Month: November 2017

For the 22nd straight month, US spending growth outpaced income growth in October.

The last time income growth was higher than this was Dec 2015, but spending growth is stalling…

Mostly driven by Private workers wage growth…

However, month-over-month saw slightly better than expected income growth of 0.4% (while spending growth slowed drastically from a revised 0.9% surge in September to a 0.3% gain in October).

 

Which indicates a modest rise in the savings rate…

Probably chalk this one up to hawkish for The Fed.

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• The thinking behind Kim Jong Un’s ‘madness’ (Reuters); U.S. warns North Korean leadership will be ‘utterly destroyed’ in case of war (Reuters)
• Senate tax drama enters complicated end-game gambit (Reuters)
• Corporate Tax Rate in Flux as Senate Prepares to Vote (WSJ)
• The Senate Tax Bill Has Something for Every Republican to Hate (BBG)
• Bitcoin Mania: Even Grandma Wants In (WSJ)
• The Best Way to Spur Growth? Help the Poor, Not the Rich (BBG)
• OPEC, allies set to agree oil cut extension to end of 2018 (Reuters)
• Six Minutes to Counterattack: South Korea Shows Plan to Strike Back at North’s Missiles (WSJ)
• Trump sparks outrage in UK with tweet to May after sharing far-right videos (Reuters)
• Matt Lauer’s N.Z. Ranch Under the Spotlight Amid Harassment Allegations (BBG)
• Global deal on bank capital rules likely: EU official (Reuters)
• Sexual misconduct allegations may roil 2018 U.S. congressional elections (Reuters)
• China Bond Rout Is `Early Warning Signal’ to Global Debt Market (BBG)
• Elon Musk to compete to fund high-speed Loop in Chicago (Reuters)
• Nokia Denies It’s in Acquisition Talks With Juniper Networks (BBG)
• From Amazon to Etsy, Tech Giants Fight Trump’s Plan to Save Coal (BBG)
• One City’s Experience After Insurance Subsidies Vanish (WSJ)

Overnight Media Digest

WSJ

– Amazon.com Inc wants workers to ask its virtual assistant Alexa to book conference rooms and launch meetings, as the company races against rivals to make the office the next major inroad for voice-recognition devices. on.wsj.com/2Bny6Fb

– Demands by a former Uber Technologies Inc employee Ric Jacobs, who was granted $4.5 million this year in a settlement agreement over his claims about the company’s secrecy measures were “clearly extortionist,” said one of Uber’s top attorneys. on.wsj.com/2BkMZZ1

– American internet media company BuzzFeed is laying off about 100 employees and reorganizing its advertising sales and business operations as it moves away from relying purely on native advertising. on.wsj.com/2Bnhbml

– Chipotle Mexican Grill Inc founder Steve Ells will step down as chief executive, after the fast-casual dining pioneer failed to retain customers amid rising competition and repeat food-safety scares. on.wsj.com/2BlRBOq

– The United States called on all countries to suspend diplomatic ties with North Korea and asked that China stop crude oil trade with Pyongyang as diplomats met at an emergency United Nations Security Council meeting. on.wsj.com/2BnzCqR

– South Korea became the first major Asian economy to raise its main policy rate since the Federal Reserve started increasing U.S. rates two years ago, the latest sign of a global move away from crisis-era stimulus measures. on.wsj.com/2BmUb6L

– Jared Kushner, senior White House adviser and U.S. President Donald Trump’s son-in-law, was interviewed this month by Special Counsel Robert Mueller’s team as it investigates whether Trump associates colluded in Russia’s efforts to interfere in the 2016 U.S. election. on.wsj.com/2Bo0E1z

 

FT

Xavier Rolet has stepped down as chief executive of the London Stock Exchange Group Plc, bowing to growing board pressure to resolve a governance crisis at the top of one of the City’s most high-profile institutions

Mounting litigation costs and tough global competition have pushed up losses at Uber Technologies Inc even as the ride-hailing company disclosed the formal launch of a SoftBank Group Corp led deal to invest between $7 billion and $10 billion.

The government of Australia announced a public inquiry into its banks and financial system, caving to political pressure from lawmakers as the country’s four biggest lenders relented from a lobbying campaign against the idea and requested an inquiry into themselves.

 

NYT

– The United States has filed arguments to the World Trade Organization in a looming dispute over China’s future in the international body, which could shape the global trading system for decades to come. nyti.ms/2imEgSb

– Senior executives at NBC News made the decision to fire Matt Lauer, the face of “Today” for two decades, late Tuesday night. At 6:49 a.m., 11 minutes before airtime, Andrew Lack, the news division’s chairman, sent a memo to the staff. nyti.ms/2k9D2u7

– On Thursday, General Motors will demonstrate its growing fleet of computer-operated, battery-powered Chevrolet Bolts in San Francisco to dozens of investment analysts, who are eager to evaluate the automaker’s advanced test vehicles. nyti.ms/2BxTLLT

– Minnesota Public Radio said Wednesday that it was severing all business ties with Garrison Keillor, the creator and retired host of “A Prairie Home Companion” after allegations of “inappropriate behavior with an individual who worked with him.” nyti.ms/2nicUhS

 

Canada

THE GLOBE AND MAIL

** Canada’s largest coalition of institutional investors, the Canadian Coalition for Good Governance, wants shareholders to have the right to nominate directors for board elections, saying it has obtained an expert legal opinion that its proposed model for proxy access is allowed under business law statutes. tgam.ca/2BASnbh

** Canada Mortgage and Housing Corp saw its mortgage insurance business continue to shrink in recent months as a result of tougher new qualification rules and declining home sales in the Toronto area. tgam.ca/2BxTDfj

** Enbridge Inc is issuing C$1.5 billion ($1.16 billion) of shares and plans to sell at least C$3 billion in assets as it seeks to fund major development projects and streamline its operations following its takeover of Spectra Energy Partners. tgam.ca/2k8ZaEP

NATIONAL POST

** Canadian Heritage Minister Mélanie Joly has filled the long-vacant role of Ontario commissioner at the Canadian Radio-television and Telecommunications Commission. bit.ly/2kbJuAC

** Kinder Morgan Canada Ltd staff described the City of Burnaby’s process to obtain municipal permits as “opaque” and “ineffective” to a National Energy Board hearing called to resolve delays stalling the C$7.4 billion Trans Mountain pipeline expansion. bit.ly/2kbODZu

** Japanese dollar store Miniso is expanding across Canada and has been described as Dollarama Inc’s biggest potential threat. bit.ly/2k90R59

 

Britain

The Times

– Britain is close to a deal over the Northern Ireland border, after British officials made proposals this week to avoid a “hard border” in Ireland. bit.ly/2AJ89Ur

– Millions of iPhone users could be in line for compensation after the launch of a mass legal claim against Google for illegally harvesting personal data from Apple handsets. bit.ly/2zAwAiq

The Guardian

– U.S. President Donald Trump retweeted a handful of anti-Muslim videos posted by the deputy leader of a British far-right group, prompting a rare condemnation of Trump by Prime Minister Theresa May, whose official spokesperson called Trump’s actions wrong. bit.ly/2AjuTr1

– Uber Technologies Inc has admitted that 2.7 million people in the UK were affected by a 2016 security breach that compromised customers’ information, including names, email addresses and mobile phone numbers. bit.ly/2j3ypyf

The Telegraph

– The London Stock Exchange has launched an attack on one of its biggest investors in a row that has resulted in boss Xavier Rolet leaving “with immediate effect”, a year earlier than planned. bit.ly/2nfgER3

– German engineering company Siemens AG is to float its medical business in Frankfurt in what is set to be the country’s largest public offering in a generation. bit.ly/2jxZ3ib

Sky News

– Sky News has learnt that UK Asset Resolution will announce that it has kicked off the process to offload the Bradford and Bingley mortgages, more than six months after bankers were hired to prepare the process. bit.ly/2j2UDAy

– Lloyds Banking Group Plc said it would close 49 of its 1,843 branches under the Halifax, Bank of Scotland and Lloyds brands, with 99 staff losing their jobs. bit.ly/2zCz403

 

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From “Blain’s Morning Porridge”, Submitted by Bill Blain of Mint Partners

Something has changed. The downside feedback loop hasn’t functioned through 2017. Instead a new behavioural paradigm shift occurred. Investors now believe negatives don’t impact growth and that market upside is unlimited. The result has been massive gains for anyone who blithely accepts the new reality that nothing was going wrong.

      – Bill Blain

“Stretched Valuations and Macro Uncertainty”… we’ve been here before.

My Hat was assassinated last night.

I am in mourning. The unnamed perpetrator (actually it was Professor Mark Blythe, well known Brown University economist, author of many books on difficult political-economy conundrums, and Hat-Murdering Dundonian), achieved a comedy classic. While explaining the inevitable QE political end-game (clue – it’s not pretty), he sent his glass of wine spinning across the table. Sadly my hat was on the shelf below and the wine then drip, drip, dripped into it with the inevitable dousing myself in a puddle of red wine later in the evening as I put it on. Laughed? Damn near punched him!

What does one do next? A phone call to Bates of Jermyn Street for a new Fedora and advice on hat cleaning is on the cards….

Meanwhile, back on Planet Earth, “stretched valuations and macro uncertainty” are the watchwords of the cautious few who aren’t participating in the current binge buying market orgy. Don’t even think about Bitcoin. If you do, go read a comic instead of this..

For believers, nothing seems likely to derail the remorseless upside moves… Aside from some minor wobbles in tech stocks (perhaps driven by my comments y’day on driverless cars and the inevitability tech can’t deliver everything it promises), it’s all looking like a buy-a-thon out there.

It all feels to darn perfect…

With a Brexit deal in sight, we’ve even got the remarkably unexpected outcome that even Theresa May has got lucky! For once she doesn’t look an utter national embarrassment (although Nigel Farage is inevitably screaming she’s a sell-out). Being publically insulted by Trump might be the best thing to ever happen to her.

Finger-wagging the Trump will reap massive rewards. I feel a war with America coming on. For the US President to publically tweet-insulting our dearly beloved national treasure of a Prime Minister is unforgivable stuff. I’m afraid the only option left is a fight to the death between them. (There, two problems neatly solved…) I’ve never found it necessary to criticise the American Premier – he does a great job confirming himself as a bigoted racist laughing stock.

The soar-away pound sterling looks the obvious way to play the positive Brexit sentiment. Assuming there really is a deal on the table, then UK bonds look tight, the stock market is looking fully priced – so it’s the currency to play.

In the US it’s the prospects for a tax-overhaul bill – looking stronger all the time. The outlook for the US economy – “broad based” as the Fed says – leaves many investors happy. But are they too complacent?

By this time, I am sure everyone will have seen the Goldman’s 2018 Macro Outlook – “Too late for Goldilocks but too soon for the Bears”. It’s a classic sit-on-the-fence note, pointing out the markets’ Pavlovian reaction for the last few years has been to consciously link tail risk events like political populism, bank troubles, recessionary numbers and central bank intervention with market downside.

Something has changed.

The downside feedback loop hasn’t functioned through 2017. Instead a new behavioural paradigm shift occurred. Investors now believe negatives don’t impact growth and that market upside is unlimited. The result has been massive gains for anyone who blithely accepts the new reality that nothing was going wrong. Goldman wrote: “The reduction in perceived tail risks coupled with higher growth expectations has helped to push equites higher as the equity risk premium moderated.”

However, risks do remain real. Mustn’t forget that! Remember my key mantra: the market has but one objective: to inflict the maximum amount of pain on the maximum number of participants!

The remorseless upside is unlikely to be sustained through 2018 – as the Squid says “valuations are stretched”, quantitative tightening “QT” is a concern, growth will moderate and lower returns, and rules of financial gravity will prevail. “The highest valuations since 1900 mean pain is coming” scream the headlines on the Goldman note.

Our view is the macro outlook remains positive, and it’s more likely we’ll see pain in the bond markets. The big threats are 1) Upside Economic Shock – negative for rates, and 2) and inflation shock. We’ll come out with an outlook piece putting together our expectations in December.

Have a happy St Andrews Day (Patron Saint of Scotland and a few lessor nations like Russia, Prussia and parts of Greece!)

Anyone know where I can buy a hat in Canary Wharf?

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Following an embarrassing revelation from about a weak ago that Uber concealed a massive cyberattack – in which hackers stole personal data from 57 million customers for more than a year – and paid the hackers $100,000 to keep quiet (not to mention the plethora of other scandals of late), investors in the private company have rightfully balked at providing the $7-$10 billion worth of new equity it apparently needs to keep the doors open. 

Therefore, it’s probably not helpful, at least for Uber management, that the company just reported another quarter of massive losses totaling some $1.5 billion.  Here’s more from the Financial Times:

Uber’s adjusted third-quarter losses widened to $743m, up 14 per cent from the previous quarter, on a measure that excludes interest, tax and share-based compensation, the documents revealed.

 

Including those items brings Uber’s net losses to $1.5bn for the quarter, according to generally accepted accounting principles.

 

As Uber faces legal challenges around the world, including a high-profile lawsuit from Waymo, closer to home, its litigation efforts have become increasingly costly. The company also spends heavily on marketing and discounts for its transportation service, particularly in competitive markets such as India and the US.

 

Net revenues rose to $2bn in the third quarter, up 14 per cent from the previous quarter, with gross bookings of $9.7bn.

Of course, as we noted yesterday, SoftBank shocked some Uber investors when they offered to buy shares in a new round of financing, but only at a 30% discount to their previous valuation of $69 billlion.  Meanwhile, even at that “bargain” price, General Atlantic and DST dropped out of the original investor consortium citing “growing risks” with the San Fran darling.

Bloomberg reports that SoftBank and a coalition of investors will offer to buy shares in Uber at a price that would value the ride-hailing company at 30 percent less than its most recent $69 billion valuation, according to two people familiar with the matter.

 

The deal isn’t done, however. Shareholders will need to sell at the $48 billion price.

 

While it’s 30 percent less than the current valuation, the offer would represent a significant windfall for many early investors.

 

If shareholders don’t agree to sell in sufficient numbers, SoftBank could raise the price or walk away.

So what say you?  Are these all temporary blips for Uber or is there a “Dead Unicorn Walking” in Silicon Valley?

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UK-based Dialog Semiconductor crashed as much as 17% following a Nikkei report that Apple will design its own power chips for use in iPhones as early as 2018, cutting dependence on Dialog “as it seeks to boost its semiconductor capabilities to better compete with rivals.”

As the Nikkei adds, The main power management chip controls an iPhone’s charging function, battery management, and energy consumption. “Based on Apple’s current plan, they are set to replace partially, or around half of its power management chips to go into iPhones by itself starting next year,” said the source. Another person said Apple was indeed developing its own power management chips for iPhones but the time frame was less certain and could be delayed to 2019.

Apple’s main power management chips for the iPhone, iPad and Apple Watch are now exclusively designed by U.K.-based Dialog Semiconductor, according to Credit Suisse. Power management chips are one of the most crucial and expensive components after core processors, modems and memory chips.

Apple is keen to boost production of its own semiconductors to better compete in emerging technologies such as artificial intelligence applications and reduce reliance on external chip designers.

 

By developing more of its own chips, Apple will also be in a better position to integrate software and hardware and to manufacture products that can be differentiated from those of its rivals such as Samsung Electronics and Huawei Technologies, according to analysts.

 

Apple’s new in-house power management chip would be the most advanced in the industry, according to the sources, and could have processing capabilities that allow it to better monitor and control power consumption among various components. That means iPhone users could expect devices capable of delivering better performance on lower power consumption.

Such new chips will be solely manufactured by Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, according to the industry sources. TSMC has been Apple’s sole supplier manufacturing core processor chips for iPhones since 2016. Currently Dialog’s power management chips for Apple’s iPhones are also made by TSMC.

In 2016, Apple was TSMC’s No.1 customer, contributing 17% to the Taiwanese chipmaker’s overall revenue. That contribution will grow to around 20% in 2017 and continue to rise in 2018, according to Bernstein Research. Apple already designs its own core processors, a bionic neural engine chip to handle facial, image and speech recognition and other machine-learning algorithms. It also builds its own fingerprint chips, and a connection chip used in Airpods to allow seamless pairing with other Apple products with the wireless headphone

Furthermore, Apple is also building its own graphic processor and will no longer use ones provided by Imagination Technologies in 15 months to two years’ time, the British chip designer said in a statement in April, which crushed thee stock of Imagination, as Apple was its no.1 customer that accounted for over half of its revenue. The British chip designer eventually sold itself to Canyon Bridge, a private equity investment fund backed by state-owned Chinese fund Yitai Capital, in September.

There were hints today’s announcement was coming: on April 11, Dialog Semi shares closed down 16% following a note from private bank Bankhaus Lampe suggesting that Apple could cut back the use of the company’s power management integrated circuits.

And now, the focus again turns to Dialog, where Apple accounted for 74% of the company’s revenue in 2016. The result, predictably, was the biggest drop in Dialog stock price since October 2015, down as much as 17%.

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‘Fear and Loathing In the Age of QE … AI’ is a presentation given at Mining Investment London earlier this week.

Stephen Flood, CEO of GoldCore presentation (28 minutes) was well received at the conference which is a strategic mining and investment conference for leaders in the mining and investment sectors, bringing together attendees from 20 countries.

 

Key topics in the video:

– A bullion dealers view on ‘What will drive the markets in 2018?’
– QE, inflation, Fed rates, debt bomb, China, populism, EU cohesion, Brexit, digital disruption, cashless society, demographics, Trump (war), Artificial intelligence (AI)
– Solve global debt crisis with humongous amount of debt!?
– Inflation – U.S. health insurance has increased 13% per annum since
– How Artificial Intelligence (AI) is the “big one,” likely be massively disruptive
– Trump: ‘No respect, no capacity, no strategy’
– Brexit and EU – ‘Poor outlook’ for Europe and euro doomed?
– “We are getting older and getting fatter” …  “less useful & less fair”
– “We live in uncertain times … there is no map”
– Gold’s excellent c.10% per annum performance over long term (see table)
– Low cost gold = Low “utility” gold
– Avoid “single point of failure”

‘Fear and Loathing In the Age of QE … AI’ can be watched on Youtube here

Related Videos
GoldNomics – Cash or Gold Bullion?
Why Silver Bullion Is Set To Soar – GoldCore Interview
Gold Bullion Stored In Singapore Is Safest – Marc Faber
Russia Seen More Likely to Sell Dollar Rather Than Gold
Talking Gold with CNN’s Richard Quest

News and Commentary

Gold holds near one-week low as dollar firms (Reuters.com)

Tech Stock Slide Spreads to Asia; Korean Won Drops (Bloomberg.com)

U.S. Stocks Dragged Down by Tech Rout; Bonds Fall (Bloomberg.com)

Goldman Says the Bitcoin Haters Just Don’t Get It (Bloomberg.com)

Fidelity restores online account access after resolving technical issue (CNBC.com)

Source: Bloomberg

Goldman Warns That Market Valuations Are at Their Highest Since 1900 (Bloomberg.com)

Bitcoin Tops $11,000 – Bundesbank Sees No Bubble, Stiglitz Says “Should Be Outlawed” (ZeroHedge.com)

Own Bitcoin – But Invest No More Than You Can Afford To Lose (StansBerryChurcHouse.com)

What to do if you’ve missed out on the bitcoin super-bubble (MoneyWeek.com)

Gold Slammed On Massive Volume To Key Technical Support On GDP Beat (ZeroHedge.com)

Gold Prices (LBMA AM)

30 Nov: USD 1,282.15, GBP 952.64 & EUR 1,084.06 per ounce
29 Nov: USD 1,294.85, GBP 965.70 & EUR 1,092.46 per ounce
28 Nov: USD 1,293.90, GBP 972.75 & EUR 1,088.95 per ounce
27 Nov: USD 1,294.70, GBP 969.73 & EUR 1,084.83 per ounce
24 Nov: USD 1,289.15, GBP 967.89 & EUR 1,086.37 per ounce
23 Nov: USD 1,290.15, GBP 969.93 & EUR 1,089.40 per ounce
22 Nov: USD 1,283.95, GBP 969.25 & EUR 1,092.51 per ounce

Silver Prices (LBMA)

30 Nov: USD 16.57, GBP 12.32 & EUR 14.00 per ounce
29 Nov: USD 16.90, GBP 12.60 & EUR 14.26 per ounce
28 Nov: USD 17.07, GBP 12.84 & EUR 14.36 per ounce
27 Nov: USD 17.10, GBP 12.81 & EUR 14.32 per ounce
24 Nov: USD 17.05, GBP 12.80 & EUR 14.38 per ounce
23 Nov: USD 17.10, GBP 12.84 & EUR 14.43 per ounce
22 Nov: USD 16.97, GBP 12.81 & EUR 14.44 per ounce

Recent Market Updates

– Own Gold Bullion To “Support National Security” – Russian Central Bank
– Bitcoin $10,000 – Huge Volatility of Cryptocurrencies and Risky Fiat Making Gold Attractive
– Financial Advice from Dr Wayne Dyer
– Buy Gold As Fed Shows Uncertainty And Concern Over Financial ‘Imbalances’
– Brexit Budget – Grim Outlook As UK Economy Downgraded
– Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
– Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape
– Money and Markets Infographic Shows Silver Most Undervalued Asset
– Is New Fed Chief A “Swamp Critter Extraordinaire”?
– Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe
– UK Debt Crisis Is Here – Consumer Spending, Employment and Sterling Fall While Inflation Takes Off
– Protect Your Savings With Gold: ECB Propose End To Deposit Protection
– Internet Shutdowns Show Physical Gold Is Ultimate Protection

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

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The US has filed a legal submission to the WTO as a third party, intervening in a case that China has brought against the European Union. The US rejects China’s argument that under the 2001 agreement, which confirmed China’s WTO status, it would should automatically be considered a “market economy” fifteen years after joining. The dispute could affect both America’s and China’s future within the international body and, as the New York Times contends, “shape the global trading system for decades to come.” It goes without saying that this will only ratchet up the current tensions between the US and China over trade, which has been a cornerstone of Trump’s rhetoric since he launched his election campaign.

Briefly, the US submission sets out the legal arguments explaining why China should not be designated as a market economy, which would give it preferential treatment under existing WTO rules. China is currently designated a “nonmarket economy” which allows the US, EU and other countries to decide whether China is dumping products at unfair prices under a WTO framework. If they decide that China is dumping, countries can add an extra duty to protect domestic manufacturers.

According to the Financial Times, “the Trump administration has opposed China’s bid for recognition as a “market economy” in the World Trade Organization, citing decades of legal precedent and what it sees as signs the country is moving in the opposite direction under Xi Jinping. The US opposition to China’s efforts to be recognised as a market economy in the WTO came in a legal submission due to be released on Thursday in a case brought by Beijing against the EU. Market economy status would make it more difficult for the US to prove anti-dumping cases against Chinese companies at the WTO.”

The move comes as the Trump administration has stepped up trade pressure on Beijing and as Washington faces growing international isolation over what critics fear is a populism-fuelled attack on the global trading system. In the 40-page filing seen by the Financial Times, the US rejected Beijing’s argument that under the 2001 conditions of China’s accession to the WTO it would automatically be considered a market economy 15 years after joining, when it faced anti-dumping cases from fellow members.

In “big picture” terms, the US and EU are arguing that China has failed to meet its part of the 2001 agreement by reducing the Chinese state’s role in the economy, which significantly distorts costs and prices for exports. The US argues that there are precedents for using benchmark pricing from third countries to determine whether products are being dumped.

The US also argued that regardless of those conditions, China remains subject to the same WTO rules as other members and points to the treatment of eastern European countries such as Poland when they joined the precursor of the WTO while still under Communist rule in the 1960s and 1970s. Those rules, the US contends, allow countries to use prices in third countries when dealing with non-market economies to determine whether goods are being exported below cost to gain an unfair advantage. “The evidence is overwhelming that WTO members have not surrendered their longstanding rights…to reject prices or costs that are not determined under market economy conditions,” the US lawyers wrote. US officials say their interpretation is shared by the EU and other countries such as Canada, Japan and Mexico.

When the China-EU is eventually settled, it is likely to serve as a precedent for China’s challenge to the US which the WTO’s panel will hear next. The Trump administration is watching closely since it will be much more difficult to levy anti-dumping duties against Chinese exporters if the EU fails. As the FT notes.

The case in which China is challenging the EU’s refusal to grant it market economy status is seen by the Trump administration as an important test of the WTO’s dispute system. Washington has expressed scepticism at the way the WTO resolves disputes and has even been accused of seeking to sabotage the system. China has been proceeding more slowly with a similar WTO case against the US. The senior US official also expressed frustration with the fact that in arguing against China’s bid to be labelled a market economy, the US had been forced to deal with at least one past ruling by the WTO’s appellate body that Washington deemed inappropriate.

The “past ruling” refers to a 2011 case when the WTO found in favor of China against the EU regarding annti-dumping tariffs on fasteners. Going beyond the boundaries of China’s complaint, the WTO declared that China’s accession protocols “do not contain an open-ended exception that allows WTO members to treat China differently”. The US criticized the seven-member panel for making laws instead of interpreting the existing WTO rules.

A Chinese victory over the EU will strengthen the belief of some officials in the Trump administration that the WTO was not set up to deal with a (largely) centrally-planned economy like China’s and that it will never defend American interests. As the New York Times explains, this includes America’s Trade Representative.

Those officials include Robert E. Lighthizer, the United States trade representative, who in his confirmation hearing before the Senate in June described China’s challenge against Europe and the United States as “the most serious litigation matter we have at the W.T.O. right now.” Mr. Lighthizer said that he had “made it very clear that a bad decision” on China’s status “would be cataclysmic for the W.T.O.”

We should emphasize that WTO disputes aren’t resolved quickly. An initial ruling on the current China-EU dispute may not happen before 2019, with the possibility of a subsequent appeal. The China-EU case will obviously take even longer. Some commentators are speculating that a Chinese victory over the EU could lead to the WTO’s demise. From the New York Times.

Nicholas R. Lardy, a senior fellow at the Peterson Institute for International Economics, said Mr. Lighthizer’s statements called into question whether the United States was looking for a reason to withdraw from the W.T.O.

“I don’t know what the outcome is going to be, but I think there’s a pretty good chance China is going to prevail,” he said. “Maybe this is going to be one of the nominal excuses to taking us out.”

On Wednesday, senior United States officials said that the W.T.O. served a number of purposes, but that they would like to see it work the way members intended it to work.

The NYT alludes to the fact that when the WTO was set up, the underlying assumption was that emerging economies would become more market-driven, like the more developed nations. With China arguably becoming more centralized under Xi, the current “rules of the game”, established by organizations like the WTO, are under threat.

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Daytime television aficionados woke up yesterday to discover that another one of the programming block's most prominent male figures had been felled by the expanding national reckoning with sexual harassment in the workplace. Matt Lauer, for 20 years the co-host of NBC's "Today Show", had a long history of sexually harassing and pursuing relationships with co-workers. NBC said they fired Lauer after an employee filed a complaint about behavior that began back in 2014 at the Sochi Olympics when she was an intern.

Some of his NBC colleagues, including Megyn Kelly, said they'd heard rumors about Lauer, but they "hoped they weren't true."

After being abruptly fired on Wednesday, Lauer has issued his first public statement since the scandal broke.

For the people he has hurt, Lauer says he's "truly sorry". He also pledged to make reflection and soul searching his "full-time job".

 

Here is Matt Lauer’s full statement http://pic.twitter.com/ht1CLzMU6S

— Brian Stelter (@brianstelter) November 30, 2017

Lauer and CBS This Morning Host Charlie Rose have both been forced out of their respective networks after women came forward to accuse them of harassment.

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