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THE M3: OKADA BRIBERY PROBE; SINGAPORE DEBT

The Macau Metro Monitor, April 10, 2013

 

 

U.S. SAYS OKADA'S UNIVERSAL IS TARGET OF CRIMINAL BRIBERY PROBE Reuters

In a Nevada state court filing, U.S. federal prosecutors sought permission to intervene in a lawsuit brought by WYNN against Okada to prevent disrupting an ongoing criminal probe into the bribery allegations.  It was the first time U.S. authorities publicly acknowledged a criminal investigation of Okada and his companies - Japan's Universal Entertainment Corp and Aruze USA Inc - for possible violations of the Foreign Corrupt Practices Act, an anti-bribery statute dating to the 1970s.

 

The U.S. Department of Justice is seeking a temporary stay on discovery in the civil proceedings to allow for the criminal case to be developed.  Wynn would consent to the motion while Okada would likely oppose it, according to the filing.

 

The government also noted in the filing that it has been conducting a criminal investigation into Wynn's donation in 2011 to the University of Macau Development Foundation.  Okada has said Wynn's board turned against him for opposing the donation.

 

HIGH-ROLLERS FROM CHINA MAKE SINGAPORE CASINOS SEE RED Reuters

An examination of court documents by Reuters and a series of interviews with lawyers and industry executives reveal that several of the gamblers have run up millions of dollars in debt and then scampered back to China, where they are effectively untouchable.

 

When faced with bad debts, casinos negotiate with the gamblers, and as a last resort, file suits in court. But as gambling debt is considered a civil, not criminal, issue in Singapore, gamblers who fail to pay will not be arrested.

 

The two casinos have sued at least three Chinese gamblers to recover millions of dollars but court documents show they have not been able to get any money from them so far.  Court documents also show that Marina Bay Sands has filed 84 claims for at least S$250,000 each at Singapore's top court since 2010, including 62 last year and 11 as of mid-March this year.  Resorts World filed 11 cases in 2012 and one in 2010. These cases relate to all manner of claims, not just gambling debts.

 

Many of the suits filed in the Singapore court are against gamblers based in the country, but there are likely to be larger claims on Chinese high-rollers that are not pursued due to the "painful" process and the potential bad publicity, lawyers said.

 

Singapore does not have reciprocal enforcement of judgments with China, except for Hong Kong. This means that even if a casino obtains a judgment in a Singapore court, it also has to sue the gambler in China.

 

"If there is a lot of gambling debt and the gambler is in China now, usually the casinos can hardly get any cooperation from the Chinese government to go after them because gambling is illegal in China," said Huang Jing, director at the Center on Asia and Globalization at the Lee Kuan Yew School of Public Policy in Singapore, who advises China's policymakers.


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – April 10, 2013


As we look at today's setup for the S&P 500, the range is 15 points or 0.49% downside to 1561 and 0.47% upside to 1576.         

                                                                                                                      

SECTOR PERFORMANCE


THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 2

 

EQUITY SENTIMENT:


THE HEDGEYE DAILY OUTLOOK - 10


CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.54 from 1.52
  • VIX closed at 12.84 1 day percent change of -2.65%

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, April 5 (prior -4.0%)
  • 7:30am: Fed’s Lockhart speaks at Atlanta Fed conference
  • 8:45am: Bloomberg U.S. Economic Survey, April
  • 10:30am: DOE Energy Inventories
  • 1pm: U.S. to sell $21b 10Y notes in reopening
  • 2pm: Monthly Budget Statement, March
  • 2pm: Fed releases minutes from March 19-20 FOMC Meeting
  • 5pm: Fed’s Fisher speaks on economy in El Paso, Texas

GOVERNMENT:

    • 9:30am: Senate Homeland Security Cmte hears from U.S. Border Patrol Chief Michael Fisher, acting Customs chief Kevin McAleenan
    • 10am: House Ways and Means hearing on govt’s ability to keep operating if Treasury reaches statutory debt limit
    • 10am: House Energy and Commerce panel hearing on Keystone bill intended to bypass the need for a presidential permit for the pipeline’s construction; TransCanada’s Alexander Pourbaix, NRDC’s Anthony Swift among witnesses 

WHAT TO WATCH

  • President Obama sends budget plan to Congress
  • Universal Entertainment’s Okada under U.S. criminal probe
  • Swap users win staggered delays in Dodd-Frank reporting rules
  • Apple said to discuss closer mobile collaboration with Yahoo
  • Citigroup hires McKinsey’s Chubak to help Corbat pare expenses
  • Home prices to decline in some cities as rates rise: Zillow
  • Exxon to seek second MTBE win in New Hampshire appeal
  • Microsoft says Surface tablet 2-yr warranty follows China law
  • Deutsche Telekom tallies MetroPCS votes to weigh higher bid
  • UnitedHealth units to pay $500m over hepatitis doctor
  • China exports miss forecasts as “absurd” data defended
  • Toyota says Corolla surpassed Ford Focus in 2012 global sales
  • Yahoo CEO Mayer puts Reses in charge of talent management, M&A
  • UBS plans to expand Asia corporate advisory headcount by 10%
  • Navistar accused in suit of misleading on engine compliance
  • APA expects offers for Australian gas pipeline in next week

EARNINGS:

    • Family Dollar Stores (FDO) 7am, $1.22
    • Fastental (FAST) 7am, $0.37
    • MSC Industrial (MSM) 7:30am, $0.90
    • Constellation Brands (STZ) 7:30am, $0.45 - Preview
    • CarMax (KMX) 7:35am, $0.46
    • Progressive (PGR) 8:12am, $0.44
    • Bed Bath & Beyond (BBBY) 4:15pm, $1.68 - Preview
    • Novagold Resources (NG CN) Aft-mkt, C$(0.03)

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • WTI Halts Two-Day Advance as Supplies Rise to Three-Decade High
  • Mine Town Rents Beating Manhattan Show Aussie Pain: Commodities
  • Copper Drops as China Exports Fuel Concern Supply to Top Demand
  • Gold Declines From One-Week High on Economic Recovery Outlook
  • Wheat Drops as USDA Report May Show Higher Reserves; Corn Climbs
  • Robusta Coffee at One-Week Low as Investors Sell; Cocoa Retreats
  • Goldman Lowers Gold Price Forecast Through 2014 as Cycle Turns
  • India Said to Consider Increasing Oilseed Prices to Boost Output
  • China’s Crude Imports Fall to Lowest in Six Months in March
  • Rebar Trades Near Two-Week High on Gain in Seasonal Demand
  • Asian LNG Set to Rise as Premium at Two-Year Low: Energy Markets
  • Gold in Yen Surges as Stimulus Erodes Currency: Chart of the Day
  • Mechel Said to Consider Revising Plan to Sell Eastern Coal Asset
  • Ex-Viterra Staff Join MAG Commodities to Trade Black Sea Grains
  • China Gold Imports From Hong Kong Rebound on Decline in Prices 

THE HEDGEYE DAILY OUTLOOK - 5

 

CURRENCIES


THE HEDGEYE DAILY OUTLOOK - 6

 

GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 3

 

THE HEDGEYE DAILY OUTLOOK - 4

 

EUROPEAN MARKETS


THE HEDGEYE DAILY OUTLOOK - 7

 

ASIAN MARKETS


THE HEDGEYE DAILY OUTLOOK - 8

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 9

 

 

The Hedgeye Macro Team

 

 

 

 

 

 

 

 

 

 


TRADE OF THE DAY: EWI

Today we shorted the iShares MSCI Italy Index ETF (EWI) at $12.08 a share at 1:31 PM EDT in our Real-Time Alerts. Back to the well as Italy bangs the top end of our risk range - bearish on the intermediate-term TREND duration. We'll cover when our signals tell us to. It's about sticking to your process and we're doing just that.

 

TRADE OF THE DAY: EWI - image001


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.28%
  • SHORT SIGNALS 78.51%

S&P 500: The Sky's The Limit

The S&P 500 is enjoying a terrific bull run in 2013 and is up +10.2% year-to-date and up +13.6% over a one-year period. While the actions of various central banks have helped drive the index to a new all-time high, there other factors at hand that have helped boost the index. One has been the appreciation in value of the US dollar. Strong Dollar = Strong Consumption and consumption helps drive global growth. 

 

S&P 500: The Sky's The Limit - SPXytd


Dollar Down, Oil Up

Get the dollar right and you'll get oil right. Such is the case today: dollar down, oil up. Oil has been taking it on the chin for the past two months as the US dollar appreciated in value and is now back above $94 a barrel (WTI crude). The US Dollar Index is down 0.50% alone today and Brent crude oil is still down -5.5% year-to-date. 

 

Dollar Down, Oil Up - USDOIL


CHART DU JOUR: MACAU: THE RISE OF VIP HOLD

  • We’ve documented mass hold climbing higher over the years.  VIP hold has also been trending higher lately above the theoretical win rate of 2.85% and closer to 2.96%.
  • March junket hold on a trailing twelve-month basis (TTM) was 3.21%, about 20bps higher than the TTM hold in January 2010.  If we take into account direct play, adjusted VIP hold on a TTM was 3.00% in March, compared with a 2.80% adjusted VIP hold TTM in January 2010.
  • While mass volumes have been resilient so far in the face of higher hold, it remains to be seen how the high hold will affect VIP volume growth.  The good news is that comps are relatively easy for the back half of the year.

 

CHART DU JOUR: MACAU: THE RISE OF VIP HOLD - ttt


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