Dozens of police from France’s elite RAID counterterrorism unit cordoned off an area of southern Strasbourg on Thursday close to where a gunman who attacked the city’s Christmas market was last seen, according to an AFP reporter at the scene.
French officials have not confirmed that the operation is linked to the Tuesday shooting that left three people dead and 13 injured, including one person rendered brain dead.
A massive manhunt has been underway for the suspected shooter, 29-year-old French citizen Cherif Chekatt, as some 720 police and gendarmes have been looking for him nearly 36 hours after the incident at the popular Christmas market just a few blocks from the European Parliament.
Chekatt, who was reportedly wounded in the atack, is said to have commandeered a taxi to make his escape.
French officials issued an “urgence attentat” (emergency attack) alert, which temporarily expands police powers and requires officers to maintain “a higher degree of vigilance,” according to the BBC.
The first shots rang out in Strasbourg’s city center at around 8 pm local time (1 pm ET). A French prosecutor said the suspect shouted “Allahu Akbar” – ‘God is great’ in Arabic – during the shooting.
Here’s a brief rundown of what we know about the attacker (text courtesy of RT and the Guardian):
The suspect, Cherif Chekatt, 29, was born and raised in Strasbourg
His activities within the local radical Islamic community raised red flags and he had been added to a terror watch list
He was known as a potential security risk
The 29-year-old was sent to jail by a court in the German town of Singen for a violent robbery in Germany. After serving the sentence, Chekatt, a French national with North African roots, was deported back to France in 2017
He has also spent time in prison in France and is believed to have been radicalized in prison. He has been described as “notorious” to police, with a long criminal record
All told, the public prosecutor said the suspect has been convicted 27 times in France, Germany and Switzerland
Police had intended to arrest Chekatt in connection with an armed robbery hours before he allegedly opened fire on the Christmas market – but he was nowhere to be found when they raided his home. Police did, however, discover a grenade
Investigators are still working to establish a motive in the attack
The suspect fired three separate volleys into the crowds at the Christmas market then engaged twice with patrolling soldiers from Opération Sentinelle, a nationwide security operation established after a series of terrorist attacks in Paris in 2015
Back in August, Swiss multi-billion asset manager, GAM Holdings – one of Europe’s largest alternative money managers – announced it has frozen withdrawals at some of its bond funds after a surge in redemptions from clients who sought to withdraw their money following the suspension of the firm’s star manager Tim Haywood, the latest in a series of setbacks that had sent the company’s shares into a tailspin.
Tim Haywood
The troubles started in July, when there was market speculation that a market neutral quant fund GAM had purchased recently, Cantab Capital Partners, was in trouble, and GAM warned of a writedown due to losses at the quant hedge fund. The announcement launched a slide in its shares that only accelerated after the suspension of Haywood, who headed the firm’s second-largest strategy which focused mostly on illiquid investments, and a warning by CEO Alex Friedman that “clients may allocate less money to the firm” because of volatile market conditions.
In retrospect, the CEO’s caution was just a tad optimistic, because between the partial withdrawal freeze, the fund’s ongoing troubles and overall deterioration of the hedge fund industry, on Thursday GAM stock plunged a record 31% when the multi-billion asset manager shocked investors with the forecast of a record loss and news of a mass layoff, while confirming that it was struggling to contain the accelerating outflows prompted by the fund’s ongoing troubles. In total, the stock is down a massive 78% YTD.
GAM said it would post a record loss of 925 million francs ($931 million) for the year compared with a net profit of 123.2 million francs in 2017,after massive outflows forced it to write down the value of its business. As Bloomberg notes, the loss erases eight years of earnings since GAM went public, and is mainly related to a series of goodwill charges at the group and its Cantab quant funds.
Additionally, as it suddenly scrambles to ensure its survival amid dwindling assets and lower fees, the group announced the layoff of 10% of its workers.
While interim CEO David Jacob has been seeking to move beyond the tumult created by the suspension of bond manager Haywood in July and reverse the downward spiral of bad news and client outflows, he has found this next to impossible. Meanwhile, GAM reportedly held informal talks with potential buyers with a view to stabilizing the business, although none emerged and the CEO is now focused on cleaning house.
“Today is about facing our financial reality so that we can move on and build a future for this business,” Jacob said on a conference call. “We are absolutely focused on the structure of this business, looking internally, and making sure this business is positioned for growth in future.”
Furthermore, with its stock having lost much of its value in 2018, GAM also said it will probably suspend its dividend for 2018 to help rebuild capital.
And so, following the suspension of star manager Haywood in July, the risk of staff departures, the possibility of regulatory fines and the ongoing performance challenges which dissuaded any potential buyers, GAM was hit with what Bloomberg called “a perfect storm” of the two worst things that could happen to a hedge fund: even greater losses and soaring client redemptions.
“It is almost unnerving how GAM is once again able to outdo itself with negative reports this year,” said Michael Kunz, an analyst at Zuercher Kantonalbank in Zurich. “There is still no reason to touch this share.”
A main culprit for the latest disappointing performance was hidden in the list of unexpected writedowns in the form of a $62 million charge for a volatile quant hedge fund unit that GAM acquired just two years ago. Cantab Capital Partners, a quant fund which was purchased in 2016, plunged 29% this year through November, wiping out all of last year’s gains, according to investor letters seen by Bloomberg. Another fund is down about 15% in the same time frame.
While Cantab’s writedown is small compared to the loss GAM said it will post for 2018, it is a key business for the firm. Acquired in 2016 as interest in algorithm-driven funds boomed, the unit generated shocking losses as it struggled with market volatility in February and again in recent months. GAM was already forced to take an impairment charge on the unit in the first half according to Bloomberg.
Meanwhile, the shock from Haywood’s suspension has refused to fade amid the firm’s clients, who pulled another 4.2 billion francs in October and November, In total, AUM declined by a further 7 billion francs since the end of September when accounting formarket losses and currency movements, which contributed a further 1.6 billion francs of erosion to the investment management division’s assets. All told, the company expects its performance to deliver just 3 million francs of fees this year, down from 44.1 million francs last year. No wonder its clients continue to head for the exit.
As Bloomberg notes, “losing almost 10% of your assets under management in the space of eight weeks isn’t a good look in an industry where scale is increasingly important.” And while that shrinkage makes a cost-cutting program inevitable – it is safe to say that the 10% layoffs just announced is only the beginning – there’s only so much interim CEO David Jacob can trim without harming the firm’s recovery prospects.
“It’s very difficult to predict flows,” the dejected CEO admitted. “October and November were particularly bad months for the industry in general, with added difficulty for European asset managers.”
Overall, GAM’s assets declined by about $18 billion in the third quarter as Haywood’s funds were liquidated and clients pulled money from other strategies. Additional redemptions came as a result of volatile returns and an investor flight to low-fee products which have squeezed profits both at GAM and elsewhere, forcing many money managers to consolidate.
As Bloomberg concludes, looking at the overnight news that another hedge fund, Geneva-based Philippe Jabre, decided to shut up shop (after his flagship “global balanced fund” plunged more than 40% year-to-date), life isn’t getting any easier for the active fund management crowd. Meanwhile, in the absence of either easier-to-trade markets or a brave suitor, it’s hard to see what can reverse GAM’s decline.
Ironically, Wall Street’s active management crowd – which is rapidly becoming extinct – still thinks that central banks are their best friends. As for who replaces the human traders… Jabre’s parting words said it best:
“Financial markets have significantly evolved over the last decade, driven by new technologies, and the market itself is becoming more difficult to anticipate as traditional participants are imperceptibly replaced by computerized models.”
Unless of course, the computerized model belongs to GAM where it was responsible for a crushing, perhaps terminal, loss.
President Trump has added a special holiday spin to his ongoing conflict with his antagonists in the news media by canceling the annual White House Christmas Party for members of the press, Fox News reported. While the President and First Lady Melania Trump participated in the swank swoiree last year (though they opted out of the tradition of posing for photos), they’ve decided to skip it in 2019.
This isn’t the first time Trump has snubbed the press. Since taking office, he has skipped the White House Correspondents Dinner (and reportedly won’t attend the upcoming gathering in February, even after the WHCD ditched its traditional comedian host in favor of a historian), and has revoked press passes for certain petulant White House correspondents and threatened to revoke the broadcasting licenses belonging to networks whose coverage he has deemed unfair.
Fox News described the annual White House party as a “significant perk” for White House reporters, given the sumptuous buffett offerings (crab legs, lamb chops and “elaborate desserts” were menu fixtures), opportunity to roam around the White House with a guest – and even have one’s photo taken with the president.
Journalists who attended the events, which featured a catered buffet of lamb chops, crab claws and elaborate desserts, got to roam the decorated mansion with a spouse or other family member, a friend or a colleague, adding to the invitation’s allure.
But the biggest fringe-benefit was the picture-taking sessions, in which the president and first lady would patiently pose with guests and briefly chat with them in front of a Christmas tree, with the White House sending out the photos – copies of which were invariably sent home to mom. This would take a couple of hours, with long lines snaking across the building’s first floor. Bill Clinton even posed for pictures with journalists days after he was impeached.
The White House made no announcement that it was dropping the press party. The president and first lady threw such a gathering last December but did not pose for pictures. Trump made a brief appearance with his wife and offered a few welcoming remarks.
Top White House officials, especially the communications staff, routinely circulated at these media parties and often talked shop. Last year, chief of staff John Kelly held forth with reporters for at least 15 minutes, making informal remarks that turned into a mini-press conference.
Though the White House hasn’t issued an official cancellation, that the president has decided to cancel the event is “hardly shocking,” Fox said. Instead of holding the holiday party for all reporters, Trump is expected to invite some favorable commentators (like his favorite Fox News personalities) to other parties being held during the holiday season.
This week the United States Geological Survey (USGS) announced a groundbreaking oil and gas discovery in West Texas’ Permian Basin. According to the organization’s recent press release, a whopping 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids are now believed to lie untapped in the Wolfcamp Shale and overlying Bone Spring Formation area of Texas and New Mexico’s Permian Basin.
Major players in the energy industry already have a significant presence in Wolfcamp and Bone Spring, including Occidental Petroleum Corp. and Pioneer Natural Resources Co. It was already well known and well documented that these fields were remarkably fertile grounds for oil extraction, but the jaw-dropping extent of the new figures released this week by the USGS has made the massive crude and shale reserves of the Permian Basin freshly headline-worthy. The figures in this week’s press release are in fact, in the case of Wolfcamp Shale, more than double the previous resource assessment.
(Click to enlarge)
Source: USGS
The USGS assessed the area more than two years ago in 2016, and has officially determined that it contained the largest estimated quantity of continuous oil in the entire United States.
“Christmas came a few weeks early this year,” said U.S. Secretary of the Interior Ryan Zinke in response to these momentous figures.
“American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation.”
The USGS qualifies the figures of their massive discovery as consisting of undiscovered, technically recoverable resources, which they define as, “those [resources] that are estimated to exist based on geologic knowledge and already established production, while technically recoverable resources are those that can be produced using currently available technology and industry practices. Whether or not it is profitable to produce these resources has not been evaluated.“
The continued productivity and massive untapped resources present in the Permian Basin are particularly vital to the United States energy industry, in a time that most shale wells are in steep decline after years of record booms and cheap crude-flooded markets. Now, in addition to this stunning discovery from the USGS, there is even further hope that there are still additional technically recoverable resources lying in wait, yet to be discovered.
Dr. Jim Reilly, the Director of USGS, a facet of the U.S. Department of Interior, highlighted how remarkable the discovery was in the larger context of the industry.
“In the 1980’s, during my time in the petroleum industry, the Permian and similar mature basins were not considered viable for producing large new recoverable resources. Today, thanks to advances in technology, the Permian Basin continues to impress in terms of resource potential. The results of this most recent assessment and that of the Wolfcamp Formation in the Midland Basin in 2016 are our largest continuous oil and gas assessments ever released.”
Reilly stressed, “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”
Additionally, these discoveries come at a particularly opportune time for West Texas, as a major injection of funding has just been provided toward infrastructure the West Texas area via a federal grant supported by U.S. Senator John Cornyn. The grant, which comes from a program led by the U.S. Department of Transportation’s Better Utilizing Investments to Leverage Development (B.U.I.L.D.) will direct money to infrastructure projects in Winkler, Glasscock and Reagan Counties.
The recent discovery and continued investment in the Permian Basin shows that the industry continues to be bullish in West Texas, and with good reason, despite the volatility of the oil industry as a whole. While other major fields continue to decline in production, the Permian Basin has managed to stay above the fray and certainly shows no sign of slowing.
Fentanyl is so powerful that a few milligrams can be fatal. It would take about 40 pounds of fentanyl to kill everyone in New York City and 1,515 pounds to kill almost all Americans. This killer opioid is so potent, according to Bloomberg it could be used as a “weapon of mass destruction,” adding that national security experts are becoming increasingly alarmed at the prospect of it being used in the next terror attack.
A silent weapon of mass destruction: Fentanyl has already appeared on American streets, becoming the most dangerous drug blamed for sparking a public health crisis that has crushed the productivity of the workforce. American deaths linked to fentanyl increased more than 50% to 29,406 last year, from 19,413 in 2016, according to the National Institute on Drug Abuse (NIDA).
Relatively easy to make, the drug is mass produced in China and Mexico, then pumped into American communities. Additionally, Fentanyl is 50 times more potent than heroin. In its most active form, called carfentanil, a small dose can tranquilize an elephant.
Law enforcement agencies have been warned across the country to handle fentanyl with extreme caution; some officers have almost overdosed after getting the substance on their skin.
Even being near the substance is a significant reason why national security experts sound the alarm at the prospect of it being used in the next terror attack. The drug is “a significant threat to national security,” Michael Morell, the former director of the Central Intelligence Agency under President Obama, wrote last year. “It is a weapon of mass destruction.”
Bloomberg said the use of fentanyl as a biochemical weapon is nothing new. In 2002, 50 terrorists held more than 800 hostages in a crowded theater in Moscow, demanding the withdrawal of Russian forces from Chechnya. After days of failed negotiations, Russian special forces pumped the theater with fentanyl, to incapacitate the attackers, though more than 100 hostages died.
“As a tool of terror, the drug would work best in a closed space,” said Daniel Gerstein, a senior policy researcher at Rand Corp. who served as acting undersecretary in the Department of Homeland Security’s Science and Technology Directorate in the Obama administration. “Open-air release likely wouldn’t be as effective, as the drug could become too diluted,” he said.
“If ground-up fentanyl is placed on everyday objects, people could easily put their fingers in their mouths or rub their eyes and have a deadly reaction,” said Josh Bloom, the American Council on Science and Health official.”
Law enforcement officers and emergency medical officials have not been trained for a biochemical weapons attack involving Fentanyl. Nevertheless, these same agencies can barely keep up with thousands of opioid overdoses across the country on a daily basis.
Overdoses of the drug are extremely hard to reverse with Narcan nasal spray. Narcan is carried by law enforcement officers and paramedics, especially in hard-hit regions by the most recent opioid epidemic. Frequently, people overdosing on fentanyl require multiple doses of Narcan.
The U.S. Biomedical Advanced Research and Development (known as Barda), is developing medical countermeasures to counter the opioid crisis. In September, it signed a $4.6 million contract with Opiant Pharmaceuticals Inc. to produce a reliable single-dose fentanyl antidote.
“Fentanyl-based drugs have been used in conflicts in other countries, so we know it’s possible, and we need to be ready to save lives and protect Americans from potential health security threats,” said Barda Director Rick Bright. He said repeat doses of Narcan, could be challenging to administer in a terror attack.
Because the US is already in a fentanyl crisis, likened to a silent weapon of mass that has decimated communities across the country, US officials are now concerned that the drug could be used in upcoming terror attacks.
2018 has been kind to corporate profit margins. In fact, the margin expansion we’ve seen so far in 2018 is unprecedented in a late cycle economic environment when wages are rising briskly, at least looking back over the last thirty years. What has been different this time around is that the corporate tax rate was lowered from 40% to 25%, allowing profits to expand even in the face of rising wage and variable cost pressures. So the question moving forward is, can companies maintain this level of profitability for another few years, or have we seen the best of it? Based on at least the few factors we highlight below, we think 2019 and beyond will look much different from 2018.
As we can see in the first chart below, there is a strong negative relationship between profit margins (blue line, left axis) and average hourly earnings (red line, right axis, inverted). When average hourly earnings rise, margins invariably fall with a two year lag time. Average hourly earnings have been rising in a strong trend (red line going down) since early 2017, but profitability was able to buck the consequent drop off due to tax reform. However, now that hourly earnings have so clearly broken out to the upside and are rising at the fastest pace since 2007, we have serious doubts about the ability of profit margins to not follow the path of least resistance, which is down.
And we further have reason to expect hourly earnings will continue to rise even more briskly in the year ahead, which of course will add duration and magnitude to the pressure on margins. As the next chart below demonstrates, small business hiring plans lead hourly earnings growth by 15 months. Hiring plans (blue line) remain near an all-time high and in a strongly rising trend. As such, hourly earnings growth (red line) has every reason to follow hiring plans higher for the next year or so.
But it doesn’t stop there. Profit margins also tend to closely follow the unemployment rate. As the unemployment rate falls (especially as it falls to very low levels at the end of an economic expansion), hourly earnings tend to rise, which puts pressure on margins. Here we overlay profit margins (blue line) on top of the unemployment rate with a two year lead (red line). In this chart it’s easy to see the disconnect between the drop off in the unemployment rate since 2016 and profit margins. Part of this is due to structural factors (historically low employment to population ratio, tax cut) and part of it due to cyclical factors (fiscal stimulus). However, with the unemployment rate now at a 50 year low and falling, our confidence is low that either structural or cyclical factors will prevent margins from reverting to their historical relationship with employment.
Finally, we’ll review one element central to the margin question that is unrelated to earnings and employment: import prices. As of now non-petrol import prices are set to rise on the back of tariffs on Chinese imports, and steel & aluminum imports from elsewhere. There is plenty of upside risk to import prices if trade talks with China fail to produce results acceptable to the US. Some of the cost of higher import prices are likely to be shared by corporations, which would pressure margins. As we can see below, there is a clear, although loose leading relationship between import prices and changes in profit margins.
As import prices rise (red line going down) margins tend to contract (blue line going down). Any upside materialization in import prices would simply add to the already strong forces putting downward pressure on profit margins.
President Trump angered senior officials in his Justice Department and Democratic lawmakers this week when he told Reuters reporters that he wouldn’t hesitate to intervene in the prosecution of Huawei CFO Meng Wanzhou – who is at the beginning of what’s expected to be a lengthy extradition process – if it would improve the president’s chances of striking a trade deal with China. His comments elicited indignant replies about Trump turning what should be a purely criminal proceeding into a political bargaining chip.
And in a sign of just how badly Trump upset the federal law enforcement community with his comments, members of the “deep state” community of federal intelligence and law enforcement agents and president Trump’s advisors are engaging in the time-tested practice of trying to walk back controversial comments made by the president by leaking a story to WSJ claiming that the president has been warned that any intervention in the Huawei case would “break with longstanding tradition” and that Meng’s arrest was “out of his hands.”
Despite President Trump’s statement that he might intervene in a criminal case against the chief financial officer of Huawei Technologies Co., such a move would break from longstanding tradition and advisers have warned him that his options are limited, according to people familiar with the matter.
When news broke last week of the arrest of Meng Wanzhou, threatening the president’s trade talks with China, he asked for options, according to one person, and advisers told him the arrest and potential prosecution of Ms. Meng was essentially out of his hands.
The arrest was a Justice Department matter, they said, and the White House should stay out of it for now, this person said. There are no immediate plans to intervene in the matter, officials added.
The timing of this leak is incredibly inconvenient (it follows two possible trade-war victories: China restarting purchases of US soybeans and considering the scrapping of its “Made in China” 2025 plan”). Furthermore, it risks harming the fragile market rally as WSJ’s sources insinuated that Trump’s comment about intervening in May’s detention was purely intended to prop up stocks.
The matter arose when Mr. Trump returned to Washington last week optimistic that his trade talks with Chinese President Xi Jinping had made headway. But stocks didn’t respond as well as he had expected, and on Tuesday Mr. Trump told Reuters he would be willing to intervene in the case against Ms. Meng if it meant securing a strong agreement.
“If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made, which is a very important thing – what’s good for national security – I would certainly intervene if I thought it was necessary,” Mr. Trump said.
“It’s also possible it will be a part of the negotiations,” he added.
And while the story goes on to quote several experts who seemed to suggest that Trump wouldn’t dare interfere with the DOJ (because his administration has always shown such unshakable respect for precedent), it also points out that – constitutionally speaking – there’s nothing stopping Trump from absolving Meng.
Former Justice Department officials said that while Mr. Trump’s intervention in the Meng case would be a departure from the norms against White House involvement in criminal cases, there is nothing in the Constitution that bars it. Such actions are more common – though still unusual – if the action is framed as a national-security matter.
While the circumstances were different, President Obama pushed the Justice Department to drop cases against several alleged Iran-sanctions violators while negotiating a plan for that country to curb its nuclear program.
“In this trade negotiation, the economic and national-security concerns are increasingly indistinguishable, as is the case with so much of what the U.S. and China are in conflict over at the moment,” said Robert D. Williams, executive director of the Paul Tsai China Center at Yale Law School.
It’s hardly surprising that “deep state” figures would try to undermine Trump’s trade talks. But, for now, all they can do is orchestrate damaging leaks. They don’t have the authority to stop Trump from using Meng as a bargaining chip – if that’s what the president believes is in the best interest of the nation.
Time’s up for lawmakers who count on taxpayers to pay for their bad behavior. Members of Congress will have to start covering the costs of sexual harassment and retaliation settlements themselves. An agreement yesterday paved the way for this new policy—the first major change to congressional sexual harassment rules for more than two decades.
Right now, harassment and retaliation settlements “are paid through taxpayer-funded accounts members use to pay for office salaries and expenses,” explains NPR.
Yesterday’s agreement worked out differences between House and Senate versions of the update. The Senate version would have capped how much lawmakers themselves had to pay, while the House version would have set no limits. The compromise version does not set limits in sexual harassment lawsuits but does in cases of court-ordered damages (at $300,000).
“The deal comes after nearly a yearlong standoff between the House and the Senate over member liability and other issues in the bill,” reports NPR. But now “Senate rules committee Chairman Roy Blunt, R-Mo., the chief GOP negotiator in the Senate, says he expects the bill will pass the Senate this week.”
The legislation also edits other aspects of how harassment and retaliation claims against lawmakers will be handled, with an aim to make the process less complicated and more transparent:
The deal provides legal counsel for House staff who file complaints and legal assistance to Senate staff. It would also eliminate a mandatory 30-day “cooling-off period” before someone can file a complaint.
All settlements and awards involving members would be made public at the time of the settlement, and an annual review would be released to the public.
House Minority Leader Nancy Pelosi (D–Calif.) is vowing to pass additional reforms next year.
FREE MINDS
Congressman would “love” to regulate speech. Talk about saying the quiet parts loud: In a TV interview yesterday, Rep. Ted Lieu (D–Calif.) said he “would love to regulate the content of speech,” but is prevented from doing so by the First Amendment.
Rep. Ted Lieu (D-CA): “I would love to be able to regulate the content of speech. The First Amendment prevents me from doing so…” pic.twitter.com/2LYevmIqrT
Facing post-interview criticism, Lieu insisted that his intent had been to defend free speech by explaining that the First Amendment didn’t allow for things House Republicans wanted to do. Maybe, but in the process he positioned himself as someone whose censorious impulses are curbed only by the Constitution.
FREE MARKETS
Good news for hemp, not for much else in new Farm Bill. The legislation cleared Congress yesterday and is on its way to President Donald Trump for approval. “Many of the headlines about the farm bill have focused on the inclusion of a provision that will legalize industrial hemp—a form of cannabis that contains very low levels of tetrahydrocannabinol (THC) found in marijuana. Industrial hemp has a wide range of uses that includes making clothing, as a substitute for plastics, and as a additive to food and drinks,” writesReason‘s Eric Boehm.
But aside from that, Boehm says, this iteration of the perennial farm bill “somehow manages to suck even more than most.” Why?
Among other things, it widens “an agricultural subsidy program that’s already been widely criticized for sending benefits to people who, by most measures, would not count as farmers.” More on that from the R Street Institute’s Caroline Kitchens here.
• Former Donald Trump lawyer Michael Cohen was sentenced yesterday to three years in prison for tax evasion and facilitating illegal campaign contributions. In related news, National Enquirer publisher American Media Inc. admitted to its part in brokering a $150,000 hush payment from Trump and Cohen to model Karen McDougal. The company entered into a non-prosecution agreement with federal prosecutors.
• Trump’s latest immigrant targets are Vietnamese people who came to America as refugees from the Vietnam War and its aftermath:
Exclusive: The Trump administration has decided that Vietnamese migrants who arrived before the establishment of diplomatic ties between the U.S. and Vietnam are subject to standard immigration law—meaning they are all eligible for deportation. https://t.co/njUnvAjm8x
• Senate Majority Leader Mitch McConnell (R–Ky.) will stop blocking the sentencing reform bill known as the FIRST STEP Act from a Senate floor vote. “Under pressure from the White House and a number of his fellow Republicans,” McConnell said he’ll bring the bill “for a vote as early as the end of the week,” reportsReason‘s C.J. Ciaramella.
• As in so many areas, people’s support for mandatory paid-leave policies drops the more they have to pay for it:
74% of Americans Support Federal Paid Leave Program When Costs Not Mentioned—60% Oppose if They Got Smaller Pay Raises in the Future https://t.co/Hf0kfdi2Ya via @CatoInstitute
• Las Vegas is one of a number of cities where opioid-related harm reduction methods are growing:
The first time you come in for needles we give you this card- show this to the police if they question you about carrying clean needles. This will let them know that it’s legal for you to have them! #KnowYourRights#Vegaspic.twitter.com/JhXhsTLSrW
With US stocks set to open higher on Thursday, traders’ blood pressure probably spiked when they saw headlines from an interview with White House trade advisor Peter Navarro hitting the tape (who can forget his infamous comments two week ago when he chided traders and Wall Street banks for pushing for a trade detente, warning that talks with China hadn’t yielded any progress).
Fortunately for equity bulls, stock futures remained in the green as Navarro offered a mix of bullish and bearish commentary during a brief chat with Fox Business’s Maria Bartiromo, where the notorious China hawk discussed the Trump administration’s goals in its negotiations with its trade war rival, and advised traders to “focus on March 1” instead of trying to read too deeply into every report “on the front page of the Wall Street Journal” (comments that, on the surface, would seem to undercut the impetus for yesterday’s rally).
“Investors shouldn’t get hung up on the day to day…Just focus on March 1 when we’ll have a complete offer from China that will be negotiated behind closed doors not on the front pages of the Wall Street Journal.”
However, Navarro’s comments weren’t all bad: He affirmed that China had restarted purchases of US soybeans, and that Beijing is making an effort to ease trade tensions with the US. This shouldn’t come as a surprise, Navarro said, because if China doesn’t buy our soybeans “they get inflation…they get riots in Tiananmen Square.”
Instead of focusing on trade policy, Navarro suggested that traders should focus instead on the Federal Reserve and its plans for raising interest rates.
In terms of the administration’s goals for its trade negotiations, Trump is trying for two objectives: pushing China to improve market access (buy more stuff and let us enter markets without forced IP transfer) and – more importantly – implement ‘structural’ reforms like ending cyberintrusions, state-directed investment and intellectual property theft that have been the target of the Section 301 trade investigations launched by the White House.
Moving on to a discussion of national security issues, Bartiromo moved on to the security topic du jour: China’s motives in arresting two Canadian nationals. Asked whether these arrests constituted retaliation for the arrest of Huawei CFO Meng Wanzhou, Navarro responded that “it is.”
That marks the first time a Western official has directly acknowledged what everybody already suspected.
Time’s up for lawmakers who count on taxpayers to pay for their bad behavior. Members of Congress will have to start covering the costs of sexual harassment and retaliation settlements themselves. An agreement yesterday paved the way for this new policy—the first major change to congressional sexual harassment rules for more than two decades.