EU leaders unite over Trump tariffs, foreign investments

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

 

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

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

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

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

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

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

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

Protestors March Across US Over Immigration Policy

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

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

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

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

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

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

A press release from the Department of Justice notes:

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

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

Comcast Blames Widespread Service Outage on Cut Fiber Lines

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

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

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

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

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

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

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

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

Dollar lower on euro strength

 
Getty Images

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

Can Trump Counter Soaring Gasoline Prices?

Ethanol plant

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

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

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

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

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

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

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

Saudi-Russian axis rules oil markets as Trump fights Iran

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

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

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

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

Note: Exports includes oil and refined products

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

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

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

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

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

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

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

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

Market rate rise may thwart Fed’s balance sheet plan

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

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

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

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

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

Reuters Graphic

MORE RESERVES NEEDED

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

Trump adviser sees having Putin summit as ‘a deliverable’

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

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

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

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

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

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

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

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

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

Apple starts building iPhone 6S in India to lower costs

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

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

 

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

Trump revs up attacks on Harley-Davidson over production move

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chicago Fed

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

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

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

 

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

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

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

Gold Price Expected to Fall

gold precious metal commodity natural resources

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

Europe migrants: Italy warns Schengen is ‘at risk’

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

The European zone of border-free travel could be in danger if no solution is found to the issue of migration, Italy’s prime minister has warned. At an informal meeting of 16 EU leaders in Brussels, Giuseppe Conte called for shared EU responsibility for rescued migrants and penalties for countries refusing to accept quotas. The meeting comes ahead of a full EU summit on migration next week. In recent days, Italy has refused to accept two migrant rescue ships. In a document presented at the talks, Mr Conte advocated for migrant “protection centres” to be established in other EU countries to relieve the burden on Italy, which has received over 600,000 migrants over the past four years. “Whoever lands in Italy lands in Europe…. Schengen is at risk,” the document said. The Schengen zone of passport-free travel covers most of the EU and some other European countries Italy’s new populist coalition government, which was formed earlier this month, has taken a hard line on migration and says it wants to deport half a million undocumented migrants. Last week it refused to accept 630 migrants aboard the charity rescue ship Aquarius, which was eventually diverted to Spain. Another vessel, Lifeline, is now stranded with around 230 people on board after both Italy and Malta denied it permission to dock. Sunday’s meeting was called for by German Chancellor Angela Merkel, who indicated that bilateral and trilateral agreements could be necessary if next week’s summit fails to reach an EU-wide agreement. She also urged a shared response to the issue of illegal migration, saying: “Everybody is responsible for everything. Wherever possible, we want European solutions. Where this is not possible, we want to bring together those who are willing and find a common framework for action.”

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

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

 

SHANGHAI — China gave its economy a shot in the arm on Sunday amid signs of a slowdown, as it freed up more than $100 billion for banks to use to help small businesses and heavily indebted companies. The money is intended to help Beijing dance a complicated two-step. China is trying to curb the country’s addiction to borrowing, which over the past decade has mired vast areas of the economy in debt. But that effort is showing signs of hurting growth. China is hoping it can help spur growth by steering loans where they are needed and blocking them where they are not. Beijing’s balancing act could soon get more difficult. President Trump is ratcheting up his threats to impose more tariffs on Chinese-made goods. While China’s economy is more than big enough to absorb the blows, Beijing could be forced to reopen the lending spigots if the threats devolve into an all-out trade war. China in essence told the country’s banks on Sunday that they do not have to sock away as much for a rainy day, allowing them to lend the money instead. The central bank said that, effective July 5, it would reduce by half a percentage point the share of overall deposits that commercial banks and other savings institutions are required to deposit at the central bank, a measure known as the reserve requirement ratio. It came with a catch: The banks must use the money to help heavily indebted companies or lend more to small businesses with little or no collateral to offer. It is the second time in just over two months that China has freed up money but given banks specific instructions on how to lend it. China’s debt has soared over the past decade, particularly at state-owned companies but more recently among households, threatening the country’s financial future and imperiling one of the world’s most powerful economic engines. That makes it difficult for China to lend more to see the economy through a slowdown. A further expansion of credit now could weaken confidence in China’s currency, which has already slid in value against the dollar over the past week because of worries about a possible trade war with the United States. China has been cautious in the past about cutting the reserve ratio during times when its currency appears to be under strain. The move on Sunday “means the People’s Bank of China has put internal economic development as the priority,” said Deng Haiqing, an economist at the China Finance 40 Forum, a Beijing research group. For 17 of the country’s biggest banks, the rules announced on Sunday will free up $77 billion for lending. But the central bank said that this money had to be used as part of programs in which banks obtain shares in deeply troubled companies in exchange for writing off some of these companies’ debts.

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

The president says illegal migrants should not have due process

President Donald Trump tweeted Sunday that the United States can’t allow migrants to “invade” the country and must be immediately sent back where they came from without due process. “We cannot allow all of these people to invade our Country. When somebody comes in, we must immediately, with no Judges or Court Cases, bring them back from where they came. Our system is a mockery to good immigration policy and Law and Order. Most children come without parents…” Trump tweeted. He added that our immigration policy is “very unfair to all of those people who have gone through the system legally.”

In the last week, the Trump administration triggered bipartisan backlash by implementing a zero-tolerance policy toward illegal border crossings, charging all individuals who cross the border illegally with unlawful entry. People who claim to seek asylum are also charged with unlawful entry and taken into custody until their case is processed. Federal law prevents children from being held in the same detention facility as those charged with unlawful entry, causing border patrol agents to separate children from their families. Trump signed an executive order Wednesday to stop separating parents and children at the U.S. border. “We are keeping families together, and this will solve that problem,” he said after signing the order in the Oval Office. “At the time, we are keeping a very powerful border, and it continues to be a zero tolerance [policy]—we have zero tolerance for people that enter our country illegally.” Families in detainment wait until their case is brought before an immigration judge. Trump signaled in his tweet that he doesn’t want migrants and asylum seekers to have to be processed through the court system. It isn’t the first time Trump has criticized the judicial process for migrants who cross the border illegally. Last week, he rejected calls from Congress to hire more immigration judges. “We don’t want judges, we want security on the border,” Trump said. Republicans in the House of Representatives tried to pass a conservative immigration bill last week but the vote failed. Trump urged congressional Republicans to “stop wasting their time” on immigration until after the midterm elections. Nick Bit: The due process Trump is taking away from desperate illegal allies he will soon if left unchecked take away from you!

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

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

‘American Citizens Will Be Next’: Former Ethics Czar Bashes Trump over Newest Immigration Rant

Former White House Special Counsel of Ethics Norm Eisen is hardly a fan of the current administration. That pattern continued Sunday with a pretty striking tweet. President Donald Trumwrote that people who “invade our Country” should be deported with “no Judges or Court Cases.” Eisen, an Obama official who now helps run a government watchdog, shot back with a post of his own. He’s trying to use the most vulnerable as a battering ram in his ongoing attack on the rule of law. But if he can deprive them of due process, American citizens will be next. How long before new chant at his rallies is “lock them all up”? Now is the time to hold the line Trump ran on a decidedly hardline immigration policy. It’s how he announced his campaign in 2015, calling Mexican immigrants rapists, “and some, I assume, are good people.” Since then, it has been one controversy over another. Critics often say his policy and proposal are racist and deprive people of their rights. The president and supporters instead highlight crimes by undocumented people. The debate somehow managed to become even more heated after Attorney General Jeff Sessionsannounced a “zero-tolerance” policy in May, and said that prosecutors would go after any and all people who illegally crossed the border. Accordingly, defendants would be separated from any children who accompanied them, pending legal proceedings. Sessions and White House Chief of Staff John Kellyhave described the policy as a deterrent. Trump signed an executive order on Wednesday ostensibly intended to end the separations, but it wasn’t immediately clear that the government would try to reunite families. “There will not be a grandfathering of existing cases,” Administration of Children and Families spokesperson Kenneth Wolfetold The New York Times. Officials walked that back, and have since announced moves to reunite families. On Saturday, the Department of Homeland Security said that Customs and Border Protection returned 522 children. As for Eisen, he is currently the chair of the board for CREW (Citizens for Responsibility and Ethics in Washington), a government watchdog that describes itself as nonpartisan. Nonetheless, it’s worth mentioning that he somewhat recently appeared in a video for a liberal political action committee, and told viewers that they should “take to the streets” if the president fired Special Counsel Robert Muellerin the Russia probe. In any case, he often criticizes Trump on Twitter, and his group isn’t shy about filing lawsuits and other types of complaints against the administration.

Corker on Trump’s ‘Abuse of His Authority’ on Tariffs: ‘There’s a Jailbreak Brewing’ in Opposition

Sunday on CBS’s “Face the Nation,” Sen. Bob Corker (R-TN) said there was a “jailbreak brewing” in Congress for opposition to President Donald Trump’s tariff policies. Corker said, “The president broadly has used section 232 of the Trade Act, which is national security. It’s absolutely an abuse of his authority. It’s being used against our European allies, Canada, Mexico, and many other countries.” He continued, “It is successfully united the world against us. There’s not a person at the White House that can articulate why they are doing this other than to create leverage on NAFTA. And I don’t know of a senator that isn’t concerned about the broad use of this. So the amendment is just to say that if he’s going to use 232, which has never, ever been used in this way, it’s absolutely an abuse of authority, if he’s going to use it, once he completes negotiations on tariffs, he has to send it to Congress. it’s our responsibility.” He added, “I think there’s a jailbreak brewing. I really do. I think people, especially as these tariffs are being put in place against us, these countermeasures, and as people realize that 22,000 companies, 22,000 companies, have asked for exemptions, the White House is only — or the Commerce Department is only dealt with 98 of those. There’s no basis to deal with them. It’s not unlike what happened on the immigration issue where there was no preparation. Are they going to grant these exclusions based on political contributions? Or are they going to base them on something else? So we’re getting ready to have a similar situation. We’re getting ready to have a similar situation to what happened on immigration policy, and I’m hoping there will be a jailbreak and we will move toward passing this legislation.”

Private companies are making millions from detaining immigrant kids taken from their parents

Some firms are making a windfall thanks to Trump’s family separation policy

Private companies are being paid millions of dollars in lucrative federal government contracts to provide housing and other services for undocumented immigrant children – including the thousands of recently arrived youngsters separated from their relatives at the U.S. border, Yahoo News reported this week. After reviewing publicly available contracts, Yahoo found 10 different contracts totaling approximately $92 million, awarded to five different vendors starting in September 2017. The contracts lasted for five years, through September 2022. The website first wrote about the contracts in a June 19 online post.. A Florida-based company, Comprehensive Health Services Inc. (CHSI), which boasts experience with “immigrant shelter services” received the bulk of the contracts. According to GovTribe.com, the company was awarded three contracts worth up to about $65 million. Yahoo wrote that CHSI last February was awarded a contract worth $30.9 million to operate an “emergency shelter” in Homestead, Florida, with “500 UAC beds,” an acronym referring to “unaccompanied alien children.” Southwest Key Programs was awarded two contracts in September 2017 worth up to $1.8 million each for providing “emergency shelter operations,” according to information posted on the site GovTribe.com. Yahoo, citing a report in ABC News, said the Texas based nonprofit runs 26 facilities for young migrants including Casa Padre in Brownsville, Texas. Casa Padre, located in a cavernous former Walmart, is the country’s largest licensed facility for immigrant children, with a capacity of 1,500.

A company in Maryland, Dynamic Service Solutions, in September of last year was awarded a government contract worth up to $8.7 million to provide “shelter care for unaccompanied children.” A fourth company, Dynamic Educational Systems, a subsidiary of the Arizona firm Exodyne, was awarded a pair of contracts worth up to approximately $5.6 million for “emergency shelter operations.” The fifth business, Virginia-based MVM, was awarded two contracts worth up to $9.5 million in September 2017 for “shelter operations” and for unspecified “emergency and other relief services,” Yahoo reported. At least 2,800 kids are separated from their parents. Where are they? President Trump earlier this week said his administration would stop separating immigrant parents and their children, most of whom are arriving across the southern U.S. border from Central America. But more than 2,500 youngsters already have been separated from their parents as they entered the United States, and it remains uncertain when – or even if – the government can figure out how to reunite them. The controversial policy of taking the children from their parents was part of a new “zero tolerance” policy in which U.S. officials arrested all undocumented adults entering the U.S. at any border cross other than official ports of entry. Once they are arrested, their children are taken away and held in separate facilities – a departure from past practice, when parents and young children were detained together or released pending future court proceedings.

Few client communications found so far in Michael Cohen documents: judge

FILE PHOTO: U.S. President Donald Trump's personal lawyer Michael Cohen arrives at his hotel in New York
FILE PHOTO: U.S. President Donald Trump’s personal lawyer Michael Cohen arrives at his hotel in New York City, U.S., June 20, 2018. REUTERS/Brendan McDermid

NEW YORK (Reuters) – A review of documents seized from U.S. President Donald Trump’s longtime personal lawyer Michael Cohen has so far turned up only a handful of communications between Cohen and his clients, a federal judge said in a written order on Friday. Cohen’s home and office were raided in April as part of a criminal investigation by Manhattan federal prosecutors. He has not been charged with any crime. Out of nearly 300,000 items reviewed so far, 161 are privileged and seven of them are communications between Cohen and a client containing legal advice, according to an order from U.S. District Judge Kimba Wood on Friday confirming findings by the special master. The order said most of the documents were communications between Cohen and his lawyers. Lawyers for Cohen and Trump could not immediately be reached for comment. Wood appointed a special master to review the documents before turning them over to prosecutors after lawyers for Cohen and Trump said they might include privileged attorney-client communications, which prosecutors are normally not allowed to see. Prosecutors said in an April court filing that they believed Cohen was “performing little to no legal work” and that they were primarily investigating his personal business dealings. Most of the roughly 3.7 million items seized from Cohen are still under review. On Friday, Wood ordered Cohen’s lawyers to identify for the special master, former federal judge Barbara Jones, by June 27 any remaining items they believe are privileged. The probe into Cohen’s dealings stems in part from a referral by Special Counsel Robert Mueller, who is investigating possible collusion between Russia and Trump’s 2016 campaign. Trump has denied that there was any collusion, and Russia has denied meddling in the election.

Saudis, Saying They Heard Price Complaints, Are Raising Oil Production

Mr. Falih also suggested that traders, who pushed up oil prices sharply on Friday after the OPEC decision, may have underestimated the major producers’ determination to act.
Khalid al-Falih, the Saudi energy minister, before the start of the meeting of the Organization of the Petroleum Exporting Countries on Friday.CreditStefan Wermuth/Bloomberg

 

VIENNA — Saudi Arabia said on Saturday that it was substantially increasing oil production in an effort to cool down rising prices and head off potential future shortages.

Khalid al-Falih, the Saudi energy minister, told journalists at the headquarters of the Organization of the Petroleum Exporting Countries here that Saudi Aramco, the national oil company, was already in the process of ramping up production to increase exports from Saudi ports in July.

“Ships have been scheduled, and it will be hitting the markets, I assume, in August,” he said. While declining to give a specific number, Mr. Falih said the kingdom would be increasing output by “hundreds of thousands, not tens of thousands, of barrels” — a substantial amount. The Saudi comments were the most tangible indication yet that the kingdom, Russia and other big exporters are reversing their 17-month policy of holding oil off the market. Complaints about artificially high oil prices from President Trump and other leaders of oil-consuming nations have played a role in the change of policy. There are also growing worries that declining supplies from Iran and Venezuela could make for an overly tight oil market in the future. An audit has found that Saudi Arabia has even more oil in the ground than previously estimated, he said that with decades of supplies to sell, Saudi Arabia needed to keep consumers buying oil and be mindful of their interests. “If one of the barometers to gauge that was a tweet from the president of the United States, so be it,” he said. “We will listen to it.” As Mr. Falih explained it, the big producers are shifting from a regime in which oil production has been tightly controlled and monitored to one in which countries with spare output capacity will be encouraged to exceed individual quotas to head off any price spikes. “They are preparing for more disruptions, and they are preparing to react to them as they feel is needed,” said Roger Diwan, a managing director of IHS Markit, a research firm, who was observing the meetings. Saudi Arabia gained this ability on Friday, overcoming objections from Iran, which expects its production to decline in the wake of the Trump administration’s recent decision to withdraw from the country’s nuclear deal and reimpose economic sanctions With Russia’s energy minister, Alexander Novak, at his side, Mr. Falih fleshed out OPEC’s cryptic decision on Friday to raise production by saying that OPEC and Russia were aiming to lift output by a collective one million barrels a day, or by about 1 percent of world supplies. The countries that have been holding back oil, including Saudi Arabia, Russia, Kuwait and the United Arab Emirates, will now work to fill the gaps. If the major producers are free to produce what they want, immediate shortages seem unlikely. Saudi Arabia says it has two million barrels in spare capacity, well over what is needed. Analysts estimate that Russia could increase production by 400,000 barrels a day. Kuwait and the United Arab Emirates could also add more oil.

Trump threatens 20 percent tariff on European Union cars

FILE PHOTO – Parked cars are pictures at the car terminal at the port of Valencia, Spain May 29, 2018. Picture taken May 29, 2018. REUTERS/Heino Kalis

WASHINGTON (Reuters) – U.S. President Donald Trump threatened to impose a 20 percent tariff on all European Union-assembled cars coming into the United States, a month after the administration launched an investigation into whether auto imports pose a national security threat. “If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump wrote on Twitter Friday. Autos stocks fell on the news. The European Autos Stocks Index fell sharply after Trump’s 20 percent tariff tweet and was last down 1.25 percent. Ford Motor Co shares went into the red and were down 0.5 percent, while General Motors Co shares were off 0.3 percent. The U.S. Commerce Department is investigating whether imports of automobiles and auto parts pose a risk to national security. The deadline for completing the investigation is February, 2019, but Commerce Secretary Wilbur Ross said Thursday said the department aims to wrap up the probe much earlier, by late July or August. The Commerce Department plans to hold two days of public comments in July on its probe of auto imports. Trump has repeatedly singled out German auto imports to the United States for criticism. At a meeting with automakers at the White House on May 11, Trump told automakers he was planning to impose tariffs of 20 or 25 percent on some imported vehicles and sharply criticized Germany’s automotive trade surplus with the United States. The United States currently imposes a 2.5 percent tariff on imported passenger cars from the European Union and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars. The tariff proposal has drawn sharp condemnation from Republican lawmakers and business groups. A group representing major U.S. and foreign automakers has said it was “confident that vehicle imports do not pose a national security risk.” The U.S. Chamber of Commerce noted that American auto production has doubled over the past decade, and said tariffs “would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war.” German automakers Volkswagen AG (Daimler AG and BMW AG build vehicles at plants in the United States. BMW is one of South Carolina’s largest employers, with more than 9,000 workers in the state. The United States in 2017 accounted for about 15 percent of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5 percent of VW brand sales and 12 percent of Audi sales.

Bitcoin tumbles after Japan watchdog orders exchanges to review business practices

An employee uses a smartphone as he demonstrates how to purchase bitcoins from a bitcoin automated teller machine (ATM) at the Coin Trader bitcoin retail store in Tokyo, Japan.
Tomohiro Ohsumi | Bloomberg | Getty Images An employee uses a smartphone as he demonstrates how to purchase bitcoins from a bitcoin automated teller machine (ATM) at the Coin Trader bitcoin retail store in Tokyo, Japan.

Bitcoin prices fell more than 5 percent on Friday after Japan’s financial regulator ordered several cryptocurrency exchanges to review their business practices. The digital currency traded at $6,349 as of 7:45 a.m. ET, breaking below $6,400 for the first time in about a week, according to CoinDesk. The order from Japan’s Financial Services Agency led bitFlyer — the largest crypto exchange in the country— to suspend the creation of new accounts while it makes improvements to its business, especially in its anti money-laundering measures.

Bitcoin’s Friday performance

Source: CoinDesk

“Our management and all employees are united in our understanding of how serious these issues are, as well as how serious we are in responding to them going forward,” bitFlyer said in a statement on their website. “In order to maximize our efforts towards building a suitable service and improving on the issues identified, we have temporarily suspended account creation for new customers of our own volition,” bitFlyer said. The agency gave the same order to five other other exchanges after finding weaknesses in their anti-money laundering controls.”In the long-term, it builds a better ecosystem and makes sure this is a legitimate asset class,” said Brian Kelly, founder and CEO of BKCM.”This is part of making sure exchanges are up to snuff.” In the short run though, it reduces the flow of new capital to the largest exchange in the largest market for bitcoin trading. Bitcoin trading in Japanese yen makes up more than 60 percent of the digital currency’s daily volume, according to data from CryptoCompare. Japanese regulators have been in the vanguard of regulation. It was the first country to adopt a national system to regulate cryptocurrency trading after its exchanges were subject to some well-known breaches including Mt.Gox. In March, Japanese regulators issued punishment notices to multiple exchanges and forced some to stop business altogether after the $530 million theft of digital currency from exchange Coincheck andissued a warning to Hong Kong-based Binance for operating in the country without a license.

Trump says GOP should ‘stop wasting their time on immigration’ until after midterms

Washington (CNN)President Donald Trump said Friday Republicans should wait until after the November midterm elections to pass immigration legislation, undercutting Congress’ ongoing efforts to pass a bill. “Republicans should stop wasting their time on Immigration until after we elect more Senators and Congressmen/women in November,” Trump tweeted. “Dems are just playing games, have no intention of doing anything to solves this decades old problem. We can pass great legislation after the Red Wave! Trump’s comments come as House Republicans have been struggling to wrangle support for a comprehensive immigration bill. On Thursday, Republicans decided to postpone a vote on it for the second time in less than a day. Senate and House leaders have also been trying to find a bill that would end family separations at the border. In a series of tweets Friday morning, Trump said electing more Republicans in November would result in a comprehensive immigration bill. “Elect more Republicans in November and we will pass the finest, fairest and most comprehensive Immigration Bills anywhere in the world. Right now we have the dumbest and the worst,” he tweeted. “Dems are doing nothing but Obstructing. Remember their motto, RESIST! Ours is PRODUCE!”

Tom Arnold tweets picture with Michael Cohen, says he ‘has all the tapes’

Arnold is hunting for ‘incriminating’ tapes of Trump as part of a show for Vice.
 
Tom Arnold: ‘Trump is an illegitimate president’

President Donald Trump’s embattled personal attorney, Michael Cohen, retweeted a photo of himself with comedian Tom Arnold — who happens to be working on a show with Vice that features him hunting for unflattering video of Trump. Arnold told NBC News early Friday that Cohen ― who is under investigation by federal prosecutors ― talked to him about the show, which is expected to air later this year. “We’ve been on the other side of the table and now we’re on the same side,” said Arnold, an outspoken Trump critic. “It’s on! I hope he [Trump] sees the picture of me and Michael Cohen and it haunts his dreams.” Cohen on Twitter Friday evening called the meeting “a chance, public encounter in the hotel lobby where he asked for a selfie” and he added: “Not spending the weekend together, did not discuss being on his show nor did we discuss @POTUS,” referring to Trump. Cohen added the hashtags #done and #ridiculous.

It was Arnold — who is Trump fan Roseanne Barr’s ex-husband — who posted the photo Thursday night with the caption “I Love New York.” Cohen then retweeted it without comment. Thursday night, NBC News asked Cohen about the photo and he referred inquiries to Arnold. Several hours later, Arnold contacted NBC News. He said he was in New York taping interviews for the Vice show and that he and Cohen met at the Loews Regency Hotel in Manhattan. A Vice producer said Cohen had not done an on-camera interview and they are “still working it.’ Vice announced in May that it had tapped Arnold to helm a show called “The Hunt for the Trump Tapes,” and investigate whether rumored tapes from the past showing the president in a negative light actually exist. “The host will draw on his high-profile network of celebrity friends, entertainment executives, and crew members he’s met over more than 35 years in showbiz to dig for evidence on Trump’s most incriminating moments — and, being a comedian and all, he’ll have a little fun along the way,” Vice said in the announcement of the show. Arnold would not say whether Cohen was planning to give him any tapes he might have of conversations with Trump. But he added, “This dude has all the tapes — this dude has everything.” “I say to Michael, ‘Guess what? We’re taking Trump down together, and he’s so tired he’s like, ‘OK,’ and his wife is like, ‘OK, f*** Trump,'” Arnold said, laughing. Later Friday, Arnold tweeted the photo again, seeking to emphasize that it was himself and not Cohen who suggested the takedown.

“Michael has enough Trump on his plate,” Arnold said. “I’m the crazy person who said Me & Michael Cohen were teaming up to take down Trump of course. I meant it.” Cohen is under investigation by federal prosecutors in New York for his business dealings, including a $130,000 hush-money payment to adult film star Stormy Daniels, who claims she had sex with Trump. The White House says Trump denies the allegation.

OPEC, Having Bolstered Oil Prices, Considers Ramping Up Production

Saudi Arabia’s energy minister, Khalid al-Falih, has led a shift among producers to raise production of crude oil.CreditHeinz-Peter Bader/Reuters

VIENNA — Major oil-producing countries moved on Friday toward an agreement to jointly raise exports, a decision that has driven considerable division among them but that could temper criticism from President Trump. Officials from the Organization of the Petroleum Exporting Countries, as well as other major producers like Russia, were set to increase their total output by less than 1 percent of the global oil supply. Though a relatively small addition to the world energy market, the move nevertheless signals a willingness by international suppliers to address rising prices. “We will come out with an agreement to ease market concerns about the availability of crude oil,” Khalid al-Falih, Saudi Arabia’s energy minister, said on Friday in Vienna. The price of Brent crude, the international benchmark, has been little changed at $74 a barrel over the past week, as traders expected a deal. But it briefly topped $80 a barrel last month. The deal to cut output, reached in 2016, had been an extraordinarily cooperative effort by OPEC and other producers. Countries that had historically been at odds agreed to restrict their overall crude sales to bolster prices, though Saudi Arabia and Russia held back the most.

But spurred by angry tweets from Mr. Trump, who repeatedly criticized OPEC for maintaining what he said were “artificially very high” prices, as well as complaints from major consumer countries like India, the agreement has been reconsidered.

Saudi Arabia, has led a sharp change in course after contentious debates that brought out political tensions between the kingdom and other major oil producers, especially Iran. The oil minister in Tehran, Bijan Zanganeh, stormed out of a preparatory technical meeting on Thursday, frustrated by what Iran saw as Saudi Arabia forcing through its proposals. In the space of a few weeks, Saudi Arabia has gone from being a price hawk, wary of raising production to alleviate increasing oil prices, to a dove. On Thursday, Mr. Falih told his colleagues at a seminar in Vienna that there could be a supply shortfall of 1.6 million to 1.8 million barrels a day of oil later this year, making a reversal of the cuts imperative.

Italy and Germany clash as migration rows split EU

BRUSSELS/ROME (Reuters) – Italian Prime Minister Giuseppe Conte said on Thursday a draft EU accord on migration had been withdrawn after he clashed with Chancellor Angela Merkel over an issue that is splitting Europe. German Chancellor Angela Merkel and Italian Prime Minister Giuseppe Conte leave after a news conference at the chancellery in Berlin, Germany, June 18, 2018. REUTERS/Hannibal Hanschke The leaders of four central European states, meanwhile, confirmed they would boycott an EU mini-summit on migration, taking a veiled swipe at Merkel by accusing countries of pushing the issue for domestic political reasons. The withdrawn declaration had been drafted ahead of an emergency meeting of 10 EU leaders set for Sunday in Brussels, with Germany and France hoping for a swift deal that could be approved at a full EU summit at the end of next week. It contained key elements Merkel needs to placate her rebellious coalition partner, the Bavaria-based Christian Social Union (CSU) and its head, Horst Seehofer, who is also Germany’s interior minister. But Rome objected to provisions that said asylum seekers would have to be returned to the EU country they had first logged their claim in, which often means Italy.

Rome has taken in some 650,000 boat migrants over the past five years, stoking anti-immigration sentiment in Italy and fuelling the rise of the far-right League, which forged a coalition government this month.

Conte, who had threatened not to go to Brussels on Sunday unless the draft was amended, spoke to Merkel on Thursday. “The chancellor clarified that there had been a ‘misunderstanding’. The draft text released yesterday will be shelved,” Conte wrote on Facebook, adding that he would now go to Brussels at the weekend. Berlin played down the dispute. “We are in constructive talks with Italy. The meeting on Sunday has only preparatory character,” a German government source said. Italian authorities appeared to relent on Thursday after at first refusing to accept 226 migrants on board a German rescue ship, saying later in the day they would take them in but impound the vessel.  Unless all EU states agree at their looming June 28-29 summit to share out asylum seekers more evenly, Seehofer has threatened to introduce an entry ban on the German border for all those who have already registered for asylum elsewhere..

Russia says it will impose retaliatory tariffs on US imports

Economic development minister says new tariffs will be applied in response to US moves on steel and aluminium

Oreshkin later told reporters that tariffs may apply to road construction equipment and some other items, but would not target medicines, according to Russian news agencies.

The European Union, India, China and Russia all have applied to the WTO to challenge the tariffs that took effect March 23. Washington argued they were for national security reasons.

Trump’s foreign policy will make Europe stronger, U.S. official says

FILE PHOTO – U.S. President Donald Trump participates in a roundtable discussion about trade in Duluth, Minnesota, U.S. June 20, 2018. REUTERS/Jonathan Ernst

BRUSSELS (Reuters) – President Donald Trump’s tough stance on Iran, new tariffs on European Union metal imports and U.S. demands for higher defence spending in Europe are part of a strategy to strengthen the West, a senior U.S. official said on Thursday. Wess Mitchell, U.S. Assistant Secretary of State for European and Eurasian Affairs, said that without such actions, U.S. and European diplomatic and military leadership would be overtaken by China, Russia and Iran. “Taking strong positions on these issues may not always lead to immediate agreement. But the long term costs of neglecting these things far outweigh political unity,” Mitchell told European and NATO officials, in a rare speech by a Trump administration official in Brussels. European leaders are deeply worried by Trump’s foreign policy and his “America first” rhetoric, while his May 8 decision to withdraw from the Iran nuclear deal undermined an agreement prized by Europeans. A Group of Seven summit in Canada earlier this month laid bare tensions between NATO allies after Trump’s decision to impose tariffs on steel and aluminium imports from the European Union and Canada on national security grounds. Mitchell, who studied in Berlin and speaks German, sought to place Trump’s decisions into a coherent policy plan that would benefit European countries because Trump was acting decisively to bring change, rather than relying on endless negotiations. “In all of these areas, with Iran, defence spending, trade, we are committed to finding a common way forward, we are committing to acting. We can debate, we can strategise, we can coordinate, but we must act,” he said. “In the actions we take, we are hoping to spur a multilateral response to address some of the world’s toughest challenges,” Mitchell said at the Carnegie Europe think-tank gathering in Brussels. Mitchell said U.S. import tariffs on European goods would end “structural trade imbalances and predatory trade practices” in U.S.-EU trade, which would weaken the West if they continue. Reimposing sanctions on Iran by withdrawing from the Iran nuclear accord would help stop Tehran’s missile programme and limit the regional reach of Iran’s Revolutionary Guard, he said. Mitchell also repeated Trump’s central message to NATO that European allies must spend 2 percent of economic output a year on defence to rebuild “atrophied European militaries.” Trump is expected at a NATO summit in Brussels in July, a year since he first came to the alliance and publicly admonished allies for not spending enough on defence. Many EU and NATO diplomats now view the U.S. president as an unknown quantity with a lack of interest in the transatlantic ties that Europe and Canada cherish, and who is unnecessarily stoking a global trade war that will hurt economic growth.

1-Month TBill Yield on Par With S&P

Short-term yields have spiked as the U.S. ramps up sales of bills to fund fiscal stimulus planned over the next two years. For money managers, the Treasury’s tilt to the short end has delivered a smorgasbord of cash-like assets, and encouraged guilt-free gorging on instruments untainted by credit risk and exposure to a sudden downturn in stocks.

(Bloomberg) — Chalk up another win for U.S. Treasuries. First it was the 12-month bill, and the six-month, and then the three. Now, the interest rate on the one-month Treasury bill is close to overtaking the dividend yield on U.S. stocks for the first time in a decade — underscoring why risk-free short-term government debt is trumping the allure of stocks for income-hungry investors.

One-month Treasury bills pay 1.84 percent versus 1.24 percent at the start of the year, while the trailing 12-month dividend yield on the S&P 500 looks relatively modest at 1.89 percent.

On a forward basis, the spread between U.S. stock payouts and the one-month government bill is approaching zero for the first time in a decade.

ETFs that invest in ultra short-term debt have drawn $17 billion so far this year, accounting for about 34 percent of their assets under management, according to data compiled by Bloomberg. Conversely, dividend funds have seen outflows in 12 of the last 13 weeks, including a six-week stretch of outflows in excess of $1 billion, according to EPFR Global. Given the payout trajectory, strategists say shorter-term U.S. debt will prove even more appealing if U.S.-China frictions intensify. “If trade tensions remain a front page issue going forward,” money will flow into Treasury funds at the expense of U.S. small-capitalization stocks, Evercore ISI strategists led by Dennis DeBusschere wrote in a note.

EU leaders worried over Irish border issue in Brexit talks –

FILE PHOTO: A defaced ‘Welcome to Northern Ireland’ sign stands on the border in Middletown, Northern Ireland, December 9, 2017. REUTERS/Clodagh Kilcoyne/File Photo

BRUSSELS (Reuters) – European Union leaders will express concern on Friday over a lack of progress in talks with London on how to avoid reimposing controls at the border between British-ruled Northern Ireland and the Irish Republic after Brexit. Leaders of the 27 countries that will remain in the EU after Britain leaves next year will take stock of negotiations on a withdrawal agreement and on a political declaration on what future relations with London should look like. A draft document outlining conclusions of their European Council meeting in Brussels singles out the lack of an operational arrangement for the Irish border, called by EU leaders a backstop solution. The backstop solution has been agreed in very general terms in December, but there has been no consensus since on how to put it in place in practice by Brexit day in March 2019. “The European Council expresses its concern that no substantial progress has yet been achieved on agreeing a backstop solution for Ireland/Northern Ireland,” the draft conclusions, seen by Reuters, said. Britain and the EU want to keep a free flow of people and goods over the border without returning to checkpoints, symbols of the three decades of violence in Northern Ireland that was largely ended by a 1998 peace deal. But finding a practical solution for customs checks needed for what will become an external border of the EU after Brexit has so far proven elusive. EU leaders will insist on Friday on “the need for intensified efforts” to find a solution, without which the whole withdrawal agreement, or a deal on a transition period until the end of 2020, cannot take shape. Time is running out because unless a final agreement on the withdrawal treaty, the transition period and a political declaration on future relations are agreed at an EU summit in October, there won’t be enough time for parliaments to ratify the treaty in Britain and the remaining EU countries before March 2019. “Work must also be accelerated with a view to preparing a political declaration on the framework for the future relationship,” the draft conclusions of the Friday meeting said. “This requires further clarity from the UK as regards its position on the future relationship.” EU officials have complained that Britain is not telling them what it wants from a future relationship, makings talks very difficult. British Prime Minister Theresa May is struggling to overcome differences on Brexit within her Conservative Party and has clashed with parliament over what powers it should have over the final deal. Wary that a withdrawal treaty might not be agreed in time, time, the EU leaders said governments should brace for the worst. “The European Council renews its call upon Member States and all stakeholders to step up their work on preparedness at all levels and for all outcomes,” the draft said.

Trump says he’ll cut off foreign aid to countries that send ‘not their best’ people

President Donald Trump delivers remarks at the National Federation of Independent Businesses 75th Anniversary Celebration in Washington, June 19, 2018.
Jonathan Ernst | Reuters President Donald Trump delivers remarks at the National Federation of Independent Businesses 75th Anniversary Celebration in Washington, June 19, 2018

President Donald Trump said Tuesday he wants to cut off aid to countries that “abuse” the United States by sending “not their best” people to its border, describing the proposal as a bipartisan approach. “We want to end the border crisis by finally giving us the legal authorities and the resources to detain and remove illegal immigrant families all together and bring them back to their country,” Trump told the National Federation of Independent Businesses’ 75th anniversary event in Washington. “Now think of all that aid that we give to some of these countries,” he said. “Well, I’m going to go very shortly for authorization that when countries abuse us by sending their people up — not their best — we’re not going to give any more aid to those countries.” Following applause from the crowd, he added: “Why the hell should we? This is a responsible, common-sense approach that all lawmakers should embrace, Democrats and Republicans.” The White House did not immediately respond to CNBC’s request for comment on Trump’s remarks. Trump’s proposal came amid a wide-ranging speech in which he defended his administration’s “zero-tolerance” policy on prosecuting illegal entrants to the U.S. Trump defended the administration’s policy, which has led to the separation of nearly 2,000 migrant children from their families between April 19 and the end of May, according to a Department of Homeland Security tally. The speech marked Trump’s latest threat to rescind foreign aid for another country. Trump had previously suggested that the U.S. could stop sending aid to Honduras following news reports that a “caravan” of asylum-seeking migrants from that country was traveling to the U.S.-Mexico border.

Powell, Draghi express concern over trade wars

Head of Reserve Bank of Australia calls prospect of trade war ‘incredibly disturbing’
Bloomberg Fed Chairman Jerome Powell and European Central Bank President Mario Draghi talk during the spring meeting of the International Monetary Fund.

The heads of several major central banks on Wednesday expressed alarm over the growing trade tensions in the world, warning it may push the global economy into the ditch. The European Union said earlier Wednesday it will implement tariffs on $3.2 billion worth of goods imported from the U.S. in response to the U.S. imposing tariffs on aluminum and steel imports from the EU on June 1. President Donald Trump on Monday asked his administration to identify a new list of $200 billion in Chinese goods that could be hit by tariffs, on top of $50 billion of tariffs already announced. “I think what’s happening is incredibly disturbing,” said Philip Lowe, the Governor of the Reserve Bank of Australia, during a forum sponsored by the European Central Bank, in Sintra, Portugal. So far, financial markets have taken a “benign” view on trade friction, but this might not last, Lowe said. But businesses are starting to pull back and delay new investments. “It wouldn’t take that much for financial markets to combine with businesses-that-are-waiting to turn this into a really big global event. It is very worrying,” Lowe said. Federal Reserve Chairman Jerome Powell acknowledged concerns. There seemed to be “rising” concern from business leaders about trade friction, Powell said. For the first time the central bank’s business contacts are talking about postponing hiring, investment and decisions, he said. But this talk hasn’t yet shown up in the economic data, he said. European Central Bank President Mario Draghi said he saw “no ground to be optimistic” about the trade tensions. Lessons from past trade disputes are all very negative, he said. Draghi said he was worried about the U.S. and other countries were beginning to take unilateral actions in what had been a multilateral world. “The potential changes that this may start are unknown and very worrisome,” he said. Bank of Japan Governor Haruhiko Kuroda said the dispute between China and the U.S. could have “a quite significant” indirect impact on the Japanese economy. “If this escalation of tariffs by U.S. and China continues and is actually implemented, that would significantly affect the East Asia supply-chain centering in China, Korea, Japan, Taiwan as well as Southeast Asian economies,” he said. “So I really hope this escalation could be rescinded and normal trading relationship between the U.S. and China prevail. So this is a matter of great concern,” Kuroda said.

Media stocks, techs boost S&P; Nasdaq hits record high

(Reuters) – A jump in technology and media stocks lifted the S&P 500 on Wednesday and pushed the Nasdaq to a record high, but the Dow remained under pressure from an escalation in the U.S.-China trade spat that has slammed global markets. The S&P 500 media index rose 1.1 percent with all its 14 members in positive territory. Viacom gained 2.4 percent, while DISH Network and Discovery were up about a percent. The so-called FAANG stocks – Facebook, Amazon, Apple, Netflix and Alphabet – were also higher. “You’ve got a little bit of a shift away from the macro concerns which will continue to be a headwind for this market until we get some answers on trade. Right now the focus is on M&A,” said Art Hogan, chief market strategist at B. Riley FBR in New York. Markets skidded on Tuesday after President Donald Trump’s latest tariff threats against Chinese goods intensified worries over an intensifying China-U.S. trade spat. The United States is also under fire from other countries for its protectionist measures. The European Union will start charging import duties of 25 percent on a range of U.S. products from Friday after Washington imposed tariffs on EU steel and aluminum at the start of June. “Considering the magnitude of headwinds that we face in trade, it appears as though it has been relatively ‘extra Dow’ and that’s because Dow companies are more heavily impacted due to strong dollar and trade talks,” Hogan said. Shares in General Electric Co, the last remaining original member of the 30-stock Dow, fell 1.1 percent after losing its position in the index. Walgreens, which will replace GE, gained 1.1 percent. Starbucks slipped 8.5 percent after the world’s largest coffee chain’s quarterly sales growth forecast missed analysts’ estimates. Oracle dropped 7 percent after the software maker’s current-quarter profit forecast fell short of analysts’ expectations. Advancing issues outnumbered decliners for a 1.71-to-1 ratio on the NYSE and for a 2.19-to-1 ratio on the Nasdaq.

Trump To Sign Executive Order Ending Family Separations

trump-sign-062018-lt.jpg

Facing widespread criticism over a policy that has led to children being separated from their parents at the U.S.-Mexico border, President Donald Trump indicated Wednesday he plans to sign an executive order to address the issue. The executive order Trump plans to sign would reportedly not end his administration’s “zero tolerance” policy for illegal immigrants but would allow families to be detained together. Trump told reporters at the White House that the action would be “pre-emptive,” as the House is expected to vote on two separate immigration bills later this week. “The Republicans want security and insist on security for our country. And we will have that,” Trump said. “At the same time we have compassion and want to keep families together.” “I’ll be signing something in a little while that’s going to do that,” he added. “I’ll be doing something that’s somewhat pre-emptive and ultimately will be matched by legislation I’m sure.” The move to sign the executive order is seen as a reversal by the president, who has previously argued that it is up to Congress to address the issue of family separations. Trump indicated during a closed-door meeting with House Republicans on Tuesday that he would support both a conservative immigration proposal drafted by House Judiciary Committee Chairman Bob Goodlatte, R-Virg., and a compromise bill negotiated by centrist and conservative Republicans.

Americans Still Aren’t Saving, Despite the Booming Economy

(Bloomberg) — Despite recent job gains, rising wages and falling unemployment, almost a quarter of Americans said they still have no emergency savings, according to an annual Bankrate.com report released Wednesday. The number of Americans who said they have no money readily available in either a checking, savings or money market account fell to a seven-year low of 23 percent, down from 24 percent last year, the study found. The poll was conducted in June by research firm SSRS, using a national sample of 1,006 people. “People are not making headway in savings, largely in part because they don’t prioritize saving,” said Greg McBride, chief financial analyst at Bankrate.com.  The percentage of Americans with some savings, but not enough to cover three months’ worth of expenses, rose to 22 percent from 20 percent last year, the report said. And the percentage with enough to cover expenses for three to five months ticked up to 18 percent, from 17 percent last year. Still, only 29 percent of Americans have enough emergency savings to cover at least six months’ of expenses—a financial planning norm. This is down from 31 percent in 2017.“Despite the enormous wealth gains we have seen in the stock market and in the housing market, that wealth is very unevenly distributed,” said Torsten Slok, chief international economist at Deutsche Bank AG in New York. That disparity, he said, is overriding any gains made in the job sector.  The median family simply has fewer resources, Slok said, pointing to a 2017 report he authored on U.S. income and wealth inequality. About a third of U.S. families have no wealth—or negative wealth—outside the value of their home. “It’s obviously not good from a vulnerability perspective,” he said.But the majority of Americans don’t seem to be worried about their financial situation. Sixty-two percent say they are somewhat or very comfortable with their emergency savings. Shockingly, about one in five Americans with no emergency savings at all said they felt comfortable, too.   McBride said they are kidding themselves. “In some cases, it’s just denial. They’ve never been out of work, had a big medical expense or experienced a significant event that threatened their emergency savings.”

Merrill Lynch Fined $42 Million by SEC for Misleading Clients Over Orders

The wealth manager told clients it was executing orders internally when they were really being passed on to other broker-dealers

The Securities and Exchange Commission (SEC), an American regulator, announced this Tuesday that it is fining Merrill Lynch $42 million. The fine or, to use the SEC’s terminology, ‘civil penalty, is the result of the wealth management firm misleading customers over order executions. From 2008 to 2013, Merrill Lynch continually lied to its clients by stating that it had executed their orders internally. In reality, these orders were being executed at other broker-dealers, including proprietary trading firms and wholesale market makers.  Internally, the company referred to this process as ‘masking’. The firm did not just lie to customers but also reprogrammed its systems, altering reports and records so as to make them give false statements regarding orders’ trading venues. It appears that the firm did all of this in order to get reduced access fees to exchanges. By masking the true executors, the firm was able to make itself look like a more active trading centre than it really was, hence enabling it to get reduced access fees. When Merrill Lynch stopped its masking efforts in May of 2013, it did not tell its customers about its past conduct. Instead the firm took additional steps to cover its tracks and ensure no one would discover what it had been doing. The SEC claimed in their statement on Tuesday that masking had effected over 15 million ‘child orders’ – segments of larger orders that have been broken down to be executed over a preset period of time. These 15 million order were comprised of a total of 5 billion shares.According to Stephanie Avakian, Co-Director of the SEC’s Enforcement Division, Merrill Lynch deprived customers of the the ability to ability to make informed decisions regarding their orders and broker-dealer relationships. Today’s announcement comes almost exactly two years after Merrill Lynched was fined for misleading customers on structured notes and breaking customer protection rules. On that occasion, the SEC fined the firm $425 million, over ten times the amount announced by the regulator yesterday. Nick Bit: Hello Baby Boomers Warning Warning you money is not their. GET YOUR MONEY OUT OF ALL ALL ALL Retirement accounts now and put them in Treasurydirect.gov. PAY YOUR TAXES. You are going to get a great big surprise… Money goes in real easy BUT as your are about to discover it will be hell getting your money. YOU HAVE BEEN WARNED!

Poll: Majority of Republicans back family separation policy

Poll: Majority of Republicans back family separation policy

A majority of Republicans support the Trump administration’s policy of separating migrant children from their parents when they are caught illegally crossing the U.S.-Mexico border, a Quinnipiac University poll found. Republican voters support the policy 55 to 35 percent, according to the poll released on Monday. They are the only listed party, gender, education, age or racial group to support the policy, according to Quinnipiac.

Sixty-six percent of American voters oppose the policy, according to the poll.

The Trump administration announced in April a “zero tolerance” immigration policy that required the federal government to prosecute adults caught illegally crossing the southern border. The policy led to thousands of migrant children being separated from their parents because the parents had to be prosecuted separately.

On Monday, Sessions called on Congress to pass legislation to build a border wall so there would no longer be a need for the administration’s zero tolerance policy.

President TrumpDonald John TrumpEx-ethics chief calls on Trump to end ‘monstrous’ migrant policies Laura Bush blasts Trump migrant policy as ‘cruel’ and ‘immoral’ US denies report of coalition airstrike on Syria MORE has said this cannot continue. We do not want to separate parents from their children,” Sessions told the National Sheriffs’ Association annual conference on Monday. “If we build the wall, if we pass legislation to end the lawlessness, we won’t face these terrible choices.” According to the Quinnipiac poll, 58 percent of Americans oppose building the border wall. However, 77 percent of Republicans supported building the wall as did 52 percent of white voters without college degrees.

Mergers to leave AT&T, Comcast as world’s most debt-burdened companies

Media giants will carry a combined $350 billion of bonds and loans

Bloomberg News Officials at AT&T and Comcast say the refinancing risk from their post-deal debt would be minimal because they plan to quickly repay much of the debt with cash generated from the combined businesses.

A wave of expected major-media mergers would transform AT&T Inc. and Comcast Corp. into the two most indebted companies in the world, a standing that carries uncharted risks for investors in the firms’ bonds. If the deals are finalized—AT&T T, -3.05%   plans to buy Time Warner Inc. TWX, +293.51%   and Comcast CMCSA, -3.20%   to purchase 21st Century Fox Inc. FOX, -0.40%  — the companies will carry a combined $350 billion of bonds and loans, according to data from Dealogic and Moody’s Investors Service. The purchases are meant to provide additional income to help the acquirers to weather turmoil sweeping their industries. But if the mergers falter, the record debt loads will give AT&T and Comcast little margin for error, fund managers and credit ratings analysts say. ‘It’s a very big number. It has fixed-income investors a little nervous and rightfully so.’

—Mike Collins, a bond fund manager at PGIM Fixed Income, which manages $329 billion of corporate debt investments

The debt-fueled buyouts by AT&T and Comcast are extreme examples of a decadelong surge in corporate borrowing that is stoking investor anxieties about what will happen as the economy slows and global interest rates rise. The ratio of debt to corporate earnings, commonly called leverage, has also risen, giving companies less financial cushion to absorb market shocks. Global corporate debt excluding financial institutions now stands at $11 trillion and the median leverage for such companies rated investment-grade has jumped 30% since the eve of the financial crisis in 2007, according to research by ratings firm Moody’s Investors Service. Most companies issue new loans and bonds to repay debt and investors are concerned about how companies will refinance their record-breaking debt loads when capital markets experience their next significant downturn.

Fed’s Bostic says economic optimism has ‘almost completely faded’ because of trade fears

Raphael Bostic
Christopher Dilts | Bloomberg | Getty Images Raphael Bostic

Fears over a potential trade war are dampening the prospects for above-trend economic growth, Atlanta Fed President Raphael Bostic said Monday. At a time when most economists have substantially boosted their outlooks for GDP gains, particularly in the second quarter, the central bank official cautioned that the enthusiasm could be misplaced. “I began the year with a decided upside tilt to my risk profile for growth, reflecting business optimism following the passage of tax reform. However, that optimism has almost completely faded among my contacts, replaced by concerns about trade policy and tariffs,” Bostic said during a speech in Savannah, Georgia, according to prepared remarks. The White House has been in a battle against China as well as multiple other trading partners as President Donald Trump seeks to reduce the difference between imports and exports. The administration has leveled tariffs against imported steel and aluminum and a slew of other prospects, with China in particular retaliating. In addition, the president has threatened to pull the U.S. out of NAFTA in favor of seeking unilateral agreements. Financial markets have been volatile as the trade tensions have grown, and Bostic said that fear is flowing over into the broader economy. “Perceived uncertainty has risen markedly,” he said. “Projects already under way are continuing, but I get the sense that the bar for new investment is currently quite high. ‘Risk off’ behavior appears to be the dominant sentiment among my contacts.” Bostic also said he agrees with the 0.25 percentage point interest rate hike the Federal Open Market Committee approved last week, though he said he’s not sure about the path of increases ahead. He said he does not seen signs of aggressive wage growth, with companies opting to train their own workers and investing in automation rather than hiring new employees at higher pay. “We want to ensure that the economy is not overheating, but we also do not want monetary policy to become too restrictive and threaten to choke off the expansion,” Bostic said.

Bitcoin jumps after New York approves Square’s Cash app for crypto trading

Bitcoin values on a smartphone.
Nhac Nguyen | AFP | Getty Images Bitcoin values on a smartphone.

Bitcoin spiked suddenly Monday afternoon following news users of the “Cash” mobile payments app could trade the cryptocurrency in New York. The largest cryptocurrency by market capitalization gained more than 4.5 percent to $6,793, its highest since Tuesday, according to CoinDesk’s bitcoin price index. Bitcoin was trading near $6,732 as of 2:26 p.m. ET. Cash is owned by Square and has 7 million monthly active users, the company said in its first quarter earnings call. On Monday, New York’s Department of Financial Services granted Square a virtual currency license, allowing users of the Cash app in the state to trade bitcoin. Bitcoin trading launched for most Cash users in late January.

Spotlight falls on Russian threat to undersea cables

The Trump administration’s new sanctions on Russia are casting light on the threat posed to the undersea cables that carry the world’s electronic communications between continents. The Treasury Department sanctioned five Russian firms and three Russian nationals this week for aiding the Kremlin’s domestic security service, the FSB. One of the companies is alleged to have provided support for Moscow’s “underwater capabilities” – including producing diving systems and a submersible craft for the FSB.

The Treasury Department alleged that Russia has been “active” in tracking underwater fiber optic cables that transmit communications across continents.

The threat to undersea cables is multifaceted. Foreign adversaries could track their whereabouts to sabotage them and cut rivals off from communications. Or they could be motivated by espionage. There has long been suspicion that Moscow is actively targeting these cables for spying purposes. More recently, Russia’s assertive maneuvers at sea have spurred concerns that Moscow might be looking to sabotage the systems through physical means – an effort that, if successful, could have debilitating economic and security impacts.

“A Russian submarine plus special forces undersea divers, they could create chaos in the world … by disrupting critical Internet infrastructure,” said Kenneth Geers, a former NSA official and cyber and national security expert at Atlantic Council.

Geers said the technology is “highly vulnerable” to physical sabotage. The cables carry 97 percent of all cross-continent electronic communications, including everything from personal communications, sensitive national security data and financial transactions. The New York Times reported in October 2015 that aggressive Russian naval operations near those cables triggered worries among some U.S. officials that Moscow could be plotting to attack them in the event of a conflict. “Underwater cables are an important part of critical infrastructure,” Langevin told The Hill on Friday. “Were those ever to be cut, there would be significant damage to our economy and to our everyday lives.” The Treasury Department on Monday sanctioned a Russian company, Divetechnoservices, for procuring “a variety of underwater equipment and diving systems” for agencies of the Kremlin, including the FSB. The company was also allegedly contracted to develop a $1.5 million submersible craft for the security service in 2011. Three Russian individuals were also sanctioned for acting on behalf of the company. The cables, most of which are owned by private telecommunications firms, run under the sea and come ashore at various locations throughout the globe, with sites in the U.S. and in other countries, like Japan. U.S. officials have said little publicly about the particular threat Russia and others might pose to these cables. It’s a sensitive topic, partly because the U.S. government also tapped undersea cables for intelligence purposes, as revealed in 2013 by former National Security Agency (NSA) contractor Edward Snowden. “The arteries upon which the Internet and our modern world depends have been left highly vulnerable. Whether from terrorist activity or an increasingly bellicose Russian naval presence, the threat of these vulnerabilities being exploited is growing,” Rishi Sunak, a British member of Parliament, wrote in paper published last December.

Trump ally Roger Stone met with Russian offering dirt on Hillary Clinton in 2016

Longtime Trump adviser Roger Stone met with a Russian national who was offering what he claimed was damaging information about Hillary Clinton in exchange for $2 million during the height of the 2016 presidential campaign. The previously undisclosed meeting was reported by the Washington Post on Sunday.

The Russian, who went by the name Henry Greenberg, did not disclose what information he was offering, Stone told the Post. In court records reviewed by the Post, Greenberg claimed in 2015 that he had been an FBI informant for 17 years until 2013. The Post notes there is no evidence that Greenberg was working on behalf of the FBI during the time of the meeting. Stone claimed Sunday that the meeting was a “set up” designed to compromise him and then-candidate Trump.

Michael Caputo, a communications adviser on the Trump campaign, arranged the meeting in Florida after Greenberg approached his business partner, the Post reports. Stone called the meeting a “waste of time” in text messages to Caputo following the meeting, which he provided to the Post.

In a letter to House Intelligence Committee Chair Devin Nunes obtained by CBS News, Stone’s lawyers maintain that Stone did not recall the May 2016 meeting or Greenberg’s name until after Caputo provided details of the encounter during an interview with special counsel Robert Mueller’s office. Stone, who was fired from the Trump campaign in 2015, has repeatedly denied colluding with the Russians.

Caputo met with Mueller’s team in May, saying in a statement to CBS News at the time that Mueller’s team “knows every single chapter and verse about the Trump campaign.” He added Mueller was “trying to find evidence of collusion, [but] I don’t think he will.”

In the letter to Nunes, Stone’s attorneys said he declined Greenberg’s offer and “immediately replied that he did not have $2,000,000 and even if he did, he would never pay for political information.”

“Mr. Greenberg laughed and said it was not Mr. Stone’s money he was seeking but rather Donald Trump’s money,” the letter says. “Mr. Stone told Mr. Greenberg that Donald Trump would never buy information either. The two men then parted ways and have never seen each other or communicated with each other in any way since. Most importantly, there was no information ever exchanged or anything ever provided in either direction.”

Stone, in a statement to CBS News, said he “flatly rejected” Greenberg’s proposal and “never discussed the matter with Donald Trump or anyone in the Trump campaign.”

Lawyers for Stone suggest that based on the information of the meeting, “these matters should be investigated to ascertain the facts surrounding the 2016 election and the role of the Federal Bureau of Investigation.”

Asked about the meeting on “Face the Nation” on Sunday, Trump attorney Rudy Giuliani said the encounter with Greenberg was “proof there was no collusion” between Russian entities and the Trump campaign.

Roger Stone apparently met with them, I don’t know. I haven’t talked to Roger. He’s never talked to the president about it. So where’s the collusion? And he said it was a waste of time. So yeah, sure, there was contact, as there was in that meeting. But that meeting led to nothing. This led to nothing,” Giuliani said. “The President of United States did nothing wrong. He was not involved with Russians. They can investigate from here to Timbuktu. They’re not going to find a darn thing.”

Nearly 70 Per Cent of Italians Back Salvini’s Stand Against EU on Migrant Ferries

Almost 60 percent of Italians say it was right to shut their ports to ships transporting illegal migrants from Africa, and 68 percent say populist interior minister Matteo Salvini was correct to stand up to the EU on the issue.

Salvini
MARCO BERTORELLO/AFP/Getty Images

The poll comes as a convoy of ships carrying more than 600 migrants docks at the Spanish port of Valencia, a week after they were picked up close to Africa for transport to Italy, before Salvini refused to take them. The right-wing Lega party leader and Minister of the Interior, who forms half of Italy’s new populist coalition government alongside Luigi Di Maio’s Five-Star Movement, appears to have popular support in Italy. The IPSOS poll was highlighted by Mathew Goodwin, an Associate Fellow at Chatham House, before being shared by Brexit campaign leader Nigel Farage. “This is just the beginning folks,” commented the former UKIP chief.

On Sunday morning, the Italian coast guard vessel Dattilo was the first of three boats carrying the 630 migrants to touch land in Spain, the Associated Press reports. The Aquarius, operated by SOS Mediterranee Sea and Doctors Without Borders, was next, bringing another 106 migrants, followed by the Italian navy ship Orione. Salvini said he would not allow Italy to become a “giant refugee camp,” but Spain’s new socialist prime minister Pedro Sánchez was keen to welcome the migrants, who travelled hundreds of miles past safe ports in Tunisia and Algeria to reach the European country.

This Saturday, Salvini barred two more migrant ferries, writing on Facebook: “Two other ships with the flag of Netherlands, Lifeline and Seefuchs, have arrived off the coast of Libya, waiting for their load of human beings abandoned by the smugglers.” He added: “These gentlemen know that Italy no longer wants to be complicit in the business of illegal immigration, and therefore will have to look for other ports [not Italian] where to go.” Under the EU’s asylum laws, migrants are supposed to apply for asylum in the member-state they enter, placing a massive burden on Italy and Greece, where hundreds of thousands of asylum-seekers have arrived in recent years.

Migrants are met by emergency workers after descending the Italian coast guard vessel Dattilo upon arrival at the eastern port of Valencia, Spain, Sunday, Jun. 17, 2018. (AP Photo/Alberto Saiz

Elon Musk e-mails Tesla employees urging ‘radical improvements’ to hit quarterly targets

Elon Musk, co-founder and chief executive officer of Tesla Inc.
Patrick T. Fallon | Bloomberg | Getty Images Elon Musk, co-founder and chief executive officer of Tesla Inc
An e-mail sent to all Tesla staff from Elon Musk on Friday night congratulated employees for the progress they’ve made on Model 3 vehicle production recently — but also said “radical improvements” are still needed in manufacturing to hit the company’s quarterly targets. During the company’s annual shareholders’ meeting earlier this month, Musk said it is “quite likely” Tesla will hit a weekly Model 3 production rate of 5,000 cars “by the end of this month.” Shortly thereafter, Tesla embarked on a broad restructuring. The company is cutting at least 9 percent of its workforce, but not employees involved in Model 3 production. Many investors have faith in Musk’s vision. Although Tesla has repeatedly set and missed production and delivery goals for the Model 3, the stock has trended higher since the shareholders’ meeting. It even trended 4.5 percent higher through the week after Tesla announced layoffs on Tuesday June 12th. This week, Elon Musk bought around 72,000 Tesla shares, spending nearly $25 million to do so. His purchase appears to have helped propel shares up from a closing price of $342.77 on Tuesday to a closing price of $358.17 on Friday.

In May, the all-electric Model 3 became the best selling mid-sized premium sedan in the U.S. At the same time, Tesla remains one of the most shorted stocks on the market. Bears say the company needs — but can’t raise — billions in new capital to hit its goals. Below is Elon Musk’s Friday night e-mail in its entirety, shared with CNBC by a current Tesla employee. (The note references the GA3, GA4, and EoL — these are general assembly lines and end of line areas within the company’s Fremont plant. It also references a man named Omead, presumably Omead Afshar, a project manager in the office of the CEO at Tesla.)

Russia, Saudi Arabia are getting increasingly chummy, and that has big implications for OPEC and oil prices

Russian President Vladimir Putin shakes hands with Saudi Crown Prince Mohammed bin Salman during their meeting at the Kremlin in Moscow, Russia June 14, 2018.
Yuri Kadobnov | Reuters Russian President Vladimir Putin shakes hands with Saudi Crown Prince Mohammed bin Salman during their meeting at the Kremlin in Moscow, Russia
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 Crown Prince Mohammed bin Salman and Vladimir Putin  met this past week  in Moscow. It appears both have agreed to cement the cornerstone of an already deepening energy and economic relationship, even as they look to alter a successful oil production deal that brought them together. On Friday, Russia’s energy ministry said it has reached a general consensus with Saudi Arabia that its newfound relationship with the Organization of Petroleum Exporting Countries (OPEC) should be “institutionalized,” and be extended to monitor the market and take action if needed. OPEC will meet this upcoming Friday, and then with Russia and other non-OPEC members after that. The chumminess of Russia and Saudi Arabia, however, is not unexpected. The relationship between two of world’s largest oil producers is being reinforced as OPEC is poised to grapple with several thorny issues. Chief among them is how to deal with the declines of supply from OPEC member Venezuela, and the effect of renewed sanctions on Iran by the United States. Iran is being sanctioned by the U.S. after President Donald Trump withdrew from a deal between Iran and six other countries designed to end its nuclear program. Trump said the deal was not tough enough, and under the renewed sanctions, companies around the world in essence will have to stop dealing with Tehran if they want to deal with the world’s largest economy.

“This time more than most, [OPEC’s meeting] is almost more about geopolitics than it is about the market,” said Daniel Yergin, vice chairman of IHS Markit.

The U.S. is definitely the elephant in the room, with pressure also coming from Trump, who has tweeted twice, including this past week, about high oil prices. “Of course, Trump has brought a new form of jawboning into play, but they’re hearing the same thing form the Indians who are very concerned about what high oil prices mean about growth and the economy, and next year’s election in India,” Yergin said.

“This is one time when U.S. mid-term elections are going to figure into what OPEC does,” said Yergin.

“The message from Trump is he is not wanting high oil prices, either as a result of sanctions on Iran or heading into the November congressional election. These elections could be of such decisive importance,” he added. When OPEC ministers meet, theyare expected to consider altering a production deal that has held back 1.8 million barrels a day from the market for the past 18 months. Russia has pushed for returning a million barrels per day back into the market relatively quickly. However, Saudi Arabia would like to try a lower amount to prevent the price from dropping too much, analysts said.

“I think they do something like return 500,000 barrels a day, but the actual increase will be a lot more”  said John Kilduff of Again Capital.

Oil prices took a beating Friday amid concerns about U.S. trade actions, and are off by more than 10 percent from last month’s high. The production cuts have been successful, shrinking world supplies and sending prices high enough to the point where Brent crude popped above $80 in May. Now that both Russia and Saudi Arabia are looking to return some barrels to the market, not all OPEC members agree. Iran, Venezuela and Iraq have all said the current production agreement should stay in place — mainly because they’re feeling the economic pinch of sanctions. “You now have in OPEC two countries that have been the subject of international sanctions and for one country, Iran, those sanctions have been supported by two members of OPEC, the [United Arab Emirates] and Saudi,” said Helima Croft, global head of commodities strategy at RBC. “There are a whole host of divisions going into this meeting.” There are also a complicated series of factors impacting the decision, and it’s not just about stabilizing the market. Already, Venezuela has lost about 700,000 barrels a day this year, and analysts expect U.S. sanctions could remove 500,000 Iranian barrels a day from the market by the end of the year, she said. “I think Iran becomes a story post-meeting,” Croft said, suggesting that Iran, Venezuela and Iraq may withhold support for a production boost. “Then you have the Saudis acting independently,” she said.The OPEC ministers meeting Friday will be followed by a meeting with Russia and other non OPEC producers. Ahead of that, they will be attending an OPEC summit Wednesday and Thursday, which includes global energy ministers as well as the CEOs of international companies like Total and BP, and U.S. producers Pioneer and Hess.

“It’s a weird dynamic. The Russians aren’t liking the U.S. getting up to 11 million barrels a day. They’ve foregone a lot of market share,” -John Kilduff, Again Capital

OPEC announced in March that it would invite U.S. producers to the seminar to discuss shale production and technology, as the world’s largest economy continues to churn out massive amounts of crude. The U.S. has been pumping record amounts of oil week after week, with the latest weekly figures showing production of just under 11 million barrels a day.

U.S. output has surpassed Saudi Arabia, and its growing market share is another factor that makes production cuts difficult for OPEC and Russia.

“The Saudis really have a sense of obligation with Trump, after he ditched the Iran nuclear deal,” said Again’s Kilduff. “It’s a weird dynamic. The Russians aren’t liking the U.S. getting up to 11 million barrels a day. They’ve foregone a lot of market share,” he added.

“They could stick it to the U.S. and send prices lower to shake out some of our shale guys. They’ve got something up their sleeve.”

U.S. drillers add oil rigs for fourth week in a row: Baker Hughes

(Reuters) – U.S. energy companies added one oil rig this week, the fourth consecutive week of increases, despite a 9 percent decline in crude prices over the past four weeks. Despite that decline, producers still expect higher prices for their oil in 2018 than they received in 2017. The oil rig count in the week to June 15 rose to 863, the highest level since March 2015, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday. That was the tenth time drillers added rigs in the past 11 weeks, although the increases have slowed down in June to about one a week. The U.S. rig count, an early indicator of future output, is much higher than a year ago when 747 rigs were active as energy companies have been ramping up production in tandem with OPEC’s efforts to cut global output in a bid to take advantage of rising prices. U.S. crude futures were on track to fall for a fourth week in a row this week, falling below $65 per barrel on Friday ahead of an OPEC meeting next week where Saudi Arabia and Russia were expected to say they will boost output.

So far this year, U.S. oil futures have averaged $65.15 per barrel. That compares with averages of $50.85 in 2017 and $43.47 in 2016.

Looking ahead, crude futures were trading around $64 for the balance of 2018 and below $62 for calendar 2019. In anticipation of higher prices in 2018 than 2017, U.S. financial services firm Cowen & Co this week said the exploration and production (E&P) companies they track have provided guidance indicating a 13 percent increase this year in planned capital spending. Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast average total oil and natural gas rig count would rise to 1,038 in 2018, 1,097 in 2019 and 1,232 in 2020, up from a projected 1,025 in 2018 and 1,125 in 2019. So far this year, the total number of oil and gas rigs active in the United States has averaged 999, up sharply from 2017’s average of 876. That keeps the total count for 2018 on track to be the highest since 2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.

The U.S. Energy Information Administration (EIA) projected average annual U.S. production will rise to a record high 10.8 million barrels per day (bpd) in 2018 and 11.8 million bpd in 2019 from 9.4 million bpd in 2017.

The current all-time U.S. annual output peak was in 1970 at 9.6 million bpd, according to federal energy data.

Volcker ‘fix’ may cause new headaches for Wall Street

WASHINGTON (Reuters) – A proposal to simplify a rule banning banks from proprietary trading, rather than making life easier for Wall Street, could ensnare billions of dollars’ worth of assets not currently caught by the regulation. This little-noticed wrinkle, if it were to make it into the final rule, could prompt Wall Street firms to overhaul their treasury, trading and merchant banking operations and change their accounting practices, lawyers and executives told Reuters. On May 30, U.S. regulators unveiled a plan to modify the so-called Volcker Rule introduced following the 2007-2009 financial crisis, aiming to make compliance easier for many firms and relieving small banks altogether. Wall Street has long complained about the complexity and subjectivity of the rule, which bans banks that accept U.S. taxpayer-insured deposits – such as Goldman Sachs Group Inc JPMorgan Chase & Co and Morgan Stanley from engaging in short-term speculative trading. Republicans, the business lobby and analysts initially welcomed the proposal as a long overdue move to streamline and clarify the rule, while consumer advocates and progressive Democrats criticized it as a risky Wall Street giveaway. But after digesting the 494-page consultation, financial industry executives and lawyers said it could actually create new headaches for big banks by banning a swath of trades and long-term investments not currently covered by the rule. “It’s going to capture trades that wouldn’t be captured by the current regulation and that’s the bogeyman people would want to avoid in this proposal,” said Jacques Schillaci, a banking lawyer at Linklaters LLP who has studied the proposal. The draft is subject to a 60-day consultation period during which industry participants will lobby for changes, with a final version, which is likely to be substantially revised, expected around January. One of the most-hated aspects of the Volcker Rule presumes purchases and sales of instruments within 60 days count as proprietary unless the bank can prove they qualify for an exemption, such as market making or hedging. Regulators have proposed replacing it with a more objective test, based on the accounting treatment of the instruments traded.

Under the new test, trading activity by desks that daily book net realized or unrealized gains and losses exceeding $25 million is only allowed if the bank shows that trading qualifies for the rule’s exemptions. Since the crisis, however, banks have applied this mark-to-market or “fair value” accounting treatment to a range of longer-term investments to better manage their risk. As a result, the proposal would bring under the rule the vast majority of equity investments, derivatives and a range of fixed income securities that banks hold for many years but not to maturity. While some of these investments, such as U.S. treasuries, other government-related securities and some derivatives, would qualify for exemptions, many would end up being prohibited given the relatively low $25 million threshold, the industry experts said. This could disrupt how bank groups structure their trading desks and manage their strategic investments and risk. The proposal may also prompt banks to elect not to mark-to-market some assets.

Trump’s danger on North Korea? Raised expectations

Trump’s danger on North Korea? Raised expectations
© Getty Images
President Trump’s rhetoric has raised expectations for an ironclad nuclear deal with North Korea following his historic summit with Kim Jong Un, posing diplomatic and political risks for the White House if the unpredictable country fails to follow through.

Trump even declared that North Korea no longer poses a nuclear threat, a statement contradicted by his own pick to serve as U.S. ambassador to South Korea, and a remark that experts said could be a serious mistake. “Declaring victory prematurely is irresponsible because it sends the wrong message to the North Koreans about the expectations for the process,” said Kelsey Davenport, director of nonproliferation policy at the Arms Control Association. North Korea has taken no verifiable steps toward dismantling its weapons program and the two sides still disagree on what it means to denuclearize.

By declaring the problem “solved,” as Trump did Friday, he is creating a disincentive for Pyongyang as it considers making concessions to Washington in nuclear talks.

“Trump has undercut his negotiators and made it more difficult for [Secretary of State Mike] Pompeo to lead a process to nail down the definition of complete denuclearization,” said Davenport. Trump has made nuclear diplomacy with North Korea his No. 1 foreign policy goal and failing to secure an agreement would be a major blow both at home and abroad. The president even acknowledged during a post-summit news conference the possibility his hopes for a deal could be dashed. “I think he’s going to do these things,” he said of Kim. “I may be wrong. I mean, I may stand before you in six months and say, ‘Hey, I was wrong.’ I don’t know that I’ll ever admit that, but I’ll find some kind of an excuse.” Pulling off the summit with Kim was an achievement for Trump, but he left Singapore without an agreement in hand guaranteeing the “complete, verifiable and irreversible” denuclearization of North Korea — the conditions the U.S. set for a deal. Trump and Kim instead signed a joint statement that included a commitment from the North Koreans to “work toward the complete denuclearization of the Korean Peninsula” without spelling out how or when it will happen. North Korea has made such pledges in the past, only to violate them. It will be up to Pompeo and his North Korean counterparts to work out the specifics of an elusive deal in the coming months.

Trump, in the meantime, has tried to soften the ground around the negotiating table by praising the brutal North Korean leader.

He told reporters traveling with him in Singapore they would be surprised at how “smart” and “talented” Kim is, calling him a “very good negotiator” who “wants to do the right thing” — all while brushing aside his abysmal human rights record.

George Will: Trump Doesn’t Inspire GOP ‘Cult’ – It’s ‘Fear’

Image: George Will: Trump Doesn't Inspire GOP 'Cult' – It's 'Fear'

(Dr. Scott M. Lieberman via AP) By Wanda Carruthers

Conservative columnist George Will disagreed with recent comments by Tennessee GOP Sen. Bob Corker who described supporters of President Donald Trump as “cult-like,” instead maintaining that what the president instilled in the Republican Party was “fear,” The Hill reported Saturday. “We are in a strange place. I mean, it’s almost, it’s becoming a cultish thing, isn’t it? And it’s not a good place for any party to end up with a cult-like situation as it relates to a president that happens to be of — purportedly, of the same party,” Corker told reporters Wednesday. Will, in an appearance on the HBO show “Real Time With Bill Maher” on Friday, took issue with Corker’s assessment. “It’s not a cult. A cult implies misguided, if sincere, worship. This is fear,” Will said. “They’re not worshipful, they are invertebrates. They are frightened.” Maher argued that Trump’s high approval nationally among Republican voters did not indicate fear, to which Will then attacked people who voted for the president, calling them “vengeful.” “Well, it’s a cult of personality for his supporters, and his supporters are nothing if not vengeful,” Will said. Will then cautioned against the idea that the popularity of a political figure such as Trump could only happen in the Republican Party. “Let me give Democrats a warning,” Will told Maher. “In the summer of 2015, you had 18 Republican candidates on stage and the most lurid stood out. In the summer of 2018, there will be 18 Democrats on stage and maybe the most lurid will stand out there. “The idea that only the Republican Party or only the right can produce something like Donald Trump is naive and cheerful,” he said. Will, a frequent critic of Trump, last December called him the worst president in U.S. history. “He completed his remarkably swift — it has taken less than 11 months — rescue of the 17th, Andrew Johnson, from the ignominy of ranking as the nation’s worst president,” Will wrote in The Washington Post.

As trade war with China looms, U.S. readies second wave of duties

FILE PHOTO: Security guards walk in front of containers at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. REUTERS/Aly Song/File Photo
BEIJING/WASHINGTON (Reuters) – The United States has nearly completed a second list of tariffs on $100 billion (75.44 billion pounds) in Chinese goods, as President Donald Trump prepares to enact an initial round of duties that is expected to trigger an in-kind response from Beijing, several sources said.
The second wave of products has been cued up as Washington prepares to announce on Friday a list of about $50 billion of goods to be targeted. They are part of Trump’s decision to go forward with “pretty significant” tariffs, an administration official said on Thursday.
The $100 billion list will be subject to the same public comment and hearing process as the $50 billion list, so it could take 60 days or more to put into effect, three sources familiar with the Trump administration’s thinking on tariff plans told Reuters. The list is intended to minimise the impact on U.S. consumers and businesses by selecting goods where there are ample alternative supplies from other countries. Eliminating any impact may be impossible. “There’s no question, that to get to $100 billion you’re going to hit consumer products coming in from China,” a person briefed by Commerce Secretary Wilbur Ross told Reuters. This person also said Ross had said the list would take aim at products for which China supplied 33 percent or less of total U.S. imports in individual product categories, making it easier to shift to other countries’ supplies.

U.S. President Donald Trump speaks during a news conference after his meeting with North Korean leader Kim Jong Un at the Capella Hotel on Sentosa island in Singapore June 12, 2018. REUTERS/Jonathan Ernst

The person, like the other sources familiar with the administration’s thinking, declined to be identified because they were not authorised to speak to the media.

A Reuters analysis of U.S. Census Bureau import data in April showed that there were about 7,600 consumer and industrial goods still available for tariffs with a combined value of $101 billion in which China accounts for 40 percent or less of U.S. imports.

Another person familiar with the administration’s thinking said it could be difficult to reach $100 billion with a 33 percent threshold.

Press officials at the U.S. Commerce Department and U.S. Trade Representative’s office declined to comment on the tariff list plans.

FILE PHOTO: A container truck moves past containers at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. REUTERS/Aly Song/File Photo

Trump has pledged to enforce fair and reciprocal trading relations with China, with the U.S. bilateral trade in goods deficit having reached $375 billion last year, and amid long-running complaints of what foreign companies see as forced technology transfers and market restrictions.

On Thursday, China reiterated its preference for dialogue to resolve differences, but said it was ready to respond if Trump moved forward with tariffs.

Speaking alongside U.S. Secretary of State Mike Pompeo in Beijing, Chinese State Councillor Wang Yi said there were two choices when it came to trade.

“The first choice is cooperation and mutual benefit. The other choice is confrontation and mutual loss. China chooses the first,” Wang told reporters. “We hope the U.S. side can also make the same wise choice. Of course, we have also made preparations to respond to the second kind of choice.”

China has published its own list of threatened tariffs on $50 billion in U.S. goods, including soybeans, aircraft, and autos, and has said it would hit back if Washington followed up with further measures.

Trade worries, oil pull Wall Street lower

(Reuters) – U.S. stocks fell on Friday after the United States announced tariffs on $50 billion worth of Chinese goods, prompting Beijing to warn of retaliation and reigniting fears of a trade war between the world’s two largest economies. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., June 4, 2018. REUTERS/Lucas Jackson Also weighing on the indexes were oil prices, which tumbled more than 3 percent ahead of an OPEC meeting next week where two of the world’s biggest producers are expected to indicate an increase in output. [O/R] The energy index .SPNY fell 1.8 percent and was the biggest decliner among the major S&P sectors. President Donald Trump said in a statement that a 25 percent tariff would be imposed on an initial list of strategically important imports from China from July 6 and vowed further measures if Beijing struck back. In response, China’s Commerce Ministry said it planned to impose tariffs of similar size and intensity. Beijing has published its own list that targets $50 billion in U.S. goods, including soybeans, aircraft and autos. The two countries have held three rounds of high-level talks since early May that have yet to yield a compromise, with the United States pressing China to resolve issues over its industrial policy, market access and a $375 billion trade gap. Boeing (BA.N), the single largest U.S. exporter to China, fell 2 percent, dragging the Dow lower for the fourth day in a row. Construction equipment maker Caterpillar (CAT.N) dropped 2.9 percent, agricultural trader Bunge (BG.N) 1.9 percent and automaker General Motors (GM.N) 1.5 percent. “With the announcement of the tariffs, there’s a real risk that we can see a continued increased escalation,” said Robin Anderson, senior economist at Principal Global Investors in Des Moines, Iowa. “But you still have the underlying environment of strong economic fundamentals, at least in the U.S., which dampens the negative impact coming from these pockets of volatility.”

John Kennedy: Big Banks Trampling on Second Amendment

Image: John Kennedy: Big Banks Trampling on Second Amendment

Sen. John Kennedy, R-La. pointed out that both Bank of America and Citigroup now have policies that place restrictions on what their business banking clients can sell and manufacture when it comes to firearms Sen. John Kennedy, R-La., argued in a new opinion piece that big banks are threatening to violate Americans’ Second Amendment rights. Writing for Fox News, Kennedy pointed out that both Bank of America and Citigroup now have policies that place restrictions on what their business banking clients can sell and manufacture when it comes to firearms. “Grocery stores might decide not to sell liquor or lottery tickets, even though it’s legal for people of a certain age to buy them. Grocery stores might ask customers to leave their firearms at home,” Kennedy wrote. “But banks are not grocery stores. A grocery store doesn’t need a taxpayer-funded government charter to operate, a taxpayer-funded government corporation (the Federal Deposit Insurance Corporation) to insure its deposits, or a taxpayer-funded government bank to pay it interest. Banks do.” Kennedy noted that banks like these two are tagged by the federal government as too big to fail, meaning they can be bailed out by American taxpayers to they can stay afloat. The banks’ new policies, the lawmaker argued, are creating a massive rift. “By playing politics and forcing policies that trample on the Second Amendment, Citigroup and Bank of America have established red banks and blue banks,” wrote Kennedy, who then expressed concern of other banks following suit. But big banks, Kennedy said, have no business trampling on the Constitution.

Chinese stocks tumble amid trade fight, ETF falls for seven straight days

An investor obverses the screen at an exchange hall on the first day of Shenzhen-Hong Kong Stock Connect on December 5, 2016 in Nanjing, Jiangsu Province of China.
VCG | VCG | Getty Images An investor obverses the screen at an exchange hall on the first day of Shenzhen-Hong Kong Stock Connect on December 5, 2016 in Nanjing, Jiangsu Province of China

The iShares China Large-Cap ETF (FXI) fell more than 1.5 percent in midday Friday trading, tracking for its first seven-day losing streak since December 2016. The ETF tracks major Chinese companies traded in Hong Kong. Friday’s drop came as major U.S. stock indexes fell on fears of a trade war between the U.S. and China. For the week, the ETF was trading 3.9 percent lower, tracking for its worst week since March 23.

In addition to worries about trade, Chinese data on retail sales and industrial activity missed expectations, raising concerns about economic slowdown. Just seven components are up for the week, led by Anhui Conch Cement. Chinese tech giant Tencent, the largest company by market capitalization in the ETF, fell 1.25 percent in the last week. Other major decliners included Industrial and Commercial Bank of China and PetroChina. ZTE was by far the worst performer, falling nearly 49 percent this week after ending a nearly two-month trading halt on Wednesday. The Chinese telecom equipment giant settled with the U.S. last week to pay up to $1.4 billion for violating a March 2017 agreement. Until it makes the payment, ZTE remains banned from buying from U.S. components. The second-worst performing stock, China Molybdenum, a chemicals company, fell 14 percent this week.

China holds missile drills in South China Sea amid heightened tension

BEIJING (Reuters) – China’s navy carried out drills in the South China Sea to simulate fending off an aerial attack, state media said on Friday, as the country trades barbs with the United States over responsibility for heightened tension in the disputed waterway. U.S. Secretary of State Mike Pompeo expressed concern during a visit to Beijing on Thursday over China’s efforts to militarise the seas. His remarks came after a flurry of U.S. activity in the region, including reports last week that U.S. Air Force B-52 bombers had flown near disputed islands that drew a sharp rebuke from China. China’s navy carried out a simulated missile attack in an unspecified area of the South China Sea using three target drones making flyovers of a ship formation at varying heights, the official army newspaper said. The drills were part of efforts by a training base, also unspecified, to prepare for real-life combat with aerial targets after China’s leadership said some training failed to prepare troops effectively, it added. The United States and China have frequently sparred over who is militarising the South China Sea, with Beijing blaming tension on actions such as the “freedom of navigation” operations by the U.S. navy. Washington says such operations are necessary to counter China’s efforts to limit nautical movement there. A U.S. Navy destroyer sailed through waters claimed by China in May just days after the United States withdrew an invitation to it for a major U.S. hosted naval drill. Critics have said the operations have little impact on Chinese behaviour and are largely symbolic. Pentagon officials have long complained that China has not been candid enough about its rapid military build-up and its use of South China Sea islands to gather intelligence. In addition to China, Brunei, Malaysia, the Philipines, Taiwan, and Vietnam all have competing claims in the South China Sea. Strengthening the navy has been a key part of China’s ambitious military modernisation overseen by President Xi Jinping, as it seeks to project power far from its shores. State television on Friday showed pictures of Xi touring a submarine in the northern port city of Qingdao, where was briefed on its weapons systems, chatted with sailors and asked questions about the submarine fleet’s training.

Reporting by Christian Shepherd; Additional reporting by Ben Blanchard; Editing by Clarence Fernandez

Trump’s defense secretary slams Putin: ‘He attempts to undermine America’s moral authority’

Defense Secretary James Mattis tore into Russian President Vladimir Putin Friday for underming  US elections

Defense Secretary James Mattis waits outside of the Pentagon in Washington, D.C., April 23, 2018.
Department of Defense photo
Defense Secretary James Mattis waits outside of the Pentagon in Washington, D.C., April 23, 2018.

Defense Secretary James Mattis tore into Russian President Vladimir Putin Friday for assaulting Western democracy and undermining one of America’s most powerful alliances, amid President Donald Trump’s repeated calls for Russia’s return to the G-7 nations. “Putin seeks to shatter NATO,” Mattis said during his remarks at the U.S. Naval War College graduation. “He aims to diminish the appeal of the Western democratic model and attempts to undermine America’s moral authority.” Mattis singled out Putin’s seizure of the Crimean Peninsula from Ukraine in early 2014.  In response to Putin’s actions, the United States, the European Union and a number of other nations imposed sanctions against Russia.  And the G-8 nations kicked Russia out of the group, marking a return to the G-7 format, made up of the United States, the United Kingdom, France, Germany, Italy, Canada and Japan. “For the first time since World War II, Russia has been the nation that has redrawn international borders by force of arms in Georgia and Ukraine, while pursuing veto authority over their neighbors’ diplomatic, economic and security decisions,” Mattis said. “His actions are designed not to challenge our arms, but to undercut and compromise our belief in our ideals,” he added.

As China Curbs Borrowing, Growth Shows Signs of Faltering

An economic slowdown in the country — coupled with the knock-on effects of widening trade disputes and slowing growth in Europe — may augur poorly for the global economy
A factory in Hangzhou, China

 

 

SHANGHAI — China’s government has been trying to break the country’s addiction to ever-rising debt, but its effort to crack down on easy money is starting to hit growth in the world’s second-biggest economy. Beijing has been concerned in recent years about the increased reliance on credit to keep the economy expanding briskly, worrying that it could lead to a financial crisis, or to a long period of stagnation like the one in Japan after the real estate market burst in the early 1990s. But curbing debt may have significant consequences in China and elsewhere. Countries around the world are much more closely tied to China than ever before, not just because of its role as the world’s biggest manufacturer by far, but also, increasingly, as a consumer. An economic slowdown in China — coupled with the knock-on effects of widening trade disputes and slowing growth in Europe — may augur poorly for a global economy that even recently seemed in rude health. Domestically, China’s credit crackdown has affected smaller businesses hardest. Though the country often appears to be dominated by its vast conglomerates and hulking state-owned enterprises, its economy is, in reality, somewhat more reliant on small businesses than its Western counterparts. And the way Beijing has gone about curbing lending in recent months is unintentionally hitting the most entrepreneurial segments of the economy, the governor of China’s central bank acknowledged in a speech on Thursday in Shanghai. Over all, there is growing evidence that a credit crunch is taking a toll on the Chinese economy. The National Bureau of Statistics released data in Beijing on Thursday showing that investment, retail sales and industrial production all slowed in May. The slowdowns in investment and retail sales were particularly sharp and unexpected. With that backdrop of eroding economic growth, the People’s Bank of China, the country’s central bank, conspicuously did not match on Thursday the Federal Reserve’s increase to interest rates on Wednesday. It had at least partially matched previous Federal Reserve interest rate rises since the autumn. With the Chinese economy showing signs of slowing and the authorities making it harder to borrow, small businesses are particularly vulnerable. They represent about three-fifths of economic output in China, compared with around half in Germany, Japan and the United States, according to Yi Gang, the governor of the People’s Bank of China. Now many of those small businesses are struggling for loans because of a wide-ranging government crackdown. Moody’s and Standard & Poor’s both downgraded China’s sovereign debt credit rating last year because of concerns about the country’s debt overhang. Even before deciding on Thursday morning not to match the Fed’s rate increase, though, the Chinese government had already made a pair of moves that appear to have been elaborately crafted to channel more money to smaller, more entrepreneurial businesses.

Trump sells regulatory favors to his donors

Corruption replacing competition at the heart of our economy
Getty Images Donald Trump has rewarded coal barons with bailouts and special favors that harm American families.

President Donald Trump recently directed Secretary of Energy Rick Perry to prepare steps to subsidize coal and nuclear power plants, which are struggling to compete against cheaper, cleaner alternatives. This directive would bail out some of his largest donors while increasing energy costs for millions of Americans, showing once again the grift and graft ethos at the center of his economic policy. Coal barons Bob Murray and Joseph Craft, who have strongly pushed the bailout, have given Trump and Trump-aligned groups millions of dollars. FirstEnergy Solutions FE, +1.90%  , another company that would benefit, paid Perry’s former campaign manager Jeff Miller more than $300,000 to lobby Perry for the bailout. Miller is also a major fundraiser for a Trump Super PAC, which got him access to Trump at an exclusive donor dinner; and the day after the dinner, Trump signaled his support for the coal baron bailout. Sadly, backroom deals with political donors have become the norm for the Trump administration. Rather than a focus on improving economic growth or creating good-paying jobs, Trump and his allies focus on helping friends, punishing enemies, and leaving everyone else with the bill. Trump’s culture of corruption leads to a system that rewards payoffs and cronyism, not innovation and excellence. That’s a recipe for disaster that has failed in every country that has tried it. Nowhere is this corrupt mentality more evident than in the long-standing pillars of the conservative economic agenda: tax cuts and deregulation. Trump and his allies promised a tax plan focused on closing loopholes and helping the middle-class. Instead, the donor-driven tax cut shifted massive amounts of money to the wealthiest Americans and large corporations, while creating scores of new special-interest loopholes. As Republican Congressman Chris Collins famously said, “My donors are basically saying, ‘Get it done or don’t ever call me again.’” Members of Congress and even the president himself received sizeable tax cuts too. The authors of the tax bill also sought to punish their political opponents, hurting the American people in the process. Stephen Moore, one of Trump’s top economic advisers on the campaign, said the bill would hurt Democratic states and Democratic policy priorities, like providing people with affordable health care. And now that they’ve provided these huge giveaways, Republicans are looking to pay for it with cuts to programs like Social Security, Medicare, and Medicaid.  Department of the Interior closed a loophole that had decreased royalty payments to the federal government for coal extracted from publicly owned lands — the loophole cost American taxpayers up to $85 million a year. But the Trump administration quickly reopened it, responding to an effort driven in large part by Cloud Peak Energy CLD, -0.80%  , one of the largest donors to Secretary of the Interior Ryan Zinke when he ran for Congress in 2016. Corruption in our politics has been a serious issue for some time, but Trump has made the problem that much worse with his singular focus on abusing government’s power to help his friends and hurt his enemies, all without caring about the effects of his actions on the broader public.

Rolls-Royce cuts 4,600 jobs at ‘pivotal moment’ for business

LONDON (Reuters) – Rolls-Royce (RR.L) is to cut 4,600 jobs over two years in the latest attempt by boss Warren East to reduce costs and complexity and make Britain’s best known engineering company more profitable and dynamic. East, a softly-spoken former tech boss, has overhauled the 134-year-old Rolls since he took charge in 2015 but the new cuts come as the group grapples with an aero-engine problem that has grounded planes and angered clients. The announcement, which East said is not linked to the Trent 1000 engine issue, marks the biggest round of job cuts since the company had to retrench during the aviation crisis that followed the 9/11 attacks in the United States in 2001. The plan will remove 10 percent of the workforce, targeting duplication in corporate, administration and management roles to try to save 400 million pounds ($536 million) a year by 2020. Two thirds of the job cuts will fall in Britain. Rolls is the biggest employer in the city of Derby, central England, with 15,700 at its headquarters. “Rolls-Royce is at a pivotal moment in its history,” East told reporters. “We are poised to become the world leader in large aircraft engines. But we want to make the business as world class as our engineering and technology.“We are proposing the creation of a much more streamlined organization. We have to significantly reduce the size of our corporate center, removing complexity and duplication that makes us too slow, uncompetitive and too expensive.” The cuts will not affect its engineers, Rolls said. The news has echoes of an announcement from BT last month, another venerable company that is cutting 13,000 managerial and back-office jobs to reduce bureaucracy and respond faster to its customers’ needs. East, who built the chip designer ARM Holdings from a start-up into Britain’s biggest tech company, has complained that Rolls, a rival to General Electric is too complex and cumbersome due to layers of bureaucracy above the shopfloor. Driving home his new focus, he has set a 2020 free cash flow target of 1 billion pounds, a sizeable jump from the 273 million pounds recorded in 2017, off revenue of 15 billion pounds. The major restructuring, costing a total of 500 million pounds between 2018 and 2020, will be reported as separate one-off costs, allowing it to stick to its targets for free cash flow.

Canadians boycott US products, cancel vacations to America

An Ottawa man posted a “Trump-free grocery cart” full of products from Canada or from “countries with strong leadership.”

Vacationers said they would be staying up north this summer instead of booking trips to the US.

“F​–k​ you Trump. We just booked a $3,000 vacation to beautiful British Columbia. Happy anniversary to us. #Canadastrong #BuyCanadian #F***Tariffs,” tweeted ​Supreme Leader Lyna.

And one Twitter user called on “Patriotic Americans” to schedule vacations in Canada and increase their purchases of Canadian goods.

Trudeau acknowledged the support of individual Canadians during an event at Parliament earlier this week. “There’s a bit of a patriotic boost going on these past few days,” he said. Trump and Trudeau are locked in a tiff over tariffs after the president last week said he would impose penalties on steel and aluminum imports. ​The squabble escalated over the weekend at the G7 meeting of economic powers in Quebec when Trudeau said in a news conference that Canada would not be “pushed around” by the US and called the tariffs “insulting.” Trump heard the remarks as he flew in Air Force One to his summit in Singapore with North Korea’s Kim Jong Un and withdrew from a statement issued by the G7 on trade. He also blasted Trudeau in a tweet, calling him “very dishonest & weak.”

Exclusive: Saudi Aramco eyes partnerships as it expands refining, petrochems

Aramco employees are seen at Natural Gas Liquids (NGL) facility in Saudi Aramco’s Shaybah oilfield, Saudi Arabia May 22, 2018. Picture taken May 22, 2018. REUTERS/Ahmed Jadallah – RC13BBE9C480

DHAHRAN, Saudi Arabia (Reuters) – Saudi Aramco plans to boost investments in refining and petrochemicals to secure new markets for its crude, and sees growth in chemicals as central to its downstream strategy to lessen the risk of a slowdown in oil demand. Aramco, the world’s biggest oil producer, is expanding its footprint globally by signing downstream deals and boosting the capacity of its plants, ahead of an initial public offering next year – the largest IPO in history. The state oil giant is moving ahead with multi-billion-dollar projects in China, India and Malaysia and aims to finalize new partnerships this year, Abdulaziz al-Judaimi, Aramco’s senior vice president for downstream, told Reuters. Aramco plans to raise its refining capacity to between 8 million and 10 million barrels per day, from some 5 million bpd now, and double its petrochemicals production by 2030, he added. Aramco pumps around 10 million bpd of crude oil. “Our strategy is very simple. We want to be at 8 to 10 million barrels per day of participated (refining) capacity … (and) we are going forward by trying to be a top leader in chemicals by 2040,” Judaimi said. “The market that we want to grow in … has to be growing, a strong market, with good demand and of course these assets have to be integrated to the whole value chain of the downstream,” he said in an interview at Aramco’s headquarters in Dhahran. To help it reach these targets, Aramco has entered a 50 percent joint venture with three Indian refiners to build a $44 billion, 1.2-million-bpd refinery integrated with petrochemical facilities on India’s west coast. Aramco has said it may introduce a strategic partner to share its 50 percent stake in the Indian refining venture.Judaimi said Aramco was working with Abu Dhabi National Oil Co (ADNOC) toward securing a partnership. It would be the first time for the two national oil companies to join hands in an international venture.

OPEC will squeeze oil buffer to historic lows with an output hike

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

LONDON (Reuters) – The oil industry will face the biggest squeeze on its spare production capacity in more than three decades if OPEC and its allies agree next week to hike crude output, leaving the world more at risk of a price spike from any supply disruption. Spare capacity is the extra production oil producing states can bring onstream and sustain at short notice, providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage. That buffer could shrink from more than 3 percent of global demand now to about 2 percent, its lowest since at least 1984, if the Organization of the Petroleum Exporting Countries, Russia and other producers decide to increase output when they meet on June 22-23, U.S. bank Jefferies said. “You would essentially be taking 3.2 million barrels per day (bpd) of spare capacity down to approximately 2 million bpd,” Jefferies analyst Jason Gammel said, adding global demand was 100 million bpd. Saudi Arabia, OPEC’s de facto leader which has indicated its support for hiking output at next week’s meeting in Vienna, has said it is alert to the potential squeeze on the market. “We are concerned about tight spare capacity nowadays,” Saudi Energy Minister Khalid al-Falih told Reuters last month, although he also said the industry was in “better shape” than in 2016 when oil prices plunged below $30 a barrel. OPEC and its allies have been curbing supply since January 2017 to boost oil prices and cut bloated global inventories. The price of crude has since surged, climbing above $80 a barrel last month, while inventories have also fallen. The precise level of spare capacity available depends in part on how it is defined. The Paris-based International Energy Agency (IEA), which bases its figures on oil production that can be brought onstream within 90 days and sustained for an extended period, estimates OPEC’s spare production capacity was 3.47 million bpd in April, with Saudi Arabia accounting for roughly 60 percent. Based on the EIA definition, Robert McNally at consultancy Rapidan Energy Group said Saudi Arabia, Russia, Kuwait and United Arab Emirates together had spare capacity of about 2.3 million bpd. But Saudi Arabia could even boost production beyond its stated output capacity of about 12.5 million bpd, possibly adding another 1 million bpd of what is known as surge capacity.

Oil prices are unlikely to increase as ‘sharply’ from now on, IEA says

Venezuelan production almost certain to fall sharply for the rest of 2018: IEA
 

The International Energy Agency (IEA) believes a recent spike in the oil price could soon start to ease, helping to alleviate concerns that surging prices could hurt demand and global economic growth. “Prices are unlikely to increase as sharply as they did from mid-2017 onwards and thus the dampening effect on demand will be reduced,” the Paris–based organization said in its latest monthly report published Wednesday. Rising oil prices have created question marks over the strength of demand, but the IEA left its oil demand growth forecast for 2019 largely unchanged, at 1.4 million barrels a day (mb/d), similar to this year’s level. However, it cautioned that there are possible downside risks to the demand outlook, including “the possibility of higher prices, a weakening of economic confidence, trade protectionism and a potential further strengthening of the U.S. dollar.”

In terms of supply, the IEA revised upwards its estimate for 2018 non-OPEC production growth to 2 mb/d and said 2019 would also see what it called “bumper growth” of 1.7 mb/d. Most of that non-OPEC supply growth would come from the U.S., it said. The IEA’s latest report comes amid uncertainty over the amount of oil production we can expect to see from major producers in coming months. OPEC and non-OPEC producers including Russia are continuing with a deal to curb their supply, but the strategy is seen to have been effective with Brent and West Texas Intermediate (WTI) now trading around $75 and $66, respectively. The OPEC and non-OPEC producers agreed back in November 2016 to curb supply in order to boost then-low oil prices. There are now fears that prices could rise steeply if supplies are disrupted from OPEC members Venezuela and Iran. The former is experiencing economic turmoil and the latter is facing a re-imposition of sanctions after the U.S. withdrawal from Iran’s nuclear deal. OPEC and non-OPEC producers are meeting in Vienna on June 22 to discuss the supply situation. The encounter could be fractious with arguments expected between producers over whether to increase production or maintain supply as it is — given rising prices and potential supply disruptions. There is also the specter of competition from U.S. shale oil producers and a reluctance to cede more market share to them. Saudi Arabia and Russia are reportedly ready to increase oil output, while others like Iran and Iraq are against such a move. The IEA said that, for its part, it had looked at a scenario (not a forecast, it emphasized) that by the end of next year output from these two countries could be 1.5 mb/d lower than it is today. It said Middle East OPEC producers could make up for the loss and increase production by about 1.1 mb/d. “And there could be more output from Russia on top of the increase already built into our 2019 non-OPEC supply numbers,” it added.

Fed hikes rates, points to two more increases by year’s end

Fed raises rates
Fed raises rates

The Federal Reserve hiked its benchmark short-term interest rate a quarter percentage point Wednesday and indicated that two more increases are likely this year. The move pushes the funds rate target to 1.75 percent to 2 percent. The rate is closely tied to consumer debt, particularly credit cards, home equity lines of credit and other adjustable-rate instruments. In an unusually terse statement that ran just 320 words, the Federal Open Market Committee changed multiple phrases from its previous missives, pointing to a more optimistic view on economic growth and higher inflation expectations. Though the statement contained less than half the words of some of the committee’s typical communiques, there was a lot to unpack in the language. The committee said economic growth has been “rising at a solid rate,” an upgrade from “moderate” in May. The unemployment rate has “declined,” as opposed to “stayed low,” and household spending “has picked up,” an upgrade from “moderated.” With that in mind, the committee said two more rate hikes were appropriate, bringing the 2018 total to four increases. Its first hike this year was in March. “The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term,” the statement said. Markets had been waffling over expectations for a fourth rate hike this year — the FOMC also increased the funds rate target in March — and prior to the meeting were pricing in a 46.5 percent chance. The latest projections from committee members indicate the funds rate to rise to 2.4 percent by the end of the year. The committee also indicated it continues to expect three more rate hikes in 2019, even with the fourth one this year.

Trump claim raises eyebrows: NKorea no longer a nuke threat?

WASHINGTON (AP) — President Donald Trump declared on Wednesday there was “no longer a Nuclear Threat from North Korea,” a dubious claim following his summit with leader Kim Jong Un that produced no guarantees on how or when Pyongyang would disarm. Tempering Trump’s very upbeat assessment, his top diplomat, Mike Pompeo, cautioned that the U.S. would resume “war games” with close ally South Korea if the North stops negotiating in good faith. The president had announced a halt in the drills after his meeting with Kim on Tuesday. The summit in Singapore, which marked a major reduction in tensions, yielded a joint statement that contained a promise to work toward a denuclearized Korean Peninsula, but it lacked details. That didn’t stop the president from talking up the outcome of what was the first meeting between a U.S. and North Korean leader in six decades of hostility. The Korean War ended in 1953 without a peace treaty, leaving the two sides in a technical state of war.

“Just landed – a long trip, but everybody can now feel much safer than the day I took office,” Trump tweeted early Wednesday. “There is no longer a Nuclear Threat from North Korea. Meeting with Kim Jong Un was an interesting and very positive experience. North Korea has great potential for the future!”

While Trump was facing questions at home and among allies about whether he gave away too much in return for far too little at the summit, North Korean state media heralded claims of a victorious meeting with the U.S. president; photos of Kim standing side-by-side with Trump on the world stage were splashed across newspapers. Trump’s claim that North Korea no longer poses a nuclear threat is questionable considering Pyongyang’s significant weapons arsenal. Independent experts say the North could have enough fissile material for anywhere between about a dozen and 60 nuclear bombs. Last year it tested long-range missiles that could reach the U.S. mainland, although it remains unclear if it has mastered the technology to deliver a nuclear warhead that could re-enter the atmosphere and hit its target. Freezing the regular military exercises with South Korea is a major concession to North Korea that has long claimed the drills were invasion preparations. It appeared to catch the Pentagon and officials in Seoul off guard, and some South Koreans were alarmed. Trump cast the decision as a cost-saving measure, but also called the exercises “inappropriate” while talks continue. In Japan, the prospect of canceled U.S.-South Korean drills was met with concern. “The U.S.-South Korea joint exercises and U.S. forces in South Korea play significant roles for the security in East Asia,” Defense Minister Itsunori Onodera told reporters Wednesday. He said he planned to continue sharing the view with Washington and Seoul. The U.S. has stationed combat troops in South Korea since the end of the Korean War and has used them in a variety of drills. The next scheduled major exercise, involving tens of thousands of troops, normally would be held in August.

Former Trump lawyer Michael Cohen likely to cooperate as his attorneys leave case, sources say

As attorneys for Michael Cohen rush to meet Judge Kimba Wood’s Friday deadline to complete a privilege review of over 3.7 million documents seized in the April 9 raids of Cohen’s New York properties and law office, a source representing this matter has disclosed to ABC News that the law firm handling the case for Cohen is not expected to represent him going forward. To date, Cohen has been represented by Stephen Ryan and Todd Harrison of the Washington and New York firm, McDermott, Will & Emery LLP. No replacement counsel has been identified as of this time.

Cohen, now with no legal representation, is likely to cooperate with federal prosecutors in New York, sources said. This development, which is believed to be imminent, will likely hit the White House, family members, staffers and counsels hard.

After the federal raids on Cohen’s properties, President Trump lashed out in a tweet, writing, “Attorney-client privilege is dead!” He told reporters at the White House that the move against his longtime personal attorney, which he likened to a break-in, was a “disgraceful situation.” “It’s an attack on our country in a true sense. It’s an attack on all we stand for,” the president said during a meeting with senior military leadership at the White House. “That is really now on a whole new level of unfairness.” Judge Wood subsequently appointed former federal judge Barbara Jones to act as a “special master” to conduct an impartial review of the materials and to referee any disputes between Cohen and the government. Trump and the Trump Organization intervened in the case and were also granted access to review the materials for potentially privileged items. Jones reported last week that of the first 300,000 items reviewed, she had determined that just 162 of them were covered by attorney-client privilege. She rejected three items that Cohen, Trump or the Trump organization had designated as privileged. Judge Wood has given Cohen’s attorneys until Friday to complete the review of the remaining documents. Any remaining items to be reviewed would be turned over to a team of federal prosecutors unconnected to the case to complete the examination of the documents.

Toyota pumps $1 billion in Grab in auto industry’s biggest ride-hailing bet

SINGAPORE (Reuters) – Toyota Motor Corp has agreed to buy a $1 billion stake in Southeast Asia’s Grab in the biggest investment by a carmaker into a ride-hailing firm, at a time when traditional automakers are racing to team up with disruptive tech companies. The value of six-year-old Grab will be just over $10 billion after the investment, said a person familiar with the matter. The deal comes as the auto industry faces a spike in the need for technological prowess with the advent of features such as autonomous driving, while app makers offer passengers the option to forgo car purchases by connecting them with drivers. Some automakers have responded by partnering with makers of ride-hailing apps which dominate the fast-growing field of mobility services, in anticipation of a future of reduced car ownership. General Motors Co has invested in U.S. ride services firm Lyft, whose rival Uber Technologies Inc [UBER.UL] is also backed by Toyota. Meanwhile Japan’s SoftBank Group Corp – also an investor in Grab and Uber – last month said it would invest $2.25 billion in GM’s autonomous vehicle unit Cruise. Toyota’s trading arm invested an undisclosed sum in Grab last year. This time, the automaker is lead investor in a financing round launched after Grab acquired Uber’s operations in Southeast Asia, a region of 640 million people. Grab called it the largest-ever investment globally by an automotive manufacturer in the ride-hailing sector. The Singapore-headquartered firm did not disclose how much fresh capital it aims to raise. It raised $2.5 billion in its last round in July, resulting in a reported value of $6 billion. Grab said it logs six million rides a day via apps downloaded onto over 100 million mobile devices. The firm also offers online to offline services, such as food delivery and digital payments, which it aims to expand deeper into the region using funds from its latest financing round. “We will work with partners like Toyota to continue to transform transportation in Southeast Asia,” Grab said in an email. “We want to be the one-stop mobility platform for users.” “Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia,” Toyota executive Shigeki Tomoyama said in a statement. The data could also help Toyota develop its own next-generation mobility services, including a self-driving electric vehicle aimed at companies for use in tasks such as ride hailing, package delivery and mobile shops.

AT&T wins: Judge clears $85 billion bid for Time Warner with no conditions

A federal judge said Tuesday that AT&T’s $85.4 billion purchase of Time Warner is legal, clearing the path for a deal that gives the pay-TV provider ownership of cable channels such as HBO and CNN as well as film studio Warner Bros. U.S. District Court Judge Richard Leon did not impose conditions on the merger’s approval. He also urged the government not to seek a stay when issuing his decision in a closed-door room with reporters. AT&T General Counsel David McAtee said the company was happy with the result. “We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner,” McAtee said in a statement. “We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.” Shares of Time Warner jumped roughly 5 percent in extended trading. Shares of AT&T dropped as much as 2 percent. Assistant Attorney General Makan Delrahim said the Justice Department was disappointed with the decision. “We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner. We will closely review the Court’s opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers,” Delrahim said in a statement. The outcome of the trial could spur a wave of deals in the telecom and media industries, as well as clear the way for future vertical mergers, where a company buys its supplier. Comcast has been eyeing a similar merger to combine production and distribution in a competing bid for Twenty-First Century Fox and was preparing to announce an offer as soon as Wednesday if Leon ruled in favor of AT&T in the trial, people familiar with the matter told CNBC. Comcast shares dipped 4 percent after the AT&T-Time Warner decision. Shares of Fox rose 4 percent.

U.S. Budget Deficit Widens 23% October Through May on Weak Revenue Growth

Federal budget deficit was $146.80 billion in May, 66% wider than the same month a year earlier

The Treasury Department building in Washington. The U.S. government’s deficit totaled $532.24 billion in October through May, the agency said Tuesday.
The Treasury Department building in Washington.The U.S. government’s deficit totaled $532.24 billion in October through May, the agency said Tuesday. Photo: andrew caballero-reynolds/Agence France-Presse/Getty Images

WASHINGTON—The U.S. government’s budget deficit widened in the first eight months of its fiscal year, reflecting lower revenues from corporate taxes combined with ramped-up government spending. The deficit, or the difference between the amount of money the federal government spent and what it took in, totaled $532.24 billion in October through May, the Treasury Department said Tuesday. That was 23% more than the deficit of $432.85 billion during the same period a year earlier and reflected a 6% rise in government spending that outpaced a 3% increase in revenue. Tuesday’s report showed the federal budget deficit was $146.80 billion in May, 66% wider than the same month a year earlier. Government revenue fell 10% last month compared with a year earlier, while spending grew 11%. Corporate-income taxes from October through May were about 25% lower than the first eight months of fiscal 2017, pulling down revenues. “You have corporations paying less in taxes at the same time that they’re getting more in deductions,” said Lindsay Koshgarian, program director at National Priorities Project. “It’s kind of a double whammy of paying less.” Over the same period, individual income taxes rose, which could partially be explained by the low unemployment rate. “Individuals are paying more total, but each individual could be paying less,” Ms. Koshgarian said. “If you have more people paying in, you can still get more money out.” Meanwhile, spending in the first eight months of the fiscal year increased from a year earlier for military programs, Homeland Security and Medicare and Medicaid. The rising budget deficit generally tracks with projections from the nonpartisan Congressional Budget Office that spending would outpace revenues. For the full fiscal year, the CBO this spring estimated the budget deficit would total $804 billion, up from the $665 billion shortfall seen in fiscal 2017. The CBO raised its estimate for this year’s deficit largely because tax cuts were expected to translate into lower revenues while the government also ramped up spending on military and domestic programs. The 2018 fiscal year will end Sept. 30.

‘I do trust him’: Trump opens up about Kim after historic summit

Stephanopoulos asked how Trump could trust the brutal dictator. “I do trust him, yeah,” Trump said. “Maybe in a year you’ll be interviewing and I’ll say I made a mistake. It’s possible. We’re dealing at a high level, a lot of things can change a lot of things are possible.” He pressed the president on his previous criticism of North Korea’s human rights abuses including starving his people, running labor camps and assassinating members of his own family. “George, I’m given what I’m given,” Trump said. “This is what we have, this is where we are, and I can only tell you from my experience, and I’ve met him, I’ve spoken with him. I’ve met him. And this is, this has started early and it’s been very intense. I think that he really wants to do a great job for North Korea. I think he wants to de-nuke, without that, there’s nothing to discuss. It was on the table from the beginning, and you see a total denuclearization of North Korea – so important.”  Trump talked about the agreements that were reached at the summit in Singapore today, saying that he believes the North Korean leader “wants to do the right thing”. “We have the framework for getting ready to denuclearize,” Trump said. “He’s de-nuking the whole place. I think he’s going to start now.” Trump seemed to hold an optimistic take on Kim’s intentions, saying that the dictator “really wants to do something I think terrific for their country.” When asked if there was talk of pulling U.S. troops out of South Korea, Trump said the topic didn’t come up. “We didn’t discuss that, no. We’re not going to play the war games… I thought they were very provocative. I also they’re also very expensive,” Trump said. Another potential sticking point that didn’t come up? The nuclear umbrella that the U.S. has over South Korea, that is intended to protect it from any missile strikes from the North. When asked by Stephanopoulos if the removal of the nuclear umbrella was “on the table,” Trump said no, saying the umbrella had not even been discussed.

Trump rescinded his endorsement after Canadian Prime Minister Justin Trudeau held a news conference saying all seven countries had signed the communique despite “some strong, firm conversations on trade, and specifically American tariffs.” Trudeau said he informed Trump that Canadians “who stood shoulder-to-shoulder with American soldiers in far-off lands” do not take lightly the idea that the tariffs are for national-security reasons. “It’s kind of insulting,” Trudeau said. In his interview with Stephanopoulos, Trump talked about the tension, saying “I actually like Justin” but calling the tariff disagreement “a mistake.”

 

10,000 jobs could be lost to robots says Citi

US bank Citi has warned that it could shed half of its 20,000 tech and ops staff in the next five years due to the rise of robotics and automation.
 robotThe prediction was made by the president and chief executive of the bank’s institutional clients group, Jamie Forese, who was interviewd by the Financial Times (FT). The 20,000 operational staff account for more than 40% of the bank’s total employees and are “most fertile for machine processing” according to Forese.  He is not the first to forecast mass job losses as a result of automation. Deutsche Bank boss John Cryan issued a similar warning in 2017, suggesting half of its workforce could be replaced by robots. Meanwhile a 2016 report from the World Economic Forum predicted that  advances in automation will lead to the loss of over 5 million jobs in 15 major developed and emerging economies by 2020. Forese’s comments though represent a more dramatic forecast of potential job losses than in the past. According to research from the FT, 60,000 jobs were lost to automation at eight of the top ten investment banks between 2007 and 2017.  Forese’s comments were echoed by other banking leaders interviewed by the FT. “There are so many functions today that technology has already replaced and I don’t see why that journey should end any time soon,” said Richard Gnodde, head of Goldman Sachs International. And Barclays injvestment bank chief Tim Thorsby added that anyone whose job involves “a lot of keyboard-hitting” is “less likely to have a happy future”.

Kushner to visit Israel, Egypt and Saudi Arabia for peace plan talks

peace plan talks

Kushner in Saudi Arabia last year. Photo: Mandel Ngan/AFP/Getty Images

President Trump’s Middle East peace team, senior adviser Jared Kushner and special envoy Jason Greenblatt, will travel to Israel, Egypt and Saudi Arabia next week to discuss the next stages of the peace effort and the crisis in Gaza, a senior U.S. official tells me. The official said Kushner and Greenblatt want to discuss lingering questions they have as they finish drafting the peace plan, including the optimal time for launching it. The U.S. official added the trip may include other stops as well, but does not include a meeting with Palestinian officials — who are refusing to meet following Trump’s decision to move the U.S. embassy to Jerusalem.

Trump economic adviser Kudlow in ‘good’ condition after heart attack

SINGAPORE (Reuters) – Top White House economic adviser Larry Kudlow, a staunch defender of President Donald Trump’s tough stance on global trade, was in good condition in a Washington-area hospital after suffering a heart attack, the White House said on Tuesday. Trump announced Kudlow’s heart attack in a tweet sent minutes before he met with North Korean leader Kim Jong Un in Singapore. “Our Great Larry Kudlow, who has been working so hard on trade and the economy, has just suffered a heart attack. He is now in Walter Reed Medical Center,” Trump said. Later, White House spokeswoman Sarah Sanders, who was traveling with the president, issued a statement that said Kudlow’s doctors said he had a “very mild heart attack”. “Larry is currently in good condition … and his doctors expect he will make a full and speedy recovery,” she said. A longtime television commentator, Kudlow, 70, was hired by Trump in March to replace Gary Cohn as director of the National Economic Council. Kudlow joined the president at the Group of Seven summit in Quebec on Friday and Saturday. He did several media interviews on Sunday to vigorously defend Trump amid a trade spat between the president and Canadian Prime Minister Justin Trudeau. Trudeau, in a news conference on Saturday, had reiterated his strong objections to steep U.S. tariffs on Canadian exports of steel and aluminum. In return, Trump called the Canadian leader “very dishonest” and “weak,” and said the United States would not endorse a joint G7 communique.

In an interview with CNN on Sunday, Kudlow said Trudeau “really kind of stabbed us in the back.”

When he was a CNBC contributor before taking the White House job, Kudlow argued the metals tariffs Trump had announced would harm consumers. The month he was tapped for the White House job, he co-authored an article that argued such tariffs were akin to sanctions on the United States itself. At the White House, however, he has been one of the most visible and vocal of advisers arguing that the president was simply trying to fix a broken global trade system in which the United States was not being treated fairly. Nick Bit: An example of the corrupting influence of TRUMP. Kudlow has done a 180 on everything he believes to kiss Trumps ASS. Hey Larry GOD is watching!

Italy never should have joined the euro, and the ECB can’t rescue it from its next crisis

Italy wil plunge the eurozone into an unmanageable crisis

Italian financial tremors are again rumbling dangerously. Yields on the country’s 10-year government bonds, which briefly topped 3% when President Sergio Mattarella temporarily stopped the 5 Star Movement and the League from forming a government, appear primed to rise even higher, potentially plunging Italy and the eurozone in an unmanageable crisis. Italy is not just a deeply troubled country, it is also large. Its chaotic banking sector is the eurozone’s third largest, following those in France and Germany. The Italian government’s debt, at €2.5 trillion ($2.95 trillion), is about the same size as the debt owed by the French and German governments, and is larger than the combined government debt of Spain, Portugal, Greece, and Ireland, the four countries that needed financial bailouts. An Italian financial crisis would quickly break through the defenses eurozone authorities have constructed. This need not have been. In the 1990s, thoughtful observers understood that Italy did not belong in the eurozone. Italy could not give up its own monetary policy and currency, the lira. Over three decades, between 1970 and 1999, the lira had steadily lost over 80% of its value relative to the German mark. As the new millennium neared, Italy was being out-competed by emergent East European economies and even more dramatically by China. Unable to raise productivity growth, Italy would need more lira devaluations. However, Italy’s top economists and finance officials were keen, indeed desperate, to join the eurozone. They subscribed to the vincolo esterno (external constraint) proposition. They insisted that lacking the escape valve of an ever-depreciating lira, Italy’s political leaders would have no option but to enforce sound fiscal and structural policies to secure a better future for Italians. European Union scholars Kenneth Dyson and Kevin Featherstone say Mario Draghi, currently president of the European Central Bank and then director general of the Italian treasury, “believed in his soul” that the euro would enforce the discipline Italian governments needed. Hubris won the day, and Italy joined the eurozone at its inception on Jan. 1, 1999. But Italy’s fractious governments lacked the patience and durability to deal with the country’s endemic problems. The Italian economy fell into near-zero productivity growth, and despite the benefit of a buoyant world economy from mid-2003, the unemployment rate on the eve of the global financial crisis in 2007 was nearly 7%. Italian banks were eking out meagre profits, and the government’s debt was nearly 100% of GDP. The global crisis between 2007 and 2009, and then the 2011-2013 eurozone crisis magnified Italy’s pre-euro economic and financial fragilities. The euro’s central flaw now came to the fore: a single monetary policy could not work for the strong Germany economy and for an increasingly decrepit Italian economy. Making matters worse, the ECB adopted a much tighter monetary policy stance than either the U.S. Federal Reserve or the Bank of England. By mid-2011, amid over-the-top fiscal austerity demanded by eurozone authorities, Italy desperately needed easy monetary policy and a large euro depreciation. Instead, on July 7, 2011, the ECB made a catastrophic error by raising interest rates, sending financial markets into panic. Between mid-2011 and mid-2012, financial turmoil reigned through much of the eurozone, especially in Spain and Italy. Italy never recovered from that trauma. In July 2012, the ECB’s Draghi tried to heal the wounds with his dramatic promise to do “whatever it takes” to rescue eurozone countries. That led to the Outright Monetary Transactions (OMT) shield, which carried the promise that the ECB would buy unlimited quantities of a member country’s bonds. But although markets calmed down, Italian interest rates remained too high, which, combined with unremitting fiscal austerity, mired the Italian economy in recession.With the ECB continuing to deliver only niggardly monetary stimulus, the unemployment rate soared, reaching nearly 12% by early 2013. Even the jobs available were precarious, and, feeling a sense of hopelessness, large numbers of Italians stopped looking for work. For too many, the financial stress was acute. Anti-European sentiment spread. In the February 2013 elections, the anti-establishment and anti-euro 5 Star Movement emerged as a potent electoral force with a quarter of the vote.

Jaguar to cut more UK jobs as it moves Discovery output to Slovakia

LONDON (Reuters) – Jaguar Land Rover (JLR) is set to cut more jobs in Britain as it moves all production of its Discovery car to lower-cost Slovakia before building its new Range Rover at an English factory. Britain’s biggest automaker, JLR has previously said its next-generation Discovery will be built at its Slovakia plant and on Monday announced there could be some job cuts in Britain as a result. “The potential losses of some agency employed staff in the UK is a tough one but forms part of our long-term manufacturing strategy as we transform our business globally,” the company said in a statement. Moving production from Britain will slash several thousands of pounds off the cost per vehicle, the firm’s Chief Finance Officer Ken Gregor said last year. The new Range Rover and Range Rover sport will however be built at the firm’s central English Solihull plant on an architecture which is designed to allow for diesel, petrol, electric and hybrid models to be produced. Monday’s announcement comes after the firm said this year it will cut 1,000 jobs and reduce production at two of its English factories as demand for diesel cars slumps in the face of higher taxes and a regulatory crackdown. The firm has also blamed Brexit for hitting demand in Europe’s second-largest autos market, where demand fell 6 percent last year, a source told Reuters in April. JLR said in January it would decide this year whether to build electric cars in its home market after announcing all of its new cars will be available in an electric or hybrid version from 2020. The company, owned by India’s Tata Motors, builds nearly one in three of Britain’s 1.7 millions cars but is producing its first electric vehicle, the I-PACE, in Austria. JLR’s new factory in the Slovak city of Nitra is due to begin production by the end of the year and will have a capacity of up to 300,000 vehicles. It already employs 1,400 people there as it gears up to open. In Britain, the firm built just over 530,000 vehicles last year at three production facilities and also has a separate engine site and headquarters, employing roughly 40,000 people in total.

The absolute chaos of Donald Trump’s G7 meeting (and what it means moving forward)

(CNN)With only hours remaining before a historic summit between the leaders of the United States and North Korea, it’s easy to lose sight of what President Donald Trump (and some of his top staffers) said and did just before arriving in Singapore: Blow up an international gathering with some of America’s closest allies with a combination of erratic behavior and hugely impolitic statements. Whatever happens in Singapore over the next day or two, it’s uniquely possible — and maybe even likely — that what Trump did in Quebec on Friday and Saturday will matter more in the country’s long-term geopolitical future, and not in a good way.Let’s detail what happened in the 36-ish hours Trump spent in Quebec — and what he and his allies said once he left.

  • Before Trump even jetted to the conference on Friday morning, he floated the possibility of Russia rejoining the G7. (Russia was kicked out of the group after invading Ukraine and annexing Crimea in 2014.)
  • Trump arrived late for a gathering of G7 leaders focused on gender diversity on Saturday morning. They started the meeting without him.
  • Trump held a, um, wide-ranging news conference before he left Quebec to jet to Singapore. In that presser, he described the meeting as a “10” out of 10 and insisted he had very close personal relationships with, among others, Canadian Prime Minister Justin Trudeau, French President Emmanuel Macron and German Chancellor Angela Merkel.
  • After (apparently) watching a Trudeau press conference on Air Force One, Trump took to Twitter to attack the Canadian Prime Minister. “PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, ‘US Tariffs were kind of insulting’ and he ‘will not be pushed around,'” tweeted Trump. “Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!”
  • Chief Trump economic adviser Larry Kudlow went on CNN’s “State of the Union” and called Trudeau’s news conference a “betrayal,” adding: “He stabbed us in the back.”
  • Peter Navarro, a trade adviser for Trump, was even more damning in his comments about Trudeau. “There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door,” Navarro said on “Fox News Sunday.” “And that’s what bad faith Justin Trudeau did with that stunt press conference. That’s what weak, dishonest Justin Trudeau did, and that confrontation. But it’s worth asking the question of what toll unleashing a full-scale character assassination — “there’s a special place in hell” is pretty strong stuff — on Canada’s head of government means for how the US is perceived in the world. It’s hard to imagine other longtime allies of the US watching the shoddy treatment of Trudeau and wondering “Are we next?” Or, put another way: If Trump is willing to treat Trudeau, who he allegedly really likes, this way, what does that mean for us? That unsettling, again, will be applauded by Trump allies. They should be put on notice! They have been taking advantage of us forever! The reality, however, is different. The US has been a steadying force in international affairs for decades. We have been the prime mover in building and maintaining the post-World War II coalitions that have helped avoid athird world war. If the US no longer plays that role — or shrinks from it in any meaningful way — the balance in the world is shaken and changed. And those changes are unpredictable — and not necessarily beneficial to the United States. Power vacuums and power shifts are filled rapidly in politics and foreign affairs. That is what Trump’s behavior — both this past weekend and more generally speaking — creates the possibility for: Major reorientation of allies and partnerships worldwide. And that could well be a much scarier prospect than Trump’s defenders would like you to believe.

White House: Trump Leaving Singapore Early as North Korea Talks Move Quicker than Planned

President Donald Trump plans to depart early from his unprecedented summit with Kim Jong-un, the White House said Monday, declaring that nuclear talks with North Korea have moved “more quickly than expected.”
trump
Joe Raedle/Getty

Trump had been scheduled to fly back to Washington on Wednesday morning after spending Tuesday with the North Korean leader in Singapore. But on the eve of the summit, he altered his schedule, opting to return at about 8 p.m. on Tuesday after a full day of meetings with Kim — almost 15 hours earlier than anticipated. “The discussions between the United States and North Korea are ongoing and have moved more quickly than expected,” the White House said in a statement.  It was not immediately clear what specific progress, if any, had been made in preliminary discussions between U.S. and North Korean officials in the run-up to the Tuesday summit. In fact, only hours before the White House announcement, U.S. Secretary of State Mike Pompeo had seemed to lower expectations for the meeting, which Trump had earlier predicted could potentially yield an on-the-spot deal to end the Korean War. “North Korea has previously confirmed to us its willingness to denuclearize, and we are eager to see if those worlds prove sincere,” Pompeo said. “The fact that our two leaders are sitting down face to face is a sign of the enormous potential to accomplish something that will immensely benefit both of our peoples and the entire world”:

“The ultimate objective we seek with diplomacy with North Korea has not changed. The complete, verifiable, and irreversible denuclearization of the Korea peninsula is the only outcome that the United States will accept.” The summit — the first ever between a sitting American president and North Korea’s leader — was to kick off at 9 a.m., the White House said. After greeting each other, the two leaders planned to sit for a one-on-one meeting that a U.S. official said could last up to two hours, with only translators joining them. The official was not authorized to discuss the plans and insisted on anonymity. The White House said the daylong summit would also include a working lunch and a larger meeting involving aides to both leaders. On the U.S. side, Trump was to be joined by Pompeo, chief of staff John Kelly, National Security Adviser John Bolton, and U.S. Ambassador to the Philippines Sung Kim, along with several others. Before flying home, Trump planned to speak to reporters in Singapore after concluding the summit, the White House said. The last-minute change of schedule came as both sides finalized preparations for the meeting. On Monday, Trump forecast a “nice” outcome, while Kim spent the day out of view.

Trump’s tweets slam Canada and Trudeau anew from Singapore

QUEBEC CITY (AP) — President Donald Trump took more swipes at Canada and its prime minister over trade issues as he settled in for a summit with North Korea in Singapore, contending that “Fair Trade is now to be called Fool Trade if it is not Reciprocal.” Trump roiled the Group of Seven meeting in Canada by first agreeing to a group statement on trade only to withdraw from it while complaining that he had been blindsided by Canadian Prime Minister Justin Trudeau’s criticism of Trump’s tariff threats at a summit-ending news conference. As he flew from Canada to Singapore Saturday night, Trump displayed his ire via Twitter, which he also employed to insult Trudeau as “dishonest” and “weak.” The attack on a longtime ally and its leader drew sharp criticism. German Chancellor Angela Merkel, who also attended the summit, told German public television that she found Trump’s tweet disavowing the G-7 statement “sobering” and “a little depressing.” Merkel also said the European Union would “act” against the U.S. trade measures. Unbowed, Trump tweeted anew Monday morning from Singapore: “Fair Trade is now to be called Fool Trade if it is not Reciprocal. According to a Canada release, they make almost 100 Billion Dollars in Trade with U.S. (guess they were bragging and got caught!). Minimum is 17B. Tax Dairy from us at 270%. Then Justin acts hurt when called out!” Canadian Prime Minister Justin Trudeau says all countries attending the Group of Seven summit have signed a joint communique despite sharp trade tensions with the U.S. (June 9) He added: “Why should I, as President of the United States, allow countries to continue to make Massive Trade Surpluses, as they have for decades, while our Farmers, Workers & Taxpayers have such a big and unfair price to pay? Not fair to the PEOPLE of America! $800 Billion Trade Deficit…And add to that the fact that the U.S. pays close to the entire cost of NATO-protecting many of these same countries that rip us off on Trade (they pay only a fraction of the cost-and laugh!). The European Union had a $151 Billion Surplus-should pay much more for Military!” Earlier, the White House escalated the initial tirade and leveled more withering and unprecedented criticism against Trudeau, branding him a back-stabber unworthy of Trump’s time. “There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door,” Trump trade adviser Peter Navarro said in an interview nationally broadcast Sunday in the United States.

Canada’s foreign minister, Chrystia Freeland, said her country “does not conduct its diplomacy through ad hominem attacks.”

The verbal volleys by Navarro and Trump’s top economic adviser, Larry Kudlow, picked up where Trump had left off Saturday evening. Kudlow suggested Trump saw Trudeau as trying to weaken his hand before that meeting, saying the president won’t “let a Canadian prime minister push him around. … Kim must not see American weakness.” Kudlow was referring to North Korean leader Kim Jong Un. Trudeau, who had said at the news conference that Canada would retaliate for new U.S. tariffs, didn’t respond to questions about Trump when the prime minister arrived at a Quebec City hotel Sunday for meetings with other world leaders. Freeland later told reporters that “we don’t think that’s a useful or productive way to do business.” Trudeau had said Canadians “are polite, we’re reasonable, but also we will not be pushed around.” He described all seven leaders coming together to sign the joint declaration despite having “some strong, firm conversations on trade, and specifically on American tariffs.”

Sweden Tries to Halt Total Cashlessness With Lawmaker Proposal

(Bloomberg) — A key committee of Swedish lawmakers wants to force the country’s biggest banks to handle cash in an effort to halt the nation’s march toward complete cashlessness. Parliament’s Riksbank committee, which is in the process of reviewing the central bank law, proposed making it mandatory for banks to offer cash withdrawals and handle daily receipts. The requirement would apply to banks that provide checking accounts and have more than 70 billion kronor ($8 billion) in deposits from the Swedish public, according to a report. The lawmakers said there needs to be “reasonable access to those services in all of Sweden,” and that 99 percent of Swedes should have a maximum distance of 25 kilometers (16 miles) to the nearest cash withdrawal. The requirement doesn’t state how banks should offer those services, and lenders can choose whether to use a third party, machines or over-the-counter services. The move is a response to Sweden’s rapid transformation as it becomes one of the most cashless societies in the world. That’s led to concerns that some people are finding it increasingly difficult to cope without access to mobile phones or bank cards. There are also fears around what would happen if the digital payments systems suddenly crashed. “We believe that the continued development of access to cash in society needs to take place in a controlled manner so that the public’s and society’s need for cash is fulfilled,” the committee said in an op-ed in Dagens Nyheter. The committee began looking at these issues amid worries that cash was disappearing too fast. A majority of bank branches in Sweden have stopped handling cash over the counter, and many shops and restaurants are also rejecting physical money. Still, a recent Riksbank study showed that the decline of cash is driven by the fact that Swedes prefer using electronic payments such as debit cards and mobile payments. The Swedish Bankers’ Association said the plan would violate European Union laws on state aid and competition by forcing only a few banks to guarantee the supply of cash. Riksbank Governor Stefan Ingves has expressed concerns that the lack of cash may become problematic in a crisis situation, and suggested new legislation to safeguard public governance of the payment system as well as introducing a digital currency. He has also suggested forcing banks to handle cash, a view now shared by the Riksbank committee. “The proposition aims to secure outflow of cash in society,” Patrik Andersson, chief executive officer at Loomis, said in an email. “We also want to see a proposal that all players must accept cash as well. It’s a legal means of payment and should be accepted by all. It’s like that in most countries, but not in Sweden.”

Bitcoin price plunges after cryptocurrency exchange is hacked

Visual representation of the bitcoin cryptocurrency
Cryptocurrency exchanges trading bitcoin have been hit by a series of thefts in recent months. Photograph: Chesnot/Getty Images

There has been a sharp drop in the price of bitcoin and other virtual currencies after South Korean cryptocurrency exchange Coinrail was hacked over the weekend. A tweet from Coinrail confirming the cyber-attack sent the price of bitcoin tumbling 10% on Sunday to two-month lows. The world’s best-known cryptocurrency lost $500 (£372) in an hour, dropping to $6,627 on the Luxembourg exchange Bitstamp, while most other digital currencies also recorded large losses. The latest attack highlights the lack of security and weak regulation of global cryptocurrency markets. Coinrail later said in a statement on its website that its system was hit by “cyber intrusion” on Sunday, causing a loss for about 30% of the coins traded on the exchange. It did not quantify the value, but the local Yonhap news agency estimated that about 40bn won (£27.8m) worth of virtual coins was stolen. Coinrail said: “Seventy percent of total coin and token reserves have been confirmed to be safely stored and moved to a cold wallet [not connected to the internet]. Two-thirds of stolen cryptocurrencies were withdrawn or frozen in partnership with related exchanges and coin companies. For the rest, we are looking into it with an investigative agency, related exchanges and coin developers.” Police have begun an investigation, according to the Korea Herald, which cited a spokesperson as saying: “We secured the access history of Coinrail servers and we are in the process of analysing them.” Bitcoin was trading at about $6,750 on Monday afternoon – down from an all-time peak of almost $20,000 in the week before Christmas. In February, it fell to $5,900.

Bitcoin price chart

South Korea is one of the world’s major cryptocurrency trading centres, and is home to one of the busiest virtual coin exchanges, Bithumb. There have been a series of thefts from cryptocurrency exchanges in recent months. Japan’s Coincheck was hacked in January, with more than $500m-worth of digital currency stolen. It started reimbursing customers in March, but faces two class-action lawsuits. In December, the South Korean exchange Youbit shut down and filed for bankruptcy after being hacked twice. The Wall Street Journal (£) reported on Friday that US regulators were investigating potential price manipulation at four major cryptocurrency exchanges. The investigation comes six months after CME Group launched bitcoin futures. Coinbase, Bitstamp, itBit and Kraken have been asked to share trading data related to the futures contracts. Analysts said bitcoin volatility was fading, after the price increased threefold between mid-November and mid-December. David Jones, the chief market strategist at trading platform Capital.com, said this was driven by increased publicity as bitcoin went from being a niche IT interest to becoming mainstream, but added that the hype has now gone.

France on G7: ‘Fits of anger’ cannot dictate international cooperation

Paris (AFP) – France warned Sunday that “fits of anger” could not dictate international cooperation after US President Donald Trump abruptly rejected a joint statement agreed following a bad-tempered G7 summit in Canada. “International cooperation cannot be dictated by fits of anger and throwaway remarks,” President Emmanuel Macron’s office said in a statement to AFP. “We spend two days working out a (joint) statement and commitments. We are sticking to them and whoever reneges on them is showing incoherence and inconsistency. “Let’s be serious and worthy of our people. We make commitments and keep them,” the presidency said, adding that “France and Europe maintain their support for this (G7) statement.” Minutes after the publication of a joint communique that was approved by Trump and other Group of Seven leaders at a summit in the city of Quebec, the US leader announced on Twitter that he was retracting his support. In a flurry of tweets from Air Force One, en route to Singapore for a historic nuclear summit with North Korea’s Kim Jong Un, Trump accused the summit host, Canadian Prime Minister Justin Trudeau of being “very dishonest”. He was reacting to Trudeau’s declaration that Canadians would “not be pushed around” and would hit back at punishing US tariffs on metal imports with “equivalent tariffs”. “Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our US farmers, workers and companies, I have instructed our US Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the US Market!” Trump tweeted. “PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that … he ‘will not be pushed around.’ Very dishonest & weak.”

‘Drama, Action, Emotional Power’: As Exhausted Aides Eye the Exits, Trump Is Re-Energized

Several high-profile aides, including John F. Kelly, the president’s chief of staff, are said to be thinking about how much longer they can do their jobs.
Thomas Jefferson wearing a suit and tie: Several high-profile aides, including John F. Kelly, the president’s chief of staff, are said to be thinking about how much longer they can do their jobs.

WASHINGTON — President Trump has gone overseas to embark on some of the most consequential diplomatic negotiations of his tenure, threatening an all-out trade war with allies and seizing a chance to make peace with a nuclear-armed menace.

But back home, he left behind a West Wing where burned-out aides are eyeing the exits, as the mood in the White House is one of numbness and resignation that the president is growing only more emboldened to act on instinct alone. Mr. Trump, a former reality television star, may soon be working with a thinned-out cast in the middle of Season 2, well before the midterm elections. Several high-profile aides, including John F. Kelly, the president’s chief of staff, and Joe Hagin, a deputy of Mr. Kelly’s, are said to be thinking about how much longer they can stay. Last week, Mr. Kelly told visiting senators that the White House was “a miserable place to work,” according to a person with direct knowledge of the comment. turnover, which is expected to become an exodus after the November elections, does not worry the president, several people close to him said. He has grown comfortable with removing any barriers that might challenge him — including, in some cases, people who have the wrong chemistry or too frequently say no to him. Mr. Trump, who desires a measure of chaos at all times, is reveling in the effects of his own mercurial decision-making, the people said. Stephen K. Bannon, the president’s former chief strategist, said in an interview that Mr. Trump’s love of conflict had driven his approach to the presidency. “This is how he won,” Mr. Bannon said. “This is how he governs, and this is his ‘superpower.’ Drama, action, emotional power.” Mr. Trump believes that he is gaining ground by trying to set the terms of news coverage around a number of issues affecting his White House, according to interviews with a dozen White House advisers, former aides and people close to the president. He has repeatedly promoted his performance at the one-year and 500-day milestones of his term, sowed confusion about his knowledge of hush payments to a pornographic film actress, and disparaged the special counsel’s Russia investigation, as well as railed against trade imbalances and scored a once-unthinkable meeting with the North Korean leader, to be held Tuesday in Singapore. His daily torrent of tweets about the Russia inquiry, interpreted by his critics as distress signals, is more often than not a sign that he is less worried about the consequences of using the blunt force of his platform to fight back, according to three advisers. Rather than trusting the people around him, Mr. Trump has taken to working the phones more aggressively to seek counsel from outside voices, particularly two of his longest-serving advisers — Corey Lewandowski, his first campaign manager, and his longtime friend David Bossie. Among the president’s other confidants is Scott Pruitt, the administrator of the Environmental Protection Agency. Mr. Trump has dismissed the advice of several aides who have tried to persuade him to fire Mr. Pruitt in light of the growing questions about misuse of his authority. The two speak frequently, and the president enjoys discussing his negative view of Jeff Sessions, the attorney general. Mr. Trump’s reliance on outside advisers, she said, also signals an “emasculation” of the chief of staff in the White House, who is meant to serve as the president’s confidant and gatekeeper. “It seems as though Chief of Staff Kelly is losing power by the day,” Ms. Tenpas said. “It’s almost like a battery that’s draining. I’ve not seen any presidency operate effectively without putting somebody in there that you respect and you can trust.”

G7 summit: France condemns Trump ‘fits of anger’

Diplomacy cannot be dictated by “fits of anger”, French President Emmanuel Macron warned after a G7 summit in Canada ended in acrimony. In tweets, US President Donald Trump described host Justin Trudeau as “dishonest and weak” and retracted his endorsement of the joint communique. That statement sought to overcome deep disagreements, notably over trade. Mr Macron’s office said France and other EU countries would maintain their support for the final G7 communique. “Let’s be serious and worthy of our people. We make commitments and keep to them,” a statement from the French presidency quoted by AFP news agency said. “International co-operation cannot be dictated by fits of anger and throwaway remarks,” it added. Germany also said it would abide by the communique. In recent weeks, trading partners of the US have criticised new tariffs on steel and aluminium imports imposed by the Trump administration. Saturday’s final communique aimed at easing those tensions by advocating a “rules-based trading system”. In a news conference after the summit, the Canadian leader reasserted his opposition to the US tariffs, and vowed to press ahead with retaliatory moves on 1 July. “Canadians are polite and reasonable but we will also not be pushed around,” he said. Tweeting en route to his next summit in Singapore, Mr Trump said he had instructed US officials “not to endorse the communique as we look at tariffs on automobiles”. He said the move was based on Mr Trudeau’s “false statements… and the fact that Canada is charging massive tariffs to our US farmers, workers and companies”. Mr Trudeau’s office responded by saying the prime minister had said nothing he had not said before, both in public and in private conversations with Mr Trump. The G7 summit, held in La Malbaie, Quebec province, also covered such issues as relations with Russia. In the communique, the group of major industrial nations – Canada, the US, the UK, France, Italy, Japan and Germany – had initially agreed on the need for “free, fair, and mutually beneficial trade” and the importance of fighting protectionism. On 1 June, the US imposed a 25% tariff for steel and 10% for aluminium on imports from the European Union (EU), Canada, and Mexico. Mr Trump said the move would protect domestic producers that were vital to US security. The EU then announced tariffs on US goods ranging from Harley-Davidson motorcycles to bourbon. Canada and Mexico are also taking action in retaliation.

US CFTC Suspects Bitcoin Futures Price Manipulation, Subpoenas Exchanges

Coinbase, Kraken, itBit and Bitstamp have received requests for trading data.

The US Commodity Futures Trading Commission has sent subpoenas to four cryptocurrency exchanges asking for trading data, according to the Wall Street Journal which cited people familiar with the matter. The exchanges are Coinbase, Kraken, itBit and Bitstamp. It is from these sources that the price of Bitcoin futures as sold by CME Group is determined. CME Group is a major financial company with many different lines of business. Relevant here is its exchange in Chicago that sells financial derivatives products such as options and futures. In December of 2017 it began selling futures contracts based on Bitcoin. CME’s launch of Bitcoin futures was a pioneering step, playing a big part in bringing cryptocurrency into the mainstream consciousness. For these contracts, the price of Bitcoin is determined by taking an average of the price on the aforementioned four exchanges over an hour on the last Friday of the month.

Trump: With my ‘feel,’ I’ll know if Kim is serious within a minute

U.S. president says he’ll make a snap judgement on the high-level nuclear talks with North Korea
Getty Images President Donald Trump boards Air Force One to travel to Singapore to meet with North Korean leader Kim Jong Un.

When you know, you know.

That’s how President Donald Trump feels about whether it’s worth pursuing a relationship with Kim Jong Un, going by remarks at a press conference Saturday. The U.S. leader was rushing to catch a flight to meet his North Korean counterpart, having bailed early on his old gang of friends, the Group of Seven, who were holding a summit in Quebec. At the unprecedented talks in Singapore, “The Art of the Deal” author Trump hopes to get Kim to agree to denuclearize — that is, to abandon North Korea’s nuclear weapons program. Asked how long it would take for him to figure out whether Kim is serious about giving it up, Trump jumps in to answer: “I think within the first minute.” “How?” the reporter asks. “Just my touch, my feel,” the president says. “That’s what I do.”

Officials from Washington and Pyongyang have been in heated horse-trading for the high-stakes summit since April, when North Korea first hinted it would be open to discussing denuclearization. Whether those nuclear vows are heartfelt has been a worry for the White House. Trump will walk away from the negotiating table rather than be “played” by North Korea with false promises, Vice President Mike Pence has said. Maybe that’s why Trump has been telling reporters this week that he didn’t feel he had to prepare much for the historic get-together. “It’s about the attitude,” he said. “You know they say you know if you like somebody in the first five seconds? … I think that very quickly I’ll know whether or not something good is going to happen,” Trump said in the Quebec presser. “I also think I’ll know whether or not it will happen fast … it may not.”

Trump casts North Korea summit as ‘one-time shot’ for Kim

SINGAPORE (AP) — President Donald Trump cast his Tuesday summit with North Korea’s Kim Jong Un as a “one-time shot” for the autocratic leader to ditch his nuclear weapons and enter the community of nations, saying he would know within moments if Kim is serious about the talks. Trump said Saturday he was embarking on a “mission of peace,” as he departed the Group of Seven meeting in Canada to fly to the summit site in Singapore. Saying he has a “clear objective in mind” to convince Kim to abandon his nuclear program in exchange for unspecified “protections” from the U.S., Trump acknowledged that the direction of the high-stakes meeting is unpredictable, adding it “will always be spur of the moment.” “It’s unknown territory in the truest sense, but I really feel confident,” he told reporters. “I feel that Kim Jong Un wants to do something great for his people and he has that opportunity and he won’t have that opportunity again.” “It’s a one-time shot and I think it’s going to work out very well,” he said. Raising expectations in advance of the meeting, Trump said the outcome will rely heavily on his own instincts. The U.S. president, who prides himself on his deal-making prowess, said he will know “within the first minute” of meeting Kim whether the North Korean leader is serious about the nuclear negotiations. “I think I’ll know pretty quickly whether or not, in my opinion, something positive will happen. And if I think it won’t happen, I’m not going to waste my time. I don’t want to waste his time,” Trump said. Trump has said he believes Kim would agree to denuclearization — and Secretary of State Mike Pompeo said Thursday he had received Kim’s personal assurances to that effect — but the two countries have offered differing visions of what that would entail. Despite Kim’s apparent eagerness for a summit with Trump, there are doubts that he would fully relinquish his nuclear arsenal, which he may see as his guarantee of survival. U.S. defense and intelligence officials have assessed the North to be on the threshold of having the capability to strike anywhere in the continental U.S. with a nuclear-tipped missile — a capacity that Trump and other U.S. officials have said they would not tolerate. Trump reiterated his promise Saturday that the U.S. “will watch over and we’ll protect” Kim and his government in return for him giving up the nuclear program. He also indicated that South Korea, China and Japan would be prepared to invest in the North to boost its besieged economy.

Some fund managers are avoiding Amazon as it leads U.S. market

NEW YORK (Reuters) – For most U.S. fund managers, beating the market this year has come down to one decision: whether or not to own shares of Amazon.com Inc  More than 70 percent of the actively-managed U.S. large-cap funds that are beating the 3.5-percent gain in the benchmark S&P 500 own shares of the Seattle-based e-commerce giant, according to Lipper data. Shares of the company are up nearly 45 percent for the year-to-date, and account for nearly 40 percent of the S&P 500’s gain for the year, according to S&P Global. Those gains have left even investors like Warren Buffett, who has never invested in Amazon, kicking themselves for missing out on the company’s growth. “I was too dumb to realize what was going to happen,” Buffett said at Berkshire Hathaway Inc’s (BRKa.N) annual shareholder meeting in early May. Amazon has benefited this year from continued growth of e-commerce and is a business that seems largely immune from the threat of a global trade wars. Yet with volatility in the stock market expected to continue through the U.S. midterm elections in the fall, Amazon’s pricy valuation and high level of fund ownership may leave the stock more vulnerable to a steep decline, analysts warn.As a result, some outperforming fund managers who have so far avoided Amazon are branching out into companies ranging from Asian e-commerce company Alibaba Group Holdings Ltd to medical device maker Abiomed Inc all in an effort to find better values.

Doll has avoided Amazon because of its trailing price-to-earnings ratio of 267, a valuation more than ten times that of the broad S&P 500. Shares of Alibaba are up 21 percent for the year and trade at a trailing price to earnings ratio of 54.3.

Fund manager concentration in Amazon may leave the company more vulnerable to sell off if the volatility in the broad market increases this fall ahead of the mid-term elections, said Todd Rosenbluth, director of mutual fund research at CFRA Research. “We’re of the belief that there will be greater market volatility for the duration of 2018 and while in theory that gives active managers a chance to buy in on whatever they have missed out on, that volatility could hit the better performers first,” he said. “The average U.S. company is not growing that much. Earnings may be up a lot but a big slug of that is from the benefits of the Trump tax cut,” he said. “The only way to outperform is to find companies that are creating their own theme.” Nick Bit: These valuations are crazy shit. We are headed for another TECH WRECK and we are loaded for bear. Its not just Amazon either.

Soros: “Everything That Could Go Wrong Has Gone Wrong’

Image: Soros: "Everything That Could Go Wrong Has Gone Wrong'
George Soros. (Photo by Chip Somodevilla/Getty Images)

New York liberal billionaire donor George Soros lamented the state of world events in an interview published Saturday: “Everything that could go wrong has gone wrong.” In a rare interview with The Washington Post, Soros, 87, said he did not expect Republican Donald Trump to win the 2016 presidential election. “Apparently, I was living in my own bubble,” he said, later adding that Trump “is willing to destroy the world.” Soros spent at least $25 million mobilizing Democratic voters to support Hillary Clinton and other left-wing candidates in 2016, according to the Post. But he is also under fire from critics across the globe, from Russian President Vladimir Putin to Rosanne Barr, and several district attorney candidates he backed in this week’s California primary lost. “We ran into a brick wall in California,” said Soros, who plans to spend at least $15 million on the November races. “The bigger the danger, the bigger the threat, the more I feel engaged to confront it,” Soros said after speaking at a Human Rights Watch conference in Zurich on Thursday. “So, in that sense, yes, I redouble my efforts.” He also acknowledged that the Soros-bashing could blunt his impact. “It makes it very difficult for me to speak effectively because it can be taken out of context and used against me,” he said. Reflecting on the 2016 race, Soros said Clinton would have made a “very good president,” but she was not a strong campaigner. “She was too much like a schoolmarm,” Soros said. “Talking down to people . . . instead of listening to them.” He remained, however, firm on his views about Trump, describing him as a “narcissist” who “considers himself all-powerful.” Soros disagrees, though, with fellow liberal billionaire Tom Steyer’s impeachment push — telling the Post he would only back such an effort if the Democrats retook Congress and gained some help from Republicans. Here’s the cost, he said: “This would make [Vice President] Pence the president, who is much more competent in representing the far right, whose views with which I disagree, than Trump himself.”

China hosts Russia, Iran for summit as US tensions rise

The Shanghai Cooperation Organisation (SCO) is a regional security bloc led by China and Russia
The Shanghai Cooperation Organisation (SCO) is a regional security bloc led by China and Russia (AFP Photo/Greg BAKER)

Chinese President Xi Jinping will open late Saturday a two-day regional security summit attended by Russia, Iran and other allies confronting rising tensions with the US over trade and Washington’s withdrawal from the Iranian nuclear deal. Armoured vans lined the streets of the coastal city of Qingdao as world leaders arrived Friday for the 18th annual summit of the Shanghai Cooperation Organisation (SCO), a regional security bloc led by China and Russia. Its member states also include four ex-Soviet Central Asian republics, Pakistan and India. Iran is an observer member. Authorities emptied an entire oceanside swathe of the city — clearing out shopkeepers, residents and day-trippers to make way for Xi, his Russian counterpart Vladimir Putin and Iran’s President Hassan Rouhani. Pakistani President Mamnoon Hussain and India’s Prime Minister Narendra Modi will also attend the meeting. The leaders will be addressed by Xi this evening at an opening banquet from 7.45pm (1145 GMT), according to the official schedule, before taking in a fireworks display. The SCO meeting comes after President Donald Trump controversially pulled Washington out of the 2015 international pact with Iran that placed limits on its nuclear programme in return for easing economic sanctions. Though not officially on the agenda, analysts say that one key topic of discussion this year may focus on whether Iran will be allowed to ascend from its position as an SCO observer to become a full member state — a development it has sought since 2008 but has been unable to achieve while subject to UN sanctions. Now in the wake of the US withdrawal from the pact, “SCO members may use granting full membership to Iran as a way to demonstrate support for (Tehran) and the nuclear agreement,” said Dawn Murphy, professor of international security studies at the US Air War College. Speaking Saturday to AFP in Lithuania’s capital Vilnius, senior Iranian official Massoumeh Ebtekar said Iran hoped European powers, Russia and China would confirm their willingness to uphold the deal “as soon as possible because Iran cannot wait forever.” “We have been a faithful player to this commitment, we’ve done our best, we’ve shown our good intentions. We are facing a very volatile region,” she said. The tensions over Iran come as another nuclear issue dominates headlines, with Trump and North Korean leader Kim Jong Un preparing for an unprecedented summit in Singapore.

German Chancellor Merkel’s stare down photo sums up Trump’s time at G-7

If a picture is worth 1,000 words, Angela Merkel has some thoughts.

WASHINGTON — The German chancellor uploaded a photograph on Instagram of her and French President Emmanuel Macron seeming to stare down President Trump. The U.S. president is staring back, arms crossed, as Japanese Prime Minister Shinzo Abe looks on with his arms also crossed. National Security Adviser John Bolton and other aides also look on what appears to be a tense moment. The captions reads: “Day two of the G7 summit in Canada: spontaneous meeting between two working sessions. #G7Charlevoix.” The leaders had been meeting at the Group of Seven summit in Quebec, Canada over the weekend. Despite the president describing his relationship with the other leaders as “a 10,” conversations between the world’s largest industrialized countries were thought to be intense as the allies faced off with Trump over tariffs his administration has imposed on them. Trump said the tariffs are necessary for national security. Macron also tweeted Saturday a photo of the other leaders and aides surrounding Trump, who was one of just two people sitting. In the photo, Macron is looking directly at the president and gesturing.  “#G7Charlevoix, second day: A new step has been taken. After a long day of work and very direct dialogue, we are actively seeking an ambitious agreement,” an English translation of Macron’s tweet reads.

On Saturday morning Trump said he was open to getting rid of the tariffs if the other countries agreed to a more pure form of free trade. Britain, France, Germany, Italy, Japan and Canada are the other members of the G7. Russia used to be included rounding out the group to G8, Trump has been lobbying for the country to be let back in.

Trump delivers warning to allies on trade as he leaves G-7 summit

‘If [our trading partners] retaliate, they’re making a mistake,’ said Trump at the G-7 meeting in Canada.

Third straight week of losses for FTSE 100 as anxiety grips European investors

LONDON (Reuters) – Britain’s leading stock index fell on Friday, tracking a broad sell-off by European shares as investors faced the prospect of tightening financial conditions and growing political risk.  The FTSE 100 closed down 0.3 percent for its third straight week of losses. Germany’s DAX dropped 0.4 percent and Italy’s FTSE MIB sank 1.9 percent. Risk appetite has dried up this week a new Italian government settled in and the European Central Bank indicated it might end ultra-loose monetary policy earlier than expected. Divisions on trade as G7 leaders’ summit got under way added to investors’ anxieties. “Events going on that people point to, such as the G7 meeting, are all idiosyncratic things that have their impact, but I think often what you see is a broader story underneath that is affecting everything and is probably exacerbating those situations,” said Clark Fenton, chief investment officer at Agilis Investment Management. “I think it comes back to quantitative tightening.” On Friday financials were the biggest drag on the FTSE 100, as HSBC, Prudential, Lloyds and Barclays fell 0.3 to 1.2 percent.

Schumer: Trump ‘turning our foreign policy into an international joke’

Schumer: Trump 'turning our foreign policy into an international joke'
© Greg Nash

 

Senate Minority Leader Charles Schumer (D-N.Y.) blasted President Trump‘s suggestion that Russia should be allowed to rejoin the Group of Seven, saying his foreign policy is becoming a “joke” and “erratic.”  “President Trump is turning our foreign policy into an international joke, doing lasting damage to our country, without any rhyme or reason,” Schumer said in a statement. The Senate Democratic leader added in a separate tweet that allowing Russia to rejoin the group of major industrial powers would reward Russian President Vladimir Putin.  “Readmitting Russia to the G-7 would reward Vladimir Putin for actions the U.S. and its allies have condemned, and would clearly be contrary to America’s interests. The president’s foreign policy decision making seems to become more erratic every day,” Schumer tweeted.

Trump raised eyebrows when he told reporters earlier Friday that Russia should be reinstated into the Group of Seven major economies. “With that being said, Russia should be in this meeting,” he said. “Why are we having a meeting without Russia being in the meeting?” The move is likely to spark further anger from U.S. allies and drew an immediate backlash from lawmakers, who have been wary for years over Trump’s warmer tone toward Moscow.   “We need the president to be able to distinguish between our allies and adversaries, and to treat each accordingly. On issue after issue, he’s failed to do that,” Schumer said in his statement. He added that trying to reinstate Russia back into the G-7 in the wake of Moscow’s meddling in the 2016 presidential election “will leave millions of Americans with serious questions and suspicions.”  GOP Sens. Ben Sasse (Neb.) and Jeff Flake (Ariz.), who have both been openly critical of Trump, both panned Trump’s suggestion on Friday. “This is weak,” Sasse said in a statement. “Putin is not our friend and he is not the president’s buddy.”

Trump plows into G-7 summit, facing foreign critics

LA MALBAIE, Quebec (AP) — President Donald Trump charged into a summit of major industrialized nations on Friday for contentious trade talks, injecting fresh drama into an already tense meeting by calling for the reinstatement of Russia, which was ousted for its annexation of Crimea. Trump made the comment at the White House Friday after hours of further escalating his rhetoric against longtime allies over U.S. trade practices. “Why are we having a meeting without Russia in the meeting?” Trump asked. “They should let Russia come back in because we should have Russia at the negotiating table.” Solidifying his solo status on the world stage, Trump also lashed out at longtime allies over their criticism of his trade policies. He arrived behind schedule and planned an early exit from the G-7 meeting. Russia was ousted from the elite group in 2014 as punishment for President Vladimir Putin’s annexation of Crimea and support for pro-Russian separatists in Ukraine. In the U.S., special counsel Robert Mueller is investigating whether Trump’s campaign colluded with Russia in a bid to sway the 2016 presidential election in his favor. President Donald Trump has arrived in Canada for meetings at the G-7 summit in Quebec amid rising tensions over trade. At a joint press conference on Thursday, Macron said: “A trade war doesn’t spare anyone. It will start first of all to hurt U.S. workers.” Trudeau, for his part, said Trump’s action would hurt American workers as well as Canadians, adding he hoped to get Trump to realize it was “counterproductive.” As tempers frayed, Trump had a ready retort, via tweet: “Please tell Prime Minister Trudeau and President Macron that they are charging the U.S. massive tariffs and create non-monetary barriers. The EU trade surplus with the U.S. is $151 Billion, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow.” the president appeared in no hurry to leave for Canada. He walked out of the White House more than half an hour late, spent time greeting supporters gathered on the South Lawn, and then proceeded to take questions from reporters for nearly 20 minutes. He weighed in on everything from the Russia investigating to protesting NFL players and his next pardons. With a cool reception all but assured, Trump has complained to aides about even having to attend the G-7, especially since his Singapore summit with Kim is just days away. He will leave early Saturday morning, and will skip meetings about climate change, clean energy and ocean protection. Under Trump, the United States has abandoned its traditional role in the G-7. His predecessors pressed for freer global trade and championed a trading system that required countries to follow World Trade Organization rules. Trump’s policies have been more protectionist and confrontational, driven by a perception that the U.S. has been the victim of poorly conceived trade deals. “The rules-based international order is being challenged, not by the usual suspects, but by its main architect and guarantor: the United States,” European Council President Donald Tusk said.

New Charges Filed Against Manafort in Russia Probe

 

WASHINGTON — Special counsel Robert Mueller has brought additional charges against President Donald Trump’s campaign chairman and a longtime associate, accusing them of obstructing justice. The new charges were unsealed Friday against Paul Manafort and Konstantin Kilimnik just days after prosecutors accused the two men of attempting to tamper with witnesses as Manafort awaits trial of felony charges related to his work on behalf of Ukrainian interests. The indictment charges both men with obstruction of justice and conspiracy to obstruct justice related to contacts they had with two witnesses earlier this year. The witnesses, who had worked with Manafort as he represented a pro-Russian political party in Ukraine, have told the FBI that they believed Manafort and Kilimnik were trying to get them to lie about the nature of their work. Through a spokesman, Manafort has maintained his innocence. The spokesman, Jason Maloni, said Friday that Manafort and his attorneys were reviewing the new charges.

With Mueller Closing In, Manafort’s Allies Abandon Him

Paul Manafort, President Trump’s former campaign chairman, is awaiting trial on charges of violating financial, tax and federal lobbying disclosure laws.CreditYuri Gripas/Reuters

 

WASHINGTON — The special counsel’s accusation this week that Paul Manafort, President Trump’s former campaign chairman, tried to tamper with potential witnesses originated with two veteran journalists who turned on Mr. Manafort after working closely with him to prop up the former Russia-aligned president of Ukraine, interviews and documents show. The two journalists, who helped lead a project to which prosecutors say Mr. Manafort funneled more than $2 million from overseas accounts, are the latest in a series of onetime Manafort business partners who have provided damaging evidence to Robert S. Mueller III, the special counsel investigating Russian meddling in the 2016 election. Their cooperation with the government has increasingly isolated Mr. Manafort as he awaits trial on charges of violating financial, tax and federal lobbying disclosure laws. Mr. Manafort’s associates say he feels betrayed by the former business partners, to whom he collectively steered millions of dollars over the years for consulting, lobbying and legal work intended to bolster the reputation of Viktor F. Yanukovych, the former president of Ukraine. Mr. Manafort has told associates that he believes Mr. Mueller’s team is using the business partners to pressure him to flip on Mr. Trump in a manner similar to the one used to prosecute the energy giant Enron in the early 2000s by a Justice Department task force that included some lawyers now serving on Mr. Mueller’s team. “Anybody who is a student of the Enron prosecution sees a very close parallel,” said Michael R. Caputo, a former Trump campaign operative, who has known Mr. Manafort for three decades and spoke with him on Wednesday. Another associate said Mr. Manafort and some of his close allies were reading a book by the conservative lawyer and commentator Sidney Powell that claims misconduct in the Enron prosecution. And Mr. Caputo, who was interviewed by Mr. Mueller’s team last month, said that “when Paul decided to fight, he knew the lay of the land.” Prosecutors assert that Mr. Manafort’s fight included trying to shape the accounts that former business partners offered prosecutors. In court filings this week, they said that starting in late February, Mr. Manafort repeatedly tried to reach the two journalists — with whom he had fallen out of contact until recently — to coordinate their accounts about their work to tamp down international criticism of Mr. Yanukovych for corruption, persecuting rivals and pivoting toward Russia and its president, Vladimir V. Putin. The prosecutors did not name the journalists, but three people familiar with the project identified them as Alan Friedman and Eckart Sager. Both men fended off the overtures, which included phone calls and encrypted text messages from Mr. Manafort and a longtime associate, whom prosecutors have not named but was identified by people close to Mr. Manafort as Konstantin V. Kilimnik, a former Russian Army linguist who prosecutors claim has ties to Russian intelligence. Instead of engaging, Mr. Friedman and Mr. Sager informed Mr. Mueller’s team of the efforts to reach them, according to prosecutors.  The prosecutors are arguing that because of these allegations, a federal judge should revise the terms of Mr. Manafort’s bail or even send him to jail while he awaits trial. Mr. Manafort, who posted a $10 million bond and has been confined to his home since October, has until Friday at midnight to respond to the prosecutors’ accusations. His spokesman brushed aside prosecutors’ allegations of witness tampering, but declined to comment on Mr. Manafort’s relationship with Mr. Friedman and Mr. Sager.  Mr. Manafort. His associates say he was most stung by the decision of his longtime business partner, Rick Gates, who served as Mr. Trump’s former deputy presidential campaign manager, to cooperate as part of a deal in which he pleaded guilty to financial fraud and lying to investigators.

Merkel Urges Europe to Step Up in Trump’s New World Order

(Bloomberg) — Chancellor Angela Merkel made a forceful pitch for Europe to play a more assertive role in global affairs as U.S. President Donald Trump dismantles the post-World War II order, setting the stage for a potential tense standoff at the Group of Seven summit this week. The German leader again questioned the durability of trans-Atlantic relations by referring to eye-raising comments she made over a year ago in which she said that “the times when we could fully rely on others are to some extent over.” Those words, spoken at a beer-tent election rally, were a reaction to Trump hectoring European leaders for not spending enough on defense at a North Atlantic Treaty Organization summit in Brussels. Since then, more fuel has been added to the fire.“That was my takeaway from the NATO summit, and in the meantime I continue to feel confirmed by my statement,” Merkel said in Munich on Wednesday, this time to a meeting of the European People’s Party, a grouping of center-right parties in the European Parliament. In addition to the disruptive effects of the rift in NATO and Trump’s exit from the Paris global climate treaty, Merkel pointed to the fresh conflict over trade and the U.S. leader’s withdrawal from the Iran nuclear accord last month.

“All of that confirms the assessment that the world is being reorganized,” Merkel told the EPP.

The German chancellor has taken a firmer stance leading up to the two-day G-7 gathering in Canada, which starts Friday. Earlier on Wednesday, Europe’s most experienced government leader vowed to challenge Trump on trade and climate, saying the lack of room for compromise means leaders may fail to agree on a final statement.

Trump’s “America First” doctrine shows that “we have a serious problem with multilateral agreements,” Merkel told German lawmakers, adding that failure to reach common ground could lead to the highly unusual step of host Canada issuing a concluding statement not agreed to by all participants.

With Trump’s unpredictable leadership and the U.S. turn toward isolationism, Merkel said that the European Union needs to hone its response to a raft of issues in an environment in which global institutions need to be “newly proven.”

The 28-member bloc — soon to lose the U.K. after the 2016 referendum to exit the EU — managed to grapple with a financial meltdown and the biggest influx of refugees since World War II only with “great effort,” Merkel said. “But we don’t have a sufficient foundation to confront crises of the future,” she added, underscoring her push for reforms. To give the region more political heft, she called for joint action on security and migration, saying the bloc should “Europeanize” its presence on the United Nations Security Council. A rotating group of about 10 member states could work with veto-power France and the European Commission in order to “speak with one European voice” on the global stage, the chancellor said.

Chinese phone maker ZTE saved from brink after deal with U.S.

(Reuters) – China’s No. 2 telecommunications equipment maker ZTE secured a lifeline from the Trump administration on Thursday after agreeing to pay a $1 billion fine and overhaul leadership in a deal that will lift a ban on its doing business with U.S. suppliers. The agreement comes as U.S. President Donald Trump seeks trade concessions from China and negotiations continue to avoid a trade war between the world’s two largest economies. Shares of U.S. companies that do business with ZTE rose on Thursday. U.S. lawmakers immediately attacked the agreement, citing intelligence warnings that ZTE (poses a national security threat. ZTE pleaded guilty last year to conspiring to evade U.S. embargoes by selling U.S. equipment to Iran. The ban on buying U.S. parts was imposed in April after the company lied about disciplining some executives responsible for the violations. ZTE then ceased major operations. Under the deal, ZTE will change its board and management within 30 days, pay a $1 billion (£744.7 million) fine and put an additional $400 million in escrow. The deal also includes a new 10-year ban that is suspended unless there are future violations.

Trump reportedly requested Saudi oil support before Iran nuclear decision

Saudi Crown Prince Mohammed bin Salman
Fayez Nureldine | AFP | Getty Images Saudi Crown Prince Mohammed bin Salman A day before U.S. President Donald Trump withdrew from the Iran nuclear deal, one of his senior officials phoned Saudi Arabia to ask the world’s largest oil exporter to help keep prices stable if the decision disrupted supply.

Riyadh, Tehran’s arch rival, has long been a close Washington ally, but direct pressure on a member of Organization of the Petroleum Exporting Countries (OPEC) over oil policies is rare. Washington last pressed Saudi Arabia to increase output in 2012. Riyadh has said that even though prices have spiked to over $80 per barrel, the highest since 2014, the market has yet to recover from a long slump. Until the phone call, Saudi officials had been saying it was too early to raise output. Riyadh took this line partly because higher crude prices could help the stock market float of a stake in state oil giant Saudi Aramco expected to take place in 2019, Saudi industry sources had told Reuters. So there was shock among some of Saudi Arabia’s fellow OPEC members when it issued a supportive statement hours after Washington imposed new sanctions on Tehran. It said it was ready to raise output to offset any supply shortage. Three sources familiar with the matter said a senior U.S. administration official had called Saudi Crown Prince Mohammed bin Salman before Trump’s announcement to make sure Washington could count on Riyadh, the de facto OPEC leader. One of the sources said the call took place on May 7. The other two did not specify a date for the call. Washington was worried that the sanctions would curb deliveries from Iran and push oil prices up, the sources said.A White House spokesperson declined to comment on whether a call took place. A senior Saudi official did not confirm the call but said: “We were made aware of the decision on the JCPOA (Joint Comprehensive Plan of Action) before the announcement…We always have conversations with the U.S. about the stability of the oil market.” The Saudi statement in May threatened to undermine a deal between OPEC and its allies led by Russia to curb output by about 1.8 million barrels per day (bpd), starting from January 2017, to reduce a supply glut and boost prices. The deal is due to expire at the end of 2018. OPEC will meet on June 22 and needs a consensus of all members to officially change its output policy. Iran’s oil minister, Bijan Zanganeh, said last week he did not agree on the potential need to increase global oil supplies. An OPEC source familiar with Saudi thinking said that Riyadh and Washington had discussed their oil policies before the U.S. announcement on Iran.

Graham ‘not buying’ Giuliani claim that Mueller is trying to frame president

Graham 'not buying' Giuliani claim that Mueller is trying to frame president
© Greg Nash

Sen. Lindsey Graham (R-S.C.) broke with Rudy Giuliani, President Trump‘s personal lawyer, saying on Thursday that he’s “not buying” the argument that special counsel Robert Mueller is trying to frame the president. “Mueller’s not above being scrutinized. He’s not above being challenged. But I’m not going down the road of saying this is some kind of exercise to frame the president,” Graham told reporters. Graham added that he’s known Giuliani for 20 years. “His job is to represent the president,” he said. “[But] I’m not buying this.” Giuliani said at an event in Israel on Wednesday that Mueller has a group of investigators that includes “13 highly partisan Democrats … (who) are trying very, very hard to frame him to get him in trouble when he hasn’t done anything wrong,” according to The Associated Press. Graham noted that similar arguments were made against Ken Starr, who investigated President Clinton in the ’90s, and he didn’t believe the arguments then, either. Trump and his allies have repeatedly lashed out at Mueller’s probe, arguing that its aim is to undermine the president. Trump, in a tweet on Monday, declared the investigation “totally unconstitutional.” On Thursday, the president called for the Mueller team’s “many conflicts of interest” to be made public

Donald Trump said Thursday that “attitude” is more important than preparation

Trump says Kim summit depends on attitude, not preparation

WASHINGTON (AP) — Heading into his North Korea summit with characteristic bravado, President Donald Trump said Thursday that “attitude” is more important than preparation as he looks to negotiate an accord with Kim Jong Un to denuclearize the Korean Peninsula. Preparing to depart Washington for the next week’s meeting, Trump dangled before Kim visions of normalized relations with the United States, economic investment and even a White House visit. Characterizing the upcoming talks with the third-generation autocrat as a “friendly negotiation,” Trump said, “I really believe that Kim Jong Un wants to do something.” Trump’s comments came as he looked to reassure allies that he won’t give away the store in pursuit of a legacy-defining deal with Kim, who has long sought to cast off his pariah status on the international stage. The North has faced crippling diplomatic and economic sanctions as it has advanced development of its nuclear and ballistic missile programs. “I don’t think I have to prepare very much,” Trump said. “It’s about attitude. It’s about willingness to get things done.” Declaring the summit to be “much more than a photo-op,” Trump predicted “a terrific success or a modified success” when he meets with Kim next Tuesday in Singapore. He said the talks with Kim would start a process to bring about a resolution to the nuclear issue. U.S. President Donald Trump is telling Japan’s Prime Minister Shinzo Abe that he and South Korean leader Moon Jae-in have been “extremely helpful” ahead of his historic summit with North Korean leader Kim Jong Un. (June 7) “I think it’s not a one-meeting deal,” he said. Asked how many days he’s willing to stay to talk with Kim, Trump said, “One, two three, depending on what happens.”Still Trump forecast that he’ll know very quickly whether Kim is serious about dealing with U.S. demands. “They have to de-nuke,” Trump said. “If they don’t denuclearize that will not be acceptable. And we cannot take sanctions off.” Trump, who coined the term “maximum pressure” to describe U.S. sanctions against the North, said they would be an indicator for the success or failure of the talks. “We don’t use the term anymore because we’re going into a friendly negotiation,” Trump said. “Perhaps after that negotiation, I will be using it again. You’ll know how well we do in the negotiation. If you hear me saying, ‘We’re going to use maximum pressure,’ you’ll know the negotiation did not do well, frankly.” Trump spent Thursday morning firing off a dozen unrelated tweets — on the Russia investigation and other subjects — before meeting with Japanese Prime Minister Shinzo Abe to talk about summit preparations and strategy. “I think I’ve been prepared for this summit for a long time, as has the other side,” he said. “II think they’ve been preparing for a long time also. So this isn’t a question of preparation, it’s a question of whether or not people want it to happen.”

House of Fraser to shut 31 stores, 6,000 jobs at risk

LONDON (Reuters) – House of Fraser said it needed to close 31 stores to survive, in a plan likely to result in as many as 6,000 job losses, making the department store group the latest in a long line of retail casualties in Britain. The closures include the group’s flagship shop on Oxford Street in central London and will leave it with just 28 stores across Britain and Ireland. “These proposals are central to the significant restructuring of the business, without which House of Fraser does not have a viable future,” the group, whose history stretches back to 1849, said in a statement on Thursday. Its decline has been rapid, with the 480 million pounds ($645 million) paid in 2014 by Nanjing Cenbest, part of China’s Sanpower Group, for an 89 percent stake, looking like a deal from a bygone era. The planned closures follow last month’s announcement that another Chinese group, retailer C.banner ( had agreed to become the majority owner with a 51 percent stake, with Nanjing Cenbest remaining a minority shareholder. House of Fraser is not alone in having to shrink. Many British retailers are shutting shops as they try to survive in the face of competition from online retailers such as Amazon, a squeeze on consumer budgets and a change in Briton’s spending habits away from fashion and towards holidays and entertainment. Rival department store group Debenhams ( downgraded its profit forecast for the second time in months in April, while department store market leader John Lewis has cautioned on its outlook. Illustrating tough trading conditions, House of Fraser said underlying sales had fallen by 7.4 percent compared to the prior year in the 13 weeks to April 28. A one-time owner of London’s most famous shop Harrods, House of Fraser has in its long history been through store closures before, shutting a number of its Scottish stores in 2003 and its Dickins & Jones shop on London’s Regent Street in 2006, but never on this scale. House of Fraser said that if the CVA is approved by creditors up to 6,000 jobs could go as it shuts stores in cities including Birmingham, Edinburgh and Cardiff.

Trump’s aim to revitalize manufacturing is unlikely to help economy much in long run

Goldman Sachs sees few benefits to GDP from Trump strategy
Getty Images President Trump want to restore a bygone golden age for Americans manufacturers.

President Trump is fighting prevailing trade winds to restore a seemingly bygone golden era for American manufacturers and give the U.S. economy a long-term boost. But he’s probably tilting at windmills, new research suggests. The White House in the past month has ratcheted up the pressure on what it views as unfair trade practices of China, Europe, Mexico and even Canada in an effort to protect American steel and spur more production of autos in the United States.

“If you don’t have steel, you don’t have a country,” the president has said repeatedly, a view that he appears to extend to other traditional areas of manufacturing.

The manufacturing industry is not what it once was, but it’s still an important part of the economy. Manufacturers employ about 10% of all American workers, account for nearly half of U.S. imports and almost 70% of domestic research and development, a key to future prosperity. It’s also a good source of well-paying jobs for men who lack a college education, paying about a 16% premium vs. comparable jobs outside of manufacturing, according to an estimate from Goldman Sachs. Yet even if the rejuvenation of U.S. manufacturing becomes the centerpiece of Trump’s economic strategy, “it may not necessarily lead to must faster” growth in gross domestic product, Goldman economists contend. For one thing, manufacturing no longer leads the way in productivity, one of the two main engines of an economy’s long-term performance (the other is population growth). Until 2005 productivity in the manufacturing sector outgrew productivity in the overall economy by an average of 1.5 percentage points a year — a huge difference. Since then it’s trailed the overall economy. Another pitfall for the White House strategy is the changing nature of manufacturing in the U.S.

The biggest increases in productivity as well as research and development are taking place in relatively newer fields such as computers, electronics and biotech instead of older manufacturing segments such as apparel, mining and metals.

By and large, the president has been focused on traditional manufacturers and not the ones that are leading the industry in the 21st century. “Manufacturing has played a special role in broader productivity growth and still pays relatively high wages,” wrote Goldman economists Blake Taylor and Daan Struyven. “However, policies intending to boost the relative importance of manufacturing may not necessarily lead to faster GDP growth, because its productivity growth advantage appears to have faded, and because identifying manufacturing is becoming increasingly difficult.” Don’t expect Trump to recalibrate his approach, though. The 71-year-old president often waxes nostalgic about American manufacturing prowess and he has for years. His strategy is not without political benefits, either. The states with the highest percentage of manufacturing jobs — Iowa, Indiana, Michigan and Wisconsin — are all swing states that Trump won and were key to his victory in 2016.

Trump trade war threat sets up G7 summit clash

Ottawa (AFP) – Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron put Donald Trump on notice Thursday that they would not be intimidated at the upcoming G7 summit, as a trade war between Washington and its allies looms. Past summits of the Group of Seven powers — Britain, Canada, France, Germany, Italy, Japan and the United States — have often been marred by anti-globalist demonstrations in the host city. But as the leaders of the world’s richest democracies set off Thursday for Quebec on the eve of their annual meeting, the greatest threat to the liberal world order was due to be inside the fence. Trump may well be distracted by preparations for his June 12 summit with North Korea’s Kim Jong Un, which will be in Singapore immediately after the rich-world talking shop in Canada. But it seems likely that the US leader will enjoy a warmer encounter with the autocrat from Pyongyang than with his Canadian hosts and European and Japanese allies. Leaders like Trudeau and Germany’s Chancellor Angela Merkel admit it will be difficult to even agree on a joint communique at the two-day meeting. Merkel said Wednesday that there would be “no compromise for its own sake” and that dropping the statement “may be the more honest way.”.

Canada’s Trade Minister Francois Philippe Champagne was blunter, declaring: “What we are seeing is that the world economic order is under pressure, under attack.”

Top White House economics advisor Larry Kudlow, in line with the long-standing expert consensus in the G7 industrialized democracies, opposed tariffs before joining Trump’s team, but now says he agrees that the trade status quo hurts America But now, according to Laurence Nardon of the French Institute for International Relations (IFRI), one of the main actors on the international stage is no longer following the same script. “It completely calls into question the international system,” she told AFP. “This G7 summit is a new act in the drama. So far, the six are standing strong, but Trump has not finished.” Since coming to office in January 2017, Trump has pulled the US out of the Paris climate accord, the Iran nuclear deal and the TPP Pacific free trade deal.

Special counsel Robert Mueller’s team is requesting that witnesses turn in their personal phones to inspect their encrypted messaging programs

Mueller wants witnesses' personal phones inspected, say sources
Mueller wants witnesses’ personal phones inspected, say sources

Special counsel Robert Mueller’s team is requesting that witnesses turn in their personal phones to inspect their encrypted messaging programs and potentially view conversations between associates linked to President Donald Trump, sources told CNBC. Since as early as April, Mueller’s team has been asking witnesses in the Russia probe to turn over phones for agents to examine private conversations on WhatsApp, Confide, Signal and Dust, according to the sources, who spoke on condition of anonymity. Fearing a subpoena, the witnesses have complied with the request and have given over their phones, the sources said. While it’s unclear what Mueller has discovered, if anything, through this new request, investigators seem to be convinced that the apps could be a key to exposing conversations that weren’t previously disclosed to them. The revelation that Trump associates are giving Mueller access to their encrypted apps comes as former campaign chairman Paul Manafort is being accused by investigators of tampering with witnesses through the same types of programs. On Monday, the special counsel filed a claim that Manafort tampered with witnesses after he was indicted in February for money laundering and illegally acting as a foreign agent. For evidence, Mueller’s deputy listed two apps, WhatsApp and Telegram, that they say Manafort used to contact the witnesses in his case. The filing also says that those conversations were provided to Mueller in May, a month after witnesses say they were approached to provide their phones. The encrypted applications are used to keep conversations private and give users the ability to have discussions without being monitored. WhatsApp, for instance, markets itself as a way to securely communicate with people overseas. “With WhatsApp, you’ll get fast, simple, secure messaging and calling for free, available on phones all over the world,” the website says. Dust dubs itself a “safer place to text,” and pushes its platform as a way to keep messages secretive as well as giving their users the ability to erase messages off of other people’s phones, according to their website. “All your messages automatically ‘dust’ (erase) in 24 hours or as soon as they’re read – you choose which,” the site explains. Dust was also the app reportedly used between longtime Trump personal attorney Michael Cohen and Felix Sater, a real estate developer who has claimed to have ties to Russian oligarchs, when they tried to complete a deal for Trump Tower Moscow. The plan ultimately fell apart. It isn’t surprising that witnesses are voluntarily giving over possible evidence to federal investigators, experts said. He added, though, that it’s “not commonplace, but not all that unusual, either,” for prosecutors to seek evidence from witnesses’ phones. “There’s nothing wrong with asking people to voluntarily provide information to the FBI for whatever investigation,” said Michael German, a retired FBI agent and current fellow with the Brennan Center for Justice’s Liberty and National Security Program. “And to the extent that that’s a voluntary action is where the rub is.”

Cambridge Analytica did receive data from researcher in Facebook storm, ex-chief says

Alexander Nix, former CEO of Cambridge Analytica, arrives at an annex of the Houses of Parliament to appear before the Digital, Culture, Media and Sport Committee in London, Britain June 6, 2018. REUTERS/Henry Nicholls

LONDON (Reuters) – Cambridge Analytica’s former chief denied deliberately misleading British lawmakers, even as he admitted that his firm did receive data from the researcher at the center of a scandal over Facebook data, contradicting his previous testimony. Cambridge Analytica has said its work on Donald Trump’s presidential campaign did not use data at the center of the Facebook scandal, where the details of around 87 million users were allegedly improperly obtained. Former chief Alexander Nix, in earlier testimony to a parliamentary committee, denied that Cambridge Analytica had ever been given data by Aleksandr Kogan, the researcher at the center of the scandal. However, on Wednesday he said that the consultancy had indeed been given data by Kogan. “Of course, the answer to this question should have been ‘yes,’” Nix said, adding that he thought he was being asked about whether Cambridge Analytica still held data from the researcher. He said the company had deleted the data. “My focus was on whether we still held the data… There was certainly no intention to mislead the committee,” he added. Lawmakers on the committee asked Nix to return to testify again to ask him about inconsistencies in his evidence. Kogan told lawmakers he did give Cambridge Analytica the data. Facebook says Kogan harvested the data by creating an app on the platform that was downloaded by 270,000 people, providing access not only to their own personal data but also data from their friends. Facebook said Kogan then violated its policies by passing the data to Cambridge Analytica. Lawmakers also quizzed Nix about a secret recording of him saying that Cambridge Analytica’s online campaign played a decisive role in U.S. President Trump’s election victory, broadcast by Channel 4 television in March. Cambridge Analytica at the time said the comments did not “represent the values or operations of the firm.” Nix apologized for his comments, saying he had been foolish and had made exaggerated claims in order to attract what he thought was a potential client. “All Mr Nix’s comments carried in our reports were used in context, including any caveats,” Channel 4 said in a statement.

EU says tit-for-tat tariffs against US ready in July

The European Commission, which handles trade matters for the 28-country EU, "expects to conclude the relevant procedure in coordination with member states before the end of June," said European Commission Vice-President Maros Sefcovic
The European Commission, which handles trade matters for the 28-country EU, “expects to conclude the relevant procedure in coordination with member states before the end of June,” said European Commission Vice-President Maros Sefcovic (AFP Photo/John MACDOUGALL)

Brussels (AFP) – The EU on Wednesday said a raft of retaliatory tariffs, including on whiskey and motorcycles, against painful metals duties imposed by the US would be ready as early as July. The European Commission, which handles trade matters for the 28-country bloc, “expects to conclude the relevant procedure in coordination with member states before the end of June,” said European Commission Vice-President Maros Sefcovic at a news briefing. “It is a measured and proportionate response to the unilateral and illegal decision taken by the US to impose tariffs on the European steel and aluminium exports which we regret,” said the former Slovak prime minister. From blue jeans to motorbikes and whiskey, the EU’s hit-list of products targeted for tariffs with the US reads like a catalogue of emblematic American exports. The European Union originally drew up the list in March but pledged not activate it unless US President Donald Trump followed through on his threat to impose 25 percent tariffs on steel imports and 10 percent on aluminium. The Trump tariffs came into effect on June 1 and the EU now joins Mexico and Canada and other close allies that have announced their own wave of counter-duties against Washington. The EU commission must now take their proposal to be signed off by the bloc’s member states amid divisions over what path to take against Trump’s unpredictable policies.  France and the Netherlands back a tough line against the US, while export powerhouse Germany has urged caution towards Trump’s “America First” policies.

Conservatives Bash Trump’s Plan to Save Failing Coal, Nuclear Power Plants

Image: Conservatives Bash Trump's Plan to Save Failing Coal, Nuclear Power Plants

By Theodore Bunker

Even conservatives and libertarians are ripping President Donald Trump’s order to strop failing coal and nuclear power plants from closing, with some callingit “economy-crippling central planning,” and comparing it to the work of a “third grade” student,

Although the exact details of the plan have not been officially released, a leaked internal memo obtained by Bloomberg News proposes that if Trump cites national security concerns, then the Energy Department can require regional grid operators buy power from certain coal and power plants for two years, according to the Federal Power Act and the Defense Production Act. But many conservatives are more concerned about what effects the plan could have on the economy and the energy industry than the legality of the proposal. The Heritage Foundation policy analyst Katie Tubb told CNBC that since the administration can’t find an open way of subsidizing coal and energy plants, they’re using national security as an excuse. She also compared the plan to former President Barack Obama’s using the Clean Air Act to regulate greenhouse gas emissions from power plants that were under the Clean Power Plan, a move that many conservatives paint as overstepping the president’s authority. “Neither are sound, principled policy and both promise harm to consumers. Instead, the President should turn dedicated attention to reversing the underlying policies that are causing the problems he wants to fix,” Tubb said. The Wall Street Journal’s chief economics commentator, Greg Ip, wrote on Wednesday that Trump’s plan will carry “a steep price, in both dollars and lives, most tragically for the coal miners he purports to help.” He describes the Trump administration’s argument for the plan as “baseless,” noting that Trump’s argument that the plants are needed in case fuel supplies run low is unfounded. “Fuel supply problems account for an infinitesimally small share of electrical outages and when supply problems do crop up, they are usually coal’s fault.” And The Washington Examiner wrote: “Trump’s energy bailout is a big mistake,” calling it “a ridiculously bad idea,” which will have “bad” consequences for both Trump and the coal industry. “First, this unprecedented government interference in energy markets will harm the economy under Trump’s watch. If energy prices rise, everyone will feel it. Voters will be deciding this fall whether to deprive Trump of the ability to enact his agenda and make appointments. To the extent that he pursues economy-crippling central planning policies, he risks losing that election.”

CEO optimism ebbs for first time in two years amid worries trade conflicts will hurt sales, drive up costs CEO optimis

President Donald Trump

CEO optimism about hiring, capital investment and sales growth fell  in the second quarter from record levels, marking the first decline in two years amid concerns that trade conflicts could drive up costs for consumers and business. According to the latest quarterly Business Roundtable CEO Economic Outlook Survey, the CEO Economic Outlook Index slipped to 111.1 in the second quarter, down from a record 118.6 in the first quarter, the first decline since before President Donald Trump was elected president. The index is a composite of CEO expectations for sales, hiring and capital spending plans over the next six months. The index is still well above its historical average of 81.2 for a sixth straight quarter. But CEO expectations in each of the three categories fell slightly. The survey of 132 CEOs specifically included a trade-related question, and it found CEOs are concerned about the Trump administration’s approach to international trade issues.

Ninety-five percent of the CEOs said there’s a moderate or serious risk that foreign trade retaliation could lead to lower U.S. exports, while 91 percent said higher costs of imports for consumers was a moderate or serious risk.

Fifty-eight percent see a moderate risk of lower U.S. economic growth as a result of Trump’s trade approach, while 41 percent see a serious risk of lower growth. The majority expect input costs for businesses to rise, with 47 percent seeing a serious risk of higher costs and 43 percent seeing a moderate risk.

Source: Business Roundtable

Expectations for hiring fell slightly to 95.5, off 3 points from the first quarter, while plans for capital investment dropped to 107.6, off 7.8 points. Sales expectations were down 11.6 points from the first quarter, to 130.3. J. P. Morgan Chase CEO Jamie Dimon, who chairs the Business Roundtable, said “business leaders are expressing historically strong optimism about our economy — and that’s delivering more jobs and increased wages to millions of Americans.” “To sustain this momentum, we need to ensure that we have competitive trade policies in place to provide the certainty necessary to deliver sustainable economic growth to create more opportunities for workers and families nationwide,” he said.

$119,050,900,000: Merchandise Trade Deficit With China Hit Record Through April

Chinese President Xi Jinping (Screen Capture)(CNSNews.com)

The U.S. merchandise trade deficit with China set a record through April, hitting $119,050,900,000 for the first four months of 2018, according to data released today by the Census Bureau.

From January through April, the Census Bureau reports, the United States exported $42,291,500,000 in goods to China while importing $161,342,400,000.

In other words, when measured by dollar value, the United States bought about 3.8 times as much in goods from China as China bought from the United States. Prior to this year, the record for the highest trade deficit with China in the first four months of the year came in 2015, when it hit $115,320,000,000 in constant April 2018 dollars (adjusted using the Bureau of Labor Statistics inflation calculator).

The Census Bureau has posted online the month-by-month U.S.-China trade data going back to 1985. In 1985, the first year for which the Census Bureau has posted the data online, the U.S. ran a January-through-April merchandise trade deficit with China of $240,000,000 (in constant April 2018 dollars). The $119,050,900,000 U.S.-China merchandise trade deficit in January through April of this year is 496 times that amount. In January through April of 2017, the U.S. ran a $109,120,000,000 merchandise trade deficit with China (in constant April 2018 dollars). Through all of 2017, the U.S. ran a merchandise trade deficit with China of $375,576,400,000 (in 2017 dollars). This resulted from the U.S. importing $505,470,000,000 in goods from China, while exporting only $129,893,600,000. In 2017, according to the Census Bureau, the top products the U.S. imported from China (by dollar value) were cell phones and other household goods ($70,359,818,000); computers ($45,515,206,000); telecommunications equipment ($33,490,521,000); computer accessories ($31,648,577,000); toys, games and sporting goods ($26,751,412,000); apparel, textiles, nonwool or cotton ($24,137,388,000); furniture, household goods ($20,669,126,000); other parts and accessories of vehicles ($14,406,417,000); household appliances ($14,138,581,000); and electric apparatus ($14,080,858,000). Nick Note: See the above list? Most of those items the US have no US factories capable of making them. So its no a matter of competition but a high labor rate in America that makes it cost prohibitive to manufacture in the US. Please note all the items listed the US invented and US companies make a fortune selling such items. NOT NOT in doing the donkey work making them!!!

California Democrats on Track to Advance in Key Races for House Control

Feinstein outdistances rivals in Senate primary as her party seeks gains in House districts

SAN FRANCISCO—The Democratic Party on Wednesday appeared on track to avoid being shut out of several competitive California House races, escaping pitfalls of the state’s primary election system that would have threatened its fight for control of Congress in November. In a handful of closely watched races Tuesday, a Democratic candidate finished in the top two, ensuring the party will have someone on the general-election ballot, after the party invested millions of dollars to advance some candidates and undercut others. And in the state’s Senate race, Sen. Dianne Feinstein, a five-term lawmaker who was the only Democrat in the Senate facing a serious primary challenge in 2018, was far ahead of the second-place finisher, who was also a Democrat, according to the Associated Press. If those results stand, Republicans would have no Senate candidate on the fall ballot in California. The state’s vote, particularly for its House seats, was being intensely watched by both parties. The deep blue state is the vanguard of opposition to the Trump presidency, and Democrats have designs on seven GOP-held House seats to get them a good part of the way toward a net gain of 23 seats they need to seize control of the chamber. Still, Democrats risked having no candidate on the ballot in a few House districts they hoped to flip, given the large number of Democratic candidates and the state’s all-party primary system, in which the top two vote-getters advance to a November election regardless of party. By early Wednesday, Democrats held second-place positions in several key races, although voter-roll snafus Tuesday and a plethora of tight races mean it could be days before the outcome in key races is known for sure. Ms. Feinstein’s chief challenger is Democratic state Sen. Kevin de Leon, who has argued that the 84-year-old incumbent hasn’t done enough to stand up to President Donald Trump. In a sprawling field of 32 Senate candidates, the top Republican contender was James Bradley, a veteran and head of a health-care startup company. With almost all precincts reporting, Ms. Feinstein had nearly 44% of the vote, while Mr. De Leon had 11% and Mr. Bradley about 9%, the AP said as of Wednesday morning. In all three, Democrats were at risk of becoming victims of their own party’s strength, because anti-Trump sentiment had set off a stampede of candidates for Congress. Party leaders may have averted that outcome in all or most of the races by spending millions in advertising in the closing weeks to ensure the party’s vote wasn’t diluted among too many candidates. The Democrats have a “blue wave” of momentum building for the 2018 midterms, thanks to a motivated base, success in special elections and a low approval rating for President Trump. Will that be enough to take back the House and the Senate?

Miss America is scrapping its swimsuit competition, will no longer judge based on physical appearance

PHOTO: The 2018 Miss America Competition at Atlantic Citys Boardwalk Hall, Sept. 10, 2017, in N.J.
Lou Rocco/ABC via Getty Images The 2018 Miss America Competition at Atlantic City’s Boardwalk Hall, Sept. 10, 2017, in N.J.

Miss America is scrapping its swimsuit competition and will no longer judge contestants based on physical appearance, the organization announced Tuesday. “We are no longer a pageant,” Gretchen Carlson, the first former Miss America to be named chair of the Board of Trustees of the Miss America Organization, said on “GMA.” “We are a competition.” In place of the swimsuit portion of the competition, Miss America contestants will now take part in a live interactive session with the judges, according to the organization. The contestants from all 50 states and the District of Columbia will be asked to demonstrate their passion, intelligence and overall understanding of the job of Miss America. The organization is also getting rid of the evening gown portion of the competition and instead asking contestants to wear attire that makes them feel confident and expresses their personal style. The contestants will also discuss how they will advance their chosen causes, called “social impact initiatives” by the Miss America Organization. “We’ve heard from a lot of young women who say, ‘We’d love to be a part of your program but we don’t want to be out there in high heels and a swimsuit,’ so guess what, you don’t have to do that anymore,” Carlson said. “Who doesn’t want to be empowered, learn leadership skills and pay for college and be able to show the world who you are as a person from the inside of your soul.” She continued, “That’s what we’re judging them on now.” In addition to being crowned Miss America in 1989, Carlson has more recently been an outspoken advocate for victims of sexual harassment and a champion of the #MeToo movement. In 2016, she settled a lawsuit against former Fox News Chairman and CEO Roger Ailes, who stepped down from his role after mounting pressure from additional employees with similar accusations.”I could have never expected what would happen when I sued my former employer at Fox News for sexual harassment 22 months ago, but look what has happened,” she said. “Thousands of women have been inspired to know that they can stand up and speak up and their voices will be heard.”

Bilderberg Globalists Concerned About Populist Uprising in Europe

The annual elitist confab is set to meet this week in Turin, an appropriate venue given that Italy has just elected an anti-mass migration, eurosceptic coalition government. According to the group’s official website, the number one topic of conversation at this year’s secretive meeting will be “populism in Europe”. Having failed to install a former IMF technocrat after coalition talks between the 5 Star Movement and Lega parties temporarily broke down, globalists will undoubtedly be expressing alarm at the potential for Italy to be an example to the rest of Europe. The country’s new populist government has vowed to deport 500,000 migrants, re-assert localism over globalisation & monopoly capitalism, monitor mosques and reinvigorate the country’s Christian heritage, all policies that directly contradict the neoliberal globalist consensus that Bilderberg represents. The clandestine group is also set to discuss, “The US before midterms” and the “post-truth world,” which includes efforts to combat so-called “fake news”.

Iran to boost uranium enrichment if nuclear deal fails

Image copyright AFP Image caption Iran insists its nuclear programme is for purely designed to meet its energy needs

Iran says it has begun work on increasing its uranium enrichment capacity, in case its 2015 nuclear deal with world powers collapses. The head of Iran’s atomic agency told reporters it was developing infrastructure to build advanced centrifuges at the Natanz facility. The agency says it is officially notifying the United Nations’ nuclear agency about the move in a letter. President Donald Trump withdrew the US from the deal with Iran last month. The head of Iran’s Atomic Energy Organisation, Ali Akbar Salehi, told reporters on Tuesday that preparations were under way to build new centrifuges. “If we were progressing normally, it would have taken six or seven years, but this will now be ready in the coming weeks and months,” he said. The work will enable Iran to make more uranium hexafluoride – a key ingredient in the enrichment process. Mr Salehi said this was in line with instructions from Supreme Leader Ayatollah Khamenei, who has ordered officials to be prepared to step up enrichment if the nuclear deal – known as JCPOA – falls apart completely. “If the JCPOA collapses – please pay attention, if the JCPOA collapses – and if we decide to assemble new centrifuges, we will assemble new-generation of centrifuges. However, for the time being, we move within the framework of the JCPOA,” Mr Salehi said. Mr Salehi insists Iran is acting “within the framework of the rules and commitments of the nuclear deal”. The accord signed with the US, France, Germany, the UK, Russia, and China, limits uranium enrichment by Iran to 3.67%, far below the roughly 90% threshold of weapons-grade material. In exchange, the country received relief from crippling sanctions. Under the agreement, Iran can build parts for the centrifuges as long as it does not put them into operation within the first decade. President Trump argued that these conditions did not go far enough to curb Iran’s nuclear ambitions and pulled out of the agreement, leaving the remaining European signatories scrambling to save it. Iran insists its nuclear programme is entirely peaceful. Its compliance with the deal has been verified by the IAEA. It is Iran’s largest uranium enrichment facility, and began operating in 2007 in contravention of UN Security Council resolutions. It consists of underground buildings capable of holding up to 50,000 centrifuges. Uranium hexafluoride gas is fed into centrifuges, which separate out the most fissile uranium isotope U-235. The facility produces low-enriched uranium, which has a 3%-4% concentration of U-235. That can be used to produce fuel for nuclear power plants, but also be enriched to the much higher level of 90% needed to produce nuclear weapons. This is a clear signal from Tehran that it is not simply a bystander and that if the nuclear deal collapses it has options too. It comes as key European countries struggle to keep the nuclear agreement on life support. Major international companies are already beginning to distance themselves from Iran in fear of US sanctions. The move inevitably increases the sense of tension and it probably does those countries eager to maintain the deal few favours. It highlights the whole issue of Iran’s formerly ambitious enrichment programme and again raises the question as to exactly what this enrichment programme was ultimately for.

Pentagon chief sees ‘bumpy road’ toward North Korea nuclear negotiations

Pentagon chief sees ‘bumpy road’ toward North Korea nuclear negotiations
© Getty

Secretary of Defense James Mattis cautioned that it will be “a bumpy road” toward nuclear talks later this month with North Korea. Mattis made the remarks during a meeting with his Japanese and South Korean counterparts, according to The Associated Press. “We can anticipate, at best, a bumpy road to the negotiations,” said Mattis, as reported by the AP. “In this moment we are steadfastly committed to strengthening even further our defense cooperation as the best means for preserving the peace,” he added. The comments come after President Trump said his June 12 summit with North Korean leader Kim Jong Un is back on schedule, despite the president’s earlier plans to scrap the gathering. “We’re going to be June 12 — we’ll be in Singapore. It’ll be a beginning,” Trump said Friday. “I think we’re going to have a very positive result in the end.” Trump announced the cancellation of the summit, scheduled to take place in Singapore, at the end of May in a letter to Kim. But the president quickly expressed hope that the meeting between the two leaders could still happen. South Korea’s defense minister, Song Young-moo, during the meeting with Mattis on Sunday similarly urged caution, citing previous attempts to negotiate with North Korea over its nuclear program.  “Of course, given North Korea’s past, we must be cautious in approaching this,” said Song, according to the AP.

Trump: China soybean tax, Canadian agricultural products trade barriers unacceptable

 A man displays imported soybeans at a port in Nantong, Jiangsu province, China April 9, 2018. REUTERS/Stringer

WASHINGTON (Reuters) – U.S. President Donald Trump said on Monday that Chinese and Canadian trade barriers on agricultural products are unacceptable, as he continues to push Beijing to open its economy further and address its large trade imbalance with the United States. “China already charges a tax of 16% on soybeans. Canada has all sorts of trade barriers on our Agricultural products. Not acceptable!” Trump wrote in a Twitter post.

Billionaire Koch brothers’ political network will spend millions to oppose Trump’s tariffs – the group’s biggest split with the president so far

The Koch brothers’ network is denouncing President Trump’s tariffs on the EU, Canada and Mexico

The political network backed by billionaire industrialists Charles and David Koch on Monday unveiled a multiyear, multimillion-dollar campaign opposing the tariffs implemented by President Donald Trump’s administration. Last week’s decision by the Trump’s administration to place tariffs on imported steel and aluminium from key U.S. allies the European Union, Canada and Mexico apparently was the tipping point for the influential Koch network, which typically supports Republicans and conservative causes. The group is now moving ahead with a pro-free trade campaign that will include media buys, activist education, grass-roots mobilization, lobbying and policy analysis. Koch network groups Freedom Partners, Americans for Prosperity and the Libre Initiative made it clear in an announcement Monday that they are opposed to Trump’s tariffs and that their media and PR blitz is determined to show the benefits of open trade policies. “This campaign makes a clear statement: Trade is a major priority for our network,” James Davis, executive vice president of Freedom Partners, said in a statement. “We will work aggressively to educate policymakers and others about the facts. Trade lifts people out of poverty and improves lives. It is critical to America’s future prosperity and our consumers, workers and companies. Tariffs and other trade barriers make us poorer. They raise prices for those who can least afford it.” While Americans for Prosperity President Tim Phillips praised the administration for other economic policies, he did not hold back in denouncing the tariffs. “The Trump administration has taken some incredibly positive steps for the American economy, but tariffs will undercut that progress and needlessly hamstring our full economic potential. There are better ways to negotiate trade deals than by punishing American consumers and businesses with higher costs,” Phillips said. Daniel Garza, president of the Libre Initiative, argued that tariffs would hurt those who are part of the Hispanic community and, in particular, low-income workers. “Elected officials and policy leaders need to recognize that free and open trade policies make American workers and families more prosperous,” Garza said. “The taxes and trade barriers imposed by our government on U.S. consumers raise their cost of living and impose unnecessary costs on American firms in competition with others based abroad.” The Koch network’s new campaign could become a defining moment between the administration and the powerful Koch-backed groups. “Anything that threatens an incumbent, including a campaign like this, is something Republicans will look to, especially when it comes to money because politics is about money and they will bow to the dollar,” political strategist Hank Sheinkopf said in an interview. “Who are they more afraid of? The Koch brothers and their millions of dollars tossed at them or Donald Trump? An unemployed politician doesn’t know what to do with himself when he’s out of politics,” he added.

Angela Merkel on Italy: Solidarity in eurozone should not lead to debt union

Angela Merkel (Reuters/H. Hanschke)

German Chancellor Angela Merkel has congratulated Italy’s new prime minister, Giuseppe Conte. However, she later appeared to dismiss the Italian government’s calls to the European Central Bank for debt forgiveness. German Chancellor Angela Merkel held talks with Italy’s new populist prime minister, Giuseppe Conte, on Saturday and invited him to Berlin for further discussions on the two countries’ future relationship. The chancellor’s office said in a statement that Merkel had congratulated Conte on becoming prime minister. During the phone conversation, the two leaders emphasized the importance of “continued close bilateral cooperation,” the statement added. Conte, a little-known Italian law professor, has mostly kept quiet since being sworn in on Friday, but he announced on Facebook that, along with Merkel, he had also held talks with France’s Emmanuel Macron on Saturday. He said he would meet the two leaders at next week’s G7 summit in Canada, where he will be a “spokesman for the interests of Italian citizens.” Both parties campaigned on a policy platform that was characteristically hostile toward the European Union and the euro. Now that the parties are in power, it remains to be seen how far M5S and the League intend take the fight to Brussels and Frankfurt. The chancellor’s composure has not necessarily been reflected elsewhere in Germany. The latest edition of German weekly Der Spiegel, published on Friday, featured on its cover a forkful of spaghetti with a dangling strand tied together as noose. “Italy is destroying itself — and dragging down Europe with it,” the headline read. Shortly after speaking to Conte, reports emerged of Merkel appearing to rule out any possibility of Italian debt relief.  Merkel said solidarity among eurozone members should not turn the single currency bloc into a “debt union.” The German chancellor was responding to reports that the Italian government plans to ask the European Central Bank (ECB) to forgive some €250 billion ($292 billion) in debt. The ECB issued a statement saying the European treaties would not allow for such a move in the first place. When asked how she intends to deal with the new populist government in Rome, Merkel said she would “approach the new Italian government openly and work with it instead of speculating about its intentions.”

Bill Clinton says impeachment process over Russia probe would be underway if Democrat were in office

Washington (CNN)Former President Bill Clinton said that impeachment hearings would have begun if a Democratic president, instead of Donald Trump, were in power and the Russia investigation was as far along as it is now. “I think if the roles were reversed — now, this is me just talking, but it’s based on my experience — if it were a Democratic president, and these facts were present, most people I know in Washington believe impeachment hearings would have begun already,” Clinton told “CBS Sunday Morning.” The former Democratic president added, “And most people I know believe that the press would have been that hard, or harder. But these are serious issues.”

As of last month, the special counsel RobertMueller’s Russia investigation has led to 75  criminal charges, five guilty pleas, and one sentencing.
Asked if the media has been unfair to Trump in its reporting on the Russia probe, Clinton said, “I think they have tried by and large to cover this investigation based on the facts.” Clinton also took issue with Trump’s rhetoric and name-calling: “I don’t like all this. I couldn’t be elected anything now ’cause I just don’t like embarrassing people. My mother would have whipped me for five days in a row when I was a little boy if I spent all my time badmouthing people like this.” While in office, Clinton was the subject of an investigation led by independent counsel Ken Starr and faced impeachment in connection with his affair with White House intern Monica Lewinsky. Starr’s report accused Clinton of lying under oath, obstruction of justice, witness-tampering and abuse of power. The House impeached Clinton in 1998, but the Senate acquitted the President, preventing his removal from office. “It wasn’t a pleasant experience,” Clinton told CBS. “But it was a fight that I was glad to undertake. They knew there was nothing impeachable. And so, we fought it to the end. And I’m glad.” New York Sen. Kirsten Gillibrand, who holds Hillary Clinton’s former Senate seat, said in November that President Clinton should have resigned in light of the Lewinsky affair.
In the interview, Clinton said disagrees with Gillibrand, a fellow Democrat who was a big supporter of Hillary Clinton during the 2016 presidential campaign. “Well, I just disagree with her,” Clinton told CBS on Sunday. “I mean, you have to really ignore what the context was.”

Cutting corporate debt will drag China’s economic growth down to 4.5 per cent, says Fitch

The global ratings agency said measures taken by the government to bring down borrowing levels will inevitably dent business investment Beijing’s campaign to tackle the scourge of corporate debt will reduce China’s economic growth by more than one percentage point annually in the medium term, according to Fitch Ratings. The global ratings agency said measures taken by the government to bring down borrowing levels will inevitably dent business investment and take annual GDP growth down to about 4.5 per cent, well below the official target of 6.5 per cent.

“China’s corporate debt challenges remain a key downside risk to medium-term growth…investment needs to slow sharply to reduce corporate borrowing,” said Brian Coulton, chief economist at Fitch, in a report published on Sunday.

“Such an adjustment would take a big toll on GDP growth, given that business investment is equal to a quarter of GDP. “The scenario analysis we have undertaken suggests that, when it (deleveraging of the real economy) does occur, it will be a process that will be a significant drag on growth.” China’s policymakers have been aggressive in their drive to reduce the corporate debt mountain, intensifying their efforts this year and pressing regulators hard to implement measures to curb borrowing. But as credit growth and infrastructure investment have started to fall sharply, “cracks have appeared” in the real economy and a rise in defaults has tested the nerves of investors, said Larry Hu, head of China economics at Macquarie Securities in Hong Kong. Outstanding off-balance sheet lending plunged by 100 billion yuan in the first four months of 2018, having grown by 2.2 trillion yuan in the same period last year. “Of course Beijing could turn to easing or introduce measures to offset the impact of credit tightening, but so far it seems they are comfortable to tolerate the jitters caused by deleveraging, as long as the fundamentals of the economy remain okay,” Hu said. There have been more than two dozen bond defaults in China’s onshore market this year, mainly by private firms. In the offshore market, China Energy Reserve & Chemicals Group and CEFC Shanghai International Group defaulted on dollar notes in May. There is no official data to quantify corporate debt but many independent estimates put the figure at roughly 160 per cent of national gross domestic product. A Reuters survey recently suggested the total debt – including borrowing via loans and bonds – amounted to 13.2 trillion yuan (US$2.1 trillion) at the end of March. Instead of easing monetary conditions, Beijing has been fine-tuning measures to manage the balance between cutting debts and maintaining overall economic stability. The People’s Bank of China (PBOC), the country’s central bank, on Friday broadened the range of collateral it accepts in its medium-term lending operations, adding debt instruments tied to small-business funding and the green economy, to enhance support for smaller businesses.

In April, it cut the reserve requirement ratio by one percentage point to give lenders more liquidity.

A Reuters analysis last week showed that debt growth for Chinese companies has slowed to the lowest rate in more than a decade, but companies have also seen their profit margins squeezed to their lowest level in two years. China’s economic expansion is likely to slow to 6.6 per cent this year and to about 5.5 per cent by 2023, the International Monetary Fund (IMF) said in a statement issued last week in Beijing.

Higher oil prices could still stifle economy, upset car makers

U.S. auto makers betting big that small cars are a relic of the past

America’s recent oil boom has begotten a dangerous and false euphoria. Many economists and pundits have concluded rising oil prices are hardly damaging to the U.S. economy. In 2006, U.S oil production had bottomed at about 6.8 million barrels a day and the country labored under a $271 billion petroleum trade deficit. That taxed gross domestic product by at least 2.55 and employment by 3.5 million jobs during the Great Recession. The shale boom made the problem easier, and America’s energy policy makers — not nearly all of whom are in Washington — and critics of conservation seem to believe America can burn all the gas it likes and America is headed for a new prosperity as a net oil exporter. However, the problem has gotten easier but it has not gone away. This year, the overall petroleum deficit—crude oil and refined product imports less exports—will likely be about $100 billion and reduce aggregate demand by about 0.7% and employment by 1 million. The Trump administration recognizes the foreign policy and economic benefits of freeing America from import dependence and deserves significant credit for rationalizing petroleum production regulation. Along with rising oil prices, this is pushing up crude yields in the Permian and Bakken fields but net oil imports are still about 3.3 million barrels a day. Hence, when the price of oil rises, oil producers and workers’ incomes do rise but everyone else loses even more though higher priced gas, heating oil and feedstock for the petrochemical industry. And the overall drag on growth, employment and wages gets worse. The Saudis with help from Vladimir Putin, state entropy in Venezuela and sanctions on Iran have driven up oil and pump prices again—and Saudi Crown Prince Mohammad has set a target of about $80 per barrel. He needs that much to balance the kingdom’s budget, but the Saudis and Russians remain concerned about how much and how quickly they can push oil prices. If OPEC is dead as its American detractors allege, the crown prince has got a corpse dancing the supernatural—that has pushed gas prices to nearly $3 a gallon.

Japan fears being sidelined as dealmaker Donald Trump prepares to meet North Korea’s Kim Jong-un

Since the last time US President Donald Trump visited Japan for talks with Prime Minister Shinzo Abe, the once critically important bond between the two countries seems to have weakened. This could best be illustrated by the round of golf the two leaders had during Trump’s trip. Abe – a keen rather than skilled golfer – sank a shot into a bunker, although he managed to whack his ball out with a problem. However, as he was trying to get out, he lost his footing and tumbled back into the sand, his indignity caught with the long lenses of television cameras on hovering helicopters. Trump, oblivious to Abe’s plight, continued down the fairway with only his ball in mind. Seven months later, the US leader is still forging ahead in his dealings with North Korea and leaving Abe and Japan trailing unheeded in his wake. And that Trump is paying no attention to Japan’s primary concerns – security and the return of Japanese nationals abducted by North Korea – is causing concern in Tokyo. Japan is disappointed it has been left out of discussions on issues it believes it has a stake in and, on more than one occasion, has been stunned after only finding out about US policies through Twitter or media reports. Abe is due to travel to Washington before Trump leaves for his summit in Singapore with Kim Jong-un. He is expected to urge the US president to make sure Pyongyang commits to scrapping missiles capable of hitting Japan, destroying stockpiles of chemical and biological weapons, and provide details about missing Japanese, besides its promise to abolish nuclear weapons and long-range missiles.

Officials have not said it publicly, but the feeling in some quarters is that Trump would rather have an imperfect deal and the chance of a Nobel Peace Prize than have the talks fail.

“Abe advocates ‘maximum pressure’ on North Korea and the announcement … that Trump had agreed to a summit with Kim must have been a particularly bitter pill to swallow.”

On Friday, Trump said he does not want to use the term “maximum pressure” any more because the US and North Korea are now “getting along”.

That led to Japan’s Defence Minister Itsunori Onodera toning down a speech on Saturday at the Shangri-La Dialogue in Singapore and “pressure” being removed from a joint statement on North Korea with his South Korean and US counterparts. With Kim holding talks with President Xi Jinping, South Korean President Moon Jae-in and soon Trump, Abe appears increasingly sidelined.

America’s poor becoming more destitute under Trump: U.N. expert

FILE PHOTO: A tent is seen next to Echo Park Lake in Los Angeles, California, U.S. April 11, 2018.

GENEVA (Reuters) – Poverty in the United States is extensive and deepening under the Trump administration whose policies seem aimed at removing the safety net from millions of poor people, while rewarding the rich, a U.N. human rights investigator has found. In a report, Alston said that as welfare benefits and access to health insurance were being slashed, President Donald Trump’s tax reform awarded “financial windfalls” to the mega-rich and large companies, further increasing inequality. Extreme poverty in the United States, however, is not new. Alston said U.S. policies since President Lyndon Johnson’s war on poverty in the 1960s have been “neglectful at best”. “But the policies pursued over the past year seem deliberately designed to remove basic protections from the poorest, punish those who are not in employment and make even basic health care into a privilege to be earned rather than a right of citizenship,” Alston said. Almost 41 million people or 12.7 percent live in poverty, 18.5 million in extreme poverty, and children account for one in three poor, Alston said. The United States has the highest youth poverty rate among industrialized countries, he added. Alston, a veteran U.N. rights expert and New York University law professor, will present his report to the United Nations Human Rights Council later this month. Alston said that a tax overhaul that passed the Republican-controlled U.S. Congress in December will ensure the United States remains the most unequal society in the developed world. Trump has said tax cuts will lead to more take-home pay for workers and has touted bonuses some workers received from their employers as evidence the law is working.

Syria’s President Assad ‘to visit North Korea’

Image copyright AFP Image caption Mr Assad’s comment reportedly came as he met the North’s new ambassador to Syria

Syrian President Bashar al-Assad plans to make a state visit to North Korea, the North’s state news agency says. It would be the first time North Korean leader Kim Jong-un has hosted a head of state since assuming power in 2011. He has undertaken a flurry of diplomatic activity recently, meeting China’s president in May, and is expected to attend a summit with Donald Trump this month. Syria, an ally of the North, has made no comment on the reported plan. The two countries have been accused of co-operating on chemical weapons. But both nations deny the accusations. No date for the visit was mentioned by the North Korea’s KCNA news agency. It quoted Mr Assad as saying on Wednesday: “I am going to visit [North Korea] and meet Kim Jong-un.” His comments reportedly came as he received the credentials of North Korean ambassador Mun Jong-nam. Mr Assad was also quoted as saying that he was sure Mr Kim would “achieve the final victory and realise the reunification of Korea without fail”. The North established diplomatic relations with Syrian in 1966 and sent troops and weapons during the Arab-Israeli war in October 1973. A UN report leaked in February accused the North of making 40 shipments to Syria between 2012 and 2017 of materials including acid-resistant tiles, valves and pipes that could be used to make chemical weapons. Mr Assad has been accused of using chemical weapons during the nation’s seven-year civil war but denies having any such stockpiles. Since the North signalled at the start of this year that it was open to a rapprochement with the South, with which it is still technically at war, Mr Kim has met Chinese President Xi Jinping, South Korea’s Moon Jae-in and has floated a summit with Russian President Vladimir Putin this year. But it is the meeting in Singapore on 12 June with President Trump that is the most high-profile and which has the most at stake, with the US demanding the full denuclearisation of the Korean peninsula and the North seeking to ease crippling sanctions.

Arab oil ministers stress need for continued OPEC, non-OPEC cooperation

FILE PHOTO: A flag with the Organization of the Petroleum Exporting Countries

RIYADH (Reuters) – OPEC and non-OPEC Arab oil ministers stressed the need for continued cooperation between oil producers who are part of a pact for a global supply cut that is due to expire at the end of 2018, Kuwait’s state news agency KUNA reported on Sunday. The Organization of the Petroleum Exporting Countries, Russia and several other producers agreed to cut output by about 1.8 million barrels per day (bpd) starting from January 2017. The curbs have driven down inventories and pushed up oil prices. OPEC ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria along with their counterpart from non-OPEC Oman gathered in Kuwait on Saturday for an unofficial meeting of a joint ministerial committee that monitors compliance with the agreement. The ministers “stressed the need to maintain the existing cooperation and continue the successful endeavour carried out by the participating countries,” according to a statement by the committee, known as the JMMC, published on KUNA. “They called for sustaining the current partnership in order to continuously adapt to ongoing market dynamics, in pursuit of the interests of consumers and producers whilst promoting healthy global economic growth.” The ministers also “emphasised the need for healthy market conditions that stimulate adequate investments in the energy sector, in order to ensure stable oil supplies are made available in a timely manner to meet growing demand and offset declines in some parts of the world,” the statement added. The agreement has helped raise oil prices to above $80 a barrel and reduce a global oil supply glut.

OPEC could decide to raise oil output as soon as June to cool the market and due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC sources familiar with the discussions told Reuters last month. OPEC meets next on June 22 to set oil policy.

China warns US trade deals off if tariffs go ahead

Ross was accompanied by agriculture, treasury and trade officials for the meeting at the Diaoyutai State Guesthouse, a leafy compound on Beijing’s west side. Liu’s delegation included China’s central bank governor and commerce minister.

BEIJING (AP) — China warned Sunday after another round of talks on a sprawling trade dispute with Washington that any deals they produce “will not take effect” if President Donald Trump’s threatened tariff hike on Chinese goods goes ahead. The warning came after delegations led by U.S. Commerce Secretary Wilbur Ross and China’s top economic official, Vice Premier Liu He, wrapped up a meeting on Beijing’s pledge to narrow its trade surplus. Ross said at the start of the event they had discussed specific American exports China might purchase, but the talks ended with no joint statement and neither side released details. The White House threw the meeting’s status into doubt Tuesday by renewing a threat to impose 25 percent tariffs on $50 billion of Chinese high-tech goods in response to complaints Beijing steals or pressures foreign companies to hand over technology. The event went ahead despite that but Beijing said it reserved the right to retaliate. Tuesday’s announcement revived fears the conflict between the two biggest economies might dampen global growth or encourage other governments to raise their own barriers to imports. “If the United States introduces trade sanctions including a tariff increase, all the economic and trade achievements negotiated by the two parties will not take effect,” said the Chinese statement, carried by the official Xinhua News Agency. The negotiating process should be “based on the premise” of not fighting a “trade war,” the statement said. Trump is pressing Beijing to narrow its politically volatile trade surplus with the United States, which reached a record $375.2 billion last year. That comes at the same time Trump has riled some of America’s closest allies with the imposition of tariffs on steel and aluminum imports. After a three-day meeting of finance ministers from the G7 industrial nations that ended Saturday in Canada, Canadian Finance Minister Bill Morneau issued a summary saying the other six members want Trump to hear their message of “concern and disappointment” over the U.S. trade actions. Allies including Canada and the European Union are threatening retaliatory tariffs. Bruno Le Maire, France’s finance and economy minister, was blunt in his assessment of the meeting. “It has been a tense and tough G7 — I would say it’s been far more a G6 plus one than a G7,” said Le Maire, who called the tariffs unjustified. “We regret that our common work together at the level of the G7 has been put at risk by the decisions taken by the American administration on trade and on tariffs,” he said

Analysts suggested Trump might be trying to appease critics of his administration’s deal to allow Chinese telecom equipment giant ZTE Corp. to stay in business. They said those political pressures mean the technology-related tariff hikes are likely to go ahead.

Members of Congress criticized the agreement to lift a ban on sales of U.S. components to ZTE, which admitted violating rules on exports to Iran and North Korea. In exchange, the company is to remove its management team, hire American compliance officers and pay a fine. Trump has threatened to raise tariffs on a total of up to $150 billion of Chinese goods. Tuesday’s announcement gave no indication whether the other increases might also go ahead. China has threatened to retaliate by raising import duties on a $50 billion list of American goods including soybeans, small aircraft, whiskey, electric vehicles and orange juice. It criticized Tuesday’s announcement but refrained from repeating its earlier threat. Private sector analysts say while Beijing is willing to compromise on its trade surplus, it will resist changes that might threaten plans to transform China into a global technology competitor

Trump’s lawyer says will fight Russia probe subpoena

The Guel!

WASHINGTON (Reuters) – U.S. President Donald Trump’s lead attorney said that if the special counsel investigating Russia’s alleged meddling in the 2016 U.S. election were to subpoena the president, it would set off a legal battle, according to an ABC News report on Saturday. Rudy Giuliani, the former New York City mayor who became Trump’s lead lawyer in April, said the two sides would go to court if U.S. Special Counsel Robert Mueller attempts to subpoena the president. “If Mueller tries to subpoena us, we’re going to court,” Giuliani told ABC News. In addition to fighting a subpoena, Giuliani told ABC that Trump’s legal strategy as detailed in a January letter to Mueller and published by the New York Times on Saturday still stands. Trump’s lawyers had argued in the January letter that the president could not have obstructed the probe given the powers granted to him by the U.S. Constitution, the Times report said. In the letter penned by Trump lawyers John Dowd and Jay Sekulow, it was argued that president has the power to “order the termination of an investigation by the Justice Department or FBI at any time and for any reason.” In the letter to Mueller, Trump’s lawyers had contended that the Constitution gives the president the power to “terminate the inquiry, or even exercise his power to pardon,” and that meant he could not illegally obstruct the investigation, the Times reported. The 20-page letter was a response to repeated requests by Mueller’s office asking to interview Trump. Negotiations between Trump’s lawyers and the special counsel on a possible interview have continued ever since. As part of his investigation, Mueller is looking into the possibility the Trump campaign colluded with Moscow and that Trump subsequently tried to obstruct the probe. Russia has denied any interference and Trump has repeatedly said there was no collusion or obstruction of justice. Giuliani did not immediately respond to a request for comment. Mueller’s office declined to comment, while the White House and the two attorneys who wrote the letter – Sekulow and Dowd – did not reply to requests for comment. Dowd left the president’s legal team in March. Giuliani said last month that he wanted any interview of Trump to be limited in scope and length, suggesting it to be only 2-1/2 hours and not under oath. If the president does not consent to an interview with the special counsel and Mueller does subpoena him, the interpretation by Trump’s lawyers of broad executive powers would likely be tested in court if they decided to fight the subpoena. In arguing that Trump has the power to end an investigation or pardon people, his lawyers left open the possibility that they were referring only to a probe into his former national security adviser, Michael Flynn, and not necessarily an investigation of the president, the Times said. In an earlier tweet, Trump took what appeared to be a pre-emptive swipe at the Times report shortly before it ran that questioned whether Mueller’s office or the Justice Department leaked letters from his lawyers. “When will this very expensive Witch Hunt Hoax ever end?” Trump tweeted earlier on Saturday.

Jim Mattis Warns of Consequences If Beijing Keeps Militarizing the South China Sea

U.S. strategy in region rooted in ‘principled realism’ and shared interests, defense secretary says

U.S. Secretary of Defence Jim Mattis, speaking at the Shangri-La Dialogue in Singapore on Saturday, says ‘America is true in both word and deed.’
U.S. Secretary of Defence Jim Mattis, speaking at the Shangri-La Dialogue in Singapore on Saturday, says ‘America is true in both word and deed.’ Photo: edgar su/Reuters

SINGAPORE—The U.S. and China appear to be headed for a more confrontational relationship in Southeast Asia as Washington warns of a more aggressive response to the militarization of disputed islands in the South China Sea. Speaking at the Shangri-La Dialogue, a regional security conference, U.S. Defense Secretary Jim Mattis warned there could be “much larger consequences” in the future from China’s moves to install weapons systems on islands in the sea. He didn’t specify what the consequences would be. The warning, in response to a question from an audience member, came after a speech by Mr. Mattis in which he said “despite China’s claims to the contrary, the placement of these weapons systems is tied directly to military use for the purposes of intimidation and coercion.” He also called his decision to not invite China to the biennial Rim of the Pacific exercise, slated to begin later in June, “an initial response” to its increased militarization of the South China Sea. His comments were the most assertive yet in response to what he has described as a ramp-up of Chinese military activity in the past month. This appeared to lay the groundwork for an increased U.S. military—or even economic—response. China recently sent an H-6K heavy bomber to Woody Island, one of the areas under dispute. It also installed surface-to-air and antiship cruise missiles and communication-jamming equipment on some islands, U.S. officials have said. The U.S. responded last month by sending two Navy warships into the South China Sea to conduct a freedom of navigation operation. China’s activities are “in stark contrast to the openness of what our strategy promotes; it calls into question China’s broader goals,” Mr. Mattis told a packed house of international military officials, senior global lawmakers, experts and others on Saturday. China says it has “indisputable” sovereignty over a number of South China Sea islands and the surrounding waters. It says its new facilities are for defensive and civilian purposes. The U.S. military recently changed the name of its command covering Asia and the Pacific Ocean to the Indo-Pacific Command from the Pacific Command. Military analysts say the American appeal to India reveals concerns about Beijing’s assertive stance in the region. And it has drawn criticism from China. But during the conference’s keynote speech, Indian Prime Minister Narendra Modi stressed the concept of a “regional comprehensive partnership.” He spoke about the need to work with multiple nations, including the U.S. and China. “India does not see the Indo-Pacific region as a strategy or as a club of limited members,” Mr. Modi said.

Paul Ryan Undercuts Trump on Tariffs

Speaker Paul Ryan undercut President Donald Trump on Thursday after Trump ended a delay on tariffs imposed on foreign steel and aluminum.
Paul Ryan
Win McNamee/Getty Images

Ryan said in a statement on Thursday:

I disagree with this decision. Instead of addressing the real problems in the international trade of these products, today’s action targets America’s allies when we should be working with them to address the unfair trading practices of countries like China. There are better ways to help American workers and consumers. I intend to keep working with the president on those better options.

On Thursday, America ended a delay on steel and aluminum tariffs for the European Union, Canada, and Mexico. Speaker Ryan’s opposition to the tariffs on foreign steel contrasts with his Republican base. A Morning Consult poll in March revealed that 70 percent of Republican voters support Trump’s tariffs on foreign steel and aluminum. The survey also suggested that a plurality of Americans—41 percent — support Trump’s tariffs.

Another poll suggested that more than 80 percent of Americans support Trump’s trade economic nationalism.

Daniel McCarthy, the editor of the conservative Modern Age, told Breitbart News Saturday in March that the “Republican party was built on economic nationalism.”

McCarthy explained:

If we go back further than 30 years, we go back to the 19th century, the Republican party was built on economic nationalism and a party supported strong tariffs, people like President McKinley for example stand out as strong leaders of that. The Republican party has a long tradition of supporting American industry.

Speaker Ryan announced in April that he will not seek reelection at the end of this congressional term. Since Ryan announced his retirement, he has had to balance the competing interests of the moderate wing of the House Republican conference, that wants to pass a Deferred Action for Childhood Arrivals (DACA) illegal alien amnesty, and the House Freedom Caucus, that wants to pass the Trump-endorsed Goodlatte immigration bill. Speaker Ryan failed to garner enough votes to pass the Farm bill in May after the Freedom Caucus did not believe that the House Republican leadership would put the Goodlatte immigration bill on the House floor for a vote. Former Freedom Caucus chairman Jim Jordan (R-OH) told Breitbart News Saturday in May that conservative and moderate members have become frustrated with Speaker Ryan and the House Republican leadership. A number of conservative leaders have led a campaign to draft Jordan to become the next Speaker of the House. In the letter, the conservative leaders said that the current House leadership has “utterly failed” and “proven that it’s part of the Swamp.”

John Boehner says “There is no Republican Party. There’s a Trump party”

The GOP isn’t what it was, in House Speaker John Boehner’s view. Asked at a conference about what’s going on with the Republican Party, Boehner cut off the question by saying, “There is no Republican Party. There’s a Trump party. The Republican Party is kind of taking a nap somewhere.” “When I was speaker, and I was having a rough week, Trump would call me up, pat me on the back, cheer me up,” Boehner said during an on-stage interview at the Mackinac Policy Conference in Michigan. “We played a lot of golf together.” He admitted he was surprised when Mr. Trump was elected president — “Really? I never quite saw this,” he said. He then quipped, “The two most surprised people in the entire world that night (Election Night) were Hillary Clinton — and Donald Trump.”  Out of office, Boehner has spoken with similar frankness on other occasions. He’s referred to GOP Texas Sen. Ted Cruz as “Lucifer in the flesh,” telling one audience, “I get along with almost everyone, but I have never worked with a more miserable son of a bitch.” He also said that everything Donald Trump has done in office “has been a complete disaster,” except foreign policy.

Cleveland Fed’s Mester says the Italian turmoil and a flattening yield curve haven’t changed her interest-rate view

Regional Fed president tells MarketWatch she continues to see myriad reasons to keep lifting U.S. interest rates
Bloomberg Loretta Mester, president of the Federal Reserve Bank of Cleveland, spoke to MarketWatch in an exclusive interview.

The market may have encountered a fresh round of turmoil, but Cleveland Fed President Loretta Mester’s message on the U.S. economy and how many interest-rate hikes are needed has stayed just as it was. “Whether it’s three or four, I know the markets want to know exactly that, but in terms of the economy and the macroeconomy, I think that is less important. I think the important thing is we need to be moving the funds rate up gradually because the economy is improving, and we’re getting at our goals,” Mester said in an exclusive interview with MarketWatch from her elegant office in Cleveland.  Neither worries about contagion effects from the turmoil in Italy or a flattening yield curve has persuaded Mester to rethink her support for gradual rate hikes. Mester threw cold water on the idea that wages are somehow mysteriously low. The fact is that worker compensation is rising and soon will be reflected in the statistics, she said. In a wide-ranging interview, Mester, who is a voting member of the Fed’s policy committee this year, said she didn’t think inflation would spike. She said she could tolerate “a couple” of inflation readings above 2%. She stressed that the data would dictate the path of policy, and the impact of the Trump tax cut and congressional spending package would be much clearer later this year.

Goldman: NAFTA deal is now less likely after Trump’s tariffs on Mexico, Canada

Canada's Foreign Minister Chrystia Freeland (C) speaks before the start of a trilateral meeting with Mexico's Economy Minister Ildefonso Guajardo (L) and U.S. Trade Representative Robert Lighthizer during the third round of NAFTA talks involving the United States, Mexico and Canada in Ottawa, Ontario, Canada, September 27, 2017.
Chris Wattie | Reuters

The Trump administration’s decision to slap tariffs on Canada and Mexico makes it less likely there will be a new NAFTA deal in the near term and sends a modestly negative signal on U.S. trade policy, according to Goldman Sachs economists. The U.S. Thursday announced 25 percent tariffs on steel and 10 percent tariffs on aluminum imported from the European Union, as well as Canada and Mexico. Commerce Secretary Wilbur Ross said, on CNBC Thursday, that negotiations with Canada and Mexico were not far enough along to extend their exemption from the tariffs, which expired Friday. The U.S., Canada and Mexico have been negotiating a revamp of the North American Free Trade Agreement, but trade experts have been saying the outlook for an agreement is no longer as optimistic as it had been just a few weeks ago. Goldman economists say the tariffs now make the outlook even worse. “The decision to impose tariffs on Canada and Mexico suggests that prospects for a NAFTA agreement in the near-term are fading,” the Goldman economists wrote. “The Administration’s negotiating stance is often unpredictable so there is a risk of over-interpreting any single event. That said, this represents another signal that prospects for a near-term NAFTA deal are fading, just a few weeks after it had appeared fairly likely that a “skinny” agreement involving the auto sector might be reached.” House Speaker Paul Ryan had requested a deal by May 17 so that the current Congress could vote on it. But U.S. Trade Representative Robert Lighthizer warned that an agreement was not close. Goldman economists said the tariffs, as well as new quotas on South Korea, Australia and Brazil, should have only a modest economic impact. “The incremental inflation effect of these tariffs should be small. We estimate that adding Canada, Mexico, and the EU to the countries facing a tariff of 25% on steel and 10% on aluminum could boost core PCE by roughly 1bp. Imports from NAFTA and EU countries make up just under half of steel and aluminum imports,” the noted.

Sears is closing 72 more stores

Sears Holdings said Thursday it will be shuttering 72 more stores in 2018 and has identified 100 unprofitable locations in total that it plans to close over time. ,” Sears said. That consists of 15 Kmart stores and 48 Sears stores, all of which are expected to be closed by early September. A Sears spokesman declined to comment on the number of associates impacted by the news. This is in addition to the 64 Kmart stores and 39 Sears stores that have already shut down this year. The company will end 2018 with fewer than 1,000 locations spread across the U.S. altogether. Sears Holdings plans to shutter 72 more stores, with closing sales starting in the near future   The department store chain made the store closure announcement Thursday in tandem with reporting its first-quarter earnings, where it said sales dropped roughly 30 percent in the latest period. Sears has closed hundreds of locations over the years as part of its cost-cutting efforts, while revenues continue to erode. “We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted,” Sears said about its plans for the future.

Unemployment Rate Falls to 18-Year Low Matches the rate in 1929 the start of the great depression

US Unemployment Rates Matches the rate in 1929 Right Before the Start of the GREAT DEPRESSION

WASHINGTON—The U.S. labor market was firing on all cylinders in May: the unemployment rate fell to an 18-year low, employers added jobs at a faster pace and wages modestly improved. The unemployment rate ticked down to a seasonally adjusted 3.8%, matching April 2000 as the lowest reading since 1969, the Labor Department said Friday. Nonfarm payrolls rose a seasonally adjusted 223,000 in May, a jump from gains from March and April. Average hourly earnings ticked up to a 2.7% from a year earlier—and raises were even stronger for nonmanagers. U.S. employers have added to payrolls for 92 straight months, extending the longest continuous jobs expansion on record. And those gains are extending to all corners of the labor market.

The jobless rates for blacks, Latinos and those without high-school diplomas are trending near record lows.

A tighter labor market should also produce better wage growth, but overall gains have remained modest. Average hourly earnings for all private-sector workers increased 8 cents last month to $26.92.

“The tight labor market is putting employers under enormous pressure to invest as much as necessary to retain their best employees and attract the best talent,” said Rebecca Henderson, chief executive of employment firm Randstad Sourceright. One factor holding wage gains in check is the ability of employers in the past year to bring Americans who have been out of the labor market back into the workforce and dissuade existing employees from retiring or otherwise exiting.

In May, the share of American adults working or looking for a job edged down to 62.7%, but the share with jobs ticked up to 60.4%. Labor-force participation is up slightly from a recent low in 2015, but still near the smallest share of adults participating since the late 1970s.

Friday’s report showed the health care sector added 31,700 jobs. Employment also grew in construction, manufacturing and retail. Employment fell for temp workers. All levels of government added 5,000 jobs last month. Jobless RatesUnemployment fell to 3.8% in May, its lowest point in 18 years. A broad measure of unemployment and underemployment that includes Americans stuck in part-time jobs or too discouraged to look for work fell to 7.6% from 7.8% the prior month. That rate, known as the U-6, remains somewhat elevated compared with the last time unemployment was similarly low. In April 2000, the broader measure was 6.9%.

The average workweek was unchanged at 34.5 hours in May.