What Could Possibly Go Wrong

Why Is My US Brokerage Firm Closing My Account?

"In many cases the agreement that countries have insisted on with respect to FATCA is reciprocal. In other words, a country will say that yes they are willing to exchange information on financial accounts with the USA but the key word is 'exchange' – that is, in return, US financial institutions must also agree to provide information regarding their clients who are citizens of the country entering into the FATCA agreement with the USA. Imagine the mess this will cause for the large US banks and brokerage firms when they have to start reporting to foreign governments on their accounts for residents of these other countries." Continue reading →

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Could the U.S. delay Obamacare’s mandate for individuals, too?

"President Barack Obama can expect mounting pressure to make new concessions on healthcare reform, especially the requirement that all Americans obtain insurance, after delaying penalties for businesses for the first year of his plan. The individual mandate, which the U.S. Supreme Court upheld as constitutional a year ago, is the government’s only lever to compel young healthy people to sign up for federally subsidized coverage in new online health insurance marketplaces that are slated to begin enrolling new beneficiaries on October 1. If too few younger adults enroll, insurance costs could soar and jeopardize the entire reform effort." Continue reading →

Continue ReadingCould the U.S. delay Obamacare’s mandate for individuals, too?

Egypt’s army ‘ready to die’ to protect against ‘any terrorist, radical or fool’

"Egypt’s high command said on Wednesday the army was ready to die to defend Egypt’s people against terrorists and fools, in a response to Islamist President Mohamed Mursi that was headlined 'The Final Hours' on the official Facebook page of the Supreme Council of the Armed Forces (SCAF). Issued three hours after Mursi appeared on television to reject an ultimatum from Sisi that he share power with his opponents or face a military solution by 10:00 a.m. EDT (1500 GMT), a military source said the statement made clear that the armed forces would not abandon their demands." Continue reading →

Continue ReadingEgypt’s army ‘ready to die’ to protect against ‘any terrorist, radical or fool’

Cheers erupt as Egyptian president removed and constitution suspended by military

"The head of Egypt’s armed forces issued a declaration on Wednesday suspending the constitution and appointing the head of the constitutional court as interim head of state. In a televised broadcast, flanked by military leaders, religious authorities and political figures, General Abdel Fattah al-Sisi effectively declared the removal of elected Islamist President Mohamed Mursi. Sisi called for presidential and parliamentary elections, a panel to review the constitution and a national reconciliation committee that would include youth movements. He said the roadmap had been agreed by a range of political groups." Continue reading →

Continue ReadingCheers erupt as Egyptian president removed and constitution suspended by military

Hope mixes with fear as Egyptian army prepares to overthrow Morsi

"The army ultimatum has bred relief among many Egyptians, weary of what they see as Mursi’s clumsy, power-grasping rule, and who see the army as the only national institution capable of getting a chaotic revolutionary transition back on track. Signs of Egypt’s latest political uproar pop up everywhere downtown. Vendors selling socks and jewelry have supplemented their wares with small Egyptian flags. Guy Fawkes masks – an emblem of protest against authority around the world – cover store mannequins. Anti-Mursi chants break out on street corners." Continue reading →

Continue ReadingHope mixes with fear as Egyptian army prepares to overthrow Morsi

The Man Who Lost $2 Million an Hour!

"Last year, he lost about $19.4 BILLION! What a terrible year. And this year, it’s not getting any better. So far he’s lost another $10.3 billion. That’s a total loss of $29.7 billion in less than two years. But, according to Forbes, he’s still worth about $4.8 billion … so there’s no need to feel sorry for this 'poor' guy. He only has himself to blame. He’s the one who made such bad investment decisions. Last year, he made news around the globe when he said: 'I will be the world’s richest man.' He was the world’s 7th richest man. After losing a big chunk of his fortune last year, today, he’s not even one of the top three richest Brazilians." Continue reading →

Continue ReadingThe Man Who Lost $2 Million an Hour!

Kyle Bass: If China Doesn’t Change, ‘Full-Scale Recession’ Sometime Next Year

"'The compounded annual growth of bank assets as measured by the China Banking Regulatory Commission has been 30.8%,' Bass wrote. 'To give some perspective, a 30.8% compounded annual growth of credit in the U.S. equivalent over 5 years would be an expansion of $33 trillion. This rate of credit growth is three times the total credit system growth experienced in the U.S. at the peak of the bubble in 2006... The debt-to-equity ratios of Chinese companies are exploding as they funnel new capital, not into yield returning investments, but into the black holes on their balance sheets that have been created by a slowing growth environment.'" Continue reading →

Continue ReadingKyle Bass: If China Doesn’t Change, ‘Full-Scale Recession’ Sometime Next Year

China’s central bank ready to unveil deposit insurance

"The central bank released the China Financial Stability Report 2013 on 7 June, saying that a consensus has been reached on the establishment of a deposit insurance system and that the system may be launched and implemented at a suitable time. Sources say China will set up an insurance fund and the maximum coverage for each bank account will initially be set at Rmb500,000. With the absence of a deposit insurance system, the state has actually taken on the responsibility to guarantee deposits in banks, which can easily lead to slack risk management and excessive speculation of commercial banks in seeking profits, the central bank report said." Continue reading →

Continue ReadingChina’s central bank ready to unveil deposit insurance

Loan Practices of China’s Biggest Banks Raising Concern

"Text message solicitations began arriving on the mobile phones of many of China’s wealthy last month, promising access to lucrative wealth management products with yields far above the government’s benchmark savings rate. The offers are not coming from fly-by-night operators but some of China’s biggest banks. They are raising huge pools of cash to finance a relatively new and highly profitable sideline business: lending outside the scrutiny of bank regulators. The complex way they go about making off-the-balance-sheet loans is at the heart of China’s $6 trillion shadow banking industry, which the government is now trying to tame." Continue reading →

Continue ReadingLoan Practices of China’s Biggest Banks Raising Concern

Happy Endings in China?

"Couple potential (and ongoing) unrest regarding further urbanization with a lagging economy, an unbalanced banking sector and dwindling exports and you have a recipe for further questions about the Chinese Miracle. The biggest gamble of all may be the ChiComs' recent announcement that they intend to allow yet more free-market activity to take place. At what point do market forces begin to overwhelm ChiCom command-and-control facilities, especially when it comes to high-end monetary economy where the power resides? For all these reasons, we would imagine that even if China escapes a hard landing for now, there is one in store sooner or later ..." Continue reading →

Continue ReadingHappy Endings in China?