Article: ‘America First’ clashes with India’s bid for strategic autonomy

Article - Media, Publications

‘America First’ clashes with India’s bid for strategic autonomy

P.K.Balachandran, 01 May 2021

Colombo, May 1: India and the US have designated themselves as “strategic partners” with political, economic and military dimensions to the relationship. But the partnership has kept coming under strain.

The reasons are two-fold: Firstly, its contours are not defined. Secondly, Washington’s ‘America First’ policy and its tendency to pursue a foreign policy almost exclusively in its own immediate interest, clashes with India’s penchant for maintaining ‘strategic autonomy’ despite its increasing economic and military dependence on the US. Continue reading “Article: ‘America First’ clashes with India’s bid for strategic autonomy”

Article: How the Big Three Rating Companies Got China Huarong So Wrong

Article - Media, Publications

How the Big Three Rating Companies Got China Huarong So Wrong

Shuli Ren, 29 April 2021

After the collapse of Lehman Brothers Holdings Inc., the Big Three rating companies were blamed for their enabling roles in the subprime mortgage crisis. Troubled securitized products would not have been marketed and sold without their seal of investment-grade approval. In fact, investors relied on their ratings, often blindly.

Over a decade later, similar drama is unfolding with state-owned China Huarong Asset Management Co. After failing to release its 2020 financials on time amid media reports of a deep restructuring, the distressed-asset manager became a distressed asset itself. Its 4.5% perpetual bond is trading at 70 cents on the dollar, not at all aligned with its safe-as-cash ratings. With $22 billion in dollar bonds outstanding, Huarong has issues due every month into the summer. Continue reading “Article: How the Big Three Rating Companies Got China Huarong So Wrong”

Article: Opinion: Wirecard fraud shows it’s time to regulate the regulators

Article - Media, Publications

Opinion: Wirecard fraud shows it’s time to regulate the regulators

Kate Ferguson, 29 April 2021

What would you do if you were confident you could get away with it? Perhaps you’d rob a bank, or have a wild affair. Or maybe you’d subsist on nothing but candy floss for the rest of your life.

The chances are you won’t, though. The risk of being arrested, destroying your marriage or becoming a diabetic are simply too high. For most of us, the question is destined to remain hypothetical. After all, life has taught us that bad behavior does not generally go unpunished.

Generally doesn’t mean always
There are notable exceptions to the rule, though. In recent years, three major scandals in Germany have provided pleasingly concrete answers to the question. Continue reading “Article: Opinion: Wirecard fraud shows it’s time to regulate the regulators”

Article: Will ‘Global Britain’ clamp down on money laundering?

Article - Media, Publications

Will ‘Global Britain’ clamp down on money laundering?

Tom Burgis, 28 April 2021

In March 2014, a few days after Vladimir Putin’s forces invaded Crimea, a British official arriving for a meeting of the UK’s National Security Council failed to shield his notes from the Downing Street photographers. Any response to the Kremlin’s aggression should not, the notes read, “close London’s financial centre to Russians”. The government subsequently explained that it “wanted to target action against Moscow and not damage British interests”.

Seven years on, the assessment is very different. Last year’s report on Russia by parliament’s Intelligence and Security Committee — eventually published after a contentious delay — found that the warm British welcome for Russian money “offered ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London ‘laundromat’”. Continue reading “Article: Will ‘Global Britain’ clamp down on money laundering?”

Article: Xianbing Gan Gets 14 Years For Having Chicago Drug Proceeds Laundered Through China To Be Sent To Traffickers In Mexico

Article - Media, Publications

Xianbing Gan Gets 14 Years For Having Chicago Drug Proceeds Laundered Through China To Be Sent To Traffickers In Mexico

CBS 2 Chicago Staff, 27 April 2021

CHICAGO (CBS) — A man was sentenced to 14 years in prison Tuesday for having drug proceeds picked up in Chicago and laundering them through China to have them sent to drug traffickers in Mexico.

Prosecutors said Xianbing Gan schemed in 2018 to have about $534,206 in narcotics proceeds picked up in Chicago and then transferred to various bank accounts in China – with the money ultimately intended for the drug traffickers in Mexico. Continue reading “Article: Xianbing Gan Gets 14 Years For Having Chicago Drug Proceeds Laundered Through China To Be Sent To Traffickers In Mexico”

Article: The Fall Of Turkey, The Rise Of Bitcoin

Article - Media, Publications

The Fall Of Turkey, The Rise Of Bitcoin

TYLER DURDEN, 26 April 2021

It never ceases to amaze me how tone deaf those with power are.

Turkish President Recep Tayyip Erdogan is in serious trouble for the first time in his political career. He’s a man staring at a massive electoral problem coming this fall.

Erdogan is currently presiding over an economy in complete freefall. With recent reports of food riots over government handouts of potatoes and onions the news only seems to be getting worse there on the eve of national elections. Continue reading “Article: The Fall Of Turkey, The Rise Of Bitcoin”

Article: Angela Merkel defends lobbying for disgraced Wirecard

Article - Media, Publications

Angela Merkel defends lobbying for disgraced Wirecard

Ben Knight, 23 April 2021

The German chancellor has appeared at a parliamentary inquiry to defend her decision to lobby on behalf of the disgraced banking firm Wirecard in China. The scandal is one of Germany’s biggest ever fraud cases.

Chancellor Angela Merkel has told the German Bundestag that there was no reason to believe that Wirecard was committing fraud in 2019, when she lobbied on behalf of the now insolvent Bavarian company during an official trip to China.

“Despite the press reports, there was no reason to assume there were serious irregularities at Wirecard at the time,” she told a parliamentary inquiry during a hearing on Friday. Continue reading “Article: Angela Merkel defends lobbying for disgraced Wirecard”

Article: NGO: Chinese Banks Must Stop Laundering Wildlife Traffickers’ Money

Article - Media, Publications

NGO: Chinese Banks Must Stop Laundering Wildlife Traffickers’ Money

DAVID KLEIN, 22 April 2021

Activists fighting against the illegal trade in endangered species of both plants and animals have called on Chinese banks to prevent illegal wildlife traffickers from exploiting their networks to launder money. Otherwise those banks will risk greater scrutiny and pressure from foreign governments.

TRAFFIC, a non-governmental organisation focusing on the global trade in wild animals and plants, released a report this month which found that the illegal wildlife trade generates between US$7 billion and $23 billion each year – as much as the illegal trafficking of narcotics, arms, and humans generate – and this cannot occur without financial crime and corruption. Continue reading “Article: NGO: Chinese Banks Must Stop Laundering Wildlife Traffickers’ Money”

Article: Who’s manipulating the currency, US?

Article - Media, Publications

Who’s manipulating the currency, US?

ET Edit, 22 April 2021

America’s decision to place India on its currency manipulator’s watchlist is ludicrous. The US Fed’s policy of keeping interest rates ultra-low, along with America’s allies in Europe and Japan, is responsible for both the dollar’s plunge and surging flows of capital to emerging markets, like India, in search of reasonable returns. These capital inflows make the rupee appreciate out of line with real economy concerns. Seen from India’s perspective, the US should be pointing fingers at itself when it comes to currency manipulation.

The US uses three benchmarks to judge currency manipulators: a bilateral surplus with the US of over $20 billion, a current account surplus of at least 3% of GDP and net purchases of foreign currency of 2% of GDP over a 12-month period. India met the first and the third benchmarks while its current account surplus has been below the threshold level. The country has a marginal current account surplus due to the Covid-induced economic contraction that dented imports. Else, India consistently has run a current account deficit (barring in 2004). Continue reading “Article: Who’s manipulating the currency, US?”

Article: Currency control is not black and white

Article - Media, Publications

Currency control is not black and white

SCMP Editorial, 18 April 2021

There are myriad ways for a government to affect the direction and value of its national currency. Some are labelled currency manipulation; others not. It depends on one’s definitions. Those of the United States Treasury mean the country cannot engage in such manipulation, an alleged sin only other economies can commit. Therefore it sits in judgment of others and threatens sanctions against those who allegedly game the global “rules-based” trade system.

However, spending trillions of US dollars on bond buying – also known as quantitative easing – for more than a decade and on economic relief packages to support growth and encourage inflation have achieved the same or similar results as manipulation. They have already caused significant depreciation of the US dollar against most major currencies and the slide is expected to continue. It is doubly ironic that in the middle of a trade and ideological war between the world’s two superpowers, Washington has, in its wisdom, declined to label mainland China as a currency manipulator but added friendly Taiwan to the watch list. The political nature of the exercise was exposed when the US Treasury, under former president Donald Trump, designated China as a manipulator in mid-2019, despite not meeting its full criteria, and then abruptly lifted the label five months later as a concession in a trade deal. Continue reading “Article: Currency control is not black and white”

Article: Why China ‘Bad Bank’ Huarong’s Fall Is Big Bad News: QuickTake

Article - Media, Publications

Why China ‘Bad Bank’ Huarong’s Fall Is Big Bad News: QuickTake

Rebecca Choong Wilkins, 18April 2021

What happens when a company set up by the Chinese government to help clean up toxic debt in the country’s banking system gets into trouble itself? We’re finding out now. Investors were spooked in April after China Huarong Asset Management Co., one of the country’s biggest distressed asset managers, failed to release financial statements in the wake of the execution of its former top executive for bribery. That raised questions about its financial health — and broader worries about whether China would let an institution backed by the central government fail. The ending of a presumed safety net that’s long been priced into Chinese bond values would mean a seismic shift for investors across emerging markets. Continue reading “Article: Why China ‘Bad Bank’ Huarong’s Fall Is Big Bad News: QuickTake”

Article: US Treasury says no major trading partner manipulates currency

Article - Media, Publications

US Treasury says no major trading partner manipulates currency

Xinhua, 17 April 2021

WASHINGTON — The US Treasury Department on Friday said that no major trading partner of the United States meets the criteria as a currency manipulator, but Vietnam, Switzerland and China’s Taiwan will be under enhanced monitoring for their currency practices.

In its semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, the Treasury Department concluded that Vietnam, Switzerland and Taiwan met all three criteria for enhanced currency analysis under the Trade Facilitation and Trade Enforcement Act of 2015 during the four quarters through December 2020. Continue reading “Article: US Treasury says no major trading partner manipulates currency”

Article: EXCLUSIVE Brazil’s IG4 bids $916 mln to become a top shareholder in Chilean miner SQM -sources

Article - Media, Publications

EXCLUSIVE Brazil’s IG4 bids $916 mln to become a top shareholder in Chilean miner SQM -sources

Dave Sherwood, Tatiana Bautzer, 17 April 2021

Brazilian private equity firm IG4 Capital has delivered a $916 million bid to buy into holding companies that have large stakes in Chilean lithium miner Sociedad Quimica y Minera de Chile, known as SQM, two sources with knowledge of the matter said.

If SQM’s shareholder Julio Ponce agrees to the proposed deal, IG4 would become one of the largest shareholders of the world’s second largest lithium producer. The group intends to appoint up to four board members, according to the proposal described by the sources. Continue reading “Article: EXCLUSIVE Brazil’s IG4 bids $916 mln to become a top shareholder in Chilean miner SQM -sources”

Article: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion

Article - Media, Publications

Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion

TYLER DURDEN, 16 April 2021

In 2018, the Chinese launched a gold-backed, yuan-denominated oil futures contract. These contracts were priced in yuan, but convertible to gold, raising the prospect that “the rise of the petroyuan could be the death blow for the dollar.”

Two weeks ago, The IMF reported that the global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF’s COFER data released today. This matched the 25-year low of 1995. Continue reading “Article: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion”

Article: Jack Ma’s Double-Whammy Marks End of China Tech’s Golden Age

Article - Media, Publications

Jack Ma’s Double-Whammy Marks End of China Tech’s Golden Age

Bloomberg, 14 April 2021

(Bloomberg) — The full implications of Beijing’s rapid-fire moves against Jack Ma’s internet empire in recent days won’t be apparent for weeks, but one lesson is already clear: The glory days for China’s technology giants are over.

The country’s government imprinted its authority indelibly on the country’s technology industry in the span of a few days. In landmark announcements, it slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. for abusing its market dominance, then ordered an overhaul of Ant Group Co. On Tuesday, regulators summoned 34 of the country’s largest companies from Tencent Holdings Ltd. to TikTok owner ByteDance Ltd., warning them “the red line of laws cannot be touched.” Continue reading “Article: Jack Ma’s Double-Whammy Marks End of China Tech’s Golden Age”

THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?