Dying shopping malls are wreaking havoc on suburban America

Foto: Nicholas Eckhart Rolling Acres Mall in Akron, Ohio

Rolling Acres Mall in Akron, Ohio opened in 1975 to great fanfare as the premier shopping destination for the surrounding community. But customer traffic started to slow more than a decade ago, several department stores abandoned their leases, and the mall started failing. It lost its last store tenant in 2013.  The mall was still standing vacant last year, and it remained a safety concern. The mayor of Akron instructed residents in July to “stay clear” of the area. The city finally began the process of demolishing the rotting shopping center in late October. Like Rolling Acres, shopping malls across the country are dying, and in some cases leaving jobless communities and rotting buildings that are hotbeds for crime in their wake. Dozens of malls have closed in the last 10 years, and many more are at risk of shutting down as retailers like Macy’s, JCPenney, and Sears – also known as anchor stores – shutter hundreds of stores to staunch the bleeding from falling sales.

The commercial real estate firm CoStar estimates that nearly a quarter of malls in the US, or roughly 310 of the nation’s 1,300 shopping malls, are at high risk of losing an anchor store.

 Many storefronts in the struggling Regency Square mall in Richmond, Virginia have gone dark.sourceBusiness Insider/Hayley Peterson

When anchor stores close, it can be hard to find businesses to replace them because they occupy the giant, multi-story buildings at mall entrances, which are are often at least 100,000 square feet. If no replacement tenant is found, the loss can trigger a decades-long downward spiral for the shopping mall and surrounding communities. “The communities wither away, and they never come back,” says Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm headquartered in New York City.

When anchor stores are boarded up, traffic tends to decline to the retailers located in the middle sections of malls. That has been happening at shopping malls nationwide, and now many retailers are going out of business and closing all their stores as a result.

Just within the last couple months, several mall-based stores including American Apparel, Abercrombie & Fitch, The Limited, Bebe, BCBG, and Wet Seal have all announced mass closures. The process of a shopping mall shutting down entirely happens slowly – often over the course of a decade or more. As stores are boarded up one by one, shopper traffic slows and crime in the area tends to spike, Davidowitz says. “Malls are big, big contributors to city and state taxes, jobs, and everything,” Davidowitz says. “Once they close, they are a blight on the community for a very long time.” There were as many as 890 crime incidents at one Memphis-area mall between January 1, 2012 and July 15, 2015, according to an investigation last summer by local NBC affiliate WMC Action News. Zent said he believes that crime is the biggest reason why shopping mall traffic has declined in the last decade, though many analysts attribute those declines to changing shopper preferences and the rise of online shopping. Sure enough, studies show Americans are increasingly choosing to spend money on technology and experiences like vacations over apparel. When they shop for clothing, a growing number of them are going to discount stores like TJ Maxx or ordering from Amazon

Canada announces retaliatory tariffs on steel and aluminum

Canadian PM on tariffs: We hope common sense will triumph

Canada will retaliate against new U.S. tariffs by imposing its own trade barriers on U.S. steel, aluminum and other products, Canadian Foreign Minister Chrystia Freeland said Thursday. Freeland said Canada plans to slap dollar-for-dollar tariffs on the U.S. The Nafta partner’s proposed import taxes would also cover whiskey, orange juice and other food products alongside the steel and aluminum tariffs. The retaliatory measures will cover CA$16.6 billion in imports, Freeland said. The products being targeted will be subject to tariffs between 10 percent and 25 percent. Canadian Prime Minister Justin Trudeau said that the tariffs, announced Thursday by Commerce Secretary Wilbur Ross, are an affront to the security partnership between the U.S. and Canada. Ross said the tariffs will take effect at midnight Thursday, when previously set exemptions for Canada, Mexico and the European Union are set to expire. The tariffs are “totally unacceptable,” Trudeau said, though he noted that Canada will continue to negotiate with the U.S. Trudeau warned that the import taxes — of 25 percent on steel imports and 10 percent on aluminum imports — will harm both countries’ economies.

Pending home sales fall more than expected as costs for buyers rise

A real estate agent, right, shows a home to a prospective buyer in Miami, Florida.
Getty Images A real estate agent, right, shows a home to a prospective buyer in Miami, Florida.
Potential homebuyers out shopping in April may have been spooked by a sharp rise in mortgage interest rates. Pending home sales, which measure signed contracts to buy existing homes, fell a wider-than-expected 1.3 percent compared to March, according to the National Association of Realtors. It was the third lowest level of the past year.

Pending sales were 2.1 percent lower compared to April of 2017 the fourth straight month showing an annual decline. The Realtors point, again, to the continuing supply crisis in housing today. “Feedback from Realtors, as well as the underlying sales data, reveal that the demand for buying a home is very robust. Listings are typically going under contract in under a month, and instances of multiple offers are increasingly common and pushing prices higher,” said Lawrence Yun, chief economist for the NAR in a release. “The unfortunate reality for many home shoppers is that reaching the market will remain challenging if supply stays at these dire levels.”

Weakening affordability is going hand-in-hand with short supply, especially on the lower end of the market. As home prices continue to rise, potential buyers have less and less wiggle room in their wallets.

Mortgage rates jumped sharply in April, with the average rate on the popular 30-year fixed hitting its highest level in seven years. Buyers out shopping were having to recalculate their budgets for homes. Buyers are also seeing higher prices for gas, which, while not a major factor for everyone, may weigh on consumer confidence. Buying a home is usually the largest investment most people ever make, and confidence is therefore key. “The combination of paying extra at the pump, while also needing to save more for a down payment because of higher rates and home prices, may weigh on the psyche of those looking to buy,” said Yun. Regionally, pending home sales in the Northeast were unchanged for the month and 2.1 percent lower than one year ago. In the Midwest, sales decreased 3.2 percent monthly, and were 5.1 percent lower than April 2017.

‘Caution is going to be the word here,’ says former super bull Jeremy Siegel

‘Caution is the word here,’ Wharton’s Jeremy Siegel says
‘Caution is going to be the word here,’ Wharton’s Jeremy Siegel says

Wharton School finance professor Jeremy Siegel appears to be wandering from the bull camp. Siegel, who helped lead 2017’s rally cry, told CNBC’s “Trading Nation” that he isn’t blaming Italy’s political turmoil, the latest headline to rock the markets, for a borderline bearish forecast. Rather, he cited risks from rising rates to trade tensions. “The major threat of the market is higher interest rates going forward. Too many people read the FOMC minutes as being too dovish,” he said Wednesday.

Siegel expects the Federal Reserve to hike rates a total of four times this year, a number Wall Street may be dangerously underestimating. As rates rise, stocks historically look less appealing to investors.

He’s also viewing trade tensions with China as a “wild card” for the market. “[President Donald Trump] feels he has to tread very, very carefully on this. It doesn’t mean for sure he won’t go full blast forward,” Siegel said. “Caution is going to be the word here.” His thoughts came as stocks staged a comeback a day after Italy tensions rattled the market. Siegel has been warning since December that 2018 wouldn’t be as robust as 2017, and stocks would be flat to up 10 percent by year-end. “This is a great year for earnings, no one argues with that. But the tax cut is front-loaded which means that the write-offs on capital equipment are going to accrue to 2018 and not nearly as much in 2019,” Siegel said.

Mexico hits back at U.S. tariffs with measures on farm, steel products

MEXICO CITY (Reuters) – Mexico responded to U.S. steel and aluminum tariffs by imposing wide-ranging “equivalent” measures on farm and industrial products, the economy ministry said on Thursday, ratcheting up tensions during talks to renegotiate NAFTA. The United States on Thursday morning said it was moving ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, ending a two-month exception and threatening to ignite a trade war. The Mexican measures, which target pork legs, apples, grapes and cheeses as well as steel, could hit farm states that are a bastion of support for U.S. President Donald Trump, ahead of American midterm elections in November. The Mexican measures will be in place until the U.S. government eliminates its tariffs, the ministry said.

“Mexico profoundly regrets and condemns the decision by the United States to impose these tariffs on imports of steel and aluminum from Mexico,” the ministry said.

“Mexico reiterates its openness to constructive dialogue with the United States, its support for the international commerce system and its rejection of unilateral protectionist measures,” it said. Mexico buys more steel and aluminum from the United States than it sells. It is the top buyer of U.S. aluminum and the second buyer of U.S. steel, the economy ministry said. The countermeasures will hit U.S. hot and cold rolled steel, plated steel and tubes, the ministry said. The United States, Canada and Mexico have been renegotiating the North American Free Trade Agreement, which governs trade between the three countries.

Savings Rate Tumbles Back Near Record Lows As Americans Spend More Than They Make For 28th Month In A Row

While US personal incomes grew, as expected, at 0.3% MoM, Americans resumed spending fare more than they make (increasing 0.6% MoM in April). For the 28th month in a row, YoY growth in spending has outpaced incomes, sending the savings rate back down to just 2.8, the lowest since the debt-funded holiday spending spree of December 2017, and just shy of record lows. Spending YoY is the highest since April 2017: Adjusted for inflation, real consumption rose 0.4%, double the median projection of 0.2%. The Commerce Department said spending for gasoline and other energy goods, as well as household utilities, were leading contributors to the monthly increase in real outlays. Real durable goods spending, rose 0.3% after a 1.9% increase in the prior month; nondurable goods advanced 0.4% for a second month. Outlays on services, adjusted for inflation, rose 0.4% after a 0.3% gain in prior month.

Sears Is Closing More Stores as Sales Shrink For 26th Quarter in a Row

Struggling retailer’s revenue has declined as it closed hundreds of stores

The last remaining Sears store in Chicago on May 13. Sears Holdings said Thursday that it plans to close another 72 stores.
The last remaining Sears store in Chicago on May 13. Sears Holdings said Thursday that it plans to close another 72 stores. Photo: Patrick Gorski/Zuma Press

Sears Holdings Corp. SHLD -9.66% said Thursday that it plans to close another 72 stores it has deemed unprofitable, as the company continues to struggle with falling sales. Sears has been closing hundreds of stores in recent years, selling brands and spinning off divisions to stay afloat as losses have mounted and as it struggles to keep its customers away from Walmart Inc., Amazon.com Inc. AMZN 0.58% and other outlets. The company said a list of the 72 stores would be posted later Thursday.

The new round of store closures comes as the retailer reported sales fell in the latest quarter, extending a streak of declines that stretches back more than six years at the once dominant retailer. The last time Sears’s sales increased from the previous year was in the third quarter of 2011, when the company had $9.4 billion in revenue, according to data from Thomson Reuters . In the latest quarter, total merchandise sales fell 34% to $2.2 billion. Total revenue, which includes money generated from appliance and product-repair services, fell 31% to $2.89 billion. Same-store sales at Sears locations fell 13.4%, while they declined 9.5% at Kmart locations. The company operated 894 total locations as of May 5, down from 1,275 as of around the same time the year prior. Sears reported a first-quarter net loss of $424 million, or $3.93 a share, compared with a profit of $245 million, or $2.29 a share, a year earlier. The prior-year quarter’s results got a $741 million lift from asset sales. In the latest period, Sears recorded a $165 million benefit. Mr. Lampert, who is also Sears’s biggest investor and among its biggest lenders, said in an April letter to the Sears board that his ESL Investments Inc., which owns a controlling stake in the retailer, is willing to submit offers for Kenmore, the Sears Home Improvement and Parts Direct businesses as well as some real estate, including $1.2 billion in debt secured by the properties

The company’s shares, which more than a decade ago traded above $100, now languish at around $3. Sears shares fell 3.4% premarket trading Thursday. Mr. Lampert’s interest in purchasing Kenmore and the other businesses extends a string of transactions in which he is often on both sides. In addition to serving as Sears’s chairman and CEO, he is also chairman of, and a major investor in, Seritage, which ranks among Sears’s biggest landlords.

China reportedly lining up countries against US in pending trade war

China's President Xi Jinping (R) meets German Chancellor Angela Merkel at the Great Hall of the People in Beijing, China, May 24, 2018.
Jason Lee | Reuters China’s President Xi Jinping (R) meets German Chancellor Angela Merkel at the Great Hall of the People in Beijing, China, May 24, 2018
China is reportedly looking to line up other countries against the U.S. in a pending trade war after the White House took an unexpected move forward on tariffs a day earlier, the Wall Street Journal said Wednesday, citing Chinese officials.

On Tuesday, the White House announced it would have a final list of $50 billion in imports that would be subject to 25 percent tariffs by June 15, and two weeks later would announce investment restrictions on Chinese acquisitions of U.S. technology. In response, China is reportedly looking to line up countries against the U.S., the Journal reported. The countries in question are mostly in Europe and Asia, where companies could benefit from China’s plans to give foreign companies more open access to its markets. Tuesday’s announcement came just days after the two countries announced a tentative solution. U.S. Treasury Secretary Steven Mnuchin had said any trade war would be put on ice while negotiators worked out the details. As part of that deal, China would reduce its trade advantage by buying more U.S. goods such as agricultural and energy commodities.  U.S. Commerce Secretary Wilbur Ross is set to arrive in Beijing Saturday but the surprise move from Washington could be an impediment to those talks, and is “casting doubt” over whether they can advance to the next level, the Journal reported.

U.S. GDP Growth Revised Down to 2.2% Rate in First Quarter

WASHINGTON—U.S. economic growth during early 2018 was slightly softer than initially thought, though a measure of corporate profits partly rebounded in the first quarter after a weak end to 2017. Gross domestic product—the dollar value of all goods and services produced in the U.S., adjusted for inflation—rose at a 2.2% seasonally adjusted annual rate in the first quarter, the Commerce Department said Wednesday. That was down from last month’s initial estimate of 2.3% growth; economists surveyed by The Wall Street Journal had expected an unrevised 2.3% reading. Growth in business investment was revised higher for the first quarter, but offset by downward revisions in other major components including inventories. Compared with a year earlier, total output expanded 2.8% in the first quarter—the strongest annual growth reading in nearly three years. Economists think growth has picked up in the spring, and expect solid growth for 2018 as a whole. Forecasting firm Macroeconomic Advisers last week projected GDP would expand at a 2.9% annual pace in the second quarter, and the Federal Reserve Bank of Atlanta’s GDPNow model predicted 4.0% growth. Wednesday’s report included the government’s first official estimates for U.S. corporate profits in the early months of 2018, in the wake of significant tax-code changes enacted in December. After-tax corporate profits, without inventory valuation and capital consumption adjustments, rose a seasonally adjusted 7.8% in the first quarter after declining 9.6% in the fourth quarter. Compared with a year earlier, profits were little changed in the first quarter, up 0.1% on the year. “Although the economic environment is largely positive for demand, there are some supply-side headwinds to overcome,” Chief Financial Officer Rajesh Kalathur told analysts earlier this month. “Material and freight costs have exceeded our forecast for the year, due largely to inflation in U.S. steel prices and a tight market for logistics providers.” Wednesday’s report showed personal-consumption expenditures climbed at a 1.0% annual pace in the first three months of the year, down slightly from an initially estimated 1.1%. It was the weakest quarter for consumer spending in nearly five years. The housing sector was a headwind for overall growth in the first quarter, with residential fixed investment declining at a revised annual rate of 2.0%. Government spending rose at a 1.1% annual pace last quarter, led by growth in federal-government expenditures on the military and domestic programs. Net exports contributed 0.08 percentage point to the overall GDP growth rate in the first quarter. Change in private inventories contributed 0.13 percentage point. Both categories tend to be volatile from quarter to quarter, and were revised down from last month’s early estimates.

Robot chef cooks 300 burgers a day

– The one-armed burger-flipping robot sensation that got laid off because it couldn’t handle the work is back on the job. Flippy, the somewhat creepy-looking but fascinating piece of one-armed technology at Caliburger in Pasadena, California, has its job back flipping burgers at the grill station. Flippy debuted in March to a media sensation, with many wondering if it was the cook of the future.

It turns about 300 burgers a day, seven days a week.  Flippy came into the job when short-order cooks were leaving the kitchen due to the high hea.t but the owners say it isn’t actually replacing humans and on one at Caliburger has lost their job. Flippy still requires human interaction to work properly but its creators say it can learn from its surroundings and acquire new skills over time..

Trump’s Budget: $984 Billion Deficit Next Year

President Trump campaigns in Nashville, Tennessee in support of the U.S. Senate campaign of Representative Marsha Blackburn (R-Tenn.) on May 29. (Photo: Screen capture/C-SPAN)

When you read the budget message President Donald Trump sent Congress earlier this year, you soon come across a concession that Washington insiders have been making for years — just before they vote for bills they know will massively increase the federal debt.

“The current fiscal path is unsustainable,” Trump said, “and future generations deserve better.”

Trump then asked Congress for a budget that his own Office of Management and Budget estimates will cause the federal government to run a $984 billion deficit in fiscal 2019. Back in 2009, just before his first inauguration, President Barack Obama — no fiscal conservative — complained that the “deficit levels that (he was) inheriting” were “unsustainable.” “At a certain point, other countries stop buying our debt,” Obama told CNN in an interview broadcast on Jan. 18, 2009. “At a certain point, we’d end up having to raise interest rates, and it would end up creating more economic chaos and, potentially, inflation. So, what we need to do is say that, instead of just printing more money, let’s look at medium term and long term. Let’s get a handle on Social Security. Let’s get a handle on Medicare. Let’s eliminate waste in government, where it exists.” In Trump’s budget proposal, as published by OMB, the $984 billion deficit for next year leads to a $987 billion deficit for fiscal 2020 and a $916 billion deficit for fiscal 2021.
In other words, as the Trump White House envisions it, Trump will run annual deficits of more than $900 billion for the rest of the term he was elected to in 2016. He will do this even though he believes our “current fiscal path is unsustainable.”
bankruptcy.”We have a fiscal crisis,” Ryan said then. “If government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century.” The question for Ryan and his colleagues in the House and Senate now is: Will a Republican-majority House, working with a Republican-majority Senate and a Republican president, fail to put the federal government on a path toward a balanced budget?

Millions of U.S. Homeowners Still Under Water on Mortgages


(Bloomberg) — A staggering number of American homeowners remain under water on their mortgages a decade after the housing bubble burst. Almost 4.5 million households — or 9.1 percent — owed more than their homes are worth in the fourth quarter of 2017, according to data firm Zillow, with an estimated 713,000 owing at least twice as much as their property’s value. While the percentage is declining, families in communities with stagnant property values are “trapped in their homes with no easy options to regain equity other than waiting,” said Aaron Terrazas, a senior economist at Zillow. That in turn could weigh on local economic growth. Virginia Beach, Virginia; Baltimore and Chicago are the hardest hit metropolitan areas, based on effective negative interest rates. Effective negative equity measures the lack of sufficient home equity to pay for the associated costs of selling homes and buying new properties.

Neg. Equity Rate 200% Underwater Effective Rate
U.S. Total 4,382,044 9.1% 16.3% 24.6%
Virginia Beach, VA 49,944 16.7% 17.4% 44.5%
Baltimore, MD 72,892 14.2% 17.2% 35.8%
Chicago, IL 253,725 15.5% 20.0% 34.1%
Washington, DC 120,347 11.3% 13.6% 31.6%
St. Louis, MO 63,477 12.0% 16.5% 30.9%
Philadelphia, PA 122,703 11.6% 15.1% 28.7%
Cleveland, OH 49,554 13.0% 22.0% 28.2%
Cincinnati, OH 37,859 9.4% 15.8% 27.6%
Las Vegas, NV 29,385 9.9% 14.7% 27.5%
Minneapolis-St Paul, MN 38,535 6.4% 12.0% 26.7%
Atlanta, GA 93,663 9.9% 16.4% 26.3%
Phoenix, AZ 61,917 8.7% 14.8% 26.0%
Milwaukee, WI 21,816 8.2% 14.3% 25.0%
Detroit, MI 84,799 10.8% 25.4% 24.9%
Indianapolis, IN 26,987 7.4% 17.0% 24.0%
Riverside, CA 46,147 7.4% 10.0% 23.3%
Pittsburgh, PA 39,717 9.6% 15.5% 23.2%
Orlando, FL 27,166 7.8% 12.4% 22.4%
Tampa, FL 34,963 7.5% 11.9% 21.7%
New York, NY 195,314 8.9% 11.0% 21.4%
Columbus, OH 24,403 7.0% 18.6% 21.2%
Providence, RI 18,400 6.7% 11.5% 21.2%
Kansas City, MO 21,902 6.0% 15.6% 21.1%
Charlotte, NC 28,957 6.8% 18.6% 20.9%
Miami-Fort Lauderdale, FL 72,704 8.7% 16.3% 20.4%
Sacramento, CA 19,479 5.4% 9.5% 18.4%
San Diego, CA 23,290 5.3% 8.2% 17.4%
Nashville, TN 16,152 5.3% 15.8% 16.3%
Denver, CO 24,886 4.9% 9.1% 15.7%
Seattle, WA 31,764 5.0% 10.5% 13.9%
Boston, MA 35,102 4.4% 10.9% 13.7%
Portland, OR 16,249 4.0% 7.5% 13.5%
Los Angeles-Long Beach-Anaheim, CA 74,326 4.7% 8.7% 12.2%
San Francisco, CA 20,179 3.1% 7.2% 8.0%
San Jose, CA 5,168 1.9% 4.5% 4.8%


Here’s how Italy revived the euro crisis and sparked a global stock market selloff

Eurozone’s long simmering financial crisis is now a political crisis
AFP/Getty Images Economist Carlo Cottarelli leaves the presidential palace Monday after Italy’s president gave him a mandate to form a new government — a bid that’s seen as unlikely to succeed, paving the way for elections within months.

Fears over Italy returned with a vengeance Tuesday, perhaps surprising U.S. investors returning from a three-day Memorial Day weekend as headlines out of Rome sent shock waves through global markets and contributed to a selloff for Wall Street stocks. Market participants don’t need a long memory to recall the worst days of the eurozone debt crisis in 2011 and 2012, when fears centered on Italy’s massive debt pile, teetering European banks and sluggish growth took center stage. Those worries were effectively pushed into the background in 2012 by the European Central Bank, but they weren’t resolved. And now, they’re back, with a political twist. “The pendulum of sentiment has swung from extreme complacency to hints of the paranoia that we saw back in 2011-2012. In the space of roughly under a week the view of the eurozone has changed dramatically,” said Nicholas Spiro, partner at London-based Lauressa Advisors, in a phone interview. Ground zero was in the Italian bond market, with the 2-year yield soaring 157 basis points, or 1.57 percentage points, to 2.41%, while the 10-year yield  jumped 41 basis points to 3.095%. Investors fear that election could see the anti-establishment parties, which had backed away from outright euroskeptic rhetoric in the run-up to the March vote, adopt more strident positions, potentially turning the vote into a de facto referendum on the country’s euro membership. While the region’s debt crisis, which began in 2010, spread from Greece to other countries, Italy, with the world’s fourth-largest government bond market and the eurozone’s third-largest economy, was long viewed by market participants as too big to rescue. An Italian implosion was, therefore, viewed as an existential threat to the euro in a way that Greece and other, smaller financially stressed eurozone countries were not.

European Central Bank President Mario Draghi was credited with stemming the crisis in July 2012, when he declared the institution would do “whatever it takes” to preserve the euro. This was followed by the formulation of the Outright Monetary Transactions, or OMT, program, which would allow the ECB to buy a country’s bonds in the secondary market to reduce borrowing costs.

Read: 4 ways the ECB is helping to prevent an Italian rerun of the euro crisis — for now

It worked. Without the ECB actually tapping the program, Italian borrowing came down from unsustainable levels, with the 2-year yield   retreating from a level above 7.5%. Later, the ECB’s separate eurozone bond-buying program, the centerpiece of its quantitative easing strategy, pulled yields across the eurozone sharply lower.  European authorities have taken steps to create a more unified currency bloc, including more uniform supervision of banks and tighter fiscal rules. But the measures are seen as falling well short of what’s needed to fix the inherent flaws of the euro, which has no shared fiscal authority. While 5 Star Movement and the League played down previous euroskeptic rhetoric, they railed against the European Union’s fiscal rules and had appeared headed for a confrontation with Brussels over their own spending plans, which had helped to trigger the initial selloff in Italian debt.

Delays and ‘poison pills’: team Trump runs out of road in NAFTA talks

WASHINGTON (Reuters) – President Donald Trump is running out of time to deliver a revamp of the North American Free Trade Agreement (NAFTA) he promised for this year and people involved in the talks say the crunch is largely of his administration’s own making. Negotiators, industry lobbyists, trade experts and lawmakers briefed on the talks described how precious months passed before the U.S team presented its proposals and how the talks stalled because the demands far exceeded what Canada and Mexico had expected and Washington signaled no readiness to compromise. In the end, an unusually tight timetable allowed little space to bridge differences on the core issues, such as U.S. and regional content requirements for the auto industry. Talks started last August with a goal to conclude in just four months, but as a May 17 notification deadline to allow the current Republican-led U.S. Congress to approve a new agreement before year end passed, U.S. Trade Representative Robert Lighthizer warned a deal was “nowhere near close.” Up until a few weeks ago, Lighthizer thought Mexico faced the biggest time pressure to wrap up the talks before its July 1 presidential elections, a Mexican source close to the talks told Reuters. The Trump administration’s negotiating goals submitted to Congress in July 2017 talked of shrinking trade deficits with Mexico and Canada and boosting U.S. auto production.  U.S. chief negotiator John Melle privately complained to U.S. colleagues that Ottawa was deliberately wasting time on less essential matters, such as proposed new chapters on women’s and indigenous people’s rights, a U.S. source close to the talks said. Canadian officials deny trying to drag out negotiations. Speaking at a business event early this year, Canada’s veteran chief negotiator, Steve Verheul, described the talks as the “most unusual negotiation” he had ever been involved in, because of Washington’s winner-takes-all approach. “They are looking to strengthen the U.S. and by doing that weaken Canada and Mexico.”

Oil prices drop, pressure builds on expected crude output increase

Oil pumps wells Monterey Shale fracking

Getty Images

Oil prices were mixed in Asian trading on Tuesday, but remained under pressure from expectations that Saudi Arabia and Russia would pump more crude to ease a potential shortfall in supply. “Investors have started pricing in the likelihood of Saudi Arabia and Russia increasing crude oil production,” ANZ Bank said in a note. “However, doubt remains, with any agreement to be finalized at the June OPEC meeting.” Concerns that Saudi Arabia and Russia could boost output have put downward pressures on oil prices, along with rising oil production in the United States. Saudi Arabia and Russia have discussed raising OPEC and non-OPEC oil production by some 1 million barrels per day to make up potential supply shortfalls from Venezuela and Iran. The Organization of the Petroleum Exporting Countries (OPEC) is due to meet in Vienna on June 22. “The way I see it is that WTI prices are stabilizing rather than falling after rising sharply in recent weeks because the prices were expected to be in the range of $55-$65 a barrel,” said Vincent Hwang, commodity analyst at NH Investment & Securities in Seoul. “But at the same time there are some worries over a fall in U.S. oil demand if more Middle East crude supplies flow into the market,” Hwang said.

Meanwhile, record crude oil volumes from the United States are expected to head to Asia in coming months, nibbling away the market share of OPEC and Russia.

U.S. oil production has surged by more than 27 percent in the last two years to 10.73 million barrels per day (bpd). That puts the United States ahead of top exporter Saudi Arabia, and only Russia pumps out more, at around 11 million bpd.

Soros Sees New Global Financial Crisis Brewing, EU Under Threat

Soros Warns of EU Danger, New Global Financial Risk
George Soros Photographer: Jason Alden/Bloomberg

A surging dollar and a capital flight from emerging markets may lead to another “major” financial crisis, investor George Soros said, warning the European Union that it’s facing an imminent existential threat. The “termination” of the nuclear deal with Iran and the “destruction” of the transatlantic alliance between the EU and the U.S. are “bound to have a negative effect on the European economy and cause other dislocations,” including a devaluing of emerging-market currencies, Soros said in a speech in Paris on Tuesday. “We may be heading for another major financial crisis.”

The stark warning from the billionaire money manager comes as Italian bond yields have jumped to multi-year highs and major emerging economies including Turkey and Argentina are struggling to contain the fallout from runaway inflation.

Soros, who has been the object of ire by the government of his native Hungary, saved his gloomiest outlook for the EU. “Everything that could go wrong has gone wrong,” he said, citing the refugee crisis and austerity policies that catapulted populists into power, as well as “territorial disintegration” exemplified by Brexit. “It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality,” he said.Soros’s proposed remedy for some of the ills facing Europe is an EU-funded Marshall Plan for Africa, worth about 30 billion euros ($35 billion) a year, which would ease migratory pressures to the continent. He also proposed a radical transformation of the EU, including the abandonment of the clause forcing its member states to join the single currency. “The euro has many unresolved problems and they must not be allowed to destroy the European Union,” he said.

Traders are worried this could be the ‘big unwinding’ of Italian bond markets

Strategist: See another Italian vote taking place in the fall
Strategist: See more elections in Italy taking place in the fall

Italian bonds have witnessed one of their worst trading weeks since the euro zone sovereign debt crisis, with many traders getting a stark reminder of the volatility that once characterized markets in the region. On Friday, two-year Italian bond yields rose 35 basis points in one day — almost equivalent to the entire range of the year for U.S. 10-year Treasurys. This was the weakest session in five years and continued a month that’s seen these yields rise 70 basis points in total. Yields move inversely to a bond’s price and a spike higher is seen as investors feeling more concerned about lending to Italy’s government. More specifically, traders usually sell short-maturity paper when there are growing credit risk concerns at a sovereign level. The original catalyst for the selling came from the populist parties hoping to take control of Italy after inconclusive elections in March. Lega and the Five Star Movement (M5S) plan to issue short-term bills to finance state activity in their economic policy proposals. Market participants were taken aback and many have interpreted that initiative as laying the foundation for a potential parallel currency in the future, further amplifying the potential new government’s collision course with the rest of Europe. Italy’s Lega could gain more power in fresh elections, analyst says. But the fear has not been limited to short-dated paper. Ten-year Italian bonds have also came under pressure with yields topping 2.5 percent and are now trading at their widest gap with German paper in over four years. There is palpable anxiety in the market as Italy’s political future remains uncertain. Over the weekend, M5S and Lega looked to have failed in their bid to form a government after President Sergio Mattarella rejected their pick for economy minister due to his euroskeptic credentials. This has raised the prospect of a caretaker government to lead the country into yet another round of elections later this year. In Monday’s trading session, and with liquidity in markets thin due to the U.S. Memorial Day, Italian two-year yields briefly snapped back 15 basis points tighter before paring all the gains of the day. Traders have pointed to short covering in the market. However, the relief rally may be short lived. One head of trading at a large fund manager, who preferred to remain anonymous due to the sensitive nature of the situation, told CNBC that a “big unwinding” is beginning for Italian bonds and Monday’s pullback would not last long. Ratings agencies are also beginning to raise alarm bells. On Friday, Moody’s hinted that it may look to review Italy’s debt rating, citing concerns over the two anti-establishment parties’ fiscal plans that could ratchet up spending by as much as 100 billion euros ($117 billion), according to some analysts.Conflict between Italy’s parliament and government will be intense.

With outstanding debt of more than 2.3 trillion euros and one of the highest levels of debt-to-gross domestic product in the advanced world, Italy’s public finances will come under scrutiny again if spending ramps up.

On Monday, Matteo Salvini, the leader of the right-wing Lega party, further added to market concerns saying that there is no point staying in the EU if the rules don’t change. This has prompted some analysts to believe that if there is another election on the horizon, one that would effectively be a referendum on the euro.

According to Goldman Sachs analysis, the European Central Bank owns around 20 percent of outstanding Italian bonds due to years of quantitative easing, but foreign investors also own about 37 percent.

China approves 13 new Ivanka Trump trademarks in 3 months

SHANGHAI (AP) — Ivanka Trump’s brand continues to win foreign trademarks in China and the Philippines, adding to questions about conflicts of interest at the White House, The Associated Press has found. On Sunday, China granted the first daughter’s company final approval for its 13th trademark in the last three months, trademark office records show. Over the same period, the Chinese government has granted Ivanka Trump’s company provisional approval for another eight trademarks, which can be finalized if no objections are raised during a three-month comment period. Taken together, the trademarks could allow her brand to market a lifetime’s worth of products in China, from baby blankets to coffins, and a host of things in between, including perfume, make-up, bowls, mirrors, furniture, books, coffee, chocolate and honey. Ivanka Trump stepped back from management of her brand and placed its assets in a family-run trust, but she continues to profit from the business.

“Ivanka Trump’s refusal to divest from her business is especially troubling as the Ivanka brand continues to expand its business in foreign countries,” Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington, said in an email Monday. “It raises significant questions about corruption, as it invites the possibility that she could be benefiting financially from her position and her father’s presidency or that she could be influenced in her policy work by countries’ treatment of her business.”

As Ivanka Trump and her father have built their global brands, largely through licensing deals, they have pursued trademarks in dozens of countries. Those global trademarks have drawn the attention of ethics lawyers because they are granted by foreign governments and can confer enormous value. Concerns about political influence have been especially sharp in China, where the courts and bureaucracy are designed to reflect the will of the ruling Communist Party. Chinese officials have emphasized that all trademark applications are handled in accordance with the law. More approvals are likely to come. Online records from China’s trademark office indicate that Ivanka Trump’s company last applied for trademarks — 17 of them — on March 28, 2017, the day before she took on a formal role at the White House. Those records on Monday showed at least 25 Ivanka Trump trademarks pending review, 36 active marks and eight with provisional approval. The World Intellectual Property Organization’s global brand database also shows that her company, Ivanka Trump Marks LLC, won three trademarks in the Philippines after her father took office. Two of them that cover clothing, including lingerie and baby clothes, were filed on Feb. 8, 2017 and registered in June and November. The third, filed on March 1, 2017, covers clothing and footwear and was registered in July. Companies register for trademarks for a variety of reasons. They can be a sign of corporate ambition, but in many countries, like China, where trademark squatting is rampant, companies also file defensively, to block copycats from grabbing legal rights to a brand’s name. Trademarks are classified by category and may include items that a company does not intend to market. Some trademark lawyers also advise clients to register trademarks for merchandise that is manufactured in China, even if it’s not sold there. Ivanka Trump does not have a large retail presence in China, but customs records show that the bulk of her company’s U.S. imports are shipped from China. The brand’s secretive Chinese supply chains have been the subject of some controversy. A year ago Monday, three men working for China Labor Watch, a New York-based non-profit group, were arrested while investigating labor abuses at Ivanka Trump suppliers in China. After thirty days in detention, they were released on bail, but continue to live under police surveillance. Li Qiang, the group’s founder, said Monday that he hopes bail will be lifted soon and that the case will not go to trial. Police in Ganzhou, the southeastern Chinese city where the men were detained, could not be reached for comment. The Chinese law firm that handles Ivanka Trump’s intellectual property in China also did not immediately respond to requests for comment.

Traders are worried this could be the ‘big unwinding’ of Italian bond markets

Strategist: See another Italian vote taking place in the fall
Strategist: See more elections in Italy taking place in the fall 6 Hours Ago | 01:55

Italian bonds have witnessed one of their worst trading weeks since the euro zone sovereign debt crisis, with many traders getting a stark reminder of the volatility that once characterized markets in the region. On Friday, two-year Italian bond yields rose 35 basis points in one day — almost equivalent to the entire range of the year for U.S. 10-year Treasurys. This was the weakest session in five years and continued a month that’s seen these yields rise 70 basis points in total. Yields move inversely to a bond’s price and a spike higher is seen as investors feeling more concerned about lending to Italy’s government. More specifically, traders usually sell short-maturity paper when there are growing credit risk concerns at a sovereign level. The original catalyst for the selling came from the populist parties hoping to take control of Italy after inconclusive elections in March. Lega and the Five Star Movement (M5S) plan to issue short-term bills to finance state activity in their economic policy proposals. Market participants were taken aback and many have interpreted that initiative as laying the foundation for a potential parallel currency in the future, further amplifying the potential new government’s collision course with the rest of Europe.  But the fear has not been limited to short-dated paper. Ten-year Italian bonds have also came under pressure with yields topping 2.5 percent and are now trading at their widest gap with German paper in over four years. There is palpable anxiety in the market as Italy’s political future remains uncertain. Over the weekend, M5S and Lega looked to have failed in their bid to form a government after President Sergio Mattarella rejected their pick for economy minister due to his euroskeptic credentials. This has raised the prospect of a caretaker government to lead the country into yet another round of elections later this year. Ratings agencies are also beginning to raise alarm bells. On Friday, Moody’s hinted that it may look to review Italy’s debt rating, citing concerns over the two anti-establishment parties’ fiscal plans that could ratchet up spending by as much as 100 billion euros ($117 billion), according to some analysts. With outstanding debt of more than 2.3 trillion euros and one of the highest levels of debt-to-gross domestic product in the advanced world, Italy’s public finances will come under scrutiny again if spending ramps up. Gene Frieda, a global strategist at Pimco, told CNBC via email that the immediate concern for investors is that another round of elections and the prospect of a right-wing anti-European populist government undermines the economic recovery in Italy.

“(It) threatens further rating downgrades. In that context, even after the recent sell-off, BTPs (Italian bonds) do not look particularly cheap,” he said. According to Goldman Sachs analysis, the European Central Bank owns around 20 percent of outstanding Italian bonds due to years of quantitative easing, but foreign investors also own about 37 percent. The question is then, will investors still want to own that risk into what could be a binary event?

U.S. record oil exports bite into Russia, OPEC market share in Asia

FILE PHOTO: Automobiles speed past an oil refinery as they travel down a major highway in Carson, California, U.S., May 23, 2018. REUTERS/Mike Blake

SINGAPORE (Reuters) – Record crude oil volumes exported from the United States will be heading to Asia in the next couple of months to take another piece of the market away from Russia and producers in the Organization of the Petroleum Exporting Countries (OPEC). The United States is set to export 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia, estimated a senior executive with a key U.S. oil exporters. Data from the Energy Information Administration shows U.S. oil exports peaked at 2.6 million bpd two weeks ago. [EIA/S] The record outbound volumes come as U.S. crude production hit all-time highs, depressing U.S. prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets. WTCLc1-LCOc1 The difference in the key benchmarks was a chance for Asian refiners to reduce light crude imports from the Middle East and Russia after Brent and Gulf prices touched multi-year highs, traders in Asia said. “We’re diversifying a lot to other regions. If Saudi Aramco still doesn’t reduce prices next month and ADNOC (Abu Dhabi National Oil Company) follows, we will increase our U.S. crude purchases,” a Southeast Asian oil buyer said. In Asia, China – led by Sinopec (600028.SS), the region’s largest refiner – is the biggest lifter of U.S. crude. The company, after cutting Saudi imports, has bought a record 16 million barrels (533,000 bpd) of U.S. crude, to load in June, two sources with knowledge of the matter said. India and South Korea are the next biggest buyers in Asia, each lifting 6 million to 7 million barrels in June, sources tracking U.S. crude sales to Asia said. Indian Oil Corp (IOC.NS) bought 3 million barrels earlier this month via a tender, while Reliance Industries (RELI.NS) purchased up to 8 million barrels, the sources said, although it wasn’t clear if Reliance’s cargoes would all load in June. South Korea’s purchases are driven by its top refiners SK Energy [SKENGG.UL] and GS Caltex [GSCAL.UL]. Taiwanese state refiner CPC Corp [CHIP.UL] has also snapped up 7 million barrels to be lifted in June and July. U.S. exports to Thailand will increase to at least 2 million barrels. State oil company PTT PCL (PTT.BK) is 1 million barrels of WTI Midland, while Thai Oil (TOP.BK) and Esso Thailand (ESSO.BK) bought at least 500,000 barrels of Bakken crude each, said traders with knowledge of the country’s crude deals. Reliance declined to comment. PTT, Thai Oil and Esso Thailand all did not respond to requests for comment. But even if Asia and Europe are keen to take more U.S. crude, the record volumes are straining export infrastructure in the United States, limiting its ability to pump and ship more oil. “Tight (shale) oil’s been eating OPEC’s lunch for the last few years. The lack of infrastructure will temporarily cede market share back to OPEC,” R.T. Dukes, head of U.S. Lower 48 oil supply at Wood Mackenzie said in a note last week. Reporting by Florence Tan; Additional reporting by Jessica Jaganathan in SINGAPORE, Promit Mukherjee in MUMBAI and Chayut Setboonsarng in THAILAND; Editing by Tom Hogue

Trump’s ‘Spygate’ is a ‘diversion tactic’: Senator Flake

U.S. Senator Jeff Flake (R-AZ) speaks with a reporter as he arrives for the weekly Senate Republican caucus luncheon at the U.S. Capitol in Washington, U.S., May 22, 2018. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) – Republican U.S. Senator Jeff Flake, who has not ruled out running against Donald Trump for the White House, on Sunday criticized as a “diversion tactic” the president’s unsubstantiated allegation last week of an FBI “spy” being planted in his election campaign. Flake’s comments, on NBC’s “Meet the Press,” put him again at the forefront of very few Republican lawmakers willing to openly challenge Trump over his attacks on law enforcement officials who are investigating Russian meddling in the 2016 U.S. election and possible collusion by the Trump campaign. The investigation was begun by the FBI in July 2016, but handed over by the Justice Department to Special Counsel Robert Mueller in May 2017 after Trump fired FBI Director James Comey. Flake said Trump’s unfounded allegations about FBI spying on his campaign, which the president has called “Spygate,” came amid escalating, behind-the-scenes concern in the U.S. Senate that the president may try to stop the probe by firing Mueller or the person who appointed him, Deputy Attorney General Rod Rosenstein.

“The president had this diversion tactic, obviously, with so-called Spygate,” Flake said of Trump’s assertions last week. “There is concern that the president is laying the groundwork to move on Bob Mueller or Rosenstein. If that were to happen, obviously, that would cause a constitutional crisis.”

Some senior Republicans, including Flake, have sounded similar warnings in recent weeks as the Mueller investigation has plowed forward, drawing frequent denunciations from Trump. Mueller is also investigating any possible obstruction of justice by Trump. Trump and the White House have repeatedly denied any collusion by the campaign, or any other wrongdoing. After Trump demanded an inquiry into his “spy” claim, the current FBI Director Christopher Wray and Rosenstein, who oversees Mueller’s probe, held two classified briefings on Thursday for senior lawmakers of both parties on the matter. “What I have seen so far is an FBI effort to learn more about individuals with a history of bragging about links to Russia that pre-exist the campaign. If those people were operating near my office or my campaign, I’d want them investigated,” said Rubio, who ran unsuccessfully against Trump in the 2016 Republican presidential primary campaign. U.S. intelligence agencies concluded in January 2017 that Russian President Vladimir Putin ordered an effort to meddle in the U.S. election campaign, included seeking to help Trump win. Moscow has denied the charge.

Rubio Sees Supermajority Backing for Possible Bid to Block ZTE

Image: Rubio Sees Supermajority Backing for Possible Bid to Block ZTE
(Getty) Sunday, 27 May 2018

A potential bill to prohibit ZTE Corp. and other Chinese telecommunications companies from operating in the U.S. would have supermajority support in Congress, Republican Senator Marco Rubio said. “Most members of Congress have come to understand the threat China poses,” Rubio said on CBS’s “Face the Nation” on Sunday when asked whether President Donald Trump would sign such a measure. “There’s a growing commitment in Congress to do something about what China is trying to do to the United States. And this is a good place to start.” Rubio was responding to Trump’s proposal to allow the telecom firm to remain in business after paying a $1.3 billion fine, changing its management and board, and providing “high-level security guarantees.” The president has suggested the deal is a favor to Chinese President Xi Jinping as the two nations hold talks to prevent a trade war. The Florida senator, who criticized the deal in a May 25 tweet and appeared on two Sunday political shows, said he expects Congress would pursue a measure to block ZTE and companies such as Huawei Technologies Co. Ltd. from operating in the U.S. He said their equipment could be used to help China spy on the U.S. and steal corporate secrets. “None of these companies should be operating in this country,” Rubio said. “None of them. They are used for espionage.” Rubio said he spoke with Trump on Friday night, and thinks that while the administration wants to punish ZTE for breaking U.S. sanctions on Iran and North Korea, he sees a broader effort to stop the Chinese from stealing intellectual property and forcing U.S. companies to transfer their technology to do business in China.

“Putting it out of business, a company like ZTE, is the kind of significant consequence that China would respond to, to understand that we’re serious,” Rubio said on ABC’s “This Week.”

The Senate on May 24 released a defense policy bill containing a provision requiring Trump, before making any ZTE deal, to certify with Congress that the company hasn’t violated U.S. law for the past year and is cooperating with U.S. investigations.

“If President Trump won’t put our security before Chinese jobs, Congress will act on a bipartisan basis to stop him,” said Maryland Democratic Senator Chris Van Hollen, author of the Senate provision.

Separately, a measure easily passed the House that would ban government agencies from using technology made by ZTE and would prohibit the Defense Department from renewing contracts with vendors that work with the Chinese company.

The measure also would apply to several other Chinese companies, including Hytera Communications Corp., Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co.

Schiff: ‘No evidence’ to support Trump’s spy theory

Schiff: 'No evidence' to support Trump's spy theory
© Greg Nash

The top Democrat on the House Intelligence Committee said Sunday that there is “no evidence” to support President Trump’s claim that there was an FBI informant embedded in his presidential campaign. “This is just a piece of propaganda the president wants to put out and repeat,” Rep. Adam Schiff (D-Calif.) said on ABC’s “This Week.” “And certainly we’ve seen this pattern before,” he added. “They put this out there and then they say ‘well, now that it’s out there, we need to investigate it.’ ” Trump has recently argued that the FBI improperly spied on his presidential campaign through the informant. News reports suggest the informant, a former government official now working at a university in England, held meetings with three different people in the Trump campaign.  Trump has argued the use of the informant by the previous administration was a political trick, while suggesting the informant was paid for his actions.  “The Democrats are now alluding to the concept that having an Informant placed in an opposing party’s campaign is different than having a Spy, as illegal as that may be,” he tweeted on Friday. “But what about an ‘Informant’ who is paid a fortune and who ‘sets up’ way earlier than the Russian Hoax?”

Sen. Marco Rubio (R-Fla.), who appeared on the ABC show before Schiff, defended the FBI, saying he believes law enforcement were right to investigate “certain individuals” with suspicious histories connected to Russia.

“Even Senator Rubio this morning saying well, we should look in and find out if this is true,” Schiff said later. “But this is part of the propaganda machine, ‘let’s spread a completely fallacious story and then let’s say that it needs to be investigated and give it a life of its own.’ ”

Former CIA director on North Korea: ‘These folks are not going to get rid of all their nuclear weapons’

Former CIA director on North Korea: 'These folks are not going to get rid of all their nuclear weapons'
© Getty Images Former CIA Director Michael Hayden said on Sunday that he does not believe North Korea’s claims that it is willing to denuclearize.

“These folks are not going to get rid of all their nuclear weapons,” he said on ABC’s “This Week.” “And if President Trump’s brand … demands something like that, this is going to end up in a very bad place,” he added. South Korea’s president said earlier Sunday that North Korean leader Kim Jong Un is committed to “complete” denuclearization and a summit with Trump. “Chairman Kim and I have agreed that the June 12 summit should be held successfully, and that our quest for the Korean Peninsula’s denuclearization and a perpetual peace regime should not be halted,” Moon Jae-in told reporters in Seoul on Sunday, according to Reuters. Trump also hinted late Sunday that a meeting with the North Korean leader is still possible, even though the president canceled the summit earlier last week. “I think the realistic expectation for the meeting is that you do something at the beginning, not the end of the process, that you begin to stabilize the Korea problem, not solve it,” Hayden said on ABC. Sen. Marco Rubio (R-Fla.), who appeared on the show before Hayden, also said he is convinced Kim does not want to denuclearize.

Fed relying on biased data that makes ‘B-minus economy’ look like an ‘A+” : James Bianco

Econ survey data misleading Fed into thinking it’s an 'A+' economy, veteran market researcher warns

Econ survey data misleading Fed into thinking it’s an ‘A+’ economy, veteran market researcher warns   5:50 PM ET Fri, 25 May 2018 | 02:15

A veteran market researcher is out with a warning — saying the Federal Reserve is relying too heavily on economic surveys skewed by social media to mold their policies.

According to Bianco Research President James Bianco, most economists mistakenly believe that leading indicators are signaling an “A+” economy that can withstand rising interest rates.”It’s more like a B- economy,” he told CNBC’s “Trading Nation” on Friday. “It’s not this screaming home run that everybody thinks it is based on the survey data.”

Bianco said social media is creating the bandwagon effect among survey respondents, a psychological phenomenon characterized by people following the herd.

“The advent of social media is allowing us basically to be inundated with financial news or economic news,” he said, adding the bulk of the news about the world’s largest economy has been largely favorable. “When somebody is asked ‘what do you think about the economy,” they are not answering ‘what do you think about the economy,’ Bianco said. “They are answering ‘What have you read about the economy?'” Bianco fears the Fed will make a policy error based on respondents’ answers. “Economists like at the Fed say ‘Wow, look at that data. It’s even better than we thought. We have to raise rates even faster,'” he said, adding that the tightening could derail the bull market. “The 10-Year [yield] could very well be at 3 percent by the end of next year with a 3 percent funds rate,” Bianco said. “[That’s when] you get an inverted yield curve.” Nick Note: The Fed has no choice but to raise rates. And the inverted yield curve will be a fact of life. And the US economy is entering its next cycle of rate increases, Credit wipe out and  recession with all the coming tears.

Gas prices soar on Memorial Day weekend. These places are hit hardest.

Gas prices have soared, and some areas of the country are feeling it more than others.
gas prices memorial day
Prices at the pump haven’t been this high for Memorial Day weekend since 2014, when crude was sitting in triple-digit territory.

The sharpest price hikes have hit the Midwest. Over the past month, the average price per gallon of gas in Michigan has shot up 32 cents, more than any other state. Its statewide average recently hit $3.15, according to data from GasBuddy, a platform that tracks real-time prices at stations across the country. North Dakota’s gas is $2.96 on average, about 29 cents higher than a month ago. And Wisconsin’s gas hit $2.94 per gallon, a 28 cent increase. Wyoming, Minnesota and Ohio round out the top six. The national average price per gallon of regular is creeping toward the $3 mark, making it the most expensive for a Memorial Day weekend since 2014, according to the American Automobiles Association. Soaring gas prices can be attributed to factors like oil production cuts orchestrated by OPEC and Russia, Venezuela reducing output, and the United State’s decision to leave the Iran nuclear deal. All that may seem pretty far removed for vacationers that are hoping to kick off the unofficial start of summer relaxing at the beach. But if that beach is in California, chances are the most expensive pump prices in the country are nearby. The West Coast typically has the most expensive gas. Geography, high demand and clean air regulations contribute to the price per gallon. Folks in some areas, such as San Francisco, are seeing prices near $4 per gallon. The American cities that have seen the steepest price increases at the pump are also speckled across the Midwest. In Toledo, Ohio, gas prices have climbed 41 cents, and just across the border in Monroe, Michigan, residents have seen a 40 cent increase. Monroe City Council member Kellie Vining told CNNMoney that she’s “heard a lot of complaining” about gas prices — and, for some, it’s putting a damper on the holiday weekend. She said she spoke to a local farmer who canceled his annual Memorial Day weekend vacation to Michigan’s Upper Peninsula “directly due to the increase in gas prices.”

“I represent a working class neighborhood and I am concerned for my constituents ability to keep up with the high gas prices, especially when coupled with the other utilities and insurance,” Vining said in an email.

Patrick DeHaan, head of petroleum analysis at GasBuddy, says it’s really a matter of bad timing that has made price increases seem so dramatic in the Midwest. Gas prices tend to cycle through highs and lows, and it just so happens stations in the heartland were at the low end of that pricing cycle a month ago. So, it’s made the recent price hikes seem more pronounced.

Half of Americans won’t take a vacation this summer—and not just because they can’t afford it

This family is on a permanent vacation and making money while they do it
This family is making money while traveling the world — here’s how they do it

Vacation is often a time to relax and refresh. Some experts think it could even make you more productive when you head back to work. But a whopping 49 percent of Americans won’t be taking one this summer, and while lack of money certainly plays a role, it’s not the only reason so many people are deciding to stay home. Bankrate, which conducted a survey of 1,000 people aged 18 or older, found that, of the 49 percent who aren’t planning a vacation, 50 percent said they can’t afford it, 24 percent have other family obligations and 22 percent can’t take time off work. Younger people “are most likely to say they can’t go on vacation because there’s too much on their plates,” the survey notes. “They’re also more inclined to say that their financial situation is keeping them from taking time off.” A 2017 GoBankingRates survey found that millennials between 18 and 24 years old had less than $1,000 in savings, which doesn’t leave a lot of room for discretionary spending. Nearly half of respondents had nothing saved at all. Older Americans, on the other hand, are more likely to cite family obligations rather than work-related commitments as the reason they won’t take a vacation.

Even when Americans have paid time off, the survey points out, they’re reluctant to use it: Only 36 percent of respondents who have paid vacation time plan to use all of it this year. And 13 percent of workers with paid time off don’t intend to use any of their vacation days.

Oil output could return to October 2016 level, says Russia’s Novak

Russian Energy Minister Alexander Novak attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia May 25, 2018. REUTERS/Sergei Karpukhin

MOSCOW (Reuters) – A return to the oil production levels that were in place in October 2016, baseline for the current deal to cut output, is one of the options for easing curbs, Russia’s energy minister said on Saturday.  Sources said this week that Saudi Arabia and Russia were discussing raising OPEC and non-OPEC oil production to ease 17 months of strict supply curbs amid concerns that a price rally has gone too far. “When we extended the agreement until the end of 2018, we spoke about such possibilities (of returning to the October 2016 level),” Novak told reporters. “But a decision will be made in June,” he added, referring to meetings of OPEC and non-OPEC countries in Vienna on June 22-23. The existing deal came into force on January 1, 2017, and envisaged global oil producers reducing their combined output by 1.8 million barrels per day (bpd) to cut bloated stockpiles and prop up oil prices. Russia’s oil output reached a 30-year high of 11.247 million bpd in October 2016 and it pledged to cut it by 300,000 bpd to 10.947 mln. In March and in April this year it failed to fully comply with the deal, pumping at the pace of 10.97 million bpd, a 11-month high. Oil prices have risen to $80 per barrel, levels unseen since late 2014. Russian President Vladimir Putin said on Thursday that the price of $60 “suits Russia”. Novak was also quoted as saying on Saturday he expected Iran to reduce its output by no more than 10 percent as a result of the move by the United States to withdraw from a nuclear deal and reinstate sanctions against Tehran. “I think the output reduction will not be as significant as many expect,” RIA news agency quoted Novak as saying when asked if he agreed with an estimate that the sanctions could remove as much as 800,000 barrels a day from the market. “Some 10 percent is probably the maximum level,” he said. Novak also estimated that the “geopolitical risk” premium to the oil price was around $5-$7 per barrel.

Kim Jong Un, South Korea’s Moon Meet Amid Uncertainty Over U.S. Summit

Fourth inter-Korean summit in history was aimed at discussing a possible meeting between Kim and President Donald Trump

South Korean President Moon Jae-in, right, hugs North Korean leader Kim Jong Un after their second summit at the north side of the truce village of Panmunjom.
South Korean President Moon Jae-in, right, hugs North Korean leader Kim Jong Un after their second summit at the north side of the truce village of Panmunjom. Photo: Agence France-Presse/Getty Images By Jonathan Cheng

South Korean President Moon Jae-in and North Korean leader Kim Jong Un held a surprise meeting at the demilitarized zone Saturday aimed at keeping inter-Korean relations, and a possible summit between Mr. Kim and President Donald Trump, on track. South Korea’s presidential office announced the two-hour meeting after it had wrapped up, saying the two leaders met on the north side of the demilitarized zone and discussed how to successfully stage a summit between Messrs. Trump and Kim. The meeting—the fourth in history between leaders of the two Koreas—was the latest dramatic turn in a series of diplomatic maneuvers as the U.S. and South Korea seek to rein in North Korea’s nuclear ambitions. It followed an April 27 summit between Messrs. Moon and Kim on the south side of the line dividing the inter-Korean truce village of Panmunjom, at which the two men signed a Panmunjom Declaration vowing an end to war and hostilities between the two sides. It also came days after Mr. Trump abruptly scrapped a planned summit with Mr. Kim in Singapore on June 12—only to say a day later that it might still take place. White House Press Secretary Sarah Sanders said Saturday that a team that travels in advance to iron out details for official trips would depart for Singapore on Sunday to prepare should the summit take place. “ Donald Trump has been flip-flopping on whether he’s going to get involved and move forward on a summit, and he’s given the window for North Korea to look like the levelheaded, rational actor,” Mr. Bell said.

Brazilian president sends in army as truck protest paralyzes country

São Paulo, the biggest city in South America, in state of emergency over fuel shortages while markets run out of food
Brazilian truck drivers partially block the Washington Luiz road (BR-040), at Duque de Caxias municipality, during the fifth day of their nationwide strike over rising fuel costs in Rio de Janeiro, Brazil, on Friday.
Brazilian truck drivers partially block the Washington Luiz road (BR-040) during the fifth day of their nationwide strike over rising fuel costs in Rio de Janeiro, Brazil, on Friday. Photograph: Mauro Pimentel/AFP/Getty Images

Brazil’s conservative president Michel Temer has ordered the army and federal police to clear highways blockaded by striking truck drivers after a protest over soaring fuel prices entered its fifth day. The blockades have paralysed much of the country’s economy and prompted São Paulo, the biggest city in South America, to declare a state of emergency over fuel shortages. “I have actioned the federal security forces to unblock highways and I am asking governors to do the same,” Temer said in a televised address on Friday. “We will not let the population do without its primary needs.” The protests began over fuel prices but have been further stoked by widespread anger over repeated graft scandals involving prominent politicians – including Temer himself. In São Paulo and Rio de Janeiro, supermarkets and restaurants are running low on supplies. Some factories have shut down, bus services been reduced and even the Refugees World Cup, scheduled to take place in São Paulo on Saturday, has been cancelled.

Mostly empty crates are seen in a vegetables stall at Brasília’s Central Food Supply (Ceasa) on Friday as the truckers’ strike, causes severe food shortages in the capital.
Mostly empty crates are seen in a vegetables stall at Brasília’s central market as the truckers’ strike, causes severe food shortages in the capital. Photograph: Evaristo Sa/AFP/Getty Images

The Folha de S Paulo newspaper site reported that 11 airports including one in the capital city Brasília have run out of fuel, and long queues have built up at gas stations around the country. Brazil’s federal highway police said that highways continued to be blocked on Friday but would not confirm how many. Local media reported that security forces will be able to enter trucks and remove them from the highways, and the decree is due to come into effect on Friday. Ahead of yesterday’s agreement, Brazilian media reported that some congressmen were fleeing Brasilia to return to their home states before the fuel ran out. Eunício Oliveira, the Senate president who flew back to his home state of Ceará in the North East, was forced to fly straight back to Brasília after a wave of criticism.

Videos circulating on WhatsApp showed truck drivers enjoying barbecues on blocked highways and pictures of trucks covered in Brazil flags and banners reading “stop with the thieving or we’ll stop the country”. On Friday striking school bus drivers paraded down São Paulo’s landmark Paulista Avenue in a cacophony of blaring horns. Drivers drew a direct link between their own increased fuel costs and the vast sums of money that politicians of all parties have been accused of stealing.

U.S. reaches deal to keep China’s ZTE in business: congressional aide


WASHINGTON (Reuters) – The Trump administration told lawmakers the U.S. government has reached a deal to put Chinese telecommunications company ZTE Corp back in business after it pays a significant fine and makes management changes, a senior congressional aide said on Friday. U.S. President Donald Trump appeared to confirm the deal in a tweet late on Friday. “I closed it down then let it reopen with high level security guarantees, change of management and board, must purchase U.S. parts and pay a $1.3 Billion fine.” The reported deal involving China’s second-largest telecommunications equipment maker ran into immediate resistance in Congress, where Democrats and Trump’s fellow Republicans accused him of bending to pressure from Beijing to ease up on a company that U.S. intelligence officials have suggested poses a significant risk to U.S. national security. ZTE was banned in April from buying U.S. technology components for seven years for breaking an agreement reached after it violated U.S. sanctions against Iran and North Korea.. After ZTE makes a series of changes it would now be allowed to resume business with U.S. companies, including chipmaker Qualcomm Inc. The deal, earlier communicated to officials on Capitol Hill by the Commerce Department, requires ZTE to pay a substantial fine, place U.S. compliance officers at the company and change its management team, the aide said. The Commerce Department would then lift an order issued in April preventing ZTE from buying U.S. products. ZTE shut down most of its production after the ruling was announced. Fox News said Trump told them on Thursday that he had negotiated the $1.3 billion fine with Chinese President Xi Jinping in a phone call. ZTE, which is publicly traded but whose largest shareholder is a Chinese state-owned enterprise, agreed last year to pay a nearly $900 million penalty and open its books to a U.S. monitor. The penalty stemmed from for breaking an agreement after it was caught illegally shipping U.S. goods to Iran and North Korea, in an investigation dating to the Obama administration. Rubio, as well as Democratic Senators Chuck Schumer and Chris Van Hollen, said Congress should act to stop Trump from letting ZTE get back into business.

“If the administration goes through with this reported deal, President Trump would be helping make China great again,” Schumer said Friday on Twitter. “Would be a huge victory for President Xi, and a dramatic retreat by Pres Trump. Both parties in Congress should come together to stop this deal in its tracks.”

U.S. intelligence and U.S. law enforcement agencies have serious concerns that ZTE and other Chinese telecommunications firms use their equipment to gather intelligence on U.S. citizens. The U.S. Department of Defense has also stopped selling ZTE’s mobile phones and modems in stores on its military bases, citing potential security risks. Nick Note: The art of a bad deal.. its the CHINA JOBS JOBS JOBS JOBS ACT……. Traitor

U.S. auto import probe fans tariff fears, riles Asia, Europe

Automobiles are on a truck for delivery to a car lot in Queens, New York, U.S., May 24, 2018.

(Reuters) – A U.S. threat that it may introduce tariffs on foreign auto imports drew strong criticism on Thursday from the country’s main business lobbying group, which warned of a “staggering” blow to the industry and the prospect of a global trade war. President Donald Trump’s administration opened a trade investigation on Wednesday into whether vehicle imports had damaged the American auto industry. That could lead to tariffs of up to 25 percent on the same “national security” grounds used to impose U.S. steel and aluminum duties in March. U.S. Commerce Secretary Wilbur Ross said on Thursday the investigation was still in its early stages but that other countries’ high, artificial barriers, such as tariffs and other interventions, have skewed the marketplace. “Now it’s very difficult to get back to a reciprocal arrangement,” Ross said in an interview on CNBC, a day after announcing the probe, which could lead to new U.S. tariffs on imported vehicles.

The probe, launched under Section 232 of the Trade Expansion Act of 1962, will look at whether vehicle and parts imports are threatening the industry’s health and ability to research and develop advanced technologies, Ross said on Wednesday.

The U.S. Chamber of Commerce said it strongly opposes the move. “If this proposal is carried out, it would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war,” chamber President and Chief Executive Officer Thomas Donohue said in a statement. He urged the government to reverse course. The probe comes ahead of midterm elections in the United States in November that will determine whether Republican President Donald Trump’s party retains control of Congress. It is seen as part of Trump’s “America First” promise to win back manufacturing jobs lost to overseas competitors. U.S. Senate Finance Committee Chairman Orrin Hatch said possible auto tariffs are “deeply misguided,” and urged the administration “to remain focused on addressing China’s trade practices.”

Surging gas prices could fuel backlash against Trump

A huge jump in driving costs in recent months is likely to push a wave of economic anger across the nation — just in time for the midterm elections.

A man standing at a gas pump is pictured. | Getty
The increased cost of fuel is already wiping out a big chunk of the benefit Americans received from the GOP tax cuts. | Joe Raedle/Getty Images

President Donald Trump is hoping a wave of tax-cut-fueled economic euphoria will boost his approval ratings and his party’s political fortunes this fall. A sharp spike in gas prices could slam the brakes on all of that. As Americans head out for traditional Memorial Day weekend road trips, they’ll confront gas prices of nearly $3 a gallon, the highest since 2014 and a 25 percent spike since last year. The increased cost of fuel is already wiping out a big chunk of the benefit Americans received from the GOP tax cuts. And things could get worse as summer approaches following the administration’s standoff with Iran and a move by oil-producing nations to tighten supplies. The result: The economic and political benefits Trump and the GOP hoped to reap from cutting tax rates could be swamped by higher pump prices that Americans face every time they hit the road. “If you look at the benefits of what households are getting from lower rates, roughly one-third of that is wiped out if these higher gas prices are sustained,” said Ellen Zentner, chief U.S. economist at Morgan Stanley. “And when we drive down the street, every block we see glaring signs about how much gas costs that day and it’s all over the media. The tax cuts were a one-off. It’s a one-time level shift in your paycheck that you are not reminded of every day.” The economic impact of higher gas prices is already stark.

Morgan Stanley estimated that if prices remain at current levels, they would cost U.S. households an additional $38 billion this year. Using Joint Committee on Taxation data, it estimated the tax-cut bill would reduce individual taxes by about $128 billion in 2018. And it gets even worse for Trump.

The increase in gas prices is felt most heavily by lower-income Americans — especially in the South where people drive the most — who received the smallest share of the tax-cut benefits.

So the increase could hit Trump’s blue-collar Southern base the hardest while potentially eroding confidence in the economy and tamping down consumer spending, which accounts for 70 percent of economic output.

So far, consumer spending remains fairly strong as higher wages and lower taxes encourage people to open their wallets. But the first clear impact of higher gas prices emerged in the latest retail sales figures, which showed a 0.3 percent decline in spending at restaurants and bars. Typically, the first area households cut back when feeling pinched is going out to eat. Spending on travel, tourism and apparel, among other categories, could also wind up declining if fuel prices keep rising.

At Trump Tower, Michael Cohen and Oligarch Discussed Russian Relations

Viktor Vekselberg, a Russian billionaire, met with President Trump’s lawyer Michael D. Cohen 11 days before the inauguration. CreditSergei Savostyanov/TASS, via Getty Image


Eleven days before the presidential inauguration last year, a billionaire Russian businessman with ties to the Kremlin visited Trump Tower in Manhattan to meet with Donald J. Trump’s personal lawyer and fixer, Michael D. Cohen, according to video footage and another person who attended the meeting.


Mr. Cohen at Trump Tower in Manhattan. Soon after the meeting with Mr. Vekselberg, he received a $1 million contract from a company tied to the oligarch.CreditREX/Shutterstock

In Mr. Cohen’s office on the 26th floor, he and the oligarch, Viktor Vekselberg, discussed a mutual desire to strengthen Russia’s relations with the United States under President Trump, according to Andrew Intrater, an American businessman who attended the meeting and invests money for Mr. Vekselberg. The men also arranged to see one another at the inauguration, the second of their three meetings, Mr. Intrater said. Days after the inauguration, Mr. Intrater’s private equity firm, Columbus Nova, awarded Mr. Cohen a $1 million consulting contract, a deal that has drawn the attention of federal authorities investigating Mr. Cohen, according to people briefed on the inquiry.


Andrew Intrater, Mr. Vekselberg’s cousin, leads the firm that awarded the contract.CreditDuane Prokop/Getty Images for the USC Shoah Foundation

Mr. Intrater said in an interview that Mr. Vekselberg, his cousin and biggest client, had no role in Columbus Nova’s decision to hire Mr. Cohen as a consultant. When asked about the meeting at Trump Tower during the presidential transition, Mr. Intrater described it as a brief and impromptu discussion, and said that Mr. Vekselberg had not originally planned to attend. “Obviously, if I’d known in January 2017 that I was about to hire this high-profile guy who’d wind up in this big mess, I wouldn’t have introduced him to my biggest client, and wouldn’t have hired him at all,” Mr. Intrater said, adding that he had agreed to be interviewed about his dealings with Mr. Cohen because he had not done anything wrong.


Mr. Vekselberg with President Vladimir V. Putin of Russia in January last year.Credit Alexei Druzhinin\TASS via Getty Images

The disclosure of the meeting sheds additional light on the intersection between Mr. Trump’s inner-circle and Russians with ties to the Kremlin. The meeting came after Mr. Trump’s son, Donald Trump Jr., met at Trump Tower during the campaign with a Kremlin-linked lawyer claiming to have damaging information on his opponent, Hillary Clinton, and a former campaign aide, George Papadopoulos, met with Russian intermediaries in Europe. During the campaign, Mr. Cohen was pursuing a deal to build a Trump high-rise in Moscow, which did not come to fruition.

Trump’s clueless handling of Kim is to blame for summit fiasco

Trump vs. Kim: A fight the US President can't win

(CNN)Hellbent on besting Barack Obama at everything, Donald Trump began talking about his potential Nobel Peace Prize long before the date set for his summit with North Korean leader Kim Jong Un. He heaped praise on the most repressive leader in the world — “very honorable” were the words he used — and the White House Military Office even issued a commemorative medal for the upcoming summit which, bizarrely, called Kim “Supreme Leader.” But Thursday, with a letter to Kim that is true to the cartoon nature of his personality, Trump cites “the tremendous anger and open hostility displayed in your most recent statement” and canceled the peace talks in a fit of childish pique. This came after Vice President Mike Pence’s threat that the North Korean government could be toppled as Libya’s was if Kim didn’t come to heel — a threat that prompted a North Korean official to call Pence a “political dummy.”

Rarely has a President shown himself to be more clueless than Trump in his handling of the Korean crisis. With his schoolboy taunts about “rocket man” and wild swings between threats and loving praise, Trump has acted true to form. To understand this one need only consider his previous record of negotiating in business.
Trump vs. Kim: A fight the US President can’t win
As a New York real estate promoter, Trump habitually made outlandish statements and proposed projects he could never deliver. In one case he was going to build the tallest building in America on the Upper West Side of Manhattan. In another he insisted the big convention center named after longtime Sen. Jacob Javits of New York be named after his father, Fred Trump. Neither folly came to pass. In politics, Trump’s early endeavors were marked by similar bluster. He feuded with Mayor Ed Koch and criticized every president who occupied the White House from 1976 forward. As a young man, he talked openly of the amounts required to purchase the loyalties of lawmakers and even New York Gov. Hugh Carey. And in my interviews with him in 2014, he disparaged politicians as almost as dishonest as the press.
Trump’s methods worked when there was little more than a property development or the next day’s headlines at stake. But as he approached North Korea with the same technique, it became obvious he was out of his depth. As other parties manipulated him, Trump looked like the monkey-in-the-middle in a game of keep-away played in a schoolyard. Trump keeps giving Kim the upper hand First the North Koreans, who had obviously made a deep study of Trump, provoked him with nuclear tests and missile launches. Going further than they had ever gone before, they were able to goad a gullible Trump into juvenile taunts and threats of “fire and fury.” This behavior appalled people around the world and made Trump into an outlier in the diplomatic realm. Having captured Trump’s attention, the North Koreans then played their hand perfectly, courting the South Koreans and demonstrating to the world at the Winter Olympics that they could be warm-hearted members of the international community. Thus lulled into over-confidence, Trump made what he must have believed to be a brilliant overture for peace talks that would finally give Kim the legitimacy he craved. To seal the plan, he even sent Secretary of State Mike Pompeo to Pyongyang.
A commemorative coin featuring US President Donald Trump and North Korea's Kim Jong Un was struck by the White House Communications Agency ahead of their summit meeting, which Trump has cancelled. The coin depicts Trump and Kim, described as North Korea's "Supreme Leader," in profile facing each other in front of a background of US and North Korean flags.

Continue reading “Trump’s clueless handling of Kim is to blame for summit fiasco”

Turkey’s Currency Meltdown

Investors flee the lira amid Erdogan’s political central banking.

People exchange money at a currency exchange office in Istanbul, May 23.
People exchange money at a currency exchange office in Istanbul, May 23. Photo: erdem sahin/epa-efe/rex/shutters/EPA/Shutterstock

Investing in emerging markets is like watching the tides without the moon as a guide. Capital flows in and out in surges, and woe to the country that gets caught with bad policies when the tide suddenly goes out. Argentina has been getting that re-education of late, and now Turkey is watching capital flee for safer climes. Turkey’s lira fell as much as 5% on Wednesday, and it’s lost more than a fifth of its value this year, adding to a long decline that is forcing extreme monetary measures to compensate. Much of the blame lies with President Recep Tayyip Erdogan, as Turkey has been running a current-account deficit that is on trend to exceed 6% of GDP. Turkey has been growing rapidly but the growth has been heavily financed by dollar-denominated investment Meanwhile, Mr. Erdogan has been beating the central bank like it’s Syria’s Bashar Assad. In Ankara this month, he called high interest rates “both the mother and father of all evils.” Investors took this to mean he’s exerting political control over Turkey’s central bank even as inflation has reached nearly 11%. With capital fleeing, Mr. Erdogan is getting higher interest rates in any case as the central bank tries to stem the lira panic. On Wednesday the bank lifted a key lending rate to 16.5% from 13.5%. Consider this the price of the lost credibility of Turkish institutions under Mr. Erdogan’s increasingly authoritarian rule. Dictators are rarely good economic managers because they want to dictate fiscal and monetary policy as much as they do every political choice. The pressure on Turkey and other emerging markets has also been exacerbated by a rising U.S. dollar, as investors anticipate stronger American growth in the wake of tax reform and deregulation. The U.S. Federal Reserve is raising interest rates, which is another reason for capital flows out of emerging markets. Mr. Erdogan has wanted to keep interest rates low before the June 24 parliamentary and presidential elections when he hopes to consolidate even more power. That calculation has boomeranged with the lira panic, so look for him to blame the currency rout on foreigners and Western politicians. Turks would be smarter to hold Mr. Erdogan accountable.

Iran staying within nuclear deal’s restrictions, UN atomic watchdog says

Iran has stayed within the main curbs on its nuclear activity that had been imposed by its deal with major powers despite the US pull-out from the pact, but could be quicker to provide extra access to inspectors, the United Nations atomic watchdog agency indicated In its first such report since US President Donald Trump announced Washington’s withdrawal on May 8, the International Atomic Energy Agency (IAEA) said that Iran had complied with limits on the level to which it can enrich uranium, its stock of enriched uranium and other items. It did, however, rebuke Iran for dragging its feet over “complementary access” inspections under the agency’s Additional Protocol, which Iran is enacting under terms of the deal. “The Agency … has conducted complementary accesses under the Additional Protocol to all the sites and locations in Iran which it needed to visit,” the IAEA wrote in a confidential report that was sent to member states and seen by Reuters. “Timely and proactive cooperation by Iran in providing such access would facilitate implementation of the Additional Protocol and enhance confidence,” it said. The report came with France, Britain and Germany scrambling to salvage the deal’s core trade of sanctions relief in exchange for restrictions on nuclear fuel production. This comes after Trump withdrew the United States from the accord. Senior officials from the other countries that signed the deal – France, Britain, Germany, Russia, China and Iran – are meeting in Vienna on Friday to discuss next steps.

U.S. auto import probe fans tariff fears, riles Asia, Europe

(Reuters) – A U.S. threat that it may introduce tariffs on foreign auto imports drew strong criticism on Thursday from the country’s main business lobbying group, which warned of a “staggering” blow to the industry and the prospect of a global trade war. Automobiles are on a truck for delivery to a car lot in Queens, New York, U.S., May 24, 2018.  President Donald Trump’s administration opened a trade investigation on Wednesday into whether vehicle imports had damaged the American auto industry. That could lead to tariffs of up to 25 percent on the same “national security” grounds used to impose U.S. steel and aluminum duties in March. U.S. Commerce Secretary Wilbur Ross said on Thursday the investigation was still in its early stages but that other countries’ high, artificial barriers, such as tariffs and other interventions, have skewed the marketplace. “Now it’s very difficult to get back to a reciprocal arrangement,” Ross said in an interview on CNBC, a day after announcing the probe, which could lead to new U.S. tariffs on imported vehicles. The probe, launched under Section 232 of the Trade Expansion Act of 1962, will look at whether vehicle and parts imports are threatening the industry’s health and ability to research and develop advanced technologies, Ross said on Wednesday.

Trump signs the biggest rollback of bank rules since the financial crisis

Community banks and credit unions should be regulated the same way: President Trump
Community banks and credit unions should be regulated the same way: President Trump

President Donald Trump signed the biggest rollback of bank regulations since the global financial crisis into law Thursday. The measure designed to ease rules on all but the largest banks passed both chambers of Congress with bipartisan support. Backers say the legislation will lift burdens unnecessarily put on small and medium-sized lenders by the Dodd-Frank financial reform act and boost economic growth. Opponents, however, have argued the changes could open taxpayers to more liability if the financial system collapses or increase the chances of discrimination in mortgage lending. “Dodd-Frank was something they said could not be touched. And honestly, a lot of great Democrats knew that it had to be done and they joined us in the effort,” Trump said before he signed the bill, surrounded by lawmakers from both major parties. “And there is something so nice about bipartisan, and we’re going to have to try more of it. Let’s do more of it.”

The measure eases restrictions on all but the largest banks. It raises the threshold to $250 billion from $50 billion under which banks are deemed too important to the financial system to fail.

Those institutions also would not have to undergo stress tests or submit so-called living wills, both safety valves designed to plan for financial disaster. It eases mortgage loan data reporting requirements for the overwhelming majority of banks. It would add some safeguards for student loan borrowers and also require credit reporting companies to provide free credit monitoring services. Republicans have made slashing regulations one of their top priorities since Trump took office in January 2017. But Democrats, who largely support the Dodd-Frank reforms, helped to get the bank regulation bill through Congress. Seventeen Democratic senators voted for the bill, while 33 House Democrats supported it. The senator said her colleagues who opposed it did so not because of community banking policies but because of the restrictions lifted on mid-sized and regional institutions.

Jared Kushner gets permanent White House security clearance, and met with special counsel for a second time

Jared Kushner
Getty Images Jared Kushner

President Donald Trump’s son-in-law, Jared Kushner, has been granted a permanent security clearance after operating under an interim clearance — or less — for more than a year. In a statement to CNBC, Kushner’s lawyer, Abbe Lowell, also said that his client sat “for two interviews with the Office of Special Counsel.” The second interview lasted for more than six hours, and included questions regarding the Trump campaign and the transition period before the presidential inauguration, as well as the Comey firing, NBC reported, citing a source familiar with the interview. Kushner, a senior White House advisor, had reportedly met with special counsel Robert Mueller’s team for the first time in November as part of the probe of potential links between Trump’s presidential campaign and Russia. Career officials approved Kushner’s permanent security clearance after the completion of an FBI background check process. The president was reportedly not involved in that process. Several White House officials with interim security clearances had been downgraded in February, chief of staff John Kelly wrote in a memo at the time. Lowell told CNBC on Wednesday that his client’s application “was properly submitted, reviewed by numerous career officials and underwent the normal process.” He added: “Having completed all of these processes, he’s looking forward to continuing to do the work the president has asked him to do.” Neither the special counsel nor the White House immediately responded to CNBC’s requests for comment.

Deutsche Bank looks to cut 10,000 jobs to reduce costs: source

FILE PHOTO: John Cryan, at the time CEO of Germany’s Deutsche Bank, and board member Christian Sewing attend the bank’s annual news conference in Frankfurt, Germany, February 2, 2018. REUTERS/Ralph Orlowski/File Photo

FRANKFURT (Reuters) – Deutsche Bank (DBKGn.DE) plans to cut 10,000 jobs, or about a tenth of its global workforce, as part of efforts to reduce costs, a person with knowledge of the matter said on Wednesday.The German bank’s supervisory board met on Wednesday evening to talk about job cuts and other details of a broad restructuring plan ahead of the company’s annual general meeting on Thursday. The loss-making bank said after an abrupt management reshuffle last month that it aimed to scale back its global investment bank and refocus on Europe and its home market after three consecutive years of losses. Deutsche Bank, Germany’s biggest bank, is expected to announce further details of its reorganisation plans early on Thursday. Bloomberg News reported the bank was planning to withdraw from a number of equities markets across the globe. The Bloomberg report, which cited unidentified people, said that Deutsche would sharply scale back its presence in the United States, and had started cutting activities in Central Europe, the Middle East, and Africa. When it announced last month that it would scale back its investment bank, Deutsche Bank said equities was one of the areas it was looking at for possible cuts. It has also said that it would cut back U.S. bond trading and the business that services hedge funds.


Shareholders, fed up with a languishing share price and dwindling revenues, will call on the bank’s management to speed up the recovery process at the AGM. Hans-Christoph Hirt, head of shareholder adviser Hermes EOS at Hermes Investment Management, told Reuters on Wednesday he wanted to see a “credible strategy with achievable targets”. Deutsche Bank Chairman Paul Achleitner last month abruptly replaced CEO John Cryan with Christian Sewing amid investor complaints that the bank was falling behind in executing a turnaround plan. “Critically, the most recent CEO appointment needs to work out,” Hirt said. Deutsche Bank’s shares have fallen nearly 31 percent this year. The bank is also under pressure from credit ratings agencies. Standard & Poor’s is expected to say by the end of the month whether it will cut Deutsche Bank’s rating after putting

Mueller Says He’s Ready for Judge to Sentence George Papadopoulos

Special Counsel Robert Mueller said Wednesday that he’s ready to move forward with the sentencing of George Papadopoulos. His team issued a status report saying that they want a presentence investigation report, and a joint status report by June 22.

Hmmm. This is interesting. Looks like Mueller’s team is done with what they need from George Papadopoulos. They’re ready to go forward with proceeding toward sentencing. pic.twitter.com/hDN2Qp6niD

— Chris Geidner (@chrisgeidner) May 23, 2018

Papadopoulos, a former Trump campaign foreign policy adviser, pleaded guilty last year, admitting he lied to the FBI about his conversations with a professor with links to the Russian government. The academic talked about “dirt” on Democratic presidential candidate Hillary Clinton. The terms of Papadopoulos’s guilty plea meant that he agreed to cooperate with the Russia probe, and his sentencing was postponed, pending any testimony he might be called upon to provide in other cases. The fact that Mueller is ready for Papadopoulos to be sentenced could indicate that he is no longer needed for the investigation, or that the probe itself may be coming to a close in the near future. Other high-ranking members of the campaign downplayed Papadopoulos’ involvement with the team. Michael Caputo, another former adviser, famously dismissed him as a “coffee boy.” Coffee boy or not, he’s been reported to be the reason this probe started in the first place. The FBI began investigating after his boasted about the Russian dirt to an Austrailian diplomat, and the Aussies told the Americans about this, according to a New York Times report. The president and his allies have repeatedly called the investigation a politically motivated “witch hunt.” After it was reported that the FBI had an informant make contact with Papadopolous and other campaign advisers in the Russia probe, Trump accused the feds of spying on his campaign for political purposes.

Trump cancels Singapore nuclear summit with North Korean leader Kim Jong Un

A man watches a television news showing North Korean leader Kim Jong Un (R) and US President Donald Trump (L), at a railway station in Seoul on May 24, 2018.
North Korea summit called off in letter from Trump to Kim Jong Un 1 Hour Ago | 07:17

President Donald Trump canceled his historic nuclear summit with Kim Jong Un on Thursday, accusing North Korea of “tremendous anger and open hostility.” The meeting, which would have marked the first face-to-face encounter between a sitting U.S. president and a North Korean leader, was set for June 12 in Singapore.

“Sadly, based on the tremendous anger and open hostility displayed in your most recent statement, I feel it is inappropriate, at this time, to have this long-planned meeting,” Trump wrote in a letter to Kim, which was released Thursday morning.

Much of the letter was written in seemingly friendly terms, including praise for North Korea’s recent release of three American prisoners. In contrast, Trump also appeared to issue a threat that conjured memories of his war of words with Kim last year.

“You talk about your nuclear capabilities, but ours are so massive and powerful that I pray to God they will never have to be used,” Trump wrote. The cancellation appeared to take South Korea’s government by surprise. The nation’s president, Moon Jae-in, had played a pivotal role in setting up recent diplomatic developments. “The art of diplomacy is a lot harder than the art of the deal. The reality is, is that it’s pretty amazing that the administration might be shocked that North Korea is acting as North Korea might very well normally act,” Sen. Bob Menendez, D-N.J., said in a hearing involving Secretary of State Mike Pompeo.

Trump lawyer ‘paid by Ukraine’ to arrange White House talks

Image copyright Getty Images Image caption Ukrainian leader Petro Poroshenko (left) meets US President Donald Trump at the White House in June 2017

Donald Trump’s personal lawyer, Michael Cohen, received a secret payment of at least $400,000 (£300,000) to fix talks between the Ukrainian president and President Trump, according to sources in Kiev close to those involved. The payment was arranged by intermediaries acting for Ukraine’s leader, Petro Poroshenko, the sources said, though Mr Cohen was not registered as a representative of Ukraine as required by US law. Mr Cohen denies the allegation. The meeting at the White House was last June. Shortly after the Ukrainian president returned home, his country’s anti-corruption agency stopped its investigation into Trump’s former campaign manager, Paul Manafort. A high-ranking Ukrainian intelligence officer in Mr Poroshenko’s administration described what happened before the visit to the White House. Mr Cohen was brought in, he said, because Ukraine’s registered lobbyists and embassy in Washington DC could get Mr Poroshenko little more than a brief photo-op with Mr Trump. Mr Poroshenko needed something that could be portrayed as “talks”. This senior official’s account is as follows – Mr Poroshenko decided to establish a back channel to Mr Trump. The task was given to a former aide, who asked a loyal Ukrainian MP for help. He in turn used personal contacts in a Jewish charity in New York state, Chabad of Port Washington. This eventually led to Michael Cohen, the president’s lawyer and trusted fixer. Mr Cohen was paid $400,000. A second source in Kiev gave the same details, except that the total paid to Mr Cohen was $600,000. There was also support for the account from a lawyer in the US who has uncovered details of Mr Cohen’s finances, Michael Avenatti. He represents a porn actress, Stormy Daniels, in legal action against President Trump. Avenatti said that Suspicious Activity Reports filed by Mr Cohen’s bank to the US Treasury showed he had received money from “Ukrainian interests”. As well as Mr Cohen, the two Ukrainians said to have opened the backchannel for their president also denied the story. The senior intelligence official in Kiev said Mr Cohen had been helped by Felix Sater, a convicted former mobster who was once Trump’s business partner. Mr Sater’s lawyer, too, denied the allegations. The Ukrainian president’s office refused to comment.

33 House Democrats just teamed up with Republicans to weaken bank regulations

Under the bill, there would be fewer than 10 large banks with strict federal oversight.

Thirty-three Democrats joined a majority of Republicans in the House to pass a bill Tuesday that would weaken some of the banking regulations put in place after the 2008 financial crisis. The measure will now head to President Donald Trump’s desk, and he is expected to sign it before Memorial Day, CNN reported. A little more than a week after Trump assumed office, he said he wanted to “do a big number” on the regulations in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. He called the law a “disaster” and said it was “virtually impossible” for smaller businesses to get loans. But banks of all sizes have been doing pretty well, it turns out. Fourth-quarter profits for community banks increased 17 percent from a year earlier, when not considering the short-term tax hit, according to the FDIC. The Roosevelt Institute found profit for FDIC-insured banks, including community banks, has been following an upward trajectory for some time. Although much of Dodd-Frank’s regulations will remain in place, the passage of the bill means there would be fewer than 10 large banks that have more rigorous oversight by the Federal Reserve. The bill would change the definition of “systemically important financial institution” to only require banks with $250 billion or more in assets to undergo regular stress tests to make sure they can handle a financial crisis, instead of requiring banks with $50 billion or more in assets to do so. Financial institutions would not have to have plans to safely dismantle their institutions if they fail or hold as much capital to cover their losses. The measure would also water down the Volcker Rule, which stopped banks from making risky bets with customers’ money. Now, community banks with less than $10 billion in assets no longer have to comply. Banks hate the rule and many Republicans would prefer to get rid of the Volcker rule altogether, rather than soften it, as they proposed to do with the Financial Choice Act, which the House voted for last year. In addition to these changes, mortgage lenders would enjoy loosened regulations. Institutions with up to $10 billion in assets would not be obligated to follow the strictest federal underwriting requirements for qualified mortgages. There would be some conditions in place as a safeguard, however, such as assessing borrowers financial health and ensuring that loans are not interest-only. There are also measures affecting students’ private loans so that lenders can’t declare a student loan is in default when the person dies or declares bankruptcy. One provision that civil rights groups, including the NAACP and the Leadership Conference on Civil and Human Rights, opposed, would excuse the majority of banks from adhering to anti-discrimination reporting requirements. The bill would give big banks such as JPMorgan and Citigroup changes they’ve wanted for years, by changing how municipal debt can be classified. Custody banks, including State Street Corp. and Bank of New York Mellon Corp. that safeguard assets, would probably see their capital requirements eased. Bloomberg reported that BlackRock, the world’s largest asset manager, got one of the revisions they lobbied for, which gets rid of a part of the Volcker Rule that doesn’t allow hedge funds to share names with affiliated banks. In March, Sen. Elizabeth Warren (D-MA) criticized Democrats who threw their support behind the bill sponsored by Sen. Mike Crapo (R-ID), rankling some of her fellow Democrats. Virginia Democratic Sens. Tim Kaine and Mark Warner, as well as Claire McCaskill (D-MO) and Heidi Heitkamp (D-ND), were among some of the Senate Democrats who voted for the bill.

“I don’t understand how anybody in the United States Senate votes for a bill that’s going to increase the likelihood of taxpayer bailouts,” Warren said on Meet The Press in March.

Heitkamp responded to the criticism by telling radio host Hugh Hewitt, “She has her perspective and her point of view, but the truth will prevail. We’re going to spend a lot of time correcting the myths, correcting the misstatements about this bill.”

Weekly mortgage refinances drop to an 18-year low as rates jump

A Bank of America branch in New York City.
Carlo Allegri | Reuters A Bank of America branch in New York City.

A sharp rise in interest rates last week meant far fewer homeowners could benefit from a mortgage refinance. That was the primary driver behind a 2.6 percent drop in total mortgage application volume last week, according to the Mortgage Bankers Association’s seasonally adjusted report. Volume was 10.5 percent lower than a year ago.

Refinance volume has been falling for the past month as rates rise, dipping another 4 percent last week to the lowest level since December 2000.

Refinances are 27 percent lower than a year ago and now make up just under 36 percent of mortgage application volume. Most borrowers who were able to qualify, refinanced during the last five years, as rates stalled near record lows. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since April 2011, 4.86 percent, from 4.77 percent. Points increased to 0.52 from 0.50 (including the origination fee) for 80 percent loan-to-value ratio loans. Mortgage rates follow loosely the yield on the 10-year Treasury. “Treasury rates increased 10 basis points last week, driven largely by favorable news on retail sales data and industrial production in April, which more than offset data showing still-slow new residential construction,” said Joel Kan, an MBA economist. Mortgage applications to purchase a home also fell, down 2 percent for the week. “Purchase applications decreased over the week while the average loan amount for purchase loans increased to over $320,000 after averaging around $317,000 for the past four weeks, likely a sign that inventory for lower-priced homes remains low and the mix is still skewed toward larger loan balances,” Kan said.

The share of borrowers applying for adjustable-rate mortgages also rose. ARMs offer lower interest rates than fixed-rate mortgages and are therefore more popular when prices rise and it becomes harder to afford a home. IAfter the latest jump, however, it is clear that the market is solidly in a rising rate mode, and lenders are therefore less likely to lower rates on small moves in the bond market.

Michael Cohen’s business partner, Evgeny Freidman, agrees to cooperate as part of plea deal: NYT

Michael Cohen
Lucas Jackson | Reuters Evgeny Freidman, a business partner of President Donald Trump’s lawyer Michael Cohen has agreed to cooperate with prosecutors, The New York Times reported Tuesday.

That cooperation by the “Taxi King” Freidman could spell very bad news for Cohen, who is the subject of an ongoing criminal investigation by federal prosecutors in New York City. The Times suggested that Freidman’s cooperation “could be used as leverage to pressure Cohen to work with the special counsel,” Robert Mueller, “examining Russian interference in the 2016 presidential election.” Freidman, 46, pleaded guilty Tuesday to evading taxes in court in Albany County. He agreed to pay restitution and judgments totaling $5 million to New York State, according to New York Attorney General Barbara Underwood.

Missing documents prompted leak of Trump lawyer Michael Cohen's bank records: Report
Missing documents reportedly prompted leak of Michael Cohen’s bank records

Freidman has managed taxi cabs for Cohen for years. At one point, Friedman was one of the largest operators of taxi medallions in New York City. CNN reported last month that prosecutors are interested in Cohen’s financial dealings with a husband and wife who own a large tax business in Chicago.

Freidman was arrested last June on charges that he and another business partner stole more than $5 million in state surcharges that are imposed on taxi rides in New York City. But the amount of taxes he pleaded guilty to evading was much less than that, just $50,000. The criminal investigation of Cohen in New York, which was referred by Mueller to prosecutors there, is focused on his business dealings, as well as on a $130,000 payment he made to porn star Stormy Daniels on the eve of the 2016 presidential election. Cohen has not been charged by prosecutors. However, his office, home and a hotel room where he had been staying were raided last month by FBI agents. After that raid, he and lawyers for Trump and the Trump organization have raised concerns in federal court in Manhattan that material seized in the raids that might be subject to attorney-client privilege protections might be improperly seen by the prosecutors investigating him. On Tuesday, Daniels’ lawyer, Michael Avenatti, in a letter to Wood said he suspects that audio recordings relating to Daniels are being leaked to media outlets by Cohen or Cohen’s own legal team. Avenatti also requested that she ask Cohen’s lawyers about these leaks at a hearing scheduled for Thursday.

Venezuela expels U.S. envoy in response to sanctions

Venezuela’s re-elected President Nicolas Maduro greets his supporters as he leaves after receiving a certificate confirming him as winner of Sunday’s election at the National Electoral Council (CNE) in Caracas, Venezuela May 22, 2018. REUTERS/Carlos Garcia Rawlins

CARACAS (Reuters) – President Nicolas Maduro on Tuesday ordered the expulsion of the top U.S. diplomat in Venezuela in retaliation for a new round of sanctions over Venezuela’s widely-condemned election.The United States was among a string of countries that did not recognise Sunday’s vote. The 55-year-old successor to Hugo Chavez won re-election easily, but critics said the vote was riddled with irregularities, from the barring of two popular opposition rivals to the offering of a government “prize” to voters. President Donald Trump responded with an executive order limiting Venezuela’s ability to sell state assets, heightening pressure on the cash-strapped government. Accusing U.S. charge d’affaires Todd Robinson of being involved in “a military conspiracy,” Maduro ordered him and another senior diplomat, Brian Naranjo, to leave within 48 hours. “Neither with conspiracies nor with sanctions will you hold Venezuela back,” Maduro said, at an event in downtown Caracas at the headquarters of the election board, which is run by government loyalists. Earlier on Tuesday, Venezuela’s foreign ministry called the sanctions “a crime against humanity.” Maduro’s socialist administration, which has long said a U.S.-led “economic war” is to blame for a deep crisis in the OPEC nation, said the new sanctions violated international law. “Venezuela once again condemns the systematic campaign of aggression and hostility by the U.S. regime to punish the Venezuelan people for exercising their right to vote,” the Foreign Ministry said in a statement. “These arbitrary and unilateral measures constitute a crime against humanity.”  Beijing said on Tuesday it believed the United States and Venezuela should resolve their differences via talks, while Moscow said it would not comply with the sanctions.

Oil prices have been given a boost, but they could struggle to head higher

Oil will be in a $55 to $75 per barrel range on a 12-month basis, said Manpreet Gill, head of FICC investment strategy at Standard Chartered Private Bank.
The 'basic demand-supply fundamentals' imply oil prices will dip

‘Basic demand-supply fundamentals’ imply oil prices will dip: Strategist   Oil prices have climbed in recent weeks, but whether that rise will continue for longer could be in doubt. “On a 12-month basis, which is the horizon we take, we think we’re more likely to be in sort of a $55 to $75 range, which is a little bit lower than where we are today,” Manpreet Gill, head of fixed income, currencies and commodities investment strategy at Standard Chartered Private Bank, told CNBC’s Sri Jegarajah.

“The reason for that is simply, when we look out beyond the next few months and really take that one-year view, we’re looking at the basic demand-supply fundamental. That’s what causes our bullish view all the way coming in over the past year or two. That’s what’s causing us to say, how much can this go if we start really looking beyond the next three months?” Gill said. Prices have risen recently amid concerns over the impact of potential U.S. sanctions on Venezuela’s oil exports following a disputed election which saw Venezuelan President Nicolas Maduro re-elected. Also, an executive order that prohibited U.S. citizens from participating in the sale of Venezuelan receivables linked to oil was signed by U.S. President Donald Trump on Monday, Reuters reported.

View of an oil refinery in the Maracaibo lake, on May 2, 2018 in Maracaibo, Venezuela.
Federico Parra | AFP | Getty Images View of an oil refinery in the Maracaibo lake, on May 2, 2018 in Maracaibo, Venezuela
“The question for us is how much more can this price move, in the sense of how much more bad news can we get?” Gill said. That was given how the demand-supply balance will begin to turn less supportive for oil in 2019, Gill said. “There [will be] much more supply relative to demand, so you’re not getting the same level of fundamental support,” he added. In recent weeks, markets have been focused on the effect of impending U.S. sanctions on Iranian oil exports, which the Trump administration has repeatedly threatened to do. Trump had announced that he was pulling U.S. out of the Iran nuclear deal earlier this month. More broadly, prices have firmed amid ongoing oil production cuts led by the Organization of Petroleum Exporting Countries.

US hikes tariffs on Chinese steel exported via Vietnam

A worker cuts a steel coil at the Novolipetsk Steel PAO steel mill in Farrell, Pennsylvania, March 9, 2018.
Aaron Josefczyk | Reuters A worker cuts a steel coil at the Novolipetsk Steel PAO steel mill in Farrell, Pennsylvania, March 9, 2018.

The United States has raised tariffs on steel from Vietnam that Washington says originated in China and evaded anti-dumping duties on Chinese steel. The announcement following this week’s truce in a broader trade dispute between Beijing and Washington reflects the wide array of strains in the world’s biggest trading relationship. Importers of corrosion-resistant and cold-rolled flat steel from Vietnam will be required to post deposits to pay possible duties of 39 to 256 percent, the Commerce Department said Monday. U.S. steel producers complained imports of Chinese-made steel through other countries soared after Washington imposed anti-dumping charges in 2015 to offset what it said were improper subsidies by Beijing.

Imports of cold-rolled steel from Vietnam rose from $9 million to $215 million, the Commerce Department said. It said imports of corrosion-resistant steel from Vietnam rose from $2 million to $80 million.

Products affected by the latest tariffs were made in Vietnam using Chinese steel. The Commerce Department said that triggers the same anti-dumping penalties as steel imported directly from China.

North Korea summit: Pence warns Kim Jong-un not to ‘play’ Trump

Image copyright Getty Images Image caption Mike Pence made the comments in a Fox News interview broadcast on Monday night

US Vice-President Mike Pence has warned North Korea’s Kim Jong-un not to “play” President Donald Trump if they meet next month. Mr Pence said in a Fox News interview that such a move would be a “great mistake” by the North Korean leader. Mr Pence also said there was “no question” that Mr Trump could walk away from the 12 June summit. North Korea has threatened to pull out of the meeting after comments by US National Security Adviser John Bolton. The country reacted furiously when Mr Bolton suggested it would follow a “Libya model” of denuclearisation. Libya’s former leader Muammar Gaddafi agreed with Western powers in 2003 to dismantle his programme in return for the lifting of sanctions. Eight years later he was killed at the hands of Western-backed rebels. North Korea is also angry at current US-South Korea military drills and has halted talks with the South in response. South Korean President Moon Jae-in plans to meet Mr Trump in Washington on Tuesday to discuss plans for the summit. Mr Pence said that Mr Trump would be willing to walk away from the planned Singapore meeting. “I don’t think President Trump is thinking about public relations, he’s thinking about peace,” the vice-president said. The New York Times reported on Sunday that the US president is asking aides and advisers whether he should continue to go forward with the summit.Meanwhile, a group of journalists from the UK, US, Russia and China has flown in to North Korea from Beijing to cover the ceremony marking the dismantling of the country’s nuclear test site later this week. The exact timing for the ceremony at the Punggye-ri site has yet to be announced. After the latest nuclear test there in September, Chinese researchers reported a massive collapse which could threaten the stability of the surrounding mountains. Only media are attending the ceremony, not expert monitors, and the invitation to South Korean reporters was withdrawn amid the ongoing spat over the military drills.

Donald Trump says US reconsidering ZTE penalties as ‘favour’ to Xi Jinping

Trump said he would ‘envision’ a revised penalty for the company, including a requirement that it appoint a new board of directors and a ‘very large fine’ of perhaps US$1.3 billion

President Donald Trump said his administration is reconsidering penalties on Chinese telecommunications maker ZTE Corp. as a personal favour to the country’s president, Xi Jinping and may fine the company more than US$1 billion. “The president asked me to look into that,” Trump told reporters at the White House on Tuesday. Asked about the company, he said there is no deal yet with China – but it was not clear whether he was speaking specifically about ZTE or about broader trade disputes. “You’re really hurting American companies also” by shutting down ZTE and the review is “a favour” to Xi, Trump said. He said he would “envision” a revised penalty for the company including a requirement that it appoint a new board of directors and a “very large fine” of perhaps US$1.3 billion. US Treasury Secretary Steven Mnuchin said earlier that the US did not mean to “put ZTE out of business” by penalising the company for violating US sanctions against Iran and North Korea. The US Commerce Department’s review of penalties against ZTE Corp. for the violations will bear in mind any threats to American security, Mnuchin said Tuesday during a hearing before a Senate Appropriations subcommittee in Washington. “Anything that they consider will take into account the very important national security issues, and those will be addressed,” he said. The US ban on ZTE for breaching terms of a settlement over sanction-breaking sales to Iran and North Korea has become entwined in the trade dispute between the US and China.The countries announced at least a temporary trade truce and dropped their tariff threats on Saturday after setting up a framework for addressing trade imbalances. US Commerce Secretary Wilbur Ross called the company’s behaviour “egregious” when he announced the action April 16. Four amendments concerning ZTE have been proposed to a Defense Department bill in the House and may be granted votes this week. The Shenzhen, China-based company depends on US components, such as chips from Qualcomm Inc., to build its smartphones and networking gear. ZTE suspended all major operations because of the ban and is relying on its cash reserves for daily expenses, including salaries of its 75,000 employees. Senate Democratic Leader Chuck Schumer on Tuesday castigated the Trump administration’s plan to review penalties on ZTE, saying on the Senate floor that the action signals to China that “they can roll over us on issue after issue.” He added that on Friday he spoke directly to Trump for half an hour about the matter, and also to other administration officials. “The president and Secretary Mnuchin, what they are doing sends a dangerous signal to businesses around the world that the United States is willing to forgive sanction violations or reduce penalties,” Schumer said. “It emboldens foreign companies to play fast and loose with US sanctions when we should be putting the fear of God into these companies, especially one that was as brazen as ZTE.” China has frequently argued that the trade imbalance can be fixed by the US lifting strict export curbs on high-technology goods. One of China’s trade demands in talks with the US this month included removing a ban on selling integrated circuits to the Asian nation. “Export control items are absolutely not on the table for discussions,” said Mnuchin. “We would in no way look to loosen that.”

China says it will cut tariffs on some auto parts and vehicles

Getty Images China’s Finance Ministry said that it will cut import tariffs on some vehicles to 15 percent, down from as much as 25 percent.

The announcement, which came Tuesday, also said that tariffs on automotive parts would fall to 6 percent. The cuts will be effective from July 1. The move signifies an attempt to open up the Chinese market to international players. Discussion of a potential automotive sector tariff cut surfaced in April, and was mentioned in a speech by Chinese President Xi Jinping that month. According to the Finance Ministry, the average tax on qualifying vehicles will now be 13.8 percent. The European automotive sector was trading up just over 0.7 percent Tuesday morning, with German parts maker Schaeffler leading the way.

U.S. lawmakers say they will try to block possible ZTE deal with China

FILE PHOTO – Visitors pass in front of the Chinese telecoms equipment group ZTE Corp booth at the Mobile World Congress in Barcelona, Spain, February 26, 2018. REUTERS/Yves Herman/File Picture

WASHINGTON (Reuters) – U.S. lawmakers said on Tuesday they would try to stop President Donald Trump from easing penalties on Chinese telecommunications company ZTE Corp, saying the United States should not bow to pressure from Beijing to help the troubled firm as part of a possible trade deal. The reaction from Capitol Hill could complicate the Trump administration’s efforts to narrow a $335 billion annual trade gap with China, as Republicans and Democrats accused the president of bending to pressure from Beijing to ease up on a company that has admitted to violating sanctions on Iran. “The proposed solution is like a wet noodle,” said Senate Democratic Leader Chuck Schumer. Schumer accused Trump of putting national security at risk for minor trade concessions and said possible remedies floated by the Trump administration, such as changes to the company’s board of directors, were inadequate. According to sources familiar with the discussions, the proposed deal would lift a seven-year ban that prevents U.S. chipmakers and other companies from selling components to ZTE, which makes smartphones and telecommunications networking gear. In return, China would eliminate tariffs on U.S. agriculture or agree to buy more farm products from the United States. The U.S. Commerce Department imposed the ban in April after it determined that ZTE had broken an agreement after it pleaded guilty to shipping U.S. goods and technology to Iran.

The ban has threatened the viability of China’s second-largest telecoms maker by cutting off access to companies that supply 25 to 30 percent of its components. Suppliers include some of the biggest U.S. tech companies, including Alphabet Inc’s Google, which licenses its Android operating system to ZTE, and chipmaker Qualcomm Inc.

ZTE last week said that it had suspended its main operations.

The U.S. Department of Defense has also stopped selling ZTE’s mobile phones and modems in stores on its military bases, citing potential security risks. U.S. Treasury Secretary Steven Mnuchin told lawmakers that the treatment of ZTE was not “a quid pro quo or anything else” related to trade and said national security concerns would be taken into consideration. “I can assure you that whatever changes or decisions that are made in Commerce will deal with the national security issues,” Mnuchin told a U.S. Senate appropriations subcommittee. Republican and Democratic lawmakers said they were looking at ways they could block any possible changes. “We will begin working on veto-proof congressional action,” Republican Senator Marco Rubio said on Twitter. Lawmakers are considering several possible options and aim to act “soon,” said Dick Durbin, the Senate’s No. 2 Democrat. The Republican-controlled House of Representatives is weighing several possible changes to a defense-policy bill that would also keep up the pressure on ZTE. One proposal would block the sale of ZTE products and those of another Chinese company, Huawei, until national security officials certify they are safe. Another proposal would require the director of national intelligence to consider the security implications of any changes to the ZTE ban, while a third would require reports on quid pro quo offers between the U.S. and Chinese governments over any possible plan. Shares of ZTE’s major U.S. suppliers, which would be able to restart sales to ZTE if the Commerce Department’s ban on U.S. exports is lifted, rose after the news overnight. Optical component makers Acacia Communications shares led the pack with a 4.6 percent rise, and shares of Oclaro Inc shares were up 1.7 percent. Acacia received 30 percent of its total revenue in 2017 from ZTE and Oclaro received 18 percent from ZTE. Additional reporting by Susan Heavey, Doina Chiacu and Diane Bartz; writing by Andy Sullivan; editing by Chris Sanders and Jonathan Oatis

Al Green: Democrats Will Impeach Trump if We Retake the House

‘Every member of the House is accorded the opportunity to bring up impeachment’ May 22, 2018

If Americans give the House of Representatives back to the Democratic Party this November, one of first things that will happen is the impeachment of President Trump, Rep. Al Green (D-Texas) said Tuesday. “There’s a good likelihood there will be articles of impeachment” brought against Trump, Rep. Green said. “Here is a point that I think is salient, and one that ought to be referenced. Every member of the House is accorded the opportunity to bring up impeachment. This is not something the Constitution has bestowed upon leadership. It’s something every member has the right and privilege of doing.” Rep. Green, who has been one of the most vocal proponents of impeaching Trump, made the comments during an appearance on CSPAN.

Here’s a transcript:

ECHEVARRIA: “If Democrats take back the House in November, what is the likelihood that Speaker Nancy Pelosi bring up an impeachment charge?”
GREEN: “I’ll let Speaker Pelosi address her actions. But here is a point that I think is salient and one that ought to be referenced. Every member of the House is accorded the opportunity to bring up impeachment. This is not something that the Constitution has bestowed upon leadership. It is something that every member has the right and privilege of doing. I am not sure that there will be members who are going to wait for someone else if that someone else, doesn’t matter who it is, is declining to do it. We can all do it. And I think there is a good likelihood there will be Articles of Impeachment.”
ECHEVARRIA: “Have you heard directly from the Minority Leader about these efforts of yours, specifically asking you to stop or hold back? Anything along that line?”
GREEN: “Well, I don’t think you have to ask me what I’ve heard. If you have read publications, it is intuitively obvious to perhaps even the most casual observer that she and I are in different places on this. I respect her position.”

‘World no longer accepts US deciding for them’, Iran’s Rouhani says

Iran’s President Hassan Rouhani dismissed threats made by US Secretary of State Mike Pompeo on Monday, saying the rest of the world no longer accepts Washington making decisions on their behalf.
© HO/Iranian Presidency/AFP | A handout picture provided by the Iranian presidency on May 8, 2018, shows President Hassan Rouhani standing near members of his government while giving a speech on Iranian TV in Tehran.

“Who are you to decide for Iran and the world?” Rouhani said in a statement carried by multiple Iranian news agencies. “The world today does not accept that the United States decides for the world. Countries have their independence,” he added. It was a pointed response to Pompeo’s speech earlier in the day, in which he threatened the “strongest sanctions in history” against Iran unless it capitulated to a series of 12 demands regarding its regional behaviour and missile programme. But Rouhani dismissed the administration of President Donald Trump as a “move 15 years backwards to the era of Bush junior and a repeat of the same statements as 2003”. “The era of such statements has evolved and the Iranian people have heard these statements hundreds of times, and no longer pays attention,” he added. European leaders have strongly condemned the US move to abandon the 2015 nuclear deal and reimpose sanctions, seeing it as undermining regional security and a direct attack on their economic interests. Russia and China two other parties to the agreement have also criticised the US move and vowed to maintain trade with Iran. “The world does not accept the logic by which a gentleman who was head of the spy service… decides for others,” said Rouhani, referring to Pompeo’s recent job as head of the CIA.

China says it will cut tariffs on some auto parts and vehicles


China’s Finance Ministry said that it will cut import tariffs on some vehicles to 15 percent, down from as much as 25 percent. The announcement, which came Tuesday, also said that tariffs on automotive parts would fall to 6 percent. The cuts will be effective from July 1. The move signifies an attempt to open up the Chinese market to international players. Discussion of a potential automotive sector tariff cut surfaced in April, and was mentioned in a speech by Chinese President Xi Jinping that month. According to the Finance Ministry, the average tax on qualifying vehicles will now be 13.8 percent. The European automotive sector was trading up just over 0.7 percent Tuesday morning, with German parts maker Schaeffler leading the way.

Trump on China: Barriers and tariffs to come down for first time

Trump on China: Barriers and tariffs to come down for first time
© Getty Images

President Trump on Monday said that barriers to trade with China will “come down,” adding that Beijing will buy agricultural products from American farmers as a result of trade talks. “On China, Barriers and Tariffs to come down for first time,” the president wrote on Twitter

“China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products – would be one of the best things to happen to our farmers in many years!” he said in a separate tweet.


U.S. officials have been participating in ongoing discussions about trade policies with their Chinese counterparts.  Treasury Secretary Steven Mnuchin said Sunday that the United States had put its threat to enact tariffs on Chinese imports “on hold” for the time being.  Trump railed against China and its trade practices when he was running for president, but has since stressed a positive relationship with President Xi Jinping. He recently sparked criticism for saying he wanted to help a Chinese telecommunications firm get “back into business” after the Commerce Department prohibited U.S. companies from selling to ZTE, claiming it violated U.S. sanctions.

Trump presses China to be ‘strong & tight’ on border with North Korea

Trump presses China to be ‘strong & tight’ on border with North Korea
© iStock
President Trump on Monday urged China to keep a “strong & tight” hold on its border with North Korea until a deal is reached with Pyongyang over its nuclear program.  “China must continue to be strong & tight on the Border of North Korea until a deal is made,” the president wrote on Twitter.

“The word is that recently the Border has become much more porous and more has been filtering in. I want this to happen, and North Korea to be VERY successful, but only after signing!”

The tweet comes ahead of Trump’s June 12 summit in Singapore, where he is slated to meet with North Korean leader Kim Jong Un. Trump previously tried to enlist China’s help in pressuring North Korea to come to the table for discussions. Kim, who met with South Korean President Moon Jae-in for the first time last month, has already met with Secretary of State Mike Pompeo. But Pyongyang last week suggested it could withdraw from the talks if the United States pursues “unilateral” nuclear disarmament from North Korea.

WSJ: Mueller Probe Now Looks Outside Russian Influence

Image: WSJ: Mueller Probe Now Looks Outside Russian Influence
Special Consel Robert Mueller (Andrew Burton/Getty Images) By Eric Mack

Special counsel Robert Mueller has expanded the investigation into Russian interference in the 2016 election with a subpoena on work of Israeli businessman Joel Zamel’s private consulting firms and reported ties to the United Arab Emirates, The Wall Street Journal reported Sunday. “This is much ado about nothing,” Zamel’s attorney Marc Mukasey told the Journal. “. . . [Zamel] offered nothing to the Trump campaign, received nothing from the Trump campaign, delivered nothing to the Trump campaign, and was not solicited by, or asked to do anything for, the Trump campaign.” The work of Zamel’s companies Wikistrat and the Psy Group are of interest to the special counsel, and the reports of the investigation expanding outside of Russian influence are likely the cause of President Donald Trump’s pointed tweets Sunday afternoon.

President Trump added a demand the Justice Department look into the “political purposes” of Trump campaign investigations and who might have directed the efforts from the Obama administration.

Wikistrat is characterized as a crowdsourced analysis firm, while the Psy Group is “a secretive private intelligence firm with the motto ‘shape reality,'” according to the Journal. Along with George Nader, an adviser to the UAE crown prince, and U.S. defense contractor Erik Prince, Zamel reportedly met with Donald Trump Jr. before the 2016 presidential election. After the election, Nader reportedly made a $2 million payment to Zamel, according to the WSJ report. “Prior to the 2016 election, Donald Trump Jr. recalls a meeting with Eric Prince [sic], George Nader, and another individual who may be Joel Zamel,” Donald Jr. attorney Alan Futerfas wrote in a statement, per the Journal. “They pitched Mr. Trump Jr. on a social media platform or marketing strategy . . . [Donald Jr.] was not interested and that was the end of it.”

Trump asking aides whether he should proceed with North Korea summit: report

President Trump has been asking his aides if he should move forward with the planned meeting with North Korean leader Kim Jong Un next month over fears that he could be politically embarrassed, The New York Times reported on Sunday. Trump was surprised and angered by a recent announcement from North Korea’s chief nuclear negotiator that North Korea would be unwilling to trade its nuclear weapons for economic aid, administration officials told the Times. On Saturday night, Trump called South Korean President Moon Jae-in to ask why North Korea’s public statements didn’t match the private assurances Kim had given Moon, the Times reported. The call took place three days before Moon and Trump are set to meet in Washington, D.C. Aides said they were concerned about the president’s understanding of North Korea’s nuclear program and what is needed to ensure denuclearization, the Times reported. Moon and Secretary of State Mike Pompeo have said Kim seemed highly knowledgeable about the details of the program.

According to the Times, aides are also concerned Trump signaled too strongly his willingness to meet with Kim and are afraid Kim, sensing Trump’s eagerness, might offer assurances with a short lifespan.

There is also more pressure on the president to come out of the summit with a strong deal following his decision to withdraw the U.S. from the Obama-era Iran nuclear deal. However, former aides told the Times that Trump has been resistant to receiving detailed briefings about the nuclear program. Last week, North Korea canceled a meeting with South Korea and warned they could cancel the summit meeting because of U.S. military drills. Until recently, administration officials had said they expected Kim to agree to denuclearization and a fast timetable for winding down the nuclear program, the Times reported.

Donald Trump ‘offered to ease ZTE sanctions to persuade China to help with North Korea summit’

An inside source said that ‘it doesn’t look like [North Korea] wants to denuclearise at all’ as US officials worry about June 12 Trump-Kim summit

The White House has been rattled by North Korea’s recent about-face in negotiations over its nuclear weapons programme, with US President Donald Trump calling South Korean President Moon Jae-in for his thoughts on the matter, an insider has revealed. Fearing that China has poisoned North Korean leader Kim Jong-un against him, Trump also attempted to extend an olive branch to President Xi Jinping by offering to ease sanctions on Chinese telecoms company ZTE, a second source said.  The moves come with just over three weeks to go before Trump is to meet Kim in Singapore on June 12 in a summit that Pyongyang has threatened to pull out of. Late on Saturday, Trump called Moon to ask why Pyongyang had shifted to a harder-line position, cancelling a meeting with South Korean officials and threatening to pull out of the June 12 talks, a senior US official with knowledge of the conversation said.

Ryanair CEO says some airlines will not ‘survive’ the winter due to elevated oil prices

Norwegian Air - and other airlines will go bust, says Ryanair CEO
Airlines could go bust due to higher oil prices, says Ryanair CEO
The chief of budget airline Ryanair said Monday he fully expects some of his European rivals to file for bankruptcy over the coming months. The Irish airline warned that elevated oil prices — and consequently fuel costs — would probably cause some of its regional peers to go bust in early 2019. A dramatic upswing in crude futures over the past 12 months has weighed on the industry, at a time when major airlines are being forced to adapt to a much more competitive marketplace. “Clearly $80 a barrel oil is going to bring casualties in Europe this winter,” Ryanair CEO Michael O’Leary told CNBC’s “Squawk Box Europe” Monday. “Oil is going to be a driver but I think it will be a driver of change to the competition landscape in Europe. Some of those airlines who couldn’t make money when oil was at $40 a barrel last year, I don’t think will survive this winter if oil remains up at these elevated levels,” he added. Brent crude futures traded near multi-year highs at $79.16 a barrel on Monday morning, up 0.8 percent, while WTI stood at $71.81 a barrel, 0.7 percent higher. The Irish airline reported a record annual profit Monday, despite concerns over a previous rostering mess-up that triggered a dispute with pilots. Yet, O’Leary said he was “pessimistic” over the company’s growth prospects in the near-term amid higher fuel costs and no fare growth. Europe’s largest low-cost carrier posted a record 1.45 billion euros ($1.7 billion) profit after tax in its financial year ending March 31. That constituted a 10 percent rise year-on-year, narrowly beating analyst expectations.
Ulrich Baumgarten | Getty Images

However, Ryanair said returns were likely to dip slightly over the coming financial year. The group forecast profit after tax of between 1.25 billion and 1.35 billion euros over the next 12 months, lower than analyst forecasts. The downbeat tone was in stark contrast to Europe’s second-biggest low-cost airline, easyJet, which said last week that it anticipated profits would rise more than 30 percent this year as it benefits from robust travel demand and the collapse of some smaller rivals.

Venezuela’s Maduro wins second term despite charges of sham election

Low turnout, as many opponents boycotted election
Reuters Electoral workers wait for voters Sunday at a polling station during the presidential election in Maracaibo, Venezuela.

CARACAS, Venezuela — President Nicolás Maduro won a second six-year term, extending the rule of his predecessor’s radical leftist movement, in an election the opposition boycotted and the U.S. and other countries said would prove to be a sham. Even before the ballots were counted, opposition candidate Henri Falcón cried foul, calling for a new vote this year. Despite an opposition boycott that translated into near-empty voting stations in parts of the country on Sunday, the state electoral board allied with Maduro said less than half of the electorate voted, with 5.8 million people casting ballots for the president as opposed to 1.8 million for his main challenger, Falcón, a leftist former governor and ex-soldier. Falcón had broken with other opposition leaders who called for a boycott. Maduro, a former bus driver who received his formative political training in Communist Cuba, has led the oil-rich country through its worst economic crisis in history. Venezuelans tell pollsters they are starving, hyperinflation is expected to hit 13,000%, the health-care system is collapsing, and as many as 5,000 people are fleeing the country daily. “I will carry out an economic revolution that will shake the entire world,” Maduro said at his closing campaign rally on Thursday. “I’ll do it whatever the cost, however long it takes. I will dedicate my life to changing the economy of the country.”

Robert Mueller’s Trump-Russia collusion probe will wrap up by September 1, says Rudy Giuliani

Giuliani said that the investigation is expected to end by September 1 to avoid affecting the US midterm elections

US President Donald Trump’s lawyer, Rudy Giuliani, has said that Robert Mueller’s investigation into whether Trump’s 2016 election campaign colluded with Russia will end by September 1. Giuliani told The New York Times on Sunday that the office of Robert Mueller – the special counsel who is leading the investigation – had shared the timeline some two weeks ago. Trump, who has repeatedly described the investigation as a “witch hunt,” views it as a stain on his presidency and wants it over – an end Giuliani apparently sought to further through his comments on the probe’s conclusion. “You don’t want another repeat of the 2016 election where you get contrary reports at the end and you don’t know how it affected the election,” he told the Times, referring to the investigation’s possible impact on midterm elections in November.

Former FBI director James Comey – fired by Trump last year – announced that the bureau would reopen an investigation into Hillary Clinton’s misuse of a private email server just 11 days before the 2016 presidential vote, a move that may have helped cost her the election. Trump’s former campaign chairman Paul Manafort, his first national security adviser, Michael Flynn, and an assortment of campaign aides have all been caught in Mueller’s investigation, variously pleading guilty, cutting a plea deal or fighting the case in court. But a year after the probe began, the big questions remain unanswered: Did Trump’s campaign collude with the Kremlin to skew the 2016 election? What did the president know and when did he know it? Did he obstruct justice?  Can a sitting president be indicted?

Mnuchin declares US-China trade war ‘on hold’ as talks progress

Treasury Secretary Steven Mnuchin (R) is seen as he and a U.S. delegation for trade talks with China arrive at a hotel in Beijing, China May 3, 2018.
Jason Lee | Reuters Treasury Secretary Steven Mnuchin (R) is seen as he and a U.S. delegation for trade talks with China arrive at a hotel in Beijing, China May 3, 2018.
The United States and China have agreed to drop their tariff threats on billions of dollars worth of each country’s goods while they work on a wider trade agreement, U.S. Treasury Secretary Steven Mnuchin said on Sunday. “We are putting the trade war on hold. Right now we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said in a television interview on “Fox News Sunday” in reference to the tentative measures on reducing the trade deficit that the two nations discussed this week. On Saturday, Beijing and Washington said they would keep talking about measures under which China would import more energy and agricultural commodities from the United States to close the $335 billion annual U.S. goods and services trade deficit with China. Nick Note: In other words no sanctions against China on steel and aluminum…. another bullshit deal up in smoke. its all about the headline and nothing more.

Roger Stone says Trump may not run in 2020, pledges to line up challenger to Pence-Haley ticket

101317 Correll Roger Stone intermediary pic
Roger Stone suggested President Trump may ultimately decide not to run for re-election (AP Photo/Andrew Harnik)

Longtime Trump confidant Roger Stone pledged to have someone lined up to challenge Vice President Mike Pence should he run for president in 2020. During an interview Friday with Big League Politics, a right-wing news website, Stone suggested that President Trump may not ultimately run for re-election if his first term is adequately successful and denounced the possibility of a 2020 ticket with Pence and U.S. Ambassador to the United Nations Nikki Haley. “I guarantee you I will have a candidate challenge Mike Pence,” said while speaking on the “Howley Reports” show.  Asked what he thinks about Haley, Stone grimaced and alleged that she “loves war” that isn’t in the interest of the U.S. On the prospect of a Pence-Haley ticket, Stone exclaimed, “Bring it on!” The New York Times recently reported that Trump has been alarmed by the rising diplomatic star of Haley and even grown suspicious of her political ambitions. “Republicans close to the White House whisper about the prospect of an alliance between Ms. Haley and Vice President Mike Pence,” the Times reported in April, pointing to a possible run as a ticket in 2020. Though Trump has already begun campaigning for re-election — he has already chosen a 2020 slogan: “Keep America Great!” — Stone cast doubt on it being a sure thing. “I don’t think that it is a foregone conclusion that the president will definitely run,” Stone said. “If at the end of the next three years the economy is very strong, he has built the wall, sealed our borders, he’s reformed our immigration policies, he has redone these trade agreements so that they are beneficial to the United States, that he has got a peace agreement in Korea — I could see him saying, ‘You know what? I don’t need this anymore. I made America great again. I have kept my promises to the American people. I’m heading off to the golf course.'”

U.S. Led Coalition Hits ISIS in Iraq, Syria With 66 Strikes in Past Week

A F-18 takes off from the deck of the USS Harry S. Truman; the carrier strike group has conducted air operations in support of Operation Inherent Resolve / Getty Image

The Department of Defense announced that a U.S.-led coalition completed 66 strikes against the Islamic State between May 11-17. Combined Joint Task Force Operation Inherent Resolve and its partners stuck ISIS caves, campsites, training camps, bomb factories, and other targets in Iraq during five of the past seven days. No strikes were carried out in Iraq on Sunday or Thursday.

In Syria – where despite the coalition’s progress, ISIS has been able to gain a foothold in parts of the country – strikes occurred every day of the week. Forces targeted and destroyed an ISIS command-and-control center, several vehicles, weapons storage facilities, supply routes, bomb factories, communications buildings, and several fighting positions.

The destruction of ISIS targets in Iraq and Syria limits the group’s ability to project terror and conduct external operations throughout the region and the rest of the world, task force officials noted. U.S. aircraft worked with the air assets of several other countries in the joint effort to “destroy ISIS in Iraq and Syria.” The strikes may also have been carried out by rocket-propelled artillery or ground-based tactical artillery. The coalition defines a strike as “one or more kinetic engagements that occur in roughly the same geographic location to produce a single or cumulative effect.”

For example, task force officials explained, a single aircraft delivering a single weapon against a lone ISIS vehicle is one strike, but so is multiple aircraft delivering dozens of weapons against a group of ISIS-held buildings and weapon systems in a compound, having the cumulative effect of making that facility harder or impossible to use. Strike assessments are based on initial reports and may be refined, officials said.

The task force does not report the number or type of aircraft employed in a strike, the number of munitions dropped in each strike, or the number of individual munition impact points against a target.

While officials have noted work still remains in the fight to destroy ISIS, the terrorist group has lost significant ground in Iraq and Syria. The push against ISIS has resulted in the restoration of freedom of religion and renewed construction in the region. As a result, there are “encouraging signs” life is returning to normal for civilians in Iraq and Syria, according to a JTF spokesman last month. Nick Note: Did i not hear President Bullshiiter announce US forces were pulling out. I guess his handlers decided otherwise……….Wonder how long he will last. Will it be an indictment, Impeachment, A heart attack in the middle of the night or something far more sinister?????

China agrees to import more from U.S., no sign of $200 billion figure

WASHINGTON (Reuters) – China has agreed to significantly increase its purchases of U.S. goods and services, the two countries said on Saturday, but made no mention of a $200 billion target the White House had touted earlier. Beijing and Washington agreed they would keep talking about measures under which China would import more energy and agricultural commodities from the United States to close the$335 billion annual U.S. goods and services trade deficit with China.

A joint statement issued at the conclusion of intensive trade talks in Washington did not indicate whether the two countries would delay or drop their tariff threats on billions of dollars worth of each country’s goods, which has sparked fears of a wider trade war and roiled financial markets.

“There was a consensus on taking effective measures to substantially reduce the United States’ trade deficit in goods with China,” the joint statement said. “To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services.” President Donald Trump has threatened to impose tariffs on up to $150 billion on Chinese goods to combat what his administration says is Beijing’s misappropriation of U.S. intellectual property through joint venture requirements and other policies that force technology transfers. Beijing denies such coercion and has threatened equal retaliation, including tariffs on some of its largest U.S. imports – among them aircraft, soybeans and autos. A report by China’s state-run Xinhua news agency described the statement from the two governments as “vowing not to launch a trade war against each other.” While the statement said the two sides would engage at high levels and “seek to resolve their economic and trade concerns in a proactive manner,” it made no mention of tariffs.It said there was consensus between Washington and Beijing on the need to create “favourable conditions to increase trade” in manufactured goods and services. This could be a reference to China’s previous pledges to open up more economic sectors to services.A commentary published by Xinhua on Sunday declared the statement a “good example of win-win”, noting that it would help America reduce its trade deficit by increasing exports to China and allow China to diversify and raise the quality of its imports. It also argued that China has always resisted any “unreasonable demands” by the United States, never compromising or accepting restrictive conditions.The commentary added that a resolution to the trade dispute will be complicated, difficult and take a long time.

Europe, China, Russia discussing new deal for Iran: newspaper


FILE PHOTO: A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005. REUTERS/Raheb Homavandi//File Photo

BERLIN (Reuters) – Diplomats from Europe, China and Russia are discussing a new accord to offer Iran financial aid to curb its ballistic missile development and meddling in the region, in the hope of salvaging its 2015 nuclear deal, a German newspaper reported on Sunday. The officials will meet in Vienna in the coming week under the leadership of senior European Union diplomat Helga Schmid to discuss next steps after the May 8 decision by U.S. President Donald Trump to pull out of a 2015 nuclear accord with Iran, the Welt am Sonntag newspaper said, citing senior EU sources. Germany, France, Britain, Russia and China would participate in the meeting, but the United States would not, it said. It was not immediately clear if Iran – which has resisted calls to curb its ballistic missile program in the past – would take part. Under the 2015 deal, Iran agreed to curb its nuclear program in return for the lifting of most Western sanctions. One of the main complaints of the Trump administration was that the accord did not cover Iran’s missile program or its support for armed groups in the Middle East which the West considers terrorists.

Concluding a new agreement that would maintain the nuclear provisions and curb ballistic missile development efforts and Tehran’s activities in the region could help convince Trump to lift sanctions against Iran, the paper said.

“We have to get away from the name ‘Vienna nuclear agreement’ and add in a few additional elements. Only that will convince President Trump to agree and lift sanctions again,” the paper quoted a senior EU diplomat as saying. The EU’s energy chief sought to reassure Iran on Saturday that the 28-member bloc remained committed to salvaging the nuclear deal, and strengthening trade with Tehran. Officials from the EU, Germany and other countries that remain committed to the deal have said it would disastrous if EU efforts fail to preserve it. Iran has struggled to achieve financial benefits from the deal, partly because remaining unilateral U.S. sanctions over its missile program deterred major Western investors from doing business with Tehran. The officials are looking for a new approach given an understanding that it would be difficult for European firms to work around new U.S. sanctions, the newspaper reported. It said the new deal could include billions of dollars of financial aid for Iran, in line with an EU deal that provided billions in aid to Turkey for taking in millions of migrants and closing its borders, which helped end a 2015 migrant crisis. Iran and European powers have made a good start in talks over how to salvage the 2015 deal but much depends on what happens in the next few weeks, Foreign Minister Mohammed Javad Zarif said last week.

Trump’s confrontational trade stance is just boomeranging back to imperil U.S.

Tension is just reinforcing macro flows that lead to wider U.S. trade deficit
Getty Images

President Donald Trump’s bellicose trade disputes are just exacerbating the macroeconomic forces that lead to a larger trade deficit, according to Beth Ann Bovino, U.S. chief economist at S&P Global Ratings Services. With the recent tax cut and rising budget deficit, the U.S. is relying more on foreign money flows to pay our bills. With the increased uncertainty from trade disputes, even more money will flow into the haven of U.S. assets. With so much money pouring in from overseas, the U.S. capital account is forced into surplus. And given that the capital account and current account must balance out, the U.S. inevitably runs a trade deficit, she said in a note to clients on Friday. Targeted tariffs might narrow a bilateral balance with China, but that won’t necessarily fix the boarder trade deficit, she said. A surge of foreign investors could cause an inverted yield curve as low-term Treasury rates push lower at the same time the Fed is raising rates at the short end. Some Fed officials are worried that an inverted yield curve is a precursor of a recession. So the Fed may have to slow its rate hikes, Bovino said. There is also the opposite risk — that the trade tensions upset U.S. relations with key partners just when the U.S. economy needs foreign capital to fund its spending spree. If demand from abroad for U.S Treasuries weakens just as our fiscal and trade deficits widen, the U.S. could see long-term interest rates jump and a tightening of credit conditions, thus slowing down the growth rate “or worse, cutting the U.S. expansion short,” she said.

Tesla needs to raise $10.5 billion in capital to keep going through 2020: Goldman Sachs

Goldman is sticking with a sell rating on Tesla shares as it expects the electric-car maker to struggle to meet production targets

Tesla Inc. will need about $10.5 billion in fresh capital through 2020 to keep operating and meet its own targets, Goldman Sachs analysts said Thursday. That’s the sum needed from external capital raises and debt refinancing for the electric-car maker to fund its current operations and finance new product spend and capacity additions, Goldman analysts led by David Tamberrino wrote in a Thursday note. Goldman is assuming that Tesla TSLA, -2.71%  will go ahead with a plan to launch a new vehicle manufacturing plant and gigafactory in China. “We believe this level of capital transactions may be funded through multiple avenues, including new bond issuance (secured and/or unsecured), convertible notes, and equity,” the analyst wrote. “We see several options available to the company to refinance maturing debt and raise incremental funds, which should allow Tesla to fund its growth targets.” Still, issuing more debt may weigh on the company’s credit profile, while issuing equity or convertibles would dilute the current shareholders, said the note. “Our preference is to express long views via the front-end convertible credit — and we continue to express a bearish view on the equity,” said Tamberrino. Tesla said in its most recent earnings that it does not intend to raise capital this year, and, on a controversial earnings call, Chief Executive Elon Musk said he does not “want” to raise capital. But numerous parties, including credit-rating agency Moody’s Investors Service, have said the company will inevitably need to tap the markets as it continues to struggle to meet production goals for its Model 3 mass-market sedan. Goldman said it is sticking with its sell rating on Tesla shares, as it expects the company to continue to be challenged by its manufacturing process and to be free-cash-flow negative through 2020. If Tesla hits its production targets with the Model 3, its mass-market vehicle, and it is able to “sustainably” produce 10,000 of the sedans a week in 2020 as well as move forward with its other expansion plans, its would still need about $5 billion in debt (refinancing and growth), the note said. Tesla’s high-yield bonds, the 5.300% notes that mature in 2025, were last quoted on Thursday at 87.125 cents on the dollar to yield 7.646%, according to MarketAxess, or at a yield spread of 456 basis points over Treasurys, 1 basis point wider on the day.

U.S. Wants to Restart Nuclear Talks With Iran, but Hasn’t Budged on Demands

Secretary of State Mike Pompeo this month at the State Department in Washington.CreditTom Brenner/The New York Times

WASHINGTON — Secretary of State Mike Pompeo will outline a new strategy on Monday for constraining Iran, centered around a demand that the United States’ European allies have already rejected: that Tehran enter negotiations in a new deal that would permanently ban Iran from any substantive manufacturing of nuclear fuel and, in turn, forever cut off a pathway to building a bomb. Mr. Pompeo is expected to call for broadening the number of countries engaging in the talks, perhaps hoping to pick up help from other nations, like Japan and Arab states, that were not involved in negotiating the 2015 deal with Iran that President Trump pulled out of about 10 days ago. But the negotiating strategy of the United States’ new chief diplomat is unlikely to be embraced by major

European powers, who opposed Mr. Trump’s move and are talking now about how to nullify the effects of threatened United States sanctions on European firms that do business with Iran.

The core of the opposition has been from the European Union, whose leader of the heads of government, Donald Tusk, issued a stinging Twitter post this week about Mr. Trump. “With friends like that who needs enemies,” Mr. Tusk tweeted. “We realise that if you need a helping hand, you will find one at the end of your arm.” But Mr. Pompeo has calculated that for all of Europe’s bluster, Mr. Trump’s sanctions threat — which would ban any company that does substantial business in Iran from doing business with the United States — will ultimately work. Total, the French oil giant, announced this week it is canceling planned contracts in Iran, and the top executives of other multinational companies have said, some publicly and others privately, that they have no choice. Iran is a relatively small customer, and the United States is its largest. Mr. Pompeo’s plan calls for a new negotiation that will embrace stronger and longer nuclear limitations, restrictions on missile tests and exports, and limits on Iranian activity to support terrorist groups or the government in Syria. Officials say they are also trying to figure out how to enforce limits — or sanctions — on Tehran’s cyberactivity, fearing that the Iranian response to the United States will come not in the nuclear arena, but in attacks on banks and financial institutions.

U.S. Imposes Sanctions on Venezuelans Ahead of Presidential Election

Diosdado Cabello, right, with President Nicolas Maduro of Venezuela. The United States imposed sanctions against Mr. Cabello on Friday.CreditMiraflores Palace, via Reuters

CARACAS, Venezuela — Just two days before presidential elections in Venezuela, the Trump administration on Friday announced sanctions against a powerful governing party politician, accusing him of drug trafficking, extortion, money laundering and embezzling government money. The Treasury Department’s Office of Foreign Assets Control in Washington said that it had placed the politician, Diosdado Cabello, a top Socialist Party figure, on a list of sanctioned individuals, freezing his assets in the United States and barring Americans from doing business with him. Mr. Cabello, 55, has long been considered the second-most powerful man in the country, after President Nicolás Maduro, who is running for re-election on Sunday. The Treasury Department said that it was also imposing sanctions on Mr. Cabello’s brother, José David Cabello, 49, who runs the government agency in charge of customs and taxation, and Diosdado Cabello’s wife, Marleny Josefina Contreras Hernández, 57, the minister of tourism. Also named in the announcement was Rafael Alfredo Sarria, 52, who the Treasury Department said acted as a frontman for Mr. Cabello, channeling illicit money through real estate and businesses in Florida. The timing of the announcement, so close to the Venezuelan election, could energize Mr. Maduro’s voting base. Mr. Maduro routinely accuses the United States of seeking to overthrow his government and says that Venezuela’s extreme economic problems — with a drastic contraction in economic production and the world’s highest inflation — are the result of an “economic war” being waged against the country by Washington. In the face of increasingly authoritarian actions by Mr. Maduro and his government, the United States has said that it will not recognize the election results. The Trump administration has been steadily adding to the number of Venezuelan government figures against whom sanctions have been imposed. Mr. Cabello, a former governor and legislator who was close to Mr. Maduro’s predecessor, Hugo Chávez, is seen as wielding significant power behind the scenes, but his star may have faded recently as Mr. Maduro seeks to diminish his potential rivals within the government and the Socialist Party. Mr. Maduro created a new party, called We Are Venezuela, to act as his main political vehicle ahead of the election, displacing the Socialist Party that Mr. Cabello largely controls. The Treasury Department released an unusually detailed statement about the sanctions, which read like a criminal indictment, although it did not say whether any indictments had been handed down for those named in Friday’s action. The statement accused Mr. Cabello of running drugs through the Dominican Republic to Europe and also through a Venezuelan airport — and it said that he split some of his drug profits with Mr. Maduro. It also accused Mr. Cabello of embezzling government money, smuggling minerals and laundering profits through Panama and Russia. The Treasury Department said that Mr. Cabello and his brother extorted money from companies doing business in Venezuela, by threatening them with large fines resulting from tax audits.

Mexico presidential frontrunner vows to hit back at Trump tweets

Leftist politician Andres Manuel Lopez Obrador is the front runner in Mexico's July 1 presidential election
Leftist politician Andres Manuel Lopez Obrador is the front runner in Mexico’s July 1 presidential election (AFP Photo/ALFREDO ESTRELLA)

Mexico City (AFP) – The fiery leftist leading the race for Mexican president, Andres Manuel Lopez Obrador, vowed Friday to hit back at US President Donald Trump if he insults Mexico on Twitter. “If he makes an offensive tweet, I’m going to take responsibility for answering him,” said Lopez Obrador, a former Mexico City mayor who has a double-digit lead in most opinion polls heading into the July 1 election.

“I think (Trump) is going to understand he has to get himself under control, that he can’t go around offending the Mexican people. We don’t want confrontations with him, but we are going to ask him to respect us,” he said at a campaign rally in the town of Huajuapan, in the southern state of Oaxaca.

Trump has regularly attacked Mexico on Twitter since launching his presidential campaign in 2015 by referring to Mexican immigrants as criminals and rapists, and vowing to build a wall on the border. Mexico’s current President Enrique Pena Nieto has rarely answered his counterpart’s Twitter outbursts, and his foreign ministry regularly insists Mexico will not discuss diplomatic matters on social media. Lopez Obrador promised a change in strategy if he wins the election. The candidate, who is making his third bid at the presidency, is only an occasional tweeter — though he has increased his use of social media during his campaign. In April he tweeted to the US president that he wanted to sell him Mexico’s presidential plane, a plush Boeing Dreamliner purchased by the previous government of which he is fond of saying, “Not even Trump has a plane like that!” Lopez Obrador, widely known by his initials, “AMLO,” is a divisive figure in Mexico. But he has ridden discontent with Pena Nieto’s government to a firm lead over the second-place candidate, Ricardo Anaya of the conservative National Action Party (PAN), and ruling-party candidate Jose Antonio Meade, a distant third.

Maduro seeks second term in isolated, ruined Venezuela

Caracas (AFP) – Shrugging aside his country’s economic ruin and growing international isolation, Venezuela’s socialist President Nicolas Maduro seeks a second six-year term in controversial elections Sunday that are being boycotted by the opposition.

The US moved to further isolate his government on Friday, just two days before the polls, by slapping sanctions on Maduro’s powerful deputy and socialist party leader Diosdado Cabello.

“We are imposing costs on figures like Diosdado Cabello who exploit their official positions to engage in narcotics trafficking, money laundering, embezzlement of state funds, and other corrupt activities,” said US Treasury Secretary Steven Mnuchin. It was a fresh blow to Maduro, whose ebullient campaign meetings have done little to disguise a lack of enthusiasm in the oil-rich but cash-poor South American country, where the result is widely seen as a foregone conclusion. He held his final rally on Bolivar Avenue in downtown Caracas on Thursday, enlisting former Argentine soccer star Diego Maradona to fire-up the crowd. Applauded by Maduro and his supporters, Maradona declared himself a Maduro “soldier,” waved a Venezuelan flag and punched the air as he danced to loud reggaeton music on the stage. “Trust me, if you give me your vote and give us victory, I swear I will lead great economic changes and drive an economic revolution that will shake the world,” pledged Maduro.

The 55-year-old former bus driver wore a green shirt with the image of his late predecessor, Hugo Chavez, emblazoned on the sleeve.

Maduro is the clear favorite, despite trailing in opinion polls to his main rival Henri Falcon, and a low approval rating among Venezuelans fed up with hyperinflation, food and medicine shortages, rising crime and broken water, power and transportation networks. Opinion polls show Falcon leading with 30 percent of voter intentions, compared to Maduro’s 20 percent. An evangelical candidate, Javier Bertucci, has 14 percent. However, “low enthusiasm will likely reduce voter turnout and enable Maduro to control the outcome without major social backlash,” said analyst Risa Grais-Targow of Eurasia Group. But despite Maduro’s rhetoric and the world’s largest oil reserves, the country faces ruin, with the IMF citing a drop of 45.0 percent in GDP since Maduro took over in 2013. The crippled oil industry lacks investment and its assets are increasingly prey to debt settlements as the country defaults. And worse, the US threatens an oil embargo on top of sanctions that have hit Venezuela’s efforts to renegotiate its debt. “The most likely scenario is greater international isolation and economic deterioration,” said Diego Moya-Ocampos of IHS Markit analysts. “The key factors will be the economy and the army,” said analyst Michael Shifter. “The country is a powder keg and something could provoke unrest that would be difficult to contain.”

Trump urged Postal Service to double package rates for Amazon: Washington Post

 FILE PHOTO: The logo of Amazon is pictured inside the company’s office in Bengaluru, India, April 20, 2018. Picture taken April 20, 2018

WASHINGTON (Reuters) – President Donald Trump has personally pushed the postmaster general to double the rates the U.S. Postal Service charges Amazon.com and other companies to ship packages, the Washington Post reported on Friday, citing three unnamed sources.Postmaster General Megan Brennan resisted Trump’s suggestion in private conversations in 2017 and 2018, telling him that package delivery rates are set by contract and reviewed by an independent commission, and that the arrangements have helped the financially challenged Postal Service, the sources told the newspaper. Trump has claimed without evidence that deliveries for Amazon were costing the service money. The White House did not immediately respond to a request for comment and a spokesperson for the Postal Service could not be immediately reached.

Chipmaker stocks slammed by Applied Materials outlook

Applied Materials/Digiman Studio

Applied Materials Inc. led semiconductor-related stocks lower Friday as the chipmaker materials supplier’s outlook indicated a possible slowing in the recently hot sector. Applied Materials AMAT, -7.32%  shares fell 7.8% to $49.78, after hitting an intraday low of $48.53, as analysts were split on target price moves after the company’s sales outlook was lighter than Wall Street expected. In comparison, the PHLX Semiconductor Index SOX, -1.01%  is down 1.1% and the S&P 500 Index is down 0.3%. Shares of Applied Materials are down 2.3% for the year, compared with a 7.8% gain in the SOX index and a 1.5% gain in the S&P 500. For the week, Applied Materials shares are down 9%, the SOX index is flat, and the S&P 500 SPX, -0.20%  is down 0.5%. Late Thursday, Applied Materials estimated adjusted earnings of $1.13 to $1.21 a share for its fiscal third quarter on revenue of $4.33 billion to $4.53 billion, while analysts surveyed by FactSet had expected earnings of $1.16 a share on revenue of $4.53 billion. Of the 27 analysts that cover Applied Materials, 21 have overweight or buy ratings and six have hold ratings, according to FactSet data. Following earnings, 17 analysts commented on the stock with six lowering their price targets and three raising them. Instinet analyst Romit Shah, who has a buy rating, lowered his price target to $65 from $70 based on Applied Materials’s expected decline in OLED display revenue in fiscal 2019, while Stifel analyst Patrick Ho, who also has a buy rating, raised his price target to $75 from $70 even as the stock tanked. Ho said “the company’s makeup and profile is what differentiates Applied from all of its peers” and that any potential pullback represented a buying opportunity. Applied Materials’s light guidance comes on the heels of strong results from other chipmakers like Nvidia Corp. NVDA, -0.34%  and Intel Corp. INTC, -1.87%  this earnings season. Other notable decliners on Friday included Entegris Inc. ENTG, -6.38% KLA-Tencor Corp. KLAC, -2.83% Lam Research Corp. LRCX, -3.55% and Micron Technology Inc. MU, -2.36%   “The overall PC market sales are turning weaker than expected in the traditional low season of the second quarter of 2018 despite stable gaming and business PC demand, due mainly to sluggish buying sentiment for consumer PCs and the abrupt waning in demand for crypto mining devices starting in April,” said Oppenheimer analyst Rick Schafer in a note. Not all chipmakers were down Friday, however, a few outliers traded higher.

Trump offers ‘protections’ if Kim surrenders nukes

President Trump  sought to reassure North Korean leader Kim Jong Un after Kim’s government threatened to pull out of the upcoming nuclear summit with the United States. Speaking to reporters at the White House, Trump said he is “willing to do a lot” to offer Kim “protections” if the North Korean leader agrees to surrender his nuclear weapons.

“He will get protections that are very strong,” Trump said during an Oval Office meeting with NATO’s secretary-general. “The best thing he could do is make a deal.”

Trump’s comments show he is eager to address North Korea’s concerns so the summit can take place.  Nuclear diplomacy with Pyongyang is the president’s top foreign policy priority, so it would be major blow to Trump if the talks with Kim fell through. The president said preparations for the meeting are moving ahead “as if nothing happened,” adding the U.S. has not heard official word from the North Koreans about any intention to pull out.  “Our people are literally dealing with them right now in terms of making arrangements, so that’s a lot different than what you read, but oftentimes what you read, if it’s not fake news, is true,” he said. North Korea threw the June 12 summit into doubt on Wednesday when it said it may not show up if the U.S. continues to demand “unilateral” nuclear disarmament.  Kim has been reluctant to denuclearize because he believes his arsenal is critical to his ability to maintain power. North Korean officials blasted national security adviser John Bolton this week for saying the U.S. is seeking a “Libya model” with North Korea.

Libyan leader Moammar Gadhafi was forced from power in 2011 with the help of NATO forces just eight years after striking a deal with the U.S. to give up his nuclear weapons. He was captured and killed that same year.

Trump said the agreement he is seeking with North Korea is not like the one the Bush administration made with Gadhafi in 2003, comments that are at odds with Bolton. Under the Libyan deal, Gadhafi surrendered his nuclear and chemical weapons stockpiles in exchange for sanctions relief.  “The Libyan model isn’t a model that we have at all when we are thinking of North Korea,” Trump said. “In Libya we decimated that country. That country was decimated. There was no deal to keep Gadhafi. The Libyan model that was mentioned was a much different deal.” Trump indicated nuclear-related sanctions would remain in full effect if the talks with North Korea fall through, but said that a deal would allow Kim to continue “running his country” and allow it to become “very rich.”

They’re out to FRAME me says Trump

Trump claims  ‘at least one FBI representative’ spying on him in 2016 but Giuliani admits ‘we don’t know’ if it’s true
Trump's lawyer, Rudy Giuliani, said on CNN that there's no evidence the FBI or Justice Department planted a mole in Trumpworld surign the 2016 race
Trump’s lawyer, Rudy Giuliani, said on CNN that there’s no evidence the FBI or Justice Department planted a mole in Trumps world durign the 2016 race

President Donald Trump on Friday poured gasoline on an already roaring political bonfire, suggesting he believes the FBI planted ‘at least one’ spy in his campaign in order to derail his White Houe aspirations by ginning up a phony reason to criminally investigate him.  ‘Reports are there was indeed at least one FBI representative implanted, for political purposes, into my campaign for president,’ Trump tweeted. ‘It took place very early on, and long before the phony Russia Hoax became a “hot” Fake News story. If true – all time biggest political scandal!’ The president raised the ante after his attorney, former New York City Mayor Rudy Giuliani, admitted on CNN that there’s no proof the Obama administration had a mole inside the Trump campaign during the president’s 2016 run.  Trump had minutes earlier touted a televised claim that his Democratic predecessor’s Justice Department tried to use a spy to ‘frame’ him.  ‘First of all, I don’t know for sure – nor does the president – if there really was one,” Giuliani said. ‘For a long time we’ve been told that there was some kind of infiltration. At one time the president thought it was a wiretap. … but we’ve never been notified that he was on a tap or an intercept.’

The president cited 'reports' that the FBI implanted spies in his campaign 'for political purposes' but provided no evidence

The president cited ‘reports’ that the FBI implanted spies in his campaign ‘for political purposes’ but provided no evidence

Earlier he had promoted the view of a Fox Business Channel anchor who said the Justice Department was 'out to frame' him

 Earlier he had promoted the view of a Fox Business Channel anchor who said the Justice Department was ‘out to frame’ him Trump began his Friday online by tweeting that the rumors, if true, amount to ‘really bad stuff.’ He cited Fox Business Network host David Asman, who claimed Thursday that the Obama Justice Department ‘put a spy in the Trump campaign,’ suggesting that ‘by any means necessary, they are out to frame Donald Trump for crimes he didn’t commit.’ Giuliani, though, would only say that he and his fellow attorneys have been ‘told that … off the record’ by ‘people who knew a little about the investigation.’ But the president’s legal advisers ‘don’t know if they’re right or not,’ he conceded.

CNN anchor Chris Cuomo compared the brewing tumult with the media free-for-all Trump himself created 14 months ago when he claimed the Obama administration had been monitoring his campaign team’s communications in 2016.

Mueller’s office files unredacted memo outlining scope of Russia probe: filing


WASHINGTON (Reuters) – Special Counsel Robert Mueller’s office notified a federal court in Virginia on Thursday it had filed under seal an unredacted memorandum that is expected to shed light on the scope of his wide-ranging probe into Russian interference in the 2016 presidential election. The filing, made as part of Mueller’s criminal case against President Donald Trump’s former campaign manager, Paul Manafort, was requested by the judge, who told prosecutors earlier this month he wanted to see an unredacted copy of an August 2017 memo written by Deputy Attorney General Rod Rosenstein which fleshed out Mueller’s investigative mandate.In a court hearing two weeks ago in the Eastern District of Virginia, Judge T.S. Ellis told Mueller’s office to turn over a copy of the memo under seal to him by this Friday so he could review it before deciding whether or not to dismiss the charges against Manafort. Manafort is facing two indictments by Mueller in Virginia and Washington that charge him with an array of crimes, from conspiring to launder money and failing to register as a foreign agent, to bank and tax fraud. He has sought to have both cases dismissed on the grounds that Mueller has exceeded his authority, and that Rosenstein granted the special counsel too much power when he was appointed exactly one year ago on Thursday.  The federal judge overseeing the Washington case earlier this week refused to dismiss the charges, saying Mueller has not overstepped his authority by prosecuting Manafort. Ellis, however, insisted on seeing an unredacted copy of Rosenstein’s Aug. 2, 2017 memo before he can make a decision.

Trump’s bonfire of the treaties sweeps towards the WTO


FILE PHOTO: U.S. President Donald Trump holds a signed memorandum on intellectual property tariffs on high-tech goods from China, at the White House in Washington, U.S. March 22, 2018. REUTERS/Jonathan Ernst/File Photo

GENEVA (Reuters) – President Donald Trump has the World Trade Organization in a chokehold, and the United States has made clear what he wants: no more judicial rulings that interpret WTO rules to Washington’s disadvantage. Trump has effectively engineered a crisis in the WTO’s system of settling global disputes by vetoing all appointments of judges to its appeals chamber. True to the president’s style, his ambassador to the Geneva-fbased body, Dennis Shea, is unapologetic about shrinking the supreme court of world trade to a size where it will struggle to function. “The United States is not content to be complacent about this institution,” Shea told fellow WTO ambassadors this month. “And the leadership that the United States will bring to the WTO in the coming months and years will consequently involve a good deal of straight talk and a willingness to be disruptive, where necessary, in the interest of contributing to a stronger, more effective, and more politically sustainable organization.” Trump has proved willing to risk a global trade war in combating any treaties and practices he regards as unfairly disadvantaging U.S. companies and workers, imposing tariffs on steel and aluminum imports globally because of overproduction blamed on China. Since its creation in 1995, governments have gone to the WTO for adjudication on international trade disputes. Although rulings can be appealed, decisions made judges sitting on its Appellate Body are final, and ultimately sanctions can be used against transgressors. The rules are far from perfect or complete, and the failure to update them after decades of negotiating stalemate has obliged WTO judges to interpret them for a changing world. This has incurred Trump’s wrath. “We lose the cases, we don’t have the judges,” he said in February, describing the WTO as “a catastrophe”. Trade experts dispute this, saying all countries that go to the WTO have a broadly similar rate of winning and losing. While one U.S. judge sits on the Appellate Body, most of the WTO’s 164 members have no representative there, the experts note.Trump’s veto is reducing what is supposed to be the seven-strong Appellate Body as members’ terms expire. By September four seats will be vacant, leaving three judges, the number required to hear each appeal. If one judge needs to recuse themselves for any legal reason, the system will break down.  Since 1995, the WTO has handled more than 500 disputes and its membership has expanded to cover around 95 percent of world trade, which has more than tripled to around $18 trillion per year in goods alone.

Brent crude oil tops $80 a barrel as market grows more concerned about Iran sanctions

Middle East tensions weigh on oil markets
Middle East tensions weigh on oil markets

Brent crude oil on Thursday topped $80 a barrel for the first time since November 2014, as the market grew concerned that the Trump administration’s effort to sanction Iran’s crude exports could be more successful than originally thought. Brent, the international benchmark for oil prices, hit a session high of $80.50 a barrel on Thursday, its strongest level since Nov. 24, 2018.  U.S. West Texas Intermediate crude rose 16 cents to $71.65 a barrel. WTI earlier hit a high going back to Nov. 28, 2014 at $72.30 a barrel. President Donald Trump announced last week he would withdraw the United States from the Iran nuclear deal and restore wide-ranging sanctions on Iran. His administration is gave companies 90 to 180 days to wind down current business with Iran subject to sanctions. The market is becoming convinced that Trump will be able to disrupt crude exports after his administration slapped sanctions on the head of Iran’s central bank earlier this week, said John Kilduff, founding partner at energy hedge fund Again Capital .

Commodities tomorrow:
IEA thinks oil tipping point coming soon

“That showed that he’s not kidding around. It’s very much a forward-leaning, aggressive strategy against Iran,” he said. A debate had raged in the market over the effectiveness of the sanctions, largely because China and key U.S. allies in Europe still support the nuclear deal. While some analysts said sanctions could wipe 1 million barrels per day of Iranian crude off the market, others said the impact would be limited to fewer than 500,000 barrels a day. The Trump administration ultimately took a tougher stance than many expected, restoring all sanctions that were in place prior to their suspension in 2016. The European Union is exploring ways to protect the continent’s companies, but the market is losing faith that Washington will issue sanctions waivers to the shippers, insurers and financial institutions necessary to bring Iranian oil to buyers, according to Kilduff. “It’s not clear right now, but it’s becoming clearer that they will have a problem and oil will be coming off the market,” he said. France’s Total on Wednesday warned it might abandon a multibillion-dollar gas project in Iran if it could not secure a waiver from U.S. sanctions, casting further doubt on European-led efforts to salvage the nuclear deal. Meanwhile, concerns are mounting over falling output in Venezuela after ConocoPhillips moved to seize the assets of Venezuelan state oil giant PDVSA. “The screws are really tightening on Venezuela,” Dan Yergin, vice chairman of IHS Markit, told CNBC on Wednesday. Nick Bit: Don’t be fooled Trump will water down the sanctions like he always does

Cambridge Analytica shared data with Russia: whistleblower

AFP / Mandel NGAN Cambridge Analytica former employee and whistleblower Christopher Wylie testified at a Senate Judiciary Committee on interference with the 2016 US election

Political consulting group Cambridge Analytica used Russian researchers and shared data with companies linked to Russian intelligence, a whistleblower told a congressional hearing on interference in the 2016 US election Wednesday. Christopher Wylie, who leaked information on the British-based firm’s hijacking of data on millions of Facebook users, told a Senate panel he believes Russian intelligence services had access to data harvested by the consultancy. Wylie told the panel that Russian-American researcher Aleksandr Kogan, who created an application to harvest Facebook user profile data, was working at the same time on Russian-funded projects, including “behavioral research.” “This means that in addition to Facebook data being accessed in Russia, there are reasonable grounds to suspect that CA may have been an intelligence target of Russian security services…(and) that Russian security services may have been notified of the existence of CA’s Facebook data,” Wylie said in his written testimony. Wylie added that Cambridge Analytica “used Russian researchers to gather its data, (and) openly shared information on ‘rumor campaigns’ and ‘attitudinal inoculation'” with companies and executives linked to the Russian intelligence agency FSB. The hearing is part of a broad inquiry on both sides of the Atlantic over the misuse of Facebook data by the consulting firm working on Donald Trump’s 2016 campaign. Facebook has accused Cambridge Analytica of misappropriating its user data by violating terms of the data agreement with Kogan, the academic researcher whose app was downloaded by some 270,000 Facebook users and also “scraped” data from an estimated 87 million. On Tuesday, the New York Times reported that the FBI and Justice are investigating Cambridge Analytica for potential criminal violations Wylie told the panel that “the ethos of the firm was ‘anything goes'” for its political campaigns, including “attempting to divert health ministry funds in a struggling African country to support a politician’s re-election campaign.” He told senators that one of the goals of firm was to discourage or suppress voter turnout, especially of black voters, and that this was a focus of Trump ally Steve Bannon. “You could request voter suppression,” Wylie said in response to a question about tactics used in political campaigns. He added that he was aware of “black ops” at the company, “which I understood to include using hackers to break into computer systems to acquire ‘kompromat’ or other intelligence for its clients.” He said that one of the tactics used to interfere with voter participation included “weaponizing fear.” “In one country, CA produced videos intended to suppress turnout by showing voters sadistic images of victims being burned alive, undergoing forced amputations with machetes and having their throats cut in a ditch,” he said. “These videos also conveyed Islamophobic messages. It was created with a clear intent to intimidate certain communities, catalyze religious hatred, portray Muslims as terrorists and deny

North Korea threat to cancel U.S. summit calculated to hide nukes, intel officials say

A man watches a TV screen showing file footage of U.S. President Donald Trump, right, and North Korean leader Kim Jong Un during a news program at the Seoul Railway Station in Seoul, South Korea, Wednesday, May 16, 2018. North Korea's breaking off a high-level meeting with South Korea and threatening to scrap next month's historic summit with President Trump over allied military drills is seen as a move by Kim to gain leverage and establish that he's entering the crucial nuclear negotiations from a position of strength. Washington and Seoul, which have no intentions to overpay for whatever Kim brings to the table, say international sanctions forced Kim into talks after a flurry of weapons tests. (AP Photo/Ahn Young-joon)
A man watches a TV screen showing file footage of U.S. President Donald Trump, right, and North Korean leader Kim Jong Un during a news program at the Seoul Railway Station in Seoul, South Korea, Wednesday, May 16, 2018. North ..

North Korea’s abrupt threat this week to pull out of the upcoming summit with President Trump was highly calculated, according to intelligence officials who say Pyongyang wanted to harden its negotiating position against a quick “Libya-style” surrender of its nuclear programs sought by the Trump White House and buy time to hide its nuclear weapons. While U.S. officials say they believe Pyongyang’s threat — conveyed so far only via state-controlled media — was also driven by North Korean leader Kim Jong Un’s need to show his domestic audience he won’t “roll over” to Mr. Trump, the development raised fresh questions about the scope of Pyongyang’s nuclear operations and Mr. Kim’s willingness to abandon them. While great uncertainty swirls around the extent of North Korea’s nuclear infrastructure, U.S. officials and private analysts say Pyongyang’s history of dragging out talks and inking agreements they have no intention of implementing is well known. “The North Koreans have this belief they can somehow outsmart the U.S.,” said Anthony Ruggiero, a senior fellow at the Foundation for Defense of Democracies who is close with the Trump administration and has past experience negotiating with Pyongyang.

“They may be attempting to sanitize their facilities right now while also trying to buy more time for that,” he said.

In a move that took both Washington and Seoul by surprise, Pyongyang has seized on joint U.S.-South Korean military now underway as the justification to cancel a planned meeting of North and South Korean officials, raise questions about the proposed June 12 Kim-Trump summit in Singapore, and to hurl invective at the U.S. government — and new National Security Adviser John Bolton by name — for suggesting the North’s complete denuclearization must happen quickly. The problem, from North Korea’s perspective: Gadhafi’s nuclear weapons-less regime was toppled in a NATO-backed revolt ignited by the 2011 Arab Spring, and the dictator himself was hunted down and shot by rebel forces. Following a series of tests that sent U.S.-North Korean tensions soaring in Mr. Trump’s first year in office, U.S. intelligence agencies now believe that Pyongyang has succeeded in developing a nuclear bomb small enough to fit on an intercontinental ballistic missile, and possibly is close to having a nuclear-tipped ICBM that could reach the U.S. homeland. North Korea in recent public statements has talked about “progressive and synchronous” steps with the U.S. on a path to full denuclearization, raising the prospect of a lengthy prospect and one in which U.S. concessions — including reducing the U.S. troop presence in South Korea and security guarantees for the North — would be required to keep the peace process going.


Trump ‘flip-flops’ so much over China and trade it’s hard to pick stocks, economist says

Turkey to cut special consumption tax to offset fuel price rise


President Donald Trump “flip-flops” so much on his stance over trade and tariffs with China that it’s difficult to know what stocks to buy and avoid, an economist told CNBC ahead of the next round of Sino-U.S. trade talks aimed at averting a trade war.

“The president has an uncanny habit of saying ‘yeah, yeah we’ll punish you’ and then ‘no, no we won’t,” Andrew Freris, chief executive of economic and financial advisory firm Ecognosis Advisory, told CNBC Thursday.

“So it’s very difficult to buy and sell anything when the flip-flops are so prominent,” Freris added, although he suggested avoiding tech stocks, which could be the worst hit if a trade war and tariffs between China and the U.S. are followed-through. “I’d prefer to look at the overall macro (picture) and the pricing of stocks rather than anything else,” he said.

Chinese President Xi Jinping and U.S. President Donald Trump attend a welcoming ceremony November 9, 2017 in Beijing, China.
Pool | Getty Images Chinese President Xi Jinping and U.S. President Donald Trump attend a welcoming ceremony November 9, 2017 in Beijing, China

Freris’ comments come as the U.S. and China are set to start another round of trade talks on Thursday. The atmosphere could be a little frosty given a war of words and threats over trade tariffs in recent weeks. Trump has criticized what he sees as unfair trade practices and threatened to impose up to $150 billion of tariffs on Chinese goods. China said it would retaliate by putting tariffs on a long list of key American exports, ranging from soy beans to orange juice and cranberries. Freris, an economist and strategist formerly in the investment banking sector, said China would not lose in a potential trade war. “In the case of China, China was never an export-driven economy and China is not an export-driven economy, I will never tire of repeating that,” he told CNBC’s Capital Connection. “So even if a lot of exports disappear it will have a tiny affect on its GDP (gross domestic product) growth. It will affect individual companies, of course, and it will affect some of the regions, but taking China macro-economically — if the Americans think that barking loud enough that’s going to scare them, they won’t.” On Thursday, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer are leading the U.S. delegation in discussions with Chinese Vice Premier Liu He. White House trade and manufacturing advisor Peter Navarro, a vocal critic of China trade policies, appears to have been sidelined for the visit. China’s Commerce Ministry said it did not want to see an escalation to the trade dispute, Reuters reported Thursday, and added that it hoped the U.S. would take action as soon as possible on the case of Chinese technology company ZTE and resolve it in a fair manner, ministry spokesman Gao Feng told reporters at a regular briefing. Ahead of this week’s talks, Trump said Sunday that he would help ZTE “get back into business, fast” after a U.S. ban hit the company hard, but following criticism that his views on ZTE contradicted his broader stance towards China-U.S. trade, he appeared to row back on that, tweeting on Wednesday that, “Nothing has happened with ZTE except as it pertains to the larger trade deal.”

Trump will seek full funding soon for his border wall

U.S. President Donald Trump speaks while participating in a tour of U.S.-Mexico border wall prototypes near the Otay Mesa Port of Entry in San Diego, California. U.S., March 13, 2018. REUTERS/Kevin Lamarque

WASHINGTON (Reuters) – President Donald Trump on Wednesday said he would soon push for full funding of his promised wall along the U.S. border with Mexico, which could spark budget battles in a Congress fractured over his immigration policy.U.S.   “Now we’re going for the full funding for the wall, and we’re going to try and get that as soon as possible,” Trump said at a roundtable with California municipal leaders who favor his goal of making the U.S. border impervious to illegal immigration.

 Last month Trump threatened to shut down the federal government in September if Congress did not provide more funding for his wall. If that happens, it would mark the second time in one year the U.S. government was shuttered over immigration, with an impasse leading to a brief shutdown in January.

Center and right-wing lawmakers from Trump’s Republican party are split on legislation that would protect young illegal immigrants from deportation, torn over how far it should go to clamp down on legal and illegal immigration. At the roundtable Trump voiced hostility for the country’s southern neighbor, Mexico, which is partnering with the United States and Canada in an unprecedented bid to host the World Cup in all three countries. It is also a part of the North American Free Trade Agreement that Trump would like to renegotiate or end. “Mexico does nothing for us,” he said. “Mexico talks but they do nothing for us, especially at the border. They certainly don’t help us much on trade.”

Giuliani: Mueller’s team told Trump’s lawyers they can’t indict a president

Giuliani says Trump's new legal team has not held lengthy prep for Mueller interview

(CNN)Special counsel Robert Mueller’s team has informed President Donald Trump’s attorneys that they have concluded that they cannot indict a sitting president, according to the President’s lawyer.

“All they get to do is write a report,” Trump lawyer Rudy Giuliani told CNN. “They can’t indict. At least they acknowledged that to us after some battling, they acknowledged that to us.” Nick Note: Not quite right! BUT they sure as shit can force him to testify before a grand jury AND they can take any evidence of crimesssss to the House who can impeach him… after the fall elections where the democrats will have a majority
That conclusion is likely based on longstanding Justice Department guidelines. It is not about any assessment of the evidence Mueller’s team has compiled. A lack of an indictment would not necessarily mean the President is in the clear. Mueller could issue a report making referrals or recommendations to the House of Representatives. The inability to indict a sitting president has been the position of the Office of Legal Counsel in the Justice Department since the Nixon administration and reaffirmed in the Clinton administration, but it has never been tested in court. Deputy Attorney General Rod Rosenstein publicly discussed the issue earlier this month at an event held by the Freedom Forum Institute. He was asked if a sitting president can be indicted.
“I’m not going to answer this in the context of any current matters, so you shouldn’t draw any inference about it,” Rosenstein said. “But the Department of Justice has in the past, when the issue arose, has opined that a sitting President cannot be indicted. There’s been a lot of speculation in the media about this, I just don’t have anything more to say about it.” Rosenstein oversees the special counsel probe.
Giuliani tells CNN the special counsel’s team has decided that “they have to follow the Justice Department rules.” “The Justice Department memos going back to before Nixon say that you cannot indict a sitting president, you have to impeach him. Now there was a little time in which there was some dispute about that, but they acknowledged to us orally that they understand that they can’t violate the Justice Department rules,” Giuliani said. “We think it’s bigger than that. We think it’s a constitutional rule, but I don’t think you’re ever going to confront that because nobody’s ever going to indict a sitting president. So, what does that leave them with? That leaves them with writing a report,” said Giuliani. It would then be up to the House of Representatives to decide what to do about with the special counsel’s report — and whether to pursue articles of impeachment.
Giuliani also said that he is using the one-year anniversary of the Mueller probe, which is Thursday, to push the special counsel to disclose how much money is being spent, and to actively begin negotiating with Trump’s legal team over any Trump interview Mueller is seeking.
“Do you really need an interview?” Giuliani said he wants Mueller’s team to answer.
“You’ve got all the facts. You’ve got all the documents. You’ve got all the explanations. We’re happy to tell you they’re not going to change.”

As Italy Seeks to Form a Government, Leaked Documents Stir Anxiety

The leader of the League party, Matteo Salvini, addressing the news media after meeting with President Sergio Mattarella in Rome on Monday. CreditAlessandro Di Meo/ANSA, via Associated Press

ROME — Talks between two anti-establishment parties to form a new Italian government seemed to be regaining momentum on Wednesday, even as financial markets were spooked by leaked documents that suggested the two sides shared a desire to radically change Italy’s relationship with the European Union. The leaders of the Five Star Movement and the anti-immigrant League party dismissed the leaked document Tuesday night as “old.” But the draft, which was on the negotiating table as of Monday morning, was apparently not “old” enough to avoid raising jitters. On Wednesday, investors shed Italian assets, and shares trading on the Milan stock market slipped. Current or not, the document, obtained by Huffington Post Italy, brought into focus concerns among European leaders and financial markets about what a government run by the two parties could mean for Italy and the European Union as a whole. In a series of joint statements, the two parties tried to distance themselves from the positions in the document, but in doing so only seemed to further betray their real ambitions for what they called “a rethink” of Italy’s relationship to the European Union and the common currency of most of its members, the euro. In a joint statement Tuesday night, they protested that the proposals in the leaked document had been “radically changed” in subsequent meetings. “For example, on the euro, the parties have already decided not to put in discussion the single currency,” it said.But an hour and a half later, Five Star, led by Luigi Di Maio, 31, and the League, led by Matteo Salvini, 45, released another joint statement clarifying — or perhaps muddying — their position on the eurozone.

That statement said they preferred to return to the arrangement before the Maastricht Treaty of 1992, which created the framework and fiscal rules for the euro — a time when the Italian lira was the coin of the realm.

“The structure of European economic governance, based on the dominance of the market, and the respect for rules that are stringent and unfounded from a social and economic point of view, requires a rethink with our European partners,” they said. “The spirit must be to return to the pre-Maastricht setting.” Nick Note:  Bottom line the Euro is doomed so is the Union. Why? Because when you control currency value you can screw your creditor at will by devaluing…..

Japan economy shrinks after two years of growth, dealing a blow to prime Minister Shinzo Abe

Abe has launched a pro-spending policy blitz called ‘Abenomics’ since he took office in late 2012, combining ultra-loose monetary policy and fiscal stimulus

Japan’s economy slid into reverse for the first time in two years at the beginning of the year, hit by sluggish consumption and a winter cold snap, but analysts predicted the world’s third-largest economy would quickly rebound.The economy contracted by 0.2 per cent quarter-on-quarter in the January-March period, compared with growth of 0.1 per cent at the end of 2017, the Cabinet Office said on Wednesday. This brought to an end a series of eight consecutive quarters of growth, a winning streak not seen since the heady days of the “miracle” boom of the 1980s when the Japanese economy ruled the world. The data will come as a blow for the vaunted “Abenomics” policies of Prime Minister Shinzo Abe, who is already under pressure over a series of scandals. But experts said they expected a pause in the growth trend rather than a prolonged downswing. “There were one-off special factors in the January-March period, ranging from stock market sell-offs to higher vegetable prices due to bad weather,” said Takeshi Minami, chief economist at Norinchukin. The yen also strengthened against other major currencies on safe-haven buying, clouding the prospects for Japanese exporters. “There are worries about some emerging economy markets but the global economy as a whole is likely to continue its recovery for some more time. [Japan’s] GDP will likely come back to positive growth in April-June,” Minami said. The economy was stalled by stagnant private consumption, which was flat in the January to March period after an uptick of 0.2 per cent in the final quarter of last year. Private residential investment also plunged another 2.1 per cent after a 2.7 per cent fall in the previous quarter. And exports of goods and services slowed, rising 0.6 per cent compared to an increase of 2.2 per cent in the previous three months. But despite the broad-based slowdown, Minami said the economy would remain solid. “If you look at the Bank of Japan’s ‘Tankan’ survey released in April, business confidence was unshaken, with corporate investment plans remaining solid,” he said. The key survey by the central bank last month showed confidence among Japan’s biggest manufacturers had slipped after five quarters of rises but the headline index still remained close to the highest level in over a decade.

 SMBC Nikko Securities chief market economist Yoshimasa Maruyama warned that private consumption was weak even when the special factors were taken into consideration. Consumers will keep purse strings tight “unless the pace of wage increases shows a clear acceleration”, he said in a commentary published ahead of the data release. Consumer spending has remained stubbornly lacklustre, with companies staying stingy on wage hikes despite healthy profits. Stock market traders appeared to be disappointed by the data with the main Nikkei stock index closing down 0.44 per cent.

Justice Department and F.B.I. Are Investigating Cambridge Analytica


The London offices of Cambridge Analytica in March.
The now-defunct political data firm has faced intense scrutiny since it was revealed to have harvested information from tens of millions of Facebook profiles.CreditDaniel Leal-Olivas/Agence France-Presse — Getty Images

WASHINGTON — The Justice Department and the F.B.I. are investigating Cambridge Analytica, the now-defunct political data firm, and have sought to question former employees and banks that handled its business, according to an American official and other people familiar with the inquiry.Prosecutors have questioned potential witnesses in recent weeks, telling them that there is an open investigation into Cambridge Analytica — which worked on President Trump’s election and other Republican campaigns in 2016 — and “associated U.S. persons.” But the prosecutors provided few other details, and the inquiry appears to be in its early stages, with investigators seeking an overview of the company and its business practices. The investigation compounds the woes of a firm that has come under intense scrutiny from lawmakers and regulators in the United States and Britain since The New York Times and Observer in London reported in March that it had harvested private data from more than 50 million Facebook profiles, and that it may have violated American election laws. This month, Cambridge Analytica announced that it would shut down and declare bankruptcy, saying that negative press and cascading federal and state investigations had driven away customers and made it impossible for the firm to remain in business.The company, whose principal owner is the wealthy Republican donor Robert Mercer, offered tools that it claimed could identify the personalities of American voters and influence their behavior. Its so-called psychographic modeling techniques, which were built in part with the data harvested from Facebook, underpinned Cambridge’s work for the Trump campaign in 2016. The federal investigation in the United States appears to focus on the company’s financial dealings — investigators have reached out to the company’s banks, for instance — and how it acquired and used personal data pulled from Facebook and other sources, according to the American official, who was briefed on the inquiry, and other people familiar with it. “I can confirm that I’ve been contacted by the F.B.I. and the Department of Justice, and answered preliminary questions,” Mr. Wylie said in a brief interview. “We plan to meet again to provide substantive answers to the investigators.”

Federal prosecutors traveled to London this month to interview Christopher Wylie, a former employee and a fierce critic of Cambridge Analytica.CreditAndrew Testa for The New York Times

It was not clear whether the investigation is tied to the inquiry being led by Robert S. Mueller III, the special counsel, who is examining whether Mr. Trump or any of his associates aided Russia’s effort to interfere in the presidential election. Prosecutors from Mr. Mueller’s team questioned at least two Cambridge executives last December in Washington, according to one company official. The employee, who asked to remain anonymous to describe confidential internal matters, added that the inquiry appeared to be perfunctory. There have been no other concrete signs from Mr. Mueller’s team that Cambridge is a focus of their efforts. The Justice Department’s investigation is running parallel to a separate investigation by the National Crime Agency of Britain. There, investigators are examining a range of allegations, including whether Cambridge Analytica employees sought to bribe foreign officials, destroyed evidence, hacked computers and violated Britain’s Data Protection Act.“There is an international investigation being coordinated by the National Crime Agency in Britain, and I intend to be as helpful and cooperative as I can,” he said Also in 2014, a contractor for the new firm used quiz apps and other programs to gather private profile information from as many as 87 million Facebook users, data former Cambridge employees said provided the critical basis for the new company’s voter profiles. The Times also reported in March that the company had sent personnel from Canada and Europe to work on various campaigns in the 2014 midterm elections and in 2016 campaigns, raising questions about Cambridge’s compliance with federal election law, which limits the involvement of noncitizens in election campaigns. One new firm, a British holding company called Emerdata, was formed in part to bring in new investors, according to a former employee. Emerdata’s directors, according to public records, came to include Johnson Ko Chun Shun, a Hong Kong financier and business partner of Erik Prince, founder of the private security firm formerly known as Blackwater

Qatari investor confirms he was at Trump Tower meetings

Qatari investor confirms he was at Trump Tower meetings
© UPI Photo Qatari investor Ahmed Al-Rumaihi has confirmed that he attended multiple meeting in Trump Tower in December 2016, including at least one with Michael Cohen.

Al-Rumaihi told CNN through a spokesperson that he attended the meetings for face time with Trump transition officials but noted he did not meet with former national security adviser Michael Flynn. “Mr. Al-Rumaihi was at Trump Tower on December 12, 2016. He was there in his then role as head of Qatar Investments, an internal division of QIA, to accompany the Qatari delegation that was meeting with Trump transition officials on that date,” the spokesperson told CNN. “He did not participate in any meetings with Michael Flynn, and his involvement in the meetings on that date was limited.” Al-Rumaihi’s acknowledgment that he was at Trump Tower meetings came after adult-film star Stormy Daniels’s attorney Michael Avenatti questioned why Al-Rumaihi was “meeting with Michael Cohen and Michael Flynn in December 2016 and why did Mr. Al-Rumaihi later brag about bribing administration officials according to a sworn declaration filed in court?”

Avenatti’s posted screenshots of a Trump Tower lobby video feed from Dec. 12, 2016, where Cohen, Trump’s personal attorney who is currently under criminal investigation, and Al-Rumaihi appear to be entering and leaving Trump Tower.

The spokesperson for Al-Rumaihi’s did not say who was in the meetings Al-Rumaihi attended or what they involved, but, according to a person familiar with the Qatari delegation meetings at Trump Tower that spoke with CNN, Cohen “popped in” during one. Daniels, whose real name is Stephanie Clifford, is suing Cohen to extricate herself from a $130,000 nondisclosure agreement they signed just weeks before the 2016 election. She is also suing both Cohen and Trump for defamation.  The same corporation that Cohen set up to make his payment to Daniels apparently received payments from companies and individuals seeking access to and insight on the Trump administration. The FBI raided Cohen’s office and residence last month after receiving a referral from special prosecutor Robert Mueller, who is investigating Russian interference in the 2016 election. On Tuesday, CNN reported that Cohen lied in 2017 about the Trump Organization having no relationship with Russia even though he later admitted he had pursued a business deal for the organization in Russia during the 2016 election.

Market Volatility Spurs ETF Outflows

Europe-domiciled exchange traded funds run by dominant player iShares endured hefty outflows of more than €4 billion in March and April

Euro bank notes

An outpouring of money from exchange-traded funds could be a sign that investors are turning away from passives strategies as volatility returns to global stock markets.

Europe-domiciled exchange traded funds run by BlackRock’s iShares endured hefty outflows of more than €4 billion in March and April, according to data from Morningstar Direct.

As the dominant ETF player globally, iShares has traditionally been at the top of the inflows list – investors poured €8.5 billion into its products in the first two months of the year alone. Over the past 12 months, the provider has recording inflows of almost €30 billion. But it’s been rock-bottom for the past couple of months. Flows into ETFs have taken a dip over the past two months. After €20 billion of inflows through January and February, ETFs in total saw just €1.8 billion invested in the past two months, according to data from Morningstar Direct. Many of iShares’ closest rivals have also experienced a tapering in demand. Lyxor, for example, has seen a sharp turn in sentiment, recording inflows of €720 million in February and, just two months later, some €378 million of outflows in April. Vanguard inflows halved in that time to €860 million. iShares says the flows reflect an overall risk-off sentiment in markets, adding that flows highlight the maturing of the European ETF market, “as investors increasingly use our ETFs at the core of their portfolios, and to efficiently adjust their positioning”. “We also saw outflows from large European equity products, which was a reversal of the inflows we saw in Q4 2017 through to the beginning of 2018.” In May, for the first time in its history, Bank of America Merrill Lynch’s monthly fund manager survey asked global professional investors about their allocations to ETFs. Just over half (53%) of respondents said they use passive instruments, including ETFs, in their strategies. Around 80% of managers surveyed said their allocation to ETFs is less than 40% of their assets under management. The weighted average investor AUM allocated to ETFs is 20%, which BAML says is well above the average 11% allocation of its private clients.

Mexico says NAFTA deal unlikely this week, signing possible this year

FILE PHOTO: Mexico’s Economy Minister Ildefonso Guajardo speaks to the media during a news conference at Los Pinos presidential residence in Mexico City, Mexico May 1, 2018. REUTERS/Henry Romero

MEXICO CITY (Reuters) – Mexico’s economy minister said on Tuesday that he saw diminishing chances for a new North American Free Trade Agreement ahead of a May 17 deadline to present a deal that could be signed by the current U.S. Congress. U.S. House Speaker Paul Ryan has said that the Republican-controlled Congress would need to be notified of a new NAFTA deal by Thursday to give lawmakers a chance of approving it before a newly elected Congress takes over in January. “It is not easy, we do not think we will have it by Thursday,” Mexican Economy Minister Ildefonso Guajardo told broadcaster Televisa. “We will keep negotiating, and in the moment that we have a good negotiation, we can close the deal … independent of which Congress (the current or new) that will vote on it,” he said. Negotiators from the United States, Mexico and Canada have been in intense talks since last month to try to reach a deal before upcoming U.S. congressional elections. Mexico’s presidential vote on July 1 also complicates talks. Uncertainty over the future of NAFTA and the election has put pressure on the Mexican peso, Guajardo said. Mexico’s peso sank to its weakest level in over a year on Tuesday and the country’s benchmark stock index fell about 1 percent to its lowest since early April.“There are different moments to close the negotiation,” Guajardo said. “It could be before the Mexican election on July 1, it could be just after.”  Leftist Andres Manuel Lopez Obrador is leading polls to win the presidential race, and his pick for economy minister, Graciela Marquez, said last month his administration would be willing to accept a NAFTA deal struck before the election. If that is not possible, she said it would be better to complete the negotiation after the next government takes office at the start of December. Guajardo said the next government’s team would need to be involved in any talks after July 1. Canadian Prime Minister Justin Trudeau and U.S. President Donald Trump on Monday discussed the possibility of bringing NAFTA talks to a “prompt conclusion.” Guajardo said negotiators were getting close to reaching a deal on rules for the auto sector under NAFTA.However, talks still faced the hurdles of U.S. demands for a sunset clause that would allow NAFTA to expire if it is not renegotiated every five years, and the elimination of settlement panels for trade disputes.  More flexibility was needed for a deal, Guajardo said. Kenneth Smith, the chief Mexican negotiator at the talks, said that for Mexico there were no deadlines in the revamp. “Mexico’s position since the start of the negotiation has been that we’re not going to sacrifice the quality of the deal to conclude quickly,” he told local radio. Irrespective of the May 17 date mentioned by Ryan, there was still time to ratify a new NAFTA this year, Smith added. “There’s no question the possibility exists, we’re interested and I think the United States and Canada share this view,” he said, speaking to broadcaster Enfoque Noticias. Hanging over the talks has been a threat by the Trump administration to impose steel and aluminum tariffs on its trade partners. Mexico and Canada have been spared so far, although the latest exemption for them will run out at the end of May. Smith noted that Mexico ran a deficit with the United States in trade in both metals and that his government would retaliate with equivalent measures against the United States “immediately” if tariffs or quotas were imposed.

North Korea threatens to cancel Trump-Kim summit over South Korea-US military drills

Dictator Kim Jong-un was set to meet with U.S President Donald Trump on June 12 in Singapore but the meeting is now reportedly at risk

Kim Jong-un with the South Korean President Moon Jae-in at the DMZ (Image: EPA)

North Korea has reportedly threatened to cancel the much anticipated Trump-Kim summit over the South Korea-US military drills. According to South Korean news agency, Yonhap News, North Korea said has said it is canceling high-level talks planned for later in the day. “The North’s Korean Central News Agency said the Max Thunder drills between the South Korean and US air forces are a rehearsal for invasion of the North and a provocation amid warming inter-Korean ties,” the site reports. “The high-level talks were meant to take place on the southern side of the truce village of Panmunjom to discuss follow-up measures to the two Korean leaders’ summit last month. Kim Jong-un was set to meet with Donald Trump on June 12 in Singapore. A historic meeting meeting Kim and South Korean President Moon Jae-in recently took place at the DMZ, with Kim becoming the first North Korean leader to cross over into the South in 65 years. Moon briefly crossed over into the North while holding Kim’s hand. Last week North Korea announced on state media it will dismantle its nuclear test site just weeks ahead of the summit.The rogue nation will start to take the facility apart on May 23, with international media watching. The country’s central news agency said the dismantlement of the nuclear test ground would involve collapsing all of its tunnels with explosions, blocking its entrances and removing all observation facilities, research buildings and security posts. Journalists from other countries, including the United States and South Korea, will be invited to cover the event. The nuclear site that will be dismantled is located in Pukyung, and the area around Pumyeong nuclear test site will also be closed. Last month, five nuclear test blasts in Pyongyang, under Mount Mantap, tore open a hole in the mountain which then collapsed upon itself. Researchers also found that breakdown created a “chimney” which could allow radioactive fallout from the blast zone below to rise into the air. Now, U.S. intelligence showed North Koreans had already started pulling cables from the tunnels at their nuclear test site. This week three Americans held prisoner by the communist country were released and flown back to the USA. The choice of Singapore as the site of the first-ever meeting of a sitting U.S. president and a North Korean leader was as much because it was within reasonable flight time and distance from Pyongyang as because of the island state’s political neutrality, a South Korean presidential official told reporters. But experts say the process could take years and cost hundreds of millions of dollars, according to USA Today. Olli Heinonen, an arms control expert at the Foundation for Defense of Democracies, a national security think-tank, said: “This would be the biggest undertaking by the international community when it comes to denuclearization or disarmament.”

Wall Street drops on concerns over U.S.-China trade woes, rising inflation

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 10, 2018. REUTERS/Brendan McDermi

Reuters) – U.S. stocks slipped on Tuesday after the latest retail sales data indicated rising inflation and pushed up Treasury yields, while trade worries lingered with no signs of progress in U.S.-China talks. The United States and China are still “very far apart” on resolving trade frictions, U.S. Ambassador to China Terry Branstad said, as a second round of high-level talks were set to begin in Washington. Adding to the trade woes, Mexico’s economy minister Ildefonso Guajardo said he does not expect to meet a deadline this Thursday to reach a new North American Free Trade Agreement that could be presented to the U.S. Congress. U.S. retail sales increased a moderate 0.3 percent in April, compared with an upwardly revised 0.8 percent surge in March, as rising gasoline prices weighed on discretionary spending, the Commerce Department said.However, the rise in core retail sales, which excluded automobiles, gasoline, building materials and food services, showed consumer spending appeared on track to accelerate after slowing sharply in the first quarter.  Following the data, benchmark U.S. Treasury yield hit 3.037 percent, a key breakout level, before gaining further to 3.058 percent, its highest since July 2011. “When yields pop like they did this morning, that was unsettling and that came on top of the big run that markets just had,” said Bruce Bittles, chief investment strategist for Robert W. Baird & Co in Sarasota, Florida. “Even from an overbought situation, the markets were a touch vulnerable and perhaps these rate rises was enough to trigger that.” losses were broad based with ten of the 11 major S&P sectors in the red. The S&P financial .SPSY was the only sector posting a slight gain of 0.1 percent. Declining issues outnumbered advancers for a 2.02-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.18-to-1 ratio on the Nasdaq..

one-third of American working-age men could be displaced by robots

Jobs that don’t require advanced education will be replaced by automation, displacing low-wage, low-skilled workers.
Courtesy Everett Collection Robots could be big job killers in the future, some experts contend.

One third of able-bodied American men between 25 and 54 could be out of job by 2050, contends the author of “The Future of Work: Robots, AI and Automation.”

“We’re already at 12% of prime-aged men without jobs,” said Darrell West, vice president of the Brookings Institution think tank, at a forum in Washington, D.C. on Monday.

That number has grown steadily over the past 60 years, but it could triple in the next 30 years because of new technology such as artificial intelligence and automation. It could be even worse for some parts of the population, West argued. The rate for unemployment of young male African Americans, for instance, is likely to reach 50% by 2050. “That, my friends, is a catastrophe,” West said. A lot of things can be done to avert such a problem and rethinking education is one of them, West said. “Schools need to change their curriculum so that students have the skills needed in the 21st century economy.” Molly Kinder, senior adviser at progressive think tank New America, said the current state of manufacturing tells a story that will be seen see across many occupations. Jobs that don’t require advanced education will be replaced by automation, displacing low-wage, low-skilled workers. Public policymakers need to make education, especially in technology, for low-skill workers a priority to combat the potential for soaring unemployment rates, she said. Many are already hurt by the technology shift. Some 6% of all adults say they lost a job or had their pay or hours reduced because of automation, according to a Pew Research study published in October. And 65% of adults believe most stores will be fully automated in 20 years and require little human interaction. Digital devices are “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex or race discrimination case.” Yet what executives might see as a good business move is a source of fear and uncertainty for others. The prospect of being replaced by automation is troubling for a number of young members of the workforce.

About 37% of millennials are at high risk of having their job replaced by artificial intelligence or automation, says a study published by Gallup in June.

Among those, one-third are struggling with workplace anxiety, worry about being laid off or their jobs being outsourced. According to Gallup, many companies successfully manage employees’ fears through future readiness audits. One manufacturing company teaches its employees statistics and coding skills as well as how to incorporate data and analytics into their everyday life. This helps to prepare employees for an artificial intelligence driven future, Gallup said. But, on a nationwide scale, the policies are not in place to help workers adjust to these changes, according to Kinder. And that future may arrive much quicker than most members of the workforce think. According to that same Gallup poll, 59% of executives believe that data science and analytical skills will be essential communication skills within their companies in five years.

China’s night-owl retail investors leverage up to dominate oil futures trade

FILE PHOTO: A company logo of Shanghai Futures Exchange is displayed at a booth during LME Week Asia in Hong Kong, China June 14, 2016. REUTERS/Bobby Yip/File Photo

BEIJING (Reuters) – As 9 pm approaches every weekday night in China, a small army of individual investors from around the country log onto trading apps on their mobile phones and laptops. Wall Street may be about to open but these night owls are interested in trading something much closer to home – the new Shanghai crude oil futures contracts <0#ISC:> that were launched in late March. Armed with risky loans from online firms or digging into their own savings, they threaten to play an outsized role in the new market, which has got off to a roaring start. It is not for the fainthearted – one contract of 1,000 barrels costs about 476,000 yuan ($75,160) and traders are required to place a deposit – as much as 500,000 yuan – before they are allowed to trade. On average, volume between 9 pm and midnight accounts for almost 60 percent of daily turnover, equivalent to about 22 million barrels of oil worth more than 10 billion yuan. And executives of online lending platforms, managers at major brokerages, and traders interviewed by Reuters all said that most of the orders in that period come from retail investors – and a lot of it involves borrowed money. Their dominance is a reflection of the interest among China’s burgeoning middle class for investments in the country’s vast commodities market – many of the crude oil traders also dabble in other commodities such as iron ore and steel. This is especially the case after the authorities in recent years succeeded in damping down speculative activity in stocks and in real estate. It is also a sign of the kind of mania that is high-risk not only for the individual investors – who can quickly lose a lot of money borrowed on margin – but also for the long-term prospects of China’s oil futures market. The retail investors can exaggerate price swings – they tend to close out positions every day, for example, to avoid holding costs – and the market could lose liquidity quickly if a sell-off prompts a sudden outflow of their money. Liquidity, measured by open interest, hit 15,000 lots, equivalent to 15 million barrels, last Thursday, a record and almost double levels at the start of May after Washington withdrew from the Iran nuclear deal and renewed sanctions on the oil exporter. That does suggest a pick up in interest from institutional investors in recent days.

UK consumer spending continues to fall in April – Visa


Shoppers browse in an Aldi store in London, Britain, February 15, 2018

LONDON (Reuters) – British consumers tightened their belts further last month, figures from payment card company Visa showed on Monday, adding to signs that the economy is struggling to recover from a weak first quarter. Visa said inflation-adjusted spending on its credit and debit cards in April was 2 percent lower than last year – the same decline as in March and one of the steepest declines of the past five years. Looking at the three months to April, the fall in spending gathered pace, dropping by 1.6 percent on a seasonally adjusted basis compared with the previous three months. In March, spending fell by 1.3 percent on a similar basis.“Low confidence levels amongst shoppers and the gloomy outlook for the UK economy are likely to have contributed to this continued caution,” Visa’s chief commercial officer, Mark Antipof, said. Discretionary spending on furniture, electrical appliances and recreation was worst hit, Visa said. Last week the Bank of England said a first-quarter slowdown in economic growth to just 0.1 percent was probably a blip caused by unusually icy weather. But it did highlight weaker consumer spending and a softer housing market as possible warning signs of more persistent sluggishness. Visa said the weak consumer spending was surprising given inflation was beginning to slow and wage growth was edging up.“Retailers will be pinning their hopes on further improvements in household finances and warmer weather leading to a more upbeat few months heading into summer,” Antipof said.  Visa says its cards account for a third of British spending. The data is adjusted for changes in Visa’s market share, a long-term decline in cash usage, and to strip out transactions that do not count as consumer spending. Reporting by David Milliken, editing by Andy Bruce

Bolton: Iran’s Economy ‘Quite Shaky,’ So Effect of Sanctions ‘Could Be Dramatic’

National Security Adviser John Bolton (Photo: Screen grab/CNN)

(CNSNews.com) – Regime change in Iran is “not the policy of the administration,” National Security Adviser John Bolton told ABC’s “This Week” on Sunday. “The policy of the administration is to make sure that Iran never gets close to deliverable nuclear weapons,” he said. But on CNN’s “State of the Union,” Bolton noted that getting out of the Iran nuclear deal will result in the reimposition of American sanctions on Iran: “And I think what we’ve seen is that Iran’s economic condition is really quite shaky, so that the effect here could be dramatic,” Bolton told CNN’s Jake Tapper. Tapper noted that Bolton repeatedly pushed for regime change in Iran before he became national security adviser. “I know that is not the current position of the United States government. But are you behind the scenes pushing for it to become the position of the United States government, regime change?” Tapper asked Bolton. Bolton replied that he has “written and said a lot of things over the years when I was a complete free agent. I certainly stand by what I said at the time. But — but those were my opinions then.
“The circumstance I’m in now is that I’m the national security adviser to the president. I’m not the national security decision-maker. He makes the decisions, and the advice I give him is between us.”
Meanwhile, CBS’s “Face the Nation” started on Sunday with a report from foreign correspondent Elizabeth Palmer in Tehran. Host Margaret Brennan asked Palmer how Iranian citizens are reacting to the U.S. pulling out of the nuclear deal:
“Well, the hard-liners hit the streets after President Trump’s decision, with the old cries of ‘Death to America,'” Palmer responded. “But they and everybody else are actually much more angry with their own government. They’re fed up, because they haven’t had salary increases. There are no jobs. There’s corruption. And, most of all, they say the Iranian government can offer nothing but a bleak future. “I have never heard people so angry here. At the moment, the government is keeping a lid on little protests that have been springing up everywhere, but it’s anyone’s guess how long they can maintain stability,” Palmer concluded.

Trump Extends Lifeline to Sanctioned Tech Company ZTE

Trump says in tweet he is working with Chinese president to keep struggling company in business

Trump in a tweet Sunday said he is working with Chinese President Xi to keep ZTE in business.
Photo: johannes eisele/Agence France-Presse/Getty Images

President Donald Trump said he was working with Chinese President Xi Jinping to keep ZTE Corp. in business, throwing an extraordinary lifeline to the Chinese telecommunication giant that has been laid low by U.S. moves to cut off its suppliers.

The surprise intervention comes less than a month after ZTE was hit with an order banning U.S. companies from selling components to the Chinese business. The U.S. Commerce Department directed companies to stop exporting to ZTE in mid-April, saying the Chinese firm violated the terms of a settlement resolving evasion of U.S. sanctions against Iran and North Korea.

Mr. Trump said in a tweet that he is working with Mr. Xi to get ZTE “a way to get back into business, fast. Too many jobs in China lost.” He said the Commerce Department has been instructed to “get it done!” Mr. Trump’s comments about the company and concern about Chinese jobs come as the U.S. and China are locked in high-stakes negotiations over trade and intellectual property. Both countries are threatening to slap tariffs on tens of billions of dollars of the other’s products. Mr. Trump has regularly blamed China for U.S. job losses and Beijing’s policies for the U.S. trade deficit, making his shift in tone notable.U.S. concerns about ZTE go beyond its evasion of sanctions. For years, the U.S. has accused equipment made by Shenzhen-based ZTE and its larger crosstown rival Huawei Technologies Co. of being a national security threat, an accusation that both companies have denied.  The U.S. has largely blocked both companies from selling telecommunications gear in the U.S., and the Pentagon recently pulled mobile phones made by both competitors from stores on U.S. military bases. ZTE continues to sell phones in the U.S. through a number of retail channels, including through Best Buy Co. stores and through AT&T Inc. stores and its website, representatives from both companies said last week. Phones made by Huawei, the world’s No. 3 handset maker, are more difficult to find in the U.S. The company was set to launch a high-end handset earlier this year with AT&T but the U.S. carrier pulled out of the deal at the last minute without explaining why. Nodding to security concerns, Rep. Adam Schiff of California, the top Democrat on the House Intelligence Committee, responded on Twitter to the president’s remarks: “Our intelligence agencies have warned that ZTE technology and phones pose a major cybersecurity threat.” He chided Mr. Trump: “You should care more about our national security than Chinese jobs.”

Senate minority leader Chuck Schumer (D., N.Y.) tweeted in response to Mr. Trump: “How about helping some American companies first?”

Late Sunday, amid confusion about the meaning of Mr. Trump’s comments, the White House issued a statement saying that the ZTE matter would be decided independently by the Commerce Department.“The administration is in contact with China on this issue, among others in the bilateral relationship,” a White House spokeswoman said. She said that Mr. Trump expects Commerce Secretary Wilbur Ross to “exercise his independent judgment, consistent with applicable laws and regulations, to resolve the regulatory action involving ZTE based on its facts.”  said it had ceased major business operations.The Wall Street Journal reported Saturday that in its efforts to have the ban stayed, ZTE has told U.S. authorities that process and human-resource errors, not a plan of systematic deception, were responsible for the lapses in fully complying with its 2017 settlement, according to a person familiar with the matter. The company also believes that the ban is a disproportionate penalty, this person said.

Federal Tax Cuts Leave States in a Bind

Hundreds of New Yorkers gathered outside Cipriani at 42nd Street in Midtown Manhattan on December 2, 2017.
Erik McGregor | Pacific Press | LightRocket | Getty Images Hundreds of New Yorkers gathered outside Cipriani at 42nd Street in Midtown Manhattan on December 2, 2017.

The federal tax overhaul cut taxes for millions of American families and businesses. But the law also had an unintended effect: raising the state-tax bite in nearly every state that has an income tax. Now, governors and state legislators are contending with how to adjust their own tax codes to shield their residents from paying more or, in some cases, whether to apply any of the unexpected revenue windfall to other priorities instead. The Tax Cuts and Jobs Act, which President Trump signed into law in December, did not directly affect state budgets. It cut federal tax rates, but also made other changes that mean more income will be subject to taxation. Because most states use federal definitions of income and have not adjusted their own rates, the federal changes will have big consequences for both state budgets and taxpayers. 

“Residents of the majority of states would experience an unlegislated tax increase,” said Jared Walczak, an analyst with the Tax Foundation, a conservative think tank.

Apart from the nine states with no broad-based income tax, nearly every state will face a similar decision. Almost all of the states base their tax codes in some way on federal definitions of income, before applying their own adjustments and deductions and setting their own tax rates. The federal tax overhaul, which eliminated or capped several deductions and exemptions, effectively broadened what counts as income for some families. Previously, for example, a married couple with three children earning $70,000 might have been taxed on only about $36,000 of that income, according to the Tax Policy Center, a research group. The tax law, however, eliminated the so-called personal exemption and made other changes, which could increase this family’s taxable income to about $46,000. The changes leave families owing tax on a larger share of their income, without the reduced rates or new credits to soften the blow. A handful of states have already taken action, in some cases using the extra revenue from the federal law as lubrication for deal-making. Colorado, for example, took advantage of its estimated $200 million in extra revenue to pass a budget that included extra funding for roads, public education and school security. Idaho, on the other hand, moved quickly to return the revenue windfall to residents through tax cuts. In California, the legislature has not even tried to pass a conformity bill, choosing instead to focus on developing workarounds for the federal law’s cap on state and local tax deductions, which would hit California residents especially hard. Several factors are complicating the issue for states. Congress passed its tax overhaul late in the year and with minimal debate, giving states relatively little time to assess the effects and plan a response. Even now, the full impact on state budgets is not clear, meaning legislatures are deciding how to take advantage of a revenue stream that could fall short of estimates. In addition, most of the changes to the individual tax code expire after several years, further muddling states’ plans. Moreover, the tax debate is hitting as state budgets are strained by rising health care and pension costs, among other factors. Those strains could worsen in coming years if the federal government cuts back funding — perhaps because of deficits caused, in part, by the tax law itself.

Thousands of people in Sweden get microchip implants for a new way of life

Small implants were first used in 2015 in Sweden and since then people have become active in

It’s the size of a grain of rice but could hold the key to many aspects of your life.A tiny microchip inserted under the skin can replace the need to carry keys, credit cards and train tickets. That might sound like an Orwellian nightmare to some but in Sweden it is a welcome reality for a growing number who favour convenience over concerns of potential personal data violations. The small implants were first used in 2015 in Sweden – initially confidentially – and several other countries. Swedes have gone on to be very active in microchipping, with scant debate about issues surrounding its use, in a country keen on new technology and where the sharing of personal information is held up as a sign of a transparent society. In the past year, the chip has turned into a kind of electronic handbag. Sweden’s SJ national railway company has won over some 130 users to its microchip reservation service in a year.

Conductors scan passengers’ hands after they book tickets online and register them on their chip. Sweden has a track record on the sharing of personal information, which may have helped ease the microchip’s acceptance among the Nordic country’s 10 million-strong population.

Citizens have long accepted the sharing of their personal details, registered by the social security system, with other administrative bodies, while people can find out each others’ salaries through a quick phone call to the tax authority. The implants use Near Field Communication (NFC) technology, also used in credit cards, and are “passive”, which means they hold data that can be read by other devices but cannot read information themselves. Although still small, they have the capacity to hold train tickets, entry pass codes as well as access certain vending machines and printers, promoters say. “At the moment, the data collected and shared by implants is small, but it’s likely that this will increase,” the researcher said.. “In Sweden, people are very comfortable with technology and I would say there is less resistance to new technology here than in most other places,” Libberton said. Nick Note: Talk about the mark of the beast where people canot buy, sell or trade without it. Dangerous stuff!!

North Korea says that it will dismantle its nuclear test site this month

Screenshot of Mount Mantap, the location of North Korea’s nuclear test sit Image: Google Maps

North Korea’s official news agency has reported that the country has scheduled the demolition of the Punggye-ri nuclear test site ahead of talks with the United States next month. Reuters reports that official Korean Central New Agency says that the site will be decommissioned between May 23rd and 25th, which would include “collapsing all of its tunnels with explosions, blocking its entrances,” and shutting down all of its observation and security facilities. The announcement comes ahead of scheduled talks between US President Donald Trump and DPRK Supreme Leader Kim Jong Un in Singapore on June 12th. State media says that foreign journalists will be invited to witness the decommissioning.  When North Korea tested a nuclear device on September 3rd, 2017, the explosion sent vibrations shuddering through the Earth. About 45 minutes later, a ringing phone in Vienna, Austria, woke seismologist Ezekiel Jonathan just as the sun was beginning to rise. In April, North Korea said that it would pause its nuclear program, although experts weren’t convinced that it was a significant move: the country had halted its missile testing program between 1999 and 2006, and had shuttered and restarted the plant used to produce plutonium. Experts also noted that it’s possible that Kim Jong-Un could be pleased with success of the program, meaning that no further testing is needed. Others noted that the declaration made for good propaganda in advance of the upcoming talks. The country conducted six nuclear tests between 2006 and September 2017, and claimed that final test was a hydrogen bomb. That blast was the largest conducted by the country, and was so powerful that it dropped Mount Mantap by about a foot and a half and pushed it 12 feet sideways. Given the power of that blast, it’s entirely possible that that test could have rendered the test site useless, meaning that it’s possible that the country isn’t giving up anything by publicly dismantling it.  Nick Note: Its amazing are people that stupid? Lets see if we can suss this out. You dig a mine shaft under a mountain. And you then put at the bottom of that shaft a thermal nuclear weapon. You blow up the mountain. Its collapsing and highly radioactive. Then you tell President Einstein hell yes we will “dismantle”  the implode mountain that is now a radiation death zone and about to collapse releasing a radioactive dust cloud.. And said President call that progress to HA HA HA nuclear Dismantlement. Trump does not care as long as he get the press coverage and a peace prize from that plastic explosive company.. Holy Shit! hello the sight has been destroyed their is nothing left and nothing to dismantle. Maybe they can roll up some of the test sensor  cable that was not melted…… .I know maybe he can partner with Trump JR. And build a golf course on the radioactive ruble.

Bloomberg warns of ‘endless barrage of lies’ in politics

Former Mayor Michael Bloomberg warned Saturday that the worst threat facing the country isn’t terrorism or communism – it’s “an epidemic of dishonesty.” The billionaire – who has called President Trump a “con” and a “dangerous demagogue” – cautioned that “an endless barrage of lies” and “alternate realities” in national politics endanger U.S. democracy. The comments came during a commencement speech at Rice University in Texas “This is bigger than any one person. It’s bigger than any one party,” Bloomberg told The Associated Press in an interview before the speech, refusing to comment on Trump’s own relationship with the truth. The 76-year-old businessman recalled the myth about the first U.S. president in which a young George Washington, caught cutting down a cherry tree, said he could not tell a lie. “How did we go from a president who could not tell a lie to politicians who cannot tell the truth?” Bloomberg asked Rice grads, calling out both Democrats and Republicans without naming specific pols. The wealthy exec, who flirted with a 2016 presidential run, told graduates and their families in Houston that when elected officials talk as if they’re above the truth, they’ll act like they’re above the law. “The greatest threat to American democracy isn’t communism, jihadism or any other external force or foreign power,” he said. “It’s our own willingness to tolerate dishonesty in service of party, and in pursuit of power.”

Conoco authorized to seize $636 million in Venezuela PDVSA assets

WILLEMSTAD Reuters – – A Curacao court has authorized ConocoPhillips (COP.N) to seize about $636 million in assets belonging to Venezuela’s state oil company PDVSA due to the 2007 nationalization of the U.S. oil major’s projects in Venezuela.A general view shows the Isla refinery in Willemstad on the island of Curacao, April 22, 2018. REUTERS/Andres Martinez Casares  The legal action was the latest in the Caribbean to enforce a $2 billion arbitration award by the International Chamber of Commerce (ICC) over the nationalization.

The court decision, first reported by Caribbean media outlet Antilliaans Dagblad on Saturday, says Curacao can attach “oil or oil products on ships and on bank deposits.”

Conoco and PDVSA [PDVSA.UL] did not immediately respond to requests for comment on the decision, which was seen by Reuters and dated May 4. Conoco earlier this month moved to temporarily seize PDVSA’s assets on Aruba, Bonaire, Curacao and St. Eustatius. That threw Venezuela’s oil export chain into a tailspin just as Venezuela’s crude production has crumbled to a more than 30-year low due to underinvestment, theft, a brain drain and mismanagement. Reuters reported on Friday that PDVSA was preparing to shut down the 335,000 barrel-per-day Isla refinery it operates in Curacao amid threats by Conoco to seize cargoes sent to resupply the facility. PDVSA is also seeking ways to sidestep legal orders to hand over assets. The Venezuelan firm has transferred custody over the fuel produced at the Isla refinery to the Curacao government, the owner of the facility, according to two sources with knowledge of the matter. PDVSA transferred ownership of crude to be refined at Isla to its U.S. unit, Citgo Petroleum, one of the sources said. For the time being, PDVSA has suspended all oil storage and shipping from its Caribbean facilities and concentrated most shipping in its main crude terminal of Jose, which is suffering from a backlog.

Report: DHS Secretary Nielsen ‘Implored’ Not to Quit by John Kelly As Illegal Immigration Skyrockets

In a cabinet meeting attended by advisers Stephen Miller, Kellyanne Conway, Ivanka Trump, Jared Kushner, Larry Kudlow, and Sarah Huckabee Sanders, Trump blasted Nielsen for failing to secure the southern border, the Washington Post reports:

Trump lashed out at his Cabinet, and Nielsen in particular, when told that the number of people arrested for illegally crossing the Mexico border topped 50,000 for the second consecutive month. The blowup lasted more than 30 minutes, according to a person with knowledge of what transpired, as Trump’s face reddened and he raised his voice, saying Nielsen needed to “close down” the border. [Emphasis added]

“Why don’t you have solutions? How is this still happening?” he said, adding later, “We need to shut it down. We’re closed.” [Emphasis added]

Indeed, border crossings have continued to soar under Nielsen’s direction at DHS. For example, as Breitbart Texas reported, border crossings in March approached Obama-era levels of illegal immigration at the border. Last month, border crossings continued to increase, with nearly 40,000 illegal aliens crossing the border. The increase in border crossings, coupled with a caravan of Central Americans which stormed the southern border, has reportedly created tensions between Nielsen and Trump. As Breitbart News reported, Nielsen allegedly almost quit after being blamed for not securing the border, though DHS officials say the claim is untrue. A separate report, however, by Fox News’s John Robert, reveals that Trump’s Chief of Staff John Kelly had to call Nielsen following the meeting to ask her not to quit.

While Trump and Attorney General Jeff Sessions have taken tough approaches to illegal immigration and the caravan, Nielsen in her most recent testimony before Congress begged asylum-seekers to use the ports of entry to enter the U.S. legally, a move that experts say was a “colossal mistake.” “If you are fleeing and you have a need to come to the United States, please come to the ports of entry. You — you — you know, we will process your claim there,” Nielsen said. But if you come across the border illegally, you’ve — you’ve broken the law and we have to prosecute. It’s the only way to keep our border — to have a border.”  Nielsen formerly worked for President George W. Bush, when thousands of illegal aliens were allowed to enter the U.S. after Hurricane Katrina to take coveted blue-collar jobs. Nielsen also previously authored a report promoting mass immigration as a win for big business.

Iran nuclear deal: Europe strives to keep agreement

Image copyright AFP Image caption Iranians have been demonstrating against the US decision

A flurry of diplomatic activity is under way to rescue the Iran nuclear deal after President Donald Trump’s decision to withdraw the US from it and bring back sanctions against Tehran. German Chancellor Angela Merkel spoke with President Putin of Russia, and UK PM Theresa May has talked to Mr Trump. French ministers have been loudest in their complaints that major European businesses will be hit hard as US sanctions are re-imposed. Mr Trump says the deal is “horrible”. Among his concerns are that restrictions on Iran’s nuclear programme are due to expire and the deal does not address Iran’s ballistic missile programme or its regional influence. On Tuesday Mr Trump honoured an election pledge to scrap US participation in the 2015 accord. Sanctions will be re-imposed in two stages in August and November. Under the agreement Iran undertook to curb nuclear activities in return for the lifting of sanctions. The deal, negotiated by the US, three European Union powers, Russia and China, was designed to prevent Iran developing atomic weapons – something it has always denied trying to do. The agreement is still seen by the non-US signatories as the best way of preventing Iran from becoming a nuclear power, though they concede it is not perfect. The Europeans also stand to lose billions of dollars of business when US sanctions return.A deal by the European plane-manufacturer, Airbus, to sell nearly 100 planes to Iran is now in danger. Some parts used in the planes are made in the US.  Big French firms such as energy giant Total and car-makers Renault and Peugeot also have investments in Iran. Both France and Germany have seen a sharp rise in exports to Iran since sanctions were lifted in 2016. France has condemned the re-imposition of sanctions as “unacceptable”. Economy Minister Bruno Le Maire said Europe had to defend its “economic sovereignty”.

“Do we want to be vassals deferring with a curtsy and a bow to decisions made by the US?” he asked.

Mr Le Maire called on the European Commission to look into possible retaliatory measures. But both Mr Le Maire and his German opposite number, Olaf Scholz, are also speaking to US Treasury Secretary Steven Mnuchin to seek exemptions for European companies. Mrs May spoke on the phone to Mr Trump to tell him that Europe remained “firmly committed” to the deal, according to Downing Street. Both leaders agreed on the need for talks on how sanctions would affect foreign companies trading with Iran. Russian President Vladimir Putin has spoken with Mrs Merkel and Turkey’s Recep Tayyip Erdogan about the deal, the Kremlin said. Keeping it alive “is something we need to discuss with Iran,” Mrs Merkel has said. She said scrapping the accord unilaterally damaged trust in the world order. Iranian Foreign Minister Mohammad Javad Zarif is to visit China, Russia and Brussels, starting on Saturday.

Trump Assails High Drug Prices, Avoids Direct Hit on Industry

Image: Trump Assails High Drug Prices, Avoids Direct Hit on Industry
President Donald Trump speaks during an event about prescription drug prices with Health and Human Services Secretary Alex Azar in the Rose Garden of the White House in Washington on May
U.S. President Donald Trump on Friday blasted drugmakers and healthcare “middlemen” for making prescription medicines unaffordable for Americans, but healthcare stocks rose as his administration avoided aggressive direct measures to cut prices.Trump made the remarks at the White House Rose Garden in a speech to introduce what he called “the most sweeping action in history” to lower drug prices. The effort comes as a growing number of Americans struggle with the cost of their medications, and cite healthcare concerns as a top priority for Washington ahead of congressional elections in November.

Trump said his administration would take aim at the “middlemen” in the drug industry who became “very, very rich,” an apparent reference to health insurers and pharmacy benefit managers (PBMs). He also said the pharmaceutical industry is making an “absolute fortune” at the expense of American taxpayers.”Everyone involved in the broken system – the drugmakers, insurance companies, distributors, pharmacy benefit managers, and many others – contribute to the problem,” Trump said. Trump campaigned on lowering prescription drug prices ahead of the 2016 presidential election, even accusing drugmakers of “getting away with murder.” Healthcare investors had braced for months for more direct attempts to regulate U.S. prices that would cut into industry profits. But Trump has since abandoned ideas to lower drug costs he supported during the campaign, including allowing the government’s Medicare plan for older Americans to negotiate prices directly with drugmakers, and enabling U.S. consumers to import lower-cost medicines from other countries. On Friday, Trump’s senior health officials outlined more modest policy proposals to introduce more competition among drugmakers and pass on savings to consumers. Critics said the policies pointed to the influence the pharmaceutical industry wields with the administration.

“I think very expensive champagne will be popping in drug company boardrooms across the country tonight,” said Democratic Representative Elijah Cummings.

Senator Ron Wyden, also a Democrat, said the proposals “amount to asking drug companies nicely to lower their prices with zero accountability.” Shares of major drugmakers, insurers and PBMs rose after the speech. The S&P 500 healthcare index, a broad gauge of large healthcare stocks, closed up 1.5 percent, its biggest single-day percentage gain in a month. “The plan was a lot less aggressive than investors expected,” wrote Alex Arfaei, analyst at BMO Capital Markets. The U.S. Food and Drug Administration would evaluate requiring drugmakers to include the list prices they set on medicines in their advertising. Drugmakers argue that list prices do not reflect actual cost after discounts and rebates.

 “There’s not a big proposal here that is going to make a huge difference. There are a bunch of smaller technical changes,” said Sam Richardson, Associate Professor of Economics at Boston College.

Regarding forcing other countries to pay more for drugs, Richardson said: “We don’t really have the policy levers to get that to happen.”

Rudy Giuliani says Trump “denied” AT&T-Time Warner merger

President Trump’s attorney Rudy Giuliani told HuffPost Friday that Mr. Trump “denied the merger” between AT&T and Time Warner, which contracits the White House and the Department of Justice earlier statements that the president was not involved. Giuliani’s comments come after it was revealed AT&T’s senior executive vice president of external and legislative affairs, Bob Quinn, was involved in agreeing to pay Cohen a reported $600,000 for what the company called “insights” into the Trump administration’s positions on telecom regulation, tax reform and other issues. “Whatever lobbying was done didn’t reach the president,” Giuliani told HuffPost. “He did drain the swamp … The president denied the merger. They didn’t get the result they wanted.” AT&T CEO Randall Stephenson said Friday that hiring Cohen was a “big mistake.”  Mr. Trump vowed during the 2016 campaign to stop the merger, but Mr. Trump’s adviser Kellyanne Conway told CBS News last year the White House isn’t involved in the Justice Department’s antitrust review of the merger. An official in the agency’s antitrust division also said the White House was not directed it on how to proceed on the transaction. The Department of Justice in November sued to stop AT&T’s proposed $85.4 billion acquisition of Time Warner, saying the merger would harm competition, lessen innovation and result in higher costs for consumers.  Giuliani wasn’t part of Mr. Trump’s team at the time, so it’s unclear how he would know if there was any involvement by Mr. Trump.  Former federal prosecutor Renato Mariotti tweeted Friday that this was “major news” if Giuliani “didn’t misspeak.”

Giuliani gave two other interviews on Friday. Giuliani told The Associated Press on Friday that any preparation with Mr. Trump for a possible interview with federal investigators would likely be delayed until after the June 12 summit in Singapore because “I wouldn’t want to take his concentration off something far, far more important.”  Giuliani said the question of the interview would be resolved by May 17, the one-year anniversary of special counsel Robert Mueller’s appointment, but “several things delayed us, with the primary one being the whole situation with North Korea.” “The president has been very busy,” Giuliani said. “It really would be pretty close to impossible to spend the amount of time on it we would need.”   Giuliani also suggested to the AP that special counsel Mueller’s team indicated it would not attempt to indict Mr. Trump.

Why would Kim Jong-un trust Trump now he’s ripped up Iran’s nuclear deal?

Pushing Tehran into Beijing’s embrace seems like another example of the Donald “Making China Great Again”
US Secretary of State Mike Pompeo with North Korean leader Kim Jong-un in Pyongyang. Photo: AP

An isolated “rogue regime” with a horrendous human rights record destabilises the region, supports terrorism and embarks on a dangerous nuclear programme. The world community bands together to impose crippling economic sanctions. The regime finally relents and agrees to halt its nuclear ambitions in exchange for foreign investment, trade and recognition.If that sounds like the ideal scenario for corralling North Korea’s nuclear weapons programme, it is.And if you are looking for a successful template somewhere in the world, yes, there is one: Iran, which in 2015 agreed to suspend its nuclear programme in exchange for sanctions relief. The Iran nuclear agreement could have provided the road map for the US to strike a deal to end the conflict on the Korean peninsula, just before Donald Trump is set to meet Kim Jong-un in the first ever face-to-face summit between the leaders of America and North Korea The trouble is that Trump, making good on a campaign pledge, just ripped up the road map, and now he’s driving blind, in the dark and seemingly without a compass, over the objections of America’s European allies as well as Russia and China. He has tossed out the only working model for what a North Korea deal might look like. At the most basic level, Trump first wanted to abrogate the Iran deal because it was the top foreign policy achievement of his predecessor, and this president has shown, if nothing else, that he is determined to uproot and dismantle all things associated with Barack Obama. From health care to environmental regulations to the Trans-Pacific Partnership trade pact, if Obama backed it, it has to be bad. Thus, the Iran deal was not just flawed; it was “horrible”, “rotten” and “the worst deal in history”. Second, the hawks who have now seized control of the American foreign policy establishment, backed by Israel’s pro-war Prime Minister Benjamin Netanyahu, have long hated the Iran deal because it mandated only a 10- to 15-year moratorium on Iran’s nuclear research and uranium enrichment. According to this view, Iran was only biding its time and rebuilding its economy while waiting patiently before it achieves a nuclear breakout in the next decade. Others, mostly on the conservative right, condemned the deal because it only dealt with Iran’s nuclear programme, ignoring questions about Tehran’s support for terrorist groups like Hamas and Hezbollah, its ballistic missiles, its meddling in Iraq, Yemen and Syria, and its near-pathological hostility toward Israel and the West (with “death to America” a refrain at every Iranian rally). And finally, pro-war fringe figures such as John Bolton, the new national security adviser who has rarely seen a country he didn’t want to bomb, have one ultimate goal in mind – regime change. In this dystopian, Boltonesque world view, any deal with Iran is a bad deal because America’s long-term endgame should be toppling the mullahs by force; spare the talks and start revving up the B-52s.



Negotiators fail to reach NAFTA deal, Trump launches new attack

Canadian Foreign Minister Chrystia Freeland speaks to reporters after talks with senior U.S. legislators on Capitol Hill in Washington, DC, U.S., May 10, 2018. REUTERS/David Ljunggren

WASHINGTON (Reuters) – Senior American, Canadian and Mexican officials on Friday ended a week of talks without a deal to modernize NAFTA, agreeing instead to resume negotiations soon, ahead of a deadline next week issued by U.S House of Representatives Speaker Paul Ryan.

The failure to secure a quick deal underscores uncertainty over the North American Free Trade Agreement, which U.S. President Donald Trump on Friday said “has been a horrible, horrible disaster for this country.”

Trump, who blames the 1994 pact for U.S. manufacturing job losses to lower-cost Mexico, often threatens to walk away unless the other two member countries agree to major changes. After meeting for barely half an hour on Friday, the top Mexican and Canadian politicians involved in the talks to update the agreement made it clear that big differences remained.Canadian Foreign Minister Chrystia Freeland said officials would continue working in Washington while ministers returned home for consultations.  “We plan to meet again as needed, which I think will be soon. … The negotiation will take as long as it takes to get a good deal,” she told reporters after the meeting. Pressure to reach a deal increased this week after Speaker Ryan said he needed to be notified of a new NAFTA by May 17 to give the current Congress a chance of passing it.  U.S. Trade Representative Robert Lighthizer has said he wants a deal in place soon to avoid potential political problems stemming from Mexico’s July 1 presidential vote and U.S. midterm congressional elections in November. In a statement, Lighthizer said the United States was ready to continue working with Mexico and Canada but made no mention of a deadline. Friday’s talks were the first involving all three of the top officials in the NAFTA negotiations – Freeland, Mexican Economy Minister Ildefonso Guajardo and Lighthizer – since the latest round started on Monday.Mexico has not agreed to a U.S. proposal to boost North American content for autos made in the NAFTA region, one of the main sticking points. Guajardo said his team tried hard during the week to bridge the gap.  “We’re not going to sacrifice the quality of an agreement because of pressure of time,” he said. Financial markets are nervous about the damage a U.S. withdrawal could inflict on the highly integrated North American economy. Canada’s central bank governor and other policymakers complain that uncertainty over the pact is hitting business investment. Guajardo, who wants to reach an agreement on all the principal aspects of a modernized NAFTA before sealing a new deal, says plenty of other issues were outstanding. Drafting new rules of origin governing what percentage of a car needs to be sourced from the NAFTA region to avoid tariffs has been at the center of the talks. It forms a key plank of the Trump administration’s aim to boost jobs and investment in the United States. Officials and industry sources say the three sides have been gradually narrowing their differences on autos. However, several other major issues are still unresolved, including U.S. demands for a sunset clause that would allow NAFTA to expire if it is not renegotiated every five years, and elimination of settlement panels for trade disputes.

Trump breaks key populist campaign promise to negotiate Medicare drug prices

“If we have to bid out pharmaceuticals, we’re bidding them out. We’re going to save billions and billions and billions of dollars.”


On the campaign trail, candidate Trump promised to save hundreds of billions of dollars standing up to the pharmaceutical industry, and said he’d “negotiate like crazy” to bring down Medicare prescription drug prices. Allowing Medicare to negotiate directly with drug companies for better prices has long been a goal for progressives, and when voters heard Trump stray from the Republican party orthodoxy, railing against Big Pharma as he asked for their support, many likely thought his promises would mean something different in Washington, D.C. if he were elected president. Sadly, they were wrong The people who elected Trump expect him to come through. Ahead of the Friday speech announcing the plan, senior administration officials told reporters that “we are not calling for Medicare negotiation in the way that Democrats have called for,” instead characterizing Trump’s plan as outlining “important changes that will dramatically improve the way negotiation takes place inside the Medicare program.”

EXCLUSIVE: Special counsel probing donations with foreign connections to Trump inauguration

Special counsel Robert Mueller’s team has questioned several witnesses about millions of dollars in donations to President Donald Trump’s inauguration committee last year, including questions about donors with connections to Russia, Saudi Arabia, the United Arab Emirates and Qatar, sources with direct knowledge told ABC News. Those interviewed included longtime Trump friend and confidant Thomas Barrack, who oversaw the fundraising effort, as well as individuals familiar with the massive inaugural fund, according to sources with direct knowledge. Barrack, a real estate investor, has long been described as a Trump “whisperer” whose close friendship with the president landed him a prime appearance during the GOP convention the night Trump accepted his party’s nomination. The billionaire runs a fund with hundreds of millions in real estate and private equity holdings in the Middle East. Barrack oversaw the largest inaugural fundraising effort in U.S. history, bringing in $107 million – more than double what President Barack Obama raised for his first swearing-in festivities. According to a source who has sat with the Mueller team for interviews in recent weeks, the special counsel is examining donors who have either business or personal connections in Russia, Saudi Arabia, the United Arab Emirates and Qatar. Several donors with those ties contributed large sums to the non-profit fundraising entity – gifts that topped out at $1 million dollars, according to public records. Special counsel investigators have also asked witnesses about specific inauguration donors, including American businessmen Leonard Blavatnik, and Andrew Intrater, according to sources familiar with the Mueller sessions. Blavatnik is a billionaire with dual U.S. and British citizenship who has extensive business ties in Russia. Blavatnik gave $1 million to the inaugural fund through his company, Access Industries, according to FEC records. Companies are prohibited from giving donations to political candidates, however, donations to inaugural committees are not considered donations to candidates. Intrater, an American relative and business associate of Russian billionaire Viktor Vekselberg, runs a U.S. company with deep ties to Vekselberg’s Russia-based global conglomerate, Renova Group. Renova was recently sanctioned by the U.S. Treasury Department. Intrater serves as the CEO of Columbus Nova, an investment company based in New York. FEC records show Intrater made a $250,000 donation to the Trump inauguration committee in early January 2017. Following the donation, he and Vekselberg attended Trump’s inauguration, according to published reports. Also in 2017, Intrater made two more donations to the Trump orbit including a $35,000 to Trump Victory, the joint fundraising committee for the Trump campaign and Republican party, plus a separate $29,600 donation directly to the Republican National Committee, according to FEC records.

Exclusive: AT&T CEO says Cohen payments ‘big mistake,’ chief lobbyist retiring


FILE PHOTO: Chief Executive Officer of AT&T Randall Stephenson arrives at a U.S. District Court in Washington, D.C., U.S. April 19, 2018. REUTERS/Carlos Barri

(Reuters) – Hiring President Donald Trump’s personal attorney, Michael Cohen, was a “big mistake,” AT&T Inc Chief Executive Officer Randall Stephenson said in an employee memo, reviewed by Reuters, that went out Friday morning. AT&T’s head lobbyist, Bob Quinn, who oversaw the hiring of Cohen, is retiring, according to the memo.AT&T said on Tuesday it had hired Essential Consultants LLC, a company used by Cohen, to advise it on working with the new administration in early 2017, around the time of Trump’s inauguration. The disclosure of AT&T’s relationship with Cohen has turned into a major embarrassment for the telecommunications company as it awaits a U.S. judge’s June 12 decision on whether it can go through with an $85 billion deal to buy Time Warner Inc. U.S. President Donald Trump’s personal lawyer Michael Cohen arrives at his hotel in New York City, U.S., May 9, 2018. REUTERS/Brendan McDermid The deal, which was announced in October 2016, was quickly denounced by Trump, who has been sharply critical of CNN, a unit of Time Warner. “To be clear, everything we did was done according to the law and entirely legitimate,” Stephenson wrote in the memo. “But the fact is our past association with Cohen was a serious misjudgment.” AT&T did not hire Cohen to lobby on behalf of the company, according to the memo. The one-year contract at $50,000 per month, from January through December 2017, was limited to consulting and advisory services, according to the memo. AT&T never asked Cohen to set up meetings for the company with anyone in the Trump administration, and he did not offer to do so, according to the memo. AT&T’s board of directors does not hold Stephenson responsible for the lack of vetting, according to a source familiar with the situation. The AT&T payments were revealed by Michael Avenatti, adult film actress Stormy Daniels’ lawyer, who also said a company owned by Russian oligarch Viktor Vekselberg and other corporations paid Essential Consultants for certain services. Essential Consultants paid $130,000 to Daniels, whose real name is Stephanie Clifford, days before the 2016 presidential election as part of a nondisclosure agreement that barred her from discussing an alleged sexual encounter with Trump. He denies any encounter took place.

Spoiled Relations: U.S. Goods Stuck at China Ports as Tensions Heat Up

Fruits are at risk of rotting, while Ford vehicles may now need to be disassembled for Chinese customs officials

Fresh sweet cherries pictured in Washington, D.C.
Fresh sweet cherries pictured in Washington, D.C. Photo: Zuma Press

Ford cars and California fruits are among the goods piling up at Chinese ports, the result of increased inspections that business groups say is China’s way of reminding the U.S. how important its market is to American exporters. Navel oranges, lemons and cherries from California, along with American apples, have been sitting at Chinese wharves for longer than normal as Chinese inspectors spend more time inspecting the fruits for pests and decays, U.S. trade groups said. Ford Motor Co. vehicles are likewise being subjected to unusually rigorous checks at the port, people familiar with the matter said. Pork is also coming under more frequent inspections, U.S. officials say, as U.S.-China trade tensions show no signs of easing.The Chinese “are trying to identify industries or sectors that could put pressure on the administration to change its posture,” said Joel Nelsen, president of trade association California Citrus Mutual. He said inspectors are opening and sifting through most of the 900 cartons of citrus fruit in each shipping container.  William Zarit, chairman of the American Chamber of Commerce in China, said China appears to be following a tried-and-true playbook.“China basically speaks with one voice on trade. It’s not that difficult for the (Communist) party to send out an order and it will happen very quickly—and for the most part, systematically and consistently,” Mr. Zarit said. Last year, amid tensions about South Korea’s deployment of a U.S.-built missile-defense system, China stopped sending tour groups to the country and sales of Hyundai Motor Co. cars in China plummeted. China at one time imposed curbs on imports of Philippine bananas over rival territorial claims in the South China Sea. China’s General Administration of Customs didn’t immediately respond to a request for comment. Geng Shuang, a Foreign Ministry spokesman, said he wasn’t aware of any effort to restrict U.S. imports. “In principle,” Mr. Geng said Thursday, “China carries out relevant inspection and quarantine work in accordance with laws and regulations following a scientific and unbiased method.” Fruit is an easy target in a trade dispute as its passage through customs can easily be delayed on health and safety grounds, an official at a southern Chinese port said. China’s customs agency said Monday it would start strengthening quarantine inspections on U.S. apples and timber after claiming to have found pests in some recent shipments. Before last week, U.S. cherries could pass through such quarantine inspections in a matter of hours, said Keith Hu, director of international operations at Northwest Cherry Growers in Washington state. Mr. Nelsen, of California Citrus Mutual, said oranges and lemons would typically take a couple of days to clear the reviews. Now the process is, in some cases, taking five to seven days.

Cohen, touting his access to President Trump, convinced companies to pay millions

Trump warns Iran: ‘Don’t restart your nuclear weapons program’

“I would advise Iran not to start their nuclear program. I would advise them very strongly. If they do, there will be very severe consequence,” Trump said.
US President Donald Trump
U.S. President Donald Trump gestures while addressing a joint news conference with Nigeria’s President Muhammadu Buhari in the Rose Garden of the White House in Washington, US,

US President Donald Trump warned Iran on Wednesday there will be severe consequences if it restarts its nuclear weapons program. In a conversation with reporters in Washington before a cabinet meeting, Trump said he believes Tehran will eventually renegotiate the 2015 nuclear deal with the six world powers.

“I would advise Iran not to start their nuclear program. I would advise them very strongly. If they do, there will be very severe consequence,” he said.
The president spoke one day after he announced America’s withdrawal from the Iran deal and the reimposition of US sanctions on Tehran.  “Iran will come back and say, ‘We don’t want to negotiate.’ And of course, they’re going to say that. And if I were in their position, I’d say that, too, for the first couple of months, ‘We’re not going to negotiate,’” Trump said. “But they’ll negotiate, or something will happen. And hopefully that won’t be the case,” he said. The sanctions the US will place on Iran are the strongest it has ever issued against any country, Trump said. These sanctions are “going into effect very shortly. They’re mostly constituted and drawn already.” This is “a deal to hurt the world and, certainly, Israel. You saw Benjamin Netanyahu get up yesterday and talk so favorably about what we did,” he said. “We’re going to make either a really good deal for the world, or we’re not going to make a deal at all,” Trump said. US National Security Adviser John Bolton told CBS News the hope is that the sanctions will be so crippling that Tehran will be forced to give up its ballistic missiles program. The Islamic Republic has increased spending on its ballistic missile program, which is not covered by the deal, Bolton said. It needs these missiles for a nuclear weapons program, he added. Iran’s Supreme Leader Ayatollah Ali Khamenei blasted the US on Wednesday, charging that it is untrustworthy and that it had been a mistake for his country to enter into the 2015 agreement.
“From day one, I said several times that the United States is not to be trusted. I said it publicly and privately. I said if you want to sign an agreement, first make sure that necessary guarantees are made,” Khamenei said. “What happened is a foul play on the part of the United States, and it does not surprise us,” he said during a speech he gave in Tehran. An English translation of his speech was published on his webpage. The issue, he said, is not Iran’s nuclear weapons program but rather the persistent American animosity toward his country.

THE EU-3 COUNTRIES – France, Germany and the United Kingdom – hope they can sway Iran to remain in the 2015 Joint Comprehensive Plan of Action. Under the terms of the JCPOA, Tehran agreed to curb its nuclear program in exchange for an agreement from the six world powers that they would lift their economic sanctions. Russia and China are also signatories to the deal and, like the EU-3, have no interest in ending it.

Michael Avenatti claims Michael Cohen received payments from firm controlled by Russian oligarch

Michael Avenatti, the lawyer for adult film actress Stormy Daniels, claims to have evidence of a series of payments made to a bank account in Trump lawyer Michael Cohen’s name – including from a company linked to a Russian oligarch and two major corporations, AT&T and Novartis. CBS News has not been able to verify the allegations by Avenatti. Michael Cohen did not respond to CBS News’ requests for comment.  The New York Times said in a report Tuesday night that its own review of unspecified financial records “confirmed much of what was in Mr. Avenatti’s report.”  The Associated Press said financial documents it reviewed “appeared to back up Avenatti’s report.”Avenatti, who has been aggressively pursuing Cohen and President Trump, laid out the claims in a 7-page memo Tuesday evening.  Cohen established a corporation called Essential Consultants LLC in October 2016, just weeks before the presidential election, according to Avenatti. Essential Consultants then opened a bank account at First Republic Bank. It was from this account that a $130,000 payment to a representative of Stormy Daniels was made, according to Avenatti. The question Avenatti claims to answer is where that and other money ultimately came from. He points to a series of alleged payments, including  $500,000 from an American investment firm linked to Russian oligarch Viktor Vekselberg, who was made a target of U.S. sanctions last month.  According to a statement given to The Washington Post, the investment firm, Columbus Nova, said it retained Cohen as a consultant “regarding potential sources of capital and potential investments in real estate and other ventures.” But it said Vekselberg was not involved with hiring or paying Cohen. Columbus Nova is affiliated with the Renova Group, which is controlled by Vekselberg. Vekselberg and the Renova Group issued a statement to CBS News early Wednesday saying, “Neither Victor Vekselberg nor Renova Group has ever had any contractual relationship with Mr. Cohen or Essential Consultants. As to relationship between Columbus Nova and Mr. Cohen, you have to ask Mr. Andy Intrater, because Columbus Nova is a company owned and managed by him.” Intrater is Vekselberg’s cousin, according to the Reuters news agency. Avenatti also listed other payments: $399,920 from Novartis, a Swiss pharmaceutical company; $150,000 from Korea Aerospace Industries; and $187,500 from Elliott Broidy, a former deputy finance chairman of the Republican National Committee. According to Avenatti, AT&T paid Cohen’s company a total of $200,000 over a series of four payments of $50,000, dating from 2017 to early this year, though AT&T did not confirm the figure.  In a statement Tuesday, AT&T said it had paid Cohen’s company, Essential Consulting, “to provide insights into understanding the new administration.”   In the statement, AT&T said: “Essential Consulting was one of several firms we engaged in early 2017 to provide insights into understanding the new administration. They did no legal or lobbying work for us, and the contract ended in December 2017.” AT&T announced a bid to acquire Time Warner in October 2016, a deal that Mr. Trump was quick to speak out against. The Department of Justice filed suit to block the merger in November 2017 – a ruling is due this June.  It’s unclear where Avenatti got these documents. Noah Shachtman, executive editor of The Daily Beast, said he had confirmed the payments. Shachtman told CBSN his source wondered aloud to him, “How the f did Michael Avenatti find out about this?” Schachtman said he believed this would be a “big question.”

Jubeir: Saudi Arabia will seek nuclear weapon if Iran does

Foreign Minister Adel al-Jubeir made the statement during his interview with CNN. (Al Arabiya) AFP

Asked whether Riyadh would “build a bomb itself” if Tehran seizes on Washington’s withdrawal from the 2015 Iran deal to resume a nuclear weapons program, Jubeir said: “If Iran acquires nuclear capability we will do everything we can to do the same.” Saudi Arabia has long said it would match any Iranian weapons development, but Jubeir’s renewed vow came after US President Donald Trump pulled the United States out of an accord designed to prevent Tehran’s alleged quest for the bomb. And it came amid growing tension over Iran’s support for the Houthi rebels in Yemen, who have been firing rockets across the border. Riyadh, which is part of a regional coalition that intervened in Yemen’s civil war to fight the Houthis, accuses Iran of supplying the militia with ballistic missiles. “These missiles are Iranian manufactured and delivered to the Huthis. Such behavior is unacceptable. It violates UN Resolutions with regards to ballistic missiles. And the Iranians must be held accountable for this,” Jubeir told CNN. “We will find the right way and at the right time to respond to this,” he warned. “We are trying to avoid at all costs direct military action with Iran, but Iran’s behavior such as this cannot continue. This amounts to a declaration of war.”

Louisiana to warn thousands of elderly, disabled they may lose Medicaid

Louisiana to warn thousands of elderly, disabled they may lose Medicaid
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Louisiana is reportedly set to tell tens of thousands of elderly and disabled residents this week that they may lose Medicaid benefits in the coming months. The state Health Department is preparing to notify 37,000 people that due to state budget cuts eliminating four Medicaid programs, they could lose their health-care coverage, including beds in nursing homes. Louisiana’s chief budget officer, Jay Dardenne, told The New Orleans Times-Picayune that officials “tried to delay this as long as we possibly can.” “We can’t just afford to bury our heads in the sand,” Dardenne said. The state Senate has not yet voted on a budget, and there are other measures that could delay the cuts, including intervention from the federal government, according to the paper, but the state is required to send out the notices in advance. The proposed cuts, pushed by GOP House leaders, could result in most of the state’s nursing homes closing, eliminating thousands of jobs. The notifications themselves may also be financially detrimental to nursing homes, industry leaders told the Times-Picayune. And notifying residents of the proposed cuts will cost the state $50,000. Jim Tucker, a former Republican state lawmaker who runs a nursing home company, said that the notifications may cause some nursing home residents to die from the stress. “If those notices go out, they will kill people,” he said.

Goldman joins the ‘cash is king’ bandwagon amid market uncertainty

Goldman upgrades cash to overweight on a short-term basis
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Count Goldman Sachs among the major Wall Street firms that are warming up to cash amid of period of heavy uncertainty for both stocks and bonds. The investment bank upgraded the asset class to overweight on a short-term basis of three months; over the coming 12 months, on the other hand, it neither recommends buying nor selling the asset. The higher view toward cash is a move to reduce risk, wrote Christian Mueller-Glissmann, an equity strategist at Goldman Sachs. “Despite volatility settling from its highs year-to-date, conviction levels are low near-term as the growth/inflation mix has worsened and policy uncertainty remains elevated,” the note read. “Bonds have been under pressure in the U.S., while equities remain stuck in a ‘fat and flat’ range.” Goldman isn’t the first major Wall Street institution to take a more bullish view on cash, which is seen as offering little in the way of risk or rewards. In January, Morgan Stanley’s Wealth Management’s Global Investment Committee said it was “focusing more on cash as a critical asset class for 2018,” citing “this backdrop of an increasingly pricey U.S. equity market, and extremely rich credit market and rising global rates.” In 2017, Vanguard wrote that its outlook “for global stocks and bonds remains the most guarded it has been in ten years.” Both stocks and bonds have been struggling in 2018. The Dow Jones Industrial Average DJIA, +0.75%  is down 8.8% from an all-time high hit in January, while the S&P 500 SPX, +0.97%  is off by 7.2% from its own record. Both have been in their longest stretch in correction territory since the financial crisis. Separately, the yield on the 10-year U.S. Treasury Note TMUBMUSD10Y, +0.85%  has risen from 2.38% at the start of the year to 2.98% currently, and it broke above 3% last month for the first time in about four years. Yields, which move inversely to prices, are expected to continue rising as the Federal Reserve repeatedly boosts interest rates over the coming year. That is a dynamic that could result in investors dumping government bonds—pushing rates higher—in anticipation of richer coupons in the future. Goldman is bearish on fixed-income assets, giving bonds an underweight rating, the equivalent of a sell, and writing that they represent “less good hedges” against market declines in the current environment. The bank’s upgraded outlook on cash largely reflects short-term policy uncertainty, including on trade and the coming midterm elections; it retains an overweight rating on equities. “We still see bear market risk as low as growth levels are healthy and recession risk remains low,” it wrote, adding that “near-term return potential is somewhat limited.” A greater cash allocation “should help lower portfolio risk,” wrote Mueller-Glissmann. The Goldman analyst said cash was “more attractive on a relative basis” than bonds.

N. Korea’s Kim meets China’s president ahead of Trump summit


BEIJING (AP) — North Korean leader Kim Jong Un met with Chinese President Xi Jinping in a northern Chinese port city and pledged his continuing commitment to denuclearization ahead of his expected summit with U.S. President Donald Trump, state media said Tuesday. The meeting Monday and Tuesday in Dalian is the second between Xi and Kim in recent weeks, following Kim’s March visit to Beijing — his first since taking power six years ago. In comments carried Tuesday night by Chinese state media, neither leader was quoted as directly referring to either the planned Trump meeting or Kim’s summit with South Korean President Moon Jae-in late last month. However, state broadcaster CCTV quoted Xi as saying China “supports North Korea to stick to denuclearization of the Korean Peninsula and supports North Korea and the U.S. in solving the peninsula issue through dialogue and consultation.” Trump tweeted Tuesday that he planned to speak with Xi later in the day to discuss trade and North Korea, where he said “relationships and trust are building.”Kim was quoted as telling Xi that North Korea remains committed to denuclearization and has no need to possess nuclear weapons if a “relevant party” drops its “hostile policy and security threats” against it, a clear reference to the United States.

“I hope to build mutual trust with the U.S. through dialogue,” Kim was quoted as saying. A political resolution of tensions on the peninsula and denuclearization should proceed in stages, with all sides moving in concert, he said. The Trump administration has demanded that North Korea immediately commit to denuclearization. The Kim-Xi meeting was the top news story in North Korea, with its most famous television announcer, Ri Chun Hui, again called out of her semi-retirement to report the event, underscoring its importance. Ri, wearing a traditional Korean-style dress, often smiled as she reported the news. The report, which lasted about 20 minutes, did not show any photos or video of the visit. Kim was accompanied by his younger sister, who has taken on an increasingly public role as the North Korean leader has tried to present a “softer” face to the outside world. North Korea’s official Korean Central News Agency said there was a “deep exchange of opinions” between Kim and Xi on the changes around the Korean Peninsula that are “drawing the world’s eyes and ears.” The recent South Korean summit and the potential U.S. talks have received more attention internationally, but China’s role as an economic lifeline for North Korea makes the talks between Xi and Kim all the more crucial. Kim needs to make sure that whatever negotiations he has with Trump align to some degree with Beijing’s positions, which could certainly complicate his task ahead. China’s official Xinhua News Agency said Xi hosted a welcome banquet for Kim on Monday and the two leaders strolled along the coastline at a government guesthouse and had lunch together on Tuesday. “At a crucial time when the regional situation is developing rapidly, Kim said he came to China again to meet with (Xi) and inform him of the situation,” Xinhua said.

Argentina seeks IMF financing to stabilise economy

Argentina opened talks with the International Monetary Fund on Tuesday to seek a financial aid package, 17 years after the country defaulted on its debt and 12 years after cutting ties with the fund.
© Eitan Abramovich, AFP | Argentina’s Minister of the Treasury Nicolas Dujovne speaks during a press conference at the Ministry’s headquarters in Buenos Aires, on May 8, 2018.

As a bout of market turbulence rocks Argentina’s economy, President Mauricio Macri announced that “as a preventative measure, I have decided to begin discussions with the International Monetary Fund for them to grant us a line of credit.  As #Argentina’s peso falls to new lows of 23,5 pesos/US$, president Macri delivers dramatic televised speech announcing opening of talks with the IMF for a new credit line. IMF chief Christine Lagarde said talks will begin soon on ways to shore up Argentina’s economy. She welcomed Macri’s statement, saying that “discussions have been initiated on how we can work together to strengthen the Argentine economy and these will be pursued in short order.” After the country’s currency fell four percent compared to the US dollar, Macri said in a televised speech he had held his first conversation with Lagarde but did not say how big a line of credit Argentina is seeking. “We are pursuing the only path open to us to emerge from stagnation, seeking to avoid a great economic crisis that will set us back and hurt everyone,” he said. Economy Minister Nicolas Dujovne told reporters it was too soon to talk about the details and conditions “but we have agreed that the IMF will offer financial support to Argentina.” Macri justified the decision to go to the IMF, saying that while the economy had enjoyed favorable conditions during the first two years of his presidency, conditions have changed. “We are among the countries of the world that are most dependent on foreign financing, a product of the enormous public spending we inherited and are putting in order,” he said. IMF financing would strengthen his “program of growth and development, giving us greater backing to confront this new global scenario and avoid a crisis like those we have had in our history.” After taking office in December 2015, Macri floated the Argentine peso, ending the strict controls in place under the government of Cristina Kirchner. But the strengthening of the US dollar in recent days has impacted the peso more than other currencies: it dropped 4.61 percent to 23.41 to the dollar in opening trading Tuesday, and strengthened slightly after Macri’s speech at 23.06.

Argentina’s Central Bank on Friday raised its key interest rate to 40 percent after the peso plummeted in value earlier in the week.

Although the bank’s actions appeared to have stabilized the currency on Monday, the peso fell sharply again on Tuesday, prompting a sell-off on the Buenos Aires Stock Exchange.Macri’s government last week lowered its target for the fiscal deficit to 2.7 percent of GDP from 3.2 percent.

The Latest: Australia and Japan still support Iran deal


WASHINGTON (AP) — The Latest on President Donald Trump’s decision on the Iran nuclear deal (all times local): Add Australia and Japan to the nations expressing continued support for the multinational nuclear deal with Iran even though the U.S. is pulling out of it. Australian Prime Minister Malcolm Turnbull said Wednesday that he regrets President Donald Trump’s decision to withdraw from the landmark pact. Turnbull is urging all parties involved in the pact to show restraint.In Japan, the Foreign Ministry says Japan continues to support the deal and that it “hopes for a continued constructive response from the nations involved.” World powers involved in the agreement have expressed regret amid concern the move by Trump will undermine efforts to stop the spread of atomic weapons.President Donald Trump announced Tuesday the U.S. will pull out of the landmark nuclear accord with Iran, dealing a profound blow to U.S. allies and potentially deepening the president’s isolation on the world stage. Saudi Arabia says it “supports and welcomes” President Donald Trump’s decision to withdraw from a nuclear agreement reached between Iran and world powers and reimpose sanctions on Iran. Saudi Arabia had tepidly supported the 2015 deal  signed by the Obama administration, but held strong reservations about it. Saudi Arabia and Iran are rivals locked in proxy wars for regional supremacy.

CBO forecasts largest-ever monthly surplus as record tax receipts pour in

April’s budget surplus will set a record, the CBO says, but President Trump’s tax law is expected to widen the deficit for the full fiscal year.

Record tax receipts will lead to the largest-ever monthly budget surplus for the federal government, congressional analysts said in a new report, as Americans hand over more money to Washington. The nonpartisan Congressional Budget Office estimates the April surplus will total $218 billion, breaking the prior record of nearly $190 billion notched in April 2001. Greater-than-expected tax receipts drove the surplus, CBO said, noting the record $515 billion in receipts for the month was as much as $40 billion more than the agency estimated about a month ago. The agency chalked up the difference to greater payments of individual income taxes in April, when tax returns and certain taxpayers’ quarterly estimated payments are due. The reasons for higher payments were twofold, CBO said.“Those payments were mostly related to economic activity in 2017 and may reflect stronger-than-expected income growth for that year. Part of the strength in receipts also may reflect larger-than-anticipated payments for economic activity in 2018,” the agency said. The prior record for receipts was $472 billion in April 2015. The tax cut enacted by President Donald Trump last year was expected to result in a boost in workers’ take-home pay. The CBO said withheld taxes rose in April since wages and salaries were higher — but the share of wages withheld for taxes was lower thanks to the new tax law. The expected April surplus, meanwhile, isn’t keeping the U.S. from running a wider budget deficit for the fiscal year to date. For the first seven months of the budget year, the shortfall totals $382 billion, or $37 billion more than the same period a year ago, CBO estimates. The CBO recently estimated the full-year deficit would be $804 billion, and that trillion-dollar deficits would return in 2020.

Trump announces US will exit nuclear accord with Iran

WASHINGTON (AP) — President Donald Trump announced Tuesday the U.S. will pull out of the landmark nuclear accord with Iran, declaring he’s making the world safer but dealing a profound blow to allies and deepening the president’s isolation on the world stage. “The United States does not make empty threats,” he said in a televised address from the White House Diplomatic Room. Trump said the 2015 agreement, which included Germany, France and Britain, was a “horrible one-sided deal that should never ever have been made.” He added that the United States “will be instituting the highest level of economic sanction.” Trump’s decision means Iran’s government must now decide whether to follow the U.S. and withdraw or try to salvage what’s left of the deal. Iran has offered conflicting statements about what it may do — and the answer may depend on exactly how Trump exits the agreement. One official briefed on the decision said Trump would move to reimpose all sanctions on Iran that had been lifted under the 2015 deal, not just the ones facing an immediate deadline. As administration officials briefed congressional leaders about Trump’s plans Tuesday, they emphasized that just as with a major Asia trade deal and the Paris climate pact that Trump has abandoned, he remains open to renegotiating a better deal, one person briefed on the talks said. Hours before the announcement, European countries met to underline their support for the agreement. Senior officials from Britain, France and Germany met in Brussels with Iran’s Deputy Foreign Minister for Political Affairs, Abbas Araghchi. Under the most likely scenario, Trump would allow sanctions on Iran’s central bank — intended to target oil exports — to kick back in, rather than waiving them once again on Saturday, the next deadline for renewal, said individuals briefed on Trump’s deliberations. Then the administration would give those who are doing business with Iran a six-month period to wind down  For the Europeans, Trump’s withdrawal constitutes dispiriting proof that trying to appease him is futile. Although the U.S. and Europeans made progress on ballistic missiles and inspections, there were disagreements over extending the life of the deal and how to trigger additional penalties if Iran were found violating the new restrictions, U.S. officials and European diplomats have said. The Europeans agreed to yet more concessions in the final days of negotiating ahead of Trump’s decision, the officials added.

Amazon could be the next black swan for the market

Why Amazon could be the next black swan for the market


Amazon appears untouchable. It’s rallied 37 percent this year, outperforming the market nearly fourfold. And a stunning quarter, reported last month, prompted nearly two dozen firms to up their price targets on the e-commerce giant; a handful of those newly minted price targets place the company north of the $1 trillion threshold.But at this juncture, I suspect a black swan has taken flight. Just consider the stock’s presence in so many passive vehicles. Amazon is a top holding in over 140 exchange-traded funds. A liquidity event for Amazon shares — perhaps triggered by issues related to the Trump administration’s ordered review of the company’s impact on the U.S. Postal Service — would create uncontrollable selling, in our view. Zooming in further, around 40 ETFs hold Amazon within the top 5 percent. Look out below: This is a colossal failure of common sense. Investors have been stuffing themselves on a Thanksgiving feast full of technology stocks. Today, tech sector equities comprise nearly 30 percent of all large-cap mutual fund portfolios; this is an accident waiting to happen. This represents the largest “overweight” relative to traditional benchmarks, relative to other large-cap sectors, in two decades. This represents, too, nothing more than a passive overdose on big tech, setting up large downside risk. This development causes me to hearken back a decade. Of course, who could possibly forget the great gorging on the financial sector heading into the crisis? Leading into 2007, banks and insurance companies comprised nearly 24 percent of the S&P 500. Today, the tech sector’s large market weighing puts it up near 26 percent of the market’s total capitalization.

95,745,000: Record Number Not in Labor Force as Boomers Retire

A growing number of retirees is pushing up the number of Americans counted as “not in the labor force.”

(CNSNews.com) – The number of employed Americans has broken eight records since President Trump took office, but on the not-so-sunny side, the number of Americans not in the labor force also keeps increasing, breaking six records since Trump took office in January 2017. Nick Bit: DAH!! less people in the work force means as a percent of a smaller labour  pool your unemployed rate goes down…. DAH!!!! so where is the real freeging improvement………The US has now become a reality TV show. With Donald Trump the producer and chief… how do you think that will end up? Last month, a record 95,745,000 Americans were counted as “not in the labor force,” meaning they are not employed and are not seeking a job, according to the Labor Department’s Bureau of Labor Statics. “This category includes retired persons, students, those taking care of children or other family members, and others who are neither working nor seeking work,” BLS said. With record numbers of people not in the labor force, the labor force participation rate has remained stubbornly low in recent years. In April, only 62.8 percent of the non-institutionalized, civilian population over the age of 16 was either working or actively looking for work. This compares with an all-time high of 67.3 percent in the first four months of 2000. In a March 2018 report, the Congressional Budget Office noted that a lower labor force participation rate is associated with lower gross domestic product and lower tax revenues. It is also associated with larger federal outlays, because people who are not in the labor force are more likely to enroll in federal benefit programs, including Social Security. This past January, the Congressional Budget Office projected that the labor force participation rate will continue to decline over the next 30 years from the current 62.8 percent to 61.0 percent in 2027 and to 59.2 percent in 2047. According to that report, “The continued retirement of the baby-boom generation is the most important factor driving down the overall participation rate.” The first Baby Boomers — people born between 1946 and 1964 — turned 65 in 2011. CBO has identified three factors pushing down the participation rate, — First, younger workers who are replacing Baby Boomers in the labor force tend to participate in the labor force at lower rates. — Second, the share of people receiving disability insurance benefits is generally projected to continue increasing, and people who receive such benefits are less likely to participate in the labor force. — Third, the marriage rate is projected to continue declining, especially among men, and unmarried men tend to participate in the labor force at lower rates than married men. Nick Bit: America is building the worlds largest social dependent welfare state. Like it or not the commies won. If your in the minority working for a living be prepared to be taxed to death…. You have been warned!

Buffett and Munger bashes bitcoin as thriving on mystique, favours stocks

NEW YORK (Reuters) – Billionaire investor Warren Buffett on Monday said buyers of bitcoin, which he has characterized as “rat poison squared,” thrive on the hope they’ll find other people who will pay more for it ( Nick Bit:like every stock trader) Likening bitcoin demand to the tulip bulb mania in 17th century Holland, Buffett, the chairman and chief executive of Berkshire Hathaway Inc, said the mystique behind the cryptocurrency has caused its price to surge. “If you don’t understand it, you get much more excited,” Buffett said on CNBC television. “People like to speculate, they like to gamble.”He said investors now are much better off owning U.S. stocks, whose prices are elevated but not in a “bubble,” and it would take a “nanosecond” for him to choose stocks over 10- or 30-year U.S. government bonds now yielding around 3 percent. Charlie Munger, Buffett’s longtime business partner and a Berkshire vice chairman, is also no bitcoin fan, describing it as “worthless artificial gold.” He likened it to Oscar Wilde’s definition of fox hunting, calling it “the pursuit of the uneatable by the unspeakable.”  Nick Bit: I call bit coin bankers worse nightmare. Especially who’s desks specialize  trading in artificial and often time worthless money like:  gold,  Chili peso, Argentine Peso (cashing as we speak). The reason why i like Bitcoin s because its digital artificial gold. I know how to trade gold and i know how to trade bit coin. And i have traded the shit out of gold, silver platinum palladium and many currencies that ended up worthless: Mexican peso. Brazilian Real,  Russian Rubel, Riel Cambodia, Guarani Paraguay, Guinean Franc, Rupia Indonesia, Rial Iran, Dong Vietnam. and as we speak i see the Argentian Peso wipe out again shorting all the way. Why is not Charlie corking off on these wipeouts “rat poison” for far far far more money then the swings in Bit coin.  Maybe because the bankers insiders have something to fear about digital rat poison that is going to wipe out Visa, Mater card, American express, Western Union and maybe Pay Pal if they don’t wise up fast…….  Full Disclosure one of the largest issuers of visa and master card cards and debt is Wells scum bag rob your costumers Fargo and Charlie and Warren are their biggest shareholders.

Kellyanne Conway denies White House credibility crisis

Washington (CNN)Kellyanne Conway, counselor to President Donald Trump, denied Sunday that the White House has a credibility crisis and said Trump learned about a hush money payment to porn star Stormy Daniels after the fact. “No, I don’t,” Conway said on CNN’s “State of the Union” when asked by anchor Jake Tapper if regular falsehoods and lies from Trump had eroded the White House’s credibility. She also defended Trump’s statement on Air Force One in April that he was unaware of a payment by his attorney Michael Cohen to Daniels for her discretion about an alleged sexual encounter with Trump by saying the President was unaware of the arrangement at the time it occurred. “When the President said ‘no’ on Air Force One, he was talking about he didn’t know when the payment occurred,” Conway said. “So he’s saying he didn’t know about it when the payment occurred. He found out about it after the fact.” Conway said she was unaware of any other payments similar to the one made in the Daniels matter, but acknowledged that she had less knowledge of any potential arrangements than former New York City Mayor Rudy Giuliani. Giuliani, who was recently hired Trump’s attorney, said in a separate interview Sunday that he did not know if Cohen paid other women to keep quiet. “They did not cross my desk as campaign manager,” Conway said of other potential payments. “And I would also tell you that I’m happy to answer these questions, but I have limited visibility into what Mayor Giuliani is talking about.” She added that when she was Trump’s campaign manager, she “was not made aware” of the Daniels matter either. Conway said repeatedly that Trump was not lying when he said he did not know about Cohen’s $130,000 payment to Daniels. Asked about Trump’s statement on Air Force One that he did not know where Cohen got the money to pay Daniels, Conway referred to Trump’s tweets Thursday. Trump denied in the tweets that any campaign money was used to reimburse Cohen and said he was paid via retainer. The payment has prompted complaints to the Justice Department and Federal Election Commission over potential violations of campaign finance law. Conway also stressed that Trump has denied Daniels’ allegations of an affair between the two, and said she accepted his denial.

“Yes, he’s denied it,” Conway said. “So I have no reason to believe otherwise.”

No credibility crisis

Trump’s campaign and presidency have been marked by his regular assertion of demonstrably untrue statements as fact. A recent tally by The Washington Post found the President has made more than 3,000 false or misleading claims since he took office. Pressed repeatedly on this point, Conway spoke about Trump’s work on a range of issues, such as the economy, North Korea and the opioid crisis, and denied the White House was facing a credibility crisis. She also said the Post had found that then-President Barack Obama told “some whoppers” during his time in office. Asked about a tweet from Trump on Wednesday blaming Obama for failing to secure the release of three hostages from North Korea, despite two of the hostages being taken during the Trump administration, Conway dismissed the question.
“You’re focusing on the tweet, and we’re focused on the hostages,” Conway said.

Oil prices are indicating a worst-case scenario on Iran nuclear deal, economist says

Iran: U.S. will regret pulling out of 2015 deal
World will watch Iran’s response if nuke deal ends

As the world awaits U.S. President Donald Trump’s verdict on the 2015 Iran nuclear deal, climbing oil prices show that investors are expecting the worst. Energy markets are indicating that the U.S. is likely to pull out of the accord and reimpose sanctions on Tehran, according to Dubai’s largest bank, Emirates NBD. The deal, officially called the Joint Comprehensive Plan of Action, lifted international sanctions against Iran in exchange for it curbing its nuclear program. Trump has referred to the agreement as the “worst deal ever,” and he must decide by May 12 whether to reimpose sanctions or to grant the country a waiver. “Anything that’s slightly less than that — by which I mean he may delay his decision, or he may not impose the same amount of sanctions previously — I think markets would react favorably to that, given that markets are currently pricing in probably the worst-case scenario,” Tim Fox, head of research and chief economist at Emirates NBD, told CNBC’s “Capital Connection.” U.S. sanctions on Iran could slash global oil supplies by 800,000 barrels per day, according to a report by Emirates NBD. Iran is one of the world’s biggest crude producers — when it’s allowed to sell it. Fears of such a supply cut, coming at a time when major oil countries have already reduced production on their own, have caused oil prices to climb above $70 per barrel for the first time since November 2014. But renewed U.S. sanctions on Iran may have a wider implication than oil supply and oil prices, given Tehran’s growing influence in the Middle East and its role in regional crises such as Syria and Yemen, noted Fox. Iranian President Hassan Rouhani also warned that the U.S. would regret its decision to exit the deal. “I think the region clearly will be concerned by that development in terms of anxiety about reactions — about how Iran would respond to that decision” by the United States, Fox said, adding that Iran’s involvement in certain parts of the Middle East would increase political risks in the region. “The political risks certainly remain significant for countries like Lebanon and Syria and neighboring countries of those as well,” he added. Iran and armed groups that it funds are active combatants in Iraq and Syria. One of those groups allied with Iran, Hezbollah, is seen picking up legislative seats in Lebanese elections that took place Sunday.

Dollar marches to 4-month high as oil rally points to higher inflation

Dollar index rises to highest since late December
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The dollar continued to rise on Monday, trading at a more than four-month high as investors gauged what last week’s job data and recent oil price rally could mean for Federal Reserve monetary policy. A trio of Fed speakers on the docket Monday will be watched for any hints of the future rate path.The ICE U.S. Dollar Index DXY, +0.11%  gained 0.2% to 92.739, reaching its highest level since late December. The benchmark last week rose 0.2%, logging a fourth straight weekly advance. The euro EURUSD, -0.2424%  fell to $1.1931 from $1.1963 late Friday in New York, while the pound GBPUSD, +0.2660%  was flat around $1.3533. The yen USDJPY, -0.01%  also declined, with the buck buying ¥109.32 compared with ¥109.12 on Friday. The dollar advanced as traders digested Friday’s U.S. jobs report that delivered a disappointing number on new jobs added to the economy, but beat forecasts on the unemployment rate. The joblessness rate fell to 3.9%, the lowest since late 2000, sparking speculation the labor market soon will become so tight that wages will rise at a faster pace. That would likely fuel higher inflation and add pressure on the Fed to raise interest rates more aggressively. Traders became more convinced President Donald Trump will abandon the Iran nuclear deal and re-impose sanctions on the country. That would limit Iran’s oil exports and tighten global supply, which would likely lead to a rise in oil prices. As energy is a big part of headline consumer prices, a continued surge in crude prices could further lift U.S. inflation. “Higher domestic inflation would be just what the Fed needs in order to tilt towards 3 additional rate increases in 2018. Furthermore, the tighter labor market conditions — as seen on Friday’s data — are also expected to push wage growth higher in the medium term. Higher energy prices and stronger wage growth is almost an ‘one-way road’ to higher inflation which would leave no option to the Fed other than raising rates more aggressively — which explains why the greenback stays on an upwards trajectory,” he added.

U.S. oil cracks $70, dollar heads towards 2018 high

LONDON (Reuters) – Oil prices jumped to their highest since late 2014 on Monday on a deepening economic crisis in Venezuela and worries that the Unites States could re-impose sanctions on Iran, while stocks firmed and the dollar rose towards its 2018 peak. With trade thinned by a holiday closure in London, European shares opened higher, boosted by energy stocks as well as encouraging earnings updates. Heavyweight Nestle also gained after the Swiss-based food firm agreed a tie-up with Starbucks. Most Asian markets also rose after Friday’s tame reading on U.S. wage growth lessened chances of a pick-up in the pace of interest rate hikes by the Federal Reserve. Gains were capped by Sino-U.S. trade tensions. U.S. crude oil prices rose 70 cents, or 1 percent, pushing above $70 a barrel for the first time since November 2014 as the crisis in OPEC member state Venezuela threatened to further crimp its production and exports.

Also driving oil prices higher was the May 12 deadline set by U.S. President Donald Trump for Europeans to “fix” the deal with Iran over its nuclear program. If they do not, Trump has said he would refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic.


Nick Bit: If the US issues sanction they will go it alone. Meaning its another publicity stunt like steal get the headline and then let it quietly fade.

US Senator John McCain, who is battling brain cancer, does not want Donald Trump at his funeral

John McCain has been fighting an aggressive form of brain cancer for more than a year

Senator John McCain, 81 and battling brain cancer, has made clear he does not want US President Donald Trump to attend his funeral.McCain, a Vietnam war vet and respected senator from Arizona who has had a turbulent relationship with Trump, instead wants Vice-President Mike Pence to represent the White House, The New York Times and NBC News said, quoting people close to McCain.  McCain is also using a new book and documentary to express regret about not having selected former Senator Joseph Lieberman as his running mate in 2008 against Barack Obama and instead going with populist Sarah Palin, The Times said. McCain has been fighting an aggressive form of brain cancer for more than a year. He is currently back in Arizona, recovering from surgery for an intestinal infection. McCain and Trump have had a rough relationship, particularly during the 2016 presidential primary, when Trump said McCain – a POW for years in Vietnam – was not really a war hero because he was captured. Last summer Trump slammed McCain for a “no” vote that helped doom a key bill to repeal Obamacare – the health care reforms passed into law under president Barack Obama.

Warren Buffett: I was wrong on Google and Amazon, Jeff Bezos achieved a business ‘miracle’

Warren Buffett says he made mistakes by not investing in two dominant technology companies, Alphabet and Amazon.
Warren Buffett
David A. Grogan | CNBC

“I made the wrong decisions on Google and Amazon,” he said at the Berkshire Hathaway 2018 annual shareholder meeting on Saturday. “We’ve looked at it. I made the mistake in not being able to come to a conclusion where I really felt that at the present prices that the prospects were far better than the prices indicated.” It took Microsoft co-founder Bill Gates to tell him to stop using Altavista as a search engine and use Google instead, he said. And he should have been more aware because Berkshire subsidiary Geico was paying Google “a lot of money” at the time of its initial public offering.The Oracle of Omaha also admitted he underestimated Amazon’s ability to disrupt retail and cloud computing at the same time with such a rapid pace.  “I had very very very high opinion of Jeff’s [Jeff Bezos, CEO of Amazon] ability when I first him, and I underestimated him,” he added. “I’ve watched Amazon from the start. I think what Jeff Bezos has done is something close to a miracle … The problem is when I think something will be a miracle, I tend not to bet on it. It would have been far better obviously if I had some insights into certain businesses.”

Billions on the line for firms as Trump weighs Iran pullout

DUBAI, United Arab Emirates (AP) — From airplanes to oilfields, billions of dollars are on the line for international corporations as President Donald Trump weighs whether to pull America out of Iran’s nuclear deal with world powers. Regardless of where they are headquartered, virtually all multinational corporations do business or banking in the U.S., meaning any return to pre-deal sanctions could torpedo deals made after the 2015 agreement came into force. That threat alone has been enough to scare risk-averse firms, like Boeing Co., into slow-walking deals agreed to months ago. A complete pullout by the U.S. would wreak further havoc and likely frighten off those considering making the plunge. “I absolutely think those on the fence will not jump in,” said Richard Nephew, a former sanctions expert at the U.S. State Department who worked on the nuclear deal and now is at New York’s Columbia University. “The only ones who will, will be those who see tremendous monetary benefit and no U.S. risk.” The 2015 Iran nuclear deal lifted crippling economic sanctions that had locked Iran out of international banking and the global oil trade. In return, Tehran limited its enrichment of uranium, reconfigured a heavy-water reactor so it couldn’t produce plutonium and reduced its uranium stockpile and supply of centrifuges. For Western businesses, the deal meant access to Iran’s largely untapped market of 80 million people. Most prominently, airplane manufacturers rushed in to replace the country’s dangerously dilapidated civilian fleet. Nuclear deal co-signers Britain, France and Germany, which have urged Trump to preserve the deal, may seek exemptions to protect their companies if the U.S. snaps back sanctions, said Ellie Geranmayeh, a senior policy fellow studying Iran at the European Council on Foreign Relations. “This should include a series of exemptions and carve-outs for European companies already involved in strategic areas of trade and investment with Iran, with the priority being to limit the immediate shock to Iranian oil exports,” she wrote Wednesday. Nick Bit: This is a publicity stunt. No matter what Trump does the rest of the world right or wrong has no stomach for sanctions. The US will have to go it  alone. Lets face facts Iran and N.Korea have joined the nuclear tipped rocket club. Their is no turning back. That ship has set sail.

U.S. Probes Cohen Over Cash He Built Up During Campaign

Trump’s lawyer took out lines of credit to secure access to as much as $774,000 as race heated up

Michael Cohen, longtime personal lawyer for President Donald Trump, leaving the U.S. District Court for the Southern District of New York last month.
Michael Cohen, longtime personal lawyer for President Donald Trump, leaving the U.S. District Court for the Southern District of New York last month. Photo: Spencer Platt/Getty Images ByMichael Rothfeld,Rebecca Davis O’Brien,Mark Maremont andJoe Palazzolo

Michael Cohen, President Donald Trump’s personal lawyer, gained access to as much as $774,000 through two financial transactions during the 2016 presidential campaign as he sought to fix problems for his boss, public records show.Those transactions could factor into a broad investigation of Mr. Cohen’s business affairs being conducted by Manhattan federal prosecutors and the Federal Bureau of Investigation, who are examining whether Mr. Cohen violated any laws in his efforts to raise cash and conceal negative information about Mr. Trump, according to people familiar with the matter. Those include transactions tied to his credit line and his ownership of real estate and taxi medallions, the people said. In February 2016, as Mr. Trump’s fortunes as a presidential candidate rose, Mr. Cohen nearly doubled the amount he could use on a bank credit line tied to his Manhattan apartment, increasing his ability to borrow by $245,000, according to real-estate records.

Then-Republican presidential nominee Donald Trump answering questions in September 2016 in Cleveland Heights, Ohio, as Mr. Cohen stands by.
Then-Republican presidential nominee Donald Trump answering questions in September 2016 in Cleveland Heights, Ohio, as Mr. Cohen stands by. Photo: jonathan ernst/Reuters
 Three months earlier, he gained potential access to another $529,000, through a new mortgage that he and his wife cosigned on a condominium owned by her parents at Trump World Tower, a Trump building in New York, separate real-estate records show.

Mr. Cohen and his lead attorney didn’t respond to a request for comment. Mr. Cohen, who has described himself as Mr. Trump’s fixer, has said he used his home-equity line of credit to make a $130,000 payment to former adult-film actress Stephanie Clifford—known professionally as Stormy Daniels—in exchange for her agreeing less than two weeks before the presidential election to stay silent about an alleged sexual encounter with Mr. Trump.Mr. Trump’s lawyer Rudy Giuliani said this week that Mr. Cohen resolved other problems similarly for Mr. Trump, although he didn’t specify what they were or the source of funds that were used. As part of a broad effort to determine how Mr. Cohen got access to cash and what he did with it, federal prosecutors and the FBI are examining whether Mr. Cohen committed bank fraud by making false statements inflating the value of his assets to obtain loans or by misstating the intended purpose of the loans, these people said. Investigators also are examining whether he violated federal election law by making unreported campaign contributions exceeding the federal limit of $5,400 to Mr. Trump in that election cycle, as well as possible other crimes stemming from his payments to cover up problems, the people said. Prosecutors will want to document “every penny” flowing through Mr. Cohen’s accounts during the presidential campaign, said Alex Little, a former federal prosecutor in Washington who is now a defense lawyer and has no firsthand knowledge of the Cohen investigation. A search warrant obtained by federal investigators for an April 9 raid of Mr. Cohen’s home, hotel room and law office authorized seizure of documents related to Ms. Clifford and the $130,000 payment in October 2016; a former Playboy model paid $150,000 by the National Enquirer publisher in an August 2016 deal preventing her from discussing an alleged affair with Mr. Trump; and Mr. Cohen’s taxi medallions, the people familiar with the matter said.

Mueller Team Questions Trump Friend Tom Barrack

Image: Mueller Team Questions Trump Friend Tom Barrack
Tom Barrack, former Deputy Interior Undersecretary in the Reagan administration, delivers a speech on the fourth day of the Republican National Convention on July 21, 2016.(John Moore/Getty Images)

Investigators working for special counsel Robert Mueller have interviewed one of President Donald Trump’s closest friends and confidants, California real estate investor Tom Barrack, the Associated Press has learned. Barrack was interviewed as part of the federal investigation of possible collusion between the Trump campaign and Russia in the 2016 election, according to three people familiar with the matter who spoke on condition of anonymity to discuss private conversations.The specific topics covered in questions from Mueller’s team were not immediately clear. One of the people who spoke to AP said the questioning focused entirely on two officials from Trump’s campaign who have been indicted by Mueller: Trump’s former campaign chairman, Paul Manafort, and Manafort’s onetime deputy, Rick Gates. Gates agreed to plead guilty to federal conspiracy and false-statement charges in February and began cooperating with investigators. A second person with knowledge of the Barrack interview said the questioning was broader, including financial matters about the campaign, the transition and Trump’s inauguration in January 2017. Barrack has rare access and insight into Trump going back decades, since their days developing real estate. Barrack played an integral role in the 2016 campaign as a top fundraiser at a time when many other Republicans were shunning the upstart candidate. Barrack later directed Trump’s inauguration.Barrack, a wealthy real estate investor with close ties to several Mideast leaders, met Trump in 1988 when he negotiated the sale of The Plaza Hotel in New York to Trump. Barrack’s publicist in 2016 described the men as having since “solidified a lifelong friendship between themselves and their families.” Barrack employed Gates last year, wrapping up operations on the Presidential Inaugural Committee, before Gates was charged by Mueller.  Barrack spoke glowingly of Trump in a CNBC interview in early 2016. “He’s one of the kindest, and actually most humble, friends that I’ve had,” Barrack said. “I have so much respect for him because at this point in his career, wandering into the milieu was not easy, and he’s changed the dialogue of the debate.” Barrack also was among the featured speakers at the Republican convention where Trump formally received the nomination. Days after Trump’s victory in November 2016, Barrack told CBS’ “This Morning” that Trump was like an ultimate fighter during the campaign who used “whatever tools necessary to convey a really disruptive message.” Barrack said America would see “a softer, kinder” Trump now that Trump had won the presidencyMueller’s investigators have interviewed dozens of witnesses in the probe into Russia’s meddling in the 2016 election. They have also secured the cooperation of former Trump national security adviser Michael Flynn and former Trump foreign policy adviser George Papadopoulos. But few witnesses have as much insight into the president’s lengthy business career and all facets of his campaign and administration as Barrack.

Glencore Scraps Planned Sale of $9 Billion Stake in Russian Oil Company

A sale of the stake to CEFC China Energy Co. would have strengthened energy ties between Moscow and Beijing

Glencore PLC Chief Executive Ivan Glasenberg is seen arriving at the firm’s annual meeting in Switzerland on May 2; Glencore and investment partners have scrapped the planned sale of a $9 billion stake in Russian state oil company PAO Rosneft to a Chinese private energy-trading company whose leader is missing.
Glencore PLC Chief Executive Ivan Glasenberg is seen arriving at the firm’s annual meeting in Switzerland on May 2;
Glencore and investment partners have scrapped the planned sale of a $9 billion stake in Russian state oil company PAO Rosneft to a Chinese private energy-trading company whose leader is missing.
Mining giant Glencore GLNCY -0.77% PLC and Qatar said they have scrapped plans to sell a roughly $9 billion stake in Russian state oil company PAO Rosneft to a once-high-flying Chinese firm now embroiled in investigations by Beijing In a statement late Friday, Glencore and Qatar said they were terminating an agreement, reached in September, to sell most of their roughly one-fifth stake in Rosneft to CEFC China Energy Co. The deal was intended to provide CEFC with just over 14% of Rosneft and would have strengthened energy ties between Moscow and Beijing. The agreement with the Chinese buyer was the latest in a series of moves undertaken by Glencore, the state-owned Qatar Investment Authority and the Kremlin over the stake. In late 2016, as low oil prices pressured Russian finances, Moscow agreed to sell a 19.5% stake to Glencore and the Gulf emirate’s investment fund for about $11.3 billion. The exact terms of that complex deal were never straightforward. It gave Glencore an actual equity stake in Rosneft of only about 0.5%, and Qatar just under 5%. The rest of the deal was financed by Russian banks and Italy’s Intesa SanpaoloSpA , which had planned to spread its risk by syndicating the loan to other banks

The partners then struck a deal to unload their holdings with private energy-trading company CEFC, which appeared at the time to be a fast-growing investor with global ambitions and Beijing backing. CEFC, founded in 2002 and based in Shanghai, has been expanding internationally in recent years. Earlier this year, though, whatever official support CEFC enjoyed appeared to be crumbling. In March, The Wall Street Journal reported Ye Jianming, the company’s leader, was under investigation in China. Mr. Ye, who made his early fortune as an oil man, was seen to have close ties to China’s military and intelligence. Mr. Ye’s whereabouts are unknown. Since his disappearance, banks have called in credit lines, and CEFC has sought to raise money in China. CEFC has been unable to complete some of its biggest plans, including a major expansion in the Czech Republic, the purchase of around 20% of New York financial-services firm Cowen Group Inc. and the purchase of a Portuguese insurer. CEFC couldn’t immediately be reached.All that put the fate of a sale of the Rosneft stake in doubt. Late Friday, Glencore said it and the Qatar fund had terminated their deal with CEFC and dissolved their own partnership agreement. Glencore said the two would subsequently each hold their respective equity stakes in Rosneft separately.  A subsidiary of the Qatar fund would take ownership of roughly 14% of Rosneft, giving the fund an overall 18.93% stake in Rosneft. Glencore, meanwhile, will exit with 0.57%. Exact financial terms between the partners and the banks involved weren’t disclosed. Glencore said it would receive 3.7 billion euros, or $4.43 billon, in the transaction. A person familiar with the matter said the cash would be used to pay back debt that helped finance the original deal. It was unclear whether Glencore Chief Executive Ivan Glasenberg would remain on Rosneft’s board. Representatives for Qatar couldn’t be reached immediately for comment. —Scott Patterson in London contributed to this article.

Warren Buffett: Cybersecurity risk ‘is uncharted territory. It’s going to get worse, not better’

Warren Buffett, Chairman and CEO of Berkshire Hathaway.
Lacy O’Toole | CNBC Warren Buffett, Chairman and CEO of Berkshire Hathaway.

Warren Buffett believes cybersecurity incidents will rise, and with it the potential to significantly harm the insurance industry. “Cyber is uncharted territory. It’s going to get worse, not better,” he said at the Berkshire Hathaway 2018 Annual Shareholders Meeting Saturday. “There’s a very material risk which didn’t exist 10 or 15 years ago and will be much more intense as the years go along.”

matejmo | iStock | Getty Images

Buffett said he doesn’t want much underwriting exposure to cybersecurity threats for Berkshire’s insurance businesses. He noted the company has a “pretty good idea” on how to properly assess the probabilities for earthquakes in California and hurricanes in Florida, but not with computer hacking threats. The investor expressed skepticism that any insurance company can assess the risk for cybersecurity events. “We don’t want to be a pioneer on this … I think anybody that tells you now they think they know in some actuarial way either what [the] general experience is like in the future, or what the worst case can be, is kidding themselves,” he added.

Buffett Accounting ‘Nightmare’ Fuels First Loss in Nine Years

Warren Buffett has warned about the “nightmare” tied to new accounting-rule changes. Now it’s beginning.
Attendees walk past a photograph of Warren Buffett during a shareholders shopping day ahead of the Berkshire Hathaway annual meeting in Omaha.  By Katherine Chiglinsky


The rules, which require Berkshire to report unrealized gains or losses in equity investments in net income, helped fuel a $1.14 billion loss at Buffett’s Berkshire Hathaway Inc. in the first quarter, the Omaha, Nebraska-based company said Saturday in a statement. That marked the company’s first net loss since 2009.

The “requirement will produce some truly wild and capricious swings in our GAAP bottom line,” Buffett said in his annual letter to shareholders released in February. The accounting change “will severely distort Berkshire’s net income figures and very often mislead commentators and investors.” Buffett has said operating results are a better barometer of company performance, in part because Berkshire’s more than $170 billion stock portfolio can fluctuate from quarter to quarter. Operating profit, which doesn’t include those changes, jumped 49 percent to $5.29 billion during the first quarter as insurance underwriting swung to a profit after a difficult 2017. A 16 percent jump in revenue at auto insurer Geico helped the company turn an underwriting profit, according to a regulatory filing. Geico was helped by rate increases that pushed premiums higher. The railroad business also posted a gain in profit due to increased revenues per car as fuel prices rose. Berkshire’s cash pile fell to $109 billion at the end of March from the record $116 billion at year-end, the first decline in two years. Buffett has said that deploying that cash into new, large acquisitions is key to increasing earnings over time. The first quarter’s drop was driven in part by spending more than $12 billion on more Apple Inc. shares. The company reported the value of Apple its stake at $40.7 billion as of March 31, a jump from $28.2 billion at the end of 2017. Buffett said in a CNBC interview that aired Friday that his company bought an additional 75 million shares of the technology company in the first quarter.

Berkshire said the fair value of its investment in Kraft Heinz Co. dropped by more than $5 billion to $20.3 billion in the quarter, as shares slipped almost 20 percent.

During the weekend, Buffett also showcases the businesses that Berkshire owns, including Geico and BNSF Railway Co. Berkshire’s railroad, utilities and energy businesses reported a 31 percent increase in profit during the first quarter.


Fidelity Fires 200 Over Alleged Misuse of Reimbursements

Image: WSJ: Fidelity Fires 200 Over Alleged Misuse of Reimbursements

 Fidelity Investments has fired or allowed more than 200 employees to resign over alleged misuse of workplace-benefit programs, the Wall Street Journal reported on Friday, citing people familiar with the matter.

A company audit of computer-buying and physical-fitness benefit programs over the last year found misuse in offices across the country.

A person familiar with the situation confirmed to Reuters that some Fidelity employees had misused the company’s reimbursement benefits but did not say how many employees were involved.Fidelity reviewed the alleged violations, and terminated the employees it found to have misused the benefits, the person added.  The company reimbursed staff for as much as 20 percent of the cost of computers and related equipment and in some cases, employees collected the company’s reimbursement for equipments that they canceled after purchase, according to the person.”And with regard to the computer issue, there was no customer involvement and no customer impact. However, in the very small percentage of instances where we identify misconduct, we take appropriate action,” Fidelity said in an emailed statement to Reuters. Nick Bit: Now if this is what they did internally let your brain ponder what they did with boomers “high yield” HA HA HA HA AH accounts. Most people have no idea in the world what their retirement dollars are invested it… Talk about crying time!

Argentina raises interest rates to 40%

Argentina’s central bank has raised interest rates for the third time in eight days as the country’s currency, the peso, continues to fall sharply.  On Friday, the bank hiked rates to 40% from 33.25%, a day after they were raised from 30.25%. A week ago, they were raised from 27.25%. The rises are aimed at supporting the peso, which has lost a quarter of its value over the past year. Analysts say the crisis is escalating and looks set to continue. Argentina is in the middle of a pro-market economic reform programme under President Mauricio Macri, who is seeking to reverse years of protectionism and high government spending under his predecessor, Cristina Fernandez de Kirchner. Inflation, a perennial problem in Argentina, was at 25% in 2017, the highest rate in Latin America except for Venezuela. This year, the central bank has set an inflation target of 15% and has said it will continue to act to enforce it. Despite the twin rate rises, the peso, which was fixed by law at parity with the US dollar before Argentina’s economic meltdown in 2001-02, is now trading at about 22 to the dollar. “This crisis looks set to continue unless the government steps in to reassure investors that it will take more aggressive steps to fix Argentina’s economic vulnerabilities,” said Edward Glossop, Latin America economist at Capital Economics. “Risks to the peso have been brewing for a while – large twin budget and current account deficits, a heavy dollar debt burden, entrenched high inflation and an overvalued currency.

“The real surprise is how quickly and suddenly things seem to be escalating.”

Mr Glossop said “a sizeable fiscal tightening” was planned for 2018, but it might now need to be larger and prompter. “Unless or until that happens, the peso is likely to remain under pressure, and there remains a real risk of a messy economic adjustment.” Argentina’s president Mauricio Macri is a controversial figure in a country that is still strongly divided ideologically.  But among international investors he is unanimously praised. Since coming to office, he moved swiftly to end capital controls and re-establish trust in economic data coming from Argentina. However, he is not winning a crucial battle in the country – the one against inflation. Markets are taking notice and there has been a sell-off of the peso. The opposition wants to stop Macri from removing subsidies in controlled prices, such as energy and utility tariffs, which may bring more inflation in the short term but could help bring it down from above 20% now to about 5% by 2020. Friday was a day for emergency measures – a massive hike to 40% in interest rates and a commitment to bring down government spending.  Investors still believe Macri has a sound plan to recover Argentina, but they are not convinced he can see it through. Nick Note: this is just the start of the BICKS, TICKS and DICKS wipeout. Won’t that be fun… Here comes te mighty dolar to save the day!

Trump salutes 2nd Amendment, urges NRA members to vote GOP

DALLAS (AP) — President Donald Trump on Friday linked the sanctity of the Second Amendment to his party’s prospects in the 2018 midterm elections, telling supporters at the National Rifle Association’s annual convention that “we’ve got to get Republicans elected.” Trump struck a tough tone months after he briefly strayed from the NRA’s message in the days after the Parkland, Florida, school shooting. He vowed that the Second Amendment will “never ever be under siege as long as I am your president.” Trump’s speech in Dallas was his fourth consecutive appearance at the NRA’s annual convention. His gun comments were folded into a campaign-style speech, which touched on the Russia probe, the 2016 campaign, illegal immigration and his efforts in North Korea and Iran. Trump said Democrats want to “outlaw guns” and said if the nation takes that step, it might as well ban all vans and trucks because they are the new weapons for “maniac terrorists.” The speech came as the issue of gun violence has taken on new urgency after one of the deadliest school shootings in U.S. history. Student survivors of the Feb. 14 shooting at Marjory Stoneman Douglas High School, which left 17 people dead, are now leading a massive national gun control movement. They too are looking to the midterm elections for action. Though Trump embraced the Second Amendment right to bear arms before Friday’s speech, he had temporarily strayed from the strong anti-gun control message in the wake of the school shooting in Parkland, Florida. While the shooting has not led to major changes from the White House or the Republican-led Congress, it did — at least briefly — prompt Trump to declare that he would stand up to the powerful gun lobby. He later backpedaled on that tough talk. Trump said some people had advised him that attending might be controversial, but added: “You know what I said? ‘Bye-bye, gotta get on the plane.’

Trump throws Giuliani under the bus

“Virtually everything that’s been said has been said incorrectly.”

On the heels of Rudy Giuliani’s string of disastrous interviews with cable and print outlets, President Trump sought to do some damage control, and in the process threw his new attorney under the bus. During two brief question-and-answer sessions with reporters on Friday morning, Trump didn’t try to explain the disconnect between Giuliani’s claim that Trump reimbursed Michael Cohen for a hush payment made just before the 2016 election to a woman who says she had an affair with Trump, and Trump’s own previous denial that he knew anything about the payment. Instead, Trump repeatedly asserted that Giuliani simply didn’t know what he was talking about.“He started yesterday. He will get his facts straight,” Trump said while leaving the White House on his way to the NRA convention in Texas. “Virtually everything that’s been said has been said incorrectly.”  Later, while boarding Air Force One, Trump was asked why he’s changed his story about the Daniels payment. He lashed out at a reporter for asking the question — “I didn’t change any story. I’m telling you this country is growing so fast and to be bringing up that kind of crap and witch hunt all the time…that’s all you want to talk about” — before again suggesting that Giuliani is ignorant of the facts. “When Rudy made the statement, he had just started and wasn’t totally familiar with everything. And Rudy, we love Rudy, he is a special guy. What he really understands is this is a witch hunt,” Trump said. Giuliani claims to be better informed than Trump. In a phone interview with NBC, he said there are documents proving that Trump reimbursed Cohen for the payment, which may have violated federal law.“I don’t think the president realized he paid him [Cohen] back for that specific thing until we [his legal team] made him aware of the paperwork,” Giuliani said.  Giuliani told NBC that the president responded to the news by saying, “‘Oh my goodness, I guess that’s what it was for.’”

When asked how many payments Trump had made, Giuliani told NBC News the president started paying Cohen back in January 2017 and that altogether there were “about 12 installments of $35,000 each.”

The money, totaling an estimated $420,000, also covered other expenses and fees for Cohen, Giuliani said, but he was unable to provide details.

While Trump is now trying to dismiss Giuliani’s explanation of the Daniels payment, Giuliani told The Washington Post that Trump was “very pleased” with his first interview as the president’s attorney on Hannity. “He felt that somebody finally stood up and defended him, particularly with how this investigation is going,” Giuliani said.

Poll: Trump support among union members has fallen 15 points

Poll: Trump support among union members has fallen 15 points
President Trump’s support among America’s union workers has dropped 15 points in just a year, according to a Reuters/Ipsos poll released Friday.

The president enjoyed an all-time high of more than 60 percent support among union workers in the same poll last March, an unusually strong number for a Republican. But his support among the demographic has dropped steadily nearly every month since then, Reuters reports, despite his pursuit of trade tariffs that labor unions have traditionally supported. Trump’s support among union workers now sits at 47 percent, down from its all-time high of 62 percent, according to the poll. April numbers have not yet been released. A graph released by Reuters notes that Trump tended to win union supporters in areas of the country such as the southwest and the Carolinas where union workers make up a smaller percentage of the overall workforce. Democrats are working hard to win back union voters, a voting bloc that has typically been a stronghold for them, ahead of the 2018 congressional midterms. Party strategists are hoping to avoid a repeat of 2016, which saw many union workers flipping from supporting President Obama just four years earlier to supporting Trump. “There was a collapse of union support,” said former AFL-CIO political director Steve Rosenthal. Clinton won 8 percent more of the union vote than did her opponent, a victory that was still a significant double-digit drop in support from unions’ support for Obama’s reelection campaign in 2012. Her husband, former President Bill Clinton, won a 30-point advantage among union households in 1992 during his successful run for president. The Reuters/Ipsos poll contacts 902 – 1,558 union members every month, and carries a margin of error of 3-4 percentage points for union member questions.

Citi: U.S. To Become World’s Top Oil Exporter

Oil storage

As global oil markets shift their attention from U.S. shale oil production back to a resurgent Saudi Arabia and Russia and geopolitical concerns bearing down on oil prices, Citigroup said last Wednesday that the U.S. is poised to surpass Saudi Arabia next year as the world’s largest exporter of crude and oil products. The U.S. exported a record 8.3 million barrels per day (bpd) last week of crude oil and petroleum products, the government also said Wednesday. Top crude oil exporter Saudi Arabia’s, for its part, exported 9.3 million bpd in January, while Russia exported 7.4 million bpd, the bank added. However, it should also be noted that the Citi projection is for both crude and finished (refined) petroleum products, not only crude oil. Saudi Arabia remains the world’s largest exporter of crude, though since January amid the OPEC/non-OPEC production cut agreement that figure has fallen. On April 10, the Saudi oil minister said that the kingdom planned to keep its crude oil shipments in May below 7 million bpd for the 12th consecutive month. Saudi Arabia has also trimmed its oil production more than 100 percent of the output cuts it agreed to under the January 2017 production deal. In March, Saudi crude production was at 9.91 million bpd, below the deal’s output target of 10.058 million bpd. Russia, however, also part of the global oil protection cut agreement, increased its crude oil production by 0.2 percent to 10.97 million bpd in March, compared to the previous month and an 11-month high.  Though Citi has projected that the U.S. could bypass Saudi Arabia in the export of crude and petroleum products, U.S. crude oil exports have been relatively low compared to other major oil producers since the Obama Administration lifted the ban of American crude oil exports in 2015. Nonetheless, U.S. crude exports are poised for an upward trajectory. On Wednesday, the U.S. Energy Information Administration said the U.S. crude exports last week increased by 582,000 bpd to 2.331 bpd, an all-time high. The reason for the spike in exports also comes from the price divergence (arbitrage) between London-traded, global benchmark Brent crude and NYMEX, U.S.-benchmark, West Texas Intermediate (WTI) crude prices. As the spread between the two benchmarks widens, WTI trades at a significant cost advantage against Brent as well as other crude benchmarks. The WTI discount is a boon for refineries, particularly in Asia, that need the light sweet crude which yields higher priced refined petroleum products. Russia overtook Saudi Arabia as China’s top crude oil supplier in 2017. Saudi Arabia remained the second largest supplier to China in Q1 this year, although its exports were down 5.7 percent from a year ago. U.S. crude is also finding more buyers in Europe due to the Brent/WTI arbitrage. Market sources have estimated U.S. exports to Europe would average 800,000 bpd between mid-May and mid-June, including 25 million barrels in May overall. One source, according to a report in Hellenic Shipping News, said that of the 25 million barrels expected to land in May, 15 million barrels had already been placed with end-users.

Nonfarm payrolls increased by 164,000 in April, vs 192,000 jobs expected

The unemployment rate fell to 3.9 percent in April, an 18-year low, even as nonfarm payrolls rose by just 164,000, according to a report Friday from the Bureau of Labor Statistics. Economists surveyed by Reuters had expected payroll growth of 192,000 and the jobless rate to drop by one-tenth of a percent to 4.0 percent. The official jobs tally showed an increase from an upwardly revised 135,000 in March. . “Net-net this was a little bit softer than people were expecting. This goes into a lot of the other data that we’ve been seeing, … a little bit of a soft patch.”

The closely watched average hourly earnings number rose by 4 cents, equating to a 2.6 percent annualized gain, a bit off the pace from the previous month and a shade less than expected. The average workweek was unchanged at 34.1 hours.


A more encompassing measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons fell to 7.8 percent, the lowest since July 2001. Unemployment for blacks fell to a fresh record-low of 6.6 percent, down 0.3 percent.


The drop in the unemployment rate came amid another decline in the labor force participation rate to 62.8 percent, the lowest since January. The number of people counted as out of the labor force swelled by 410,000 to 95.74 million.


Professional and business services created the most new jobs, with 54,000, while manufacturing and health care added 24,000 apiece. Mining saw 8,000 new jobs. Services jobs overall led the way, with 119,000 new positions. Leisure and hospitality increased by 18,000.  The lack of wage pressure likely will be the one takeaway for Federal Reserve officials. Central bankers are on a pace to continue raising rates, but the lack of inflation could augur for a more patient pace than some in the market anticipate.

Special counsel Robert Mueller focusing sharply on links between Trump confidant Roger Stone and former campaign official Rick Gates, sources say

Roger Stone
Getty Images Roger Stone

Special counsel Robert Mueller is focusing intensely on alleged interactions between former top Trump campaign official Rick Gates and political operative Roger Stone, one of President Donald Trump’s closest confidants, according to sources with direct knowledge of the matter. Stone, a longtime advisor to Trump, is apparently one of the top subjects of the Mueller investigation into potential collusion between the Kremlin and the Trump campaign, sources told CNBC on condition of anonymity. The questions have been largely about what was discussed at meetings, including dinners, between Stone and Gates, before and during the campaign, said the sources, who have knowledge of the substance of the recent interviews. In February, Gates pleaded guilty to two counts stemming from the Russia investigation, and he is cooperating with Mueller’s probe. The new developments indicate that Mueller’s team is interested in Stone beyond his interactions with Wikileaks founder Julian Assange during the campaign. An attorney for Stone, Robert Buschel, did not deny the relationship between his client and Gates, but sought to downplay its importance. “Roger Stone did not have any substantive or meaningful interaction with Rick Gates during or leading up to the 2016 campaign,” Buschel told CNBC in a statement. An attorney for Gates declined to comment. The special counsel’s office declined to comment. The link between Gates and Stone goes back to their work at what had been one of the most powerful lobbying firms in Washington, D.C., which was founded by Stone along with former Trump campaign chairman Paul Manafort. The special counsel’s probe has yielded two indictments against Manafort, who is accused of several crimes, including bank fraud and conspiracy against the United States. Gates joined the firm as an intern more three decades ago, and it is unclear how much work he did with Stone at the time.The firm, called Black, Manafort, Stone and Kelly, was known for its work to help improve the image of controversial politicians, including Ferdinand Marcos of the Philippines, Mobutu Sese Seko of the Democratic Republic of Congo, and the Russian-aligned former president of Ukraine, Viktor Yanukovych.  Gates joined the Trump campaign in the spring of 2016 and became Manafort’s deputy. It was there where he became close to many of Trump’s close confidants. He remained with the campaign even after Manafort’s ouster. Gates then worked on Trump’s inaugural committee and co-founded the pro-Trump nonprofit group America First Policies. In March, Gates was pulled into the Mueller inquiry when the special counsel’s office filed a motion that claimed the former campaign aide had contact with a former agent of the Russian intelligence service in 2016. This came after Gates pleaded guilty to lying and conspiring against the United States, which could lead to possibly six years in prison. A sentencing date has yet to be announced. For Stone, this is another potential hurdle in an ongoing investigation that continues to focus on him, amongst others. Sam Nunberg, a former Trump campaign advisor, also said he was asked about Stone’s involvement with Wikileaks during his interview before Mueller’s grand jury in March. “Roger is certainly a subject,” Nunberg said. “The fact that Roger hasn’t been called in and the special counsel continues to ask questions about Roger’s possible activities during the election shows that at the very least he’s a subject.” Stone allegedly met with Assange, the Wikileaks founder, in August 2016. In an email leaked to The Wall Street Journal, Stone said, “I dined with my new pal Julian Assange last nite.” Stone has denied that he has met with the Wikileaks founder and said the email was in jest. During the 2016 campaign, Wikileaks published emails allegedly stolen from the Democratic National Committee’s servers by a Russia-linked hacker known as “Guccifer 2.0.”