Scaramucci: Trump’s Actions After McCain’s Death a ‘Slap’ to Veterans

Image: Scaramucci: Trump's Actions After McCain's Death a 'Slap' to Veterans

By Sandy Fitzgerald . Ex-White House Communications Director Anthony Scaramucci said Thursday he wasn’t surprised by President Donald Trump’s behavior following the death of Sen. John McCain last weekend, but he is “disappointed” and considers it a “slap” to other veterans.”I disagree with it,” Scaramucci told CNN’s “New Day.” “John McCain was a veteran. He served the country with distinction, he’s a war hero and — whether he was captured or not doesn’t really make a difference, he is a war hero — and you have to honor him the way you would honor other veterans.”

He said he is happy the decision to put the flag at the White House back at half-staff was made, after the flag initially was raised back to full staff shortly after the Arizona Republican’s death. “I put my flag at half-staff, and others should too,” said Scaramucci. “The White House shouldn’t…forget about Sen. McCain. Sometimes the symbolism coming out of the Oval Office and the White House is for all Americans.”

Trump was widely criticized on Monday after the White House flags went back to full staff, less than 48 hours after McCain died. Trump also refused to answer questions from reporters about McCain during White House events Monday.

However, later in the day, Trump issued a proclamation about the flags, and expressed respect for the late senator’s service.

Ex-ambassador: How Trump has treated Canada is ‘the definition of insanity’

US-Mexico deal without Canada is a folly and will harm the United States, says former ambassador to Canada
US-Mexico deal without Canada is a folly and will harm the United States, says former ambassador to Canada 9 Hours Ago | 04:29
 

President Donald Trump risks seriously damaging the relationship between Canada and the U.S. as he pushes toward a new North American Free Trade Agreement, former U.S. Ambassador to Canada Bruce Heyman told CNBC on Friday. “The definition of insanity, just listening to the president there, is how the president has been treating Canada all this time. You know, this is our best trading partner in the world,” Heyman said on CNBC’s “Squawk on the Street.” After being sidelined from talks for more than two months, Canadian Foreign Minister Chrystia Freeland rushed to Washington, D.C., Wednesday, following Monday’s preliminary deal between the U.S. and Mexico. The Trump administration gave Canada a Friday deadline to hash out its differences with the U.S. and join a preliminary, new trade agreement, which serves as a start to replace the 1994 NAFTA among the three nations. The Trump administration’s deadline passed with no agreement. In a news conference late Friday afternoon, Freeland said the two parties will continue to work toward a deal, maintaining that “we’re not there yet” on an agreement. “We know that a win-win-win agreement is within reach,” Freeland told reporters. “With goodwill and flexibility on all sides, I know we can get there.” Her comments followed reports from The Toronto Star that Trump privately said he would not make any compromises in trade talks with Canada. Trump later confirmed he had made the comments, writing in a tweet, “At least Canada knows where I stand!” With an economy 10 times the size of Canada’s, the U.S. clearly has all the leverage in these trade negotiations, said Heyman, who served under President Barack Obama from 2014 to 2017. But that doesn’t mean the U.S. should use it.

“The U.S. has all the leverage in the world, but just because you can doesn’t mean you should. When you take your best friend, your greatest ally in the world, and start squeezing them, you can win, but I will tell you, the relationship will be damaged much longer than it will take the ink to dry on a new NAFTA deal,” said Heyman.

As for Mexico’s role in all of this, former U.S. Ambassador to Mexico Antonio Garza, who served under President George W. Bush from 2002 to 2009, said he didn’t feel the southern neighbor was really at fault. “I wouldn’t say [Mexico] threw Canada under the bus. I think what happened Monday was there was a narrowing of issues, a consensus reached on issues that were particularly difficult in the context of the U.S. and Mexico,” Garza said during the same “Squawk on the Street” interview as Heyman. Heyman said a trilateral agreement is the only possible option, and that parties will likely reach some sort of negotiation, but U.S.-Canada relations may be damaged in the process. “You look at this, and it’s not just trade. They were with us in 9/11, like no other country. They were on our side in Afghanistan. They helped diplomats come out of Iran,” Heyman said. “Canada’s there, they are going to negotiate that out, but I don’t think [Trump’s] been treating them too well,” he added. The White House did not immediately respond to CNBC’s request for comment.

US, Canada fail to reach a deal on rewriting NAFTA

(CNN)The fate of NAFTA became uncertain Friday when the United States and Canada failed to come to an agreement on rewriting the three-nation trade pact.But negotiations will resume on  Wednesday. “We know a win-win-win agreement is within reach and that’s what we’re working towards,” said Canadian Minister of Foreign Affairs Chrystia Freeland at a press conference Friday. The US Trade Representative’s office said talks with Canada would continue and that President Donald Trump has formally notified Congress of the trade deal he struck with Mexico earlier this week. “Today the President notified the Congress of his intent to sign a trade agreement with Mexico — and Canada, if it is willing — 90 days from now. The agreement is the most advanced and high-standard trade agreement in the world,” the statement said. Talks came to a head on Friday as officials rushed to beat a US-imposed deadline that would allow them to sign the deal before Mexico’s president-elect, Andres Manuel Lopez Obrador, takes office on December 1. The United States and Mexico announced a preliminary bilateral deal on Monday after resolving an issue over auto manufacturing. Canadian officials rejoined the talks this week. Officials from both the US and Canadian negotiating teams confirmed Friday that they will continue working towards a trilateral deal, and that good progress has been made over the past year at revamping the 24-year-old trade deal “The government of Canada will not sign an agreement unless it’s good for Canada and good for Canadians,” Freeland said Friday.At issue is  Canadian concessions on agriculture. Trump has said he wants Canada to end its steep tariffs on US dairy products, claiming they hurt US farmers. Canadian Prime Minister Justin Trudeau has pledged to protect his country’s dairy industry.

NAFTA talks: Canada voices optimism as it rejoins negotiations

During Friday’s negotiations, Canadian officials reportedly brought up remarks made by President Trump on Thursday during an off-the-record conversation with Bloomberg News . The Toronto Star reported that Trump said he would not make any compromises at all in the talks with Canada.
The deal with Canada would be “totally on our terms,” he reportedly said. During an event in North Carolina on Friday, Trump said he would move ahead with a bilateral agreement with Mexico.
“If we don’t make a deal with Canada, that’s just fine. I say, affectionately, we’ll just have to tariff those cars coming in.” “That’s a lot of money coming into the coffers of the United States,” he added. When asked about Trump’s comments on Friday, Freeland said that her negotiating counterpart is US Trade Representative Robert Lighthizer, and not President Trump.
“This week, and from the beginning of negotiations, Ambassador Lighthizer and his team have been negotiating in good faith and with good will,” she said.

The Oil Export Boom Houston-Galveston exports exceed imports for the first time.

The Houston Ship Channel in Deer Park, Texas.
The Houston Ship Channel in Deer Park, Texas. Photo: David J. Phillip/Associated Press
 

When George W. Bush signed legislation in 2007 to subsidize and mandate the production of biofuels, he cited the urgent need to liberate America from “long-term” dependence on “oil from foreign lands.” Turns out there was an easier, much less expensive way: drill, baby, drill. The Energy Information Administration announced this month that the port district of Houston-Galveston began exporting more crude oil than it imported for the first time. Houston-Galveston exports in April surpassed imports by 15,000 barrels a day, and by May the difference had grown to 470,000 barrels a day. That port district handles more than half of all U.S. crude exports, which hit a record of two million barrels a day in May. The export boom is testament to U.S. ingenuity that has driven rapid advances in hydraulic fracturing and horizontal drilling, especially in shale rock. The breakthroughs have lowered drilling costs and put Texas’s Permian Basin at the center of an oil-and-gas drilling revolution that will next year see the state producing more oil than either Iraq or Iran. Washington also gets credit for removing regulatory hurdles like the oil export ban. Republican leaders in Congress took flak in 2015 for agreeing to extend green-energy subsidies for a few years in return for Barack Obama’s signature on a statutory end to the 40-year-old export ban. Some conservative pressure groups derided the policy trade as a sellout while liberals complained that ending the ban would serve Big Oil. The real beneficiaries are workers, investors and the overall economy, as well as greater flexibility in foreign policy as the U.S. is less vulnerable to authoritarian oil exporters. The U.S. is unlikely to be a net oil exporter soon, since American refineries require heavy crude from abroad. Shale drillers produce lighter grades. But the gap between imports and exports shrank in 2017 to a 24-year low of 6.8 million barrels a day from more than nine million in 2012. The lesson is that American invention and entrepreneurship remain indomitable—when government gets out of the way.

Trump Says Mueller Investigation Is ‘Illegal’, Trump-Appointed Judge Says He’s Wrong

Trump Mueller meeting after June 12 Giuliani

President Donald Trump expressed his feelings about facts on Thursday in comments to Bloomberg, including that he views special counsel Robert Mueller‘s Russia probe as “illegal.”

“I view it differently. I view it as an illegal investigation,” the president said, citing unnamed “great scholars.” “There should never have been a special counsel,” he added. Of course, this is not news in the sense that Trump often refers to the Russia investigation as a RIGGED and ILLEGAL WITCH HUNT, but it is news in the sense that Trump has repeated a claim that has been debunked a number of times already by federal judges, in light of their rulings. Indeed, even a judge that Trump appointed in 2017 has ruled against a challenge of Mueller’s authority brought before the court by alleged troll farm Concord Management and Consulting, LLC. You may recall that Dabney L. Friedrich informed Concord that their challenge of Mueller’s authority was a losing one. Just over two weeks ago, Friedrich explained at length why Mueller’s appointment as special counsel was proper and that he had the power to prosecute Concord. All of this argumentation centered on the Appointments Clause of the Constitution and whether Mueller is an “inferior officer” or “principal officer.” The difference is important because principal officers are to be nominated by the president of the United States “with the Advice and Consent of the Senate.” Inferior officers, on the other hand, have different rules: “Congress may by Law vest the Appointment of such Inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.” Friedrich, along with other judges, have consistently held that Mueller is an “inferior officer.” Friedrich also stated that the (acting Head of Department) Deputy Attorney General Rod Rosenstein‘s memo empowering Mueller as special counsel “does not limit the Special Counsel to investigating individuals and entities that are part of the Russian government.”

“Rather, the Special Counsel may investigate the Russian government’s interference ‘efforts,’ which involved non-governmental third parties,” the judge said. That’s not all. Mueller’s authority is quite broad and has been from the beginning:

The Special Counsel is authorized to conduct the investigation confined by then-FBI Director James B. Comey in testimony before the House Permanent Select Committee on Intelligence on March 20, 2017, including:

  1. (i)  any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump; and
  2. (ii)  any matters that arose or may arise directly from the investigation; and
  3. (iii)  any other matters within the scope of 28 C.F.R. § 600.4(a).

(c) If the Special Counsel believes it is necessary and appropriate, the Special Counsel is authorized to prosecute federal crimes arising from the investigation of these matters [emphasis ours].

In any case, Friedrich is not the only judge to rule this way. Everyone who has challenged Mueller’s authority up to now has lost, though it is worth mentioning that both Concord and ex-Roger Stone aide Andrew Miller both have active appeals of rulings against them.

NYT: Trump tried to buy, bury decades of dirt from National Enquirer

Washington (CNN)President Donald Trump sought to buy all the dirt on him collected by the tabloid National Enquirer and its parent company American Media Inc., according to a new report. Trump and his former personal attorney Michael Cohen devised a plan to purchase potentially damaging stories about Trump from AMI, The New York Times reported Thursday, citing several of Trump’s associates. The plan was never finalized, according to the Times. Lawyers for Trump and Cohen declined to comment to the newspaper, as did AMI. The information gathered on Trump dating back to the 1980s includes older stories and notes about Trump’s marital woes, lawsuits and tips about alleged affairs, among other things, according to the Times. Last week, Jerry George, the former Los Angeles Bureau Chief for the National Enquirer, told CNN’s Erica Hill on “Erin Burnett OutFront” that American Media head David Pecker kept a safe in which he held “particularly sensitive story files,” including source agreements and contracts. The Associated Press first reported on the safe.

Last month, CNN published a secret tape of Cohen in September 2016 discussing with Trump a plan to buy the rights from AMI to Playboy model Karen McDougal’s story about an alleged affair Trump had with her years earlier. AMI had bought the rights to McDougal’s story for $150,000 in August 2016 in a “catch and kill” tactic, in which a publication takes ownership of a story but doesn’t publish it.
In the recording, Cohen says, “I need to open up a company for the transfer of all of that info regarding our friend David,” likely a reference to Pecker. Cohen pleaded guilty last week to eight criminal counts, including tax fraud, false statements to a bank and campaign finance violations. The counts were tied to his work for Trump, including payments Cohen made or helped orchestrate that were designed to silence women who claimed affairs with the then-candidate.
In court, Cohen said, “I and the CEO of a media company, at the request of the candidate, worked together” to squelch stories, effectively implicating Trump himself. According to the court filing, Cohen and Pecker worked to suppress potentially damaging claims against candidate Trump.
Trump has repeatedly denied McDougal’s allegations, as well as a similar allegation of an affair with porn star Stormy Daniels, and the White House has said he has done “nothing wrong” regarding the hush money payments.

Report: Trump Team Preparing Mueller Probe ‘Counter-Report’

Image: Report: Trump Team Preparing Mueller Probe 'Counter-Report'
Special counsel Robert Mueller (J. Scot

President Donald Trump’s legal team is putting together a “counter-report” in an effort to undermine the credibility of special counsel Robert Mueller’s Russia probe, The Daily Beast reported Thursday. Trump’s personal attorney Rudy Giuliani told the news outlet part of the report would examine if the “initiation of the investigation was . . . legitimate or not.” Giuliani said the “counter-report” has been in the works since late July, and Trump “knows it is part of our [legal] strategy, and he’s happy with it,” The Daily Beast reported. He also acknowledged the entire process could be derailed by developments in the Mueller investigation. “It may all be for naught, because they may subpoena [the president], and then we’d have to turn our attention to fighting the subpoena,” Giuliani said.Giuliani said the report will be in two sections.

  1. One will seek to question the legitimacy of the Mueller probe generally by alleging “possible conflicts” of interest by federal law enforcement authorities.
  2. The other section will respond to allegations of Trump campaign collusion with Russian government agents to sway the 2016 election, and obstruction of justice allegations stemming from, among other things, the president’s firing of former FBI Director James Comey, the news outlet reported.

Giuliani told The Daily Beast the task is a challenge since they do not know what Mueller’s report will look like. “Since we have to guess what it is, [our report so far] is quite voluminous,” he said, adding that he’ll spend the Labor Day weekend “paring it down” and he was editing the document created by the “whole team.” “It’ll be our report, put out on . . . personal stationary, and it would be in response to their report,” the former New York City mayor told The Daily Beast, adding: “We may have to use it in court, or [send to] Congress.” He also told the news outlet everything in the report is already available to the public. “I don’t think there’s anything in it that isn’t publicly available in some form or another,” he said. “There is no [secret] grand jury material here . . .” Giuliani told The Daily Beast he expects a preliminary draft will be “in pretty good shape by next week.”

Labor Day gas prices hit 4-year high — and probably won’t drop much after the holiday

A customer pumps gasoline into his car at a service station in San Francisco.
Getty Images A customer pumps gasoline into his car at a service station in San Francisco.

The summer driving season will end much like it began, with American motorists paying the highest price at the gasoline pump in four years. Gas prices have barely budged this summer, with the national average for regular gasoline hovering around $2.85 a gallon since mid-June. That’s down slightly from a high of nearly $3 at the end of May, but it’s still about 43 cents a gallon more than drivers paid at this time last year. Analysts warn that Americans shouldn’t expect much relief beyond Labor Day “I’m expecting towards the latter half of September gasoline prices will come off 10 cents a gallon,” said Andrew Lipow, president of Lipow Oil Associates. “I think that they will be a little bit more elevated than in previous years.” Analyst say that’s largely due to looming U.S. sanctions on Iran, the world’s fifth biggest oil producer. The Trump administration is pressuring oil buyers to stop importing crude from Iran by November, right around the time gasoline costs usually fall. The prospect of losing the Iranian barrels is supporting the oil price, which accounts for about half of the cost of gasoline. To be sure, it’s not uncommon for Americans to pay as much or more for gasoline on Labor Day weekend as they paid on Memorial Day. What’s different this summer is just how little the cost has fluctuated. “It’s been a flatline,” said Tom Kloza, global head of energy analysis at Oil Price Information Service. “It’s been like watching grass grow in terms of watching the national numbers. We haven’t even seen much regional volatility.” Gasoline prices have swung just 13 cents from peak to trough between June and August, according to GasBuddy. That’s the smallest change in the nation average since the summer of 2010. The culprit behind the sleepy summer is a rangebound oil market, analysts say. U.S. crude oil has been stuck between about $65 and $75 a barrel over the last three months. Luckily for drivers, U.S. crude didn’t stick around $75 long enough to boost gas above $3 a gallon, said Patrick DeHaan, senior petroleum analyst at GasBuddy. But it also hasn’t lingered at the bottom of the range long enough to send gasoline prices much lower. “Most stories that have pushed the price of oil up or down are counter-balanced within a few days or a week,” he said. “There hasn’t been a breakout either way.”

Oil market being kept afloat on headlines, says expert
Oil market being kept afloat on headlines, says expert 8:24 AM ET Tue, 28 Aug 2018 | 02:42
Looming U.S. sanctions on Iran and continued strong demand have put a floor under oil prices. Meanwhile, gains have been capped by rising output from the United States and a pledge by OPEC, Russia and other producers to pump more oil.

Trump tweets out early-morning attacks on CNN, books, baselessly claims NBC News ‘fudged’ his Comey interview

President Trump went on an early-morning Twitter tirade against his favorite media punching bags Thursday, first claiming that CNN’s “hatred and extreme bias” against him has “made them unable to function,” and suggesting that AT&T fire Jeff Zucker (“Little Jeff Z”) because “his ratings suck.” Trump then said NBC News was actually “the worst,” predicting that NBC News Chairman Andy Lack “is about to be fired (?) for incompetence” — the rumors are actually that he’s in trouble due to Matt Lauer’s sexual misconduct and other #MeToo scandals — and made a curious, apparently unsubstantiated claim that NBC News “fudged” the interview where Trump admitted on national TV that he fired FBI Director James Comey because of the Russia investigation.

Trump concluded by throwing “fake books” into the media bonfire and declaring that all media are the “Enemy of the People!” NBC News political director Chuck Todd seems to be subtweeting the president here, and suggesting you avert your eyes in embarrassment.

Certainly, taking the occasional break from the Twitter machine is good for everybody’s mental health. Peter Weber

Argentina’s Peso Plunges to Record Low

President Mauricio Macri announced request to speed up $50 billion IMF bailout, spooking investors
A man protests the policies of Argentine President Mauricio Macri outside a currency exchange office in Buenos Aires Wednesday, as the peso lost 7.5% against the dollar.
A man protests the policies of Argentine President Mauricio Macri outside a currency exchange office in Buenos Aires Wednesday, as the peso lost 7.5% against the dollar. Photo: Natacha

Argentina’s peso fell to a record low against the dollar Wednesday after President Mauricio Macri said that he has asked the International Monetary Fund to speed up delivery of a $50 billion bailout package.

The financing would allow the government to bolster public confidence and return to a growth path, Mr. Macri argued in a televised address. His announcement spooked investors, who pushed the currency to a fresh low against the dollar. The market is concerned that there might be something the government knows that they don’t know regarding their finances,” said Jorge Mariscal, emerging markets chief investment officer at UBS Global Wealth Management. The Argentine peso lost 7.5% against the dollar Wednesday and has fallen nearly 50% over the past year as risk-averse investors flee developing countries with high external funding needs. Turkey and Argentina’s currencies have seen some of the most selling, on concerns that higher U.S. yields will pressure countries that have borrowed heavily in dollars in recent years.

“Argentina has performed worse than Turkey this year on the dollar [debt] side, which is astonishing when they’ve done everything that an orthodox economist would ask them to do,” said Jim Barrineau, head of emerging market debt at Schroders.

Argentina has used its foreign currency reserve to finance its deficit rather than to shore up the peso. The government has also raised interest rates to 45% to try to slow the currency’s fall and turned to the IMF for a loan large enough to meet three years of financing needs. The fall in the currency was spurred by the stigma liquidity facilities have carried since the last banking crisis, said Ed Al-Hussainy, a senior analyst with the global rates and currency team at Columbia Threadneedle Investments, which holds more Argentine hard currency debt than its benchmarks. “We knew they had obtained $50 billion over three years, we knew they were going to use it, but the moment they requested this little acceleration, the stigma attached to it suddenly triggered the selloff,” he said.  If inflation rises faster than wages, Moody’s said, Argentine citizens will struggle to make their debt payments. Nick Note: Do not let them shit you. If you got a retirement account with with a company or Fidelity Or Black Rock or any of the retirement pool operators you are screwed. They are chock full of WORTHLESS Argentinian debt.. And throw in worthless Venezuelan debt and to be sure your broke in your retirement chock full of soon to be shit Brazilian debt.

Trudeau: NAFTA deal possible by Friday, but only if good for Canada

Trudeau: NAFTA deal possible by Friday, but only if good for Canada
© Getty Images

Canadian Prime Minister Justin Trudeau said Wednesday that a deal to rework the North American Free Trade Agreement (NAFTA) may be possible by the United States’ Friday deadline, but that he’d rather leave the table than accept a subpar proposal. “We recognize that there is a possibility of getting there by Friday, but it is only a possibility, because it will hinge on whether or not there is ultimately a good deal for Canada,” Trudeau told reporters, according to Reuters.

“No NAFTA deal is better than a bad NAFTA deal,” he added.

Canadian Foreign Minister Chrystia Freeland engaged in trade talks in Washington on Tuesday, after a trade agreement between the U.S. and Mexico was announced on Monday.Freeland’s spokesperson, Adam Austen, said the announcement was “encouraging.” However, the Financial Post reported that Freeland said earlier Wednesday, “When it comes to specific issues, we have a huge amount of work to do this week at the ministerial level and also the officials are really grinding through extensively.” President Trump spoke about the negotiations in similarly tempered tones on Tuesday. “We’ll see if Canada can be part of deal,” he said. If Canada does not sign on to the trade deal, the president threatened to impose tariffs on Canadian auto imports. “I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in,” Trump said. “It’s a tremendous amount of money and it’s a very simple negotiation. It could end in one day and we take in a lot of money the following day.” Trump vowed to renegotiate the 24-year-old trade pact between the U.S., Canada and Mexico. On Monday, he suggested that the parties might be close to a new framework after more than a year of negotiations.

Michael Cohen is resigned to going to prison to protect his family

New York (CNN)Michael Cohen’s stunning guilty plea last week ended months of speculation about the fate of President Donald Trump’s longtime personal lawyer. Cohen waits for his sentencing hearing set for December, a source familiar with his thinking says “resignation” would be a fitting word to describe the 52-year-old’s mindset — acceptance that he is headed to prison in order to protect his family. “He’s very resigned to doing the time. He’s resigned to the fact that he’s going to go to jail for some time,” the person said, adding that Cohen does not believe he will receive a presidential pardon from Trump. Cohen’s dramatic downfall — in which he pleaded guilty to eight counts of tax evasion, making false statements to a bank and campaign finance violations in the criminal investigation in New York — represented a staggering public acknowledgment of what some individuals close to Cohen say they’ve privately known for a while: It had become clear that he simply could not keep fighting. One friend of Cohen’s told CNN that over the course of the past few months, they saw Cohen’s outlook on his legal troubles shift. Earlier in the year, “he was very — ‘I’m going to fight this to the death.’ Very defiant,” the friend said. “But I think over a period of time, you get to realize the reality of this. What are you fighting for? And who are you fighting for?” . Prosecutors in New York threatened Trump’s ex-lawyer with numerous more counts that could have also implicated his wife, and also raised the possibility of his assets being seized, according to a separate source familiar with the events leading up to Cohen’s indictment. Trump initially came to Cohen’s defense when the FBI raided Cohen’s hotel room, home and office in April. “I just heard that they broke into the office of one of my personal attorneys. Good man. And it’s a disgraceful situation. It’s a total witch hunt,” he said. But Trump’s tone soon shifted, as he minimized his longtime employee’s work for him over the years and even predicted Cohen would never “flip.” Eventually, Cohen was led to believe that he had been “left on his own.” Cohen’s somber appearance at the federal courthouse in lower Manhattan last week marked a stark contrast from his and his lawyers’ defiant public statements earlier in the year. When news of hush agreements with women to protect Trump from damaging stories about alleged affairs first surfaced, Cohen insisted that he was acting on his own — a clear sign that he was set on protecting Trump — and that he was never reimbursed by the Trump campaign or the Trump Organization. But investigators confirmed that the Trump Organization had, in fact, paid Cohen back. And Cohen even went a step further, explicitly implicating his former boss. He said that it was “in coordination and at the direction of a candidate for federal office” that he worked to keep information that could have harmed the candidate from becoming public during the 2016 campaign.

Cohen’s

Mexico-U.S. accords include Mexican auto export cap: sources

FILE PHOTO: A transport truck carries new Toyota trucks through an inspection station after clearing U.S. customs from Mexico at the border in Otay Mesa near San Diego, California, U.S., April 28, 2017. REUTERS/Mike Blake/File Photo

WASHINGTON/MEXICO CITY (Reuters) – The agreements struck between the United States and Mexico on trade would allow President Donald Trump to impose punitive “national security” tariffs of up to 25 percent on imports of Mexican-made cars, sport utility vehicles and auto parts above certain volumes, auto executives and other sources said. The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), pressuring Canada to accept new auto trade and dispute settlement rules to remain part of the three-way pact. A previously unreported side agreement between the two countries would allow the United States to pursue national security tariffs on annual Mexican car and SUV imports of over 2.4 million vehicles, a number that significantly exceeds last year’s total imports. The side deal would allow national security levies on auto parts imports above a value of $90 billion per year on the same grounds. Mexican Economy Minister Ildefonso Guajardo said on Wednesday the “side letter” protected Mexico’s auto industry and gave it scope to grow before facing any potential national security tariffs. The Trump administration in the coming weeks aims to announce the results of a probe into whether imports of autos and parts pose a national security risk. The study could be used to justify 25 percent U.S. tariffs on automotive imports from North America, Asia and Europe on the premise that protecting the U.S. auto industry is vital to national security under a Cold War-era trade law. Automakers are concerned that the agreement signals the United States might well use national security tariffs to win concessions from the European Union and Japan as well. They have said the tariffs could cost hundreds of thousands of jobs and dramatically raise vehicle prices. A separate side agreement lays out a possible scenario in which the United States increases its normal “most-favored nation” tariffs on autos, currently 2.5 percent. A potential new, unspecified rate would be applied to vehicles that do not meet the existing or revamped NAFTA.

Duty-free auto parts exports from Mexico to the United States could be capped at $90 billion a year under the agreement, said Ann Wilson, senior vice president of government affairs at the Motor and Equipment Manufacturers Association. The figure exceeds current levels, but parts shipments above that quota could be subject to 232 tariffs, Wilson said.

Mexican pickup trucks that do not comply with regional content quotas already pay a 25 percent duty. It was not clear whether they could also be subject to an additional quota. Economy Minister Guajardo said imposing 232 tariffs would be “massively criticized” inside the United States, but that just in case, Mexico had protected its current U.S. export capacity with the “side letter” that also allowed room for growth.

FILE PHOTO: A view of the plant of General Motors in Silao, in Guanajuato state, Mexico, November 9, 2017. REUTERS/Edgard Garrido/File Photo

“On top of that (current export capacity) we put in an additional 40 percent of growth,” he told Mexican radio.

Moises Kalach, head of the international negotiating arm of Mexico’s CCE business lobby, said Mexico had a “fall-back plan” if the 232 tariff was imposed. “But there’s also the possibility that Mexico is exempted from the 232,” Kalach told Reuters.

It is not clear how the quotas would be counted or administered.

The deal also sets quotas for carmakers’ use of U.S.-made steel and aluminum, the sources said. Vehicle components would be subject to regional content quotas at different levels, depending on the type of part or system. Engines and transmissions, the highest-value systems in a vehicle, would have a 75 percent regional content quota, the sources said.

A United States Trade Representative spokeswoman declined to confirm or comment.

The tariff mechanism in the preliminary U.S.-Mexico accord would likely change little for Detroit automakers such as General Motors Co, which builds large Chevrolet Silverado and GMC Sierra pickup trucks at a complex in Silao, Mexico.

However, Asian and German automakers, and automakers and suppliers that want to expand production in Mexico could be at a disadvantage, and be forced to source more production of both vehicles and engines in the United States.

The revised trade agreement is expected to take effect in 2020 and be phased in over five years, the people familiar with the proposal said.

WHAT IS NORTH AMERICAN-MADE?

A cap on Mexican vehicle exports to the United States would push automakers and suppliers to deal with a range of new challenges.

The rules would encourage efforts to certify parts as North American-compliant even if they include content from elsewhere. That could add hundreds of millions of dollars in costs for automakers over the next decade, industry officials said.

The new cap on total vehicle exports could spur a rush for companies to announce additional production capacity in Mexico in the coming months to try to “lock in” space under the cap before the agreement takes effect, auto industry officials said.

The new content rules and a new requirement that 40 to 45 percent of a vehicle be produced by workers earning $16 an hour or more, far higher than current Mexican wages, could lead automakers to try to raise vehicle prices.

The details of the auto trade agreement are critical to automakers and vehicle parts makers.

For example, the Trump administration said wages of U.S.-based engineers could be counted toward the regional content quota – benefiting the Detroit Three automakers and rivals that have established engineering operations in the United States.

Reporting by David Shepardson and David Lawder in Washington, Dave Graham and Ana Isabel Martinez in Mexico City, and Allison Lampert in Montreal; Writing by Joseph White; Editing by Steve Orlofsky and Matthew Lewis

Stunned beachgoers watch as ANOTHER boat full of African migrants washes up in Spain before dozens of young men rush on to shore to cheers

Holidaymakers watched a semi-inflatable carrying around 50 people, including at least 19 children, land on Barrosa Beach, some seven miles from Fontanilla.The migrants, seemingly all young men, dash past beach-goers on their towels as they try to make it off the sands before being caught by authorities. Landing: Video footage shows at least two dozen migrants disembark on the beach of Fontanilla, in Conil de la Frontera, southern Spain after arriving on a boat Some of them even wave to the people enjoying a day out on the beach, who are heard wising them luck, cheering them on and offering them water. The incident took place on the beach of Fontanilla, in Conil de la Frontera, in the southern Spanish province of Cadiz in the region of Andalusia.   According to local media, authorities detained those who had arrived on the boat, of which 13 were minors, shortly afterwards. The incident took place two days after another similar incident on a beach located just a few miles north of Fontanilla. The incident happened near a purpose-built residential and tourist resort called Sancti Petri which boasts shops, restaurants and several four and five-star hotels.  According to local police, some 25 of the migrants, all Moroccan citizens, had been intercepted – 19 of whom were minors. A spokesman for the force said the six adults would be taken to an adult migrant holding centre before being returned to their country of origin as part of an agreement with Morocco. Local media report that at least 500 migrants have landed on the Andalusian coast on 18 different boats since Friday.

Trump, without evidence, blames China for hacking Clinton emails

U.S. President Donald Trump speaks during a meeting with the President of FIFA Gianni Infantino in the Oval Office at the White House in Washington, D.C., U.S. August 28, 2018. REUTERS/Leah Millis

(Reuters) – U.S. President Donald Trump said on Twitter early on Wednesday China hacked the emails of 2016 Democratic presidential candidate Hillary Clinton but did not offer any evidence or further information. “Hillary Clinton’s Emails, many of which are Classified Information, got hacked by China. Next move better be by the FBI & DOJ or, after all of their other missteps (Comey, McCabe, Strzok, Page, Ohr, FISA, Dirty Dossier etc.), their credibility will be forever gone!” he tweeted a little after midnight on Wednesday. Trump said in an earlier tweet on Tuesday night: “China hacked Hillary Clinton’s private Email Server. Are they sure it wasn’t Russia (just kidding!)? What are the odds that the FBI and DOJ are right on top of this? Actually, a very big story. Much classified information!” Speaking in Beijing, Chinese Foreign Ministry spokeswoman Hua Chunying said such accusations were nothing new. “This isn’t the first time we’ve heard similar kinds of allegations,” Hua told a daily news briefing. “China is a staunch defender of cybersecurity. We firmly oppose and crack down on any forms of internet attacks and the stealing of secrets,” she added, without specifically mentioning Trump or Clinton in her answer. U.S. intelligence officials have said Russia orchestrated the hacking of Democratic officials to meddle with the 2016 presidential election. A U.S. federal grand jury indicted 12 Russian intelligence officers in July on charges of hacking the computer networks of Clinton and the Democratic Party. Special Counsel Robert Mueller is investigating Russia’s role in the 2016 election and whether the campaign of Republican candidate Trump colluded with Moscow. Russia denies meddling in the elections, while Trump has denied any collusion. Trump said in April 2017 China may have hacked the emails of Democratic officials to meddle with the 2016 presidential election. He also did not provide any evidence backing his allegation at that time. China has repeatedly denied any accusations of involvement in overseas hacking attacks. China and the United States, whose ties are often fraught, are also currently in the midst of an increasingly bitter trade war.

U.S. Congress skeptical of Trump’s Mexico trade deal

WASHINGTON (Reuters) – President Donald Trump’s trade deal with Mexico could struggle to win approval from Congress unless Canada comes on board, lawmakers from both parties said on Tuesday, saying support from Democrats would be needed to pass a purely bilateral deal. Trump unveiled the Mexico deal on Monday and threatened to slap tariffs on Canadian-made cars if Canada did not join the revamp of the trilateral North American Free Trade Agreement (NAFTA), which Trump has long criticized. If Trump, a Republican, tries to get the Senate to vote in favor of a bilateral deal as a replacement for NAFTA, he will face an uphill struggle to win passage, lawmakers said. Some lawmakers said only a trilateral pact would be eligible for fast-track, 51-vote Senate approval. A bilateral deal, on the other hand, would need 60 votes and that would require some support from Democrats, who likely would be reluctant to help Trump, they said. There are now 50 Republican-held seats in the 100-member Senate. To get fast-track Senate ratification, “the administration must also reach an agreement with Canada,” said Republican Senator Pat Toomey in a statement. “NAFTA was a tri-party agreement only made operative with legislation enacted by Congress,” said Toomey, a member of the committee that oversees trade policy. “Any change, such as NAFTA’s termination, would require additional legislation from Congress. Conversion into a bilateral agreement would not qualify for … ‘fast track’ procedures and would therefore require 60 votes in the Senate.” The White House did not immediately respond to a request for comment about fast-track treatment for the Mexico deal. Canada’s top trade negotiator arrived in Washington on Tuesday for talks with her Mexican and U.S. counterparts, in a bid to remain part of the trade pact. Democratic Senate Leader Chuck Schumer said a bilateral deal would face “serious legal concerns,” while he also questioned a lack of details on the terms of the Mexico pact.

“I’m a little worried that this one is like North Korea. They have a nice announcement, but then we don’t see the details,” Schumer told reporters in a Capitol hallway. U.S. stock markets surged on Monday after Trump said he had reached an understanding with Mexico.

On Tuesday, stocks had given up some of their early gains by the closing bell. Senator Ron Wyden, the senior Democrat on the trade committee, said: “We know very few details right now. There are real questions about whether this is even enforceable … We are far from being done on this and the fact is you cannot really move this substantively without the Canadians.” In the House of Representatives, Democrat Bill Pascrell urged Republicans in a statement to convene a bipartisan House trade council to advise the White House.

Trump: Facebook, Twitter, Google are ‘treading on very, very troubled territory and they have to be careful’

President Trump accuses Google of rigging search results

President Donald Trump doubled down on threats against Facebook, Twitter and Google Tuesday afternoon, saying the social platforms are “treading on very, very troubled territory and they have to be careful.” “Google has really taken advantage of a lot of people and I think that’s a very serious thing and it’s a very serious charge,” Trump told reporters after a meeting with the president of FIFA. “They better be careful because they can’t do that to people.” A Twitter spokesperson, when asked to respond to Trump’s comments, pointed to previous statements and congressional testimony denying any form of conservative bias on the platform. A spokesperson for Facebook did not immediately return request for comment. Trump earlier Tuesday accused Google of altering search results to prioritize negative coverage and left-leaning outlets and warned that the issue “will be addressed.” Trump said in a tweet that the tech giant’s search engine had “rigged” news story results to show mostly “bad” stories about him and other conservatives. “Google search results for ‘Trump News’ shows only the viewing/reporting of Fake New Media,” the president said. “In other words, they have it RIGGED, for me & others, so that almost all stories & news is BAD. Fake CNN is prominent. Republican/Conservative & Fair Media is shut out.” Trump added: “Illegal? 96% of … results on ‘Trump News’ are from National Left-Wing Media, very dangerous. Google & others are suppressing voices of Conservatives and hiding information and news that is good. They are controlling what we can & cannot see. This is a very serious situation-will be addressed!” Around 11 a.m. ET, Trump deleted the original tweets and reposted practically identical language.

Markets may be signaling rising recession risk: Fed study

SAN FRANCISCO (Reuters) – A narrowing gap between short-term and long-term borrowing costs could be signaling heightened risk of a U.S. recession, researchers at the San Francisco Federal Reserve Bank said in a study published on Monday.The research relies on an in-depth analysis  of the gap between the yield on three-month and 10-year U.S. Treasury securities, a gap that like other measures of short-to-long-term rates has narrowed in recent months.

Several Fed officials have cited this flattening yield curve as a reason to stop raising interest rates, since historically each time it inverts, with short-term rates rising above long-term rates, a recession follows.

The study, published in the San Francisco Fed’s latest Economic Letter, bolsters that view. “In light of the evidence on its predictive power for recessions, the recent evolution of the yield curve suggests that recession risk might be rising,” wrote San Francisco Fed research advisers Michael Bauer and Thomas Mertens. The Fed is expected to continue raising rates for at least the next couple of quarters, though markets expect it to raise rates just once next year, while Fed officials expect to raise them three times.

Trump administration farm bailout to provide $6 billion in initial relief

Soybean farmer Raymond Schexnayder Jr. overlooks his farm outside Baton Rouge, in Erwinville, Louisiana, July 9, 2018. 
Aleksandra Michalska | Reuters Soybean farmer Raymond Schexnayder Jr. overlooks his farm outside Baton Rouge, in Erwinville, Louisiana, July 9, 2018.

With some U.S. farm products getting slammed by retaliatory tariffs, the Trump administration is prepared to start its emergency plan to agriculture starting right after Labor Day in a “three-pronged approach” that will initially include about $6 billion in aid. The U.S. Department of Agriculture said in its announcement that it is authorized to provide up to $12 billion in aid to the agricultural industry. On Monday, though, the department said initial aid will consist of about $4.7 billion in payments to agricultural producers of seven commodities, as well as federal government purchases of up to $1.2 billion in certain “commodities unfairly targeted by unjustified retaliation.” A third part of the aid will consist of up to $200 million in spending to help develop foreign markets for agricultural products. Indiana rep. says farmers happy about Mexico trade agreement, but need deal with Canada and China    Soybean farmers stand to get the biggest share of nearly $4.7 billion in payments in the Market Facilitation Program, which also will provide payments to producers of corn, cotton, dairy, hog, grain sorghum, and wheat starting Sept. 4. The USDA first unveiled the trade mitigation package on July 24 but at the time provided few details. “We always knew that agriculture would be the tip of the spear if other nations decided to retaliate,” said USDA Secretary Sonny Perdue in a conference call with reporters Monday. “We also knew the economic pressure was already there for farmers, even without these unfair trade tariffs.” Soybeans have been hard hit by Chinese tariffs and stand to get up to $3.6 billion in assistance under the Market Facilitation Program. Another $290 million will go to pork, about $277 million for cotton and $156 million for grain sorghum, as well as $127 million for dairy, $119 million for wheat and $96 million for corn. According to Perdue, farmer payments the government will make under its relief plan “will be bifurcated so that we can monitor and factor in events,” such as trade breakthroughs like the U.S. announced Monday with Mexico. “An announcement about further payments will be made in the coming months, if warranted,” he added. Some of the aid from the Trump plan is coming through the authority of the Commodity Credit Corp., a federal agency dating back to the Great Depression. The Market Facilitation Program, which was established under the CCC, will determine the payment rate to farmers of a commodity covered by looking at “the severity of the trade disruption and the period of adjustment to new trade patterns, based on each producer’s actual production,” the USDA said.

McCain Takes Shots At Trump In Farewell Statement

john-mccain-082718-lt.jpg
A farewell statement from the late Senator John McCain, R-Ariz., was read by close friend and former campaign manager Rick Davis on Monday.

McCain’s statement discusses his rewarding life of public service as well as his love for America but also seems to take some parting shots at President Donald Trump.

“We weaken our greatness when we confuse our patriotism with tribal rivalries that have sown resentment and hatred and violence in all the corners of the globe,” McCain wrote.

He added, “We weaken it when we hide behind walls, rather than tear them down, when we doubt the power of our ideals, rather than trust them to be the great force for change they have always been.” McCain, one of the few Republican lawmakers vocally critical of Trump, passed away at aged 81 on Saturday after a prolonged battle with brain cancer. While tributes for the Vietnam War veteran poured in from world leaders and past U.S. Presidents, Trump preferred a brief condolence message on Twitter. Trump has been criticized for his reluctance to mention McCain’s military or political service or include any praise for the Republican lawmaker. In his farewell statement, McCain urged Americans, “Do not despair of our present difficulties but believe always in the promise and greatness of America, because nothing is inevitable here. Americans never quit. We never surrender. We never hide from history. We make history.”

 

 

US crude rises 15 cents, settling at $68.87, as trade worries, rising output cap gains

Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.
Spencer Platt | Getty Images Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.

\Oil prices ticked slightly higher on Monday, pausing after last week’s substantial gains as a committee monitoring a deal between OPEC and non-OPEC producers saw production increasing and a U.S.-China trade war also weighed on sentiment. International Brent crude oil futures rose 37 cents to $76.19 per barrel by 2:29 p.m. ET. U.S. West Texas Intermediate (WTI) crude futures ended Monday’s session 15 cents higher at $68.87 a barrel. Last week, WTI posted a 4.3 percent weekly gain while Brent marked a 5.6 percent weekly increase. Traders said prices pulled back after market intelligence firm Genscape reported that inventories at the Cushing, Oklahoma, delivery hub for WTI rose by about 764,800 barrels from Aug. 21 through Friday.Members of an OPEC and non-OPEC monitoring committee found producers cut their July output by 9 percent more than called for in their output reduction pact, two sources familiar with the matter said. This compared with a compliance level of 120 percent for June and 147 percent for May, meaning participants have been steadily increasing production. The Organization of the Petroleum Exporting Countries and other producers led by Russia agreed in June to return to 100 percent compliance with oil output cuts that began in January 2017. This follows months of underproduction by Venezuela and other producers which cut output by 160 percent of the agreed target.The committee groups representatives from Saudi Arabia, Russia, the United Arab Emirates, Kuwait, Algeria, Venezuela and Oman. Prices have been buoyed in recent weeks by the view that the oil market will tighten when U.S. sanctions targeting OPEC member Iran’s oil exports kick in November. Iran has exported around 2.5 million barrels per day (bpd) of crude oil so far this year. Most analysts expect this figure to fall by at least 1 million bpd once sanctions kick in.

“While the Iranian sanctions issue certainly isn’t new news, suggestions out of the White House that waivers will be restricted appeared to augment last week’s price gains,” said Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

In a phone call to French President Emmanuel Macron, Iranian President Hassan Rouhani said on Monday that Iran wanted the Europeans to give guarantees on banking channels and oil sales as well as in the field of insurance and transportation, according to the state-run Iranian news agency IRNA.Pressuring oil prices have been concerns that  an escalating U.S.-China trade war could slow economic growth and energy demand. China’s Unipec will resume purchases of U.S. crude in October after a two-month halt due to the trade dispute between the world’s two largest economies, three sources with knowledge of the matter said. Hedge funds and other money managers cut their net long, or bullish, WTI futures and options positions in the week to August 21, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The speculator group cut their long positions by 15,723 contracts to 341,132 during the period. Investors also cut their bullish Brent crude net long positions by 11,985 contracts to 324,431 over the same period.

Powell sets Fed’s course with data-based judgment

FILE PHOTO: A cyclist passes the Federal Reserve building in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie

JACKSON HOLE, Wyo. (Reuters) – Federal Reserve Chair Jerome Powell has begun putting his stamp on the U.S. central bank as someone who will rely more on data-informed judgment and less on some of the models and theoretical values that have shaped the Fed’s course in recent years but that Powell has said can be false guides. In doing so he may be laying the groundwork for a longer-than-expected rate-increase cycle, as discussion intensifies among policymakers about what level of borrowing costs is appropriate in an economy that is nearly back to full health. In addition, the full stimulative effects of President Donald Trump’s tax cuts and increased government spending may not yet have presented themselves. On the other hand, while the drag that many businesses fear could result from uncertain trade policy has not materialized, if it does it could force an earlier end to the Fed’s rate-hike cycle. Such two-way concerns are unfamiliar territory for a Fed that under Powell’s immediate predecessors had to focus mostly on just one kind of risk: too-low inflation and sub-par growth. Now, with unemployment at 3.9 percent – below what most economists believe is sustainable — and inflation near the Fed’s 2 percent goal, the economic terrain looks less fragile. In a keynote speech at the Kansas City Fed’s annual symposium here on Friday and in recent congressional testimony, Powell has laid out an approach he sees suitable to that new terrain. It relies on using judgment to balance risks on both sides, and he cautioned against relying too much on roughly estimated variables like the so-called neutral rate of interest. The neutral rate is a theoretical level that in a healthy economy would neither boost nor restrain investment and spending; it can move around over time.

Powell leaned heavily on the idea that policymakers would have to feel their way to their destination, citing incidents from Fed history in which reliance on technical estimation led the central bank astray, while reliance on intuition led to better outcomes.

“It’s an informed intuition,” said Atlanta Fed President Raphael Bostic, who like other regional Fed officials talks with dozens of firms regularly to get a sense of what might show up in economic data in one or two months’ time. With a background in markets and law, that approach may play more to Powell’s strengths, while lessening the influence of technicians who have focused on issues like estimating neutral rates of interest and full employment. Those estimates are based on historical data and may not capture changes to the economy that are in motion but have not yet been seen in the flow of data — the sort of situation that led former Fed Chair Alan Greenspan to argue against rate increases in the late 1990s because he felt rising productivity was not fully seen in government statistics. “We’re getting to a place now where it’s less clear whether we should be worried about weakness in the economy or too much strength,” Bostic said on the sidelines of the symposium, attended by all his fellow Fed policymakers as well as central bank chiefs and economists from around the world. “On some level I think it’s good for us all to be talking about the fact that policy is much more bidirectional in its possibilities.” The recently released minutes from the Fed’s last meeting held an important clue as well, acknowledging that statements about policy in relation to an estimated neutral level “could convey a false sense of precision.” That could be even more of a dilemma at a time when fiscal stimulus and other developments might actually be shifting the neutral rate higher, as many policymakers are beginning to suspect. If that is the case, it would set the stage for the Fed to push rates higher than currently expected while arguing that monetary policy was not yet restricting the economy, but was rather appropriate for its strengths.

Trump says Mexico trade deal near; NAFTA hurdles seen easing

WASHINGTON (Reuters) – President Donald Trump said on Saturday that the United States could reach a “big Trade Agreement” with Mexico soon as the incoming Mexican trade negotiator signaled possible solutions to NAFTA energy rules and a contentious U.S. “sunset clause” demand. Trump tweeted on Saturday morning that the United States’ “relationship with Mexico is getting closer by the hour. Some really good people within both the new and old government, and all working closely together….A big Trade Agreement with Mexico could be happening soon!” Jesus Seade, who will serve as chief negotiator for Mexico’s next government, said he and U.S. Trade Representative Robert Lighthizer were now discussing a periodic review process that spare the North American Free Trade Agreement from automatic expiration unless new terms were agreed. Mexico and Canada have adamantly opposed the U.S. sunset demand that would kill the pact unless it is renegotiated every five years, a plan that business groups also say will stifle long-term investment decisions. “It’s going to come out. It’s no longer what the United States was putting first in any way,” Seade said of the sunset clause outside the U.S. Trade Representative’s office. Seade said he and Lighthizer last week began discussing a new approach to review the trade pact, that would have longer periods between reviews, providing more certainty for business investments. A spokeswoman for the U.S. Trade Representative’s office denied that Lighthizer had softened his position on the sunset clause, without further elaboration. The sunset issue is one of the biggest remaining obstacles to a NAFTA deal as negotiators race to try to land a new NAFTA agreement in principle by the end of August. The United States and Mexico have been holding bilateral talks aimed at resolving their differences before bringing Canada back to the talks. Seade said the issue of auto sector rules is “basically resolved,” although some aspects, including time frames, are still being discussed. Seade also said on Saturday that a “correct focus” on NAFTA’s energy chapter has already been substantially agreed. Since Mexico’s July 1 presidential election, the Mexico-U.S. talks have been complicated by divisions between the incoming and outgoing Mexican administrations over energy policy. The team of leftist Mexican president-elect Andres Manuel Lopez Obrador has resisted enshrining the 2013-14 opening of the oil and gas sector enacted by outgoing president Enrique Pena Nieto in the new NAFTA, people close to the talks say. Lopez Obrador opposed Pena Nieto’s energy reform, and the issue is divisive within his own camp. Business-friendly aides back greater outside investment in the industry, while his more nationalist allies want the oil to remain in Mexican hands. Asked about Trump’s tweet, Mexican Economy Minister Ildefonso Guajardo acknowledged some progress, but told reporters in Washington before beginning another day of talks that the two countries are “not there yet.” “Nothing is done until everything is truly done,” he said. “Today will be an important day.” Trump prompted the NAFTA revamp more than a year ago, complaining the pact has benefited Mexico to the detriment of U.S. workers and manufacturing. He made renegotiating NAFTA one of his top campaign pledges.

John McCain: Vietnam veteran and six-term senator dies at 81

Media captionJohn McCain: US war hero, maverick and political titan

Senator John McCain, the Vietnam war hero turned senator and presidential candidate, has died aged 81. Mr McCain died on Saturday in Arizona surrounded by his family, a statement from his office said. He was diagnosed with an aggressive brain tumour in July 2017 and had been undergoing medical treatment. His family announced on Friday that Mr McCain, who left Washington in December, had decided to cease treatment. His widow, Cindy, tweeted: “My heart is broken. I am so lucky to have lived the adventure of loving this incredible man for 38 years. He passed the way he lived, on his own terms, surrounded by the people he loved, in the place he loved best.” Mr McCain’s daughter Meghan said the task of her lifetime would now be “to live up to his example, his expectations, and his love”.Following news of his death, wellwishers waving flags lined the street as a hearse brought Mr McCain’s body from his ranch in Sedona, Arizona, to a funeral home in Phoenix.  The six-term senator for Arizona and 2008 Republican presidential nominee was diagnosed after doctors discovered his tumour during surgery to remove a blood clot from above his left eye last July. His family said he would lie in state in Phoenix, Arizona, and in Washington DC before a funeral at the Washington National Cathedral and his burial in Annapolis, Maryland. Former presidents Barack Obama and George W Bush are expected to give eulogies. In July last year, just after his diagnosis, he took part in a late-night Senate session and gave the deciding vote – with a thumbs-down gesture – against partially repealing the contentious Obamacare healthcare law. The move reportedly infuriated Mr Trump. Mr McCain also criticised President Trump’s hard-line rhetoric on illegal immigration and his attacks on the media.

Trump’s War on the Justice System Threatens to Erode Trust in the Law

Legal experts say President Trump is directly undermining processes that are the foundation of the nation’s rule of law.CreditCreditGabriella Demczuk for The New York Times

 

WASHINGTON — It is a once-unimaginable scenario: Sometime soon in an American courtroom, a criminal defense lawyer may argue that the prosecution of an MS-13 gang member is a politically motivated “witch hunt” built around a witness who has “flipped” and taken what the lawyer calls a plea deal of dubious legality. He will be quoting the president of the United States. That is potentially the gravest danger of President Trump’s sustained verbal assault on the country’s justice system, legal experts say. In his attempt at self-defense amid the swirl of legal cases and investigations involving himself, his aides and his associates, Mr. Trump is directly undermining the people and processes that are the foundation of the nation’s administration of justice. The result is a president at war with the law. “You are dealing with a potentially indelible smearing of our law enforcement institutions,” said Neal K. Katyal, who was acting solicitor general under President Barack Obama. “If Trump’s views were actually accepted, there would be thousands of criminals who are out on the streets right now.” The president’s public judgments about the country’s top law enforcement agencies revolve largely around how their actions affect him personally — a vision that would recast the traditionally independent justice system as a guardian of the president and an attack dog against his adversaries. For more than a year, he has criticized the Justice Department, questioned the integrity of the prosecutors leading the Russia investigation, and mercilessly mocked Jeff Sessions, his own attorney general. Mr. Trump continued that pattern on Twitter on Saturday morning, seizing on disputed reports in the conservative news media that the F.B.I. had ignored “thousands of Crooked Hillary Emails” and vowing to get “to the bottom of all of this corruption.” “At some point I may have to get involved!” he warned. But this past week’s stunning legal developments — a conviction for his former campaign manager, a guilty plea by a longtime lawyer for him who implicated Mr. Trump himself in illegal acts, and immunity agreements for two of his closest business associates — appear to have broadened the president’s hostility toward the legal system. In the wake of those developments, the president assailed federal prosecutors for their attempts to “break” Paul Manafort, the former campaign chief who was convicted on eight felony counts, and the president’s lawyers hinted that he might eventually wipe away the case with a pardon. And he lashed out at Mr. Sessions for not taking “control of the Justice Department” and pursuing enemies like Hillary Clinton, prompting a rare rebuke from the attorney general. The most remarkable moment came when Mr. Trump attacked the very notion that prosecutors should try to “flip” witnesses by reaching plea agreements. In an interview on “Fox & Friends,” the president questioned that tool, which has long been considered lawful and essential for prosecutions. “I have had many friends involved in this stuff,” Mr. Trump said. “It’s called flipping, and it almost ought to be illegal.” Former prosecutors and defense lawyers said the president’s embrace of that notion — spread broadly by his bully pulpit and given a measure of validity by the office he holds — is likely to undermine trust in the justice system and weaken the government’s ability to win in court. “How long will it take before a federal criminal defendant claims in court in front of a jury that the president of the United States rejects the legitimacy of cooperating witnesses and so too should jurors?” said Christopher Hunter, a former F.B.I. agent and prosecutor. “If only one juror agrees, a dangerous criminal could walk free.” Mr. Trump’s often cynical view of the American legal system has been shaped by decades of courtroom clashes over his business decisions, his personal behavior and his aggressive pursuit of the presidency. As a young developer in New York, he battled the Justice Department’s claims that he had violated the Fair Housing Act by discriminating against African-Americans. Later, the Securities and Exchange Commission accused him of financial reporting violations at his casinos. The legal system was also the venue for infuriating and embarrassing battles with his former wives. But it has also offered tools with which to bludgeon his business adversaries or — as he is accused of doing during the 2016 presidential campaign — to bury unflattering stories. As Robert S. Mueller III, the special counsel, has investigated his actions for more than a year, the president has waged a relentless campaign to diminish the Justice Department and the F.B.I. in the eyes of the public. After Michael D. Cohen, his longtime personal lawyer, pleaded guilty to campaign finance violations that he said had been directed by Mr. Trump, the president falsely claimed that the violations were not even a crime. And he has criticized federal courts as they have blocked much of his agenda, including his efforts to wield executive authority on immigration, voting and the environment. George T. Conway III, a conservative Washington lawyer who is often critical of the president (and who is the husband of Kellyanne Conway, the president’s counselor), tweeted on Friday that “what everyone should want, and the country needs, is a ‘President’ capable of comprehending what it means to ‘take Care that the Laws be faithfully executed.’ Art. II, § 3.”

Oil rises as China demand resumes, signs that Iran supply curbed

FILE PHOTO: An oil pump jack of Canadian group Vermilion Energy is pictured in Parentis-en-Born, France, October 13, 2017. REUTERS/Regis Duvignau/File Photo

NEW YORK (Reuters) – Oil prices gained more than 1 percent on Friday, ending a run of weekly declines on signs that Iran sanctions may limit global supply and that a trade war may not curb China’s appetite for U.S. crude. Brent crude oil LCOc1 settled up $1.09 a barrel, or 1.5 percent, at $75.82 a barrel. U.S. crude CLc1 was up 89 cents, or 1.3 percent, at $68.72. U.S. crude rose more than 4 percent on the week, after seven consecutive declines, and Brent rose 5.3 percent after three weeks of falling prices. “Both crude markers are on track to end a steady run of weekly declines. This is largely due to a tightening fundamental outlook on the back of looming Iranian supply shortages,” said Stephen Brennock, analyst at London brokerage PVM Oil Associates. Concerns that an escalating trade war between China and the U.S. could slow economic growth and weigh on crude purchases eased slightly after sources told Reuters that China’s Unipec will resume purchases of U.S. crude oil in October, after a two-month halt due to the fight. Worries that Mexico’s incoming administration would not strike a bilateral agreement over NAFTA with the U.S. also weighed on the market, traders said. A dispute over opening up the oil and gas sector is weighing on the talks, Bloomberg reported, citing two people familiar with negotiations. At the same time, concerns about global crude supply intensified with signs that U.S. sanctions on Iran are curbing shipments. The U.S. government reimposed sanctions on Iran this month after withdrawing from a 2015 international nuclear deal, which Washington saw as inadequate for curbing Tehran’s activities in the Middle East and denying it the means to make an atomic bomb. Tehran says it has no ambitions to make such a weapon. Iran is the third-biggest producer in the Organization of the Petroleum Exporting Countries, supplying around 2.5 million barrels per day (bpd) of crude and condensate to markets this year, equivalent to about 2.5 percent of global consumption. “Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 bpd in the first half of August relative to July, which if it holds will exceed most expectations,” U.S. investment bank Jefferies said on Friday. “We expect that by Q4 the market will be dealing with either undersupply, dwindling spare capacity – or both,” it added. Energy consultancy FGE says it expects Iran’s crude and condensate exports to drop below 1 million bpd by mid-2019.

Trump Organization Could Face Criminal Charges From Manhattan D.A.

Michael D. Cohen leaving federal court in ManhattanonTuesday.CreditCreditJeenah Moon for The New York Times

The Manhattan district attorney’s office is considering pursuing criminal charges against the Trump Organization and two senior company officials in connection with Michael D. Cohen’s hush money payment to an adult film actress, according to two officials with knowledge of the matter.

A state investigation would center on how the company accounted for its reimbursement to Mr. Cohen for the $130,000 he paid to the actress, Stephanie Clifford, who has said she had an affair with President Trump, the officials said.

Both officials stressed that the office’s review of the matter is in its earliest stages and prosecutors have not yet made a decision on whether to proceed.

State charges against the company or its executives could be significant because Mr. Trump has talked about pardoning some of his current or former aides who have faced federal charges. As president, he has no power to pardon people and corporate entities convicted of state crimes.

The Trump Organization recorded the reimbursement as a legal expense. But Mr. Cohen, Mr. Trump’s longtime fixer, said on Tuesday that he paid Ms. Clifford, better known as Stormy Daniels, to buy her silence during the 2016 campaign. Federal prosecutors have said the reimbursement payments were for sham legal invoices in connection with a nonexistent retainer agreement. Mr. Cohen, who pleaded guilty to federal campaign finance charges, did no legal work in connection with the matter, prosecutors said. “On its face, it certainly would be problematic,” said one of the officials familiar with the district attorney’s office review, noting that listing the reimbursement as a legal expense could be a felony under state law.Image

The attorney general, Barbara D. Underwood, in recent days sought a referral from the state Department of Taxation and Finance, which is needed to conduct such an inquiry and to prosecute any violations of state tax law it might uncover, the person said. Such requests are seldom denied. The state’s double jeopardy laws do not apply to tax crimes.

Manhattan prosecutors are focused on whether business records were falsified, one of the officials said. That could be charged as a low-level felony, or as a misdemeanor. It’s a misdemeanor for a person or company to make a false entry in a business record or cause one to be made, with intent to defraud. It becomes a felony if it is done to commit or conceal another crime. Court papers in the federal case against Mr. Cohen said he ultimately received $420,000 from the Trump Organization to reimburse him for his $130,000 payment to Ms. Clifford. That is because the Trump Organization included money to cover his taxes on the $130,000, a bonus for him and reimbursement for other campaign expenses. The company, according to the court papers, accounted for the payment as legal expenses and Mr. Cohen issued phony monthly invoices for $35,000 “pursuant to retainer agreement.”

U.S. softens its demand for NAFTA ‘sunset clause’: Mexican official

FILE PHOTO: The flags of Canada Mexico and the U.S. are seen on a lectern before a joint news conference of NAFTA talks in Mexico City
FILE PHOTO: The flags of Canada, Mexico and the U.S. are seen on a lectern before a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico, March 5, 2018. REUTERS/Edgard Garrido/File Photo

 By David Lawder and Sharay Angulo

WASHINGTON (Reuters) – The United States has softened its contentious demand for a NAFTA “sunset clause,” Mexico’s incoming trade negotiator said on Saturday, potentially eliminating a key obstacle to reaching a deal next week to revamp the trade pact. A few hours earlier, President Donald Trump tweeted that the United States could reach a “big Trade Agreement” with Mexico imminently. Jesus Seade, designated chief negotiator of Mexico’s next government, said the new U.S. position would allow a periodic review of the North American Free Trade Agreement, but without an automatic expiration unless renegotiated every five years. “It’s going to come out. It’s no longer what the United States was putting first in any way,” Seade told reporters outside the U.S. Trade Representative’s office. The United States and Mexico have been holding bilateral talks aimed at resolving differences in the NAFTA renegotiation. Canada is also part of the agreement. Trump tweeted on Saturday morning that the United States’ “relationship with Mexico is getting closer by the hour. Some really good people within both the new and old government, and all working closely together….A big Trade Agreement with Mexico could be happening soon!” Asked about Trump’s tweet, Mexican Economy Minister Ildefonso Guajardo acknowledged some progress, but told reporters in Washington before beginning another day of talks that the two countries are “not there yet.” “Nothing is done until everything is truly done,” he said. “Today will be an important day.” Trump prompted the NAFTA revamp more than a year ago, complaining the pact has benefited Mexico to the detriment of U.S. workers and manufacturing. He made renegotiating NAFTA one of his top campaign pledges. Trump has threatened to withdraw from the pact if it is not reworked to the advantage of the United States. The U.S.-Mexico talks for weeks focused on crafting new rules for the automotive industry, which Trump has put at the center of his drive to rework the 24-year-old deal he says has been a “disaster” for American workers. Seade said the issue of auto sector rules is “basically resolved,” although some aspects, including time frames, are still being discussed. Seade also said on Saturday that a “correct focus” on NAFTA’s energy chapter has already been substantially agreed. Since Mexico’s July 1 presidential election, the Mexico-U.S. talks have been complicated by divisions between the incoming and outgoing Mexican administrations over energy policy. The team of leftist Mexican president-elect Andres Manuel Lopez Obrador has resisted enshrining the 2013-14 opening of the oil and gas sector enacted by outgoing president Enrique Pena Nieto in the new NAFTA, people close to the talks say. Lopez Obrador opposed Pena Nieto’s energy reform, and the issue is divisive within his own camp. Business-friendly aides back greater outside investment in the industry, while his more nationalist allies want the oil to remain in Mexican hands.

Manafort tried to get the U.S. military kicked out of Central Asia to help Russia

The convicted felon pushed to get the U.S. evicted from its military base in Kyrgyzstan.

Paul Manafort’s been having a rough week. On Tuesday, he was convicted of eight separate counts of tax and bank fraud, facing potentially decades in prison. Then, on Wednesday, a Russian media report revealed that Manafort had spent time working with a now-sanctioned Russian oligarch, Oleg Deripaska, to further Moscow’s interests in Central Asia — namely, by getting the U.S. booted from the final military base Washington had in the region.

— Adam Weinstein (@AdamWeinstein) August 22, 2018Bank crisis

Continue reading “Manafort tried to get the U.S. military kicked out of Central Asia to help Russia”

Trump says Pompeo won’t go to North Korea, criticizes denuclearization progress

In this handout photograph provided by The Strait Times, North Korean leader Kim Jong-un (L) with U.S. President Donald Trump (R) during their historic U.S.-DPRK summit at the Capella Hotel on Sentosa island on June 12, 2018 in Singapore.  (Photo by Kevin Lim/The Strait Times/Handout/Getty Images)
In this handout photograph provided by The Strait Times, North Korean leader Kim Jong-un (L) with U.S. President Donald Trump (R) during their historic U.S.-DPRK summit at the Capella Hotel on Sentosa island on June 12, 2018 in Singapore. (Photo by Kevin Lim/The Strait Times/Handout/Getty Images)

Washington (CNN)President Donald Trump on Friday nixed plans for Secretary of State Mike Pompeo to travel to North Korea to hold a next round of denuclearization talks, citing insufficient progress on the issue. “I have asked Secretary of State Mike Pompeo not to go to North Korea, at this time, because I feel we are not making sufficient progress with respect to the denuclearization of the Korean Peninsula,” Trump tweeted on Friday. “Secretary Pompeo looks forward to going to North Korea in the near future, most likely after our Trading relationship with China is resolved.” Trump canceled the trip just a day after Pompeo announced his plans to make his fourth visit to Pyongyang next week. There were no plans for a meeting with North Korean leader Kim Jong Un. Trump on Friday also blamed the exchange of tariffs battle between the US and China for the lack of progress on North Korean denuclearization, something he has previously hinted at.”Because of our much tougher Trading stance with China, I do not believe they are helping with the process of denuclearization as they once were (despite the UN Sanctions which are in place),” Trump in one of three tweets Friday afternoon on the issue. Despite the cancellation, Trump sent his “warmest regards and respect” to Kim and said he looks “forward to seeing him soon!”

No-deal Brexit will bring tangle of red tape, Britain warns companies

LONDON (Reuters) – Britain on Thursday told companies trading with the European Union they would face a tangle of red tape, possible border delays and more costly credit card payments if the government fails to negotiate an exit deal before Britain leaves the bloc. Brexit secretary Dominic Raab said he remained confident the two sides would reach a deal, but set out in a series of 25 notes what could change without one. With little more than seven months to go until it leaves the EU on March 29, Britain has yet to reach an agreement with the bloc on the terms of its departure. Prime Minister Theresa May’s plan for a “business-friendly” deal has failed to impress negotiators in Brussels and has been heavily criticised at home. “We have a duty, as a responsible government, to plan for every eventuality,” Raab said. “To do this, we need to have a sensible, responsible and realistic conversation about what a no deal situation really means in practice.” After more than 40 years in the EU, Britain is having to set out its plans for every aspect of life. Around 80 technical notices are expected over the coming weeks, with the first 25 covering everything from the movement of organs, blood and sperm to nuclear regulation and organic food. The guidelines make it clear that companies trading with Europe would face new customs and excise rules and require paperwork covering customs and safety declarations. If Britain left without a deal “the free circulation of goods between the UK and EU would cease,” the guidance said. Chris Goodfellow, who runs logistics group Lockerfreight, said his clients were asking if they needed more staff to handle customs. “My head is spinning and my clients are panicking,” he told Reuters. “My phone has not stopped.” “The companies that only deal with Europe don’t realise how much more work is involved.” Supporters of Brexit say there may be some short-term pain for the British economy but it will prosper in the long-term when cut free from the EU’s rules and regulations. A European Commission spokesman said it was clear that the withdrawal of the UK was going to lead to disruption “with a deal or without a deal. And that’s why everybody, in particular economic operators, needs to be prepared.” The government asked drugmakers to stockpile medicines for six weeks above normal operations – a target the industry said would be challenging – and called for medicines with short shelf-lives to be flown in to the country. The drugs sector is one of the most vulnerable because of uncertainty as to how medicines oversight will function.

S&P 500 and Nasdaq close at record highs as Netflix jumps

Stocks hit all-time highs — these experts break down what investors should do next
 

The S&P 500 and Nasdaq Composite reached all-time highs on Friday as Netflix shares rose. The broader market also climbed after the top Federal Reserve official characterized the U.S. economy as “strong.” The S&P 500 rose 0.6 percent to close at 2,874.69, led by gains in materials and tech. Friday marked the S&P 500’s first record close since Jan. 26. The tech-heavy Nasdaq advanced 0.9 percent and closed at 7,945.98. Netflix rose 5.8 percent on Friday after analysts at SunTrust upgraded the stock, noting it will keep going higher because of its success overseas. The stock has had a strong week, gaining more than 10 percent this week. The Dow Jones Industrial Average jumped 133.37 points to 25,790.35 as DowDuPont outperformed. Fed Chair Jerome Powell delivered a speech at the Jackson Hole Symposium in Wyoming, where leading central bankers met to discuss the future of monetary policy. Powell said he sees “further, gradual” rate hikes moving forward, noting the economy is “strong” and can handle tighter monetary policy. “The market wasn’t sure how hawkish he was going to be,” said Shawn Cruz, manager of trader strategy at TD Ameritrade. “I think the biggest takeaway from the speech is he doesn’t see inflation rising meaningfully above 2 percent, … so a gradual pace of rate hikes is still appropriate.”Fed will get much more cautious on rate path once we get to neutral, says economist   6 Hours Ago | 03:50 The dollar fell to trade 0.6 percent lower against a basket of currencies following Powell’s speech. The greenback’s fall helped boost gold and oil prices, which are both traded in dollars. “The dollar has gone up a bit recently; it’s been a pretty crowded trade,” said Aaron Hurd, senior portfolio manager of currency at State Street Global Advisors. “I think people have been looking for any reason to sell the dollar.” Sentiment was also boosted by strong earnings and solid economic data being reported earlier this week. Retailers Lowe’s and Target reported better-than-expected earnings this week, sending their shares up 9 percent and 5.1 percent, respectively. Target CEO Brian Cornell raved about the state of the economy after the company’s results were released, noting: “There’s no doubt that, like others, we’re currently benefiting from a very strong consumer environment — perhaps the strongest I’ve seen in my career.”

Allen Weisselberg, Longtime Trump Organization CFO, Is Granted Immunity in Cohen Probe

Weisselberg earlier this year was subpoenaed to testify before grand jury
Trump Organization finance chief Allen Weisselberg has been granted immunity by prosecutors.
Trump Organization finance chief Allen Weisselberg has been granted immunity by prosecutors. Photo: JB Miller/Trump Organization

Allen Weisselberg, President Trump’s longtime financial gatekeeper, was granted immunity by federal prosecutors for providing information about Michael Cohen in the criminal investigation into hush-money payments for two women during the 2016 presidential campaign, according to people familiar with the matter. Mr. Weisselberg was called to testify before a federal grand jury in the investigation earlier this year, The Wall Street Journal previously reported, citing people familiar with the investigation. The decision by prosecutors in the Manhattan U.S. attorney’s office to grant immunity to Mr. Weisselberg escalates the pressure on Mr. Trump, whom Mr. Weisselberg has served for decades as executive vice president and chief financial officer of the Trump Organization. After Mr. Trump was elected, he handed control of his financial assets and business interests to his two adult sons and Mr. Weisselberg. Mr. Cohen on Tuesday pleaded guilty to eight criminal charges and told a federal judge that Mr. Trump had directed him during the 2016 campaign to buy the silence of two women who alleged affairs with Mr. Trump, a move that implicated the president in a federal crime. That was the first time Mr. Cohen admitted to coordinating with the president on the hush-money deals, which Mr. Trump denied. Federal prosecutors also granted immunity to another longtime Trump ally: David Pecker, the chief executive of the company that publishes the National Enquirer, which in August 2016 purchased the rights to a former Playboy Playmate’s story of an affair with Mr. Trump. In exchange for immunity, Mr. Pecker met with prosecutors and shared details about payments Mr. Cohen arranged, including Mr. Trump’s knowledge of the deals, according to people familiar with the matter. The Journal couldn’t determine whether Mr. Weisselberg told prosecutors that Mr. Trump had knowledge of the payments.

Trump recently sought his lawyers’ advice on possibility of pardoning Manafort, Giuliani says

President Trump has made many high-profile pardons, and is considering more. Here’s what his pardoning strategy says about his view of the legal system. (Video: Jenny Starrs

President Trump recently asked his lawyers for their advice on the possibility of pardoning Paul Manafort and other aides accused of crimes, his lawyer said Thursday. The subject of pardoning Manafort came as Trump’s former campaign chairman faced multiple charges of bank fraud and tax evasion in an Alexandria criminal case, Trump attorney Rudolph W. Giuliani said in an interview. Trump’s lawyers counseled the president against the idea of pardoning anyone linked to the investigation into Russia’s interference in the 2016 election, according to Giuliani, saying Trump should at least wait until special counsel Robert S. Mueller III has concluded his probe. Giuliani said the president agreed and did not push the issue further. “He said yes,” Giuliani said. “He agreed with us.” Giuliani said Trump was seeking advice in the wake of a spate of pardons he granted earlier this summer, including for a woman whom Kim Kardashian had lobbied the White House to release. Giuliani said he and fellow personal attorney Jay Sekulow had advised waiting to see whether Mueller delivers a damning report that accuses the president of trying to block a federal probe of his campaign’s contacts with Russians. White House press secretary Sarah Huckabee Sanders told reporters Wednesday that she “wasn’t aware” of any discussions of Trump pardoning Manafort and that the topic was “not something that’s been up for discussion.” A senior administration official said the president discussed the pros and cons of granting pardons to Manafort and others linked to a probe of his campaign “a few weeks ago.” Some experts have argued Trump could expose himself to more legal danger if he were to pardon aides who are witnesses in the Mueller probe, because Mueller is examining the president’s own conduct and whether he sought to obstruct justice. Trump has repeatedly decried the government’s treatment of Manafort — who a jury found guilty Tuesday on eight counts of tax- and bank-fraud charges. Manafort refused to cooperate with Mueller investigators seeking his information about the Trump campaign and instead took his chances at trial. On Tuesday, the president told reporters that Manafort was a “good man” and that he felt sorry for him. Trump has admiringly talked about how Manafort did not “flip” on him and was ebullient when Judge T.S. Ellis said that the prosecution only wanted to go after Manafort to get him. Asked about a pardon, one senior White House official said: “What does it accomplish? You pardon him, it doesn’t get rid of the Mueller probe, it causes you more headaches, he still has another trial, you have more Republicans coming after you.”

Jeff Sessions fires back at Trump: DOJ won’t ‘be improperly influenced’ by politics

Attorney General Jeff Sessions fired back against President Donald Trump on Thursday, saying the Justice Department will not be “improperly influenced by political considerations.” Earlier, Trump attacked him on television, asking “what kind of a man is this?” “I took control of the Department of Justice the day I was sworn in, which is why we have had unprecedented success at effectuating the President’s agenda,” Sessions said in the statement, which was posted on Twitter by Justice Department spokesperson Sarah Isgur Flores.

Trump and dump? After Cohen and Manafort headlines, the stock market remains a buy

Getty Images/iStockphoto

Perhaps surprisingly, President Trump’s legal woes haven’t triggered an avalanche of bearish headlines. In fact, recent headlines have been uncommonly balanced: CNBC: “It’s going to take a lot more for the stock market to start caring about Trump’s legal woes” Are Trump’s legal escapades really a non-issue for stocks? To find out, we will take a brief look at an admittedly non-scientific, but nevertheless insightful “indicator” we’ll call headline sentiment. It’s based on the notion that the media usually gets it wrong. It’s early November 2016, just before the election. By my estimation about 9 out of 10 media outlets are rather certain Hillary Clinton will be the next president. Newsweek even printed and shipped (and shortly thereafter recalled) a special edition magazine titled “Madam President.” In the unlikely event of a Trump win, pundits almost unanimously predicted a stock-market correction or crash.Event-based (or news-based) predictions are always flawed, because it requires two correct guesses:

1) The outcome of the event

2) The market’s reaction to the event

My set of indicators led me to the following conclusion (published in the Aug. 28, 2016, Profit Radar Report): “The three most likely interpretations are all bullish. The degree of bullishness varies, but more gains are ahead. The question is not if, but how much and for how long. Any weakness will be bought, perhaps even furiously.” Let’s also not forget that the S&P 500 SPX, -0.17% Dow Jones Industrial Average DJIA, -0.30% Russell 2000 RUT, -0.32% and Nasdaq Composite COMP, -0.13% “were supposed” to crash and burn:

— After quantitiative easing ended in 2014

— When oil prices fell 50% in 2014

— When the Federal Reserve let it be know that interest rates will be rising in 2015

The stock market was much more resilient than most expected. Why that was is discussed here Back to the original question: Will Trump’s legal escapades become an issue for stocks? Here are two points worth considering:

1) Headline sentiment is not nearly is bearish as it was during prior events. It would actually be more bullish for stocks if the media perpetuated a bearish outlook and continued building the wall of worry.

2) On the other hand, stock markets rarely top on big news events. Most big market tops come somewhat surprisingly and not necessarily suddenly.

Conclusion

Based on my unscientific media sentiment indicator, the sentiment surrounding the Michael Cohen, Paul Manafort and Trump trilogy is not bearish enough to be bullish (from a contrarian viewpoint). Nevertheless, some indicators and patterns project a sizeable rally ahead if the S&P 500 can get close (and stay) above 2,875 and the Dow Jones above 25,800. More details about why those levels are important and why they could trigger a massive rally is shown here.

National Enquirer boss and longtime Trump friend David Pecker gets federal immunity in Michael Cohen case

Michael Cohen, former personal lawyer to President Donald Trump, exits from federal court in New York, on Tuesday, Aug. 21, 2018. 
Cohen prosecutors grant immunity to National Enquirer chairman: Dow Jones

The chairman of the company that publishes the National Enquirer was granted immunity by federal prosecutors as part of an investigation into President Donald Trump’s former personal lawyer, Michael Cohen, NBC News reported Thursday. The immunity deal was earlier reported by The Wall Street Journal and Vanity Fair. Details of the agreement were not immediately known. But the Journal reported earlier Thursday that American Media Inc. Chairman David Pecker had given prosecutors details about the president’s knowledge of payments Cohen made to women alleging affairs with Trump. The immunity deal could hold significant consequences for Trump, as Pecker could have as much damaging information about the president as anyone in Trump’s orbit. He and Pecker have been friends since the 1990s, and have appear to remain so after Trump became president — the media mogul even visited the White House last year, according to The New York Times. Pecker has also reportedly used his media holdings to shield Trump when the president was a New York real estate developer and reality television star. Pecker’s publications have defended Trump as a presidential candidate, as well, including a reported effort during the 2016 election to stifle ex-Playboy model Karen McDougal’s allegations of an affair with Trump. Trump has been a public advocate for Pecker, too. In 2013, he tweeted several times urging Time Magazine to hire Pecker as its top executive. “Nobody could bring [the magazine] back like David!” Trump wrote in one of the tweets. Pecker was subpoenaed by federal investigators in April, as were his company and the Trump Organization. The Journal said the subpoenas were served at the same time the FBI raided Cohen’s office and residences, seizing electronics, recordings and thousands of documents.

In a courtroom statement, Cohen said, without mentioning the president by name, that Trump directed him to arrange the payments to two women “for the principal purpose of influencing the election.”

The hush-money deals, which were both made in the run-up to the November 2016 presidential election, formed the foundation of the campaign finance crimes Cohen pleaded guilty to. Though they only named Cohen explicitly, the Justice Department said Tuesday that the “chairman” of “a media company that owns, among other things, a popular tabloid magazine” put Cohen in touch with one of the women, who in October 2016 was paid $130,000 in exchange for her silence about the alleged affair. That woman, porn star Stormy Daniels, is suing Trump and Cohen in California to void the hush-money agreement and speak freely about the alleged tryst. The other woman was McDougal, the former Playboy model paid $150,000 in August 2016 by AMI for exclusive rights to her own story about an alleged dalliance with Trump. In a practice known within the industry as “catch and kill,” the story was never published, allegedly to protect  Cohen had urged one of the publisher’s editors to buy — and bury — McDougal’s story, promising that the company would be reimbursed, prosecutors said. The White House has denied Trump had sex with the two women.

Dollar, bond yields fall as investors weigh Trump woes

NEW YORK (Reuters) – Key U.S. government debt yields slid to six-week lows on a flight to safety and the dollar slid further on Wednesday as investors weighed how a conviction and a guilty plea of former advisers will impact U.S. President Donald Trump. A gauge of global equities rose, lifted by higher energy prices and strong earnings from retailers, on day that Wall Street marked the longest U.S. bull market. That milestone came a day after the S&P 500 stock index set an all-time intraday high. Markets barely budged after the release of minutes from the Federal Reserve’s policy meeting that ended Aug. 1.Futures traders priced in a slightly higher chance that the Fed will increase rates two more times this year. “They are just trying to gauge if there has been any shift in sentiment at the Fed, and it certainly doesn’t seem that way at the moment,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. The White House pushed back forcefully against suggestions that a plea deal struck on Tuesday by Trump’s former lawyer Michael Cohen implicated the president in a crime. Trump was not charged and Cohen’s plea deal does not mean the president has been implicated in anything, press secretary Sarah Sanders said at a White House briefing. Cohen pleaded guilty to charges of tax evasion, bank fraud and campaign finance violations. Also on Tuesday, Trump’s former campaign chairman Paul Manafort was convicted on eight charges. “The potential for President Trump to be impeached didn’t change all that much, and as a result of that the market didn’t over react in this instance to that news,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. Equity investors appeared less concerned about Trump as Wall Street marked what is widely considered a bull market that started in the midst of the global financial crisis a decade ago, which wiped out more than half of the U.S. stock market’s value. The benchmark S&P 500 index has more than quadrupled since the lows of March 2009. Wall Street was mixed, with Nasdaq trading higher but the S&P and Dow industrials lower on a slide in shares of industrials, consumer discretionary and staples.

Russia is still attacking the US and trying to help Trump

Microsoft stops Kremlin-based hackers 01:24

Frida Ghitis, a former CNN producer and correspondent, is a world affairs columnist. She is a frequent opinion contributor to CNN and The Washington Post and a columnist for World Politics Review. The opinions expressed in this commentary are those of the author. (CNN)Just as President Donald Trump was openly pondering the possibility of lifting sanctions against Russia, Microsoft revealed it has uncovered yet another Russian intelligence operation aimed at assaulting America’s democratic institutions and, it appears, at helping Trump. There is no indication that Russia is anything other than very pleased with the result of its 2016 election meddling efforts. Instead of lying low amid the political storm it triggered in the US, Moscow, it seems, is scaling up similar activities to influence the midterm vote in November. Russians targeted Senate and conservative think tanks, Microsoft says This time, however, there is an interesting twist: the hackers went after Republican think tanks, creating false websites made to look like those of the Hudson Institute and the International Republic Institute (IRI) — prominent conservative groups — in addition to a website used by staff in Congress. Putin, not surprisingly, wants to undercut his detractors. And this hacking plan — aimed at Trump critics — suggests that Putin wants to continue helping Trump. When Democrats challenge Trump, it feeds into his narrative; when Republicans do it, it threatens to shrink his already narrow base of support. The Hudson Institute may have come to Russian attention when, during an event there, Director of National Intelligence Dan Coates described Russia as an aggressive force seeking to undermine democracy and divide Americans.Some Hudson Institute fellows were withering in their criticism of Trump’s summit with Putin, with one calling Trump’s behavior during and after the meeting “ludicrous and dishonest.” For its part, the IRI stands for everything Putin is trying to dismantle. Searching its website for “Putin” brings up a menu of articles decrying the Russian president’s repression at home and nefarious tactics abroad. IRI’s board members include, among others, one of Trump’s most effective critics, Republican Senator John McCain.  It is doubtful that Trump will acquiesce.Ahead of the November elections, which could decide the fate of the Trump presidency, Facebook found a new influence campaign that looked very much like the one that inflamed divisions among Americans two years ago

Russia is buying lots of gold to shield it from sanctions

Russia has been selling US government debt and buying gold. A lot of gold.

Official data show the Russian central bank increased its holdings of gold by nearly 29 tons in July, the largest monthly increase since November 2017. The central bank previously added 20 tons in May and 17 tons in June. Its total holdings of the precious metal have increased 37% since the start of 2016, and are now worth an estimated $76 billion. The gold purchases have coincided with a dramatic reduction in the central bank’s ownership of US government debt, which plummeted 84% between March and May to just $14.9 billion. Treasuries now make up only 17% of reserves at Russia’s central bank. Eugene Chausovsky, senior Eurasia analyst at the geopolitical intelligence firm Stratfor, said the gold purchases were designed to decrease Russia’s exposure to the dollar at a time when the relationship with the United States remains tense. Moscow may also be worried that sanctions could prevent it from selling US Treasuries in the future or stop Russian banks from using dollars to conduct transactions.”Russia has an interest in insulating its economy as much as possible from the US dollar in anticipation of stronger US sanctions,” Chausovsky said. Finance Minister Anton Siluanov said earlier in August that Russia would continue to sell US debt in response to sanctions. “We have significantly reduced our investment in US assets,” Siluanov said. “In fact, the dollar, which is considered to be the international currency, becomes a risky tool for payments.While it did not respond to a request for comment on Wednesday, the central bank has previously said it was looking to diversify its portfolio. Russia has surged up the list of countries with the largest gold holdings, surpassing China earlier this year, according to the World Gold Council. The United States is by far the largest holder of gold with 9,000 tons. Economic pressure on Russia has increased since 2015, when western countries hit it with sanctions over its involvement in the conflict in Ukraine. More sanctions were imposed this year after the United Kingdom linked the Kremlin to the attempted murder of a former Russian double agent. The United States has sanctioned several Russian individuals and companies and put tariffs on imports of Russian steel and aluminum. Analysts said that gold stockpiling suggests that Moscow is expecting even more pain. “It highlights the way in which fears about an escalation of sanctions on Russia have increased — and that relatively modest sanctions imposed can have large indirect impacts because institutions and investors begin to anticipate the next steps,” said William Jackson, chief emerging markets economist at Capital Economics. The ruble has slumped from 55 per dollar in February to as low as 70 per dollar last week. Russia’s central bank is rebuilding its foreign reserves following a currency crisis in 2014 and 2015, when it burned through almost $150 billion trying to defend the ruble. Its total reserves are now worth $458 billion, still $66 billion less than before the crisis.

Saudi Arabia has called off Aramco float, report suggests

Saudi Arabia is reported to have cancelled its plans to sell shares in state oil giant Aramco, which had been billed as the largest flotation ever. The group of financial advisers working on a plan to sell 5% of the company domestically and internationally has been disbanded, Reuters reports. The wire service quoted a source suggesting the decision was taken some time ago but is not being announced. Neither Saudi Aramco nor the Saudi Royal Court has commented on the story. Mohammed bin Salman, Saudi Arabia’s Crown Prince, first proposed the share sale early in 2016 as part of his economic reform agenda, to bring western regulation and scrutiny to the company, as well as raising cash to reduce the country’s large budget deficit. At the time he predicted the sale would value Aramco at around $2 trillion (£1.55 tn). The plan was to float shares on both the local stock market in Riyadh, and one of the world’s leading international financial centres. Saudi Aramco ranks as the world’s largest oil and gas business. Forbes Magazine estimates it generates $1bn a day in revenues. Its businesses cover management of the world’s biggest oil fields as well as extensive refining and chemicals operations. With stakes this high, London, Hong Kong and New York competed fiercely to host the initial public offering (IPO). Donald Trump tweeted last year: : “Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!” In London the Financial Conduct Authority changed its rules to make the listing easier, attracting criticism from MPs and from the Institute of Directors who said adapting regulations to accommodate Saudi Aramco could harm the UK’s reputation for good governance. No decision had been taken on where to list the shares. Reuters said it had spoken to four senior industry sources about the plans being scrapped. “The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way – first delay then calling off,” Reuters quoted one as saying. The wire service said financial advisers who had been working on the listing were now focusing on the proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries, according to two of its sources. In late 2017 rumours first emerged that the flotation might be cancelled, and it was suggested that Aramco shares might instead be sold privately to the world’s biggest sovereign wealth funds and institutional investors. Meanwhile there have been suggestions that some members of the Saudi royal family are concerned that a listing in New York may entail legal risks, citing US terrorism legislation that would permit US citizens to sue Saudi Arabia. Some observers have also questioned the high valuation for Aramco.

Cohen willing to tell Mueller about ‘conspiracy to collude’: lawyer

Michael Cohen is willing to speak with Special Counsel Robert Mueller about a “conspiracy to collude” with Russia during the 2016 presidential campaign, his lawyer said on Tuesday night. Cohen — who pleaded guilty earlier on Tuesday to helping President Trump pay hush money to two women — wants to tell Mueller that Trump knew of an infamous 2016 meeting at Trump Tower and the Russian hacking of Democratic institutions before they took place, Lanny Davis told MSNBC. “Mr. Cohen has knowledge on certain subjects that should be of interest to the special counsel and is more than happy to tell the special counsel all that he knows,” Davis told the network. “Not just about the obvious possibility of a conspiracy to collude and corrupt the American democracy system in the 2016 election, which the Trump Tower meeting was all about, but also knowledge about the computer crime of hacking and whether or not Mr. Trump knew ahead of time about that crime and even cheered it on.”

Last month a source told The Post that Cohen was present when Trump was informed by his son Donald Trump Jr. that Russians offered “dirt” on then-candidate Hillary Clinton.

Trump claimed he “didn’t know anything about the meeting” because “nobody told me” about it. During the June 2016 meeting, Trump Jr. was joined by Jared Kushner and former Trump campaign chairman Paul Manafort. The four Russians in the room included a lawyer with Kremlin ties, a businessman who worked for an oligarch and a lobbyist. The Trump Tower meeting is being considered as evidence of the Trump campaign working along with Russians to defeat Clinton.

Paul Manafort found guilty in federal trial

Jurors have reached a verdict on eight counts in the trial of President Donald Trump’s former campaign chief, Paul Manafort.

In a note to U.S. District Court Judge T.S. Ellis, the jurors said they had not reached a consensus on the 10 remaining counts in the bank fraud and tax crimes trial. Manafort, 69, faces another federal trial next month in Washington, D.C., which also stems from special counsel Robert Mueller’s investigation into Russian interference in the 2016 campaign. Mueller’s prosecutors called 27 witnesses to testify against Manafort, and submitted more than 350 exhibits. Manafort’s defense team, in contrast, called no witnesses at the trial in Alexandria, Virginia, and introduced just 12 exhibits into evidence. Among the prosecution’s witnesses was Manafort’s former business associate, Rick Gates, who also had worked on the presidential campaign of Donald Trump in 2016. Gates pleaded guilty earlier this year to conspiracy and making false statements. He has not yet been sentenced. The charges against Manafort and Gates were connected to their consulting work in Ukraine, and not to their work on the Trump campaign.

Dallas Fed president says three or four more rate hikes then ‘assess’ course ahead

Robert Kaplan
Hailey Lee | CNBC Robert KaplanThe Federal Reserve could be nearing the end of its rate-hiking cycle as headwinds build up to economic growth,
Dallas Fed President Robert Kaplan said Tuesday.

As the central bank continues to normalize policy, Kaplan said there likely are three or four more increases ahead for the Fed’s benchmark rate target until it gets to “neutral.” Thepolicymaking Federal Open Market Committee has indicated as many as six more hikes ahead. He said the neutral rate of interest, or one that is neither accommodative nor restrictive, is probably around 2.5 percent to 2.75 percent, compared with the 1.75 percent to 2 percent range where the Fed is currently holding its funds rate. From here, then, “it would take approximately three or four more federal funds rate increases of a quarter of a percent to get into the range of this estimated neutral level,” Kaplan said in an essay on conditions in both the Dallas district and the broader U.S. economy.

Trump: Fed should do what's good for the U.S., according to Reuters

 

“At this stage, I believe the Federal Reserve should be gradually raising the fed funds rate until we reach this neutral level,” he added. “At that point, I would be inclined to step back and assess the outlook for the economy and look at a range of other factors — including the levels and shape of the Treasury yield curve — before deciding what further actions, if any, might be appropriate.” Kaplan’s remarks come as the FOMC is about to release minutes Wednesday from its July 31-Aug. 1 meeting, during which the committee opted against raising rates. However, officials have indicated, and the market expects, that two more increases are likely on the way before the end of the year, followed by three more in 2019 and at least one more in 2020, taking the funds rate to 3.4 percent, well above where Kaplan sees it. Among his concerns are the yield curve, or the spread between rates on various government bonds. When short-term rates get higher than long-term rates, that has been a reliable recession indicator for the past 50 years. While some Fed officials have cautioned against reading too much into a possible inversion, Kaplan said it’s cause for concern. “The longer end of the curve is telling me that, while there is substantial global liquidity and a search for safe assets, expectations for future growth are sluggish — and this is consistent with an expectation that U.S. growth will trend back down to potential,” he wrote. “I do not discount the significance of an inverted yield curve — I believe it is worth paying attention to given the high historical correlation between inversions and recession.” Kaplan also expressed his concern about the current debt level. At $15.7 trillion, the amount of the national debt held by the public is more than 75 percent of GDP; more than 100 percent is generally considered a crisis level.While the tax cuts and additional spending over the past year have created “a fiscal tailwind,” that could “turn into a headwind if the U.S. takes steps to moderate its historically high expected path of debt growth,” he said.

S & P hits record high, equals longest-ever bull run

(Reuters) – The benchmark S&P 500 touched a record high on Tuesday and equaled its longest-ever bull-market run, as U.S. stocks rose on encouraging earnings reports and hopes that the United States and China could resolve their tariff dispute.

The S&P .SPX rose as much as 0.57 percent to a record high of 2,873.23 points, topping its previous record high of 2,872.87 on Jan. 26. The index’s bull-market run is now 3,452 days old and, on Wednesday, will mark the longest such streak in history, at least for some market watchers. Hopes that the United States and China could move closer to settling their trade differences helped the trade-sensitive S&P industrial sector .SPLRCI climb 0.76 percent. The S&P consumer discretionary index .SPLRCD rose 1.15 percent, the most among the 11 major S&P sectors, as TJX rose on strong results and Toll Brothers’ encouraging quarterly report boost shares of homebuilders. “Investors, overall seem more optimistic that the troubles with global trade may get resolved this week,” said Kate Warne, principal and investment strategist at Edward Jones in Des Peres, Missouri. “We’ve seen a continuation of strong earnings and signs of stronger economic growth and you would expect investors to be confident in this kind of an environment and expect stocks to rise.”

Dollar falls, emerging markets rally after Trump’s Fed attack

FILE PHOTO: A U.S. Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration/File Photo

NEW YORK (Reuters) – The dollar weakened on Tuesday after U.S. President Donald Trump slammed the Federal Reserve for raising interest rates, while global equity markets rose as strong economic and earnings growth favored stocks in a relatively benign environment. Wall Street shares rose, following stock market gains worldwide, with the benchmark S&P 500 edging closer to an all-time high. Trump said in an interview with Reuters on Monday that he was “not thrilled” with the Fed under his appointee, Chairman Jerome Powell, for raising rates and that the U.S. central bank should do more to boost the economy. Trump also accused China and Europe of manipulating their currencies. The euro EUR= is down about 3.8 percent so far this year against the dollar, while the Chinese yuan CNY= has slipped 5.1 percent this year against the greenback. “It would appear that Mr. Trump would like to keep the U.S. dollar a little on the weak side in order to remain competitive,” said CMC Markets chief markets analyst David Madden. The dollar index .DXY, which tracks performance against a basket of six major currencies, fell 0.31 percent on Tuesday, and has slid almost 1.2 percent over the past four days, its worst such run since late March. The dollar’s weakness eased the pressure on many emerging markets, which have struggled in recent weeks as worries over Turkey precipitated a selloff in emerging market assets around the globe. Specialist trader Meric Greenbaum works at his post on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 17, 2018. REUTERS/Brendan McDermid Trump, who criticized the Fed when he was a candidate, said in the interview other countries benefited from their central banks’ moves during tough trade talks, but the United States was not getting support from the Fed. “During this period of time I should be given some help by the Fed. The other countries are accommodated,” Trump said

Michael Cohen, President Trump’s former longtime personal attorney, reaches a plea deal

PHOTO: Michael Cohen, former personal lawyer for President Donald Trump, exits the United States District Court Southern District of New York on May 30, 2018 in New York City.
Eduardo Munoz Alvarez/Getty Images Michael Cohen, former personal lawyer for President Donald Trump, exits the United States District Court Southern District of New York on May 30, 2018 in New York City.more

Michael Cohen, President Donald Trump’s former longtime personal attorney, has tentatively reached a plea agreement with federal prosecutors in the Southern District of New York, ABC News has learned. Add Donald Trump as an interest to stay up to date on the latest Donald Trump news, video, and analysis from ABC News. Given Cohen’s proximity to Trump during the past decade, including throughout his meteoric rise from mogul and reality television star to the White House, observers consider him one of most potent legal thorns to confront Trump’s presidency since he took office. “The guy who knows where all the bodies are buried,” said Seth Hettena, an author and veteran journalist who has chronicled Trump’s business career. The investigation into Cohen was referred to New York’s Southern District by special counsel Robert Mueller, and if Cohen agrees to cooperate, the information he provides could benefit the investigation into Russian meddling in the 2016 election. But it remains unclear if he has committed to cooperate. Cohen’s relationship with Trump dates to the mid-2000’s after Cohen, who owned condominiums in multiple Trump buildings in New York, took Trump’s side in a legal dispute with the condo board at Trump World Tower on Manhattan’s East Side. Cohen eventually went to work for the Trump Organization, where he held the positions of executive vice president and special counsel to Donald J. Trump. “Michael Cohen has great insight into the real estate market,” Trump said of Cohen in a 2007 New York Post interview. “He has invested in my buildings because he likes to make money – and he does.” In addition to working inside the Trump Organization as a lawyer and problem solver, Cohen built a diverse portfolio of investments. At one point that included running 260 yellow cabs with a Ukrainian-born partner – a partnership that ended in 2012. He also invested millions in real estate, often turning a tidy profit. For instance, a building he bought in 2011 on the Lower East Side of Manhattan for $2.1 million, sold three years later for $10 million in cash.The FBI raid on Cohen’s home and office in April gave the most significant indication his business dealings could become a legal problem for him. Then in May, Evgeny Friedman, 46, a Russian immigrant known as the “Taxi King,” struck a plea deal that included a commitment to assist federal prosecutors investigating Cohen’s business practices. “The government now has a strong inside witness who can assist in explaining many of Cohen’s business activities and potential fraud schemes, especially when it came to valuing the medallions for loan purposes,” Volkov said at the time. In a Tweet shortly after Friedman’s plea arrangement, Cohen sought to distance himself from Friedman. For more than a decade around the office in Trump Tower – and around New York – Cohen’s loyalty to Trump was unquestioned as he developed a reputation as Trump’s “pit bull.” “It means that if somebody does something Mr. Trump doesn’t like, I do everything in my power to resolve it to Mr. Trump’s benefit,” Cohen said in a 2011 interview with ABC News. “If you do something wrong, I’m going to come at you, grab you by the neck and I’m not going to let you go until I’m finished.” Cohen’s dealings at the Trump family business covers a broad sweep of its global empire – including several projects that have caught the attention of federal investigators. Cohen played an integral role in early discussions about a possible Trump Tower in Moscow – negotiations that were going on during the early months of the 2016 presidential campaign. Cohen has confirmed he attended a lunch meeting with a Ukrainian politician one week after Trump took office, where the two men discussed the potential for Cohen to share a Ukraine peace proposal with his contacts at the White House. “He could be extremely valuable,” said Matthew G. Olsen, a former federal prosecutor and ABC News contributor. “He was not just a personal lawyer but also was President Trump’s so-called fixer for a number of years. So he would have had access to lots of very personal information involving his business dealings.” Cohen’s name appeared repeatedly in the now infamous dossier of unverified allegations, which included salacious claims about Trump, prepared by former British intelligence agent Christopher Steele.

Trump Today: President calls Mueller’s team ‘thugs,’ and ‘national disgrace’

President Donald Trump on Monday attacked lawyers working for the special counsel, and also lashed out at Justice Department official Bruce Ohr as he hosted an event honoring immigration and customs agents.

‘NATIONAL DISGRACE’

On Twitter, the president called lawyers working for Robert Mueller “thugs,” and said the special counsel’s team was “a National Disgrace!” trying to influence the election. It was the latest escalation in Trump’s rhetoric against the probe of Russian interference in the 2016 presidential election. His attack came after the New York Times reported over the weekend that White House lawyer Don McGahn had sat for 30 hours of interviews with Mueller’s team. Trump said McGahn participated at his instruction “Anybody needing that much time when they know there is no Russian Collusion is just someone looking for trouble,” Trump tweeted.

From Alternative Facts to “Truth Isn’t Truth”

(Bloomberg) — “Truth isn’t truth,” Donald Trump’s lawyer Rudy Giuliani said on Sunday in discussing why having the president be interviewed by Special Counsel Robert Mueller for the probe into election interference isn’t a good idea.

When two people, like Trump and former FBI Director James Comey, tell different versions of the same story, “it’s somebody’s version of the truth. Not the truth,” the former New York mayor said on NBC’s “Meet the Press.”

That essentially gives a new twist to old rhetorical saws like “there are two sides to every story” and “he said/she said.” It also echoed the phrase “alternative facts” coined by White House counselor Kellyanne Conway in 2017, to explain why Sean Spicer, then the press secretary, made false claims about the size of the crowd at Trump’s inauguration.

Challenged by NBC correspondent Chuck Todd that “truth is truth,” Giuliani responded, “No, it isn’t truth. Truth isn’t truth.”

“Donald Trump says I didn’t talk about Flynn with Comey; Comey says you did talk about it,” he continued, referring to Trump’s first national security adviser, Michael Flynn. “So tell me what the truth is.”Giuliani said Mueller is “desperate”’ to find something to charge Trump with, and that “I’m not going to be rushed into having him testify so that he gets trapped into perjury.” The president’s legal team has spent months weighing up whether to allow Trump to be interviewed by the special counsel. If Mueller tries to issue a subpoena to Trump before the midterm elections in November, the president’s team will accuse him of trying to interfere because he could have acted sooner, Giuliani said. “Time for Mueller investigation to file report,” Giuliani said Saturday on Twitter. “We will release ours. Don’t interfere with election.” Giuliani, 74, also said that the 2016 meeting at Trump Tower in New York, involving the then-candidate’s oldest son and a Russian lawyer with ties to the Kremlin, was arranged to seek information on Trump’s rival, Democratic candidate Hillary Clinton — but that the participants didn’t know the lawyer was Russian. Nick Note: of course truth is truth and a lie is a lie. If a tree falls in the woods and no one is there to hear it does it make a noise. Of course it does… the most ignorant argument anyone ever made to me when i was in school… That was the day i decided to educate myself … Thank GOD

Cautious optimism for U.S.-China trade talks lifts shares

FILE PHOTO: People walk past an electronic board showing Japan’s Nikkei average outside a brokerage in Tokyo, Japan, March 23, 2018. REUTERS/Toru Hanai

NEW YORK (Reuters) – A gauge of global equity markets rose on Monday on hopes the U.S.-China trade dispute will cool at talks this week, while Turkey’s lira fell anew after cuts to the country’s credit ratings and shots were fired outside the U.S. Embassy in Ankara. Wall Street rose and broad-based gains in Europe and Asia lifted the MSCI’s all-country world index .MIWD00000PUS, which tracks shares in 47 countries. The gauge has recouped last week’s losses sparked by the lira’s plunge, but not declines of the prior week when the Turkish currency began its fall. Mid-level U.S. and Chinese officials are expected to meet later this week in Washington to discuss their trade dispute. But it is unclear whether the talks will have any effect on the implementation of U.S. tariffs and retaliation by China.

“Traders are cautiously optimistic, but just because the meeting has been lined up doesn’t mean anything will come of it,” CMC Markets chief markets analyst David Madden said.

“Some traders view the (recent) weakness in the Chinese stock market and currency as a sign that Beijing will be more accommodating when it comes to negotiations,” he said.

Six days of public hearings on the proposed U.S. duties of up to 25 percent will start Monday in Washington as part of the U.S. administration’s efforts to pressure Beijing for sweeping changes to its trade and economic policies.

Tencent Holdings Ltd (0700.HK) was the biggest contributor to MSCI’s global stock gauge, which rose 0.35 percent, and it was the top gainer on Hong Kong’s Hang Seng index .HSI, closing up 4.1 percent.

FILE PHOTO: A board displaying stock prices is adorned with the Australian Securities Exchange (ASX) logo in central Sydney, Australia, February 13, 2018. Picture taken February 13, 2018. REUTERS/David Gray

The pan-European FTSEurofirst 300 index .FTEU3 closed up 0.57 percent and MSCI’s emerging markets index .MSCIEF gained 1.18 percent.

The Dow Jones Industrial Average .DJI rose 104.81 points, or 0.41 percent, to 25,774.13. The S&P 500 .SPX gained 7.78 points, or 0.27 percent, to 2,857.91 and the Nasdaq Composite .IXIC added 4.22 points, or 0.05 percent, to 7,820.55.

Turkey’s lira TRY=D3 fell to a session low of 6.2 against the dollar and was last down about 2.3 percent.

While the lira late last week clawed back sizable losses after touching all-time lows of just over 7 to $1 a week ago Monday, it has now declined about 26 percent so far in August.

Turkish sovereign dollar bonds fell across the curve on Monday and the cost of insuring exposure to Turkish debt rose after Moody’s and S&P Global lowered their sovereign credit ratings on Friday.

In addition, shots were fired at the U.S. Embassy in Ankara, compounding U.S.-Turkish tensions as a dispute over Turkey’s detention of an American pastor simmered.

CENTRAL BANKS IN SPOTLIGHT

In a week light on economic data, investors are turning their attention to central banks.

0700.HKHong Kong Stock
+13.80(+4.09%)
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  • .FTEU3
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The Federal Reserve will release minutes from its August policy meeting on Wednesday, which will be scrutinized for new signs of whether four interest rate hikes are likely this year.The U.S. central bank is widely expected to raise rates a third time this year in September, though doubts remain over another hike in December.

Fed Chairman Jerome Powell is due to speak on Friday at the annual economic symposium in August in Jackson Hole, Wyoming.

“It’s really going to be all about the minutes and Powell at Jackson Hole on Friday,” said Thomas Simons, a money market economist at Jefferies in New York.

U.S. President Donald Trump complained to donors in New York’s Hamptons about Powell’s rate hikes, according to Bloomberg News, leading the dollar index to a session low.

(GRAPHIC: President Trump on the U.S. dollar –reut.rs/2nRy9V6)

Reuters Graphic

The index .DXY, which tracks the greenback against a basket of currencies, fell 0.16 percent to session lows after the media report, while the euro EUR= rose 0.2 percent to $1.146.

The Japanese yen JPY= strengthened 0.19 percent versus the greenback at 110.32 per dollar.

Benchmark U.S. Treasury 10-year notes US10YT=RR rose 12/32 in price to push yields down to 2.8280 percent, near a four-week low.

U.S. crude CLcv1 rose 47 cents to $66.38 per barrel and global benchmark Brent LCOcv1 56 cents to $72.39.

Donald Trump Complained About Fed Interest-Rate Increases at Fundraiser

Trump worried higher interest rates could cool off the economy

President Trump, speaking at a fundraising event on Friday, said he was unhappy with the Federal Reserve’s recent moves to raise interest rates, people in attendance said. Donald Trump Complained About Fed Interest-Rate Increases at Fundraiser

Trump worried higher interest rates could cool off the economy

President Trump, speaking at a fundraising event on Friday, said he was unhappy with the Federal Reserve’s recent moves to raise interest rates, people in attendance said.

China shifts to Iranian tankers to keep oil flowing amid US sanctions: Report

Tugboats dock the oil tanker "Daniel" carrying crude oil imported from Iran at the Port of Zhoushan in Zhoushan city, east China's Zhejiang province, 8 March 2018. 
Imaginechina | AP Images Tugboats dock the oil tanker “Daniel” carrying crude oil imported from Iran at the Port of Zhoushan in Zhoushan city, east China’s Zhejiang province, 8 March 2018.

Chinese buyers of Iranian oil are starting to shift their cargoes to vessels owned by National Iranian Tanker for nearly all of their imports to keep supply flowing amid the re-imposition of economic sanctions by the United States. The shift demonstrates that China, Iran’s biggest oil customer, wants to keep buying Iranian crude despite the sanctions, which were put back after the United States withdrew in May from a 2015 agreement to halt Iran’s nuclear program. The United States is trying to halt Iranian oil exports to force the country to negotiate a new nuclear agreement and to curb its influence in the Middle East. China has said it is opposed to any unilateral sanctions and has defended its commercial ties with Iran. The first round of sanctions, which included rules cutting off Iran and any businesses that trade with the country from the U.S. financial system, went into effect on Aug. 7. A ban on Iranian oil purchases will start in November. Insurers, which are mainly U.S. or European based, have already begun winding down their Iranian business to comply with the sanctions.

To safeguard their supplies, state oil trader Zhuhai Zhenrong and Sinopec Group, Asia’s biggest refiner, have activated a clause in its long-term supply agreements with National Iranian Oil that allows them to use NITC-operated tankers, according to four sources with direct knowledge of the matter.

They spoke on condition of anonymity as they were not allowed to speak publicly about commercial deals. The price for the oil under the long-term deals has been changed to a delivered ex-ship basis from the previous free-on-board terms, meaning that Iran will cover all the costs and risks of delivering the crude as well as handling the insurance, the sources said. “The shift started very recently, and it was almost a simultaneous call from both sides,” said one of the sources, a senior Beijing-based oil executive. In July, all 17 tankers chartered to carry oil from Iran to China are operated by NITC, according to shipping data on Thomson Reuters Eikon. In June, eight of 19 vessels chartered were Chinese operated. Last month, those tankers loaded about 23.8 million barrels of crude oil and condensate destined for China, or about 767,000 barrels per day. In June, the loadings were 19.8 million barrels, or 660,000 bpd. Iran used a similar system between 2012 and 2016 to circumvent Western-led sanctions which were effective in curtailing exports because of a lack of insurance for the shipments. It was not immediately clear how Iran would provide insurance for the Chinese oil purchases, worth some $1.5 billion a month. Insurance usually includes cover for the oil cargoes, third-party liability and pollution. With the new shipping arrangement, Iranian oil cargoes to China are expected to stay at recent levels through October, said the four sources with knowledge of the tanker changes.

James Comey: ‘Truth Exists and Truth Matters’

Image: James Comey: 'Truth Exists and Truth Matters'
Fired FBI Director James Comey (Alex Brandon/AP) By Brian Freeman

Former FBI Director James Comey sent out a tweet Sunday that “Truth exists and truth matters,” apparently in response to a statement by President Donald Trump’s lawyer Rudy Giuliani earlier in the day that “truth isn’t truth.” Giuliani made his remarks during an interview with NBC News’ “Meet the Press” when he sought to belittle special counsel Robert Mueller’s probe by saying “When you tell me that [Trump] should testify because he is going to tell the truth and he shouldn’t worry, that’s silly, because it’s somebody’s version of the truth. Not the truth.” When interviewer Chuck Todd shot back “Truth is truth,” Giuliani replied, “No, it isn’t truth. Truth isn’t truth.” In his tweet, Comey emphasized “Truth has always been the touchstone of our country’s justice system and political life. If we are untethered to truth, our justice system cannot function and a society based on the rule of law dissolves.” Others were also quick to slam Giuliani’s statement, with Rep. Ted Lieu, D-Calif., tweeting the reasoning of Trump’s attorney “is another step towards authoritarianism.” Lieu added “It also reminds us of Nixon’s defense that ‘when the president does it, that means it is not illegal.'”

Democrats’ Chances of Regaining House Are Improving. But It’s No Sure Bet.

Image: Democrats' Chances of Regaining House Are Improving. But It's No Sure Bet.
House Minority Leader Nancy Pelosi speaks at a press conference at the U.S. Capitol July 23, 2018, in Washington, D.C. (Win McNamee/Getty Images)

Democrats’ prospects for retaking control of the U.S. House have brightened during the past two months, although success in the November election is no sure bet, a CBS News election model released Sunday shows. If the election were held today, Democrats would win 222 seats in the House, up from 219 in June, according to CBS’s model, which is based on voter surveys in 57 competitive congressional districts. The estimate had a margin of error of plus or minus 11 seats. A party needs 218 seats to control the House, and Democrats would need to win at least 23 additional seats in the midterm elections to wrest power from Republicans. Voters surveyed said they view the 2018 election as especially important, perhaps suggesting an outsize turnout in November compared with other off-year elections. Seventy-six percent of respondents said they would definitely vote in the midterms. Women were even more likely to see 2018 as a pivotal year, according to CBS. Almost nine out of ten women polled said their 2018 vote will be at least as important as that in a presidential election, with one in five saying it’s more important. Most women said President Donald Trump will be a factor in their vote, with more expressing opposition to him than support, 39 percent to 30 percent, the poll found. Democratic and independent women were twice as likely as Republican women to say this year’s election is even more important than a presidential election. YouGov, an online polling company, conducted the survey of 4,989 registered voters on behalf of CBS from Aug. 10-16. The margin of error was plus or minus 1.8 percentage points © Copyright 2018 Bloomberg News. All rights reserved.

Omarosa: Trump ‘Wants to Start a Race War in This Country’

Sunday on MSNBC’s “PoliticsNation With Al Sharpton,” former White House staffer and “Apprentice” contestant Omarosa Manigault

Newman claimed President Donald Trump wanted to start a “race war.” Manigault Newman said, “Every single time he had some type of issue with the community, I was there. I was the person in the room that could take him to task on that. The one thing I realized once I was there was he was disingenuous to his commitment to diversity.” She added, “There is really no real commitment to diversity in the White House, and he’s unapologetic about it because he’s completely contradicted the commitment he made when he did that campaign of what do you have to lose? Well, clearly, we have to lose a voice, an advocate, someone who understands the issues and knows how to reach out to the community. We have a lot to lose. In fact, we’re losing right now because Donald Trump is disingenuous about his engagement and his outreach. And in fact, I believe he wants to start a race war in this country.” Sunday on MSNBC’s “PoliticsNation With Al Sharpton,” former White House staffer and “Apprentice” contestant Omarosa Manigault Newman claimed President Donald Trump wanted to start a “race war.” Manigault Newman said, “Every single time he had some type of issue with the community, I was there. I was the person in the room that could take him to task on that. The one thing I realized once I was there was he was disingenuous to his commitment to diversity.” She added, “There is really no real commitment to diversity in the White House, and he’s unapologetic about it because he’s completely contradicted the commitment he made when he did that campaign of what do you have to lose? Well, clearly, we have to lose a voice, an advocate, someone who understands the issues and knows how to reach out to the community. We have a lot to lose. In fact, we’re losing right now because Donald Trump is disingenuous about his engagement and his outreach. And in fact, I believe he wants to start a race war in this country.”

Greek bailout ends, but fears remain for eurozone debt

© Kostis Ntantamis / AFP | File phot

Greece officially emerges from its bailout program on Monday, after eight years of cutbacks enforced in return for massive loans and an economic collapse on the scale of the Great Depression.

The exit is a welcome milestone. But it offers little assurance that the 19-country euro currency union has left behind its problems with debt. The huge debt pile in Greece and an even bigger one in Italy will remain a lurking financial threat to Europe that could take a generation to defuse. Europe’s debt problems have repeatedly raised fears over the past decade of a break-up in the euro, a worst-case scenario that would cause severe economic damage in the region and shake world financial markets and trade. In Greece, successive governments had borrowed heavily for three decades to fund generous spending on jobs given to political supporters, while tolerating widespread tax evasion and covering up budget shortfalls. All that blew up mightily in October 2009, when Greece admitted its budget deficit was much bigger than previously reported. Shocked investors no longer would risk loaning Greece money at affordable rates, forcing the government to turn to rescue loans from the other eurozone countries and the International Monetary Fund. The loans came with tough conditions: closing deficits, which led to aggressive tax increases and spending cuts; and a raft of reforms aimed at improving tax collection and the business climate in general. The economy, hit hard by spending cuts, shrank by a quarter.

Greek debt stands at €322 billion

All told, Greece now owes total debt of 322 billion euros ($366 billion), or over 180 percent of annual economic output. Of that, 256.6 billion euros is owed to eurozone creditors and 32.1 billion to the International Monetary Fund. In 2012, about 107 billion euros in debt was lopped off by inflicting losses on private bondholders. Monday is the day the third and last bailout program expires, meaning no more money is available. Greece will remain subject to quarterly visits by technical experts to make sure it is meeting agreed targets for public finances until the last bailout loan is repaid, in 2060. The other eurozone countries gave Greece enough cash to cover 22 months of financing needs and significantly eased its debt repayment terms. Greece needs to pass the quarterly reviews to activate that debt relief. But Greece will get no new reform requirements. Some experts say that the best way to help Greece would be for eurozone countries to write off a part of the loans altogether. But governments have balked at that. The bailouts were unpopular, particularly in Germany, and loan forgiveness would be a tough sell for leaders such German Chancellor Angela Merkel. George Pagoulatos, a professor at the Athens University of Economics and Business, says that in the end the country’s creditors may have to lower their expectations for how much Greece can save.pro Italy’s slow growth since joining the euro has meant that the eurozone’s third-largest member has failed to work down the huge debt burden it carried into the currency union when it joined as a founding member in 1999. It remains at an elevated 133.4 percent of GDP, the second highest after Greece. Officials associated with the coalition between the populist 5 Star Movement party and the anti-immigration League have made comments about leaving the euro and criticized the European Union’s rules limiting debt and deficits. That has raised fears of a new debt crisis.

Eurozone officials have set up ways to protect the currency union in a crisis. One is to have the European Central Bank offer to buy bonds of countries with excessive borrowing costs. But that requires signing up for a plan to reduce the public deficit, and that appears to be the last thing the current government would do. The most drastic alternative would be for Italy to leave the euro.

Guntram Wolff, director of the Bruegel research institute in Brussels, says Italy’s debt situation is different from Greece’s, in that most Italian bonds are in the hands of Italians. That means the governments’ debt payments stay at home to support spending and investment by Italians.

Panetta: Trump May Not Have Had the Authority to Revoke Brennan’s Security Clearance

 

19 Aug 2018196

Sunday on CBS’s “Face the Nation,” former CIA director Leon Panetta said that President Donald Trump might have overstepped his authority when he revoked former CIA Director John Brennan’s security clearance. Panetta said “The president obviously has power with regards to security clearances. But his power is also limited by an executive order that makes very clear that when it comes to the revocation of a security clearance that it has to be based on national security issues not the politics of somebody, not what that person has said, not how they dress, not how they look but based on national security issues. This president is now going after people, and the indication that I saw is that he’s going to provide these names to the press office to use this issue when it’s a bad news day so that it can cover that particular news story. I think that’s a real misuse of not only security clearances I think it’s a misuse of the office of the president.” He continued, “There is an executive order that is in place, it was signed by Bill Clinton, it was updated by President Bush, it was followed by President Obama, and this president has to abide by that executive order unless he’s prepared to change it. That executive order lays out a process for revoking security clearances. This president is not above the law. He’s required to follow that executive order.” He added, “I think there are questions raised as to whether or not this president has followed the executive order and whether or not he’s provided due process to those that are going to have their security clearances revoked. Yes, president of the United States has power. But that power is limited by the Constitution and by the checks and balances in our system. I think the president has to adhere to those kinds of requirements.”

Hayden: WH-Intel Community Relationship In Danger of Being ‘Permanently Broken’

Image: Hayden:  WH-Intel Community Relationship In Danger of Being 'Permanently Broken'
Former CIA Director Gen. Michael Hayden (Ret.) (Alex Wong/Getty Images) By Cathy Burke | Sunday, 19 August 2018

The relationship between the White House and U.S. intelligence community is “dangerously close to being permanently broken,” former director of the National Security Agency and CIA retired Air Force Gen. Michael Hayden said Sunday. In remarks on CNN’s “State of the Union,” Hayden decried the “whole tone, tenor and behavior of the administration.” Asked if President Donald Trump’s attacks on the intelligence community, including the revocation of the security clearance of ex-CIA chief John Brennan, has brought the relationship to the breaking point, Hayden was grim. “It’s dangerously close to being permanently broken, it is badly injured right now,” he said. “If we’re back in our old agencies, we’re trying to say to our workforce: ‘We have nothing to do with what John Brennan says on TV and we have nothing to do with what the president has done in response. We’ve got our basic lane, we’ve got to be blocking and tackling.'” “But that has to be harder and harder each day as the administration takes these kinds of actions.” “And frankly, although, John’s situation is a proximate cause for all of us signing letters and protesting, I think it’s kind of one additional straw that’s breaking the camel’s back,” he added. For his own part, Hayden said he wouldn’t mind if his clearance was also yanked. “If [Trump’s] not revoking my clearance gave the impression that I somehow moved my commentary to a direction more acceptable to the White House, I would find that very disappointing and frankly unacceptable.”

Trump compares Mueller probe to McCarthyism

(CNN)President Donald Trump on Sunday compared the special counsel investigation to McCarthyism, saying Robert Mueller made the late Sen. Joseph McCarthy “look like a baby.” “Study the late Joseph McCarthy, because we are now in period with Mueller and his gang that make Joseph McCarthy look like a baby! Rigged Witch Hunt!,” Trump tweeted. NYT: White House counsel McGahn cooperated ‘extensively’ with special counsel probe  McCarthy led a Cold War-era inquisition of alleged Communists who he claimed had infiltrated American governmental institutions. The Wisconsin Republican’s assertions, famously voiced in a speech in 1950, contributed to the paranoia and fear known as “the Red Scare.” A special Senate Foreign Relations subcommittee investigated McCarthy’s initial claims about Communists infiltrating the State Department and found them to be “a fraud and a hoax.”  Upon becoming chairman of the Senate Government Operations Committee’s subcommittee on investigations in 1953, McCarthy expanded his probes into alleged communist activity. In 1954, he began investigating the US Army. The three months of Army-McCarthy hearings shattered the senator’s image and led to his censure by the Senate. The President’s comparison between the special counsel’s investigation into Russian interference in the 2016 presidential election and the trials of McCarthyism was one of a series of tweets that lashed out at the probe Sunday morning. Trump directed particular ire at a Saturday New York Times report that White House counsel Don McGahn has been cooperating extensively with the special counsel.Michael Hayden, a former director of the CIA and National Security Agency, was asked about Trump’s comparison of Mueller to McCarthy on CNN’s “State of the Union.”

“So, Joe McCarthy was a demagogue. And we haven’t heard a public syllable from Bob Mueller in more than a year,” Hayden said. “And I have got to add that McCarthy’s lawyer, Roy Cohn, became Donald Trump’s personal lawyer — lawyer and mentor for decades. I mean, the irony here is just amazing.
Cohn, who died in 1986, worked closely with Trump beginning in the 1970s. For more than a decade, Cohn represented Trump on construction deals and his lawsuit against the NFL.
The New York Times reported McGahn had participated in interviews spanning 30 hours over the last nine months. He provided “detailed accounts about the episodes at the heart of the inquiry into whether President Trump obstructed justice,” including providing information that the Mueller team otherwise would not have learned about, the Times reported, citing a dozen current and former White House officials and other individuals briefed on the matter.

Former FBI Director Robert Mueller, special counsel on the Russian investigation.

“The Failing New York Times wrote a story that made it seem like the White House Councel [sic] had TURNED on the President, when in fact it is just the opposite – & the two Fake reporters knew this,” Trump tweeted. “This is why the Fake News Media has become the Enemy of the People. So bad for America!” He continued: “Some members of the media are very Angry at the Fake Story in the New York Times. They actually called to complain and apologize – a big step forward. From the day I announced, the Times has been Fake News, and with their disgusting new Board Member, it will only get worse!” Shortly after Trump’s criticism, the Times tweeted that it “stands behind the reporting of our Pulitzer-Prize winning reporters @nytmike and @maggieNYT.”

Erdogan vows Turkey will not be cowed by US

US President Donald Trump and Turkish counterpart Recep Tayyip Erdogan are at odds over the fate of an American pastor detained in Turkey
US President Donald Trump and Turkish counterpart Recep Tayyip Erdogan are at odds over the fate of an American pastor detained in Turkey (AFP Photo/Tatyana ZENKOVICH)

Ankara (AFP) – Turkish President Recep Tayyip Erdogan declared Saturday that his country would not be cowed by the United States, his latest broadside in the bitter feud between Ankara and Washington. The two NATO members are at odds over Turkey’s detention of an American pastor, which has triggered a trade row and sent the local currency the lira into a tailspin. “We will not surrender to those who present themselves as a strategic partner while at the same time trying to make us a strategic target,” Erdogan said at a congress of his ruling Justice and Development Party (AKP).”Some people threaten us with economy, sanctions, foreign currency exchange rates, interest rates and inflation. We know your shenanigans and we will defy you.” At the end of congress, delegates unanimously re-elected Erdogan as head of the AKP, the state news agency Anadolu reported. Last week, US President Donald Trump said he had doubled the tariffs on aluminium and steel tariffs from Turkey, prompting Ankara to sharply hike tariffs on several US products. And Turkey on Friday threatened to respond in kind if Washington imposed further sanctions, while a court rejected another appeal to free pastor Andrew Brunson, who has been held for almost two years on terror charges. The lira has nosedived against the dollar, dropping as much as 20 percent on one day last week. It sunk to a low of well over seven to the dollar earlier this week but was trading at just over six to the dollar on Friday — a loss of 40 percent since the start of the year. The collapse of the currency has been blamed both on the tensions with the United States and Erdogan’s increasing hold on Turkey’s economy and his refusal to allow the central bank to raise interest rates. Meanwhile, Erdogan told the AKP congress that Turkey would press on with and expand its cross-border military operations. Turkey sent troops into northern Syria two years ago to fight against the Kurdish People’s Protection Units (YPG). The YPG forms the backbone of the Syrian Democratic Forces (SDF), the Kurdish-Arab alliance that has received extensive backing from the US-led coalition in the battle agains the Islamic State group. But Turkey accuses the YPG of being the Syrian branch of the Kurdistan Workers’ Party (PKK), a rebel group blacklisted by Ankara and its Western allies. The Turkish army has also increased its strikes against PKK rear bases in the north of Iraq in the past few months.

White House counsel McGahn cooperated ‘extensively’ with special counsel probe

Washington (CNN)White House counsel Don McGahn has cooperated extensively with special counsel Robert Mueller’s probe, participating in several interviews spanning 30 hours over the last nine months, The New York Times reported Saturday. McGahn has provided “detailed accounts about the episodes at the heart of the inquiry into whether President Trump obstructed justice,” including providing information that the Mueller team otherwise would not have learned about, the Times reported, citing a dozen current and former White House officials and other individuals briefed on the matter. CNN has reported that McGahn was interviewed by Mueller’s team last last year. McGahn’s decision to cooperate was partly due to the fact that the President’s initial legal team had decided to fully cooperate with Mueller’s investigation into Russian interference in the 2016 presidential election, believing their client had nothing to hide and they could bring a quick end to the probe, the newspaper reported. But McGahn became concerned that the President planned to set him up to be held responsible for any potential illegal incidents of obstruction, the Times reported, citing to people close to him. So the White House counsel and his attorney came up with a strategy to cooperate as extensively as possible with the special counsel in order to prove that there was no wrongdoing by McGahn, the newspaper reported. The Times reported that McGahn has told investigators that he has not witnessed the President take any action that exceeds “his legal authorities.” The newspaper also reported that, according to a person with knowledge of the President’s thinking, Trump incorrectly thought that McGahn would act as a personal attorney would and solely defend the President’s interests in interactions with the special counsel team. But McGahn laid out how Trump “tried to ensure control of the investigation, giving investigators a mix of information both potentially damaging and favorable to the president,” the Times’ report said. In response to a request for comment from the Times, White House press secretary Sarah Sanders said, “The president and Don have a great relationship” and Trump “appreciates all the hard work he’s done, particularly his help and expertise with the judges, and the Supreme Court” nominees. Shortly after the Times published its report on Saturday, Rudy Giuliani, the President’s lawyer, called on Mueller’s team to wrap up its investigation and file a report on its findings. “Time for Mueller investigation to file report,” Giuliani wrote on Twitter. “We will release ours. Don’t interfere with election like Comey.The President had nothing to do with Russians. He didn’t obstruct an investigation. 1.4 million documents and 32 witnesses no privilege raised.” Asked his view about the level of McGahn’s cooperation with Mueller’s team, CNN legal analyst Ross Garber told CNN anchor Fredricka Whitfield on Saturday, “It really is extraordinary.” “To give up those privileges so early, I was frankly surprised, and it appears it may come back to hurt the President and perhaps the presidency,” Garber added. Garber said later, “Let’s be clear: he (McGahn) is a witness. He went in and sat with prosecutors and the agents, and he provided information. The White House counsel is a witness. And probably a very important one.”

Mortgage rates tumble as housing starts to drag down the economy

Getty Images Street of brightly painted colonial style homes in Richmond, Va.

Rates for home loans tumbled in line with the broader bond market, even as the housing market’s woes threatened to become a headwind for the entire U.S. economy. The 30-year fixed-rate mortgage averaged 4.53% during the Aug. 16 week, down six basis points, according to the weekly data from mortgage provider Freddie Mac. The 15-year fixed-rate mortgage averaged 4.01%, down from 4.05%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.87%, down three basis points.  Those rates don’t include fees associated with obtaining mortgage loans. Mortgage rates follow the path of the 10-year U.S. Treasury note TMUBMUSD10Y, -0.22%  , which has tumbled over the past week as investors flocked to safe-haven assets in the wake of the Turkey currency crisis. Bond yields decline as prices rise. Lower rates are a boon for borrowers and should help jump-start housing activity. But there’s been so little to buy for so long that many would-be buyers are simply giving up. And that means the sluggish housing market is no longer just a story unto itself. Analysts now believe housing will drag down overall economic growth in the near term. In a research note out Thursday, Doug Duncan, chief economist for Fannie Mae, Freddie’s counterpart, explained: “Housing continues to drag on growth due to lackluster home-building activity, home sales, and brokers’ commissions.” The stagnant housing market may also be impacting the labor market. The percentage of job seekers relocating for new employment was at longtime lows earlier this year, said outplacement consultancy Challenger, Gray & Christmas on Thursday. Just over 10% of job seekers relocated for work in the first six months of 2018, compared with an average of 19% over the previous decade. The more Americans are on the move, the more local economies get a “halo effect” from home sales, according to Daren Blomquist, senior vice president at Attom Data Solutions. As Blomquist puts it, higher home sales activity “bodes well for local real-estate agents, home improvement stores, moving companies and others.”

Dozens of intelligence officials slam Trump for revoking security clearances from his critics

WASHINGTON, DC - MAY 23:  Former Director of the U.S. Central Intelligence Agency (CIA) John Brennan testifies before the House Permanent Select Committee on Intelligence on Capitol Hill (Photo by Alex Wong/Getty Images)
WASHINGTON, DC – MAY 23: Former Director of the U.S. Central Intelligence Agency (CIA) John Brennan testifies before the House Permanent Select Committee on Intelligence on Capitol Hill (Photo by Alex Wong/Getty Images)

About 75 members of the intelligence community are taking a public stance against President Trump’s unprecedented decision to revoke former CIA Director John Brennan’s security clearance. In the 48 hours following Trump’s announcement that he would strip Brennan’s clearance — which came after Brennan had repeatedly spoken out publicly against the president — 15 former senior intelligence officials from bipartisan presidential administrations signed onto an open letter condemning the move. They argued that the president’s decision is a transparent “attempt to stifle free speech.” The letter first went public on Thursday with 12 names, including former CIA Directors Michael Hayden, Leon Panetta, and David Petraeus, as well as former Director of National Intelligence James Clapper. It has since been updated to include three additional signatories.

Trump asks SEC to mull half-year corporate filings

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 18, 2018. REUTERS/Brendan McDermid

(Reuters) – U.S. President Donald Trump said on Friday he has asked the U.S. Securities and Exchange Commission to study the impact of allowing companies to file reports with the financial regulator every six months instead of every quarter.  “Without any doubt that reduces the transparency for investors and they will be left in the dark for longer. Such a strategy is a great recipe to create the biggest loop hole in the financial system. Moreover, under such conditions, any blunder would create a serious threat not for the markets only but for the economy as well.” “We cannot compare the US markets with other markets because of the sheer size of it. From an investment perspective, you want to know on a regular basis what is going on with the company and this enables you to make more timely decisions.” “Delaying the reporting process to six months does make the stocks less sensitive because there is only limited information available. But when there is a surprise, it tends to bring a much bigger move for the stocks as compared to a situation where they report on a quarterly basis.” “Corporations have long complained about the costs of quarterly filing and that tends to make their attention very short term. So people say that if they get away from quarterly filings and got to somewhat longer filings, that would help companies have a longer-term perspective.

“Unfortunately, research shows that’s not exactly true. Most research suggests that companies that are well-managed and have a longer-term perspective do better anyway and are able to manage their quarterly reports. Furthermore, you give investors less information on what’s going on so there’s a risk of injecting volatility in your stock price because investors are not guided the right way. You’re more likely to surprise investors when you’re reporting just twice a year instead of quarterly.”

“Not happy with that at all … I believe that just because you have to report quarterly doesn’t mean you should have to act quarterly. If you can’t explain your process and your goals as a company and adequately say why the results came out the way they did and you feel compelled to play some sort of accounting games to make it seem like every quarter is better than the last, this is a stock I am not interested in owning.” “Shareholders deserve to have a report every quarter on how the company is doing.” “I don’t believe companies should act in the short-term, but I also don’t believe that just because you report quarterly means you are acting in the short term to make things come out nice. “There’s long been a push for less short-termism in running publicly traded companies and that’s where the debate begins. Do you run a company in a more efficient manner if you’re not thinking about having to talk about your results every 90 days?” “The difficulty in making better long-term decisions away from a quarterly reporting cycle certainly stands out as being beneficial, so we’ll see how it develops. It’s not something that can be done with an executive order, but it’s certainly a conversation that started years ago and one that is certainly getting some traction in the marketplace today.” “It’s a long-term issue that has been around certainly for years, and the whole argument coalesces around better corporate planning for the future, making better long term decisions if you’re not strapped with reporting our results every 90 days. There is credible possibility that you end up making short-term decisions more than long-term decisions because of the nature of your reporting cycle. I think there are studies that prove that that’s probably not a positive.”

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“The other side of that argument would be that the ability to know how things are actually going at a company on a regular basis, you probably are disenfranchised especially as an individual versus an intuitional investors that probably has the ability to get access to management on a more frequent basis.” “He is not the first person to bring this up, It’s been talked about for at least a decade.” “I don’t think it’s a bad idea. What I think is the challenge is that it will be a hard to get people to change to do that, because investors and certainly shorter-term traders want that information. They want to know how companies are doing on a quarterly basis.” “In theory, it should probably lower market volatility, because the most volatile times of the year are when quarterly earnings start coming out. If you had that only twice the year instead of four times a year, overall market volatility would decline.” “The main thing is that this is a big, gigantic fundamental shift in the way business works in this country, in the way capital markets work. It would be like trying to turn around the Queen Mary in a swimming pool.”“This is not something he can change with an executive order.”

Maduro orders 96 percent devaluation in hyperinflation-stricken Venezuela

Venezuela's President Nicolas Maduro talks to the media after a meeting for signing an agreement on guarantees for the vote at the National Electoral Council (CNE) headquarters in Caracas, Venezuela March 2, 2018.
Marco Bello | Reuters Venezuela’s President Nicolas Maduro talks to the media after a meeting for signing an agreement on guarantees for the vote at the National Electoral Council (CNE) headquarters in Caracas, Venezuela March 2, 2018.

Venezuela’s president Nicolas Maduro announced on Friday a single exchange rate pegged to his socialist governments petro cryptocurrency, effectively devaluing by 96 percent in a move economists said would fan hyperinflation in the chaotic country. In one of the biggest economic overhauls of Maduro’s five-year government, the former bus driver and union leader also said he would hike the minimum wage by over 3,000 percent, boost the corporate tax rate, and increase highly-subsidized gas prices in coming weeks. “I want the country to recover and I have the formula. Trust me,” Maduro said in a nighttime speech broadcast on state television. But economists expressed doubts that Venezuela’s cash-strapped government, which faces U.S. sanctions and has defaulted on its bondholders, would succeed. Venezuelans will see their meager salaries further eroded and companies will struggle with major increases to both taxes and the minimum wage, they said. Amid this aggressive devaluation and monetary expansions due to salaries and bonuses, we are expecting a much more aggressive stage of hyperinflation. All the more so in a context where the elimination of excessive money printing is not credible. The worst of all worlds, said Venezuelan economist Asdrubal Oliveros of consultancy Ecoanalitica. The International Monetary Fund has predicted that inflation in Venezuela would hit 1 million percent this year. After a decade-long oil bonanza that spawned a consumption boom in the OPEC member, many poor citizens are now reduced to scouring through garbage to find food as monthly salaries amount to a few U.S. dollars a month. Hundreds of thousands of Venezuelans have emigrated by bus across South America in one of the region’s worst migration crises.

If turmoil spreads in Europe, expect heavy flows into U.S. stocks

The U.S. will be a safe haven — and besides, the American stock market is attractive
Bloomberg The euro symbol at an exhibition stand at the CeBIT 2018 tech fair in Hanover, Germany.

There’s been no shortage of crises. Trade wars and the collapse of the Turkish lira. One market’s crisis is another’s opportunity, and Europe’s shaky currency union could send U.S. stocks soaring … eventually. In a world of contagion, how could European currency turmoil possibly send U.S. stocks higher? And when might this happen? Imagine living in Europe right now. The Turkish lira just lost about 25% in a matter of days, Brexit continues to loom, but the biggest problem might be Italy. And, yes, your bank may or may not be invested in Turkey. Would you rather own euros or the dollar? Would you rather own European stocks denominated in euros, or dollar-based blue-chips? The smart European money is probably leaving the region, and it’s got to be going somewhere. U.S. stocks are probably overpriced, but when forced to pick a poison, the U.S. looks much less dangerous and is therefore more appealing. The chart below — along with some commentary — was published in my May 30 MarketWatch column.

The U.S. Dollar Index DXY, -0.48%  followed the green arrow and reached the upside target around 97. As the weekly bar chart shows, the center line of a nearly decade-long trend channel is just below 97.

While above 96, the dollar may continue higher, but there is a good chance that the U.S. dollar will drop back below 97 and retrace some of its recent gains. If the dollar retreats from the 96-97 range, the euro currency will catch a break and slow the migration of euros into the U.S. Regardless of whether the eurozone can postpone the seemingly inevitable (we’ve seen cans kicked down the road before), the S&P 500 Index SPX, +0.33% Dow Jones Industrial Average DJIA, +0.43%   Nasdaq COMP, +0.13%  and Russell 2000 Index RUT, +0.43%  may not even need a euro crisis to soar higher. On July 17, the S&P 500 activated a chart pattern with massive bullish potential. The chart pattern, and what it takes to confirm or deny its potential run, is discussed here.

Moody’s downgrades Turkey to Ba3, assigns negative outlook

ISTANBUL (Reuters) – Moody’s cut Turkey’s sovereign credit rating deeper into “junk” territory on Friday, citing a weakening of public institutions and the related reduction in the predictability of policy making in a country which is facing a currency crisis. People change money at a currency exchange office in Istanbul, Turkey August 17, 2018. REUTERS/Murad Sezer“That weakening is exemplified by heightened concerns over the independence of the central bank, and by the lack of a clear and credible plan to address the underlying causes of the recent financial distress,” the agency said in a statement. Moody’s lowered the rating to Ba3 from Ba2 and changed its rating outlook to negative in a move which came on the heels of a downgrade by S&P. “The tighter financial conditions and weaker exchange rate, associated with high and rising external financing risks, are likely to fuel inflation further and undermine growth, and the risk of a balance of payments crisis continues to rise,” it said. The lira has lost nearly 40 percent of its value against the dollar this year, sparking a sell-off in emerging market currencies and weighing on global stocks. The crisis has been precipitated by investor alarm about President Tayyip Erdogan’s influence over monetary policy. The sell-off has been fueled by a deepening dispute between Turkey and the United States, with Washington imposing sanctions and vowing to continue to do so as it seeks the release of a U.S. pastor on trial in Turkey.

Trump backs CEOs, proposes easing corporate reporting rules

FILE PHOTO: The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington, U.S., June 24, 2011. REUTERS/Jonathan Ernst/File Photo

NEW YORK/WASHINGTON (Reuters) – U.S. President Donald Trump on Friday said meetings with corporate executives prompted him to ask the U.S. Securities and Exchange Commission (SEC) to study letting public companies file financial reports every six months instead of every quarter.

Half-yearly reporting would mark a huge change in U.S. disclosure requirements and put them in line with European Union and United Kingdom rules. By tweeting that the switch would give companies more flexibility and reduce costs, Trump waded into a long-running debate on how often companies should report.

“I’d like to see twice, but we’re going to see,” Trump later told reporters when asked about his tweet. He said outgoing PepsiCo Inc ( Chief Executive Indra Nooyi had brought it up to him. “Many market participants, as well as the Business Roundtable which we are a part of, have been discussing how to better orient corporations to have a more long-term view,” Nooyi said in a statement emailed to Reuters. “My comments were made in that broader context, and included a suggestion to explore the harmonization of the European system and the U.S. system of financial reporting. In the end, all companies have to balance short-term and long-term performance.” Some investors on Friday said quarterly disclosures are essential for investment decisions and supported richer U.S. stock valuations, and that shares could become more volatile if companies report twice yearly. But executives and other investors said Trump’s argument made sense because it would cut costs of compiling and filing results and remove short-term distractions for those running companies.The SEC is an independent agency, and the president cannot force it to implement rule changes. Any move to scrap quarterly filings would have to be voted on by the SEC’s sitting commissioners, who are political appointees. “It’s cockamamie idea. For starters, what’s the difference between six and three months? … Either way we’re talking about a very short-term period,” Yardeni added.

Turkish firms and government face $3.8 billion bond crunch in Oct – SocGen

FILE PHOTO: Turkish President Tayyip Erdogan, accompanied by Energy Minister Berat Albayrak, attends a funeral ceremony for police officer Hasim Usta who was killed in Saturday’s blasts, in Istanbul, Turkey, December 12, 2016.

LONDON (Reuters) – Turkey and its firms face repayments of nearly $3.8 billion (£2.99 billion) on foreign currency bonds in October as the country struggles with a plunging lira that has lost more than a third of its value since the start of the year. Emerging market (EM) investors have been worried about Turkey’s external debt burden and the ability of its firms and banks to repay after a boom in hard currency issuance to help finance a rapidly growing economy. For companies, the cost of servicing foreign debt has risen by a quarter in lira terms in the past two months alone. “Turkey’s external financing requirements are large,” Jason Daw at Societe General wrote in a note to clients. “It has the highest FX-denominated debt in EM and short-term external debt of $180 billion (£141.6 billion)and total external debt of $460 billion (£361.9 billion).” Calculations by Societe General show that Turkish firms will face $1.8 billion (£1.4 billion) of hard-currency denominated bonds maturing by the year-end while $1.25 billion of government bonds will come due. Additionally, a total of $2.3 billion (£1.81 billion) in interest must be paid. The heaviest month for repayments is October, when $3 billion (£2.36 billion) in principal and $762 million (£599.5 million) interest are due. “Principal and interest payments should be closely watched to year end – it is 25 percent more costly for the corporate sector to repay their obligations compared to June given FX depreciation,” Daw wrote. One mitigating factor may be that much of the short-term external debt was in instruments such as bank loans and trade credits, which could be smoother to restructure or roll over than attempting to do so on bond markets, Daw added. Data from LPC showed that about $7 billion (£5.5 billion) of loans are due to mature until the end of the year, with more than 90 percent of those being bank loans. A number of lenders such as Akbank, Turk Ekonomi Bankasi and Turk Eximbank are in the market attempting to refinance loans. However, international banks are unlikely to make any decisions before ratings agencies react, with many predicting the lending boom would grind to a sudden halt. “Foreign financiers, whether they exist as banks or bond investors, are re-assessing the outlook and related repayment prospects,” said Jurgen Odenius, economic counsellor at PGIM Fixed Income. “Western European banks from Spain and France are particularly exposed, with over half of the debt owed to them.” Shares in some of Europe’s major banks have been hammered over the last week as markets fret over their exposure to Turkey. Odenius also points to the fallout from Turkey’s financial system and the corporate sector being effectively short dollars, calculating that net foreign exchange liabilities (NFL) of the central bank and commercial banks combined amounted to $27 billion (£21.2 billion) at the end of June. “While that is undoubtedly a manageable figure, these liabilities only pertain to foreign lenders,” Odenius wrote in a note to clients. “Including the $147 billion in dollar deposits by resident households and firms, the ‘adjusted’ NFL spirals up to nearly $175 billion — an undoubtedly less manageable figure.” With President Tayyip Erdogan’s administration shunning orthodox monetary policy and highly reluctant to raise interest rates to contain inflation at over 15 percent, markets are also closely watching how the Turkish state goes about refinancing its debts. Erdogan’s government has adamantly rejected speculation that it may have to seek support from the International Monetary Fund (IMF). Qatar has pledged about $15 billion (£11.8 billion) but details have been scant. “Rather than sticking with the approach taken by numerous other countries – including Argentina earlier this year – by raising interest rates and seeking some form of IMF support, Turkey has shunned both in a very public manner,” wrote Mohamed El-Erian, chief economic adviser at Allianz“Unless it changes course, the government risks much wider damage – and not just in Turkey.”

Walmart posts biggest U.S. sales rise in a decade, shares soar

NEW YORK (Reuters) – Walmart Inc (WMT.N) posted its best quarterly U.S. sales growth in a decade and upped full-year sales and profit outlooks on Thursday, sending shares surging as a jump in online and grocery purchases showed it can hold its own against Amazon.com Inc (AMZN.O). The world’s largest retailer is known for its sprawling stores, a factor that could have worked against it as shoppers migrate online. But Walmart is also the top U.S. grocer, providing a lure for customers to visit stores, where they may also make other impulse buys. Walmart has also overhauled its website and worked to use physical locations as distribution points for online orders of groceries and other goods, helping retain buyers who increasingly expect quick, cheap shipping. Consumers spent more on categories like grocery, apparel and seasonal merchandise in the second quarter, helping sales rebound after a slow start in April. Walmart has recorded four straight years of U.S. growth, unmatched by any other retailer. “We saw strong performance in fresh food,” U.S. Chief Executive Greg Foran said on an earnings conference call, praising sales in produce, meat and bakery. Grocery sales rose the most in nine years. Walmart’s U.S. e-commerce growth ticked higher than previous quarters, driven by a website redesign and continued expansion of online grocery offerings.Sales growth has come at some cost, however, with the company citing continued margin pressures driven by cutting prices, higher freight costs due to a shortage of truck drivers and e-commerce investments. E-commerce sales grew 40 percent in the quarter, up from 33 percent growth in the previous period, and the retailer said U.S. online sales are on track to rise 40 percent for the full year. Walmart now offers curbside pickup of online grocery orders in 1,800 U.S. stores, and the service is bringing in new customers, Biggs said. Sales at U.S. stores open at least a year rose 4.5 percent, excluding fuel price fluctuations, higher than analyst forecasts of 2.38 percent, according to Thomson Reuters I/B/E/S. Total revenue increased 3.8 percent to $128 billion, beating estimates.

Big Oil is racing to pump all the oil out of Texas

Shale exec: US will surpass Russia in oil production

The oil industry is shelling out billions of dollars in a series of acquisitions in the Permian Basin, the hottest oilfield in the world.

The latest deal came on Tuesday when Diamondback Energy agreed to purchase shale producer Energen for $9.2 billion, forming one of the largest players in the Permian. Late last month, BP ( inked a $10.5 billion deal to buy oil assets in Texas. It was BP’s biggest acquisition in two decades and first major investment in the United States since the Deepwater Horizon disaster in 2010. And Concho Resources recently completed a $9.5 billion purchase of RSP Permian that created the largest shale producer in the Permian.

The rush of deals underscores how eager companies are to get a foothold in the region. Rapid technological advances have dramatically slashed the cost to frack in the Permian. Production is spiking so much that Texas is on track to surpass Iran and Iraq, both OPEC members. That would make Texas No. 3 in the world if it were a country. “It’s the most desired region in the United States, if not globally,” said Michael Tran, director of global energy strategy at RBC Capital Markets.

texas oil chart

Permian could rival legendary Saudi field

RBC estimates that Permian production will more than double over the next seven to 10 years, to about 6.5 million barrels per day. That’s more than the entire United States produced in early 2012. “From a price perspective, the Permian Basin is extremely attractive,” Tran said. “Nobody doubts the rock.” The Permian boasts unique geology that allows oil companies to drill more than one layer of the earth at the same time. Wells can be profitable below $40 a barrel. That’s well below today’s price of about $65 a barrel. And some executives believe the amount of Permian oil rivals Saudi Arabia’s legendary Ghawar Field, the world’s largest conventional oilfield.

permian basin chart

But major obstacles loom in the booming Permian Basin, at least in the short run. Because of hyper growth, the Permian is quickly running out of pipelines to move oil out of the region.

“The pipeline constraints are real, but they are transitory,” said Vincent Piazza, senior energy analyst at Bloomberg Intelligence. “The infrastructure has had a difficult time keeping up with the explosive growth.

More pipelines are coming, but they will take time. Clay Seigle, managing director of oil at research firm Genscape, warned of “significant challenges” for transporting oil out of the Permian until the second half of next year. At the same time, Permian producers are feeling sticker shock as prices spike for talent, supplies and services. Oil executives are betting they can maximize their chances of success by working together. The recent deals “signal a clear shift in the US shale industry towards consolidation as players seek operational and capital efficiencies,” analysts at research firm Rystad Energy wrote in a report on Wednesday.

Ex-Trump aide Manafort had ‘huge dumpster of hidden money,’ jury told

FILE PHOTO: Former Trump campaign manager Paul Manafort departs from U.S. District Court in Washington, DC, U.S., February 28, 2018. REUTERS/Yuri Gripas/File Photo

ALEXANDRIA, Va. (Reuters) – Paul Manafort had “a huge dumpster of hidden money” abroad, a prosecutor said on Wednesday, urging a jury to convict U.S. President Donald Trump’s former campaign chief on financial fraud charges based more on a paper trail of evidence than the testimony of a former protege. Special Assistant U.S. Attorney Greg Andres gave his closing statement in federal court in Alexandria, Virginia, where Manafort is on trial on tax and bank fraud charges, along with failing to disclose foreign bank accounts. The trial is the first to come out of Special Counsel Robert Mueller’s investigation of Russian meddling in the 2016 presidential election. The charges involve tax and bank fraud, not possible collusion between Russia and Donald Trump’s campaign for president. A Manafort conviction would undermine efforts by Trump and some Republican lawmakers to paint Mueller’s Russia inquiry as a political witch hunt, while an acquittal would be a setback for the special counsel. The star witness against Manafort was seen as Rick Gates, his former right-hand man, who was indicted along with Manafort but pleaded guilty and agreed to cooperate with the government. The defense has portrayed Gates as a lying thief who had his hand in the “cookie jar” and was only trying to reduce his own sentence, noting Gates will be allowed to argue for probation even though he admitted to embezzling hundreds of thousands of dollars and being involved in Manafort’s alleged crimes. Andres argued that while Manafort did not “choose a Boy Scout” as his associate, Gates’ testimony was corroborated by other evidence, including nearly 400 exhibits, and a series of financial professionals who took the stand for the prosecution. “The star witness in this case is the documents,” Andres told the jury. “That wasn’t a cookie jar,” he added, referring to the tens of millions of dollars Manafort had overseas. “It was a huge dumpster of hidden money in foreign bank accounts. Prosecutors say Manafort, 69, tried to mislead bankers with doctored financial statements in 2015 and 2016 to secure more than $20 million in loans and failed to pay taxes on more than $15 million that he earned as a political consultant in Ukraine. Defense lawyers decided not to call any witnesses in the trial, and Manafort, a veteran Republican political operative, did not testify in his own defense. In its closing argument, defense counsel argued that Manafort had been transparent with the banks and that any issues with his financial situation were well known to them before they extended him the loans. They also sought to emphasize the idea that Manafort did not knowingly break the law — a requirement for conviction — and was rather failed by the bookkeepers, accountants and other professionals in whom he trusted his financial affairs. If found guilty on all 18 charges by the 12-person jury, he could face eight to 10 years in prison, according to sentencing expert Justin Paperny. Manafort also faces a second trial in September in Washington, where he is accused of failing to disclose lobbying for Ukranian politicians, among other crimes.

Trump Today: President attacks Boston Globe after wave of critical editorials

Trump hails dollar’s strength; says he’s in ‘no rush’ on Nafta
Reuters President Donald Trump addresses members of his cabinet and the news media as Secretary of State Mike Pompeo looks on at the White House on Thursday.

President Donald Trump on Thursday ramped up attacks on the media, as he hailed the strength of the U.S. dollar and told members of his cabinet he’s in “no rush” on a new North American Free Trade Agreement. On the same day about 350 newspapers ran editorials decrying Trump’s description of the media as the “enemy of the people,” the president tweeted “THE FAKE NEWS MEDIA IS THE OPPOSITION PARTY.” The Boston Globe called on newspapers to publish the editorials — prompting a Trump charge of “collusion” — and Trump singled out the paper in a separate tweet, incorrectly saying it was sold by the New York Times for $1. The Globe was sold to Boston Red Sox owner John Henry for $70 million.

About a month after saying a strong dollar put the U.S. at a “disadvantage,” Trump tweeted “money is pouring into our cherished DOLLAR like rarely before.” Larry Kudlow, who heads the White House National Economic Council, offered a similar take on the greenback, telling CNBC that the strength of the dollar was a “sign of confidence” in the economy. In July, Trump told the same network that “our currency is going up. I have to tell you, it puts us at a disadvantage.” The U.S. Dollar Index DXY, -0.10%   , a measure of the currency against six of its rivals, is up about 5% this year. Our Economy is doing better than ever. Money is pouring into our cherished DOLLAR like rarely before, companies earnings are higher than ever, inflation is low & business optimism is higher than it has ever been. For the first time in many decades, we are protecting our workers!

Trump told cabinet members at the White House he’s not in a rush to forge a Nafta deal, after U.S. Trade Representative Robert Lighthizer said he was hopeful for a breakthrough in the next few days. “If we don’t have a breakthrough, don’t do the deal,” Trump said. Separately, the president raised the case of Pastor Andrew Brunson, who’s been detained by Turkey. Treasury Secretary Steven Mnuchin told Trump that the administration is planning more sanctions against Turkey if Brunson isn’t released quickly. Brunson denies charges of espionage and Trump called him “a very innocent man.” The president also tweeted that the singer Aretha Franklin, who died Thursday, was a “great oman” who “will be missed.”

Munchin Says Turkey Faces More Sanctions If Pastor Not Released

Image: Mnuchin Says Turkey Faces More Sanctions If Pastor Not Released
(STR/AFP/Getty Images) Thursday, 16 August 2018
 

Larry Kudlow to Trump Cabinet: China’s ‘Terrible’ Economy ‘Heading South’

White House economic adviser Larry Kudlow told President Donald Trump and Cabinet members in a White House meeting on Thursday that China’s most recent economic numbers show a southward turn.

Xi Jinping
AP Photo/Mark Schiefelbei

Trump asked Kudlow in the Cabinet meeting how the U.S. economy was doing compared to China’s economy. “The latest batch of numbers from China,” Kudlow said, “their economy is just heading South.” He continued, “Right now, their economy looks terrible.” Kudlow commented that retail sales were down and business investment was “collapsing.”“Mostly, I think investors are moving out of China because they don’t like the economy and they’re moving to the USA because they like our economy,” he told the room. “I would just say right now, their economy looks terrible.”“The single biggest story this year is an economic boom that is durable and lasting that most people thought was impossible, and they were wrong,” he said in closing. A few months back the U.S. and China were sending trade delegations back and forth between China and the U.S. to negotiate trade agreements between the two nations. That appeared to break down to some extent as the two nations began trading tariffs warnings to one another. The U.S. has imposed tariffs on tens of millions in Chinese imports with President Trump’s warning of tariffs on hundreds of millions more in Chinese imports to the United States. China has issued retaliatory tariffs on U.S. exports that have appeared to be aimed at U.S. industries that could have a political effect on the U.S. president. Thursday morning, news broke that China will send an envoy of lower level trade officials to the U.S. for meetings with U.S. officials. Meetings have been set for late August and will center around “issues of mutual

Paul Manafort could spend the rest of his life in prison

Here are the charges the former Trump campaign boss faces as the case goes to the jury
Former Trump campaign chairman Paul Manafort arrives for a hearing at the E. Barrett Prettyman Federal Courthouse on April 19, 2018 in Washington, DC.
Getty Images Former Trump campaign chairman Paul Manafort arrives for a hearing at the E. Barrett Prettyman Federal Courthouse on April 19, 2018 in Washington, DC.

Paul Manafort’s fraud and conspiracy trial is rounding the final bend. Prosecutors and defense attorneys on Wednesday delivered their closing arguments to jurors on the 12th day of the criminal trial against President Donald Trump’s former campaign chairman. From there, jurors in the U.S. District Court case in Alexandria, Va., will begin considering the 27 witnesses and more than 360 exhibits presented by prosecutors. A verdict in the trial — the first borne of charges from special counsel Robert Mueller’s Russia probe — could be coming as soon as this week. Manafort has pleaded not guilty to 18 counts lodged by Mueller’s team. Here are the charges he faces:

Subscribing to false income tax returns

Number of counts: 5
Maximum prison sentence per count: 3 years

In an indictment unveiled in February against Manafort and his former business partner, Rick Gates, the special counsel laid out what it described as a years-long “tax scheme” intended to lower Manafort’s tax bills by hiding his income from U.S. authorities. Manafort worked for years in the 2000s as a consultant for former Ukraine President Viktor Yanukovych’s pro-Russian Party of Regions. The tens of millions of dollars he earned for this work were put in foreign accounts, and Manafort used that money to fund a lavish lifestyle primarily through international wire transfers, Mueller alleges. Manafort is accused of failing to report this income on his income tax returns, and falsely claiming he had no authority over those foreign accounts.

Failing to file foreign bank account reports

Number of counts: 4
Maximum prison sentence per count: 5 years

From 2011 to 2014, Manafort allegedly failed to file foreign bank account reports, known as FBARs, with the Treasury Department to disclose his control over his overseas accounts.

Bank fraud and bank fraud conspiracy

Number of counts: 4 counts of bank fraud; 5 counts of bank fraud conspiracy
Maximum prison sentence per count: 30 years

During the trial, prosecutors alleged that Manafort resorted to bank fraud to obtain loans for himself after Yanukovych was deposed as the leader of Ukraine in 2014, which dried up Manafort’s lucrative stream of income. Manafort and Gates are accused of defrauding U.S. banks and other lenders by lying about Manafort’s income, debt and the nature of his real estate properties. Prosecutors also allege Manafort and Gates knowingly doctored financial documents. One of Manafort’s accountants testified under immunity during the trial that she had been asked to misrepresent Manafort’s income by Gates. The indictment alleges Manafort falsely claimed that a New York City condo was “owner-occupied” instead of rented in order to get more money when applying for a $3.4 million mortgage in late 2015. It also says Manafort defrauded another lender by falsely overstating the 2015 income of one his businesses by more than $4 million, among other charges.

Mueller Probe Doesn’t Need to Shut Down Before Midterms, Officials Say

(Bloomberg) — Special Counsel Robert Mueller doesn’t have to shut down his Russia investigation in the weeks before November’s congressional elections despite claims by President Donald Trump’s lawyers that he faces a Sept. 1 deadline, according to current and former U.S. officials. Mueller can continue his closed-door inquiries, and even issue new indictments up to and after the Nov. 6 voting, without violating a Justice Department policy against actions intended “for the purpose of affecting any election,” they said, asking not to be identified discussing investigative matters.

Mueller Probe Doesn’t Need to Shut Down Before Midterms, Officials Say 

That’s at odds with repeated assertions by Trump’s lawyers. “If it isn’t over by September, then we have a very, very serious violation of the Justice Department rules, and he shouldn’t be conducting one of these investigations in the 60-day period,” former New York Mayor Rudy Giuliani said on Fox News last week. In an interview Tuesday, Giuliani said, “If he doesn’t get it done in the next two or three weeks we will just unload on him like a ton of bricks.” He added, “Write the damn report so we can see it and rebut it.” The concept of a 60-day quiet period before an election may resonate with the public because of bipartisan condemnation of former FBI Director James Comey’s decision to reopen the investigation into Democrat Hillary Clinton’s use of a private email server shortly before the 2016 presidential election. As early as May, Giuliani was pushing the idea that Mueller had to wrap things up by September or “he is clearly doing a Comey.” That argument may have gained some traction: Two-thirds of Americans surveyed said Mueller should complete his investigation before the mid-terms, according to a CNN poll conducted by SSRS and released Aug. 14. It showed the view is shared across party lines, with 57 percent of Democrats supporting the timeline along with 69 percent of independents and 72 percent of Republicans. Any major step that Mueller takes before the election is expected to be vetted and cleared by Justice Department officials, including Deputy Attorney General Rod Rosenstein, who oversees Mueller’s work. But in reality, the Justice Department’s rules are far from clear-cut. “It’s an absurdity to think that Mueller has to shut down in the coming weeks because of the mid-term elections,” said Jeffrey Cramer, a former federal prosecutor. “There is no legal impediment to Mueller continuing his work as we get closer to the election.” As a former Justice Department official, Giuliani should know better, said Cramer, who’s now managing director of the international investigation firm Berkeley Research Group LLC. “He’s going to play poker against Bob Mueller? That’s not a smart move. Mueller’s holding all the cards.” The U.S. Attorneys’ Manual prohibits Justice Department personnel from using their official authority or influence to interfere with or affect the result of an election. It also requires prosecutors to consult with the department’s Public Integrity Section of the Criminal Division on major investigative steps. At the same time, the policy says charges should be brought when they’re ready. In 2012, Attorney General Eric Holder issued a binding policy memo on election-year activities that still applies. But it went to motivation as the deciding factor. “Simply put, politics must play no role in the decisions of federal investigators or prosecutors regarding any investigations or criminal charges,” the memo says. “Law enforcement officers and prosecutors may never select the timing of investigative steps or criminal charges for the purpose of affecting any election, or for the purpose of giving an advantage or disadvantage to any candidate or political party.” Justice Department officials have generally interpreted the policy as meaning that major overt activities that could have a political impact shouldn’t be taken 60 days before an election. But that doesn’t prevent closed-door activities such as grand jury subpoenas and interviews of witnesses, and it doesn’t prohibit taking action after voters have made their choices. Giuliani said the guidelines would preclude an interview of Trump during that time period. “They can’t be interviewing him privately,” he said. “Everyone will know they will be interviewing him and speculating like crazy.” In addition, it’s not clear that action by Mueller against Trump or those around him could be construed as interfering in the November vote because Trump isn’t on the ballot, one of the former officials added. As far back as last August, Trump’s lawyers were setting timelines many legal analysts viewed as unrealistic. Former White House lawyer Ty Cobb said he would be “embarrassed” if the investigation continued past Thanksgiving 2017. As Thanksgiving came and went, Cobb predicted the investigation would end by December and then in early 2018. Cobb left the White House in May. There’s no public sign the shifting timetables set by Trump’s lawyers have had any effect on Mueller’s inquiry, which continues to generate allegations of criminal activity. To date, Mueller has brought charges against more than 30 individuals, including Trump’s former campaign chairman Paul Manafort and former National Security Adviser Michael Flynn. By comparison, Independent Counsel Ken Starr spent four years investigating President Bill Clinton before releasing his report on the Monica Lewinsky affair, which spun out of a probe into an Arkansas land deal known as Whitewater. In the investigation into the public outing of CIA agent Valerie Plame, it took almost two years for then Special Counsel Patrick Fitzgerald to indict Scooter Libby, Vice President Dick Cheney’s chief of staff, for lying to investigators and obstruction of justice in October 2005.

Trump’s lawyers have spent almost nine months in back-and-forth negotiations with Mueller’s team over terms of a interview. That issue remains unresolved. Muller’s team is “not showing any desire to do this quickly,” Giuliani said Tuesday, adding it has yet to hear back from the special counsel’s office on the latest offer for terms of a limited interview. As for Mueller, he continues to maintain public silence. He speaks only through official legal actions such as indictments — whenever he’s ready. ©2018 Bloomberg L.P.

Stocks tumble; emerging markets hit as dollar rises, yuan falls

NEW YORK (Reuters) – Equities around the world took a dive on Wednesday, with emerging market stocks set to confirm a bear market and the dollar hitting a 13-month high, while weakness in China’s yuan rattled investors’ nerves. While fears of a crisis in Turkey still loomed, China was in sharp focus as the yuan CNH=EBS sagged nearly 0.8 percent to 6.9467 per dollar, hitting its weakest level since January 2017 following disappointing economic data earlier this week.  The data stoked speculation whether the People’s Bank of China would intervene with more fiscal stimulus to stem its currency from breaking through the 7-yuan mark. “Today investors are waking up to the idea that the situation in China may be pretty impactful as far as global markets go,” said Emily Roland, head of capital markets research at John Hancock Investments.“With China being the engine of global economic growth, if you start to see their currency weaken significantly because of the slowdown we’re seeing there and you start to see the dollar meaningfully increase, there could become a point where there’s a liquidity issue globally,” Roland added. Turkey’s lira eked out a second day of gains as authorities tightened the screws on foreign investors aiming to short the currency. But the country’s failure to tackle galloping inflation kept investors fearful that Turkey was headed for full-blown crisis and debt defaults. Investors stepped up safe-haven holdings of the U.S. dollar due to worries about China and Europe’s exposure to Turkey, which pushed the euro to its weakest level in over a year. “The dominant theme in financial markets at the moment is the strength of the dollar,” said Sunil Krishnan, Aviva Investors head of multi-asset funds. “We see scope for that move to continue. “One of the big challenges to risk appetite in markets is if the dollar moves continue and put pressure on riskier assets such as emerging market bonds and so on,” he added. MSCI’s emerging equities index .MSCIEF was last down 2 percent from Tuesday, after having fallen more than 20 percent from its January intraday high earlier in the day. Latin American currencies also slid along with commoditie. The CBOE Volatility Index .VIX, Wall Street’s so-called “fear gauge,” jumped to a more than six-week high of 16.86, showing rising demand for protection against a near-term drop in U.S. stocks. The index was last up 2.9 points at 16.21.

.DJI

The backdrop to all this is the escalation in global trade tensions, with Beijing lodging a complaint to the World Trade Organization to determine the legality of U.S. tariff and subsidy policies. Turkey has also raised tariffs on some U.S. products “in response to the U.S. administration’s deliberate attacks on our economy”, Vice President Fuat Oktay wrote on Twitter. U.S. crude oil CLcv1 fell 3.36 percent to $64.79 per barrel and Brent LCOcv1 was last at $70.61, down 2.55 percent on the day. Additional reporting by Richard Leong, Saqib Iqbal Ahmed in New York, Shinichi Saoshiro in Tokyo and Marc Jones in London; Editing by Louise Ireland and Dan Grebler

Fed is no longer worried about every market hiccup, economist Lavorgna says

Central bank’s new diagnosis and tougher treatment plan likely a mistake, veteran Fed watcher says
Reuters
Federal Reserve Chairman Jerome Powell and his colleagues have penciled in five rate hikes by the end of next year.

Perhaps lulled into a sense of complacency by a Federal Reserve that previously had seemed to attend to the market’s every hiccup, investors seem unprepared for a central bank that now thinks more hawkish medicine is in order, a veteran Fed watcher said Tuesday.

“People don’t seem to realize the Fed does not have investors’ backs,” said Joe Lavorgna, chief economist for the Americas for French investment firm Natixis.

Lavorgna has spent 20 years following the Fed for Deutsche Bank Securities and other Wall Street firms after starting his career at the New York Fed. Responding on Twitter to a Bloomberg article saying the Fed would continue to press ahead with a campaign of steady interest-rate hikes despite turmoil in Turkey, Lavorgna, in a tweet, said this would be a “mistake.”

In a phone interview, Lavorgna explained the mistake was the “trajectory the Fed laid out in June” for five more quarter-point rate hikes by the end of 2019. “We’re at the stage where good news becomes bad news with the Fed trying to take liquidity out of the market, he said. So any upbeat economic developments, like a decline in the unemployment rate, is likely to encourage the Fed to keep raising interest rates and may embolden them to do even more, he said. The bottom line is the Fed has the wrong diagnosis, Lavorgna said. The central bank mistakenly believes that low unemployment is the ultimate cause of inflation. “It’s not,” he said. Economists actually know very little about what generates inflation, he added. Famed economist Milton Friedman’s maxim that inflation is ultimately created by money is “effectively useless” because money is impossible to measure, he said. As a result, the Fed has looked to other indicators, like spare capacity, to try to guess what causes inflation. “Low unemployment has caused inflation some times, but a lot of times it hasn’t,” he said. At the moment, the Fed has penciled in two more quarter-point rate hikes this year and three more in 2019. The market only has priced in only three moves over the same time span. If the Fed follows through with its stated path, the result would be a stronger dollar and wider credit spreads. Ultimately this will result in lower stock prices. The yield curve, the closely watched difference between short-term and long-term bond yields, would continue to flatten and ultimately invert, he said. Some regional Fed presidents have signaled they are worried about policy that resulted in an inverted yield curve, which has been a fairly reliable predictor of recessions. Other Fed officials worry the economy will run into financial stability concerns if interest rates stay low. The right thing for the Fed to do would be to “back away more” from QE, by picking up the pace of shrinking the balance sheet, he said. The Fed is slowly letting some of the securities on its balance sheet run off. After a year of steady and slow increases, the Fed will allow $50 billion of securities to be run off its balance sheet every month.

Harley-Davidson CEO pushes back against Trump, ‘misinformation’ in memo to employees

President Donald Trump meets with representatives of Harley-Davidson, including CEO Matthew Levatich (R), at the White House in Washington, U.S. February 2, 2017.
Jonathan Ernst | Reuters President Donald Trump meets with representatives of Harley-Davidson, including CEO Matthew Levatich (R), at the White House in Washington, U.S. February 2, 2017.

Harley-Davidson CEO Matt Levatich struck back against “misinformation” about the motorcycle company’s plans to move some production overseas in response to President Donald Trump’s tariffs in a memo to employees and dealers. The iconic American brand has been in a political firestorm since it announced in June it would move European production out of the U.S. because of retaliatory tariffs from the European Union. Trump has threatened to tax Harley-Davidson “like never before,” and on Sunday praised owners who plan to boycott the company. “There continues to be misinformation circulated in conjunction with this issue, and I want to reiterate and share facts about Harley-Davidson that you can both be proud of and share with interested customers,” Levatich said in a memo sent to Harley employees and dealers on Tuesday. Without mentioning Trump by name, he reiterated the company’s preference to manufacture its bikes in the U.S. as well as its explanation for the shift overseas — high tariffs in some countries make its motorcycles unaffordable in those markets. While its bikes were once taxed at 6 percent in Europe, the new tariffs raised that to 31 percent. Harley-Davidson was already under pressure because of the Trump administration’s tariff that levied a 25 percent tax on steel and aluminum imports. Harley estimated the tariffs will cost between $90 million and $100 million annually. Levatich said the company can’t bear these costs “indefinitely,” so it made the decision to build some of its bikes overseas to avoid the tariffs and give the company better access to customers abroad. “We don’t take sides in politics,” he said. “Today, however, we unfortunately find ourselves in the center of a heated political conversation about fair trade. “It is not our intention or our desire to be in this political spotlight, and the entirety of our effort and focus is to minimize any impact on this great brand, company, the business of our dealers and, critically, the passion and loyalty of our riders who we do everything for,” he said.

Turkey’s crushing annual inflation rate is running at an estimated 101%

Expert: Here's how Turkey can save the lira

 

The currency crisis in Turkey is being exacerbated by a skyrocketing annual inflation rate, which by some estimates, exceeds 100 percent. Steve Hanke, who in past helped set-up systems to stabilize currencies in Argentina and Bulgaria, told CNBC on Tuesday, “Today, I measure inflation with high-frequency data, and the inflation rate in Turkey is 101 percent on an annual basis. That’s the first time it’s been over 100 percent.” Hanke, who had served as a senior economist on President Ronald Reagan’s Council of Economic Advisers, echoed his earlier tweet:

Countries with high inflation rates relative to others tend to see their currencies depreciate.

Over the past three weeks, the Turkish lira has plummeted, with selling intensifying into Monday’s record low of 7.24 Turkish lira per dollar after President Donald Trump on Friday said he would increase tariffs on steel and aluminium originating from Turkey. The escalating tariffs were a direct attack on Turkey’s refusal to free jailed American pastor Andrew Brunson. The lira was rebounding about 6 percent on Tuesday, but still remained more than 60 percent lower than when Recep Tayyip Erdogan became Turkey’s president in August 2014. The following chart shows 5 years of dollar strength against the lira.

Erdogan, in a speech Tuesday, said Turkey will boycott U.S. electronics, including Apple‘s iPhone, suggesting the Turkish people would stand together against dollar strength and inflation the same way they did against an attempted coup of his presidency in 2016. He accused the Trump administration of economically targeting Turkey like China and Russia. He again called on Turks to change U.S. dollars into lira in order “maintain the dignity” of the currency. Buying lira with dollars would be costly as “the real yield being in Turkish dominated assets of any kind is hugely negative right now,” said Hanke, an applied economics professor at Johns Hopkins University. “They would have to raise interest rates over 100 percent per annum to stabilize the lira.” Raising interest rates is a weapon countries can use to defend their currencies However, even if Erdogan were allow rate increases, which he’s been reluctant to do, Hanke said the only way to really stop the slide in the Turkish lira is to establish a currency board.

In a recent Wall Street Journal op-ed, Hanke described the monetary-reform measure: “The sole function of a currency board is to exchange the domestic currency it issues for an anchor currency at a fixed rate.”

Tesla: Not clear yet whether Elon Musk’s plan to go private makes sense

by Chris Isidore @CNNMoney August 14, 2018:

The company’s directors said Tuesday that they had formed a special committee of three independent board members to study the proposal. And they cautioned that the board has yet to endorse the idea of taking the electric car maker private. “The special committee has not yet received a formal proposal from Mr. Musk regarding any going private transaction nor has it reached any conclusion as to the advisability or feasibility of such a transaction,” said the statement. The Tesla directors who will weigh the proposal are Brad Buss, the former chief financial officer of SolarCity, the solar panel company that Tesla purchased in 2016; Robyn Denholm, the chief operating officer of Telstra (TLSYY), a telecom; and Linda Johnson Rice, the CEO of Johnson Publishing. Musk shocked Wall Street last week when he announced by tweet that he was considering taking the company private, saying that he had “funding secured” for a deal. On Monday, he said that the financing referred to talks he has had with Saudi Arabia’s sovereign wealth fund, which he said recently bought nearly 5% of Tesla stock as it tries to diversify away from oil holdings. The fund did not answer a request for comment. Musk said the Saudis approached him repeatedly about going private, and he said he left a meeting with them on July 31 with no question that a deal could be closed — “it was just a matter of getting the process moving.” Musk said in the blog post that he needs to complete discussions with Tesla’s other major investors before he presents a formal proposal to the special committee of the board. Tesla’s(TSLA) stock was down about 1% on Tuesday at $353. That is well below the $420 price that Musk has proposed for taking the company private, and suggests many investors have doubts the deal will be completed.

Omarosa says she will provide Mueller with tapes if he needs as she claims Trump knew in advance that Wikileaks was publishing Hillary Clinton’s emails

'There is a lot of corruption that went on both in the campaign and in the White House and I'm going to blow the whistle on all of it,' said Omarosa Manigault Newman in her latest TV interview

Omarosa Manigault Newman claimed President Trump ‘absolutely’ knew about hacked Hillary Clinton emails in advance of publication during the 2016 presidential campaign, and vows she will further assist the Mueller probe if asked. The former White House official, campaign aide, and reality TV star made the claim, without providing any details, in an interview Tuesday with MSNBC amid a furor over her new book, ‘Unhinged.’ ‘There is a lot of corruption that went on both in the campaign and in the White House and I’m going to blow the whistle on all of it,’ vowed the former Trump protege turned self-styled whistleblower. Tere is a lot of corruption that went on both in the campaign and in the White House and I’m going to blow the whistle on all of it,’ said Omarosa Manigault Newman in her latest TV interview Host Katy Tur pressed Omarosa on whether Trump knew about Hillary Clinton emails in advance of publication by WikiLeaks – a topic at the heart of the Mueller Russia probe.  ‘Absolutely.  Yes.  Yes,’ she responded. But Manigault Newman, who confirmed she has spoken to Mueller’s investigators, provided no corroborating information. Manigault-Newman signed a non-disclosure and non-disparagement agreement in the summer of 2016 when she joined the Trump campaign; it requires her to refrain from denigrating him publicly ‘during the term of your service and at all times thereafter’  Manigault-Newman released audio hours earlier from what she says is a 2016 conference call in which top Trump campaign aides discussed how to handle a rumored tape recording of the future president uttering a racial slur Asked if Trump should be afraid of more tapes in her possession,’ she didn’t give a direct answer. ‘I think he should be afraid of being exposed as the misogynist, the bigot and the racist that he is.’She also wouldn’t comment on whether she had more tapes of the president, or if she planned to release more of them.  When Tur asked if Trump really had a ‘back channel’ to WikiLeaks, she responded: ‘I didn’t say that, you did.  But I will say that I am going to expose the corruption that went on in the campaign and int he White House.’

Manigault-Newman's book 'Unhinged' is on sale today

Manigault-Newman’s book ‘Unhinged’ is on sale today When pressed for details, including whether she spoke to a federal grand jury and what kind of questions she got asked by investigators, Omarosa begged off, and said she was glad to talk about her new book.  ‘I feel like my hands are tied,’ she said. ‘Unfortunately, I can’t elaborate,’ she said.   ‘I’d be happy to talk bout “Unhinged,” my book that’s out today,’ she said at one point. She declined to characterize how many tapes she had, after the release of three explosive snippets, including one Tuesday of staff aides discussing an unverified tape of Trump allegedly using the ‘N’ word – which he and other aides deny exists.    She said she was willing to turn over tapes if Mueller asks, or help in other ways. ‘If he calls me I certainly will participate with anything that he needs. I’ll provide him with what he needs,’ she said.

 She called the president she served for a year inside the White House ‘unfit’ for office.   ‘I think that he should come clean with the American people,’ she said of Trump.  She was more forthcoming about the number of tapes with MSNBC’s Chris Mathews in a previous ‘Hardball’ interview.  ‘Oh, I have plenty,’ she told him. ‘Anything Mueller would like to see? Robert Mueller?’ the host asked. ‘If he, if his office calls again, anything they want I’ll share,’ she told him.

Trump ramped up his slash-and-burn campaign, calling Manigault-Newman 'that dog' and a 'crazed, lying lowlife'

Trump ramped up his slash-and-burn campaign, calling Manigault-Newman ‘that dog’ and a ‘crazed, lying lowlife’ Asked if she would be a good witness, she said: ‘Absolutely. Anything they want, I will certainly corroborate.’  Manigault Newman, who was fired and who released a tape of chief of staff John Kelly delivering the news, also said she thinks Trump should be impeached.  Trump’s re-election campaign organization filed papers in New York on Tuesday demanding damages from Omarosa Manigault-Newman for violating the terms of a secrecy agreement she signed in 2016. The legal filing claims the onetime campaign adviser and former West Wing aide disparaged Trump in her unauthorized tell-all book ‘Unhinged,’ breaking a written promise to refrain from denigrating him publicly ‘during the term of your service and at all times thereafter.’

Patton and Pierson released a statement Tuesday morning in which they acknowledge talking about a purported 'n-word' tape but claim their denials only referred to Omarosa's description of a discussion prompted by a claim by pollster Frank Luntz that the recording existed

Patton and Pierson released a statement Tuesday morning in which they acknowledge talking about a purported ‘n-word’ tape but claim their denials only referred to Omarosa’s description of a discussion prompted by a claim by pollster Frank Luntz that the recording existed

Turkey says has action plan to ease market concerns; lira firms from record low

ISTANBUL (Reuters) – Turkey has drafted a economic action plan and will start implementing it on Monday morning to ease investor concerns, Finance Minister Berat Albayrak said on Sunday, after the lira plunged to a new record low in early Asia Pacific trade. In an interview with Hurriyet newspaper published online, Albayrak described the lira’s weakness as “an attack,” echoing President Tayyip Erdogan – who is his father-in-law – and said the action plan was ready. “From Monday morning onwards our institutions will take the necessary steps and will share the announcements with the market,” Albayrak said, without giving details on what the steps would be. Albayrak also said a plan has been prepared for banks and the real economy sector, including small to mid-sized businesses which are most affected by the foreign exchange fluctuations. “We will be taking the necessary steps with our banks and banking watchdog in a speedy manner,” he said. He has also dismissed any suggestions that Turkey might intervene in dollar-denominated bank accounts, saying any seizure or conversion of those deposits into lira was out of the question. The lira plunged to a fresh record low of 7.24 against the dollar during in Asia Pacific trade, where markets were opening for Monday morning. It pared losses after Albayrak’s comments and stood at 6.8603 at 2136 GMT Sunday. The currency has lost more than 45 percent of its value this year, largely over worries about Erdogan’s influence over the economy, his repeated calls for lower interest rates in the face of high inflation and worsening ties with the United States. Earlier, Erdogan had stood by his opposition to high interest rates, saying they were an instrument of exploitation and that Turkey was not going to fall into this trap. In the Hurriyet interview, Albayrak said budget policies were important to support and strengthen the central bank’s monetary policies. “We will be entering a strong period in terms of fiscal policies,” he said. Turkey’s banking watchdog BBDK in a statement said it was limiting banks’ foreign exchange swap transactions. Erdogan, who has called himself the “enemy of interest rates,” wants cheap credit from banks to fuel growth, but investors fear the economy is overheating and could be set for a hard landing. His comments on interest rates – and his recent appointment of his son-in-law as finance minister – have heightened perceptions that the central bank is not independent. On Sunday, speaking to supporters in Trabzon on the Black Sea coast, Erdogan dismissed suggestions that Turkey was in a financial crisis like those seen in Asia two decades ago. The lira’s free-fall was the result of a plot and did not reflect Turkey’s economic fundamentals, he said. “What is the reason for all this storm in a tea cup? There is no economic reason… This is called carrying out an operation against Turkey,” he said. The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten monetary policy at its last meeting. Erdogan repeated his call for Turks to sell dollars and buy lira to shore up the currency, while telling business owners not to stock up on dollars. “I am specifically addressing our manufacturers: Do not rush to the banks to buy dollars. Do not take a stance saying ‘We are bankrupt, we are done, we should guarantee ourselves.’ If you do that, that would be wrong. You should know that to keep this nation standing is … also the manufacturers’ duty.”

Consumers turning more pessimistic about wages, stocks, home prices, taxes

 A monthly survey conducted on consumer expectations showed a notable pessimistic trend in July.
Getty Images People walk through the Oculus transportation hub and shopping mall in lower Manhattan on July 27, 2018 in New York City.

The New York Fed’s survey of consumer expectations — based on a panel of 1,300 household heads across the United States — found declines in one-year expectations on earnings growth , household spending, stock prices and house prices. Median one-year ahead earnings (wages) growth expectations fell from 2.7% in June to 2.4% in July, dropping below its 2.5%-2.7% range since November 2017, the New York Fed said. The decline was broad based across income groups but largest among those below the age of 40. Median home price change expectations retreated from a recent high of 3.9% reached in June to 3.7%. The probability that stock prices SPX, -0.40%   will be higher in a year fell to 40.3%, the lowest level since October 2016. Median household spending growth expectations decreased by 0.1% to 3.2% in July, remaining slightly above its trailing 12-month average of 3%, the New York Fed said. The median expectation that taxes will go up in the next year — just months into a tax cut — rose for the fifth straight month, to 2.2% after the series low of 1.5% in February. Relatedly, year-ahead expected growth in government debt increased from 6.6% in June to 6.9% in July, well above the 4.9% median year-ahead growth forecast reported in July 2017. Unemployment expectations are near the series low, the perceived probability of losing one’s job in the next 12 months fell to 14% from 15.2%, and the probability of leaving one’s job voluntarily increased to 23.2%, close to the series high.

Citigroup says global card chief Linville leaving in shakeup

NEW YORK (Reuters) – Citigroup Inc said on Monday that Jud Linville, the head of global cards and consumer services, is leaving the company as part of a reorganization of executives in its global consumer banking businesses.  David Chubak, currently global retail banking head, will also oversee global branded cards and consumer lending, the bank said. Anand Selva, the current head of consumer banking in Asia, will become head of U.S. consumer banking, including branded cards, digital banking and wealth management. The changes were described in a memo from Stephen Bird, chief executive of Citigroup’s global consumer banking business. Linville, formerly of American Express Co, had been at Citigroup for eight years and had streamlined the company’s line up of cards. But in recent years, the division has failed to meet targets after encountering stiff competition from JPMorgan Chase & Co for premium card customers and after outbidding American Express for the card business of retailer Costco Bird said in the memo that the reorganization was designed to “harmonize” the operations of Citigroup’s global consumer banking businesses. Citigroup said in July 2017 it expected the global consumer banking businesses to provide much of the profit growth it expects by 2020. Anand has been with Citigroup for 26 years, the last three of which he has been responsible for the consumer business in 17 countries, primarily in Asia, Bird said. Citigroup has said it is bringing to the United States advanced digital consumer banking tools that it developed in Asia. The bank is setting out this year to market a digital banking app across the United State to people who live far from its branches, which are located around just six U.S. cities. It hopes the digital move will bring in more deposits and support its Citigold accounts for wealthier individuals. Bird said the changes align the U.S. business with the model Citigroup uses in Asia and Mexico that has produced “cross-product synergies, greater collaboration and accelerated speed to market and decision-making.”

FBI Agent Peter Strzok Fired Over Anti-Trump Texts

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An FBI counterintelligence agent who helped lead the investigation of Russian interference in the 2016 presidential election but was removed for sending text messages critical of President Donald Trump has been fired. Peter Strzok’s attorney Aitan Goelman revealed in a statement on Monday that his client was fired on Friday on the orders of FBI Deputy Director David L. Bowdich. Suggesting the firing of Strzok was politically motivated, Goelman noted the FBI office that typically handles discipline recommended the agent’s demotion and a 60-day suspension. Goelman claimed the decision to fire Strzok is a departure from typical FBI practice and contradicts Director Christopher Wray’s assurances that the bureau intended to follow its regular process. “This isn’t the normal process in any way more than name,” Goelman said. “This decision should be deeply troubling to all Americans.” Strzok, who played key roles in both the Russia probe and the investigation of Hillary Clinton’s use of a private email server while Secretary of State, has faced considerable criticism for his anti-Trump texts. An inspector general report found the texts between Strzok and former FBI lawyer Lisa Page cast a cloud over the entire investigation but did not directly affect specific investigative actions. Nonetheless, Trump and Republican lawmakers have argued the texts provide proof that the Russia investigation is biased. Trump celebrated Strzok’s firing in posts on Twitter and questioned whether special counsel Robert Mueller’s investigation will now be dropped. “Agent Peter Strzok was just fired from the FBI – finally. The list of bad players in the FBI & DOJ gets longer & longer,” Trump tweeted. “Based on the fact that Strzok was in charge of the Witch Hunt, will it be dropped?” he added. “It is a total Hoax. No Collusion, No Obstruction – I just fight back!” In a separate tweet, Trump suggested the Clinton email investigation should be reopened due to Strzok’s role in the probe. “Just fired Agent Strzok, formerly of the FBI, was in charge of the Crooked Hillary Clinton sham investigation,” Trump tweeted. “It was a total fraud on the American public and should be properly redone!”

Oil ends lower—but off intraday nadir—amid supply worries

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Oil futures lost ground Monday, but ended off session lows after tumbling sharply on expectations for an increase in crude stocks at the delivery hub for U.S. futures and data showing a pickup in production by OPEC. The U.S. benchmark, West Texas Intermediate crude for September delivery CLU8, -0.47%  on the New York Mercantile Exchange, fell 43 cents, or 0.6%, to end at $67.20 a barrel after sinking as low as $65.71. Brent crude, the global benchmark also declines, with October crude LCOV8, -0.10%  ending down by $1.49, or 0.3%, at $72.61 a barrel on the ICE Europe exchange. Brent traded as low as $71.04. Traders said the leg down for futures came after Genscape, a market intelligence firm, predicted a rise in inventories at the Cushing, Okla., delivery hub for Nymex crude futures. Official Energy Information Administration data are due Wednesday morning. The resulting weakness had taken futures below important support at $66.14 and then $66, said Robert Yawger, director of energy at Mizuho USA. The move came as speculators continued to hold large net long positions. Meanwhile, crude was already under pressure after the Organization of the Petroleum Exporting Countries earlier Monday said production by cartel members rose by 41,000 barrels a day in July even as output by Saudi Arabia fell. Also, Turkey’s currency crisis appeared to put some indirect pressure on U.S. oil futures Monday, with analysts tying modest weakness partly to a stronger dollar. Oil saw some strength at the end of last week after the International Energy Agency said renewed sanctions against Iran could create supply problems later in the year, but a firmer dollar “offset the move higher and with the start of the new week oil prices began moving downward again,” said Fiona Cincotta, senior market analyst at City Index, in a note. Turkey’s currency USDTRY, +8.3189% plunged again on Monday, sending shock waves through other emerging markets. After falling around 10%, the lira pared gains but remained sharply lower after Turkey’s central bank made policy moves that failed to fully alleviate investor worries. The turmoil provided support for traditional haven currencies like the Japanese yen and Swiss franc and lifted the dollar versus most rivals. The ICE U.S. Dollar Index DXY, +1.23% a measure of the U.S. unit against a basket of six major rivals, rose 0.1% to 96.42 to trade at a more-than-one-year high. Meanwhile, analysts at JBC Energy in Vienna said that while Turkey’s woes appeared to have little direct effect on oil last week, it was worth noting that Turkey was expected to see relatively robust growth in product demand this year of around 5%, or 50,000 barrels a day, which is now at risk. “The sharp drop in the lira is also likely to have an impact on regional refined product markets, as Turkey is one of the major importers in the Med region, with product net-imports of 360,000 [barrels a day] last year and crude imports were roughly half a million barrels a day,” they said, in a note.

More than 1 million people default on their student loans each year

Getty Images More than 1 million student loan borrowers each year go into default.

Outstanding education debt in the U.S. has tripled over the last decade and now exceeds $1.5 trillion, posing a greater burden to Americans than auto or credit card debt. For many, the payments are proving unmanageable. By 2023, nearly 40 percent of borrowers are expected to default on their student loans. That’s when a person has not made a payment toward their education debt in roughly a year, triggering it to be sent to a third-party collection agency. Student debt could hold back economic growth, Fed chief says  What kind of student loan borrowers are at risk of defaulting? And what’s the financial impact on them of doing so? A new report from the Urban Institute, a progressive think tank in Washington, D.C., answers these questions. The researchers analyzed the fates of borrowers who entered repayment in 2012. Federal loans come with a lot of protections that should make default rare, said Kristin Blagg, a research associate at the Urban Institute, focusing on education. However, she learned, that is not the case: Within four years after leaving school, nearly a quarter of the borrowers had defaulted. “To default is still pretty common,” Blagg said. She added, “I found that these are borrowers who tend to be in financial distress.” Defaulters are less likely than nondefaulters to have types of debt that require a risk assessment, like credit card, auto and mortgage debt. They’re more likely than nondefaulters to have their utility and medical bills fall into collections, as well. Blagg said these additional debt pressures can explain, at least in part, why some borrowers might be putting off their student loan payments. “The issue of default appears to be more concentrated in neighborhoods of color.” -Kristin Blagg, a research associate at the Urban Institute, focusing on education People who default on their student loans are more likely to live in Hispanic and black neighborhoods, Blagg found. Previous research has shown that people of color are more burdened by their education debt, because they have less parental wealth to draw on as well as higher rates of unemployment. In addition, the average defaulter resides in an area where the median income is around $50,000, compared with around $60,000 for nondefaulters. Ironically, those with the smallest loan balances are the most likely to be unable to pay off their debt. Almost 1 in 3 people who owe less than $5,000 for their education default within four years, compared to just 15 percent of borrowers who owed more than $35,000, the Urban Institute found. This is in large part because many students who drop out of school have less debt, but are more burdened by it since they don’t have the benefit of a degree, said Mark Kantrowitz, a student loan expert. In addition, he said, “They often lack awareness of options for dealing with the debt, such as deferments, forbearances, income-driven repayment and loan forgiveness.” By the time a person’s student loans fall into default, they will see their credit score tank around 60 points, to an average of around 550, which is considered “very poor,” by rating company Experian. Borrowers who stay current, on the other hand, have scores on average in the high 600s. A low credit score can force people to pay higher interest rates, delay buying a house and even have to worry about being disqualified from certain jobs. The government also has extraordinary collection powers with federal loans, since they’re one of the only debts unable to be discharged in bankruptcy. “Negative effects of student loan default can be wage garnishments, tax offsets, and other methods of loan collections,” said Elaine Griffin Rubin, senior contributor and communications specialist at Edvisors. “In addition, some states suspend or revoke state-issued professional licenses, and some states suspend a driver’s license because of a defaulted loan.” To make matters worse, defaulting on your education debt also increases the balance, likely due to collections fees and the accumulation of interest. After default, the Urban Institute found, a student loan borrower will see their balance balloon by around 10 percent. These myriad consequences that come with a default can be hard to recover from, Kantrowitz said. “At best, it delays participation in the American Dream,” he said. “At worst, they are shut out permanently.”

Germany Says Trump’s Tariffs, Sanctions Destroy Jobs and Growth

Image: Germany Says Trump's Tariffs, Sanctions Destroy Jobs and Growth

German Economy Minister Peter Altmaier has sharply criticised U.S. President Donald Trump’s tariffs and sanctions policies, saying such measures were destroying jobs and growth and that Europe would not bow to U.S. pressure regarding Iran. The United States has triggered a bitter tit-for-tat trade dispute with import tariffs meant to protect American jobs against what Trump calls unfair trade practices from China, Europe and other countries.

Trump’s determination to push ahead with sanctions on Tehran which also target European companies doing business with Iran has opened another battle front.

“This trade war is slowing down and destroying economic growth – and it creates new uncertainties,” Altmaier told Bild am Sonntag newspaper, adding that consumers suffered the most because higher tariffs were driving up prices. Altmaier lauded the agreement reached by European Commission President Jean-Claude Juncker during negotiations with Trump last month, saying the interim deal had saved hundreds of thousands of jobs in Europe. The U.S. and the European Union are embroiled in a spat after Trump imposed tariffs on aluminum and steel imports and Brussels responded with retaliatory tariffs on some U.S. goods. Trump had also threatened to impose tariffs on EU auto imports but reached an agreement to hold off on taking action after meeting with Juncker at the White House last month. “The agreement between the EU and U.S. can only be a first step. Our goal is a global trade order with lower tariffs, less protectionism and open markets,” Altmaier said. Turning to the U.S. sanctions against Iran, the minister said Germany and its EU allies would continue to support companies doing business with Iran despite U.S. pressure. “We won’t let Washington dictate us with whom we can do business and we therefore stick to the Vienna Nuclear Agreement so that Iran cannot build atomic weapons,” Altmaier said. German companies should be allowed to continue to invest in Iran as much as they want and the German government is looking for ways together with its European allies to ensure that financial transactions could still take place, he added. Several European companies have suspended plans to invest in Iran in light of the U.S. sanctions, including oil major Total as well as carmakers PSA, Renault and Daimler. German business associations have warned that companies are increasingly suffering from Trump’s sanctions policies – including those against Iran – as well as the tariffs he is imposing in the escalating trade conflict with China. The trade and sanctions disputes are clouding the growth outlook for Germany, Europe’s largest economy, but Altmaier said he nonetheless expected strong growth this year due to vibrant domestic demand, record-high employment and rising wages. The Federal Statistics Office will publish preliminary gross domestic product figures for the second quarter on Tuesday, with analysts expecting the quarterly growth rate to pick up to 0.4 percent after 0.3 percent in the first quarter.

Trump backs Harley-Davidson boycott in tariff row

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Donald Trump has tweeted that it is “great” that many Harley-Davidson owners plan to boycott the firm as a row over tariffs escalates. The US president said “most other firms… including Harley competitors” agreed with his decision to impose tariffs on steel and aluminium imports. In June, Harley-Davidson said it would move some production out of the US to avoid retaliatory tariffs from the EU. Mr Trump has already attacked the move, threatening Harley with higher taxes. Harley-Davidson refused to comment on Mr Trump’s latest criticism, but pointed to an interview chief executive Matthew Levatich did with CNBC last month. In the interview, Mr Levatich said the firm’s preference “in all cases is to supply the world from the United States”. He said, however, that the firm had invested in international manufacturing over the past 20 years because “trade and tariff situations in certain markets” made it “prohibitive” without this investment. “We’re only doing that because these are important growth markets for the company that, without those investments, we wouldn’t have access to those customers, at any kind of reasonable price,” he said. Harley-Davidson warned last month that its profit margins this year were likely to halve as trade tariffs bit. Harley-Davidson expects added costs of $45m-$50m this year, due to the EU tariffs, as well as higher aluminium and steel prices. The company said in June it would shift some motorcycle production away from the US to avoid the “substantial” burden of European Union tariffs. It has assembly plants in Australia, Brazil, India and Thailand as well as in the US, but it has not said which plant would take up the extra production. Mr Trump has said tariffs on steel and aluminium imports, which came into force this spring, are necessary to protect the US steel and aluminium industries – he maintains these are vital for national security. The tariffs have drawn retaliation from the EU, Canada, Mexico, India and others while driving up the cost of metals for manufacturers in the US. The US has also threatened to hit billions of Chinese imports with import taxes, some of which are already in effect. It is also considering tariffs on foreign cars and vehicle parts.

Top U.S. Gen. Warns: Islamic State in Afghanistan ‘Harboring Intentions’ to Attack West

Fighters with Afghanistan's Taliban militia talk with villagers in Ahmad Aba district on the outskirts of Gardez, the capital of Paktia province, on July 18, 2017. Civilian deaths in Afghanistan hit a new high in the first half of 2017 with 1,662 killed and more than 3,500 injured, the United …
FARIDULLAH AHMADZAI/AFP/Getty Images
The Islamic State (ISIS/ISIL) branch in Afghanistan has become a significant menace against the West despite the fall of the group’s caliphate in Iraq and Syria, a top American commander warned this week.

In June, Brig. Gen. Lance R. Bunch, the top U.S. air commander in Afghanistan, noted that the ISIS wing has attempted to “establish” its own “caliphate” twice this year alone in the eastern Afghan province of Nangarhar along the Pakistan border, considered the group’s primary stronghold in the region. U.S.-NATO-assisted Afghan National Defense and Security Forces (ANDSF) have so far managed to thwart the ISIS attempt to establish a caliphate in Afghanistan, Gen. Bunch declared. Gen. Joseph Votel, the chief of U.S. Central Command (CENTCOM), charged with overseeing the war in Afghanistan, warned Pentagon reporters on Wednesday the American military is “concerned” ISIS in Afghanistan intends to attack the West. “I think we always have to be concerned about ISIS, whether it’s ISIS-K or whether it’s any of the other branches of it, harboring intentions to operate, you know, much more globally or externally from the areas in which they’re operating.  And so, you know, we do have that concern about them,” Votel said. The ISIS branch in South Asia, which primarily operates in Afghanistan and Pakistan, is known as the Khorasan Province (ISIS-K). Asked whether the U.S. military is aware any links between ISIS-K and outside groups that would potentially carry out attacks in Europe or against the United States, Gen. Votel responded: “I think in general ISIS does have that intention.” When pressed to describe any actual plots by ISIS-K on the West, the top commander added, “I think there probably has been, but I can’t cite a specific example to you.” Back in October 2016, the U.S. military acknowledged that ISIS was “very focused on trying to establish their caliphate, the Khorasan caliphate, inside Afghanistan.” ISIS officially announced its presence in Afghanistan in early 2015, less than a year after the United States declared its combat mission over at the end of 2014. The U.S. has been assisting the Afghan forces in their fight against ISIS in their stronghold of Nangarhar. “We have killed numerous ISIS-K fighters this year,” Gen. Votel told reporters Wednesday. “The military campaign against ISIS has been both continuous and effective.” The general stressed that U.S. efforts towards “reconciliation” between Kabul and the Taliban, the primary goal of American President Donald Trump’s strategy to end to the nearly 17-year-old war, are separate from the fight to annihilate ISIS. “It is important to recognize that while we apply military pressure against the Taliban to bring them to the table of reconciliation, we harbor no illusion about reconciliation with ISIS-K; our mission is to destroy this organization,” he declared. Citing U.S. officials and the latest American intelligence estimates, Voice of America (VOA) reported this week that efforts to root out and decimate ISIS-K have “so far failed to prevent the terror group from maintaining a foothold in the country.” “IS-Khorasan is thought to have more than 1,000 fighters, most of them located in Afghanistan’s southern Nangarhar province, with a small number operating in the country’s eastern Kunar province,” VOA added. The ISIS branch reportedly reached a peak of 3,000 fighters in Afghanistan. According to a report from the United Nations Mission in Afghanistan (UNAMA), ISIS-K was behind more than 50 percent of civilian casualties in the war-ravaged country through the first half of 2018. The University of Maryland’s renowned National Consortium for the Study of Terrorism and Responses to Terrorism (START) listed ISIS-K among the 10 top prolifically deadliest terrorist group’s in the world last year, separate from core Islamic State in Iraq and Syria. Last year, ISIS-K carried out 197 attacks, killing 1,302 people, the study revealed.

Seattle-Tacoma plane hijacker ‘had full airport credentials’

A 29-year-old man who stole an empty passenger jet from Seattle airport and then crashed it was an airline worker with full credentials, authorities say.He had worked for Horizon Air for more than three years, towing and tidying aircraft and loading bags. The man, not yet named, took off late on Friday, forcing the airport to close while two fighter jets gave chase. After making “incredible manoeuvres”, he crashed the plane in Puget Sound and did not survive. Transcripts of his conversation with air traffic control reveal a man who appears surprised about his feat, who is unclear as to the full operations of the plane, who has no intention to hurt anyone and who ultimately apologises to his loved ones, saying he is “just a broken guy”. Airline and airport officials gave a press briefing on Saturday morning in Seattle. They declined to give the man’s name. Mike Ehl, director of aviation operations at the airport, said the man “had access legitimately” to the plane and that “no security violations were committed”. Alaska Airlines CEO Brad Tilden said the man had been “background checked”. “He worked his shift yesterday and we believe he was in uniform,” he added. Gary Beck, CEO of Horizon Air, said that “to our knowledge, he didn’t have a pilot’s licence” and that he had no idea how the man had gained the skills to fly such a “complex machine”. The man was believed to be the only person on board but that has not been confirmed. The FBI is carrying out the investigation. The 76-seat, twin-engine turboprop Bombardier Q400, belonging to Horizon Air, took off from Seattle-Tacoma International Airport at 19:32 local time (02:32 GMT). Officials say the man used a pushback tractor to first manoeuvre the plane 180 degrees from a maintenance location into the correct position for take-off. After take-off he performed at least one dramatic roll, pulling the aircraft up just metres from the water before gaining altitude again. The North American Aerospace Defense Command (Norad) issued a statement saying that two F15 fighter jets were launched from Portland to intercept. A number of videos showed them following the passenger plane, which was flying in an erratic manner. Norad said the F15s were “working to redirect the aircraft out over the Pacific Ocean when it crashed on the southern tip of Ketron island”, about 30 miles (48km) south of the airport. “Norad fighters did not fire upon the aircraft,” it said.

Hulu loses in the neighborhood of $1.5 billion a year, and Disney is set to double its stake

Bob Iger, chairman and chief executive officer of The Walt Disney Co.
Patrick T. Fallon | Bloomberg | Getty Images Bob Iger, chairman and chief executive officer of The Walt Disney Co.

As of this week, Hulu’s major stakeholders have all reported earnings for the most recent quarter — and all three posted some big losses for the streaming service as it ramps up investments. Hulu doesn’t report official numbers — and declined to comment for this story — but some rough math of write-downs by Comcast, Disney and Twenty-First Century Fox puts Hulu’s annual losses in the neighborhood of $1.5 billion. Each company owns 30 percent of Hulu. Comcast, which also owns CNBC-parent NBCUniversal, and Fox both attributed losses to Hulu that had doubled from the year-ago quarter. Comcast posted a $107 million loss from Hulu and Fox posted a $127 million loss. Four quarters of losses that size, accounting for the companies’ shares, puts annual losses for Hulu between $1.3 billion and $1.6 billion. Research firm BTIG in February estimated Hulu’s 2017 losses at under $1 billion. Disney, the only company of the three not to break out losses for Hulu, noted repeatedly in its earnings release and on the company’s earnings call that financials dipped for the fiscal third quarter in part due to “higher losses from Hulu.” And yet, Disney is about to double its stake in Hulu once it closes its proposed acquisition of Fox. A representative for the company wasn’t immediately available to comment for this story. If anything, the willingness to take on double the losses is credit to Disney’s ambitions in streaming and over-the-top, direct-to-consumer content. The company last year announced plans to launch an in-house streaming service to compete with industry leader Netflix. But the company has said it’ll be at least another a year before launch, and drawing eyes from incumbents will take time.”[CEO Bob] Iger seems committed to Hulu,” Argus Research Analyst Joe Bonner said in an email to  CNBC. “As he should be since it’s an OTT streaming platform that is already up and running, rather than the prospective one that management is currently promising for the end of next year and even if delivered on time will take years to build a subscriber base.” Hulu executives have warned shareholders of growing losses as the company invests in building a subscriber base to rival Netflix’s. In May, the company announced it had surpassed 20 million American subscribers, having added 3 million subscribers since January. Netflix, for comparison, reported 57 million U.S. subscribers for the last quarter, an increase of fewer than 1 million subscribers over the three-month period. “Investing in Hulu right now is probably money well spent and should not significantly impair [Disney’s] balance sheet,” Bonner said.

Exclusive: Saudi Arabia’s PIF has shown no interest in bankrolling Tesla buyout – sources

DUBAI/RIYADH/LONDON (Reuters) – Saudi Arabia’s Public Investment Fund (PIF) has shown no interest so far in financing Tesla Inc (TSLA.O) CEO Elon Musk’s proposed $72 billion deal to take the U.S. electric car maker private, despite acquiring a minority stake in the company this year, two sources familiar with the matter said. The 47-year-old investor and engineer stunned financial markets on Tuesday when he said on Twitter that he was considering a take-private deal for Tesla, an auto manufacturing pioneer that developed the world’s first luxury all-electric sedan car. He also said he had secured funding for the proposal, without providing details. Investors and analysts viewed PIF as a natural financing partner. Beyond amassing a stake of just below 5 percent in Tesla, the sovereign wealth fund has poured tens of billions of dollars into technology investments, including $45 billion in SoftBank Group Corp’s (9984.T) Vision Fund over five years. However, a source who is familiar with PIF’s strategy said it was not currently getting involved in any funding process for Tesla’s take-private deal. A second source close to the situation also said PIF was not taking part in any such plan at this stage. This source said that the Saudi fund would not make an investment of this kind without seeking guidance first from Softbank. Reuters reported on Wednesday that SoftBank was not currently pursuing a deal for Tesla given its investment earlier this year in rival GM Cruise. PIF’s reluctance will add to the pressure on Musk to produce details of his financing plan. Tesla’s board has not received a detailed financing plan from him and is seeking more information, Reuters reported on Thursday. The board will make a decision on whether to hire advisers and launch a formal review of Musk’s take-private proposal in the coming days, based on how much detail on the financing plan it receives from Musk, a third source said. The sources requested anonymity because the deliberations are confidential. A spokesman for PIF was not immediately available for comment. A Tesla spokesman declined to comment on behalf of the company and Musk. The U.S. Securities and Exchange Commission has contacted Tesla to ask about Musk’s assertion on Twitter that funding for his proposed deal was “secured”, the Wall Street Journal reported on Wednesday.

Turkey is a ‘target of economic war’, Erdogan says

Turkish President Tayyip Erdogan talks to media in the Black Sea city of Ordu, Turkey August 11, 2018. Cem Oksuz/Presidential Palace/Handout via REUTERS

ISTANBUL (Reuters) – President Tayyip Erdogan denied on Saturday that Turkey is in a currency crisis, dismissing a plunge in the lira as ‘fluctuations’ which have nothing to do with economic fundamentals. Turkish President Tayyip Erdogan talks to media in the Black Sea city of Ordu, Turkey August 11, 2018. Cem Oksuz/Presidential Palace/Handout via REUTERS. Speaking after U.S. President Donald Trump doubled tariffs on Turkish steel and aluminum imports, Erdogan described Friday’s 18 percent fall in the lira to a record low as the ‘missiles’ of an economic war waged against Turkey. Erdogan said those who plotted against Turkey in a failed coup attempt in July 2016 were now trying to target the country through its economy, and pledged to fight back. He did not name any countries. “Those who can’t compete with us on the ground have brought online fictional currency plots that have nothing to with the realities of our country, production and real economy,” Erdogan told a provincial meeting of his AK Party in the Black Sea coastal town of Rize. “The country is neither crumbling, nor being destroyed or bankrupt or in a crisis,” he said, and added that the way out of the ‘currency plot’ was to boost production and ‘minimize interest rates’. The Turkish lira has lost about 40 percent this year alone, largely over worries about Erdogan’s influence over the economy, his repeated calls for lower interest rates in the face of high inflation and deteriorating ties with the United States. The two governments have been at odds over a wide range of topics – from diverging interests in Syria, to Turkey’s ambition to buy Russian defense systems, and the case of evangelical pastor Andrew Brunson, who is on trial in Turkey on terrorism charges. Erdogan also appeared to allude to a ‘deadline’ for handing over Brunson, although he did not name the United States as having set any such deadline or say precisely when it might have expired. “(They are) threatening, saying you will send (him) until 6 pm … This is not some random country. This is Turkey,” he said. A Turkish delegation visited Washington for talks this week but left with no signs of a breakthrough. After almost 20 months in a Turkish jail, Brunson was moved to house arrest in July by a court. Since then Trump and his vice president Mike Pence have repeatedly called for his release while Ankara said the decision was up to the courts. Washington in response sanctioned two Turkish ministers and Trump on Friday announced it was doubling the tariffs on steel and aluminum imports from Turkey, saying relations with Ankara were “not good at this time”. An important emerging market, Turkey borders Iran, Iraq and Syria and has been mostly pro-Western for decades. Financial upheaval risks further destabilizing an already volatile region. A meeting on Friday unveiling a new economic approach by Turkey’s finance minister Berat Albayrak, Erdogan’s son-in-law, did little to offer support for the free-falling lira as investors sought concrete steps such as an interest rate increase to restore confidence. “I am asking you. What possible reason could there be behind the lira which was at 2.8 against dollar in July 15, 2016 to slide below 6 yesterday? During this period, Turkey has set records in its exports, production and employment,” Erdogan said. He repeated a long-standing plan to shift to trading in national currencies and said Turkey was preparing for such a step with Russia, China and Ukraine. He also repeated his call to Turks to sell their dollar and euro savings to shore up the lira. “If there are dollars under your pillow, take these out… Immediately give these to the banks and convert to Turkish lira and by doing this, we fight this war of independence and the future,” he said. He also said it was a pity that Washington chose Brunson over Turkey, its partner in NATO, and in an opinion piece in the New York Times, he warned the United States that Ankara had other alternatives as allies. Washington “must give up the misguided notion that our relationship can be asymmetrical”, he said in the opinion piece. Turkey, home to the Incirlik air base which is used by U.S. forces in the Middle East, has been a NATO member since the 1950s. It is host to a critical part of the Western alliance’s missile defense system against Iran. In a separate opinion piece in the pro-government newspaper Daily Sabah, Erdogan’s spokesman Ibrahim Kalin said Turkey’s efforts to solve the crisis with diplomatic methods had been dismissed by the Trump administration, warning that “the U.S. runs the risk of losing Turkey” as an ally. “The entire Turkish public is against U.S. policies that disregard Turkey’s legitimate security demands. Threats, sanctions and bullying against Turkey will not work,” he said.

British mother jailed in Dubai with four-year-old daughter over wine and visa row

Italy should scrap balanced budget clause in constitution – Di Maio

FILE PHOTO: Italian Minister of Labor and Industry Luigi Di Maio speaks at the Italian Business Association Confcommercio meeting in Rome, Italy, June 7, 2018. REUTERS/Tony Gentile/File Photo

ROME (Reuters) – Italy should scrap a clause in its constitution obliging it to run a balanced budget, deputy Prime Minister Luigi Di Maio said, adding that the government was not yet working on the matter. “I think that in future it should be cancelled,” Di Maio said in a television interview on Thursday evening. Di Maio said getting rid of the clause was in the “contract” drawn up by the ruling coalition made up of his own 5-Star Movement and the right-wing League before it took office in June. He said the government was now concentrating on keeping its pledges to guarantee a minimum income for the poor, cut taxes and reform the pension system to make it possible to retire earlier. The balanced budget constitutional amendment was approved by parliament in April 2012 during the euro zone debt crisis, under the government led by Mario Monti. It had been presented the previous year by Monti’s predecessor Silvio Berlusconi in an effort to calm financial markets as Italy’s borrowing costs increased. The clause came into effect from 2014 but since then Italy has never achieved a balanced budget and parliament has voted to make a temporary exception each year to approve the governments’ spending plans. The new 5-Star/League administration says the best way to bring down public debt is by investing more to boost economic growth, rather than try to balance the budget each year. The government contract said the balanced budget rule needed changing because it “makes it impossible to adopt effective anti-cyclical policies.” However, Prime Minister Giuseppe Conte said on Wednesday the government had no plan to scrap the balanced budget clause. “It’s there and it’s staying there,” he said when asked about the issue at a news conference.

ExxonMobil to support $2bn Permian Highway Pipeline project in US

Exxon Mobil signed a letter of intent (LOI) to support the proposed $2bn Permian Highway Pipeline (PHP) Project in the US.

Under the LOI, Exxon Mobil will serve as a shipper on the proposed Permian Highway pipeline project, which is being developed by the joint venture of Kinder Morgan subsidiary Kinder Morgan Texas Pipeline (KMTP), Apache and EagleClaw Midstream Ventures. The LOI allows ExxonMobil subsidiary XTO Energy to contract for up to 450,000 dekatherms per day (Dth/d) of capacity on the pipeline. XTO Energy president Sara Ortwein said: “We are committed to supporting development of the infrastructure needed for our planned production growth in the Permian Basin. “The Permian Highway Pipeline will provide additional capacity for reliable transportation of natural gas to the U.S. Gulf Coast.” The 430-mile PHP Project is intended for transportation of excess natural gas produced from the Permian Basin to the market areas along the Texas Gulf Coast. With a design capacity of up to two billion cubic feet per day (Bcf/d), the of 42-inch pipeline will transport the natural gas from the Waha, Texas, area to the US Gulf Coast and Mexico markets. Scheduled to be commissioned in late 2020, the PHP project is subject to the signing of definitive agreements and the receipt of construction permits. Kinder Morgan Natural Gas Midstream president Sital Mody said: “We are very pleased to have an industry leader like ExxonMobil support our project and are encouraged by the significant progress we have made with our co-developers and other potential shippers to rapidly shore up commitments. “We expect this development will accelerate our path to a final investment decision.” Earlier, KMTP and EagleClaw agreed to be the initial partners, each with a 50% ownership interest in the project. In addition, Apache and EagleClaw will serve as significant shippers on the proposed pipeline. Apache will also have the option to acquire stake from the initial partners.

Traders are expecting a big stock market move soon: ‘There are a lot of bets across the table’

Pedestrians walk past an entrance to the Wall Street subway station near the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images Pedestrians walk past an entrance to the Wall Street subway station near the New York Stock Exchange.

Will there be a summer swoon, or a rocket rally? Markets are wound tight, despite a typical seasonal slowdown. It’s the second week of August. There’s not a lot of news, half the trading community is out, volumes are low, and stocks are moving in a narrow range. And yet, the markets can easily move very quickly. “I think we’ll see a big move before Labor Day, but I’m uncertain which direction it will come,” Miller Tabak’s Matt Maley told me. That’s typical of market sentiment right now: a feeling that the complacency could change very quickly. “There are a lot of bets across the table,” UBS’ Art Cashin told me Thursday morning. He’s right, there are a lot of lopsided bets being made on stocks, bonds, and the dollar. What kind of bets?

Consider:

1) All the major stock indices are at or near record highs. And yet there is considerable anxiety about a market pullback, led by technology. Just this morning, Morgan Stanley downgraded the semiconductor industry, saying the semiconductor cycle is showing signs of overheating. Maley has rotated into defensive names like health care: “If you’re in those names, you’ll have some downside protection, but should still be able to participate if the market breaks out further,” he told me.

2) Volatility (VIX) is near the lows for the year, about as low as it can go. With the exception of a good part of 2017, the VIX has rarely remained near 10 for very long. Hedge funds appear to have taken exposures down into the less liquid August period. The VIX curve has steepened: short-term volatility has dropped considerably, call buying has increased.

“Trump is on vacation, but with the VIX this low, the hedge funds seem happy to take the summer off,” Peter Tchir, Macro Strategist at Academy Securities, told me. “The ‘sell volatility’ strategy seems very overcrowded to me, and I have been encouraging clients to bet against it.”

He expects a plus or minus five percent move in the S&P 500 by mid-September.

3) Traders are continuing to heavily short Treasuries, betting that rates will be rising as the Federal Reserve continues to push up short-term rates. Yet buyers of long-term Treasuries have been unusually persistent, contributing to a flattening of the yield curve.

4) Inflation numbers have remained relatively tame, but it took very little to get the markets very worried earlier in the year. Jim Paulsen at Leuthold Group noted that “it was inflation/overheat/Fed which began this correction in January and the bad wage number which worsened it in February. Since, we have not had any more bad wage numbers. However, aren’t we just another one-off “Bad” Payroll Friday from being back again in February?”

5) Traders are continuing to bet the dollar rally will continue. Speculators have raised bullish bets on the dollar to the highest levels since January 2017. There’s been particular weakness in the Chinese yuan in conjunction with trade war rhetoric, but also in Russia, Turkey, and some emerging market currencies. The pound has made a new low, the euro is not acting well. This should be a significant headwind for international equities, but it hasn’t been:

“It’s been impressive the market is holding up so well with the dollar grinding higher,” Alec Young, Managing Director for Global Markets Research at FTSE Russell, told me.

6) Traders have continued to express surprise that the growing China trade war has made such a small impact on our markets. “China’s markets have bared a significant burden while our markets continue to ignore it and climb higher,” Michael O’Rourke from Jones Trading told me. “If [China President] Xi decided to aggressively ramp up his rhetoric in the next few weeks prior to the comment period ending (9/6) for our next $200 Billion in tariffs it could create volatility in a thin tape,” he said.

European shares tumble as Turkish turmoil hits banks

FILE PHOTO: The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, March 20, 2018. REUTERS/Staff/File Photo

MILAN (Reuters) – European shares fell on Friday morning as worries over a plunging Turkish lira weighed, with banks most exposed to the country among the biggest losers. Shares in France’s BNP Paribas (BNPP.PA), Italy’s UniCredit (CRDI.MI) and Spain’s BBVA (BBVA.MC) fell by around 3 percent after the Financial Times reported that the European Central Bank is concerned about their exposure to Turkey in light of the lira’s dramatic fall. While most sectors were trading in negative territory, banks were the biggest sectoral fallers, down 1.3 percent. By 0714 GMT, the pan-European STOXX 600 index was down 0.5 percent. “There are some big moves still in Turkey and Russia that are preventing everyone from enjoying the summer,” said Deutsche Bank strategists Jim Reid and Jeff Cai in their morning note. Elsewhere, a profit warning from K+S (SDFGn.DE) sent shares in the German potash miner tumbling 8.8 percent to the bottom of the STOXX index.

Lira collapses as Erdogan tells Turks: They have ‘their dollars,’ we have ‘our god’

President Donald Trump is seen during his meeting with Turkish President Recep Tayyip Erdogan (not seen), at Lotte Hotel in New York, United States on September 21, 2017. World leaders gathered in New York for the 72nd Session of the UN General Assembly.  
Trump puts pressure on Turkey with doubled tariffs
 

The Turkish lira has collapsed to an all-time low against the dollar, but the country’s leader has brushed aside concerns, telling Turks “we have our God.” The Turkish President Recep Erdogan then followed those comments up Friday by urging Turks to sell dollars and gold and buy lira. At around 8:00 a.m. ET Friday, the lira had fallen to $7.081, an almost 11 percent loss for the session. It has since pared some losses. As recently as April one dollar bought about four Turkish lira. The first wave of selling came early Friday after a Turkish delegation returned from the United States with apparently no progress on the detention of a U.S. pastor. The evangelist, Andrew Brunson, is charged with supporting a group blamed for an attempted coup in 2016. President Donald Trump said in July that the U.S. would place “large sanctions” on the country for the pastor’s detention. On Friday, Trump appeared to back that position up by posting on Twitter that he would double the level of tariffs on steel and aluminum to 20 percent and 50 percent respectively.

So far there has been no confirmation to CNBC of the policy from the United States Department of Commerce.

Late Thursday, and prior to Trump’s tweet, Erdogan said he would stand up to pressure from the United States. “There are various campaigns being carried out. Don’t heed them,” Erdogan said Thursday. “Don’t forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now,” Erdogan told supporters. On Friday afternoon Erdogan dug in again, calling for citizens to convert out of dollars and gold and buy the lira to help fight a “national struggle”. In response, the currency renewed its sell-off. In his speech in the northeastern city of Bayburt, Erdogan added that he would decisively defend the country against economic attacks. The lira’s three-month implied volatility gauge hit its highest since late 2008. Implied volatility shows the market’s opinion of the currency’s potential moves. If the implied volatility is high, the market things the currency has potential for large price swings in either direction. The euro dropped 0.5 percent against the dollar on Friday morning, following reports that the European Central Bank (ECB) is concerned over the impact of a weak Turkish lira on European banks. According to the Financial Times, the lira’s depreciation could hurt European banks such as Spain’s BBVA, Italy’s UniCredit, and France’s BNP Paribas in particular.

Turkey’s central bank has zero credibility, strategist says    Speaking to CNBC’s “Squawk Box Europe” Friday, Timothy Ash said the FT report was “sensationalist” as any losses incurred by the banks would be by local subsidiary branches who had invested using Turkish lira and not U.S. dollars.

He added however that while banks in Turkey remained in reasonable shape, the country did have a problem with its balance of payments that has occurred because the economy had been allowed to overheat. “Ultimately now, there is zero credibility in the Central Bank of Turkey and zero credibility in Turkish policy making. Whatever they do, the market doesn’t believe them,” Ash said. Turkey’s economy is seen as particularly fragile due to its high level of debt that is priced in dollars. The more the lira weakens, the more expensive that debt becomes. The latest estimates from the International Monetary Fund (IMF) show that the total amount of Turkish debt payable in other currencies is more than 50 percent of the country’s gross domestic product. Inflation in the country has been rampant with consumer prices rising almost 16 percent in July alone. While the country’s central bank has raised interest rates in the past to support the currency and quell inflation, the most recent meeting in July saw the Turkish central bank unexpectedly hold its benchmark interest rate at 17.75 percent. Erdogan has repeatedly insisted that rates should not be raised too high, triggering suggestions that the central bank doesn’t act with full independence. Berat Albayrak, Turkey’s finance minister, is set to reveal “a new economic model” later Friday.

Trump Today: President touts ‘Space Force’ and holds prison-reform roundtable

‘Space Force all the way!’ Trump tweets
Getty Images President Donald Trump speaks during a meeting of the National Space Council at the East Room of the White House on June 18.
On Thursday, he touted his proposed ‘Space Force’ in a tweet.

President Donald Trump touted his proposed “Space Force” on Thursday, as he prepared to host a roundtable on prison reform at his golf club in Bedminster, N.J.

‘ALL THE WAY’ FOR SPACE FORCE

Trump tweeted “Space Force all the way!” as Vice President Mike Pence outlined goals to have the proposed military branch operational by 2020. Trump didn’t go beyond his tweet, but Pence said in a speech that the president wants Congress to authorize $8 billion over the next five years to launch the effort.

The group Taxpayers for Common Sense called the idea “a waste of money,” noting the existence of the Air Force Space Command and the Navy’s and Army’s space-related operations.

Trump was due to meet with governors, state attorneys general and other officials on prison reform. The president backs the First Step Act, which passed the House in May. The measure would provide $250 million over five years to develop programs that reduce recidivism and give prisoners incentives for good behavior.

Trump also tweeted an endorsement for Florida Rep. Ted Yoho and once again criticized the special counsel’s Russia probe, calling it a “Rigged Witch Hunt.” The president’s lawyers have reportedly rejected Special Counsel Robert Mueller’s terms for an interview in the probe. Mueller is investigating whether Trump’s associates colluded with Russia to interfere in the presidential election, as well as whether Trump tried to obstruct justice. Trump denies collision and obstruction.

Russia slams “unacceptable” new U.S. sanctions

President Trump, left, and Russian President Vladimir Putin pose for a photograph at the beginning of a one-on-one meeting at the Presidential Palace in Helsinki, Finland, on Mon., July 16, 2018.

MOSCOW — Russia’s government slammed as “unacceptable” on Thursday new U.S. sanctions against Moscow. The U.S. State Department announced the new punitive measures on Wednesday for the Kremlin’s alleged involvement in a nerve agent attack in Britain, saying the U.S. had made the determination this week that Russia used the Novichok nerve agent to poison former Russian intelligence officer Sergei Skripal and his daughter, Yulia. Russia has vehemently denied any involvement in the poisoning. Kremlin spokesman Dmitry Peskov said Russia “still retains hopes of building constructive relations with Washington,” but that President Vladimir Putin’s regime considers “categorically unacceptable the linking of new restrictions, which we as before consider illegal, to the case in Salisbury.”   “Once again we deny in the strongest terms the accusations about the possible connection of the Russian state to what happened in Salisbury. This is out of the question. Russia did not and does not have, and could not have, any connection to the use of chemical weapons. What’s more, we cannot even say for sure what exactly and how it was used in Britain, since we don’t have any information or any response to our proposal for a joint investigation with Britain into this incident, which concerns us greatly. So linking these events is unacceptable to us, and just as with previous U.S. sanctions we believe are absolutely illegal and against international law,” Peskov told reporters.

The U.S. State Department said Wednesday that Congress had been notified and that the new sanctions would go into effect on Aug. 22. They aim to deny Russian state-owned and state-funded enterprises access to any national-security-sensitive goods and technologies originating in the U.S.

The U.S. will also ban Russia from receiving U.S. weapons or military technology and financial assistance. State Department officials told reporters on a call that the economic impact of the sanctions would be in the range of “hundreds of millions of dollars” and would target electronic devices and engines, for example.  There could also be a second round of sanctions that would be “more draconian” than the first round, the officials said. Russia would be subjected to new sanctions unless it agreed not to use chemical or biological weapons against its own citizens, the State Department said.

U.S. finalises next China tariff list targeting $16 billion in imports

A truck drives past shipping containers at a port in Lianyungang, Jiangsu province January 23, 2015. REUTERS/China Daily

WASHINGTON (Reuters) – The United States will begin collecting tariffs on another $16 billion (£12.4 billion) in Chinese goods on Aug. 23, the U.S. Trade Representative’s office said on Tuesday as it published a final tariff list targeting 279 import product lines. USTR said that only five product lines were deleted from a list initially proposed on June 15, but semiconductors, among the largest categories, remained on the list. The latest list brings to about $50 billion in goods that now face a 25 percent tariff that U.S. President Donald Trump has imposed on Chinese imports in an escalating trade war over China’s intellectual property practices and industrial subsidy policies. China has vowed to match Washington’s tariff moves with duties on an equivalent worth of U.S. products.

US mid-term elections: Women break records for nominations

Image caption L-R Democrat Sharice Davids, Republican Susan Hutchison and Democrat Rashida Tlaib, who is almost certain to be the first Muslim woman in Congress

More women candidates than ever will contest US governorships and House seats in November’s mid-term elections. After Tuesday’s primaries across four states, there are now 11 female nominees for governor and at least 185 for the House of Representatives. The results were hailed as a continuing success story by activists for women in politics.  There was also a key election for a House seat in Ohio, in which President Donald Trump claimed victory. But US media said the race was still too close to call, in a safe Republican seat held by them since 1983. The outcome could indicate whether Democrats have a chance to overturn the Republican majority in the House in November After polling closed in the four states holding primaries on Tuesday – Kansas, Michigan, Missouri and Washington – it became clear women had broken records for gubernatorial and House nominations. Victories for Gretchen Whitmer (Michigan) and Laura Kelly (Kansas) in Democratic primaries mean 11 women will contest governorships in November – one more than the previous 1994 record.

At least 182 female major party nominees will run for the House, beating the record of 167 from 2016. Another three women are leading in close primary contests. Debbie Walsh, director of the Center for American Women and Politics (CAWP) said: “This has been an election season of records for women candidates, and tonight continues that story.” Ms Whitmer will in fact lead a four-strong, all-women ticket for the Democrats at state level in Michigan. In Kansas, 38-year-old Sharice Davids – a gay ex-mixed martial arts fighter – won her primary and could become the first Native-American woman elected to Congress. Ms Davids, a member of the Ho-Chunk Nation, wasraised by a single mother who worked as a drill sergeant in the US Army. Her campaign ran adverts showing her hitting a punching bag.

Pound skids to 10-month low and there’s more pain to come

Against euro in particular, sterling has more room to slide, says BNY Mellon analyst
Getty Images

The British pound slumped to a level not seen since October 2017 versus the euro on Wednesday, and this could open up the ailing U.K. currency to even more pain, wrote Simon Derrick, chief currency strategist at BNY Mellon. The euro EURGBP, +0.5690%  breached the psychologically important level of £0.90 earlier on Wednesday for the first time in 10 months, rising to a high of £0.9018. The shared eurozone currency last bought £0.9006, up from £0.8965 late Tuesday in New York. Against the U.S. dollar, the GBPUSD, -0.3942%  it a one-year low on Wednesday. “Given the pound’s long-standing propensity to trend aggressively and the fact that it is threatening to move into historically more volatile territory during thinner August trading conditions, the risk is that a move beyond £0.90 could spark a rapid acceleration higher in the price of the euro,” Derrick said. During times with lower volumes, pricing can move more erratically. The euro-sterling pair has only seen a few trading days above that benchmark since the euro’s inception in January 1999, Derrick said. “Not only has the territory above £0.90 been infiltrated relatively infrequently, it has also tended to see significantly higher levels of realized volatility,” he added. The euro’s all-time closing high versus the U.K. currency was £0.9746 on Dec. 30, 2008, Derrick wrote. A sharp weakening of the pound versus its eurozone rival could then become a political issue itself, Derrick warned. “One risk from a rapid weakening of sterling from current levels is that it could trigger a spate of headlines in the U.K. media,” he said. The ailing pound led to higher U.K. inflation, which last stood at 2.4% in June, above the Bank of England’s target of 2%. The higher consumer prices factored into the BOE’s decision to raise interest rates last week, which should ordinarily have supported the pound. But not this time. That said, with little intervention — verbal or otherwise — since the pound began its tailspin after the Brexit vote, having the currency slide further is clearly an option for politicians and policymakers, Derrick said. “Nevertheless, such a development could prove a complicating factor ahead of a September and October that are already filled with a number of potential stumbling blocks for sterling,” he added. The coming months will feature continued Brexit discussions between London and Brussels, in an effort to salvage the relations and avoid a so-called ‘hard Brexit’ in which no predefined roadmap would be in place by the time the U.K. officially leaves the European Union in March 2019. Moreover, U.K. Prime Minister Theresa May’s shaky cabinet is at risk after she saw a slew of resignations earlier this summer.

U.S. sanctions threat hurts Russian banks, rouble

MOSCOW (Reuters) – The rouble weakened and shares in Russia’s top lenders Sberbank and VTB fell on Wednesday after the Kommersant daily said they could be banned from operating in the United States under proposed U.S. sanctions legislation. A vendor places Russian rouble banknotes into a cash register at a grocery shop in the Siberian city of Krasnoyarsk, Russia, August 6, 2015. REUTERS/Ilya Naymushin Kommersant published what it said was the full text of a draft U.S. law outlining possible penalties against Russia. The document here cited potential restrictions on the operations of several state-owned Russian banks in the United States. Republican and Democratic U.S. senators introduced the legislation earlier this month to impose stiff new sanctions on Russia and combat cyber crime, the latest effort by lawmakers to punish Moscow over its alleged interference in U.S. elections and its activities in Syria and Ukraine. The measure’s prospects are unclear. It would have to pass both the Senate and House of Representatives and be signed into law by President Donald Trump. Shares in Russia’s largest lender Sberbank (SBER.MM) dropped to 195 roubles on the Kommersant report, their lowest since mid-April, before pairing losses to 197.2 roubles as of 0940 GMT, down 2.2 percent on the day. Shares in Russia’s second-largest bank VTB (VTBR.MM) were down 1.8 percent, underperforming the benchmark stock index MOEX that declined 1.1 percent to 2,287.9 .IMOEX. Russian business conglomerate Sistema (AFKS.MM) saw its shares fall 3.5 percent, hit by a threat of targeted sanctions after Republican Ileana Ros-Lehtinen, the most senior Representative from Florida, said on her Twitter account on Tuesday that an investigation was underway into Sistema’s chairman Vladimir Yevtushenkov for “operations in illegally annexed Crimea.”

China to slap additional tariffs on $16 billion of U.S. goods

FILE PHOTO: A paramilitary policeman gestures under a pole with security cameras, U.S. and China’s flags near the Forbidden City ahead of the visit by U.S. President Donald Trump to Beijing, China November 8, 2017. REUTERS/Damir Sagolj/File Photo

BEIJING/WASHINGTON (Reuters) – China is slapping additional tariffs of 25 percent on $16 billion (£12.4 billion) worth of U.S. imports from fuel and steel products to autos and medical equipment, the Chinese commerce ministry said, as the world’s largest economies escalated their trade dispute.

The tariffs will be activated on Aug. 23, the ministry said, the same day that the United States plans to begin collecting 25 percent extra in tariffs on $16 billion of Chinese goods.

The United States published its final list of goods subject to the new tariffs on Tuesday.

China’s final list announced on Wednesday differs from an earlier draft it published in June, which included crude oil. The number of categories of goods subject to tariffs rose to 333 from 114 in the June draft, although the total value is unchanged.

The U.S. action that prompted the Chinese retaliation was the latest by President Donald Trump to put pressure on China to negotiate trade concessions, after Washington imposed tariffs on $34 billion in goods last month. China has vowed to retaliate with equivalent tariffs against any U.S. action.

“This is a very unreasonable practise,” the Chinese commerce ministry said of the U.S. action on Wednesday as it rolled out China’s counter-tariffs.

To compensate for the gap on its tariff list caused by the exclusion of crude oil, China added fish meal, wood waste, paper and paper waste, metal scraps, and various types of bicycles and cars, among other products.

Last week, China proposed additional tariffs on another $60 billion of U.S. goods after Trump raised planned tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent.

So far, China has now either imposed or proposed tariffs on $110 billion of U.S. goods, representing the vast majority of its annual imports of American products. Big-ticket U.S. items that are still not on any list are crude oil and large aircraft.

A spokeswoman for the U.S. Trade Representative’s office could not immediately be reached for comment on China’s retaliation announcement or whether this would trigger Trump’s next round of threatened tariffs on $200 billion worth of Chinese goods.

USTR is conducting a public comment period for those tariffs, which could reach 25 percent, due to end Sept. 5. It would take a few more weeks to revise the list and make programming changes at U.S. Customs and Border Protection to begin collecting the duties.

Gary Hufbauer, a senior fellow and trade expert at the Peterson Institute for International Economics in Washington, said he expected that there would be little to stop further escalation of the U.S.-China tariff war as both sides dig into entrenched positions.

“My expectation is that U.S. tariffs on $250 billion of imports from China will be in effect about a month prior to the November U.S. elections. That’s soon enough to be used by Trump as a rallying argument, but late enough so that adverse effects will not occur before January 2019. Of course, China will retaliate, probably dollar for dollar,” Hufbauer said.

China, however, would run out of U.S. imports to levy, as it bought only $130 billion worth of American goods last year. It would likely have to impose penalties on U.S. companies doing business in China to make up the difference.

Oil prices drop on China import data, weighing on equities

NEW YORK (Reuters) – Oil prices fell after Chinese import data showed a slowdown in demand, weighing on world equity markets which fell modestly, even as U.S. technology shares extended recent gains. Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 24, 2018. REUTERS/Brendan McDermid China announced retaliatory trade tariffs in response to the United States’ decision to impose 25 percent tariffs on another $16 billion of Chinese goods starting on Aug. 23. Stock markets had recently continued to rise amid sturdy corporate results and data, despite the continuing trade battle between the United States and China, and the U.S. benchmark S&P index closed Tuesday less than half a percent off record highs hit on Jan. 26. “The S&P and the stock market are telling you how important the tariffs are, and the market is close to making new highs,” said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Florida. “You’ve got full employment and wages are going up. Small business optimism is about the highest it’s ever been. All of that is driving this.” Amazon, Facebook and Alphabet were among the biggest positive influences for the S&P 500 on Wednesday. The Dow Jones Industrial Average fell 62.04 points, or 0.24 percent, to 25,566.87, the S&P 500 lost 2.33 points, or 0.08 percent, to 2,856.12 and the Nasdaq Composite dropped 4.16 points, or 0.05 percent, to 7,879.51. MSCI’s gauge of stocks across the globe shed 0.08 percent, while the pan-European FTSEurofirst 300 index lost 0.20 percent, In the oil market, the U.S.-China trade dispute weighed on prices. U.S. crude fell 3.92 percent to $66.46 per barrel and Brent was last at $71.92, down 3.66 percent on the day. China’s crude imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a dropoff in demand from the country’s smaller independent, or “teapot,” refineries. Retaliatory trade tariffs by China briefly boosted the dollar index, which rose as high as 95.417, near a more than one-year peak of 95.652 hit on July 19, before dropping back to near flat on the day. The index has struggled to break much above the 95.5 level, which it has tested multiple times in the past two months. The dollar index, tracking it against a basket of major currencies, rose 0.01 percent.

Over $9 billion wiped off bitcoin’s value after SEC postpones key decision on a cryptocurrency ETF

Bitcoin users in Tokyo gathered for a meeting set to be dominated by the shuttering of the MtGox exchange amid claims of a multi-million dollar theft.
Getty Images

Bitcoin fell sharply on Wednesday after the U.S. Securities and Exchange Commission (SEC) delayed a decision on a proposed bitcoin exchange-traded fund (ETF), which would have been the first financial product of its kind. Cryptocurrency markets fell as a result. Bitcoin was down around 8 percent from 24 hours ago at 10.53 a.m. London time, trading at just over $6,500, according to data from CoinDesk. It’s value had fallen over $9 billion. Investment firm VanEck teamed up with Solid X, a financial service company, earlier this year in a bid to launch an ETF that is backed by actual bitcoins rather than futures. An ETF is a financial product that tracks the price of an asset and is listed on an exchange. It means that investors don’t actually have to buy the underlying asset. ETF’s are seen as a way for institutional investors to get into cryptocurrency investing in a safer way than buying bitcoin on a crypto-asset exchange. This is VanEck’s third attempt to push a bitcoin ETF through, having been rejected by the SEC twice previously. On this occasion, the SEC said that it is pushing out its decision until September 30. Bitcoin, which is the world’s largest cryptocurrency by market capitalization or value, has fallen dramatically from the the near-$20,000 record high it hit in December 2017. But bitcoin has recovered from June, when it fell below $6,000. And interest in the virtual currency appears to have increased. Bitcoin’s share of the entire cryptocurrency market is at its highest level this year and near where it was when the digital coin hit its highest price level in history. There are a number of applications underway to get a bitcoin ETF listed, but so far none have been approved by the SEC. A second attempt by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini, to list their ETF was recently rejected by the SEC.

The US and India are squaring off on trade. That spells trouble for Modi

President Donald Trump shakes hands with India's Prime Minister Narendra Modi as they begin a meeting in the Oval Office of the White House in Washington, June 26, 2017.
Carlos Barria | Reuters President Donald Trump shakes hands with India’s Prime Minister Narendra Modi as they begin a meeting in the Oval Office of the White House in Washington, June 26, 2017.

India officially entered the ongoing global trade war in June when it announced retaliatory tariffs against Washington’s steel and aluminum import duties. If implemented, the South Asian nation risks a targeted response from President Donald Trump’s White House. New Delhi’s proposed tariff hikes on 29 U.S. products — including almonds, apples, walnuts and certain stainless steel products — are worth $241 million and were meant to go into effect on Aug. 4. But Prime Minister Narendra Modi’s government decided last week to delay the hikes, and may postpone tariffs until next month amid ongoing negotiations with U.S. officials, according to local news outlets. If the two countries cannot reach a deal, New Delhi’s tariffs will go ahead as planned — a move that could push Washington to respond with India-specific actions, similiar to what it’s done with China. That, in turn, could spell trouble ahead for Modi as he campaigns for re-election next year, analysts say. If the White House turns its attention to India’s biggest exports to the U.S. — such as diamonds, seafood, auto parts and medicine — that could be risky for Modi and the Indian economy, said Amitendu Palit, a senior fellow specializing in trade and economic policy at the National University of Singapore. Trump’s team could also pressure on New Delhi to open up its agriculture and dairy industries, which are politically sensitive sectors in India’s rural-based economy, Palit continued. The world’s largest democracy is known for high levies on agricultural imports as a means to safeguard the livelihood of its massive farmer population. Recent droughts and falling commodity prices have also triggered a hike in Indian import duties. In February, the government doubled levies on sugar to 100 percent, while chickpeas saw an increase to 40 percent. The U.S. has previously urged India to keep agricultural tariffs low but since India’s tit-for-tat measures mostly focus on agriculture, Washington now has a fresh opportunity to up the ante. India boasts competitive advantages over the U.S. on services such as information technology, and its service exports are already under threat as the Trump administration tightens H-1B visa rules. Scores of Indian IT professionals are presently employed in the world’s largest economy through the H-1B visa, and stricter procedures on issuance could limit the number of Indians working there. “As the U.S. government tightens immigration and offshoring work, Indian authorities are likely to stay alert on the possibility that more sensitive and crucial sectors might fall under the radar next, including pharmaceuticals, for which the U.S. has already tightened vigilance and quality checks,” said Radhika Rao, economist at Southeast Asia’s largest bank DBS. New Delhi’s decision to fight back may have been surprising to some since it isn’t a major exporter of steel and aluminum heading stateside. In 2017, the U.S. accounted for about 2 percent of India’s steel exports, according to data from IHS Global Trade Atlas. And only 2 percent of Indian aluminum exports go the the U.S., AFP reported. But, given the longstanding history of bilateral trade frictions, India’s position isn’t completely out of the blue. New Delhi and Washington have both brought cases against each other before the World Trade Organization dispute settlement body several times in recent years. In 2003, India complained that American textiles and clothing were being protected from import competition. And in 2013, the U.S. opposed India’s national solar program, claiming it discriminated in favor of domestic firms. “Trade issues have been an irritant in (U.S.-India) ties for years, so this is not entirely new,” said Dhruva Jaishankar, a fellow in foreign policy at Brookings India, referring to India’s response. Modi is believed to be following in the footsteps of China, the European Union and Canada, which have all announced countermeasures against Washington.

Elon Musk tweets he may take Tesla private

Image copyright Reuters

Tesla boss Elon Musk has suggested via Twitter that he is “considering” taking the electric car firm private. In his tweet, Mr Musk said he could buy outstanding shares in the firm for $420 each, around a fifth higher than the share’s current price. “Funding secured”, the tweet added, offering no further details on where the funds would come from or when. The firm’s shares climbed after the tweet, but Nasdaq later suspended trading pending an announcement. Tesla did not immediately respond to a request for comment. Unlike publicly listed companies, private firms do not have to share details of their finances and operations. They are also shielded from the ups and downs of the stock market.

If Tesla were taken private at $420 per share, it would be one of the largest such transactions in history – worth more than $80bn, including the firm’s debt. At first glance, it was not clear how seriously to take Mr Musk’s messages. While Mr Musk has previously discussed the drawbacks of being a public company, he has also used his Twitter account in ways that surprised investors. On April Fool’s Day, Mr Musk, who owns almost 20% of the company, joked on Twitter about Tesla going bankrupt. In follow-up tweets on Tuesday, Mr Musk said taking the company private would not lead to a single dominant shareholder, as investors could opt to retain their holdings. He planned to hold onto his shares and hoped to continue as chief executive, he added.

The tweets came after a separate report in the Financial Times that Saudi Arabia’s sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn. The article said the state fund, overseen by the powerful crown prince Mohammed bin Salman, had been interested in buying newly issued shares. The report, combined with Mr Musk’s tweets, stirred further speculation about Tesla, which is spending heavily as it ramps up production of its latest car, the Model 3. The firm reported a record loss in its most recent quarter, and some analysts say it will need to raise money in order to survive. However, Mr Musk has said he has no plans to do so and promised that the firm will be profitable in the second half of the year, barring any unforeseen events.

Michael Cohen under investigation for possible tax fraud

The news comes as sources say Cohen is preparing to flip on President Trump.

President Trump’s former longtime personal attorney, Michael Cohen, is reportedly under investigation for possible tax fraud, the Wall Street Journal reported Tuesday. The development comes as Cohen is reportedly preparing to tell Special Counsel Robert Mueller, who is investigating Russian interference in the 2016 election, that the president “knew about and approved” a June 2016 meeting between several Trump campaign associates and a Russian lawyer who had promised damaging information about Trump’s then-campaign rival, Hillary Clinton, months before the election, per Politico. Cohen is currently being investigated by federal prosecutors in New York to determine whether he underreported income from his troubled taxi business on his federal tax returns, the Journal reported, citing sources familiar with the investigation.

National debt is about to roar back to life as a pressing issue

America's debt crisis is coming -- interest payments will hit a trillion dollars a year
Kudlow: We don’t believe US debt projection 02:44

Maya MacGuineas is the president of the Committee for a Responsible Federal Budget, a nonpartisan budget advisory group in Washington, D.C. The views expressed are her own. Read more opinion articles on CNN. (CNN)As a result of an unprecedented debt binge by Congress over the past year, the national debt is about to roar back to life as a pressing issue after years of hibernation. In 2010, it was among the nation’s top concerns. President Obama created a bipartisan national fiscal commission to come up with a plan to address it, but a big agreement ultimately failed. The debt didn’t go away. It has been growing by the second ever since, and the dominoes are about to start falling. The recent GOP tax cuts and bipartisan spending increases together will add $2.3 trillion to the national debt in the next10 years. If both are made permanent, that amount goes up to $5.1 trillion. And President Trump is already considering another $100 billion of capital-gains tax cuts. These sums accelerate a coming fiscal freefall and will push the nation over a psychological barrier as soon as next year: trillion-dollar annual deficits. The last time we had trillion-dollar deficits was during the Great Recession, and it was the understandable outcome of a huge economic downturn. This time it is purely self-imposed, resulting from irresponsible policy choices. And Washington is responding to trillion-dollar deficits by increasing them further with more plans for tax cuts and spending, with nary a peep about how to pay for them.

Several weeks ago, the Congressional Budget Office laid bare in its annual long-term outlook the dire picture, and the next 15 years won’t be pretty. Here is how it will play out, if nothing is done.

In 2022, the Highway Trust Fund will run out of full funding. In 2026, the Medicare Hospital Insurance Trust Fund follows. In 2032, the Social Security trust fund surpluses run dry, and all beneficiaries regardless of age or income level will face a 21 percent across-the-board benefit cut. Before 2030, we could have trillion-dollar annual interest payments. Interest rates have been low until now, but that is changing. As rates go up, we have to pay more on new debt and on all accumulated debt.
The amount we pay in interest on the debt is set to triple over the next ten years. But if interest rates rise just 1 point higher than expected, the government will owe an extra $1.9 trillion over 10 years. This is a multi-trillion dollar problem, one hard to even quantify. And Congress recently couldn’t even agree to cut $1 billion of unspent federal money, which amounted to loose change in the sofa cushions in terms of the federal budget.
 These aren’t just eye-popping numbers — there are real, heartfelt consequences for average Americans. High debt pushes up interest rates, which translates to higher payments on mortgages, car loans, and credit card debt. Because debt is rising, rather than stable, in 30 years, a family with a $300,000 mortgage can expect to pay approximately $45,000 more over the course of the mortgage. Interest also means less money for the rest of the federal budget. By 2023, we’ll spend more on interest payments than Medicaid or defense. All priorities of all politicians will fall victim. The federal assistance that states rely on will be increasingly uncertain, and social safety net programs will be under pressure.

Star witness Gates testifies he committed crimes with Manafort

FILE PHOTO: Former Trump campaign manager Paul Manafort departs from U.S. District Court in Washington, U.S.,

ALEXANDRIA, Va. (Reuters) – Rick Gates, a longtime business associate of U.S. President Donald Trump’s former campaign chairman Paul Manafort, on Monday testified at Manafort’s fraud trial that they committed crimes. Gates, whose testimony in federal court in Alexandria, Virginia, was continuing, was expected to be a star witness in the government’s case, having pleaded guilty in February and agreed to cooperate with prosecutors under a deal that could lead to a reduced sentence. Manafort’s attorneys have signaled they will seek to blame Gates and have accused him of embezzling millions of dollars  Manafort has pleaded not guilty to 18 counts of bank and tax fraud and failing to disclose foreign bank accounts. The charges largely predate his five months on the Trump campaign but were the first to go to trial arising from Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 U.S. election.The jury has heard how Manafort made tens of millions of dollars for political work with pro-Russian politicians in Ukraine. Gates was Manafort’s partner in the consultancy. Mueller is also investigating possible coordination between Trump campaign members and Russian officials in the election campaign, but the charges against Manafort do not address that. The jury had heard testimony on Friday and Monday from accountant Cynthia Laporta, who described how Manafort and Gates doctored financial statements and backdated loans. In questioning Laporta on Monday, a prosecutor asked the accountant about a $10 million loan purportedly received by Manafort from Russian businessman Oleg Deripaska in 2006. Laporta, looking at a summary of loans to Manafort and his businesses, said she could not see any indication that the loan from Deripaska had been paid off. Since the trial started before U.S. District Judge T.S. Ellis last Tuesday, Manafort’s lawyers have kept their cross-examinations brief and at times refrained from attempting to rebut damaging testimony in detail. But Laporta’s testimony raised the stakes for Manafort, legal experts said. Testifying under immunity, she was the first witness to admit she knew accounting maneuvers Manafort and Gates requested of her were wrong and could be crimes. One accounting trick saved Manafort $500,000 in taxes, she said. Laporta detailed multiple examples in which Manafort and Gates sought to doctor financial records, first in order to lower Manafort’s taxable income and then later to inflate his income so that he could get bank loans. Some of the maneuvers were at the request of Gates, while others implicated Manafort, Laporta testified. Similar to prior witnesses, Laporta testified that Gates and Manafort were in lockstep but that Manafort was in charge.

U.S. banks further eased business loan standards in Q2 2018

FILE PHOTO: A security guard patrols the Federal Reserve building in Washington, DC, U.S., July 16, 2018. REUTERS/Leah Millis/File Photo

WASHINGTON (Reuters) – Loan officers at U.S. banks reported easing lending standards for business loans for firms of all sizes while keeping terms for commercial real estate loans almost unchanged in the second quarter, a Federal Reserve survey showed on Monday. The officers also said they were seeing stronger demand for business loans from small firms and weaker interest in commercial real estate loans. “Notably, almost all domestic banks that reportedly eased standards or terms on [business] loans over the past three months cited increased competition from other lenders as a reason for easing, “ the U.S. central bank said in its quarterly survey. Other factors included increased tolerance for risk and increased liquidity in the secondary market, loan officers said. U.S. banks previously reported easing standards for many business loans and some commercial real estate loans in the first quarter. The Fed has raised interest rates seven times since it began a tightening cycle in December 2015, including twice so far this year. The Fed is forecasting another two rate rises in 2018, with investors seeing further hikes in September and December. Financial conditions have remained relatively loose even as policymakers continue to gradually raise rates amid a strong economy. Banks also reported lending standards for residential real estate loans and auto loans were little changed, according to the survey. A moderate share of banks said they had tightened standards on credit card loans. The Fed surveyed loan officers at 72 domestic banks and 22 U.S. branches and agencies of foreign banks.

GAO: Trump Admin Proceeding Without Full Analysis of Border Wall

Image: GAO: Trump Admin Proceeding Without Full Analysis of Border Wall
By Mark Swanson

The General Accountability Office (GAO) says the Trump administration is proceeding on the designs and locations of the border wall despite not having competed a full analysis of the varying costs. “By proceeding without key information on cost, acquisition baselines, and the contributions of previous barrier and technology deployments, DHS faces an increased risk that the Border Wall System Program will cost more than projected, take longer than planned, or not fully perform as expected,” GAO said in its report, dated July 30 but released to the public Monday. “Without assessing costs when prioritizing locations for future barriers, CBP does not have complete information to determine whether it is using its limited resources in the most cost-effective manner and does not have important cost information that would help it develop future budget requests,” the GAO wrote. The GAO is recommending that the Department of Homeland Security “analyze the costs associated with future barrier segments and include that analysis in future planning, and document plans for the planned secondary barrier replacement in the San Diego sector.

EU aims to block U.S. sanctions on Iran

BRUSSELS (Reuters) – The European Union vowed on Monday to counter U.S. President Donald Trump’s renewal of sanctions on Iran, in a test of the EU’s ability to preserve a deal that saw Iran limit its nuclear ambitions in exchange for removing strict curbs on its economy. As Washington’s so-called “snapback” sanctions are reinstated on Tuesday, a new EU law to shield European companies will also take effect to try to mitigate what EU officials say is their “unlawful” reach beyond U.S. borders. Despite protests from European allies, U.S. Secretary of State Mike Pompeo said Washington would fully enforce the sanctions. EU diplomats said they were awaiting details on Monday on how they will be implemented. The EU and other parties to the 2015 deal, China and Russia, are working to maintain trade with Iran, which has threatened to stop complying with curbs on its nuclear work if it fails to see the economic benefits of relief from sanctions under the deal. “We deeply regret the re-imposition of sanctions by the U.S.,” the bloc said in a joint statement with the foreign ministers of France, Germany and Britain. They pledged to work on preserving financial flows and Iran’s oil and gas exports – a lifeline of its economy. EU officials hope the EU’s so-called blocking statute will mitigate the impact of U.S. sanctions for business, including by deterring U.S. authorities from enforcing some penalties. But they admit it may not be enough to convince European firms to brave U.S. penalties in order to do business with Iran. Senior U.S. administration officials brushed off questions about the EU measure on Monday, warning the risks were real for companies working in Iran. The new measure forbids EU persons from complying with U.S. sanctions or related court rulings and allows for firms to sue in court to recover potential damages from parties who withdraw from contracts due to U.S. sanctions. “For those who have exposure, there is no panacea. What this does is it provides a deterrence. It means that sanctions that are discretionary may never be applied,” one senior EU official said, adding that firms have rarely been fined under U.S. secondary sanctions in the past. “If they (sanctions) are applied, then that person can go to the court to recover that damage. Under the new rules, firms should apply for EU authorisation to wind down operations in Iran if it is doing so to comply with U.S. sanctions but not if it is a business decision – a distinction that may be difficult to make. The threat of EU penalties for European firms who fail to seek such a legal exemption for withdrawing from Iran due to U.S. sanctions has raised alarm among EU businesses that they could be penalised either way. Seeking to ease concerns, EU officials have stressed the measure seeks to “free not force” firms to remain invested in Iran.

EU officials say they will be strict in reviewing requests for exemptions – wary to undermine its effect by granting too many authorisations.

A number of other countries have asked EU officials for details on the blocking regulations as they also explore ways to bypass sanctions and their effect on oil markets: “There is a clear interest around the world,” one EU official said. Trump re-imposes sanctions on Iran With the U.S. administration taking a hard line on granting waivers from sanctions, many major companies from the oil and gas industry to car manufacturers and consumer goods firms have already announced that they are quitting the country. German exports to Iran alone fell by four percent in the first five months of 2018 after rising by 16 percent last year, the German Chamber of Commerce and Industry (DIHK) said.

Trump’s lawyer suggests Trump lied to his own legal team about his role in covering up collusion

“I had bad information.”

CREDIT: SCREENGRAB

During an interview on Sunday’s edition of This Week, Jay Sekulow — one of President Trump’s lawyers — admitted he was wrong last year when he claimed Trump “wasn’t involved” in dictating a misleading statement for his son about the infamous June 2016 Trump Tower meeting between his campaign and Kremlin-connected Russians who offered political dirt on Hillary Clinton. After initially denying Trump was involved at all, Trump’s legal team — including Sekulow — sent the special counsel’s office a memo early this year acknowledging Trump had in fact dictated a statement for Donald Trump Jr. claiming the meeting he arranged was “primarily” about Russian adoptions — not, as revealed by emails Trump Jr. subsequently released, to obtain damaging information about Clinton.

Donald Trump Signs Executive Order Restoring Sanctions on Iran

President Donald Trump signed an executive order on Monday, reimposing a series of economic sanctions on Iran.
President Donald J. Trump signs an Executive Order in Bedminster, New Jersey, entitled “Reimposing Certain Sanctions with Respect to Iran.” (Official White House Photo by Shealah Craighead)
Official White House Photo/Shealah Craighead

In a statement sent to reporters, Trump said the Iran nuclear deal gave Iran the economic resources necessary to both continue funding terrorism around the world and searching for a path for a nuclear weapon. “The JCPOA, a horrible, one-sided deal, failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb, and it threw a lifeline of cash to a murderous dictatorship that has continued to spread bloodshed, violence, and chaos,” he wrote. The reimposed sanctions will hit Iran’s gold and precious metals trade and its automotive industry. The measures will take effect on August 7, 2018. Other sanctions on the country’s oil industry are expected to resume on November 5, 2018. Trump said he supported a new deal with Iran that actually addressed its long-standing financial backing for terrorists as well as its missile program. He also signed support for the Iranian people. “The United States continues to stand with the long-suffering Iranian people, who are the rightful heirs to Iran’s rich heritage and the real victims of the regime’s policies,” he wrote. “We look forward to the day when the people of Iran, and all people across the region, can prosper together in safety and peace.” The president signed his executive order at his club in Bedminster, New Jersey, an event that was closed to the press. The White House released Trump’s statement and a photo of him signing the document.

New wave of mega LNG projects is approaching

FILE PHOTO: An offshore LNG regasification terminal, the FSRU Toscana, is towed into Valletta’s Grand Harbour July 1, 2013. REUTERS/Darrin Zammit Lupi/File Photo

LONDON (Reuters) – A new race to build multi-billion dollar liquefied natural gas (LNG) plants is gaining momentum after a long hiatus in investments as energy giants sense a widening supply gap within five years. Spending on new, complex facilities that super-chill gas into liquid in order to allow its transportation dried up following the collapse in energy prices in 2014. Appetite was further dampened by fears that a plethora of LNG plants built since the late 2000s would lead to a large supply glut until early in the next decade. But sentiment has radically changed over the past year. Buoyed by rising oil prices and exceptionally strong demand from rapidly growing economies such as China and India, executives are increasingly confident conditions are once again ripe for new projects. Qatar, the world’s largest LNG producer, is preparing to expand its facilities by around one third to produce 100-108 million tonnes per year (mtpa) by 2023-2024. “The glut that people see I don’t see … If you just count on being pessimistic about the market, and don’t build expansions, you will never catch that upside when the market is up,” Saad al-Kaabi, the head of Qatar Petroleum, told Reuters in May. The state-owned company expects long-standing partners Exxon Mobil (XOM.N), Royal Dutch Shell (RDSa.AS), Total (TOTF.PA) and ConocoPhillips (COP.N) to help build and fund the new expansion phases as well as possibly new entrants, he said. A major change in the outlook happened after China strongly boosted imports of LNG in recent years to reduce coal burn in its fight against pollution. “The supply-demand balance definitely looks more favourable towards producers these days,” said Philippe Sauquet, the head of gas at France’s Total, the world’s second largest LNG trader after Shell. “China will continue to make the real difference in demand. I don’t see them slowing down. They are shifting attention to building more and more infrastructure,” Sauquet told Reuters.

Trump launches another attack on the media, says press are ‘dangerous and sick’ and can ’cause war’

President Donald Trump speaks during a campaign rally at Four Seasons Arena on July 5, 2018 in Great Falls, Montana. 
Justin Sullivan | Getty Images President Donald Trump speaks during a campaign rally at Four Seasons Arena on July 5, 2018 in Great Falls, Montana.

President Donald Trump upped the ante in his attacks on the media early Sunday, unleashing a new broadside against journalists as “dangerous and sick,” and dividing the electorate. In a stream of posts on Twitter, the president continued to harangue the press as the “enemy of the people” and said it “can also cause war.” It came on the heels of a controversy stoked last week, when Trump revealed that he secretly met with the publisher of the New York Times in an off-the-record discussion. At rallies and on Twitter, the president often delights in blasting “fake news” as a destabilizing force in his presidency, with CNN, The Washington Post and The Times being the most regular targets of his ire. Yet Sunday’s remarks come at a time when even a few conservative commentators have urged him to dial back his anti-press rhetoric.On Saturday, right-leaning NYT columnist Bret Stephens penned an emotional piece entitled “Trump Will Have Blood on His Hands,” which took aim at Trump’s heated diatribes directed at the media. Describing several instances when Trump supporters have threatened him, Stephens wrote that “the president is not coyly urging his supporters to murder reporters, like Henry II trying to rid himself of a turbulent priest. But neither is he the child who played with a loaded gun and knew not what he did.” Last week, Trump revealed that he had met secretly with A.G. Sulzberger, the publisher of The New York Times. Trump called the interaction “very good and interesting,” but that description was disputed by Sulzberger. While the president did not state when he met with Sulzberger, he tweeted that the two parties discussed “the vast amounts of fake news, and how that fake news has morphed into phrase, ‘enemy of the people.'” Sulzberger said he expressed concern about Trump’s “deeply troubling anti-press rhetoric,” and that it was “eroding” the U.S. commitment to free speech and an unrestrained press.

Trump voicing concerns about son being entangled in Mueller probe

The Trump Tower meeting: A timeline

(CNN)President Donald Trump is concerned about whether his son Donald Trump Jr. might have exposure in the special counsel’s Russia investigation, leading to his increasingly frenzied public agitation over Robert Mueller, sources close to the White House tell CNN. Trump has been concerned for months now that the Mueller probe could reach his family, and potentially his son-in-law Jared Kushner, but his focus has turned to his namesake in recent weeks, one person who speaks with Trump frequently tells CNN. This is one of several reasons Trump has upped his public attacks on Mueller, because he doesn’t want him touching his family, the person adds. Trump Jr. and his attorney have insisted he has always told the truth. But his claims publicly and to the Senate Judiciary Committee that he never told his father about the 2016 Trump Tower meeting with a Russian attorney promising dirt on Hillary Clinton have been contradicted by others in Trump’s orbit. Michael Cohen, Trump’s longtime attorney and former fixer, is said to be prepared to testify that the President knew about the Trump Tower meeting ahead of time, sources with knowledge of the matter told CNN. Trump has denied knowing about the meeting before it happened Others who have been close to the President — including his former White House communications director, Anthony Scaramucci, and former White House chief strategist Steve Bannon — have suggested the President at the very least knew shortly after the fact. The President denied that he is worried about the Trump Tower meeting in a Twitter post Sunday morning.

“Fake News reporting, a complete fabrication, that I am concerned about the meeting my wonderful son, Donald, had in Trump Tower,” Trump wrote on Twitter. “This was a meeting to get information on an opponent, totally legal and done all the time in politics – and it went nowhere. I did not know about it!”
The explanations about the reason for the meeting from Trump Jr., the White House and the President’s legal team have changed and been contradictory over time. In a statement to The New York Times last summer, Trump Jr. said the meeting was primarily about adoption policies, and spokespersons for the President repeatedly denied that Trump was involved in crafting it. But it was revealed in June of this year that a letter from the President’s attorneys to Mueller said Trump did in fact “dictate” the statement — raising the question of why Trump tried to hide the true premise of the meeting. Asked about CNN’s latest reporting on the President’s mindset, a source close to Trump Jr. said he’s not concerned and maintains he did nothing wrong. Earlier this week, the chairman of the Senate Judiciary Committee, Republican Chuck Grassley of Iowa, told CNN that if Trump Jr. “misled the committee, he’s lying to Congress. That’s a crime. And that’d be up to the prosecutors, not me.” The President this week has for the first time said that Attorney General Jeff Sessions “should stop” the Mueller probe. He has also in recent weeks increased the number of times he has criticized Mueller personally. Earlier this week, Trump Jr.’s lawyer, Alan Futerfas, issued a statement after CNN first reported on what Cohen was prepared to say in testimony. “We have investigated this matter for over a year and are in command of the facts,” Futerfas said. “We are fully confident of the accuracy and reliability of the information that has been provided by Donald Trump Jr. in the various investigations.” The White House declined to comment regarding the President’s concern about his son, instead referring questions to Trump’s legal team.
When asked for reaction, Trump’s lead attorney Rudy Giuliani told CNN in a statement:
“Just not so. After over a year or more of investigating … there is no evidence of any wrongdoing on his part or for that matter POTUS. Nothing has changed. We are not worried about Michael Cohen because he has no knowledge of wrongdoing and has recorded it in one version or another so often that he can’t be believed or relied on.” The Washington Post earlier Saturday reported about some of Trump’s concerns about the effects of the investigation on Trump Jr.

Sen. Rubio: Allowing Mueller to Finish Is ‘Best’ for All

Image: Sen. Rubio: Allowing Mueller to Finish Is 'Best' for All
Sen. Marco Rubio, R-Fla. (Mark Wilson/Getty Images) By Eric Mack

While Sen. Marco Rubio, R-Fla., admits President Donald Trump is justified to be “annoyed” by the cloud of Russia and special counsel Robert Mueller’s investigation, it is “best” for the president and the country if the investigation concludes unimpeded. “I believe it’s in the best interest of the president and of the United States of America and the American people for that investigation to run the course for all the truth to come out,” Rubio told “Fox News Sunday” host Chris Wallace. “And I think it’s the best thing that could happen for him, and I think it’s the best thing that could happen for the country.”Rubio did acknowledge the president has reason to be frustrated, particularly amid President Trump’s tweets this week calling for recused Attorney General Jeff Sessions “to stop this Rigged Witch Hunt right now, before it continues to stain our country any further.” “Obviously he is annoyed by that investigation continuing to go on because it’s about him – and he believes and has said repeatedly and emphatically that he did not collude with the Russians,” Rubio told Wallace. “I’m limited to what I can say because the Senate is still doing our investigation, but I am comfortable in saying this: If there was evidence, strong evidence of collusion, I guarantee it would have been leaked by now.” The best-case scenario for all, including the president and especially the American people, is for the “truth” to be revealed, Rubio concluded. “But let’s wait for the process to play itself out, and I think that’s what should happen,” Rubio said. “Mueller shall continue and finish his work and the truth should come out, and I think that’s in the best interest of everyone.”

Trump launches another attack on the media, says press are ‘dangerous and sick’ and can ’cause war’

President Donald Trump speaks during a campaign rally at Four Seasons Arena on July 5, 2018 in Great Falls, Montana. 
Justin Sullivan | Getty Images President Donald Trump speaks during a campaign rally at Four Seasons Arena on July 5, 2018 in Great Falls, Montana.

President Donald Trump upped the ante in his attacks on the media early Sunday, unleashing a new broadside against journalists as “dangerous and sick,” and dividing the electorate. In a stream of posts on Twitter, the president continued to harangue the press as the “enemy of the people” and said it “can also cause war.” It came on the heels of a controversy stoked last week, when Trump revealed that he secretly met with the publisher of the New York Times in an off-the-record discussion. The Fake News hates me saying that they are the Enemy of the People only because they know it’s TRUE. I am providing a great service by explaining this to the American People. They purposely cause great division & distrust. They can also cause War! They are very dangerous & sick!

At rallies and on Twitter, the president often delights in blasting “fake news” as a destabilizing force in his presidency, with CNN, The Washington Post and The Times being the most regular targets of his ire. Yet Sunday’s remarks come at a time when even a few conservative commentators have urged him to dial back his anti-press rhetoric On Saturday, right-leaning NYT columnist Bret Stephens penned an emotional piece entitled “Trump Will Have Blood on His Hands,” which took aim at Trump’s heated diatribes directed at the media. Describing several instances when Trump supporters have threatened him, Stephens wrote that “the president is not coyly urging his supporters to murder reporters, like Henry II trying to rid himself of a turbulent priest. But neither is he the child who played with a loaded gun and knew not what he did.” Last week, Trump revealed that he had met secretly with A.G. Sulzberger, the publisher of The New York Times. Trump called the interaction “very good and interesting,” but that description was disputed by Sulzberger. While the president did not state when he met with Sulzberger, he tweeted that the two parties discussed “the vast amounts of fake news, and how that fake news has morphed into phrase, ‘enemy of the people.'” Sulzberger said he expressed concern about Trump’s “deeply troubling anti-press rhetoric,” and that it was “eroding” the U.S. commitment to free speech and an unrestrained press.

Iran Guards says it held Gulf drills as U.S. tensions rise

FILE PHOTO: Members of the Iranian revolutionary guard march during a parade to commemorate the anniversary of the Iran-Iraq war (1980-88), in Tehran September 22, 2011. REUTERS/Stringer/File Photo

DUBAI (Reuters) – Iran’s Revolutionary Guards confirmed on Sunday it had held war games in the Gulf over the past several days, saying they were aimed at “confronting possible threats” by enemies, the state news agency IRNA reported. U.S. officials told Reuters on Thursday that the United States believed Iran had started carrying out naval exercises in the Gulf, apparently moving up the timing of annual drills amid heightened tensions with Washington. “This exercise was conducted with the aim of controlling and safeguarding the safety of the international waterway and within the framework of the program of the Guards’ annual military exercises,” Guards spokesman Ramezan Sharif said, according to IRNA. The U.S. military’s Central Command on Wednesday confirmed it has seen increased Iranian naval activity. The activity extended to the Strait of Hormuz, a strategic waterway for oil shipments the Revolutionary Guards have threatened to block. Guards commander Mohammad Ali Jafari “expressed satisfaction over the successful conduct of the Guards naval exercise, emphasizing the need to maintain and enhance defense readiness and the security of the Gulf and the Strait of Hormuz and to confront threats and potential adventurous acts of enemies,” IRNA quoted Sharif as saying. One U.S. official, speaking on condition of anonymity, said possibly more than 100 vessels were involved in the drills, including small boats. U.S. officials, speaking to Reuters on condition of anonymity, said the drills appeared designed to send a message to Washington, which is intensifying its economic and diplomatic pressure on Tehran but so far stopping short of using the U.S. military to more aggressively counter Iran and its proxies. Iran has been furious over U.S. President Donald Trump’s decision to pull out of an international agreement on Iran’s nuclear program and re-impose sanctions on Tehran. Senior Iranian officials have warned the country would not easily yield to a renewed U.S. campaign to strangle Iran’s vital oil exports. But Iran did not appear interested in drawing attention to the drills. Iranian authorities had not commented on them earlier and several officials contacted by Reuters this week had declined to comment. Last month, Iran’s Supreme Leader Ayatollah Ali Khamenei backed President Hassan Rouhani’s suggestion that Iran may block Gulf oil exports if its own exports are stopped. Rouhani’s apparent threat earlier in July to disrupt oil shipments from neighboring countries came in reaction to the looming U.S. sanctions and efforts by Washington to force all countries to stop buying Iranian oil.

New York Stock Exchange owner is launching a bitcoin exchange

Illustration by Alex Castro / The Verge

The Intercontinental Exchange, the operator behind the New York Stock Exchange, has announced that it is creating a new company called Bakkt that will hold and manage people’s cryptocurrency. The platform will be powered by Microsoft cloud tech and plans to begin with trading and converting bitcoin to US dollars and other fiat (government-backed) currencies as “bitcoin is today the most liquid digital currency.” Bakkt represents a significant marker for cryptocurrency. The NYSE and its operator are trusted financial institutions, while cryptocurrency, though it has seen some successes, has been marred by hoaxes and even reports of price manipulation. These problems have been so rampant that in May, the SEC launched a fake initial coin offering in order to warn people against fraudulent cryptocurrencies. While Bakkt should lend legitimacy to cryptocurrency as a whole, bitcoin’s price is currently at around $7,500 at the time of writing, far below its nearly $20,000 peak just seven months ago. That price becomes even more sobering in the light of a new report by Swiss investment bank UBS which states that bitcoin’s price would need to hit nearly $213,000 for it to replace US money supply. “Our findings suggest that bitcoin, in its current form, is too unstable and limited to become a viable means of payment for global transactions or a mainstream asset class,” the report found. Bitcoin’s price would need to hit nearly $213,000 for it to replace US money supply Notably, companies like Starbucks have signed up to start accepting cryptocurrency through the network offered by Bakkt, even through Starbucks’ mobile app. Earlier this year Starbucks’ founder Howard Schultz said blockchain tech had “potential,” but at the time the company wasn’t interested in bitcoin. “I don’t believe that bitcoin is going to be a currency today or in the future,” he stated during Starbucks’ quarterly investor call. “I believe that we are heading into a new age, in which blockchain technology is going to provide a significant level of a digital currency that is going to have a consumer application.” Bakkt says it is preparing for launch and more operational details will be announced in the coming weeks. It plans to begin offering services in November, but will need approval from the US Commodity Futures Trading Commission to introduce futures trading. The US CFTC has been known to crack down on bitcoin scams in the past. However, if all goes as planned, the system could provide a safer, more stable option for bitcoin down the line.

Some Republicans worry Trump is muddling midterm strategy

President Trump’s strategy of becoming aggressively involved in the midterm elections is prompting concern among some Republicans who worry he’s complicating the political calculus for GOP candidates trying to outrun his popularity. Those Republicans worry their statewide candidates may rise or fall based on Mr. Trump’s standing, muddling their path to maintain control of Congress. But Mr. Trump has no plans to step out of the spotlight. He will hold a rally Saturday in Ohio and plans to host two fundraisers at the Trump National Golf Course in Bedminster, New Jersey, next week for House and Senate candidates, according to a campaign official with knowledge of the president’s events. The official spoke on the condition of anonymity to discuss details about the fundraisers that haven’t yet been publicly released. The president is casting himself as the star of the midterms, eagerly inserting himself into hotly contested primaries, headlining rallies in pivotal swing states and increasing his fundraising efforts for Republicans. Last week, Mr. Trump agreed to donate a portion of his reelection fund to 100 GOP candidates running in competitive House and Senate races. He’s expected to be even more aggressive in the fall. White House officials say he’s reserving time on his schedule for midterm travel and fundraising likely to surpass that of former presidents George W. Bush and Barack Obama. “This is now about Donald Trump,” said Al Cardenas, a former Florida Republican chairman. “It’s a high-risk, high-stakes proposition.” The question facing Republicans is whether turning out those Trump loyalists is enough to win in toss-up congressional districts or if their path to victory depends more on capturing a share of independents and suburban women turned off by Trump’s tumultuous first term. It’s a dilemma they will confront in 2018 and beyond. “If we lose the governor’s race for the first time in 20 years, all of a sudden President Trump’s chances of winning in 2020 diminish with a Democratic governor,” said Cardenas. “You can’t win a presidential election if you’re a Republican without winning Florida.” Mr. Trump’s aides argue no one energizes Republicans like the president, pointing to the throngs of thousands who wait in long lines to attend his rallies — he’s held 17 since taking office. The aides say the White House is taking a two-pronged approach, sending Trump to mobilize the base while other officials, such as his daughter Ivanka, can generate local headlines and help with voters who may not like the president’s aggressive style. The goal is to ensure that the occasional voters who turned out for Mr. Trump in 2016 cast ballots in the midterms. But there are some signs that Mr. Trump’s unpopularity with the general electorate may hamper more than help individual Republican candidates. While Republicans have won a series of special elections since Mr. Trump took office, they’ve captured smaller margins than in previous years. Democrats also had two high-profile upsets, nabbing victories in an Alabama Senate race and a Pennsylvania House race. The GOP is worried about a special congressional election Tuesday in a central Ohio district that Trump won by 11 percentage points in 2016. A Monmouth University poll released this past week showed the race tightening, leaving Republican Troy Balderson with just a 1-point edge. The survey found 46 percent of likely voters approved of Trump, while 49 percent disapproved. Hoping to shore up GOP support, Mr. Trump plans to host a rally in the district Saturday. His visit follows a Monday stop by Vice President Mike Pence. The president’s team keeps a close eye on data assessing whether Americans believe the country is headed in the right direction under Trump. And they point to Mr. Trump’s strength among Republican voters and an upbeat attitude about the nation’s economic climate as evidence Republicans will avoid the rough midterm elections that have afflicted previous administrations.  Republicans are often forced to fend off questions about Trump-sparked controversies. In recent days, Mr. Trump publicly mused about a government shutdown sometime in the fall — a possibility that Republican congressional leaders fear would significantly hamper their electoral prospects.

 

Saudi Arabia to resume oil exports through Red Sea lane

An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia.
Ahmed Jadallah | Reuters
An Aramco employee walks near an oil tank at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. Top oil exporter Saudi Arabia said on Saturday it would resume all oil shipments through the strategic Red Sea shipping lane of Bab al-Mandeb, the state news agency SPA reported. Saudi Arabia halted temporarily oil shipments through the lane on July 26 after attacks on two big oil tankers by Yemen’s Iran-aligned Houthi movement. SPA quoted Energy Minister Khalid al-Falih as saying: “The decision to resume shipping of oil through Bab al-Mandeb comes after all necessary procedures were taken by the coalition leadership to protect ships of the coalition countries.” Yemen, where a Saudi-led coalition has been battling the Houthis in a three-year war, lies beside the southern mouth of the Red Sea, one of the most important trade routes in the world for oil tankers. The tankers pass near Yemen’s shores while heading from the Middle East through the Suez Canal to Europe. The Bab al-Mandeb strait, where the Red Sea meets the Gulf of Aden in the Arabian Sea, is only 20 km (12 miles) wide, making hundreds of ships potentially an easy target.

The Saudi coalition intervened in Yemen’s civil war in 2015 to restore the internationally recognised government of exiled president Abd-Rabbu Mansour Hadi. Saudi Arabia accuses regional foe Iran of supplying missiles to the Houthis, which both Tehran and the Houthis deny.

Chinese tariffs on LNG, oil aim at U.S. energy dominance agenda

FILE PHOTO: A seagoing barge is loaded with crude oil from the Eagle Ford Shale formation at the newly expanded crude dock at the Port of Corpus Christi, Texas. REUTERS/Darren Abate/File Photo

NEW YORK/BEIJING (Reuters) – China’s targeting of U.S. liquefied natural gas and crude oil exports opens a new front in the trade war between the two countries, at a time when the White House is trumpeting growing U.S. energy export prowess. China included LNG for the first time in its list of proposed tariffs on Friday, the same day that its biggest U.S. crude oil buyer, Sinopec, suspended U.S. crude oil imports due to the dispute, according to three sources familiar with the situation. On Friday, China announced retaliatory tariffs on $60 billion (46.13 billion pounds) worth of U.S. goods, and warned of further measures, signalling it will not back down in a protracted trade war with Washington. That could cast a shadow over U.S. President Donald Trump’s energy dominance ambitions. The administration has repeatedly said it is eager to expand fossil fuel supplies to global allies, while Washington is rolling back domestic regulations to encourage more oil and gas production. “The juxtaposition here is clear: it is hard to become an energy superpower when one of the biggest energy consumers in the world is raising barriers to consume that energy. It makes it very difficult,” said Michael Cohen, head of energy markets research at Barclays.

The U.S. is the world’s largest exporter of fuels such as gasoline and diesel, and is poised to become one of the largest exporters of LNG by 2019. U.S.

LNG exports were worth $3.3 billion in 2017. China is the world’s biggest crude oil importer. China had curtailed its imports of U.S. LNG over the last two months, even before its formal inclusion in the list of potential tariffs. It had also become the largest buyer of U.S. crude oil outside of Canada, but Kpler, which tracks worldwide oil shipments, shows crude cargoes to China have also dropped off in recent months. It comes at a time when the United States has several large-scale LNG export facilities under construction, and after Trump’s late 2017 trip to China that included executives from U.S. LNG companies. China became the world’s second-biggest LNG importer in 2017, as it buys more gas in order to wean the country off dirty coal to reduce pollution. China, which purchased almost 14 percent of all U.S. LNG shipped between February 2016 and May 2018, has taken delivery from just one vessel that left the United States in June and none so far in July, compared with 17 in the first five months of the year.

Gold ends at more-than-1-year low as dollar shifts higher for the week

Yellow metal sees fifth loss in six sessions
Getty Images

Gold futures fell Thursday, closing at a more-than-one-year low, as trade tensions between the U.S. and China resurfaced a day after the Federal Reserve affirmed its intention to lift rates further in 2018. Both factors have given the U.S. dollar more buoyancy in recent trade, weighing on commodities pegged to the currency. Rising trade animosities between Washington and Beijing were in focus on Wall Street, as the Trump administration threatened to more than double proposed duties on $200 billion of Chinese goods to 25%, up from an original 10%. That has weighed on global stock markets but has provided the U.S. dollar a lift, as global trade tensions have recently flared up. A measure of the dollar against a basket of six other currencies, the ICE U.S. Dollar Index DXY, +0.04% was up 0.5% at 95.095, with its week-to-date gain at 0.4%. The Bank of England’s interest-rate hike wasn’t enough to lift the British pound into positive territory versus the U.S. dollar on Thursday. The U.K. central bank upped its benchmark rate by 25 basis points to 0.75% in an unexpectedly unanimous vote. A stronger greenback makes assets priced in the U.S. unit more expensive to buy using other currencies. “Gold has no story going forward,” said Ira Epstein, managing director, at commodities broker Linn Group. Gold is now fighting a rising set of interest rates in America and it saw the Bank of England raise rates today and it’s going to have to deal with the fact that if Europe stabilizes rates there will start climbing,” he said. Rising yields of risk-free government bonds can dull the appeal of gold which doesn’t offer a yield. The Fed on Wednesday upgraded its assessment of the U.S. economy and hinted at another interest-rate hike as soon as September. The 10-year U.S. government bond yield TMUBMUSD10Y, -1.31%  edged lower to 2.985%, after hitting a psychologically significant level at 3% and finishing late-Wednesday trade in New York at its highest yield since May 23 after the Fed’s policy update. “The markets got exactly what they had been expecting in terms of no rate increase this month and continued commitment to gradual normalization of rates,” said George Milling-Stanley, head of gold investment strategy at State Street Global Advisors. He believes “there is no reason to expect any significant impact on gold prices in either direction,” but “there is always the possibility of a small knee jerk bounce in gold now that the meeting is out of the way without any apparent increase in hawkishness on the committee.” In other metals trading, September silver SIU8, +0.26% lost 6.7 cents, or 0.4%, to $15.385 an ounce. September copper HGU8, +0.58% the base metal which has been the most vulnerable to concerns over trade clashes, fell a penny, or 0.4%, to $2.738 a pound. The industrial commodity has lost 2.3% so far this week. October platinum PLV8, +0.54%  ended at $828.20 an ounce, up nearly 1.4%, while September PAU8, -1.08%  added 0.4% to $915.50 an ounce.

China plans tariffs on $60 billion of U.S. goods in latest trade salvo

BEIJING/SINGAPORE (Reuters) – China proposed retaliatory tariffs on $60 billion (46.14 billion pounds)worth of U.S. goods ranging from liquefied natural gas (LNG) to some aircraft on Friday, as a senior Chinese diplomat cast doubt on prospects of talks with Washington to solve their bitter trade conflict. The Trump administration tightened pressure for trade concessions from Beijing this week by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports. China vowed to retaliate while also urging Washington to act rationally and return to talks to resolve the dispute. The United States and China implemented tariffs on $34 billion worth of each others’ goods in July. Washington is expected to soon implement tariffs on an additional $16 billion of Chinese goods, which China has already announced it will match immediately. China has now either imposed or proposed tariffs on $110 billion of U.S. goods, representing the vast majority of China’s annual imports of American products. Last year, China imported about $130 billion of U.S. goods. China’s finance ministry unveiled new sets of additional tariffs on 5,207 goods imported from the United States, with the extra levies ranging from 5 to 25 percent. Timing will depend on the actions of the United States, the Chinese Commerce Ministry said in a separate statement. The U.S. side has repeatedly escalated the situation against the interests of both enterprises and consumers,” it said. “China has to take necessary countermeasures to defend its dignity and the interests of its people, free trade and the multilateral system.” A top adviser to U.S. President Donald Trump said the newly proposed tariffs were not as severe as the White House had been bracing for, and he warned China not to test Trump’s resolve. “They better not underestimate the president,” White House National Economic Council Director Larry Kudlow said in an interview on Fox Business Network. “He is going to stand tough.” The United States alleges that China steals U.S. corporate secrets and wants it to stop doing so, and is also seeking to get Beijing to abandon plans to boost its high-tech industries at America’s expense. Washington also wants China to stop subsidising Chinese companies with cheap loans, claiming that this allows them to compete unfairly. Trump has said he is determined to reduce the large U.S. trade deficit with China. The U.S. president has accused China and others of exploiting the United States in global trade, and has demanded Beijing make a host of concessions to avoid the new duties on $200 billion of Chinese goods, which could be imposed in the weeks after a comment period closes on Sept. 5. Beijing says the United States is deliberately creating the trade conflict, using bullying tactics, and ignoring international negotiating norms so that it can stop the rise of China as a competitor on

Trump trade war will add $3,000 to price of some popular pickup trucks, minivans, Toyota says

Toyota July US sales down six percent

Toyota July US sales down six percent. The Trump administration’s trade war will make Toyota pickup trucks and minivans more expensive, adding about $3,000 to the sticker price of some of its best-selling automobiles, Toyota executives said after reporting record profits Friday. Global net income at the Japanese automaker rose from 613.0 billion yen ($5.52 billion) to 657.3 billion yen during its first quarter ended June 30. But executives told reporters on a call Friday that the increased U.S. tariffs could seriously affect Toyota’s bottom line and hurt jobs. “A 25 percent tariff on automotive imports, which is just a tax on consumers, would increase the cost of every vehicle sold in the country,” Toyota said in a statement. The extremely popular Toyota Camry sedan, which is assembled in Kentucky, would cost an extra $1,800 if a 25 percent tariff were to take effect, the company said. Toyota’s full-size pickup, the Tundra, and the Sienna minivan, which are also assembled in the U.S., would cost an extra $2,800 and $3,000, respectively. Even fleet customers, such as drivers for taxi companies or ride-hailing services such as Uber and Lyft would be hit by increases. “This is not helping those blue-collar workers who voted for Trump,” Kelley Blue Book senior analyst Rebecca Lindland said. “Renegotiating NAFTA is long overdue. But slapping tariffs on an inflexible industry is not protecting American jobs, American investors or American consumers.”

Toyota employs 137,000 people in the U.S. at its 10 factories and dealership network here, the company said in a statement. “They are not a national security threat,” Toyota said, alluding to President Donald Trump’s rationale for the increased tariffs. Trump has already slapped 25 percent tariffs on several billion dollars of goods from China and is investigating the possibility of imposing similar tariffs on imports from other countries, including autos and vehicle parts. The Trump administration has justified these tariffs by invoking Section 232 of Trade Expansion Act of 1962, which allows the government to consider tariffs on products when it is in the interest of national security. Tariffs will not just be painful for foreign corporations or investors, Lindland said. Forcing sudden changes to the automotive supply chain can create problems and raise consumer costs, she said. Even car parts can cross borders more than once during assembly, Lindland said, adding that it also has an effect that ripples outward toward dealers, mechanics and customers.

Iran To Practice Blockading Strait Of Hormuz As Saudis Say Mandeb Strait Is No Longer Safe

Any serious Iranian attempt to shut down both passages simultaneously could be a nightmare scenario for international commerce, or worse

Iran’s Islamic Revolutionary Guard Corps, or IRGC, is reportedly preparing for a major naval exercise involving dozens of small boats to demonstrate its ability to close off the highly strategic Strait of Hormuz, which separates the Persian Gulf from the Gulf of Oman, to international shipping with mines and other hazards. The snap drill follows a new surge in tensions between the United States and Iran and comes amid efforts on the part of Iranian-backed Houthi rebels in Yemen to block the equally vital Bab Al Mandeb Strait linking the Red Sea with the Gulf of Aden. Reports of the impending exercise first began to emerge on Aug. 1, 2018. Though the drill in of itself is not unusual, the timing is, with the annual event typically occurring later in the year. There are also indications from various outlets, including Fox and CNN, citing unnamed sources, that this year’s iteration will be larger than normal, featuring over 100 watercraft of various descriptions. “We will make the enemy understand that either everyone can use the Strait of Hormuz or no one,” the IRGC’s commander Major General Mohammad Ali Jafari said on July 5, 2018. The powerful quasi-military organization has hundreds of small boats and semi-submersibles and often works with the regular Iranian Navy’s midget submarines. Any of these boats could lay mines and otherwise harass both civilian maritime activities and foreign military operations in and around the Strait. “The Americans have claimed they want to completely stop Iran’s oil exports,” Iranian President Hassan Rouhani also said in July 2018 before making what could be considered to be his own veiled threat. “They don’t understand the meaning of this statement because it has no meaning for Iranian oil not to be exported while the region’s oil is exported.”

Google Maps A map showing the Strait of Hormuz, the main neck of which is seen between the marker for Bandar Abbas in Iran and Ras Al Khaimah in the United Arab Emirates.

Rouhani made those comments while in Switzerland trying to maintain support for the international deal over his country’s controversial nuclear program. In May 2018, the U.S. President Donald Trump and his administration withdrew the United States from the agreement and pledged to re-enact various sanctions against Iran, including efforts to block its oil exports. Subsequent comments from Rouhani prompted a fiery tirade from Trump on Twitter. The U.S. military has made it clear that it, along with its regional partners, will take steps necessary to keep the Strait open in the event Iran decides to follow through on its threats.

“We are aware of the increase in Iranian naval operations within the Arabian Gulf, Strait of Hormuz, and Gulf of Oman,” Captain William Urban, the chief spokesman for U.S. Central Command, which oversees all American operations in the region, told CNN on Aug. 1, 2018. “We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways.”

Iran has threatened to close the Strait of Hormuz repeatedly in the past and the threat is well understood at this point. In January 2018, the IRGC held another exercise in the region that also coincided with heightened rhetoric between Iranian officials and their U.S. counterparts. Over the years, the U.S. military has positioned various mine hunting and sweeping assets in the region, including one of its new Expeditionary Sea Base the USS Lewis B. Puller, and has been working with its allies to mitigate the impact of any potential incident as a result of these standing threats. But these latest drills continue to demonstrate just how quickly Iran could decide to act upon these threats if it decided to and how hard it might be to respond quickly enough to prevent them from laying hundreds of mines or otherwise making the Strait unnavigable. Even if no further fighting erupted, clearing the mines could take weeks or months.

USN A look at the various vessels available to the Iranian Navy, in the green section, and the IRGC’s naval units, in the red area.

With approximately 20 percent of the world’s oil exports heading to their destinations via the Strait of Hormuz, if it were to end up closed for any appreciable amount of time it could have serious global economic repercussions. The waterway also serves as a pathway for nearly 90 percent of the region’s overall energy exports, including natural gas, which could make it particularly devastating for Iran’s regional opponents such as Saudi Arabia and the United Arab Emirates. And this is exactly the point from Iran’s perspective. More worrisome, Iran may be in the process of something of a “dry run” in the Bab Al Mandeb Strait on the other side of the Arabian Peninsula or is otherwise using that zone to explore just what it can do directly and indirectly to impede international maritime traffic. On July 26, 2018, Saudi Arabia announced it had halted oil shipments through that equally constrained waterway after a pair of attacks on its oil tankers, which Houthi rebels in Yemen claimed responsibility for afterward.

Google Maps A map showing the Bab Al Mandeb Strait, which is narrowest near the border of Djibouti and Eritrea to its north on the western shore and Yemen on the other side.

The raiders damaged one ship, the Arsan, but caused no casualties. This is not the first time the Houthis have targeted commercial shipping, either. Still, these latest attacks do represent a significant escalation in the Iranian-backed fighters push to attack Saudi economic interests, as well as naval vessels belonging to that country and its allies. It can be hard to verify the exact nature of Houthi attacks in the area and it is possible there have been other, unreported attacks, as well.

Subsequent reports suggested an Iranian-flagged cargo ship might also be actively supporting the Houthi naval activities, but it is also possible that this ship, the M/V Saviz, has been helping smuggle weapons to the group or otherwise gathering intelligence on their behalf. The Saudi Arabian-led coalition has been engrossed in a grueling and controversial fight with the Yemeni faction since 2015. The United States has been supporting these operations and has found itself drawn into the conflict on multiple occasions. Iran has supplied the insurgents with a variety of weapons and provided additional support to aid their own local production. The United States and other countries have provided evidence that the two parties are actively cooperating on suicide drones, remote-control explosive-laden boats, improvised naval mines, surface-to-air missiles, and ballistic missiles.

An asymmetric Iranian or Iranian-backed “blockade” of both the Strait of Hormuz and the Bab Al Mandeb Strait simultaneously would represent something of a nightmare scenario for the United States and its partners in the region. It’s a situation we at The War Zone have been warning about for years, too. Naval countermine operations are complicated and dangerous to begin with and its easy to see how this kind of hostile action could quickly escalate into a larger skirmish. Even if the parties manage to avoid an immediate, larger conflict over the issue, American and other forces sweeping the hazards away would face the ever-present threat of Iranian small boat swarms, shore-based anti-ship cruise missiles, and ballistic missiles that could be carrying weapons of mass destruction, among other dangers. This would be something U.S. commanders would have to take into account and could slow down operations.

The video below shows scenes from the IRGC’s “Great Prophet IX” exercise in 2015, which involved simulated swarming boat attacks and

The most popular American cars will cost thousands of dollars more because of tariffs

The Trump administration says it wants to keep new cars affordable, but tariffs threaten to raise the cost of a new vehicle by thousands of dollars.

Every car sold in the United States, including those built at US factories, have many of their parts imported from foreign suppliers. If new cars get more expensive, people will be less likely to buy them. That’s not only bad for car buyers, automakers and autoworkers, it can cost lives — newer cars have safety features missing from older cars. Who says keeping the price of new cars in check can save lives? The Trump administration. When it announced a rollback of fuel economy standards Thursday, one of its arguments was that the tougher emissions rules would raise the cost of owning a new car by an average of $2,340. It said that would discourage people from buying safer cars, resulting in about 1,000 additional deaths a year. But the potential savings from abandoning the Obama-era fuel efficiency rules won’t cover the cost of the Trump administration’s proposed auto tariffs. A study this week by Experian said that a 25% tariff on imported cars and parts will raise the price of the 20 best-selling vehicles in the United States an average of $3,300 to $5,100, even though most of those vehicles are assembled at US factories. Related: Trump administration wants to lower emission standards for cars Whether or not there will be tariffs, and their exact impact, is not certain because a decision has yet to be announced by the Commerce Department. President Trump met last month with European Commission President Jean-Claude Juncker, and the two sides agreed to hold off on new tariffs for now while they continue talks. But the Commerce Department said on Thursday it is moving forward with its investigation on whether to impose auto tariffs despite that agreement. It also not clear if the tariffs would apply to vehicles and parts from Canada and Mexico, which are now covered by NAFTA. But tariffs on steel and aluminum, already put in place by the Trump administration, do apply to Canada and Mexico. And the impact of those commodity tariffs on new car prices were not included in these latest cost estimates.

Tesla shares spike, dealing short-sellers a $1.1-billion loss

NEW YORK (Reuters) – Tesla Inc (TSLA.O) shares soared as much as 15 percent on Thursday, a day after the electric car maker reported quarterly results, and financial analytics firm S3 Partners said short-sellers were slammed with more than $1.1 billion in paper losses on the day. S3 said the day’s losses pushed the aggregate year-to-date performance of short-sellers in Tesla into the red. Short-sellers aim to profit by selling borrowed shares, hoping to buy them back later at a lower price. Tesla is the most shorted U.S. stock. Tesla short-sellers had been up $276 million in year-to-date mark-to-market profits prior to the day’s rally, and the short-sellers’ paper losses have now swelled to $831 million for the year, S3 data showed. “We are not seeing a large amount of buy to covers yet,” said Ihor Dusaniwsky, head of research at S3 in New York, referring to traders buying shares to close out an existing short position. “With such a large price move on the open, most short sellers that are looking to cover are waiting for a retracement before placing buy-to-cover orders,” he said.

Tesla shares were up 14.5 percent at $344.5 in late afternoon trading, a day after the company said it would produce its new Model 3 sedan at a profit, following several recent weeks in which output had stabilized.

The update buoyed hopes that the company led by Elon Musk will stanch its losses.

Tesla’s rapid cash burn and struggles at turning a profit have made it a favorite target for shorts, including some big names such as Jim Chanos, head of Kynikos Associates, and Billionaire hedge fund manager David Einhorn’s Greenlight Capital fund.

Tesla Inc349.54
TSLA.ONasdaq
+48.70(+16.19%)
TSLA.O
  • TSLA.O

Since the beginning of 2016, Tesla is the fourth worst performing U.S. short bet, and short-sellers have lost $4.70 billion on a net basis over that period, according to S3 data.

A sharp rally in the electric car maker’s shares since early April has hurt short-sellers.

On Tuesday, Einhorn told investors that his bet against the stock had turned into heavy second-quarter losses at his Greenlight Capital fund.

“Long term short sellers will probably shrug off this loss, as they were down billions in the past and not only kept their positions but built them up,” said S3 Partners’ Dusaniwsky.

“But I would imagine shorter term momentum short sellers would be quick on the trigger to exit their positions after suffering a 10 percent loss in just one day,” he said.

(This story has been refiled to correct paragraph one to show the shares rose after the company reported quarterly results, not that shares rose after surprisingly strong earnings.)

Iran readying massive military exercise in Persian Gulf, officials say

Iranian navy boats take part in exercises in the Strait of Hormuz in January 2012.

Washington (CNN)Iran’s Islamic Revolutionary Guard is expected to soon begin a major naval exercise that could demonstrate its ability to shut down the Strait of Hormuz, a crucial conduit for global energy supplies, US officials say. The exercise in the Persian Gulf could begin as soon as the next two days, according to two US officials directly familiar with the latest assessment of the Revolutionary Guard’s troop movements. “We are aware of the increase in Iranian naval operations within the Arabian Gulf, Strait of Hormuz and Gulf of Oman. We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways,” Capt. William Urban, chief spokesman for US Central Command, told CNN. The Strait of Hormuz links the Persian Gulf to the Arabian Sea. The US Energy Information Administration calls it “the world’s most important oil transit chokepoint,” with 20% of oil traded worldwide moving through the waterway, which is about 30 miles wide at its narrowest point.

While the US sees no immediate signs of hostile intent from Iran, the Islamic Revolutionary Guard’s (IRGC) show of force has US military intelligence deeply concerned for three fundamental reasons, according to officials:
  • The exercise comes as rhetoric from the IRGC towards the US has accelerated in recent days.
  • It appears the IRGC is ramping up for a larger exercise this year than similar efforts in the past.
  • The timing is unusual. These types of IRGC exercises typically happen much later in the year.
As of now, the US assesses the IRGC has assembled a fleet of more than 100 boats, many of them small, fast-moving vessels. It’s expected Iranian air and ground assets including coastal defensive missile batteries could be involved.
Hundreds of Iranian troops are expected to participate and some regular Iranian forces could be involved as well. The IRGC exercise comes as the US has only one major warship, the guided-missile destroyer USS The Sullivans, inside the Persian Gulf, several officials say. Other US warships are nearby, and there are numerous combat aircraft in the region. The US military has been trying to encourage other nations in the region, especially Saudi Arabia, to take a strong line on keeping the Gulf open in the face of rising Iranian rhetoric. They have also expressed concern about keeping open the waterways off Yemen where Iranian-backed rebels have attacked oil tankers. US Defense Secretary James Mattis said on Friday, “Iran has threatened to close the Strait of Hormuz. They’ve done that previously in years past. They saw the international community put — dozens of nations of the international community put their naval forces in for exercises to clear the straits. Clearly, this would be an attack on international shipping, and — and it would have, obviously, an international response to reopen the shipping lanes with whatever that took, because of the world’s economy depends on that energy, those energy supplies flowing out of there.”

Trump tells Sessions to end Russia probe ‘right now’

President Donald Trump said Wednesday his attorney general should terminate “right now” the federal probe into the campaign that took him to the White House, a newly fervent attack on the investigation that could imperil his presidency.

White House press secretary Sarah Huckabee Sanders scrambled to explain that Trump’s tweet was “not an order” and the president was not directing his attorney general to do anything. “It’s the president’s opinion,” she said. But Trump’s early morning tweetstorm again raised the specter that he could try to more directly bring special counsel Robert Mueller‘s Russia-Trump election-collusion probe to a premature end. And it revived the idea that the president’s tweets themselves might be used as evidence that he is attempting to obstruct justice. Meanwhile, Trump attorney Rudy Giuliani said negotiations are continuing to have Trump sit down for questions from Mueller, though the lawyer said, “I’m not going to give you a lot of hope that it’s going to happen.” He said both sides had exchanged proposals for conditions for such an interview, “and yesterday we got a letter back from them and now we’re in the process of responding.” Trump has raged privately in recent days that both the forces of government and the media are trying to undermine him. That includes trumped-up charges against his former campaign chairman, Paul Manafort, and distorting the outcome of the Helsinki summit to make it appear he was beholden to Russia, according to two Republicans close to the White House who were not authorized to discuss private conversations and spoke on condition of anonymity.

Trump was closely monitoring news coverage of the Manafort proceedings, which provoked the spate of incendiary tweets, according to the two Republicans and two White House officials.

“The president’s not obstructing, he’s fighting back,” said Sanders, dismissing the idea that Trump’s tweets could be tantamount to obstruction of justice. The most inflammatory of Trump’s tweets said, “This is a terrible situation and Attorney General Jeff Sessions should stop this Rigged Witch Hunt right now, before it continues to stain our country any further. Bob Mueller is totally conflicted, and his 17 Angry Democrats that are doing his dirty work are a disgrace to USA!”

The president’s anger came the day after the start of the trial of Manafort, who is facing federal charges of bank fraud and tax evasion. And while Mueller did not bring any election-related charges against Manafort, the specter of the Russian investigation is hanging over the Alexandria, Virginia, courthouse. And Trump’s White House.

Banks are still playing with fire a decade after the recession

 AFP/Getty Images A Lehman Brothers company sign was one of the items auctioned off at Christie’s auction house in London in 2010. The global financial services firm declared bankruptcy 10 years ago.

It’s been a decade since the global financial crisis rocked the world. In the years since 2008, the U.S. and other countries put together the pieces of their broken economies, assessing what went wrong and trying to curb the abuses that could lead to another crisis. But today many factors that contributed to the implosion still pose a threat. Although Wall Street may not go gaga over home loans as it did leading up to the last panic, it’s only a question of time before the next speculative frenzy hits. Even with regulations in place, competition and greed push Wall Street to find a new way to get rich quick. And when it does, these four factors will make the ensuing financial crisis all the worse.

1. Big banks hold even more assets than before the crisis

One of the contributing factors to the 2008 global financial crisis was that so few banks owned so many assets. The top five banks owned nearly 45% of financial assets leading up to the crisis, and they own slightly more today (more than 46%). The top 10 banks control more than 55% of total assets. America’s approximately 5,700 other banks control the remaining 45%. Concentration in itself is not worrisome. There’s no reason big banks can’t keep making smart decisions. But concentration of assets becomes catastrophic when those banks are all doing the same (dumb) thing, such as writing poor loans or gambling against the value of homes via sophisticated insurance contracts (credit default swaps). Then other smart financial institutions are not large enough to step in and bail out the failing ones. So the government has to intervene. And whereas the banks may steer clear of speculative excess today, competition virtually ensures that, eventually, Wall Street will do dumb things again.

2. Banks retain high leverage

The banking sector is particularly prone to blowups because it uses a lot of debt (i.e., leverage), writing large loans against a small down payment. This is normal for the industry and is not especially worrisome, if banks are operated prudently. Here’s how the situation stacks up now versus 2008. Banks are using just a bit less leverage than previously (a higher percentage means less leverage). During good times leverage works wonders, because it rapidly increases the bank’s profitability. That’s why banks would like to use more leverage. But leverage does the opposite in bad times. When the value of houses plummets, banks are required to write off that value on their books, making the bank even more leveraged. If leverage keeps rising, the bank effectively becomes bankrupt. That’s why there is stringent regulation surrounding how much leverage a bank can take on, and why further regulations were developed in the aftermath of the crisis. In an industry with high leverage, the proverbial run on the bank can happen a lot faster than in other industries without leverage.

3. Limited prosecutions lead to moral hazard

No executives from “too big to fail” banks were prosecuted for issues related to the financial crisis. For that crisis, which many argue was due to banks’ criminal activities, the lack of widespread punishment creates “moral hazard.” In other words, if executives feel they are personally exempt from repercussions, they’re more likely to engage in bad behavior, especially if it benefits them financially.

Rather than pursue executives individually, prosecutors have tended to go after the companies. They’ll fine the bank, and no one gets jail time. According to The Wall Street Journal, the six largest banks paid $110 billion in penalties for issues related to the crisis. So it’s the shareholders who suffer, since their investment is being punished, rather than an executive.

4. Politicians, banks aim to peel back regulations

In the wake of the financial crisis, Congress passed the Dodd-Frank Act, which regulated banks. The law created the Volcker rule preventing government-insured banks from engaging in certain kinds of speculative, typically highly leveraged activity. The law also created the Consumer Financial Protection Bureau, which regulates the banking industry.

Following a few years of relative economic normalcy, the financial lobby and many politicians are pushing back against the legislation, saying that regulation harms the industry. And there’s at least some truth to that, because the legislation is more costly for the medium and small community banks. But larger banks are also pushing this line because they want to take more risks; for example, in speculative trading that is currently prohibited by the Volcker rule. Those riskier activities could blow up a bank.So a repeal of those regulations, or even just parts of them, could pose more danger to the economic system, setting the stage for more “casino capitalism” and another bank crisis.

Huawei beats Apple in smartphone sales for the first time

Huawei just reached a major milestone, passing Apple to become the world’s second largest smartphone seller.The Chinese smartphone maker sold around 54 million phones last quarter, up more than 40% compared to the same period last year, according to research firms IDC, Canalys and IHS Markit. That was enough to not only beat Apple (AAPL), but also narrow the gap with market leader Samsung (SSNLF). Samsung sold more than 70 million phones last quarter, down about 10% from the same time last year. “The continued growth of Huawei is impressive, to say the least, as is its ability to move into markets where, until recently, the brand was largely unknown,” IDC analyst Ryan Reith said in a statement. Huawei has leaped into second place despite being virtually locked out of the world’s biggest economy. The Chinese smartphone and telecom equipment maker has struggled to gain a toehold in the United States, mainly because of official concerns that its technology could be used by the Chinese government to gather intelligence.

Huawei has repeatedly denied that its products pose security risks. Huawei told CNN back in 2017 that it aims to be number one in the smartphone industry. Earlier this year it failed to clinch its first partnership with a major US carrier, after talks with AT&T fizzled out at the last minute. Having the backing of a wireless carrier is key to making inroads in the United States. CNN is part of WarnerMedia, which is owned by AT&T. “Despite its failure to strike a US carrier partnership … the company has turned around quickly, moving away from its drive for profitability and focusing instead on finding volume growth at the low end,” Mo Jia, an analyst with Canalys, said in a statement. Selling millions of cheap phones has worked well for Huawei in the Asia Pacific region, where its sales more than doubled compared with the same quarter last year, according to IHS Markit. It also experienced strong growth in Europe, the Middle East and Africa. The success in its smartphone division comes as Huawei faces significant headwinds in its telecommunications business. Following the United States, security officials in the UK, Australia and Canada have in recent months warned of potential national security risks from using the Chinese firm’s telecom equipment. Huawei is one of several companies racing to develop capabilities for 5G, the next generation of wireless technology. If major countries refuse or ban the use of Huawei’s telecom gear, it would significantly handicap the company’s ambition tobecome a global leader in 5G technology.

Pence affirms ‘Russia meddled in our 2016 elections,’ lays out plans to prevent it from happening again

Vice President Mike Pence speaks in the East Room of the White House in Washington, D.C., U.S., on Friday, May 18, 2018.
Andrew Harrer | Bloomberg | Getty Ima
Vice President Mike Pence speaks in the East Room of the White House in Washington, D.C., U.S., on Friday, May 18, 2018. Vice President Mike Pence described several new initiatives meant to prevent cyberattacks against U.S. elections systems on Tuesday. The Federal Bureau of Investigation has formed a foreign influence task force, he said, aimed at investigating sources of nation-state backed election influence. DHS has launched the elections information sharing and analysis center, which includes participation from U.S. secretaries of state with the goal of sharing threat information to “help prevent attacks before they happen.”

Pence said the moves would “elevate American security.” “We will be as dominant in the digital world as we are in the physical world,” he said. He also affirmed findings from U.S. intelligence agencies that Russia interfered in the 2016 election. “The fact is Russia meddled in our 2016 elections. That’s the unambiguous judgment of our intelligence community, and as the President said, we accept the intelligence community’s conclusion,” he said.

Facebook removes fake accounts that were trying to interfere in the midterm elections

To combat cyber threats in the upcoming Congressional election, Pence said the administration is also deploying “new sensors” to detect threats, and 37 states have opted in so far, he said. Federal cybersecurity officials are also being deployed to state and local elections commissions. He cited a cyberattack in July against government services in Finney County, Kansas, including elections infrastructure, to which he said DHS responded and helped remediate. Pence focused several comments on efforts to support better information exchanges between federal agencies and private sector companies. He referred to numerous types of attacks from countries other than Russia, including theft of intellectual property from China, the criminal intrusion of Equifax last year and the WannaCry ransomware attacks of 2017 that have been attributed to North Korea. He also called out particularly damaging effects of global infrastructure attacks, another key focus of the conference: “[Cyberattacks] also target our economy — a single Russian malware attack last year cost a major American shipping company $400 million,” said Pence, referring to the NotPetya cyberattack of June 2017, that deeply affected the supply chain of shipping giant FedEx.Pence’s comments followed statements by FedEx’s chief information security officer Gene Sun, who outlined the damage suffered by the company in the June attacks last year. FedEx “saw the ripple effect of supply chain damages,” Sun said “Medical supplies could not be shipped out. We quickly came to a few realizations, number one, that we as a logistics company cannot go it alone,” he said. The conference focused on the launch of a new National Risk Management Center, to help pool corporate and government cybersecurity information into one location. Facebook also announced earlier today that it had worked to take down 32 Instagram and Facebook accounts that were part of what the company called a “coordinated effort” to influence U.S. politics.

Trump tells Jeff Sessions to put an end to Russia probe as he claims prosecutors doing Robert Mueller’s ‘dirty work are a disgrace’ to America

Donald Trump has ratcheted up his pressure on Attorney General Jeff Sessions, saying in a tweet that the Attorney General of the United States should step in and put an end to Special Counsel Robert Mueller’s long-running Russia probe   ‘Attorney General Jeff Sessions should stop this Rigged Witch Hunt right now,’ the president tweeted. ‘Bob Mueller is totally conflicted, and his 17 Angry Democrats that are doing his dirty work are a disgrace to USA!’  The White House ignored a Wednesday Wednesday about whether Trump will push the envelope further and order Sessions to fire Mueller. Trump’s mention of 17 prosecution lawyers is a reference to what he claims is an abundance of Democrats on Mueller’s staff. The special counsel himself is a Republican.

President Trump said outright on Wednesday that his attorney general should put an end to the special counselprobe into Russ'as 2016 election interference

Jeff Sessions recused himself in March 2017 from matters related to Russian election meddling because he was a Trump campaign advisor, and Trump has said he would not have picked him if he knew that would be the result

Trump has publicly criticized Sessions before, tweeting in June that the Mueller ‘witch hunt’ was only proceeding ‘because Jeff Sessions didn’t tell me he was going to recuse himself.’ ‘I would have quickly picked someone else. So much time and money wasted, so many lives ruined … and Sessions knew better than most that there was No Collusion’ with the Kremlin,’ he added. Video playing bottom right…

'Jeff Sessions should stop this Rigged Witch Hunt right now, before it continues to stain our country any further,' Trump tweeted Wednesday

‘Jeff Sessions should stop this Rigged Witch Hunt right now, before it continues to stain our country any further,’ Trump tweeted Wednesday

Trump went all-in barely a half-hour later, calling the focus of Mueller's investigation a 'TOTAL HOAX'

Special Counsel Robert Mueller is conducting a lengthy probe that began as an inquiest into alleged but unproven allegations that the Trump campaign colluded with the Kremlin to beat Hillary Clinton in 2016

Democratic Rep. Adam Schiff, a frequent Trump antagonist, said Wednesday that the president's tweets amounted to obstruction of justice

Trump’s lawyer Rudy Giuliani, the former New York City mayor, has been making the TV rounds and claiming that ‘collusion is not a crime.’ Trump doubled down on that assertion a day later. The word ‘collusion’ isn’t part of any federal law forming the basis of Mueller’s investigation, but he has reportedly been looking at some of the president’s tweets to supplement circumstantial evidence of obstruction of justice. California Democratic Rep. Adam Schiff tweeted a similar suggestion after Trump’s morning burst. ‘The President of the United States just called on his Attorney General to put an end to an investigation in which the President, his family and campaign may be implicated,’ wrote Schiff, the ranking Democrat on the House Intelligence Committee.  ‘This is an attempt to obstruct justice hiding in plain sight. America must never accept it.’