LONDON — As Europe slouches toward a monetary union that aims to force euro area governments to cede control over their banks and budgets, a crucial question remains unanswered: how to persuade investors to buy, and hold for the long term, the bonds of at-risk economies like Italy and Spain.
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Xi Jinping, vice president of China, visits the China Shipping terminal at the Port of Los Angeles in Los Angeles, California, U.S., on Thursday, Feb. 16, 2012. Source: Bloomberg
The Belleview Drive property is viewed along with other residential buildings in Repulse Bay, Hong Kong. Source: Bloomberg
The Belleview Drive property, bottom second right, is viewed along with other residential buildings in Repulse Bay, Hong Kong. Source: Bloomberg
The entrance to the Belleview Drive property is seen in Repulse Bay, Hong Kong. Source: Bloomberg
A screen grab from the website www.1921.org.cn shows Xi Zhongxun's family photograph taken in 2000. Front, from left: daughter Xi Qianping, wife Qi Xin, grandson Mingzheng, Xi Zhongxun, daughter Qi Qiaoqiao. Second row, from left: grandson Zannong, son-in-law Wu Long, daughter Qi An'an, son Xi Jinping, son Xi Yuanping, son-in-law Deng Jiagui, grandson Dongdong. Source: www.1921.org.cn via Bloomberg
Qi Qiaoqiao leads Tsinghua University EMBA students in a drum performance on Sept 18, 2010. Source: Imaginechina
Hiu Ng, center, attends the Boao Forum for Asia Conference 2011, 'Young Leaders Roundtable: Charting Growth - Include the Excluded', in Hainan, China, on April 14, 2011. Source: Imaginechina
Daniel Foa, founder of 51Sim, right, and Chinese actress Li Bingbing at the Sustainable Innovation Student Competition in Beijing, China, on Nov. 2, 2009. Source: Imaginechina
A screen grab shows the website of New Postcom Equipment Co. Source: www.newpostcom.com via Bloomberg
A screen grab shows the website of Hiconics Drive Technology Co. Source: www.hiconics.com via BloombergThose interests include investments in companies with total assets of $376 million; an 18 percent indirect stake in a rare- earths company with $1.73 billion in assets; and a $20.2 million holding in a publicly traded technology company. The figures don’t account for liabilities and thus don’t reflect the family’s net worth.No assets were traced to Xi, who turns 59 this month; his wife Peng Liyuan, 49, a famous People’s Liberation Army singer; or their daughter, the documents show. There is no indication Xi intervened to advance his relatives’ business transactions, or of any wrongdoing by Xi or his extended family.While the investments are obscured from public view by multiple holding companies, government restrictions on access to company documents and in some cases online censorship, they are identified in thousands of pages of regulatory filings.The trail also leads to a hillside villa overlooking the South China Sea in Hong Kong, with an estimated value of $31.5 million. The doorbell ringer dangles from its wires, and neighbors say the house has been empty for years. The family owns at least six other Hong Kong properties with a combined estimated value of $24.1 million.
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One thousand gram gold bars. Photographer: Kerem Uzel/BloombergSpain formally asked for a bailout for its banks on June 25 and Cyprus that day became the fifth member of the 17-nation euro zone to ask for outside help. European leaders agreed today to ease repayment rules for emergency loans to Spanish banks and relax conditions on potential help for Italy. Gold came close to a bear market in May as some investors sold bullion to cover losses in stock markets as $7 trillion was erased from global equities in about two months.“While demand has been weaker for bullion in recent months, it has picked up in the last month,” said Mark O’Byrne, the executive director of Dublin-based GoldCore Ltd., a brokerage that sells and stores everything from quarter-ounce British Sovereigns to 400-ounce bars. “A resolution to the crisis is not going to be seen in the short term. A lot more speculators could pile back into the market.”
Illustration by Victor JuhaszSomeday, it will go down in history as the first trial of the modern American mafia. Of course, you won't hear the recent financial corruption case, United States of America v. Carollo, Goldberg and Grimm, called anything like that. If you heard about it at all, you're probably either in the municipal bond business or married to an antitrust lawyer. Even then, all you probably heard was that a threesome of bit players on Wall Street got convicted of obscure antitrust violations in one of the most inscrutable, jargon-packed legal snoozefests since the government's massive case against Microsoft in the Nineties – not exactly the thrilling courtroom drama offered by the famed trials of old-school mobsters like Al Capone or Anthony "Tony Ducks" Corallo.But this just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.The defendants in the case – Dominick Carollo, Steven Goldberg and Peter Grimm – worked for GE Capital, the finance arm of General Electric. Along with virtually every major bank and finance company on Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent the past decade taking part in a breathtakingly broad scheme to skim billions of dollars from the coffers of cities and small towns across America. The banks achieved this gigantic rip-off by secretly colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. By conspiring to lower the interest rates that towns earn on these investments, the banks systematically stole from schools, hospitals, libraries and nursing homes – from "virtually every state, district and territory in the United States," according to one settlement. And they did it so cleverly that the victims never even knew they were being cheated. No thumbs were broken, and nobody ended up in a landfill in New Jersey, but money disappeared, lots and lots of it, and its manner of disappearance had a familiar name: organized crime.In fact, stripped of all the camouflaging financial verbiage, the crimes the defendants and their co-conspirators committed were virtually indistinguishable from the kind of thuggery practiced for decades by the Mafia, which has long made manipulation of public bids for things like garbage collection and construction contracts a cornerstone of its business. What's more, in the manner of old mob trials, Wall Street's secret machinations were revealed during the Carollo trial through crackling wiretap recordings and the lurid testimony of cooperating witnesses, who came into court with bowed heads, pointing fingers at their accomplices. The new-age gangsters even invented an elaborate code to hide their crimes. Like Elizabethan highway robbers who spoke in thieves' cant, or Italian mobsters who talked about "getting a button man to clip the capo," on tape after tape these Wall Street crooks coughed up phrases like "pull a nickel out" or "get to the right level" or "you're hanging out there" – all code words used to manipulate the interest rates on municipal bonds. The only thing that made this trial different from a typical mob trial was the scale of the crime.USA v. Carollo involved classic cartel activity: not just one corrupt bank, but many, all acting in careful concert against the public interest. In the years since the economic crash of 2008, we've seen numerous hints that such orchestrated corruption exists. The collapses of Bear Stearns and Lehman Brothers, for instance, both pointed to coordinated attacks by powerful banks and hedge funds determined to speed the demise of those firms. In the bankruptcy of Jefferson County, Alabama, we learned that Goldman Sachs accepted a $3 million bribe from J.P. Morgan Chase to permit Chase to serve as the sole provider of toxic swap deals to the rubes running metropolitan Birmingham – "an open-and-shut case of anti-competitive behavior," as one former regulator described it.More recently, a major international investigation has been launched into the manipulation of Libor, the interbank lending index that is used to calculate global interest rates for products worth more than $3 trillion a year. If and when that case is presented to the public at trial – there are several major civil suits in the works here in the States – we may yet find out that the world's most powerful banks have, for years, been fixing the prices of almost every adjustable-rate vehicle on earth, from mortgages and credit cards to interest-rate swaps and even currencies.But USA v. Carollo marks the first time we actually got incontrovertible evidence that Wall Street has moved into this cartel-type brand of criminality. It also offered a disgusting glimpse into the enabling and grossly cynical role played by politicians, who took Super Bowl tickets and bribe-stuffed envelopes to look the other way while gangsters raided the public kitty. And though the punishments that were ultimately handed down in the trial – minor convictions of three bit players – felt deeply unsatisfying, it was still a watershed moment in the ongoing story of America's gradual awakening to the realities of financial corruption. In a post-crash era where Wall Street trials almost never make it into court, and even the harshest settlements end with the evidence buried by the government and the offending banks permitted to escape with no admission of wrongdoing, this case finally dragged the whole ugly truth of American finance out into the open – and it was a hell of a show.1. THE SCAM
Dmitry Medvedev, Russia's president, center, waves to the media as he walks with Dilma Rousseff, Brazil's president, left, Manmohan Singh, India's prime minister, second from left, Hu Jintao, China's president, second from right, and Jacob Zuma, South Africa's president. Photographer: Graham Crouch/Bloomberg
The U.S. government said GlaxoSmithKline marketed its depression drug Paxil, above, to patients under 18, even though the Food and Drug Administration had not approved the drug for pediatric use.