en Largest US Health Insurer Exits California, Illinois Obamacare Markets <p>Just over a month ago, we reported that in addition to Georgie, Arkansas, Michigan and Oklahoma, the largest US health insurer UnitedHealthcare announced it would also depart the following "Affordable" Care Act state exchanges: Connecticut, North Carolina; Nebraska, Pennsylvania and Texas. That, however, was just a preview of what's to come, because on April 19, <a href="">UnitedHealthcare made its divorce with Obamacare complete </a>when it announced plans to exit most of the Affordable Care Act state exchanges where it currently operates by 2017. And earlier today, United continued executing on this warning, when it first announced that it would stop offering Affordable Care Act plans in Illinois in 2017 followed promptly by news UnitedHealthcare was abandoning California at the end of the year as well. </p> <p>As <a href="">PBS reports</a>, while United announced in April it was dropping out of all but a handful of 34 health insurance marketplaces it participated in, the company had not discussed its plans in California. UnitedHealth’s pullout also affects individual policies sold outside the Covered California exchange, which will remain in effect until the end of December. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“United is pulling out of California’s individual market including Covered California in 2017,” said Amy Palmer, a spokeswoman for the state exchange.</p> <p>&nbsp;</p> <p>It’s expected that UnitedHealth will continue offering coverage to employers in California and to government workers and their families through the California Public Employees’ Retirement System.</p> </blockquote> <p>Amy Palmer, a spokeswoman for the state exchange said UnitedHealthcare policyholders will know their options for 2017 coverage when health plans and rates for next year are announced in July. It is safe to say any "options" will not be cheap. </p> <p>Concurrently, the company also announced it will stop offering Affordable Care Act plans in Illinois in 2017. According to the <a href="">Tribune</a>, the departure of the insurance company will reduce the number of coverage options for consumers in 27 counties. Like in California, Illinois members will have access to their benefits through the end of the year. The change does not affect the company's group insurance business or Medicare plans.</p> <p>Furthermore, on Tuesday, UnitedHealthcare disclosed on a website dedicated to insurance brokers that it plans to offer on-exchange plans in only three states — Nevada, New York and Virginia. A company spokeswoman confirmed that it will withdraw from the Illinois exchange.</p> <p>Critics of the Affordable Care Act have seized on the company’s exit, state by state, as further evidence the health-law insurance exchanges aren’t sustainable financially and that premiums will rise even higher for consumers.</p> <p>The Obama administration has countered that the number of health plans offering exchange policies has increased since the 2014 launch, and that it expects the individual market will continue to stabilize as adjustments are made.</p> <p>Unfortunately, as we showed recently, the critics so far have been spot on, and as the <a href="">WSJ reported recently</a>, health insurance premiums are set to skyrocket just in time for the election, creating a major hurdle for Hillary days ahead of the election. </p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="864" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="240" height="142" alt="" src="" /> </div> </div> </div> Illinois Medicare Michigan Obama Administration Obamacare Oklahoma Tribune Wed, 01 Jun 2016 01:33:58 +0000 Tyler Durden 562437 at Yuan Tumbles As China PMI Miraculously Hugs The Flatline Despite Steel Industry Orders Crash <p><em><strong>Since May 2012, China Manufacturing PMI has miraculously stayed within a 1 point range of the knife-edge 50 level between contraction and expansion.</strong></em> May 2015 just printed 50.1, the same as April with New Orders weaker and business activity expectations (hope) tumbling to 4 month lows. The Steel Industry PMI collapsed from 57.3 to 50.9 with <strong>New Steel Orders collapsing from 65.6 to 52.7 - the biggest monthly drop in record</strong>. And while <strong>non-manufacturing PMI remained in 'expansion territory at 53.1, it fell back from a brief bounce in April</strong> with employment and business expectations both weaker. For now, equity markets are unreactive but offshore Yuan is tumbling on the news, not helped by a sizable devaluation in the official fix.</p> <p>The magic of manufacturing data... as non-manufacturing slowly catches down...</p> <p><a href=""><img src="" width="600" height="314" /></a></p> <p>&nbsp;</p> <p>Disappointment triggering more offshore Yuan selling...</p> <p><a href=""><img src="" width="600" height="312" /></a></p> <p>&nbsp;</p> <p>Not helped by yet another devaluation by PBOC...</p> <ul> <li><strong>*CHINA SETS YUAN FIXING AT 6.5889 VS 6.5790 DAY EARLIER</strong></li> <li><strong>*PBOC CUTS YUAN FIXING TO LOWEST LEVEL SINCE 2011 FOR THIRD DAY</strong></li> </ul> <p><a href=""><img src="" width="600" height="323" /></a></p> <p><em>Charts: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="964" height="505" alt="" src="" /> </div> </div> </div> China Equity Markets Yuan Wed, 01 Jun 2016 01:19:57 +0000 Tyler Durden 562436 at Japan Is First To Panic; Won’t Be The Last <p><a href=""><em>Submitted by John Rubino via,</em></a></p> <p>The most widely-reported result of the recent G-7 meeting was Japan&rsquo;s attempt to convince the other major economies to admit that a crisis is imminent and take appropriately radical steps.<strong> The response seems to have been a bunch of blank stares. </strong>As India&rsquo;s Business Standard noted:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><h2><a href="">G7 pact offers minimal cover for Abenomics reset</a></h2> <p>A Group of Seven compromise offers minimal cover for Shinzo Abe. The Japanese prime minister&rsquo;s plan to revitalize the world&rsquo;s third-largest economy needs fresh impetus. Abe didn&rsquo;t get as much international backing as he might have liked from hosting the rich nations&rsquo; club. But, the summit communique can, just about, be spun his way.</p></blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Abe&rsquo;s counterparts, understandably, do not share his view that the world risks another Lehman Brothers-style financial crisis.</strong> That is important because Abe has inexplicably committed to raising the country&rsquo;s sales tax next April, a surefire way to choke off recovery &ndash; unless a shock of this scale emerges.</p></blockquote> <p>So Japan &mdash; which, remember, has already borrowed eye-popping amounts of money, increased its central bank balance sheet by more as a percent of GDP than have either the Fed or ECB, and pushed interest rates on most of its government bonds into negative territory, all to no avail &mdash; <strong>has decided to act on its (manifestly justified) sense of panic by starting a new round of deficit spending</strong>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><h2><u><a href="">Japan&rsquo;s Abe Plans Up to $90.7 Billion Stimulus, Nikkei Says </a></u></h2> <p>(Bloomberg) &ndash; Japan Prime Minister Shinzo Abe plans to propose a fiscal stimulus package of as much as 10 trillion yen ($90.7 billion) after warning Group of Seven leaders that the global economy faces significant risk of another crisis, according to the Nikkei newspaper.</p></blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Abe will seek a second supplementary budget worth 5 trillion yen to 10 trillion yen after July&rsquo;s upper-house election, the Nikkei reported Saturday without attribution. Proposals will include accelerating the construction of a magnetic-levitation train line from Nagoya to Osaka, issuing vouchers to boost consumer spending, increasing pay for child-care workers and setting up a scholarship fund, the Nikkei said. </p><p>&nbsp;</p> <p>&ldquo;When you want to get the economy going, as long as demand in Asia is weak, you need additional public spending,&rdquo; Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo, said by phone. &ldquo;Since private spending is still not picking up, the government is simply taking up the slack.&rdquo;</p> <p>&nbsp;</p> <p>The stimulus package would be the second this fiscal year after Japan approved a 778 billion yen supplementary budget this month to aid recovery from earthquakes in the Kumamoto region.</p> </blockquote> <p>And about that tax increase&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><h2><u><a href="" target="_blank">Japan Abe set to delay sales tax hike by one-three years &ndash; sources</a></u></h2> <p>(Reuters) &ndash; Japanese Prime Minister Shinzo Abe will postpone a sales tax hike planned for next year, perhaps by as much as three years, government sources say, a move he will justify as part of G7 efforts to avert another global financial crisis.</p></blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>While the tax hike was seen as critical to reining in Japan&rsquo;s massive public debt, Abe and his aides have signalled the chance of deferring it as Japan&rsquo;s economy skirts recession and a threat of deflation re-emerges ahead of summer upper house elections. </p><p>&nbsp;</p> <p>&ldquo;We&rsquo;ve reached a global agreement to cooperate to avoid another big crisis from erupting &hellip; As G7 chair, Japan will spearhead such moves to contribute to the global economy using all policy tools available,&rdquo; Abe told reporters after the Group of Seven (G7) leaders&rsquo; summit in western Japan on Friday.</p> <p>&nbsp;</p> <p>&ldquo;<strong>We must reignite powerfully the engine of Abenomics</strong>. That undoubtedly would include a decision on what to do with the sales tax hike,&rdquo; he said, offering his strongest hint yet that next year&rsquo;s tax hike will be delayed.</p> </blockquote> <p><u><strong>What does this mean? In a nutshell, the next phase of the global economic crisis has begun. </strong></u>First, governments responded to the 2000 tech stock crash with lower interest rates and big deficits. Then they responded to the housing/banking/derivatives bust of 2008 with even lower interest rates, bigger deficits and experiments like QE. <em>Then</em> they responded to the resulting anemic recovery with negative interest rates and more QE.</p> <p>None of the above has produced the kind of growth in the US, Europe or Japan that slows the upward march of debt/GDP, which means everyone is still digging their own financial graves. Since this is not an acceptable long-term strategy (eventually the sides of the hole cave in and bury you), something else has to be tried by the people who hope for re-election a few years hence. So now we&rsquo;re back to massive deficits, but with a negative interest rate twist. <strong>Think about it: When a government issues negative-rate debt, <em>it earns a profit</em> on the transaction. And when it sells its debt to its own central bank it in effect owes the money to itself.</strong> A site called Forex Live just published an interesting analysis of this unprecedented situation:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><h2><u><a href="" target="_blank">A paradigm shift is under way on deficits</a></u></h2> <p><strong>If you can print your own money, you can issue unlimited amounts. The only risks are inflation and a decline in the currency.</strong></p></blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>It just so happens that inflation and a decline in the currency are exactly what many governments want. </p><p>&nbsp;</p> <p>In the developed world, inflation is non-existent and the currency war rages. The trump card in that game is default via monetization and it&rsquo;s coming.</p> <p>&nbsp;</p> <p>The dominant ethos of the past 25 years has been a drive towards fiscal discipline. Politicians and political commentators have built their reputations and careers as misers. There is something inherently, almost pathologically wrong about defaulting.</p> <p>&nbsp;</p> <p>That will all change.</p> <p>&nbsp;</p> <p><strong>The idea of default sounds like it would create panic; if not in the streets then in markets. But it&rsquo;s easier than you might assume and it will happen sooner than you think.</strong></p> <p>&nbsp;</p> <p>The hard part is already done. It&rsquo;s simply a matter of taking the debt the central bank already owns and writing it off. To ease the shock value of it, the debt will simply be converted into bonds the central bank will continue to &lsquo;own&rsquo; but will have 0% coupons and no maturity.</p> <p>&nbsp;</p> <p><u><strong>Japan will be the first to do it</strong></u></p> <p>&nbsp;</p> <p><strong>Japan is a demographic nightmare and has been unable to stir inflation for the past 20 years despite zeroed out rates. The debt-to-GDP ratio is a mind-blowing 227.9% with a fresh stimulus budget coming. There is no way out.</strong></p> <p>&nbsp;</p> <p>At the moment, the BOJ owns 35% of Japan&rsquo;s government debt and at the current pace of buying it will hit 63.3% at the end of 2020. With the stroke of a pen, all that could disappear.</p> <p>&nbsp;</p> <p>I don&rsquo;t even think it would be disruptive. The central bank could launch a new round of QE at the same time as the announcement and keep control of what&rsquo;s left of the bond market. At the moment, Japanese 10-year are yielding -0.11%. The means you have to pay interest to the government just so they&rsquo;ll give you your money back in 10 years. Almost everyone who owns Japanese bonds is an insurance company or pension fund that has no other choice.</p> <p>&nbsp;</p> <p><u><strong>How do markets react</strong></u></p> <p>&nbsp;</p> <p>Governments face hard choices but they will find that monetization is far easier than Eurozone-style austerity (how many governments won re-election after that?) or stalled out growth.</p> <p>&nbsp;</p> <p><strong>Certainly in the first episode there will be some worries in markets. Gold will undoubtedly rally and the currency will decline. It may even create some inflation.</strong></p> <p>&nbsp;</p> <p>But like QE, the first forays will be small and governments will quickly fall in love with the ability to spend in ever-larger amounts.</p> </blockquote> <p><strong>This is disturbing on a lot of levels, but it&rsquo;s also quite conceivable. </strong>When governments figure out that in a world of deflation (caused by the industrial overcapacity and bad debt from their previous policy mistakes) they really can borrow and spend whatever they want &mdash; and if it causes inflation, well, great, <em><strong>they win the currency war &mdash; then the floodgates will open.</strong></em></p> <p>Japan, as it has with past monetary and fiscal insanities, is leading the way. And if history is any guide the rest of us will follow along shortly.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="205" height="79" alt="" src="" /> </div> </div> </div> Abenomics Bond default Deficit Spending Global Economy India Japan Lehman Monetization Newspaper Nikkei None Recession recovery Reuters Yen Wed, 01 Jun 2016 01:00:00 +0000 Tyler Durden 562429 at Housekeeping Note On Site Redesign <p>As readers may have noticed, there have been some cosmetic changes to the layout of the website.</p> <p>First and foremost, we responded to readers' repeated requests and have finally added a mobile version of the website. </p> <p>Second, we have revised the desktop version of the site in a move we hope will make the site faster, as well as more resilient to heavy traffic outages. </p> <p>We have also changed the formatting of the comment section to be able to accommodate more indented comments as well as added a "reply-to" functionality within the comments.</p> <p>There are ongoing fixes we will implement over the next hours to restore full functionality, as well as improve speed. </p> <p>Over the next few weeks we will be rolling out further modest changes to streamline the site. </p> <p>This is a work in progress: as such, we are willing to listen to readers' constructive suggestions on how to improve the browsing experience. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1024" height="596" alt="" src="" /> </div> </div> </div> Housekeeping Wed, 01 Jun 2016 00:31:30 +0000 sacrilege 562431 at Not Just Trump: Immigrants Coming To The US Are Banking On A Catch & Release Program <p>As we <a href="">reported last week</a>, a looming Trump presidency has generated a <strong>surge in immigrants trying to cross the southern border of the United States.</strong></p> <p><a href=""><img height="384" src="" width="600" /></a></p> <p>From October 2015 to March of this year, <strong>the US Border Patrol apprehensions averaged 330 Central Americans a day, an increase of 100 percent over the same period a year earlier</strong> according to the Pew Research Center. The issue has even prompted Homeland Security Secretary Jeh Johnson to travel to Central America to remind everyone in person that the US border is not open.</p> <p>&quot;I am here today to send a message that our borders in the United States are not open to irregular migration&quot; Johnson said.</p> <p>Despite the nice speech from Jeh Johnson, family holding facilities are full on the southern border, and the need for supplies at places such as Catholic Charities of the Rio Grande Valley has skyrocketed.</p> <p>&quot;It&#39;s like 50, 60, 100, 200 backpacks that we need every day; 200, or 50 or 80 deodorants or shoes. <strong>Can you imagine coming up with 50, 60, 80 pairs of shoes every day? It&#39;s amazing</strong>.&quot; said Sister Norma Pimentel, director of Catholic Charities of the Rio Grande Valley.</p> <p><a href=""><img height="294" src="" width="600" /></a></p> <p><u><strong>Border Patrol agents are becoming frustrated, and the root cause of the frustration is that there is a catch and release program taking place</strong></u>. The time it is taking for agents to round up and process those who turn themselves in asking for asylum (just to release them into the US) is taking away from capturing the immigrants who aren&#39;t looking to turn themselves in to anyone - drug traffickers for example.</p> <p>Union president Brandon Judd <a href="">testified</a> at a congressional hearing that if immigrants are arrested and ask for asylum, they&#39;re being allowed to get processed and move along on their journey to join family members elsewhere in the US while they await their hearing. The hearing itself could take up to two years, as the courts<a href=""> currently</a> have a backlog of nearly a half a million cases. The reason being given is that the US court rulings restrict the agency&#39;s ability to detain those arrested.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&quot;What happens is if you are arrested in the United States and you ask for any sort of asylum, <strong>what we do is we will process you, and we will walk you right out our front door, give you a pat on the back and say, &#39;Welcome to the United States.</strong>&#39; And they&#39;re good to go,&quot; Judd testified at the hearing.</em></p> </blockquote> <p>Chris Cabrera, a south Texas Border Patrol agent and union official says all the families surrendering to seek asylum are distracting his member agents, when they should be chasing drug and human traffickers.</p> <p>&quot;<strong>Our agents are so caught up with rounding up the ones that are turning themselves in, corralling them and getting them to the station, that we don&#39;t have adequate resources to get the ones that are trying to get away,</strong>&quot; Cabrera said.</p> <p>And as it turns out, <strong>it&#39;s not just a looming Trump presidency that is driving the surge in immigrants to the US</strong>, it&#39;s an expectation of the immigrants that when they are arrested, they&#39;ll be processed and released, free to go in the United States.</p> <p>From <a href="">WCQS</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>Central Americans risk the journey because they know most of them will be admitted at the U.S. border and not locked up, as are immigrants from Mexico who cross illegally.</em></strong></p> <p>&nbsp;</p> <p><em>Wendy Villanueva is from Honduras, traveling with her toddler daughter. The 21-year-old says they fled Colón Province when gangsters extorted her small clothing business and threatened to kill her if she didn&#39;t pay up.</em></p> <p>&nbsp;</p> <p><em>Villanueva and her daughter took buses to the Texas-Mexico border and surrendered to U.S. agents on the international bridge at Brownsville. They&#39;re headed to North Carolina to join her mother and sisters, who are also seeking amnesty.</em></p> <p>&nbsp;</p> <p><em>&quot;According to our countrymen who are here, and from what they learned, we expect that the authorities will also give us permission to remain here,&quot; she says, waiting to collect some new clothes and hygiene items at the shelter for the next leg of her journey north. </em></p> </blockquote> <p>* * *</p> <p>Whatever one&#39;s politics are on the issue, as we say time and time again, if the economy isn&#39;t performing well, violence will continue and so will the surge of immigrants trying to find safety and a better way of life. <em><strong>It&#39;s also worth noting, that no matter how effective a wall may be, if there is a catch and release program taking place it defeats the entire purpose of building a wall in the first place.</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1320" height="845" alt="" src="" /> </div> </div> </div> Mexico Wed, 01 Jun 2016 00:30:00 +0000 Tyler Durden 562412 at They're Baaaack: Gas-Guzzlers Take Over The Roads Again <p>Sadly, everyone has seemingly forgotten that the lessons of the past can help prepare us for the future. For example, one would assume that the sting of owning an truck or SUV during the financial crisis would stick with consumers long enough to deter them from falling back into the same trap again just because oil was trading lower... then again, just as assuming market participants would remember that time period, <strong>one would be wrong.</strong></p> <p>So here we are once again. <strong>Last year, SUVs outsold any other type of passenger vehicle in Europe for the first time, and the trend has continued into 2016</strong> as Bloomberg <a href="">reports</a>.</p> <p>The same is occurring in the <strong>US, as today light trucks, vans, and SUVs account for 60 percent of the total vehicle sales</strong>, a level only reached briefly in 2005 when Brent averaged $55/bbl - meaning that once again low oil prices have lured consumers back into buying less fuel efficient vehicles.</p> <p>In April, the average car sold achieved a fuel economy of 25.2 mpg, down from a peak of 25.8 mpg set in August 2014. As Bloomberg <a href="">notes</a>, at current trends, <strong>2016 will mark the first drop in average US fuel economy since at least 2007</strong>.</p> <p>&quot;Fuel economy improvement is really flatlining. <strong>The gains completely stopped right at the same time that oil prices started to decline</strong>&quot; said Sam Ori, executive director of Energy Policy Institute at the University of Chicago.</p> <p><a href=""><img height="365" src="" width="600" /></a></p> <p>&nbsp;</p> <p>As further evidence that consumers having amnesia, light trucks as a share of total US vehicle sales is also hovering around record highs since 1976</p> <p><a href=""><img height="302" src="" width="600" /></a></p> <p>&nbsp;</p> <p>China is not immune to this of course, as according to official <a href="">data</a>, <strong>vehicles such as light trucks and SUVs accounted for almost 35 percent of Chinese passenger sales in April, up from 10 percent in 2010, and less than 5 percent a decade ago</strong>.</p> <p>&quot;<span style="text-decoration: underline;">Consumers are thinking that a period of plentiful oil supply is here to stay</span>&quot; says Christof Ruhl, head of research at the Abu Dhabi Investment Authority.</p> <p>US demand for fuel peaks between the Memorial Day holiday in late May and Labor Day in early September when Americans usually take vacations, so given the trend of consumers going to bigger, less fuel efficient cars, it&#39;s easy to determine that demand will perhaps help oil prices rise during that time. However, a lot depends on the global economy and the supply side of things, neither of which look to be helpful at the moment, as <a href="">US</a> and <a href="">China</a> manufacturing PMIs are slumping and Saudi Arabia <a href="">plans to boost production even more</a>.</p> <p>All we can say to this is that just as with the last financial crisis, <em><strong>cheap oil is there until its not, and vehicle manufacturers have demand for all of those trucks and SUVs until another crisis hits and they find themselves back in need of a bailout for over committing to those product lines.</strong></em></p> <p>As for the markets, well, we know how that <a href="">ends</a> as well.</p> <p>Which reminds us of Rudyard Kipling&#39;s <a href="">poem</a> &quot;The Gods Of The Copybook Headings&quot;, specifically this portion:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew</em></strong><br /><em>And the hearts of the meanest were humbled and began to believe it was true</em><br /><strong><em>That All is not Gold that Glitters, and Two and Two make Four</em></strong><br /><em>And the Gods of the Copybook Headings limped up to explain it once more.</em></p> <p>&nbsp;</p> <p><em>As it will be in the future, it was at the birth of Man</em><br /><em>There are only four things certain since Social Progress began.</em><br /><em>That the Dog returns to his Vomit and the Sow returns to her Mire,</em><br /><strong><em>And the burnt Fool&#39;s bandaged finger goes wabbling back to the Fire;</em></strong><br />&nbsp;</p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1629" height="820" alt="" src="" /> </div> </div> </div> Abu Dhabi China Global Economy Saudi Arabia Tue, 31 May 2016 23:30:00 +0000 Tyler Durden 562424 at Bill Kristol's Independent Pick To Take On "Roaring Jackass" Donald Trump Revealed <p>As <a href="">reported earlier</a>, over the weekend <em>Weekly Standard </em>editor and prominent neocon, Bill Kristol, one of Trump's most vocal detractors, announced that he would challenge Trump's presidential candidacy by unveiling&nbsp; an independent candidate, "asn impressive one, with a strong team and a real chance." This led to another heated exchange between Trump and Kristol, with Trump calling the conservative voice a "loser" and a "dummy"</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">If dummy Bill Kristol actually does get a spoiler to run as an Independent, say good bye to the Supreme Court!</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="">May 29, 2016</a></p></blockquote> <script src="//"></script><p>This is turn led to another response by Kristol who said on Twitter that "I gather Donald Trump said I'm a loser", adding that "I've won some and I've lost some, but one thing I've always tried not to be is a roaring jackass."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">I gather Donald Trump said I'm a loser. I've won some and I've lost some, but one thing I've always tried not to be is a roaring jackass.</p> <p>— Bill Kristol (@BillKristol) <a href="">May 31, 2016</a></p></blockquote> <script src="//"></script><p>The feud between the Trump and Kristol aside, the political world has been engaged in a fevered guessing game over whom that person might be.&nbsp; </p> <p>Shortly after Kristol's Sunday tweet, he left for Israel and has been avoiding the press, speaking only through a series of tweets taunting Trump for responding to Kristol’s Sunday tweet. Speculation had centered on 2012 Republican nominee Romney, freshman Nebraska senator Ben Sasse, and other current and former state and federal office-holders.</p> <p>The answer was <a href="">revealed by Bloomberg </a>late this afternoon, which reported that according to two Republicans intimately familiar with Bill Kristol’s efforts to recruit an independent presidential candidate to challenge Donald Trump that the person Kristol has in mind is <strong><em>David French</em></strong> - whose name the editor of the Weekly Standard floated in the current issue of the magazine.</p> <p><img src="" width="400" height="400" /></p> <p>Who is David French? Bloomberg has the details?</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>French is a veteran of Operation Iraqi Freedom. According to the website of National Review, where French is a staff writer, he is a constitutional lawyer, a recipient of the Bronze Star, and an author of several books who lives in Columbia, Tenn., with his wife Nancy and three children. </p> <p>&nbsp;</p> <p>Reached in Israel late Tuesday afternoon, Kristol declined to comment on his efforts to induce French to run. The two Republicans confirmed that French is open to launching a bid, but that he has not made a final decision. One of the Republicans added that French has not lined up a vice-presidential running mate or significant financial support. However, according to this person, some conservative donors look favorably on the prospect of French entering the fray.</p> </blockquote> <p>In Kristol’s piece in the Standard’s June 6 issue, he argued that “the fact of Trump's and Clinton's unfitness for the Oval Office has become so self-evident that it's no longer clear one needs a famous figure to provide an alternative.” Bloomberg adds that after mentioning Mitt Romney and other possibilities such as Judd Gregg and Mel Martinez, Kristol invoked French’s name and résumé, writing, "To say that he would be a better and a more responsible president than Hillary Clinton or Donald Trump is to state a truth that would become self-evident as more Americans got to know him."</p> <p>Bloomberg concludes that according to one person deeply involved in the efforts to recruit an independent challenger, the search has focused on individuals who have one or more of the following three traits seen as vital for credibly launching such a bid: fame, vast wealth, and elective experience. </p> <p>We fail to see precisely which of the three traits French possesses. And now we await the imminent response from Trump. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="400" height="400" alt="" src="" /> </div> </div> </div> Donald Trump Fail Israel Twitter Twitter Tue, 31 May 2016 23:05:38 +0000 Tyler Durden 562428 at The Stunning Idiocy Of Steel Tariffs <p><a href=""><em>Submitted by Pater Tenebrarum via,</em></a></p> <h3><u><strong>Victims of the Boom-Bust Cycle</strong></u></h3> <p><strong>The world is drowning in steel &ndash; there is huge overcapacity in steel production worldwide.</strong> This is a direct result of the massive global credit expansion that has taken place over the past 15 years. Much of this capacity is located in China, but while the times were good, iron ore and steel production (and associated lines of production) was expanded everywhere else in the world as well.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="steel-1" class="aligncenter wp-image-45107" src="" style="width: 599px; height: 373px;" /></p> <p style="text-align: center;">Steel factory</p> <p><strong>Heavy industries like steel, which represent quite a high stage of the production structure, i.e. are temporally far removed from the consumption stage, are especially prone to falling prey to boom-bust cycles.</strong> In a fiat money system run by central planning agencies and supplemented by a fractionally reserved banking system, the amplitude of business cycles will be especially pronounced (readers may have noticed that systemic crises have become increasingly severe with every new iteration).</p> <p>Experience shows that there exists a trade-off between frequency and amplitude: <em><strong>constant central bank intervention has lowered the frequency of economic downturns, but has it has made the crises much worse when they do strike, as imbalances have more time to accumulate.</strong></em></p> <p>Moreover, the economy&rsquo;s long term wealth creation capacity is slowly but surely fatally undermined, as more and more capital is consumed. This is evidenced by the fact that economic growth is increasingly giving way to stagnation nearly everywhere in the world.</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="" target="_blank"><img alt="1-Steel rebar monthly" class="aligncenter wp-image-45103" src="" style="width: 600px; height: 408px;" /></a></p> <p style="text-align: center;">Steel rebar futures prices in Shanghai, monthly &ndash; click to enlarge.</p> <p>&nbsp;</p> <p><strong>It is easy to see that the steel industry has been one of the focal points of the last cycle &ndash; all we need to do is look at the price history of steel.</strong> The longest continuous chart of steel rebar futures we could find is the one shown above, so we are supplementing it with a longer term line chart that shows steel prices&nbsp; from 2003 to 2014.&nbsp; As can be seen, current prices are well below the level they inhabited in 2003. In short, the entire price rise of the &ldquo;bubble period&rdquo; has been erased.</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="" target="_blank"><img alt="2-Steel prices long term" class="aligncenter wp-image-45104" src="" style="width: 601px; height: 371px;" /></a></p> <p style="text-align: center;">Steel prices from 2003 to 2014 &ndash; the red line on the right hand side indicates current price levels &ndash; click to enlarge.</p> <p>&nbsp;</p> <h3><u><strong>The Return of &ldquo;Just Prices&rdquo;</strong></u></h3> <p><strong>As a result of all this, the steel industry (along with many other commodity industries) is facing a painful time of liquidation and reorganization. </strong>On the other hand, lower steel prices are obviously benefiting all steel users, such as the car industry and the construction industry, to name two important ones. Consumers obviously stand to benefit greatly from this as well, as the latter industries will have more scope to lower the prices of <em>their</em> products.</p> <p>It seems glaringly obvious that in Western countries, the industries <em>benefiting</em> from low steel prices are far larger and far more important than the steel industry. And it should go without saying that <em>anything</em> that benefits consumers should be enthusiastically welcomed. In fact, the benefit to consumers should be the <em>only</em> standard by which such situations should be judged.</p> <p><strong>Moreover, lower steel prices are an important signal to the marketplace &ndash; they tell entrepreneurs that investments need to be shifted. There is no point in tying up factors of production in steel factories &ndash; it will be far better if they are deployed elsewhere.</strong></p> <p>All of this makes it utterly absurd that the EU, the US and China have begun slapping each other with massive tariffs on steel imports over the past several months (here are links to articles giving some color on the moves made by <a href="">the EU</a> and the <a href="">retaliatory moves</a> made <a href="">by China</a>). The latest event in this comedy of economic error is a massive <a href="">increase of tariffs introduced by the US commerce department</a> that involves not only China, but several more countries:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;The U.S. Department of Commerce (&ldquo;DOC&rdquo;) has made its final decision on anti-dumping investigations on imports of corrosion-resistant steel and concluded that China, India, Italy, South Korea and Taiwan are selling these products in the U.S. market below their fair values and therefore, are subject to anti-dumping duties.</em></strong> <strong><em>The ruling marks yet another major step in stemming the torrent of unfairly-traded foreign imports.</em></strong></p> <p>&nbsp;</p> <p>[&hellip;]</p> <p>&nbsp;</p> <p>The biggest U.S. steel producers <em>[five of them all in all, ed note]</em>, in June 2015, filed anti-dumping and countervailing duty petitions with the U.S. International Trade Commission (USITC) and the DOC against five countries accused for illegally dumping cheap corrosion-resistant steel.</p> <p>&nbsp;</p> <p>[&hellip;]</p> <p>&nbsp;</p> <p>Imports of corrosion-resistant steel from China, India, Italy, South Korea, and Taiwan were valued at an estimated $500.3 million, $219.6 million, $110 million, $509.1 million, and $534.4 million, respectively, in 2015 (combined value of nearly $1.9 billion). <strong><em>These products are being illegally dumped by foreign steel producers in the American market at unfairly low prices</em></strong> that significantly undercut the prices of U.S. steel makers.</p> <p>&nbsp;</p> <p><strong><em>The DOC, on Wednesday, imposed a whopping final anti-dumping duty rate of 209.97% on imports of these products from China. This will hurt Chinese exporters including Yieh Phui (China) Technomaterial Co. Ltd and Jiangyin Zongcheng Steel Co. Ltd. India, Taiwan, South Korea, and Italy received anti-dumping duties in the range of 3.05% to 92.12%.&rdquo;</em></strong></p> </blockquote> <p>(emphasis added)</p> <p><u><strong>This article almost sounds like a satire of sorts. First of all, there is apparently a VAST CONSPIRACY between the steel makers in all these countries, hitherto well hidden from the public eye. </strong></u>Thank the Lord that US steelmakers have spotted it in good time! Who knows what evils may have befallen us otherwise!</p> <p>Alas, the assertion that steel is &ldquo;dumped below its fair value&rdquo; requires us to accept the ludicrous idea that a bunch of bureaucrats actually knows what the &ldquo;fair value&rdquo; of steel is supposed to be. In Europe, medieval scholars once extensively discussed the notion of a &ldquo;just price&rdquo; in the context of religious doctrine &ndash; a debate that went on for centuries. They eventually concluded that there is no just price apart from the market price.</p> <p>It took these several centuries of learned debate to finally get rid of most of Charlemagne&rsquo;s extensive and absurd price controls. <strong>So essentially, today&rsquo;s bureaucrats are assuming the role&nbsp; once played by kings, popes and their representatives in determining &ldquo;just&rdquo; prices</strong>. It sounds almost as though more than a thousand years of progress have just gone &ldquo;poof&rdquo;.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Charlemagne" class="aligncenter wp-image-45105" height="550" src="" width="388" /></p> <p style="text-align: center;">Karolus Magnus, a.k.a. Charlemagne, who introduced countless price controls and economic regulations at the Council of Nijmegen in AD 806. It took centuries to get rid of the economic decrees he and his successors imposed in the name of church doctrine (the&nbsp; fashionable pretext at the time. Today the pretext is provided by socialist doctrine).</p> <p><strong>&nbsp;</strong></p> <h3><u><strong>No Fair! The Economics of &ldquo;Dumping&rdquo;</strong></u></h3> <p><strong>Let us briefly consider the economics of so-called &ldquo;dumping&rdquo;.</strong> From the perspective of consumers, the case seems crystal clear. Imagine for example that you long wanted to buy a new car, but were put off by its high cost. Suddenly, a car dealer near you lowers the price of the car you want by 30%. Are you going to a) buy it or b) complain about his &ldquo;car dumping&rdquo; and alarm the local Spanish Inquisition rep&hellip; , sorry, <em>commerce department</em> representative?</p> <p>We can tell you what 99.99% of consumers would do. We can probably agree that if the remaining 0.01% had a second brain, it would feel lonely. We would come to similar conclusions about a car manufacturer complaining about low steel prices. We&rsquo;d rightly consider him to be a few French fries short of a happy meal.</p> <p>&nbsp;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p style="text-align: center;"><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p style="text-align: center;">No-one expects the Spanish Inquisition!</p> </blockquote> <p><strong>However, those complaining are of course the steelmakers (all five of them!). What are they really complaining about though? As the charts above show, steel prices are currently very low, and steelmakers obviously don&rsquo;t like that. So they demand that the State artificially raise them, under the pretext that low import prices constitute evidence of &ldquo;dumping&rdquo;.</strong></p> <p>In case you were wondering how the International Trade Commission of the department of commerce determines whether dumping takes place, here is the official definition of &ldquo;unfair&rdquo; prices (get out those prayer beads, ye unbelievers, as we familiarize you with official doctrine!):</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;Dumping occurs when imported merchandise is sold in, or for export to, the United States at <strong>less than the normal value of the merchandise</strong>.&rdquo;</em></p> </blockquote> <p>See how easy it is?<em><strong> According to our sources, it was not quite clear whether the &ldquo;normal value&rdquo; of steel was last week&rsquo;s or last year&rsquo;s price, or the price in Shanghai or in Rome, so darts were thrown at the steel rebar futures chart we showed above (we cannot guarantee that his is how it really happened).</strong></em></p> <p>So the governments of the US, the EU and China are acting as enforcement arms of domestic steelmakers <em>to the detriment of everybody else</em>. Does that make any sense whatsoever? What if Chinese steelmakers offered to give us steel for free? Should we refuse to take it? Shouldn&rsquo;t we rather be happy to get such a generous gift?</p> <p>Even if allegations that China&rsquo;s government is subsidizing its steelmakers are true (i.e., to be precise, if it is true that it is subsidizing them <em>more</em> than other governments are subsidizing theirs), it seems to us that the party that would be hurt the <em>most</em> by said dumping activity would be the dumpers themselves. We should happily let them proceed, in fact, they should be encouraged! The dumpers are evidently subsidizing US consumers and helping to raise their living standards. What&rsquo;s not to like?</p> <p><strong>Here is something protectionists never talk about: if one makes it more difficult for others to sell their wares, how are they supposed to pay for what one wants to sell to them?</strong> If one thinks their arguments through, protectionists seem to believe that it would be best to have no trade at all.&nbsp; When they first came up with their ideas, they must have been thinking of all those immensely rich villages in the world&rsquo;s most inaccessible mountain regions.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Nuba_village-1" class="aligncenter wp-image-45106" height="426" src="" width="640" /></p> <p style="text-align: center;">High up in the Nuba Mountains, where the rich guys live!</p> <h3><u><strong>Coalition of Obsolete Industries</strong></u></h3> <p><strong>Obviously though, the governments involved in this trade spat are only acting in the best interests of steel workers.</strong> Just as they are only acting in the best interests of taxi drivers when regulating Uber out of existence in a city. Why, we should actually consider bringing back VHS video while we&rsquo;re at it. <em>Someone</em> must have made those tape machines and tapes, and obviously they&rsquo;re all out of a job as well.</p> <p>We have remarked on previous occasions that stopping and reversing economic progress seems to be a major function of governments &ndash; and as the makers of the video below rightly ask: <u><strong><em>How are we ever going to have jobs if we don&rsquo;t stop progress? </em></strong></u>Naturally, the same applies to free trade.</p> <p>&nbsp;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p style="text-align: center;"><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p style="text-align: center;">It&rsquo;s time to side with the coalition of obsolete industries! Patriotic duty, etc.!</p> </blockquote> <p>&nbsp;</p> <h3><u><strong>Conclusion </strong></u></h3> <p>If Western steelmakers are not able to compete with Asian ones at current steel prices, then<strong> jacking import prices up by 200% may temporarily help to keep them in business, but they will no longer have an incentive to become more efficient</strong>. In the long run, they will simply be set up for an even bigger fall. The may enjoy an advantage for a brief time, but it isn&rsquo;t going to last.</p> <p><strong>Since the amount of capital is finite, tying up capital and labor in an inefficient sector of the economy perforce deprives other sectors of these resources. </strong>Here one can interweave our example of the consumer who considers whether or not to buy a car, and finds to his delight that it is offered at a 30% discount one day. The money he saves will now be available for other uses.</p> <p>In other words, not only is our hypothetical consumer&rsquo;s living standard raised immediately, but the funds he saves will also benefit others. Whether he saves the money or spends it on other consumer goods, more economic opportunity will ensue. <em>The important thing is that it is the consumer making the allocation decision.<strong> </strong></em><strong>Ultimately the economy&rsquo;s production structure is supposed to serve consumers after all &ndash; not government bureaucrats and cronies.</strong></p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="563" height="347" alt="" src="" /> </div> </div> </div> B+ China Department Of Commerce ETC India Italy Steel Imports Tue, 31 May 2016 23:00:00 +0000 Tyler Durden 562422 at Alibaba's Largest Investor Is Selling A $7.9 Billion Stake <p>Did SoftBank just ring the bell at the top for internet retail giants? </p> <p>Shortly after the close, Japan's SoftBank Group Corp., the largest and one of the oldest investors in Chinese e-commerce giant Alibaba, said it would sell at least $7.9 billion of its stake (with an option to sell another $1 billion) in the company to boost its cash position and pay down debt.</p> <p>According to the filed press release, SoftBank has established a new vehicle called the Mandatory Exchangeable Trust, with the intention of divesting $5 billion in Alibaba’s American depositary receipts in a private placement “to qualified institutional buyers." SoftBank will also sell 2 billion in shares back to Alibaba, $400 million to members of the Alibaba Partnership and $500 million “to a major sovereign wealth fund.”</p> <p>As a result of the partial liquidation, Softbank's holdings will decline from 32% to 28%. As <a href="">Bloomberg adds</a>, the sales are part of a broader effort by the Japanese technology giant to reduce its leverage.</p> <p>In the press release, SoftBank Chairman and CEO Masayoshi Son said that "this investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects,” SoftBank Chairman and Chief Executive Officer Masayoshi Son said in the statement. “In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership."</p> <p>In a separate statement, Jack Ma, Alibaba’s chairman, said that "as SoftBank looks to strengthen its own balance sheet, Alibaba determined that it was the best use of our capital to re-invest in our own business through an efficient buyback of a large number of shares in our own company that is accretive to our stockholders."</p> <p>U.S. web portal Yahoo! Inc. has about a 15 percent stake in Alibaba - part of the remaining holdings it first acquired in 2005 for about $1 billion. Yahoo has been seeking a tax-efficient way to separate from the stock. Most recently it has sought to sell its core web assets in a strategic review.</p> <p>BABA stock declined 2.8% in after hours trading Tuesday after the announcement; it is still up roughly 20% in 2016.</p> <p>* * * </p> <p><em>The press release is below:</em></p> <p><strong>SoftBank Announces a Minimum $7.9 Billion Monetization of its Alibaba Stake in Coordination with Alibaba Group </strong><strong></strong></p> <ul> <li>Proceeds from Capital Raise to Reduce SoftBank’s Leverage</li> <li>Consistent with the Company’s SoftBank 2.0 Disciplined Capital Structure Management Strategy</li> <li>SoftBank to Remain Alibaba’s Largest Stockholder and Close Strategic Partner</li> </ul> <p>SoftBank Group Corp. (“SBG”) today announced that it has approved a series of capital raising transactions (the “Transactions”) which involve monetizing a portion of the shares of Alibaba Group Holding Limited (“Alibaba”) held by SBG’s wholly owned subsidiary SB China Holdings Pte Ltd (“SB China”).</p> <p>Specifically, the Transactions are comprised of (i) the intended sale of $2.0 billion of Alibaba ordinary shares to Alibaba, (ii) the intended sale of $400 million of Alibaba ordinary shares to members of the Alibaba Partnership acting collectively, and the sale of $500 million of Alibaba ordinary shares to a major sovereign wealth fund pursuant to an exemption from registration under the U.S. Securities Act and (iii) an intention of the Mandatory Exchangeable Trust (“Trust”), a newly formed trust, to offer, subject to market conditions and other factors, $5.0 billion aggregate purchase price of its mandatory exchangeable trust securities (“Trust Securities”) exchangeable into American depositary shares (“ADSs”) of Alibaba in a private placement to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act. The Trust expects to grant the initial purchasers of the Trust Securities an option to purchase up to an additional $1.0 billion aggregate purchase price of Trust Securities.</p> <p><strong>1. Purpose of the Transactions</strong></p> <p>Following SBG’s first investment in Alibaba in 2000, the two companies have built a close relationship through business partnerships, joint ventures, joint investments and other collaborations. SBG Group held 32.2%1 of Alibaba’s issued and outstanding shares as of March 31, 2016, and Alibaba is an equity method affiliate of SBG. SBG continues to be committed to its partnership with Alibaba, and the Transactions are driven purely by SBG’s capital structure and de-leveraging objectives.</p> <p>A disciplined approach to capital structure and leverage is fundamental to our SoftBank 2.0 transformation strategy. The Transactions are expected to allow SBG to monetize a portion of its Alibaba shares in order to increase its liquidity cushion, improve SBG’s consolidated net interest-bearing debt / EBITDA ratio (excluding Sprint Corporation) from 3.8x as of March 31, 2016 to approximately 3.3x2, and enable flexible and prudent financial management. The sale of Trust Securities is expected to allow SBG to monetize its shares at a potential premium to the current share price, while eliminating downside risks as a result of owning these shares. The Trust Securities are expected to be settled upon exchange by delivery of Alibaba ADSs representing the pledged shares, which is expected to occur on the scheduled exchange date (in 3 years), and both the sale of Alibaba ordinary shares and the issuance of the Trust Securities will enhance SBG’s financial profile. SBG plans to use the proceeds of the Transactions for the repayment of interest-bearing debt as well as other general corporate purposes.</p> <p>SBG would continue to hold approximately 28%3 of Alibaba’s total outstanding shares following the Transactions (excluding the ordinary shares that are expected to collateralize the Trust Securities). Alibaba will remain an equity method associate of SBG. SBG expects that its Alibaba shares will continue to be a core shareholding of SBG and it intends to maintain its strong relationship with Alibaba. SBG’s Chairman &amp; CEO, Masayoshi Son, will remain a board director of Alibaba, and Alibaba’s Executive Chairman, Jack Ma, will remain a board director of SBG.</p> <p>In connection with the Transactions, SBG will also enter into a lockup agreement with Alibaba under which it has agreed not to transfer any Alibaba shares held by it for a period of six months, subject to certain exceptions.</p> <p>“When I first met Jack Ma, I knew immediately he had the vision and passion to build the world’s leading e-commerce company, and I was very happy to invest alongside him to help him realize his ambition,” said SBG Chairman and CEO Masayoshi Son. “This investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects. In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership.”</p> <p><strong>2. Overview of the Transactions</strong></p> <p>The Trust will enter into a variable forward purchase agreement to acquire Alibaba shares from West Raptor Holdings, LLC (“WRH LLC”), a wholly owned subsidiary of SoftBank Group International GK (“SBIGK”), which in turn is wholly owned by SBG. At the closing of the offering of the Trust Securities, the Trust will pay to WRH LLC the proceeds received from the issuance of the Trust Securities, excluding amounts in respect of the Trust’s expenses and amounts used to purchase U.S. Treasury securities, which will fund quarterly distributions on the Trust Securities. At the exchange date, which is expected to be the first scheduled trading day after June 1, 2019, the Trust will exchange each Trust Security for a certain number of ADSs (determined with reference to the trading price of the ADSs at that time) or, subject to WRH LLC’s election, cash or a combination of cash and ADSs. Under certain circumstances, including at WRH LLC’s election, the Trust Securities may be exchanged prior to the scheduled exchange date.</p> <p>In addition, SB China will enter into separate share purchase transactions with each of Alibaba, members of the Alibaba Partnership, acting collectively, and a major sovereign wealth fund for the purchase of approximately $2.9 billion of Alibaba shares held by SB China, of which approximately $2.0 billion of the total is being purchased by Alibaba. The sales to members of the Alibaba Partnership acting collectively, and a major sovereign wealth fund would be exempt from registration pursuant to an exemption from registration under the U.S. Securities Act, and the shares would be eligible for resale under Rule 144 following a 6-month holding period (subject to additional restrictions applicable with respect to shares acquired by affiliates under Rule 144).</p> <p><strong>3. Impact on Consolidated Financial Results</strong></p> <p>The impact on consolidated financial results from the Transactions will be disclosed as necessary once it is determined.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="3000" height="1942" alt="" src="" /> </div> </div> </div> After Hours China Market Conditions Monetization Tue, 31 May 2016 22:36:09 +0000 Tyler Durden 562427 at 18 German Women Sexually Assaulted By Pakistani Refugees At Music Festival <p>Less than a month after a <a href="">damning report emerged </a>that a high-ranking police officer has alleged that his seniors tried to strike the word rape from an internal police report after the mass sexual assaults in Cologne over New Year, Germany is gripped in a new sexual assault scandal involving refugees. <strong>Eighteen German women have filed police complaints saying they were sexually assaulted at a musical festival in Darmstadt. Police arrested three refugees from Pakistan at the scene after three of the women immediately reported their attacks.</strong></p> <p>According to <a href="">Die Welt</a>, the sexual assaults are reported to have taken place at the Schlossgrabenfest music festival in the city of Darmstadt, near Frankfurt, on Saturday night. The festival in Darmstadt took place over four days and attracted some 400,000 revelers.&nbsp; </p> <p><a href=""><img src="" width="504" height="336" /></a></p> <p>Three of the women immediately alerted police at the festival that they had been assaulted. They said they had been surrounded and then sexually harassed by a group of men who were of South Asian appearance. </p> <p>"Unfortunately several women were sexually harassed on Saturday, when the dance floor area was completely packed,” the police said in a statement, <a href="">quoted by RT</a>.</p> <p>And once again, refugees are implicated: as RT adds, due to the quick intervention by the law enforcement officers, three suspects, who are asylum seekers from Pakistan and aged between 28 and 31, were promptly apprehended. Police added that there could be more who took part in the attacks that are still at large.</p> <p><a href=""><img src="" width="500" height="334" /></a></p> <p>Since the arrests were made, a further 15 women have come forward since Tuesday, to say they were sexually assaulted at the festival. The women added that the pattern of the attacks was similar, as they were surrounded by a group of men, who proceeded to assault them sexually.&nbsp; </p> <p>These attacks take place just over two weeks after two female teenagers, 17- and 18-years-old, were sexually harassed by a group of 10 men during a street festival in Berlin.&nbsp; The men allegedly pressed against the teens and groped them, blocking their attempts to escape. </p> <p>Following that attack, police arrested three teenagers aged between 14 and 17 at the scene, while they tweeted that the three suspects were known to the police from prior incidents, adding that "two are of Turkish descent and the third is [of] unknown [origin]." </p> <p>The attacks in May were reminiscent of numerous allegations of sexual assaults being reported in Cologne on New Year’s Eve. Some 1,049 people said they were victims of attacks allegedly committed by men of North African and the Middle Eastern descent, while about 821 complaints were filed with the police.&nbsp; </p> <p>German police were heavily criticized for their perceived lack of activity during the New Year’s Eve celebrations in the city as well as for their poor investigations into the crimes. Cologne Police Chief Wolfgang Albers resigned a week after the incident. </p> <p>A welcoming Germany has taken steps to try and assimilate asylum seekers into German culture, with one education center even holding classes to explain to refugees how they should interact with women in Germany, <a href="">as well as flyers how to interact with women at local public pools</a>. </p> <p><a href=""><img src="" width="497" height="706" /></a></p> <p>&nbsp;</p> <p>Additionally, as reported recently, the country went so far <a href="">as to create a website explaining the "nuances" of sex in Germany, </a>what is allowed, what is prohibited, as well as providing a remedial high school lesson in male and female biology. </p> <p><img src="" width="500" height="375" style="cursor: pointer; float: none;" class="cboxPhoto" /></p> <p>“The majority don’t have a clue how to approach the opposite sex in this country,” said sex therapist Christian Zech, who works with the Pro-Familia center, specializing in sexuality, partnership and family planning. </p> <p>We doubt that excuse justifies the recurring stories of sexual assaults involving refugees and local women. </p> <p>Meanwhile, the German government has said will allocate nearly €94 billion (US$105 billion) for incoming refugees over the next five years. The money will be used for housing, "integration", German language courses and social welfare benefits, as well as dealing with the underlying causes of the refugee influx. </p> <p>The Federal Finance Ministry expects around 600,000 refugees to enter Germany in 2016, some 400,000 in 2017 and about 300,000 each consecutive year. In 2015, an estimated 1.1 million arrived in Germany seeking asylum.</p> <p>Some in Germany have not taken kindly to the mass arrivals of asylum seekers, mainly from the Middle East and North Africa, with German police recording 45 cases of arson at refugee centers since the start of the year, while there have been calls for Chancellor Angela Merkel to cap the number of refugees entering Germany.</p> <p>Curiously, none other than Buddhist spiritual leader, the Dalai Lama opined on the current migrant crisis in Europe. Cited by <a href="">Austria's Krone</a>, the monk said that he is skeptical about the refugee trend in Germany: "<strong>Germany cannot become an Arabic country, Germany is Germany!", he told reporters of the "Frankfurter Allgemeine Zeitung"</strong>.</p> <p>He added that from an ethical point of view, it is justifiable to only accept refugees on a temporary basis. "The number of migrants in Germany is too high. The aim should be, that these people return to their home countries and help rebuilding infrastructure."</p> <p>Ultimately, the future of such dramatic scenes may be in the hands of none other than Turkey's president Erdogan, who has repeatedly warned that if Europe does not follow through with its promises of visa-free travel for Turkish citizens, he may unleash another wave of refugees using the "land corridor" which ultimately ends in Germany. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="714" height="477" alt="" src="" /> </div> </div> </div> Germany Middle East None Tue, 31 May 2016 22:27:55 +0000 Tyler Durden 562420 at