Financial markets are starting to worry

The risk of a default chain reaction is looming over the $3.6 trillion market for wealth management products in China.
WMPs, which traditionally funneled money from Chinese individuals into assets from corporate bonds to stocks and derivatives, are now increasingly investing in each other. Such holdings may have swelled to as much as 2.6 trillion yuan ($396 billion) last year, based on estimates from Autonomous Research this month.
The trend has China watchers worried. For starters, it means that bad investments by one WMP could infect others, causing a loss of confidence in products that play an important role in bank funding. It also suggests WMPs are struggling to find enough good assets to meet their return targets. In the event of widespread losses, cross-ownership will create more uncertainty over who’s vulnerable -- a key source of panic in 2008 when soured U.S. mortgage securities triggered a global financial crisis.
“There’s abundant liquidity in the financial system, but a scarcity of high-yielding assets to invest in,” said Harrison Hu, the chief Greater China economist at Royal Bank of Scotland Plc in Singapore. “All the risks are accumulating in an overcrowded financial system.”

Exploding non-traditional credit

As many as 15 publicly traded Chinese lenders, large and small, report roughly $500 billion of such debt between them, which they hold not as loans but as receivables from shadow banking products. While the traditional credit business of these banks is 16 times bigger, receivables have jumped sixfold in three years. Explosive growth of this type usually ends badly. It's hard to see why it'll be different for the People's Republic.

Asia catching cold

Those nearest to China are among the hardest hit as growth in the world's second-largest economy grinds to the slowest pace in a quarter century.
Hong Kong, Macau, and Taiwan all saw their economies shrink in the first quarter, while Mongolia's commodities-fueled boom has faltered. And the bad news doesn't stop there.
"The ripples are likely to spread further out," said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong. "As China's economy continues to cool, it will provide an ongoing drag on global output, curtailing inflation pressures in the process and anchoring interest rates in the process. The economic malaise currently experienced by China's immediate neighbors, therefore, is only a portend of a milder version to afflict economies elsewhere as China comes off the boil."

Irony

Brazil's Transparency Minister Fabiano Silveira resigned on Monday after leaked recordings suggested he tried to derail a sprawling corruption probe, the latest cabinet casualty impacting interim President Michel Temer's administration.
Silveira, the man Temer tasked with fighting corruption since he took office on May 12, announced his plans to step down in a letter, according to the presidential palace's media office. No replacement for Silveira has yet been named.
Silveira and Senate President Renan Calheiros became the latest officials ensnared by leaked recordings secretly made by a former oil industry executive as part of a plea bargain. The same tapes led to the resignation last week of Romero Jucá, whom Temer had named as planning minister.

It don't work

But how effective are those “decapitations” in the long run? The verdict is far from clear and, to an extent, depends on the size and cohesion of the targeted group.
Both the 2011 raid on Osama bin Laden’s compound in Pakistan and the targeting of Mullah Mansour on a Pakistani road were major successes for U.S. intelligence and the Pentagon.
Al Qaeda’s central command, a relatively tight international terror network now led by Ayman al-Zawahiri, has been in decline since bin Laden’s death. It has been unable to fully recover from the blow or to mount major attacks against the West.
But the experience is less encouraging for wide-scale insurgencies such as the Afghan Taliban. While such decapitations can provide a short-term gain, they rarely change the course of the conflict—and frequently backfire if not accompanied by a much broader, resource-intensive involvement of a kind the White House has been loath to pursue.

a sign of the times

During her first year, she faced tuition and expenses that ran nearly $50,000, even after a scholarship. So she decided to check out a dating website that connected women looking for financial help with men willing to provide it, in exchange for companionship and sex — a "sugar daddy" relationship as they are known.
Now, almost three years and several sugar daddies later, Kashani is set to graduate from Villanova University free and clear, while some of her peers are burdened with six-digit debts.

new TISA leak

The publication follows a high-profile leak by Greenpeace earlier this month of a trove of chapters of the proposed Transatlantic Trade and Investment Partnership (TTIP) between the United States and Europe. Given that congressional approval of the Trans-Pacific Partnership (TPP) is on the rocks, as the EU-Canada Comprehensive Economic and Trade Agreement (CETA) is in those countries, and given that public opposition to the TTIP is on the rise, negotiators had hoped that the TISA could slide by under the public radar. This leak makes that possibility even more remote.

The New Provisions annex would restrict the job-stimulating localization requirements that governments can place on foreign services providers. These proposals, which are more extreme than existing free trade/investment agreements, would make it harder for all TISA countries to effectively regulate these companies — including potentially in the finance sector. And they would restrict developing countries’ ability to regulate foreign investment to promote development the way the industrialized TISA countries did when they were developing, according to an extensive analysis by Sanya Reid Smith, legal adviser to the Third World Network in Geneva.

The U.S. Treasury Department and the Office of the U.S. Trade Representative yesterday revealed a plan to go beyond the TPP in terms of localization requirements on financial services in the proposed TISA, to appease major banking industry corporations and the members of Congress who represent them.

This HuffPo article was taken down

James Comey and The FBI will present a recommendation to Loretta Lynch, Attorney General of the Department of Justice, that includes a cogent argument that the Clinton Foundation is an ongoing criminal enterprise engaged in money laundering and soliciting bribes in exchange for political, policy and legislative favors to individuals, corporations and even governments both foreign and domestic.
...
Here’s what we do know. Tens of millions of dollars donated to the Clinton Foundation was funneled to the organization through a Canadian shell company which has made tracing the donors nearly impossible. Less than 10% of donations to the Foundation has actually been released to charitable organizations and $2M that has been traced back to long time Bill Clinton friend Julie McMahon (aka The Energizer). When the official investigation into Hillary’s email server began, she instructed her IT professional to delete over 30,000 emails and cloud backups of her emails older than 30 days at both Platte River Networks and Datto, Inc. The FBI has subsequently recovered the majority, if not all, of Hillary’s deleted emails and are putting together a strong case against her for attempting to cover up her illegal and illicit activities.

Brexit about to become reality?

Public opinion has shifted towards the UK leaving the EU, two Guardian/ICM polls suggest as the referendum campaign picks up pace – with voters split 52% -48% in favour of Brexit, whether surveyed online or by phone.
Previous polls have tended to show voters surveyed online to be more in favour of Britain leaving the EU. But in the latest ICM research, carried out for the Guardian, both methodologies yielded the same result – a majority in favour of leaving.