Melco Crown (MPEL) Offices Raided, Authorities in Taiwan Freeze Funds!

 I was the first to write about the filthy dealings inside Melco Crown back in July, available here, so it was quite a delight when I saw this article yesterday,

PACKER CAUGHT UP IN ASIAN CASINO RAID

A couple quotes;

James Packer-backed Melco Crown Entertainment is under investigation over allegedly illegal transfers of $170 million in gambling funds between Taiwan and Macau.

Taiwanese authorities are investigating whether MCE International, a subsidiary of James Packer’s Asian joint venture Melco Crown Entertainment, improperly channelled funds on behalf of Taiwanese gamblers.

Last week, MCE International’s offices in Taipei were searched and its bank accounts frozen in relation to the alleged transfers, according to reports.

Packer’s Australian-listed gambling company Crown has a one-third stake in Melco Crown Entertainment. He is also its co-chairman and a non-executive director.

http://www.brw.com.au/

I can’t help but wonder if this has anything to do with the recent revelation that Bo Xilai may have been using Macau to do his money laundering.  If you’re not familiar with the Bo Xilai, it’s a fascinating story. 

Briton Killed in China Had Spy Links

Wall Street Journal  November 6, 2012,

As far as how Heywood and Xilai’s laundered such large amounts of money out of the China for so long remains a mystery, but some speculate it was through Macau. 

“Chinese prosecutors building a corruption case against Bo Xilai are believed to be investigating whether the fallen politician laundered an illicit fortune through Macau”.  theaustralian.com.au/

The fact that it was the offices in Taiwan is VERY interesting.  Its odd that a company like Melco would even get involved in handling these type of transactions when  Macau claims 75% of gambling revenue is brought in from Junkets—who handle bringing in the high rollers, extending credit, and collecting debt. 

To all of a sudden start assuming this risk makes little sense unless this money actually are flows from different line of business…  A type of business which is likely the only reason certain billionaire hedge fund managers own stakes in Macau—they’re shorting china. 

More on this in the next couple days…especially as it ties back in to Harbinger Group and Spectrum Brands. 

Have a wonderful weekend,

Donald Shekels

  

Warning:  Recent Upgrades = Bankers looking to sell

Self dealing banks like Goldman Sachs and Deutche Bank obviously are anxious to find buyers for Melco Crown.  Wonder why.  Its amazing people still fall for this bullshit.

Melco Crown Entertainment Limited Upgraded to “Buy” at Goldman Sachs

Posted by Alphonse Anthony on Jan 7th, 2013

Deutsche Bank Reiterates Buy on Melco Crown Entertainment ...

Daily Political-Jan 14, 2013

Wells Fargo Reiterates Outperform on Melco Crown Entertainment ...

Jags Report-Jan 11, 2013

US-Listed Chinese Frauds…Connecting the US Hedge Funds and Banks.

Do you think it’s a coincidence that Michael Burry, George Soros, and Passport Capital—all big names from their short bets in the 2007 housing collapse-- all just happen to come across and invest in Focus Media Holdings, while all hell was breaking loose here?  For those not familiar, Focus Media Holdings is accused of being yet another Chinese fraud by Muddy Waters.

Focus Media plunges on Muddy Waters allegations | Reuters Nov 21, 2011

If you have read The Big Short by Michael Lewis, you’ll agree Michael Burry is a very intelligent guy who does his own homework.  He, like myself, actually reads through these obnoxiously long securities fillings (globally) most people ignore.   Burry was also one of the first to actually put on these CDS housing trades; and with billions in exposure and his clients breathing down his neck, do you really think he gave a fuck about a Chinese company making LCDs?

Letter to Michael Lewis regarding CDO Manager, Harding Advisors, Wing Chau’s defamation suit.

NOTE:  I wrote this with the intention of sending it to author Michael Lewis; however due to abnormal difficulty in locating his contact information I decided to post it here with the hope one way or another he comes across it.

Dear Michael Lewis,

You're book The Big Short was not only excellent, it has been instrumental in the side project I'm currently working on.

I saw that you are being sued by Wing Chau and this bothered me.

Page 141 of the hardcover Big Short; when Eisman is shocked to find out Wing Chau had sold his portfolio of CDO’s and wasn’t carrying anything.   A lot of questions remain, where the housing paper losses went. It is my opinion based off my research; those losses were fraudulently disguised and merged onto the balance sheet of certain companies; for example WCI Communities.

What the Big Boys are looking at

Here are two examples of what these guys are shorting (Click to Enlarge)

It’s a no brainer if you ask me; I don’t think it will take much of a slowdown in China for this market to run into trouble.  If you take a
forensic look at what the Hedge Funds, Banks, and Structured Finance
Arrangers are doing to the underlying market; infecting it with structured finance schemes which act like a cancer, at the same time act as fuel for the asset bubble—similar to what Magnatar was accused of doing back in 2007.

I almost hate to call these guys game out because it’s a great trade and I wish I had the means to put it on (in an ethical, honest fashion).  That last part I don’t believe is possible for these guys as they are just too big; instead they resort to fraud, deceit, and downright thievery in order to build a market large enough for them to short.  

The methods in which the Banks, Funds, and Arrangers employ for this will be the topic of future entries.

Feel free to contact me with any questions.

Donny

China Property CDO's...Merged On You're Balance Sheet...

Despite my efforts of sending my report to a large number of fund managers in Melco, global regulators, company auditors, reporters, and a good number of the Funds in the ISDA club, the stock seems little interested.  

What did Deutsche Bank and Morgan Stanley do with that Synthetic?

I mean just read how ridiculous this is.  A lease hold?  Its painfully obvious DB and ML, are advancing $ for the ramp up of a CDO.  I'll write some commentary on this soon, along with a big relationship map of how Melco connects to the HK and Chinese property market the hedge funds are currently shorting.

http://www.hkexnews.hk/listedco/listconews/SEHK/2007/0601/LTN20070601056.pdf