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Wednesday, 12 February 2014

Feb 12, 2014: News Updates

Four Latin American countries agree $85 bn free-trade deal

Published time: February 11, 2014 13:44
Chile, Colombia, Peru and Mexico have signed a treaty to eliminate tariffs on 92 percent of goods and services. The Pacific Alliance is free trade area of some 210 million people, accounting for more than a third of all Latin American and Caribbean GDP.

The move is a big step towards strengthening the countries' position alongside the strong neighboring trade pact – Mercosur - which includes Argentina, Brazil, Paraguay, Uruguay and Venezuela.

"This translates into more investment, more competitiveness and as a consequence, more employment, and good quality employment. This is the fundamental purpose of this whole exercise," the Wall Street Journal quotes Colombia's President Juan Manuel Santos.

Nothing personal? Obama says no nation avoids US spying

Published time: February 12, 2014 02:42

Ally or not, the US does not have an agreement with any country that would prevent espionage in light of national security concerns, President Obama said on Tuesday, prior to an official state dinner with a European head of state.

During a joint press conference with French President Francois Hollande, Obama was asked whether his selection of France for the first state visit of his second term as president signalled a post-spying agreement with America’s European ally. Through documents supplied by former National Security Agency contractor Edward Snowden, it was revealed that the NSA spied on French citizens and the internal communications of France's foreign ministry and diplomats.

“There’s no country where we have a no-spy agreement,” Obama answered.

Bank Of England Stress Testing Banks For Property Crash - Risk Of Bail-Ins- 2/12/14

The U.K. has already almost breached the unemployment level that was a target for considering tightening policy, and Governor Mark Carney is widely expected to update the market on interest rate guidance.

Possibly of more importance is the fact that the Bank of England is to test whether UK banks and building societies would go bust if house prices crash. A ‘stress test’ will examine whether banks will need bailing out, or bailing in as seems more likely now, if house prices materially correct again.

Preparations have been or are being put in place by the international monetary and financial authorities, including the Bank of England for bail-ins. The majority of the public are unaware of these developments, the risks and the ramifications.

The test is being drawn up by the Bank’s Financial Policy Committee, whose members include Governor Mark Carney.

Strong China January trade data sparks cheers, doubts

BEIJING Wed Feb 12, 2014 1:41am EST
(Reuters) - China surprised markets with a thumping trade performance in January as import growth hit a six-month high, drawing some skepticism about the data but still allaying fears of a deepening economic malaise.

Analysts who had expected the long Lunar New Year holiday to drag on January's trade warned that the figures may be inflated by fake trade transactions, where traders forge deals to sneak cash into the country past capital controls.

...Analysts also found it hard to explain China's record purchase of raw materials in January as underlying demand has not shown any convincing signs of a pick-up.

China: What Happened to the Gold Data?

Imagine the scenario. The company accounts are going to get checked out; the accounts department doesn’t have them ready. There’s a gap in the figures and they don’t tally. Never mind, they may just get through at a pinch and nobody will notice. The Chinese government must have been thinking the self-same thing when a 500-tonne gap appeared in the gold data of the country. Now the question on everyone’s lips is did the People’s Bank of China actually start hoarding gold while the price of the yellow stuff was weak last year?
Is China increasing its holdings of gold, just in case things go all pear-shaped in the economy? Apparently, the Chinese always said that gold wasn’t a useful asset and they already had $3.8 trillion in currency reserves that were diversified enough not to need that gold. But, in 2013, gold imports and gold production figures were much higher than the level of consumption. The Chinese government might have been strongly denying that they were buying up the gold at low prices, but they certainly seem to have been doing so. Still, who can blame them? They have the money to buy it and in true capitalist fashion, they bought when the price was low. Any Western consumer knows that’s what you do.

The OECD admits underestimating impacts of banking setbacks on Europe’s growth forecasts.

The Organization for Economic Cooperation and Development (OECD) has admitted that it underestimated the impacts of banking setbacks on its forecasts for Europe’s economic growth.
The Paris-based international organization said on Tuesday that Europe's austerity measures have caused less of a shock to growth than weak banking systems.
The OECD also acknowledged that the growth prospects for countries around the world have been overestimated.
The organization blamed the failure to spot the severity of the financial crisis in the eurozone as well as the impact of the global banking system meltdown for its forecasting errors in recent years.

 Feb. 11, 2014, 6:03 p.m. EST

BofA, Goldman among banks facing $16 billion in fines

 NEW YORK (MarketWatch) — The settlements of lawsuits so far with major banks pave the way for some $16 billion in additional penalties to be paid by banks including Bank of America and Goldman Sachs Group over mortgage securities sold to government-seized housing giants Fannie Mae and Freddie Mac.
Of the banks that have recently settled — including Morgan Stanley MS -0.03%  last week — the settlement amounts equate to roughly 12% to 13% of original principal balance of securities sold to the GSEs. The remaining banks could expect to pay approximately $16 billion in total if that settlement range holds. ...
Out of the 18 financial institutions that have been sued by the Federal Housing Finance Agency, seven firms have settled, including Morgan Stanley and J.P. Morgan Chase & Co. JPM -0.02% .

Ex-New Orleans mayor Ray Nagin convicted in bribery scandal

Hurricane Katrina leader accepted bribes, free trips in exchange for securing city contracts
The Associated Press Posted: Feb 12, 2014 3:03 PM ET
Former New Orleans Mayor Ray Nagin was convicted Wednesday on charges that he accepted bribes, free trips and other gratuities from contractors in exchange for helping them secure millions of dollars in city work while he was in office, including right after Hurricane Katrina's devastation in 2005.

Admiral's e-mail on photos of Osama bin Laden's corpse: 'Destroy them'

By Dugald McConnell, CNN
February 12, 2014

(CNN) -- Within two weeks of the raid that killed Osama bin Laden, the head of U.S. special forces issued orders that all photos of the body be either turned in or destroyed, a newly released document shows.

In an e-mail dated May 13, 2011, then-Vice Adm. William McRaven wrote the following: "One particular item that I want to emphasize is photos; particularly UBLs remains. At this point -- all photos should have been turned over to the CIA; if you still have them destroy them immediately or get them to the [redacted.]"

Microsoft denies global censorship of China-related searches

BEIJING Wed Feb 12, 2014 2:02am EST

(Reuters) - Microsoft Corp denied on Wednesday it was omitting websites from its Bing search engine results for users outside China after a Chinese rights group said the U.S. firm was censoring material the government deems politically sensitive., a China-based freedom of speech advocacy group, said in a statement on Tuesday that Bing was filtering out both English and Chinese language search results for terms such as "Dalai Lama", the exiled Tibetan spiritual leader whom Beijing brands as a violence-seeking separatist, charges he denies.

Mining index hits three-month high on China data

LONDON Wed Feb 12, 2014 9:21am
"Economic data from China is providing a lift to the mining sector, easing fears with regards to a potential slowdown in commodity demand," Keith Bowman, equity analyst at Hargreaves Lansdown, said.

22 Facts About The Coming US Demographic Shock Wave

By Michael Snyder, on February 10th, 2014

Today, more than 10,000 Baby Boomers will retire.  This is going to happen day after day, month after month, year after year until 2030.  It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it.  We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep.  Even if we didn't have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself.  During the first half of this century, the number of senior citizens in the United States is being projected to more than double.  As a nation, we are already drowning in debt.  So where in the world are we going to get the money to take care of all of these elderly people?

Insight: In Ukraine standoff, echoes of U.S.-Russia Cold War tensions

WASHINGTON Wed Feb 12, 2014 1:10am EST

(Reuters) - After Russian President Vladimir Putin visited Ukraine last July, U.S. diplomats got a private recap of the message he delivered behind closed doors to the country's leaders. Ukraine, Putin warned, would not be allowed to stray from Moscow's orbit.

Putin's blunt talk was an unexpected sign of how hard Moscow would fight Western influence on Ukraine, U.S. officials say, prompting Washington and European capitals to step up their engagement with Ukrainian government and opposition forces.

Seven months later, the United States and Russia are locked in a Cold War-style test of wills over the strategically located country of 45 million that has been racked by anti-government protests and sporadic violence.

Bitcoin hit by denial of service attacks as regulators prepare clampdown

WASHINGTON/NEW YORK Tue Feb 11, 2014 9:29pm EST

(Reuters) - Bitcoin is being hit by attacks from unknown computer hackers who are sending "mutated" lines of code into the program that runs the virtual currency, a spokeswoman from its main trade organization said in a statement on Tuesday.

The attacks are responsible for problems experienced by two bitcoin exchanges that caused them to temporarily halt withdrawals by customers who stored bitcoins in digital wallets provided by the exchanges, the Bitcoin Foundation said in a statement.

Retired lawyer killed after package sent to home explodes

February 12, 2014
Retired lawyer John Setzer, 74, died Monday after "an unknown package exploded," the Tennessee Bureau of Investigation said.
Cate and Setzer became partners at the law firm bearing their names between 1979 and 1991. Setzer worked on general civil cases and also specialized in living trusts, his former partner said.

Government puts forward ‘citizenship for investment’ bill

Published time: February 12, 2014 10:14

Russia’s Ministry of Economic Development together with Federal Migration Service have drafted a bill allowing citizenship to foreigners who invest at least 10 million rubles ($285,000) in Russia.

The bill containing amendments to the federal law on citizenship has already been discussed in government and will soon be submitted to the State Duma, Russian business daily Kommersant reported. It is part of the "national concept of migration policies" which is aimed at “the resettlement of specialists of various profiles, entrepreneurs and investors to places of permanent residence as well as stimulation of young people whose professions are currently in demand.”

China and Russia to build world’s biggest thermal power plant

Published time: February 12, 2014 11:55
China and Russia are to build the world’s biggest thermal power plant with an 8 gigawatt capacity. The Erkovetskaya TPP project in Russia’s Amur region could cost up to $24 billion, and will export energy to China where domestic demand is high.

Another JPMorgan Banker Dies, 37 Year Old Executive Director Of Program Trading

Ordinarily we would ignore the news of another banker's death - after all these sad events happen all the time - if it wasn't for several contextual aspects of this most recent passage. First, the death in question, as reported by the Stamford Daily Voice is that of Ryan Henry Crane, a Harvard graduate, who is survived by his wife, son and parents at the very young age of 37. Second, Ryan Henry Crane was formerly employed by JPMorgan - a bank which was featured prominently in the news as recently as two weeks ago when another of its London-based employees committed suicide by jumping from the top floor of its Canary Wharf building. Third: Crane was an Executive Director in JPM's Global Program Trading desk, founded in 1999 by an ex-DE Shaw'er, a function of the firm which is instrumental to preserving JPM's impeccable and (so far in 2013) flawless trading record of zero trading losses.
There was little detail surrounding the death:

Two arrested in UK fraud probe into Rolls Royce

UK fraud prosecutors have arrested two men in the capital, London, as part of a corruption probe into bribery and corruption at aerospace and defense group Rolls Royce.
The SFO launched a formal investigation into concerns about bribery and corruption in overseas markets such as China and Indonesia last December, according to Rolls Royce.
Europe’s largest defense contractor UK’s BAE Systems was fined USD 450 million in 2010 following corruption probes into deals made both domestically and abroad, including  in Saudi Arabia, Tanzania, Sweden, the Czech Republic and Hungary.

No Janet Yellen, The Economy Is NOT “Getting Better”

By Michael Snyder, on February 11th, 2014

On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that "the economic recovery gained greater traction in the second half of last year" and that "substantial progress has been made in restoring the economy to health".  This resulted in glowing headlines throughout the mainstream media such as this one from USA Today: "Yellen: Economy is improving at moderate pace".  Sadly, tens of millions of Americans are going to believe what the mainstream media is telling them.  But it isn't the truth.  As you will see below, there are all sorts of signs that the economy is taking a turn for the worse.  And when the next great economic crisis does strike, most Americans will be completely and totally unprepared because they trusted our "leaders" when they told us that everything would be just fine.

It is amazing how deceived people can be.  Just consider the case of 56-year-old Brian Perry.  He is a former law clerk that has applied for nearly 1,500 jobs since 2008 without any success.  But he says that he is "optimistic" that he will get another job soon because he believes that the economy is recovering...

Business News of Monday, 10 February 2014

Ghana’s economy could crash by June - Economist warns

Ghanaian Economist Dr. Theo Richardson says Ghana’s economy will crash by June this year if the Bank of Ghana continues with its kneejerk measures to rescue the cedi.

“The government is facing liquidity problems and if we don’t get the appropriate remedies to address the issues at hand the situation may worsen and by June the economy may crash,” Dr. Richardson said.

EU to approve new GM crop, ignoring majority members’ opposition

Published time: February 12, 2014 00:23
The European Commission is set to authorize the growing of genetically modified maize on European soil, despite 19 member states voting against the move, highlighting the “absurd” rules of weighted votes in the EU.

In a debate on Tuesday, 19 EU member states indicated that they would vote against the authorization of genetically modified maize because of health and environmental concerns and opposition in the European Parliament.

But because of the so-called comitology rules of the EU, their votes will be insufficient to overturn the decision of bigger member states that support the introduction of insect resistant Pioneer 1507.

Britain to tell Scotland: leave the UK and lose the pound, reports

LONDON Wed Feb 12, 2014 8:52am GMT

(Reuters) - Britain is likely to warn Scots that they cannot have a currency union with the rest of the United Kingdom if they vote for independence in a September referendum, local media reported, citing unidentified government sources.

The pro-independence Scottish National Party wants to keep the pound if there is a 'yes' vote in the September 18 referendum but Chancellor George Osborne is likely to reject a currency union, the BBC and the Guardian reported.

‘Scotland has everything to become one of the world’s richest countries’

Published time: February 11, 2014 14:23

“Scotland has the oil, it’s small, its population is less than 5 million and it has the same record. It has the opportunity to install the same regulatory and legislative [measures], to take the same options as Singapore or Switzerland. No other country in the world has the triple: the oil, regulatory issues and the fact that it is small,” Frisby told RT's Max Keiser on his show, the Keiser Report.

Nanomotors in vivo: Tiny motors set to motion in live human cells

Published time: February 11, 2014 21:02
For the first time tiny rocket-shaped synthetic motors have been placed inside live human cells. What has been a staple of science fiction is now a promising method to treat cancer, US scientists say.

Exclusive: Duo tracks double-dipping in U.S. oil firms' toxic tank cleanup

BIRMINGHAM, Alabama Mon Feb 10, 2014 11:40am EST

(Reuters) - A pioneer in cleaning up toxic messes, Thomas Schruben long suspected major oil companies of being paid twice for dealing with leaks from underground fuel storage tanks - once from government funds and again, secretly, from insurance companies.
...While the underground tank expert and the lawyer are reluctant to discuss details of ongoing litigation, Reuters found nine states have won settlements worth more than $105 million with four companies in the past three years - Chevron, Exxon, ConocoPhillips and its downstream arm Phillips 66, and Sunoco.