BEIJING (Reuters) – China’s top anti-graft watchdog announced on Monday an investigation into one of its own former senior inspectors, as the body ramps up a campaign to expose corruption in its own ranks.
Remember Hamid Karzai? That was Bush’s puppet in Afghanistan, post Taliban. Thanks to Karzai, Afghanistan’s opium production rose an impressive 20x under his rule — fulfilling an insatiable appetite for drug addled Americans in need of firm opiate-laced needles in their necks.
Now retired, he’s pissed off that the current Afghan ruler, Ashraf Ghani, permitted the United States to drop the MOAB on their ISIS loving asses, saying, “How could you permit Americans to bomb your country with a device equal to an atom bomb? If the government has permitted them to do this, that was wrong and it has committed a national treason.”
Ghani’s answer to Karzai’s charges was, err, freedom: “Every Afghan has the right to speak their mind. This is a country of free speech.”
Clearly, Karzai doesn’t agree with Fox and Friends assertion that the MOAB is equal to freedom.
Why should Afghanistan suffer in such a massive way with a bomb so big, so dangerous that they themselves call it the ‘mother of all bombs’.
— Hamid Karzai (@KarzaiH) April 16, 2017
More from the former Afghan leader, calling the bomb ‘poison’ and bad for the environment — because ISIS is all about preserving a low carbon footprint.
Local villagers said they thought the end of the world was upon them, after the U.S. dropped a MOAB on the terrorists traversing underneath the ground in elaborate tunnels.
Via Daily Caller:
“The earth felt like a boat in a storm,” one villager told The Guardian. He continued, “My ears were deaf for a while. My windows and doors are broken. There are cracks in the walls.” Achin’s Mayor Naweed Shinwari said “my relatives thought the end of the world had come.”
“Last night’s bomb was really huge, when it dropped, everywhere, it was shaking,” one resident told Reuters. He characterized the strike as a “positive move” to rid the village of ISIS fighters. One man who lived two miles from the blast area told CNN “we were all scared and my children and my wife were crying. We thought it had happened right in front of our house.”
Content originally published at iBankCoin.com
Step aside China Huishan Dairy Holdings – China’s largest dairy producer which cratered last month after a negative Muddy Waters research report brought attention to a company we knew for one year was collateralizing its cows to fund stock buybacks – and make way for what may be the next Chinese megafraud.
While China Hongqiao Group may be best known for being the world’s largest aluminum producer, it has in recent months featured just as prominently among short-seller reports who have accused the company of being a fraud. As the WSJ’s Scott Patterson writes, questions about China Hongqiao’s finances first emerged in November, when an anonymous short seller wrote on a website called Hongqiao Exposed that the company’s profits are “too good to be true.” China Hongqiao in the March 31 statement called the report “untrue and unfounded.”
A subsequent 46-page report on Feb. 28 by Emerson Analytics, a trading firm focused on Chinese stock-market fraud, disclosed more allegations of fraud involving the Chinese commodity giant.
Emerson accused China Hongqiao of “abnormally high” profits generated by underreporting production costs and disclosing electricity expenses—one of the biggest costs for aluminum producers—as much as 40% below their true cost. Emerson said it investigated Chinese electricity costs, spoke to former China Hongqiao employees and compared the company’s costs and profits with other comparable companies.
Additionally, China Hongqiao has been more profitable than some Chinese competitors. For instance, China Hongqiao earned an average operating profit margin of 27% in the past five years, compared with minus-1.7% for state-owned Aluminum Corp. of China , known as Chalco, and 5.9% for Alcoa, according to FactSet. “People were always skeptical about how they managed to be more profitable than their peers,” said Sandra Chow, a credit analyst at CreditSights.
And while China Hongqiao denied the Emerson report’s allegations and said it hired an investigative agency to look into the firm and people behind the claims, things are starting to unravel rapidly for the Chinese megacap.
As Patterson reports, China Hongqiao – the world’s biggest aluminum producer – is in trouble, locked in a feud with its accountant over fraud allegations that have forced it to suspend trading of its shares and seek help from the central government in Beijing.
Just like in the case of its cow dairy peer, the problems emerged to the surface following the bearish 3rd party reports. Just days after the Emerson Analytics note, on March 4 China Hongqiao sought assistance from a trade group, the Chinese Non-Ferrous Metals Industry Association, or CNIA, saying the short sellers’ claims of inflated profits were forcing the company’s accountant, Ernst & Young, “to adopt an extremely conservative and careful attitude.” One wonders just whose books E&Y had been reviewing until that point if it took an outside party to bring attention to potential fraud at one of its biggest Chinese clients.
From that point, it all just spiralled out of control: on March 6, Ernst & Young notified the company it had suspended its audit of its 2016 financial results, according to a March 31 statement by China Hongqiao. Ernst & Young asked the company to commission an independent investigation into the short sellers’ claims, delaying the release of the company’s annual financial results, China Hongqiao said.
With E&Y washing its hands of China Hongqiao, and without audited results, China Hongqiao said in its letter to CNIA, the company risks an investigation from Hong Kong securities regulators and a credit crunch. According to the WSJ, the company has about $10 billion in debt and could be in default on a $700 million loan unless it gets waivers from creditors, says Standard & Poor’s Global Ratings. S&P, citing the move by Ernst & Young, has downgraded China Hongqiao’s bonds a notch deeper into junk territory to B-plus. Once again, one wonders just who both E&Y and S&P were analyzing until the emergence of the short seller’s report.
To be sure, in its March 31 statement, China Hongqiao denied the short sellers’ fraud allegations, calling them “untrue and unfounded.” Ernst & Young declined to comment, but by then the market had largely smelled a rat, prompting China Hongqiao to demand both the CNIA and the Chinese government to come to its aid, warning in its March 4 letter of “serious effects” if nothing is done, including “regional systemic financial risks” and “dramatic social unrest.”
Ah yes, playing the usual assured destruction card if nothing is done card. Only in this case, the megafraud, pardon aluminum producer may have a point. You see, over the past few years, China Hongqiao drew the attention of the global aluminum market and U.S. trade officials as it soared to the pinnacle of the industry leapfrogging the production of giant competitors like Alcoa in the U.S. and United Co. Rusal PLC in Russia.
As Patterson, who has been closely following the aluminum space for years notes, the rise coincided with American allegations that Chinese companies—helped by government subsidies—flooded the world with cheap aluminum, coal and steel, depressed prices and decimated U.S. industries. U.S.-Chinese trade issues were a focus of a two-day summit last week between President Donald Trump and President Xi Jinping of China.
The problem, now that the Company’s fraud appears to have been exposed, is that China Hongqiao, a Hong Kong-listed company, employs no less than 60,000 people. A sudden collapse may indeed result in “dramatic social unrest”
There is a silver lining: as the WSJ adds, “trouble for Hongqiao could upend the aluminum industry in China and present an opportunity for American producers who say the company has been using unfair tactics to dominate the industry. It could also reinforce the broader concerns over what many view as questionable business practices by China’s big industrial giants, many of which are increasingly active on the global stage.”
* * *
Perhaps the best news from this event, should it indeed result in the insolvency of China Hongqiao, is that one of the biggest commodity zombie companies will soon be wiped out, allow competitors to take its place.
China’s aluminum output reached an estimated 31 million tons in 2016, according to the U.S. Geological Survey, more than half of global output and up 60% since 2011. That is the year China Hongqiao went public, raising $817 million. China Hongqiao’s founder, Zhang Shiping, holds an 81% stake in the company worth $5.3 billion, according to FactSet.
The U.S. government in January launched a formal complaint against the Chinese government with the World Trade Organization, accusing China of funneling artificially cheap loans from state-run banks to aluminum producers including China Hongqiao. China provides China Hongqiao with access to cheap coal, aluminum and electricity, according to the WTO complaint. The dispute shines a light on the underpinning of a Chinese aluminum boom that has roiled trade relations with the U.S.
China Hongqiao’s production capacity has almost quadrupled to 6.7 million metric tons since 2011, according to commodity researcher CRU Group. Rusal can produce 4.1 million tons of aluminum a year, Alcoa up to 3.4 million tons of aluminum a year, CRU says.
For now, it isn’t clear if the government or regulators will step in. According to the WSJ, the CNIA, the Hong Kong Securities and Futures Commission, and China’s Ministry of Industry and Information Technology, which oversees China’s industrial policies, didn’t respond to requests for comment.
The events are “very embarrassing for the Chinese and for Hongqiao,” said Paul Adkins, managing director of AZ China Ltd., a Hong Kong consultancy that tracks the Chinese aluminum industry.
Since this is just the tip of the iceberg for China’s “walking dead” commodity companies, Beijing has an option: proceed with even more bailouts, or prepare for much more embarrassment in the coming months as the veil is lifted and China’s commodity zombies – first profiled here in October 2015 – are exposed for the entire world to see.
It has become embarrassing to be an American. Our country has had four war criminal presidents in succession. Clinton twice launched military attacks on Serbia, ordering NATO to bomb the former Yugoslavia twice, both in 1995 and in 1999, so that gives Bill two war crimes. George W. Bush invaded Afghanistan and Iraq and attacked provinces of Pakistan and Yemen from the air. That comes to four war crimes for Bush. Obama used NATO to destroy Libya and sent mercenaries to destroy Syria, thereby commiting two war crimes. Trump attacked Syria with US forces, thereby becoming a war criminal early in his regime.
To the extent that the UN participated in these war crimes along with Washington’s European, Canadian and Australian vassals, all are guilty of war crimes. Perhaps the UN itself should be arraigned before the War Crimes Tribunal along with the EU, US, Australia and Canada.
Quite a record. Western Civilization, if civilization it is, is the greatest committer of war crimes in human history.
And there are other crimes—Somalia, and Obama’s coups against Honduras and Ukraine and Washington’s ongoing attempts to overthrow the governments of Venezuela, Ecuador, and Bolivia. Washington wants to overthrow Ecuador in order to grab and torture Julian Assange, the world’s leading democrat.
These war crimes committed by four US presidents caused millions of civilian deaths and injuries and dispossessed and dislocated millions of peoples, who have now arrived as refugees in Europe, UK, US, Canada, and Australia, bringing their problems with them, some of which become problerms for Europeans, such as gang rapes.
What is the reason for all the death and destruction and the flooding of the West with refugees from the West’s naked violence? We don’t know. We are told lies: Saddam Hussein’s “weapons of mass destruction,” which the US government knew for an absolute fact did not exist. “Assad’s use of chemical weapons,” an obvious, blatant lie. “Iranian nukes,” another blatant lie. The lies about Gaddafi in Libya are so absurd that it is pointless to repeat them.
What were the lies used to justify bombing tribesmen in Pakistan, to bomb a new government in Yemen? No American knows or cares. Why the US violence against Somalia? Again, no Americans knows or cares. Or the morons saw a movie.
Violence for its own sake. That is what America has become.
Indeed, violence is what America is. There is nothing else there. Violence is the heart of America.
Consider not only the bombings and destruction of countries, but also the endless gratuitous, outrageous police violence against US citizens. If anyone should be disarmed, it is the US police. The police commit more “gun violence” than anyone else, and unlike drug gangs fighting one another for territory, police violence has no other reason than the love of committing violence against other humans. The American police even shoot down 12-year old American kids prior to asking any question, especially if they are black.
Violence is America. America is violence. The moronic liberals blame it on gun owners, but it is always the government that is the source of violence. That is the reason our Founding Fathers gave us the Second Amendment. It is not gun owners who have destroyed in whole or part eight countries. It is the armed-at-taxpayer-expense US government that commits the violence.
America’s lust for violence is now bringing the Washington morons up against people who can commit violence back: the Russians and Chinese, Iran and North Korea.
Beginning with the Clinton moron every US government has broken or withdrawn from agreements with Russia, agreements that were made in order to reduce tensions and the risk of thermo-nuclear war. Washington initially covered its aggressive steps toward Russia with lies, such as ABM missile sites on Russia’s border are there to protect Europe from (non-existent) Iranian nuclear ICBMs.
The Obama regime still told lies but escalated to false charges against Russia and Russia’s president in order to build tensions between nuclear powers, the antithesis of Ronald Reagan’s policy. Yet moronic liberals love Obama and hate Reagan.
Did you know that Russia is so powerful and the NSA and CIA so weak and helpless that Russia can determine the outcome of US elections? You must know this, because this is all you have heard from the utterly corrupt Democratic Party, the CIA, the FBI, the Amerian whore media, and the morons who listen to CNN, MSNBC, NPR or read the New York Times and Washington Post.
Surely you have heard at least one thousand times that Russia invaded Ukraine; yet Washington’s puppet still sits in Kiev. One doesn’t have to have an IQ above 90 to understand that if Russia invaded Ukraine, Ukraine would not still be there.
Did you know that the president of Russia, which world polls show is the most respected leader in the world, is, according to Hillary Clinton “the new Hitler”?
Did you know that the most respected leader in the world, Vladimir Putin, is a Mafia don, a thug, a tarantula at the center of a spy web, according to members of the US government who are so stupid that they cannot even spell their own names?
Did you know that Putin, who has refrained from responding aggressively to US provocations, not out of fear, but out of respect for human life, is said to be hellbent on reconstructing the Soviet Empire? Yet, when Putin sent a Russian force against the US and Israeli trained and supplied Georgian army that Washington sent to attack South Ossetia, the Russian Army conquered Georgia in five hours; yet withdrew after teaching the morons the lesson. If Putin wanted to reconstruct the Russian Empire, why didn’t he keep Georgia, a Russian province for 300 years prior to Washington’s breakup of the Russian Empire when the Soviet Union collapsed? Washington was powerless to do anything had Putin declared Georgia to be again part of Russia.
And now we have the embarrassment of Trump’s CIA director, Mike Pompeo, possibly the most stupid person in America. Here we have a moron of the lowest grade. I am not sure there is any IQ there at all. Possibly it reads zero.
This moron, if he qualifies to that level, which I doubt, has accused Julian Assange, the world’s Premier Journalist, the person who more than anyone represents the First Amendment of the US Constitution, of being a demon who sides with dictators and endangers the security of American hegemony with the help of Russia. All because Wilileaks publishes material from official sources revealing the criminal behavior of the US government. Wikileaks doesn’t steal the documents. The documents are leaked to Wikileaks by whistleblowers who cannot tolerate the immorality and lies of the US government.
Anyone who tells the truth is by definition against the United States of America. And the moron Pompeo intends to get them.
When I first read Pompeo’s accusation against Assange, I thought it had to be a joke. The CIA director wants to revoke the First Amendment. But the moron Pompeo actually said it. https://www.rt.com/usa/384667-cia-assange-wikileaks-critisize/
What are we to do, what is the world to do, when we have utter morons as Director of the Central Intelligence Agency, as President of the US, as National Security Adviser, as Secretary of Defense, as Secretary of State, as US Ambassador to the UN, as editors of the New York Times, Washington Post, CNN, NPR, MSNBC? How can there be any intelligence when only morons are in charge?
Stupid is as stupid does. The Chinese government has said that the moronic Americans could attack North Korea at any moment. A large US fleet is heading to North Korea. North Korea apparently now has nuclear weapons. One North Korean nuclear weapon can wipe out the entirety of the US fleet. Why is Washington inviting this outcome? The only possible answer is moronic stupidity.
North Korea is not bothering anyone. Why is Washington picking on North Korea? Does Washington want war with China? In which case, is Washinton kissing off the West Coast of the US? Why does the West Coast support policies that imply the demise of the West Coast of the US? Do the morons on the West Coast think that the US can initiate war with China, or North Korea, without any consequesnces to the West Coast? Are even Amerians this utterly stupid?
China or Russia individually can wipe out the US. Together they can make North America uninhabitalbe until the end of time. Why are the Washington morons provoking powerful nuclear powers? Do the Washington morons think Russia and China will submit to threats?
The answer is: Washington is a collection of morons, people stupid below the meaning of stupid. People so far outside of reality that they imagine that their hubris and arrogance elevates them above reality.
When the first Satan 2 hits Washington, the greatest collection of morons in the world will cease to exist.
The world will breathe a huge sigh of relief.
Bring it on! Come on morons, eliminate yourselves! The rest of us cannot wait.
You will find more statistics at Statista
As Statista's Nial McCarthy details, Trump has spent six of his 12 weekends at his Florida residence, considerably more time than Obama, Bush and Clinton spent away from the White House at this stage of their respective presidencies.
When it comes to golfing, Trump has spent 17 days out on the course. After 81 days, Bill Clinton had been golfing three times while Obama and Bush left their clubs untouched. Read more on the Independent.
With markets shut on Good Friday, even as the one-two knockout punch of the worst monthly core CPI print in 7 years hit…
… coupled with a miss in March retail sales, which suffered their biggest two month drop in 2 years…
… on Sunday night traders were desperate to catch up, or rather down to, the USDJPY which was the only instrument that traded through Friday’s data dump, and which at last check was trading at 108.34, nearly 100 pips below the Friday open, sliding further in early Japanese trading as the last holdouts on the reflation trade capitulate in panic, further pressured by fears over the rapidly deterioating situation in North Korea.
As one would expect, a surge in the yen means continued weakness in the dollar, and sure enough on Sunday night, Donald Trump’s recent bid for a weaker greenback has been the market’s command.
Predictably, and contrary to virtually every sellside analyst’s prediction for ongoing levitation in interest rates, US TSY yields have tumbled across the curve, with 5-year yields down as much as 5bps at 1.72%, lowest since Nov. 18, while the benchmark 10-year yield has slide 4bps to 2.20%, also the lowest since the election.
Perhaps the one asset class where the reflation revulsion has not been observed yet is S&P futures, as the E-mini stubbornly holds out to selling pressure and is barely lower on the session following Thursday’s sharp drop.
However, while equity markets may be ignoring the moves in FX and rates, gold is hardly waiting, and on Sunday night evening was trading above $1,290/oz, the highest price since the Trump electiomn…
… and poised for a key double resistance breakout.
While the spike in gold is hardly a surprise in light of last week’s economic data and this weekend’s North Korean events, with spot not trading there was little opportunity for traders to take advantage of what many expected would be a sharp jump in the yellow metal. Except… that’s not quite true: as we noted on Friday, while spot may have be closed, physical vendors such as Ampex were happy to sell gold, and even better, at Thursday’s depressed price.
Gold arb trade: Physical dealers like Apmex are still stuck at Thursday’s gold price
— zerohedge (@zerohedge) April 14, 2017
Finally, before we forget, there was another asset class that was surging overnight: the Turkish lire, which has been on fire ever since Erdogan won the popular mandate to become dictator, and which just as Barclays predicted, would lead to a spike in the Turkish currency… if only for a the very near future.
With the North Korean “problem” front in center for the Trump administration, especially after Sunday’s failed ballistic missile launch prompting Trump’s top security advisor, Lt. Gen HR McMaster to “work with China on a range of options” to respond to the North Korean provocation, here are several charts and infographics summarizing North Korea’s conventional and nuclear potential, as well as its short and long-range military options.
In terms of most immediate short-range threats, North Korean conventional artillery by the border can penetrate somewhat into South Korea, with the biggest zone of impact stretching approximately 10 miles in. That said, according to Stratfor even areas such as the capital Seoul would be within range of some of the heavier North Korean tube and rocket artillery.
As the next chart demonstrates, under the Kim regime North Korea has conducted more ballistic missile launches than during the regimes of Kim John Un’s two predecessors combined.
As Bloomberg notes, the regime of Kim Jong Un – which has accelerated the country’s nuclear program since taking power in 2011 – is said to possess rockets that can hit South Korea and Japan with as many as 20 atomic bombs, and it’s now focused on building a long-range missile capable of hitting Washington, D.C., with a nuclear warhead.
The following Reuters chart summarizes what is known about NK’s current missile arsenal:
The next image details the maximum estimated range of any given ballistic delivery system. While there are disagreements on how far North Korea’s most advanced missiles, the Taepodong-2 and KN-14 can reach, they are widely assumed to be able to reach most parts of the US. That said, Bloomberg cites analysts who say the Taepdong-2 has been used only for launching satellites into orbit and probably wouldn’t be suitable to deliver nuclear warheads.
As Bloomberg also observes, more worrisome than the Taepodong-2 is the yet-to-be tested KN-08, a road-mobile intercontinental ballistic missile. Its range of about 11,500 kilometers (7,100 miles) which would threaten a host of major U.S. cities. At the beginning of the year, Kim said that North Korea was in the “last stage” of preparing to test-fire an ICBM—prompting U.S. President Donald Trump to tweet: “It won’t happen!”
Furthermore, during yesterday’s “Day of the sun” parade, North Korea revealed a new ICBM which according to South Korean military officials was longer than the existing KN-08 or KN-14 ICBMs, and may thus be the longest-ranged weapon in Kim’s arsenal, if indeed it is operational.
Finally, another potential threat is North Korea’s ability to deliver nukes to the Pacific seaboard via submarine. While the subs are diesel powered, and could be destroyed as soon as they left port – something US submarines are surely acutely aware of – they could target the US if they managed to get in close enough.