China's Big Banks Probed over Bad Loans

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Friday June 08, 2012 · 4:32 PM PDT

2012/06/08 · 16:32

Major Chinese banks such as ICBC are being probed by regulators for failing to report non performing loans:

China's banking regulator has noticed a contradiction between a surge in some categories of problematic loans on the one hand and a decline in non-performing loan ratios on the other over the past few months, and it is taking a closer look at lenders' loan classification, said a senior official on Monday.
"We are already aware of an obvious increase in overdue loans and 'special-mention' loans. Further statistics and analysis are necessary for us to discover the cause of the inconsistency and how much hidden risk there is," said the source from the China Banking Regulatory Commission, who declined to be identified. […]

The regulator ordered the top five lenders - Industrial and Commercial Bank of China Ltd, China Construction Bank Corp, Bank of China Ltd, Agricultural Bank of China Ltd and Bank of Communications Co Ltd - to examine the classification of all their loans as of the end of last year, the newspaper reported, citing an anonymous source.

The Anomaly

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Wednesday May 02, 2012 · 7:59 PM PDT

2012/05/02 · 19:59

Give a man control of the nation's money supply and he cares not who makes the laws. Who sits both on the NY Fed's Board of Directors and is the CEO of its biggest shareholder? His bank's bets are so big they roil the market:

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has transformed the bank's chief investment office in the past five years, increasing the size and risk of its speculative bets, according to five former executives with direct knowledge of the changes.
Achilles Macris, hired in 2006 as the CIO's top executive in London, led an expansion into corporate and mortgage-debt investments with a mandate to generate profits for the New York- based bank, three of the former employees said. Dimon, 56, closely supervised the shift from the CIO's previous focus on protecting JPMorgan from risks inherent in its banking business, such as interest-rate and currency movements, they said.

Some of Macris's bets are now so large that JPMorgan probably can't unwind them without losing money or roiling financial markets, the former executives said, based on knowledge gleaned from people inside the bank and dealers at other firms...

JPM's $70 Trillion in derivatives shown in double stacked pallets of $100 bills 1000 ft high stretches several city blocks

The Anomaly

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Saturday April 21, 2012 · 3:02 PM PDT

2012/04/21 · 15:02

Citigroup shareholders unhappy with the company's performance have rejected a proposal to increase the CEO's pay to $15m:

Vikram Pandit, Citigroup’s chief executive, turned around this week to find that the crowd of supporters he thought he had at his back had melted away. Without an overt campaign or agitation from a leading activist, shareholders simply refused to approve his $15m pay package.
He was not the only one to be shocked when over half of the votes cast on pay at the bank’s annual meeting were against or withheld. The vote made Citi the first big, financial company in the US to have suffered such a defeat. Patrick McGurn, general counsel at shareholder voting agency ISS, says the rebellion came out of the blue. “We hadn’t heard any drum beat about pay.” […]

At Citi, investors have suffered 90 per cent decline in their shares over the past decade. A cash bonus of $5.3m and $8m in deferred stock and cash for Mr Pandit rubbed salt into their wounds.

Image source: AFL-CIO

The Anomaly

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Monday April 16, 2012 · 7:41 PM PDT

2012/04/16 · 19:41

Since GPS tracking was recently ruled unconstitutional, the State department is looking to exploit alternative avenues of surveillance. The nation's top spy boss has an eye towards 'smart' devices:

More and more personal and household devices are connecting to the internet, from your television to your car navigation systems to your light switches. CIA Director David Petraeus cannot wait to spy on you through them.
Earlier this month, Petraeus mused about the emergence of an “Internet of Things” — that is, wired devices — at a summit for In-Q-Tel, the CIA’s venture capital firm. “‘Transformational’ is an overused word, but I do believe it properly applies to these technologies,” Petraeus enthused, “particularly to their effect on clandestine tradecraft.”

All those new online devices are a treasure trove of data if you’re a “person of interest” to the spy community. Once upon a time, spies had to place a bug in your chandelier to hear your conversation. With the rise of the “smart home,” you’d be sending tagged, geolocated data that a spy agency can intercept in real time when you use the lighting app on your phone to adjust your living room’s ambiance.

“Items of interest will be located, identified, monitored, and remotely controlled through technologies such as radio-frequency identification, sensor networks, tiny embedded servers, and energy harvesters — all connected to the next-generation internet using abundant, low-cost, and high-power computing,” Petraeus said...

The Anomaly

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Wednesday April 11, 2012 · 5:42 PM PDT

2012/04/11 · 17:42

Does lipstick really lower IQ? The FDA found up to 7.2 ppm of lead in a recent survey:

Four hundred types of lipstick from brands such as L’Oreal SA (OR) and The Procter & Gamble Co. contain trace amounts of lead, according to U.S. regulators who are evaluating whether to recommend an acceptable limit.
L’Oreal’s Color Sensational Pink Petal topped the list of brands purchased between February and July 2010 that were tested for lead by the Food and Drug Administration, with 7.19 parts per million, the agency said on its website. Paris-based L’Oreal made half of the 10 lipsticks with the highest lead levels, though all are safe, the FDA said.

Products sampled in 2010 had average concentrations of 1.11 parts per million, close to the average of 1.07 parts per million in a smaller survey the FDA conducted in 2007. Lead exposure can lead to kidney damage, reduced IQ and behavioral and attention problems, according to the National Institutes of Health, with pregnant women and young children most vulnerable.

The Anomaly

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Friday March 30, 2012 · 2:05 PM PDT

2012/03/30 · 14:05

Faced with high deductibles and ever mounting hospital costs, patients are being forced to behave like shoppers and negotiate the price of services:

Amy Freedman's 16-year-old daughter was having a major flare-up of Crohn's disease and needed a CAT scan, read by a radiologist with pediatric expertise, to see if emergency surgery was called for. She got it quickly at St. Christopher's Hospital for Children.
The bill came to $14,359. Aetna paid the in-network hospital its negotiated rates, which totaled $9,645. Freedman's coinsurance was $846.

"Because I was a doctor," said Freedman, who works for a drug company, "I knew immediately that number was outrageous."

Source: WSJ

The Anomaly

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Sunday March 25, 2012 · 1:41 PM PDT

2012/03/25 · 13:41

To escape an onerous derivatives deal with Morgan Stanley, Italy was forced to pay billions of dollars amounting to half of the country's sales tax increase.

When Morgan Stanley (MS) said in January it had cut its “net exposure” to Italy by $3.4 billion, it didn’t tell investors that the nation paid that entire amount to the bank to exit a bet on interest rates.
Italy, the second-most indebted nation in the European Union, paid the money to unwind derivative contracts from the 1990s that had backfired, said a person with direct knowledge of the Treasury’s payment. It was cheaper for Italy to cancel the transactions rather than to renew, said the person, who declined to be identified because the terms were private.

The cost, equal to half the amount to be raised by Italy’s sales tax increase this year, underscores the risk of derivatives countries use to reduce borrowing costs and guard against swings in interest rates and currencies can sour and generate losses for taxpayers. Italy, with record debt of $2.5 trillion, has lost more than $31 billion on its derivatives at current market values, according to data compiled by the Bloomberg Brief Risk newsletter from regulatory filings.

The Anomaly

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Thursday March 22, 2012 · 7:28 PM PDT

2012/03/22 · 19:28

Over the objection of domestic producers, a U.S. trade commission has removed anti-dumping duties that had been imposed on Brazilian imports:

The United States on Wednesday said it will eliminate an anti-dumping duty on some orange juice from Brazil, alarming U.S. citrus growers.
The U.S. International Trade Commission (USITC), by a 6-0 vote, found that revoking the measure would “not be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.”

A major Florida orange growers' group did not agree.

“Florida Citrus Mutual is extremely disappointed with this decision and we will review next steps including an appeal,” Michael Sparks, who leads the group, said in a statement.

Credit: Marcos Issa / Bloomberg

The Anomaly

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Wednesday March 21, 2012 · 8:05 PM PDT

2012/03/21 · 20:05

Foreign refrigerator manufacturers who used subsidies to sell appliances in the U.S. below market rates have been hit by the U.S. Commerce Dept. with anti-dumping duties:

The United States on Monday ordered final duties on bottom-mount refrigerators from South Korea and Mexico in a case brought by U.S. manufacturer Whirlpool against foreign rivals, including LG and Samsung.
Whirlpool accused the Mexican and South Korean producers of selling the refrigerators, which have the freezer section on the bottom, in the U.S. market at unfairly low price.

The century-old Michigan-based manufacturer, in a petition filed last year with the U.S. Commerce Department, also said its South Korean competitors received government subsidies.

LG invested $12m in a new 283,000 sq. ft. refrigerator factory in Monterrey, Mexico

The Anomaly

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Thursday March 15, 2012 · 7:03 PM PDT

2012/03/15 · 19:03

The stock market index more than doubled in three years, so why do Americans feel so poor? The working class has seen the median wage drop nearly 8%:

According to a newly released report from Sentier Research, median household income was $50,020 in January, 7.8 percent less than it was when the economic downturn began in December 2007 and 5.4 percent less than it was when the recovery began in June 2009.
Yet more people are finding work. January’s unemployment rate is at its lowest since early 2009, according to the Bureau of Labor Statistics.

What's going on? First, wages have stagnated over the last several decades -- a slow but steady drag on paychecks, heightened by wide layoffs of the recession. Second, the types of jobs created these days just aren't that high-paying. During the economic downturn, 40 percent of the jobs lost came from high-wage industries -- but high-wage industries accounted for only 14 percent of the new positions created in the first year of post-downturn job growth. This trend has continued.

The Anomaly

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Friday March 09, 2012 · 4:48 PM PST

2012/03/09 · 16:48

A chemically treated beef by-product that was recently removed from fast food restaurants is still being served in school cafeterias:

The "slime" consists of beef by-products: cow intestines, connective tissue and other parts that are not used in traditional beef cuts.

Those parts are more susceptible to E. coli and salmonella contamination, so the last ingredient to the "pink slime" is ammonium hydroxide, which kills that bacteria.

McDonald's, Taco Bell and Burger King all decided in January they would stop using the "pink slime" in their food after pressure...

The Anomaly

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Thursday March 08, 2012 · 9:12 PM PST

2012/03/08 · 21:12

While the cost of electronics may be dropping, consumer goods such as food and fuel which make up 40% of the average household budget have risen by 8%:

Forget the modest 3.1 percent rise in the Consumer Price Index, the government's widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.
The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don't look at the price of houses, furniture, appliances, cars, or computers. Instead, AIER focuses on Americans' typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television service, and other household products. […]

Over the past year, the EPI is up just over 8 percent, according to the economics group. The biggest factor: Motor fuel and transportation costs are up 21.06 percent from year-ago levels. The cost of food, prescription drugs, and tobacco also have increased faster than the government's inflation measure, rising 3.56 percent, 4.21 percent, and 3.4 percent, respectively.

MIT's Billion Prices Project shows inflation rate exceeds CPI

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China's Big Banks Probed over Bad Loans

JP Morgan Chase: $70 Trillion Hedge Fund

Say on Pay: Citigroup CEO's $15m Package Rejected

CIA Chief: Exploit 'Smart' Devices for Spying

FDA finds Lead in Leading Lipstick Brands

High Deductibles Force Patients to Question Hospital Pricing

Morgan Stanley Confiscates Half of Italy's Tax Increase with Derivatives Deal

Following Fungicide Scare, Duties Lifted for Imported OJ

Foreign Fridge Makers Slapped with Anti-dumping Duties

Median Wage Lowest Since 1999

Pink Slime: Chemically Treated Beef By-Product Found in School Lunches

Cost of Living: 'Everyday Price Index' Rises 8% YoY