Skip to main content

Sino-Forest -- or is it Monthy Python

Imagine that the entire world thinks that you are a fraud; to debunk these views you hire an independent group that will investigate your business, your assets and your suppliers/buyers.  Sino bought standing forest and then sold these forests to third parties (Authorized Intermediaries ) -- you give the names of these AI and their addressed to your crack team of investigators, these buyers are big firms BTW, the own truck, chain saws and possibly even processing plants (these are huge) then again this can be farmed out to other parties (still these plants must exists somewhere -- trust me transporting timber is not a small scale operation). Then your crack team goes to China and goes to meet with these companies.  Guess what happens in the case of Sino-forest's AI:  The independent investigator goes to the business addresses (supplied by Sino-Forest) but they can find no trace of the companies -- in fact they find other business that have been around for years...

Bronte Capital does an excellent job here, have a gander.  How some of these guys don't end up in jail is beyond me... of course since they are mostly Chinese national living in China, I wish the RCMP good luck in locating them and arresting them (thank God the CFO is Canadian -- he's going to have fun over the next decade).

This is the kind of conversations the RCMP will soon have:

RCMP:  Im looking for Mr. Kai Kit Poon

China Police:  我不知道主席套件

RCMP:  Mr Poon lied to Canadian investors

CP: 他没有中国人所以我不在乎

Nuff said!


Popular posts from this blog

Trucker shortage? No a plan to allow driverless rigs

There are still articles on how America is running out of truckers -- and that its a huge problem, except its not a problem, if it was a problem salaries would rise to so that demand would clear. Trucking is one of those industry where the vast majority of participants are owner/operators and therefore free agents.

Salaries and cost are extremely well know, "industry" complains that there are not enough truckers, yet wages continue to fall... Therefore there are still too many truckers around, for if there was a shortage of supply prices would rise, and they don't.

What there is though is something different; there is a push to allow automatic rigs to "operate across the US", so to encourage the various authorities to allow self driving rigs you talk shortage and hope that politicians decided that "Well if people don't want to work, lets get robots to do the work" or words to that effect.

This has nothing to do with shortage of drivers, but every…

Every punter says oil prices are on the rise: Oil hits $48/bbl -- lowest since September 2016

What the hell?

How could this be, punters, advisors, investment bankers all agreed commodity prices  in general and oil prices in particular are on the rise...its a brave new era for producers and exporters -- finally the world is back and demand is going through the roof, except not so much!

What happened?  Well energy is complicated, the world operates in a balance -- 30 days of physical reserves is about all we've got (seriously) this is a just in time business.  So the long term trend always gets hit by short term variations.

Global production over the past 12 months has risen by somewhat less than 1.5% per annum.  As the world market changes production becomes less energy intensive (maybe), but the reality is that the world is growing more slowly -- America Q4 GDP growth was around 1.9% (annualized) Europe is going nowhere fast (the GDP growth in Germany is overshadowed by the lack of growth in France, Italy, Spain (lets say 27 Euro members generated a total GDP growth of 1.2…

Paying for research

This morning I was reading that CLSA -- since 2013 proudly owned by CITIC -- was shutting down its American equity research department -- 90 people will be affected!

Now the value of a lot of research is limited, that is not to say that all research is bad. In fact, I remember that GS's Asia Aerospace research was considered the bible for the sector.  Granted, there was little you could do with the research since the "buy" was for Chinese airlines...that were state owned.  Still it was a vey valuable tool in understanding the local dynamics.  It seems that the US has introduced new legislation that forces brokers to "sell" their research services!  Figures of $10,000 an hour have been mentioned...

Now, research can be sold many times; if GS has 5000/6000 clients they may sell the same research 300x or 400x (I exaggerate) but this is the key -- Those who buy the research are, I presume, prohibited from giving it away or selling it, at the same time the same rese…