Tag Archives: Regime Uncertainty

China slaps cap on overseas UnionPay cash withdrawals

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“The gatekeeper of China’s foreign exchange has moved to plug a loophole in the capital account by capping the value of overseas withdrawals on bank cards, amid rising concerns over capital outflows and illicit money transfers.  The State Administration of Foreign Exchange has slapped an annual cap on overseas cash withdrawals for UnionPay cardholders at 100,000 yuan or its equivalent per card.  SAFE requires banks to add accounts that exceed the cap to a watch-list and forbid further cash withdrawals outside of China.  Still, the withdrawal cap did not address another obvious escape route, the number of cards for which an individual can apply.”

http://www.scmp.com/business/banking-finance/article/1862570/chinas-safe-slaps-cap-overseas-unionpay-cash-withdrawal

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Puerto Rico Defaults On Bonds: Return Does Not Come Without Risk

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“Many American investors bought Puerto Rican bonds over the past five years as we all searched desperately for yield in the face of the Federal Reserve pushing interest rates down to historic lows. Normally, investors understand that higher yields come with greater risks. However, during the past six years of extraordinary interventions by the Fed into all sorts of financial markets, many investors may have decided that those higher yield investments weren’t really all that risky.  Puerto Rico’s problems may serve as a much-needed wake up call to investors. As rates rise, capital will move back toward safety and the risk premium demanded of higher risk projects is likely to increase.”

http://www.forbes.com/sites/jeffreydorfman/2016/01/04/puerto-rico-bond-defaults-early-reminder-to-investors-return-does-not-come-without-risk/

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Bahamas’ new 15% VAT ‘a recipe for recession’: economist [2013]

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“The Government is proposing to implement VAT on July 1, 2014, at a rate of 15 per cent, with the hotel industry to be subject to a lower 10 per cent rate.  Sir William called on the government to clarify whether or not it intended to reduce current taxes to make room in the economy for VAT, adding that whether or not officials could strike a balance between existing taxes and the new structure would ultimately determine the strategy’s success.  ‘The public is not expecting to pay the same level of custom’s duties along with everything. If that is so, there is gonna be hell to pay in this economy.'”

http://www.tribune242.com/news/2013/oct/04/vat-move-recipe-recession/

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China stocks rout on first market day of 2016 trips national trading halt

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“China’s major stock exchanges tanked on the first trading day of the year, triggering a ‘circuit-breaker’ that suspended equities trade nationwide for the first time and putting at risk months of regulatory work to restore market stability. The collapse, which followed the release of weak economic data on Monday, raises fresh doubts about regulators’ capacity to wind back heavy trading restrictions implemented in the wake of a massive summer stock market crash in which major indexes lost as much as 40 percent before top leadership intervened.  Analysts attributed the decline to the imminent end of a 6-month lockup period on share sales by major institutional investors.”

http://www.reuters.com/article/us-china-stocks-trading-halt-idUSKBN0UI0CU20160104

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Martin Shkreli’s former company KaloBios files for bankruptcy

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“The move comes after Shkreli, its former CEO, was charged on December 17 in federal court with securities fraud related to a hedge fund and another company. Shkreli pleaded not guilty to the charges.  Shkreli initially gained notoriety in September when, as the chief executive of Turing Pharmaceuticals, he raised the price of Daraprim— a drug used to treat a dangerous parasitic infection— from $13.50 to $750 per pill.  The move generated harsh criticism from prominent politicians, including Hillary Clinton, and spurred a senate investigation into drug pricing.”

http://www.nydailynews.com/news/national/martin-shkreli-company-files-bankruptcy-article-1.2481147

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Flytenow Shuts Down After Court Rules Against Flightsharing Startups

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“Airplane ridesharing startup Flytenow today announced that it is shutting down after a court recently upheld the FAA’s power to regulate what does (and does not) constitute a commercial aviation operation.  This is pretty much the end of the road for services like Flytenow. Ridesharing startups like Uber were able to muscle their way into virtually every city, even when local regulations didn’t always allow them to operate there. Unsurprisingly, the FAA wasn’t going to just let this one go. Even though the Flytenow team says it plans to look into ways to appeal this decision, it seems rather unlikely that the FAA’s rules around flightsharing will get disrupted anytime soon.”

http://techcrunch.com/2015/12/22/flytenow-shuts-down-after-court-rules-against-flightsharing-startups/

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John Hussman: Reversing the Speculative Effect of QE Overnight

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“Last week, without taking any care to reduce the size of its balance sheet, the Federal Reserve instantly changed the monetary environment to one that is observationally equivalent to the one that prevailed in 2009. By raising interest rates artificially (through interest payments on reserves and reverse repurchases) and applying those payments to everything but currency in circulation, the Fed has neutralized the misguided speculative prop it created through 6 years of policy distortion, and it did so in one fell swoop. From the standpoint of investors, the overall effect is just as if the Fed had suddenly reversed every dollar of quantitative easing since 2009 ($1.7 trillion).”

http://www.hussmanfunds.com/wmc/wmc151221.htm

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Drone owners must register with FAA, starting December 21

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“The Federal Aviation Administration said Monday that US residents must register hobbyist drones by February 19 at its drone registration website. Registration opens December 21 and is free through January 20, the agency said. After that, the FAA will charge $5 for registration.  Accepting the guidance of an advisory panel, the FAA said registration is required for any hobbyist drone weighing between 0.55 pounds and 55 pounds. That weight limit includes even relatively small drones like the $549 Parrot Bebop 2, not just the serious $1,000 hobby-oriented models from companies like DJI. The FAA’s registration rule (PDF) applies only to hobbyist drones.”

http://www.cnet.com/news/faa-to-open-drone-registration-on-december-21/

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World’s Biggest Pension Fund Loses $64 Billion Amid Equity Rout

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“The world’s biggest pension fund posted its worst quarterly loss since at least 2008 after a global stock rout in August and September wiped $64 billion off the Japanese asset manager’s investments.  The 135.1 trillion yen ($1.1 trillion) Government Pension Investment Fund lost 5.6 percent last quarter as the value of its holdings declined by 7.9 trillion yen, according to documents released Monday in Tokyo. That’s the biggest percentage drop in comparable data starting from April 2008.  Fund executives have argued that holding more shares and foreign assets is a better approach as Prime Minister Shinzo Abe seeks to spur inflation that would erode bonds.”

http://www.bloomberg.com/news/articles/2015-11-30/world-s-biggest-pension-fund-loses-64-billion-amid-equity-rout

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UnitedHealth warns it may exit Obamacare plans

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“The nation’s largest health insurer warned Thursday that it may pull out of the Obamacare exchanges after 2016 – forcing more than a half million people to find other coverage – after low enrollment and high usage cost the company millions of dollars.  The possible move by UnitedHealth Group raises new questions about the viability of President Obama’s signature health law and follows the departure of more than half of the non-profit insurance cooperatives this year. If UnitedHealth drops out, consumers would lose one of the lowest-cost plans available in much of the country, and some wonder how smaller insurers could fill the void.”

http://www.usatoday.com/story/money/2015/11/19/unitedhealth-group-earnings-downgrade-obamacare-affordable-care-act/76040322/

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