After the Federal Reserve disclosed JPMorgan Chase's stress test results 2024, the bank said in a statement that the Fed's projections for a particular asset - the 'Other Comprehensive Income (“OCI”) - was overestimated.

"Based on the Firm’s own assessment, the benefit in OCI appears to be too large", the bank says. The meaning of this is that its losses under the exam should actually be higher than the regulator's findings.

According to the Fed's projection (new table opens as pdf), JPMorgan was assigned $13 billion in OCI, more than any of the 31 lenders in this year’s test. It also estimated that the bank would face roughly $107 billion in loan, investment and trading losses in that scenario.

Without specifying a number, the bank said that should its analysis be correct, "the resulting stress losses would be modestly higher than those disclosed by the Federal Reserve".

Some media reports say the new findings may delay JPMorgan' stock repurchase plans, although the banks did not publicly comment on that.

The move is not as unusual as it may seem. In 2023, Citigroup and Bank of America made similar moves and claimed their projected income would differ from the Fed's results. There have also been critics claiming that some aspects of the annual stress test exams were too opaque.

Archived version

• A residence priced $15 million was sold within hours
• Buyers snatch 200 large flats priced from nearly $5 million

Shanghai’s luxury real estate market is a bright spot in China’s bleak property sector. It’s the only one among the country’s mega cities that’s still attracting people to put down money in an asset class that has otherwise been abandoned.

[...] The move is driven by rich Chinese — many dwelling in the Yangtze River Delta region that Shanghai is part of — who are parking their money only in surefire investments [...] buyers are a mixture of locals and outsiders, many from the neighboring Zhejiang and Jiangsu provinces, according to sellers and developer advisers. Shanghai allows non-local homebuyers if they’ve paid income taxes for three years.

[...] Shanghai’s more affluent and entrepreneurial demographic is helping with the rebound, whereas the capital has more people working for state-owned enterprises and the government, meaning they already have access to government-subsidized housing.

[...] the trend is expected to cool down in the second half, after pent-up demand is released, according an analyst.

Local governments in China have asked several companies to pay tax bills dating back as far as the 1990s, underscoring their need for funding given the uneven economic recovery and persistent housing slump.

A number of listed firms have said in exchange filings in recent months that they’ve gotten government demands to pay tens of millions in back taxes and warned investors this could impact their earnings.

V V Food & Beverage Co. said last week that a liquor-making unit was told to pay some 85 million yuan ($11.7 million) on income it “failed to disclose” for about 15 years starting in 1994. ChinaLin Securities Co., Ningbo Bohui Petrochemical Technology Co., Zangge Mining Co. and PKU HealthCare Corp. have issued similar statements.

China’s local governments are facing unprecedented pressure to expand revenues because economic growth is slowing and the contracting real estate market has sent income from land sales plunging. Their already elevated debt stockpile is limiting their ability to leverage up further, forcing the central government to borrow more and give them the funds.

The tax recovery is “likely due to the fiscal distress of local governments,” said Xing Zhaopeng, an analyst at Australia & New Zealand Banking Group. “I think they need some money to pay by quarter end” because regional authorities usually pay contractors of government projects then, he added.

Local governments booked less than 5.8 trillion yuan in revenues under the general public budget and the government-fund account, which include taxes and land sales income, in the first four months of the year. That figure was less than the more than 5.9 trillion yuan in the same period last year, according to data from the Finance Ministry.

Their spending also fell to just under 10 trillion yuan from 10.4 trillion yuan a year earlier.

China’s economy is buried under a great wall of debt and Xi Jinping’s answer is to add more bricks. The president has sanctioned an extraordinary programme of borrowing by the central government to steer the $18 trillion behemoth to “high quality development”. In doing so, he is piling risk onto the country’s last decent balance sheet.

There is nothing new in the Chinese central government taking on more debt in a time of crisis. But the latest plan, outlined in March by the State Council, to sell special sovereign bonds with maturities of up to 50 years is a departure from a tested formula.

Such debts used to be indeed special, with only three new issuances by the People’s Republic before last month. All had a one-off policy goal or specific emergency to deal with, such as bailing out insolvent state-owned banks in 1998. This time, the government will sell 1 trillion yuan ($138 billion) in ultra-long-dated, special sovereign bonds. These issues will continue over “each of the next several years”, and the policy goals are broad.

Much of the proceeds will be used for investment to support “major national strategies”, per the State Council. Beijing would help finance the construction cost of schools and hospitals in grain-producing counties, for instance, to reinforce food security and thereby China’s self-sufficiency. Additionally, new industries such as semiconductors, electric vehicles and artificial intelligence will be prioritised as China races to establish a growth model led by domestic consumption, a green economy and innovation, rather than one that depends on infrastructure, land and labour.

Taking on more borrowing at the central government also will consolidate Xi’s grip on economic planning and resource allocation, potentially helping China to reduce wasteful investments. Crucially, expanding the central government’s balance sheet will ease the future burden on cash-strapped local governments that are responsible for most spending.

Heavy lifting

Xi’s borrowing plan addresses a problem created by a tax-sharing system introduced in the 1990s which allows Beijing to take a lion’s share of the national tax revenues. By 2022, per Ministry of Finance data, local governments were responsible for nearly 90% of total government expenditure but they needed to make do with about 50% of total government revenue.

The squeeze gave rise to local government financing vehicles, known as LGFVs, and prompted municipalities to lean on property market income including land sales to balance their books. Property incomes accounted for more than 40% of local government income in 2020. It dwindled quickly thereafter due to Xi’s “three red lines”, a deleveraging campaign that ultimately led a Hong Kong court to order the liquidation of Evergrande, the world’s most indebted real estate developer.

Borrowing binge

The additional borrowing is riskier this time. In 1998 China was on the verge of joining the World Trade Organization. Powered by robust exports and a youthful workforce, its trajectory was firmly on the up. Geopolitical tension, however, has taken steam out of the world’s second largest economy. Its sheer size and its existing indebtedness are an issue too.

The central government’s balance sheet remains tidy for now. Its outstanding borrowings amounted to 24% of GDP at the end of 2023, the International Monetary Fund estimates, among the lowest of major economies. If all else remains equal and China issues special sovereign bonds to the tune of 1 trillion yuan each year for the next decade, its borrowings would rise nearly 8 percentage points to almost 32% of last year’s GDP, Breakingviews calculates.

The problems stack up elsewhere, however. Explicit local government debt amounted to another 31% of GDP by the end of 2023, per the IMF, LGFVs account for a further 48%, and other government funds another 13%, bringing the augmented debt up to 116 trillion yuan, about $16 trillion, or 116% of GDP – a 35% increase on 2018, the IMF calculates.

Corporate debt adds another 123% of GDP, much of it issued by state banks and owed by state-owned enterprises, plus there’s household debt at 61% of GDP, per Fidelity which calculates gross debt at over 300% of GDP.

Borrowing more doesn’t sound like “a basket of comprehensive measures” to resolve risks stemming from local government debts, as the ruling Communist Party’s Politburo called for last year. The potential costs of bailing out those authorities and making the shift to the new growth model is why Moody’s and Fitch, two of the three major rating agencies, have put China’s sovereign rating on negative outlook since December.

More than two decades ago Zhu Rongji reacted indignantly to Hong Kong newspapers’ assessment that he was China’s “deficit premier” when his government started selling long-term construction bonds at smaller amounts. He insisted his cabinet was investing in quality assets, for future generations of the People’s Republic. This gamble paid off and the projects, including a power grid and an extensive mobile telecommunication network, laid the foundation for decades of growth.

By the time the new wave of sovereign debt matures, the People’s Republic would be celebrating its 100th anniversary and, if all goes well according to Xi’s plan, it will be a “strong and modern socialist country”. Long before then, however, it will be clear whether China can defy a debt crisis, as it has done so for decades, and simultaneously revive growth. There will be even less room to borrow its way out of problems next time.

Archived link

For over half a year, Russian companies have been facing difficulties in processing payments with China. Fearing secondary sanctions, banks are refusing to transfer funds, leaving importers unable to bring goods into the country. Vladimir Putin raised this issue during his visit to Beijing in May, but the situation doesn’t seem to have improved.

On December 22, 2023, U.S. President Joe Biden signed an executive order allowing sanctions to be imposed on banks from third countries if they are caught aiding the Russian military-industrial complex. Once blacklisted, these companies would be banned from holding correspondent accounts in American banks, meaning they’d be unable to conduct any dollar transactions. Following this order, dozens of Chinese financial organizations refused to accept transfers from Russia — not only in U.S. dollars but also in Chinese yuan.

On June 12 of this year, Washington tightened its demands. Previously, transactions involving five sectors of the Russian economy — technology, defense, construction, aerospace, and manufacturing — were under scrutiny. Now, the U.S. Treasury has expanded the definition of the military-industrial complex to include all companies previously sanctioned under Executive Order No. 14024. This means that the number of Russian entities that foreign banks must avoid to maintain access to dollar transactions has significantly increased. According to Castellum.AI, there are more than 4,000 such organizations.

Biden’s executive order — neither in its new nor old versions — has yet to be enforced against banks from third countries. So far, representatives of the U.S. administration have only issued verbal warnings: Secretary of State Antony Blinken expressed “serious concern” about the supply of machines and microelectronics to Russia, and Treasury Secretary Janet Yellen publicly mentioned the sanctions risk during her visit to China in early April.

This was enough to trigger significant shifts in trade between Russia and China. By the end of 2023, trade turnover had increased by 26 percent to a record $240 billion. However, in April 2024, China’s customs authority reported a 15 percent reduction in deliveries of cars, equipment, and other machinery. Bloomberg noted that exports to Russia fell for the first time in two years, linking this to sanctions risks. Chinese exports to Russia also fell in May, and Russian customs confirmed the continued decline of imports from Asia. Russia’s Central Bank acknowledged that it had become generally more difficult for Russian banks to open correspondent accounts abroad, even in “friendly” currencies, and directly linked this to “sanctions the United States adopted in December 2023.”

The issue was also discussed at the St. Petersburg International Economic Forum. Industry players reported that money transfers from Russia to China could take as long as three months, and even then might end up being returned to the sender. Businesses complained that they couldn’t even pay for theater decorations or children’s displays. Pavel Brun, the head of MasterProf, said his company hasn’t been able to arrange the supply of plumbing fixtures. “It’s like walking through a minefield,” he told Business FM.

Finding a workaround

Some hopes were pinned on Vladimir Putin’s mid-May visit to China. However, although Putin mentioned that the payment issue was discussed, he didn’t provide any specifics, and business owners confirmed that the difficulties in making payments persisted even after the delegation returned to Moscow.

A source in the trade industry told Reuters that the typical way Russian businessmen solve this problem is by going “from bank to bank, opening current accounts.” “If their payment doesn’t go through, they go to the next one,” the source explained. In response, Chinese financial institutions have started imposing additional requirements, such as asking for an office lease agreement in the province where the bank is located. “While this would have seemed like a harsh requirement before, we have no choice now,” business owners commented to Kommersant FM.

One of the most promising options was to open an account at the Chinese branch of the Russian bank VTB. The demand for this was so high that businesses were often left waiting as long as a year to open an account. VTB Bank CEO Andrey Kostin promised to more than double the staff to speed up this service. However, in its broadened interpretation of Russia’s military-industrial complex, the U.S. Treasury directly named VTB as one of the banned entities for transactions. This will likely complicate the bank’s operations.

As an alternative, businesses have started using banks in third countries as intermediaries, sending money through companies in Hong Kong, Kazakhstan, Kyrgyzstan, the U.A.E., and other “friendly” jurisdictions, rather than directly from Russia, according to Reuters sources. This scheme can prove costly: intermediaries may charge a commission of several thousand dollars per transaction, they don’t guarantee success, and the sender will have trouble getting the money back if the payment fails. Goods may also be confiscated in the intermediary countries. Nevertheless, half of the payments are currently processed this way.

Some companies have started using cryptocurrency to make payments to China, specifically the stablecoin Tether, which is pegged to the U.S. dollar, reports Bloomberg. Instead of waiting months, payments are processed in 5-15 seconds, and without the hefty commissions intermediaries charge. However, there are risks for Chinese partners: since 2021, the local regulator has deemed all cryptocurrency transactions illegal. To circumvent these issues, an even more unorthodox solution has been devised: Russian steel companies are now bartering metal for any goods that Chinese businesses are willing to offer. This way, no cross-border financial transactions are needed at all. Both Russian customs and the Industry and Trade Ministry have noted the growing popularity of this bartering system.

If businesses still need to make monetary payments, they often turn to small rural banks in northeastern China. According to Reuters, these banks, located along the Russian border, are willing to accept transfers and have less stringent compliance requirements. However, due to high demand, even these banks have waiting lists to open an account that stretch for several months.

The System for Transfer of Financial Messages (SPFS) — Russia’s SWIFT analogue for domestic and international transactions — could potentially help. However, VTB has complained that too few foreign companies are currently connected to it. Additionally, the system was developed by the Central Bank, which deters non-residents from using it due to sanctions risks. And with good reason: Bloomberg pointed out that the E.U. and the G7 could jointly impose sanctions for connecting to the system.

Ripple effects

Paradoxically, the current payment issues are having a positive impact on the Russian economy. The inability to transfer money has hit imports, thereby reducing the demand for foreign currency. This supports the ruble exchange rate, as noted in the Central Bank in official reports. The bank doesn’t believe this factor will have a significant impact on GDP.

However, as Sofia Donets, the chief economist at Tinkoff Investments, told RBC, these problems will ultimately lead to additional costs for sellers. The Moscow-based investment company Tsifra Broker concurs that prices for many goods could rise if timely shipments can’t be ensured. Categories making up the largest share of Chinese exports to Russia are at risk: equipment, land transport vehicles, electrical machinery, and electrical equipment.

Currently, importers are complaining that fraudsters are trying to exploit the situation: they write to Russian entrepreneurs posing as Chinese partners and notify them of a change in banking details. There’s been at least one known case where a business ended up sending money to an account, only to find that they couldn’t reach the sender afterward and were left without the paid-for goods.

Some market participants believe that resolving the payment crisis will depend on how much banks can earn from conducting such operations. For instance, Anatoly Semenov, director of the Parallel Import Association, points out that so long as the markets of countries unfriendly to Russia are of interest to Chinese businesses, they won’t openly violate the sanctions regime and risk their investments. Banks in Turkey and the U.A.E. are also refusing transactions with Russia. Against this backdrop, The Bell estimates that imports from some countries have dropped by a third this year.

Archived link

Wealth and corporate taxes remain a sticking point between countries at the United Nations negotiating the roadmap for a framework convention on tax, which could herald a radical shake-up of the global tax system.

The first round of talks to establish parameters that will guide the creation of the convention — initially opposed by wealthy countries including the United Kingdom, the United States, and some members of the European Union — concluded on May 8.

Some progress was made amid ongoing tensions between higher-income members of the Organisation for Economic Co-operation and Development, or OECD, and African U.N. member states, now backed by a coalition of developing countries known as the G77.

“Both the developed and developing countries agreed easily on environmental taxes but strongly disagreed on taxes for wealth,” said Abdul Chowdhary, a senior program officer for South Centre Tax Initiative, a Geneva-based think tank representing developing countries from Africa, Asia, Latin America and elsewhere.

“The developed world took the view that the reforms to tax the world’s wealth are being addressed already by the OECD and the developing world believes that the OECD has been inadequately addressing the matter and that the U.N., too, should be able to do so,” said Chowdhary.

In November 2023, the U.N. General Assembly voted overwhelmingly to adopt a resolution tabled by Nigeria calling for an inclusive U.N. forum to tackle international tax dodging, corporate tax reform, wealth taxes, environmental taxes, and more.

Such a move would shift power away from the OECD, which has shaped the global tax agenda for decades but has been described by some observers as a “rich countries’ club” that sets international tax policy behind closed doors.

> "It has been quite absurd and sad to see their hesitation, because the failure of the global tax system is a problem that has major impacts on people in all regions of the world, and we are in urgent need of solutions." — Tove Maria Ryding, tax coordinator at the European Network on Debt and Development

The OECD has defended its “proven track record enabling significant changes in the international tax landscape” and argued the U.N. should not undermine ongoing efforts to curb cross-border corporate tax avoidance. Most notably, the OECD brokered the landmark 2021 tax agreement that included a commitment by nearly 140 countries to set a minimum 15% tax rate for multinational corporations.

During the recent negotiations at U.N. headquarters in New York, led by an intergovernmental committee tasked with drafting “terms of reference” to shape the U.N. tax convention next year, two main blocs clashed over procedural issues, alongside substantive ones.

Many countries that voted against a legally binding framework convention — a sort of “global constitution” under which rules, known as protocols, are set — argued for looser terms of reference that experts noted may ultimately weaken the convention.

Disagreements also emerged over the committee’s decision-making mechanism: the developing countries’ bloc favored voting by a simple majority if no consensus emerges, whereas the wealthy countries’ bloc argued for consensus-only decision-making, which could allow a minority of states to wield veto power.

“The second and biggest flashpoint is on the issue of voting,” Chowdhary said.

“The developed countries are insisting on decision-making via consensus but the developing world says that consensus will only lead to watered-down resolutions and leave the convention as inconsequential as the OECD.”

The second session of negotiations is scheduled to run from July 29 to Aug. 16. Then, the committee’s goal will be to finalize the draft terms of reference in August to be voted on by the U.N. General Assembly before the end of the year.

Irene Ovonji Odida, a Ugandan lawyer and member of the Independent Commission for Reform of International Corporate Tax and South Center Tax Initiative, has offered technical support to the African member states working on the convention. She said that although wealthy countries have attempted to exert pressure on developing countries to abandon their most far-reaching and radical goals, momentum is with the Global South.

“Currently, on substantive issues, the majority — over 60 countries — want corporate taxation included in the [terms of reference] as a substantive issue to ensure equitable taxation of [multinational corporations],” Odida said, adding that some “Western countries see this as a duplication of the OECD” process toward a global minimum tax rate.

The extent to which countries wanted the terms of reference to include high-level commitments to address corporate taxation, clamp down on profit-shifting, and tax ultrawealthy individuals’ incomes and assets varied within the two blocs. Brazil again floated its proposal for a global minimum tax rate for billionaires, which the U.S., the U.K. and South Korea dismissed as a domestic policy issue, according to the Tax Justice Network advocacy group.

All countries broadly agreed on the need to leverage taxation to address climate and environmental crises, though with different emphases on the preferred mechanisms.

Similarly, several countries referred to the issue of “domestic resource mobilization,” but some used it to emphasize the importance of capacity building while others took a broader view, calling instead for the committee to consider the fair allocation of taxing rights and wider sustainable development goals, TJN reported.

Russian inflation accelerated in May to the highest in more than a year, adding to pressure on the central bank to hike the key rate to curb price growth.

Annual inflation reached 8.3% last month, from 7.84% in April, the highest since February last year, Federal Statistics Service data showed late Friday. Price growth jumped to 0.74% in monthly terms from 0.5% in April.

Bank of Russia Governor Elvira Nabiullina last week warned of the possibility of a “significant” rate hike in July if inflationary pressures don’t start to ease. That came after the central bank held the rate at 16% for the fourth meeting in a row, as Russia’s war in Ukraine continues to overheat the economy and stoke inflation.

With government spending on the rise, Nabiullina has been turning more hawkish as economic growth, local demand and price increases have consistently outpaced the central bank’s expectations. The bank said June 7 that it anticipates inflation will return to its 4% goal in 2025.

Archived version

Along the western edge of Canada’s Saskatchewan province, by a bend in a lake ringed by endless stands of black spruce, a small outpost has been carved out of the forest to mark what just might be the hottest new mining project on Earth today.

It is a desolate, unforgiving spot.

Even in April, the snow is still caked hard to the ice that coats the lake. Bone-chilling winds howl day and night. And there are no towns or villages or, for that matter, signs of life at all — beyond the occasional black bear or wolf — within a 50-mile radius.

What Saskatchewan has, though, is uranium. Lots of uranium. The bedrock is so loaded with it that the area around just one stretch of the lake, it is believed, could generate enough nuclear energy to power more than 40 million homes for a quarter century.

In one corner of the camp, deposit samples — small, black, radioactive bars — are all neatly laid out, row after row, in racks. Adam Engdahl throws on protective gloves, picks up one of the samples and beams. “This is my favorite.” Engdahl, a geologist with a startup mining outfit called NexGen Energy Ltd., proudly passes it around. It’s surprisingly heavy, like a dumbbell — a tell-tale sign, Engdahl says, of a bar that’s densely packed with uranium minerals.

> Saskatchewan at the Center of Canada's Uranium-Mining Boom: World Nuclear Association sees Canada potentially overtaking Kazakhstan as largest uranium producer.

For the longest time, no one much cared about any of this. Not after the 2011 Fukushima disaster. Nuclear energy was once again too scary, and uranium, the delicate and deadly fuel that powers the reactors, became a sleepy backwater in the global commodities market. But as climate change intensified and governments across the world were drawn anew to the steady carbon-free power generated by nuclear plants, interest in uranium deposits like this one picked up — slowly at first and then, after Vladimir Putin invaded Ukraine, at a frantic pace. Suddenly, much of the world needed an alternative to Russian energy.

Today, there are 61 nuclear power plants under construction globally. Another 90 or so are in the planning stage and more than 300 have been proposed. There’s even a push to re-open old plants that had been shuttered years ago.

The surge in the price of uranium is a testament to the magnitude, and speed, of this pivot back to nuclear. Over the past five years, the metal has climbed 233% — more than triple the gains in gold and copper even after declining a bit in 2024.

The mania has spilled over into the stock market, where traders are wildly bidding up shares of uranium companies. Many of the miners in Canada have soared more than 400% over the past four years, and NexGen now has a market value of almost $4 billion even though it hasn’t sold a single pound of the metal and doesn’t expect to do so until at least 2028. Some of the biggest names in finance have piled into the sector: Li Ka-shing, Steven Cohen, Stan Druckenmiller, among others.

> China, India Lead Nuclear-Power Expansion: As new reactors come online, the world faces a growing need for additional uranium ore.

The boom, of course, could go bust. Plenty have in the past. Some 130 miles to the north of the NexGen camp, Uranium City offers a stark reminder of this. Once a bustling mining community, it’s little more than a ghost town today. (Population at last census: 91, according to Statistics Canada.) All it would take is another fatal accident to seriously test the new-found enthusiasm for nuclear power. And even if the world is spared another meltdown, the thorny issue of how — and where — to dispose of the radioactive waste remains a key vulnerability to any initiative to build a bunch of reactors.

Even in Canada, which could soon be the world’s No. 1 uranium producer, pockets of hostility toward nuclear energy remain. British Columbia, a province that, like Saskatchewan, is loaded with natural resources, still has a ban in place on mining the metal and building nuclear plants. For the most part, though, Canada’s leaders have embraced the moment. Prime Minister Justin Trudeau recently made uranium mining a key element of the country’s net-zero emissions plan, an ironic twist for a leader who took office a decade ago pledging to shift the economy away from commodity extraction and all its harsh ups and downs.

Right now, a uranium bust feels like a distant worry.

In February, at a can’t-miss annual gathering of mining industry types just outside Miami, the uranium guys stole the show. Investors and bankers showed only passing interest when the gold and lithium miners got up to speak, leaving rows of empty chairs in the Diplomat Beach Resort, but they packed in tight whenever a uranium executive took the podium.

For Travis McPherson, NexGen’s chief commercial officer, the whole thing was a bit overwhelming. So many investors were clamoring for one-on-one face time with him that he just bounced from meeting to meeting for two days straight. By the end, he had held 60 sessions, a number that conference organizers told him could have set a record. “We were joking with them,” McPherson said, “four years ago, when we went, we probably held the record for the least number of meetings.”

> Uranium Supply Deficit Projected to Widen: Demand from nuclear reactors seen outpacing supply through 2040

A big part of the allure of the uranium business is the sense that supply and demand are out of whack. Demand for the metal from China, India, Japan, the US and Europe is rising at a significantly faster pace than miners can pull it out of the ground. By one estimate — from Treva Klingbiel, president of TradeTech, a data provider for the industry — demand could outstrip supply by more than 100 million pounds per year through the 2030s.

“There is no substitution when you own a nuclear reactor,” says Mike Alkin, chief investment officer at Sachem Cove Partners, a firm outside New York City that invests exclusively in uranium and uranium-mining stocks.

The isolation of Russia is only adding to the supply shortfall. Not only are European countries scrambling for alternative fuels to replace the Russian natural gas that powered many of their electricity plants, but they — and much of the rest of the world — had relied on Russia for raw and enriched uranium, too. As the Ukraine invasion drags into its third year, several countries are taking steps to procure the metal from elsewhere. The US is outright banning Russian uranium.

The supply-demand gap is “like a freight train coming down the tracks,” Alkin says.

There are uranium deposits scattered across the Earth — from Kazakhstan, currently the world’s biggest producer, to South Africa. But few are as rich as those in Saskatchewan’s Athabasca Basin.

This is where NexGen’s camp, along the edge of Patterson Lake, is located. Rival outfits are rushing in all around it. A few miles to the west, Fission Uranium Corp. is close to breaking ground on a project of its own. Just to the east, F3 Uranium Corp. is exploring. Go a little farther east and Denison Mines Corp., Orano Canada and Cameco Corp. — which operates the world’s most prolific uranium mine today — are starting new projects, boosting capacity at existing ones and re-opening shuttered mines.

> Kazakhstan, Canada Supply More Than Half of the World’s Uranium: Kazakhstan produced 40% of the world’s mined supply of uranium, followed by Canada at 21%.

The ground is so chock full of minerals here that at some mines, including NexGen’s, the uranium will have to be diluted before it’s sold. This purity is the result of formations that began to take shape more than a billion years ago. As erosion drove a gap between underground rock beds from different periods, dense clusters of the metal were created.

Leigh Curyer, the founder and CEO of NexGen, calls his mine site — and the Athabasca Basin, more broadly — “a freak of a location.” Orest Wowkodaw, a mining analyst at Scotiabank in Toronto, prefers the term “unicorn.” By his estimate, the NexGen mine will account for 13% of the entire global supply.

Curyer, 52, is an Australian native and accountant by trade. It was back in 2010, when he was working at a private equity firm in London, that he became intrigued by the Athabasca Basin. He had been tasked at the time with assessing uranium projects across the globe, and a geologist he met along the way convinced him that the western half of the basin had huge potential. Lots of high-grade deposits, the geologist suspected, had been left untouched.

This was a decidedly contrarian view. Most experts believed the vast bulk of the metal had been scooped up during one of the earlier uranium rushes. Curyer was undeterred. And so after the Fukushima disaster triggered a collapse in uranium prices, he cobbled together a group of investors to buy up a chunk of the land and mineral rights around Patterson Lake on the cheap — they paid the equivalent of just $3 million — and started drilling in 2013.

The prospectors in Saskatchewan thought he was nuts. “They were laughing at us, saying ‘What are you going over there for?” Curyer said. At best, they told him, the site was “small and spotty.”

Ten months into the project, it appeared the naysayers might be right. NexGen had put 20 drills into the ground and had little to show for it. Curyer was getting anxious. Uranium exploration is a tricky thing. Drill holes can be painfully close to metal concentrations — as little as five meters away — and still fail to detect them. Most explorers run out of money before they find the big one.

The NexGen team kept burning through cash until finally, on a frigid winter day in early 2014, attempt No. 21 delivered the moment Curyer had been waiting for: The sample was packed with high concentrations of uranium. The 30th hit the motherlode.

Today, Patterson Lake is a hive of activity. It has some 25 heated tents, a fitness center, cafeteria, portable offices and geology labs. Workers pore over uranium samples and map out mine construction plans. In quieter moments, they cut holes in the ice and fish for trout and pickerel.

Curyer still finds it hard to believe he’s in charge of what will be, if all goes according to plan, the world’s top-producing uranium mine. He remembers how investors would tease him, even after those drill holes confirmed how much uranium was under the lake. “People used to say to me, ‘How’s it feel having the world’s best discovery in the world’s worst market?”’

Curyer’s hopeful he’ll get the final permit he needs to build the mine by the end of this year. If not, then early 2025. Shovels will go in the ground, he says, the following week.

Data for May due this week is forecast to show a resumption of loan growth after a shock contraction in April, the first for almost two decades. But nobody expects a return to the days when Beijing would engineer borrowing booms to speed up the world’s second-biggest economy.

Especially since the 2008 crash, China has pumped out credit to build homes and infrastructure, which kept the economy humming. Now it’s stuck in a housing slump and already has plenty of roads and high-speed rail. Policymakers are seeking new ways to sustain growth — like high-tech manufacturing — that won’t rely so much on expanding debt.

China's Loan, Credit Growth Keeps Slowing Amid Weak Demand

The People’s Bank of China has repeatedly signaled it has no intention of revving up the lending engine again. Even if it wanted to, there’s little demand for credit. Government bond sales picked up last month, but the real estate crisis has left Chinese households and businesses reluctant to finance spending or investment by taking on new debts.

“Household savings that used to go into property are now going into the financial system, but there aren’t enough borrowers on the other side,” said Adam Wolfe, an emerging-market economist at Absolute Strategy Research. The PBOC is “trying to create a new normal for credit growth,” he said.

If that effort succeeds, Chinese debt may lose its status as a strong leading indicator for the country’s business cycle — and hence for global commodity markets.

To see how that’s worked over the past 15 years or so, one useful guide is the credit impulse, which measures the ratio of new debt to gross domestic product. It shows four distinct spurts of stimulus since 2009.

China's Credit Cycle Fails to Pick Up Again

As recently as early 2021, China was building its way out of the pandemic in a credit-fueled construction boom that sucked in raw materials from across the planet and helped drive a broad commodity rally.

Around that time, Federal Reserve researchers concluded that China’s credit policies explained more than one-fifth of all commodity-price movements since the global financial crisis. In a separate study, they estimated that when China’s credit impulse rose by 1% of GDP, it delivered a matching boost to global trade – and a 2.2% increase in commodity prices – as well as lifting the Chinese economy.

But since 2022 the credit impulse has essentially flatlined.

“The credit growth data is still a reference to gauge Chinese industrial activities, but it’s a less-strong indicator now,” said Li Xuezhi, head of Chaos Ternary Research Institute, a commodity analysis firm. The economy used to be led by property and infrastructure investments, but the “new quality productive forces” that Beijing is now backing involve other forms of financing like venture capital, Li said.

The lending slowdown is spurring debate over various alarming scenarios for China’s economy. One is a “liquidity trap,” where lower borrowing costs are unable to stimulate growth. Another is a “balance sheet recession,” where households and companies are focused on clearing debts rather than spending.

As China seeks a growth model based on improving productivity instead of expanding debt, the PBOC’s priority is to make sure existing funds are used more efficiently, according to Wolfe. To the extent it succeeds, “the relationship between aggregate credit and the industrial cycle should break down,” and there are signs that it already is, he said.

Authorities took steps in recent years to rein in over-indebted real estate developers and clean up so-called hidden debt owed by local governments, which doesn’t appear on their balance sheets. Property and local government financing vehicles accounted for about 70% of new credit generated over the past decade, according to an estimate by Zhang Bin, a researcher with the Chinese Academy of Social Sciences.

The PBOC is also trying to make sure credit is reaching the real economy, instead of idling within the financial system. Authorities have cracked down on loopholes that allowed companies to make fake loans, arbitraging between higher deposit rates and cheaper borrowing.

An era when loan growth was seen as a key benchmark, by investors and policymakers alike, has left banks with incentives to plump up their numbers.

A case in point is the short-term interbank loans known as bankers’ acceptances. Their cost fell to the lowest level this year in May, according to data from Zhongtai Securities Co. That’s usually a sign that lenders are swapping bills with each other to boost loans

because they’re struggling to find companies that want to borrow.

Even if such techniques help to boost the loan figures coming this week, investors won’t be impressed and will look deeper, said Mary Xia, research director at Beijing Jifeng Asset Management Co.

“The market understands that the weak credit growth is due to problems on the demand side,” she said.

Group of Seven leaders are set to reach a political agreement to provide Ukraine with $50 billion of aid using the profits generated by frozen Russian sovereign assets, according to an Elysee official.

However, the technical details of a deal will need to be finalized after a G-7 leaders’ summit taking place in Italy this week — meaning that it could be a while for a final agreement to be concluded, said the French official, who spoke on condition of anonymity.

The French view followed comments by the US on Tuesday that leaders had all but reached a political deal. People familiar with the negotiations in both countries said the aim would be to disburse the funds by the end of the year.

G-7 participants cautioned that beyond any agreement — which is expected to be one of the main deliverables of the summit — some remaining issues on how it will work are complicated.

Officials on both sides of the Atlantic have for months been discussing how to use the profits generated by the about $280 billion in frozen Russian central bank funds, most of which lies immobilized in Europe.

The proceeds from the frozen assets are estimated to be worth between €3 billion to €5 billion annually. The EU has already agreed to provide Ukraine the profits twice a year, but the US has been urging G-7 allies to find ways to frontload the support in order to provide Kyiv with more immediate support.

Complex issues that will need to be ironed out include figuring out how to structure any loans to Ukraine, how risks are shared among allies and ensuring that the assets remain frozen for years.

US National Security Advisor Jake Sullivan told reporters during a gaggle aboard Air Force One on Wednesday that discussions were continuing and making good progress.

“What we are working toward is a framework that is not generic — that is quite specific, in terms of what it would entail,” he said. “But of course, the core operational details of anything that is agreed in Italy will then have to be worked through and the leaders would give direction to the experts to work that through on a defined time frame,” Sullivan added.

Archived link

Eat your heart out Elon Musk and X.com, China’s Alipay is the real ‘everything app.’

If there’s one thing most of us probably didn’t think to wish for when it comes to ewallet features, it’s an artificial intelligence (AI) “mini app” for detecting baldness. Yet here we are, in a time when Alipay, China’s biggest payments application, has debuted exactly that.

Like most ewallet/payments applications, Alipay allows users to connect their bank accounts to the app in order to streamline payments both online and at the point of purchase. But Alipay takes things much further than just payments.

Purported to be a “superapp” for locals, Alipay’s many features include ride sharing, mobile phone services, bill payments, coupon and travel services, shopping, and social media functionality.

The app’s newest feature is quite a departure from its other utility-based features: an AI-powered hair loss detector.

According to a report from the South China Morning Post, users can upload pictures of their scalps for processing by an image recognition system trained on thousands of medically-relevant images. The app then gives users suggestions up to and including recommending medical care when applicable.

Alipay — which is built by Antgroup, Alibaba’s fintech subsidiary — unveiled its AI-powered “Medical Assistant” feature back in April of 2024. The new hair loss detector has been added in as part of this suite.

The big idea behind combining a digital wallet application, lifestyle services app, and a medical tool is purportedly for convenience and streamlining. However, while such apps are popular in the east they’ve yet to find similar purchase in Europe and North America.

One proponent for the multimodal, “superapp” concept is Elon Musk. He’s gone on the record numerous times stating that he’d like X.com to become an all-in-one app comparable to offerings from the Chinese market.

But privacy watchdogs across the globe have steadily rung out the warning that such apps consolidate user information in such a way that user privacy and security are subject to the whims of the application’s owner and whatever entities have access to the data.

In the case of Alipay, for example, the Chinese government has made it clear that user data must be available to the government. While there’s no official word on exactly how data is being used, it would ostensibly be a technologically trivial matter to build and operate a database of user activity — essentially creating a real-time citizen activity tracker.

In the early 1600s, the officials running Durham Cathedral, in England, had serious financial problems. Soaring prices had raised expenses. Most cathedral income came from renting land to tenant farmers, who had long leases so officials could not easily raise the rent. Instead, church leaders started charging periodic fees, but these often made tenants furious. And the 1600s, a time of religious schism, was not the moment to alienate church members.

But in 1626, Durham officials found a formula for fees that tenants would accept. If tenant farmers paid a fee equal to one year's net value of the land, it earned them a seven-year lease. A fee equal to 7.75 years of net value earned a 21-year lease.

This was a form of discounting, the now-common technique for evaluating the present and future value of money by assuming a certain rate of return on that money. The Durham officials likely got their numbers from new books of discounting tables. Volumes like this had never existed before, but suddenly local church officials were applying the technique up and down England.

When Ou Yangyun travelled to the Chinese city of Zhengzhou in February to demand recompense after his bank account containing tens of thousands of dollars was frozen, his family expected him to be home two days later to celebrate the Lunar New Year with his five-year-old twins.

The small-business owner from Changsha never returned.

Ou, 39, and more than a dozen other victims of one of China's biggest banking scandals had gathered outside a train station in Henan's provincial capital. "Henan banks, return our savings!" they shouted, footage of the protest obtained by Reuters shows.

Dressed in winter coats, the group wandered the streets for about 30 minutes, until one of several unidentified men who had been tailing them shouted "Close the net!" and the protesters were pushed onto a bus and delivered to a police station, according to two people with direct knowledge of the matter.

Most were released after several days in detention, during which they were served mouldy food and had limited sleep, but Ou and two other defrauded depositors are still being held by Zhengzhou police, the two people said.

This account, based on a Reuters review of protest footage, previously unreported arrest notices and interviews with five people with direct knowledge of the matter, examines one of the economic protests that have proliferated in China since 2022, a period in which hundreds of thousands of Chinese have lost homes in a property bust and fallen victim to investment scams.

The people spoke on the condition of anonymity for fear of official retribution.

The Zhengzhou Municipal Public Security Bureau, Henan province's Department of Public Security, and China's Ministry of Public Security did not respond to requests for comment about the detainees and their treatment.

The depositors' plight began about two years ago, when some 600,000 people lost their savings in a $4.2 billion fraud that involved four banks in Henan, sparking worries among some analysts about the stability of rural lenders.

The scandal and resulting protests were not directly caused by China's slowing economy. But the unusually harsh treatment of Ou and the two others may reflect official sensitivities about rising dissent linked to financial distress, two experts told Reuters.

It is common for people to be detained at economic protests, but they are typically released within days, in contrast to those involved in political protests who are often held for months, said two analysts.

"Four months of detention for something as small as participating in a peaceful protest speaks volumes about the government's inability to handle this slowly growing crisis," said Peter Dahlin, of China-focused human rights monitor Safeguard Defenders.

China Dissent Monitor, a project of Washington-based rights group Freedom House, reported a 127% jump in economic protests to 805 in the fourth quarter of 2023 from a year earlier. These include demonstrations by labourers over unpaid wages; property buyers whose apartments were not built; and investors and retirees fleeced of their money.

With such dissent brewing, "the central government is going to be eager to halt the protests in their tracks to prevent widespread unrest as the economy falters," said Andrew Collier, managing director at Hong Kong-based Orient Capital Research, an independent China-focused research firm.

The four Henan rural banks did not respond to requests for comment. Immediately after the fraud emerged, the lenders posted notices online instructing "customers who are unable to conduct normal business" to register their details.

China's banking regulator, the National Financial Regulatory Administration, did not address Reuters questions about the fraud and subsequent investigations.

Reuters was unable to find previous statements by Chinese authorities about the rise in economic protests, but in some instances officials have contained dissent by promising to address its underlying causes, without directly acknowledging public ire.

Mouldy buns, limited sleep

After the Zhengzhou protesters were detained, it took 26 hours for police to provide them with food, such as steamed buns, which were mouldy, said two of the people. Some detainees were woken and interrogated between 1 a.m. and 5 a.m., the people said, adding that one was cuffed by their hands and legs.

Regulations covering the pre-arrest treatment of detainees issued by China's State Council specify that they must be provided with food and drink and should not be subject to abuse, among other stipulations. Provinces also set guidelines; Henan requires detainees' food to be safe and hygienic.

While most of the protesters were freed within days, Ou and two others, Shi Jianjian and Hu Weiming, were not heard from for weeks.

Ou's relatives tried to ascertain his fate, but calls and letters to the Zhengzhou police yielded little. The family "thought Ou was dead", one person told Reuters. Although Ou was detained on Feb. 9, his police arrest notice is dated March 19. Reuters could not determine the reason for the discrepancy.

Ou and Shi are accused of picking quarrels and provoking trouble, according to their arrest notices, a charge commonly used against protesters in China. Reuters could not determine whether Hu has been charged.

The family of Shi, 50, said they are concerned about his health. He has diabetes and suffered from depression after losing his money, according to a doctor's note dated January 2023.

Hu, also a small-business owner, lost all of her family savings in the scandal, one of the people said, adding that Hu's father had died from illness while she was in detention.

'Blood and sweat'

The financial scandal involved what Chinese authorities described as a complex fraud perpetrated across a handful of rural banks when Xincaifu Group, a private firm with stakes in the lenders, colluded with bank staff to siphon off depositors' funds.

Xincaifu was deregistered in 2022, according to company records, and made no public statements about the scandal at the time.

After mass outcry by the depositors, local governments compensated many customers who had lost small deposits.

Still, more than 1,000 people are yet to be repaid, according to two of the five sources and another person familiar with the matter.

Many of the depositors, including the Zhengzhou three, are from outside of Henan province and had placed large amounts with the lenders, attracted by favorable interest rates.

After the scandal drew public attention, China's banking regulator said two of its officials were under investigation for unspecified suspected legal violations, without acknowledging any link to the rural banks.

In addition, the Central Commission for Discipline Inspection in Henan said in July 2022 that a central bank official in Zhengzhou was under investigation for suspected serious disciplinary violation. Reuters was unable to reach the commission via its listed fax or phone number.

In February, the Intermediate People's Court in Zhumadian City, Henan province, said on its official WeChat account that five defendants connected to Xincaifu had been tried and sentenced to 14-1/2 to 16-1/2 years in prison and fined hundreds of thousands of dollars.

For now, the families of Ou, Shi and Hu are waiting to learn whether the trio will be prosecuted, while other depositors continue the fight to recover their savings. "This is our whole family's money, earned through blood and sweat," said one depositor. "I'm not going to give up."

Euro-area finance ministers gave political backing Wednesday to an effort by Group of Seven nations to provide loans to Ukraine using windfall profits generated from immobilized Russian central bank assets.

“The discussion among ministers showed appreciation for the constructive engagement with G-7 partners in this regard and full support for it to continue,” Eurogroup president Paschal Donohoe said in a statement following a video conference meeting of finance ministers.

The meeting was called to explore options on how to front-load financial aid to Ukraine by providing loans based on the profits derived from immobilized Russian central bank assets. The discussion came after G-7 finance ministers last month pushed ahead with the plan, aimed at harnessing as much as $50 billion to help Ukraine’s war effort. They agreed to present options to G-7 leaders ahead of next week’s summit in Italy.

G-7 countries have immobilized about $280 billion of Russian central bank assets in response to President Vladimir Putin’s February 2022 invasion of Ukraine, with the majority held in Europe through the Belgium-based clearing house Euroclear.

Euro-area ministers were positive about the process but emphasized the need of risk-sharing between the EU and the US, according to people familiar with the discussion.

During Wednesday’s meeting, European Central Bank President Christine Lagarde signaled that using future interest revenues derived from the immobilized assets doesn’t represent a risk to the euro, the people added, speaking on condition of anonymity because the discussions are private.

One option being considered is a US-led proposal where the US — and possibly other G-7 countries — would provide a loan to Ukraine that would be repaid by the windfall profits generated by the immobilized assets in the EU, in addition to other G-7 partners’ contributions.

But the plan relies on receiving assurances from the EU that Russia’s assets would remain frozen until Russia has agreed to pay reparations and that the windfall profits would be available for the repayment of the loan.

Currently, the EU needs to renew its Russia sanctions every six months, including the immobilization of its central bank assets, a step that requires unanimous approval by the bloc’s 27 member states. Hungarian Prime Minister Viktor Orban has become a hurdle in clearing recent rounds of sanctions against Moscow, as well as in approving financial and military aid for Kyiv.

One alternative under consideration is that each G-7 country or partner would use the immobilized Russian assets in their jurisdictions.

“This would mean rather than using windfall profits generated on assets immobilized in the EU to repay loans from the United States (or other G-7 members), those windfall profits would be used to finance the principal and interest for a loan to Ukraine supported by the EU budget,” said a document prepared for the Eurogroup discussion.

But this option would be complex because the 27 member states would need to unanimously agree to use the EU budget as a guarantee beyond 2025.

Another option considered by the Europeans was to circumvent the obligation of the six-month renewal of the sanctions by “enacting a specific regime concerning Russian Central bank assets framing the regular review clause with objective criteria,” the document said.

These objective criteria would be the end of Russian aggression, a peace agreement and an agreement on war reparations, but that change would also require unanimity.

U.S. President Joe Biden vetoed a congressional resolution that would strike down US Securities and Exchange Commission (SEC) guidance that the crypto industry says has stymied its ability to work with banks.

The guidance — known as staff accounting bulletin No. 121 — [which requires firms that custody crypto to record customer crypto holdings as liabilities on their balance sheets] has also drawn pushback from banks since it was published in 2022. Lenders have said it effectively restricts them from scaling up services to hold digital assets on behalf of customers by making it too costly.

The resolution - which passed the Senate with the support of 11 Democrats - would have invalidated the SEC bulletin. Lawmakers backing the resolution, which passed the House in a 228-182 vote, said the guidance limits options for Americans who want to stow digital assets at traditional banks.

“My administration will not support measures that jeopardize the well-being of consumers and investors,” Biden said in a veto message released Friday evening. “Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation."

In his statement, Biden added that he was “eager to work with the Congress to ensure a comprehensive and balanced regulatory framework for digital assets.”

While the White House earlier this month said it opposed legislation that passed the House establishing a regulatory framework for digital assets — arguing it lacked sufficient consumer and investor protections — it stopped short of a full veto threat, indicating the president was open to negotiations on legislation governing the issue.

Data slides

• slide 1: operating income by category
• slide 2: operating income vs expense (screenshot attached in post)

These sliders are immensely helpful with quick estimates!

- Consumers’ preferences to be shared via proprietary tokens - Firm competing with fintech newcomers, fellow giant Mastercard - The payments company also is aiming to make it easier for consumers to make purchases by a facial recognition-triggered click-to-pay experience

Visa Inc. is rolling out new technology that will allow the payments giant to share more information about customers’ preferences based on their shopping history with retailers as it seeks to remain a top player in the competitive e-commerce space.

The data will be shared via the payments giant’s proprietary “tokens,” which provide an added layer of security between a consumer’s bank information and a merchant. Shopping inclinations and other information based on past transactions — such as preferred categories, like movies or golf — will be shared via token with retailers with the consent of consumers.

“It’s almost entirely blind to almost all consumers,” Visa Chief Executive Officer Ryan McInerney said in an interview of the company’s token technology. “They just know their payments work better.”

The sharing of shopping data via token is one of a handful of innovations Visa unveiled at a conference in San Francisco, where it’s based. Visa, one of the largest e-commerce technology companies in the world, is finding itself increasingly fending off competitors seeking larger slices of the fees merchants must pay to carry out consumer transactions.

In order to tailor a shopping experience using artificial intelligence, Visa relies on massive amounts of data. While the company is promising “better shopping experiences” through the information sharing, consumer consent for turning over that data to technology companies to power their AI models — and whether customers know they’re allowing such information to be shared — has raised concerns among consumer advocates and lawmakers.

McInerney said he hasn’t heard any complaints about the data tokens because they’re designed with consumer consent “as the foundational premise.” Consumers will have the option, through their bank app, to revoke access to their information, he said. “It’s all about putting the customer in control of when and how to share that data.”

Visa’s token technology – different from that used to develop stablecoins, a type of cryptocurrency – has been scrutinized by the US Justice Department after vendors who eschewed the tokens were charged more than those using them. The new sharing of shopping data through tokens is set to be piloted later this year, Visa said.

Facial Recognition

The payments company also is aiming to make it easier for consumers to make purchases by introducing a payment passkey — a quick, facial recognition-triggered click-to-pay experience. It’s much like Apple Inc.’s Apple Pay, but works for every browser and mobile device, using facial-recognition capabilities built into most recent mobile devices. Consumers often abandon their transactions when slowed down by security prompts meant to verify their identity, and Visa’s new service is meant to minimize that friction.

“Making a payment should be as simple as unlocking your phone,” McInerney said. “That’s essentially what we’re doing — leveraging common standards that are kind of already embedded into all of the phones and operating systems and browsers.”

Visa also will allow US consumers to use a single credential for multiple payment methods, rather than requiring a bank to issue separate card numbers for credit and debit, for example. Already available in Asia, the flexible credential will be live with Affirm Holdings Inc. later this year, according to a statement. That will make it easier for a bank to add products to a consumer’s account without creating new account numbers or sending more cards in the mail.

Visa’s Competitors

Visa not only competes with rival payments giant Mastercard Inc. but also with financial-technology firms such as Stripe Inc. and Plaid Inc.

“If you just look at the number of companies, the number of payment alternatives that are out there, in the US and around the world, the number of options that people have to pay and be paid, it’s never been greater, and the number of options continues to accelerate,” McInerney said.

Visa is partnering with fintechs, he said, to take advantage of payments developments rather than being pushed aside.

“If we do our job well, we can put our network to work — open our network for people to do what it is they’re trying to do, to innovate and build products on our network,” McInerney said. “We’ve had really good success partnering with both fintechs and big tech players to drive their goals.”

- Russian metal producers have primarily adopted blockchain-based alternatives to conventional payment systems to maintain their trading operations

- Previously, the Bank of Russia had considered a complete ban on all cryptocurrencies, but in November, Russian central bank governor Elvira Nabiullina said she supports experimenting with such payments in international transactions

Russian commodity firms have increasingly turned to cryptocurrency to circumvent financial hurdles posed by international sanctions.

With traditional banking channels facing challenges, companies are now leveraging stablecoins, notably Tether (USDT), to facilitate “seamless and swift cross-border transactions” with their Chinese counterparts, as reported by Bloomberg.

Major Russian metal producers have primarily adopted this transition, seeking efficient alternatives to conventional financial systems to maintain their trading operations.

How Stablecoins Are Transforming International Trade Finance

These developments respond to the extended economic ramifications of international sanctions following geopolitical tensions that began in early 2022.

According to Bloomberg, despite not being directly targeted by sanctions, these firms have encountered substantial obstacles in conducting business internationally, particularly in receiving payments and acquiring necessary materials and equipment.

Notably, adopting stablecoins appears to be a strategic move to preserve business continuity and mitigate the risks associated with frozen bank accounts and the slow pace of traditional banking transactions.

As disclosed, the appeal of using stablecoins like Tether’s USDT lies in their ability to facilitate transactions quickly and cheaply. Ivan Kozlov, a digital currency expert and co-founder at Resolv Labs, explained:

> With stablecoins, the transfer may take just 5-15 seconds and cost a few cents, making such transactions pretty efficient when the sender already has an asset base in stablecoins.

Furthermore, Kozlov revealed that the use of cryptocurrencies in trade finance is gaining traction among unsanctioned firms and as a broader practice in countries facing financial restrictions or dollar “liquidity issues.”

This highlights a growing recognition of cryptocurrency’s potential to serve as a “reliable” medium for substantial international transactions, especially in environments where traditional financial systems pose considerable operational challenges.

Russia’s Current Crypto Stance

Meanwhile, integrating cryptocurrencies into Russia’s trade mechanisms also signifies a change in the country’s regulatory stance towards digital assets.

Bloomberg noted that initially skeptical, the Russian central bank has shifted its view, recognizing the potential benefits of cryptocurrencies in circumventing financial barriers.

The report read:

> Previously, the Bank of Russia had considered a blanket ban on the use and creation of all cryptocurrencies, but in November, Governor Elvira Nabiullina told parliament that she supports experimenting with such payments in international transactions.

Amidst these developments, strategic advisors like Gabor Gurbacs from Tether and VanEck have advocated for the broader adoption of cryptocurrencies like Bitcoin by central banks, especially for those countries experiencing fiat currency devaluation.

Gurbacs suggests that adding Bitcoin to national reserves could provide economic stability and diversification, proposing that countries start allocating a small percentage to cryptocurrencies and gradually increasing their holdings.

The financier symbolized high-flying 1980s Wall Street speculation. 'Greed is healthy,’ he once declared at a college commencement.

Ivan Boesky, who reached the pinnacle of fame and fortune as a high-flying Wall Street arbitrageur in the 1980s only to be exposed as a cheat in the insider-trading scandal that defined the era, has died. He was 87.

The New York Times reported his death, citing his daughter, Marianne Boesky. No details were immediately available.

As junk bonds fueled a wave of hostile acquisitions, Boesky became the archetype of the savvy speculator, reaping hundreds of millions of dollars in profits on takeover bets. Then, after admitting to insider trading, Boesky became the poster child for Wall Street greed, his elongated face and toothy smile on the cover of Time magazine with the headline, “Ivan the Terrible.” He spent two years in prison.

Boesky’s case set off shock waves not only on Wall Street but across the US, confirming some investors’ worst fears about how capital markets worked. He was believed to have been the model for the character of Gordon Gekko, the rapacious villain played by Michael Douglas in the 1987 film Wall Street. Gekko’s speech in the movie, declaring that “greed is good,” echoed Boesky’s own assessment.

“Greed is all right, by the way,” Boesky told graduates of the University of California at Berkeley’s business school in 1986, months before his downfall. “I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.”

Michigan Bars

Ivan Frederick Boesky was born on March 6, 1937, in Detroit, the second child of William and Helen Boesky. His father ran a chain of local bars, called the Brass Rail.

At age 12, Boesky attended Cranbrook, a prestigious private academy in Bloomfield Hills, a Detroit suburb, where he became fanatical about wrestling and received a trophy as “wrestler of the year.” Despite the athletic success, he left Cranbrook abruptly before graduating and transferred to a public school.

Boesky attended Wayne State University in Detroit, the University of Michigan and Eastern Michigan University. He didn’t finish but attended Detroit College of Law, where he earned a degree in 1964.

By that time, Boesky had married Seema Silberstein, daughter of Detroit real estate developer Ben Silberstein, whose properties included the Beverly Hills Hotel. He clerked for a federal judge in Detroit, a Silberstein relative, but was unable to land a job at one of the city’s top law firms.

After his father’s death in 1964, Boesky took over the last remaining Brass Rail bar, which by then featured topless dancers, and renamed it Le Club a-Go-Go, according to a 1993 Vanity Fair article. Two years later it went bankrupt and Boesky moved to New York, where he started a new career on Wall Street.

After several years working at financial firms where he learned the business of risk arbitrage, Boesky started his own investment fund in 1975 with $700,000 from his in-laws.

After six years of betting on the stocks of companies that were in play, he formed a new fund, just in time for a wave of takeovers that changed the landscape of corporate America.

In 1984, Boesky earned more than $100 million from Texaco Inc.’s acquisition of Getty Oil Co. and Chevron Corp.’s purchase of Gulf Oil Co., according to a 1984 Atlantic magazine story. The following year, he earned an estimated $50 million when Philip Morris Cos. acquired General Foods Corp.

Unlike other arbitragers who generally avoided publicity, Boesky embraced it. He hired a publicist to get him quoted in the media, wrote a 1985 book about his experiences in high finance called Merger Mania and traveled the country to promote it in speeches.

SEC Probe

By the mid-1980s, the bull market on Wall Street that allowed savvy investors to make millions also led regulators to suspect the markets were rigged in favor of those with inside information.

The Securities and Exchange Commission in mid-1985 opened a probe into suspicious trading by two Venezuela-based employees of Merrill Lynch & Co. that led them on a tangled path into cheating on Wall Street that ensnared Dennis Levine, an investment banker at Drexel Burnham Lambert Inc.

One year later, in June 1986, shortly after he was arrested for insider trading, Levine pleaded guilty and agreed to cooperate with the US attorney in Manhattan, Rudy Giuliani. Levine told federal prosecutors he had provided Boesky with nonpublic information about potential deals. Accused of making about $12 million from illegal trades, Levine was later sentenced to two years in prison.

A few months later, Boesky cut a deal with the government. He would plead guilty to one felony charge of conspiring to file false trading records, pay $100 million in penalties and cooperate with federal authorities.

As part of the agreement, Boesky secretly recorded his conversations with traders to help the government build cases against other Wall Street figures. The most notable of them was Michael Milken, Drexel Burnham’s head of high-yield junk bond trading, who helped finance many of the era’s corporate takeovers. Milken, who served almost two years in prison for violating securities laws, was pardoned in 2020 by then-President Donald Trump.

Boesky faced a maximum of five years in prison but based on his cooperation with authorities, he was sentenced to three years. In April 1990, after serving about two years, he was released.

In a letter to a federal judge supporting the reduced sentence, prosecutors credited the financier for helping them to understand the extent of Wall Street abuses: “What Boesky has given the government is a window on the rampant criminal conduct that has permeated the securities industry in the 1980s, to an extent unknown to this office before Boesky began cooperating.”

Unlike Milken, who spent much of his post-prison life engaged in philanthropy, Boesky largely disappeared from public view after his release. In 1991, Seema Boesky filed for divorce, which was finalized two years later. The couple had four children: William, Marianne, Theodore and John. He subsequently lived with his second wife, Ana.

- Total credit demand in China fell in April for first time since 2005 - China has increasingly hidden negative data in recent years

A series of research reports from Chinese brokerages on the country’s recent bad credit data disappeared from social media over the weekend, highlighting the increasing difficulty of getting reliable information about the world’s second-largest economy.

At least seven research reports from mainland brokerages and securities firms that had been posted to WeChat by analysts were unavailable for viewing on Monday. The link to six of the reports now leads to an error message saying the content couldn’t be viewed after complaints about unspecified violations of rules governing public accounts.

A report from China Merchants Securities Co. was deleted from a WeChat account where the brokerage’s fixed-income analyst Zhang Wei usually posts research, according to a screenshot of the posting viewed by Bloomberg News.

Reports from analysts at Zheshang Securities Co., Guosheng Securities Co., GF Securities Co., China International Capital Corp., Shenwan Hongyuan Securities Co. and Soochow Securities Co. were also unavailable for viewing or had been taken down before Monday morning.

None of the seven companies responded to requests for comment.

China has increasingly hidden negative data over the past few years, making it harder for investors to accurately judge what is happening in the economy. The nation’s exchanges are set to switch off a live feed of foreign money flows into stocks as early as Monday, the latest example of closely-watched information being removed.

The data released over the weekend showed that total credit demand fell in April for the first time since 2005. That unexpectedly bad result was driven by weak demand from companies and households to borrow, and also by local governments across the country pulling back on selling bonds.

The data released over the weekend showed that total credit demand fell in April for the first time since 2005. That unexpectedly bad result was driven by weak demand from companies and households to borrow, and also by local governments across the country pulling back on selling bonds.

China’s the top securities newspapers attempted to put a positive spin on the data. A front-page article

in China Securities Journal on Monday suggested the credit data would stabilize and pick up once the government started issuing more bonds.

The central government said it will start selling ultra-long bonds from Friday, although that likely won’t immediately turn around the falling demand for mortgage loans from households or the weak demand from companies to borrow money.

The firm says that once it has sold off its remaining assets it will have as much as $16.3bn to cover the debts, which stand at around $11bn.

The company's new reorganisation plan says almost all of its customers will get at least the total amount they lost when FTX collapsed in November 2022.

In March this year, FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for defrauding customers and investors of the now-bankrupt firm.

"We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors," said the company's FTX's new chief executive, John Ray.

The plan still needs to be approved by a US bankruptcy court.

FTX said it has been gathering the funds to pay its debts by selling assets investments held by Alameda Research or FTX Ventures businesses.

Alameda was a crypto trading firm controlled by Bankman-Fried.

FTX added that a jump in crypto prices since the company failed had not given its finances a major boost. It said almost all of the Bitcoin and other digital currencies believed to have been held by the exchange at the time of its collapse were missing.

The price of the biggest cryptocurrency, Bitcoin, has risen by around 270% since the firm filed for bankruptcy more than a year and a half ago.

FTX was one of the world's largest crypto platforms before its downfall.

Bankman-Fried enjoyed celebrity status and his platform attracted millions of customers.

After reports that it was in trouble, customers withdrew billions of dollars from FTX, triggering the company's implosion and laying bare the extent of Bankman-Fried's crimes.

Archived link

Here is the report by the U.S. Financial Crisis Inquiry Commission (pdf)

When the Financial Crisis Inquiry Commission released their final forensic report on the causes of the 2008 financial collapse on Wall Street – the worst collapse since the 1929-1932 collapse – it pointed to hidden leverage in off-balance sheet entities at the megabanks on Wall Street as a key driver of the crisis. It wrote:

“From 2000 to 2007, large banks and thrifts generally had $16 to $22 in assets for each dollar of capital, for leverage ratios between 16:1 and 22:1. For some banks, leverage remained roughly constant. JP Morgan’s reported leverage was between 20:1 and 22:1. Wells Fargo’s generally ranged between 16:1 and 17:1. Other banks upped their leverage. Bank of America’s rose from 18:1 in 2000 to 27:1 in 2007. Citigroup’s increased from 18:1 to 22:1, then shot up to 32:1 by the end of 2007, when Citi brought off-balance sheet assets onto the balance sheet. More than other banks, Citigroup held assets off of its balance sheet, in part to hold down capital requirements. In 2007, even after bringing $80 billion worth of assets on balance sheet, substantial assets remained off. If those had been included, leverage in 2007 would have been 48:1, or about 53% higher. In comparison, at Wells Fargo and Bank of America, including off-balance-sheet assets would have raised the 2007 leverage ratios 17% and 28%, respectively.”

Citigroup, of course, blew itself up in 2008 and received the largest bailouts in global banking history. By March of 2009, its stock was trading at 99 cents.

The crash of 1929-1932 had two key similarities to today’s banking structure: so-called universal banks that took deposits as well as operated giant trading casinos that took huge risks by speculating in stocks and manipulating markets; and the lack of competent regulation.

The Banking Act of 1933, known also as the Glass-Steagall Act, effectively dealt with that crisis for the next 66 years by barring deposit-taking banks from merging with Wall Street trading houses. The Bill Clinton administration repealed that legislation in 1999 at the urging of Sandy Weill, John Reed (and their sycophants in his administration) in order for the two men to recreate the disastrous 1929 universal bank model via the creation of Citigroup. The other big players on Wall Street followed in lockstep in short order.

In January of this year, Anat Admati, Professor of Finance and Economics at Stanford Graduate School of Business, and German economist Martin Hellwig, released an updated and expanded version of their 2013 book The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It. In it, the authors write:

> "Some of the risks that make JPMorgan Chase dangerous cannot actually be seen by looking at its balance sheet because the positions that give rise to them are not included there. These are risks from business units that JPMorgan Chase might own in part or that it sponsors, and to which it has provided guarantees to serve as a backstop if they should have funding problems. These units might be full-flown subsidiaries, or they might be mere ‘letterhead firms,’ vehicles without any drivers, that are established for legal or tax reasons only. The bank’s commitments to these units amount to almost a trillion dollars, but these potential liabilities of the bank are left off the bank’s balance sheet. Yet they are quite relevant to the financial health of JPMorgan Chase.”

JPMorgan Chase explains why it doesn’t consolidate its tax credit vehicles on its balance sheet as follows in its most recent annual report:

> “The Firm holds investments in unconsolidated tax credit vehicles, which are limited partnerships and similar entities that own and operate affordable housing, energy, and other projects. These entities are primarily considered VIEs [Variable Interest Entities]. A third party is typically the general partner or managing member and has control over the significant activities of the tax credit vehicles, and accordingly the Firm does not consolidate tax credit vehicles….”

But that’s just the tip of the iceberg. According to financial data at the Federal Financial Institutions Examination Council (FFIEC), as of December 31, 2023, JPMorgan Chase held $3.227 trillion off-balance sheet, of which $528.5 billion is undefined and marked as “other.” To put that in perspective, $528.5 billion is the size of the assets of the seventh largest bank in the United States and yet the public has no idea what the $528.5 billion off-balance sheet at JPMorgan Chase is made up of or what kind of risks it presents.

In JPMorgan Chase’s 10-K public filing with the Securities and Exchange Commission for the period ending December 31, 2023, it reported total assets on its balance sheet of $3.875 trillion. (See page 46 at this link.) That’s versus the FFIEC data showing it has another $3.227 trillion off-balance sheet. Now ask yourself this: have you ever read in any mainstream media news outlet that the U.S. is harboring a $7.1 trillion bank that has admitted to five criminal felony counts since 2014?

JPMorgan Chase’s off-balance sheet hubris goes a long way in explaining why the bank’s federal regulators are demanding that it increase its capital by 25 percent. The bank’s Chairman and CEO, Jamie Dimon, is huffing and puffing against a capital increase and holding all of those private meetings with bigwigs in Washington.

Raising additional concerns, for the first time ever Jamie Dimon dumped a large amount of his own stock in JPMorgan Chase this year, selling $150 million in February and another $32.8 million in April. If the bank is forced by its regulators to announce a big equity capital raise via a secondary offering of common stock, that could cause a plunge in its share price – raising more questions about the timing of Dimon’s unprecedented stock sales while sitting on inside information gleaned from what his bank regulators are telling him about its demands for an increase in capital.

JPMorgan Chase, of course, is not the only Wall Street megabank showing giant sums off-balance sheet. As of December 31, 2023 Bank of America shows $1.6 trillion off-balance sheet; and Citigroup’s Citibank, the “universal” bank that blew itself up in 2008, shows a mind-boggling $2.6 trillion off-balance sheet versus $1.7 trillion on its balance sheet. That data also comes courtesy of FFIEC.

JP Morgan Chase's off-balance sheet items can be seen here (jpg)

SMIC, China’s biggest contract chip manufacturer, is seen as critical to Beijing’s ambitions of cutting foreign reliance in its domestic semiconductor industry as the U.S. continues to curb China’s tech power. SMIC lags behind Taiwan’s TSMC and South Korea’s Samsung Electronics, according to analysts.

The company’s first-quarter net income plunged 68.9% from a year earlier to $71.79 million, compared with LSEG analysts’ average estimate of $80.49 million.

Gross margin slid to 13.7% in the quarter – the lowest the firm has ever recorded in nearly 12 years – according to LSEG data.

Revenue for the first quarter was $1.75 billion, up 19.7% from a year earlier, as customers stocked up on chips, SMIC said. This handily beat LSEG estimate of $1.69 billion.

"In the first quarter, the IC [integrated circuits] industry was still in the recovery stage and customer inventory gradually improved. Compared to three months ago, we have noticed that our global customers are more willing to build up inventory,” SMIC said on Friday.

Customers are building up inventory to brace for competition and respond to market demand, the firm said, adding that it was unable to fulfil a few rush orders in the first quarter as some production lines were running at near maximum capacity.

SMIC’s chips are found in automobiles, smartphones, computers, IoT technologies and others. More than 80% of its revenue in the first quarter came from customers in China, it said.

Bracing for competition

In a bid to build up competitiveness and increase market share, the firm said it was prioritizing areas such as capacity construction and R&D activities for investments.

"[To] ensure that the company maintain its leading position in fierce market competition and maximize the protection of investor interest ... the company plans not to pay dividends for the year 2023,” said SMIC.

“We believe that as long as there’s demand from customers along with our technology and capacity readiness, we can ultimately be bigger, better and stronger despite the fierce competition.”

The company expects second-quarter revenue to rise by 5% to 7% from the first quarter on strong demand, while gross margin could dip further to between 9% and 11%.

“Along with the increase in capacity scale, depreciation is expected to rise quarter by quarter. So the gross margin is expected to decline sequentially,” SMIC said.

The company was placed on a U.S. trade blacklist in 2020 due to which businesses were required to apply for a license before they could sell to SMIC, limiting its ability to acquire certain U.S. technology.

In a blow to U.S. sanctions, an analysis of Chinese tech giant Huawei’s Mate 60 Pro smartphone launched last year revealed that it runs on a 7-nanometer chip made by SMIC. The smartphone also appears to support 5G connectivity despite U.S. attempts to cut Huawei from key technologies including 5G chips.

TSMC and Samsung began mass producing 7-nanometer chips in 2018 and currently manufacture 3-nanometer chips — a smaller size denotes more advanced technology.

Archived version

After almost 7 years of operation, due to a combination of internal and external factors, we [the LocalMonero / AgoraDesk Team] have made the difficult decision to close our platform.

We're extremely thankful for the love and support we've received over the years. We couldn't have done it without you. We love you all ♥

LocalMonero has been around for most of Monero's life. Fortunately, the Monero ecosystem has matured a lot over these years, and with the imminent launch of Haveno and other DEXs like Serai, atomic swaps, the coming addition of FCMP (full blockchain anonymity set replacing rings of 16) as well as the continuing and rapidly accelerating development of the Monero protocol, we're confident that Monero's future is bright, with or without our platform.

The winding-down process begins today, and finishes 6 months from now. Our support staff will be available for help throughout this period.

• Effective immediately, all new signups and ad postings are disabled;
• One week from now, on May 14th, 2024, new trades will be disabled as well;
• 6 months from now, on November 7th, 2024, the website will be taken down.

Please reclaim any funds from your arbitration bond wallet prior to that date, otherwise the funds may be considered abandoned/forfeited.

Can I still register / post an ad?

No, registrations and ad postings are disabled, effective immediately. Can I still trade if I have an account?

You will be able to trade until May 14th, after which new trades will be disabled. How long do I have to access my account and recover any funds?

Until November 7th, 2024. After that, the funds may be considered abandoned/forfeited.

I have trades/disputes open, what do I do?

All trades have to be finalized or cancelled prior to 2024-11-07. We will continue to arbitrate and mediate any remaining disputes up to that date.

Can I delete my user data?

Yes, on the website, just login and open your account settings, in the "Personal" tab you'll see the "DELETE ACCOUNT" button at the bottom. This function isn't implemented in the mobile app, so you'll need to use a mobile browser to login and delete your account from a mobile device.

I have another question that's not covered here, how do I get assistance?

Our support will be available up until the closure on 2024-11-07. If you need any sort of help, please feel free to reach us through our usual support channels.

That's it for this announcement. It's been a pleasure and a privilege helping the community.

With our eternal love, The LocalMonero / AgoraDesk Team

Reports say that round 20 percent of China's urban housing properties, roughly 65 million units, sit vacant. These "ghost cities" such as Tiandu Cheng, Thames Town, and Binhai sprawl across hundreds of square kilometers, boasting infrastructure, skyscrapers, and public spaces but are significantly underpopulated, with vast unoccupied areas.

Ghost Cities are abandoned neighborhoods and sometimes entire urban areas constructed but never inhabited, representing the epitome of Chinese overdevelopment in real estate and reliance on housing as an investment avenue.

The Chinese property market bubble has hit not only the country's domestic market, but also its neighbours.

Forest City celebrates its seventh anniversary in MalaysiaMalaysia’s Forest City and Cambodia’s Sihanoukville have suffered immensely from China’s property sector crisis. From the half-finished structures of Forest City in Johor, Malaysia, to the desolate shores of Sihanoukville, Cambodia, the narrative of China's real estate giants reflects unbridled ambition and dire consequences. Both locales are now labeled as ghost cities.

The property bubble burst in late 2021, triggered by the default of China Evergrande Group, one of the nation’s largest property developers, on a debt totaling $340 billion by the end of 2022. In the same period, another major developer, Country Garden, defaulted on millions of dollars in interest payments linked to two offshore bonds, signaling further distress in the sector.

These events reverberated onto foreign ventures. Forest City, once touted as Southeast Asia's housing pinnacle, now stands deserted. It serves as a haunting testament to the pitfalls of speculative investments and excessive urban planning. Envisioned as a bustling metropolis for hundreds of thousands, the project promised modernity and prosperity but instead yielded desolation and decay. With the burst of the Chinese property bubble, Forest City collapsed like a house of cards, leaving behind a landscape dotted with vacant skyscrapers and abandoned aspirations.

Regrettably, Forest City is just one episode in the broader narrative of China's ghost cities. In Cambodia's Sihanoukville, the departure of Chinese real estate entities has left the coastal resort town strewn with numerous incomplete projects. Once dubbed the "second Macao" amidst the influx of Chinese capital, Sihanoukville now grapples with economic downturn and shattered dreams.

Sihanoukville boasts numerous ghost structures. According to the city government, there are roughly 360 unfinished buildings and approximately 170 completed but unoccupied ones. Situated on the Gulf of Thailand coast, Sihanoukville experienced a boom in the mid-2010s fueled by Chinese investments, aligning with Cambodia's pursuit of economic growth through China's Belt and Road Initiative.

Chinese investors have inundated neighboring Asian nations, exposing them to China's economic fluctuations. Cambodia is not an exception. The debt crisis of Chinese real estate giant Country Garden Holdings spilled over to Malaysia, where the fate of a $100 billion mixed-use development in Johor hangs in uncertainty. Cambodia's heavy reliance on Chinese investments is evident, with approximately 90 percent of the $1.9 billion foreign investments approved in 2022 originating from China.

The International Monetary Fund has labeled the real estate turmoil a 'historic bust.' In a February 2 report, IMF researchers Henry Hoyle and Sonali Jain-Chandra asserted that the property market can no longer be the primary driver of China's economy, owing to years of overreliance on real estate. Beijing now faces the daunting task of rectifying distressed developers like Evergrande and Country Garden, stabilizing plummeting real estate prices, and charting a sustainable course for the sector.

"Home prices became significantly stretched relative to household incomes in the decade before the pandemic, in part because consumers preferred to invest their considerable savings in real estate given the scarcity of attractive alternative saving options," the IMF researchers remarked.

However, the anticipation of continual price hikes for land and homes spurred overextended borrowing by developers, culminating in a collapse of real estate activities, researchers noted. The prevalence of vacant skyscrapers and desolate urban vistas serves as a stark reminder of the perils of unchecked ambition and speculative investments.

According to the UrbanNext Lexicon website, the presence of Ghost Cities underscores Chinese tendencies toward overdevelopment and reliance on housing as an investment vehicle, rendering areas susceptible to the ramifications of a widespread economic downturn in China.

It is imperative for ASEAN countries, particularly Malaysia and Cambodia, to demand accountability from China's real estate giants. The era of being exploited must cease, and China must comprehend that sovereign nations will not tolerate being manipulated in its pursuit of global dominance.

Here is the study: https://www.tandfonline.com/doi/full/10.1080/02673037.2024.2334797

A new study found that the Chinese property market became dominated by a small number of large firms who used their ability to access debt and land at low cost to create an oligarchic market.

The investigation led by Lan Deng, professor of planning at the Michigan University in the US, argues that major companies followed the same high-risk, high-growth business strategy meant they were all vulnerable to an economic shock.

In the event, the default of Evergrande in 2021, set off a progressive collapse in its rivals and led to China’s continuing property crisis.

Published in the journal Housing Studies, the paper found that there were about 10,000 registered developers in China, but that the top five accounted for 30% of domestic housing supply in 2018, compared with 13% in the much smaller US market.

Evergrande, which once built as much as 72 million sq m of property in a year, filed for bankruptcy protection in August 2023.

Country Garden, whose annual housing production was about twice the size of Evergrande’s, followed suit two months later.

Another factor was the use of land auctions. In China, state land is sold to the highest bidder, and the large developers always had the resources to outbid smaller rivals.

China Daily notes that the property sector remains critical for the Chinese economy. It points out that, even after the collapse of the two largest companies, it still contributes 20% of fiscal revenue, stores 70% of household wealth, generates 24% of GDP and accounts for 25% of bank loans.

Archived version

Timing is everything in life and right now happens to be one of the worst times to be a home builder in China. After going on an aggressive building spree that sparked the Chinese economy, Reuters reports that new home prices fell at the fastest rate in eight years. This revelation exacerbates the concerns about debt and oversupply that have brought several of China's most prominent real estate developers to their knees.

This situation is of concern because of the real estate market's importance to China's economy. By some estimates, China's real estate sector is responsible for nearly 25% of the country's economy. The first signs of trouble came in 2021 when the government restricted access to credit for China's largest real estate developers. Although stabilizing the economy was the motive for the move, it had the opposite effect.

China's real estate developers and major economic sectors are just as dependent on access to credit as their American contemporaries. Developers lose access to the capital they need to complete their projects when credit is restricted, lending standards tighten and interest rates rise. Many analysts blame this credit crunch for the Chinese real estate sector's weaker-than-expected results in early 2023.

Reuters cites data from China's National Bureau of Statistics showing new home prices in March were down 2.2% compared to the previous year. That's the largest year-to-year drop in prices since August 2015. It's also worse than the February 2024 numbers, which showed a 1.5% decline. That's a sector-wide drop of nearly 4% in just sixty days. The price drops are affecting all of China's cities.

China groups its cities into three separate tiers, and price declines have worsened in all three tiers. The central government is concerned about that trend because the country had better-than-expected GDP growth for the first quarter of 2024. That means other Chinese economic sectors are making more money but home prices are still dropping. Normally, GDP growth is a predictor of real estate sector profits.

The Chinese government has taken numerous measures to breathe life into the real estate industry, including removing barriers that keep citizens from buying homes and encouraging lenders to speed up loan approvals for real estate developers. However, buyers remain skittish because of doubt that cash-strapped developers will finish their new projects on time or at all.

Instead, the opposite is happening in China. Even as China's GDP grows, the real estate sector is dragging the economy down. The damage wrought by the real estate sector's troubles would have been even more severe without better-than-expected GDP numbers. Economic experts and analysts expect the situation to get worse before it improves.

Woei Chen Hoe, an economist for Singapore-based United Overseas Bank (UOB) said as much in a recent interview with Reuters, where he opined, "There’s not much of an improvement in the outlook from here. I think there are still downside risks to the economy. It’s pretty clear the property glut is still continuing.”

Moody's Analytics economist Harry Murphy Cruise recently wrote a company research memo forecasting continued troubles. He said, “Absent the monster spending splurge of years gone by, real estate investment, dwelling prices and new dwelling sales are set to fall throughout 2024.” That kind of pessimistic outlook is the opposite of what anyone connected to Chinese real estate development wants to hear.

Cross posted from: https://feddit.de/post/11697931

The €50 million fund will mainly invest in companies operating in Estonia to alleviate excessive risks so the companies are attractive for private capital.

The detailed terms and conditions of the fund will be developed by the Ministry of Economic Affairs and Communications and the government plans to discuss them in July.

Prime Minister Kaja Kallas said this will strengthen Estonia's security and help boost the economy. The fund will help Estonian defense industry companies to develop and bring their products to the market.

"Estonia has a very highly developed technology sector, but there is a market failure in the use of this capacity to increase our national security. The state can help with seed funding here," she said, adding it will also create jobs.

One target of the UN Sustainable Development Goals is that by 2030, remittance fees should be less than 3%, and total fees to send and receive money between a pair of countries should be no more than 5%. Some researchers believe that to be truly affordable, the first goal should be even less than 3%.

The International Monetary Fund has estimated that reaching this target could generate $32bn (£26bn), even apart from the direct-cost savings.

This is because remittances have such powerful knock-on effects for the economy, and people tend to send more in remittances when fees are lower.

Yet the world is far off this target. According to the World Bank, the global average is 6.2%, over double the target.

As the title says, numerous banks in the U.K., maybe across the world, are raising interest rates on mortgages, and the given reason is cause inflation hasn’t fallen as much as expected. Can anyone give me a basic inflation, other than greed, as to why they’d do this?

Cross posted from: https://feddit.de/post/11575186

The threat of extending sanctions to banks in China is chilling the finance that lubricates even non-military trade from China to Russia.

This is posing a growing problem for small Chinese exporters, said seven trading and banking sources familiar with the situation.

As China's big banks pull back from financing Russia-related transactions, some Chinese companies are turning to small banks on the border and underground financing channels such as money brokers - even banned cryptocurrency.

"Transactions between China and Russia will increasingly go through underground channels," said the head of a trade body in a southeastern province that represents Chinese businesses with Russian interests. "But these methods carry significant risks."

Making payments in crypto, banned in China since 2021, might be the only option, said a Moscow-based Russian banker, as "it's impossible to pass through KYC (know-your-customer) at Chinese banks, big or small".

Chinese quant hedge funds have been venturing into overseas markets for years, but their expansion has accelerated as the sector has become increasingly crowded at home and regulators tighten their supervision of a sector able to profit from market volatility.

"Under the current compliance rules in China, some quant strategies don't work, or cannot deliver the best performance at home," said Shen, who helps Chinese funds build global brands.

"So some quant funds are setting up their second investment centre, in Hong Kong or Singapore, where their strategies may work better, and operate more freely."

Like several other Chinese property developers, Shanghai-based Shimao defaulted on offshore bonds in 2022.

Last month, it laid out detailed plans to restructure its debts.

State-owned China Construction Bank (Asia) now filed the petition in Hong Kong over Shimao's failure to repay loans worth HK$1.58bn ($201.8m; £159.7m).

It is rare for a Chinese bank to take such legal action against one of the country's developers. Similar cases against other property firms were launched by overseas-based creditors.

Shimao said in a stock exchange filing it would "vigorously" oppose the lawsuit.

Well I finished my taxes this year and they are finally accepted. Every year, we look at the market and the issues and decide on what provider to use. So here is a summary of our experience. Happy to hear your experiences too.

Over the years I have used TaxCut/H&R Block, TaxAct, FreeTaxUSA, and now this year OLT. They all have done the job, but they have all had issues too. I left the PC version of TaxCut/H&R Block (often considered the #2 software out there) in 2003 primarily because I wanted to move to the Web and use Linux. It was also a huge cost savings at the time. My last H&R Block return was $61.30, and TaxAct was $17.90 in 2003. We used TaxAct (maybe the #4 tax provider, and #3 provider in the high-end market) for many years, but their price hikes over the years were way beyond simple inflation and sanity. By 2020, our last return cost $134.90. They also had issues with calculating underpayment penalties so we sometimes payed penalties when we did not have to. If they had just followed inflation that $17.90 in today's dollars would be $30.16. So I strongly believe that paying more then $30 regardless of how complex your taxes are is a rippoff. So in 2021 we moved to FreeTaxUSA (FTU) which was $21.98. As far as I know they are the #3 tax provider and the #1 value player. We actually like them quite a lot. The main issue we found was their treatment of MN Exempt income from mutual funds is a bit suspect though it can be worked around. The other issue we had was particular to this year. Turns out that we needed K1 support with certain boxes and codes, and the state part of that which for us is MN KF. FTU just could not do it. So we tried OLT. The cost of OLT was $15.90. What I really appreciate about OLT is support of a wider range of filing situations for a price under $30.00. Also like their lack of games including no price tiers based on your return, and being able to see your whole return before paying. What I am less sure of is thier MN state returns. My experience is that you may have to know what your doing and know to manually enter certain things, and manually override others for MN State returns. I had no particular issues with Federal though. So it seems like OLT is good for more complex returns for people that know what they are doing. Overall I liked OLT because of many added capabilities and I do hopefully know what I am doing.

I'll close with the list of tax providers I personally considered in the order of decreasing market share based on relative web traffic: TurboTax (60%), H&R Block (23%), FreeTaxUSA(7.4%), TaxAct (6.4%), TaxSlayer (2.3%), OLT (0.59%), 1040 dot com (0.48%). I did not seriously consider CashApp Taxes, FileYourTaxes, 1040Now, eFile Express, IRS Free Fillable Forms, or Sprintax for various reasons. I also did not consider TaxHawk or Express1040 or consider them in my web traffic estimates as they are from the same company as FreeTaxUSA which is more well known. I wanted a provider with fairly good support, that had some popularity, had a reasonable reputation, could file taxes of reasonable complexity, was focused on US residents, is web based and can use with Linux and Firefox, and could file my state return. I also wanted a provider for under $30 which left only FreeTaxUSA, OLT, and 1040 dot com on the list.

Anyway, hope someone finds this somewhat interesting or useful. Best to you all.