U.S. stock futures fight for direction with Powell, Morgan Stanley earnings ahead
U.S. stock futures struggle to make headway on Wednesday, setting the major indexes up for rangebound action ahead of Federal Reserve Chairman Powell’s congressional testimony.
Published:7/18/2018 5:03:21 AM
EU to slap Google with biggest-ever antitrust fine of $5 billion over Android
EU to slap Google with biggest-ever antitrust fine of $5 billion over Android
Published:7/18/2018 4:37:59 AM
Global Stocks March Higher as Upbeat Powell, Robust Earnings Ignite the Bulls
U.S. dollar looks set to test one-year highs as 2-year note yields hit fresh 11-year peak following Powell testimony. Trade war concerns keep Asia markets in check, but weaker currencies, solid earnings give European stocks early boost.
Published:7/18/2018 4:37:57 AM
Earnings Outlook: GE earnings—No more drama, please
The best investors can hope for from GE when it reports second-quarter results before Friday’s open is boring--just plain earnings and revenue, and no drama about new charges or its dividend.
Published:7/18/2018 4:37:57 AM
Pound falls further as U.K. inflation misses forecasts, stays at 2.4% in June
Pound falls further as U.K. inflation misses forecasts, stays at 2.4% in June
Published:7/18/2018 4:03:38 AM
UK Set To Become A Blockchain And Crypto Economy Leader, New Report Says
Authored by Max Yakubowski via CoinTelegraph.com,
A new report states the UK has the potential to become a leader in blockchain technology and the crypto economy by 2022, The Guardian reported July 16.
image courtesy of CoinTelegraph
The new report was conducted by the Big Innovation Centre, DAG Global, and Deep Knowledge Analytics, all companies aimed to connect business, academic, and public agencies to provide insights on new innovative technologies. According to the group’s analysis, Britain has the governmental, technological, and industrial resources to become a leader in the crypto economic ecosystem and a global hub for the development of blockchain technology within the next few years.
The report states that more than £500 million in investments were made into British blockchain companies in 2017-2018. The study’s authors consider the blockchain industry to still be in the early stages of development globally, leaving open the potential for Britain’s leadership.
Birgitte Andersen, chief executive of the Big Innovation Centre, told the Guardian that the UK parliament sees promise in blockchain technology and “has shown commitment to support the accelerated development of the digital economy via a variety of government initiatives.”
Sean Kiernan, the chief executive of DAG Global, predicts that the gap between Britain’s traditional and crypto economies will “lessen and eventually disappear” within the next few years, adding:
“The UK is a major global financial hub and in recent years has become a fintech leader as well. At the same time, it is starting to demonstrate significant potential to become a leader in blockchain technologies and the crypto economy.”
This report is not the first one that predicts the global transformation of the crypto economy. A recent study conducted by the Imperial College London and U.K. trading platform eToro found that cryptocurrencies have the potential to become a mainstream means of payment in the near future, as Cointelegraph reported July 9.
Meanwhile, the UK is taking steps towards implementing blockchain-based technologies both in the public and private spheres. A group of professors from Oxford are looking to create the world’s first “blockchain university,” with the goal of democratizing the traditional structure of higher education, Cointelegraph reported June 14. Previously, the National Archives of the UK revealed that it was considering adopting blockchain tech to create immutable entries for digital records
UK governors and politicians have also been publically promoting blockchain technology recently. As Cointelegraph reported July 4, housing minister Eddie Hughes has called on the country’s leaders to make blockchain development for government a priority “to enable social freedom, to increase efficiency, and to rebuild societal trust.”
Published:7/18/2018 4:03:38 AM
Next Avenue: This is how much debt can sabotage your retirement
Here are 6 tips from a noted retirement researcher on how to manage debt effectively.
Published:7/18/2018 4:03:37 AM
Space Wars: Russia Reveals New Russian Anti-Satellite Warfare Plane
During a press conference last month, President Donald Trump ordered the Pentagon to “immediately” establish a “space force” as an independent service branch. As we have highlighted before, the Pentagon is preparing for decades of hybrid wars across multiple domains - space, cyberspace, air, land, maritime - against Russia and China in the 2025-2040 timeframe.
According to an unnamed Russian defense industry source, as quoted by Sputnik News, Russia is developing a new electronic warfare aircraft, which can degrade the effectiveness of American spy satellites or render them entirely useless by using advanced radar jamming technology mounted on the exterior of the plane.
“The work is currently underway to develop an aircraft equipped with jamming systems that will replace Il-22PP Porubshchik [electronic warfare aircraft], which are currently being delivered to the Russian Aerospace Forces. This machine will receive a fundamentally new onboard equipment, which will allow to conduct electronic suppression of any targets — ground, air, sea — and disable enemy satellites that provide navigation and radio communication on the ground,” the defense source said.
The source said the conceptual phase of this new aircraft was recently completed and the design and development phase is expected to start shortly.
The source reminded Sputnik News that the Russian Aerospace Forces are currently operating three electronic warfare aircraft based on the Ilyushin Il-22 (USAF/DOD designation Type 10). The Il-22PP versions are variants of the Il-22, is derived from the Il-18 airliner, which first flew in the 1950s.
The Ilyushin Il-22PP Porubshchik special mission aircraft was revealed in public for the first time in August 2017. It was photographed over Russia. (Source: Jane’s Information Group)
The Il-22PP made its public debut on the 105th anniversary of the Russian air force over Kubinka August 2017. Jane’s Information Group describes the aircraft as an “escort jammer” to support other aircraft, was intended to disrupt “radars, guidance channels of surface-to-air missile systems, mid-course flight path correction channels of cruise missiles, as well as tactical data exchange networks such as Link 16.”
“The problem of Porubshchik 1 is in the aircraft platform itself, as Russia has about 10 Il-22 planes and this machine cannot be reproduced,” the defense industry source told Sputnik News.
“The new aircraft was named Porubshchik 2, but most likely, this machine will join the Aerospace Forces under a different name. There definitely will be a new air-frame. There is a possibility of developing such an aircraft on the basis of Tu-214 or Il-76 plane,” the source added.
If Russia can, in fact, disable the electronics on American spy satellites, then, this could be detrimental to the Pentagon’s nuclear command, control, and constellations of communication satellites. Such systems include the Pentagon’s legacy NC3 constellation of satellites, the Military Strategic and Tactical Relay (MILSTAR) satellites, and the Advanced Extremely High Frequency (AEHF) satellites.
The Trump’s administration Nuclear Posture Review (NPR), released in January, suggests that Washington could respond with nuclear weapons to a kinetic or cyber attack on space-based communication networks. The President will have the power to “deter Russian nuclear or non-nuclear strategic attacks—which could now include attacks against U.S. NC3 — the President must have a range of limited and graduated options, including a variety of delivery systems and explosive yields,” the NPR states.
It is becoming increasingly obvious that a space war with Russia is on the horizon. At least now we understand how the next round of wars could start…
Published:7/18/2018 3:35:32 AM
Dollar's advance puts squeeze on gold, Brexit blues sink sterling
The world's major stock markets were mostly firmer on Wednesday as a bullish outlook from the head of the U.S. central bank buoyed the dollar, lifted bond yields and sent safe-haven gold to a one-year trough. London's FTSE (.FTSE) made 0.5 percent as the pound (GBP=D3) continued to suffer the Brexit blues, while Germany's Dax (.GDAXI) surged to a one-month high on hopes the European Union and United States could cut a deal on car tariffs. In Asia, Japan's Nikkei (.N225) had also hit one-month top as a weakening yen promised to fatten exporters' profits.
Published:7/18/2018 3:35:32 AM
Barron's: This stock sector could really tumble due to Brexit-bound Britain’s political turmoil
A Brexit-bound United Kingdom has been enduring another political storm this month. Strategists view one stock sector as particularly at risk if the current U.K. government can’t ride out the rough seas: utilities.
Published:7/18/2018 3:13:44 AM
The EU's New Data Protection Rules Are Already Hurting Europeans
Authored by Kai Weiss via The Mises Institute,
It’s finally over: the flood of e-mails that every single human being who possesses an inbox has received in the last few weeks thanks to the new data protection rules by the EU. These rules, called GDPR, have caused havoc even before becoming effective on May 25, and have probably caused the greatest spam wave of all time – all in the name of fighting against spam of course.
The GDPR rules were designed to protect European consumers from data violations by big tech companies (Brussels thinks that Facebook, Google and Co. are abusing the rights of its people), and include – just as a best of – a “right to be forgotten” (meaning that Europeans can ask companies to delete all their data), “consent” (meaning that the data being processed by a company has to be consented to by the individual – though what “consent” means is still disputed), an obligation to hire a data protection officer if you are a bigger company, and above all else, hefty fines for infringements. Those infringements shall “be subject to administrative fines up to €20,000,000, or in the case of an undertaking, up to 4 percent of the total worldwide annual turnover of the preceding financial year, whichever is higher.”
What has been the result of these data protection rules after a little over a month? Summing it up in one word would probably be: chaos. As the trillions of e-mails that were sent around the globe showed, no one really understands what the rules are all about – or what to do about it.
On the day the rules came into effect, several US pages panickingly switched off their platforms in EU countries,among them the Los Angeles Times, the Chicago Tribune, New York Daily News, and Orlando Sentinel. But not only newspapers have blocked Europeans ever since: the list also includesShoes.com,Instapaper, and the History Channel. Meanwhile, ad companies, being hit the most by the new rules, have pulled out of the EU altogether, including Drawbridge and Verve , citing the GDPR as the reason that they can’t continue their business on the Continent anymore. Those staying have had to incur gigantic costs: British companies have reportedly sunk 1.1 billion dollars, and Americans 7.8 billion in preparation for GDPR.
Meanwhile, Europeans have been left grappling what to do. This is especially true for small- and medium-sized companies, NGOs, the press, and think tanks. Indeed, this has led to one profession profiting quite a bit from GDPR: lawyers. As Politico reports , for lawyers, the GDPR’s gestation period has amounted to a cash bonanza. Legal professionals refer to the 88-page law as the “gift that keeps on giving” due to the rich stream of billable hours and contractual work that come with it.
Realizing something? In all of the chaos, we haven’t mentioned Google and Facebook a single time. Now, it is true that the two corporations were hit with lawsuits of 8.8 billion euros on the first day. Those were filed by Austrian activist Max Schrems, and one single quote of his will be enough to see his understanding of voluntary cooperation in a market system:
Facebook has even blocked accounts of users who have not given consent. In the end users only had the choice to delete the account or hit the agree button – that’s not a free choice, it more reminds of a North Korean election process.
To translate: Facebook blocking users who do not agree to the conditions to use Facebook is the same as the election process of the world’s most evil dictatorship.
Other than that, however, experts have warned for a long time that it’s likely that big tech companies, which are first and foremost the intended victims of GDPR, could actually profit from the new rules. “Google and Facebook were already dominant in this market before Europe’s new rules came online. Now, they are even more so,” write Laurens Cerulus and Mark Scott.
This is the case because “big tech” had much more resources to adjust to the new rules in time. Google for instance had prepared for over a year and updated over 12 million contracts, also informing its users about changes. Thus, while normal ad companies might have to leave the European market or incur massive costs to adjust, Google and Facebook will struggle less. Perhaps those ad companies, trying to not go out of business, will even shift their ads to … Google and Facebook, making the tech giants even bigger. This was to be expected: after all, regulations are easier for large companies to get used to, while smaller ones will struggle. The GDPR only seems to be another example of that.
The EU’s reaction to all of this has been one-of-a-kind: the European Commissioner for Justice, Consumers and Gender Equality, Vera Jourová, when asked about the difficulties small companies have with the GDPR, replied saying that even she of all people is able to understand what the law means. An interview with the German Die ZEIT went like this:
ZEIT Online: Big corporations can simply call a lawyer to implement the GDPR. But smaller firms, especially bloggers and clubs, often don’t have the money for that and don’t know how to implement all criteria.
Jourová: They should send me an e-mail.
It’s needless to say that this “proposal” has been a little overoptimistic. In the meantime, it turned out that the new rules are not even valid for EU institutions. After the European Commission had a leak of personal details of hundreds of European citizens – which would have constituted a breach of the GDPR, the Commission announced that the rules will not affect the EU itself, citing “legal reasons.” Indeed, the EU will get its own laws somehow “similar to the GDPR” in fall of this year.
All of this would be quite amusing, if not for all the unintended consequences. The GDPR hurts European consumers, companies, its competitiveness and the European economy at-large, all in the name of hurting evil corporations (which it doesn’t do). It is true that in the age of big data we may need a rethinking of data ownership . But the GDPR will not help one bit – just one month with it has made this clear already.
Published:7/18/2018 2:33:12 AM
Asian stocks ease after rallying on solid US performance
Asian markets have eased after early gains as a sweep of positive news from Wall Street and beyond boosted confidence in the U.S. economy. KEEPING SCORE: Japan's benchmark Nikkei 225 gained 0.4 percent ...
Published:7/18/2018 2:01:52 AM
The Wall Street Journal: May’s Brexit strategy squeaks through key votes in parliament
Divisions put prime minister’s ability to negotiate any deal Parliament would accept in doubt, risking chance of disorderly exit.
Published:7/18/2018 2:01:51 AM
Global Markets: Dollar's advance puts squeeze on gold, commodities
Japan's Nikkei rose 0.43 percent as a weakening yen promised to fatten exporters' profits. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 percent and Australia 0.6 percent. Federal Reserve Chairman Jerome Powell stuck with an upbeat assessment on the U.S. economy while downplaying the impact of global trade risks on the outlook for rate rises.
Published:7/18/2018 1:47:17 AM
Rex Nutting: Instead of standing up to Putin, Trump stood by him and sold out America
Russia’s ongoing attack on our democracy amounts to an act of war. But instead of confronting Russian President Vladimir Putin, Donald Trump praised him. Instead of standing up to Putin, Trump stood by him.
Published:7/18/2018 1:47:17 AM
America's 'Gift' To The World: Visualizing 70 Years Of US Arms Exports
Back in April, the Trump administration rolled out a new “Buy American” initiative aimed at allowing more countries to buy more and even bigger weapons. It will loosen U.S. export rules on equipment ranging from fighter jets and drones to warships and artillery, the officials said.
Some more details on the new weapons sales policy:
Reuters has learned that the initiative will provide guidelines that could allow more countries to be granted faster deal approvals, possibly trimming back to months what has often taken years to finalize. The strategy will call for members of Trump’s cabinet to sometimes act as “closers” to help seal major arms deals, according to people familiar with the matter. More top government officials will also be sent to promote U.S. weapons at international air shows and arms bazaars.
While human rights and arms control advocates are warning that the proliferation of a broader range of advanced weaponry to more foreign governments could increase the risk of arms being diverted into the wrong hands and fueling violence in regions such as the Middle East and South Asia, this is of little import to an administration obsessed with closing the US trade deficit, even it means closing it by selling nukes to the highest bidder.
The Trump administration stresses that the main aims are to help American defense firms compete better against increasingly aggressive Russian and Chinese manufacturers and give greater weight than before to economic benefits of arms sales to create more jobs at home.
“This policy seeks to mobilize the full resources of the United States government behind arms transfers that are in the U.S. national and economic security interest,” a White House official said, responding to a request for comment on the story.
“We recognize that arms transfers may have important human rights consequences,” the official said. “Nothing in this policy changes existing legal or regulatory requirements in this regard.”
It will probably not come as a surprise to anyone that the main architects of the new policy has been economist Peter Navarro, a China trade skeptic ascendant in Trump’s inner circle. His effort to boost arms exports has drawn little resistance within the White House, Reuters officials said.
But, as the following stunning animation shows, US exports of arms has been going strong since at least 1950...
The United States of Arms from Will Geary on Vimeo.
After all, America's Military-Industrial Complex needs to pay the bills...
And at a time when Trump faces the most push-back from the deep state over his Helsinki comments, an accelerated "buy American weapons" program will also not draw opposition from the military-industrial complex.
Published:7/18/2018 1:47:16 AM
Psychoanalysing NATO: Gaslighting
Authored by Patrick Armstrong via The Strategic Culture Foundation,
NOTE: Because "NATO" these days is little more than a box of spare parts out of which Washington assembles "coalitions of the willing", it's easier for me to write "NATO" than "Washington plus/minus these or those minions".
Home Secretary Sajid Javid has called on Russia to explain "exactly what has gone on" after two people were exposed to the Novichok nerve agent in Wiltshire. (BBC)
The Russian state could put this wrong right. They could tell us what happened. What they did. And fill in some of the significant gaps that we are trying to pursue. We have said they can come and tell us what happened. I'm waiting for the phone call from the Russian state. The offer is there. They are the ones who could fill in all the clues to keep people safe. (UK security minister Ben Wallace)
Leaving aside their egregious flouting of the elemental principle of English justice, note that they're uttering this logical idiocy: Russia must have done it because it hasn't proved it didn't. Note also, in Javid's speech, the amusing suggestion that Russia keeps changing its story; but to fit into the official British story "novichok" must be an instantly lethal slow acting poison which dissipates quickly but lasts for months.
This is an attempt to manipulate our perception of reality. In a previous essay I discussed NATO's projection of its own actions onto Russia. In this piece I want to discuss another psychological manipulation – gaslighting.
The expression comes from the movie Gaslight in which the villain manipulates her reality to convince his wife that she is insane. Doubt the official Skripal story and it is you – you "Russian troll" – who is imagining things. Only Russian trolls would question Litvinenko's deathbed accusation written in perfect English handed to us by a Berezovskiy flunky; or the shootdown of MH17; or the invasion of Ukraine; or the cyber attack on Estonia. Only a Russian troll would observe that the fabulously expensive NATO intelligence agencies apparently get their information from Bellingcat. Argumentum ad trollem is everywhere: count the troll accusations here or admire the clever anticipatory use of the technique there.
This is classic gaslighting – I'm telling the truth, you're the crazy one.
We may illustrate the eleven signs of "gaslighting" given in Psychiatry Today by Stephanie A. Sarkis with recent events.
They tell blatant lies.
The Skripals were poisoned by an incredibly deadly nerve agent that left them with no visible symptoms for hours but not so deadly that it killed them; at least not at Easter; nor the policeman; a nerve agent that could only have been made in Russia although its recipe was published in the open media; that poison having been administered on a doorknob that each had to have touched at the exact same minute that no one else touched; a nerve agent so deadly that they only bothered to clean up the sites 51 days later. And so on: a different story every day. But your mind must be controlled by Putin if you smell a falsehood at any point. And, now we have it all over again: apparently the fiendishly clever Russian assassins smeared the doorknob and then, rather than getting out of town ASAP, sauntered over into a park to toss the container. (Remember the fiendishly clever Russian assassins who spread polonium everywhere?)
And, speaking of proven, long term, repeating liars: remember when accusing the British government of complicity in torture renditions was a conspiracy theory? Well, it turns out the conspiracy was by the other side. "Conspiracy Theorist" is the perfect gaslighting accusation, by the way: you're the crazy one.
They deny they ever said something, even though you have proof.
The Skripal case gives a perfect illustration: here's the UK Foreign Secretary saying Porton Down told him it was Russian ("absolutely categorical") And here's the UK Foreign Office disappearing the statement: We never said Porton Down confirmed the origin. It's rare to get such a quick exposure of a lie, so it's useful to have this example. Here is an obvious fake from Bellingcat. Already the Douma story is being re-polished now that the OPCW has said no organophosphates.
Most of the time it takes years to reveal the lie: gaslighters know the details will be forgotten while the impression remains. 64 years later we learn the "conspiracy theorists" were right about the CIA/UK involvement in the Iran coup. It's rather amazing how many people still believe the proven liars this time around.
They use what is near and dear to you as ammunition.
Russians cheat at the sports you follow, scatter nerve agents and radioactive material in places you could be in, sneak into the voting booth with you, blow up airplanes you might be on and tear up the "very fabric of our democracy." Your favourite actor tells you "we are at war with Russia".
And the children! The boy on the beach. The boy in the ambulance. Bana from Aleppo. Miraculous recoveries. Dramatic rescues with camera! Dead children speaking. And finally, the little girl, Trump and the Time cover.
If it's a child, they're gaslighting you.
They wear you down over time.
Skripal story fading? How about a CW attack in Syria? No? Back to MH17: same story with one new obviously suspicious detail. Pussy Riot is forgotten and Pavlenskiy an embarrassment, but "Russian bear in Moscow World Cup parade video sparks PETA outrage"! This is what is known as a Gish Gallop: the gaslighter makes 47 assertions, while you're thinking about the first, he makes 20 more: in former times it was recognised by the the folk saying that "a fool can ask more questions than ten wise men can answer". But the fools quickly come up with more: dead dogs in Russia: without tuk-tuks, with tuk-tuks; your choice.
You are worn down by ten new fake outrages every month: all expressed in simplistic terms. How much context is stuffed into this imbecilic headline? The Plot Against Europe: Putin, Hungary and Russia’s New Iron Curtain. How many thousand words, how many hours to discuss it intelligently? Too late! Time for "Trump and Putin’s Too-Friendly Summit" (NYT 28 June). Forget that! "Sexism at Russia World Cup the worst in history as female fans and broadcasters are harassed". (Telegraph 30 June). Gone! "We already gave Syria to Putin, so what’s left for Trump to say?" (WaPo 5 July) Stop wondering! "Amesbury poisoning: Here's what we know about the novichok victims" (Sky News 6 July). No! Trumputin again! "Will Trump Be Meeting With His Counterpart — Or His Handler?" (NY Mag 8 July). Gish Gallop. The sheer volume of easily-made accusations forces two conclusions: they're right and you're wrong (smoke: fire) or, more simply, eventually you – you crazy one! – give up.
Their actions do not match their words.
They bomb hospitals on purpose, we bomb them by accident. Discussed further here but the essence of the point is that
it would be physically impossible for Russia to be more destructive than NATO is.
If you want a single word to summarize American war-making in this last decade and a half, I would suggest rubble.
They throw in positive reinforcement to confuse you.
There are direct rewards of course: cue Udo Ulfkotte; many benefits to swimming with the stream; swimming the other way, not so many. It's only after they retire that British generals question the story, the cynic observes. German generals too. Maybe even US generals.
But for the rest of us, NATO bathes us in gush: "NATO’s Enduring Mission – Defending Values, Together". Together, our values: we – you and I – have the good values. NATO loves to praise itself "the Alliance also contributes to peace and stability through crisis management operations and partnerships." Remember Libya? "A model intervention" said the NATO GenSek of the time. Here is the view on the ground. Most of the "migrants" tearing Europe apart are fleeing the destruction of NATO's wars. NATO backs (plus/minus minions) the intervention in Mali, a country destabilised by its destruction of Libya. Cue the positive reinforcement: "Projecting Stability: an agenda for action". In NATOland the gaslight burns bright: "Nato chief: Vladimir Putin 'weaponising' refugee crisis to 'break' Europe". NATO keeps pouring butterscotch sauce on the rubble: "NATO is based on some core values – democracy, the rule of law, individual liberty" (25 June).
All I can say, over and over again, is Libya. NATO destroyed Libya, weird as it was, killed Qaddafi, weird as he was, and smugly congratulated itself: "NATO's Victory in Libya: The Right Way to Run an Intervention". Ubi solitudinum faciunt pacem appelant. But should that thought occur to you, you're part of "Russia's secret plan to destroy EU and NATO".
They know confusion weakens people.
Remember PropOrNot? Sites that do not agree with the Establishment are Russian bots! Authenticated experts! 100% reliable! The WaPo published the list; when under attack even from proponents of the Putindunnit hysteria, it feebly backtracked: it "does not itself vouch for the validity". Vermont power grid hack? WaPo fell for that one too. Confusion from the endless Gish Gallop about Putin: in December 2015 I compiled a number: Aspergers, pychopath, slouching and on and on and on.
You may be confused but the gaslighter isn't: Russia's to blame for whatever-it-was!
NATO projects all the time and this headline from the NYT is classic: "Russia’s Military Drills Near NATO Border Raise Fears of Aggression". I discuss NATO's projection here.
They try to align people against you.
NATO exerts a continual pressure for unanimity. Again, the Skripal story is a good example: London accused Russia and, "in solidarity", Russian diplomats were expelled all over the world. Allies took its word for it. Now the doubts: in Germany especially. Sanctions must be imposed on Russia because we must be in solidarity with Kiev. "Solidarity" on migrants. "Solidarity" is perhaps the greatest virtue in NATOland. We will hear more pleas for solidarity as NATO dies: when mere "solidarity" is the only reason left; there's no reason left.
They tell you or others that you are crazy.
It also must be said that when elected officials — including members of Congress — and media platforms amplify propaganda disseminated by Russian trolls, they are aiding the Russians in their efforts.
The goal is to undermine democracy. So you want America to look unstable and Americans not to trust each other.
How Russian Trolls Won American Hearts andMinds
An "existential threat posed by digitally accelerated disinformation". So no forgiveness to you, crazy Putin trolls. And don't dare doubt that American democracy is so feeble that it can be directed by a few Facebook ads. Never forget that NATO's opponents are crazy: Putin is a "madman"; Qaddafi was "crazy"; Saddam Hussein "insane"; Milosevic "rabid". Only crazy people would defend crazy people.
They tell you everyone else is a liar.
Honest people don't have to tell you they're trustworthy, and neither, once upon a time, did the BBC. The Atlantic Council smoothly moves from "Why Is the Kremlin So Fixated on Phantom Fascists?" in May 2017 to "Ukraine’s Got a Real Problem with Far-Right Violence (And No, RT Didn’t Write This Headline)" in June 2018. But it still calls Russia the liar: "Why the Kremlin's Lies Stick" (May 2018). The Atlantic Council hopes you're dumb enough not to notice that Russia hasn't changed its line but the gaslighters have. (Remember O'Brien and two plus two?)
Russian Federation is not the USSR.
I said it the last time: the USSR did lots of things in its time – influencing, fiddling elections, fake news, gaslighting and so on. But, in those days the Communist Party was the "leading and guiding force" but today it's the opposition. Things have changed in Moscow, but NATO rolls on.
Some hope, though.
While many people are still taken in by the gaslighters, there are hopeful signs. Once upon a time Internet versions of the mass media allowed comments. Gradually, one by one, they shut down their comments sections because of "trolls", "fake news" and offended "standards" but really because of disagreement. Perhaps the most famous case is that of the Guardian: an entire website, has been created by people whose comments were rejected because they violated "community standards". I always read the comments in the Daily Mail, especially the best rated, and on the Skripal stories, the comments are very sceptical indeed of the official story. For example.
This is rather encouraging: for gaslighting really to work, the gaslighter either has to be in such a position of power that he can completely control the victim's surroundings or in such a position of authority that the victim cannot imagine doubting what he says. Those days are gone.
Published:7/18/2018 1:13:37 AM
Pentagon Wants Quantum Computing As Key Weapon For Space Wars
As of recent, the world’s dominant military powers realize that the next battleground could be in Low Earth orbit (LEO). China, Russia, and the United States are all preparing for the possibility that a space war could be on the horizon, which has pushed the Pentagon into examining quantum computing as a crucial weapon for improved security for data storage and transmission on space-based military hardware.
Earlier this month, top Pentagon official Michael Griffin had a meeting with Air Force researchers at Wright Patterson Air Force Base in Ohio to address the future of quantum computing in outer space. Griffin, the undersecretary of defense for research and engineering, has indicated quantum computers and related applications rank fairly high on the Pentagon’s must-do R&D investments, said SpaceNews.
Quantum computing is one of many technologies where the Pentagon is seriously behind the curve while China continues to progress. The technology is already present in silicon valley for many civilian applications, as military officials now want to transfer the technology into its spacecraft. SpaceNews specifies the Air Force is mainly concentrated on what is known as quantum information science.
China’s 600-kilogram quantum satellite contains a crystal that produces entangled photons. (Source: Cai Yang/Xinhua via ZUMA Wire)
“We see this as a very disruptive technology,” said Michael Hayduk, chief of the computing and communications division at the Air Force Research Laboratory.
“Artificial intelligence algorithms, highly secure encryption for communications satellites and accurate navigation that does not require GPS signals are some of the most coveted capabilities that would be aided by quantum computing,” explained SpaceNews.
Earlier this month, Hayduk spoke with the Defense Innovation Board (DIB), a blend of tech executives and researchers who advise the secretary of defense. The DIB gathered at the Pentagon’s Silicon Valley location, the Defense Innovation Unit Experimental, and spoke about the need of transitioning quantum information science technologies into the military’s hands.
“Quantum computers are the newest generation of supercomputers — powerful machines with a new approach to processing information. Quantum information science is the application of the laws of quantum mechanics to information science,” Hayduk explained. “Unlike traditional computers that are made of bits of zero or one, in quantum computers bits can have both values simultaneously, given them unprecedented processing power.”
“The Air Force is taking this very seriously, and we’ve invested for quite a while,” Hayduk said.
The Pentagon finds the technology quite appealing when it comes to protecting hardware from GPS denied environments. “It’s a key area we’re very much interested in,” said Hayduk.
He noted that some of these technologies could take years to materialize. “In timing and sensing, we see prototype capabilities in a five-year timeframe.” Communications systems and networks for spacecraft would take even longer. Much of these technologies could be deployed by the mid-2020s.
No GPS signal, no problem: quantum clocks are viewed as an alternative to GPS, said Hayduk. “We’re looking at GPS-like precision in denied environments,” he said. “It often takes several updates to GPS throughout the day to synchronize platforms. We want to be able to move past that, so if we are in a denied environment, we can still stay synchronized.”
Meanwhile, China is “very serious,” he warned, adding that the Pentagon is actively monitoring other nations’ investment dollars in the quantum computing field. China could be spending $10 billion to $15 billion over the next five years on R&D. SpaceNews even said China has already developed quantum satellites that cannot be hacked.
Video: Quantum satellite achieves ‘spooky action’ at a record distance
“They have demonstrated great technology,” said Hayduk. In the U.S., “we have key pieces in place. But we’re looking at more than imitating what China is doing in ground satellite communications. We’re looking at the whole ecosystem: ground, air, space, and form a true network around that.”
Other countries have been exploring quantum computing for the coming space wars. The United Kingdom is planning a $400 million program for quantum-based sensing and timing. A similar project by the European Union is projected to be worth $1 billion over ten years. Canada, Australia, and Israel also have notable programs. Hayduk said the countries listed are mostly national government programs, “which is very different than what the U.S. has now.”
The Air Force Research Laboratory expects to play a “key role in developing software and algorithms to drive applications,” he added.
The next war between major powers is likely to be fought in LEO, or, at a minimum, have a space-based component. While Washington could, in fact, be way behind the curve in intergrating this technology to its space-based hardware, Congress has recently proposed an $800 million funding line in the Pentagon’s budget over the next five years for quantum projects. The current state of affairs of America’s military is riddled with gaps, inconsistencies, and vulnerabilities, which is explained by the decades of unwinnable wars in the Middle East and 800 military bases around the world to thwart the Empire from collapse.
If the endless wars do not bankrupt this country, it still seems we [US] could be severely lagging behind in technological advances before the next space war breaks out. American exceptionalism is dying.
Published:7/18/2018 12:17:14 AM
Asian Equities Edge Higher After Powell Testimony; Japan, EU Sign Trade Agreement
Investing.com – Asian equities traded slightly higher in morning trade on Wednesday following upbeat remarks from Federal Reserve Chairman Jerome Powell during his congressional testimony.
Published:7/18/2018 12:17:14 AM
Market Extra: Stock investors should not fear the inverted yield curve, strategist says
Ryan Detrick at LPL Research believes inverted yield curves don’t always sound the alarm to sell.
Published:7/17/2018 11:04:08 PM
Commandos Sans Frontières: The Global Growth Of U.S. Special Operations Forces
Authored by Nick Turse via TomDispatch.com,
Early last month, at a tiny military post near the tumbledown town of Jamaame in Somalia, small arms fire began to ring out as mortar shells crashed down. When the attack was over, one Somali soldier had been wounded -- and had that been the extent of the casualties, you undoubtedly would never have heard about it.
As it happened, however, American commandos were also operating from that outpost and four of them were wounded, three badly enough to be evacuated for further medical care. Another special operator, Staff Sergeant Alexander Conrad, a member of the U.S. Army’s Special Forces (also known as the Green Berets), was killed.
If the story sounds vaguely familiar -- combat by U.S. commandos in African wars that America is technically not fighting -- it should. Last December, Green Berets operating alongside local forces in Niger killed 11 Islamic State militants in a firefight. Two months earlier, in October, an ambush by an Islamic State terror group in that same country, where few Americans (including members of Congress) even knew U.S. special operators were stationed, left four U.S. soldiers dead -- Green Berets among them. (The military first described that mission as providing “advice and assistance” to local forces, then as a “reconnaissance patrol” as part of a broader “train, advise, and assist” mission, before it was finally exposed as a kill or captureoperation.) Last May, a Navy SEAL was killed and two other U.S. personnel were wounded in a raid in Somalia that the Pentagon described as an “advise, assist, and accompany” mission. And a month earlier, a U.S. commando reportedly killed a member of the Lord’s Resistance Army (LRA), a brutal militia that has terrorized parts of Central Africa for decades.
And there had been, as the New York Times noted in March, at least 10 other previously unreported attacks on American troops in West Africa between 2015 and 2017. Little wonder since, for at least five years, as Politicorecently reported, Green Berets, Navy SEALs, and other commandos, operating under a little-understood legal authority known as Section 127e, have been involved in reconnaissance and “direct action” combat raids with African special operators in Somalia, Cameroon, Kenya, Libya, Mali, Mauritania, Niger, and Tunisia.
None of this should be surprising, since in Africa and across the rest of the planet America’s Special Operations forces (SOF) are regularly engaged in a wide-ranging set of missions including special reconnaissance and small-scale offensive actions, unconventional warfare, counterterrorism, hostage rescue, and security force assistance (that is, organizing, training, equipping, and advising foreign troops). And every day, almost everywhere, U.S. commandos are involved in various kinds of training.
Unless they end in disaster, most missions remain in the shadows, unknown to all but a few Americans. And yet last year alone, U.S. commandos deployed to 149 countries -- about 75% of the nations on the planet. At the halfway mark of this year, according to figures provided to TomDispatch by U.S. Special Operations Command (USSOCOM or SOCOM), America’s most elite troops have already carried out missions in 133 countries. That’s nearly as many deployments as occurred during the last year of the Obama administration and more than double those of the final days of George W. Bush’s White House.
“USSOCOM plays an integral role in opposing today’s threats to our nation, to protecting the American people, to securing our homeland, and in maintaining favorable regional balances of power,” General Raymond Thomas, the chief of U.S. Special Operations Command, told members of the House Armed Services Committee earlier this year. “However, as we focus on today’s operations we must be equally focused on required future transformation. SOF must adapt, develop, procure, and field new capabilities in the interest of continuing to be a unique, lethal, and agile part of the Joint Force of tomorrow.”
Special Operations forces have actually been in a state of transformation ever since September 11, 2001. In the years since, they have grown in every possible way -- from their budget to their size, to their pace of operations, to the geographic sweep of their missions. In 2001, for example, an average of 2,900 commandos were deployed overseas in any given week. That number has now soared to 8,300, according to SOCOM spokesman Ken McGraw. At the same time, the number of “authorized military positions” -- the active-duty troops, reservists, and National Guardsmen that are part of SOCOM -- has jumped from 42,800 in 2001 to 63,500 today. While each of the military service branches -- the so-called parent services -- provides funding, including pay, benefits, and some equipment to their elite forces, “Special Operations-specific funding,” at $3.1 billion in 2001, is now at $12.3 billion. (The Army, Navy, Air Force, and Marine Corps also provide their special operations units with about $8 billion annually.)
All this means that, on any given day, more than 8,000 exceptionally well-equipped and well-funded special operators from a command numbering roughly 70,000 active-duty personnel, reservists, and National Guardsmen as well as civilians are deployed in approximately 90 countries. Most of those troops are Green Berets, Rangers, or other Army Special Operations personnel. According to Lieutenant General Kenneth Tovo, head of the U.S. Army Special Operations Command until his retirement last month, that branch provides more than 51% of all Special Operations forces and accounts for more than 60% of their overseas deployments. On any given day, just the Army’s elite soldiers are operating in around 70 countries.
In February, for instance, Army Rangers carried out several weeks of winter warfare training in Germany, while Green Berets practiced missions involving snowmobiles in Sweden. In April, Green Berets took part in the annual Flintlock multinational Special Operations forces training exercise conducted in Niger, Burkina Faso, and Senegal that involved Nigerien, Burkinabe, Malian, Polish, Spanish, and Portuguese troops, among others.
While most missions involve training, instruction, or war games, Special Forces soldiers are also regularly involved in combat operations across America’s expansive global war zones. A month after Flintlock, for example, Green Berets accompanied local commandos on a nighttime air assault raid in Nangarhar province, Afghanistan, during which a senior ISIS operative was reportedly “eliminated.” In May, a post-deployment awards ceremony for members of the 2nd Battalion, 10th Special Forces Group, who had just returned from six months advising and assisting Afghan commandos, offeredsome indication of the kinds of missions being undertaken in that country. Those Green Berets received more than 60 decorations for valor -- including 20 Bronze Star Medals and four Silver Star Medals (the third-highest military combat decoration).
For its part, the Navy, according to Rear Admiral Tim Szymanski, chief of Naval Special Warfare Command, has about 1,000 SEALs or other personnel deployed to more than 35 countries each day. In February, Naval Special Warfare forces and soldiers from Army Special Operations Aviation Command conducted training aboard a French amphibious assault ship in the Arabian Gulf. That same month, Navy SEALs joined elite U.S. Air Force personnel in training alongside Royal Thai Naval Special Warfare operators during Cobra Gold, an annual exercise in Thailand.
The troops from U.S. Marine Corps Forces Special Operations Command, or MARSOC, deploy primarily to the Middle East, Africa, and the Indo-Pacific regions on six-month rotations. At any time, on average, about 400 “Raiders” are engaged in missions across 18 countries.
Air Force Special Operations Command, which fields a force of 19,500 active, reserve, and civilian personnel, conducted 78 joint-training exercises and events with partner nations in 2017, according to Lieutenant General Marshall Webb, chief of Air Force Special Operations Command. In February, for example, Air Force commandos conducted Arctic training -- ski maneuvers and free-fall air operations -- in Sweden, but such training missions are only part of the story. Air Force special operators were, for instance, recently deployed to aid the attempt to rescue 12 boys and their soccer coach trapped deep inside a cave in Thailand. The Air Force also has three active duty special operations wings assigned to Air Force Special Operations Command, including the 24th Special Operations Wing, a “special tactics” unit that integrates air and ground forces for “precision-strike” and personnel-recovery missions. At a change of command ceremony in March, it was noted that its personnel had conducted almost 2,900 combat missions over the last two years.
Addition Through Subtraction
For years, U.S. Special Operations forces have been in a state of seemingly unrestrained expansion. Nowhere has that been more evident than in Africa. In 2006, just 1% of all American commandos deployed overseas were operating on that continent. By 2016, that number had jumped above 17%. By then, there were more special operations personnel devoted to Africa -- 1,700 special operators spread out across 20 countries -- than anywhere else except the Middle East.
Recently, however, the New York Times reported that a “sweeping Pentagon review” of special ops missions on that continent may soon result in drastic cuts in the number of commandos operating there. (“We do not comment on what tasks the secretary of defense or chairman of the Joint Chiefs of Staff may or may not have given USSOCOM,” spokesman Ken McGraw told me when I inquired about the review.) U.S. Africa Command has apparently been asked to consider what effect cutting commandos there by 25% over 18 months and 50% over three years would have on its counterterrorism missions. In the end, only about 700 elite troops -- roughly the same number as were stationed in Africa in 2014 -- would be left there.
Coming on the heels of the October 2017 debacle in Niger that left those four Americans dead and apparent orders from the commander of United States Special Operations forces in Africa that its commandos “plan missions to stay out of direct combat or do not go,” a number of experts suggested that such a review signaled a reappraisal of military engagement on the continent. The proposed cuts also seemed to fit with the Pentagon’s latest national defense strategy that highlighted a coming shift from a focus on counterterrorism to the threats of near-peer competitors like Russia and China. “We will continue to prosecute the campaign against terrorists,” said Secretary of Defense James Mattis in January, “but great power competition -- not terrorism -- is now the primary focus of U.S. national security.”
A wide range of analysts questioned or criticized the proposed troop reduction. Mu Xiaoming, from China’s National Defense University of the People's Liberation Army, likened such a reduction in elite U.S. forces to the Obama administration’s drawdown of troops in Afghanistan in 2014 and noted the possibility of “terrorism making a comeback in Africa.” A former chief of U.S. commandos on the continent, Donald Bolduc, unsurprisingly echoed these same fears. “Without the presence that we have there now,” he told Voice of America, “we're just going to increase the effectiveness of the violent extremist organizations over time and we are going to lose trust and credibility in this area and destabilize it even further.” David Meijer, a security analyst based in Amsterdam, lamented that, as Africa was growing in geostrategic importance and China is strengthening its ties there, “it’s ironic that Washington is set to reduce its already minimal engagement on the continent.”
This is hardly a foregone conclusion, however. For years, members of SOCOM, as well as supporters in Congress, at think tanks, and elsewhere, have been loudly complaining about the soaring operations tempo for America’s elite troops and the resulting strains on them. “Most SOF units are employed to their sustainable limit,” General Thomas, the SOCOM chief, told members of Congress last spring. “Despite growing demand for SOF, we must prioritize the sourcing of these demands as we face a rapidly changing security environment.” Given how much clout SOCOM wields, such incessant gripes were certain to lead to changes in policy.
Last year, in fact, Secretary of Defense Mattis noted that the lines between U.S. Special Operations forces and conventional troops were blurring and that the latter would likely be taking on missions previously shouldered by the commandos, particularly in Africa. “So the general purpose forces can do a lot of the kind of work that you see going on and, in fact, are now,” he said. “By and large, for example in Trans-Sahel [in northwest Africa], many of those forces down there supporting the French-led effort are not Special Forces. So we'll continue to expand the general purpose forces where it's appropriate. I would… anticipate more use of them.”
Earlier this year, Owen West, the assistant secretary of defense for special operations and low-intensity conflict, referred to Mattis’s comments while telling members of the House Armed Services Committee about the “need to look at the line that separates conventional operating forces from SOF and seek to take greater advantage of the ‘common capabilities’ of our exceptional conventional forces.” He particularly highlighted the Army’s Security Force Assistance Brigades, recently created to conduct advise-and-assist missions. This spring, Oklahoma Senator James Inhofe, a senior member of the Senate Armed Services Committee, recommended that one of those units be dedicated to Africa.
Substituting forces in this way is precisely what Iowa Senator Joni Ernst, an Iraq War veteran and member of the Armed Services Committee, has also been advocating. Late last year, in fact, her press secretary, Leigh Claffey, told TomDispatch that the senator believed “instead of such heavy reliance on Special Forces, we should also be engaging our conventional forces to take over missions when appropriate, as well as turning over operations to capable indigenous forces.” Chances are that U.S. commandos will continue carrying out their shadowy Section 127e raids alongside local forces across the African continent while leaving more conventional training and advising tasks to rank-and-file troops. In other words, the number of commandos in Africa may be cut, but the total number of American troops may not -- with covert combat operations possibly continuing at the present pace.
If anything, U.S. Special Operations forces are likely to expand, not contract, next year. SOCOM’s 2019 budget request calls for adding about 1,000 personnel to what would then be a force of 71,000. In April, at a meeting of the Senate Subcommittee on Emerging Threats and Capabilities chaired by Ernst, New Mexico Senator Martin Heinrich noted that SOCOM was on track to “grow by approximately 2,000 personnel” in the coming years. The command is also poised to make 2018 another historic year in global reach. If Washington’s special operators deploy to just 17 more countries by the end of the fiscal year, they will exceed last year’s record-breaking total.
“USSOCOM continues to recruit, assess, and select the very best. We then train and empower our teammates to solve the most daunting national security problems,” SOCOM commander General Thomas told the House Subcommittee on Emerging Threats and Capabilities earlier this year. Why Green Berets and Navy SEALs need to solve national security problems -- strategic issues that ought to be addressed by policymakers -- is a question that has long gone unanswered. It may be one of the reasons why, since Green Berets “liberated” Afghanistan in 2001, the United States has been involved in combat there and, as the years have passed, a plethora of other forever-war fronts including Cameroon, Iraq, Kenya, Libya, Mauritania, Mali, Niger, the Philippines, Somalia, Syria, Tunisia, and Yemen.
“The creativity, initiative and spirit of the people who comprise the Special Operations Force cannot be overstated. They are our greatest asset,” said Thomas. And it’s likely that such assets will grow in 2019...
Published:7/17/2018 11:04:08 PM
Paul Craig Roberts: "Is President Trump A Traitor Because He Wants Peace With Russia?"
Authored by Paul Craig Roberts,
The US Democratic Party is determined to take the world to thermo-nuclear war rather than to admit that Hillary Clinton lost the presidential election fair and square. The Democratic Party was totally corrupted by the Clinton Regime, and now it is totally insane. Leaders of the Democratic Party, such as Nancy Pelosi and Chuck Schumer, my former co-author in the New York Times, have responded in a non-Democratic way to the first step President Trump has taken to reduce the extremely dangerous tensions with Russia that the Clinton, George W. Bush, and Obama regimes created between the two superpowers.
Yes, Russia is a superpower. Russian weapons are so superior to the junk produced by the waste-filled US military/security complex that lives high off the hog on the insouciant American taxpayer that it is questionable if the US is even a second class military power. If the insane neoconservatives, such as Max Boot, William Kristol, and the rest of the neocon scum get their way, the US, the UK, and Europe will be a radioactive ruin for thousands of years.
House Democratic leader Nancy Pelosi (CA), Minority Leader of the US House of Representatives, declared that out of fear of some undefined retribution from Putin, a dossier on Trump perhaps, the President of the United States sold out the American people to Russia because he wants to make peace: “It begs the question, what does Vladimir Putin, what do the Russians have on Donald Trump - personally, politically and financially that he should behave in such a manner?” The “such a manner” Pelosi is speaking about is making peace instead of war.
To be clear, the Democratic Minority Leader of the US House of Representatives has accused Donald Trump of high treason against the United States. There is no outcry against this blatantly false accusation, totally devoid of evidence.
The presstitute media instead of protesting this attempt at a coup against the President of the United States, trumpet the accusation as self-evident truth. Trump is a traitor because he wants peace with Russia.
Here is Democratic Senator Chuck Schumer (NY) repeating Pelosi’s false accusation: “Millions of Americans will continue to wonder if the only possible explanation for this dangerous behavior is the possibility that President Putin holds damaging information over President Trump.” If you don’t believe that this is orchestrated between Pelosi and Schumer, you are stupid beyond belief.
Here is disgraced Obama CIA director John Brennan, a leader of the fake Russiagate campaign against President Trump in order to prevent Trump from making peace with Russia and, thus, by making the world safer, threatening the massive, unjustified budget of the military/security complex: “Donald Trump’s press conference performance in Helsinki rises to and exceeds the threshold of high crimes and misdemeanors. It was nothing short of treasonous. Not only were Trump’s comments imbecilic, he is wholly in the pocket of Putin. Republican Patriots: Where are you???”
Here are many more...
And here is more from the CIA bought-and-paid-for BBC...
NOTICE THAT NOT ONE WESTERN MEDIA SOURCE IS CELEBRATING AND THANKING TRUMP AND PUTIN FOR EASING THE ARTIFICAILLY CREATED TENSIONS THAT WERE LEADING TO NUCLEAR WAR. HOW CAN THIS BE? HOW CAN IT BE THAT THE WESTERN MEDIA IS SO OPPOSED TO PEACE? WHAT IS THE EXPLANATION?
The Russians, the Chinese, the Iranians, and the North Koreans, as well as the rest of the world, desperately need to notice the extremely hostile reaction to peace on the part of the US Democratic Party, many members of the Republican Party, including the despicable US Republican Senators John McCain and Lindsey Graham, and the Western Presstitute Media, a collection of people on the CIA payroll according to the German newspaper editor, Udo Ulfkotte, and the CIA itself.
Nancy Pelosi, Chuck Schumer, John McCain, Lindsey Graham, and the rest of the corrupt filth that rules over us are all in the pay of the military/security complex. Just go and investigate the donations to their re-election campaigns. The 1,000 billion dollar budget of the military/security complex, amplified by the CIA’s front corporations and narcotics business, provides enormous sums with which to purchase the senators and representatives that the insouciant American voters think that they elect.
Do you know how large 1,000 billion is? You would have to live for thousands of years and do nothing for 24/7 except count to reach that figure. It is a sum that nurtures the recipients, and the recipients regard it as worth protecting.
Therefore, the American public gets not representation, but lies that justify war and conflict. The military/security complex, about which President Eisenhower warned the American people to no effect, is in desperate need of an enemy. In obedience to the military/security complex, the Clinton, George W. Bush, and Obama regimes have made Russia that enemy. If Trump and Putin do not understand this, they will easily be made irrelevant.
They both can be assassinated, and that is what the statements from Pelosi, Schumer, McCain, Lindsey Graham, et. al., repeated endlessly in the propaganda ministry that is the Western press, encourages. Trump can be assassinated or overthrown in a political coup for selling out America to Russia, as members of both political parties claim and as the media trumpets endlessly. Putin can be easily assassinated by the CIA operatives that the Russian government stupidly permits to operate throughout Russia in NGOs and Western/US owned media and among the Atlanticist Integrationists, Washington’s Firth Column inside Russia serving Washington’s purposes. These Russian traitors serve in Putin’s own government!
Americans are so unaware that they have no idea of the risk that President Trump is taking by challenging the US military security complex. For example, during the last half of the 1970s I was a member of the US Senate staff. I was working together with a staffer of the US Republican Senator from California, S. I. Hayakawa, to advance understanding of a supply-side economic policy cure to the stagflation that threatened the US budget’s ability to meet its obligations. Republican Senators Hatch, Roth, and Hayakawa were trying to introduce a supply-side economic policy as a cure for the stagflation that was threatening the US economy with failure. The Democrats, who later in the Senate led the way to a supply-side policy, were, at this time, opposed (see Paul Craig Roberts, The Supply-Side Revolution, Harvard University Press, 1984). The Democrats claimed that the policy would worsen the budget deficit, the only time in those days Democrats cared about the budget deficit. The Democrats said that they would support the tax rate reductions if the Republicans would support offsetting cuts in the budget to support a balanced budget. This was a ploy to put Republicans on the spot for taking away some groups’ handouts in order “to cut tax rates for the rich.”
The supply-side policy did not require budget cuts, but in order to demonstrate the Democrats lack of sincerety, Hayakawa’s aid and I had our senators introduce a series of budget cuts together with tax cuts that, on a static revenue basis (not counting tax revenue feedbacks from the incentives of the lower tax rates) kept the budget even, and the Democrats voted against them every time.
When the combination of tax cuts with defense budget cuts came up for a vote, the legendary senator Strom Thurmond, a 48-year member of the US Senate from South Carolina, tapped me on the shoulder. He said: “son, never set your senator up against the military/security complex. He will not be re-elected, and you will be out of a job.” I replied that we were just establishing for the record that under no conditions would the Democrats, who wanted more government, vote for a tax rate reduction even if there was a case that it would cure stagflation. He replied: “son, the military/security complex doesn’t care.”
My emergence from The Matrix began with Thurmond’s pat on my shoulder. It grew with my time at the Wall Street Journal when I learned that some truthful things simply could not be said. In the Treasury I experienced how those outside interests opposed to a president’s policy marshall their forces and the media that they own to block it. Later as a member of a secret presidential committee, I saw how the CIA attempted to prevent President Reagan from ending the Cold War.
Today, right now, at this moment, we are faced with a massive effort of the military/security complex, the neoconservatives, the Democratic Party, and the presstitute media to discredit the elected President of the United States and to overthrow him in order that the utterly corrupt elite that rule American can continue to hold on to power and to protect the massive budget of the military/security complex that, along with the Israel Lobby, funds the elections of those who rule us. Trump, like Reagan, was an exception, and it is the exceptions that accumulate the ire of the corrupt leftwing, bought off with money, and the ire of the media, concentrated into small tight ownership groups indebted to those who permitted the illegal concentration of a once independent and diverse American media that once served, on occasion, as a watchdog over government. The rightwing, wrapped in the flag, dismisses all truth as “anti-American.”
If Putin, Lavrov, the Russian government, the traitorous Russian Fifth Column - the Atlanticist Integrationists - the Chinese, the Iranians, the North Koreans think that any peace or consideration can come out of America, they are insane. Their delusions are setting themselves up for destruction. There is no institution in America, government or private, that can be trusted. Any government or person who trusts America or any Western country is stupid beyond belief.
The entire Russiagate hoax is an orchestration by the military/security complex, led by John Brennan, Comey, and Rosenstein. The purpose is to discredit President trump for two reasons. One is to prevent any normalization of relations with Russia. The other is to remove Trump’s agenda as an alternative to the agenda of the Democratic Party.
President Trump is almost powerless. Putin, the Chinese, the Iranians, and the North Koreans should recognize this before it is too late for them. President Trump cannot fire and arrest for high treason Mueller and Rosenstein. And Trump cannot indict Hillary for her numerous unquestionable crimes in plain view of everyone, or Comey or Brennan, who declares Trump “to be wholly in the pocket of Putin,” for trying to overthrow the elected president of the United States. Trump cannot have the Secret Service question the likes of Pelosi and Schumer and McCain and Lindsey Graham for false accusations that encourage assassination of the President of the United States.
Trump cannot even trust the Secret Service, which accumulated evidence suggests was complicit in the assassination of President John F. Kennedy and Robert Kennedy.
If Putin and Lavrov, so anxious to be friends of Washington, let their guards down, they are history.
As I said above, Russiagate is an orchestratration to prevent peace between the US and Russia. Leading military/security complex experts, including the person who provided the CIA’s daily briefing of the President of the United States for many years, and the person who devised the spy program for the National Security Agency, have proven conclusively that Russiagate is a hoax designed for the purpose of preventing President Trump from normalizing relations between the US and Russia, which has the power to destroy the entirety of the Western World at will.
Here is the report from the retired security professionals who, unlike those still in office, cannot be fired and deprived of a careet for telling the truth.
Here is what the clued-in Russian Defense Minister Shoigu has to say about the aggressive actions of the West against the Russian homeland. If Putin doesn’t listen to him, Russia is in the trash can of history.
Keep in mind that no media informs you better than my website. If my website goes down, you will be left in darkness. No valid information comes from the US government or the Western presstitutes. If you sit in front of the TV screen watching the Western media, you are brainwashed beyond all hope. Not even I can rescue you. Nor God himself.
Americans, and indeed the Russians themselves, are incapable of realizing it, but there is a chance that Trump will be overthrown and a Western assault will be launched against the handful of countries that insist on sovereignty.
I doubt that few of the Americans who elected Trump will be taken in by the anti-Trump propaganda, but they are not organized and have no armed power. The police, militarized by George W. Bush and Obama, will be set against them. The rebellions will be local and suppressed by every violation of the US Constitution by the private powers that rule Washington, as always has been the case with rebellions in America.
In the West, which the Russians are so anxious to join, all freedoms are dead - freedom of assembly, freedom of speech, freedom of association, freedom of inquiry, freedom of privacy, freedom from arbitrary search, freedom from arbitrary arrest, along with the Constitutional protections of due process and habeas corpus. Today there are no countries less free than the United States of America.
Why do the Russian Atlanticist Integrationists want to join an unfree Western world? Are they that brainwashed by Western Propaganda?
If Putin listens to these deluded fools, Putin will destroy Russia.
There is something wrong with Russian perception of Washington. Apparently the Russian elite, with the exception of Shoigu and a few others are incapable of comprehending the neoconservative drive for US world hegemony and the neoconservative determination to destroy Russia as a constraint on US unilateralism. The Russian government somehow, despite all evidence to the contrary, believes that Washington’s hegemony is negotiable.
Published:7/17/2018 10:34:36 PM
New Fissure Near Yellowstone Supervolcano Causes Teton National Park Closure
Authored by Mac Slavo via SHTFplan.com,
A 100-foot-long fissure near the Yellowstone supervolcano has prompted the closure of parts of Teton National Park. Coupled with the Steamboat geyser’s newly active status, fears of an eruption at the Yellowstone caldera are increasing.
Teton National Park has issued a statement regarding the newly opened up fissure, according to WoodTV.
“The Hidden Falls and Inspiration Point areas are currently closed due to elevated potential for rockfall. The area was closed to protect human safety on July 10 after expanding cracks in a rock buttress were detected. It is unknown how long the closure will be in effect. Geologists are monitoring the buttress for movement and have initiated a risk assessment for the area.”
Although scientists continue to tell the public the possibility of a major eruption is incredibly small, they also believe it’s worth the effort to constantly monitor the area.
Hidden Falls and Inspiration Point are both closed and both are located in the popular Jenny Lake area. They are among the park’s busiest attractions. Other Jenny Lake attractions, including the ferry, remain open. There is no estimate on when these locations could reopen.
“We’re really going to need a few more days of data to make a solid determination if the rock is still moving,” park spokesman Andrew White said Friday according to Strange Sounds. Following data collection, park rangers will conduct a “risk assessment” to determine if the area can be reopened, he said.
The huge fissure on the buttress above Hidden Falls was discovered by Exum Mountain Guides on July 9 while training guided climbers for Teton ascents. By the next morning the gap had widened, so the closure followed citing a potentially dangerous “rockfall.” But a report from July 3 stated that Yellowstone’s magma chamber is “more powerful” than scientists had previously known.
Using a new way to track heat flow under the park, researchers now estimate Yellowstone’s magma chamber could be recharging from deep within the Earth twice as fast as previously thought. But there’s still no cause for alarm, even though all this news comes as the largest geyser in Yellowstone, the Steamboat geyser, becomes more active. It has now erupted for the eleventh time.
Published:7/17/2018 10:01:34 PM
U.S. Stocks Higher After Fed Chairman Jerome Powell’s Testimony
U.S. stocks rose Tuesday following Federal Reserve Chairman Jerome Powell’s Senate testimony, while investors also continued dissecting the latest round of corporate earnings results. The S&P 500 rose 11.12 points, or 0.4%, to 2809.55, and the technology-focused Nasdaq Composite climbed 49.40 points, or 0.6%, to 7855.12. Mr. Powell told Congress that strong economic growth and stable inflation should keep the central bank on track to gradually raise short-term interest rates.
Published:7/17/2018 10:01:34 PM
"Things Are Getting Real" - Companies Are Reporting The Impact Of Tariffs On Their Business
While President Trump's latest round of tariffs has only just taken effect, and his earlier tariffs on steel and aluminum weren't widely imposed on American allies until May, American companies, or foreign firms' US-based subsidiaries, are already complaining about the negative impact that tariffs are expected to have. And as the White House mulls over whether to slap 10% tariffs on another $200 billion of Chinese imports, the situation is finally "getting real." Companies have warned for months that the tariffs would hurt economic growth, but to try and get a handle on the "real-world impact"of these policies, Bloomberg is compiling a list of companies that have either mentioned the tariffs during their earnings calls, or have released some other tariff-based announcement.
Though tariffs will have an impact on big and small US companies, Bloomberg is focusing on only the biggest publicly-traded firms. As Bloomberg points out, while Trump says he wants to protect American jobs, General Motors says his threat to tax imports of auto parts could force GM to cut its workforce in the US. Meanwhile, higher US tariffs on steel have prompted Germany’s Kloeckner & Co. to raise its earnings forecast because prices have risen so much.
Here's a roundup of the headlines, with link. Only two of the references - Kloeckner's and Ryerson's - have been positive.
* * *
Procter & Gamble: Cites ‘meaningful’ impact of tariffs on a handful of products in Canada, which accounts for 3% of global sales
Kloeckner: Steel trader raises earnings forecast on higher U.S. prices
General Motors: Could be forced to cut U.S. jobs if tariffs are applied to imported vehicles and auto parts.
Volvo Cars: Owner Li Shufu says cars will cost more as trade wars escalate
Ryerson: Metal processor’s sales guidance exceeds estimates in part because of higher anticipated demand from inventory dislocations tied to tariffs
Osram: Trade tensions will weaken sales of automotive lighting parts
Brown-Forman: Raised Jack Daniel’s prices in light of EU tariffs
Harley-Davidson: Plans to move production overseas, sees EU tariff costs of $100 million annually
Daimler: Cut profit forecast on U.S.-China trade fight
Tyson Foods: ‘Day-to-day uncertainty’ in delivering products and services
MillerCoors: Brewer says profit could fall by $40 million depending on how much aluminum prices rise
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While the second-quarter earnings season is only just getting started, we imagine companies will have much more to say in 90 days when the third quarter ends, and the pre-tariff "doomsday-prepping" growth boom that economists have been warning about finally materializes. Still, as we pointed out earlier, concerns about trade, real or expected, are still far behind currency-related concerns.
Published:7/17/2018 9:33:51 PM
Chris Hedges: The War On Assange Is A War On Press Freedom
Authored by Chris Hedges via TruthDig.com,
The failure on the part of establishment media to defend Julian Assange, who has been trapped in the Ecuadorean Embassy in London since 2012, has been denied communication with the outside world since March and appears to be facing imminent expulsion and arrest, is astonishing. The extradition of the publisher - the maniacal goal of the U.S. government - would set a legal precedent that would criminalize any journalistic oversight or investigation of the corporate state. It would turn leaks and whistleblowing into treason. It would shroud in total secrecy the actions of the ruling global elites.
If Assange is extradited to the United States and sentenced, The New York Times, The Washington Post and every other media organization, no matter how tepid their coverage of the corporate state, would be subject to the same draconian censorship. Under the precedent set, Donald Trump’s Supreme Court would enthusiastically uphold the arrest and imprisonment of any publisher, editor or reporter in the name of national security.
There are growing signs that the Ecuadorean government of Lenín Moreno is preparing to evict Assange and turn him over to British police. Moreno and his foreign minister, José Valencia, have confirmed they are in negotiations with the British government to “resolve” the fate of Assange. Moreno, who will visit Britain in a few weeks, calls Assange an “inherited problem” and “a stone in the shoe” and has referred to him as a “hacker.” It appears that under a Moreno government Assange is no longer welcome in Ecuador. His only hope now is safe passage to his native Australia or another country willing to give him asylum.
“Ecuador has been looking for a solution to this problem,” Valencia commented on television. “The refuge is not forever, you cannot expect it to last for years without us reviewing this situation, including because this violates the rights of the refugee.”
Moreno’s predecessor as president, Rafael Correa, who granted Assange asylum in the embassy and made him an Ecuadorean citizen last year, warned that Assange’s “days were numbered.” He charged that Moreno - who cut off Assange’s communications the day after Moreno welcomed a delegation from the U.S. Southern Command - would “throw him out of the embassy at the first pressure from the United States.”
Assange, who reportedly is in ill health, took asylum in the embassy to avoid extradition to Sweden to answer questions about sexual offense charges. He feared that once in Swedish custody for these charges, which he said were false, he would be extradited to the United States. The Swedish prosecutors’ office ended its “investigation” and extradition request to Britain in May 2017 and did not file sexual offense charges against Assange. But the British government said Assange would nevertheless be arrested and jailed for breaching his bail conditions.
The persecution of Assange is part of a broad assault against anti-capitalist and anti-imperialist news organizations. The ruling elites, who refuse to accept responsibility for profound social inequality or the crimes of empire, have no ideological veneer left to justify their greed, ineptitude and pillage. Global capitalism and its ideological justification, neoliberalism, are discredited as forces for democracy and the equitable distribution of wealth. The corporate-controlled economic and political system is as hated by right-wing populists as it is by the rest of the population. This makes the critics of corporatism and imperialism—journalists, writers, dissidents and intellectuals already pushed to the margins of the media landscape—dangerous and it makes them prime targets. Assange is at the top of the list.
I took part with dozens of others, including Daniel Ellsberg, William Binney, Craig Murray, Peter Van Buren, Slavoj Zizek, George Galloway and Cian Westmoreland, a week ago in a 36-hour international online vigil demanding freedom for the WikiLeaks publisher. The vigil was organized by the New Zealand Internet Party leader Suzie Dawson. It was the third Unity4J vigil since all of Assange’s communication with the outside world was severed by the Ecuadorean authorities and visits with him were suspended in March, part of the increased pressure the United States has brought on the Ecuadorean government. Assange has since March been allowed to meet only with his attorneys and consular officials from the Australian Embassy.
The Inter-American Court of Human Rights ruled Friday that those seeking political asylum have the right to take refuge in embassies and diplomatic compounds. The court stated that governments are obliged to provide safe passage out of the country to those granted asylum. The ruling did not name Assange, but it was a powerful rebuke to the British government, which has refused to allow the WikiLeaks co-founder safe passage to the airport.
The ruling elites no longer have a counterargument to their critics. They have resorted to cruder forms of control. These include censorship, slander and character assassination (which in the case of Assange has sadly been successful), blacklisting, financial strangulation, intimidation, imprisonment under the Espionage Act and branding critics and dissidents as agents of a foreign power and purveyors of fake news. The corporate media amplifies these charges, which have no credibility but which become part of the common vernacular through constant repetition. The blacklisting, imprisonment and deportation of tens of thousands of people of conscience during the Red Scares of the 1920s and 1950s are back with a vengeance. It is a New McCarthyism.
Did Russia attempt to influence the election? Undoubtedly. This is what governments do. The United States interfered in 81 elections from 1945 to 2000, according to professor Dov Levin of Carnegie Mellon University. His statistics do not include the numerous coups we orchestrated in countries such as Greece, Iran, Guatemala and Chile or the disastrous Bay of Pigs invasion in Cuba. We indirectly bankrolled the re-election campaign of Russia’s buffoonish Boris Yeltsin to the tune of $2.5 billion.
But did Russia, as the Democratic Party establishment claims, swing the election to Trump? No. Trump is not Vladimir Putin’s puppet. He is part of the wave of right-wing populists, from Nigel Farage and Boris Johnson in Britain to Viktor Orbán in Hungary, who have harnessed the rage and frustration born of an economic and political system dominated by global capitalism and under which the rights and aspirations of working men and women do not matter.
The Democratic Party establishment, like the liberal elites in most of the rest of the industrialized world, would be swept from power in an open political process devoid of corporate money. The party elite, including Chuck Schumer and Nancy Pelosi, is a creation of the corporate state. Campaign finance and electoral reform are the last things the party hierarchy intends to champion. It will not call for social and political programs that will alienate its corporate masters. This myopia and naked self-interest may ensure a second term for Donald Trump; it may further empower the lunatic fringe that is loyal to Trump; it may continue to erode the credibility of the political system. But the choice before the Democratic Party elites is clear: political oblivion or enduring the rule of a demagogue. They have chosen the latter. They are not interested in reform. They are determined to silence anyone, like Assange, who exposes the rot within the ruling class.
The Democratic Party establishment benefits from our system of legalized bribery. It benefits from deregulating Wall Street and the fossil fuel industry. It benefits from the endless wars. It benefits from the curtailment of civil liberties, including the right to privacy and due process. It benefits from militarized police. It benefits from austerity programs. It benefits from mass incarceration. It is an enabler of tyranny, not an impediment.
Demagogues like Trump, Farage and Johnson, of course, have no intention of altering the system of corporate pillage. Rather, they accelerate the pillage, which is what happened with the passage of the massive U.S. tax cut for corporations. They divert the public’s anger toward demonized groups such as Muslims, undocumented workers, people of color, liberals, intellectuals, artists, feminists, the LGBT community and the press. The demonized are blamed for the social and economic dysfunction, much as Jews were falsely blamed for Germany’s defeat in World War I and the economic collapse that followed. Corporations such as Goldman Sachs, in the midst of the decay, continue to make a financial killing.
The corporate titans, who often come out of elite universities and are groomed in institutions like Harvard Business School, find these demagogues crude and vulgar. They are embarrassed by their imbecility, megalomania and incompetence. But they endure their presence rather than permit socialists or leftist politicians to impede their profits and divert government spending to social programs and away from weapons manufacturers, the military, private prisons, big banks and hedge funds, the fossil fuel industry, charter schools, private paramilitary forces, private intelligence companies and pet programs designed to allow corporations to cannibalize the state.
The irony is that there was serious meddling in the presidential election, but it did not come from Russia.
The Democratic Party, outdoing any of the dirty tricks employed by Richard Nixon, purged hundreds of thousands of primary voters from the rolls, denied those registered as independents the right to vote in primaries, used superdelegates to swing the vote to Hillary Clinton, hijacked the Democratic National Committee to serve the Clinton campaign, controlled the message of media outlets such as MSNBC and The New York Times, stole the Nevada caucus, spent hundreds of millions of dollars of “dark” corporate money on the Clinton campaign and fixed the primary debates.
This meddling, which stole the nomination from Bernie Sanders, who probably could have defeated Trump, is unmentioned. The party hierarchy will do nothing to reform its corrupt nominating process.
WikiLeaks exposed much of this corruption when it published tens of thousands of messages hacked from Clinton campaign chairman John Podesta’s email account. The messages brought to light the efforts by the Democratic Party leadership to thwart the nomination of Sanders, and they disclosed Clinton’s close ties with Wall Street, including her lucrative Wall Street speeches. They also raised serious questions about conflicts of interest with the Clinton Foundation and whether Clinton received advance information on primary-debate questions.
The Democratic National Committee, for this reason, is leading the Russia hysteria and the persecution of Assange. It filed a lawsuit that names WikiLeaks and Assange as co-conspirators with Russia and the Trump campaign in an alleged effort to steal the presidential election.
But it is not only Assange and WikiLeaks that are being attacked as Russian pawns. For example, The Washington Post, which has sided with the Democratic Party in the war against Trump, without critical analysis published a report on a blacklist posted by the anonymous website PropOrNot. The blacklist was composed of 199 sites that PropOrNot alleged, with no evidence, “reliably echo Russian propaganda.” More than half of those sites were far-right, conspiracy-driven ones. But about 20 of the sites were major progressive outlets including AlterNet, Black Agenda Report, Democracy Now!, Naked Capitalism, Truthdig, Truthout, CounterPunch and the World Socialist Web Site. PropOrNot, short for Propaganda or Not, accused these sites of disseminating “fake news” on behalf of Russia. The Post’s headline was unequivocal: “Russian propaganda effort helped spread ‘fake news’ during the election, experts say.”
In addition to offering no evidence, PropOrNot never even disclosed who ran the website. Even so, its charge was used to justify the imposition of algorithms by Google, Facebook, Twitter and Amazon to direct traffic away from the targeted sites. These algorithms, or filters, overseen by thousands of “evaluators,” many hired from the military and security and surveillance apparatus, hunt for keywords such as “U.S. military,” “inequality” and “socialism,” along with personal names such as Julian Assange and Laura Poitras. The keywords are known as “impressions.” Before the imposition of the algorithms, a reader could type in the name Julian Assange and be directed to an article on one of the targeted sites. After the algorithms were put in place, these impressions directed readers only to mainstream sites such as The Washington Post. Referral traffic from the impressions at most of the targeted sites has plummeted, often by more than half. This isolation will be compounded by the abolition of net neutrality.
Any news or media outlet that addresses the reality of our failed democracy and exposes the crimes of empire will be targeted. The January 2017 Director of National Intelligence Report spent seven pages on RT America, where I have a show, “On Contact.” The report does not accuse RT America of disseminating Russian propaganda, but it does allege the network exploits divisions within American society by giving airtime to dissidents and critics including whistleblowers, anti-imperialists, anti-capitalists, Black Lives Matter activists, anti-fracking campaigners and the third-party candidates the establishment is seeking to mute.
If the United States had a public broadcasting system free from corporate money or a commercial press that was not under corporate control, these dissident voices would be included in the mainstream discourse. But we don’t. Howard Zinn, Noam Chomsky, Malcolm X, Sheldon Wolin, Ralph Nader, James Baldwin, Susan Sontag, Angela Davis and Edward Said once appeared regularly on public broadcasting. Now critics like these are banned, replaced with vapid courtiers such as columnist David Brooks. RT America was forced to register under the Foreign Agent Registration Act (FARA). This act requires Americans who work for a foreign party to register as foreign agents. The FARA registration is part of the broader assault on all independent media, including the effort to silence Assange.
WikiLeak’s publication in 2017 of 8,761 CIA files, known as Vault 7, appeared to be the final indignity. Vault 7 included a description of the cyber tools used by the CIA to hack into computer systems and devices such as smartphones. Former CIA software engineer Joshua Adam Schulte was indicted on charges of violating the Espionage Act by allegedly leaking the documents.
The publication of Vault 7 saw the United States significantly increase its pressure on the Ecuadorean government to isolate and eject Assange from the embassy. Mike Pompeo, then the CIA director, said in response to the leaks that the U.S. government “can no longer allow Assange and his colleagues the latitude to use free speech values against us.” Attorney General Jeff Sessions said Assange’s arrest was a “priority.”
It is up to us to mobilize to protect Assange. His life is in jeopardy. The Ecuadorean government, violating his fundamental rights, has transformed his asylum into a form of incarceration. By cutting off his access to the internet, it has deprived him of the ability to communicate and follow world events. The aim of this isolation is to pressure Assange out of the embassy so he can be seized by London police, thrown into a British jail and then delivered into the hands of Pompeo, John Bolton and the CIA’s torturer in chief, Gina Haspel.
Assange is a courageous and fearless publisher who is being persecuted for exposing the crimes of the corporate state and imperialism. His defense is the cutting edge of the fight against government suppression of our most important and fundamental democratic rights. The government of Prime Minister Malcolm Turnbull of Australia, where Assange was born, must be pressured to provide him with the protection to which he is entitled as a citizen. It must intercede to stop the illegal persecution of the journalist by the British, American and Ecuadorean governments. It must secure his safe return to Australia. If we fail to protect Assange, we fail to protect ourselves.
Published:7/17/2018 9:05:16 PM
Chicago Considering $6 Million Universal Basic Income Pilot
Citing the danger automation poses to low-income jobs, Chicago Alderman Ameya Pawar wants to hand cash to every man, woman and child in the city according to The Intercept - while the city's broken pension system has already saddled every resident with $11,000 of debt.
Pointing to investments in autonomous vehicles by companies like Tesla, Amazon, and Uber, Pawar observed that long-haul trucking jobs, historically a source of middle-class employment, may become obsolete. More people out of work means more political polarization, says Pawar. ”We have to start talking about race and class and geography, but also start talking about the future of work as it relates to automation. All of this stuff is intertwined.” -The Intercept
A one-time hopeful for Illinois governor until he was outspent by two billionaires, Pawar has waxed eloquent over politicians who pit groups of poor people against each other to sow discord.
“You know, the British pit Hindus and Muslims against one another,” Pawar told The Intercept at the time, drawing on his Indian-American heritage. “Pit people against one another based on class and geography, caste … this is no different. Chicago versus downstate. Downstate versus Chicago. Black, white, brown against one another. All poor people fighting over scraps.”
And with dwindling jobs due to automation, the Chicago Alderman is making the case that Universal Basic Income (UBI) is the only solution.
Pawar thinks that one way to battle racial resentment is to address the economic precarity that politicians have used to stoke it. He has decided to endorse the universal basic income — an idea that has been picking up steam across the world. -The Intercept
“From a race and class perspective, just know that 66 percent of long-haul truck drivers are middle-aged white men,” he observed. “So if you put them out of work without any investment in new jobs or in a social support system so that they transition from their job to another job, these race and class and geographical divides are going to grow.”
Proponents of Universal Basic Income want an alternative to the current system of distributing goods in-kind, as is the case with the Supplemental Nutritional Assistance Program (SNAP). They say that cash transfer programs (UBI) "sidestep the administrative costs of distributing in-kind goods," reports The Intercept, while avoiding the stigma of food stamps.
To that end, Pawar has rolled out a pilot proposal for UBI which would go to 1,000 households:
Pawar recently introduced a pilot for a UBI program in Chicago. Under his program, $500 a month would be delivered to 1,000 Chicago families — no strings attached. Additionally, the proposal would modify the Earned Income Tax Credit program for the same 1,000 families, so they’d receive payments on a monthly basis instead at the end of the year — a process known as “smoothing” that enables families to integrate the tax credit into their monthly budgets. -The Intercept
Pawar has convinced most Chicago lawmakers to co-sponsor the plan, and he is hoping that Mayor Rahm Emanuel will work with the Chicago City Council to implement it.
“Nearly 70 percent of Americans don’t have $1,000 in the bank for an emergency,” Pawar told The Intercept. “UBI could be an incredible benefit for people who are working and are having a tough time making ends meet or putting food on the table at the end of the month. … It’s time to start thinking about direct cash transfers to people so that they can start making plans about how they’re going to get by.” -The Intercept
On Tuesday, Emanuel's old boss, former President Obama advocated for Universal Basic Income while speaking at the 2018 Nelson Mandela lecture.
If Pawar's plan is implemented, Chicago will be the largest city to test a UBI scheme. UBI advocate and founder of the People's Policy Project told The Intercept that he's skeptical about large municipalities running successful UBI programs because of a large city's limited capacity to collect revenue.
“This looks like a UBI pilot program, which is a good idea, just to study its effects and produce data that can help guide other UBI efforts,” he told The Intercept.
“Our hope, that I know will be born out in this pilot, is that it will show that when we smooth out the EITC, and we provide a monthly basic income to 1,000 families, that they will be able to plan for expenses, they can make decisions about savings, they can make decisions about investing, they could make decisions about how they could deal with a financial emergency, just like all families do,” Pawar told The Intercept. “And once implemented, we’ll be able to hopefully scale it.”
That said, to Pawar - the question isn't whether the United States can afford to implement UBI, rather, whether it can afford not to.
“My response to Amazon, and Tesla, and Ford, and Uber … we need to start having a conversation about automation and a regulatory framework so that if jobs simply go away, what are we going to do with the workforce? … If [those companies are] reticent to pay their fair share in taxes and still want tax incentives and at the same time automate jobs, what do you think is going to happen?” Pawar asked.
“These divisions are going to grow and, in many ways, we’re sitting on a powder keg.”
To give Chicago's entire population of 2.7 million a check for $500 per month would cost $1.35 Billion per month, or $16.2 billion per year. Considering the city's $71 billion debt load - of which around $40 billion is pension debt, UBI would add nearly 23% per year to that ticking time bomb.
But hey, it's a nice thought we're sure will translate to lots of votes.
Published:7/17/2018 8:46:38 PM
MarketWatch First Take: The chip industry’s Old Boys Club may be experiencing its #MeToo moment
The chief executives of three semiconductor companies have stepped down in the span of one month, in what appears to be a #MeToo-inspired and long-overdue reckoning for the male-dominated industry.
Published:7/17/2018 8:07:35 PM
Japan shares jump as yen bows to strong dollar
Asian shares followed Wall Street higher on Wednesday as a bullish outlook from the head of the U.S. central bank buoyed the dollar, lifted Tokyo shares to a one-month top and sent gold to a one-year trough. Japan's Nikkei (.N225) leapt out of the blocks with a 1 percent gain as a weakening yen promised to fatten exporters' profits. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> added 0.16 percent and South Korea's market (.KS11) 0.85 percent.
Published:7/17/2018 8:07:35 PM
Senators: Your Smart TV Might Be Spying On You
It has been almost 70 years since George Orwell’s dystopian novel Nineteen Eighty-Four was published, but now, some of his forward-looking warnings are starting to be realized in 2018. Take this stunning letter from Senators Edward Markey, D-Mass., and Richard Blumenthal, D-Conn., who told the Federal Trade Commission (FTC) Chairman Joseph Simmons last Thursday that internet-connected smart TVs are spying and creating profiles on the American people.
“Televisions have entered a new era, but that does not mean that users’ sensitive information no longer deserves protection,” the senators wrote.
“The content consumers watch is private, and it should not be assumed that customers want companies to track and use information on their viewing habits.”
The letter requested that the FTC maintain its program on monitoring Smart TVs and asked for an entirely new investigation into the privacy policies and practices of manufacturers.
The senators explained how smart TVs are data mining users’ viewing history by collecting the data to tailor and deliver precision-guided advertisements towards unknowing consumers. By harvesting vast amounts of data, including broadcasts, cable shows, video games, Netflix shows, and other applications, these smart devices develop a comprehensive profile of the users’ preferences and even specific characteristics. It even can “identify users’ political affiliations based on whether they watch conservative or liberal media outlets,” the letter explained.
Consumers are generally unaware of tracking features unless they meticulously examine the device’s owner manual and legal notices buried within.
The senators cite a New York Times report on Samba TV, a company that utilizes a content recommendation engine and viewer tracking application designed for high-tech TVs. “Recent reports suggest that Samba TV, one of the largest companies tracking smart TV users’ viewing behavior, offers consumers the opportunity to enable their tracking service, but does not provide sufficient information about its privacy practices to ensure users can make truly informed decisions,” said the senators.
They also note the FTC has taken disciplinary action before, investigating Vizio for collecting data on 11 million smart TVs without consumers’ consent. Last year, the company settled with both the FTC and the New Jersey Attorney General, agreeing to pay $2.2 million in fines.
Blumenthal and Markey also sent letters to Facebook and Google on their data policies. The pair stressed that greater FTC oversight of Facebook is needed following the events of the Cambridge Analytica scandal.
Last month, Facebook filed an alarming patent that would allow it to send a signal through the broadcast content that would connect with users’ smartphones to harvest mobile phone data.
The FTC, Markey, and Blumenthal did not respond to requests for comments via CNET.
The senators concluded their letter by stating, “We respectfully request that the FTC continue its efforts on smart TVs and launch an investigation into the privacy policies and practices of smart TV manufacturers.”
It seems like Nineteen Eighty-Four is here as televisions now watch you.
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Read Full Letter:
Published:7/17/2018 8:07:35 PM
Papa John Accuses PR Firm Of Blackmailing Him For $6 Million; Refused To Work With Kanye Over "N" Word
Papa John's founder John Schnatter is punching back after resigning from his company's board last week in disgrace over racially insensitive comments he made during a "diversity media training" conference call with marketing firm Laundry Service.
In a Saturday letter to the board of directors, Schnatter claims that Laundry Service tried to blackmail the pizza chain for $6 million to keep quiet about his use of the N-word during an answer to a question over whether he's a racist. He also says that he refused to work with Kanye West over the artist's use of the N-word.
Schnatter resigned his post last week at the behest of Papa John's board after confirming the Forbes' report. However, he said the comments were taken out of context and that he was provoked into using the N-word after Laundry Service executives on the call suggested the pizza chain bring on performer Kanye West as a co-spokesman for television spots and promotions.
Schnatter said he refused to work with West because "he uses the 'N' word in his lyrics," according to the letter. It was later on the call that Schnatter said he used the actual word when pressed whether or not he was a racist. -CNBC
"I then said something on the order of, Colonel Sanders used the word 'N,' (I actually used the word,) that I would never use that word and Papa John’s doesn’t use that word," Schnatter told the board. "Let me be very clear: I never used the 'N' word in that meeting as a racial epithet, nor would I ever."
During the market call, Schnatter also reflected on his early life in Indiana, where he said people used to drag African-Americans from trucks until they died. He apparently intended for the remarks to convey his antipathy to racism, but multiple individuals on the call found them to be offensive, the source said.
Schnatter reiterated his side of events in the letter, stating that Laundry Service was brought in to conduct a "diversity media training" session ahead of a conference he was attending.
He said Papa John's fired Laundry Service the day after the call took place, but still owed the media agency about $1.3 million. Schnatter said the agency requested $6 million "because they claimed some of their people had been offended by what I had said," he wrote.
One their attorneys threatened "a smear campaign" if Papa John's didn't pay up, Schnatter said, adding that the company ultimately paid Laundry Service $2.5 million. -CNBC
"I will not allow either my good name or the good name of the company I founded and love to be unfairly tainted,” Schnatter told the board - which he criticized for forcing his resignation as chairman before conducting a detailed investigation into a Wednesday Forbes article detailing his use of the N-word.
“The board asked me to step down as chairman without apparently doing any investigation," Schnatter said in the letter obtained by CNBC. "I agreed, though today I believe it was a mistake to do so. I have checked with corporate governance experts who tell me that this was not a proper action by the Board."
Glaser, Schnatter's lawyer, warned the board in a separate letter sent Sunday against removing him altogether after several directors questioned whether he should give up his seat, she said. Glaser told CNBC the board doesn't have authority to remove him without shareholder approval.
That would be a tough vote to win since Schnatter owns almost 30 percent of the outstanding shares, according to FactSet. Glaser asked the board to open an investigation into the call and subsequent events. -CNBC
On Sunday the pizza chain announce that Schnatter was prohibited from speaking to the press, and that in addition to being removed from promotional materials, he had his office space revoked at its Louisville, Kentucky, headquarters.
Published:7/17/2018 7:31:14 PM
Stock investors should not fear the inverted yield curve, strategist says
An inverted yield curve may not be a dreaded harbinger of doom for the bull market, according to Ryan Detrick, senior market strategist at LPL Research, who believes that stocks have awhile to go before worrying about unseemly yield curves or even a recession. An inverted yield curve, where long-term yields such as the 10-year Treasury yield drop below their shorter-term peers, symbolizes a lack of confidence in the economy. It has also emerged as a closely watched early warning signal for economic trouble, particularly in the wake of research from the San Francisco Federal Reserve that every U.S. recession in the past 60 years was preceded by an inverted yield curve.
Published:7/17/2018 7:31:14 PM
Earnings Outlook: What will chip makers say about the trade war?
Chip-company executives will to have to address an elephant in the room on conference calls this earnings season as the industry grapples with growing trade tensions with one of its largest customers, China.
Published:7/17/2018 7:31:14 PM
Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer
Fed Chairman Jerome Powell gave an upbeat assessment of the U.S. economy and indicated that it was "difficult" to forecast how trade disputes would impact the economy. The dollar was firmer following Powell's remarks. Asian shares looked set to rise on Wednesday, tracking gains seen on Wall Street amid earnings season news and following upbeat remarks from Federal Reserve Chairman Jerome Powell during his congressional testimony.
Published:7/17/2018 7:02:35 PM
Pepe Escobar: Russophobia Is A 24/7 Industry
Authored by Pepe Escobar via The Asia Times,
US President stirs up a hornet's nest with his press conference alongside his Russian counterpart, but it seems that no 'grand bargain' was struck on Syria, and on Iran they appear to strongly disagree
"The Cold War is a thing of the past.” By the time President Putin said as much during preliminary remarks at his joint press conference with President Trump in Helsinki, it was clear this would not stand. Not after so much investment by American conservatives in Cold War 2.0.
Russophobia is a 24/7 industry, and all concerned, including its media vassals, remain absolutely livid with the “disgraceful” Trump-Putin presser. Trump has “colluded with Russia.” How could the President of the United States promote “moral equivalence” with a “world-class thug”?
Multiple opportunities for apoplectic outrage were in order.
Trump: “Our relationship has never been worse than it is now. However, that changed. As of about four hours ago.”
Putin: “The United States could be more decisive in nudging Ukrainian leadership.”
Trump: “There was no collusion… I beat Hillary Clinton easily.”
Putin: “We should be guided by facts. Can you name a single fact that would definitively prove collusion? This is nonsense.”
Then, the clincher: the Russian president calls [Special Counsel] Robert Mueller’s ‘bluff’, offering to interrogate the Russians indicted for alleged election meddling in the US if Mueller makes an official request to Moscow. But in exchange, Russia would expect the US to question Americans on whether Moscow should face charges for illegal actions.
Trump hits it out of the park when asked whether he believes US intelligence, which concluded that Russia did meddle in the election, or Putin, who strongly denies it.
“President Putin says it’s not Russia. I don’t see any reason why it would be.”
As if this was not enough, Trump doubles down invoking the Democratic National Committee (DNC) server. “I really do want to see the server. Where is the server? I want to know. Where is the server and what is the server saying?”
It was inevitable that a strategically crucial summit between the Russian and American presidencies would be hijacked by the dementia of the US news cycle.
Trump was unfazed. He knows that the DNC computer hard-drives – the source of an alleged “hacking” – simply “disappeared” while in the custody of US intel, FBI included. He knows the bandwidth necessary for file transfer was much larger than a hack might have managed in the time allowed. It was a leak, a download into a flash-drive.
Additionally, Putin knows that Mueller knows he will never be able to drag 12 Russian intelligence agents into a US courtroom. So the – debunked – indictment, announced only three days before Helsinki, was nothing more than a pre-emptive, judicial hand grenade.
No wonder John Brennan, a former CIA director under the Obama administration, is fuming. “Donald Trump’s press conference performance in Helsinki rises to exceed the threshold of ‘high crimes and misdemeanors.’ It was nothing short of treasonous. Not only were Trump’s comments imbecilic, he is wholly in the pocket of Putin.”
How Syria and Ukraine are linked
However, there are reasons to expect at least minimal progress on three fronts in Helsinki: a solution for the Syria tragedy, an effort to limit nuclear weapons and save the Intermediate-range Nuclear Forces treaty signed in 1987 by Reagan and Gorbachev, and a positive drive to normalize US-Russia relations, away from Cold War 2.0.
Trump knew he had nothing to offer Putin to negotiate on Syria. The Syrian Arab Army (SAA) now controls virtually 90% of national territory. Russia is firmly established in the Eastern Mediterranean, especially after signing a 49-year agreement with Damascus.
Even considering careful mentions of Israel on both sides, Putin certainly did not agree to force Iran out of Syria.
No “grand bargain” on Iran seems to be in the cards. The top adviser to Ayatollah Khamenei, Ali Akbar Velayati, was in Moscow last week. The Moscow-Tehran entente cordiale seems unbreakable. In parallel, as Asia Times has learned, Bashar al-Assad has told Moscow he might even agree to Iran leaving Syria, but Israel would have to return the occupied Golan Heights. So, the status quo remains.
Putin did mention both presidents discussed the Iran nuclear deal or Joint Comprehensive Plan Of Action and essentially they, strongly, agree to disagree. US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin have written a letter formally rejecting an appeal for carve-outs in finance, energy and healthcare by Germany, France and the UK. A maximum economic blockade remains the name of the game. Putin may have impressed on Trump the possible dire consequences of a US oil embargo on Iran, and even the (far-fetched) scenario of Tehran blocking the Strait of Hormuz.
Judging by what both presidents said, and what has been leaked so far, Trump may not have offered an explicit US recognition of Crimea for Russia, or an easing of Ukraine-linked sanctions.
It’s reasonable to picture a very delicate ballet in terms of what they really discussed in relation to Ukraine. Once again, the only thing Trump could offer on Ukraine is an easing of sanctions. But for Russia the stakes are much higher.
Putin clearly sees Southwest Asia and Central and Eastern Europe as totally integrated. The Black Sea basin is where Russia intersects with Ukraine, Turkey, Eastern Europe and the Caucasus. Or, historically, where the former Russian, Ottoman and Habsburg empires converged.
A Greater Black Sea implies the geopolitical convergence of what’s happening in both Syria and Ukraine. That’s why for the Kremlin only an overall package matters. It’s not by accident that Washington identified these two nodes – destabilizing Damascus and turning the tables in Kiev – to cause problems for Moscow.
Putin sees a stable Syria and a stable Ukraine as essential to ease his burden in dealing with the Balkans and the Baltics. We’re back once again to that classic geopolitical staple, the Intermarium (“between the seas”). That’s the ultra-contested rimland from Estonia in the north to Bulgaria in the south – and to the Caucasus in the east. Once, that used to frame the clash between Germany and Russia. Now, that frames the clash between the US and Russia.
In a fascinating echo of the summit in Helsinki, Western strategists do lose their sleep gaming on Russia being able to “Finlandize” this whole rimland.
And that brings us, inevitably, to what could be termed The German Question. What is Putin’s ultimate goal: a quite close business and strategic relationship with Germany (German business is in favor)? Or some sort of entente cordiale with the US? EU diplomats in Brussels are openly discussing that underneath all the thunder and lightning, this is the holy of the holies.
Take a walk on the wild side
The now notorious key takeaway from a Trump interview at his golf club in Turnberry, Scotland, before Helsinki, may offer some clues.
“Well, I think we have a lot of foes. I think the European Union is a foe, what they do to us in trade. Now, you wouldn’t think of the European Union, but they’re a foe. Russia is a foe in certain respects. China is a foe economically, certainly they are a foe. But that doesn’t mean they are bad. It doesn’t mean anything. It means that they are competitive.”
Putin certainly knows it. But even Trump, while not being a Clausewitzian strategist, may have had an intuition that the post-WWII liberal order, built by a hegemonic US and bent on permanent US military hegemony over the Eurasian landmass while subduing a vassal Europe, is waning.
While Trump firebombs this United States of Europe as an “unfair” competitor of the US, it’s essential to remember that it was the White House that asked for the Helsinki summit, not the Kremlin.
Trump treats the EU with undisguised disdain. He would love nothing better than for the EU to dissolve. His Arab “partners” can be easily controlled by fear. He has all but declared economic war on China and is on tariff overdrive – even as the IMF warns that the global economy runs the risk of losing around $500 billion in the process. And he faces the ultimate intractable, the China-Russia-Iran axis of Eurasian integration, which simply won’t go away.
So, talking to “world-class thug” Putin – in usual suspect terminology – is a must. A divide-and-rule here, a deal there – who knows what some hustling will bring? To paraphrase Lou Reed, New Trump City “is the place where they say “Hey babe, take a walk on the wild side.”
During the Helsinki presser, Putin, fresh from Russia’s spectacular World Cup soft power PR coup, passed a football to Trump. The US president said he would give it to his son, Barron, and passed the ball to First Lady Melania. Well, the ball is now in Melania’s court.
Published:7/17/2018 7:02:35 PM
Stocks - Nasdaq Closes at Record High as Netflix Pares Losses
Investing.com – The tech-heavy Nasdaq closed at record highs Tuesday, led by a rebound in Netflix from its lows and a surge in Amazon, as the e-commerce giant's 'Prime Day' sales bonanza triggered a sharp uptick in sales.
Published:7/17/2018 6:37:58 PM
Walmart Considers Streaming Service To Rival Netflix, Amazon
Walmart has been mulling a low-cost streaming video service to rival Netflix and Amazon Prime Video, according to a report by The Information.
The service would be priced below $8 per month, while Netflix now costs between $8 and $14 per month, and Amazon Prime Video at $8.99 per month (though it is included in an Amazon Prime membership).
Walmart’s possible foray into streaming comes amid a broader battle between the company and Amazon. Walmart has spent heavily to build out its e-commerce platforms to combat Amazon’s dominance in the sector, while Amazon purchased Whole Foods last year in a push to garner a larger share of the grocery industry. -Fox Business
The Bentonville, Ark.-based retail giant is also considering an ad-supported free streaming service, according to The Information's source.
It is unknown whether Walmart would introduce its own original content as Netflix and Amazon are both doing - a move which would require a significant capital outlay. The company could also attempt to acquire a studio or other entertainment entity, similar to AT&T's intended purchase of Time Warner.
Perhaps the superstore realizes that the future of retail is online, so they may as well establish a stronghold with a streaming portal. Customers within range of Amazon Fresh and Amazon Prime Now instant delivery services can already just hit buttons from the comfort of their reinforced couches and simply wait for other people to consumables to their doorsteps. And while the Seattle-based online retailer accounts nearly 50% of nationwide retail sales, they are just 5% of all online purchases. What will that number be in 10-15 years as delivery technology becomes even cheaper and more efficient?
And most importantly, what woud become of the "People of Walmart"?
Published:7/17/2018 6:37:57 PM
Mexican President Gives Himself A 60% Pay Cut
Mexico's leftist President-elect Andrews Manuel López Obrador announced plans to cut his salary from his predecessor Enrique Peña Nieto's $171,000 per year (270,000 pesos) to $68,544 - about enough to survive in San Francisco with three roommates.
"What we want is for the budget to reach everybody," López Obrador told reporters on Sunday. The President-elect said that he would have reduced his salary further, however he doesn't want to stoke resentment among future Cabinet members who are leaving private sector positions and academic posts that already pay more than the new ceiling for public officials.
López Obrador then reiterated several campaign promises, including cuts on taxpayer-funded perks for high-level government officials, such as private medical insurance, chauffeurs and bodyguards - though considering the 130 candidates who were assassinated during the election, he may want to reconsider on the bodyguards.
At the same time, he doubled down on pledges to stem corruption. Mexico ranks 135 out of 180 countries in Transparency International's 2017 Corruption Perception Index, with higher numbers indicating higher levels of corruption.
Public officials will have to disclose their assets, he said, and corruption will be considered a serious offense. -LA Times
Obrador's supporters cheered the proposals.
"This is what we need," said 57-year-old Josefina Arciniega, who earns 12,000 pesos a month as an administrative assistant ($635). "We are fed up."
Arciniega says she's tired of low-level public servants asking for bribes while she watches high-ranking officials living in luxury amid a country of struggling citizens.
Orlando Alvarado, a chemical engineer standing next to Arciniega, called Lopez Obrador's proposed presidential salary a dignified wage. -LA Times
"A lot of Mexican professionals don't even make 6,000 pesos a month. I'm talking about accountants and doctors," he said.
López Obrador's comments come weeks after he beat the candidate from the country's ruling Institutional Revolutionary Party to become Mexico's next president.
Published:7/17/2018 6:10:14 PM
China Plans Launch Of Blackwater-Style Agency For Offshore Security
Since formally launching in 2013, Chinese President Xi Jinping's Belt and Road Initiative (BRI) has been riddled with multiple unforeseen problems of a magnitude equaling the hugely ambitious infrastructural project spanning a continent and affecting 4.4 billion people, which will involve a total investment from Beijing that could surpass a trillion dollars.
Foremost among those problems has been security as China has brokered multi-billion dollar projects in less than stable political environments ranging from Pakistan to Iran to East Africa, and even includes plans for war-ravaged Afghanistan, South Sudan and Yemen, as key points along the 'new silk road'.
A new investigative report in the South China Morning Post (SCMP) reveals that while China's some 5,000 mostly ill-trained private security firms (only six of which are certified to operate overseas) struggle to keep up with the demand for experienced professionals that comes with the now nearly one million Chinese workers deployed to major BRI projects abroad, multinational firms such as Erik Prince's expanding Frontier Services Group (FSG) as well as Chinese state security services themselves are filling the gap.
This as Chinese companies have increasingly found themselves vastly under-budgeted for security while operating tense political landscapes.
For example, the South China Morning Post notes that "Since 2014, at least 44 Chinese nationals have been killed in Pakistan, despite Islamabad deploying thousands of military personnel to protect Chinese workers on energy and infrastructure projects in the country." And this included instances of Islamic terrorism in a historically restive Balochistan province: "Two of the dead were Chinese language teachers killed by Islamic State in Pakistani city of Quetta, the heart of the US$50 billion China-Pakistan Economic Corridor."
Perhaps most worrisome about the new report concerns the prospect of rapid Chinese military and intelligence expansion under the guise of linking east Asia with Europe in the 'new silk road' trade corridor. According to the SCMP:
Beijing is exploring the possibility of establishing a security agency to coordinate security for Chinese enterprises abroad. According to several independent sources, if the plan goes ahead, the Ministry of State Security would be responsible for collecting intelligence and providing non-traditional security support to the new agency.
This would mean greater Chinese state security inroads while providing "intelligence and providing non-traditional security support" into the some 68 countries that are signatories to the Belt and Road Initiative.
The SCMP report confirms this is not merely a "possibility" being explored further, but is already becoming a reality as “[Officials from] the ministries of public security, state security, foreign affairs and commerce are working together to come up with details [on how to run the] new security agency, which will play a leading role in coordinating Chinese security firms’ operations in host countries,” one source told the SCMP.
China is spending roughly $150bn a year in the countries involved in the BRI which plans to link Asia, Europe, and Africa in a vast Chinese-underwritten free trade infrastructure, but security is the hidden cost catching investors by surprise as "In the past, Chinese companies have turned to local and multinational sources to provide external security abroad – and the bills can be hefty. For example, by some estimates China’s three energy giants – CNPC, Sinopec and CNOOC – together spend more than US$2 billion a year on security overseas." The SCMP cites one private security expert as saying "many Chinese clients, especially the newly rich, were not prepared to set money aside until their life has been at risk. Then everything changes."
This is what has created the fertile environment for Erik Prince, controversial founder of Blackwater, to lately begin to erect a new mercenary empire in China in a market where Western firms of necessity find themselves working closely with Chinese state security. According to the SCMP report:
Last year, Prince sold more than 40 per cent of his FSG shareholding to Chinese state-owned conglomerate Citic Group, paving the way for FSG to set up more security branches on the Chinese mainland to expand its business.
In March, FSG said it had raised US$107 million in capital from Citic.
In a written statement to the South China Morning Post, FSG said it had more than 20 Chinese clients across the Middle East and Africa, and it had “to dispel a lot of the misconceptions” about operating in high-risk countries.
Chinese firms are increasingly reliant on their Western counterparts for training by combat experienced personnel, giving companies like FSG a lead role in an industry closely intertwined with the Chinese state: "FSG also owns a quarter of Beijing’s International Security Defence College, which claims to be the largest private security training school in China, training more than 6,000 all-round security personnel."
While as we previously noted China’s expanding security interests are natural and justifiable by virtue of the need to defend the trade routes and infrastructure that form the backbone of its export-oriented economy and consequently its national stability, it will be interesting to see just how "open" BRI host countries remain to the prospect of the Chinese Ministry of State Security joint agency overseeing shady security firms like Prince's FSG in their "intelligence gathering" and security missions, even if it is ostensibly to protect thousands of miles of road, rail, pipelines and oil fields.
Published:7/17/2018 5:30:50 PM
What Happened in the Stock Market Today
On a day stocks climbed following optimistic comments by the chairman of the Federal Reserve, Netflix reported disappointing subscriber additions, and Johnson & Johnson rose on strong pharmaceuticals sales.
Published:7/17/2018 5:07:26 PM
Why Is Venezuela Still Sending Subsidized Oil To Cuba?
Authored by Haley Zaremba via Oilprice.com,
In the past, oil has accounted for 96 percent of Venezuela's exports and over 40 percent of government revenues. Now, as the nation’s economy continues to crumble amid sanctions, political strife, and low oil prices, Venezuela’s all-important oil production is plummeting. In fact, last month’s production was the lowest in 30 years at 1.5 million barrels a day. In desperation, the struggling administration has even begun to shut downproduction proactively as their terminal storage meets maximum capacity and the government faces major bottlenecks at storage facilities and ports.
As oil production and exports drop, the Venezuelan government has even less money to buy essentials like food, medicines, and other basic goods--a well-established crisis growing worse all the time. The International Monetary Fund (IMF) has said that the brutal economic crisis underway in Venezuela is one of the worst in modern history. The nation’s once powerful economy has plummeted 45 percent in the last five years, and the IMF projects that it will shrink 15 percent in 2018 alone. Out-of-control inflation rates will reach 13,800 percent.
However, in the middle of the chaos -- a collapsing regime, widespread hunger, medical shortages -- there is one holdover from the socialist platform that autocratic President Nicolas Maduro has refused to lapse on. Despite the crisis on his own soil, Maduro continues to grant generous oil subsidies to Cuba.
The small island nation, not without its own economic issues, has been dependent on cheap Venezuelan oil since the 1990s. After the fall of the Soviet Union, comrade Cuba was in economic shambles. It was at this point that they turned to Venezuela reduced-rate crude oil, in exchange for sending skilled laborers across the Caribbean.
Now, as Venezuela sinks deeper and deeper into an extreme economic depression, few could have predicted that they would still be making good on that decade-old agreement with Cuba--even the Cubans themselves have been scrambling for new sources of cheap crude. Last year Venezuela even cut off exports to Cuba for eight months, but then once again began sending shipments of light oil to Cuba and Curacao in March 2017 at a great cost to their own refineries, which are running at just a small fraction of their capacity thanks to lack of maintenance and drained funds.
Despite all this, amazingly, there was a reported shipment of 500,000 barrels of Venezuelan crude shipped to northwestern Cuba last week, sparking an uproar back at home. Venezuela continues to supply Cuba with around 55,00 barrels of oil per day, costing the nation around $1.2 billion per year, an unthinkable generosity when 9 million Venezuelans are reporting that they can only afford to eat once a day. This money could be channeled into turning around Venezuela’s own crisis, to curb inflation and import desperately needed medicines that can no longer be found on empty Venezuelan shelves.
There is a new, albeit small, ray of hope, however, for Venezuela’s ailing economy. On July 1st Mexico overwhelmingly elected a leftist president for the first time in decades. Andres Manuel Lopez Obrador, known locally as AMLO, pledged on the campaign trail to bring Mexico’s foreign policy back to a standard of non-intervention. This would mean walking back current neoliberal Mexican President Enrique Peña-Nieto’s efforts to build a regional alliance against Maduro and put pressure on him to ease up on his increasingly despotic tendencies.
Despite public outcry against Maduro’s continued financial support of Cuba as his own people without food and desperately needed medicines, the reality is that Cuba is one of Venezuela’s last remaining allies. Even if Mexico is no longer actively working against Maduro’s regime, they won’t be supporting it the way that Cuba has and continues to do. The sad truth is that Maduro has and likely will continue to put politics over people, and cheap oil will continue to flow out of the pockets of Venezuela and into the ports of Havana, which sit ready and waiting.
Published:7/17/2018 5:07:25 PM
After the Bell: Dow Rises 56 Points as Stocks Keep Chugging Higher
Stocks notched another day of gains on Tuesday, on a day when there was little in the way of market-moving news. The Dow Jones Industrial Average gained 55.53 points, or 0.22%, to 25,119.89, while the S&P 500 is up 11.12 points, or 0.40%, to 2809.55 and the Nasdaq Composite added 49.40 points, or 0.63%, to 7855.12. Part of it may have been a "no news is good news," sort of mentality, as Federal Reserve Chief Jerome Powell's dry testimony before the Senate Banking Committee seemed to indicate that the Central Bank was committed to staying the course and markets largely shrugged off earnings reports on a relatively quiet day.
Published:7/17/2018 4:31:17 PM
Netflix Lost $17.8 Million For Each Of Its 112 Emmy Nominations
Authored by Simon Black via SovereignMan.com,
It was only a few day ago that Netflix was riding high.
The streaming company had been nominated for a whopping 112 Emmy awards, more than any other network.
And they’d further managed to unseat HBO’s 17-year reign as the undisputed king of Emmy nominations.
That’s all fine and good. Netflix certainly has some great shows.
But reality started to set in yesterday afternoon when the company reported its quarterly financial results… and the numbers were definitely two thumbs down.
For some painfully idiotic reason, analysts seem to judge Netflix by a single benchmark: the number of subscribers.
If subscriber growth is strong, Netflix stock soars.
I say this is ‘painfully idiotic’ because Netflix loses money year after year. The more subscribers they bring in, the more money they lose.
At the end of 2015, for example, Netflix had 75 million subscribers. But its Free Cash Flow was NEGATIVE $920 million.
The following year, Netflix had grown its subscriber base to 93 million. Yet its Free Cash Flow had sunk even further to negative $1.65 billion.
By the end of 2017, Netflix subscribers totaled 117 million. But the company burned through $2.02 billion.
So when you do the math, you see that each Emmy nomination this year cost Netflix $17.8 million.
That’s a lot worst than last year, when Netflix’s 92 nominations at the 2017 awards cost them $16.0 million.
Clearly the more ‘successful’ Netflix becomes, whether in the quality of its content, or in attracting subscribers, the more money they lose.
Yet the stock surges ever higher. It’s truly bizarre.
Well, it all came crashing down yesterday when Netflix announced growth figures that no longer defied gravity.
Total subscribers came in at below the level that analysts had forecast… and the selling began almost immediately.
In after-hours trading, the stock plummeted by more than $50, around 12%.
Now, maybe the stock rebounds today. Or maybe it falls even more. Day to day fluctuations are impossible to predict.
[ZH: It rebounded miraculously]
What we do know for certain is that businesses exist to make money for their shareholders. That’s sort of the point.
And, sure, some business models do require losing money for a few years and burning through cash before achieving positive Free Cash Flow.
But Netflix doesn’t appear to have any plans to make money in the foreseeable future.
Instead, they’re going deeper into debt to spend more money on content.
By Netflix’s own estimates, the company expects to burn $4 billion of cash this year.
Bear in mind the company also has to compete with the likes of Disney, CBS, AT&T, Apple, Amazon, etc., all of which have their own streaming services and typically have much deeper pockets.
Facebook just launched a new video feature called IGTV on Instagram to compete with YouTube, and they’re spending $1 billion on original content this year. That’s peanuts for Facebook.
Facebook also bought a company called SportsStream in 2013 which allows it to stream live sports; they’ve also negotiated contracts with Major League Baseball, Union of European Football Associations (UEFA), and others.
Amazon is also streaming live sports… and even video games. Plus Amazon is rolling out its own highly acclaimed original content.
Even Google is now in the original content business, having launched Youtube Red recently (and it’s most excellent Cobra Kai series.)
Then there’s HBO, which also cranks out fantastic original content… but also manages to make plenty of money for its parent company.
It’s not to say that Netflix can’t pull it off, or that the company is going under.
But it seems silly for a company that has such stiff competition, such major headwinds, such a serious cash burn, to be valued at such a ridiculously high price.
Sure, there is a chance that Netflix is able to best Google, Amazon, Apple, Facebook, CBS, AT&T, Disney, etc., and manage to (at some point in the future) generate huge Free Cash Flow for its shareholders.
But the stock is priced as if they’ve already succeeded as if it’s ten years later and Netflix has beaten the pants off its competitors.
One of the most important lessons I learned about investing long ago is that you only pay what something is worth RIGHT NOW.
(As a value investor, in fact, I prefer to pay far LESS than what an asset is worth right now.)
You don’t pay what an investment -could- be worth in the future after a ton of work, time, and a little bit of luck.
Years ago I used to invest heavily in real estate, and I can remember people trying to sell me a building by bragging about how much it could be worth once I’ve replaced the roof and cleaned out all the deadbeat tenants.
Yep, the building could definitely be worth a lot more.
But I wasn’t about to write a check for what it -could- be worth. I was only willing to pay what it was worth at that time… which was a hell of a lot less.
We call this phenomenon being ‘priced for perfection’ when an asset is selling as if the business plan has already been accomplished.
It’s a great way to lose money.
When a company is priced for perfection, it only takes one tiny pin to pop that bubble.
That’s what happened yesterday with Netflix: they missed their subscriber numbers, and $16 billion of wealth was wiped out in a matter of minutes.
If anything, it’s a good indication for how quickly an asset that’s priced for perfection can crash.
And there are a lot of those out there.
Published:7/17/2018 4:31:17 PM
Trump Today: Trump Today: President backtracks, now says he accepts Russia meddled in U.S. election
On the defensive after a European trip that drew criticism from fellow Republicans as well as Democrats, President Donald Trump on Tuesday tweeted out defenses to his actions.
Published:7/17/2018 4:31:17 PM
The Margin: One millennial explains how she survives New York on a $25/hour salary (her parents give her money)
A young marketing intern, with a predilection for — you guessed it — avocado toast and hot yoga, describes how she manages to afford to live in New York City on $25 an hour in wages and the occasional babysitting gig.
Published:7/17/2018 4:16:30 PM
US stocks rebound as tech and household goods companies rise
NEW YORK (AP) — U.S. stocks rallied Tuesday as retailers, technology and household goods companies all made solid gains and helped the market shake off a weak start. Netflix slumped after investors were disappointed with the streaming video company's subscriber growth.
Published:7/17/2018 4:16:30 PM
Texas Instruments CEO resigns for violating company's code of conduct
Texas Instruments CEO resigns for violating company's code of conduct
Published:7/17/2018 4:03:22 PM
Russia Liquidates Its US Treasury Holdings
Last month we showed that as Trade Wars began in April, the world's central banks and other official institutions dumped more Treasuries than in any month since January 2016, some $48.3BN, perhaps over concerns of others selling first, and precipitating a sharp move higher in yields. Fast forward one month later to May, when according to the latest just released Treasury International Capital (TIC) update, in May the selling of Treasurys by official entities continued, with another $24BN sold in the month of May, when yields continued to rise and eventually hit the 2018 highs of 3.11%.
But while the selling of Treasuries was to be expected - after all someone had to sell aggressively to push yields sharply higher in April and May - the question was who.
What we showed last month, is that contrary to some speculation, it wasn't Beijing, because after shedding a modest $6BN in April, China actually bought $1.2BN in Treasurys in May, leaving its holdings largely unchanged over the past month.
And while Japan did sell $12BN in TSYs in April, it more than made up for its in May when it purchased $17.5BN, bringing its total to $1048.8BN in May, which means that over the past two month, Japan was a net buyer of US paper.
Meanwhile, the third most prominent holder, hedge funds, aka "Cayman Islands", bought for a second consecutive month, adding another $5BN.
So if the usual suspects were buying, who was selling?
Here is the answer.
Readers may recall that last month we first reported that for all the confusion about sharply higher yields in April, the explanation was simple: it was Vladimir Putin who liquidated a whopping half of Russia's Treasury holdings, which declined by $47.4BN to just $48.7BN - the lowest since 2008 - from $96BN in March.
But wait, it gets better, because as Trump continued to jawbone about more sanctions targeting Russia, Putin did not stop and in May he continued what was an outright liquidation of Russia's TSY holdings, which plunged by another 70%, down from $48.7BN to just $14.8BN in May. Keep in mind this was over $100BN at the start of the year.
And this is what a very politically motivated liquidation of Treasury holdings looks like.
In other words, in just two months, Russia sold a whopping $81BN in treasurys, a liquidation flow that was likely responsible for much if not all the blow out in rates over the period.
Because what else happened as Russia was liquidating 85% of its Treasury holdings in 2 months? 10Y yields soared from 2.7% at the start of April to the 7 year high of 3.11% in late May.
At that point, yields tumbled again as traders freaked out over the trade war with China, and proceeded to rush into deflationary safety.
So just like last month, we can't help but wonder - as the Yuan-denominated oil futures were launched, trade wars were threatened, and as more sanctions were unleashed on Russia - if this wasn't a dress-rehearsal, carefully coordinated with Beijing to field test what would happen if/when China also starts to liquidate its own Treasury holdings.
Published:7/17/2018 4:03:22 PM
NewsWatch: Trump Today: President backtracks, now says he accepts Russia meddled in U.S. election
On the defensive after a European trip that drew criticism from fellow Republicans as well as Democrats, President Donald Trump on Tuesday tweeted out defenses to his actions.
Published:7/17/2018 4:03:22 PM
Nasdaq closes at record high; Dow extends winning streak
Nasdaq closes at record high; Dow extends winning streak
Published:7/17/2018 3:45:46 PM
WTI Drops After Surprise Crude Build
Oil prices rebounded to unchanged intraday on hopes that tonight's API data would show a notable draw and recover the momentum in energy markets. However, WTI dropped as API reported a surprised crude build of 629k (exp was a 4.1mm draw).
“We’re expecting a fairly bullish report tonight, a significant decline in U.S. crude oil inventories again,” said John Kilduff, a partner at New York-based hedge fund Again Capital LLC. At the same time, we’re seeing “short-covering and profit-taking at the moment from the big sell-off.”
Following last week's massive crude draw (and distillates build), API reported a surprising 629k barrel build (massively missing the 4.1mm draw expected), and Gasoline and Distillates also saw builds...
WTI traded flat around $68 heading into the API print then tumbled on the surprise crude build...
“There is a potential to be in an oversupplied market where Saudi is going to pump as much as they can,” said Tariq Zahir, a commodity fund manager at Tyche Capital Advisors LLC. “It’s going to take a supply outage for prices to go significantly higher.”
Published:7/17/2018 3:45:46 PM
Bond Report: 2-year Treasury rate retakes 10-year high after Powell’s Senate testimony
Short-dated Treasury yields rise on Tuesday after Federal Reserve Chairman Jerome Powell, as expected, highlighted the need for a gradual pace of rate increases in testimony on Capitol Hill.
Published:7/17/2018 3:45:46 PM
U.S. stocks rally after earnings and Powell testimony; Nasdaq hits record
U.S. stocks rise Tuesday afternoon, extending a recent upswing after Federal Reserve Chairman Jerome Powell indicated the U.S. central bank wouldn’t move too quickly in changing monetary policy, and that it would be flexible in the face of changing conditions.
Published:7/17/2018 2:59:02 PM
Cryptocurrencies, Blockchain Added To CFA Exam
Everyone has been watching regulators closely over the last year for their take on such upstart financial products as digital currency, initial coin offerings and blockchain, and how these may end up affecting the future for the financial industry. Now, one major financial institution - the CFA Institute – thinks they are legitimate enough to be included on the prestigious CFA examination.
In the financial world, the CFA is one of the more respected abbreviations one can have next to their name, more so than MBA according to many. The CFA exam is a grueling three part examination that has a pass rate of only near 50%.
That said, if cryptocurrencies, blockchain and similar technology are being included on the exam, they are clearly becoming of significant prominence to the financial world.
Bloomberg has more:
The CFA Institute, whose grueling three-level program has helped train more than 150,000 financial professionals, is adding topics on cryptocurrencies and blockchain to its Level I and II curriculums for the first time next year. Material for the 2019 exams will be released in August, giving candidates their first opportunity to start logging a recommended 300 hours of study time.
CFA added the topics, part of a new reading called Fintech in Investment Management, after industry participants showed surging interest in surveys and focus groups. The worlds of finance and crypto have become increasingly intertwined after last year’s Bitcoin boom, with regulated futures now trading in Chicago, blue-chip firms like Goldman Sachs Group Inc. dabbling in digital assets, and scores of Wall Streeters joining crypto-related startups.
The managing director for general education at the CFA Institute told Bloomberg that he "...saw the field advancing more quickly than other fields and we also saw it as more durable.” He also noted, regarding crypto and blockchain that it “...is not a passing fad."
In addition to crypto, AI and machine learning would be added to the exam:
The CFA material on crypto and blockchain will appear alongside other fintech subjects including artificial intelligence, machine learning, big data and automated trading. More crypto topics, such as the intersection of virtual currencies and economics, may eventually be added to the curriculum, Horan said.
Analysts, including one from BNP Paribas quoted for the article, likely see this as good news for the space:
It’s positive that organizations like CFA are drawing attention to the space, said Darius Sit, a former foreign-exchange and bond trader at BNP Paribas SA who’s now managing partner of cryptocurrency trading firm QCP Capital Pte in Singapore. “More education is always good.”
Still, while it seems like blockchain technology will be unavoidably intertwined in numerous industries going forward, the price of Bitcoin has stumbled since the beginning of 2018 as the euphoric bubble of late 2017 remains elusive, alongside interest in the crypto space and trading volumes.
The one underlying question for crypto and blockchain over the last couple of years is how legitimate the technology will become to regulators in the overall market. Many investing in both crypto and blockchain technology admittedly are doing so in speculative fashion. And while many believe that blockchain technology will become a financial mainstay for years to come, the use and availability of digital currency still remains up in the air.
Adoption of digital currency took off early, as Bitcoin found itself skyrocketing to highs of nearly $20,000 per coin last year. Since then, some of the luster of being a new technology has worn off and the price has since fallen by more than 50%.
However, as a silver lining, today's news follows a report that asset management giant Blackrock is creating a team to explore cryptocurrencies which many see as the catalyst that push the price of cryptos higher on Monday morning.
So with Blackrock and the CFA Institute on board, will the institutional adoption of crypto finally be getting a much needed tailwind?
Published:7/17/2018 2:59:02 PM
Markets Hold Gains Into Final Hour Following Fed Chair's Capitol Hill Testimony
Here Are Three Hot Things to Know About Stocks Right Now The Dow Jones Industrial Average rose 0.19% on Tuesday. The blue-chip index has closed higher for 10 of the past 12 sessions. Netflix Inc. pared losses, falling 5.
Published:7/17/2018 2:35:30 PM
Obama "Surprised" At The $20 Million He Made In Washington
Former President Barack Obama told an audience in Johannesburg, South Africa that he's "surprised" by how much money he's made over the years.
"Right now, I'm actually surprised by how much money I got," the ex-commander in chief said while speaking at the 2018 Nelson Mandela Lecture.
"And let me tell you something — I don't have half as much as most of these folks, or a tenth, or a hundredth," Obama told the crowd, discussed the wealth gap. "There's only so much you can eat ... There's only so big a house you can have. There's only so many nice trips you can take."
We should probably note that money can certainly buy Obama a very big house, such as the 8,200-square-foot Tudor style mansion he bought in Washington's Kalorama neighborhood for $8.1 million.
According to Forbes, the Obamas made $20.5 million between 2005 and 2016 - most of it coming from two book deals for Dreams From My Father and Audacity Of Hope.
The Obamas, who had earned less than $300,000 every year from 2000 to 2004, made an average of $2.4 million annually over the next four years, even before Barack got elected president. -Forbes
Obama then decided it was his duty to comment on the record surge in income and wealth inequality, saying that "There has been an explosion in economic inequality. A few dozen individuals control the same amount of wealth as the poorest half of humanity. That's not an exaggeration, that's a statistic. Think about that."
Of course, this was ironic because as David Sirota reminded us, Obama "literally twice bailed out Wall Street, you rejected pay caps for execs at bailed out banks, you signed a reauthorization of the Bush tax cuts and you refused to use your unilateral executive authority close the carried interest tax loophole."
Obama also offered a wide-ranging rebuke of "a politics of fear and resentment and retrenchment," one day after President Trump made waves during his meeting with Russian President Vladimir Putin at a lecture in South Africa. Obama warned of "strongman politics are ascending suddenly, whereby elections, some pretense of democracy, are maintained."
Then, without actually naming Trump but clearly referring to him, Obama said we are in "strange and uncertain times" and that "each day's news cycle is bringing more head-spinning and disturbing headlines."
"We see the utter loss of shame in political leaders when they’re caught in a lie and they just double down and lie some more," Obama said, warning that undermining facts and reality could "be democracy's undoing."
(We would note that the Obama administration knew full well that the Benghazi attack wasn't sparked by a YouTube video immediately after it happened, then doubled down on that lie when they sent U.N. Ambassador Susan Rice on a press junket to sell the fabrication.)
Put off by what Obama called the “messiness of democracy,” developing nations are increasingly turning to the Chinese model of “authoritarian control combined with mercantilist capitalism.” -Politico
Obama then slammed autocratic leaders across the world.
“Democracy depends on strong institutions,” said the former President, who called on people to reject election results where “the winner somehow gets 90 percent of the vote because all of the opposition is locked up or can’t get on TV.”
At the end of Obama's address, he called on young people to take action.
"My message to you is simple," he said. "Keep believing, keep marching, keep building, keep raising your voice."
While Obama has largely remained out of the public eye since leaving the White House, last month we reported that he has been advising potential Democratic contenders for the 2020 US election, including Bernie Sanders, Joe Biden, Elizabeth Warren and Deval Patrick, at his personal office on the third floor of the World Wildlife Building in D.C.'s West End.
In quietly arranged one-on-one meetings confirmed by Politico, Obama is "eager to be a sounding board and counselor" to the Democrats he thinks has the best chance of shaping the future of the Democratic party.
Many of the conversations have circled around Obama holding forth about how much Democrats should be heading into the midterms talking about the investigations into Russian interference in the 2016 election versus focusing on kitchen table issues. Don’t chase the shiny objects, he tells them. Don’t hyperventilate over the flash of any tweet. Think about what’s going to stick in the long term. -Politico
In other words, drop the Russia thing and try to reconnect with your base. As we noted in March, several Democrats see the Trump-Russia investigation as a "running joke," and that Americans are worried about said "kitchen table issues" more than the spectre of Russian involvement in the 2016 US election.
Published:7/17/2018 2:35:30 PM
Trump says he accepts U.S. intelligence that Russia meddled in election
Trump says he accepts U.S. intelligence that Russia meddled in election
Published:7/17/2018 1:59:13 PM
Capitol Report: Is Trump treasonous? Here’s the legal and historical answer to that charge
President Donald Trump has been accused by political foes of “treasonous” behavior after his controversial meeting with Russian leader Vladimir Putin, but as a legal matter his critics are on very weak ground. Here’s why.
Published:7/17/2018 1:59:13 PM
Bitcoin prices sees biggest daily surge in three months, up more than 10%
MARKET PULSE Bitcoin prices surged more than 10% Tuesday, taking the No. 1 digital currency back above $7,000 for the first time in five weeks and on track to record its biggest daily gain since April 12.
Published:7/17/2018 1:59:13 PM
"Detente Bad, Cold War Good"
Authored by Craig Murray,
The entire “liberal” media and political establishment of the Western world reveals its militarist, authoritarian soul today with the screaming and hysterical attacks on the very prospect of detente with Russia. Peace apparently is a terrible thing; a renewed arms race, with quite literally trillions of dollars pumped into the military industrial complex and hundreds of thousands dying in proxy wars, is apparently the “liberal” stance.
Political memories are short, but just 15 years after Iraq was destroyed and the chain reaction sent most of the Arab world back to the dark ages, it is now “treason” to question the word of the Western intelligence agencies, which deliberately and knowingly produced a fabric of lies on Iraqi WMD to justify that destruction.
It would be more rational for it to be treason for leaders to blindly accept the word of the intelligence services.
This is especially true on “Russia hacking the election” when, after three years of crazed accusations and millions of man hours by lawyers and CIA and FBI investigators, they are yet to produce any substantive evidence of accusations which are plainly nuts in the first place. This ridiculous circus has found a few facebook ads and indicted one Russian for every 100,000 man hours worked, for unspecified or minor actions which had no possible bearing on the election result.
There are in fact genuine acts of election rigging to investigate. In particular, the multiple actions of the DNC and Democratic Party establishment to rig the Primary against Bernie Sanders do have some very real documentary evidence to substantiate them, and that evidence is even public. Yet those real acts of election rigging are ignored and instead the huge investigation is focused on catching those who revealed Hillary’s election rigging. This gets even more absurd – the investigation then quite deliberately does not focus on catching whoever leaked Hillary’s election rigging, but instead seeks to prove that the Russians hacked Hillary’s election-rigging, which I can assure you they did not. Meanwhile, those of us who might help them with the truth if they were actually interested, are not questioned at all.
The Russophobic witch hunt has its first real life victim in 29 year old Maria Butina, whose life is to be destroyed for chatting up members of the NRA in order to increase Russian influence. With over 20 years of diplomatic experience, I can tell you that every country, including the UK and US, has bit part players of its own nationals who self-start in a country to make their way, and if they gain any traction are tapped by their national security service as potential “agents of influence”. I could name quite literally scores of such people, but have no desire to get anyone in trouble.
The elevation of Butina into a huge threat and part of a gigantic plot, is to ignore the way the United States and the United Kingdom and indeed all major governments’ Embassies behave around the globe.
The war-hawks who were devastated by the loss of champion killer Hillary now see the prospect of their very worst fear coming true. Their very worst fear is the outbreak of peace and international treaties of arms control. Hence the media and political establishment today has reached peaks of hysteria never before seen. Pursuing peace is “treason” and the faux left now stand starkly exposed.
Published:7/17/2018 1:59:12 PM
Bitcoin Explodes Through Key Technical Resistance, Hits 7-Week High
Bitcoin has suddenly exploded over 10% higher, smashing through its 50-day moving average, above $7000 for the first time since early June...
BTC is now testing up towards its 100DMA, ramping over $600 in 30 minutes...
And breaking its longer-term downtrend too...
This is already the biggest volume day for Bitcoin since June.
The rest of the crypto space has gone along for the ride...
No immediate news catalyst jumps out though we note that gold was tumbling earlier, and tech stocks have been melting up all day - as well as the slow burn realization that if the world's largest asset manager puts even a fraction of a percent to work in crypto, things will get intense fast.
We note that the surge started around 1335ET, and it appears some major shorts liquidated at the same time...
Published:7/17/2018 1:32:36 PM
Capitol Report: An assumed ‘Treasury put’ may have doomed Puerto Rico bond investors
Investors in the bonds of troubled Puerto Rico may have wrongly assumed that the government would always come to rescue them, and then panicked when that didn’t happen in Detroit, according to a new paper.
Published:7/17/2018 1:32:36 PM
Cable Rebounds As May Survives Another Brexit Rebellion
Cable is back above 1.31 (up 100 pips off the lows) after UK PM Theresa May managed to fend off an attempt by pro-EU Conservative rebels to force her to stay in a customs union with the bloc after Brexit.
As Bloomberg reports, it was a narrow escape.
The government won the vote 307-301. Beforehand, the government had considered pulling the whole bill if they had been defeated on that amendment.
And while cable is rebounding, it does not look convinced...
As The BBC reports, the rebelling MPs wanted the UK to join a customs union if it does not agree a free-trade deal with the EU. But the government, which says being part of a customs union will prevent it from striking international trade deals, won the vote by 307 to 301.
It did, however, lose a separate vote on its Trade Bill on the regulation of medicines after Brexit. MPs backed an amendment that would keep the UK in the European medicines regulatory network.
This is still far from over.
Published:7/17/2018 1:01:44 PM
Intraday Update: The Dow, Up 65 Points, Is Going Nowhere Fast
•...explain why Charles Schwab (SCHW) is up nearly 4% and why Omnicom Group (OMC) is down more than 7% (hint:earnings). Stocks have gotten a small boost on an otherwise nowhere-going day on Chairman Powell's testimony. "Fed Chair Powell was as uneventful as can be. Usually, the markets hang on every word and look to the commentary for direction, but today was not that day–most likely, because investors have heard it all before or, as Chuck Butler, editor of A Pfennig For Your Thoughts, puts it: "The economy is robust, unemployment is down, yadda, yadda, yadda..." While Chairman Powell's "businesslike" tone was a departure from previous leadership, Michael Shaoul of Marketfield Asset Management noted that Powell's speech added little to policy.
Published:7/17/2018 1:01:44 PM
The Ratings Game: Still believers, Wall Street analysts stand behind Netflix despite shortfall
Stock tumble is a buying opportunity, analysts say
Published:7/17/2018 1:01:44 PM
Trouble Ahead For The Housing Market
Authored by Adam Taggart via PeakProsperity.com,
We're starting to see rising supply & flat/declining prices...
Our good friend John Rubino over at DollarCollapse.com just released an analysis titled US Housing Bubble Enters Stage 2: Suddenly Motivated Sellers.
He reminds us that housing bubbles follow a predictable progression:
Stage 1: Mania -- Prices rise at an accelerating rate as factors like excess central bank liquidity/low credit standards/hot foreign money drive a virtuous bidding cycle well above sustainably afforable levels.
Stage 2: Peak -- Increasingly jittery owners attempt to sell out before the party ends. Supply jumps as prices stagnate.
Stage 3: Bust -- As inventory builds, sellers start having to lower prices. This begins a vicious cycle : buyers go on strike not wanting to catch a falling knife, causing sellers to drop prices further.
Rubino cites recent statistics that may indicate the US national housing market is finally entering Stage 2 after a rip-roaring decade of recovery since the bursting of the 2007 housing bubble:
the supply of homes for sale during the "all important" spring market rose at 3x last year's rate
30 of America's 100 largest cities now have more inventory than they did a year ago, and
mortage applications for new homes dropped 9% YoY
Taken together, these suggest that residential housing supply is increasing as sales slow, exactly what you'd expect to see in the transition from Stage 1 to Stage 2.
If that's indeed what's happening, Rubino warns the following comes next:
Stage Two’s deluge of supply sets the table for US housing bubble Stage Three by soaking up the remaining demand and changing the tenor of the market. Deals get done at the asking price instead of way above, then at a little below, then a lot below. Instead of being snapped up the day they’re listed, houses begin to languish on the market for weeks, then months. Would-be sellers, who have already mentally cashed their monster peak-bubble-price checks, start to panic. They cut their asking prices preemptively, trying to get ahead of the decline, which causes “comps” to plunge, forcing subsequent sellers to cut even further.
Sales volumes contract, mortgage bankers and realtors get laid off. Then the last year’s (in retrospect) really crappy mortgages start defaulting, the mortgage-backed bonds that contain their paper plunge in price, et voila, we’re back in 2008.
Rubino's article is timely, as we've lately been seeing a proliferation of signs that the global boom in housing is suddenly cooling. I've also recently seen similar evidence that the housing market in my own pocket of northern California is weakening, and I'm curious to learn if other PeakProsperity.com are seeing the same in their hometowns.
The Global Housing Bubble
Housing, as they accurately say, is local. Conditions differ from region to region, making generalities of the overall market difficult.
That said, the tsunami of $trillions printed by the world's central banking cartel since 2008 clearly found its way into the housing market.
The world real estate market is HUGE, over $200 trillion. That dwarfs the global debt and equity markets. So it's no surprise the central authorities did all they could to reverse the losses the GFC created for homeowners.
As a result, many of the most popular locations to live are now clearly in bubble territory when it comes to home prices:
The chart above displays the most bubblicious major cities around the world in red. But it's important to note that the merely 'overvalued' markets denoted in yellow, and even some of the green 'fair-valued' ones, are still wildly-unaffordable for the average resident.
For example, in "yellow" San Francisco, where the median home now costs $1.6 million, prices are well-above the excesses seen during the previous housing bubble:
And in 'fair-valued' New York City, the median household must spend 65% of its annual income on housing alone.
Is it any wonder that 70% of millennials who don't yet own a home fear they'll never be able to afford one?
Signs Galore Of Topping Markets
At the end of a speculative bubble, it's the assets that are most overvalued that correct first and correct hardest.
So we would expect that as the highest-priced real estate markets fare from here, the general real estate market will follow.
When we take a closer look at what's currently going on with the red-hot real estate markets noted in the chart above, we indeed see evidence supportive of Rubino's claim that the decade-long Stage 1 mania may now be ending.
Here's a spate of recent headlines about these cities:
Sure looks like Rubino's predicted Stage 2 symptoms of rising supply and stagnating prices.
Local Signs, Too
As mentioned, I live in northern California, quite close to Santa Rosa.
Things here aren't as nuts as they are in San Franscico; but it's still a moderately-affluent region with lots of second homes. It's one of the semi-frothy areas I'd expect to see cooling off in first should there be a downwards turn in macroeconomic conditions.
Located less than an hour north of San Francisco, residential housing prices here have roughly increased 2x over the past six years as the Bay Area has boomed. Supply has been in chronic shortage, exacerbated by the loss of thousands of structures burned during last October's Tubbs fire.
But recently, for the first time in many years, realtors here are beginning to talk of a softening they're seeing in the local housing market.
Median sale prices dropped from May to June, which is counter to previous years. And several towns are seeing year-over-year declines in median price -- something unheard of over the past 7 years.
Meanwhile, the days-on-market ratio for properties is beginning to creep up.
Of the greatest concern to the realtors in my area, bidding wars are no longer happening. Houses are selling either at or below asking prices now. That's a *big* development in a market where houses have routinely sold for $50-100K+ above the listing price.
In a similar vein, I'm hearing evidence of the softening rents down in San Franscico and the East Bay (Oakland/Berkeley). Wolf Richter has done a good job chronicalling the substantial volume of newly-constructed units that have recently hit the market, and I've heard from a multi-family unit owner down there how landlords in the area are now finding their rents ~$500 too high for the market to bear.
This is all early and anecdotal data. It's too little at this point to claim definitively that my local housing market has entered Stage 2.
But I'm curious to hear from other PeakProsperity.com readers. What are you observing in your local markets? Are you seeing similar signs of concern?
Please share any insights you have in the Comments section below. Collectively, we may be able to add clarity, in one direction or another, to Rubino's hypothesis.
Prepping For Stage 2
Whatever the timing, Stage 2 is an inevitability for today's ridiculously-overpriced real estate markets. It's not a matter of if it (as well as Stage 3) arrives, but when.
Given the data above, I think Rubino is correct in his assessment. Or at least, correct enough that prudent action is warranted today.
This makes even greater sense when considered along with the current trends of rising interest rates and quantitative tightening. Remember, home prices and interest rates have a mathematically inverse relationship: as rates go up, home prices must go down (all else being equal). And as central banks start withdrawing in earnest the excess liquidity that inflated property values to their current nose-bleed heights, expect further downward pressure on prices.
To drive the urgency home even harder, we haven't even yet talked about the damage an economic recession and/or a painful correction in the financial markets would wreak on the real estate market. With the current expansion cycle the second-longest on record and our all-time-high markets looking increasingly vulnerable, it seems very unlikely we'll avoid at least one of those crises in the near to mid-future.
Here are worthwhile steps we recommend at this point:
Consider selling: If you're a homeowner and are not committed to remaining in your property for the next decade, do some scenario planning. If prices fell 20%, how much of a financial and emotional impact would that have on you? If you have substantial equity gains in your home, Stage 2 is the time to protect them. If you have little equity right now, make sure you're fully aware of the repercussions you'll face should you find yourself underwater on your properity. What will your options be should you lose your job in the next recession? Whether to hold or sell now and rent is a weighty decision, and the rationale differs for each household -- so we strongly recommend making it with the guidance of your professional financial advisor.
Raise cash: The vicious cycle that begins as Stage 2 transitions into Stage 3 is deflationary. Lower prices beget lower prices. During this period, cash is king. By sitting on it, your purchasing power increases the farther home prices drop. And when the dust settles, you'll be positioned to take advantage of the resulting values in the real estate market. We've written at length about the wisdom of this strategy given current market conditions, as well as how you can get 30x the return on your cash savings than your bank is willing to pay you, with lower risk. Our recent report on the topic is a must-read.
Educate yourself: Yes, real estate is overpriced in a number of markets. But it has been and will remain one of the best ways available to the non-elites to amass income and tangible wealth. And as mentioned, when the next Stage 3 brings prices down, there will be value to be had -- potentially extreme value. If you aren't already an experienced real estate investor, now is the time to educate yourself; so that you'll be positioned to take informed action when the time to buy arises. Our recent podcast interview on Real Estate Investing 101 is a good place to start.
In Part 2: The Case For Starting To Build A (Small) Short Position, we conduct a similar analysis into the overvaluation and growing vulnerability of the financial markets (which are highly likely to correct much faster, sooner and more violently than the housing market), including the details on a recent short position we've started building.
The tranquil "free ride" the financial and housing markets have had for nearly a decade are ending. The string of easy gains with little effort are over now that the central bank money spigots are turning off at the same time the "greater fools" pocketbooks are tapping out.
For a brief time, prices will waiver, as investors remain in denial and refuse to sell at lower prices. But soon that denial will turn to panic, and prices will plummet.
Make sure you're positioned prudently before then.
Click here to read Part 2 of this report (free executive summary, enrollment required for full access)
Published:7/17/2018 12:33:52 PM
Key Words: Barack Obama warns against ‘strongman politics’ without directly naming Trump
With Donald Trump’s press conference in Helsinki and the backlash from both sides of the aisle that followed still dominating the news flow on Tuesday, Barack Obama delivers a stirring speech to a crowd in South Africa to honor the late Nelson Mandela for the 100th anniversary of his birth.
Published:7/17/2018 12:33:52 PM
Ilargi Meijer : Treason? Get A Life!
Authored by Raul Ilargi Meijer via The Automatic Earth blog,
Yeah, just keep ’em coming, right, so that when the last one falls flat on its face people will have already forgotten about it and instead focus on the new one. It’s been the modus operandi of the US MSM ever since Donald Trump emerged as an actual presidential candidate, and they haven’t let go.
They realize by now that it divides the nation, it costs them a large chunk of their potential readers and viewers, and creates chaos all around, but the bottom line is it makes them money. Because those people who fall into the echo chamber trap, tumble into it fast and furious, and will gladly pay to read yet another installment of how bad the man really is.
But it is getting out of hand, guys and gals, it is becoming a real and present danger to the -formerly- United States. The anti-Russia propaganda machine far predates Trump, but manufacturing an ever closer link between the two has proven to be a masterstroke of media genius.
That Vladimir Putin is an existential threat to the US and indeed the entire western world is a narrative taken straight out of Edward Bernays’ playbook. And it works like a charm. The problem is, it is also the biggest threat to peace anywhere on the globe that we have ever seen since WWII.
Putin is a patriot who came to the fore in mostly unexplained ways, named by American puppet Boris Yeltsin as his successor, only to save his country from US-induced plundering and restore Russia as a functioning country. Far from perfect, but functioning. Don’t forget that Russian life-expectancy fell by many years in the post-Gorbachev era. And then look now.
Yes, Putin uses some hard-handed tactics from time to time. He has no choice: the US threat to Russia is an ongoing one. There’s still a huge economic threat, of which US sanctions are but a minor part, there’s an intelligence threat, there’s NATO encroaching upon Russia’s borders.
Thus far, Putin has been able to counter them all. And his popularity among Russia’s population is far higher than that of any western politician. His people understand and recognize what he’s done and why he’s done it. He refuses for his country to be overrun and sold off to the highest bidders.
Just a few of the points of contention:
Crimea – The US tried to take away Russia’s only warm water port. Putin countered with what through non-western eyes was tactical masterpiece; no violence, no shots fired, an election that saw an overwhelming majority of Crimeans voted to (re-)join Russia.
Connected to Crimea is Ukraine. Putin had -and has- to protect Russian-speaking people in the region. Who were going to be under threat from the very dubious, neo-nazi linked government installed by the US after the coup. All Putin has been able to achieve so far is a very brittle stand still. But ‘his’ people in Eastern Ukraine have strong links to the Russian area just across the border. He’s not going to sell them out.
Connected to Ukraine is MH17. The Netherlands commemorates the victims of the shooting down again today. Several years of investigating have come up with no conclusive proof, even if they say it has. The problem is that the investigation was -is- led by The Netherlands itself. You don’t let the biggest victim conduct an investigation. What’s worse: the Ukraine was actively involved in the investigation, even when it was a potential culprit. Try to write that scenario into the plot of one of your favorite TV crime series. Won’t fly.
Then the novichok ‘events’ in the UK. Again, no evidence, but tons of allegations. And if Russia says it’s not guilty, everyone says and writes: of course they would say that. They get accused anyway. Still, no evidence is no evidence. the time that intelligence agencies were believed on their word is over. And they did it to themselves.
In the regard, it’s useful to see that Robert Mueller was one of the people who ‘swore’ that the Weapons of Mass Destruction ‘evidence’ against Saddam Hussein was real. We now know it was complete and utter fiction. Intelligence has overplayed its hand, and they won’t get it back for a long time.
People now realize they cannot be trusted. Well, not those who read and view the MSM, but then that’s sort of the entire point, isn’t it? That’s where the dividing line is being drawn. The CIA, FBI et al present a view of the world in concoction with the media that they think a sufficient number of people will swallow, and that’s really all they care for.
And boy, it is successful. The vitriol spewed over the Helsinki summit is something to behold. #TreasonSummit was a trending hashtag. For a meeting that was long overdue and aimed at calming down tensions. The by now very poorly named ‘social’ media play an ever bigger role in these things.
People can say whatever they want on them, without feeling they’ll ever actually be tested on their claims. One after the other, and each one trying to outdo the last. It all leads up to one particular worldview at the exclusion of all others. And again, that is very dangerous.
Mueller’s indictment of 12 Russians, which just happened to coincide with the first meeting of American and Russian presidents in an exceptionally long time, has been shot full of holes by many commentators, see for instance Adam Carter and Aaron Mate, but those views won’t make it to CNN or the NYT.
But despite the fact that the indictment is hollow and riddled with holes, it’s been a large part of why people call Trump a traitor for meeting with Putin. It ties together their opinions, carefully built along Bernays principles over the past two years. It’s a Matrix, it’s a trap. But then they throw in another story, of a 29 year-old Russian(!) girl arrested for allegedly setting up links between Russia and the NRA when she was 24 or so, and that replaces the Mueller indictment in most attention spans. And so the carrousel goes on. The torture never stops.
See, the idea is that you get yourself informed and then form your own opinion. Not that you let others pre-cook and pre-chew your opinions for you. Still, once you’re inside the deafening echo chamber, that’s what inevitably happens. Because there’s so much one-sided innuendo in there, your head aches and you just give up all resistance. Just to have a quiet moment.
And so very many Americans end up believing that indeed their president is guilty of treason. Because so many pundits claim that he is. But how many of them understand what treason really is, how serious an allegation it is? Is doesn’t really matter anymore, does it? Because all those others say he is, and they can’t all be wrong. And the echo chamber gives you a headache.
This is where I should say that somebody better do something about this, but it’s hard to see what. The divide has grown into a chasm. And that both sides are equally to blame for that doesn’t excuse either side’s wilful blindness. But yes, I hear you, it makes them money.
Still, if a US president can no longer talk to another president without being accused of treason, you’re in a scary predicament.
At some point you’re going to need real proof. And Bob Mueller is not going to get it for you. That’s what his indictment of the 12 Russians, as well as the moment he released it, makes abundantly clear. Mueller is -forever- going to hide behind the ‘Trust me, I’m the FBI’ line. Well, he betrayed you before. Wisen up. Demand evidence.
We know Mueller betrayed America when he made false claims over WMD. We have no evidence that Trump betrayed his country, we have only allegations. He may be a poor choice for president, but that’s not the same thing.
Published:7/17/2018 12:02:47 PM
Stocks - Wall Street Falls as Netflix Weighs on Tech Stocks
The S&P 500 lost six points, or 0.23%, to 2,791.88 as of 9:45 AM ET (13:45 GMT), while the Dow decreased 60 points, or 0.24%, to 25,003.70 and the tech-heavy NASDAQ Composite was down 29 points or 0.38% to 7,775.77.
Published:7/17/2018 12:02:47 PM
Powell Testimony Lifts Markets, Major Indices Look to Hold Onto Slim Gains
Here Are Three Hot Things to Know About Stocks Right Now The Dow Jones Industrial Average rose about a tenth of a percentage point on Tuesday. The blue-chip index has closed higher for 10 of the past 12 sessions.
Published:7/17/2018 11:31:21 AM
Rod Rosenstein Summoned To White House
Deputy Attorney General Rod Rosenstein was summoned to the White House Tuesday morning, four days after he indicted 12 Russian Intelligence officers for hacking the 2016 US election. The indictment came one business day before President Trump held a summit with Russian President Vladimir Putin in Helsinki, Finland.
It is unclear if Rosenstein met with President Trump, who is reportedly still in the residence and had not made an appearance in the West Wing.
Rosenstein's White House appearance comes amid reports that members of the GOP House Freedom Caucus have drafted articles of impeachment for Rosenstein, calling it a "last resort," as frustrations mount over the DOJ "slow walking" or delaying the delivery of documents vital to congressional investigations into the FBI's conduct during the 2016 US election.
On Monday, Freedom Caucus leaders Mark Meadows and Jim Jordan also urged DOJ Inspector General Michael Horowitz to investigate whether Rosenstein threatened congressional staffers with "subpoena" earlier in the year.
“This notion Mr. Rosenstein threatened to use his official investigative powers as Deputy Attorney General to retaliate against rank-and-file staff members for sending written oversight requests raises concerns he has abused his authority in the context of this investigation,” the two Republican lawmakers wrote, in a letter obtained by Fox News.
The letter comes after Rosenstein apparently threatened to “subpoena” emails, phone records and other documents from lawmakers and staff on a Republican-led House committee during a meeting earlier this year, according to emails reviewed and first reported by Fox News.
The congressmen said in the letter that two witnesses can provide contemporaneous notes and sworn statements of the meeting where the alleged threats were made by Rosenstein. The deputy AG recently testified to the House Judiciary and Oversight committees and denied making any threats. -Fox News
Speculation also mounted last year that President Trump might fire Rosenstein, after FBI agents conducted raids at the home and office of his former personal attorney, Michael Cohen, according to The Hill.
Meanwhile, Rosenstein has called for a unified approach to countering foreign meddling.
"When we confront foreign interference in American elections, it is important for us to avoid thinking politically as Republicans or Democrats and instead to think patriotically as Americans," he said. "Our response must not depend on who was victimized."
Published:7/17/2018 11:31:21 AM
The Technical Indicator: S&P 500 ventures atop major resistance, slow-motion breakout attempt underway
Technically speaking, the backdrop for U.S. stocks has strengthened amid a grinding-higher July rally, writes Michael Ashbaugh.
Published:7/17/2018 11:31:21 AM
Son Of Greek Billionaire Found Dead In Cleveland Hotel Room Surrounded By Cocaine
The son of a Greek billionaire was found dead at the Cleveland Marriott Downtown on Saturday night surrounded by three bags of cocaine, authorities and a police report confirmed.
According to police reports, Socrates S. Kokkalis, 34, died in a suspected drug overdose. An official cause of death will be determined by the Cuyahoga County Medical Examiner, cleveland.com reports. The medical examiner told News 5 that Kokkalis' death was "untimely."
Police and an ambulance were called to his room about 2:45 p.m. Saturday for a report body found in the room, according to police report. Three baggies of cocaine were found inside the room, according to the police report. It appeared he died about 12 hours prior to being found, the police report says.
Kokkalis is the son of Socrates P. Kokkalis Sr., a Greek business tycoon, according to Bloomberg. The elder Kokkalis is the founder of Intracom, a Greek telecommunications giant and was accused in 2002 of being a spy for East Germany beginning in 1963. Intracom is the largest telecommunications company in southeastern Europe and has some 5,700 employees, according to the company's website.
Kokkalis Sr is also the chairman of the Greek soccer team Olympiacos, where his son served as vice president of the team and was the executive in charge of business development for Intracom, according to the soccer team's website. Kokkalis was also on the board of directors of Intralot Interactive, a Greek gambling technology company.
"His premature passing...left the entire Olympiacos family in mourning for the unexpected loss of our Club's Vice-president B,'" the statement said.
A statement provided to CNN Greece by the Kokkalis Foundation translates to: "The Kokkalis family, with deep sorrow, announces the sudden death of Socrates S. Kokkalis, 34, during a business trip to Cleveland, USA, Saturday July 14, 2018".
The Greek "Capital" newspaper reported that the younger Kokkalis was in Cleveland on a business trip related to a sports betting project. Police interviewed the last two people to see Kokkalis. A business partner told police he last saw Kokkalis after dinner the previous evening at about 10:15 p.m. while the business partner was getting off the elevator to go to his suite for the night. The other person interviewed said he last saw Kokkalis exiting the elevator the previous evening after dinner.
Cleveland police's specialized drug-overdose death unit, the Heroin Involved Dead Investigation team, responded to the hotel to help investigate.
Published:7/17/2018 11:00:46 AM
Stocks have turned higher in late-morning trading
Stocks have turned higher in late-morning trading
Published:7/17/2018 11:00:46 AM
Stocks Show Signs of Life During Fed Chair Powell's Testimony on Capitol Hill
Here Are 3 Hot Things to Know About Stocks Right Now The Dow Jones Industrial Average was flat on Tuesday. The blue-chip index has closed higher for 10 of the past 12 sessions. Netflix Inc. fell 9% after the streaming giant missed estimates on subscriber growth.
Published:7/17/2018 10:32:34 AM
Wall Street Profit Expectations Tumble As Economic Pessimism Surges
One week ago, we brought you the results of the latest Barclays Global Macro investor survey, which revealed something concerning: when asked about their expectations for global growth - Is the economy likely to perform similarly to consensus expectations, and if not, will it disappoint or delight - for the first time in at least four years, more than half of respondents responded that a disappointment lies ahead.
Today, in the latest monthly survey from Bank of America covering the period July 6-12 and polling a total of 231 panellists with $663bn AUM, we find that sentiment and outlook have both continued to slip, and while the usual suspects remain: fears about trade war and concerns that FAANG is the most crowded trade, what is notable is that even as Wall Street expects another blockbuster earnings season, profit expectations have crashed to the lowest level since February 2016.
"Investor sentiment is bearish this month, with survey respondents eyeing the risks from a possible trade war,” said Michael Hartnett, chief investment strategist. “Equity allocation has fallen notably while growth and profit expectations have slumped."
Here is the punchline the immediately sticks out from the report: a net -9% of respondents think global profits will not improve in the next 12 months, down 53ppt from Jan'18 and the lowest since Feb'16. This means that a majority of investors now believe that profits have topped out and will slide in the coming year.
Looking at the data, BofA suggests that this signals potential underperformance ahead for cyclical vs. defensive sectors.
Meanwhile, just like the Barclays survey, a net -11% of respondents now expect faster global growth in the next 12 months, down 12ppt from last month and the lowest level since February 11, 2016 when the S&P hit an intraday low of 1810.
Adding to the bearish sentiment, in addition to plunging growth & profit expectations, equity allocations are now the lowest since Nov'16, falling 14% to net 19% overweight, the lowest since Nov'16....
... while the forecast of yield curve steepening is at an 8-year low, suggesting the virtually everyone expects continued curve flattening...
... paradoxically, even as the latest CFTC report showed that net specs have record steepener bets on currently, making one wonder once again if surveys are merely there for investors to say what they think they should say instead of what they actually are doing.
Looking at some of the other favorite questions, in July "trade war" remains by biggest tail risk cited by the vast majority of respondents (60%), with investor conviction the highest since concerns surrounding EU sovereign debt funding in July 2012; the top three are rounded out by a Fed/ECB hawkish policy mistake (19%) and a Euro/EM debt crisis (6%)
The number of investors who are now worried about trade war doubled over the past month.
Continuing a trend started in February, long "FAANG+BAT" remains the most crowded trade since "long US dollar" in 2015 as investors aggressively rotated to "growth" theme via tech & pharma, and largest US equity "long" since Feb '17.
- Looking at these responses, CIO Michael Hartnett shares the following key takeaways:
- Trade war biggest tail risk since EU debt crisis in 2012; long FAANG+BAT most crowded trade since long US$ in 2015
- Contrarian bulls - position for overblown trade war fears via yield curve steepening, EM & EU stock upside, weaker US dollar
- Contrarian bears - position for "peak profit, peak policy stimulus" theme via long gold, short US tech/FAANG
And provides the following recommendations:
- We tactically advise contrarian bulls to position for overblown trade war concerns via yield curve steepening, EM & EU stock upside, weaker US dollar (note extreme EU debt "tail risk" of Jun'12 followed by 45% rally in EU banks in 3 months).
- We cyclically advise contrarian bears to position for "peak profit, peak policy stimulus" theme via long gold, short US tech (note extreme "long US$" trade of Dec'15 followed by 8% plunge in DXY in 6 months).
Published:7/17/2018 10:32:34 AM
Over 5 million U.S. consumers will cut the cord in 2018, survey says
Comcast, AT&T and DirecTV will be hard-hit, says consulting firm cg42
Published:7/17/2018 10:32:34 AM
Johnson & Johnson shares rose 3.7% on Q2 earnings, revenue beats
MARKET PULSE Johnson & Johnson (JNJ) shares rose 3.7% in Tuesday morning trade after the company reported second-quarter earnings and revenue beats. Earnings for the latest quarter rose to $3.95 billion, or $1.
Published:7/17/2018 9:59:17 AM
US Market Open Sparks Panic-Bid For Stocks, Bonds Shrug
After the Dow's lowest range day since Christmas 2017, it seems Johnny 5 and his algo friends woke up with a jolt today...
Nasdaq has nearly erased the entire impact of Netflix's collapse!
And on the week...
But bonds continue to be thoroughly unimpressed...
Published:7/17/2018 9:59:17 AM
Pat Buchanan: "Trump Calls Off Cold War II"
Authored by Patrick Buchanan via Buchanan.org,
Beginning his joint press conference with Vladimir Putin, President Trump declared that U.S. relations with Russia have “never been worse.”
He then added pointedly, that just changed “about four hours ago.”
It certainly did. With his remarks in Helsinki and at the NATO summit in Brussels, Trump has signaled a historic shift in U.S. foreign policy that may determine the future of this nation and the fate of his presidency.
He has rejected the fundamental premises of American foreign policy since the end of the Cold War and blamed our wretched relations with Russia, not on Vladimir Putin, but squarely on the U.S. establishment.
In a tweet prior to the meeting, Trump indicted the elites of both parties: “Our relationship with Russia has NEVER been worse thanks to many years of U.S. foolishness and stupidity and now, the Rigged Witch Hunt!”
Trump thereby repudiated the records and agendas of the neocons and their liberal interventionist allies, as well as the archipelago of War Party think tanks beavering away inside the Beltway.
Looking back over the week, from Brussels to Britain to Helsinki, Trump’s message has been clear, consistent and startling.
NATO is obsolete. European allies have freeloaded off U.S. defense while rolling up huge trade surpluses at our expense. Those days are over. Europeans are going to stop stealing our markets and start paying for their own defense.
And there will be no Cold War II.
We are not going to let Putin’s annexation of Crimea or aid to pro-Russian rebels in Ukraine prevent us from working on a rapprochement and a partnership with him, Trump is saying. We are going to negotiate arms treaties and talk out our differences as Ronald Reagan did with Mikhail Gorbachev.
Helsinki showed that Trump meant what he said when he declared repeatedly, “Peace with Russia is a good thing, not a bad thing.”
On Syria, Trump indicated that he and Putin are working with Bibi Netanyahu, who wants all Iranian forces and Iran-backed militias kept far from the Golan Heights. As for U.S. troops in Syria, says Trump, they will be coming out after ISIS is crushed, and we are 98 percent there.
That is another underlying message here: America is coming home from foreign wars and will be shedding foreign commitments.
Both before and after the Trump-Putin meeting, the cable news coverage was as hostile and hateful toward the president as any this writer has ever seen. The media may not be the “enemy of the people” Trump says they are, but many are implacable enemies of this president.
Some wanted Trump to emulate Nikita Khrushchev, who blew up the Paris summit in May 1960 over a failed U.S. intelligence operation — the U-2 spy plane shot down over the Urals just weeks earlier.
Khrushchev had demanded that Ike apologize. Ike refused, and Khrushchev exploded. Some media seemed to be hoping for just such a confrontation.
When Trump spoke of the “foolishness and stupidity” of the U.S. foreign policy establishment that contributed to this era of animosity in U.S.-Russia relations, what might he have had in mind?
Was it the U.S. provocatively moving NATO into Russia’s front yard after the collapse of the USSR?
Was it the U.S. invasion of Iraq to strip Saddam Hussein of weapons of mass destruction he did not have that plunged us into endless wars of the Middle East?
Was it U.S. support of Syrian rebels determined to oust Bashar Assad, leading to ISIS intervention and a seven-year civil war with half a million dead, a war which Putin eventually entered to save his Syrian ally?
Was it George W. Bush’s abrogation of Richard Nixon’s ABM treaty and drive for a missile defense that caused Putin to break out of the Reagan INF treaty and start deploying cruise missiles to counter it?
Was it U.S. complicity in the Kiev coup that ousted the elected pro-Russian regime that caused Putin to seize Crimea to hold onto Russia’s Black Sea naval base at Sevastopol?
Many Putin actions we condemn were reactions to what we did.
Russia annexed Crimea bloodlessly. But did not the U.S. bomb Serbia for 78 days to force Belgrade to surrender her cradle province of Kosovo?
How was that more moral than what Putin did in Crimea?
If Russian military intelligence hacked into the emails of the DNC, exposing how they stuck it to Bernie Sanders, Trump says he did not collude in it. Is there, after two years, any proof that he did?
Trump insists Russian meddling had no effect on the outcome in 2016 and he is not going to allow media obsession with Russiagate to interfere with establishing better relations.
Former CIA Director John Brennan rages that, “Donald Trump’s press conference performance in Helsinki … was … treasonous. … He is wholly in the pocket of Putin. Republican Patriots: Where are you???”
Well, as Patrick Henry said long ago, “If this be treason, make the most of it!”
Published:7/17/2018 9:27:39 AM
Wall Street pares losses after Powell's testimony
Powell discounted the risk that a trade war may throw a global recovery off track and signaled that he not only believes the economy is doing well, but that an era of stable growth may continue provided the Fed gets its policy decisions right. U.S. stock were already lower ahead of Powell's written testimony to the Senate Banking Committee, as Netflix's slump due to weak subscriber growth weighed on its own and other high-growth stocks.
Published:7/17/2018 9:27:39 AM
The Wall Street Journal: Publishing execs believe Facebook is overly deferential to conservative content
At a private meeting late last week, some publishing executives criticized Facebook Inc. for being overly accommodating to conservative outlets, days before social-media executives are to appear on Capitol Hill to discuss how content is displayed on their sites.
Published:7/17/2018 9:27:39 AM
Stocks slip at Tuesday open as markets await Fed chairman's testimony
Stocks slip at Tuesday open as markets await Fed chairman's testimony
Published:7/17/2018 9:00:43 AM
Stocks Fall Ahead of Fed Chair's First Congressional Testimony
Here Are 3 Hot Things to Know About Stocks Right Now The Dow Jones Industrial Average was down 0.13% on Tuesday. The blue-chip index has closed higher for 10 of the past 12 sessions. Netflix Inc. fell 13.
Published:7/17/2018 9:00:43 AM
Watch Live: Fed Chair Powell Testifies On Market, Economy, Policy
All eyes will briefly fall on Fed Chairman Jerome Powell Tuesday morning when he appears before the Senate Banking Committee to deliver his comments on the Fed's latest monetary policy report, which was released last week and confirmed that while "valuation pressures" remain high, the Fed believes inflation to be "on track" and will likely continue raising interest rates.
The hearing begins at 10 am. Watch it live below:
Most analysts expect the hearing to be a snooze fest.
KBW's Brian Gardner said he expects questions will focus on banking regulations and trade policy, and that monetary policy will take a back seat.
"We expect much of the questioning from lawmakers will be about banking regulation and trade policy with only limited questions on monetary policy. As for his prepared remarks and comments on the economy and monetary policy, we expect that Powell will stick to his remarks from his June press conference."
UniCredit Global Chief Economist Erik Nielsen told CNBC that Powell likely won't deliver "a clear message on the economy" during his jaunt on Capitol Hill so that he can avoid making the same mistake he did during his first appearance as Fed chairman, when he accidentally sent markets reeling with an ill-advised comment about his dot, which prompted the market to interpret his approach to monetary policy as hawkish.
"Powell doesn't speak in clear economic terms, for good reasons probably."
But legislators could speak up about the long-term direction of policy as the market (the green line below) is now pricing in a rate cut in 2020.
Here are a few highlights from the monetary policy report:
- Fed says outlook for higher inflation appears to be on track
- Fed sees labor market strong, hourly pay gains moderate
- Fed: fiscal policy likely to give gdp moderate boost this year
- Fed: prime-age labor force participation may continue to rise
- Fed: drag on gdp from higher oil prices likely to be smaller
- Fed says valuations still elevated for range of assets
- Fed: vulnerabilities from leverage in financial sector look low
- Fed: commercial property valuations continue to be stretched
And the full report:
Powell's prepared remarks are expected to be released at 10 am. We will add them below when they become available.
Published:7/17/2018 9:00:43 AM
Powell testifies before Congress — live video and blog
Federal Reserve Chairman Jerome Powell on Tuesday will testify before the Senate Banking Committee on the central bank’s monetary policy report to Congress. Watch the hearing as MarketWatch live-blogs the action.
Published:7/17/2018 8:30:11 AM
US Industrial Production Rebounds From Biggest Drop In Over 2 Years
Following May's surprising contraction (which was revised dramatically lower to -0.5%), June saw US Industrial Production surge 0.6% MoM.
May's MoM shift in IP was revised from 0.1% drop to 0.5% drop (the biggest drop since March 2016) but June still managed to beat expectations (+0.5%)...
Automobile production jumped 7.8 percent in June from a month earlier when it plunged 8.6 percent after a major fire at a parts supplier. Excluding motor vehicles, manufacturing production advanced 0.3 percent after a 0.4 percent drop in May.
One surprise was a decline in utility output even as temperatures climbed across the U.S. Last month was the third- warmest June on record, according to the National Oceanic and Atmospheric Administration’s website.
And finally, for good measure, there is this...
It's still different this time.
Published:7/17/2018 8:30:10 AM
Cellectar Biosciences shares surge 65% on results of one cancer patient in mid-stage trial
Cellectar Biosciences Inc. (CLRBZ) shares rose 65% in Tuesday premarket trade after the company announced that one patient in a phase 2 trial for its cancer therapy had a major improvement in the amount of tumor material in her body, or an about 94% reduction. The trial, which is studying the therapy in patients with certain B-cell malignancies, intends to enroll about 80 participants total, according to Clinicaltrials.gov, and has an expected completion date of March 2019. The patient, who has a rare type of cancer called Waldenstrom macroglobulinemia, was administered two doses of the therapy, CLR 131, after which she showed the large reduction in tumor burden and complete resolution of four of five targeted tumor masses, the company said.
Published:7/17/2018 7:59:37 AM
Caterpillar's stock flashes 'death cross,' snapping longest bull run in decades
Caterpillar's stock flashes 'death cross,' snapping longest bull run in decades
Published:7/17/2018 7:59:37 AM
"This Is Utterly Ridiculous": Highlights From Fox News' Putin Interview
After sitting down with President Trump earlier in the day, President Putin joined Fox News' Chris Wallace for a combative interview where he insisted that the idea that Russia could have influenced the votes of millions of Americans during the 2016 election was "utterly ridiculous" while insisting that Russia doesn't have compromising materials on President Trump. The interview aired on "Special Report" on Monday as the bipartisan backlash to Trump's meeting with Putin was beginning to grow, and President Putin started off with some advice for the world (and perhaps even more so, the sheep in America):
"As for who to believe and who you can't believe... can you believe at all - you can't believe anyone."
At one point during the interview, Wallace tried to hand Putin a copy of the DOJ indictment of 12 Russian military intelligence officers, but instead of taking it, Putin asked that he place it on a side table. Pushing back against claims that the Russians have compromising information on Trump, Putin said "I don't want to insult President Trump when I say this - and I may come as rude - but before he announced that he will run for presidency, he was of no interest for us." He then went on to claim that it would be impossible for Russia to have influenced the 2016 election.
"Interference with the domestic affairs of the United States - do you really believe that someone acting from the Russian territory could have influenced the United States and influenced the choice of millions of Americans?" Putin said. "This is utterly ridiculous."
Russia doesn't even have the resources to track Trump even if it wanted to, Putin said. For example, the annual St. Petersburg Economic Forum usually attracts 500 business leaders and most of them are industrial tycoons on a "greater scale" than Trump, yet do the Americans think Russia organized surveillance on all of them?
"Do you think that our Special Services actually organized surveillance on each and every of them?" Putin said. "Well, unlike you, unlike the United States, we don't do this. We don't have enough resources. We don't have enough manpower to organize the total state of control. That's not part of our plans. And it's clear that we did nothing of that kind of against Mr. Trump."
Asked how Russia might respond if either Georgia or Ukraine were to join NATO, Putin scoffed, saying his reaction would be "negative."
"For us, well, it's a direct and immediate threat for our national security…moving this NATO infrastructure towards our borders would be a threat, and…the reaction would be extremely negative," Putin said.
Moving on to Syria, Wallace asked about reports made by independent monitors claiming that Russia has bombed civilians in Aleppo and Ghouta, to which Putin replied that "victims are inevitable."
"You know, when there [is] warfare going on - and this is the worst thing that can happen [for] humankind - [victims] are inevitable, and there will always be a question of who’s to blame. I think it is the terrorist groups who are to blame who destabilized the situation in the country."
But when Wallace asked if Putin had qualms about killing innocent men, women and children, the Russian president chided him, accusing him of being "completely deceived."
"You are completely deceived, and I am very sorry that you do not know the real situation…about Syria."
Toward the end of the interview, Wallace pointed out that many of Putin's political opponents have ended up dead or close to it. Putin pointed out that political killings happen in the US as well.
"Well, first of all, all of us have plenty of political rivals. I'm pretty sure President Trump has plenty of political rivals."
Wallace replied: "But they don't end up dead."
To which Putin pointed out that political killings happen in the US too with some regulat
"Haven't presidents been killed in the United States?" Putin replied. "Have you forgotten about - well, has [President John F.] Kennedy been killed in Russia or in the United States? Or [Dr. Martin Luther] King? What - and what happens to the clashes between police and, well, civil society, and some - several ethnic groups? Well, that's something that happens on the US soil. All of us have our own set of domestic problems."
Watch the full interview below:
Published:7/17/2018 7:59:37 AM
Europe Markets: European stocks swing to the red as telecoms fall, Fed’s Powell comes into focus
European stocks swung lower Tuesday, facing a second straight loss as telecom shares came under pressure while investors appeared to step back from risk ahead of testimony about monetary policy from U.S. Federal Reserve Chairman Jerome Powell.
Published:7/17/2018 7:59:36 AM
Goldman confirms COO David Solomon to replace Blankfein as CEO, chairman
Goldman confirms COO David Solomon to replace Blankfein as CEO, chairman
Published:7/17/2018 7:27:53 AM
Goldman CEO Lloyd Blankfein to retire, to be succeeded by Co-COO David Solomon
Goldman Sachs Group Inc. (gs) said Lloyd Blankfein will down as chief executive on Sept. 30 after about 12 years in the role, and retire as chairman and from the firm at the end of the year. The bank named David Solomon to succeed Blankfein in both roles. Blankfein will be given the title of senior chairman after his retirement, and Solomon will join the board on Oct. 1.
Published:7/17/2018 7:27:53 AM
Ireland To Move All Its Oil Reserves Out Of The UK As Brexit Nears
Authored by Tsvetana Paraskova via Oilprice.com,
The Irish government is expected to agree this week on a plan to move all of the Republic’s oil reserves out of the UK as Ireland steps up its preparations for Brexit, Ireland’s Sunday Independent reported.
Under the plan, seen as one of the most significant Brexit decisions for Ireland so far, Ireland will transfer the nearly 200,000 tons of oil out of British refineries and back into Ireland or other EU member states, as the UK is preparing to leave the European Union bloc.
According to Sunday Independent, the oil would be moved out of the UK “for national security reasons.”
“We pay for storage there so that will have serious implications for UK refineries who have stored our oil for almost two decades,” a senior Irish government source told Sunday Independent.
Ireland has 1.5 million tons of oil reserves. Some 500,000 tons of those reserves are stored in other countries, including the UK, the Netherlands, Denmark, and Spain. The remaining 1 million tons are held at ports along Ireland’s coasts.
Under the EU’s Oil Stocks Directive, EU countries must keep emergency stocks of crude oil and/or petroleum products equal to at least 90 days of net imports or 61 days of consumption, whichever is higher.
According to reports, one of Ireland’s options for moving the oil reserves out of the UK could be physically moving the oil via tankers. An alternative is also being considered - to make trade deals in which the ownership of UK oil in other EU member state is transferred to Ireland, without the need to physically move the oil.
While it is studying where to keep its oil reserves after Brexit, Ireland could become the first country in the world to quit fossil fuel investments completely, after the Fossil Fuel Divestment bill was passed by the country’s lower house, the Dáil Éireann, last week.
Published:7/17/2018 7:27:53 AM
Can the mortgage market predict the presidency?
A new academic paper shows that voters notice when their access to mortgage credit is tightened, and vote their disapproval.
Published:7/17/2018 7:27:53 AM
Need to Know: We’re in a ‘buying stampede,’ so get ready for new highs, says veteran strategist
It may not feel like it, but Jeffrey Saut, chief investment strategist at Raymond James, says we could be in the midst of a “buying stampede” that will take us to higher highs.
Published:7/17/2018 6:57:50 AM
Cable Slides As UK's May Faces Defeat In Key Brexit Vote
Cable is sliding and GBPEUR is at one-week lows following reports that UK's opposition Labour Party will back a Tory rebel amendment to Theresa May’s trade bill, a key piece of Brexit legislation - leaving her at risk of defeat following last night's razor thin majority.
As a reminder, last night saw Brexiteers narrowly defeat Tory rebels by just three votes on two amendments, and now the Labour Party has reportedly chosen to back a new amendment to the current Trade Bill, put forward by Tory MPs Stephen Hammond and Nicky Morgan that would force the Government to stay in the customs union if Brussels cannot be persuaded to allow Britain a free trade area by January 2019.
If all opposition lawmakers back the change it would only need seven Tories to rebel for May to be defeated.
The result is weakness in Sterling vs the dollar and Euro.
The rebellions are “a prelude to the big -- and real -- battle coming in the winter when the PM comes back with her deal and we know what the choice is. And whether she can continue,” Tory lawmaker George Freeman, who used to head May’s policy board, said in a posting on Instagram. “Brexit is coming home to roost. And it won’t be easy or pleasant.”
Voting on the Trade Bill begins mid-afternoon and the customs union vote will take place this evening about 6pm (1pm ET).
Published:7/17/2018 6:57:50 AM
Need to Know: Full-throttle economy can keep bull market running, says Saut
Need to Know: Full-throttle economy can keep bull market running, says Saut
Published:7/17/2018 6:57:50 AM
Goldman's stock falls as earnings beat, but revenue misses expectations
MARKET PULSE Shares of Goldman Sachs Group Inc. (gs) fell 1% in premarket trade Tuesday, after the investment bank reported second-quarter earnings that rose above expectations, but revenue that missed.
Published:7/17/2018 6:57:50 AM
Johnson & Johnson reports Q2 earnings, revenue beats
MARKET PULSE Johnson & Johnson (JNJ) reported second-quarter earnings and revenue beats early Tuesday. Shares declined 0.4% in premarket trade. Earnings for the latest quarter rose to $3.95 billion, or $1.
Published:7/17/2018 6:26:22 AM
Mish: "Mass Hysteria"
Submitted by Mike Mish Shedlock
My article Congratulations to President Trump for an Excellent Summit with Putin spawned numerous some I could not tell if they were sarcastic or not.
For example, reader Brian stated " There is zero doubt now that Putin stole the election from Hillary. So much so that she MUST be given the nomination again in 2020. All potential challengers must step aside. To refuse her the 2020 nomination would be evidence of traitorous activities with Putin."'
I congratulated Brian for brilliant sarcasm but he piled on. It now seems he was serious.
Mainstream media, the Left an the Right were in general condemnation.
Numerous cries of treason emerged from the Left and the Right (see the above link)
It Happened - No Trial Necessary
A friend I highly respect commented "There is simply no question that they did it. You can legitimately claim that it’s not important or that there has been no tie to Trump shown. On the Russians’ side, they can say, screw off, we were pursuing our interests. But you can’t take the view it did not happen. It happened."
There is a question who did it. Indictments are just that, not proof.
The US fabricated evidence to start the Vietnam war and the US fabricated WMD talk on the second war in Iraq. US intelligence had no idea the Berlin Wall was about to fall. The US meddled in Russia supporting a drunk named Yeltsin because we erroneously thought we could control him.
They Are All Liars
It's a mystery why anyone would believe these proven liars. That does not mean I believe Putin either. They are all capable liars.
Let's step back from the absurd points of view to reality.
The US tries to influence elections in other countries and has a history of assisting the forcible overthrow of governments we don’t like.
- Drone policy
All of the above are massive disasters of US meddling. They are all actions of war, non-declared, and illegal.
I cannot and do not condone such actions even if they were legal.
911 and ISIS resulted from US meddling. The migration crisis in the EU is a direct consequence of US meddling. The Iranian revolution was a direct consequence of US meddling.
Now we are pissing and moaning that Russia spent a few million dollars on Tweets to steal the election. Please be serious.
Let's assume for one second the DNC hack was Russia-based.
Is there a reason to not be thankful for evidence that Hillary conspired to deny Bernie Sanders the nomination?
We are supposed to pity Hillary?
The outrage from the Right is amazing.
It's pretty obvious Senator John McCain wanted her to win. Neither faced a war or military intervention they disapproved of.
Let's move on to a common sense position from Glenn Greenwald at the Intercept.
- Debate: Is Trump-Putin Summit a “Danger to America” or Crucial Diplomacy Between Nuclear Powers?
- Greenwald vs. Cirincione: Should Trump Have Canceled Summit After U.S. Indictment of Russian Agents?
Greenwald vs. Joe Cirincione
?GLENN GREENWALD: In 2007, during the Democratic presidential debate, Barack Obama was asked whether he would meet with the leaders of North Korea, Cuba, Venezuela, Syria and Iran without preconditions. He said he would. Hillary Clinton said she wouldn’t, because it would be used as a propaganda tool for repressive dictators. And liberals celebrated Obama. It was one of his greatest moments and one of the things that I think helped him to win the Democratic nomination, based on the theory that it’s always better to meet with leaders, even if they’re repressive, than to isolate them or to ignore them. In 1987, when President Reagan decided that he wanted to meet with Soviet leaders, the far right took out ads against him that sounded very much just like what we just heard from Joe, accusing him of being a useful idiot to Soviet and Kremlin propaganda, of legitimizing Russian aggression and domestic repression at home.
GLENN GREENWALD: It is true that Putin is an authoritarian and is domestically repressive. That’s true of many of the closest allies of the United States, as well, who are even far more repressive, including ones that fund most of the think tanks in D.C., such as the United Arab Emirates or Saudi Arabia. And I think the most important issue is the one that we just heard, which is that 90 percent of the world’s nuclear weapons are in the hands of two countries—the United States and Russia—and having them speak and get along is much better than having them isolate one another and increase the risk of not just intentional conflict, but misperception and miscommunication, as well.
?JOE CIRINCIONE: Right. Let’s be clear. Glenn, there’s nothing wrong with meeting. I agree with you. Leaders should meet, and we should be negotiating with our foes, with those people we disagree with. We’re better off when we do that. And the kind of attacks you saw on Barack Obama were absolutely uncalled for, and you’re right to condemn those.
?JOE CIRINCIONE: What I’m worried about is this president meeting with this leader of Russia and what they’re going to do. That’s what’s so wrong about this summit coming now, when you have Donald Trump, who just attacked the NATO alliance, who calls our European allies foes, who turns a blind eye to what his director of national intelligence called the warning lights that are blinking red. About what? About Russian interference in our elections. So you just had a leader of Russia, Putin, a skilled tactician, a skilled strategist, interfere in a U.S. election. To what? To help elect Donald Trump.
GLENN GREENWALD: I think this kind of rhetoric is so unbelievably unhinged, the idea that the phishing links sent to John Podesta and the Democratic National Committee are the greatest threat to American democracy in decades. People are now talking about it as though it’s on par with 9/11 or Pearl Harbor, that the lights are blinking red, in terms of the threat level. This is lunacy, this kind of talk. I spent years reading through the most top-secret documents of the NSA, and I can tell you that not only do they send phishing links to Russian agencies of every type continuously on a daily basis, but do far more aggressive interference in the cybersecurity of every single country than Russia is accused of having done during the 2016 election. To characterize this as some kind of grave existential threat to American democracy is exactly the kind of rhetoric that we heard throughout the Bush-Cheney administration about what al-Qaeda was like.
JOE CIRINCIONE: Why does Donald Trump feel that he has to meet alone with Putin? What is going on there? I mean, that—when Ronald Reagan met with Gorbachev at Reykjavik, at least he had George Shultz with him. The two of them, you know, were meeting with Gorbachev and his foreign minister at the time. This is—it’s deeply disturbing. It makes you feel that Trump is hiding something, that he is either trying to make a deal with Putin, reporting something to Putin. I tell you, I know U.S. intelligence officials—I’m probably going right into Glenn’s wheelhouse here. But U.S. intelligence officials are concerned about what Donald Trump might be revealing to the Russian leader, the way he revealed classified information to the Russian foreign minister when he met privately with him in the Oval Office at the beginning of his term. No, I don’t like it one bit.
GLENN GREENWALD: I continue to be incredibly frustrated by the claim that we hear over and over, and that we just heard from Joe, that Donald Trump does everything that Vladimir Putin wants, and that if he were a paid agent of the Russian government, there’d be—he would be doing nothing different. I just went through the entire list of actions that Donald Trump has taken and statements that he has made that are legitimately adverse to the interest of the Russian government, that Barack Obama specifically refused to do, despite bipartisan demands that he do them, exactly because he didn’t want to provoke more tensions between the United States and Russia. Sending lethal arms to Ukraine, bordering Russia, is a really serious adverse action against the interest of the Russian government. Bombing the Assad regime is, as well. Denouncing one of the most critical projects that the Russian government has, which is the pipeline to sell huge amounts of gas and oil to Germany, is, as well. So is expelling Russian diplomats and imposing serious sanctions on oligarchs that are close to the Putin regime. You can go down the list, over and over and over, in the 18 months that he’s been in office, and see all the things that Donald Trump has done that is adverse, in serious ways, to the interests of Vladimir Putin, including ones that President Obama refused to do. So, this film, this movie fairytale, that I know is really exciting—it’s like international intrigue and blackmail, like the Russians have something over Trump; it’s like a Manchurian candidate; it’s from like the 1970s thrillers that we all watched—is inane—you know, with all due respect to Joe. I mean, it’s—but it’s in the climate, because it’s so contrary to what it is that we’re seeing. Now, this idea of meeting alone with Vladimir Putin, the only way that you would find that concerning is if you believed all that.
JOE CIRINCIONE: So, Trump knew that this indictment was coming down, before he went to Europe, and still he never says a word about it. What he does is continue his attacks on our alliances, i.e. he continues his attacks on our free press, he continues his attacks on FBI agents who were just doing their job, and supports this 10-hour show hearing that the House of Representatives had. It’s really unbelievable that Trump is doing these things and never says one word about it. He still has not said a word about those indictments.
GLENN GREENWALD: That’s because the reality is—and I don’t know if Donald Trump knows this or doesn’t know this, has stumbled into the truth or what—but the reality is that what the Russians did in 2016 is absolutely not aberrational or unusual in any way. The United—I’m sorry to say this, but it’s absolutely true. The United States and Russia have been interfering in one another’s domestic politics for since at least the end of World War II, to say nothing of what they do in far more extreme ways to the internal politics of other countries. Noam Chomsky was on this very program several months ago, and he talked about how the entire world is laughing at this indignation from the United States—”How dare you interfere in our democracy!”—when the United States not only has continuously in the past done, but continues to do far more extreme interference in the internal politics of all kinds of countries, including Russia.
GLENN GREENWALD: The United States funds oppositional groups inside Russia. The United States sent advisers and all kinds of operatives to try and elect Boris Yeltsin in the mid-1990s, because they perceived, accurately, that he was a drunk who would serve the interests of the United States more than other candidates who might have won. The United States interferes in Russian politics, and they interfere in their cyber systems, and they invade their email systems, and they invade all kinds of communications all the time. And so, to treat this as though it’s some kind of aberrational event, I think, is really kind of naive.
GLENN GREENWALD: It wasn’t just Hillary Clinton in 2016 who lost this election. The entire Democratic Party has collapsed as a national political force over the last decade. They’ve lost control of the Senate and of the House and of multiple statehouses and governorships. They’re decimated as a national political force. And the reason is exactly what Joe said. They become the party of international globalization. They’re associated with Silicon Valley and Wall Street billionaires and corporate interests, and have almost no connection to the working class. And that is a much harder conversation to have about why the Democrats have lost elections than just blaming a foreign villain and saying it’s because Vladimir Putin ran some fake Facebook ads and did some phishing emails. And I think that until we put this in perspective, about what Russia did in 2016 and the reality that the U.S. does that sort of thing all the time to Russia and so many other countries, we’re going to just not have the conversation that we need to be having about what these international institutions, that are so sacred—NATO and free trade and international trade organizations—have done to people all over the world, and the reason they’re turning to demagogues and right-wing extremists because of what these institutions have done to them. That’s the conversation we need to be having, but we’re not having, because we’re evading it by blaming everything on Vladimir Putin. And that, to me, is even more dangerous for our long-term prospects than this belligerence that’s in the air about how we ought to look at Moscow.
Indictments and First Year Law
Mish: I now wish to return to a statement my friend made regarding the idea "No question Russia did it".
From Glenn Greenwald
As far as the indictments from Mueller are concerned, it’s certainly the most specific accounting yet that we’ve gotten of what the U.S. government claims the Russian government did in 2016. But it’s extremely important to remember what every first-year law student will tell you, which is that an indictment is nothing more than the assertions of a prosecutor unaccompanied by evidence. The evidence won’t be presented until a trial or until Robert Mueller actually issues a report to Congress. And so, I would certainly hope that we are not at the point, which I think we seem to be at, where we are now back to believing that when the CIA makes statements and assertions and accusations, or when prosecutors make statements and assertions and accusations, unaccompanied by evidence that we can actually evaluate, that we’re simply going to believe those accusations on faith, especially when the accusations come from George W. Bush’s former FBI Director Robert Mueller, who repeatedly lied to Congress about Iraq and a whole variety of other issues. So, I think there we need some skepticism. But even if the Russians did everything that Robert Mueller claims in that indictment that they did, in the scheme of what the U.S. and the Russians do to one another and other countries, I think to say that this is somehow something that we should treat as a grave threat, that should mean that we don’t talk to them or that we treat them as an enemy, is really irrational and really quite dangerous.
Mish - Six Questions
- Is this a trial or a witch hunt?
- Do we need to see the evidence or do we believe known liars?
- Is Trump guilty of treason? Before we even see proof Putin was involved?
- Is the CIA incapable of fabricating evidence?
- Even if Russia interfered in the election, why should anyone have expected otherwise?
- Has everyone forgotten the US lies on WMDs already?
Irrational and Dangerous
I don't know about you, but I have no reason to believe known liars and hypocrites.
I disagree with Trump all the time, in fact, more often than not.
The amount of venom on Trump over this is staggering.
Adding a missing word, I stand by my previous statement: "Nearly every political action that generates this much complete nonsense and hysteria from the Left and Right is worthy of immense praise."
If you disagree please provide examples. The only two I can come up with are Pearl Harbor and 911. In both, the US was directly attacked.
For rebuttal purposes I offer Vietnam, Syria, Iraq, Russia, Iran, WWI, treatment of Japanese-American citizens in WWII, and McCarthyism.
Greenwald accurately assesses the situation as "really irrational and really quite dangerous."
And if indictments and accusations were crimes, we wouldn't need a jury.
Published:7/17/2018 6:26:22 AM
Futures Flat Ahead Of Powell As Netflix Shock Lingers Over FAANGs
US equity futures are flat, alongside European and Asian stocks as global markets recovered some ground on Tuesday after oil prices stabilized and as trade war fears subsided with attention still squarely focused on Trump's Putin summit, even as global tech stocks, Nasdaq futs and FAANGs - or is that FAAGs now - felt the pressure from yesterday's NFLX earnings bomb. The dollar rebounded from overnight lows if still down for the 4th day ahead of a bevy of earnings and before Fed Chair Jerome Powell's much-anticipated testimony to the U.S. Congress.
The MSCI’s world equity index was broadly unchanged, with energy companies in Europe and Asia recovering ground from early losses caused by the previous day’s turbulence in commodity markets. Brent crude initially fell for a second day after a 4% slump on Monday, as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers, but they recovered to trade up 0.5%.
Europe's Stoxx 600 Index was up 0.1% with miners outperforming while telecommunications and utility shares fell. In Europe, technology stocks fell 0.4%, tracking the decline in Nasdaq futures which were hit after Netflix reported a shocking miss and sharp drop in subscriber growth.
"It’s been a fairly sluggish and unexciting start to the week for markets. Whether things get more interesting or not probably depends on what Fed Chair Jerome Powell has to say when he testifies today in front of the Senate Banking Committee," said DB's Craig Nichol.
Earlier in Asia, the MSCI index of Asia-Pacific ex-Japan fell 0.4%, ending two days of gains amid concern over growth in China. Japanese stocks outperformed in Asia, helped by the yen which held close to its weakest level since January. The Shanghai Composite resumed its slide, and despite a last hour rescue attempt, ostensibly by the National Team, it still closed below 2,800 for the first time since July 11.
Overnight, China's NBS reported 70-city housing price data which showed that average commercial home price appreciation was 0.8% in June, the fastest pace of appreciation since October 2016. Out of the 70 cities NBS monitors, more cities saw housing prices increase in June compared with May.
The barometer of Chinese risk sentiment, the Yuan, initially rose despite the PBOC fixing the currency lower by 0.09% to 6.6821, the lowest in 11 months, and below the consensus estimate, however it since gave up much of the gains and tracking the late session dollar strength, slid back to 6.7. The yuan also declined against a trade-weighted basket of currencies to the lowest since Dec. 20 amid signs of a slowing economy.
The Bloomberg Dollar Spot Index fell for a fourth day, while European sovereign bonds were mixed. The DXY index index fell 0.1% against a basket of six major currencies to 94.409. The index shed 0.25 percent on Monday, nudging away from a two-week high of 95.241 on Friday. The pound advanced after the UK announced record-high employment, raising the odds of an August interest-rate hike by the Bank of England despite the escalating political crisis which threatens to sweep Theresa May from power. The New Zealand dollar jumped after the central bank’s core inflation measure accelerated at the fastest pace in seven years.
Emerging market stocks headed lower for a second day, while their currencies climbed.
Earnings and the Fed are the key remaining catalysts for market sentiment this week, a welcome respite from a background of deteriorating trade relations between the world’s biggest economic powers, at least until Trump's next unexpected tweet. Company results have been mixed thus far, with Deutsche Bank and Bank of America beating estimates, counterbalancing misses by Netflix and Wells Fargo reading.
Today, Fed chair Jerome Powell will testify on the economy and monetary policy before the U.S. Senate Banking Committee and the House of Representatives Financial Services Committee on Wednesday. As outlined in the Fed's monetary policy report released on Friday, he will reiterate the Fed’s stance towards gradual monetary policy tightening. Markets will focus on his views on recent trade tensions.
Some were hawkish: "In short, we expect the chairman to signal optimism on growth and inflation, consistent with continued ‘gradual’ tightening. He will undoubtedly acknowledge some downside risks associated with the administration’s trade warmongering, but he will likely try to avoid sounding critical of the administration" wrote Jim O’Sullivan, chief economist at High Frequency Economics.
Others expected a dovish surprise: "It’ll be a tricky day at the office for Fed Chair Powell, but given the external challenges facing the U.S. economy, it’s hard not to see a more cautious policy being struck today,” said Viraj Patel, currency strategist at ING Groep NV. "This will come as a dovish surprise to markets. A quiet day in Europe means EUR/USD’s focus will be on Powell, we look for 1.17 to hold.... Fed’s policy outlook currently does not take into account a possible trade war - and we don’t feel that this is a valid assumption. It may be remiss for Powell not to talk about the risks."
Also on Tuesday, the Chinese government repeated it would hit its 2018 growth target, one day after it reported slower growth in the second quarter and the weakest expansion in factory activity in June in two years. UBS economists lowered their estimates for Chinese gross domestic product to take into account trade war escalation, warning clients the country’s currency is likely to weaken.
Trading in government bonds was subdued ahead of Powell’s testimony, with the 10Y yield unchanged from Monday at 2.8582%. In the Eurozone, government bond yields inched lower by 0.5 to 2 bps, with investors unwilling to push yields any higher before Powell testifies. German Bunds yielded 0.36%, while 10Y Gilts paid 1.283%, both effectively unchanged.
Commodities climbed after Monday falling to the lowest in 11 months as WTI tumbled to $68 a barrel but has since stabilized.
Scheduled earnings include J&J, UnitedHealth, Goldman Sachs; on the economic docket we have Industrial Production, while markets will focus on today's T-Bill sales and Powell's testimony.
- S&P 500 futures down 0.05% to 2,795.00
- STOXX Europe 600 up 0.02% to 384.14
- MXAP up 0.04% to 165.24
- MXAPJ down 0.4% to 535.60
- Nikkei up 0.4% to 22,697.36
- Topix up 0.9% to 1,745.05
- Hang Seng Index down 1.3% to 28,181.68
- Shanghai Composite down 0.6% to 2,798.13
- Sensex up 0.3% to 36,434.45
- Australia S&P/ASX 200 down 0.6% to 6,203.64
- Kospi down 0.2% to 2,297.92
- German 10Y yield fell 0.6 bps to 0.357%
- Euro up 0.2% to $1.1728
- Brent Futures up 0.4% to $72.12/bbl
- Italian 10Y yield rose 2.6 bps to 2.312%
- Spanish 10Y yield fell 1.7 bps to 1.262%
- Gold spot up 0.3% to $1,244.03
- U.S. Dollar Index down 0.1% to 94.41
Top Overnight News
- President Donald Trump’s equivocation on U.S. intelligence agencies during a news conference with Russian leader Vladimir Putin triggered the most intense backlash from Republicans of anything he’s done since winning election in 2016
- U.K. Prime Minister Theresa May’s Brexit strategy is in disarray after she infuriated pro-European Tories by bowing to pressure from their euroskeptic colleagues to re-write her plans. May’s majority was cut to just three votes after she adopted Brexiteer amendments to a key piece of customs legislation, and the proposals narrowly passed through the House of Commons late Monday
- U.K. employment rose to a record high in the three months through May after the economy created jobs at a stronger-than-expected pace
- The International Monetary Fund echoed warnings from investors including Larry Fink that trade friction could upend the market-friendly backdrop of low volatility in equities and rates, and crimp economic growth
- Oil futures in New York fell 4.2 percent on Monday following last Wednesday’s 5 percent tumble. The latest decline comes as Saudi Arabia is offering more crude cargoes to Asian customers, according to people familiar with the matter. Trump was said to be considering tapping the U.S.’s emergency oil supply to tame rising fuel prices
- Australia’s central bank expects a strengthening economy to gradually cut unemployment and lift inflation, reiterating there’s no strong case for a near-term policy move
Asia equity markets traded mostly lower after a lacklustre lead from US where energy underperformed amid a slump in crude and Nasdaq futures took a hit after-market on disappointing earnings and subscriber numbers from Netflix. ASX 200 (-0.5%) was negative with the index dragged by losses in energy names following a decline of around 4% in oil due to concerns a supply glut could return and as miners suffered from early weakness in Shanghai metal prices. Conversely, Nikkei 225 (+0.9%) bucked the trend on return from the extended weekend amid JPY weakness, while Shanghai Comp. (-1.0%) and Hang Seng (-1.0%) led the declines despite continued liquidity efforts by the PBoC, amid overhang from trade uncertainties and with energy names pressured. Finally, 10yr JGBs were uneventful with prices subdued amid a positive tone in Tokyo stocks but with downside also restricted amid the BoJ’s presence in the market concentrated in the short end and belly of the curve.
Top Asian News
- China Hedge Fund Doubles Down as Market Selloff Deepens Losses
- India Is Said to Ready PNB Capital Injection to Aid Bond Payment
- India’s Supreme Court Recommends Parliament Act on Mob Lynchings
- Philippine Vehicle Sales On Five-Month Losing Streak in June
European equities have pared back their modest opening losses to trade with little in the way of firm direction (Eurostoxx 50 -0.2%, DAX +0.1%) in what has been a relatively light session thus far in terms of newsflow. European markets have opted to shrug off the broadly softer Asia-Pac lead which saw sentiment hampered by yesterday’s declines in energy prices and slump in Nasdaq futures after Netflix subscriber growth figures fell short of street estimates. In terms of sectors, telecom names lag their peers after Orange (-1.4%) were cut to neutral from buy at Citi and Telenor (-1.8%) earnings fell short of market expectations. Material names are seen higher despite ongoing trade concerns as gains in Thyssenkrupp (+7.0%) lift the sector amid news that their Chairman is to leave the Co., following the recent resignation of their CEO.
Top European News
- Thyssenkrupp Inches Toward Breakup as Top Leadership Departs
- Italy’s Mediaset and F2i Offer to Buy Rest of Ei Towers
- Getinge Leaps; Increased Guidance Likely Conservative: Pareto
- TomTom Shares Catch Break After Apple Turmoil With Guidance Hike
In FX, the NZD Kiwi is now head and shoulders above the G10 pack on elevated NZ inflation data, but not the headline measures that were actually a tad softer than expected. Instead, it was the RBNZ’s preferred core or factor model measure that hit a 1.7% y/y 7 year peak that boosted the Nzd to 0.6840 vs the Usd and not far from 1.0860 vs the Aud, which lagged in wake of neutral RBA minutes flagging heightened global trade risks due to hyped up import tariff threats between the US and China amongst others. Aud/Usd remains above 0.7400 on a broadly soft Greenback, but is still wary about option expiries at the strike through this week, with 800 mn falling today. GBP - Resilient in wake of another Government semi U-turn on post-Brexit proposals, with Cable rotating around 1.3250 and Eur/Gbp circling 0.8850 following UK labour data showing underlying strength in the jobs market, albeit with wages still not reflecting high levels of employment perhaps. JPY - USDJPY meanders between 112.25-55 with heavy offers layered above 112.50 and markets looking towards US ip data for some further direction.
In commodities, WTI and Brent (+0.1% and +0.3% respectively) crude futures trade in close proximity to recent lows as market forces continue to act against the commodity. Prices have been unable to make any meaningful recovery from recent losses which have stemmed from ongoing concerns that a supply glut could return amid reports the US is open to considering waivers on Iran sanctions, Libyan refineries coming back online, as well as recent chatter that the US was mulling dipping into the strategic petroleum reserve. In terms of energy newsflow from today’s session, Libyan sources report that domestic oil output has risen to 650-700k bpd as ports continue to re-open. With this in mind, Goldman Sachs state that they still expect Brent crude to retest USD 80/bbl although it may occur in late 2018 rather than previous forecast of summer, citing US stance on oil. In metals markets, spot gold (+0.36%) has seen some modest support from the broadly softer USD. Elsewhere, copper is seen higher by around 1% in London trade as LME inventories remain tight, whilst steel prices were seen lower overnight as recent Chinese data poses some concern for the market. Finally, Indian government sources suggest that the nation is still in talks with the US regarding the rolling back of steel tariffs with India ready to impose safeguards if necessary.
Looking at the day ahead, as noted at the top the main highlight is likely to be Fed Chair Powell delivering his semi-annual testimony to the Senate Panel in the afternoon. We've got June industrial and manufacturing production prints along with the July NAHB housing market index release all scheduled. Q2 earnings for Goldman Sachs and Johnson & Johnson are also due. Meanwhile the BoE’s Carney, Bailey and Stheeman will speak on the Financial Stability Report while the Italian Finance Minister Tria will testify before Parliament.
US Event Calendar
- 9:15am: Industrial Production MoM, est. 0.5%, prior -0.1%; Manufacturing Production, est. 0.7%, prior -0.7%
- 10am: NAHB Housing Market Index, est. 68, prior 68
- 10am: Powell to Deliver Semi-Annual Testimony Before Senate Panel
- 4pm: Total Net TIC Flows, prior $138.7b; Net Long-term TIC Flows, prior $93.9b
DB's Craig Nicol concludes the overnight wrap
Blame it on the World Cup hangover or more likely the dog days of summer, but it’s been a fairly sluggish and unexciting start to the week for markets. Whether things get more interesting or not probably depends on what Fed Chair Jerome Powell has to say when he testifies at 3pm BST today in front of the Senate Banking Committee. As a reminder our US economists expect Powell’s testimony to largely reflect the minutes of the June 13th FOMC meeting. Those minutes presented a generally upbeat economic outlook and broad-based support amongst participants for continuing along the path of “gradual” policy firming. That said there was an acknowledgement of the rising risks to the economic outlook associated with trade policy and since that meeting we obviously know that the Trump administration has announced a review of tariffs on $200bn of additional goods from China. So expect this to be a talking point. The relentless flattening of the yield curve is another possible point for discussion although our colleagues would be surprised if Powell raised alarm bells about this.
Yesterday was actually a rare day where the Treasury curve steepened with 2s10s closing 1.4bps steeper at 26.0bps – a week since we last saw the curve steepen. Benchmark 10y yields rose 3.1bps to 2.859% making it 34 trading days in a row that yields remain entrenched in this 2.80-3.00% range. At the short end 2y yields ended 1.8bps higher while 30y yields were up 3.0bps by the closing bell. A weaker bond market in Europe was also about as exciting as it got with 10y Bunds +2.3bps higher to 0.359%.
A solid US retail sales report combined with some positioning ahead of Powell’s testimony and a stream of bank issuance in the US all appeared to play a role in one way or another in contributing to the bond moves. Equities appeared to be a lot less interested however. Last night the S&P 500 finished -0.10% despite banks rallying over 3% for the sector’s strongest day since late March. Bank of America surged +4.31% following a stronger than expected earnings report and as a reminder we’ve still got Goldman Sachs today and Morgan Stanley tomorrow to cap the large US banks reporting for Q2. Coming back to the broader index, we couldn’t help but notice that the S&P 500 is now yielding less than 3-month T-bills which is an incredible statistic. It’s the first time that has happened since 2008. In fairness T-bills are also yielding more than 30y bonds in 12 European countries so the S&P is hardly on its own. Elsewhere, in Europe yesterday the Stoxx 600 also limped to a -0.25% fall with a -4.15% decline for WTI Oil on the back of potentially higher Saudi Arabia supply not helping sentiment across equities generally. EM currencies were fairly well behaved however while Gold (-0.27%) and the US dollar index (-0.18%) edged a bit lower.
This morning in Asia, markets are broadly extending on losses with the Hang Seng (-1.11%), Shanghai Comp (-1.13%) and ASX (-0.50%) all down while the Nikkei (+0.95%) is bucking the trend as trading resumed post holidays. Futures on the S&P 500 and Nasdaq are broadly flat despite, after the closing bell in the US, Netflix’s share price dropping as much as -15% after reporting slower than expected growth in subscriber numbers in Q2 (+5.2m, c.1m less than consensus) and an outlook which suggested a decline in numbers for the current quarter. Elsewhere this morning Reuters noted the average new home prices in China’s 70 major cities rose the fastest in around 2 years, up 1% in the month of June versus 0.7% in May.
Coming back to the retail sales data yesterday, headline sales were confirmed as rising +0.5% mom in the US in June as expected however this was on top of a five-tenths of a percent upward revision to the May print to +1.3% mom. Excluding autos and gas, sales printed at a slightly below consensus +0.3% mom (vs. +0.4% expected) however again there was a big upward revision to May to +1.3% mom (from +0.8%). The control group component (0.0% mom vs. +0.4% expected) was more of a wash with June’s miss offset also by May’s upward revision (+0.8% from +0.5%). Elsewhere the July Empire manufacturing reading came in at a slightly better than expected 22.6 (vs. 21.0 expected) albeit with the prices paid component falling a full 10pts while business inventories printed at +0.4% mom as expected. It’s worth noting that the Atlanta Fed revised up their Q2 GDP forecast post that retail sales data to 4.5% (from 3.9%) - the highest since last month.
Elsewhere there was plenty of focus on the press conference between President Trump and his Russian counterpart President Putin yesterday following their first summit together. Perhaps unsurprisingly the Mueller investigation into potential interference by Russia in the US election was front and centre for those watching with Trump’s refusal to side with US intelligence agencies and instead contradict his own security aides, subsequently criticised by Republican lawmakers including Senator John McCain and House Speaker Paul Ryan.
Meanwhile here in the UK it was another busy day for Brexit headlines. After accepting four earlier amendments and then enduring a night of tight votes as well as a resignation of a junior defence minister (Guto Bebb), PM May’s Brexit customs legislation has now passed its third reading with a vote of 318 to 285 in the lower House. Notably voting on two earlier amendments were fairly close calls with the government winning with 305 vs. 302 votes (14 Tories rebelling) and 303 vs. 300 votes (11 Tories rebelling) respectively. The Taxation bill will allow the government to levy duties on goods after leaving the EU. Looking ahead, the entire draft bill will go to the House of Lords for voting and approval before becoming law. For markets, Sterling traded as high as c0.5% up before paring back gains to close +0.10% stronger versus the Greenback.
Elsewhere, over at the Fed, Neel Kashkari reiterated his dovish view on rates as he noted “there is little reason to raise rates much further, invert the yield curve, put the brakes on the economy and risk that it does, in fact, trigger a recession”. In part as he pointed to “…if inflation expectations or real growth prospects pick up, the Fed can always raise rates then”. He also went on to say that “this time is different” (with respect to the yield curve) are the four most dangerous words in economics, in his view.
Before we look at today’s calendar, yesterday also saw the release of the IMF’s latest Global Economic Outlook. While the Fund made no change to either its 2018 or 2019 global growth forecast of 3.9%, the accompanying statement did highlight that “the expansion is becoming less even, and risks to the outlook are mounting”. They went as far as to say that “the rate of expansion appears to have peaked in some major economies and growth has become less synchronised”. Indeed the country-by-country forecasts highlight the widening divergence between the US and other developed nations. The 2.9% and 2.7% growth forecast for the US in 2018 and 2019 respectively was the same as the April forecast, however the Euro Area was revised down to 2.2% in 2018 and 1.9% in 2019, a downward revision of two-tenths and one-tenth. Japan and the UK were also revised down two-tenths this year to 1.0% and 1.4% respectively although forecasts for next year were left unchanged. There were also no surprises for China (6.6% in 2018 and 6.4% in 2019). Unsurprisingly the looming trade war concerns were cited as the greatest risk with the IMF saying that “the risk that current trade tensions escalate further – with adverse effects on confidence, asset prices, and investment – is the greatest near-term threat to global growth”.
Looking at the day ahead then, as noted at the top the main highlight is likely to be Fed Chair Powell delivering his semi-annual testimony to the Senate Panel in the afternoon. Datawise, May and June employment data in the UK will be a focus (4.2% unemployment rate expected), while June EU27 new car registrations and the final June CPI release in Italy are also due in Europe. In the US we've got June industrial and manufacturing production prints along with the July NAHB housing market index release all scheduled. Q2 earnings for Goldman Sachs and Johnson & Johnson are also due. Meanwhile the BoE’s Carney, Bailey and Stheeman will speak on the Financial Stability Report while the Italian Finance Minister Tria will testify before Parliament.
Published:7/17/2018 5:58:00 AM
Futures Movers: Oil prices continue lower as fears of rising supply grip traders
Oil prices continued lower in volatile action on Tuesday as traders remained concerned about a potential rise in output and an uncertain economic and political backdrop.
Published:7/17/2018 5:58:00 AM
Netflix, Amazon, Jerome Powell, Walmart and Microsoft - 5 Things You Must Know
U.S. stock futures traded mixed on Tuesday, July 17, ahead of Federal Reserve Chairman Jerome Powell's first testimony before Congress. Powell is likely to tell the U.S. Senate Banking Committee on Tuesday at 10 a.m. ET, and the House of Representatives Financial Services Committee on Wednesday, July 18, that the central bank remains committed to gradual monetary policy tightening. The Fed raised rates in March and June, and has indicated two more rate hikes will be coming in 2018.
Published:7/17/2018 4:55:41 AM
Market Snapshot: U.S. stock futures fight for direction ahead of Powell testimony, more earnings
U.S. stock futures traded in tight ranges on Tuesday, indicating another day with moves in and out of positive territory as investors waited for more high profile earning reports and Fed chairman Jerome Powell’s semiannual testimony to the Senate.
Published:7/17/2018 4:55:41 AM
Is It Time To Give Up On Britain's National Health Service?
Authored by Antony Sammeroff via The Mises Institute,
Our National Health Service just turned 70! According to a recent article in The Guardian by Polly Toynbee , The NHS is our religion in the UK and that's why the conservative government can't destroy it. Of course, the Conservative government have never actually tried to destroy the NHS. They haven’t even reduced the amount spent on the NHS. They haven’t even halted increases in healthcare spending. The only thing they have done is reduced the rate at which spending is going to continue to increase.
Before the National Health Service was created in Great Britain our nation was a world-leader with an unrivalled record in making major medical breakthroughs. People came from all over the globe to study medicine, and to be treated in the UK. Dr. John Snow proved that the source of cholera epidemics was the water supply in London. Edward Jenner pioneered a vaccine for smallpox in rural England, and Sir Almroth Wright one for typhoid. Sir Humphrey Davy, also a Briton, first suggested the use of nitrous oxide as an anaesthetic in 1800. Sir Joseph Lister pioneered the use of antiseptics in operations in 1865 using impure carbolic acid, saving countless people dying from infections after surgery. Alexander Flemming, the Scottish physician discovered Penicillin in one of the charitable hospitals in London in 1928. Howard Florey and Ernst Chain, brought it to fruition working in a laboratory in Oxford in 1941. Britain had established the best record in the world for achieving major medical advances and had just developed the landmark drug of the 20th century, as well as playing a leading role in 5 out of the 7 leading medical breakthroughs between 1750 and 1948 when the NHS was established. Britain is no longer a leader in medical advances. Despite its costliness, nepotism, and other flaws, America’s private system has taken the lead.
Britain has less of the latest equipment and the old equipment is often being kept beyond the time when it is safe. If a private company was using out of date intensive care machines and x-ray machines, obsolete cancer care equipment, and operating tables over twenty years old – double their safe life span – the champions of the NHS would no doubt be clamouring for more government oversight and regulation. When government agencies are culpable, they are more or less given a pass on public outrage because they are perceived to be acting in the public interest rather than for profit.
In the UK we cannot compete with cancer survival rates in the US. A 2011 report demonstrated that the average cancer survival rate was 71.18% in the USA as compared to 54.48% in England. Our healthcare may be free at the point of service, but fewer of us survive it. It is costly in terms of lives. In fact, the BBC recently ran an article that reported “patients ‘dying in hospital corridors’.” In one month 300,000 patients were made to wait in emergency rooms for more than four hours before being seen, with thousands more suffering long waits in ambulances before even being allowed into the emergency room.
The sad reality is that in the UK or Canada people die waiting in line for what would be quick and routine medical treatments in the US. In Britain a shocking 4 million people languish on waiting lists according to official sources up from a 7 year high of 3.4 million in 2015 as reported by The Guardian, a left-leaning newspaper, and this in a population of scarcely over 65 million. At current trends this number is set to rise above 5 million in 2019 unless we do something to reverse them.
In the UK you could turn up to an emergency room with an appendix about to burst and still be asked to wait overnight before they find you a bed. One patient reported that a lack of treatment rooms led hospital staff to examine her for gynaecological problem which had left her in severe pain and bleeding in a busy corridor, in full view of other patients. Such humiliating anecdotes could be dismissed as embarrassing one-offs were it not for the shocking fact that as many as 120 patients per day are being attended to in corridors and waiting rooms, in the public areas of hospitals, and some even dying prematurely as a result. In the first week of 2018, over 97% of NHS trusts in England were reporting levels of overcrowding so severe as to be “unsafe.”
25% of British cardiac patients die waiting for treatment, and an investigation by a British newspaper found that delays in treatment for colon and lung cancer patients have been so long that 20% of cases were incurable by the time they finally received care. 193,000 NHS patients a month wait beyond the target time of 18 weeks for surgery. According to the OECD Britain has the lowest number of doctors per thousand population in the advanced world. A chart displayed in James Bartholemew’s book The Welfare State We’re In in 20 documented that while only 1% of patients of patients in the USA had to wait over four months for surgery, while the number was 12% in Canada, 17% in Australia, 22% in New Zealand, and a shocking 33% in the UK.
Where free-at-the-point-of-entry resources are limited, older patients are viewed as a drag on the system – especially since they require the most frequent care which costs much more. The average 65-year-old costs the NHS 2.5 times more than the average 30-year-old. An 85-year-old costs more than five times as much. Although a third of all diagnosed cancers in the UK are found in patients seventy-five and over, only one in fifty lung cancer patients over seventy-five receives surgery, and the NHS does not even provide cancer screening to patients over the age of sixty-five.
The government can make waiting lists look shorter by denying patients services outright because those who have been refused services will no longer appear in statistics. If someone’s disease proves fatal because they failed to receive treatment in time, the government figures appear more cost effective because instead of having to budget for a series of expensive surgeries, they have a deceased person on their hands who will not rack up a whole lot of medical accounts. It’s not to say that anyone is perniciously trying to kill off patients, but with pressure constantly mounting for officials to show meaningful improvements, the incentive to coldly take advantage of manipulated statistics “for the greater cause of saving the NHS” will always loom. It is, after all, our religion. In one interview, prominent columnist Dr. Dalrymple reported “Managers going around the wards telling the doctors who they thought ought to be discharged. They had no medical training or knowledge. But they would try and influence the doctors to discharge patients quickly… This is a problem, of course, wherever the person paying for the care is not the patient himself… But where you have one giant organization that decides everything the hazard is even greater.”
The failings of socialised medicine are invariably blamed on budget cuts and a lack of funding by advocated of the NHS who are used to expecting medical services to be paid for by the government. The assumption is that if we were just spending more money none of this would be happening. The thing is, we are spending more money than ever before already.
In fact, the budget of the NHS doubled in real terms between 1995 and 2015 and now waiting lists are longer than ever!
This is because the shortages and inferiority of services are not caused by a lack of funding in the first place. They are caused by how we are choosing to pay for healthcare.
Published:7/17/2018 4:27:39 AM
Mark Hulbert: Buying gold now would only weigh down your investment portfolio
The typical gold timer has yet to turn aggressively bearish — a bad sign, writes Mark Hulbert.
Published:7/17/2018 4:27:38 AM
The Wall Street Journal: Walmart, Microsoft deepen their partnership to take on Amazon
Walmart agrees to use Microsoft’s cloud technology to power functions that could include algorithms for purchasing and sales-data sharing with vendors, deepening a partnership between two of Amazon’s most powerful rivals.
Published:7/17/2018 4:01:07 AM
Stocks Drift, Oil Steadies, Dollar Dips as Investors Question Growth Prospects
Global stocks drift lower as demand signals suggest global economy may slow into second half of the year. Oil prices steady, but remain in correction territory as supply concerns ease and demand questions remain. Dollar eases as investors trim bets on near-term Fed rate hikes as U.S. yield gap continues to narrow.
Published:7/17/2018 4:01:07 AM
Massive Iceberg Threatens Greenland Village With Tsunami
A huge iceberg has drifted dangerously close to a village on the western coast of Greenland, causing concern that it could trigger a tsunami if it breaks apart. The 300-foot-high mountain of ice lies adjacent to the village of Innaarsuit, a tiny town with 169 inhabitants.
According to the Danish Broadcasting Corporation (DBC), 33 inhabitants closest to the water were evacuated on Friday and still are not allowed back to their homes. Some evacuated people have moved further inland to stay with friends or relatives in nearby towns.
Keld Quistgaard from the Danish Meteorological Institute told the DBC that satellite data shows the iceberg is between 820 and 918 feet at the highest point. Of this, only 262 to 290 feet of it is exposed above the water. Quistgaard considers the iceberg to be about 656 feet wide and weighs approximately eight to 10 million tons.
“We are used to big icebergs, but we haven’t seen such a big one before,” Susanna Eliassen, a member of the village council in Innaarsuit, told the Greenlandic Broadcasting Corporation (KNR).
On Saturday, the mountain of ice had moved out from the shore and was sitting roughly 0.3 miles away from the village. KNR still considers it a “special situation,” and images below show how the area is still at an elevated risk of a tsunami, that is if, a large piece breaks off.
BBC Radio 5 tweeted, “The village of Innaarsuit in Greenland has been evacuated because of fears that a massive iceberg, which has grounded in the bay, may split and create a tsunami that would swamp the area.”
CGTN, a 24-hour English news channel, of China Central Television, provides another unique view of the harbor, in relation to the iceberg.
In the below footage from Oline Nielsen on Facebook and licensed to KNR, a large chunk of the iceberg can be seen collapsing into the water, which sends a tidal wave into the nearby harbor.
“The unusual thing is that the iceberg is so close to the village,” said Quistgaard. This could be due to a few things: right now there is a new moon, which means the water level is rising, it could be the reason why the iceberg has drifted so close to the shore, he added.
Eliassen also told Sermitsiaq, a national newspaper in Greenland, that the fishing industry has been particularly affected by the huge mountain of ice that is stuck a little north of Innaarsuit. “Fishermen must not go fishing because they cannot trade because of the iceberg poses a danger if it calms,” she said.
She states that the inhabitants of Innaarsuit respect the evacuation notice and hope the matter can be resolved shortly.
The Greenland Emergency Board will meet Monday morning to discuss the iceberg problem in Innaarsuit, with representatives from, among others, the Self-Government, Arctic Command and Health Service. A plan of action will be formulated to aid the village, however, given the size of the mountain of ice, there is not too much the government can do.
* * *
It seems icebergs are on the move across the massive Danish territory. In June, researchers captured the moment when a four-mile long iceberg snapped off a glacier on the other side of the island.
Published:7/17/2018 3:33:55 AM
Stocks Drift, Oil Extends Declines as Investors Question Global Growth Prospects
Global stocks drift lower as demand signals suggest global economy may slow into second half of the year. Oil prices extend declines into correction territory as supply concerns ease and demand questions remain. Dollar eases as investors trim bets on near-term Fed rate hikes as U.S. yield gap continues to narrow.
Published:7/17/2018 3:00:49 AM
Mass Migration: "The Fatal Solvent Of The EU"
Authored by Giulio Meotti via The Gatestone Institute,
"Far from leading to fusion, Europe's migration crisis is leading to fission", Stanford's historian Niall Ferguson recently wrote. "Increasingly, I believe that the issue of migration will be seen by future historians as the fatal solvent of the EU". Week after week, Mr. Ferguson's prediction seems to be turning into a reality.
Not only does Europe continue to fragment as anti-immigration sentiment gathers political strength, but, as a result of the migrant crisis, the EU's border-free internal zone, Europe's most cherished prize after the Second World War, is now defined as "at risk" by the Italian government, among other governments, such and Austria.
Immigration is also redefining the intra-EU contract.
The Czech Republic, Hungary, Poland and Slovakia, the so called "Visegrad Group", recently called for EU border defense. "We have to have a Europe capable of defending us", Austrian Chancellor Sebastian Kurz said as well, after he was invited to join the Visegrad meeting.
This year, Austrian Chancellor Sebastian Kurz (second from left) was invited to join the leaders of the four "Visegrad Group" countries (Czech Republic, Hungary, Poland and Slovakia) at their June 21 summit meeting. High on the agenda were the issues of mass-migration and border protection. (Image source: Austrian Federal Chancellor's Office)
The new Italian populist government, after Italy saw more than 700,000 migrantsarrive on its shores in the past five years, also embraced a hard-line policy. Italian Interior Minister Matteo Salvini recently closed Italy's ports to migrant vessels. In Germany, after the German chancellor clashed on immigration with her interior minister, Horst Seehofer, migrant policy could also lead to the "end of Merkel's tenure".
"Italy's new populist government signals a major challenge to the European status quo, but not in the way most observers initially expected", the author Walter Russell Mead recently commented in The Wall Street Journal. "The governing coalition has put the challenge to its euro policy on hold. Instead it is turning to a subject on which the European establishment is more vulnerable: migration".
The entire European political consensus is fracturing under the seismic impact of the migrant wave. Migration to Europe has become a political issue "as toxic as ever", the New York Times just noted about the current debate inside the European Union. The EU's current trouble seems to come from a deafness among the policy elites, who refuse to take into account the problems for their citizens that have followed unvetted mass immigration.
Mass migration in the last years has simply created major troubles for Europe's internal stability. First, there has been a security challenge. According to a new report by the Heritage Foundation:
"Almost 1,000 people have been injured or killed in terrorist attacks featuring asylum seekers or refugees since 2014. Over the past four years, 16 percent of Islamist plots in Europe featured asylum seekers or refugees. ISIS has direct connections to the majority of plots, with Germany targeted most often, and Syrians more frequently involved than any other nationality. Nearly three-quarters of plotters carry out, or have their plans thwarted, within two years of arrival in Europe.
"Since January 2014, 44 refugees or asylum seekers have been involved in 32 Islamist terror plots in Europe. These plots led to 814 injuries and 182 deaths."
There is also a severe challenge to ethnic and religious coexistence posed by immigration. French Jews have fallen victim to a form of ethnic cleansing, according to a manifesto signed by, among others, former French President Nicholas Sarkozy and former French Prime Minister Manuel Valls.
"Ten per cent of the Jewish citizens of the Paris region have recently been forced to move because they were no longer secure in certain council estates" the manifesto said. "This is a quiet ethnic cleansing".
The threat Europe is facing if it refuses to close and control the borders is examined by Stephen Smith, an expert on Africa and admired by French President Emmanuel Macron, in his new book, The Rush to Europe: Young Africa on the Way to the Old Continent. Today, he notes, 510 million Europeans live in the European Union with 1.3 billion Africans facing them. "In thirty-five years, 450 million Europeans will face some 2.5 billion Africans, five times as many", Smith predicts. If the Africans follow the example of other parts of the developing world, such as the Mexicans in the US, "in thirty years", according to Smith, "Europe will have between 150 and 200 million Afro-Europeans, compared with 9 million today". Smith called this scenario "Eurafrique". Europe's largest migration wave since World War II has also become an increasingly urgent problem as Europe's indigenous populations continue to age and diminish in number.
The controversial quota system for migrants has already failed. The European governments also cannot really deport migrants. In 2012, the European Court of Human Rights (ECHR) condemned the Italian government and ordered it to pay thousands of euros to two dozen immigrants it deported to Libya. Italian authorities had intercepted the migrants in the Mediterranean Sea when they were trying to get to the Italian island of Lampedusa from Libya. Three years later, the European Court again condemned the Italian government for deporting migrants. The European Court of Human Rights also condemned Spain in its judgment to expel of a group of 75-80 migrants from the Melilla enclave. The ECHR then condemned Hungary for detaining migrants. Europe cannot stop, deport, arrest and repatriate the migrants. What do the authorities in Brussels suggest? Bring everyone to Europe?
Andrew Michta, dean of the College of International and Security Studies at the George C. Marshall European Center for Security Studies, recently wrote that, under this mass migration, European democracies risk their own "decomposition". We will not only see the "fission" of the already fragile European Union, but that of the Western civilization as well.
Published:7/17/2018 2:33:35 AM
Putin Likes To Keep Other World Leaders Waiting
President Trump became the latest leader to experience the "Putin wait" today, with the Russian president 45 minutes overdue for their summit in Helsinki.
But, as Statista's Niall McCarthy notes, Vladimir Putin has earned a reputation for keeping other world leaders waiting.
Since 2003, the Russian leader has arrived late for numerous high profile meetings with heads of state, dignitaries and prominent officials.
You will find more infographics at Statista
The Pope isn't even immune from Putin's poor timekeeping skills and he was forced to wait just under an hour for a meeting in 2015.
According to RFE/RL, Angela Merkel was kept waiting an agonising 4 hours and 15 minutes for a meeting with Putin in 2014 while former Ukrainian President Viktor Yanukovych once waited 4 hours before sitting down with the Russian leader. It's likely Merkel will consider her meeting with Putin in Sochi in 2007 more irritating than the tardy one in 2014.
In an incident that subsequently became infamous in Germany, Putin introduced Merkel to his pet labrador, despite the German chancellor's fear of dogs. He recently claimed he was unaware of Merkel's fear of dogs, adding that he apologised to the her soon after the meeting.
Published:7/17/2018 1:55:34 AM
Bullion bulls: This mobile app turns gold into a digital currency
Glint, a London-based fintech, makes it possible to use gold to make retail purchases.
Published:7/17/2018 1:55:33 AM
How The UK Can Escape Angela Merkel And The EU
Authored by Brendan Brown via The Mises Institute,
The British are finding out in their Brexit voyage that escaping from the “might” of an EU dominated by Germany is perilous. At this point there are many grounds for despairing about the ability of their political leaders to achieve a meaningful exit. There would have been much stronger grounds for hope if the May government had nurtured an alliance with the US whilst simultaneously moving to provide its fellow citizens with superior money to the euro which incidentally would bolster the competitiveness of the UK financial sector once outside the EU.
Of course, British J.S.Mill-type conservatives, just as their US counterparts, have qualms about Trumpism, but that is a sideshow in the world of realpolitik. In taking on Berlin, London surely had much to gain from forging an alliance with a new US President ostensibly inimical to Chancellor Merkel and the EU and with a fondness for Scotland and the Queen. When British negotiators found out very soon after the referendum (June 2016) that Berlin was insisting on large contributions to the Brussels budget and continuing immigration from the EU as condition of not shutting UK service exports (especially financial) out of the EU, it was surely already time to strengthen their hand by reaching across the Atlantic.
Specifically, if the UK were offering the US enough advantage in terms of a strengthened alliance, surely President Trump would make a condition of any US grand deal with the EU, after the present period of intensifying trade war, that Brussels also makes a peace of equals with London.
Of what would a UK-US deal consist?
Britain would open its market to US farmers (and so incidentally providing much cheaper food) and both countries would have broadened financial integration (removing barriers to each other’s service-sector exports). On the world stage the UK would staunchly supported President Trump’s policies on Iran and Israel whilst taking the European lead against Chinese unfair trade practices. London would also lead the charge against currency manipulation, setting an example of free markets in currencies and interest rates starkly different from the Berlin-Frankfurt model.
In reality there has been absolutely none of this. The landed interests in the Conservative party have blocked any talk of a deal which would have brought down agricultural prices in the UK. Indeed the May government is now proposing that the UK join a EU-UK customs area for goods including farm products - meaning that cheap food imports would be shut out permanently.
The arch-appeaser in the May government, when it comes to negotiating with the EU, is Finance Minister Hammond. Mr. Hammond is also a monetary appeaser – apparently getting on tremendously with Bank of England Governor Carney, an arch dove in so far as that means anything in the global central bankers club. Mr. Carney has kept money market rates at an emergency near-zero level despite inflation running at over 3% earlier this year and with Sterling ostensibly cheap.
Brexiters dislike the Governor’s closeness to the “Remainers” and his doom-laden views about the economic costs of any real escape from the EU. Unless the Brexiters get their act together pretty quick, Mr. Hammond will soon be appointing the successor to Mr. Carney, whose departure back to Canada he “successfully” delayed by one year. Under the Carney-Hammond leadership not only has the UK applied every new EU financial regulation in full but there has been a continuing crackdown on offshore market activities from which the City once flourished in competition with highly regulated and highly taxed market-places on the EU mainland.
Many Conservatives it seems are now deeply concerned that their party could pay the electoral price for a generation of failing to deliver the Brexit their party promised. Instead they are delivering the British people into a “vassal state” even more under the influence of German might than previously. The anti-EU (and anti-immigration) working class voters so essential in their consummation of power could desert in droves.
The anti-EU vote was an anti-establishment vote. But monetary inflation continues to shower riches on the establishment whilst the small saver approaching retirement has much to fear. His or her children struggle to find affordable living accommodation in a real estate market totally distorted by unsound money and crippling forms of taxation (up to an 8% tax penalty – euphemistically called turnover tax or stamp duty — if you buy a house today and decide to sell it a few months later because of a change in mind about it or the neighbourhood).
Benjamin Disraeli understood how to win working class loyalty to Conservative-led nationalism of the day (Queen and Empire) and sustain this by delivery of the economic goods (respecting free trade and the gold standard). Today’s Conservatives are failing on all scores – a phoney nationalism which is revealed as Chamberlain-style appeasement to Merkel might; soft money, currency depreciation, and inflation which ensnares the least able to defend themselves; and an embracing of high food prices to suit the landed class.
Some Brexiters say they will vote against PM May’s EU deal this autumn. Even if they do and her government collapses, it is a very long and hard road back in a shifting and dangerous global environment to a safe ground where the UK can launch a 21st century version of Adam Smith’s Wealth of Nations agenda. That philosopher founder of modern economics told a friend who lamented that Britain faced disaster after having lost its American colonies “there is much ruin in a nation”. The embracing of his economic principles by the Younger Pitt had much to do with Britain avoiding that ruin and instead leading the first industrial revolution.
Could a similarly rosy outcome follow the disasters of the May government’s flawed attempt to escape German-dominated EU might? Time will tell, though we should report that there is no Adam Smith and no Younger Pitt and perhaps crucially no Prince Talleyrand, in view.
Published:7/17/2018 1:27:32 AM
Visualizing The Short History Of America's Trade Wars
History is full of trade wars.
In the majority of cases, the consequences are mostly economic – trade barriers are enacted, and then retaliatory measures are used to counter. Relations can continue to escalate until an understanding can be reached by both parties.
In the minority of cases, trade wars can lead to world-changing consequences.
You may remember that the Boston Tea Party of 1773 was a bold response to an unfair trade measure imposed by a ruling power, and it proved to be a key catalyst that led to the American Revolution.
Meanwhile, the Opium Wars occurred after the Qing Dynasty (China) tried to prevent British merchants from selling opium to the Chinese in the 1830s. These trade barriers led to armed conflicts, and effectively put the nail in the coffin of the Qing Dyasty – the start of China’s infamous “century of humiliation”.
U.S. TRADE WARS
Today’s chart pulls together details on some of the biggest trade conflicts in modern U.S. history.
Courtesy of: Visual Capitalist
Here are some of the more interesting U.S. trade wars, and how they compare to the current spat that is evolving with major trade partners:
1. Smoot-Hawley, 1930
Imposed during The Great Depression, the Smoot-Hawley Act is almost universally recognized by economists and economic historians as triggering a trade war that exacerbated the recovery.
2. Chicken Friction, 1963
Factory farming of chicken in the U.S. ended up catching European farmers off guard. French and German authorities responded by imposing tariffs, and the U.S. then taxed imports such as trucks and brandy.
3. Jabs at Japan, 1981
Japan’s mid-century rise led to the country becoming an export powerhouse. As Japanese cars flooded the U.S. market, intense pressure eventually led to the signing of a Voluntary Export Restraint (VER) agreement that limited sales in the United States. During this same timeframe, the two countries also squabbled about other goods like electronics, motorcycles, and semiconductors.
4. War of the Woods, 1982
The Canada-U.S. Softwood Lumber dispute kicked off in 1982, but it inevitably resurfaces in the news every few years.
5. Pasta Spat, 1985
The U.S. was displeased with the level of access for citrus products in Europe, and put a tariff on pasta products. Europe retaliated by taxing walnuts and lemons from the States.
6. Battle of the Bananas, 1993
Another agricultural trade war, the Battle of the Bananas occurred after Europe slapped tariffs on the import of Latin American bananas. Many of these companies, owned by Americans, were not impressed. In response, there were eight separate complaints filed to the World Trade Organization (WTO). They weren’t resolved until 2012.
7. Steel Salvoes, 2002
These were the last major U.S. steel tariffs introduced before the more recent ones. The goal was similar: to revive the steel industry in the country. However, after a period of brief stability, jobs continued to decline. The European Union responded by taxing oranges exported from Florida.
Published:7/17/2018 12:33:24 AM
Is now a good time to book flights to Cuba?
The country saw a major decline in tourism in 2018.
Published:7/16/2018 11:24:13 PM
US "Super Spy" Program May Explain Mysterious Diplomat Brain Injuries
Authored by Finian Cunningham via The Strategic Culture Foundation,
Over the past two years there have been increasing reports of supposed “sonic injuries” among US diplomats. First in Cuba and more recently in China. Controversial implications are that the US officials may have been maliciously targeted by a “sonic weapon” in host countries. However, a more likely explanation is that the alleged victims are the result of US attempts to create “super spies”.
The number of American diplomats reportedly suffering from suspected “sonic injuries” is increasing, with 11 officials evacuated earlier this month from China. Initially, the mysterious incident was reported at just one US consular location in the city of Guangzhou. Now the suspicion of brain injuries has spread to American diplomats stationed in Beijing and Shanghai.
Some 250 US diplomats in China are reportedly undergoing neurological medical tests to ascertain if they have succumbed to the same kind of brain trauma diagnosed in other colleagues. A study of 21 diplomats evacuated from Cuba found last year that they had incurred brain injuries, but, it was diagnosed, not from physical impact to their heads.
Typically, the symptoms reported include cognitive impairment, visual impairment, hearing of strange sounds, dizziness and sleeplessness.
US doctors have so far been confounded by what may have caused the apparent injuries. Last week, the State Department said that ongoing investigations had not established a causal link to the cited medical problems among diplomats.
However, previously President Donald Trump had explicitly blamed Cuba for being responsible for the reported injuries to diplomatic staff. Trump’s accusation has no evidential foundation. The Cuban government denied having any involvement in presumed sonic attacks on American envoys. It has offered to assist any US investigation. Nevertheless, the evacuation of US staff from Cuba and Trump’s accusations have set back the recent detente in relations between the two Cold War foes which former President Obama had embarked on.
With regard to China, the US has been more circumspect in dealing with the reported cases of apparent sonic injuries, refraining from accusing Beijing of malicious activity. China has previously dismissed any suspicion of sonic attacks as “inconceivable”. Beijing has also hit out the US State Department issuing “health warnings” to its staff in China because such notifications convey an implication of wrongdoing by the host country.
In the context of Trump’s escalating trade war with China, there is the danger that reported cases of injury among diplomats could be politicized by Washington, thus adding to the already acrimonious relations.
Some factors so far missing from the subject need to be addressed.
First, it seems strange that the mysterious brain injuries are only reported by US diplomats. No other country has reported similar incidents among their diplomatic staff.
Secondly, the American brain-injury cases have happened in two countries which could be deemed as politically sensitive. Why have similar cases not been reported among staff based in territories belonging to allied nations?
Thirdly, when US staff are described as “diplomats”, as they invariably are in Western media reporting, we should perhaps be more precise than this innocuous-sounding terminology. If we think of the personnel as “spies” then a more skeptical inference comes into play. Especially, given the sensitive nature of the two countries involved. If the concerned US staff were indeed serving as spies that raises the question about what sort of training and preparation programs they were subjected to ahead of their assignments.
The speculation that Cuban and Chinese state agents could have used some kind of sonic weapon to attack US diplomats is more in the realm of science-fiction fantasy. Both countries deny any such activity. There is no such weapon known to exist. Also, the US doctors who examined the diplomats evacuated from Cuba could not find any casual explanation. The absence of an external source for the injuries appears to be the official US position too, according to the State Department last week.
Significantly, the US doctors studying the Cuban cases said that all the individuals may have undergone a common experience related to their brain injuries.
Rather than speculating about a foreign agency being responsible for the injuries among American diplomats, or rather spies, perhaps the focus should be put on their own side. Were these individuals subjected to some form of hi-tech training run by the Pentagon or the CIA?
It is known that the Pentagon’s Defense Advanced Research Project Agency (DARPA) is investigating brain stimulation devices to greatly enhance learning ability in subjects.
DARPA, as recently as last year, reported the successful use of trans-cranial Direct Current Stimulation (tDCS) devices to boost the cognitive skills among experimental monkeys. It was claimed that subjects given treatment from such devices strapped to the head would later display a significant increase in learning and intelligence compared with control individuals receiving no treatment. DARPA reported a 40 per cent increase in learning ability among macaque monkeys subjected to the brain stimulation device.
One of the lead doctors in the program is quoted as saying: “In this experiment, we targeted the prefrontal cortex [of the brain] with individualized non-invasive stimulation montages.”
The researcher goes on to explain: “That is the region [of the brain] that controls many executive functions, including decision-making, cognitive control, and contextual memory retrieval. It is connected to almost all the other cortical areas of the brain, and stimulating it has widespread effects.”
Please note the parting caveat from the Pentagon-contracted scientist, viz., “stimulating has widespread effects”.
On the positive side, the Pentagon is evidently searching for a way to boost intelligence and learning in humans. This is by no means a new pursuit. For decades, American military intelligence agencies, as well as Hollywood science fiction, have been in thrall to the idea of harnessing the human brain and exploiting ever-higher levels of intelligence. The CIA is known to have run various drug programs and hypnosis – the notorious MK-ULTRA – as early as the 1950s and 60s. The holy grail was to find “super spies” and “super assassins”.
So, the history of the Pentagon and the CIA conducting systematic experiments in order to produce high-performance in humans is well documented.
We also know from recent Pentagon research that it is indeed using electronic brain stimulation devices to greatly enhance the cognitive performance among monkeys. It is therefore conceivable that the Pentagon has conducted unpublished research experiments on human subjects as well.
On the negative side, the sought-after higher intelligence may very well come with unforeseen injurious side-effects. Note again the Pentagon researcher above saying that stimulating the prefrontal cortex of the brain could have “wide-ranging effects”. These effects, in addition to increased intelligence and learning skills, could include deleterious consequences. Especially because the target area of the brain is crucial for the control of “executive functions”.
It is not disclosed by the Pentagon if its brain devices had any injurious impact on the experimental monkeys.
We also do not know the precise work assignments of the affected “diplomats” in Cuba and China. Were there any routine secretarial staff among the reported casualties, or were they all “field staff”, that is, most likely involved in sensitive spying tasks?
It seems unlikely that the Pentagon or affected staff would ever go public in declaring that they were subjected to some form of brain-stimulation device. In any case, the staff could be easily silenced through warnings over career prospects and future earnings or health insurance cover. It may be more convenient for the Pentagon to foment the suspicion of “sonic attack” by foreign agents. That scapegoating could have serious impact on international tensions, especially between the US and China over its trade war and territorial disputes in the South China Sea.
Nevertheless, despite the unknowns, from what we do know already, it seems a plausible posit that the recent upsurge in brain injuries among US diplomatic staff may have been caused not by “sonic attacks” in their host countries, but by their own superiors at the Pentagon or CIA conducting some form of clandestine program to create “super spies”.
Published:7/16/2018 11:24:13 PM
Army Starts Testing "Ironman-Like" Exoskeleton For Future Hybrid Wars
As discussed previously, the Army’s Training and Doctrine Command, or TRADOC, drafted a new strategy for how soldiers will operate, fight, and campaign successfully across multiple domains—space, cyberspace, air, land, maritime—against all enemies (Russia and China) in the 2025-2040 timeframe.
Warrior Maven has confirmed that the Army is literally "gearing up" for decades of hybrid conflict, and in doing so, testing and prototyping self-generating “Ironman-like” soldier exoskeletons. These “breakthrough” suits are designed to transform the combat mission by supporting soldier movements, generating electricity, powering weapons systems and substantially lowering the weight burden of what soldiers carry on the modern battlefield.
The emerging technology, described by Army developers as a “technical breakthrough” is an energy-harvesting exoskeleton suit that can extend mission life for small units or dismounted soldiers on patrol.
“The design is for an energy-harvesting exoskeleton to address the needs of dismounted soldiers. The system can derive energy from the motion of the soldier as they are moving around,” Dr. Nathan Sharps, mechanical engineer, Army Communications-Electronics Research, Development and Engineering Center (CERDEC) recently told Warrior Maven in an interview.
The implications of this technology would be decisive on tomorrow’s battlefield, and could mean the difference between life and death. Last month, elite soldiers from the 10th Mountain Division, a light infantry division at Fort Drum, New York, started testing exoskeleton technologies from Lockheed Martin that reduces the metabolic cost of transport to improve endurance and reduce fatigue on the modern battlefield.
While the exoskeleton suits have been in development for many years, the technology consistently faces the challenge of finding ways to power the devices to maintain its functionality. While current battery technology has evolved, batteries present significant combat challenges due to recharging and weight. The Army is pursuing various efforts to “lighten the load” for soldiers, including the use of exoskeleton suits, robotic pack mules, and cased telescoped ammo.
“The technologies [exoskeleton suits] we are developing can produce electricity, which can be stored and used to power batteries. This increases the longevity of a mission, decreases the need for resupply and reduces the logistics trail,” Sharps explained.
Sharps told Warrior Maven that in hot zones, casualties frequently occur during logistics resupply missions.
While the exoskeleton suit harvests energy from the motion of soldiers, it also simultaneously provides injury prevention and higher output to complete the mission.
“This decreases the chance of muscular-skeletal injury. We look at the soldier as an individual ecosystem. We’re not just looking at what they cannot do right now, but also at what challenges they are going to face 20 years from now,” Sharps said.
Warrior Maven indicates the suit, currently in the early phase of development, is a collaborative effort between the Army Communications-Electronics Research, Development and Engineering Center (CERDEC) and the Army Natick Soldier Systems Center (NSSC). The engineers said the exoskeleton suit reduces the metabolic cost of transport on the modern battlefield.
“When you move, you bounce up and down, and the gait motion is an inverted pendulum. If you lift every step thousands of times, it is a whole lot of energy you are expending,” said Juliane Douglas, mechanical engineer, CERDEC, told Warrior Maven.
Army engineers are experimenting with various configurations for the exoskeleton, including a suspended backpack, which can slide up and down on a spring, enabling little or no weight impact on the soldier.
“In mechanical engineering terms, if you have masses moving together, there is a kinetic energy difference between the two. We have mechanisms which can convert that linear motion into electricity,” explained Douglas.
* * *
Warrior Maven said emerging systems are now being integrated into exoskeletons, for example, helmets with high-resolution thermal sensors, wearable computers, various kinds of conformal body armor and even many weapons systems are now being built into a range of Ironman-like exoskeletons.
Not surprisingly, many of the listed technologies above, heavily rely upon the mobile power to operate and limit the combat mission. Energy-harvesting exoskeleton suits would be a gamechanger for soldiers on the modern battlefield to increase combat output while simultaneously decreasing the metabolic cost of transport to complete the mission.
With the Army increasingly expecting hybrid wars in the 2025-2040 timeframe as the Thucydides Trap inflection point nears, “Ironman-like” exoskeletons are emerging as the dominant strategy to defeat potential enemies (especially ascendant China) in the coming conflicts.
Unless of course China steals the technology, reverse engineers it and comes out with the first working product.
Published:7/16/2018 10:57:01 PM
Company Hikes Price Of "Cadillac" Ambien Nasal Spray By 800% As Drug Companies Defy Trump
While Pfizer and several drugmakers have loudly touted their decision to roll back some price hikes on popular drugs following pressure from President Trump and the rollout of a new California law designed to discourage drug companies from raising prices, others have continued hiking prices of thousands of drugs. According to Raymond James & Associates drug companies have raised prices 3,653 times on 1,045 different drugs so far this year (drug companies often do one round of price hikes in January and another in the early summer). And according to the Wall Street Journal, the biggest price increases have been reserved for so-called "Cadillac" drugs like a new spray form of the sleeping medication Ambien.
Some of the price hikes impacted life-saving drugs like Ampyra, which is used to treat multiple sclerosis. Its owner, Acorda, hiked its price by 20% this year.
As for the sleep medication mentioned above, a small Colorado-based company called Aytu Bioscience recently raised the price of the spray formulation sold under the brand name Zolpimist by more than 800%, according to WSJ.
The median price increase is 8%, but some specific increases have been far greater. Aytu BioScience Inc. raised the list price of a 7.7 milliliter bottle of its sleep aid Zolpimist to $659 from $69.88, while increasing the price of a 4.5 milliliter bottle by 747% to $329.50, according to RELX PLC’s Elsevier Gold Standard Drug Database. The drug is a spray version of zolpidem, the key ingredient in Ambien, which is widely available as cheap generic pills.
In a tactic reminiscent of Valeant Pharmaceuticals and Martin Shkreli's Turing Pharmaceuticals, Aytu bought the rights to sell Zolpimist in the US from a Canadian firm called Magna Pharmaceuticals, then jacked up the price.
Aytu, of Englewood, Colo., raised the price of Zolpimist on Tuesday, about a month after buying the rights to sell the drug in the U.S. and Canada from Magna Pharmaceuticals Inc. The practice of buying rights and then raising the price, by companies including Valeant Pharmaceuticals under then-CEO Michael Pearson and Martin Shkreli’s Turing Pharmaceuticals AG, has drawn criticism from public officials and others because the companies didn’t invest in developing the drugs.
Asked by the paper for his company's reason for hiking the price of the drug, Aytu CEO Josh Disbrow said the company was just bringing the price of Zolpimist in line with other comparable drugs. He added that people who can't afford the spray version can buy the generic pill form instead. The drug, he said, was designed for the small number of wealthy patients who prefer the oral spray over lower priced pills.
Chief Executive Josh Disbrow said Aytu raised Zolpimist’s list price to bring it in line with the cost of other brand-name sleep drugs. He said Zolpimist was for the small number of patients willing to pay more, often out of their own pockets, for the oral spray than for lower-priced pills.
"For those people who want a Cadillac, they can pay for it," Mr. Disbrow said in an interview.
Aytu’s increase in the list price of Zolpimist was among the biggest increases taken in the middle of this year, according to Elsevier’s data on the wholesale-acquisition cost of prescription drugs. Bloomberg earlier reported the Zolpimist increases.
Mr. Disbrow said Aytu’s increases for Zolpimist were different than other examples because the drug is for a lifestyle condition rather than a life-threatening disease, and generic options are available.
"It’s a luxury item. Patients can choose to be on the generic. We want to have it out there for patients who value their rapid sleep," Mr. Disbrow said. He added that Aytu, which sells a drug for low testosterone, doesn’t depend on the Zolpimist price increases to raise sales. Aytu reported $2.7 million in revenue for the nine months ending March 31.
Mr. Disbrow said he expected most sleep-aid patients would buy the generics, and health plans would require people to try the generics before looking at other options. Doctors write more than 30 million zolpidem prescriptions a year, though fewer than 2,000 of them for Zolpimist, he said.
Still, the thousands of price hikes on Zolpimist and other drugs show that presidential pressure isn't enough to stop drug companies from raising prices and for engaging in tactics like buying selling rights and then hiking prices.
"These types of increases indicate that public criticism, even from President Trump, are not enough to change the trajectory of drug costs," said Michael Rea, chief executive of Rx Savings Solutions, which sells software to help employers and health insurers lower their drug spending.
Then again, when drug companies can sell one drug in the US for nearly $40,000 - and the same drug in Europe for $8 - there's quite a bit of incentive for the gangster capitalists who run the world's pharmaceutical firms to simply submit without a fight.
Published:7/16/2018 10:11:58 PM
Uber CEO believes profitability not critical to launching IPO
Uber Technologies Inc.’s Chief Executive Dara Khosrowshahi on Monday confirm that the ridesharing company’s initial public offering is likely to take place in 2019 as originally planned even if its profitability does not improve by then.
Published:7/16/2018 9:22:27 PM
IceCap Asset Management: "Eruption"
Submitted by Keith Decker of IceCap Asset Management
Similar to volcanic lava flows, financial contagions start slowly at first and then end by destroying many things in its path. Inbetween the beginning and the ending, is a baffling experience that can only be understood from afar. Once the eruption begins, people everywhere want to look, see and feel this infrequent experience.
Yet by the end, few actually recognise how the crisis spreads before subtly engulfing everything in its path and ending in a full-on, blow-out contagion. The financial lava flow has started.
Emerging market bonds and currencies are already experiencing the scorching effect of a capital outflows. Next up will be the European experience.
The culmination of the end of ECB money printing, the end of Angela Merkel's grip on power, and the end of strict German austerity policies will see the financial lava flow first through Italy, then Spain and then before you realise it - France too. From there, the contagion spreads far and wide. Few bond markets will be spared and few interest rate sensitive equities will be safe.
All investors, including pension funds, bank owned mutual funds and individual investors have a tremendous opportunity - anticipate and proactively embrace the financial lava, or do nothing and claim ignorance.
We know which action we are taking.
Well, it has happened. IceCap made a significant strategy change to our portfolios – we INCREASED our allocation to equities. Those that know us well, are fully aware of our cautious, meticulous, and OBJECTIVE approach to managing clients’ hard earned wealth.
Those that are just getting to know us, will come to understand, embrace and look forward to hearing, and reading our rationale for our long-term view, and how it reconciles with short-term market fluctuations. Whereas descriptions and announcements of strategy changes will be included in our IceCap Global Outlook, clients benefit from these changes immediately in their portfolios.
When we make a strategy change it is always based upon objective decisions driven by data dependent analysis – we check subjectivity at the door.
One thing we are very proud of here at IceCap is that we have unequivocally demonstrated an ability to change our mind, change our view and most importantly, change our portfolio strategies. In other words – we do not stick our heads in the sand. We never dig in our heels, and it would be absolutely shocking if we ever refused to entertain the thought that maybe our strategy, outlook and perspective is wrong.
Back in 2011, our portfolios held a 20% allocation to gold bullion. The reasons for holding gold were astonishingly clear, and when prices tipped $2000/oz, these reasons seemed even more clear. For those that remember, gold hit the $2000 ceiling and started a sharp, excruciating and painful decline to $1280 levels.
Recognizing trend and technical support levels were broken we quickly sold all of our positions with the last sale at $1648. Even though the fundamental reasons for holding gold had not changed – the technical/market reasons for holding gold had changed.
We share this with you to demonstrate that although all investment managers have long-term views on various markets, many do not have the ability, or the inclination to re-wire their brains and produce independent thoughts to enact significant change. Unfortunately, “same-old-same-old” actually is a very popular investment philosophy. But not at IceCap.
We haven’t been back into gold since. Yet we have a very clear vision as to how the gold re-entry path will look, and until the time when markets guide us in that direction, we’ll sit on the sidelines. During the same time frame (2011-2012) our portfolios were positioned to protect client capital from the potential of a sharp decline in equity markets.
Again, the fundamental reasons for expecting this event to occur were quite strong – and today, many bearish managers continue to shout and scream the same fundamental reasons as to why stocks should collapse. But they haven’t.
Back around that time, our thinking and perspective changed to better understand not why stock markets were avoiding collapse, but instead to understanding why they were going higher.
Now, there is a subtle difference in what we just said. And our approach to solving the riddle was to change our perspective. Instead of beginning with a thesis that all bad things in the world eventually create a crisis, which is then always reflected in a stock market crash – we took a different perspective. And this perspective led us to understand two crucially important things:
- the risks in the world today are not in equity markets – instead they are in sovereign debt markets;
- the reason few have correctly diagnosed this disease, is due to no one in our (limited) lifetime ever having the displeasure of experiencing a crisis in government bond markets.
Put another way, all the bads that we experienced over the past 50 years have always been a result of excess largess from companies and individuals.
And every single time, governments and central banks have come running to the rescue of financial markets.
Which have culminated in the rather odd and peculiar situation the world finds itself in today. One turned upside down by zero and negative interest rates. One pushed offsides by preventing bad banks from going under. And one dominated by 180 degree turns in the political arenas. From our perspective, it is crystal clear that the majority of investors, are completely uneducated towards the current global financial environment.
In some ways, you can’t blame them. After all, for many, their informational world is completely monopolized by domineering media, big banks, and perhaps, most harmful of all – social values which force and expect you to behave, eat, sleep and breath “correctly.”
And this brings us to today and our latest decision to increase equities.
We’ve been very transparent and very consistent with our view that we expect the US Dollar and equities to go higher due primarily to a growing crisis in bond markets. We’ve also been very transparent and very consistent with our view that corrections will occur and unless serious technical support has been broken, we’ll continue with our holdings and strategies.
As an investor, you are well aware that equity markets declined sharply in January 2018 and have largely remained range-bound ever since. In our February 2018 IceCap Global Outlook we wrote that none of our models were indicating a serious downturn was unfolding and it was very likely that the bottom has been reached and if it was confirmed by our research – we would add to our equity positions.
Well, over the last few weeks our models did in fact turn positive which provided us with a green light to do exactly as we indicated – buy more stocks.
As a global investment manager, we absolutely reserve the right (and expectation) to change our views and strategies.
At this point in time, our market view remains completely on track.
This means that anyone who is bearish on stocks, bearish on the US Dollar and believes the bond markets will provide safe footing are about to be hit with a major dose of reality.
A few years ago, I had a conversation that not only caused my head to turn and eyebrows to rise, but it also confirmed my suspicions towards the pension investment industry. And the conversation was with an 8 year old kid.
Me: “How’s your Dad these days?”
Kid: “Great. Did you know he’s a pension lawyer and pension lawyers can charge higher rates than other lawyers.”
Me: “Well, it is a faceless client”
As we know, kids do say the darndest things. And we also know, kids know very little about the pension investment industry.
Hence, when I hear the pronouncement about various vendors being able to charge higher fees to pension funds, it only further affirms the inherent dangers and risks within the pension industry. And it is all due to culture.
Culture is everywhere. It’s in countries. It’s in specific regions of countries. It’s in languages. And it’s in organizations, industries and companies too. As well, culture is never right or wrong – it is what it is.
Yet, recognizing culture and objectively understanding the pros and cons within a culture is absolutely vital to correctly (and objectively) developing a projection of what will happen.
Although many investors do not have significant direct exposure to the pension industry – especially Defined Benefit Pension plans, everyone has indirect exposures as to how these extraordinarily large pools of money are invested.
The best way to understand how and why, you will be affected by the pension industry’s culture, look no further than the “greater fool theory”. The greater fool theory is quite simple – it means the price of something is determined not by its intrinsic value, but rather by the irrational beliefs and expectations of other buyers.
Because we do not live in a risk-free financial world, the moment the pension industry was born, sharp people with sharp pencils and sharp calculators came out of the wood work. After all, when you’re dealing with pension monies, you’re talking about a pool of money that is suppose to last for a very, very long time.
And when you combine a very long time period with a very large number of other moving parts – it has been decided that a very large number of smart people need to be involved to ensure monies are always available to meet retirement payment commitments.
And whenever you have a large group of people bandied together, with the same cause and with the same training and pedigrees – you get group-think, and this is bad, very bad.
This is where culture comes into play. And those who know culture, knows it is extremely difficult to change, move or alter.
And understanding this culture will help you see exactly why the bond market is going to completely blindside the majority of pension plans and turn those happy retirement years into ones of bitter resentment towards those entrusted with keeping everything in-line.
Yes – these are harsh words but they are absolutely needed to be heard, read and then re-heard and re-read. The best way to explain why the culture of the investment industry will prevent itself from seeing beyond its nose, is to understand how it is structured.
To start with, the pension fund is created by an employer for its employees and the employer is either a company or a government entity.
Next, you must completely understand there is always a risk that the pension assets (investments) will not be enough to make all of the promised future pension payments. And, all of this shortfall (deficit) must be made up by the company/government entity.
This is where the risk part comes into play, and this is also where and why all of the consultants, actuaries, pension lawyers, investment committees, trustees and board of directors enter the picture.
As you’ll agree, the future is sometimes tricky to predict – especially when you’re dealing with how long people live, how healthy they remain while living, and financial market returns.
Yet, the number 1 item that affects all of the above is actually NOT that hard to predict – long-term interest rates.
Yes, long-term interest rates directly or indirectly drives all of the above factors including health and longevity (medical research and discoveries are significantly impacted by funding available which in return is affected by long-term rates).
Therefore, simply understanding where long-term rates are going is really the key to solving the looming pension crisis. And as we’ve detailed in our previous IceCap Global Outlook publications, long-term interest rates are on the verge of exploding higher which will create significant losses for everything affected by long-term interest rates – including pension funds.
The reason for this is twofold.
First, practically all pension funds hold anywhere between 15% to 100% of their investment assets in bonds and/or other investments directly affected by interest rates. The vast majority of the professional investment management industry theorizes that the future cannot be predicted.
The investment industry also lectures that stock markets produce higher returns and than bond markets, and stock markets also contain greater risk than bond markets.
And since pension funds are suppose to be professionally and conservatively managed – they will always err on the side of caution and therefore hold a combination of stocks and bonds.
Which presents us with the voila moment!
The preferred mandate for pension funds (as well as the most common strategy for most individual investors) – the balanced fund, or a similar version of the same including life cycle funds, and target dated funds.
The key part here is that the culture of the industry whole-heartedly believes that the future cannot be predicted.
Naturally, there’s a little bit of truths and untruths in this statements. Yes, the future is difficult to predict – especially during a mid-cycle period. No, the future is not difficult to predict – especially during an end-cycle period.
Today, in the land of interest rates – we’ve reached the end of the mother-of-all interest rates cycles.
And because the pension industry is so tightly wound and wrapped-up in its culture, the majority of those fiduciaries are unable to see the future.
It simply isn’t in their genes, and chromosomes and it certainly isn’t reflected in the most important make-up of all – their assumptions for the expected long-term rate of return and the discount rate for liabilities.
Let’s start first with the Rate of Return Assumption. This number is provided to pension funds by actuaries and it is simply a number used to smooth out return expectations over the life of a pension fund.
The error with these numbers is that it is using past performance to predict future performance.
As any investor will tell you – this is the first disclaimer stamped all over any performance data from every investment fund.
But not the pension fund.
The error with this expected return number lies in the assumption used for fixed income returns. As fixed income returns are completely dependent upon the directional movement of long-term interest rates, historical data from the past 36 years has completely skewed the average performance returns for the bond market.
Chart below shows the historical yield of the US 10-year Treasury Bond, which is the proxy for global bond markets.
Put simply, when long-term interests are increasing (red line 1960 to 1982), bond funds are horrible investments.
The opposite is also true. From 1982 to 2018, long-term interest rates (green line) declined, creating the most incredible period ever for bond market returns. And this simple observation, creates another voila moment.
Virtually everyone working within the industry today either worked during this green arrow period or were trained by mentors who worked during this green arrow period. In other words – all everyone has ever known is a period of declining long-term interest rates.
This unintentional happenstance is going to produce a lot of angst.
Today, long-term interest rates are at 3%. Which means, the only way possible for bond strategies to return greater than 3% is for long-term interest rates to remain at 3% or lower forever. We can assure you this will not happen. And anyone who is using bond return estimates greater than 3% will be disappointed.
To demonstrate that there are pension groups that have been blinded by culture, spend a few minutes with the table on the next page. This public data is from one of Canada’s largest private sector pension funds and shows the expected long-term rate of returns. There are several items that jump off the page, with the most significant being:
1) The 55.2% allocation to Nominal Bonds
2) The +3.4% expected return from Nominal Bond strategies
IceCap can assure you that there is zero probability of this pension fund’s nominal bond strategies producing a return +3.4% or greater. In fact, as long-term rates surge higher, the assets in this pension plan will decline -20% or more.
When this occurs, the culture of the pension industry reveals itself with board room whispers and proclamations that “no one saw this coming.”
We are telling you that it is coming.
Read on in the full presentation below (link)
Published:7/16/2018 9:22:27 PM
Greyerz: The Global Reset Will Come Like A Thief In The Night
As the world edges closer to the next crisis, today the man who has become legendary for his predictions on QE and historic moves in currencies, told King World News that the global reset will come like a thief in the night.
Where have all the dollars gone? Long time passing
Where have all the dollars gone? Long time ago
Where have all the dollars gone? Uncle Sam has spent them everyone
When will he ever learn? When will he ever learn?
The Global Reset Is Coming
Egon von Greyerz: “When Pete Seeger wrote the famous song “Where have all the flowers gone” back in 1955, little did he know that the total US debt, which was a few hundred billion dollars at the time, would, 63 years later, be almost $70 trillion.
But there is no reason why Seeger should have known. He was a singer-songwriter and his legacy will last a lot longer than Nixon’s, Greenspan’s, Bernanke’s, and all the other players that have contributed to this massive growth in credit and destruction of the dollar. While Seeger’s song – a work of art – is likely to be around for at least another 50-100 years or longer, all the opportunists that have destroyed the US economy, and thus the world economy, will soon be forgotten...
Egon von Greyerz continues: “It is absolutely unreal how the world pays so much respect to mediocrity or even incompetence when it comes to running the financial system. Central banks and their heads have created this monster balloon which is now waiting to be popped. They have given the world the impression that they have been instrumental in saving the world economy. The central bank chiefs that managed to retire before the balloon burst can count themselves lucky. In my view, the luck is now in the process of running out for the present ones.
These chiefs believe so much in their own ability as saviors of the world that they don’t understand that all they are doing is creating a much bigger monster by printing and printing and printing. They are so arrogant that they can’t even call their actions by an honest name. What they are doing is sheer Money Printing or MP. But instead they call it QE or Quantitative Easing. What an absolutely ridiculous name that is designed to hide their own inadequacies as well as cheating the people. Nobody understands what QE means and that is, of course, deliberate. They simply confuse the people and mislead them into believing that their hocus pocus is actually some alchemistic formula that creates eternal prosperity.
These central bank heads are now so confident of their control of the situation that they are turning the QE to QT (Quantitative Tightening). That is, of course, utter and sheer arrogance. QE hasn’t worked. All it has done is to turn a fragile financial system into the biggest bubble in history. Even with zero or negative interest rates combined with massive MP, real GDP is not growing (measured with real inflation). Also, several dollars, euros or pounds of credit expansion are required in order to create just one dollar, euro, etc, of GDP growth.
Since QE, MP, or whatever you call it, hasn’t worked, why the hell does anyone think that QT will work? This is like taking away the punchbowl from a chronic alcoholic who will die from his drink or die due to lack of drink. And it is exactly the same for the global economy. It will collapse with more QE and and will collapse from QT. So QE / QT = TE (THE END).
“When will they ever learn, when will they ever learn” that you can’t create prosperity by printing money? And remember that money printing is not just what central banks do directly. Money printing also means credit expansion by banks, credit card, and finance companies, etc. All of these lend out 10-50 times the deposits or capital they receive. There is, of course, only one way to learn a lesson properly, which is the hard way. And the hard way in the case of the world economy is that the monster bubble pops. And like with many bubbles, this one only contains hot air.
Thus, the $2.5 quadrillion monster bubble contains just empty promises that all disappear when the bubble is popped. These promises are not only words, but also $2.5 quadrillion of monetary promises or IOUs. To keep the bubble from deflating, central banks have had to constantly pump it up bigger and bigger. So more and more debt will fill the bubble together with inflated assets and even more empty words from bankers and politicians to make it all look plausible.
The debt explosion is not just a US disease. It is a US-led global phenomenon that has infiltrated most nations around with a central bank that can print money. Just look at the chart below illustrating how global debt has tripled since 1999 from $80 trillion to $240 trillion today.
GLOBAL DEBT: The $240 Trillion Nightmare
When the global debt and asset bubble pops, the world will find out that there was nothing inside. Of course, there are real assets and real wealth, but the problem is that when the bubble pops, all the debt will implode because no one can repay it, and with that, a lot of the assets will become worthless.
The only question is if stocks, bonds, property, and other assets, will go down by 75% or 95%. In my view, the biggest bubble in history will lead to the biggest collapse. There is no one that can save the world from the biggest financial calamity in history. MP (QE) will have zero effect except for causing temporary hyperinflation. A lot of assets will decline by 100%, such as money in the bank, bubble companies which are heavily leveraged – like Tesla – and many others. Even very valuable assets will be able to be purchased (in today’s money) for pennies on the dollar, euro or pound.
Paper money has always come and gone throughout history since no fiat currency has ever survived. For 5,000 years gold has represented stable purchasing power and the only money that has lasted for thousands of years. This is why countries that understand the importance of physical gold continue to accumulate, countries such as Russia, China and India. In the meantime, the rest of the world has invested less than 0.5% of world financial assets into physical gold.
Just look at China’s astonishing gold accumulation in the chart below. Another 140 tonnes was purchased in June, taking the total up to 16,000 tonnes with virtually all of it acquired since 2007.
China’s Gold Purchases Since 2007 Exceed 16,000 Tonnes!
Like A Thief In The Night
When the monster, ‘everything’ bubble pops, so will the paper markets in gold, silver, and other precious metals. The size of this market is at least 100-times bigger than the physical market. The rise of this market is very much linked to manipulation of the precious metals by central banks, the Bank for International Settlements (BIS), and bullion banks. When the paper metals markets pop, there will be no gold (or silver) offered at any price. This is the time when overnight or over a weekend the price will go from $1,250 to $10,000 or even $100,000. This might sound totally unreal to some, but this will be the most likely consequence of the monster bubble popping and everyone in markets running for the exit.
Most people believe that the status quo can go on forever and that central banks will continue their ridiculous game of pretending that air is real money that can create wealth. The few people who believe that there is a serious risk that the system will not survive in its present form, and that their assets — be it cash, bonds, or stocks — could decline substantially in value, must seriously consider insurance.
The next decline in financial markets is likely to start in late 2018 or early 2019. And this will not be an ordinary decline or normal correction. Instead, it will be the beginning of the biggest global bear market in history. And this time central banks and governments will fail in their attempts to save the system. They will, however, certainly print a lot of money and try to reduce interest rates. But as global bond markets collapse, rates will go up rapidly. This means that bonds and stocks will both crash along with most assets.
The only real insurance against what is coming is physical gold and some silver, obviously held outside the banking system. There is absolutely no argument against holding precious metals to protect against the risks in the financial system. The only question is, should you hold 10% of your financial assets in gold or more than 50% as some of our wealth preservation clients do? In my opinion, this is the time in history that you need to be fully protected. The reality is that each individual needs to decide for themselves what full protection means. Just remember that this time it will be costly to underinsure. Hopefully no one reading this will ask when it is too late:“When will we ever learn?”
For those who would like to read more of Egon von Greyerz’s fantastic articles CLICK HERE.
Published:7/16/2018 8:53:59 PM
U.S. Stocks Slightly Lower, Weighed Down by Energy Shares
The S&P 500 inched slightly lower Monday as shares of energy companies fell alongside a decline in oil prices and as investors looked ahead to a busy week of corporate earnings results. The broad stock-market index fell 2.88 points, or 0.1%, to 2798.43, while the technology-heavy Nasdaq Composite dropped 20.26 points, or 0.3%, to 7805.72. Energy stocks were by far the weakest of the S&P 500’s 11 sectors, falling 1.2%, on lower oil prices.
Published:7/16/2018 8:22:35 PM
Identical Anti-Kavanaugh Letters Published By Newspapers Across The Country
A series of identical letters signed by different individuals were sent to newspapers across the country in protest of President Trump's Monday nomination of Judge Brett Kavanaugh to the Supreme Court - a technique known as "astroturfing" designed to appear as a genuine grassroots effort against the pick.
In total, 21 newspapers across 12 states printed the identical letters - each signed with a different name, as first noted by the website Liberty Headlines and further investigated by the Daily Mail's David Martosko.
At least one person didn't even know her name was being used to sign the letter.
At least 21 papers were duped last week, including big-market brands like the Dallas Morning News and The Washington Times. They ran identical letters over a four-day period, each signed by a different person.
The effort is an example of public-relations 'astroturfing,' a technique meant to simulate genuine grassroots support for an idea or cause.
The form letter is one small piece of the message minefield erupting around Kavanaugh as he prepares for a brutal confirmation process that will end with scant support from Democrats. -Daily Mail
The letter begins with a declaration that "Brett Kavanaugh is the wrong choice to replace Justice Anthony Kennedy on the Supreme Court. If he is confirmed to the Supreme Court, everything that we hold dear as a nation will be at stake." It goes on to warn that there could be a swing-vote that "takes away our rights" while giving "mega-donors with extreme agendas even more influence in our democracy."
The Washington Times and Colombus Dispatch in Ohio both published the same letter - signed by two different people.
Delaware's largest newspaper - the Wilmington News Journal - was successfully targeted as part of the "astroturfing" scheme:
During the course of their reporting, three of the newspapers contacted by the Daily Mail later removed the letters from their websites. Two of them - the Union Democrat of and Morning News of Sonora, California explained why:
White House Deputy Press Secretary Raj Shah shrugged off the letters when the Daily Mail reached out, writing in an email: "I suppose that’s a clever way to ensure message discipline,' he said, 'but we think most Americans will see through these tactics and be impressed with Judge Kavanaugh’s sterling record and qualifications."
One of the so-called authors of the letter didn't even know her name was being used:
Richard Lodge, editor of The Eagle-Tribune in North Andover, Massachusetts, said Friday after hearing from DailyMail.com that he called the apparent 'signer' of the letter his paper ran, and '[s]he said she didn't send it.'
The woman recalled receiving a phone call from an anti-Kavanaugh activist asking her to sign an online petition against him days before the letter was sent in her name. -Daily Mail
'I got duped, which is embarrassing and frustrating,' said Lodge. Martosko notes that it is standard practice for opinion page editors to call the writers of the letters. He also points out that "astroturfing" - creating the illusion of popular support by littering newspaper opinion pages with fake letters is nothing new.
In 2004 the liberal group MoveOn.org launched a website tool that generated editorial letters for its members promoting the Michael Moore film 'Fahrenheit 911.' All it required was a name, hometown and ZIP code.
The program provided users with sample sentences and a salt-to-taste text editor. Many left the stock message the way it was and clicked 'send.'
The USC Annenberg School for Communication and Journalism's Online Journalism Review reported that the Republican National Committee had the technique down a year earlier.
Using a website called 'GOP Team Leader,' the party offered 'points'– redeemable for merchandise – when their letters were actually published.
Both the George W. Bush and John Kerry campaigns used the technique during the 2004 presidential election cycle. -Daily Mail
National Review Online contributing editor Quin Hillyer told the Daily Mail that the "rather transparent astro-turfing shows that the Leftist intensity against Kavanaugh is not naturally widespread, but instead is manufactured by paid agents."
While it is unclear who exactly those organizations are, the usual suspects on the left have denied involvement - including DemandJustice, Protect Our Care, and MoveOn.org.
'While millions of MoveOn members oppose Brett Kavanaugh‘s nomination, the organization did not generate these letters to the editor,' the spokesman said Sunday after this story was first published.
Who exactly ran the letter (via the Daily Mail)
Large outlets that have run the letter since July 11 include The Washington Times (DC), the Boston Herald (MA), The Columbus Dispatch (OH), the Dallas Morning News (TX) and the San Antonio Express-News (TX).
The Grand Junction Sentinel (CO) was a victim, along with The Wilmington News Journal (DE), the Coeur d'Alene Press (ID), The Forum (Fargo, ND) and the Beaumont Enterprise (TX) .
Smaller newspapers that published the letter included the Santa Monica Daily Press (CA), The Union Democrat (Sonora, CA), the Daily News (Newburyport, MA), The Eagle-Tribune (North Andover, MA), the Daily Hampshire Gazette (Northampton, MA), The Times Herald-Record (Middletown, NY), the Daily Reflector (Greenville, NC), The Express Times (Easton, PA), the Republican Herald (Pottsville, PA), The Herald-Zeitung (Brownsville, TX) and the Martinsville Bulletin (VA).
Published:7/16/2018 8:22:34 PM
Oil's 4 percent tumble weighs on energy shares; banks rally
By Lewis Krauskopf NEW YORK (Reuters) - The price of oil tumbled more than 4 percent on Monday, putting pressure on energy shares and keeping global stock markets in check, although financial shares rallied ...
Published:7/16/2018 7:52:29 PM
The Number One: Need help? Check out the ‘most useful’ accounts on Finance Twitter
Twitter, in general, can feel about as useful as a football bat. Finance Twitter, where the experts and the Wall Street wannabes share, steal and mock each others ideas, perhaps less so. Still, finding the good stuff amid the noise can be a real time-suck. That’s where the must-follow lists come in.
Published:7/16/2018 7:52:29 PM
Haiti: Anti-IMF Unrest Or Anarchic Riots?
Authored by Andrew Korybko via Oriental Review,
Riotous unrest broke out in Haiti after the government suddenly declared that it’s dramatically hiking fuel prices in order to comply with an IMF restructuring demand.
There was an explosion of violence in the Western Hemisphere’s poorest country immediately after the news was announced, with gangs of machete-armed thugs rampaging through the streets, looting business, burning vehicles, and setting up roadblocks.
It’s understandable why people would be upset that gas and diesel prices would jump by 38% and 47% respectively, especially because this would lead to cost increases for pretty much everything else, but the outbreak of instability that this caused surely caught the authorities off guard, which is why they shortly thereafter declared that the decision would be temporarily suspended. Still, this didn’t quell the disorder, and US airlines even cancelled their flights to the country as a security precaution while the State Department ordered its citizens to shelter in place.
Evidently, the Haitian people’s long-brewing discontent with their country’s many socio-economic and political problems might have finally boiled over, with some of them intending to seize the moment in sending the message that they will no longer tolerate their nation being treated as a neo-colonial outpost by transnational corporations and NGOs, though unconstructively not offering any apparent solution to improve their situation.
The crisis is made all the more acute by the state’s inability to forcibly respond to the unrest because it simply lacks the means to do so when considering that the UN withdrew late last year after a decade-long mission and the National Police are utterly incapable of keeping the peace in their place.
Furthermore, the country’s military was dismantled in 1995 and the sitting government has yet to replace it despite controversially pledging to do so.
It’s difficult to predict what comes next, but a few lessons can still be drawn from the latest events. The first is that fragile states such as Haiti are extremely vulnerable to destabilization whenever they’re pressed into so-called “structural reforms” by the IMF, just like Jordan recently was under similar circumstances.
If the chaos isn’t contained, then it could also possibly trigger a limited military intervention by regional states in order to protect their citizens and/or respond to any perceived threats from so-called “Weapons of Mass Migration”, which is a scenario that the US could possibly undertake if the situation doesn’t soon stabilize.
The cycle of underdevelopment, debt bondage, destabilization by dint of so-called “structural reforms”, and military intervention is therefore very difficult for countries to break free from, and Haiti unfortunately has next to no realistic hope to ever do so in the near future.
Published:7/16/2018 7:52:29 PM
Asian shares poised for a subdued open following mixed close on Wall Street; oil falls
U.S. stocks closed mixed in the last session, although financials rose on the back of Bank of America reporting expectation-topping revenue and earnings. Oil prices tumbled more than 4 percent overnight. Minutes from Australia's central bank are expected later in the day.
Published:7/16/2018 7:23:17 PM
IRS To Revoke 362,000 Passports From US Citizens
Authored by Simon Black via SovereignMan.com,
About two and a half years ago, I told you about a particularly nasty piece of legislation that President Obama quietly signed into law towards the end of his administration.
They called it the “FAST Act”, which stood for Fixing America’s Surface Transportation.
Yet despite $300 billion earmarked for infrastructure repairs, they didn’t manage to fix very much of America’s surface transportation.
The legislation did, however, have two major effects:
1) The FAST Act authorized the US government to plunder excess capital from the Federal Reserve… which is about as stupid as thing as anyone could possibly do.
The Federal Reserve is America’s central bank; they control the value and fate of the US dollar… which is still the most dominant currency in the world.
You’d think that having some excess cash on the Federal Reserve’s balance sheet would be viewed as wise and conservative.
But not Congress.
These guys are so broke, they’ll grab every penny they can get. Even from their own central bank.
So they buried a provision into the FAST Act demanding that the Federal Reserve hand over any excess capital to the Treasury Department at the end of every calendar year.
They started doing that almost immediately, in December 2015. And in 2016. And in 2017.
This is one of the reasons why, to this day, the Federal Reserve is borderline insolvent… which hardly inspires confidence.
Now, I could go on for quite some time about what an idiotic idea this was.
But believe it or not, there was an even worse section of the FAST Act– one they only started implementing recently:
2) Section 32101 of the FAST Act required the US State Department to revoke or deny the passport of any taxpayer that the IRS deems to have “seriously delinquent tax debt.”
They define seriously delinquent tax debt as owing $50,000 or more.
Well, it took them a couple of years, but the IRS has finally started enforcing this law.
Earlier this month the IRS acknowledged that they had sent at least 362,000 names to the State Department to start revoking or denying passports.
And that’s just the beginning.
The IRS is sending these names out ‘in batches’, so there will be many more to follow. They hope to be finished by the end of the year.
Now, there are so many things wrong with this.
For starters, it’s pretty clear there’s no due process here. It’s purely an administrative matter. Which means there’s limited oversight.
Your name could accidentally end up on some list because the IRS couldn’t keep its own records straight. Or there was a problem with the data integrity. Or someone simply mismatched one John Smith for another.
The IRS literally has billions of records being managed by antiquated technology that’s prone to data breaches.
The idea that they could come up with a list of hundreds of thousands of people without making a single mistake is just farcical.
But, again, there are few real checks and balances. You end up on a list… at which point you’re arguing with an entirely different agency about why your passport has been revoked. It’s a bureaucratic nightmare.
The larger point, though, is what this really means about citizenship.
Think about it– a passport is the most common document to evidence an individual’s citizenship.
And… poof… they can take it away from you with the click of a button.
To me, if they can take something away so easily, then it wasn’t really yours to begin with.
It’s like property.
If you own your home… think again. Even if you have your mortgage fully paid off, you still have to pay property tax.
This means that it’s ultimately the government who really owns your property. You’re just renting it from them.
And if they believe (in their sole discretion) that you owe them property tax, they’ll take the property away from you.
Likewise, the enforcement of the FAST Act shows that you’re not even really a citizen. You’re just renting your citizenship from the government.
And if they believe (in their sole discretion) that you owe them income tax, they’ll take it away from you.
And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.
Published:7/16/2018 7:23:17 PM
Day Ahead: Top 3 Things to Watch
Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow.
Published:7/16/2018 6:53:45 PM
US Officials Robbed Of Plutonium And Dirty Bomb Materials
We wish we could say this is from The Onion but it's a now viral story that's but the latest representation of extreme government incompetence in handling deadly radioactive materials. Two Department of Energy security officials tasked with transporting deadly substances left plutonium in the back of their Ford Expedition, where it was promptly stolen from a Marriott parking lot in San Antonio.
And over a year later and after what appears to be a ham-handed investigation that was prematurely shut down perhaps for fear of public embarrassment, authorities still have no clue as to the whereabouts of what the government admits are "bomb-usable materials".
An investigative report by the watchdog group, the Center for Public Integrity, details a March 2017 "sensitive mission" by two security experts from the Department of Energy’s Idaho National Laboratory to transport dangerous nuclear materials from a nonprofit lab in San Antionio back to a high-secure government facility in Idaho.
This involved specialized equipment, which the report describes as "a plastic-covered disk of plutonium, a material that can be used to fuel nuclear weapons, and another of cesium, a highly radioactive isotope that could potentially be used in a so-called 'dirty' radioactive bomb."
The moment where the theft is recounted is worth viewing in the original report, given how unbelievable the scenario:
But when they stopped at a Marriott hotel just off Highway 410, in a high-crime neighborhood filled with temp agencies and ranch homes, they left those sensors on the back seat of their rented Ford Expedition. When they awoke the next morning, the window had been smashed and the special valises holding these sensors and nuclear materials had vanished.
More than a year later, state and federal officials don’t know where the plutonium — one of the most valuable and dangerous substances on earth — is. Nor has the cesium been recovered.
Of course none of these embarrassing details were publicized by Department of Energy officials or the FBI, but by government watchdog researchers with the Center for Public Integrity, who were able to piece together the events based on obtaining local police reports which matched a blurb found in an internal Department of Energy memorandum.
San Antonio police, the only law enforcement group to be forthcoming about the details of the case, told the report's authors they were "dumbfounded" that the Idaho lab experts didn't take more precautions in safeguarding the deadly substances. They “should have never left a sensitive instrument like this unattended in a vehicle,” a spokesman for the San Antonio Police Department said.
The lab security "experts" presumably had an immense amount of taxpayer provided resources at their disposal to safeguard the substances, according to the report:
The personnel from Idaho National Laboratory whose gear was stolen were part of the Off-Site Radioactive Source Recovery Program based at Los Alamos National Laboratory in New Mexico, with an annual budget of about $17 million. Overseen by the National Nuclear Security Administration, the program has scooped up more than 38,000 bits of radioactive material loaned to research centers, hospitals and academic institutions since 1999 — averaging 70 such missions a year. No state has returned more borrowed nuclear materials than Texas, where the recovery program has collected 8,566 items.
But apparently they preferred the security of their rented Ford Expedition to safeguard the most valuable and dangerous substances on earth.
When the Idaho lab — one of the many locations across the US where government and military nuclear material is stockpiled — was questioned by investigating San Antonio police about how much plutonium and cesium went missing, a spokesperson responded that "it wasn’t an important or dangerous amount”. And further, no official connected with the incident has indicated just what quantities were actually stolen, but merely downplayed it, saying "there is little or no danger from these sources being in the public domain," according to the Idaho lab spokesperson.
And it appears that FBI joint terrorism taskforce investigators contacted by local detectives may not have ever bothered to show up at the scene of the crime, as San Antonio police spokesman "Ortiz said the department called an FBI liaison to a joint terrorism taskforce, who advised them to take as many fingerprints in the car as possible. But detectives found no useable prints, no worthwhile surveillance video of the crime, and no witnesses. A check of local pawn shops — to see if someone had tried to sell the sensors — turned up nothing."
The police spokesman further said they were told to close the investigation to avoid "chasing a ghost" as the Idaho National Laboratory deemed the missing quantities of material insignificant.
But perhaps most shocking (or not shocking at all, considering this is federal bureaucracy at work) is that it doesn't appear there were any negative repercussions for the two security officials responsible for the loss:
Lab documents state that a month after the incident, one of the specialists charged with safeguarding the equipment in San Antonio was given a “Vision Award” by her colleagues. “Their achievements, and those of their colleagues at the laboratory, are the reasons our fellow citizens look to INL to resolve the nation’s big energy and security challenges,” Mark Peters, the lab director, said in an April 21, 2017, news release.
The specific lab contractor that oversaw the botched San Antonio transfer, Battelle Energy Alliance LLC, was also given formal recognition by the Energy Department, which called their overall performance "excellent". The recognition resulted in increase in bonuses and the extension of their government contract for another 5 years.
Unsurprisingly, similar incidents involving missing radioactive material from government stockpiles or loss during transfer have been on the rise in recent years, though perhaps few as absurd as the San Antonio incident.
The Energy Department’s inspector general concluded in 2009 – the most recent public accounting – that at least a pound of plutonium and 45 pounds of highly-enriched uranium that had gone missing in the prior half-decade (since 2004) "were significant" and could be used by terrorists. The inspector general's report stated, “Considering the potential health risks associated with these materials and the potential for misuse should they fall into the wrong hands, the quantities written off were significant.”
The 2009 report also harshly criticized the Energy Department for neglecting prior internal calls to correct poor accounting procedures which reportedly resulted in other loss incidents. The department still “may be unable to detect lost or stolen material” the inspector general said in its report — something now 100% confirmed in the San Antonio incident.
And who knows how many other incidents have occurred wherein plutonium, uranium, or other radioactive materials were "lost" or "stolen" or "misplaced" that the public will never find out about?
Published:7/16/2018 6:53:45 PM
US And Allies Planning Evacuation Of White Helmets From Syria
Perhaps we are about to witness the final chapter to the controversial White Helmets saga?
As we've detailed many times before both the West and the group's leadership have long claimed it's nothing but a humanitarian non-governmental organization (NGO) devoted to rescuing Syrian's in the midst of war; however, new reports reveal the US and UK are mulling plans to evacuate the group's members who, far from being a "neutral" NGO, are funded by Western governments which have simultaneously sought the ouster of Syrian President Bashar al-Assad.
US government officials say White Helmets members are in "imminent danger" and face the threat of assassination as pro-government forces advance deeper into southwest Syria.
CNN reports the following based on diplomatic sources:
The fate of some 1,000 volunteers and their family members, and the need to plan a possible evacuation for them, has become a focus of discussions of several countries, including the United States, United Kingdom, France and Canada, according to a diplomatic source familiar with the subject and two administration officials.
And CNN reports further that President Trump broached the subject at the NATO summit in Brussels last week:
In the plans under discussion, the volunteer rescue workers, who are officially named the Syrian Civil Defense, would be resettled in several countries; two diplomatic sources mentioned the possibility of resettling some of the group in Canada and the United Kingdom, while another two sources said Germany is expected to take some rescuers.
President Donald Trump discussed the possible need to evacuate members of the group during his meetings at the NATO summit last week, a source confirmed. There were several conversations between the US and UK about the issue during the summit, the source said, adding that Western delegations have convinced the US to help lobby both Israel and Jordan to find escape routes for besieged rescuers.
Among the consistent criticisms leveled at the group has been that its rescuers only operate in al-Qaeda and anti-Assad insurgent held territory — this while being caught on film multiple times bearing arms alongside insurgents and even assisting in al-Qaeda conducted field executions — and the group has received large sums from Western governments even while presenting itself as a homegrown "first-responder" organization.
Yet last June this narrative was again exposed as obviously false as President Trump authorized new funding for the White Helmets to the initial tune of $6.6 million to continue what US officials call "the vital, life-saving operations of the Syrian Civil Defense, more commonly known as the White Helmets."
Soon after the State Department announced the formal resumption of funding, the Syrian Army began a successful offensive to take back Syria's southwest provinces with the help of Russian fighter jets. There's also been a significant uptick in Russian air strikes on al-Qaeda held Idlib province in recent months, which analysts bill as the last significant "opposition-held" territory in the war ravaged country.
Concerning the potential evacuation of White Helmets members, US planners see Russia as a possible obstacle, according to CNN:
Western countries hope to find a way to help the group leave Syria without Russia's aid, the diplomatic source said. They are looking at various possibilities for ground evacuation, but all of them are difficult and negotiations are at a sensitive stage, the source said.
And CBS reports the following statement issued by Trump administration officials:
"We are concerned about the humanitarian situation in the southwest since the Syrian regime and Russia violated the ceasefire,"National Security Council spokesperson Garrett Marquis said in a statement to CBS News' Margaret Brennan."This includes the hundreds of thousands of people fleeing the fighting. Among them are many who fear regime reprisals, including specific groups, such as the White Helmets. We are pushing for Russia and the regime to allow international aid convoys to deliver badly needed assistance to the civilians in the Southwest."
Russian officials have accused the White Helmets of helping al-Qaeda groups stage "chemical attack provocations" — such as the latest April 7th suspected chemical attack in Douma — which Western countries and international media as a matter of course blame on the Assad government.
While evacuation plans are being discussed, it is also possible that the fate of the White Helmets could factor into reported ongoing negotiations between world powers to end the Syrian proxy war.
* * *
The White Helmets are a 3,000 member NGO formally known as the Syrian Civil Defense. Established in "late 2012 - early 2013" after a group of 20 Syrians were trained and organized by former British army officer James Le Mesurier. The group then received funding from Le Mesurier's Netherlands-based non-profit group, Mayday Rescue - which is in turn funded by grants from the Dutch, British, Danish and German governments.
The US has in the past provided at least $32 million to the group - around 1/3 of their total funding - through a USAID scheme orchestrated by the Obama State Department and funneled to the White Helmets using a Washington D.C. contractor participating in USAID's Syria regional program, Chemonics.
According to their website, the White Helmets have been directly funded by Mayday Rescue, and a company called Chemonics, since 2014.
Yet there’s evidence that both of those organizations started supporting the White Helmets back in early 2013, right around the time the White Helmets claim to have formed as self-organized groups.
Mayday Rescue, as we said, is funded by the Dutch, British, Danish and German governments. And Chemonics?
They are a Washington, D.C. based contractor that was awarded $128.5 million in January 2013 to support “a peaceful transition to a democratic and stable Syria” as part of USAID’s Syria regional program. At least $32 million has been given directly to the White Helmets as of February 2018. -TruthInMedia
So the US, Dutch, British, Danish and German governments have been funding the White Helmets, a non-governmental organization, through proxies for over five years.
Published:7/16/2018 6:25:56 PM
May Avoids Defeat By 3 Vote Margin As Even More Brexit Chaos Breaks Loose
Just over a week after Theresa May narrowly survived a revolt by Brexiteers which saw several resignations including that of Brexit minister David Davis and Foreign Minister Boris Johnson, on Monday evening May faced another cabinet rebellion, this time by Tory "remainers", when May barely scraped through Customs Union amendments with a nail-biting margin of just 3 votes, and only after 3 Labor MPs voted with the government. More from the Guardian:
The government majority was reduced to just three votes on the most controversial amendment after leading Tory remainer Anna Soubry complained that the prime minister had lost control of events by making concessions to the rightwing European Research Group of MPs.
The reason for the Remainers ire is that earlier in the day, May unexpectedly had caved in to Brexiters by accepting their amendments to a customs bill to head off a leadership challenge before the summer break. The most important of the four amendments proposed earlier in the day from the hardliner Brexiteer European Research Group of MPs, or ERG chaired by Jacob Rees-Mogg, had been designed to frustrate May’s compromise proposals over customs arrangements agreed at Chequers and had been initially been opposed by the government until Downing Street made a sudden U-turn in the afternoon.
But wait, weren't Brexiteers furious last weekend precisely because May sided with remainers when she presented her controversial white paper? Why, yes, it is: what happened is that in the span of ten days, May went from angering Brexiteers, who threatened to overthrow May, to infuriating remainers, in the hope of placating Brexiteers.
Or as political correspondent Emily Ashton writes, "the government has narrowly avoided a defeat - by three votes! - from Tory Remainers over an amendment that it only backed in order to avoid a defeat from rebel Brexiteers."
And some say US politics is confusing.
In any case, what happened earlier in the day is that Theresa May accepted all four amendments by the Conservatives' European Research Group to today's taxation/customs bill. The amendments were as follows:
- The UK will only collect duties for the EU if Brussels agreed to reciprocal arrangements
- A requirement the UK has a separate VAT regime from the EU
- A requirement that the government tables primary legislation if it wishes to keep the UK in a customs union
- Enshrine in law that there cannot be a customs border down the Irish Sea – a border May has repeatedly ruled out anyway.
The most important of the four amendments from the ERG, chaired by Jacob Rees-Mogg, had been designed to frustrate May’s compromise proposals over customs arrangements agreed at Chequers and had been initially been opposed by the government until Downing Street made a sudden U-turn in the afternoon.
Surprising pundits, May concluded that all four amendments were “consistent with the Brexit white paper”, a decision that so incensed Tory remainers that they vowed to vote against the amendments in Monday night’s Commons debate.
As a result, the Monday night vote barely passed: the ERG customs union amendment barely passed by 305 to 302, with three Labour MPs voting with the government. A second ERG amendment, preventing the UK joining in with the EU’s VAT regime post Brexit, also passed with a 3 vote margin, 303 to 300. But not before another political casualty emerged: junior minister Guto Bebb resigned, rather than support the ERG customs union amendment, and joined the rebellion against the prime minister’s customs plan.
* * *
Going back to the leading Tory remainer, Anna Soubry, she had told the Commons that "The only reason that the government has accepted these amendments is because it is frightened of somewhere in the region of 40 members of parliament - the hard, no deal Brexiteers, who should have been seen off a long time ago and should be seen off."
She asked: “Who is in charge?...is it the prime minister or is it the member for North East Somerset [Jacob Rees-Mogg]”.
For may the flip-flop was strategic, and improved her prospects of making through to the summer break without a leadership challenge. Last night, it emerged that Downing Street had proposed bringing forward the summer recess to Thursday, to reduce the time for Conservative MPs to hold a confidence vote if one were called, although Labour and some Tory MPs indicated they were considering voting against any attempt to impose an early holiday.
A total of 48 MPs have to write letters to the party’s backbench 1922 committee calling for a confidence vote, which is normally organised a couple of days after it is called . May would need to win the support of more than half of the party’s 316 MPs to win it.
Then, on Monday morning, May indicated that it had concerns about this amendment and its impact on the customs plan. But there was a change of mind after Rees-Mogg held talks with the party’s chief whip, Julian Smith.
* * *
So for now, Theresa May has avoided political death, but only by a 3 vote margin.
Meanwhile, Bloomberg reports that as rumors of plots against Theresa May swirl around Westminster, a plan is being drawn up to send members of Parliament away on their summer vacation early.
The House of Commons will hold a vote on Tuesday on a move to break up early for the summer recess, according to a person familiar with the matter. The vacation is due to start on Tuesday 24 July but would begin at the end of business on Thursday 19 instead if lawmakers back the plan.
The reason why May - who is under pressure from both pro and anti-Brexit wings of her Tory party and has suffered a succession of resignations from her government team - is now scrambling to send her Party on vacation It’s far harder for legislators to coordinate their opposition to May if they’re dispersed around the country or the rest of the world on vacation and Parliament is not sitting. An early vacation would certainly give welcome breathing space to the government.
There are even bigger problems facing May: as a result of today's vote, she must now try to persuade the EU to collect U.K. tariffs on goods destined for Britain as part of her Brexit plan.
Meanwhile, as May pivots almost daily to extend her political life, in some cases literally by days, fears are growing that there is now no Brexit deal – not the Chequers plan, nor David Davis’s Canada-style trade deal, nor a no-deal scenario – that could command the backing of a majority of MPs.
In other words, May may still be around but Brexit appears all but dead.
Published:7/16/2018 5:51:07 PM
Netflix stock slammed after earnings, as subscriber growth and revenue fall short
Netflix Inc. posted weaker-than-expected second-quarter revenue and subscriber numbers Monday afternoon, sending its stock into a sharp dive during after-hours trading.
Published:7/16/2018 5:21:37 PM
After the Bell: For the Dow, No Netflix Will Be Good News
The Dow Jones Industrial Average edged higher today. The S&P 500 and the Nasdaq Composite did not. In today's After the Bell, we... •...explain why the Dow outperformed the rest of the major indexes; •...review ...
Published:7/16/2018 5:21:37 PM
Ron Paul Warns When The "Biggest Bubble In History" Bursts, It'll "Cut The Stock Market In Half"
Authored by Michael Snyder via The Economic Collapse blog,
When this bubble finally bursts, will we witness the biggest stock market crash in U.S. history? “The bigger they come, the harder they fall” is a well used phrase, but I think that it is very appropriate in this case. From a low of 6,443.27 on March 6th, 2009, we have seen the Dow nearly quadruple in value since the last financial crisis. It has been a remarkable run, and it has lasted far longer than virtually any of the experts anticipated. But what goes up must come down eventually.
This stock market bubble was almost entirely fueled by easy money from the Federal Reserve, and now that easy money has been cut off. The insiders can see the handwriting on the wall and they are getting out of the market at a pace that we haven’t seen since 2008. Could it be possible that the day of reckoning is finally at our door?
Of course we have been hearing warnings like this for a very long time. In fact, I have been warning about a market crash for a very long time. Just the other day, one of my readers insisted that if something was going to take place that “it would have happened by now”. In the Internet age, we have been trained to have very short attention spans, but financial bubbles don’t care about the length of our attention spans. They all inevitably come to a bitter end, but they don’t reach that end until they are good and ready.
And without a doubt we are on borrowed time, but meanwhile so many of us that are continually warning about what we are facing are getting a lot of heat for it.
There's a bubble building in markets that will burst, Ron Paul says from CNBC.
For instance, when Ron Paul told CNBC that the stock market is “the biggest bubble in the history of mankind”, he was strongly criticized for it, but he was 100 percent correct…
This market is in the “biggest bubble in the history of mankind,” and when it bursts, it could cut the stock market in half, he told CNBC’s “Futures Now” Thursday.
If the Dow only plummets to about 12,000 or so during the coming downturn we will be exceedingly fortunate, because the truth is that stock prices need to fall by at least that much just to get us into the neighborhood where stock prices will start to make sense once again.
Today, sales to stock price ratios are hovering near all-time highs.
The same thing is true for earnings to stock price ratios and GDP to stock price ratios.
The only other times these ratios have been so elevated were just before major stock market crashes.
In the end, these ratios always, always, always return to their long-term averages eventually.
It may take many years, but it always happens.
So what factors led Ron Paul to make such an ominous prognostication? The following comes from CNBC…
“The Congress spending and the Federal Reserve manipulation of monetary policy and interest rates — debt is too big, the current account is in bad shape, foreign debt is bad and it’s not going to change,” he said.
Paul isn’t alone in his critique. A number of politicians have voiced concern over ballooning deficits, including current House Speaker Paul Ryan, who raised a warning on the nation’s debt in 2012.
Of course it isn’t just the U.S. that is drowning in debt.
According to the Institute of International Finance, total global debt just hit a brand new record high of 247 trillion dollars…
Every quarter the Institute of International Finance publishes a new number of the total amount of global debt outstanding, and every quarter the result is the same: a new record high
Today was no exception: according to the IIF’s latest Global Debt Monitor, the amount of debt held in the world rose by the biggest amount in two years during the first quarter of 2018, when it grew by $8 trillion to hit a new all time high of $247 trillion, up from $238 trillion as of Dec. 31, 2017 and up by $30 trillion from the end of 2016.
Global debt has been rising much, much faster than global GDP, and at this point there is three times as much debt in the world as there is money.
There is no possible way that all of that debt can ever be paid off. The only way that the party can continue is for debt to continue growing faster than global GDP, and everyone knows that is simply not sustainable in the long-term.
So an absolutely monumental “adjustment” is coming. You can call it a “crash”, a “collapse” or anything else that you would like, but just as certainly as you are reading this article it is coming.
It is just a matter of time.
But for now, the talking heads on television continue to insist that everything is just fine and that the stock market still has more room to go up…
There’s still room for stock markets to rise and worries of an impending recession are premature, according to Berenberg Capital Markets’ chief economist.
“Even if profits peaked in (the first quarter of) 2018, which remains uncertain, history suggests the stock market has room to appreciate,” Mickey Levy, Berenberg’s chief Americas and Asia economist, said in a client note this week. He pointed to data demonstrating how in every economic expansion since the mid-1970s, the S&P 500 index went on to appreciate for a “significant period” after corporate profits peaked.
I wish that CNBC would have me on just one time so that I could refute some of these guys.
Since 1913, the Federal Reserve has gone through 18 rate hiking cycles. In 18 out of 18 cases, those rate hiking cycles have ended in either a recession or a market crash.
Do you really think that the 19th time will be different?
10 years ago, virtually everyone thought that the “boom times” would last forever too. But they didn’t. Instead, we plunged into the greatest economic and financial crisis since the Great Depression, but at this point 2008 seems like ancient history to most people.
Yet again we have fooled ourselves into thinking that the good times will just continue to keep on rolling, and once again our society will be in for a very rude awakening when the inevitable crash finally arrives.
Published:7/16/2018 5:21:37 PM
The Wall Street Journal: Uber faces federal investigation over alleged gender discrimination
Uber Technologies is being investigated by the U.S. Equal Employment Opportunity Commission over a complaint about gender inequity, say people familiar with the matter, one of a series of federal probes of the ride hailing giant.
Published:7/16/2018 4:52:16 PM
___ Jared Kushner's family firm accused of pushing out tenants Twenty current and former tenants of a New York City building owned by the Kushner Cos. allege it harassed them with construction hazards, ...
Published:7/16/2018 4:52:16 PM
Bourdain: "Piece Of Sh*t" Bill Clinton Is "Entitled, Rapey, Gropey, Grabby, Disgusting"
2 of 33,817 FW: New article - Bourdain on Clinton Inbox x Tyler Durden Attachments 2:19 PM (5 minutes ago) to me From: ZeroPoint Now Sent: Monday, July 16, 2018 1:44 PM To: Tyler Durden Subject: Re: New article - Bourdain on Clinton On Mon, Jul 16, 2018 at 10:41 AM, ZeroPoint Now wrote: Title: Bourdain: "Piece Of Sh*t" Bill Clinton Is "Entitled, Rapey, Gropey, Grabby, Disgusting" Teaser: And wait till you hear what he said about Hillary... 4 Attachments ?@gmail.com>@gmail.com>@gmail.com>
Four months before Anthony Bourdain's June 8 suicide, he sat down with Popula's Maria Bustillos for a wide-ranging interview which was finally published on Sunday. In it, Bourdain excoriates the Clintons, has harsh words for Obama and even calls Richard Branson "kind of a douche."
Asked about whether Bill Clinton should have been removed from office after the Monica Lewinsky scandal, Bourdain said that despite Clinton being "A piece of shit," who was "Entitled, rapey, gropey, grabby, disgusting" should have still kept his job despite "the way that he - and she [referring to Hillary Clinton] destroyed these women and the way that everyone went along" was "screaming in apparent hypocrisy and venality."
How you can on the one hand howl at the moon about all these other predators. And not at least look back. OK, let’s say, well, it was all consensual: powerful men, starstruck women, okay fine, let’s accept it at its most charitable interpretation. Fine. He is a very charming man, I met him, he’s fucking magnetic. -Anthony Bourdain via Popula
Bourdain expounded on Hillary, noting "When you’re in the room, you think wow, she’s really warm and nice and funny. But the way they efficiently dismantled, destroyed, and shamelessly discredited these women for speaking their truth..."
As the Washington Examiner wrote in 2016:
But Mrs. Clinton took a very different approach herself 25 years ago as the wife of then-Gov. Bill Clinton, leading the effort to discredit women who came forward with their own stories of harassment or assault by her husband.
Campaign narratives written by reporters detailed how she honchoed the campaign team that handled “bimbo eruptions,” digging up personal papers and official records that could be used to undercut the stories told by a series of women. One top aide later recounted Mrs. Clinton’s intent to “destroy” the story of one accuser, while former adviser Dick Morris said Mrs. Clinton engaged in “blackmail” to try to force women to recant their stories. -Washington Examiner
Bourdain said Clinton's behavior during those years "is unforgivable," though reiterated that he didn't think Bill Clinton should have been thrown out of office for his behavior.
Bourdain: I don’t think he should’ve been thrown out of office for this.
Bustillos: Why not? We want people who are of excellent character to be in that office.
Bourdain: I think you recognize people for what they are, and you determine for yourself, I’m not voting for that motherfucker ever again! Or anybody who enabled him, you know? This product, okay, I voted for it, it’s in. Is this grounds for pulling someone out of office? I don’t think so.
Bustillos: What if we did have those kind of standards? We want a person who is like, honorable.
Bourdain: I would look at this way. I would never under any circumstances vote for Bill Clinton today. But I think impeaching the guy over Lewinsky was ridiculous. Particularly given today.
It was the shaming, discrediting, undermining the women that made both of them unsuitable for any future endeavors. I don’t think they should’ve pulled him from office. -Popula
On the topic of former President Obama, Bourdain said he found him to be "very unconvincing in public, much of the time. I was always wanting a little more passion, stop halting—the halting, careful speech. In person, absolutely the most gracious, graceful, real, funny, uh, no sense of calculation, honest, I mean, you know. Him I’d vote for fuckin’ again, any time."
Bustillos: Yeah and he like droned people, and bailed out the bankers.
Bourdain: I believe he may not have been the greatest president in history, but he’s one of the fucking nicest, good, one of the best people we ever had.
Bustillos pushed back - having strong opinions after feeling deceived by Obama:
Bustillos: No!! No. He lied. I worked hard for that campaign. I saw and I just believed him and I was like Hope, Change, Yes. I’m like, I’m so happy, we won, you know!
Minute one he started fucking with us. He promised transparency, he like—more whistleblowers were prosecuted than at any time. There’s not one fucking banker in jail. Not one! Jail me one fuckin’ banker! These people stole nine million houses!
Bourdain: There’s that scene in The Wire… see, this is the default position for white guys always, quote The Wire—with, where Mayor Carcetti comes to office, the idealistic young man, and the guy comes in and he says, Mr. Mayor, he’s the shit sandwich. And you’re gonna eat it. The guy before you ate it, the guy before him ate it. This is the reality. This is the real situation. Everybody’s been lying to you up till this minute. I’m about to explain to you the truth of the situation you are now facing and the forces opposing you to get anything done. Now eat the shit sandwich. I don’t wanna eat the shit sandwich! You are going to eat the shit sandwich.
Bustillos: This is the thing! We’re all accepting this. It’s like, as long as we keep—
Bourdain: I’m a firm believer in cynical accommodation of uh, the lessening of—compromising one’s principles for the greater good, to a point. Um, but don’t make a living out of it.
Bustillos: There’s a moment where it’s not okay!
Bourdain: Well, for the Clintons it’s a brand. For Obama I genuinely believe he made regretful but calculated decisions, I’m gonna save my ammunition for this, this fucking—
As for President Obama's photo-op with billionaire Richard Branson right after leaving the White House, Bourdain agreed that it wasn't a good look.
Bustillos: And I loved him, I had loved him, but like… he fucked us. And he got on the fucking jet ski with Richard Branson right after he got out of the White House and I’m like, dude.
Bustillos: Is that really the first look that you want? You are a guy with a brand. You know that you would not do that if it were you.
Bourdain: No, I wouldn’t.
Bustillos: You would not. Why not.
Um. Cause I’m vain.
Bourdain: … and I think Richard Branson is kind of a douche. That’s not who I wanna hang out with. You know… time is short.
I… look. I know Obama wants to move to New York. And I know he likes New York restaurants, and he wants to eat in New York restaurants. And if he’s gonna make a few speeches for big money to do that, I’m ok with that. What’s the problem with that? They’re not buying influence at this point.
On the topic of Harvey Weinstein, Bourdain said "as much as I'd like to see him, you know beaten to death in his cell," that the thought of the disgraced media mogul "in fucking Arizona... eating in restaurants in Arizona" was punishment enough.
And at off the grid restaurants in Arizona, so he can’t even eat at the best sushi restaurant in Scottsdale. He’s gotta go to some shit fucking place. So Arizona, I mean, as much as I’d like to see him, you know beaten to death in his cell—
Bourdain then describes his perfect death scene for Weinstein:
Bustillos: It’s much better to watch horrible people live and suffer the consequences.
Bourdain: My theory of how he goes is uh, he’s brushing his teeth in a bathroom, he’s naked in his famous bathrobe, which is flapping open, he’s holding his cell phone in one hand because you never know who on the Weinstein board has betrayed him recently, and he’s brushing his teeth—he suddenly gets a massive fucking stroke—he stumbles backwards into the bathtub, where he finds himself um, with his robe open feet sticking out of the tub, and in his last moments of consciousness as he scrolls through his contacts list trying to figure out who he can call, who will actually answer the phone.
And he dies that way, knowing that no one will help him and that he is not looking his finest at time of death.
Four months after this interview, Bourdain would take his own life.
Published:7/16/2018 4:52:15 PM
Amazon’s website crashes just as Prime Day 2018 kicks off
Amazon.com Inc.’s site was down late Monday afternoon, interrupting the flow of sales during the e-commerce giant’s 2018 Prime Day.
Published:7/16/2018 4:21:38 PM
Putin Claims U.S. Intelligence Agents Funneled $400 Million To Clinton Campaign
Vladimir Putin made a bombshell claim during Monday's joint press conference with President Trump in Helsinki, Finland, when the Russian President said some $400 million in illegally earned profits was funneled to the Clinton campaign by associates of American-born British financier Bill Browder - at one time the largest foreign portfolio investors in Russia. The scheme involved members of the U.S. intelligence community, said Putin, who he said "accompanied and guided these transactions."
Browder made billions in Russia during the 90's. In December, a Moscow court sentenced Browder in absentia to nine years in prison for tax fraud, while he was also found guilty of tax evasion in a separate 2013 case. Putin accused Browder's associates of illegally earning over than $1.5 billion without paying Russian taxes, before sending $400 million to Clinton.
After offering to allow special counsel Robert Mueller's team to come to Russia for their investigation - as long as there was a reciprocal arrangement for Russian intelligence to investigate in the U.S., Putin said this:
For instance, we can bring up Mr. Browder, in this particular case. Business associates of Mr. Browder have earned over $1.5 billion in Russia and never paid any taxes neither in Russia or the United States and yet the money escaped the country. They were transferred to the United States. They sent [a] huge amount of money, $400,000,000, as a contribution to the campaign of Hillary Clinton. Well that’s their personal case.
It might have been legal, the contribution itself but the way the money was earned was illegal. So we have solid reason to believe that some [US] intelligence officers accompanied and guided these transactions. So we have an interest in questioning them.
We would expect Putin to show some receipts for such bombshell allegations, while President Trump did not challenge the claims.
Who is Bill Browder?
From a report we noted in February by Philip Giraldi of The Strategic Culture Foundation:
Israel Shamir, a keen observer of the American-Russian relationship, and celebrated American journalist Robert Parry both think that one man deserves much of the credit for the new Cold War and that man is William Browder, a hedge fund operator who made his fortune in the corrupt 1990s world of Russian commodities trading.
Browder is also symptomatic of why the United States government is so poorly informed about international developments as he is the source of much of the Congressional “expert testimony” contributing to the current impasse. He has somehow emerged as a trusted source in spite of the fact that he has self-interest in cultivating a certain outcome. Also ignored is his renunciation of American citizenship in 1998, reportedly to avoid taxes. He is now a British citizen.
Browder is notoriously the man behind the 2012 Magnitsky Act, which exploited Congressional willingness to demonize Russia and has done so much to poison relations between Washington and Moscow. The Act sanctioned individual Russian officials, which Moscow has rightly seen as unwarranted interference in the operation of its judicial system.
Browder, a media favorite who self-promotes as “Putin’s enemy #1,” portrays himself as a selfless human rights advocate, but is he? He has used his fortune to threaten lawsuits for anyone who challenges his version of events, effectively silencing many critics. He claims that his accountant Sergei Magnitsky was a crusading "lawyer" who discovered a $230 million tax-fraud scheme that involved the Browder business interest Hermitage Capital but was, in fact, engineered by corrupt Russian police officers who arrested Magnitsky and enabled his death in a Russian jail.
Many have been skeptical of the Browder narrative, suspecting that the fraud was in fact concocted by Browder and his accountant Magnitsky. A Russian court recently supported that alternative narrative, ruling in late December that Browder had deliberately bankrupted his company and engaged in tax evasion. He was sentenced to nine years prison in absentia.
William Browder is again in the news recently in connection with testimony related to Russiagate. On December 16th Senator Diane Feinstein of the Senate Judiciary Committee released the transcript of the testimony provided by Glenn Simpson, founder of Fusion GPS. According to James Carden, Browder was mentioned 50 times, but the repeated citations apparently did not merit inclusion in media coverage of the story by the New York Times, Washington Post and Politico.
Fusion GPS, which was involved in the research producing the Steele Dossier used to discredit Donald Trump, was also retained to provide investigative services relating to a lawsuit in New York City involving a Russian company called Prevezon. As information provided by Browder was the basis of the lawsuit, his company and business practices while in Russia became part of the investigation. Simmons maintained that Browder proved to be somewhat evasive and his accounts of his activities were inconsistent. He claimed never to visit the United States and not own property or do business there, all of which were untrue, to include his ownership through a shell company of a $10 million house in Aspen Colorado. He repeatedly ran away, literally, from attempts to subpoena him so he would have to testify under oath.
Per Simmons, in Russia, Browder used shell companies locally and also worldwide to avoid taxes and conceal ownership, suggesting that he was likely one of many corrupt businessmen operating in what was a wild west business environment.
My question is, “Why was such a man granted credibility and allowed a free run to poison the vitally important US-Russia relationship?” The answer might be follow the money. Israel Shamir reports that Browder was a major contributor to Senator Ben Cardin of Maryland, who was the major force behind the Magnitsky Act.
Published:7/16/2018 4:21:37 PM
How major US stock indexes fared Monday
U.S. stocks slipped Monday as investors bought banks but sold shares of most other types of companies, including health care and technology stocks. Energy companies sank along with oil prices. On Monday: ...
Published:7/16/2018 4:21:37 PM
Outside the Box: Trump’s Supreme Court nominee Kavanaugh should promise to recuse himself from Mueller-probe cases
Justices’ impartiality must never be in question, writes Chris Edelson.
Published:7/16/2018 3:53:52 PM
'Murica: The "Rule-Of-Law-Optional" Nation
Authored by James Howard Kunstler via Kunstler.com,
So, former FBI lawyer Lisa Page declined to testify before a congressional committee because she didn’t feel like it. Apparently we’re now a rule-of-law-optional nation. Until recently, we were merely reality-optional. That was fun, but when officers of the country’s leading law enforcement agency go optional on standard legal procedure, like answering subpoenas, then we’re truly in the land where anything goes (and nothing matters).
After two years of Trump-inspired hysteria, it’s pretty obvious what went on in the bungled Obama-Hillary power handoff of 2016 and afterward: the indictable shenanigans of candidate Hillary and her captive DNC prompted a campaign of agit-prop by the US Intel “community” to gaslight the public with a Russian meddling story that morphed uncontrollably into a crusade to make it impossible for Mr. Trump to govern.
And what’s followed for many months is an equally bungled effort to conceal, deceive, and confuse the issues in the case by Democratic Party partisans still in high places. It was very likely begun with the tacit knowledge of President Obama, though he remained protected by a shield of plausible deniability. And it was carried out by high-ranking officials who turned out to be shockingly unprofessional, and whose activities have been disclosed through an electronic data evidence trail.
Mr. Trump’s visit to confer with Russian President Putin in Helsinki seems to have provoked a kind of last-gasp effort to keep the increasingly idiotic Russian election meddling story alive - with Robert Mueller’s ballyhooed indictment of twelve “Russian intel agents” alleged to have “hacked” emails and computer files of the DNC and Hillary’s campaign chairman John Podesta. The gaping holes in that part of the tale have long been unearthed so I’ll summarize as briefly as possible:
1) the bandwidth required to transfer the files has been proven to be greater than an internet hack might have conceivably managed in the time allowed and points rather to a direct download into a flash drive device.
2) the DNC computer hard drives, said to be the source of the alleged hacking, disappeared while in the custody of the US Intel Community (including the FBI).
3) the authenticity of the purloined emails by Mr. Podesta and others has never been disputed, and they revealed a lot of potentially criminal behavior by them.
4) Mr. Mueller must know he will never get twelve Russian intel agents into a US courtroom, so the entire exercise is a joke and a fraud. In effect, he’s indicted twelve ham sandwiches with Russian dressing.
Tragically, the American public is led to take this ploy seriously by a morally compromised news media, especially CNN and the The New York Times. The latter outfit is so afflicted with a case of the Russian meddling vapors that it ran this laughable headline at the top of its front page yesterday: “Just Sitting Down With Trump, Putin Comes Out Ahead.” Gosh, what’s the message there? Don’t even bother talking to foreign heads of state, especially in the interest of improving relations?
The salient question that persons in authority might ask out-loud is how come so many officers of the Intel Community have not been hauled in front of grand juries to answer for their obviously incriminating behavior. Mr Mueller is perhaps too busy chasing Russian phantoms to draw up a bill of particulars against characters such as former CIA chief (now CNN shill) John Brennan, who apparently orchestrated the early chapters of the Russian meddling ruse, Bruce and Nellie Ohr, who ushered the DNC’s Steele Dossier into the FBI’s warrant machinery, fired FBI Deputy Director Andrew McCabe, who managed the Steele Dossier and its spinoff mischief as an “insurance policy” against Mr. Trump, Peter Strzok, who executed the “insurance policy,” and, of course, Ms. Page, his paramour, who decided that testifying before Congress was beneath her dignity. These and probably many others.
Tragically, also, these matters can only be fully corrected by the very Department of Justice that includes under its management the rogue FBI. Who else can formally and legally bring these cases before grand juries? The DOJ appears intent on preventing that from ever happening. Congress has so far omitted enforcing its subpoenas or using its impeachment power to dislodge obdurate DOJ officials. Mr. Trump, for now apparently, has declined to use his inherent executive powers to clean out this rats nest, say by removing secrecy shields from many of the documents at issue in the DOJ’s possession - most likely because he can’t afford to be seen “meddling” in the tangled proceedings.
The net result of all this subterfuge, inaction, and gaslighting, is the defeat of the rule-of-law generally in American life. This ought to be taken seriously. If it’s asking too much of the system, then the system itself will eventually not be taken seriously, and that will be the end of the republic as we knew it.
Published:7/16/2018 3:53:52 PM
Netflix shares slide over 8% after quarterly results
Netflix shares slide over 8% after quarterly results
Published:7/16/2018 3:21:34 PM
Economic Preview: U.S. economy roars into the fast lane, but some scratches are starting to show
Seen through the rear-view mirror, the U.S. economy looks like a gleaming sedan that just got a car wash and wax job. All shiny looking and new. But what’s really under the hood?
Published:7/16/2018 3:21:33 PM
Netflix Crashes As Subscriber Growth Slows; Cash Burn Soars And Outlook Is Slashed
After three consecutive quarters of massive beats, Netflix stock is tumbling, down over 10% in kneejerk reaction to Q2 earnings, which beat on earnings but missed and revenue, saw fewer than expected subscribers added in the quarter, and projected less than expected new subscribed in the coming quarter..
In Q2, NFLX reported EPS of $0.85, beating expectations of $0.79 but missed modestly on the top line, reporting $3.91BN in revenue, below the $3.94BN expected. Far more concerning, however, was the number of subscribers which missed on both domestic and international:
- Q2 total net streaming additions 5.15MM, a drop from last quarter's 7.41MM, and below the Exp. 6.27 MM
- Q1 domestic net streaming additions 0.67MM; missing badly Wall Street exp. 1.21MM, and the company guidance of 1.20MM
- Q1 international net streaming additions 4.47MM, Wall Street exp. 5.06MM, guidance 5.00MM
Meanwhile, Netflix' Q3 2018 outlook was also weaker than expected, with the company now expecting Q2 net streaming adds of only 5.00 million (0.65 MM in the US and 4.35 MM internationally), a decline from the current quarter's disappointing numbers, and far below the 5.93 million sellside estimate.
NFLX also expects $3.988 billion in Q3 revenue, generating EPS of only 65 cents, the worst quarter in years.
Adding insult to injury, the company returned to its massive cash burning ways, reporting that in Q2 2018 it burned a whopping $559 billion, the highest number in the past year.
Published:7/16/2018 3:21:33 PM
Amazon website crashes as Prime Day 2018 kicks off
Amazon website crashes as Prime Day 2018 kicks off
Published:7/16/2018 2:53:47 PM
Hall-Of-Fame Quarterback's Private-Equity Firm Accused Of Covering Up Fraud
A private equity firm co-founded in 2007 by former San Francisco 49ers quarterback Steve Young has been accused of covering up a massive fraud at one of its portfolio companies. The accusations, which came in the form of a civil suit filed by the acquirer of the firm where the fraud allegedly took place, have prompted the FBI to investigate, potentially placing Young, his partners and his employees in hot water, per the New York Post.
HGGC, where Young is a managing director, purportedly helped falsify test results at Citadel Plastics, according to the lawsuit, which was brought by plastics manufacturer A Schulman, which bought Citadel in 2015 for $800 million.
The PE firm, HGGC (which was formerly known as Huntsman Gay Capital Partners), where Young is a managing director, "falsified test results" at its Citadel Plastics company, according to a lawsuit filed by rival plastic manufacturer A. Schulman, which bought Citadel for $800 million in 2015.
Citadel allegedly had been selling products with the claim that they met Underwriters Laboratories specs, when they did not, according to court testimony.
A civil trial over the alleged fraud started in April, and Judge Travis Laster is expected to rule on the liabilities portion of the suit as early as the end of this month.
Schulman, is seeking damages of up to $275 million. What's worse, federal investigators are probing the alleged fraud. Already, the FBI has issued more than five subpoenas.
Federal investigators are also probing the alleged antics at Lucent Polymers — purchased by HGGC’s Citadel in 2013, court papers reveal. The FBI has issued more than five subpoenas in the matter. Young was not among those subpoenaed — nor is he one of the executives named in the suit, although his PE firm is.
The lawsuit "came back into focus" last week after Young - a hall of fame quarterback - said during an interview that his firm's strengths include its ability to form partnerships with its portfolio companies.
Schulman’s 2016 lawsuit came back into focus last week after Young said in a TV interview that a major ingredient of his PE firm’s recipe for success is forming partnerships with its portfolio companies.
"We’re really attacking the market in an old-school way: We really look for partnership," Young, known for his stand-out years as a San Francisco 49er, told CNBC.
HGGC has denied knowledge of the fraud, arguing that its role has been to provide "financial oversight" of Citadel, as well as "helping with M&A. An executive director at the firm also said he didn't notice any "red flags" when he served as chairman at Citadel.
"I think there is a certain level of arrogance at HGGC that surprises me," said one source close to Schulman, who said Young’s TV appearance caught his attention.
In the court battle, Schulman claims HGGC at least knew about the potential for fraud at Lucent because the PE firm’s Citadel team flagged potential problems with the highly profitable Lucent product lines, according to court filings.
HGGC Executive Director Gary Crittenden, who was also chairman of Citadel, said during court testimony that he did not see any red flags at Lucent when the company was bought - or during the period it owned it.
The trial started in April, and a ruling on whether HGGC is liable for the fraud could be handed down in the coming weeks.
Published:7/16/2018 2:53:46 PM
What NOT to buy on Amazon Prime Day
Amazon’s annual sales promotion definitely offers consumers the chance to save—but not all deals are created equally.
Published:7/16/2018 2:53:46 PM
International oil settles 2 cents shy of correction territory as oil tumbles on demand worries
Oil's international benchmark Monday finished just short of correction territory, underlining a sharp reversal for oil in recent weeks. Based on the most-active contract Brent oil (UK:LCOU8) is down almost 10% from its recent peak hit on May 23 at $79.80 a barrel, and was down more than 4% on the day. The last time the Brent contract closed in correction was March 20, 2018, according to WSJ Market Data Group.
Published:7/16/2018 2:20:18 PM
Judge Orders Temporary Halt To Deportations As Families Are Reunited
San Diego Judge Dana Sabraw has thrown another wrench into the Trump administration's plans for tightening security at the US border by issuing a temporary halt to deportations of families that were separated under the administration's "zero tolerance" policy.
In his ruling, the judge argues that the families need some additional time to consider whether to pursue requests for asylum. It was made in response to a request from the ACLU, which said it was responding to "persistent and increasing rumors...that mass deportations may be carried out imminently and immediately upon reunification," according to the Associated Press.
Sabraw ruled last month that the Trump administration would have 30 days to reunite the youngest children detained under the policy with their parents. The administration just barely finished the reunifications before the deadline, though it said some children could not be reunited with their parents because they had been deported, or for some other reason. The government is now working to reunite some of the older minors with their families.
These same families now must be given at least a week to consult with their children and an advocate or counsel about their chances for asylum.
The American Civil Liberties Union had asked Judge Dana Sabraw to delay deportations a week after reunification. The ACLU said in a court filing that its request is a response to “persistent and increasing rumors … that mass deportations may be carried out imminently and immediately upon reunification.”
The ACLU said parents need a week after being reunified with their children to decide whether to pursue asylum.
The decision "cannot be made until parents not only have had time to fully discuss the ramifications with their children, but also to hear from the child’s advocate or counsel, who can explain to the parent the likelihood of the child ultimately prevailing in his or her own asylum case if left behind in the U.S. (as well as where the child is likely to end up living)," the ACLU says.
DOJ attorney Scott Stewart opposed the delay, but did not address the mass deportation rumors in court, according to the Associated Press. He added that he would respond later in writing. The judge gave the department until next Monday.
The Trump administration had recently taken steps to speed up its vetting procedures to help reunite families more quickly. But Sabraw said he had begun to have second thoughts about the government's motives for speeding up the reunification process, though he later praised Jonathan White of the Office of Refugee Resettlement who said that some of the older children had already been reunited with their families and that "it is our intent to reunify children promptly."
DOJ attorneys assured the judge that the children were being well cared for and offered to have him visit the facilities where they were being housed. But Sabraw argued that "no matter how nice the environment is, it's the act of separation from a parent, particularly with young children, that matters."
On Friday, Sabraw, who has been overseeing the government's reunification efforts, ordered the Trump administration to give legal advocates 12-hours notice of when and where immigrant families would be reunited, an attempt to make the process less chaotic.
Sabraw's latest order was likely intended to show the Trump administration that it can't rush to reunite families only to immediately deport them. Migrant families will now be entitled to spend some time in the US working on their asylum claims, regardless of how quickly parents are reunited with their children.
Published:7/16/2018 2:20:18 PM
New York to probe Kushner Cos. over lawsuit that claims tenant harassment
New York Governor Andrew Cuomo’s office on Monday unveiled an investigation into whether Kushner Cos., the real-estate firm owned by the family of President Donald Trump’s son-in-law and senior adviser Jared Kushner, violated housing laws and regulations by harassing tenants.
Published:7/16/2018 1:53:49 PM
BofA: Excluding FAANG Stocks, The S&P Would Be Negative
Two weeks ago, Goldman made a surprising finding: as of July 1, just one stock alone was responsible for more than a third of the market's YTD performance: Amazon, whose 45% YTD return has contributed to 36% of the S&P 3% total return this year, including dividends. Goldman also calculated that the rest of the Top 10 S&P 500 stocks of 2018 are the who's who of the tech world, and collectively their total return amounted to 122% of the S&P total return in the first half of the year.
And another striking fact: just the Top 4 stocks, Amazon, Microsoft, Apple and Netflix have been responsible for 84% of the S&P upside in 2018 (and yes, these are more or less the stocks David Einhorn is short in his bubble basket, which explains his -19% YTD return).
Now, in a review of first half performance, Bank of America has performed a similar analysis and found that excluding just the five FAANG stocks, the S&P 500 return in H1 would have been -0.7%; Staples (-8.6%) and Telco (-8.4%) were the worst.
FAANGs aside, here are the other notable sector observations about a market whose leadership has rarely been this narrow:
- Only three sectors outperformed in the 1H (Discretionary, Tech and Energy). Meanwhile, Staples and Telecom were the worst-performers in the 1H.
- Energy staged the biggest comeback in 2Q to become the quarter's best-performing sector after turning in among the worst returns in 1Q.
- Industrials and Financials notably underperformed in June, the 2Q, and the 1H while Discretionary and Energy outperformed in all three.
Looking at the entire first half performance, tech predictably was the biggest contributor to the S&P 500's 1H gain, contributing 2.6ppt or 98% of the S&P 500's 2.6% total return.
The broader market did ok: trade tensions, negative headlines, and the slow withdrawal of Fed liquidity contributed to volatility's return in June and earlier in February, but the S&P 500 still ended 2Q +3.4% and the 1H +2.6%, outperforming bonds and gold.
The Russell 2000 led the Russell 1000 by 4.9ppt in the 1H as small caps may have benefitted from expectations of a stronger US economy, a strong USD and the sense that smaller more domestic companies are shielded from trade tensions (where we take issue with this notion). However, mega-caps also did well: the "Nifty 50" largest companies within the S&P 500 beat the "Not-so-nifty 450" in the 2Q and the 1H. Non-US performed worst.
Some additional return details by asset class:
- US stocks outperformed most other asset classes in the 1H, including bonds, cash, and gold.
- Within equities, the US was the only major region to post positive returns, outperforming non-US equities by 6.1ppt in US dollar terms in the 1H.
- Amid concerns over global growth, a stronger dollar and trade, coupled with a strong US economic backdrop, small caps outperformed large caps in the 1H.
- Megacaps also did well: the "Nifty 50" mega-caps within the S&P 500 beat the "Other 450" stocks in 2Q and the 1H.
Performance by quant groups:
- Growth factors were the best-performing group in the 1H (+6.7% on average), leading Momentum/Technical factors (the second best-performing group) by 1.7ppt while Value factors were among the weakest.
- Despite the macro risks, the best way to make money was to stick to the fundamentals and own stocks with the highest Upward Estimate Revisions (+12.4% in the 1H), a Growth factor.
- Low Quality (B or worse) stocks beat High Quality (B+ or better) stocks in June, 2Q and the 1H. But both the lowest and highest quality stocks outperformed the rest of the market in all three periods.
The Russell 1000 Growth Index beat the Russell 1000 Value Index by 9ppt in the 1H, on track to exceed last year's 17ppt spread. Growth factors were the best-performing group in the 1H (+6.7% on avg.), followed by Momentum factors. But Momentum broke down in June, and June saw the 56th worst month out of 60, -1.4 standard deviations from average returns.
What about alpha?
Unfortunately for active managers, BofA notes that while pair-wise correlations remain lows, alpha remained scarce. The average pairwise correlation of S&P 500 stocks rose sharply in 1Q with the increased volatility which typically hurts stock pickers, but quickly came down below its long-term average of 26% in 2Q. However, performance dispersion (long-short alpha) continues to trail its long-term average.
What does this mean for active managers? According to BofA, never has the herding been this profound: since the bank began to track large cap fund holdings in 2008, managers have been increasing their tilts towards expensive, large, low dividend yield and low quality stocks. And today, their respective factor exposure relative to the S&P 500 is near its record level.
This is a risk because as we discussed recently, the threat is that as a result of an adverse surprise, "everyone" would be forced to sell at the same time. As BofA notes, "positioning matters more than fundamentals in the short-term, and this has been especially true around the quarter-end rebalancing. Since 2012, a long-short strategy of selling the 10 most overweight stocks and buying the 10 most underweight stocks by managers over the 15 days post-quarter-end would have yielded an average annualized spread of 90ppt, 15x higher than the average annualized spread of 6ppt over the full 90 days."
Keep an eye on the first FAANG today when Netflix reports after the close.
Published:7/16/2018 1:53:49 PM
Capitol Report: The restaurant scene is hopping — here’s what that tells us about the U.S. economy
When the bar and restaurant scene is hopping, you know the economy must be doing well.
Published:7/16/2018 1:20:55 PM
As Amazon Prime Day hits, CEO Bezos becomes richest person in modern history
As Amazon Prime Day hits, CEO Bezos becomes richest person in modern history
Published:7/16/2018 1:20:55 PM
Forget Football: It's The Market That's "A Game Of Two Halfs"
As the US equity market reaches 'half-time' in the month, 2018's history suggests it's time to sell...
Something odd has happened throughout 2018 - the market has run-up in the first half (on average up 1.62%), and fallen in the second half (on average -1.07%).
Visually, it's hard to ignore...
So is July 'different'?
As they say in the beautiful game, "it's a game of two halves."
Published:7/16/2018 1:20:54 PM
Brent oil at risk of settling in correction territory for the first time since March
Oil's international benchmark Monday afternoon was at risk of settling in correction territory, underlining a stunning reversal for oil in recent weeks. Based on the most-active contract Brent oil (UK:LCOU8) is down at least 10% from its recent peak hit on May 23 at $79.80 a barrel, and was down 4.8% on the day. If the contract closes below $71.82 a barrel, it will have closed at that level for the first time since March 20, 2018, according to WSJ Market Data Group.
Published:7/16/2018 1:20:54 PM
Intraday Update: Dow Flat, Blame 'Paralysis Through Analysis'
Earnings season was not distraction enough for markets to get their groove back. •...are in awe of Faang–Facebook (FB), Amazon.com (AMZN), Apple (AAPL), Netflix (NFLX) and Alphabet (GOOGL)–performance; •...blame Elon Musk's oversharing for Tesla's (TSLA) sputtering stock. The Dow has been flat so far Monday at around 25,020.44. Investors found nothing to write home about, despite a good start to the earnings season.
Published:7/16/2018 12:53:25 PM
Jeff Bezos becomes the richest person in modern history amid Amazon Prime Day kickoff
Jeff Bezos has officially become the richest person in modern history, in inflation-adjusted terms.
Published:7/16/2018 12:53:22 PM
Beware Trade War "Doomsday Prepping" Warns Morgan Stanley
By Ellen Zentner, Morgan Stanley chief US economist, originally published in the NYT.
A protracted, escalating cycle of trade tensions has begun.
In the latest action, the United States has proposed a 10 percent tariff on $200 billion in Chinese goods. This follows a tariff on $50 billion of imports from China. Together, the value of targeted goods amounts to nearly half of all American imports from China last year, and countermeasures by China are expected.
Even if all the proposed actions don’t go into effect, prolonged uncertainty alone can have a measurable impact on economic growth, and we should not underestimate the risks.
Most of the Federal Reserve’s policymakers agree that uncertainty and risks from trade policy have “intensified,” according to the minutes of the Fed’s Federal Open Market Committee meeting in June. Most private-sector economists share this view. While I don’t expect today’s conflict to be as severe as the Smoot-Hawley Tariff Act of 1930, which was meant to protect American workers but instead prolonged the Great Depression, it is unlikely that the global economy will escape these trade disputes unscathed.
Estimating the magnitude of the impact can be tricky. Consider this: Just the threat of trade actions, even if there is no follow-through, is enough to dent business sentiment and investment. Most business decisions are based on a five-year horizon. That means you need to be able to predict what you can charge for your product, and what it will cost to make it. Trade disputes provide a murky lens at best, which most likely delays investment.
Nevertheless, the United States is on track for G.D.P. growth of more than 4 percent in the second quarter, according to my estimates. This may lead some folks to conclude that concerns over trade are overblown.
I caution strongly against that conclusion.
First of all, this growth is taking place against the backdrop of corporate tax cuts, which are expected to lift business spending on capital and equipment. If not for the lingering uncertainty over trade, investment in the United States might have been even stronger.
Second, roughly half of the growth we are seeing now is a result of a side effect of trade tensions — "doomsday prepping." Global companies are stockpiling raw materials, intermediate goods and finished goods before tariffs take effect and raise the prices of those goods. Once the bite of tariffs hits demand, companies will no longer need to build inventories, and this boost to economic growth could end. Such a reversal is not likely to sit well with investors as they witness a potentially sharp slowdown in the second half of the year, and that could affect both stock and bond markets.
Economists who believe tariffs will have only a small impact on growth need to cast a wider net. While the most direct effects will likely come from retaliatory measures that dent American exports, those impacts are just a fraction of what should be considered. Economists also need to consider the indirect effects of tariffs on consumer demand. Of the first $50 billion of announced tariffs, less than 2 percent apply to consumer goods. So the spillover effect on consumer demand — tariffs passed on as higher prices to consumers — should be quite small. But consumer goods represent more than 30 percent of the latest round of tariffs, which affect $200 billion in Chinese goods and could go into effect as soon as September.
Not all industries can pass on the cost of tariffs to the consumer. There are a few other options. Companies can pursue cost-sharing with their trade partners to preserve business on both sides. Or they could choose to absorb higher costs and live with smaller profit margins. Of course, investors don’t take kindly to companies facing margin squeezes. Finally, firms can absorb the tariffs and cut costs elsewhere, but labor is the largest line item, which means layoffs or slower hiring.
Changes in how financial markets respond will also amplify the effects of tariffs. We’ve already seen a good deal of volatility in markets every time there is news about escalating trade tensions. Since the start of the year, financial markets have become increasingly sensitive to the risks of further tensions. As the actual direct effects of each round of tariffs become clear, we should not assume that financial markets will continue to absorb the news smoothly.
I believe this is perhaps the single biggest risk to the global economy: At some point, investors will start to question whether global supply chains can withstand the escalating pressures from multiple rounds of tariffs, and financial markets may start to react in unpredictable ways.
The Fed chairman, Jerome Powell, has acknowledged that businesses are increasingly concerned, but the Fed has not built any negative effects from trade into its outlook “just yet.” Perhaps a sharp slowdown in growth in the second half of the year will convince them it’s time.
Published:7/16/2018 12:53:21 PM
U.S. stocks struggle for direction as earnings, including Netflix, roll in
U.S. stocks are trading largely sideways on Monday, as traders focused on the latest earnings reports and economic data.
Published:7/16/2018 12:23:09 PM
Million-dollar health bills have spiked, and expensive drugs are playing a major role
The number of patients whose medical care cost at least a million dollars over the course of a year rose by nearly 90% between 2014 and 2017, according to a new report conducted by Sun Life.
Published:7/16/2018 12:23:09 PM
Why Nuclear Energy Is Critical For Russia
Authored by Vanand Meliksetian via Oilprice.com,
As the world’s largest natural gas and oil producer and exporter, Russia plays an important role in setting the global geopolitical agenda. The recent agreement with OPEC is evidence of Moscow’s ability to set prices. However, in another field of energy production Russia captures an even more dominant position: nuclear technology.
The Russian nuclear industry is one of the oldest and most mature in the world. After the end of the Second World War and the start of the Cold War, nuclear technology was not only essential for security purposes as a deterrent towards the competing power bloc, but also as a sign of prestige. The first nuclear power plant connected to the grid was opened in 1954 in the USSR. Global nuclear power plant construction in later years was dominated by three countries: France, the U.S., and the Soviet Union.
The demise of communism and the end of the Cold War significantly reduced the development of nuclear technology by the Soviet Union’s successor: the Russian Federation. In 2007 President Putin signed a decree in which a government owned holding company was created to solidify the domestic civil nuclear technology sector. The downward spiral steadily reclined and has turned out to be a resounding success.
The order book of Russia’s state owned Rosatom has steadily increased to $300 billiondollars in recent years. Currently, 34 reactors in 12 countries are under construction while several other states have shown interest. The order book adds up to a global market share of 60% of all nuclear power plants planned or under construction.
(Click to enlarge)
China also hosts an ambitious civil nuclear power sector where the largest number of reactors in a single country is under construction. Beijing’s export-oriented nuclear power technology development, renders risks for Rosatom in the long term. However, despite significant progress made by Chinese developers, Russian reactors remain popular in the Asian country - as illustrated by the recent approval of another four reactors during a state ceremony in Beijing.
Russian civil nuclear technology appeals to a host of customers due to attractive agreements. To many, the power plants will be the first in their history while several locations are in the developing world. In most cases, Russia’s nuclear packages are attractive as Rosatom provides both financing and day-to-day management of the power plants as well as actual construction and the shipping of nuclear fuel. Furthermore, Rosatom offers far greater discounts than its competitors.
Previously, the civil nuclear power sector was dominated by western firms: Areva and Westinghouse (part of Toshiba). The major success of Rosatom abroad coupled with a declining demand for civil nuclear technology in the West, has reduced the flow of revenues for these companies. Westinghouse even filed for bankruptcy, but has been able to reach a deal with its creditors to resolves some of the financial issues.
However, Rosatom - and therefore Moscow - also faces risks. If all plans are executed according to plan, the Russian company will be facing a mountain of nuclear waste, which (in some cases) it is contractually obliged to take care of. Furthermore, the hazardous waste also needs to be protected against theft, with a real threat of terrorists or criminals getting their hands on it.
Moscow’s strong support for national champions in various sectors such as oil and gas (Rosneft and Gazprom), defence (Rosoboronexport), and nuclear energy (Rosatom) is not solely based on financial reward. High profile deals in these crucial sectors also provide the Kremlin diplomatic clout in the countries concerned.
Furthermore, the civil nuclear energy sector is highly sensitive to public perception. Changes in attitude can quickly halt or rollback developments. The multiple methods of electricity production provide alternatives for decision makers in case the nuclear option falls out of grace. The disaster with the plant at Fukushima is the most recent example of the world’s love-hate affair with civil nuclear energy. The meltdown at the Japanese power plant dramatically changed the energy policy of the third and fourth largest economies of the world: Japan and Germany. As a result, demand for LNG and investment in renewable energies has skyrocketed in recent years in these countries.
Although Rosatom’s order book is already impressively full and several potential orders could be concluded in the foreseeable future, unforeseen actions can seriously hamper developments. The high-risk nature of the nuclear energy business renders unique mitigating factors unlike others in the power production business. As the nuclear energy sector is highly dependent on reputation and safety, one mistake or accident could break Rosatom’s winning streak overnight.
Published:7/16/2018 12:23:09 PM
Small-cap stocks will likely continue to gain, driven by these 2 powerful trends
Small-cap stocks will likely continue to gain, driven by these 2 powerful trends
Published:7/16/2018 11:50:12 AM
"Surprised" Trader Returns From Vacation: Do Stocks Really "Believe The Fix Is In"?
Last week's ebullient equity market rally (in China, Europe, and US) after Trump raised the specter of 100s of billions more in trade tariffs left many scratching their heads - especially in light of the collapsed in the yield curve and safe-haven bid for the long-end of the bond market.
As former fund manager and FX trader Richard Breslow notes, after a brief two-week break from the perceived reality of tick-by-tick headline-interpretation:
"Having assiduously read the news and analysis from outlets of record on three different continents, you can imagine my surprise and chagrin in seeing my screens chock-full of asset prices that are either unchanged or 'happier' than when I left."
Years of quantitative easing and sovereign wealth funds picking winners and losers has turned the vigilantes on page one into mere cynics when it comes down to the mundane task of buying and selling.
Do we really think the fix is in? Apparently so. Despite all the uptight people out there, the message, time and time again, is to just go with the flow. It sounds great, but central banks should remember the famous words of General Colin Powell, “If you break it, you own it”.
So if there is no informative value in the traditional risk-on and off trades and everything is ultimately meant to be risk-on, what is worth following for some bigger picture view of investors’ mental state?
Certainly the Treasury yield curve. The 5s/30s spread sitting near 20 basis points is a sign of true skepticism lurking in the weeds of a stock market attempting a retest of all-time highs.
There is nothing innocuous in the inability of duration to command any sort of premium. Nothing else tells a truer story, nor makes the dots more interesting. I for one look forward to Fed Chairman Powell’s testimony later this week. He’ll do fine, I just wish I could be the one asking the questions.
The dollar has had a strong second quarter. It looks like it is running out of steam.
Forget the yen. More broadly speaking, there’s no momentum. I doubt it has anything to do with everyone else gaining escape velocity, nor the possibility that the ECB will take away the punch bowl a year from now by erasing 10 basis points of negative yield. The currency is sitting right on an inflection point. If everything is great, the dollar shouldn’t fail here.
Lastly, at least for today, continue to watch the great Mexican peso rally of the AMLO era.
The 21-long club is now projecting something in a 16-short.
If that happens you can be sure of one thing. It remains business as usual.
However, there is one area of reality in the world, as Breslow notes. Having been away for two weeks, I must say, I’m grateful for the best efforts of Turkey’s President Erdogan.
At least the lira has had the intellectual honesty to cheapen with the story line. Of course, it’s stable today just to play with me. The downgrade was, after all, priced in, I’m told.
Published:7/16/2018 11:50:11 AM
Tax Guy: A tax break that helps parents cover K-12 public school expenses — and other tips on the new tax law
The new tax law expanded one education-related tax break, eliminated another, and left the rest alone.
Published:7/16/2018 11:50:07 AM
London Markets: FTSE 100 logs first loss in 3 sessions as miners, oil stocks decline
U.K. stocks finish in the red Monday, as oil shares were knocked lower and as mining shares struggled after data showed modestly slowing economic growth in China, sending London benchmark lower for the first time in three sessions.
Published:7/16/2018 11:22:48 AM
Stocks now slightly lower as Trump-Putin meeting wraps up in Finland
Stocks now slightly lower as Trump-Putin meeting wraps up in Finland
Published:7/16/2018 11:17:23 AM
CEO of world’s largest asset manager says tariff clash could knock 10% to 15% off the stock market
Larry Fink, CEO of world’s largest asset management firm, BlackRock Inc., says that trade wars pose a looming threat for Wall Street, despite a recent run-up in U.S. equity benchmarks.
Published:7/16/2018 11:17:23 AM
Make Trade Math Great Again, iPhone Example: Globalization In Reverse
Authored by Michael Shedlock via MishTalk,
Trump's trade thesis with China misses the boat. The iPhone provides an excellent starting point for discussion.
Supply Chain Analysis
As trade barriers break up, world-wide supply chains, the real costs are higher prices and fewer choices for consumers says Greg IP, my favorite WSJ author.
Globalization in Reverse
Please consider That Noise You Hear Is the Sound of Globalization Going Into Reverse by Greg Ip. I reordered some paragraphs below.
While globalization is routinely portrayed as bad for U.S. workers, the truth is more subtle. Routine, blue-collar jobs do get outsourced but high-end research, marketing and design work gravitates to the U.S.
Canadian steel uses iron ore from Minnesota, so Mr. Trump’s tariffs hurt both. About 17% of the value of Mexican-made cars exported to the U.S. originated in the U.S., according to Bruegel, a Brussels-based think tank.
Beckett Gas Inc., family-owned manufacturer of components for boilers, furnaces and water heaters, has over the years shifted production from abroad to its Cleveland-area factories. By continuously improving its production process, it has avoided price increases and now sells all over the world.
But that arrangement has been endangered by the 25% tariff on imported steel, the dominant input into Beckett’s products. “There are only foreign competitors to what we do,” Morrison Carter, the company’s chief executive, says. Those competitors now have a 25% cost advantage.
Assembling an iPhone entirely in the U.S. out of American-made components would add up to $100 to its cost, according to a 2016 article in MIT Technology Review. This assumes, of course, Apple successfully relocates its supply chain. When, under pressure from the Obama administration, it began assembling computers in Austin, Texas, it encountered numerous quality-control and workforce headaches.
Of course, supply chains that took years to take shape won’t change location overnight. Businesses still hope the protectionist wave burns itself out, and the logic of globalization reasserts itself. But a growing number are no doubt drawing up backup plans that look a lot like Harley’s.
The Conversation reports We estimate China only makes $8.46 from an iPhone – and that’s why Trump’s trade war is futile.
When an iPhone arrives in the U.S., it is recorded as an import at its factory cost of about $240, which is added to the massive U.S.-China bilateral trade deficit.
IPhone imports look like a big loss to the U.S., at least to the president, who argues that “China has been taking out $500 billion a year out of our country and rebuilding China.” One estimate suggests that imports of the iPhone 7 and 7 Plus contributed $15.7 billionto last year’s trade deficit with China.
But, as our research on the breakdown of an iPhone’s costs show, this number does not reflect the reality of how much value China actually gets from its iPhone exports – or from many of the brand-name electronics goods it ships to the U.S. and elsewhere. Thanks to the globe-spanning supply chains that run through China, trade deficits in the modern economy are not always what they seem.
China's Biggest Exports
Who Really Makes the iPhone?
Start with the most valuable components that make up an iPhone: the touch screen display, memory chips, microprocessors and so on. They come from a mix of U.S., Japanese, Korean and Taiwanese companies, such as Intel, Sony, Samsung and Foxconn. Almost none of them are manufactured in China. Apple buys the components and has them shipped to China; then they leave China inside an iPhone.
So what about all of those famous factories in China with millions of workers making iPhones? The companies that own those factories, including Foxconn, are all based in Taiwan. Of the factory-cost estimate of $237.45 from IHS Markit at the time the iPhone 7 was released in late 2016, we calculate that all that’s earned in China is about $8.46, or 3.6 percent of the total. That includes a battery supplied by a Chinese company and the labor used for assembly.
The other $228.99 goes elsewhere.
That's it. Of the $237.45 attributed to China as an import, China gets $8.46. The result is US imports from China are overstated by $15- to $16-billion on the iPhone alone.
The Conversation concludes:
Trump’s trade war is based on a simplistic understanding of the trade balance. Expanding tariffs to more and more goods will weigh on U.S. consumers, workers and businesses. And there’s no guarantee that the final outcome will be good when the dispute ends.
This is a war that should never have been started.
Trade and Supply Chain Math
Trump understands neither trade nor supply chain math.
The US is a huge beneficiary of China's role in assembling the iPhone. As per Greg Ip's article, the US benefits greatly from auto manufacturing in Mexico.
Trade Math Gone Haywire
In Trump Reverses Course, Promises "Great Trade Deal" With UK I posted this amusing chart.
The US and and UK both claim to have a trade surplus with each other. Of course, that is impossible. And it highlights how silly these discussions are. I offered this "perfect solution".
Change the methodology such that trade surpluses and deficits cease to exist anywhere. If anyone can do that, Trump surely can.
My sarcastic comment aside, Trump's trade math is wrong on numerous fronts. Yet, even if corrected, the US will still have a deficit.
Make Trade Math Great Again
As I suggested, let's revise the math to make it work, declare victory, and praise Trump for his brilliance (which is all his ego demands anyway). Then we can stop the trade war madness.
Make trade math great again. That's all it takes.
Published:7/16/2018 11:17:23 AM
Trump Today: Trump Today: President says Putin denial of election interference was ‘powerful’
At a joint press conference, President Donald Trump on Monday said he believed the “incredibly powerful” denial of election interference by Russian President Vladimir Putin as he raised doubts about the findings from U.S. intelligence.
Published:7/16/2018 11:17:23 AM
Putin says Cold War 'a thing of the past' as he calls for extending missile pact
Putin says Cold War 'a thing of the past' as he calls for extending missile pact
Published:7/16/2018 10:52:49 AM
Currencies: Dollar wavers as Trump and Putin meet
The U.S. dollar moved lower against its major rival currencies in choppy action on Monday, as traders erred on the side of caution ahead of a closely watched summit between U.S. President Donald Trump and Russian President Vladimir Putin.
Published:7/16/2018 10:52:49 AM
Amazon's European Workers Strike On "Prime Day" As Bezos' Net Worth Tops $150 Billion
Three months after Jeff Bezos was booed by disgruntled Amazon employees in Germany demanding higher pay and better working conditions, Amazon's European workers are boycotting the company ahead of Amazon's global "Prime Day" to highlight the poor conditions that fulfillment-center staff have endured for years.
On Monday, a growing number of online workers, but also gamers, and shoppers planned to boycott Amazon over its treatment of low-level workers, who have criticized the company's tough working conditions on multiple occasions Forbes reported. To get the company's attention on these issues, organizers hope their boycott will make a dent in Amazon's bottom line on July 16, 2018, better known as Amazon's "Prime Day", one of the retail-and-technology giant's busiest sales days of the year.
This will hardly come as a surprise: after all, most of the roughly half-million blue-collar, part-time employees at Amazon don’t make six figures while spending their workdays writing code, and instead unload trucks, drive forklifts and walk miles collecting products to fill orders—all for around the same pay as workers in other companies’ warehouses. Due to their menial, repetitive task, they are also rapidly being replaced by robots.
Last Tuesday, Amazon workers in Spain launched a general strike that is expected to last through Monday. Workers at other European Amazon facilities have reportedly joined the walk-out, including groups in Italy, France, England, Germany, and Poland, with a German labor union confirming its members with Amazon will strike on Prime day.
To be sure, this won't be the first time the online retailing giant's European workers have express displeasure: in the past several years, workers at Amazon fulfillment centers have repeatedly protested against the company's long hours, tough working conditions, and high-pressure "rush" periods, as around Prime Day and Black Friday.
In 2017, Amazon workers in Germany and Italy staged a strike to coincide with Black Friday, when they say short-term workers are forced to work long, grueling shifts without adequate compensation or conditions, among other complaints.
Amazon workers in the U.S. have also reported brutal working conditions in recent years, including the need to endure high temperatures, spend unpaid time in security lines, and even skip bathroom breaks, although have been far less enthusiastic to pursue actual work strikes, perhaps due to the fear of being promptly replaced.
In response to the protesters' latest round of complaints against the company, an Amazon spokesperson told the Observer, ”We don’t recognize these allegations as an accurate portrayal of activities in our buildings."
What is interested is that this time, unlike previous similar strikes, the idea of boycotting Amazon on Prime Day and beyond has been gathering significant steam online. According to the Daily Dot, "The #AmazonStrike hashtag on Twitter, and numerous posts on Tumblr, have led the charge among internet users who are supporting employees who have held strikes against the retail giant in the past."
A number of gamers and journalists are also expected to participate in Monday's boycott, which calls for supporters to avoid using or visiting any of Amazon's services or sites, from shopping to streaming.
Paradoxically, that show of solidarity also includes the popular live-streaming video platform Twitch which Amazon acquired in 2014. GameRevolution reported that some journalists and gamers plan to boycott the platform on Monday "in solidarity with the striking Amazon workers."
Austin Walker, editor-in-chief of Waypoint, Vice Media's gaming division, commented on Twitter, “Some folks put the news about a transnational Amazon strike in front of us yesterday, glad to hear about it. As a heads up, we’ll be skipping our stream on Prime Day (the 16th) in solidarity.”
As Forbes adds, Amazon founder Jeff Bezos and the world's richest man, has been the target of criticism for years regarding his business practices at Amazon and other ventures, from workers as well as the media, and even - in some cases - from both. Last year, a WaPo reporter - which is owned by Bezos - wrote an op-ed for the Huffington Post about how fair pay for Amazon workers -- not high-profile philanthropy -- should be the primary goodwill strategy for Bezos, his boss.
WashPo staff reporter Fredrick Kunkle explained last September,
Amazon’s history of dodging taxes, its mistreatment of workers, and its ruthlessness toward even the smallest competitors have been well documented. It put ambulances outside distribution centers rather than install adequate air conditioning. It broke up a union organizing effort by closing the call center and dismissing everyone who worked there. The New York Times documented its punishing work environment in a front-page exposé. The company’s actions, as Forbes put it, hark back to an earlier time when workers were treated as 'replaceable cogs in the machine.'
What happened next? Within days, the Post had disciplined Kunkle, which his union argued may have been illegal.
Nonetheless, Kunkle had some good observations:
Bezos should remember that his vast wealth came in part from labor, and he should do more to share that wealth with workers. As the owner of an institution that’s critical to democracy, he should go out of his way to set a tone of progressive stewardship toward employees in all his businesses.
Instead, Bezos has shown that he views his employees as parts in a high-tech machine, that income inequality is someone else’s problem, and that modern corporations owe little more to their employees than a paycheck.
Well, he is right, and it is a very successful machine, because moments ago Bezos net worth just topped $150 Billion. According to Bloomberg, Bezos has now topped Gates in inflation-adjusted terms.
The $100 billion mark that Gates hit briefly in 1999 at the height of the dot-com boom would be worth about $149 billion in today’s dollars. That makes the Amazon chief executive officer richer than anyone else on earth since at least 1982, when Forbes published its inaugural wealth ranking.
Published:7/16/2018 10:52:48 AM
Stocks Slide After US Launches WTO Challenge Against 5 Nations
The United States has launched five separate complaints at the World Trade Organization against Canada, China, the European Union, Mexico and Turkey, in response to retaliatory tariffs those countries and groups have launched against American products.
The potential escalation of tensions appears to be weighing on stocks...
Trannies are underperforming...
As CBC reports, the United States Trade Representative Robert Lighthizer said in a statement Monday that recent tariffs implemented by the U.S. on foreign steel and aluminum are "justified under international agreements," but retaliatory measures from other countries in response are not.
"Instead of working with us to address a common problem, some of our trading partners have elected to respond with retaliatory tariffs designed to punish American workers, farmers and companies," Lighthizer said.
The dollar is bouncing on the news...
Published:7/16/2018 10:20:21 AM
Did Oil Help the S&P 500 Index Close above 2,800?
On July 6–13, US equity indexes had a positive performance. On July 13, the S&P 500 Index closed above 2,800—the first time since February 1.
Published:7/16/2018 10:20:21 AM
Trump, Putin make public remarks after 1-on-1 meeting in Helsinki: Watch live
Trump, Putin make public remarks after 1-on-1 meeting in Helsinki: Watch live
Published:7/16/2018 10:20:21 AM
Futures Movers: Oil price drops on talk of possible release of global crude reserves, slowdown in economic growth
Oil prices drop on Monday, with talk of a possible release from global crude reserves and data from the International Monetary Fund showing a slowdown in global economic growth pushing prices for global benchmark Brent crude toward their lowest finish in about three months.
Published:7/16/2018 10:20:20 AM
CryptoWatch: Bitcoin adds 4% as BlackRock reportedly mulling crypto venture
Bitcoin has begun the week on the front foot, climbing as much as 4% after reports hit saying the world’s largest asset manager is considering a push into the digital currency market.
Published:7/16/2018 9:49:46 AM
EU's Tusk Warns Trump Trade Wars "Often" Turn Into Real Wars
Just before President Trump was set to hold his first ever official summit with Russian president Putin, the EU and China sat down for their own "pro-trade" meeting, during which European Council President Donald Tusk urged Trump, Putin - and China - to work with Europe to avoid trade wars and prevent conflict and chaos.
Speaking before Trump and Putin were due to meet in Helsinki, Tusk appealed for leaders to avoid wrecking a political and "economic order that nurtured a peaceful Europe and developing China", according to AP.
Tusk held a news conference with China's Premier Li Keqiang, following an annual EU-Chinese economic summit also attended by the president of the European Commission, Jean-Claude Juncker. They met amid mounting acrimony over Trump's tariff hikes on goods from China, Europe and other trading partners.
And in a startling warning, the former Polish prime minister went on to make the clearest warning yet that trade wars can turn into hot wars: "It is the common duty of Europe and China, America and Russia, not to destroy this order but to improve it, not to start trade wars which turn into hot conflict so often in our history."
Quoted by AP, Tusk then appealed to governments to "bravely and responsibly" reform the World Trade Organization by updating its rules to address technology policy and state-owned industries, areas in which Beijing has conflicts with its trading partners including Europe. Trump has repeatedly criticized the WTO as outdated and has gone outside the body to impose import controls, prompting warnings he was undermining the global system.
"There is still time to prevent conflict and chaos," said Tusk. "Today, we are facing a dilemma — whether to play a tough game such as tariff wars and conflict in places like Ukraine and Syria, or to look for common solutions based on fair rules."
Tusk's statement follows a similar warning from last week, when the Polish bureaucrat slammed Trump's criticism of European allies and urged him to remember who his friends are when he met Putin. Trump enraged and strained relations with Europe after he imposed tariff hikes on steel and aluminum from the EU as well as Canada and Mexico. The European trade bloc responded with import taxes on $3.25 billion of U.S. goods.
* * *
Meanwhile, China's premier Li - speaking in his new and delightfully ironic role as defender of the global free trade system - said China and the EU agreed to take steps to "safeguard free trade" and the global multilateral regulatory system. Which is ironic as China has some of the most draconian protectionist measures of any nation today.
"Given the complicated and fluid international landscape, it is important for China and the EU to uphold multilateralism," said Li.
Even more ironically, Beijing tried, and failed, earlier this month to recruit European support in its dispute with Washington, when Europe flatly turned down Beijing's offer for a Grand Alliance against the US. European leaders have criticized Trump's tactics but share U.S. criticism of China's industrial policy and market barriers.
In other words, EU admits that Trump is right, just disagrees with his unique... presentation style.
Asked whether China used Monday's meeting to try to form an alliance with the EU against Washington, Li said the dispute was a bilateral matter for Beijing and the United States to solve.
"Our summit is not directed at any third party," Li lied.
Meanwhile here is the truth: according to an EU report last month, Beijing imposed more new import and investment barriers in 2017 than any other government, making a mockery of China's grand pretense to be some grand defender of "free markets."
Chinese leaders have tried to defuse foreign pressure by promising foreign companies better treatment without changing their industrial development strategies. Translation: China will be delighted to steal the IT and process of any company that begins production in China, something which Tesla is currently considering.
On Monday, reporters were invited to watch part of a meeting between Li, the premier, and executives of European companies including Airbus and BMW AG in an apparent show of openness.
Li assured the companies Beijing would protect patents and copyrights. When a BMW executive said joint a German-Chinese agreement this month to cooperate in developing intelligent vehicles would benefit from the early release of standards by Beijing for the technology, Li asked whether he was concerned joint formulation of those standards would undermine his company's intellectual property. The executive said no.
"I want to hear if any big company here would like to make a complaint here on the theft of intellectual property," said the premier. "I don't know where my measure should target at if you don't let me know."
And while none of the executives raised concerns about intellectual property during the portion of the meeting reporters were allowed to see, that was the only thing on everyone's minds and yet when Trump voices that concern in a less than diplomatic manner, he is slammed by all sides.
Published:7/16/2018 9:49:46 AM
Tesla Shares Slide After Musk Twitter Meltdown, Rising Demand Fears
Are the wheels, so to speak, finally coming off the Tesla investment case?
After a dramatic Sunday, in which Elon Musk unleashed a bitter tirade at the Thai rescue chief Vern Unsworth, calling him a pedophile in a now deleted tweet...
... after his rescue effort was criticized, Tesla stock is down 3% in early trading as investors show growing concerns at Musk's increasingly erratic public behavior.
Musk's latest outburst follows a warning last week from one of Tesla's top investors who urged the company to keep its head down and focus on performance: "We are very supportive, but we would like peace and execution at this stage," said James Anderson, partner and portfolio manager at Baillie Gifford & Co., Tesla’s fourth-largest shareholder, said on July 11 in a Bloomberg Television interview.
Adding to investor worries are unconfirmed reports that the Tesla's Model 3 configuration page is down.
Musk also sparked outrage on Saturday after it was revealed that he was a prominent donor to a GOP PAC whose purpose is to keep the Republicans in power and which resulted in a furious backlash from liberals, many vowing to cancel their car orders or even return cars they currently have.
Another final emerging concern is a weekend report that T Rowe Price, currently the second largest holder of TSLA, has significantly trimmed its holdings of the stock.
Published:7/16/2018 9:21:00 AM
Amazon stock rallies toward 4th straight record high ahead of Prime Day kickoff
Amazon stock rallies toward 4th straight record high ahead of Prime Day kickoff
Published:7/16/2018 9:21:00 AM
Stocks are mixed as banks move higher and oil prices slump
U.S. stocks are mixed Monday morning as banks rise along with interest rates but energy companies sink along with the price of oil. Stocks finished at five-month highs last week as investors remained optimistic about the U.S. economy even as they worried about the trade war between the U.S. and China as well as other tensions. BANK ON IT: Bank of America's second-quarter profits jumped 33 percent.
Published:7/16/2018 9:21:00 AM
The stock market is due for a pullback in the next week
There are two bullish paths to follow, says Avi Gilburt.
Published:7/16/2018 9:21:00 AM
U.S. stocks open slightly higher as market keeps wary eye on Trump-Putin summit
U.S. stocks open slightly higher as market keeps wary eye on Trump-Putin summit
Published:7/16/2018 8:48:56 AM
The Moneyist: My grandmother and uncle destroyed my late grandfather’s will—and put the wrong date on his headstone
This woman says her grandmother and uncle are conspiring to exclude other children from inheriting a dime.
Published:7/16/2018 8:48:55 AM
Goldman Expected To Officially Name David Solomon Next CEO
The time has finally come for longtime Goldman Sachs CEO Lloyd Blankfein to stop doing "God's work" and turn the management of the storied investment bank over to one of his lieutenants. According to the New York Times, Goldman is expected to officially name David Solomon as Blankfein's successor as soon as Monday,months after the bank said Solomon would take over as the sole president of Goldman, effectively positioning him to be next in line to the throne.
Blankfein is expected to stay on "for an interim period" that will last at least until the end of the year. While Solomon's status as CEO heir apparent was more or less confirmed earlier this year, the official announcement of his succession wasn't expected until the fall. It wasn't immediately clear what had prompted Goldman, which is set to release its second-quarter earnings on Tuesday, to formalize its succession plan so early.
According to NYT, 63-year-old Blankfein, who once joked that he would "die at his desk", has led the firm through radical changes and periods of tumult including the 2008 financial crisis and the reshaping of the bank's business. Solomon joined Goldman as a partner in 1999 after a lengthy career at Bear Stearns, where he helped run the bank's junk bonds business.
Mr. Solomon is a longtime investment banker who spent his formative years as a manager at Bear Stearns, where he helped run the bank’s junk bonds division. He joined Goldman as a partner in 1999 to work with its leveraged finance team and in 2006 he was named co-head of its investment bank. He held that job for the next decade before being named co-president of Goldman late in 2016. A little over a year later, he was named sole president and, with that, became the likely successor to Mr. Blankfein.
Mr. Solomon has said that priorities for the firm include working toward gender parity among its employees and improving the coordination between different divisions that serve the same clients. He has also been a big proponent of the firm’s nascent push into consumer banking, Goldman officials say.
Mr. Solomon, who works on strategy and deals with top executives at companies like Walt Disney Company, Uber and 3M, comes from one of the firm’s mainstay divisions. But his personal interests, which include a side gig as an electronic dance music D.J., would make him an unconventional bank chief executive.
Maybe Blankfein is rushing his departure because central banks have continued with their "buying up all the risky assets," though volatility has returned to the market this year, a development that should help pad the bank's profits and help Blankfein leave on a high note.
Published:7/16/2018 8:48:55 AM
Markets Right Now: Banks lead US stocks slightly higher
The latest on developments in financial markets (all times local): 9:35 a.m. Stocks are opening slightly higher on Wall Street, led by banks and retailers, adding the market's gains over the past two weeks. ...
Published:7/16/2018 8:48:55 AM
Canada’s biggest clothing store has pulled Ivanka Trump’s brand from its shelves
Hudson's Bay Co. says it will stop selling her products in its 90 brick-and-mortar stores across the country and on its website, citing the brand's "performance."
Published:7/16/2018 8:20:17 AM
"The Best Is Behind Us": How A $139 Billion Fund Is Preparing For The Worst
While equities continue to take the risk of escalating trade wars in stride, ignoring the threat of an additional $200BN in tariffs on Chinese exports and pushing the S&P back above 2800, some investors are taking a far more cautious approach: instead of piling into tech names - the most popular trade of 2018 bar none - Australian investment manager AMP Capital Investors, which manages $139BN, is instead buying ultra-long bonds as a hedge for a worst case scenario, according to Ilan Dekell, the head of macro for global fixed income at the asset manager.
"Six weeks ago, we started increasing our duration in the 30-year part of the curve,” Dekell told Bloomberg in an interview in Sydney. “It gives us a bit of protection. I can’t forecast the trade war."
Doing the opposite of Horseman Capital, AMP Capital is also betting on continued dollar strength by shorting a basket of emerging-market currencies which have been pounded in recent months amid tightening global liquidity.
Looking ahead, Dekell said that "the best is probably behind us," referencing the environment of synchronized and rising global growth and benign inflation seen earlier this year, which have since seen the US emerge as the leading dynamo of global growth largely on the back of Trump's fiscal stimulus. And then there is the great unknown of what Trump may do or tweet at any moment: "The trade war adds to our concerns - our book overall is very conservative."
While betting on lower long-term yields, the fund is also shorting two-year government notes, betting the ongoing yield curve steepening will continue as it sees the Federal Reserve raising interest rates two more times this year and thrice in 2019.
“We held our shorts in the two-year part of the curve” because of the rate hikes, said Dekell. “We’ve become more concerned and conservative about tightening conditions and we think the policy bias is higher."
As the latest CFTC data reveals, the AMP position is against the market grain, with specs putting on record bets that the curve will steepen in the near future, as 2Y shorts have shrunk even as 10Y net spec shorts remain at record levels.
Dekell also has a negative outlook on emerging markets, seeing further weakness in EM assets, particularly in countries with current-account deficits such as Indonesia and India. Looking at the Australian dollar, Dekell said the currency is currently trading at “fair value" after predicting earlier in the year that the AUD would fall to 73 U.S. cents before the end of the year. "If you go down the route of trade wars and people getting concerned about China growth, then that would put downward pressure on the Aussie."
AMP Capital is not alone to seek refuge from the coming storm in 30Y bonds: as Bloomberg notes, the same strategy is being used by Goldman Sachs Asset Management and QIC, while PIMCO previously said that it would seek a Treasury safe haven “if things get worse."
The 30Y Tsy was yielding 2.93%, down from 3.26% mid-May, when it hit the highest level since September 2014. Recently, Morgan Stanley went so far as to call the peak in the 10-year yields amid trade concerns with the number of stories referencing "trade war" closely following the price on the 30Y Tsy.
Meanwhile the broader market remains overwhelmingly short the 30Y, with non-commercial net spec shorts targeting the Ultra bond in record amounts, providing continued ammo for a material short squeeze if economic growth in the US or globally were to take a leg lower, an outcome that is quite possible should the global trade wars accelerate .
Published:7/16/2018 8:20:15 AM
Metals Stocks: Gold claws up from lowest levels in a year as dollar index slips
Gold prices on Monday tried to scratch their way up from the lowest levels in nearly a year as the dollar index slipped into the red.
Published:7/16/2018 8:20:15 AM
Wall Street set to open flat as weak oil prices offset earnings enthusiasm
Brent crude prices tumbled 2.9 percent as concerns about supply disruptions eased and Libyan ports reopened, while traders eyed potential supply increases by Russia and other oil producers. Energy companies also led the losses on the S&P 500 stocks premarket, led by Concho Resources' 2.4 percent drop. Shares of Bank of America rose 0.7 percent after the second-largest U.S. lender's quarterly profit beat analysts expectations on lower expenses and growth in loans and deposits.
Published:7/16/2018 8:20:15 AM
U.S. retail sales climb again in June after mammoth gain in May
U.S. retail sales climb again in June after mammoth gain in May
Published:7/16/2018 7:49:31 AM
Empire State manufacturing index edges down in July from eight-month high
The Empire State manufacturing index fell 2.4 points in July to a reading of 22.6, the New York Fed said Monday.
Published:7/16/2018 7:49:31 AM
Economic Report: U.S. retail sales climb again in June after jumbo gain in May
Sales at retailers such as auto dealers, restaurants and Internet sites rose again in June after a mammoth gain in May, underscoring the strength of the U.S. economy as spring turned to summer. Sales at retailers nationwide grew 0.5% last month.
Published:7/16/2018 7:49:31 AM
Consumer Credit Binge Hangover Sparks Slowdown in Retail Sales Growth
Following May's exuberant jump (revised even higher to +1.3% - biggest since Sept 2017) which coincided with a massive spike in consumer credit, June's retail sales growth slowed notably (+0.5% as expected).
Retail Sales ex-Autos beat expectations, rising 0.5% vs 0.4% expected, but slowing dramatically from an upwardly revised May spike of 1.3% MoM; but retail sales ex-autos and gas disappointed.
However, the control group's growth (ex-food, auto dealers, building materials, and gas stations) collapsed to unchanged in June (against expectations of a 0.4% MoM jump)...
Under the hood it was a mixed picture, with 8 of 13 major retail categories showed increases, according to the Commerce Department data.
- Motor Vehicle and parts dealers: +0.9%
- Furniture and home furnishing stores: +0.6
- Building material and garden equipment: +0.8%
- Health and personal care stores: +2.2%
- Gasoline stations: +1.0%
- Nonstore (internet) retailers: +1.3%
- Food service and drinking places: +1.5%
- Miscellaneous store retailers: +0.2%
- Electronics and appliance stores: -0.4%
- Food and beverage stores: -0.3%
- Clothing and clothing accessories stores: -2.5%
- Sporting goods, hobby, musical and book stores: -3.2%
- General Merchandise stores: -0.8%
So, once again, retail sales seems as dependent on the gusher of available consumer credit as any sentiment-driven impact.
Published:7/16/2018 7:49:30 AM
Need to Know: Gundlach says yield curve's recession signal 'stronger than usual'
Need to Know: Gundlach says yield curve's recession signal 'stronger than usual'
Published:7/16/2018 7:22:32 AM
Wall Street, European Stocks Edge Lower Ahead of Trump-Putin Summit in Helsinki
Global stocks mixed, with weakness in Asia offset by solid start in Europe, as investors brace for Trump-Putin summit in Helsinki. China's economy grows 6.7% in second quarter, but weak June industrial production readings suggest second-half could see slowing. Oil dips as investors bet Libya supply will start to increase, but Norwegian strikes keep investors from extending bets.
Published:7/16/2018 7:22:31 AM