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FirstFT: Credit Suisse used shady invoices for Greensill loan

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Credit Suisse filed a file Emergency loan of $140 million to Greensill Capital It is based in part on bills to companies who deny doing the work mentioned in the documents.

The Swiss bank made the loan in October 2020, less than five months before the collapse of Greensill, the supply chain finance company that had former British Prime Minister David Cameron as a senior adviser.

Bills issued by metals tycoon Sanjiv Gupta’s Liberty Commodities sold to Greensill formed part of the loan guarantee, according to documents seen by the Financial Times and people familiar with the deal. However, several of the parties named in the bills told the Financial Times that they did not do business with Liberty.

The apparent failure to spot suspicious bills pledged as collateral sheds new light on the failures of Credit Suisse’s risk management.

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It also raises new questions about practices at Greensill and Liberty. The commodities company is part of the GFG Alliance in Gupta, which is under investigation by the UK’s Serious Fraud Office and French police for suspected fraud and money laundering. GFG has consistently denied any wrongdoing.

1. The European Parliament was shaken by the Qatar corruption scandal The Legislative Council of the European Union is located at the center of a Spread the corruption scandal After Belgian police seized €600,000 in cash and detained two members of the European Parliament as part of an international investigation into allegations that World Cup host Qatar sought to buy influence.

2. The national grid asks spare coal plants to light a fire With temperatures dropping below zero and electricity demand rising across the UK, the grid operator has instructed Two coal generators for emergency use To start warming up as the grid faces its first big test of the energy crisis.

  • sell bulb: the government Selling nationalized energy supplier bulb To Octopus Energy may breach EU state aid rules in Northern Ireland, rival energy supplier Centrica said in court filings, risking one of the UK’s first significant confrontations with the bloc since Brexit.

3. Fusion breakthrough boosts hopes for clean energy US government scientists made a breakthrough In pursuit of limitless carbon-free energy, net energy gains from the same fusion reaction that fuels the sun. The process can provide a reliable and abundant alternative to fossil fuels and conventional nuclear energy.

4. Mars wants emerging markets to eat more chocolate The largest confectionery company in the world has embarked on its way to Convincing consumers in developing countries to eat more chocolate. Mars seeks to increase the amount of chocolate eaten in less affluent countries closer to the European average of 7 kilograms per year per person.

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Snickers bacon for the Brazilian market
Mars is expanding into emerging markets with local products such as Snickers bacon in Brazil

5. Smart “patient diplomacy” to confront Russia and China James Cleverly is about to go ‘patient diplomacy’ In his first big speech as UK Foreign Secretary today, hoping to build more robust and long-term relationships with countries that are not traditionally strong partners for the UK to counter support from Russia and China.

next day

Economic data The UK publishes estimates of GDP, industrial production and trade balance data for October.

earnings US computer software giant Oracle released its second quarter numbers.

Vote for the railway strike The National Union of Railroad, Maritime, and Transportation Workers closes voting on the latest wage offer today. The union recommends these members Reject the proposed deal.

Golden Globe nominations The nominees for the 80th Golden Globe Awards are being announced ahead of the ceremony on January 10.

Milestones Kenya celebrates Independence Day.

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What else do we read

Migration fatigue: Europe is preparing for a new influx of Ukrainians As some refugees began returning to their cities, the relentless Russian bombing of Ukraine’s energy and water facilities forced residents to leave again. With the onset of winter, the member states of the European Union are preparing for it immigrant flow.

Graph showing how the number of refugees in Europe is on the rise again

Can India build an army strong enough to deter China? Violent clashes between Chinese and Indian border forces in the Indian province of Ladakh in 2020 were a wake-up call for New Delhi. Analysts say future clashes between the world’s two most populous countries cannot be ruled out, and some believe India is still to come. Not doing or spending enough on its military capabilities With rising tensions.

Chelsea Manning: I can take it as long as I can Sitting down to lunch with the Financial Times, Chelsea Manning – former US Army analyst and whistleblower – talks about estrangement from friends and family, why the internet brings out the worst in people, Confidentiality ethics and her new notes README. txt.

Sketch of Chelsea Manning
I was surrounded by disappointed people in Iraq every day. People act like I’m just sitting there by myself.” © Ciaran Murphy

“Segregation ends corporate opacity” Companies large and small have done so much outsourcing that they have no idea how to make their own products anymore, writes Rana Forouhar. Now this “Breaking up” is all the rageBusiness leaders need detailed risk maps to begin to understand their global supply chains.

Trouble everything is very convenient Our culture of convenience, where Alexa can change the channel and Ocado can deliver our groceries Rewire our brains To perceive even small inconveniences as complete disasters, writes Robert Shremsley.

Travel

From Antwerp to Zanzibar, travel writers share Favorite finds of the year – and their disappointments.

Sunrise over the Borobudur temple in Java, Indonesia
Sunrise over the Borobudur temple in Java, Indonesia © Getty Images

Thank you for reading and remembering that you can Add FirstFT to myFT. You can also choose to receive a FirstFT push notification every morning on the app. Send your recommendations and feedback to firstft@ft.com

Climate chart: an explanation – Learn about the most important weather data for the week. Participation over here

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Long story short – The biggest and best-read stories in one smart email. Participation over here


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Economic

We need to pay more attention to skewed economic signals

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The writer is chair of Queen’s College, Cambridge and advisor to Allianz and Gramercy

Inflation was the dominant economic and financial issue of 2022 for most countries around the world, especially for advanced economies that have a consequential impact on the global economy and markets.

The effects have been seen in declining living standards, increasing inequality, increasing borrowing costs, stock and bond market losses, and occasional financial mishaps (fortunately small and so far contained).

In this new year, recession, both actual and feared, has joined inflation in the driving seat of the global economy and is likely to replace it. It’s a development that makes the global economy and investment portfolios subject to a wide range of possible outcomes — something that a growing number of bond investors seem to be aware of more than their equity counterparts.

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International Monetary Fund iYou will likely review soon Her economic growth forecasts again, predicting that “a third of the world will be hit by recession this year”. What is particularly notable to me about these worsening global prospects is not only that the world’s three major economic regions – China, the European Union and the United States – are slowing down together, but also that this is happening for different reasons.

In China, a chaotic exit from the wrong Covid-19 policy is undermining demand and causing more supply disruptions. Such headwinds to domestic and global economic well-being will continue as long as China fails to improve the coverage and effectiveness of its vaccination efforts. The strength and sustainability of the subsequent recovery will also require that the country more vigorously renew a growth model that can no longer rely on greater globalization.

The European Union continues to deal with energy supply disruptions as the Russian invasion of Ukraine continues. Strengthening inventory management and reorientation of energy supplies is well advanced in many countries. However, it is not yet sufficient to lift immediate constraints on growth, let alone resolve long-term structural headwinds.

The United States has the least problematic view. The headwinds to growth are due to the Fed’s struggle to contain inflation after mischaracterizing rate increases as fleeting and then initially being too timid to adjust monetary policy.

The Fed’s shift to an aggressive front-load of interest rate hikes came too late to prevent the spread of inflation in the services sector and wages. As such, inflation is likely to remain stubborn at around 4 percent, be less sensitive to interest rate policies and expose the economy to greater risk for accidents from additional policy errors that undermine growth.

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The uncertainties facing each of these three economic areas suggest that analysts should be more careful in reassuring us that recessionary pressures will be “short and shallow”. They need to be open, if only to avoid repeating the mistake of prematurely dismissing inflation as transient.

This is especially important because these diverse drivers of recessionary risk make financial fragility more threatening and policy shifts more difficult, including potentially Japan. Get out of interest rate control Policy. The range of possible outcomes is extraordinarily large.

On the one hand, a better policy response, including improving the supply response and protecting the most vulnerable populations, can counteract the global economic slowdown and, in the case of the United States, avert a recession.

On the other hand, additional policy errors and market turmoil can lead to self-reinforcing vicious cycles with rising inflation and rising interest rates, weakening credit and compressed earnings, and stressing market performance.

Judging by market prices, more bond investors are better understanding this, including by refusing to follow the Fed’s interest rate guidance this year. Instead of a sustainable path to higher rates for 2023, they believe recessionary pressures will lead to cuts later this year. If true, government bonds would provide the yield and potential for badly missed portfolio risk mitigation in 2022.

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However, parts of the stock market is still weakly bearish pricing. Reconciling these different scenarios is more important than investors. Without better alignment within markets and with policy signals, the positive economic and financial outcomes we all desire will be no less likely. They will also be challenged by the risk of more unpleasant outcomes at a time of less economic and human resilience.

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Macro hedge funds end 2022 higher, investors say, while many others take big losses By Reuters

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© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

By Svea Herbst Baylis

NEW YORK (Reuters) – Some hedge funds betting on macroeconomic trends have boasted of double and even triple-digit gains for 2022, while other high-profile companies that have long been on technology stocks have suffered heavy losses in volatile markets, investors said.

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro companies, gained 51% last year. Fund investors this week, who asked not to be identified, said Brevan Howard Asset Management, the company where Rokos once worked, posted a gain of 20.14% and Caxton Associates returned 16.73%.

Haider Capital Management’s Haider Jupiter Fund rose 193%, an investor said.

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Data from hedge fund research showed that many macro managers have avoided crumbling stock markets that have been rocked by rapid interest rate increases and geopolitical turmoil, including the war in Ukraine, to rank among the best performers in the hedge fund industry. The company’s macro index rose 14.2% while the general index of hedge funds fell 4.25%, its first loss since 2018.

Equity hedge funds, where the bulk of the industry’s roughly $3.7 trillion in assets are invested, fared worse with a loss of 10.4%, according to HFR data. And while that beat the broader stock market’s loss of 19.4%, some high-profile funds posted even bigger losses.

Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%. Coatue Management ended 2022 with a loss of 19%.

But not all companies that bet on technology stocks suffered. John Thaler JAT Capital finished the year with a 3.7% gain after fees after a 33% increase in 2021 and a 46% gain in 2020.

Sculptor Capital Management (NYSE::), where founder Dan Och is fighting the company’s current CEO in court over his salary increase, posted a 13% drop.

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David Einhorn’s Greenlight Capital, which bet that Elon Musk would be forced to buy Twitter, ended the year up 37% while Rick Sandler’s Eminence Capital rose 7%.

A number of so-called multi-manager companies where teams of portfolio managers bet on a variety of sectors also boast positive returns and have been able to deliver on their promise that hedge funds can deliver better returns in distressed markets.

Balyasny’s Atlas Fund (NYSE: Enhanced) gained 9.7%, while Point72 Asset Management gained 10%. Millennium Management gained 12% while Carlson Capital ended the year with a 7% gain.

Representatives for the companies either did not respond to requests for comment or declined to comment.

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German automakers point to easing supply chain problems

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Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the German premium auto brands indicated supply chain problems plaguing the industry were abating.

Automakers around the world have experienced parts shortages since the pandemic, especially semiconductors, leaving many of them with large fleets of incomplete vehicles that can’t be delivered to customers.

BMW and Mercedes each said their full-year vehicle deliveries fell last year by 4.8 percent and 1 percent, respectively, due to Suppliers Bottlenecks as well as lockdowns in China and the war in Ukraine.

But supply pressures eased in the last quarter of the year, as BMW recorded a 10.6 percent jump in sales, with 651,798 vehicles delivered, and Mercedes fulfilling 540,800 orders, up 17 percent from the same period in 2022.

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BMW He said the main effects of supply chain bottlenecks and continued lockdowns were felt in the first six months of the year, adding that “sales were steadily picking up in the second half.”

Mercedes boss Ula Kallenius told the Financial Times last week that the list of problems in the auto supply chain was declining, but added that long waits for cars would continue into 2023.

“One chip is enough to be vital [ . . .] Missing, and then you can’t finish the car, even if you have everything else.

Both brands recorded strong sales growth electric car. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV shipments grew 124 percent to 117,800 last year compared with its predecessor.

Similarly, BMW reported strong growth in electric vehicle sales, with deliveries of fully electric vehicles doubling last year to 215,755.

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Analysts at Bank of America said that sales of electric vehicles, including hybrid cars, reached a historic peak last November, with 1.1 million units sold. They attributed this largely to the upcoming phase-out of customer subsidies in Germany.

Participate in Mercedes BMW and BMW prices held steady Tuesday morning as investors priced in an image of an improving showing.

Rolls-Royce, a subsidiary of BMW, announced Monday that sales have hit a 119-year record, driven by strong demand in the United States, its largest market.

The luxury brand has been largely unaffected by the semiconductor pressure, mainly because it makes relatively few compounds and therefore needs fewer chips.

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