Greece officially emerges from its bailout program on Monday, after eight years of cutbacks enforced in return for massive loans and an economic collapse on the scale of the Great Depression.
The exit is a welcome milestone. But it offers little assurance that the 19-country euro currency union has left behind its problems with debt. The huge debt pile in Greece and an even bigger one in Italy will remain a lurking financial threat to Europe that could take a generation to defuse. Europe’s debt problems have repeatedly raised fears over the past decade of a break-up in the euro, a worst-case scenario that would cause severe economic damage in the region and shake world financial markets and trade. In Greece, successive governments had borrowed heavily for three decades to fund generous spending on jobs given to political supporters, while tolerating widespread tax evasion and covering up budget shortfalls. All that blew up mightily in October 2009, when Greece admitted its budget deficit was much bigger than previously reported. Shocked investors no longer would risk loaning Greece money at affordable rates, forcing the government to turn to rescue loans from the other eurozone countries and the International Monetary Fund. The loans came with tough conditions: closing deficits, which led to aggressive tax increases and spending cuts; and a raft of reforms aimed at improving tax collection and the business climate in general. The economy, hit hard by spending cuts, shrank by a quarter.
Greek debt stands at €322 billion
All told, Greece now owes total debt of 322 billion euros ($366 billion), or over 180 percent of annual economic output. Of that, 256.6 billion euros is owed to eurozone creditors and 32.1 billion to the International Monetary Fund. In 2012, about 107 billion euros in debt was lopped off by inflicting losses on private bondholders. Monday is the day the third and last bailout program expires, meaning no more money is available. Greece will remain subject to quarterly visits by technical experts to make sure it is meeting agreed targets for public finances until the last bailout loan is repaid, in 2060. The other eurozone countries gave Greece enough cash to cover 22 months of financing needs and significantly eased its debt repayment terms. Greece needs to pass the quarterly reviews to activate that debt relief. But Greece will get no new reform requirements. Some experts say that the best way to help Greece would be for eurozone countries to write off a part of the loans altogether. But governments have balked at that. The bailouts were unpopular, particularly in Germany, and loan forgiveness would be a tough sell for leaders such German Chancellor Angela Merkel. George Pagoulatos, a professor at the Athens University of Economics and Business, says that in the end the country’s creditors may have to lower their expectations for how much Greece can save.pro Italy’s slow growth since joining the euro has meant that the eurozone’s third-largest member has failed to work down the huge debt burden it carried into the currency union when it joined as a founding member in 1999. It remains at an elevated 133.4 percent of GDP, the second highest after Greece. Officials associated with the coalition between the populist 5 Star Movement party and the anti-immigration League have made comments about leaving the euro and criticized the European Union’s rules limiting debt and deficits. That has raised fears of a new debt crisis.
Eurozone officials have set up ways to protect the currency union in a crisis. One is to have the European Central Bank offer to buy bonds of countries with excessive borrowing costs. But that requires signing up for a plan to reduce the public deficit, and that appears to be the last thing the current government would do. The most drastic alternative would be for Italy to leave the euro.
Guntram Wolff, director of the Bruegel research institute in Brussels, says Italy’s debt situation is different from Greece’s, in that most Italian bonds are in the hands of Italians. That means the governments’ debt payments stay at home to support spending and investment by Italians.
Sunday on CBS’s “Face the Nation,” former CIA director Leon Panetta said that President Donald Trump might have overstepped his authority when he revoked former CIA Director John Brennan’s security clearance. Panetta said “The president obviously has power with regards to security clearances. But his power is also limited by an executive order that makes very clear that when it comes to the revocation of a security clearance that it has to be based on national security issues not the politics of somebody, not what that person has said, not how they dress, not how they look but based on national security issues. This president is now going after people, and the indication that I saw is that he’s going to provide these names to the press office to use this issue when it’s a bad news day so that it can cover that particular news story. I think that’s a real misuse of not only security clearances I think it’s a misuse of the office of the president.” He continued, “There is an executive order that is in place, it was signed by Bill Clinton, it was updated by President Bush, it was followed by President Obama, and this president has to abide by that executive order unless he’s prepared to change it. That executive order lays out a process for revoking security clearances. This president is not above the law. He’s required to follow that executive order.” He added, “I think there are questions raised as to whether or not this president has followed the executive order and whether or not he’s provided due process to those that are going to have their security clearances revoked. Yes, president of the United States has power. But that power is limited by the Constitution and by the checks and balances in our system. I think the president has to adhere to those kinds of requirements.”
The relationship between the White House and U.S. intelligence community is “dangerously close to being permanently broken,” former director of the National Security Agency and CIA retired Air Force Gen. Michael Hayden said Sunday. In remarks on CNN’s “State of the Union,” Hayden decried the “whole tone, tenor and behavior of the administration.” Asked if President Donald Trump’s attacks on the intelligence community, including the revocation of the security clearance of ex-CIA chief John Brennan, has brought the relationship to the breaking point, Hayden was grim. “It’s dangerously close to being permanently broken, it is badly injured right now,” he said. “If we’re back in our old agencies, we’re trying to say to our workforce: ‘We have nothing to do with what John Brennan says on TV and we have nothing to do with what the president has done in response. We’ve got our basic lane, we’ve got to be blocking and tackling.'” “But that has to be harder and harder each day as the administration takes these kinds of actions.” “And frankly, although, John’s situation is a proximate cause for all of us signing letters and protesting, I think it’s kind of one additional straw that’s breaking the camel’s back,” he added. For his own part, Hayden said he wouldn’t mind if his clearance was also yanked. “If [Trump’s] not revoking my clearance gave the impression that I somehow moved my commentary to a direction more acceptable to the White House, I would find that very disappointing and frankly unacceptable.”
(CNN)President Donald Trump on Sunday compared the special counsel investigation to McCarthyism, saying Robert Mueller made the late Sen. Joseph McCarthy “look like a baby.” “Study the late Joseph McCarthy, because we are now in period with Mueller and his gang that make Joseph McCarthy look like a baby! Rigged Witch Hunt!,” Trump tweeted. NYT: White House counsel McGahn cooperated ‘extensively’ with special counsel probe McCarthy led a Cold War-era inquisition of alleged Communists who he claimed had infiltrated American governmental institutions. The Wisconsin Republican’s assertions, famously voiced in a speech in 1950, contributed to the paranoia and fear known as “the Red Scare.” A special Senate Foreign Relations subcommittee investigated McCarthy’s initial claims about Communists infiltrating the State Department and found them to be “a fraud and a hoax.” Upon becoming chairman of the Senate Government Operations Committee’s subcommittee on investigations in 1953, McCarthy expanded his probes into alleged communist activity. In 1954, he began investigating the US Army. The three months of Army-McCarthy hearings shattered the senator’s image and led to his censure by the Senate. The President’s comparison between the special counsel’s investigation into Russian interference in the 2016 presidential election and the trials of McCarthyism was one of a series of tweets that lashed out at the probe Sunday morning. Trump directed particular ire at a Saturday New York Times report that White House counsel Don McGahn has been cooperating extensively with the special counsel.Michael Hayden, a former director of the CIA and National Security Agency, was asked about Trump’s comparison of Mueller to McCarthy on CNN’s “State of the Union.”
Ankara (AFP) – Turkish President Recep Tayyip Erdogan declared Saturday that his country would not be cowed by the United States, his latest broadside in the bitter feud between Ankara and Washington. The two NATO members are at odds over Turkey’s detention of an American pastor, which has triggered a trade row and sent the local currency the lira into a tailspin. “We will not surrender to those who present themselves as a strategic partner while at the same time trying to make us a strategic target,” Erdogan said at a congress of his ruling Justice and Development Party (AKP).”Some people threaten us with economy, sanctions, foreign currency exchange rates, interest rates and inflation. We know your shenanigans and we will defy you.” At the end of congress, delegates unanimously re-elected Erdogan as head of the AKP, the state news agency Anadolu reported. Last week, US President Donald Trump said he had doubled the tariffs on aluminium and steel tariffs from Turkey, prompting Ankara to sharply hike tariffs on several US products. And Turkey on Friday threatened to respond in kind if Washington imposed further sanctions, while a court rejected another appeal to free pastor Andrew Brunson, who has been held for almost two years on terror charges. The lira has nosedived against the dollar, dropping as much as 20 percent on one day last week. It sunk to a low of well over seven to the dollar earlier this week but was trading at just over six to the dollar on Friday — a loss of 40 percent since the start of the year. The collapse of the currency has been blamed both on the tensions with the United States and Erdogan’s increasing hold on Turkey’s economy and his refusal to allow the central bank to raise interest rates. Meanwhile, Erdogan told the AKP congress that Turkey would press on with and expand its cross-border military operations. Turkey sent troops into northern Syria two years ago to fight against the Kurdish People’s Protection Units (YPG). The YPG forms the backbone of the Syrian Democratic Forces (SDF), the Kurdish-Arab alliance that has received extensive backing from the US-led coalition in the battle agains the Islamic State group. But Turkey accuses the YPG of being the Syrian branch of the Kurdistan Workers’ Party (PKK), a rebel group blacklisted by Ankara and its Western allies. The Turkish army has also increased its strikes against PKK rear bases in the north of Iraq in the past few months.
Washington (CNN)White House counsel Don McGahn has cooperated extensively with special counsel Robert Mueller’s probe, participating in several interviews spanning 30 hours over the last nine months, The New York Times reported Saturday. McGahn has provided “detailed accounts about the episodes at the heart of the inquiry into whether President Trump obstructed justice,” including providing information that the Mueller team otherwise would not have learned about, the Times reported, citing a dozen current and former White House officials and other individuals briefed on the matter. CNN has reported that McGahn was interviewed by Mueller’s team last last year. McGahn’s decision to cooperate was partly due to the fact that the President’s initial legal team had decided to fully cooperate with Mueller’s investigation into Russian interference in the 2016 presidential election, believing their client had nothing to hide and they could bring a quick end to the probe, the newspaper reported. But McGahn became concerned that the President planned to set him up to be held responsible for any potential illegal incidents of obstruction, the Times reported, citing to people close to him. So the White House counsel and his attorney came up with a strategy to cooperate as extensively as possible with the special counsel in order to prove that there was no wrongdoing by McGahn, the newspaper reported. The Times reported that McGahn has told investigators that he has not witnessed the President take any action that exceeds “his legal authorities.” The newspaper also reported that, according to a person with knowledge of the President’s thinking, Trump incorrectly thought that McGahn would act as a personal attorney would and solely defend the President’s interests in interactions with the special counsel team. But McGahn laid out how Trump “tried to ensure control of the investigation, giving investigators a mix of information both potentially damaging and favorable to the president,” the Times’ report said. In response to a request for comment from the Times, White House press secretary Sarah Sanders said, “The president and Don have a great relationship” and Trump “appreciates all the hard work he’s done, particularly his help and expertise with the judges, and the Supreme Court” nominees. Shortly after the Times published its report on Saturday, Rudy Giuliani, the President’s lawyer, called on Mueller’s team to wrap up its investigation and file a report on its findings. “Time for Mueller investigation to file report,” Giuliani wrote on Twitter. “We will release ours. Don’t interfere with election like Comey.The President had nothing to do with Russians. He didn’t obstruct an investigation. 1.4 million documents and 32 witnesses no privilege raised.” Asked his view about the level of McGahn’s cooperation with Mueller’s team, CNN legal analyst Ross Garber told CNN anchor Fredricka Whitfield on Saturday, “It really is extraordinary.” “To give up those privileges so early, I was frankly surprised, and it appears it may come back to hurt the President and perhaps the presidency,” Garber added. Garber said later, “Let’s be clear: he (McGahn) is a witness. He went in and sat with prosecutors and the agents, and he provided information. The White House counsel is a witness. And probably a very important one.”
Rates for home loans tumbled in line with the broader bond market, even as the housing market’s woes threatened to become a headwind for the entire U.S. economy. The 30-year fixed-rate mortgage averaged 4.53% during the Aug. 16 week, down six basis points, according to the weekly data from mortgage provider Freddie Mac. The 15-year fixed-rate mortgage averaged 4.01%, down from 4.05%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.87%, down three basis points. Those rates don’t include fees associated with obtaining mortgage loans. Mortgage rates follow the path of the 10-year U.S. Treasury note TMUBMUSD10Y, -0.22% , which has tumbled over the past week as investors flocked to safe-haven assets in the wake of the Turkey currency crisis. Bond yields decline as prices rise. Lower rates are a boon for borrowers and should help jump-start housing activity. But there’s been so little to buy for so long that many would-be buyers are simply giving up. And that means the sluggish housing market is no longer just a story unto itself. Analysts now believe housing will drag down overall economic growth in the near term. In a research note out Thursday, Doug Duncan, chief economist for Fannie Mae, Freddie’s counterpart, explained: “Housing continues to drag on growth due to lackluster home-building activity, home sales, and brokers’ commissions.” The stagnant housing market may also be impacting the labor market. The percentage of job seekers relocating for new employment was at longtime lows earlier this year, said outplacement consultancy Challenger, Gray & Christmas on Thursday. Just over 10% of job seekers relocated for work in the first six months of 2018, compared with an average of 19% over the previous decade. The more Americans are on the move, the more local economies get a “halo effect” from home sales, according to Daren Blomquist, senior vice president at Attom Data Solutions. As Blomquist puts it, higher home sales activity “bodes well for local real-estate agents, home improvement stores, moving companies and others.”
About 75 members of the intelligence community are taking a public stance against President Trump’s unprecedented decision to revoke former CIA Director John Brennan’s security clearance. In the 48 hours following Trump’s announcement that he would strip Brennan’s clearance — which came after Brennan had repeatedly spoken out publicly against the president — 15 former senior intelligence officials from bipartisan presidential administrations signed onto an open letter condemning the move. They argued that the president’s decision is a transparent “attempt to stifle free speech.” The letter first went public on Thursday with 12 names, including former CIA Directors Michael Hayden, Leon Panetta, and David Petraeus, as well as former Director of National Intelligence James Clapper. It has since been updated to include three additional signatories.
(Reuters) – U.S. President Donald Trump said on Friday he has asked the U.S. Securities and Exchange Commission to study the impact of allowing companies to file reports with the financial regulator every six months instead of every quarter. “Without any doubt that reduces the transparency for investors and they will be left in the dark for longer. Such a strategy is a great recipe to create the biggest loop hole in the financial system. Moreover, under such conditions, any blunder would create a serious threat not for the markets only but for the economy as well.” “We cannot compare the US markets with other markets because of the sheer size of it. From an investment perspective, you want to know on a regular basis what is going on with the company and this enables you to make more timely decisions.” “Delaying the reporting process to six months does make the stocks less sensitive because there is only limited information available. But when there is a surprise, it tends to bring a much bigger move for the stocks as compared to a situation where they report on a quarterly basis.” “Corporations have long complained about the costs of quarterly filing and that tends to make their attention very short term. So people say that if they get away from quarterly filings and got to somewhat longer filings, that would help companies have a longer-term perspective.
“Unfortunately, research shows that’s not exactly true. Most research suggests that companies that are well-managed and have a longer-term perspective do better anyway and are able to manage their quarterly reports. Furthermore, you give investors less information on what’s going on so there’s a risk of injecting volatility in your stock price because investors are not guided the right way. You’re more likely to surprise investors when you’re reporting just twice a year instead of quarterly.”
“Not happy with that at all … I believe that just because you have to report quarterly doesn’t mean you should have to act quarterly. If you can’t explain your process and your goals as a company and adequately say why the results came out the way they did and you feel compelled to play some sort of accounting games to make it seem like every quarter is better than the last, this is a stock I am not interested in owning.” “Shareholders deserve to have a report every quarter on how the company is doing.” “I don’t believe companies should act in the short-term, but I also don’t believe that just because you report quarterly means you are acting in the short term to make things come out nice. “There’s long been a push for less short-termism in running publicly traded companies and that’s where the debate begins. Do you run a company in a more efficient manner if you’re not thinking about having to talk about your results every 90 days?” “The difficulty in making better long-term decisions away from a quarterly reporting cycle certainly stands out as being beneficial, so we’ll see how it develops. It’s not something that can be done with an executive order, but it’s certainly a conversation that started years ago and one that is certainly getting some traction in the marketplace today.” “It’s a long-term issue that has been around certainly for years, and the whole argument coalesces around better corporate planning for the future, making better long term decisions if you’re not strapped with reporting our results every 90 days. There is credible possibility that you end up making short-term decisions more than long-term decisions because of the nature of your reporting cycle. I think there are studies that prove that that’s probably not a positive.”
“The other side of that argument would be that the ability to know how things are actually going at a company on a regular basis, you probably are disenfranchised especially as an individual versus an intuitional investors that probably has the ability to get access to management on a more frequent basis.” “He is not the first person to bring this up, It’s been talked about for at least a decade.” “I don’t think it’s a bad idea. What I think is the challenge is that it will be a hard to get people to change to do that, because investors and certainly shorter-term traders want that information. They want to know how companies are doing on a quarterly basis.” “In theory, it should probably lower market volatility, because the most volatile times of the year are when quarterly earnings start coming out. If you had that only twice the year instead of four times a year, overall market volatility would decline.” “The main thing is that this is a big, gigantic fundamental shift in the way business works in this country, in the way capital markets work. It would be like trying to turn around the Queen Mary in a swimming pool.”“This is not something he can change with an executive order.”
Venezuela’s president Nicolas Maduro announced on Friday a single exchange rate pegged to his socialist governments petro cryptocurrency, effectively devaluing by 96 percent in a move economists said would fan hyperinflation in the chaotic country. In one of the biggest economic overhauls of Maduro’s five-year government, the former bus driver and union leader also said he would hike the minimum wage by over 3,000 percent, boost the corporate tax rate, and increase highly-subsidized gas prices in coming weeks. “I want the country to recover and I have the formula. Trust me,” Maduro said in a nighttime speech broadcast on state television. But economists expressed doubts that Venezuela’s cash-strapped government, which faces U.S. sanctions and has defaulted on its bondholders, would succeed. Venezuelans will see their meager salaries further eroded and companies will struggle with major increases to both taxes and the minimum wage, they said. Amid this aggressive devaluation and monetary expansions due to salaries and bonuses, we are expecting a much more aggressive stage of hyperinflation. All the more so in a context where the elimination of excessive money printing is not credible. The worst of all worlds, said Venezuelan economist Asdrubal Oliveros of consultancy Ecoanalitica. The International Monetary Fund has predicted that inflation in Venezuela would hit 1 million percent this year. After a decade-long oil bonanza that spawned a consumption boom in the OPEC member, many poor citizens are now reduced to scouring through garbage to find food as monthly salaries amount to a few U.S. dollars a month. Hundreds of thousands of Venezuelans have emigrated by bus across South America in one of the region’s worst migration crises.
The U.S. will be a safe haven — and besides, the American stock market is attractive
There’s been no shortage of crises. Trade wars and the collapse of the Turkish lira. One market’s crisis is another’s opportunity, and Europe’s shaky currency union could send U.S. stocks soaring … eventually. In a world of contagion, how could European currency turmoil possibly send U.S. stocks higher? And when might this happen? Imagine living in Europe right now. The Turkish lira just lost about 25% in a matter of days, Brexit continues to loom, but the biggest problem might be Italy. And, yes, your bank may or may not be invested in Turkey. Would you rather own euros or the dollar? Would you rather own European stocks denominated in euros, or dollar-based blue-chips? The smart European money is probably leaving the region, and it’s got to be going somewhere. U.S. stocks are probably overpriced, but when forced to pick a poison, the U.S. looks much less dangerous and is therefore more appealing. The chart below — along with some commentary — was published in my May 30 MarketWatch column.
The U.S. Dollar Index DXY, -0.48% followed the green arrow and reached the upside target around 97. As the weekly bar chart shows, the center line of a nearly decade-long trend channel is just below 97.
While above 96, the dollar may continue higher, but there is a good chance that the U.S. dollar will drop back below 97 and retrace some of its recent gains. If the dollar retreats from the 96-97 range, the euro currency will catch a break and slow the migration of euros into the U.S. Regardless of whether the eurozone can postpone the seemingly inevitable (we’ve seen cans kicked down the road before), the S&P 500 Index SPX, +0.33% Dow Jones Industrial Average DJIA, +0.43% Nasdaq COMP, +0.13% and Russell 2000 Index RUT, +0.43% may not even need a euro crisis to soar higher. On July 17, the S&P 500 activated a chart pattern with massive bullish potential. The chart pattern, and what it takes to confirm or deny its potential run, is discussed here.
ISTANBUL (Reuters) – Moody’s cut Turkey’s sovereign credit rating deeper into “junk” territory on Friday, citing a weakening of public institutions and the related reduction in the predictability of policy making in a country which is facing a currency crisis. People change money at a currency exchange office in Istanbul, Turkey August 17, 2018. REUTERS/Murad Sezer“That weakening is exemplified by heightened concerns over the independence of the central bank, and by the lack of a clear and credible plan to address the underlying causes of the recent financial distress,” the agency said in a statement. Moody’s lowered the rating to Ba3 from Ba2 and changed its rating outlook to negative in a move which came on the heels of a downgrade by S&P. “The tighter financial conditions and weaker exchange rate, associated with high and rising external financing risks, are likely to fuel inflation further and undermine growth, and the risk of a balance of payments crisis continues to rise,” it said. The lira has lost nearly 40 percent of its value against the dollar this year, sparking a sell-off in emerging market currencies and weighing on global stocks. The crisis has been precipitated by investor alarm about President Tayyip Erdogan’s influence over monetary policy. The sell-off has been fueled by a deepening dispute between Turkey and the United States, with Washington imposing sanctions and vowing to continue to do so as it seeks the release of a U.S. pastor on trial in Turkey.
NEW YORK/WASHINGTON (Reuters) – U.S. President Donald Trump on Friday said meetings with corporate executives prompted him to ask the U.S. Securities and Exchange Commission (SEC) to study letting public companies file financial reports every six months instead of every quarter.
“I’d like to see twice, but we’re going to see,” Trump later told reporters when asked about his tweet. He said outgoing PepsiCo Inc ( Chief Executive Indra Nooyi had brought it up to him. “Many market participants, as well as the Business Roundtable which we are a part of, have been discussing how to better orient corporations to have a more long-term view,” Nooyi said in a statement emailed to Reuters. “My comments were made in that broader context, and included a suggestion to explore the harmonization of the European system and the U.S. system of financial reporting. In the end, all companies have to balance short-term and long-term performance.” Some investors on Friday said quarterly disclosures are essential for investment decisions and supported richer U.S. stock valuations, and that shares could become more volatile if companies report twice yearly. But executives and other investors said Trump’s argument made sense because it would cut costs of compiling and filing results and remove short-term distractions for those running companies.The SEC is an independent agency, and the president cannot force it to implement rule changes. Any move to scrap quarterly filings would have to be voted on by the SEC’s sitting commissioners, who are political appointees. “It’s cockamamie idea. For starters, what’s the difference between six and three months? … Either way we’re talking about a very short-term period,” Yardeni added.
LONDON (Reuters) – Turkey and its firms face repayments of nearly $3.8 billion (£2.99 billion) on foreign currency bonds in October as the country struggles with a plunging lira that has lost more than a third of its value since the start of the year. Emerging market (EM) investors have been worried about Turkey’s external debt burden and the ability of its firms and banks to repay after a boom in hard currency issuance to help finance a rapidly growing economy. For companies, the cost of servicing foreign debt has risen by a quarter in lira terms in the past two months alone. “Turkey’s external financing requirements are large,” Jason Daw at Societe General wrote in a note to clients. “It has the highest FX-denominated debt in EM and short-term external debt of $180 billion (£141.6 billion)and total external debt of $460 billion (£361.9 billion).” Calculations by Societe General show that Turkish firms will face $1.8 billion (£1.4 billion) of hard-currency denominated bonds maturing by the year-end while $1.25 billion of government bonds will come due. Additionally, a total of $2.3 billion (£1.81 billion) in interest must be paid. The heaviest month for repayments is October, when $3 billion (£2.36 billion) in principal and $762 million (£599.5 million) interest are due. “Principal and interest payments should be closely watched to year end – it is 25 percent more costly for the corporate sector to repay their obligations compared to June given FX depreciation,” Daw wrote. One mitigating factor may be that much of the short-term external debt was in instruments such as bank loans and trade credits, which could be smoother to restructure or roll over than attempting to do so on bond markets, Daw added. Data from LPC showed that about $7 billion (£5.5 billion) of loans are due to mature until the end of the year, with more than 90 percent of those being bank loans. A number of lenders such as Akbank, Turk Ekonomi Bankasi and Turk Eximbank are in the market attempting to refinance loans. However, international banks are unlikely to make any decisions before ratings agencies react, with many predicting the lending boom would grind to a sudden halt. “Foreign financiers, whether they exist as banks or bond investors, are re-assessing the outlook and related repayment prospects,” said Jurgen Odenius, economic counsellor at PGIM Fixed Income. “Western European banks from Spain and France are particularly exposed, with over half of the debt owed to them.” Shares in some of Europe’s major banks have been hammered over the last week as markets fret over their exposure to Turkey. Odenius also points to the fallout from Turkey’s financial system and the corporate sector being effectively short dollars, calculating that net foreign exchange liabilities (NFL) of the central bank and commercial banks combined amounted to $27 billion (£21.2 billion) at the end of June. “While that is undoubtedly a manageable figure, these liabilities only pertain to foreign lenders,” Odenius wrote in a note to clients. “Including the $147 billion in dollar deposits by resident households and firms, the ‘adjusted’ NFL spirals up to nearly $175 billion — an undoubtedly less manageable figure.” With President Tayyip Erdogan’s administration shunning orthodox monetary policy and highly reluctant to raise interest rates to contain inflation at over 15 percent, markets are also closely watching how the Turkish state goes about refinancing its debts. Erdogan’s government has adamantly rejected speculation that it may have to seek support from the International Monetary Fund (IMF). Qatar has pledged about $15 billion (£11.8 billion) but details have been scant. “Rather than sticking with the approach taken by numerous other countries – including Argentina earlier this year – by raising interest rates and seeking some form of IMF support, Turkey has shunned both in a very public manner,” wrote Mohamed El-Erian, chief economic adviser at Allianz“Unless it changes course, the government risks much wider damage – and not just in Turkey.”
NEW YORK (Reuters) – Walmart Inc (WMT.N) posted its best quarterly U.S. sales growth in a decade and upped full-year sales and profit outlooks on Thursday, sending shares surging as a jump in online and grocery purchases showed it can hold its own against Amazon.com Inc (AMZN.O). The world’s largest retailer is known for its sprawling stores, a factor that could have worked against it as shoppers migrate online. But Walmart is also the top U.S. grocer, providing a lure for customers to visit stores, where they may also make other impulse buys. Walmart has also overhauled its website and worked to use physical locations as distribution points for online orders of groceries and other goods, helping retain buyers who increasingly expect quick, cheap shipping. Consumers spent more on categories like grocery, apparel and seasonal merchandise in the second quarter, helping sales rebound after a slow start in April. Walmart has recorded four straight years of U.S. growth, unmatched by any other retailer. “We saw strong performance in fresh food,” U.S. Chief Executive Greg Foran said on an earnings conference call, praising sales in produce, meat and bakery. Grocery sales rose the most in nine years. Walmart’s U.S. e-commerce growth ticked higher than previous quarters, driven by a website redesign and continued expansion of online grocery offerings.Sales growth has come at some cost, however, with the company citing continued margin pressures driven by cutting prices, higher freight costs due to a shortage of truck drivers and e-commerce investments. E-commerce sales grew 40 percent in the quarter, up from 33 percent growth in the previous period, and the retailer said U.S. online sales are on track to rise 40 percent for the full year. Walmart now offers curbside pickup of online grocery orders in 1,800 U.S. stores, and the service is bringing in new customers, Biggs said. Sales at U.S. stores open at least a year rose 4.5 percent, excluding fuel price fluctuations, higher than analyst forecasts of 2.38 percent, according to Thomson Reuters I/B/E/S. Total revenue increased 3.8 percent to $128 billion, beating estimates.
The oil industry is shelling out billions of dollars in a series of acquisitions in the Permian Basin, the hottest oilfield in the world.
The rush of deals underscores how eager companies are to get a foothold in the region. Rapid technological advances have dramatically slashed the cost to frack in the Permian. Production is spiking so much that Texas is on track to surpass Iran and Iraq, both OPEC members. That would make Texas No. 3 in the world if it were a country. “It’s the most desired region in the United States, if not globally,” said Michael Tran, director of global energy strategy at RBC Capital Markets.
Permian could rival legendary Saudi field
RBC estimates that Permian production will more than double over the next seven to 10 years, to about 6.5 million barrels per day. That’s more than the entire United States produced in early 2012. “From a price perspective, the Permian Basin is extremely attractive,” Tran said. “Nobody doubts the rock.” The Permian boasts unique geology that allows oil companies to drill more than one layer of the earth at the same time. Wells can be profitable below $40 a barrel. That’s well below today’s price of about $65 a barrel. And some executives believe the amount of Permian oil rivals Saudi Arabia’s legendary Ghawar Field, the world’s largest conventional oilfield.
But major obstacles loom in the booming Permian Basin, at least in the short run. Because of hyper growth, the Permian is quickly running out of pipelines to move oil out of the region.
“The pipeline constraints are real, but they are transitory,” said Vincent Piazza, senior energy analyst at Bloomberg Intelligence. “The infrastructure has had a difficult time keeping up with the explosive growth.
More pipelines are coming, but they will take time. Clay Seigle, managing director of oil at research firm Genscape, warned of “significant challenges” for transporting oil out of the Permian until the second half of next year. At the same time, Permian producers are feeling sticker shock as prices spike for talent, supplies and services. Oil executives are betting they can maximize their chances of success by working together. The recent deals “signal a clear shift in the US shale industry towards consolidation as players seek operational and capital efficiencies,” analysts at research firm Rystad Energy wrote in a report on Wednesday.
ALEXANDRIA, Va. (Reuters) – Paul Manafort had “a huge dumpster of hidden money” abroad, a prosecutor said on Wednesday, urging a jury to convict U.S. President Donald Trump’s former campaign chief on financial fraud charges based more on a paper trail of evidence than the testimony of a former protege. Special Assistant U.S. Attorney Greg Andres gave his closing statement in federal court in Alexandria, Virginia, where Manafort is on trial on tax and bank fraud charges, along with failing to disclose foreign bank accounts. The trial is the first to come out of Special Counsel Robert Mueller’s investigation of Russian meddling in the 2016 presidential election. The charges involve tax and bank fraud, not possible collusion between Russia and Donald Trump’s campaign for president. A Manafort conviction would undermine efforts by Trump and some Republican lawmakers to paint Mueller’s Russia inquiry as a political witch hunt, while an acquittal would be a setback for the special counsel. The star witness against Manafort was seen as Rick Gates, his former right-hand man, who was indicted along with Manafort but pleaded guilty and agreed to cooperate with the government. The defense has portrayed Gates as a lying thief who had his hand in the “cookie jar” and was only trying to reduce his own sentence, noting Gates will be allowed to argue for probation even though he admitted to embezzling hundreds of thousands of dollars and being involved in Manafort’s alleged crimes. Andres argued that while Manafort did not “choose a Boy Scout” as his associate, Gates’ testimony was corroborated by other evidence, including nearly 400 exhibits, and a series of financial professionals who took the stand for the prosecution. “The star witness in this case is the documents,” Andres told the jury. “That wasn’t a cookie jar,” he added, referring to the tens of millions of dollars Manafort had overseas. “It was a huge dumpster of hidden money in foreign bank accounts. Prosecutors say Manafort, 69, tried to mislead bankers with doctored financial statements in 2015 and 2016 to secure more than $20 million in loans and failed to pay taxes on more than $15 million that he earned as a political consultant in Ukraine. Defense lawyers decided not to call any witnesses in the trial, and Manafort, a veteran Republican political operative, did not testify in his own defense. In its closing argument, defense counsel argued that Manafort had been transparent with the banks and that any issues with his financial situation were well known to them before they extended him the loans. They also sought to emphasize the idea that Manafort did not knowingly break the law — a requirement for conviction — and was rather failed by the bookkeepers, accountants and other professionals in whom he trusted his financial affairs. If found guilty on all 18 charges by the 12-person jury, he could face eight to 10 years in prison, according to sentencing expert Justin Paperny. Manafort also faces a second trial in September in Washington, where he is accused of failing to disclose lobbying for Ukranian politicians, among other crimes.
Trump hails dollar’s strength; says he’s in ‘no rush’ on Nafta
President Donald Trump on Thursday ramped up attacks on the media, as he hailed the strength of the U.S. dollar and told members of his cabinet he’s in “no rush” on a new North American Free Trade Agreement. On the same day about 350 newspapers ran editorials decrying Trump’s description of the media as the “enemy of the people,” the president tweeted “THE FAKE NEWS MEDIA IS THE OPPOSITION PARTY.” The Boston Globe called on newspapers to publish the editorials — prompting a Trump charge of “collusion” — and Trump singled out the paper in a separate tweet, incorrectly saying it was sold by the New York Times for $1. The Globe was sold to Boston Red Sox owner John Henry for $70 million.
THE FAKE NEWS MEDIA IS THE OPPOSITION PARTY. It is very bad for our Great Country….BUT WE ARE WINNING!
— Donald J. Trump (@realDonaldTrump) August 16, 2018
The Boston Globe, which was sold to the the Failing New York Times for 1.3 BILLION DOLLARS (plus 800 million dollars in losses & investment), or 2.1 BILLION DOLLARS, was then sold by the Times for 1 DOLLAR. Now the Globe is in COLLUSION with other papers on free press. PROVE IT!
— Donald J. Trump (@realDonaldTrump) August 16, 2018
There is nothing that I would want more for our Country than true FREEDOM OF THE PRESS. The fact is that the Press is FREE to write and say anything it wants, but much of what it says is FAKE NEWS, pushing a political agenda or just plain trying to hurt people. HONESTY WINS!
— Donald J. Trump (@realDonaldTrump) August 16, 2018
About a month after saying a strong dollar put the U.S. at a “disadvantage,” Trump tweeted “money is pouring into our cherished DOLLAR like rarely before.” Larry Kudlow, who heads the White House National Economic Council, offered a similar take on the greenback, telling CNBC that the strength of the dollar was a “sign of confidence” in the economy. In July, Trump told the same network that “our currency is going up. I have to tell you, it puts us at a disadvantage.” The U.S. Dollar Index DXY, -0.10% , a measure of the currency against six of its rivals, is up about 5% this year. Our Economy is doing better than ever. Money is pouring into our cherished DOLLAR like rarely before, companies earnings are higher than ever, inflation is low & business optimism is higher than it has ever been. For the first time in many decades, we are protecting our workers!
— Donald J. Trump (@realDonaldTrump) August 16, 2018
Trump told cabinet members at the White House he’s not in a rush to forge a Nafta deal, after U.S. Trade Representative Robert Lighthizer said he was hopeful for a breakthrough in the next few days. “If we don’t have a breakthrough, don’t do the deal,” Trump said. Separately, the president raised the case of Pastor Andrew Brunson, who’s been detained by Turkey. Treasury Secretary Steven Mnuchin told Trump that the administration is planning more sanctions against Turkey if Brunson isn’t released quickly. Brunson denies charges of espionage and Trump called him “a very innocent man.” The president also tweeted that the singer Aretha Franklin, who died Thursday, was a “great oman” who “will be missed.”
Trump asked Kudlow in the Cabinet meeting how the U.S. economy was doing compared to China’s economy. “The latest batch of numbers from China,” Kudlow said, “their economy is just heading South.” He continued, “Right now, their economy looks terrible.” Kudlow commented that retail sales were down and business investment was “collapsing.”“Mostly, I think investors are moving out of China because they don’t like the economy and they’re moving to the USA because they like our economy,” he told the room. “I would just say right now, their economy looks terrible.”“The single biggest story this year is an economic boom that is durable and lasting that most people thought was impossible, and they were wrong,” he said in closing. A few months back the U.S. and China were sending trade delegations back and forth between China and the U.S. to negotiate trade agreements between the two nations. That appeared to break down to some extent as the two nations began trading tariffs warnings to one another. The U.S. has imposed tariffs on tens of millions in Chinese imports with President Trump’s warning of tariffs on hundreds of millions more in Chinese imports to the United States. China has issued retaliatory tariffs on U.S. exports that have appeared to be aimed at U.S. industries that could have a political effect on the U.S. president. Thursday morning, news broke that China will send an envoy of lower level trade officials to the U.S. for meetings with U.S. officials. Meetings have been set for late August and will center around “issues of mutual
Here are the charges the former Trump campaign boss faces as the case goes to the jury
Paul Manafort’s fraud and conspiracy trial is rounding the final bend. Prosecutors and defense attorneys on Wednesday delivered their closing arguments to jurors on the 12th day of the criminal trial against President Donald Trump’s former campaign chairman. From there, jurors in the U.S. District Court case in Alexandria, Va., will begin considering the 27 witnesses and more than 360 exhibits presented by prosecutors. A verdict in the trial — the first borne of charges from special counsel Robert Mueller’s Russia probe — could be coming as soon as this week. Manafort has pleaded not guilty to 18 counts lodged by Mueller’s team. Here are the charges he faces:
Subscribing to false income tax returns
Number of counts: 5
Maximum prison sentence per count: 3 years
In an indictment unveiled in February against Manafort and his former business partner, Rick Gates, the special counsel laid out what it described as a years-long “tax scheme” intended to lower Manafort’s tax bills by hiding his income from U.S. authorities. Manafort worked for years in the 2000s as a consultant for former Ukraine President Viktor Yanukovych’s pro-Russian Party of Regions. The tens of millions of dollars he earned for this work were put in foreign accounts, and Manafort used that money to fund a lavish lifestyle primarily through international wire transfers, Mueller alleges. Manafort is accused of failing to report this income on his income tax returns, and falsely claiming he had no authority over those foreign accounts.
Failing to file foreign bank account reports
Number of counts: 4
Maximum prison sentence per count: 5 years
From 2011 to 2014, Manafort allegedly failed to file foreign bank account reports, known as FBARs, with the Treasury Department to disclose his control over his overseas accounts.
Bank fraud and bank fraud conspiracy
Number of counts: 4 counts of bank fraud; 5 counts of bank fraud conspiracy
Maximum prison sentence per count: 30 years
During the trial, prosecutors alleged that Manafort resorted to bank fraud to obtain loans for himself after Yanukovych was deposed as the leader of Ukraine in 2014, which dried up Manafort’s lucrative stream of income. Manafort and Gates are accused of defrauding U.S. banks and other lenders by lying about Manafort’s income, debt and the nature of his real estate properties. Prosecutors also allege Manafort and Gates knowingly doctored financial documents. One of Manafort’s accountants testified under immunity during the trial that she had been asked to misrepresent Manafort’s income by Gates. The indictment alleges Manafort falsely claimed that a New York City condo was “owner-occupied” instead of rented in order to get more money when applying for a $3.4 million mortgage in late 2015. It also says Manafort defrauded another lender by falsely overstating the 2015 income of one his businesses by more than $4 million, among other charges.
(Bloomberg) — Special Counsel Robert Mueller doesn’t have to shut down his Russia investigation in the weeks before November’s congressional elections despite claims by President Donald Trump’s lawyers that he faces a Sept. 1 deadline, according to current and former U.S. officials. Mueller can continue his closed-door inquiries, and even issue new indictments up to and after the Nov. 6 voting, without violating a Justice Department policy against actions intended “for the purpose of affecting any election,” they said, asking not to be identified discussing investigative matters.
That’s at odds with repeated assertions by Trump’s lawyers. “If it isn’t over by September, then we have a very, very serious violation of the Justice Department rules, and he shouldn’t be conducting one of these investigations in the 60-day period,” former New York Mayor Rudy Giuliani said on Fox News last week. In an interview Tuesday, Giuliani said, “If he doesn’t get it done in the next two or three weeks we will just unload on him like a ton of bricks.” He added, “Write the damn report so we can see it and rebut it.” The concept of a 60-day quiet period before an election may resonate with the public because of bipartisan condemnation of former FBI Director James Comey’s decision to reopen the investigation into Democrat Hillary Clinton’s use of a private email server shortly before the 2016 presidential election. As early as May, Giuliani was pushing the idea that Mueller had to wrap things up by September or “he is clearly doing a Comey.” That argument may have gained some traction: Two-thirds of Americans surveyed said Mueller should complete his investigation before the mid-terms, according to a CNN poll conducted by SSRS and released Aug. 14. It showed the view is shared across party lines, with 57 percent of Democrats supporting the timeline along with 69 percent of independents and 72 percent of Republicans. Any major step that Mueller takes before the election is expected to be vetted and cleared by Justice Department officials, including Deputy Attorney General Rod Rosenstein, who oversees Mueller’s work. But in reality, the Justice Department’s rules are far from clear-cut. “It’s an absurdity to think that Mueller has to shut down in the coming weeks because of the mid-term elections,” said Jeffrey Cramer, a former federal prosecutor. “There is no legal impediment to Mueller continuing his work as we get closer to the election.” As a former Justice Department official, Giuliani should know better, said Cramer, who’s now managing director of the international investigation firm Berkeley Research Group LLC. “He’s going to play poker against Bob Mueller? That’s not a smart move. Mueller’s holding all the cards.” The U.S. Attorneys’ Manual prohibits Justice Department personnel from using their official authority or influence to interfere with or affect the result of an election. It also requires prosecutors to consult with the department’s Public Integrity Section of the Criminal Division on major investigative steps. At the same time, the policy says charges should be brought when they’re ready. In 2012, Attorney General Eric Holder issued a binding policy memo on election-year activities that still applies. But it went to motivation as the deciding factor. “Simply put, politics must play no role in the decisions of federal investigators or prosecutors regarding any investigations or criminal charges,” the memo says. “Law enforcement officers and prosecutors may never select the timing of investigative steps or criminal charges for the purpose of affecting any election, or for the purpose of giving an advantage or disadvantage to any candidate or political party.” Justice Department officials have generally interpreted the policy as meaning that major overt activities that could have a political impact shouldn’t be taken 60 days before an election. But that doesn’t prevent closed-door activities such as grand jury subpoenas and interviews of witnesses, and it doesn’t prohibit taking action after voters have made their choices. Giuliani said the guidelines would preclude an interview of Trump during that time period. “They can’t be interviewing him privately,” he said. “Everyone will know they will be interviewing him and speculating like crazy.” In addition, it’s not clear that action by Mueller against Trump or those around him could be construed as interfering in the November vote because Trump isn’t on the ballot, one of the former officials added. As far back as last August, Trump’s lawyers were setting timelines many legal analysts viewed as unrealistic. Former White House lawyer Ty Cobb said he would be “embarrassed” if the investigation continued past Thanksgiving 2017. As Thanksgiving came and went, Cobb predicted the investigation would end by December and then in early 2018. Cobb left the White House in May. There’s no public sign the shifting timetables set by Trump’s lawyers have had any effect on Mueller’s inquiry, which continues to generate allegations of criminal activity. To date, Mueller has brought charges against more than 30 individuals, including Trump’s former campaign chairman Paul Manafort and former National Security Adviser Michael Flynn. By comparison, Independent Counsel Ken Starr spent four years investigating President Bill Clinton before releasing his report on the Monica Lewinsky affair, which spun out of a probe into an Arkansas land deal known as Whitewater. In the investigation into the public outing of CIA agent Valerie Plame, it took almost two years for then Special Counsel Patrick Fitzgerald to indict Scooter Libby, Vice President Dick Cheney’s chief of staff, for lying to investigators and obstruction of justice in October 2005.
Trump’s lawyers have spent almost nine months in back-and-forth negotiations with Mueller’s team over terms of a interview. That issue remains unresolved. Muller’s team is “not showing any desire to do this quickly,” Giuliani said Tuesday, adding it has yet to hear back from the special counsel’s office on the latest offer for terms of a limited interview. As for Mueller, he continues to maintain public silence. He speaks only through official legal actions such as indictments — whenever he’s ready. ©2018 Bloomberg L.P.
NEW YORK (Reuters) – Equities around the world took a dive on Wednesday, with emerging market stocks set to confirm a bear market and the dollar hitting a 13-month high, while weakness in China’s yuan rattled investors’ nerves. While fears of a crisis in Turkey still loomed, China was in sharp focus as the yuan CNH=EBS sagged nearly 0.8 percent to 6.9467 per dollar, hitting its weakest level since January 2017 following disappointing economic data earlier this week. The data stoked speculation whether the People’s Bank of China would intervene with more fiscal stimulus to stem its currency from breaking through the 7-yuan mark. “Today investors are waking up to the idea that the situation in China may be pretty impactful as far as global markets go,” said Emily Roland, head of capital markets research at John Hancock Investments.“With China being the engine of global economic growth, if you start to see their currency weaken significantly because of the slowdown we’re seeing there and you start to see the dollar meaningfully increase, there could become a point where there’s a liquidity issue globally,” Roland added. Turkey’s lira eked out a second day of gains as authorities tightened the screws on foreign investors aiming to short the currency. But the country’s failure to tackle galloping inflation kept investors fearful that Turkey was headed for full-blown crisis and debt defaults. Investors stepped up safe-haven holdings of the U.S. dollar due to worries about China and Europe’s exposure to Turkey, which pushed the euro to its weakest level in over a year. “The dominant theme in financial markets at the moment is the strength of the dollar,” said Sunil Krishnan, Aviva Investors head of multi-asset funds. “We see scope for that move to continue. “One of the big challenges to risk appetite in markets is if the dollar moves continue and put pressure on riskier assets such as emerging market bonds and so on,” he added. MSCI’s emerging equities index .MSCIEF was last down 2 percent from Tuesday, after having fallen more than 20 percent from its January intraday high earlier in the day. Latin American currencies also slid along with commoditie. The CBOE Volatility Index .VIX, Wall Street’s so-called “fear gauge,” jumped to a more than six-week high of 16.86, showing rising demand for protection against a near-term drop in U.S. stocks. The index was last up 2.9 points at 16.21.
The backdrop to all this is the escalation in global trade tensions, with Beijing lodging a complaint to the World Trade Organization to determine the legality of U.S. tariff and subsidy policies. Turkey has also raised tariffs on some U.S. products “in response to the U.S. administration’s deliberate attacks on our economy”, Vice President Fuat Oktay wrote on Twitter. U.S. crude oil CLcv1 fell 3.36 percent to $64.79 per barrel and Brent LCOcv1 was last at $70.61, down 2.55 percent on the day. Additional reporting by Richard Leong, Saqib Iqbal Ahmed in New York, Shinichi Saoshiro in Tokyo and Marc Jones in London; Editing by Louise Ireland and Dan Grebler
Central bank’s new diagnosis and tougher treatment plan likely a mistake, veteran Fed watcher says
Perhaps lulled into a sense of complacency by a Federal Reserve that previously had seemed to attend to the market’s every hiccup, investors seem unprepared for a central bank that now thinks more hawkish medicine is in order, a veteran Fed watcher said Tuesday.
“People don’t seem to realize the Fed does not have investors’ backs,” said Joe Lavorgna, chief economist for the Americas for French investment firm Natixis.
Lavorgna has spent 20 years following the Fed for Deutsche Bank Securities and other Wall Street firms after starting his career at the New York Fed. Responding on Twitter to a Bloomberg article saying the Fed would continue to press ahead with a campaign of steady interest-rate hikes despite turmoil in Turkey, Lavorgna, in a tweet, said this would be a “mistake.”
— Joseph A. LaVorgna (@Lavorgnanomics) August 14, 2018
In a phone interview, Lavorgna explained the mistake was the “trajectory the Fed laid out in June” for five more quarter-point rate hikes by the end of 2019. “We’re at the stage where good news becomes bad news with the Fed trying to take liquidity out of the market, he said. So any upbeat economic developments, like a decline in the unemployment rate, is likely to encourage the Fed to keep raising interest rates and may embolden them to do even more, he said. The bottom line is the Fed has the wrong diagnosis, Lavorgna said. The central bank mistakenly believes that low unemployment is the ultimate cause of inflation. “It’s not,” he said. Economists actually know very little about what generates inflation, he added. Famed economist Milton Friedman’s maxim that inflation is ultimately created by money is “effectively useless” because money is impossible to measure, he said. As a result, the Fed has looked to other indicators, like spare capacity, to try to guess what causes inflation. “Low unemployment has caused inflation some times, but a lot of times it hasn’t,” he said. At the moment, the Fed has penciled in two more quarter-point rate hikes this year and three more in 2019. The market only has priced in only three moves over the same time span. If the Fed follows through with its stated path, the result would be a stronger dollar and wider credit spreads. Ultimately this will result in lower stock prices. The yield curve, the closely watched difference between short-term and long-term bond yields, would continue to flatten and ultimately invert, he said. Some regional Fed presidents have signaled they are worried about policy that resulted in an inverted yield curve, which has been a fairly reliable predictor of recessions. Other Fed officials worry the economy will run into financial stability concerns if interest rates stay low. The right thing for the Fed to do would be to “back away more” from QE, by picking up the pace of shrinking the balance sheet, he said. The Fed is slowly letting some of the securities on its balance sheet run off. After a year of steady and slow increases, the Fed will allow $50 billion of securities to be run off its balance sheet every month.
Harley-Davidson CEO Matt Levatich struck back against “misinformation” about the motorcycle company’s plans to move some production overseas in response to President Donald Trump’s tariffs in a memo to employees and dealers. The iconic American brand has been in a political firestorm since it announced in June it would move European production out of the U.S. because of retaliatory tariffs from the European Union. Trump has threatened to tax Harley-Davidson “like never before,” and on Sunday praised owners who plan to boycott the company. “There continues to be misinformation circulated in conjunction with this issue, and I want to reiterate and share facts about Harley-Davidson that you can both be proud of and share with interested customers,” Levatich said in a memo sent to Harley employees and dealers on Tuesday. Without mentioning Trump by name, he reiterated the company’s preference to manufacture its bikes in the U.S. as well as its explanation for the shift overseas — high tariffs in some countries make its motorcycles unaffordable in those markets. While its bikes were once taxed at 6 percent in Europe, the new tariffs raised that to 31 percent. Harley-Davidson was already under pressure because of the Trump administration’s tariff that levied a 25 percent tax on steel and aluminum imports. Harley estimated the tariffs will cost between $90 million and $100 million annually. Levatich said the company can’t bear these costs “indefinitely,” so it made the decision to build some of its bikes overseas to avoid the tariffs and give the company better access to customers abroad. “We don’t take sides in politics,” he said. “Today, however, we unfortunately find ourselves in the center of a heated political conversation about fair trade. “It is not our intention or our desire to be in this political spotlight, and the entirety of our effort and focus is to minimize any impact on this great brand, company, the business of our dealers and, critically, the passion and loyalty of our riders who we do everything for,” he said.
The currency crisis in Turkey is being exacerbated by a skyrocketing annual inflation rate, which by some estimates, exceeds 100 percent. Steve Hanke, who in past helped set-up systems to stabilize currencies in Argentina and Bulgaria, told CNBC on Tuesday, “Today, I measure inflation with high-frequency data, and the inflation rate in Turkey is 101 percent on an annual basis. That’s the first time it’s been over 100 percent.” Hanke, who had served as a senior economist on President Ronald Reagan’s Council of Economic Advisers, echoed his earlier tweet:
#Turkey’s annual inflation rate measured for today, is 101%, breaching 100%, a milestone a country does not want to reach.
Countries with high inflation rates relative to others tend to see their currencies depreciate.
Over the past three weeks, the Turkish lira has plummeted, with selling intensifying into Monday’s record low of 7.24 Turkish lira per dollar after President Donald Trump on Friday said he would increase tariffs on steel and aluminium originating from Turkey. The escalating tariffs were a direct attack on Turkey’s refusal to free jailed American pastor Andrew Brunson. The lira was rebounding about 6 percent on Tuesday, but still remained more than 60 percent lower than when Recep Tayyip Erdogan became Turkey’s president in August 2014. The following chart shows 5 years of dollar strength against the lira.
Erdogan, in a speech Tuesday, said Turkey will boycott U.S. electronics, including Apple‘s iPhone, suggesting the Turkish people would stand together against dollar strength and inflation the same way they did against an attempted coup of his presidency in 2016. He accused the Trump administration of economically targeting Turkey like China and Russia. He again called on Turks to change U.S. dollars into lira in order “maintain the dignity” of the currency. Buying lira with dollars would be costly as “the real yield being in Turkish dominated assets of any kind is hugely negative right now,” said Hanke, an applied economics professor at Johns Hopkins University. “They would have to raise interest rates over 100 percent per annum to stabilize the lira.” Raising interest rates is a weapon countries can use to defend their currencies However, even if Erdogan were allow rate increases, which he’s been reluctant to do, Hanke said the only way to really stop the slide in the Turkish lira is to establish a currency board.
The only thing more reliable than currency boards is the sun rising every morning. Currency boards have been tried 70 times in history and have produced sound currencies every time. As the #lira in #Turkey falters, Erdogan should take note.
In a recent Wall Street Journal op-ed, Hanke described the monetary-reform measure: “The sole function of a currency board is to exchange the domestic currency it issues for an anchor currency at a fixed rate.”
The company’s directors said Tuesday that they had formed a special committee of three independent board members to study the proposal. And they cautioned that the board has yet to endorse the idea of taking the electric car maker private. “The special committee has not yet received a formal proposal from Mr. Musk regarding any going private transaction nor has it reached any conclusion as to the advisability or feasibility of such a transaction,” said the statement. The Tesla directors who will weigh the proposal are Brad Buss, the former chief financial officer of SolarCity, the solar panel company that Tesla purchased in 2016; Robyn Denholm, the chief operating officer of Telstra (), a telecom; and Linda Johnson Rice, the CEO of Johnson Publishing. Musk shocked Wall Street last week when he announced by tweet that he was considering taking the company private, saying that he had “funding secured” for a deal. On Monday, he said that the financing referred to talks he has had with Saudi Arabia’s sovereign wealth fund, which he said recently bought nearly 5% of Tesla stock as it tries to diversify away from oil holdings. The fund did not answer a request for comment. Musk said the Saudis approached him repeatedly about going private, and he said he left a meeting with them on July 31 with no question that a deal could be closed — “it was just a matter of getting the process moving.” Musk said in the blog post that he needs to complete discussions with Tesla’s other major investors before he presents a formal proposal to the special committee of the board. Tesla’s( ) stock was down about 1% on Tuesday at $353. That is well below the $420 price that Musk has proposed for taking the company private, and suggests many investors have doubts the deal will be completed.
Omarosa Manigault Newman claimed President Trump ‘absolutely’ knew about hacked Hillary Clinton emails in advance of publication during the 2016 presidential campaign, and vows she will further assist the Mueller probe if asked. The former White House official, campaign aide, and reality TV star made the claim, without providing any details, in an interview Tuesday with MSNBC amid a furor over her new book, ‘Unhinged.’ ‘There is a lot of corruption that went on both in the campaign and in the White House and I’m going to blow the whistle on all of it,’ vowed the former Trump protege turned self-styled whistleblower. Tere is a lot of corruption that went on both in the campaign and in the White House and I’m going to blow the whistle on all of it,’ said Omarosa Manigault Newman in her latest TV interview Host Katy Tur pressed Omarosa on whether Trump knew about Hillary Clinton emails in advance of publication by WikiLeaks – a topic at the heart of the Mueller Russia probe. ‘Absolutely. Yes. Yes,’ she responded. But Manigault Newman, who confirmed she has spoken to Mueller’s investigators, provided no corroborating information. Manigault-Newman signed a non-disclosure and non-disparagement agreement in the summer of 2016 when she joined the Trump campaign; it requires her to refrain from denigrating him publicly ‘during the term of your service and at all times thereafter’ Manigault-Newman released audio hours earlier from what she says is a 2016 conference call in which top Trump campaign aides discussed how to handle a rumored tape recording of the future president uttering a racial slur Asked if Trump should be afraid of more tapes in her possession,’ she didn’t give a direct answer. ‘I think he should be afraid of being exposed as the misogynist, the bigot and the racist that he is.’She also wouldn’t comment on whether she had more tapes of the president, or if she planned to release more of them. When Tur asked if Trump really had a ‘back channel’ to WikiLeaks, she responded: ‘I didn’t say that, you did. But I will say that I am going to expose the corruption that went on in the campaign and int he White House.’
Manigault-Newman’s book ‘Unhinged’ is on sale today When pressed for details, including whether she spoke to a federal grand jury and what kind of questions she got asked by investigators, Omarosa begged off, and said she was glad to talk about her new book. ‘I feel like my hands are tied,’ she said. ‘Unfortunately, I can’t elaborate,’ she said. ‘I’d be happy to talk bout “Unhinged,” my book that’s out today,’ she said at one point. She declined to characterize how many tapes she had, after the release of three explosive snippets, including one Tuesday of staff aides discussing an unverified tape of Trump allegedly using the ‘N’ word – which he and other aides deny exists. She said she was willing to turn over tapes if Mueller asks, or help in other ways. ‘If he calls me I certainly will participate with anything that he needs. I’ll provide him with what he needs,’ she said.
She called the president she served for a year inside the White House ‘unfit’ for office. ‘I think that he should come clean with the American people,’ she said of Trump. She was more forthcoming about the number of tapes with MSNBC’s Chris Mathews in a previous ‘Hardball’ interview. ‘Oh, I have plenty,’ she told him. ‘Anything Mueller would like to see? Robert Mueller?’ the host asked. ‘If he, if his office calls again, anything they want I’ll share,’ she told him.
Trump ramped up his slash-and-burn campaign, calling Manigault-Newman ‘that dog’ and a ‘crazed, lying lowlife’ Asked if she would be a good witness, she said: ‘Absolutely. Anything they want, I will certainly corroborate.’ Manigault Newman, who was fired and who released a tape of chief of staff John Kelly delivering the news, also said she thinks Trump should be impeached. Trump’s re-election campaign organization filed papers in New York on Tuesday demanding damages from Omarosa Manigault-Newman for violating the terms of a secrecy agreement she signed in 2016. The legal filing claims the onetime campaign adviser and former West Wing aide disparaged Trump in her unauthorized tell-all book ‘Unhinged,’ breaking a written promise to refrain from denigrating him publicly ‘during the term of your service and at all times thereafter.’
Patton and Pierson released a statement Tuesday morning in which they acknowledge talking about a purported ‘n-word’ tape but claim their denials only referred to Omarosa’s description of a discussion prompted by a claim by pollster Frank Luntz that the recording existed
ISTANBUL (Reuters) – Turkey has drafted a economic action plan and will start implementing it on Monday morning to ease investor concerns, Finance Minister Berat Albayrak said on Sunday, after the lira plunged to a new record low in early Asia Pacific trade. In an interview with Hurriyet newspaper published online, Albayrak described the lira’s weakness as “an attack,” echoing President Tayyip Erdogan – who is his father-in-law – and said the action plan was ready. “From Monday morning onwards our institutions will take the necessary steps and will share the announcements with the market,” Albayrak said, without giving details on what the steps would be. Albayrak also said a plan has been prepared for banks and the real economy sector, including small to mid-sized businesses which are most affected by the foreign exchange fluctuations. “We will be taking the necessary steps with our banks and banking watchdog in a speedy manner,” he said. He has also dismissed any suggestions that Turkey might intervene in dollar-denominated bank accounts, saying any seizure or conversion of those deposits into lira was out of the question. The lira plunged to a fresh record low of 7.24 against the dollar during in Asia Pacific trade, where markets were opening for Monday morning. It pared losses after Albayrak’s comments and stood at 6.8603 at 2136 GMT Sunday. The currency has lost more than 45 percent of its value this year, largely over worries about Erdogan’s influence over the economy, his repeated calls for lower interest rates in the face of high inflation and worsening ties with the United States. Earlier, Erdogan had stood by his opposition to high interest rates, saying they were an instrument of exploitation and that Turkey was not going to fall into this trap. In the Hurriyet interview, Albayrak said budget policies were important to support and strengthen the central bank’s monetary policies. “We will be entering a strong period in terms of fiscal policies,” he said. Turkey’s banking watchdog BBDK in a statement said it was limiting banks’ foreign exchange swap transactions. Erdogan, who has called himself the “enemy of interest rates,” wants cheap credit from banks to fuel growth, but investors fear the economy is overheating and could be set for a hard landing. His comments on interest rates – and his recent appointment of his son-in-law as finance minister – have heightened perceptions that the central bank is not independent. On Sunday, speaking to supporters in Trabzon on the Black Sea coast, Erdogan dismissed suggestions that Turkey was in a financial crisis like those seen in Asia two decades ago. The lira’s free-fall was the result of a plot and did not reflect Turkey’s economic fundamentals, he said. “What is the reason for all this storm in a tea cup? There is no economic reason… This is called carrying out an operation against Turkey,” he said. The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten monetary policy at its last meeting. Erdogan repeated his call for Turks to sell dollars and buy lira to shore up the currency, while telling business owners not to stock up on dollars. “I am specifically addressing our manufacturers: Do not rush to the banks to buy dollars. Do not take a stance saying ‘We are bankrupt, we are done, we should guarantee ourselves.’ If you do that, that would be wrong. You should know that to keep this nation standing is … also the manufacturers’ duty.”
The New York Fed’s survey of consumer expectations — based on a panel of 1,300 household heads across the United States — found declines in one-year expectations on earnings growth , household spending, stock prices and house prices. Median one-year ahead earnings (wages) growth expectations fell from 2.7% in June to 2.4% in July, dropping below its 2.5%-2.7% range since November 2017, the New York Fed said. The decline was broad based across income groups but largest among those below the age of 40. Median home price change expectations retreated from a recent high of 3.9% reached in June to 3.7%. The probability that stock prices SPX, -0.40% will be higher in a year fell to 40.3%, the lowest level since October 2016. Median household spending growth expectations decreased by 0.1% to 3.2% in July, remaining slightly above its trailing 12-month average of 3%, the New York Fed said. The median expectation that taxes will go up in the next year — just months into a tax cut — rose for the fifth straight month, to 2.2% after the series low of 1.5% in February. Relatedly, year-ahead expected growth in government debt increased from 6.6% in June to 6.9% in July, well above the 4.9% median year-ahead growth forecast reported in July 2017. Unemployment expectations are near the series low, the perceived probability of losing one’s job in the next 12 months fell to 14% from 15.2%, and the probability of leaving one’s job voluntarily increased to 23.2%, close to the series high.
NEW YORK (Reuters) – Citigroup Inc said on Monday that Jud Linville, the head of global cards and consumer services, is leaving the company as part of a reorganization of executives in its global consumer banking businesses. David Chubak, currently global retail banking head, will also oversee global branded cards and consumer lending, the bank said. Anand Selva, the current head of consumer banking in Asia, will become head of U.S. consumer banking, including branded cards, digital banking and wealth management. The changes were described in a memo from Stephen Bird, chief executive of Citigroup’s global consumer banking business. Linville, formerly of American Express Co, had been at Citigroup for eight years and had streamlined the company’s line up of cards. But in recent years, the division has failed to meet targets after encountering stiff competition from JPMorgan Chase & Co for premium card customers and after outbidding American Express for the card business of retailer Costco Bird said in the memo that the reorganization was designed to “harmonize” the operations of Citigroup’s global consumer banking businesses. Citigroup said in July 2017 it expected the global consumer banking businesses to provide much of the profit growth it expects by 2020. Anand has been with Citigroup for 26 years, the last three of which he has been responsible for the consumer business in 17 countries, primarily in Asia, Bird said. Citigroup has said it is bringing to the United States advanced digital consumer banking tools that it developed in Asia. The bank is setting out this year to market a digital banking app across the United State to people who live far from its branches, which are located around just six U.S. cities. It hopes the digital move will bring in more deposits and support its Citigold accounts for wealthier individuals. Bird said the changes align the U.S. business with the model Citigroup uses in Asia and Mexico that has produced “cross-product synergies, greater collaboration and accelerated speed to market and decision-making.”
An FBI counterintelligence agent who helped lead the investigation of Russian interference in the 2016 presidential election but was removed for sending text messages critical of President Donald Trump has been fired. Peter Strzok’s attorney Aitan Goelman revealed in a statement on Monday that his client was fired on Friday on the orders of FBI Deputy Director David L. Bowdich. Suggesting the firing of Strzok was politically motivated, Goelman noted the FBI office that typically handles discipline recommended the agent’s demotion and a 60-day suspension. Goelman claimed the decision to fire Strzok is a departure from typical FBI practice and contradicts Director Christopher Wray’s assurances that the bureau intended to follow its regular process. “This isn’t the normal process in any way more than name,” Goelman said. “This decision should be deeply troubling to all Americans.” Strzok, who played key roles in both the Russia probe and the investigation of Hillary Clinton’s use of a private email server while Secretary of State, has faced considerable criticism for his anti-Trump texts. An inspector general report found the texts between Strzok and former FBI lawyer Lisa Page cast a cloud over the entire investigation but did not directly affect specific investigative actions. Nonetheless, Trump and Republican lawmakers have argued the texts provide proof that the Russia investigation is biased. Trump celebrated Strzok’s firing in posts on Twitter and questioned whether special counsel Robert Mueller’s investigation will now be dropped. “Agent Peter Strzok was just fired from the FBI – finally. The list of bad players in the FBI & DOJ gets longer & longer,” Trump tweeted. “Based on the fact that Strzok was in charge of the Witch Hunt, will it be dropped?” he added. “It is a total Hoax. No Collusion, No Obstruction – I just fight back!” In a separate tweet, Trump suggested the Clinton email investigation should be reopened due to Strzok’s role in the probe. “Just fired Agent Strzok, formerly of the FBI, was in charge of the Crooked Hillary Clinton sham investigation,” Trump tweeted. “It was a total fraud on the American public and should be properly redone!”
Oil futures lost ground Monday, but ended off session lows after tumbling sharply on expectations for an increase in crude stocks at the delivery hub for U.S. futures and data showing a pickup in production by OPEC. The U.S. benchmark, West Texas Intermediate crude for September delivery CLU8, -0.47% on the New York Mercantile Exchange, fell 43 cents, or 0.6%, to end at $67.20 a barrel after sinking as low as $65.71. Brent crude, the global benchmark also declines, with October crude LCOV8, -0.10% ending down by $1.49, or 0.3%, at $72.61 a barrel on the ICE Europe exchange. Brent traded as low as $71.04. Traders said the leg down for futures came after Genscape, a market intelligence firm, predicted a rise in inventories at the Cushing, Okla., delivery hub for Nymex crude futures. Official Energy Information Administration data are due Wednesday morning. The resulting weakness had taken futures below important support at $66.14 and then $66, said Robert Yawger, director of energy at Mizuho USA. The move came as speculators continued to hold large net long positions. Meanwhile, crude was already under pressure after the Organization of the Petroleum Exporting Countries earlier Monday said production by cartel members rose by 41,000 barrels a day in July even as output by Saudi Arabia fell. Also, Turkey’s currency crisis appeared to put some indirect pressure on U.S. oil futures Monday, with analysts tying modest weakness partly to a stronger dollar. Oil saw some strength at the end of last week after the International Energy Agency said renewed sanctions against Iran could create supply problems later in the year, but a firmer dollar “offset the move higher and with the start of the new week oil prices began moving downward again,” said Fiona Cincotta, senior market analyst at City Index, in a note. Turkey’s currency USDTRY, +8.3189% plunged again on Monday, sending shock waves through other emerging markets. After falling around 10%, the lira pared gains but remained sharply lower after Turkey’s central bank made policy moves that failed to fully alleviate investor worries. The turmoil provided support for traditional haven currencies like the Japanese yen and Swiss franc and lifted the dollar versus most rivals. The ICE U.S. Dollar Index DXY, +1.23% a measure of the U.S. unit against a basket of six major rivals, rose 0.1% to 96.42 to trade at a more-than-one-year high. Meanwhile, analysts at JBC Energy in Vienna said that while Turkey’s woes appeared to have little direct effect on oil last week, it was worth noting that Turkey was expected to see relatively robust growth in product demand this year of around 5%, or 50,000 barrels a day, which is now at risk. “The sharp drop in the lira is also likely to have an impact on regional refined product markets, as Turkey is one of the major importers in the Med region, with product net-imports of 360,000 [barrels a day] last year and crude imports were roughly half a million barrels a day,” they said, in a note.
Outstanding education debt in the U.S. has tripled over the last decade and now exceeds $1.5 trillion, posing a greater burden to Americans than auto or credit card debt. For many, the payments are proving unmanageable. By 2023, nearly 40 percent of borrowers are expected to default on their student loans. That’s when a person has not made a payment toward their education debt in roughly a year, triggering it to be sent to a third-party collection agency. Student debt could hold back economic growth, Fed chief says What kind of student loan borrowers are at risk of defaulting? And what’s the financial impact on them of doing so? A new report from the Urban Institute, a progressive think tank in Washington, D.C., answers these questions. The researchers analyzed the fates of borrowers who entered repayment in 2012. Federal loans come with a lot of protections that should make default rare, said Kristin Blagg, a research associate at the Urban Institute, focusing on education. However, she learned, that is not the case: Within four years after leaving school, nearly a quarter of the borrowers had defaulted. “To default is still pretty common,” Blagg said. She added, “I found that these are borrowers who tend to be in financial distress.” Defaulters are less likely than nondefaulters to have types of debt that require a risk assessment, like credit card, auto and mortgage debt. They’re more likely than nondefaulters to have their utility and medical bills fall into collections, as well. Blagg said these additional debt pressures can explain, at least in part, why some borrowers might be putting off their student loan payments. “The issue of default appears to be more concentrated in neighborhoods of color.” People who default on their student loans are more likely to live in Hispanic and black neighborhoods, Blagg found. Previous research has shown that people of color are more burdened by their education debt, because they have less parental wealth to draw on as well as higher rates of unemployment. In addition, the average defaulter resides in an area where the median income is around $50,000, compared with around $60,000 for nondefaulters. Ironically, those with the smallest loan balances are the most likely to be unable to pay off their debt. Almost 1 in 3 people who owe less than $5,000 for their education default within four years, compared to just 15 percent of borrowers who owed more than $35,000, the Urban Institute found. This is in large part because many students who drop out of school have less debt, but are more burdened by it since they don’t have the benefit of a degree, said Mark Kantrowitz, a student loan expert. In addition, he said, “They often lack awareness of options for dealing with the debt, such as deferments, forbearances, income-driven repayment and loan forgiveness.” By the time a person’s student loans fall into default, they will see their credit score tank around 60 points, to an average of around 550, which is considered “very poor,” by rating company Experian. Borrowers who stay current, on the other hand, have scores on average in the high 600s. A low credit score can force people to pay higher interest rates, delay buying a house and even have to worry about being disqualified from certain jobs. The government also has extraordinary collection powers with federal loans, since they’re one of the only debts unable to be discharged in bankruptcy. “Negative effects of student loan default can be wage garnishments, tax offsets, and other methods of loan collections,” said Elaine Griffin Rubin, senior contributor and communications specialist at Edvisors. “In addition, some states suspend or revoke state-issued professional licenses, and some states suspend a driver’s license because of a defaulted loan.” To make matters worse, defaulting on your education debt also increases the balance, likely due to collections fees and the accumulation of interest. After default, the Urban Institute found, a student loan borrower will see their balance balloon by around 10 percent. These myriad consequences that come with a default can be hard to recover from, Kantrowitz said. “At best, it delays participation in the American Dream,” he said. “At worst, they are shut out permanently.”
German Economy Minister Peter Altmaier has sharply criticised U.S. President Donald Trump’s tariffs and sanctions policies, saying such measures were destroying jobs and growth and that Europe would not bow to U.S. pressure regarding Iran. The United States has triggered a bitter tit-for-tat trade dispute with import tariffs meant to protect American jobs against what Trump calls unfair trade practices from China, Europe and other countries.
Trump’s determination to push ahead with sanctions on Tehran which also target European companies doing business with Iran has opened another battle front.
“This trade war is slowing down and destroying economic growth – and it creates new uncertainties,” Altmaier told Bild am Sonntag newspaper, adding that consumers suffered the most because higher tariffs were driving up prices. Altmaier lauded the agreement reached by European Commission President Jean-Claude Juncker during negotiations with Trump last month, saying the interim deal had saved hundreds of thousands of jobs in Europe. The U.S. and the European Union are embroiled in a spat after Trump imposed tariffs on aluminum and steel imports and Brussels responded with retaliatory tariffs on some U.S. goods. Trump had also threatened to impose tariffs on EU auto imports but reached an agreement to hold off on taking action after meeting with Juncker at the White House last month. “The agreement between the EU and U.S. can only be a first step. Our goal is a global trade order with lower tariffs, less protectionism and open markets,” Altmaier said. Turning to the U.S. sanctions against Iran, the minister said Germany and its EU allies would continue to support companies doing business with Iran despite U.S. pressure. “We won’t let Washington dictate us with whom we can do business and we therefore stick to the Vienna Nuclear Agreement so that Iran cannot build atomic weapons,” Altmaier said. German companies should be allowed to continue to invest in Iran as much as they want and the German government is looking for ways together with its European allies to ensure that financial transactions could still take place, he added. Several European companies have suspended plans to invest in Iran in light of the U.S. sanctions, including oil major Total as well as carmakers PSA, Renault and Daimler. German business associations have warned that companies are increasingly suffering from Trump’s sanctions policies – including those against Iran – as well as the tariffs he is imposing in the escalating trade conflict with China. The trade and sanctions disputes are clouding the growth outlook for Germany, Europe’s largest economy, but Altmaier said he nonetheless expected strong growth this year due to vibrant domestic demand, record-high employment and rising wages. The Federal Statistics Office will publish preliminary gross domestic product figures for the second quarter on Tuesday, with analysts expecting the quarterly growth rate to pick up to 0.4 percent after 0.3 percent in the first quarter.
Donald Trump has tweeted that it is “great” that many Harley-Davidson owners plan to boycott the firm as a row over tariffs escalates. The US president said “most other firms… including Harley competitors” agreed with his decision to impose tariffs on steel and aluminium imports. In June, Harley-Davidson said it would move some production out of the US to avoid retaliatory tariffs from the EU. Mr Trump has already attacked the move, threatening Harley with higher taxes. Harley-Davidson refused to comment on Mr Trump’s latest criticism, but pointed to an interview chief executive Matthew Levatich did with CNBC last month. In the interview, Mr Levatich said the firm’s preference “in all cases is to supply the world from the United States”. He said, however, that the firm had invested in international manufacturing over the past 20 years because “trade and tariff situations in certain markets” made it “prohibitive” without this investment. “We’re only doing that because these are important growth markets for the company that, without those investments, we wouldn’t have access to those customers, at any kind of reasonable price,” he said. Harley-Davidson warned last month that its profit margins this year were likely to halve as trade tariffs bit. Harley-Davidson expects added costs of $45m-$50m this year, due to the EU tariffs, as well as higher aluminium and steel prices. The company said in June it would shift some motorcycle production away from the US to avoid the “substantial” burden of European Union tariffs. It has assembly plants in Australia, Brazil, India and Thailand as well as in the US, but it has not said which plant would take up the extra production. Mr Trump has said tariffs on steel and aluminium imports, which came into force this spring, are necessary to protect the US steel and aluminium industries – he maintains these are vital for national security. The tariffs have drawn retaliation from the EU, Canada, Mexico, India and others while driving up the cost of metals for manufacturers in the US. The US has also threatened to hit billions of Chinese imports with import taxes, some of which are already in effect. It is also considering tariffs on foreign cars and vehicle parts.
The Islamic State (ISIS/ISIL) branch in Afghanistan has become a significant menace against the West despite the fall of the group’s caliphate in Iraq and Syria, a top American commander warned this week.
In June, Brig. Gen. Lance R. Bunch, the top U.S. air commander in Afghanistan, noted that the ISIS wing has attempted to “establish” its own “caliphate” twice this year alone in the eastern Afghan province of Nangarhar along the Pakistan border, considered the group’s primary stronghold in the region. U.S.-NATO-assisted Afghan National Defense and Security Forces (ANDSF) have so far managed to thwart the ISIS attempt to establish a caliphate in Afghanistan, Gen. Bunch declared. Gen. Joseph Votel, the chief of U.S. Central Command (CENTCOM), charged with overseeing the war in Afghanistan, warned Pentagon reporters on Wednesday the American military is “concerned” ISIS in Afghanistan intends to attack the West. “I think we always have to be concerned about ISIS, whether it’s ISIS-K or whether it’s any of the other branches of it, harboring intentions to operate, you know, much more globally or externally from the areas in which they’re operating. And so, you know, we do have that concern about them,” Votel said. The ISIS branch in South Asia, which primarily operates in Afghanistan and Pakistan, is known as the Khorasan Province (ISIS-K). Asked whether the U.S. military is aware any links between ISIS-K and outside groups that would potentially carry out attacks in Europe or against the United States, Gen. Votel responded: “I think in general ISIS does have that intention.” When pressed to describe any actual plots by ISIS-K on the West, the top commander added, “I think there probably has been, but I can’t cite a specific example to you.” Back in October 2016, the U.S. military acknowledged that ISIS was “very focused on trying to establish their caliphate, the Khorasan caliphate, inside Afghanistan.” ISIS officially announced its presence in Afghanistan in early 2015, less than a year after the United States declared its combat mission over at the end of 2014. The U.S. has been assisting the Afghan forces in their fight against ISIS in their stronghold of Nangarhar. “We have killed numerous ISIS-K fighters this year,” Gen. Votel told reporters Wednesday. “The military campaign against ISIS has been both continuous and effective.” The general stressed that U.S. efforts towards “reconciliation” between Kabul and the Taliban, the primary goal of American President Donald Trump’s strategy to end to the nearly 17-year-old war, are separate from the fight to annihilate ISIS. “It is important to recognize that while we apply military pressure against the Taliban to bring them to the table of reconciliation, we harbor no illusion about reconciliation with ISIS-K; our mission is to destroy this organization,” he declared. Citing U.S. officials and the latest American intelligence estimates, Voice of America (VOA) reported this week that efforts to root out and decimate ISIS-K have “so far failed to prevent the terror group from maintaining a foothold in the country.” “IS-Khorasan is thought to have more than 1,000 fighters, most of them located in Afghanistan’s southern Nangarhar province, with a small number operating in the country’s eastern Kunar province,” VOA added. The ISIS branch reportedly reached a peak of 3,000 fighters in Afghanistan. According to a report from the United Nations Mission in Afghanistan (UNAMA), ISIS-K was behind more than 50 percent of civilian casualties in the war-ravaged country through the first half of 2018. The University of Maryland’s renowned National Consortium for the Study of Terrorism and Responses to Terrorism (START) listed ISIS-K among the 10 top prolifically deadliest terrorist group’s in the world last year, separate from core Islamic State in Iraq and Syria. Last year, ISIS-K carried out 197 attacks, killing 1,302 people, the study revealed.
A 29-year-old man who stole an empty passenger jet from Seattle airport and then crashed it was an airline worker with full credentials, authorities say.He had worked for Horizon Air for more than three years, towing and tidying aircraft and loading bags. The man, not yet named, took off late on Friday, forcing the airport to close while two fighter jets gave chase. After making “incredible manoeuvres”, he crashed the plane in Puget Sound and did not survive. Transcripts of his conversation with air traffic control reveal a man who appears surprised about his feat, who is unclear as to the full operations of the plane, who has no intention to hurt anyone and who ultimately apologises to his loved ones, saying he is “just a broken guy”. Airline and airport officials gave a press briefing on Saturday morning in Seattle. They declined to give the man’s name. Mike Ehl, director of aviation operations at the airport, said the man “had access legitimately” to the plane and that “no security violations were committed”. Alaska Airlines CEO Brad Tilden said the man had been “background checked”. “He worked his shift yesterday and we believe he was in uniform,” he added. Gary Beck, CEO of Horizon Air, said that “to our knowledge, he didn’t have a pilot’s licence” and that he had no idea how the man had gained the skills to fly such a “complex machine”. The man was believed to be the only person on board but that has not been confirmed. The FBI is carrying out the investigation. The 76-seat, twin-engine turboprop Bombardier Q400, belonging to Horizon Air, took off from Seattle-Tacoma International Airport at 19:32 local time (02:32 GMT). Officials say the man used a pushback tractor to first manoeuvre the plane 180 degrees from a maintenance location into the correct position for take-off. After take-off he performed at least one dramatic roll, pulling the aircraft up just metres from the water before gaining altitude again. The North American Aerospace Defense Command (Norad) issued a statement saying that two F15 fighter jets were launched from Portland to intercept. A number of videos showed them following the passenger plane, which was flying in an erratic manner. Norad said the F15s were “working to redirect the aircraft out over the Pacific Ocean when it crashed on the southern tip of Ketron island”, about 30 miles (48km) south of the airport. “Norad fighters did not fire upon the aircraft,” it said.
As of this week, Hulu’s major stakeholders have all reported earnings for the most recent quarter — and all three posted some big losses for the streaming service as it ramps up investments. Hulu doesn’t report official numbers — and declined to comment for this story — but some rough math of write-downs by Comcast, Disney and Twenty-First Century Fox puts Hulu’s annual losses in the neighborhood of $1.5 billion. Each company owns 30 percent of Hulu. Comcast, which also owns CNBC-parent NBCUniversal, and Fox both attributed losses to Hulu that had doubled from the year-ago quarter. Comcast posted a $107 million loss from Hulu and Fox posted a $127 million loss. Four quarters of losses that size, accounting for the companies’ shares, puts annual losses for Hulu between $1.3 billion and $1.6 billion. Research firm BTIG in February estimated Hulu’s 2017 losses at under $1 billion. Disney, the only company of the three not to break out losses for Hulu, noted repeatedly in its earnings release and on the company’s earnings call that financials dipped for the fiscal third quarter in part due to “higher losses from Hulu.” And yet, Disney is about to double its stake in Hulu once it closes its proposed acquisition of Fox. A representative for the company wasn’t immediately available to comment for this story. If anything, the willingness to take on double the losses is credit to Disney’s ambitions in streaming and over-the-top, direct-to-consumer content. The company last year announced plans to launch an in-house streaming service to compete with industry leader Netflix. But the company has said it’ll be at least another a year before launch, and drawing eyes from incumbents will take time.”[CEO Bob] Iger seems committed to Hulu,” Argus Research Analyst Joe Bonner said in an email to CNBC. “As he should be since it’s an OTT streaming platform that is already up and running, rather than the prospective one that management is currently promising for the end of next year and even if delivered on time will take years to build a subscriber base.” Hulu executives have warned shareholders of growing losses as the company invests in building a subscriber base to rival Netflix’s. In May, the company announced it had surpassed 20 million American subscribers, having added 3 million subscribers since January. Netflix, for comparison, reported 57 million U.S. subscribers for the last quarter, an increase of fewer than 1 million subscribers over the three-month period. “Investing in Hulu right now is probably money well spent and should not significantly impair [Disney’s] balance sheet,” Bonner said.
DUBAI/RIYADH/LONDON (Reuters) – Saudi Arabia’s Public Investment Fund (PIF) has shown no interest so far in financing Tesla Inc (TSLA.O) CEO Elon Musk’s proposed $72 billion deal to take the U.S. electric car maker private, despite acquiring a minority stake in the company this year, two sources familiar with the matter said. The 47-year-old investor and engineer stunned financial markets on Tuesday when he said on Twitter that he was considering a take-private deal for Tesla, an auto manufacturing pioneer that developed the world’s first luxury all-electric sedan car. He also said he had secured funding for the proposal, without providing details. Investors and analysts viewed PIF as a natural financing partner. Beyond amassing a stake of just below 5 percent in Tesla, the sovereign wealth fund has poured tens of billions of dollars into technology investments, including $45 billion in SoftBank Group Corp’s (9984.T) Vision Fund over five years. However, a source who is familiar with PIF’s strategy said it was not currently getting involved in any funding process for Tesla’s take-private deal. A second source close to the situation also said PIF was not taking part in any such plan at this stage. This source said that the Saudi fund would not make an investment of this kind without seeking guidance first from Softbank. Reuters reported on Wednesday that SoftBank was not currently pursuing a deal for Tesla given its investment earlier this year in rival GM Cruise. PIF’s reluctance will add to the pressure on Musk to produce details of his financing plan. Tesla’s board has not received a detailed financing plan from him and is seeking more information, Reuters reported on Thursday. The board will make a decision on whether to hire advisers and launch a formal review of Musk’s take-private proposal in the coming days, based on how much detail on the financing plan it receives from Musk, a third source said. The sources requested anonymity because the deliberations are confidential. A spokesman for PIF was not immediately available for comment. A Tesla spokesman declined to comment on behalf of the company and Musk. The U.S. Securities and Exchange Commission has contacted Tesla to ask about Musk’s assertion on Twitter that funding for his proposed deal was “secured”, the Wall Street Journal reported on Wednesday.
ISTANBUL (Reuters) – President Tayyip Erdogan denied on Saturday that Turkey is in a currency crisis, dismissing a plunge in the lira as ‘fluctuations’ which have nothing to do with economic fundamentals. Turkish President Tayyip Erdogan talks to media in the Black Sea city of Ordu, Turkey August 11, 2018. Cem Oksuz/Presidential Palace/Handout via REUTERS. Speaking after U.S. President Donald Trump doubled tariffs on Turkish steel and aluminum imports, Erdogan described Friday’s 18 percent fall in the lira to a record low as the ‘missiles’ of an economic war waged against Turkey. Erdogan said those who plotted against Turkey in a failed coup attempt in July 2016 were now trying to target the country through its economy, and pledged to fight back. He did not name any countries. “Those who can’t compete with us on the ground have brought online fictional currency plots that have nothing to with the realities of our country, production and real economy,” Erdogan told a provincial meeting of his AK Party in the Black Sea coastal town of Rize. “The country is neither crumbling, nor being destroyed or bankrupt or in a crisis,” he said, and added that the way out of the ‘currency plot’ was to boost production and ‘minimize interest rates’. The Turkish lira has lost about 40 percent this year alone, largely over worries about Erdogan’s influence over the economy, his repeated calls for lower interest rates in the face of high inflation and deteriorating ties with the United States. The two governments have been at odds over a wide range of topics – from diverging interests in Syria, to Turkey’s ambition to buy Russian defense systems, and the case of evangelical pastor Andrew Brunson, who is on trial in Turkey on terrorism charges. Erdogan also appeared to allude to a ‘deadline’ for handing over Brunson, although he did not name the United States as having set any such deadline or say precisely when it might have expired. “(They are) threatening, saying you will send (him) until 6 pm … This is not some random country. This is Turkey,” he said. A Turkish delegation visited Washington for talks this week but left with no signs of a breakthrough. After almost 20 months in a Turkish jail, Brunson was moved to house arrest in July by a court. Since then Trump and his vice president Mike Pence have repeatedly called for his release while Ankara said the decision was up to the courts. Washington in response sanctioned two Turkish ministers and Trump on Friday announced it was doubling the tariffs on steel and aluminum imports from Turkey, saying relations with Ankara were “not good at this time”. An important emerging market, Turkey borders Iran, Iraq and Syria and has been mostly pro-Western for decades. Financial upheaval risks further destabilizing an already volatile region. A meeting on Friday unveiling a new economic approach by Turkey’s finance minister Berat Albayrak, Erdogan’s son-in-law, did little to offer support for the free-falling lira as investors sought concrete steps such as an interest rate increase to restore confidence. “I am asking you. What possible reason could there be behind the lira which was at 2.8 against dollar in July 15, 2016 to slide below 6 yesterday? During this period, Turkey has set records in its exports, production and employment,” Erdogan said. He repeated a long-standing plan to shift to trading in national currencies and said Turkey was preparing for such a step with Russia, China and Ukraine. He also repeated his call to Turks to sell their dollar and euro savings to shore up the lira. “If there are dollars under your pillow, take these out… Immediately give these to the banks and convert to Turkish lira and by doing this, we fight this war of independence and the future,” he said. He also said it was a pity that Washington chose Brunson over Turkey, its partner in NATO, and in an opinion piece in the New York Times, he warned the United States that Ankara had other alternatives as allies. Washington “must give up the misguided notion that our relationship can be asymmetrical”, he said in the opinion piece. Turkey, home to the Incirlik air base which is used by U.S. forces in the Middle East, has been a NATO member since the 1950s. It is host to a critical part of the Western alliance’s missile defense system against Iran. In a separate opinion piece in the pro-government newspaper Daily Sabah, Erdogan’s spokesman Ibrahim Kalin said Turkey’s efforts to solve the crisis with diplomatic methods had been dismissed by the Trump administration, warning that “the U.S. runs the risk of losing Turkey” as an ally. “The entire Turkish public is against U.S. policies that disregard Turkey’s legitimate security demands. Threats, sanctions and bullying against Turkey will not work,” he said.
ROME (Reuters) – Italy should scrap a clause in its constitution obliging it to run a balanced budget, deputy Prime Minister Luigi Di Maio said, adding that the government was not yet working on the matter. “I think that in future it should be cancelled,” Di Maio said in a television interview on Thursday evening. Di Maio said getting rid of the clause was in the “contract” drawn up by the ruling coalition made up of his own 5-Star Movement and the right-wing League before it took office in June. He said the government was now concentrating on keeping its pledges to guarantee a minimum income for the poor, cut taxes and reform the pension system to make it possible to retire earlier. The balanced budget constitutional amendment was approved by parliament in April 2012 during the euro zone debt crisis, under the government led by Mario Monti. It had been presented the previous year by Monti’s predecessor Silvio Berlusconi in an effort to calm financial markets as Italy’s borrowing costs increased. The clause came into effect from 2014 but since then Italy has never achieved a balanced budget and parliament has voted to make a temporary exception each year to approve the governments’ spending plans. The new 5-Star/League administration says the best way to bring down public debt is by investing more to boost economic growth, rather than try to balance the budget each year. The government contract said the balanced budget rule needed changing because it “makes it impossible to adopt effective anti-cyclical policies.” However, Prime Minister Giuseppe Conte said on Wednesday the government had no plan to scrap the balanced budget clause. “It’s there and it’s staying there,” he said when asked about the issue at a news conference.
Exxon Mobil signed a letter of intent (LOI) to support the proposed $2bn Permian Highway Pipeline (PHP) Project in the US.
Under the LOI, Exxon Mobil will serve as a shipper on the proposed Permian Highway pipeline project, which is being developed by the joint venture of Kinder Morgan subsidiary Kinder Morgan Texas Pipeline (KMTP), Apache and EagleClaw Midstream Ventures. The LOI allows ExxonMobil subsidiary XTO Energy to contract for up to 450,000 dekatherms per day (Dth/d) of capacity on the pipeline. XTO Energy president Sara Ortwein said: “We are committed to supporting development of the infrastructure needed for our planned production growth in the Permian Basin. “The Permian Highway Pipeline will provide additional capacity for reliable transportation of natural gas to the U.S. Gulf Coast.” The 430-mile PHP Project is intended for transportation of excess natural gas produced from the Permian Basin to the market areas along the Texas Gulf Coast. With a design capacity of up to two billion cubic feet per day (Bcf/d), the of 42-inch pipeline will transport the natural gas from the Waha, Texas, area to the US Gulf Coast and Mexico markets. Scheduled to be commissioned in late 2020, the PHP project is subject to the signing of definitive agreements and the receipt of construction permits. Kinder Morgan Natural Gas Midstream president Sital Mody said: “We are very pleased to have an industry leader like ExxonMobil support our project and are encouraged by the significant progress we have made with our co-developers and other potential shippers to rapidly shore up commitments. “We expect this development will accelerate our path to a final investment decision.” Earlier, KMTP and EagleClaw agreed to be the initial partners, each with a 50% ownership interest in the project. In addition, Apache and EagleClaw will serve as significant shippers on the proposed pipeline. Apache will also have the option to acquire stake from the initial partners.
Will there be a summer swoon, or a rocket rally? Markets are wound tight, despite a typical seasonal slowdown. It’s the second week of August. There’s not a lot of news, half the trading community is out, volumes are low, and stocks are moving in a narrow range. And yet, the markets can easily move very quickly. “I think we’ll see a big move before Labor Day, but I’m uncertain which direction it will come,” Miller Tabak’s Matt Maley told me. That’s typical of market sentiment right now: a feeling that the complacency could change very quickly. “There are a lot of bets across the table,” UBS’ Art Cashin told me Thursday morning. He’s right, there are a lot of lopsided bets being made on stocks, bonds, and the dollar. What kind of bets?
1) All the major stock indices are at or near record highs. And yet there is considerable anxiety about a market pullback, led by technology. Just this morning, Morgan Stanley downgraded the semiconductor industry, saying the semiconductor cycle is showing signs of overheating. Maley has rotated into defensive names like health care: “If you’re in those names, you’ll have some downside protection, but should still be able to participate if the market breaks out further,” he told me.
2) Volatility (VIX) is near the lows for the year, about as low as it can go. With the exception of a good part of 2017, the VIX has rarely remained near 10 for very long. Hedge funds appear to have taken exposures down into the less liquid August period. The VIX curve has steepened: short-term volatility has dropped considerably, call buying has increased.
“Trump is on vacation, but with the VIX this low, the hedge funds seem happy to take the summer off,” Peter Tchir, Macro Strategist at Academy Securities, told me. “The ‘sell volatility’ strategy seems very overcrowded to me, and I have been encouraging clients to bet against it.”
He expects a plus or minus five percent move in the S&P 500 by mid-September.
3) Traders are continuing to heavily short Treasuries, betting that rates will be rising as the Federal Reserve continues to push up short-term rates. Yet buyers of long-term Treasuries have been unusually persistent, contributing to a flattening of the yield curve.
4) Inflation numbers have remained relatively tame, but it took very little to get the markets very worried earlier in the year. Jim Paulsen at Leuthold Group noted that “it was inflation/overheat/Fed which began this correction in January and the bad wage number which worsened it in February. Since, we have not had any more bad wage numbers. However, aren’t we just another one-off “Bad” Payroll Friday from being back again in February?”
5) Traders are continuing to bet the dollar rally will continue. Speculators have raised bullish bets on the dollar to the highest levels since January 2017. There’s been particular weakness in the Chinese yuan in conjunction with trade war rhetoric, but also in Russia, Turkey, and some emerging market currencies. The pound has made a new low, the euro is not acting well. This should be a significant headwind for international equities, but it hasn’t been:
“It’s been impressive the market is holding up so well with the dollar grinding higher,” Alec Young, Managing Director for Global Markets Research at FTSE Russell, told me.
6) Traders have continued to express surprise that the growing China trade war has made such a small impact on our markets. “China’s markets have bared a significant burden while our markets continue to ignore it and climb higher,” Michael O’Rourke from Jones Trading told me. “If [China President] Xi decided to aggressively ramp up his rhetoric in the next few weeks prior to the comment period ending (9/6) for our next $200 Billion in tariffs it could create volatility in a thin tape,” he said.
MILAN (Reuters) – European shares fell on Friday morning as worries over a plunging Turkish lira weighed, with banks most exposed to the country among the biggest losers. Shares in France’s BNP Paribas (BNPP.PA), Italy’s UniCredit (CRDI.MI) and Spain’s BBVA (BBVA.MC) fell by around 3 percent after the Financial Times reported that the European Central Bank is concerned about their exposure to Turkey in light of the lira’s dramatic fall. While most sectors were trading in negative territory, banks were the biggest sectoral fallers, down 1.3 percent. By 0714 GMT, the pan-European STOXX 600 index was down 0.5 percent. “There are some big moves still in Turkey and Russia that are preventing everyone from enjoying the summer,” said Deutsche Bank strategists Jim Reid and Jeff Cai in their morning note. Elsewhere, a profit warning from K+S (SDFGn.DE) sent shares in the German potash miner tumbling 8.8 percent to the bottom of the STOXX index.
The Turkish lira has collapsed to an all-time low against the dollar, but the country’s leader has brushed aside concerns, telling Turks “we have our God.” The Turkish President Recep Erdogan then followed those comments up Friday by urging Turks to sell dollars and gold and buy lira. At around 8:00 a.m. ET Friday, the lira had fallen to $7.081, an almost 11 percent loss for the session. It has since pared some losses. As recently as April one dollar bought about four Turkish lira. The first wave of selling came early Friday after a Turkish delegation returned from the United States with apparently no progress on the detention of a U.S. pastor. The evangelist, Andrew Brunson, is charged with supporting a group blamed for an attempted coup in 2016. President Donald Trump said in July that the U.S. would place “large sanctions” on the country for the pastor’s detention. On Friday, Trump appeared to back that position up by posting on Twitter that he would double the level of tariffs on steel and aluminum to 20 percent and 50 percent respectively.
So far there has been no confirmation to CNBC of the policy from the United States Department of Commerce.
Late Thursday, and prior to Trump’s tweet, Erdogan said he would stand up to pressure from the United States. “There are various campaigns being carried out. Don’t heed them,” Erdogan said Thursday. “Don’t forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now,” Erdogan told supporters. On Friday afternoon Erdogan dug in again, calling for citizens to convert out of dollars and gold and buy the lira to help fight a “national struggle”. In response, the currency renewed its sell-off. In his speech in the northeastern city of Bayburt, Erdogan added that he would decisively defend the country against economic attacks. The lira’s three-month implied volatility gauge hit its highest since late 2008. Implied volatility shows the market’s opinion of the currency’s potential moves. If the implied volatility is high, the market things the currency has potential for large price swings in either direction. The euro dropped 0.5 percent against the dollar on Friday morning, following reports that the European Central Bank (ECB) is concerned over the impact of a weak Turkish lira on European banks. According to the Financial Times, the lira’s depreciation could hurt European banks such as Spain’s BBVA, Italy’s UniCredit, and France’s BNP Paribas in particular.
He added however that while banks in Turkey remained in reasonable shape, the country did have a problem with its balance of payments that has occurred because the economy had been allowed to overheat. “Ultimately now, there is zero credibility in the Central Bank of Turkey and zero credibility in Turkish policy making. Whatever they do, the market doesn’t believe them,” Ash said. Turkey’s economy is seen as particularly fragile due to its high level of debt that is priced in dollars. The more the lira weakens, the more expensive that debt becomes. The latest estimates from the International Monetary Fund (IMF) show that the total amount of Turkish debt payable in other currencies is more than 50 percent of the country’s gross domestic product. Inflation in the country has been rampant with consumer prices rising almost 16 percent in July alone. While the country’s central bank has raised interest rates in the past to support the currency and quell inflation, the most recent meeting in July saw the Turkish central bank unexpectedly hold its benchmark interest rate at 17.75 percent. Erdogan has repeatedly insisted that rates should not be raised too high, triggering suggestions that the central bank doesn’t act with full independence. Berat Albayrak, Turkey’s finance minister, is set to reveal “a new economic model” later Friday.
‘Space Force all the way!’ Trump tweets
President Donald Trump touted his proposed “Space Force” on Thursday, as he prepared to host a roundtable on prison reform at his golf club in Bedminster, N.J.
‘ALL THE WAY’ FOR SPACE FORCE
Trump tweeted “Space Force all the way!” as Vice President Mike Pence outlined goals to have the proposed military branch operational by 2020. Trump didn’t go beyond his tweet, but Pence said in a speech that the president wants Congress to authorize $8 billion over the next five years to launch the effort.
The group Taxpayers for Common Sense called the idea “a waste of money,” noting the existence of the Air Force Space Command and the Navy’s and Army’s space-related operations.
Space Force all the way!
— Donald J. Trump (@realDonaldTrump) August 9, 2018
Trump was due to meet with governors, state attorneys general and other officials on prison reform. The president backs the First Step Act, which passed the House in May. The measure would provide $250 million over five years to develop programs that reduce recidivism and give prisoners incentives for good behavior.
Trump also tweeted an endorsement for Florida Rep. Ted Yoho and once again criticized the special counsel’s Russia probe, calling it a “Rigged Witch Hunt.” The president’s lawyers have reportedly rejected Special Counsel Robert Mueller’s terms for an interview in the probe. Mueller is investigating whether Trump’s associates colluded with Russia to interfere in the presidential election, as well as whether Trump tried to obstruct justice. Trump denies collision and obstruction.
This is an illegally brought Rigged Witch Hunt run by people who are totally corrupt and/or conflicted. It was started and paid for by Crooked Hillary and the Democrats. Phony Dossier, FISA disgrace and so many lying and dishonest people already fired. 17 Angry Dems? Stay tuned!
— Donald J. Trump (@realDonaldTrump) August 9, 2018
Congressman Ted Yoho of Florida is doing a fantastic job and has my complete and total Endorsement! Tough on Crime and Borders, Ted was really helpful on Tax Cuts. Vote all the way for Ted in the upcoming Primary – he will never let you down!
— Donald J. Trump (@realDonaldTrump) August 9, 2018
MOSCOW — Russia’s government slammed as “unacceptable” on Thursday. The U.S. State Department announced the new punitive measures on Wednesday for the Kremlin’s alleged involvement in a , saying the U.S. had made the determination this week that Russia used the Novichok nerve agent to poison former Russian intelligence officer Sergei Skripal and his daughter, Yulia. Russia has vehemently denied any involvement in the poisoning. Kremlin spokesman Dmitry Peskov said Russia “still retains hopes of building constructive relations with Washington,” but that President Vladimir Putin’s regime considers “categorically unacceptable the linking of new restrictions, which we as before consider illegal, to the case in Salisbury.” “Once again we deny in the strongest terms the accusations about the possible connection of the Russian state to what happened in Salisbury. This is out of the question. Russia did not and does not have, and could not have, any connection to the use of chemical weapons. What’s more, we cannot even say for sure what exactly and how it was used in Britain, since we don’t have any information or any response to our proposal for a joint investigation with Britain into this incident, which concerns us greatly. So linking these events is unacceptable to us, and just as with previous U.S. sanctions we believe are absolutely illegal and against international law,” Peskov told reporters.
The U.S. will also ban Russia from receiving U.S. weapons or military technology and financial assistance. State Department officials told reporters on a call that the economic impact of the sanctions would be in the range of “hundreds of millions of dollars” and would target electronic devices and engines, for example. There could also be a second round of sanctions that would be “more draconian” than the first round, the officials said. Russia would be subjected to new sanctions unless it agreed not to use chemical or biological weapons against its own citizens, the State Department said.
WASHINGTON (Reuters) – The United States will begin collecting tariffs on another $16 billion (£12.4 billion) in Chinese goods on Aug. 23, the U.S. Trade Representative’s office said on Tuesday as it published a final tariff list targeting 279 import product lines. USTR said that only five product lines were deleted from a list initially proposed on June 15, but semiconductors, among the largest categories, remained on the list. The latest list brings to about $50 billion in goods that now face a 25 percent tariff that U.S. President Donald Trump has imposed on Chinese imports in an escalating trade war over China’s intellectual property practices and industrial subsidy policies. China has vowed to match Washington’s tariff moves with duties on an equivalent worth of U.S. products.
More women candidates than ever will contest US governorships and House seats in November’s mid-term elections. After Tuesday’s primaries across four states, there are now 11 female nominees for governor and at least 185 for the House of Representatives. The results were hailed as a continuing success story by activists for women in politics. There was also a key election for a House seat in Ohio, in which President Donald Trump claimed victory. But US media said the race was still too close to call, in a safe Republican seat held by them since 1983. The outcome could indicate whether Democrats have a chance to overturn the Republican majority in the House in November After polling closed in the four states holding primaries on Tuesday – Kansas, Michigan, Missouri and Washington – it became clear women had broken records for gubernatorial and House nominations. Victories for Gretchen Whitmer (Michigan) and Laura Kelly (Kansas) in Democratic primaries mean 11 women will contest governorships in November – one more than the previous 1994 record.
At least 182 female major party nominees will run for the House, beating the record of 167 from 2016. Another three women are leading in close primary contests. Debbie Walsh, director of the Center for American Women and Politics (CAWP) said: “This has been an election season of records for women candidates, and tonight continues that story.” Ms Whitmer will in fact lead a four-strong, all-women ticket for the Democrats at state level in Michigan. In Kansas, 38-year-old Sharice Davids – a gay ex-mixed martial arts fighter – won her primary and could become the first Native-American woman elected to Congress. Ms Davids, a member of the Ho-Chunk Nation, wasraised by a single mother who worked as a drill sergeant in the US Army. Her campaign ran adverts showing her hitting a punching bag.
Against euro in particular, sterling has more room to slide, says BNY Mellon analyst
The British pound slumped to a level not seen since October 2017 versus the euro on Wednesday, and this could open up the ailing U.K. currency to even more pain, wrote Simon Derrick, chief currency strategist at BNY Mellon. The euro EURGBP, +0.5690% breached the psychologically important level of £0.90 earlier on Wednesday for the first time in 10 months, rising to a high of £0.9018. The shared eurozone currency last bought £0.9006, up from £0.8965 late Tuesday in New York. Against the U.S. dollar, the GBPUSD, -0.3942% it a one-year low on Wednesday. “Given the pound’s long-standing propensity to trend aggressively and the fact that it is threatening to move into historically more volatile territory during thinner August trading conditions, the risk is that a move beyond £0.90 could spark a rapid acceleration higher in the price of the euro,” Derrick said. During times with lower volumes, pricing can move more erratically. The euro-sterling pair has only seen a few trading days above that benchmark since the euro’s inception in January 1999, Derrick said. “Not only has the territory above £0.90 been infiltrated relatively infrequently, it has also tended to see significantly higher levels of realized volatility,” he added. The euro’s all-time closing high versus the U.K. currency was £0.9746 on Dec. 30, 2008, Derrick wrote. A sharp weakening of the pound versus its eurozone rival could then become a political issue itself, Derrick warned. “One risk from a rapid weakening of sterling from current levels is that it could trigger a spate of headlines in the U.K. media,” he said. The ailing pound led to higher U.K. inflation, which last stood at 2.4% in June, above the Bank of England’s target of 2%. The higher consumer prices factored into the BOE’s decision to raise interest rates last week, which should ordinarily have supported the pound. But not this time. That said, with little intervention — verbal or otherwise — since the pound began its tailspin after the Brexit vote, having the currency slide further is clearly an option for politicians and policymakers, Derrick said. “Nevertheless, such a development could prove a complicating factor ahead of a September and October that are already filled with a number of potential stumbling blocks for sterling,” he added. The coming months will feature continued Brexit discussions between London and Brussels, in an effort to salvage the relations and avoid a so-called ‘hard Brexit’ in which no predefined roadmap would be in place by the time the U.K. officially leaves the European Union in March 2019. Moreover, U.K. Prime Minister Theresa May’s shaky cabinet is at risk after she saw a slew of resignations earlier this summer.
MOSCOW (Reuters) – The rouble weakened and shares in Russia’s top lenders Sberbank and VTB fell on Wednesday after the Kommersant daily said they could be banned from operating in the United States under proposed U.S. sanctions legislation. A vendor places Russian rouble banknotes into a cash register at a grocery shop in the Siberian city of Krasnoyarsk, Russia, August 6, 2015. REUTERS/Ilya Naymushin Kommersant published what it said was the full text of a draft U.S. law outlining possible penalties against Russia. The document here cited potential restrictions on the operations of several state-owned Russian banks in the United States. Republican and Democratic U.S. senators introduced the legislation earlier this month to impose stiff new sanctions on Russia and combat cyber crime, the latest effort by lawmakers to punish Moscow over its alleged interference in U.S. elections and its activities in Syria and Ukraine. The measure’s prospects are unclear. It would have to pass both the Senate and House of Representatives and be signed into law by President Donald Trump. Shares in Russia’s largest lender Sberbank (SBER.MM) dropped to 195 roubles on the Kommersant report, their lowest since mid-April, before pairing losses to 197.2 roubles as of 0940 GMT, down 2.2 percent on the day. Shares in Russia’s second-largest bank VTB (VTBR.MM) were down 1.8 percent, underperforming the benchmark stock index MOEX that declined 1.1 percent to 2,287.9 .IMOEX. Russian business conglomerate Sistema (AFKS.MM) saw its shares fall 3.5 percent, hit by a threat of targeted sanctions after Republican Ileana Ros-Lehtinen, the most senior Representative from Florida, said on her Twitter account on Tuesday that an investigation was underway into Sistema’s chairman Vladimir Yevtushenkov for “operations in illegally annexed Crimea.”
BEIJING/WASHINGTON (Reuters) – China is slapping additional tariffs of 25 percent on $16 billion (£12.4 billion) worth of U.S. imports from fuel and steel products to autos and medical equipment, the Chinese commerce ministry said, as the world’s largest economies escalated their trade dispute.
The tariffs will be activated on Aug. 23, the ministry said, the same day that the United States plans to begin collecting 25 percent extra in tariffs on $16 billion of Chinese goods.
The United States published its final list of goods subject to the new tariffs on Tuesday.
China’s final list announced on Wednesday differs from an earlier draft it published in June, which included crude oil. The number of categories of goods subject to tariffs rose to 333 from 114 in the June draft, although the total value is unchanged.
The U.S. action that prompted the Chinese retaliation was the latest by President Donald Trump to put pressure on China to negotiate trade concessions, after Washington imposed tariffs on $34 billion in goods last month. China has vowed to retaliate with equivalent tariffs against any U.S. action.
“This is a very unreasonable practise,” the Chinese commerce ministry said of the U.S. action on Wednesday as it rolled out China’s counter-tariffs.
To compensate for the gap on its tariff list caused by the exclusion of crude oil, China added fish meal, wood waste, paper and paper waste, metal scraps, and various types of bicycles and cars, among other products.
Last week, China proposed additional tariffs on another $60 billion of U.S. goods after Trump raised planned tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent.
So far, China has now either imposed or proposed tariffs on $110 billion of U.S. goods, representing the vast majority of its annual imports of American products. Big-ticket U.S. items that are still not on any list are crude oil and large aircraft.
A spokeswoman for the U.S. Trade Representative’s office could not immediately be reached for comment on China’s retaliation announcement or whether this would trigger Trump’s next round of threatened tariffs on $200 billion worth of Chinese goods.
USTR is conducting a public comment period for those tariffs, which could reach 25 percent, due to end Sept. 5. It would take a few more weeks to revise the list and make programming changes at U.S. Customs and Border Protection to begin collecting the duties.
Gary Hufbauer, a senior fellow and trade expert at the Peterson Institute for International Economics in Washington, said he expected that there would be little to stop further escalation of the U.S.-China tariff war as both sides dig into entrenched positions.
“My expectation is that U.S. tariffs on $250 billion of imports from China will be in effect about a month prior to the November U.S. elections. That’s soon enough to be used by Trump as a rallying argument, but late enough so that adverse effects will not occur before January 2019. Of course, China will retaliate, probably dollar for dollar,” Hufbauer said.
China, however, would run out of U.S. imports to levy, as it bought only $130 billion worth of American goods last year. It would likely have to impose penalties on U.S. companies doing business in China to make up the difference.
NEW YORK (Reuters) – Oil prices fell after Chinese import data showed a slowdown in demand, weighing on world equity markets which fell modestly, even as U.S. technology shares extended recent gains. Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 24, 2018. REUTERS/Brendan McDermid China announced retaliatory trade tariffs in response to the United States’ decision to impose 25 percent tariffs on another $16 billion of Chinese goods starting on Aug. 23. Stock markets had recently continued to rise amid sturdy corporate results and data, despite the continuing trade battle between the United States and China, and the U.S. benchmark S&P index closed Tuesday less than half a percent off record highs hit on Jan. 26. “The S&P and the stock market are telling you how important the tariffs are, and the market is close to making new highs,” said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Florida. “You’ve got full employment and wages are going up. Small business optimism is about the highest it’s ever been. All of that is driving this.” Amazon, Facebook and Alphabet were among the biggest positive influences for the S&P 500 on Wednesday. The Dow Jones Industrial Average fell 62.04 points, or 0.24 percent, to 25,566.87, the S&P 500 lost 2.33 points, or 0.08 percent, to 2,856.12 and the Nasdaq Composite dropped 4.16 points, or 0.05 percent, to 7,879.51. MSCI’s gauge of stocks across the globe shed 0.08 percent, while the pan-European FTSEurofirst 300 index lost 0.20 percent, In the oil market, the U.S.-China trade dispute weighed on prices. U.S. crude fell 3.92 percent to $66.46 per barrel and Brent was last at $71.92, down 3.66 percent on the day. China’s crude imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a dropoff in demand from the country’s smaller independent, or “teapot,” refineries. Retaliatory trade tariffs by China briefly boosted the dollar index, which rose as high as 95.417, near a more than one-year peak of 95.652 hit on July 19, before dropping back to near flat on the day. The index has struggled to break much above the 95.5 level, which it has tested multiple times in the past two months. The dollar index, tracking it against a basket of major currencies, rose 0.01 percent.
Bitcoin fell sharply on Wednesday after the U.S. Securities and Exchange Commission (SEC) delayed a decision on a proposed bitcoin exchange-traded fund (ETF), which would have been the first financial product of its kind. Cryptocurrency markets fell as a result. Bitcoin was down around 8 percent from 24 hours ago at 10.53 a.m. London time, trading at just over $6,500, according to data from CoinDesk. It’s value had fallen over $9 billion. Investment firm VanEck teamed up with Solid X, a financial service company, earlier this year in a bid to launch an ETF that is backed by actual bitcoins rather than futures. An ETF is a financial product that tracks the price of an asset and is listed on an exchange. It means that investors don’t actually have to buy the underlying asset. ETF’s are seen as a way for institutional investors to get into cryptocurrency investing in a safer way than buying bitcoin on a crypto-asset exchange. This is VanEck’s third attempt to push a bitcoin ETF through, having been rejected by the SEC twice previously. On this occasion, the SEC said that it is pushing out its decision until September 30. Bitcoin, which is the world’s largest cryptocurrency by market capitalization or value, has fallen dramatically from the the near-$20,000 record high it hit in December 2017. But bitcoin has recovered from June, when it fell below $6,000. And interest in the virtual currency appears to have increased. Bitcoin’s share of the entire cryptocurrency market is at its highest level this year and near where it was when the digital coin hit its highest price level in history. There are a number of applications underway to get a bitcoin ETF listed, but so far none have been approved by the SEC. A second attempt by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini, to list their ETF was recently rejected by the SEC.
India officially entered the ongoing global trade war in June when it announced retaliatory tariffs against Washington’s steel and aluminum import duties. If implemented, the South Asian nation risks a targeted response from President Donald Trump’s White House. New Delhi’s proposed tariff hikes on 29 U.S. products — including almonds, apples, walnuts and certain stainless steel products — are worth $241 million and were meant to go into effect on Aug. 4. But Prime Minister Narendra Modi’s government decided last week to delay the hikes, and may postpone tariffs until next month amid ongoing negotiations with U.S. officials, according to local news outlets. If the two countries cannot reach a deal, New Delhi’s tariffs will go ahead as planned — a move that could push Washington to respond with India-specific actions, similiar to what it’s done with China. That, in turn, could spell trouble ahead for Modi as he campaigns for re-election next year, analysts say. If the White House turns its attention to India’s biggest exports to the U.S. — such as diamonds, seafood, auto parts and medicine — that could be risky for Modi and the Indian economy, said Amitendu Palit, a senior fellow specializing in trade and economic policy at the National University of Singapore. Trump’s team could also pressure on New Delhi to open up its agriculture and dairy industries, which are politically sensitive sectors in India’s rural-based economy, Palit continued. The world’s largest democracy is known for high levies on agricultural imports as a means to safeguard the livelihood of its massive farmer population. Recent droughts and falling commodity prices have also triggered a hike in Indian import duties. In February, the government doubled levies on sugar to 100 percent, while chickpeas saw an increase to 40 percent. The U.S. has previously urged India to keep agricultural tariffs low but since India’s tit-for-tat measures mostly focus on agriculture, Washington now has a fresh opportunity to up the ante. India boasts competitive advantages over the U.S. on services such as information technology, and its service exports are already under threat as the Trump administration tightens H-1B visa rules. Scores of Indian IT professionals are presently employed in the world’s largest economy through the H-1B visa, and stricter procedures on issuance could limit the number of Indians working there. “As the U.S. government tightens immigration and offshoring work, Indian authorities are likely to stay alert on the possibility that more sensitive and crucial sectors might fall under the radar next, including pharmaceuticals, for which the U.S. has already tightened vigilance and quality checks,” said Radhika Rao, economist at Southeast Asia’s largest bank DBS. New Delhi’s decision to fight back may have been surprising to some since it isn’t a major exporter of steel and aluminum heading stateside. In 2017, the U.S. accounted for about 2 percent of India’s steel exports, according to data from IHS Global Trade Atlas. And only 2 percent of Indian aluminum exports go the the U.S., AFP reported. But, given the longstanding history of bilateral trade frictions, India’s position isn’t completely out of the blue. New Delhi and Washington have both brought cases against each other before the World Trade Organization dispute settlement body several times in recent years. In 2003, India complained that American textiles and clothing were being protected from import competition. And in 2013, the U.S. opposed India’s national solar program, claiming it discriminated in favor of domestic firms. “Trade issues have been an irritant in (U.S.-India) ties for years, so this is not entirely new,” said Dhruva Jaishankar, a fellow in foreign policy at Brookings India, referring to India’s response. Modi is believed to be following in the footsteps of China, the European Union and Canada, which have all announced countermeasures against Washington.
Tesla boss Elon Musk has suggested via Twitter that he is “considering” taking the electric car firm private. In his tweet, Mr Musk said he could buy outstanding shares in the firm for $420 each, around a fifth higher than the share’s current price. “Funding secured”, the tweet added, offering no further details on where the funds would come from or when. The firm’s shares climbed after the tweet, but Nasdaq later suspended trading pending an announcement. Tesla did not immediately respond to a request for comment. Unlike publicly listed companies, private firms do not have to share details of their finances and operations. They are also shielded from the ups and downs of the stock market.
If Tesla were taken private at $420 per share, it would be one of the largest such transactions in history – worth more than $80bn, including the firm’s debt. At first glance, it was not clear how seriously to take Mr Musk’s messages. While Mr Musk has previously discussed the drawbacks of being a public company, he has also used his Twitter account in ways that surprised investors. On April Fool’s Day, Mr Musk, who owns almost 20% of the company, joked on Twitter about Tesla going bankrupt. In follow-up tweets on Tuesday, Mr Musk said taking the company private would not lead to a single dominant shareholder, as investors could opt to retain their holdings. He planned to hold onto his shares and hoped to continue as chief executive, he added.
The tweets came after a separate report in the Financial Times that Saudi Arabia’s sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn. The article said the state fund, overseen by the powerful crown prince Mohammed bin Salman, had been interested in buying newly issued shares. The report, combined with Mr Musk’s tweets, stirred further speculation about Tesla, which is spending heavily as it ramps up production of its latest car, the Model 3. The firm reported a record loss in its most recent quarter, and some analysts say it will need to raise money in order to survive. However, Mr Musk has said he has no plans to do so and promised that the firm will be profitable in the second half of the year, barring any unforeseen events.
The news comes as sources say Cohen is preparing to flip on President Trump.
President Trump’s former longtime personal attorney, Michael Cohen, is reportedly under investigation for possible tax fraud, the Wall Street Journal reported Tuesday. The development comes as Cohen is reportedly preparing to tell Special Counsel Robert Mueller, who is investigating Russian interference in the 2016 election, that the president “knew about and approved” a June 2016 meeting between several Trump campaign associates and a Russian lawyer who had promised damaging information about Trump’s then-campaign rival, Hillary Clinton, months before the election, per Politico. Cohen is currently being investigated by federal prosecutors in New York to determine whether he underreported income from his troubled taxi business on his federal tax returns, the Journal reported, citing sources familiar with the investigation.
Maya MacGuineas is the president of the Committee for a Responsible Federal Budget, a nonpartisan budget advisory group in Washington, D.C. The views expressed are her own. Read more opinion articles on CNN. (CNN)As a result of an unprecedented debt binge by Congress over the past year, the national debt is about to roar back to life as a pressing issue after years of hibernation. In 2010, it was among the nation’s top concerns. President Obama created a bipartisan national fiscal commission to come up with a plan to address it, but a big agreement ultimately failed. The debt didn’t go away. It has been growing by the second ever since, and the dominoes are about to start falling. The recent GOP tax cuts and bipartisan spending increases together will add $2.3 trillion to the national debt in the next10 years. If both are made permanent, that amount goes up to $5.1 trillion. And President Trump is already considering another $100 billion of capital-gains tax cuts. These sums accelerate a coming fiscal freefall and will push the nation over a psychological barrier as soon as next year: trillion-dollar annual deficits. The last time we had trillion-dollar deficits was during the Great Recession, and it was the understandable outcome of a huge economic downturn. This time it is purely self-imposed, resulting from irresponsible policy choices. And Washington is responding to trillion-dollar deficits by increasing them further with more plans for tax cuts and spending, with nary a peep about how to pay for them.
Several weeks ago, the Congressional Budget Office laid bare in its annual long-term outlook the dire picture, and the next 15 years won’t be pretty. Here is how it will play out, if nothing is done.
ALEXANDRIA, Va. (Reuters) – Rick Gates, a longtime business associate of U.S. President Donald Trump’s former campaign chairman Paul Manafort, on Monday testified at Manafort’s fraud trial that they committed crimes. Gates, whose testimony in federal court in Alexandria, Virginia, was continuing, was expected to be a star witness in the government’s case, having pleaded guilty in February and agreed to cooperate with prosecutors under a deal that could lead to a reduced sentence. Manafort’s attorneys have signaled they will seek to blame Gates and have accused him of embezzling millions of dollarsManafort has pleaded not guilty to 18 counts of bank and tax fraud and failing to disclose foreign bank accounts. The charges largely predate his five months on the Trump campaign but were the first to go to trial arising from Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 U.S. election.The jury has heard how Manafort made tens of millions of dollars for political work with pro-Russian politicians in Ukraine. Gates was Manafort’s partner in the consultancy. Mueller is also investigating possible coordination between Trump campaign members and Russian officials in the election campaign, but the charges against Manafort do not address that. The jury had heard testimony on Friday and Monday from accountant Cynthia Laporta, who described how Manafort and Gates doctored financial statements and backdated loans. In questioning Laporta on Monday, a prosecutor asked the accountant about a $10 million loan purportedly received by Manafort from Russian businessman Oleg Deripaska in 2006. Laporta, looking at a summary of loans to Manafort and his businesses, said she could not see any indication that the loan from Deripaska had been paid off. Since the trial started before U.S. District Judge T.S. Ellis last Tuesday, Manafort’s lawyers have kept their cross-examinations brief and at times refrained from attempting to rebut damaging testimony in detail. But Laporta’s testimony raised the stakes for Manafort, legal experts said. Testifying under immunity, she was the first witness to admit she knew accounting maneuvers Manafort and Gates requested of her were wrong and could be crimes. One accounting trick saved Manafort $500,000 in taxes, she said. Laporta detailed multiple examples in which Manafort and Gates sought to doctor financial records, first in order to lower Manafort’s taxable income and then later to inflate his income so that he could get bank loans. Some of the maneuvers were at the request of Gates, while others implicated Manafort, Laporta testified. Similar to prior witnesses, Laporta testified that Gates and Manafort were in lockstep but that Manafort was in charge.
WASHINGTON (Reuters) – Loan officers at U.S. banks reported easing lending standards for business loans for firms of all sizes while keeping terms for commercial real estate loans almost unchanged in the second quarter, a Federal Reserve survey showed on Monday. The officers also said they were seeing stronger demand for business loans from small firms and weaker interest in commercial real estate loans. “Notably, almost all domestic banks that reportedly eased standards or terms on [business] loans over the past three months cited increased competition from other lenders as a reason for easing, “ the U.S. central bank said in its quarterly survey. Other factors included increased tolerance for risk and increased liquidity in the secondary market, loan officers said. U.S. banks previously reported easing standards for many business loans and some commercial real estate loans in the first quarter. The Fed has raised interest rates seven times since it began a tightening cycle in December 2015, including twice so far this year. The Fed is forecasting another two rate rises in 2018, with investors seeing further hikes in September and December. Financial conditions have remained relatively loose even as policymakers continue to gradually raise rates amid a strong economy. Banks also reported lending standards for residential real estate loans and auto loans were little changed, according to the survey. A moderate share of banks said they had tightened standards on credit card loans. The Fed surveyed loan officers at 72 domestic banks and 22 U.S. branches and agencies of foreign banks.
The General Accountability Office (GAO) says the Trump administration is proceeding on the designs and locations of the border wall despite not having competed a full analysis of the varying costs. “By proceeding without key information on cost, acquisition baselines, and the contributions of previous barrier and technology deployments, DHS faces an increased risk that the Border Wall System Program will cost more than projected, take longer than planned, or not fully perform as expected,” GAO said in its report, dated July 30 but released to the public Monday. “Without assessing costs when prioritizing locations for future barriers, CBP does not have complete information to determine whether it is using its limited resources in the most cost-effective manner and does not have important cost information that would help it develop future budget requests,” the GAO wrote. The GAO is recommending that the Department of Homeland Security “analyze the costs associated with future barrier segments and include that analysis in future planning, and document plans for the planned secondary barrier replacement in the San Diego sector.
BRUSSELS (Reuters) – The European Union vowed on Monday to counter U.S. President Donald Trump’s renewal of sanctions on Iran, in a test of the EU’s ability to preserve a deal that saw Iran limit its nuclear ambitions in exchange for removing strict curbs on its economy. As Washington’s so-called “snapback” sanctions are reinstated on Tuesday, a new EU law to shield European companies will also take effect to try to mitigate what EU officials say is their “unlawful” reach beyond U.S. borders. Despite protests from European allies, U.S. Secretary of State Mike Pompeo said Washington would fully enforce the sanctions. EU diplomats said they were awaiting details on Monday on how they will be implemented. The EU and other parties to the 2015 deal, China and Russia, are working to maintain trade with Iran, which has threatened to stop complying with curbs on its nuclear work if it fails to see the economic benefits of relief from sanctions under the deal. “We deeply regret the re-imposition of sanctions by the U.S.,” the bloc said in a joint statement with the foreign ministers of France, Germany and Britain. They pledged to work on preserving financial flows and Iran’s oil and gas exports – a lifeline of its economy. EU officials hope the EU’s so-called blocking statute will mitigate the impact of U.S. sanctions for business, including by deterring U.S. authorities from enforcing some penalties. But they admit it may not be enough to convince European firms to brave U.S. penalties in order to do business with Iran. Senior U.S. administration officials brushed off questions about the EU measure on Monday, warning the risks were real for companies working in Iran. The new measure forbids EU persons from complying with U.S. sanctions or related court rulings and allows for firms to sue in court to recover potential damages from parties who withdraw from contracts due to U.S. sanctions. “For those who have exposure, there is no panacea. What this does is it provides a deterrence. It means that sanctions that are discretionary may never be applied,” one senior EU official said, adding that firms have rarely been fined under U.S. secondary sanctions in the past. “If they (sanctions) are applied, then that person can go to the court to recover that damage. Under the new rules, firms should apply for EU authorisation to wind down operations in Iran if it is doing so to comply with U.S. sanctions but not if it is a business decision – a distinction that may be difficult to make. The threat of EU penalties for European firms who fail to seek such a legal exemption for withdrawing from Iran due to U.S. sanctions has raised alarm among EU businesses that they could be penalised either way. Seeking to ease concerns, EU officials have stressed the measure seeks to “free not force” firms to remain invested in Iran.
EU officials say they will be strict in reviewing requests for exemptions – wary to undermine its effect by granting too many authorisations.
A number of other countries have asked EU officials for details on the blocking regulations as they also explore ways to bypass sanctions and their effect on oil markets: “There is a clear interest around the world,” one EU official said. Trump re-imposes sanctions on Iran With the U.S. administration taking a hard line on granting waivers from sanctions, many major companies from the oil and gas industry to car manufacturers and consumer goods firms have already announced that they are quitting the country. German exports to Iran alone fell by four percent in the first five months of 2018 after rising by 16 percent last year, the German Chamber of Commerce and Industry (DIHK) said.
“I had bad information.”
During an interview on Sunday’s edition of This Week, Jay Sekulow — one of President Trump’s lawyers — admitted he was wrong last year when he claimed Trump “wasn’t involved” in dictating a misleading statement for his son about the infamous June 2016 Trump Tower meeting between his campaign and Kremlin-connected Russians who offered political dirt on Hillary Clinton. After initially denying Trump was involved at all, Trump’s legal team — including Sekulow — sent the special counsel’s office a memo early this year acknowledging Trump had in fact dictated a statement for Donald Trump Jr. claiming the meeting he arranged was “primarily” about Russian adoptions — not, as revealed by emails Trump Jr. subsequently released, to obtain damaging information about Clinton.
In a statement sent to reporters, Trump said the Iran nuclear deal gave Iran the economic resources necessary to both continue funding terrorism around the world and searching for a path for a nuclear weapon. “The JCPOA, a horrible, one-sided deal, failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb, and it threw a lifeline of cash to a murderous dictatorship that has continued to spread bloodshed, violence, and chaos,” he wrote. The reimposed sanctions will hit Iran’s gold and precious metals trade and its automotive industry. The measures will take effect on August 7, 2018. Other sanctions on the country’s oil industry are expected to resume on November 5, 2018. Trump said he supported a new deal with Iran that actually addressed its long-standing financial backing for terrorists as well as its missile program. He also signed support for the Iranian people. “The United States continues to stand with the long-suffering Iranian people, who are the rightful heirs to Iran’s rich heritage and the real victims of the regime’s policies,” he wrote. “We look forward to the day when the people of Iran, and all people across the region, can prosper together in safety and peace.” The president signed his executive order at his club in Bedminster, New Jersey, an event that was closed to the press. The White House released Trump’s statement and a photo of him signing the document.
LONDON (Reuters) – A new race to build multi-billion dollar liquefied natural gas (LNG) plants is gaining momentum after a long hiatus in investments as energy giants sense a widening supply gap within five years. Spending on new, complex facilities that super-chill gas into liquid in order to allow its transportation dried up following the collapse in energy prices in 2014. Appetite was further dampened by fears that a plethora of LNG plants built since the late 2000s would lead to a large supply glut until early in the next decade. But sentiment has radically changed over the past year. Buoyed by rising oil prices and exceptionally strong demand from rapidly growing economies such as China and India, executives are increasingly confident conditions are once again ripe for new projects. Qatar, the world’s largest LNG producer, is preparing to expand its facilities by around one third to produce 100-108 million tonnes per year (mtpa) by 2023-2024. “The glut that people see I don’t see … If you just count on being pessimistic about the market, and don’t build expansions, you will never catch that upside when the market is up,” Saad al-Kaabi, the head of Qatar Petroleum, told Reuters in May. The state-owned company expects long-standing partners Exxon Mobil (XOM.N), Royal Dutch Shell (RDSa.AS), Total (TOTF.PA) and ConocoPhillips (COP.N) to help build and fund the new expansion phases as well as possibly new entrants, he said. A major change in the outlook happened after China strongly boosted imports of LNG in recent years to reduce coal burn in its fight against pollution. “The supply-demand balance definitely looks more favourable towards producers these days,” said Philippe Sauquet, the head of gas at France’s Total, the world’s second largest LNG trader after Shell. “China will continue to make the real difference in demand. I don’t see them slowing down. They are shifting attention to building more and more infrastructure,” Sauquet told Reuters.
President Donald Trump upped the ante in his attacks on the media early Sunday, unleashing a new broadside against journalists as “dangerous and sick,” and dividing the electorate. In a stream of posts on Twitter, the president continued to harangue the press as the “enemy of the people” and said it “can also cause war.” It came on the heels of a controversy stoked last week, when Trump revealed that he secretly met with the publisher of the New York Times in an off-the-record discussion. At rallies and on Twitter, the president often delights in blasting “fake news” as a destabilizing force in his presidency, with CNN, The Washington Post and The Times being the most regular targets of his ire. Yet Sunday’s remarks come at a time when even a few conservative commentators have urged him to dial back his anti-press rhetoric.On Saturday, right-leaning NYT columnist Bret Stephens penned an emotional piece entitled “Trump Will Have Blood on His Hands,” which took aim at Trump’s heated diatribes directed at the media. Describing several instances when Trump supporters have threatened him, Stephens wrote that “the president is not coyly urging his supporters to murder reporters, like Henry II trying to rid himself of a turbulent priest. But neither is he the child who played with a loaded gun and knew not what he did.” Last week, Trump revealed that he had met secretly with A.G. Sulzberger, the publisher of The New York Times. Trump called the interaction “very good and interesting,” but that description was disputed by Sulzberger. While the president did not state when he met with Sulzberger, he tweeted that the two parties discussed “the vast amounts of fake news, and how that fake news has morphed into phrase, ‘enemy of the people.'” Sulzberger said he expressed concern about Trump’s “deeply troubling anti-press rhetoric,” and that it was “eroding” the U.S. commitment to free speech and an unrestrained press.
(CNN)President Donald Trump is concerned about whether his son Donald Trump Jr. might have exposure in the special counsel’s Russia investigation, leading to his increasingly frenzied public agitation over Robert Mueller, sources close to the White House tell CNN. Trump has been concerned for months now that the Mueller probe could reach his family, and potentially his son-in-law Jared Kushner, but his focus has turned to his namesake in recent weeks, one person who speaks with Trump frequently tells CNN. This is one of several reasons Trump has upped his public attacks on Mueller, because he doesn’t want him touching his family, the person adds. Trump Jr. and his attorney have insisted he has always told the truth. But his claims publicly and to the Senate Judiciary Committee that he never told his father about the 2016 Trump Tower meeting with a Russian attorney promising dirt on Hillary Clinton have been contradicted by others in Trump’s orbit. Michael Cohen, Trump’s longtime attorney and former fixer, is said to be prepared to testify that the President knew about the Trump Tower meeting ahead of time, sources with knowledge of the matter told CNN. Trump has denied knowing about the meeting before it happened Others who have been close to the President — including his former White House communications director, Anthony Scaramucci, and former White House chief strategist Steve Bannon — have suggested the President at the very least knew shortly after the fact. The President denied that he is worried about the Trump Tower meeting in a Twitter post Sunday morning.
While Sen. Marco Rubio, R-Fla., admits President Donald Trump is justified to be “annoyed” by the cloud of Russia and special counsel Robert Mueller’s investigation, it is “best” for the president and the country if the investigation concludes unimpeded. “I believe it’s in the best interest of the president and of the United States of America and the American people for that investigation to run the course for all the truth to come out,” Rubio told “Fox News Sunday” host Chris Wallace. “And I think it’s the best thing that could happen for him, and I think it’s the best thing that could happen for the country.”Rubio did acknowledge the president has reason to be frustrated, particularly amid President Trump’s tweets this week calling for recused Attorney General Jeff Sessions “to stop this Rigged Witch Hunt right now, before it continues to stain our country any further.” “Obviously he is annoyed by that investigation continuing to go on because it’s about him – and he believes and has said repeatedly and emphatically that he did not collude with the Russians,” Rubio told Wallace. “I’m limited to what I can say because the Senate is still doing our investigation, but I am comfortable in saying this: If there was evidence, strong evidence of collusion, I guarantee it would have been leaked by now.” The best-case scenario for all, including the president and especially the American people, is for the “truth” to be revealed, Rubio concluded. “But let’s wait for the process to play itself out, and I think that’s what should happen,” Rubio said. “Mueller shall continue and finish his work and the truth should come out, and I think that’s in the best interest of everyone.”
President Donald Trump upped the ante in his attacks on the media early Sunday, unleashing a new broadside against journalists as “dangerous and sick,” and dividing the electorate. In a stream of posts on Twitter, the president continued to harangue the press as the “enemy of the people” and said it “can also cause war.” It came on the heels of a controversy stoked last week, when Trump revealed that he secretly met with the publisher of the New York Times in an off-the-record discussion. The Fake News hates me saying that they are the Enemy of the People only because they know it’s TRUE. I am providing a great service by explaining this to the American People. They purposely cause great division & distrust. They can also cause War! They are very dangerous & sick!
At rallies and on Twitter, the president often delights in blasting “fake news” as a destabilizing force in his presidency, with CNN, The Washington Post and The Times being the most regular targets of his ire. Yet Sunday’s remarks come at a time when even a few conservative commentators have urged him to dial back his anti-press rhetoric On Saturday, right-leaning NYT columnist Bret Stephens penned an emotional piece entitled “Trump Will Have Blood on His Hands,” which took aim at Trump’s heated diatribes directed at the media. Describing several instances when Trump supporters have threatened him, Stephens wrote that “the president is not coyly urging his supporters to murder reporters, like Henry II trying to rid himself of a turbulent priest. But neither is he the child who played with a loaded gun and knew not what he did.” Last week, Trump revealed that he had met secretly with A.G. Sulzberger, the publisher of The New York Times. Trump called the interaction “very good and interesting,” but that description was disputed by Sulzberger. While the president did not state when he met with Sulzberger, he tweeted that the two parties discussed “the vast amounts of fake news, and how that fake news has morphed into phrase, ‘enemy of the people.'” Sulzberger said he expressed concern about Trump’s “deeply troubling anti-press rhetoric,” and that it was “eroding” the U.S. commitment to free speech and an unrestrained press.
DUBAI (Reuters) – Iran’s Revolutionary Guards confirmed on Sunday it had held war games in the Gulf over the past several days, saying they were aimed at “confronting possible threats” by enemies, the state news agency IRNA reported. U.S. officials told Reuters on Thursday that the United States believed Iran had started carrying out naval exercises in the Gulf, apparently moving up the timing of annual drills amid heightened tensions with Washington. “This exercise was conducted with the aim of controlling and safeguarding the safety of the international waterway and within the framework of the program of the Guards’ annual military exercises,” Guards spokesman Ramezan Sharif said, according to IRNA. The U.S. military’s Central Command on Wednesday confirmed it has seen increased Iranian naval activity. The activity extended to the Strait of Hormuz, a strategic waterway for oil shipments the Revolutionary Guards have threatened to block. Guards commander Mohammad Ali Jafari “expressed satisfaction over the successful conduct of the Guards naval exercise, emphasizing the need to maintain and enhance defense readiness and the security of the Gulf and the Strait of Hormuz and to confront threats and potential adventurous acts of enemies,” IRNA quoted Sharif as saying. One U.S. official, speaking on condition of anonymity, said possibly more than 100 vessels were involved in the drills, including small boats. U.S. officials, speaking to Reuters on condition of anonymity, said the drills appeared designed to send a message to Washington, which is intensifying its economic and diplomatic pressure on Tehran but so far stopping short of using the U.S. military to more aggressively counter Iran and its proxies. Iran has been furious over U.S. President Donald Trump’s decision to pull out of an international agreement on Iran’s nuclear program and re-impose sanctions on Tehran. Senior Iranian officials have warned the country would not easily yield to a renewed U.S. campaign to strangle Iran’s vital oil exports. But Iran did not appear interested in drawing attention to the drills. Iranian authorities had not commented on them earlier and several officials contacted by Reuters this week had declined to comment. Last month, Iran’s Supreme Leader Ayatollah Ali Khamenei backed President Hassan Rouhani’s suggestion that Iran may block Gulf oil exports if its own exports are stopped. Rouhani’s apparent threat earlier in July to disrupt oil shipments from neighboring countries came in reaction to the looming U.S. sanctions and efforts by Washington to force all countries to stop buying Iranian oil.
President Trump’s strategy of becoming aggressively involved in the midterm elections is prompting concern among some Republicans who worry he’s complicating the political calculus for GOP candidates trying to outrun his popularity. Those Republicans worry their statewide candidates may rise or fall based on Mr. Trump’s standing, muddling their path to maintain control of Congress. But Mr. Trump has no plans to step out of the spotlight. He will hold a rally Saturdayand plans to host two fundraisers at the Trump National Golf Course in Bedminster, New Jersey, next week for House and Senate candidates, according to a campaign official with knowledge of the president’s events. The official spoke on the condition of anonymity to discuss details about the fundraisers that haven’t yet been publicly released. The president is casting himself as the star of the midterms, eagerly inserting himself into hotly contested primaries, headlining rallies in pivotal swing states and increasing his fundraising efforts for Republicans. Last week, Mr. Trump agreed to donate a portion of his reelection fund to 100 GOP candidates running in competitive House and Senate races. He’s expected to be even more aggressive in the fall. White House officials say he’s reserving time on his schedule for midterm travel and fundraising likely to surpass that of former presidents George W. Bush and Barack Obama. “This is now about Donald Trump,” said Al Cardenas, a former Florida Republican chairman. “It’s a high-risk, high-stakes proposition.” The question facing Republicans is whether turning out those Trump loyalists is enough to win in toss-up congressional districts or if their path to victory depends more on capturing a share of independents and suburban women turned off by Trump’s tumultuous first term. It’s a dilemma they will confront in 2018 and beyond. “If we lose the governor’s race for the first time in 20 years, all of a sudden President Trump’s chances of winning in 2020 diminish with a Democratic governor,” said Cardenas. “You can’t win a presidential election if you’re a Republican without winning Florida.” Mr. Trump’s aides argue no one energizes Republicans like the president, pointing to the throngs of thousands who wait in long lines to attend his rallies — he’s held 17 since taking office. The aides say the White House is taking a two-pronged approach, sending Trump to mobilize the base while other officials, such as his daughter Ivanka, can generate local headlines and help with voters who may not like the president’s aggressive style. The goal is to ensure that the occasional voters who turned out for Mr. Trump in 2016 cast ballots in the midterms. But there are some signs that Mr. Trump’s unpopularity with the general electorate may hamper more than help individual Republican candidates. While Republicans have won a series of special elections since Mr. Trump took office, they’ve captured smaller margins than in previous years. Democrats also had two high-profile upsets, nabbing victories in an Alabama Senate race and a Pennsylvania House race. The GOP is worried about a special congressional election Tuesday in a central Ohio district that Trump won by 11 percentage points in 2016. A Monmouth University poll released this past week showed the race tightening, leaving Republican Troy Balderson with just a 1-point edge. The survey found 46 percent of likely voters approved of Trump, while 49 percent disapproved. Hoping to shore up GOP support, Mr. Trump plans to host a rally in the district Saturday. His visit follows a Monday stop by Vice President Mike Pence. The president’s team keeps a close eye on data assessing whether Americans believe the country is headed in the right direction under Trump. And they point to Mr. Trump’s strength among Republican voters and an upbeat attitude about the nation’s economic climate as evidence Republicans will avoid the rough midterm elections that have afflicted previous administrations. Republicans are often forced to fend off questions about Trump-sparked controversies. In recent days, Mr. Trump publicly mused about a government shutdown sometime in the fall — a possibility that Republican congressional leaders fear would significantly hamper their electoral prospects.
The Saudi coalition intervened in Yemen’s civil war in 2015 to restore the internationally recognised government of exiled president Abd-Rabbu Mansour Hadi. Saudi Arabia accuses regional foe Iran of supplying missiles to the Houthis, which both Tehran and the Houthis deny.
NEW YORK/BEIJING (Reuters) – China’s targeting of U.S. liquefied natural gas and crude oil exports opens a new front in the trade war between the two countries, at a time when the White House is trumpeting growing U.S. energy export prowess. China included LNG for the first time in its list of proposed tariffs on Friday, the same day that its biggest U.S. crude oil buyer, Sinopec, suspended U.S. crude oil imports due to the dispute, according to three sources familiar with the situation. On Friday, China announced retaliatory tariffs on $60 billion (46.13 billion pounds) worth of U.S. goods, and warned of further measures, signalling it will not back down in a protracted trade war with Washington. That could cast a shadow over U.S. President Donald Trump’s energy dominance ambitions. The administration has repeatedly said it is eager to expand fossil fuel supplies to global allies, while Washington is rolling back domestic regulations to encourage more oil and gas production. “The juxtaposition here is clear: it is hard to become an energy superpower when one of the biggest energy consumers in the world is raising barriers to consume that energy. It makes it very difficult,” said Michael Cohen, head of energy markets research at Barclays.
The U.S. is the world’s largest exporter of fuels such as gasoline and diesel, and is poised to become one of the largest exporters of LNG by 2019. U.S.
LNG exports were worth $3.3 billion in 2017. China is the world’s biggest crude oil importer. China had curtailed its imports of U.S. LNG over the last two months, even before its formal inclusion in the list of potential tariffs. It had also become the largest buyer of U.S. crude oil outside of Canada, but Kpler, which tracks worldwide oil shipments, shows crude cargoes to China have also dropped off in recent months. It comes at a time when the United States has several large-scale LNG export facilities under construction, and after Trump’s late 2017 trip to China that included executives from U.S. LNG companies. China became the world’s second-biggest LNG importer in 2017, as it buys more gas in order to wean the country off dirty coal to reduce pollution. China, which purchased almost 14 percent of all U.S. LNG shipped between February 2016 and May 2018, has taken delivery from just one vessel that left the United States in June and none so far in July, compared with 17 in the first five months of the year.
Yellow metal sees fifth loss in six sessions
Gold futures fell Thursday, closing at a more-than-one-year low, as trade tensions between the U.S. and China resurfaced a day after the Federal Reserve affirmed its intention to lift rates further in 2018. Both factors have given the U.S. dollar more buoyancy in recent trade, weighing on commodities pegged to the currency. Rising trade animosities between Washington and Beijing were in focus on Wall Street, as the Trump administration threatened to more than double proposed duties on $200 billion of Chinese goods to 25%, up from an original 10%. That has weighed on global stock markets but has provided the U.S. dollar a lift, as global trade tensions have recently flared up. A measure of the dollar against a basket of six other currencies, the ICE U.S. Dollar Index DXY, +0.04% was up 0.5% at 95.095, with its week-to-date gain at 0.4%. The Bank of England’s interest-rate hike wasn’t enough to lift the British pound into positive territory versus the U.S. dollar on Thursday. The U.K. central bank upped its benchmark rate by 25 basis points to 0.75% in an unexpectedly unanimous vote. A stronger greenback makes assets priced in the U.S. unit more expensive to buy using other currencies. “Gold has no story going forward,” said Ira Epstein, managing director, at commodities broker Linn Group. Gold is now fighting a rising set of interest rates in America and it saw the Bank of England raise rates today and it’s going to have to deal with the fact that if Europe stabilizes rates there will start climbing,” he said. Rising yields of risk-free government bonds can dull the appeal of gold which doesn’t offer a yield. The Fed on Wednesday upgraded its assessment of the U.S. economy and hinted at another interest-rate hike as soon as September. The 10-year U.S. government bond yield TMUBMUSD10Y, -1.31% edged lower to 2.985%, after hitting a psychologically significant level at 3% and finishing late-Wednesday trade in New York at its highest yield since May 23 after the Fed’s policy update. “The markets got exactly what they had been expecting in terms of no rate increase this month and continued commitment to gradual normalization of rates,” said George Milling-Stanley, head of gold investment strategy at State Street Global Advisors. He believes “there is no reason to expect any significant impact on gold prices in either direction,” but “there is always the possibility of a small knee jerk bounce in gold now that the meeting is out of the way without any apparent increase in hawkishness on the committee.” In other metals trading, September silver SIU8, +0.26% lost 6.7 cents, or 0.4%, to $15.385 an ounce. September copper HGU8, +0.58% the base metal which has been the most vulnerable to concerns over trade clashes, fell a penny, or 0.4%, to $2.738 a pound. The industrial commodity has lost 2.3% so far this week. October platinum PLV8, +0.54% ended at $828.20 an ounce, up nearly 1.4%, while September PAU8, -1.08% added 0.4% to $915.50 an ounce.
BEIJING/SINGAPORE (Reuters) – China proposed retaliatory tariffs on $60 billion (46.14 billion pounds)worth of U.S. goods ranging from liquefied natural gas (LNG) to some aircraft on Friday, as a senior Chinese diplomat cast doubt on prospects of talks with Washington to solve their bitter trade conflict. The Trump administration tightened pressure for trade concessions from Beijing this week by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports. China vowed to retaliate while also urging Washington to act rationally and return to talks to resolve the dispute. The United States and China implemented tariffs on $34 billion worth of each others’ goods in July. Washington is expected to soon implement tariffs on an additional $16 billion of Chinese goods, which China has already announced it will match immediately. China has now either imposed or proposed tariffs on $110 billion of U.S. goods, representing the vast majority of China’s annual imports of American products. Last year, China imported about $130 billion of U.S. goods. China’s finance ministry unveiled new sets of additional tariffs on 5,207 goods imported from the United States, with the extra levies ranging from 5 to 25 percent. Timing will depend on the actions of the United States, the Chinese Commerce Ministry said in a separate statement. The U.S. side has repeatedly escalated the situation against the interests of both enterprises and consumers,” it said. “China has to take necessary countermeasures to defend its dignity and the interests of its people, free trade and the multilateral system.” A top adviser to U.S. President Donald Trump said the newly proposed tariffs were not as severe as the White House had been bracing for, and he warned China not to test Trump’s resolve. “They better not underestimate the president,” White House National Economic Council Director Larry Kudlow said in an interview on Fox Business Network. “He is going to stand tough.” The United States alleges that China steals U.S. corporate secrets and wants it to stop doing so, and is also seeking to get Beijing to abandon plans to boost its high-tech industries at America’s expense. Washington also wants China to stop subsidising Chinese companies with cheap loans, claiming that this allows them to compete unfairly. Trump has said he is determined to reduce the large U.S. trade deficit with China. The U.S. president has accused China and others of exploiting the United States in global trade, and has demanded Beijing make a host of concessions to avoid the new duties on $200 billion of Chinese goods, which could be imposed in the weeks after a comment period closes on Sept. 5. Beijing says the United States is deliberately creating the trade conflict, using bullying tactics, and ignoring international negotiating norms so that it can stop the rise of China as a competitor on
Toyota employs 137,000 people in the U.S. at its 10 factories and dealership network here, the company said in a statement. “They are not a national security threat,” Toyota said, alluding to President Donald Trump’s rationale for the increased tariffs. Trump has already slapped 25 percent tariffs on several billion dollars of goods from China and is investigating the possibility of imposing similar tariffs on imports from other countries, including autos and vehicle parts. The Trump administration has justified these tariffs by invoking Section 232 of Trade Expansion Act of 1962, which allows the government to consider tariffs on products when it is in the interest of national security. Tariffs will not just be painful for foreign corporations or investors, Lindland said. Forcing sudden changes to the automotive supply chain can create problems and raise consumer costs, she said. Even car parts can cross borders more than once during assembly, Lindland said, adding that it also has an effect that ripples outward toward dealers, mechanics and customers.
Any serious Iranian attempt to shut down both passages simultaneously could be a nightmare scenario for international commerce, or worse
The Trump administration says it wants to keep new cars affordable, but tariffs threaten to raise the cost of a new vehicle by thousands of dollars.
Every car sold in the United States, including those built at US factories, have many of their parts imported from foreign suppliers. If new cars get more expensive, people will be less likely to buy them. That’s not only bad for car buyers, automakers and autoworkers, it can cost lives — newer cars have safety features missing from older cars. Who says keeping the price of new cars in check can save lives? The Trump administration. When it announced a rollback of fuel economy standards Thursday, one of its arguments was that the tougher emissions rules would raise the cost of owning a new car by an average of $2,340. It said that would discourage people from buying safer cars, resulting in about 1,000 additional deaths a year. But the potential savings from abandoning the Obama-era fuel efficiency rules won’t cover the cost of the Trump administration’s proposed auto tariffs. A study this week by Experian said that a 25% tariff on imported cars and parts will raise the price of the 20 best-selling vehicles in the United States an average of
NEW YORK (Reuters) – Tesla Inc (TSLA.O) shares soared as much as 15 percent on Thursday, a day after the electric car maker reported quarterly results, and financial analytics firm S3 Partners said short-sellers were slammed with more than $1.1 billion in paper losses on the day. S3 said the day’s losses pushed the aggregate year-to-date performance of short-sellers in Tesla into the red. Short-sellers aim to profit by selling borrowed shares, hoping to buy them back later at a lower price. Tesla is the most shorted U.S. stock. Tesla short-sellers had been up $276 million in year-to-date mark-to-market profits prior to the day’s rally, and the short-sellers’ paper losses have now swelled to $831 million for the year, S3 data showed. “We are not seeing a large amount of buy to covers yet,” said Ihor Dusaniwsky, head of research at S3 in New York, referring to traders buying shares to close out an existing short position. “With such a large price move on the open, most short sellers that are looking to cover are waiting for a retracement before placing buy-to-cover orders,” he said.
Tesla shares were up 14.5 percent at $344.5 in late afternoon trading, a day after the company said it would produce its new Model 3 sedan at a profit, following several recent weeks in which output had stabilized.
The update buoyed hopes that the company led by Elon Musk will stanch its losses.
Tesla’s rapid cash burn and struggles at turning a profit have made it a favorite target for shorts, including some big names such as Jim Chanos, head of Kynikos Associates, and Billionaire hedge fund manager David Einhorn’s Greenlight Capital fund.
Since the beginning of 2016, Tesla is the fourth worst performing U.S. short bet, and short-sellers have lost $4.70 billion on a net basis over that period, according to S3 data.
A sharp rally in the electric car maker’s shares since early April has hurt short-sellers.
On Tuesday, Einhorn told investors that his bet against the stock had turned into heavy second-quarter losses at his Greenlight Capital fund.
“Long term short sellers will probably shrug off this loss, as they were down billions in the past and not only kept their positions but built them up,” said S3 Partners’ Dusaniwsky.
“But I would imagine shorter term momentum short sellers would be quick on the trigger to exit their positions after suffering a 10 percent loss in just one day,” he said.
(This story has been refiled to correct paragraph one to show the shares rose after the company reported quarterly results, not that shares rose after surprisingly strong earnings.)
Washington (CNN)Iran’s Islamic Revolutionary Guard is expected to soon begin a major naval exercise that could demonstrate its ability to shut down the Strait of Hormuz, a crucial conduit for global energy supplies, US officials say. The exercise in the Persian Gulf could begin as soon as the next two days, according to two US officials directly familiar with the latest assessment of the Revolutionary Guard’s troop movements. “We are aware of the increase in Iranian naval operations within the Arabian Gulf, Strait of Hormuz and Gulf of Oman. We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways,” Capt. William Urban, chief spokesman for US Central Command, told CNN. The Strait of Hormuz links the Persian Gulf to the Arabian Sea. The US Energy Information Administration calls it “the world’s most important oil transit chokepoint,” with 20% of oil traded worldwide moving through the waterway, which is about 30 miles wide at its narrowest point.
- The exercise comes as rhetoric from the IRGC towards the US has accelerated in recent days.
- It appears the IRGC is ramping up for a larger exercise this year than similar efforts in the past.
- The timing is unusual. These types of IRGC exercises typically happen much later in the year.
President Donald Trump said Wednesday his attorney general should terminate “right now” the federal probe into the campaign that took him to the White House, a newly fervent attack on the investigation that could imperil his presidency.
White House press secretary Sarah Huckabee Sanders scrambled to explain that Trump’s tweet was “not an order” and the president was not directing his attorney general to do anything. “It’s the president’s opinion,” she said. But Trump’s early morning tweetstorm again raised the specter that he could try to more directly bring special counsel Robert Mueller‘s Russia-Trump election-collusion probe to a premature end. And it revived the idea that the president’s tweets themselves might be used as evidence that he is attempting to obstruct justice. Meanwhile, Trump attorney Rudy Giuliani said negotiations are continuing to have Trump sit down for questions from Mueller, though the lawyer said, “I’m not going to give you a lot of hope that it’s going to happen.” He said both sides had exchanged proposals for conditions for such an interview, “and yesterday we got a letter back from them and now we’re in the process of responding.” Trump has raged privately in recent days that both the forces of government and the media are trying to undermine him. That includes trumped-up charges against his former campaign chairman, Paul Manafort, and distorting the outcome of the Helsinki summit to make it appear he was beholden to Russia, according to two Republicans close to the White House who were not authorized to discuss private conversations and spoke on condition of anonymity.
Trump was closely monitoring news coverage of the Manafort proceedings, which provoked the spate of incendiary tweets, according to the two Republicans and two White House officials.
“The president’s not obstructing, he’s fighting back,” said Sanders, dismissing the idea that Trump’s tweets could be tantamount to obstruction of justice. The most inflammatory of Trump’s tweets said, “This is a terrible situation and Attorney General Jeff Sessions should stop this Rigged Witch Hunt right now, before it continues to stain our country any further. Bob Mueller is totally conflicted, and his 17 Angry Democrats that are doing his dirty work are a disgrace to USA!”
The president’s anger came the day after the start of the trial of Manafort, who is facing federal charges of bank fraud and tax evasion. And while Mueller did not bring any election-related charges against Manafort, the specter of the Russian investigation is hanging over the Alexandria, Virginia, courthouse. And Trump’s White House.
It’s been a decade since the global financial crisis rocked the world. In the years since 2008, the U.S. and other countries put together the pieces of their broken economies, assessing what went wrong and trying to curb the abuses that could lead to another crisis. But today many factors that contributed to the implosion still pose a threat. Although Wall Street may not go gaga over home loans as it did leading up to the last panic, it’s only a question of time before the next speculative frenzy hits. Even with regulations in place, competition and greed push Wall Street to find a new way to get rich quick. And when it does, these four factors will make the ensuing financial crisis all the worse.
1. Big banks hold even more assets than before the crisis
One of the contributing factors to the 2008 global financial crisis was that so few banks owned so many assets. The top five banks owned nearly 45% of financial assets leading up to the crisis, and they own slightly more today (more than 46%). The top 10 banks control more than 55% of total assets. America’s approximately 5,700 other banks control the remaining 45%. Concentration in itself is not worrisome. There’s no reason big banks can’t keep making smart decisions. But concentration of assets becomes catastrophic when those banks are all doing the same (dumb) thing, such as writing poor loans or gambling against the value of homes via sophisticated insurance contracts (credit default swaps). Then other smart financial institutions are not large enough to step in and bail out the failing ones. So the government has to intervene. And whereas the banks may steer clear of speculative excess today, competition virtually ensures that, eventually, Wall Street will do dumb things again.
2. Banks retain high leverage
The banking sector is particularly prone to blowups because it uses a lot of debt (i.e., leverage), writing large loans against a small down payment. This is normal for the industry and is not especially worrisome, if banks are operated prudently. Here’s how the situation stacks up now versus 2008. Banks are using just a bit less leverage than previously (a higher percentage means less leverage). During good times leverage works wonders, because it rapidly increases the bank’s profitability. That’s why banks would like to use more leverage. But leverage does the opposite in bad times. When the value of houses plummets, banks are required to write off that value on their books, making the bank even more leveraged. If leverage keeps rising, the bank effectively becomes bankrupt. That’s why there is stringent regulation surrounding how much leverage a bank can take on, and why further regulations were developed in the aftermath of the crisis. In an industry with high leverage, the proverbial run on the bank can happen a lot faster than in other industries without leverage.
3. Limited prosecutions lead to moral hazard
No executives from “too big to fail” banks were prosecuted for issues related to the financial crisis. For that crisis, which many argue was due to banks’ criminal activities, the lack of widespread punishment creates “moral hazard.” In other words, if executives feel they are personally exempt from repercussions, they’re more likely to engage in bad behavior, especially if it benefits them financially.
Rather than pursue executives individually, prosecutors have tended to go after the companies. They’ll fine the bank, and no one gets jail time. According to The Wall Street Journal, the six largest banks paid $110 billion in penalties for issues related to the crisis. So it’s the shareholders who suffer, since their investment is being punished, rather than an executive.
4. Politicians, banks aim to peel back regulations
In the wake of the financial crisis, Congress passed the Dodd-Frank Act, which regulated banks. The law created the Volcker rule preventing government-insured banks from engaging in certain kinds of speculative, typically highly leveraged activity. The law also created the Consumer Financial Protection Bureau, which regulates the banking industry.
Following a few years of relative economic normalcy, the financial lobby and many politicians are pushing back against the legislation, saying that regulation harms the industry. And there’s at least some truth to that, because the legislation is more costly for the medium and small community banks. But larger banks are also pushing this line because they want to take more risks; for example, in speculative trading that is currently prohibited by the Volcker rule. Those riskier activities could blow up a bank.So a repeal of those regulations, or even just parts of them, could pose more danger to the economic system, setting the stage for more “casino capitalism” and another bank crisis.
Huawei has repeatedly denied that its products pose security risks. Huawei told CNN back in 2017 that it aims to be number one in the smartphone industry. Earlier this year it failed to clinch its first partnership with a major US carrier, after talks with AT&T fizzled out at the last minute. Having the backing of a wireless carrier is key to making inroads in the United States. CNN is part of WarnerMedia, which is owned by AT&T. “Despite its failure to strike a US carrier partnership … the company has turned around quickly, moving away from its drive for profitability and focusing instead on finding volume growth at the low end,” Mo Jia, an analyst with Canalys, said in a statement. Selling millions of cheap phones has worked well for Huawei in the Asia Pacific region, where its sales more than doubled compared with the same quarter last year, according to IHS Markit. It also experienced strong growth in Europe, the Middle East and Africa. The success in its smartphone division comes as Huawei faces significant headwinds in its telecommunications business. Following the United States, security officials in the UK, Australia and Canada have in recent months warned of potential national security risks from using the Chinese firm’s telecom equipment. Huawei is one of several companies racing to develop capabilities for 5G, the next generation of wireless technology. If major countries refuse or ban the use of Huawei’s telecom gear, it would significantly handicap the company’s ambition tobecome a global leader in 5G technology.
Pence said the moves would “elevate American security.” “We will be as dominant in the digital world as we are in the physical world,” he said. He also affirmed findings from U.S. intelligence agencies that Russia interfered in the 2016 election. “The fact is Russia meddled in our 2016 elections. That’s the unambiguous judgment of our intelligence community, and as the President said, we accept the intelligence community’s conclusion,” he said.
To combat cyber threats in the upcoming Congressional election, Pence said the administration is also deploying “new sensors” to detect threats, and 37 states have opted in so far, he said. Federal cybersecurity officials are also being deployed to state and local elections commissions. He cited a cyberattack in July against government services in Finney County, Kansas, including elections infrastructure, to which he said DHS responded and helped remediate. Pence focused several comments on efforts to support better information exchanges between federal agencies and private sector companies. He referred to numerous types of attacks from countries other than Russia, including theft of intellectual property from China, the criminal intrusion of Equifax last year and the WannaCry ransomware attacks of 2017 that have been attributed to North Korea. He also called out particularly damaging effects of global infrastructure attacks, another key focus of the conference: “[Cyberattacks] also target our economy — a single Russian malware attack last year cost a major American shipping company $400 million,” said Pence, referring to the NotPetya cyberattack of June 2017, that deeply affected the supply chain of shipping giant FedEx.Pence’s comments followed statements by FedEx’s chief information security officer Gene Sun, who outlined the damage suffered by the company in the June attacks last year. FedEx “saw the ripple effect of supply chain damages,” Sun said “Medical supplies could not be shipped out. We quickly came to a few realizations, number one, that we as a logistics company cannot go it alone,” he said. The conference focused on the launch of a new National Risk Management Center, to help pool corporate and government cybersecurity information into one location. Facebook also announced earlier today that it had worked to take down 32 Instagram and Facebook accounts that were part of what the company called a “coordinated effort” to influence U.S. politics.
Donald Trump has ratcheted up his pressure on Attorney General Jeff Sessions, saying in a tweet that the Attorney General of the United States should step in and put an end to Special Counsel Robert Mueller’s long-running Russia probe ‘Attorney General Jeff Sessions should stop this Rigged Witch Hunt right now,’ the president tweeted. ‘Bob Mueller is totally conflicted, and his 17 Angry Democrats that are doing his dirty work are a disgrace to USA!’ The White House ignored a Wednesday Wednesday about whether Trump will push the envelope further and order Sessions to fire Mueller. Trump’s mention of 17 prosecution lawyers is a reference to what he claims is an abundance of Democrats on Mueller’s staff. The special counsel himself is a Republican.
Trump has publicly criticized Sessions before, tweeting in June that the Mueller ‘witch hunt’ was only proceeding ‘because Jeff Sessions didn’t tell me he was going to recuse himself.’ ‘I would have quickly picked someone else. So much time and money wasted, so many lives ruined … and Sessions knew better than most that there was No Collusion’ with the Kremlin,’ he added. Video playing bottom right…
‘Jeff Sessions should stop this Rigged Witch Hunt right now, before it continues to stain our country any further,’ Trump tweeted Wednesday
Trump’s lawyer Rudy Giuliani, the former New York City mayor, has been making the TV rounds and claiming that ‘collusion is not a crime.’ Trump doubled down on that assertion a day later. The word ‘collusion’ isn’t part of any federal law forming the basis of Mueller’s investigation, but he has reportedly been looking at some of the president’s tweets to supplement circumstantial evidence of obstruction of justice. California Democratic Rep. Adam Schiff tweeted a similar suggestion after Trump’s morning burst. ‘The President of the United States just called on his Attorney General to put an end to an investigation in which the President, his family and campaign may be implicated,’ wrote Schiff, the ranking Democrat on the House Intelligence Committee. ‘This is an attempt to obstruct justice hiding in plain sight. America must never accept it.’
America’s funding needs are starting to grow at a dangerous pace.
Even before the NYT reported of Trump’s startling suggestion of a further $100 billion tax cut in the form of an inflation-adjusted capital gains tax cost basis which mostly benefits the wealthy, earlier today the U.S. Treasury said it expects to borrow $56 billion more during the third quarter than previously estimated, while market participants expect shorter-dated Treasuries to absorb the brunt of the new supply as the Trump administration grapples with a mushrooming budget deficit. In the Treasury’s latest quarterly Sources and Uses table, it revealed thatit expects to issue $329 billion in net marketable debt from July through September, and $56 billion more than the $273 billion estimated three months ago, in April. assuming an end-of-September cash balance of $350 billion, matching its previous estimate. It also forecast $440 billion of borrowing in the final three months of the year, with a $390 billion cash balance on December 31. The borrowing estimate for the third quarter is the highest since the same period in 2010 and the fourth largest on record for the July-September quarter, according to Reuters. In the second quarter, net borrowing totaled $72 billion, slightly below the earlier prediction of $75 billion.
The US fiscal picture continues to darken as a result of rising social security costs, military spending and debt service expenses while corporate tax income is declining after last year’s tax reforms. As a result, the federal budget deficit is expected to reach $833 billion this year, up from $666 billion in the budget year ended last September, a number that is well below the net funding demands for the US Treasury.
The new projections put total net borrowing at $769 billion for the second half of 2018 and a whopping $1.33 trillion for the whole year. The federal budget deficit totaled $607 billion through the first nine months of the fiscal year that ends Sept. 30, up 16% compared with $523 billion from the same period a year earlier. In late June, the CBO forecast that total government spending would exceed revenue by $1 trillion in 2020. That would suggest that the net financing need of the US in two years could be as high as $1.5 trillion. “Because of surprising declines in corporate tax revenues, the federal deficit is constantly under discussion this month,” FTN rates strategist Jim Vogel told Reuters. Adding to the supply of bonds hitting the market, the Fed is also trimming its vast holdings of Treasury debt as part of Quantitative Tightening, with some $40BN in monthly reductions in the third quarter.
WASHINGTON (Reuters) – U.S. consumer spending increased solidly in June as households spent more at restaurants and on accommodation, building a strong base for the economy heading into the third quarter, while inflation rose moderately. Other data on Tuesday showed employers boosting benefits for workers in the second quarter, but wage growth slowed down. With savings at lofty levels and lower taxes increasing take-home pay for some workers, spending is likely to remain strong this year. Accelerating home prices, which are boosting wealth for some households, should also underpin consumption. Strong economic growth and steadily rising inflation are likely to allow the Federal Reserve to continue gradually raising interest rates. Fed officials started a two-day meeting on Tuesday. “More spending on ‘wants,’ not ‘needs,’ is always a good sign of consumer confidence,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “As long as incomes continue to rise and job creation remains strong, consumer spending should remain solid over the remainder of the year.” The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4 percent last month. Data for May was revised up to show consumer spending advancing 0.5 percent instead of the previously reported 0.2 percent gain. Last month’s increase in consumer spending was in line with economists’ expectations. The data was included in last Friday’s second-quarter gross domestic product report, which showed consumer spending accelerating at a 4.0 percent annualized rate during that period after a pedestrian 0.5 percent pace in the first quarter. The economy grew at a 4.1 percent rate in the second quarter, almost double the January-March period’s 2.2 percent pace and the strongest performance in nearly four years. June’s increase in consumer spending sets it on a higher growth path heading into the third quarter. Consumer spending last month was boosted by spending at restaurants and on accommodation. Spending on services accelerated 0.6 percent after rising 0.3 percent in May. Outlays on goods were unchanged after surging 0.9 percent in May. Prices continued to steadily rise last month. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components gained 0.1 percent in June. It had risen by 0.2 percent in the prior month.
That kept the year-on-year increase in the so-called core PCE price index at 1.9 percent for a third straight month.
The core PCE index is the Fed’s preferred inflation measure. The core PCE hit the U.S. central bank’s 2 percent inflation target in March for the first time since December 2011. The Fed is expected leave interest rates unchanged on Wednesday after increasing borrowing costs in June for the second time this year. It has forecast two more rate hikes by December. “For the Fed, there’s nothing to be alarmed about in this morning’s data,” said Chris Low, chief economist at FTN Financial in New York. “Consumers are behaving and inflation is stable.” The dollar firmed marginally against a basket of currencies. Prices for longer-dated U.S. Treasuries rose and stocks on Wall Street were trading higher.Spending in June was supported by a 0.4 percent increase in personal income, which matched May’s increase. Savings edged up to $1.050 trillion last month from $1.047 trillion in May. In a separate report on Tuesday, the Labor Department said its Employment Cost Index, the broadest measure of labor costs, rose 0.6 percent after an unrevised 0.8 percent advance in the first quarter. That pushed the annual increase in the ECI to 2.8 percent, the biggest gain since the third quarter of 2008, from 2.7 percent in the first quarter. Wages and salaries, which account for 70 percent of employment costs, rose 0.5 percent in the second quarter, retreating from a 0.9 percent surge in the January-March period. Wages and salaries were up 2.8 percent in the 12 months through June, also the biggest annual gain since the third quarter of 2008. “The long recovery in wages has reflected a large pool of workers on the sidelines,” said Adam Ozimek, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “One factor leaning against a return to rapid wage growth is weaker productivity.” Separately, the Conference Board said its consumer confidence index increased 0.3 point to a reading of 127.4 in July. Consumers were upbeat about the labor market. The survey’s so-called labor market differential, derived from data about respondents who think jobs are hard to get and those who think jobs are plentiful, increased to 28.1 this month from 25.3 in June. That measure closely correlates to the unemployment rate in the Labor Department’s employment report and is consistent with rapidly diminishing labor market slack. Despite their strong confidence in the economy, consumers appeared less enthusiastic about buying a home and household appliances. Still, the fundamentals for consumer spending remain strong. A fourth report on Tuesday showed the S&P/Case-Shiller 20-city composite price index rose 6.5 percent year-on-year in May after increasing 6.7 percent in April.
A handful of one-day losses has put the oil market on pace for its worst month in two years — and the source of those big swings can often be traced back to the White House. Supply and demand for oil are roughly in balance, so traders have been sensitive to any headlines that could tip the market into oversupply or shortage. Lately there has been no shortage of news, in part because of President Donald Trump’s penchant unexpected comments on Twitter, as well as his administration’s effort to impose sanctions on Iran, the world’s fifth biggest oil producer. “Welcome to a headline-driven market,” said John Kilduff, founding partner at energy hedge fund Again Capital. “It’s duck and cover and keep an eye on your Twitter feed.”
U.S. crude prices actually rose in 13 of the month’s 21 sessions, while Brent is also up in 13 of the 22 trading days. However, most of the one-day gains were moderate, with both benchmarks jumping more than $1 a barrel only once this month.
Meanwhile, Brent lost nearly $11 over three sessions spread throughout the first four weeks of July. U.S. crude lost almost $8 over as many days during the same period. A final day of losses on Tuesday is putting both futures on track for their worst monthly drop since July 2016. Heading into the month, oil prices had rallied strongly after a State Department official told reporters the Trump administration was pushing oil buyers to cut their purchases from Iran to zero by Nov. 4. Trump restored sanctions on Iran in May, but the deadline for winding down imports was more aggressive than the market had anticipated and raised fears of oil shortages. But a few days later, on July 2, Brent crude dropped nearly $2 a barrel after Trump declared on Twitter that Saudi Arabia’s king had agreed to pump up to 2 million more barrels per day to tame fuel prices. The White House later walked back that claim, saying the king would take an increase under consideration.
Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference…Prices to high! He has agreed!
— Donald J. Trump (@realDonaldTrump) 30 June 2018 ” target=”_self”>TWEET
That same day, Reuters forecast that Saudi Arabia’s oil output had jumped by 700,000 bpd in June. Meanwhile, Russia’s energy minister said it had boosted its production back above 11 million bpd that month. Both headlines suggested that Saudi Arabia and Moscow were making good on their vow to raise output to prevent the market from overheating. Two days later, WTI had its first big drop for the month, falling $1.20 a barrel after weekly data showed a surprise jump in American crude stockpiles. Earlier in the day, Trump lobbed the latest in a series of Twitter critiques at OPEC, ordering the world’s cartel to reduce prices immediately. That fed speculation that Trump was getting impatient with relatively high fuel prices and considering selling oil from the nation’s emergency supply. (A week later, details of a plan to do just that leaked.)
@realDonaldTrump: The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW
Brent and U.S. crude both logged their biggest daily drop for the month on July 11, after Libya resolved a major disruption to its crude exports and Saudi Arabia reported a nearly 500,000 bpd jump in its oil output. Brent fell $5.46 a barrel, while U.S. crude ended the day down $3.73. Also that day, oil prices fell in tandem with stock markets after the Trump administration slapped tariffs on $200 billion of Chinese goods. The trade dispute between the nations — home to the world’s two biggest economies — has weighed on oil markets because it threatens to slow global growth and cool demand for crude. The final big drop came the following week later on July 16, with U.S. crude down nearly $3 a barrel and Brent dropping almost $3.50. That day, Treasury Secretary Steve Mnuchin eased the market’s concerns about oversupply, saying the administration would consider allowing some oil buyers to reduce their purchases from Iran more gradually. Mnuchin told reporters the administration wanted to avoid roiling oil markets as it pursued its Iran policy. On Tuesday, U.S. crude was down more than $1 a barrel to about $69, on pace for a roughly 7 percent decline this month. Brent fell toward $74, down about 6.5 percent in July. The latest declines came as a Reuters survey of analysts forecast another jump in OPEC’s output for July and Russia said its oil production would hit a 30-year high above 11 million bpd this year. “There’s been this rush to put more oil on the market by the Saudis and Russia, so I think in the near term, it’s a negative because we haven’t lost any of the Iranian barrels yet,” Kilduff said.
WASHINGTON (Reuters) – President Donald Trump again attacked Special Counsel Robert Mueller’s probe into Russia and the 2016 U.S. election on Tuesday, reiterating that his campaign did not collude with Moscow and saying collusion is not a crime anyway. U.S. President Donald Trump speaks during a joint news conference with Italy’s Prime Minister Giuseppe Conte in the East Room of the White House in Washington, U.S., July 30, 2018. REUTERS/Carlos Barria Trump commented hours before his former campaign chairman, Paul Manafort, was due to go on trial on tax and bank fraud charges in Virginia. As the first trial in the 14-month Russia probe, the case throws a fresh spotlight on a federal criminal investigation that has dogged Trump’s presidency. Mueller is investigating whether Trump campaign officials worked with Moscow to try to sway the 2016 U.S. presidential election, something commonly referred to as collusion by the media and public officials. “Collusion is not a crime, but that doesn’t matter because there was No Collusion (except by Crooked Hillary and the Democrats)!” Trump wrote on Twitter. While collusion is not a technical legal charge, Mueller is probing any coordination between the Russian government and the Trump campaign, and could bring conspiracy charges if he finds that any campaign member worked with Russia to break U.S. law. Legal experts said that working with a foreign national with the intent of influencing a U.S. election could violate multiple laws. “Collusion is basically a partnership in crime, which is conspiracy,” said Randall Eliason, a former federal prosecutor and a law professor at George Washington University. Trump has for months denied that the campaign colluded with Russia to try to engineer his victory against Democratic candidate Hillary Clinton, and he bristles at the suggestion he might owe his White House victory to Moscow. On Tuesday, he echoed his personal lawyer, Rudy Giuliani, who said in television interviews on Monday that collusion is not a crime. The strategy may be the latest in Trump’s efforts to strip legitimacy from the Mueller probe, which he has long denounced as a “witch hunt.” Russia has denied the finding of U.S. intelligence agencies last year that it interfered to sway the election to Trump. “The reason the Trump troops are pounding the ‘collusion is not a crime’ drum is because they colluded (better known as conspiracy, or aiding and abetting) and they want to get out in front of the story to control the narrative!” John Dean, President Richard Nixon’s legal counsel, wrote on Twitter. Manafort, 69, faces 18 criminal counts, which centre on allegations that he hid much of the $60 million he earned working for a pro-Russian politician in Ukraine in undisclosed overseas bank accounts and failed to pay taxes on it.
Washington (CNN)Prosecutors from special counsel Robert Mueller’s office said Monday that Paul Manafort earned $60 million from his work as a political consultant in Ukraine and challenged a motion by the former Trump campaign chairman’s attorneys to exclude dozens of exhibits on the topic. In a filing submitted in Virginia federal court, Mueller’s team said they planned to use evidence including “memoranda, emails, and photos reflecting tasks performed” to demonstrate the “full sweep of Manafort’s Ukraine work” and that he “was paid tens of millions of dollars in income.” Manafort’s attorneys last week fingered over 50 exhibits included on a proposed government list as prejudicial and irrelevant and asked the judge to disallow them from his trial, set to begin with jury selection on Tuesday. Manafort is charged with lying on tax forms and bank fraud. He has denied all charges against him. The indictment against Manafort says $75 million flowed through offshore accounts controlled by Manafort and his former business partner Rick Gates. Prosecutors on Monday said they need to use the exhibits in question to prove that Manafort earned that much income, which they contend he failed to report on his tax returns. The exhibits also “contain evidence about the identity of Manafort’s sources of income in Ukraine, and in particular the oligarchs who instituted the practice of paying Manafort via foreign accounts,” according to the filing. Mueller’s team also argued that Manafort’s motion would “exclude virtually every exhibit containing the name of several key government witnesses, thereby preventing the jury from hearing evidence that corroborates the witness’s expected testimony and demonstrates the witness’s credibility.
Oil prices rose back above $70 a barrel on Monday, with U.S. crude posting its best one-day dollar gain in over a month, after four weeks of losses for the benchmark. U.S. West Texas Intermediate crude ended Monday’s session up $1.44, or 2.1 percent, to $70.13 a barrel. While the contract has risen in seven of the last previous 10 sessions, it has not posted a gain of more than $1 a barrel since June 27. As of Friday, WTI was down more than 7 percent over the last four weeks, as heavy losses in a handful of trading sessions wiped out a string of modest daily gains for the benchmark.
The contract to deliver international benchmark Brent crude for September was up 83 cents, or 1.1 percent, at $75.12 a barrel by 2:08 p.m. ET. The September contract expires on Tuesday. Trading was heavier for the October contract, which is up 97 cents, or 1.3 percent, at $75.73. Prices got support after Saudi Arabia announced it would suspend shipments of oil through the critical Bab el-Mandeb Strait, after Houthi rebels in Yemen attacked a pair of oil tankers in the Red Sea. The Saudis have led a military coalition against the Iran-aligned Houthis for more than three years. Risk consultancy the Eurasia Group says the attack on the tankers “represents a serious escalation in dynamics around the Yemen conflict.” “While Houthi rebels probably long possessed the capability to threaten Saudi oil shipments in the Bab-al Mandab Strait, their willingness to use it is the result of rising tensions in the region,” Ayham Kamel, head of Eurasia Group’s Middle East and North Africa practice said in a research note, using an alternative spelling for the strait. “The attack was probably encouraged by the Iranian leadership to demonstrate to the US, Saudi Arabia, and Israel that Iran and its allies retain a capacity to respond to intensifying economic, political, and military pressure.” The United States and Iran have lately engaged in a war of words, with Iranian officials threatening to snarl oil exports in the world’s busiest region for crude shipments. Tension is rising ahead of the first of two deadlines next week for international businesses to wind down ties with Iran under renewed U.S. sanctions. The situation raises concerns that the world will be short of oil. Those concerns have been amplified as Canada’s Suncor Energy works to fully restore operations at its massive Syncrude oil sands facility, where supplies have been disrupted by a power outage earlier this year. The company has scaled back its expectations for production from Syncrude this year, and there are reports the facility might not be fully operational as early as expected. “It’s just this witches’ brew of supportive factors from Iran to the Syncrude,” said John Kilduff, founding partner at energy hedge fund Again Capital. Hedge funds and money managers are getting more constructive on energy commodities. Funds increased their bullish bets in Brent, U.S. gasoline, U.S. heating oil and European gasoil in the latest week, according to a Reuters analysis. Fears that robust demand for oil will cool off have eased following a meeting between President Donald Trump and European Commission President Jean-Claude Juncker that yielded progress in a trade dispute last week.
If Michael Cohen, President Donald Trump’s former personal attorney, moves to help special counsel Robert Mueller’s probe, the president would be “one witness away from a potential catastrophe,” said MSNBC legal expert Jonathan Turley. “I think the Cohen development is very serious. He’s one witness away from a potential catastrophe. If any of those five witnesses breaks and supports Michael Cohen, this is going to get real bad, real fast,’ said Turley Monday on MSNBC’s “Morning Joe.” Turley, a George Washington University law professor, was referring to five witnesses who have been granted immunity to testify in the trial of former Trump campaign chairman Paul Manafort. The professor The Trump Tower meeting would not establish that collusion had occurred, but if Trump knew ahead of time about Donald Trump Jr. and a Kremlin-connected lawyer meeting in Trump Tower in 2016, Trump Jr. would be in “serious jeopardy of a criminal charge.” “If Mueller was to go after Donald Trump Jr., I think we would see a very rapid chain of events and it would not end well for anyone,” Turley said in the interview. “I think that Donald Trump very well could match his past visceral language with similar action. He could start to fire people, and that would have a cascading effect. It would probably take us right to the doorstep of impeachment,” Turley said.
US President Donald Trump has offered to meet Iran’s leaders with no preconditions, at any time they want. “They want to meet, I’ll meet. Any time they want,” he said at a White House news conference with Italy’s PM. The US president’s conciliatory approach comes after he and Iranian President Hassan Rouhani traded hostile warnings earlier this month. In May, the US left a deal which curbed Iran’s nuclear activities in return for the lifting of international sanctions. Washington is preparing to re-impose sanctions on Tehran within days – despite objections from the UK, France, China, Russia and Germany, who all signed the 2015 agreement. The US is deeply suspicious of Iranian activity in the Middle East and is an ally of Israel and Saudi Arabia, two of Iran’s foes. “I’d meet with anybody. I believe in meetings,” Mr Trump added, speaking alongside Italy’s Giuseppe Conte. Last week Mr Trump responded angrily to Mr Rouhani, who had earlier warned of the consequences of a conflict with his country. Mr Trump tweeted in capitals that Iran would “suffer consequences the likes of which few throughout history have ever suffered before” if it threatened the US. Mr Rouhani had told Iranian diplomats: “America should know that peace with Iran is the mother of all peace, and war with Iran is the mother of all wars.” His remarks were reported by Iran’s state news agency Irna.
Responding to Mr Trump’s broadside, Iranian Foreign Minister Javad Zarif tweeted: “Color us unimpressed.”
President Donald Trump’s attorney, Rudolph Giuliani, asserted Monday that “collusion is not a crime,” and declared that the president is “absolutely innocent.” “I have been sitting here looking in the federal code trying to find collusion as a crime,” Giuliani said in an interview on Fox News Channel’s “Fox & Friends.” “Collusion is not a crime.” Trump has repeatedly denied there was collusion between his campaign and Russia during the 2016 U.S. presidential election. As recently as Sunday, the president took to Twitter to repeat the claim. “There is No Collusion!” Trump wrote, referring to special counsel Robert Mueller’s investigation into Russia’s attack on the election. Giuliani expanded on his remarks in an interview with CNN. “The hacking is the crime,” Giuliani told the network. “The president didn’t hack.” Following the interview on CNN, Giuliani responded to a post on Twitter that suggested the media was “nitpicking and twisting” his comments. Giuliani called the post an “excellent observation.” “You can investigate an innocent person forever and forever and find nothing. When do we say enough is enough. No collusion, no obstruction. President Trump did nothing wrong,” Giuliani wrote in response. Giuliani addressed reports that Michael Cohen, the president’s former lawyer and fixer, was prepared to tell Mueller that Trump knew about a June 2016 meeting in Trump Tower between the president’s senior campaign staff, including his eldest son Donald Trump Jr. and then-campaign chief Paul Manafort, and a Russian lawyer who was allegedly offering dirt on Democratic presidential candidate Hillary Clinton. “This Russia meeting, I’m happy to tell them, he wasn’t there,” Giuliani said.
Before Giuliani’s interviews Monday, the intrigue about the meeting centered on whether the elder Trump knew the meeting was going to happen. The president has previously denied foreknowledge of the gathering. “I did NOT know of the meeting with my son, Don jr. Sounds to me like someone is trying to make up stories in order to get himself out of an unrelated jam,” the president wrote in a post on Twitter on Friday. The special counsel has homed in on the Trump Tower meeting, and has sought to ask Trump about how involved he was in its planning. The meeting figured in a list of questions the special counsel prepared to ask the president. Among the questions, published by The New York Times in April, was an inquiry about when the president first became aware of the June 9 meeting.
The Russian government, previously considered a “major” holder of U.S. debt, has been steadily — and sharply — paring down the vast majority of its holdings of U.S. Treasury securities. Russian holdings of Treasury securities declined 84 percent between March and May, falling to $14.9 billion from $96.1 billion in just two months, according to a U.S. Treasury Department report released July 18. Moscow’s ownership of U.S. debt is eclipsed by that of China and Japan, both of whom actively manage their currencies and hold more than $1 trillion each in Treasuries on their books. In fact, China’s vast holdings have been cited by some observers as a “nuclear option” in a Sino-American trade war, with the world’s largest economy seen vulnerable to Chinese selling that could drive up yields. However, Russia’s moves in the market come amid a growing furor over Moscow’s suspected meddling in the U.S. general election in 2016, which has led to sanctions on its economy. Russia’s sell-off of U.S. debt in May also coincided with the benchmark 10-year Treasury note yield, which moves inversely to the note’s price, briefly touching its highest level since 2011. Though the 10-year yield has since retreated from levels above 3 percent, its movements have implications for other financial instruments like mortgages rates and auto loans, which are often based on its rate. The yield on the 10-year Treasury note has subsequently stabilized, trading at 2.958 percent. Bond experts like Raymond James’s Kevin Giddis pointed to a flood of Treasury supply for higher long-term rates back in May. However, most of the excess likely came from historically large Treasury auctions to help pay for Washington’s new tax cuts and spending bill, not Moscow’s selling. “While this liquidation by the Russians is curious, the amount they held, along with the amount they sold, is really insignificant to the multi-trillion dollar Treasury market,” Giddis, head of fixed income capital markets at Raymond James, said on Sunday. “If I had to wager, I would bet that this is part sanctions and part portfolio adjustment and little to do with a real market move,” he added. “If this was China or Japan, then the story would be quite different, and so the muted market movement, or lack thereof, pretty much tells the story of the move.” Major foreign holders of U.S. debt accounted for $6.21 trillion of current U.S. debt, while the total public debt outstanding is $21.3 trillion as of July 26. The United States imposed sanctions in April on Russian businessmen, companies and government officials, a direct jab at associates of Russian President Vladimir Putin in a move designed to punish the country for a variety of infractions, including alleged meddled in the 2016 U.S. election. The move freezes the U.S. assets of “oligarchs” as well as punishes non-American individuals and companies doing business with the sanctioned entities in the same they would Americans. This is a particular potent component of the sanctions, which target aluminium tycoon Oleg Deripaska and lawmaker Suleiman Kerimov, among others. The U.S. Treasury Department did not immediately respond to CNBC’s request for comment.
The Federal Reserve will issue a statement declaring strong growth and inflation moving to its 2% target, making clear more interest rate hikes are coming. Investors may cheer Q2 earnings, but that isn’t making the outlook for the next quarter any rosier The second-quarter earnings season has largely been positive for the U.S. stock market, some high-profile disappointments aside. But increasingly, investors are looking for confirmation that the first half of the year won’t represent a peak for the cycle..
The U.S. economy accelerated in the second quarter to the fastest pace since 2014, the government reported on Friday, allowing President Donald Trump to celebrate his economic policies, including the biggest tax overhaul since the Reagan era. Mnuchin also said that Trump respects the independence of the Federal Reserve, despite the president’s recent criticism of the central bank for raising interest rates. In fact, Mnuchin said it was responsible for the Fed to raise rates as the economy grows faster and inflation rises.
Canada, the European Union, Japan, Mexico and South Korea will meet in Geneva next week to discuss how to respond to threats by U.S. President Donald Trump to impose tariffs on U.S. imports of autos and car parts, officials familiar with the talks said. The Trump administration has come under heavy criticism from automakers, foreign governments and others as it considers tariffs of up to 25 percent, a levy critics warn will hike vehicle costs, hurting auto sales and global industry jobs. Several auto manufacturing powers have been talking to each other in recent days about their fears and a possible coordinated response to Trump’s “Section 232” investigation, which he ordered on May 23, into whether auto imports are a threat to U.S. security, sources say. The probe could be completed within weeks, although similar ones ordered last year that led to tariffs of 25 percent on steel and 10 percent on aluminium took about 10 months. The Commerce Department has 270 days to offer recommendations to the president after such a probe starts. He then has 90 days to act upon them. It was not immediately clear what kind of response the countries could be looking at, although Canada, the EU and Mexico retaliated with their own tariffs after Trump imposed levies on steel and aluminium imports in March. Another option is to fight the United States at the World Trade Organization (WTO). Deputy ministers will gather in Geneva on July 31 to hear each other’s views, a Canadian official and a Mexican official told Reuters, asking to not be named because they were not authorized to talk to the media. “The meeting is meant to bring together major auto producing nations so we can discuss our concerns over the U.S. Department of Commerce’s Section 232 investigation of automobiles and parts,” said the Canadian government official.
President Donald Trump tweeted Sunday that he would be willing to “shut down” the government if he doesn’t get border security legislation that includes funding for the wall, eliminating the visa lottery and ending the practice of catch and release. “I would be willing to ‘shut down’ government if the Democrats do not give us the votes for Border Security, which includes the Wall! Must get rid of Lottery, Catch & Release etc. and finally go to system of Immigration based on MERIT! We need great people coming into our Country!” Trump tweeted.
I would be willing to “shut down” government if the Democrats do not give us the votes for Border Security, which includes the Wall! Must get rid of Lottery, Catch & Release etc. and finally go to system of Immigration based on MERIT! We need great people coming into our Country!
— Donald J. Trump (@realDonaldTrump) July 29, 2018
Trump’s threat to shut down the government comes as Congress works to pass appropriation bills. Congress must pass the bills to keep the government funded by Sept. 30 to prevent a shutdown. If unable to pass appropriation bills, Congress will most likely resort to an omnibus bill, a spending bill that covers multiple budget areas. Before the president tweeted his threat about shutting down the government, he also tweeted about immigration and how Congress needs to fix the “dumbest and worst” immigration laws in the world. “Please understand, there are consequences when people cross our Border illegally, whether they have children or not – and many are just using children for their own sinister purposes. Congress must act on fixing the DUMBEST & WORST immigration laws anywhere in the world! Vote ‘R,'” he said.
Please understand, there are consequences when people cross our Border illegally, whether they have children or not – and many are just using children for their own sinister purposes. Congress must act on fixing the DUMBEST & WORST immigration laws anywhere in the world! Vote “R”
— Donald J. Trump (@realDonaldTrump) July 29, 2018
The Trump administration triggered bipartisan backlash by implementing a zero-tolerance policy toward illegal border crossings, charging all individuals who cross the border illegally with unlawful entry. The policy resulted in the separation of minors from their parents. Due to the backlash, Trump signed an executive order to stop separating parents and children at the U.S. border. The Trump administration is now working to meet a federal judge’s deadline to reunite families. In the past, the president has decried government shutdowns and said they would be “devastating” to the military. “A government shutdown will be devastating to our military…something the Dems care very little about!” Trump tweeted at the beginning of 2018.
A government shutdown will be devastating to our military…something the Dems care very little about!
A competition helping to drive development of the futuristic hyperloop transport system has been won by engineering students from Munich. The hyperloop idea involves passengers in pods travelling at very high speeds down sealed tunnels. The team’s pod hit 457km/h (290mph) on a 1.2km (0.75 mile) test track. Run by the SpaceX aerospace company, the competition aims to refine the technologies that could underpin the super-fast transport system. The win is the third in a row for the Technical University of Munich team. The competition saw student teams from universities around the world gather in California to put their prototype pods through their paces. The idea for hyperloop, which would see pods speed through a sealed tunnel to reduce friction or air resistance, has been around for decades and was fleshed out by technology entrepreneur Elon Musk in 2012. He suggested that pods could travel along the system’s tunnels at speeds in excess of 1,000km/h. Critics have voiced concerns about the potential cost of building a large hyperloop and whether its technical demands can be met. Mr Musk’s SpaceX company has run a series of competitions to drive development of the concept. In the latest round of the competition, the Munich team, Warr Hyperloop, outpaced rival capsules, which could manage speeds of only 88mph (Delft University) and 55mph (EPF Loop, from Switzerland), to beat its own record speed, 323km/h, set in the second competition, in September 2017. In a change from earlier competitions, all the pods being tested this time had to be self-propelled. Previously, the pods could rely on a SpaceX-built “pusher” vehicle that helped them travel down the test tube. Elon Musk dropped in on the competition and spent time talking to the teams and watching the test runs. “This is really the first opportunity to create a new mode of transport,” he told The Verge news site. “That’s really what this competition is about – things that could radically transform cities and the way people get around.”
President Donald Trump’s tax reform caused a major disruption in global investment flows, with the United States bringing more money home than it sent out in the first quarter for the first time since 2005, an OECD study showed on Friday. The study from the Paris-based Organisation for Economic Co-operation and Development is the first to reveal data on the impact of Trump’s Tax Cuts and Jobs Act on foreign direct investment (FDI) flows, the OECD said.
It found that global foreign direct investment outflows tumbled 44 percent to $136 billion in the first quarter of this year, from $242 billion in the previous quarter.
That was largely due to a switch to negative outward investments from the United States — meaning that American companies brought back more money home than they sent abroad in the quarter.
“The U.S. normally is the largest outward investor in the world. So when it switches to negative that has a big impact on the global flows,” Maria Borga, a statistician at the OECD’s investment division told Reuters.
The Tax Cuts and Jobs Act passed in December was touted as a way to create more jobs, drive U.S. economic growth and level the playing field with companies based outside the United States. It slashed the corporate income tax rate to 21 percent from 35 percent and charges multinationals a one-time tax on profits held overseas.
Outward investment from the United States fell to $-145 billion, registering negative for the first time since the fourth quarter of 2005. The change was due to large repatriations of profits by U.S. parent companies from their foreign affiliates.
“At this point it probably is essentially their financial assets, cash holdings that they’re bringing and it’s probably not going to have an immediate impact in terms of employment or value added at their foreign operations,” the OECD’s Borga said.The long-term impact is more difficult to predict but could be significant and long-lasting, she said.”We don’t really know what’s going to happen in the long term. But this has really shifted a lot of the incentives,” Borga said. “For example the cut in the tax rate might make the U.S. a more attractive destination for foreign investment, so you might see more foreign investment into the U.S.,” she said, adding that other countries might also be tempted to respond. With U.S. foreign investment outflows tumbling, Japan became the world’s top outward investor in the quarter, Borga said.
The New York Daily News, one of the city’s two tabloid papers, is halving its editorial staff, the latest sign of trouble in the local news business. The cuts will leave the newsroom with about 40 people, according to former employees. They come less than a year after the paper was bought by Tronc, which has a reputation for low newsroom investment. The New York Daily News started in 1919 and has won 11 Pulitzer Prizes, one of them last year. Tronc faced backlash from staff at the Los Angeles Times, who formed a union and cast a spotlight on the cuts at Tronc-owned publications, despite high compensation going to top executives and other insiders. Last year, Tronc said it was paying Merrick Ventures, a private equity firm led by Tronc’s biggest shareholder, $5m (£3.8m) a year for “management expertise and technical services”. The newspaper company, which also owns the Chicago Tribune and Baltimore Sun, subsequently sold the Los Angeles Times. Tronc bought the New York Daily News, which favours the punchy headlines common in British tabloids, for $1 last year. A memo on Monday to New York Daily News staff said the smaller newsroom would in future focus on breaking news, “especially in areas of crime, civil justice and public responsibility”. Top editors at the paper have lost their jobs as part of the cuts, including editor-in-chief Jim Rich and managing editor Kristen Lee.
LONDON (AP) — The U.K. government should increase oversight of social media like Facebook and election campaigns to protect democracy in the digital age, a parliamentary committee has recommended in a scathing report on fake news, data misuse and interference by Russia. The interim report by the House of Commons’ media committee to be released Sunday said democracy is facing a crisis because the combination of data analysis and social media allows campaigns to target voters with messages of hate without their consent. Tech giants like Facebook, which operate in a largely unregulated environment, are complicit because they haven’t done enough to protect personal information and remove harmful content, the committee said. “The light of transparency must be allowed to shine on their operations and they must be made responsible, and liable, for the way in which harmful and misleading content is shared on their sites,” committee Chairman Damian Collins said in a statement. The study was due to be published Sunday, but a copy was leaked on Friday by Dominic Cummings, the director of the official campaign group backing Britain’s departure from the European Union. Social media companies are under scrutiny worldwide following allegations that political consultant Cambridge Analytica used data from tens of millions of Facebook accounts to profile voters and help U.S. President Donald Trump’s 2016 election campaign. The committee is also investigating the impact of fake news distributed via social media sites. Collins ripped Facebook for allowing Russian agencies to use its platform to spread disinformation and influence elections. “I believe what we have discovered so far is the tip of the iceberg,” he said, adding that more work needs to be done to expose how fake accounts target people during elections. “The ever-increasing sophistication of these campaigns, which will soon be helped by developments in augmented reality technology, make this an urgent necessity.”
The committee recommended that the British government increase the power of the Information Commissioner’s Office to regulate social media sites, update electoral laws to reflect modern campaign techniques, and increase the transparency of political advertising on social media.
Prime Minister Theresa May has pledged to address the issue in a so-called White Paper to be released in the fall. She signaled her unease last year, accusing Russia of meddling in elections and planting fake news to sow discord in the West. The committee began its work in January 2017, interviewing 61 witnesses during 20 hearings that took on an investigatory tone not normally found in such forums in the House of Commons. The report criticized Facebook chief Mark Zuckerberg for failing to appear before the panel and said his stand-ins were “unwilling or unable to give full answers to the committee’s questions.” One of the committee’s recommendations is that the era of light-touch regulation for social media must come to an end. Social media companies can no longer avoid oversight by describing themselves as platforms, because they use technology to filter and shape the information users see. Nor are they publishers, since that model traditionally commissions and pays for content. “We recommend that a new category of tech company is formulated, which tightens tech companies’ liabilities, and which is not necessarily either a ‘platform’ or a ‘publisher,” the report said. “We anticipate that the government will put forward these proposals in its White Paper later this year.” The committee also said that the Information Commissioner’s Office needs more money so it can hire technical experts to be the “sheriff in the Wild West of the internet.” The funds would come from a levy on the tech companies, much in the same way as the banks pay for the upkeep of the Financial Conduct Authority. “Our democracy is at risk, and now is the time to act, to protect our shared values and the integrity of our democratic institutions,” the committee said.
The Trump administration has unveiled a $12bn (£9.1bn) plan aimed at helping US farmers hurt by the intensifying trade war. The aid is intended to protect the industry as countries raise taxes on US products such as soybeans in response to the president’s new tariffs. The US plans to provide subsidies to farmers and buy unsold crops, among other measures. Tariffs have irked farmers, a crucial voting bloc for President Donald Trump. Mr Trump has said his tariffs – which he described on Tuesday in a tweet as “the greatest” – are intended to pressure countries to change their policies toward US exports. In a speech on Tuesday, he said farmers would be the “biggest beneficiary” of the disputes after countries strike new trade deals. But the agriculture industry, which draws about 20% of its income from exports, said the president’s approach is hurting demand for its goods and causing long term damage to relationships with buyers. Prices for soybeans have already fallen by more than 15% since April, when China – a major buyer of the crop – announced its plans to retaliate. “Farmers need stable markets to plan for the future,” said Brian Kuehl, executive director of the industry group Farmers for Free Trade, which represents pork producers, corn growers and others. “As such, we urge the administration to take immediate action to stop the trade war and get back to opening new markets.” The US Agriculture Department said it expects losses of about $11bn as a result of the trade disputes. Much of the $12bn in emergency relief, which does not need congressional approval, will go towards direct payments to farmers of commodities such as soybeans, sorghum, and wheat, officials said. The US also plans to buy crops such as fruits and nuts, distributing them to food banks and other government nutrition programmes. Some of the money will also go to boosting export efforts. The first assistance is expected to be distributed by the beginning of September. The programme, which will be deployed using powers created during the Great Depression, is not intended to extend beyond this year, officials said. “This is a short-term solution that will give President Trump and his administration time to work on long-term trade deals that benefit agriculture and all sectors of the economy,” US Agriculture Secretary Sonny Perdue said. Some Republicans and even Democrats backed the aid package. But industry groups that represent agriculture, as well as politicians from agricultural states, criticised the relief as a short-term solution to a self-inflicted problem. “Time and time again I’ve heard from farmers that they want trade, not aid,” said Senator Ron Johnson, a Republican from Wisconsin. “Instead of throwing money at a problem we’ve helped create, the better option is to take action to make it easier for our farmers – and manufacturers – to sell their goods at fair prices to consumers around the world.” Senator Rand Paul, a Kentucky Republican, tweeted on Tuesday: “If tariffs punish farmers, the answer is not welfare for farmers. The answer is remove the tariffs.” Senator Ben Sasse, a Nebraska Republican, said in a statement: “This trade war is cutting the legs out from under farmers and White House’s ‘plan’ is to spend $12 billion on gold crutches.
It was one of the biggest one-day losses in US corporate history.At the start of the day, Facebook was valued at $630bn (£481bn). By the end, it had dropped to $510bn (£389bn). Company founder Mark Zuckerberg personally lost more than $15bn (£11.5bn) in one day, seeing him fall from fourth to sixth on Forbes’ list of global billionaires. The drop came after the social media giant published its second quarter results. Although still positive, they came in below investor expectations – and company shares had plummeted nearly 20% by the end of the day. So why the weaker numbers? Why did markets react so badly? And what does this mean for Facebook? The firm announced that its user growth rose at its slowest rate in two years. It also warned that billions in spending, planned to improve privacy and track advertisers, would outweigh revenue gains. Those revenue gains had themselves been limited by a fall in user numbers in Europe and people making use of new options to limit advertising. Facebook attributed their results to a new advertising format and giving users more control over privacy. But the elephant in the room was the swirl of scandals surrounding the company. The biggest involved Facebook sharing the data of 87 million users to a researcher at Cambridge Analytica, a political consulting firm Craig Erlam, senior market analyst at Oanda, said these scandals have had a “negative impact” for the firm. “Trust is so important with consumer trends,” Mr Erlam told the BBC, “and people may feel that Facebook betrayed their trust.” Facebook has been the dominant social media giant for years, and remains vastly popular. In its results, the company said it had more than 2.2 billion monthly active users at the end of June. But their latest data does suggest user number growth is slowing. A study from the US-based Pew Research Center suggests young people are ditching Facebook for Snapchat, Instagram and YouTube, with 85% of teens preferring the video platform to Facebook. The company’s market value dropped around $120bn in one day. To put that in context, McDonald’s is valued at $122bn on the New York Stock Exchange, with US industrial giant General Electric valued at $114bn.
US President Donald Trump is “open” to travelling to Moscow after a surprise invite from Russian President Vladimir Putin, the White House has said. Mr Putin said on Friday he is ready to travel to the US under the right conditions and has invited Mr Trump to Moscow for a second meeting. The pair met last week for closed-door talks in Helsinki. The invite comes two days after the White House said it would postpone Mr Putin’s autumn visit until next year. “President Trump looks forward to having President Putin to Washington after the first of the year, and he is open to visiting Moscow upon receiving a formal invitation,” Mrs Sanders said in a statement on Friday. Her statement was in response to Mr Putin, who earlier had said at a news conference in South Africa that he was “ready” for a follow-up meeting with President Trump. “We are ready for such meetings. We are ready to invite President Trump to Moscow. Be my guest. He has such an invitation, I told him that,” Mr Putin said while speaking at the Brazil, Russia, India and China (BRIC) economic summit in Johannesburg, South Africa. “I understand perfectly that President Trump has a desire to hold further meetings, and I am ready to come to Washington if appropriate conditions for work are created.” Mr Putin did not detail what “conditions” would have to be met. He went on to praise Mr Trump, saying he “strives to fulfil the promises, above all, given to voters”. Both leaders have called the Helsinki meeting successful, and Mr Putin rounded on US summit critics earlier this month for wanting to sacrifice the US-Russia relationship over “narrow party interests”. Mr Trump drew ire at the meeting when he contradicted US intelligence agencies by backing away from blaming Russia for meddling in the 2016 election. He later said he had misspoken at the summit.
NEW YORK (AP) — The Latest on Twitter Inc.’s quarterly earnings report. (all times local): Twitter’s stock plunged 20.5 percent after the company said monthly users decreased in the second quarter. The social media company also predicted further declines in the next few months. It was the second-biggest loss for Twitter’s stock since the company went public in 2013. In percentage terms, the decline was slightly worse than Facebook’s plunge the day before, but Facebook is a far more valuable company. Twitter and Facebook are trying to reduce the amount of abuse and hate speech on their platforms, but that’s affecting their growth, one of the things investors value the most. Twitter has doubled in value over the past year as it became profitable for the first time and investors applauded its live video efforts. Twitter is nosediving after it said monthly users declined in the second quarter and could fall further over the next few months. The stock is down 19.1 percent in heavy trading Friday afternoon, mirroring a 19 percent plunge in Facebook Thursday. Twitter and Facebook are trying to reduce the amount of abuse and hate speech on their platforms, but that’s affecting their growth, one of the things investors value the most. Twitter has doubled in value over the past year as it became profitable for the first time and investors applauded its live video efforts. Other big technology companies also sank Friday. Intel dropped 8.5 percent and Microsoft gave up 2.8 percent. The tech-heavy Nasdaq composite is headed for its worst loss in a month. Twitter, like other social media companies, says it’s prioritizing its platform over user growth, getting rid of abusive account. That has left investors seemingly unable to value what the biggest companies in the sector, which rely on their potential user reach, are worth.
WASHINGTON (AP) — Americans spent with abandon this spring. Businesses invested in more buildings and equipment. And exports jumped. Combined, those factors drove economic growth in the April-June quarter to a 4.1 percent annual rate, the fastest pace in nearly four years. A key question facing the economy is: Can its growth continue at such a pace? Probably not. Some of the drivers of growth last quarter appeared to be one-time factors. Soybean exports jumped as farmers sought to beat impending tariffs overseas. And business spending was boosted by soaring investment in oil and gas drilling equipment, which might not last. Other challenges also loom. Borrowing costs for homes, autos and credit cards are rising, lifted by the Federal Reserve’s interest rate hikes. And rising prices have left average hourly pay, once adjusted for inflation, flat over the past 12 months. But other trends do look sustainable and could help boost growth above the roughly 2 percent annual pace that’s prevailed since the Great Recession ended. Revisions to government data show that consumers have been saving more than previously thought, giving them more room to spend. And with business and consumer demand strong, companies may rebuild their stockpiles of goods in warehouses and store shelves, adding to growth in the coming quarters. That optimistic picture, though, hinges in part on whether the trade conflicts the Trump administration has pursued with major trading partners end up weakening the economy. Here’s a deeper look at economic trends and where they may be heading: But the government also sharply revised up its estimate of the U.S. savings rate. In the first three months of the year, government data now shows that Americans saved 7.2 percent of their income, much higher than the previous estimate of just 3.3 percent. That means consumers are in better financial shape than previously thought and suggests that healthy spending could continue. U.S. exports jumped in the second quarter, while imports barely increased. That narrowed the trade gap and meant that international trade contributed about one-quarter of the second quarter’s growth. President Donald Trump hailed the increase in remarks Friday at the White House and credited his trade policies. His policies did help, but in a way that’s unlikely to be repeated: Farmers sped up their exports of soybeans to China, ahead of that country’s imposition of tariffs that it imposed in retaliation for U.S. tariffs imposed by Trump. As a result, soybean exports jumped 90 percent in May. Sharply higher agricultural exports made up nearly half the overall increase in overseas sales in the second quarter. That’s unlikely to be repeated. Most economists forecast that trade will drag on growth in the second half of this year. Companies spent more on computers, software, and oil and gas drilling equipment, accelerating overall investment at a 7.3 percent annual rate. The Trump administration’s tax-cut package cut the corporate tax rate from 35 percent to 21 percent. It also allowed companies to write off the entire cost of an investment from their taxes, which might have helped boost business spending last quarter. But most of the increase in investment reflected a jump in spending on oil and gas drilling rigs and related equipment. Oil companies have expanded their exploration as oil prices have jumped roughly 50 percent in the past year. It’s considered unlikely that oil and gas drillers will keep expanding at the same pace. The federal government increased its spending at a 3.5 percent annual rate in the second quarter, the second-best showing in nearly four years. For much of the nine-year economic expansion, federal, state and local governments haven’t contributed much to the economy. Lawmakers have limited spending in the face of high deficits or dwindling tax revenue.
LONDON (Reuters) – Investors poured $600 million in to U.S. technology stocks in the week leading up to poor results from Facebook (FB.O), according to Bank of America Merrill Lynch (BAML) analysts, urging clients to sell the sector on signs inflows have reached bubble territory. Facebook’s shares plunged 19 percent on Thursday – leading to the biggest one-day wipeout in value terms in U.S. stock market history – after the company said it faced a multi-year squeeze on its business margins. But flow data covering the week to 25 July showed little drop in demand as investors continued to hunt for returns after a decade of quantitative easing, BAML said. Funds investing in technology have pulled in $36 billion this year, the data showed, by far the largest on record. Facebook’s shock results were a “classic late-cycle event,” analysts at the bank wrote, calling investors’ preference for FAANG stocks – the quintet of Facebook, Amazon (AMZN.O), Apple (AAPL.O), Netflix (NFLX.O) and Google (GOOGL.O) – “the most crowded QE trade in the world”. In contrast, the Chinese government’s increasing wariness over a trade war with the U.S. provided an ideal entry point into emerging markets, particularly the BRIC nations of Brazil, Russia, India and China, BAML said. In the last three months China has cut its Reserve Requirement Ratios twice, devalued the yuan CNY= by 7 percent, as well as widespread tax cuts and local bond issuance – all possible signs it is worried about global trade. “Markets stop panicking when policy makers panic,” analysts at BAML said, saying long BRICs against short FAANGs was a good trade for the third quarter. The bank also recommended clients buy gold XAU= and products hedging against a rise in volatility .VIX, in preparation for a potentially difficult end to the year for investors.
(CNN)Michael Cohen, President Donald Trump’s former personal attorney, claims that then-candidate Trump knew in advance about the June 2016 meeting in Trump Tower in which Russians were expected to offer his campaign dirt on Hillary Clinton, sources with knowledge tell CNN. Cohen is willing to make that assertion to special counsel Robert Mueller, the sources said. Cohen’s claim would contradict repeated denials by Trump, Donald Trump Jr., their lawyers and other administration officials who have said that the President knew nothing about the Trump Tower meeting until he was approached about it by The New York Times in July 2017. Cohen alleges that he was present, along with several others, when Trump was informed of the Russians’ offer by Trump Jr. By Cohen’s account, Trump approved going ahead with the meeting with the Russians, according to sources. To be clear, these sources said Cohen does not have evidence, such as audio recordings, to corroborate his claim, but he is willing to attest to his account. Cohen privately testified last year to two Congressional committees investigating Russian interference in the 2016 election. A source familiar with Cohen’s House testimony said he did not testify that Trump had advance knowledge. Cohen’s claims weren’t mentioned in separate reports issued by Republicans and Democrats on the House Intelligence Committee. Contacted by CNN, one of Cohen’s attorneys, Lanny Davis, declined to comment. “He’s been lying all week, he’s been lying for years,” said Rudy Giuliani, the President’s attorney, to Chris Cuomo on CNN’s “Cuomo Prime Time” on Thursday night. He added, “I don’t see how he’s got any credibility.” Giuliani also said Cohen is “the kind of witness that can really destroy your whole case” and called Cohen, who was a top Trump Organization attorney for a decade, a “pathological liar.” “Donald Trump Jr. has been professional and responsible throughout the Mueller and Congressional investigations,” said Alan Futerfas, an attorney for Donald Trump Jr. “We are very confident of the accuracy and reliability of the information that has been provided by Mr. Trump, Jr., and on his behalf.” According to people who have discussed the matter with Cohen, he has expressed hope that this claim about the Trump Tower meeting will help him reach out to Mueller and possibly lessen his legal troubles. He’s under scrutiny by federal prosecutors in Manhattan after Mueller referred Cohen’s case to them. The June 2016 meeting was arranged after a publicist who knew Trump Jr. told him in emails — in no uncertain terms — that a senior Russian official “offered to provide the Trump campaign” with damaging information about Clinton, and that the outreach was “part of Russia and its government’s support for Mr. Trump.” At the time, the Russian operation to covertly boost Trump’s candidacy wasn’t publicly known. Trump. Jr. responded, “if it’s what you say, I love it,” and started to arrange the meeting. At the meeting, Trump Jr. was joined by his brother-in-law Jared Kushner and Paul Manafort, who was Trump’s campaign chairman at the time. There were four Russians in the room, including a lawyer with Kremlin ties, a businessman who worked for an oligarch and a lobbyist with old KGB connections. After news of the meeting broke in July 2017, the Trump team offered misleading explanations and changed their story several times. But one claim stayed consistent: that Trump had no knowledge of the meeting beforehand, wasn’t told about it afterward and first learned about it one year later. Those denials were repeatedly issued by Trump, his attorney Jay Sekulow, Trump Jr., Futerfas and White House press secretary Sarah Sanders. Those people denied that Trump had contemporaneous knowledge of the meeting on more than 15 occasions, according to CNN’s analysis. Trump said on July 12, 2017, that he “only heard about it two or three days ago.” One week later, Trump repeated that he “didn’t know anything about the meeting” because “nobody told me” about it. Around that same time, CNN’s Jake Tapper asked Sekulow to confirm Trump’s claims that he only recently learned about the controversial meeting. Sekulow’s response: “Yes, I swear.” But perhaps the highest-stakes denial was given by Trump Jr. in his testimony last year to the Senate Judiciary Committee. “He wasn’t aware of it,” Trump Jr. told lawmakers, referring to his father’s knowledge of the meeting. “And, frankly, by the time anyone was aware of it, which was summer of this year, as I stated earlier, I wouldn’t have wanted to get him involved in it because it had nothing to do with him.” Trump’s critics have long doubted these denials. They point to a series of phone calls Trump Jr. made to a blocked phone number before and after the meeting. They also note that two days before the meeting, Trump mysteriously announced plans to give a “major speech” about Clinton’s scandals. Trump Jr. says he didn’t get any dirt at the meeting — and the speech never happened. Even Steve Bannon, the former White House chief strategist and top Trump campaign official, said the meeting was “treasonous” and speculated that “the chance that Don Jr. did not walk these (Russians) up to his father’s office on the twenty-sixth floor is zero.” Trump Jr. has denied Bannon’s allegation. Bannon’s comments, to author Michael Wolff for his book “Fire and Fury,” triggered the bitter public divorce between Bannon and Trump in early 2018. Axios reported that Bannon does not have first-hand knowledge about whether Trump Jr. told his father, and Bannon later said his “treasonous” remark was directed at Manafort and not Trump Jr.
Allen Weisselberg, the man at the financial center of Trump’s businesses, presents a new problem for the president.
Allen Weisselberg, the man at the financial center of President Trump’s sprawling business operation for the past several decades, has been subpoenaed as a witness in the federal criminal probe into longtime Trump associate Michael Cohen, the Wall Street Journal reported Thursday. According to the Journal, the exact date of the subpoena is currently unknown, so it’s possible Weisselberg may have already testified. News of the subpoena comes days after a secret audio recording of Cohen speaking with Trump was leaked to the press. In the recording, the two men are overheard discussing a payment to American Media Inc. (AMI), which had purchased former Playboy model Karen McDougal’s story of an alleged affair she had with Trump years earlier, shortly before the 2016 election. The company — whose CEO, David Pecker, is friends with Trump — never ran the story, allegedly employing a practice known as “catch and kill,” to ensure McDougal never took her story public. Cohen can be heard in the recording saying he had talked to Weisselberg about the logistics of purchasing McDougal’s story from AMI. “I’ve spoken to Allen Weisselberg about how to set the whole thing up with…funding,” Cohen says, adding that he and Weisselberg had discussed what happens “when it comes time for the financing. Weisselberg also reportedly arranged the $130,000 payment to adult film actress Stormy Daniels, who also claims to have had an affair with Trump, in the weeks leading up to the election. Weisselberg has said he didn’t know the payments, which were routed through Cohen and meant to act as hush money, were meant for Daniels. It’s unclear if prosecutors are interested in that payment or in something more fundamental to Trump’s business or charity, which Weisselberg also spearheaded. Weisselberg serves as the Trump Organization’s Chief Financial Officer and Executive Vice President, having joined the company after he graduated college in the 1970s. He mostly keeps a low profile: his name does not appear on the Trump Organization’s website, and he has been described as Trump’s “closest business confidant,” and a Trump aide who “fits in with the wallpaper.” Since Trump’s inauguration, Weisselberg — along with the president’s sons, Donald Jr. and Eric — has been responsible for any company decisions, supposedly without any involvement on the part of the president. He was named a trustee of the neither blind nor independent Donald J. Trump Revocable Trust, which holds the president’s assets (and from which the president can withdraw money whenever he wishes). Bloomberg reported that Weisselberg also became deeply involved in Trump’s personal finances over the years; among other things, he “paid household bills, made large purchases for Trump, and has communicated with Trump’s outside investment advisers.” Weisselberg was also the treasurer of the now-defunct Donald J. Trump Foundation. The charity is being sued by the state of New York for “extensive and persistent violations of state and federal law,” including allegedly using charity funds to support Trump’s presidential campaign. Weisselberg’s name notably showed up in an email Trump campaign manager Corey Lewandowski sent before the Iowa caucuses asking, “Is there any way we can make some disbursements this week while in Iowa? Specifically on Saturday.” Weisselberg has not been charged with anything, but his involvement with the investigation could open up new avenues for investigators. The probe is being conducted by prosecutors in the Southern District of New York, following a raid on Cohen’s office and residences earlier this year. During that raid, investigators seized scores of documents and papers related to Cohen’s work for the president, including the aforementioned audio recording, which he took without Trump’s knowledge. The raid itself was instigated following a referral from Special Counsel Robert Mueller, who is currently investigating Russian interference in the 2016 election and possible obstruction by Trump and his associates. That could spell trouble for the president: even if Trump interferes with the Mueller probe or attempts to have it shut down, the Cohen investigation would proceed, leaving Trump exposed.
Just got off phone with a former Trump Org employee who echoed @KatyTurNBC reporting on Weisselberg subpoena: “Alan knows everything and anything about all the financials…He knows every dollar that goes in and every dollar that leaves. He knows where all the bodies are buried.”
— Philip Rucker (@PhilipRucker) July 26, 2018
“Alan knows everything and anything about all the financials…He knows every dollar that goes in and every dollar that leaves,” a former Trump Organization employee told Washington Post White House bureau chief Philip Rucker on Thursday. “He knows where all the bodies are buried.”
WASHINGTON — For years, President Donald Trump has used Twitter as his go-to public relations weapon, mounting a barrage of attacks on celebrities and then political rivals even after advisers warned he could be creating legal problems for himself. Those concerns now turn out to be well founded. The special counsel, Robert Mueller, is scrutinizing tweets and negative statements from the president about Attorney General Jeff Sessions and former FBI director James Comey, according to three people briefed on the matter. Several of the remarks came as Trump was also privately pressuring the men — both key witnesses in the inquiry — about the investigation, and Mueller is examining whether the actions add up to attempts to obstruct the investigation by both intimidating witnesses and pressuring senior law enforcement officials to tamp down the inquiry. Mueller wants to question the president about the tweets. His interest in them is the latest addition to a range of presidential actions he is investigating as a possible obstruction case: private interactions with Comey, Sessions and other senior administration officials about the Russia inquiry; misleading White House statements; public attacks; and possible pardon offers to potential witnesses. None of what Mueller has homed in on constitutes obstruction, Trump’s lawyers said. They argued that most of the presidential acts under scrutiny, including the firing of Comey, fall under Trump’s authority as the head of the executive branch and insisted that he should not even have to answer Mueller’s questions about obstruction. But privately, some of the lawyers have expressed concern that Mueller will stitch together several episodes, encounters and pieces of evidence, like the tweets, to build a case that the president embarked on a broad effort to interfere with the investigation. Prosecutors who lack one slam-dunk piece of evidence in obstruction cases often search for a larger pattern of behavior, legal experts said. The special counsel’s investigators have told Trump’s lawyers they are examining the tweets under a wide-ranging obstruction-of-justice law beefed up after the Enron accounting scandal, according to the three people. The investigators did not explicitly say they were examining possible witness tampering, but the nature of the questions they want to ask the president, and the fact that they are scrutinizing his actions under a section of the United States Code titled “Tampering With a Witness, Victim, or an Informant,” raised concerns for his lawyers about Trump’s exposure in the investigation. A spokesman for Mueller’s office declined to comment. Trump’s lead lawyer in the case, Rudy Giuliani, dismissed Mueller’s interest in the tweets as part of a desperate quest to sink the president. “If you’re going to obstruct justice, you do it quietly and secretly, not in public,” Giuliani said. Giuliani was referring to more typical obstruction cases, where prosecutors focus on measures taken in private, like bribing witnesses, destroying evidence or lying under oath. While some of Trump’s private acts are under scrutiny, like asking Comey for loyalty, his public conduct is as well. That sets this investigation apart, even from those of other presidents; Richard M. Nixon and Bill Clinton were accused of privately trying to influence witness testimony. But as in those cases, federal investigators are seeking to determine whether Trump was trying to use his power to punish anyone who did not go along with his attempts to curtail the investigation. If Mueller opts to tailor a narrative that the president tried to obstruct the Russia investigation, he would have to clear several hurdles to make a strong case. He would need credible witnesses (Comey and Sessions have been the target of concerted attacks by Trump and allies, undercutting their standing) and evidence that Trump had criminal intent (the special counsel has told the president’s lawyers he needs to question him to determine this).
Higher mortgage rates, increasing home prices, and slim pickings – are more Americans deciding just to rent?
New-home sales were at a 631,000 annual pace in June, the Commerce Department said Wednesday.
Sales of newly-constructed homes tumbled 5.3% below a downwardly-revised May figure, and stood just 2.4% higher than a year ago. The median price of new homes sold during the month was $302,100, 4.2% lower than in June 2017. The government’s home-construction reports are based on small samples and are often revised heavily, making it hard to rely on any one month’s data. Revisions to prior months’ reports took sales figures for 2018 down a net 27,000 homes. For the year to date, sales are 6.9% higher than in the same period in 2017, but many housing analysts suspect there’s little momentum left in the market. At the current pace of sales, it would take 5.7 months to exhaust available supply, the most since last summer. Traditionally, six months was the sign of a balanced market, but sales have been running much leaner than that since the housing crisis. Most housing industry participants want to see a stronger pace of construction so that builders can catch up to years of pent-up demand for housing, especially as inventory of previously-owned homes remains at long-time lows. Existing-home sales slide for third-straight month in June, touch 5-month low as housing sputters
President Trump on Wednesday declared a “new phase” in the relationship between the U.S. and the European Union, agreeing to hold off on proposed car tariffs and work with the EU to resolve their dispute over metals duties, while also promoting bilateral trade. Speaking in the Rose Garden of the White House alongside European Commission President Jean-Claude Juncker, Mr. Trump said the U.S. and the EU had agreed to “work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non auto-industrial goods.” “This was a very big day for free and fair trade,” Mr. Trump said. He said the U.S. and EU would “resolve” the steel and aluminum tariffs he imposed earlier this year and the retaliatory tariffs the EU imposed in response. He said the EU had agreed “almost immediately” begin buying more U.S. soybeans and that the European bloc had agreed to increase LNG exports from the U.S. The EU will be a “massive buyer” of LNG, Mr. Trump said. “I had the intention to make a deal today,” said Mr. Juncker. “And we made a deal today. “ Mr. Trump also said the U.S. and EU would work “closely together” to reform the World Trade Organization and would launch an “executive working group” to implement their joint agenda.
Washington (CNN)The White House has suspended the practice of publishing public summaries of President Donald Trump’s phone calls with world leaders, two sources with knowledge of the situation tell CNN, bringing an end to a common exercise from Republican and Democratic administrations. It’s unclear if the suspension is temporary or permanent. A White House spokesman declined to comment. Official descriptions of the President’s calls with foreign leaders — termed “readouts” in Washington parlance — offer administrations the chance to characterize in their own terms the diplomacy conducted at the highest levels between countries. While news is rarely contained in the rote, often dry descriptions, they do offer the only official account that a phone call took place. Readouts are still released internally. Trump has had at least two calls with other leaders in the last two weeks, including Turkish President Recep Tayyip Erdogan and Israeli Prime Minister Benjamin Netanyahu. The White House confirmed that the calls took place after they were reported by foreign media, but declined to elaborate on what was said. The White House has not published a readout of a call between Trump and a world leader since mid-June when he called to congratulate the Hungarian prime minister on his re-election victory. “The two leaders further pledged to keep United States-Hungary relations strong,” the readout at the time noted. Michael Allen, who was a member of the National Security Council during the George W. Bush administration, said that by halting the practice of issuing readouts, the White House loses “the action forcing event of an announced phone call.””I think they lose the public diplomacy aspect of a presidential phone call,” Allen added. Calls with world leaders are highly coordinated events that in the past have required careful planning by the President’s national security team. Leaders are typically patched through the Situation Room, and sometimes aides listen in. Once the call is over, both sides typically publish a readout of what was discussed. However, readouts have been known to differ between governments. Trump has been known to make calls to foreign leaders from the residence of the White House during what has been dubbed by aides as “executive time.” Before he was fired this spring, former national security adviser H.R. McMaster often joined Trump in residence for his calls. His successor John Bolton is regularly present during his calls with leaders, a White House official tells CNN. The decision to halt the readouts come amid questions about what was said during Trump’s one-on-one with Russian President Vladimir Putin in Helsinki, Finland. Trump was incensed last August when The Washington Post published transcripts of his tense phone calls with the leaders of Australia and Mexico. He railed about the leak to aides for weeks, insisting that fewer people be in the room during the calls going forward.
China is looking for new ways to pump up its slowing economy as a trade war with the United States escalates.
Beijing has announced a range of measures including tax cuts, infrastructure spending and new loans to business as its tries to reinvigorate economic growth, which has begun to slow in recent months. The tax cuts for business are relatively small — worth about $10 billion — but they come on top of much bigger injections of funds into the banking system in recent weeks aimed at boosting activity. The Chinese government said in a statement late Monday that the new stimulus was intended to help the country cope with “an uncertain external environment.” China has accused the United States of starting a trade war by imposing tariffs on billions of dollars of its exports. It has responded with tariffs of its own on American products, drawing threats from President Donald Trump of much bigger retaliation to come. The world’s second-biggest economy grew by 6.7% in the quarter ended June 30, its slowest rate of growth in almost two years. While China should still meet its 2018 growth target of about 6.5%, the intensifying clash with the United States could hurt the economy in the second half of this year. News of the stimulus measures boosted Chinese stocks on Tuesday. The Shanghai Composite index closed up 1.6% and Hong Kong’s Hang Seng gained 1.4%. Among the top gainers were construction and industrial companies, which could benefit from higher infrastructure spending. Monday’s announcement is the latest in a series of steps China has taken to try and perk up its economy.
Since June, the People’s Bank of China has injected about $180 billion into the financial system by providing new loans and reducing the amount of deposits commercial lenders are required to hold.
Analysts said the government’s move on Monday showed it doesn’t want the central bank to do all the heavy lifting. It’s worried about the effect of looser monetary policy on the Chinese currency. The yuan has already fallen to its lowest level in more than a year. Trump has accused China of keeping the yuan artificially low to boost its huge export industry. Ken Cheung, a currency strategist at investment bank Mizuho, said the Chinese government was trying to avoid measures that would cause the yuan to weaken too sharply. The People’s Bank of China “might refrain from scaling up its monetary easing further in the very near term to avoid excess yuan depreciation.” A falling yuan could help Chinese exporters but if the depreciation spirals out of control, it could shock financial markets in China and around the world.
The Trump administration and China this month imposed tariffs of 25% on $34 billion of each other’s exports. US tariffs on an additional $16 billion of Chinese goods are coming soon.
The US government also said last week it was readying new tariffs on Chinese goods worth an additional $200 billion, releasing a list including fruit and vegetables, handbags and baseball gloves. Analysts have previously forecast that trade tensions could shave up to 0.5 percentage points off Chinese growth this year, depending on the intensity of tariffs. Also weighing on growth are policies by the Chinese government designed to rein in the country’s huge amount of corporate debt, which has snowballed since the global financial crisis. Some analysts think things could get worse for China’s economy before they get better. “Despite the shift of Beijing’s stance towards stimulus, we expect growth to weaken before staging a moderate rebound,” said Nomura economist Ting Lu.
LONDON (Reuters) – Brexit will cost Britain up to 12,000 financial services jobs in the short-term, the City of London financial district’s leader said on Tuesday, and many more jobs might disappear in the longer term. At the lower end of the scale, 3,500 jobs could be lost to EU states, Catherine McGuinness told parliament’s Exiting the European Union Committee. More than 2 million people work in financial services across Britain, with 396,000 in London. “We are not expecting a big Brexodus in the first instance. But depending on how things pan out … in the longer term, we may see many more go,” McGuinness told lawmakers. Banks, insurers and asset managers in Britain are opening hubs in the EU before Britain’s departure from the EU in March to ensure continuity in services to customers there. So far, there have been 1,600 confirmed job moves, a City of London spokeswoman said separately. The City was disappointed that Britain’s government ditched its preferred option of future EU trade based on mutual recognition, whereby Britain and the EU accept each other’s rules under two-way regulatory cooperation. “We had expected continued support for mutual recognition,” McGuinness said. Instead, Britain has asked for financial-services access based on a more accommodative version of the EU’s equivalence system, used by Japan and the United States, whereby Brussels alone decides who gets access. The EU had already dismissed mutual recognition and has said it won’t adapt its equivalence system in the way Britain wants. “We can all see it’s going to be an uphill task to persuade the EU27,” McGuinness said. Huw Evans, director general of the Association of British Insurers, said that opting for some form of equivalence posed a risk that Britain would end up becoming a “rule taker” – having to continue copying EU rules in return for access after Brexit. “You are asking the EU to partner with you in a way to make equivalence work in future. Equivalence… is something the EU considers proprietary,” Evans said. “It’s quite a big psychological ask.” There was plenty of opportunity for “mischief making” by EU states topping up equivalence with national rules, Evans said. The lawmakers also quizzed the broadcasting and tech sectors about Britain’s “White Paper” proposals for future EU trade, which calls for full access for goods, but less access for services in return for flexibility to diverge from EU rules. Sammy Wilson, a committee member, accused the industry officials of giving “alarmist evidence”, adding that foreign direct investment in financial services was around a 10-year high. “You are now trying to do an Airbus on us with the kind of evidence you have been giving,” Wilson said, referring to Brexit warnings from the European aircraft manufacturer that angered some government ministers. “There is no getting away that Brexit is deeply suboptimal,” Evans replied. “This isn’t a scare story,” added McGuinness. The government also ditched mutual recognition for broadcasters from its White Paper but, unlike with banks, proposed no alternative, Adam Minns, executive director of Commercial Broadcasters Association, told lawmakers. “The White Paper for us was a backward step. We are not certain if we are being thrown under a bus or just hitting a temporary roadblock. This could not have come at a worst time,” Minns said. Britain is home to 1,200 international TV channels that beam programmes to viewers in the European Union, but without an EU licence they would have to relocate, Minns said. Giles Derrington, head of Brexit policy at techUK, said the sector wanted the same trade-off as proposed for goods, meaning EU rules in return for EU access, but without flexibility to diverge. The tech sector struggles to see where the benefits of diverging from EU rules would come from, Derrington said. Lawmakers asked whether the industry officials if they would like Britain to join Norway in the European Economic Area, whose members must follow EU rules but without any say over them. “I look at the EEA longingly. We don’t desire more flexibility at the moment,” Minns said.
(Reuters) – The Nasdaq Composite hit a record high on Tuesday as Alphabet’s blowout results sparked a rally in high-growth stocks and bolstered expectations of a robust earnings season, while a rise in oil and metal prices boosted energy and material companies. The benchmark S&P 500 index rose to its highest since early February and is within 2 percent of its late-January record as a clutch of robust earnings helped investors shake off concerns over a U.S.-China trade war and a strengthening dollar. Shares of Alphabet (GOOGL.O) jumped 5.3 percent to an all-time high of $1,275.00 after the online search giant’s quarterly results trounced Wall Street targets. The Google-parent was the biggest boost to the S&P 500 and helped push the S&P technology sector .SPLRCT 0.82 percent higher. Facebook (FB.O) and Amazon (AMZN.O) were up 1.6 percent and 1.4 percent, respectively. Both report later this week. Tech stocks have led the recovery from the early 2018 tumult that dragged U.S. stocks into a correction and have helped erase nearly all of the broader market’s losses. Agriculture-related stocks gained on news that the Trump administration plans to announce aid for U.S. farmers to help protect them from the repercussions of spats between the United States and its trade partners. “The markets are really anchored into fundamentals and looking at the earnings, which is heavy this week,” said David Lyon, global investment specialist at J.P. Morgan Private Bank in San Francisco.
Shares of Whirlpool, the U.S. based washing machine giant who was once in favor of stricter trade controls for its own industry, plummeted after executives blamed rising steel and aluminum costs for diminished quarterly earnings. “Global steel cost has risen substantially and, particularly in the US, they have reached unexplainable levels,” Whirlpool CEO Marc Bitzer told shareholders during a conference call Tuesday. Whirpool stock fell 14 percent in trading Tuesday, on pace for its worst drop since October 2011. The U.S. company was a major advocate for legislation to protect against what Bitzer last year called a “long story of dumping” by foreign competitors LG and Samsung in the washing machine business. Bitzer said during the company’s fourth-quarter earnings call that the White House had “put an end” to this alleged dumping, saying it was “encouraging that finally trade laws are being enforced.” “As the next couple months unfold, we will see a lot more clarity” for how tougher trade laws will impact the Whirlpool’s bottom-line, Bitzer said on Jan. 25. Now the company cites U.S. tariffs on steel and aluminium as contributing to the increased cost in Whirpool’s raw materials. Three months after calling the government’s actions on trade an “incredible” outcome, Bitzer said on Whirlpool’s first-quarter earnings call April 24 that costs “have risen substantially and, as a result, we’re revising our raw material inflation guidance for 2018.”
On Monday, Whirpool again raised its guidance for costs of steel and aluminum in its second-quarter report, while the company again adjusted its expected 2018 profits downward.
Bitzer at times on the call Tuesday downplayed the effects of the tariffs, saying the impact was “almost the same order” as impacts from a freight shortage in the second quarter. Instead, Bitzer focused on the price of steel.
“U.S. steel is 50 percent more expensive than the rest of the world and simply cannot be explained by the input cost,” Bitzer said.
Washing machines are one example of how tariffs can have unexpected and adverse effects on the domestic companies the policies attempt to protect. Whirlpool also noted the hit taken by its suppliers. “We are impacted by the tariffs, as we are an import of record of our suppliers who have to basically pay the tariffs,” Bitzer said. Bitzer expects “the U.S. industry to recover” in the second half of the year, but Whirpool still lowered its full year profit forecast. The company now expects 2018 adjusted earnings per share between $14.20 and $14.80, down from its previously guided range of earnings per share between $14.50 and $15.50, citing primarily the rising costs of steel and aluminium.
Harley-Davidson Inc.’s (HOG.N) shares rallied on Tuesday after the motorcycle maker forecast a lower-than-expected hit to profit margins from President Donald Trump’s trade tariffs and its quarterly earnings topped Wall Street estimates. Its forecast and results raised hopes 2018 profits will hold up better than expected, despite obstacles such as rising raw materials costs, higher tariffs on bikes shipped to Europe and an aging customer base. Harley’s shares (HOG.N) were last up 9 percent at $45.22, recovering almost of their losses since late June, when Trump attacked the company for planning to move production for European customers overseas. The Milwaukee, Wisconsin-based company now expects its motorcycles segment operating margin as a percent of revenue to be about 9 percent to 10 percent in 2018, compared with 9.5 percent to 10.5 percent it projected earlier. The drop was on account of higher steel and aluminum costs and a 25-percent retaliatory duty imposed by the European Union on the shipments from the United States. Those two factors together are estimated to cost Harley $45 million to $55 million this year. The company expects to absorb half of the increased costs through disciplined business management. “We are making every effort to mitigate the costs of those tariffs,” Chief Financial Officer John Olin told analysts on a conference call. David Beckel, an analyst at Bernstein, reckons the 50 basis points fall would translate into about $25 million in added operating costs, below Harley’s previous estimate of an up to $65 million hit from higher raw materials costs and the European tariffs. This will likely result in upward revisions to the company’s 2018 earnings, Beckel said.
Harley’s second-quarter net income fell to $248.3 million, or $1.45 per share in the second quarter ended June 30, from $258.9 million, or $1.48 per share, a year earlier. That exceeded analyst estimates of $1.34 per share, according to Thomson Reuters I/B/E/S.
The company retained its 2018 shipment forecast and said it would reveal plans on Monday about its strategy to train new riders, revive U.S. sales and grow its international business. U.S. President Donald Trump’s restrictive trade policies have inflated Harley’s raw material costs and put it in crosshairs of a trade skirmish with the European Union. Last month, Harley unveiled a plan to shift production for European customers overseas to avoid EU’s retaliatory tariffs, a move that Trump slammed. On Tuesday, Chief Executive Matt Levatich stood by the company’s move, calling it “the best decision, given the circumstances.” Trade tariffs have compounded the troubles of a company that has been grappling with an aging customer base, weak demand from younger buyers and discounts offered by its rivals. Europe is Harley’s second biggest market after the United States. While U.S. retail sales fell 6.4 percent in the last quarter from a year ago, European sales were up about 4.3 percent year-on-year and accounted for half of international revenue. The company did not say where it would shift the production for European markets. Harley has assembly facilities in India and Brazil, and is expected to launch an assembly plant in Thailand in September.
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The post met with some pushback from lawmakers, including Sen. Pat Toomey, R-Pa., a member of the Senate’s banking and finance committees. “Tariffs are not great,” Toomey told CNBC Tuesday. “They are taxes, paid by Americans, that harm consumers, workers, and companies.”
A leading figure in farming circles painted a dire picture of the industry while the trade war escalates, even with aid on the way.
“Right now it’s looking bleak for farming,” said Joe Steinkamp, a corn and soybean farmer from Evansville, Ind., and a director on the board of the American Soybean Association. He said things are so tough in the industry there’s a risk of farmers exiting the business – while also expressing concern about government involvement. “I knew they were going to do something for the benefit for farmers. Obviously, [the administration thinks] it will be a medium- to long-term fix to get the trade dispute with China figured out,” Steinkamp said. “But I am always scared when the government is helping us out rather than doing positive things for trade.”
New York Attorney General Barbara Underwood has accused President Donald Trump of waffling on the issue of Russian electoral interference. Her comments were made in the context of an announcement regarding basic U.S. electoral integrity. On Monday, 21 attorneys general issued a letter urging Congress to prioritize the security of American election systems in time for the 2018 midterm elections “and [further] elections to come.” In a press release accompanying the letter, Underwood railed: No matter how much President Trump waffles, the facts are clear: Russia interfered with our 2016 elections. It’s high time that Congress act to prevent the next attack – because our democracy depends on it. Our bipartisan coalition of Attorneys General has outlined basic steps Congress can take right now to protect election integrity, before it’s too late. As the latest investigations and indictments make clear, during the 2016 election, hackers within Russia’s military intelligence service not only targeted state and local election boards, but also successfully invaded a state election website to steal the sensitive information of approximately 500,000 American voters and infiltrated a company that supplies voting software across the United States. Culled from the ranks of both the Democratic and Republican parties, the bipartisan group of attorneys general urged Congress to adopt three distinct proposals. First, the letter suggests that Congress act on “election-security legislation” such as the Secure Elections Act, which is currently before the Senate. This bill was introduced by a large group of bi-partisan senators. Second, the letter requests increased funding for the Election Assistance Commission (EAC) in order “to support election security improvements at the state level and to protect the personal data of the voters” of the states in question. The EAC is a little-known government entity tasked with myriad voting-and-election-related duties, including the creation of a national standard for voting systems in the United States. This agency is relatively new and its effectiveness is mostly untested; allegations of chronic underfunding have plagued the EAC since its inception after the passage of the Help America Vote Act in 2002. Third, the attorneys general letter calls for the imposition of “cybersecurity standards” across voting networks nationally. The letter asserts, “It is critical that there be a combined effort between governments and security experts to protect against the increased cyber threats posed by foreign entities seeking to weaken our institutions.”
NEW YORK – Shares of Tesla tumbled Monday on reports that theto help it turn a profit. A memo provided to The Wall Street Journal shows the company asked a supplier to return what it calls a meaningful amount of money on its payments since 2016. The memo said all suppliers were being asked to help the company become profitable. Tesla declined to comment on the specific memo, but said it is seeking price reductions from a handful of suppliers for projects. “We asked fewer than 10 suppliers for a reduction in total capex project spend for long-term projects that began in 2016 but are still not complete, and any changes with these suppliers would improve our future cash flows, but not impact our ability to achieve profitability in Q3,” Tesla said in a statement. Tesla said that most of its discussions with suppliers are focused on issues like parts prices and design, adding that “negotiation is a standard part of the procurement process.” Tesla stock fell 3.5 percent to $302.61 Monday afternoon. It’s down from a peak of $385 in September, with many investors growing concerned about Tesla’s spending and its ability to meet its production goals. The request raised more questions about Tesla’s cash position. The 15-year-old company has reported only two quarterly profits in its history and has never made a profit for a full year. It is spending about $1 billion a quarter as it ramps up manufacturing of the Model 3 sedan, a lower-priced car that is key to Tesla’s plans of becoming a major mass-market automaker. “What stuck out to us as a negative is that Tesla’s memo reportedly described the request as essential to the company’s continued operation,” Citi Investment Research analyst Itay Michaeli wrote in a note to clients. Efraim Levy, a senior equity analyst for CFRA, said he found Tesla’s request unusual. “I haven’t heard of this being done before and I’ve been following the industry for 20 years,” he said. “It sounds like something that happens when you’re struggling.” Tesla had $2.7 billion in cash on hand at the end of the first quarter and many experts think it will need to raise money soon. One way to do that is by selling stock, which could send its share price lower still. CEO and top shareholder Elon Musk has said that Tesla intends to become profitable in the second half of 2018, and analysts said Monday that the memo is an attempt to meet that goal. But they said if Tesla has to try this hard to meet its target, it might be a self-defeating effort. “If there are any one-time windfalls that aid in Tesla achieving its profit goals, we expect the market would view that as unsustainable,” said Jamie Albertine, senior automotive analyst for Consumer Edge. In June the company said it was eliminating 3,600 jobs, or 9 percent of its staff, as part of a restructuring effort. At the beginning of July the company said it met a long-time target of building 5,000 Model 3s in a week, but industry analysts have questioned whether Tesla can sustain that pace.
On Monday, May 7, Vladimir Putin was inaugurated for his fourth term as president of Russia. His presidency will be shaped by growing encirclement and pressure by US sanctions and by social struggles at home as the new government prepares to launch far-reaching attacks on the working class. A pompous inauguration ceremony on Monday was preceded on Saturday by mass arrests of anti-Putin protesters, including supporters of the nationalist, right-wing, pro-Western opposition politician Alexei Navalny. More than 1,600 people were arrested, including Navalny himself. He was released on Sunday. Putin was reelected in the presidential elections of March 18 with over 76 percent of the vote. He is set to remain president until 2024. In his inaugural speech, Putin, echoed his last address on the state of the nation, combining the whipping up of nationalism with phony promises of social reforms and an announcement of far-reaching economic changes. Putin began his inaugural speech by saying that he acknowledged “the responsibility before you,…before Russia, a country of grandiose victories and achievements” and “before the 1,000-year-old history of Russian statehood.” He declared his commitment to a “holy relationship toward our native soil” and stated: “I consider it the goal and sense of my entire life to do everything for Russia.” He went on praising the Russian Constitution which was passed 25 years ago, in 1993, to solidify the new capitalist property relations that had been introduced by the Stalinist bureaucracy with its dissolution of the Soviet Union. Putin argued that the past quarter century had shown that “all beauty and power lies in our autonomy [samobytnost’] and unity” and that Russia had learned “to defend our interests.” He declared that Russia was willing to collaborate with all states in the world “to our mutual benefit” and “in the interests of stability on the planet.” However, Putin stressed, the focus of his next term in office would be on “domestic” issues and major changes in the Russian economy. Much of the speech by Putin and his proposals were almost literal quotations from the report “A Strategy for the Development of the Country, 2018-2024,” which he had earlier commissioned from the Center for Strategic Research (CSR). The CSR is headed by the former finance minister and close Putin ally Alexei Kudrin, who is generally considered to be the greatest darling of both the liberal opposition and the world financial elite among Putin’s inner circle.
President Donald Trump threatened his Iranian counterpart in a Sunday night Twitter post:
Trump tweet: To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!
Trump’s tweet followed Iranian President Hassan Rouhani cautioning the American leader on Sunday about pursuing hostile policies against Tehran, saying: “War with Iran is the mother of all wars.” “You are not in a position to incite the Iranian nation against Iran’s security and interests,” the Iranian leader said, in an apparent reference to reports of efforts by Washington to destabilize Iran’s Islamic government. Still, Rouhani did not rule out peace between the two countries. The heated exchange comes as tension between the two nations has increased since Trump pulled the U.S. out of a nuclear deal with Iran that was struck during the Obama administration. Monday morning, Trump’s hawkish national security advisor, John Bolton, backed the president’s threat. “I spoke to the President over the last several days, and President Trump told me that if Iran does anything at all to the negative, they will pay a price like few countries have ever paid before,” Bolton said in a statement released by the White House. In response to the threat of renewed sanctions on its exports, Iran suggested in July that it could leverage its position along the important trade route, the Strait of Hormuz, to stop other Middle Eastern countries from shipping their barrels to the world. Even before he became president, Trump repeatedly characterized the agreement, which had been brokered under the Obama administration, as one of the “worst deals” the U.S. had ever negotiated. Trump’s all-caps warning to Rouhani in the Sunday night tweet has also drawn parallels to his approach when dealing with another hostile foreign leader: North Korea’s Kim Jong Un.
The top 1% took home 22.03% of all income in 2015
The gap between the rich and the poor in America has ballooned over the last several decades. In 2015, the top 1% of Americans made 26.3 times as much income as the bottom 99 percent — an increase from 2013, when they earned 25.3 times as much, according to a study released Thursday from the Economic Policy Institute, a left-leaning Washington, D.C. think tank. A family needed an annual income of $421,926 to be part of the 1% nationally, the study said, but in some states the threshold was higher. The top 1% of Americans took home more than 22% of all income in 2015, the study found. That’s the highest share since a peak of 23.9% just before the Great Depression in 1928. On Wednesday, Amazon AMZN, +0.04% founder Jeff Bezos became the richest person of the modern era as his wealth surpassed $150 billion. The fortunes of people like Bezos and those made on Wall Street, in Hollywood and Silicon Valley fuel much of wealth inequality in the U.S., but the issue affects most of the country, the report showed. The incomes of the top 1% grew faster than the bottom 99% in 43 states between 2009 and 2015. In nine states in the U.S., the top 1% represents more than half of all income growth. Meanwhile, the median net worth of Americans currently hovers at $68,828 per household. One in five Americans say they have more credit-card debt than they do in emergency savings and less than 40% of Americans say they have enough savings to cover a $1,000 emergency room visit or car repair. “Rising inequality affects virtually every part of the country, not just large urban areas or financial centers,” said Estelle Sommeiller, a socio-economist at the Institute for Research in Economic and Social Sciences in France and author on the study. “It’s a persistent problem throughout the country — in big cities and small towns, in all 50 states. While the economy continues to recover, policymakers should make it a top priority to grow the incomes of working people while reining in corporate profits.” The EPI — a liberal nonprofit associated with the labor movement — recommends returning bargaining power to U.S. workers, increasing political participation by all citizens, and boosting public investments in child care, education, housing and health care. “Such policies will help prevent the wealthiest few from appropriating more than their fair share of the nation’s expanding economic pie,” Sommeiller said. Such ideas have gained popularity as the 2018 midterm elections approach, with New York’s Alexa Ocasio-Cortez winning an upset victory in June’s Democratic primary in New York’s 14th congressional district running on a platform of Medicare for all and reining in Wall Street. She also supports the idea of a government program guaranteeing paid jobs for anybody who wants one. Critics say such policies are ill-conceived and will “bury us in debt.” Another theory on the cause of the rising inequality: The decline of unions, according to a study released by the EPI in August 2017. Today, only 11% of American workers are covered by unions, which is a sharp contrast from the 1950s when a third of the U.S. workforce was unionized or in a job represented by a union. Union workers these days earn on average 13.2% more than non-unionized workers with similar education and experience in the same sector.
A trade war is now a reality, French Finance Minister Bruno Le Maire has warned as G20 ministers gather for a summit in Argentina.The current US trade policy of imposing unilateral tariffs is based on “the law of the jungle”, he said. But US Treasury Secretary Steven Mnuchin defended the tariffs and urged the EU and China to open their markets to allow free competition. Last week, US President Donald Trump described the EU as a “foe” on trade. Mr Trump later threatened to impose tariffs on all $500bn (£380bn) of Chinese goods entering the US in a growing trade row. The US has large trade deficits with both the 28-member EU and China. The two-day talks in Buenos Aires bring together finance ministers and central bankers of the world’s top 20 economies. “World trade cannot base itself on the law of the jungle and the unilateral increase of tariffs is the law of the jungle,” Mr Le Maire told AFP news agency.
“The law of the fittest – this cannot be the future of global trade relations. The law of the jungle will only turn out losers, it will weaken growth, threaten the most fragile countries and have disastrous political consequences.” He added that a trade war was now a reality, and that the EU could not consider negotiating a free trade deal with the US without America first withdrawing its tariffs on steel and aluminium. Little has caused Donald Trump more annoyance than the trading deficits between the US and its major partners. He believes that if you have a trade deficit – if you import more than you export – you are losing out. Tackling what he has called “unfair trading practices” has become a key plank of his administration. The European Union, China and the North American Free Trade Agreement (Nafta) countries, Mexico and Canada, have been his main targets.
Sunday on ABC’s “This Week,” former UN ambassador under Obama Susan Rice said it was a “legitimate question” if President Donald Trump was compromised by Russia. When asked if Trump is compromised by Russia, Rice said, “I don’t know what his motivations are. I think that’s a legitimate question, and it has been reinforced not only by the series of policy steps that I just mentioned that he is he has taken that have served Russian interest as opposed to U.S. interest, but it was reinforced sadly this week by that tragic display of sycophancy in Helsinki where the president called into question yet again, standing next to Vladimir Putin, a dictator, the integrity of our intelligence community. He offered or seemed to be willing to consider an offer to hand over our ambassador to Russia, former Ambassador Micheal McFaul, and others to the Russians for questioning. It was a series of extraordinary capitulation that really do legitimately call into question what is going on.”
President Donald Trumplashed out Saturday over lawyer Michael Cohen‘s recording their conversation about possibly paying off a Playboy model, but it appears that his lawyers actually waived privilege over the tape. That means federal prosecutors can listen to it, and possibly use it in a case. Authorities got their hands on the audio after FBI agents obtained it during April 9 searches on Cohen’s home, hotel room, and office. Both sides fought over how many of the almost 900,000 seized documents were privileged. Special Master Barbara Jones determined that the tape was one of 2,633 which met that designation, but according to a CNN source, Trump’s team waived it in this case. “It is the client who owns the privilege and not the lawyer,” the person said. “In this specific instance, it was Trump who waived the privilege after Special Master Jones ruled the tape was privileged. Team Trump actually contacted the judge and waived the privilege, thus, permitting Rudy [Giuliani] the ability to release his version of the tape’s content. It is ironic that Trump would complain about a privileged tape that would not have been released and then chooses to make it public himself. Very foolish strategy by team Trump.” The conversation reportedly concerned a possible payoff to Playboy model Karen McDougal. She claimed to have had an affair with him. American Media Inc., the parent company of the National Enquirer, ended up buying her rights to the story, but sat on it. She sued them, claiming she was misled about the deal. (The president’s team denied the affair ever happened.) Trump lawyer Rudy Giuliani has repeatedly said the tape itself is exculpatory, and proves the president did nothing wrong. The audio showed no wrongdoing, he told CNN. “Cohen is talking about buying the rights from AMI (American Media Inc.),” Giuliani said. “They’re talking about a corporation doing it, one of their corporations doing it. The President says ‘make sure it’s done correctly, and make sure its done by check [so there would be a record].’” But no payment was made in the end, Giuliani said. Cohen’s legal team argues that it won’t hurt their client. “Obviously, there is an ongoing investigation, and we are sensitive to that. But suffice it to say that when the recording is heard, it will not hurt @MichaelCohen212,” Cohen’s lawyer Lanny Davis tweeted on Friday. “Any attempt at spin can not change what is on the tape.” Trump complained that the recording was “possibly illegal” but a source pointed out that New York, where the discussion took place, features a one-party consent law, so it would be legal for a person to record a conversation without permission from the other individual.
Sen. Lindsey Graham is warning President Trump amid ongoing negotiations with North Korea that he’s being “played” by dictator Kim Jong Un. Graham told “Face the Nation” that he worries “China is pulling North Korea back” and the president should instead push for firm deadlines for the North to meet. “Here’s what I would do: I would put deadlines in terms of when I want North Korea to deliver the remains of our POWs and missing in action, and I would restart the military exercises,” Graham suggested. “North Korea is playing the same old game with you they’ve played with every other president. You’re being tough on China, and you should be, but China is pulling North Korea back. You need to make sure that China and North Korea know and believes that you’re different than everybody else.” Following Mr. Trump’s historic summit with Kim last month, Graham toldthat China’s goal of driving the U.S. out of Asia is accomplished if the U.S. withdraws its forces from the region. “That will lead to more conflict, not less. Our forces in South Korea are stabilizing for Asia,” he said. Graham said on Sunday that the administration needs to now restart joint military exercises in the region and “put on the table removing our dependence from South Korea as a real, stern warning to North Korea of what happens if they play you.”
She was also bankrolled by a Russian billionaire.
Accused Russian spy Maria Butina had high-level meetings with US Treasury officials and received funding from a Russian billionaire invested in U.S. energy and technology, according to news reports on Sunday. Fresh revelations shedding more light on her activities in the United States come after Butina — founder of what she considered the Russian equivalent of the National Rifle Association — was indicted Tuesday on conspiracy charges and for failing to register as a foreign agent. Butina has pleaded not guilty. According to Reuters, Butina participated in meetings between her handler Alexander Torshin — then deputy governor of the Russian Central Bank and known to have close ties with Russian President Vladimir Putin — and two senior officials at the Federal Reserve and Treasury Department in 2015. As last week’s indictment details, Butina is accused of working with Torshin “for the purpose of developing and executing a plan to identify and exploit personal connections with U.S. persons having influence in American politics who were in positions to advance the interests of the Russian Federation.” The reports lend credence to this accusation. Butina had “wider high-level contacts in Washington than previously known,” writes Reuters. The news outlet says the meetings provide further insight into her efforts to “cultivate” relationships with American political leaders and special interest groups. According to Reuters, Butina traveled to the U.S. with Torshin in April 2015 where the Washington D.C. foreign policy think tank Center for the National Interest — known for its pro-Russia stance — arranged meetings for the two Russians with then Federal Reserve chairman Stanley Fischer, and Treasury undersecretary for international affairs at the time Nathan Sheets. The indictment also accuses the NRA of acting as a conduit between Russian operatives and the Republican Party. But that’s not all. As the Washington Post reported Sunday, Butina has received financial support from Russian Billionaire Konstantin Nikolaev, whose fortune has largely come from investments in port and railroads in Russia. Nikolaev, however, also sits on the board of the Houston-based company, American Ethane. Last year in China, President Donald Trump showcased the company — it was one of 15 to sign massive trade deals between the U.S. and China. The billionaire is also an investor in a San Francisco start-up called Grabr that helps users buy “unusual products” from around the world, the Washington Post describes.A spokesperson for Nikolaev confirmed to the Washington Post that he was in contact with Butina between 2012 and 2014 while she was launching her pro-gun rights group in Russia. However, he declined to confirm whether Nikolaev provided any financial support. The spokesperson also added that Nikolaev has never met Trump. Nikloaev’s son Andrey, however, volunteered for the 2016 campaign to elect Trump. And according to sources speaking with the Washington Post, Konstantin Nikolaev was spotted at the Trump International Hotel in D.C. during Trump’s inauguration in January 2017.
While it’s unclear whether Nikolaev attended any official inaugural events, according to the Post, Butina “made an appearance” at one of Trump’s inaugural balls. Nick Bit: of course she attended Trumps inaugural ball… After all they both work for the same boss.
Washington (CNN)South Carolina Republican Rep. Trey Gowdy on Sunday called on President Donald Trump to affirm wholeheartedly the intelligence community’s conclusion that Russia attempted to influence the 2016 presidential election. “The evidence is overwhelming,” Gowdy said. “It can be proven beyond any evidentiary burden that Russia is not our friend and they tried to attack us in 2016. So the President either needs to rely on the people that he has chosen to advise him, or those advisers need to reevaluate whether or not they can serve in this administration. But the disconnect cannot continue. The evidence is overwhelming, and the President needs to say that and act like it.” Gowdy, speaking on “Fox News Sunday,” said Trump missed “a really good opportunity” at his press conference with Russian President Vladimir Putin in Helsinki, Finland, last week to distinguish the US position from Russia. At the press conference, Trump appeared to side with Putin over the US intelligence community, which has concluded that Russia was behind efforts to influence the 2016 US presidential election. Trump said in Helsinki that he did not see any reason why Russia would have been responsible for the election interference, but later said he had misspoken and should have said “wouldn’t” instead of “would.”
South Carolina GOP Congressman Mark Sanford, who lost a primary to a conservative insurgent backed by President Donald Trump, warned on about the president’s ‘autocratic style’ that was eroding political discourse. In a broad panel discussion on Saturday at New York’s Ozy Fest, Sanford broke down several of the reasons why he was defeated by Katie Arrington in June’s primary for South Carolina’s First District. “The beauty of the American political experiment is we can agree to disagree. You might have a very liberal perspective, I might have a conservative perspective, but we can sit at the table and begin to hash out ideas,” Sanford said. “The danger I believe of Donald Trump is he is autocratic in style,” said Sanford, who’s been a frequent critic of Trump. That tendency “is not conducive to the open debate of ideas which has been the hallmark of Americans,” he added. Sanford is a former governor who was once speculated as a potential presidential contender, but resigned in scandal after admitting to an extramarital affair. He then revived his political career with a successful bid for Congress. That came to a screeching halt after Trump backed Arrington, an unapologetic defender of the president. “He went after me in my primary and I lost my primary,” Sanford said on Saturday. “During her victory celebration, [Arrington’s] words were, ‘We are the party of Donald Trump’ and I could not disagree” more, Sanford said.
He added that the Republican party risks turning itself into a “a cult of a personality” based on Trump. “Our Founding Fathers were so deliberate in forming a nation of laws and not men, and if we go against that in the slightest form, we are playing with fire,” Sanford added.
Sanford noted that with a deficit of more than $1 trillion, the U.S. is flirting with a new financial crisis that Trump may not be able to manage. “Trump is an economist populist. Telling you what you want you want to hear and selling a lie that he knows can’t come true,” Sanford added. Trump has courted controversy with his base by stoking trade wars with most of the U.S.’s most important economic allies. People ostensibly aligned politically with the president have expressed concerns about how the multi-pronged dispute will affect their livelihoods, which include vast swaths of ranchers, farmers and whisky makers. Grover Norquist, founder and President of Americans for Tax Reform who was also on the panel Saturday, weighed in on the subject of global tariffs.
“Tariffs are simply taxes. There not something special or different they are just stupid and destructive taxes on the American consumer,” said the GOP activist. “When we put up tariffs we hurt Americans.”
“Its a target against our own people and what we are able to contribute into our economy while diminishing the relationships that we have had for decades and centuries with countries like Canada, UK and other places in Europe. As relationships disintegrate, this makes it easier for our enemies to get into our system here in the U.S,” she added.
Ecuador’s President Lenin Moreno traveled to London on Friday for the ostensible purpose of speaking at the 2018 Global Disabilities Summit (Moreno has been confined to a wheelchair since being shot in a 1998 robbery attempt). The concealed, actual purpose of the President’s trip is to meet with British officials to finalize an agreement under which Ecuador will withdraw its asylum protection of Julian Assange, in place since 2012, eject him from the Ecuadorian Embassy in London, and then hand over the WikiLeaks founder to British authorities. Moreno’s itinerary also notably includes a trip to Madrid, where he will meet with Spanish officials still seething over Assange’s denunciation of human rights abuses perpetrated by Spain’s central government against protesters marching for Catalonia independence. Almost three months ago, Ecuador blocked Assange from accessing the internet, and Assange has not been able to communicate with the outside world ever since. The primary factor in Ecuador’s decision to silence him was Spanish anger over Assange’s tweets about Catalonia.
It is thus highly unlikely that Moreno – who has shown himself willing to submit to threats and coercion from the UK, Spain and the U.S. – will obtain a guarantee that the U.K. not extradite Assange to the U.S., where top Trump officials have vowed to prosecute Assange and destroy WikiLeaks.
The central oddity of Assange’s case – that he has been effectively imprisoned for eight years despite never having been charged with, let alone convicted of, any crime – is virtually certain to be prolonged once Ecuador hands him over to the U.K. Even under the best-case scenario, it appears highly likely that Assange will continue to be imprisoned by British authorities.
The only known criminal proceeding Assange currently faces is a pending 2012 arrest warrant for “failure to surrender” – basically a minor bail violation charge that arose when he obtained asylum from Ecuador rather than complying with bail conditions by returning to court for a hearing on his attempt to resist extradition to Sweden. That charge carries a prison term of three months and a fine, though it is possible that the time Assange has already spent in prison in the UK could be counted against that sentence. In 2010, Assange was imprisoned in Wandsworth Prison, kept in isolation, for 10 days until he was released on bail; he was then under house arrest for 550 days at the home of a supporter. Assange’s lawyer, Jen Robinson, told the Intercept that he would argue that all of that prison time already served should count toward (and thus completely fulfill) any prison term imposed on the “failure to surrender” charge, though British prosecutors would almost certainly contest that claim. Assange would also argue that he had a reasonable, valid basis for seeking asylum rather than submitting to UK authorities: namely, well-grounded fear that he would be extradited to the U.S. for prosecution for the act of publishing documents. The Obama administration was eager to prosecute Assange and WikiLeaks for publishing hundreds of thousands of classified documents, but ultimately concluded that there was no way to do so without either also prosecuting newspapers such as the New York Times and the Guardian which published the same documents, or create precedents that would enable the criminal prosecution of media outlets in the future. Indeed, it is technically a crime under U.S. law for anyone – including a media outlet – to publish certain types of classified information. Under U.S. law, for instance, it was a felony for the Washington Post’s David Ignatius to report on the contents of telephone calls, intercepted by the NSA, between then National Security Adviser nominee Michael Flynn and Russian Ambassador Sergey Kislyak, even though such reporting was clearly in the public interest since it proved Flynn lied when he denied such contacts.
That the Washington Post and Ignatius – and not merely their sources – violated U.S. criminal law by revealing the contents of intercepted communications with a Russian official is made clear by the text of 18 § 798 of the U.S. Code, which provides (emphasis added):
“Whoever knowingly and willfully communicates … or otherwise makes available to an unauthorized person, or publishes … any classified information … obtained by the processes of communication intelligence from the communications of any foreign government … shall be fined under this title or imprisoned not more than ten years, or both.”
But the U.S. Justice Department has never wanted to indict and prosecute anyone for the crime of publishing such material, contenting themselves instead to prosecuting the government sources who leak it. Their reluctance has been due to two reasons: first, media outlets would argue that any attempts to criminalize the mere publication of classified or stolen documents is barred by the press freedom guarantee of the First Amendment, a proposition the DOJ has never wanted to test; second, no DOJ has wanted as part of its legacy the creation of a precedent that allows the U.S. Government to criminally prosecute journalists and media outlets for reporting classified documents.
But the Trump administration has made clear that they have no such concerns. Quite the contrary: last April, Trump’s then-CIA Director Mike Pompeo, now his Secretary of State, delivered a deranged, rambling, highly threatening broadside against WikiLeaks. Without citing any evidence, Pompeo decreed that WikiLeaks is “a non-state hostile intelligence service often abetted by state actors like Russia,” and thus declared: “we have to recognize that we can no longer allow Assange and his colleagues the latitude to use free speech values against us.” The long-time right-wing Congressman, now one of Trump’s most loyal and favored cabinet officials, also explicitly rejected any First Amendment concerns about prosecuting Assange, arguing that while WikiLeaks “pretended that America’s First Amendment freedoms shield them from justice . . . they may have believed that, but they are wrong.” Pompeo then issued this bold threat: “To give them the space to crush us with misappropriated secrets is a perversion of what our great Constitution stands for. It ends now.” Trump’s Attorney General Jeff Sessions has similarly vowed not only to continue and expand the Obama DOJ’s crackdown on sources, but also to consider the prosecution of media outlets that publish classified information.
It would be incredibly shrewd for Sessions to lay the foundation for doing so by prosecuting Assange first, safe in the knowledge that journalists themselves – consumed with hatred for Assange due to personal reasons, professional jealousies, and anger over the role they believed he played in 2016 in helping Hillary Clinton lose – would unite behind the Trump DOJ and in support of its efforts to imprison Assange. During the Obama years, it was a mainstream view among media outlets that prosecuting Assange would be a serious danger to press freedoms. Even the Washington Post Editorial Page, which vehemently condemned WikiLeaks, warned in 2010 that any such prosecution would “criminalize the exchange of information and put at risk” all media outlets. When Pompeo and Sessions last year issued their threats to prosecute Assange, former Obama DOJ spokesperson Matthew Miller insisted that no such prosecution could ever succeed:
BUENOS AIRES (Reuters) – The International Monetary Fund (IMF) warned world economic leaders on Saturday that a recent wave of trade tariffs would significantly harm global growth, a day after U.S. President Donald Trump threatened a major escalation in a dispute with China. IMF Managing Director Christine Lagarde said she would present the G20 finance ministers and central bank governors meeting in Buenos Aires with a report detailing the impacts of the restrictions already announced on global trade. “It certainly indicates the impact that it could have on GDP (gross domestic product), which in the worst case scenario under current measures … is in the range of 0.5 pct of GDP on a global basis,” Lagarde said at a joint news conference with Argentine Treasury Minister Nicolas Dujovne. In the briefing note prepared for G20 ministers, the IMF said global growth may peak at 3.9 percent in 2018 and 2019, while downside risks have increased due to the growing trade conflict. Her warning came shortly after the top U.S. economic official, Treasury Secretary Steven Mnuchin, told reporters in the Argentine capital there was no “macroeconomic” effect yet on the world’s largest economy. Long-simmering trade tensions have burst into the open in recent months, with the United States and China – the world’s No. 2 economy – slapping tariffs on $34 billion worth of each other’s goods so far. The weekend meeting in Buenos Aires comes amid a dramatic escalation in rhetoric on both sides. Trump on Friday threatened tariffs on all $500 billion of Chinese exports to the United States. Mnuchin will try to rally G7 allies over the weekend to join the United States in more aggressive action against China, but they may be reluctant to cooperate because of U.S. tariffs on steel and aluminium imports from the European Union and Canada, which prompted retaliatory measures.. The last G20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy except for a commitment to “further dialogue.” German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low. “I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires. The U.S. tariffs will cost Germany up to 20 billion euros ($23.44 billion) in income this year, according to the head of German think-tank IMK. Bank of Japan Governor Haruhiko Kuroda said he hoped the debate at the G20 gathering would lead to an easing of retaliatory trade measures. “Trade protectionism benefits no one involved,” he said. “I think restraint will eventually take hold.” Mnuchin told reporters on Saturday that he has not seen a macroeconomic impact from the U.S. tariffs on steel, aluminium and Chinese goods, along with retaliation from trading partners. But he said there have been microeconomic effects on individual businesses, he said, adding that the administration was closely monitoring these and looking at ways to help U.S. farmers hurt by retaliatory tariffs. The U.S. dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate rises, halting a rally that had driven the dollar to its highest level in a year.
Wall Street analysts, regulators and the media have all been recent victims of the eccentric billionaire. But his calling a member of the team rescuing the Thai soccer kids a “pedo” did more than raise eyebrows. The July 15 tweet prompted an open letter from Loup Ventures’ Gene Munster, who described Musk’s behavior as “fueling an unhelpful perception of your leadership — thin-skinned and short-tempered.” The Munster letter on July 17 wasn’t the only red flag raised about Musk. That, we look back in time, goes to: Musk got around to apologizing to the “pedo guy” on Wednesday, acknowledging the rescuer’s criticism of the mini-submarine Musk sent to assist in the soccer team’s rescue does “not justify my actions against him.”
Musk’s sincerity was suspect, however, as the “pedo guy” had already threatened to sue. On July 5, he tweeted, “@lopezlinette has published several false articles about Tesla, including a doozy where she claimed Tesla scrapped more batteries than our total S,X &3 production number, which is physically impossible.” He also accused the Business Insider writer of being motivated by short-seller Jim Chanos, whom Musk called “Tesla’s most prominent short-seller.” “Her articles print Chanos’ view verbatim,” he added. “This is not journalism.” Musk doesn’t limit his wrath to individual journalists, which is why on May 23 he said he’d take on the entire industry by developing a fake news/honest journalism scorecard. “Going to create a site where the public can rate the core truth of any article & track the credibility score over time of each journalist, editor & publication,” he tweeted. “Thinking of calling it Pravda…” “The holier-than-thou hypocrisy of big media companies who lay claim to the truth, but publish only enough to sugarcoat the lie, is why the public no longer respects them,” he continued. Many believe the cloud over Musk’s head took shape during a May 2 analyst earnings call. “Boring, bonehead questions are not cool,” he said in response to a question about Tesla’s projected capital expenditures. “These questions are so dry. They’re killing me.”
BUENOS AIRES—U.S. Treasury Secretary Steven Mnuchin said he “wouldn’t minimize” the possibility that the U.S. will impose tariffs on all $500 billion worth of goods that the U.S. imports from China, amplifying a threat President Donald Trump made in a television interview earlier in the week. Mr. Mnuchin was speaking ahead of a meeting among G-20 finance ministers and central bankers here.
For the second day in a row, President Trump on Friday ripped the Federal Reserve for hiking interest rates — continuing an aggressive assault on the central bank, which is normally off limits from presidential attacks. “China, the European Union and others have been manipulating their currencies and interest rates lower, while the US is raising rates while the dollars [sic] gets stronger and stronger with each passing day — taking away our big competitive edge. As usual, not a level playing field,” the president tweeted. “The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The US should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates — Really?” he added in a follow-up tweet
Presidents historically have refrained from criticizing the Fed, which is supposedly free from political interference.
The central bank’s job is to keep prices stable, including raising interest rates to prevent the economy from overheating and inflation from rising. But Trump launched his attack first on Thursday during an interview with CNBC and continued on Friday on Twitter. But current and former Fed officials didn’t sound overly concerned about the commander-in-chief’s perspective. “The [Fed’s policy] committee has a mandate to keep inflation low and stable and obtain maximum employment for the US economy, so people can comment, including the president and other politicians, but it’s up to the committee to try to take the best action we can to achieve those objectives,” St. Louis Federal Reserve Bank President James Bullard said Friday.
Ex-Dallas Fed President Richard Fisher told CNBC that Trump was off course in his criticism of the Fed, which is headed by Trump appointee Jerome Powell.
“One of the hallmarks of our great American economy is preserving the independence of the Federal Reserve. No president should interfere with the workings of the Fed,” Fisher said. “Were I Chairman Powell, I would ignore the president and do my job and I am confident he will do just that.” The economy has continued to grow since Trump took office, with unemployment rates down, growth rising and the stock market up — though it closed down about 135 points on Thursday. The Fed has hiked interest rates twice this year and could jack the rate up twice more before year Trump told CNBC the hikes could damage America’s ongoing economic recovery from the Great Recession. “I’m not thrilled. Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time I’m letting them do what they feel is best,” Trump said. “Now I’m just saying the same thing that I would have said as a private citizen,” he said, asserting that he didn’t care about precedent. “So somebody would say, ‘Oh, maybe you shouldn’t say that as president.’ I couldn’t care less what they say, because my views haven’t changed. I don’t like all of this work that we’re putting into the economy and then I see rates going up,” he said.
NEW YORK (Reuters) – The U.S. dollar weakened on Friday against key world currencies as President Donald Trump complained again about its strength, while U.S. and European stock markets were tepid amid fresh tariff talk and another round of corporate earnings. U.S. government bond yields rose as Trump repeated his criticism a day earlier of the Federal Reserve’s policy on raising interest rates, saying it takes away from the United States’ “big competitive edge.” He also lamented the strength of the dollar and accused the European Union and China of manipulating their currencies. The dollar was on pace for its biggest single-session drop in three weeks against a basket of six major currencies, stalling a rally that had driven the greenback to a year high. “The dollar is an important issue today especially because we have been on a rise for quite a long time,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas In the latest trade salvo, Trump said he was ready to impose tariffs on all $500 billion of imported goods from China. “The reason we are not up more is the push and pull that has been the case for the past two months,” said Walter Todd, chief investment officer at Greenwood Capital in Greenwood, South Carolina. “That is between what is clearly a very good earnings and economic backdrop in the U.S. contrasted with the risk that trade continues to be a problem.”
WASHINGTON (Reuters) – U.S. President Donald Trump on Friday said he was ready to impose tariffs on all $500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets. “We’re down a tremendous amount,” Trump said in an interview about trade imbalances with China on CNBC television broadcast on Friday. “I’m ready to go to 500.” His comments worried investors already grappling with the impact of a strengthening U.S. dollar on corporate results, and key stock indexes on Wall Street dropped at the open on Friday. The U.S. dollar fell against major currencies on Friday on Trumps threat to impose more import tariffs and his repetition of complaints about rising interest rates and the strength of the U.S. dollar. The dollar index .DXY, a measure of its value against a basket of six major currencies, was on track to post its largest one-day loss in three weeks. Against the yen, the dollar was on pace for its worst daily fall in two months. A top Federal Reserve official, meanwhile, warned the trade war could hurt the U.S. economy. Around $505 billion of Chinese goods were imported to the U.S. in 2017, leading to a trade deficit of nearly $376 billion, U.S. government data shows. Chinese imports from the U.S. totaled $205 billion in the first five months of 2018, with the deficit reaching $152 billion. Trump is taking a more aggressive, protectionist posture on trade than his recent predecessors, sparking retaliatory measures from other countries. Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports. China promptly levied taxes on the same value of U.S. products. When asked about the stock market possibly falling if the United States imposes duties on such a large amount of goods, Trump told CNBC: “If it does, it does. Look, I’m not doing this for politics.” Still, new tariffs could help Trump’s Republican party going into November’s congressional elections. More than 70 percent of Republican and Republican-leaning U.S. adults believe increased tariffs between the United States and its trading partners will be good for the country, according to a Pew Research Center survey released late Thursday.
However, most economists warn that the imposition of import tariffs could disrupt global manufacturing supply chains, raise input costs and raise prices for consumers, leading to slower economic growth.
After the interview, Trump reiterated criticism of the Federal Reserve’s planned interest-rate hikes, posting on Twitter that the tightening policy would diminish any U.S. trade advantage and exacerbate losses from “BAD trade deals.”
St. Louis Federal Reserve Bank James Bullard said on Friday the Fed would remain unaffected by Trump’s comments on monetary policy and expressed concerns about rising tariffs.
“The escalating trade war, if it goes badly, could be a risk for the U.S. economy,” Bullard said, adding he understands the policy’s objective. “But it could be that all we end up with is a lot of tariffs globally and a lot of other types of protectionism globally.”
“We have no knowledge of any of this.”
The New York Times on Friday broke bombshell news that in September 2016, President Trump’s longtime personal lawyer, Michael Cohen, secretly recorded a conversation with Trump “in which they discussed payments to a former Playboy model [Karen McDougal] who said she had an affair with Mr. Trump, according to lawyers and others familiar with the recording.” Shortly afterward, a follow-up report from The Washington Post added more details about the content of this discussion. Citing a source “familiar with the recording,” the Post reported that Cohen and Trump discussed purchasing the rights to McDougal’s story of her alleged affair from American Media Inc (AMI). AMI is the parent company of the National Enquirer. AMI’s CEO, David Pecker, describes himself as a close friend of Trump. Just days before the 2016 election, The Wall Street Journal broke news that AMI paid McDougal for the rights to her story in August 2016, the month before Cohen’s recorded conversation with Trump. Despite purchasing the rights, the Enquirer never published anything about McDougal’s alleged affair with Trump — a technique known in the tabloid world as “catch and kill.”
Trump’s lawyer, Rudy Giuliani, released a statement to the Post on Friday suggesting the president’s legal team will try to explain away the Cohen recording as evidence Trump didn’t know about AMI’s payment to McDougal in advance. “Nothing in that conversation suggests that he had any knowledge of [the AMI payment] in advance,” Giuliani said. “In the big scheme of things, it’s powerful exculpatory evidence.”
A majority of Americans disapprove of President Donald Trump’s handling of his meeting with Russian President Vladimir Putin earlier this week, according to the results of a CBS News poll released on Thursday. Fifty-five percent of Americans said they disapprove of the way Trump handled the recent summit compared to just 32 percent that approve. Another 14 percent said they don’t know or did not answer. The poll showed a significant partisan divide on the issue, however, as 68 percent of Republicans approve of Trump’s handling of the meeting and 83 percent of Democrats disapprove. A majority of independents also disapprove. The release of the poll results come as Trump has drawn considerable criticism for his performance in a press conference with Putin during which he appeared to side with the Russian president over the U.S. intelligence community on the issue of Russian meddling in the 2016 election. Trump has subsequently sought to clarify his remarks, stating he accepts the intelligence community’s conclusion that Russia meddled in the election. The poll found that the vast majority of Americans believe the U.S. intelligence community’s assessments that Russia interfered in the election, although Republicans are somewhat skeptical. While 70 percent of all Americans, including 89 percent of Democrats, believe the intelligence assessments, Republicans are divided 51 percent to 42 percent. Republicans are also less likely to be concerned Russian may try to interfere in the upcoming midterm elections, with 38 percent saying they are “very” or “somewhat concerned” compared to 61 percent of all Americans. The survey of 1,007 adults was conducted on behalf of CBS News by SSRS on July 17th and 18th and has a margin of error of plus or minus 4 percentage points.