Friday, February 28, 2014

CALIFORNIA COUPLE IN $10M GOLD FIND MAY OWE GOVERNMENT ABOUT HALF, REPORT SAYS

  • Gold3.jpg
    Feb. 25: David Hall, co-founder of Professional Coin Grading Service, poses with some of 1,427 Gold-Rush era U.S. gold coins, at his office in Santa Ana, Calif. (AP)
One couple's gold find could mean a jackpot for the IRS.

The Northern California couple that found $10 million worth of rare, mint-condition gold coins buried in the shadow of an old tree on their property will likely owe about half the find's value whether they sell the gold or not.

The San Francisco Chronicle reports that the find is a taxable event under a 1969 federal court ruling that held a "treasure trove" is taxable the year it was discovered.

"If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession,” the report said, citing the IRS tax guide.

The report says after all is said and done, about 47 percent will go to state and federal tax, or the top tax rate.

An accountant told the paper that the couple can try to fight the tax and claim it was there when they bought the property.

Nearly all of the 1,427 coins that were found, dating from 1847 to 1894, were in uncirculated, mint condition, said David Hall, co-founder of Professional Coin Grading Service of Santa Ana, which recently authenticated them. Although the face value of the gold pieces only adds up to about $27,000, some of them are so rare that coin experts say they could fetch nearly $1 million apiece.

"I don't like to say once-in-a-lifetime for anything, but you don't get an opportunity to handle this kind of material, a treasure like this, ever," said veteran numismatist Don Kagin, who is representing the finders. "It's like they found the pot of gold at the end of the rainbow."

Kagin, whose family has been in the rare-coin business for 81 years, would say little about the couple other than that they are husband and wife, are middle-aged and have lived for several years on the rural property where the coins were found. They have no idea who put them there, he said.

The pair are choosing to remain anonymous, Kagin said, in part to avoid a renewed gold rush to their property by modern-day prospectors armed with metal detectors.

They also don't want to be treated any differently, said David McCarthy, chief numismatist for Kagin Inc. of Tiburon.

They plan to put most of the coins up for sale through Amazon while holding onto a few keepsakes. They'll use the money to pay off bills and quietly donate to local charities, Kagin said.

Before they sell them, they are loaning some to the American Numismatic Association for its National Money Show, which opens Thursday in Atlanta.

What makes their find particularly valuable, McCarthy said, is that almost all of the coins are in near-perfect condition. That means that whoever put them into the ground likely socked them away as soon as they were put into circulation.

Because paper money was illegal in California until the 1870s, he added, it's extremely rare to find any coins from before that of such high quality.

"It wasn't really until the 1880s that you start seeing coins struck in California that were kept in real high grades of preservation," he said.

The coins, in $5, $10 and $20 denominations, were stored more or less in chronological order, McCarthy said, with the 1840s and 1850s pieces going into one canister until it was filed, then new coins going into the next one and the next one after that. The dates and the method indicated that whoever put them there was using the ground as their personal bank and that they weren't swooped up all at once in a robbery.

Although most of the coins were minted in San Francisco, one $5 gold piece came from as far away as Georgia.

Kagin and McCarthy would say little about the couple's property or its ownership history, other than it's in a sprawling hilly area of Gold Country and the coins were found along a path the couple had walked for years. On the day they found them last spring, the woman had bent over to examine an old rusty can that erosion had caused to pop slightly out of the ground.

"Don't be above bending over to check on a rusty can," he said she told him.

The Associated Press contributed to this report

http://www.foxnews.com/us/2014/02/27/california-couple-in-10m-gold-find-to-owe-govt-about-half-report-says/ 

 

CRACKING THE CRYPTIC WORD OF BITCOIN AND VIRTUAL CURRENCIES

February 8, 2014 Stephen Hutcheon 

Whoever or whatever he is, Satoshi Nakamoto's legacy has flourished. Whoever or whatever he is, Satoshi Nakamoto's legacy has flourished. Photo: Reuters

The story of cryptocurrencies and why they have suddenly bobbed to the surface from the deep, dark reaches of online activity starts with the name Satoshi Nakamoto.

In 2008, Nakamoto - who purported to be a 37-year-old male living in Japan disillusioned with the global banking system - popped up as the author of an online manifesto on a peer-to-peer electronic cash system. A year later, Bitcoin was born when ''Nakamoto'' turned his theory into the uncrackable code that underpinned a new virtual currency.

For a time, he actively engaged with the Bitcoin community. But in April 2011, his posts and emails suddenly ceased with a see-you-later message.

Bitcoin slugs sitting in a box ready to be minted Bitcoin slugs sitting in a box ready to be minted. Photo: AFP

Conspiracy theories emerged, including that the Nakamoto manifesto was the work of a reclusive mathematics genius called Shinichi Mochizuki, a group of economists attempting a large-scale social experiment or a government agency.


Whatever the truth, his legacy has flourished. The value of the bitcoin market today tops $US10 billion ($11.1 billion).

Last month, The New York Times published a 3000-word homage to Bitcoin, written by Marc Andreessen, one of Silicon Valley's most respected venture capitalists.

Andreessen, whose firm has already invested $US50 million in bitcoin-related ventures, sees the cryptocurrency as a way to disrupt the cosy, high-cost, high-fee world of banking and usher in new ways to pay for goods and services.

''Bitcoin, as a global payment system anyone can use from anywhere at any time, can be a powerful catalyst to extend the benefits of the modern economic system to virtually everyone on the planet,'' he writes.

The cryptocurrency movement is likened to Napster, the peer-to-peer music pirating network which briefly flourished in the late '90s and early part of this century before it was shut down by legal authorities at the behest of the music industry. While Napster perished, its DNA lived on in legitimate online services such as iTunes and today's many music streaming services such as Pandora, Spotify and Rdio.

There's institutional indifference - despite links to drug and arms dealers, terrorists and money launderers - but the smart money is betting that cryptocurrencies will live on too.

Here's how these virtual currencies work:

What is a cryptocurrency?

A cryptocurrency is a digital or virtual medium of exchange that uses encrypted software to maintain a secure and transparent network for transactions controlled collectively by those using the network.
It's a peer-to-peer operation, not unlike the file-sharing protocol BitTorrent which is most closely associated with the illegal sharing of movies, TV shows and music.

How many cryptocurrencies are there?

The market for such payment instruments is dominated by bitcoin, but there are other currencies including litecoin and, more recently, dogecoin (pronounced dohj coin), both of which are based on Nakamoto's code.

Others have exotic names such as ripples, megacoin, kittehcoin, lottocoin, doubloons, hobonickels, nanotoken and philosopher stones. There is a ''sexcoin'' which claims to specialise in servicing adult content consumers, performers and producers.

There are about 80 listed on one of the leading cryptocurrency tracking websites, but many of them have tiny market capitalisations and turnovers.

What are they worth?

At the time of writing, one bitcoin is worth $US825. At the lower end of the scale, one dogecoin is equal to $US 0.0016 - in other words, one US dollar is worth 625 dogecoins.

Values fluctuate based on supply and demand (and market sentiment). The bitcoin to US dollar exchange rate recently dropped after the founder of a leading bitcoin exchange was arrested over his links with the Silk Road online drug bazaar. But over the past year, bitcoin has jumped by over 5000 per cent.

Overall, bitcoin's market capitalisation is north of $US10 billion, litecoin's is $US500 million plus, dogecoin is hovering around $US60 million. Languishing near the bottom of the league at $US80,000 is craftcoin, a specialist cryptocurrency designed for use inside the Minecraft virtual world.

How are cryptocurrencies established?

The key feature of the Bitcoin protocol and its spin-offs is that everything is governed by algorithms, including the rate at which the currency is created (or mined) - the equivalent of printed or coined in the physical world.

The algorithms determine the release of coins at a decreasing rate over time until there is a final pre-determined worldwide supply (only 21 million in the case of bitcoin). This mimics the extraction of a finite resource - such as oil - in the real world.

What is ''mining''?

Mining is the the process whereby computers are challenged to solve complex mathematical problems (algorithms) so their owners can obtain the virtual coinage as reward. As the supply shrinks, the mathematical equations become progressively more difficult to solve.

Theoretically it is possible to start mining using your home PC but as the challenge becomes harder, more computational grunt is required to crack the codes. For this reason individuals often join pools to get access to supercomputers or huge server farms (networked arrays of smaller computers).

In this case, the proceeds of mining are split. Serious miners would also consider buying (or renting) purpose built mining hardware to do the job. You have to download the software and set up a virtual wallet to receive the mined coin.

How do you buy and sell it?

It's a bit like a direct transfer between accounts with verification determined by the algorithm, which ensures that the same unit of currency can't be owned by more than one person.

In most cryptocurrencies, accounts known as wallets are stored either locally on hard drives or remotely in the cloud.

While individuals and entities can (and do) adopt pseudonyms to go about their business, every transaction they make is recorded in a ledger called the blockchain, held by every currency owner, and each time a transaction is made, the ledger is updated. That's why in the case of bitcoin, it takes about ten minutes to ratify a transaction. In the case of dogecoin, it takes a minute. This process of checking the ledger ensures that the coinage is not double-spent.

Because of its widespread adoption, bitcoin is the most liquid of the alternative currencies.

Companies, individuals in person, bitcoin exchanges and even bitcoin ATMs will cash them into US dollars and other currencies. Other cryptocurrencies, such as dogecoin, generally have to be swapped first into bitcoin.

What can you buy with it?

While the bartering of goods and services in return for bitcoin on a person-to-person level over the internet has become standard, in recent months larger enterprises have begun accepting bitcoin in lieu of conventional cash or credit. In the US, discount internet retailer overstock.com, electronics online retailer TigerDirect and two Nevada casinos have recently announced they would accept bitcoin as payment. In Australia, acceptance is largely limited to small businesses and sole traders. There have been examples of people selling real estate and cars in exchange for virtual cash.

Is it safe?

Not for the uninitiated. It's still the Wild West. Despite the built-in safety checks, the infrastructure around cryptocurrency markets is vulnerable and the bigger ones have proven a magnet for thieves, hackers and fraudsters. But the same could be said of the sharemarket.


MT GOX FILES FOR BANKRUPTCY IN JAPAN AFTER COLLAPSE OF BITCOIN EXCHANGE

The bitcoin exchange has debts of £38m and assets of just £22.6m, it reported on Friday
Mt. Gox CEO Mark Karpeles
MtGox CEO Mark Karpeles bows in apology at a press conference at the Justice Ministry in Tokyo Friday night, Feb. 28, 2014. Photograph: i/AP
MtGox filed for bankruptcy protection in Tokyo on Friday, with the world’s former biggest bitcoin exchange blaming “a weakness in our system” for its collapse.

The exchange’s CEO Mark Karpeles, bowing, apologised at a news conference for causing trouble to so many people, and said that he intended to launch a criminal complaint against the hacking attack which caused the site’s downfall. However, he added, he had no specific means to do so.

Mt Gox had liquid liabilities of 6.5bn yen (£38m), dwarfing its total assets of 3.84bn yen (£22.6m), the company said. It had 127,000 creditors in bankruptcy, just over 1,000 of whom are Japanese.
The news conference is Karpeles’ second public statement since MtGox deleted its website on Tuesday, following a terse comment released on Wednesday.

The “weakness” referred to by Karpeles is thought to be an issue related to “transaction malleability“, a loophole in the bitcoin system which was exploited by malicious actors to get free bitcoins from the site.

“MtGox filing for bankruptcy is not the end of bitcoin but it is the beginning of the end of bitcoin in its current form,” says currency trader Alistair Cotton of Currencies Direct. 

“Over the last year we’ve seen ever-increasing usage and with it huge volatility in value and blows from banks and regulators. These are growing pains as the currency evolves in front of our eyes and the MtGox bankruptcy is part of that.”

http://www.theguardian.com/technology/2014/feb/28/bitcoin-mtgox-bankruptcy-japan 

 

MT GOX COLLAPSE WON'T STOP BITCOIN EXPLOSION IN AUSTRALIA: MATONIS

February 28, 2014 David Ramli 

VISA's former chief foreign exchange rate trader, Jon Matonis, is tipping a Bitcoin explosion in Australia. VISA's former chief foreign exchange rate trader, Jon Matonis, is tipping a Bitcoin explosion in Australia. Photo: George Frey

Bitcoin Foundation executive director Jon Matonis says Australia is ripe for an explosion in Bitcoin use despite the overnight collapse of the currency's biggest trading house on Monday.

People still do trust Bitcoin - I think it's the third-party institutions that consumers have to do their due diligence on 
Mr Matonis previously worked at Visa as its chief foreign exchange trader and spoke to Fairfax Media on the sidelines of Mobile World Congress in Barcelona.

He said Bitcoin would recover from the mysterious overnight collapse of the world's biggest Bitcoin trading house, Mt Gox, which wiped more than $US300 million ($334.9 million) of the currency from the market.

"Any medium of exchange has the potential to be abused like that and Bitcoin is no different," Mr Matonis said. "Mt Gox failed because it failed to conduct the proper audits and the governance of that wasn't followed.

"But also the Japanese government didn't enforce the rules of existing regulations that were in place."
Mt Gox should never have been used as a bank for Bitcoins, he said.

"You could've kept your Bitcoins at home, you could've kept it on your laptop or on your phone," he said. "The ecosystem is actually getting stronger because of [the collapse], because the other exchanges are benefiting from this.

"People still do trust Bitcoin – I think it's the third-party institutions that consumers have to do their due diligence on."

Despite the collapse, Mr Matonis said the currency would continue to thrive and that Australia's consolidated banking sector, in which four big players dominate the market, was ideal for the controversial electronic currency.

"I think it would make it easier [for Bitcoin to become commonplace] and there's a similar situation in the Netherlands where they have four to five large banking institutions that are all connected through an existing payment network," he said. "Because of that, one Bitcoin exchange can hook into that payments network ... and they can have access to all of the country's banks.

"So I would say it's easier and Australia should look at what the Netherlands did."

Several institutions in Australia including the Reserve Bank of Australia and Eftpos are preparing for the creation of a central payments clearing hub.

The author travelled to Mobile World Congress courtesy of Huawei.

BITCOIN TRUE BELIEVERS UNFAZED BY LOSSES IN MT. GOX COLLAPSE

Some Bitcoins are pictured in this photo illustration in Sandy, Utah, January 31, 2014. REUTERS/Jim Urquhart REUTERS/Jim Urquhart
Some Bitcoins are pictured in this photo illustration in Sandy, Utah, January 31, 2014.
Credit: Reuters/Jim Urquhart REUTERS/Jim Urquhart

(Reuters) - Like other bitcoin evangelists, Ken Shishido is ready to write off the money he lost in the bankruptcy of Tokyo-based virtual currency exchange Mt. Gox as the price of revolutionizing global finance.

"In the early days of the automobile, there were traffic accidents because you didn't have traffic lights or pedestrian crossings," he said hours after Mt. Gox said on Friday it had lost up to half a billion dollars of investor funds, including some of his own. "But we didn't ban automobiles."

Shishido, who lives in Tokyo, was one of about 10,000 investors in Japan who became creditors in Mt. Gox's bankruptcy when the company capped a tumultuous period of weeks by filing for bankruptcy on Friday.

He lost about a tenth of his investment in bitcoin in Mt. Gox, he said, and expected none of that money to come back.

Early enthusiasts for the five-year-old crypto-currency were drawn to its revolutionary ideals of transparency and a lack of central or official control. There was also a heady mix of geek chic - the currency is "mined" through a process involving complex computer math - and laissez-faire Austrian economics.

Mt. Gox's loss is eye-popping but so too is the number of creditors - 127,000 - in what had been the world's biggest exchange. That means the average trader lost the equivalent of $3,500 in the bankruptcy at current bitcoin prices, assuming no money is recovered in the court-supervised restructuring in Tokyo set to play out over the following months.

VALUE SPIKES, CRASHES, TAKES OFF AGAIN

Bitcoin's value spiked in April 2013 as the crisis-racked Cyprus government clamped down on withdrawals and seized deposits, rattling faith in "fiat" currencies.

The crypto-currency soon crashed back. Late last year, as the number of exchanges and the virtual money's name recognition grew, it took off again.

Bitcoin gained wider acceptance - and took off again in price - late last year. It attracted high-profile proponents, like the investor twins Cameron and Tyler Winklevoss of Facebook fame, and speculators.

Investors interviewed after the exchange collapsed faulted the Tokyo exchange and Mt. Gox's French CEO Mark Karpeles, but they remained committed to the bitcoin idea.

Roger Ver, a big investor in Mt. Gox, said he did not know if he would ever get any of his lost bitcoin back.

"But the important thing to realize is that Mt. Gox is just one company using bitcoin. The bitcoin technology itself is still absolutely amazing," he said.

"Even if one email service provider is having a problem that doesn't mean people are going to stop using email. It's the same with bitcoin."

POSITIVE VIEW

Ver spoke of "all of the positive ways in which bitcoin is going to change the world ... if anything, it is kind of for the better of bitcoin that the irresponsible players are going out of business."
Shishido said he does not expect to get his virtual money back, but that the rest of his bitcoin investments had soared 10-fold in value.

Keiichi Hida, a bitcoin investor and member of the Japan Digital Money Association, lost 100,000 yen ($980) worth of bitcoins, which he got involved with as a form of "study". But he was unfazed.
"We should make it a national project to have bitcoin used nationwide at the time of the 2020 Tokyo Olympics," he said. "I think then everyone would come to Tokyo in an instant."

Mt. Gox CEO Karpeles, even after bowing to apologize for the exchange's bankruptcy, later said the currency will endure. "The bitcoin industry is continuing and the most important thing now is to limit the impact of (Mt Gox's collapse) on that" ($1 = 102.0850 Japanese yen)

(Additional reporting by Emi Emoto; Writing by William Mallard; Editing by Tom Heneghan)

http://www.reuters.com/article/2014/02/28/us-bitcoin-mtgox-believers-idUSBREA1R1CW20140228


BITCOIN KINGPIN ADMITS EVERYONE'S MONEY IS GONE

 Sam Biddle

Japan-based Mt.Gox CEO Mike Karpele—who may or may not be Chris Farley reanimated with the soul of Reddit—just copped to some very bad news: yes, he lost all your money.

We still don't know why all the money is gone, or where it went, but a combination of theft and titanic incompetence is likely. The bottom line of anyone who used the Mt.Gox exchange: your account balance is now zero.

But at least we know Karpele hasn't fled the country, yet. AFP reports Mt.Gox is doing more than just bowing with shame: the virtual currency exchange is bankrupt, and is seeking court protection accordingly. Funny, how these people only want anything to do with the government after they've fucked themselves over into another dimension. That dimension is filled with dreams of Kickstarter projects backed with internet money, Dorito-crusted sushi, Doge posters, and now lots of shame and backtracking.

Not everyone is cool with the apology.



Monday, February 24, 2014

AUSTRALIA READIES MORE THAN $100 BILLION IN ASSET SALES

The Wall Street Journal Feb. 12, 2014 By Rob Taylor and David Winning

CANBERRA, Australia — Australia is readying a plan to sell 130 billion Australian dollars ($117.49 billion) in assets ranging from health insurers to electricity poles, hoping to set an example to cash-strapped governments around the world that need new funds to boost their economies.
Treasurer Joe Hockey, who will chair a meeting of finance ministers and central bankers from the Group of 20 developed and developing nations this month, said Australia’s conservative government was finalizing a deal with state counterparts to prioritize assets and businesses that could be sold to private investors. 

“We are going to free up the capacity to get on with the job of building things,” Mr. Hockey told The Wall Street Journal in an interview at his parliamentary office in Canberra. “We’re going to form a partnership with the states that is going to be rolled out over the next few months, which is hugely exciting, and involves potentially massive transactions that will get the place moving.”
Governments around the world are weighing asset sales to plug holes in their budgets as tax revenues fall. Last year, the U.K. sold a majority of its interest in state postal service Royal Mail UK:RMG +0.25%  through an initial public offering in London, raising more than £1.7 billion ($2.8 billion). New Zealand’s conservative government also has raised billions of dollars through selling stakes in power generators and national flag carrier Air New Zealand Ltd. NZ:AIR +0.29% , aiming to return its budget to surplus by 2015. 

http://www.marketwatch.com/story/australia-readies-more-than-100-billion-in-asset-sales-2014-02-12 

Sunday, February 23, 2014

THE CHINESE DOMINOES ARE ABOUT TO FALL: COMPLETE LIST OF UPCOMING TRUST DEFAULTS



As has been widely reported on these pages in the past month, after a near-reality experience almost claimed the first material Chinese shadow banking default, the Chinese government and central bank did what they do best: a mysterious "white knight" emerged out of nowhere, and bailed out the Credit Equals Gold #1 Trust. A few days later, we reported that China Development Bank lent 2 billion yuan to coal company Shanxi Liansheng, which owes almost 30b yuan to lenders including banks, trusts and asset management firms. And while we know how "difficult" it was for China to do the wrong thing and encourage moral hazard, despite repeated assurances by one after another PBOC director that this time the central bank means business, we have good news: these two narrowly averted Trust defaults are just the beginning - it is all downhill from here. 

As Bank of America reports in an analysis by David Cui, the Trust defaults are about to get hot and heavy. To wit:
We believe that during April to July the market may see many trust products threatening to default, especially those related to coal mines. By our estimate, the first real default most likely could happen in May with a Sichuan lead/zinc trust product worth Rmb140mn. This is because the product is relatively small (so the government may use it as a test case), the underlying asset is not attractive (so little chance of 3rd parties taking it over) and we also have heard very little on parties involved trying to work things out. Whether this will trigger an avalanche of future trust defaults remains to be seen and this presents a key risk to the market in our opinion.

... it’s still possible that many of the upcoming cases in Apr-July may get worked out one way or the other. Nevertheless, as we believe that many of the underlying assets of the trust products are insolvent, it’s a matter of time that many products will ultimately default, in our view. Various bail-outs will only delay the inevitable.
From BofA's David Cui

12 potential defaults reported by the media

Table 1 summarizes the information on the 12 major potential defaults in the trust industry that have been reported by the media. Most of them are coal mine related and heavily concentrated in one area, Shanxi Province. So far it seems to us that most of them may get extended upon the due date. The only exception over the next few months appears to be a product issued by China Credit Trust for a lead and zinc miner in Sichuan, Nonggeshan. Even without any major default over the next few months, the process of debt restructuring can be messy and weigh heavily on market sentiment.

19 Feb 2014, Rmb109mn borrowed by Liansheng & arranged by Jilin Trust
  • Details: This Rmb109mn tranche is part of a six-tranche trust product worth a total of Rmb973mn arranged by Jilin Trust for Liansheng, a Shanxi coal miner. The other five tranches have matured since 2H 2013 and remain overdue.
  • Potential outcome: Repayment may be extended.
  • Reason: Liansheng is undergoing a debt restructuring coordinated by the Shanxi provincial government. 1) The provincial government plans to help out involved financial institutions to ensure the region’s access to ongoing financing. According to people close to the situation, the implicit guarantee practice will most likely continue with the Liansheng’s case. 2) Trust companies may have to follow banks to help the miner out. Banks have agreed to extend their mid/long term loans by three years. Top 3 banks have total debts of Rmb10.6bn to Liansheng; top 3 trust lenders, Rmb3.7bn.
(Shanghai Securities News, 2/11; Economic Information, 2/13)

21 Feb 2014, Rmb500mn borrowed by Liansheng & arranged by Shanxi Trust
  • Potential outcome: repayment may be extended.
  • Reason: Same as the Jilin Trust case.
(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14)

07 Mar 2014, Rmb664mn borrowed by Liansheng & arranged by Changan Trust
  • Details: Other than the Rmb664mn product to mature on Mar 7, Changan Trust arranged another two products for Liansheng, totaling Rmb536mn which matured in Nov 2013. Both products remain overdue.
  • Potential outcome: repayment may be extended.
  • Reason: Same as the other Liansheng cases.
(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14)

31 Mar 2014, Rmb196mn borrowed by Magic Property & arranged by CITIC Trust
  • Details: invested in an office building in Chongqing. The Chongqing developer ran into financial problems in mid-2013. CITIC Trust tried to auction the collateral but failed to do so because the developer has sold the collateral and also mortgaged it to a few other lenders.
  • Potential outcome: The developer and the trust company may share the repayment.
  • Reasons: 1) When CITIC Trust sold the product, it did not specify the underlying investment project. 2) The local government has intervened, fearing social unrest. A local buyer of a unit in the office building committed suicide as he/she could not obtain the title to the property due to the title dispute between the trust and the developer.
(Source: Financial Planning Weekly, 3/6/2013; Guangzhou Daily, 4/6/2013, Boxun, 5/10/2013)

14 May 2014, Rmb1.5bn borrowed by Liansheng & arranged by China Jiangxi International Trust
  • Potential outcome: repayment may be extended.
  • Reason: Same as the other three Liansheng cases.
(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14)

30 May 2014, Rmb140mn borrowed by Nonggeshan & arranged by China Credit Trust
  • Details: invested in a lead and zinc mine in Sichuan.
  • Potential outcome: Likely to default.
  • Reasons: 1) Compared to coal mines of Zhenfu and Liansheng, the lead and zinc mine is a much less attractive asset: it is located in the mountains over 5,000 meters in altitude, inaccessible for 6 months of the year due to weather conditions, with low lead/zinc content; 2) According to an unnamed regulator, the central government is comfortable with trust defaults in the range of Rmb100-200mn.
(Source: 21st Century Business Herald, 31/7/2012; Caiing, 1/27)

25 Jul 2014, Rmb1.3bn borrowed by Xinbeifang & arranged by China Credit Trust
  • Details: Xinbeifang is another Shanxi coal miner.
  • Potential outcome: repayment may be extended.
  • Reason: Xinbeifang is negotiating with an SOE to sell some of its coal mine assets.
(Source: China Securities Journal, 1/15)

27 Jul 2014, Rmb319mn borrowed by Hongsheng & arranged by Huarong Trust
  • Details: Hongsheng is a Shanxi coal miner. Huarong sold another trust product for it which will mature in 4 September 2014, worth Rmb63mn.
  • Potential outcome: repayment may be extended.
  • Reason: Hongsheng may have assets to secure more financing. It issued these two trust products to replace another trust product that matured in Q3 2012. The owner also issued other trust products using his personal property assets as collateral and raised Rmb1.2bn.
(21st Century Business Herald, 20/12/2013)

7 Sept 2014: Rmb400mn borrowed by Zengdai & arranged by CCB Trust
  • Details: 1) The proceeds of the product were invested in financial markets. 2) Its 1st tranche, worth Rmb400mn, matured in Mar 2013 with a 38% loss vs. an expected return of 20-30%. Investors agreed to extend the maturity of the product to Sept 2014. 3) Its 2nd tranche, worth Rmb359mn, matured in June 2013 with a 31% loss vs. an expected return of 20-30%. Investors agreed to extend the maturity of the 2nd tranche to Dec 2014.
  • Potential outcome: The trust company and the investment company may share the losses.
  • Reasons: 1) The investment company refused to repay investors in full at the original due date so the trust company may have to chip in; 2) By Jan 2014, the 1st tranche reported a narrower loss of 24%, and the 2nd tranche, also a narrower loss of 13%; 3) Zengdai may pay on behalf of its investment company for reputation’s sake.
(Source: Securities Daily, 9/7/2013; CCB Trust)

20 Nov 2014, Rmb600mn borrowed by Liansheng & arranged by China Jiangxi Int'l Trust
  • Potential outcome: repayment may be extended.
  • Reason: Same as the other Liansheng cases.
(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14)

23 Dec2014: Rmb1.1bn borrowed by Xiaoyi Dewei & arranged by China Resources Trust
  • Details: Xiaoyi Dewei is a Shanxi coal miner. The trust product originally matured in Dec 2013 but repayment was extended to Dec 2014.
  • Potential outcome: Likely to default.
  • Reason: Both the miner and the trust company refused to repay investors in full at the original due date. There has been no reporting on asset sales by Xiaoyi Dewei.
(Source: Financial Planning Weekly, 11 Nov 2013)

15 Jan 2015, Rmb1.2bn borrowed by Hongsheng’s owner & arranged by Minmetals Trust
  • Details: the collateral is the Shanxi coal miner’s personal property assets.
  • Potential outcome: May be replaced by a new trust product.
  • Reason: Same as the July 2014 Rmb319mn trust product issued by Huarong Trust.
(21st Century Business Herald, 20/12/2013)

2Q/3Q 2014 – the next peak maturing period for collective trusts

We consider the trust market the most vulnerable part of the major financing channels for companies, i.e. loan, corporate bond and trust. The quality of the borrowers in the trust market tends to among the lowest. Within the trust market, collective trust products, i.e. those sold to more than one investor, tend to be risker than single trust products, i.e. those sold to a single investor. This is because investors in single trust products tend to be more substantial in resources, thus most likely more sophisticated in their risk control.

The Wind database lists close to 12,000 collective trust products, worth Rmb1.34tr, which cover roughly half of the collective trust market (Rmb2.72tr as of the end of 2013). It has reasonably good quality data series on the issuing dates and amounts raised. However, data on maturing dates are sporadic. We estimate that the average duration of the trust products is around 2 years. Based on this assumption and the issuing dates, we have mapped out a rough maturing profile of the collective trust market. As we can see from Chart 1, 2Q and 3Q this year will be the next peak maturing period for this market.

Coal mine trusts maturity schedule

We went through the offering documents of the top 200 collective trust products by size (the smallest being Rmb400mn), worth some Rmb145bn in total. They represent roughly 10% of the trust products in the Wind database and 5% of the overall collective trust market. We identified the industries of the issuers, the regions where their businesses are located and the maturity dates of the products. Table 2 summarizes the results.


We believe that coal mine trusts are the most likely to default over the coming months because 1) coal price has dropped sharply in recent quarters; 2) most of the issuers are private enterprises; and 3) they tend to be from provinces whose governments rely heavily on resources related income, e.g., Shanxi and Inner Mongolia. On the other hand, the property market has been reasonably buoyant in recent times while LGFVs generally have access to re-financing until the implicit guarantee is removed (a whole different topic worthy another report later). Based on the maturing schedule of the top 200 collective trust products, we expect more noise about coal mine trust defaults around Apr, June and July (Chart 2).

Table 3 lists the coal mine trust products that are in our study.


For the trust market, we only have data on approximately half of the collective trust market, which in turn, accounts for about a quarter of the overall trust market. So essentially, we only covered about 1/8 of the total trust market with our analysis. Single trusts are less risky than collective trusts.

Nevertheless, if the solvency issue is a systemic problem as we expect, many single trusts will ultimately default by our assessment.

Our analysis has largely zoomed in on coal mine trusts because they represent the clear and present danger given how depressed the coal market has been. However, property related trusts may come under increasing pressure as we sense that the property market may be turning south in small cities. As a result, some of those related products may threaten to default reasonably soon. Then we have the big unknown – LGFV trusts. Whether and when they may default is largely a political decision in our opinion.

http://www.zerohedge.com/news/2014-02-19/chinese-dominoes-are-about-fall-complete-list-upcoming-trust-defaults 

 

AMENDMENT # 4 TO THE ANNUAL REPORT OF THE COMMONWEALTH OF AUSTRALIA FOR THE BUSINESS YEAR 2009/10





http://www.sec.gov/Archives/edgar/data/805157/000134100410001229/coa_18ka.htm

Wednesday, February 19, 2014

SIC CODES AND YOUR BUSINESS - WHAT YOU NEED TO KNOW

By Josh Hall 4 October 2011
 
Standard Industrial Codes, also known as SIC codes, are important but often misunderstood pieces of information.
SIC codes provide an easy way of describing what a business does. They are used by bodies like Companies House to provide an overview of a business’s activities. As a business owner you will need to know the relevant SIC code when you come to fill in your Annual return.

Companies House has recently rolled out a new series of SIC codes across its system. So what are SIC codes, when will you need one, and where can you find it?

What are SIC codes?

SIC codes are a system for categorising and defining business activities. They are the result of an ongoing attempt to develop as comprehensive a list as possible of the types of businesses that exist in the UK.

SIC codes are split into trade groups. More detailed classifications are given within each trade group. For example, trade group I refers to Transport, Storage and Communication businesses. Within that group individual codes are assigned to businesses depending on what they do. So, code 6210, which is within trade group I, refers to businesses involved in scheduled air transport. Code 8041, which is within trade group M, refers to businesses that carry out driving school activities.

When do I need a SIC code?

The fact that your business even has a SIC code might well be news to you. It is not a piece of information with which most business owners have to deal on a daily basis.

However, SIC codes have a number of important applications and uses – the most important of which arises during the Annual Return filing process.

You will need your SIC code if your business is required to file an Annual Return with Companies House. You will have to enter the code in order to complete the filing process.

How do I find my business's SIC code?

Most business owners don’t know their SIC code. In order to find it, you can use the Companies House list. This list is divided into trade groups, and is searchable by both code and by trade description. It might take some searching to find the most relevant code for your business, particularly if you work in a relatively obscure field.

SIC 2003 vs SIC 2007

It is important to understand that the SIC system has changed. The idea is to produce as comprehensive a list of classifications as possible – and, as such, the list is constantly growing.

Annual Returns with a made up date on or after 1 October 2011 will require a 2007 version of the code, as opposed to the 2003 version. The most obvious difference is that the 2007 codes have five digits, while the 2003 codes have four.

If you already know the relevant 2003 SIC code, you can use the conversion table on the Companies House website to help you find the 2007 version. You should use this version when you complete your Annual Return.
 
 
 

WHAT ARE NAICS AND SIC INDUSTRY CODES AND HOW DO I USE THEM?


Many business databases and other research tools use industry codes to classify and organize industries.  This article explains the industry code classification systems and how to use them in your research.

The information below is probably more information than most resources would care to know about the different industry code systems.  If you have the choice of whether to use the NAICS or SIC in a database or other resource, always choose the NAICS code because it is Newer.  If you’re in a hurry and just want to know how and why to use the codes, skip to the end of the article and watch the video.  If you want to know more detail about the codes, read on.

NAICS

The term, NAICS, refers to the North American Industry Classification System. NAICS is the Census Bureau’s “system for classifying business establishments. It is the first economic classification system to be constructed based on a single economic concept. Economic units that use like processes to produce goods or services are grouped together.” The system is hierarchical with more broad industries at the top of the numerical range. More specific industries have more numbers. For an example of this hierarchical arrangement, visit this page at the official NAICS site.

NAICS codes are used in the Economic Census as well as in a number of different databases (Business Source Complete, Mergent Online, Hoover’s all use NAICS). To look up a code for a particular industry, visit the official NAICS website and do a keyword search for the industry.

The NAICS system was created in 1997 to replace the older SIC codes. SIC codes are no longer updated, while the NAICS codes were last updated in 2007. Since many resources use only NAICS or only SIC codes, it is important to have both the NAICS codes and SIC codes when doing business research. To convert SIC codes to NAICS codes (or vice versa), take a look at the SIC and NAICS Correspondence Tables.

SIC

The Standard Industrial Classification System, or SIC, is a numerical scheme used to classify businesses according to industry type. Companies in the same industry were assigned the same number or SIC code. For example, General Motors, Ford Motor Corporation, Honda, and Toyota were all assigned the SIC code of 3711.

The SIC system began in the 1930′s and was last updated in 1987. Critics of the system in the early 1990′s called for a newer system, because the SIC codes did not keep up with current industries. Therefore, the North American Industry Classification System was created in 1997.

While the NAICS system is more up-to-date than the SIC system, many databases and print resources still use SIC codes exclusively. Therefore, it is important to use both the NAICS codes and SIC codes when doing business research. To convert SIC codes to NAICS codes (or vice versa), take a look at the SIC and NAICS Correspondence Tables.

How to use industry codes in your research

The video below demonstrates how to use industry codes in searching Business Source Complete and Hoover’s Online.

https://www.library.ohiou.edu/subjects/businessblog/what-are-naics-and-sic-industry-codes-and-how-do-i-use-them/


Tuesday, February 18, 2014

SIC CODE 43 - UNITED STATES POSTAL SERVICE MAILING LIST

There are 26798 records in our business mailing list for SIC code 43: United States Postal Service.

This major group includes all establishments of the United States Postal Service. Post Office contract stations are classified in Services, Industry 7389. Establishments primarily transporting mail on a contract basis for the Unites States Postal Service are classified in Industry Group 421 and Major Group 45. Private postal services primarily engaged in the delivery of unaddressed advertising materials are classified in Services, Industry 7319, and private establishments delivering individually addressed letters, parcels, and packages are classified in Industry Group 421 and Major Group 45.
Click on an SIC code to view counts and sub-categories, earch for a code or keyword using the text boxes below, or browse an alphabetical list of SIC codes.

We also provide NAICS mailing lists.
SIC CodeDescriptionCount
SIC 43United States Postal Service26,798
SIC 431United States Postal Service26,798

Marigold Technologies can provide you with a Mailing List of Owners and Executives in the United States Postal Service Industry. Contact us for more information.

http://www.marigoldtech.com/lists/sic.php?sic-code=43 

 

NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM

2012 NAICS Definition

T = Canadian, Mexican, and United States industries are comparable.


561431 Private Mail Centers

This U.S. industry comprises (1) establishments primarily engaged in providing mailbox rental and other postal and mailing (except direct mail advertising) services or (2) establishments engaged in providing these mailing services along with one or more other office support services, such as facsimile services, word processing services, on-site PC rental services, and office product sales.

Cross-References. Establishments primarily engaged in--

  • Operating contract post offices--are classified in Industry 491110, Postal Service;
  • Delivering letters and parcels (except under a universal service obligation)--are classified in Subsector 492, Couriers and Messengers;
  • Providing voice mailbox services--are classified in U.S. Industry 561421, Telephone Answering Services;
  • Providing direct mail advertising services--are classified in Industry 541860, Direct Mail Advertising;
  • Providing only one of the support services (e.g., word processing services) that establishments in this industry provide--are classified in the appropriate industry according to the service provided; and
  • Providing full service office space, whether on a lease or service contract basis--are classified in Industry 531120, Lessors of Nonresidential Buildings (except Miniwarehouses).

2002
NAICS
2007
NAICS
2012
NAICS
Corresponding Index
Entries
561431 561431 561431 Mailbox rental centers, private
561431 561431 561431 Mailbox rental services combined with one or more other office support services, private
561431 561431 561431 Parcel mailing services combined with one or more other office support services, private
561431 561431 561431 Parcel mailing services, private
561431 561431 561431 Private mail centers
561431 561431 561431 Private mailbox rental centers
http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=561431&search=2012