Army Major Exposes The US Military’s Empire Of Secrecy

Authored by Army Major Danny Sjruden via TruthDig.com,

“Democracy dies in darkness.” That’s an old saying that The Washington Post recycled as its motto at the dawn of the Trump era.

Truth is, the journalists at the Post don’t know the half of it; nor do they bother to report on the genuine secrecy and increasing lack of transparency in the Department of Defense. Nothing against the Post – neither do any of the other mainstream media outlets.

But it’s true: Right under most Americans’ noses, the military has become more opaque over the last several years. Now, few outlets cover foreign policy with any particular gusto – after all, there’s so much to say about Stormy Daniels or the Brett Kavanaugh drama. But this trend should concern all citizens.

Thing is, what the U.S. military is up to on any given day is done in your name. If civilians are killed, locals alienated or civil liberties restricted, then the global populace, including concerned U.S. citizens, aren’t going to fix blame solely on the armed forces … they’re going to blame you! If for no other reason than this, citizens of an – ostensible – democracy ought to be paying attention. The military is a fierce, potentially brutal instrument, and anyone who cares about liberty ought to watch it closely.

Only that’s getting harder and harder to do in today’s political climate. On one issue after another the U.S. military has recently intensified its secrecy, has classified previously open information and has suppressed any remaining sense of transparency. Don’t just take my word for it: This week a relatively mainstream congressional Democrat, Adam Smith – a ranking member on the House Armed Services Committee—wrote at length on this very topic.

Make no mistake, these trends are long-standing and gradual. So, what follows is not some vacuous liberal attack on President Trump, who remains, for legal purposes, and so long as I remain in uniform, my commander in chief. Still, the time is long past when someone needs to scream from the proverbial mountaintop about America’s expanding empire of secrecy.

Though there are plenty of examples to review, there’s something else to keep in mind: The military isn’t some monolithic monster. It’s far more discreet than that, and so are these trends, so watch closely. Evidence abounds.

Soon after the inauguration, the military—which had long recognized and planned for the existential threat of climate change—received guidance to all but purge the term from its reports. It was to be replaced with more nebulous (and inaccurate) phrases, such as “extreme weather.”

Then there’s the minor matter of the war in Afghanistan and its progress—after, you know, 17-plus years. One of the key benchmarks or metrics for progress has been the success or failure of the Afghan National Security Forces (ANSF). Well, for years the DOD released annual casualty figures for the ANSF, and the trends were alarming. Afghan Security Force casualties are frankly unsustainable—the Taliban are killing more than the government can recruit. The death rates are staggering, numbering 5,500 fatalities in 2015, 6,700 in 2016, and an estimate of “about 10,000” in 2017. The reason we’re not sure about the exact count last year is because that data—admittedly at the request of the Afghan government—has been newly classified. This seems absurd. How can the legislature or the public determine the viability or prognosis of America’s longest war without such key statistics? The short answer is, it can’t. And so, the war drags on. …

What’s more, the military’s historically uneasy relationship with the press has also further chilled. As Rep. Smith reported, and complained about, the DOD had issued edicts to curtail or discourage officers from providing candid assessments on readiness challenges, the control of nuclear weapons and other key appraisals. Only after a prolonged public outcry were these once-common press interactions partially reinstated. Nevertheless, this all points to an alarming trend of apparent furtiveness.

There are other examples to add into the disturbing mix.

The Navy has stopped publicly posting accident reports. Also, at a time of exploding, record defense budgets, once routine public reports on the cost, schedule and performance of expensive weapons systems have, since 2017, been labeled as “For Official Use Only”—which keeps the data from the public through an ever-expanding regime of “over-classification.” Without such public releases, the populace and their elected representatives cannot effectively scrutinize what President (and five-star General) Eisenhower aptly labeled the “dangerous” military-industrial complex. Is that the point? Let’s hope not.

Then there is the internal censorship within the military’s computer networks. Recently, credible, left-leaning websites such as Tom Dispatch and The Intercept have reportedly been blocked on many government computers. The reason provided in the firewall warning message is the existence of “hate and racism” on the two sites. Now, many readers, and even more American citizens, may not like the content of these publications—which is fine—but anyone who has even briefly read anything on these sites can vouch for one salient truth: There is absolutely nothing hateful or racist at Tom Dispatch or The Intercept. These publications are professionally edited and reviewed, and, indeed, are unique in that they focus on long-form analytical essays.

It appears that the only crime of these sites is that they are, indeed, left-leaning. Need proof? Well, guess which genuinely racist, conspiracy-theory-peddling websites are not blocked? You guessed it: Breitbart and InfoWars. Heck, even Facebook and Twitter have taken steps to ban Alex Jones’ InfoWars from their social media sites. So, there’s only one major conclusion to draw: Genuinely shocking and offensive right-leaning publications are just fine; meanwhile, even credible, respected left-leaning sites are apparently a threat. This sort of rank partisanship is disturbing from a purportedly apolitical organization like the DOD.

Now, there are no doubt times when tactical necessity requires secrecy in military operations. I’ve lived at the sharp end of that spear, and do not discount its occasional inexorability. That said, much of the move away from transparency has little to do with combat, so to speak, and more to do with politics. We, the citizenry, trust our military with immense responsibility, but as a supposed democracy, that same military ought to be accountable to Congress and to the public. These days, that seems ever more like a distant fantasy.

This all matters. America has a choice. It can be an empire—or it can be a genuine republic. It may not be both.

via RSS https://ift.tt/2yUEWTM Tyler Durden

Nassim Taleb Explains How The Global Economy Is More Fragile Today Than In 2007

In what was incredibly appropriate timing given the ‘shocktober’ market blowup, Bloomberg News invited “Black Swan” author Nassim Taleb to its set on Halloween for a discussion about the increasingly fragile market ecosystem in which we all reside, and the mounting risks that, Taleb believes, could soon ignite another financial crisis that will be even more severe than what we saw in 2008.

Taleb, dressed up as “black swan man”, wasted little time in explaining how the global economy is becoming increasingly vulnerable to a global debt crisis, how the global quantitative easing did nothing to fix the underlying problem of too much debt – instead it exacerbated it – and how the inevitable reckoning might play out in markets once the long-dreaded “inflection point” finally arrives.

Taleb

Taleb began the interview by describing how the global aggregate debt burden has only climbed since the crisis. And while this debt is no longer dangerously concentrated in a single sector, like, say, the housing market, it doesn’t change the fact that the overall credit risk in the system has been amplified. And while central banks have for years managed to impose metastability in global markets, as they transition from a period of low interest rates back to “neutral”, the destructive forces that they long suppressed will surge back to the surface.

Just like he did in the run-up to the 2008 crash, Taleb isn’t trying to forecast the next crash; he’s only trying to explain how the global economy has become “more fragile today” than it was in 2007.

“You put novocaine on cancer, and what happens? The patient is going to look better, he’s going to feel better, but at some point, you pay a higher price.”

And while this debt is distributed in different ways, “you don’t get a free lunch.” In other words, just because governments and corporate balance sheets have done most of the accumulating, doesn’t mean that this debt is ‘risk-free’.

“Governments, they think they can borrow for free. But they have had to borrow a lot. We have had to borrow more than $1 trillion dollars…and we’re paying some $300 billion in interest.

This has left the US and the rest of the world on the cusp of a dangerous downward spiral.

“You can enter a spiral. In my mind, it’s when governments have to borrow more and more to pay interest – like a Madoff scheme.”

And once that spiral begins, it’s incredibly difficult to arrest the progression.

“The minute you enter that phase, there’s nothing healthy about it from an economic standpoint.”

Take the US federal government for example. Not only has it accumulated another $10 trillion in debt since the crisis, but it also has “hidden liabilities” on its balance sheet that Taleb believes should be factored in to this total. Social security is one hidden liability. Student debt, which the government will almost certainly need to backstop, is another.

“But we’ve accumulated an additional $10 trillion in debt since the crisis. Plus we have hidden liabilities that should count as debt – like social security, you have hidden liabilities when you have to bail out firms, you have hidden liabilities from student debt…you have a lot of things, if you’ve committed to some expenditures, on top of debt you have hidden liabilities that should act like debt.”

And while in the past, debt crises have been confined to emerging-market economies like Argentina, today, major developed economies like Italy are already seeing signs of strain as their populist government is hoping to expand the country’s budget deficit, adding to what is already the third-largest debt-to-GDP burden in the developed world.

“Years ago we had a debt crisis…in 82′ it started in Latin American countries…today it’s hitting the core, it’s no longer the periphery…look at countries like Italy…but it’s getting closer to us.”

In the past, the go-to fix for overwhelming debt has been inflation. But the problem with inflation – as the US experienced in the 1970s, is that, once it gets going, it can be almost impossible to control.

“In the past, the normal solution is inflation…but the minute you start to create inflation it’s an animal, you can’t control it…like we learned in the 1970s…price stability will not be there and traditionally it hasn’t been controllable.”

It wouldn’t take much to trigger a debt crisis in the US. If the Chinese and other ‘regular customers’ of Treasury debt were to step away from the market, who would take their place?

“The Chinese and the overproducing states were regular customers…maybe they’re not going to be there.”

Circling back to central banks and their strategy for averting an all-out financial collapse, Taleb pointed out that QE’s biggest accomplishment was the transfer of credit risk from individuals to the state. And with interest rates now beginning to rise, somebody is going to need to pay the price for all of this leverage.

“In 2008, we transferred debt from individuals to the states…now ten years later, we’re starting to raise rates. We have to raise rates. It’s unhealthy to keep rates at zero. So someone is going to have to pay the price.

Though debt isn’t as concentrated as it once was, the first signs of stress, according to Taleb, are already beginning to surface in real-estate, where stress that has already appeared in the high end of the market will likely spread (a trend that we have anticipated again and again and again).

“The first shoe to drop will be probably real estate. The higher end real estate has already gone down world wide, people have noticed but they’re not talking about it…it will be the higher end real estate first then the rest of the real estate market. One thing that quantitative easing did was increase inequality.”

After real estate “the next shoe to drop” will be the stock market…”though what we’re seeing today is nothing,” Taleb said. Equities cannot maintain their high valuations when interest rates are rising.

“No…what we’re seeing today is nothing…but you cannot maintain high valuations in the stock market with higher interest rates.”

“With higher interest rates we’re going to see some volatility.”

While the risks are arrayed against the average investor, there is one “miracle scenario” that could save the US economy from an extremely painful bout of deleveraging. And that would be a combination of torrid real growth with low price instability – essentially a turbocharging of the “goldlilocks” economic conditions that enabled the ever-higher highs during 2017 and 2018.

“What we need, the thing that would save us, miraculously, is real growth without debt…real growth maybe miraculously will take us out…or maybe some type of inflation that maybe wouldn’t cause so much price instability…but we’ve never seen that. Unless we have these two, we’re doomed.”

While anybody who has expressed concerns about the blowout in the US budget deficit under Trump should find Taleb’s arguments compelling, a quick glance at the S&P 500’s annualized returns over the past decade might be enough to quash these doubts. After all, why should investors listen to the doomsayers when so many crisis-era superstars, who built their reputations on the rightward bets they made during the runup to the crash, have not only failed to match their returns from 2007 and 2008, but have seen their winnings dissipate entirely in the years since?

Because, as has been demonstrated by at least one fund, the above assumption isn’t entirely accurate. Mark Spitznagel, CIO at Universa Investments, which counts Taleb as an advisor, revealed back in September that funds betting on the “end of the world” can, in fact, produce alpha and tack on a few points to a fund’s CAGR even during bull markets if the balance of allocations, and the hedging strategies employed, are calibrated in just the right way.

Universa

As he revealed in a letter to investors obtained by the WSJ back in September, Spitznagel has managed to outperform the S&P 500 by keeping the bulk of his money invested in a passive benchmark-tracker, while using a tiny sliver of his portfolio (just 3.3%) to buy up out-of-the-money put options when they’re looking cheap. This has allowed Spitznagel to book staggering profits during a handful of blowups (like the August 2015 ETF flash crash, where this strategy returned 20% in a single day).

Watch the full interview below:

via RSS https://ift.tt/2Dn3SHA Tyler Durden

China Stocks, Yuan Tumble As PMI Plunges To 28-Month Lows

Despite additional easing and a 403.5 billion yuan 1-year maturity MLF operation, yuan is tumbling along with China (and Hong Kong stocks) following an ugly Caixin Composite PMI print (the weakest since June 2016).

New orders tumbled to 50.3, the weakest since Feb 2016…

 

Offshore yuan is extending Friday’s losses from the exuberant Trump trade headline squeeze…

China stocks are giving back Friday’s bounce…

And Hang Seng is plunging…

The PBOC skipped open market operations once again but conducted 403.5b yuan of MLF operations (matching the total maturity of MLF at CNY403.5 billion). President Xi just started speaking and took multiple jabs at President Trump:

Xi reiterated support for multilateral trade, globalization, and some stock standard language on China’s role preserving the global trading order.

Xi says globalization is an irreversible “historic trend”, and every nation should make their effort in it.

“The will of history will keep rolling forward no matter what.”

It does feel like his opening remarks are less of an olive branch to the US trade hawks and more of an admonishment of their outlook. Of course, China critics would counter that Xi has said all of this before.

 

 

via RSS https://ift.tt/2Qr7E5m Tyler Durden

With New U.S. Anti-Iran Policy In Iraq And Syria, The Fig Leaf Of Fighting ISIS Falls

Authored by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

During the International Institute for Strategic Studies 14th dialogue in the Bahraini Capital Manama, Brett McGurk, the US envoy for the global coalition to defeat the Islamic State group (ISIS), took leave of his designated function by expressing unusual solicitude for Syria when he said it is “necessary for the Iran-Backed militias to leave Syria to ensure a stable and independent country”. The US presidential special envoy also said he is looking forward to promoting “mutual US-Iraq interests and for the Iraqis to strengthen their own interests and sovereignty”.

McGurk, who was directly involved in the formation of the Iraqi leadership (Speaker, President and Prime Minister) in the last few months, didn’t manage to return his favorite candidate Haidar Abadi to power and failed to prevent Faleh al-Fayyad from coming to power. According to private sources in Baghdad, al-Fayyad will be nominated as Interior Minister, a position that requires coordination with US forces in Iraq. McGurk clashed with Fayyad on several occasions when he unsuccessfully sought to limit the activity of Iran and Hezbollah in supporting the formation of the new Iraqi leadership in Baghdad.

The US is mustering all its diplomacy against Iran in preparation for unilateral implementation of full sanctions against the Islamic Republic, expected on the fourth of November. This is why McGurk is attacking Iran in Syria and Iraq

ISIS posting in front of US-made vehicles captured from the Kurds in Baghuz and Sousah. via jihadi social media

Nevertheless, the new Iraqi government is reversing Abadi’s concession to the US: the new prime minister Adel Abdel Mahdi has ordered Hashd al-Shaabi (The Popular Mobilization Forces, PMF) to deploy its forces along the Syrian-Iraqi borders. Abadi kept the PMF away from borders where the US forces are deployed and where they occupy part of Syrian territory and the al-Tanf crossing between the Levant and Mesopotamia.

Washington wrongly believes its forces can limit the influence and movement of the Iranian and allied forces in Syria by keeping the Marines in the country. Iranian influence is well established in Syria today, following its unlimited support to the government of Damascus. Even in Iraq, the US presence failed to limit Iran’s leverage on the new government.

US concern is indeed justified: Washington and its allies have lost and failed to “change the regime” in Damascus despite seven long years of war. The Americans used all possible tools and pressure to no avail. US leadership used the “chemical attacks” excuse to bomb the Syrian army without creating any change on the ground. It has used also the card of the Syrian refugees, trying to block their voluntary return. It failed to keep the Jordanian-Syrian crossing at Naseeb closed to prevent Syria from recovering part of its economy. It is also keeping al-Tanf under occupation to stop the flow of hundreds of millions of dollars into the pockets of Damascus from the considerable trade between Iraq and Syria.

The US establishment did not hesitate to support al-Qaeda in Idlib indirectly – after its direct military and training support to al-Qaeda throughout the years of war – by launching a serious warning to Assad in case of any attack against rural Idlib and Latakia where jihadists are based, and Turkey has failed to dislodge them. Moreover, Washington is using the Kurds of al-Hasaka province as human shields to protect the US forces occupying the province. And last but not least, the US is using the UN to try and alter the Syrian constitution, a move only the Syrian parliament can do.

US Presidential special envoy for Iraq and Syria Brett McGurk, via Ahval

All the above didn’t stop McGurk from calling for the withdrawal of Iranian-backed forces “to ensure a stable and independent Syria”. The US envoy forgot that the US forces were never invited to Syria and are considered an occupation force. Moreover, it is Damascus who asked for Iran’s support against the jihadists when the US and its allies (Saudi Arabia and Turkey) allowed a free passage to these hoping to create a fail state. Therefore, it is not up to Washington – nor to Moscow, as Russian officials have reiterated – to seek the withdrawal of any non-Syrian forces from the Levant.

During the seven years of war, the US never ever aimed for the stability of Syria nor did it work in harmony with the “interests of the people”. Νo Syrian institution gave the right and freedom to the US to speak on its behalf. US forces are blocking al-Tanf crossing in order to impoverish the Syrian population. The US has protected ISIS in the north-east enclave without destroying the jihadists. Not only that, ISIS attacked, imprisoned and killed dozens of the Kurds acting as US proxies in north-east Syria who allowed ISIS to move in and occupy areas around Hajin. When units of the Syria army looking to combat ISIS moved hundreds of meters east of the Euphrates into an ISIS-controlled area a few months ago, the US destroyed them, thereby supporting ISIS’s ongoing presence in the region.

The US establishment is in denial. It has not come to terms with its defeat in Iraq and Syria. Today, it is moving unilaterally against Iran to implement further sanctions that can certainly harm the Iranian economy. Nevertheless, the Americans will not be able to uproot the Iranian ideology that has taken root in Iraq and Syria precisely because of the failed US foreign policy and regime change strategy that was meant to protect its hegemony and dominance in the Middle East.

via RSS https://ift.tt/2zpWM0w Tyler Durden

Papadopoulos Details Alleged Entrapment Scheme By Undercover Deep State Agents

George Papadopoulos – a central figure and self-admitted dupe in the Obama administration’s targeted spying on the Trump campaign, gave a wide-ranging interview to Dan Bongino on Friday, detailing what he claims to have been a setup by deep state operatives across the world in order to ultimately infiltrate the Trump campaign.

 

Reviewing events

In March 2016, Maltese professor Joseph Mifsud told Papadopoulos that Russia had “dirt” on Hillary Clinton – a claim which Papadopoulos repeated in May 2016 by Australian diplomat Alexander Downer in a London bar. Of note, former FBI Assistant Director of counterintelligence, Bill Priestap, reportedly traveled to London directly before Downer met with Papadopoulos, while former FBI agent Peter Strzok met with Downer in London months later directly before the DOJ launched their investigation into the Trump campaign. 

The alleged admission about Clinton’s emails officially sparked the Obama administration’s counterintelligence operation on Trump on July 31, 2016 – dubbed Operation Crossfire Hurricane. In September 2016, the FBI would send spy Stefan Halper to further probe Papadopoulos on the Clinton email allegation, and – according to his interview with Dan Bongino, Papadoplous says Halper angrily accused him of working with Russia before storming out of a meeting. 

Halper essentially began interrogating Papadopoulos, saying that it’s “obviously in your interest to be working with the Russians” and to “hack emails.” “You’re complicit with Russia in this, isn’t that right George” Halper told him. Halper also inquired about Hillary’s hacked emails, insinuating that Papadopoulos possessed them. Papadopoulos denied knowing anything about this and asked to be left alone. –Bongino.com

There are two schools of thought on Papadopoulos and his relationship with Mifsud – the first link in the chain regarding the Clinton email rumor. Notably, Mifsud claimed last November to be a member of the Clinton Foundation, and has donated to the charity.

The first theory is that Mifsud and Papadopoulos are Russian agents, and that Papadopoulos was used to try and establish a backchannel to Putin. Papadopoulos admits he tried to set up a Trump-Putin meeting – which was flatly rejected by the Trump campaign. Papadopoulos, however, claims the Putin connection was a woman Mifsud introduced him to claiming to be Putin’s niece, who was present at a March 24, 2016 meeting.

The second theory regarding Mifsud is that he was a deep state plant working with the FBI; convincing Papadopoulos that he could arrange a meeting with members of the Russian government and then seeding Papadopoulos with the Clinton email rumor. From there, as the theory goes, the “deep state” attempted to pump Papadopoulos for information and set up a case against him – beginning with Alexander Downer and the “drunken” confession in London. 

Papadopoulos told Bongino that he wasn’t drunk during his meeting with Downer, and that he was being recorded. Papadopoulos noted during the Bongino interview that transcripts of his meetings with Mifsud and Dower reportedly exist – which he says proves that he was set up. According to Papadopoulos, Mifsud’s lawyer said that he’s not a Russian asset and was instead working for Western intelligence. 

Papadopoulos pleaded guilty to lying the FBI about his interactions with Mifsud, and was sentenced to 14 days in federal prison and a $9,500 fine. 

$10,000 cash

Papadopoulos also told Bongino about $10,000 in cash that he was given in an Israel hotel room in July 2017 – which he claims was another attempt to set him up. He says that he believes the bills were marked, and is looking for a way to bring the cash into the United States for Congressional investigators to analyze. The cash is currently with his attorney in Greece. 

“I’m actually trying to bring that money back somehow so that Congress can investigate it because I am 100 percent sure those are marked bills, and to see who was actually running this operation against me,” Papadopoulos gold Bongino.

“I am more than happy to deliver the $10,000 in cash I received, as part of what I believe was a sting operation to frame me in summer 2017, to your committee to examine for marked bills. This is in the interest of me being fully transparent,” he wrote last week on Twitter to  North Carolina Rep. Mark Meadows and Texas Rep. John Ratcliffe. 

The two Republicans are members of a congressional task force investigating the FBI’s investigation into possible collusion between the Trump campaign and Russia. The task force interviewed Papadopoulos on Oct. 25.

Papadopoulos acknowledged in his interview with Bongino that his claims about his encounters with an Israeli-American businessman named Charles Tawil were “an incredible, insane story.”

“But it’s true,” he asserted.

Papadopoulos told Bongino the he believes that Tawil “was working on behalf of Western intelligence to entrap me.”

Papadopoulos does not have direct evidence that Tawil was working on behalf of a Western government when they met in March and July 2017. Instead, Papadopoulos is speculating based on what he says is the peculiar circumstances of his encounters with Tawil as well as his meetings with at least one known FBI informant. –Daily Caller

Afraid he might be killed if he didn’t accept the money, Papadopoulos took the funds and later contacted Tawil – who allegedly told Papadopoulos he didn’t want it back. From there, Papadopoulos gave the cash to his attorney in Greece. Upon his return to the United States several days later, Papadopoulos was arrested on July 28, 2017 at Dulles International Airport in Washington D.C., by agents who he believes were looking for the cash. 

And then when Papadopoulos landed back in America, he was arrested at Dulles International Airport on July 27th. Strangely, he wasn’t shown the warrant for his arrest when arrested, and didn’t know the reason why until the next day. The $10,000 that Tawil paid Papadopoulos in cash is interesting in this context, as it would be the exact amount of money one would be required to declare at customs. Papadopoulos didn’t recall if he was arrested before or after he filled out a customs slip (but didn’t have the money on him). –Bongino.com

At minimum, one should set aside an hour for the Bongino-Papadopoulos interview if only to hear his version of events. 

Perhaps the biggest mystery of all is how George was able to end up with such a hot Italian (not Russian) wife: 

via RSS https://ift.tt/2yQu0Xx Tyler Durden

What Companies Said In Q3 Earnings Calls About The 3 Sources Of Margin Pressure In 2019

With the S&P500 75% through Q3 earnings season, which has been generally disappointing despite another quarter of stellar earnings growth (EPS up 26% Y/Y) as investors have focused instead on lackluster revenue growth amid concerns about “peak earnings”, US companies have yet to report any shocks or major adverse impact to profitability from higher tariffs. Yet while US corporations say they have so far been successful in blunting the effects from escalating tariffs with China through price increases or changes to their supply chains, they warn that the picture will worsen next year.

This is not to say that tariffs have had no impact: they have slowed timber and grain shipments, raised the cost of clothes hangers and heavy-equipment materials, and compressed margins for chip- and toolmakers, among other effects the WSJ notes. “The negative impact is pretty widespread across the S&P 500,” said Binky Chadha, chief U.S. equity and global strategist at Deutsche Bank. Still, he added, the overall impact is rather modest so far.

There is a reason for that: in a note from Goldman’s chief equity strategist David Kostin, he writes that the actual impact of tariffs on 3Q results has been minimal because implementation of the 10% levy on $200 billion of imports from China only started on Sept 24. However, the tariff rate is slated to jump to 25% starting in January 2019 and an additional $267 billion of imports may be subjected to a 25% tariff.

In this context, and reminding Goldman clients that in his 3Q earnings preview, Kostin encouraged investors to focus on how firms would address three mounting margin pressures in 2019: (1) increased tariff rates, (2) a tight labor market, and (3) rising debt costs. Here is what firms have said in response to those 3 points:

Some executives insisted earnings of their firms would be largely unaffected by the tariffs.

  • After assessing the “impact from the different sets of tariffs imposed by the US and China,” Qorvo (QRVO) reported that all existing tariffs were “immaterial on [their] business.”
  • Similarly, eBay (EBAY) suggested that “most of the tariffs have been consumer goods and we haven’t seen very much.”
  • Rollins (ROL) was “fortunate to be in an industry that is minimally impacted by trade talks or tariffs.”

Most managers expect to mitigate the effects of tariffs through price increases.

  • Illinois Tool Works (ITW) commented that “for 2019, we estimate the impact of tariffs at around $60 million, which is based on all announced tariffs and tariff increases as well as any carry over from 2018. And we continue to expect that our pricing actions will continue to offset raw material cost inflation, including tariff impact on a dollar-for-dollar basis.”
  • United Technologies (UTX) said “We have been able to more than offset the tariff impact through pricing this year. I would expect pricing will also have to increase next year if these tariffs remain in place.”
  • Mohawk Industries (MHK) “continued to execute additional pricing across most product categories to offset ongoing price inflationary pressures.” Still, Mohawk CEO Jeffrey Lorberbaum urged patience and said in the short term that higher prices could drive customers to buy other products unaffected by the tariffs. “It won’t happen like a light switch,” Mr. Lorberbaum said.
  • Other companies may alleviate the increased costs by shifting their supply chains. W.W. Grainger (GWW) noted that “With respect to quantifying the impact, product sourced directly from China represents about 20% of the US segment’s cost of good sold … Applying tariff rates of 25%, we estimate our cost will increase by about 2% for the US segment … we are confident that we can find alternative supply and/or price to cover the expected tariff increases.” The company indicated that production could shift “either to India, to Mexico, or to the US, depending on the nature of the product.”
  • Along those same lines, C.H. Robinson (CHRW) found that “many shippers had existing strategies to migrate more of their sourcing to lower-cost regions,” such as Vietnam, India, or elsewhere in Asia.

Some companies acknowledge the tariffs are slowing demand for products shipped to China from the U.S.

  • According to timber company Weyerhaeuser, log exports to China declined with the country’s 5% tariffs, imposed Sept. 24, despite solid construction activity there.
  • Railroad giant Union Pacific said in October that the season’s typical grain-shipment increase hadn’t materialized, due in part to Chinese tariffs.
  • Caterpillar said sales haven’t suffered, and its manufacturing operations in both countries reduce its need for imports. Still, additional material costs are running toward the lower end of the company’s earlier forecast of between $100 million and $200 million in the second half of this year, company officials said in September
  • Micron Technology which sells computer memory and storage, said tariffs could reduce its first-quarter gross margin by 0.5 to 1 percentage point, contributing to projections for a year-over-year decline of at least 1.4 percentage points.
  • Workplace uniform supplier Cintas said it is paying more for clothes hangers because of the tariffs, while other direct effects are limited. “It is something that’s starting to creep in,” Chief Financial Officer J. Michael Hansen told investors in September.
  • Stanley Black & Decker said tariffs, with commodity-price and currency shifts, squeezed operating margins. Two-thirds of the toolmaker’s imports from China are subject to tariffs, primarily finished goods such as power-tool accessories, vacuums and some hand tools.

Meanwhile S&P 500 wage costs are being pressured by the tight labor market. Friday’s jobs report showed a gain of 250K, a steady unemployment rate of 3.7%, and a 3.1% year/year rise in average hourly earnings. In the most recent NFIB survey of small businesses, 30% of firms selected either Quality of Labor (22%) or Quantity of Labor (8%) as their single most important problem.  As a result, more firms acknowledge increased competition for labor.

  • Robert Half International (RHI) explained that “as the labor market tightens, it’s just logical that you have to pay more.”
  • Darden Restaurants (DRI) observed that “Restaurant labor was unfavorable 70 basis points, despite continued productivity gains and sales leverage. The increase was driven by hourly wage inflation of approximately 5%.”
  • J.B. Hunt Transport (JBHT) noted that “Probably in the last 12 to 18 months, our driver wages are up about 10% or a little bit more than that.” On the other hand, some firms minimized the risk of profit squeeze from labor inflation.
  • Procter & Gamble (PG) plans to boost productivity using ”tools available today to us and others that offer unprecedented opportunities in terms of automation and digitization to improve cost both on the manufacturing and on the office floor.” Higher interest rates will also put pressure on margins. GS economics forecasts that 10-year rates will gradually climb to 3.4% by the end of 2019. Although net leverage has increased sharply in recent years and stands near its post-crisis high, interest coverage ratios have remained healthy due to the low level of interest rates. From a strategic perspective, we believe firms should consider reducing leverage in 2019.

Earnings transcripts also reveal managers are preparing for further tightening of financial conditions. Companies reported building financial strength and reducing risk through debt refinancing and maturity extensions.

  • Ventas (VTR) reported that “aggressive efforts to reduce debt, extend and stagger maturity profile, and significantly reduce medium-term refinancing risk has already paid off.”
  • Noble Energy (NBL) “paid down substantial debt, enhancing financial flexibility.”
  • Firms across a variety of industries noted they were undertaking efforts to pay down debt. Examples include Zimmer Biomet  Holdings (ZBH), Eastman Chemical (EMN), Digital Realty (DLR), and Alaska Air (ALK).

Finally, in an notable twist, a handful of companies say they have turned tariffs to their advantage. Costco accelerated some imports ahead of Jan. 1 and reduced commitments to buy other products. But the warehouse-store chain is also pitching customers merchandise such as nuts and pork, exports of which have slowed in the face of China’s retaliatory tariffs.

“Something like one third of the U.S. pork…is exported to China,” Costco CFO Richard Galanti told investors on an early October conference call. “That’s changed, and therefore pork prices are way down. There’s great savings. That’s creating some opportunities.”

via RSS https://ift.tt/2zspxK5 Tyler Durden

Mortgage Bonds Suffer Worst Month In 2 Years As ‘Marginal Buyer’ Fed Pulls Out

Mortgage bond investors are about to become reacquainted with ‘moral hazard’ and its inevitable consequences.

As the Federal Reserve continues to pull out of US Treasurys and mortgage bonds (the Fed entered its “peak” monthly unwind phase in Q4, where it will allow up to $30 billion and $20 billion in MBS to roll off and on Oct. 31 its balance sheet declined by more than $33 billion, the largest one-week drop since the start of QE), holders of housing bonds who had grown accustomed to steady returns in a rigged market endured their biggest shellacking in 2 years, as Bloomberg pointed out in a story published Friday.

And while at least one prominent bond investor pointed out that Bloomberg’s warnings about a “bloodbath” in MBS may have been exaggerated…

…the story’s central premise that the retreat of the bond market’s ‘marginal buyer’ is creating headaches for complacent bond bulls is certainly valid, as we’ve said before. It only takes a quick glance at the 10-year-yield vs. the Fed’s balance sheet expansion/unwind to spot the dangers that could lie ahead.

Fed

Now, as the Fed-generated tidal wave of liquidity slows to a trickle and the central bank looks to unwind some $1.7 trillion in MBS holdings, “savvy” bond bulls are stuck asking themselves: who the hell is going to step in and stop the bleeding once liquidity dries up further and mortgage bonds continue to fall?

The answer isn’t immediately clear.

Kevin Jackson, a managing director on Wells Fargo’s mortgage trading desk recently told Bloomberg:

“When the Fed announced they were going to buy mortgages, we tightened a lot and rolls performed really well – now the reverse is happening. One should expect widening.”

Indeed, last month, MBS returns lagged Treasurys by the widest margin since November 2016, when rates surged after Donald Trump’s surprise election victory.

And, as BBG reminds us, by pulling out of the market, the Fed is leaving investors to grapple with a scenario that hasn’t existed for 4 decades. For the first time since then, there will not be any government entity, including Fannie Mae and Freddie Mac, to help provide liquidity for mortgage backed securities. The market is going to be completely on its own, and this is coming at a time when rates are rising, which will likely slow down buyers and push spreads wider/

Fed

Investors, scrambling to look for help somewhere, are reportedly hoping that banks and money managers can help fill the role that the Fed is leaving from. However, there are quirky little challenges (such as the demand not actually existing) for banks and money managers to take on the task.

Ankur Mehta, the head of MBS research at Citigroup Inc., put the problem in clearer terms: “It is not obvious to us where that incremental demand for mortgages comes from. Domestic banks already earn an attractive return on reserves, while money managers are facing headwinds due to outflows and their existing MBS overweights.”

In a sign of just how much these bonds could fall, this is happening at a time when mortgages “are still looking rich” according to Mehta. He noted this in comparison to levels and spreads prior to the 2008 crisis, when the Fed was not in the market. The Fannie Mae 30 year current coupon spread over a blend of 5 year and 10 year treasuries ended October at its widest points since June 2017.

BBG

Of course, this outcome has been very thoroughly telegraphed. And we all know that this “solution” will only lead to larger problems, as it forces our economy to swallow this bitter medicine. If there’s a silver lining to be found, it’s that, if the Fed’s recent track record is any indication, they’ll be back in the market soon enough, blowing an even bigger bubble that future generations of Fed chairmen will need to grapple with.

via RSS https://ift.tt/2Fg2w3h Tyler Durden

Here’s China’s Massive Plan To Retool The Web

Via PopSci.com,

The most ambitious project of mass control is the country’s “social credit” system. All Chinese citizens will receive a numerical score reflecting their “trustworthiness.”

The following is adapted from LikeWar by P. W. Singer and Emerson T. Brooking, a book by two defense experts – one of which is the founder of the Eastern Arsenal blog at Popular Science – about how the Internet has become a new kind of battleground, following a new set of rules that we all need to learn.

“Across the Great Wall we can reach every corner in the world.”


So read the first email ever sent from the People’s Republic of China, zipping 4,500 miles from Beijing to Berlin. The year was 1987. Chinese scientists celebrated as their ancient nation officially joined the new global internet.
 As the Internet evolved from a place for scientists to a place for all netizens, its use in China gradually grew—then exploded. In 1996, there were just 40,000 people online in China; by 1999, there were 4 million. In 2008, China passed the United States in number of active internet users: 253 million. Today, that figure has tripled again to nearly 800 million (over a quarter of all the world’s people online).

It was also clear from the beginning that for the citizens of the People’s Republic of China, the internet would not be – could not be – the freewheeling, crypto-libertarian paradise pitched by its American inventors. The country’s modern history is defined by two critical periods: a century’s worth of embarrassment, invasion, and exploitation by outside nations, and a subsequent series of revolutions that unleashed a blend of communism and Chinese nationalism. For these reasons, Chinese authorities treasure harmony above all else. Harmony lies at the heart of China’s meteoric rise and remains the underlying political doctrine of the Chinese Communist Party (CCP), described by former president Hu Jintao as the creation of a “harmonious society.” Dissent, on the other hand, is viewed as only harmful to the nation, leaving it again vulnerable to the machinations of foreign powers.

Controlling ideas online has thus always been viewed as a vital, even natural, duty of the Chinese state. Unity must be maintained; harmful ideas must be stamped out. Yuan Zhifa, a former senior government propagandist, described this philosophy in 2007: “The things of the world must have cadence,” he explained. His choice of words was important. Subtly different from “censorship,” “cadence” means managing the “correct guidance of public opinion.”

From the beginning, the CCP made sure that the reins of the internet would stay in government hands. In 1993, when the network began to be seen as something potentially important, officials banned all international connections that did not pass through a handful of state-run telecommunications companies. The Ministry of Public Security was soon tasked with blocking the transmission of all “subversive” or “obscene” information, working hand-in-hand with network administrators. In contrast to the chaotic web of international connections emerging in the rest of the globe, the Chinese internet became a closed system. Although Chinese internet users could build their own websites and freely communicate with other users inside China, only a few closely scrutinized strands of cable connected them to the wider world. Far from surmounting the Great Wall, the “Chinese internet” had become shaped by a new barrier: the Great Firewall.

CitizenLab researchers demonstrate China’s WeChat filter – Citizen Lab

Chinese authorities also sought to control information within the nation. In 1998, China formally launched its Golden Shield Project, a feat of digital engineering on a par with mighty physical creations like the Three Gorges Dam. The intent was to transform the Chinese internet into the largest surveillance network in history—a database with records of every citizen, an army of censors and internet police, and automated systems to track and control every piece of information transmitted over the web. The project cost billions of dollars and employed tens of thousands of workers. Its development continues to this day. Notably, the design and construction of some of the key components of this internal internet were outsourced to American companies—particularly Sun Microsystems and Cisco—which provided the experience gained from building vast, closed networks for major businesses.

The most prominent part of the Golden Shield Project is its system of keyword filtering. Should a word or phrase be added to the list of banned terms, it effectively ceases to be. Web searches won’t find prohibited results; messages with banned words will simply fail to reach the intended recipient. As the list of banned terms updates in real time, events that happen on the rest of the internet simply never occur inside China.

In 2016, for instance, the so-called “Panama Papers” were dumped online and quickly propelled to virality around the globe. The documents contained 2.6 terabytes of once-secret information on offshore bank accounts used by global elites to hide their money—a powerful instance of the internet’s radical transparency in action. Among the disclosures were records showing that the families of eight senior CCP leaders, including the brother-in-law of President Xi Jinping, were funneling tens of millions of dollars out of China through offshore shell companies.

The information in all its details was available for anyone online – unless you lived in China. As soon as the news broke, an urgent “Delete Report” was dispatched by the central State Council Internet Information Office. “Find and delete reprinted reports on the Panama Papers,” the order read. “Do not follow up on related content, no exceptions. If material from foreign media attacking China is found on any website, it will be dealt with severely.” With that, the Panama Papers and the information in them was rendered inaccessible to all Chinese netizens. For a time, the entire nation of Panama briefly disappeared from search results in China, until censors modulated the ban to delete material only if the post contained “Panama” and leaders’ names or related terms like “offshore.”

So ubiquitous is the filter that it has spawned a wave of surreal wordplay to try to get around it. For years, Chinese internet users referred to “censorship” as “harmony”—a coy reference to Hu Jintao’s “harmonious society.” To censor a term, they’d say, was to “harmonize” it. Eventually, the censors caught on and banned the use of the word “harmony.” As it happens, however, the Chinese word for “harmony” sounds similar to the word for “river crab.” When a word had been censored, savvy Chinese internet users then took to calling it “river crab’d.” And, as social media has become more visual, the back-and-forth expanded to image blocks. In 2017, the lovable bear Winnie-the-Pooh was disappeared from the Chinese internet. Censors figured out “Pooh” was a reference to President Xi, as he walks with a similar waddle.


History itself (or rather people’s knowledge and awareness of it) can also be changed through this filtering, known as the “cleanse the web” policy. Billions of old internet postings have been wiped from existence, targeting anything from the past that fails to conform to the regime’s “harmonious” history. Momentous events like the 1989 Tiananmen Square protests have been erased through elimination of nearly 300 “dangerous” words and phrases. Baidu Baike, China’s equivalent of Wikipedia, turns up only two responses to a search on “1989”: “the number between 1988 and 1990” and “the name of a computer virus.” The result is a collective amnesia: an entire generation ignorant of key moments in the past and unable to search out more information if they ever do become aware.

Yet, even stronger programs of control lurk on the horizon. In the restive Muslim-minority region of Xinjiang, residents have been forced to install the Jingwang (web-cleansing) app on their smartphones. The app not only allows their messages to be tracked or blocked, but it also comes with a remote-control feature, allowing authorities direct access to residents’ phones and home networks. To ensure that people are installing these “electronic handcuffs,” the police have set up roving checkpoints in the streets to inspect people’s phones for the app.

The most ambitious project of mass control is China’s “social credit” system. Unveiled in 2015, the vision document for the system explains how it will create an “upward, charitable, sincere and mutually helpful social atmosphere”—one characterized by unwavering loyalty to the state. To accomplish this goal, all Chinese citizens will receive a numerical score reflecting their “trustworthiness … in all facets of life, from business deals to social behavior.”

Much like a traditional financial credit score, each citizen’s “social credit” is calculated by compiling vast quantities of personal information and computing a single “trustworthiness” score, which measures, essentially, someone’s usefulness to society. This is possible thanks to Chinese citizens’ near-universal reliance on mobile services like WeChat, in which social networking, chatting, consumer reviews, money transfers, and everyday tasks such as ordering a taxi or food delivery are all handled by one application. In the process, users reveal a staggering amount about themselves—their conversations, friends, reading lists, travel, spending habits, and so forth. These bits of data can form the basis of sweeping moral judgments. Buying too many video games, a program director explained, might suggest idleness and lower a person’s social credit score. On the other hand, regularly buying diapers might suggest recent parenthood, a strong indication of social value. And, of course, one’s political proclivities also play a role. The more “positive” one’s online contributions to China’s cohesion, the better one’s score will be. By contrast, a person who voices dissent online “breaks social trust,” thus lowering their score.

In a particularly Orwellian twist, the system’s planning document also explains that the “new system will reward those who report acts of breach of trust.” That is, if you report others for bad behavior, your score goes up. Your score also depends on the scores of your friends and family. If they aren’t positive enough, you get penalized for their negativity, thus motivating everyone to shape the behavior of the members of their social network.

What gives the trustworthiness score its power, however, are the rewards and risks, both real and perceived, that underpin it. Slated for deployment throughout China in 2020, the scoring system is already used in job application evaluations as well as doling out micro-rewards, like free phone charging at coffee shops for people with good scores. If your score is too low, however, you can lose access to anything from reserved beds on overnight trains to welfare benefits. The score has even been woven into China’s largest online matchmaking service. Value in the eyes of the Chinese government thus will also shape citizens’ romantic and reproductive prospects.

Luckily, no other nation has enjoyed China’s level of success in subordinating the internet to the will of the state, because of both its head start and its massive scale of investment. But other nations are certainly jealous. The governments of Thailand, Vietnam, Zimbabwe, and Cuba have all reportedly explored establishing a Chinese-style internet of their own. Russian president Vladimir Putin has even gone so far as to sign a pact calling for experienced Chinese censors to instruct Russian engineers on building advanced web control mechanisms.

Just as U.S. tech companies once helped China erect its Great Firewall, so China has begun to export its hard-won censorship lessons to the rest of the world.

via RSS https://ift.tt/2QeoSD4 Tyler Durden

3 Million Midterm Ads Analyzed; Here’s A Map Of What Matters Where

With midterm election polls opening in less than 48 hours, candidates across the country are in their final push to convince Americans to vote for them – using sophisticated advertising schemes to appeal to their constituents which vary greatly depending on geographic location across the country.

To that end, Bloomberg‘s Demetrios Pogkas and David Ingold used data from the Nielsen Company to analyze over 3 million election ads for 2018 congressional and gubernatorial races across 210 local television markets in order to get a sense of what matters to whom, and where.

Just because a topic isn’t the top issue in a market doesn’t mean it’s not being discussed. Social issues for example, which include things such as civil rights and abortion, may be the most-mentioned topic in only six markets, but it’s mentioned at least once in 95 percent of all markets.

But not all topics are a staple of campaign pitches nationwide. An issue such as public safety—which includes ads about threats posed by migrants seeking asylum at the southern border, for instance—is a top topic in many of the markets in Texas, but mentioned far less elsewhere. –Bloomberg

Let’s drill down by issue:

Health Care and Prescription Drugs

Over 1.2 million ads have mentioned health care, while almost 75% of those ads are from Democrats. The message from the left is essentially “a vote for Democrats is a vote to save or expand protections under the Affordable Care Act.” Republican healthcare ads, meanwhile, revolve around promises to protect preexisting conditions.

Taxes

While Democrats are campaigning on health care, Republicans are focusing on taxes – with over 570,000 ads mentioning the GOP reforms – nearly double the number of tax-related ads run by Democrats.

Despite passing a major tax cut earlier this year, Republican ads in October that mentioned taxes were seven times more likely to be negative than positive. Republicans instead have used the topic to tell voters that Democrats will raise taxes next year if they gain control of the House and Senate. –Bloomberg

For or Against Trump

Pro-Trump advertising has been most prevalent in Tennessee – where the President has made several campaign stops to support Republican Senate candidate Marsha Blackburn. Pro-Trump ads rank fifth overall for Republicans, which have highlighted taxes, immigration, health care and the economy.

Anti-Trump messages have been strongest in California and Washington D.C.

Immigration

Around 20% of GOP ads have mentioned immigration this year, however it’s only a top issue in a few markets – particularly along the US-Mexico border.

Economy

Republicans have surprisingly shied away from mentioning the booming economy and lowest unemployment since 1961 – except for Louisiana, where one incumbent House Republican has made it a top issue.

Ads by party

The places with the most ads aren’t always the largest markets. Orlando, Las Vegas and Tampa have seen more campaign ads than anywhere else in the country due to a perfect storm of competitive House, Senate and governor’s races all occurring simultaneously.

And the party split has been nearly even too: About 54 percent of ads have been funded by Democrats. Areas where both parties have campaigned heavily are signs of competitive races, with the final decision ultimately coming down to whose message resonated most. –Bloomberg

Via Bloomberg:

Source: Kantar Media/CMAG data analysed by Bloomberg. Data as of Oct. 29, 2018.

Notes: Included are all U.S. political ads aired on local network affiliates from Jan. 1 through Oct. 29, 2018 sponsored by or targeted at House, Senate or gubernatorial candidates, according to Kantar Media/CMAG. Excluded are ads aired on national cable networks, and ads that were not coded for a specific campaign issue.

Market boundaries follow Nielsen’s Designated Market Areas. Manchester, N.H. is included in the Boston market. Some counties may contain two media markets. In these cases, market boundaries are mapped evenly within a county.

Each topic mentioned in an ad is counted as an instance of that issue. Similar topics are sometimes grouped into broader categories, like health care, and are coded as one mention, even if multiple sub-issues are discussed. To determine the percentage of ads on a given topic in each market, the total number of topics mentioned in ads in that market is used as a baseline.

 

via RSS https://ift.tt/2JFENrq Tyler Durden

“The Big Short’s” Steve Eisman Is Shorting UK Banks, Expecting A Hard Brexit

Amid fresh reports that Theresa May may have a “secret” Brexit deal up her sleeve, one that would finally allow her to secure a deal that could win parliamentary approval thanks to a major concession from the European Union, one famous trader isn’t buying it.

Speaking at a conference in Dubai on Sunday, “The Big Short’s” Steve Eisman said that he is shorting two U.K. banks on expectations of a hard Brexit. Eisman said that the U.K. is one of the biggest risks Eisman is watching, and while he declined to name the two banks he is shorting, he said that he expects the U.K. government to agree its exit from the bloc, but that Parliament is likely to reject the deal after that, Bloomberg reported.

“I’m shorting two stocks in the U.K., but I’ve got a screen of about 50, and I might short all 50 if I think Jeremy Corbyn is going to be prime minister,” Eisman said. “Corbyn’s a Trotskyite. Now I know my Trotskyites well and I know you don’t want to be invested in the U.K. if a Trotskyite is prime minister.”

While Eisman didn’t hint which banks he’s targeting, Bloomberg notes citing Markit data that Metro Bank and CYBG are the most shorted financials in the FTSE 350 Index. Metro has 7.9% of its outstanding shares shorted, double the ratio at CYBG. Eisman also said that he’s still shorting Tesla, despite the carmaker’s impressive surge since reporting strong results.

British and European negotiators remain locked in talks to break the deadlock over how the UK will exit the EU with just five months left before the deadline. The uncertainty prompted more than 70 business leaders, from lastminute.com founder Martha Lane Fox and former J. Sainsbury Plc chief Justin King, to sign a letter arguing that both the government’s current plans, and a no-deal Brexit, would be bad for companies and jobs.

It is possible that Eishman may get burned on his short: over the weekend, the Sunday Times report that Theresa May has achieved concessions from the EU to keep the UK in a customs union and assembled a detailed “secret” Brexit plan that, among other details, would kill off the controversial Northern Ireland “backstop” that had become the main obstacle to further negotiations.

Working in secret, May has reportedly developed a detailed, 50-page plan for a Brexit treaty that will allow the entire UK to remain within the EU customs union – that is, until a final deal can be hammered out during the transitionary period, which Brexiteers fear could mean “forever.”

As part of the new “secret” deal, May has effectively scrapped most of her controversial four-page “Chequers plan”, and replaced most provisions governing the single market and customs union with an agreement to hash out a “Future Economic Partnership” – essentially an open-ended agreement to continue negotiations that leaves open the possibility of reaching a free trade deal like the one enjoyed by Canada, a provision that is bound to appease at least some of the Brexiteers. The word on the street in Westminster is that part of the plan “could have been written by Jacob Rees-Mogg,” the leader of the hardline Eurosceptics, which, if true, would signify a major victory for May.

In response to the Sunday Times article, which has been known to report false optimistic news on prior occasions, May’s spokesman said the report was “speculation.”

via RSS https://ift.tt/2zrU1vI Tyler Durden