Commodity Traders’ Buildup on Easy Money Seen as Risk in Report; 10 largest trading houses with $1 trillion in revenue could potentially become “too physical to fail.”

Commodity Traders’ Buildup on Easy Money Seen as Risk in Report

Trading houses active in multiple commodity markets have built up physical holdings through easy access to financing, creating a possible systemic risk, according to a report by the Centre for European Policy Studies. Disclosure of physical holdings and a minimum amount of information that must be provided to regulators could reduce the risks for governments that might have to bail out trading houses, Brussels-based CEPS wrote in a statement with the European Capital Markets Institute. The 10 largest trading houses had about $1 trillion in revenue in 2011, according to CEPS and ECMI, and trading houses could potentially become “too physical to fail.” Read more of this post

Iran’s LNG Dreams Vanish as U.S. Shale Gas Looms

Iran’s LNG Dreams Vanish as U.S. Shale Gas Looms

Iran’s ambition to exploit the world’s biggest natural gas reserves, stymied for years by U.S. sanctions, faces an even sterner test as rising global output and the North American shale boom threaten to erode prices.

The Persian Gulf state would need a decade to build planned export capacity of at least 40 million metric tons a year of liquefied natural gas even if unfettered by economic curbs over its nuclear program, say analysts including Tony Regan at Tri-Zen International Pte. A surge in U.S., Canadian and Australian gas from shale deposits may depress prices for new LNG projects by 35 percent, according to Barclays Plc and Royal Bank of Canada, reducing Iran’s potential profit from selling the fuel. Read more of this post

Chevron Indonesia graft case spooks investors

July 9, 2013 7:11 am

Chevron Indonesia graft case spooks investors

By Ben Bland in Jakarta

When Endah Rumbiyanti, an environmental manager for Chevron, left her Sumatra home for Jakarta to be interviewed about a corruption case, she told her five young children she would be back in two days. After arriving in the Indonesian capital, however, she was detained by the attorney-general’s office and held for 63 days before her lawyers had the detention ruled illegal. Her arrest appeared to also come as a surprise to her captors: she was held in a parking lot until a cell was found for her in a men’s prison. It was one of many Kafkaesque aspects of a case in which Ms Rumbiyanti, 37, and four other employees of Chevron – the US company that is Indonesia’s biggest crude oil producer – are accused of corruption and causing millions of dollars of losses to the state, even though no government funds have been disbursed. The case has highlighted the unpredictable nature of Indonesia’s justice system as officials and departments fight for power in a democracy that is still evolving 15 years after the end of General Suharto’s 32-year dictatorship. Read more of this post

Crisis of confidence in government handling of corruption, survey shows

Crisis of confidence in government handling of corruption, survey shows

1:07am EDT

By Erik Kirschbaum

BERLIN (Reuters) – A majority of people worldwide believes corruption has worsened in the last two years and they see governments as less effective at fighting it since the 2008 financial crisis, a survey by Transparency International organization showed on Tuesday. The “Global Corruption Barometer” is the biggest ever conducted by the Berlin-based watchdog, with 114,000 people responding in 107 countries in the survey of opinions on corruption and which institutions are considered most corrupt. Read more of this post

Indonesian voters losing faith in lawmakers

Indonesian voters losing faith in lawmakers

About 49 million, or 29 per cent of the electorate, failed to vote in 2009. -ST
John McBeth
Wed, Jul 10, 2013
The Straits Times

Wracked by corruption allegations, President Susilo Bambang Yudhoyono’s (centre) majority Democrats are expected to take a major hit at next year’s general elections though his personal popularity remains high.

INDONESIA – Something quite astonishing has happened to Indonesia’s political parties ahead of next year’s general elections: An unprecedented 90 per cent of the candidates are incumbents. And all but a handful are standing in the electorates they currently represent. How and why is difficult to explain. In previous elections – in 1999, 2004 and 2009 – there was a 70 per cent to 75 per cent turnover in each new Parliament. This was either because sitting legislators were dropped by their parties or failed to make the cut at the ballot box. Read more of this post

DoubleLine Webcast On “The End Of QE As We Know It” With Bond Rout Update

DoubleLine Webcast On “The End Of QE As We Know It” With Bond Rout Update

Tyler Durden on 07/09/2013 16:20 -0400

Jeff Gundlach may not be present at today’s DoubleLine live webcast titled ominously enough “The End of QE as We Know It”, which will be led by the firm’s Jeffrey Sherman, but the firm is sure to provide some guidance on how the recent bond rout has impacted bond funds, and what the future of risk duration is in a time when Bernanke seems hell bent on pushing everyone out of bonds and into stocks.

U.S. SEC says audit firms hinder accounting fraud probes at U.S.-listed Chinese firms

U.S. SEC says audit firms hinder accounting fraud probes

Mon, Jul 8 2013

By Sarah N. Lynch

WASHINGTON, July 8 (Reuters) – U.S. federal regulators tried to persuade a judge on Monday to sanction the Chinese arms of the world’s top five accounting firms, saying their refusal to hand over audit work papers has hindered investigations into fraud at U.S.-listed Chinese firms.

In testimony during a hearing at the U.S. Securities and Exchange Commission, an SEC official alleged that Deloitte Touche Tohmatsu LLP’s failure to turn over audit records has stalled a three-year-old probe into financial fraud at a large solar power company. Read more of this post

Has China President Xi’s graft crackdown run out of steam? Analysts say candid coverage of ‘consultations’ may indicate leadership lacks will to take action

Has Xi’s graft crackdown run out of steam?

Tuesday, 09 July, 2013, 12:00am

Cary Huang cary.huang@scmp.com

Analysts say candid coverage of ‘consultations’ may indicate leadership lacks will to take action

President Xi Jinping has consulted retired party leaders on his anti-corruption and austerity campaign, the Communist Party’s official newspaper reported on Monday – a move some analysts believe is a sign that the current leadership lacks the confidence or political will to ring the changes of real political reform.

People’s Daily yesterday gave a rare glimpse into behind-the-scenes details of the intensive politburo meetings on June 22-25. The meetings assessed the anti-corruption and frugality measures that Xi launched earlier this year. Read more of this post

Chinese Cash Squeeze Causes Auto Dealer Panic

Chinese Cash Squeeze Causes Auto Dealer Panic, Group Says

By Bloomberg News – Jul 9, 2013

China’s money-market squeeze, which sent interbank borrowing costs soaring last month, may prompt auto dealers to cut vehicle orders and slow expansion plans to conserve cash, according to an industry group.

“The cash crunch has led to psychological panic among dealers over access to financing,” Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said in a telephone interview from Beijing today. “So far, it hasn’t caused any real damage to the industry, but if the cash crunch continues, the impact will spread to auto dealers.” Read more of this post

Canada Loses Luster as Destination for Corrupt Chinese Cash; Canada became the first country to reach a deal with China to share forfeited assets in an effort to target international organized crime

July 6, 2013, 5:20 AM

Canada Loses Luster as Destination for Corrupt Chinese Cash

Chinese fugitives who touched down in Vancouver or Toronto with suitcases of illicit cash might find it harder to keep their fortunes.

Canada became the first country to reach a deal with China to share forfeited assets in an effort to target international organized crime, according to the official Xinhua News Agency. Once the pact is signed, one country will be able to get money back if a fugitive transfers illegal assets to the other, according to Xinhua.

“Canada is not, and will not be seen as, a safe haven for the proceeds of crime,” said Canadian Foreign Affairs Minister John Baird in a news release about the pact. Read more of this post

Koreans Find Breaking Up With Chaebol Hard to Do

Koreans Find Breaking Up With Chaebol Hard to Do

Everyone loves a good perp walk. For South Koreans, Lee Jay Hyun’s made great theater.

The sight of Lee — chairman of the conglomerate CJ Group and grandson of Samsung’s legendary founder — being led away by police last week on embezzlement and tax-evasion charges has been portrayed as an early victory for President Park Geun Hye’s five-month-old government. The arrest supposedly shows that Park is serious about reining in the chaebol — family-owned behemoths that continue to dominate Asia’s fourth-biggest economy and hog much of the nation’s wealth.

The reality, of course, is far more complicated. Past attempts to bring tycoons to heel have also been greeted with great fanfare, only to fizzle out. In April 2008, Lee’s uncle, Samsung Chairman Lee Kun Hee, resigned after being charged with criminal tax evasion. His ignominious fall was heralded as the end of the chaebol — until then-President Lee Myung Bak pardoned him eight months later, allowing Korea’s richest man to return to work. Read more of this post

LVMH Acquires Cashmere Clothier Loro Piana for $2.6 Billion

LVMH Acquires Cashmere Clothier Loro Piana for $2.6 Billion

LVMH Moet Hennessy Louis Vuitton SA (MC) agreed to pay 2 billion euros ($2.57 billion) for 80 percent of Italian cashmere clothier Loro Piana SpA, adding a high-quality textile producer to its burgeoning portfolio of luxury brands.

The transaction, which is subject to approval by competition authorities, values Quarona, Italy-based Loro Piana at 2.7 billion euros, LVMH said yesterday in a statement after the market closed. The family owners of the maker of $1,385 cashmere sweaters will retain a 20 percent stake in the business, Paris-based LVMH said.

“Loro Piana is quintessentially high-end while a lot of LVMH is mass luxury,” said Luca Solca, an analyst at Exane BNP Paribas in London, adding that he expects the market to favor the deal. With the purchase, “LVMH can acquire a trophy asset” and get growth opportunities for the future without stretching its balance sheet. Read more of this post

Food companies are experimenting more and more with exotic flavors and ethnic staples to appeal to a rising number of Latino and Asian immigrants

July 8, 2013

American Tastes Branch Out, and Food Makers Follow

By STEPHANIE STROM

Jarritos, the Mexican fruit-flavored soda in brilliant hues rarely found in nature, has entered the mainstream in California and will soon be in conventional groceries elsewhere.

NEW BERN, N.C. — If chicken producers could breed a bird with three legs, they would. These days, they can hardly keep up with the demand for thighs and other pieces of dark meat that had once been among the least desirable parts of a chicken. “Demographics are changing,” Bill Lovette, chief executive of Pilgrim’s Pride, a division of JBS S.A., told a group at the recent Chicken Media Summit here. “There is a growing population that prefers dark meat.” While the effect of changing demographics has been seen in voting patterns and employment trends, the growing influence on America’s palate of the influx of immigrants from Latin America and Asia has been more subtle, even as grocery shelves increasingly display products containing ingredients like lemon grass and sriracha peppers. Read more of this post

China faces a difficult credit bubble workout; It will take Beijing years to tackle excess credit and over-investment

July 8, 2013 11:50 am

Markets Insight: China faces a difficult credit bubble workout

By Gavyn Davies

It will take Beijing years to tackle excess credit and over-investment

The financial shock which has recently hit the emerging markets stemmed in part from a period of severe stress in the Chinese money markets, which has now been brought under control. But the challenges facing China are chronic, not acute. And since the country is much more than “first among equals” in the Brics, a prolonged slowdown in its economy would keep all emerging market assets under pressure for a long while. Read more of this post

Australia’s stock market regulator will increase scrutiny of analysts as part of a clampdown on selective briefings after questions were raised over coverage of Newcrest Mining

Australia Aims Spotlight on Disclosure After Newcrest Slump

Joe Schneider and David StringerJul 08, 2013 2:41 am ET

July 8 (Bloomberg) — Australia’s stock market regulator will increase scrutiny of analysts as part of a clampdown on selective briefings after questions were raised over coverage of Newcrest Mining Ltd. The Australian Securities & Investments Commission will make spot checks on company briefings and communications with analysts in the current half of the year, the regulator said yesterday in a statement. Newcrest shares fell 12 percent in the two days before the company announced a possible A$6 billion ($5.5 billion) writedown, raising concern of selective briefing. Australia requires companies to disclose all market-sensitive information to the Australian Stock Exchange. Newcrest has said it didn’t selectively brief analysts ahead of the announcement. Read more of this post