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Tue, 17th January 2017

Anirudh Sethi Report

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Archives of “united states” Tag

Prosecutors seek arrest warrant for Samsung chief Lee Jae-yong

Special prosecutors in Seoul on Monday requested an arrest warrant for the de facto head of Samsung, the country’s largest company, as a corruption scandal that toppled president Park Geun-hye ensnared another powerful South Korean figure.

Lee Jae-yong, vice chairman of Samsung Electronics and heir to the company, is wanted on charges of bribery, according to prosecutors who grilled the country’s top executive during a marathon 22-hour interrogation late last week.

Samsung were unable to comment immediately. However, the development will likely be a stunning blow to the company as its attempts to solidify the succession of Mr Lee as chief and to reform its corporate governance structure.

China press (Xinhua): “China collapse” would be good for no one

A commentary piece in Xinhua that outloines current challenges facing the Chinese economy:

  • Such as a weak global recovery, rising trade protectionism, domestic debt overhang & excess capacity
But still, it says:
  • China’s contribution to world growth in 2016 is again poised to top that of all other countries, exceeding the figure for all developed economies combined
  • The IMF has projected China’s growth to be 6.6 percent with global growth at 3.1 percent in 2016
  • However, China’s growth last year appears set to hit 6.7 percent
It concludes with a projection on growth at 6.5%
( Xinhua News Agency is the official press agency of China, it is a ministry-level institution subordinate to the central government and its head is a member of the Central Committee of China’s Communist Party.)

Two Arrested For Hacking Email Accounts Of ECB’s Mario Draghi, Former Italian PM Renzi

It appears the Clinton campaign wasn’t the only one targeted by malicious (Russian) hackers.

Reuters reported that on Tuesday, Italian police arrested two people for hacking into thousands of email accounts, including those of European Central Bank President Mario Draghi and former prime ministers Matteo Renzi and Mario Monti.

“There were tens of thousands of email accounts hacked, and among them were accounts belonging to bankers, businessmen and even several cardinals in the Vatican,” Roberto Di Legami, director of the specialised cyber police unit that conducted the investigation, told Reuters. How the information may have been used is still under investigation, he said.

It is still not clear exactly how much information was collected and how important it may have been, he sai, although one would venture to guess that any information contained in emails leaked from the current head of the world’s biggest hedge fund, aka the ECB, would be market moving.

Police have sequestered a server in Rome containing thousands of files, but 99 percent of the data was stored in the United States, Di Legami said. The information will be shipped back in coming days but it will take some time before it can be analysed.

FOMC Minutes: Saw gradual rate hike pace appropriate for now -Full Text

Highlights of the Minutes of the Dec 14 FOMC meeting

The Fed hiked rates by 0.25% at this meeting

Highlights of the Minutes:

  • Almost all officials saw upside risks to growth on expectations fiscal policies will be more expansionary under Trump
  • About half of policymakers incorporated those assumptions into forecasts
  • Many saw increased chance of faster rate hike pace due to higher risk of sizeable undershooting of longer-run normal unemployment rate leading to higher inflation
  • Policymakers emphasized their considerable uncertainties on timing, size and composition of legislative and spending changes
  • Almost all members saw unemployment rate running below longer-term normal level
  • Generally agreed o continue to closely monitor inflation
  • Full text

There is never as much detail or conviction in the Minutes as market-watchers hope for. This is the closest thing there is to guidance:

“At this meeting, members continued to expect that, with gradual adjustments in the stance of monetary policy, inflation would rise to the Committee’s 2 percent objective over the medium term as the transitory effects of past declines in energy prices and non-energy import prices dissipated and the labor market strengthened further. This view was reinforced by the rise in inflation in recent months and by recent increases in inflation compensation. Against this backdrop and in light of the current shortfall in inflation from 2 percent, members agreed that they would continue to closely monitor actual and expected progress toward the Committee’s inflation goal.”

The knee-jerk reaction in the FX market was disappointment and the US dollar fell 30 pips but it quickly rebounded back to unchanged.

On the election, here is what the Minutes said:

Peso Plunges To Record Low After Trump Tweet

The Mexican Peso is plunging once again this morning – very close to all-time record lows – as fears spread that Ford’s decision yesterday may become the norm following president-elect Trump’s tweet that “this is just the beginning.”

Bloomberg notes that Ford’s move, which follows a similar decision by United Technologies Corp.’s Carrier in November, makes it all the more important for Mexican President Enrique Pena Nieto to dissuade other foreign companies from following suit in the face of Trump’s wrath. Mexico’s northern neighbor buys 80 percent of the Latin American nation’s exports, and luring U.S. companies is a cornerstone of the government’s plans to modernize industries from construction to oil.

“A lot’s at stake, considering that since 1999 close to 46 percent of foreign direct-investment flows into Mexico originated in the U.S.,” said Alonso Cervera, chief Latin America economist for Credit Suisse Group AG. “Investors will likely be anxious to see which other companies may do the same.”

 The damage caused by companies buckling under political pressure offers a preview of the ripples that could jolt Mexico’s economy should Trump also follow through with threats to tear up free-trade agreements and to build a border wall. Economists in Bloomberg surveys have already cut their median forecasts for GDP growth in 2017 to 1.7 percent from an estimate of 2.3 percent before Trump was elected.

 

Rouhani: Extension of US Sanctions Against Iran Violates Nuclear Deal

Iranian President Hassan Rouhani speaks at a news conference near the United Nations General Assembly in the Manhattan borough of New York, U.S., September 22, 2016The US decision to extend 1979 sanctions against Iran for another 10 years violates the nuclear deal struck by Iran with international powers, Iran’s President Hassan Rouhani said on Sunday.

“The path that the US has taken in regard to Iran will lead to a considerable drop in international trust in the American government,” Rouhani was quoted as saying at a meeting with International Atomic Energy Agency (IAEA) Director General Yukiya Amano by Mehr news agency.

He stressed that it was highly significant for all parties to the deal to comply with their commitments, arguing that the US recent decision to prolong Iran Sanctions Act (ISA) for another 10 years clearly violated the Iran nuclear deal.

On July 14, 2015, Iran and the P5+1 group of countries — the United States, Russia, China, France and the United Kingdom plus Germany — signed the Joint Comprehensive Plan of Action (JCPOA), ensuring the peaceful nature of Tehran’s nuclear program in return for the gradual sanctions relief. The US sanctions introduced against Tehran in 1979, however, were not mentioned in the document.

China will give back seized drone, criticises U.S. “hyping up” the issue

China’s Defence Ministry said on Saturday it had been in talks with the United States about returning an underwater drone taken by a Chinese naval vessel in the South China Sea, but the U.S. was not helping by “hyping up” the issue.

The drone was taken on Thursday, the first seizure of its kind in recent memory, about 50 nautical miles northwest of Subic Bay off the Philippines, just as the USNS Bowditch was about to retrieve the unmanned underwater vehicle (UUV), U.S. officials said.

The Defence Ministry said a Chinese naval vessel discovered a piece of “unidentified equipment” and checked it to prevent any navigational safety issues, before discovering it was a U.S. drone.

“China decided to return it to the U.S. side in an appropriate manner, and China and the U.S. have all along been in communication about it,” the ministry said on its website.

“During this process, the U.S. side’s unilateral and open hyping up is inappropriate, and is not beneficial to the smooth resolution of this issue. We express regret at this,” it added.

U.S. President-elect Donald Trump weighed in to the row on Saturday, tweeting: “China steals United States Navy research drone in international waters – rips it out of water and takes it to China in unprecedented act.”

Without directly saying whether the drone was operating in waters China considers its own, the ministry said U.S. ships and aircraft have for a long period been carrying out surveillance and surveys in “the presence” of Chinese waters.

“China is resolutely opposed to this, and demands the U.S. stops this kind of activity,” it said.

China will remain on alert for these sorts of activities and take necessary steps to deal with them, the ministry said without elaborating.

Earlier, the Global Times, published by the ruling Communist Party’s official People’s Daily, cited an unidentified Chinese source as saying they believed the issue would be resolved smoothly.

The United States says the drone was operating lawfully.

Bitcoin trade volume hits record in November

A record 174.7 million bitcoins changed hands, so to speak, in November, a 50% or so increase from the previous month’s trade volume, according to Bitcoinity.org.

The spike came as Chinese jumped into the digital currency as a way to shift their assets into dollars.

 The previous monthly record, which came in March, was 148.6 million bitcoins.

The November trading volume was worth $137 billion.

The yuan has been weakening against the U.S. currency since Donald Trump’s victory in the presidential election on Nov. 8.

Many Chinese evade restrictions on directly buying dollars by taking a detour into bitcoins. This is what they were doing last month.

Indian pleads guilty for H-1B visa fraud in US

A 32-year-old Indian-origin immigration manager for an IT company has pleaded guilty for committing H-1B visa fraud in the US. Hari Karne, who hails from Hyderabad, faces a maximum potential penalty of five years in prison and a USD 250,000 fine if convicted.

According to federal prosecutors, Karne’s conspirators recruited foreign workers with purported IT expertise who sought work in the US.

The conspirators then sponsored the foreign workers’ H-1B visas with the stated purpose of working for SCM Data, a US- based company, and MMC Systems’ clients throughout the US.

When submitting the visa paperwork to US Citizenship and Immigration Services, the conspirators represented that the foreign workers had full-time positions and were paid an annual salary, as required to secure the H-1B visas.

“Contrary to these representations and in violation of the H-1B programme, the conspirators paid the foreign workers only when they were placed at a third-party client who entered into a contract with SCM Data or MMC Systems,” the Department of Justice said in a press release.

China fund to buy 10% stake in Russia’s largest petrochemicals group

China’s Silk Road Fund has agreed to buy a 10 per cent stake in Russia’s largest petrochemicals group, in the second major Chinese state investment in the company whose shareholders include people close to president Vladimir Putin.

Sibur, which buys and processes gas produced as a byproduct of Russia’s energy industry, announced on Wednesday that its shareholders had signed a deal for China’s Silk Road Fund – a state investment vehicle created as part of Beijing’s One Belt One Road strategy – to take a 10 per cent stake, without providing further details

Sinopec last December completed a deal to buy a 10 per cent stake in the company for $1.34bn.

Mr Mikhelson last month told Russian newswire Interfax that he expected the 10 per cent stake in Sibur to be sold quickly, and that the deal would involve existing shareholders selling their shares.