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Friday, 14 February 2014

Feb 14, 2014: News Updates

German minister resigns in blow to new Merkel government

By Erik Kirschbaum

BERLIN Fri Feb 14, 2014 12:26pm EST

(Reuters) - A senior German minister resigned on Friday amid accusations he leaked confidential information about a fellow lawmaker suspected of possessing child pornography, dealing a blow to Chancellor Angela Merkel and her two-month old government.

The resignation of Agriculture Minister Hans-Peter Friedrich, the latest in a series of cabinet departures under Merkel, could aggravate tensions in Berlin's new "grand coalition" at a time when it is trying to push through complex reforms of pensions and renewable energy.

 Delhi minister quits over anti-corruption law

Kejriwal resigns from the capital's top elected post after the parliament blocked an anti-corruption bill he endorsed.
Last updated: 14 Feb 2014 18:18

Delhi Chief Minister Arvind Kejriwal has resigned over delays in the introduction of an anti-corruption bill he was pushing for, less than 50 days after taking power in the Indian capital.

Kejriwal, a former tax collector who heads The Aam Aadmi (Common Man) Party, made a stunning victory in India's capital in state elections in December on an anti-corruption platform.

Goldman Sachs to advise Spain on Bankia stake sale - FROB

Fri Feb 14, 2014 7:11pm GMT
(Reuters) - Spain's bank rescue fund FROB said on Friday it chose Goldman Sachs to advise it on the sale of part of the government's controlling stake in nationalised lender Bankia (BKIA.MC).

The government is taking steps to start selling part of its 68 percent holding in Bankia, but will maintain control. Economy Minister Luis de Guindos told Reuters this week that small stakes could be sold during the year before a bigger sale in the medium-term.

The Crisis Circle Is Complete: Wells Fargo Returns To Subprime

Those of our readers focused on the state of the housing market will undoubtedly remember this chart we compiled using the data from the largest mortgage originator in the US, Wells Fargo. In case there is some confusion, as a result of rising interet rates (meaning the Fed is stuck in its attempts to push rates higher), the inability of the US consumer to purchase houses at artificially investor-inflated levels (meaning housing is now merely a hot potato flipfest between institutional investors A and B), and the end of the fourth dead-cat bounce in housing (meaning, well, self-explanatory), the bank's primary business line - offering mortgages - is cratering.
So what is a bank with a limited target audience for its primary product to do? Why expand the audience of course. And in a move that is very much overdue considering all the other deranged aspects of the centrally-planned New Normal, in which all the mistakes of the last credit bubble are being repeated one after another, Reuters now reports that the California bank "is tiptoeing back into subprime home loans again."
And so the circle is complete.

 European Banks Avoiding Risky-Loan Disclosure Face Review

By Nicholas Comfort Feb 14, 2014 4:00 PM
A dark corner of European finance is about to be illuminated by European Central Bank inspectors who are sifting through loans that banks restructure for clients and don’t fully disclose.

“What’s scaring investors is the question of whether banks are giving money to companies that deserve to go bankrupt and keeping them alive to avoid recording losses,” Mascia Bedendo, an assistant professor of finance at Bocconi University in Milan, said in a phone interview. “The amount of forborne and nonperforming loans is still very obscure.”

Four of the continent’s 10 biggest banks by assets don’t quantify loans they renegotiate, company filings show. Less than one-third of 39 major lenders disclose what the European Securities and Markets Authority calls “clear quantitative information.” None of the firms that publish figures, including Deutsche Bank AG (DBK) and Intesa Sanpaolo SpA (ISP), reveal as much as U.S. counterparts such as JPMorgan Chase & Co. (JPM)

 Feb. 14, 2014, 2:04 p.m. EST

Central banks continue to make the same mistake

By Anthony Mirhaydari
It's clear now: The cheap-money pumping isn't going to stop unless inflation kicks higher. It's inevitable now as both the Bank of England and the Federal Reserve weaken their "forward guidance" constraints on near 0% interest rates as unemployment rates fall faster than expected (mainly due to labor-force dropouts).
They've moved the goalposts to keep the cheap money — and the liquidity-addicted stock market — on a roll.
...And thus, with a small group of unelected bureaucrats responsible for the price of money and, indeed, the price of financial assets as well, it's all but assured that the cost of living is headed higher.

 China Banks’ Bad Loans Reach Highest Since Financial Crisis

By Bloomberg News Feb 14, 2014 8:20 AM GMT+0100
Chinese banks’ bad loans increased for the ninth straight quarter to the highest level since the 2008 financial crisis, highlighting pressures on asset quality and profit growth as the world’s second-largest economy slows.
...Chinese banks are struggling to keep soured loans in check and extend earnings growth as the slowing economy and government efforts to curb shadow financing make it harder for borrowers to repay debt. Standard & Poor’s Ratings Services said this week that loan quality will decline in 2014 as banks remain at risk from debt-laden local government financing vehicles and manufacturers with too much capacity.
“China’s economic growth turned downward with the new leadership switching policy focus to reform and risk management from emphasizing stable expansion,” said Wang Yichuan, a Wuhan-based analyst at Changjiang Securities Co. “Naturally the bad loans will increase along with the change. We expect the deterioration to continue for two more years.”

Obama administration calmly debates killing more Americans

Amnesty International and Human Rights Watch have suggested that US drone strikes are war crimes.

The critical reader could be forgiven for feeling like he or she had stepped into a surreal universe while reading The New York Times on Tuesday? When he read, in a demure column on the left-hand side, that the U.S. was debating slaughtering another American by drone strike.

 Libya denies coup bid after general's comment

Prime minister says government safe and security under control after army official calls for parliament to be suspended.
Last updated: 14 Feb 2014 14:58
Libyan Prime Minister Ali Zeidan has said the government is safe and security under control, describing rumours of a coup "ridiculous".

Zeidan's remarks on Friday came in response to a senior army official's call for parliament to be suspended and for the armed forces to "rescue" the country.

Ghana: Weakening Currency Worries Ghana

By Isaac Kaledzi, 13 February 2014
The cedi fell to a record low on foreign exchange markets when the United States scaled back its stimulus program and investors ran shy of emerging markets. Ghana's central bank responded by raising its main interest rate by 2 full percentage points on February 6, 2014 and the government has tightened foreign exchange controls.

Bitcoin Hackers Steal $2.6M From Silk Road

Feb. 14 (Bloomberg) -- Bloomberg’s Matt Miller reports on the hacking of the Silk Road website that cost user $2.6 million worth of Bitcoin deposits on Bloomberg Television’s “Bloomberg Surveillance.”

Mali Arrests Ex-Defense Chief Over Paratrooper Killings

13 February 2014
Authorities in Mali have arrested the country's former defense minister, General Yamoussa Camara, in connection with the killings of 21 paratroopers loyal to ousted president Amadou Toumani Toure.

Details of the charges were not immediately clear Thursday. But Reuters news agency quotes a senior military official alleging that Camara tried to cover up the April 2012 killings.

Canadaproblems: How should the Harper government spend $3 billion?

By Andy Radia | Canada Politics – 1 hour 19 minutes ago

The United States is projecting a deficit of about $600 billion. In the U.K., their government intends to run a deficit until 2018-19.

Meanwhile, in Canada, the media seems obsessed this week with how the government should spend between $2.5 and $3 billion from a projected $6.4 billion surplus.

Bill Gates’ Energy Co Files for Bankruptcy

By Charles Kennedy | Thu, 13 February 2014
Bill Gates’ Texas energy company has filed for bankruptcy protection as the depressed power market results in untenable financial losses.

The company, Optim Energy (EnergyCo LLC), owned by a Gates investment fund, filed Chapter 11 Bankruptcy papers on Wednesday for its three power plants in eastern Texas, citing their inability to counter growing losses in the current market.

It Was So Cold In January, Even The Internet Froze

Of course, the internet can not freeze - at least not in the Old Normal world - however that is the only logical explanation we can offer in a world in which yesterday's atrocious retail sales were blamed on the weather - supposedly people stay at home, don't drive, don't go to the mall, don't shop because they have never had to engage in such activities in the winter when it snows outside - and yet online retail sales.... dropped even more? Because we know that in said world, consumption weakness can not possibly be explained by a tapped out US consumer who actually has little disposable cash left, and so we have to assume, correctly, that the weather was so bad in January, that even the Internet and online retail websites, must have frozen. There is no other explanation.

 Companies Squeeze 401K Plans From Facebook to JPMorgan

Feb 14 2014
Employers are squeezing their workers’ retirement savings, holding back on both the amount and the timing of 401(k) matching funds and dragging out vesting schedules. Taken together, these measures are making it more difficult to save for old age.

Major companies that have engaged in such practices in recent years include Whole Foods Market Inc. (WFM), Facebook Inc., Oracle Corp. (ORCL), Caesars Entertainment Corp. and JPMorgan Chase & Co.

Clashes, teargas mark third anniversary of Bahrain uprising

Published time: February 14, 2014 04:26
Clashes with police have marked the third anniversary of the Bahrain uprising that had seen numerous human rights violations by the government and wide social discontent of the majority Shia population with the minority ruling Sunni monarchy.

Police have used tear gas in a number of villages outside the capital Manama across the small island nation as the security forces moved in to disperse gatherings.

In some districts protesters have been setting barricades of burning tires to prevent police from moving in. Protesters were chanting "Down with Hamad", referring to the king and "Only to Allah we kneel."

Thai business delegation to visit Iran on February 16

Fri Feb 14, 2014 7:21PM GMT
A high-ranking Thai business delegation will visit Iran next week to discuss avenues for enhancing economic ties between the two countries, an Iranian official says.

The delegation headed by the director general of Thailand Ministry of Commerce’s International Trade Development Center, and comprising representatives of different commercial and manufacturing sectors of the country will visit Iran from February 16 to 18, said head of Iranian Imports Association Mohammad Hossein Barkhordar on Friday.

U.S. to pursue trade dispute over Chinese, Taiwanese solar imports

WASHINGTON Fri Feb 14, 2014 12:06pm EST
(Reuters) - Imported solar energy products from China and Taiwan could harm the local solar industry, U.S. trade officials found on Friday, potentially opening the door to widening the duties on the products.
The U.S. International Trade Commission's decision means the Commerce Department will continue with its investigation into whether the products are being sold in the United States below their fair value, or if their manufacturers receive inappropriate levels of subsidies, and suggest duties.

Former German chancellor surprised that NSA continued to spy on Merkel

Published time: February 14, 2014 18:52
The former chancellor of Germany now says he was surprised to hear that the United States National Security Agency, or NSA, spied on his country’s current head of government after he left office almost a decade ago.

Earlier this month, NSA documents showed that the spy agency conducted surveillance operations starting in 2002 that targeted Gerhard Schröder during his term as chancellor.

Italy overturns 'absurd' drug law equating marijuana and hard drugs

Published time: February 14, 2014 16:08
Italy’s constitutional court has overturned a controversial law equating cannabis with cocaine and heroin. The decision could see around 10,000 people released from the country’s overburdened jails.
The court ruled the law was “illegitimate,” without elaborating further.
The law, passed by former Prime Minister Silvio Berlusconi in 2006, has been blamed for Italy’s swelling prison population, as sentences for selling, growing or possessing marijuana effectively tripled.

Winter storm buries parts of northeast; death toll at 20

FEb 14 2014
(Reuters) - The U.S. East Coast dug out on Friday from the final wallop of a deadly four-day storm that dumped more than two feet of snow in some places, causing chaos from the South to New England.

Indonesia’s violent Mount Kelud eruption kills 2, displaces hundreds of thousands

Published time: February 14, 2014 04:02

The Indonesian island of Java is in a state of emergency, as a gigantic volcano eruption causes 200,000 people to flee their homes, as airports shut down and 17-kilomoter plumes of ash blanketed the sky.

Thursday night’s eruption of Mount Kelud was so powerful it was heard at distances of 130 kilometers in the country’s second largest city of Surabaya, as ash blanketed everything in the vicinity. The volcano is considered to be among the most dangerous on the densely populated island.