debt is becoming intolerable too. China hid its borrowing in an unregulated shadow banking colossus that is now about to fall apart with the biggest financial crash in history.
Neither Japan nor China is some small side show like Greece. These are the world’s second and third largest economies. China, in particular helped to drag the world out of the 2008-9 economic crisis. Now she is about to go bust.
Economists don’t handle this sort of information well. They prefer to extend existing trends, not predict new ones. Scenarios are about as good as they can manage.
Well what is the bullish scenario this week? A tentative recovery in US housing proves not to be a mini-bubble but a harbinger of a great economic revival for the US which somehow manages to restore high economic growth rates while the rest of the world remains in recession, in the case of Europe, or plunges into recession in the case of Asia?
The G8 leaders had better spend some time on personal bonding and networking this week because they are going to need it in the years to come.
All that money printing and debt is about to come back and hit them in the face. We agree that you can’t see it now. But like the proverbial brick on a piece of elastic if you keep tugging long enough it will fly up in your face. Temporarily this makes ArabianMoney’s gloom seem foolish.
Of course as soon as financial markets get a whiff of this reality then the volatility of the past few weeks will look like a walk in the park. Standby for the real closing fireworks!
Statistics: Posted by yoda — Tue Jun 18, 2013 12:40 am
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Co-op set to unveil ‘bail in’ plan to plug £1.5bn hole
The Co-op bank faces questions over its capital position Continue reading the main story
The Co-operative Bank is set to unveil a rescue plan to tackle the hole in its balance sheet.
The BBC’s business editor, Robert Peston, has learned that the hole is around £1.5bn.
He said a lot of the capital to be used to plug the hole will come through a "bail in" – a process where bonds will be turned into shares.
However, the plan makes Co-operative Bank appear much more like a bank than a mutual organisation.
An announcement between the bank and the Prudential Regulation Authority could come within the next few hours.
Under such a rescue deal, it is unlikely that taxpayer money will be required or that savers will be affected, but it could affect up to 5,000 smaller investors.
Concerns about the bank’s capital arose after a deal with Lloyds collapsed.
In April, the Co-op cancelled a plan to buy 631 bank branches from Lloyds Banking Group.
That was followed two weeks later by the ratings agency Moody’s downgrading the bank’s debt to junk status.
The Co-op will raise much of the £1.5bn of precious capital it needs from what is known as a "bail in", or converting bonds – loans to the group – into shares which will be listed on the London Stock Exchange.
This contrasts with the many bank "bail outs" of 2007-8, in which desperate banks were kept alive by injections of funds from the public sector.
With a minority of Co-op Bank’s future shares tradeable on the Exchange, the Co-op Bank will begin to look more like a conventional bank and less like a mutual – although it will still be controlled by the mutual Co-op Group.
The agency warned the bank may need "external support" if it could not strengthen its balance sheet.
In response to Moody’s, the Co-op said it had a "strong funding profile" that was "significantly above the regulatory requirements".
But the bank admitted there was a "need to strengthen our capital position in light of the broader economic downturn and the pending introduction of enhanced regulatory requirements".
It added: "We have a clear plan to drive this forward throughout the coming months."
Most of Co-op Bank’s problems stem from bad loans associated with its takeover of Britannia Building Society in 2009.
Any agreement with Co-op would be the first test of the new city regulator, the Prudential Regulation Authority, since it assumed responsibility from the Financial Services Authority in April for regulating the banks. Part of its mandate is to ensure that the banks won’t have to be bailed out from taxpayer money again.
The Co-operative Group, parent of Co-op Bank, was founded in 1863. It has more than 6 million members and employs more than 100,000 people.
Statistics: Posted by DIGGER DAN — Mon Jun 17, 2013 5:16 pm
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IMF concerned about Dubai debt expansion to $142bn
Posted on 14 June 2013
The International Monetary Fund has warned that Dubai is risking another boom-to-bust business cycle by pushing up its debt to boost short-term growth at the cost of the medium term outlook, in a statement concluding its annual mission to the UAE.
The global central bank highlighted an increase in debt at Dubai government-related companies from $84 to $93 billion in the year to end of March. Borrowers have been taking advantage of the low yield on Dubai Government bonds to raise new funds. Total debts of $142 billion are now over 100 per cent of GDP.
$60bn by 2017
Around $60 billion of Dubai’s debts mature between this year and 2017, said the IMF, and that would leave the emirate vulnerable again to a deterioration in the global economy as in 2009. It criticized the management of debt in Dubai and called for the establishment of a debt management office.
The IMF would also like to see improvements in corporate governance with a clear separation between commercial and non-commercial activities at the government-related companies, and independent boards.
With property prices now almost back to pre-crisis levels, trade booming and tourism extremely bouyant in Dubai it is hard to believe that as recently as December 2009 the emirate was sinking in a debt crisis. Abu Dhabi came to the rescue with a $20 billion bailout and the $25 billion debts of Dubai World were restructured.
Has Dubai quickly slipped back into the bad habits of the past? The IMF makes its point with information supplied by the government, itself an advance in transparency since the crisis. There are now no hidden debts.
The question is whether they are sustainable through commercial activity or being racked up on prestige projects of dubious economic utility. So far the spending is mainly on finishing the best projects and high-margin in-fills like the shopping facilities on the Palm Island.
There are no more dinosaur parks in the desert and the most ambitious new schemes like the Mohammed bin Rashid City are phased out over decades. Still it is always a dilemma for any business, and Dubai Inc. is no different, as to the level of borrowing appropriate to the enterprise.
We recall the advice of the World Bank back in 2003 that Dubai should leave its development primarily to the private sector and wonder if the city would have its amazing infrastructure and critical mass today if that advice had been taken.
Building cities is after all the business of sheikhs and not multinational bureaucrats.
Statistics: Posted by yoda — Fri Jun 14, 2013 12:04 am
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Daniel J. Mitchell
I periodically post TV interviews and the second-most-watched segment – edged out only by my debate with Robert Reich on Keynesian economics – was when I discussed how President Obama’s statist policies are bad for young people.
So there’s obviously some concern about the future of the country and what it means for today’s youth.
The Center for Freedom and Prosperity has examined this issue and taken it to the next level, cramming a lot of information into this six-minute video.
The video highlights four specific ways that government intervention disadvantages younger Americans.
1. Labor market interventions such as minimum wage mandates make it more difficult for young people to find employment and climb the economic ladder.
- 2. Obamacare harms young people by requiring them to pay substantially more to prop up an inefficient government-run healthcare system.
3. Young people are trapped in a poorly designed Social Security system and politicians such as Obama think the answer is to make them pay more and get less.
4. Government has created a major third-party payer problem in higher education, putting young people on a treadmill of ever higher tuition and record debt.
What makes this situation so surreal is that young people – as noted at the start of the video – are the one group who think the “government should do more”!
I hope you share this video with every young person you know and help them understand that statism is the enemy of hope and opportunity.
And maybe also show them this poster if they need some extra help grasping the problem.
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China Export Growth Plummets Amid Fake-Shipment Crackdown
By Bloomberg News – Jun 8, 2013 10:01 AM MT
China’s export growth plummeted to a 10-month low in May and imports unexpectedly fell as a crackdown on fake trade invoices exposed weakness in global demand.
Overseas sales rose 1 percent from a year earlier, the General Administration of Customs said in Beijing yesterday, trailing 35 of 38 analyst estimates in a Bloomberg News survey and down from April’s 14.7 percent pace. Imports dropped 0.3 percent, leaving a trade surplus of $20.4 billion.
The report reflects a government campaign to root out illegal capital inflows disguised as trade that had inflated figures and added to appreciation pressure on the yuan. It also underscores the challenges Premier Li Keqiang faces as overseas demand stalls while rising home prices, financial risks and overcapacity at home limit his room to boost the economy.
“This shows the real state of the Chinese export situation,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. The data show a “pretty depressed” picture, with weak external demand and a yuan that has appreciated substantially against a trade-weighted basket of currencies, said Shen, who previously worked at the European Central Bank.
The slowdown in May’s figures was partly the result of “arbitrage trade” with Hong Kong being curbed, the customs administration said in a statement yesterday. Appreciation in the yuan and the worsening trade environment, as well as a domestic slowdown, weak external demand and high business costs, also contributed, the agency said.
The State Administration of Foreign Exchange last month started a campaign to curb money flows disguised as trade payments that had inflated export data.
China’s exports to Hong Kong fell to $28 billion in May from $39.5 billion in April, according to yesterday’s customs data. Growth in sales through bonded zones, which lie within China’s borders and handle shipments as international trade, slumped to a year-on-year pace of 45.8 percent in May from April’s 253.5 percent.
Data due today on industrial production and retail sales for May and fixed-asset investment for the first five months are forecast to show little change from April’s growth rates. Analysts last month trimmed economic-expansion forecasts for the April-June period to a median projection of 7.8 percent from an 8 percent pace forecast in April.
Li, who took office as premier in March, has resisted adding stimulus to the economy as the new leadership tries to make growth more sustainable and avoid stoking financial risks.
The trade figures reflect a “normalization,” said Hu Yifan, chief economist at Haitong International Securities Co. in Hong Kong, the only analyst to forecast declines in exports and imports. “We expect export growth to remain modest but import growth to pick up along with implementation of supportive policies,” she wrote in a note yesterday.
The trade slump adds to concerns that the global recovery is losing momentum even as the U.S. shows signs of strengthening. The ECB last week forecast the 17-nation euro area will contract 0.6 percent this year, more than its March estimate of 0.5 percent. In the U.S., employers added more workers than forecast in May.
Even so, China’s exports to the U.S. fell 1.6 percent in May from a year earlier and imports from the U.S. dropped 1.5 percent, the first time since 2009 that both showed a decline in the same month.
Exports “may remain weak in the near term” as the U.S. economy softens, which is likely to shift expectations for a strengthening yuan, said Ding Shuang, senior China economist at Citigroup Inc. in Hong Kong. The yuan has risen 1.6 percent this year against the U.S. dollar and about 14 percent against the yen, the most among Asian currencies tracked by Bloomberg.
Analysts had median estimates of 7.4 percent for May export growth, 6.6 percent for import gains and $20 billion for the trade surplus.
Part of China’s broader import drop resulted from falling commodity prices. The volume of inbound iron ore shipments rose 7.4 percent in May from a year earlier while the value increased about 1 percent, based on previous data. Average prices in the first five months were down 4 percent, the customs agency said.
The customs administration in April acknowledged concerns that export data may be overstated after March shipments to Hong Kong jumped 92.9 percent from a year earlier, the most in at least a decade. A Bloomberg News survey last month showed analysts estimated January-April export growth was overstated by 4 to 13 percentage points.
Trade friction may also hamper exports this year. The European Union last week said tariffs of as much as 67.9 percent could be imposed on solar panels from China in the largest EU commercial dispute of its kind, affecting Chinese companies like Yingli Green Energy Holding Co. and Wuxi Suntech Power Co.
China’s exporters are losing competitiveness “because of a strong yuan and rising protectionism,” Liu Li-Gang, Australia & New Zealand Banking Group Ltd.’s head of Greater China economics in Hong Kong, said in a note yesterday. That trend “will gradually show up in China’s export data in the following months, which will have dire consequences to China’s already weak job markets.”
Statistics: Posted by yoda — Sat Jun 08, 2013 10:19 am
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KING WORLD NEWS INTERVIEW WITH DR. PHILIPPA MALMGREN
Statistics: Posted by DIGGER DAN — Sat Jun 08, 2013 1:52 am
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“The news is what we say it is.” The 6 corporations (often in govt partnership) which control 90% of the news (Video)
It is important to actively seek news from outside of these corporations. Not to say that the “mainstream” news is always bad. It’s not. Sometimes it can often be quite good. But for the sake of being an informed member of society it’s wise to cultivate a taste for the news afield.
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The History Of The Bilderberg Conference — The Most Famous Secretive Gathering Of Elites That Happens Every Year
Steven Perlberg | Jun. 6, 2013, 8:54 AM
Today, over 100 masters of the universe will assemble at the swanky Grove hotel in Watford, England for one of the most clandestine and controversial meetings in the world — the Bilderberg Conference.
Bilderberg has been around for almost 60 years, bringing together the most powerful people in the United States and Europe.
From CEOs to political bigwigs, it’s an opportunity for the global elite to gather every year and have an open dialogue about world affairs, no reporters allowed.
And since the first rule of the Bilderberg club is you don’t talk about the Bilderberg club, the historic hangout session enjoys more conspiracy theories than the moon landing — Bilderberg lore blames the meeting’s attendees for everything from the most recent financial crisis to global money laundering.
The History Of The Bilderberg Conference — The Most Famous Secretive Gathering Of Elites That Happens Every Year
The first Bilderberg Conference took place in 1954 and was intended to start a dialogue across the Atlantic to prevent another world war.
Western elites held it at the Bilderberg Hotel in the Netherlands. The idea was to foster better ties across the Atlantic in order to prevent another World War. They also gossiped about the Soviets.
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Henry Kissinger, David Rockefeller, and other big names were early Bilderberg members.
The group was started by Polish activist Jozef Retinger, who went on to be a major advocate of European unification. Eleven Americans, recommended by the Eisenhower administration, attended the first meeting. Some have stuck around — Kissinger and Rockefeller were at last year’s conference.
Bill Clinton, Ben Bernanke, Larry Summers, and Donald Rumsfeld are all Bilderberg alumni.
Courtesy of Comedy Central
Also Lloyd Blankfein, George Soros, Rupert Murdoch, and Alan Greenspan. Basically if you’re a head of state or an influential mover-and-shaker, check your mailbox.
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Even Rick Perry got the call in 2007.
When questioned about it on an Iowa radio show in 2011, Perry explained, "I talked about the energy industry in America when I was there, and I hadn’t been invited back and that was 5 years ago so I guess I didn’t impress any of them."
This year’s conference is at the swanky $400-per-night Grove hotel.
The luminaries will descend on Watford, England from June 6-9 and spend their time at the luxurious Grove hotel. The secluded countryside paradise boasts a croquet lawn, outdoor swimming pool, tennis courts, golf, and 70 chefs to help keep the world’s most powerful focused on the tasks at hand.
Read more: http://www.businessinsider.com/what-you … z2VYA0Jo6W
Amazon’s Jeff Bezos, PayPal founder Peter Thiel, and former CIA director David Petraeus are going.
Timothy Geithner, Mario Monti, and Google’s Eric Schmidt will be in the house too. You can check out the full list of global VIPs who made the cut here.
What goes on is secret. Period.
Bilderberg describes itself as a "forum for informal, off-the-record discussions about megatrends and the major issues facing the world."
Discussion topics are public, however, and range from the economy to big data.
Can the US and Europe grow faster and create jobs?
Jobs, entitlement and debt
How big data is changing almost everything
Developments in the Middle East
Read more: http://www.businessinsider.com/what-you … z2VYASPsj7
No journalists are allowed inside.
Security is airtight, for the purpose of keeping out expected protesters and reporters. Even residents living nearby will reportedly be forced to present their passports at police checkpoints
Read more: http://www.businessinsider.com/what-you … z2VYAe4Wqh
That secrecy invites conspiracy theorists, of course, and they say Bilderberg runs the world.
From the left of the political spectrum, Fidel Castro once cautioned against Bilderberg’s attempt at a centrally coordinated political landscape. Then there’s right-winger Alex Jones, 9/11 and Boston Marathon truther, whose on the ground coverage you can follow this week.
Some say the group is hiding the cure for cancer.
It’s one of the crazier theories out there.
Also that they engineered the credit crunch.
In order to further control the global order.
And are hell-bent at controlling 3D printing.
It’s the future!
They also contend that Bilderberg sponsors government killings and international crime.
That’s according to the website The Truth Seeker: "It becomes clear that Bilderberg uses Swiss banks for money laundering activities, funding of government overthrows, killings and bankrupting countries"
"The True Story of the Bilderberg Group" is the seminal book on the matter.
Every good Bilderberg truther should carry around Daniel Estulin’s The True Story of the Bilderberg Group, available here. "After reading this book, it finally all comes together," wrote one conspiratorial Amazon reviewer.
For the first time in its history, this year Bilderberg will allow a press zone nearby.
It’s a major concession, offering the public more access to Bilderberg than ever before. Thousands of journalists, bloggers, and activists are expected.
So is a "Bilderberg Fringe Festival."
Activists are preparing for the festival to run alongside the coference with "a jam-packed weekend of speakers, comedy, music, workshops, arts and entertainment."
Read more: http://www.businessinsider.com/what-you … z2VYC9yrXs
Learn more about the secret conference, if you can, at Bilderberg’s terse website.
The Bilderberg Meetings
Read more: http://www.businessinsider.com/what-you … z2VYCHoEn0
How about another mystery?
THE SAFRA DYNASTY: THE MYSTERIOUS FAMILY OF THE RICHEST BANKER IN THE WORLD >
Statistics: Posted by DIGGER DAN — Fri Jun 07, 2013 10:59 am
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