Ecuador Will Imminently Withdraw Asylum for Julian Assange and Hand Him Over to the UK. What Comes Next?

WikiLeaks founder Julian Assange addresses the media holding a printed report of the judgement of the UN's Working Group on Arbitrary Detention on his case from the balcony of the Ecuadorian embassy in central London on February 5, 2016.During a press conference on February 5 Julian Assange, speaking via video-link, called for Britain and Sweden to "implement" a UN panel finding saying that he should be able to walk free from Ecuador's embassy, where he has lived in self-imposed confinement since 2012. / AFP / NIKLAS HALLE'N (Photo credit should read NIKLAS HALLE'N/AFP/Getty Images)
Photo: Niklas Halle’n/AFP/Getty Images

Ecuador’s President Lenin Moreno traveled to London on Friday for the ostensible purpose of speaking at the 2018 Global Disabilities Summit (Moreno has been confined to a wheelchair since being shot in a 1998 robbery attempt). The concealed, actual purpose of the President’s trip is to meet with British officials to finalize an agreement under which Ecuador will withdraw its asylum protection of Julian Assange, in place since 2012, eject him from the Ecuadorian Embassy in London, and then hand over the WikiLeaks founder to British authorities. Moreno’s itinerary also notably includes a trip to Madrid, where he will meet with Spanish officials still seething over Assange’s denunciation of human rights abuses perpetrated by Spain’s central government against protesters marching for Catalonia independence. Almost three months ago, Ecuador blocked Assange from accessing the internet, and Assange has not been able to communicate with the outside world ever since. The primary factor in Ecuador’s decision to silence him was Spanish anger over Assange’s tweets about Catalonia.

Presidential decree signed on July 17 by Ecuadorian President Lenin Moreno, outlining his trip to London and Madrid A source close to the Ecuadorian Foreign Ministry and the President’s office, unauthorized to speak publicly, has confirmed to the Intercept that Moreno is close to finalizing, if he has not already finalized, an agreement to hand over Assange to the UK within the next several weeks. The withdrawal of asylum and physical ejection of Assange could come as early as this week. On Friday, RT reported that Ecuador was preparing to enter into such an agreement. The consequences of such an agreement depend in part on the concessions Ecuador extracts in exchange for withdrawing Assange’s asylum. But as former Ecuadorian President Rafael Correa told the Intercept in an interview in May, Moreno’s government has returned Ecuador to a highly “subservient” and “submissive” posture toward western governments.

It is thus highly unlikely that Moreno – who has shown himself willing to submit to threats and coercion from the UK, Spain and the U.S. – will obtain a guarantee that the U.K. not extradite Assange to the U.S., where top Trump officials have vowed to prosecute Assange and destroy WikiLeaks.

The central oddity of Assange’s case – that he has been effectively imprisoned for eight years despite never having been charged with, let alone convicted of, any crime – is virtually certain to be prolonged once Ecuador hands him over to the U.K. Even under the best-case scenario, it appears highly likely that Assange will continue to be imprisoned by British authorities.

The only known criminal proceeding Assange currently faces is a pending 2012 arrest warrant for “failure to surrender” – basically a minor bail violation charge that arose when he obtained asylum from Ecuador rather than complying with bail conditions by returning to court for a hearing on his attempt to resist extradition to Sweden. That charge carries a prison term of three months and a fine, though it is possible that the time Assange has already spent in prison in the UK could be counted against that sentence. In 2010, Assange was imprisoned in Wandsworth Prison, kept in isolation, for 10 days until he was released on bail; he was then under house arrest for 550 days at the home of a supporter. Assange’s lawyer, Jen Robinson, told the Intercept that he would argue that all of that prison time already served should count toward (and thus completely fulfill) any prison term imposed on the “failure to surrender” charge, though British prosecutors would almost certainly contest that claim. Assange would also argue that he had a reasonable, valid basis for seeking asylum rather than submitting to UK authorities: namely, well-grounded fear that he would be extradited to the U.S. for prosecution for the act of publishing documents. The Obama administration was eager to prosecute Assange and WikiLeaks for publishing hundreds of thousands of classified documents, but ultimately concluded that there was no way to do so without either also prosecuting newspapers such as the New York Times and the Guardian which published the same documents, or create precedents that would enable the criminal prosecution of media outlets in the future. Indeed, it is technically a crime under U.S. law for anyone – including a media outlet – to publish certain types of classified information. Under U.S. law, for instance, it was a felony for the Washington Post’s David Ignatius to report on the contents of telephone calls, intercepted by the NSA, between then National Security Adviser nominee Michael Flynn and Russian Ambassador Sergey Kislyak, even though such reporting was clearly in the public interest since it proved Flynn lied when he denied such contacts.

That the Washington Post and Ignatius – and not merely their sources – violated U.S. criminal law by revealing the contents of intercepted communications with a Russian official is made clear by the text of 18 § 798 of the U.S. Code, which provides (emphasis added):

Whoever knowingly and willfully communicates … or otherwise makes available to an unauthorized person, or publishes … any classified information … obtained by the processes of communication intelligence from the communications of any foreign government … shall be fined under this title or imprisoned not more than ten years, or both.”

But the U.S. Justice Department has never wanted to indict and prosecute anyone for the crime of publishing such material, contenting themselves instead to prosecuting the government sources who leak it. Their reluctance has been due to two reasons: first, media outlets would argue that any attempts to criminalize the mere publication of classified or stolen documents is barred by the press freedom guarantee of the First Amendment, a proposition the DOJ has never wanted to test; second, no DOJ has wanted as part of its legacy the creation of a precedent that allows the U.S. Government to criminally prosecute journalists and media outlets for reporting classified documents.

But the Trump administration has made clear that they have no such concerns. Quite the contrary: last April, Trump’s then-CIA Director Mike Pompeo, now his Secretary of State, delivered a deranged, rambling, highly threatening broadside against WikiLeaks. Without citing any evidence, Pompeo decreed that WikiLeaks is “a non-state hostile intelligence service often abetted by state actors like Russia,” and thus declared: “we have to recognize that we can no longer allow Assange and his colleagues the latitude to use free speech values against us.” The long-time right-wing Congressman, now one of Trump’s most loyal and favored cabinet officials, also explicitly rejected any First Amendment concerns about prosecuting Assange, arguing that while WikiLeaks “pretended that America’s First Amendment freedoms shield them from justice . . . they may have believed that, but they are wrong.” Pompeo then issued this bold threat: “To give them the space to crush us with misappropriated secrets is a perversion of what our great Constitution stands for. It ends now.” Trump’s Attorney General Jeff Sessions has similarly vowed not only to continue and expand the Obama DOJ’s crackdown on sources, but also to consider the prosecution of media outlets that publish classified information.

 

It would be incredibly shrewd for Sessions to lay the foundation for doing so by prosecuting Assange first, safe in the knowledge that journalists themselves – consumed with hatred for Assange due to personal reasons, professional jealousies, and anger over the role they believed he played in 2016 in helping Hillary Clinton lose – would unite behind the Trump DOJ and in support of its efforts to imprison Assange. During the Obama years, it was a mainstream view among media outlets that prosecuting Assange would be a serious danger to press freedoms. Even the Washington Post Editorial Page, which vehemently condemned WikiLeaks, warned in 2010 that any such prosecution would “criminalize the exchange of information and put at risk” all media outlets. When Pompeo and Sessions last year issued their threats to prosecute Assange, former Obama DOJ spokesperson Matthew Miller insisted that no such prosecution could ever succeed:

IMF warns G20 that tariffs hurting economy as Trump threatens more

International Monetary Fund (IMF) Managing Director Christine Lagarde and Argentina’s Treasury Minister Nicolas Dujovne attend a news conference in Buenos Aires, Argentina, July 21, 2018. REUTERS/Martin Acosta

BUENOS AIRES (Reuters) – The International Monetary Fund (IMF) warned world economic leaders on Saturday that a recent wave of trade tariffs would significantly harm global growth, a day after U.S. President Donald Trump threatened a major escalation in a dispute with China. IMF Managing Director Christine Lagarde said she would present the G20 finance ministers and central bank governors meeting in Buenos Aires with a report detailing the impacts of the restrictions already announced on global trade. “It certainly indicates the impact that it could have on GDP (gross domestic product), which in the worst case scenario under current measures … is in the range of 0.5 pct of GDP on a global basis,” Lagarde said at a joint news conference with Argentine Treasury Minister Nicolas Dujovne. In the briefing note prepared for G20 ministers, the IMF said global growth may peak at 3.9 percent in 2018 and 2019, while downside risks have increased due to the growing trade conflict. Her warning came shortly after the top U.S. economic official, Treasury Secretary Steven Mnuchin, told reporters in the Argentine capital there was no “macroeconomic” effect yet on the world’s largest economy. Long-simmering trade tensions have burst into the open in recent months, with the United States and China – the world’s No. 2 economy – slapping tariffs on $34 billion worth of each other’s goods so far. The weekend meeting in Buenos Aires comes amid a dramatic escalation in rhetoric on both sides. Trump on Friday threatened tariffs on all $500 billion of Chinese exports to the United States. Mnuchin will try to rally G7 allies over the weekend to join the United States in more aggressive action against China, but they may be reluctant to cooperate because of U.S. tariffs on steel and aluminium imports from the European Union and Canada, which prompted retaliatory measures.. The last G20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy except for a commitment to “further dialogue.” German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low. “I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires. The U.S. tariffs will cost Germany up to 20 billion euros ($23.44 billion) in income this year, according to the head of German think-tank IMK. Bank of Japan Governor Haruhiko Kuroda said he hoped the debate at the G20 gathering would lead to an easing of retaliatory trade measures. “Trade protectionism benefits no one involved,” he said. “I think restraint will eventually take hold.” Mnuchin told reporters on Saturday that he has not seen a macroeconomic impact from the U.S. tariffs on steel, aluminium and Chinese goods, along with retaliation from trading partners. But he said there have been microeconomic effects on individual businesses, he said, adding that the administration was closely monitoring these and looking at ways to help U.S. farmers hurt by retaliatory tariffs. The U.S. dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate rises, halting a rally that had driven the dollar to its highest level in a year.

Elon Musk’s bizarre tweets are raising red flags on Wall Street

Wall Street analysts, regulators and the media have all been recent victims of the eccentric billionaire. But his calling a member of the team rescuing the Thai soccer kids a “pedo” did more than raise eyebrows. The July 15 tweet prompted an open letter from Loup Ventures’ Gene Munster, who described Musk’s behavior as “fueling an unhelpful perception of your leadership — thin-skinned and short-tempered.” The Munster letter on July 17 wasn’t the only red flag raised about Musk. That, we look back in time, goes to: Musk got around to apologizing to the “pedo guy” on Wednesday, acknowledging the rescuer’s criticism of the mini-submarine Musk sent to assist in the soccer team’s rescue does “not justify my actions against him.”
Musk’s sincerity was suspect, however, as the “pedo guy” had already threatened to sue. On July 5, he tweeted, “@lopezlinette has published several false articles about Tesla, including a doozy where she claimed Tesla scrapped more batteries than our total S,X &3 production number, which is physically impossible.” He also accused the Business Insider writer of being motivated by short-seller Jim Chanos, whom Musk called “Tesla’s most prominent short-seller.” “Her articles print Chanos’ view verbatim,” he added. “This is not journalism.” Musk doesn’t limit his wrath to individual journalists, which is why on May 23 he said he’d take on the entire industry by developing a fake news/honest journalism scorecard. “Going to create a site where the public can rate the core truth of any article & track the credibility score over time of each journalist, editor & publication,” he tweeted. “Thinking of calling it Pravda…” “The holier-than-thou hypocrisy of big media companies who lay claim to the truth, but publish only enough to sugarcoat the lie, is why the public no longer respects them,” he continued. Many believe the cloud over Musk’s head took shape during a May 2 analyst earnings call. “Boring, bonehead questions are not cool,” he said in response to a question about Tesla’s projected capital expenditures. “These questions are so dry. They’re killing me.”

Mnuchin Says He ‘Wouldn’t Minimize’ Chance of Tariffs on All Chinese Imports

Treasury secretary, attending a meeting among G-20 finance ministers and central bankers in Latin America, also played down Trump remarks on currency markets

BUENOS AIRES—U.S. Treasury Secretary Steven Mnuchin said he “wouldn’t minimize” the possibility that the U.S. will impose tariffs on all $500 billion worth of goods that the U.S. imports from China, amplifying a threat President Donald Trump made in a television interview earlier in the week. Mr. Mnuchin was speaking ahead of a meeting among G-20 finance ministers and central bankers here.

Trump Attacks Fed AGAIN for Raising Interest Rates

For the second day in a row, President Trump on Friday ripped the Federal Reserve for hiking interest rates — continuing an aggressive assault on the central bank, which is normally off limits from presidential attacks. “China, the European Union and others have been manipulating their currencies and interest rates lower, while the US is raising rates while the dollars [sic] gets stronger and stronger with each passing day — taking away our big competitive edge. As usual, not a level playing field,” the president tweeted. “The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The US should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates — Really?” he added in a follow-up tweet

Presidents historically have refrained from criticizing the Fed, which is supposedly free from political interference.

The central bank’s job is to keep prices stable, including raising interest rates to prevent the economy from overheating and inflation from rising. But Trump launched his attack first on Thursday during an interview with CNBC and continued on Friday on Twitter. But current and former Fed officials didn’t sound overly concerned about the commander-in-chief’s perspective. “The [Fed’s policy] committee has a mandate to keep inflation low and stable and obtain maximum employment for the US economy, so people can comment, including the president and other politicians, but it’s up to the committee to try to take the best action we can to achieve those objectives,” St. Louis Federal Reserve Bank President James Bullard said Friday.

Ex-Dallas Fed President Richard Fisher told CNBC that Trump was off course in his criticism of the Fed, which is headed by Trump appointee Jerome Powell.

“One of the hallmarks of our great American economy is preserving the independence of the Federal Reserve. No president should interfere with the workings of the Fed,” Fisher said. “Were I Chairman Powell, I would ignore the president and do my job and I am confident he will do just that.” The economy has continued to grow since Trump took office, with unemployment rates down, growth rising and the stock market up — though it closed down about 135 points on Thursday. The Fed has hiked interest rates twice this year and could jack the rate up twice more before year Trump told CNBC the hikes could damage America’s ongoing economic recovery from the Great Recession. “I’m not thrilled. Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time I’m letting them do what they feel is best,” Trump said. “Now I’m just saying the same thing that I would have said as a private citizen,” he said, asserting that he didn’t care about precedent. “So somebody would say, ‘Oh, maybe you shouldn’t say that as president.’ I couldn’t care less what they say, because my views haven’t changed. I don’t like all of this work that we’re putting into the economy and then I see rates going up,” he said.

Dollar drops on Trump criticism; U.S., Europe stocks tepid

Reuters Graphic

NEW YORK (Reuters) – The U.S. dollar weakened on Friday against key world currencies as President Donald Trump complained again about its strength, while U.S. and European stock markets were tepid amid fresh tariff talk and another round of corporate earnings. U.S. government bond yields rose as Trump repeated his criticism a day earlier of the Federal Reserve’s policy on raising interest rates, saying it takes away from the United States’ “big competitive edge.” He also lamented the strength of the dollar and accused the European Union and China of manipulating their currencies. The dollar was on pace for its biggest single-session drop in three weeks against a basket of six major currencies, stalling a rally that had driven the greenback to a year high. “The dollar is an important issue today especially because we have been on a rise for quite a long time,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas In the latest trade salvo, Trump said he was ready to impose tariffs on all $500 billion of imported goods from China. “The reason we are not up more is the push and pull that has been the case for the past two months,” said Walter Todd, chief investment officer at Greenwood Capital in Greenwood, South Carolina. “That is between what is clearly a very good earnings and economic backdrop in the U.S. contrasted with the risk that trade continues to be a problem.”

Trump threatens tariffs on all $500 billion of Chinese imports

FILE PHOTO: U.S. President Donald Trump participates in a cabinet meeting at the White House in Washington, U.S., July 18, 2018. REUTERS/Leah Millis

WASHINGTON (Reuters) – U.S. President Donald Trump on Friday said he was ready to impose tariffs on all $500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets. “We’re down a tremendous amount,” Trump said in an interview about trade imbalances with China on CNBC television broadcast on Friday. “I’m ready to go to 500.” His comments worried investors already grappling with the impact of a strengthening U.S. dollar on corporate results, and key stock indexes on Wall Street dropped at the open on Friday. The U.S. dollar fell against major currencies on Friday on Trumps threat to impose more import tariffs and his repetition of complaints about rising interest rates and the strength of the U.S. dollar. The dollar index .DXY, a measure of its value against a basket of six major currencies, was on track to post its largest one-day loss in three weeks. Against the yen, the dollar was on pace for its worst daily fall in two months. A top Federal Reserve official, meanwhile, warned the trade war could hurt the U.S. economy. Around $505 billion of Chinese goods were imported to the U.S. in 2017, leading to a trade deficit of nearly $376 billion, U.S. government data shows. Chinese imports from the U.S. totaled $205 billion in the first five months of 2018, with the deficit reaching $152 billion. Trump is taking a more aggressive, protectionist posture on trade than his recent predecessors, sparking retaliatory measures from other countries. Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports. China promptly levied taxes on the same value of U.S. products. When asked about the stock market possibly falling if the United States imposes duties on such a large amount of goods, Trump told CNBC: “If it does, it does. Look, I’m not doing this for politics.” Still, new tariffs could help Trump’s Republican party going into November’s congressional elections. More than 70 percent of Republican and Republican-leaning U.S. adults believe increased tariffs between the United States and its trading partners will be good for the country, according to a Pew Research Center survey released late Thursday.

However, most economists warn that the imposition of import tariffs could disrupt global manufacturing supply chains, raise input costs and raise prices for consumers, leading to slower economic growth.

After the interview, Trump reiterated criticism of the Federal Reserve’s planned interest-rate hikes, posting on Twitter that the tightening policy would diminish any U.S. trade advantage and exacerbate losses from “BAD trade deals.”

St. Louis Federal Reserve Bank James Bullard said on Friday the Fed would remain unaffected by Trump’s comments on monetary policy and expressed concerns about rising tariffs.

“The escalating trade war, if it goes badly, could be a risk for the U.S. economy,” Bullard said, adding he understands the policy’s objective. “But it could be that all we end up with is a lot of tariffs globally and a lot of other types of protectionism globally.”

Cohen recording indicates Trump blatantly lied when he said he didn’t know about McDougal payment

“We have no knowledge of any of this.”
KAREN MCDOUGAL (FAR RIGHT) WITH TRUMP, HIS WIFE, AND HIS DAUGHTER. (CREDIT: SCREENGRAB)
KAREN MCDOUGAL (FAR RIGHT) WITH TRUMP, HIS WIFE, AND HIS DAUGHTER. (CREDIT: SCREENGRAB)

The New York Times on Friday broke bombshell news that in September 2016, President Trump’s longtime personal lawyer, Michael Cohen, secretly recorded a conversation with Trump “in which they discussed payments to a former Playboy model [Karen McDougal] who said she had an affair with Mr. Trump, according to lawyers and others familiar with the recording.” Shortly afterward, a follow-up report from The Washington Post added more details about the content of this discussion. Citing a source “familiar with the recording,” the Post reported that Cohen and Trump discussed purchasing the rights to McDougal’s story of her alleged affair from American Media Inc (AMI). AMI is the parent company of the National Enquirer. AMI’s CEO, David Pecker, describes himself as a close friend of Trump. Just days before the 2016 election, The Wall Street Journal broke news that AMI paid McDougal for the rights to her story in August 2016, the month before Cohen’s recorded conversation with Trump. Despite purchasing the rights, the Enquirer never published anything about McDougal’s alleged affair with Trump — a technique known in the tabloid world as “catch and kill.”

Trump’s lawyer, Rudy Giuliani, released a statement to the Post on Friday suggesting the president’s legal team will try to explain away the Cohen recording as evidence Trump didn’t know about AMI’s payment to McDougal in advance. “Nothing in that conversation suggests that he had any knowledge of [the AMI payment] in advance,” Giuliani said. “In the big scheme of things, it’s powerful exculpatory evidence.”

Poll Shows Most Americans Disapprove Of Trump’s Handling Of Putin Summit

A majority of Americans disapprove of President Donald Trump’s handling of his meeting with Russian President Vladimir Putin earlier this week, according to the results of a CBS News poll released on Thursday. Fifty-five percent of Americans said they disapprove of the way Trump handled the recent summit compared to just 32 percent that approve. Another 14 percent said they don’t know or did not answer. The poll showed a significant partisan divide on the issue, however, as 68 percent of Republicans approve of Trump’s handling of the meeting and 83 percent of Democrats disapprove. A majority of independents also disapprove. The release of the poll results come as Trump has drawn considerable criticism for his performance in a press conference with Putin during which he appeared to side with the Russian president over the U.S. intelligence community on the issue of Russian meddling in the 2016 election. Trump has subsequently sought to clarify his remarks, stating he accepts the intelligence community’s conclusion that Russia meddled in the election. The poll found that the vast majority of Americans believe the U.S. intelligence community’s assessments that Russia interfered in the election, although Republicans are somewhat skeptical. While 70 percent of all Americans, including 89 percent of Democrats, believe the intelligence assessments, Republicans are divided 51 percent to 42 percent. Republicans are also less likely to be concerned Russian may try to interfere in the upcoming midterm elections, with 38 percent saying they are “very” or “somewhat concerned” compared to 61 percent of all Americans. The survey of 1,007 adults was conducted on behalf of CBS News by SSRS on July 17th and 18th and has a margin of error of plus or minus 4 percentage points.

Trump advisor Kudlow says economic growth could top 4% for ‘a quarter or two,’ more tax cuts could be coming

Larry Kudlow, Director of the National Economic Council.
David A. Grogan | CNBC Larry Kudlow, Director of the National Economic Council.

Larry Kudlow, President Donald Trump’s top economic advisor, gave an optimistic view of the economy on Wednesday in which growth will run considerably above what has been the norm for the past decade. Kudlow, spoke at CNBC’s Delivering Alpha conference in New York. As part of the administration’s plan to grow the economy, Kudlow said there would be additional rounds of tax cuts ahead. “We are getting 3 [percent] and it may be 4 for a quarter or two,” Kudlow told CNBC’s Jim Cramer. “That’s all for the good. Literally millions more people are working.” Asked whether the administration is considering more tax legislation following the cuts passed late last year, Kudlow said there could be a “2.0 and 3.0 and a 4.0.”Economists widely expect second-quarter growth to approach 4 percent after GDP rose 2 percent in the first quarter and 2.3 percent for all of Trump’s first year in office in 2017. The administration has used a mix of tax cuts, spending increases and regulatory rollbacks in an effort to goose the economy out of what Kudlow characterized as a “growth recession” following the financial crisis. “You’ve got kids, millennials etc. … who have never seen a full-fledged lasting prosperity,” Kudlow said. “It’s not that they’re cynics, they’ve just never seen it. We haven’t had one in 20 years.” His remarks come as the White House has launched a trade war against both adversaries like China and friends including European Union nations. Long known as a free-market proponent, Kudlow has said that while he generally opposes tariffs, something needs to be done “This guy, President Trump, has the biggest backbone,” he said. “He will not let go of this point, nor should he in my opinion.” Kudlow claimed that sources have told the administration that “the Chinese government knows they’re wrong.” “They know they’re wrong, the rest of the world knows they’re wrong” he said. “Something has to be done here.”

UK watchdog and EU tell banks to prepare for hard Brexit

LONDON (Reuters) – Britain’s banks and insurers must plan for a “hard” Brexit in case a transition period is not in place next March, a senior British regulator said on Thursday in a warning echoed by Brussels. Anti-Brexit demonstrators wave EU flags opposite the Houses of Parliament, in London, Britain, June 19, 2018. REUTERS/Henry Nicholls/File Photo “With eight months until we exit the European Union in March 2019, it is important we all — regulators and industry — continue to plan for a range of scenarios,” said Nausicaa Delfas, head of international strategy at the Financial Conduct Authority. “Across the FCA, together with colleagues from the Bank of England and the government, we have been working to develop a number of safeguards and contingencies, in the event of a hard Brexit, to ensure that ‘day 1’ works smoothly,” Delfas told an event held by TheCityUK. Britain and the EU have agreed on a transition deal bridging Brexit in March next year and the end of 2020, but it has yet to be ratified, meaning financial firms based in Britain could face an abrupt end to EU market access. EU banking, insurance and markets watchdogs have already warned their respective sectors to be ready for a hard Brexit. The bloc’s executive European Commission told EU states on Thursday to “intensify preparedness” for a potentially disruptive Brexit. Britain has said it and the EU should act to ensure that cross-border financial contracts like derivatives and insurance policies can still be serviced after March, but the EU reiterated on Thursday that it won’t legislate for now. “In relation to contracts, at this juncture, there does not appear to be an issue of a general nature linked to contract continuity as in principle, even after withdrawal, the performance of existing obligations can continue,” the European Commission said on Thursday. It is unclear what sort of EU market access financial firms in Britain will have after the transition period ends, prompting many banks and insurers to have new hubs up and running in the bloc by next March to avoid potential disruption. A group of eight EU states also called for a redoubling of efforts to build a capital markets union in the bloc to provide “stable and cost-effective” funding for EU companies, given that Britain, Europe’s biggest financial center, is leaving. Britain’s government wants future financial services trade with the EU based on an “enhanced” version of the bloc’s basic “equivalence” regime used by Japan, Switzerland and the United States. Brussels alone grants access to foreign firms if it deems that their home country rules are equivalent or aligned enough with those in the bloc. “In these debates on equivalence… the UK and EU are quite evenly matched in terms of financial services. That means we will see something more like the negotiations between the EU and U.S., where we give and take on both sides,” Manchester said. But the EU and United States took four years to agree equivalence on a rules just for clearing derivatives, raising concerns in Britain over what the City financial district could face after Brexit. Manchester, a former UK Treasury official, said if Brussels does not deem a UK firm to be equivalent, British regulators could choose to “do our own thing”, raising concerns about predictability for international financial firms.

Kudlow says President Trump is ‘so dissatisfied’ with China trade talks that he is keeping the pressure on

Larry Kudlow, Director of the National Economic Council. 
David A. Grogan | CNBC Larry Kudlow, Director of the National Economic Council.

President Donald Trump’s top economic advisor Larry Kudlow said China trade talks have stalled on Wednesday. “I do not think President Xi has any intention of following through on any of the discussions we’ve made and I think the President is so satisfied with China on these so-called talks that he is keeping the pressure on and I support that,” Kudlow said. Kudlow pointed to the gap between U.S. and Chinese tariffs, saying “our average tariff is about” 2.5 percent while “China’s average tariff is about 14 percent.” “Here’s my solution, and the president agrees with this: Lower your barriers,” Kudlow said. “We will export like crazy.” Kudlow added that President XI of China himself is “holding the game up” but that overall the country would like to make a deal.

Trump’s administration released a new list of tariffs on $200 billion of Chinese goods on July 10, as the president continues to broaden the trade war with Beijing. Trump’s new tariffs will not go into effect immediately but will undergo a two-month review process, with hearings Aug. 20-23. The list of comes after warnings by Trump that he may implement tariffs on at least $500 billion in Chinese goods should Beijing retaliate against the $34 billion in U.S. tariffs that kicked in July 6. Despite the president’s threats, China implemented retaliatory tariffs on the U.S. shortly after. China has again accused the U.S. of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute.

Housing starts tumble to 9-month low as market headwinds crush momentum

Bloomberg News/Landov A worker sweeps near a new home under construction in Phoenix, Arizona.

Housing starts ran at a seasonally adjusted annual 1.173 million rate in June, the Commerce Department said Wednesday. Builders broke ground on far fewer homes in June, signalling more of the stop-start rhythm that’s characterized the uneven housing recovery. June’s pace of starts was 12.3% lower than a downwardly-revised May, and 3% lower than year-ago levels Permits, which signal future start activity, were at a seasonally adjusted annual 1.273 million pace.  Buffeted by higher input costs, builders are struggling to give buyers what they want – and many buyers, in turn, may be put off by long wait times for new construction. Sentiment among home builders is treading water, an industry group said Tuesday. That’s a sign that the pace of construction isn’t likely to accelerate much. The government data on residential construction is based on small sample sizes, which means it’s often revised heavily. In June’s release, starts figures from both May and April were marked down. For the year to date, starts are 7.8% higher than the same period in 2017, and permits are 5.7% higher.  In a note published Tuesday, before the data release, BTIG analysts noted that their BTIG/HomeSphere Builder Survey found sales trends were sluggish in June. One-quarter of survey respondents said they had lower sales volumes than a year ago, while 51% saw traffic that was flat or lower than in June 2017.

U.S. mutual fund investors ditch equities despite S&P 500 gains: ICI

NEW YORK (Reuters) – U.S. mutual fund investors fled from stocks for the 14th straight week as ongoing trade war fears divided markets, Investment Company Institute data showed on Wednesday. Withdrawals from equity-focused long-term mutual funds totaled $4.2 billion for the week ended July 11, ICI said. The bearish sentiment among mutual fund investors ran counter to that of exchange-traded fund investors and the broader market. Equity ETFs saw net inflows of $1 billion during a seven-day period in which the S&P 500 added 2.24 percent. Markets rose for four days on strong economic news before retracing some of the gains after Washington threatened to impose tariffs on an additional $200 billion worth of Chinese goods and Beijing warned that it would hit back.Combined equity mutual fund and ETF withdrawals rose to a total of$36.9 billion since mid-June. Ongoing investor demand for safety led to $7.4 billion in deposits to bond funds, the 21st straight week of inflows for the category Tax-free municipal bond funds saw the strongest demand since January, attracting $1 billion of investor cash, ICI data showed. Taxable bonds added $6.4 billion, the largest net deposit since April.

Manufacturers are concerned about impact of tariffs: Fed

Fed's Beige Book: Economy growing modestly in most districts
Fed’s Beige Book: Economy growing modestly in most districts

Manufacturers in every one of the Federal Reserve’s 12 districts worried about the impact of tariffs, a Federal Reserve report said on Wednesday, even as the U.S. economy continued to expand at a moderate to modest pace. The latest snapshot of the health of the economy, derived from the central bank’s discussions with business contacts around the country, echoed anecdotes from lawmakers in Congress on Tuesday and Wednesday of the impact in their districts of tariffs during a two-day hearing with Fed Chairman Jerome Powell. “Manufacturers in all districts expressed concern about tariffs and in many districts reported higher prices and supply disruptions that they attributed to the new trade policies,” the Fed said in its report President Donald Trump so far has imposed or threatened tariffs on $250 billion of Chinese goods and riled key allies by slapping on steel and aluminum tariffs. Powell has said that the Fed has yet to see material change to the economy showing up in data and he repeated this week that the central bank intends to keep raising interest rates gradually as it seeks to keep pace with a strengthening economy but not raise rates so high or so fast that it weakens growth. A number of districts detailed how the uncertainty over escalating trade disputes between the United States and China, Europe, Canada, Mexico and elsewhere, were already hitting firms to varying degrees. In Boston for example, contacts expressed concern but none had yet to see it feed through into demand or hiring and capital expenditure plans.  in New York trade uncertainty was “a major concern” while in Philadelphia a machinery manufacturer said the impact of steel tariffs “have been chaotic to its supply chain disrupting planned orders, increasing prices, and prompting some panic buying.” A number of districts reported higher input costs due to the import tariffs raising prices for fuel, metals and other goods. Economic growth has accelerated this year and unemployment is lower than policymakers believe is sustainable in the longer-run. However, there are few signs yet of a spike in inflation high enough to force the Fed to up the pace of rate rises.

The Fed’s last three rate hikes have come at a pace of every other meeting, and it projects another two rate rises by year- end following moves in March and June. Elsewhere in the report, the Fed’s contacts continued to note tight labor markets and a shortage of skilled workers, but wage increases remained modest to moderate. The price of key inputs rose further and some districts said that they expected pricing pressures to intensify further. The Beige Book was prepared by the Boston Fed with information collected on or before July 9.

Defiant Trump says Russia not targeting U.S., calls critics deranged

(Reuters) – President Donald Trump contradicted U.S. intelligence agencies again on Wednesday, saying that Russia was not still targeting the United States, and accused his critics of being deranged.The day after he tried to quiet a political uproar over his failure to confront Russian President Vladimir Putin during their Helsinki summit for Moscow’s 2016 U.S. election meddling, Trump adopted his usual defiant posture and dismissed assessments of Russia from the intelligence community.

“We’re doing very well, probably as well as anybody has ever done with Russia. And there’s been no president ever as tough as I have been on Russia,” Trump said before a Cabinet meeting at the White House, adding that Putin “understands it and he’s not happy about it.” Asked by reporters whether Russia was still targeting the United States, Trump shook his head and said, “No.” U.S. intelligence officials have said Russian election interference efforts are continuing and now target the upcoming congressional elections in November. Trump’s comments followed a series of early morning Twitter posts on Wednesday in which the Republican president said his heavily criticized summit with Putin would eventually produce “big results” and accused his critics of “Trump Derangement Syndrome.”“Some people HATE the fact that I got along well with President Putin of Russia. They would rather go to war than see this. It’s called Trump Derangement Syndrome!” the president wrote.Trump has faced bipartisan fury at home since the summit in Finland. Critics have accused him of siding with Russia over his own country by failing to criticize Moscow for what U.S. intelligence agencies last year described as Moscow’s interference in the 2016 election in an attempt to sow discord, aid Trump’s candidacy and disparage Trump’s Democratic opponent Hillary Clinton. Putin has denied allegations of election interference. Members of Congress from both parties have suggested possible legislation to toughen U.S. sanctions against Russia and enhance election security ahead of November’s midterm voting. “So many people at the higher ends of intelligence loved my press conference performance in Helsinki,” Trump said on Twitter. “We got along well which truly bothered many haters who wanted to see a boxing match. Big results will come!” Special Counsel Robert Mueller, investigating Russia’s role in the 2016 election, is looking into whether Trump’s campaign colluded with Russia, an allegation the president denies. At the Helsinki news conference, Trump cast doubt on the findings of the agencies. But on Tuesday he said he misspoke and had accepted their conclusions about Russian meddling, although he hedged by deviating from his prepared notes to say “it could be other people also. There’s a lot of people out there.” U.S. Director of National Intelligence Dan Coats told a congressional committee in February that he already had seen evidence Russia was targeting U.S. elections in November, when Republican control of the House of Representatives and Senate are at stake, plus a host of positions in state governments. In rebutting Trump’s dismissive comments about U.S. intelligence on Monday, Coats said in a statement, “We have been clear in our assessments of Russian meddling in the 2016 election and their ongoing, pervasive efforts to undermine our democracy.”

EU fines Google $5 billion over Android antitrust abuse

Google's logo at the company's exhibition stand at the Dmexco conference in Cologne, Germany in September 2016
EU regulators expected to fine Google $5 billion
  

European Union regulators have slapped Alphabet-owned Google with a 4.34 billion euro ($5 billion) antitrust fine for abusing the dominance of its Android mobile operating system, which is by far the most popular smartphone OS in the world. The European Commission, the EU’s executive body, ordered the company to put an end to illegal conduct within 90 days, or else face additional charges of up to 5 percent of Alphabet’s average daily worldwide revenue. The EU fine is the largest ever issued to Google, which was slapped with a $2.7 billion penalty for favoring its shopping service over competitors last year. Google said in a statement that it would appeal the ruling, arguing against the EU’s view that its software is restrictive of fair competition. European officials say Google’s parent company has unfairly favored its own services by forcing smartphone makers to pre-install Google apps like Chrome and Search in a bundle with its app store, Play. It also said Google violated competition rules by sometimes paying phone makers to exclusively pre-install Google search on their devices or sign agreements not to sell phones that run other modified, or “forked,” versions of Android.  The EU first opened its investigation into Android in 2015, two years after receiving a complaint from FairSearch, which, at the time, included the likes of Microsoft and Nokia.

European Competition Commissioner Margrethe Vestager speaks during a news conference at the EU Commission headquarters in Brussels, April 15, 2015.
Francois Lenoir | Reuters European Competition Commissioner Margrethe Vestager speaks during a news conference at the EU Commission headquarters in Brussels, April 15, 2015.

Google has previously denied these accusations, arguing that phone makers still have plenty of choice and that bundling search and other apps with Play has ultimately allowed it to provide its services for free. In a news conference on Wednesday, Margrethe Vestager, the EU’s competition commissioner, reiterated the argument presented in the decision. She said Google’s model “prevents device manufacturers from using any alternative version of Android that was not used by Google.” “Our decision stops Google from controlling which search and browser apps manufacturers can pre-install on Android devices or which Android operating system they can adopt,” she said.

The commission is still investigating a third antitrust case against Google’s search advertising service, AdSense.

U.S. Dealers Expect Foreign Cars to Cost More if Auto Tariffs Enacted

A 25% tariff would increase the average price of an imported vehicle in the U.S. by $5,800, the auto industry’s main lobbying group says

Some car dealers are stockpiling popular imports such as SUVs in anticipation of a 25% tariff on imported cars. Shown, the Audi Q7 Quattro SUV on display at the New York Auto Show in March.
Some car dealers are stockpiling popular imports such as SUVs in anticipation of a 25% tariff on imported cars. Shown, the Audi Q7 Quattro SUV on display at the New York Auto Show in March. Photo: Lev Radin/Zuma Press By Adrienne Roberts

Car dealer David Rosenberg is taking President Donald Trump’s threat to impose a 25% tariff on imported cars seriously. Mr. Rosenberg’s New England dealerships have begun stockpiling foreign-built Mercedes-Benz and Audi sport-utility vehicles, based on worries that the tariff, if enacted, would make those vehicles more expensive to order from overseas. “There is no doubt the auto retail industry will be adversely affected,” Mr. Rosenberg said in an interview. “We’ll see price increases across the board and a lot of that will be passed on to the consumer. Sales will go down.” Not all dealers are taking such active measures. But car sellers and industry analysts say consumers should expect higher prices on auto imports if the proposed tariff were adopted. About 44% of all U.S.-sold cars were imported into the country last year. Dealers say many customers can’t afford more expensive vehicles. So auto retailers say they may curtail orders of vehicles built abroad, and some say they may focus on used cars with higher margins. The tariff, to a lesser extent, could also inflate prices for U.S.-built cars, because many of them use foreign-built car parts, car companies say. ClimbingAverage U.S. car prices have steadilyincreased, and tariffs could push them upfurther.Source: J.D. PowerNote: 2018 data are for the first half of the year. The average price of a car has been rising steadily for nearly a decade. Car makers and dealers say a 25% duty would only further increase costs, adding several thousand additional dollars to the sticker price of an imported vehicle. Mazda and Mitsubishi are expected to be hurt more than many other foreign brands because they are 100% reliant on imports to stock U.S. dealer lots and typically sell to price-sensitive buyers. The Alliance of Automobile Manufacturers, the auto industry’s chief lobbying group in Washington, estimates a 25% tariff would increase the average price of an imported vehicle by $5,800. For some top-selling imports, such as the Japanese-built Subaru Forester, Tim Kelly, owner of Kelly Subaru in Chattanooga, Tenn., estimates the tariff could add an extra $5,000 to the price tag, pushing the vehicle’s cost far higher than other SUVs that aren’t subject to the import duty. If that were the case, Mr. Kelly said, it wouldn’t be worth stocking the Forester, saying the increase would make it “wildly uncompetitive.” “Why not buy an Outback?” he added, which could end up being cheaper than the Forester if the tariff were imposed. The larger Subaru Outback is built in Lafayette, Ind.

Trump Bashes Media Coverage Of Putin Meeting, NATO Summit

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Once again going after one of his favorite targets, President Donald Trump attacked the media’s coverage of his meeting with Russian President Vladimir Putin and the recent NATO summit in a pair of posts to Twitter on Tuesday. Trump also suggested that his meeting with Putin on Monday went better than last week’s NATO summit with close U.S. allies. “While I had a great meeting with NATO, raising vast amounts of money, I had an even better meeting with Vladimir Putin of Russia,” Trump tweeted. “Sadly, it is not being reported that way – the Fake News is going Crazy!” Trump has received considerable criticism for his performance during a press conference with Putin in which he appeared to side with the Russian president over the U.S. intelligence community. Members of the media have attacked Trump’s performance, although lawmakers from both sides of the aisle have also had harsh words for the president. In an earlier tweet, Trump claimed the media has focused on his criticism of U.S. allies at the NATO summit rather than his efforts to convince members to increase defense spending. “I had a great meeting with NATO. They have paid $33 Billion more and will pay hundreds of Billions of Dollars more in the future, only because of me,” Trump tweeted. “NATO was weak, but now it is strong again (bad for Russia),” he added. “The media only says I was rude to leaders, never mentions the money!” Following the summit, Trump claimed tremendous progress had been made in convincing allies to increase defense spending, although other world leaders raised questions about his assertions. French President Emmanuel Macron indicated that the NATO members only agreed to live up to their current spending commitments. A joint communiqué noted NATO members would follow through on plans to spend at least 2 percent of GDP on defense by 2024, a goal set more than two years before Trump was elected president.

 

Global gas flaring declined in 2017 after years of growth, data show

Flaring of gas at crude-oil production sites worldwide went down in 2017 despite a 0.5% increase in production, the World Bank’s Global Gas Flaring Reduction Partnership reported.

The nearly 5% year-to-year decline began to reverse years of increases that began in 2010, it said. Satellite measurements by GGFR showed that flaring globally totaled a rounded 140.6 billion cu m (bcm) last year, 4.7% less than 2016’s 147.6 bcm. The 2017 amount was the lowest total since 2013’s 139.6 bcm. Russia flared the largest single amount, 19.9 bcm, in 2017, 2.5% less than the 22.4 bcm which was measured there a year earlier and equal to the amount measured in 2013. Iraq came in second last year at 17.8 bcm, followed by Iran at 17.7 bcm, the US at 9.5 bcm, and Algeria at 8.8 bcm. “The latest global gas flaring data are encouraging, but we will have to wait a few more years to know whether it represents a much-needed turning point,” said Riccardo Puliti, a World Bank senior director who heads its energy and extractives global practice. “Ending routine gas flaring is a key component of our climate change mitigation agenda, and the global flaring reduction Initiative we launched just 3 years ago now has 77 endorsers, covering about 60% of the total gas flared around the world,” he indicated. The US National Oceanic and Atmospheric Administration and GGFR have developed the flaring estimates in cooperation with the University of Colorado, based on observations from advanced sensors in a satellite launched in 2012, the World Bank organization comprised of governments, oil companies, and international institutions said.

The Fed’s making a mistake and it could cause a recession by next summer: Natixis economist

Federal Reserve Board Chairman Jerome Powell reacts at his news conference after the two-day meeting of the Federal Open Market Committee (FOMC) on interest rate policy in Washington, U.S., June 13, 2018
Yuri Gripas | Reuters Federal Reserve Board Chairman Jerome Powell reacts at his news conference after the two-day meeting of the Federal Open Market Committee (FOMC) on interest rate policy in Washington, U.S., June 13, 2018

The Federal Reserve’s interest rates hikes could drive the Treasury yield curve to invert right after its September meeting, and a recession could follow by next summer, according to Joseph LaVorgna, Natixis chief economist Americas. Investors have been cautiously monitoring he yield curve, or the difference between the shorter maturity Treasury yields and longer duration yields. In the case of 2-year note and 10-year Treasury, the curve was as narrow as about 24 basis points on Tuesday, an 11- year low. Markets are fixated on the yield curve since a flattening curve signals potential trouble ahead for the economy, but an inversion, when the short end, or in this case the 2-year note yield, rises above the 10-year yield has proven to be a reliable warning of a recession.

On Tuesday, the 2-year yield was as high as 2.61 percent Tuesday, while the 10-year yield was at 2.85 percent.

“It’s going to invert and it’s going to be a mistake. It’s going to take an equity pullback and wider credit spreads. We’re going to price the ‘Powell put’ and then the Fed will try to uninvert the curve,” LaVorgna said.

Source: Natixis

LaVorgna said if the curve does invert in October, history shows a recession would occur between August, 2019 and August, 2020. “We always a recession, one per decade, dating back to 1854,” LaVorgna said. The 2-year is most sensitive to Fed policy and its influence on short term rates, so it Lavorgna said the Fed’s expected September rate hike and the likelihood it reaffirms its commitment to hiking could cause the yield curve to invert by some point in October. LaVorgna said in the past four instances where the curve inverted, with the 10-year Treasury yield below the 2-year yield, the economy peaked an average 16 months later. The stock market, however, peaked an average five months before the economy topped out.

“if you look at 10-year yields, we are the highest yielder among developed countries. It tells you either the market does not believe inflation is going to pick up or growth will remain modest and the Fed, if it continues on the course it’s on, is effectively making a mistake,” said LaVorgna.

While the yield curve is a highly watched recession indicator, the stock market tends to continue rallying even when after it inverts. Powell, asked at a Senate hearing Tuesday about the curve said he was not concerned about it but said he focuses on what the long end yield is saying about the real or neutral rate. That’s the rate that the Fed views as just right for the economy, and it is neither stimulating or slowing it. “The Fed incorrectly tries to figure out what the neutral rate is and then works backward,” he said.

LaVorgna expects the curve to invert.

“It’s heading that way, and Powell seems be erring more on the side of ‘it doesn’t matter,'” said LaVorgna. LaVorgna said Powell has noted that recessions followed other curve inversions because there was high inflation, but LaVorgna said core CPI inflation was just 2.1 percent in 2006 when the curve inverted before the financial crisis two years later. In June, core CPI, without food and energy, was 2.3 percent.

The Latest: Trump says he misspoke on Russia meddling

WASHINGTON (AP) — The Latest on President Donald Trump and his summit with Russian President Vladimir Putin (all times local): President Donald Trump says he meant the opposite when he said in Helsinki that he doesn’t see why Russia would have interfered in the 2016 U.S. elections.

Back at the White House on Tuesday, the president told reporters that he said he meant he doesn’t see why Russia “wouldn’t” be responsible.

He also said he accepts the American intelligence community’s conclusion that Russia interfered in the election, but he denied that his campaign had colluded in the effort. Trump spoke a day after returning to the U.S. to nearly universal condemnation of his performance at Russian President Vladmir Putin’s side in Helsinki. Putin said he wanted Trump to win the race against Democrat Hillary Clinton. In Helsinki, Trump delivered no condemnation of Russia’s interference and refused to say he believes American intelligence agencies over Russia’s denials of meddling. Senate Republican Leader Mitch McConnell is calling NATO the “most significant military alliance in history.” In remarks to reporters Tuesday, McConnell said “the European countries are our friends and the Russians are not.” McConnell says there is “indisputable evidence” Russia tried to affect the 2016 presidential election. He says the Senate understands the “Russia threat” and that is the “widespread view here in the United States Senate among members of both parties.” McConnell’s words came just minutes before President Donald Trump was expected to speak about the Helsinki summit on Monday. They seemed aimed at sending a clear message both to Trump and the Europeans.

At the summit, Trump favored  Russian President Vladimir Putin’s denial of Russian meddling over the assessment of U.S. intelligence agencies that Russia did try to interfere.Trump also at varying times in his European trip disparaged the NATO alliance, which was formed to counter the former Soviet Union.

John McCain: Trump Summit With Putin a ‘Tragic Mistake’

Image: John McCain: Trump Summit With Putin a 'Tragic Mistake'
(Getty Images)

Republican U.S. Senator John McCain on Monday called President Donald Trump’s meeting with Russian President Vladimir Putin in Helsinki “a tragic mistake” and a new low point for the United States, accusing the American leader of failing to defend his country. “Not only did President Trump fail to speak the truth about an adversary; but speaking for America to the world, our president failed to defend all that makes us who we are – a republic of free people dedicated to the cause of liberty at home and abroad,” McCain wrote of Trump, a fellow Republican.”It is clear that the summit in Helsinki was a tragic mistake,” he added in a statement.

New York to probe Kushner Cos. over lawsuit that claims tenant harassment

Tenants allege that the real-estate firm engaged in a campaign aimed at pushing rent-stabilized tenants out of their apartments
Getty Images President Donald Trump’s son-in-law and senior adviser Jared Kushner

New York Governor Andrew Cuomo’s office on Monday unveiled an investigation into whether Kushner Cos., the real-estate firm owned by the family of President Donald Trump’s son-in-law and senior adviser Jared Kushner, violated housing laws and regulations by harassing tenants. New York State Homes and Community Renewal said that its Tenant Protection Unit has launched an investigation at the Austin Nichols House in Brooklyn into allegations brought in a lawsuit that Kushner Cos. engaged in a campaign aimed at pushing rent-stabilized tenants out of their apartments by starting construction projects that created toxins, attracted vermin and made loud noise day and night. “Governor Cuomo has zero tolerance for tenant abuse of any kind and we will aggressively take on landlords who try to intimidate people out of their homes,” said RuthAnne Visnauskas, commissioner of New York State Homes and Community Renewal, in a statement. “In New York, no one is above the law, and we will thoroughly investigate the appalling allegations of harassment at this or any related property and hold anyone found guilty of such abuse responsible to the fullest extent of the law.” The lawsuit, brought by tenants of the Austin Nichols House, alleges that the noise created by construction work started shortly after Kushner Cos. bought the converted warehouse apartment building, which is located in Williamsburg, Brooklyn, according to the Associated Press. Tenants claim the noise was so loud it made conversation impossible. An AP investigation found that in the past three years, more than 250 rent-stabilized apartments, equal to 75% of the building, were emptied or sold, allowing the firm to convert them to luxury condos. Sales so far totaled more than $155 million, said the AP. The suit is seeking $10 million in damages. Kushner Cos. responded to a request for comment by saying that the lawsuit is totally without merit and that it will defend itself vigorously. “The residents of Austin Nichols House were fully informed about the planned renovation and all work was completed under the full supervision by the New York City Department of Buildings and other regulatory agencies, with full permits and with no violations for these claims,” the company said in a statement. It added that complaints made during the construction, which was completed in 2017, “were evaluated and addressed promptly by the property management team.” The news comes just months after a New York City Council member and a separate tenant’s rights group said they were launching an investigation of Kushner Cos. over a report that it regularly falsified building permits. That March probe was announced by politician Ritchie Torres and Aaron Carr, founder of Housing Rights Initiative (HRI), a tenants’ rights watchdog, at a press conference outside Kushner Cos. New York headquarters on Manhattan’s Fifth Avenue. It came after the Associated Press reported that Kushner Cos. routinely filed false paperwork with New York City, declaring it had no rent-regulated tenants in buildings it owned, when it actually had hundreds. That strategy allowed the company to move in and conduct extensive construction and renovation that tenants claimed was targeted harassment aimed at driving them out to clear the way for higher-paying renters, said the AP. Torres said the Department of Buildings should have identified the false documents as soon as tax documents showed they were wrong. The politician said he was in confidential talks with prosecutors. Kushner Cos. said at the time that it outsources the preparation of those documents to third parties, with review by independent counsel. “If mistakes or violations are identified, corrective action is taken immediately,” the company said. The news comes just days after a report that Jared Kushner still lacks the highest security clearance, and has been blocked from seeing parts of Trumps daily brief. Experts told the Washington Post that that could severely hamper him from doing his job. In May, Kushner finally received a permanent security clearance after more than a year in his White House position. But the Post reported he only has “top secret” clearance, which prevents him from seeing the most classified materials. Kushner has been interviewed twice by special counsel Robert Mueller’s investigators, and his name has come up on a number of occasions in the Russian meddling investigation.

Gazprom to commence development of Kharasaveyskoye field in 2019

Russian firm Gazprom is planning to commence the full-scale development of the Kharasaveyskoye field located north of Bovanenkovskoye in the Yamal Peninsula, in 2019. Gazprom plans to commence gas production at the field in 2023 with initial focus on the Cenomanian-Aptian deposits. The field is expected to produce 32 billion cubic meters a year. The Kharasaveyskoye project also involves development of the deeper-lying Neocomian-Jurassic deposits. Gazprom said it conducted a meeting on the pre-development project for the Kharasaveyskoye gas and condensate field and the gas transmission system. As part of the pre-development project, the company plans to build a gas treatment unit, a booster compressor station, clusters of producing gas wells, as well as transport and power infrastructure. According to the company, the Yamal Peninsula is strategically important to the country’s gas industry and the reliability of gas supplies to consumers. Gazprom is developing a major new gas production centre in the Yamal Peninsula to replace the dwindling reserves of the Nadym-Pur-Taz region. The major contributor to the Yamal centre is the Bovanenkovskoye field, where two gas production facilities are currently operating. Later this year, the firm is planning to launch of the third and final gas production facility, bringing the Bovanenkovskoye field’s production capacity to 115 billion cubic meters of gas per year. Gazprom management committee chairman Alexey Miller said: “The development of the Yamal gas production centre is an ambitious strategic goal of national importance. The centre is key and essential to the domestic gas industry in the 21st century. “It offers a new frame of reference for gas flows in Russia and export markets. Bringing Bovanenkovskoye to its full capacity, exploring Kharasaveyskoye and later, the other Yamal-based fields, and expanding the northern gas transmission corridor are all crucial activities for the company.”

U.S. lawmakers call Trump ‘weak’ in summit with Russia’s Putin

FILE PHOTO: Senate Minority Leader Charles Schumer (D-NY) speaks after the Democratic policy lunch on Capitol Hill in Washington, U.S., July 10, 2018. REUTERS/Joshua Roberts

WASHINGTON (Reuters) – U.S. lawmakers from both parties on Monday criticized President Donald Trump for failing to issue a stern warning to Russian President Vladimir Putin about meddling in American elections, calling Trump’s message to Putin weak and a missed opportunity. Reaction on Capitol Hill was highly critical of Trump’s performance in a joint news conference in Helsinki with Putin after the two leaders’ first summit, a milestone in U.S.-Russian relations that have deteriorated in recent years. Republican Senator Lindsey Graham said that it was a “missed opportunity by President Trump to firmly hold Russia accountable for 2016 meddling and deliver a strong warning regarding future elections.” Graham, a member of the Senate Armed Services Committee, said, “This answer by President Trump will be seen by Russia as a sign of weakness and create far more problems than it solves.” On Friday, a U.S. special counsel announced indictments of 12 Russian spies on charges of hacking Democratic Party computer networks as part of the interference in the election campaign. Republican Trump, standing alongside Putin in front of reporters, said he saw no reason to believe Russia had hacked the election to help him win and that Putin “was extremely strong and powerful in his denial today.” House of Representatives Speaker Paul Ryan said in a statement that Russia undoubtedly interfered in the 2016 election. “The president must appreciate that Russia is not our ally. There is no moral equivalence between the United States and Russia, which remains hostile to our most basic values and ideals,” Ryan said. Another Republican, Senator John McCain, described Trump’s summit with Putin as “a tragic mistake.” Senate Majority Leader Mitch McConnell’s office said he had no immediate comment on Trump’s remarks in Helsinki. Trump’s eagerness to improve U.S. relations with Russia has been met with skepticism in Congress, where lawmakers nearly unanimously approved tough sanctions targeting Moscow in 2017. Several asked Trump to condemn Russia’s actions, both publicly and privately with Putin, and avoid striking deals to the detriment of European allies. Top House of Representatives Democrat Nancy Pelosi wrote on Twitter, “Every single day, I find myself asking: what do the Russians have on @realDonaldTrump personally, financially, & politically? The answer to that question is that only thing that explains his behavior & his refusal to stand up to Putin.” Trump said he holds both the United States and Russia responsible for years of strained relations. The U.S. president had touted the summit as an opportunity to reduce tensions, inflamed by Russia’s annexation of the Crimea peninsula from Ukraine in 2014, its military backing of Syrian President Bashar al-Assad, which turned the tide of the Syrian civil war in 2015, and accusations of Russian meddling in the 2016 U.S. election.“I never thought I would see the day when our American President would stand on the stage with the Russian President and place blame on the United States for Russian aggression. This is shameful,” Flake said on Twitter. Representative Adam Schiff, senior Democrat on the House of Representatives intelligence panel, predicted Putin will take Trump’s remarks “as a green light to interfere” in 2018 congressional elections. Schiff called Trump “cowardly.”

 

Morgan Stanley’s stock market analyst warns clients to stop yawning at his bearish call and get defensive

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Dani Pozo | AFP | Getty Images Morgan Stanley’s lead stock market analyst said investors are making a mistake by ignoring his calls to batten down the hatches.

“While [second-quarter] earnings season should come in better than expected, we do not see it as a positive catalyst for the U.S. equity market. Our defensive rotation call last week was met with a big yawn. We reiterate the call today with increasing conviction,” the firm’s chief U.S. equity strategist, Mike Wilson, wrote in a note Monday. “We think the current level of growth boosted by a one time tax benefit is likely to fall significantly,” Wilson added. Morgan Stanley says it thinks the forward guidance for companies will “matter more than the prints.” Wilson perceives a shift in the market, saying the market is now focused “on sustainability of growth.” He says his call is based “in a poor relative risk-reward headed into earnings.” “This quarter may be when that risk gets priced,” Wilson said. Wilson explained that his call is “anticipatory,” saying his analysis is not based on “a smoking gun” for why a strong market would suddenly head lower. Morgan Stanley is looking at the combination of “the technical evidence” for a downturn alongside numerous other issues, the note says, from “trade escalation” to “relative valuations.” “We struggle to see how this earnings season will act as a positive catalyst when an exceptionally strong [first-quarter] reporting season did not,” Wilson added. Investors should look to move away from stocks in the technology and financial sectors, Wilson said, even though they have been “the biggest drivers of earnings growth” over the last few quarters. Instead of betting on that growth to continue, Wilson says investors should consider moving toward sectors such as materials, telecommunications and utilities. “Tech and growth stocks are probably the most vulnerable to a significant drawdown during what is typically the weakest season of the year,” Wilson said.

Putin: Mueller Can ‘Be Present’ While Russian Officials Question Intelligence Officers Charged with Hacking DNC Computers

Russian President Vladimir Putin (Screenshot)

(CNSNews.com) – Russian President Vladimir Putin on Monday offered to allow Special Counsel Robert Mueller and U.S. officials to travel to Russia to witness the questioning of the 12 Russian intelligence officers that were indicted by a U.S. grand jury last week of hacking the computers of the Democratic National Committee in an effort to interfere with the 2016 election. “Now let’s get back to the issue of these 12 alleged intelligence officers of Russia. I don’t know the full extent of the situation, but President Trump mentioned this issue, and I will look into it,” Putin promised during a joint press conference with President Donald Trump in Helsinki, Finland. Putin cited a treaty dating back to 1999, called the Mutual Assistance on Criminal Cases, saying Russia has “an acting and existing agreement between the United States of American and the Russian Federation.”
“This treaty is in full effect. It works quite efficiently. On average, we initiate about 100, 150 criminal cases upon request from foreign states,” the Russian leader said. “For instance, last year, there was one extradition case upon request sent by the United States, so this treaty has specific legal procedures we can offer. The appropriate commission headed by Special Attorney Mueller. He can use this treaty as a solid foundation and send a formal and official request to us so that we would interrogate. We would hold the questioning of these individuals who he believes are privy to some crimes, and our law enforcement are perfectly able to do this questioning and send the appropriate materials to the United States,” he said.
If that’s not sufficient, members of Mueller’s commission can travel to Russia, Putin said, to witness the questioning of the defendants by Russian officials. “Moreover, we can meet you halfway. We can make another step. We can actually permit official representatives of the United States, including the members of this very commission, headed by Mr. Mueller—we can let them into the country, and they will be present at this questioning, but in this case, there is another condition, and this kind of effort should be a mutual one,” Putin said.

“As to who is to be believed and to who is not to be believed. You can trust no one if you take this. Where did you get this idea that President Trump trusts me or I trust him? He defends the interests of the United States of America, and I do defend the interests of the Russian Federation,” Putin said.
The Russian president said both leaders have common interests and are looking for ways to reconcile their differences.

Former ambassador: Putin likely viewed Trump’s phone call earlier this year as sign of ‘weakness’

Former ambassador: Putin likely viewed Trump's phone call earlier this year as sign of ‘weakness’
© Getty Images Russian President Vladimir Putin likely considered a phone call from President Trump earlier this year as a sign of “weakness” or “incoherence,” according to a former U.S. ambassador to Russia.

“I think Putin can only interpret this as signs of weakness or, at a minimum, incoherence in the president’s approach to the relationship,” Alexander Vershbow said Monday on CNN. Trump berated Putin during a March 20 phone call over a Russian propaganda video that appeared to show a nuclear missile falling on Florida, Axios reported on Sunday. Trump’s Mar-a-Lago club is located in Palm Beach, Fla. During the same phone call, Trump congratulated Putin on his recent reelection, ignoring notes from aides that warned “DO NOT CONGRATULATE,” according to the Washington Post. Vershbow was U.S. ambassador to the Russian Federation from 2001-2005 after serving as U.S. ambassador to NATO from 1998-2001. “The president seems ready to sweep all of the difficult issues under the carpet, even the Russian military buildup that was displayed in that video with all these new ‘wonder weapons’ that Putin’s very excited about,” Vershbow said. Trump also warned Putin during the March phone call that the U.S. would win an arms race against Russia, Axios reported. “There may be some basis for limiting the arms race,” Vershbow said. “We could certainly use to deescalate the military side of the relationship, but solving problems like Ukraine, a more balanced approach to Syria, those are where I don’t see the Russians meeting us even halfway.”  Putin and Trump are holding a historic summit in Helsinki on Monday. Trump said they will discuss issues such as trade, arms control and China. The U.S. president previously said he would bring up Russia’s support of Syrian leader Bashar al-Assad and Russia’s military actions in the Ukraine, but his ultimate goals remain unclear. Trump on Sunday said he has “low expectations.”

John Brennan: Trump’s Press Conference an Impeachable Offense, ‘Treasonous’ ‘It was nothing short of treasonous’

The Obama Administration’s CIA director, John Brennan, charged that President Trump’s post-summit press conference with Russia President Vladimir Putin was an act of treason.

“Donald Trump’s press performance in Helsinki rises to & exceeds the threshold of ‘high crimes and misdemeanors,'” Brennan tweeted. “It was nothing short of treasonous. Not only were Trump’s comments imbecilic, he is wholly in the pocket of Putin. Republican Patriots: Where are you???”

Moments after tweeting, Brennan appeared on MSNBC and demanded Trump cabinet officials resign in protest.

Here’s a transcript of his exchange with Brian Williams:

WILLIAMS: “We just read what you said on Twitter. Your reaction to what you’ve just seen?”
BRENNAN: “Well, Brian, I thought that there was nothing Donald Trump could say that would shock me, but I was wrong. I was just totally shocked at the performance of Donald Trump in Helsinki at a press conference with Vladimir Putin. I just found that it was outrageous. And even when the press — and thank goodness the press asked the right questions — even when the press gave him an opportunity to hold Russia accountable for anything, he chose to talk about Hillary Clinton, about his election, about servers. He criticized American citizens, Secretary Clinton and others as opposed to really taking advantage of a world stage, with all the world’s eyes upon them, to point out how unacceptable Russia’s behavior and interference in our election and the elections of other democratic countries around the globe is. But he just shirked those responsibilities. I cannot understand how the national security team can continue to abide by this and how Pompeo and Bolton and Kelly can continue in their jobs. This, I think, rises to the point of good American patriots resigning in objection to that performance by Donald Trump. I’m at a loss of words to describe just how outrageous his words, his statements, his behavior has been. And one can only conclude that he fears Vladimir Putin. And that one-on-one discussion, who knows what was discussed there. And how Mr. Putin now is the master puppeteer of Donald Trump, the person who is in our Oval Office. Outrageous.”
WILLIAMS: “I just saw a picture of Huntsman and Pompeo while the President was speaking, looking a bit stricken. But to your point about patriots, to your point about resignations, what do you think the practical impact, just say by the end of business today, tomorrow, will be?”
BRENNAN: “I don’t know. That’s why I said in my tweet Republican patriots all over the country, including in the Congress, where are you? When are you going to speak out and roundly condemn what Donald Trump is doing? And all of those good Americans who voted for Mr. Trump believing that he was going to protect this country, I think you have now his demonstrated unwillingness, maybe inability, to protect this country’s interests. I think this is a time for all Americans to rally and to say, ‘Mr. Trump, you are not doing what is necessary in order to keep this country strong and safe.’ And Mr. Putin must be now, with his team, just rejoicing in what has happened in Helsinki.”

In the past, Brennan has likened America under Trump to passing a “large and painful kidney stone.” Addressing his frequently hyperbolic tweets against President Trump, Brennan has said he has a “responsibility as an American citizen to speak up.”

Trump resists Mueller interview, leaving decision on subpoena before fall elections

WASHINGTON — After months of negotiations could not secure an interview with President Donald Trump, special counsel Robert Mueller warned the president’s lawyers in March that he could use a grand jury subpoena if necessary to compel his testimony. That prompted a furious response from John M. Dowd, the president’s lead attorney at the time. “I told him, in no uncertain terms, if that’s the route he took, he’d have a war on his hands,” Dowd said. Tump’s team has increasingly signaled that he will not voluntarily answer questions as the special counsel investigates Russian meddling in the 2016 election, whether the Trump campaign colluded with the Kremlin, and if Trump subsequently obstructed the investigation. That may give Mueller little choice but to seek a subpoena if he deems Trump’s testimony critical. But getting one this summer almost certainly would spark a court battle with the president’s lawyers before the November midterm elections, a prospect Mueller might want to avoid. The impasse represents a defining juncture for a federal investigation that has clouded the Trump White House from its first day and led to criminal charges against 32 people since October, including 12 Russian intelligence officers indicted Friday on charges of hacking files of Hillary Clinton’s presidential campaign, Democratic Party organizations and state election offices in 2016. While Mueller has avoided the media, Trump’s rage has grown, with near-daily Twitter broadsides against what he calls a “rigged witch hunt.” Trump will meet Monday in Finland with Russian President Vladimir Putin, who denies the meddling even though U.S. intelligence agencies said he ordered the operation. Rudy Giuliani, who replaced Dowd, has become the president’s most vocal defender. On July 8, the former New York City mayor said on a TV talk show that Trump would meet with Mueller only if the special counsel could show a “factual basis for the investigation,” a hardening of the White House position. Legal experts questioned Giuliani’s attempts to set conditions for an interview with Trump.

“That’s nonsense. It’s actually nonsense on stilts,” said Paul Rosenzweig, who worked with the independent counsel’s office that investigated President Bill Clinton in the 1990s and is now a senior fellow at the nonpartisan R Street Institute in Washington.

The only grounds required for obtaining a grand jury subpoena, Rosenzweig said, is whether a witness may have evidence germane to the investigation. Some former prosecutors and other lawyers say they are puzzled that Mueller has not sought a subpoena to bolster his hand in securing Trump’s testimony. “We’ve passed the point where a sensible prosecutor, even with the president, would have said, ‘OK, enough. Here’s your subpoena. See you in court,”’ said Harry Litman, a University of California law professor and former U.S. attorney in Pittsburgh who was appointed by Clinton. “I would never second-guess Mueller. But I’m a little surprised he didn’t start proceedings on a subpoena.”

Britain, Ecuador in ‘High-Level’ Talks to Evict Julian Assange from Embassy

Julian Assange, the founder of the self-described “not-for-profit media organization WikiLeaks,” is facing the possibility of being evicted from Ecuador’s London embassy.
British judge upholds arrest warrant for Julian Assange
The Associated Press

British and Ecuadoran officials are in “high-level” talks to decide the fate of Assange, who has been living in the embassy for over six years. Ministers and senior Foreign Office officials are locked in discussions over the fate of Assange, the founder and editor of WikiLeaks, who claimed political asylum from Ecuador in 2012 and who believes he will be extradited to the United States if he leaves the embassy in Knightsbridge, central London. Sir Alan Duncan, the Foreign Office minister, is understood to be involved in the diplomatic effort, which comes weeks before a visit to the UK by Lenin Moreno, the new Ecuadorean president, who has called Assange a “hacker”, an “inherited problem” and a “stone in the shoe”. Ecuadorian President Rafael Correa granted Assange political asylum in August 2012 after the Australian hacker was accused of committing a series of sex crimes during a 2010 visit to Sweden. The WikiLeaks founder has long held the Obama White House ginned up the allegations in a bid to tarnish his reputation. Speaking to reporters from the balcony’s Ecuador London embassy in 2012, Assange called on U.S. authorities to halt its investigation into WikiLeaks. “I ask President Obama to do the right thing. The United States must renounce its witch hunt against WikiLeaks,” said Assange. “The United States must dissolve its FBI investigation. The United States must vow that it will not seek to prosecute our staff or our supporters.” Embassy staffers in March cut off Assange’s internet access and revoked permission to receive visitors. In a statement issued by the government of Ecuador, officials say the crackdown came in response to Assange breaking “a written commitment made to the government at the end of 2017 not to issue messages that might interfere with other states.” Ecuador further alleged the social media habits of the WikiLeaks founder “put at risk the good relations [Ecuador] maintains with the United Kingdom, with the other states of the European Union, and with other nations.”

Reports of the high-level talks over Assange’s fate follow the indictment of 12 Russian intelligence officers for hacking offenses during the 2016 presidential election.

The Justice Department said Friday the Kremlin-backed operatives infiltrated the computer systems of the Democratic National Committee and Hillary Clinton’s failed presidential campaign. As part of the cyber attack, emails of Clinton campaign staffers were infamously published by WikiLeaks in the months leading up to the election.

DHS secretary: Russia continues to view US elections as a target of cyberattacks

DHS chief seems to disagree on Putin backing Trump

(CNN)The head of the Department of Homeland Security warned state officials on Saturday that the threat from Russia targeting US elections has not dissipated. Speaking at the summer conference of the National Association of Secretaries of State in Philadelphia on Saturday, Homeland Security Secretary Kirstjen Nielsen said the US intelligence community does “consistently observe malicious cyber activity from various actors against US election infrastructure,” according to prepared remarks released by the department. “There is little doubt that adversaries and non-state actors continue to view elections as a target for cyber and influence operations,” Nielsen told the state officials, who are responsible for administering elections. Still, she said, there are “no indications that Russia is targeting the 2018 US midterms at a scale or scope to match their activities in 2016.” Nielsen said the intelligence community has also observed “persistent Russian efforts using social media, sympathetic spokespeople, and other fronts to sow discord and divisiveness amongst the American people — though not necessarily focused on specific politicians or political campaigns.” Nielsen’s remarks come a day after the Justice Department announced indictments against 12 Russian military intelligence agents as part of special counsel Robert Mueller’s investigation of Russian interference in the 2016 election, accusing them of engaging in a “sustained effort” to hack Democrats’ emails and computer networks. “Yesterday’s indictments against the Russian intelligence officers are a demonstration that we will not tolerate interference with our democratic processes and that there will be consequences for foreign meddling,” Nielsen said. The Homeland Security secretary also asserted that “no votes were altered” by Russia’s actions in the 2016 election. The US intelligence community concluded in 2017 that Russia had meddled in the 2016 presidential election and that Russian President Vladimir Putin ordered an “influence campaign” aimed at helping Donald Trump and hurting Hillary Clinton’s campaign. Director of National Intelligence Dan Coats on Friday also warned against growing cyberattack threats against the United States, saying in a speech at the Hudson Institute in Washington, DC, that the situation is at a “critical point.” The US is “not yet seeing the kind of electoral interference in specific states and in voter databases that we experienced in 2016″ by the Kremlin,” Coats said. “However, we realize we are just one click of the keyboard away from a similar situation repeating itself,” he warned. Homeland Security and top intelligence officials have been warning for some time now that Moscow is still a threat to the 2018 elections. “The 2018 midterms remain a potential target for Russian actors,” Christopher Krebs, the department’s top infrastructure and cybersecurity official, told the House Homeland Security Committee during a hearing Wednesday. But, like Coats and Nielsen, he said, “the intelligence community has yet to see any evidence of a robust campaign aimed at tampering with our election infrastructure along the lines of 2016 or influencing the makeup of House or Senate races.”

“I think the European Union is a foe,” Trump says ahead of Putin meeting in Helsinki

Coming off a contentious NATO summit and a trip to the U.K. in which he seemed to undercut the government of America’s closest ally, President Trump took aim at another Western institution just days before his high-stakes meeting with Russian President Vladimir Putin.  In an interview with “CBS Evening News” anchor Jeff Glor in Scotland on Saturday, President Trump named the European Union — comprising some of America’s oldest allies — when asked to identify his “biggest foe globally right now.”

“Well, I think we have a lot of foes. I think the European Union is a foe, what they do to us in trade. Now, you wouldn’t think of the European Union, but they’re a foe.

Russia is foe in certain respects. China is a foe economically, certainly they are a foe. But that doesn’t mean they are bad. It doesn’t mean anything. It means that they are competitive,” Mr. Trump said at his golf club in Turnberry, Scotland.

“I respect the leaders of those countries. But, in a trade sense, they’ve really taken advantage of us and many of those countries are in NATO and they weren’t paying their bills,” he added.

On Sunday, British Prime Minister Theresa May told the BBC that Mr. Trump had encouraged her to “sue the EU” rather than negotiate over the U.K.’s departure from the bloc. May’s conservative government is deeply split over her handling of Brexit, and her hold on power was further weakened by Mr. Trump’s comments to a British tabloid that her approach had likely “killed” any chance of a new trade deal with the U.S. once Brexit is complete. (Mr. Trump tried to walk back his criticism in a joint press conference on Friday.)

At the summit of NATO allies in Brussels last week, Mr. Trump took a hard line toward member nations for failing to meet targeted defense spending goals. He claimed his tough stance had paid off in getting allies to spend more on defense, telling reporters on Thursday that members had “upped their commitments and I am very happy.” In the CBS News interview, Mr. Trump also continued to criticize the special counsel’s Russia investigation, saying it is having an impact on America’s standing in the world. “I think we’re greatly hampered by this whole witch hunt that’s going on in the United States,” the president said. “I think it hurts our relationship with Russia. I actually think it hurts our relationship with a lot of countries. I think it’s a disgrace what’s going on.”

US oil boom delivers surprise for traders — and it’s costly

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Getty Images

The world’s biggest oil traders are counting hefty losses after a surprise doubling in the price discount of U.S. light crude to benchmark Brent in just a month, as surging U.S production upends the market. Trading desks of oil major BP and merchants Vitol, Gunvor and Trafigura have recorded losses in the tens of millions of dollars each as a result of the “whipsaw” move when the spread reached more than $11.50 a barrel in June, insiders familiar with their performance told Reuters. The sources did not give precise figures for the losses, but they said they were enough for Gunvor and BP to fire at least one trader each. The companies declined to comment, and none of them publish details of their individual trading books.

It highlights the challenges of trading in WTI futures, the benchmark for U.S. crude, when U.S. pipeline and storage infrastructure struggles to keep pace with surging shale output, that has lifted the United States above Saudi Arabia to become the world’s second biggest crude producer behind Russia.

“As the exporter of U.S. crude, traders are naturally long WTI and hedge their bets by shorting Brent. When the spreads widen so wildly, you lose money,” said a top executive with one of the four trading firms. The discount of WTI to Brent hit $11.57 a barrel on June 6, the widest in more than three years, as U.S. output surged to record highs and surpassed pipeline capacity as traders rushed to export. The discount had been about $5 just a month before. Betting on the price spread, a popular trade in oil markets, is based on predictions of price differences between European and U.S. market fundamentals. The jump in U.S. output, now almost 11 million barrels per day (bpd) from below 5 million bpd a decade ago, has upended the spread. Until 2010, U.S. crude mostly traded at a premium to Brent. But the growing availability of U.S. crude has meant that it has almost always been at a discount since then. Traders have had to pay heavy premiums to exit U.S. storage leases as the oil price structure flipped to “backwardation”, when near-term prices are higher than those for later delivery, making it unprofitable to store crude. Climbing U.S. output has put strains on the pipeline network, particularly in the Permian basin in Texas which has been the biggest contributor to the production surge. A bottleneck that hit U.S. crude for delivery in Midland, Texas WTC-WTM caught BP off guard and led to losses when the discount to WTI shifted sharply during April to June, according to four market sources and one source close to BP. Three BP traders took the heat for losses related to the Midland rollercoaster. The source close to BP said one was sacked and two others were reshuffled internally. Nick Bit: as we told you before this is over with a lot of ASSHOLE oil traders will return to their rightful jobs.. BARTENDERS!

Trump-Putin summit: US leader has low expectations

Image copyright Reuters

US President Trump has said he has “low expectations” for his meeting with Russia’s Vladimir Putin in Finland on Monday. But he told CBS News that “nothing bad” and “maybe some good” would come out of the encounter. He also said he would raise the subject of 12 Russians indicted for alleged hacking during the 2016 US election – but “hadn’t thought” about asking for their extradition. Russia denies the allegations. There are no extradition arrangements between Russia and the US. There have been calls in the US for Mr Trump to cancel his meeting with Mr Putin over the indictments, announced on Friday by US Deputy Attorney General Rod Rosenstein. Russia has said it is looking forward to the talks as a vehicle for improving relations. He said he “believed in meetings” and said his meetings with the North Korean and Chinese leaders had been a “very good thing”. “I think it’s a good thing to meet. I do believe in meetings. I believe that having a meeting with Chairman Kim was a good thing. I think having meetings with the president of China was a very good thing. I believe it’s really good. So having meetings with Russia, China, North Korea, I believe in it. Nothing bad is going to come out of it, and maybe some good will come out,” he said. “I can’t tell you what’s going to happen, but I can tell you what I’ll be asking for. And we’ll see if something comes of it,” he added. Mr Trump also repeated his earlier criticism of the Obama administration, which was in power when the alleged hacking of Democratic party officials took place. “This was during the Obama administration. They were doing whatever it was during the Obama administration,” he said. He has since downplayed his Brexit comments – but speaking to the BBC on Sunday Mrs May said Mr Trump had advised her to “sue the EU”. He is expected to leave the UK later after staying at his Turnberry resort on Scotland’s Ayrshire coast during the private leg of his visit.

My deal is the only Brexit deal – wreck it at your peril: THERESA MAY’s steely warning to Tory rebels AND those bully boys from Brussels

Our Brexit deal for Britain seizes the moment to deliver the democratic decision of the British people and secure a bright new future for our country outside the European Union. It restores our national sovereignty, so that it is our Government that decides who comes into our country, our Parliaments that make our laws and our courts that enforce them. It puts an end to the vast membership subscriptions we pay to Brussels, delivering a Brexit dividend to support domestic priorities like our long-term plan for the NHS. It grasps the opportunities of an independent trade policy, freeing us to forge new trade deals with allies across the world – including America, where President Trump has made it clear he wants a trade deal and is now confident we will be able to do it. And it enables us to build the new economic and security partnerships we want to see with the European Union. Because Brexit isn’t about trading with other countries instead of trading with Europe, it is about doing both. Theresa May said: ‘This is the scale of the opportunity before us and my message to the country this weekend is simple: we need to keep our eyes on the prize. If we don’t, we risk ending up with no Brexit at all’ This is the scale of the opportunity before us and my message to the country this weekend is simple: we need to keep our eyes on the prize. If we don’t, we risk ending up with no Brexit at all. This is a time to be practical and pragmatic – backing our plan to get Britain out of the European Union on March 29 next year and delivering for the British people. I know there are some who have concerns about the ‘common rule book’ for goods and the customs arrangements which we have proposed will underpin the new UK-EU free trade area. I understand those concerns. But the legacy of Brexit cannot be a hard border between Northern Ireland and Ireland that unpicks the historic Belfast Agreement. It cannot be the breaking up of our precious United Kingdom with a border down the Irish Sea. And it cannot be the destruction of integrated supply chains and just-in-time processes on which jobs and livelihoods depend. This means we have to have friction-free movement of goods, avoiding the need for customs and regulatory checks between the UK and the EU. And this cannot happen if products have to go through different tests for different markets, or if customs declarations have to be made at the UK/EU border.

Trump Opens His Arms to Russia. His Administration Closes Its Fist.

President Trump in Brussels on Thursday.CreditDoug Mills/The New York Times

 

WASHINGTON — It was a jarring moment, even for an American leader whose curious attraction to Russia has often resulted in mixed messages from the United States. Just a few hours after President Trump doused expectations of extracting any confession from President Vladimir V. Putin on Russia’s election meddling when they meet on Monday, his own Justice Department issued a sweeping indictment of 12 Russian intelligence agents for hacking the Democratic National Committee and the Clinton presidential campaign. The bold move, precisely the kind that Mr. Trump has long resisted, demonstrated how he is almost wholly untethered from his administration when it comes to dealing with Moscow. Whether it is Russia’s interference in the election, its annexation of Crimea or its intervention in Syria, Mr. Trump’s statements either undercut, or flatly contradict, those of his lieutenants. The disconnect is so profound that it often seems Mr. Trump is pursuing one Russia policy, set on ushering in a gauzy new era of cooperation with Mr. Putin, while the rest of his administration is pursuing another, set on countering a revanchist power that the White House has labeled one of the greatest threats to American security and prosperity. As Mr. Trump prepares to meet with Mr. Putin in Finland, diplomats and former government officials said these contradictions would undermine both the president’s efforts to cultivate a relationship with Mr. Putin and his government’s efforts to halt Russia’s campaigns to damage American democratic institutions and bully its neighbors. “The president has hobbled his own executive branch, and the executive branch has hobbled its own president,” said Strobe Talbott, a Russia expert who served as deputy secretary of state in the Clinton administration and was president of the Brookings Institution. “It’s a three-legged race with the contestants going in opposite directions.”

NBC: U.S. Rejects European Plea for Exemptions From Iran Sanctions

Image: NBC: U.S. Rejects European Plea for Exemptions From Iran Sanctions
U.S. Secretary of State Mike Pompeo and President Donald Trump during a press conference at the 2018 NATO Summit in Brussels, Belgium on July 12. (Jaap Arriens/AP)

By Sandy Fitzgerald 

Meanwhile, Pompeo has planned an address on July 22, titled “Supporting Iranian Voices,” after posting a series of tweets endorsing Iranian protests.

Steve Bannon says: now is the moment for Boris Johnson to challenge UK PM May

 FILE PHOTO: White House Chief Strategist Stephen Bannon

LONDON (Reuters) – U.S. President Donald Trump’s former adviser Steve Bannon believes now is the time for Boris Johnson to challenge British Prime Minister Theresa May for her job, the Daily Telegraph newspaper reported on Saturday. Johnson, who led the main Brexit campaign in the 2016 referendum, resigned as foreign minister on Monday over May’s strategy which he said was killing the “Brexit dream” with self-doubt. “Theresa May has got a lot of great qualities – I am not sure if it is the right leader at the right time,” Bannon, Trump’s former strategist and a key player in his 2016 election campaign, was quoted by the Daily Telegraph as saying. May’s government was rattled by the departures of Johnson and her chief Brexit negotiator David Davis just days after she appeared to have gained the support of her cabinet for her strategy at a meeting at her Chequers country residence. Asked if now was the moment for Johnson to lead the country, Bannon, who was fired by the White House in August 2017, said: “I believe moments come. It is like Donald Trump… people dismissed him.” “Now is the moment,” The Telegraph quoted him as saying. “If Boris Johnson looks at this… There comes an inflection point, the Chequers deal was an inflection point, we will have to see what happens.”

Trump, in an interview with the Rupert Murdoch-owned Sun newspaper published just hours before he was due to have lunch with May, directly criticized May’s Brexit strategy and heaped praise on Johnson, saying he “would be a great Prime Minister.”

The U.S. president later said he hoped for a great trade deal with Britain after Brexit. On Friday The Telegraph said Johnson had re-joined the newspaper as a columnist with effect from Monday.

2018: Democrats lead GOP by 12 million registered voters, 40% D, 29% R, 28% I

Democrats hold a massive voter lead in states that require party registration, a gap of 12 million that could be key to whether the party takes control of the House and Senate in the fall midterm congressional elections, according to a new analysis. Overall, 40 percent of voters in 31 party registration states are Democrats, 29 percent are Republicans, and 28 percent are independents, according to a new report of July numbers from the University of Virginia’s Center for Politics. The states include several with key battles over House seats such as California, New York, Florida, and Pennsylvania. The lead is significant, said Rhodes Cook’s analysis in Center Director Larry Sabato’s “Crystal Ball” newsletter, because in the past presidential election the majority party in 24 of the 31 states won, especially among Republican states.

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Of note, some of the states with registered Democrat advantages, like Louisiana, Kentucky, and West Virginia, have been functionally Republican at the presidential level for at least 15 years, said Kyle Kondik, the managing editor of the Crystal Ball. That could be good news for the Republicans in the upcoming election, a sign that just being majority Democrat does not mean voters are in lock step, said the report which highlighted the growth of independent voters. But it also noted that as the nation becomes more partisan, declaring party membership is an affirmative political stand. “With the growth in independents, many voters seem to be saying to the two major parties: ‘a pox on both your houses,’” wrote Cook. “Yet it also can be argued that registering Democratic or Republican is far more of a statement than it once was. In the current age of sharp-edged partisanship, there is far more than a ‘dime’s worth of difference’ between the two major parties, so registering as a Democrat or Republican is a very intentional act of differentiation,” added the report.

Mueller team pushing for information on Roger Stone, WikiLeaks, sources say

PHOTO: Special Counsel Robert Mueller departs Capitol Hill following a closed door meeting in Washington, June 21, 2017.
Andrew Harnik/AP, FILE Special Counsel Robert Mueller departs Capitol Hill following a closed door meeting in Washington, June 21, 201

At least seven people associated with longtime Trump friend Roger Stone have been contacted by special counsel Robert Mueller, according to interviews with witnesses and others who say they’ve been contacted.

 Mueller appears to still be aggressively pursuing evidence that would tell him whether associates of president Trump colluded with Russia.

Mueller’s team appears increasingly focused on whether any associates of Trump knew that the Russian government had hacked emails from the DNC and Democratic candidate Hillary Clinton’s campaign chairman John Podesta and provided them to Wikileaks during the last presidential election, according to those sources. A self-described “dirty trickster” in American politics, Stone has taken credit for persuading President Trump to get into politics. He initially served as an adviser to Trump’s 2016 campaign but left amid controversy in 2015. While Trump told the Washington Post at the time that he “terminated Roger Stone…because he no longer serves a useful function for my campaign,” Stone told a different story, explaining on Twitter their falling out was about political messaging. Stone has been under scrutiny in part because of statements in August of 2016 which political opponents allege suggested he knew that Wikileaks was going to leak damaging information on Clinton before it was released. Stone has been targeted because he communicated with Guccifer, the hacker the U.S. intelligence community believes broke into DNC computers, sources told ABC News. In recent weeks, the special counsel has reached out to political humorist and radio show host Randy Credico, who Stone allegedly asked to act as an intermediary with Wikileaks founder Julian Assange to confirm that the Wikileaks publisher had a cache of information on Clinton.Credico – who has known Assange personally for years – has interviewed Assange several times on the radio and visited him multiple times in the Ecuadorian embassy in London, where Assange has lived for the last six years after the country granted him asylum in 2012.

Feds Collect Record Individual Income Taxes Through June; Still Run $607B Deficit

House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell (Screen Capture)(CNSNews.com) –

The federal government collected a record $1,305,490,000,000 in individual income taxes through the first nine months of fiscal 2018 (October 2017 through June 2018), according to the Monthly Treasury Statement released today. Despite the record individual income tax collections, the federal government still ran a deficit of $607,099,000,000 over those same nine months, according to the Treasury statement. The approximately $1,305,490,000,000 in individual income taxes that the Treasury collected in October through June of this fiscal year was $71,815,310,000 more (in constant June 2018 dollars) than the $1,233,674,690,000 (in constant June 2018 dollars) in individual income taxes that the Treasury collected in October through June of fiscal 2017—which was the previous record.

Although the federal government collected record individual income taxes in the first nine months of this fiscal year, overall federal tax collections were lower in the first nine months of this fiscal year than they were in any of the previous five fiscal years—including 2013, 2014, 2015, 2016 and 2017. In October through June of this fiscal year, the Treasury collected $2,540,804,000,000 in total taxes. That was down $39,029,250,000 from the $2,579,833,250,000 in total taxes the Treasury collected in the first nine months of fiscal 2017. Corporation income tax collections have also been declining in this fiscal year. In the first nine months of fiscal 2018, the Treasury collected $161,708,000,000 in corporation income. That is $67,964,050,000 less (in constant June 2018 dollars) than the $229,672,050,000 in corporation income taxes (in constant June 2018 dollars) that the Treasury collected in the first eight months of fiscal 2017. The federal government ran a deficit of $607,099,000,000 during the first nine months of fiscal 2018, because while collecting its $2,540,804,000,000 in total taxes, it spent $3,147,903,000,000. The $2,540,804,000,000 in total tax collections through June included the record $1,305,490,000,000 in individual income taxes; the $161,708,000,000 in corporation income taxes; $847,062,000,000 in social insurance and retirement payroll taxes; $36,998,000,000 in unemployment insurance taxes; $3,312,000,000 in other retirement taxes; $63,039,000,000 in excise taxes, $16,978,000,000 in estate and gift taxes, $28,318,000,000 in customs duties; and $77,899,000,000 in miscellaneous receipts. Including the current month of July, there are three more months in this fiscal year. Tax amounts were put in constant June 2018 dollars using the Bureau of Labor Statistics inflation calculator.

China’s record trade surplus with U.S. risks further inflaming trade tensions

 

BEIJING (Reuters) – China’s trade surplus with the United States swelled to a record in June as its overall exports remained solid, a result that could further inflame a bitter trade dispute with Washington. The data came after the administration of U.S. President Donald Trump raised the stakes in its trade row with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports, including numerous consumer items. China’s trade surplus with the United States, which is at the center of the tariff tussle, widened to a record monthly high of $28.97 billion, up from $24.58 billion in May, according to Reuters calculations based on official data going back to 2008. Trump, who has demanded Beijing cut the trade surplus, could use the latest result to further ratchet up pressure on China after both sides last week imposed tit-for-tat tariffs on $34 billion of each other’s goods. Washington has warned it may ultimately impose tariffs on more than $500 billion worth of Chinese goods – nearly the total amount of U.S. imports from China last year. The dispute has jolted global financial markets, raising worries a full-scale trade war could derail the world economy. Chinese stocks fell into bear market territory and the yuan currency has skidded, though there have been signs in recent days its central bank is moving to slow the currency’s declines. China’s June exports rose 11.3 percent from a year earlier, China General Administration of Customs reported, beating forecasts for a 10 percent increase according to the latest Reuters poll of 39 analysts, and down from a 12.6 percent gain in May. China’s exports to the United States rose 13.6 percent in the first half of 2018 from a year earlier, while its imports from the U.S. rose 11.8 percent in the same period. Separate data showed Chinese shipments to U.S. ports rose more than expected in June, suggesting some retailers moved up orders to insulate themselves from the intensifying trade war that threatens to send up costs on a growing number of consumer products. Investors fear a prolonged trade battle with the United States could harm business confidence and investment, disrupting global supply chains and harming growth in China and the rest of the world. Separate customs data on Friday showed imports of commodities from soybeans to crude oil eased compared with a year ago, but China’s steel mills and aluminum smelters sold much more abroad spurred by higher international prices amid growing concerns about slowing demand growth.

Trump: Brexit plan ‘will probably kill’ US trade deal

Mays greet Trumps for UK black-tie dinner

Donald Trump has said the UK will “probably not” get a trade deal with the US, if the prime minister’s Brexit plan goes ahead. He told The Sun the PM’s plan would “probably kill the deal” as it would mean the US “would be dealing with the European Union” instead of with the UK. Downing Street has not yet reacted to Mr Trump’s remarks. Theresa May has been making the case for a US free trade deal with Mr Trump, on his first UK visit as president. She said Brexit was an “opportunity” to create growth in the UK and US.

Mr Trump also said that former Foreign Secretary Boris Johnson would make a “great prime minister”, adding “I think he’s got what it takes”.

In his interview, he renewed his criticism of London Mayor Sadiq Khan over last year’s terror attacks in the capital, saying he had done “a terrible job”. Mr Trump told The Sun newspaper that the UK’s blueprint for its post-Brexit relations with the EU was “a much different deal than the people voted on”. He said the Brexit proposals Mrs May and her cabinet thrashed out at Chequers last week “will definitely affect trade with the United States, unfortunately in a negative way”. “We have enough difficulty with the European Union,” he said, adding that Mrs May’s plan “would probably end a major trade relationship with the United States.” He also said he had told Mrs May how to do a Brexit deal, but: “She didn’t agree, she didn’t listen to me.” “I told her how to do it. That will be up to her to say. But I told her how to do it. She wanted to go a different route,” he said. The US president also said he was “cracking down” on the EU because “they have not treated the United States fairly on trading”.

Trump says Iran will seek fresh deal as looming sanctions weigh on economy

U.S. President Donald Trump arrives to hold a news conference after participating in the NATO Summit in Brussels, Belgium July 12, 2018. REUTERS/Reinhard Krause

BRUSSELS (Reuters) – U.S. President Donald Trump said Iran’s economic troubles were going to force it to seek a security deal with Washington following his withdrawal from a nuclear pact. In May the United States pulled out of a multinational deal to lift sanctions against Iran in return for curbs to its nuclear program. Washington has since told countries they must halt all imports of Iranian oil from Nov. 4 or face U.S. financial measures. This may cut Iran’s hard currency earnings from oil exports, and the prospect has triggered a panicked flight of Iranians’ savings from the rial into dollars, weighing on an already ailing local currency, hit by economic woes and financial difficulties at local banks. Speaking to a news conference at a NATO leaders summit in Brussels, Trump said Iran was treating the U.S. with ‘so much more respect’ following the move and he expected Tehran to reach out for a fresh deal. “I know they’re having a lot of problems and their economy is collapsing. But I will tell you this: at a certain point they’re going to call me they’re going to say ‘Let’s make a deal’. They’re feeling a lot of pain right now.” European powers still support the 2015 deal, under which Tehran agreed to limit its nuclear development in exchange for international sanctions relief. They say they will do more to encourage their businesses to remain engaged with Iran, though a number of firms have already said they plan to pull out as they also face sanctions following Trump’s decision.

Trump dishes up fresh dose of chaos aimed at May, Londoners

By JONATHAN LEMIRE and JILL COLVIN
BLENHEIM PALACE, England (AP) — Dishing up a fresh dose of chaos on his European tour, President Donald Trump left behind a contentious NATO gathering in Brussels and moved on to Britain, where a pomp-filled welcome ceremony was soon overshadowed by an interview in which Trump blasted Prime Minister Theresa May, blamed London’s mayor for terror attacks against the city and argued that Europe was “losing its culture” because of immigration. Trump, in an interview with The Sun newspaper, said he felt unwelcome in London because of protests, including plans to fly a giant balloon over Parliament on Friday that depicts him as an angry baby in a diaper. “I guess when they put out blimps to make me feel unwelcome, no reason for me to go to London,” he said.

Trump, in the interview given before he left Brussels for the U.K., accused May of ruining what her country stands to gain from the Brexit vote to leave the European Union. He said her former foreign secretary, Boris Johnson, would make an “excellent” prime minister, speaking just days after Johnson resigned his position in protest over May’s Brexit plans.Trump added that May’s “soft” blueprint for the U.K.’s future dealings with the EU would probably “kill” any future trade deals with the United States. President Trump says the US commitment to NATO is very strong and that other nations are increasing their financial contributions. (July 12) “If they do a deal like that, we would be dealing with the European Union instead of dealing with the U.K., so it will probably kill the deal,” Trump told the paper.Trump, who has compared his own election to the June 2016 referendum in which a majority of British voters supported leaving the EU, complained, “The deal she is striking is a much different deal than the one the people voted on.” He also told the tabloid that he’d shared advice with May during Britain’s negotiations with the EU and she ignored it. As for Johnson, Trump said: “I think he would be a great prime minister. I think he’s got what it takes.” He added, “I think he is a great representative for your country. The mood was far less jovial in Belgium earlier in the day. During his 28 hours there, Trump had disparaged longtime NATO allies, cast doubt on his commitment to the mutual-defense organization and sent the 29-member pact into a frenzied emergency session.

Then, in a head-snapping pivot at the end, he declared the alliance a “fine-tuned machine” that had acceded to his demands to speed up increases in military spending to relieve pressure on the U.S. budget. But there was little evidence other leaders had bowed to his wishes on that front.

Trump claimed member nations had agreed to boost their defense budgets significantly and reaffirmed — after days of griping that the U.S. was being taken advantage of by its allies — that the U.S. remains faithful to the accord.

Neither Trump nor NATO offered specifics on what Trump said he had achieved. French President Emmanuel Macron quickly disputed Trump’s claim that NATO allies had agreed to boost defense spending beyond their existing goal of 2 percent of gross domestic product by 2024.

“There is a communique that was published yesterday; it’s very detailed,” Macron said. “It confirms the goal of 2 percent by 2024. That’s all.”

John McCain blasts Trump’s NATO performance and warns that ‘Putin is America’s enemy’

Sen. John McCain, R-Ariz.
Tom Williams | CQ Roll Call | Getty Images Sen. John McCain, R-Ariz.

Sen. John McCain, R-Ariz., Thursday sharply criticized President Donald Trump’s appearance this week at the North Atlantic Treaty Organization summit, calling it “disappointing, yet ultimately unsurprising.” McCain, who is chairman of the Senate Armed Services Committee, also urged the president to take a tough stance in an upcoming meeting with Russian President Vladimir Putin.

Trump stunned America’s European allies with a caustic warning that he would “go it alone” unless NATO members sharply boosted defense spending. After an emergency meeting,

Trump claimed a personal victory at having pressured allies to make big increases in defense outlays. French President Emmanuel Macron, however, rejected Trump’s claim that NATO agreed to spending increases. McCain, a frequent critic of the Republican president, also blasted Trump for his criticism of Germany. Trump had accused Germany of being “captive” to Russia, citing a deal to build a natural gas pipeline. “There is little use in parsing the president’s misstatements and bluster, except to say that they are the words of one man,” McCain said in a statement. “Americans, and their Congress, still believe in the transatlantic alliance and [NATO], and it is clear that our allies still believe in us as well.” After the contentious meeting with the leaders of NATO countries, Trump declared his continued commitment to the Western alliance that was formed after World War II. “I let them know that I was extremely unhappy,” the president said, but added that the meeting ended on good terms: “It all came together at the end. It was a little tough for a little while.”Following the NATO summit, Trump traveled to the United Kingdom and is scheduled to meet Putin on Monday in Helsinki. McCain, who is away from the Senate as he battles brain cancer, also said Trump’s meeting with Putin will be closely watched around the world. He urged Trump to be “strong and tough” with Putin, adding that Trump must “reverse his disturbing tendency to show America’s adversaries the deference and esteem that should be reserved for our closest allies.”

“Putin is America’s enemy,” McCain said, citing Russia’s invasion of the Ukraine and its efforts “to attack America’s election and to undermine democratic institutions throughout the world.”

The senator, himself a former presidential candidate, put it to Trump to stand up to the Russian leader. “It is up to President Trump to hold Putin accountable for his actions during the meeting in Helsinki,” McCain said. “Failure to do so would be a serious indictment of his stewardship of American leadership in the world.”

Prosecutors Drop Charges Against Stormy Daniels

Prosecutors in Columbus, Ohio moved to dismissed their case against adult film star Stormy Daniels, according to court documents shared by Daniels’ attorney Michael Avenatti.

According to the motion filed by the Columbus City Attorney’s office, there was no probable cause to move forward with the case against Daniels. She had been charged with three counts of violating statute 2907.40(C)(2) (also known as the Community Defense Act), which prohibits dancers from touching patrons. Daniels had been accused of touching police officers, including the breasts and buttocks of a female officer. Despite the allegations, prosecutors recognized a weakness in the case due to the wording of the statute. The law states that the prohibition against touching customers applies to a performer “who regularly appears nude or seminude on the premises.” The prosecution acknowledged in their motion that there is no evidence that Daniels regularly performs there, and thus, the charges should be dropped. Judge James P. O’Grady then signed an order which officially dismissed the case. “I want to thank Joe Gibson & his colleagues at the prosecutors [office] for their professionalism starting with our first call early this am,” Avenatti stated in a Twitter post sharing the news.

North Korea fails to attend talks on repatriation of US war dead

Image copyright Getty Images
Image caption An estimated 30,000 US soldiers died in the 1950-53 Korean war

North Korean officials have failed to turn up for talks with a US team on the repatriation of the remains of American soldiers killed in the Korean war. Returning the remains was a commitment from the 12 June summit between Kim Jong-un and Donald Trump in Singapore. The talks had been expected in the demilitarised zone on Thursday. Reports say North Korea is now asking for higher-level talks for Sunday. An estimated 30,000 US soldiers died in the 1950-53 Korean war. There are about 7,700 US soldiers classified as missing in action from the war. President Trump tweeted the translation of a letter he had received from Mr Kim, in which the North Korean leader said: “I deeply appreciate the energetic and extraordinary efforts made by Your Excellency Mr President.” Mr Trump said the letter from Mr Kim (dated 6 July), was “a very nice note”.

Last week, North Korea accused the US of using a “gangster-like” tactics to push it towards nuclear disarmament after a fresh round of high-level talks.  A statement, by an unnamed foreign ministry official, gave a starkly different account from one provided just hours before by US Secretary of State Mike Pompeo, who attended the talks. Mr Pompeo had said progress was made during his two-day visit to Pyongyang. In another development on Thursday, the US accused North Korea of violating a UN sanctions cap on refined oil products. In December, the UN Security Council limited such exports to North Korea at 500,000 barrels a year. Mr Kim had agreed during the summit with President Trump to recover “POW/MIA remains, including the immediate repatriation of those already identified”. The agreement reportedly covered the remains of some 200 American soldiers. The US military has since announced that 100 wooden coffins have been moved to the inter-Korean border in preparation. But North Korea’s delegation failed show up. Pyongyang has asked the UN Command Armistice Commission to upgrade the talks to a higher level to include a US general, South Korea’s foreign ministry said. North Korea proposed to reschedule the meeting for Sunday. The fact that North Korea seem to be dragging its feet on this issue fuels already growing doubts among President Trump’s critics about whether the Singapore summit was a success or simply a publicity stunt for Mr Kim, the BBC’s Cindy Sui in Seoul reports. There is speculation that North Korea may also want payment for the return of the remains, our correspondent adds.

Trump claims NATO victory after ultimatum to go it alone

BRUSSELS (Reuters) – Donald Trump gave an angry ultimatum to European allies on Thursday, warning a NATO summit the United States could withdraw its support and sparking crisis talks which the U.S. president said produced big new defense spending pledges. Other leaders, however, played down the extent to which they went beyond existing commitments to increase contributions to their own defense, as Trump demanded they share more of what he calls an unfair burden on U.S. taxpayers in funding an alliance focused on discouraging pressure from a resurgent Moscow.

In a closed-door meeting with NATO leaders, Trump said that if European governments did not spend more on defense, the United States “would have to look to go its own way”, according to one diplomatic source present in the room.

Trump delivered the line after what several sources said was an improvised rant focused on his grievances about transatlantic ties, but appeared to hesitate before issuing his ultimatum, which led to some confusion about what he really meant. The early morning drama was part of two days of diplomatic theater in Brussels, as allies tried to shield a post-war world order from his “America first” demands. A month after he walked out of a G7 economic summit amid rows about new U.S. tariffs that have provoked fears of global trade war, Trump was already at the center of a storm from the start of the NATO summit on Wednesday. He accused German Chancellor Angela Merkel of being beholden to Moscow due to energy imports, while letting Americans pay for protecting Germany from Russia. In a characteristically freewheeling news conference at NATO headquarters, covering his impending visit to Britain, talks with Russian President Vladimir Putin on Monday, Iran, China, and his father and mother’s European roots, Trump also returned to a favored theme. He linked calls for higher defense spending to complaints about Germany’s trade surplus and renewed a threat to raise tariffs on EU-made cars if trade terms do not change. For many of those present, Trump’s demands that they move closer to the 3.6 percent of GDP Washington spends on the world’s most powerful military make little sense. “Even if we had the money, what would spend it on?” one NATO diplomat said. “In the case of Germany, a lot of European countries would be very uncomfortable with that level of spending,” the diplomat added — a nod to the World War Two aggression that was to lead to NATO’s creation. “It would be armed to the teeth.”

Oil steadies despite IEA warning of spare capacity limits

NEW YORK (Reuters) – Oil prices steadied on Thursday, after the International Energy Agency’s (IEA) warned that the world’s oil supply cushion “might be stretched to the limit” due to production losses in several different countries

The market largely shrugged off warnings from the IEA that there a potential spare capacity crunch looms.

“Rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the expense of the world’s spare capacity cushion, which might be stretched to the limit,” the Paris-based agency said in its monthly report. Several countries have seen their output fall in recent weeks, including Venezuela, long in crisis, Norway, Canada and Libya. “This vulnerability currently underpins oil prices and seems likely to continue doing so,” the IEA added. Wednesday’s sharp selloff was galvanized by worries over rising trade tensions between the United States and China and news that Libya had brought some production back online. The declines have not spurred buyers to return yet, after traders sold speculative positions on Wednesday. After U.S. crude briefly traded above $71 a barrel, traders exited positions, leading the market lower to test below $70 a barrel, he said. Libya’s National Oil Corp said it would reopen four oil export terminals, ending a standoff that had shut down most of Libya’s oil output; the reopening will bring back up to 850,000 barrels per day of crude production. The market also brushed off bullish data from information provider Genscape, which reported that inventories at the Cushing, Oklahoma, delivery hub had fallen 929,399 barrels from July 6 to July 10, traders said. Supply to the U.S. market has also been squeezed by the loss of some Canadian oil production. The pullback has not yet derailed the possibility that Brent will recover to above $80 a barrel by the end of the year, said Brian LaRose, a senior technical analyst at ICAP-TA. If Brent pulls to below $70 a barrel, there is less of a chance that the market will recover as quickly, he said.

Migrants describe hunger and solitary confinement at for-profit detention center

(CNN)The 40-year-old mother found herself in solitary confinement, locked in a cell behind a steel door for 23 hours a day, according to her legal filing and attorney.The woman, identified in court documents only by the initials R.M., was taken into custody in May while crossing the border illegally to seek asylum. She was separated from her teenage daughter. Now, she’s being held at a privately run immigrant detention facility — effectively, a prison — known as the Northwest Detention Center in Tacoma, Washington. The facility, which US Immigration and Customs Enforcement said held 1,495 detainees as of June 30, sits within a toxic sludge field and EPA Superfund site where residential construction has been barred. It has been the target of more than a dozen hunger strikes in recent years, each involving from a dozen to hundreds of detainees, over complaints of inadequate food and medical care, among other issues. Its operator, Florida-based The GEO Group, is fighting two lawsuits in Washington over alleged labor-law violations for a dollar-a-day migrant detainee work program it calls voluntary. And the center has in recent years faced one of the highest number of complaints about alleged physical and sexual assaults against detainees of any facility of its kind in the nation, according to US Immigration and Customs Enforcement data obtained through public records requests by the advocacy group Freedom for Immigrants. GEO Group declined CNN’s requests for an interview. In emailed responses, spokesman Pablo Paez defended the company’s record in detaining immigrants and said it complies with “performance-based standards set by the Federal government” and accreditation guidelines. “Our employees are proud of our record in managing the Tacoma ICE Processing Center with high-quality, culturally responsive services in a safe, secure, and humane environment,” Paez said. “Members of our team strive to treat all of those entrusted to our care with compassion, dignity, and respect.”

The Trump administration’s aggressive immigration enforcement strategy has been a financial boon for GEO Group, which along with its affiliates contributed more than half a million dollars to then-candidate Donald Trump’s 2016 campaign and his inaugural committee, according to Federal Election Commission data.
And GEO Group is not alone. The private-prison industry as a whole is benefiting from Trump’s border policies. But those lucrative business opportunities are also drawing increased public and legal scrutiny to a system that, advocates say, treats detainees cruelly. And, thanks to the hunger strikes and a grass-roots protest campaign, the public spotlight is now falling on the Northwest Detention Center.

An asylum-seeker in quarantine

The detention center opened in 2004. In 2008, a report by the Seattle University School of Law and human rights group OneAmerica, based on dozens of interviews with detainees, alleged frequent misconduct by guards, including physical and verbal abuse and sexual harassment. It described outbreaks of food poisoning, including one in 2007 that sickened more than 300 people; it said detainees often had to wait as long as two weeks to receive medical care; it detailed servings of food so paltry that 80% of detainees said they were hungry after every meal. It also described the food as sometimes rotten or bug-infested. One man who weighed 190 pounds when he entered the center lost 50 pounds over two years in detention, the report said. ICE, at the time, disputed the report. A spokeswoman told the Seattle Times it was “filled with inaccuracies and vague allegations.” The center has been subject to more complaints alleging sexual and physical assaults against detainees than all but three of the more than 200 Immigration and Customs Enforcement facilities around the country, according to a review of ICE data from 2012 through 2016, by nonprofit Freedom for Immigrants. And for four years, detainees there have engaged in one hunger strike after another, despite what they describe as ongoing retaliation by GEO Group and ICE.

TSA screeners win immunity from abuse claims: appeals court

By Jonathan Stempel ReutersJuly

(Reuters) – Fliers may have a tough time recovering damages for invasive screenings at U.S. airport security checkpoints, after a federal appeals court on Wednesday said screeners are immune from claims under a federal law governing assaults, false arrests and other abuses. In a 2-1 vote, the 3rd U.S. Circuit Court of Appeals in Philadelphia said Transportation Security Administration (TSA) screeners were not “investigative or law enforcement officers,” and were therefore shielded from liability under the Federal Tort Claims Act (FTCA). The majority said it was “sympathetic” to concerns that its decision would leave fliers with “very limited legal redress” for alleged mistreatment by aggressive or overzealous screeners, which adds to the ordinary stresses of air travel. “For most people, TSA screenings are an unavoidable feature of flying,” but it is “squarely in the realm” of Congress to expand liability for abuses, Circuit Judge Cheryl Ann Krause wrote. The FTCA generally affords the government sovereign immunity when employees commit intentional torts, a type of civil wrong. Wednesday’s decision was the first by a federal appeals court on whether a waiver of immunity for investigative and law enforcement officers extended to screeners. It was a defeat for Nadine Pellegrino, a business consultant from Boca Raton, Florida. She and her husband had sued for false arrest, false imprisonment and malicious prosecution over a July 2006 altercation at Philadelphia International Airport. Pellegrino, who represented herself, said she was reviewing the decision. U.S. Attorney William McSwain in Philadelphia, whose office defended TSA screeners, said the decision reflected Congress’ desire to balance the government’s sovereign immunity and “duty to protect taxpayer dollars” against the need to provide remedies for some plaintiffs.According to court papers, Pellegrino had been randomly selected for additional screening at the Philadelphia airport before boarding a US Airways flight to Fort Lauderdale, Florida. Pellegrino, then 57, objected to the invasiveness of the screening, but conditions deteriorated and she was eventually jailed for about 18 hours and criminally charged, the papers show. She was acquitted at a March 2008 trial. Circuit Judge Thomas Ambro dissented from Wednesday’s decision, faulting the majority for barring victims of TSA abuses from recoveries “by analogizing TSA searches to routine administrative inspections.” Last August, the same court threw out a First Amendment claim by an architect, Roger Vanderklok, who said he was arrested in retaliation for asking to file a complaint against an ill-tempered TSA supervisor. The case is Pellegrino et al v U.S. Transportation Security Administration et al, 3rd U.S. Circuit Court of Appeals, No. 15-3047.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)

Mark Mobius warns that the trade war is a prelude to the next financial crisis

Bloomberg News/Landov
Mark Mobius, executive chairman of Templeton Emerging Markets Group

‘There’s no question we’ll see a financial crisis sooner or later because we must remember we’re coming off from a period of cheap money. There’s going to be a real squeeze for many of these companies that depended upon cheap money to keep on going.’

That’s the latest warning issued by veteran investor Mark Mobius, who told Bloomberg in an interview Wednesday that the worst may be yet to come in the wake of Trump’s latest round of tariffs on Chinese goods. And what does he mean by “worst?” Mobius is looking for another 10% drop in emerging-market stocks and, ultimately, a financial meltdown at home and abroad. He says tensions between the U.S. and China will increase with Trump unlikely to suffer much backlash from his tariffs. The inflationary impact, Mobius explains, will be matched by rising wages at a time when unemployment is low. The good news for bulls is that the 81-year-old investor, who left Franklin Templeton Investments earlier this year to start his own company, predicts the damage to markets will eventually prove to be a buying opportunity for savvy investors and he’s currently raising funds to take advantage when the time comes.

The US is running out of Chinese exports to tax

The United States could soon run out of Chinese goods to tax if a trade war continues to escalate.

On Tuesday, it released a 195-page list of Chinese exports worth $200 billion facing a 10% tariff. The move came after China retaliated Friday against US tariffs on $34 billion worth of goods by taxing American exports to the same value. US tariffs on a further $16 billion of Chinese exports are coming soon, taking the total under threat to $250 billion. President Donald Trump has threatened to go much further — possibly targeting as much as $550 billion. But that number exceeds the total value of Chinese goods imported by the United States last year ($506 billion) and there are signs that US officials are already beginning to struggle to compile new lists of targets.

20180706-China-US-trade-chart-NEW

Tuesday’s list includes live trout, which hasn’t been imported from China for decades, as Bloomberg first noted, as well as obscure items such as badger hair. It also includes more recognizable exports, such as soy sauce and rice. They’re among thousands of things that could soon get more expensive to import from China Here are more of the Chinese goods in the firing line this time.

Food

Fruit

china canned peaches
A worker sorting canned peaches for export at a factory in Xiayi in China’s central Henan province.

— Apples
— Bananas
— Coconuts
— Pineapples
— Oranges
— Pears
— Peaches

Grains, nuts and beans

China is hitting the US where it hurts: soybeans

— Oats
— Corn (Maize)
— Rice (semi-milled or wholly milled)
— Brown and Basmati rice
— Corn and potato starch
— Peanuts, almonds, walnuts, and chestnuts
— Pistachios
— Soybeans

Seafood

china dried seafood export
Workers sort dried seafood for export at a factory in Lianyungang in China’s eastern Jiangsu province on July 5.

— Trout, salmon, yellowfin tuna, cod and seabass (excluding fillets or other meat portions)
— Anchovies
— Lobsters, crabs and squid
— Shark fins
— Shrimp and prawns
— Caviar
— Frozen salmon fillets
— Dried fish

Meat

— Frozen pork
— Frog legs
— Pork, other than hams, shoulders, bellies (streaky) and cuts thereof, salted, in brine, dried or smoked

Crude oil benchmark Brent sees biggest one-day fall in two years

NEW YORK (Reuters) – Global benchmark Brent crude oil had its biggest one-day drop in two years on Wednesday as escalating U.S.-China trade tensions threatened to hurt oil demand, and news that Libya would reopen its ports raised expectations of growing supply. Brent crude LCOc1 fell $5.46, or 6.9 percent, to settle at $73.40 a barrel. The decline was the largest one-day move on a percentage basis since Feb. 9, 2016. U.S. crude CLc1 fell $3.73, or 5 percent, to $70.38 a barrel. The sell-off began early in the session after Libya’s National Oil Company said it would reopen ports which had been closed since late June. “The headline on Libya was merely the trigger,” said John Saucer, a vice president at advisory firm Mobius Risk Group in Houston, Texas. The sell-off intensified after news of a fall in U.S. crude oil inventories failed to reverse market sentiment. “The scope of today’s sell-off is unequivocally a speculative washout,” said Saucer. Hedge funds and other money managers with bullish wagers appeared to pare long positions, pulling back from long positions added as crude approached three and a half year highs last month, Saucer said. The selling pressure intensified as trade tensions between the U.S. and China raised concerns about demand. The specter of tariffs on a further $200 billion of Chinese goods sent commodities lower, along with stock markets, as tension between the world’s biggest economies intensified. “Escalating trade tensions between the U.S. and China has prompted risk aversion in today’s trading session, which is evident in oil prices,” said Abhishek Kumar, senior energy analyst at Interfax Energy in London. Crude oil prices also fell as the U.S. dollar rose on Wednesday’s surprisingly strong U.S. inflation report, which increased prospects that the Federal Reserve will raise interest rates twice more this year. A stronger dollar can weaken dollar-denominated commodities, like crude. The dollar index .DXY, which measures the currency against a basket of six rivals, was up 0.7 percent over the day to a high of 94.702. “Trade concerns have bitten today,” said Michael McCarthy, chief markets strategist at CMC Markets. “If these tariffs are introduced, there will be an impact on global growth and demand.” China is a top buyer of U.S. crude, and has said it could tax U.S. oil if trade tensions escalate. Tripoli-based Libya National Oil Corp said on Wednesday four export terminals were being reopened after eastern factions handed over the ports, ending a standoff that had shut down most of Libya’s oil output. Libyan oil production has fallen to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February following port closures in late June, the NOC said on Monday. “Libyan relief changes the conversation about spare capacity,” said John Kilduff, a partner at Again Capital Management. Concerns about a lack of spare capacity had led crude to rally. Prospects of a relaxation of U.S. sanctions on crude exports from Iran, the world’s fifth-biggest oil producer, has helped push up oil prices in recent weeks, with both crude contracts trading near 3-1/2-year highs until Wednesday. U.S. Secretary of State Mike Pompeo said on Tuesday that Washington would consider requests from some countries to be exempt from sanctions due to go into effect in November to prevent Iran from exporting oil. Washington had previously said countries must halt all imports of Iranian oil from Nov. 4 or face U.S. financial restrictions, with no exemptions. The market shrugged off bullish U.S. government data showing crude stockpiles slumped by nearly 13 million barrels last week, the biggest slide in nearly two years. [EIA/S] USOILC=ECI. Supply to the U.S. market has also been squeezed by the loss of some Canadian oil production. “In spite of the extraordinary draw in crude oil inventories, the market is under pressure after refiners produced a record amount of gasoline this week and in conjunction with a greater than expected build in distillate inventories,” said Andrew Lipow, president at Lipow Oil Associates in Houston.

Trump tells NATO leaders to increase defence spend to 4 percent

BRUSSELS (Reuters) – U.S. President Donald Trump told NATO leaders on Wednesday they should increase their defence spending to 4 percent of their country’s economic output, double the group’s current goal of two percent. NATO allies shrugged off the demand as part and parcel of Trump’s brash push for allies to spend more on their own defence at a summit in Brussels, with a quip from the alliance’s chief that it should aim to meet its goal before reaching further. “We should first get to 2 percent,” NATO Secretary-General Jens Stoltenberg, adding that eight of the 29 allies were meeting that target, while others had a plan to do – turning a leaf on years of defence budget cuts. Striking a strident tone at the summit, Trump’s aspirational target of 4 percent of gross domestic product (GDP) was above the United States own spending on defence.

The United States, the world’s biggest military power, spent some 3.57 percent on defence last year, according to NATO figures. A White House spokeswoman said his remarks came as he was urging leaders to increase their outlays on defence and were not a formal proposal. “He suggested that countries not only meet their commitment of 2 percent of their GDP on defence spending, but that they increase it to 4 percent,” Sarah Sanders told reporters. “Trump wants to see our allies share more of the burden and at a very minimum meet their already stated obligations.” A source close to French President Emmanuel Macron also played down Trump’s words as rhetoric, saying “it is not a new demand.”

Trump attacks NATO at NATO summit, abruptly demands allies dramatically increase military spending

“What good is NATO,” the president asked.
(Photo Credit: Sean Gallup/Getty Images)
(Photo Credit: Sean Gallup/Getty Images)

Hours after opening the NATO summit with an unhinged attack against Germany, the White House followed up with an abrupt request for NATO member nations to double their defense spending target from the current 2 to 4 percent.

The White House’s request comes as NATO members work to follow through on a pledge they made in 2014 to increase the proportion of GDP they spend on defense to 2 percent. Most all of them are on track to make it, yet Trump has railed against countries — particularly Germany — for not spending enough on their militaries anyway.

Shortly after the White House confirmed that they’re asking NATO members to double the amount they spend on defense, Trump attacked NATO live from the NATO summit. The president demanded member nations increase their military spending to 2 percent “IMMEDIATELY, not by 2025 [sic].”

Trump’s tweet reveals a profound confusion about the purpose of NATO. Though the president seems to think the organization is about the American military protecting Europe from Russia, it is in fact a military alliance between 29 countries. Since it was founded in 1949, the only time the NATO treaty’s collective defense article was invoked was following the September 11, 2001 attacks on the United States. From now until 2024, member nations contribute to the alliance according to their capabilities — there is no firm commitment for specific contribution amounts. Trump, however, seems to falsely believe the United States is owed “reimbursements” from NATO members like Germany who are still in the process of ramping up their spending.

While Trump repeatedly attacks NATO — in addition to his rant on Tuesday, he’s posted four separate tweets attacking the alliance since Monday morning — Secretary of State Mike Pompeo seems to be living in a make-believe world where Trump is getting along swimmingly with other members of the alliance.

Pompeo isn’t the only Trump supporters living in a fantasy. After Trump told reporters on Tuesday that his upcoming summit with Russia President Vladimir Putin “may be the easiest” meeting he has during his trip to Europe, Sen. Cory Gardner (R-CO) resorted to pretending that the president actually meant the exact opposite of what he said. “No,” Gardner said on Fox News, after he was asked if he thought what Trump said about Putin was true. “I think the president knows that’s not true as well.”

Wall Street drops on escalating U.S.-China trade war

(Reuters) – U.S. stocks slid on Wednesday, led by industrial shares, after Washington’s threat to impose tariffs on an additional $200 billion worth of Chinese goods raised fears of an escalating trade war. U.S. officials on Tuesday issued a list of thousands of Chinese imports that the Trump administration wants to target with new tariffs. In response, China accused the United States of bullying and warned it would hit back. The biggest drags on the blue-chip Dow were Boeing, 3M, Caterpillar and Chevron. Their shares were down between 1.2 percent and 2 percent. Ten of the 11 major S&P 500 sectors were also lower. The S&P industrials sector tumbled 1.21 percent, making it the biggest decliner and drag on the benchmark S&P. “The market is primarily focused on the potential trade war. However, the fundamentals are just too strong to be shaken by geopolitical events,” said Kevin Miller, chief investment officer of asset management company E-Valuator Funds Miller said during the back and forth on tariffs between the United States and China, the Shanghai market has fallen 16 percent for the year, while the S&P 500 index is still up about 4 percent, indicating that U.S. markets were holding up much better. But Morgan Stanley told clients that the approaching U.S. earnings season could also trigger a new wave of risk aversion if firms start warning of slower earnings growth due to trade tariffs.semiconductor index .

Goldman Sachs says US furniture manufacturers Restoration Hardware, Williams-Sonoma could get hit in latest round of tariffs

Handbags on display in Macy's, New York City
Scott Mlyn | CNBC Handbags on display in Macy’s, New York Cit

Restoration Hardware, Williams-Sonoma and other U.S. furniture manufacturers that import sofas, tables and other goods from China could take a hit in the Trump administration’s latest round of tariffs released Tuesday, according to Goldman Sachs. The White House on Tuesday released a list of tariffs on $200 billion in imports that could hit U.S. manufacturers that make a lot of their goods in China. It targets a litany of industries with a 10 percent tariff, including China’s seafood, agriculture, commodity and textile markets as well as consumer goods like furniture, handbags and appliances. Manufacturers are facing reduced profits or passing the higher prices on to consumers, analysts led by Matthew Fassler said in a research note published Wednesday. China supplies 65 percent of furniture imported into the U.S. and the tariffs cover all furniture imported from China, roughly $28 billion worth, Goldman estimated, adding that analysts originally expected just $11 billion of furniture imports would make the list. Restoration Hardware, which is based in Corte Madera, California, imports 77 percent of its volume by dollars from Asia — with China accounting for a majority of those imports, Goldman said. The company’s profit margins will suffer if it can’t raise prices, according to the note. The list spared apparel and footwear entirely, while Goldman originally anticipated tariffs on $24 billion of imports. Handbags, however, were not. Goldman said Michael Kors and Tapestry, which sells Coach and Kate Spade bags, may be particularly vulnerable. Michael Kors produces “mainly in China,” Goldman said. Tapestry’s production is less clear. Goldman said the company has previously disclosed that “manufacturers are located in many countries,” including China. Because the handbag market is consolidated and manufacturers have pricing power, Goldman expects that the cost of tariffs will be passed down to consumers. Over time, purse makers could shift their manufacturing elsewhere because they have some flexibility in their supply chains. Tools, tires, small appliances, sporting goods and HVAC will see modest impacts as a result of the tariffs, but Goldman does not anticipate any meaningful effects. “The impact on covered retailers will ultimately depend on their ability to pass through pricing increases or divert sourcing to other markets,” Goldman Sachs analysts said in a note on Wednesday. Goldman’s economists believe that companies might be less motivated to disrupt their supply chains to avoid the tariff because it is only 10 percent. The most likely result then is “some combination of passing through and digesting the impact to margins.” The list of proposed tariffs, which are expected to take effect around September, could be revised after public review.

Consumer credit growth accelerates sharply in May

Consumer borrowing increases $24.6 billion, double economists’ forecast and the fastest pace in six months

Getty Images A shopper walking in the Union Square district in San Francisco.

The numbers: Consumer borrowing picked up in May, according to the Federal Reserve on Monday. Total consumer credit increased $24.6 billion in May to a seasonally adjusted $3.9 trillion. That’s an annual growth rate of 7.6%, which is the fastest pace of credit growth since November. Economists has been expecting a $12.4 billion gain, according to Econoday. Credit grew a revised $10.3 billion in April, up from the prior estimate of $9.3 billion.

What happened: Revolving credit, like credit cards, surged in May, rising by 11.4% after a 1.3% gain in April. This is the biggest increase since November. Meanwhile, nonrevolving credit, typically auto and student loans, rose 6.3% in May, up from 3.9% in the prior month. The data does not include mortgages.

Big picture: Much of the acceleration in economic growth in April-June quarter is due to consumer spending “snapping out of its brief first quarter funk,” said Michael Feroli, chief U.S. economist at JP Morgan Chase. And now it looks like consumers are using their credit cards to fuel that spending.

Angela Merkel hits back at Donald Trump at Nato summit

Germany makes independent decisions, chancellor says in response to claim it is controlled by Russia

Angela Merkel has pushed back against Donald Trump’s extraordinary tirade against Germany on the first day of the Nato summit in Brussels, denying her country was “totally controlled” by Russia and saying it made its own independent decisions and policies. In less blunt language than the US president’s, the German chancellor made the point that she needed no lessons in dealing with authoritarian regimes, recalling she had been brought up in East Germany when it had been part of the Soviet Union’s sphere of influence. Arriving at Nato headquarters only hours after Trump singled out Germany for criticism, Merkel said: “I have experienced myself how a part of Germany was controlled by the Soviet Union. I am very happy that today we are united in freedom, the Federal Republic of Germany. Because of that we can say that we can make our independent policies and make independent decisions. That is very good, especially for people in eastern Germany   She also hit back at Trump’s criticism that Germany contributed too little to European defence. “Germany does a lot for Nato,” she said. “Germany is the second largest provider of troops, the largest part of our military capacity is offered to Nato and until today we have a strong engagement towards Afghanistan. In that we also defend the interests of the United States.” Earlier the US president had accused Berlin of being a “a captive of the Russians” because of its dependence on energy supplies. “We are protecting Germany, we are protecting France, we are protecting all of these countries and then numerous of the countries go out and make a pipeline deal with Russia where they are paying billions of dollars into the coffers of Russia. I think that is very inappropriate.” He added: “It should never have been allowed to happen. Germany is totally controlled by Russia because they will be getting 60-70% of their energy from Russia and a new pipeline. Merkel has been one of the most outspoken critics of Trump among European leaders. The two clashed at the G7 summit in Canada last month. That summit ended in disarray and a spat between Trump and Justin Trudeau, the Canadian prime minister. Nato officials are clinging to hopes that the Nato summit will not end the same way.

Trump slams Germany at NATO summit: It’s ‘totally controlled by Russia’

   Germany is 'totally controlled' by Russia, Trump says

President Donald Trump launched a scathing attack on German support for one of Europe’s most contentious energy developments Wednesday, saying Germany is “totally controlled” by Russia. Speaking in Brussels, Belgium on the first leg of his European trip, the U.S. president said a flurry of oil and gas deals had given Moscow far too much influence over the continent’s largest economy. In particular, he singled out the Nord Stream 2 gas pipeline project as being especially “inappropriate.” “Germany is totally controlled by Russia … They will be getting between 60 and 70 percent of their energy from Russia and a new pipeline, and you tell me if that is appropriate because I think it’s not,” Trump said, before criticizing Berlin’s failure to significantly increase defense spending. Trump was speaking at a press conference Wednesday morning in front of NATO representatives ahead of a two-day summit. “I think it is a very bad thing for NATO and I don’t think it should have happened and I think we have to talk to Germany about it. On top of that, Germany is just paying a little bit over 1 percent (on defense) … And I think that is inappropriate also,” he added. The Nord Stream 2 gas pipeline is an $11 billion project directly connecting Germany with Russia. Critics argue that the pipeline — which is to be laid under the Baltic Sea — will increase Europe’s dependence on Russian gas. A number of other EU states have also flagged national security concerns. Nonetheless, German Chancellor Angela Merkel has previously expressed support for the project and insisted it is a private commercial venture. Trump has long criticized Berlin and other NATO allies for “freeriding” on Washington’s defense capabilities. Currently only five of NATO’s 29 member states actually allocate the 2 percent of their gross domestic product (GDP) to military spending that they are formally committed to as part of the alliance. Those five are the U.S., the U.K., Greece, Estonia and Poland. The U.S. president frequently laments Germany’s trade surplus with the U.S., and has threatened to slap tariffs on German cars, which would strike at the heart of the country’s export-led economy. Trump has already enacted sweeping steel and aluminum tariffs on all exporters to the U.S., including the EU, which had been temporarily exempt. “What Trump is saying is ‘I can’t control Russia, unless I can control Germany pumping money into Russia.’ That says to me that the attitude of Trump’s administration in terms of tariffs towards Germany, which means autos, is going to be really tough.”

Trump heads into high-stakes summits with NATO and Putin at odds with his own ambassadors

Russia's warning of 'chaos' to international relations a 'threat': US ambassador to NATO
Speaking to reporters Thursday, Hutchison said the “major overall theme of this summit is going to be NATO’s strength and unity.” Within hours, Trump contradicted her

President Donald Trump’s ambassador to Russia, Jon Huntsman, last week ticked off a laundry list of bad acts for which he said Russia must be held accountable when Trump and Russian President Vladimir Putin meet on July 16 in Helsinki. “Election meddling; malign activities throughout Europe, including the Balkans, UK and Brexit, France and Italy, just to mention a few,” Huntsman said on a call with reporters. He also cited hybrid warfare, a military strategy which combines conventional tactics with coordinated political interference and cyberattacks. Less than 24 hours after Huntsman took a hard line, Trump did the opposite. “Putin is fine. He’s fine. We’re all fine, we’re all people,” Trump said at a political rally in Great Falls, Mont., on Thursday night. “Getting along with Russia, and getting along with China and getting along with other countries is a good thing.” For any ambassador, the task of advancing U.S. interests in a foreign country is often a tricky balancing act. But for Huntsman and Kay Bailey Hutchison, the two ambassadors who will serve as Trump’s right hands during high-stakes summits this week in Helsinki and Brussels, this challenge will be extraordinary. “It really hangs the ambassadors out to dry when the president creates a completely unpredictable setting,” said a former U.S. envoy who requested anonymity to discuss sensitive relationships.

“When this happens, the ambassador comes across as cut off from his or her capital, and they seem weak and ineffective. As a result, they have less leverage, and by extension the United States has less leverage, with the host country governments,” the former diplomat said. Before he meets with Putin next week, Trump will attend a NATO summit starting Wednesday in Brussels. His top envoy will be Hutchison, a former U.S. senator from Texas who is now the U.S. permanent representative to the transatlantic military alliance. NATO has been a cornerstone of global peace and security for nearly 70 years. But Trump has zeroed in on what he calls unfair burden sharing, given that some NATO allies haven’t met agreed upon defense-spending levels. Russia’s warning of ‘chaos’ to international relations a ‘threat’: US ambassador to NATO   European Union countries “kill us with NATO. They kill us,” Trump said during the same Montana rally where he said Putin was “just fine.” Eschewing any notions of “strength and unity,” Trump said his time in Brussels would be spent delivering a message to NATO allies: “‘You have to start paying your bills.’ The United States is not going to take care of everything.” In spite of Trump’s heated rhetoric, Hutchison on Friday again emphasized the United States’ commitment to NATO in a tweet. “NATO membership is more than a defense agreement. It is an ironclad commitment to North American & European security that unites us in peace, democracy, & common values,” she wrote. And two days later, on Sunday, Hutchison pulled no punches in describing Russia’s negative impact on global security. “We are seeing Russia with maligned activities on so many fronts right now,” she said on CBS’ Face the Nation. “Especially the hybrid area where they are, through social media, sowing discontent and even false information to try to divide our allies and take them away from the West,” she said. Hutchison also brought up the March poisoning of a Russian double agent in England with a potent chemical weapon, and accused the Kremlin of “supporting a Syrian dictator who is using chemical weapons on his own people to kill even children.” She added: “And it’s just on and on and on … there are so many areas where [Russians] are working against the interests of freedom and democracies and peace in the world.” By effectively ignoring Trump’s more provocative statements, experts said Hutchison was employing one of the few options available to Trump’s diplomats: Carry on as if Trump were a typical president saying typical things, even when he’s not. “Basically, it’s framing policy ideas as if the disruptive effect of Trump were not omnipresent,” said Andrew Weiss, a Russia expert at the Carnegie Endowment for International Peace and former director for Russian, Ukrainian, and Eurasian Affairs on the National Security Council staff under President Barack Obama. This strategy, however, risks highlighting the gulf between Trump’s agenda and those of his predecessors. “The system is doing what the system does, planning a summit, laying out the agenda. But that method doesn’t turn out well with this president,” said the former high-level envoy who spoke on condition of anonymity. “It almost seems like these ambassadors are planning summits for a president we don’t have.” Another option available to Trump’s diplomats is to try and smooth over Trump’s comments, by suggesting that the differences between what Trump says and what has been U.S. policy for decades is merely a question of semantics. Trump’s “own way” of talking about Russia’s destabilizing activities, however, is often to downplay them and sometimes even to defend Putin’s actions, or to repeat his false denials. In November, Trump said he believed Putin’s denial that Russia had waged a massive influence campaign and cyberwar against Hillary Clinton, Trump’s Democratic opponent in the 2016 presidential election.

Trump has also privately suggested he backs Russian’s claim to Crimea, the region of eastern Ukraine illegally annexed by Russia in 2014. This claim is strongly refuted by the United States and the international community. But Trump reportedly told his fellow G-7 leaders in May that Crimea “is Russian,” because people there speak Russian.

A month after the G-7 meeting, Trump again repeated the Kremlin’s denial that it interfered in the 2016 presidential election. “Russia continues to say they had nothing to do with Meddling in our Election!” Trump tweeted on June 28, before questioning why more attention wasn’t being paid to Clinton’s dealings with Russia. Regardless of what Trump’s diplomats say in public, “the Russians can smell what’s on the president’s mind,” said Weiss, of the Carnegie Endowment. “And that is acting like Russia is a normal country, and we can just turn the page on everything Russia has done since 2014, and the total breakdown of the U.S.-Russia relationship.”

For the Kremlin, he added, Trump’s approach is tantamount to “a huge coup. They didn’t have to trade anything for it.” But according to Weiss, this friendly approach carries serious risks for the United Tuesday morning, he seemed more relaxed about his summit with Putin than he was about the rest of his

Trump suggests NATO members reimburse US for defense costs

Trump suggests NATO members reimburse US for defense costs
© Getty Images

President Trump on Tuesday suggested countries that haven’t made their full contributions to fund NATO should reimburse the U.S., further stoking his feud with members of the alliance as he travels to Brussels to meet with NATO leaders.”Many countries in NATO, which we are expected to defend, are not only short of their current commitment of 2% (which is low), but are also delinquent for many years in payments that have not been made. Will they reimburse the U.S.?” Trump tweeted.

The president sent the tweet as he traveled on Air Force One to Belgium, where he will take part in the annual NATO summit with other world leaders that is scheduled for Wednesday and Thursday. Trump has long been critical of what he views as the U.S. taking on a disproportionate burden in funding NATO, but he has ratcheted up those complaints in the days leading up to the summit. NATO members agreed in 2014 to move toward spending at least 2 percent of their respective gross domestic product on defense by 2024. Trump reportedly wrote to German Chancellor Angela Merkel and other NATO allies last month to chastise them for failing to live up to their spending obligations. He further warned that the U.S. could alter its military deployments if nothing changes. On Tuesday morning, just before he was set to depart for Brussels, Trump tweeted that the funding burden was unfair to American taxpayers, adding that other countries should pay more and the U.S. should pay less for NATO. Trump went on to tell reporters on the White House lawn that he believes he’ll be able to “work something out” with other member countries. “NATO has not treated us fairly but I think we’ll work something out. We pay far too much and they pay far too little,” Trump said. “But we will work it out and all countries will be happy.”

U.S. job quits rate hits 17-year high; labor market tightening

I Quit

WASHINGTON (Reuters) – More American workers voluntarily quit their jobs in May, government data showed on Tuesday, a sign of confidence in the labor market that economists say will soon boost wage growth. In its monthly Job Openings and Labor Turnover Survey, or JOLTS, the Labor Department said the number of workers leaving jobs of their own free will increased 212,000 to 3.3 million. That lifted the quits rate one-tenth of a percentage point to 2.4 percent, the highest since April 2001. The rise in the quits rate, which policymakers and economists view as a measure of job market confidence, bolsters expectations that wage gains will accelerate this year. “Workers can hope to get the best bump in wages when they switch jobs,” said Sophia Koropeckyj, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “As workers seek to improve their lot by taking better positions they open up positions for others to climb up as well.” Wage inflation has remained moderate despite tightening labor market conditions. Annual wage growth as measured by average hourly earnings has struggled to break 3 percent, increasing 2.7 percent in June. Workers voluntarily quitting their jobs in May were concentrated in the health care and social assistance, finance and insurance, utilities, transportation and warehousing industries. The JOLTS report also showed there were 6.6 million unfilled jobs at the end of May, down from the record 6.8 million vacancies reported in April. Job openings remain elevated and continue to suggest a shortage of skilled workers, with the labor market seen as being either near or at full employment. “The decline in job openings appears to be related to stronger hiring, but it may also reflect businesses lowering their hiring standards,” said John Ryding, chief economist at RDQ Economics in New York. An NFIB survey published on Tuesday showed small businesses reporting the shortage of qualified workers as the main problem affecting their operations in June. The Labor Department also said it had identified errors in the JOLTS data for the federal government from January 2011 to April 2018. It said these data had been “suppressed” from the database and would be reissued.

Oil mixed on supply disruptions; chance of Iran sanctions waivers

FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, U.S., May 3, 2017. REUTERS/Ernest Scheyder/File Photo
 

NEW YORK (Reuters) – Oil prices were mixed on Tuesday, as price gains on supply concerns in Norway and Libya were tempered by the United States’ indication that it would consider requests for waivers from Iranian oil sanctions. Brent crude futures LCOc1 gained 48 cents to $78.55 per barrel by 1:45 p.m. EDT (1745 GMT). Earlier, the global benchmark hit a session high of $79.51. U.S. crude futures CLc1 were down 7 cents at $73.78, after hitting a high of $74.70. Earlier in the session, prices had been within striking distance of the four-year highs, said Bob Yawger, director of energy futures at Mizuho. Prices retreated after U.S. Secretary of State Mike Pompeo said that the United States would consider requests from some countries to be exempted from sanctions on Iranian oil that it will put in effect in November “That basically took the wind out of the sails from the market,” said Phil Flynn, analyst at Price Futures Group in Chicago. “But it isn’t unlike anything that they’ve said before. But it all depends on which countries they’re talking about. Is it big buyers of Iranian crude? Is it India?…Is it temporary waivers?” Last month, the United States said it wanted to reduce oil exports of fifth-biggest producer Iran to zero by November. Still, Brent was buoyed by a strike by hundreds of workers on Norwegian offshore oil and gas rigs, leading to the shutdown of one Shell-operated oilfield. Also bullish to prices was plummeting production in Libya, where output has halved to 527,000 barrels per day in five months. “Working in the opposite direction of the Norwegian oil workers strike and the geopolitical situation” was the update on the Syncrude oil sands facility, said Yawger at Mizuho. On Monday, Suncor Energy said its 360,000 bpd Syncrude facility would resume some production in July, earlier than expected, following an outage last month that disrupted total output and sent U.S. prices higher. The updated timeline has muted U.S. price gains and widened the difference between the two benchmarks, said Yawger. U.S. prices were also under some pressure ahead of inventory reports, said Bill Baruch, president of Blue Line Futures in Chicago. The American Petroleum Institute is scheduled to release its inventory data for last week at 4:30 p.m. EDT on Tuesday. Meanwhile, the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and allies including Russia are increasing output to offset global production losses. But there is growing concern that if Saudi Arabia offsets Iranian losses, it will use up global spare capacity and leave markets vulnerable to further or unexpected production declines.

Reuters Graphic

$152,237,500,000: Merchandise Trade Deficit With China Hit Record Through May

President Donald Trump and Chinese President Xi Jinping (Screen Capture)

(CNSNews.com) – The U.S. merchandise trade deficit with China set a record through May, hitting $152,237,500,000 for the first five months of 2018, according to data released Friday by the Census Bureau. From January through May, the Census Bureau reports, the United States exported $52,902,300,000 in goods to China while importing $205,139,800,000 in good from China. That means the dollar value of the goods the U.S. has bought from China so far this year is 3.87 times greater than the dollar value of the goods China has bought from the United States. Before this year, the largest merchandise trade deficit with China in the first five months of the year was in 2015, when it hit $148,499,390,000 in constant May 2018 dollars (adjusted using the Bureau of Labor Statistics inflation calculator).

The month-by-month U.S.-China merchandise trade numbers going back to 1985 are posted on the Census Bureau’s website

According to the Census Bureau, the last month that the U.S. ran a merchandise trade surplus with China was April 1986. That month, the U.S. exported $318,900,000 to China, imported $264,900,000 from China—and ran a monthly surplus of $54,000,000. In the 385 straight months since then, the U.S. has run a merchandise trade deficit with China. In 1985, the first year the U.S.-China trade balance is reported by the Census Bureau on its website, the U.S. ran a $445,030,000 merchandise trade deficit in January through May (in constant May 2018 dollars). The 2018 January-through-May U.S. China trade deficit of $152,237,500,000 is about 342 times that. Through all of 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).

The top products the U.S. exported to China were civilian aircraft, engines, equipment and parts ($16,264,533,000); soybeans ($12,258,835,000); passenger cars, new and used ($10,211,268,000); semiconductors ($6,076,509,000); industrial machines, other ($5,447,303,000); crude oil ($4,400,921,000); plastic materials ($4,002,797,000); medicinal equipment ($3,453,343,000); pulpwood and woodpulp ($3,359,165,000); and logs and lumber ($3,177,402,000).

 

Technical charts point to S&P 2,800 — and then a pullback

Using Elliott Wave theory to decide where the S&P will peak

With the S&P 500 holding support this past week, the market broke out through resistance and seems to have begun its next rally toward 2,800. But the bigger question still looming before us is how much higher can this rally take us? For years, we have had our sights set on the index exceeding the 3,000 region before it completes all of wave 3 off the 2009 lows. The question the market will have to answer over the next two months is whether we will top just over 3,000 or if we can set up to extend to the 3,225 region by the middle of next year. For those who have followed our work, you know we are tracking two bullish potentials at this time. They are presented in yellow and in green on these 60-minute charts of the iShares Russell 2000 ETF IWM, -0.92% and the S&P. The yellow count suggests that we are rallying now to complete wave (i) of wave (5) of wave 3 off the 2009 lows. This would have us expect a larger-degree pullback into the latter part of this summer for yellow wave (ii). Should this structure develop into the end of the summer, it would suggest the market will project to the higher 3,225 SPX target, and likely take us into the middle of 2019. However, if the market takes the more immediate green-count path, it suggests we are now within wave (iii) of an ending diagonal in the SPX, whereas the IWM presents as a standard impulsive wave structure. But, it would potentially top the S&P at the lower end of our long-term target zone for that index, a move that could even occur before the end of 2018.

So, this week, as long as we don’t see a major S&P reversal below 2,730, my expectation is that we can rally back up toward the 2,800 region to complete the a-wave of this rally off the 2,700 support region. But, overall, it would seem that August will likely usher in a pullback, the extent of which will give us strong indications as to how high and how long this current rally will take us before the 20%-30% correction we expect in 2019 will begin.

Sell tech! Morgan Stanley’s warning to investors

The tech sector has been mostly spared from the stormy financial weather of 2018. But deepening trade tensions could soon bring turbulence to Silicon Valley.

Despite volatility in global markets, the Nasdaq is near a record high, sporting a robust 12% gain on the year. Netflix (NFLX) has more than doubled and other tech darlings like Adobe  and Amazon) are booming. But Morgan Stanley is warning that an emerging trade war will probably rain on the tech parade. The investment bank urged clients in a report published Sunday to sell the tech sector, downgrading the space to “underweight.” “These stocks have rarely, if ever, been so over-loved and over-owned,” wrote Michael Wilson, Morgan Stanley’s chief US equity strategist. “The risk of a proper rain storm in this zip code increases significantly” because of escalating trade tensions that could hurt corporate profits, he wrote. Morgan Stanley has been outspoken about dangers lurking on Wall Street. Wilson repeated his call for isolated financial storms that hit various corners of the market. He’s dubbed it a “rolling bear market.” That call has been mostly right so far. While the Dow and S&P 500 are little changed this year, the ride got seriously bumpy during the past six months. The Dow plunged by 1,000 points twice. Inflation fears sent Treasury rates spiking. Crude oil prices surged. And President Trump’s crackdown on trade — and retaliatory tariffs from trading partners — have repeatedly spooked investors. In Europe, a political crisis in Italy briefly sparked financial chaos. Emerging markets have also been in turmoil. Chinese stocks collapsed into a bear market. The Argentine peso crashed to a record low against the US dollar, leading the country to reach a $50 billion bailout from the IMF.  Although tech stocks fell after Facebook’s data scandal, the industry — and Facebook ) shares — quickly recovered. In fact, Facebook hit an all-time high Monday and Mark Zuckerberg became the third-richest person on the planet. Meanwhile, the Nasdaq is less than 1% away from breaking its own record. But Wilson said “rolling bear markets aren’t over until they touch every last corner, with the highest-quality areas eventually taken out to the woodshed.” He noted that the financial storms of 2014-2016 didn’t end until they finally hit the vaunted tech space in early 2016. “We think the risk is rising that US tech and growth stocks will get wet,” he wrote.

nasdaq ytd stock chart

The US has started ‘the biggest trade war’ in historyOf course, Wall Street doesn’t seem overly worried. One reason for the upbeat mood: trade fears have knocked down Treasury rates, which had been one of Wall Street’s biggest headaches. The 10-year Treasury yield has descended to just 2.85% and hasn’t hit the dreaded 3% level since mid-May. The calmer action in the bond market “buffers stock prices” from uncertainty about how tariffs will hurt corporate profits, Nicholas Colas, co-founder of DataTrek Research, wrote in a report on Monday.The United States accelerated tensions with China on Friday by imposing tariffs on $34 billion worth of Chinese goods. Beijing quickly matched those tariffs. “Somebody had better blink soon because the risk of a recession caused by a widening trade war just increased significantly,” Ed Yardeni, president of investment advisory Yardeni Research, wrote to clients on Monday. Not even tech stocks are immune to a trade war.

If Trump’s tariffs sink China, be on high alert for the U.S. to follow suit

Heavy tariffs on China’s goods could lead to a credit implosion, followed by a recession. That would imperil the U.S.
Getty Images

As I watch the Shanghai Composite melt like spring snow, courtesy of the overdue trade tensions with the United States, I am beginning to see headlines about how President Trump’s policies could cause a global recession If this turns out to be an ugly trade war, in the style of the 1930 Smoot-Hawley Tariff Act, those headlines may very well turn out to be warranted. But in the case of China, I don’t believe Trump’s tariffs will be the cause of China’s recession. Instead, it will be its epic credit bubble that has now popped and is deflating, as evidenced by the $1 trillion of foreign-exchange outflows since 2014. To China, Trump’s tariffs are what Lehman Brothers’ failure was to the Wall Street Crash of 2008 — the catalyst to the crash. It has been rather amusing to hear many times that “if Lehman had been bailed out” (a course of action I was in favor of), “Wall Street would have not crashed.” While the sell-off would not have been as quick or as sharp with such a bailout, the sell-off in the U.S. stock market would have happened, and it likely would have had a similar magnitude, but over a couple of years instead of one.

In 2008, Lehman Brothers was a gigantic band-aid on the side of the U.S. financial system that then-Treasury Secretary Hank Paulson had the fortitude to pull off rather abruptly. In other words, Lehman Brothers’ failure was a catalyst, not a cause, of the humongous losses in the U.S. stock market, along with the worst financial crisis in 70 years.

However, it was the real estate bubble, inflated by the mortgage finance bubble, that caused the recession, specifically AAA-rated subprime mortgage collateralized debt obligations (CDOs), some of which went to zero!It very well may turn out that the Trump tariffs are the same band-aid whose expeditious removal will cause the air of the epic Chinese credit bubble to start going out faster. We should find out soon enough, by the end of 2018. the Great Depression in the U.S. in the 1930s and the Asian Crisis in 1997-1998. As the Chinese economic growth rate has dramatically slowed since 2010, total social financing has continued to surge Note that the authorities are now clamping down on rampant borrowing and the building of empty cities, of which there are several dozen (see this Business Insider post). Both developments can be seen in the significant decline in the rates of fixed-asset investment and outstanding yuan loan growth. Still, neither of those credit aggregates capture the shadow banking system, which remains very much in the shadowsu I am sure that the Chinese leadership is trying to think of what to do in the present situation — as if Sun Tzu himself were in their position — but I don’t believe that even the legendary general (were he alive today) could prevent a bad recession in China. Still, a massive devaluation cannot be ruled out if the trade war spins out of control, which will likely turn out to be deflationary for the global financial system.

Published: July 9, 2018 2:33 p.m. ET

Dominic Raab replaces David Davis as Brexit secretary

Image copyright AP Image caption Dominic Raab is a former chief of staff to Mr Davis

Dominic Raab has been appointed Brexit secretary by Theresa May after David Davis resigned from the government. Mr Raab, who is currently housing minister, was a prominent Leave campaigner during the 2016 referendum. Mr Davis quit late on Sunday night, saying Theresa May had “given away too much too easily”. The 44-year old Mr Raab, a lawyer before becoming an MP in 2010, will now take over day-to-day negotiations with the EU’s Michel Barnier. The UK is due to leave the European Union on 29 March 2019, but the two sides have yet to agree how trade will work between the UK and the EU afterwards. There have been differences within the Conservative Party over how far the UK should prioritise the economy by compromising on issues such as leaving the remit of the European Court of Justice and ending free movement of people What sticks out the most from my interview with David Davis this morning is a very simple question we asked. Is the prime minister’s plan really leaving the EU? “I don’t think so,” he said. That is the sentiment that’s widely shared among the Tory party, and perhaps among many voters too. And guess what? It doesn’t always matter which side of the referendum they were on either. Some former Remainers say “look, this is a dodgy compromise, what’s the point? If we are going to do this, then for goodness sake let’s do it properly or just stay in”. Mrs May’s Conservative Party only has a majority in Parliament with the support in key votes of the 10 MPs from Northern Ireland’s Democratic Unionist Party, so any split raises questions about whether her plan could survive a Commons vote – and has also led to renewed questions about whether she will face a challenge to her positio. “The deep division at the heart of the Conservative Party has broken out in public and plunged this government into crisis,” said shadow Brexit secretary Sir Keir Starmer. “It is now clearer than ever that Theresa May does not have the authority to negotiate for Britain or deliver a Brexit deal that protects jobs and the economy.”

Russia Building Up Military Sites on Poland’s Border Before Trump-Putin Meeting

A munitions facility on the Russian exclave of Kaliningrad.
Satellite photos show new structures and other bunker improvements in the Baltic Sea exclave of Kaliningrad made in the run-up to the NATO summit.

As President Donald Trump prepares to meet with NATO leaders and Russian President Vladimir Putin, Moscow has been improving its westernmost military facilities. Between March and June, Russia made several improvements to a munitions storage site in its Baltic Sea exclave of Kaliningrad, satellite photos show.  An 86-square-mile piece of territory between Poland and Latvia, the exclave was an important outpost for the Soviet Union. Now it is springing back to life as part of a Russian military buildup that has been accelerating since 2015. The photos, by satellite imaging company Planet Labs, show changes around a kind of bunker facility in Baltiysk, near the Polish border. (Note: Planet Labs provides limited amounts of imagery to Defense One.) Such facilities are often used to house artillery, according to Matt Hall, a senior geospatial analyst at 3GIMBALS, a firm that provides human-machine integrated location-based analytics. “The visible change between the two images provided appears to be the fortification of buildings, characteristic of explosive storage bunkers, utilizing earthen berms to further insulate these structures. There also appears to be clearings, new structures visible within the the forested portion of the installation, as well as a berm and exterior fence surrounding the installation,” Hall said in an email.  “Every structure in the northern non-forested sector have been reinforced during the three month period of the imagery,” he said. “The berms appear to be continually fortified to make them more obscured from aerial detection.” Berms are mounds of dirt or snow added to fortify structures or restrict access. “In the forested sector, a different type of storage facility exists, some of which are bermed and appear to be leveled off. There appears to be additional uncovered storage, some with berms but not heavily fortified. In this area some of the structures have changed, potentially showing roofing structures or tarps that have since been removed to reveal caches of items. Some of the berms appear to be more extensive, but the foliage in the second imagery may obscure this analysis. Additionally, there appear to be new or redistributed items — potentially identifiable as shipping containers.” In June, a Federation of American Scientists report said that satellite photos of a different site, about eight miles away, show Russia has upgraded nuclear-weapons bunkers on the exclave. The presence of nuclear weapons in Kaliningrad has been a topic of speculation and concern for years. In 2016, the Russians deployed the SS-26 Iskander, a nuclear-capable missile with a range of more than 400 kilometers, to Kaliningrad. It joins one or more S-400 anti-aircraft batteries, which have a range of nearly 250 kilometers. “Without commenting on specific intelligence matters, Russia continues to demonstrate aggressive behavior in Europe,” said Pentagon spokesperson Eric Pahon. “Russia, after the Cold War, retained large numbers of non-strategic nuclear weapons — forces that it is modernizing and increasing as described in the Nuclear Posture Review released in February. Even more troubling has been Russia’s adoption of military strategies and capabilities that rely on nuclear escalation for their success.”

Iran calls for EU help as shipping giant pulls out for fear of U.S. sanctions

AIX-EN-PROVENCE, France/LONDON (Reuters) – One of the world’s biggest cargo shippers announced on Saturday it was pulling out of Iran for fear of becoming entangled in U.S. sanctions, and President Hassan Rouhani demanded that European countries to do more to offset the U.S. measures.

FILE PHOTO: Iran’s President Hassan Rouhani attends a news conference at the Chancellery in Vienna, Austria July 4, 2018. REUTERS/Lisi Niesner/File Photo

The announcement by France’s CMA CGM that it was quitting Iran deals a blow to Tehran’s efforts to persuade European countries to offer economic benefits to offset the new U.S. sanctions. Iran says it needs more help from Europe to keep alive an agreement with world powers to curb its nuclear programme. U.S. President Donald Trump abandoned the agreement in May and has announced new sanctions on Tehran. Washington has ordered all countries to stop buying Iranian oil by November and foreign firms to stop doing business there or face U.S. blacklists. European powers which still support the nuclear deal say they will do more to encourage their businesses to remain engaged with Iran. But the prospect of being banned in the United States appears to be enough to persuade European companies to keep out.

Foreign ministers from the five remaining signatory countries to the nuclear deal — Britain, France, Germany, China and Russia — offered a package of economic measures to Iran on Friday to compensate for U.S. sanctions that begin taking effect in August, but Tehran said the package did not go far enough.

“European countries have the political will to maintain economic ties with Iran based on the JCPOA (the nuclear deal), but they need to take practical measures within the time limit,” Rouhani said on Saturday on his official website. CMA CGM, which according to the United Nations operates the world’s third largest container shipping fleet with more than 11 percent of global capacity, said it would halt service for Iran as it did not want to fall foul of the rules given its large presence in the United States. “Due to the Trump administration, we have decided to end our service for Iran,” CMA CGM chief Rodolphe Saade said during an economic conference in the southern French city of Aix-en-Provence. “Our Chinese competitors are hesitating a little, so maybe they have a different relationship with Trump, but we apply the rules,” Saade said. The shipping market leader, A.P. Moller-Maersk of Denmark, already announced in May it was pulling out of Iran.

Iranian Oil Minister Bijan Zanganeh called the tension between Tehran and Washington a “trade war”. He said it had not led to changes in Iranian oil production and exports.

He also echoed Rouhani’s remarks that the European package did not meet all economic demands of Iran. “I have not seen the package personally, but our colleagues in the foreign ministry who have seen it were not happy with its details,” Zanganeh was quoted as saying by Tasnim news agency. Some Iranian officials have threatened to block oil exports from the Gulf in retaliation for U.S. efforts to reduce Iranian oil sales to zero. Rouhani himself made a veiled threat along those lines in recent days, saying there could be no oil exports from the region if Iran’s were shut. Zanganeh said Iran’s stance on this issue was clear.

US Warships Pass through Taiwan Strait amid China Tensions

Image: US Warships Pass through Taiwan Strait amid China Tensions
This Mar. 6, 2016, file photo provided by the U.S. Navy, shows the Ticonderoga-class guided-missile cruiser USS Antietam (CG 54) sails in the South China Sea. (AP)

Two U.S. warships passed through the Taiwan Strait on Saturday on a voyage that will likely be viewed in the self-ruled island as a sign of support by President Donald Trump amid heightened tension with China.”Two U.S. Navy ships conducted a routine transit through the international waters of the Taiwan Strait on July 7-8 (local time),” Captain Charlie Brown, a spokesman for U.S. Pacific Fleet, told Reuters in a statement. “U.S. Navy Ships transit between the South China Sea and East China Sea via the Taiwan Strait and have done so for many years,” Brown said. U.S. officials, speaking on condition of anonymity, said the destroyers Mustin and Benfold carried out the passage. Earlier on Saturday, Taiwan’s Defense Ministry said the ships were moving in a northeastern direction, adding that the situation was in accordance with regulations. Washington has no formal ties with Taiwan but is bound by law to help it defend itself and is the island’s main source of arms. China regularly says Taiwan is the most sensitive issue in its ties with the United States. The passage through the Taiwan Strait, the first such one by a U.S. Navy ship in about a year, follows a series of Chinese military drills around the island that have stoked tensions between Taipei and Beijing. The Global Times, a state-controlled Chinese newspaper, said in an editorial published on Sunday that China should remain calm and not be swayed by what it called the psychological tactics of the United States. China claims Taiwan as its own and has never renounced the use of force to bring under its control what it sees as a wayward province. Taiwan has shown no interest in being governed by the ruling Communist Party in Beijing. The move comes as a U.S.-China trade fight is seen as dragging on for a potentially prolonged period, as the world’s two biggest economies flex their muscles with no sign of negotiations to ease tensions. Reuters first reported last month that the United States was considering sending a warship and had examined plans for an aircraft carrier passage, but ultimately did not pursue that option perhaps because of concerns about upsetting China. The last time a U.S. aircraft carrier transited the Taiwan Strait was in 2007, during the administration of George W. Bush, and some U.S. military officials believe a carrier transit is overdue. U.S. overtures towards Taiwan, from unveiling a new de facto embassy to passing the Taiwan Travel Act, which encourages U.S. officials to visit, have further escalated tension between Beijing and Taipei. U.S. Defense Secretary Jim Mattis discussed the delicate issue of Taiwan during his trip to China last month. “The U.S. sending military ships through the Taiwan Strait is both a demonstration of its continuing support to Taiwan and of its willingness to exercise its maritime rights in China’s periphery,” said Abraham Denmark, a former deputy assistant secretary of defense for East Asia under President Barack Obama.

Graham on NKorea’s Rebuke: ‘I See China’s Hands all Over This’

Image: Graham on NKorea's Rebuke:  'I See China's Hands all Over This'
Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs chairman Sen. Lindsey Graham (R-SC) during a hearing to review the Fiscal Year 2019 funding request and budget justification. (Photo by Zach Gibson/Getty Images) By Cathy Burke | Sunday, 08 July 2018 10:35 AM
China’s fingerprints were “all over” the harsh North Korean rebuke after high-level talks with a U.S. delegation led by Secretary of State Mike Pompeo, Sen. Lindsey Graham said Sunday. In remarks on “Fox News Sunday,” the South Carolina Republican said China is using North Korea to force the United States to back off a trade dispute. “I see China’s hands all over this,” Graham said of North Korea’s reaction to the talks as “regrettable.” “We are in a fight with China,” he said, adding: “They cheat and President [Donald] Trump wants to change the economic relationship with China so if I were President Trump, I would not let China use North Korea to back me off of the trade dispute. We’ve got more bullets than they do when it comes to trade.” Graham also expressed optimism about the release by Turkey of jailed North Carolina evangelical pastor Andrew Brunson, whom Graham said he visited in his recent visit to Turkey. “They are definitely an ally adrift,” he said of Turkey, “but there is a new chapter in Turkish history” with the recent election of Turkish President Recep Erdogan. “He’s going to have a long time to serve in Turkey and we need to come to grips with that,” Graham said. “We need to push and when it comes to the way they treat the press and human rights abuses… I don’t believe they would let us see [Brunson] if they were not looking for a way to end this.” He added that the United States also has to partner with Turkey to maintain a U.S. troop presence in northeastern Syria to ward off Iran. “At the end of the day, Iran is a weak economy. They’ve got problems in their own backyard,” he said. “What we need to do is partner with Turkey and Russia and break Iran away.” On Sunday, Pompeo brushed aside North Korea’s accusation of “gangster-like” demands, maintaining that his third visit to the country was producing results but vowing that sanctions would remain until Pyongyang follows through on leader Kim Jong Un’s pledge to get rid of his nuclear weapons. Pompeo downplayed North Korea’s statement after the talks in which the country’s foreign ministry bashed hopes for a quick deal and accused the U.S. of making “gangster-like” demands aimed at forcing it to abandon nuclear weapons. The North’s statement, coming so soon after Pompeo’s trip, was sure to fuel growing skepticism in the U.S. over how serious Kim is about giving up his nuclear arsenal. “If those requests were gangster-like, the world is a gangster,” Pompeo said, noting that numerous U.N. Security Council resolutions have demanded that the North rid itself of nuclear weapons and end its ballistic missile program. “People are going to make stray comments after meetings,” Pompeo said. “If I paid attention to the press, I’d go nuts.” Speaking after meeting with his Japanese and South Korean counterparts in Tokyo, Pompeo said his two days of talks in Pyongyang had been productive and conducted in good faith. But following the stinging commentary from the North, he allowed that the goal of denuclearization would be difficult and that much work remains. “The road ahead will be difficult and challenging and we know critics will try to minimize what we have achieved,” he said. Two days of talks with senior North Korean officials had “made progress,” he said, and included a “detailed and substantive discussion about the next steps.” Those include the formation of working group to determine exactly how North Korea’s denuclearization will be verified and a Thursday meeting with Pentagon officials to discuss the return of remains of Americans soldiers killed during the Korean War.

France says Europe united against U.S. tariffs as Germany eyes negotiation

French Finance Minister Bruno Le Maire arrives at the Elysee Palace in Paris, France, July 6, 2018. REUTERS/Regis Duvignau

AIX-EN-PROVENCE, France (Reuters) – The French government insisted on Sunday that Washington should expect united retaliation from Europe to further tariff increases after Germany signalled it was prepared to negotiate. With Germany’s powerful car industry facing the threat of higher U.S. duties, Chancellor Angela Merkel said last Thursday she would back a lowering of European Union levies on imports of U.S. cars. “If tomorrow there is an increase in tariffs, like in the car industry, our reaction should be united and strong to show that Europe is a united and sovereign power,” French Finance Minister Bruno Le Maire said.“The question is no longer whether or not there will be a trade war, the war has already started,” he added, speaking at an economic conference in Aix-en-Provence, southern France.U.S. President Donald Trump hit the EU, Canada and Mexico with tariffs of 25 percent on steel and 10 percent on aluminium at the start of June, ending exemptions that had been in place since March. He further escalated tensions last month with threats to impose a 20 percent import tariff on all EU-assembled vehicles, which could upend the industry’s current business model for selling cars in the United States. “Let it be known that if we are attacked we will react collectively and we will react firmly,” Le Maire said. The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars.

Under World Trade Organization rules, the EU cannot lower import tariffs for only U.S.-made cars. It would have to reduce them for all WTO members.

While French carmakers would be little affected by U.S. tariffs because they have little exposure to the American market, they would face stiff competition from Asian producers if EU tariffs were cut, a prospect that worries the French government.

SECOND FRONT

Le Maire also insisted the EU would overcome differences on a tax on digital giants such as Google and Apple, which have in the past booked European profits in countries with the lowest tax rates.

“Believe me, we will tax the digital giants by the end of 2018 or at the latest in early 2019 because it’s not only a question of justice but of sovereignty,” Le Maire said.

A joint Franco-German declaration agreed last month by Le Maire and his German counterpart had spoken of an EU agreement for the end of 2018.

President Emmanuel Macron’s government has invested considerable political capital in lobbying Paris’ EU counterparts to back a 3 percent tax on large firms’ digital turnover, in the face of opposition from low-tax countries. In France, the idea plays well with companies like Google widely seen as getting away with paying lower taxes than other firms, depriving the state of revenues and putting French firms at a disadvantage. Google France’s head Sebastien Missoffe was loudly booed on Saturday at the conference, attended by the CEOs of many of France’s biggest companies, when he said his firm had paid average corporate tax of 26 percent over the last 10 years, comfortably below the 33 percent statutory rate in France.

North Korea: Mike Pompeo rejects ‘gangster-like’ accusation

Image copyright EP Image caption Mr Pompeo brushed off North Korean suggestions that the US was acting like a gangster

US Secretary of State Mike Pompeo has dismissed accusations by North Korea that he engaged in “gangster-like” behaviour during a visit there. After two days of talks with senior officials, he said efforts to push Pyongyang towards abandoning nuclear weapons had international backing. He stressed that denuclearisation was a condition for lifting sanctions. It was Mr Pompeo’s first visit to the North since last month’s summit between Kim Jong-un and President Donald Trump. The North Korean leader says he is committed to denuclearisation, but how this will be achieved is unclear. Mr Pompeo did not meet Mr Kim. Instead, on Friday and Saturday he held talks with Kim Jong-chol, seen as the North Korean leader’s right-hand man, on how to proceed with denuclearisation. Afterwards, state media carried a statement saying the US had gone against the spirit of the summit by acting unilaterally to put pressure on the country. “We had anticipated the US side would come with a constructive idea, thinking we would take something in return,” the statement said, warning its “resolve for denuclearisation… may falter”. “The US is fatally mistaken if it went to the extent of regarding that [North Korea] would be compelled to accept, out of its patience, demands reflecting its gangster-like mindset,” it added. The statement, by an unnamed foreign ministry official, was in sharp contrast with the account given by Mr Pompeo as he left North Korea for Japan just hours before. He said the talks had “made progress on almost all of the central issues”.  North Korean state media often carries uncompromising language, and some analysts and officials speculated the use of the term may be a negotiating tactic. After talks with the foreign ministers of Japan and South Korea on Sunday, the secretary of state said his efforts to press the North on nuclear weapons were legitimate. “If those requests were gangster-like, the world is a gangster, because there was a unanimous decision at the UN Security Council about what needs to be achieved,” he told reporters in Tokyo. He added: “When we spoke to them about denuclearisation, they did not push back.” He also admitted that the “road ahead will be difficult and challenging”. After the Singapore summit in June, which also saw the US promise to end military drills with South Korea, Mr Trump claimed that the North no longer posed a nuclear threat. However, the president has since renewed sanctions on North Korea, while US intelligence officials have said there is evidence North Korea continues to upgrade the infrastructure for its nuclear and missile programmes.

Trump NATO envoy: Russia is trying to ‘flip’ Turkey

Trump NATO envoy: Russia is trying to 'flip' Turkey
© Getty U.S. Ambassador to NATO Kay Bailey Hutchison said Sunday that Russia appeared to be trying to “flip” Turkey, a key member of the alliance, in a bid to undermine and destabilize NATO.

“I do think Russia is trying to flip Turkey. They’re trying to flip many of our allies,” Hutchison said on “Fox News Sunday.” “They want to destabilize the strongest defense alliance in the history of the world, and that is NATO.” But Hutchison cast doubt on whether Moscow would succeed in its effort to weaken Turkey’s commitments to NATO.  “They have been helping us for a long time,” she said. “We know Russia is trying to move into that, but we know that they’re strong.” Turkey has been a long-standing ally of the U.S., particularly in counterterrorism cooperation. But Ankara has edged closer to Moscow recently, stoking fears in the West that Russia is trying to weaken Turkey’s NATO commitments. In December, Ankara and Moscow finalized an agreement for Turkey to purchase a Russian S-400 missile defense system. Russia is also building Turkey’s first nuclear power plant, as well as the “TurkStream” pipeline, which will transport natural gas from Russia to Turkey. Tensions ratcheted up between the U.S. and Turkey earlier this year after Ankara launched a military incursion in Northern Syria to edge out U.S.-backed Kurdish fighters, threatening a confrontation between American and Turkish forces. Hutchison’s comments on Sunday came days before President Trump is set to travel to Brussels for the annual NATO summit. He is expected to meet with Russian President Vladimir Putin in Helsinki on July 16

Trump’s diplomacy of personal chemistry is facing a huge test

(CNN)The cornerstone of President Donald Trump’s foreign policy so far has largely been Donald Trump. His personal chemistry and flattery got Kim Jong Un to the negotiating table, but now Trump’s got so much skin in the game he could feel personally betrayed by Kim if the talks stall, as seemed possible this weekend. In Kim, Trump has encountered an equally outsized figure. And over the past year, the tension between the US and North Korea felt at times like it was about two men who got into each other’s heads. They alone could save this or kill it. And both seem just fine with that responsibility. How tied is US policy to the President’s gut? Trump said in June he’d know within a minute if Kim was serious about working toward denuclearization. How? “Just my touch, my feel,” he told reporters before the Kim meeting. “That’s what I do.” He’s allowed many State Department positions to lie fallow in part because he’s said he is the policy. “I’m the only one that matters, because when it comes to it, that’s what the policy is going to be,” he said late in 2017. “You’ve seen that, you’ve seen it strongly.” At the center of so many massive global issues in the Trump era are the personal relationships and peccadilloes of Trump. This week, he’ll walk into a meeting with NATO members, traditional US allies he’s openly criticized for not spending enough on defense, and many of whom he’s angered with tariffs. Then he’ll have a summit with Vladimir Putin, a geopolitical US foe Trump has courted and whom he believes over the US intelligence community on the issue of Russian election meddling. The stakes of those meetings might not be nuclear war — Trump has said the US would be in the midst of one were it not for his efforts with Kim — but they are nonetheless important as Trump tries with his personal relationships to remake the US place in the world.

A “special bond” tested by “gangster-like” demands

But as he’s finding with North Korea, so much depends on what happens after the summit, and there’s more to a deal than how he gets along with another world leader. The touch and feel were pleasing to Trump during his Kim meeting, and the two went on to rough out an agreement to come to a future denucleariztion pact. After the summit he said they had a “special bond.” “He’s got a very good personality, he’s funny, and he’s very, very smart,” Trump told Fox News. “He’s a great negotiator, and he’s a very strategic kind of a guy.” Trump carried that momentum onto Twitter, where he declared the North Korean nuclear threat over. He later calibrated that it would be a long road to denuclearization, but at least we’re not in nuclear war, which is where the US would be if it weren’t for him.
Filling out the skeleton agreement Kim and Trump signed with such fanfare has proven difficult without the principals in the room. And it would be difficult regardless And it turns out, as many experts predicted, that North Korea might not actually be interested in a complete cessation of its nuclear program. The state news media accused the US of pushing a “unilateral and gangster-like demand for denuclearization.” Pompeo’s response made it feel like the North Korean talks were slipping into the sort of standoffs that foiled previous administrations. Except in this case, Trump is personally invested. Bigly. He’ll own the failure (or success) much more directly than his predecessors, who did their diplomacy with diplomats. “A danger is ⁦‪@realDonaldTrump‬⁩ will claim he tried diplomacy and it failed b/c Kim betrayed him and now military force is called for,” Richard Haas, a diplomat during the Bush administration and now the president of the Council on Foreign Relations, said on Twitter. “But a rushed summit and demands that NK denuclearize in short order or else is not a serious test of diplomacy. Need to explore interim/partial deal.” The Trump administration has suggested they prefer a deal that must include full denuclearization and not be implemented in increments.

CNN’s Stelter blasts Trump-Hannity relationship: ‘Let’s just underscore how weird this is’

CNN’s Stelter blasts Trump-Hannity relationship: 'Let's just underscore how weird this is'
© Getty Images CNN host Brian Stelter offered a scathing assessment of President Trump’s close relationship with Fox News host Sean Hannity on Sunday, describing a relationship that he said is both highly unprecedented and “weird.

“When Hannity’s off the air he gossips with Trump and gives advice about who to hire,” Stelter said on CNN’s “Reliable Sources.” “So let’s just underscore how weird this is. No TV host has ever had this kind of relationship with a U.S. president before.”

Stelter then broadened his criticism to include Fox News as a whole, saying that the conservative network’s support for Trump signals a sort of “merger between a culture-war TV station and a culture-war president.” “No network has ever propped up a president quite like this before. Sure, Obama had big fans on MSNBC, but there wasn’t this kind of coordination. No one ever thought Keith Olbermann was Obama’s ‘shadow chief of staff.’ But that’s how some Trump advisers describe Hannity.””This is new and it’s weird, and we shouldn’t get used to it,” he added.  Trump is said to talk to Hannity regularly and to consult with him on decisions such as hires within his administration. The president has also tweeted previews of Hannity’s Fox News show.

In fact, the president has hired multiple Fox News alumni to his administration. Heather Nauert, the State Department’s chief spokeswoman, is a former Fox News host. Last week, Trump hired the network’s former co-president, Bill Shine, to lead the White House’s communications team.

Amazon’s purchase of Whole Foods flipped the meal kit industry upside down; celebrity spokesmodels, football stars help sell vegan dinners

Vegetables from a Blue Apron meal-kit delivery are arranged for a photograph in Tiskilwa, Illinois.
Daniel Acker | Bloomberg | Getty Images Vegetables from a Blue Apron meal-kit delivery are arranged for a photograph in Tiskilwa, Illinois.

It’s been just over a year since Amazon bought Whole Foods Market, and it’s already upended the market for fresh prepared meal delivery. Amazon hasn’t even begun offering meals to its more than 100 million Prime members and its reputation for disrupting entire industries already has the meal kit market changing up business models in an effort to hold on to customers in a fast-growing industry with even swifter competition. From established services from Blue Apron to vegan upstarts Purple Carrot, companies are adding celebrity spokesmodels, catering to specialized diets and promising customers everything from 30-minute meal prep to curbing heart disease. Amazon’s mere presence in the market has fundamentally altered it. Meal kits, which were once billed as the solution to weekly or bi-weekly trips to a crowed grocery store, are now selling in supermarkets and drug stores “The Amazon acquisition of Whole Foods really shook up a lot of players in the space from a thought process perspective,” Edward Yruma, managing director of equity research at KeyBanc, told CNBC. “When that happened they all took a really hard view against what are they doing? Where could they find grow? What could they do better?” So far, the tech giant has only tested its own branded meal kits in Seattle. It’s instead selling customers dinners from Takeout Kit, which sells non-perishable prepackaged dinners, or Chef’d, which has drawn investment from Smithfield Foods. Grocery stores and meal kit companies, former rivals, are working together to try to head off Amazon. In August, meal kit company Chef’d received $25 million from Smithfield and Campbell Soup and began selling kits in Gelson’s, a Southern California supermarket chain. Albertsons bought meal kit startup Plated in September 2017, a month after the Amazon-Whole Foods deal officially closed. The pace of change picked up earlier this year with Blue Apron, Walmart and Weight Watchers in March announcing plans to bring meal kits to super markets. Blue Apron ultimately partnered with Costco to test its kits at 15 locations while Walmart developed its own pre-portioned kits in-house. Weight Watchers has yet to launch its meals. Also during that month, HelloFresh bought Green Chef to help diversify its meal catalog with organic, vegan and gluten-free options. A few months later, Kroger bought meal kit Home Chef in a deal worth $200 million. In June, HelloFresh said it would sell kits at Stop & Shop and Ahold Delhaize’s Giant Food and Chef’d launched its kits at 30 Walgreens and Duane Reade stores in the New York area as part of a partnership with Smithfield Foods. “We will continue to see more grocery stores get into this game,” Meagan Nelson, associate director of Nielsen’s fresh growth and strategy team, told CNBC via email. While the majority of meal kits are purchased online via a subscription service, in-store meal kit sales are on the rise. In the last year sales in this segment rose 26.5 percent to $154.6 million, Nielsen reported. “The market will evolve,” Technomic’s Erik Thoresen, told CNBC. “Subscription will still exist, but won’t be the growth engine.”

‘There is concern across Europe’ about what Trump might promise Putin

Flake: ‘There is concern across Europe’ about what Trump might promise Putin
© Greg Nash Sen. Jeff Flake (R-Ariz.) on Sunday voiced concerns about President Trump’s pattern of refusing to criticize Russian President Vladimir Putin ahead of an expected one-on-one meeting between the two leaders next week.

“Many of us are concerned, I certainly am, about the president’s ongoing rhetoric that really demeans or ridicules our allies and praises our adversaries. So this is a part of kind of a continuum, so yes it does concern me,” Flake said on CNN’s “State of the Union.” Flake, who is among the most outspoken Republican critics of the president, said he’s glad Trump is talking to Putin and negotiating with North Korea. “But I am concerned, and I know there is concern across Europe, about what might be promised,” he added.

Trump is scheduled to meet with Putin on July 16 in Helsinki to cap off a weeklong trip to Europe. He reportedly plans to meet with the Russian president alone, with no aides present, before other officials join the meeting.

While Trump has claimed “nobody is tougher on Russia” than he is, he has drawn frequent bipartisan criticism over his refusal to condemn Putin and Russia for the intelligence community’s conclusion that Russia meddled in the 2016 U.S. election. Trump said he plans to bring up the issue during his upcoming meeting with Putin. He also suggested last month that Russia should be readmitted to the Group of Seven after it was expelled for annexing Crimea from Ukraine in 2014. The suggestion garnered little traction with other world leaders.

The president revived his friendly rhetoric toward Putin during a rally in Montana last week.

“They’re going ‘Will President Trump be prepared, you know, President Putin is KGB and this and that,’ ” Trump told the crowd. “You know what? Putin’s fine. He’s fine. We’re all fine. We’re people. Will I be prepared? Totally prepared. I’ve been preparing for this stuff my whole life.”

Whiskey wars: Trade tariffs hit hard in Trump country

Whiskey sour: Tough tariffs hit distillers
Whiskey sour: Tough tariffs hit distillers China’s new 25 percent tariff on U.S whiskies took effect Friday, and America’s bourbon industry is already starting to feel the squeeze.

The Chinese tariffs — retaliation for the Trump administration’s tariffs on $34 billion in Chinese goods — come on top those levied by Europe, Mexico and Canada. The new whiskey tariffs are hitting states like Tennessee and Kentucky, solid red states, the hardest. Trump carried Kentucky by 62.5 percent and Tennessee by 60.7 percent in 2016. Almost all, 95 percent, of the world’s bourbon is made in Kentucky. Jack Daniels, however, is made in Tennessee and is the most popular American whiskey in the world. Bourbon is the last true signature industry for this state, Fred Minnick, the author of ‘Bourbon: The Rise, Fall and Rebirth of American Whiskey,’ told CNBC. “When someone comes to Kentucky, they’re not thinking about fried chicken anymore, they’re thinking about bourbon,” said Minnick. “And when you start tariffing it, when you start taking away jobs and hurting it from being exported to Spain’s, UK, Mexico, Canada, to wherever, you’re essentially gut-punching the state of Kentucky,” he added. American spirits exported to China grew by almost 1,200 percent between 2001 and 2017, according to the Distilled Spirits Council. Whiskey made up the majority of U.S. spirits exported to China, accounting for $8.9 million of liquor exports to the country last year. American whiskey, in fact, accounted for more than $1 billion of the $1.6 billion in total U.S.-made spirits sold overseas last year, according to the council. “Imposing 25 percent tariffs on U.S. whiskeys could put the brakes on an American export success story,” said Christine LoCascio, senior vice president of international trade for the council. American whiskies have been chipping away at Scotch’s dominance in China, and had 9 percent of the Chinese whiskey market in 2017, according to industry tracker International Wine and Spirits Inc. (Scotch accounted for 87 percent, down from 94 percent in 2012.) Bourbon and Scotch are technically both whiskies, but their names are based on where they’re distilled, among other subtle differences. Bourbon is only made in America while Scotch is made in Scotland.

WaPo: Trump’s personal calls to world leaders leave White House aides in the dark

(CNN)President Donald Trump started handing out his personal cell phone number to world leaders shortly after he took office last year, leading to one-on-one calls that even top White House aides did not know about, according to a report in The Washington Post. White House aides learned of an April 2017 call between Canadian Prime Minister Justin Trudeau and Trump only after a standard summary was issued by officials in Canada, according to the Post, which said its report was based in interviews with US and European officials who spoke on condition of anonymity. Conversations with world leaders are required by federal records law to be routed through the Situation Room, the Post reports. Such calls are typically heavily prepared for and monitored by the White House; the national security adviser briefs the president, and regional experts provide prepared talking points. The national security adviser then remains by the president’s side throughout the call, and a transcript of the call is distributed to key White House aides, who issue a public readout. When it came to the call with Trudeau, US officials had to rely on Trump’s recollection. The short official statement released simply said it was “a very amicable call.”  The White House did not immediately respond to CNN’s request for comment. Trump’s lack of preparation leads to unpredictable interactions with world leaders, the Post reported, citing officials. Trump rarely reads the nightly briefing book prepared for him on relevant issues likely to come up in meetings. Aides try to make it easier for him to read by putting the most critical information in a red folder for him.

Trump’s freewheeling approach — including his reliance on instincts and willingness to challenge longstanding assumptions — has alarmed allies and some of Trump’s closest aides over concessions he may offer to Russian President Vladimir Putin during their one-on-one meeting later this month, the Post reports.

It has also led to mixed messages from his administration in the days leading up to next week’s NATO summit.

“These are not real estate deals,” retired Gen. Wesley Clark, a former NATO commander, said on CNN Saturday on the topic of the upcoming summit. “This is not a matter of ‘Hey, I’ve got a good relationship with so and so I’m sure he’ll sell me the piece of property I need.'”
“Countries and systems have long-term interests,” and Putin’s is “restore Russia’s border security by if not occupying then dominating its neighbors,” Clark said.

Violent protests erupt in Haiti as fuel prices spike

Demonstrators protest over the cost of fuel in Port-au-Prince, Haiti, Friday, July 6, 2018. Major protests erupted Friday in Haiti as the government announced a sharp increase in gasoline prices, with demonstrators using burning tires and barricades
The Associated Press Demonstrators protest over the cost of fuel in Port-au-Prince, Haiti

Major protests erupted Friday in Haiti as the government announced a sharp increase in gasoline prices, with demonstrators using burning tires and barricades to block major streets across the capital and in the northern city of Cap-Haitien. At least three people were killed. Journalists saw the body of two protesters who had been fatally shot in the Delmas area of the capital as demonstrators clashed with police. It was unclear who shot the men. The third death was a security guard for a former political candidate who was stopped at a barricade. The security guard got out of the vehicle and fired a gun in the air to disperse protesters. An Associated Press journalist saw the crowd seize the man when he ran out of bullets, beat him to death and set his body aflame as the vehicle sped off. Protesters tried at one point to set a gas station on fire but were held off by police. The demonstrations began after the Commerce Ministry and Economic Ministry issued a joint statement announcing an increase of 38 percent to 51 percent for gasoline, diesel and kerosene. The increases take effect Saturday. Government officials agreed to reduce subsidies for fuel in February as part of an assistance package with the International Monetary Fund. The agreement also included increased spending on social services and infrastructure and improved tax collection in an effort to modernize the economy of one of the poorest nations in the Western Hemisphere.

A liter of diesel will cost about $4 and a liter of regular gas will cost nearly $5 under the new prices. The increase will reverberate through the economy of a country where about 80 percent of the people earn less than $2 a day.

Opposition groups said they expected more protests throughout the country Saturday.

Dollar slumps after U.S. nonfarm payrolls data, tariffs kick in

FILE PHOTO: U.S. Dollar and China Yuan notes are seen in this picture illustration June 2, 2017. REUTERS/Thomas White/Illustration/File Photo

NEW YORK (Reuters) – The dollar hit three-week lows on Friday after data showed the U.S. economy created more jobs than expected in June, but a closely watched inflation gauge – wage growth – rose less than forecast and the unemployment rate increased. A man walks past an exchange bureau advertisement showing images of the U.S. Dollar in Cairo, Egypt July 4, 2018. REUTERS/Mohamed Abd El GhanyAs a result, expectations dimmed somewhat that the Federal Reserve would raise interest rates a fourth time this year. The greenback had weakened earlier on Friday as the United States and China imposed tariffs on each other’s imports, but the fall was muted as investors waited for the jobs report. U.S. nonfarm payrolls advanced by 213,000 jobs in June, the Labor Department said. Data for April and May was revised to show 37,000 more jobs created than previously reported. The unemployment rate, however, rose to 4.0 percent from an 18-year low of 3.8 percent in May, while average hourly earnings rose 5 cents, or 0.2 percent, in June after increasing 0.3 percent in May. “We are of the thinking that the strong economic gains make a September hike a likely event,” said Marvin Loh, senior global market strategist at BNY Mellon on Boston. “Without an acceleration of wage growth, a fourth hike at the end of the year is a more difficult call and futures shows that hesitation, placing just 50 percent odds on that event,” he added. In late trading, the dollar index was down 0.5 percent at 94.019 . Against the yen, the dollar slid 0.2 percent to 110.42 yen , while the euro rose 0.5 percent to $1.1742 . Fed funds futures priced in a 77 percent chance of a September rate hike, down from 80 percent before the jobs data. With U.S. payrolls out of the way, investors focused on the trade conflict between the world’s biggest economic powers, as U.S. tariffs on $34 billion worth of Chinese goods came into effect on Friday. “Markets are concerned that despite assurances to the contrary, China may use its currency to hurt the U.S. as it cannot implement a like-for-like retaliation,” said Tom Milson, executive director at GWM Investment Management in London.

U.S. jobs growth lifts Wall Street, offsetting tariffs

NEW YORK (Reuters) – U.S. stocks climbed on Friday, with the S&P 500 and the Nasdaq hitting their highest levels in two weeks, as strong U.S. jobs growth blunted the impact of an escalating U.S.-China trade dispute. Nonfarm payrolls increased by 213,000 jobs last month, the U.S. Labor Department said, topping expectations of 195,000, while the unemployment rate rose from an 18-year low to 4 percent and average hourly earnings rose 0.2 percent. The moderate wage growth allayed fears of a strong buildup in inflation pressures and boosted optimism that the Federal Reserve would stay on a path of gradual interest rate increases. “This really is the best outcome we could have hoped for, more jobs without a whole lot of wage pressures,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh. The positive news from the U.S. employment report offset, at least for the moment, heightened trade tensions between the United States and China. The two countries slapped tit-for-tat tariffs on $34 billion worth of each other’s imports on Friday. Beijing accused the White House of triggering the “largest-scale trade war.” President Donald Trump has warned that the United States may ultimately target over $500 billion worth of Chinese goods, an amount that roughly matches its total imports from China last year. “Even though there is an ongoing trade spat, it’s going to be measured, not $500 billion all at once,” said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia. “It gives the opportunity for negotiations to happen and doesn’t torpedo the economy, which is what people were concerned about.” “You’re going to get some stalling of the market, should trade issues begin to accelerate,” said Gerry Sparrow, a portfolio manager for Interactive Brokers Asset Management, a Boston-based online investing company. Nick Bit: this celebration will end in a funeral. No wage increase… lots of shit jobs being taken by low level Americans…. Since the Latinos are not getting across the border…..

Sterling hits two-week high vs. dollar after Brexit strategy deal

NEW YORK (Reuters) – Sterling hit a two-week high against the U.S. dollar on Friday after British Prime Minister Theresa May secured a cabinet agreement for her plans to leave the European Union. British Pound Sterling banknotes are seen at the Money Service Austria company’s headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger “Today in detailed discussions the cabinet has agreed our collective position for the future of our negotiations with the EU,” May said in a statement released by her office late on Friday. “Our proposal will create a U.K. – EU free trade area which establishes a common rule book for industrial goods and agricultural products.” The British pound rose as high as $1.3290 against the dollar, a two-week peak, after the news. It was last up 0.4 percent at $1.3280. Nick Bit: Proof the Pot is better in England! this is crazy shit their is nothing to celebrate here the Germans are about to cut England’s balls off. They will lose their status as a trading and banking hub. The Germans are about to launch a financial/trade blitzkrieg on England

Oil mixed as investors short-cover and Saudi boosts output

 

FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, U.S., May 3, 2017. REUTERS/Ernest Scheyder/File Photo

NEW YORK (Reuters) – Oil was mixed on Friday, with short-covering pushing up U.S. crude futures while Brent slipped on global trade tensions and increased Saudi production West Texas Intermediate crude futures CLc1 gained 61 cents to $73.55 by 11:30 a.m. (1530 GMT). Global benchmark Brent LCOc1 was down 39 cents at $77 a barrel. For the week, WTI was on track for a loss of about 0.4 percent while Brent was down about 3 percent. “We have a little bit of a rally that’s materialized” for WTI, said Bob Yawger of director of energy futures at Mizuho in New York. The rally appears to be a “short covering situation – we were down almost 2 percent yesterday,” said Yawger. U.S. crude futures slipped on Thursday after data showed an unexpected 1.3 million-barrel build in crude inventories. Brent, meanwhile, was “still having difficulty gaining independent bullish traction,” said Jim Ritterbusch, president of Ritterbusch and Associates in a note. “Increased Saudi crude availability that is being enhanced by reduced OSPs (official selling prices) into Europe and other regions is providing a strong counter against curtailed Libyan export activities,” Ritterbusch wrote. In addition to reducing the price of its August barrels, Saudi Arabia also told the Organization of the Petroleum Exporting Countries (OPEC) that it increased production by almost 500,000 barrels per day last month. Output cuts by OPEC and allies since January 2017 have reduced a crude glut. Involuntary drops in supply in Venezuela, Angola and Libya have made the cutbacks even bigger, although OPEC – led by Saudi Arabia – has since agreed to a modest increase in output. “The more that Saudi Arabia adds to the market, the less of a supply cushion we have – that’s a bullish twist to a bearish development,” said Yawger at Mizuho. An imminent shift in global oil trade flows was also affecting prices. U.S. tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday and Beijing has vowed to respond in kind. China has indicated that it could place a tariff of 25 percent on U.S. oil. If that happens, “Chinese demand would then shift to other suppliers. Because the oil market is already in tight supply due to the numerous outages, this would drive international prices (Brent) further up,” Commerzbank said in a note. South Korea, a major buyer of Iranian oil, will not lift any Iranian crude and condensate in July for the first time since August 2012, three sources familiar with the matter said. Meanwhile, the market continued to watch rising U.S. crude output, with this week’s oil drilling rig count data, an indicator of future production, due at 1 p.m.

China says U.S. ‘opening fire’ on world with tariffs, vows to respond

BEIJING/WASHINGTON (Reuters) – China accused the United States on Thursday of “opening fire” on the world with tariffs set to take effect on Friday, warning that it will respond the moment that duties on $34 billion in Chinese goods kick in. U.S. President Donald Trump has threatened to further escalate the trade conflict between the world’s two largest economies with tariffs on as much as $450 billion worth of Chinese goods if China retaliates, as the initial round of tariffs take effect at 12:01 a.m. EDT (0401 GMT) on Friday. There was no evidence of any last-minute negotiations between U.S. and Chinese officials, business sources in Washington and Beijing said. The dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks. U.S. stocks edged higher on Thursday, lifted by technology shares, amid hopes that American trade tensions with Europe may ease after German Chancellor Angela Merkel said she would back a reduction of European car tariffs if Washington abandons its threatened higher car levies. China has said it will not “fire the first shot” in a trade war with the United States, but its customs agency made clear on Thursday that Chinese tariffs on American goods would take effect immediately after U.S. duties on Chinese goods are put in place. Chinese Commerce Ministry spokesman Gao Feng said that the proposed U.S. tariffs would hit many American and foreign companies operating in China and disrupt their supplies of components and assembly work. “U.S. measures are essentially attacking global supply and value chains. To put it simply, the U.S. is opening fire on the entire world, including itself,” Gao said. “China will not bow down in the face of threats and blackmail and will not falter from its determination to defend free trade and the multilateral system,” Gao added. A spokeswoman for the U.S. Trade Representative’s office said the agency had no immediate comment on the activation of its initial round of tariffs beyond a statement issued on June 15. U.S. Customs and Border Protection officials are due to collect 25 percent duties on a range of products including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components. The list avoids direct tariffs on consumer goods such as cellphones and footwear. But some products, including thermostats, are lumped into intermediate and capital goods categories. Chinese buying of soybeans has already ground nearly to a halt ahead of the duties.

In the latest sign that the risk of penalties is hitting trade, a vessel carrying U.S. coal and heading for China switched its destination to Singapore.

Asked whether U.S. companies would be targeted with “qualitative measures” in China in a trade war, Gao said the government would protect the legal rights of all foreign companies in the country.

EIA: US crude stockpiles increase 1.2 million bbl

US crude oil inventories, excluding the Strategic Petroleum Reserve, increased 1.2 million bbl for the week ended June 29, according to US Energy Information Administration data. EIA released the Weekly Petroleum Status Report a day later than normal because of the US Independence Day holiday on July 4. At 417.9 million bbl, US crude oil inventories are about 2% below the 5-year average for this time of year, the Weekly Petroleum Status Report indicated.

The report said total motor gasoline inventories decreased 1.5 million bbl and are 6% above the 5-year range.

Finished gasoline inventories and blending components inventories both decreased last week. Distillate fuel inventories increased by 100,000 bbl last week and are 13% below the 5-year average for this time of year. Propane-propylene inventories increased 2.9 million bbl last week and are 10% below the 5-year average for this time of year, EIA said. US refinery inputs averaged 17.7 million b/d for the week ended June 29, about 163,000 b/d less than the previous week’s average. Refineries operated at 97.1% of capacity. Gasoline production increased, averaging 10.3 million b/d. Distillate fuel production increased, averaging 5.5 million b/d. US crude oil imports averaged 9.1 million b/d, up 699,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 8.4 million b/d, 6.6% more than the same period last year. Total motor gasoline imports averaged 648,000 b/d. Distillate fuel imports averaged 92,000 b/d.

Trump orders OPEC to tame gas prices, but analysts blame his Iran sanctions for rising fuel costs

An Exxon Mobil gas station in Chicago.
Getty Images An Exxon Mobil gas station in Chicago.
Trump administration is hard-core on Iranian oil, says expert. President Donald Trump renewed his Twitter attack on OPEC this week, blaming the cartel for rising gasoline costs. But analysts say Trump’s effort to punish Iran by swiftly cutting off the nation’s energy exports is what’s really driving oil and fuel prices higher. Trump on Wednesday ordered OPEC, the 14-member oil cartel dominated by Saudi Arabia, to take steps to tame rising gasoline costs. He said the group is “driving prices higher,” apparently referencing its 1½-year-old policy of capping production to shrink a global crude glut.

However, several analysts and banks say the catalyst for the most recent oil price rally is Trump’s efforts to punish Iran, the world’s fifth-biggest crude producer. Just days after OPEC agreed to increase output, the State Department sent oil prices soaring by announcing it aims to wipe out much of Iran’s crude exports by November. Since then, U.S. crude oil has surged nearly 7 percent, and briefly rose above $75 a barrel for the first time since November 2014. Crude oil accounts for roughly half the cost of gasoline. “I think what has raised prices 10 bucks a barrel is more the administration’s policy about getting [Iran’s] exports completely cut off to the rest of the world, which they seem intent on,” said John Kilduff, founding partner at energy hedge fund Again Capital. That policy now threatens to leave the world with a shortage of crude and rob Americans of the gasoline price relief they usually get in the autumn. It may even leave drivers paying more at filling stations in the fall, just as they’re preparing to cast their votes in elections that could hand Democrats control of Congress. Americans are already seeing their gas bills rise after enjoying years of low fuel costs thanks to a historic oil price crash. The national average for a gallon of regular gasoline is now nearly $2.87, compared with $2.23 a year ago. U.S. gasoline futures are up about 18.5 percent this year and have risen nearly 39 percent since Trump took office. Morgan Stanley on Monday raised its forecast for international benchmark Brent crude by $7.50 to $85 a barrel over the next six months. The bank pinned the revision on Trump’s tougher-than-anticipated Iran policy, which exacerbates falling output in places such as Venezuela and Angola. Given the geopolitical backdrop, crude oil prices could rise enough to offset the seasonal decline in gasoline prices that Americans usually enjoy in the autumn, said Andrew Lipow, president of Lipow Oil Associates. If Brent crude rises another $10, to $90 a barrel, the cost of a gallon of regular gasoline would top today’s national average, according to Lipow. The same goes for jet fuel and the diesel that powers the nation’s shipping fleet. “As a result, the consumer should expect to pay more for their airline tickets,” he said. “Higher diesel prices are going to be passed through to the consumer in higher prices for goods and services.” OPEC, Russia and several other oil producers have partnered to limit their output since January 2017 to end an oil market downturn that sent prices to 12-year lows, bankrupted hundreds of U.S. energy companies and piled pressure on petrostates. U.S. crude jumped $6 a barrel in the last four days of the quarter after the State Department said it is telling oil buyers to stop importing Iranian crude by Nov. 4. That shocked the market, which anticipated Trump might allow buyers to gradually reduce their purchases, a model created by the Obama administration. OPEC, Russia and several other producers are now aiming to increase output by about 1 million bpd. However, analysts are skeptical they’ll meet that target and say the market can easily sop up the extra supply. At the same time, U.S. crude output is rising, but labor shortages and pipeline bottlenecks in the nation’s biggest oil field are capping growth

US Navy: Will Protect Commerce in Face of Iran Oil Threat

Image: US Navy: Will Protect Commerce in Face of Iran Oil Threat
(Karim Jaafar/AFP/Getty Images)
The U.S. Navy stands ready to ensure freedom of navigation and free flow of commerce, a spokesman for the U.S. military’s Central Command said on Thursday, after Iran warned it will block oil shipments through the Strait of Hormuz. Iran has threatened in recent days to close the strait, a vital route for world oil supplies, if Washington tries to cut Tehran’s exports. An Iranian Revolutionary Guards commander said on Wednesday Iran would block any exports of crude for the Gulf in retaliation for hostile U.S. action. “The U.S. and its partners provide, and promote security and stability in the region,” Central Command spokesman Navy Captain Bill Urban said in an email to Reuters. Asked what would be the U.S. Naval Forces reaction if Iran blocks the Strait of Hormuz, he said: “Together, we stand ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows.”The Islamic Revolutionary Guards Navy (IRGCN) lacks a strong navy and instead focuses on an asymmetric warfare capability in the Gulf. It possesses many speed boats and portable anti-ship missile launchers and can lay naval mines. A senior U.S. military leader said in 2012 the Guards have the ability to block the Strait of Hormuz “for a period of time” but the United States would take action to reopen it in such an event. In May, U.S. President Donald Trump pulled out of a multinational deal under which sanctions on Iran were lifted in return for curbs to its nuclear program. Washington has since told countries they must stop buying Iranian oil from Nov. 4 or face financial measures.

Argentina’s currency crisis is far from over

ON A residential street corner in Buenos Aires, Van Koning Market sells imported beers to the city’s well-heeled. Since it opened in June last year costs have soared. The peso has plummeted, meaning wholesale prices have shot up.

BUENOS AIRESA weak currency and punishingly high interest rates mean recession appears inevitable.  Inflation is running at 26%; the reduction of government subsidies means the monthly electricity bill has risen from 700 pesos to 4,000 pesos ($142). Already losing customers, Sergio Discenza, the manager, is reluctant to raise prices much. “In a normal country this would be a viable business,” he says. “But here everyone is struggling.” The year started badly for Argentina when the worst drought in 50 years hit the harvest of maize and soyabeans, both important exports. In May a stronger dollar and higher US Treasury yields prompted international investors to flee risky assets. Most emerging-market currencies suffered, Argentina’s especially. Its twin fiscal and current-account deficits have seen the peso lose more than a third of its value this year, making it the world’s worst-performing currency (see chart). A recession, the fifth in a decade, appears inevitable. In May the central bank hiked interest rates to 40% to prop up the peso. When that failed Mauricio Macri, the president, secured a $50bn credit line from the IMF. The peso continued to fall. On June 14th the central-bank governor resigned, admitting he had lost the confidence of investors. Luis Caputo, a former Wall Street trader, was moved from the treasury to replace him. Mr Caputo has had a tough start: since his appointment the peso has slid by a further 4% and the Merval, Argentina’s benchmark stock index, by 8%. Frustratingly for Mr Macri, Argentina’s travails are, in part, a consequence of his efforts to put the economy on a firmer footing. When he took office in December 2015, inflation was running at 25%. He allowed the peso to float. It quickly fell by 29%. He also gave the central bank freedom to raise rates, which encouraged foreign investors to buy government bonds and supported the currency. It remained overvalued. That kept imports high and made it hard for exports to compete. The current-account deficit rose to more than 5% of GDP. Meanwhile the government raised large amounts of foreign-denominated debt to cover the fiscal deficit. When investors cooled on emerging markets, all that left Argentina painfully exposed. Nick Note: Anyone buying Argentina debt …. AGAIN! has got their heads up their collective asses. Another Wall Street screw up that will cost the baby boomers retirement calculator suckers another great loss,

Trump tries to tweet his way out of high oil prices

As it turns out, yelling at oil-producing countries to increase their output does not do the trick.
Gasoline prices are displayed on a sign at a Shell gas station as an image of Donald Trump appears on a billboard nearby April 24, 2006 in San Francisco, California. CREDIT: Justin Sullivan/Getty Images.

President Donald Trump has again lashed out at an international body — this time, it’s the Organization of the Petroleum Exporting Countries (OPEC), which he accused Wednesday afternoon of driving up gas prices. He called on them to increase their production (of course, via Twitter):

It seems his earlier hope that Saudi Arabia would increase its output by 2 million barrels a day were dashed. The Saudis said on Tuesday that they would increase production to offset what’s not coming into the market from Venezuela and Iran (whose oil markets have been hobbled by sanctions), but did not say by how much.

But, so far, that hasn’t lowered oil prices, largely because of the turmoil caused by Venezuelan and Iranian oil sectors, as well Libya pulling hundreds of thousands of barrels of oil out of the market as a result of upheaval there. This isn’t the first time Trump has taken a shot at OPEC this summer, apparently worried that higher gas prices will dissuade voters from voting Republican in November’s midterm elections:

After all, higher prices at the pump would counter the president’s narrative that all is well in the American economy, which he claims to have successfully revived with his (mostly corporate) tax cuts President Trump is also anxious to compel European allies to stop buying oil from Iran, which the Trump administration is trying to further isolate with sanctions and by pulling out of the 2015 nuclear deal signed between the United States, Iran, China, Russia, France, the United Kingdom, and Germany. Iran’s OPEC Governor Hossein Kazempour Ardebili on Thursday took a shot at President Trump’s comments, saying, “Your tweets have increased the prices by at least $10. Please stop this method.” Kazempour accused Trump of trying to ramp up tensions between Iran and its regional rival, Saudi Arabia. Iran, meanwhile, has renewed threats to close a major route for oil in the Persian Gulf. It has made similar threats in the past, prior to the 2015 nuclear deal.

Mueller Taps More Prosecutors to Help With Growing Trump Probe

(Bloomberg) — Special Counsel Robert Mueller is tapping additional Justice Department resources for help with new legal battles as his year-old investigation of Russian interference with the 2016 election continues to expand. As Mueller pursues his probe, he’s making more use of career prosecutors from the offices of U.S. attorneys and from Justice Department headquarters, as well as FBI agents — a sign that he may be laying the groundwork to hand off parts of his investigation eventually, several current and former U.S. officials said.

Mueller and his team of 17 federal prosecutors are coping with a higher-than-expected volume of court challenges that has added complexity in recent months, but there’s no political appetite at this time to increase the size of his staff, the officials said.

According to his most recent statement of expenditures, more money is being spent on work done by permanent Department of Justice units than on Mueller’s own dedicated operation. The DOJ units spent $9 million from the investigation’s start in May 2017 through March of this year, compared with $7.7 million spent by Mueller’s team. Mueller’s probe has come under attack from President Donald Trump and his allies who say it’s going on too long, expanding too far and costing too much. But the special counsel’s charter, issued by Deputy Attorney General Rod Rosenstein, includes investigating whether Trump or associates colluded with Russia and “any matters that arose or may arise directly from the investigation.”

Investigators in New York; Alexandria, Virginia; Pittsburgh and elsewhere have been tapped to supplement the work of Mueller’s team, the officials said. Mueller has already handed off one major investigation — into Trump’s personal lawyer, Michael Cohen — to the Southern District of New York. Mueller is dealing with the legal battles as he considers whether to subpoena Trump for an interview and as he accelerates his investigation into potential collusion. The first — and perhaps biggest — court case for Mueller is over his indictment of Trump’s former campaign chairman, Paul Manafort, for an array of financial crimes. Manafort is fighting the indictment in two federal courthouses, and he expanded his case last week to the U.S. Court of Appeals for the District of Columbia. Mueller indicted 13 Russian individuals and three entities in February on charges of violating criminal laws with the intent to interfere with the U.S. election through the manipulation of social media. None of the targets are in the U.S., but one of them, the Internet Research Agency, has forced Mueller into another legal fight in federal court. The two sides have been sparring most recently over how to protect sensitive investigative materials from disclosure. Mueller has enlisted prosecutors with the U.S. Attorney’s office in Washington to handle the case. Mueller also plans to move eventually to sentencing for Trump’s former national security adviser, Michael Flynn, and former foreign policy adviser George Papadopoulos, both of whom pleaded guilty to lying to investigators.

Chinese tariffs on U.S. goods to take effect at start of July 6 – source

BEIJING (Reuters) – China’s threatened tariffs on $34 billion (£25.75 billion) of U.S. goods will take effect from the beginning of the day on July 6, a person with knowledge of the plan told Reuters, amid worsening trade tensions between the world’s two largest economies. Washington has said it would implement tariffs on $34 billion of Chinese imports on July 6, and Beijing has vowed to retaliate in kind on the same day. However, the 12-hour time difference puts Beijing ahead in terms of actually implementing the tariffs. “Our measures are equal and being equal means that if the U.S. starts on July 6, we start on July 6,” the source told Reuters, who requested anonymity as they were not authorised to speak to media. “The implementation time for all policies starts at midnight.” China’s customs agency did not answer a phone call seeking comment, and its commerce ministry did not reply to a fax requesting comment. Speaking at a daily news briefing, Chinese Foreign Ministry spokesman Lu Kang said China was ready to act, though did not confirm the date Chinese tariffs may start. “China has already made preparations. As long as the United States issues a so-called tariff list, China will take necessary measures to firmly protect its legitimate interests,” Lu said, without elaborating. Chinese state media on Wednesday kept up its steady drum beat of criticism of the United States. The official China Daily said the United States was intentionally trying to prevent China from developing so it was unable to challenge the United States’ role in the global economic order. “The U.S. has maintained hegemony in the military and financial fields for many decades. Now it is pursuing economic hegemony,” the English-language newspaper said in an editorial. “It has frequently waged wars against other sovereign countries and made use of the dominant influence of the U.S. dollar in the international markets to fleece other countries. Now it is attempting to resort to an all-out trade and economic war to hold back China’s normal development.” Widely-read tabloid the Global Times, published by the ruling Communist Party’s People’s Daily, said the increasingly likely trade war would bring chaos to the world. “Counterstrike is major economies’ first reaction to Washington’s trade war,” it said in its editorial. “It’s hard to predict where these moves will lead the world, but Washington will unavoidably pay heavy prices for its attempts to change the whole world to its economic tributary.” U.S. President Donald Trump has threatened to escalate the trade conflict with tariffs on as much as $400 billion in Chinese goods if Beijing retaliates against the U.S. tariffs set to take effect on Friday. Chinese currency and stock markets have been jittery ahead of Friday’s tariff implementation.

Blame ‘superstar’ tech firms for slow wage growth: OECD

PARIS (Reuters) – Fast-growing “superstar” tech firms are taking a growing share of national income in many countries, leaving workers’ overall wage growth subdued, the Organization for Economic Cooperation and Development said on Wednesday.  Though unemployment in most OECD countries has returned to pre-crisis levels, wage growth has not, even though many labor markets have become the tightest they have ever been, the Paris-based policy forum said in its annual Employment Outlook. One legacy of the 2008-2009 global economic crisis is that many workers were forced to accept low-pay jobs afterwards, weighing on overall wage growth. The OECD said another factor was at play with overall productivity gains in most economies no longer translating into higher wages for all workers as they did in the past. The reasons for slow post-crisis wage growth has been one of the great economic debates in recent years as stronger labor markets have in the past fueled higher overall wages and thus higher inflation. Weighing into the debate, the OECD suggested what it called “superstar” firms could be partly to blame for weak wage growth, which slowed on average in OECD countries to 1.2 percent after accounting for inflation, down from 2.2 percent before the crisis. It said much of the productivity growth has been generated by a small of number of innovative firms that invest massively in technology but employ few workers compared to other more traditional companies. As a result, the overall share of national income going to workers, rather than investors, has declined on average in the OECD, led by the United States, Ireland, Korea and Japan.. “A key challenge for product market regulation and competition policy going forward will be to prevent emerging dominant players from engaging in anti-competitive practices,” the OECD said. Reporting by Leigh Thomas; editing by David Evans

The European Union have vowed to keep the pact alive despite Washington’s withdrawal.

US pressing allies to end Iran oil imports by November deadline, official says

Chinese Foreign Ministry spokesman Lu Kang said on  Tuesday that Beijing was opposed to unilateral sanctions when asked if China would buy less Iranian oil.China is Iran’s top trading partner and No 1 oil and non-oil buyer, as well as major investor. Last year, their two-way trade jumped 21 per cent from a year earlier to reach US$37.3 billion, while more than 200,000 trips were made between the two countries. Iranian officials said earlier that Tehran would not rule out the possibility of renegotiation with the US, or even a new deal, but also that China had a positive role to play in upholding the deal, and should boost economic cooperation with Tehran. But Hanegbi said Iran could not rely on China to offset the impact of US sanctions. “Iran will be down to its knees without anything to do with China. Companies will stop working with Iran because they understand they will lose American market,” he said. “China can be a replacement, but very limited.” China in recent years has boosted its presence in the Middle East through investment and infrastructure projects. China’s total investment in Israel in 2016 reached US$16 billion, almost triple that of the previous year. China National Technical Import and Export Corp is one of five shortlisted global consortiums vying for the first phase of an Israeli, Jordanian and Palestinian joint water project which includes a planned pipeline running from the coastal city of Aqaba by the Red Sea to the Lisan area in the Dead Sea in Jordan.

We are the casualty:’ US pig farmers brace for second round of pork tariffs from China, Mexico

U.S. pork producers are about to be bitten by a second batch of hefty retaliatory tariffs from China and Mexico — and that has some large producers predicting they could lose big money and be forced to invest overseas. Executives say the pork industry has been expanding in recent years, in part on the expectation of export opportunities that would continue to support growth. However, the threat of a trade war is adding uncertainty and driving fear. One in 4 hogs raised in the U.S. is sold overseas, and the Chinese are the world’s top consumers of pork.

“We put a halt on all investment, not just because we will be losing money, but because we don’t know if growing in the U.S. is the right move if we won’t be an exporting country,” said Ken Maschhoff, chairman of Maschhoff Family Foods and co-owner of the nation’s largest family-owned pork producer.

Maschhoff said the farm industry has been “asked to be good patriots. We have been. But I don’t want to be the patriot who dies at the end of the war. If we go out of business, it’s tough to look at my kids and the 550 farm families that look us into the eye and our 1,400 employees.” Mexico imposed a 10 percent tariff on chilled and frozen pork muscle cuts effective June 5, and that import tax is set to double to 20 percent on Thursday. Mexico’s retaliatory action followed the Trump administration’s duties on imported aluminum and steel. China, meantime, is scheduled to start collecting an additional 25 percent import duty Friday on American pork products as it targets $34 billion worth of U.S. goods in response to President Donald Trump’s action against Beijing for alleged intellectual property theft. China also is set to add tariffs this week on U.S. soybeans, corn, wheat, cotton, whiskey and dairy, as well as U.S. autos. Nearly $20 billion in U.S. agricultural exports went to China last year, with the more than half of that amount coming from soybeans. “It’s pretty apparent that these countries will go after, by and large, Trump supporters from a political base standpoint since items exported by red states are the ones being targeted,” said Maschhoff, a past president of the National Pork Producers Council and a fifth-generation hog producer.In April, China slapped U.S. pork imports with a 25 percent duty, in retaliation for the Trump administration’s steel tariffs. When combined with previous import levies, “the other white meat” will be subjected to import taxes that approach a whopping 71 percent cumulatively, according to Rabobank. And that’s without including the 10 percent VAT, or value-added tax, that China charges for the import of agricultural products.  Industry analysts say China’s high import tax essentially slams the door shut on U.S. pork imports into China, which will also begin collecting 25 percent tariffs for soybeans this Friday. “At 81 percent net tariff, you’re not moving any pork product into China,” said Christine McCracken, executive director of animal protein at Rabobank, a financial services firm for the agribusiness.

She added, “I would suspect by the end of the year hog producers will be losing quite a bit of money. Part of it is just surplus pork on the market. We’ve been in an expansion mode.”

According to Maschhoff, the tariff will result in a hit of $100 million for his Illinois-based family farm operation, which markets about 5.5 million hogs a year, and operates in 10 states.

China Mobile faces US ban over spying fears

The Trump administration has moved to block a state-owned Chinese wireless carrier from linking up with the US market, citing national security concerns.

China Mobile(CHL) wanted to provide cell phone and other communication services between the United States and other countries. It submitted an application for a license to US regulators back in 2011. On Monday, the National Telecommunications and Information Administration, a branch of the US Commerce Department, recommended that the Federal Communications Commission deny the request. The move against a high-profile Chinese company could add to the bitter dispute between Washington and Beijing over trade and technology.”Because China Mobile is subject to exploitation, influence, and control by the Chinese government, the Executive Branch believes that granting China Mobile’s application … would produce substantial and unacceptable national security and law enforcement risks,” the telecommunications agency said in a filing to the FCC. Giving China Mobile access to the US telecommunications market could lead to a spike in Chinese spying, it said. Phone calls or other communications from US government agencies to international destinations could pass through China Mobile’s network, even if the agencies are not customers of the operator, according to the filing. China Mobile, which has more than 900 million mobile customers, did not immediately respond to a request for comment Tuesday. The company wasn’t seeking to offer mobile services directly to US customers, according to the US filing.

Oil tops $75 for first time since 2014 and then plunges

Nick Note: Sell the Shit Out of OIL!!!!

  • U.S. crude rose above $75 a barrel for the first time since November 2014 on Tuesday, after Libya declared force majeure on some of its crude exports.
  • Production at Syncrude Canada’s 360,000 barrels per day (bpd) oil sands facility near Fort McMurray, Alberta, was hit by a power outage last month.
  • The Organization of the Petroleum Exporting Countries pumped 32.32 million bpd in June, a Reuters survey showed, up 320,000 bpd from May.
Oil market disruptions and limited supply can’t keep oil prices at bay   27 Mins Ago | 04:37

U.S. crude fell suddenly and sharply in mid-morning trade on Tuesday, after briefly topping $75 a barrel for the first time since November 2014 The American benchmark broke through the threshold as the market grew increasingly concerned about a shortage of oil amid supply disruptions in Libya and Canada and as tough U.S. sanctions on Iran loom.

“You’re starting to hear talk of oil shock. There is little confidence in the market that we’re going to escape an ever-tightening supply and demand balance now,” said John Kilduff, founding partner at energy hedge fund Again Capital  Exacerbating those surprise events, a Trump administration official told reporters that American diplomats are pushing oil buyers to cut off all purchases of Iranian crude by the beginning of November. A senior State Department official reaffirmed the tougher-than-anticipated policy on Monday.

After oil prices turned lower, analysts pointed to a report from Saudi Arabia’s state media agency saying the kingdom’s Council of Ministers, chaired by King Salman bin Abdulaziz, is ready to deploy the nation’s spare capacity to add more oil to the market. President Donald Trump has asked the king to raise output by as much as 2 million barrels per day.

OPEC, the Saudi-dominated group of 14 oil producers, reached an agreement with Russia and other exporters last month to raise output by about 1 million bpd. The Organization of the Petroleum Exporting Countries pumped 32.32 million bpd in June, a Reuters survey showed, up 320,000 bpd from May. The June total is the highest since January 2018. The UAE’s Abu Dhabi National Oil Co (ADNOC) said on Tuesday it could increase production by several hundred thousand barrels per day if needed.GasBuddy: Gas prices could head back to the 3 dollar a gallon level in the next 7 to 10 days   5 Hours Ago | 01:45 Higher output from Saudis Arabia, Russia and the United Arab Emirates, along with surging U.S. exports, will likely compensate for disruptions in Libya, Venezuela and Iran, said Roberto Friedlander, head of energy trading at Seaport Global Securities. Nick Bit: I want to be crystal clear here,….. Oil will wipe out and be in the forties faster then Morgan Stanley the oil manipulaters would have you believe.. Choose!

Trump Should Release SPR Oil Reserves on Monday

The speculators are at it again in the oil market, pushing up prices beyond the fundamentals. Sure the market is tighter than it was two years ago, but one look at gasoline inventories tells you there are more than ample petroleum supplies. In fact we have more gasoline inventories than a year ago, and we still have over 400 million barrels of oil in storage with both saudi arabia and russia now free to increase production limits going forward, something russia has been chomping at the bit to do the last year of the OPEC deal. Throw in the US Oil production near 11 million barrels per day at all time record levels, and things are not near as tight in the oil market as the oil bulls would have you believe right now.

How do you know there is a bunch of rampant speculation in the oil market beyond the fundamentals, just look at how many speculators ran from the market in front of the most recent OPEC meeting. We dropped from $72 a barrel all the way down to $64 a barrel in two weeks, most of the move coming in five short days. Why this is important is that nothing changed in the fundamentals during those five days or two weeks, what changed was event risk for the oil speculators. Rampant over speculation is nothing new in the oil markets, and is part of the problem with oil markets in general. Once the new money starts flowing into a market it brings in a lot of oil tourists causing prices to rise above the fundamentals. This happened in 2007 right before the economic collapse, and is helping further set the stage for the next economic collapse. Trump realizes the fact that higher gas prices offsets his tax cuts, and serves to undermine his stimulus boost for the economy.

And let’s face it Donald Trump and the Republicans best argument going into this November`s midterm elections is the economy, and higher oil and gas prices start biting into this argument. Donald Trump reached out to Saudi Arabia this weekend, and I am sure he will do the same with Russia as well in a couple of weeks with the Putin Summit. OPEC is going to increase production and some of the most recent oil outages are going to come back online. However we are in the heart of the summer driving season and refiners are maxing out utilization rates leading to more demand for oil from a seasonal standpoint. All of which will normalize again in the fall as refiners cut back demand for oil as they lower utilization rates, and some even go into maintenance mode as demand for oil is reduced in the market. The market could actually look rather bloated again in the fall if the US Production crosses over the 11 million barrel threshold, and Saudi Arabia and Russia both increase production rather dramatically.

The problem for Trump and the Republicans is that with the political environment as it is today the democrats are going to come out to vote in record numbers this November, and every day that higher gasoline prices hinder economic growth and cause a rise in the inflation numbers this is bad for Donald Trump and the Republicans main fallback argument in the great economy which they created. Higher gas prices and higher inflation are always bad for politicians, and Donald Trump understands this relationship.

If Donald Trump is smart he will release 100 million barrels of the Strategic Petroleum Reserves on the market ASAP and drive the oil speculators out of the market, causing oil and gas prices to plummet, and thereby stimulating the economy all over again with a massive tax cut for all consumers. This should play well for the voters as Donald Trump will have positively affected their collective pocketbooks with lower gas prices. This would actually be pretty smart because we would be selling reserves at near the top of the market, and we could buy them back in the future at much lower prices during the next economic recession. Plus with large global storage these days and massive diversified global production, with the US alone producing near 11 million barrels per day with the capabilities of going much higher in the future. The Strategic Petroleum Reserves aren`t near as relevant as they were back in the day when the United States got most of their oil from the middle east and basically stopped domestic oil production for all intents and purposes. A 100 million barrels release from the SPR will be meaningless in terms of government inventory levels given that we are at near record storage levels now at 660 million barrels in storage, and there was talk that Congress wanted to do this anyway because they wanted the funds for alternative uses. This would be a win win for the Trump administration and the Republican party, and of course all consumers at the gas pumps.

Asian factories lose momentum even before Trump’s tariffs kick in

Reuters Graphic

HONG KONG (Reuters) – Asian exporters lost momentum last month even before tariffs on U.S. and Chinese goods kick in this week, pressuring regional factory activity in a worrying sign the Trump administration’s “America First” protectionist policies could derail global growth. Shipments from China and Japan, major manufacturing hubs, contracted in June, while businesses across Asia also took on higher input costs as the price of oil and other commodities rose, according to monthly manufacturing surveys. A separate Bank of Japan survey showed business confidence among big manufacturers worsening for a second straight quarter, in a blow for Abenomics and the Bank of Japan’s plans to wean the economy off stimulus. Stocks eased and oil prices LCOc1 fell as data across Asia showed world trade might have peaked, suggesting the strain on regional economies is likely to intensify as the effects of the heated Sino-U.S trade war ripple through global supply chains. “We expect the net contribution of trade to growth to become negative in the second half of the year, if it hasn’t already for some countries,” ANZ Asia economist Eugenia Victorino said. “The story for 2018 then becomes domestic demand, but it is not a homogenous story … and we don’t expect a homogenous reaction from Asian central banks.” However, with the U.S. Federal Reserve increasingly hawkish on rates, hardly any Asian central bank has any room to support consumption as they need to keep their own rates relatively high to prevent destabilizing capital outflows. Apart from China potentially cutting reserve requirements further this year, no other central bank is seen easing monetary policy, and the countries running current account deficits may have to hike rates further. China’s Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) declined to 51.0 in June from May’s 51.1,with a subindex showing new export orders contracting for the third straight month and the most in two years. An official PMI survey on Saturday also fueled concerns about the strength of the world’s second largest economy, where recent data including credit growth, investment and retail sales have disappointed. The economy is feeling the pinch of an internal crackdown on debt and risky financing as well as external pressure from U.S. President Donald Trump’s ‘America First’ protectionist policies. The United States has threatened to impose duties on up to $450 billion of Chinese imports, with the first $34 billion portion set to go into effect on July 6. Beijing plans to retaliate. This has caused anxiety in financial markets, leading to the worst performance on record for the yuan and the deepest monthly fall in Chinese stocks since January 2016. Together with BOJ’s “tankan” survey, the data raises worries that the “Abenomics” stimulus program is sputtering just as the government and the central bank wanted to tap the brakes. The yen, seen as a safe haven, has gained on the back of the U.S.-China trade worries, further weighing on Japanese exporters.

Oil falls as OPEC output rises, more production planned

NEW YORK (Reuters) – Global benchmark Brent crude fell Monday as supplies from Saudi Arabia and Russia rose while economic growth stumbled in Asia amid escalating trade disputes with the United States. At the same time, U.S. crude strengthened mid-session, buoyed by concerns about supply levels at the Cushing, Oklahoma delivery hub. Cushing supplies are down partially due to an outage in Canada. Production at Syncrude Canada’s oil sands facility near Fort McMurray, Alberta is likely to remain offline at least through July, a Suncor Energy Inc spokeswoman reaffirmed on Tuesday. But while U.S. crude was bolstered by supply concerns, a flurry of announcements over the weekend unsettled oil markets. “There seems to be great uncertainty about how much oil will be added to the supply side of the market,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut, referring to how much Saudi Arabia’s spare capacity will be able to offset shortages around the world. “How this really is going to play out seems to be up in the air.” U.S. President Donald Trump tweeted on Saturday that Saudi Arabia’s King Salman bin Abdulaziz Al Saud had agreed to pump more oil, “maybe up to 2,000,000 barrels.” The White House later walked back the comments. Saudi Arabia’s output is up by 700,000 barrels per day (bpd) from May, a Reuters survey showed, and close to its 10.72 million bpd record from November 2016. Production from the Organization of the Petroleum Exporting Countries increased by 320,000 bpd in June, according to a Reuters survey published Monday. The 12 OPEC members with supply reduction targets increased output by 680,000 bpd compared to May. Russian output rose to 11.06 million bpd in June from 10.97 million bpd in May, the Energy Ministry said on Monday. UP 30 percent in the past two years, to 10.9 million bpd, meaning the world’s three biggest oil producers now churn out almost 11 million bpd each, meeting a third of global oil demand. China, Japan and South Korea all reported slowdowns in export orders in June amid escalating trade disputes with the United States. “Recurring salvos in the trade war and falling asset prices raise the question of how much tariffs could damage the global economy,” U.S. bank JPMorgan said. The bank said a “medium-intensity (trade) conflict would likely reduce global economic growth by at least 0.5 percent, “before accounting for tighter financial conditions and sentiment shocks.” Trump threatened in an interview that aired on Sunday to put sanctions on European companies that do business with Iran. “The Trump administration’s plan for Iran sanctions is now abundantly clear. They seek to push Iranian exports of crude, condensate, and oil products to zero,” energy consultancy FGE said in a note.

EU reportedly warns of new tariffs worth $300 billion if Trump targets automakers

A worker performs the final check of a BMW 3-series automobile on the production line, March 11, 2009.
Guenter Schiffmann | Bloomberg | Getty Images A worker performs the final check of a BMW 3-series automobile on the production line, March 11, 2009.

The United States could get a new round of retaliatory tariffs worth as much as $300 billion, if it moves ahead with new duties on European cars, the Financial Times reported. In a written statement to the U.S. Department of Commerce, seen by the news publication, the EU set out clear plans to respond to potential U.S. duties on European cars. According to the newspaper, European leaders are getting more convinced that President Donald Trump will put new tariffs on European cars. The written submission sent by the EU also highlighted that European-owned car brands represented more than a quarter of U.S. car production. It added that this was mainly focused on exportation and any tariffs would fragment markets, raise prices for the American consumer and potentially lead to job losses. Speaking to Fox News over the weekend, Trump said that the EU is “possibly as bad as China, just smaller” when speaking on trade deficits with other countries. He added: “It is terrible what they do to us.”

Mexican leftist Lopez Obrador wins presidency

MEXICO CITY (Reuters) – Andres Manuel Lopez Obrador decisively won Mexico’s presidency on Sunday, exit polls showed, setting the stage for the most left-wing government in decades at a time of tense relations with the Trump administration. Pledging to eradicate corruption and subdue drug cartels with a less confrontational approach, the 64-year-old former Mexico City mayor will carry high expectations into office even as his efforts to reduce inequality are watched closely by nervous investors. A Lopez Obrador government could usher in greater scrutiny of foreign investment and a less “The people wanted a change,” said Ricardo Anaya, a former head of the center-right National Action Party (PAN) who was one of Lopez Obrador’s challengers. Exit polls forecast Anaya was likely to finish second, ahead of ruling Institutional Revolutionary Party (PRI) candidate Jose Antonio Meade. The United States, which has been at odds with Mexico and Canada over the renegotiation of the North American Free Trade Agreement (NAFTA), has launched a probe into whether to slap tariffs on imported autos. Results are expected within months. How Lopez Obrador handles relations with Trump, who has also sparred with Mexico over the U.S. president’s call for a wall on the U.S.-Mexican border, will help define the new administration which will take office on Dec. 1. “We have witnessed today a very profound reshaping of the country’s political map,” Goldman Sachs economist Alberto Ramos said. “The balance of power at the federal and local levels has definitely shifted to the left, with unclear implications for the near-term policy direction.”. The outgoing government changed the constitution to attract more capital to the industry, but Lopez Obrador, who hails from an impoverished part of Mexico where oil exploitation began, has vowed to review the policy. Born in Tabasco state, Lopez Obrador first came to global attention as Mexico City mayor, a post he left to run for president in 2006. Narrowly losing, he cried fraud and launched street protests many thought would end his political career. However, with stubborn self-belief, he began a long journey back to prominence, tirelessly visiting far-flung villages and towns neglected by mainstream politicians for decades. His victory is a stinging rebuke to the PRI, which has governed Mexico for 77 of the past 89 years, and its conservative rival, the PAN. Hammering home a message that he alone could end a “mafia of power” and root out corruption that marred outgoing President Enrique Pena Nieto’s government, Lopez Obrador’s star has risen amid the scandals and Mexico’s descent into dizzying levels of violence, which at times draws comparisons with war zones.

Canada retaliatory tariffs on US goods come into force

 Image copyright Reuters caption Canada’s Foreign Minister Chrystia Freeland said the country ‘won’t back down’ in the trade dispute

Canada’s countermeasures against the Trump administration’s steel and aluminium levies have come into effect. On Sunday, the day the country celebrates its national holiday, Canada imposed a 25% tariff on assorted US metals products. Tariffs of 10% have also been imposed on over 250 other US goods like beer kegs, whiskey and orange juice. Canada-US trade tensions are high amidst the metals levies and North American Free Trade Agreement talks. The tit-for-tat duties are estimated to total C$16.6bn (£9.5bn), representing the 2017 value of Canadian metals exports affected by the US measures. Senior Canadian officials say the list is designed to exert political pressure on the US and make it take notice of how this will affect trade. They have called the steel and aluminium levies against Canada, the European Union and Mexico imposed a month ago by the Trump administration “illegal” and “unjustified”. On Friday, Canada also announced it would make C$2bn available to defend the steel and aluminium industry, including funds to support affected businesses. “Our approach is and will be this: we will not escalate and we will not back down,” Foreign Minister Chrystia Freeland said while announcing the funds. The EU and Mexico have already imposed their own counter-tariffs on American goods. EU’s duties on £2.4bn ($3.1bn) of products such as bourbon whiskey, motorcycles and orange juice took effect on 22 June. Mexico put tariffs on $3bn worth of American products ranging from steel to blueberries and bourbon. The tariffs, which provoked international outrage, have also triggered complaints against the US to the World Trade Organization (WTO) and to North American Free Trade (Nafta) dispute panels. The relationship between Canada and the US is strained following attacks this month by US President Donald Trump against Justin Trudeau after the Canadian prime minister declared that his country would not “be pushed around” by the Americans on trade. Beyond Nafta and the metals levies, there have been disputes over issues such as lumber, dairy and wine.  More tariffs could be on the horizon.

In May, Mr Trump ordered a national security probe into vehicle imports, which could bring tariffs on autos and auto parts.

Earlier this week, US Trade Representative Robert Lighthizer criticised the retaliatory tariffs imposed by the EU and other countries against the US measures. “These retaliatory tariffs underscore the complete hypocrisy that governs so much of the global trading system,” he said.

Notorious criminal uses helicopter in spectacular French prison break

© Geoffroy Van Der Hasselt, AFP | The Alouette II helicopter that Faid used for his prison break was found abandoned in Gonesse, north of Paris, on Sunday July 1, 2018

A notorious career thief who was once France’s most-wanted man pulled off a daring jailbreak on Sunday, fleeing a prison in the Paris area by helicopter, officials said.

Redoine Faid, 46, broke out of the prison in Reau in the city’s southeastern suburbs within minutes, helped by a number of heavily-armed men, sources close to the case said.  The escape came after an appeals court sentenced him to 25 years for masterminding a May 2010 botched armed robbery, in which a policewoman was killed. Faid fled on Sunday with three accomplices, according to the sources.  The helicopter was later found in a northeastern suburb of the French capital, they said, adding that a police search has been launched across the entire Paris region.

It is the second time Faid has pulled off a spectacular jailbreak — in 2013, he blasted his way out of a prison in northern France using dynamite.

He had been in prison since mid-2011 for breaking the terms of his parole over past convictions for bank robberies and brazen heists of cash-in-transit vehicles. Armed with a pistol, he briefly took four guards hostage before escaping in a waiting getaway car. All the hostages were released unharmed. Faid was eventually recaptured six weeks later at a hotel in an industrial area on the outskirts of Paris.  A woman working at the hotel told AFP at the time that Faid’s accomplice had paid for the room in cash and that the two men had been there for several days. Prior to the 2013 escape, Faid had been released from a previous stint of a decade behind bars after convincing parole officials that he regretted his criminal past and was determined to start afresh. Faid, who grew up in tough immigrant suburbs outside Paris, has made several television appearances and co-authored two books about his delinquent youth and rise as a criminal in the Paris suburbs. He said his life of crime was inspired by American films such as “Scarface” and “Heat”.

Trump: US will ‘absolutely’ sanction European companies that do business with Iran

Trump: US will 'absolutely' sanction European companies that do business with Iran

President Trump said Sunday that the U.S. will “absolutely” sanction European companies that do business with Iran. Trump said on Fox News’s “Sunday Morning Futures” that European companies will face consequences as a result of the U.S. withdrawing from the Iran nuclear deal. “Yes, of course. That’s what we’re doing. Absolutely,” the president responded when asked if the U.S. would sanction European companies that do business with Iran.Trump announced earlier this year that he would pull the U.S. out of the pact, which offered Tehran sanctions relief in exchange for curbing its nuclear program. The White House has said the U.S. will put those sanctions back into place. As a result of those sanctions, companies that do business with Iran could face penalties from the U.S. It was previously unclear if the U.S. would penalize European nations that chose to remain in the Obama-era agreement. In May, national security adviser John Bolton said “it’s possible” the U.S. would consider imposing sanctions on European nations that continue to honor the deal.  “It depends on the conduct of other governments,” Bolton said.

Trump’s comments on Sunday mark an escalation of his already controversial trade policies toward the United States’s European allies.

The president has attracted widespread criticism from Republicans, Democrats and international leaders over his decision to enact steep tariffs on imports of steel, aluminum and other products from the European Union, Canada, Mexico and other countries. The Trump administration’s policy has prompted other nations to implement retaliatory tariffs, raising concerns of a global trade war

Trump: Harley-Davidson ‘going to take a big hit’ for moving some production overseas

President Trump on Sunday predicted that Harley-Davidson is going to take “a big hit” for moving some of its motorcycle production overseas. Trump told Fox News’s Maria Bartiromo on “Sunday Morning Futures” that he did not agree with the company’s decision to shift away from domestic production, renewing his claims that the motorcycle manufacturer shouldn’t “get cute.” “I think they’re going to take a big hit,” Trump said. “I really believe that Harley’s going to take a — the people that are buying Harley-Davidson, they don’t want it built in another country.” Trump cautioned against Harley-Davidson moving overseas, stating, “I think that Harley is an American bike. It’s an American motorcycle and they should build them in this country.” The president went on to claim that everybody who ever bought a Harley-Davidson voted for him in the 2016 presidential election. “Those are my voters. They don’t want Harley-Davidson getting cute to make $2 more,” he said. Trump’s tone toward Harley-Davidson has vacillated in recent days since the company’s announcement, shifting from condemnation to pleas for the company to keep its production in the U.S. “Harley-Davidson should stay 100% in America, with the people that got you your success,” Trump tweeted on Wednesday. “I’ve done so much for you, and then this. Other companies are coming back where they belong! We won’t forget, and neither will your customers or your now very HAPPY competitors!” The president also pleaded with the company this week to keep its production domestic. “We want to tell, by the way, Harley-Davidson, please build those beautiful motorcycles in the USA, please, OK? Don’t get cute with us. Don’t get cute,” Trump said. Harley-Davidson, in a filing on Monday, cited the European Union’s (EU) move to implement tariffs on motorcycles imported from the U.S. as its reasoning behind outsourcing production. According to documents, the company said tariffs on its motorcycles rose from 6 percent to 31 percent in recent weeks. The tariffs came in response to the Trump administration’s move to implement steep steel and aluminum tariffs on the EU and other countries.

Saudi Arabia can pump much more oil

An oil tanker is being loaded at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. REUTERS/Ahmed

LONDON(Reuters) – The leader of Saudi Arabia has assured U.S. President Donald Trump that the Kingdom can raise oil production if needed and the country has 2 million barrels per day of spare capacity that could be deployed to help cool down oil prices to compensate for falling output in Venezuela and Iran. In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase output by up to this amount, although a subsequent statement from the White House rowed back on this assertion. Either way, the kingdom, OPEC’s biggest member, can barely raise output by 1 million bpd to 11 million bpd and even that would be difficult, according to industry analysts who forecast a further oil price rally due to a lack of new supply.

Reuters Graphic

“We are seeing another strong signal from the two of the world’s three largest producers to cap the price upside in oil. With Russia agreeing to this we are seeing political interference in the setting of oil prices on the rise. Saudi Arabia agreeing to such a request basically raises the risk that OPEC has played out its role with Saudi, Russia and the U.S. are now setting the agenda.” “In the short-term, however, a busy night on Sunday can be expected, with traders and funds getting caught on the long side. Not least in WTI, where we saw a collapse in the gross short last week while the net-long jumped by 25 percent and the long/short ratio hit a 7-year high.” “Prices are likely to become more volatile over the coming months, caught between two narratives: Oversupply concerns and dwindling spare capacity/oil market tightness concerns.” Nick Bit: I want to be clear here. The world which is slipping into a recession cannot stand oil at these levels. It has been decided they will FOR SURE bring the oil price lower much much lower. And i want you their for this coming oil bust. This is a BIG trade and i want you in it call me!

Scaramucci warns Trump must ‘change tactics now’ on trade

Former White House communications director Anthony Scaramucci took aim at President Trump’s ongoing trade feuds on Saturday, saying he was worried that trade rhetoric was “going too far.” “Spent the day reading: I am worried about the trade rhetoric going too far,” Scaramucci tweeted Saturday. “Signs are there: capital is starting to [withdraw] from stocks. The [markets] are signaling a lot more risk the flash 2q GDP report which may be a one time moonshot followed by the Big unwind.” Scaramucci added that Trump needed to “change tactics now.”

Trump has helped drive an escalating trade war with some of the United States’s closest longtime trade allies since his announcement last month that the U.S. would impose stiff tariffs on steel and aluminum imports from the European Union, Canada and Mexico. Following the announcement, the U.S. was hit was retaliatory tariffs from those countries on a number of products like motorcycles and blue jeans. Two American motorcycle companies — Harley-Davidson and Polaris — have since said they might be forced to move some production overseas due to the tariffs. Trump is scheduled to meet with European Commission President Jean-Claude Juncker next month amid the trade feud. Scaramucci, who left his role as White House communications director in July 2017, has defended Trump’s record since leaving the administration. He slammed Trump recently, however, for the “inhumane” and “cruel” “zero tolerance” immigration policy that led to the separation of more than 2,000 migrant children from their parents upon being apprehended at the U.S.–Mexico border.

Greenlight Capital suffers 7% drop in June, and is down over 18% this year

  • Greenlight Capital suffered new losses in June, and the fund is down more than 18 percent year to date.
  • Billionaire fund manager David Einhorn said the firm, which has bet against car maker Tesla, was “frustrated” by the results.
David Einhorn
David A. Grogan | CNBC David Einhorn

Billionaire investor David Einhorn on Friday told clients that his Greenlight Capital hedge fund suffered fresh losses in June and has now dropped 18.3 percent this year. “We are obviously frustrated by our results,” Einhorn wrote to clients in a performance update seen by Reuters. In June the fund fell 7.1 percent, the update said. Einhorn did not say which bets hurt the portfolio the most but many of his top holdings, including General Motors, fell. Einhorn has also been betting against a number of stocks including electric vehicle maker Tesla, which rose in June. A spokesman could not be reached for comment. The S&P 500 is up 1.7 percent for the year. Many hedge fund managers have said that increased market volatility sparked by fears about rising interest rates and possible trade wars could help improve their returns.

Carrier USS Harry S. Truman Operating in the Atlantic as Russian Submarine Activity is on the Rise

USS Harry S. Truman (CVN-75) conducts a strait transit. Truman is currently deployed as part of an ongoing rotation of U.S. forces supporting maritime security operations in international waters around the globe on April 27, 2018. US Navy Photo

The aircraft carrier USS Harry S. Truman (CVN-75) has left the Mediterranean Sea and is now operating in the Atlantic Ocean, a defense official confirmed to USNI News. This week the carrier, the embarked Carrier Air Wing 1 and some of its escorts passed through the Strait of Gibraltar into the Atlantic after spending several days in port in Marseille, France. “As a matter of longstanding policy, we do not discuss future operations, but I can tell you that the Harry S. Truman Carrier Strike Group will continue to conduct operations in support of our NATO allies, European and African partner nations, coalition partners, and U.S. national security interests,” Cmdr. John Perkins, a spokesman with U.S. Naval Forces Europe and Africa, told USNI News. The move to the Atlantic is arguably a continued expression of two constituent themes in the Pentagon as of late: a return to great power competition outlined in new strategic planning documents, and the direction from Secretary of Defense James Mattis that U.S. forces need to be “strategically predictable and operationally unpredictable.” In terms of great power competition, there is growing evidence that Russia continues to push its newest attack submarines to operate the North Atlantic at a pace not seen since the Cold War, Navy leaders have continued to stress publicly.

Russian submarine Severodvinsk

“Russian submarines are prowling the Atlantic, testing our defenses, confronting our command of the seas, and preparing the complex underwater battlespace to give them an edge in any future conflict,” current U.S. Naval Forces Europe-Africa commander Adm. James Foggo wrote in U.S. Naval Institute’s  Proceedings in 2016. “Not only have Russia’s actions and capabilities increased in alarming and confrontational ways, its national-security policy is aimed at challenging the United States and its NATO allies and partners.” Chief of Naval Operations Adm. John Richardson has also alluded to an increased Russian submarine presence in public statements about the need for the Navy to operate differently in a new era.

Surprise deal to boost world oil supply could ‘stir the pot’ in the Middle East

Saudi Arabia's King Salman bin Abdulaziz Al Saud (2nd L) welcomes U.S. President Donald Trump to dance with a sword during a welcome ceremony at Al Murabba Palace in Riyadh, Saudi Arabia May 20, 2017.
Jonathan Ernst | Reuters Saudi Arabia’s King Salman bin Abdulaziz Al Saud (2nd L) welcomes U.S. President Donald Trump to dance with a sword during a welcome ceremony at Al Murabba Palace in Riyadh, Saudi Arabia May 20, 2017.

An impromptu agreement between the United States and Saudi Arabia to add more supply to increasingly tight oil markets is perceived as a test of the kingdom’s ability to pump more crude — and could further antagonize Iran and Venezuela, as both countries grapple with deteriorating conditions in their respective economies.

Barely a week after OPEC’s decision to ramp up oil supplies, President Donald Trump surprised the world on Saturday by announcing a new side agreement with the Saudis to smooth over supply shortages from crisis-hit producers, Iran and Venezuela. Both countries resisted the oil cartel’s decision last month’s agreement, even though OPEC demurred on how much it would boost supply.

The president and King Salman agreed that Saudi Arabia would add more output to a market that’s seen crude shoot to its highest level in more than 3 years above $74 per barrel.According to Trump, the world’s largest oil producer will inject up to 2 million barrels a day to world oil markets  Gas prices have risen in tandem with crude, ramping up political pressure on Trump as he fights a multi-front trade dispute that has roiled markets and threatens the global growth outlook. Separately, the agreement is also fraught with geopolitical consequences. Iran — which along with Venezuela resisted OPEC’s deal to ramp up capacity — is being targeted with a new round of sanctions meant to squeeze the government Tehran. The U.S.-Saudi accord would “most certainly anger the Iranians, who just left OPEC confab last week with an agreement that production would not be raised. Given that Saudi Arabia had to cajole Iran and Venezuela to agree to an output boost last week, the new deal may be seen as “attempt to stir the pot in the Middle East,” Kilduff added. Saturday’s news underscored how politics are as decisive as economic fundamentals in determining oil prices and supply. As relations between the U.S. and Russia – the world’s second largest crude producer— have hit a nadir, Saudi Arabia is a touchstone of America’s limited ability to exert influence over the oil cartel. With world oil prices are spiking, Russian and Saudi officials closed ranks at the OPEC meeting, declaring a willingness to stabilize world oil markets by increasing supply. “Riyadh and Moscow are calling the shots, being the largest producers with the capacity to adjust output readily and in size,” wrote Konstantinos Venetis, senior economist at research firm TS Lombard Research, in a note earlier this week. That position, however, isolated some OPEC countries eager to reap more revenue from higher prices.

As Iranian supply is squeezed by sanctions and Venezuela’s production hampered by a relentless deterioration in its economy, “Saudi Arabia with the [Gulf Cooperation Council Countries] and Russia are easily able to take up this kind of slack – Aramco alone has spare capacity of 2 million barrels per day, according to its CEO,” Venetis said, referring to Saudi’s massive public oil giant. Nick Bit: i LOVE this oil trade…….. We are about to have more fun then a wolf i a chicken coop!

EU leaders unite over Trump tariffs, foreign investments

EU leaders take part in a European Union summit in Brussels, Belgium June 28, 2018. Stephanie Lecocq/Pool via REUTERS

 

BRUSSELS (Reuters) – European Union leaders pledged on Friday to react firmly against protectionism and called for a new EU law to screen foreign investments, with Washington and Beijing clearly in mind.  The leaders, meeting in Brussels for a crucial summit focussed more on migration, said the U.S. import tariffs imposed on EU steel and aluminium could not be justified and supported the European Commission’s legal challenge and the duties set on U.S. products.

“The EU must respond to all actions of a clear protectionist nature,” the leaders said in written conclusions to their meeting.

The conclusions backed by the leaders said Europe would continue to negotiate ambitious free trade agreements with partners – after provisional deals struck in the past 12 months with Japan and Mexico. The bloc is still seeking a trade deal with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay and will start talks in July with Australia and New Zealand. However, there were also lines showing the European Union wants to protect its own industries and retain technologies in the face of what it sees as unfair competition. The European Commission last year proposed that it should be allowed to scrutinize foreign investments amid rising concern about Chinese acquisitions on the continent. The European Parliament, which wants tougher screening, and the 28 member states, many of whom favour a lighter touch, have agreed common positions ahead of negotiations with each other expected to start next month and last at least until the end of 2018. The EU leaders called for a legislative proposal to be adopted as soon as possible. The European Union countries have also committed themselves to driving reform of the World Trade Organization to ensure trade is both free and fair.

GM warns U.S. import tariffs could lead to ‘smaller’ company, fewer jobs

(Reuters) – General Motors Co (GM.N) warned on Friday that expansive U.S. tariffs on imported vehicles being considered by the Trump administration could lead to a “a smaller GM” with fewer jobs while isolating U.S. businesses from the global market. The Trump administration in May launched an investigation into whether imported vehicles posed a national security threat, and U.S. President Donald Trump has repeatedly threatened to quickly impose a 20 percent import tariff on vehicles. The largest U.S. automaker said in comments filed with the U.S. Commerce Department that overly broad tariffs could “lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less — not more — U.S. jobs.” GM, which makes some vehicles for the U.S. market in Mexico and Canada, said the tariffs could hike vehicle prices and reduce sales. Even if automakers opted not to pass on higher costs “this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies,” GM said. GM operates 47 U.S. manufacturing facilities and employs about 110,000 people in the United States. It buys tens of billions of dollars worth of parts from U.S. suppliers every year, and has invested over $22 billion in U.S. manufacturing operations since 2009.

“The overbroad and steep application of import tariffs on our trading partners risks isolating U.S. businesses like GM from the global market that helps to preserve and grow our strength here at home,” GM said.

Some aides have said that Trump is pursuing the national security probe to put pressure on Canada and Mexico to agree to concessions in talks to renegotiate the North American Free Trade Agreement. On Wednesday, two major auto trade groups warned that imposing up to 25 percent tariffs on imported vehicles would cost hundreds of thousands of auto jobs, dramatically hike prices on vehicles and threaten industry spending on self-driving cars.

Protestors March Across US Over Immigration Policy

Image: Protestors March Across US Over Immigration Policy
(Alex Edelman/AFP/Getty Images) Saturday, 30 June 2018 12:30 PM

Thousands of protesters across America, moved by accounts of children separated from their parents at the U.S.-Mexico border, marched Saturday — in major cities and tiny towns — to demand President Donald Trump’s administration reunite the divided families. More than 700 planned marches are expected to draw hundreds of thousands of people across the country, from immigrant-friendly cities like Los Angeles and New York to conservative Appalachia and Wyoming under the banner Families Belong Together. Thousands dressed in white and gathered early Saturday morning in sweltering 90-degree heat in Lafayette Park across from the White House in what was expected to be the largest of the day’s protests. “What’s next? Concentration Camps?” one marcher’s sign read. “I care, do you?” read another, referencing a jacket the first lady wore when visiting child migrants amid the global furor over the administration’s zero-tolerance policy that forced the separation of more than 2,000 children from their parents. Her jacket had “I really don’t care. Do you?” scrawled across the back, and that message has become a rallying cry for Saturday’s protesters. “We care!” marchers shouted outside city hall in Dallas. Organizer Michelle Wentz says opposition to the administration’s “barbaric and inhumane” policy has seemed to cross political party lines. Marchers carried signs that read “Compassion not cruelty” and “November is coming.” “Honestly, I am blown away. I have literally never seen Americans show up for immigrants like this,” said Jess Morales Rocketto, political director at the National Domestic Workers Alliance, which represents nannies, housekeepers and caregivers, many of whom are immigrants. “We just kept hearing over and over again, if it was my child, I would want someone to do something.” Tweeting from New Jersey, Trump said that Democrats “are making a strong push to abolish ICE, one of the smartest, toughest and most spirited law enforcement groups of men and women that I have ever seen.” He urged ICE agents to “not worry or lose your spirit.” Immigration attorney Linda Rivas said groups have met with U.S. authorities, congressional representatives and other leaders to discuss an escalating immigration crackdown that they say began decades ago. But the family separation policy has been a watershed for attracting a broader spectrum of demonstrators, she said. “To finally have people on board wanting to take action, marching, taking to the streets,” Rivas said. “It’s been motivating for us as advocates because we have to keep going.”

Top ICE Lawyer Sentenced to Four Years in Prison For Stealing Immigrants’ Identities

Raphael A. Sanchez used to have quite the cushy job. He was chief counsel for U.S. Immigration and Customs Enforcement in Seattle. Now, he’s been sentenced to four years in prison. In February of this year, Sanchez was charged with stealing the identities of seven immigrants. According to the indictment:

[Sanchez] did knowingly transfer, possess, and use, without lawful authority, a means of identification of another person, including the name, Social Security number, and birth date…during and in relation to a felony…wire fraud.

Specifically, Sanchez’s scheme involved opening credit cards and taking out loans using the personal information of undocumented immigrants who had been targeted by ICE and were undergoing immigration proceedings. This vulnerability–being run through the byzantine U.S. immigration system–made it difficult for the immigrants targeted to detect the theft. Sanchez’s use of stolen information was also charged as wire fraud over the various banks and other financial institutions who were taken advantage of during the scheme. After being caught, he resigned. Three days later, he took a plea deal admitting to all of the accusations against him. On Thursday, Sanchez’s plea deal was finally signed off on by a federal judge.While overseeing ICE’s legal office office in Seattle, Sanchez’s responsibilities bore directly on his criminal scheme. He was in charge of overseeing immigration removal cases in various states. Prosecutors said this made his targets “particularly vulnerable given their status as deported or otherwise excludable.” The scheme lasted from 2013 to 2017. During this time, Sanchez was already being paid $162,000 per year by the federal government. His net worth hovered around $700,000. Still, he found the time to open bank accounts, utility service accounts and email accounts using names, birthdates, Social Security numbers and more that he stole from ICE databases. Then he created fake drivers’ licenses.

A press release from the Department of Justice notes:

Once the accounts were approved and opened, Sanchez made charges or drew payments totaling more than $190,000 in the names of aliens to himself or entities that he controlled, often using PayPal and mobile point-of-sale devices from Amazon, Square, Venmo and Coin to process the fraudulent transactions. In a number of cases, Sanchez purchased goods online in the names of aliens and had them shipped to his residence. Sanchez also employed credit-monitoring services and corresponded with credit bureaus in the names of aliens to conceal his fraud scheme. Sanchez also claimed three aliens as relative dependents on his tax returns for 2014, 2015, and 2016.

A court filing from June 12 details additional shocking behavior in furtherance of the scheme. According to prosecutors, “Sanchez affixed his own photograph onto the forged identification documents using the information of male Victim Aliens. To forge female Victim Aliens’ identifications, Sanchez was even more brazen: he used the photograph of a murdered woman published in press accounts and the names of female Victim Aliens.” As part of his sentencing, Sanchez will be forced to pay $190,000 in restitution to the various aggrieved parties.

Comcast Blames Widespread Service Outage on Cut Fiber Lines

The company, which has more than 29 million business and residential customers, says it restored services

An employee demonstrates the Xfinity app at Comcast Corp. headquarters in Philadelphia in October 2016.
An employee demonstrates the Xfinity app at Comcast Corp. headquarters in Philadelphia in October 2016. Photo: Charles Mostoller/Bloomberg News

Cuts to two fiber lines caused a widespread system failure at cable giant Comcast Corp. CMCSA 0.55% on Friday that knocked out cable, internet and phone services around the country. It was unclear how many customers were affected as the system failure, which appeared contained to Comcast’s network, also disrupted connectivity services such as Netflix Inc. and Okta Inc. as other internet service providers routed internet traffic through Comcast’s network, according to network-monitoring firm ThousandEyes. Philadelphia-based Comcast, one of the dominant telecom companies in the U.S. with more than 29 million business and residential customers, said the lines damaged are owned by CenturyLink Inc. and Zayo Group Holdings Inc. A spokeswoman for CenturyLink issued a statement saying CenturyLink’s network was working normally, though the company had “experienced two isolated fiber cuts in North Carolina affecting some customers that in and of itself did not cause the issues experienced by other providers.” The spokeswoman didn’t comment further. A spokesman for Zayo said the company experienced a fiber cut in the New York area but all services had been since restored. Fiber networks, which make up the backbone of the internet, transmit vast amounts of internet traffic, processing everything from online purchases to 911 calls. Down Detector and Outage.Report, two websites that monitor the running of consumer-technology services, ranked the system failure as extreme and posted maps indicating large numbers of customers affected in the New York, Philadelphia and Washington, D.C., metro areas as well as San Francisco, Chicago and Denver. Reports of outages, according to the websites, spiked early Friday afternoon.

It’s been decades since the White House has warned the Fed the way Kudlow just did

Senior Bush blamed Fed for his 1992 defeat
Getty Images National Economic Council Director Larry Kudlow speaks during an interview in front of the White Hous

It has been a long time —the early 1990s in fact— since a White House tried to influence Federal Reserve policy the way Trump economic advisor Larry Kudlow did on Friday. In an interview with Fox Business Network, Kudlow jawboned the Fed, saying: “My hope is that the Fed, under its new management, understands that more people working and faster economic growth do not cause inflation.” “My hope is that they understand that and that they will move very slowly,” he added. It was the senior advisers to President George Bush, particularly Treasury Secretary Nicholas Brady, who pushed the Fed to cut rates at a faster pace in the run-up to the recession that lasted from July 1990 until March 1991. In fact, Bush blamed former Fed Chairman Alan Greenspan for his defeat to Bill Clinton in 1992. Financial markets were roiled by Brady’s warnings, said Lewis Alexander, chief economist at Nomura.  “The sense that the Fed was being criticized by the administration undermined the market’s confidence in the Fed’s ability to anchor inflation expectations,” Alexander said. This was reflected in higher interest rates. In light of this experience, Robert Rubin, Clinton’s Treasury secretary, instituted the practice that administration officials should not comment of Fed policy. This gentlemen’s agreement lasted, on the whole, through the George W. Bush and Obama administrations. To be fair, most of this period Fed interest-rate policy during this period was trying to support economic growth, not take away the punch bowl. The Fed is now attempting to slow the economy down with steady rate hikes but has said it will move at a gradual pace. Robert Brusca, chief economist at FAO Economics, said Kudlow has probably notices that Fed Chairman Jerome Powell “has moved a little bit more to the side of the hawks than Yellen.” Powell has signaled the Fed will continue to hike rates at a once-per-quarter pace, despite warnings from doves at the central bank that the market is signalling caution.

In particular, the yield curve has been flattening, with the spread between 2-year notes TMUBMUSD02Y, +0.81%  and 10-year notes TMUBMUSD10Y, +0.61% at the lowest level since 2007.

The curve is a line that plots yields across all debt maturities. It typically slopes upward. A flatter curve can signal concern about the outlook. An inverted curve is an accurate predictor of recessions. Powell and other Fed officials have said that times are different and the yield curve may not be the signal it once was. But St. Louis Fed President James Bullard on Thursday said he didn’t know why the Fed wanted to “test this theory” by continuing to push short-term rates higher. Brusca said Kudlow was trying to “guide the Fed’s eyes” to the yield curve signal. “I’m sure Larry was trying to send smoke signals. He’s trying to explain it to them,” Brusca said.

Dollar lower on euro strength

 
Getty Images

The euro climbed against major rivals on Friday, after the European Union reached a deal over the divisive issue of refugees, removing some political risk that is been hanging over the shared currency. German Chancellor Angela Merkel had been calling for an EU-wide deal on migration at the summit in Brussels. After nine hours of talks, a deal was reached early Friday to aid coastline countries such as Italy, by redistributing some of the migrants rescued in the Mediterranean. “The agreement takes a lot of the pressure off not just the EU as a whole but specifically off German Chancellor Merkel, who was under intense pressure from her interior minister to do something to stem migration. The agreement probably means no further worries about her coalition falling apart. It is therefore positive for the euro,” said Marshall Gittler, chief strategist at ACLS Global. Italy had been vowing to veto a joint statement over the summit unless EU members find a new way to deal with migration, and that situation had been weighing on the euro. As well, Merkel had been under pressure at home from the more conservative Bavarian sister party of her Christian Democrats—the Christian Social Union—over this issue. Brexit will also be on the agenda at the Brussels summit, but with the U.K. still unclear about its desired post-divorce relations with the continent, the meeting is expected to yield little progress. The British pound  dropped to its lowest level since early November 2017, buying $1.3110, compared with $1.3078 on Thursday.

Can Trump Counter Soaring Gasoline Prices?

Ethanol plant

Oil prices surged to their highest level in more than three years on Thursday, as the number and volume of supply outages continues to rise. The odds of a significant shortfall in supply are also growing by the day. With U.S. midterm elections nearing, the more oil prices continue to rise, the more likely it is that President Trump decides to tap the strategic petroleum reserve (SPR) to tamp down oil prices just ahead of the November vote. The 180-degree turnaround in the oil market from May is pretty staggering, even for an oil market steeped in volatility and uncertainty. In late May, rumors of higher output from Saudi Arabia and Russia led to a crash in prices, and led to speculation of another lengthy downturn. By late June, however, it isn’t clear that even a massive 1-million-barrel-per-day increase from OPEC+ will be enough to fill the worsening supply gap. That means higher oil prices are likely. WTI has spiked by about $8 per barrel since last week, and continues to climb higher. “We are in a very attractive oil price environment and our house view is that oil will hit $90 by the end of the second quarter of next year,” Hootan Yazhari, head of frontier markets equity research at Bank of America Merrill Lynch, said. “We are moving into an environment where supply disruptions are visible all over the world… and of course President Trump has been pretty active in trying to isolate Iran and getting U.S. allies not to purchase oil from Iran,” he added. As has been widely reported, the Trump administration has aggressively pressed Saudi Arabia to boost output to offset declines from Iran. Saudi Arabia has complied, promising to ramp up output to about 11 mb/d in July, up from less than 10 mb/d in May. It’s an astounding increase, both in terms of volume and the speed of the increase. But it still might not be enough. Outages in Libya, Venezuela, Iran, Canada, Angola and Kazakhstan will probably more than overwhelm the increase in supply from Saudi Arabia. That raises the odds that Trump turns to the SPR to head off higher oil prices. “We think that WTI would not have to advance much further before the U.S. Strategic Petroleum Reserve (SPR) is brought into play,” Standard Chartered wrote in a note. “Higher gasoline prices, particularly in the Midwest, are likely to provoke a SPR release in the run-up to November’s mid-term elections.”

Deutsche Bank investors should be shaken by U.S. stress test failure

People are silhouetted next to the Deutsche Bank’s logo prior to the bank’s annual meeting in Frankfurt, Germany, May 24, 2018. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) – Deutsche Bank (investors took a largely long view on its failure in this year’s U.S. stress tests, with its shares recovering on Friday from a record low hit earlier this week. Goldman Sachs analysts said the U.S. Federal Reserve’s issues with Deutsche Bank were “long standing” and “not new”, while UBS said the failure was “not a total surprise.” The Fed last year classified Deutsche Bank’s U.S. unit as troubled and Deutsche Bank’s shares had been falling in anticipation of the stress test verdict on Thursday. Shares in the German bank, which are down 43 percent this year, were up just over 1 percent at 9.157 euros at 1023 GMT, above Wednesday’s record low of 8.76 euros. The test was the second stage in the Fed’s annual health check of banks. Deutsche Bank passed the first phase last week, but was the only lender to fail the second, in another blow to its fragile reputation as it struggles to revive profitability. “It does seems like Deutsche Bank at the moment is the worst student in the class that can’t get anything right,” said Octavio Marenzi, CEO of consultancy Opimas. Deutsche Bank said in a statement on Thursday it had made significant investments to improve its capital planning capabilities as well as controls and infrastructure at its U.S. subsidiary and would work with regulators to build on these. The European Central Bank, which oversees Deutsche Bank, and German financial market watchdog BaFin both declined to comment. Deutsche Bank will now need to obtain the Fed’s permission before making capital payouts to its German parent. But the overall impact will be limited, Marenzi said. The bank may need to invest just about $10 million in additional stress testing technology and external consultants.

John Kelly said to be on his way out, Trump is considering who will be next White House chief of staff

Discussing the possibility of John Kelly's White House exit
Discussing the possibility of John Kelly’s White House exit
 

With John Kelly’s tenure as White House chief of staff possibly winding down, President Donald Trump has been consulting with some of his advisers on who should succeed Kelly in that post, a source familiar with the situation said on Thursday. Kelly, a retired general, is nearing a year in the job and could be leaving soon, the source said. White House spokeswoman Lindsay Walters told reporters aboard Air Force One on the president’s flight to Washington from Milwaukee that both Trump and Kelly had denied that Kelly was on his way out. Trump called the report “fake news” and Kelly said that “this was news to him,” she said. Trump has occasionally chafed at the restrictions Kelly has placed on who gets access to see him and has wondered aloud whether he needs someone with more political experience for the job as congressional elections approach, two sources said. But he frequently praises Kelly publicly and has expressed admiration of him. The Trump White House has generated major turnover since he took office in January 2017. Figures compiled by Martha Joynt Kumar, a Towson University scholar who researches White House transitions and staffing, said Trump had the highest turnover of top-tier staff of any recent president at the 17-month mark. The figures for losses among designated high-level staff were 61 percent for Trump, compared with 14 percent for President Barack Obama and 5 percent for George W. Bush, her studies found.

Saudi-Russian axis rules oil markets as Trump fights Iran

DUBAI/LONDON (Reuters) – Iran may be Russia’s ally in the Syrian conflict but when it comes to oil, Tehran’s arch-enemy Saudi Arabia takes precedence – if last week’s OPEC meeting in Vienna is anything to go by. Iran had been pushing hard for oil producers to hold output steady as U.S. sanctions are expected to hit its exports, meaning Tehran had little to gain from OPEC production increases that lower oil prices and cut its revenue. But Saudi Arabia and Russia had other ideas. According to three sources close to OPEC and Russia, the world’s two biggest oil exporters agreed in May to work hand in glove to engineer a sizeable increase in oil output – albeit for different reasons. The events in Vienna were the latest example of how Russia and Saudi Arabia have effectively sidelined OPEC, driving policy for their own geopolitical ends and, in the case of Saudi Arabia, often at the behest of the United States. With their end game in mind, Russia first proposed that the combined output of OPEC countries and non-OPEC allies, such as itself, should jump 1.5 million barrels a day (bpd) from July. Their tactic was for Saudi Arabia to then suggest a more modest rise of less than 1 million barrels in the hope it would be acceptable to Iran, the three sources told Reuters. Saudi Arabia was keen to raise output to meet calls from U.S President Donald Trump and major consumers such as India and China to help cool oil prices and avoid shortages, according to Saudi officials including Energy Minister Khalid al-Falih. Russia, meanwhile, was under pressure from its own energy companies to lift caps on output and fight a steep rise in domestic fuel prices that was hurting President Vladimir Putin’s popularity, according to two Russian oil industry sources. In the end, Saudi Arabia pushed through a rise of 1 million bpd at the Vienna meeting, in line with the plan it had agreed with Moscow more than a month earlier. While Russia’s motivation was mainly for domestic reasons, the outcome also played into Trump’s hands to help lower domestic fuel prices ahead of U.S. midterm elections. A day before the official OPEC meeting on Friday, Iranian Oil Minister Bijan Zanganeh stormed out of a gathering of OPEC and non-OPEC allies saying there would be no agreement. But a last minute conversation on Friday morning with Falih and Saudi minister of state for energy affairs Prince Abdulaziz helped convince Zanganeh, according to three OPEC sources. One Russian energy source said Iran was also keen to keep Moscow on side because it hopes Russia will be able to help it sell crude as the U.S. sanctions bite On Tuesday, sources said Saudi output would rise to a new record of 11 million bpd as early as July, a whole 1 million bpd above May, immediately triggering a protest from Iran. Saudi Arabia says they will produce 11 million bpd in July. I regret to say they are both ridiculing our organization,” Iran’s OPEC governor Hossein Kazempour Ardebili told Reuters on Thursday. Saudi sources said the kingdom’s oil output had already started rising substantially above its quota in June, before the OPEC meeting. The only other oil producing country to boost production above its quota in June was Russia.

Merkel Says Migration Could Make or Break the E.U.

Chancellor Angela Merkel and Alexander Gauland of the far-right Alternative for Germany, right, at the Parliament in Berlin on Thursday. Representatives of his party heckled her speech.CreditClemens Bilan/EPA, via Shutterstock

 

 

BERLIN — Chancellor Angela Merkel of Germany warned on Thursday that the issue of migration could make or break the European Union, delivering her strongest assessment yet of the simmering political crisis on the Continent just hours before a difficult meeting with fellow leaders. “Europe faces many challenges,” Ms. Merkel, whose own fate has been hanging in the balance over her welcoming stance on migration, told the German Parliament before leaving for the two-day summit meeting in Brussels. “But that of migration could become one that determines the fate of the European Union.” It took Ms. Merkel half an hour to get to the point, but when she did people sat up. Either Europe masters this challenge, the chancellor said, and proves to other countries that “we are guided by values and that we rely on multilateralism, and not unilateralism,” or “no one will believe anymore in our value system that made us so strong.” But, Ms. Merkel acknowledged, Germany and other European countries were not yet “where we want to be.” Of seven points up for discussion in Brussels, two remained particularly difficult, she said: whether and how to distribute asylum seekers around the bloc’s 28 countries, and whether there could be a unified European asylum policy. Faced with a rebellion by Bavarian conservatives that nearly brought down her government last week, she has been trying to reach the kind of accord on limiting migration that has eluded the European Union for many years. A meeting last Sunday with the European countries most affected by migration ended without a breakthrough, and the Bavarian conservatives have given the chancellor until he end of this week. If she fails to reach an agreement that would allow her to turn back certain groups of migrants at the German border, the Bavarians could quit her government, a move that would most likely put her out of a job after almost 13 years as German leader and usher in months of uncertainty in Europe’s biggest country.

On this controversial point, Ms. Merkel stuck to her guns on Thursday, rejecting the idea of unilaterally turning migrants back at the border. Such a move would have ripple effects far beyond Germany, she warned, endangering the European project of border-free travel.

Ms. Merkel’s pro-European stance and her decision to open Germany’s borders to more than 1.4 million migrants since 2015 have earned her a reputation as a defender of liberal values. But they have also turned her into the main target of far-right and populist forces across the Continent.

US oil exports boom to record level, surpassing most OPEC nations

U.S. oil exports reached a record 3 million barrels a day last week— a greater amount than is pumped each day by all but three OPEC countries.
The Eagle Ford crude oil tanker sails out of the the NuStar Energy dock at the Port of Corpus Christi in Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016.
Eddie Seal | Bloomberg | Getty Images The Eagle Ford crude oil tanker sails out of the the NuStar Energy dock at the Port of Corpus Christi in Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016.

When combined with fuel products, like diesel and gasoline, U.S. oil and related products exports totaled 8.5 million barrels a day last week, the most ever, according to U.S. Energy Information Administration weekly data.

U.S. oil production also continued at a record pace of 10.9 million barrels a day, a level first reached this month. That is more oil than produced by every other country in the world, except for Russia, which does not belong to OPEC and pumps just over 11 million barrels a day. U.S. refineries also took in a record 18 million barrels of oil.

To put U.S. exports in context, the U.S. was able to export more oil per day last week than most OPEC countries drilled.

But of the largest producing OPEC countries, only Saudi Arabia and Iraq are exporting more oil than the U.S. did last week, according to John Kilduff, partner with Again Capital. In June, he said Saudi Arabia exported about 7.5 million barrels a day and southern Iraq exported 3.6 million.

Iran exports only 2.4 million barrels a day, and the U.S. is seeking to remove those barrels from the market through sanctions.

“The fact is we’re loading crude oil for export across the Texas Gulf Coast. The biggest issue that exporters are facing is getting oil from the Permian basin to the Gulf Coast because of the lack of pipeline capacity,” said Andrew Lipow, president of Lipow Oil Associates. The U.S. weekly exports fluctuate dramatically, but if they stay at this level, the U.S. would be just behind Canada, which sends about 3.5 million barrels to the U.S. each day, the bulk of of its exports. As U.S. production has grown, U.S. imports have decreased. The U.S. imported a relatively high 8.4 million barrels per day last week.

“We’ve gone from zero to 3 million barrels a day in terms of crude oil exports in just over a year.

It’s been a steady climb. This puts tremendous pressure on U.S. crude oil supplies despite the shale boom if this is going to persist,” said Kilduff. “The exports and the record refinery run combined created a massive draw down of nearly 10 million barrels.”

Note: Exports includes oil and refined products

Oil prices rose on the report because of the large drop in inventories. West Texas Intermediate crude futures were up 3.2 percent, at $72.76. “The concern is the 2 million barrels of Iranian oil cannot be made up by the rest of the world. Those types of thoughts are filtering into the market,” said Lipow.  Nick Bit: Its total BULLSHIT. The US alone can make this up. Russia and the Saudis agreed to supply even more oil. Saudi alone has 3 million BBD of spare capacity. Russia 2 milliom BBD and the US will  increase output by over 1million BBD by the end of the year.

Fed’s Rosengren calls for more tools to lessen severity of next economic downturn

One step would be to require banks to hold more capital, Boston Fed president says
Bloomberg Boston Fed President Eric Rosengren

Economic policy makers on state and federal level should begin now to take actions to limit the severity of the next downturn, said Boston Fed President Eric Rosengren, on Wednesday. The costs of high unemployment from the next recession “will be disproportionately borne by those who can least afford them, and a variety of actions could be taken by policy makers to make periods of high unemployment less likely,” Rosengren said, in a speech to the Peterson Institute for International Economics.

One step that the Fed could take would be to ask the nation’s largest banks to boost their capital levels now through use of the Countercyclical Capital Buffer, he said.

This buffer, essentially a “rainy day fund during good times” could be removed during an economic downturn, he said. This would give banks more capital and keep them from reducing lending during a downturn when borrowers need it most. Banks often have the incentive to reduce lending during downturns because regulators want them to have more capital on hand, Rosengren said.

A few other Fed officials want the central bank to boost capital buffers to protect against financial vulnerabilities.

Fed Chairman Jerome Powell didn’t seem particularly eager to take the step at his most recent news conference. He said the buffer was designed for use when vulnerabilities were above normal, “I wouldn’t look at today’s financial stability landscape and say that risks are meaningfully above normal,” he said. Another job for the Fed is to use interest-rate policy prevent the economy from overheating. Whenever the economy exceeded full employment, a recession ensued, he noted. Rosengren also called on state and local governments, well outside the Fed’s purview, to shore up their finances so they have the resources to buffer the economy during recessions. Nick Bit: Makes you wonder what they are so worried about. Do you recall when Munchin declared their is NO risk of recession and dropped the extra capital requirements for his banker  buddies . Quietly the Fed Reserve is reversing Treasury stupidity. ! AS WE ALL KNOW A RECESSION IS COMING. And they are clawing back capital into the banks…. Don’t tell the sweet ass girls on those business networks… they make break a nail.

Market rate rise may thwart Fed’s balance sheet plan

Reuters Graphic
(Graphic: U.S. Fed’s policy rates – reut.rs/2IwoTO1)

NEW YORK (Reuters) – The rise of a key U.S. overnight interest rate has raised speculation that higher bank borrowing costs will force the Federal Reserve to stop shrinking its balance sheet sooner than planned. The federal funds interest rate, or what banks charge each other to borrow excess reserves overnight, crept up last week after the U.S. central bank lowered what it pays banks on excess reserves. That narrowing gap between the federal funds rate and the interest on excess reserves, or IOER, has stoked a debate over whether the Fed’s reduction of its massive bond holdings, which started in October 2017, has made it more expensive for banks to borrow excess reserves to meet regulatory requirements or fund their daily needs, analysts said. The spread between the daily average, or “effective” fed funds rate and IOER, contracted to a mere 0.03 percentage point last week. The move, which surprised some traders and analysts, occurred after the Fed raised the top end of its fed funds target by a quarter point to 2.00 percent and IOER by 0.20 of a percentage point to 1.95 percent on June 13. Meanwhile, the amount of excess reserves, currently at $1.9 trillion, is projected to decline to $1.7 trillion by year-end, and to $1.2 trillion at the end of 2019.

While excess reserves appear ample, 90 percent of them are controlled by just 5 percent of banks, Morgan Stanley analysts estimate.

“So most U.S. banks do not have much in the way of excess reserves and more of these banks will likely have to resort to borrowing in the (fed funds) market, increasing the demand for reserves,” they wrote in a note on Monday. Since October 2017, the Fed began to scale back the reinvestment of maturing Treasuries and agency mortgage-backed securities it amassed during three rounds of quantitative easing to combat the recession triggered by the 2007-2009 global credit crisis. The central bank’s balance sheet has shrunk to $4.3 trillion from $4.5 trillion in September 2017, just before the start of its normalization program. A total of $395 billion in bonds are expected to exit the Fed’s balance sheet in 2018 and another $470 billion in 2019, TD Securities analysts said. On this current path, the Fed’s bond holdings and other assets would fall to $3 trillion by early 2021, according to the New York Fed’s latest forecast from April. That is a far cry from a projected $2 trillion back in 2015.

(Graphic: Excess reserves at the Fed vs required reserves – reut.rs/2J6McCh)

Reuters Graphic

MORE RESERVES NEEDED

A large Fed balance sheet is not without cost. Some analysts have criticized this approach in funding the growing national debt and subsidizing the housing market through the central bank’s holding of mortgage-backed securities.

Trump adviser sees having Putin summit as ‘a deliverable’

Bolton is meeting Putin for talks intended to set the stage for a U.S.-Russia summit.
Russian President Vladimir Putin, left, and U.S. National security adviser John Bolton greet each other as Russian Foreign Minister Sergey Lavrov, center, looks at them during the meeting in the Kremlin in Moscow, Russia, Wednesday, June 27, 2018.
 

MOSCOW (AP) — A summit that brings together Russian President Vladimir Putin and U.S. President Donald Trump will be a success in itself regardless of the results, Trump’s national security adviser said Wednesday while in Moscow to lay the groundwork for the meeting. National Security Adviser John Bolton said the Kremlin and the White House would jointly announce the date and location of a Trump-Putin summit Thursday, but disclosed the event would be held in neither Russia nor the United States. Trump told reporters he’ll probably be meeting with Putin during a July trip to Europe. He mentioned Helsinki, Finland and Vienna, Austria as possible venues, adding that he would be receiving an update from Bolton.

“I think the fact of the summit itself is a deliverable,” Bolton said after talks with Putin and other Russian officials. “There are a lot of issues to talk about that have accumulated, and I think this was one of the reasons why President Trump believed so strongly that it was time to have this kind of meeting. And as you can see, President Putin agreed.”

The summit would offer Putin a chance to try to persuade Washington to lift some of the sanctions imposed on Russia over its annexation of Crimea, interference in eastern Ukraine’s separatist fighting and alleged meddling in the 2016 U.S. presidential election. He said the issue of alleged Russian meddling in the 2016 U.S. presidential election was raised during the meeting, and the Kremlin reiterated its denial of any interference with the vote. “The president determined that in spite of political noise in the United States, direct communication between him and President Putin was in the interests of the United States, in the interests of Russia, in the interests of peace and security around the world,” Bolton said.

Time to prepare for ‘no deal’ Brexit scenario – French presidency official

FILE PHOTO: France’s President Emmanuel Macron and Britain’s Prime Minister Theresa May arrive at Sandhurst Military Academy, Britain, January 18, 2018. REUTERS/Hannah McKay

PARIS (Reuters) – Prime Minister Theresa May will be told at a European summit this week that while there is progress on the terms of Britain’s departure from the European Union, both sides should prepare for a “no deal” scenario, a French presidency source said. With nine months left until Britain is due to leave the EU, there is still little clarity over Britain’s future relationship with the bloc after Brexit. Without agreement, in particular over how to avoid a hard border between Ireland and Northern Ireland after withdrawal, the EU cannot conclude a “divorce” treaty with Britain, raising the prospect that Britain could leave without a deal. “Everyone agrees that a no deal scenario is bad news,” the Elysee Palace official told reporters in a briefing ahead of the June 28-29 summit of EU leaders in Brussels. The Elysee official said leaders at the summit will convey to May that despite advances in negotiations, key points remain unanswered and that, since the clock is still ticking, it is necessary to prepare for no deal. “It’s not what we want, it’s not what the British want,” the official added. “Nor is it the most likely option. But we have to prepare for it with seriousness because it would be inexplicable for us, on both sides, to tell our investors and our businesses ‘we have not prepared for this scenario.’”

In Copenhagen, Danish Prime Minister Lars Lokke Rasmussen said Brexit could end without a deal.

“It is the first time we are saying clearly to the British, that we can end in the worst scenario, no deal,” Rasmussen said in a parliament committee meeting. Draft summit conclusions seen by Reuters presented a softer tone. They showed that the leaders of the 27 countries that will remain in the EU after Britain leaves in March 2019 will express concern that no substantial progress has been over the Irish border question. The draft says: “The European Council renews its call upon Member States, Union institutions and all stakeholders to step up their work on preparedness at all levels and for all outcomes”. The leaders will also call on Britain to provide “realistic and workable proposals” on its future relationship, according to the draft. Manufacturing giants such as Airbus have followed banks in voicing mounting frustration at the slow pace of negotiations as concerns about Britain crashing out of the EU without a deal grow. Reporting by Richard Lough and Jean-Baptiste Vey in paris, Emil Gjerding Nielson in Copenhagen, Jan Strupczewski in Brussels; Editing by Luke Baker and William Maclean

Apple starts building iPhone 6S in India to lower costs

iphone 6s home button stockPhoto: James Vincent/The Verge

iphone 6s home button stockPhoto: James Vincent/The Verge

 

Apple has started to manufacture iPhone 6S units in India in an effort to lower costs for the phone. The 6S joins the iPhone SE, which Apple began manufacturing in the country last year, according to The Economic Times. Import costs saw a 15 to 20 percent increase due to tariffs from India’s government back in February. By building the devices in India, Apple hopes to be able to defray some of those costs to better compete in the Indian market. According to The Economic Times, it’ll take some time for Apple to get manufacturing capacity up to speed, so the company will continue to import devices from outside the country, too. So Indian customers shouldn’t expect any price cuts — at least for now.

Trump revs up attacks on Harley-Davidson over production move

WASHINGTON/CHICAGO (Reuters) – U.S. President Donald Trump threatened Harley-Davidson Inc with higher taxes on Tuesday and said the iconic motorcycle maker would suffer from a public backlash if it goes ahead with a plan to move production for European customers overseas. Trump’s attack on the company is another about-face for the president. Early in his administration he had hailed it as a model of American manufacturing and posed with company officials and gleaming Harley bikes on the White House lawn.

“A Harley-Davidson should never be built in another country-never! Their employees and customers are already very angry at them,” Trump said on Twitter. “If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!” Trump said.

It was unclear what taxes Trump was referring to, and why the company might have to pay them, since it will maintain production in the United States for U.S. customers. The White House did not respond to a request for comment on Trump’s tweet. Harley-Davidson shares fell nearly 1 percent to $41.29, after losing nearly 6 percent on Monday. The Milwaukee-based company said on Monday it will move production of motorcycles shipped to the European Union from the United States to its international facilities and forecast that the trading bloc’s tariffs – introduced as a counter to Trump’s tariffs on some EU-produced metals – would cost the company $90 million to $100 million a year. Harley-Davidson said it had no comment on the president’s tweets. But company spokesman Michael Pflughoeft said it was assessing the potential impact of the production shift on its U.S. facilities.In his Twitter posts on Tuesday, Trump suggested the famous American brand was using trade tensions over tariffs as an excuse to move production.  “Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse,” Trump said. In January, Harley-Davidson said it would close a plant in Kansas City, Missouri, due to a sharp drop in U.S. demand for its motorcycles, but said it would consolidate work done there into its plant in York, Pennsylvania. The company is setting up an assembly plant in Thailand, a move it announced in May 2017, but that would put together bikes only for the growing Southeast Asian market. Besides Thailand, Harley-Davidson has two more assembly plants outside the United States, in Brazil and India. The company has said ramping up production overseas could take at least nine to 18 months. As U.S. sales dip, Harley has been aiming to boost overseas sales to 50 percent of annual volume from about 43 percent.

Largest US nail manufacturer ‘on the brink of extinction’ because of the steel tariffs

Steel tariffs could force the nation’s BIGGEST MANUFACTURER OF NAILS TO MOVE TO MEXICO

The Mid-Continent Nail plant in Poplar Bluff, Missouri, laid off 60 of its 500 workers last week because of increased steel costs. The company blames the 25% tariff on imported steel. Orders for nails plunged 50% after the company raised its prices to deal with higher steel costs. The company is in danger of shutting production by Labor Day unless the Commerce Department grants it an exclusion from paying the tariffs, company spokesman James Glassman told CNN’s Poppy Harlow. Mid-Continent Nail is “on the brink of extinction,” he said. Glassman said the company might relocate to Mexico, where it could buy the steel without the tariffs — and then export the finished nails back to the United States without tariffs, which only apply to raw materials. “It’s obviously an option,” said Glassman about moving to Mexico. “It absolutely is something this company does not want to do. It wants to save the jobs in Poplar Bluff, Missouri.”

Glassman called President Donald Trump’s trade policy misguided. He noted that the company had doubled its work force since 2013, and thrived despite increased competition from China.

About 21,000 US companies have filed for tariff exclusions. In a June 20 Senate hearing, Commerce Secretary Wilbur Ross said Mid-Continent had filed a request for an exclusion only two days earlier. “I’m not belittling their situation at all. But given the importance of it to them, it’s very unfortunate that they waited all these weeks to file the request,” he said. “Under the authority we were granted, there is a process we have to follow.” The US Chamber of Commerce has estimated that 2.6 million US jobs are at risk because of the Trump administration’s hard-line policies on trade, although that estimate includes the impact of ending NAFTA. The tariffs that have already been proposed could cost the US economy about 700,000 jobs by next summer, according to Moody’s Analytics. The area of Missouri where the plant is located voted 80% for President Trump. Glassman said he can’t say whether people in town are still supporting the president. “They are scared, they are worried about their families. It’s not like there are tons of other manufacturing jobs,” he said. “If I were a Mid-Continent worker, I would be extremely unhappy with what this administration is doing.”

Factory workers lose jobs as steel tariffs put business in “crisis mode”

Steel tariffs that went into effect the first week of June are causing a factory in Missouri to lay off dozens of workers due to lost business from cancelled customer orders. At the MidContinent Steel and Wire plant in Poplar Bluff, Missouri, where Magnum Fasteners products are made, 60 employees were laid off this month as certain operations were idled due to lost business from increased steel costs.  The company is the largest nail manufacturer in the U.S. and employs hundreds of people in Poplar Bluff. It is owned by Deacaro, a Mexico-headquartered firm which ships steel from its mills in Mexico into the U.S. for a variety of finished products. The administration’s steel tariffs add a 25 percent penalty to the raw material. “The imposition of these tariffs on our raw materials on June 1st has actually put our operations into a crisis mode,” operations general manager Chris Pratt told KFVS in an interview. One employee laid off last Monday said the layoffs could be a sign of bigger problems at the nail factory, KFVS reported. Pratt says their customers have canceled 50 percent of their orders because the price of their products have jumped since the steel tariffs started. “The low priced import nails that we are having to compete with … has forced our customers to start seeking products in those areas,” Pratt said. “That means going away from the U.S.-manufactured product that supports our local industry and jobs.” Leaders at MidContinent Steel and Wire are pushing lawmakers in Missouri to help exclude their raw materials from the U.S. list of tariff targets. Companies have filed thousands of exclusion requests with the Commerce Department to have materials exempted. Last week, Commerce Department granted seven companies a total of 42 exclusion requests, and denied 56 steel exclusion requests from 11 other companies, explaining in a statement that “exclusions generally are granted if there is no domestic availability and there are no overriding national security concerns with regard to the specific product.” Steel and aluminum production jobs represent a small segment of the U.S. economy — about 255,000 jobs in steel and 61,000 in aluminum, according to Moody’s Investors Service.  Manufacturers and end users make up a much larger portion of the economy. That means tariffs on raw materials, combined with retaliation from angry trading partners, may end up causing more harm than good. An estimate from consulting firm Trade Partnership forecast about 400,000 U.S. jobs lost versus 26,000 created as a result of the metal tariffs.

Treasury Secretary Mnuchin says investment restrictions will apply to ‘all countries that are trying to steal our technology’

Steven Mnuchin, U.S. Treasury secretary, speaks during the SelectUSA Investment Summit in National Harbor, Maryland, U.S., on Thursday, June 21, 2018. 
Andrew Harrer | Bloomberg Getty Images Steven Mnuchin, U.S. Treasury secretary, speaks during the SelectUSA Investment Summit in National Harbor, Maryland, U.S., on Thursday, June 21, 2018.

Treasury Secretary Steven Mnuchin said Monday that a forthcoming statement from the government related to reports of investment restrictions will apply to China and other countries that threaten U.S. intellectual property rights on technology. “On behalf of @realDonaldTrump, the stories on investment restrictions in Bloomberg & WSJ are false, fake news. The leaker either doesn’t exist or know the subject very well. Statement will be out not specific to China, but to all countries that are trying to steal our technology,” Mnuchin said in a tweet. The Trump administration is preparing to announce limits on Chinese investment in the U.S. and block additional technology exports to the Asian country, The Wall Street Journal reported Sunday, citing sources. Early Monday Bloomberg also reported, citing sources, that the White House would use “one of the most expansive legal tools” to declare Chinese investment in certain technology-related U.S. companies a threat to economic and national security. The report, citing sources, added that Mnuchin was working on the plan for investment restrictions since as early as December, despite supporting a less aggressive approach in negotiations with Beijing. President Donald Trump and other Cabinet members have since persuaded Mnuchin “to use blunt tools” in countering risk from Chinese investments, Bloomberg said, citing sources. The Treasury is expected to make an announcement on foreign investment in the U.S. by the end of the month.  Chinese acquisitions and investments in the U.S. fell 92 percent to just $1.8 billion in the first five months of this year, consulting and research firm Rhodium Group said last week. The decline follows a sharp drop in the second half of last year as pressure from both Beijing and the Trump administration curbed a recent surge in cross-border investment.

U.S. coal miners worry Trump-China trade dispute could hit exports

Coal is Great Again……… NOT!WASHINGTON (Reuters) – U.S. coal mining companies are worried President Donald Trump’s intensifying trade dispute with China could hurt their booming export business, one of the ailing sector’s most important lifelines, according to industry players. Beijing this month added coal and other energy products to a list of U.S. goods facing import tariffs in retaliation for Trump administration levies. The measure has already dampened Chinese demand for U.S.-mined coal, multiple U.S. and Chinese industry sources said. For instance, trade sources said China National Building Material International, one of the biggest metallurgical coal importers in China, pulled back from supply talks with U.S. coal broker XCoal and miner Consol Energy shortly after Beijing’s announcement. A source familiar with the matter said Consol had been in talks with China to supply up to 1 million tons per year of metallurgical coal but would not confirm whether the deal would be delayed. “We’re obviously watching it closely, particularly given what a bright spot exports have been for our industry of late,” said Ashley Burke, a spokeswoman for the National Mining Association, which represents U.S. mining companies. “Anything that would chip away at the appetite for U.S. coal abroad would be of concern.” The U.S. Energy Information Administration said U.S. coal exports to Asia doubled from 15.7 million tons in 2016 to 32.8 million tons in 2017. Exports to China totaled 3.2 million tons in 2017, up from zero in 2015 and 2016, according to the EIA.

The coal industry’s concerns mirror the unease spreading in U.S. farm country over unintended consequences of the Trump administration’s protectionist stance, which has roiled foreign market for American crops. The farm and coal industries are critical Trump supporters that the president and his Republican party are relying on to help them retain control of Congress in the mid-term elections in November.

Steve Roberts, president of the West Virginia Chamber of Commerce, said Trump’s protectionism was a “dilemma” for his organization, which represents a number of companies benefiting from the export trade. “Because of our small population, we export far more than we consume,” he said. “We are concerned about the momentum slowing down… We are literally holding our breath to make sure this dispute is part of a bigger picture… and the parties see the advantage of trade with each other.”

The addition of coal to the list of more than 650 items facing higher tariffs from China also came as a shock to Chinese steel mills and trading firms. Just last month, Beijing had been encouraging them to buy more U.S. coal to narrow the trade gap, four sources with knowledge of the plan said.

Coal operators like Pennsylvania’s Consol had been in talks with Chinese buyers, and hope those talks revive. “Long-term we think that coal will be part of the solution, with China buying U.S. coal to offset the trade deficit,” said Zach Smith, a spokesman for Consol.

Carnival shares plunge the most in 2 years after slashing full-year forecast

Carnival Cruise Lines
Getty Images Carnival Cruise Lines
Carnival shares dropped Monday after the company cut its full-year guidance, citing increased fuel costs and unfavorable currency exchange rates.

Shares were down as much as 10 percent after the cruise line operator cut its full-year earnings outlook to a range between $4.15 and $4.25 from a range between $4.20 and $4.40 earnings. The Miami-based company said it expects rising fuel prices and currency headwinds will lower its full-year earnings per share by 19 cents. CEO Arnold Donald said in the quarterly conference call that, despite the forecast cut, “we continue to have strong operating performance despite the impact of fueling currency.” “Essentially, strength and underlying demand for our cruise offerings plus greater ticket prices year-to-date … more than offset the unfavorable impact of fuel and currency for the full year compared to our December guidance,” Donald said. The company also expects its third-quarter profit to range from $2.25 to $2.29 per share, well below a Thomson Reuters estimate of $2.47. Other cruise line stocks felt pressure after Carnival’s earnings report as well, with Norwegian Cruise Line falling 7.2 percent and Royal Caribbean Cruises down 5.1 percent. Carnival also reported adjusted earnings for fiscal second quarter beat estimates at 68 cents per share, above the Reuters estimated 60 cents. Revenue for the quarter was $4.4 billion versus the expected $4.32 billion, fed by booking volumes at above levels from the prior year. The company’s stock was already under pressure prior to Monday’s drop, having fallen 4.3 percent this year through Friday’s close.

Oil drops as market braces for more OPEC crude and Wall Street slips

NEW YORK (Reuters) – Oil fell on Monday as investors prepared for an extra 1 million barrels per day (bpd) of oil to hit the markets after OPEC agreed to raise production and as U.S. equity markets slipped on trade war fears. “The expectation that we’ll see more crude out of OPEC and that supplies in the U.S. will be tight because of the Syncrude outage… is going to keep the market on edge,” said Phil Flynn, analyst at Price Futures Group. Losses in U.S. crude prices were limited by the likelihood that an outage at Syncrude Canada’s 360,000 barrel per day oil sands facility would last through July. The outage is expected to limit crude arriving at Cushing, Oklahoma, delivery point of the U.S. futures contract. This helped further shrink U.S. crude’s discount to global benchmark Brent WTCLc1-LCOc1 to as small as $4.78. The spread had widened to as much as $11.57 on June 1, but had been contracting ahead of OPEC’s expected supply increase, analysts said. The slide on Wall Street pressured oil, analysts said. All three major stock indexes were down on escalating U.S.-China trade tensions. On Friday, the Organization of the Petroleum Exporting Countries and its allies agreed to modestly boost global crude supplies. The group, which has been curbing output since 2017, said it would raise supply by returning to 100 percent compliance with previously agreed output cuts, after months of underproduction. The head of Saudi oil giant Aramco said it has spare capacity of 2 million bpd and can meet additional oil demand in case of any interruption in supplies. The deal demonstrates the strength of the Russia-Saudi energy alliance, which will help stabilize the market for many years to come, the head of Russia’s sovereign wealth fund said.

Chicago Fed’s May national economic index retreats into negative as factories slowed

Getty Images Casings for Harley-Davidson motorcycle engines are powder coated at the company’s Powertrain Operations plant in Menomonee Falls, Wis.

A measure of the U.S. economy from the Chicago Federal Reserve turned negative in May for the first time since January, tugged into the red by a slump in factory output. The Chicago Fed’s index of national economic activity was a negative 0.15 last month, a retreat from the upwardly revised positive 0.42 reading for April. The index was also negative in May a year ago. The Chicago Fed index is a weighted average of 85 economic indicators, designed so that zero represents trend growth and a three-month average below negative 0.70 suggests a recession has begun. Thirty-nine of the 85 individual indicators made positive contributions in May, while 46 made negative contributions. Forty-three indicators improved from April to May, while 42 indicators deteriorated.

Chicago Fed

Production-related indicators, meaning factories, contributed a negative 0.29 to the index in May, down sharply from positive 0.33 in April. Other Fed data has shown that manufacturing industrial production decreased 0.7% in May after increasing 0.6% in April. Employment-related indicators contributed a positive 0.13 in May, up slightly from positive 0.12 in April. The closely watched monthly employment report out earlier this month revealed that the U.S. created a robust 223,000 new jobs in May to push unemployment down to an 18-year low of 3.8%. Meanwhile, the contribution of the personal consumption and housing category was a negative 0.04 in May from negative 0.03 in April. Housing permits decreased to 1,301,000 annualized units in May from 1,364,000 in April, but housing starts increased to 1.35 million annualized units in May from 1.286 million in the previous month, an 11-year high.

Harley-Davidson to Move Some Production From U.S. Because of E.U. Tariffs

Europe is second to only the United States as Harley-Davidson’s most important market. To mitigate the impact of a widening trade dispute, the company is moving some of its manufacturing out of the United States.CreditDrew Angerer/Getty Images

 

Harley-Davidson, the American motorcycle manufacturer, said on Monday that it was shifting some of the production of its bikes outside the United States to avoid European Union tariffs imposed as part of a widening trade dispute. The announcement, made in a public filing, is an early sign of the financial cost to companies on both sides of the Atlantic as the United States and Europe impose tariffs and counter-tariffs on each other. The moves have raised the specter of a full-blown trade war as the Trump administration pursues a protectionist tack with both allies, including the European Union, Canada and Mexico, and rivals, like China.Last week, the European Union imposed penalties on $3.2 billion worth of American products, many of which are produced in areas that form the heart of President Trump’s political base, in response to steel and aluminum tariffs added by the White House. The list included bourbon from Kentucky, the home state of the Senate majority leader, Mitch McConnell; as well as orange juice, which is made largely in the swing state of Florida; and motorcycles made by Harley-Davidson, headquartered in Wisconsin, the home state of the House speaker, Paul D. Ryan.

Harley-Davidson said on Monday that European Union tariffs on its motorcycles had increased to 31 percent, from 6 percent. It estimated that the higher tariffs would add about $2,200 on average to every motorcycle exported from the United States to the bloc, so it said it would move the production of bikes bound for Europe outside the United States.

Nick Bit: i thought this trade war was suppose to make America GREAT AGAIN! So let me scratch my aas and see if i get this right. Harley is moving jobs OUT of America because of Trumps trade war. All i can say is Trump supporter factory worker  your a SUCKER!!!!!! I have a new name for them: Trump Chumps!

Gold Price Expected to Fall

gold precious metal commodity natural resources

At its June meeting, the U.S. Federal Reserve once again raised the federal-funds target rate by 25 basis points, to 1.75%-2%. In addition, the majority of officials at the central bank now expect four rate hikes in 2018, whereas at the March meeting they were evenly split between three and four hikes. The June rate increase was largely expected by the market, as options prices implied a more than 91% probability before the announcement. The market also appears largely unfazed by an additional rate hike this year, as gold prices remained largely flat. This rate hike doesn’t change our view that the investment case for gold will weaken. We continue to expect the gold price to fall to $1,225 per ounce by the end of 2018 as the rising nominal interest rate environment increases the opportunity cost of holding gold. Additionally, although the recent rise in inflation bodes well for gold, we think that higher inflation will only spur a more rapid pace of rate hikes. As a result, our fair value estimates and economic moat ratings for all the gold miners we cover remain intact. Most committee members continue to anticipate the federal-funds rate rising to around 3% longer term. Furthermore, despite continued weakness in inflation in the near term, the committee continues to expect long-run inflation of about 2%. As a result, the case for gold as an investment should remain weak in the longer term. As investment demand falls, we expect that Chinese and Indian jewellery demand will fill the gap over the long term. However, the rise of consumer demand will take time, while investment demand can change rapidly, which means significant risk to gold prices in the near term.

Europe migrants: Italy warns Schengen is ‘at risk’

Image copyright Reuters Image caption Italy has urged a shared EU response to the issue of migration

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.”

China Moves to Shore Up Economy as Slowdown and Trade Fight Loom

The headquarters of the People’s Bank of China. The central bank freed up more than $100 billion for lending, albeit with strict limits.CreditJason Lee/Reuters

 

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.

Trump: We Can’t ‘Allow These People to Invade Our Country,’ Must Be Immediately Sent Back

The president says illegal migrants should not have due process

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.”

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!

Romney: I will speak out against Trump on issues of ‘substantial significance’

Romney: I will speak out against Trump on issues of 'substantial significance'
© Getty Images

Mitt Romney said Sunday he will continue to speak out against President Trump when he sees fit, but acknowledged that he agrees with a number of the president’s policies. Romney, who is running for U.S. Senate in Utah, penned an op-ed for The Salt Lake Tribune, in which he sought to clarify his stance on Trump, whom Romney has alternately criticized and praised dating back to his own 2012 presidential campaign. “If you elect me your senator, I will fight with vigor for the interests of our state and nation. I will endorse the president’s policies that support those interests. Hopefully, there will be few occasions where I will be compelled by conscience to criticize,” Romney wrote. “But, as I have said throughout this campaign, I will call them like I see them. Last week, the president said that I’m a straight shooter; I will endeavor to be just so,” he added. Romney noted that Trump’s first year in office “exceeded my expectations,” and praised some of his accomplishments. He pointed to the passage of the GOP tax-cut bill and the reduction of regulations as positive developments. He also pledged to oppose Trump on tariffs, and on the president’s rhetoric about immigrants and minorities. “I have and will continue to speak out when the president says or does something which is divisive, racist, sexist, anti-immigrant, dishonest or destructive to democratic institutions,” Romney wrote. “I do not make this a daily commentary; I express contrary views only when I believe it is a matter of substantial significance.” “People ask me why I feel compelled to express my disagreements with the president,” he added. “I believe that when you are known as a member of a ‘team,’ and the captain says or does something you feel is morally wrong, if you stay silent you tacitly assent to the captain’s posture.” Romney accepted Trump’s endorsement when he was running for president in 2012. However, when Trump ran in 2016, Romney condemned him as a “fraud” and a “phony.” He has since softened his criticism and declined to address his past remarks. Trump endorsed Romney in the Utah Senate race, which Romney thanked him for. Romney is running for the Republican nomination against state Rep. Mike Kennedy (R) in a Tuesday primary.