Financial sources feeds
Republicans were unable to resolve existing differences about the healthcare bill after a Wednesday late-night meeting which ended with no deal, despite President Donald Trump’s demands that they keep trying. Party members also met with Health and Human Services Secretary Tom Price behind closed doors on Wednesday night to try to reach an agreement on a plan to undo former Democratic President Barack Obama's signature legislation, popularly known as Obamacare, according to Reuters.
The meetings were part of an abrupt shift in strategy by Trump, who is threatening to keep lawmakers in Washington during their August recess if they don’t reach an agreement on health care after the CBO said a straight repeal of Obamacare would increase the number of uninsured by 32 million by 2026, while doubling insurance premiums in 10 years (it was unclear how much higher premiums would rise if Obamacare remains). Additionally, the CBO predicts that the bill would increase insurance premiums, with the average premium increasing by about 25% in 2018 alone. Previously, Trump said he was ready to “let Obamacare fail” and then work with Democrats on a new system after the old one collapses.
Earlier, Trump had gathered 49 Republican senators for a White House lunch to try to smooth over growing dissent from a handful of the party's conservatives and moderates. He ended up castigating them for failing to agree on how to dismantle Obamacare. However, according to Reuters, conservative and moderate lawmakers are nowhere near a compromise on how to replace Obamacare.
"We still have some issues that divide us," said Senator Ted Cruz, a conservative who has proposed letting insurers offer cheaper bare-bones plans that do not comply with Obamacare regulations.
Republicans attending the late meeting sent their staff away to talk frankly with reporters. Senator John Kennedy said everyone was negotiating in good faith but he added he did not know if they would reach agreement. Almost all the other senators rushed off after the meeting without comment. Sen. John McCain, who was recently diagnosed with an aggressive brain tumor, was of course absent, adding to Trump's challenges as he needs every healthcare vote he can get.
“As it was getting underway, the nearly two dozen Republican senators were shaken by news that their colleague, veteran Senator John McCain, had been diagnosed with brain cancer.
McCain's absence from the Senate makes the job of passing a healthcare bill more difficult because leaders need every Republican vote they can get.”
Democrats were swift to highlight the CBO's assessment, while Republicans remained silent.
"President Trump and Republicans have repeatedly promised to lower premiums and increase coverage, yet each proposal they offer would do the opposite," Senate Democratic leader Charles Schumer said in a statement.
Insurers and hospitals have lobbied against a repeal, saying the limbo would increase uncertainty and their costs.
"CBO projects half the country would have no insurers in the individual market by 2020 under the new repeal bill. That's a true death spiral," tweeted Larry Levitt, vice president at the Kaiser Family Foundation, a healthcare research group.
As discussed on Monday, moderate Republican Senators Susan Collins, Lisa Murkowski and Shelley Moore Capito said they oppose McConnell's plan for a repeal that would take effect in two years, thus dooming the idea. All three attended the lunch with Trump. With Democrats united in opposition to repeal, McConnell can only lose two votes from the Republicans' 52-48 majority in the 100-seat Senate to pass the legislation.
Party fractures also emerged in the House of Representatives. The chamber passed a plan to repeal and replace Obamacare in May, but on Wednesday, the House Freedom Caucus, the Republican Party's conservative wing, filed a petition to vote on a straight repeal.
"The House passed an Obamacare repeal-and-replace bill we are proud of and we hope the Senate will take similar action," said House Speaker Paul Ryan's spokeswoman, AshLee Strong,
Meanwhile, opponents of repeal protested throughout Senate buildings on Wednesday afternoon, leading to 155 arrests, police said. Demonstrators returned in the evening to yell as senators arrived for the meeting. That may not be necessary: the Trump administration is running out of options - it can't gather the votes for straight repeal, and every new proposal is either eviscerated by the conservatives, or the moderates. Unless Republicans can devise the mother of all compromise bills, it's going to be a very boring August.
While nobody was expecting much from the ECB's policy statement this morning, with all eyes on Draghi's press conference in 45 minutes, judging by the disappointed market reaction to what were largely canned remarks by the ECB which sent the EURUSD in kneejerk reaction lower, positioning is indeed stretched and unless Draghi comes out with hawkish bazookas blazing, the EURUSD may slide bigly.
Back to the ECB's decision, it announced that it kept both its rates and QE unchanged, with QE expected to run at €60BN per month until end of December or beyond if needed, “and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.” The ECB said it was also ready to extend QE “in terms of size and/or duration” if economic outlook worsens or financial conditions “become inconsistent with further progress towards a sustained adjustment in the path of inflation.”
On rates, the central bank expects these to stay at present levels “well past” QE horizon
- Main refinancing rate unchanged at 0.00%
- Deposit facility rate unchanged at -0.40%
- Marginal lending rate unchanged at 0.25%
Full statement below:
At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.
Regarding non-standard monetary policy measures, the Governing Council confirms that the net asset purchases, at the current monthly pace of €60 billion, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The net purchases are made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase programme. If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration.
The market's kneejerk reaction: dovish statement, with EURUSD sliding to session lows and 10Y bund yields tumbling.
So ahead of Draghi's press conference, here are two cheat sheats on what to expect from his remarks:
And from Citi:
- Bitcoin volatility shows not currency or safe haven but speculation
- Volatility still very high in bitcoin and crypto currencies (see charts)
- Bitcoin fell 25% over weekend; Recent high of $3,000 fell to below $1,900
- Bitcoin least volatile of cryptos, around 75% annualised volatility
- Gold much more stable at just 10% annualised volatility
- Bitcoin volatility against USD about 5-7 times vol of traditional forex trading
- Cryptos remain subject to huge speculation with little fundamental analysis
- Despite major differences many crypto currencies correlated, mimic one another
- Extreme hype - bitcoin expert bets will eat own body part on national television
- Millennials can punt on bitcoin, should also own gold and silver for long term
- Cryptos mere 'babies' when compared to time tested gold and silver
Editor: Mark O'Byrne
Crypto volatility and hype shows immaturity remains
The joy about working in precious metals is that for part of the weekend you can switch off.
There is a precious time when markets are closed and you don’t have to worry about market movements and what might be happening. You check back in on Sunday afternoon/evening and can delight in the markets starting to wake up for the week ahead. This isn’t the case in cryptocurrencies.
This weekend crypto-currency market participants got a wake-up call as to what 24/7/365 market trading really means. They watched the price of bitcoin plummet around 10% on Sunday morning (EST) alone. This contributed to bitcoin's overall fall of 25% since last Thursday and into the weekend. Other crypto currencies fell by more.
The volatility is so bad that if you are one of the few with a bitcoin app that allows you to actually spend your bitcoin then you might have found yourself paying for a brunch that was a hell of a lot more expensive than when you originally sat down to order it. You then might have noticed as you left the cafe that the currency was in full recovery mode and that brunch needn’t have been so expensive after all.
Just over one month ago bitcoin was flirting with $3,000, appearing on the front pages of financial magazines and Google saw record searches for ‘Bitcoin.’ On Sunday’s crash the price reached $1,863 but as I write this early Thursday morning (BST) it’s at $2,351.
What is this volatility all about and how can cryptocurrency proponents claim that this new money will change the world when its price behaviour can barely manage to guarantee we’ll be able to afford breakfast?
It seems the market cannot decide if this is a store of value or just of little value?
Volatility - what does it mean and does it matter?
Bitcoin remains the least volatile of the cryptocurrencies mainly thanks to its time-served, adoption rates and that it has the highest liquidity. But, we are still talking about a currency which was $600 around a year ago and is now close to $2,400. Even diehard bitcoin fans have to admit that we are in a speculative boom phase. This applies to all cryptocurrencies, not just bitcoin.
If the last two decades have taught us anything about investments it is that speculative boom phases in technology are ones which should be approached with caution. No one knows what the speculation phase says about future valuations or how the product (and its market) will mature.
Currently we are in a speculative phase which will soon have to either sit down and shut-up or stand-up and show how this hyped market is going to move from proof-of-concept, significant investments and use-case scenarios through to in-use case scenarios and people actually using cryptocurrencies.
At the moment, the majority of traders are either disinclined to learn more about what the future of these cryptos could be or they are just profit-seeking. This created spikes and huge volatility.
All cryptocurrencies are volatile but the speculation which creates the volatility is not only profit-seeking but also quite uninformed. You can tell this in the way that the three major/most popular currencies track one another.
Bitcoin, Ripple and Ethereum are significantly different cryptocurrencies, yet they have closely tracked each other recently. Ripple (unlike Ethereum and bitcoin) is largely a privately held currency focused on the interbank transfer market.
Ethereum is basically a ‘smart’ system which is robust and already widely adopted for complex data-sharing systems. It has been embraced by the banks. Indeed, thirty big banks, tech giants, and other corporations—including J.P. Morgan Chase, Microsoft, and Intel—are uniting to build business-ready versions of the software behind Ethereum and it's decentralised computing network based on digital currency.
And finally, bitcoin which whilst it might be the first one and therefore has high adoption rates and greater stability, it is also the one with the least features. More recently bitcoin has been traced by Dash and XMR, also different in offering to bitcoin.
The fact that these vastly different cryptocurrencies are mirroring each other suggests that we are still in the phase of the market where the majority of traders lump as ‘cryptocurrencies’ and are failing to see the difference. And, even if they are seeing the difference they are perhaps hedging their bets as to which one will ‘make it’.
They could all ‘make it’ given their different capabilities and applications. At the same time, there is likely to be massive "creative destruction" in this space and there is the risk of failure - especially in the altcoin space.
Of course, it is likely that bitcoin’s volatility will slow over time. Currently its annualized volatility is 75 percent (gold’s is 10%) but that could improve when one considers gold’s was as high as 90% in the 1970s as the US abandoned the gold standard and stagflation badly impacted western economies an investors.
Therefore, we should not dismiss cryptos but we should approach them with caution and be careful not to declare it as the new ‘gold standard’ of investments.
Are digital currencies replacing gold?
One of the longest surviving myths about bitcoin is that it is competing with gold. Since bitcoin once again caught the attention of the mainstream its competition with gold has proven to be quite the clickbait for those looking to offer comment on the cryptocurrency.
This week Fundstrat's Tom Lee dubbed bitcoin the ‘new gold’ (yawn) and claimed that ‘Cryptocurrencies are cannibalizing demand for gold.’ This may not appear to be the case when we look at recent gold demand figures in countries such as India, but will it impact long term?
Aswath Damodaran, professor of finance at the New York University Stern School of Business, told CNBC, that it may well do. He believes gold is going out of fashion thanks to the likes of bitcoin:
"Cryptocurrencies have taken the role of gold at least for younger investors because they don't trust paper currencies.”
But how can they trust bitcoins? Or any cryptocurrency for that matter? Damodaran believes they will trust them because they no longer trust paper currencies. The issue with paper fiat currencies (now digital fiat currencies) is that they have a history of failing and the fiat system we currently operate on is relatively new. So, why are bitcoins (or another digital cryptocurrency) suddenly going to save the day?
The World Gold Council’s John Reade, chief market strategist and head of research (and former managing partner at Paulson & Co.) recently spoke about how millennials need to look beyond the current performance of gold and instead to the long-term:
“Millennials are an interesting case study; they are going to be working and investing a long time so you need to think about more than just the short term ... Gold is a great diversifier for a portfolio but it is more than that. It is a source of returns that is commiserate with equities over the last 10, 20 years.”
It is vital millennials consider the performance of an asset over a long-period of time, as they are just starting to build their portfolios and need to prepare for the next 20, 30, 40 years or more.
Whilst bitcoin (and Ripple, Ethereum etc) may have some years behind them, they are mere 'babies' when compared to time tested gold and silver. Not to mention that the time they have accrued has only shown volatility, with investors taking one of the biggest punts of their lives.
Conclusion - we’re not down on bitcoin, just on hype
This isn’t to say that bitcoin etc have no future and are not worth allocating a very small amount of a portfolio to. Instead we return to the point of view we have long maintained - gold and bitcoin are complementary assets, not competing ones.
Cryptocurrencies are for real and some will evolve and survive and thrive. Which one, or which handful, are for keeps who knows. Only time will tell.
Where the price will go from here, we’re unsure and that’s no bad sign given the volatility.
We’re certainly not as confident as John McAfee who is so sure the price will hit $550,000 within three years that he has bet his own manhood on it. No matter what you think of bitcoin you have to agree that it will take a rally of monumental proportions to protect the the virility of Mr McAfee.
Like any new tech investment, investors should approach with caution. It’s no bad thing to take a punt on something you believe will bring long-term value and gains whilst insuring you have some financial insurance in the form of gold and silver as well.
This is how many investors should look at gold and bitcoin. Bitcoin is the child with great potential and it might help fund your retirement if you’re lucky, but you can’t guarantee it won’t go off the rails. So best make sure you’re still saving on your own and stocking up on some time-proven physical gold and silver.
News and Commentary
Gold Prices (LBMA AM)
20 Jul: USD 1,236.55, GBP 953.63 & EUR 1,075.06 per ounce
19 Jul: USD 1,239.85, GBP 950.84 & EUR 1,074.83 per ounce
18 Jul: USD 1,237.10, GBP 949.47 & EUR 1,071.82 per ounce
17 Jul: USD 1,229.85, GBP 940.71 & EUR 1,074.03 per ounce
14 Jul: USD 1,218.95, GBP 940.54 & EUR 1,067.92 per ounce
13 Jul: USD 1,221.40, GBP 944.51 & EUR 1,071.05 per ounce
12 Jul: USD 1,219.40, GBP 947.60 & EUR 1,064.29 per ounce
Silver Prices (LBMA)
20 Jul: USD 16.18, GBP 12.50 & EUR 14.07 per ounce
19 Jul: USD 16.23, GBP 12.44 & EUR 14.08 per ounce
18 Jul: USD 16.17, GBP 12.41 & EUR 13.99 per ounce
17 Jul: USD 16.07, GBP 12.30 & EUR 14.02 per ounce
14 Jul: USD 15.71, GBP 12.11 & EUR 13.76 per ounce
13 Jul: USD 15.95, GBP 12.34 & EUR 14.00 per ounce
12 Jul: USD 15.83, GBP 12.31 & EUR 13.82 per ounce
Recent Market Updates
- “Time To Position In Gold Is Right Now” says Jim Rickards
- Bloomberg Silver Price Survey – Median 12 Month Forecast Of $20
- “Bigger Systemic Risk” Now Than 2008 – Bank of England
- “Financial Crisis” Coming By End Of 2018 – Prepare Urgently
- Video – “Gold Should Probably Be $5000” – CME Chairman
- India Gold Imports Surge To 5 Year High – 220 Tons In May Alone
- “Silver’s Plunge Is Nearing Completion”
- China, Russia Alliance Deepens Against American Overstretch
- Silver Prices Bounce Higher After Futures Manipulated 7% Lower In Minute
- Precious Metals Are “Best Defence” Against Bail-ins In Economic Crisis
- Buy Gold Near $1,200 “As Insurance” – UBS Wealth
- UK House Prices ‘On Brink’ Of Massive 40% Collapse
- Gold Up 8% In First Half 2017; Builds On 8.5% Gain In 2016
"It is important to note that all portfolios under all conditions actually perform better with exposure to gold and silver" - David Morgan
In the short video above, David Morgan, the Silver Guru, speaks briefly about the importance of owning silver bullion coins and bars as financial insurance in an uncertain world. He speaks about GoldCore Secure Storage and how he recommends GoldCore's ultra secure allocated and segregated gold, silver, platinum and palladium bullion storage (Zurich, London, Singapore and Hong Kong) to his retail and high net worth clients.
- Futures flat as investors await earnings deluge (Reuters)
- Investors Brace for Clues on ECB’s Tapering Plans (WSJ)
- When Will the ECB Pull Its Trillions From the Markets? (BBG)
- Citing Recusal, Trump Says He Wouldn’t Have Hired Sessions (NYT)
- Trump Urges GOP to Seek Agreement on Health Measure (WSJ)
- The GOP Failed to Replace the ACA. Can Congress Fix What’s Wrong? (BBG)
- Senator McCain diagnosed with aggressive brain cancer (Reuters)
- Low Earners Are Making the Biggest Gains for the First Time in Years (WSJ)
- Russia says in talks with U.S. to create cyber security working group (Reuters)
- France Says ‘We Want Our Money Back’ as Brexit Talks Crawl On (BBG)
- After Mosul, Islamic State digs in for guerrilla warfare (Reuters)
- Here’s Why Yellen’s Fed Cares About America’s Opioid Epidemic (BBG)
- Deutsche Bank Preparing for Hard Brexit, CEO Cryan Tells Employees (BBG)
- Germany takes aim at Turkish tourism as rights row escalates (Reuters)
- S&P 500's Biggest Pension Plans Face $382 Billion Funding Gap (BBG)
- Any Greek market foray should be first step to full return: government spokesman (Reuters)
- Loophole Closed: Hedge-Fund Managers Prepare Huge Tax Checks (WSJ)
- Israel faces mounting Palestinian anger over holy site metal detectors (Reuters)
Overnight Media Digest
- U.S. President Trump issued a rallying cry for Republican senators to come together behind their struggling health bill, telling them they were close to a deal and shouldn't leave town for their summer break without one. on.wsj.com/2uajsyI
- Republican Senator John McCain, who has been out this week recovering from surgery, has been diagnosed with a type of brain cancer known as a glioblastoma, his office disclosed on Wednesday. on.wsj.com/2uaiLp7
- Three top Trump campaign aides - Jared Kushner, the president's son-in-law and senior adviser, former campaign chairman Paul Manafort and Donald Trump Jr - are expected to speak with Senate committees next week as part of the congressional inquiry into Russian meddling in the 2016 election. on.wsj.com/2uaBwce
- The U.S. Supreme Court reinstated the Trump administration's plans to keep many refugees from entering the U.S., but blocked the White House from sweeping travel restrictions on extended families of American residents, a second compromise action by the justices in the hot-button case. on.wsj.com/2uatK1N
- Univision Communications Inc, the owner of the dominant Spanish-language broadcaster in the U.S., has been fielding interest from potential bidders after the media company's initial public offering was delayed, according to people familiar with the matter. on.wsj.com/2u9Y9xo
- Jana Partners, the activist hedge fund whose push to shake-up Whole Foods Market helped prompt Amazon.com to buy the natural grocer, has sold its stake in the company. on.wsj.com/2u9PX01
- Charter carrier Dynamic International Airways LLC, which offers charter flights to regional cities in China, filed for bankruptcy protection Wednesday to stabilize its business. on.wsj.com/2uadrlR
Canadian utility Hydro One Ltd said on Wednesday that it has agreed to buy U.S. energy company Avista Corp for $5.3 billion in an all-cash transaction.
Theresa May called on the BBC to pay men and women equally after the corporation published the names of its 96 stars paid more than 150,000 pounds a year, exposing a wide gap between male and female broadcasters.
The chief executive of Akzo Nobel NV, the Dutch paint maker, has resigned with immediate effect on health grounds just weeks after fending off a 27-billion-euro takeover attempt.
A private equity consortium has made a second attempt at buying Stada, Germany's largest maker of generic drugs, with an improved 4.1 billion euros offer.
- Facebook is working on a new tool that could help drive subscriptions to news organizations that publish articles directly on the online service. The tool would be added to Facebook's Instant Articles product, which allows publishers to post news articles that can be read within Facebook. nyti.ms/2tJ6eXK
- Jana Partners disclosed in a regulatory filing on Wednesday that it sold off its roughly 8.2 percent stake in Whole Foods in June. Jana got rid of the bulk of its stake on Tuesday. nyti.ms/2tJ1JfU
- Banking regulators are reviewing hundreds of millions of dollars in loans made to Donald Trump's businesses through Deutsche Bank's private wealth management unit, which caters to an ultrarich clients. nyti.ms/2tIZOrU
- Citigroup is taking a step toward reducing its dependence on London and will open a second trading hub in Frankfurt. The bank has had an operation in Frankfurt for decades, but it would expand its business there with this latest decision. nyti.ms/2tIZWaS
The Globe and Mail
** Kinder Morgan Canada Ltd plans to start construction on its C$7.4 billion Trans Mountain oil pipeline expansion on time despite unceasing opposition. tgam.ca/2uF8vrm
** Oaktree Capital Management has filed complaints with securities regulators in Ontario and Quebec to address some of its concerns about Rayonier Advanced Materials Inc's proposed takeover of Tembec Inc, saying there are disturbing questions about the role of Fairfax Financial Holdings Ltd in the deal. tgam.ca/2vF5Hb3
** Finance Minister Bill Morneau released proposals this week to close loopholes that are increasingly in use by high-income Canadians to lower their tax bills through the use of private corporations. tgam.ca/2tKcpea
** Ontario-based Hydro One Ltd, has struck a deal to purchase Avista Corp, a regulated electric and gas utilities holding company that has operations in U.S. northeast and Alaska, for C$6.7 billion. bit.ly/2uBXPdt
** According to data from Statistics Canada, from 2008 to 2016 electricity prices in Ontario grew by 71 per cent compared to 34 per cent average growth across Canada. This means Ontario's electricity price increases were more than double the national average. bit.ly/2tKdG58
GlaxoSmithKline Plc is selling its Horlicks business in Britain and has abandoned a planned 350 million pounds ($455.88 million) investment in Cumbria as part of a wide-ranging restructuring of its business. bit.ly/2gLCskb
The water industry has been plunged into uncertainty after the head of Ofwat announced that she is leaving the regulator to join BT Group Plc. In an announcement that shocked an industry that is just starting its next cycle of negotiations on water charges, Cathryn Ross said that she would depart at the end of the year. bit.ly/2gLMJgn
TopShop is getting its first male boss in 18 years with the appointment of Burberry Group Plc's executive Paul Price. bit.ly/2gLONER
U.S. investment bank Morgan Stanley has chosen Frankfurt as the site of its post-Brexit EU hub in a move that could put 200 jobs in the City of London under threat. bit.ly/2gLOw4T
German regulators will be assessing the suitability of Deutsche Boerse AG's management team in light of insider trading allegations made against the German exchange's chief executive. bit.ly/2gLFpBj
Activist investor Elliott Management has slammed BHP Billiton's plans to develop a giant potash mine in Canada, warning it could be as "disastrous" as its foray into U.S. shale. bit.ly/2gLNIx5
Mercedes-Benz is recalling hundreds of thousands of cars in the UK for a software update to reduce their nitrogen oxide (NOx) emissions. bit.ly/2gLCMiT
Tony Hayward, the former BP Plc chief executive, is to sever his ties to a Russian-backed venture which has struggled to gain British and American government approval to buy oil and gas assets. bit.ly/2gLIbq8
Millions of workers will have to work an extra year before retiring after the Government announced plans to extend the retirement age to 68. ind.pn/2gLHdKl
The Kremlin responded to media reports that President Donald Trump held a second “secret” meeting with Vladimir Putin at the G20 summit, saying it has prompted “astonishment” in Moscow and displays a “lack of understanding” while confirming the two did chat informally over dinner. "The use of such notion as "undisclosed" or "secret" meeting causes absolute astonishment and lack of understanding" Kremlin spokesman Dmitry Peskov told Russian state TV, Channel One.
Peskov said there was only one meeting between the two leaders on the sidelines of the summit and it was officially announced; and that Putin and Trump “repeatedly exchanged their opinions during the [summit].”
When asked about the nature of the G20 dinner chat, Kremlin spokesman Dmitry Peskov told a conference call with reporters: "There was no secret second meeting. The two men had chatted informally over dinner", said Peskov, and had discussed adoption. Putin’s spokesman also said “there were no undisclosed or secret meeting” adding that such claims are “absurd.” Peskov also said that the existence of such reports in the MSM demonstrates the “unhealthy attitude” of the US establishment towards Russia.
“Presenting something like this as a meeting that could be kept secret from anybody is a manifestation of… schizophrenia,” he said.
His words were echoed by the Russian Deputy Foreign Minister Sergey Ryabkov, who said any meeting between any US and Russian official is immediately presented in the US media as something “criminal.” "It appears that the very fact of a contact [of any US official] with the Russian officials turns into a sort of a criminal [act],” Ryabkov told Channel One’s Sixty Minutes program.
"Every leader has the right to communicate with whoever he or she wants in a way he or she see fit.” Ryabkov added that “there are dozens of various contacts [between the world leaders] that are not being recorded.”
The Russian also suggested that the whole story about the alleged ‘secret’ meeting is nothing but an attempt to tarnish the reputation of the US president.
“Those, who raise an issue in such a way, are working on undermining the authority of President Trump and creating additional difficulties for him,” Ryabkov said.
Earlier Wednesday, Trump also lashed out at what he called “sick” media reports about his alleged “secret” meeting with Putin at a state dinner during the G20 summit in Germany. “The Fake News is becoming more and more dishonest! Even a dinner arranged for top 20 leaders in Germany is made to look sinister!” he said in one of his Tweets.
As a reminder, the first report about the alleged "secret meeting" was provided by Eurasia's Ian Bremmer, who has been openly critical of Trump on twitter over the past year. In a newsletter to group clients, Bremmer reportedly said the meeting began "halfway" into the dinner and lasted "roughly an hour." While it is unclear which "anonymous" world leader source he relied on, Bremmer said there was no one else within earshot at the time, meaning that the conversation must have been private. Predictably, Bremmer’s report prompted media speculation on the content of the ‘private’ Trump-Putin dinner chat.
Ovenright, Trump told the New York Times that the informal conversation he had with Putin was mostly about "pleasantries."
The relentless risk levitation continued overnight, as global shares extended their stretch of consecutive record highs on Thursday for a 10th day after a cautious BOJ lifted Asian stocks to a decade high with a dovish announcement that offered no surprises, while pushing back Kuroda's 2% inflation target to 2020, the 6th consecutive delay. With all eyes on the ECB in just over an hour, US equity futures are in the green, following solid gains around the globe. European stocks extended their biggest gain in a week while Asian equities maintained their rally. Microsoft, Blackstone, Philip Morris and Ebay are among companies reporting earnings. Initial jobless claims data due.
Traders - so mostly algos - are riding a global risk "high" in stocks as Asia's and then Europe's early 0.4 percent gains ensured MSCI's 47-country All World index was up for a 10th straight session. This is the longest winning streak in global stocks since February 2015 and shows little sign of fatigue even as bond yields edged modestly higher again. The Stoxx Europe 600 Index rose 0.3 percent as of 9:53 a.m. in London. The U.K.’s FTSE 100 Index rose 0.5 percent to near the highest in a month. The MSCI Emerging Market Index fell 0.1 percent, the first retreat in almost two weeks. The VIX index closed below 10 for a record fifth consecutive day. Appropriately, Bloomberg dubbed the move a "no-vol" nirvana, in which stocks and bonds keep rallying as volatility evaporates.
The overnight focus was on the Japanese central bank's decision to push back its ambitious inflation target again, sending the yean weaker to 112.4 per dollar. Attention now shifts to whether ECB head Mario Draghi will give a hint later that it plans to wind down its 60 billion-euro-a-month stimulus program. As previewed earlier, the most likely outcome is that Draghi will follow in Kuroda's footsteps and not rock the boat. The risk, if any, is that Draghi does not come out sounding hawkish enough, which could prompt a big drop in the Euro which has been soaring in recent weeks on expectations the ECB will begin tightening policy soon.
"They are going to try and not upset markets," said Nick Gartside, international Chief Investment Officer of fixed income at JP Morgan Asset Management. "I think the real action is going to be the September meeting. That is when we probably get a little bit of news on tapering."
A cheat sheet of what to expect from the ECB is below.
The euro is up almost 10% so far this year but and was a shade lower at $1.1507 ahead of Draghi's post-meeting news conference, having hit a 14-month high of $1.1583 on Tuesday.
"It may be as we approach "1.20, which is realistic let's be honest, that it generates a little more alarm for the ECB," Gartside added.
European bourses followed markets from Tokyo to Sydney higher, and the MSCI All-Country World Index traded at a record high. With the Bank of Japan delaying the time-frame for reaching its inflation target -- a sign its stimulus is in place for a while to come, attention turns to the European Central Bank’s meeting for clues on policy paths. Oil held onto gains as stockpiles decreased. The U.S. dollar strengthened for a second day after hitting a 10-month low Tuesday, though it was still down for the week.
After the BOJ failed to inspire any volatility, traders are now left with Mario Draghi who speaks at 8:30am ET. Like the BOJ, the ECB is forecast to keep policy on hold Thursday. A report that the bank has been examining options for asset purchases does add to speculation that Mario Draghi will concede time is approaching to adjust the bond-buying program as the economic recovery expands.
In global macro, the Yen was weaker after the BOJ failed to deliver even a trace of hawkishness, sending the Nikkei 0.6% higher. The Aussie dollar slipped on profit taking after initially nearing 80 cents on solid jobs data; The Yuan weakened against the dollar for a second day after the PBOC added a net 60 billion yuan in repos on top of reported liquidity injection via banks on Wednesday. Dalian iron ore futures flat.
Elsewhere in currencies, the euro fell 0.1 percent to $1.1506, still close to a 14 month high. The British pound fell 0.1 percent to $1.3005, the weakest in a week. The Bloomberg Dollar Spot Index climbed 0.3 percent, the biggest increase in more than two weeks. The Japanese yen sank 0.3 percent to 112.34 per dollar, the largest decrease in almost two weeks.
In commodities, gold sank 0.3 percent to $1,238.03 an ounce, the largest decrease in almost two weeks. WTI crude fell less than 0.05% to $47.11 a barrel. The Bloomberg Commodity Index decreased 0.1%, the largest fall in a week.
In rates, the yield on 10-year Treasuries fell less than one basis point to 2.27 percent. Germany’s 10-year yield rose one basis point to 0.55 percent, the first advance in a week. Britain’s 10-year yield rose two basis points to 1.212 percent. Southern European government bonds underperformed better-rated peers having closed the gap with Germany to the tightest level in months in recent days. Italian, Portuguese and Spanish government bonds are seen as the biggest beneficiaries of the central bank's ultra-loose monetary policy stance of the past few years, and some worry that the market is not fully reflecting the increased risk these countries now face if the ECB moves towards tighter policy. "We have seen very little impact on peripheral spreads since Sintra but this could change very rapidly in a short period of time if the messaging is a bit too hawkish today," said DZ Bank strategist Daniel Lenz.
- S&P 500 futures up 0.1% to 2,473.50
- STOXX Europe 600 up 0.4% to 386.88
- MXAP up 0.01% to 158.97
- MXAPJ down 0.04% to 524.69
- Nikkei up 0.6% to 20,144.59
- Topix up 0.7% to 1,633.01
- Hang Seng Index up 0.3% to 26,740.21
- Shanghai Composite up 0.4% to 3,244.87
- Sensex down 0.2% to 31,881.42
- Australia S&P/ASX 200 up 0.5% to 5,761.45
- Kospi up 0.5% to 2,441.84
- German 10Y yield rose 0.6 bps to 0.548%
- Euro down 0.1% to 1.1504 per US$
- Italian 10Y yield unchanged at 1.899%
- Spanish 10Y yield rose 1.2 bps to 1.571%
- Brent Futures down 0.1% to $49.64/bbl
- Gold spot down 0.3% to $1,238.00
- U.S. Dollar Index up 0.2% to 94.98
- BOJ keeps stimulus unchanged; pushes back 2% inflation goal timing to fiscal 2019; raises assessment of economy to ’expanding moderately’
- Draghi Moves On From Sintra as ECB Refines Stimulus Message
- BofA Said to Halt Transactions With HNA Amid Debt Concerns
- McCain Diagnosed With Brain Cancer After Procedure for Clot
- South Africa Regulator Seeks Further Information on DuPont, Dow
- Goldman Partners Mark End of Era as Stock Holding Drops Below 5%
- Blackstone Is Said to Raise $3b in First Asia PE Fund: Reuters
- Japan June trade balance 439.9b yen vs 488.0b yen estimate
- Australia June jobs 14k vs 15k est; unemployment rate 5.6% vs 5.6% est; full-time jobs 62k; participation rate 65.0% vs 54.9% est
- China, U.S. agree on cooperation to cut trade deficit: Ministry
- PBOC said to have injected liquidity via some banks on Wednesday
- German June tax revenue down 6.5% on repayments, ’lively’ 2Q upswing
- Deutsche Bank Expects DOJ Subpoenas Over Russia Probe: Guardian
Asia equity markets carried over the momentum from the US, where all three majors closed in the green with the energy sector outperforming on the back of a larger than expected draw in DoE crude oil inventories. ASX 200 (+0.6%) outperformed on the back of the upside seen in oil markets, as well as a strong performance from Financial names, while Nikkei 225 (+0.6%) benefitted from a softening JPY, although the currency breaking above the 112.00 handle. Elsewhere, Shanghai Comp. (+0.25%) and Hang Seng (+0.2%) conformed to the upbeat tone, with the former lagged following a lacklustre CNY 60b1n liquidity injection by the PBoC. Finally, 10yr JGBs traded lower amid the global risk-on conditions, with underperformance in the long end leading to steepening of the yield curve.
- Top Asian News
- BOJ Keeps Easing Unchanged as It Pushes Back Inflation Goal
- Steel Rebar in Shanghai Tanks 5% From 2013 High as Buyers Wary
- Kuroda: People Won’t Lose Trust in BOJ Because Forecasts Missed
- Aussie Yield Retreats From Job-Data High Ahead of RBA Speech
- Global Steelmaker Recovery on Show as Posco’s Profit Jumps
- Yaskawa Electric Raises Forecasts After 1Q Profit Beat
- Foreign Insurers Are Said to Plan $2 Billion of Malaysia Deals
- Kuroda: Current Monetary Policy Is Sustainable, Flexible
European bourses trade in the green, as earnings continue to dictate play. A dovish BoJ has helped with the flow in equities, however full focus does remain on the ECB. 9/10 Stoxx 600 sectors trade in the green, with utilities in the red, evident of the risk on tone. The FTSE was also unfazed by the stela UK Retail Sales beat. Fixed Income markets do trade subdued however, with many arguing that the risk is to the downside for Gilts. Gilts were in focus as we approached the latest UK data, Retail Sales, beat on all accounts, however, could not spark any selling into Gilts, as Draghi approaches
Top European News
- France Says ‘We Want Our Money Back’ as Brexit Talks Wrap Up
- Danske Bank CFO Says Writebacks Can’t Continue in Normal Cycle
- London’s Super-Prime Housing Slump Spreads to Luxury Properties
- EasyJet Falls; ‘Good News, But Not Good Enough’: Analysts
- Sports Direct Ends Four-Year CFO Wait as Ashley Plugs Key Gap
- SAP Lifts Sales Outlook, Buying Back Stock on Cloud Growth
- Zooplus Drops; Kepler Says Weak 2Q, Investment Case Unchanged
In currencies, FX markets have been subdued since the open, as much of the volatility was seen from JPY and AUD overnight. European FX traders did await the UK Retail sales beating across the board, aiding cable in retaking the 1.30 handle. EUR/GBP saw a dip lower; however, closer attention will be on the ECB later this afternoon. GBP has not seen all bullish news this morning, with comments from Fox stating that the UK can still survive with no Brexit deal, once again intruding the possibility of a 'hard brexit.'
In commodities, precious metals trade lower, evident of the risk tone that has been seen in recent trade, as Gold, Silver and Platinum all trade in the red. Elsewhere, Oil trades subdued following the unexpected draw yesterday, yet has contained around yesterday's high, with WTI firmly above 47.00/bbl.
Looking at the day ahead, the ECB rate decision and Draghi press conference around lunchtime will be the key focus. In the US, initial jobless claims numbers (est: 245K) and the Philadelphia Fed Business survey will be out. US earnings seasons remains a focus, with Microsoft, eBay, Visa, American Airlines, Alliance Data systems, PPG Industries and Philip Morris schedule to report
US Event Calendar
- 8:30am: Initial Jobless Claims, est. 245,000, prior 247,000; Continuing Claims, est. 1.95m, prior 1.95m
- 8:30am: Philadelphia Fed Business Outlook, est. 23, prior 27.6
- 9:45am: Bloomberg Consumer Comfort, prior 47; Economic Expectations, prior 52
- 10am: Leading Index, est. 0.4%, prior 0.3%
DB"s Jim Reid concludes the overnight wrap
If you're a parent and got any advice for what to do when the "terrible twos" hit then I'd appreciate it. After being a wonderful mild mannered, mischievous little girl, 22-month old Maisie has suddenly over the last two weeks tried to stamp her independence. The good news is that she hasn't yet fully rebelled and found a wayward boyfriend, demanded her ears pierced or got a tattoo but in a short space of time has decided that she won't sit in her high chair for dinner, will run away when it's time to have her nappy changed (or teeth cleaned) and will go feral when taken up for her nightly bath. Bedtimes have also suddenly got more difficult with a lot of crying from nowhere. With only around 6 weeks until the birth of the twins I'm hoping this is just a phase!! So what's the only thing that calms her down... yes the TV. Bad parenting habits are beginning to creep in. I can now see how sometimes it easier to do the wrong thing and give in!
We'll all be glued to the TV this afternoon as today sees the last main scheduled macro event before the summer slow season well and truly kicks in. In saying that I'm sure I'm tempting fate but if Mr Draghi doesn't surprise it feels that after his press conference today (1.30pm BST) it may be relatively quiet on the macro front until the Jackson Hole Symposium on August 24th-26th. The Bank of England meeting in two weeks is surely less interesting post this week's inflation figure so all eyes on the ECB. The Fed rate decision next week could bring further details on the balance sheet discussion but is also unlikely to be a meeting with a big surprise. Within the ECB the battle is perhaps between Draghi and the rest of the
council as the President was certainly more hawkish in Sintra on June 27th than he was when he spoke for the committee at the last meeting on June 8th. This power balance will be judged by the strength of the signal at the press conference. According to our economists, the more that Draghi’s new “confidence, persistence, prudence” mantra makes it into the press statement, the more confident the market will be about the Council converging to Draghi’s more constructive view. DB expect the President to open the door to a September decision on QE without any pre-commitment.
With that in mind we thought it would be interesting to quickly recap how European assets have performed since Sintra. Unsurprisingly the most eyecatching are the moves in European govies. Front and centre is the move for Bunds where 10y yields have shot up 29.7bps to 0.540%. Similar maturity OATs are 20.4bps higher at 0.799% while Dutch yields are up 21.6bps to 0.661%. The range is a little wider in the periphery but the same theme applies. In Portugal yields are 13.3bps higher while Spain and Italy have seen moves of 18.7bps and 29.8bps, respectively. Meanwhile the Euro has rallied nearly 3% and recently broke through 1.150 versus the Dollar for the first time since May last year. In equity land the Stoxx 600 is down -0.83% in total return terms however this translates to a +2.13% gain when converted into Dollars given the strength of the Euro. The same applies for the DAX (-2.50% and +0.41%) while the FTSE MIB (+2.27% and +5.32%) has outperformed. Most notable however has been the moves for European Banks which have clearly benefited from the underlying rate move. The Stoxx 600 banks sector is +4.35% in Euro terms and +7.46% in USD terms.
So we’ll wait to see what today’s message brings. Before we get there though we’ve already had the outcome from one central bank meeting this morning, that being the BoJ. As expected, there were no changes to policy. The policy balance rate was held at -0.100% and 10y JGB yields will continue to be targeted at around 0.000%. Notably, while the BoJ has raised its assessment of the economy (noting that growth will continue above potential through fiscal 2018), the inflation outlook was revised lower. The BoJ has delayed its target for inflation reaching 2% to around fiscal 2019. The BoJ previously delayed its target for inflation back in November last year to fiscal 2018. Inflation forecasts for this year and next were also revised lower. The Yen (-0.10%) is a shade weaker post the headlines while JGBs are little changed.
Staying with Japan briefly, our economists have noted that the Abe government’s approval rating has dropped below 40% with a Jiji press survey putting his rating at 30%. Our team highlight that a rating in the 30s is viewed as a caution signal for an administration’s viability and a drop into the 20s could be terminal. The team hold the view however that there are no opposition parties with sufficient public backing to run a government. Nonetheless its one to keep an eye on. Elsewhere in Asia this morning, most equity markets have climbed with the Nikkei (+0.36%), Hang Seng (+0.20%), Shanghai Comp (+0.16%), Kospi (+0.08%) and ASX (+0.56%) all nudging higher.
Back to yesterday. Despite there being fairly minimal newsflow to feed off, it was on the whole a relatively positive day for risk assets. Another leg higher for Oil (WTI +1.55% to just over $47/bbl and matching the highs from earlier this month) as well as a better than expected earnings report from Morgan Stanley appeared to be enough to drive markets higher. The S&P 500 (+0.54%) finished up for the 10th time in the last 13 sessions with all sectors finishing a bit stronger. The recent rally and bounceback for tech stocks is certainly catching the eye though. The S&P 500 IT index last night surpassed its dotcom peak from 17 years ago to close at an all-time high. The Nasdaq (+0.64%) also turned in another record high and is now up 5% from the lows earlier this month. The Dow was up +0.31% with the underperformance driven by some disappointing IBM earnings, however the index did still close at a new record high.
At the same time the VIX, for the fifth day in a row, closed below 10 (at 9.79) which is the longest such run since data started getting collated in 1990. Meanwhile closer to home European equity markets firmed up with the Stoxx 600 closing +0.77% ahead of the ECB. In bond land 10y Treasury yields were just 1.1bps higher at 2.270% while Bunds 1.0bp lower.
Away from markets, developments in and around Washington continue to bubble away in the background. Last night the CBO announced that a repeal of Obamacare without replacement would result in 32 million more people being uninsured over 10 years, which is 10 million more than the previous Senate Republican bill. A vote next week is still being talked about with Republican senators supposedly scrambling behind the scenes to come to some form of consensus however it still feels like most have moved on to other policies. On that note, Politico ran an article last night suggesting that Trump is targeting a corporate tax rate ‘in the 20s’ which is being talked about as a more realistic goal for the administration after previously pledging in their campaign to slash the rate to 15%. So it will be interesting to see if there are any further stories on that front.
Staying with the US, the US / China trade talks got off to a slightly tense start yesterday, with US Commerce secretary Wilbur Ross noting the $309bn trade deficit as “…if this were just the natural product of free market forces, we could understand it, but it’s not…”. Shortly after, both the US and China cancelled their press conference scheduled for the end of the day, originally expected to discuss the outcomes of the trade negotiations.
Before we look at today’s calendar, we wrap up with other data releases from yesterday. In US, both the June housing starts and building permits data were slightly better than expectations. After three consecutive months of decline, US housing starts rebounded to be up 2.1% yoy to 1,215k. Permits were also stronger, rising 5.1% yoy to 1,254k. The MBA’s new purchase mortgage applications index rose 1.1% last week and was up 6.0% yoy.
Looking at the day ahead now, in UK, the June retail sales figures are due, with YoY (ex-auto and fuel) expected to be 2.5% as per Bloomberg consensus. The ECB rate decision and Draghi press conference around lunchtime will however by the key focus. Over in the US, initial jobless claims numbers (est: 245K) and the Philadelphia Fed Business survey will be out. US earnings seasons remains a focus, with Microsoft, eBay, Visa, American Airlines, Alliance Data systems, PPG Industries and Philip Morris schedule to report
Looking at today's main event, the much anticipated ECB announcement in which Draghi may (or may not) announce a hawkish shift to the cental bank's policies and/or reveal the bank's tapering plans, Citi (whose titled we borrowed) gives the 30 second summary, and says that the market seems quite split on whether the ECB will remove the asset purchase program easing bias, but thinks that there’s room for mild disappointment. After all, it says, this meeting is just a warm up for the September meeting (and Jackson Hole). CitiFX Strategist Josh O’Byrne points out that the biggest market fear at the moment appears to be long positioning and "this risks morphing into FOMO for the next leg higher." For the press conference, Citi expects Draghi to slightly tweak some of the language from Sintra to lean a little bit more towards the dovish side.
The bank's expectations are summarized in the following handy cheat sheet:
From UBS, here is a big picture menu of ECB policy choices for normalization:
Another snap preview comes courtesy of SocGen which says that questions on possible exit scenarios should dominate the press conference.
While acknowledging the strength of the economy, Draghi is likely to counter any ideas of an imminent and rapid path towards ending QE, instead urging patience with the still-subdued inflation outlook. We maintain our call for an announcement in September of a six-month extension of the APP into 2018 at €40bn/month, followed by data-dependent quarterly reductions. Meanwhile, we expect the euro area consumer confidence indicator to stabilise as historically high levels (SGe 1.3%) in July. Elsewhere, in the UK, we look for only a modest bounce in retail sales in June.
* * *
With the intros out of the way, Below is an extensive preview of what to expect, courtesy of RanSquawk
ECB Preview: Rate Decision due at 1245BST/0645CDT and Press Conference at 1330BST/0730CDT
- All rates and the current pace of asset purchases are expected to be left unchanged.
- There is a slight chance the ECB may adjust guidance on asset purchases following recent source reports.
- Draghi may reiterate his most recent comments made at the Sintra Forum in his press conference.
RATE/ASSET PURCHASE EXPECTATIONS
- DEPOSIT RATE: Forecast to remain unchanged at -0.40%. The rate was last adjusted in March 2016, when it was cut by 10bps.
- REFI RATE: Forecast to remain unchanged at 0.00%. The rate was last adjusted in March 2016, when it was cut by 5bps.
- MARGINAL RATE: Forecast to remain unchanged at 0.25%. The rate was last adjusted in March 2016, when it was cut by 5bps.
- ASSET PURCHASES: Forecast to maintain the pace of asset purchases at EUR 60bln per month until December 2017. Last December, the ECB reduced the size of purchases by EUR 20bln per month, and extended the purchase horizon by nine months.
CURRENT ECB FORWARD GUIDANCE
- RATES: “The Governing Council stated that the key ECB interest rates are to remain at present levels for an extended period of time, and well past the horizon of the net asset purchases.” (ECB statement, 8/Jun)
- ASSET PURCHASES: “Net asset purchases, at the monthly pace of EUR 60bln, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.” (ECB statement, 8/Jun)
- GROWTH: “Risks to the growth outlook are now broadly balanced” (ECB statement, 8/Jun)
- INFLATION: “Headline inflation has been recovering from the very low levels seen in 2016… Measures of underlying inflation remain low and are expected to rise only gradually over the medium term, supported by our monetary policy measures, the expected continuing economic recovery and the corresponding gradual absorption of slack.” (ECB statement, 27/Apr). Draghi (27/ Jun): “the threat of deflation is gone and reflationary forces are at play”.
AREAS OF DISCUSSION
ASSET PURCHASES: Speculation has been rife that the central bank will tweak its forward guidance with regards to its asset purchases. Citing sources, Reuters reported that the ECB may only drop part of its easing bias, leaving the reference to either the size or duration of QE in place.
Separately, sources cited by Bloomberg have reportedly said that the ECB is drawing up plans to wind down QE, and policymakers will consider these proposals in the autumn, hinting at a September announcement.
Analysts at Bank of America Merrill Lynch look for the ECB to tweak its language: “We expect the ECB this week to toughen their language marginally, by removing the easing bias on QE, while insisting on the need for prudence and a persistent monetary stimulus,” BAML writes, “Sintra was not just about sending a hawkish message, it was also about expressing a healthy degree of unease at the pace of inflation normalisation and hinting that the end of QE did not mean fast normalisation in policy rates.”
INFLATION: It is likely that Draghi will cite weak inflation pressures within the Euro area in his Q&A. The ECB President has argued that loose policy is still warranted to ensure that inflation dynamics become durable and self-sustaining.
And inflation is still too low for the ECB’s comfort, Oxford Economics says, writing that a stronger euro and lower oil prices are negative developments for the euro area inflation profile.
“Although the ECB has raised its growth forecasts since the end of 2016, it has not increased its core CPI inflation forecast,” OxEco points out, “encouragingly, core inflation increased to 1.1% in June, the highest rate since 2013.”
"While Draghi noted at Sintra that the core inflation measure may understate underlying inflation, it is worth noting that a headline inflation overshoot over the next year and a half is unlikely due to the weak outlook for energy and food inflation."
EUR: Within the press conference there could also be talk about the EUR’s recent rally since the June meeting; the EUR now trades well above the central bank’s 1.08 assumption used in its June economic projections, and has risen approximately 2% on a trade weighted basis since June.
Analysts at Goldman Sachs note that the appreciation in the currency would be less welcome at the ECB since it could weigh on inflation pressures, especially so given the weakness in crude prices. “We do not think that Draghi would want to encourage further near-term currency appreciation and/or higher long-term rates,” Goldman says, “yet we do not expect Draghi to try to unwind the market re-pricing since the Sintra speech.”
As such, Draghi may proceed with caution, emphasising that any normalisation would likely be a gradual process, and this may be enough to put a lid on further EUR appreciation, some argue.
In terms of the rate decision itself, little market reaction is expected, so focus will be placed onto the statement from the ECB. President Draghi is largely expected to reiterate his recent comments made at the Sintra conference last month, consequently gearing up for a policy reassessment in September with the ECB Council likely to temper some of the hawkish expectations over immediate policy tightening.
Some analysts suggest that EUR might be met with some downward pressure if the central bank doesn’t give too much away, leading to EUR to pare some of its recent rally observed over the past couple of weeks.
Additionally, there is a speculation following sources reports that the ECB might drop part of its bias over the size or duration of QE, and in doing so, this could potentially lead to upside in EUR and bond yields.
- ECB drawing up stimulus plans for policymakers to consider when they return after the August break --Bloomberg (18/Jul)
- ECB wary of putting end-date on QE, likely to seek flexibility in eventual cuts to programme --Rtrs (14/Jul)
- ECB to announce winding down of bond purchases in Sept --WSJ (13/Jul)
- Some ECB policymakers spooked by market turbulence, some cautious about lifting QE easing bias in July, ECB might only drop part of bias leaving reference to either size or duration of QE --Rtrs (3/Jul)
- Markets did not take note of the caveats in Draghi's Sintra speech, comments intended to prepare market for decision on stimulus later this year without making commitment, ECB can be patient with inflation, can live with it taking longer to rise to targets --Rtrs (28/Jun)
- ECB’s Villeroy: ECB has removed deflation risks (19/Jul)
- ECB's Praet: Inflation will take a long time to get back to target, 'process of reflation is a long one' (8/Jul)
- ECB's Weidmann: Deflation risks are now distant (7/Jul)
- ECB's Weidmann: Inflation expected to end 2017 somewhat lower due to falls in crude prices (6/Jul)
- ECB's Praet: Adverse scenarios for inflation outlook look less likely, deflation risks have largely vanished (6/Jul)
- ECB's Nowotny: Inflation targeting should contain a certain degree of flexibility (5/Jul)
- ECB's Praet: Scenario for future inflation remains contingent on easy financing conditions (4/Jul)
- ECB's Praet: Inflation remains volatile, prices pressures continue to be subdued (4/Jul)
- ECB's Praet: Anchoring rate expectations is a key condition for asset purchases to deliver accommodative policy (4/Jul)
- ECB's Draghi: Deflationary forces have been replaced by reflationary ones (27/Jun)
- ECB's Draghi: Considerable monetary accommodation still required for inflation dynamics to become durable and self-sustaining (27/Jun)
- ECB's Draghi: Inflationary dynamics more muted than one would expected, but factors weighing on inflation are temporary that the ECB can look through (27/Jun)
- ECB's Hansson: Can't expect a quick transmission from monetary policy to inflation (14/Jun)
- ECB's Smets: Better growth should stoke inflation pressures, but we aren't seeing this now (13/Jun)
- ECB’s Villeroy: Accommodative policy still required (19/Jul)
- ECB's Rimsevics sees bond purchases for another 'couple of years' (13/Jul)
- ECB's Praet: Better growth will reinforce ECB's accommodation (8/Jul)
- ECB's Weidmann: Normalisation isn't a 'full brake', it's an easing off the accelerator (7/Jul)
- ECB's Villeroy: Nominal rates will rise in line with the recovery (6/Jul)
- ECB's Praet: ECB's mission is not yet completed (4/Jul)
- ECB's Lautenschlaeger: Imperative that policy be normalised as soon as po ssible (30/Jun)
- ECB's Weidmann: Expansive policy still needed, but can disagree about the level of accommodation (29/Jul)
- ECB's Draghi: Normalisation will be gradual (27/Jun)
- ECB's Weidmann: QE extension was not discussed at the June meeting (25/Jun)
- ECB's Weidmann: Withdrawal of stimulus should be considered if economy develops as expected, ECB shouldn't change self-imposed QE limits (25/Jun)
- ECB's Coeure: The recovery has arrived, but it's unwise to let our guard down because the recovery is cyclical (7/Jul)
- ECB's Weidmann: Ongoing recovery raises the prospect of a normalisation of monetary policy (6/Jul)
- ECB's Weidmann: Pace of normalisation depends on progress of inflation (6/Jul)
- ECB's Praet: Solid upswing continues to broaden across sectors and across countries (6/Jul)
- ECB's Praet: Economic recovery seems to have gathered momentum (6/Jul)
- ECB's Villeroy: Non-standard policy is not eternal (6/Jul)
- ECB's Coeure: Recovery increasingly broad-based, an encouraging development (30/Jun)
- ECB's Draghi: All signs now point to a strenghtening and broadening of the recovery (27/Jun)
- ECB’s Coeure: Currency depreciation is a side-effect of policy and neither its main transmission channel, nor its objective (11/Jul)
- ECB’s Coeure: QE effect on exchange rates is, by and large, not fundamentally different from conventional policy (11/Jul)
- ECB’s Coeure: Steepening at long-end of the yield curve reflects market expectations that future growth will be solid (5/Jul)
- ECB's Coeure: International role of the euro currency has declined over the alst year, but its role as a reserve currency has increased (5/Jul)
- ECB's Coeure: Recent market volatility has not been significant (5/Jul
Finally, some charts from UBS:
Just days after John McCain had a blood clot removed above his left eye, late on Wednesday his office announced that McCain has a brain tumor associated with the removed blood clot. In a statement doctors revealed that McCain has been diagnosed with glioblastoma, an aggressive cancer. The statement says the 80-year-old senator and his family are reviewing further treatment, including a combination of chemotherapy and radiation.
The tumor was revealed after surgery to remove blood clot, with the statement noting that "scanning done since the procedure (a minimally invasive craniotomy with an eyebrow incision) shows that the tissue of concern was completely resected by imaging criteria."
Doctors say that "the Senator's doctors say he is recovering from his surgery 'amazingly well' and his underlying health is excellent."
Full statement below:
STATEMENT FROM THE OFFICE OF SENATOR JOHN McCAIN
"On Friday, July 14, Sen. John McCain underwent a procedure to remove a blood clot from above his left eye at Mayo Clinic Hospital in Phoenix. Subsequent tissue pathology revealed that a primary brain tumor known as a glioblastoma was associated with the blood clot.
"Scanning done since the procedure (a minimally invasive craniotomy with an eyebrow incision) shows that the tissue of concern was completely resected by imaging criteria.
"The Senator and his family are reviewing further treatment options with his Mayo Clinic care team. Treatment options may include a combination of chemotherapy and radiation.
"The Senator's doctors say he is recovering from his surgery 'amazingly well' and his underlying health is excellent."
The office of Senator John McCain also released the following statement:
"Senator McCain appreciates the outpouring of support he has received over the last few days. He is in good spirits as he continues to recover at home with his family in Arizona. He is grateful to the doctors and staff at Mayo Clinic for their outstanding care, and is confident that any future treatment will be effective. Further consultations with Senator McCain's Mayo Clinic care team will indicate when he will return to the United States Senate."
McCain has previously overcome cancer. He revealed in 2008 during his presidential campaign that he had four malignant melanomas removed in surgeries in 1993, 2000 and 2002.
His daughter, Meghan McCain, she said that "the news of my father's illness has affected every one of us in the McCain family. My grandmother, mother, brothers, sister and I have all endured the shock of the news and now we live with the anxiety about what comes next."
— Meghan McCain (@MeghanMcCain) July 20, 2017
Mitch McConnell also commented on the diagnosis, saying that McCain "never shied from a fight…he will face this challenge with the same extraordinary courage that has characterized his life"
McConnell: McCain "never shied from a fight…he will face this challenge with the same extraordinary courage that has characterized his life" pic.twitter.com/CndqEiy60j
— Bradd Jaffy (@BraddJaffy) July 20, 2017
And former President Obama said "McCain was as tough as they come."
John McCain is an American hero & one of the bravest fighters I've ever known. Cancer doesn't know what it's up against. Give it hell, John.
— Barack Obama (@BarackObama) July 20, 2017
Finally President Trump issued a statement: Senator John McCain has always been a fighter. Melania and I send our thoughts and prayers to Senator McCain, Cindy, and their entire family. Get well soon.
The Unemployment Rate in Greece is down to 21.7% in April from a record 27.9% in July of 2013 and a record low of 7.3% in May of 2008.
Despite the falling rate, the percentage of those unemployed seeking jobs abroad has risen from 11% in 2015 to 33% this year.
The message seems to be “get me the hell out of here”.
The Greek Reporter notes Brain Drain Gathers Pace as One in Three Greeks Looks for a Job Abroad.
In 2015 only about 11% of unemployed respondents said that they were actively looking for a job abroad. This figure increased to 28% in 2016 and reached 33% this year.
The responses show that the unemployed have different reasons to seek work abroad. Whereas in 2005, the main reason was the prospect of a better wage, in 2016 and 2017 the main reason given were better career opportunities.
The study conducted for the third year running, in collaboration with polling company LMG, was based on a sample of 903 people from the age of 18 to 67.
According to other findings, 37% of respondents say that they have been out of the labor market for at least 12 months.
Unemployment vs Wanting a Job
More than 1 out of 4 (28%) are out of the labor market, a higher rate compared with the previous two years.
In Greece, as in the US and elsewhere, there is a difference between wanting a job but not having one, and being officially unemployed.
KeepTalkingGreece.com reports that Greek president Prokopis Pavlopoulos sent a sharp worded message to his Turkish counter Recep Tayyip Erdogan, following a series of provocations accompanying his tour to the islands of the eastern Aegean Sea.
“The brave do not provoke,” President Pavlopoulos told Greek soldiers safeguarding the remote island of Ai Stratis. “Provocations, especially provocations without a reason, are characteristic signs of weakness and insecurity.”
“What history and our ancestors taught us is “Molon Labe”, Pavlopoulos added citing the famous quote of Spartan King Leonidas I.
Molon labe (Greek: ????? ???? mol?n lavé), meaning “come and take [them]”, is a classical expression of defiance. According to Plutarch, Xerxes, king of Persia, demanded that the Spartans surrender their weapons and King Leonidas I responded with this phrase.
This occurred after, as KeepTalkingGreece reports, two times in two consecutive days, Turks harassed the helicopter carrying Greek President Prokopis Pavlopoulos on a tour visiting several remote islands and islets in the eastern Aegean Sea.
While Pavlopoulos’ helicopter was heading to islet Panagia, pilots received warning calls and threats from the Turkish armed forces. The Turks claimed the Greeks that they were flying in Turkish Flight Information Region. The Greek delegation ignored the Turkish warnings and the President landed safe in Panagia.
A day earlier, the Turkish armed forces called the Greek helicopters nearing the island of Rhodes to leave the area as “they were flying in a demilitarized zone” where such flights are forbidden. The Greek pilots did not respond to the callings from the Turkish side.
A little later, the Turkish side called on the pilots of Shinook to leave the area as they were flying inside “the Turkish FIR.” On board were President Pavlopoulos, Defense Minister Panos Kammenos as well as the military leadership of the country.
In one incident, the military helicopters transporting Pavlopoulos suffered radio interference from Turkey.
Wednesday morning, a pair of Turkish F4 fighter jets entered the Athens Flight Information Region at 10 a.m. between Lesvos and Lemnos and flew over the Fournoi islets at 8,900 feet.
The Greek President told soldiers while visiting the island of Lemnos...
“There are no grey zones in the Aegean, neither disputes that move between absurdity and ridiculing,”
The president underlined that soldiers in remote areas safeguard the Greek borders that are also borders of the European Union and this according to the International Law.
“You are brave fighters and respond to provocations with Molon Labe!,” Pavlopoulos urged the members of the Greek Armed Forces.
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The much anticipated document (press release and link to full document) released by U.S. Trade Representative Robert Lighthizer said the Trump administration aimed to reduce the U.S. trade deficit by improving access for U.S. goods exported to Canada and Mexico and contained the list of negotiating objectives for talks that are expected to begin in one month. Topping Trump’s list is a “simple” objective: “improve the U.S. trade balance and reduce the trade deficit with Nafta countries.” Among other things the document makes the unexpected assertion that no country should manipulate currency exchange to gain an unfair competitive advantage,which according to Citi’s economists was the only notable surprise in the entire document: That line of focus centers on FX: “Through an appropriate mechanism, ensure that the Nafta countries avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.” ..While Canada and Mexico are not formally considered currency manipulators by the US Treasury, the reference in the list of objectives will likely set a template for future trade deals such as the pending negotiation to modify a 5 year old free trade deal with South Korea, a country in far greater risk of being branded a currency manipulator as it sits on the Treasury’s monitoring list for possible signs of currency manipulation.
On 15 July, he is going to sell 560 million “tokens” — digital units of payment that will be necessary to use Pillar, once it’s ready — in exchange for ether, an up-and-coming cryptocurrency exchanged on public blockchain Ethereum. His target is the equivalent of $50 million; if that sounds like a lot, be aware that Pillar’s “token pre-sale”, some days ago, raised $4 million worth of Ethereum’s currency, ether — in 34 minutes.
“I couldn’t raise any money for Twenty Thirty from investors, because they didn't get what we were doing; now we have ordinary people hammering our email about Pillar,” Siegel says. “These people really want to fund this open source project.”
Siegel’s fund-raising model is called Initial Coin Offering, or ICO — and you might have heard of it, as it is the latest big thing in the frenzied world of cryptocurrencies.
The mechanism has been around for a while — the first instance was MasterCoin in 2013, followed in 2014 by Ethereum’s first ether sale, and more recently by the ill-fated autonomous VC firm The DAO — but it really surged over the first half of 2017. Tens of projects have amassed millions of dollar within days, hours, or seconds, with superstars such as blockchain architecture firms EOS and Tezos soaring over $150 million and $200 million. In June, bitcoin news website Coindesk announced that funds raised through ICOs had overcome VC money as the first source of investment in the blockchain sector in 2017. “Tokens” might sound like Monopoly money, but their impact on the real world is growing by the day.
The question is: why? Ask people in the field and they tend to reflect two main narratives, one optimistic, the other decidedly sceptical.
The positive one is that ICOs are a new, smart way to finance projects that struggle to get VC’s backing.
Etienne Brunet, an investment executive at FinTech VC firm Illuminate Financial, points to investors’ recent interest in private blockchains (members-only ledgers banks and financial institutions are experimenting with) as the root cause for ICOs. “In 2016 it was very hard to raise funding unless you were doing private blockchains,” he says. “So, all the people trying to build open source projects for the public blockchain had to find a new way to get funds.”
The side effect is that millions are going to entities which, apart from tokens and a project outline — crypto parlance: “white paper” — have very little to offer. Take for example “Useless Ethereum Token”, a parody initiative which still managed to raise $40,000 in funding. Or, for a grimmer story, look at OneCoin: a Ponzi scheme which had amassed over $350 million before being busted by the Indian police.
Some of the more obvious security problems are being addressed by the crypto community at large: it has been recommended that funds from ICO be locked in an escrow mechanism — giving access only to limited sums after milestones have been reached — in order to prevent crypto heists. And Ethereum’s wunderkind guru Vitalik Buterin has turned to game theory to suggest some tips for designing fairer ICO auctions, such as as splitting them up in smaller, spaced out sales over time.
The elephant in the room, has to do with financial regulation: with tokens being auctioned, traded, and speculated on as if they were securities, should we regard them and regulate them as securities? (The fact that ICO is even phonetically reminiscent of IPO, or initial public offering, is hardly a coincidence.)In most countries, the answer would be no: if something is not formally a security, it won’t be treated as such. But that is different in the US, whose security regulation extends to “investment contracts” — defined in a landmark case (centered on an orange orchard in Florida) as investments made with an “expectation of profits.”
Whether that applies to tokens— bizarre entities that have a sort of intrinsic value (as theoretical payment units) but are also being flipped around like stocks, is anybody’s guess. Right now, the US Securities and Exchange Commission has been silent on the matter, explains Peter Van Valkenburgh, a researcher at blockchain-focussed think tank Coin Center.
“SEC’s default position is ‘we're proceeding cautiously because, while we are worried about investor protection, we're not certain this is within our purview, and we don't want to stifle innovation’,” he says. “There's no indication that anything is gonna happen in the very short term.”
Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices in order to protect your privacy. Read more about protecting your privacy.
Two resources available almost exclusively to central banks could soon be opened up to additional users as a result of a new digital currency project designed by a little-known startup and Swiss bank UBS. One of those resources is the real-time gross settlement (RTGS) system used by central banks (it’s typically reserved for high-value transactions that need to be settled instantly), and the other is central bank-issued cash. Using the Utility Settlement Coin (USC) unveiled today, the five-member consortium that has sprung up around the project aims to help central banks open-up access to these tools to more customers. If successful, USC has the potential to create entirely new business models built on instant settling and easy cash transfers. In interview, Robert Sams, founder of London-based Clearmatics, said his firm initially worked with UBS to build the network, and that BNY Mellon, Deutsche Bank, ICAP and Santander are only just the first of many future members.
Google Ventures and China-based IDG Capital Partners are the second group of tech investors in two months to place a bet on OpenCoin, the company behind the currently-in-beta Ripple open-source payments protocol. OpenCoin announced today that it had closed an additional round of funding — the amount wasn’t specified — with Google Ventures and IDG Capital Partners. (Hat tip to GigaOM for the news.) Last month, OpenCoin wrapped up an earlier angel round of funding from another high-profile group of technology VCs: Andreessen Horowitz, FF Angel IV, Lightspeed Venture Partners, Vast Ventures and the Bitcoin Opportunity Fund.
Soon after these stories were published, authorities in Australia raided the home of Mr Wright. The Australian Taxation Office said the raid was linked to a long-running investigation into tax payments rather than Bitcoin.
Questioned about this raid, Mr Wright said he was cooperating fully with the ATO.
“We have lawyers negotiating with them over how much I have to pay,” he said.
The New Yorker published a piece pointing at two possible Satoshis, one of whom seemed particularly plausible: a cryptography graduate student from Trinity College, Dublin, who had gone on to work in currency-trading software for a bank and published a paper on peer-to-peer technology. The other was a Research Fellow at the Oxford Internet Institute, Vili Lehdonvirta. Both made denials.
Fast Company highlighted an encryption patent application filed by three researchers – Charles Bry, Neal King and Vladimir Oksman – and a circumstantial link involving textual analysis of it and the Satoshi paper which found the phrase “…computationally impractical to reverse” in both. Again, it was flatly denied.
The NSA was one of the first organizations to describe a Bitcoin-like system. About twelve years before Satoshi Nakamoto published his legendary white paper to the Metzdowd.com cryptography mailing list, a group of NSA information security researchers published a paper entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash in two prominent places, the first being an MIT mailing list and the second being much more prominent, The American Law Review (Vol. 46, Issue 4 ).The paper outlines a system very much like Bitcoin in which secure financial transactions are possible through the use of a decentralized network the researchers refer informally to as a Bank. They list four things as indispensable in their proposed network: privacy, user identification (protection against impersonation), message integrity (protection against tampering/substitution of transaction information – that is, protection against double-spending), and nonrepudiation (protection against later denial of a transaction – a blockchain!).“We will assume throughout the remainder of this paper that some authentication infrastructure is in place, providing the four security features.” (Section 1.2)It is evident that SHA-256, the algorithm Satoshi used to secure Bitcoin, was not available because it came about in 2001. However, SHA-1 would have been available to them, having been published in 1993.
In October 2000 Iraq insisted on dumping the US dollar – ‘the currency of the enemy’ – for the more multilateral euro. The changeover was announced on almost exactly the same day that the euro reached its lowest ebb, buying just $0.82, and the G7 Finance Ministers were forced to bail out the currency. On Friday the euro had reached $1.08, up 30 per cent from that time.Almost all of Iraq’s oil exports under the United Nations oil-for-food programme have been paid in euros since 2001. Around 26 billion euros (£17.4bn) has been paid for 3.3 billion barrels of oil into an escrow account in New York. The Iraqi account, held at BNP Paribas, has also been earning a higher rate of interest in euros than it would have in dollars.
Claims that the NSA created Bitcoin have actually been flung around for years. People have questioned why it uses the SHA-256 hash function, which was designed by the NSA and published by the National Institute for Standards and Technology (NIST). The fact that the NSA is tied to SHA-256 leads some to assume it’s created a backdoor to the hash function that no one has ever identified, which allows it to spy on Bitcoin users.“If you assume that the NSA did something to SHA-256, which no outside researcher has detected, what you get is the ability, with credible and detectable action, they would be able to forge transactions. The really scary thing is somebody finds a way to find collisions in SHA-256 really fast without brute-forcing it or using lots of hardware and then they take control of the network,” cryptography researcher Matthew D. Green of Johns Hopkins University said in a previous interview.
The CIA Project, a group dedicated to unearthing all of the government’s secret projects and making them public, hasreleased a video claiming Bitcoin is actually the brainchild of the US National Security Agency.The video entitled CIA Project Bitcoin: Is Bitcoin a CIA or NSA project? claims that there is a lot of compelling evidences that proves that the NSA is behind Bitcoin. One of the main pieces of evidence has to do with the name of the mysterious man, woman or group behind the creation of Bitcoin, “Satoshi Nakamoto”.According to the CIA Project, Satoshi Nakamoto means “Central Intelligence” in Japanese. Doing a quick web search, you’ll find out that Satoshi is usually a name given for baby boys which means “clear thinking, quick witted, wise,” while Nakamoto is a Japanese surname which means ‘central origin’ or ‘(one who lives) in the middle’ as people with this surname are found mostly in the Ryukyu islands which is strongly associated with the Ryūkyū Kingdom, a highly centralized kingdom that originated from the Okinawa Islands. So combining Nakamoto and Satoshi can be loosely interpreted as “Central Intelligence”.
Certainly, anonymity is one of the biggest myths about Bitcoin. In fact, there has never been a more easily traceable method of payment. Every single transaction is recorded and retained permanently in the public “blockchain”. The idea that the NSA would create an anarchic, peer-to-peer crypto-currency in the hope that it would be adopted for nefarious industries and become easy to track would have been a lot more difficult to believe before the recent leaks by Edward Snowden and the revelation that billions of phone calls had been intercepted by the US security services. We are now in a world where we now know that the NSA was tracking the pornography habits of Islamic “radicalisers” in order to discredit them and making deals with some of the world’s largest internet firms to insert backdoors into their systems.
Nonetheless, Svintsov’s remarks count as some of the more extreme to emanate from the discussion. Svintsov told Russian broadcast news agency REGNUM:“All these cryptocurrencies [were] created by US intelligence agencies just to finance terrorism and revolutions.”Svintsov reportedly went on to explain how cryptocurrencies have started to become a payment method for consumer spending, and cited reports that terrorist organisations are seeking to use the technology for illicit means.
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The FBI employs 35,000 people, including special agents and support professionals such as intelligence analysts, language specialists, scientists, and information technology specialists. Learn how you can join us at FBIJobs.gov. For details on our executives and organizational structure, see our Leadership & Structure webpage.
As of 2013, 8,500 witnesses and 9,900 family members have been protected by the U.S. Marshals Service since 1971.
For 30 years, DeVecchio was one of the FBI 's most important mob busters.
DeVecchio was Scarpa's handler, and Scarpa was more than an ordinary stool pigeon -- he had also allegedly served as muscle for the FBI when the bureau needed some extra legal assistance in making difficult cases. As a result, he was allegedly accorded special, sometimes questionable, favors, including tips on coming indictments that allowed Scarpa's associates to skip town in advance. But, in aiding his informant to commit murder, prosecutors now allege that DeVecchio went too far in protecting his valuable mob asset. Law enforcement sources say DeVecchio may have also enriched himself in the process.
WASHINGTON — The F.B.I. has significantly increased its use of stings in terrorism cases, employing agents and informants to pose as jihadists, bomb makers, gun dealers or online “friends” in hundreds of investigations into Americans suspected of supporting the Islamic State, records and interviews show.
Undercover operations, once seen as a last resort, are now used in about two of every three prosecutions involving people suspected of supporting the Islamic State, a sharp rise in the span of just two years, according to a New York Times analysis. Charges have been brought against nearly 90 Americans believed to be linked to the group.
The increase in the number of these secret operations, which put operatives in the middle of purported plots, has come with little public or congressional scrutiny, and the stings rely on F.B.I. guidelines that predate the rise of the Islamic State.
While F.B.I. officials say they are careful to avoid illegally entrapping suspects, their undercover operatives are far from bystanders. In recent investigations from Florida to California, agents have helped people suspected of being extremists acquire weapons, scope out bombing targets and find the best routes to Syria to join the Islamic State, records show.
But defense lawyers, Muslim leaders and civil liberties advocates say that F.B.I. operatives coax suspects into saying and doing things that they might not otherwise do — the essence of entrapment.“They’re manufacturing terrorism cases,” said Michael German, a former undercover agent with the F.B.I. who researches national security law at New York University’s Brennan Center for Justice. In many of the recent prosecutions, he said, “these people are five steps away from being a danger to the United States.”
French bank BNP Paribas was fined $350 million by the New York State Department of
Financial Services for lax oversight in its foreign-exchange business that
allowed “nearly unfettered misconduct” by more than a dozen employees involved
in exchange rate manipulation, officials announced Wednesday.
From 2007 through 2013, a trader on the bank’s New York desk, identified in the
consent order as Jason Katz, ran a number of schemes with more than a dozen
BNPP traders and salespeople on key foreign exchange trading desks to
manipulate prices and spreads in several currencies, including the South
African rand, Hungarian forint and Turkish lira, officials said.
He called his group of traders a "cartel" and they communicated in a
chat room called "ZAR Domination," a reference to the rand’s trading
symbol, according to the consent order. The group would push up the price of
the illiquid rand during New York business hours when the South African market
was closed, moving the currency in whichever way they chose, and thus
depressing competition, officials said.
Katz also enlisted colleagues at other banks to widen spreads for orders in
rands, increasing bank profits and limiting competition at the customer’
expense, the order says. Some of the traders engaged in illegal coordination
and shared confidential customer information, officials said. As part of a
cooperation agreement with prosecutors, Katz pled guilty in Manhattan federal court in
January to one count of conspiracy to restrain trade in violation of the
“Participants in the foreign exchange market rely on a transparent and fair
market to ensure competitive prices for their trades for all participants,”
Financial Services Superintendent Maria T. Vullo said in a statement. “Here the
bank paid little or no attention to the supervision of its foreign exchange
trading business, allowing BNPP traders and others to violate New York state
law over the course of many years and repeatedly abused the trust of their
BNP Paribas, which employs nearly 190,000 people and has total assets of more
than €2.1 trillion (approximately $2.36 trillion), said in a statement that the
$350 million fine will be covered by existing provisions. It said it had
implemented a group-wide remediation initiative and cooperated fully in the
“The conduct which led to this settlement occurred during the period from 2007
to 2013. Since this time, BNP Paribas has proactively implemented extensive
measures to strengthen its systems of control and compliance,” the bank said in
its statement. “The group has increased resources and staff dedicated to these
functions, conducted extensive staff training and launched a new code of
conduct which applies to all staff.”
Three BNPP employees were fired, seven more resigned and several others were
disciplined for misconduct or supervisory shortcomings in relation to the
probe, the order says.
Katz’s attorney, Michael Tremonte of Sher Tremonte LLP, did not respond Wednesday to a call seeking
SAN DIEGO – Jeffrey Spanier, a 51-year-old former owner of Amerifund Capital Finance, LLC located in Boca Raton, Florida, was convicted by a federal jury today for his role in an elaborate stock-loan fraud scheme in which executives and shareholders of publicly traded corporations collectively lost over $100 million when the stock they pledged as collateral for loans was immediately sold in order to fund the loans.
The first timeshare in the United States was started in 1974 by Caribbean International Corporation (CIC), based in Fort Lauderdale, Florida. It offered what it called a 25-year vacation license rather than ownership. The company owned two other resorts the vacation license holder could alternate their vacation weeks with: one in St. Croix and one in St. Thomas; both in the U.S. Virgin Islands. The Virgin Islands properties began their timeshare sales in 1973 with owners Hillie Meyers, Don Saunders, and Arthur Zimand.
- Analysts upgrading HGV are not considering the 'dark side' of this industry.
- Potential liabilities can spring up anytime that can change this tune.
- Angry customers complain, which can soon become lawsuits, with deleterious consequences.
We see no reason to sign up for RCI except to give the company money. We are new members who tried to use RCI for the first time. We wanted to visit El Dorado Suites, Riviera Maya, using our exchange. Through RCI, we have to pay a $399 fee for a mandatory 7-day visit. RCI requires we also pay a $2500 "Mandatory all inclusive" fee for the El Dorado. So that's the cost of our RCI membership, plus a $399 fee, plus a $2500 all-inclusive fee. Curious, we logged into El Dorado's home page and found we could sign up for the exact same vacation, not using RCI, for a total cost of $2200, also all-inclusive. So the all-inclusive fee alone is more than the actual cost of staying at the El Dorado Suites, without having ever met an RCI salesperson....I have been with RCI approx 12yrs. My previous issues have been the fact that they charge for unused points... Live and learn. My complaint is that I had to cancel a reservation. It's unfortunate but situations do arise and plans have to get changed. I cancelled 5-days prior to my check-in date. RCI WILL NEITHER REFUND NOR CREDIT my charge of $99.00! They say they have a 24-hour 'grace period'. I feel this is a major RIP-OFF to consumers and extremely bad business practice. I have contacted them by email, customer service and 'blabbering' supervisor. I was told "they have to keep the lights on" in order to provide their service. Well, RCI, my lights need to be on as well!! BUYER BEWARE.
Nomura reiterated their buy rating on shares of Hilton Grand Vacations Inc in a research note published on Friday morning. The brokerage currently has a $43.00 price target on the stock.
Kosovo, self-declared independent country in the Balkans region of Europe. Although the United States and most members of the European Union (EU) recognized Kosovo's declaration of independence from Serbia in 2008, Serbia, Russia, and a significant number of other countries—including several EU members—did not.
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But there are plenty of other reasons to want to bring supply chains back to the U.S. High-value-added manufacturing — robot factories pumping out goods — creates jobs for Americans in other ways. As economist Enrico Moretti explains in his book “The New Geography of Jobs,” high-tech manufacturing creates higher-paying service-sector jobs in a local area. The dollars that come into a town with a robot factory get spent on doctors and waiters and personal trainers, and the money circulates throughout the community, leaving everyone better off.from another article:Moretti demonstrates that there really are two Americas — one that’s healthy, rich and growing, and a second that’s increasingly being left behind. The two nations-within-a-nation are divided not so much by region or race or religion, but by the kinds of industries they support. Those cities and towns that are home to innovative industries — information technology, pharmaceuticals, advanced manufacturing and the like — are wealthier, healthier and safer, while the places without these industries are steadily declining.
After predicting the 2008 economic crisis, the Brexit vote, the U.S. presidential election and other events correctly, Nassim Nicholas Taleb, author of the Incerto series on global uncertainties, which includes The Black Swan: The Impact of the Highly Improbable, is seen as something of a maverick and an oracle. Equally, the economist-mathematician has been criticised for advocating a “dumbing down” of the economic system, and his reasoning for U.S. President Donald Trump and global populist movements. In an interview in Jaipur, Taleb explains why he thinks the world is seeing a “global riot against pseudo-experts”.
Putting my work online motivates me to go deeper into a subject. I put it online and it gives some structure to my thought. The only way to judge a book is by something called the Lindy effect, and that is its survival. My books have survived. I noticed that The Black Swan did well because it was picked up early online, long before the launch. I also prefer social media to interviews in the mainstream media as many journalists don’t do their research, and ‘zeitgeist’ updates [Top Ten lists] pass for journalism.
Well, I’m talking about the United States where I get more credible news from the social media than the mainstream media. But I am very impressed with the Indian media that seems to present both sides of the story. In the U.S., you only get either the official, bureaucratic or the academic side of the story.
Oh, absolutely! The last crisis  hasn’t ended yet because they just delayed it. [Barack] Obama is an actor. He looks good, he raises good children, he is respectable. But he didn’t fix the economic system, he put novocaine [local anaesthetic] in the system. He delayed the problem by working with the bankers whom he should have prosecuted. And now we have double the deficit, adjusted for GDP, to create six million jobs, with a massive debt and the system isn’t cured. We retained zero interest rates, and that hasn’t helped. Basically we shifted the problem from the private corporates to the government in the U.S. So, the system remains very fragile.
Of course. The whole mandate he got was because he understood the economic problems. People don’t realise that Obama created inequalities when he distorted the system. You can only get rich if you have assets. What Trump is doing is put some kind of business sense in the system. You don’t have to be a genius to see what’s wrong. Instead of Trump being elected, if you went to the local souk [bazaar] in Aleppo and brought one of the retail shop owners, he would do the same thing Trump is doing. Like making a call to Boeing and asking why are we paying so much.
Not the Islamic State, but al-Qaeda at the time, and I said the U.S. administration was helping fund them. See, you have to have courage to say things others don’t. I was lucky financially in life, that I didn’t need to work for a living and can spend all my time thinking. When Trump was running for election, I said what he says makes sense to a grocery store owner. Because the grocery guy can say Trump is wrong because he can see where he is wrong. But with Obama, he can’t understand what he’s saying, so the grocery man doesn’t know where he is wrong.
Exactly. Trump never ran for archbishop, so you never saw anything in his behaviour that was saintly, and that was fine. Whereas Obama behaved like the Archbishop of Canterbury, and was going to do good but people didn’t feel their lives were better. As I said, if it was a shopkeeper from Aleppo, or a grocery store owner in Mumbai, people would have liked them as much as Trump. What he says makes common sense, asking why are we paying so much for this rubbish or why do we need these complex taxes, or why do we want lobbyists. You can call Trump’s plain-speaking what you like. But the way intellectuals treat people who don’t agree with them isn’t good either. I remember I had an academic friend who supported Brexit, and he said he knew what it meant to be a leper in the U.K. It was the same with supporting Trump in the U.S.
Well, if you’re a businessman, for example, what Trump said didn’t bother you. The intellectual class of no more than 2,00,000 people in the U.S. don’t represent everyone upset with Trump. The real problem is the ‘faux-expert problem’, one who doesn’t know what he doesn’t know, and assumes he knows what people think. An electrician doesn’t have that problem.
Well, with Trump, Modi, Brexit, and now France, there are some similar problems in those countries. What you are hearing is people getting fed up with the ruling class. This is not fascism. It has nothing to do with fascism. It has to do with the faux-experts problem and a world with too many experts. If we had a different elite, we may not see the same problem.
I often say that a mathematician thinks in numbers, a lawyer in laws, and an idiot thinks in words. These words don’t amount to anything. I think you have to draw the conclusion that there is a global riot against pseudo-experts. I saw it with Brexit, and Nigel Farage [leader of the U.K. Independence Party], who was a trader for 15 years, said the problem with the government was that none of them had ever had a proper job. Being a bureaucrat is not a proper job.
I don’t understand how a left-wing person can defend Salafism, or religious extremism. In a democracy, you can allow people to have any view, but they can’t come with a message to destroy democracy. Why should people who come to the West come with a message to finish the West? This is where the discourse goes haywire. So in Yemen, the [Saudi] intervention is good, but the intervention [by Russia] in Aleppo shouldn’t be allowed. I don’t think Trump was racist when he said Mexican criminals shouldn’t be allowed into the U.S.; he was targeting criminals. If you are Naziphobic, you are not against Germans. If I oppose Salafism, I am not an Islamophobe. Obama also deported Mexicans and refused to accept immigrants.
I am not anti-globalisation, but I am against big global corporations. One of the reasons is what they cost. Today, every project sees cost overruns because these projects have to factor in global risks as well. In nature there is an ‘island effect’. The number of species on an island drops significantly when you go to the mainland. Similarly, when you open up your small economies, you lose some of your ethnicity or diversity. Artisans are being killed by globalisation. Think of the effect on so many artists who have been put out of work while people are buying wrinkle-free shirts and cheap mobile phones. I’m a localist. The problem is globalisation comes through large global corporates that are predatory, and so we want to counter its ill-effects.
I don’t think it will go left or right, and I don’t know about the short term. But I think in the long term, the world can only survive if it lives like nature does. Many smaller units of governance, and a collection of super islands with some separation, quick decision-making, and visible implementation. Lots of Switzerlands, that’s what we need. What we need is not leaders, we don’t need them. We just need someone at the top who doesn’t mess the system up.
- At the end of 2015, total pension assets were estimated at USD 35.4 trillion, which represents a decrease of 0.5% compared to USD 35.6 trillion at the end of 2014
- Pension assets relative to GDP reached 80% in 2015, which represents a decrease of 4% from the 2014 ratio of 84%
- The largest pension markets are the US, UK and Japan with 62%, 9% and 8% of total pension assets in the study, respectively
In what may be the most stunning move in the asset management space in years, the WSJ reports that Harvard University’s endowment, which manages just shy of $36 billion, will undergo a "radical overhaul" in the way the world’s wealthiest school invests its money by outsourcing management of most of its assets and lay off roughly half the staff in the process.According to the WSJ, about half of the 230 employees at Harvard Management Company will leave as part of a sweeping change by the university’s new endowment chief, N.P. “Narv” Narvekar. This means that the endowment will shut down its internal hedge funds and let go traders by the middle of the year. Additionally, the internal team in charge of direct real-estate investments is expected to spin out into an independent entity that Harvard is expected to invest with. Only management of Harvard’s natural resources portfolio and passively managed exchange-traded funds will remain in house.
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Overstock.com Inc is an online retailer offering closeout and discount brand and non-brand name merchandise, including bed-and-bath goods, home décor, kitchenware, watches, jewelry, electronics and computers, apparel, and designer accessories.Overstock.com Inc. is based out of Salt Lake City, UT and has some 1,900 employees. Its CEO is Patrick M. Byrne.
Overstock.com, Inc. (OSTK) has reached a new milestone in its efforts to bring Wall Street and bitcoin pioneered crypto-revolution closer. The world's first trading portal for the exchange of securities on blockchain technology is ready and has been built by Overtstock.com's majority-owned fintech subsidiary t0. Overstock.com recently announced approval of a non-transferable rights offering by its board of directors which allows its stockholders of record to purchase shares of its preferred stock, including preferred shares to be issued and traded exclusively on a registered alternative trading system using the t0 issuance and trading platform.
Santiago, who was arrested in January and waiting to stand trial in March on criminal charges, recently showed up to an F.B.I. office in Anchorage unannounced seeking help.Santiago told the F.B.I. he thought he was being mind controlled, possibly by the U.S. government or the C.I.A. and admitted hearing voices, which Santiago said told him to study “extremist materials on the Internet,” the New York Times reports.
“There has been a massive blowback from public pension funds and private endowments,’’ said Craig Effron, who co-founded his Scoggin Capital Management nearly 30 years ago. An investor told him recently that many chief investment officers are so fed up that they would prefer to entrust their cash to a trader who charged no management fee, over one who did, even if they expected the latter to make them more money.Public retirement plans from Kentucky to New York, New Jersey and Rhode Island have decided to pull money from hedge funds. So did a state university in Maryland and other endowments. MetLife Inc. and other insurers followed suit. Money-losing firms were forced to reduce their fees. Client withdrawals ($53 billion in the last four quarters) drove some managers out of business, including veteran Richard Perry, who until recently had managed one of the longest-standing and better-performing firms.
The California Public Employee Retirement System (CalPERS) is about to report the world’s largest public employee pension suffered an actuarial investment loss of $30.8 billion last year.CalPERS manages the defined pension plan investments and record keeping for 3,007 California state and local government entities. The pension plan is also responsible for paying the pension benefits to 611,078 retirees and will eventually be responsible for paying retirement benefits to another 868,713 active and 335,908 inactive government workers.Despite Governor Jerry Brown last summer demanding CalPERS immediately “lower its investment risk and volatility of returns” by reducing its “assumed” annual investment return from 7.5 percent to 6.5 percent, the CalPERS board voted 7- 3 on November 15, 2015 only to slowly reduce the investment return expectation over the next decade.
While clients have only pulled a net 2 percent of assets so far, Tony James, the president at Blackstone Group, the largest investor in hedge funds, predicted in May that the industry would shrink by roughly a quarter over the next year. Hedge fund closures (782 in the first nine months) are on track to be the most since 2008, and startups (576) the fewest.Any manager still standing applauds a smaller industry. Less money under management means fewer crowded trades and more chances to find the elusive alpha. Interest rates on the rise in the U.S., while still near zero or negative in the rest of the world, should also help. The Trump presidency, which promises less regulation, more infrastructure spending and the potential return of prop trading by banks, could also be a boon.