Switzerland Freaks Out After Veselnitskaya Plot Is Exposed

Nico Hines
Thu, August 10, 2023 

REUTERS

LONDON—Switzerland is roiled by controversy after getting called out by a U.S. government agency for falling for a plot orchestrated by notorious Trump Tower lawyer Natalia Veselnitskaya.

“Switzerland is fighting for its reputation,” wrote Swiss newspaper of record Neue Zürcher Zeitung.

The fallout comes after the U.S. Helsinki Commission wrote to Secretary of State Antony Blinken suggesting that three Swiss nationals—two ex-prosecutors and one former law enforcement official—should be sanctioned by the U.S. “These individuals have abetted Russian nationals sanctioned under the Magnitsky Act,” the letter read.

Veselnitskaya, the pro-Kremlin lawyer who attended an infamous meeting with Donald Trump Jr. and Jared Kushner in 2016, held secret talks with one of the men—Vinzenz Schnell—while he was supposed to be investigating the Magnitsky affair, one of the world’s most notorious frauds, which Veselnitskaya was tasked with covering up.

One of the Schnell-Veselnitskaya summits took place in Moscow on an illicit trip to Russia bankrolled by the Russians. Schnell, who was a consultant to the Swiss Federal Prosecutor’s Office at the time, was eventually fired and convicted when it emerged that he had been gifted multiple luxury vacations, including a bear hunting escapade, all while he was in a key position investigating the case against a network of Russians who had funneled some of the stolen $230 million into Swiss bank accounts.

During one of these trips to the picturesque Lake Baikal he was photographed with Switzerland’s attorney general Michael Lauber and prosecutor Patrick Lamon—the other two men targeted by the Helsinki Commission—along with senior Russian officials.

Despite Schnell’s conviction—and the details of Veselnitskaya’s influence campaign being aired in open court—Switzerland decided to return 80 percent of the funds that had been frozen by the authorities to sanctioned Russians, as first reported by The Daily Beast.

Swiss Will Send Millions to Sanctioned Russians After Veselnitskaya Plot

The Helsinki Commission’s suggestion that former Swiss officials should be sanctioned has called into question Switzerland’s reputation for the rule of law.

The Luzerner Zeitung newspaper this week bemoaned the way the Swiss justice system had handled the fraud. “Switzerland is under international pressure because of its strange investigations into the Magnitsky case,” the paper wrote, under the headline This Fatal Proximity to Russia.

The Neue Zürcher Zeitung on Sunday wrote about “panic” in the Swiss government, and the Watson website explained: “Switzerland investigated in a way that made it vulnerable to international attack—and which is now costing it dearly.”

The letter from Helsinki Commission chairman Rep. Joe Wilson (R-SC) and ranking member Rep. Steve Cohen (D-TN), dated July 27, made it clear that the apparently tainted Swiss investigation into the Magnitsky affair came to a totally different conclusion than the U.S. government.

“These findings are in direct contradiction to the findings of our government and many of our allies. The Swiss Federal Prosecutor’s Office repeated verbatim the statements they received from the Russian government,” they wrote.

Bill Browder has led a global campaign for justice since tax lawyer Sergei Magnitsky was abused and left to die in a Russian jail cell after uncovering the massive fraud. “Switzerland has had a long and shady history of providing secret accounts, looking after dictators’ money and hiding Nazi gold. It seems that since Putin’s murderous invasion of Ukraine, they are adding to its negative reputation by returning dirty money to sanctioned Russian gangsters amid a worldwide effort to starve Putin of his financial resources,” he told The Daily Beast.

Switzerland—the famously neutral banking hub—has largely tried to stay out of the global movement to pressurize President Vladimir Putin for launching an invasion against Ukraine. The Swiss—who are not members of NATO—did go along with European Union sanctions on Russia but they still refuse to re-export arms to Ukraine, citing their neutrality.

Washington’s pressure over Magnitsky is part of a squeeze on Bern to take more responsibility. In the words of Switzerland’s SRF network: “The pressure from the U.S. on Switzerland is increasing.”

U.S. forecaster sees 95% chance of El Nino prevailing through winter


A man walks past the carcass of sheep that died from the El Nino-related drought in Marodijeex town of southern Hargeysa, in northern Somalia's semi-autonomous Somaliland region

Thu, August 10, 2023

(Reuters) - There is a more than 95% chance that El Niño conditions will prevail from December 2023 to February 2024, a U.S. government weather forecaster said on Thursday, exacerbating the risks of heatwaves and floods across several countries.

The weather phenomenon, a warming of ocean surface temperatures in the eastern and central Pacific, is already spurring natural calamities across the globe, with the stakes seen higher for emerging markets more exposed to swings in food and energy prices.

The Climate Prediction Center's (CPC) latest outlook was a slight upgrade from July, when it forecast a 90% chance of the phenomenon persisting through winter.

Earlier in the day, Japan's weather bureau forecast the chances of an El Nino through the northern hemisphere winter at 90%.

The World Meterological Organization had in May warned that the weather pattern could contribute to rising global temperatures.

"In July, El Niño continued as indicated by above-average sea surface temperatures across the equatorial Pacific Ocean," the CPC said.

Given recent developments, forecasters are more confident in a "strong" El Nino event, with roughly two in three odds of temperatures rising by about 1.5 degrees Celsius (2.7 degrees Fahrenheit) or more in November-January, it added.

The El Nino also threatened global rice supplies, amid a ban on shipments of a crucial variety of the staple from top exporter India, as well as other crops such as coffee, sugar and chocolate from southeast Asia and Africa.

It was also expected to bring drier weather across West Africa, South-East Asia and northern South America, and wetter conditions to southern South America in the second half of the year.

(Reporting by Brijesh Patel and Anjana Anil in Bengaluru; Additional reporting by Seher Dareen; Editing by Bernadette Baum and Mark Potter)

Extreme heat will make Grand Canyon visits dramatically more risky in the future, study says

STARTING NEXT WEEK

Eric Zerkel, CNN
Wed, August 9, 2023

Climate change-fueled extreme heat will significantly increase the risk of heat-related illness for the millions of people who visit Grand Canyon National Park each year, a new National Park Service study found.

Researchers used visitation, heat-related illness, temperature and humidity data at the Grand Canyon over a six-year period from 2004 to 2009 to determine a heat-illness risk baseline, and then used climate models to predict how that risk would change in the future under two scenarios: a moderate and high increase of planet-warming pollution.

They found the rate of heat illness per 100,000 visitors increased across both scenarios. It would increase by up to 137% by 2100 under the highest emission scenario, they found, resulting in up to 254 heat-related illnesses in the park each year during the six-month peak visitation season.

“Even under the best-case scenarios there’s a lot of future risk coming,” Danielle Buttke, a National Park Service epidemiologist and one of the study’s authors, told CNN. “This is truly a human health risk – every degree of warming matters, every amount of emitted carbon matters and every action we can take to lessen our personal impact and advocate for climate action is going to save human lives.”

The study highlights the growing health risk of the more frequent, volatile, intense and exceptionally long-lasting heat waves. National parks have already warmed twice as fast as the rest of the US because of human-caused climate change, a 2018 study found.

“Climate change is the greatest public health threat of the century,” Buttke told CNN. Heat “really does impact every aspect of our lives in some shape or form and that’s why climate change is less about changes to the environment than it is about changes to our daily lives and well-being.”

Heat illness includes heat cramps, heat exhaustion, heat stroke and more, and can lead to hospitalization and even death. Heat is suspected to have killed 16 people at Grand Canyon National Park since 2007 – more than any other national park – according to preliminary heat mortality data provided to CNN.

Suspected heat deaths are on the rise nationally and at national parks amid multiple exceptionally long-lasting, record-shattering heat waves.

Visitors watch the sun rise along the South Rim of Grand Canyon National Park 

 - Mario Tama/Getty Images

Buttke said the study’s heat illness projections could be underestimated because current warming and emissions “closely track” to the worst-case scenario and visitation could go up and put more people at risk. The heat illness data used in the study only took into account people treated in the park and not those who didn’t seek treatment or sought it elsewhere.

“It’s possible these are underestimates because we’re already at the upper level of what our model projects,” Buttke told CNN. “What we’ve seen in the news in recent weeks and months with this summer is that we’re already experiencing much faster and higher impacts than a lot of the models have predicted, so it’s very possible our study is underestimating future risk.”

Notably, the study found the risk of heat-related illness was most pronounced during the cooler months during the peak season from April to September, something Buttke said highlights the risk of not being able to anticipate and prepare for the unpredictable nature of extreme heat in a warming world.

“I think that’s really the take home: The absolute temperature was less important than how expected that temperature was,” Buttke said. “It’s really about whether or not people expected high temperatures during that time.”

Even though heat illness increased during these cooler months, Buttke said it showed that behavioral adaptations, like wearing proper clothing, drinking plenty of water and avoiding the outdoors during the peak heat of the day, could have a substantial impact on reducing these heat-related illnesses and that the park service could use this insight to improve communication ahead of “unexpected” heat waves.

The volatility and danger of heat is something parks and people will have to prepare for as long as emissions and warming continue on its current pace.

“It tells us so much of the impact of climate change is the variability and the unexpected nature,” Buttke said. “We evolved under a climate that was very predictable and climate change is taking us into a new climate that is very unpredictable and that’s where the greatest risk exists.”

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A New Government Agency Is Planning for the Mysterious 'Disease X'

HERE COME THE DEEP STATE CONSPIRACIES

Tim Newcomb
Wed, August 9, 2023




‘Disease X’ Now a Security and Diplomacy Concern

Jose A. Bernat Bacete - Getty Images

The U.S. State Department has created the Bureau of Global Health Security and Diplomacy to respond to infectious diseases.

Battling HIV/AIDS will be a top priority, but the bureau will also focus on other health threats, including preventing pandemics.

Health security is now a component of U.S. national security and foreign policy.

The latest United States government agency aims to protect the country against outside health threats. As this is now deemed a national security issue, it’s a State Department mission to make it happen.

The State Department launched the new Bureau of Global Health Security and Diplomacy with the “overarching mission” of fortifying global health security architecture. The aim is to prevent, detect, control, and respond to infectious diseases. This is all part of a plan to integrate “global health security as a core component of U.S. national security and foreign policy,” according to a statement from Antony Blinken, Secretary of State.

“By leveraging and coordinating U.S. foreign assistance, the bureau aims to foster robust international cooperation,” he said, “enhancing protection for the United States and the global community against health threats through strengthened systems and policies. The COVID-19 pandemic underscored the vital role the United States must play in addressing global health and health security issues.”

John Nkengason, the Biden administration’s global AIDS coordinator, will lead the bureau focusing on both HIV/AIDS and unknown potential threats—referred to as Disease X.

“We need to be more intentional and really consider global health security as national security,” Nkengason told NPR. Citing the lives and dollars lost during the COVID-19 pandemic, he says there’s a global need to strengthen disease surveillance systems, reenforce supply chain management systems, and decentralize production of health security commodities.

As Nkengason told PBS, the recent pandemic taught us “that a threat anywhere in the world is a threat everywhere in the world.” He noted that it took only 20 days for COVID-19 to spread to 66 countries after first being recognized in China.

The goal of the new bureau is to elevate diplomacy in order to help countries coordinate to address disease threats, advance health security as part of foreign policy, and coordinate domestic efforts as a tool in responding to disease outbreaks.

“When disease[s] emerge,” he said, “they move very quickly.”

Nkengason currently leads the President’s Emergency Plan for AIDS Relief (PEPFAR), started by then-president George W. Bush in 2003. That program is scheduled to end this fall and hasn’t been extended, so some of the work there—Nkengason told NPR that the program has saved 25 million lives and prevented the transmission of HIV/AIDS to 5.5 million children—could transfer to the new bureau if not renewed.

No matter the future of PEPFAR, the Bureau of Global Health Security and Diplomacy is tasked with crafting a diplomacy and security plan to handle infectious disease, including Disease X.

“We are in an era,” Nkengason told NPR, “that we cannot plan only for the disease that we have—that we should plan for the long haul.”

COVID IS STILL WITH US

Cats in Cyprus treated with COVID medicine as virus kills thousands on island


BY EMMET LYONS
AUGUST 10, 2023 

The health ministry in Cyprus began administering human anti-COVID medication on Thursday in an effort to stamp out a virus that has killed thousands of felines on the Mediterranean island.

Christodoulos Pipis, the veterinary services director for the Cypriot government, told The Guardian newspaper Thursday that the Cypriot health ministry has stocked 500 boxes of anti-COVID medication in an effort to quell the crisis.

A stray cat eats at a cemetery in Nicosia on June 14, 2023. A new strain of feline coronavirus, Feline infectious peritonitis (FIP) -- which is not transmittable to humans -- is wreaking havoc on the prolific cat population of Cyprus

 CHRISTINA ASSI / AFP VIA GETTY IMAGES

"This is the first batch of 2,000 packages that will be made available. Each one contains 40 capsules, so we are talking about a total of 80,000 [anti-COVID] pills," Pipis said.

Feline infectious peritonitis (FIP), a virus that is not transmittable to humans, has rapidly spread across the feline population in Cyprus over the past few months.

Local animal rights activists had claimed that as many as 300,000 cats had been wiped out by the deadly disease, but Cyprus Veterinarians Association President Nektaria Ioannou Arsenoglou told The Associated Press last week that the number had been greatly exaggerated.


A survey of 35 veterinary clinics conducted by her association found an island-wide total that was closer to around 8,000 deaths, Arsenoglou said.

Arsenoglou told the AP that FIP medication can nurse cats back to health in approximately 85% of cases but that providing treatment had proven challenging due to the high price of the medication for many cat care givers.

The infection is almost always fatal if left untreated, she said.

On Friday, the veterinarians association applauded the government's decision to let its stock of human coronavirus medication to be used on cats on the island.

The association said in a statement that it had lobbied for access to the medication at "reasonable prices" since the beginning of the year, when the spread of the virus became noticeable in the island's cat population.

FIP is not a new virus and has been in circulation since 1963. The disease typically spreads through cat feces and symptoms of the disease in felines include loss of appetite, weight loss, depression and fever, according to Cornell University College of Veterinary Medicine.

Nicknamed the "Island of Cats," Cyprus' link with felines goes back thousands of years.

In 2004, a team of French archaeologists discovered what was described at the time as the earliest historical record of cat domestication, in a 9,500-year-old burial site.

Helen of Constantinople was also said to have sent boatloads of cats to the island to hunt venomous snakes in 400 AD.

Today, a large number of feral cats are known to wander the island although an exact figure is unknown.

FORDISM IS GLOBALIZATION
Vietnamese EV maker VinFast gets go ahead for Nasdaq SPAC listing

Phuong Nguyen
Thu, August 10, 2023 

Press day at the Los Angeles Auto Show

By Phuong Nguyen

HANOI (Reuters) -Vietnamese electric vehicle maker VinFast said it expects to start trading on the U.S. Nasdaq as soon as next week after its merger into a special purchase acquisition company (SPAC) was approved on Thursday.

Shareholders of Hong Kong-based Black Spade Acquisition, a blank-check company, voted on Thursday to approve the merger with VinFast.

VinFast, in a joint statement with Black Spade, said it would list on the Nasdaq under the ticker symbol VFS "on or around August 15".

Remaining shareholders of Black Spade approved the merger on Thursday. In July, over 80% of the shareholders in the SPAC had opted to redeem their shares before the merger.

The SPAC merger will not raise new capital for VinFast but the company's founder Pham Nhat Vuong has championed a U.S. listing as the carmaker seeks to expand in the U.S. market and is building a plant in North Carolina.

The merger had valued VinFast at $23 billion, the two companies said. In comparison, the current market capitalisation of U.S.-listed EV makers Rivian and Lucid are $21 billion and around $17 billion respectively.

It leaves VinFast's existing shareholders, including parent company Vingroup and Vuong, Vietnam's richest man, with 99% of shares in the company.

"The voting results today are a vote of confidence in VinFast from Black Spade shareholders," VinFast's global head Thuy Le said in the statement.

VinFast had filed for an initial public offering on the Nasdaq last December, but in May announced plans to list through a merger with Black Spade.

Other EV makers including Faraday Future, Nikola Corp and Lucid have listed via SPAC deals but the market for such deals has faced increased scrutiny from investors and regulators.

VinFast has shipped around 3,000 EVs to the United States from its plant in Haiphong, Vietnam. It started to deliver its first VF8 EVs in March. It has not announced U.S. sales figures.

VinFast's first quarter revenue dropped 49% from the previous year and it posted a net loss of $598 million. In 2022, the company posted a loss of $2.1 billion. It has not yet made a profit.

Vuong, who is also chairman of Vingroup, Vietnam's largest conglomerate, told Vingroup shareholders in May that VinFast expected to sell as many as 50,000 EVs this year and could break even as soon as the end of 2024.

The company has previously missed some of its internal delivery targets and faces competition from established rivals led by Tesla, which have been driving down prices and bringing a range of new EVs to market.

Black Spade was founded by the private investment arm of Lawrence Ho, son of the late gambling mogul Stanley Ho.

(Reporting by Phuong Nguyen; Editing by Kirsten Donovan and Susan Fenton)

ONE PARTY STATE

Palestinian President Mahmoud Abbas fires nearly all governors in West Bank in major upheaval

FILE - Palestinian President Mahmoud Abbas speaks during a conference to support Jerusalem at the Arab League headquarters in Cairo, Egypt, on Feb. 12, 2023. Palestinian President Mahmoud Abbas has fired most of the governors in the occupied West Bank. The move follows long-standing demands for a political shake-up as frustration grows with the semi-autonomous Palestinian Authority. Abbas issued a decree dismissing the governors of eight provinces under Palestinian administration in the occupied territory. 

(AP Photo/Amr Nabil, File)


Associated Press
Thu, August 10, 2023

RAMALLAH, West Bank (AP) — Palestinian President Mahmoud Abbas fired most of the governors in the occupied West Bank on Thursday, responding to long-standing demands for a political shake-up as frustration grows with the semi-autonomous Palestinian Authority.

Abbas issued a decree dismissing the governors of eight provinces under Palestinian administration in the occupied territory. The upheaval included the restive northern cities of Nablus, Jenin and Tulkarem, the focus of a recent surge in Palestinian militancy that has undermined the authority’s leadership. Only three areas — including Ramallah, the seat of the Palestinian Authority — retained their governors. The president’s office said that he would form a committee to suggest replacements.

Although the decision is unlikely to have an immediate impact on the ground, experts said it signals Abbas’ recognition of the authority’s deepening unpopularity and his desire to show that he is heeding calls for change in the face of mounting difficulties.

"It gives the authority a new face, which is important particularly as the governors are in charge of all security matters,” said political analyst Jehad Harb. “But it won’t change anything really. (Abbas) is trying to rebuild some public trust, but it will take much more.”

Palestinians have not had the chance to vote in national elections since 2006. Abbas’ original four-year term technically ended in 2009.

Although governors said they had expected an overhaul for years given growing demands for change, many said Thursday’s decree took them by surprise. Yet none expressed dissent with the decision of the president, who rule has become increasingly autocratic in the past years.

"I can understand how fresh blood is important,” said Jihad Abu al-Assal, the governor of Jericho and the Jordan Valley. “This is the president’s decisions and even if we don’t understand all the reasons for it, we will comply.”

The move comes as the secular nationalist Fatah party, which runs the internationally recognized Palestinian Authority, grapples with mounting crises — internal and otherwise.

Israeli Prime Minister Benjamin Netanyahu’s far-right government has imposed numerous sanctions on the authority, expanded settlements on lands Palestinians seek for a future state and overseen Israeli military raids into West Bank cities that Palestinian officials say weaken their control. Powerful ministers in the government have openly called for the collapse of the authority and the annexation of the West Bank. These policies have been accompanied by a surge in vigilante settler violence against Palestinians.

Internal tensions have escalated since 2021, when Abbas delayed Palestinian legislative elections in which Fatah was expected to suffer another embarrassing defeat to the Hamas militant group. Hamas wrested control of the Gaza Strip in 2007 — a year after winning Palestinian parliamentary elections.

Over the past two years, surging violence in the occupied West Bank has added to the authority’s troubles. The recently emerging ties between Fatah activists and Islamic militant groups — particularly in flashpoint cities such as Jenin and Nablus — have rattled the security establishment and underscored internal divisions.

Given that the authority maintains security coordination with Israel, Palestinians increasingly see it less as a government than a vehicle for corruption and collaboration. Public services have declined as strikes for better pay among teachers, lawyers and other civil servants cripple key sectors.

Abbas’ decree also fired three governors in the Gaza Strip, whose role has remained symbolic since the 2007 Hamas takeover of the enclave.

The head of one of the biggest property developers in China was once Asia's richest woman. But her wealth has plunged by 84% since mid-2021 — and now her company's teetering on the brink of a crisis.

Kai Xiang Teo
Thu, August 10, 2023 

Yang Huiyan lost 84% of her wealth — more than any billionaire since the COVID-19 pandemic — as China's property sector teeters on yet another crisis.

Wealth-X; Country Garden Danga Bay/Facebook; Shayanne Gal/Business Insider

Yang Huiyan, the chair of the property giant Country Garden, has lost about $29 billion since 2021.


Huiyan lost $490 million on Tuesday as her company missed interest payments, according to Bloomberg.


Country Garden reported that sales plummeted by 30% year-on-year in the first six months of 2023.

Yang Huiyan — once Asia's wealthiest woman — has lost more of her wealth than any billionaire since June 2021 as China's top property developer, Country Garden, grapples with a debt crisis.

Yang's net worth has plummeted by 84%, or $28.6 billion, since its peak in June 2021, Bloomberg reported. The 41-year-old's net worth is now $5.5 billion, per Bloomberg's Billionaires Index.

These losses come as Country Garden missed interest payments on two US-dollar-denominated bonds, according to various media reports, including a Reuters report on Wednesday. The company now has a 30-day grace period to avoid an official default.

The company's Hong Kong-listed stocks have plunged by 20.4% since Monday. Yang derives much of her wealth from a 52.6% stake in the company, per a Monday report by the ratings agency Moody's. She saw her wealth tank by about $490 million on Tuesday.

Before taking over as majority shareholder of the company from her father in 2007, Yang graduated from Ohio State University as part of the class of 2003 with a bachelor's degree in marketing and logistics.

But Country Garden's fortunes have waned since. The company remains China's biggest property developer in sales, but its market value has more than halved since the start of the year, according to The New York Times.

In July, the company reported sales of 128.76 billion yuan, or about $17.8 billion, in the first six months of the year, marking a 30% decrease compared to the same period last year.

Yang, who became China's richest woman at 25 after the company's IPO, lost the spot of Asia's richest woman in August 2022 to Savitri Jindal. Jindal, India's richest woman, is the chairperson emeritus of the Indian conglomerate O.P. Jindal Group, per Bloomberg.

On July 30, Yang announced that she was giving away 55% of her shares in Country Garden to a charity founded by her younger sister in a payout valued at $826 million, per Bloomberg.

Country Garden and Yang Huiyan did not respond to requests for comment from Insider.

China hailed a property developer with $64 billion in revenue as a role model. Now the country’s property crisis threatens to send it into default too

Nicholas Gordon
Thu, August 10, 2023 

Qilai Shen—Bloomberg/Getty Images

Country Garden was supposed to be a survivor of China’s property crisis.

Officials hailed the company, led by chair Yang Huiyan, as a model developer. It avoided default even as competitors missed payments in late 2021 and early 2022. It delivered its audited results on time, while auditors were busy bailing on the sector. And investors were hopeful that Country Garden, which generated $64 billion in revenue last year, would benefit from Beijing’s promised support measures for the housing market.

Yet now China’s property crisis is getting so bad that even this role model is now under threat, and it doesn’t bode well for the industry.

“If Country Garden, the biggest privately owned developer in China goes down, that could trigger a crisis in confidence for the property sector,” Edward Moya, a senior market analyst for Oanda, wrote in a Tuesday note.

On Tuesday, Country Garden confirmed that it failed to make a $22.5 million interest payment on some of its dollar-denominated bonds. If it doesn’t pay within a 30-day grace period, it will be in default for the very first time.

“The developer’s struggle to address even a modest coupon payment underscores the extent of its cash crunch,” Sandra Chow, head of Asia-Pacific research at CreditSights, told the New York Times.

The bonds in question are now trading at just 8 cents to the dollar, according to the Wall Street Journal citing Tradeweb data, a sign that traders have all but priced in a default.

In a stock filing to Hong Kong’s exchange on July 31, the developer had warned of a net loss in the first half of 2023, down from a net profit of $264 million in the previous year’s period. It blamed the loss on charges incurred from writing down the value of its properties following a downward slide in home prices.

In its filing, Country Garden said it would “actively seek guidance and support from the government and regulatory authorities.”

The very next day, however, the developer abruptly canceled a $300 million share sale, citing a failure to come to a “final agreement.”

Investors now fear that Country Garden could be the next major developer to fall in China’s already yearslong property crisis. Shares in the developer are down by over 60% since the start of January.
Country Garden vs. Evergrande

Founded in 1992, Country Garden stood in contrast to China Evergrande Group, the massive property developer whose default in 2021 arguably marked the start of China’s property crisis.

Evergrande, at one point China’s largest developer, loaded up on debt to fuel its rapid expansion. The company splurged on big, expensive projects, like Ocean Flower Island, a $35 billion set of artificial islands similar to Dubai’s Palm Jumeirah.

Yet new rules on how much debt developers could hold sent Evergrande into a liquidity crisis, and the company defaulted on its foreign-held debt in December 2021. Other developers, like Kaisa Group and Shimao Group Holdings, also defaulted on their payments.

Last month, Evergrande finally revealed that it has lost a combined $81 billion in 2021 and 2022. The developer also reported $340 billion in liabilities, including $85 billion in more short-term borrowings.

Unlike Evergrande, investors saw Country Garden as far more financially prudent. The developer didn’t borrow as heavily as its peers, and focused on building affordable homes in China’s less prominent and less developed cities. The developer had $199 billion in liabilities at the end of 2022, according to Bloomberg.

Still, Country Garden could not escape the overall slowdown in China’s property sector, and the developer was forced to report a $900 million loss for 2022 after revenue slumped by a fifth.

Yet the hopes of Country Garden’s investors had initially been buoyed by official promises of support for the property sector late last year. The sector received access to billions of dollars in loans from Chinese state-owned banks, as part of a broader scheme to provide liquidity to developers.

Now, more than halfway through 2023, the story is far different. Home prices are falling again: An official index of home prices in 70 cities reported a 2.2% year-on-year decline last month, and investment bank Goldman Sachs is warning of “persistent weakness” in the real estate sector.

Country Garden’s decision to focus on China’s poorer areas may also be backfiring, since home price declines have been steeper in less developed cities.

Wealthier cities are also considering easing restrictions on property purchases, threatening to soak up demand from low tier cities, which account for 70% of national new home sales volume, analysts at Nomura noted in a report last week.

This story was originally featured on Fortune.com

ASSASSINICO
Reaction to killing of Ecuador presidential candidate Villavicencio

Ecuadorean presidential candidate Fernando Villavicencio campaigns in Quito

Reuters
Updated Thu, August 10, 2023

QUITO (Reuters) -The following are reactions to the assassination of Ecuadorian presidential candidate Fernando Villavicencio on Wednesday.

WHITE HOUSE NATIONAL SECURITY SPOKESMAN JOHN KIRBY

"It's heartbreaking for him and for his family, for his supporters. And I'm sure that all of Ecuador is grieving right now.

"We obviously hope that there'll be a full, complete and transparent investigation into this and that the perpetrators are held properly accountable."

ECUADOREAN PRESIDENT GUILLERMO LASSO

"For his memory and his fight, I assure you that this crime will not remain unpunished. Organized crime have gone very far, but all the weight of the law will fall on them."


VILLAVICENCIO'S PARTY MOVIMIENTO CONSTRUYE

"We have not yet found a way to react to the horror and pain of the assassination of our presidential candidate.

"A few days ago, after the assassination of Mayor Intriago, there was a discussion about what to do with the campaign, suspend it some days, or redouble security. Fernando was radical about it and shared on his social media: "Guarding silence and hiding in moments when criminals assassin citizens and authorities is an act of cowardice."

RAFAEL CORREA, EX PRESIDENT OF ECUADOR

"Ecuador has become a failed state. The country hurts. My solidarity with his family and with all the families of the victims of violence. Those who intend to sow even more hatred with this new tragedy, I hope they understand that it only continues to destroy us."

ECUADOREAN PRESIDENTIAL CANDIDATE LUISA GONZALEZ

"This makes us all mourn, my solidarity to all his family ... This vile act will not go unpunished!"

ECUADOREAN PRESIDENTIAL CANDIDATE DANIEL NOBOA AZIN

"This is an attack against the country, democracy and peace of all Ecuadorians."

ECUADOREAN PRESIDENTIAL CANDIDATE XAVIER HERVAS

"We have reached a critical point. My solidarity with the family of Fernando Villavicencio. He is one more Ecuadorian who has fallen victim to organized crime."

ORGANIZATION OF AMERICAN STATES (OAS)

"We urge all candidates to strengthen their security measures and call upon the authorities to provide the necessary support to guarantee the integrity of the participants in the electoral process. The security of candidates is fundamental to maintaining confidence in the democratic system."

U.S. AMBASSADOR TO ECUADOR MIKE FITZPATRICK

"I am deeply dismayed to learn of the assassination of Fernando Villavicencio, presidential candidate and fighter against the corruption and narco-criminals who have done so much damage to Ecuador."

"The U.S. Government strongly condemns this attack and offers urgent investigative assistance."

CHINA FOREIGN MINISTRY

"China condemns the attack and expresses condolences over the assassination of Villavicencio," the ministry said in a statement. "China hopes that the Ecuadorian government and relevant parties will maintain the stability of the situation and the upcoming general election will be safe, stable and smooth."

GOVERNMENT OF COLOMBIA

“We reaffirm our solidarity with the Ecuadorian people and trust in the strength of the institutions of the sister Republic of Ecuador to clarify the facts and punish those responsible.

"The Government rejects this act, which is an attack against the leaders, the people and democracy of the neighboring country."

MEXICAN FOREIGN AFFAIRS MINISTRY

"The ministry, on behalf of the Mexican government, regret the acts of violence that occurred in Quito, Ecuador, which ended the life of presidential candidate Fernando Villavicencio, and express their solidarity with the Ecuadorian government and people.

"We condemn any violent act that violates the will of the Ecuadorian people and we hope that peace is restored within the democratic electoral process of our brother country."

URUGUAY GOVERNMENT

The Government of Uruguay expresses its condemnation and consternation for the assassination of presidential candidate Fernando Villavicencio perpetrated yesterday afternoon in Quito, and extends its condolences to his family, government and Ecuadorian people.

PARAGUAY'S PRESIDENT-ELECT SANTIAGO PENA

"We repudiate and condemn the assassination of Ecuadorian presidential candidate Fernando Villavicencio.

"We stand with the sister nation of Ecuador at this difficult time."

CHILEAN GOVERNMENT

"The Government of Chile expresses its strong condemnation and deep repudiation of the assassination of the presidential candidate, Fernando Villavicencio, which occurred today in Quito, and extends its condolences to the Ecuadorian Government and people and, in particular, to his family."

"This unjustifiable fact reminds us of the importance of strengthening democratic coexistence and dialogue as a tool to fight intolerance and violence."

BRAZILIAN MINISTRY OF FOREIGN AFFAIRS

"By expressing confidence that those responsible for this deplorable act will be identified and brought to justice, the Brazilian government conveys its heartfelt condolences to the presidential candidate's family and to the Ecuadorian government and people."

HONDURAN PRESIDENT XIOMARA CASTRO

"We strongly condemn the assassination of presidential candidate Fernando Villavicencio. Defeating organized crime is the mandate of our democracies. Our solidarity with the people of Ecuador."

GOVERNMENT OF SPAIN

"Spain regrets and condemns the murder of Ecuadorian presidential candidate Fernando Villavicencio. The government of Spain supports the Ecuadorian electoral process, its democracy and the authorities of that country so that this tragic death is investigated, and the guilty parties are brought to justice."

FRENCH FOREIGN MINISTRY

"The assassination of Mr. Fernando Villavicencio ... is a barbaric act and an attack on democracy that we condemn in the strongest terms."

(Reporting by Alexandra Valencia in Quito; Additional reporting by Isabel Woodford, Valentine Hilaire and Caroline Pulice in Mexico City and Natalia Siniawski in Gdansk; Editing by Lincoln Feast and Tomasz Janowski)

US economy in 'uncharted waters' as inflation falls with low unemployment -study

Thu, August 10, 2023 
By Howard Schneider

WASHINGTON (Reuters) - U.S. Federal Reserve officials are in "uncharted waters" with no clear historical guide as they set monetary policy in an environment with inflation falling but no increase as yet in the unemployment rate, Richmond Fed staff said in a new research note analyzing a central bank rate cycle they deemed "unlike any other."

"The current cycle is the first time over the entire postwar period the (Federal Open Market Committee) has made significant progress in lowering inflation without an associated increase in the unemployment rate," Richmond Fed staffers including senior adviser Pierre-Daniel Sarte wrote in the paper, published Wednesday on the bank's website.

"The current rate episode sees us in uncharted waters," with the Fed facing the largest-ever gap between inflation and the target federal funds rate when officials started tightening monetary policy in March of 2022, and now seeing the unemployment rate remain stable and low despite the fastest increase in interest rates in at least 40 years, the researchers wrote.

Whether that sort of cost-free decline in inflation can continue will be at the center of Fed discussion in coming weeks as policymakers decide whether they have moved interest rates high enough, or whether further rate hikes are needed.

New data to be released Thursday morning may do little to move the discussion.

Economists polled by Reuters project the consumer price index rose at a 3.3% annual rate in July, a slight increase over June's 3% reading.

But that headline number will be influenced by the fact that some of the largest monthly price increases, registered in mid-2022, are now falling out of the current annual calculation.

Underlying price trends are expected to show continued slowing in inflation, with the CPI on a three-month annualized basis and stripped of food and energy costs rising 3.2% as of July compared to 4.1% as of June, wrote Inflation Insights President Omair Sharif.

"The summer of disinflation will likely continue" despite the rise in the headline inflation number, he said.

The direction for the Fed so far has been a good one, with inflation as measured by the CPI down from a peak of 9.1% in June of last year.

The Fed has raised the federal funds rate 5.25 percentage points since March of last year, with policymakers approving rate increases at 11 of the last 12 meetings in a sequence of actions meant to discourage borrowing and spending, and slow both the economy and the pace of price increases.

Typically, that would be associated with a jump in unemployment as businesses and consumers scale back. Yet the unemployment rate has remained below 4% -- low for the U.S. -- since February of 2022, and stood at 3.5% as of last month.

Fed policymakers have offered different interpretations of why that's happening, from "labor hoarding" among firms scarred by how hard it was to hire during the pandemic, to inflation that may have been driven largely by problems in supply chains that have slowly corrected. Others feel the economy remains slow to adjust to higher interest rates, and that the unemployment rate will ultimately rise before the Fed finishes its inflation fight.

How Fed officials analyze those sorts of nuances will determine whether they follow through with another rate increase at some point this year -- the majority view among policymakers as of their latest projections, issued in June -- or decide that the current target interest rate range of between 5.25% and 5.5% is adequate.

Their next meeting is Sept. 19-20, with many analysts and investors at this point betting the Fed will not raise rates again.

Policymakers have been reluctant to commit. The gap between the last Fed meeting in July and the next one is an unusually long eight weeks, giving them two full months of data to consider.

As of June, one closely watched measure of prices, the personal consumption expenditures price index excluding food and energy, was still running more than double the Fed's 2% target. Only two Fed officials so far have publicly said they feel rates do not need to go higher, with others saying they want the "totality" of the data in hand before making a decision.

Given the unique circumstances, the Richmond Fed researchers noted risks on both sides.

The current Fed "has been uniquely successful thus far in lowering inflation while leaving the unemployment rate at its lowest levels in roughly half a century," they wrote, with the potential that policy tightening so far "may bring about further declines in inflation without a dramatic rise in the unemployment rate. This would be a first in the postwar U.S. economic experience."

Still, "with little guidance from past rate cycles, the FOMC will have to remain vigilant to avoid missing its target should the economy prove more resilient than anticipated."

(Reporting by Howard Schneider; Editing by Andrea Ricci)