Margin Call 0003

Ken Odeluga, July 8th 2014


Middle East


(Updated) Iraq Parliament Postpones, Reconvenes next Sitting

Iraq’s new parliament put off its next session for five weeks on Monday, fuelling concerns that the country’s political paralysis would be extended amid a Sunni Islamist insurgency that claimed the life of an army general near Baghdad. However early Tuesday, The Financial Times reported on its website that Iraqi politicians had decided late on Monday to hold a meeting the following Sunday after all.

The initial postponement had been due to failure to reach “understanding and agreement” on nominations for the top three posts in government, the office of acting speaker Mehdi al-Hafidh had said earlier, indicating parliament would not meet again until Aug. 12.

Iraqi officials described the announcement of a hastily reconvened meeting as a “clarification”, according to the FT.

The United States, the United Nations and Iran, have all urged the swift formation of an inclusive government to hold the country together.

Sources: Reuters, 


Yemen forces clash with Rebels in North, South


Clashes in the north Yemen town of Omran continued on Sunday between the army and fighters from the Houthi movement after at least 104 people were killed on Saturday, while in the south six soldiers were shot dead by al Qaeda militants.


Yemen’s government is struggling to regain stability in a country facing a deadly uprising in the north, a separatist movement in the south and a growing al Qaeda insurgency that has survived repeated assaults by the military.


Western and Gulf governments fear the spread of al Qaeda in Yemen and persistent fighting in the north could allow the militants room to plot attacks on international targets and in neighbouring Saudi Arabia, the world’s top oil exporter.

Source: Reuters


Kuwait Opposition Leader Bailed

A prominent Kuwaiti opposition politician whose detention last week set off a wave of sometimes violent protests in the oil-rich Gulf Arab state was freed on bail on Monday, his lawyer said.


Musallam al-Barrak, who had been detained for questioning after allegedly insulting Kuwait’s judiciary, has long been at loggerheads with the authorities over changes made in 2012 to an election law which he and other opposition politicians said were intended to prevent them taking power.


One of Barrak’s lawyers, Mohammed Abdel-Kader al-Jassim, said a Kuwaiti court on Monday had ordered the former lawmaker be freed on payment of a 5,000-dinar ($17,700) bail and delayed his case until September.

Source: Reuters


Islamic State Extends Gains in Syria

Around 30 Islamic State fighters broke out of a makeshift jail where rival Syrian Islamists had been holding them, a monitoring group said on Friday as it detailed the latest territorial gains by the al Qaeda offshoot.

The insurgents demolished a wall to escape the building – a former school – after fellow Islamic State fighters took control of al-Hawaaj village where al Qaeda loyalists had been holding them, the Syrian Observatory for Human Rights said.

In the same province on Thursday, Islamic State seized control of Syria’s largest oil field from the Nusra Front, al Qaeda’s official wing in Syria, consolidating its position in the eastern Deir al-Zor province bordering Iraq.

Source: Reuters


Three European Engineers believed Kidnapped in Libya


Three Europeans working for an Italian construction company have probably been kidnapped in Libya, officials from the Libyan and Italian governments said on Sunday.


A car used by Italian, Macedonian and Bosnian engineers was found abandoned in the town of Zuwara, west of the capital Tripoli, an official in the local town council told Reuters.


“They are missing and we suspect they have been kidnapped,” said the official, without giving further details.


A spokesman for the Italian Foreign Ministry named the missing Italian as Marco Vallisa, an employee of Piacentini Costruzioni SpA based in northern Italy, and said the ministry “presumes him to have been kidnapped”.

Source: Reuters


Violent Protests spread to Israel


Violent protests sparked by the abduction and killing of a Palestinian teenager spread to Arab villages in Israel on Saturday, presenting a new challenge to the government of Prime Minister Benjamin Netanyahu.

Israeli-Palestinian tensions have risen sharply since three Israeli teens were kidnapped on June 12 and later found dead in the occupied West Bank.


Latest updates – Monday July 7 (

11:50 P.M. Hundreds of Israeli protesters, most of them Orthodox, continuing to clash with Israel Police and Border Police at Bar-Ilan Junction. The protesters are attempting to block the intersection by burning tires, but police scatter them with batons and horses. (Nir Hasson)


11:45 P.M. IAF planes strike a Gaza rocket-launching cell. The IDF has identified a direct hit. (Gili Cohen)


11:34 P.M. A rocket launched from Gaza explodes in an open area in the Eshkol Regional Council. In Tel Sheva, near the southern city of Be’er Sheva, Israel Police arrest eight people suspected of rioting and stone-throwing. (Shirly Seidler)

Sources: Reuters, Haaretz




Ukraine Forces Capture Separatist Stronghold


Ukrainian forces routed pro-Russian rebels in a flashpoint area of eastern Ukraine on Saturday and raised the country’s blue and yellow flag again over what had for months been the separatist redoubt of Slaviansk.

A Reuters reporter saw a convoy of about 20 military transport vehicles and buses filled with armed rebels driving out of Kramatorsk where they had gone after apparently fleeing Slaviansk 20 km (12 miles) to the north.

Source: Reuters


Pro-Russian Rebels Consolidate in Donetsk

Pro-Russian rebels erected new barricades on the streets of Donetsk on Monday, preparing to make a stand in the city of a million people after losing their bastion in the town of Slaviansk in the worst defeat of their three-month uprising.


Occasional bursts of gunfire could be heard in the distance from the centre of Donetsk, where residents said they were now living in fear of a potential battle between government forces and the separatist gunmen now out in force.

Source: Reuters





Gunman Kill at least 29 in Kenya

Gunmen killed at least 29 people in raids on two coastal areas of Kenya, Reuters reported on Sunday. The attacks are the latest in a series claimed by Somali Islamists who have vowed to drive Kenyan forces out of Somalia, although police cast doubt on their role.

The Interior Ministry said one attack killed nine in the trading town of Hindi in Lamu County, the same district where about 65 people were killed by gunmen last month. Another was further south in the Gamba area, where 20 died.

Source: Reuters






Chinese hackers Switch Focus to US Experts on Iraq


A sophisticated group of hackers believed to be associated with the Chinese government, who for years targeted U.S experts on Asian geopolitical matters, suddenly began breaching computers of experts on Iraq as the rebellion there escalated, a security firm said on Monday.


CrowdStrike Inc said that the group is one of the most sophisticated of the 30 it tracks in China and that its operations are better hidden than many attributed to military and other government units.


CrowdStrike co-founder Dmitri Alperovitch said he has “great confidence” the hackers are affiliated with the government, though he declined to provide many details on the matter. A spokesman for the Chinese embassy in Washington could not be reached for comment.

Source: Reuters


IMF Hints at Global Growth Forecast Cut

Global economic activity should strengthen in the second half of the year and accelerate in 2015, although momentum could be weaker than expected, IMF chief Christine Lagarde said on Sunday, hinting at a slight cut in the Fund’s growth forecasts.

Lagarde said central banks’ accommodative policies may have only limited impact on demand and that countries should boost growth by investing in infrastructure, education and health, provided their debt stays sustainable.

The IMF’s update of its global economic outlook, expected later this month, will be “very slightly different” from the forecasts published in April, she said. In April, the IMF had forecast that global output would grow by 3.6 percent in 2014 and 3.9 percent in 2015.

Source: Reuters


American Apparel Creditor, Legal Worries Intensify

Lion Capital has ordered American Apparel to immediately repay a $10 million loan, after the retailer failed to do so by a July 4 deadline, a source close to the matter said on Monday.


The ousting of American Apparel Chief Executive Officer Dov Charney more than two weeks ago prompted Lion Capital to demand repayment of a loan that was originally due in 2018.


In an unrelated matter, a shareholder named Tammy Federman sued Charney and American Apparel board members, saying they failed to take appropriate, timely actions despite knowing about Charney’s misconduct, according to a case filed in a U.S. district court in California on Monday.


A spokesperson for American Apparel declined to comment on the Lion Capital loan and was not immediately available to comment on the lawsuit. Federman’s lawyer was not immediately available for comment.

American Apparel’s legal and credit-related issues intensified as investment firm Standard General LP said it gained voting control of ousted CEO Dov Charney’s shares in the firm and that it would back the retailer in its battle against bankruptcy.

Source: Reuters


BHP has Six Bidders for Australia Nickel Unit – AFR

Six potential bidders, including Dutch commodity trader Trafigura and Hong Kong-listed MMG Ltd, are looking at the books of BHP Billiton’s Australian nickel unit, the Australian Financial Review reported on Sunday, without saying where it got the information.

X2 Resources, a private company run by former Xstrata chief executive Mick Davis, Canadian nickel miner Sherritt International Corp, Glencore Plc and Chinese nickel refining company Jinchuan Group are also doing due diligence on Nickel West, which could be worth as much as A$800 million ($749 million), the newspaper said.

Sources: Australian Financial Review, Reuters


More US Companies adopting ‘tax efficient’ measures

Seventy-six U.S. corporations have shifted their tax domiciles out of the United States to other countries since 1983 to avoid U.S. taxes, with a sharp increase recently in such deals, a policy research arm of Congress said on Monday.

Known as inversions, these transactions are still rare but are becoming more common and causing concern in Washington. Responding to a request from lawmakers for background, the Congressional Research Service said it had found 47 such deals had been done in the past decade and more are in the works.

Source: Reuters


New CEO at Portugal’s BES faces Questions about Loans to Founding Family

The naming of the first CEO from outside the founding clan of Banco Espirito Santo (BES) has reassured investors, but he will be under pressure to explain how Portugal’s biggest bank will recover nearly a billion euros lent to family-controlled firms.

BES nominated respected economist Vitor Bento on Saturday as CEO, just five days after revealing it was owed 980 million euros by firms controlled by the founding Espirito Santo family, 700 million more than had been disclosed when it raised 1.045 billion in new capital from shareholders on June 11.

Source: Reuters

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