Trump says he can defy US Constitution to end birthright citizenship

© Nicholas Kamm, AFP | In this file photo taken on October 27, 2018, US President Donald Trump speaks with reporters before departing for a rally in Murphysboro, Illinois.

President Donald Trump vowed to end the right of citizenship to children born in the United States to non-citizens and illegal immigrants in his latest bid to dramatically reshape immigration policies just days before the midterm elections. Trump would target the citizenship right through an executive order, he told news website Axios in an interview published on Tuesday, a move that would prompt a legal fight.  The right of US citizenship is granted to US-born children under the 14th Amendment of the Constitution, which cannot be changed by the president. The text of the 14th Amendment reads: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside.” Current Supreme Court precedent shows that the children of non-citizens born in the United States are citizens. It was unclear what specific action his order would pursue, and Trump gave no details. He did not say when he planned to sign the executive order, or how the White House would go about reviewing the change. He has previously lied about proposed executive orders, which have gone unfulfilled.  “This is blatantly unconstitutional,” Omar Jadwat, head of the ACLU Immigrants’ Rights Project told Reuters. “The president obviously cannot overturn the Constitution by executive order. The notion that he would even try is absurd.” Changing an amendment in the Constitution would require the support of two-thirds of the US House of Representatives and the Senate, and the backing of three-fourths of US state legislatures at a constitutional convention. But Trump said he has talked to his legal counsel and was advised he could enact the change on his own. Asked about the dispute over such presidential powers, Trump said he stood by his comments. “It’s in the process. It’ll happen,” he told Axios in the interview, which will air in full on the HBO pay cable channel on Sunday. Trump also claimed that the US is the only country to have such a policy, which is entirely false. There are about 30 countries that apply the principle of birthright citizenship. Some conservatives have long pushed for an end to the guarantee of birthright citizenship. Republican Senator Lindsey Graham welcomed Trump’s announcement on Twitter, calling the practice a “magnet for illegal immigration”.

But other Republicans pushed back on the news, saying that a key tenet of the American Constitution could not be changed so easily. “You cannot end birthright citizenship with an executive order,” said House Speaker Paul Ryan. “You obviously cannot do that,” he continued, speaking to Kentucky radio station WVLK on Tuesday. Trump, whose hard-line immigration stance helped him win the White House, has seized on the issue in recent weeks in the run-up to the November 6 vote that has Americans sharply divided and grappling with race and national identity. His latest comments also come after the deadliest attack on Jews in US history on Saturday and a series of bombs sent to top Democrats and other Trump critics last week. Democrats and other critics have condemned the president’s rhetoric as inflammatory, urging Trump to tone down his language and calling on voters to use the elections as a way to reject such policies. US Senator Chris Coons, a Democrat on the Senate Foreign Relations Committee, told MSNBC that Trump “was driving a false narrative on immigration” in many ways to stoke fear and turn it into an election issue.

Oil prices down on rising supply, trade war

NEW YORK (Reuters) – Oil prices dropped more than 1 percent on Tuesday on signs of rising supply and concern that global economic growth and demand for fuel will fall victim to the U.S.-China trade war. Earlier in the session, Brent reached a session low of $75.09 a barrel, the lowest since Aug. 24. WTI slumped to $65.33 a barrel, the weakest since Aug. 17. Prices were little changed in post-settlement trade after industry group the American Petroleum Institute reported U.S. crude inventories rose 5.7 million barrels last week, more than analysts’ forecast for a 4.1 million-barrel build. Investors will look to official government data on U.S. inventories due to be released Wednesday. Both crude benchmarks have fallen about $10 a barrel from four-year highs reached in the first week of October and were on track to post their worst monthly performance since July 2016. Oil has been caught in the global financial market slump this month, with equities under pressure from the trade fight between the world’s two largest economies. The United States has imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of U.S. goods. U.S. President Donald Trump said on Monday he thinks there will be “a great deal” with China on trade but warned that he has billions of dollars worth of new tariffs ready to go if a deal is not possible. Trump said he would like to make a deal now but that China was not ready. He did not elaborate. “One discussion that is developing is that (trade tensions) are hurting demand for crude oil. There’s probably an element of truth to that,” said Bob Yawger, director of futures at Mizuho in New York. The International Energy Agency (IEA) said high oil prices were hurting consumers and could dent fuel demand at a time of slowing global economic activity. Oil production from Russia, the United States and Saudi Arabia reached 33 million barrels per day (bpd) for the first time in September, Refinitiv Eikon data showed. C-RU-OUT C-OUT-T-EIA PRODN-SA That is an increase of 10 million bpd since the start of the decade and means the three producers alone now meet a third of global crude demand. The United States is set to impose new sanctions on Iranian crude from next week, and exports from the Islamic Republic have already begun to fall. Saudi Arabia and Russia have said they will pump enough to meet demand once U.S. sanctions are imposed. China, Japan factory output weakens in face of trade threat “The fact that this price weakness is developing just ahead of the official kickoff of the Iranian oil sanctions suggests an amply supplied market in which additional supply was brought to market well in advance of a likely acceleration in Iranian export decline,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

Trump accuses media of stoking ‘great anger’ in US

Despite calls for him to cool his overheated rhetoric after the deadly synagogue shooting and pipe bomb mailings, President Trump on Monday continued his assault on the “Fake News Media” by continuing to accuse them of stoking rage.

“There is great anger in our Country caused in part by inaccurate, and even fraudulent, reporting of the news. The Fake News Media, the true Enemy of the People, must stop the open & obvious hostility & report the news accurately & fairly,” he wrote on his Twitter account.

“That will do much to put out the flame of Anger and Outrage and we will then be able to bring all sides together in Peace and Harmony. Fake News Must End!,” the president posted, just two days after 11 people were gunned down by a man yelling “all Jews must die” at a Pittsburgh synagogue. The tweets also come three days after Cesar Sayoc was arrested for sending 14 pipe bombs through the postal system to a number of prominent Democrats, including former President Barack Obama, his Vice President Joe Biden, and Trump’s 2016 presidential opponent, Hillary Clinton — all outspoken critics of Trump’s. GOP Sen. James Lankford of Oklahoma said Trump can’t be blamed for the actions of a “hate-filled individual” at the synagogue, but urged the president to tamp down his rhetoric because it “doesn’t help the basic dialogue.” “I’ve said this to the president before: The president needs to be more clear in his rhetoric and doesn’t need to be as caustic in his rhetoric,” Lankford said Sunday on CBS’ “Face the Nation.” Anthony Scaramucci, the former White House communications director, said Trump doesn’t need to go to “war with the media.” “There’s no need to have a war with the media,” he told CNN’s “State of the Union” on Sunday. “You know, as far as I’m concerned, you can have an adversarial relationship, but we should be de-escalating this stuff.” But Democrat Rep. Adam Schiff said Trump’s comments set a tone “of division, often one of hatred, sometimes one of incitement of violence against journalists, and there is no escaping our responsibility.” “This president’s modus operandi is to divide us,” the California lawmaker said on CNN. “It’s not enough that on the day of a tragedy he says the right words, if every other day of the year he’s saying things to bring us into conflict with one another.” Trump condemned the synagogue shooting as “anti-Semitic” and “pure evil.” “There must be no tolerance for anti-Semitism in America or for any form of religious or racial hatred or prejudice,” Trump said during a rally Saturday in Illinois.

11 Dead, Several Others Shot At Pittsburgh Synagogue

robert bowers 11 Dead, Several Others Shot At Pittsburgh Synagogue(Photo Credit: Pennsylvania Department of Transportation)

PITTSBURGH (KDKA) – Eleven people have been killed and a number of others injured after a shooting at The Tree of Life Synagogue in Squirrel Hill on Saturday. Police sources tell KDKA’s Andy Sheehan the gunman, Robert Bowers, walked into the building and yelled, “All Jews must die.” Sheehan’s sources also confirmed that eleven people have died. No children are among the deceased. Bowers was reportedly armed with an AR-15 and three handguns. The initial call to 911 was made around 9:54 a.m. and officers were dispatched to the scene within a minute. Two officers arrived on the scene and observed a male who was carrying an assault-style weapon, according to police. Bowers opened fire on the two officers and then retreated back into the building. One of the officers suffered a gunshot wound to the hand and the other officer received several cuts to his face from shrapnel and broken glass. Pittsburgh SWAT officers arrived on scene, formed a small team and entered the building. Upon entering the building officers observed the devestation. SWAT medics carried two victims, one male and one female, outside of the building. The victims were transported to UPMC Presbyterian Hospital for treatment. Officers began searching the third floor of the synagogue when they encountered Bowers again, who opened fire on the SWAT team. One officer was shot multiple times and critically wounded and another officer was also shot multiple times by Bowers. The remaining SWAT officers engaged Bowers while the two injured officers were carried outside to Pittsburgh Paramedics. Bowers was injured in the exchange of gunfire. After being taken into custody, the suspect made statements to an officer that he wanted all Jews to die and also that Jews were committing genocide on his people, according to authorities.

The global selloff has erased $5 trillion from stock and bond markets in October

IStockphoto What’s a few trillion gone from investors’ portfolios?

The recent stampede by investors has erased about $5 trillion in value from global stock and bond markets in October alone. But that shouldn’t be severe enough to affect the economy, for now, according to economists at Deutsche Bank. Still, unless the markets regain their footing soon, the pressure for the Federal Reserve to reassess their monetary policy will continue to mount, they said. “Academic studies of the wealth effect find that households and companies don’t react to short-term fluctuations in their wealth but instead react to a moving average of where their wealth levels are,” said Torsten Slok, chief international economist at Deutsche Bank Securities, said in a note to clients. As the chart below illustrates, global markets shed roughly $5 trillion in market cap just this month, but the total value of equity and debt markets has increased $15 trillion from 2017.

“The bottom line is that we need a more significant correction before it will begin to have a meaningful impact on the economic outlook,” he said. The Fed said wages and prices are rising in its 12 districts and overall economic activity expanded at a “modest to moderate” pace, according to the Beige Book released on Wednesday. The report, which compiles anecdotal observations about the economy, by and large suggests that the Fed is likely to stay on course to execute its fourth rate rise of 2018 in December and deliver additional increases next year unless there is a more dramatic unwind in the financial markets. Much of the stock market’s volatility have been blamed on worries over the adverse impact of higher rates as the 10-year Treasury yield TMUBMUSD10Y, -1.35%  spiked in early October to 3.261%, a level not seen since 2011. A rise in yields leads to steeper borrowing cost for corporations and eventually can slow economic expansion. It can also call make bonds an attractive alternative to more volatile equities. Gross domestic product grew 3.5% in the third quarter, compared with 4.2% in the second quarter, according to a government report Friday. Data showed that consumer spending rose in the latest quarter but was offset by a slowdown in business and residential investment. Even so, with U.S. stocks reeling, the threshold for the Fed to reconsider its hawkish stance may be near, according to Matthew Luzzetti, senior economist at Deutsche Bank. “The recent financial market turbulence should not affect the Fed outlook dramatically unless it becomes more severe and protracted,” he said earlier this month.For that to happen, the Deutsche Bank’s financial conditions index would have to move down to near zero, per the following chart.

“A further 10% decline in equities, which would amount to a roughly 15% decline from the recent peak…would be needed to tighten financial conditions by enough to materially impact the Fed,” said Luzzetti. U.S. stocks headed south Friday with the S&P 500 SPX, -1.73%  and the Dow Jones Industrial Average DJIA, -1.19%  turning red for the year as disappointing results from a handful of megacap companies weighed on investors’ sentiment. The sharp selloff this month has prompted at least one market expert to suggest that stocks are in the midst of a sustained downward spiral. “With the S&P 500 only five weeks removed from its all-time high, we’ve not been definitive about labeling this move a new cyclical bear market. But it’s very likely we are experiencing one,” said Doug Ramsey, chief investment officer at Leuthold Group, in a report.

He noted that the MSCI ACWI Ex-USA Index, a benchmark for 46 foreign markets, closed only 0.1% away from “official” bear territory and the market action reminds him of the dismal summer days of 1990. “While the big event in that year’s first half was the Japanese stock market’s collapse from its late-1989 high, foreign markets of all stripes were down sharply by the time the S&P 500 saw its final high in mid-July,” he said. Back then, the MSCI ACWI Ex-USA bottomed out ahead of the S&P 500, something which Ramsey expects to recur fairly soon.

US Economy Grew by Healthy 3.5% in Third Quarter

President Donald J. Trump (Photoby Joe Raedle/Getty Images)

The U.S. economy grew by a healthy 3.5% in the third quarter of 2018. As Ed Morrissey notes, “For the first time in more than three years, the US economy grew at an annualized rate of 3% in GDP in two successive quarters. The third quarter expansion measured 3.5% following Q2’s 4.2%.” As the Associated Press observes, “The result was slightly higher than many economists had been projecting. It was certain to be cited by President Donald Trump as evidence his economic policies are working.” As CNBC notes, inflation also remains low: “The U.S. economy grew at a faster-than-expected rate in the third quarter as inflation was kept in check and consumer spending surged, according to data released by the Commerce Department on Friday…. “The department said the PCE price index, a key measure of inflation, increased by 1.6 percent last quarter, much less than the 2.2 percent increase expected by economists polled by StreetAccount.” Unemployment recently fell to 3.7 percent, the lowest since 1969. Minority and disabled workers have made major job gains. The Trump administration has helped fuel economic growth by bringing an end to the wave of burdensome and unnecessary new red tape issued by the Obama administration. That red tape often confused businesses, and made them more reluctant to hire people due to increased costs. Since 2017, employers have been able to hire new employees and make new investments without worrying as much that the ground rules will change and make them regret their earlier decision. As Wayne Crews of the Competitive Enterprise Institute noted in 2017, Trump has pruned unnecessary regulations more vigorously than any president since Reagan. And over “1,500 Obama rules in the pipeline but not finalized were withdrawn or delayed.” Crews says this focus on “cutting red tape is exceptionally good news for consumers, businesses and the economy.” In recent years, “the U.S. federal regulatory burden has amounted to nearly $2 trillion annually. This amounts to a hidden tax of nearly $15,000 per household in a given year.” Pruning more regulations “would jumpstart the economy, finally resulting in the economic relief Americans have been waiting for: more jobs and higher wages. It would also help small business owners, driving more growth, investment, and productivity.”However, the strong economy may not last. Many Obama-era regulations were so burdensome or politically risky that the Obama administration issued them in 2016, but with compliance dates in 2017 or 2018. That created an economic time-bomb for the incoming Trump administration. Although the Trump administration tried to delay the compliance dates of these costly regulations, liberal judges have blocked some of the delays based on procedural technicalities, such as the failure to solicit comment from the public before doing so. (It can take two years to repeal or alter a regulation through a formal notice-and-comment rulemaking process). When Obama took over from Bush in 2001, liberal think-tanks such as the Center for American Progress claimed that a new administration’s delays of agency rules issued in the waning days of the previous administration didn’t require an agency to go through “notice and comment” before the delay could go into effect. But after Trump unexpectedly won the 2016 election, liberal think-tanks and interest groups changed their tune. With liberal backing, special-interest groups sued the Trump administration, and got liberal judges to block some of the Trump administration’s delays based on the very procedural requirements that liberals previously claimed didn’t apply. With Trump picking new judges to fill over 100 judicial vacancies, the federal judiciary may get more conservative. As a result, the administration may get a more sympathetic hearing in future challenges to the administration’s delay or repeal of economically-harmful Obama-era regulations. But that depends on the U.S. Senate voting to confirm more conservative judges. The Senate is almost evenly divided between Republicans and Democrats now, and the Democrats are voting together against Republican nominees — not just against conservatives, but even against well-respected moderate Republicans who served capably in the Bush administration. If the Democrats retake the Senate, they are expected to block any future appointments to the Supreme Court while Trump is in office. They are also expected to block virtually all appointments of judges to the federal appeals courts (and perhaps even to federal district courts), leaving many federal judgeships vacant. Initially, the Chief Justice would likely declare “judicial emergencies” in various regions of the country, but as the problem spreads, this would do little to help.

The stock market has fallen in the past month, perhaps reflecting political risks. As one commentator notes, socialism is gaining ground in the Democratic Party.

For example, self-proclaimed socialist Julia Salazar unseated a Democratic incumbent. She did so even though she received plenty of negative press coverage. According to a Gallup survey, 57 percent of Democrats have a positive view of socialism, while most don’t have a positive view of capitalism. Former President Obama recently endorsed self-proclaimed “Democratic Socialist” Alexandra Ocasio-Cortez for Congress. Even a liberal-leaning web site admits that her economic proposals would cost the country $42 trillion. That would bankrupt America.

Fitch says it no longer assumes Britain will get a smooth Brexit

FILE PHOTO: The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London,Britain, March 3, 2016. REUTERS/Reinhard Krause

LONDON (Reuters) – Ratings agency Fitch said on Friday it no longer assumed that Britain would leave the European Union in a smooth transition and said an acrimonious and disruptive “no deal” Brexit could lead to a further downgrade of its sovereign credit rating. “In Fitch’s view, an intensification of political divisions within the UK … has increased the likelihood of an acrimonious and disruptive ‘no deal’ Brexit. “Such an outcome would substantially disrupt customs, trade and economic activity, and has led Fitch to abandon its base case on which the ratings were previously predicated.” Previously Fitch had assumed Britain would leave the EU in March next year with a transition deal in place and the outline of a future trade deal with the bloc. But Prime Minister Theresa May has struggled to agree a deal that can secure the backing of Brussels and her own lawmakers in the Conservative Party. The ratings agency currently rates British government debt at AA with a negative outlook which means a further lowering of the rating is possible. Fitch cut its top-notch AAA rating on Britain in 2013, citing the outlook for weaker public finances. Ratings downgrades up to now have had little impact on investors’ appetite for British government debt, which is still seen as a safe asset at times of political or economic turmoil. But downgrades are embarrassing for May’s Conservative government, which emphasised preserving the country’s AAA rating when it embarked on an austerity programme in 2010.

US mail bombs: Cesar Sayoc charged after campaign against Trump critics

A 56-year-old man has been arrested in Florida in connection with a mail-bombing campaign aimed at critics of US President Donald Trump. US officials named the man as Cesar Sayoc. He faces five charges including mailing explosives and threatening ex-presidents. Mr Trump said the acts were “despicable and have no place in our country”. Fourteen items have been sent in recent days to figures including ex-President Barack Obama and actor Robert de Niro. Two were found in Florida and New York City on Friday morning. Later, two more were discovered in California. Billionaire and Democrat donor Tom Steyer said that a package sent to him had been intercepted at a mail facility in Burlingame, and another addressed to Democrat Senator Kamala Harris was reported in Sacramento. The incidents come less than two weeks before the US mid-term elections, with politics highly polarised. The president praised law enforcement for the quick arrest of the suspect, describing the search as looking for a “needle in a haystack”. “These terrorising acts are despicable and have no place in our country,” he said. The comments were in stark contrast to Mr Trump’s tweet earlier in the day, when he suggested the incidents, which he described as “‘Bomb’ stuff”, were slowing Republican “momentum” in early voting. But Mr Trump returned to the theme later, accusing US media of exploiting the latest case. “The media’s constant, unfair coverage, deep hostility and negative attacks… only serve to drive people apart and to undermine healthy debate,” he said at a rally in North Carolina. US media reports suggest Mr Sayoc is a registered Republican who attended some of Mr Trump’s rallies in 2016 and 2017. However, the president rejected any suggestion that his rhetoric had contributed to the attacks. “I heard he was a person that preferred me over others. There’s no blame, there’s no anything,” Mr Trump said. Former intelligence chief James Clapper, one of the recipients of Friday’s packages, told CNN: “This is definitely domestic terrorism, no question in my mind.” He said that anyone who had been a critic of President Trump needed to be on the alert and take extra precautions.

“I’m not suggesting a direct cause-and-effect relationship between anything he’s said or done and the distribution of these explosives. But I do think he bears some responsibility for the coarseness of civility of the dialogue in this country,” he added.

Cesar Sayoc was caught at a vehicle parts shop in the city of Plantation, Florida. FBI Director Christopher Wray revealed that he was detained after his fingerprint was allegedly found on one of the packages. Officials also said DNA and mobile phone data were used to track the suspect down. The Department of Justice said he faced up to 48 years in jail. “We will not tolerate such lawlessness, especially political violence,” US Attorney General Jeff Sessions said at a news conference. “Let this be a lesson to anyone, regardless of their political beliefs, that we will use the full force of the law against you.” Law enforcement agencies said Mr Sayoc lives in Aventura, Florida. In 2002, he was arrested for making a bomb threat in Miami-Dade County, and received one year of probation for the charge. Mr Sayoc has a criminal record dating back to 1991 in Broward

Malls fear Sears bankruptcy signs will scare off buyers

If you’re going out of business, try not to make too much of a fuss about it.

As Sears gears up to close some 142 stores after filing for Chapter 11 bankruptcy, some mall operators are worried that big banners and garish signs could spoil the holiday vibe at their shopping centers — and further tarnish the already-battered image of shopping malls. In a filing in US Bankruptcy Court on Monday, big mall owners including Macerich and Brixmor sought to clamp down on attention-getting tactics used by liquidators, including strobe lights, bullhorns and balloons. Likewise, the landlords are looking to ban phrases including “Total Liquidation Sale,” “Going out of Business,” “Everything Must Go” and “Bankruptcy Sale.” Consider the neighboring stores, the mall owners pleaded in their Monday filing. “Shopping center tenants bargain for a certain environment as part of their decision to lease space in centers,” the mall operators said in the filing, arguing that folks handing out fliers about liquidation sales aren’t part of that deal. Indeed, five landlords were so concerned about potential violations that they asked a bankruptcy judge to approve a list of do’s and don’ts before these sales get seriously underway in their malls — the biggest one among them South Coast Plaza in Irvine, Calif. Sears didn’t hire one of the more prominent liquidators like Gordon Brothers, Hilco or Tiger Capital, instead choosing lesser-known Abacus Advisors Group, said bankruptcy attorney David Pollack of Ballard Spahr, who represents Brixmor. “It’s more of a proactive measure, but we also haven’t been able to make contact with the liquidator to make an agreement with them,” Pollack said. In the meantime, the mall operators are not leaving anything to chance. They’ve asked the court to ban neon or “day-glo” signs, and to limit the number of signs Sears is permitted to display in its own stores to five. They’re also asking that any signs not be visible from the “doors or windows of the store.”Exterior signs are out of the question, the landlords contend, while any window signs have to be displayed 12 inches away from the window and cannot take up more than 50 percent of the space. “Landlords have a primary interest in maintaining an aesthetic appearance in the shopping centers for the benefit of all the tenants, especially during the holiday season,” the mall companies wrote. The concerns come amid reports that Sears’ biggest shareholder and former chief executive, Eddie Lampert, is trying to secure a $300 million loan to keep some of the better stores open and humming, sources confirmed to The Post. Lampert is in talks with Cyrus Capital Partners, which holds some of Sears’ existing debt. The bankruptcy loan is in addition to a $300 million loan from Sears’ lenders, including Bank of America, Citigroup and Wells Fargo, which have agreed to provide a temporary lifeline to the 125-year-old retailer.

Two Wells Fargo executives go on leave of absence amid sales scandal review

A Wells Fargo logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith

(Reuters) – Wells Fargo & Co said on Wednesday it put two executives on leave in connection with ongoing regulatory reviews into the bank’s retail sales practices. Chief Administration Officer Hope Hardison and Chief Auditor David Julian have begun leaves of absence and will no longer be members of the bank’s operating committee, the bank said. The bank declined to comment on the reason for the moves, which it announced in a press release. Hardison is a 24-year veteran of Wells Fargo and assumed the CAO role in 2015, according to the company website. Julian joined Wells through its merger with Wachovia Corp and has served as chief auditor since 2012, according to LinkedIn. Wells Fargo has been coping with the fallout of a sales practice scandal since late 2016, when it was revealed that millions of fake accounts may have been opened in customers’ names by bankers facing lofty sales targets.

Since then the bank has been hit with penalties including a $1 billion fine and a cap on assets put in place by the Federal Reserve.

Earlier this week, the bank settled for $65 million with the New York attorney general’s office which alleged that the bank misled investors about its sales practices. The fourth-largest U.S. lender is still facing inquiries into its customer sales abuses by the Department of Justice, the Securities and Exchange Commission and the Department of Labor, according to Wells Fargo’s most recent regulatory disclosure. The bank is also facing several class-action lawsuits from angry customers. “We remain steadfast in our focus on making things right for customers and building a better Wells Fargo,” Chief Executive Officer Tim Sloan said in a statement on Wednesday.

Trump admits ‘there’s no proof’ of his ‘unknown Middle Easterners’ caravan claim

President Donald Trump on Tuesday defended his unsubstantiated assertion that “unknown Middle Easterners” are traveling in a migrant caravan traveling north to the United States from Central America, but admitted “there’s no proof of anything.” “They could very well be,” Trump reiterated during a bill signing in the Oval Office, referring to Middle Eastern individuals embedded in the caravan. “I have very good information.” However, pressed for the proof of Middle Eastern individuals in the caravan by CNN’s Jim Acosta, Trump said “there’s no proof of anything.” “There’s no proof of anything but they could very well be,” Trump said. On Monday, Trump tweeted “criminals and unknown Middle Easterners are mixed” into the migrant caravan moving toward the United States. He called this a “national emergy” (sic). However, there have been no reports, in the press or publicly from intelligence agencies, to suggest there are “Middle Easterners” embedded in the caravan he’s referring to. Trump added Tuesday that “there’s a very good chance” of Middle Eastern individuals being in the caravan. “I also think that over a course of a period of time you (will) have (Middle Eastern individuals in the caravan), or they don’t necessarily have to be in that group. But certainly, you have a lot of people coming up through the southern border from the Middle East and other places that are not appropriate for our country,” he said. “They don’t necessarily have to be in that group,”

Trump also said Tuesday. “But certainly you have people coming up through the southern border, from the Middle East and other places that are not appropriate for our country. And I’m not letting them in.”

Vice President Mike Pence also said that the Honduran President Juan Hernandez told him over a phone call today that the migrant caravan was financed by Venezuela and organized by leftist groups. “At the President’s direction I spoke with President Hernandez of Honduras. He told me that the caravan that is now making its way through Mexico headed for the southern border was organized by leftist organizations and financed by Venezuela,” Pence said. “And the Democrats maybe?” Trump joked. Pence also declined to offer specific proof that Middle Eastern individuals are in the caravan, instead citing a statistic of how many suspected terrorists are prevented from coming into the country daily. “The United States of America intervenes and prevents 10 terrorists or 10 suspected terrorists from coming into our country every day. So, it is inconceivable that there would not be individuals from the Middle East as part of this growing caravan,” Pence said. Trump said he does not believe he is stoking fear for political gain by addressing the caravan. “No, not at all,” he said, “I’m a very non-political person. And that’s why I got elected President.”

Counterterrorism official contradicts Trump: No sign ISIS or ‘Sunni terrorist groups’ are in caravan

(CNN)For days, as migrants have traveled thousands of miles toward the US-Mexico border, President Donald Trump has warned of the dangerous people who make up their pack. He’s tweeted that “[c]riminals and unknown Middle Easterners” are “mixed” in with the caravan, and, on Monday afternoon, doubled down on his claims, telling reporters on the South Lawn of the White House to “go into the middle” of the caravan and “search. You’re gonna find MS-13. You’re gonna find Middle Eastern.” While the President insinuates terrorists have infiltrated the group that CNN crews have observed to include mostly mothers and their children, a senior counterterrorism official has also refuted the President’s claim. “While we acknowledge there are vulnerabilities at both our northern and southern border, we do not see any evidence that ISIS or other Sunni terrorist groups are trying to infiltrate the southern US border,” a senior counterterrorism official told CNN. Officials at the Department of Homeland Security have been less direct, but have disproved the President’s point nonetheless. When asked for evidence for the President’s claim that “[c]riminals and unknown Middle Easterners are mixed in” with caravan migrants, a DHS official responded with a hodgepodge of numbers: “In FY 18, CBP apprehended 17,256 criminals, 1,019 gang members, and 3,028 special interest aliens from countries such as Bangladesh, Pakistan, Nigeria, and Somalia. Additionally, CBP prevented 10 known or suspected terrorists from traveling to or entering the United States every day in fiscal year 2017.” None of that, however, proves that criminals or people from the Middle East are in the caravan crowd. And on top of that, the countries the DHS official mentioned are actually South Asian and African, not in the Middle East. There was also no mention of whether Customs and Border Protection made those apprehensions at the southwest border or elsewhere. It is also unclear how or where CBP prevented terrorists from traveling to the United States. CBP spokesperson Corry Schiermeyer said she would not comment on the President’s tweets, and referred additional questions to DHS, which oversees CBP. Former Homeland Security acting Undersecretary John Cohen told CNN that there has “clearly been an effort” by the administration to create a sense of fear as the caravan gets closer to the US.

“That fear, from a law enforcement perspective, is highly misplaced,” Cohen said. “It may be effective at energizing the base, but it creates a needless fear of the caravan.”
The President’s tweets and comments come just about two weeks ahead of the 2018 midterm elections, where he is emphasizing immigration as a key issue. Trump has, without evidence, accused Democrats of allowing immigrants to overrun the borders. The President has said, “Democrats want caravans. They like the caravans. A lot of people say, ‘I wonder who started that caravan …’ ” Trump has often returned to immigration as a talking point that will motivate his base voters to go to the polls in the midterms, and his policies on immigration have been cited as one of the key factors that led to his victory in 2016. Right-wing news outlets had speculated about a terror-connection in the caravan in the days leading up to Trump’s morning tweet. On Fox News Sunday morning, Tom Fitton, a conservative legal advocate, cited remarks by the president of Guatemala, who said earlier this month at a conference in Washington, DC, that his country had arrested nearly 100 people “highly linked to terrorist groups, specifically ISIS.”

Netflix’s New $2 Billion in Borrowing Raises Wall Street Eyebrows

The streamer’s long-term debt has soared north of $10 billion, though Moody’s says ratings and outlook remain stable.

Netflix’s insatiable appetite for content, both original and licensed, is causing the giant streamer to borrow another $2 billion, and Wall Street has mixed emotions on the matter. While Monday’s disclosure of additional debt didn’t immediately knock the stock down, several hours later shares had given back the day’s gains and ended by trading down 1 percent. Longtime skeptic Michael Pachter of Wedbush Securities says the additional debt did not come as a surprise, considering Netflix’s penchant for reporting negative cash flow. “It is precisely what we modeled,” says Pachter. “So long as they burn cash, they will have to raise capital to fund their content spending.” Netflix is a victim of its own success. Its original content streamed on demand has proved so popular it has attracted many copycats, so Netflix must spend wildly to keep up with relative upstarts like Amazon, CBS All Access, HBO Now and Hulu. It also must replenish what it is gradually losing from Warner Bros. and Disney, as each of them prepare to launch their own services next year that will directly compete with Netflix. This means that if Netflix users want to stream episodes of Friends or the movie Coco, for example, they eventually won’t have the option without signing up for yet-to-be named services from Warners and Disney, respectively. ”

They’re burning around $3 billion a year, so we should expect them to borrow around $3 billion a year for the foreseeable future,” Pachter says of Netflix.

With the additional $2 billion, Netflix’s long-term debt has soared north of $10 billion, though Moody’s says ratings and outlook remain stable.

Netflix’s spending on content is expected to be about $8 billion this year alone, though some speculate it could swell to $13 billion. The streamer boasts some 137 million subscribers, and it is depending on signing millions more globally to keep the rapid growth investors have grown accustomed to. “Despite the continuing issuances of debt to fund the company’s negative cash flows, we expect leverage to drop gradually over time as the transition from licensed content to produced original content levels off and newer international markets begin to contribute to profits and overall margins improve,” says Neil Begley, an analyst with Moody’s. “The interest rate charged will reflect their perceived ability to repay, and until creditors refuse to lend to them, I expect the cash-burn and borrowing cycle to continue,” adds Pachter. Netflix bulls agree that more spending is in the cards; they just aren’t overly concerned about it. The stock, after all, has nearly doubled in two years amid heavy borrowing and negative cash flow. “Netflix is willing to invest heavily to be the global leader in entertainment for the next several decades. If you want to go to the moon, you have to burn a lot of fuel,” says Ben Weiss, chief investment officer at 8th & Jackson Capital Management.

U.S. fund investors pull most cash since June from stocks: Lipper

(Reuters) – Investors slammed U.S.-based stock funds during the latest week, pulling $17.5 billion, the most cash from such investments since June, according to Lipper data on Thursday. The withdrawals came during a volatile week for markets as minutes from the most recent Federal Reserve policy meeting showed broad agreement on the need to raise borrowing costs further, cementing investor concerns that had helped cause a major sell-off the week before. [.N] Domestic stock mutual funds and exchange-traded funds (ETFs) posted $18.2 billion in withdrawals, only marginally offset by $648 million moving into equity funds focused abroad, according to data from the research service that covers the seven days through Oct. 17. Rising rates could draw money away from stocks and into bonds. It could also crimp the economic growth that has plumped corporate profits to record levels and enabled a near decade-long rally. “There were people ducking for cover,” said Tom Roseen, head of research services at Lipper. “This is fast money – people getting in and getting out.” Also during the week, Japanese stock funds based in the United States but invested primarily in Tokyo pulled in $1.2 billion, the most cash since 2013 and an endorsement of that market’s chances to rally. Despite a strong start to earnings season and the hope of rising rates increasing bank profits from lending activity, fast-money investors pulled $2.5 billion from financial sector funds, the most on record.

Italy’s Debt Crisis Thickens

Italy’s government bonds are sinking and their yields are spiking. There are plenty of reasons, including possible downgrades by Moody’s and/or Standard and Poor’s later this month. If it is a one-notch downgrade, Italy’s credit rating will be one notch above junk. If it is a two-notch down-grade, as some are fearing, Italy’s credit rating will be junk. That the Italian government remains stuck on its deficit-busting budget, which will almost certainly be rejected by the European Commission, is not helpful either. Today, the 10-year yield jumped nearly 20 basis points to 3.74%, the highest since February 2014. Note that the ECB’s policy rate is still negative -0.4%: But the current crisis has shown little sign of infecting other large Euro Zone economies. Greek banks may be sinking in unison, their shares down well over 50% since August despite being given a clean bill of health just months earlier by the ECB, but Greece is no longer systemically important and its banks have been zombies for years. Far more important are Germany, France and Spain — and their credit markets have resisted contagion. A good indicator of this is the spread between Spanish and Italian 10-year bonds, which climbed to 2.08 percentage points last week, its highest level since December 1997, before easing back to 1.88 percentage points this week.

Much to the dismay of Italy’s struggling banks, the Italian government has also unveiled plans to tighten tax rules on banks’ sales of bad loans in a bid to raise additional revenues. The proposed measures would further erode the banks’ already flimsy capital buffers and hurt their already scarce cash reserves. And ominous signs are piling up that a run on large bank deposits in Italy may have already begun.

It’s not just the banks that are panicking; so, too, are Italian insurers which could face having to shell out more in advance taxes on their premiums as a result of the new budget, assuming it is ever given the green light by Brussels. “We need to be very careful dealing with these issues … because we are one of the pillars of the national system,” the chairman of Italy’s biggest insurer, Generali, said on Tuesday. Global investors also have big reasons to worry. Italy’s government faces an eye-watering €270 billion worth of bond redemptions in 2019 alone. With interest on Italian government debt rising to its highest level in five years and its biggest margin buyer of the last three years, the ECB, exiting the market, it’s looking like a tall order. The Bank of Italy is afraid that a vicious cycle is forming over the country’s debt costs. If market tensions don’t ebb, it warns, interest spending could surge above government estimates in 2019-20. Interest expenditures had fallen to €65.5 billion in 2017 from a high of €83.6 billion in 2012, helped along by the ECB’s buying of sovereign bonds as part of its QE program. The new big fear is that this month, either or both, Moody’s and S&P, will downgrade Italian debt two notches into junk territory. The potential implications of such a move, not only for Italy but for the European project as a whole, are so huge that many market players are discounting it as a possibility altogether.

“A downgrade to junk could trigger a full-blown (euro zone) crisis,” said Nicola Mai, a portfolio manager at PIMCO, the world’s largest bond investor. “…

Which is why I don’t believe the agencies will do it, I don’t think they will want to be the ones causing a crisis in Europe.” Iain Stealey, a fixed income portfolio manager at JP Morgan Asset Management, concurs. “It would be a very, very big decision, just given the size of the Italian bond market; it makes up something like a fifth of government bonds in the euro zone,” he said. In other words, contagion would spread across the Euro Zone like wildfire.

Why investors are growing increasingly anxious about China

AFP/Getty Images

Weakness in China’s currency and a rout in its stock market in 2018 are raising warning bells among investors haunted by memories of the August 2015 devaluation scare and the ensuing volatility that spooked investors. Underscoring those fears, China’s officials reported that gross domestic product grew at a slower pace than anticipated for the third quarter. Data released late Thursday showed its economy expanding 6.5% year-over-year between July and September, compared with 6.6% expected and 6.7% in the prior period. The GDP report represented the weakest read since 2009 and was followed by a parade of statements from the People’s Bank of China, its securities regulator and banking and insurance regulator in support of the stock market and what was billed by that cohort as China’s positive economic fundamentals. Still, looking at the year so far, both China’s major stock market benchmarks and the yuan have suffered—and it market participants worry that Friday’s rebound belies grave concerns that further economic and stock-market pain lie ahead. A weak currency, which makes Chinese products more competitive on the global market—and offsets some of the impact of U.S. tariffs—could help China stave off some of the slowdown. But as the yuan still hovers near a psychologically important 7.00 mark, worries about how authorities will handle the situation are on the rise. “A steady depreciation of the yuan could help Beijing cushion the impacts of U.S. tariffs by boosting export competitiveness—ultimately supporting economic growth,” said Lukman Otunuga, research analyst at FXTM. “However, such a move is likely to fuel capital outflows, spark fears of a currency war and pressure [other] emerging markets.” “I think China is trying to walk a fine balance of easing monetary and fiscal policy to compensate for the negative effects of the trade war,” said Danske Bank chief China economist Allan von Mehren in emailed comments. Overdoing it on the easing side, he added, would “risk igniting capital outflows due to yuan devaluation and also delay the deleveraging process too much.” While the currency has sold off further versus the U.S. dollar than investors may have expected at the start of the year, but the move has been widely attributed to market forces. In light of a strengthening greenback DXY, -0.36% particularly in the second quarter of the year, emerging markets, including China, sold off. The yuan has dropped more than 6% versus the dollar so far this year, both in Beijing and in the more freely traded offshore currency. “Regardless, a scenario where the yuan sharply weakens toward 7.00 [yuan per dollar] is poised to fuel concerns over the health of the world’s second largest economy,” Otunuga said. He said that the Chinese yuan breaching the psychological level would weigh on global sentiment, with Asian emerging-market currencies sitting in the hot zone. Those are risk of the effect of China contagion include the South Korean won USDKRW, -0.57% Taiwanese dollar USDTWD, -0.3258% and Malaysian ringgit USDMYR, -0.1968% and the respective stock markets in those regions are also likely to be slammed. The fragility of China’s currency have been at least partly a byproduct of monetary tightening from the Federal Reserve and easing from the People’s Bank of China, market participants said. But the PBOC’s policy-easing measures and shore up its economy likely won’t bear fruit until the middle of next-year, Jones said.

U.S. eyes more Venezuelan sanctions, but oil on backburner: U.S. official

FILE PHOTO: Oil pumps are seen in Lake Maracaibo, in Lagunillas, Ciudad Ojeda, in the state of Zulia, Venezuela, March 20, 2015.REUTERS/Isaac Urrutia/File Photo – S1BETFVJVBAB/File Photo

WASHINGTON (Reuters) – The United States plans to turn up sanctions pressure on Venezuela but sees less need to immediately target its energy sector, given sagging production from the OPEC member’s state-run oil company, a senior U.S. administration official said on Wednesday. The U.S. government has imposed several rounds of sanctions on Venezuelan military and political figures close to socialist President Nicolas Maduro, who it blames for trampling on human rights and triggering the country’s economic collapse. Earlier this year, the Trump administration had weighed escalating sanctions by targeting a Venezuelan military-run oil services company or restricting insurance coverage for oil shipments. The actions would have built upon last year’s ban for U.S. banks from any new debt deals with Venezuelan authorities or state-run oil giant PDVSA [PDVSA.UL]. Asked by reporters whether the U.S. government had slowed down on its push for sectoral sanctions, the senior official described them as some of the many “tools” it is keeping in reserve. “With regards to Venezuela, all options are on the table,” said the official, who spoke on condition of anonymity. Venezuela’s crude oil production hit a 28-year low in 2017, a slump blamed on poor management and corruption. “At the end of the day, Nicolas Maduro has taken care of really running PDVSA to the ground, and essentially more and more making it a non-factor,” he said. Almost 2 million Venezuelans have fled since 2015, driven out by food and medicine shortages, hyperinflation, and violent crime. The exodus has overwhelmed neighboring countries. Maduro, who denies limiting political freedoms, has said he is the victim of an “economic war” led by U.S.-backed adversaries. The Trump administration also plans to ramp up economic pressure on Cuba’s military and intelligence services, the official said. In his speech last month to the United Nations, President Donald Trump linked Venezuela’s crises to “its Cuban sponsors.” “That is a message that we will continue to put out, but frankly its a message that the region needs to talk about,” the official said, noting John Bolton, Trump’s national security adviser, is expected to elaborate on the issue publicly soon. “The issue of Cuban involvement in Venezuela is a fact. It’s not a theory, it’s not a story,” the official said.

Fed plans to keep hiking interest rates despite Trump blowback

Despite fierce blowback from President Trump, the Federal Reserve’s policymakers unanimously agree they should keep hiking interest rates to cap inflation That’s according to the minutes of the latest Fed meeting, in which every policymaker backed a move to raise interest rates in September. The display of solidarity raises the prospect of a fourth rate-hike this year in December. The release of the minutes comes amid growing tensions between the White House and the Fed, which is an independent agency. Last week, Trump called the Fed “loco” and “too aggressive” for its commitment to cooling the economy, and blamed the central bank for the more than 1,000-point drop in the Dow Jones industrial average last week. Trump, who has openly criticized the Fed since July, doubled down on Tuesday, declaring the Fed his “biggest threat” in an interview on Fox Business. But Trump’s complaints don’t seem to have fazed the honchos at the world’s most important central bank. Members of the Federal Open Market Committee, which determines the Fed’s monetary policy, didn’t bother to discuss comments made by Trump warning against further increases in the central bank’s benchmark interest rate, according to minutes of the Sept. 25-27 meeting released Wednesday. Instead, some members of the committee believed that the Fed would need to impose “modestly restrictive” conditions on the economy, the minutes show. The Dow Jones industrial average on Wednesday fell 91.74 points, to 25,706.68. The minutes did suggest, however, that the committee remains split on how much further to raise rates next year, with a few participants expecting rates would need to rise enough to modestly restrain economic growth, even as two others “indicated that they would not favor adopting a restrictive policy stance in the absence of clear signs of an overheating economy and rising inflation.”

Exxon Mobil bets big on China LNG, sidesteps trade war

FILE PHOTO: The ExxonMobil Hides Gas Conditioning Plant process area is seen in Papua New Guinea in this handout photo dated March 1, 2018. ExxonMobil/Handout via REUTERS/File Photo

HOUSTON/SINGAPORE (Reuters) – In the middle of a Sino-U.S. trade war, the world’s largest publicly traded oil and gas company is turning toward Beijing for business at a time when most of Corporate America is looking elsewhere to avoid the threat of tariffs. Exxon Mobil Corp is placing big bets on China’s soaring liquefied natural gas (LNG) demand, coupling multi-billion dollar production projects around the world with its first mainland storage and distribution outlet. Its gas strategy is moving on two tracks: expanding output of the super-cooled gas in places such as Papua New Guinea and Mozambique, and creating demand for those supplies in China by opening Exxon’s first import and storage hub, according to an Exxon manager and people briefed on the company’s plans. That combination “will guarantee us a steady outlet for lots of our LNG for decades,” said the Exxon manager who was not authorized to discuss the project and spoke on condition of anonymity. One of the company’s top policy goals this year, the manager said, is building its Chinese client roster. “China’s natural gas demand is rising really fast, with imports soaring well over 10 percent annually at the moment because of the government gasification program and due to fast rising industrial demand, including in petrochemicals,” the Exxon manager said. Exxon said last month it would participate in the construction of an LNG import terminal in Huizhou, Guangdong region and provide supplies to it. This makes it only the second foreign major with such a stake in an LNG terminal. Exxon is among the top ranked U.S. companies that are pushing ahead in China despite the trade dispute, but it is not alone. U.S. and European car makers are opening or expanding China plants to avoid hefty tariffs and transport costs. Tesla Inc this month acquired a Shanghai site for a car and battery-manufacturing complex. The decision to expand its LNG production and open an import terminal in the world’s fastest growing LNG market is a step by Exxon Chief Executive Darren Woods to pull the company out of an earnings rut.

China September coal output hits nine-month high as new capacity starts up

FILE PHOTO: A loader is seen amid coal piles at a port in Lianyungang, Jiangsu province, China January 25, 2018. REUTERS/Stringer

BEIJING (Reuters) – China’s coal output hit its highest in nine months in September, government data showed on Friday, boosted as new mining capacity started up in the country’s northwest. China has been given the go-ahead for a number of big coal mines as it tries to ease concerns about fuel shortages amid a crackdown on small outdated mines and tightened emission controls. Miners churned out 306.01 million tonnes of coal last month, up 3.2 percent from 296.6 million tonnes in August and up 5.2 percent from the same time last year, according to the data from the National Bureau of Statistics (NBS). Output over the first nine months of 2018 in the world’s top producer of the commodity reached 2.59 billion tonnes, up 5.1 percent from a year earlier. “The increase in coal output is not surprising as new mining capacity in the northwest was released on schedule,” said Cheng Gong, senior coal analyst at Zheshang Securities. Coal output from the region of Inner Mongolia last month jumped 11.3 percent from the same month in 2017, while Shaanxi province saw growth of 9.9 percent, according to NBS. By the end of June, China had a total of 3.49 billion tonnes of coal mining capacity, while another 976 million tonnes of capacity is still under construction, according to data from the National Energy Administration. “We expect to see more capacity being released in the coming months, which will further boost coal output in China,” said Cheng. Meanwhile, northern China will soon turn on coal- or gas-powered heating as temperatures drop sharply in the run-up to winter. The official heating season starts on Nov. 15. Benchmark thermal coal prices on the Zhengzhou Commodity Exchange CZCcv1 have risen around 6 percent from early September.

Trade off: China soybean imports set for biggest drop in 12 years amid tariff conflict

(Reuters) – China’s soybean imports are set to drop by a quarter in the last three months of 2018, their biggest fall in at least 12 years as buyers curb purchases amid the Sino-U.S. trade war and high domestic stockpiles.
FILE PHOTO: Soybean seeds are seen in a container at a farm in Gideon, Missouri, U.S., May 16, 2018. REUTERS/Shannon Stapleton/File Photo/File Photo

Soybeans, crushed to make protein-rich animal feed ingredients and vegetable oils, have been at the heart of the tit-for-tat trade dispute between the world’s top two economies. China in July imposed a retaliatory 25-percent import duty on U.S. soybeans as part of the conflict, a saga that has gathered steam since then with the introduction of fresh tariffs on other products. Soybean imports by China, which buys 60 percent of the oilseed traded worldwide, will likely decline to around 18-20 million tonnes in the fourth quarter, compared with 24.1 million tonnes in the same period last year, traders said. “Imports will average around 6 million tonnes per month in the fourth quarter,” said a Singapore-based trader at an international company that owns oilseed processing plants in China. “Purchases are going to be mainly from Brazil and some from Argentina and Canada. Buyers are not willing to take chances by bringing in U.S. beans,” the trader added, declining to be identified as he was not authorized to speak with media. The benchmark Chicago soybean contract dropped to a 10-year low of $8.12-1/4 last month, although prices have since recovered on fears of crop-damage following rains ahead of the harvest in parts of the U.S. Midwest. It was trading down 0.8 percent at $8.78-1/2 on Thursday. The landed cost of U.S. beans in China is currently similar to Brazilian soybeans even with the 25-percent tariff, but Chinese crushers are reluctant to take U.S. supply as they fear authorities may not approve cargoes and that tariffs could climb further. “Right now China’s import duty on U.S. wheat is 25 percent, who knows, the duty might go up to 50 percent by the time your boat arrives,” said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.China’s soybean purchases of around 24 million tonnes in the fourth quarter of last year were more than triple 2006 levels, climbing for 10 out of 12 years, according to the country’s customs data. The estimated decline of 4 to 6 million tonnes in October-December this year would be the biggest fall since at least 2006. China, which largely uses soy in feed for the world’s biggest pig herd, is unlikely to face a shortfall in supplies despite the drop in imports as it has abundant domestic reserves after a strong pace of imports. “We will be fine until the end of February. For March, April, it’s a bit tight, but if demand is not so good, then we can probably even survive until then,” said a Beijing-based soybean trader who forecast imports in the fourth quarter at 20 million tonnes. Soybean stocks at China’s ports stood at 8.57 million tonnes this week, down marginally from a record of around 9 million tonnes at the end of last week. Crush margins in Shandong, the hub of China’s soybean processing industry, have been in positive territory since early August, reaping strong profits for companies making feed ingredients such as soymeal. Processors are making 305 yuan ($44.04) a ton, not far from last month’s two-year high of 315 yuan. “Soymeal demand from the feed millers has been pretty strong as they build stocks,” said the first Singapore-based source.

Rosenstein Defends Mueller Probe as ‘Appropriate,’ ‘Independent’

deputy attorney general rod rosenstein speaks at a podium
Deputy Attorney General Rod Rosenstein (Mark Wilson/Getty Images)

As Khashoggi crisis grows, Saudi king asserts authority, checks son’s power

© Bandar AL-JALOUD / Saudi Royal Palace / AFP | Saudi King Salman bin Abdulaziz (C) attending the inauguration on September 25, 2018 of a new high-speed railway linking Mecca and Medina. Text by NEWS WIRES
So grave is the fallout from the disappearance of Saudi journalist Jamal Khashoggi that King Salman has felt compelled to intervene, five sources with links to the Saudi royal family said.

Last Thursday, Oct. 11, the king dispatched his most trusted aide, Prince Khaled al-Faisal, governor of Mecca, to Istanbul to try to defuse the crisis. World leaders were demanding an explanation and concern was growing in parts of the royal court that the king’s son Crown Prince Mohammed bin Salman, to whom he has delegated vast powers, was struggling to contain the fallout, the sources said. During Prince Khaled’s visit, Turkey and Saudi Arabia agreed to form a joint working group to investigate Khashoggi’s disappearance. The king subsequently ordered the Saudi public prosecutor to open an inquiry based on its findings. “The selection of Khaled, a senior royal with high status, is telling as he is the king’s personal adviser, his right hand man and has had very strong ties and a friendship with (Turkish President) Erdogan,” said a Saudi source with links to government circles.Since the meeting between Prince Khaled and Erdogan, King Salman has been  “asserting himself” in managing the affair, according to a different source, a Saudi businessman who lives abroad but is close to royal circles. Khashoggi, a U.S. resident and leading critic of Prince Mohammed, vanished after entering the Saudi consulate in Istanbul on Oct. 2. Turkish officials say they believe the Saudi journalist was murdered there and his body removed, allegations which Saudi Arabia has strongly denied. Initially the king, who has handed the day-to-day running of Saudi Arabia to his son, commonly known as MbS, was unaware of the extent of the crisis, according to two of the sources with knowledge of the Saudi royal court. That was partly because MbS aides had been directing the king to glowing news about the country on Saudi TV channels, the sources said.

That changed as the crisis grew.

“Even if MbS wanted to keep this away from the king he couldn’t because the story about Khashoggi’s disappearance was on all the Arab and Saudi TV channels watched by the king,” one of the five sources said. “The king started asking aides and MbS about it. MbS had to tell him and asked him to intervene when Khashoggi’s case became a global crisis,” this source said. Since he acceded to the throne in January 2015, the king has given MbS, his favourite son, increasing authority to run Saudi Arabia. But the king’s latest intervention reflects growing disquiet among some members of the royal court about MbS’s fitness to govern, the five sources said. Khashoggi’s disappearance has further tarnished the crown prince’s reputation, deepening questions among Western allies and some Saudis about his leadership. “Even if he is his favourite son, the king needs to have a comprehensive view for his survival and the survival of the royal family,” said a fourth Saudi source with links to the royal court. “In the end it will snowball on all of them.” Saudi officials did not immediately respond to Reuters requests for comment.

Existing-home sales slump to a near 3-year low as buyers back out

What will it take for the housing market to find equilibrium?

Getty Images Prospective buyers look at a room in a home for sale during an open house. According to the National Association of Realtors, TK

Existing-home sales ran at a seasonally adjusted annual rate of 5.15 million in September, the National Association of Realtors said Friday. That was a 3.4% decline for the month, and the lowest pace of sales since November 2015. Sales of previously-owned homes stabilized in August after declining for four straight months, so September’s lurch lower was not welcome. Sales were 4.1% lower than year-ago levels. September’s selling pace missed the MarketWatch consensus forecast of a 5.27 million rate. The median sales price in September was $258,100, which was 4.2% higher than a year earlier. Home prices are still growing faster than wages, but the pace of price increases is decelerating steadily. That’s likely because inventory is ticking up gradually. At the current pace of sales, it would take 4.4 months to exhaust available supply, up from 4.3 months last month. And it’s taking properties longer to get snatched up: homes stayed on the market for 32 days in September, up from 29 days in August.  The Realtors blamed another stagnant month in the housing market on rising mortgage rates, higher prices, and the supply stranglehold. But it’s also likely that many would-be buyers are dropping out of a market that’s become too competitive, expensive, and unsatisfying, especially as conditions in the rental market ease up. The national median rent declined compared to a year ago in September, Zillow ZG, -1.24%   said Thursday. That was the first yearly decline since 2012, and reflects a glut of supply, with more to come.  NAR Chief Economist Lawrence Yun now forecasts that existing-home sales will be 1.6% lower in 2018 than last year. Economists at mortgage financier Fannie Mae are even more bearish: they’re projecting a 2% decline.

Kelly, Bolton Get in Profane Shouting Match Outside the Oval Office

John Kelly, left, talks with John Bolton in the Oval Office on Oct. 10. Photographer:  Pablo Martinez Monsivais/AP

President Donald Trump’s chief of staff and his national security adviser engaged in a profanity-laced argument outside the Oval Office on Thursday, according to three people familiar with the episode. The chief of staff, John Kelly, and the national security adviser, John Bolton, fought over immigration and border crossings, including the performance of the Homeland Security Department under Secretary Kirstjen Nielsen, one person familiar with the matter said. She was at the White House for meetings on Thursday but not present for the argument, the person said. Bolton criticized DHS, and Kelly defended Nielsen, a former deputy whom he supported to replace him at the department. Trump sided with Bolton, the person said, which may once again stir speculation that Kelly will soon depart the White House. Trump has lately expressed fury about a large group of migrants who are traveling from Honduras toward the U.S. border. He vowed Thursday to deploy the military and shut down the Mexican border unless the migrants are turned back. The clash is an indication that tension is flaring in the White House 19 days before midterm elections in which Republican control of Congress is at stake. The shouting match was so intense that other White House aides worried one of the two men might immediately resign. Neither of the men is resigning, the people said. Trump is aware of the argument, the people said, even though the president told reporters he didn’t know about it before boarding Air Force One to travel to Montana for a campaign rally. He has recently sought to make immigration a more prominent political issue, blaming Democrats for increased numbers of migrants crossing the border.

Top Iran expert says Tehran may seek to wait out Trump administration

top Iran expert Karim Sadjadpour.

Even as debilitating U.S. sanctions targeting Iran’s oil industry remain slated to snap back in November, Tehran may seek to maintain a status-quo arrangement with the West until the fate of the Trump presidency becomes clearer, according to top Iran expert Karim Sadjadpour. “It seems that the Iranian strategy is essentially to wait out the Trump administration,” Sadjadpour, a senior fellow at the Carnegie Endowment for International Peace, said. “To wait what happens with the midterm elections, wait until 2020, to see if President Trump is reelected.” In an interview with Intelligence Matters host and CBS senior national security contributor Michael Morell, Sadjadpour outlined a range of possible outcomes from the U.S.-Iran standoff as the Trump administration ups economic and diplomatic pressure on the regime. “Outcome number one is essentially status quo,” Sadjadpour said. “The U.S. has pulled out of the deal, but Iran remains part of the nuclear deal as do other parties to the deal: Europe, Russia and China.” In a status-quo scenario, Sadjadpour said, Iran is likely to maintain that the United States, under Trump, and in reneging on its international commitments, is behaving like a rogue regime – all while Iran makes good on its agreements.  “Which, if you’re the United States,” he told Morell, “isn’t a bad outcome because Iran is continuing to keep its foot on the nuclear brakes.” Last month, the European Union’s high representative for foreign affairs, Federica Mogherini, announced the establishment of a new payment system to allow EU member states, Russia and China to maintain economic ties with Iran while avoiding the effects of U.S. sanctions. A number of European businesses, however, have nonetheless suspended its relationships with Iran – whose currency, the rial, has lost 70 percent of its value in the past year. “Iran is a country which has enormous potential. It’s got enormous human capital. And obviously it has enormous resources in oil and gas,” Sadjadpour said. “But it’s tremendously– it’s consistently punched below its weight as an economy.” In a second scenario – which might appeal to President Trump, Sadjadpour continued – the Iranians would, by virtue of deteriorating economic conditions and heightened risk of social unrest, be effectively forced to engage diplomatically and renegotiate the nuclear deal “along the lines of what happened with Kim Jong Un.” “Iran’s supreme leader is much more stubborn,” Sadjadpour observed, but “has a much shorter timeframe than Kim Jong Un.” President Trump has signaled a willingness to meet and negotiate with Iranian president Hassan Rouhani, who has largely rebuffed offers of dialogue with the U.S. “Trump’s offer of direct talks with Iran is not honest or genuine,” Rouhani wrote in an op-ed last month.    “I think President Rouhani would like to see a different relationship between America and Iran,” Sadjadpour told Morell, “but as long as Khamenei is supreme leader, that acrimony is going to remain.” Khamenei, Sadjadpour said, has for years sought to downplay the impact of sanctions while assigning blame to domestic mismanagement. “The modus operandi of Iran’s supreme leader is he wields power with accountability,” Sadjadpour explained, “and in order to do that, he needs a president who has accountability without power.”   The supreme leader also maintains a carefully calibrated symbiotic relationship with Iran’s powerful Revolutionary Guard Corps, Sadjadpour told Morell, in part by routinely exchanging economic benefits for steadfast political and military support. “[The IRGC have] made a lot of money over the years,” Sadjadpour said. “They’re not only Iran’s increasingly the most powerful political institution, but also Iran’s most powerful economic institution.”

Continue reading “Top Iran expert says Tehran may seek to wait out Trump administration”

U.S. housing starts, building permits fall in September

Construction workers build a single family home in San Diego, California, U.S. February 15, 2017.

WASHINGTON (Reuters) – U.S. homebuilding dropped more than expected in September as construction activity in the South fell by the most in nearly three years, likely held down by Hurricane Florence. Other details of the report published by the Commerce Department on Wednesday were also soft. Building permits declined to their lowest level in almost 1-1/2 years. The housing market, which has been a weak spot in a robust economy, has been hobbled by an acute shortage of properties for sale. Residential investment contracted in the first half of the year and the latest data supports economists’ expectations that housing remained a drag on economic growth in the third quarter. Housing starts fell 5.3 percent to a seasonally adjusted annual rate of 1.201 million units last month. Data for August was revised down to show starts rising to a rate of 1.268 million units instead of the previously reported pace of 1.282 million units. July’s sales pace was also revised lower. Starts in the South, which accounts for the bulk of homebuilding, tumbled 13.7 percent last month. That was the biggest decline since October 2015. Hurricane Florence slammed North and South Carolina in mid-September and flooding from the storm probably depressed homebuilding last month. Building permits fell 0.6 percent to a rate of 1.241 million units in September. That was the second straight monthly decline and left permits at their lowest level since May 2017. Economists polled by Reuters had forecast housing starts declining to a pace of 1.220 million units last month. Starts surged 29 percent in the Northeast and rose 6.6 percent in the West. They fell 14.0 percent in the Midwest.U.S.  Economists blame the sluggish housing market on rising mortgage rates, which have combined with higher house prices to make home purchasing unaffordable for some first-time buyers. The 30-year fixed mortgage rate jumped 19 basis points to 4.90 percent last week, the highest level since mid-April 2011, according to data from mortgage finance agency Freddie Mac. The mortgage rate has risen about 91 basis points this year. While mortgage rates are still low by historical standards, the rise has outpaced annual wage growth, which has been stuck below 3 percent. House prices have increased 6.0 percent on an annual basis and are being driven by the dearth of properties. Single-family homebuilding, which accounts for the largest share of the housing market, decreased 0.9 percent to a rate of 871,000 units in September. Single-family homebuilding has lost momentum since hitting a pace of 948,000 units last November, which was the strongest in more than 10 years. Permits to build single-family homes rose 2.9 percent in September to a pace of 851,00 units. They, however, remain below the level of single-family starts, suggesting limited scope for a strong rebound in homebuilding. Starts for the volatile multi-family housing segment plunged 15.2 percent to a rate of 330,000 units in September. Permits for the construction of multi-family homes declined 7.6 percent to a pace of 390,000 units. With starts and building permits declining last month, housing supply will likely remain tight. That was also reinforced by a 4.1 percent drop in homebuilding completions in September to a rate of 1.161 million units, the lowest level since November 2017. Realtors estimate that housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month to plug the inventory gap. The stock of housing under construction increased 0.3 percent to more than an 11-year high of 1.129 million units last month. However, multi-family homes accounted for much of the increase.

Oil prices slump after large increase in U.S. stocks

NEW YORK (Reuters) – Oil prices fell on Wednesday, with U.S. futures slipping below $70 a barrel for the first time in a month, after U.S. stockpiles rose by 6.5 million barrels, almost triple what analysts had forecast, while exports dropped.  Oil had been rising on worries about Iranian sanctions and tensions between the United States and Saudi Arabia after the death of Saudi journalist Jamal Khashoggi. “This market is dangerously close to $70. If it goes down through $70, I think some of that speculative position may have interest in getting out, and that could accentuate the downside,” said Bob Yawger, director of futures at Mizuho in New York. Crude stocks rose 6.5 million barrels for the week through Oct. 12, and exports were down to 1.8 million bpd, the U.S. Energy Information Administration said, in a report analysts characterized as bearish. Oil futures were already sinking in anticipation of larger crude inventories and in tandem with recent declines in equity markets worldwide. The scandal over the disappearance of prominent Saudi critic and journalist Jamal Khashoggi, who disappeared two weeks ago after entering the Saudi consulate in Istanbul, had underpinned oil markets earlier in the week. U.S. lawmakers pointed the finger at the Saudi leadership and Western pressure mounted on Riyadh to provide answers, but President Donald Trump’s comments suggested that White House may not take additional action against the Saudis, particularly after Saudi Arabia has said it will conduct an investigation. Investors worry Saudi Arabia could use oil supply to retaliate against critics. Jim Ritterbusch, president of Ritterbusch and Associates, said Saudi Arabia could cut as much as 500,000 barrels per day of crude production “as a warning shot” to discourage U.S. sanctions. A claim by the United States that it aims to reduce Iran’s oil exports to zero is a “political bluff”, the head of the state-run National Iranian Oil Company was quoted as saying on Wednesday. New U.S. sanctions on Iranian oil exports start on Nov. 4, while Iran has accused Saudi Arabia and Russia of breaking an OPEC-led agreement on output cuts by producing more crude.

Trump: ‘That Would be Bad’ If ‘Great Ally’ Saudis Tied to Khashoggi’s Alleged Murder

president donald trump speaks during an interview with the associated press in the oval office.
(AP Photo/Evan Vucci)

With concerns that Saudi Arabia may have ordered the gruesome murder of a dissident journalist who went missing two weeks ago, President Donald Trump admitted in a new interview that Saudi Arabia has “been a great ally.” Trump sat down with Fox Business Network Tuesday and discussed myriad topics, including the disappearance of Saudi writer and U.S. resident Jamal Khashoggi. “Turkey and Saudi Arabia are looking at it very strongly. It depends whether or not the king or the crown prince knew about it, in my opinion,” Trump said. “No. 1, what happened, but whether or not they knew about it. If they knew about it, that would be bad. If they didn’t know about it, bad things can happen.” Trump then explained how Saudi Arabia has been a strong partner in the pushback against Iran. “You look at what they’re doing in Iran. Don’t forget, Saudi Arabia is our partner, they’re our ally against Iran, against missiles, and against what they’re doing, trying to take over the Middle East,” he said. “They’ve been a great ally to me.” After referencing a U.S.-Saudi Arabia arms deal that’s worth $110 billion, Trump did concede that it would not at all be appropriate if Khashoggi was killed on orders from the Saudi government. “With all of that being said, you can’t do what we’ve been reading about. We’re gonna learn a lot about it,” he said.

Trump tells AP he won’t accept blame if GOP loses House

Donald Trump
President Donald Trump listens to a question during an interview with The Associated Press in the Oval Office of the White House

WASHINGTON (AP) — Facing the prospect of bruising electoral defeat in congressional elections, President Donald Trump said Tuesday that he won’t accept the blame if his party loses control of the House in November, arguing his campaigning and endorsements have helped Republican candidates. In a wide-ranging interview three weeks before Election Day, Trump told The Associated Press he senses voter enthusiasm rivaling 2016 and he expressed cautious optimism that his most loyal supporters will vote even when he is not on the ballot. He dismissed suggestions that he might take responsibility, as his predecessor did, for midterm losses or view the outcome as a referendum on his presidency. “No, I think I’m helping people,” Trump said. “I don’t believe anybody’s ever had this kind of an impact.”  Trump spoke on a range of subjects, defending Saudi Arabia from growing condemnation over the case of a missing journalist, accusing his longtime attorney Michael Cohen of lying under oath and flashing defiance when asked about the insult — “Horseface” — he hurled at Stormy Daniels, the porn actress who accuses him of lying about an affair. Asked if it was appropriate to insult a woman’s appearance, Trump responded, “You can take it any way you want.” In an interview with the Associated Press, President Donald Trump criticized the rush to condemn Saudi Arabia for the mystery surrounding missing journalist. He also said he is not responsible if the GOP loses seats after the midterm elections (Oct 16)


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21 countries with ‘golden passport’ schemes

OECD says schemes selling either residency or citizenship threaten efforts to combat tax evasion
View of  Monaco
Monaco is one of the countries flagged as operating high-risk schemes which sell either residency or citizenship in the OECD’s report. Photograph: Alamy Stock Photo

A blacklist of 21 countries whose so-called “golden passport” schemes threaten international efforts to combat tax evasion has been published by the west’s leading economic thinktank.Three European countries – Malta, Monaco and Cyprus – are among those nations flagged as operating high-risk schemes that sell either residency or citizenship in a report released on Tuesday by the Organisation for Economic Cooperation and DevelopmentIn exchange for donations to a sovereign trust fund, or investments in property or government bonds, foreign nationals can become citizens of countries in which they have never lived. Other schemes, such as that operated by the UK, offer residency in exchange for sizable investments.

The programme operated by Malta is particularly popular because as a European member state its nationals, including those who buy citizenship, can live and work anywhere in the EU.

The country has, since 2014, sold citizenship to more than 700 people, most of them from Russia, the former Soviet bloc, China and the Middle East. But concern is growing among political leaders, law enforcement and intelligence agencies that the schemes are open to abuse by criminals and sanctions-busting business people.

Transparency International and Global Witness, in a joint report published last week, described how the EU had gained nearly 100,000 new residents and 6,000 new citizens in the past decade through poorly managed arrangements that were “shrouded in secrecy”. Also on the OECD blacklist are a handful of Caribbean nations that pioneered the modern-day methods for the marketing of citizenship. These include Antigua and Barbuda, the Bahamas, Dominica, Grenada, St Lucia, and St Kitts and Nevis, which has sold 16,000 passports since relaunching its programme in 2006.Second passports can be misused by those wishing to “hide assets held abroad”

The OECD believes the ease with which the wealthiest individuals can obtain another nationality is undermining information sharing. If a UK national declares themselves as Cypriot, for example, information about their offshore bank accounts could be shared with Cyprus instead of Britain’s HM Revenue and Customs. The final names on the list are Bahrain, Colombia, Malaysia, Mauritius, Montserrat, Panama, Qatar, Seychelles, Turks and Caicos Islands, United Arab Emirates and Vanuatu.

Nearly half of Europe’s biggest stocks are in bear market

LONDON (Reuters) – Nearly half of Europe’s largest stocks are now in what analysts call a bear market or downturn, data analysed by Reuters showed on Monday, as fears mount that the post-financial crisis rally might be on its last legs outside the United States.  The pan-European STOXX 600, currently at a 22-month low, is itself down almost 12 percent since its January peak, and 290 of its 600 components have lost at least 20 percent in value from their highest levels in the last 52 weeks.Two sectors stand out particularly in the retreat: the automotive industry and banks, which have lost roughly 28 percent and 25 percent respectively. While Wall Street’s buoyant indexes managed to bounce back last Friday after the biggest scare since a market correction in February, shares in Asia and in Europe are currently failing to recover. The divergence between bullish U.S. stock markets and the rest of global stock markets has been a red flag for investors since the beginning of the year. European equities have struggled as political turmoil and the region’s vulnerability to trade risks starkly contrasted with the allure of tax cuts, stock buybacks and a booming economy in the United States. A poll of about 30 brokers, fund managers and analysts at the end of August showed that the STOXX 600 index was expected to rise by only 2.8 percent to 400 points by year-end, but this forecast looks increasingly optimistic. “I was one of the most pessimistic but I think I was right,” said Stephane Barbier de la Serre, a strategist at Makor Capital Markets who participated in the poll and expects the index to end the year at 350 points.Hit by a toxic mix of rising U.S. Treasury yields, a strong dollar, slowing domestic growth, an escalating Sino-U.S. trade war and rising oil prices, equities from emerging markets are already deep into bear market territory, down more than 25 percent, and have lost more than $1.1 trillion in value. Analysts from Bank of America Merrill Lynch said on Friday that 1,557 global stocks out of 2,767 – or 56 percent of the MSCI ACWI – are in a bear market.

U.S. retail sales are soft for the second month in a row

Retail sales rise 0.1% in September, below Wall Street forecast
Stephen Chernin/Getty Images After a busy spring, sales at U.S. retailers appeared to soften toward the end of summer.

The numbers: Sales at U.S. retailers barely grew in September as Americans spent less at restaurants, grocery stores and gas stations, raising questions about whether the economy slowed toward the end of summer. Retail sales rose just 0.1% for the second month in a row. Wall Street had expected a 0.6% increase, according to Econoday.

Sales would have fallen if not for a big month at auto dealers. Sales may have been hindered in part by Hurricane Florence, but the U.S. Census Bureau said it could not calculate the impact. The storm battered parts of the Atlanta seaboard, most notably the Carolinas. After a string of strong sales, bars and restaurants saw a big dropoff. Sales sank 1.8% in September to mark the biggest decline since the end of 2016. Sales fell sharply at gas stations and department stores. Department stores have been losing ground for years to internet retailers such as Amazon AMZN, -1.68%  . Sears SHLD, -23.91%   is the latest victim of the switch from traditional brick-and-mortar shopping to online sales. The giant and long established department store is entering bankruptcy proceedings.Sales at internet retailers climbed 1.1% in September. Auto dealers posted a 0.8% increase.  The U.S. appeared to enter the fall with strong momentum, but the second straight weak retail sales report suggests the economy might have cooled off a bit in the third quarter. The prospect of the Federal Reserve raising interest rates and last week’s big decline in the U.S. stock market could add to the anxieties.

Sears files for Chapter 11 bankruptcy in attempt to keep stores open for now

Lampert steps down as CEO and is exploring potential bid for some Sears stores
Getty Images Sears is expected to close at least 150 stores immediately.

Sears Holdings Corp. filed for bankruptcy protection from creditors, marking the collapse of a company that dominated American retailing for much of the 20th century. The retailer SHLD, -23.83%  , which sought chapter 11 protection in U.S. Bankruptcy Court in White Plains, N.Y., reached a deal with its lenders that will allow the 125-year-old company to keep hundreds of its stores open for now. The company said its controlling shareholder, Edward Lampert, has stepped down as CEO, but will remain chairman. The hedge-fund manager, who took control when he merged Kmart with Sears in 2005, ran the company as it racked up losses and closed hundreds of stores in recent years. Sears said it would close 142 money-losing stores near the end of the year, with liquidation sales expected to begin shortly. The closings are in addition to 46 stores that are expected to close by next month. Currently, the company operates roughly 700 Sears and Kmart stores. It employs about 70,000 people. The bankruptcy filing came before Sears was required to repay $134 million in loans later on Monday. Sears has lined up $1.875 billion in bankruptcy financing to pay off its existing loans and fund its stores pending the chapter 11 case, or about $300 million more than what the company had before the filing. Lampert’s hedge fund, ESL Investments Inc., is in talks to provide another $300 million junior bankruptcy loan that would provide additional cash for the retailer’s business. ESL is also exploring a stalking-horse bid to buy “a large portion” of the company’s stores in the bankruptcy process.

Trump Speaks to Saudi King, Sends Pompeo for Follow-Up

Trump Speaks to Saudi King, Sends Pompeo for Follow-Up
Saudi Arabia’s King Salman (Getty Images)
President Donald Trump says he’s spoken to King Salman of Saudi Arabia, who “denies any knowledge of whatever may have happened” to missing Washington Post journalist Jamal Khashoggi. In a tweet issued shortly before 9 a.m. ET Monday, Trump also said he was dispatching Secretary of State Mike Pompeo to meet with the king :

“Just spoke to the King of Saudi Arabia who denies any knowledge of whatever may have happened ‘to our Saudi Arabian citizen.’ He said that they are working closely with Turkey to find answer. I am immediately sending our Secretary of State to meet with King!’

Khashoggi, a Saudi national and U.S. resident who has been a vocal press critic of Saudi Prince Mohammed bin Salman, has not been seen since entering the Saudi consulate in Istanbul on Oct. 2. He is feared dead. His disappearance has sparked a worldwide outcry. Turkish authorities claim they have video and audio recordings indicating Khashoggi was first interrogated in the consulate, then tortured and murdered. The Washington Post reported evidence has been shared with U.S. authorities. The alleged hit squad was sent from Saudi Arabia and organized the killing. A bone saw was used to dismember Khashoggi’s body and it was placed in handheld cases and transported back to Saudi Arabia. Pompeo is expected to go to Riyadh and later visit Turkey.

Biden: Trump is ‘trashing American values’

© Getty Former Vice President Joe Biden on Friday slammed President Trump in one of his most stinging rebukes of the president, saying at a campaign rally that Trump was “trashing American values.”

“He is just trashing American values the way he talks about people, the way he makes fun of people, the way he denigrates folks,” Biden said at a rally in Owingsville, Ky., according to The New York Times. “I got to tell you, I think there is a method to his madness because he wants you to get down in the mosh pit with him.” Biden’s remarks came as he stumped for Democratic House candidate Amy McGrath. McGrath faces a tough challenge from GOP Rep. Andy Barr, who has represented Kentucky’s 6th District since 2013. McGrath, a former fighter pilot, is running in a district President Trump won by more than 15 points. Still, nonpartisan political handicapper The Cook Political Report has rated the race a “toss-up.” Trump is scheduled to campaign for Barr on Saturday. “We can’t possibly in my view win the presidency unless we can begin to reclaim those white working-class voters that used to vote for us,” Biden told the Times after the rally, adding that he thought Trump’s appeal to such voters was limited. “His value set is much too narrow and self-serving, and I think it’s deliberately designed to appeal to the legitimate frustrations of a lot of working-class people by finding a scapegoat, the ‘other,’ ” Biden added. “Your lost your job, your identity is being threatened because of that immigrant. It’s an old, old method.” “I look out there and I just don’t know how much more grievance can be appealed to by this guy to keep a majority,” he said. Biden, who has been seen as a potential front-runner for the Democratic nomination in 2020, said Wednesday that he is not a candidate for his party’s presidential nomination “at this point.” “I think there are many people in the Democratic Party who can defeat Trump,” he said. “And not a single aspiring candidate that I can think of for the nomination — and I am not one at this point — does not have a better understanding and formulation of American foreign policy than President Trump, in my view.” Biden and Trump have sparred frequently in recent years. The former senator said in March that he would have “beat the hell out of” Trump in high school over his degrading comments about women, later saying that he regretted making the comment. Trump, last week, said at a campaign-style rally in Kansas that if he fought Biden “it would not last long.” “Remember he challenged me to a fight. ‘I’d like to take him behind the barn.’ I’d love that. That wouldn’t last long. That would not last long. That wouldn’t last long,” the president said, imitating Biden.

Italy must ‘calm down’ and stop questioning the euro: Draghi

FILE PHOTO: European Central Bank (ECB) President Mario Draghi testifies before the European Parliament’s Economic and Monetary Affairs Committee in Brussels, Belgium September 24, 2018

NUSA DUA, Indonesia (Reuters) – Italian officials must stop questioning the euro and need to “calm down” in their budget debate as they have already caused damage to firms and households, European Central Bank President Mario Draghi said on Saturday. A senior member of Italy’s ruling coalition shot back that it was Draghi who should calm down, rather than draw attention to occasional comments on the euro which were personal opinions and had no implications for government policy. Italy’s government is in a war of words with European officials over its plans to triple the deficit next year, backtracking on a previous pledge to narrow the budget gap in one of the bloc’s most indebted countries. “A budgetary expansion in a high debt country becomes much more complicated … if people start to put in question the euro,” Draghi told a news conference at the International Monetary Fund’s annual meeting in Indonesia. “These statements … have created real damage and there’s plenty of evidence that spreads have increased in connection with these statements,” Draghi said. “The results of which is that household and firms pay higher interest rates on loans.” Italian bond yields rose sharply this month after a senior official from one of the ruling parties said Italy would be better off with its own currency, though he later reiterated the government’s frequent reassurances that quitting the euro is not in its program and it has no plans to do so. “The very first thing (to do) is to calm down with the tone. And then the second thing is we have to wait for the facts,” Draghi said, stressing the need to examine the actual spending plans, which may differ from the government’s communications. Alberto Bagnai, a senator from the right-wing League who heads the Senate finance committee, said Draghi himself risked agitating markets by drawing attention to rare personal opinions on the single currency that were not government policy. “Draghi should calm down and stop mentioning the euro. Nobody does it around here,” he tweeted. Draghi also batted back accusations from some corners in the Italian government that the ECB’s plan to phase out asset purchases by the end of the year had caused the increase in spreads. Draghi, a former governor of Italy’s central bank, said markets had not reacted in June to the ECB’s decision to end its asset buys but had moved specifically on local Italian issues. He pointed to the narrowing of the yield difference between Italy and Greece as evidence that the problem is localized. Since the ECB is buying Italian but not Greek bonds, a bigger rise in Italian yields would suggest that investors are not acting on overall ECB policy change but a local issue.

Trump says won’t limit Saudi arms sales over missing journalist

U.S. President Donald Trump said on Thursday that he saw no reason to cut off arms sales to Saudi Arabia because of the disappearance of Saudi journalist Jamal Khashoggi, possibly setting up a clash with the U.S. Congress.

© Saul Loeb / AFP | US President Donald Trump in the Oval Office of the White House in Washington, DC.

Trump also said the United States may be closer to finding out what happened to Khashoggi, a prominent critic of Saudi policies who was last seen entering the Saudi consulate in Istanbul on Oct. 2. Turkish sources have said they believe Khashoggi was killed inside the building and his body removed, allegations that Riyadh dismisses as baseless. In a sign Turkey and Saudi Arabia might be looking for a way forward, Turkey accepted a Saudi proposal to form a joint working group to investigate the case, Turkey’s state-run Anadolu news agency quoted presidential spokesman Ibrahim Kalin as saying. The Washington Post, citing unidentified U.S. and Turkish officials, reported that Turkey had told U.S. officials it has audio and video recordings that prove Khashoggi was killed inside the consulate. It was not clear that U.S. officials had seen the footage or heard the audio, the Post reported, but Turkish officials have described the recordings to them. Turkish investigators were prepared to enter the consulate, a Turkish security official told Reuters, but were awaiting final authorization from the Saudis. Speaking to reporters, Trump said he saw no reason to block Saudi purchases of U.S. arms or its investments in the United States despite the journalist’s case, saying the Gulf nation would just move its money into Russia and China. “They’re spending $110 billion on military equipment and on things that create jobs … for this country. I don’t like the concept of stopping an investment of $110 billion into the United States, because you know what they’re going to do? They’re going to take that money and spend it in Russia or China or someplace else,” he said.

Trump rules out halting arms sales to Saudi Arabia

His comments prompted pushback from members of the U.S. Senate, including from some of his fellow Republicans, many of whom signed a letter on Wednesday forcing his administration to investigate Khashoggi’s disappearance and paving the way to possible sanctions on Saudi officials. “If it’s found that they murdered a journalist, that will hugely change our relationship,” Senator Bob Corker, chairman of the Senate Foreign Relations Committee, told reporters. “There will have to be significant sanctions placed at the highest levels.” The Khashoggi incident might make it very hard for the Trump administration to win congressional approval for arms sales to the Saudis. Many lawmakers, including some Republicans, have already questioned U.S. support for Saudi’s involvement in Yemen’s civil war, which has prompted a humanitarian crisis. Under U.S. law, major foreign sales of military equipment can be blocked by Congress. There is also an informal process in which key lawmakers can put “holds” on arm sales. Trump, who sealed a $110 billion deal for U.S. companies to sell arms to Saudi Arabia on his first foreign trip as president in May 2017, said they were looking into the disappearance.

Russia dossier author criticizes Trump, slams ‘strange and troubling times’

Washington (CNN)The retired British spy who wrote an explosive dossier about President Donald Trump’s alleged ties to Russia broke his silence to criticize Trump and the “distorted” state of US politics. The former spy, Christopher Steele, wrote to Vanity Fair shortly after he was named to the magazine’s “2018 New Establishment List.” CNN reviewed a copy of Steele’s email, which included his most political comments since his dossier gained international attention in January 2017. “In these strange and troubling times, it is hard to speak unpalatable truths to power, but I believe we all still have a duty to do so,” Steele said. “I salute those on your list, and otherwise, who have had the courage to speak out over the last year, often at great personal cost.”

Steele went on to say, “(A)t a time when governance is so distorted and one-sided, as I believe it currently is in the United States, the media has a key role to play in holding it accountable.”

The ex-spy also lamented that due to “the present legal and political situation,” he could not attend a Vanity Fair summit in Los Angeles featuring many of the newsmakers on the list. Despite global intrigue with his story, Steele has avoided public events out of fear for his safety. “I sincerely hope and trust that these circumstances will change soon,” Steele added. The Vanity Fair list features business leaders, media moguls and other rising stars. Special counsel Robert Mueller was ranked at the top, despite the fact that he might be the least flashy person on the list, which includes social media maven Kylie Jenner and filmmaker J.J. Abrams. An official from Steele’s private intelligence firm in London confirmed to CNN that Steele sent the email to Vanity Fair. Representatives from Vanity Fair did not immediately respond to emails seeking comment on Wednesday. The winding saga of Steele and his dossier dates to the 2016 presidential campaign, when a law firm working for Democratic presidential nominee Hillary Clinton hired an opposition research company named Fusion GPS to dig up dirt about Trump. Fusion GPS then hired Steele, who tapped his sources in Russia to gather information about Trump’s ties to the country.
Steele passed along his memos to the FBI before the election, and details from his research later circulated among US intelligence agencies and senior members of Congress. It wasn’t until after Trump’s victory that the public saw the 35-page dossier, which alleged widespread collusion between his campaign and the Russian government. Trump and his associates who were named in the dossier deny any collusion. In the past, US intelligence agencies saw Steele as a valuable and trusted source of information. Mueller is currently investigating Russian election interference and possible collusion between Trump associates and Russians. Since he became a key player in the Russia investigation, Steele has remained quiet, speaking publicly only once to thank his supporters. He was deposed in a lawsuit stemming from the publication of the dossier and was privately interviewed by Mueller’s team in the summer of 2017. His critics have been much more vocal. Trump called Steele a “failed spy” and said the allegations were “phony.” Top Republicans on Capitol Hill have seized on Steele’s ties to the Clinton campaign and the FBI to allege a far-reaching conspiracy to stop Trump’s election. Two Republican senators asked the Justice Department to investigate whether Steele criminally lied to the FBI. Nick Bit: Despite the incredible i believe the Steele Dossier is true. This should be a warning to Americans and the great danger their empire and Democracy is in. This is exactly how a free people become poor and end up slaves. I never met a rich slave! In fact i never met a rich man who was a slave.

May vows she will NEVER sign up to a Brexit deal that traps the UK in the customs union ‘permanently’

 Ministers threaten to QUIT in protest at concessions to the EU
heresa May (pictured in Downing Street this week) is facing probably the biggest test of her premiership, with just six days to go until a crucial EU summit
May (pictured in Downing Street this week) is facing probably the biggest test of her premiership, with just six days to go until a crucial EU summit

Theresa May vowed she will never sign up to a Brexit deal that ‘permanently’ traps the UK in the EU customs union. The PM made the promise as ministers threaten to quit over the latest concessions to Brussels. Mrs May is under fire from all sides as she races against time to thrash out a divorce deal with the EU that does not tear her government to pieces. But her latest plan to break the deadlock has caused fury amid claims it could see the UK commit to staying in the customs union beyond 2020 with no hard departure date. In an effort to soothe tensions, Downing Street insisted today: ‘The Prime Minister would never agree to a deal which would trap the UK in a backstop permanently.’  Meanwhile, the DUP is warning it will oust Mrs May if she bows to demands from Brussels for Northern Ireland to stay within the single market.

  The walls are closing on the premier with just days to go until a crunch EU summit that could decide the country’s future.

Mrs May gathered her Brexit ‘War Cabinet’ last night to try and swing them behind her ideas for unlocking the negotiations. Her new ‘backstop’ plan to avoid a hard Irish border would see the UK effectively remain in a customs union with the EU after Brexit until a permanent solution to the Irish border problem can be found. A previous commitment that the UK will have cut ties by the end of 2021 ‘at the latest’ is set to be dropped after fierce resistance from Brussels. Sources insist that backstop would still be ‘temporary’ and is likely to last ‘months, not years’.


The meeting last night – are believed to be considering whether they can go along with the compromise Work and Pensions Secretary Esther McVey (pictured) is also believed to have serious doubts about Mrs May’s approach But Liam Fox, Sajid Javid, Gavin Williamson, Jeremy Hunt, Michael Gove and Dominic Raab all voiced concern about the concession. Commons Leader Andrea Leadsom, Work and Pensions Secretary Esther McVey, and Aid Secretary Penny Mordaunt – who were not invited to the meeting last night – are believed to be considering whether they can go along with the compromise. No formal proposal was put to the ministers, but they were asked to agree the ‘direction of travel’ as negotiators seek agreement with the EU. One Cabinet source predicted the issue could lead to resignations in the coming days, saying: ‘This is going to be a big test for some ministers. Are they willing to accept assurances that this is temporary if those words have no legal force? If not, then they surely have to resign.’ It would see the whole of the UK stay in the customs union ‘temporarily’ until a wider trade deal is struck. Northern Ireland would effectively remain in the single market to avoid regulatory checks on the border with the Republic. The government’s previous plan said that it wanted the UK to stay in the customs union until 2021 ‘at the latest’. But it is not clear whether the UK would be subject to rules that stop countries striking their own trade deals outside the bloc. The backstop is designed to fall away when a wider trade pact is agreed – which Mrs May says should be based on her Chequers plan for a ‘combined customs territory’ with the EU.

International Trade Secretary Dr Fox, whose plans for trade deals outside the EU would be severely limited inside a customs union, has told friends the proposal would ‘make life very difficult for me’. However, Government Chief Whip Julian Smith last night urged Tory MPs and ministers to rally round, saying: ‘The Prime Minister and the Government are conducting a complex negotiation that is going well and we should be backing the Prime Minister.’ Proposals for a so-called ‘temporary customs arrangement’ were first announced in June as part of ‘backstop’ plans to resolve the Irish border problem. At the time, the then Brexit secretary David Davis threatened to resign unless a clear end date was inserted, forcing Mrs May to accept the plan would be ‘time limited’. But Brussels has been implacable in its opposition to an end date, saying the ‘backstop’ plan must be ‘all-weather’. Tory Brexiteer Jacob Rees-Mogg said: ‘Income tax was supposed to be temporary. Gladstone said it would expire in 1860. ‘Likewise, the 1911 Parliament Act says it is temporary. Both are still here.’ Chancellor Philip Hammond today signalled that the EU and UK were getting closer to agreement – and held out the prospect of a ‘deal dividend’ for the economy if a settlement is reached. ‘What has happened over the last week, 10 days, is there has been a measurable change in pace,’ he told the BBC. ‘There is a real sense now of engagement from both sides, of shared enterprise in trying to solve a problem rather than posturing towards each other. A really important step change. ‘But that shouldn’t conceal the fact that we have some big differences left to resolve. Process is a lot more positive this week, substance still very challenging. ‘If we are able to get to a good deal for Britain as we leave the European Union I believe there will be a dividend, a deal dividend for us.’ As pressure mounted on Mrs May last night, a DUP MP called for her to be replaced with a new Tory leader. The party has become increasingly alarmed that Mrs May will accept Northern Ireland staying in the single market while mainland Britain leaves – something they say would split the UK.

Oil Supply and Demand Reach Record 100 Million Barrels a Day

The world’s supply and demand of crude have reached record levels, accord to the International Energy Agency (IEA)

The figures have hit 100 million barrels a day.A new IEA report points out: Both global oil demand and supply are now close to new, historically significant peaks at 100 mb/d, and neither show signs of ceasing to grow any time soon. Fifteen years ago, forecasts of peak supply were all the rage, with production from non-OPEC countries supposed to have started declining by now. In fact, production has surged, led by the US shale revolution, and supported by big increases in Brazil, Canada and elsewhere. In future, a lot of potential supply could come to the market from places like Iran, Iraq, Libya, Nigeria and Venezuela, if their various challenges can be overcome. There is no peak in sight for demand either. “Peak supply” was based on the notion that the world would begin to run out of oil reserves, which eventually would weigh on prices. Among the reasons the theory is not true is future production. Nigeria and Venezuela have had problems with political tensions, and economic disasters. However, Venezuela has the world’s largest proven oil reserves, and Nigeria is in 10th place by the same measure. Sanctions against Iran could hamper its exports, for now. It has the fourth largest proven oil reserves in the world. As demand increases, so does the strain on oil production and refinery capacity. This, in turn, probably will increase prices. IEA experts point out: It is an extraordinary achievement for the global oil industry to meet the needs of a 100 mb/d market, but today, in 4Q18, we have reached new twin peaks for demand and supply by straining parts of the system to the limit. Recent production increases come at the expense of spare capacity, which is already down to only 2% of global demand, with further reductions likely to come. This strain could be with us for some time and it will likely be accompanied by higher prices, however much we regret them and their potential negative impact on the global economy.

America’s obesity is threatening national security, according to this study

It’s well known at this point that just under 30 percent of Americans ages 17 to 24 ― the prime age to join the Army ― aren’t eligible to join. But beyond that, almost a third of those who sit down with a recruiter to take the first steps are immediately disqualified. Why? Because of their weight. “Out of all the reasons that we have future soldiers disqualify, the largest – 31 percent ― is obesity,” Maj. Gen. Frank Muth, head of Army Recruiting Command, said Wednesday at AUSA’s annual meeting in Washington, D.C. A freshly published study, “Unhealthy and Unprepared” concludes that America’s rising numbers of overweight youth are going to have real impacts on the military’s ability to maintain effectiveness. “We’ve got to make sure that message gets out, because our concern is what happens when that percentage that qualify … potentially goes down?” Muth said. “Or if the obesity, if that starts to go up.”The study was undertaken by researchers with Mission: Readiness, an organization of more than 700 retired senior military leaders. One solution, they found, was institutionalized fitness and nutrition programs in schools, to ensure that kids grow up with healthy habits. Researchers found that of the 29 percent of young Americans who have a high school diploma, no criminal record and no chronic medical issues, just 17 percent would be qualified and available for active duty, and 13 percent would qualify, be available, and achieve a satisfactory score on the Armed Forces Qualification Test. “These numbers are particularly concerning because as the recruitable population has declined, so has interest in serving in the military,” the study found.

Service members at the dining facility Fort McCoy, Wis. Experts say healthy eating choices have to start young if the Army is going to be able to find enough recruits who meet weight requirements. (Scott T. Sturkol/Army)
Service members at the dining facility Fort McCoy, Wis.

Experts say healthy eating choices have to start young if the Army is going to be able to find enough recruits who meet weight requirements. (Scott T. Sturkol/Army) In 2016, 13 percent of 16- to 24-year-olds were interested in joining the military, and that number dropped 2 percent in 2017. And for recruits who are overweight but not so much so that they can’t enlist altogether, there are risks after they have joined and are getting in shape during training. The obesity issue is particularly stark in the South, from which the Army draws a large number of its recruits. The Citadel, a military college in South Carolina, found that recruits in 10 Southern states had lower levels of physical fitness and were 22 percent to 28 percent more likely to be injured during basic training than their peers from other areas of the country, according to Mission: Readiness. Further, a 2016 study published in the American Journal of Preventive Medicine found that “active duty soldiers with obesity were 33 percent more likely to suffer musculoskeletal injury, contributing to the more than 3.6 million injuries that occurred among active duty service members between 2008 and 2017.”

Musculoskeletal injuries and stress fractures have also been the leading cause of medical evacuations during deployments to Iraq and Afghanistan, above and beyond other injuries. As of 2015, 7.8 percent of active duty service members were considered overweight by their height and weight, up 73 percent from 2011, according to the report. “[The Defense Department] spends $1.5 billion a year on obesity-related health care for active duty service members and veterans and their family members,” or missing 650,000 days of work for active duty troops, said retired Lt. Gen. Thomas Spoehr. The Army expects to see positive results from implementing the Occupational Physical Assessment Test to evaluate potential recruits before they join up, then following up with the Army Combat Fitness Test through their careers, as part of a holistic program that provides dietitians, physical therapists and other support staff at the unit level. One retired three-star put the issue in harsher terms. “You know, lieutenant, fat people don’t make good soldiers,” said retired Lt. Gen. Sam Ebbessen, recalling the words of an advanced individual training instructor master sergeant he worked for at Fort Dix, New Jersey. “They’re a weak link in the chain, and they get themselves and others killed.”

Sears prepares to file for bankruptcy in coming days: sources

(Reuters) – Sears Holdings Corp (SHLD.O) is preparing to file for Chapter 11 bankruptcy protection in the coming days following years of declining sales, sources said on Wednesday, casting doubt over the survival of what was once the world’s largest retailer. The bankruptcy filing would end a standoff between Chief Executive Officer Eddie Lampert, the retailer’s biggest shareholder and lender, and a special board committee the company has formed to consider a rescue plan proposed by Lampert that would involve asset sales and a debt restructuring. The committee has been resisting the plan amid concerns that creditors and shareholders would sue over it being too favorable for Lampert. His history of financial engineering at Sears for more than a decade through deals tied to his hedge fund ESL Investments Inc could now be subjected to new scrutiny by Sears’ creditors in bankruptcy court, according to the sources.. A $134-million debt payment that Sears has to meet on Monday has added pressure on both Lampert and the special committee to find a resolution. Lampert had told the special committee he would not help the company fund that obligation unless it agreed to his plan, the sources said. “For whatever reason, Sears’ board said enough is enough,” said Chad Brand, president of Peridot Capital Management, which holds Sears bonds. Brand added that he had significantly cut down on his Sears bond holdings earlier this year amid concerns from his clients. At its peak in the 1960s, Sears sold everything from toys and auto parts to mail-order homes, and was a key tenant in almost every big mall across the United States. But it has struggled to reinvent itself in the face of online competition from companies such as Inc (AMZN.O), as well as from other brick-and-mortar retailers, including Walmart Inc(WMT.N). It is not clear whether Sears would survive a bankruptcy process. When Toys ‘R’ Us, the largest specialty toy retailer, filed for bankruptcy protection last September, it sought to emerge from it after restructuring its debt and shutting stores. Instead, it was forced to liquidate last March, after creditors balked at providing a new lifeline to the company. If Sears were to file for bankruptcy, its financial performance during the upcoming holiday season could prove crucial in determining its future, according to the sources. Toys ‘R’ Us’ creditors lost faith in the retailer after revenue during last year’s holiday season failed to meet their expectations.

Postal Service seeks record price hikes to bolster falling revenues

A letter carrier prepares mail for delivery at the United States Postal Service Joseph Curseen Jr. and Thomas Morris Jr. processing and distribution center in Washington, D.C., U.S., on Tuesday, Dec. 12, 2017.
letter carrier prepares mail for delivery at the United States Postal Service Joseph Curseen Jr. and Thomas Morris Jr. processing and distribution center in Washington, D.C.,
Facing pressure from the Trump administration to address a revenue shortfall, the Postal Service on Wednesday proposed raising the price of 1-oz. letters from 50 cents to 55 cents, which would be a record nominal increase if approved. The price of each additional ounce would go down slightly.
The request was made by the USPS’ board of governors, which has been operating on an emergency basis because of a lack of confirmed members. It will have to be approved by the Postal Regulatory Commission.”The Governors believe these new rates will keep the Postal Service competitive while providing the agency with needed revenue,” the USPS said in a press release. “The Postal Service has some of the lowest letter mail postage rates in the industrialized world and also continues to offer a great value in shipping.”
 Rates for mailing services — which includes catalogs and magazines as well as letters — are pegged to consumer prices. Those have been rising faster this year, but still limited the price hike for that category to 2.5 percent. Prices for packages, however, can float with market rates. The USPS wants to boost Priority Mail prices by an average of 5.9%. A small flat-rate box that costs $7.20 to ship, for example, would next year cost $7.90. The steep price increases come at a time when the USPS’ losses have been mounting, dragged down in part by a requirement that the quasi-public agency pre-fund the cost of retiree health benefits. As letters and advertising mailers have been replaced by e-mail and online ads, the USPS has been making less and less money. Revenue from first class mail declined from $28.4 billion in fiscal year 2015 to $25.6 billion in 2017.
Package revenues fueled by the rise in e-commerce have been a bright spot, bringing in $19.5 billion in 2017, up from $15 billion in 2015. But it hasn’t made much of a dent in the $58.7 billion net deficit that the Post Office has accumulated over the years. The White House has proposed privatizing the Post Office, a plan that postal unions protested in nationwide demonstrations on Monday. President Donald Trump has repeatedly criticized the terms of USPS’ contract to deliver Amazon packages, the details of which are confidential. The Postal Service says it makes a profit through the arrangement. “Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer?” Trump tweeted last December. “Should be charging MUCH MORE!” In April, Trump ordered a review of the Postal Service’s business model by a task force led by the Treasury Department. Postal Service spokesman Carl Walton says the review has been completed, but that the agency hasn’t seen it yet. “I think they’re waiting until after the elections,” Walton said. “We’re waiting just like everybody else.”

Leaked Google research shows company grappling with censorship and free speech

A rare look at how the employees of the world’s most powerful search engine are trying to balance two opposing forces
Illustration by Alex Castro / The Verge


A leaked research presentation put together by employees of Google shows the extent to which the search giant is grappling with decisions around freedom of speech and censorship. The presentation, leaked to Breitbart News this week and published in full by the organization, is titled “The Good Censor,” and it’s a mix of findings and insights based on interviews and contributions from a number of journalists, academics, and cultural critics. The aim, according to the first slide of the presentation, is to “reassure the world that [Google] protects users from harmful conduct while still supporting free speech.” The slides are a rare and stark look at Google’s ongoing struggles, which are mirrored by many Silicon Valley tech platforms, including Facebook and Twitter, that now moderate a large swath of human conversation. Essentially, the company is asking itself whether it’s possible to protect against the negative aspects of free speech — violent threats, fake news, bots, trolling, propaganda, and election interference, to name just a few — while promoting a platform that gives everyone a voice. Google says in the presentation that the internet was founded on “utopian principles of free speech,” and that Silicon Valley was largely built under the guiding principles of those ideals.

Google’s presentation acknowledges that “censorship can give governments — and companies — the tools to limit the freedom of individuals.” But it also lays out all the reason why tech platforms like Google search and YouTube are responsible for policing what happens on their apps and websites. The slides give a history of how parts of the internet have become dominated by bad actors, and how both tech companies and governments have failed to address the issues. With regard to censorship, Google notes in the slides how government takedown requests have tripled in the last two years, and how YouTube is now the target of a majority of these requests, with Google Search behind it. The presentation concludes that tech companies “are performing a balancing act between two incompatible positions,” and that’s the reason why censorship is on the rise as companies like Google, Facebook, and Twitter take more heavy-handed approaches to moderation in response to heightened criticism. The slides conclude that transparency, consistency, and responsiveness are paramount in addressing this ongoing imbalance, and that there is not a “right amount of censorship” that will please everyone and solve these issues. While the presentation is certainly a candid look at how a company as powerful as Google is analyzing these issues and attempting to solve them, hanging over the entire conversation is the prospective launch of a Google search product and news site in China, codenamed Dragonfly. The company still has barely acknowledged its work on the project, but investigative reporting on its existence has led to massive internal strife, high-profile resignations, and serious inquiry from Congress. The slides make no mention of China, its historical approach to online censorship and social authoritarianism, or any plans to operate there. In response to the leak, Google has said the research is not indicative of any official company position, but rather research to better understand how users think about these key issues. In a statement, the company told The Verge, “Google is committed to free expression — supporting the free flow of ideas is core to our mission. Where we have developed our own content policies, we enforce them in a politically neutral way. Giving preference to content of one political ideology over another would fundamentally conflict with our goal of providing services that work for everyone.”

The manufacturers fighting Trump’s tariffs

Image caption Rick Huether’s family has run Independent Can Co since 1948

Rick Huether’s family has run a manufacturing company in Maryland since the 1940s. So he knows a bit about keeping blue-collar jobs in America. But now he, like many other manufacturers in the US, is worried. In March, President Donald Trump announced steep tariffs on foreign steel and aluminium, citing the need to protect those industries. But the move has left hundreds of other firms, including Mr Huether’s Independent Can Co, exposed. His firm, which employs more than 400 people and takes over $100m (£77m) in annual sales, relies on tin-plated steel from Europe and Canada to make specialty products such as biscuit tins and coffee cans. The tariffs are expected to add about $1.5m in surprise expense this year. And Mr Huether says they have already cost him one long-time customer, who turned to China amid the uncertainty. “We need a strong steel industry – no question about it,” he says. “But I don’t think they’ve thought through the ramifications.” To assuage business concerns, the Commerce Department said it would allow firms to apply for exemptions from the tariffs. The department rules on the request after a comment period, during which metal producers can object. Instead of calming debate, however, the procedure has triggered new turmoil, after companies overwhelmed the department with requests. About 800 businesses, including Independent Can, submitted more than 34,000 petitions, citing issues such as as quality flaws, delivery delays and lack of production in the US. As of 10 September, officials had decided on more than 4,300 of the requests, approving about 55%. But the majority of the applications are still pending, leaving Independent Can and many others in limbo. “It’s very frustrating. If we could buy domestic, we would buy everything domestic,” says Mr Huether, who submitted more than 30 requests and estimates he has spent about $100,000 trying to navigate the process. “We only went overseas because quality issues domestically forced us.” The decision lag has led to fierce lobbying and complaints from Republicans and Democrats alike about a lack of transparency and bureaucratic micromanagement. Nor has it escaped notice that many of the denials appear to be prompted by objections from steelmakers – an industry with close ties to the administration. For example, Commerce Secretary Wilbur Ross used to own steel companies, while the head of steelmaker Nucor advised Mr Trump during the 2016 presidential election. The Commerce Department has twice revised its process, bringing on more staff and expanding the opportunities for manufacturers to respond to the objections, but their frustration remains high. “There’s no criteria,” says Chad Bown, senior fellow at the Peterson Institute for International Economics. “So of course it opens up a huge can of worms and concerns that for anybody who gets [a waiver], it’s favouritism or corruption or just not transparent.” US Steel, one of the firms that opposed Mr Huether’s requests, declined to comment on how the administration is handling the process. But a company spokeswoman said its expansion plans – it has already restarted one blast furnace and is preparing to restart another – showed it had the ability to meet US demand. Peter Morici, an emeritus professor at the University of Maryland business school, says politicians are dramatising the problems ahead of US congressional elections in November. As US steel and aluminium makers boost capacity, the kinds of issues cited by manufacturers should subside, he adds. “In the near term, there’s an adjustment problem,” Mr Morici says. “In the longer term, there’s no steel that we can’t make here.” But many firms can’t afford to wait, especially as the surging demand for US-made metals has led to higher prices, says Christine McDaniel, a senior research fellow at the Mercatus Center, a pro-free market think tank housed at George Mason University, who has analysed the requests. “Eventually this does come out of the bottom line of firms, of shareholders or of consumers. You can’t escape it,” she says. “And small and medium-sized manufacturers are the ones that are feeling the brunt of this right now.” Companies in Missouri, Indiana, Illinois and elsewhere have announced hundreds of layoffs already. Other firms have scaled back expansion plans or said they will shift work overseas. Independent Can raised prices in September, breaking with its custom of setting prices at the start of the year. It is looking to automate lower-skilled jobs, often filled by temporary workers, to reduce expenses

UK surveyors see weakest house price outlook since Brexit vote – RICS

FILE PHOTO: Terraced houses are seen in Primrose Hill, London, Britain September 24, 2017. REUTERS/Eddie Keogh

LONDON (Reuters) – British surveyors are the most downbeat about house prices since the Brexit vote in 2016 with some unsettled by reports that Bank of England Governor Mark Carney warned ministers of a possible house price crash if Britain leaves the EU with no deal. The Royal Institution of Chartered Surveyors (RICS) said its headline house price balance fell to a four-month low of -2 in September, below all forecasts in a Reuters poll. The outlook for prices in three and 12 months’ time was the lowest since June 2016. “Uncertainty relating to Brexit negotiations is at the very top of the list followed by references to the confidential remarks made by the Bank of England Governor to the cabinet,” RICS Chief Economist Simon Rubinsohn said. Last month British media reported Carney privately told ministers that mortgage rates could spiral and house prices fall by 35 percent over three years in a chaotic no-deal Brexit. The BoE declined to comment on the remarks and whether Carney had been referring to extreme financial scenarios used for previous BoE tests of banks’ financial health. Carney himself did not address the reports in a public appearance on the day they appeared, but reiterated that the BoE had tested banks against “very severe” scenarios including “dramatic house price falls”.  Britain’s housing market overall has slowed since the Brexit vote in June 2016. Official data for July showed prices up 3 percent on the year compared to gains of around 8 percent at the time of the referendum. The headline figure masks big regional variations. Prices are falling in London, which saw the biggest rises before the Brexit vote. The city is vulnerable to Brexit worries among foreign investors and any barriers to financial services trade. By contrast, RICS said prices continued to rise in most of the United Kingdom outside London and neighbouring areas. Sales were slow almost everywhere, however. New buyer enquiries were the weakest since March and houses were taking the longest to sell since RICS started asking its members about this regularly in February 2017.

IMF’s Lagarde warns trade, currency wars could be detrimental for growth


FILE PHOTO: Christine Lagarde, International Monetary Fund (IMF) Managing Director, attends a news conference in Tokyo, Japan October 4, 2018. REUTERS/Issei Kato

NUSA DUA, Indonesia (Reuters) – International Monetary Fund Managing Director Christine Lagarde on Thursday warned countries of the perils of a trade or a currency war, saying they could be detrimental to global growth and hurt “innocent bystanders.” Lagarde urged countries to “de-escalate” trade frictions and fix global trading rules, rather than abandon them. “We certainly hope we don’t move in either direction of a trade war or a currency war. It will be detrimental on both accounts for all participants, Lagarde told a news conference during the annual meetings of the IMF and World Bank in Indonesian resort island of Bali. “And there would also be lots of innocent bystanders.” China and the United States have slapped tit-for-tat tariffs over the past few months, rattling financial markets as investors worried the escalating trade war could knock global trade and investment. On recent yuan declines, Lagarde said they were mainly driven by the strength of the dollar, noting that it has not depreciated as much against a basket of currencies. “We’re seeing more and more countries, China included, let their currencies fluctuate,” Lagarde said. The yuan currency CNY=CFXS has faced strong selling pressure this year, losing over 8 percent between March and August at the height of market worries, though it has since pared losses as authorities stepped up support. A U.S. Treasury official on Monday repeated that the Trump administration was concerned about the yuan’s recent weakening as the department prepares a semi-annual report on currency manipulation due out next week. US President Donald Trump has accused China of deliberately manipulating its currency to gain a trade advantage, claims Beijing consistently rejected. “We have supported the move of China toward (currency) flexibility,” she said, adding that the IMF has encouraged Chinese authorities to “go down that path.” Lagarde urged China to follow through on the IMF’s recommendation to continue moving toward a system that allows the yuan to move flexibly She declined to comment on the recent market rout, but said U.S. equities and overall stock prices “in general have been extremely high.”

Trump Says Fed ‘Has Gone Crazy’ Following Stock Market Selloff

Trump talks with reporters after arriving in Erie, Pa. for a campaign rally on Oct. 10

President Donald Trump again criticized the Federal Reserve for raising interest rates, calling it a “mistake” hours after the worst U.S. stock market sell-off since February. “The Fed has gone crazy,” he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally. “So you can say that well that’s a lot of safety actually, and it is a lot of safety, and it gives you a lot of margins, but I think the Fed has gone crazy.” White House Press Secretary Sarah Sanders said in a statement following the close of markets that the U.S. economy is “incredibly strong” despite the selloff, which analysts attributed in part to trade tensions with China. “It’s a correction that we’ve been waiting for for a long time,” Trump said. He frequently celebrates publicly when the stock market reaches new highs, pointing to the gains as affirmation for his economic policies. Trump was briefed on the market turmoil earlier in the day, a White House official said. He has repeatedly criticized the central bank for raising interest rates this year, decisions aimed at preventing the economy from overheating. “The fundamentals and future of the U.S. economy remain incredibly strong,” Sanders said in a statement. “President Trump’s economic policies are the reasons for these historic successes and they have created a solid base for continued growth.”

U.S. stocks tumbled Wednesday the most since February as fresh concern about the impact of the trade war with China roiled technology and industrial shares.

The broad selloff took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years. The sell-off came a day after the International Monetary Fund said the world economy is plateauing and cut its growth forecast for the first time in more than two years, blaming escalating trade tensions and stresses in emerging markets. Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies $110 billion of American products. The IMF projections don’t take into account Trump’s threat to expand the tariffs to effectively all of the more than $500 billion in goods the U.S. bought from China last year. During an event earlier Wednesday amid the selloff, Trump and his top economic adviser, Larry Kudlow, said they believed the U.S. economy was strong. “It is doing well,” Trump said.

Global financial stability risks rising with trade tensions, IMF says

(Reuters) – Risks to the global financial system have risen over the past six months and could increase sharply if pressures in emerging markets escalate or global trade relations deteriorate further, the International Monetary Fund said on Wednesday. IMF Financial Counselor and Director for the Monetary and Capital Markets Department Tobias Adrian talks to media during Global Financial Stability Report press conference at the 2018 International Monetary Fund (IMF) World Bank Group Annual Meeting at Nusa Dua in Bali, Indonesia, October 10, 2018 in this photo taken by Antara Foto. Antara Foto/M Agung Rajasa/ via REUTERS The IMF, whose autumn meetings with the World Bank get under way on the Indonesian resort island of Bali this week, also noted that while the banking system has been shored up by regulators in the decade since the 2008 global financial crisis, easy financial conditions are contributing to a buildup of vulnerabilities such as high debt levels and “stretched” asset valuations.

New bank resolution regimes meant to avoid future bailouts are largely untested, the Fund said in its biannual global financial stability update.

“Near-term risks to global financial stability have increased somewhat,” the IMF said. “Overall, market participants appear complacent about the risk of a sharp tightening in financial conditions.” IMF capital markets director Tobias Adrian said potential shocks to the system could come in many forms, such as higher-than expected inflation that triggers a sharp jump in interest rates or a “disorderly” exit by Britain from the European Union. But the severity of the impact from such shocks will be determined by vulnerabilities including growing non-financial debt levels now exceeding 250 percent of GDP, a decline in underwriting standards outside the traditional banking sector and elevated asset prices that could drop sharply. “It’s this interaction between the buildup of vulnerabilities and the decline in asset prices that can generate adverse implications for macroeconomic activity,” Tobias told a news conference. The rapid build-up in debt in China in recent years also is a concern, although Chinese authorities have taken steps to rein in debt growth, he said. In the report, the IMF said economic growth appears to have peaked in some major economies while the gap between advanced countries and emerging markets was widening. The IMF on Tuesday cut its global growth forecasts due to an escalating U.S.-China trade war and growing financial strains on emerging markets The United States continues to grow strongly and the Federal Reserve raised interest rates for the seventh time in the last eight quarters at its latest policy meeting in September. U.S. stock markets are also at record highs. That contrasts with a slowing in the euro area and Japan. China’s economy is also showing signs of moderating and that could be exacerbated by its trade disputes with the United States, which has imposed tariffs on $250 billion worth of imports from Beijing and is threatening duties on $267 billion more. The normalization of monetary policy in the United States as well as a stronger dollar and escalation in trade tensions has already begun to affect emerging market economies, the Fund said.

New IMF research shows emerging market countries excluding China could face debt portfolio outflows of up to $100 billion, a level last seen during the global financial crisis.

The Fund cited a number of other near-term risks to financial stability including the possibility of a “no-deal” Brexit or renewed fiscal policy concerns in some highly indebted euro area countries. It also urged global regulators to keep in place measures taken since the financial crisis and both heighten supervision of market liquidity and raise the amount of capital banks have to set aside to cushion any downturn. “The financial regulatory reform agenda should be completed, and a rollback of reforms should be avoided,” the Fund said. “To adequately address potential systemic risks, financial regulation and supervision should be used more proactively.”

Watchdog: ‘Nearly all’ new US weapons systems vulnerable to cyber attacks

The watchdog’s report says the GAO “found that from 2012 to 2017, (Department of Defense) testers routinely found mission-critical cyber vulnerabilities in nearly all weapon systems that were under development.” During some of the tests, testers were able to hack into some of these complex weapons systems and take control over them “using relatively simple tools and techniques.”
US F-35 fighter jet conducts first-ever airstrike

US F-35 fighter jet conducts first-ever airstrike
“In one case, it took a two-person test team just one hour to gain initial access to a weapon system and one day to gain full control of the system they were testing,” the report said. In some cases, the “weapon systems used commercial or open source software, but did not change the default password when the software was installed, which allowed test teams to look up the password on the internet and gain administrator privileges.” One of the reasons that the weapons systems are so vulnerable to cyber-attack is their connectivity to other systems, something long seen by the Pentagon as an advantage. Weapons like the F-35 Joint Strike Fighter have been celebrated for their ability to connect to a range of other systems, allowing critical military information to be more easily shared. But the GAO’s reports says that connectivity makes weapons systems vulnerable as potential hackers would only need to penetrate one of the connected systems to potentially gain access to the others. “These connections help facilitate information exchanges that benefit weapon systems and their operators in many ways—such as command and control of the weapons, communications, and battle space awareness,” the reports says while adding “If attackers can access one of those systems, they may be able to reach any of the others through the connecting networks.” Pentagon spokesperson Maj. Audricia Harris told CNN that they “takes threats to our nation seriously.” “We are continuously strengthening our defensive posture through network hardening, improved cybersecurity, and working with our international allies and partners and our defense Industrial Base and defense Critical Infrastructure partners to secure critical information,” she said.
The revelation that so many Pentagon weapons systems are vulnerable to cyber-attacks raises questions about the billions of dollars the US has invested in its various programs. The report said that part of the problem was the fact that cyber-security has only recently been emphasized when developing requirements for these systems.
The report did say the Pentagon “is taking steps to improve its understanding of its weapon systems’ vulnerabilities, determine how to mitigate risks from those vulnerabilities, and inform future development of more secure systems,” but added that the Defense Department faced challenges with regard to boosting its defenses given the cost of recruiting and retaining talented cyber-security professionals and difficulties in sharing information. The Department of Defense recently released its cyber strategy which said the Pentagon is seeking to incorporate cyber-security awareness throughout the institutional culture of the department.

Haley Announces She is Resigning as UN Ambassador, Says U.S. Is Respected Again

UN Ambassador Nikki Haley and President Donald Trump (Screenshot)

( – UN Ambassador Nikki Haley announced Tuesday that she is resigning from her post, effective at the end of the year, saying she believes in term limits and giving someone else a chance to do the job. Appearing with President Donald Trump at the White House on Tuesday, Haley told reporters she will not run for president in 2020 but will campaign for Trump.


The president said he felt it was necessary to make the announcement in person instead of in a written statement, which is how it’s usually done.
“I wanted to do this because Nikki Haley, ambassador to the United Nations, has been very special to me. She’s done an incredible job. She’s a fantastic person, very importantly, but she also is somebody that gets it. She has been at the United Nations from the beginning with us, from the beginning and worked with us on the campaign,” he said. Trump praised Haley as “a very successful governor of South Carolina for eight years.” “And this is possibly even more intense with what’s going on in the world, and very dangerous and a lot of things, but she’s doing a fantastic job, and we’ve done a fantastic job together. We’ve solved a lot of problems, and we’re in the process of solving a lot of problems,” he said. Haley thanked Trump “for just allowing us to come out and talk to you this way.” “It has been an honor of a lifetime. I said I am such a lucky girl to have been able to leave the state that raised me and to serve a country I love so very much has really been a blessing, and I want to thank you for that, but I’m most excited,” she said. When asked whether the ambassador’s decision was personal because she’s been away from her family for so long, Haley said, “My family is very supportive, so no, there’s no personal reason.
“I think that it’s just very important for government officials to understand when it’s time to step aside, and I have given everything I’ve got these last eight years, and I do think that sometimes it’s good to rotate in other people who can put that same energy and power into it. So there really is, a lot of people are gonna want to say there’s a lot of reasons why I’m leaving,” she said.

Commercial Banks Donate $2.5 Million to Senate Democrats for Midterms

block letters spelling out election on top of flag and $100 bill

Banks are going to bat for Democrats in the U.S. November midterm congressional elections as part of an ambitious strategy to rebuild the bipartisan support they enjoyed before the 2007-2009 financial crisis. Commercial banks have so far donated a total of $2.5 million to U.S. Senate Democrats in the 2018 election cycle, the largest sum since 2008, according to data from the Center for Responsive Politics. The backing of Democrats marks a shift for banks, which have kept a low profile in Washington since the crisis. Democrats had all but abandoned the financial industry in the aftermath, wary of appearing to do favors for Wall Street. But some moderate Senate Democrats in May backed the first easing of financial rules since the crisis and now are seeing a boost to their campaign coffers as the sector seeks to broaden its support on Capitol Hill. Of the 20 Senate candidates receiving the most money from banks during the 2018 cycle, 15 are Democrats, according to the Center for Responsive Politics data which tracks donations made by political action committees and individuals. When those seats were last up for election in 2012, only seven Democrats were in the top 20. Senators Heidi Heitkamp, Jon Tester and Joe Donnelly, moderates who helped pushed through the May legislation easing rules on community banks introduced by the 2010 Dodd Frank law, are the top three recipients, the data shows. Representatives for Senators Tester, Heitkamp and Donnelly did not respond to requests for comment. All three senators are locked in tight contests on Nov. 6. Analysts predict Democrats are likely to gain control of the House of Representatives but have a more narrow path to taking back the Senate. The other 12 Senate Democrats, some of whom also voted for the bank rule-easing bill, are also moderates. The exception is Ohio Senator Sherrod Brown, whose position as ranking member on the Senate Banking Committee makes him an important stakeholder for the industry. The sector hopes boosting moderates will constrain the big bank-bashing wing of the Democratic Party, including Senator Elizabeth Warren, a likely presidential candidate in 2020, and Representative Maxine Waters, who is poised to chair the committee overseeing banks if Democrats win the House. Rebuilding broad bipartisan support will be challenging, consumer advocates say. Big banks continue to be a sensitive issue within the Democratic Party, which was bitterly divided over the May legislation, and among voters. The midterm elections mark the first time since 2012 that the banking industry has given more money to Senate Democrats than Republicans, according to center’s data, which is based on federal records released on Sept. 24. The sector has dished out $2.5 million to Senate Democrats and $1.8 million to Republicans this election cycle. By contrast, the industry gave $1.6 million to Senate Democrats and $5.2 million to Senate Republicans during the 2016 elections. The American Bankers Association, the top Washington bank lobby group, has contributed $83,000 to Senate Democratic candidates this cycle and is leading the industry’s push to regain bipartisan support, said its CEO Rob Nichols. Nichols, whose association has for the first time bought advertisements for 12 midterm candidates, including four Democrats, called enhancing the industry’s political capability “strategically important.” “This is rigorously bipartisan: if you support us, we want to support you,” he said. “This is not about playing party favorites. For decades, banking policy was bipartisan up until Dodd Frank, and we’re excited to see a return to this bipartisanship.” Industry officials hope the senators they support will back further legislation easing capital markets rules drawn up in a package that passed the House in July but has yet to pass the Senate. “Democrats being supported by the banks are generally viewed as moderate elements in a Senate that is being steadily stretched to its extreme ideologically,” said Isaac Boltansky, director of policy research at Washington-based Compass Point Research & Trading.

He added that the industry is also anxious to ensure these senators are around to oversee a swift implementation of May’s new laws by the banking regulators.

Two-thirds of registered voters are more likely to vote for a candidate who supports regulating Wall Street and big banks when they talk about the economy, according to a September survey by The Harris Poll on behalf of Better Markets, which lobbies for tighter industry regulation. Ken Bentsen, the chief executive of bank lobby group the Securities Industry and Financial Markets Association (SIFMA) and a former Texas congressman, said it was unfortunate that the industry continued, in his view, to be seen “as a political piñata.” But he said Democratic views on the banking industry were not monolithic, and he saw opportunities to work with members of the party. “We’ll address it, however it turns out,” he said of next month’s election.

Amazon is doubling down on its private label business, stoking ‘huge fear’ in some sellers


Jeff Bezos, president and CEO of Amazon and owner of The Washington Post, speaks at the Economic Club of Washington DC's "Milestone Celebration Dinner" in Washington, U.S., September 13, 2018. 
Joshua Roberts | Reuters Jeff Bezos, president and CEO of Amazon and owner of The Washington Post, speaks at the Economic Club of Washington DC’s “Milestone Celebration Dinner” in Washington, U.S., September 13, 2018

Sellers and brands may not like it, but Amazon is clearly doubling down on its private label business. This is where Amazon sells its own branded products, or products with third-party brands that are sold exclusively on Amazon. Private label brands benefit Amazon in many ways. They expand product selection while giving Amazon better profit margins. Supply chain management becomes easier too. It can also pressure bigger brands to cut prices on Amazon to stay competitive. Last week, CNBC reported that Amazon is more aggressively growing its private label business, having launched a new “accelerator” program for third-party sellers to become part of the “Amazon family of brands,” and a special feature that promotes its own brands at the bottom of competitor listings. That followed recent reports of Amazon having significantly ramped up the number of private label brands sold exclusively on its website. This comes at a time when sellers and brands are increasingly reliant on Amazon, where almost half of all online sales take place. More Amazon-owned brands mean they will have to directly compete with Amazon for consumer wallet share. Amazon’s effort to grow the number of private label brands is the clearest sign yet of how far it wants to go in its quest to become the “Everything Store.” But that’s stoking more fear and concern among sellers and brands that sell on Amazon’s website, as they have to go head-to-head with the e-commerce giant in a growing number of categories. “Amazon’s dominance of the e-commerce sphere has forced brands to adopt an Amazon-first strategy in order to remain relevant, but now those same brands are facing off against the retailer’s own products in the fight for the digital shelf,” Peter Andrews, director of insights at One Click Retail, wrote in report published this week. Amazon first got into the private label business in 2009, with commodity products such as batteries and USB cables. That slowly expanded to diapers and baby wipes, and now its catalog of exclusive brands ranges from toys and shoes to food and mattresses. The company currently has over 120 of them, according to a report published by TJI Research. That’s more than a nine-fold increase since early 2016, SunTrust Robinson Humphrey wrote in a note in June. The firm expects Amazon’s private-label business to generate $7.5 billion in sales in 2018 and $25 billion by 2022. “The goal of [Amazon’s] private-label products is to provide consumers a large selection as well as good prices and quality,” D.A. Davidson’s Tom Forte wrote in a note from June. Multiple sellers and brands told CNBC that they are concerned about Amazon’s move into the private label space. If big concerns to date have been counterfeits and reliance on Amazon as a platform, now they are worried that Amazon will be a bigger competitor in the market. Jeff Benzenberg, director of marketing at eRetailing, a Columbus, Ohio-based company that sells custom apparel, told CNBC that it just makes being a seller on Amazon much more difficult.

“It’s a huge fear,” he said. “We’re worried all the time that they’re about to enter our space in private label or whatever method they choose.”

Data shows Amazon can quickly become a formidable competitor if and when it decides to get serious about a certain category. According to One Click Retail, Amazon’s Mama Bear diapers now outsell other smaller brands like Honest Company and Bambo Nature, after lagging behind in sales earlier this year. The report said that Mama Bear’s sales jumped over 40 percent between the second and third quarters of this year, after Amazon ramped up its promotions, to reach an average sales of $200,000 per week. “Competition has never been so fierce,” One Click Retail wrote in the report. Forte at D.A. Davidson said pressure from Amazon’s private label brands can make competitors to purchase more ads on Amazon, so they could be found more easily on the marketplace. Amazon gives its private label brands more exposure across its site, listing them high in search results under a separate box titled “Top Rated from Our Brands.” But the bigger ambition may be in becoming a massive retail juggernaut that can handle everything from manufacturing and storage to storefront and delivery, according to Juozas Kaziukenas, who runs the e-commerce research firm Marketplace Pulse.

The Trump administration just escalated its high-stakes competition with China

Vice President Mike Pence speaks at the Hudson Institute in Washington, D.C., U.S., on Thursday, Oct. 4, 2018. Pence laid out allegations of Chinese election interference in a harshly worded speech Thursday, signaling a firmer U.S. pushback against Beijing as trade anxiety weighs on the looming midterm congressional elections. 
Joshua Roberts | Bloomberg | Getty Images Vice President Mike Pence speaks at the Hudson Institute in Washington, D.C., U.S., on Thursday, Oct. 4, 2018
. Pence laid out allegations of Chinese election interference in a harshly worded speech Thursday, signaling a firmer U.S. pushback against Beijing as trade anxiety weighs on the looming midterm congressional elections.  Even with all news noise focusing on the Brett Kavanaugh Supreme Court confirmation fight and the “not NAFTA” trade agreement among the U.S., Mexico and Canada, it would be a mistake to miss this week’s most significant geopolitical development:

The dramatic unfolding of the Trump administration’s intensified offensive on China.

The administration’s clearest and most comprehensive broadside on China yet followed what one official called “thousands of hours” of study and planning. It will involve agencies across the U.S. government, from the Pentagon to the U.S. Trade Representative. The consequences will be both immediate and potentially generational for global economic and security matters. Senior officials in Beijing have increasingly worried that President Donald Trump, with his new tariffs on more than $200 billion of Chinese imports, wasn’t just acting as a deal-maker seeking greater leverage for market openings. They suspected a shift was afoot in Washington to more fundamentally address the Chinese challenge. What lies behind a series of administration statements and actions was a deepening conviction that Trump’s predecessors have done too little to respond to years of unfair Chinese trade practices, cyber transgressions, rapid military growth, growing technological prowess and the underlying strategic consequences of the so-called Belt and Road economic initiative, whose aggregate investment and loan figures are a multiple of the Marshall Plan. Four pieces of news this week underscore the far-reaching, multi-faceted nature of the Trump administration efforts aimed at China, with senior officials promising more in the weeks ahead.

They include:

  • A landmark speech by Vice President Mike Pence at the Hudson Institute, calling out China as America’s foremost threat, ahead of Russia, due to both the scope and seriousness of its activities abroad and within the United States.
  • An underreported aspect of the new U.S.-Mexico-Canada trade agreement that requires all three parties to inform the others if they begin trade talks with “non-market economies” (read China). Trump administration officials view it as a template for trade deals to follow.
  • A leaked report that the U.S. Navy’s Pacific Fleet has proposed a series of military operations during a single week in November to send a warning to China and to provide a deterrent to its Beijing’s regional military ambitions.
  • On Friday, the Pentagon released the results of a yearlong look at vulnerabilities in America’s manufacturing and military industrial base. “China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security,” including a “widely used and specialized metals, alloys and other materials, including rare earths and permanent magnets,” the ve to know … Beijing is employing a whole-of-government approach, using political, economic and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States. China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of our country.”

“Most have abandoned the hope that Chinese economic growth would bring with it democratic change, a greater embrace of individual rights and thus greater common cause with the U.S.”


Graham Allison of Harvard popularized the concept of “Thucydides Trap,” namely that when one great power displaces another, war is most often the result. He argued this week that to avoid that outcome this time around the U.S. and China will require the kind of “extreme imagination” that has failed them thus far.

The Trump administration’s China shift is one of its boldest moves yet. Far more difficult will be to forge a strategy that manages the competition without conflict and deploys “extreme imagination” to create a world order that defends U.S. interests and embraces a risen China.

Colin Powell Rips Trump on Immigration, NATO, Anti-Press Rhetoric: The World Can’t Believe What’s Happening

Former Secretary of State Colin Powell spoke out against President Donald Trump in an interview with CNN’s Fareed Zakaria on Sunday, blasting his anti-press rhetoric, retreat from the world stage, and his insults of U.S. allies. Zakaria asked Powell and his other guest, former Secretary of State Madeleine Albright, about American foreign policy and whether the country is still leading the rest of the world by example. Powell, a Republican who has maintained a low profile during the Trump administration, called out “what we are not doing as the United States of America.” “What are we doing? We’re walking away from agreements, we’re walking away from alliances,” Powell said. He noted that Trump insulted U.S. allies at the NATO summit. After Powell invoked the violence at Charlottesville, Zakaria asked: “Do you think this president can be a moral leader for the world?” “I don’t know that he can do that,” Powell said. “Because right now that is not the way he is acting.” Powell said that his favorite three words in the Constitution are “we the people.” “Recently, it has become ‘me the president’ as opposed to ‘we the people,’” he said. “And you see things that should not be happening,” Powell continued. “How can a president of the United States get up and say that the media is the enemy of Americans? Hasn’t he read the First Amendment? You are not supposed to like everything the press says, or what anyone says… that’s why we have a First Amendment, to protect that kind of speech.” “I hope the president can come to the realization that he should really stop insulting people,” Powell said. “I used this two years ago when I said I could not vote for him in the 2016 election. Why? He insulted everybody. He insulted African-Americans. He insulted women. He insulted immigrants. He insulted our best friends around the world. All of his fellow candidates up on the stage during the debates. I don’t think that’s what should be coming out of a president of the United States. But I don’t see anything that’s changed in the last two years.” Albright added that Trump’s rhetoric about America being a victim is “so not true.”

“The world is watching,” Powell said. “They cannot believe we’re doing things like separating mothers and children who are trying to get across the border from south of our border. They can’t believe we’re making such an effort to cease immigration coming into the country. It’s what’s kept us alive!” “The world is watching and wondering, why are we pulling away from all the things we helped create?” he said. “I don’t think that’s going to create a better America.”

British stocks posts biggest weekly drop in six months on strong U.S. jobs report

FILE PHOTO: Traders looks at financial information on computer screens on the IG Index trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson

LONDON (Reuters) – Britain’s top stock index fell more than 1 percent on Friday, posting its biggest weekly drop in six months, as a strong U.S. jobs report raised concerns of a widening selloff in global markets. The export-oriented FTSE 100 index .FTSE, down 1.3 percent, was hurt also by a stronger pound. The British currency rallied by a quarter of a percent after European Union Brexit negotiators said that a divorce deal with Britain was very close. Strong U.S. data and confident remarks by U.S. policymakers had fuelled a surge in U.S. Treasury yields which had spilled over into broader global stock markets as investors worried that policymakers may tighten policy more than expected. “It is a strong jobs report, make no mistake,” said Kenneth Broux, an FX strategist at Societe Generale in London. An unemployment rate of 3.7 percent was what the Fed had forecasted for the fourth quarter but we have got there sooner.” U.S. job growth slowed in September as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near 49-year lows of 3.7 percent, indicating more tightening in labour market conditions. The main index closed down 1.3 percent at 7,318 points and is has fallen 2.5 percent on the week, its biggest weekly fall since the week of March. 21. The sell-off in U.S. Treasuries – 10-year bond yields are up 15 basis points this week and set for the biggest weekly rise in eight months — rippled into bond markets in Europe and Britain and pushed stock markets around the world lower.

.FTSEFT-SE International


Miners were the main drags on the index with Anglo American (AAL.L) and Rio Tinto (RIO.L) leading losses. The mid-cap index .FTMC was down 0.7 percent and the small-cap index FTSC> was down 0.4.

Oil prices mark weekly gain ahead of Iran sanctions

FILE PHOTO: Oil pumpjacks are seen near Aneth, Utah, U.S., October 29, 2017. REUTERS/Andrew Cullen

NEW YORK (Reuters) – Crude futures steadied on Friday after climbing to four-year highs earlier this week, and both Brent and U.S. crude marked weekly gains ahead of U.S. sanctions on Iranian oil exports. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 1 cent to settle at $74.34 a barrel.

Global benchmark Brent crude LCOc1 futures for December delivery fell 42 cents to settle at $84.16 a barrel. On Wednesday, Brent hit its highest price since late 2014, at $86.74.

“They’re taking a pause after yesterday’s sell-off,” said Andrew Lipow, president of Lipow Oil Associates. WTI’s weekly gain was about 1.3 percent; Brent’s was around 1.4 percent. Price gains this week were limited by Saudi Arabia and Russia’s saying they would raise output to at least partly make up for expected disruptions from Iran, OPEC’s No. 3 producer, due to the U.S. sanctions that take effect on Nov. 4. Oil prices are up 15-20 since mid-August, at their highest levels since late 2014. Washington wants governments and companies around the world to stop buying Iranian oil to pressure Tehran into renegotiating a nuclear deal. Saudi Arabian Crown Prince Mohammed bin Salman insisted the kingdom is fulfilling promises to make up for lost Iranian crude supplies, Bloomberg reported. Saudi Arabia is now pumping about 10.7 million barrels per day (bpd) and can add a further 1.3 million “if the market needs that,” he said. India will buy 9 million barrels of Iranian oil in November, two industry sources said, indicating that the world’s third-biggest oil importer will keep purchasing crude from the Islamic republic. Many analysts said they expected Iranian exports to drop by around 1 million barrels per day. U.S. bank Jefferies said there was enough oil to meet demand, but “global spare capacity is dwindling to the lowest level that we can document.” S&P Global Platts sees prices strengthening “a little” toward the end of the year, said Chris Midgely, the company’s global director of analytics, at the S&P Global Platts Analytics annual summit. Fundamentals indicate a price in the high $70s for Brent, but the reality is seen above that, he said. Prices are then likely to weaken in the first two quarters of 2019 before strengthening about $4 to $5 a barrel in the second half of the year as the market anticipates a shipping fuel regulation that takes effect in 2020. U.S. drillers cut two oil rigs in the week to Oct. 5, General Electric Co’s (GE.N) Baker Hughes energy services firm said RIG-OL-USA-BHI. Rising costs and pipeline bottlenecks in the nation’s largest oil field have hindered new drilling since June. Hedge funds cut their combined futures and options position in New York and London by 13,459 contracts to 333,109 in the week to Oct. 2, the U.S. Commodity Futures Trading Commission (CFTC) said.

Tech Stocks Tumble as Market Momentum Stalls

Falling U.S. government bond prices also weigh on investors

Technology stocks took another leg down Friday, dragging the tech-heavy Nasdaq Composite to its worst week since early spring. Investors sold many of the year’s best performing stocks, moving into so-called safety stocks such as utilities. The sentiment shift occurred as the stock market’s momentum appeared to stall in the face of suddenly higher long-term government bond yields. The Nasdaq Composite fell 91.06, or 1.2%, to 7788.45. For the week, the index is off 3%, its worst performance since the week ended March 23. Among big tech stocks, Apple slumped $3.70, or 1.6%, to $224.29 while Netflix fell 12.30, or 3.4%, to 351.35. The Dow Jones Industrial Average fell 180.43 points, or 0.7%, to 26447.05, while the S&P 500 dropped 16.04 points, or 0.6%, to 2885.57. “It doesn’t feel like the bottom yet,” said Justin Wiggs, managing director in equity trading at Stifel Nicolaus, adding that he expects to see a “sloppy” Monday for stocks, too. As Treasury yields have risen to multiyear highs, and as solid economic data puts the Federal Reserve on track for more short-term rate increases in coming months, the rising yields on bonds have some investors questioning the value of their stockholdings relative to the perceived safety of their bondholdings. The result has been two days in a row of big drops in the stock market. And while many analysts and traders said they expect stocks will end the year higher, they said they expect more swings similar to Thursday’s and Friday’s moves in the final three months of the year. “We’re going to be seeing more volatility,” said Tracie McMillion, head of Global Asset Allocation at Wells Fargo Investment Institute. “The market is trying to assess: How do you discount stock prices when interest rates are going up?” Shares of technology companies in the S&P 500, which have been the best performers in 2018 as investors chased growth, slumped 1.3%. “Tech is definitely pulling back this week, but given the backdrop of strong earnings, it’s just a pullback after a run-up earlier this year, not a reversal,” said Jeff James, portfolio manager at Driehaus Capital Management, who added that he had reduced his tech exposure recently. In other stock markets, the Stoxx Europe 600 declined 0.9%, putting its weekly losses at 1.8%. In Asia, Japan’s Nikkei Stock Average fell 0.8% and Hong Kong’s Hang Seng dropped 0.2%.

Top US admiral warns of Russian submarine threat


(CNN)America’s most senior naval officer in Europe, Adm. James Foggo, said Friday that he was “concerned” about some of Russia’s newer and more advanced fleet of submarines. “Russia is not 10 feet tall but they do have assets that keep me vigilant, concerned. One of them is in the undersea domain,” Foggo, the commander of US Naval Forces Europe, told reporters at the Pentagon. While Foggo said Russia’s surface fleet, including its aging aircraft carrier, posed little threat — saying Moscow did “not have a robust capital ship capability” — he did express concerns about Russian advancements in its development of submarines and cruise missiles. “We’ve seen creation of new classes of all sorts of submarines and ships. I’m more concerned with submarine warfare,” Foggo said earlier on Friday while addressing the Atlantic Council in Washington. “Russians have produced the new Dolgorukiy-class submarine. They’ve produced the Severodvinsk-class submarine. They’ve produced the new Kilo hybrid-class submarines,” Foggo told reporters at the Pentagon. He said six of the Kilo-class subs were either “operating in the Black Sea or the eastern Mediterranean,” where “they’re firing the Kalibr missile,” a Russian-made cruise missile that he called “very capable,” saying it could reach “any one of the capitals of Europe.” “That’s a concern to me, and it’s a concern to my NATO partners and friends. So we should know where they are at all times,” he added, advocating for increased US and allied investment in anti-submarine warfare capabilities. Foggo, who is also the commander of NATO’s Allied Joint Force Command-Naples, also discussed the upcoming NATO exercise Trident Juncture, which is due to begin October 25 and will involve some 45,000 troops from all NATO members as well as Sweden and Finland. The exercise, which Foggo called NATO’s largest since 2002, will take place in Norway and the surrounding areas of the North Atlantic and the Baltic Sea. It will include 150 aircraft, 60 ships and up to 10,000 vehicles. Foggo said Russia had been invited to observe the military exercise in accordance with international agreements and that the exercise would send a message of “deterrence” to any would-be adversary.

Germany says no-deal Brexit not in UK, EU or German interests

BERLIN (Reuters) – A no-deal Brexit would not be good for Britain, Europe or Germany, a German government spokesman said on Friday, adding that Chancellor Angela Merkel sees that close cooperation with Britain will be possible in some areas.  “Britain exiting without an agreement would not be in the interests of Britain, Europe or Germany,” spokesman Steffen Seibert told a government news conference, adding that the aim was to make “maximum progress” before the next EU summit.

Italy dismisses concern the EU will reject its budget plan

FILE PHOTO: Italian Economy Minister Giovanni Tria attends as Prime Minister Giuseppe Conte (unseen) speaks during his first session at the Lower House of the Parliament in Rome, Italy, June 6, 2018. REUTERS/Tony Gentile/File Photo

ROME (Reuters) – The Italian government on Thursday dismissed concerns that the European Commission would reject its plan to raise deficit spending next year and signaled that it would not backtrack, even under market pressure. After a selloff hit Italian bonds on Tuesday, the government made up of the anti-establishment 5-Star Movement and the right-wing League on Wednesday watered down its original plan to keep its deficit steady at 2.4 percent of gross domestic product (GDP) in 2020-21. But it stuck to its 2.4 percent target for next year, and on Thursday government officials said they had no plans to make further revisions to that goal, which is three times more than one set out by the previous government. Speaking about the multi-year budget targets that must be reviewed by Brussels by mid-month, Deputy Economy Minister Massimo Garavaglia said on Thursday: “(Either) it passes or it doesn’t, but this isn’t the problem. We’re more focused on what is happening in the markets.” Garavaglia also said the government’s GDP growth forecast for next year would be 1.6 percent, much higher than the 1.2 percent median projection of 51 analysts polled by Reuters last month. Economy Minister Giovanni Tria later said in a letter to the European Commission that the growth forecasts had actually been set at 1.5 percent in 2019, 1.6 percent in 2020 and 1.4 percent in 2021. He called for an “open and constructive dialogue” with the Commission over the budget plan. The gap between Italy’s benchmark 10-year bond yields and their safer German equivalent on Tuesday widened to more than 300 basis points, its widest since May, on concerns about Italy’s plans. On Thursday, the spread had narrowed to 278 basis points. League leader Matteo Salvini, speaking on RAI state radio, said that next year’s deficit spending was needed to spark growth and create jobs, and added that the government would not back down even if the spread widened to 400 basis points. “This is a budget that looks to the future, and we will absolutely not go backwards,” Salvini said. The government’s confident tone came as la Repubblica newspaper reported that the commission had already sent Italian officials an informal note saying it would reject next year’s spending plans. Sources close to economic commissioners in Brussels said the report was “unfounded”. The commission must formally give its opinion on the budget forecasts by the end of the month. Separately, deputy prime minister and 5-Star leader Luigi Di Maio denied an article in Il Fatto Quotidiano saying the government was seeking a cabinet reshuffle, mainly to replace Economy Minister Giovanni Tria in December or January. Di Maio also seemed unfazed by concern expressed earlier this week by commissioners and EU allies over the deficit spending plans. “We have brought home the people’s budget, and we’re going to forge ahead more determined than before,” Di Maio said in an interview with Radio Radicale. “Now we can start a serious and healthy discussion with the European Commission to reach a positive conclusion.”

Oil prices rise on Iran sanctions, outlook uncertain

FILE PHOTO: Oil pumpjacks are seen near Aneth, Utah, U.S., October 29, 2017. REUTERS/Andrew Cullen

LONDON (Reuters) – Oil prices rose  as traders anticipated a tighter market due to U.S. sanctions on Iran’s crude exports. Benchmark Brent crude oil was up 30 cents a barrel at $84.88 by 0750 GMT. On Thursday, Brent fell by $1.34 a barrel or 1.6 percent. The contract was on course for a gain of around 2.6 percent for the week. Both crude benchmarks retreated on Thursday following news of a rise in U.S. oil inventories and after Saudi Arabia and Russia said they would raise output to at least partly make up for expected disruptions from Iran. But the pull-back did little to dent two months of rises that have added 15-20 percent to oil prices since the middle of August as impending U.S. sanctions on Tehran restrict Iranian crude oil exports. Washington wants governments and companies around the world to stop buying Iranian oil from Nov. 4 to put pressure on Tehran to renegotiate a nuclear deal. It is not clear exactly how much impact the sanctions are having on supply but many analysts say they expect Iranian exports to drop by around 1 million barrels per day (bpd). “Iranian exports could fall below 1 million bpd in November,” U.S. bank Jefferies said. “It now appears that only China and Turkey may be willing to risk U.S. retaliation by transacting with Iran.” The investment bank said there was enough oil to meet demand, but “global spare capacity is dwindling to the lowest level that we can document … meaning any further supply disruptions would be difficult for the market to manage – and could lead to spiking crude oil prices”. Speculators have accumulated bullish long positions betting on a further rise in prices amounting to almost 1.2 billion barrels of oil. Meanwhile, the number of short positions in the six biggest oil futures and options contracts has fallen to the lowest level since before 2013. But Goldman Sachs says the uptrend may not last. “While upside price risks will prevail for now, fundamental data outside of Iran has not turned bullish in our view,” Goldman said in a note to clients. “We expect fundamentals to gradually become binding by early 2019 as new spare capacity comes online … pointing to the global market eventually returning into a modest surplus in early 2019.”

Zuckerberg Faces Anger Over Facebook Executive’s Kavanaugh Support

Joel Kaplan, head of global policy, appeared at the Supreme Court nominee’s Senate hearing

Joel Kaplan, vice president of global public policy at Facebook, and Mark Zuckerberg, the company’s founder, in Paris earlier this year.
Joel Kaplan, vice president of global public policy at Facebook, and Mark Zuckerberg, the company’s founder, in Paris earlier this year. Photo: Christophe Morin/Bloomberg News

Hundreds of Facebook Inc. employees have expressed outrage about a top global policy executive’s decision to support Supreme Court nominee Brett Kavanaugh and appear at his hearing last week, people familiar with the matter said. Employees raised the question directly to Chief Executive Mark Zuckerberg during his weekly question-and-answer session last Friday, the people said. Chief Operating Officer Sheryl Sandberg also weighed in on the controversy on Friday in an internal discussion thread that has so far drawn hundreds of comments, many of which were critical, according to people who reviewed the posts. The debate began shortly after an image of Joel Kaplan, Facebook’s head of global policy, surfaced in the middle of Judge Kavanaugh’s lengthy hearing last Thursday, people familiar with the company said. His appearance quickly became an internal referendum on how Facebook’s top executives felt about the #MeToo movement, Trump-era politics and freedom of speech and expression, the people said. Mr. Zuckerberg said last Friday he wouldn’t have made the same decision but the appearance didn’t violate Facebook policies and that Mr. Kaplan has long been close friends with Judge Kavanaugh. Following an FBI investigation into allegations against Judge Brett Kavanaugh, WSJ’s Shelby Holliday looks at key Senators to watch ahead of a confirmation vote. Photo: Getty Images The controversy hasn’t died down internally. Senior Facebook executives, including Mr. Zuckerberg and Ms. Sandberg, are planning to hold a town hall meeting Friday to address employee concerns about Mr. Kaplan’s decision, people close to Facebook say. Mr. Kaplan, who is based in Washington, D.C., will participate as well, the people said. “This fire has been burning for a full week now,” said one employee. Mr. Kaplan’s appearance came in the midst of a difficult week for the company. Last Monday, the co-founders of Instagram abruptly resigned after clashing with Mr. Zuckerberg on strategy. Friday, the company disclosed its largest-ever security breach.

The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies

The attack by Chinese spies reached almost 30 U.S. companies, including Amazon and Apple, by compromising America’s technology supply chain, according to extensive interviews with government and corporate sources. In 2015, Inc. began quietly evaluating a startup called Elemental Technologies, a potential acquisition to help with a major expansion of its streaming video service, known today as Amazon Prime Video. Based in Portland, Ore., Elemental made software for compressing massive video files and formatting them for different devices. Its technology had helped stream the Olympic Games online, communicate with the International Space Station, and funnel drone footage to the Central Intelligence Agency. Elemental’s national security contracts weren’t the main reason for the proposed acquisition, but they fit nicely with Amazon’s government businesses, such as the highly secure cloud that Amazon Web Services (AWS) was building for the CIA.

New York Investigating Trump Tax Dodging

New York Investigating Trump Tax Dodging

The New York state tax department said Tuesday it is investigating reports that President Donald Trump helped his parents dodge millions of dollars in taxes and received far more money from his father’s real estate empire than he has claimed in the past. Earlier, The New York Times said its own exhaustive probe of a vast trove of tax returns and confidential records showed Trump had engaged in suspect tax tactics, including “outright fraud” that greatly inflated the funds he received from his parents. Trump has stated on numerous occasions that he received little help from his father, New York property developer Fred Trump, in building his fortune. “The Tax Department is reviewing the allegations in the NYT article and is vigorously pursuing all appropriate avenues of investigation,” New York state Taxation and Financing spokesman James Gazzale told AFP. The Times said Trump received the equivalent of $413 million in today’s dollars from his father’s real estate activities — having earned $200,000 a year in today’s dollars by age three. By age eight, he was already a millionaire. Trump was receiving the equivalent of $1 million a year from his father shortly after his college graduation, it added, noting that the funds grew to more than $5 million per year when he was in his 40s and 50s. The Times said the bulk of the funds owed to tax evasion tactics that Trump helped devise, including a “sham corporation” he and his siblings created to hide millions of dollars in gifts from their parents. There were also millions of dollars in improper tax deductions and Trump helped further reduce his parents’ tax bill by undervaluing their real estate holdings by hundreds of millions of dollars on tax returns, according to the Times. The newspaper said Trump’s parents, Fred and Mary Trump, who died respectively in 1999 and 2000, transferred more than $1 billion in wealth to their five children. This could have produced a tax bill of at least $550 million but the Trumps paid a total of just $52.2 million, the Times said, citing tax records. One of Trump’s lawyers, Charles Harder, decried the newspaper’s allegations as “100 percent false, and highly defamatory.” “There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate,” he added. “President Trump had virtually no involvement whatsoever with these matters.” Harder insisted the matter was mostly handled by other relatives who relied “entirely” upon licensed professionals to “ensure full compliance with the law.” The White House, meanwhile said that “Many decades ago, the IRS reviewed and signed off on these transactions.” Spokeswoman Sarah Sanders instead shifted blame onto the Times itself, saying “Perhaps another apology from The New York Times, like the one they had to issue after they got the 2016 election so embarrassingly wrong, is in order.” The Times said Trump’s tax-hating father used various methods to funnel his wealth to his children and shield it from the Internal Revenue Service, some of which tax experts said was improper or possibly illegal. Among the tactics, Fred Trump gave ownership of most of his real estate empire to his children a year and a half before his death.The properties were valued at just $41.4 million although they were sold off over the next decade for more than 16 times that amount, it said. The Times said Trump got a cut of $177.3 million, or $236.2 million in today’s dollars, from the sale. Breaking with the practice of past presidents, Trump has refused so far to release his tax returns. Citing tax experts, the Times said Trump was unlikely to face criminal prosecution for helping his parents evade taxes but could face civil fines for tax fraud if the matter is pursued by the authorities.

Dollar hits six-week highs on hawkish Fed

FILE PHOTO: Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick Wilking/File Photo

NEW YORK (Reuters) – The U.S. dollar rose to its highest in six weeks on Wednesday as Federal Reserve Chairman Jerome Powell said the U.S. economy is “remarkably positive” and spoke of the need to continue raising interest rates. Hawkish Fed speakers have helped elevate the greenback this week, after the Fed last Wednesday raised rates as expected and said it foresees another rate hike in December, three more next year and one in 2020. Powell on Wednesday continued to talk up U.S. economic strength a day after hailing a “remarkably positive outlook” for the U.S. economy that he feels is on the verge of a “historically rare” era of ultra-low unemployment and tame prices. Data on Wednesday supported the view that the U.S. economy is in strong shape. Services sector activity raced to a 21-year high in September and companies boosted hiring, signs of enduring strength at the end of the third quarter. The dollar is outperforming as U.S. growth remains strong while economic data in other large economies including the euro zone has come in below expectations. “One of the reasons we think why the dollar has been so bid in the last several months has been because the U.S. economy has been performing reasonably well, whereas we’ve seen a material slowdown in terms of data coming out of the euro zone and Japan and other large economies,” said Rai. The euro is also being hurt by uncertainty surrounding Italy’s debt, fiscal plans and future ties with the rest of Europe, which has unnerved markets and exacerbated tensions with other euro zone leaders. The euro has been testing key technical support at $1.1510-$1.1508, which was a temporary low set in June. If the euro zone single currency sustains its break below this level it may next test the $1.13 area, which was the one-year low reached in August.

Auto stocks tumble, but technician says one has breakout potential

Auto stocks have hit the skids.

Trading Nation: Auto stocks skid
Trading Nation: Auto stocks skid
Over the past three months, trade worries and weak sales drove General Motors, Ford, Fiat Chrysler and Toyota to their lowest level of the year. Disappointing declines in monthly car sales for GM and Ford added to the industry’s pain on Tuesday. “I wouldn’t call any of them technically attractive right now, but if I had to pick one, it’d be Toyota,” Instinet’s chief market technician said Tuesday on CNBC’s “Trading Nation.” Since its lows in December 2009, Toyota has rallied nearly 130 percent. Its performance in recent years could have set it up for a larger rise. “Over the last five years, it’s about flat, but it hasn’t broken down yet and that’s interesting because it’s built this constructive pattern along the way,” said Cappelleri. “I’d be patient but I wouldn’t mind buying this breakout to $140 if it gets there.” Toyota briefly traded at $140 at the beginning of the year, 11 percent higher than Tuesday’s close of $125.71. Chad Morganlander, portfolio manager at Washington Crossing Advisors, is concerned the broader auto space could lure investors into a value trap. “We would be cautious on the autos,” Morganlander said on “Trading Nation” on Tuesday. “They look cheap from a P-E perspective, but when you include debt on the valuation, then they’re not cheap.” Ford, for example, trades with a price-to-earnings ratio below 7, more than half the multiple on the S&P 500. However, it ended the second quarter with $102 billion in long-term debt and $221.5 billion in total liabilities. Morganlander says GM has a similar setup. “When you’re looking now at this stage in the market cycle you want to find companies that have good quality, consistent earnings growth,” he said. “If you want industrials and you need that cyclical torque in your portfolio, look at 3M, look at Stanley, Black & Decker, but avoid companies that have a lot of debt on their balance sheets.” By comparison to Ford’s $102 billion, 3M had $11.3 billion in long-term debt on its balance sheet at the end of its June quarter, while Stanley, Black & Decker held $2.8 billion.

Putin Tells Trump to Blame Guy in the Mirror for High Oil Prices

Putin Tells Trump to Blame Guy in the Mirror for High Oil Prices

Russian President Vladimir Putin said his American counterpart’s Iran sanctions are largely to blame for current high oil prices. “President Trump considers that the price is high; he’s partly right, but let’s be honest,” Putin said at the Russian Energy Week conference in Moscow on Wednesday. “Donald, if you want to find the culprit for the rise in prices, you need to look in the mirror.” The Russian leader pushed back against escalating criticism of OPEC and its allies, which Trump has blamed for Brent crude’s rise to a four-year high near $85 a barrel. Still, Putin said his country has already boosted output and has the capacity to add another 200,000 to 300,000 barrels to the market. Saudi Arabia, Russia’s closest ally within the oil-producers’ group, earlier showed signs of bowing to Trump’s pressure. The kingdom has “significantly” raised production to a near-record level of 10.7 million barrels a day, Energy Minister Khalid Al-Falih told reporters in the Moscow. Russia’s cooperation with the Organization of Petroleum Exporting Countries successfully restored the oil market to balance and a good price range of $65 to $75 a barrel, Putin said. Current prices are “largely the result of the current U.S. administration — these expectations of sanctions against Iran, the political problems in Venezuela,” Putin said. “Look at what’s happening in Libya. The state is destroyed. It’s the result of irresponsible policies which have a direct impact on the world economy.”

Italy budget concession hopes switch risk sentiment back on

LONDON (Reuters) – European shares rose and Italian bonds rallied on Wednesday as some of the worries that have rippled across markets this week were soothed by signs Rome was amenable to cutting budget deficits and debt in coming years. While the euro ceded some earlier gains against the dollar to trade flat on the day, the positive sentiment rippled across the Atlantic where Wall Street looks set for a stronger session. Markets were lifted on Wednesday by a report in the Milan daily Corriere della Serra – later confirmed to Reuters by an Italian government source – that said the deficit would fall to 2.2 percent of gross domestic product in 2020 and to 2 percent in 2021, from the 2.4 percent earlier outlined. That relieves some fears that Italy’s decision to expand budget deficits well beyond what was agreed by a previous government would deepen its debt problems and stoke conflict with the European Union. “That the Italian government is trying to appease its EU partners can be seen as a step in the right direction and therefore justifies some euro-positive reaction,” Thu Lan Nguyen, a FX strategist at Commerzbank, said. While U.S. President Donald Trump agreed a new trade pact with Mexico and Canada, a disputed clause in the trilateral agreement, forbidding similar deals with “non-market” countries, was seen as raising risks for Sino-U.S. talks.

Ryanair warns on profit as strikes and rising fuel prices take toll

DUBLIN (Reuters) – Ryanair (RYA.I) cut its forecast for full-year profit by 12 percent on Monday and said worse may be to come if recent coordinated strikes across Europe continue to hit traffic and bookings. Europe’s largest low-cost carrier has struggled with labour relations since it bowed to pressure to recognise trade unions for the first time last December. Industrial unrest has escalated in recent months as it makes slow progress in talks with some unions. Shares in Ryanair, which is also counting the cost of stubbornly high fuel prices, fell by as much as 10 percent, and the warning reverberated around the sector, with rivals Lufthansa (LHAG.DE), Air France KLM (AIRF.PA) and easyJet (EZJ.L) down by 0.5-3.3 percent. The Irish airline now expects profit for the year, excluding start up losses in Laudamotion, to come in at 1.10-1.20 billion euros ($2.66 billion), compared with its prior forecast of 1.25-1.35 billion euros. That would represent a 17 to 24 percent fall from the record 1.45 billion euros profit after tax booked in its most recent financial year to March 31. It added that it could not rule out further disruption, which may require full-year forecasts to be lowered again and further cuts to its loss-making winter capacity. While Ryanair said it was able to manage initial smaller strikes, two coordinated walkouts since August in Portugal, Germany, Spain, Belgium and the Netherlands hit passenger numbers, last minute bookings, yields and forward air fares. Those strikes, which also spread to some staff in Sweden and Italy, disrupted the plans of more than 100,000 customers. Quoting a call management held with analysts on Monday, Barclays said Ryanair was working to resolve all union deals in the next 3-5 months. Ryanair shares fall after profit warning –

Reuters Graphic


Ryanair said progress in reaching collective labour agreements with staff in other major markets of Ireland, Britain and Italy have not been repeated in the five other EU countries due to what it called “interference” in negotiations. “Customer confidence, forward bookings and Q3 fares have been affected, most notably over the October school mid-terms and Christmas in those five countries,” Ryanair chief Michael O’Leary said in a statement. Goodbody Stockbrokers analyst Mark Simpson said the warning came as a surprise given that O’Leary had said there was no change to guidance just two weeks ago. Analysts at Bernstein said the cut was the latest indication that the “low cost wins, legacy loses” story may be coming to an end after budget rival easyJet gave a cautious outlook for next year on Friday, despite benefiting from Ryanair’s woes. Ryanair said fares in its second quarter to end-September had fallen by around 3 percent from a 1 percent dip forecast previously, and said that it now expects fares in the second half to fall 2 percent.

Ryanair warned last week that the strikes were damaging business just as oil prices rose strongly and said on Monday that its unhedged fuel costs have jumped as oil prices rise to $82 a barrel, hitting 10 percent of volumes for its current financial year and the entire fuel bill of Austria’s Laudamotion, which it agreed to buy this year. Goodbody therefore estimated that every 1 percent of jet fuel price increase would take 3.5 percent off Ryanair’s full year 2020 forecast but only 2 percent off easyJet’s before any resulting adjustments to capacity growth or pricing. To cope with the lower fares, higher oil prices and strike costs, Ryanair trimmed its winter capacity by 1 percent, removing aircraft from its Eindhoven, Bremen and Niederrhein bases which will result in some more flight cancellations. It said it would seek to minimise job losses by offering pilots vacancies elsewhere and exploring unpaid leave and other options for cabin crew. Shares in Ryanair were 8.9 percent lower at 11.94 euros by 1032 GMT, their lowest level in almost two years, having fallen 27 percent since the industrial action ramped up in mid-July.

Too much oil? Texas boom outpaces supply, transport networks

A pumpjack is shown outside Midland-Odessa area in the Permian basin in Texas, U.S., July 17, 2018. REUTERS/Liz Hampton

MIDLAND, Texas (Reuters) – The west Texas drillers that drove the shale revolution have overwhelmed the region’s infrastructure with oil production -driving up costs, depressing regional oil prices and slowing the pace of growth. The U.S. government continues to forecast the country’s oil output rising to fresh record. But competition for limited resources in Texas is making it harder for shale producers to turn a profit and encouraging some to invest elsewhere. Texas is home to the Permian Basin, the largest U.S. oil field and the center of the country’s shale industry. In the past three years, production from the Permian has risen a whopping 1.5 million barrels per day (bpd) to 3.43 million bpd.All that oil means pipelines from the shale patch are full, so producers are paying more to transport oil on trucks and rail cars. Shortages of labor, water and even the fuel used in fracking are driving up production costs. At the same time, Permian producers are getting less for their oil, which in August traded as much as $17 a barrel below the U.S. crude benchmark. Sellers have to offer the discount to compensate for the higher transport costs. “We’re our own worst enemy,” said Ross Craft, chief executive of Approach Resources, a small west Texas oil producer which last year averaged about 11,600 barrels of oil equivalent daily output.

“We can drill, bring these wells on so quickly that we basically outpace the market. It is going to take a little bit of time,” he said, for the infrastructure to catch up to producers. Approach Resources is leaving some wells uncompleted. That means the firm drills the wells, but does not fracture the rock to produce the oil. Other shale producers are also leaving the oil in the ground, waiting for higher prices to make the drilling more profitable.

The number of uncompleted wells in the Permian jumped by 80 percent to 3,630 in August compared with a year earlier, according to U.S. Energy Department data. For the rest of the United States, uncompleted wells are up 10 percent from the same period a year ago.

Some companies are reducing the scope of their operations in the Permian. ConocoPhillips (COP.N) and Carrizo Oil & Gas (CRZO.O) each moved a Permian drilling rig to another oilfield, and Conoco idled a second, the companies have said. Noble Energy (NBL.N) also has cut back on its well completions and said it is moving some drilling resources to Colorado. Global Drilling Partners, a drilling contractor based in the Woodlands near Houston, was set to drill seven wells with a Permian operator this July, but that has dropped to two wells starting in December due to lack of pipeline takeaway, said John Hopkins, a managing partner at the company. “There will be a shift out of West Texas temporarily until they can solve their midstream problems,” he said. Companies are looking to boost their drilling in other fields in Texas, Colorado and Oklahoma, he said. Suppliers including sand and rail companies say they are hedging their bets by expanding elsewhere.

Unraveling a Tesla Mystery: Lots (and Lots) of Parked Cars

Groups of new vehicles are being detected in unexplained locations across the country. Evidence being posted online has raised questions about production, logistics, quality and even demand.


Elon Musk’s settlement of a securities-fraud case has removed a cloud over the company and its leader. But another remains: how its electric-car production is measuring up against Mr. Musk’s ambitious forecasts, a matter that a federal regulator is still investigating. One group of internet sleuths thinks it has found clues in plain sight, pointing to lots and garages in California, New Jersey, Arizona and other states where Tesla cars have been found parked in large numbers. The group’s efforts to document those sites could shed light on the delivery troubles that the Tesla chief has acknowledged, and reveal whether demand for the company’s cars is as high as he has suggested. Since July, Tesla has been parking anywhere from a couple of dozen to a few hundred cars at a lot in Burbank, Calif. In Lathrop, 70 miles east of San Francisco, Tesla has as many as 400 cars at an industrial site. A similar number turned up outside an industrial building nearby. At times cars have been seen entering and leaving the building, suggesting it may be a collection point or repair center. Hundreds more have been found in Antioch, northeast of San Francisco. On Thursday, a batch of about 100 Model 3s turned up in Bellevue, Wash. Smaller collections have surfaced in Chicago, Dallas, Las Vegas and Salt Lake City. The parked vehicles were discovered over the last two months by the amateur detectives, who in at least some cases are also investors betting that Tesla’s share price will fall. Some have flown drones over the parking lots to take pictures of the cars. At least one has access to a plane and shoots high-resolution photographs from the air. They post the photos on Twitter and have taken to calling themselves the Shorty Air Force. The sleuths — including three interviewed for this article, who asked not to be identified — say they feel Mr. Musk has not been candid about the company’s situation, particularly its sales. A Tesla spokesman, Dave Arnold, said by email that the large lots of vehicles were “logistics transit hubs” and added, “Anyone observing those lots will see a change from one day to the next.” (He said Monday that the cars in Bellevue were awaiting delivery. Photos posted online on Sunday show hoods open, possibly indicating maintenance work.)

Mr. Musk recently acknowledged that the company was having difficulty shipping cars to customers, saying Tesla was in “delivery logistics hell.”

He attributed the problem to a shortage of trucks to haul cars around the country. “That’s total nonsense,” said Mark B. Spiegel, a managing partner at Stanphyl Capital, which has a large position shorting Tesla. He is a vocal critic of the company and Mr. Musk on Twitter. “A quick search would reveal plenty of car hauler capacity. Perhaps Tesla doesn’t have the cash to pay for them.” The Auto Haulers Association of America is not aware of any shortage of car haulers, nor of any other automakers that are having trouble shipping new vehicles. “There’s quite a few carrier companies in California,” said Guy Young, the association’s general manager. A worrisome problem is Tesla built these cars and now doesn’t have customers willing to take them. Mr. Musk had long promised that the Model 3 would be available for as little as $35,000. But the least costly version available now starts at $49,000, and the price nears $60,000 if a customer wants the Autopilot driver-assistance software and other options.The company has said that more than 400,000 customers are waiting to buy Model 3 sedans, and that each paid a $1,000 deposit. Many who put down deposits may be waiting for the more affordable base model. Holding inventory is itself an issue for Tesla. The company has reported that it is selling almost all of the cars it is making. Each quarter, the number produced was close to the number delivered or in transit. Brian Johnson, an analyst at Barclays Capital who follows Tesla, said he suspected that the company had a mismatch between inventory and demand — that it had built more rear-wheel drive Model 3s than it could sell. He noted that Tesla was telling customers that it could deliver rear-wheel drive models in four weeks but that all-wheel-drive and pricier versions require waits of four to 12 months. “That suggests there is unmatched rear-wheel-drive inventory,” he said. In some cases, cars have been marked — with a bar-coded sticker or with grease pencil on the windshield — to indicate that they are inventory vehicles, meaning they have no customers awaiting them. Some markings indicate repairs required before the cars can be sold, like scratches, dents or components that don’t work.

Legal Experts: New Text Messages Show Kavanaugh Might Have Tampered with Witness

Supreme Court nominee Brett Kavanaugh told the Senate Judiciary Committee on Thursday that he first heard about the Deborah Ramirezallegation when it was published in The New Yorker on Sept. 23.

The thing is, one of the judge’s friends provided NBC with texts apparently showing that he knew about the claim before that, and tried to recruit people to defend him. This report has some lawyers and prominent pundits suggesting this constitutes witness tampering.

“And now we are also talking about witness tampering,” wrote Fordham law professor Jed Shugerman, an expert on American courts. Ramirez, one of Kavanaugh’s classmates at Yale, said he drunkenly stuck his penis at her during a party decades ago. The texts in the NBC story were provided by Kerry Berchem, a partner at the Akin Gump law firm. In the messages, Karen Yarasavage, another Kavanaugh friend, told her  that “Brett” asked her to deny Ramirez’s allegation on the record. She also wrote about communicating with “Brett’s guy.” Yarasavage declined to speak to NBC, but Bechem provided a statement. “I understand that President Trump and the U.S. Senate have ordered an FBI investigation into certain allegations of sexual misconduct by the nominee Brett Kavanaugh,” she wrote. “I have no direct or indirect knowledge about any of the allegations against him. However, I am in receipt of text messages from a mutual friend of both Debbie and mine that raise questions related to the allegations. I have not drawn any conclusions as to what the texts may mean or may not mean but I do believe they merit investigation by the FBI and the Senate.” Bechem said that she has been trying to get these messages to the FBI, but they haven’t contacted her. She said that Yarasavage claimed to turned over a copy of a wedding party photo to Kavanaugh. “I had to send it to Brett’s team too,” she reportedly wrote in a text. This photo shows seven people posing at a 1997 rehearsal dinner. Kavanaugh is second from right, and Ramirez on the far left. The wedding was between a pair of mutual friends. Obstensibly, the picture could be used to undermine the allegation, but Becham, who said she was at the wedding, said Ramirez seemed uncomfortable. She “clung to me,” and “never went near” Kavanaugh and his friends, Becham wrote in a Sept. 24th text to Yarasavage. She suggested that Ramirez was trying to stay away from him even in the photo. A spokesman for Sen. Chuck Grassley (R-Iowa), the Judiciary Committee Chairman, dismissed the texts as a political ploy by Democrats. George Hartmannsaid “the texts from Ms. Berchem do not appear relevant or contradictory to Judge Kavanaugh’s testimony.” “This appears to be another last-ditch effort to derail the nomination with baseless innuendo by Democrats who have already decided to vote no,” he said.

New reports question Kavanaugh’s credibility on past drinking behavior, when he knew about allegations

Texts suggest Supreme Court nominee knew of Ramirez accusations months before when he testified he had heard them
Getty Images Brett Kavanaugh testifies in front of the Senate Judiciary committee on Thursday.

Details emerged Monday about a bar fight that Supreme Court nominee Brett Kavanaugh was involved in while he was in college, as a separate report raised questions about when he knew about an accuser’s claim against him. NBC News on Monday reported that a college classmate of Kavanaugh has sought to contact the FBI investigation into his past, showing text messages from Kavanaugh and his friends sent before accusations from Deborah Ramirez were made public. According to the report, the text messages asked classmates to refute Ramirez’s claims that Kavanaugh exposed himself to her while in college, before a report detailing the accusation was published by The New Yorker in September. The classmate, Kerry Berchem, told NBC she has yet to talk with the FBI. The texts date back to July, NBC News reported. That could contradict Kavanaugh’s sworn testimony last week before a Senate committee, in which he said he had no knowledge of Ramirez’s allegations before the New Yorker story was published. A number of Democratic senators have accused Kavanaugh of lying under oath, both in his testimony last week regarding sexual assault allegations, and in his original confirmation hearing earlier in September. Separately, a pair of reports Monday detailed Kavanaugh’s role in a bar fight in 1985, when he was an undergrad at Yale. Citing a police report, the New York Times reported Kavanaugh threw ice at a bar patron, which escalated into a fight and the patron being hit in the head with a beer mug by one of Kavanaugh’s friends. The victim was treated and released from a hospital, and while police were called to the scene, there was apparently no arrest or charges filed. Bloomberg News cited the same incident in a report Monday, based on a statement released Sunday from one of Kavanaugh’s college friends, who said Kavanaugh cursed the patron and threw a beer in his face, inciting a brawl. “It was sort of a general feature of hanging out with Brett in college,” said the friend, Charles Ludington, a former Yale basketball player and current professor at North Carolina State University, according to Bloomberg. “When you’re having beers on a Friday or Saturday night, that was kind of Brett’s shtick. He was aggressive. He was belligerent.” In his testimony as well as in a Fox News interview last week, Kavanugh downplayed his drinking behavior. But Democratic critics of Kavanaugh have questioned his temperament and whether he was truthful in his testimony, including the question of whether he ever drank to the point where he blacked out. “I can unequivocally say that in denying the possibility that he ever blacked out from drinking, and in downplaying the degree and frequency of his drinking, Brett has not told the truth,” Ludington said in his statement. Ludington said he is willing to tell his story to the FBI investigators.

Dow ends about 190 points higher, S&P 500 closes near record as Nafta deal sparks rally

The Dow Jones Industrial Average on Monday finished the session with a triple-digit advance and the S&P 500 flirted with a fresh all-time high to start the first day of October and the fourth quarter after the U.S. and Canada reached an 11th-hour deal to revise the North American Free Trade Agreement. However, the Nasdaq Composite Index sat out the day’s rally, ending lower on the day. The Dow Jones Industrial Average DJIA, +0.73% rose 193 points, or 0.7%, to reach 26,651, powered by shares of Boeing Co., which delivered a nearly 70-point jolt to the price-weighted blue-chip index. The S&P 500 index SPX, +0.36% closed up 0.4% at 2,924, less than a half-percent short of its Sept. 20 closing high at 2,930.75, while the Nasdaq COMP, -0.11% finished down 0.1% at 8,037. All three benchmarks finished off their best levels of the day. The North American Trade Agreement forged with Canada, brings the U.S.’s northern neighbor into a new trilateral agreement that Mexico had agreed to weeks ago. The deal, known now as the U.S. Mexico Canada Agreement, or USMCA, must still be approved by Congress but was heralded by President Donald Trump as a “historic news.” Meanwhile, the Russell 2000 index RUT, -1.39% of small-capitalization companies, fell 1.5% to end at 1,673, marking its worst day since July 27th, according to FactSet data. The index has been a respite for investors hoping to lessen the impact of trade on their holdings because the revenue of its constituents aren’t directly hurt by trade because they tend to be domestically driven. In corporate news, shares of Tesla Inc. TSLA, +17.35% jumped after Chairman and Chief Executive Elon Musk settled a Securities and Exchange fraud probe over the weekend and said the company was nearing profitability, while shares of General Electric GE, +7.09% jumped after after the troubled industrial conglomerate said its chief executive officer, John Flannery, was being replaced after a little over a year in the role.

Trump Hails ‘Great Deal’ on US-Canada-Mexico Trade

Trump Hails 'Great Deal' on US-Canada-Mexico Trade

A new US trade pact with Canada and Mexico is “a great deal” for all three countries, President Donald Trump said on Monday, hailing the replacement of the old NAFTA deal which he had long railed against and threatened to cancel. “Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico,” Trump said on Twitter. “It is a great deal for all three countries.” The new pact known as the United States-Mexico-Canada Agreement (USMCA) “solves the many deficiencies and mistakes” in the 24-year-old North American Free Trade Agreement it replaces, Trump said after accomplishing one of his signature policy initiatives. USMCA “greatly opens markets to our Farmers and Manufacturers” while reducing trade barriers “and will bring all three Great Nations closer together in competition with the rest of the world. The USMCA is a historic transaction!” the president said. The rewritten deal “will result in freer markets, fairer trade and robust economic growth in our region,” a joint statement from US Trade Representative Robert Lighthizer and Canada’s Foreign Affairs Minister Chrystia Freeland said late Sunday after six weeks of intense talks and more than a year of fraught, broader negotiations. In the end, Canada and the United States overcame their differences after both sides conceded some ground to reach a deal covering a region of 500 million inhabitants and which conducts about $1 trillion in trade a year. “It’s a good day for Canada,” Canadian Prime Minister Justin Trudeau said Sunday night. Mexican Foreign Minister Luis Videgaray tweeted that the deal was good for his country “and for North America”. The political stakes were high. Trump, who pursues an “America First” policy on trade, needs to look strong heading into the November midterm elections where his Republican Party is fighting to keep control of Congress. Trudeau, for his part, did not want to be seen as caving in before next year’s general election in Canada. But on the other hand, it risked being frozen out of a US-Mexican deal reached in August. Early Monday a copy of the deal’s 34 chapters was posted on the US Trade Representative’s website. The pact can now be signed before Mexico’s President Enrique Pena Nieto leaves office December 1, the date that caused the last-minute flurry of activity. US law requires the White House to submit the text to Congress 60 days before signing — and officials barely made it by the midnight deadline.In order to reach the deal Canada agreed to open its dairy market further to US producers, and — in return — Washington left unchanged the dispute settlement provisions. Under Canada’s supply-managed dairy system, Ottawa effectively sets production quotas, which raises prices to consumers but provides farmers with a stable income. Tariffs of up to 275 percent have kept most foreign milk out of the Canadian market. Canada had opposed US demands to weaken or eliminate NAFTA’S dispute resolution mechanism, whose arbitration panels Ottawa used to resolve trade conflicts, particularly concerning its important lumber industry. In recent days warnings were mounting that time was running out to clinch a new deal, but a senior US administration official said the final rewrite is a “fantastic agreement”.Alongside changes to the dairy market in Canada, officials said it includes stronger protections for workers, tough new environmental rules, and updates the trade relationship to cover the digital economy and provides “groundbreaking” intellectual property protections. The AFL-CIO, a Washington-based federation representing millions of unionized employees, said it was too early to “make a final judgment” on the new deal’s impact on working people. One of the most important sectors concerns the auto sector, which NAFTA revolutionized. The US had sought increased American content for duty-free autos. The new text provides rules to encourage North American supply of components. While the pact should protect Mexico and Canada from Trump’s threatened 25 percent tariffs on cars, still pending are the duties on steel and aluminum, which officials said was on a “separate track”, handled by the Commerce Department. Under Sunday’s deal, the trade pact will remain in force for 16 years but will be reviewed every six years. US negotiators had been demanding reauthorization every five years.