US Debt Sales To Surge: Treasury Raises 2018 Borrowing Need To $1.33 Trillion

America’s funding needs are starting to grow at a dangerous pace.

Even before the NYT reported of Trump’s startling suggestion of a further $100 billion tax cut in the form of an inflation-adjusted capital gains tax cost basis which mostly benefits the wealthy, earlier today the U.S. Treasury said it expects to borrow $56 billion more during the third quarter than previously estimated, while market participants expect shorter-dated Treasuries to absorb the brunt of the new supply as the Trump administration grapples with a mushrooming budget deficit. In the Treasury’s latest quarterly Sources and Uses table, it revealed thatit expects to issue $329 billion in net marketable debt from July through September, and $56 billion more than the $273 billion estimated three months ago, in April. assuming an end-of-September cash balance of $350 billion, matching its previous estimate. It also forecast $440 billion of borrowing in the final three months of the year, with a $390 billion cash balance on December 31. The borrowing estimate for the third quarter is the highest since the same period in 2010 and the fourth largest on record for the July-September quarter, according to Reuters. In the second quarter, net borrowing totaled $72 billion, slightly below the earlier prediction of $75 billion.

The US fiscal picture continues to darken as a result of rising social security costs, military spending and debt service expenses while corporate tax income is declining after last year’s tax reforms. As a result, the federal budget deficit is expected to reach $833 billion this year, up from $666 billion in the budget year ended last September, a number that is well below the net funding demands for the US Treasury.

The new projections put total net borrowing at $769 billion for the second half of 2018 and a whopping $1.33 trillion for the whole year. The federal budget deficit totaled $607 billion through the first nine months of the fiscal year that ends Sept. 30, up 16% compared with $523 billion from the same period a year earlier. In late June, the CBO forecast that total government spending would exceed revenue by $1 trillion in 2020. That would suggest that the net financing need of the US in two years could be as high as $1.5 trillion. “Because of surprising declines in corporate tax revenues, the federal deficit is constantly under discussion this month,” FTN rates strategist Jim Vogel told Reuters. Adding to the supply of bonds hitting the market, the Fed is also trimming its vast holdings of Treasury debt as part of Quantitative Tightening, with some $40BN in monthly reductions in the third quarter.

U.S. consumer spending rises; wage growth slows in second-quarter

FILE PHOTO: Shoppers ride escalators at the Beverly Center mall in Los Angeles, California, U.S., November 8, 2013. REUTERS/David McNew/File Photo

WASHINGTON (Reuters) – U.S. consumer spending increased solidly in June as households spent more at restaurants and on accommodation, building a strong base for the economy heading into the third quarter, while inflation rose moderately. Other data on Tuesday showed employers boosting benefits for workers in the second quarter, but wage growth slowed down. With savings at lofty levels and lower taxes increasing take-home pay for some workers, spending is likely to remain strong this year. Accelerating home prices, which are boosting wealth for some households, should also underpin consumption. Strong economic growth and steadily rising inflation are likely to allow the Federal Reserve to continue gradually raising interest rates. Fed officials started a two-day meeting on Tuesday. “More spending on ‘wants,’ not ‘needs,’ is always a good sign of consumer confidence,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “As long as incomes continue to rise and job creation remains strong, consumer spending should remain solid over the remainder of the year.” The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4 percent last month. Data for May was revised up to show consumer spending advancing 0.5 percent instead of the previously reported 0.2 percent gain. Last month’s increase in consumer spending was in line with economists’ expectations. The data was included in last Friday’s second-quarter gross domestic product report, which showed consumer spending accelerating at a 4.0 percent annualized rate during that period after a pedestrian 0.5 percent pace in the first quarter. The economy grew at a 4.1 percent rate in the second quarter, almost double the January-March period’s 2.2 percent pace and the strongest performance in nearly four years. June’s increase in consumer spending sets it on a higher growth path heading into the third quarter. Consumer spending last month was boosted by spending at restaurants and on accommodation. Spending on services accelerated 0.6 percent after rising 0.3 percent in May. Outlays on goods were unchanged after surging 0.9 percent in May. Prices continued to steadily rise last month. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components gained 0.1 percent in June. It had risen by 0.2 percent in the prior month.

That kept the year-on-year increase in the so-called core PCE price index at 1.9 percent for a third straight month.

The core PCE index is the Fed’s preferred inflation measure. The core PCE hit the U.S. central bank’s 2 percent inflation target in March for the first time since December 2011. The Fed is expected leave interest rates unchanged on Wednesday after increasing borrowing costs in June for the second time this year. It has forecast two more rate hikes by December. “For the Fed, there’s nothing to be alarmed about in this morning’s data,” said Chris Low, chief economist at FTN Financial in New York. “Consumers are behaving and inflation is stable.” The dollar firmed marginally against a basket of currencies. Prices for longer-dated U.S. Treasuries rose and stocks on Wall Street were trading higher.Spending in June was supported by a 0.4 percent increase in personal income, which matched May’s increase. Savings edged up to $1.050 trillion last month from $1.047 trillion in May. In a separate report on Tuesday, the Labor Department said its Employment Cost Index, the broadest measure of labor costs, rose 0.6 percent after an unrevised 0.8 percent advance in the first quarter. That pushed the annual increase in the ECI to 2.8 percent, the biggest gain since the third quarter of 2008, from 2.7 percent in the first quarter. Wages and salaries, which account for 70 percent of employment costs, rose 0.5 percent in the second quarter, retreating from a 0.9 percent surge in the January-March period. Wages and salaries were up 2.8 percent in the 12 months through June, also the biggest annual gain since the third quarter of 2008. “The long recovery in wages has reflected a large pool of workers on the sidelines,” said Adam Ozimek, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “One factor leaning against a return to rapid wage growth is weaker productivity.” Separately, the Conference Board said its consumer confidence index increased 0.3 point to a reading of 127.4 in July. Consumers were upbeat about the labor market. The survey’s so-called labor market differential, derived from data about respondents who think jobs are hard to get and those who think jobs are plentiful, increased to 28.1 this month from 25.3 in June. That measure closely correlates to the unemployment rate in the Labor Department’s employment report and is consistent with rapidly diminishing labor market slack. Despite their strong confidence in the economy, consumers appeared less enthusiastic about buying a home and household appliances. Still, the fundamentals for consumer spending remain strong. A fourth report on Tuesday showed the S&P/Case-Shiller 20-city composite price index rose 6.5 percent year-on-year in May after increasing 6.7 percent in April.

Oil heads for worst month in 2 years as Trump pressures Saudi Arabia

A floorhand works on an oil rig in the Bakken shale formation outside Watford City, North Dakota.
Getty Image
A floorhand works on an oil rig in the Bakken shale formation outside Watford City, North Dakota.

A handful of one-day losses has put the oil market on pace for its worst month in two years — and the source of those big swings can often be traced back to the White House. Supply and demand for oil are roughly in balance, so traders have been sensitive to any headlines that could tip the market into oversupply or shortage. Lately there has been no shortage of news, in part because of President Donald Trump’s penchant unexpected comments on Twitter, as well as his administration’s effort to impose sanctions on Iran, the world’s fifth biggest oil producer. “Welcome to a headline-driven market,” said John Kilduff, founding partner at energy hedge fund Again Capital. “It’s duck and cover and keep an eye on your Twitter feed.”

U.S. crude prices actually rose in 13 of the month’s 21 sessions, while Brent is also up in 13 of the 22 trading days. However, most of the one-day gains were moderate, with both benchmarks jumping more than $1 a barrel only once this month.

Meanwhile, Brent lost nearly $11 over three sessions spread throughout the first four weeks of July. U.S. crude lost almost $8 over as many days during the same period. A final day of losses on Tuesday is putting both futures on track for their worst monthly drop since July 2016. Heading into the month, oil prices had rallied strongly after a State Department official told reporters the Trump administration was pushing oil buyers to cut their purchases from Iran to zero by Nov. 4. Trump restored sanctions on Iran in May, but the deadline for winding down imports was more aggressive than the market had anticipated and raised fears of oil shortages. But a few days later, on July 2, Brent crude dropped nearly $2 a barrel after Trump declared on Twitter that Saudi Arabia’s king had agreed to pump up to 2 million more barrels per day to tame fuel prices. The White House later walked back that claim, saying the king would take an increase under consideration.

That same day, Reuters forecast that Saudi Arabia’s oil output had jumped by 700,000 bpd in June. Meanwhile, Russia’s energy minister said it had boosted its production back above 11 million bpd that month. Both headlines suggested that Saudi Arabia and Moscow were making good on their vow to raise output to prevent the market from overheating. Two days later, WTI had its first big drop for the month, falling $1.20 a barrel after weekly data showed a surprise jump in American crude stockpiles. Earlier in the day, Trump lobbed the latest in a series of Twitter critiques at OPEC, ordering the world’s cartel to reduce prices immediately. That fed speculation that Trump was getting impatient with relatively high fuel prices and considering selling oil from the nation’s emergency supply. (A week later, details of a plan to do just that leaked.)

Brent and U.S. crude both logged their biggest daily drop for the month on July 11, after Libya resolved a major disruption to its crude exports and Saudi Arabia reported a nearly 500,000 bpd jump in its oil output. Brent fell $5.46 a barrel, while U.S. crude ended the day down $3.73. Also that day, oil prices fell in tandem with stock markets after the Trump administration slapped tariffs on $200 billion of Chinese goods. The trade dispute between the nations — home to the world’s two biggest economies — has weighed on oil markets because it threatens to slow global growth and cool demand for crude. The final big drop came the following week later on July 16, with U.S. crude down nearly $3 a barrel and Brent dropping almost $3.50. That day, Treasury Secretary Steve Mnuchin eased the market’s concerns about oversupply, saying the administration would consider allowing some oil buyers to reduce their purchases from Iran more gradually. Mnuchin told reporters the administration wanted to avoid roiling oil markets as it pursued its Iran policy. On Tuesday, U.S. crude was down more than $1 a barrel to about $69, on pace for a roughly 7 percent decline this month. Brent fell toward $74, down about 6.5 percent in July. The latest declines came as a Reuters survey of analysts forecast another jump in OPEC’s output for July and Russia said its oil production would hit a 30-year high above 11 million bpd this year. “There’s been this rush to put more oil on the market by the Saudis and Russia, so I think in the near term, it’s a negative because we haven’t lost any of the Iranian barrels yet,” Kilduff said.

Trump says collusion is not a crime as first Russia probe trial begins

WASHINGTON (Reuters) – President Donald Trump again attacked Special Counsel Robert Mueller’s probe into Russia and the 2016 U.S. election on Tuesday, reiterating that his campaign did not collude with Moscow and saying collusion is not a crime anyway. U.S. President Donald Trump speaks during a joint news conference with Italy’s Prime Minister Giuseppe Conte in the East Room of the White House in Washington, U.S., July 30, 2018. REUTERS/Carlos Barria Trump commented hours before his former campaign chairman, Paul Manafort, was due to go on trial on tax and bank fraud charges in Virginia. As the first trial in the 14-month Russia probe, the case throws a fresh spotlight on a federal criminal investigation that has dogged Trump’s presidency. Mueller is investigating whether Trump campaign officials worked with Moscow to try to sway the 2016 U.S. presidential election, something commonly referred to as collusion by the media and public officials. “Collusion is not a crime, but that doesn’t matter because there was No Collusion (except by Crooked Hillary and the Democrats)!” Trump wrote on Twitter. While collusion is not a technical legal charge, Mueller is probing any coordination between the Russian government and the Trump campaign, and could bring conspiracy charges if he finds that any campaign member worked with Russia to break U.S. law. Legal experts said that working with a foreign national with the intent of influencing a U.S. election could violate multiple laws. “Collusion is basically a partnership in crime, which is conspiracy,” said Randall Eliason, a former federal prosecutor and a law professor at George Washington University. Trump has for months denied that the campaign colluded with Russia to try to engineer his victory against Democratic candidate Hillary Clinton, and he bristles at the suggestion he might owe his White House victory to Moscow. On Tuesday, he echoed his personal lawyer, Rudy Giuliani, who said in television interviews on Monday that collusion is not a crime. The strategy may be the latest in Trump’s efforts to strip legitimacy from the Mueller probe, which he has long denounced as a “witch hunt.” Russia has denied the finding of U.S. intelligence agencies last year that it interfered to sway the election to Trump. “The reason the Trump troops are pounding the ‘collusion is not a crime’ drum is because they colluded (better known as conspiracy, or aiding and abetting) and they want to get out in front of the story to control the narrative!” John Dean, President Richard Nixon’s legal counsel, wrote on Twitter. Manafort, 69, faces 18 criminal counts, which centre on allegations that he hid much of the $60 million he earned working for a pro-Russian politician in Ukraine in undisclosed overseas bank accounts and failed to pay taxes on it.

Mueller says Manafort earned $60M from Ukraine consulting

5 witnesses named in Paul Manafort trial

5 witnesses named in Paul Manafort trial 02:03

Washington (CNN)Prosecutors from special counsel Robert Mueller’s office said Monday that Paul Manafort earned $60 million from his work as a political consultant in Ukraine and challenged a motion by the former Trump campaign chairman’s attorneys to exclude dozens of exhibits on the topic. In a filing submitted in Virginia federal court, Mueller’s team said they planned to use evidence including “memoranda, emails, and photos reflecting tasks performed” to demonstrate the “full sweep of Manafort’s Ukraine work” and that he “was paid tens of millions of dollars in income.” Manafort’s attorneys last week fingered over 50 exhibits included on a proposed government list as prejudicial and irrelevant and asked the judge to disallow them from his trial, set to begin with jury selection on Tuesday. Manafort is charged with lying on tax forms and bank fraud. He has denied all charges against him. The indictment against Manafort says $75 million flowed through offshore accounts controlled by Manafort and his former business partner Rick Gates. Prosecutors on Monday said they need to use the exhibits in question to prove that Manafort earned that much income, which they contend he failed to report on his tax returns. The exhibits also “contain evidence about the identity of Manafort’s sources of income in Ukraine, and in particular the oligarchs who instituted the practice of paying Manafort via foreign accounts,” according to the filing. Mueller’s team also argued that Manafort’s motion would “exclude virtually every exhibit containing the name of several key government witnesses, thereby preventing the jury from hearing evidence that corroborates the witness’s expected testimony and demonstrates the witness’s credibility.

US crude rises 2.1%, settling at $70.13, boosted by signs of tight oil supply

Risk for oil demand growth is emerging markets, not China: Pro
Risk for oil demand growth is emerging markets, not China

Oil prices rose back above $70 a barrel on Monday, with U.S. crude posting its best one-day dollar gain in over a month, after four weeks of losses for the benchmark. U.S. West Texas Intermediate crude ended Monday’s session up $1.44, or 2.1 percent, to $70.13 a barrel. While the contract has risen in seven of the last previous 10 sessions, it has not posted a gain of more than $1 a barrel since June 27. As of Friday, WTI was down more than 7 percent over the last four weeks, as heavy losses in a handful of trading sessions wiped out a string of modest daily gains for the benchmark.

The contract to deliver international benchmark Brent crude for September was up 83 cents, or 1.1 percent, at $75.12 a barrel by 2:08 p.m. ET. The September contract expires on Tuesday. Trading was heavier for the October contract, which is up 97 cents, or 1.3 percent, at $75.73. Prices got support after Saudi Arabia announced it would suspend shipments of oil through the critical Bab el-Mandeb Strait, after Houthi rebels in Yemen attacked a pair of oil tankers in the Red Sea. The Saudis have led a military coalition against the Iran-aligned Houthis for more than three years. Risk consultancy the Eurasia Group says the attack on the tankers “represents a serious escalation in dynamics around the Yemen conflict.” “While Houthi rebels probably long possessed the capability to threaten Saudi oil shipments in the Bab-al Mandab Strait, their willingness to use it is the result of rising tensions in the region,” Ayham Kamel, head of Eurasia Group’s Middle East and North Africa practice said in a research note, using an alternative spelling for the strait. “The attack was probably encouraged by the Iranian leadership to demonstrate to the US, Saudi Arabia, and Israel that Iran and its allies retain a capacity to respond to intensifying economic, political, and military pressure.” The United States and Iran have lately engaged in a war of words, with Iranian officials threatening to snarl oil exports in the world’s busiest region for crude shipments. Tension is rising ahead of the first of two deadlines next week for international businesses to wind down ties with Iran under renewed U.S. sanctions. The situation raises concerns that the world will be short of oil. Those concerns have been amplified as Canada’s Suncor Energy works to fully restore operations at its massive Syncrude oil sands facility, where supplies have been disrupted by a power outage earlier this year. The company has scaled back its expectations for production from Syncrude this year, and there are reports the facility might not be fully operational as early as expected. “It’s just this witches’ brew of supportive factors from Iran to the Syncrude,” said John Kilduff, founding partner at energy hedge fund Again Capital. Hedge funds and money managers are getting more constructive on energy commodities. Funds increased their bullish bets in Brent, U.S. gasoline, U.S. heating oil and European gasoil in the latest week, according to a Reuters analysis. Fears that robust demand for oil will cool off have eased following a meeting between President Donald Trump and European Commission President Jean-Claude Juncker that yielded progress in a trade dispute last week.

Cohen Flipping Would Put Trump 1 Witness Away From Catastrophe

Image: Turley: Cohen Flipping Would Put Trump 1 Witness Away From Catastrophe
(Getty Images)

If Michael Cohen, President Donald Trump’s former personal attorney, moves to help special counsel Robert Mueller’s probe, the president would be “one witness away from a potential catastrophe,” said MSNBC legal expert Jonathan Turley. “I think the Cohen development is very serious. He’s one witness away from a potential catastrophe. If any of those five witnesses breaks and supports Michael Cohen, this is going to get real bad, real fast,’ said Turley Monday on MSNBC’s “Morning Joe.” Turley, a George Washington University law professor, was referring to five witnesses who have been granted immunity to testify in the trial of former Trump campaign chairman Paul Manafort.  The professor The Trump Tower meeting would not establish that collusion had occurred, but if Trump knew ahead of time about Donald Trump Jr. and a Kremlin-connected lawyer meeting in Trump Tower in 2016, Trump Jr. would be in “serious jeopardy of a criminal charge.” “If Mueller was to go after Donald Trump Jr., I think we would see a very rapid chain of events and it would not end well for anyone,” Turley said in the interview. “I think that Donald Trump very well could match his past visceral language with similar action. He could start to fire people, and that would have a cascading effect. It would probably take us right to the doorstep of impeachment,” Turley said.

Trump says ready to meet Iran’s Rouhani

Image copyright AFP Image caption President Trump said he “believed in meetings”

US President Donald Trump has offered to meet Iran’s leaders with no preconditions, at any time they want. “They want to meet, I’ll meet. Any time they want,” he said at a White House news conference with Italy’s PM. The US president’s conciliatory approach comes after he and Iranian President Hassan Rouhani traded hostile warnings earlier this month. In May, the US left a deal which curbed Iran’s nuclear activities in return for the lifting of international sanctions. Washington is preparing to re-impose sanctions on Tehran within days – despite objections from the UK, France, China, Russia and Germany, who all signed the 2015 agreement. The US is deeply suspicious of Iranian activity in the Middle East and is an ally of Israel and Saudi Arabia, two of Iran’s foes. “I’d meet with anybody. I believe in meetings,” Mr Trump added, speaking alongside Italy’s Giuseppe Conte. Last week Mr Trump responded angrily to Mr Rouhani, who had earlier warned of the consequences of a conflict with his country. Mr Trump tweeted in capitals that Iran would “suffer consequences the likes of which few throughout history have ever suffered before” if it threatened the US. Mr Rouhani had told Iranian diplomats: “America should know that peace with Iran is the mother of all peace, and war with Iran is the mother of all wars.” His remarks were reported by Iran’s state news agency Irna.

Responding to Mr Trump’s broadside, Iranian Foreign Minister Javad Zarif tweeted: “Color us unimpressed.”

Trump repeatedly denied collusion. Now his lawyer Rudy Giuliani says: ‘Collusion is not a crime’

Rudy Giuliani
Getty Images Rudy Giuliani

President Donald Trump’s attorney, Rudolph Giuliani, asserted Monday that “collusion is not a crime,” and declared that the president is “absolutely innocent.” “I have been sitting here looking in the federal code trying to find collusion as a crime,” Giuliani said in an interview on Fox News Channel’s “Fox & Friends.” “Collusion is not a crime.” Trump has repeatedly denied there was collusion between his campaign and Russia during the 2016 U.S. presidential election. As recently as Sunday, the president took to Twitter to repeat the claim. “There is No Collusion!” Trump wrote, referring to special counsel Robert Mueller’s investigation into Russia’s attack on the election. Giuliani expanded on his remarks in an interview with CNN. “The hacking is the crime,” Giuliani told the network. “The president didn’t hack.” Following the interview on CNN, Giuliani responded to a post on Twitter that suggested the media was “nitpicking and twisting” his comments. Giuliani called the post an “excellent observation.”  “You can investigate an innocent person forever and forever and find nothing. When do we say enough is enough. No collusion, no obstruction. President Trump did nothing wrong,” Giuliani wrote in response. Giuliani addressed reports that Michael Cohen, the president’s former lawyer and fixer, was prepared to tell Mueller that Trump knew about a June 2016 meeting in Trump Tower between the president’s senior campaign staff, including his eldest son Donald Trump Jr. and then-campaign chief Paul Manafort, and a Russian lawyer who was allegedly offering dirt on Democratic presidential candidate Hillary Clinton. “This Russia meeting, I’m happy to tell them, he wasn’t there,” Giuliani said.

Trump's White House has been a money-making machine
 Trump’s White House has been a money-making machine

Before Giuliani’s interviews Monday, the intrigue about the meeting centered on whether the elder Trump knew the meeting was going to happen. The president has previously denied foreknowledge of the gathering. “I did NOT know of the meeting with my son, Don jr. Sounds to me like someone is trying to make up stories in order to get himself out of an unrelated jam,” the president wrote in a post on Twitter on Friday. The special counsel has homed in on the Trump Tower meeting, and has sought to ask Trump about how involved he was in its planning. The meeting figured in a list of questions the special counsel prepared to ask the president. Among the questions, published by The New York Times in April, was an inquiry about when the president first became aware of the June 9 meeting.

Treasury Department data shows Russian holdings of US debt plunged 84% since March

US President Donald Trump and Russia's President Vladimir Putin at the APEC leaders' summit on November 11, 2017.

The Russian government, previously considered a “major” holder of U.S. debt, has been steadily — and sharply — paring down the vast majority of its holdings of U.S. Treasury securities. Russian holdings of Treasury securities declined 84 percent between March and May, falling to $14.9 billion from $96.1 billion in just two months, according to a U.S. Treasury Department report released July 18. Moscow’s ownership of U.S. debt is eclipsed by that of China and Japan, both of whom actively manage their currencies and hold more than $1 trillion each in Treasuries on their books. In fact, China’s vast holdings have been cited by some observers as a “nuclear option” in a Sino-American trade war, with the world’s largest economy seen vulnerable to Chinese selling that could drive up yields. However, Russia’s moves in the market come amid a growing furor over Moscow’s suspected meddling in the U.S. general election in 2016, which has led to sanctions on its economy. Russia’s sell-off of U.S. debt in May also coincided with the benchmark 10-year Treasury note yield, which moves inversely to the note’s price, briefly touching its highest level since 2011. Though the 10-year yield has since retreated from levels above 3 percent, its movements have implications for other financial instruments like mortgages rates and auto loans, which are often based on its rate. The yield on the 10-year Treasury note has subsequently stabilized, trading at 2.958 percent. Bond experts like Raymond James’s Kevin Giddis pointed to a flood of Treasury supply for higher long-term rates back in May. However, most of the excess likely came from historically large Treasury auctions to help pay for Washington’s new tax cuts and spending bill, not Moscow’s selling. “While this liquidation by the Russians is curious, the amount they held, along with the amount they sold, is really insignificant to the multi-trillion dollar Treasury market,” Giddis, head of fixed income capital markets at Raymond James, said on Sunday. “If I had to wager, I would bet that this is part sanctions and part portfolio adjustment and little to do with a real market move,” he added. “If this was China or Japan, then the story would be quite different, and so the muted market movement, or lack thereof, pretty much tells the story of the move.” Major foreign holders of U.S. debt accounted for $6.21 trillion of current U.S. debt, while the total public debt outstanding is $21.3 trillion as of July 26. The United States imposed sanctions in April on Russian businessmen, companies and government officials, a direct jab at associates of Russian President Vladimir Putin in a move designed to punish the country for a variety of infractions, including alleged meddled in the 2016 U.S. election. The move freezes the U.S. assets of “oligarchs” as well as punishes non-American individuals and companies doing business with the sanctioned entities in the same they would Americans. This is a particular potent component of the sanctions, which target aluminium tycoon Oleg Deripaska and lawmaker Suleiman Kerimov, among others. The U.S. Treasury Department did not immediately respond to CNBC’s request for comment.

Fed to send clear message that more rate hikes are coming

The Federal Reserve will issue a statement declaring strong growth and inflation moving to its 2% target, making clear more interest rate hikes are coming. Investors may cheer Q2 earnings, but that isn’t making the outlook for the next quarter any rosier The second-quarter earnings season has largely been positive for the U.S. stock market, some high-profile disappointments aside. But increasingly, investors are looking for confirmation that the first half of the year won’t represent a peak for the cycle..

Mnuchin: Expect 3 Percent Growth for Next 4 Years

Image: Mnuchin: Expect 3 Percent Growth for Next 4 Years
The surge in the U.S. economy in the second quarter shows the U.S. is “well on the path” for four or five years of sustained annual growth of 3 percent, said Treasury Secretary Stephen Mnuchin.“We can only project a couple years in the future, but I think we’re well on this path for several years,” Mnuchin said on “Fox News Sunday.”
The U.S. economy accelerated in the second quarter to the fastest pace since 2014, the government reported on Friday, allowing President Donald Trump to celebrate his economic policies, including the biggest tax overhaul since the Reagan era. Mnuchin also said that Trump respects the independence of the Federal Reserve, despite the president’s recent criticism of the central bank for raising interest rates. In fact, Mnuchin said it was responsible for the Fed to raise rates as the economy grows faster and inflation rises.

Global auto powers plotting response to Trump auto tariff threats

Assembly line for cars, factory
Cesar Manso | AFP | Getty Images

Canada, the European Union, Japan, Mexico and South Korea will meet in Geneva next week to discuss how to respond to threats by U.S. President Donald Trump to impose tariffs on U.S. imports of autos and car parts, officials familiar with the talks said. The Trump administration has come under heavy criticism from automakers, foreign governments and others as it considers tariffs of up to 25 percent, a levy critics warn will hike vehicle costs, hurting auto sales and global industry jobs. Several auto manufacturing powers have been talking to each other in recent days about their fears and a possible coordinated response to Trump’s “Section 232” investigation, which he ordered on May 23, into whether auto imports are a threat to U.S. security, sources say. The probe could be completed within weeks, although similar ones ordered last year that led to tariffs of 25 percent on steel and 10 percent on aluminium took about 10 months. The Commerce Department has 270 days to offer recommendations to the president after such a probe starts. He then has 90 days to act upon them. It was not immediately clear what kind of response the countries could be looking at, although Canada, the EU and Mexico retaliated with their own tariffs after Trump imposed levies on steel and aluminium imports in March. Another option is to fight the United States at the World Trade Organization (WTO). Deputy ministers will gather in Geneva on July 31 to hear each other’s views, a Canadian official and a Mexican official told Reuters, asking to not be named because they were not authorized to talk to the media. “The meeting is meant to bring together major auto producing nations so we can discuss our concerns over the U.S. Department of Commerce’s Section 232 investigation of automobiles and parts,” said the Canadian government official.

Trump: I Would Be Willing to ‘Shut Down’ Government Over Border Security (WALL)

Donald Trump

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President Donald Trump tweeted Sunday that he would be willing to “shut down” the government if he doesn’t get border security legislation that includes funding for the wall, eliminating the visa lottery and ending the practice of catch and release. “I would be willing to ‘shut down’ government if the Democrats do not give us the votes for Border Security, which includes the Wall! Must get rid of Lottery, Catch & Release etc. and finally go to system of Immigration based on MERIT! We need great people coming into our Country!” Trump tweeted.

Trump’s threat to shut down the government comes as Congress works to pass appropriation bills. Congress must pass the bills to keep the government funded by Sept. 30 to prevent a shutdown. If unable to pass appropriation bills, Congress will most likely resort to an omnibus bill, a spending bill that covers multiple budget areas. Before the president tweeted his threat about shutting down the government, he also tweeted about immigration and how Congress needs to fix the “dumbest and worst” immigration laws in the world. “Please understand, there are consequences when people cross our Border illegally, whether they have children or not – and many are just using children for their own sinister purposes. Congress must act on fixing the DUMBEST & WORST immigration laws anywhere in the world! Vote ‘R,'” he said.

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. The policy resulted in the separation of minors from their parents. Due to the backlash, Trump signed an executive order to stop separating parents and children at the U.S. border. The Trump administration is now working to meet a federal judge’s deadline to reunite families. In the past, the president has decried government shutdowns and said they would be “devastating” to the military. “A government shutdown will be devastating to our military…something the Dems care very little about!” Trump tweeted at the beginning of 2018.

Hyperloop test pod sets speed record

 

Image copyright Warr Hyperloop
Image caption Three teams sent pods down the short test track to see how fast they could go

A competition helping to drive development of the futuristic hyperloop transport system has been won by engineering students from Munich. The hyperloop idea involves passengers in pods travelling at very high speeds down sealed tunnels. The team’s pod hit 457km/h (290mph) on a 1.2km (0.75 mile) test track. Run by the SpaceX aerospace company, the competition aims to refine the technologies that could underpin the super-fast transport system. The win is the third in a row for the Technical University of Munich team. The competition saw student teams from universities around the world gather in California to put their prototype pods through their paces. The idea for hyperloop, which would see pods speed through a sealed tunnel to reduce friction or air resistance, has been around for decades and was fleshed out by technology entrepreneur Elon Musk in 2012. He suggested that pods could travel along the system’s tunnels at speeds in excess of 1,000km/h. Critics have voiced concerns about the potential cost of building a large hyperloop and whether its technical demands can be met. Mr Musk’s SpaceX company has run a series of competitions to drive development of the concept. In the latest round of the competition, the Munich team, Warr Hyperloop, outpaced rival capsules, which could manage speeds of only 88mph (Delft University) and 55mph (EPF Loop, from Switzerland), to beat its own record speed, 323km/h, set in the second competition, in September 2017. In a change from earlier competitions, all the pods being tested this time had to be self-propelled. Previously, the pods could rely on a SpaceX-built “pusher” vehicle that helped them travel down the test tube. Elon Musk dropped in on the competition and spent time talking to the teams and watching the test runs. “This is really the first opportunity to create a new mode of transport,” he told The Verge news site. “That’s really what this competition is about – things that could radically transform cities and the way people get around.”

Global Foreign Investment Falls as Tax Cut Brings US Money Home

Image: Global Foreign Investment Falls as Tax Cut Brings US Money Home
(Nicholas Kamm/Getty Images)

President Donald Trump’s tax reform caused a major disruption in global investment flows, with the United States bringing more money home than it sent out in the first quarter for the first time since 2005, an OECD study showed on Friday. The study from the Paris-based Organisation for Economic Co-operation and Development is the first to reveal data on the impact of Trump’s Tax Cuts and Jobs Act on foreign direct investment (FDI) flows, the OECD said.

It found that global foreign direct investment outflows tumbled 44 percent to $136 billion in the first quarter of this year, from $242 billion in the previous quarter.

That was largely due to a switch to negative outward investments from the United States — meaning that American companies brought back more money home than they sent abroad in the quarter.

“The U.S. normally is the largest outward investor in the world. So when it switches to negative that has a big impact on the global flows,” Maria Borga, a statistician at the OECD’s investment division told Reuters.

The Tax Cuts and Jobs Act passed in December was touted as a way to create more jobs, drive U.S. economic growth and level the playing field with companies based outside the United States. It slashed the corporate income tax rate to 21 percent from 35 percent and charges multinationals a one-time tax on profits held overseas.

Outward investment from the United States fell to $-145 billion, registering negative for the first time since the fourth quarter of 2005. The change was due to large repatriations of profits by U.S. parent companies from their foreign affiliates.

“At this point it probably is essentially their financial assets, cash holdings that they’re bringing and it’s probably not going to have an immediate impact in terms of employment or value added at their foreign operations,” the OECD’s Borga said.The long-term impact is more difficult to predict but could be significant and long-lasting, she said.”We don’t really know what’s going to happen in the long term. But this has really shifted a lot of the incentives,” Borga said. “For example the cut in the tax rate might make the U.S. a more attractive destination for foreign investment, so you might see more foreign investment into the U.S.,” she said, adding that other countries might also be tempted to respond. With U.S. foreign investment outflows tumbling, Japan became the world’s top outward investor in the quarter, Borga said.

New York Daily News axes half of its staff

Image copyright Getty Images

The New York Daily News, one of the city’s two tabloid papers, is halving its editorial staff, the latest sign of trouble in the local news business. The cuts will leave the newsroom with about 40 people, according to former employees. They come less than a year after the paper was bought by Tronc, which has a reputation for low newsroom investment. The New York Daily News started in 1919 and has won 11 Pulitzer Prizes, one of them last year. Tronc faced backlash from staff at the Los Angeles Times, who formed a union and cast a spotlight on the cuts at Tronc-owned publications, despite high compensation going to top executives and other insiders. Last year, Tronc said it was paying Merrick Ventures, a private equity firm led by Tronc’s biggest shareholder, $5m (£3.8m) a year for “management expertise and technical services”. The newspaper company, which also owns the Chicago Tribune and Baltimore Sun, subsequently sold the Los Angeles Times. Tronc bought the New York Daily News, which favours the punchy headlines common in British tabloids, for $1 last year. A memo on Monday to New York Daily News staff said the smaller newsroom would in future focus on breaking news, “especially in areas of crime, civil justice and public responsibility”. Top editors at the paper have lost their jobs as part of the cuts, including editor-in-chief Jim Rich and managing editor Kristen Lee.

UK lawmakers recommend tougher rules on Facebook

FILE – This March 29, 2018 file photo shows the Facebook logo on screens at the Nasdaq

MarketSite in New York’s Times Square. Facebook plummeted 19 percent Thursday, July 26, 2018, after warning of slower growth ahead, erasing more than $100 billion in value. (AP Photo/Richard Drew, File)

LONDON (AP) — The U.K. government should increase oversight of social media like Facebook and election campaigns to protect democracy in the digital age, a parliamentary committee has recommended in a scathing report on fake news, data misuse and interference by Russia. The interim report by the House of Commons’ media committee to be released Sunday said democracy is facing a crisis because the combination of data analysis and social media allows campaigns to target voters with messages of hate without their consent. Tech giants like Facebook, which operate in a largely unregulated environment, are complicit because they haven’t done enough to protect personal information and remove harmful content, the committee said. “The light of transparency must be allowed to shine on their operations and they must be made responsible, and liable, for the way in which harmful and misleading content is shared on their sites,” committee Chairman Damian Collins said in a statement. The study was due to be published Sunday, but a copy was leaked on Friday by Dominic Cummings, the director of the official campaign group backing Britain’s departure from the European Union. Social media companies are under scrutiny worldwide following allegations that political consultant Cambridge Analytica used data from tens of millions of Facebook accounts to profile voters and help U.S. President Donald Trump’s 2016 election campaign. The committee is also investigating the impact of fake news distributed via social media sites. Collins ripped Facebook for allowing Russian agencies to use its platform to spread disinformation and influence elections. “I believe what we have discovered so far is the tip of the iceberg,” he said, adding that more work needs to be done to expose how fake accounts target people during elections. “The ever-increasing sophistication of these campaigns, which will soon be helped by developments in augmented reality technology, make this an urgent necessity.”

The committee recommended that the British government increase the power of the Information Commissioner’s Office to regulate social media sites, update electoral laws to reflect modern campaign techniques, and increase the transparency of political advertising on social media.

Prime Minister Theresa May has pledged to address the issue in a so-called White Paper to be released in the fall. She signaled her unease last year, accusing Russia of meddling in elections and planting fake news to sow discord in the West. The committee began its work in January 2017, interviewing 61 witnesses during 20 hearings that took on an investigatory tone not normally found in such forums in the House of Commons. The report criticized Facebook chief Mark Zuckerberg for failing to appear before the panel and said his stand-ins were “unwilling or unable to give full answers to the committee’s questions.” One of the committee’s recommendations is that the era of light-touch regulation for social media must come to an end. Social media companies can no longer avoid oversight by describing themselves as platforms, because they use technology to filter and shape the information users see. Nor are they publishers, since that model traditionally commissions and pays for content. “We recommend that a new category of tech company is formulated, which tightens tech companies’ liabilities, and which is not necessarily either a ‘platform’ or a ‘publisher,” the report said. “We anticipate that the government will put forward these proposals in its White Paper later this year.” The committee also said that the Information Commissioner’s Office needs more money so it can hire technical experts to be the “sheriff in the Wild West of the internet.” The funds would come from a levy on the tech companies, much in the same way as the banks pay for the upkeep of the Financial Conduct Authority. “Our democracy is at risk, and now is the time to act, to protect our shared values and the integrity of our democratic institutions,” the committee said.

US to give farmers $12bn trade war bailout

Media caption The trade war between the US and China is escalating

The Trump administration has unveiled a $12bn (£9.1bn) plan aimed at helping US farmers hurt by the intensifying trade war. The aid is intended to protect the industry as countries raise taxes on US products such as soybeans in response to the president’s new tariffs. The US plans to provide subsidies to farmers and buy unsold crops, among other measures. Tariffs have irked farmers, a crucial voting bloc for President Donald Trump. Mr Trump has said his tariffs – which he described on Tuesday in a tweet as “the greatest” – are intended to pressure countries to change their policies toward US exports. In a speech on Tuesday, he said farmers would be the “biggest beneficiary” of the disputes after countries strike new trade deals. But the agriculture industry, which draws about 20% of its income from exports, said the president’s approach is hurting demand for its goods and causing long term damage to relationships with buyers. Prices for soybeans have already fallen by more than 15% since April, when China – a major buyer of the crop – announced its plans to retaliate. “Farmers need stable markets to plan for the future,” said Brian Kuehl, executive director of the industry group Farmers for Free Trade, which represents pork producers, corn growers and others. “As such, we urge the administration to take immediate action to stop the trade war and get back to opening new markets.” The US Agriculture Department said it expects losses of about $11bn as a result of the trade disputes. Much of the $12bn in emergency relief, which does not need congressional approval, will go towards direct payments to farmers of commodities such as soybeans, sorghum, and wheat, officials said. The US also plans to buy crops such as fruits and nuts, distributing them to food banks and other government nutrition programmes. Some of the money will also go to boosting export efforts. The first assistance is expected to be distributed by the beginning of September. The programme, which will be deployed using powers created during the Great Depression, is not intended to extend beyond this year, officials said. “This is a short-term solution that will give President Trump and his administration time to work on long-term trade deals that benefit agriculture and all sectors of the economy,” US Agriculture Secretary Sonny Perdue said. Some Republicans and even Democrats backed the aid package. But industry groups that represent agriculture, as well as politicians from agricultural states, criticised the relief as a short-term solution to a self-inflicted problem. “Time and time again I’ve heard from farmers that they want trade, not aid,” said Senator Ron Johnson, a Republican from Wisconsin. “Instead of throwing money at a problem we’ve helped create, the better option is to take action to make it easier for our farmers – and manufacturers – to sell their goods at fair prices to consumers around the world.” Senator Rand Paul, a Kentucky Republican, tweeted on Tuesday: “If tariffs punish farmers, the answer is not welfare for farmers. The answer is remove the tariffs.” Senator Ben Sasse, a Nebraska Republican, said in a statement: “This trade war is cutting the legs out from under farmers and White House’s ‘plan’ is to spend $12 billion on gold crutches.

Facebook: Explaining the company’s massive share slump

Image copyright Getty Images Image caption Other tech companies shares fell as Facebook stock plummeted
 

It was one of the biggest one-day losses in US corporate history.At the start of the day, Facebook was valued at $630bn (£481bn). By the end, it had dropped to $510bn (£389bn). Company founder Mark Zuckerberg personally lost more than $15bn (£11.5bn) in one day, seeing him fall from fourth to sixth on Forbes’ list of global billionaires. The drop came after the social media giant published its second quarter results. Although still positive, they came in below investor expectations – and company shares had plummeted nearly 20% by the end of the day. So why the weaker numbers? Why did markets react so badly? And what does this mean for Facebook? The firm announced that its user growth rose at its slowest rate in two years. It also warned that billions in spending, planned to improve privacy and track advertisers, would outweigh revenue gains. Those revenue gains had themselves been limited by a fall in user numbers in Europe and people making use of new options to limit advertising. Facebook attributed their results to a new advertising format and giving users more control over privacy. But the elephant in the room was the swirl of scandals surrounding the company. The biggest involved Facebook sharing the data of 87 million users to a researcher at Cambridge Analytica, a political consulting firm Craig Erlam, senior market analyst at Oanda, said these scandals have had a “negative impact” for the firm. “Trust is so important with consumer trends,” Mr Erlam told the BBC, “and people may feel that Facebook betrayed their trust.” Facebook has been the dominant social media giant for years, and remains vastly popular. In its results, the company said it had more than 2.2 billion monthly active users at the end of June. But their latest data does suggest user number growth is slowing. A study from the US-based Pew Research Center suggests young people are ditching Facebook for Snapchat, Instagram and YouTube, with 85% of teens preferring the video platform to Facebook. The company’s market value dropped around $120bn in one day. To put that in context, McDonald’s is valued at $122bn on the New York Stock Exchange, with US industrial giant General Electric valued at $114bn.

Trump ‘open’ to Moscow visit after Putin extends invite

Image copyright Reuters Image caption Mr Trump has called the Helsinki summit a success and was the first to invite Mr Putin to the US

US President Donald Trump is “open” to travelling to Moscow after a surprise invite from Russian President Vladimir Putin, the White House has said. Mr Putin said on Friday he is ready to travel to the US under the right conditions and has invited Mr Trump to Moscow for a second meeting. The pair met last week for closed-door talks in Helsinki. The invite comes two days after the White House said it would postpone Mr Putin’s autumn visit until next year. “President Trump looks forward to having President Putin to Washington after the first of the year, and he is open to visiting Moscow upon receiving a formal invitation,” Mrs Sanders said in a statement on Friday. Her statement was in response to Mr Putin, who earlier had said at a news conference in South Africa that he was “ready” for a follow-up meeting with President Trump. “We are ready for such meetings. We are ready to invite President Trump to Moscow. Be my guest. He has such an invitation, I told him that,” Mr Putin said while speaking at the Brazil, Russia, India and China (BRIC) economic summit in Johannesburg, South Africa. “I understand perfectly that President Trump has a desire to hold further meetings, and I am ready to come to Washington if appropriate conditions for work are created.” Mr Putin did not detail what “conditions” would have to be met. He went on to praise Mr Trump, saying he “strives to fulfil the promises, above all, given to voters”. Both leaders have called the Helsinki meeting successful, and Mr Putin rounded on US summit critics earlier this month for wanting to sacrifice the US-Russia relationship over “narrow party interests”. Mr Trump drew ire at the meeting when he contradicted US intelligence agencies by backing away from blaming Russia for meddling in the 2016 election. He later said he had misspoken at the summit.

The Latest: Twitter’s stock plunges on weak user numbers

FILE – In this Feb. 8, 2018 file photo, the logo for Twitter is displayed above a trading post on the floor of the New York Stock Exchange

. Twitter Inc., on Friday, July 27 reported second-quarter net income of $100.1 million, after reporting a loss in the same period a year earlier. On a per-share basis, the San Francisco-based company said it had net income of 13 cents. Earnings, adjusted for one-time gains and costs, were 17 cents per share.

NEW YORK (AP) — The Latest on Twitter Inc.’s quarterly earnings report. (all times local): Twitter’s stock plunged 20.5 percent after the company said monthly users decreased in the second quarter. The social media company also predicted further declines in the next few months. It was the second-biggest loss for Twitter’s stock since the company went public in 2013. In percentage terms, the decline was slightly worse than Facebook’s plunge the day before, but Facebook is a far more valuable company. Twitter and Facebook are trying to reduce the amount of abuse and hate speech on their platforms, but that’s affecting their growth, one of the things investors value the most. Twitter has doubled in value over the past year as it became profitable for the first time and investors applauded its live video efforts. Twitter is nosediving after it said monthly users declined in the second quarter and could fall further over the next few months. The stock is down 19.1 percent in heavy trading Friday afternoon, mirroring a 19 percent plunge in Facebook Thursday. Twitter and Facebook are trying to reduce the amount of abuse and hate speech on their platforms, but that’s affecting their growth, one of the things investors value the most. Twitter has doubled in value over the past year as it became profitable for the first time and investors applauded its live video efforts. Other big technology companies also sank Friday. Intel dropped 8.5 percent and Microsoft gave up 2.8 percent. The tech-heavy Nasdaq composite is headed for its worst loss in a month. Twitter, like other social media companies, says it’s prioritizing its platform over user growth, getting rid of abusive account. That has left investors seemingly unable to value what the biggest companies in the sector, which rely on their potential user reach, are worth.

Can big-spending US consumers and businesses sustain growth?

President Donald Trump delivers remarks on the economy from the South Lawn of the White House, Friday, July 27, 2018, in Washington. (AP Photo/Jacquelyn Martin)

WASHINGTON (AP) — Americans spent with abandon this spring. Businesses invested in more buildings and equipment. And exports jumped. Combined, those factors drove economic growth in the April-June quarter to a 4.1 percent annual rate, the fastest pace in nearly four years. A key question facing the economy is: Can its growth continue at such a pace? Probably not. Some of the drivers of growth last quarter appeared to be one-time factors. Soybean exports jumped as farmers sought to beat impending tariffs overseas. And business spending was boosted by soaring investment in oil and gas drilling equipment, which might not last. Other challenges also loom. Borrowing costs for homes, autos and credit cards are rising, lifted by the Federal Reserve’s interest rate hikes. And rising prices have left average hourly pay, once adjusted for inflation, flat over the past 12 months. But other trends do look sustainable and could help boost growth above the roughly 2 percent annual pace that’s prevailed since the Great Recession ended. Revisions to government data show that consumers have been saving more than previously thought, giving them more room to spend. And with business and consumer demand strong, companies may rebuild their stockpiles of goods in warehouses and store shelves, adding to growth in the coming quarters. That optimistic picture, though, hinges in part on whether the trade conflicts the Trump administration has pursued with major trading partners end up weakening the economy. Here’s a deeper look at economic trends and where they may be heading: But the government also sharply revised up its estimate of the U.S. savings rate. In the first three months of the year, government data now shows that Americans saved 7.2 percent of their income, much higher than the previous estimate of just 3.3 percent. That means consumers are in better financial shape than previously thought and suggests that healthy spending could continue. U.S. exports jumped in the second quarter, while imports barely increased. That narrowed the trade gap and meant that international trade contributed about one-quarter of the second quarter’s growth. President Donald Trump hailed the increase in remarks Friday at the White House and credited his trade policies. His policies did help, but in a way that’s unlikely to be repeated: Farmers sped up their exports of soybeans to China, ahead of that country’s imposition of tariffs that it imposed in retaliation for U.S. tariffs imposed by Trump. As a result, soybean exports jumped 90 percent in May. Sharply higher agricultural exports made up nearly half the overall increase in overseas sales in the second quarter. That’s unlikely to be repeated. Most economists forecast that trade will drag on growth in the second half of this year. Companies spent more on computers, software, and oil and gas drilling equipment, accelerating overall investment at a 7.3 percent annual rate. The Trump administration’s tax-cut package cut the corporate tax rate from 35 percent to 21 percent. It also allowed companies to write off the entire cost of an investment from their taxes, which might have helped boost business spending last quarter. But most of the increase in investment reflected a jump in spending on oil and gas drilling rigs and related equipment. Oil companies have expanded their exploration as oil prices have jumped roughly 50 percent in the past year. It’s considered unlikely that oil and gas drillers will keep expanding at the same pace. The federal government increased its spending at a 3.5 percent annual rate in the second quarter, the second-best showing in nearly four years. For much of the nine-year economic expansion, federal, state and local governments haven’t contributed much to the economy. Lawmakers have limited spending in the face of high deficits or dwindling tax revenue.

Sell long-in-the-tooth FAANGs,

FB.O

LONDON (Reuters) – Investors poured $600 million in to U.S. technology stocks in the week leading up to poor results from Facebook (FB.O), according to Bank of America Merrill Lynch (BAML) analysts, urging clients to sell the sector on signs inflows have reached bubble territory. Facebook’s shares plunged 19 percent on Thursday – leading to the biggest one-day wipeout in value terms in U.S. stock market history – after the company said it faced a multi-year squeeze on its business margins. But flow data covering the week to 25 July showed little drop in demand as investors continued to hunt for returns after a decade of quantitative easing, BAML said. Funds investing in technology have pulled in $36 billion this year, the data showed, by far the largest on record. Facebook’s shock results were a “classic late-cycle event,” analysts at the bank wrote, calling investors’ preference for FAANG stocks – the quintet of Facebook, Amazon (AMZN.O), Apple (AAPL.O), Netflix (NFLX.O) and Google (GOOGL.O) – “the most crowded QE trade in the world”. In contrast, the Chinese government’s increasing wariness over a trade war with the U.S. provided an ideal entry point into emerging markets, particularly the BRIC nations of Brazil, Russia, India and China, BAML said. In the last three months China has cut its Reserve Requirement Ratios twice, devalued the yuan CNY= by 7 percent, as well as widespread tax cuts and local bond issuance – all possible signs it is worried about global trade. “Markets stop panicking when policy makers panic,” analysts at BAML said, saying long BRICs against short FAANGs was a good trade for the third quarter. The bank also recommended clients buy gold XAU= and products hedging against a rise in volatility .VIX, in preparation for a potentially difficult end to the year for investors.

Cohen claims Trump knew in advance of 2016 Trump Tower meeting

(CNN)Michael Cohen, President Donald Trump’s former personal attorney, claims that then-candidate Trump knew in advance about the June 2016 meeting in Trump Tower in which Russians were expected to offer his campaign dirt on Hillary Clinton, sources with knowledge tell CNN. Cohen is willing to make that assertion to special counsel Robert Mueller, the sources said. Cohen’s claim would contradict repeated denials by Trump, Donald Trump Jr., their lawyers and other administration officials who have said that the President knew nothing about the Trump Tower meeting until he was approached about it by The New York Times in July 2017. Cohen alleges that he was present, along with several others, when Trump was informed of the Russians’ offer by Trump Jr. By Cohen’s account, Trump approved going ahead with the meeting with the Russians, according to sources. To be clear, these sources said Cohen does not have evidence, such as audio recordings, to corroborate his claim, but he is willing to attest to his account. Cohen privately testified last year to two Congressional committees investigating Russian interference in the 2016 election. A source familiar with Cohen’s House testimony said he did not testify that Trump had advance knowledge. Cohen’s claims weren’t mentioned in separate reports issued by Republicans and Democrats on the House Intelligence Committee. Contacted by CNN, one of Cohen’s attorneys, Lanny Davis, declined to comment. “He’s been lying all week, he’s been lying for years,” said Rudy Giuliani, the President’s attorney, to Chris Cuomo on CNN’s “Cuomo Prime Time” on Thursday night. He added, “I don’t see how he’s got any credibility.” Giuliani also said Cohen is “the kind of witness that can really destroy your whole case” and called Cohen, who was a top Trump Organization attorney for a decade, a “pathological liar.” “Donald Trump Jr. has been professional and responsible throughout the Mueller and Congressional investigations,” said Alan Futerfas, an attorney for Donald Trump Jr. “We are very confident of the accuracy and reliability of the information that has been provided by Mr. Trump, Jr., and on his behalf.” According to people who have discussed the matter with Cohen, he has expressed hope that this claim about the Trump Tower meeting will help him reach out to Mueller and possibly lessen his legal troubles. He’s under scrutiny by federal prosecutors in Manhattan after Mueller referred Cohen’s case to them. The June 2016 meeting was arranged after a publicist who knew Trump Jr. told him in emails — in no uncertain terms — that a senior Russian official “offered to provide the Trump campaign” with damaging information about Clinton, and that the outreach was “part of Russia and its government’s support for Mr. Trump.” At the time, the Russian operation to covertly boost Trump’s candidacy wasn’t publicly known. Trump. Jr. responded, “if it’s what you say, I love it,” and started to arrange the meeting. At the meeting, Trump Jr. was joined by his brother-in-law Jared Kushner and Paul Manafort, who was Trump’s campaign chairman at the time. There were four Russians in the room, including a lawyer with Kremlin ties, a businessman who worked for an oligarch and a lobbyist with old KGB connections. After news of the meeting broke in July 2017, the Trump team offered misleading explanations and changed their story several times. But one claim stayed consistent: that Trump had no knowledge of the meeting beforehand, wasn’t told about it afterward and first learned about it one year later. Those denials were repeatedly issued by Trump, his attorney Jay Sekulow, Trump Jr., Futerfas and White House press secretary Sarah Sanders. Those people denied that Trump had contemporaneous knowledge of the meeting on more than 15 occasions, according to CNN’s analysis. Trump said on July 12, 2017, that he “only heard about it two or three days ago.” One week later, Trump repeated that he “didn’t know anything about the meeting” because “nobody told me” about it. Around that same time, CNN’s Jake Tapper asked Sekulow to confirm Trump’s claims that he only recently learned about the controversial meeting. Sekulow’s response: “Yes, I swear.” But perhaps the highest-stakes denial was given by Trump Jr. in his testimony last year to the Senate Judiciary Committee. “He wasn’t aware of it,” Trump Jr. told lawmakers, referring to his father’s knowledge of the meeting. “And, frankly, by the time anyone was aware of it, which was summer of this year, as I stated earlier, I wouldn’t have wanted to get him involved in it because it had nothing to do with him.” Trump’s critics have long doubted these denials. They point to a series of phone calls Trump Jr. made to a blocked phone number before and after the meeting. They also note that two days before the meeting, Trump mysteriously announced plans to give a “major speech” about Clinton’s scandals. Trump Jr. says he didn’t get any dirt at the meeting — and the speech never happened. Even Steve Bannon, the former White House chief strategist and top Trump campaign official, said the meeting was “treasonous” and speculated that “the chance that Don Jr. did not walk these (Russians) up to his father’s office on the twenty-sixth floor is zero.” Trump Jr. has denied Bannon’s allegation. Bannon’s comments, to author Michael Wolff for his book “Fire and Fury,” triggered the bitter public divorce between Bannon and Trump in early 2018. Axios reported that Bannon does not have first-hand knowledge about whether Trump Jr. told his father, and Bannon later said his “treasonous” remark was directed at Manafort and not Trump Jr.

Federal prosecutors subpoena top Trump Organization official in connection to Cohen probe

Allen Weisselberg, the man at the financial center of Trump’s businesses, presents a new problem for the president.
Allen Weisselberg, a top Trump Organization official, was subpoenaed this week by federal prosecutors working on the Cohen probe. (PHOTO CREDIT: Michael Brochstein/SOPA Images/LightRocket via Getty Images)
Allen Weisselberg, a top Trump Organization official, was subpoenaed this week by federal prosecutors working on the Cohen probe. (PHOTO CREDIT: Michael Brochstein/SOPA Images/LightRocket via Getty Images)

Allen Weisselberg, the man at the financial center of President Trump’s sprawling business operation for the past several decades, has been subpoenaed as a witness in the federal criminal probe into longtime Trump associate Michael Cohen, the Wall Street Journal reported Thursday. According to the Journal, the exact date of the subpoena is currently unknown, so it’s possible Weisselberg may have already testified. News of the subpoena comes days after a secret audio recording of Cohen speaking with Trump was leaked to the press. In the recording, the two men are overheard discussing a payment to American Media Inc. (AMI), which had purchased former Playboy model Karen McDougal’s story of an alleged affair she had with Trump years earlier, shortly before the 2016 election. The company — whose CEO, David Pecker, is friends with Trump — never ran the story, allegedly employing a practice known as “catch and kill,” to ensure McDougal never took her story public. Cohen can be heard in the recording saying he had talked to Weisselberg about the logistics of purchasing McDougal’s story from AMI. “I’ve spoken to Allen Weisselberg about how to set the whole thing up with…funding,” Cohen says, adding that he and Weisselberg had discussed what happens “when it comes time for the financing. Weisselberg also reportedly arranged the $130,000 payment to adult film actress Stormy Daniels, who also claims to have had an affair with Trump, in the weeks leading up to the election. Weisselberg has said he didn’t know the payments, which were routed through Cohen and meant to act as hush money, were meant for Daniels. It’s unclear if prosecutors are interested in that payment or in something more fundamental to Trump’s business or charity, which Weisselberg also spearheaded. Weisselberg serves as the Trump Organization’s Chief Financial Officer and Executive Vice President, having joined the company after he graduated college in the 1970s. He mostly keeps a low profile: his name does not appear on the Trump Organization’s website, and he has been described as Trump’s “closest business confidant,” and a Trump aide who “fits in with the wallpaper.” Since Trump’s inauguration, Weisselberg — along with the president’s sons, Donald Jr. and Eric — has been responsible for any company decisions, supposedly without any involvement on the part of the president. He was named a trustee of the neither blind nor independent Donald J. Trump Revocable Trust, which holds the president’s assets (and from which the president can withdraw money whenever he wishes). Bloomberg reported that Weisselberg also became deeply involved in Trump’s personal finances over the years; among other things, he “paid household bills, made large purchases for Trump, and has communicated with Trump’s outside investment advisers.” Weisselberg was also the treasurer of the now-defunct Donald J. Trump Foundation. The charity is being sued by the state of New York for “extensive and persistent violations of state and federal law,” including allegedly using charity funds to support Trump’s presidential campaign. Weisselberg’s name notably showed up in an email Trump campaign manager Corey Lewandowski sent before the Iowa caucuses asking, “Is there any way we can make some disbursements this week while in Iowa? Specifically on Saturday.” Weisselberg has not been charged with anything, but his involvement with the investigation could open up new avenues for investigators. The probe is being conducted by prosecutors in the Southern District of New York, following a raid on Cohen’s office and residences earlier this year. During that raid, investigators seized scores of documents and papers related to Cohen’s work for the president, including the aforementioned audio recording, which he took without Trump’s knowledge. The raid itself was instigated following a referral from Special Counsel Robert Mueller, who is currently investigating Russian interference in the 2016 election and possible obstruction by Trump and his associates. That could spell trouble for the president: even if Trump interferes with the Mueller probe or attempts to have it shut down, the Cohen investigation would proceed, leaving Trump exposed.

“Alan knows everything and anything about all the financials…He knows every dollar that goes in and every dollar that leaves,” a former Trump Organization employee told Washington Post White House bureau chief Philip Rucker on Thursday. “He knows where all the bodies are buried.”

Mueller examining Trump’s tweets in wide-ranging obstruction inquiry

WASHINGTON — For years, President Donald Trump has used Twitter as his go-to public relations weapon, mounting a barrage of attacks on celebrities and then political rivals even after advisers warned he could be creating legal problems for himself. Those concerns now turn out to be well founded. The special counsel, Robert Mueller, is scrutinizing tweets and negative statements from the president about Attorney General Jeff Sessions and former FBI director James Comey, according to three people briefed on the matter. Several of the remarks came as Trump was also privately pressuring the men — both key witnesses in the inquiry — about the investigation, and Mueller is examining whether the actions add up to attempts to obstruct the investigation by both intimidating witnesses and pressuring senior law enforcement officials to tamp down the inquiry. Mueller wants to question the president about the tweets. His interest in them is the latest addition to a range of presidential actions he is investigating as a possible obstruction case: private interactions with Comey, Sessions and other senior administration officials about the Russia inquiry; misleading White House statements; public attacks; and possible pardon offers to potential witnesses. None of what Mueller has homed in on constitutes obstruction, Trump’s lawyers said. They argued that most of the presidential acts under scrutiny, including the firing of Comey, fall under Trump’s authority as the head of the executive branch and insisted that he should not even have to answer Mueller’s questions about obstruction. But privately, some of the lawyers have expressed concern that Mueller will stitch together several episodes, encounters and pieces of evidence, like the tweets, to build a case that the president embarked on a broad effort to interfere with the investigation. Prosecutors who lack one slam-dunk piece of evidence in obstruction cases often search for a larger pattern of behavior, legal experts said. The special counsel’s investigators have told Trump’s lawyers they are examining the tweets under a wide-ranging obstruction-of-justice law beefed up after the Enron accounting scandal, according to the three people. The investigators did not explicitly say they were examining possible witness tampering, but the nature of the questions they want to ask the president, and the fact that they are scrutinizing his actions under a section of the United States Code titled “Tampering With a Witness, Victim, or an Informant,” raised concerns for his lawyers about Trump’s exposure in the investigation. A spokesman for Mueller’s office declined to comment. Trump’s lead lawyer in the case, Rudy Giuliani, dismissed Mueller’s interest in the tweets as part of a desperate quest to sink the president. “If you’re going to obstruct justice, you do it quietly and secretly, not in public,” Giuliani said. Giuliani was referring to more typical obstruction cases, where prosecutors focus on measures taken in private, like bribing witnesses, destroying evidence or lying under oath. While some of Trump’s private acts are under scrutiny, like asking Comey for loyalty, his public conduct is as well. That sets this investigation apart, even from those of other presidents; Richard M. Nixon and Bill Clinton were accused of privately trying to influence witness testimony. But as in those cases, federal investigators are seeking to determine whether Trump was trying to use his power to punish anyone who did not go along with his attempts to curtail the investigation. If Mueller opts to tailor a narrative that the president tried to obstruct the Russia investigation, he would have to clear several hurdles to make a strong case. He would need credible witnesses (Comey and Sessions have been the target of concerted attacks by Trump and allies, undercutting their standing) and evidence that Trump had criminal intent (the special counsel has told the president’s lawyers he needs to question him to determine this).

New-home sales slump in June as housing headwinds increase

Higher mortgage rates, increasing home prices, and slim pickings – are more Americans deciding just to rent?

Bloomberg News/Landov Framers work on walls on a new home under construction in Lancaster, Ohio.

New-home sales were at a 631,000 annual pace in June, the Commerce Department said Wednesday.

Sales of newly-constructed homes tumbled 5.3% below a downwardly-revised May figure, and stood just 2.4% higher than a year ago. The median price of new homes sold during the month was $302,100, 4.2% lower than in June 2017. The government’s home-construction reports are based on small samples and are often revised heavily, making it hard to rely on any one month’s data. Revisions to prior months’ reports took sales figures for 2018 down a net 27,000 homes. For the year to date, sales are 6.9% higher than in the same period in 2017, but many housing analysts suspect there’s little momentum left in the market. At the current pace of sales, it would take 5.7 months to exhaust available supply, the most since last summer. Traditionally, six months was the sign of a balanced market, but sales have been running much leaner than that since the housing crisis. Most housing industry participants want to see a stronger pace of construction so that builders can catch up to years of pent-up demand for housing, especially as inventory of previously-owned homes remains at long-time lows. Existing-home sales slide for third-straight month in June, touch 5-month low as housing sputters

Soybean growers’ leader: I may not support Trump again in 2020

The president of the Minnesota Soybean Growers Association said Wednesday that he may not vote for President Trump in 2020 if he doesn’t fix current trade disputes.  “It’s not about the man or the party,” Michael Petefish said on CNN’s “CNN Newsroom.” “It’s about specific policies. We in agriculture are very supportive of trade, and this president has not been.” Asked by CNN host Poppy Harlow what that means in regards to the 2020 presidential election, Petefish said “the jury’s still out on that.” “Timing is critical on this trade deal,” he added. “If, in three or five years we have a better trade agreement, that won’t matter to most farmers because we’re hurting financially now and we won’t have the ability to run our businesses in the red for the next several years. “The trade needs to get fixed now.”  The comments from Petefish come as the U.S. is involved in trade disputes with countries such as China and the European Union. Many agricultural groups have called on Trump to stop imposing tariffs because their products, such as pork and soybeans, are being targeted for retaliation by top U.S. trading partners. The Trump administration announced on Tuesday that it would offer about $12 billion in emergency relief to U.S. farmers, who have been hit hardest by the administration’s protracted trade battle. But Petefish said that “$12 billion damage is just sort of scratching the surface of the economic impact.” Petefish added that an argument could be made that the trade war has caused $12 billion worth of damage to soybean farmers alone.  “What’s concerning is the future” Petefish said. “Are we going to keep pumping $12 billion into the farming economy? What we need is markets.” Multiple GOP lawmakers have echoed Petefish’s concerns. Sen. Ben Sasse (R-Neb.), for example, said on Tuesday that “America’s farmers don’t want to be paid to lose — they want to win by feeding the world.

Donald Trump Says U.S. and EU Will ‘Resolve’ Steel, Aluminum Tariffs

President declares ‘new phase’ in U.S.-EU relations

President Donald Trump met with European Commission President Jean-Claude Juncker in the Oval Office of the White House on Wednesday.
President Donald Trump met with European Commission President Jean-Claude Juncker in the Oval Office of the White House on Wednesday. Photo: Evan Vucci/Associated Press

Breaking News…

President Trump on Wednesday declared a “new phase” in the relationship between the U.S. and the European Union, agreeing to hold off on proposed car tariffs and work with the EU to resolve their dispute over metals duties, while also promoting bilateral trade. Speaking in the Rose Garden of the White House alongside European Commission President Jean-Claude Juncker, Mr. Trump said the U.S. and the EU had agreed to “work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non auto-industrial goods.” “This was a very big day for free and fair trade,” Mr. Trump said. He said the U.S. and EU would “resolve” the steel and aluminum tariffs he imposed earlier this year and the retaliatory tariffs the EU imposed in response. He said the EU had agreed “almost immediately” begin buying more U.S. soybeans and that the European bloc had agreed to increase LNG exports from the U.S. The EU will be a “massive buyer” of LNG, Mr. Trump said. “I had the intention to make a deal today,” said Mr. Juncker. “And we made a deal today. “ Mr. Trump also said the U.S. and EU would work “closely together” to reform the World Trade Organization and would launch an “executive working group” to implement their joint agenda.

Exclusive: White House stops announcing calls with foreign leaders

Trump had heated exchange with Australian PM, talked 'tough hombres' with Mexican leader
Trump had heated exchange with Australian PM, talked ‘tough hombres’ with Mexican leader

Washington (CNN)The White House has suspended the practice of publishing public summaries of President Donald Trump’s phone calls with world leaders, two sources with knowledge of the situation tell CNN, bringing an end to a common exercise from Republican and Democratic administrations.  It’s unclear if the suspension is temporary or permanent. A White House spokesman declined to comment. Official descriptions of the President’s calls with foreign leaders — termed “readouts” in Washington parlance — offer administrations the chance to characterize in their own terms the diplomacy conducted at the highest levels between countries. While news is rarely contained in the rote, often dry descriptions, they do offer the only official account that a phone call took place. Readouts are still released internally. Trump has had at least two calls with other leaders in the last two weeks, including Turkish President Recep Tayyip Erdogan and Israeli Prime Minister Benjamin Netanyahu. The White House confirmed that the calls took place after they were reported by foreign media, but declined to elaborate on what was said. The White House has not published a readout of a call between Trump and a world leader since mid-June when he called to congratulate the Hungarian prime minister on his re-election victory. “The two leaders further pledged to keep United States-Hungary relations strong,” the readout at the time noted. Michael Allen, who was a member of the National Security Council during the George W. Bush administration, said that by halting the practice of issuing readouts, the White House loses “the action forcing event of an announced phone call.””I think they lose the public diplomacy aspect of a presidential phone call,” Allen added. Calls with world leaders are highly coordinated events that in the past have required careful planning by the President’s national security team. Leaders are typically patched through the Situation Room, and sometimes aides listen in. Once the call is over, both sides typically publish a readout of what was discussed. However, readouts have been known to differ between governments. Trump has been known to make calls to foreign leaders from the residence of the White House during what has been dubbed by aides as “executive time.” Before he was fired this spring, former national security adviser H.R. McMaster often joined Trump in residence for his calls. His successor John Bolton is regularly present during his calls with leaders, a White House official tells CNN. The decision to halt the readouts come amid questions about what was said during Trump’s one-on-one with Russian President Vladimir Putin in Helsinki, Finland. Trump was incensed last August when The Washington Post published transcripts of his tense phone calls with the leaders of Australia and Mexico. He railed about the leak to aides for weeks, insisting that fewer people be in the room during the calls going forward.

China cuts taxes to protect its economy from the trade war

China is looking for new ways to pump up its slowing economy as a trade war with the United States escalates.
china shipping container port april
A truck moves a shipping container at Lianyungang Port on April 5 in Lianyungang, China.

Beijing has announced a range of measures including tax cuts, infrastructure spending and new loans to business as its tries to reinvigorate economic growth, which has begun to slow in recent months. The tax cuts for business are relatively small — worth about $10 billion — but they come on top of much bigger injections of funds into the banking system in recent weeks aimed at boosting activity. The Chinese government said in a statement late Monday that the new stimulus was intended to help the country cope with “an uncertain external environment.” China has accused the United States of starting a trade war by imposing tariffs on billions of dollars of its exports. It has responded with tariffs of its own on American products, drawing threats from President Donald Trump of much bigger retaliation to come. The world’s second-biggest economy grew by 6.7% in the quarter ended June 30, its slowest rate of growth in almost two years. While China should still meet its 2018 growth target of about 6.5%, the intensifying clash with the United States could hurt the economy in the second half of this year. News of the stimulus measures boosted Chinese stocks on Tuesday. The Shanghai Composite index closed up 1.6% and Hong Kong’s Hang Seng gained 1.4%. Among the top gainers were construction and industrial companies, which could benefit from higher infrastructure spending. Monday’s announcement is the latest in a series of steps China has taken to try and perk up its economy.

Since June, the People’s Bank of China has injected about $180 billion into the financial system by providing new loans and reducing the amount of deposits commercial lenders are required to hold.

Analysts said the government’s move on Monday showed it doesn’t want the central bank to do all the heavy lifting. It’s worried about the effect of looser monetary policy on the Chinese currency. The yuan has already fallen to its lowest level in more than a year. Trump has accused China of keeping the yuan artificially low to boost its huge export industry. Ken Cheung, a currency strategist at investment bank Mizuho, said the Chinese government was trying to avoid measures that would cause the yuan to weaken too sharply. The People’s Bank of China “might refrain from scaling up its monetary easing further in the very near term to avoid excess yuan depreciation.” A falling yuan could help Chinese exporters but if the depreciation spirals out of control, it could shock financial markets in China and around the world.

The Trump administration and China this month imposed tariffs of 25% on $34 billion of each other’s exports. US tariffs on an additional $16 billion of Chinese goods are coming soon.

The US government also said last week it was readying new tariffs on Chinese goods worth an additional $200 billion, releasing a list including fruit and vegetables, handbags and baseball gloves. Analysts have previously forecast that trade tensions could shave up to 0.5 percentage points off Chinese growth this year, depending on the intensity of tariffs. Also weighing on growth are policies by the Chinese government designed to rein in the country’s huge amount of corporate debt, which has snowballed since the global financial crisis. Some analysts think things could get worse for China’s economy before they get better. “Despite the shift of Beijing’s stance towards stimulus, we expect growth to weaken before staging a moderate rebound,” said Nomura economist Ting Lu.

‘Brexodus’ to cost UK up to 12,000 finance jobs: City chief

FILE PHOTO: Construction work is seen on high-rise office blocks in the financial district of London, Britain, July 11, 2018. REUTERS/Phil Noble/File Photo

LONDON (Reuters) – Brexit will cost Britain up to 12,000 financial services jobs in the short-term, the City of London financial district’s leader said on Tuesday, and many more jobs might disappear in the longer term. At the lower end of the scale, 3,500 jobs could be lost to EU states, Catherine McGuinness told parliament’s Exiting the European Union Committee. More than 2 million people work in financial services across Britain, with 396,000 in London. “We are not expecting a big Brexodus in the first instance. But depending on how things pan out … in the longer term, we may see many more go,” McGuinness told lawmakers. Banks, insurers and asset managers in Britain are opening hubs in the EU before Britain’s departure from the EU in March to ensure continuity in services to customers there. So far, there have been 1,600 confirmed job moves, a City of London spokeswoman said separately. The City was disappointed that Britain’s government ditched its preferred option of future EU trade based on mutual recognition, whereby Britain and the EU accept each other’s rules under two-way regulatory cooperation. “We had expected continued support for mutual recognition,” McGuinness said. Instead, Britain has asked for financial-services access based on a more accommodative version of the EU’s equivalence system, used by Japan and the United States, whereby Brussels alone decides who gets access. The EU had already dismissed mutual recognition and has said it won’t adapt its equivalence system in the way Britain wants. “We can all see it’s going to be an uphill task to persuade the EU27,” McGuinness said. Huw Evans, director general of the Association of British Insurers, said that opting for some form of equivalence posed a risk that Britain would end up becoming a “rule taker” – having to continue copying EU rules in return for access after Brexit. “You are asking the EU to partner with you in a way to make equivalence work in future. Equivalence… is something the EU considers proprietary,” Evans said. “It’s quite a big psychological ask.” There was plenty of opportunity for “mischief making” by EU states topping up equivalence with national rules, Evans said. The lawmakers also quizzed the broadcasting and tech sectors about Britain’s “White Paper” proposals for future EU trade, which calls for full access for goods, but less access for services in return for flexibility to diverge from EU rules. Sammy Wilson, a committee member, accused the industry officials of giving “alarmist evidence”, adding that foreign direct investment in financial services was around a 10-year high. “You are now trying to do an Airbus on us with the kind of evidence you have been giving,” Wilson said, referring to Brexit warnings from the European aircraft manufacturer that angered some government ministers. “There is no getting away that Brexit is deeply suboptimal,” Evans replied. “This isn’t a scare story,” added McGuinness. The government also ditched mutual recognition for broadcasters from its White Paper but, unlike with banks, proposed no alternative, Adam Minns, executive director of Commercial Broadcasters Association, told lawmakers. “The White Paper for us was a backward step. We are not certain if we are being thrown under a bus or just hitting a temporary roadblock. This could not have come at a worst time,” Minns said. Britain is home to 1,200 international TV channels that beam programmes to viewers in the European Union, but without an EU licence they would have to relocate, Minns said. Giles Derrington, head of Brexit policy at techUK, said the sector wanted the same trade-off as proposed for goods, meaning EU rules in return for EU access, but without flexibility to diverge. The tech sector struggles to see where the benefits of diverging from EU rules would come from, Derrington said. Lawmakers asked whether the industry officials if they would like Britain to join Norway in the European Economic Area, whose members must follow EU rules but without any say over them. “I look at the EEA longingly. We don’t desire more flexibility at the moment,” Minns said.

Alphabet lifts Nasdaq to record high; oil, metal prices boost

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 16, 2018. REUTERS/Brendan McDermid

(Reuters) – The Nasdaq Composite hit a record high on Tuesday as Alphabet’s blowout results sparked a rally in high-growth stocks and bolstered expectations of a robust earnings season, while a rise in oil and metal prices boosted energy and material companies. The benchmark S&P 500 index rose to its highest since early February and is within 2 percent of its late-January record as a clutch of robust earnings helped investors shake off concerns over a U.S.-China trade war and a strengthening dollar. Shares of Alphabet (GOOGL.O) jumped 5.3 percent to an all-time high of $1,275.00 after the online search giant’s quarterly results trounced Wall Street targets. The Google-parent was the biggest boost to the S&P 500 and helped push the S&P technology sector .SPLRCT 0.82 percent higher. Facebook (FB.O) and Amazon (AMZN.O) were up 1.6 percent and 1.4 percent, respectively. Both report later this week. Tech stocks have led the recovery from the early 2018 tumult that dragged U.S. stocks into a correction and have helped erase nearly all of the broader market’s losses. Agriculture-related stocks gained on news that the Trump administration plans to announce aid for U.S. farmers to help protect them from the repercussions of spats between the United States and its trade partners. “The markets are really anchored into fundamentals and looking at the earnings, which is heavy this week,” said David Lyon, global investment specialist at J.P. Morgan Private Bank in San Francisco.

Whirlpool plunges 14% as tariffs wreak havoc with costs and suppliers

Whirlpool sinks 8 percent following earnings report due to tariff impact
Whirlpool sinks 8 percent following earnings report
 

Shares of Whirlpool, the U.S. based washing machine giant who was once in favor of stricter trade controls for its own industry, plummeted after executives blamed rising steel and aluminum costs for diminished quarterly earnings. “Global steel cost has risen substantially and, particularly in the US, they have reached unexplainable levels,” Whirlpool CEO Marc Bitzer told shareholders during a conference call Tuesday. Whirpool stock fell 14 percent in trading Tuesday, on pace for its worst drop since October 2011. The U.S. company was a major advocate for legislation to protect against what Bitzer last year called a “long story of dumping” by foreign competitors LG and Samsung in the washing machine business. Bitzer said during the company’s fourth-quarter earnings call that the White House had “put an end” to this alleged dumping, saying it was “encouraging that finally trade laws are being enforced.” “As the next couple months unfold, we will see a lot more clarity” for how tougher trade laws will impact the Whirlpool’s bottom-line, Bitzer said on Jan. 25. Now the company cites U.S. tariffs on steel and aluminium as contributing to the increased cost in Whirpool’s raw materials. Three months after calling the government’s actions on trade an “incredible” outcome, Bitzer said on Whirlpool’s first-quarter earnings call April 24 that costs “have risen substantially and, as a result, we’re revising our raw material inflation guidance for 2018.”

On Monday, Whirpool again raised its guidance for costs of steel and aluminum in its second-quarter report, while the company again adjusted its expected 2018 profits downward.

Bitzer at times on the call Tuesday downplayed the effects of the tariffs, saying the impact was “almost the same order” as impacts from a freight shortage in the second quarter. Instead, Bitzer focused on the price of steel.

“U.S. steel is 50 percent more expensive than the rest of the world and simply cannot be explained by the input cost,” Bitzer said.

Washing machines are one example of how tariffs can have unexpected and adverse effects on the domestic companies the policies attempt to protect. Whirlpool also noted the hit taken by its suppliers. “We are impacted by the tariffs, as we are an import of record of our suppliers who have to basically pay the tariffs,” Bitzer said. Bitzer expects “the U.S. industry to recover” in the second half of the year, but Whirpool still lowered its full year profit forecast. The company now expects 2018 adjusted earnings per share between $14.20 and $14.80, down from its previously guided range of earnings per share between $14.50 and $15.50, citing primarily the rising costs of steel and aluminium.

Harley Shares Rally After Profit-Margin Forecast Cut on Tariff Hit

Image: Harley Shares Rally After Profit-Margin Forecast Cut on Tariff Hit

Harley-Davidson Inc.’s (HOG.N) shares rallied on Tuesday after the motorcycle maker forecast a lower-than-expected hit to profit margins from President Donald Trump’s trade tariffs and its quarterly earnings topped Wall Street estimates. Its forecast and results raised hopes 2018 profits will hold up better than expected, despite obstacles such as rising raw materials costs, higher tariffs on bikes shipped to Europe and an aging customer base. Harley’s shares (HOG.N) were last up 9 percent at $45.22, recovering almost of their losses since late June, when Trump attacked the company for planning to move production for European customers overseas. The Milwaukee, Wisconsin-based company now expects its motorcycles segment operating margin as a percent of revenue to be about 9 percent to 10 percent in 2018, compared with 9.5 percent to 10.5 percent it projected earlier. The drop was on account of higher steel and aluminum costs and a 25-percent retaliatory duty imposed by the European Union on the shipments from the United States. Those two factors together are estimated to cost Harley $45 million to $55 million this year. The company expects to absorb half of the increased costs through disciplined business management. “We are making every effort to mitigate the costs of those tariffs,” Chief Financial Officer John Olin told analysts on a conference call. David Beckel, an analyst at Bernstein, reckons the 50 basis points fall would translate into about $25 million in added operating costs, below Harley’s previous estimate of an up to $65 million hit from higher raw materials costs and the European tariffs. This will likely result in upward revisions to the company’s 2018 earnings, Beckel said.

Harley’s second-quarter net income fell to $248.3 million, or $1.45 per share in the second quarter ended June 30, from $258.9 million, or $1.48 per share, a year earlier. That exceeded analyst estimates of $1.34 per share, according to Thomson Reuters I/B/E/S.

The company retained its 2018 shipment forecast and said it would reveal plans on Monday about its strategy to train new riders, revive U.S. sales and grow its international business. U.S. President Donald Trump’s restrictive trade policies have inflated Harley’s raw material costs and put it in crosshairs of a trade skirmish with the European Union. Last month, Harley unveiled a plan to shift production for European customers overseas to avoid EU’s retaliatory tariffs, a move that Trump slammed. On Tuesday, Chief Executive Matt Levatich stood by the company’s move, calling it “the best decision, given the circumstances.” Trade tariffs have compounded the troubles of a company that has been grappling with an aging customer base, weak demand from younger buyers and discounts offered by its rivals. Europe is Harley’s second biggest market after the United States. While U.S. retail sales fell 6.4 percent in the last quarter from a year ago, European sales were up about 4.3 percent year-on-year and accounted for half of international revenue. The company did not say where it would shift the production for European markets. Harley has assembly facilities in India and Brazil, and is expected to launch an assembly plant in Thailand in September.

© 2018 Thomson/Reuters. All rights reserved.

Trade war bailout: Trump administration plans to offer $12 billion in emergency aid for farmers hurt by tariffs

White House readies $12 billion in farmer aid

White House readies $12 billion in farmer aid. The Trump administration plans to offer billions of dollars in aid to farmers hit by tariffs on their goods, an emergency bailout intended to ease the pain caused by Trump’s escalating trade war in key electoral states, people briefed on the plan told CNBC. The total aid amount is reportedly about $12 billion. A senior administration official told NBC News that the aid would be temporary. The announcement could come as soon as Tuesday afternoon, hours after the president proclaimed on Twitter that “Tariffs are the greatest!” An industry source briefed on the plan said the package could use existing programs designed to mitigate price and coverage risks, and could target dairy, pork and soy products. Shares of Deere & Company, the Illinois-based tractor maker that owns the brand John Deere, were up more than 4 percent following news of the bailout plan Tuesday. President Donald Trump has hit several of America’s major trading partners with tariffs on billions of dollars’ worth of goods, and has shown few signs of slowing. Earlier this month, 25 percent tariffs on $34 billion of Chinese imports of machinery and electronics went into effect, prompting Beijing to respond with dollar-for-dollar tariffs on American exports of soybeans and other goods. Trump has threatened to impose broader tariffs on as much as $500 billion of Chinese goods, which has alarmed economists as well as farming groups. The administration released a list of $200 billion in Chinese goods that would receive a 10 percent tariff on July 10.  We may not survive trade tensions with China. Retaliatory tariffs on goods like soybeans, pork, and beef have hit farmers’ bottom lines in key electoral states like Wisconsin, North Carolina, Ohio and Iowa. Trump praised his administration’s tariff policy on Tuesday in an early morning post on Twitter.”Tariffs are the greatest!” he wrote. “Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs.”

The post met with some pushback from lawmakers, including Sen. Pat Toomey, R-Pa., a member of the Senate’s banking and finance committees. “Tariffs are not great,” Toomey told CNBC Tuesday. “They are taxes, paid by Americans, that harm consumers, workers, and companies.”

A leading figure in farming circles painted a dire picture of the industry while the trade war escalates, even with aid on the way.

“Right now it’s looking bleak for farming,” said Joe Steinkamp, a corn and soybean farmer from Evansville, Ind., and a director on the board of the American Soybean Association. He said things are so tough in the industry there’s a risk of farmers exiting the business – while also expressing concern about government involvement. “I knew they were going to do something for the benefit for farmers. Obviously, [the administration thinks] it will be a medium- to long-term fix to get the trade dispute with China figured out,” Steinkamp said. “But I am always scared when the government is helping us out rather than doing positive things for trade.”

‘The Facts Are Clear’: NY AG Says Trump’s Waffling on Russia Threatens America’s Election Systems

Trump-Putin presser John Brennan

New York Attorney General Barbara Underwood has accused President Donald Trump of waffling on the issue of Russian electoral interference. Her comments were made in the context of an announcement regarding basic U.S. electoral integrity. On Monday, 21 attorneys general issued a letter urging Congress to prioritize the security of American election systems in time for the 2018 midterm elections “and [further] elections to come.” In a press release accompanying the letter, Underwood railed: No matter how much President Trump waffles, the facts are clear: Russia interfered with our 2016 elections. It’s high time that Congress act to prevent the next attack – because our democracy depends on it. Our bipartisan coalition of Attorneys General has outlined basic steps Congress can take right now to protect election integrity, before it’s too late. As the latest investigations and indictments make clear, during the 2016 election, hackers within Russia’s military intelligence service not only targeted state and local election boards, but also successfully invaded a state election website to steal the sensitive information of approximately 500,000 American voters and infiltrated a company that supplies voting software across the United States. Culled from the ranks of both the Democratic and Republican parties, the bipartisan group of attorneys general urged Congress to adopt three distinct proposals. First, the letter suggests that Congress act on “election-security legislation” such as the Secure Elections Act, which is currently before the Senate. This bill was introduced by a large group of bi-partisan senators. Second, the letter requests increased funding for the Election Assistance Commission (EAC) in order “to support election security improvements at the state level and to protect the personal data of the voters” of the states in question. The EAC is a little-known government entity tasked with myriad voting-and-election-related duties, including the creation of a national standard for voting systems in the United States. This agency is relatively new and its effectiveness is mostly untested; allegations of chronic underfunding have plagued the EAC since its inception after the passage of the Help America Vote Act in 2002. Third, the attorneys general letter calls for the imposition of “cybersecurity standards” across voting networks nationally. The letter asserts, “It is critical that there be a combined effort between governments and security experts to protect against the increased cyber threats posed by foreign entities seeking to weaken our institutions.”

Tesla stock skids on reports it asked suppliers for refunds

NEW YORK – Shares of Tesla tumbled Monday on reports that the electric car maker asked suppliers for refunds to help it turn a profit. A memo provided to The Wall Street Journal shows the company asked a supplier to return what it calls a meaningful amount of money on its payments since 2016. The memo said all suppliers were being asked to help the company become profitable. Tesla declined to comment on the specific memo, but said it is seeking price reductions from a handful of suppliers for projects. “We asked fewer than 10 suppliers for a reduction in total capex project spend for long-term projects that began in 2016 but are still not complete, and any changes with these suppliers would improve our future cash flows, but not impact our ability to achieve profitability in Q3,” Tesla said in a statement.  Tesla said that most of its discussions with suppliers are focused on issues like parts prices and design, adding that “negotiation is a standard part of the procurement process.” Tesla stock fell 3.5 percent to $302.61 Monday afternoon. It’s down from a peak of $385 in September, with many investors growing concerned about Tesla’s spending and its ability to meet its production goals. The request raised more questions about Tesla’s cash position. The 15-year-old company has reported only two quarterly profits in its history and has never made a profit for a full year. It is spending about $1 billion a quarter as it ramps up manufacturing of the Model 3 sedan, a lower-priced car that is key to Tesla’s plans of becoming a major mass-market automaker. “What stuck out to us as a negative is that Tesla’s memo reportedly described the request as essential to the company’s continued operation,” Citi Investment Research analyst Itay Michaeli wrote in a note to clients. Efraim Levy, a senior equity analyst for CFRA, said he found Tesla’s request unusual. “I haven’t heard of this being done before and I’ve been following the industry for 20 years,” he said. “It sounds like something that happens when you’re struggling.” Tesla had $2.7 billion in cash on hand at the end of the first quarter and many experts think it will need to raise money soon. One way to do that is by selling stock, which could send its share price lower still. CEO and top shareholder Elon Musk has said that Tesla intends to become profitable in the second half of 2018, and analysts said Monday that the memo is an attempt to meet that goal. But they said if Tesla has to try this hard to meet its target, it might be a self-defeating effort. “If there are any one-time windfalls that aid in Tesla achieving its profit goals, we expect the market would view that as unsustainable,” said Jamie Albertine, senior automotive analyst for Consumer Edge. In June the company said it was eliminating 3,600 jobs, or 9 percent of its staff, as part of a restructuring effort. At the beginning of July the company said it met a long-time target of building 5,000 Model 3s in a week, but industry analysts have questioned whether Tesla can sustain that pace.

Analysis: Most large US newspapers have experienced layoffs in past 16 months

Analysis: Most large US newspapers have experienced layoffs in past 16 months
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More than half of the largest newspapers in the U.S. have laid off employees since January 2017, according to an analysis released on Monday. The Pew Research Center found that nine of the 16 newspapers with circulations of 250,000 or more, or 56 percent, had experienced layoffs during a 16-month period ending in April. Pew’s findings are released on the same day the New York Daily News announced that it is cutting half its editorial staff in another round of massive layoffs at the 99-year-old tabloid. “We are fundamentally restructuring the Daily News,” an email to staff from the paper’s new owner, Tronc, reads. “We are reducing today the size of the editorial team by approximately 50 percent and re-focusing much of our talent on breaking news — especially in areas of crime, civil justice and public responsibility.” “The decisions being announced today reflect the realities of our business and the need to adapt an ever-changing media environment,” Tronc added in the email. “They are not a reflection on the significant talent that is leaving today. Let there be no doubt: these colleagues are highly valued and will be missed.”The New York Daily News once had one of the largest circulations in the country. Pew also found that 36 of the 110 daily newspapers in the U.S. experienced layoffs between January 2017 and April. “Of the 110 daily newspapers in the analysis, 40 — or 36 percent — were found to have gone through publicly reported layoffs during the 16-month study period, with at least 12 experiencing more than one round of layoffs,” reads the Pew study. “It is possible that even more occurred but remained under the radar of the search methods employed in this analysis,” it adds. Tronc, which purchased the Daily News in September, has executed layoffs at other publications it owns, most notably at the Chicago Tribune and Los Angeles Times, as print media continues to struggle in an increasingly digital and competitive environment.

Putin begins his fourth term as Russia’s president

On Monday, May 7, Vladimir Putin was inaugurated for his fourth term as president of Russia. His presidency will be shaped by growing encirclement and pressure by US sanctions and by social struggles at home as the new government prepares to launch far-reaching attacks on the working class. A pompous inauguration ceremony on Monday was preceded on Saturday by mass arrests of anti-Putin protesters, including supporters of the nationalist, right-wing, pro-Western opposition politician Alexei Navalny. More than 1,600 people were arrested, including Navalny himself. He was released on Sunday. Putin was reelected in the presidential elections of March 18 with over 76 percent of the vote. He is set to remain president until 2024. In his inaugural speech, Putin, echoed his last address on the state of the nation, combining the whipping up of nationalism with phony promises of social reforms and an announcement of far-reaching economic changes. Putin began his inaugural speech by saying that he acknowledged “the responsibility before you,…before Russia, a country of grandiose victories and achievements” and “before the 1,000-year-old history of Russian statehood.” He declared his commitment to a “holy relationship toward our native soil” and stated: “I consider it the goal and sense of my entire life to do everything for Russia.” He went on praising the Russian Constitution which was passed 25 years ago, in 1993, to solidify the new capitalist property relations that had been introduced by the Stalinist bureaucracy with its dissolution of the Soviet Union. Putin argued that the past quarter century had shown that “all beauty and power lies in our autonomy [samobytnost’] and unity” and that Russia had learned “to defend our interests.” He declared that Russia was willing to collaborate with all states in the world “to our mutual benefit” and “in the interests of stability on the planet.” However, Putin stressed, the focus of his next term in office would be on “domestic” issues and major changes in the Russian economy. Much of the speech by Putin and his proposals were almost literal quotations from the report “A Strategy for the Development of the Country, 2018-2024,” which he had earlier commissioned from the Center for Strategic Research (CSR). The CSR is headed by the former finance minister and close Putin ally Alexei Kudrin, who is generally considered to be the greatest darling of both the liberal opposition and the world financial elite among Putin’s inner circle.

Trump warns Iran’s President Rouhani: ‘NEVER, EVER THREATEN THE UNITED STATES AGAIN’

President Donald Trump talks about his meeting with Russian President Vladimir Putin, during a meeting with House Republicans in the Cabinet Room of the White House on July 17, 2018 in Washington, DC. 
Trump warns Iran in late night tweet
  

President Donald Trump threatened his Iranian counterpart in a Sunday night Twitter post:

Trump’s tweet followed Iranian President Hassan Rouhani cautioning the American leader on Sunday about pursuing hostile policies against Tehran, saying: “War with Iran is the mother of all wars.” “You are not in a position to incite the Iranian nation against Iran’s security and interests,” the Iranian leader said, in an apparent reference to reports of efforts by Washington to destabilize Iran’s Islamic government. Still, Rouhani did not rule out peace between the two countries. The heated exchange comes as tension between the two nations has increased since Trump pulled the U.S. out of a nuclear deal with Iran that was struck during the Obama administration. Monday morning, Trump’s hawkish national security advisor, John Bolton, backed the president’s threat. “I spoke to the President over the last several days, and President Trump told me that if Iran does anything at all to the negative, they will pay a price like few countries have ever paid before,” Bolton said in a statement released by the White House. In response to the threat of renewed sanctions on its exports, Iran suggested in July that it could leverage its position along the important trade route, the Strait of Hormuz, to stop other Middle Eastern countries from shipping their barrels to the world. Even before he became president, Trump repeatedly characterized the agreement, which had been brokered under the Obama administration, as one of the “worst deals” the U.S. had ever negotiated. Trump’s all-caps warning to Rouhani in the Sunday night tweet has also drawn parallels to his approach when dealing with another hostile foreign leader: North Korea’s Kim Jong Un.

America’s 1% hasn’t controlled this much wealth since before the Great Depression

The top 1% took home 22.03% of all income in 2015
Spencer Platt
In 2015, the top 1% of Americans made 26.3 times as much income as the bottom 99 percent.

The gap between the rich and the poor in America has ballooned over the last several decades. In 2015, the top 1% of Americans made 26.3 times as much income as the bottom 99 percent — an increase from 2013, when they earned 25.3 times as much, according to a study released Thursday from the Economic Policy Institute, a left-leaning Washington, D.C. think tank. A family needed an annual income of $421,926 to be part of the 1% nationally, the study said, but in some states the threshold was higher. The top 1% of Americans took home more than 22% of all income in 2015, the study found. That’s the highest share since a peak of 23.9% just before the Great Depression in 1928. On Wednesday, Amazon AMZN, +0.04%  founder Jeff Bezos became the richest person of the modern era as his wealth surpassed $150 billion. The fortunes of people like Bezos and those made on Wall Street, in Hollywood and Silicon Valley fuel much of wealth inequality in the U.S., but the issue affects most of the country, the report showed. The incomes of the top 1% grew faster than the bottom 99% in 43 states between 2009 and 2015. In nine states in the U.S., the top 1% represents more than half of all income growth. Meanwhile, the median net worth of Americans currently hovers at $68,828 per household. One in five Americans say they have more credit-card debt than they do in emergency savings and less than 40% of Americans say they have enough savings to cover a $1,000 emergency room visit or car repair. “Rising inequality affects virtually every part of the country, not just large urban areas or financial centers,” said Estelle Sommeiller, a socio-economist at the Institute for Research in Economic and Social Sciences in France and author on the study. “It’s a persistent problem throughout the country — in big cities and small towns, in all 50 states. While the economy continues to recover, policymakers should make it a top priority to grow the incomes of working people while reining in corporate profits.” The EPI — a liberal nonprofit associated with the labor movement — recommends returning bargaining power to U.S. workers, increasing political participation by all citizens, and boosting public investments in child care, education, housing and health care. “Such policies will help prevent the wealthiest few from appropriating more than their fair share of the nation’s expanding economic pie,” Sommeiller said. Such ideas have gained popularity as the 2018 midterm elections approach, with New York’s Alexa Ocasio-Cortez winning an upset victory in June’s Democratic primary in New York’s 14th congressional district running on a platform of Medicare for all and reining in Wall Street. She also supports the idea of a government program guaranteeing paid jobs for anybody who wants one. Critics say such policies are ill-conceived and will “bury us in debt.”  Another theory on the cause of the rising inequality: The decline of unions, according to a study released by the EPI in August 2017. Today, only 11% of American workers are covered by unions, which is a sharp contrast from the 1950s when a third of the U.S. workforce was unionized or in a job represented by a union. Union workers these days earn on average 13.2% more than non-unionized workers with similar education and experience in the same sector.

Trade war a reality, French finance minister warns

Image copyright Getty Images
Image caption The Trump administration says protecting US steel and aluminium producers is a matter of national security

A trade war is now a reality, French Finance Minister Bruno Le Maire has warned as G20 ministers gather for a summit in Argentina.The current US trade policy of imposing unilateral tariffs is based on “the law of the jungle”, he said. But US Treasury Secretary Steven Mnuchin defended the tariffs and urged the EU and China to open their markets to allow free competition. Last week, US President Donald Trump described the EU as a “foe” on trade. Mr Trump later threatened to impose tariffs on all $500bn (£380bn) of Chinese goods entering the US in a growing trade row. The US has large trade deficits with both the 28-member EU and China. The two-day talks in Buenos Aires bring together finance ministers and central bankers of the world’s top 20 economies. “World trade cannot base itself on the law of the jungle and the unilateral increase of tariffs is the law of the jungle,” Mr Le Maire told AFP news agency.

Image copyright Reuters
Image caption Partners or foes? Steven Mnuchin (left) and Bruno Le Maire at the G20 meeting in Buenos Aires

“The law of the fittest – this cannot be the future of global trade relations. The law of the jungle will only turn out losers, it will weaken growth, threaten the most fragile countries and have disastrous political consequences.” He added that a trade war was now a reality, and that the EU could not consider negotiating a free trade deal with the US without America first withdrawing its tariffs on steel and aluminium. Little has caused Donald Trump more annoyance than the trading deficits between the US and its major partners. He believes that if you have a trade deficit – if you import more than you export – you are losing out. Tackling what he has called “unfair trading practices” has become a key plank of his administration. The European Union, China and the North American Free Trade Agreement (Nafta) countries, Mexico and Canada, have been his main targets.

Susan Rice: ‘Legitimate Question’ If Trump Is Compromised by Russia

Sunday on ABC’s “This Week,” former UN ambassador under Obama Susan Rice said it was a “legitimate question” if President Donald Trump was compromised by Russia. When asked if Trump is compromised by Russia, Rice said, “I don’t know what his motivations are. I think that’s a legitimate question, and it has been reinforced not only by the series of policy steps that I just mentioned that he is he has taken that have served Russian interest as opposed to U.S. interest, but it was reinforced sadly this week by that tragic display of sycophancy in Helsinki where the president called into question yet again, standing next to Vladimir Putin, a dictator, the integrity of our intelligence community. He offered or seemed to be willing to consider an offer to hand over our ambassador to Russia, former Ambassador Micheal McFaul, and others to the Russians for questioning. It was a series of extraordinary capitulation that really do legitimately call into question what is going on.”

Schiff: Trump is acting like someone who is compromised

Schiff: Trump is acting like someone who is compromised
© Greg Nash

Rep. Adam Schiff (D-Calif.) said on Sunday that President Trump is acting as if he has been “compromised” by the Russians, floating once again the notion that Moscow could have damaging information on the U.S. leader. “I certainly think he’s acting like someone who’s compromised, and it may very well be that he is compromised or it may very well be that he believes that he’s compromised, that the Russians have information on him,” Schiff said on ABC’s “This Week.”

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Trump came under intense bipartisan scrutiny last week after a controversial joint news conference with Russian President Vladimir Putin in Helsinki in which the U.S. leader challenged the assessment of his own intelligence community that Moscow meddled in the 2016 election. He later walked back those remarks. He also appeared to place blame on the U.S. for current tensions with Russia, saying that Washington has been “foolish.” In an op-ed for The New York Times last week, Rep. Will Hurd (R-Texas), a former CIA agent, warned that the U.S. president appeared to be “manipulated” by Moscow and was “playing into Vladimir Putin’s hands.” Tom Bossert, Trump’s former homeland security adviser, pushed back on Schiff’s remarks on Sunday, saying on “This Week” that it was a “cheap shot” to suggest that the president had been compromised by Moscow. “It’s an easy, cheap shot to say the president’s been compromised by the Russians,” Bossert said. “I think the Russians elected a former KGB agent and he spends all of his time and their resources squandering it on penny-ante spy tactics to try to get into loser kind of lobbyist pockets and so forth,” he added, referencing Putin’s past as an intelligence agent.

Trump Team Allowed Prosecutors to Get Cohen Recording of Playboy Model Discussion, Report Says

President Donald Trumplashed out Saturday over lawyer Michael Cohen‘s recording their conversation about possibly paying off a Playboy model, but it appears that his lawyers actually waived privilege over the tape. That means federal prosecutors can listen to it, and possibly use it in a case. Authorities got their hands on the audio after FBI agents obtained it during April 9 searches on Cohen’s home, hotel room, and office. Both sides fought over how many of the almost 900,000 seized documents were privileged. Special Master Barbara Jones determined that the tape was one of 2,633 which met that designation, but according to a CNN source, Trump’s team waived it in this case. “It is the client who owns the privilege and not the lawyer,” the person said. “In this specific instance, it was Trump who waived the privilege after Special Master Jones ruled the tape was privileged. Team Trump actually contacted the judge and waived the privilege, thus, permitting Rudy [Giuliani] the ability to release his version of the tape’s content. It is ironic that Trump would complain about a privileged tape that would not have been released and then chooses to make it public himself. Very foolish strategy by team Trump.” The conversation reportedly concerned a possible payoff to Playboy model Karen McDougal. She claimed to have had an affair with him. American Media Inc., the parent company of the National Enquirer, ended up buying her rights to the story, but sat on it. She sued them, claiming she was misled about the deal. (The president’s team denied the affair ever happened.) Trump lawyer Rudy Giuliani has repeatedly said the tape itself is exculpatory, and proves the president did nothing wrong. The audio showed no wrongdoing, he told CNN. “Cohen is talking about buying the rights from AMI (American Media Inc.),” Giuliani said. “They’re talking about a corporation doing it, one of their corporations doing it. The President says ‘make sure it’s done correctly, and make sure its done by check [so there would be a record].’” But no payment was made in the end, Giuliani said. Cohen’s legal team argues that it won’t hurt their client. “Obviously, there is an ongoing investigation, and we are sensitive to that. But suffice it to say that when the recording is heard, it will not hurt @MichaelCohen212,” Cohen’s lawyer Lanny Davis tweeted on Friday. “Any attempt at spin can not change what is on the tape.” Trump complained that the recording was “possibly illegal” but a source pointed out that New York, where the discussion took place, features a one-party consent law, so it would be legal for a person to record a conversation without permission from the other individual.

Top Senate Dem: Inviting Putin to Washington ‘beyond comprehension’

Top Senate Dem: Inviting Putin to Washington ‘beyond comprehension’
© Anna Moneymaker
Sen. Bob Menendez (D-N.J.) said Sunday that President Trump’s invitation to Russian President Vladimir Putin is “beyond comprehension,” adding that Trump “seems to want to be chummy” with the Russian leader instead of challenging him.

“No one knows what he said behind the scenes because he took … over two hours with only an interpreter, not even the secretary of State or the head of national intelligence,” Menendez said on “Fox News Sunday,” referring to a one-on-one meeting between Trump and Putin last week in Helsinki. “Is there any upside to talking to Putin?” Fox’s Bret Baier asked the ranking member of the Senate Foreign Relations Committee. “It depends if you challenge him,” Menendez responded. “Now we’re going to give him a red-carpet treatment and invite him to Washington. To me, that’s beyond comprehension,” he added.

Trump faced widespread criticism after a news conference alongside Putin in which he appeared to embrace the Russian leader’s denial of election meddling and said the U.S. shared blame for tense relations between Washington and Moscow. The president and his staff attempted to walk back and clarify his comments last week. “You can speak to adversaries, but at the end of the day, you have to do it in a way in which you challenge them,” Menendez said on Sunday. “The president seems to want to be chummy with Putin instead of challenging him.”

Lindsey Graham warns Trump he’s being “played” by North Korea

Sen. Lindsey Graham, R-South Carolina, appears on CBS’ “Face the Nation,” on July 22, 2018

Sen. Lindsey Graham is warning President Trump amid ongoing negotiations with North Korea that he’s being “played” by dictator Kim Jong Un. Graham told “Face the Nation” that he worries “China is pulling North Korea back” and the president should instead push for firm deadlines for the North to meet. “Here’s what I would do: I would put deadlines in terms of when I want North Korea to deliver the remains of our POWs and missing in action, and I would restart the military exercises,” Graham suggested. “North Korea is playing the same old game with you they’ve played with every other president. You’re being tough on China, and you should be, but China is pulling North Korea back. You need to make sure that China and North Korea know and believes that you’re different than everybody else.” Following Mr. Trump’s historic summit with Kim last month, Graham told CBS News that China’s goal of driving the U.S. out of Asia is accomplished if the U.S. withdraws its forces from the region.  “That will lead to more conflict, not less. Our forces in South Korea are stabilizing for Asia,” he said.  Graham said on Sunday that the administration needs to now restart joint military exercises in the region and “put on the table removing our dependence from South Korea as a real, stern warning to North Korea of what happens if they play you.”

Accused Russian spy Maria Butina took meetings with top US Treasury officials

She was also bankrolled by a Russian billionaire.
A 29-year-old Russian woman has been arrested for conspiring to influence US politics by cultivating ties with political groups Mariia Butina,  was arrested in Washington on July 15, 2018 and appeared in court on July 16,

Accused Russian spy Maria Butina had high-level meetings with US Treasury officials and received funding from a Russian billionaire invested in U.S. energy and technology, according to news reports on Sunday. Fresh revelations shedding more light on her activities in the United States come after Butina — founder of what she considered the Russian equivalent of the National Rifle Association — was indicted Tuesday on conspiracy charges and for failing to register as a foreign agent. Butina has pleaded not guilty. According to Reuters, Butina participated in meetings between her handler Alexander Torshin — then deputy governor of the Russian Central Bank and known to have close ties with Russian President Vladimir Putin — and two senior officials at the Federal Reserve and Treasury Department in 2015. As last week’s indictment details, Butina is accused of working with Torshin “for the purpose of developing and executing a plan to identify and exploit personal connections with U.S. persons having influence in American politics who were in positions to advance the interests of the Russian Federation.” The reports lend credence to this accusation. Butina had “wider high-level contacts in Washington than previously known,” writes Reuters. The news outlet says the meetings provide further insight into her efforts to “cultivate” relationships with American political leaders and special interest groups. According to Reuters, Butina traveled to the U.S. with Torshin in April 2015  where the Washington D.C. foreign policy think tank Center for the National Interest — known for its pro-Russia stance — arranged meetings for the two Russians with then Federal Reserve chairman Stanley Fischer, and Treasury undersecretary for international affairs at the time Nathan Sheets. The indictment also accuses the NRA of acting as a conduit between Russian operatives and the Republican Party. But that’s not all. As the Washington Post reported Sunday, Butina has received financial support from Russian Billionaire Konstantin Nikolaev, whose fortune has largely come from investments in port and railroads in Russia. Nikolaev, however, also sits on the board of the Houston-based company, American Ethane. Last year in China, President Donald Trump showcased the company — it was one of 15 to sign massive trade deals between the U.S. and China. The billionaire is also an investor in a San Francisco start-up called Grabr that helps users buy “unusual products” from around the world, the Washington Post describes.A spokesperson for Nikolaev confirmed to the Washington Post that he was in contact with Butina between 2012 and 2014 while she was launching her pro-gun rights group in Russia. However, he declined to confirm whether Nikolaev provided any financial support. The spokesperson also added that Nikolaev has never met Trump. Nikloaev’s son Andrey, however, volunteered for the 2016 campaign to elect Trump. And according to sources speaking with the Washington Post, Konstantin Nikolaev was spotted at the Trump International Hotel in D.C. during Trump’s inauguration in January 2017.

While it’s unclear whether Nikolaev attended any official inaugural events, according to the Post, Butina “made an appearance” at one of Trump’s inaugural balls. Nick Bit: of course she attended Trumps inaugural ball… After all they both work for the same boss.

Gowdy: ‘Disconnect cannot continue’ between Trump and intelligence community

 

Washington (CNN)South Carolina Republican Rep. Trey Gowdy on Sunday called on President Donald Trump to affirm wholeheartedly the intelligence community’s conclusion that Russia attempted to influence the 2016 presidential election.  “The evidence is overwhelming,” Gowdy said. “It can be proven beyond any evidentiary burden that Russia is not our friend and they tried to attack us in 2016. So the President either needs to rely on the people that he has chosen to advise him, or those advisers need to reevaluate whether or not they can serve in this administration. But the disconnect cannot continue. The evidence is overwhelming, and the President needs to say that and act like it.” Gowdy, speaking on “Fox News Sunday,” said Trump missed “a really good opportunity” at his press conference with Russian President Vladimir Putin in Helsinki, Finland, last week to distinguish the US position from Russia. At the press conference, Trump appeared to side with Putin over the US intelligence community, which has concluded that Russia was behind efforts to influence the 2016 US presidential election. Trump said in Helsinki that he did not see any reason why Russia would have been responsible for the election interference, but later said he had misspoken and should have said “wouldn’t” instead of “would.”

Trump has offered varying statements on the US intelligence community conclusion, and when he said last week that he had misspoken, he also asserted, “It could be other people also.”
In the interview Sunday, Gowdy said he was glad for the follow-up from Trump, but stressed the importance of the initial comments. “There was this equivocation during the press conference — that I’m glad he corrected it — but when you’re the leader of the free world, every syllable matters, and you really shouldn’t be having to correct it,” Gowdy said.
The White House has since announced another summit with Putin in Washington this fall, and on Sunday, Trump continued to defend the recent meeting, taking to Twitter to blame the media for criticisms of his remarks at the summit.
“I had a GREAT meeting with Putin and the Fake News used every bit of their energy to try and disparage it. So bad for our country!” Trump tweeted.

 

South Carolina GOP Congressman Mark Sanford warns of Trump’s ‘autocratic style’

Rep. Mark Sanford, R-S.C.
Bill Clark | CQ Roll Call | Getty Images Rep. Mark Sanford, R-S.C

South Carolina GOP Congressman Mark Sanford, who lost a primary to a conservative insurgent backed by President Donald Trump, warned on about the president’s ‘autocratic style’ that was eroding political discourse. In a broad panel discussion on Saturday at New York’s Ozy Fest, Sanford broke down several of the reasons why he was defeated by Katie Arrington in June’s primary for South Carolina’s First District. “The beauty of the American political experiment is we can agree to disagree. You might have a very liberal perspective, I might have a conservative perspective, but we can sit at the table and begin to hash out ideas,” Sanford said. “The danger I believe of Donald Trump is he is autocratic in style,” said Sanford, who’s been a frequent critic of Trump. That tendency “is not conducive to the open debate of ideas which has been the hallmark of Americans,” he added. Sanford is a former governor who was once speculated as a potential presidential contender, but resigned in scandal after admitting to an extramarital affair. He then revived his political career with a successful bid for Congress. That came to a screeching halt after Trump backed Arrington, an unapologetic defender of the president. “He went after me in my primary and I lost my primary,” Sanford said on Saturday. “During her victory celebration, [Arrington’s] words were, ‘We are the party of Donald Trump’ and I could not disagree” more, Sanford said.

He added that the Republican party risks turning itself into a “a cult of a personality” based on Trump. “Our Founding Fathers were so deliberate in forming a nation of laws and not men, and if we go against that in the slightest form, we are playing with fire,” Sanford added.

Sanford noted that with a deficit of more than $1 trillion, the U.S. is flirting with a new financial crisis that Trump may not be able to manage. “Trump is an economist populist. Telling you what you want you want to hear and selling a lie that he knows can’t come true,” Sanford added. Trump has courted controversy with his base by stoking trade wars with most of the U.S.’s most important economic allies. People ostensibly aligned politically with the president have expressed concerns about how the multi-pronged dispute will affect their livelihoods, which include vast swaths of ranchers, farmers and whisky makers. Grover Norquist, founder and President of Americans for Tax Reform who was also on the panel Saturday, weighed in on the subject of global tariffs.

“Tariffs are simply taxes. There not something special or different they are just stupid and destructive taxes on the American consumer,” said the GOP activist. “When we put up tariffs we hurt Americans.”

“Its a target against our own people and what we are able to contribute into our economy while diminishing the relationships that we have had for decades and centuries with countries like Canada, UK and other places in Europe. As relationships disintegrate, this makes it easier for our enemies to get into our system here in the U.S,” she added.

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

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

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

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

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

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

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

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

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

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

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

 

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

IMF warns G20 that tariffs hurting economy as Trump threatens more

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

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

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

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

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

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

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

Trump Attacks Fed AGAIN for Raising Interest Rates

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

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

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

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

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

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

Reuters Graphic

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

Trump threatens tariffs on all $500 billion of Chinese imports

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

UK watchdog and EU tell banks to prepare for hard Brexit

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

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

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

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

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

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

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

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

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

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

Manufacturers are concerned about impact of tariffs: Fed

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

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

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

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

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

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

EU fines Google $5 billion over Android antitrust abuse

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

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

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

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

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

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

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

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

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

Trump Bashes Media Coverage Of Putin Meeting, NATO Summit

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

 

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

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

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

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

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

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

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

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

Source: Natixis

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

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

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

LaVorgna expects the curve to invert.

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

The Latest: Trump says he misspoke on Russia meddling

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

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

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

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

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

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

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

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

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

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

Gazprom to commence development of Kharasaveyskoye field in 2019

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

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

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

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

 

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

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

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

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

Russian President Vladimir Putin (Screenshot)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DHS chief seems to disagree on Putin backing Trump

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

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

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

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

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

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

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

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

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

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Getty Images

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

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

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

Trump-Putin summit: US leader has low expectations

Image copyright Reuters

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

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

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

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

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

 

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

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

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

By Sandy Fitzgerald 

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

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

 FILE PHOTO: White House Chief Strategist Stephen Bannon

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

Mays greet Trumps for UK black-tie dinner

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Prosecutors Drop Charges Against Stormy Daniels

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

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

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

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

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

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

Trump claims NATO victory after ultimatum to go it alone

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

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

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

Oil steadies despite IEA warning of spare capacity limits

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

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

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

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

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

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

An asylum-seeker in quarantine

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

TSA screeners win immunity from abuse claims: appeals court

By Jonathan Stempel ReutersJuly

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

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

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

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

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

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

The US is running out of Chinese exports to tax

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

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

20180706-China-US-trade-chart-NEW

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

Food

Fruit

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

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

Grains, nuts and beans

China is hitting the US where it hurts: soybeans

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

Seafood

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

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

Meat

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

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

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

Trump tells NATO leaders to increase defence spend to 4 percent

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Consumer credit growth accelerates sharply in May

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

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

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

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

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

Angela Merkel hits back at Donald Trump at Nato summit

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

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

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

   Germany is 'totally controlled' by Russia, Trump says

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

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

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

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

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

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

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

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

Trump suggests NATO members reimburse US for defense costs

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

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

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

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

I Quit

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

Oil mixed on supply disruptions; chance of Iran sanctions waivers

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

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

Reuters Graphic

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

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

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

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

According to the Census Bureau, the last month that the U.S. ran a merchandise trade surplus with China was April 1986. That month, the U.S. exported $318,900,000 to China, imported $264,900,000 from China—and ran a monthly surplus of $54,000,000. In the 385 straight months since then, the U.S. has run a merchandise trade deficit with China. In 1985, the first year the U.S.-China trade balance is reported by the Census Bureau on its website, the U.S. ran a $445,030,000 merchandise trade deficit in January through May (in constant May 2018 dollars). The 2018 January-through-May U.S. China trade deficit of $152,237,500,000 is about 342 times that. Through all of 2017, according to the Census Bureau, the top products the U.S. imported from China (by dollar value) were cell phones and other household goods ($70,359,818,000); computers ($45,515,206,000); telecommunications equipment ($33,490,521,000); computer accessories ($31,648,577,000); toys, games and sporting goods ($26,751,412,000); apparel, textiles, nonwool or cotton ($24,137,388,000); furniture, household goods ($20,669,126,000); other parts and accessories of vehicles ($14,406,417,000); household appliances ($14,138,581,000); and electric apparatus ($14,080,858,000).

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

 

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

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

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

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

Sell tech! Morgan Stanley’s warning to investors

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

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

nasdaq ytd stock chart

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

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

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

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

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

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

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

Dominic Raab replaces David Davis as Brexit secretary

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

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

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

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

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

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

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

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

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

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

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

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

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

US Warships Pass through Taiwan Strait amid China Tensions

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

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

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

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

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

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

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

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

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

SECOND FRONT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Whiskey wars: Trade tariffs hit hard in Trump country

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

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

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

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

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

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

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

Violent protests erupt in Haiti as fuel prices spike

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

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

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

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

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

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

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

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

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

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

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

Oil mixed as investors short-cover and Saudi boosts output

 

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

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

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

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

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

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

EIA: US crude stockpiles increase 1.2 million bbl

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

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

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

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

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

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

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

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

Argentina’s currency crisis is far from over

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

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

Trump tries to tweet his way out of high oil prices

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

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

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

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

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

Mueller Taps More Prosecutors to Help With Growing Trump Probe

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

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

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

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