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Thursday, 6 February 2014

Feb 5, 2014: News Updates

The I.M.F. Needs a Reset

February 4, 2014

For all the criticism that has been directed at it over the decades, the International Monetary Fund provides vital services to the world economy. In particular, it acts as the nearest thing to an international lender of last resort to countries experiencing external financial crises — and thereby helps to maintain international financial stability.

But the I.M.F. is experiencing a crisis of governance. The governments of big developing countries have become frustrated with the unwillingness of Western countries to adjust the distribution of power in the fund in line with their rising economic weight. Frustration has encouraged some to explore bypass institutions, such as the development bank and the currency-pooling scheme being negotiated among the BRICS (Brazil, Russia, India, China, South Africa)

Argentine Banking System Archives Destroyed By Deadly Fire

 02/05/2014 13:57 -0500

While we are sure it is a very sad coincidence, on the day when Argentina decrees limits on the FX positions banks can hold and the Argentine Central Bank's reserves accounting is questioned publically, a massive fire - killing 9 people - has destroyed a warehouse archiving banking system documents. As The Washington Post reports, the fire at the Iron Mountain warehouse (which purportedly had multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents) took hours to control and the sprawling building appeared to be ruined. The cause of the fire wasn’t immediately clear - though we suggest smelling Fernandez' hands...

The $15 trillion shadow over Chinese banks

China analyst Charlene Chu explains why the nation is on the verge of crisis

In a country where the banks, even the largest, are not known for openness, Chu has warned since 2009 about a rapid expansion in lending that has seen something close to $15 trillion (£9.1 trillion) of credit created, fuelling a property and infrastructure boom that has no equal in history.
.... “I just don’t agree with that because there is so much inter-linkage between the formal banking sector and the shadow banking sector and this product [the ICBC trust] is a good example.” Many take comfort that foreign currency reserves, estimated at close to $4 trillion, could be used to rescue the financial system in a crisis. Chu says such optimism is wishful thinking.

“The FX [foreign exchange] reserves cannot be used nearly to the extent that people think they can. There are some analysts that think they can’t be used at all, but I disagree with that.

....Not following the party line has seen Chu travel to China to inspect first-hand the building of “ghost cities” that developers claim are fully occupied, but that appear to be deserted except for a scattering of maintenance staff and increasingly despondent “entrepreneurs”.

UN accuses Vatican of adopting policies that allowed priests to rape children

UN has demanded that the Vatican 'immediately remove' all clergy who are known or suspected child abusers and turn them over to police, in an unprecedented and scathing report

 The Catholic Church continues to protect paedophile priests and should immediately turn them over to the authorities, the United Nations said in scathing report on the Vatican’s decades-long failure to tackle the scandal of sexually abusive clergy.

In a damning critique of the Holy See’s attempts to shield clergy from prosecution, the UN Committee on the Rights of the Child said that “tens of thousands of children worldwide” had been raped or molested in the past and that the abuse continues today.

Europe exposed: Over $3 tn in emerging market loans

Published time: February 04, 2014 15:09
Edited time: February 05, 2014 17:08

 Negative shocks in the emerging market – fueled both internally and externally, have resulted in a $7 billion leak out of exchange traded funds in developing nation assets in January 2014, according to Bloomberg data.

Europe is currently trying to reform its banking system by performing stress tests to make sure banks have adequate capital, and it can expose weak points and boost investor sentiment after it was pummeled by the 2008 financial crisis.

Philippine leader likens China's rulers to Hitler

By Karl Malakunas 11 hours ago

Manila (AFP) - Philippine President Benigno Aquino has warned China's efforts to claim disputed territories are like Nazi Germany's before World War II, drawing a fierce Chinese response on Wednesday branding him ignorant and amateurish.
In an interview with the New York Times, Aquino called for world leaders not to make the mistake of appeasing China as it seeks to cement control over contested waters and islands in the strategically vital South China Sea.

Google set to avoid EU’s $5 billion fine as antitrust case deal in sight

Published time: February 05, 2014 18:25

In a tentative agreement, Google has offered new concessions to the EU, which will probably be enough to settle a three-year antitrust investigation against the web giant; Google’s competitors accuse it of promoting its own services at their expense.

Canada to give bank account information to IRS under tax-sharing deal

Wed Feb 5, 2014 4:21pm EST

OTTAWA (Reuters) - Canada and the United States have signed a tax-information sharing agreement, officials from the two countries said on Wednesday, months ahead of implementation of a new U.S. law to crack down on offshore tax avoidance.

Tube strike disrupts journeys for London commuters

Overground trains and buses packed as major central stations close and severely limited service operates across tube network

This Time, Boehner "Capitulates" Early On Debt Ceiling

02/05/2014 15:28 -0500

Apparently squeezed by an internal party split, The Hill reports that House Republican leaders have concluded that they cannot pass an increase in the debt ceiling without help from Democrats, abandoning plans to tie legislation either to ObamaCare or the Keystone pipeline. Having initially planned on these negotiation points, Boehner discovered he would not have enough votes to pass the bill... and folded. That left Republican leaders with no clear alternative to addressing the debt limit, which, as we noted is rapidly approaching at the end of February, as a combination of Republicans and Democrats will be needed to get a debt-limit boost through the House - leaving some Reps describing a clean debt-ceiling bill as "Capitulation."

JPMorgan, Morgan Stanley fined $1.8 bn for concealing pre-crisis mortgage risk

Published time: February 05, 2014 12:30

Morgan Stanley has agreed to pay $1.25 billion to the US government, and JPMorgan has been fined $614 million as a penalty for concealing the full risk associated with mortgage securities.

... The Morgan Stanley settlement with the FHFA will be the third-largest against a Wall Street firm, with the authority having filed a total of 18 cases overall, the Wall Street Journal reports.

JP Morgan has so far paid the biggest fine of $4 billion, with Deutsche Bank second with a $1.93 billion bill.

In a fresh settlement JPMorgan agreed to pay $614 million for violating the False Claims Act, as the bank originated and acted as an underwriter for non-compliant mortgage loans submitted for insurance coverage and guarantees by US federal agencies.

 Feb. 5, 2014, 12:41 p.m. EST

Probe into foreign-exchange practices at banks heats up

New York regulator requests documents from Goldman Sachs and others

 Feb. 5, 2014, 11:09 a.m. EST

Rock-Star Pope at war with GOP’s Ayn Rand Capitalism

Commentary: Conservatives in defining ideological war of 21st century

 SAN LUIS OBISPO, Calif. (MarketWatch) — Yes, Pope Francis is officially a rock star. First pope ever on a Rolling Stone cover. Already Person of the Year for Time. Plus a CNN poll says 88% of Americans approve of Pope Francis.

All red flags warning Paul Ryan and GOP conservatives their extreme-right agenda is in more trouble than the low congressional poll numbers suggest. And no match against the Rock-Star Pope and his radical anticapitalist revolution for 1.2 billion Catholics worldwide.

Short term, we expect conservative politicians will keep pushing their hard-right agenda. But Pope Francis is a game-charger. Yes, conservatives will continue to suppress the minority vote ... block immigration reform ... cut aid to programs for the poor ... deny women the right to safe health care ... embrace Big Oil climate-science deniers ... and much more.

But they’re out of step with the revolution. The Rock-Star Pope is leading a historic paradigm shift, the voice an emerging new global collective conscience that’s rejecting today’s conservatism.

Vatican bank admits widows victims of crackdown

Associated Press
By NICOLE WINFIELD January 30, 2014 1:59 PM
VATICAN CITY (AP) — Dozens and perhaps hundreds of widows and Vatican pensioners recently came in for a rude surprise: The Vatican bank told them they had to close their accounts or risk losing access to their money — all in the name of Pope Francis' reform efforts, The Associated Press has learned.
The bank now says it was all a "technical error" and that the widows and pensioners are being kept on as clients. That reversal came despite the bank's highly-publicized plan to close so-called "lay accounts" as it tries to mend relations with Italian authorities who have suspected that Italians were using the bank as a tax haven.

German ex-minister tapped as Vatican envoy

2:10 AM Tuesday Feb 4, 2014

BERLIN (AP) Germany plans to make a former minister who quit the government over allegations that she plagiarized parts of her thesis its new ambassador to the Vatican.

Annette Schavan, a reform-minded Roman Catholic and long-serving education minister who was considered close to Chancellor Angela Merkel, resigned last February after a university withdrew her doctorate. Schavan denies plagiarism and is fighting the decision.

Cost dispute halts work on Panama Canal expansion

 Feb 5, 2014 4:25pm EST

(Reuters) - The project to expand the Panama Canal, one of the world's most important shipping routes, was in doubt on Wednesday after talks between the canal administrator and a Spanish-led building consortium fell apart and work ground to a halt.

Group United for the Canal, a consortium led by Spanish builder Sacyr, said in a statement that the government's canal authority had broken off talks on who will pay some $1.6 billion needed to complete the ambitious project.

Scientists sound warning over new bird flu virus

Chinese scientists sounded the alarm Wednesday after a new bird flu virus, H10N8, killed an elderly woman in December and infected another individual last month.

 Duke Energy plant reports coal-ash spill

Posted: Tuesday, Feb. 04, 2014

Duke Energy said Monday that 50,000 to 82,000 tons of coal ash and up to 27 million gallons of water were released from a pond at its retired power plant in Eden into the Dan River, and were still flowing.

Duke Energy told us their coal ash ponds were safe – they were wrong

“We are confident that each of our ash ponds has the structural integrity necessary to protect the public and the environment.”

That’s what Duke Energy says on its website in its defense of heated criticism that it has received for how it handles coal ash, a toxic waste product of burning coal.

Now, as a disaster for a local river and the people who live near it in North Carolina unfolds, it’s clear that the company was wrong.

 Ireland banking collapse trial begins

Trial of former Anglo Irish Bank executives is expected to be the longest and most complex in Irish legal history.
Last updated: 05 Feb 2014 20:59

 Switzerland Aims to Become World's 'Digital Safe'

In a massive underground bunker in a secret location in the Swiss Alps lies one of Switzerland's 55 data centres. Industry insiders predict the wealthy Alpine nation will soon be known as the world's data vault.

Storm cancels thousands of fights in US Northeast

Freak snow storm paralizes northern Iran

British storms cause power cuts, batter sea walls

More than 8,000 homes were without power in southwest England on Wednesday after fresh storms battered the region, sending huge waves crashing onto the coastline and damaging sea defences.

February 4, 2014, 4:01 p.m. ET

Brazil Power Outages Cut Electricity to Dozens of Cities

Serbia: 1,000 evacuated from snow-hit cars, buses

Questions of preservation after ancient village found in downtown Miami

By Matt Smith and Justin Lear, CNN
February 5, 2014 -- Updated 1234 GMT (2034 HKT)
(CNN) -- At the heart of a $600 million complex of Miami condominium and office towers, a network of holes in the ground has provided new insight into the people who were there first.

The holes lay out the foundations of a prehistoric settlement of the ancient Tequesta tribe at the confluence of the Miami River and Biscayne Bay. The Tequesta lived in what's now metro Miami until the 1700s, and the holes held pine posts that framed their thatched buildings.

Google mystery barge may be homeless

San Francisco (AFP) - A mystery barge being built by Google on a pier at a former Navy base in the San Francisco Bay may be told to cast off.

It turns out that officials running the base while it is in the process of being turned over to the city of San Francisco don't have permits for the Internet titan or anyone else to construct a vessel on the shore of Treasure Island.

"This is Google's vessel, but we are not dealing with them," San Francisco Bay Conservation and Development Commission regulatory affairs director Brad McCrea told AFP.