Sea awash in pink hues at Anzac Day dawn service, Gallipoli
Chinese weather anchorman struck by lightning sparks while filming
Jake Tapper: The US is shamelessly advertising Trumps businesses
Brief: 123RF buys Pixlr to bring more photo tools into its creative suite
Netanyahu will skip talks if German minister meets left-wing group - Israeli official
Venezuela: at least three dead as anti-government protests continue
Why join the gig economy? For many, the answer is ‘for fun’
Macron v Le Pen: candidate comparisons
Russias oil cuts wont be easy if OPEC deal is extended
Divisions 22 Years After Oklahoma City Bombing
Hollande backs Macron for French president
The invisible network that makes cities work
IN PICTURES: Turks take protests to Ataturks mausoleum by @DiegoCupolo
Todd Eberle Stares Into The Creative Soul Of The World’s Greatest Architects #design
John Oliver examines what Ivanka Trump and Jared Kushner have actually done
OReilly: Fans will be shaken when truth comes out about Fox exit
Fewer Graft Suspects Fleeing China Amid Tighter Controls #chinagraft #operationfoxhunt
Weak cooperatives and high input costs hike Greek food prices
Why is Hindu nationalism on the rise in India?
‘Walk a mile’ in a #Rohingya refugee’s shoes through new app
Switching electricity providers slow to catch on outside urban areas #ELECTRICITY #電気
Arkansas carries out first double execution in US since 2000
From prostitutes in Bangladesh to Libyan fighters: award-winning photos
Students sue UC Berkeley over canceled Ann Coulter speech
Australian FM in Japan on regional security
Australian FM in Japan on regional security
DNC chair Perez draws criticism for frequent swearing in speeches
What would a Le Pen victory mean for France?
Take a look at the front page of The Wall Street Journal Europe
U.K. companies are disclosing gender pay gaps and they’re huge
US supreme court sides with cops testimony and blocks jury trial
Should we be worried about SpaceXs plan to fuel the Falcon 9 with astronauts on board?
Law School Needs More Political Ideological Balance #tcot
Chile rocked by 6.9-magnitude quake; no major damage reported
Republican North Carolina judge resigns — and slams the GOP on the way out
Indias central bank chief says cash bans effects are ‘transitory’
#Xi Jinping’s reading list, from Flaubert to Kissinger
#Japan Leading Economic Index Final at 104.8
#Africa to pilot worlds first malaria vaccine
#France Business Confidence at 104.8
Business and state collaboration crucial to hit carbon reduction targets, says Lord Turner
Poll: Disapproval growing of Paul Ryan and GOP Congress
We present clear evidence that women select partners who resemble their brothers.
#Japan Coincident Index Final at 115.3
Former White House spokesman doesnt have a ton of sympathy for Sean Spicer
North Korea Detains U.S. Citizen, Amid Rising Tensions
Fire investigator takes the stand in Sockeye wildfire trial
Cities ask EU to put people first
Will Nigerian Singer Blackface to Sue 2Face? #Nigeria
#Germany rebuffs #EU proposals for auto industry controls
Bees are sloppy dancers, but that’s alright. @Inkfish
Obamas former UN ambassador apologizes for not recognizing Armenian genocide
Strategists and economists were blindsided by the 5-week rally in Treasuries
Fresenius #Buys $AKRX for $4.3 Billion in U.S. Expansion | @business | #MnA
Venezuela death toll rises as unrest enters fourth week
23 photos that show how clothing is advertised and what consumers actually get
This $200 AI will end tennis club screaming matches
Add digital gatekeeper to Amazons crusade to take over the world via @Bfly
Sina Corp. chief steers Chinas Twitter deeper into Internet finance
The battle royale in the Indian Ocean is looking pretty one-sided. via @BV
Spy agencies from Five eyes gather in New Zealand - PM, sources
Global Services: Business confidence remains strong in April. #SMI
Serena fires back at Nastase for racist comments
U.S. judge lifts stay on second Arkansas execution
Trump Tower Mumbai apartment sales are set to resume after a post-election pause
Apple recruits NASA talent for its big AR push
Apple is planning its biggest iPhone overhaul to date
Earnings dont lie about lofty stock valuations, but they can mislead via @Bfly
France braces for a runoff fight between nationalism and globalism
Thun Tankers orders four tankers at AVIC Dingheng
A wave of summerlike warmth will sweep across the eastern U.S. late week:
IBM says CEO pay is $33 million. Others say it is far higher
Giulianis talk with Erdogan adds mystery to a U.S. sanctions case
Goldman shows the Volcker Rule may not be such a bad thing after all via @Bfly
Trump looks to Australia for inspiration for his planned $1 trillion infrastructure program
Ready for take-off? Chinas answer to Boeing now just needs to sell
Trump looks to Australia for inspiration for his planned $1 trillion infrastructure program
Ivanka Trump to give a speech in Berlin as Germany’s chancellor seeks a White House conduit
Chinese president phones Trump to ask him to avoid aggravating tensions with North Korea:
T-Mobile open to merger talks, new subscribers top estimates
Inside Japans politically powerful nerve center
UC-Davis Student Government: No US Flag at Our Meetings #tcot
Our lifespans keep growing, but how long should humans actually live for?
Euro pauses after rally, Canadian dollar hit by U.S. duties on lumber
Oil edges up after six days of straight losses
Malaysian Ringgit is 4.3800 to one U.S. Dollar
Berkshire Hathaway Adds $250 Million to its Stake in Liberty Media
Its never too late to invest in the future. #MoveTheMoney Get your full tax receipt here:
On China’s central plains, an ‘aerotropolis’ grows near Zhengzhou
Ahead of NAFTA talks, U.S. sets 20 percent duties on Canadian softwood lumber
PHOTOS: Unrest in Kashmir
Matt Drudge sends rare tweet: Maddow #1 in TV news. Welcome to hell.
Christie Booker Ask for Tunnel Funding
How early-childhood programming helps immigrant parents, by @taragarciam
Conferencia de Yanis Varoufakis. @IAENEDU @yanisvaroufakis #YanisVaroufakisEnECUADOR #OtroEventodeCalidad #IAEN
Pricing North Korean Risk Into Market Difficult $
The French vote -- in maps.
Giant toys youll want to steal for yourself
By the concept of deep time, cacti are a new species on planet Earth.
Yale’s six-year-old Singapore campus is now harder to get into than the 316-year-old Yale
C-SPAN to broadcast Trump travel ban arguments in appeals court live
Venezuelan Indigenous people highlight achievements at UN forum
Rescue of Homeless Dog and 8 #Puppies in a Heavy Rainstorm Will Make Your Day! #Pets #dogs
Allergies? Turn your shower into a spa with these DIY aromatherapy squares
Pan-Africa: Price Inflation moderates slightly in April. #SMI
Trump admits he didnt know much about NATO when he called NATO obsolete
More on SEC site being down. They’re working on it!
Imagine Americas next generation are climate deniers... via @dw_environment
Liberal Indoctrination Camps Start at Kindergarten #tcot
Worlds deadliest animals
CNN Raised Alarm over Betsy DeVos and Her Student Loans Policies #tcot
Where the worlds major #crops and domesticated #animals originate from
Lake Powell, Reflection Canyon
FX market risk metrics looking increasingly complacent on the #Renmnibi $USDCNY $CYB $CNY
Can you digitally disappear?
Obama avoids mention of Trump as he steps back into public spotlight
Update: Arkansas carries out first double execution in one day in US since 2000
.@BrooklynDecker hopes to change the way you get dressed
IN PICTURES: 10 of the loveliest German old towns via @dw_culture
In #Yemen, A child under the age of 5 now dies every 10 minutes of preventable causes. #Aid4Yemen
Trump to order review of all national monuments designated since 96:
An introduction to thought experiments, with Daniel Dennett:
Could Marine Le Pen repeat Trumps victory in France?
Eating meat is bad for the planet—but what about just eating less meat?
Navig8 fixes two tanker charters
Fewer corruption suspects flee #China as Beijing makes it harder with tighter controls
State Department website posts article on Trumps Florida resort
Chris Matthews Suggested IRS Employees Leak Trump’s Audit Status #tcot
Death toll rises in worsening Venezuela unrest
Jake Tapper: The US is shamelessly advertising Trumps businesses
Gingrich Confident GOP Will Hold Georgia Seat
Obama jokes at first speech: Whats been going on while Ive been gone?
BREAKING: North Korea stages firing drill marking military anniversary - Yonhap
Step inside the largest outdoor laboratory in America — our national parks:
Original illustrations of our favorite German proverbs! by @Antje_Herzog
Senate gives limited resources to Russia election-meddling probe
Laser-eyed device could speed up NASAs search for life on Mars
Donald Trump has made socialism cool again
Sheryl Sandbergs new book a tale of grief, resilience
Nora isnt fine in The Leftovers, as @sophieGG and @skornhaber discuss
Everybodys listening to people who already agree with them.
Opinion: The human rights situation in Venezuela has deteriorated
GOP senator on Russia probe: Don’t confuse silence for lack of progress
What euro crisis?
Global Manufacturing: Business confidence remains strong in April. #SMI p
Trump declines to call mass killings of Armenians a genocide
Guten Morgen, Europe and the world!
Language issues for incoming Cambodian domestic helpers spark concern in #HongKong
Disappointed refugees driven to prostitution
Venezuela: 2 dead and many Injured in opposition-led violence
Tesla plans to double its SuperCharger network and introduce solar-powered stations
Trump to astronaut on drinking own urine: Better you than me
Study finds Samsungs S8 phones more prone to screen cracks
It’s A Bad Time To Owe Trigger Happy Donald Trump A Favour -
Also, when do we start talking about DUCs again? #OOTT
You can now rent hotel rooms by the minute
Zimbabwean Parastatal Boss Denn Was Murdered - Report #Zimbabwe
SP 500 closed up over 1% today, only the 3rd 1% move in 2017. Least volatile year in a long time thus far. $SPX
Fox and Friends anchor named spokeswoman at State Department
#Germanys DAX hits all-time high on #France, Ifo index via @dw_business
Are you beginning to get how this works now? #France2017
How Israeli aid workers try to help Syrian refugees by @Dana_Regev
Bill Gates thinks this is the most beautiful chart in the world -- heres why:
Local #Venezuelan #Socialist Party Leader Assassinated in Miranda State
Trump administration launches punitive tariff on Canadian lumber
See that beautiful river of light? Thats Steve
Global All-Sector: Sales Managers Report Increasing Rate of Growth in April. #SMI
Tate Harmer reveals plans for £8.5 million hotel at the Eden Project:
Obama: Someone opposed to immigration system isn’t ‘automatically a racist’
A Game of Volatility Chicken $
SeedPlus closes first fund with $18m for seed-stage startups
Cost cutting at the oil majors has really been quite something. #OOTT Via Morgan Stanley:
6 Easy Steps to Turbo Boost Climate Action in Local Government
Chile rocked by 6.9-magnitude quake; no major damage reported
#Britain celebrates first “coal-free day” since beginning of the Industrial Revolution 
WH: GA Election Big Loss; USS Vinson On Its Way
Caterpillars could solve plastic pollution.
Trump to impose 20 percent tax on Canadian softwood lumber imports
These drink recipes do without alcohol - and still taste amazing WATCH:
Thin Mint Ice Cream Sandwiches @kitchenwclovers #vegan
What is EPA Open Data, and why would it shut down?
Trump: I said NATO was obsolete because I didnt know anything about NATO
Asia follows China’s path to green bond growth /Euromoney magazine @StanChart [sponsored]
“It was like another planet.” These images of the Arctic by @mario_tama will astound you
Can we apply the methods of parenting when we teach morals to robots?
In photos: Tribes are reviving an Indian river nearly destroyed by #coal mining
7 key findings on the state of the middle class in Western Europe
The French election party continues for Asian stocks -- and Chinas rallying.
Three million children at hunger risk during school holidays
Even opposition supporters call for end to violent protests #LaPatriaEnMovimiento #24Abr
Obama will receive $400K for Wall Street speech: report
SP Tech Sector ETF closes at a new all time high for the first time since March 2000 (total return). $XLK
Berkeley students who invited Ann Coulter to speak sue university
New York Denies Parole to Getaway Driver Judith Clark
New York Times Updates Its 2015 Hillary Clinton FBI Investigation Story
.@JVenook looks at the surreal world of the Trump Organizations twitter accounts
Poll: Disapproval growing of Paul Ryan and GOP Congress
@freakonometrics move to Tokyo?
.@EmmanuelMacron leads in polls as #France prepares to vote in runoff elections
Tianjin Rolls Out Draft Regulations on Shared Bikes
UPDATE: After temporary halt, second Arkansas execution will proceed: reports
‘Sanctuary City’ No More: Michigan City Council Reverses Decision #tcot
9 retro-themed space travel posters that may make you want to move to Pluto:
Asia: Sales Managers Report Increasingly Rapid Growth in April. #SMI
Trump: Chinese president likes me a lot
Watch Jake Tapper destroy Trump’s entire first 100 days in 4 minutes
From #EmmanuelMacrons teacher to Frances next first lady? #frenchelection2017
Cities cant fix the new urban crisis—or at least, not on their own
The U.K.’s largest bank says the French vote is a ‘game changer’ for the euro
Obama at political roundtable for Chicago youth: Im old!
2016 was a horrible year for anti-Semitic hate crimes. 2017 is much worse.
Jamie Dimon: I never had a mentor @omil_xia
Owner Struggles to Herd 10 Kittens
Trump: UN ambassador Haley could easily be replaced
This summer at NECSI: Learn how to build models and map networks.
How 100 artists redesigned the modern office’s most obsolete object:
A caterpillar that eats and digests plastic in record time
Mizzou Shuts Down Three Dorm Halls due to Plunging Enrollment #tcot
Venezuelas death toll rises as unrest enters fourth week
The Right And The Wrong Arguments For Indexing $
Well, lets get to scraping, my friends.
Jesus Sulbaran and Daniel Infante were both killed at pro-government rallies today in Venezuela.
Along the North Korean Border ht @phnk
On #HolocaustRemembranceDay its worth reflecting on this part of American history too.
DNC chair Perez draws criticism for frequent swearing in speeches
A girl and her pitbull.
EU warns Britain - Dont assume free trade deal for the City
State Department website posts article on Trumps Florida resort
Restaurants in Japan are thwarting the nation’s push toward a “smoke-free” Olympics
Spain, Brazil plan subsea fibre optic cable by 2019
The battle royale in the Indian Ocean is looking pretty one-sided. via @BV
he market is going bonkers over France’s election result — here’s how in 5 wild charts
Chris Christie gives Trump a B on his presidency so far
Esperance Community Farewells Teen Surfer Killed by Shark
Ensco secures multiple contracts and extensions
#Philippines: Army says killed 36 #IslamicState-linked militants in three days
Germany is deporting Afghan asylum-seekers
#SDR priced in #Gold (1968-2017) - Dan Popescu
Corruption cases in finance, cheaper pork and chicken: Heres what Chinese media are saying
#5things you need to know to start your day in Asian markets.
France may be about to have its most unusual first lady ever
The sad saga of North Koreas ATMs, an alien concept in Pyongyangs shiny new airport
11 things I never knew about flying… until I became a flight attendant
New Orleans begins removal of Confederate statues
Oracles creating an internal startup to drive its VR and AI efforts
Trump is looking to Australia for tips on infrastructure
The US rates market resembles the FX market five years ago $
Banks are backing out of $1.7 trillion in Chinese investments
Scots dont want another independence vote - Kantar poll
Trump-backed Navy expansion would boost costs some $400 billion over 30 years: study


Tyler Durden
Investors Rage After 3 Billion Yuan Vanish From China's Largest Private Bank
6 days ago




Theoretical warnings about risks inherent in China's shadow banking system became all too for 150 customers of China's largest private bank, when Minsheng Banking Corp found itself involved in a 3 billion yuan (US$436 million) fraud case, after it emerged that a branch chief of the lender in Beijing allegedly issued false bank acceptance bills and later secured funds from individual investors to cover up the misdeed.

According to SCMP, an accidental inquiry from an investor exposed the fact that the WMPs sold by a Minsheng branch didn’t even exist. When shocked investors rushed to the bank, they found the head of the branch had been taken into police custody and the supposed due payment date had passed.

A little background: bank acceptance bills, one of the shadier funding pathways of China's shadow banking system, and a form of bank-backed IOU, are commonly used as a form of payment between Chinese companies. The holder of such bills is entitled to cash the bill at a bank under any circumstances... unless of course fraud is involved. It is different from commercial acceptance bills, which are issued by companies and do not guarantee repayment despite companies’ trustworthiness.

Well, in this case fraud was involved.

The branch head at the Beijing branch of Minsheng, Zhang Ying, allegedly helped a corporate client disguise commercial acceptance bills as bank acceptance bills by using a false seal of the bank. The bills were issued by the client to a number of companies, which later discovered the bills were fake, Caixin said.

Then, in order to cover up the fact that the fake bills were not able to be cashed by the bank, Zhang later sold 3 billion yuan of unauthorized wealth-management products to the bank’s private customers to get funds for the client to repay the bills. Caixin said a huge amount of funds may be transferred between the client and Zhang.

Zhang Ying, the branch head, has been detained by Beijing police, while Xiao Ye, vice head of the branch, is still missing, Caixin magazine reported on its website. Minsheng said it is assisting the police with an investigation into Zhang, according to its public announcement yesterday, and will “investigate thoroughly the incident and try to recover investors’ funds to the utmost.”

Meanwhile, the investors in the WMPs sold by Minsheng, realizing their money is now gone, are understandably furious.

“If we can’t even trust a big national bank, what other financial institutions can we trust?” Liu Min, who bought 12 million yuan worth of WMPs from Minsheng, said as he waited in the lobby of the Hangtianqiao branch of Minsheng Bank to hear news. Two million yuan of the WMP he invested in is was “due” April 17 but he can’t get the money back. Liu, 52, was one of 150 private banking customers of Minsheng who had bought the WMPs. In most cases, their ties with the lender go back 10 years when the Hangtianqiao branch joined them up in a “golf club”. Under the programme, they frequently invested in the products offered by the branch and in return, the bank paid for them to go on golfing trips domestically and overseas.

“We have bought the banks products for many years and none of the previous one had trouble,” said an investor surnamed Li. “Many other institutions peddle various products to me but I didn’t buy them because we trusted the [Minsheng] bank. We are not yield hunters.”

* * *

While there have been numerous allegations and warnings that China's entire shadow banking facade, dominated by WMPs and other "investment products", is nothing but a giant ponzi scheme in which  recoveries - should there be a bank run (a topic recently discussed on Bloomberg) - would be non-existant if there is ever a bank run, defaults of WMPs issued by big banks – and this case an unapproved WMP – are rare. For now.

The Minsheng case involved an “innovative” WMP in which yields were amplified by purchasing a secondhand WMP. For a rough analogy, think CDO-squared products sold to retail investors.

According to investor contracts seen by the South China Morning Post, Minsheng’s private banking customers purchased transferred WMPs from the original investors. Bank employees told the buyers that the original investors urgently needed cash and were willing to cash out of the WMPs, which at the time were not yet due, and forego the supposed yields. As a result, the original WMPs that guaranteed principle and at least 4.2 per cent annual return “turned into” a product with more than 8 per cent annual return. Bank employees said the products were exclusively for longstanding private banking customers who owned at least 10 million yuan in financial assets.

How the fraud was uncovered: last week an investor happened to ask a friend who works at a bigger branch of Minsheng about the WMP at Hangtianqiao, but was told it didn’t exist. Officials at the Beijing branch of Minsheng subsequently reported Zhang Ying to the police, who then arrested her. By Thursday night all investors had become aware of the situation.

The 150 members of the so-called “golf club”gathered at the Hangtianqiao branch the next day demanding an explanation. They also visited the China Banking Regulatory Commission and its Beijing subsidiary, as well as the headquarters of Minsheng Bank, and the China Securities Regulatory Commission. However, no clear answers have been given to them to date.

Unfortunately for the 150 members of the "golf club", their money is long gone, and without any backstop or guarantee, their hope of recovering their funds is zero.

* * *

Ironically. the Minsheng case comes at a time when the Chinese banking regulator, the CBRC, has launched a crackdown on banks’ transgressions, including bank employees’ colluding with clients to forge unapproved lending programmes and sell them to investors. Last Monday, the China Banking Regulatory Commission issued risk management guidelines for lenders that included a section on WMPs. The regulator said the products should be simple and transparent, avoid excessive leverage and invest in distinct assets - rather than pooling funds with other WMPs.

And yet this is precisely what happened. As a result, what the CBRC will find as part of its inquiry, is sure to shock it. Meanwhile, as Bloomberg recently wrote in "China Is Playing a $9 Trillion Game of Chicken With Savers" the biggest risk for China's financial system at this moment may be a wholesale run by investors on the "shadow banking" system, demanding their money back, as they would promptly find this money no longer exists. Indicatively, there is now over 30 trillion in total WMP assets in China, or over $4 trillion USD, nearly half of China's GDP.

A few more cases of big bank fraud such as this one at Mingsheng, and said bank run may be inevitable.