From: "jeffrey E." [email protected]>

From: "jeffrey E." [email protected]> To: Richard Kahn -11 Subject: Fwd: An example - Taiwan 2Q GDP -6.5%; exports fell 8.32% Date: Fri, 14 Aug 2015 16:05:59 +0000 Attachments: enewtota110408.pdf; IPM_Taiwan_2Q_GDP_weake_2015-08-14_1793170(1).pdf Inline-Images: imagel.gif; image005jpg; image5.gif; image3.gif; image002.jpg; image6.gif; image8.gif; image9.gif; image2.gif; image4.gif; image7.gif Monday Forwarded message From: Barrett, Paul S Date: Friday, August 14, 2015 Subject: An example - Taiwan 2O GDP -6.5%; exports fell 8.32% To: Brad Wechsler Cc: Barrett Team , "Jeffrey Epstein (eviratiou@graailmni)" logyscafinn@gmai1sgne, "Rich Joslin Brad When we get the balance sheet and ISDA done, we will likely want to short some Asian currencies (unless they move much lower from here). See the Taiwan data below. Paul Taiwan came out with its preliminary Q2 GDP data last night and the numbers were weaker than expected. (Q2 GDP @ -6.56% pace!) CHART ONE: CHART TWO: recession. GDP Contracted at a -6.56% pace in Q2. That was the worst number in almost six years. Exports for Q2 declined at a -8.32% pace. Also the worst number since the last EFTA01206039 kTWNGDPQ U 2.7378 As of 8/14/2015 03/31/2015 10 30 1M 6M YTO lY Ill.morApoulm...“mpAnznn 5Y Max Quarterly • Description taiwan gdp qoq saar Owner DANIEL PERLMAN 96) Actions - 97) Edit - G 2871 - taiwan gdp qoq saar ::) Compare Local CCY p +, 1► 3, Security/Study Pa CG 0 Traci r Wow. • Mews . 20an Taiwan: Real GDP QoQ % (saar) , 1191 '801'899'•M! •87I '!!' VIlo,m. 92193.'94: 9s 1). .. .... ..... .. .. .. 78 xnwwww il uvR is 2015 Q2 GDP -6.56% QoQ saar 8110 30 20 010 .10 EFTA01206040 4 ► 1W Nom GOP Ex. SA IIR% Ex 'its Index - G - Related Functions Menus a Msg: .120 Ct. I.. O. O. ? TNGEEXQR -1.75 As Of 03/31/15 % Taiwan Nominal GDP b Expenditures SA Q. . . Taiwan Directorate General of . . . G 2876 - taiwan exports !I h r* 1D 3D 161 611 YTD IV 5Y Max a Z Security/Study ti IL 0 TNGEEXQR Index 09/30/1985 08/14/2015 • TNGEEXQR Index Last Price -1.75 90 Actions Taiwan: Exports YoY% 'f Edit T'aCk arectate V News 0, loan I Compare Local CCY 2.015 Q2 YoY% Exports -8.32% F.5 '87 '88 '89 '90 '91 '92 '93 '44 '95 '96 *97 '98 '99 'CO '01 '02 '03 i '04 ! '06 i '07 , 'CS i '09 '10 •11 '12 '13 '14 '15 15 10 5 -5 -10 -1$ -20 -25 Source: Bloomberg 14Aug2015 Paul Barrett I Managing Director I Global investment Opportunities Group 13.P. Morgan Securities LLC I 3.P. Morgan Private Bank I 3.P. Morgan Chase Bank N.A. NOT AN OFFICIAL CONFIRMATION: For informational purposes only. This report does not represent an official account of the holdings, balances, or transactions made in your account and is being provided at your request. Please refer to your monthly account statement for the official record of all of your account activities. For question, please call your 1.P. Morgan representative. 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Quarterly • EFTA01206041 J.P.Morgan Asia Pacific Economic Research Taiwan: 2Q GDP weakened notably, main drag coming from the export sector, especially tech Taiwan's 2O15 real GDP growth slowed notably to 0.52%oya (compared to the advanced reading of 0.64%). following the upwardly-revised growth at 3.84%oya in 1O (previously: 3.37%). The Directorate General of Budget, Accounting and Statistics (DGBAS) estimates that, seasonally-adjusted, real GDP contracted 6.56% girt, saar in 2O15, following the positive growth at 2.3% q/q saar in 1O. Breakdown of 2O GDP by expenditure highlights that the notable contraction in the economy (in saar terms) was mainly dragged by export sector weakness (especially for tech products). On the domestic front. GDP expenditure data showed decent growth in private consumption in 2O. though GDP industry data suggested that consumption-related sectors. such as wholesale and retail trade, remained subdued. Meanwhile, fixed investment growth rebounded decently in 2O. which may hint at some potential moderate recovery for the economy going into 2H15. Watching for signs of 2H15 improvement in external demand The significant weakness in Taiwan's 2O GDP. with the most severe quarterly GDP contraction (in %q/q saar terms) since the worst moments of the global financial crisis, was mainly dragged by the export and manufacturing sectors. with the notable underperformance of the tech sector (tech IP fell significantly at 34.5% 3m/3m saar in June). Looking ahead, on the external front, our global team continues to expect stronger global growth in 2H15. which will hopefully provide some support for moderate recovery in Taiwan's export and manufacturing sector. In this regards. it is with noting: (1) Taiwan's July exports improved moderately (up 3.2% nVm sa in real terms): (2) tech exports. following the significant weakness in 2O, rebounded 7.7% rn/m sa in July: (3) capital goods imports rose notably at 93.6% m/m sa and 13.2% nVm sa in July and June respectively, suggesting decent expansion in corporate capex. which in turn hints at some moderate recovery in export and manufacturing sectors in coming months. On the domestic front. it is worth noting that the slowing in industrial activity through 2O seemed to have gradually fed into the labor market. with employment growth losing momentum lately (In % mum sa terms. total employment stopped growing in June). which could restrain private consumption outlook going into 2H15. Overall, our forecast for Taiwan's full-year 2015 GDP growth now stands at 1.3%oya. assuming moderate recovery in the sequential growth trend to average at about 3.0% q/q sear in 3O and 4O. Meanwhile, regarding monetary policy, considering the notable weakness in latest macro data, the possibility of a potential policy rate cut, sometime during 2H15, seems to be on the rise. Besides, as the major source of recent macro weakness largely originated from the external sector. managing currency competitiveness would be an important policy tool going ahead. For further details of the 2O GDP report. looking at the major GDP expenditure components: • Total exports of goods and services contracted notably by 16.5% q/q saar in 2O, compared to the modest expansion at 1.7% q/q saar in 1O. (In particular. monthly trade data suggested the tech sector was the main drag on 2O export weakness, as tech exports contracted 27.0% 3m/3m saar in June.) • Imports of goods and services expanded moderately at 3.0% qlq saar in 2O, following the contraction at 5.5% q/q saar in 1O (reflecting the notable rebound in 2O domestic fixed Investment). • On the domestic front, private consumption expenditure rose 3.0% qlq saw in 2O. following the solid gain at 4.1% qlq saar in 1O. • Gross fixed capital formation rebounded rather notably by 26.8% q/q saar in 2O. following the contraction at 13.1% qlq saar in 1O. Regarding GDP details by industry: • Manufacturing production contracted 13.4% q/q saar in 2O. following the moderate gain at 2.2% q/q sear in 1O. EFTA01206042 • With regard to domestic service sectors, wholesales and retail trade, which is closely related to private consumption expenditure, contracted 5.1% q/q saar in 20. following the decline at 3.4% q/q saw in 10. • Real estate activity rose modestly at 1.2% q/q saar in 20, following the modest gain at 0.5% q/q saar in 10. • Finance and insurance services expanded significantly at 12.9% qlq saar in 20, adding to the gain at 17.6% qlq saar in 10. • In addition, construction activity contracted 5.3% q/q saar in 2O, adding to the decline at 4.2% q/q saw in 1O. Minn real GDP gronth 2014 1014 4011 1Q15 2015 %oya Reed GDP 3.8 43 35 3.8 0.5 Nude ccalsorotcn 3.0 38 2.4 3.8 2.9 Government coisurrpXo 3.7 39 41 3.9 CO GPM cate kaneosn 1.8 4.8 0.0 42 1.3 Ecos ce oxtra S. sew. 5.9 7.6 6.5 6.1 .1.3 Mos 0193COS 8 derv. %o ft saar 5.8 9.2 61 2.7 2.2 Rod GOP 61 19 2.3 4.6 Pnvaie o:osurcticn 25 20 4.1 3.0 Government ccosurrowi 46 1.3 -9.8 5.7 Gross P;431 terra*, 16.6 4.5 -111 26.8 Exxes of gcods sev 9.2 4.4 1.7 -16.5 mos atoms,. soy 9.7 28 .15 3.0 Spume: DGBAS Taiwan: real GOP growth %alone IS 5 0 5 to 10 11 Sour e. DGBAS 12 13 14 15 Taiwan: contribution to GOP growth %-ctocettulcot30eallateGCPoyacrerft 3 n Prink come 2 -1 2 2012 Sow 4. DGBAS Taiwan. GDP by industry nOex, 1=084 $03 140 130 120 lb 100 90 80 Net al pons 2013 2014 2015 Ilanutactunr0 AtC0O10Claterl aid food xrnca Roulet* • 08 09 10 t S'YJK DGBAS. J.P Morgan 16 12 13 14 15 EFTA01206043 Tapia nal Wad P VA tar, 0c. seSn 15 10 5 - 0 to RealG0P 2011 2012 2013 2011 2415 SOUK!. DGBAS. MoCA. J.PMorgan Global manufacturing PIAI and Taiwan real capon growth a2 say Global andactunng PMl • output 54 52 56 2.15 10 15 10 5 0 .5 .11 15 Taiwan export velure Minn by moon puce) 2111 2412 2013 2114 Source: MoF. DGBAS. Manta. J.P.Morgan Taiwan:tech upon and capital goods imports %WM, sear 10 a . N. a • a. a Capital goods Ted, exports impons deadng by 6- rnontini. 1111 2014 Sourc J.P.Morgan 21116 Taiwur real labor income and private consumption %oya Real private C01111701X1 5 allmnalture Real labor 4 income • . 3 2 1 0 1 2011 2012 Source: DGBAS. J.P.Morgac 2111 2014 2015 Click here for the full Note and diSclosureS. JPMorgan Chase Bank, N.A., Hong Kong 100 - 75 -50 - 0 25 54 60 40 20 0 -28 -14 EFTA01206044 JPMorgan Chase Bank. N.A., Hong Kong Vial J.P. Moroan Markets for more market-laming le:match and fnancis sdu40ns across me MI Cade and investment lilecyde. 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