Japan Rocked By The Biggest Wagyu Beef Ponzi Scheme Ever; $4.34 billion ponzi scheme defrauded 73,000 investors

Japan Rocked By The Biggest Wagyu Beef Ponzi Scheme Ever

STEVEN PERLBERG JUN. 21, 2013, 9:37 AM 5,840 6

Wikimedia Commons

Three former managers of a Japanese wagyu farm were arrested Tuesday on suspicion that they lead a beefy, $4.34 billion ponzi scheme that defrauded 73,000 investors, the Wall Street Journal reports. Wagyu — the “caviar of beef” — retails for hundreds of dollars a pound. Farmers add beer or sake to the coddled cows’ food and massage them to prevent muscle cramps. The managers of the Agura farm offered investors a “wagyu beef ownership system” with promised annual returns of 8%. They claimed the investors would profit from the calves born to purchased cows. From the Journal:

In reality, there weren’t as many cows as the number sold. According to the former managers, the farm had to file for bankruptcy after being hit by the double whammy of falling beef prices and lower sales following the 2011 Fukushima nuclear accident. (The farm is located less than 100 kilometers from the Fukushima plant.) That left 73,000 investors with losses totaling around ¥420 billion ($4.34 billion), according to lawyers for the plaintiffs.

Agura had reported to investors that they kept 90,000 to 100,000 breeding cows. Investigators found the number wasn’t quite as meaty — at 60,000. The case may be one of the biggest consumer fraud episodes in recent Japanese history. Read more of this post

Patent Policy That Cripples Innovation

June 21, 2013, 7:18 p.m. ET

A Welcome Turn Away From Patents

By MATT RIDLEY

The economist Arthur Laffer is reputed to have drawn his famous curve—showing that beyond a certain point higher taxes generate lower revenue—on a paper napkin at a dinner with Dick Cheney and Donald Rumsfeld in the Washington Hotel in 1974. Read more of this post

Beer Institute: Warehouse Fees Raise Costs for Metal Consumers

Updated June 21, 2013, 4:37 p.m. ET

Beer Institute: Warehouse Fees Raise Costs for Metal Consumers

By TATYANA SHUMSKY

A trade group that represents many of the world’s largest beer brewers has lodged a complaint with the London Metal Exchange, saying the exchange hasn’t done enough to alleviate supply bottlenecks in its warehouse system that the trade group says have raised the price of aluminum used in beer cans. Read more of this post

China Faces Fallout of Self-Made Cash Crisis

Updated June 21, 2013, 7:41 p.m. ET

China Faces Fallout of Self-Made Cash Crisis

Central Bank’s Attack on Informal Lenders Criticized as Too Aggressive; Borrowing Costs Ease Somewhat but Remain High

By BOB DAVIS in Beijing and SHEN HONG in Shanghai

China’s central bank is wrestling with a liquidity crunch of its own creation.

A cash shortage that has sent short-term interest rates as high as 25% earlier this week and alarmed the world’s markets, eased a bit Friday. Traders said the People’s Bank of China, may have asked big state banks to refrain from hoarding cash and release more funds to ease the liquidity squeeze. But the top priority for the central bank, acting on instructions from China’s political leadership, continues to be taming runaway informal lending. Read more of this post

Stanley Druckenmiller On China’s Future And Investing In The New Normal

Stanley Druckenmiller On China’s Future And Investing In The New Normal

Tyler Durden on 06/14/2013 19:38 -0400

From Goldman Sachs

Stan Druckenmiller is Chairman and Chief Executive Officer of Duquesne Family Office. He founded Duquesne Capital Management in 1981, which he ran until he closed the firm in 2010. Previously, he was a Managing Director at Soros Fund Management, where he served as Lead Portfolio Manager of the Quantum Fund and Chief Investment Officer of Soros

Interview with Stan Druckenmiller

Hugo Scott-Gall: What are the risks of investing in China that are not well understood in your view? Read more of this post

Hedge fund Grandmaster sees stock market crash in China

Hedge fund Grandmaster sees stock market crash in China

Thu, Jun 20 2013

By Laurence Fletcher

MONTE CARLO, Monaco (Reuters) – Former chess grandmaster-turned hedge fund manager Patrick Wolff is betting on a stock market crash in China, where he says corruption and bad debts have spiralled to dangerous levels.

Speaking to Reuters on the sidelines of the GAIM conference in Monaco this week, Wolff said investors were too focused on trying to work out when easy money policies will taper off in the United States and ignoring a looming correction in China. Read more of this post

Brazil Tycoon Eike Batista’s Empire on Edge

June 20, 2013, 7:09 p.m. ET

Brazil Tycoon’s Empire on Edge

By LUCIANA MAGALHAES and JOHN LYONS

SÃO PAULO, Brazil—Just months after he unveiled it, Brazilian commodity tycoonEike Batista‘s bid to rebalance his unsteady oil, mining and shipping empire is nearly in tatters, overtaken by a shift in investor sentiment against emerging-market and commodity businesses like those owned by the former powerboat racer. The value of Mr. Batista’s assets has plunged, undermining a strategy set in March to raise capital by selling stakes in his companies to new partners to ensure the viability of his cash-intensive businesses.

Read more of this post

Bond Auctions Fail From Russia to Korea as Brazil Protests Rage; Brazilians spend as much as 26% of their income to ride the bus

Bond Auctions Fail From Russia to Korea as Brazil Protests Rage

Developing nations around the world are scaling back or canceling billions of dollars of bond sales as borrowing costs climb the most since 2008, just as spending needs increase amid slowing economic growth.

Romania’s Finance Ministry rejected all bids at a seven-year bond sale yesterday because of market volatility, while South Korea raised less than 10 percent of the amount planned in an auction of inflation-linked bonds. Russia scrapped a sale of 15-year ruble-denominated bonds June 19, the second time it canceled an auction this month, and Colombia pared an offering of 20-year peso debt by 40 percent. A cash shortage led to failures last week of China Ministry of Finance debt sales. Read more of this post

Montgomery County, troubled by its pension fund’s recent performance, turned to Vanguard founder John Bogle for advice. His take: Park money in low-cost index funds. The fund is taking his advice

June 20, 2013, 8:04 p.m. ET

Pension Fund Takes Neighborly Advice

By MICHAEL CORKERY and KIRSTEN GRIND

When officials with Montgomery County, Pa., became troubled by their pension fund’s investment fees and recent performance, they turned to a neighbor for advice. His take: Park money in low-cost index funds. And that is what they are doing, a move that highlights the growing frustration many pension officials feel toward expensive Wall Street investment managers. The county is now shifting nearly all its $470 million in pension assets to a handful of index funds run by Vanguard Group Inc. Read more of this post

Central Banks and the Borrowing Addiction; From 1980 to 2010, overall U.S. debt grew as fast as GDP. From 1950 to 1980, it was a small fraction of growth

June 20, 2013, 7:11 p.m. ET

Central Banks and the Borrowing Addiction

From 1980 to 2010, overall U.S. debt grew as fast as GDP. From 1950 to 1980, it was a small fraction of growth.

By ROMAIN HATCHUEL

Have financial markets become a giant crack house? Investors have certainly been acting like a bunch of junkies lately.

Any hint that their main dealer—otherwise known as Federal Reserve Chairman Ben Bernanke—might start cutting down his generous supply of cash sets them off in a frenzy. Mr. Bernanke’s latest comments on Wednesday, signaling a sooner-than-previously anticipated tapering off of the Fed’s monetary easing, triggered a sharp global selloff in practically every asset class. Read more of this post

The leadership changes in Louis Dreyfus and Bunge are a good reminder that chief executives do not stay forever – and a wake-up call for some big trading houses facing a “key-man risk”

June 21, 2013 8:52 am

Commodities traders need to wake up to key-man risk

By Javier Blas in Hong Kong

The leadership changes in Louis Dreyfus Commodities and Bunge are a good reminder that chief executives do not stay forever – and a wake-up call for some big trading houses facing a “key-man risk”.

The names of the chief executives of trading titansGlencore, Wilmar, Trafigura and Vitol are so closely associated with their firms that they are almost inseparable. But at some point Ivan Glasenberg, Kuok Khoon Hong, Claude Dauphin and Ian Taylor will retire. Read more of this post

Thailand’s Ruinous Rice Subsidy; Yingluck Shinawatra’s bid to corner the rice market rots away

Updated June 20, 2013, 5:03 p.m. ET

Thailand’s Ruinous Rice Subsidy

Yingluck Shinawatra’s bid to corner the rice market rots away.

On Wednesday Thailand agreed to cut the price it pays for farmers’ rice crops by 20%, in what may be the first step in unwinding a disastrous rice subsidy program. This retreat won’t undo the fiscal damage already done by the two-year-old scheme, which saw the government buy local rice harvests for as much as 50% above market rates and then fail to engineer a similar price hike globally. But it does provide a good lesson in the dangers of meddling with markets. Read more of this post

Largest Bitcoin Exchange Halts U.S. Dollar Withdrawals

June 21, 2013, 11:01 a.m. ET

Largest Bitcoin Exchange Halts U.S. Dollar Withdrawals

Mt. Gox, the world’s largest bitcoin trading exchange, said it has halted withdrawals of customer funds in U.S. dollars as it makes systems improvements.

The Tokyo-based exchange said on its website Thursday that cash withdrawals in U.S. dollars are suspended while it makes the upgrades amid rising customer use. Read more of this post

Seat in China’s Parliament Pays Dividends for CEOs

June 20, 2013, 4:07 PM

Report: Seat in China’s Parliament Pays Dividends for CEOs

Top of Form

When China’s parliament, the National People’s Congress, meets once a year to vote through the Communist Party’s policy decisions, something like a carnival atmosphere prevails. Read more of this post

Investors in Apple’s record US$17bil bond suffer some of the biggest losses in investment-grade new issues

Published: Friday June 21, 2013 MYT 8:43:00 AM

Investors in Apple’s record US$17bil bond suffer some of the biggest losses in investment-grade new issues

NEW YORK: Investors in Apple‘s record U.S. US$17 billion bond deal have suffered some of the biggest losses in recent investment-grade new issues, with about $760 million wiped off the value of longer-maturing Apple securities that they bought just weeks ago. Read more of this post

Bad loans rise sharply in Shanghai bank sector

Bad loans rise sharply in Shanghai bank sector

Friday, 21 June, 2013, 12:00am

George Chen george.chen@scmp.com

Mid-sized lenders pressured amid slump as regulator urges tighter risk controls

The Shanghai branches of several mid-sized mainland banks have seen rapid increases in bad loans this year as private companies feel the pinch of the nationwide economic slowdown. Read more of this post

Euro bailout fund conditions complicate efforts to separate bad banks and sovereigns

Euro bailout fund conditions complicate efforts to separate bad banks and sovereigns

LUXEMBOURG – Euro zone finance ministers on Thursday agreed on how its bailout fund can invest in troubled banks, but imposed so many conditions that they may not completely succeed in their goal of separating problem banks from their indebted home countries.

BY –

2 HOURS 23 MIN AGO

LUXEMBOURG – Euro zone finance ministers on Thursday agreed on how its bailout fund can invest in troubled banks, but imposed so many conditions that they may not completely succeed in their goal of separating problem banks from their indebted home countries. Read more of this post

To judge from the Tel Aviv Stock Exchange, we have turned into a country of oil barons and financiers

Where Israeli money fears to tread

US investment institutions have shown greater boldness and steadfastness in investing in Israeli tech companies than their local counterparts.

17 June 13 17:07, Shlomi Cohen

After the great joy of the sale of Waze for over $1 billion, the local stock market can now celebrate the new make-up of the Tel Aviv 25 Index. Only one technology company makes it into the top flight: NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE), which is not nice at all the technology sector apparently makes no impression on the stock exchange powers that be. Perhaps it’s because “a billion today is not what it was” as a Texan oil tycoon joked 30 years ago when he lost $2 billion in one day. Read more of this post

Large spike in ‘smart beta’ investments

June 16, 2013 4:14 am

Large spike in ‘smart beta’ investments

By Chris Flood

Interest in “advanced” or “smart beta” investment strategies is accelerating, with growing numbers of investors adopting alternative weighting schemes in equity and fixed income portfolios.

Inflows into advanced beta funds reached $15bn in the first three months of 2013, up 45.3 per cent on the same period a year ago. This was the strongest quarterly inflow for three years, according to an analysis by State Street Global Advisors of Morningstar data. Read more of this post

U.S. Weighs Doubling Leverage Standard for Biggest Banks

U.S. Weighs Doubling Leverage Standard for Biggest Banks

U.S. regulators are considering doubling a minimum capital requirement for the largest banks, which could force some of them to halt dividend payments.

The standard would increase the amount of capital the lenders must hold to 6 percent of total assets, regardless of their risk, according to four people with knowledge of the talks. That’s twice the level set by global banking supervisors. Read more of this post

Insight: Losses loom for investors enmeshed in mortgage chaos

Insight: Losses loom for investors enmeshed in mortgage chaos

4:34am EDT

By Michelle Conlin

(Reuters) – Since the financial crash, banks have been accused of wrongfully foreclosing on homeowners because they failed to create and maintain proper mortgage paperwork. Now, there are signs that chaotic document management is harming investors in mortgage bonds, too.

A review of loan documents, property records and the monthly reports made available to investors show that mortgage servicers are reporting individual houses are still in foreclosure long after they have been sold to new buyers or the underlying mortgages have been paid off. Read more of this post