The European zone of border-free travel could be in danger if no solution is found to the issue of migration, Italy’s prime minister has warned. At an informal meeting of 16 EU leaders in Brussels, Giuseppe Conte called for shared EU responsibility for rescued migrants and penalties for countries refusing to accept quotas. The meeting comes ahead of a full EU summit on migration next week. In recent days, Italy has refused to accept two migrant rescue ships. In a document presented at the talks, Mr Conte advocated for migrant “protection centres” to be established in other EU countries to relieve the burden on Italy, which has received over 600,000 migrants over the past four years. “Whoever lands in Italy lands in Europe…. Schengen is at risk,” the document said. The Schengen zone of passport-free travel covers most of the EU and some other European countries Italy’s new populist coalition government, which was formed earlier this month, has taken a hard line on migration and says it wants to deport half a million undocumented migrants. Last week it refused to accept 630 migrants aboard the charity rescue ship Aquarius, which was eventually diverted to Spain. Another vessel, Lifeline, is now stranded with around 230 people on board after both Italy and Malta denied it permission to dock. Sunday’s meeting was called for by German Chancellor Angela Merkel, who indicated that bilateral and trilateral agreements could be necessary if next week’s summit fails to reach an EU-wide agreement. She also urged a shared response to the issue of illegal migration, saying: “Everybody is responsible for everything. Wherever possible, we want European solutions. Where this is not possible, we want to bring together those who are willing and find a common framework for action.”
SHANGHAI — China gave its economy a shot in the arm on Sunday amid signs of a slowdown, as it freed up more than $100 billion for banks to use to help small businesses and heavily indebted companies. The money is intended to help Beijing dance a complicated two-step. China is trying to curb the country’s addiction to borrowing, which over the past decade has mired vast areas of the economy in debt. But that effort is showing signs of hurting growth. China is hoping it can help spur growth by steering loans where they are needed and blocking them where they are not. Beijing’s balancing act could soon get more difficult. President Trump is ratcheting up his threats to impose more tariffs on Chinese-made goods. While China’s economy is more than big enough to absorb the blows, Beijing could be forced to reopen the lending spigots if the threats devolve into an all-out trade war. China in essence told the country’s banks on Sunday that they do not have to sock away as much for a rainy day, allowing them to lend the money instead. The central bank said that, effective July 5, it would reduce by half a percentage point the share of overall deposits that commercial banks and other savings institutions are required to deposit at the central bank, a measure known as the reserve requirement ratio. It came with a catch: The banks must use the money to help heavily indebted companies or lend more to small businesses with little or no collateral to offer. It is the second time in just over two months that China has freed up money but given banks specific instructions on how to lend it. China’s debt has soared over the past decade, particularly at state-owned companies but more recently among households, threatening the country’s financial future and imperiling one of the world’s most powerful economic engines. That makes it difficult for China to lend more to see the economy through a slowdown. A further expansion of credit now could weaken confidence in China’s currency, which has already slid in value against the dollar over the past week because of worries about a possible trade war with the United States. China has been cautious in the past about cutting the reserve ratio during times when its currency appears to be under strain. The move on Sunday “means the People’s Bank of China has put internal economic development as the priority,” said Deng Haiqing, an economist at the China Finance 40 Forum, a Beijing research group. For 17 of the country’s biggest banks, the rules announced on Sunday will free up $77 billion for lending. But the central bank said that this money had to be used as part of programs in which banks obtain shares in deeply troubled companies in exchange for writing off some of these companies’ debts.
President Donald Trump tweeted Sunday that the United States can’t allow migrants to “invade” the country and must be immediately sent back where they came from without due process. “We cannot allow all of these people to invade our Country. When somebody comes in, we must immediately, with no Judges or Court Cases, bring them back from where they came. Our system is a mockery to good immigration policy and Law and Order. Most children come without parents…” Trump tweeted. He added that our immigration policy is “very unfair to all of those people who have gone through the system legally.”
We cannot allow all of these people to invade our Country. When somebody comes in, we must immediately, with no Judges or Court Cases, bring them back from where they came. Our system is a mockery to good immigration policy and Law and Order. Most children come without parents…
— Donald J. Trump (@realDonaldTrump) June 24, 2018
….Our Immigration policy, laughed at all over the world, is very unfair to all of those people who have gone through the system legally and are waiting on line for years! Immigration must be based on merit – we need people who will help to Make America Great Again!
— Donald J. Trump (@realDonaldTrump) June 24, 2018
In the last week, the Trump administration triggered bipartisan backlash by implementing a zero-tolerance policy toward illegal border crossings, charging all individuals who cross the border illegally with unlawful entry. People who claim to seek asylum are also charged with unlawful entry and taken into custody until their case is processed. Federal law prevents children from being held in the same detention facility as those charged with unlawful entry, causing border patrol agents to separate children from their families. Trump signed an executive order Wednesday to stop separating parents and children at the U.S. border. “We are keeping families together, and this will solve that problem,” he said after signing the order in the Oval Office. “At the time, we are keeping a very powerful border, and it continues to be a zero tolerance [policy]—we have zero tolerance for people that enter our country illegally.” Families in detainment wait until their case is brought before an immigration judge. Trump signaled in his tweet that he doesn’t want migrants and asylum seekers to have to be processed through the court system. It isn’t the first time Trump has criticized the judicial process for migrants who cross the border illegally. Last week, he rejected calls from Congress to hire more immigration judges. “We don’t want judges, we want security on the border,” Trump said. Republicans in the House of Representatives tried to pass a conservative immigration bill last week but the vote failed. Trump urged congressional Republicans to “stop wasting their time” on immigration until after the midterm elections. Nick Bit: The due process Trump is taking away from desperate illegal allies he will soon if left unchecked take away from you!
Former White House Special Counsel of Ethics Norm Eisen is hardly a fan of the current administration. That pattern continued Sunday with a pretty striking tweet. President Donald Trump wrote that people who “invade our Country” should be deported with “no Judges or Court Cases.” Eisen, an Obama official who now helps run a government watchdog, shot back with a post of his own. He’s trying to use the most vulnerable as a battering ram in his ongoing attack on the rule of law. But if he can deprive them of due process, American citizens will be next. How long before new chant at his rallies is “lock them all up”? Now is the time to hold the line Trump ran on a decidedly hardline immigration policy. It’s how he announced his campaign in 2015, calling Mexican immigrants rapists, “and some, I assume, are good people.” Since then, it has been one controversy over another. Critics often say his policy and proposal are racist and deprive people of their rights. The president and supporters instead highlight crimes by undocumented people. The debate somehow managed to become even more heated after Attorney General Jeff Sessionsannounced a “zero-tolerance” policy in May, and said that prosecutors would go after any and all people who illegally crossed the border. Accordingly, defendants would be separated from any children who accompanied them, pending legal proceedings. Sessions and White House Chief of Staff John Kellyhave described the policy as a deterrent. Trump signed an executive order on Wednesday ostensibly intended to end the separations, but it wasn’t immediately clear that the government would try to reunite families. “There will not be a grandfathering of existing cases,” Administration of Children and Families spokesperson Kenneth Wolfetold The New York Times. Officials walked that back, and have since announced moves to reunite families. On Saturday, the Department of Homeland Security said that Customs and Border Protection returned 522 children. As for Eisen, he is currently the chair of the board for CREW (Citizens for Responsibility and Ethics in Washington), a government watchdog that describes itself as nonpartisan. Nonetheless, it’s worth mentioning that he somewhat recently appeared in a video for a liberal political action committee, and told viewers that they should “take to the streets” if the president fired Special Counsel Robert Muellerin the Russia probe. In any case, he often criticizes Trump on Twitter, and his group isn’t shy about filing lawsuits and other types of complaints against the administration.
Sunday on CBS’s “Face the Nation,” Sen. Bob Corker (R-TN) said there was a “jailbreak brewing” in Congress for opposition to President Donald Trump’s tariff policies. Corker said, “The president broadly has used section 232 of the Trade Act, which is national security. It’s absolutely an abuse of his authority. It’s being used against our European allies, Canada, Mexico, and many other countries.” He continued, “It is successfully united the world against us. There’s not a person at the White House that can articulate why they are doing this other than to create leverage on NAFTA. And I don’t know of a senator that isn’t concerned about the broad use of this. So the amendment is just to say that if he’s going to use 232, which has never, ever been used in this way, it’s absolutely an abuse of authority, if he’s going to use it, once he completes negotiations on tariffs, he has to send it to Congress. it’s our responsibility.” He added, “I think there’s a jailbreak brewing. I really do. I think people, especially as these tariffs are being put in place against us, these countermeasures, and as people realize that 22,000 companies, 22,000 companies, have asked for exemptions, the White House is only — or the Commerce Department is only dealt with 98 of those. There’s no basis to deal with them. It’s not unlike what happened on the immigration issue where there was no preparation. Are they going to grant these exclusions based on political contributions? Or are they going to base them on something else? So we’re getting ready to have a similar situation. We’re getting ready to have a similar situation to what happened on immigration policy, and I’m hoping there will be a jailbreak and we will move toward passing this legislation.”
Some firms are making a windfall thanks to Trump’s family separation policy
Private companies are being paid millions of dollars in lucrative federal government contracts to provide housing and other services for undocumented immigrant children – including the thousands of recently arrived youngsters separated from their relatives at the U.S. border, Yahoo News reported this week. After reviewing publicly available contracts, Yahoo found 10 different contracts totaling approximately $92 million, awarded to five different vendors starting in September 2017. The contracts lasted for five years, through September 2022. The website first wrote about the contracts in a June 19 online post.. A Florida-based company, Comprehensive Health Services Inc. (CHSI), which boasts experience with “immigrant shelter services” received the bulk of the contracts. According to GovTribe.com, the company was awarded three contracts worth up to about $65 million. Yahoo wrote that CHSI last February was awarded a contract worth $30.9 million to operate an “emergency shelter” in Homestead, Florida, with “500 UAC beds,” an acronym referring to “unaccompanied alien children.” Southwest Key Programs was awarded two contracts in September 2017 worth up to $1.8 million each for providing “emergency shelter operations,” according to information posted on the site GovTribe.com. Yahoo, citing a report in ABC News, said the Texas based nonprofit runs 26 facilities for young migrants including Casa Padre in Brownsville, Texas. Casa Padre, located in a cavernous former Walmart, is the country’s largest licensed facility for immigrant children, with a capacity of 1,500.
A company in Maryland, Dynamic Service Solutions, in September of last year was awarded a government contract worth up to $8.7 million to provide “shelter care for unaccompanied children.” A fourth company, Dynamic Educational Systems, a subsidiary of the Arizona firm Exodyne, was awarded a pair of contracts worth up to approximately $5.6 million for “emergency shelter operations.” The fifth business, Virginia-based MVM, was awarded two contracts worth up to $9.5 million in September 2017 for “shelter operations” and for unspecified “emergency and other relief services,” Yahoo reported. At least 2,800 kids are separated from their parents. Where are they? President Trump earlier this week said his administration would stop separating immigrant parents and their children, most of whom are arriving across the southern U.S. border from Central America. But more than 2,500 youngsters already have been separated from their parents as they entered the United States, and it remains uncertain when – or even if – the government can figure out how to reunite them. The controversial policy of taking the children from their parents was part of a new “zero tolerance” policy in which U.S. officials arrested all undocumented adults entering the U.S. at any border cross other than official ports of entry. Once they are arrested, their children are taken away and held in separate facilities – a departure from past practice, when parents and young children were detained together or released pending future court proceedings.
NEW YORK (Reuters) – A review of documents seized from U.S. President Donald Trump’s longtime personal lawyer Michael Cohen has so far turned up only a handful of communications between Cohen and his clients, a federal judge said in a written order on Friday. Cohen’s home and office were raided in April as part of a criminal investigation by Manhattan federal prosecutors. He has not been charged with any crime. Out of nearly 300,000 items reviewed so far, 161 are privileged and seven of them are communications between Cohen and a client containing legal advice, according to an order from U.S. District Judge Kimba Wood on Friday confirming findings by the special master. The order said most of the documents were communications between Cohen and his lawyers. Lawyers for Cohen and Trump could not immediately be reached for comment. Wood appointed a special master to review the documents before turning them over to prosecutors after lawyers for Cohen and Trump said they might include privileged attorney-client communications, which prosecutors are normally not allowed to see. Prosecutors said in an April court filing that they believed Cohen was “performing little to no legal work” and that they were primarily investigating his personal business dealings. Most of the roughly 3.7 million items seized from Cohen are still under review. On Friday, Wood ordered Cohen’s lawyers to identify for the special master, former federal judge Barbara Jones, by June 27 any remaining items they believe are privileged. The probe into Cohen’s dealings stems in part from a referral by Special Counsel Robert Mueller, who is investigating possible collusion between Russia and Trump’s 2016 campaign. Trump has denied that there was any collusion, and Russia has denied meddling in the election.
Mr. Falih also suggested that traders, who pushed up oil prices sharply on Friday after the OPEC decision, may have underestimated the major producers’ determination to act.
VIENNA — Saudi Arabia said on Saturday that it was substantially increasing oil production in an effort to cool down rising prices and head off potential future shortages.
Khalid al-Falih, the Saudi energy minister, told journalists at the headquarters of the Organization of the Petroleum Exporting Countries here that Saudi Aramco, the national oil company, was already in the process of ramping up production to increase exports from Saudi ports in July.
“Ships have been scheduled, and it will be hitting the markets, I assume, in August,” he said. While declining to give a specific number, Mr. Falih said the kingdom would be increasing output by “hundreds of thousands, not tens of thousands, of barrels” — a substantial amount. The Saudi comments were the most tangible indication yet that the kingdom, Russia and other big exporters are reversing their 17-month policy of holding oil off the market. Complaints about artificially high oil prices from President Trump and other leaders of oil-consuming nations have played a role in the change of policy. There are also growing worries that declining supplies from Iran and Venezuela could make for an overly tight oil market in the future. An audit has found that Saudi Arabia has even more oil in the ground than previously estimated, he said that with decades of supplies to sell, Saudi Arabia needed to keep consumers buying oil and be mindful of their interests. “If one of the barometers to gauge that was a tweet from the president of the United States, so be it,” he said. “We will listen to it.” As Mr. Falih explained it, the big producers are shifting from a regime in which oil production has been tightly controlled and monitored to one in which countries with spare output capacity will be encouraged to exceed individual quotas to head off any price spikes. “They are preparing for more disruptions, and they are preparing to react to them as they feel is needed,” said Roger Diwan, a managing director of IHS Markit, a research firm, who was observing the meetings. Saudi Arabia gained this ability on Friday, overcoming objections from Iran, which expects its production to decline in the wake of the Trump administration’s recent decision to withdraw from the country’s nuclear deal and reimpose economic sanctions With Russia’s energy minister, Alexander Novak, at his side, Mr. Falih fleshed out OPEC’s cryptic decision on Friday to raise production by saying that OPEC and Russia were aiming to lift output by a collective one million barrels a day, or by about 1 percent of world supplies. The countries that have been holding back oil, including Saudi Arabia, Russia, Kuwait and the United Arab Emirates, will now work to fill the gaps. If the major producers are free to produce what they want, immediate shortages seem unlikely. Saudi Arabia says it has two million barrels in spare capacity, well over what is needed. Analysts estimate that Russia could increase production by 400,000 barrels a day. Kuwait and the United Arab Emirates could also add more oil.
WASHINGTON (Reuters) – U.S. President Donald Trump threatened to impose a 20 percent tariff on all European Union-assembled cars coming into the United States, a month after the administration launched an investigation into whether auto imports pose a national security threat. “If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump wrote on Twitter Friday. Autos stocks fell on the news. The European Autos Stocks Index fell sharply after Trump’s 20 percent tariff tweet and was last down 1.25 percent. Ford Motor Co shares went into the red and were down 0.5 percent, while General Motors Co shares were off 0.3 percent. The U.S. Commerce Department is investigating whether imports of automobiles and auto parts pose a risk to national security. The deadline for completing the investigation is February, 2019, but Commerce Secretary Wilbur Ross said Thursday said the department aims to wrap up the probe much earlier, by late July or August. The Commerce Department plans to hold two days of public comments in July on its probe of auto imports. Trump has repeatedly singled out German auto imports to the United States for criticism. At a meeting with automakers at the White House on May 11, Trump told automakers he was planning to impose tariffs of 20 or 25 percent on some imported vehicles and sharply criticized Germany’s automotive trade surplus with the United States. The United States currently imposes a 2.5 percent tariff on imported passenger cars from the European Union and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars. The tariff proposal has drawn sharp condemnation from Republican lawmakers and business groups. A group representing major U.S. and foreign automakers has said it was “confident that vehicle imports do not pose a national security risk.” The U.S. Chamber of Commerce noted that American auto production has doubled over the past decade, and said tariffs “would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war.” German automakers Volkswagen AG (Daimler AG and BMW AG build vehicles at plants in the United States. BMW is one of South Carolina’s largest employers, with more than 9,000 workers in the state. The United States in 2017 accounted for about 15 percent of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5 percent of VW brand sales and 12 percent of Audi sales.
Bitcoin prices fell more than 5 percent on Friday after Japan’s financial regulator ordered several cryptocurrency exchanges to review their business practices. The digital currency traded at $6,349 as of 7:45 a.m. ET, breaking below $6,400 for the first time in about a week, according to CoinDesk. The order from Japan’s Financial Services Agency led bitFlyer — the largest crypto exchange in the country— to suspend the creation of new accounts while it makes improvements to its business, especially in its anti money-laundering measures.
Bitcoin’s Friday performance
“Our management and all employees are united in our understanding of how serious these issues are, as well as how serious we are in responding to them going forward,” bitFlyer said in a statement on their website. “In order to maximize our efforts towards building a suitable service and improving on the issues identified, we have temporarily suspended account creation for new customers of our own volition,” bitFlyer said. The agency gave the same order to five other other exchanges after finding weaknesses in their anti-money laundering controls.”In the long-term, it builds a better ecosystem and makes sure this is a legitimate asset class,” said Brian Kelly, founder and CEO of BKCM.”This is part of making sure exchanges are up to snuff.” In the short run though, it reduces the flow of new capital to the largest exchange in the largest market for bitcoin trading. Bitcoin trading in Japanese yen makes up more than 60 percent of the digital currency’s daily volume, according to data from CryptoCompare. Japanese regulators have been in the vanguard of regulation. It was the first country to adopt a national system to regulate cryptocurrency trading after its exchanges were subject to some well-known breaches including Mt.Gox. In March, Japanese regulators issued punishment notices to multiple exchanges and forced some to stop business altogether after the $530 million theft of digital currency from exchange Coincheck andissued a warning to Hong Kong-based Binance for operating in the country without a license.
Washington (CNN)President Donald Trump said Friday Republicans should wait until after the November midterm elections to pass immigration legislation, undercutting Congress’ ongoing efforts to pass a bill. “Republicans should stop wasting their time on Immigration until after we elect more Senators and Congressmen/women in November,” Trump tweeted. “Dems are just playing games, have no intention of doing anything to solves this decades old problem. We can pass great legislation after the Red Wave! Trump’s comments come as House Republicans have been struggling to wrangle support for a comprehensive immigration bill. On Thursday, Republicans decided to postpone a vote on it for the second time in less than a day. Senate and House leaders have also been trying to find a bill that would end family separations at the border. In a series of tweets Friday morning, Trump said electing more Republicans in November would result in a comprehensive immigration bill. “Elect more Republicans in November and we will pass the finest, fairest and most comprehensive Immigration Bills anywhere in the world. Right now we have the dumbest and the worst,” he tweeted. “Dems are doing nothing but Obstructing. Remember their motto, RESIST! Ours is PRODUCE!”
President Donald Trump’s embattled personal attorney, Michael Cohen, retweeted a photo of himself with comedian Tom Arnold — who happens to be working on a show with Vice that features him hunting for unflattering video of Trump. Arnold told NBC News early Friday that Cohen ― who is under investigation by federal prosecutors ― talked to him about the show, which is expected to air later this year. “We’ve been on the other side of the table and now we’re on the same side,” said Arnold, an outspoken Trump critic. “It’s on! I hope he [Trump] sees the picture of me and Michael Cohen and it haunts his dreams.” Cohen on Twitter Friday evening called the meeting “a chance, public encounter in the hotel lobby where he asked for a selfie” and he added: “Not spending the weekend together, did not discuss being on his show nor did we discuss @POTUS,” referring to Trump. Cohen added the hashtags #done and #ridiculous.
It was Arnold — who is Trump fan Roseanne Barr’s ex-husband — who posted the photo Thursday night with the caption “I Love New York.” Cohen then retweeted it without comment. Thursday night, NBC News asked Cohen about the photo and he referred inquiries to Arnold. Several hours later, Arnold contacted NBC News. He said he was in New York taping interviews for the Vice show and that he and Cohen met at the Loews Regency Hotel in Manhattan. A Vice producer said Cohen had not done an on-camera interview and they are “still working it.’ Vice announced in May that it had tapped Arnold to helm a show called “The Hunt for the Trump Tapes,” and investigate whether rumored tapes from the past showing the president in a negative light actually exist. “The host will draw on his high-profile network of celebrity friends, entertainment executives, and crew members he’s met over more than 35 years in showbiz to dig for evidence on Trump’s most incriminating moments — and, being a comedian and all, he’ll have a little fun along the way,” Vice said in the announcement of the show. Arnold would not say whether Cohen was planning to give him any tapes he might have of conversations with Trump. But he added, “This dude has all the tapes — this dude has everything.” “I say to Michael, ‘Guess what? We’re taking Trump down together, and he’s so tired he’s like, ‘OK,’ and his wife is like, ‘OK, f*** Trump,'” Arnold said, laughing. Later Friday, Arnold tweeted the photo again, seeking to emphasize that it was himself and not Cohen who suggested the takedown.
“Michael has enough Trump on his plate,” Arnold said. “I’m the crazy person who said Me & Michael Cohen were teaming up to take down Trump of course. I meant it.” Cohen is under investigation by federal prosecutors in New York for his business dealings, including a $130,000 hush-money payment to adult film star Stormy Daniels, who claims she had sex with Trump. The White House says Trump denies the allegation.
VIENNA — Major oil-producing countries moved on Friday toward an agreement to jointly raise exports, a decision that has driven considerable division among them but that could temper criticism from President Trump. Officials from the Organization of the Petroleum Exporting Countries, as well as other major producers like Russia, were set to increase their total output by less than 1 percent of the global oil supply. Though a relatively small addition to the world energy market, the move nevertheless signals a willingness by international suppliers to address rising prices. “We will come out with an agreement to ease market concerns about the availability of crude oil,” Khalid al-Falih, Saudi Arabia’s energy minister, said on Friday in Vienna. The price of Brent crude, the international benchmark, has been little changed at $74 a barrel over the past week, as traders expected a deal. But it briefly topped $80 a barrel last month. The deal to cut output, reached in 2016, had been an extraordinarily cooperative effort by OPEC and other producers. Countries that had historically been at odds agreed to restrict their overall crude sales to bolster prices, though Saudi Arabia and Russia held back the most.
But spurred by angry tweets from Mr. Trump, who repeatedly criticized OPEC for maintaining what he said were “artificially very high” prices, as well as complaints from major consumer countries like India, the agreement has been reconsidered.
BRUSSELS/ROME (Reuters) – Italian Prime Minister Giuseppe Conte said on Thursday a draft EU accord on migration had been withdrawn after he clashed with Chancellor Angela Merkel over an issue that is splitting Europe.The leaders of four central European states, meanwhile, confirmed they would boycott an EU mini-summit on migration, taking a veiled swipe at Merkel by accusing countries of pushing the issue for domestic political reasons. The withdrawn declaration had been drafted ahead of an emergency meeting of 10 EU leaders set for Sunday in Brussels, with Germany and France hoping for a swift deal that could be approved at a full EU summit at the end of next week. It contained key elements Merkel needs to placate her rebellious coalition partner, the Bavaria-based Christian Social Union (CSU) and its head, Horst Seehofer, who is also Germany’s interior minister. But Rome objected to provisions that said asylum seekers would have to be returned to the EU country they had first logged their claim in, which often means Italy.
Rome has taken in some 650,000 boat migrants over the past five years, stoking anti-immigration sentiment in Italy and fuelling the rise of the far-right League, which forged a coalition government this month.
Conte, who had threatened not to go to Brussels on Sunday unless the draft was amended, spoke to Merkel on Thursday. “The chancellor clarified that there had been a ‘misunderstanding’. The draft text released yesterday will be shelved,” Conte wrote on Facebook, adding that he would now go to Brussels at the weekend. Berlin played down the dispute. “We are in constructive talks with Italy. The meeting on Sunday has only preparatory character,” a German government source said. Italian authorities appeared to relent on Thursday after at first refusing to accept 226 migrants on board a German rescue ship, saying later in the day they would take them in but impound the vessel. Unless all EU states agree at their looming June 28-29 summit to share out asylum seekers more evenly, Seehofer has threatened to introduce an entry ban on the German border for all those who have already registered for asylum elsewhere..
Economic development minister says new tariffs will be applied in response to US moves on steel and aluminium
Oreshkin later told reporters that tariffs may apply to road construction equipment and some other items, but would not target medicines, according to Russian news agencies.
The European Union, India, China and Russia all have applied to the WTO to challenge the tariffs that took effect March 23. Washington argued they were for national security reasons.
BRUSSELS (Reuters) – President Donald Trump’s tough stance on Iran, new tariffs on European Union metal imports and U.S. demands for higher defence spending in Europe are part of a strategy to strengthen the West, a senior U.S. official said on Thursday. Wess Mitchell, U.S. Assistant Secretary of State for European and Eurasian Affairs, said that without such actions, U.S. and European diplomatic and military leadership would be overtaken by China, Russia and Iran. “Taking strong positions on these issues may not always lead to immediate agreement. But the long term costs of neglecting these things far outweigh political unity,” Mitchell told European and NATO officials, in a rare speech by a Trump administration official in Brussels. European leaders are deeply worried by Trump’s foreign policy and his “America first” rhetoric, while his May 8 decision to withdraw from the Iran nuclear deal undermined an agreement prized by Europeans. A Group of Seven summit in Canada earlier this month laid bare tensions between NATO allies after Trump’s decision to impose tariffs on steel and aluminium imports from the European Union and Canada on national security grounds. Mitchell, who studied in Berlin and speaks German, sought to place Trump’s decisions into a coherent policy plan that would benefit European countries because Trump was acting decisively to bring change, rather than relying on endless negotiations. “In all of these areas, with Iran, defence spending, trade, we are committed to finding a common way forward, we are committing to acting. We can debate, we can strategise, we can coordinate, but we must act,” he said. “In the actions we take, we are hoping to spur a multilateral response to address some of the world’s toughest challenges,” Mitchell said at the Carnegie Europe think-tank gathering in Brussels. Mitchell said U.S. import tariffs on European goods would end “structural trade imbalances and predatory trade practices” in U.S.-EU trade, which would weaken the West if they continue. Reimposing sanctions on Iran by withdrawing from the Iran nuclear accord would help stop Tehran’s missile programme and limit the regional reach of Iran’s Revolutionary Guard, he said. Mitchell also repeated Trump’s central message to NATO that European allies must spend 2 percent of economic output a year on defence to rebuild “atrophied European militaries.” Trump is expected at a NATO summit in Brussels in July, a year since he first came to the alliance and publicly admonished allies for not spending enough on defence. Many EU and NATO diplomats now view the U.S. president as an unknown quantity with a lack of interest in the transatlantic ties that Europe and Canada cherish, and who is unnecessarily stoking a global trade war that will hurt economic growth.
(Bloomberg) — Chalk up another win for U.S. Treasuries. First it was the 12-month bill, and the six-month, and then the three. Now, the interest rate on the one-month Treasury bill is close to overtaking the dividend yield on U.S. stocks for the first time in a decade — underscoring why risk-free short-term government debt is trumping the allure of stocks for income-hungry investors.
On a forward basis, the spread between U.S. stock payouts and the one-month government bill is approaching zero for the first time in a decade.
ETFs that invest in ultra short-term debt have drawn $17 billion so far this year, accounting for about 34 percent of their assets under management, according to data compiled by Bloomberg. Conversely, dividend funds have seen outflows in 12 of the last 13 weeks, including a six-week stretch of outflows in excess of $1 billion, according to EPFR Global. Given the payout trajectory, strategists say shorter-term U.S. debt will prove even more appealing if U.S.-China frictions intensify. “If trade tensions remain a front page issue going forward,” money will flow into Treasury funds at the expense of U.S. small-capitalization stocks, Evercore ISI strategists led by Dennis DeBusschere wrote in a note.
BRUSSELS (Reuters) – European Union leaders will express concern on Friday over a lack of progress in talks with London on how to avoid reimposing controls at the border between British-ruled Northern Ireland and the Irish Republic after Brexit. Leaders of the 27 countries that will remain in the EU after Britain leaves next year will take stock of negotiations on a withdrawal agreement and on a political declaration on what future relations with London should look like. A draft document outlining conclusions of their European Council meeting in Brussels singles out the lack of an operational arrangement for the Irish border, called by EU leaders a backstop solution. The backstop solution has been agreed in very general terms in December, but there has been no consensus since on how to put it in place in practice by Brexit day in March 2019. “The European Council expresses its concern that no substantial progress has yet been achieved on agreeing a backstop solution for Ireland/Northern Ireland,” the draft conclusions, seen by Reuters, said. Britain and the EU want to keep a free flow of people and goods over the border without returning to checkpoints, symbols of the three decades of violence in Northern Ireland that was largely ended by a 1998 peace deal. But finding a practical solution for customs checks needed for what will become an external border of the EU after Brexit has so far proven elusive. EU leaders will insist on Friday on “the need for intensified efforts” to find a solution, without which the whole withdrawal agreement, or a deal on a transition period until the end of 2020, cannot take shape. Time is running out because unless a final agreement on the withdrawal treaty, the transition period and a political declaration on future relations are agreed at an EU summit in October, there won’t be enough time for parliaments to ratify the treaty in Britain and the remaining EU countries before March 2019. “Work must also be accelerated with a view to preparing a political declaration on the framework for the future relationship,” the draft conclusions of the Friday meeting said. “This requires further clarity from the UK as regards its position on the future relationship.” EU officials have complained that Britain is not telling them what it wants from a future relationship, makings talks very difficult. British Prime Minister Theresa May is struggling to overcome differences on Brexit within her Conservative Party and has clashed with parliament over what powers it should have over the final deal. Wary that a withdrawal treaty might not be agreed in time, time, the EU leaders said governments should brace for the worst. “The European Council renews its call upon Member States and all stakeholders to step up their work on preparedness at all levels and for all outcomes,” the draft said.
President Donald Trump said Tuesday he wants to cut off aid to countries that “abuse” the United States by sending “not their best” people to its border, describing the proposal as a bipartisan approach. “We want to end the border crisis by finally giving us the legal authorities and the resources to detain and remove illegal immigrant families all together and bring them back to their country,” Trump told the National Federation of Independent Businesses’ 75th anniversary event in Washington. “Now think of all that aid that we give to some of these countries,” he said. “Well, I’m going to go very shortly for authorization that when countries abuse us by sending their people up — not their best — we’re not going to give any more aid to those countries.” Following applause from the crowd, he added: “Why the hell should we? This is a responsible, common-sense approach that all lawmakers should embrace, Democrats and Republicans.” The White House did not immediately respond to CNBC’s request for comment on Trump’s remarks. Trump’s proposal came amid a wide-ranging speech in which he defended his administration’s “zero-tolerance” policy on prosecuting illegal entrants to the U.S. Trump defended the administration’s policy, which has led to the separation of nearly 2,000 migrant children from their families between April 19 and the end of May, according to a Department of Homeland Security tally. The speech marked Trump’s latest threat to rescind foreign aid for another country. Trump had previously suggested that the U.S. could stop sending aid to Honduras following news reports that a “caravan” of asylum-seeking migrants from that country was traveling to the U.S.-Mexico border.
The heads of several major central banks on Wednesday expressed alarm over the growing trade tensions in the world, warning it may push the global economy into the ditch. The European Union said earlier Wednesday it will implement tariffs on $3.2 billion worth of goods imported from the U.S. in response to the U.S. imposing tariffs on aluminum and steel imports from the EU on June 1. President Donald Trump on Monday asked his administration to identify a new list of $200 billion in Chinese goods that could be hit by tariffs, on top of $50 billion of tariffs already announced. “I think what’s happening is incredibly disturbing,” said Philip Lowe, the Governor of the Reserve Bank of Australia, during a forum sponsored by the European Central Bank, in Sintra, Portugal. So far, financial markets have taken a “benign” view on trade friction, but this might not last, Lowe said. But businesses are starting to pull back and delay new investments. “It wouldn’t take that much for financial markets to combine with businesses-that-are-waiting to turn this into a really big global event. It is very worrying,” Lowe said. Federal Reserve Chairman Jerome Powell acknowledged concerns. There seemed to be “rising” concern from business leaders about trade friction, Powell said. For the first time the central bank’s business contacts are talking about postponing hiring, investment and decisions, he said. But this talk hasn’t yet shown up in the economic data, he said. European Central Bank President Mario Draghi said he saw “no ground to be optimistic” about the trade tensions. Lessons from past trade disputes are all very negative, he said. Draghi said he was worried about the U.S. and other countries were beginning to take unilateral actions in what had been a multilateral world. “The potential changes that this may start are unknown and very worrisome,” he said. Bank of Japan Governor Haruhiko Kuroda said the dispute between China and the U.S. could have “a quite significant” indirect impact on the Japanese economy. “If this escalation of tariffs by U.S. and China continues and is actually implemented, that would significantly affect the East Asia supply-chain centering in China, Korea, Japan, Taiwan as well as Southeast Asian economies,” he said. “So I really hope this escalation could be rescinded and normal trading relationship between the U.S. and China prevail. So this is a matter of great concern,” Kuroda said.
(Reuters) – A jump in technology and media stocks lifted the S&P 500 on Wednesday and pushed the Nasdaq to a record high, but the Dow remained under pressure from an escalation in the U.S.-China trade spat that has slammed global markets. The S&P 500 media index rose 1.1 percent with all its 14 members in positive territory. Viacom gained 2.4 percent, while DISH Network and Discovery were up about a percent. The so-called FAANG stocks – Facebook, Amazon, Apple, Netflix and Alphabet – were also higher. “You’ve got a little bit of a shift away from the macro concerns which will continue to be a headwind for this market until we get some answers on trade. Right now the focus is on M&A,” said Art Hogan, chief market strategist at B. Riley FBR in New York. Markets skidded on Tuesday after President Donald Trump’s latest tariff threats against Chinese goods intensified worries over an intensifying China-U.S. trade spat. The United States is also under fire from other countries for its protectionist measures. The European Union will start charging import duties of 25 percent on a range of U.S. products from Friday after Washington imposed tariffs on EU steel and aluminum at the start of June. “Considering the magnitude of headwinds that we face in trade, it appears as though it has been relatively ‘extra Dow’ and that’s because Dow companies are more heavily impacted due to strong dollar and trade talks,” Hogan said. Shares in General Electric Co, the last remaining original member of the 30-stock Dow, fell 1.1 percent after losing its position in the index. Walgreens, which will replace GE, gained 1.1 percent. Starbucks slipped 8.5 percent after the world’s largest coffee chain’s quarterly sales growth forecast missed analysts’ estimates. Oracle dropped 7 percent after the software maker’s current-quarter profit forecast fell short of analysts’ expectations. Advancing issues outnumbered decliners for a 1.71-to-1 ratio on the NYSE and for a 2.19-to-1 ratio on the Nasdaq.
Facing widespread criticism over a policy that has led to children being separated from their parents at the U.S.-Mexico border, President Donald Trump indicated Wednesday he plans to sign an executive order to address the issue. The executive order Trump plans to sign would reportedly not end his administration’s “zero tolerance” policy for illegal immigrants but would allow families to be detained together. Trump told reporters at the White House that the action would be “pre-emptive,” as the House is expected to vote on two separate immigration bills later this week. “The Republicans want security and insist on security for our country. And we will have that,” Trump said. “At the same time we have compassion and want to keep families together.” “I’ll be signing something in a little while that’s going to do that,” he added. “I’ll be doing something that’s somewhat pre-emptive and ultimately will be matched by legislation I’m sure.” The move to sign the executive order is seen as a reversal by the president, who has previously argued that it is up to Congress to address the issue of family separations. Trump indicated during a closed-door meeting with House Republicans on Tuesday that he would support both a conservative immigration proposal drafted by House Judiciary Committee Chairman Bob Goodlatte, R-Virg., and a compromise bill negotiated by centrist and conservative Republicans.
(Bloomberg) — Despite recent job gains, rising wages and falling unemployment, almost a quarter of Americans said they still have no emergency savings, according to an annual Bankrate.com report released Wednesday. The number of Americans who said they have no money readily available in either a checking, savings or money market account fell to a seven-year low of 23 percent, down from 24 percent last year, the study found. The poll was conducted in June by research firm SSRS, using a national sample of 1,006 people. “People are not making headway in savings, largely in part because they don’t prioritize saving,” said Greg McBride, chief financial analyst at Bankrate.com. The percentage of Americans with some savings, but not enough to cover three months’ worth of expenses, rose to 22 percent from 20 percent last year, the report said. And the percentage with enough to cover expenses for three to five months ticked up to 18 percent, from 17 percent last year. Still, only 29 percent of Americans have enough emergency savings to cover at least six months’ of expenses—a financial planning norm. This is down from 31 percent in 2017.“Despite the enormous wealth gains we have seen in the stock market and in the housing market, that wealth is very unevenly distributed,” said Torsten Slok, chief international economist at Deutsche Bank AG in New York. That disparity, he said, is overriding any gains made in the job sector. The median family simply has fewer resources, Slok said, pointing to a 2017 report he authored on U.S. income and wealth inequality. About a third of U.S. families have no wealth—or negative wealth—outside the value of their home. “It’s obviously not good from a vulnerability perspective,” he said.But the majority of Americans don’t seem to be worried about their financial situation. Sixty-two percent say they are somewhat or very comfortable with their emergency savings. Shockingly, about one in five Americans with no emergency savings at all said they felt comfortable, too. McBride said they are kidding themselves. “In some cases, it’s just denial. They’ve never been out of work, had a big medical expense or experienced a significant event that threatened their emergency savings.”
The Securities and Exchange Commission (SEC), an American regulator, announced this Tuesday that it is fining Merrill Lynch $42 million. The fine or, to use the SEC’s terminology, ‘civil penalty, is the result of the wealth management firm misleading customers over order executions. From 2008 to 2013, Merrill Lynch continually lied to its clients by stating that it had executed their orders internally. In reality, these orders were being executed at other broker-dealers, including proprietary trading firms and wholesale market makers. Internally, the company referred to this process as ‘masking’. The firm did not just lie to customers but also reprogrammed its systems, altering reports and records so as to make them give false statements regarding orders’ trading venues. It appears that the firm did all of this in order to get reduced access fees to exchanges. By masking the true executors, the firm was able to make itself look like a more active trading centre than it really was, hence enabling it to get reduced access fees. When Merrill Lynch stopped its masking efforts in May of 2013, it did not tell its customers about its past conduct. Instead the firm took additional steps to cover its tracks and ensure no one would discover what it had been doing. The SEC claimed in their statement on Tuesday that masking had effected over 15 million ‘child orders’ – segments of larger orders that have been broken down to be executed over a preset period of time. These 15 million order were comprised of a total of 5 billion shares.According to Stephanie Avakian, Co-Director of the SEC’s Enforcement Division, Merrill Lynch deprived customers of the the ability to ability to make informed decisions regarding their orders and broker-dealer relationships. Today’s announcement comes almost exactly two years after Merrill Lynched was fined for misleading customers on structured notes and breaking customer protection rules. On that occasion, the SEC fined the firm $425 million, over ten times the amount announced by the regulator yesterday. Nick Bit: Hello Baby Boomers Warning Warning you money is not their. GET YOUR MONEY OUT OF ALL ALL ALL Retirement accounts now and put them in Treasurydirect.gov. PAY YOUR TAXES. You are going to get a great big surprise… Money goes in real easy BUT as your are about to discover it will be hell getting your money. YOU HAVE BEEN WARNED!
Media giants will carry a combined $350 billion of bonds and loans
A wave of expected major-media mergers would transform AT&T Inc. and Comcast Corp. into the two most indebted companies in the world, a standing that carries uncharted risks for investors in the firms’ bonds. If the deals are finalized—AT&T T, -3.05% plans to buy Time Warner Inc. TWX, +293.51% and Comcast CMCSA, -3.20% to purchase 21st Century Fox Inc. FOX, -0.40% — the companies will carry a combined $350 billion of bonds and loans, according to data from Dealogic and Moody’s Investors Service. The purchases are meant to provide additional income to help the acquirers to weather turmoil sweeping their industries. But if the mergers falter, the record debt loads will give AT&T and Comcast little margin for error, fund managers and credit ratings analysts say. ‘It’s a very big number. It has fixed-income investors a little nervous and rightfully so.’
The debt-fueled buyouts by AT&T and Comcast are extreme examples of a decadelong surge in corporate borrowing that is stoking investor anxieties about what will happen as the economy slows and global interest rates rise. The ratio of debt to corporate earnings, commonly called leverage, has also risen, giving companies less financial cushion to absorb market shocks. Global corporate debt excluding financial institutions now stands at $11 trillion and the median leverage for such companies rated investment-grade has jumped 30% since the eve of the financial crisis in 2007, according to research by ratings firm Moody’s Investors Service. Most companies issue new loans and bonds to repay debt and investors are concerned about how companies will refinance their record-breaking debt loads when capital markets experience their next significant downturn.
Fears over a potential trade war are dampening the prospects for above-trend economic growth, Atlanta Fed President Raphael Bostic said Monday. At a time when most economists have substantially boosted their outlooks for GDP gains, particularly in the second quarter, the central bank official cautioned that the enthusiasm could be misplaced. “I began the year with a decided upside tilt to my risk profile for growth, reflecting business optimism following the passage of tax reform. However, that optimism has almost completely faded among my contacts, replaced by concerns about trade policy and tariffs,” Bostic said during a speech in Savannah, Georgia, according to prepared remarks. The White House has been in a battle against China as well as multiple other trading partners as President Donald Trump seeks to reduce the difference between imports and exports. The administration has leveled tariffs against imported steel and aluminum and a slew of other prospects, with China in particular retaliating. In addition, the president has threatened to pull the U.S. out of NAFTA in favor of seeking unilateral agreements. Financial markets have been volatile as the trade tensions have grown, and Bostic said that fear is flowing over into the broader economy. “Perceived uncertainty has risen markedly,” he said. “Projects already under way are continuing, but I get the sense that the bar for new investment is currently quite high. ‘Risk off’ behavior appears to be the dominant sentiment among my contacts.” Bostic also said he agrees with the 0.25 percentage point interest rate hike the Federal Open Market Committee approved last week, though he said he’s not sure about the path of increases ahead. He said he does not seen signs of aggressive wage growth, with companies opting to train their own workers and investing in automation rather than hiring new employees at higher pay. “We want to ensure that the economy is not overheating, but we also do not want monetary policy to become too restrictive and threaten to choke off the expansion,” Bostic said.
Bitcoin spiked suddenly Monday afternoon following news users of the “Cash” mobile payments app could trade the cryptocurrency in New York. The largest cryptocurrency by market capitalization gained more than 4.5 percent to $6,793, its highest since Tuesday, according to CoinDesk’s bitcoin price index. Bitcoin was trading near $6,732 as of 2:26 p.m. ET. Cash is owned by Square and has 7 million monthly active users, the company said in its first quarter earnings call. On Monday, New York’s Department of Financial Services granted Square a virtual currency license, allowing users of the Cash app in the state to trade bitcoin. Bitcoin trading launched for most Cash users in late January.
Longtime Trump adviser Roger Stone met with a Russian national who was offering what he claimed was damaging information about Hillary Clinton in exchange for $2 million during the height of the 2016 presidential campaign. The previously undisclosed meeting was reported by the Washington Post on Sunday.
The Russian, who went by the name Henry Greenberg, did not disclose what information he was offering, Stone told the Post. In court records reviewed by the Post, Greenberg claimed in 2015 that he had been an FBI informant for 17 years until 2013. The Post notes there is no evidence that Greenberg was working on behalf of the FBI during the time of the meeting. Stone claimed Sunday that the meeting was a “set up” designed to compromise him and then-candidate Trump.
Michael Caputo, a communications adviser on the Trump campaign, arranged the meeting in Florida after Greenberg approached his business partner, the Post reports. Stone called the meeting a “waste of time” in text messages to Caputo following the meeting, which he provided to the Post.
In a letter to House Intelligence Committee Chair Devin Nunes obtained by CBS News, Stone’s lawyers maintain that Stone did not recall the May 2016 meeting or Greenberg’s name until after Caputo provided details of the encounter during an. Stone, who was fired from the Trump campaign in 2015, has repeatedly denied colluding with the Russians.
Caputo met with Mueller’s team in May, saying in a statement to CBS News at the time that Mueller’s team “knows every single chapter and verse about the Trump campaign.” He added Mueller was “trying to find evidence of collusion, [but] I don’t think he will.”
In the letter to Nunes, Stone’s attorneys said he declined Greenberg’s offer and “immediately replied that he did not have $2,000,000 and even if he did, he would never pay for political information.”
“Mr. Greenberg laughed and said it was not Mr. Stone’s money he was seeking but rather Donald Trump’s money,” the letter says. “Mr. Stone told Mr. Greenberg that Donald Trump would never buy information either. The two men then parted ways and have never seen each other or communicated with each other in any way since. Most importantly, there was no information ever exchanged or anything ever provided in either direction.”
Stone, in a statement to CBS News, said he “flatly rejected” Greenberg’s proposal and “never discussed the matter with Donald Trump or anyone in the Trump campaign.”
Lawyers for Stone suggest that based on the information of the meeting, “these matters should be investigated to ascertain the facts surrounding the 2016 election and the role of the Federal Bureau of Investigation.”
Asked about the meeting, Trump attorney Rudy Giuliani said the encounter with Greenberg was “proof there was no collusion” between Russian entities and the Trump campaign.
“Roger Stone apparently met with them, I don’t know. I haven’t talked to Roger. He’s never talked to the president about it. So where’s the collusion? And he said it was a waste of time. So yeah, sure, there was contact, as there was in that meeting. But that meeting led to nothing. This led to nothing,” Giuliani said. “The President of United States did nothing wrong. He was not involved with Russians. They can investigate from here to Timbuktu. They’re not going to find a darn thing.”
The poll comes as a convoy of ships carrying more than 600 migrants docks at the Spanish port of Valencia, a week after they were picked up close to Africa for transport to Italy, before Salvini refused to take them. The right-wing Lega party leader and Minister of the Interior, who forms half of Italy’s new populist coalition government alongside Luigi Di Maio’s Five-Star Movement, appears to have popular support in Italy. The IPSOS poll was highlighted by Mathew Goodwin, an Associate Fellow at Chatham House, before being shared by Brexit campaign leader Nigel Farage. “This is just the beginning folks,” commented the former UKIP chief.
59% say Italy right to shut ports.
68% say Matteo Salvini was right in being strong against the EU.
And this is just the beginning folks. https://t.co/ZexsqQFkYa
— Nigel Farage (@Nigel_Farage) June 16, 2018
On Sunday morning, the Italian coast guard vessel Dattilo was the first of three boats carrying the 630 migrants to touch land in Spain, the Associated Press reports. The Aquarius, operated by SOS Mediterranee Sea and Doctors Without Borders, was next, bringing another 106 migrants, followed by the Italian navy ship Orione. Salvini said he would not allow Italy to become a “giant refugee camp,” but Spain’s new socialist prime minister Pedro Sánchez was keen to welcome the migrants, who travelled hundreds of miles past safe ports in Tunisia and Algeria to reach the European country.
Just met the new Prime Minister of Italy, @GiuseppeConteIT, a really great guy. He will be honored in Washington, at the @WhiteHouse, shortly. He will do a great job – the people of Italy got it right!
— Donald J. Trump (@realDonaldTrump) June 9, 2018
This Saturday, Salvini barred two more migrant ferries, writing on Facebook: “Two other ships with the flag of Netherlands, Lifeline and Seefuchs, have arrived off the coast of Libya, waiting for their load of human beings abandoned by the smugglers.” He added: “These gentlemen know that Italy no longer wants to be complicit in the business of illegal immigration, and therefore will have to look for other ports [not Italian] where to go.” Under the EU’s asylum laws, migrants are supposed to apply for asylum in the member-state they enter, placing a massive burden on Italy and Greece, where hundreds of thousands of asylum-seekers have arrived in recent years.
In May, the all-electric Model 3 became the best selling mid-sized premium sedan in the U.S. At the same time, Tesla remains one of the most shorted stocks on the market. Bears say the company needs — but can’t raise — billions in new capital to hit its goals. Below is Elon Musk’s Friday night e-mail in its entirety, shared with CNBC by a current Tesla employee. (The note references the GA3, GA4, and EoL — these are general assembly lines and end of line areas within the company’s Fremont plant. It also references a man named Omead, presumably Omead Afshar, a project manager in the office of the CEO at Tesla.)
Crown Prince Mohammed bin Salman and Vladimir Putin met this past week in Moscow. It appears both have agreed to cement the cornerstone of an already deepening energy and economic relationship, even as they look to alter a successful oil production deal that brought them together. On Friday, Russia’s energy ministry said it has reached a general consensus with Saudi Arabia that its newfound relationship with the Organization of Petroleum Exporting Countries (OPEC) should be “institutionalized,” and be extended to monitor the market and take action if needed. OPEC will meet this upcoming Friday, and then with Russia and other non-OPEC members after that. The chumminess of Russia and Saudi Arabia, however, is not unexpected. The relationship between two of world’s largest oil producers is being reinforced as OPEC is poised to grapple with several thorny issues. Chief among them is how to deal with the declines of supply from OPEC member Venezuela, and the effect of renewed sanctions on Iran by the United States. Iran is being sanctioned by the U.S. after President Donald Trump withdrew from a deal between Iran and six other countries designed to end its nuclear program. Trump said the deal was not tough enough, and under the renewed sanctions, companies around the world in essence will have to stop dealing with Tehran if they want to deal with the world’s largest economy.
“This time more than most, [OPEC’s meeting] is almost more about geopolitics than it is about the market,” said Daniel Yergin, vice chairman of IHS Markit.
The U.S. is definitely the elephant in the room, with pressure also coming from Trump, who has tweeted twice, including this past week, about high oil prices. “Of course, Trump has brought a new form of jawboning into play, but they’re hearing the same thing form the Indians who are very concerned about what high oil prices mean about growth and the economy, and next year’s election in India,” Yergin said.
“This is one time when U.S. mid-term elections are going to figure into what OPEC does,” said Yergin.
“The message from Trump is he is not wanting high oil prices, either as a result of sanctions on Iran or heading into the November congressional election. These elections could be of such decisive importance,” he added. When OPEC ministers meet, theyare expected to consider altering a production deal that has held back 1.8 million barrels a day from the market for the past 18 months. Russia has pushed for returning a million barrels per day back into the market relatively quickly. However, Saudi Arabia would like to try a lower amount to prevent the price from dropping too much, analysts said.
“I think they do something like return 500,000 barrels a day, but the actual increase will be a lot more” said John Kilduff of Again Capital.
Oil prices took a beating Friday amid concerns about U.S. trade actions, and are off by more than 10 percent from last month’s high. The production cuts have been successful, shrinking world supplies and sending prices high enough to the point where Brent crude popped above $80 in May. Now that both Russia and Saudi Arabia are looking to return some barrels to the market, not all OPEC members agree. Iran, Venezuela and Iraq have all said the current production agreement should stay in place — mainly because they’re feeling the economic pinch of sanctions. “You now have in OPEC two countries that have been the subject of international sanctions and for one country, Iran, those sanctions have been supported by two members of OPEC, the [United Arab Emirates] and Saudi,” said Helima Croft, global head of commodities strategy at RBC. “There are a whole host of divisions going into this meeting.” There are also a complicated series of factors impacting the decision, and it’s not just about stabilizing the market. Already, Venezuela has lost about 700,000 barrels a day this year, and analysts expect U.S. sanctions could remove 500,000 Iranian barrels a day from the market by the end of the year, she said. “I think Iran becomes a story post-meeting,” Croft said, suggesting that Iran, Venezuela and Iraq may withhold support for a production boost. “Then you have the Saudis acting independently,” she said.The OPEC ministers meeting Friday will be followed by a meeting with Russia and other non OPEC producers. Ahead of that, they will be attending an OPEC summit Wednesday and Thursday, which includes global energy ministers as well as the CEOs of international companies like Total and BP, and U.S. producers Pioneer and Hess.
“It’s a weird dynamic. The Russians aren’t liking the U.S. getting up to 11 million barrels a day. They’ve foregone a lot of market share,”
OPEC announced in March that it would invite U.S. producers to the seminar to discuss shale production and technology, as the world’s largest economy continues to churn out massive amounts of crude. The U.S. has been pumping record amounts of oil week after week, with the latest weekly figures showing production of just under 11 million barrels a day.
U.S. output has surpassed Saudi Arabia, and its growing market share is another factor that makes production cuts difficult for OPEC and Russia.
“The Saudis really have a sense of obligation with Trump, after he ditched the Iran nuclear deal,” said Again’s Kilduff. “It’s a weird dynamic. The Russians aren’t liking the U.S. getting up to 11 million barrels a day. They’ve foregone a lot of market share,” he added.
“They could stick it to the U.S. and send prices lower to shake out some of our shale guys. They’ve got something up their sleeve.”
(Reuters) – U.S. energy companies added one oil rig this week, the fourth consecutive week of increases, despite a 9 percent decline in crude prices over the past four weeks. Despite that decline, producers still expect higher prices for their oil in 2018 than they received in 2017. The oil rig count in the week to June 15 rose to 863, the highest level since March 2015, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. That was the tenth time drillers added rigs in the past 11 weeks, although the increases have slowed down in June to about one a week. The U.S. rig count, an early indicator of future output, is much higher than a year ago when 747 rigs were active as energy companies have been ramping up production in tandem with OPEC’s efforts to cut global output in a bid to take advantage of rising prices. U.S. crude futures were on track to fall for a fourth week in a row this week, falling below $65 per barrel on Friday ahead of an OPEC meeting next week where Saudi Arabia and Russia were expected to say they will boost output.
So far this year, U.S. oil futures have averaged $65.15 per barrel. That compares with averages of $50.85 in 2017 and $43.47 in 2016.
Looking ahead, crude futures were trading around $64 for the balance of 2018 and below $62 for calendar 2019. In anticipation of higher prices in 2018 than 2017, U.S. financial services firm Cowen & Co this week said the exploration and production (E&P) companies they track have provided guidance indicating a 13 percent increase this year in planned capital spending. Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast average total oil and natural gas rig count would rise to 1,038 in 2018, 1,097 in 2019 and 1,232 in 2020, up from a projected 1,025 in 2018 and 1,125 in 2019. So far this year, the total number of oil and gas rigs active in the United States has averaged 999, up sharply from 2017’s average of 876. That keeps the total count for 2018 on track to be the highest since 2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.
The U.S. Energy Information Administration (EIA) projected average annual U.S. production will rise to a record high 10.8 million barrels per day (bpd) in 2018 and 11.8 million bpd in 2019 from 9.4 million bpd in 2017.
The current all-time U.S. annual output peak was in 1970 at 9.6 million bpd, according to federal energy data.
WASHINGTON (Reuters) – A proposal to simplify a rule banning banks from proprietary trading, rather than making life easier for Wall Street, could ensnare billions of dollars’ worth of assets not currently caught by the regulation. This little-noticed wrinkle, if it were to make it into the final rule, could prompt Wall Street firms to overhaul their treasury, trading and merchant banking operations and change their accounting practices, lawyers and executives told Reuters. On May 30, U.S. regulators unveiled a plan to modify the so-called Volcker Rule introduced following the 2007-2009 financial crisis, aiming to make compliance easier for many firms and relieving small banks altogether. Wall Street has long complained about the complexity and subjectivity of the rule, which bans banks that accept U.S. taxpayer-insured deposits – such as Goldman Sachs Group Inc JPMorgan Chase & Co and Morgan Stanley from engaging in short-term speculative trading. Republicans, the business lobby and analysts initially welcomed the proposal as a long overdue move to streamline and clarify the rule, while consumer advocates and progressive Democrats criticized it as a risky Wall Street giveaway. But after digesting the 494-page consultation, financial industry executives and lawyers said it could actually create new headaches for big banks by banning a swath of trades and long-term investments not currently covered by the rule. “It’s going to capture trades that wouldn’t be captured by the current regulation and that’s the bogeyman people would want to avoid in this proposal,” said Jacques Schillaci, a banking lawyer at Linklaters LLP who has studied the proposal. The draft is subject to a 60-day consultation period during which industry participants will lobby for changes, with a final version, which is likely to be substantially revised, expected around January. One of the most-hated aspects of the Volcker Rule presumes purchases and sales of instruments within 60 days count as proprietary unless the bank can prove they qualify for an exemption, such as market making or hedging. Regulators have proposed replacing it with a more objective test, based on the accounting treatment of the instruments traded.
Under the new test, trading activity by desks that daily book net realized or unrealized gains and losses exceeding $25 million is only allowed if the bank shows that trading qualifies for the rule’s exemptions. Since the crisis, however, banks have applied this mark-to-market or “fair value” accounting treatment to a range of longer-term investments to better manage their risk. As a result, the proposal would bring under the rule the vast majority of equity investments, derivatives and a range of fixed income securities that banks hold for many years but not to maturity. While some of these investments, such as U.S. treasuries, other government-related securities and some derivatives, would qualify for exemptions, many would end up being prohibited given the relatively low $25 million threshold, the industry experts said. This could disrupt how bank groups structure their trading desks and manage their strategic investments and risk. The proposal may also prompt banks to elect not to mark-to-market some assets.
(Dr. Scott M. Lieberman via AP)
Conservative columnist George Will disagreed with recent comments by Tennessee GOP Sen. Bob Corker who described supporters of President Donald Trump as “cult-like,” instead maintaining that what the president instilled in the Republican Party was “fear,” The Hill reported Saturday. “We are in a strange place. I mean, it’s almost, it’s becoming a cultish thing, isn’t it? And it’s not a good place for any party to end up with a cult-like situation as it relates to a president that happens to be of — purportedly, of the same party,” Corker told reporters Wednesday. Will, in an appearance on the HBO show “Real Time With Bill Maher” on Friday, took issue with Corker’s assessment. “It’s not a cult. A cult implies misguided, if sincere, worship. This is fear,” Will said. “They’re not worshipful, they are invertebrates. They are frightened.” Maher argued that Trump’s high approval nationally among Republican voters did not indicate fear, to which Will then attacked people who voted for the president, calling them “vengeful.” “Well, it’s a cult of personality for his supporters, and his supporters are nothing if not vengeful,” Will said. Will then cautioned against the idea that the popularity of a political figure such as Trump could only happen in the Republican Party. “Let me give Democrats a warning,” Will told Maher. “In the summer of 2015, you had 18 Republican candidates on stage and the most lurid stood out. In the summer of 2018, there will be 18 Democrats on stage and maybe the most lurid will stand out there. “The idea that only the Republican Party or only the right can produce something like Donald Trump is naive and cheerful,” he said. Will, a frequent critic of Trump, last December called him the worst president in U.S. history. “He completed his remarkably swift — it has taken less than 11 months — rescue of the 17th, Andrew Johnson, from the ignominy of ranking as the nation’s worst president,” Will wrote in The Washington Post.
The person, like the other sources familiar with the administration’s thinking, declined to be identified because they were not authorised to speak to the media.
A Reuters analysis of U.S. Census Bureau import data in April showed that there were about 7,600 consumer and industrial goods still available for tariffs with a combined value of $101 billion in which China accounts for 40 percent or less of U.S. imports.
Another person familiar with the administration’s thinking said it could be difficult to reach $100 billion with a 33 percent threshold.
Press officials at the U.S. Commerce Department and U.S. Trade Representative’s office declined to comment on the tariff list plans.
Trump has pledged to enforce fair and reciprocal trading relations with China, with the U.S. bilateral trade in goods deficit having reached $375 billion last year, and amid long-running complaints of what foreign companies see as forced technology transfers and market restrictions.
On Thursday, China reiterated its preference for dialogue to resolve differences, but said it was ready to respond if Trump moved forward with tariffs.
Speaking alongside U.S. Secretary of State Mike Pompeo in Beijing, Chinese State Councillor Wang Yi said there were two choices when it came to trade.
“The first choice is cooperation and mutual benefit. The other choice is confrontation and mutual loss. China chooses the first,” Wang told reporters. “We hope the U.S. side can also make the same wise choice. Of course, we have also made preparations to respond to the second kind of choice.”
China has published its own list of threatened tariffs on $50 billion in U.S. goods, including soybeans, aircraft, and autos, and has said it would hit back if Washington followed up with further measures.
(Reuters) – U.S. stocks fell on Friday after the United States announced tariffs on $50 billion worth of Chinese goods, prompting Beijing to warn of retaliation and reigniting fears of a trade war between the world’s two largest economies. BA.N), the single largest U.S. exporter to China, fell 2 percent, dragging the Dow lower for the fourth day in a row. Construction equipment maker Caterpillar (CAT.N) dropped 2.9 percent, agricultural trader Bunge (BG.N) 1.9 percent and automaker General Motors (GM.N) 1.5 percent. “With the announcement of the tariffs, there’s a real risk that we can see a continued increased escalation,” said Robin Anderson, senior economist at Principal Global Investors in Des Moines, Iowa. “But you still have the underlying environment of strong economic fundamentals, at least in the U.S., which dampens the negative impact coming from these pockets of volatility.”Also weighing on the indexes were oil prices, which tumbled more than 3 percent ahead of an OPEC meeting next week where two of the world’s biggest producers are expected to indicate an increase in output. [O/R] The energy index .SPNY fell 1.8 percent and was the biggest decliner among the major S&P sectors. President Donald Trump said in a statement that a 25 percent tariff would be imposed on an initial list of strategically important imports from China from July 6 and vowed further measures if Beijing struck back. In response, China’s Commerce Ministry said it planned to impose tariffs of similar size and intensity. Beijing has published its own list that targets $50 billion in U.S. goods, including soybeans, aircraft and autos. The two countries have held three rounds of high-level talks since early May that have yet to yield a compromise, with the United States pressing China to resolve issues over its industrial policy, market access and a $375 billion trade gap. Boeing (
Sen. John Kennedy, R-La. pointed out that both Bank of America and Citigroup now have policies that place restrictions on what their business banking clients can sell and manufacture when it comes to firearms Sen. John Kennedy, R-La., argued in a new opinion piece that big banks are threatening to violate Americans’ Second Amendment rights. Writing for Fox News, Kennedy pointed out that both Bank of America and Citigroup now have policies that place restrictions on what their business banking clients can sell and manufacture when it comes to firearms. “Grocery stores might decide not to sell liquor or lottery tickets, even though it’s legal for people of a certain age to buy them. Grocery stores might ask customers to leave their firearms at home,” Kennedy wrote. “But banks are not grocery stores. A grocery store doesn’t need a taxpayer-funded government charter to operate, a taxpayer-funded government corporation (the Federal Deposit Insurance Corporation) to insure its deposits, or a taxpayer-funded government bank to pay it interest. Banks do.” Kennedy noted that banks like these two are tagged by the federal government as too big to fail, meaning they can be bailed out by American taxpayers to they can stay afloat. The banks’ new policies, the lawmaker argued, are creating a massive rift. “By playing politics and forcing policies that trample on the Second Amendment, Citigroup and Bank of America have established red banks and blue banks,” wrote Kennedy, who then expressed concern of other banks following suit. But big banks, Kennedy said, have no business trampling on the Constitution.
The iShares China Large-Cap ETF (FXI) fell more than 1.5 percent in midday Friday trading, tracking for its first seven-day losing streak since December 2016. The ETF tracks major Chinese companies traded in Hong Kong. Friday’s drop came as major U.S. stock indexes fell on fears of a trade war between the U.S. and China. For the week, the ETF was trading 3.9 percent lower, tracking for its worst week since March 23.
In addition to worries about trade, Chinese data on retail sales and industrial activity missed expectations, raising concerns about economic slowdown. Just seven components are up for the week, led by Anhui Conch Cement. Chinese tech giant Tencent, the largest company by market capitalization in the ETF, fell 1.25 percent in the last week. Other major decliners included Industrial and Commercial Bank of China and PetroChina. ZTE was by far the worst performer, falling nearly 49 percent this week after ending a nearly two-month trading halt on Wednesday. The Chinese telecom equipment giant settled with the U.S. last week to pay up to $1.4 billion for violating a March 2017 agreement. Until it makes the payment, ZTE remains banned from buying from U.S. components. The second-worst performing stock, China Molybdenum, a chemicals company, fell 14 percent this week.
BEIJING (Reuters) – China’s navy carried out drills in the South China Sea to simulate fending off an aerial attack, state media said on Friday, as the country trades barbs with the United States over responsibility for heightened tension in the disputed waterway. U.S. Secretary of State Mike Pompeo expressed concern during a visit to Beijing on Thursday over China’s efforts to militarise the seas. His remarks came after a flurry of U.S. activity in the region, including reports last week that U.S. Air Force B-52 bombers had flown near disputed islands that drew a sharp rebuke from China. China’s navy carried out a simulated missile attack in an unspecified area of the South China Sea using three target drones making flyovers of a ship formation at varying heights, the official army newspaper said. The drills were part of efforts by a training base, also unspecified, to prepare for real-life combat with aerial targets after China’s leadership said some training failed to prepare troops effectively, it added. The United States and China have frequently sparred over who is militarising the South China Sea, with Beijing blaming tension on actions such as the “freedom of navigation” operations by the U.S. navy. Washington says such operations are necessary to counter China’s efforts to limit nautical movement there. A U.S. Navy destroyer sailed through waters claimed by China in May just days after the United States withdrew an invitation to it for a major U.S. hosted naval drill. Critics have said the operations have little impact on Chinese behaviour and are largely symbolic. Pentagon officials have long complained that China has not been candid enough about its rapid military build-up and its use of South China Sea islands to gather intelligence. In addition to China, Brunei, Malaysia, the Philipines, Taiwan, and Vietnam all have competing claims in the South China Sea. Strengthening the navy has been a key part of China’s ambitious military modernisation overseen by President Xi Jinping, as it seeks to project power far from its shores. State television on Friday showed pictures of Xi touring a submarine in the northern port city of Qingdao, where was briefed on its weapons systems, chatted with sailors and asked questions about the submarine fleet’s training.
Reporting by Christian Shepherd; Additional reporting by Ben Blanchard; Editing by Clarence Fernandez
Defense Secretary James Mattis tore into Russian President Vladimir Putin Friday for underming US elections
Defense Secretary James Mattis tore into Russian President Vladimir Putin Friday for assaulting Western democracy and undermining one of America’s most powerful alliances, amid President Donald Trump’s repeated calls for Russia’s return to the G-7 nations. “Putin seeks to shatter NATO,” Mattis said during his remarks at the U.S. Naval War College graduation. “He aims to diminish the appeal of the Western democratic model and attempts to undermine America’s moral authority.” Mattis singled out Putin’s seizure of the Crimean Peninsula from Ukraine in early 2014. In response to Putin’s actions, the United States, the European Union and a number of other nations imposed sanctions against Russia. And the G-8 nations kicked Russia out of the group, marking a return to the G-7 format, made up of the United States, the United Kingdom, France, Germany, Italy, Canada and Japan. “For the first time since World War II, Russia has been the nation that has redrawn international borders by force of arms in Georgia and Ukraine, while pursuing veto authority over their neighbors’ diplomatic, economic and security decisions,” Mattis said. “His actions are designed not to challenge our arms, but to undercut and compromise our belief in our ideals,” he added.
SHANGHAI — China’s government has been trying to break the country’s addiction to ever-rising debt, but its effort to crack down on easy money is starting to hit growth in the world’s second-biggest economy. Beijing has been concerned in recent years about the increased reliance on credit to keep the economy expanding briskly, worrying that it could lead to a financial crisis, or to a long period of stagnation like the one in Japan after the real estate market burst in the early 1990s. But curbing debt may have significant consequences in China and elsewhere. Countries around the world are much more closely tied to China than ever before, not just because of its role as the world’s biggest manufacturer by far, but also, increasingly, as a consumer. An economic slowdown in China — coupled with the knock-on effects of widening trade disputes and slowing growth in Europe — may augur poorly for a global economy that even recently seemed in rude health. Domestically, China’s credit crackdown has affected smaller businesses hardest. Though the country often appears to be dominated by its vast conglomerates and hulking state-owned enterprises, its economy is, in reality, somewhat more reliant on small businesses than its Western counterparts. And the way Beijing has gone about curbing lending in recent months is unintentionally hitting the most entrepreneurial segments of the economy, the governor of China’s central bank acknowledged in a speech on Thursday in Shanghai. Over all, there is growing evidence that a credit crunch is taking a toll on the Chinese economy. The National Bureau of Statistics released data in Beijing on Thursday showing that investment, retail sales and industrial production all slowed in May. The slowdowns in investment and retail sales were particularly sharp and unexpected. With that backdrop of eroding economic growth, the People’s Bank of China, the country’s central bank, conspicuously did not match on Thursday the Federal Reserve’s increase to interest rates on Wednesday. It had at least partially matched previous Federal Reserve interest rate rises since the autumn. With the Chinese economy showing signs of slowing and the authorities making it harder to borrow, small businesses are particularly vulnerable. They represent about three-fifths of economic output in China, compared with around half in Germany, Japan and the United States, according to Yi Gang, the governor of the People’s Bank of China. Now many of those small businesses are struggling for loans because of a wide-ranging government crackdown. Moody’s and Standard & Poor’s both downgraded China’s sovereign debt credit rating last year because of concerns about the country’s debt overhang. Even before deciding on Thursday morning not to match the Fed’s rate increase, though, the Chinese government had already made a pair of moves that appear to have been elaborately crafted to channel more money to smaller, more entrepreneurial businesses.
Corruption replacing competition at the heart of our economy
President Donald Trump recently directed Secretary of Energy Rick Perry to prepare steps to subsidize coal and nuclear power plants, which are struggling to compete against cheaper, cleaner alternatives. This directive would bail out some of his largest donors while increasing energy costs for millions of Americans, showing once again the grift and graft ethos at the center of his economic policy. Coal barons Bob Murray and Joseph Craft, who have strongly pushed the bailout, have given Trump and Trump-aligned groups millions of dollars. FirstEnergy Solutions FE, +1.90% , another company that would benefit, paid Perry’s former campaign manager Jeff Miller more than $300,000 to lobby Perry for the bailout. Miller is also a major fundraiser for a Trump Super PAC, which got him access to Trump at an exclusive donor dinner; and the day after the dinner, Trump signaled his support for the coal baron bailout. Sadly, backroom deals with political donors have become the norm for the Trump administration. Rather than a focus on improving economic growth or creating good-paying jobs, Trump and his allies focus on helping friends, punishing enemies, and leaving everyone else with the bill. Trump’s culture of corruption leads to a system that rewards payoffs and cronyism, not innovation and excellence. That’s a recipe for disaster that has failed in every country that has tried it. Nowhere is this corrupt mentality more evident than in the long-standing pillars of the conservative economic agenda: tax cuts and deregulation. Trump and his allies promised a tax plan focused on closing loopholes and helping the middle-class. Instead, the donor-driven tax cut shifted massive amounts of money to the wealthiest Americans and large corporations, while creating scores of new special-interest loopholes. As Republican Congressman Chris Collins famously said, “My donors are basically saying, ‘Get it done or don’t ever call me again.’” Members of Congress and even the president himself received sizeable tax cuts too. The authors of the tax bill also sought to punish their political opponents, hurting the American people in the process. Stephen Moore, one of Trump’s top economic advisers on the campaign, said the bill would hurt Democratic states and Democratic policy priorities, like providing people with affordable health care. And now that they’ve provided these huge giveaways, Republicans are looking to pay for it with cuts to programs like Social Security, Medicare, and Medicaid. Department of the Interior closed a loophole that had decreased royalty payments to the federal government for coal extracted from publicly owned lands — the loophole cost American taxpayers up to $85 million a year. But the Trump administration quickly reopened it, responding to an effort driven in large part by Cloud Peak Energy CLD, -0.80% , one of the largest donors to Secretary of the Interior Ryan Zinke when he ran for Congress in 2016. Corruption in our politics has been a serious issue for some time, but Trump has made the problem that much worse with his singular focus on abusing government’s power to help his friends and hurt his enemies, all without caring about the effects of his actions on the broader public.
LONDON (Reuters) – Rolls-Royce (RR.L) is to cut 4,600 jobs over two years in the latest attempt by boss Warren East to reduce costs and complexity and make Britain’s best known engineering company more profitable and dynamic. East, a softly-spoken former tech boss, has overhauled the 134-year-old Rolls since he took charge in 2015 but the new cuts come as the group grapples with an aero-engine problem that has grounded planes and angered clients. The announcement, which East said is not linked to the Trent 1000 engine issue, marks the biggest round of job cuts since the company had to retrench during the aviation crisis that followed the 9/11 attacks in the United States in 2001. The plan will remove 10 percent of the workforce, targeting duplication in corporate, administration and management roles to try to save 400 million pounds ($536 million) a year by 2020. Two thirds of the job cuts will fall in Britain. Rolls is the biggest employer in the city of Derby, central England, with 15,700 at its headquarters. “Rolls-Royce is at a pivotal moment in its history,” East told reporters. “We are poised to become the world leader in large aircraft engines. But we want to make the business as world class as our engineering and technology.“We are proposing the creation of a much more streamlined organization. We have to significantly reduce the size of our corporate center, removing complexity and duplication that makes us too slow, uncompetitive and too expensive.” The cuts will not affect its engineers, Rolls said. The news has echoes of an announcement from BT last month, another venerable company that is cutting 13,000 managerial and back-office jobs to reduce bureaucracy and respond faster to its customers’ needs. East, who built the chip designer ARM Holdings from a start-up into Britain’s biggest tech company, has complained that Rolls, a rival to General Electric is too complex and cumbersome due to layers of bureaucracy above the shopfloor. Driving home his new focus, he has set a 2020 free cash flow target of 1 billion pounds, a sizeable jump from the 273 million pounds recorded in 2017, off revenue of 15 billion pounds. The major restructuring, costing a total of 500 million pounds between 2018 and 2020, will be reported as separate one-off costs, allowing it to stick to its targets for free cash flow.
An Ottawa man posted a “Trump-free grocery cart” full of products from Canada or from “countries with strong leadership.”
Vacationers said they would be staying up north this summer instead of booking trips to the US.
“F–k you Trump. We just booked a $3,000 vacation to beautiful British Columbia. Happy anniversary to us. #Canadastrong #BuyCanadian #F***Tariffs,” tweeted Supreme Leader Lyna.
And one Twitter user called on “Patriotic Americans” to schedule vacations in Canada and increase their purchases of Canadian goods.
Trudeau acknowledged the support of individual Canadians during an event at Parliament earlier this week. “There’s a bit of a patriotic boost going on these past few days,” he said. Trump and Trudeau are locked in a tiff over tariffs after the president last week said he would impose penalties on steel and aluminum imports. The squabble escalated over the weekend at the G7 meeting of economic powers in Quebec when Trudeau said in a news conference that Canada would not be “pushed around” by the US and called the tariffs “insulting.” Trump heard the remarks as he flew in Air Force One to his summit in Singapore with North Korea’s Kim Jong Un and withdrew from a statement issued by the G7 on trade. He also blasted Trudeau in a tweet, calling him “very dishonest & weak.”
DHAHRAN, Saudi Arabia (Reuters) – Saudi Aramco plans to boost investments in refining and petrochemicals to secure new markets for its crude, and sees growth in chemicals as central to its downstream strategy to lessen the risk of a slowdown in oil demand. Aramco, the world’s biggest oil producer, is expanding its footprint globally by signing downstream deals and boosting the capacity of its plants, ahead of an initial public offering next year – the largest IPO in history. The state oil giant is moving ahead with multi-billion-dollar projects in China, India and Malaysia and aims to finalize new partnerships this year, Abdulaziz al-Judaimi, Aramco’s senior vice president for downstream, told Reuters. Aramco plans to raise its refining capacity to between 8 million and 10 million barrels per day, from some 5 million bpd now, and double its petrochemicals production by 2030, he added. Aramco pumps around 10 million bpd of crude oil. “Our strategy is very simple. We want to be at 8 to 10 million barrels per day of participated (refining) capacity … (and) we are going forward by trying to be a top leader in chemicals by 2040,” Judaimi said. “The market that we want to grow in … has to be growing, a strong market, with good demand and of course these assets have to be integrated to the whole value chain of the downstream,” he said in an interview at Aramco’s headquarters in Dhahran. To help it reach these targets, Aramco has entered a 50 percent joint venture with three Indian refiners to build a $44 billion, 1.2-million-bpd refinery integrated with petrochemical facilities on India’s west coast. Aramco has said it may introduce a strategic partner to share its 50 percent stake in the Indian refining venture.Judaimi said Aramco was working with Abu Dhabi National Oil Co (ADNOC) toward securing a partnership. It would be the first time for the two national oil companies to join hands in an international venture.
LONDON (Reuters) – The oil industry will face the biggest squeeze on its spare production capacity in more than three decades if OPEC and its allies agree next week to hike crude output, leaving the world more at risk of a price spike from any supply disruption. Spare capacity is the extra production oil producing states can bring onstream and sustain at short notice, providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage. That buffer could shrink from more than 3 percent of global demand now to about 2 percent, its lowest since at least 1984, if the Organization of the Petroleum Exporting Countries, Russia and other producers decide to increase output when they meet on June 22-23, U.S. bank Jefferies said. “You would essentially be taking 3.2 million barrels per day (bpd) of spare capacity down to approximately 2 million bpd,” Jefferies analyst Jason Gammel said, adding global demand was 100 million bpd. Saudi Arabia, OPEC’s de facto leader which has indicated its support for hiking output at next week’s meeting in Vienna, has said it is alert to the potential squeeze on the market. “We are concerned about tight spare capacity nowadays,” Saudi Energy Minister Khalid al-Falih told Reuters last month, although he also said the industry was in “better shape” than in 2016 when oil prices plunged below $30 a barrel. OPEC and its allies have been curbing supply since January 2017 to boost oil prices and cut bloated global inventories. The price of crude has since surged, climbing above $80 a barrel last month, while inventories have also fallen. The precise level of spare capacity available depends in part on how it is defined. The Paris-based International Energy Agency (IEA), which bases its figures on oil production that can be brought onstream within 90 days and sustained for an extended period, estimates OPEC’s spare production capacity was 3.47 million bpd in April, with Saudi Arabia accounting for roughly 60 percent. Based on the EIA definition, Robert McNally at consultancy Rapidan Energy Group said Saudi Arabia, Russia, Kuwait and United Arab Emirates together had spare capacity of about 2.3 million bpd. But Saudi Arabia could even boost production beyond its stated output capacity of about 12.5 million bpd, possibly adding another 1 million bpd of what is known as surge capacity.
The International Energy Agency (IEA) believes a recent spike in the oil price could soon start to ease, helping to alleviate concerns that surging prices could hurt demand and global economic growth. “Prices are unlikely to increase as sharply as they did from mid-2017 onwards and thus the dampening effect on demand will be reduced,” the Paris–based organization said in its latest monthly report published Wednesday. Rising oil prices have created question marks over the strength of demand, but the IEA left its oil demand growth forecast for 2019 largely unchanged, at 1.4 million barrels a day (mb/d), similar to this year’s level. However, it cautioned that there are possible downside risks to the demand outlook, including “the possibility of higher prices, a weakening of economic confidence, trade protectionism and a potential further strengthening of the U.S. dollar.”
In terms of supply, the IEA revised upwards its estimate for 2018 non-OPEC production growth to 2 mb/d and said 2019 would also see what it called “bumper growth” of 1.7 mb/d. Most of that non-OPEC supply growth would come from the U.S., it said. The IEA’s latest report comes amid uncertainty over the amount of oil production we can expect to see from major producers in coming months. OPEC and non-OPEC producers including Russia are continuing with a deal to curb their supply, but the strategy is seen to have been effective with Brent and West Texas Intermediate (WTI) now trading around $75 and $66, respectively. The OPEC and non-OPEC producers agreed back in November 2016 to curb supply in order to boost then-low oil prices. There are now fears that prices could rise steeply if supplies are disrupted from OPEC members Venezuela and Iran. The former is experiencing economic turmoil and the latter is facing a re-imposition of sanctions after the U.S. withdrawal from Iran’s nuclear deal. OPEC and non-OPEC producers are meeting in Vienna on June 22 to discuss the supply situation. The encounter could be fractious with arguments expected between producers over whether to increase production or maintain supply as it is — given rising prices and potential supply disruptions. There is also the specter of competition from U.S. shale oil producers and a reluctance to cede more market share to them. Saudi Arabia and Russia are reportedly ready to increase oil output, while others like Iran and Iraq are against such a move. The IEA said that, for its part, it had looked at a scenario (not a forecast, it emphasized) that by the end of next year output from these two countries could be 1.5 mb/d lower than it is today. It said Middle East OPEC producers could make up for the loss and increase production by about 1.1 mb/d. “And there could be more output from Russia on top of the increase already built into our 2019 non-OPEC supply numbers,” it added.
The Federal Reserve hiked its benchmark short-term interest rate a quarter percentage point Wednesday and indicated that two more increases are likely this year. The move pushes the funds rate target to 1.75 percent to 2 percent. The rate is closely tied to consumer debt, particularly credit cards, home equity lines of credit and other adjustable-rate instruments. In an unusually terse statement that ran just 320 words, the Federal Open Market Committee changed multiple phrases from its previous missives, pointing to a more optimistic view on economic growth and higher inflation expectations. Though the statement contained less than half the words of some of the committee’s typical communiques, there was a lot to unpack in the language. The committee said economic growth has been “rising at a solid rate,” an upgrade from “moderate” in May. The unemployment rate has “declined,” as opposed to “stayed low,” and household spending “has picked up,” an upgrade from “moderated.” With that in mind, the committee said two more rate hikes were appropriate, bringing the 2018 total to four increases. Its first hike this year was in March. “The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term,” the statement said. Markets had been waffling over expectations for a fourth rate hike this year — the FOMC also increased the funds rate target in March — and prior to the meeting were pricing in a 46.5 percent chance. The latest projections from committee members indicate the funds rate to rise to 2.4 percent by the end of the year. The committee also indicated it continues to expect three more rate hikes in 2019, even with the fourth one this year.
WASHINGTON (AP) — President Donald Trump declared on Wednesday there was “no longer a Nuclear Threat from North Korea,” a dubious claim following his summit with leader Kim Jong Un that produced no guarantees on how or when Pyongyang would disarm. Tempering Trump’s very upbeat assessment, his top diplomat, Mike Pompeo, cautioned that the U.S. would resume “war games” with close ally South Korea if the North stops negotiating in good faith. The president had announced a halt in the drills after his meeting with Kim on Tuesday. The summit in Singapore, which marked a major reduction in tensions, yielded a joint statement that contained a promise to work toward a denuclearized Korean Peninsula, but it lacked details. That didn’t stop the president from talking up the outcome of what was the first meeting between a U.S. and North Korean leader in six decades of hostility. The Korean War ended in 1953 without a peace treaty, leaving the two sides in a technical state of war.
“Just landed – a long trip, but everybody can now feel much safer than the day I took office,” Trump tweeted early Wednesday. “There is no longer a Nuclear Threat from North Korea. Meeting with Kim Jong Un was an interesting and very positive experience. North Korea has great potential for the future!”
While Trump was facing questions at home and among allies about whether he gave away too much in return for far too little at the summit, North Korean state media heralded claims of a victorious meeting with the U.S. president; photos of Kim standing side-by-side with Trump on the world stage were splashed across newspapers. Trump’s claim that North Korea no longer poses a nuclear threat is questionable considering Pyongyang’s significant weapons arsenal. Independent experts say the North could have enough fissile material for anywhere between about a dozen and 60 nuclear bombs. Last year it tested long-range missiles that could reach the U.S. mainland, although it remains unclear if it has mastered the technology to deliver a nuclear warhead that could re-enter the atmosphere and hit its target. Freezing the regular military exercises with South Korea is a major concession to North Korea that has long claimed the drills were invasion preparations. It appeared to catch the Pentagon and officials in Seoul off guard, and some South Koreans were alarmed. Trump cast the decision as a cost-saving measure, but also called the exercises “inappropriate” while talks continue. In Japan, the prospect of canceled U.S.-South Korean drills was met with concern. “The U.S.-South Korea joint exercises and U.S. forces in South Korea play significant roles for the security in East Asia,” Defense Minister Itsunori Onodera told reporters Wednesday. He said he planned to continue sharing the view with Washington and Seoul. The U.S. has stationed combat troops in South Korea since the end of the Korean War and has used them in a variety of drills. The next scheduled major exercise, involving tens of thousands of troops, normally would be held in August.
As attorneys for Michael Cohen rush to meet Judge Kimba Wood’s Friday deadline to complete a privilege review of over 3.7 million documents seized in the April 9 raids of Cohen’s New York properties and law office, a source representing this matter has disclosed to ABC News that the law firm handling the case for Cohen is not expected to represent him going forward. To date, Cohen has been represented by Stephen Ryan and Todd Harrison of the Washington and New York firm, McDermott, Will & Emery LLP. No replacement counsel has been identified as of this time.
Cohen, now with no legal representation, is likely to cooperate with federal prosecutors in New York, sources said. This development, which is believed to be imminent, will likely hit the White House, family members, staffers and counsels hard.
After the federal raids on Cohen’s properties, President Trump lashed out in a tweet, writing, “Attorney-client privilege is dead!” He told reporters at the White House that the move against his longtime personal attorney, which he likened to a break-in, was a “disgraceful situation.” “It’s an attack on our country in a true sense. It’s an attack on all we stand for,” the president said during a meeting with senior military leadership at the White House. “That is really now on a whole new level of unfairness.” Judge Wood subsequently appointed former federal judge Barbara Jones to act as a “special master” to conduct an impartial review of the materials and to referee any disputes between Cohen and the government. Trump and the Trump Organization intervened in the case and were also granted access to review the materials for potentially privileged items. Jones reported last week that of the first 300,000 items reviewed, she had determined that just 162 of them were covered by attorney-client privilege. She rejected three items that Cohen, Trump or the Trump organization had designated as privileged. Judge Wood has given Cohen’s attorneys until Friday to complete the review of the remaining documents. Any remaining items to be reviewed would be turned over to a team of federal prosecutors unconnected to the case to complete the examination of the documents.
SINGAPORE (Reuters) – Toyota Motor Corp has agreed to buy a $1 billion stake in Southeast Asia’s Grab in the biggest investment by a carmaker into a ride-hailing firm, at a time when traditional automakers are racing to team up with disruptive tech companies. The value of six-year-old Grab will be just over $10 billion after the investment, said a person familiar with the matter. The deal comes as the auto industry faces a spike in the need for technological prowess with the advent of features such as autonomous driving, while app makers offer passengers the option to forgo car purchases by connecting them with drivers. Some automakers have responded by partnering with makers of ride-hailing apps which dominate the fast-growing field of mobility services, in anticipation of a future of reduced car ownership. General Motors Co has invested in U.S. ride services firm Lyft, whose rival Uber Technologies Inc [UBER.UL] is also backed by Toyota. Meanwhile Japan’s SoftBank Group Corp – also an investor in Grab and Uber – last month said it would invest $2.25 billion in GM’s autonomous vehicle unit Cruise. Toyota’s trading arm invested an undisclosed sum in Grab last year. This time, the automaker is lead investor in a financing round launched after Grab acquired Uber’s operations in Southeast Asia, a region of 640 million people. Grab called it the largest-ever investment globally by an automotive manufacturer in the ride-hailing sector. The Singapore-headquartered firm did not disclose how much fresh capital it aims to raise. It raised $2.5 billion in its last round in July, resulting in a reported value of $6 billion. Grab said it logs six million rides a day via apps downloaded onto over 100 million mobile devices. The firm also offers online to offline services, such as food delivery and digital payments, which it aims to expand deeper into the region using funds from its latest financing round. “We will work with partners like Toyota to continue to transform transportation in Southeast Asia,” Grab said in an email. “We want to be the one-stop mobility platform for users.” “Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia,” Toyota executive Shigeki Tomoyama said in a statement. The data could also help Toyota develop its own next-generation mobility services, including a self-driving electric vehicle aimed at companies for use in tasks such as ride hailing, package delivery and mobile shops.
A federal judge said Tuesday that AT&T’s $85.4 billion purchase of Time Warner is legal, clearing the path for a deal that gives the pay-TV provider ownership of cable channels such as HBO and CNN as well as film studio Warner Bros. U.S. District Court Judge Richard Leon did not impose conditions on the merger’s approval. He also urged the government not to seek a stay when issuing his decision in a closed-door room with reporters. AT&T General Counsel David McAtee said the company was happy with the result. “We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner,” McAtee said in a statement. “We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.” Shares of Time Warner jumped roughly 5 percent in extended trading. Shares of AT&T dropped as much as 2 percent. Assistant Attorney General Makan Delrahim said the Justice Department was disappointed with the decision. “We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner. We will closely review the Court’s opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers,” Delrahim said in a statement. The outcome of the trial could spur a wave of deals in the telecom and media industries, as well as clear the way for future vertical mergers, where a company buys its supplier. Comcast has been eyeing a similar merger to combine production and distribution in a competing bid for Twenty-First Century Fox and was preparing to announce an offer as soon as Wednesday if Leon ruled in favor of AT&T in the trial, people familiar with the matter told CNBC. Comcast shares dipped 4 percent after the AT&T-Time Warner decision. Shares of Fox rose 4 percent.
WASHINGTON—The U.S. government’s budget deficit widened in the first eight months of its fiscal year, reflecting lower revenues from corporate taxes combined with ramped-up government spending. The deficit, or the difference between the amount of money the federal government spent and what it took in, totaled $532.24 billion in October through May, the Treasury Department said Tuesday. That was 23% more than the deficit of $432.85 billion during the same period a year earlier and reflected a 6% rise in government spending that outpaced a 3% increase in revenue. Tuesday’s report showed the federal budget deficit was $146.80 billion in May, 66% wider than the same month a year earlier. Government revenue fell 10% last month compared with a year earlier, while spending grew 11%. Corporate-income taxes from October through May were about 25% lower than the first eight months of fiscal 2017, pulling down revenues. “You have corporations paying less in taxes at the same time that they’re getting more in deductions,” said Lindsay Koshgarian, program director at National Priorities Project. “It’s kind of a double whammy of paying less.” Over the same period, individual income taxes rose, which could partially be explained by the low unemployment rate. “Individuals are paying more total, but each individual could be paying less,” Ms. Koshgarian said. “If you have more people paying in, you can still get more money out.” Meanwhile, spending in the first eight months of the fiscal year increased from a year earlier for military programs, Homeland Security and Medicare and Medicaid. The rising budget deficit generally tracks with projections from the nonpartisan Congressional Budget Office that spending would outpace revenues. For the full fiscal year, the CBO this spring estimated the budget deficit would total $804 billion, up from the $665 billion shortfall seen in fiscal 2017. The CBO raised its estimate for this year’s deficit largely because tax cuts were expected to translate into lower revenues while the government also ramped up spending on military and domestic programs. The 2018 fiscal year will end Sept. 30.
peace plan talks
President Trump’s Middle East peace team, senior adviser Jared Kushner and special envoy Jason Greenblatt, will travel to Israel, Egypt and Saudi Arabia next week to discuss the next stages of the peace effort and the crisis in Gaza, a senior U.S. official tells me. The official said Kushner and Greenblatt want to discuss lingering questions they have as they finish drafting the peace plan, including the optimal time for launching it. The U.S. official added the trip may include other stops as well, but does not include a meeting with Palestinian officials — who are refusing to meet following Trump’s decision to move the U.S. embassy to Jerusalem.
SINGAPORE (Reuters) – Top White House economic adviser Larry Kudlow, a staunch defender of President Donald Trump’s tough stance on global trade, was in good condition in a Washington-area hospital after suffering a heart attack, the White House said on Tuesday. Trump announced Kudlow’s heart attack in a tweet sent minutes before he met with North Korean leader Kim Jong Un in Singapore. “Our Great Larry Kudlow, who has been working so hard on trade and the economy, has just suffered a heart attack. He is now in Walter Reed Medical Center,” Trump said. Later, White House spokeswoman Sarah Sanders, who was traveling with the president, issued a statement that said Kudlow’s doctors said he had a “very mild heart attack”. “Larry is currently in good condition … and his doctors expect he will make a full and speedy recovery,” she said. A longtime television commentator, Kudlow, 70, was hired by Trump in March to replace Gary Cohn as director of the National Economic Council. Kudlow joined the president at the Group of Seven summit in Quebec on Friday and Saturday. He did several media interviews on Sunday to vigorously defend Trump amid a trade spat between the president and Canadian Prime Minister Justin Trudeau. Trudeau, in a news conference on Saturday, had reiterated his strong objections to steep U.S. tariffs on Canadian exports of steel and aluminum. In return, Trump called the Canadian leader “very dishonest” and “weak,” and said the United States would not endorse a joint G7 communique.
In an interview with CNN on Sunday, Kudlow said Trudeau “really kind of stabbed us in the back.”
When he was a CNBC contributor before taking the White House job, Kudlow argued the metals tariffs Trump had announced would harm consumers. The month he was tapped for the White House job, he co-authored an article that argued such tariffs were akin to sanctions on the United States itself. At the White House, however, he has been one of the most visible and vocal of advisers arguing that the president was simply trying to fix a broken global trade system in which the United States was not being treated fairly. Nick Bit: An example of the corrupting influence of TRUMP. Kudlow has done a 180 on everything he believes to kiss Trumps ASS. Hey Larry GOD is watching!
Italy wil plunge the eurozone into an unmanageable crisis
Italian financial tremors are again rumbling dangerously. Yields on the country’s 10-year government bonds, which briefly topped 3% when President Sergio Mattarella temporarily stopped the 5 Star Movement and the League from forming a government, appear primed to rise even higher, potentially plunging Italy and the eurozone in an unmanageable crisis. Italy is not just a deeply troubled country, it is also large. Its chaotic banking sector is the eurozone’s third largest, following those in France and Germany. The Italian government’s debt, at €2.5 trillion ($2.95 trillion), is about the same size as the debt owed by the French and German governments, and is larger than the combined government debt of Spain, Portugal, Greece, and Ireland, the four countries that needed financial bailouts. An Italian financial crisis would quickly break through the defenses eurozone authorities have constructed. This need not have been. In the 1990s, thoughtful observers understood that Italy did not belong in the eurozone. Italy could not give up its own monetary policy and currency, the lira. Over three decades, between 1970 and 1999, the lira had steadily lost over 80% of its value relative to the German mark. As the new millennium neared, Italy was being out-competed by emergent East European economies and even more dramatically by China. Unable to raise productivity growth, Italy would need more lira devaluations. However, Italy’s top economists and finance officials were keen, indeed desperate, to join the eurozone. They subscribed to the vincolo esterno (external constraint) proposition. They insisted that lacking the escape valve of an ever-depreciating lira, Italy’s political leaders would have no option but to enforce sound fiscal and structural policies to secure a better future for Italians. European Union scholars Kenneth Dyson and Kevin Featherstone say Mario Draghi, currently president of the European Central Bank and then director general of the Italian treasury, “believed in his soul” that the euro would enforce the discipline Italian governments needed. Hubris won the day, and Italy joined the eurozone at its inception on Jan. 1, 1999. But Italy’s fractious governments lacked the patience and durability to deal with the country’s endemic problems. The Italian economy fell into near-zero productivity growth, and despite the benefit of a buoyant world economy from mid-2003, the unemployment rate on the eve of the global financial crisis in 2007 was nearly 7%. Italian banks were eking out meagre profits, and the government’s debt was nearly 100% of GDP. The global crisis between 2007 and 2009, and then the 2011-2013 eurozone crisis magnified Italy’s pre-euro economic and financial fragilities. The euro’s central flaw now came to the fore: a single monetary policy could not work for the strong Germany economy and for an increasingly decrepit Italian economy. Making matters worse, the ECB adopted a much tighter monetary policy stance than either the U.S. Federal Reserve or the Bank of England. By mid-2011, amid over-the-top fiscal austerity demanded by eurozone authorities, Italy desperately needed easy monetary policy and a large euro depreciation. Instead, on July 7, 2011, the ECB made a catastrophic error by raising interest rates, sending financial markets into panic. Between mid-2011 and mid-2012, financial turmoil reigned through much of the eurozone, especially in Spain and Italy. Italy never recovered from that trauma. In July 2012, the ECB’s Draghi tried to heal the wounds with his dramatic promise to do “whatever it takes” to rescue eurozone countries. That led to the Outright Monetary Transactions (OMT) shield, which carried the promise that the ECB would buy unlimited quantities of a member country’s bonds. But although markets calmed down, Italian interest rates remained too high, which, combined with unremitting fiscal austerity, mired the Italian economy in recession.With the ECB continuing to deliver only niggardly monetary stimulus, the unemployment rate soared, reaching nearly 12% by early 2013. Even the jobs available were precarious, and, feeling a sense of hopelessness, large numbers of Italians stopped looking for work. For too many, the financial stress was acute. Anti-European sentiment spread. In the February 2013 elections, the anti-establishment and anti-euro 5 Star Movement emerged as a potent electoral force with a quarter of the vote.
LONDON (Reuters) – Jaguar Land Rover (JLR) is set to cut more jobs in Britain as it moves all production of its Discovery car to lower-cost Slovakia before building its new Range Rover at an English factory. Britain’s biggest automaker, JLR has previously said its next-generation Discovery will be built at its Slovakia plant and on Monday announced there could be some job cuts in Britain as a result. “The potential losses of some agency employed staff in the UK is a tough one but forms part of our long-term manufacturing strategy as we transform our business globally,” the company said in a statement. Moving production from Britain will slash several thousands of pounds off the cost per vehicle, the firm’s Chief Finance Officer Ken Gregor said last year. The new Range Rover and Range Rover sport will however be built at the firm’s central English Solihull plant on an architecture which is designed to allow for diesel, petrol, electric and hybrid models to be produced. Monday’s announcement comes after the firm said this year it will cut 1,000 jobs and reduce production at two of its English factories as demand for diesel cars slumps in the face of higher taxes and a regulatory crackdown. The firm has also blamed Brexit for hitting demand in Europe’s second-largest autos market, where demand fell 6 percent last year, a source told Reuters in April. JLR said in January it would decide this year whether to build electric cars in its home market after announcing all of its new cars will be available in an electric or hybrid version from 2020. The company, owned by India’s Tata Motors, builds nearly one in three of Britain’s 1.7 millions cars but is producing its first electric vehicle, the I-PACE, in Austria. JLR’s new factory in the Slovak city of Nitra is due to begin production by the end of the year and will have a capacity of up to 300,000 vehicles. It already employs 1,400 people there as it gears up to open. In Britain, the firm built just over 530,000 vehicles last year at three production facilities and also has a separate engine site and headquarters, employing roughly 40,000 people in total.
(CNN)With only hours remaining before a historic summit between the leaders of the United States and North Korea, it’s easy to lose sight of what President Donald Trump (and some of his top staffers) said and did just before arriving in Singapore: Blow up an international gathering with some of America’s closest allies with a combination of erratic behavior and hugely impolitic statements. Whatever happens in Singapore over the next day or two, it’s uniquely possible — and maybe even likely — that what Trump did in Quebec on Friday and Saturday will matter more in the country’s long-term geopolitical future, and not in a good way.Let’s detail what happened in the 36-ish hours Trump spent in Quebec — and what he and his allies said once he left.
- Before Trump even jetted to the conference on Friday morning, he floated the possibility of Russia rejoining the G7. (Russia was kicked out of the group after invading Ukraine and annexing Crimea in 2014.)
- Trump arrived late for a gathering of G7 leaders focused on gender diversity on Saturday morning. They started the meeting without him.
- Trump held a, um, wide-ranging news conference before he left Quebec to jet to Singapore. In that presser, he described the meeting as a “10” out of 10 and insisted he had very close personal relationships with, among others, Canadian Prime Minister Justin Trudeau, French President Emmanuel Macron and German Chancellor Angela Merkel.
- After (apparently) watching a Trudeau press conference on Air Force One, Trump took to Twitter to attack the Canadian Prime Minister. “PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, ‘US Tariffs were kind of insulting’ and he ‘will not be pushed around,'” tweeted Trump. “Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!”
- Chief Trump economic adviser Larry Kudlow went on CNN’s “State of the Union” and called Trudeau’s news conference a “betrayal,” adding: “He stabbed us in the back.”
- Peter Navarro, a trade adviser for Trump, was even more damning in his comments about Trudeau. “There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door,” Navarro said on “Fox News Sunday.” “And that’s what bad faith Justin Trudeau did with that stunt press conference. That’s what weak, dishonest Justin Trudeau did, and that confrontation. But it’s worth asking the question of what toll unleashing a full-scale character assassination — “there’s a special place in hell” is pretty strong stuff — on Canada’s head of government means for how the US is perceived in the world. It’s hard to imagine other longtime allies of the US watching the shoddy treatment of Trudeau and wondering “Are we next?” Or, put another way: If Trump is willing to treat Trudeau, who he allegedly really likes, this way, what does that mean for us? That unsettling, again, will be applauded by Trump allies. They should be put on notice! They have been taking advantage of us forever! The reality, however, is different. The US has been a steadying force in international affairs for decades. We have been the prime mover in building and maintaining the post-World War II coalitions that have helped avoid athird world war. If the US no longer plays that role — or shrinks from it in any meaningful way — the balance in the world is shaken and changed. And those changes are unpredictable — and not necessarily beneficial to the United States. Power vacuums and power shifts are filled rapidly in politics and foreign affairs. That is what Trump’s behavior — both this past weekend and more generally speaking — creates the possibility for: Major reorientation of allies and partnerships worldwide. And that could well be a much scarier prospect than Trump’s defenders would like you to believe.
Trump had been scheduled to fly back to Washington on Wednesday morning after spending Tuesday with the North Korean leader in Singapore. But on the eve of the summit, he altered his schedule, opting to return at about 8 p.m. on Tuesday after a full day of meetings with Kim — almost 15 hours earlier than anticipated. “The discussions between the United States and North Korea are ongoing and have moved more quickly than expected,” the White House said in a statement. It was not immediately clear what specific progress, if any, had been made in preliminary discussions between U.S. and North Korean officials in the run-up to the Tuesday summit. In fact, only hours before the White House announcement, U.S. Secretary of State Mike Pompeo had seemed to lower expectations for the meeting, which Trump had earlier predicted could potentially yield an on-the-spot deal to end the Korean War. “North Korea has previously confirmed to us its willingness to denuclearize, and we are eager to see if those worlds prove sincere,” Pompeo said. “The fact that our two leaders are sitting down face to face is a sign of the enormous potential to accomplish something that will immensely benefit both of our peoples and the entire world”:
Sec. of State Mike Pompeo says ultimate objective of diplomacy with North Korea has not changed.
“The complete, verifiable and irreversible denuclearization of the Korea peninsula is the only outcome that the United States will accept.” https://t.co/Oa999AdVyU pic.twitter.com/CoVjx1hDpN
— ABC News (@ABC) June 11, 2018
“The ultimate objective we seek with diplomacy with North Korea has not changed. The complete, verifiable, and irreversible denuclearization of the Korea peninsula is the only outcome that the United States will accept.” The summit — the first ever between a sitting American president and North Korea’s leader — was to kick off at 9 a.m., the White House said. After greeting each other, the two leaders planned to sit for a one-on-one meeting that a U.S. official said could last up to two hours, with only translators joining them. The official was not authorized to discuss the plans and insisted on anonymity. The White House said the daylong summit would also include a working lunch and a larger meeting involving aides to both leaders. On the U.S. side, Trump was to be joined by Pompeo, chief of staff John Kelly, National Security Adviser John Bolton, and U.S. Ambassador to the Philippines Sung Kim, along with several others. Before flying home, Trump planned to speak to reporters in Singapore after concluding the summit, the White House said. The last-minute change of schedule came as both sides finalized preparations for the meeting. On Monday, Trump forecast a “nice” outcome, while Kim spent the day out of view.
Canada’s foreign minister, Chrystia Freeland, said her country “does not conduct its diplomacy through ad hominem attacks.”
The verbal volleys by Navarro and Trump’s top economic adviser, Larry Kudlow, picked up where Trump had left off Saturday evening. Kudlow suggested Trump saw Trudeau as trying to weaken his hand before that meeting, saying the president won’t “let a Canadian prime minister push him around. … Kim must not see American weakness.” Kudlow was referring to North Korean leader Kim Jong Un. Trudeau, who had said at the news conference that Canada would retaliate for new U.S. tariffs, didn’t respond to questions about Trump when the prime minister arrived at a Quebec City hotel Sunday for meetings with other world leaders. Freeland later told reporters that “we don’t think that’s a useful or productive way to do business.” Trudeau had said Canadians “are polite, we’re reasonable, but also we will not be pushed around.” He described all seven leaders coming together to sign the joint declaration despite having “some strong, firm conversations on trade, and specifically on American tariffs.”
(Bloomberg) — A key committee of Swedish lawmakers wants to force the country’s biggest banks to handle cash in an effort to halt the nation’s march toward complete cashlessness. Parliament’s Riksbank committee, which is in the process of reviewing the central bank law, proposed making it mandatory for banks to offer cash withdrawals and handle daily receipts. The requirement would apply to banks that provide checking accounts and have more than 70 billion kronor ($8 billion) in deposits from the Swedish public, according to a report. The lawmakers said there needs to be “reasonable access to those services in all of Sweden,” and that 99 percent of Swedes should have a maximum distance of 25 kilometers (16 miles) to the nearest cash withdrawal. The requirement doesn’t state how banks should offer those services, and lenders can choose whether to use a third party, machines or over-the-counter services. The move is a response to Sweden’s rapid transformation as it becomes one of the most cashless societies in the world. That’s led to concerns that some people are finding it increasingly difficult to cope without access to mobile phones or bank cards. There are also fears around what would happen if the digital payments systems suddenly crashed. “We believe that the continued development of access to cash in society needs to take place in a controlled manner so that the public’s and society’s need for cash is fulfilled,” the committee said in an op-ed in Dagens Nyheter. The committee began looking at these issues amid worries that cash was disappearing too fast. A majority of bank branches in Sweden have stopped handling cash over the counter, and many shops and restaurants are also rejecting physical money. Still, a recent Riksbank study showed that the decline of cash is driven by the fact that Swedes prefer using electronic payments such as debit cards and mobile payments. The Swedish Bankers’ Association said the plan would violate European Union laws on state aid and competition by forcing only a few banks to guarantee the supply of cash. Riksbank Governor Stefan Ingves has expressed concerns that the lack of cash may become problematic in a crisis situation, and suggested new legislation to safeguard public governance of the payment system as well as introducing a digital currency. He has also suggested forcing banks to handle cash, a view now shared by the Riksbank committee. “The proposition aims to secure outflow of cash in society,” Patrik Andersson, chief executive officer at Loomis, said in an email. “We also want to see a proposal that all players must accept cash as well. It’s a legal means of payment and should be accepted by all. It’s like that in most countries, but not in Sweden.”
There has been a sharp drop in the price of bitcoin and other virtual currencies after South Korean cryptocurrency exchange Coinrail was hacked over the weekend. A tweet from Coinrail confirming the cyber-attack sent the price of bitcoin tumbling 10% on Sunday to two-month lows. The world’s best-known cryptocurrency lost $500 (£372) in an hour, dropping to $6,627 on the Luxembourg exchange Bitstamp, while most other digital currencies also recorded large losses. The latest attack highlights the lack of security and weak regulation of global cryptocurrency markets. Coinrail later said in a statement on its website that its system was hit by “cyber intrusion” on Sunday, causing a loss for about 30% of the coins traded on the exchange. It did not quantify the value, but the local Yonhap news agency estimated that about 40bn won (£27.8m) worth of virtual coins was stolen. Coinrail said: “Seventy percent of total coin and token reserves have been confirmed to be safely stored and moved to a cold wallet [not connected to the internet]. Two-thirds of stolen cryptocurrencies were withdrawn or frozen in partnership with related exchanges and coin companies. For the rest, we are looking into it with an investigative agency, related exchanges and coin developers.” Police have begun an investigation, according to the Korea Herald, which cited a spokesperson as saying: “We secured the access history of Coinrail servers and we are in the process of analysing them.” Bitcoin was trading at about $6,750 on Monday afternoon – down from an all-time peak of almost $20,000 in the week before Christmas. In February, it fell to $5,900.
South Korea is one of the world’s major cryptocurrency trading centres, and is home to one of the busiest virtual coin exchanges, Bithumb. There have been a series of thefts from cryptocurrency exchanges in recent months. Japan’s Coincheck was hacked in January, with more than $500m-worth of digital currency stolen. It started reimbursing customers in March, but faces two class-action lawsuits. In December, the South Korean exchange Youbit shut down and filed for bankruptcy after being hacked twice. The Wall Street Journal (£) reported on Friday that US regulators were investigating potential price manipulation at four major cryptocurrency exchanges. The investigation comes six months after CME Group launched bitcoin futures. Coinbase, Bitstamp, itBit and Kraken have been asked to share trading data related to the futures contracts. Analysts said bitcoin volatility was fading, after the price increased threefold between mid-November and mid-December. David Jones, the chief market strategist at trading platform Capital.com, said this was driven by increased publicity as bitcoin went from being a niche IT interest to becoming mainstream, but added that the hype has now gone.
Paris (AFP) – France warned Sunday that “fits of anger” could not dictate international cooperation after US President Donald Trump abruptly rejected a joint statement agreed following a bad-tempered G7 summit in Canada. “International cooperation cannot be dictated by fits of anger and throwaway remarks,” President Emmanuel Macron’s office said in a statement to AFP. “We spend two days working out a (joint) statement and commitments. We are sticking to them and whoever reneges on them is showing incoherence and inconsistency. “Let’s be serious and worthy of our people. We make commitments and keep them,” the presidency said, adding that “France and Europe maintain their support for this (G7) statement.” Minutes after the publication of a joint communique that was approved by Trump and other Group of Seven leaders at a summit in the city of Quebec, the US leader announced on Twitter that he was retracting his support. In a flurry of tweets from Air Force One, en route to Singapore for a historic nuclear summit with North Korea’s Kim Jong Un, Trump accused the summit host, Canadian Prime Minister Justin Trudeau of being “very dishonest”. He was reacting to Trudeau’s declaration that Canadians would “not be pushed around” and would hit back at punishing US tariffs on metal imports with “equivalent tariffs”. “Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our US farmers, workers and companies, I have instructed our US Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the US Market!” Trump tweeted. “PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that … he ‘will not be pushed around.’ Very dishonest & weak.”
WASHINGTON — President Trump has gone overseas to embark on some of the most consequential diplomatic negotiations of his tenure, threatening an all-out trade war with allies and seizing a chance to make peace with a nuclear-armed menace.
But back home, he left behind a West Wing where burned-out aides are eyeing the exits, as the mood in the White House is one of numbness and resignation that the president is growing only more emboldened to act on instinct alone. Mr. Trump, a former reality television star, may soon be working with a thinned-out cast in the middle of Season 2, well before the midterm elections. Several high-profile aides, including John F. Kelly, the president’s chief of staff, and Joe Hagin, a deputy of Mr. Kelly’s, are said to be thinking about how much longer they can stay. Last week, Mr. Kelly told visiting senators that the White House was “a miserable place to work,” according to a person with direct knowledge of the comment. turnover, which is expected to become an exodus after the November elections, does not worry the president, several people close to him said. He has grown comfortable with removing any barriers that might challenge him — including, in some cases, people who have the wrong chemistry or too frequently say no to him. Mr. Trump, who desires a measure of chaos at all times, is reveling in the effects of his own mercurial decision-making, the people said. Stephen K. Bannon, the president’s former chief strategist, said in an interview that Mr. Trump’s love of conflict had driven his approach to the presidency. “This is how he won,” Mr. Bannon said. “This is how he governs, and this is his ‘superpower.’ Drama, action, emotional power.” Mr. Trump believes that he is gaining ground by trying to set the terms of news coverage around a number of issues affecting his White House, according to interviews with a dozen White House advisers, former aides and people close to the president. He has repeatedly promoted his performance at the one-year and 500-day milestones of his term, sowed confusion about his knowledge of hush payments to a pornographic film actress, and disparaged the special counsel’s Russia investigation, as well as railed against trade imbalances and scored a once-unthinkable meeting with the North Korean leader, to be held Tuesday in Singapore. His daily torrent of tweets about the Russia inquiry, interpreted by his critics as distress signals, is more often than not a sign that he is less worried about the consequences of using the blunt force of his platform to fight back, according to three advisers. Rather than trusting the people around him, Mr. Trump has taken to working the phones more aggressively to seek counsel from outside voices, particularly two of his longest-serving advisers — Corey Lewandowski, his first campaign manager, and his longtime friend David Bossie. Among the president’s other confidants is Scott Pruitt, the administrator of the Environmental Protection Agency. Mr. Trump has dismissed the advice of several aides who have tried to persuade him to fire Mr. Pruitt in light of the growing questions about misuse of his authority. The two speak frequently, and the president enjoys discussing his negative view of Jeff Sessions, the attorney general. Mr. Trump’s reliance on outside advisers, she said, also signals an “emasculation” of the chief of staff in the White House, who is meant to serve as the president’s confidant and gatekeeper. “It seems as though Chief of Staff Kelly is losing power by the day,” Ms. Tenpas said. “It’s almost like a battery that’s draining. I’ve not seen any presidency operate effectively without putting somebody in there that you respect and you can trust.”
Diplomacy cannot be dictated by “fits of anger”, French President Emmanuel Macron warned after a G7 summit in Canada ended in acrimony. In tweets, US President Donald Trump described host Justin Trudeau as “dishonest and weak” and retracted his endorsement of the joint communique. That statement sought to overcome deep disagreements, notably over trade. Mr Macron’s office said France and other EU countries would maintain their support for the final G7 communique. “Let’s be serious and worthy of our people. We make commitments and keep to them,” a statement from the French presidency quoted by AFP news agency said. “International co-operation cannot be dictated by fits of anger and throwaway remarks,” it added. Germany also said it would abide by the communique. In recent weeks, trading partners of the US have criticised new tariffs on steel and aluminium imports imposed by the Trump administration. Saturday’s final communique aimed at easing those tensions by advocating a “rules-based trading system”. In a news conference after the summit, the Canadian leader reasserted his opposition to the US tariffs, and vowed to press ahead with retaliatory moves on 1 July. “Canadians are polite and reasonable but we will also not be pushed around,” he said. Tweeting en route to his next summit in Singapore, Mr Trump said he had instructed US officials “not to endorse the communique as we look at tariffs on automobiles”. He said the move was based on Mr Trudeau’s “false statements… and the fact that Canada is charging massive tariffs to our US farmers, workers and companies”. Mr Trudeau’s office responded by saying the prime minister had said nothing he had not said before, both in public and in private conversations with Mr Trump. The G7 summit, held in La Malbaie, Quebec province, also covered such issues as relations with Russia. In the communique, the group of major industrial nations – Canada, the US, the UK, France, Italy, Japan and Germany – had initially agreed on the need for “free, fair, and mutually beneficial trade” and the importance of fighting protectionism. On 1 June, the US imposed a 25% tariff for steel and 10% for aluminium on imports from the European Union (EU), Canada, and Mexico. Mr Trump said the move would protect domestic producers that were vital to US security. The EU then announced tariffs on US goods ranging from Harley-Davidson motorcycles to bourbon. Canada and Mexico are also taking action in retaliation.
The US Commodity Futures Trading Commission has sent subpoenas to four cryptocurrency exchanges asking for trading data, according to the Wall Street Journal which cited people familiar with the matter. The exchanges are Coinbase, Kraken, itBit and Bitstamp. It is from these sources that the price of Bitcoin futures as sold by CME Group is determined. CME Group is a major financial company with many different lines of business. Relevant here is its exchange in Chicago that sells financial derivatives products such as options and futures. In December of 2017 it began selling futures contracts based on Bitcoin. CME’s launch of Bitcoin futures was a pioneering step, playing a big part in bringing cryptocurrency into the mainstream consciousness. For these contracts, the price of Bitcoin is determined by taking an average of the price on the aforementioned four exchanges over an hour on the last Friday of the month.
When you know, you know.
That’s how President Donald Trump feels about whether it’s worth pursuing a relationship with Kim Jong Un, going by remarks at a press conference Saturday. The U.S. leader was rushing to catch a flight to meet his North Korean counterpart, having bailed early on his old gang of friends, the Group of Seven, who were holding a summit in Quebec. At the unprecedented talks in Singapore, “The Art of the Deal” author Trump hopes to get Kim to agree to denuclearize — that is, to abandon North Korea’s nuclear weapons program. Asked how long it would take for him to figure out whether Kim is serious about giving it up, Trump jumps in to answer: “I think within the first minute.” “How?” the reporter asks. “Just my touch, my feel,” the president says. “That’s what I do.”
Reporter: How long do you think it will take you to figure out whether Kim Jong Un is serious?
President Trump: “I think in the first minute I will know … And if I think it won’t happen, I am not going to waste my time. I don’t want to waste his time.” https://t.co/syywHUMwLG pic.twitter.com/jFNm4qcWDZ
— CBS News (@CBSNews) June 9, 2018
Officials from Washington and Pyongyang have been in heated horse-trading for the high-stakes summit since April, when North Korea first hinted it would be open to discussing denuclearization. Whether those nuclear vows are heartfelt has been a worry for the White House. Trump will walk away from the negotiating table rather than be “played” by North Korea with false promises, Vice President Mike Pence has said. Maybe that’s why Trump has been telling reporters this week that he didn’t feel he had to prepare much for the historic get-together. “It’s about the attitude,” he said. “You know they say you know if you like somebody in the first five seconds? … I think that very quickly I’ll know whether or not something good is going to happen,” Trump said in the Quebec presser. “I also think I’ll know whether or not it will happen fast … it may not.”
SINGAPORE (AP) — President Donald Trump cast his Tuesday summit with North Korea’s Kim Jong Un as a “one-time shot” for the autocratic leader to ditch his nuclear weapons and enter the community of nations, saying he would know within moments if Kim is serious about the talks. Trump said Saturday he was embarking on a “mission of peace,” as he departed the Group of Seven meeting in Canada to fly to the summit site in Singapore. Saying he has a “clear objective in mind” to convince Kim to abandon his nuclear program in exchange for unspecified “protections” from the U.S., Trump acknowledged that the direction of the high-stakes meeting is unpredictable, adding it “will always be spur of the moment.” “It’s unknown territory in the truest sense, but I really feel confident,” he told reporters. “I feel that Kim Jong Un wants to do something great for his people and he has that opportunity and he won’t have that opportunity again.” “It’s a one-time shot and I think it’s going to work out very well,” he said. Raising expectations in advance of the meeting, Trump said the outcome will rely heavily on his own instincts. The U.S. president, who prides himself on his deal-making prowess, said he will know “within the first minute” of meeting Kim whether the North Korean leader is serious about the nuclear negotiations. “I think I’ll know pretty quickly whether or not, in my opinion, something positive will happen. And if I think it won’t happen, I’m not going to waste my time. I don’t want to waste his time,” Trump said. Trump has said he believes Kim would agree to denuclearization — and Secretary of State Mike Pompeo said Thursday he had received Kim’s personal assurances to that effect — but the two countries have offered differing visions of what that would entail. Despite Kim’s apparent eagerness for a summit with Trump, there are doubts that he would fully relinquish his nuclear arsenal, which he may see as his guarantee of survival. U.S. defense and intelligence officials have assessed the North to be on the threshold of having the capability to strike anywhere in the continental U.S. with a nuclear-tipped missile — a capacity that Trump and other U.S. officials have said they would not tolerate. Trump reiterated his promise Saturday that the U.S. “will watch over and we’ll protect” Kim and his government in return for him giving up the nuclear program. He also indicated that South Korea, China and Japan would be prepared to invest in the North to boost its besieged economy.
NEW YORK (Reuters) – For most U.S. fund managers, beating the market this year has come down to one decision: whether or not to own shares of Amazon.com Inc More than 70 percent of the actively-managed U.S. large-cap funds that are beating the 3.5-percent gain in the benchmark S&P 500 own shares of the Seattle-based e-commerce giant, according to Lipper data. Shares of the company are up nearly 45 percent for the year-to-date, and account for nearly 40 percent of the S&P 500’s gain for the year, according to S&P Global. Those gains have left even investors like Warren Buffett, who has never invested in Amazon, kicking themselves for missing out on the company’s growth. “I was too dumb to realize what was going to happen,” Buffett said at Berkshire Hathaway Inc’s (BRKa.N) annual shareholder meeting in early May. Amazon has benefited this year from continued growth of e-commerce and is a business that seems largely immune from the threat of a global trade wars. Yet with volatility in the stock market expected to continue through the U.S. midterm elections in the fall, Amazon’s pricy valuation and high level of fund ownership may leave the stock more vulnerable to a steep decline, analysts warn.As a result, some outperforming fund managers who have so far avoided Amazon are branching out into companies ranging from Asian e-commerce company Alibaba Group Holdings Ltd to medical device maker Abiomed Inc all in an effort to find better values.
Doll has avoided Amazon because of its trailing price-to-earnings ratio of 267, a valuation more than ten times that of the broad S&P 500. Shares of Alibaba are up 21 percent for the year and trade at a trailing price to earnings ratio of 54.3.
Fund manager concentration in Amazon may leave the company more vulnerable to sell off if the volatility in the broad market increases this fall ahead of the mid-term elections, said Todd Rosenbluth, director of mutual fund research at CFRA Research. “We’re of the belief that there will be greater market volatility for the duration of 2018 and while in theory that gives active managers a chance to buy in on whatever they have missed out on, that volatility could hit the better performers first,” he said. “The average U.S. company is not growing that much. Earnings may be up a lot but a big slug of that is from the benefits of the Trump tax cut,” he said. “The only way to outperform is to find companies that are creating their own theme.” Nick Bit: These valuations are crazy shit. We are headed for another TECH WRECK and we are loaded for bear. Its not just Amazon either.
New York liberal billionaire donor George Soros lamented the state of world events in an interview published Saturday: “Everything that could go wrong has gone wrong.” In a rare interview with The Washington Post, Soros, 87, said he did not expect Republican Donald Trump to win the 2016 presidential election. “Apparently, I was living in my own bubble,” he said, later adding that Trump “is willing to destroy the world.” Soros spent at least $25 million mobilizing Democratic voters to support Hillary Clinton and other left-wing candidates in 2016, according to the Post. But he is also under fire from critics across the globe, from Russian President Vladimir Putin to Rosanne Barr, and several district attorney candidates he backed in this week’s California primary lost. “We ran into a brick wall in California,” said Soros, who plans to spend at least $15 million on the November races. “The bigger the danger, the bigger the threat, the more I feel engaged to confront it,” Soros said after speaking at a Human Rights Watch conference in Zurich on Thursday. “So, in that sense, yes, I redouble my efforts.” He also acknowledged that the Soros-bashing could blunt his impact. “It makes it very difficult for me to speak effectively because it can be taken out of context and used against me,” he said. Reflecting on the 2016 race, Soros said Clinton would have made a “very good president,” but she was not a strong campaigner. “She was too much like a schoolmarm,” Soros said. “Talking down to people . . . instead of listening to them.” He remained, however, firm on his views about Trump, describing him as a “narcissist” who “considers himself all-powerful.” Soros disagrees, though, with fellow liberal billionaire Tom Steyer’s impeachment push — telling the Post he would only back such an effort if the Democrats retook Congress and gained some help from Republicans. Here’s the cost, he said: “This would make [Vice President] Pence the president, who is much more competent in representing the far right, whose views with which I disagree, than Trump himself.”
Chinese President Xi Jinping will open late Saturday a two-day regional security summit attended by Russia, Iran and other allies confronting rising tensions with the US over trade and Washington’s withdrawal from the Iranian nuclear deal. Armoured vans lined the streets of the coastal city of Qingdao as world leaders arrived Friday for the 18th annual summit of the Shanghai Cooperation Organisation (SCO), a regional security bloc led by China and Russia. Its member states also include four ex-Soviet Central Asian republics, Pakistan and India. Iran is an observer member. Authorities emptied an entire oceanside swathe of the city — clearing out shopkeepers, residents and day-trippers to make way for Xi, his Russian counterpart Vladimir Putin and Iran’s President Hassan Rouhani. Pakistani President Mamnoon Hussain and India’s Prime Minister Narendra Modi will also attend the meeting. The leaders will be addressed by Xi this evening at an opening banquet from 7.45pm (1145 GMT), according to the official schedule, before taking in a fireworks display. The SCO meeting comes after President Donald Trump controversially pulled Washington out of the 2015 international pact with Iran that placed limits on its nuclear programme in return for easing economic sanctions. Though not officially on the agenda, analysts say that one key topic of discussion this year may focus on whether Iran will be allowed to ascend from its position as an SCO observer to become a full member state — a development it has sought since 2008 but has been unable to achieve while subject to UN sanctions. Now in the wake of the US withdrawal from the pact, “SCO members may use granting full membership to Iran as a way to demonstrate support for (Tehran) and the nuclear agreement,” said Dawn Murphy, professor of international security studies at the US Air War College. Speaking Saturday to AFP in Lithuania’s capital Vilnius, senior Iranian official Massoumeh Ebtekar said Iran hoped European powers, Russia and China would confirm their willingness to uphold the deal “as soon as possible because Iran cannot wait forever.” “We have been a faithful player to this commitment, we’ve done our best, we’ve shown our good intentions. We are facing a very volatile region,” she said. The tensions over Iran come as another nuclear issue dominates headlines, with Trump and North Korean leader Kim Jong Un preparing for an unprecedented summit in Singapore.
If a picture is worth 1,000 words, Angela Merkel has some thoughts.
WASHINGTON — The German chancellor uploaded a photograph on Instagram of her and French President Emmanuel Macron seeming to stare down President Trump. The U.S. president is staring back, arms crossed, as Japanese Prime Minister Shinzo Abe looks on with his arms also crossed. National Security Adviser John Bolton and other aides also look on what appears to be a tense moment. The captions reads: “Day two of the G7 summit in Canada: spontaneous meeting between two working sessions. #G7Charlevoix.” The leaders had been meeting at the Group of Seven summit in Quebec, Canada over the weekend. Despite the president describing his relationship with the other leaders as “a 10,” conversations between the world’s largest industrialized countries were thought to be intense as the allies faced off with Trump over tariffs his administration has imposed on them. Trump said the tariffs are necessary for national security. Macron also tweeted Saturday a photo of the other leaders and aides surrounding Trump, who was one of just two people sitting. In the photo, Macron is looking directly at the president and gesturing. “#G7Charlevoix, second day: A new step has been taken. After a long day of work and very direct dialogue, we are actively seeking an ambitious agreement,” an English translation of Macron’s tweet reads.
On Saturday morning Trump said he was open to getting rid of the tariffs if the other countries agreed to a more pure form of free trade. Britain, France, Germany, Italy, Japan and Canada are the other members of the G7. Russia used to be included rounding out the group to G8, Trump has been lobbying for the country to be let back in.
‘If [our trading partners] retaliate, they’re making a mistake,’ said Trump at the G-7 meeting in Canada.
LONDON (Reuters) – Britain’s leading stock index fell on Friday, tracking a broad sell-off by European shares as investors faced the prospect of tightening financial conditions and growing political risk. The FTSE 100 closed down 0.3 percent for its third straight week of losses. Germany’s DAX dropped 0.4 percent and Italy’s FTSE MIB sank 1.9 percent. Risk appetite has dried up this week a new Italian government settled in and the European Central Bank indicated it might end ultra-loose monetary policy earlier than expected. Divisions on trade as G7 leaders’ summit got under way added to investors’ anxieties. “Events going on that people point to, such as the G7 meeting, are all idiosyncratic things that have their impact, but I think often what you see is a broader story underneath that is affecting everything and is probably exacerbating those situations,” said Clark Fenton, chief investment officer at Agilis Investment Management. “I think it comes back to quantitative tightening.” On Friday financials were the biggest drag on the FTSE 100, as HSBC, Prudential, Lloyds and Barclays fell 0.3 to 1.2 percent.
Senate Minority Leader Charles Schumer (D-N.Y.) blasted President Trump‘s suggestion that Russia should be allowed to rejoin the Group of Seven, saying his foreign policy is becoming a “joke” and “erratic.” “President Trump is turning our foreign policy into an international joke, doing lasting damage to our country, without any rhyme or reason,” Schumer said in a statement. The Senate Democratic leader added in a separate tweet that allowing Russia to rejoin the group of major industrial powers would reward Russian President Vladimir Putin. “Readmitting Russia to the G-7 would reward Vladimir Putin for actions the U.S. and its allies have condemned, and would clearly be contrary to America’s interests. The president’s foreign policy decision making seems to become more erratic every day,” Schumer tweeted.
Readmitting Russia to the G-7 would reward Vladimir Putin for actions the U.S. and its allies have condemned, and would clearly be contrary to America’s interests. The president’s foreign policy decision making seems to become more erratic every day. https://t.co/y44JhesqCS
— Chuck Schumer (@SenSchumer) June 8, 2018
Trump raised eyebrows when he told reporters earlier Friday that Russia should be reinstated into the Group of Seven major economies. “With that being said, Russia should be in this meeting,” he said. “Why are we having a meeting without Russia being in the meeting?” The move is likely to spark further anger from U.S. allies and drew an immediate backlash from lawmakers, who have been wary for years over Trump’s warmer tone toward Moscow. “We need the president to be able to distinguish between our allies and adversaries, and to treat each accordingly. On issue after issue, he’s failed to do that,” Schumer said in his statement. He added that trying to reinstate Russia back into the G-7 in the wake of Moscow’s meddling in the 2016 presidential election “will leave millions of Americans with serious questions and suspicions.” GOP Sens. Ben Sasse (Neb.) and Jeff Flake (Ariz.), who have both been openly critical of Trump, both panned Trump’s suggestion on Friday. “This is weak,” Sasse said in a statement. “Putin is not our friend and he is not the president’s buddy.”
WASHINGTON — Special counsel Robert Mueller has brought additional charges against President Donald Trump’s campaign chairman and a longtime associate, accusing them of obstructing justice. The new charges were unsealed Friday against Paul Manafort and Konstantin Kilimnik just days after prosecutors accused the two men of attempting to tamper with witnesses as Manafort awaits trial of felony charges related to his work on behalf of Ukrainian interests. The indictment charges both men with obstruction of justice and conspiracy to obstruct justice related to contacts they had with two witnesses earlier this year. The witnesses, who had worked with Manafort as he represented a pro-Russian political party in Ukraine, have told the FBI that they believed Manafort and Kilimnik were trying to get them to lie about the nature of their work. Through a spokesman, Manafort has maintained his innocence. The spokesman, Jason Maloni, said Friday that Manafort and his attorneys were reviewing the new charges.
WASHINGTON — The special counsel’s accusation this week that Paul Manafort, President Trump’s former campaign chairman, tried to tamper with potential witnesses originated with two veteran journalists who turned on Mr. Manafort after working closely with him to prop up the former Russia-aligned president of Ukraine, interviews and documents show. The two journalists, who helped lead a project to which prosecutors say Mr. Manafort funneled more than $2 million from overseas accounts, are the latest in a series of onetime Manafort business partners who have provided damaging evidence to Robert S. Mueller III, the special counsel investigating Russian meddling in the 2016 election. Their cooperation with the government has increasingly isolated Mr. Manafort as he awaits trial on charges of violating financial, tax and federal lobbying disclosure laws. Mr. Manafort’s associates say he feels betrayed by the former business partners, to whom he collectively steered millions of dollars over the years for consulting, lobbying and legal work intended to bolster the reputation of Viktor F. Yanukovych, the former president of Ukraine. Mr. Manafort has told associates that he believes Mr. Mueller’s team is using the business partners to pressure him to flip on Mr. Trump in a manner similar to the one used to prosecute the energy giant Enron in the early 2000s by a Justice Department task force that included some lawyers now serving on Mr. Mueller’s team. “Anybody who is a student of the Enron prosecution sees a very close parallel,” said Michael R. Caputo, a former Trump campaign operative, who has known Mr. Manafort for three decades and spoke with him on Wednesday. Another associate said Mr. Manafort and some of his close allies were reading a book by the conservative lawyer and commentator Sidney Powell that claims misconduct in the Enron prosecution. And Mr. Caputo, who was interviewed by Mr. Mueller’s team last month, said that “when Paul decided to fight, he knew the lay of the land.” Prosecutors assert that Mr. Manafort’s fight included trying to shape the accounts that former business partners offered prosecutors. In court filings this week, they said that starting in late February, Mr. Manafort repeatedly tried to reach the two journalists — with whom he had fallen out of contact until recently — to coordinate their accounts about their work to tamp down international criticism of Mr. Yanukovych for corruption, persecuting rivals and pivoting toward Russia and its president, Vladimir V. Putin. The prosecutors did not name the journalists, but three people familiar with the project identified them as Alan Friedman and Eckart Sager. Both men fended off the overtures, which included phone calls and encrypted text messages from Mr. Manafort and a longtime associate, whom prosecutors have not named but was identified by people close to Mr. Manafort as Konstantin V. Kilimnik, a former Russian Army linguist who prosecutors claim has ties to Russian intelligence. Instead of engaging, Mr. Friedman and Mr. Sager informed Mr. Mueller’s team of the efforts to reach them, according to prosecutors. The prosecutors are arguing that because of these allegations, a federal judge should revise the terms of Mr. Manafort’s bail or even send him to jail while he awaits trial. Mr. Manafort, who posted a $10 million bond and has been confined to his home since October, has until Friday at midnight to respond to the prosecutors’ accusations. His spokesman brushed aside prosecutors’ allegations of witness tampering, but declined to comment on Mr. Manafort’s relationship with Mr. Friedman and Mr. Sager. Mr. Manafort. His associates say he was most stung by the decision of his longtime business partner, Rick Gates, who served as Mr. Trump’s former deputy presidential campaign manager, to cooperate as part of a deal in which he pleaded guilty to financial fraud and lying to investigators.
(Bloomberg) — Chancellor Angela Merkel made a forceful pitch for Europe to play a more assertive role in global affairs as U.S. President Donald Trump dismantles the post-World War II order, setting the stage for a potential tense standoff at the Group of Seven summit this week. The German leader again questioned the durability of trans-Atlantic relations by referring to eye-raising comments she made over a year ago in which she said that “the times when we could fully rely on others are to some extent over.” Those words, spoken at a beer-tent election rally, were a reaction to Trump hectoring European leaders for not spending enough on defense at a North Atlantic Treaty Organization summit in Brussels. Since then, more fuel has been added to the fire.“That was my takeaway from the NATO summit, and in the meantime I continue to feel confirmed by my statement,” Merkel said in Munich on Wednesday, this time to a meeting of the European People’s Party, a grouping of center-right parties in the European Parliament. In addition to the disruptive effects of the rift in NATO and Trump’s exit from the Paris global climate treaty, Merkel pointed to the fresh conflict over trade and the U.S. leader’s withdrawal from the Iran nuclear accord last month.
“All of that confirms the assessment that the world is being reorganized,” Merkel told the EPP.
The German chancellor has taken a firmer stance leading up to the two-day G-7 gathering in Canada, which starts Friday. Earlier on Wednesday, Europe’s most experienced government leader vowed to challenge Trump on trade and climate, saying the lack of room for compromise means leaders may fail to agree on a final statement.
Trump’s “America First” doctrine shows that “we have a serious problem with multilateral agreements,” Merkel told German lawmakers, adding that failure to reach common ground could lead to the highly unusual step of host Canada issuing a concluding statement not agreed to by all participants.
With Trump’s unpredictable leadership and the U.S. turn toward isolationism, Merkel said that the European Union needs to hone its response to a raft of issues in an environment in which global institutions need to be “newly proven.”
The 28-member bloc — soon to lose the U.K. after the 2016 referendum to exit the EU — managed to grapple with a financial meltdown and the biggest influx of refugees since World War II only with “great effort,” Merkel said. “But we don’t have a sufficient foundation to confront crises of the future,” she added, underscoring her push for reforms. To give the region more political heft, she called for joint action on security and migration, saying the bloc should “Europeanize” its presence on the United Nations Security Council. A rotating group of about 10 member states could work with veto-power France and the European Commission in order to “speak with one European voice” on the global stage, the chancellor said.
(Reuters) – China’s No. 2 telecommunications equipment maker ZTE secured a lifeline from the Trump administration on Thursday after agreeing to pay a $1 billion fine and overhaul leadership in a deal that will lift a ban on its doing business with U.S. suppliers. The agreement comes as U.S. President Donald Trump seeks trade concessions from China and negotiations continue to avoid a trade war between the world’s two largest economies. Shares of U.S. companies that do business with ZTE rose on Thursday. U.S. lawmakers immediately attacked the agreement, citing intelligence warnings that ZTE (poses a national security threat. ZTE pleaded guilty last year to conspiring to evade U.S. embargoes by selling U.S. equipment to Iran. The ban on buying U.S. parts was imposed in April after the company lied about disciplining some executives responsible for the violations. ZTE then ceased major operations. Under the deal, ZTE will change its board and management within 30 days, pay a $1 billion (£744.7 million) fine and put an additional $400 million in escrow. The deal also includes a new 10-year ban that is suspended unless there are future violations.
Riyadh, Tehran’s arch rival, has long been a close Washington ally, but direct pressure on a member of Organization of the Petroleum Exporting Countries (OPEC) over oil policies is rare. Washington last pressed Saudi Arabia to increase output in 2012. Riyadh has said that even though prices have spiked to over $80 per barrel, the highest since 2014, the market has yet to recover from a long slump. Until the phone call, Saudi officials had been saying it was too early to raise output. Riyadh took this line partly because higher crude prices could help the stock market float of a stake in state oil giant Saudi Aramco expected to take place in 2019, Saudi industry sources had told Reuters. So there was shock among some of Saudi Arabia’s fellow OPEC members when it issued a supportive statement hours after Washington imposed new sanctions on Tehran. It said it was ready to raise output to offset any supply shortage. Three sources familiar with the matter said a senior U.S. administration official had called Saudi Crown Prince Mohammed bin Salman before Trump’s announcement to make sure Washington could count on Riyadh, the de facto OPEC leader. One of the sources said the call took place on May 7. The other two did not specify a date for the call. Washington was worried that the sanctions would curb deliveries from Iran and push oil prices up, the sources said.A White House spokesperson declined to comment on whether a call took place. A senior Saudi official did not confirm the call but said: “We were made aware of the decision on the JCPOA (Joint Comprehensive Plan of Action) before the announcement…We always have conversations with the U.S. about the stability of the oil market.” The Saudi statement in May threatened to undermine a deal between OPEC and its allies led by Russia to curb output by about 1.8 million barrels per day (bpd), starting from January 2017, to reduce a supply glut and boost prices. The deal is due to expire at the end of 2018. OPEC will meet on June 22 and needs a consensus of all members to officially change its output policy. Iran’s oil minister, Bijan Zanganeh, said last week he did not agree on the potential need to increase global oil supplies. An OPEC source familiar with Saudi thinking said that Riyadh and Washington had discussed their oil policies before the U.S. announcement on Iran.
Trump says Kim summit depends on attitude, not preparation
LONDON (Reuters) – House of Fraser said it needed to close 31 stores to survive, in a plan likely to result in as many as 6,000 job losses, making the department store group the latest in a long line of retail casualties in Britain. The closures include the group’s flagship shop on Oxford Street in central London and will leave it with just 28 stores across Britain and Ireland. “These proposals are central to the significant restructuring of the business, without which House of Fraser does not have a viable future,” the group, whose history stretches back to 1849, said in a statement on Thursday. Its decline has been rapid, with the 480 million pounds ($645 million) paid in 2014 by Nanjing Cenbest, part of China’s Sanpower Group, for an 89 percent stake, looking like a deal from a bygone era. The planned closures follow last month’s announcement that another Chinese group, retailer C.banner ( had agreed to become the majority owner with a 51 percent stake, with Nanjing Cenbest remaining a minority shareholder. House of Fraser is not alone in having to shrink. Many British retailers are shutting shops as they try to survive in the face of competition from online retailers such as Amazon, a squeeze on consumer budgets and a change in Briton’s spending habits away from fashion and towards holidays and entertainment. Rival department store group Debenhams ( downgraded its profit forecast for the second time in months in April, while department store market leader John Lewis has cautioned on its outlook. Illustrating tough trading conditions, House of Fraser said underlying sales had fallen by 7.4 percent compared to the prior year in the 13 weeks to April 28. A one-time owner of London’s most famous shop Harrods, House of Fraser has in its long history been through store closures before, shutting a number of its Scottish stores in 2003 and its Dickins & Jones shop on London’s Regent Street in 2006, but never on this scale. House of Fraser said that if the CVA is approved by creditors up to 6,000 jobs could go as it shuts stores in cities including Birmingham, Edinburgh and Cardiff.
Goldman Sachs sees few benefits to GDP from Trump strategy
President Trump is fighting prevailing trade winds to restore a seemingly bygone golden era for American manufacturers and give the U.S. economy a long-term boost. But he’s probably tilting at windmills, new research suggests. The White House in the past month has ratcheted up the pressure on what it views as unfair trade practices of China, Europe, Mexico and even Canada in an effort to protect American steel and spur more production of autos in the United States.
“If you don’t have steel, you don’t have a country,” the president has said repeatedly, a view that he appears to extend to other traditional areas of manufacturing.
The manufacturing industry is not what it once was, but it’s still an important part of the economy. Manufacturers employ about 10% of all American workers, account for nearly half of U.S. imports and almost 70% of domestic research and development, a key to future prosperity. It’s also a good source of well-paying jobs for men who lack a college education, paying about a 16% premium vs. comparable jobs outside of manufacturing, according to an estimate from Goldman Sachs. Yet even if the rejuvenation of U.S. manufacturing becomes the centerpiece of Trump’s economic strategy, “it may not necessarily lead to must faster” growth in gross domestic product, Goldman economists contend. For one thing, manufacturing no longer leads the way in productivity, one of the two main engines of an economy’s long-term performance (the other is population growth). Until 2005 productivity in the manufacturing sector outgrew productivity in the overall economy by an average of 1.5 percentage points a year — a huge difference. Since then it’s trailed the overall economy. Another pitfall for the White House strategy is the changing nature of manufacturing in the U.S.
The biggest increases in productivity as well as research and development are taking place in relatively newer fields such as computers, electronics and biotech instead of older manufacturing segments such as apparel, mining and metals.
By and large, the president has been focused on traditional manufacturers and not the ones that are leading the industry in the 21st century. “Manufacturing has played a special role in broader productivity growth and still pays relatively high wages,” wrote Goldman economists Blake Taylor and Daan Struyven. “However, policies intending to boost the relative importance of manufacturing may not necessarily lead to faster GDP growth, because its productivity growth advantage appears to have faded, and because identifying manufacturing is becoming increasingly difficult.” Don’t expect Trump to recalibrate his approach, though. The 71-year-old president often waxes nostalgic about American manufacturing prowess and he has for years. His strategy is not without political benefits, either. The states with the highest percentage of manufacturing jobs — Iowa, Indiana, Michigan and Wisconsin — are all swing states that Trump won and were key to his victory in 2016.
Ottawa (AFP) – Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron put Donald Trump on notice Thursday that they would not be intimidated at the upcoming G7 summit, as a trade war between Washington and its allies looms. Past summits of the Group of Seven powers — Britain, Canada, France, Germany, Italy, Japan and the United States — have often been marred by anti-globalist demonstrations in the host city. But as the leaders of the world’s richest democracies set off Thursday for Quebec on the eve of their annual meeting, the greatest threat to the liberal world order was due to be inside the fence. Trump may well be distracted by preparations for his June 12 summit with North Korea’s Kim Jong Un, which will be in Singapore immediately after the rich-world talking shop in Canada. But it seems likely that the US leader will enjoy a warmer encounter with the autocrat from Pyongyang than with his Canadian hosts and European and Japanese allies. Leaders like Trudeau and Germany’s Chancellor Angela Merkel admit it will be difficult to even agree on a joint communique at the two-day meeting. Merkel said Wednesday that there would be “no compromise for its own sake” and that dropping the statement “may be the more honest way.”.
Canada’s Trade Minister Francois Philippe Champagne was blunter, declaring: “What we are seeing is that the world economic order is under pressure, under attack.”
Top White House economics advisor Larry Kudlow, in line with the long-standing expert consensus in the G7 industrialized democracies, opposed tariffs before joining Trump’s team, but now says he agrees that the trade status quo hurts America But now, according to Laurence Nardon of the French Institute for International Relations (IFRI), one of the main actors on the international stage is no longer following the same script. “It completely calls into question the international system,” she told AFP. “This G7 summit is a new act in the drama. So far, the six are standing strong, but Trump has not finished.” Since coming to office in January 2017, Trump has pulled the US out of the Paris climate accord, the Iran nuclear deal and the TPP Pacific free trade deal.
Special counsel Robert Mueller’s team is requesting that witnesses turn in their personal phones to inspect their encrypted messaging programs and potentially view conversations between associates linked to President Donald Trump, sources told CNBC. Since as early as April, Mueller’s team has been asking witnesses in the Russia probe to turn over phones for agents to examine private conversations on WhatsApp, Confide, Signal and Dust, according to the sources, who spoke on condition of anonymity. Fearing a subpoena, the witnesses have complied with the request and have given over their phones, the sources said. While it’s unclear what Mueller has discovered, if anything, through this new request, investigators seem to be convinced that the apps could be a key to exposing conversations that weren’t previously disclosed to them. The revelation that Trump associates are giving Mueller access to their encrypted apps comes as former campaign chairman Paul Manafort is being accused by investigators of tampering with witnesses through the same types of programs. On Monday, the special counsel filed a claim that Manafort tampered with witnesses after he was indicted in February for money laundering and illegally acting as a foreign agent. For evidence, Mueller’s deputy listed two apps, WhatsApp and Telegram, that they say Manafort used to contact the witnesses in his case. The filing also says that those conversations were provided to Mueller in May, a month after witnesses say they were approached to provide their phones. The encrypted applications are used to keep conversations private and give users the ability to have discussions without being monitored. WhatsApp, for instance, markets itself as a way to securely communicate with people overseas. “With WhatsApp, you’ll get fast, simple, secure messaging and calling for free, available on phones all over the world,” the website says. Dust dubs itself a “safer place to text,” and pushes its platform as a way to keep messages secretive as well as giving their users the ability to erase messages off of other people’s phones, according to their website. “All your messages automatically ‘dust’ (erase) in 24 hours or as soon as they’re read – you choose which,” the site explains. Dust was also the app reportedly used between longtime Trump personal attorney Michael Cohen and Felix Sater, a real estate developer who has claimed to have ties to Russian oligarchs, when they tried to complete a deal for Trump Tower Moscow. The plan ultimately fell apart. It isn’t surprising that witnesses are voluntarily giving over possible evidence to federal investigators, experts said. He added, though, that it’s “not commonplace, but not all that unusual, either,” for prosecutors to seek evidence from witnesses’ phones. “There’s nothing wrong with asking people to voluntarily provide information to the FBI for whatever investigation,” said Michael German, a retired FBI agent and current fellow with the Brennan Center for Justice’s Liberty and National Security Program. “And to the extent that that’s a voluntary action is where the rub is.”
LONDON (Reuters) – Cambridge Analytica’s former chief denied deliberately misleading British lawmakers, even as he admitted that his firm did receive data from the researcher at the center of a scandal over Facebook data, contradicting his previous testimony. Cambridge Analytica has said its work on Donald Trump’s presidential campaign did not use data at the center of the Facebook scandal, where the details of around 87 million users were allegedly improperly obtained. Former chief Alexander Nix, in earlier testimony to a parliamentary committee, denied that Cambridge Analytica had ever been given data by Aleksandr Kogan, the researcher at the center of the scandal. However, on Wednesday he said that the consultancy had indeed been given data by Kogan. “Of course, the answer to this question should have been ‘yes,’” Nix said, adding that he thought he was being asked about whether Cambridge Analytica still held data from the researcher. He said the company had deleted the data. “My focus was on whether we still held the data… There was certainly no intention to mislead the committee,” he added. Lawmakers on the committee asked Nix to return to testify again to ask him about inconsistencies in his evidence. Kogan told lawmakers he did give Cambridge Analytica the data. Facebook says Kogan harvested the data by creating an app on the platform that was downloaded by 270,000 people, providing access not only to their own personal data but also data from their friends. Facebook said Kogan then violated its policies by passing the data to Cambridge Analytica. Lawmakers also quizzed Nix about a secret recording of him saying that Cambridge Analytica’s online campaign played a decisive role in U.S. President Trump’s election victory, broadcast by Channel 4 television in March. Cambridge Analytica at the time said the comments did not “represent the values or operations of the firm.” Nix apologized for his comments, saying he had been foolish and had made exaggerated claims in order to attract what he thought was a potential client. “All Mr Nix’s comments carried in our reports were used in context, including any caveats,” Channel 4 said in a statement.
Brussels (AFP) – The EU on Wednesday said a raft of retaliatory tariffs, including on whiskey and motorcycles, against painful metals duties imposed by the US would be ready as early as July. The European Commission, which handles trade matters for the 28-country bloc, “expects to conclude the relevant procedure in coordination with member states before the end of June,” said European Commission Vice-President Maros Sefcovic at a news briefing. “It is a measured and proportionate response to the unilateral and illegal decision taken by the US to impose tariffs on the European steel and aluminium exports which we regret,” said the former Slovak prime minister. From blue jeans to motorbikes and whiskey, the EU’s hit-list of products targeted for tariffs with the US reads like a catalogue of emblematic American exports. The European Union originally drew up the list in March but pledged not activate it unless US President Donald Trump followed through on his threat to impose 25 percent tariffs on steel imports and 10 percent on aluminium. The Trump tariffs came into effect on June 1 and the EU now joins Mexico and Canada and other close allies that have announced their own wave of counter-duties against Washington. The EU commission must now take their proposal to be signed off by the bloc’s member states amid divisions over what path to take against Trump’s unpredictable policies. France and the Netherlands back a tough line against the US, while export powerhouse Germany has urged caution towards Trump’s “America First” policies.
Although the exact details of the plan have not been officially released, a leaked internal memo obtained by Bloomberg News proposes that if Trump cites national security concerns, then the Energy Department can require regional grid operators buy power from certain coal and power plants for two years, according to the Federal Power Act and the Defense Production Act. But many conservatives are more concerned about what effects the plan could have on the economy and the energy industry than the legality of the proposal. The Heritage Foundation policy analyst Katie Tubb told CNBC that since the administration can’t find an open way of subsidizing coal and energy plants, they’re using national security as an excuse. She also compared the plan to former President Barack Obama’s using the Clean Air Act to regulate greenhouse gas emissions from power plants that were under the Clean Power Plan, a move that many conservatives paint as overstepping the president’s authority. “Neither are sound, principled policy and both promise harm to consumers. Instead, the President should turn dedicated attention to reversing the underlying policies that are causing the problems he wants to fix,” Tubb said. The Wall Street Journal’s chief economics commentator, Greg Ip, wrote on Wednesday that Trump’s plan will carry “a steep price, in both dollars and lives, most tragically for the coal miners he purports to help.” He describes the Trump administration’s argument for the plan as “baseless,” noting that Trump’s argument that the plants are needed in case fuel supplies run low is unfounded. “Fuel supply problems account for an infinitesimally small share of electrical outages and when supply problems do crop up, they are usually coal’s fault.” And The Washington Examiner wrote: “Trump’s energy bailout is a big mistake,” calling it “a ridiculously bad idea,” which will have “bad” consequences for both Trump and the coal industry. “First, this unprecedented government interference in energy markets will harm the economy under Trump’s watch. If energy prices rise, everyone will feel it. Voters will be deciding this fall whether to deprive Trump of the ability to enact his agenda and make appointments. To the extent that he pursues economy-crippling central planning policies, he risks losing that election.”
CEO optimism about hiring, capital investment and sales growth fell in the second quarter from record levels, marking the first decline in two years amid concerns that trade conflicts could drive up costs for consumers and business. According to the latest quarterly Business Roundtable CEO Economic Outlook Survey, the CEO Economic Outlook Index slipped to 111.1 in the second quarter, down from a record 118.6 in the first quarter, the first decline since before President Donald Trump was elected president. The index is a composite of CEO expectations for sales, hiring and capital spending plans over the next six months. The index is still well above its historical average of 81.2 for a sixth straight quarter. But CEO expectations in each of the three categories fell slightly. The survey of 132 CEOs specifically included a trade-related question, and it found CEOs are concerned about the Trump administration’s approach to international trade issues.
Ninety-five percent of the CEOs said there’s a moderate or serious risk that foreign trade retaliation could lead to lower U.S. exports, while 91 percent said higher costs of imports for consumers was a moderate or serious risk.
Fifty-eight percent see a moderate risk of lower U.S. economic growth as a result of Trump’s trade approach, while 41 percent see a serious risk of lower growth. The majority expect input costs for businesses to rise, with 47 percent seeing a serious risk of higher costs and 43 percent seeing a moderate risk.
Expectations for hiring fell slightly to 95.5, off 3 points from the first quarter, while plans for capital investment dropped to 107.6, off 7.8 points. Sales expectations were down 11.6 points from the first quarter, to 130.3. J. P. Morgan Chase CEO Jamie Dimon, who chairs the Business Roundtable, said “business leaders are expressing historically strong optimism about our economy — and that’s delivering more jobs and increased wages to millions of Americans.” “To sustain this momentum, we need to ensure that we have competitive trade policies in place to provide the certainty necessary to deliver sustainable economic growth to create more opportunities for workers and families nationwide,” he said.
From January through April, the Census Bureau reports, the United States exported $42,291,500,000 in goods to China while importing $161,342,400,000.
In other words, when measured by dollar value, the United States bought about 3.8 times as much in goods from China as China bought from the United States. Prior to this year, the record for the highest trade deficit with China in the first four months of the year came in 2015, when it hit $115,320,000,000 in constant April 2018 dollars (adjusted using the Bureau of Labor Statistics inflation calculator).
The Census Bureau has posted online the month-by-month U.S.-China trade data going back to 1985. In 1985, the first year for which the Census Bureau has posted the data online, the U.S. ran a January-through-April merchandise trade deficit with China of $240,000,000 (in constant April 2018 dollars). The $119,050,900,000 U.S.-China merchandise trade deficit in January through April of this year is 496 times that amount. In January through April of 2017, the U.S. ran a $109,120,000,000 merchandise trade deficit with China (in constant April 2018 dollars). Through all of 2017, the U.S. ran a merchandise trade deficit with China of $375,576,400,000 (in 2017 dollars). This resulted from the U.S. importing $505,470,000,000 in goods from China, while exporting only $129,893,600,000. In 2017, according to the Census Bureau, the top products the U.S. imported from China (by dollar value) were cell phones and other household goods ($70,359,818,000); computers ($45,515,206,000); telecommunications equipment ($33,490,521,000); computer accessories ($31,648,577,000); toys, games and sporting goods ($26,751,412,000); apparel, textiles, nonwool or cotton ($24,137,388,000); furniture, household goods ($20,669,126,000); other parts and accessories of vehicles ($14,406,417,000); household appliances ($14,138,581,000); and electric apparatus ($14,080,858,000). Nick Note: See the above list? Most of those items the US have no US factories capable of making them. So its no a matter of competition but a high labor rate in America that makes it cost prohibitive to manufacture in the US. Please note all the items listed the US invented and US companies make a fortune selling such items. NOT NOT in doing the donkey work making them!!!
SAN FRANCISCO—The Democratic Party on Wednesday appeared on track to avoid being shut out of several competitive California House races, escaping pitfalls of the state’s primary election system that would have threatened its fight for control of Congress in November. In a handful of closely watched races Tuesday, a Democratic candidate finished in the top two, ensuring the party will have someone on the general-election ballot, after the party invested millions of dollars to advance some candidates and undercut others. And in the state’s Senate race, Sen. Dianne Feinstein, a five-term lawmaker who was the only Democrat in the Senate facing a serious primary challenge in 2018, was far ahead of the second-place finisher, who was also a Democrat, according to the Associated Press. If those results stand, Republicans would have no Senate candidate on the fall ballot in California. The state’s vote, particularly for its House seats, was being intensely watched by both parties. The deep blue state is the vanguard of opposition to the Trump presidency, and Democrats have designs on seven GOP-held House seats to get them a good part of the way toward a net gain of 23 seats they need to seize control of the chamber. Still, Democrats risked having no candidate on the ballot in a few House districts they hoped to flip, given the large number of Democratic candidates and the state’s all-party primary system, in which the top two vote-getters advance to a November election regardless of party. By early Wednesday, Democrats held second-place positions in several key races, although voter-roll snafus Tuesday and a plethora of tight races mean it could be days before the outcome in key races is known for sure. Ms. Feinstein’s chief challenger is Democratic state Sen. Kevin de Leon, who has argued that the 84-year-old incumbent hasn’t done enough to stand up to President Donald Trump. In a sprawling field of 32 Senate candidates, the top Republican contender was James Bradley, a veteran and head of a health-care startup company. With almost all precincts reporting, Ms. Feinstein had nearly 44% of the vote, while Mr. De Leon had 11% and Mr. Bradley about 9%, the AP said as of Wednesday morning. In all three, Democrats were at risk of becoming victims of their own party’s strength, because anti-Trump sentiment had set off a stampede of candidates for Congress. Party leaders may have averted that outcome in all or most of the races by spending millions in advertising in the closing weeks to ensure the party’s vote wasn’t diluted among too many candidates. The Democrats have a “blue wave” of momentum building for the 2018 midterms, thanks to a motivated base, success in special elections and a low approval rating for President Trump. Will that be enough to take back the House and the Senate?
Miss America is scrapping its swimsuit competition and will no longer judge contestants based on physical appearance, the organization announced Tuesday. “We are no longer a pageant,” Gretchen Carlson, the first former Miss America to be named chair of the Board of Trustees of the Miss America Organization, said on “GMA.” “We are a competition.” In place of the swimsuit portion of the competition, Miss America contestants will now take part in a live interactive session with the judges, according to the organization. The contestants from all 50 states and the District of Columbia will be asked to demonstrate their passion, intelligence and overall understanding of the job of Miss America. The organization is also getting rid of the evening gown portion of the competition and instead asking contestants to wear attire that makes them feel confident and expresses their personal style. The contestants will also discuss how they will advance their chosen causes, called “social impact initiatives” by the Miss America Organization. “We’ve heard from a lot of young women who say, ‘We’d love to be a part of your program but we don’t want to be out there in high heels and a swimsuit,’ so guess what, you don’t have to do that anymore,” Carlson said. “Who doesn’t want to be empowered, learn leadership skills and pay for college and be able to show the world who you are as a person from the inside of your soul.” She continued, “That’s what we’re judging them on now.” In addition to being crowned Miss America in 1989, Carlson has more recently been an outspoken advocate for victims of sexual harassment and a champion of the #MeToo movement. In 2016, she settled a lawsuit against former Fox News Chairman and CEO Roger Ailes, who stepped down from his role after mounting pressure from additional employees with similar accusations.”I could have never expected what would happen when I sued my former employer at Fox News for sexual harassment 22 months ago, but look what has happened,” she said. “Thousands of women have been inspired to know that they can stand up and speak up and their voices will be heard.”
The annual elitist confab is set to meet this week in Turin, an appropriate venue given that Italy has just elected an anti-mass migration, eurosceptic coalition government. According to the group’s official website, the number one topic of conversation at this year’s secretive meeting will be “populism in Europe”. Having failed to install a former IMF technocrat after coalition talks between the 5 Star Movement and Lega parties temporarily broke down, globalists will undoubtedly be expressing alarm at the potential for Italy to be an example to the rest of Europe. The country’s new populist government has vowed to deport 500,000 migrants, re-assert localism over globalisation & monopoly capitalism, monitor mosques and reinvigorate the country’s Christian heritage, all policies that directly contradict the neoliberal globalist consensus that Bilderberg represents. The clandestine group is also set to discuss, “The US before midterms” and the “post-truth world,” which includes efforts to combat so-called “fake news”.
Iran says it has begun work on increasing its uranium enrichment capacity, in case its 2015 nuclear deal with world powers collapses. The head of Iran’s atomic agency told reporters it was developing infrastructure to build advanced centrifuges at the Natanz facility. The agency says it is officially notifying the United Nations’ nuclear agency about the move in a letter. President Donald Trump withdrew the US from the deal with Iran last month. The head of Iran’s Atomic Energy Organisation, Ali Akbar Salehi, told reporters on Tuesday that preparations were under way to build new centrifuges. “If we were progressing normally, it would have taken six or seven years, but this will now be ready in the coming weeks and months,” he said. The work will enable Iran to make more uranium hexafluoride – a key ingredient in the enrichment process. Mr Salehi said this was in line with instructions from Supreme Leader Ayatollah Khamenei, who has ordered officials to be prepared to step up enrichment if the nuclear deal – known as JCPOA – falls apart completely. “If the JCPOA collapses – please pay attention, if the JCPOA collapses – and if we decide to assemble new centrifuges, we will assemble new-generation of centrifuges. However, for the time being, we move within the framework of the JCPOA,” Mr Salehi said. Mr Salehi insists Iran is acting “within the framework of the rules and commitments of the nuclear deal”. The accord signed with the US, France, Germany, the UK, Russia, and China, limits uranium enrichment by Iran to 3.67%, far below the roughly 90% threshold of weapons-grade material. In exchange, the country received relief from crippling sanctions. Under the agreement, Iran can build parts for the centrifuges as long as it does not put them into operation within the first decade. President Trump argued that these conditions did not go far enough to curb Iran’s nuclear ambitions and pulled out of the agreement, leaving the remaining European signatories scrambling to save it. Iran insists its nuclear programme is entirely peaceful. Its compliance with the deal has been verified by the IAEA. It is Iran’s largest uranium enrichment facility, and began operating in 2007 in contravention of UN Security Council resolutions. It consists of underground buildings capable of holding up to 50,000 centrifuges. Uranium hexafluoride gas is fed into centrifuges, which separate out the most fissile uranium isotope U-235. The facility produces low-enriched uranium, which has a 3%-4% concentration of U-235. That can be used to produce fuel for nuclear power plants, but also be enriched to the much higher level of 90% needed to produce nuclear weapons. This is a clear signal from Tehran that it is not simply a bystander and that if the nuclear deal collapses it has options too. It comes as key European countries struggle to keep the nuclear agreement on life support. Major international companies are already beginning to distance themselves from Iran in fear of US sanctions. The move inevitably increases the sense of tension and it probably does those countries eager to maintain the deal few favours. It highlights the whole issue of Iran’s formerly ambitious enrichment programme and again raises the question as to exactly what this enrichment programme was ultimately for.
WASHINGTON (Reuters) – U.S. President Donald Trump said on Monday that Chinese and Canadian trade barriers on agricultural products are unacceptable, as he continues to push Beijing to open its economy further and address its large trade imbalance with the United States. “China already charges a tax of 16% on soybeans. Canada has all sorts of trade barriers on our Agricultural products. Not acceptable!” Trump wrote in a Twitter post.
The political network backed by billionaire industrialists Charles and David Koch on Monday unveiled a multiyear, multimillion-dollar campaign opposing the tariffs implemented by President Donald Trump’s administration. Last week’s decision by the Trump’s administration to place tariffs on imported steel and aluminium from key U.S. allies the European Union, Canada and Mexico apparently was the tipping point for the influential Koch network, which typically supports Republicans and conservative causes. The group is now moving ahead with a pro-free trade campaign that will include media buys, activist education, grass-roots mobilization, lobbying and policy analysis. Koch network groups Freedom Partners, Americans for Prosperity and the Libre Initiative made it clear in an announcement Monday that they are opposed to Trump’s tariffs and that their media and PR blitz is determined to show the benefits of open trade policies. “This campaign makes a clear statement: Trade is a major priority for our network,” James Davis, executive vice president of Freedom Partners, said in a statement. “We will work aggressively to educate policymakers and others about the facts. Trade lifts people out of poverty and improves lives. It is critical to America’s future prosperity and our consumers, workers and companies. Tariffs and other trade barriers make us poorer. They raise prices for those who can least afford it.” While Americans for Prosperity President Tim Phillips praised the administration for other economic policies, he did not hold back in denouncing the tariffs. “The Trump administration has taken some incredibly positive steps for the American economy, but tariffs will undercut that progress and needlessly hamstring our full economic potential. There are better ways to negotiate trade deals than by punishing American consumers and businesses with higher costs,” Phillips said. Daniel Garza, president of the Libre Initiative, argued that tariffs would hurt those who are part of the Hispanic community and, in particular, low-income workers. “Elected officials and policy leaders need to recognize that free and open trade policies make American workers and families more prosperous,” Garza said. “The taxes and trade barriers imposed by our government on U.S. consumers raise their cost of living and impose unnecessary costs on American firms in competition with others based abroad.” The Koch network’s new campaign could become a defining moment between the administration and the powerful Koch-backed groups. “Anything that threatens an incumbent, including a campaign like this, is something Republicans will look to, especially when it comes to money because politics is about money and they will bow to the dollar,” political strategist Hank Sheinkopf said in an interview. “Who are they more afraid of? The Koch brothers and their millions of dollars tossed at them or Donald Trump? An unemployed politician doesn’t know what to do with himself when he’s out of politics,” he added.
German Chancellor Angela Merkel has congratulated Italy’s new prime minister, Giuseppe Conte. However, she later appeared to dismiss the Italian government’s calls to the European Central Bank for debt forgiveness. German Chancellor Angela Merkel held talks with Italy’s new populist prime minister, Giuseppe Conte, on Saturday and invited him to Berlin for further discussions on the two countries’ future relationship. The chancellor’s office said in a statement that Merkel had congratulated Conte on becoming prime minister. During the phone conversation, the two leaders emphasized the importance of “continued close bilateral cooperation,” the statement added. Conte, a little-known Italian law professor, has mostly kept quiet since being sworn in on Friday, but he announced on Facebook that, along with Merkel, he had also held talks with France’s Emmanuel Macron on Saturday. He said he would meet the two leaders at next week’s G7 summit in Canada, where he will be a “spokesman for the interests of Italian citizens.” Both parties campaigned on a policy platform that was characteristically hostile toward the European Union and the euro. Now that the parties are in power, it remains to be seen how far M5S and the League intend take the fight to Brussels and Frankfurt. The chancellor’s composure has not necessarily been reflected elsewhere in Germany. The latest edition of German weekly Der Spiegel, published on Friday, featured on its cover a forkful of spaghetti with a dangling strand tied together as noose. “Italy is destroying itself — and dragging down Europe with it,” the headline read. Shortly after speaking to Conte, reports emerged of Merkel appearing to rule out any possibility of Italian debt relief. Merkel said solidarity among eurozone members should not turn the single currency bloc into a “debt union.” The German chancellor was responding to reports that the Italian government plans to ask the European Central Bank (ECB) to forgive some €250 billion ($292 billion) in debt. The ECB issued a statement saying the European treaties would not allow for such a move in the first place. When asked how she intends to deal with the new populist government in Rome, Merkel said she would “approach the new Italian government openly and work with it instead of speculating about its intentions.”
Washington (CNN)Former President Bill Clinton said that impeachment hearings would have begun if a Democratic president, instead of Donald Trump, were in power and the Russia investigation was as far along as it is now. “I think if the roles were reversed — now, this is me just talking, but it’s based on my experience — if it were a Democratic president, and these facts were present, most people I know in Washington believe impeachment hearings would have begun already,” Clinton told “CBS Sunday Morning.” The former Democratic president added, “And most people I know believe that the press would have been that hard, or harder. But these are serious issues.”
The global ratings agency said measures taken by the government to bring down borrowing levels will inevitably dent business investment Beijing’s campaign to tackle the scourge of corporate debt will reduce China’s economic growth by more than one percentage point annually in the medium term, according to Fitch Ratings. The global ratings agency said measures taken by the government to bring down borrowing levels will inevitably dent business investment and take annual GDP growth down to about 4.5 per cent, well below the official target of 6.5 per cent.
“China’s corporate debt challenges remain a key downside risk to medium-term growth…investment needs to slow sharply to reduce corporate borrowing,” said Brian Coulton, chief economist at Fitch, in a report published on Sunday.
“Such an adjustment would take a big toll on GDP growth, given that business investment is equal to a quarter of GDP. “The scenario analysis we have undertaken suggests that, when it (deleveraging of the real economy) does occur, it will be a process that will be a significant drag on growth.” China’s policymakers have been aggressive in their drive to reduce the corporate debt mountain, intensifying their efforts this year and pressing regulators hard to implement measures to curb borrowing. But as credit growth and infrastructure investment have started to fall sharply, “cracks have appeared” in the real economy and a rise in defaults has tested the nerves of investors, said Larry Hu, head of China economics at Macquarie Securities in Hong Kong. Outstanding off-balance sheet lending plunged by 100 billion yuan in the first four months of 2018, having grown by 2.2 trillion yuan in the same period last year. “Of course Beijing could turn to easing or introduce measures to offset the impact of credit tightening, but so far it seems they are comfortable to tolerate the jitters caused by deleveraging, as long as the fundamentals of the economy remain okay,” Hu said. There have been more than two dozen bond defaults in China’s onshore market this year, mainly by private firms. In the offshore market, China Energy Reserve & Chemicals Group and CEFC Shanghai International Group defaulted on dollar notes in May. There is no official data to quantify corporate debt but many independent estimates put the figure at roughly 160 per cent of national gross domestic product. A Reuters survey recently suggested the total debt – including borrowing via loans and bonds – amounted to 13.2 trillion yuan (US$2.1 trillion) at the end of March. Instead of easing monetary conditions, Beijing has been fine-tuning measures to manage the balance between cutting debts and maintaining overall economic stability. The People’s Bank of China (PBOC), the country’s central bank, on Friday broadened the range of collateral it accepts in its medium-term lending operations, adding debt instruments tied to small-business funding and the green economy, to enhance support for smaller businesses.
In April, it cut the reserve requirement ratio by one percentage point to give lenders more liquidity.
A Reuters analysis last week showed that debt growth for Chinese companies has slowed to the lowest rate in more than a decade, but companies have also seen their profit margins squeezed to their lowest level in two years. China’s economic expansion is likely to slow to 6.6 per cent this year and to about 5.5 per cent by 2023, the International Monetary Fund (IMF) said in a statement issued last week in Beijing.
U.S. auto makers betting big that small cars are a relic of the past
America’s recent oil boom has begotten a dangerous and false euphoria. Many economists and pundits have concluded rising oil prices are hardly damaging to the U.S. economy. In 2006, U.S oil production had bottomed at about 6.8 million barrels a day and the country labored under a $271 billion petroleum trade deficit. That taxed gross domestic product by at least 2.55 and employment by 3.5 million jobs during the Great Recession. The shale boom made the problem easier, and America’s energy policy makers — not nearly all of whom are in Washington — and critics of conservation seem to believe America can burn all the gas it likes and America is headed for a new prosperity as a net oil exporter. However, the problem has gotten easier but it has not gone away. This year, the overall petroleum deficit—crude oil and refined product imports less exports—will likely be about $100 billion and reduce aggregate demand by about 0.7% and employment by 1 million. The Trump administration recognizes the foreign policy and economic benefits of freeing America from import dependence and deserves significant credit for rationalizing petroleum production regulation. Along with rising oil prices, this is pushing up crude yields in the Permian and Bakken fields but net oil imports are still about 3.3 million barrels a day. Hence, when the price of oil rises, oil producers and workers’ incomes do rise but everyone else loses even more though higher priced gas, heating oil and feedstock for the petrochemical industry. And the overall drag on growth, employment and wages gets worse. The Saudis with help from Vladimir Putin, state entropy in Venezuela and sanctions on Iran have driven up oil and pump prices again—and Saudi Crown Prince Mohammad has set a target of about $80 per barrel. He needs that much to balance the kingdom’s budget, but the Saudis and Russians remain concerned about how much and how quickly they can push oil prices. If OPEC is dead as its American detractors allege, the crown prince has got a corpse dancing the supernatural—that has pushed gas prices to nearly $3 a gallon.
Since the last time US President Donald Trump visited Japan for talks with Prime Minister Shinzo Abe, the once critically important bond between the two countries seems to have weakened. This could best be illustrated by the round of golf the two leaders had during Trump’s trip. Abe – a keen rather than skilled golfer – sank a shot into a bunker, although he managed to whack his ball out with a problem. However, as he was trying to get out, he lost his footing and tumbled back into the sand, his indignity caught with the long lenses of television cameras on hovering helicopters. Trump, oblivious to Abe’s plight, continued down the fairway with only his ball in mind. Seven months later, the US leader is still forging ahead in his dealings with North Korea and leaving Abe and Japan trailing unheeded in his wake. And that Trump is paying no attention to Japan’s primary concerns – security and the return of Japanese nationals abducted by North Korea – is causing concern in Tokyo. Japan is disappointed it has been left out of discussions on issues it believes it has a stake in and, on more than one occasion, has been stunned after only finding out about US policies through Twitter or media reports. Abe is due to travel to Washington before Trump leaves for his summit in Singapore with Kim Jong-un. He is expected to urge the US president to make sure Pyongyang commits to scrapping missiles capable of hitting Japan, destroying stockpiles of chemical and biological weapons, and provide details about missing Japanese, besides its promise to abolish nuclear weapons and long-range missiles.
“Abe advocates ‘maximum pressure’ on North Korea and the announcement … that Trump had agreed to a summit with Kim must have been a particularly bitter pill to swallow.”
On Friday, Trump said he does not want to use the term “maximum pressure” any more because the US and North Korea are now “getting along”.
That led to Japan’s Defence Minister Itsunori Onodera toning down a speech on Saturday at the Shangri-La Dialogue in Singapore and “pressure” being removed from a joint statement on North Korea with his South Korean and US counterparts. With Kim holding talks with President Xi Jinping, South Korean President Moon Jae-in and soon Trump, Abe appears increasingly sidelined.
GENEVA (Reuters) – Poverty in the United States is extensive and deepening under the Trump administration whose policies seem aimed at removing the safety net from millions of poor people, while rewarding the rich, a U.N. human rights investigator has found. In a report, Alston said that as welfare benefits and access to health insurance were being slashed, President Donald Trump’s tax reform awarded “financial windfalls” to the mega-rich and large companies, further increasing inequality. Extreme poverty in the United States, however, is not new. Alston said U.S. policies since President Lyndon Johnson’s war on poverty in the 1960s have been “neglectful at best”. “But the policies pursued over the past year seem deliberately designed to remove basic protections from the poorest, punish those who are not in employment and make even basic health care into a privilege to be earned rather than a right of citizenship,” Alston said. Almost 41 million people or 12.7 percent live in poverty, 18.5 million in extreme poverty, and children account for one in three poor, Alston said. The United States has the highest youth poverty rate among industrialized countries, he added. Alston, a veteran U.N. rights expert and New York University law professor, will present his report to the United Nations Human Rights Council later this month. Alston said that a tax overhaul that passed the Republican-controlled U.S. Congress in December will ensure the United States remains the most unequal society in the developed world. Trump has said tax cuts will lead to more take-home pay for workers and has touted bonuses some workers received from their employers as evidence the law is working.
Syrian President Bashar al-Assad plans to make a state visit to North Korea, the North’s state news agency says. It would be the first time North Korean leader Kim Jong-un has hosted a head of state since assuming power in 2011. He has undertaken a flurry of diplomatic activity recently, meeting China’s president in May, and is expected to attend a summit with Donald Trump this month. Syria, an ally of the North, has made no comment on the reported plan. The two countries have been accused of co-operating on chemical weapons. But both nations deny the accusations. No date for the visit was mentioned by the North Korea’s KCNA news agency. It quoted Mr Assad as saying on Wednesday: “I am going to visit [North Korea] and meet Kim Jong-un.” His comments reportedly came as he received the credentials of North Korean ambassador Mun Jong-nam. Mr Assad was also quoted as saying that he was sure Mr Kim would “achieve the final victory and realise the reunification of Korea without fail”. The North established diplomatic relations with Syrian in 1966 and sent troops and weapons during the Arab-Israeli war in October 1973. A UN report leaked in February accused the North of making 40 shipments to Syria between 2012 and 2017 of materials including acid-resistant tiles, valves and pipes that could be used to make chemical weapons. Mr Assad has been accused of using chemical weapons during the nation’s seven-year civil war but denies having any such stockpiles. Since the North signalled at the start of this year that it was open to a rapprochement with the South, with which it is still technically at war, Mr Kim has met Chinese President Xi Jinping, South Korea’s Moon Jae-in and has floated a summit with Russian President Vladimir Putin this year. But it is the meeting in Singapore on 12 June with President Trump that is the most high-profile and which has the most at stake, with the US demanding the full denuclearisation of the Korean peninsula and the North seeking to ease crippling sanctions.
RIYADH (Reuters) – OPEC and non-OPEC Arab oil ministers stressed the need for continued cooperation between oil producers who are part of a pact for a global supply cut that is due to expire at the end of 2018, Kuwait’s state news agency KUNA reported on Sunday. The Organization of the Petroleum Exporting Countries, Russia and several other producers agreed to cut output by about 1.8 million barrels per day (bpd) starting from January 2017. The curbs have driven down inventories and pushed up oil prices. OPEC ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria along with their counterpart from non-OPEC Oman gathered in Kuwait on Saturday for an unofficial meeting of a joint ministerial committee that monitors compliance with the agreement. The ministers “stressed the need to maintain the existing cooperation and continue the successful endeavour carried out by the participating countries,” according to a statement by the committee, known as the JMMC, published on KUNA. “They called for sustaining the current partnership in order to continuously adapt to ongoing market dynamics, in pursuit of the interests of consumers and producers whilst promoting healthy global economic growth.” The ministers also “emphasised the need for healthy market conditions that stimulate adequate investments in the energy sector, in order to ensure stable oil supplies are made available in a timely manner to meet growing demand and offset declines in some parts of the world,” the statement added. The agreement has helped raise oil prices to above $80 a barrel and reduce a global oil supply glut.
OPEC could decide to raise oil output as soon as June to cool the market and due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC sources familiar with the discussions told Reuters last month. OPEC meets next on June 22 to set oil policy.
BEIJING (AP) — China warned Sunday after another round of talks on a sprawling trade dispute with Washington that any deals they produce “will not take effect” if President Donald Trump’s threatened tariff hike on Chinese goods goes ahead. The warning came after delegations led by U.S. Commerce Secretary Wilbur Ross and China’s top economic official, Vice Premier Liu He, wrapped up a meeting on Beijing’s pledge to narrow its trade surplus. Ross said at the start of the event they had discussed specific American exports China might purchase, but the talks ended with no joint statement and neither side released details. The White House threw the meeting’s status into doubt Tuesday by renewing a threat to impose 25 percent tariffs on $50 billion of Chinese high-tech goods in response to complaints Beijing steals or pressures foreign companies to hand over technology. The event went ahead despite that but Beijing said it reserved the right to retaliate. Tuesday’s announcement revived fears the conflict between the two biggest economies might dampen global growth or encourage other governments to raise their own barriers to imports. “If the United States introduces trade sanctions including a tariff increase, all the economic and trade achievements negotiated by the two parties will not take effect,” said the Chinese statement, carried by the official Xinhua News Agency. The negotiating process should be “based on the premise” of not fighting a “trade war,” the statement said. Trump is pressing Beijing to narrow its politically volatile trade surplus with the United States, which reached a record $375.2 billion last year. That comes at the same time Trump has riled some of America’s closest allies with the imposition of tariffs on steel and aluminum imports. After a three-day meeting of finance ministers from the G7 industrial nations that ended Saturday in Canada, Canadian Finance Minister Bill Morneau issued a summary saying the other six members want Trump to hear their message of “concern and disappointment” over the U.S. trade actions. Allies including Canada and the European Union are threatening retaliatory tariffs. Bruno Le Maire, France’s finance and economy minister, was blunt in his assessment of the meeting. “It has been a tense and tough G7 — I would say it’s been far more a G6 plus one than a G7,” said Le Maire, who called the tariffs unjustified. “We regret that our common work together at the level of the G7 has been put at risk by the decisions taken by the American administration on trade and on tariffs,” he said
Analysts suggested Trump might be trying to appease critics of his administration’s deal to allow Chinese telecom equipment giant ZTE Corp. to stay in business. They said those political pressures mean the technology-related tariff hikes are likely to go ahead.
Members of Congress criticized the agreement to lift a ban on sales of U.S. components to ZTE, which admitted violating rules on exports to Iran and North Korea. In exchange, the company is to remove its management team, hire American compliance officers and pay a fine. Trump has threatened to raise tariffs on a total of up to $150 billion of Chinese goods. Tuesday’s announcement gave no indication whether the other increases might also go ahead. China has threatened to retaliate by raising import duties on a $50 billion list of American goods including soybeans, small aircraft, whiskey, electric vehicles and orange juice. It criticized Tuesday’s announcement but refrained from repeating its earlier threat. Private sector analysts say while Beijing is willing to compromise on its trade surplus, it will resist changes that might threaten plans to transform China into a global technology competitor
WASHINGTON (Reuters) – U.S. President Donald Trump’s lead attorney said that if the special counsel investigating Russia’s alleged meddling in the 2016 U.S. election were to subpoena the president, it would set off a legal battle, according to an ABC News report on Saturday. Rudy Giuliani, the former New York City mayor who became Trump’s lead lawyer in April, said the two sides would go to court if U.S. Special Counsel Robert Mueller attempts to subpoena the president. “If Mueller tries to subpoena us, we’re going to court,” Giuliani told ABC News. In addition to fighting a subpoena, Giuliani told ABC that Trump’s legal strategy as detailed in a January letter to Mueller and published by the New York Times on Saturday still stands. Trump’s lawyers had argued in the January letter that the president could not have obstructed the probe given the powers granted to him by the U.S. Constitution, the Times report said. In the letter penned by Trump lawyers John Dowd and Jay Sekulow, it was argued that president has the power to “order the termination of an investigation by the Justice Department or FBI at any time and for any reason.” In the letter to Mueller, Trump’s lawyers had contended that the Constitution gives the president the power to “terminate the inquiry, or even exercise his power to pardon,” and that meant he could not illegally obstruct the investigation, the Times reported. The 20-page letter was a response to repeated requests by Mueller’s office asking to interview Trump. Negotiations between Trump’s lawyers and the special counsel on a possible interview have continued ever since. As part of his investigation, Mueller is looking into the possibility the Trump campaign colluded with Moscow and that Trump subsequently tried to obstruct the probe. Russia has denied any interference and Trump has repeatedly said there was no collusion or obstruction of justice. Giuliani did not immediately respond to a request for comment. Mueller’s office declined to comment, while the White House and the two attorneys who wrote the letter – Sekulow and Dowd – did not reply to requests for comment. Dowd left the president’s legal team in March. Giuliani said last month that he wanted any interview of Trump to be limited in scope and length, suggesting it to be only 2-1/2 hours and not under oath. If the president does not consent to an interview with the special counsel and Mueller does subpoena him, the interpretation by Trump’s lawyers of broad executive powers would likely be tested in court if they decided to fight the subpoena. In arguing that Trump has the power to end an investigation or pardon people, his lawyers left open the possibility that they were referring only to a probe into his former national security adviser, Michael Flynn, and not necessarily an investigation of the president, the Times said. In an earlier tweet, Trump took what appeared to be a pre-emptive swipe at the Times report shortly before it ran that questioned whether Mueller’s office or the Justice Department leaked letters from his lawyers. “When will this very expensive Witch Hunt Hoax ever end?” Trump tweeted earlier on Saturday.
SINGAPORE—The U.S. and China appear to be headed for a more confrontational relationship in Southeast Asia as Washington warns of a more aggressive response to the militarization of disputed islands in the South China Sea. Speaking at the Shangri-La Dialogue, a regional security conference, U.S. Defense Secretary Jim Mattis warned there could be “much larger consequences” in the future from China’s moves to install weapons systems on islands in the sea. He didn’t specify what the consequences would be. The warning, in response to a question from an audience member, came after a speech by Mr. Mattis in which he said “despite China’s claims to the contrary, the placement of these weapons systems is tied directly to military use for the purposes of intimidation and coercion.” He also called his decision to not invite China to the biennial Rim of the Pacific exercise, slated to begin later in June, “an initial response” to its increased militarization of the South China Sea. His comments were the most assertive yet in response to what he has described as a ramp-up of Chinese military activity in the past month. This appeared to lay the groundwork for an increased U.S. military—or even economic—response. China recently sent an H-6K heavy bomber to Woody Island, one of the areas under dispute. It also installed surface-to-air and antiship cruise missiles and communication-jamming equipment on some islands, U.S. officials have said. The U.S. responded last month by sending two Navy warships into the South China Sea to conduct a freedom of navigation operation. China’s activities are “in stark contrast to the openness of what our strategy promotes; it calls into question China’s broader goals,” Mr. Mattis told a packed house of international military officials, senior global lawmakers, experts and others on Saturday. China says it has “indisputable” sovereignty over a number of South China Sea islands and the surrounding waters. It says its new facilities are for defensive and civilian purposes. The U.S. military recently changed the name of its command covering Asia and the Pacific Ocean to the Indo-Pacific Command from the Pacific Command. Military analysts say the American appeal to India reveals concerns about Beijing’s assertive stance in the region. And it has drawn criticism from China. But during the conference’s keynote speech, Indian Prime Minister Narendra Modi stressed the concept of a “regional comprehensive partnership.” He spoke about the need to work with multiple nations, including the U.S. and China. “India does not see the Indo-Pacific region as a strategy or as a club of limited members,” Mr. Modi said.
Ryan said in a statement on Thursday:
I disagree with this decision. Instead of addressing the real problems in the international trade of these products, today’s action targets America’s allies when we should be working with them to address the unfair trading practices of countries like China. There are better ways to help American workers and consumers. I intend to keep working with the president on those better options.
— Phil Mattingly (@Phil_Mattingly) May 31, 2018
On Thursday, America ended a delay on steel and aluminum tariffs for the European Union, Canada, and Mexico. Speaker Ryan’s opposition to the tariffs on foreign steel contrasts with his Republican base. A Morning Consult poll in March revealed that 70 percent of Republican voters support Trump’s tariffs on foreign steel and aluminum. The survey also suggested that a plurality of Americans—41 percent — support Trump’s tariffs.
Another poll suggested that more than 80 percent of Americans support Trump’s trade economic nationalism.
Daniel McCarthy, the editor of the conservative Modern Age, told Breitbart News Saturday in March that the “Republican party was built on economic nationalism.”
If we go back further than 30 years, we go back to the 19th century, the Republican party was built on economic nationalism and a party supported strong tariffs, people like President McKinley for example stand out as strong leaders of that. The Republican party has a long tradition of supporting American industry.
Speaker Ryan announced in April that he will not seek reelection at the end of this congressional term. Since Ryan announced his retirement, he has had to balance the competing interests of the moderate wing of the House Republican conference, that wants to pass a Deferred Action for Childhood Arrivals (DACA) illegal alien amnesty, and the House Freedom Caucus, that wants to pass the Trump-endorsed Goodlatte immigration bill. Speaker Ryan failed to garner enough votes to pass the Farm bill in May after the Freedom Caucus did not believe that the House Republican leadership would put the Goodlatte immigration bill on the House floor for a vote. Former Freedom Caucus chairman Jim Jordan (R-OH) told Breitbart News Saturday in May that conservative and moderate members have become frustrated with Speaker Ryan and the House Republican leadership. A number of conservative leaders have led a campaign to draft Jordan to become the next Speaker of the House. In the letter, the conservative leaders said that the current House leadership has “utterly failed” and “proven that it’s part of the Swamp.”
The GOP isn’t what it was, in House Speaker John Boehner’s view. Asked at a conference about what’s going on with the Republican Party, Boehner cut off the question by saying, “There is no Republican Party. There’s a Trump party. The Republican Party is kind of taking a nap somewhere.” “When I was speaker, and I was having a rough week, Trump would call me up, pat me on the back, cheer me up,” Boehner said during an on-stage interview at the Mackinac Policy Conference in Michigan. “We played a lot of golf together.” He admitted he was surprised when Mr. Trump was elected president — “Really? I never quite saw this,” he said. He then quipped, “The two most surprised people in the entire world that night (Election Night) were Hillary Clinton — and Donald Trump.” Out of office, Boehner has spoken with similar frankness on other occasions. He’s referred to GOP Texas Sen.telling one audience, “I get along with almost everyone, but I have never worked with a more miserable son of a bitch.” He also said that everything Donald Trump has done in office “has been ” except foreign policy.
Regional Fed president tells MarketWatch she continues to see myriad reasons to keep lifting U.S. interest rates
The market may have encountered a fresh round of turmoil, but Cleveland Fed President Loretta Mester’s message on the U.S. economy and how many interest-rate hikes are needed has stayed just as it was. “Whether it’s three or four, I know the markets want to know exactly that, but in terms of the economy and the macroeconomy, I think that is less important. I think the important thing is we need to be moving the funds rate up gradually because the economy is improving, and we’re getting at our goals,” Mester said in an exclusive interview with MarketWatch from her elegant office in Cleveland. Neither worries about contagion effects from the turmoil in Italy or a flattening yield curve has persuaded Mester to rethink her support for gradual rate hikes. Mester threw cold water on the idea that wages are somehow mysteriously low. The fact is that worker compensation is rising and soon will be reflected in the statistics, she said. In a wide-ranging interview, Mester, who is a voting member of the Fed’s policy committee this year, said she didn’t think inflation would spike. She said she could tolerate “a couple” of inflation readings above 2%. She stressed that the data would dictate the path of policy, and the impact of the Trump tax cut and congressional spending package would be much clearer later this year.
The Trump administration’s decision to slap tariffs on Canada and Mexico makes it less likely there will be a new NAFTA deal in the near term and sends a modestly negative signal on U.S. trade policy, according to Goldman Sachs economists. The U.S. Thursday announced 25 percent tariffs on steel and 10 percent tariffs on aluminum imported from the European Union, as well as Canada and Mexico. Commerce Secretary Wilbur Ross said, on CNBC Thursday, that negotiations with Canada and Mexico were not far enough along to extend their exemption from the tariffs, which expired Friday. The U.S., Canada and Mexico have been negotiating a revamp of the North American Free Trade Agreement, but trade experts have been saying the outlook for an agreement is no longer as optimistic as it had been just a few weeks ago. Goldman economists say the tariffs now make the outlook even worse. “The decision to impose tariffs on Canada and Mexico suggests that prospects for a NAFTA agreement in the near-term are fading,” the Goldman economists wrote. “The Administration’s negotiating stance is often unpredictable so there is a risk of over-interpreting any single event. That said, this represents another signal that prospects for a near-term NAFTA deal are fading, just a few weeks after it had appeared fairly likely that a “skinny” agreement involving the auto sector might be reached.” House Speaker Paul Ryan had requested a deal by May 17 so that the current Congress could vote on it. But U.S. Trade Representative Robert Lighthizer warned that an agreement was not close. Goldman economists said the tariffs, as well as new quotas on South Korea, Australia and Brazil, should have only a modest economic impact. “The incremental inflation effect of these tariffs should be small. We estimate that adding Canada, Mexico, and the EU to the countries facing a tariff of 25% on steel and 10% on aluminum could boost core PCE by roughly 1bp. Imports from NAFTA and EU countries make up just under half of steel and aluminum imports,” the noted.
Sears Holdings said Thursday it will be shuttering 72 more stores in 2018 and has identified 100 unprofitable locations in total that it plans to close over time. ,” Sears said. That consists of 15 Kmart stores and 48 Sears stores, all of which are expected to be closed by early September. A Sears spokesman declined to comment on the number of associates impacted by the news. This is in addition to the 64 Kmart stores and 39 Sears stores that have already shut down this year. The company will end 2018 with fewer than 1,000 locations spread across the U.S. altogether. Sears Holdings plans to shutter 72 more stores, with closing sales starting in the near future The department store chain made the store closure announcement Thursday in tandem with reporting its first-quarter earnings, where it said sales dropped roughly 30 percent in the latest period. Sears has closed hundreds of locations over the years as part of its cost-cutting efforts, while revenues continue to erode. “We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted,” Sears said about its plans for the future.
WASHINGTON—The U.S. labor market was firing on all cylinders in May: the unemployment rate fell to an 18-year low, employers added jobs at a faster pace and wages modestly improved. The unemployment rate ticked down to a seasonally adjusted 3.8%, matching April 2000 as the lowest reading since 1969, the Labor Department said Friday. Nonfarm payrolls rose a seasonally adjusted 223,000 in May, a jump from gains from March and April. Average hourly earnings ticked up to a 2.7% from a year earlier—and raises were even stronger for nonmanagers. U.S. employers have added to payrolls for 92 straight months, extending the longest continuous jobs expansion on record. And those gains are extending to all corners of the labor market.
The jobless rates for blacks, Latinos and those without high-school diplomas are trending near record lows.
A tighter labor market should also produce better wage growth, but overall gains have remained modest. Average hourly earnings for all private-sector workers increased 8 cents last month to $26.92.
“The tight labor market is putting employers under enormous pressure to invest as much as necessary to retain their best employees and attract the best talent,” said Rebecca Henderson, chief executive of employment firm Randstad Sourceright. One factor holding wage gains in check is the ability of employers in the past year to bring Americans who have been out of the labor market back into the workforce and dissuade existing employees from retiring or otherwise exiting.
In May, the share of American adults working or looking for a job edged down to 62.7%, but the share with jobs ticked up to 60.4%. Labor-force participation is up slightly from a recent low in 2015, but still near the smallest share of adults participating since the late 1970s.
Friday’s report showed the health care sector added 31,700 jobs. Employment also grew in construction, manufacturing and retail. Employment fell for temp workers. All levels of government added 5,000 jobs last month. Jobless RatesUnemployment fell to 3.8% in May, its lowest point in 18 years. A broad measure of unemployment and underemployment that includes Americans stuck in part-time jobs or too discouraged to look for work fell to 7.6% from 7.8% the prior month. That rate, known as the U-6, remains somewhat elevated compared with the last time unemployment was similarly low. In April 2000, the broader measure was 6.9%.
The average workweek was unchanged at 34.5 hours in May.
- “I think we’re in a rolling bear market,” said Mike Wilson, Morgan Stanley’s chief U.S. equity strategist. “It’s fooling everybody at the index level, but there’s a lot of pain out there.”
- The strategist’s comment came as the S&P 500 fell 0.3 percent and the Dow Jones industrial average slipped nearly 1.2 percent.
- The most bearish strategist tracked by CNBC, Wilson has consistently forecasted that the S&P 500 will finish the year at 2,750, implying less than 1 percent upside for the rest of the year.
Morgan Stanley’s chief U.S. equity strategist believes the stock market is in the midst of a cyclical bear market that could last through the end of next year. “I think we’re in a rolling bear market. Every sector has gone down at least 11 or 12 percent at least once this year. Some were down 18, 19, 20 percent,” Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, said on CNBC’s “Halftime Report” on Thursday. “It’s fooling everybody at the index level, but there’s a lot of pain out there: Staples, homebuilders, some of these semiconductor stocks that are more cyclical are having problems.” The strategist’s comment came as the major market indexes added to their weekly losses, with the S&P 500 down 0.3 percent and the Dow Jones industrial average down nearly 1.2 percent since Tuesday. Markets were closed Monday for the Memorial Day holiday. While stocks remain above their lows notched earlier this year, Wilson explained his definition of a bear market varies from traditional Wall Street wisdom. “A bear market to me doesn’t [necessarily] mean the market has to go down 20 percent,” he said. “A bear market is a tougher environment, it’s hard to make money. Volatility is a lot higher, so I don’t care what kind of portfolio you’re running, you can’t run as much risk anymore, you just can’t do it.”
Spanish Prime Minister Mariano Rajoy has been forced out of office by a no-confidence vote in parliament. Socialist leader Pedro Sánchez, who filed the motion after Mr Rajoy’s party was implicated in a corruption scandal, will become prime minister. “We’re going to sign a new page in the history of democracy in our country,” Mr Sánchez said ahead of Friday’s vote. Mr Rajoy is the first prime minister in modern Spanish history to be defeated in a no-confidence motion. The leader of the conservative Popular Party (PP) has been prime minister since 2011. During the second day of debate on Friday, Mr Rajoy admitted facing defeat and told MPs that it has been “an honour to leave a better Spain than I found”. Mr Sánchez secured a majority in the vote after gaining support from various smaller parties, including the Basque Nationalist Party – 180 MPs backed the motion, 169 voted against, with one abstention.Why was the vote called? Mr Sánchez says Mr Rajoy, 63, had failed to take responsibility for his party’s involvement in the scandal, which hit the headlines again last week after one of its former treasurers was given a 33-year jail sentence.
Deutsche Bank’s long-running turmoil was dealt a fresh blow Thursday, when share prices tumbled after it was reported that the Federal Reserve labeled the bank’s U.S. business as being in a “troubled condition.” Less than 24 hours later, influential group Standard & Poor’s slashed its credit rating, potentially raising the cost of its borrowing. The ratings agency also questioned whether Deutsche Bank’s CEO Christian Sewing would be able to return the bank to profit. “Let’s be straightforward: the newsflow is not good… I know that the current newsflow must give you the feeling that the bank is not getting any respite. That’s why I think it’s important for me to put this news in perspective,” Sewing said in a letter to staff Friday.”At group level, our financial strength is beyond doubt,” he added.
Germany’s biggest bank ‘vulnerable to speculation’
Citing sources familiar with the matter, the Wall Street Journal reported Thursday that the Federal Reserve had downgraded Deutsche Bank’s U.S. business to one of the lowest possible designations last year. Meanwhile, the Financial Times also reported Thursday, citing a source, that Deutsche Bank’s U.S. subsidiary was added to the Federal Deposit Insurance Corporation’s list of “problem banks,” or those with weaknesses that threaten their financial survival. The news prompted shares of Deutsche Bank to collapse to their lowest-ever closing level Thursday.
Photo courtesy of Whole Foods
In a copy of the announcement obtained by The New Food Economy, Gallo and two vice presidents write that the pause is a response to suppliers’ concerns about having to comply with two competing sets of rules: Whole Foods’ own GMO labeling requirements, and rules newly proposed by the United States Department of Agriculture (USDA), which are currently open for public comment. All this begs a question: is Whole Foods softening its commitment to GMO-labeling transparency? As currently written, Whole Foods’ requirements would be more stringent than the proposed USDA rules in at least two significant ways. First, USDA has suggested letting companies label BE ingredients by QR code, meaning that customers would need to be directed to a website via smartphone to find out what’s in their food—a method that has been criticized as a cumbersome extra step. Whole Foods has never planned to allow QR codes to count as GMO disclosures, Project Nosh reports. Second, USDA rules contain perplexing carveouts for meat products, which are regulated under a different system, as explained here and here. All this begs a question: is Whole Foods softening its commitment to GMO-labeling Nick Bit: I fight GMO, Glutton loaded food and modified corn starch super sugars on a daily bases. My data base proves this SHIT is making people sick, fat and diabetic. The reason for the world is getting fat and diabetes epidemic is NOT NOT NOT sugar in fizzy drinks. Its GMO modified foods from hell with proteins that the human race has never seen before, Glutton and super yeast added to processing to cut down on fermentation times and SUPER sugars that are a glucose and fructose combined made out of modified corn starch.
Washington (CNN)Republicans on Capitol Hill were fuming after the White House abruptly announced it would begin imposing steel and aluminum tariffs Friday on US allies Canada, Mexico and the European Union. The move Thursday came after Republicans tried to convince the administration for months to target China with tariffs rather than US trading partners, and it could trigger Republicans on Capitol Hill to consider taking action against their own President on trade.
Rolling Acres Mall in Akron, Ohio opened in 1975 to great fanfare as the premier shopping destination for the surrounding community. But customer traffic started to slow more than a decade ago, several department stores abandoned their leases, and the mall started failing. It lost its last store tenant in 2013. The mall was still standing vacant last year, and it remained a safety concern. The mayor of Akron instructed residents in July to “stay clear” of the area. The city finally began the process of demolishing the rotting shopping center in late October. Like Rolling Acres, shopping malls across the country are dying, and in some cases leaving jobless communities and rotting buildings that are hotbeds for crime in their wake. Dozens of malls have closed in the last 10 years, and many more are at risk of shutting down as retailers like Macy’s, JCPenney, and Sears – also known as anchor stores – shutter hundreds of stores to staunch the bleeding from falling sales.
The commercial real estate firm CoStar estimates that nearly a quarter of malls in the US, or roughly 310 of the nation’s 1,300 shopping malls, are at high risk of losing an anchor store.
When anchor stores close, it can be hard to find businesses to replace them because they occupy the giant, multi-story buildings at mall entrances, which are are often at least 100,000 square feet. If no replacement tenant is found, the loss can trigger a decades-long downward spiral for the shopping mall and surrounding communities. “The communities wither away, and they never come back,” says Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm headquartered in New York City.
When anchor stores are boarded up, traffic tends to decline to the retailers located in the middle sections of malls. That has been happening at shopping malls nationwide, and now many retailers are going out of business and closing all their stores as a result.
Just within the last couple months, several mall-based stores including American Apparel, Abercrombie & Fitch, The Limited, Bebe, BCBG, and Wet Seal have all announced mass closures. The process of a shopping mall shutting down entirely happens slowly – often over the course of a decade or more. As stores are boarded up one by one, shopper traffic slows and crime in the area tends to spike, Davidowitz says. “Malls are big, big contributors to city and state taxes, jobs, and everything,” Davidowitz says. “Once they close, they are a blight on the community for a very long time.” There were as many as 890 crime incidents at one Memphis-area mall between January 1, 2012 and July 15, 2015, according to an investigation last summer by local NBC affiliate WMC Action News. Zent said he believes that crime is the biggest reason why shopping mall traffic has declined in the last decade, though many analysts attribute those declines to changing shopper preferences and the rise of online shopping. Sure enough, studies show Americans are increasingly choosing to spend money on technology and experiences like vacations over apparel. When they shop for clothing, a growing number of them are going to discount stores like TJ Maxx or ordering from Amazon
Canadian PM on tariffs: We hope common sense will triumph
Canada will retaliate against new U.S. tariffs by imposing its own trade barriers on U.S. steel, aluminum and other products, Canadian Foreign Minister Chrystia Freeland said Thursday. Freeland said Canada plans to slap dollar-for-dollar tariffs on the U.S. The Nafta partner’s proposed import taxes would also cover whiskey, orange juice and other food products alongside the steel and aluminum tariffs. The retaliatory measures will cover CA$16.6 billion in imports, Freeland said. The products being targeted will be subject to tariffs between 10 percent and 25 percent. Canadian Prime Minister Justin Trudeau said that the tariffs, announced Thursday by Commerce Secretary Wilbur Ross, are an affront to the security partnership between the U.S. and Canada. Ross said the tariffs will take effect at midnight Thursday, when previously set exemptions for Canada, Mexico and the European Union are set to expire. The tariffs are “totally unacceptable,” Trudeau said, though he noted that Canada will continue to negotiate with the U.S. Trudeau warned that the import taxes — of 25 percent on steel imports and 10 percent on aluminum imports — will harm both countries’ economies.
Pending sales were 2.1 percent lower compared to April of 2017 the fourth straight month showing an annual decline. The Realtors point, again, to the continuing supply crisis in housing today. “Feedback from Realtors, as well as the underlying sales data, reveal that the demand for buying a home is very robust. Listings are typically going under contract in under a month, and instances of multiple offers are increasingly common and pushing prices higher,” said Lawrence Yun, chief economist for the NAR in a release. “The unfortunate reality for many home shoppers is that reaching the market will remain challenging if supply stays at these dire levels.”
Weakening affordability is going hand-in-hand with short supply, especially on the lower end of the market. As home prices continue to rise, potential buyers have less and less wiggle room in their wallets.
Mortgage rates jumped sharply in April, with the average rate on the popular 30-year fixed hitting its highest level in seven years. Buyers out shopping were having to recalculate their budgets for homes. Buyers are also seeing higher prices for gas, which, while not a major factor for everyone, may weigh on consumer confidence. Buying a home is usually the largest investment most people ever make, and confidence is therefore key. “The combination of paying extra at the pump, while also needing to save more for a down payment because of higher rates and home prices, may weigh on the psyche of those looking to buy,” said Yun. Regionally, pending home sales in the Northeast were unchanged for the month and 2.1 percent lower than one year ago. In the Midwest, sales decreased 3.2 percent monthly, and were 5.1 percent lower than April 2017.
Wharton School finance professor Jeremy Siegel appears to be wandering from the bull camp. Siegel, who helped lead 2017’s rally cry, told CNBC’s “Trading Nation” that he isn’t blaming Italy’s political turmoil, the latest headline to rock the markets, for a borderline bearish forecast. Rather, he cited risks from rising rates to trade tensions. “The major threat of the market is higher interest rates going forward. Too many people read the FOMC minutes as being too dovish,” he said Wednesday.
Siegel expects the Federal Reserve to hike rates a total of four times this year, a number Wall Street may be dangerously underestimating. As rates rise, stocks historically look less appealing to investors.
He’s also viewing trade tensions with China as a “wild card” for the market. “[President Donald Trump] feels he has to tread very, very carefully on this. It doesn’t mean for sure he won’t go full blast forward,” Siegel said. “Caution is going to be the word here.” His thoughts came as stocks staged a comeback a day after Italy tensions rattled the market. Siegel has been warning since December that 2018 wouldn’t be as robust as 2017, and stocks would be flat to up 10 percent by year-end. “This is a great year for earnings, no one argues with that. But the tax cut is front-loaded which means that the write-offs on capital equipment are going to accrue to 2018 and not nearly as much in 2019,” Siegel said.
MEXICO CITY (Reuters) – Mexico responded to U.S. steel and aluminum tariffs by imposing wide-ranging “equivalent” measures on farm and industrial products, the economy ministry said on Thursday, ratcheting up tensions during talks to renegotiate NAFTA. The United States on Thursday morning said it was moving ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, ending a two-month exception and threatening to ignite a trade war. The Mexican measures, which target pork legs, apples, grapes and cheeses as well as steel, could hit farm states that are a bastion of support for U.S. President Donald Trump, ahead of American midterm elections in November. The Mexican measures will be in place until the U.S. government eliminates its tariffs, the ministry said.
“Mexico profoundly regrets and condemns the decision by the United States to impose these tariffs on imports of steel and aluminum from Mexico,” the ministry said.
“Mexico reiterates its openness to constructive dialogue with the United States, its support for the international commerce system and its rejection of unilateral protectionist measures,” it said. Mexico buys more steel and aluminum from the United States than it sells. It is the top buyer of U.S. aluminum and the second buyer of U.S. steel, the economy ministry said. The countermeasures will hit U.S. hot and cold rolled steel, plated steel and tubes, the ministry said. The United States, Canada and Mexico have been renegotiating the North American Free Trade Agreement, which governs trade between the three countries.
While US personal incomes grew, as expected, at 0.3% MoM, Americans resumed spending fare more than they make (increasing 0.6% MoM in April). For the 28th month in a row, YoY growth in spending has outpaced incomes, sending the savings rate back down to just 2.8, the lowest since the debt-funded holiday spending spree of December 2017, and just shy of record lows. Spending YoY is the highest since April 2017: Adjusted for inflation, real consumption rose 0.4%, double the median projection of 0.2%. The Commerce Department said spending for gasoline and other energy goods, as well as household utilities, were leading contributors to the monthly increase in real outlays. Real durable goods spending, rose 0.3% after a 1.9% increase in the prior month; nondurable goods advanced 0.4% for a second month. Outlays on services, adjusted for inflation, rose 0.4% after a 0.3% gain in prior month.
Sears Holdings Corp. SHLD -9.66% said Thursday that it plans to close another 72 stores it has deemed unprofitable, as the company continues to struggle with falling sales. Sears has been closing hundreds of stores in recent years, selling brands and spinning off divisions to stay afloat as losses have mounted and as it struggles to keep its customers away from Walmart Inc., Amazon.com Inc. AMZN 0.58% and other outlets. The company said a list of the 72 stores would be posted later Thursday.
The new round of store closures comes as the retailer reported sales fell in the latest quarter, extending a streak of declines that stretches back more than six years at the once dominant retailer. The last time Sears’s sales increased from the previous year was in the third quarter of 2011, when the company had $9.4 billion in revenue, according to data from Thomson Reuters . In the latest quarter, total merchandise sales fell 34% to $2.2 billion. Total revenue, which includes money generated from appliance and product-repair services, fell 31% to $2.89 billion. Same-store sales at Sears locations fell 13.4%, while they declined 9.5% at Kmart locations. The company operated 894 total locations as of May 5, down from 1,275 as of around the same time the year prior. Sears reported a first-quarter net loss of $424 million, or $3.93 a share, compared with a profit of $245 million, or $2.29 a share, a year earlier. The prior-year quarter’s results got a $741 million lift from asset sales. In the latest period, Sears recorded a $165 million benefit. Mr. Lampert, who is also Sears’s biggest investor and among its biggest lenders, said in an April letter to the Sears board that his ESL Investments Inc., which owns a controlling stake in the retailer, is willing to submit offers for Kenmore, the Sears Home Improvement and Parts Direct businesses as well as some real estate, including $1.2 billion in debt secured by the properties
Investors, suppliers and landlords have grown increasingly concerned about the company’s future, forcing Sears to pay cash up front for many goods and ESL to regularly extend the company credit. Sears’ Canadian arm filed for protection from creditors last year and decided to liquidate. Sears spun off most of its stake in Sears Canada in recent years, but retained a 12% stake.
The company’s shares, which more than a decade ago traded above $100, now languish at around $3. Sears shares fell 3.4% premarket trading Thursday. Mr. Lampert’s interest in purchasing Kenmore and the other businesses extends a string of transactions in which he is often on both sides. In addition to serving as Sears’s chairman and CEO, he is also chairman of, and a major investor in, Seritage, which ranks among Sears’s biggest landlords.
On Tuesday, the White House announced it would have a final list of $50 billion in imports that would be subject to 25 percent tariffs by June 15, and two weeks later would announce investment restrictions on Chinese acquisitions of U.S. technology. In response, China is reportedly looking to line up countries against the U.S., the Journal reported. The countries in question are mostly in Europe and Asia, where companies could benefit from China’s plans to give foreign companies more open access to its markets. Tuesday’s announcement came just days after the two countries announced a tentative solution. U.S. Treasury Secretary Steven Mnuchin had said any trade war would be put on ice while negotiators worked out the details. As part of that deal, China would reduce its trade advantage by buying more U.S. goods such as agricultural and energy commodities. U.S. Commerce Secretary Wilbur Ross is set to arrive in Beijing Saturday but the surprise move from Washington could be an impediment to those talks, and is “casting doubt” over whether they can advance to the next level, the Journal reported.
WASHINGTON—U.S. economic growth during early 2018 was slightly softer than initially thought, though a measure of corporate profits partly rebounded in the first quarter after a weak end to 2017. Gross domestic product—the dollar value of all goods and services produced in the U.S., adjusted for inflation—rose at a 2.2% seasonally adjusted annual rate in the first quarter, the Commerce Department said Wednesday. That was down from last month’s initial estimate of 2.3% growth; economists surveyed by The Wall Street Journal had expected an unrevised 2.3% reading. Growth in business investment was revised higher for the first quarter, but offset by downward revisions in other major components including inventories. Compared with a year earlier, total output expanded 2.8% in the first quarter—the strongest annual growth reading in nearly three years. Economists think growth has picked up in the spring, and expect solid growth for 2018 as a whole. Forecasting firm Macroeconomic Advisers last week projected GDP would expand at a 2.9% annual pace in the second quarter, and the Federal Reserve Bank of Atlanta’s GDPNow model predicted 4.0% growth. Wednesday’s report included the government’s first official estimates for U.S. corporate profits in the early months of 2018, in the wake of significant tax-code changes enacted in December. After-tax corporate profits, without inventory valuation and capital consumption adjustments, rose a seasonally adjusted 7.8% in the first quarter after declining 9.6% in the fourth quarter. Compared with a year earlier, profits were little changed in the first quarter, up 0.1% on the year. “Although the economic environment is largely positive for demand, there are some supply-side headwinds to overcome,” Chief Financial Officer Rajesh Kalathur told analysts earlier this month. “Material and freight costs have exceeded our forecast for the year, due largely to inflation in U.S. steel prices and a tight market for logistics providers.” Wednesday’s report showed personal-consumption expenditures climbed at a 1.0% annual pace in the first three months of the year, down slightly from an initially estimated 1.1%. It was the weakest quarter for consumer spending in nearly five years. The housing sector was a headwind for overall growth in the first quarter, with residential fixed investment declining at a revised annual rate of 2.0%. Government spending rose at a 1.1% annual pace last quarter, led by growth in federal-government expenditures on the military and domestic programs. Net exports contributed 0.08 percentage point to the overall GDP growth rate in the first quarter. Change in private inventories contributed 0.13 percentage point. Both categories tend to be volatile from quarter to quarter, and were revised down from last month’s early estimates.
NEW YORK (FOX5NY) – The one-armed burger-flipping robot sensation that got laid off because it couldn’t handle the work is back on the job. Flippy, the somewhat creepy-looking but fascinating piece of one-armed technology at Caliburger in Pasadena, California, has its job back flipping burgers at the grill station. Flippy debuted in March to a media sensation, with many wondering if it was the cook of the future.
It turns about 300 burgers a day, seven days a week. Flippy came into the job when short-order cooks were leaving the kitchen due to the high hea.t but the owners say it isn’t actually replacing humans and on one at Caliburger has lost their job. Flippy still requires human interaction to work properly but its creators say it can learn from its surroundings and acquire new skills over time..
When you read the budget message President Donald Trump sent Congress earlier this year, you soon come across a concession that Washington insiders have been making for years — just before they vote for bills they know will massively increase the federal debt.
“The current fiscal path is unsustainable,” Trump said, “and future generations deserve better.”
Trump then asked Congress for a budget that his own Office of Management and Budget estimates will cause the federal government to run a $984 billion deficit in fiscal 2019. Back in 2009, just before his first inauguration, President Barack Obama — no fiscal conservative — complained that the “deficit levels that (he was) inheriting” were “unsustainable.” “At a certain point, other countries stop buying our debt,” Obama told CNN in an interview broadcast on Jan. 18, 2009. “At a certain point, we’d end up having to raise interest rates, and it would end up creating more economic chaos and, potentially, inflation. So, what we need to do is say that, instead of just printing more money, let’s look at medium term and long term. Let’s get a handle on Social Security. Let’s get a handle on Medicare. Let’s eliminate waste in government, where it exists.” In Trump’s budget proposal, as published by OMB, the $984 billion deficit for next year leads to a $987 billion deficit for fiscal 2020 and a $916 billion deficit for fiscal 2021.
In other words, as the Trump White House envisions it, Trump will run annual deficits of more than $900 billion for the rest of the term he was elected to in 2016. He will do this even though he believes our “current fiscal path is unsustainable.”
bankruptcy.”We have a fiscal crisis,” Ryan said then. “If government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century.” The question for Ryan and his colleagues in the House and Senate now is: Will a Republican-majority House, working with a Republican-majority Senate and a Republican president, fail to put the federal government on a path toward a balanced budget?
(Bloomberg) — A staggering number of American homeowners remain under water on their mortgages a decade after the housing bubble burst. Almost 4.5 million households — or 9.1 percent — owed more than their homes are worth in the fourth quarter of 2017, according to data firm Zillow, with an estimated 713,000 owing at least twice as much as their property’s value. While the percentage is declining, families in communities with stagnant property values are “trapped in their homes with no easy options to regain equity other than waiting,” said Aaron Terrazas, a senior economist at Zillow. That in turn could weigh on local economic growth. Virginia Beach, Virginia; Baltimore and Chicago are the hardest hit metropolitan areas, based on effective negative interest rates. Effective negative equity measures the lack of sufficient home equity to pay for the associated costs of selling homes and buying new properties.
|Neg. Equity||Rate||200% Underwater||Effective Rate|
|Virginia Beach, VA||49,944||16.7%||17.4%||44.5%|
|St. Louis, MO||63,477||12.0%||16.5%||30.9%|
|Las Vegas, NV||29,385||9.9%||14.7%||27.5%|
|Minneapolis-St Paul, MN||38,535||6.4%||12.0%||26.7%|
|New York, NY||195,314||8.9%||11.0%||21.4%|
|Kansas City, MO||21,902||6.0%||15.6%||21.1%|
|Miami-Fort Lauderdale, FL||72,704||8.7%||16.3%||20.4%|
|San Diego, CA||23,290||5.3%||8.2%||17.4%|
|Los Angeles-Long Beach-Anaheim, CA||74,326||4.7%||8.7%||12.2%|
|San Francisco, CA||20,179||3.1%||7.2%||8.0%|
|San Jose, CA||5,168||1.9%||4.5%||4.8%|
Eurozone’s long simmering financial crisis is now a political crisis
Fears over Italy returned with a vengeance Tuesday, perhaps surprising U.S. investors returning from a three-day Memorial Day weekend as headlines out of Rome sent shock waves through global markets and contributed to a selloff for Wall Street stocks. Market participants don’t need a long memory to recall the worst days of the eurozone debt crisis in 2011 and 2012, when fears centered on Italy’s massive debt pile, teetering European banks and sluggish growth took center stage. Those worries were effectively pushed into the background in 2012 by the European Central Bank, but they weren’t resolved. And now, they’re back, with a political twist. “The pendulum of sentiment has swung from extreme complacency to hints of the paranoia that we saw back in 2011-2012. In the space of roughly under a week the view of the eurozone has changed dramatically,” said Nicholas Spiro, partner at London-based Lauressa Advisors, in a phone interview. Ground zero was in the Italian bond market, with the 2-year yield soaring 157 basis points, or 1.57 percentage points, to 2.41%, while the 10-year yield jumped 41 basis points to 3.095%. Investors fear that election could see the anti-establishment parties, which had backed away from outright euroskeptic rhetoric in the run-up to the March vote, adopt more strident positions, potentially turning the vote into a de facto referendum on the country’s euro membership. While the region’s debt crisis, which began in 2010, spread from Greece to other countries, Italy, with the world’s fourth-largest government bond market and the eurozone’s third-largest economy, was long viewed by market participants as too big to rescue. An Italian implosion was, therefore, viewed as an existential threat to the euro in a way that Greece and other, smaller financially stressed eurozone countries were not.
European Central Bank President Mario Draghi was credited with stemming the crisis in July 2012, when he declared the institution would do “whatever it takes” to preserve the euro. This was followed by the formulation of the Outright Monetary Transactions, or OMT, program, which would allow the ECB to buy a country’s bonds in the secondary market to reduce borrowing costs.
It worked. Without the ECB actually tapping the program, Italian borrowing came down from unsustainable levels, with the 2-year yield retreating from a level above 7.5%. Later, the ECB’s separate eurozone bond-buying program, the centerpiece of its quantitative easing strategy, pulled yields across the eurozone sharply lower. European authorities have taken steps to create a more unified currency bloc, including more uniform supervision of banks and tighter fiscal rules. But the measures are seen as falling well short of what’s needed to fix the inherent flaws of the euro, which has no shared fiscal authority. While 5 Star Movement and the League played down previous euroskeptic rhetoric, they railed against the European Union’s fiscal rules and had appeared headed for a confrontation with Brussels over their own spending plans, which had helped to trigger the initial selloff in Italian debt.
WASHINGTON (Reuters) – President Donald Trump is running out of time to deliver a revamp of the North American Free Trade Agreement (NAFTA) he promised for this year and people involved in the talks say the crunch is largely of his administration’s own making. Negotiators, industry lobbyists, trade experts and lawmakers briefed on the talks described how precious months passed before the U.S team presented its proposals and how the talks stalled because the demands far exceeded what Canada and Mexico had expected and Washington signaled no readiness to compromise. In the end, an unusually tight timetable allowed little space to bridge differences on the core issues, such as U.S. and regional content requirements for the auto industry. Talks started last August with a goal to conclude in just four months, but as a May 17 notification deadline to allow the current Republican-led U.S. Congress to approve a new agreement before year end passed, U.S. Trade Representative Robert Lighthizer warned a deal was “nowhere near close.” Up until a few weeks ago, Lighthizer thought Mexico faced the biggest time pressure to wrap up the talks before its July 1 presidential elections, a Mexican source close to the talks told Reuters. The Trump administration’s negotiating goals submitted to Congress in July 2017 talked of shrinking trade deficits with Mexico and Canada and boosting U.S. auto production. U.S. chief negotiator John Melle privately complained to U.S. colleagues that Ottawa was deliberately wasting time on less essential matters, such as proposed new chapters on women’s and indigenous people’s rights, a U.S. source close to the talks said. Canadian officials deny trying to drag out negotiations. Speaking at a business event early this year, Canada’s veteran chief negotiator, Steve Verheul, described the talks as the “most unusual negotiation” he had ever been involved in, because of Washington’s winner-takes-all approach. “They are looking to strengthen the U.S. and by doing that weaken Canada and Mexico.”
Oil prices were mixed in Asian trading on Tuesday, but remained under pressure from expectations that Saudi Arabia and Russia would pump more crude to ease a potential shortfall in supply. “Investors have started pricing in the likelihood of Saudi Arabia and Russia increasing crude oil production,” ANZ Bank said in a note. “However, doubt remains, with any agreement to be finalized at the June OPEC meeting.” Concerns that Saudi Arabia and Russia could boost output have put downward pressures on oil prices, along with rising oil production in the United States. Saudi Arabia and Russia have discussed raising OPEC and non-OPEC oil production by some 1 million barrels per day to make up potential supply shortfalls from Venezuela and Iran. The Organization of the Petroleum Exporting Countries (OPEC) is due to meet in Vienna on June 22. “The way I see it is that WTI prices are stabilizing rather than falling after rising sharply in recent weeks because the prices were expected to be in the range of $55-$65 a barrel,” said Vincent Hwang, commodity analyst at NH Investment & Securities in Seoul. “But at the same time there are some worries over a fall in U.S. oil demand if more Middle East crude supplies flow into the market,” Hwang said.
Meanwhile, record crude oil volumes from the United States are expected to head to Asia in coming months, nibbling away the market share of OPEC and Russia.
U.S. oil production has surged by more than 27 percent in the last two years to 10.73 million barrels per day (bpd). That puts the United States ahead of top exporter Saudi Arabia, and only Russia pumps out more, at around 11 million bpd.
A surging dollar and a capital flight from emerging markets may lead to another “major” financial crisis, investor George Soros said, warning the European Union that it’s facing an imminent existential threat. The “termination” of the nuclear deal with Iran and the “destruction” of the transatlantic alliance between the EU and the U.S. are “bound to have a negative effect on the European economy and cause other dislocations,” including a devaluing of emerging-market currencies, Soros said in a speech in Paris on Tuesday. “We may be heading for another major financial crisis.”
The stark warning from the billionaire money manager comes as Italian bond yields have jumped to multi-year highs and major emerging economies including Turkey and Argentina are struggling to contain the fallout from runaway inflation.
Soros, who has been the object of ire by the government of his native Hungary, saved his gloomiest outlook for the EU. “Everything that could go wrong has gone wrong,” he said, citing the refugee crisis and austerity policies that catapulted populists into power, as well as “territorial disintegration” exemplified by Brexit. “It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality,” he said.Soros’s proposed remedy for some of the ills facing Europe is an EU-funded Marshall Plan for Africa, worth about 30 billion euros ($35 billion) a year, which would ease migratory pressures to the continent. He also proposed a radical transformation of the EU, including the abandonment of the clause forcing its member states to join the single currency. “The euro has many unresolved problems and they must not be allowed to destroy the European Union,” he said.
Italian bonds have witnessed one of their worst trading weeks since the euro zone sovereign debt crisis, with many traders getting a stark reminder of the volatility that once characterized markets in the region. On Friday, two-year Italian bond yields rose 35 basis points in one day — almost equivalent to the entire range of the year for U.S. 10-year Treasurys. This was the weakest session in five years and continued a month that’s seen these yields rise 70 basis points in total. Yields move inversely to a bond’s price and a spike higher is seen as investors feeling more concerned about lending to Italy’s government. More specifically, traders usually sell short-maturity paper when there are growing credit risk concerns at a sovereign level. The original catalyst for the selling came from the populist parties hoping to take control of Italy after inconclusive elections in March. Lega and the Five Star Movement (M5S) plan to issue short-term bills to finance state activity in their economic policy proposals. Market participants were taken aback and many have interpreted that initiative as laying the foundation for a potential parallel currency in the future, further amplifying the potential new government’s collision course with the rest of Europe. Italy’s Lega could gain more power in fresh elections, analyst says. But the fear has not been limited to short-dated paper. Ten-year Italian bonds have also came under pressure with yields topping 2.5 percent and are now trading at their widest gap with German paper in over four years. There is palpable anxiety in the market as Italy’s political future remains uncertain. Over the weekend, M5S and Lega looked to have failed in their bid to form a government after President Sergio Mattarella rejected their pick for economy minister due to his euroskeptic credentials. This has raised the prospect of a caretaker government to lead the country into yet another round of elections later this year. In Monday’s trading session, and with liquidity in markets thin due to the U.S. Memorial Day, Italian two-year yields briefly snapped back 15 basis points tighter before paring all the gains of the day. Traders have pointed to short covering in the market. However, the relief rally may be short lived. One head of trading at a large fund manager, who preferred to remain anonymous due to the sensitive nature of the situation, told CNBC that a “big unwinding” is beginning for Italian bonds and Monday’s pullback would not last long. Ratings agencies are also beginning to raise alarm bells. On Friday, Moody’s hinted that it may look to review Italy’s debt rating, citing concerns over the two anti-establishment parties’ fiscal plans that could ratchet up spending by as much as 100 billion euros ($117 billion), according to some analysts.Conflict between Italy’s parliament and government will be intense.
With outstanding debt of more than 2.3 trillion euros and one of the highest levels of debt-to-gross domestic product in the advanced world, Italy’s public finances will come under scrutiny again if spending ramps up.
On Monday, Matteo Salvini, the leader of the right-wing Lega party, further added to market concerns saying that there is no point staying in the EU if the rules don’t change. This has prompted some analysts to believe that if there is another election on the horizon, one that would effectively be a referendum on the euro.
According to Goldman Sachs analysis, the European Central Bank owns around 20 percent of outstanding Italian bonds due to years of quantitative easing, but foreign investors also own about 37 percent.
SHANGHAI (AP) — Ivanka Trump’s brand continues to win foreign trademarks in China and the Philippines, adding to questions about conflicts of interest at the White House, The Associated Press has found. On Sunday, China granted the first daughter’s company final approval for its 13th trademark in the last three months, trademark office records show. Over the same period, the Chinese government has granted Ivanka Trump’s company provisional approval for another eight trademarks, which can be finalized if no objections are raised during a three-month comment period. Taken together, the trademarks could allow her brand to market a lifetime’s worth of products in China, from baby blankets to coffins, and a host of things in between, including perfume, make-up, bowls, mirrors, furniture, books, coffee, chocolate and honey. Ivanka Trump stepped back from management of her brand and placed its assets in a family-run trust, but she continues to profit from the business.
“Ivanka Trump’s refusal to divest from her business is especially troubling as the Ivanka brand continues to expand its business in foreign countries,” Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington, said in an email Monday. “It raises significant questions about corruption, as it invites the possibility that she could be benefiting financially from her position and her father’s presidency or that she could be influenced in her policy work by countries’ treatment of her business.”
As Ivanka Trump and her father have built their global brands, largely through licensing deals, they have pursued trademarks in dozens of countries. Those global trademarks have drawn the attention of ethics lawyers because they are granted by foreign governments and can confer enormous value. Concerns about political influence have been especially sharp in China, where the courts and bureaucracy are designed to reflect the will of the ruling Communist Party. Chinese officials have emphasized that all trademark applications are handled in accordance with the law. More approvals are likely to come. Online records from China’s trademark office indicate that Ivanka Trump’s company last applied for trademarks — 17 of them — on March 28, 2017, the day before she took on a formal role at the White House. Those records on Monday showed at least 25 Ivanka Trump trademarks pending review, 36 active marks and eight with provisional approval. The World Intellectual Property Organization’s global brand database also shows that her company, Ivanka Trump Marks LLC, won three trademarks in the Philippines after her father took office. Two of them that cover clothing, including lingerie and baby clothes, were filed on Feb. 8, 2017 and registered in June and November. The third, filed on March 1, 2017, covers clothing and footwear and was registered in July. Companies register for trademarks for a variety of reasons. They can be a sign of corporate ambition, but in many countries, like China, where trademark squatting is rampant, companies also file defensively, to block copycats from grabbing legal rights to a brand’s name. Trademarks are classified by category and may include items that a company does not intend to market. Some trademark lawyers also advise clients to register trademarks for merchandise that is manufactured in China, even if it’s not sold there. Ivanka Trump does not have a large retail presence in China, but customs records show that the bulk of her company’s U.S. imports are shipped from China. The brand’s secretive Chinese supply chains have been the subject of some controversy. A year ago Monday, three men working for China Labor Watch, a New York-based non-profit group, were arrested while investigating labor abuses at Ivanka Trump suppliers in China. After thirty days in detention, they were released on bail, but continue to live under police surveillance. Li Qiang, the group’s founder, said Monday that he hopes bail will be lifted soon and that the case will not go to trial. Police in Ganzhou, the southeastern Chinese city where the men were detained, could not be reached for comment. The Chinese law firm that handles Ivanka Trump’s intellectual property in China also did not immediately respond to requests for comment.
Italian bonds have witnessed one of their worst trading weeks since the euro zone sovereign debt crisis, with many traders getting a stark reminder of the volatility that once characterized markets in the region. On Friday, two-year Italian bond yields rose 35 basis points in one day — almost equivalent to the entire range of the year for U.S. 10-year Treasurys. This was the weakest session in five years and continued a month that’s seen these yields rise 70 basis points in total. Yields move inversely to a bond’s price and a spike higher is seen as investors feeling more concerned about lending to Italy’s government. More specifically, traders usually sell short-maturity paper when there are growing credit risk concerns at a sovereign level. The original catalyst for the selling came from the populist parties hoping to take control of Italy after inconclusive elections in March. Lega and the Five Star Movement (M5S) plan to issue short-term bills to finance state activity in their economic policy proposals. Market participants were taken aback and many have interpreted that initiative as laying the foundation for a potential parallel currency in the future, further amplifying the potential new government’s collision course with the rest of Europe. But the fear has not been limited to short-dated paper. Ten-year Italian bonds have also came under pressure with yields topping 2.5 percent and are now trading at their widest gap with German paper in over four years. There is palpable anxiety in the market as Italy’s political future remains uncertain. Over the weekend, M5S and Lega looked to have failed in their bid to form a government after President Sergio Mattarella rejected their pick for economy minister due to his euroskeptic credentials. This has raised the prospect of a caretaker government to lead the country into yet another round of elections later this year. Ratings agencies are also beginning to raise alarm bells. On Friday, Moody’s hinted that it may look to review Italy’s debt rating, citing concerns over the two anti-establishment parties’ fiscal plans that could ratchet up spending by as much as 100 billion euros ($117 billion), according to some analysts. With outstanding debt of more than 2.3 trillion euros and one of the highest levels of debt-to-gross domestic product in the advanced world, Italy’s public finances will come under scrutiny again if spending ramps up. Gene Frieda, a global strategist at Pimco, told CNBC via email that the immediate concern for investors is that another round of elections and the prospect of a right-wing anti-European populist government undermines the economic recovery in Italy.
“(It) threatens further rating downgrades. In that context, even after the recent sell-off, BTPs (Italian bonds) do not look particularly cheap,” he said. According to Goldman Sachs analysis, the European Central Bank owns around 20 percent of outstanding Italian bonds due to years of quantitative easing, but foreign investors also own about 37 percent. The question is then, will investors still want to own that risk into what could be a binary event?
SINGAPORE (Reuters) – Record crude oil volumes exported from the United States will be heading to Asia in the next couple of months to take another piece of the market away from Russia and producers in the Organization of the Petroleum Exporting Countries (OPEC). The United States is set to export 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia, estimated a senior executive with a key U.S. oil exporters. Data from the Energy Information Administration shows U.S. oil exports peaked at 2.6 million bpd two weeks ago. [EIA/S] The record outbound volumes come as U.S. crude production hit all-time highs, depressing U.S. prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets. WTCLc1-LCOc1 The difference in the key benchmarks was a chance for Asian refiners to reduce light crude imports from the Middle East and Russia after Brent and Gulf prices touched multi-year highs, traders in Asia said. “We’re diversifying a lot to other regions. If Saudi Aramco still doesn’t reduce prices next month and ADNOC (Abu Dhabi National Oil Company) follows, we will increase our U.S. crude purchases,” a Southeast Asian oil buyer said. In Asia, China – led by Sinopec (600028.SS), the region’s largest refiner – is the biggest lifter of U.S. crude. The company, after cutting Saudi imports, has bought a record 16 million barrels (533,000 bpd) of U.S. crude, to load in June, two sources with knowledge of the matter said. India and South Korea are the next biggest buyers in Asia, each lifting 6 million to 7 million barrels in June, sources tracking U.S. crude sales to Asia said. Indian Oil Corp (IOC.NS) bought 3 million barrels earlier this month via a tender, while Reliance Industries (RELI.NS) purchased up to 8 million barrels, the sources said, although it wasn’t clear if Reliance’s cargoes would all load in June. South Korea’s purchases are driven by its top refiners SK Energy [SKENGG.UL] and GS Caltex [GSCAL.UL]. Taiwanese state refiner CPC Corp [CHIP.UL] has also snapped up 7 million barrels to be lifted in June and July. U.S. exports to Thailand will increase to at least 2 million barrels. State oil company PTT PCL (PTT.BK) is 1 million barrels of WTI Midland, while Thai Oil (TOP.BK) and Esso Thailand (ESSO.BK) bought at least 500,000 barrels of Bakken crude each, said traders with knowledge of the country’s crude deals. Reliance declined to comment. PTT, Thai Oil and Esso Thailand all did not respond to requests for comment. But even if Asia and Europe are keen to take more U.S. crude, the record volumes are straining export infrastructure in the United States, limiting its ability to pump and ship more oil. “Tight (shale) oil’s been eating OPEC’s lunch for the last few years. The lack of infrastructure will temporarily cede market share back to OPEC,” R.T. Dukes, head of U.S. Lower 48 oil supply at Wood Mackenzie said in a note last week. Reporting by Florence Tan; Additional reporting by Jessica Jaganathan in SINGAPORE, Promit Mukherjee in MUMBAI and Chayut Setboonsarng in THAILAND; Editing by Tom Hogue
WASHINGTON (Reuters) – Republican U.S. Senator Jeff Flake, who has not ruled out running against Donald Trump for the White House, on Sunday criticized as a “diversion tactic” the president’s unsubstantiated allegation last week of an FBI “spy” being planted in his election campaign. Flake’s comments, on NBC’s “Meet the Press,” put him again at the forefront of very few Republican lawmakers willing to openly challenge Trump over his attacks on law enforcement officials who are investigating Russian meddling in the 2016 U.S. election and possible collusion by the Trump campaign. The investigation was begun by the FBI in July 2016, but handed over by the Justice Department to Special Counsel Robert Mueller in May 2017 after Trump fired FBI Director James Comey. Flake said Trump’s unfounded allegations about FBI spying on his campaign, which the president has called “Spygate,” came amid escalating, behind-the-scenes concern in the U.S. Senate that the president may try to stop the probe by firing Mueller or the person who appointed him, Deputy Attorney General Rod Rosenstein.
“The president had this diversion tactic, obviously, with so-called Spygate,” Flake said of Trump’s assertions last week. “There is concern that the president is laying the groundwork to move on Bob Mueller or Rosenstein. If that were to happen, obviously, that would cause a constitutional crisis.”
Some senior Republicans, including Flake, have sounded similar warnings in recent weeks as the Mueller investigation has plowed forward, drawing frequent denunciations from Trump. Mueller is also investigating any possible obstruction of justice by Trump. Trump and the White House have repeatedly denied any collusion by the campaign, or any other wrongdoing. After Trump demanded an inquiry into his “spy” claim, the current FBI Director Christopher Wray and Rosenstein, who oversees Mueller’s probe, held two classified briefings on Thursday for senior lawmakers of both parties on the matter. “What I have seen so far is an FBI effort to learn more about individuals with a history of bragging about links to Russia that pre-exist the campaign. If those people were operating near my office or my campaign, I’d want them investigated,” said Rubio, who ran unsuccessfully against Trump in the 2016 Republican presidential primary campaign. U.S. intelligence agencies concluded in January 2017 that Russian President Vladimir Putin ordered an effort to meddle in the U.S. election campaign, included seeking to help Trump win. Moscow has denied the charge.
A potential bill to prohibit ZTE Corp. and other Chinese telecommunications companies from operating in the U.S. would have supermajority support in Congress, Republican Senator Marco Rubio said. “Most members of Congress have come to understand the threat China poses,” Rubio said on CBS’s “Face the Nation” on Sunday when asked whether President Donald Trump would sign such a measure. “There’s a growing commitment in Congress to do something about what China is trying to do to the United States. And this is a good place to start.” Rubio was responding to Trump’s proposal to allow the telecom firm to remain in business after paying a $1.3 billion fine, changing its management and board, and providing “high-level security guarantees.” The president has suggested the deal is a favor to Chinese President Xi Jinping as the two nations hold talks to prevent a trade war. The Florida senator, who criticized the deal in a May 25 tweet and appeared on two Sunday political shows, said he expects Congress would pursue a measure to block ZTE and companies such as Huawei Technologies Co. Ltd. from operating in the U.S. He said their equipment could be used to help China spy on the U.S. and steal corporate secrets. “None of these companies should be operating in this country,” Rubio said. “None of them. They are used for espionage.” Rubio said he spoke with Trump on Friday night, and thinks that while the administration wants to punish ZTE for breaking U.S. sanctions on Iran and North Korea, he sees a broader effort to stop the Chinese from stealing intellectual property and forcing U.S. companies to transfer their technology to do business in China.
“Putting it out of business, a company like ZTE, is the kind of significant consequence that China would respond to, to understand that we’re serious,” Rubio said on ABC’s “This Week.”
The Senate on May 24 released a defense policy bill containing a provision requiring Trump, before making any ZTE deal, to certify with Congress that the company hasn’t violated U.S. law for the past year and is cooperating with U.S. investigations.
“If President Trump won’t put our security before Chinese jobs, Congress will act on a bipartisan basis to stop him,” said Maryland Democratic Senator Chris Van Hollen, author of the Senate provision.
The measure also would apply to several other Chinese companies, including Hytera Communications Corp., Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co.