As Morgan Stanley’s wealth management clients grumble about being saddled with allotments in the Uber IPO that lost value immediately after the company’s market debut on Friday, the ride-hailing giant was on track to open lower for a second day on Monday after an embarrassing 7% drop on Friday, making it more difficult for Uber’s underwriters to blame the drop on difficult market conditions.
Uber shares dropped below $40 in pre-market trading on Monday, more than $5 below their IPO price of $45 (which was already near the low end of its revised price range). Though the main US benchmarks looked set to open lower on Monday, Uber still closed deep in the red on Friday despite a late-day rebound in the broader market.
via ZeroHedge News http://bit.ly/2E1zwc7 Tyler Durden
S&P futures and global equities fell on Monday after their worst week of 2019, as hopes of an imminent U.S.-China trade deal were crushed with sentiment souring significantly over the weekend, as neither side showed a willingness to budge, raising fears of a fresh round of tit-for-tat tariffs. The dollar surged, the yuan tumbled and Treasuries rallied as traders walked in to the following sea of red.
With the barbs now coming fast and furious as Trump tweets out a new provocation to Beijing literally every several minutes, most recently warning that “China should not retaliate-will only get worse!” while China said that it will “never surrender” to external pressure, though stopped short of announcing how Beijing will retaliate to the latest round of US tariffs, the US and China appeared at a deadlock over trade negotiations as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any “bitter fruit” that harmed its interests.
“Looks like we are just slowly ebbing away. More tweets from Trump over the weekend stoking the fires for a trade war,” said John Woolfitt at London-based Atlantic Markets.
As a result, contracts on the S&P 500 slid 1.3%, erasing much of Friday’s miraculous rebound, and pointing to a big drop at the U.S. open.
In Europe, the Stoxx Europe 600 index quickly slumped negative as almost every industry sector retreated. With no date scheduled for a resumption in bilateral Sino-U.S. talks, shares dropped in all principal Asian markets except Hong Kong, which was closed for a holiday.
Earlier Asian stocks also dropped sharply as Chinese shares tumbled, with the benchmark Shanghai Composite and the blue-chip CSI 300 shedding 1.2% and 1.8%, respectively, while Hong Kong’s financial markets were closed for a holiday. Japan’s Nikkei average sank as much as 1.0% to hit its lowest level since March 28, before closing down 0.7%.
The trade war hit emerging market stocks, which were down 0.7 percent, hovering near January lows. JPMorgan said it had reduced its emerging markets risk for the second time in as many months on Monday following the set-back in U.S-China trade talks.
“How far this escalates is what the market is really worried about as we haven’t really got full details of what the U.S. will do and how China will retaliate. The important thing is what’s the impact on growth, and that’s what the market is really fearing,” said Justin Oneukwusi, portfolio manager at Legal & General Investment Management.
“The risk of a full-blown trade war has materially increased, even though both sides seem to still want a trade deal and talks are expected to continue,” UBS economist Tao Wang said.
Making matters worse, on Monday Washington is expected to announce it is raising tariffs on all remaining imports from China, worth approximately $300 billion. “Our base case is for limited progress and Chinese retaliation,” said Michael Hanson, head of global macro strategy at TD Securities.
In FX, the big outlier was the offshore Chinese yuan, which fell to its lowest levels in more than four months at 6.90 to the dollar.
While most other major currencies were relatively calm with the euro steady at $1.1230, the yen led gains across the Group-of-10, climbing along with Treasuries, as haven bids mounted on trade war concerns. A gauge of dollar strength rallied for the first time in three days while the pound was little changed as the Brexit deadlock continued with the U.K. Prime Minister planning to re-open discussions with the European Union
In digital currencies, Bitcoin continued to move higher, holding onto gains over weekend. Bitcoin jumped more than 10% on Saturday and is up more than 90% YTD, rising to a nine-month high of $7,585.00 on Sunday.
In rates, 10-year Treasury yields fell to the lowest level since late March; The U.S. Treasury bond yield curve between three-month and 10-year rates inverted on Monday for the second time in a week, with the 10-year yield now standing 0.0025% above the shorter-maturity bill. Viewed as a classic warning signal of a looming U.S. recession, the curve inverted last Thursday for the first time since March,.
In commodities, oil futures rose on increasing concerns about supply disruptions in the crucial producing region of the Middle East where Saudi Arabia said two of its tankers were “sabotaged.” Brent crude futures rose 0.5% to $71.00 a barrel and U.S. West Texas Intermediate futures were up marginally at $61.73 per barrel. Trade-sensitive commodities including soybeans and cotton fell. Most base metals retreated as traders reassessed the demand outlook given the threats to global economic growth. Other raw materials were also caught in the crossfire of the trade impasse, with China’s cotton futures plunging by the daily limit.
There are no economic events due today, with Fed Vice Chair Clarida and Dallas Fed President Kaplan set to speak; STERIS, StoneCo, Take-Two, and Tencent Music are among companies reporting earnings.
Latest US-China Trade War updates:
President Trump suggested that he thinks China felt they were being beaten so badly on negotiations that they may as well wait around for next election, but warned that a deal will become far worse for them if it is negotiated during his second term and that it would be wise for China to act now but he loves collecting big tariffs.
White House economic adviser Kudlow said China has invited US Treasury Secretary Mnuchin and Trade representative Lighthizer to China to continue trade talks, while he also suggested that it is US importers are paying for the tariffs instead of China and that both sides will lose in the trade war.
US and China trade negotiators were said to be at odds on 3 major issues including disagreement on removal of all remaining tariffs, differences in wording of the agreement and with China said to view US import targets as unrealistic. In related news, Chinese press accused the US of obstructing progress on bilateral trade talks.
China’s Mofcom Spokesman Geng states that there is currently no information on a US President Trump and Chinese President Xi meeting at the upcoming G20 summit.
China Global Times Editor believes that China has not released countermeasures immediately as China may be drafting a plan that will have precise effects, making sure it hits the US while minimizing damage to itself.
China Auto Industry Association says US auto tariffs will have a large impact on Chinese auto parts exports.
Market Snapshot
S&P 500 futures down 1.3% to 2,851.00
STOXX Europe 600 down 0.6% to 374.98
MXAP down 0.7% to 155.94
MXAPJ down 0.8% to 514.38
Nikkei down 0.7% to 21,191.28
Topix down 0.5% to 1,541.14
Hang Seng Index up 0.8% to 28,550.24
Shanghai Composite down 1.2% to 2,903.71
Sensex down 0.02% to 37,456.47
Australia S&P/ASX 200 down 0.2% to 6,297.59
Kospi down 1.4% to 2,079.01
German 10Y yield fell 0.9 bps to -0.054%
Euro down 0.02% to $1.1231
Italian 10Y yield unchanged at 2.309%
Spanish 10Y yield fell 0.3 bps to 0.975%
Brent futures up 1.4% to $71.57/bbl
Gold spot down 0.2% to $1,283.32
U.S. Dollar Index little changed at 97.31
Top Overnight News
The emerging stalemate in U.S.-China trade negotiations grew out of an earlier deadlock over how and when to remove existing American tariffs that provoked Beijing to threaten to walk away from talks, highlighting what people briefed on the discussions say are widening fundamental differences between the two sides
A measure of Japan’s current economic health indicates there is a good chance the economy is in recession, a development that could heighten debate over whether Prime Minister Shinzo Abe will postpone a planned sales tax hike for a third time
U.S. equity futures slid, extending the stock market’s biggest weekly decline of the year, as a weekend of back-and-forth trade squabbling kept investors glued to news screens as earnings season wound down
Theresa May is promising to reopen Brexit talks with the European Union to try to breathe life back into negotiations with the opposition Labour Party and take the U.K. out of the bloc by the summe
Italian Prime Minister Giuseppe Conte suspects Matteo Salvini may be preparing to bring down the populist coalition, Corriere della Sera reported Sunday. Silvio Berlusconi, a potential partner for Salvini if he wants to form a more conventional center-right government, told La Stampa that his party is ready for another election
The White House is considering conservative economist Judy Shelton to fill one of the two vacancies on the Federal Reserve Board of Governors that President Donald Trump has struggled to fill
Japanese Prime Minister Shinzo Abe’s support surged after the country’s first imperial abdication and accession in two centuries — a highly watched event fanning national pride that boosted his standing ahead of a July upper house election
Asian stocks and US equity futures began the week negative as focus remained on the US-China trade tensions with US President Trump unwilling to backdown in a Twitter tirade during the weekend in which he alleged that China loves ‘ripping off’ America. Furthermore, President Trump suggested China may have felt they were being beaten so badly on negotiations that it may want to wait around for the next election but warned that a deal will be far worse for them if it is negotiated during his second term, while he also recently stated that the process has begun to place additional tariffs at 25% on the remaining USD 325bln of Chinese goods. ASX 200 (-0.2%) and Nikkei 225 (-0.7%) were negative with Australia led lower by weakness in financials after index top-component CBA reported a decline in Q3 profits and as ANZ Bank shares traded ex-dividend, while Tokyo sentiment was weighed by currency flows and a deluge of earnings, with the “Sell in May…” idiom holding true as the Japanese benchmark sits on losses of around 1000 points month to date. Elsewhere, the Shanghai Comp. (-1.2%) was also weaker amid the absence of Hong Kong participants and due to the ongoing trade dispute with negotiators said to be at odds on 3 major issues including disagreement on removal of all remaining tariffs as well as the wording of a deal and with China said to view US import targets as unrealistic, while the PBoC also skipped open market operations again which resulted to a daily net liquidity drain of CNY 20bln. Finally, 10yr JGBs were relatively flat with only minimal support seen despite the negative risk tone and BoJ’s presence in the market for a total JPY 750bln in 1yr-5yr JGBs.
Top Asian News
Japan’s ‘Worsening’ Economy Could Fuel More Talk of Tax Delay
Lira Tumbles as Turkey Inc. Rushes to Buy Dollars After Rally
Malaysia Bubble Tea Chain Said to Seek $72 Million IPO Next Year
MSCI Adds China Stocks Just When Foreigners Don’t Want Them
European equities are following on from the downbeat Asia-Pac trade [Eurostoxx 50 -0.5%] as focus remains on US-China trade developments after the two sides failed to reach a deal on Friday. Indices are experiencing broad-based losses, although the FTSE 100 (Unch) is outperforming as heavyweights BP (+1.2%) and Shell (+1.5%) rose to the top of the index amid price action in energy markets. Sectors are mostly in the red with the Energy sector (+1.0%) clearly outperforming whilst defensive sectors are buoyed by the uninspiring risk sentiment. Auto names are largely subdued by the trade spats with the US, ahead of the potential US auto import tariffs by May 18, although some desks expect a delay to the deadline given US’ standstill with China. Meanwhile, Renault (-1.4%) shares took a dive after Le Monde reported that the Co. are said to have discovered a failing of their anti-pollution system. Elsewhere, Thyssenkrupp (-6.3%) rests at the foot of the Stoxx 600 after calling off their deal with Tata Steel, which sparked some concerns amongst Indian shareholders and UK unions. Back to trade, JPM acknowledges that there is no visibility in regards to the next trade move, with sentiment to potentially worsen before getting better, although the analysts to expect a compromise as the most probable outcome as the sides have too much to lose heading into the upcoming US election and the 70yr anniversary of the People’s Republic of China. “In a sense, the more markets suffer near term, the more are they likely to bounce, as key actors are forced to deescalate” JPM concludes.
Top European News
Vodafone Falls Most Since January on Dividend Cut Speculation
Barclays Hires Ex-Nomura Banker Brown for Equity Capital Markets
Casino Plunges to 8-Month Low After Kepler Downgrades to Reduce
Vodacom Updates Profit Target on Growth From African Purchase
In FX, JPY/CHF/USD – Aversion is spreading if not quite running rife or reaching FTQ proportions and the catalyst is the failure to find a compromise on trade after the latest round of talks between the US and China. Hence, the Yen and Franc are outperforming, with the former eyeing 109.60 vs the Dollar and strong resistance at 109.50 that has held twice, while Usd/Chf is now under 1.0100 from 1.0200+ recently and Eur/Chf is testing bids below the 200 DMA (1.1341). However, the DXY is also deriving underlying support ahead of 97.000 and a key chart level just above the big figure that has been tested on a couple of occasions (circa 97.150) as the Greenback registers gains against riskier/high beta G10, and the Greenback rallies more broadly vs EMs.
GBP/EUR – Minor exceptions to the major rule as Cable retains its grip of 1.3000, albeit only just as UK PM May faces yet another tough week of Brexit negotiations and prepares for a showdown on Thursday with the 1922 committee that is urging her to set a resignation date. Similarly, the single currency remains above 1.1200 within a relatively tight 1.1224-45 range with the base coinciding with the 30 DMA and the headline pair also flanked by decent expiry options (1.4 bn between 1.1190-1.1200 and 1.3 bn from 1.1240 to 1.1250).
AUD/NZD/CAD/NOK/SEK – All on the receiving end of investor angst and with the Aussie and Norwegian Krona also undermined by data in the form of housing finance, investment lending and mortgages, and Q1 GDP as Norway’s mainland growth slowed more than expected and contracted in total SA terms. Aud/Usd is back below 0.7000 as a result and not far from 2019 lows (stripping out the early January ‘flash crash’ trough), while Eur/Nok has touched 9.8500 as Eur/Sek hit 10.8500 and decade highs. Elsewhere, the Kiwi and Loonie are also suffering from safe-haven positioning and sub-0.6600 and 1.3400 respectively, with the latter also wary of expiry interest in decent size, albeit not close to current levels (1 bn at the 1.3300 strike and 1.1 bn at 1.3550).
EM – As noted above, more depreciation across the region with the Cny ending well down from PBoC midpoint fix levels at 6.8700+ vs 6.7954 and Cnh through late December 2018 lows at 6.9070. Meanwhile, not even a narrower than forecast March current account deficit has saved the Try from another decline through 6.0000 and brief fall to 6.1000 having rebounded towards the 21 DMA (5.9409) at one stage and on the back of heavy intervention (4.5 bn touted).
Bank of Thailand says the nation may be added to US currency manipulators watch list but adds they have not intervened in THB for advantage in trade with US. (Newswires)
In commodities, WTI (+1.4%) and Brent (+1.5%) prices have been on the rise as the complex sets aside trade woes and focus on a number of supply-side developments. 1) Over the weekend, two Saudi oil tankers were attacked off the coast of UAE, on the way to the Persian Gulf to load oil. The UAE stated that the tankers have been damaged although the OPEC producer did not mention the precise nature of the incident. The Saudi Energy Minister condemned the attacks, which comes at a time of heightened tensions in the area following US deploying carriers, bombers and defence missiles to the region amid friction with Iran, although nobody has claimed responsibility for the attack thus far. 2) State-side, the Houston shipping channel is closed following the collision between a tanker and two oil barges which resulted in a spill of 9k barrel of reformate (intermediate stage in the production of gasoline). Cleaning is underway, although the shipping disruptions caused are likely to cause a backlog on imports and exports. 3) Sources noted that Russia produced 11.16mln of oil thus far in May, down from April’s 11.23mln, whilst the oil intake by the Transneft pipeline fell 6% vs. April’s average volumes. As a reminder, this week sees the release of the OPEC and IEA Monthly Oil Reports followed by the JMMC meeting over the weekend as the cartel is seemingly shifting towards extending supply curbs past June, however, a revaluation may be needed given the rising threats on the supply-side. Elsewhere, precious metals are largely unchanged as a firm Dollar caps gains for gold (-0.2%) and silver (-0.4%). Meanwhile, copper (-1.0%) prices are heavily pressured by the overall risk-averse tone and demand disruptions from the US-China trade war, whilst iron ore futures benefitted as steelmakers replenish its stock of the base metal. Saudi Energy Minister Al Falih condemned an attack on 2 Saudi vessels that were sabotaged on Sunday morning near UAE.
US Event Calendar
May 13-May 15: Mortgage Delinquencies, prior 4.06%
May 13-May 15: MBA Mortgage Foreclosures, prior 0.95%
9:05am: Fed’s Rosengren, Clarida Makes Remarks at Fed Listens Event
1:20pm: Fed’s Kaplan Speaks At Community Forum In Brownsville, Texas
DB’s Jim Reid concludes the overnight wrap
Happy Monday. My weekend was defined by 83 seconds. The length of time I actually thought Liverpool might win the league after 29 long years. Alas no, as Man City only took that long to equalise after going behind. It was all downhill from then. The rest of the weekend was mostly spent trying to ensure the children and dog didn’t ruin our new house. When you’ve spent a fortune on a nice new kitchen it’s a bit stressful to have children ride around it at speed on toy bikes and cars bumping into woodwork as they corner bends. Not to mention bolognese sauce being flung onto expensive tiles.
Global markets had some dents and chips taken out of it last week and without stating the obvious it’s all about US/China trade negotiations at the moment. We’ll recap later how last Sunday’s sudden and dramatic escalation impacted various global asset prices on the week but first let’s make a few observations and see where we are with the latest news.
What has blindsided me over the last week was that I genuinely thought Mr Trump’s rhetoric had completely changed since the huge sell off in Q4 last year. It seemed to me that his 2019 language was all about getting a deal and maybe that he was starting to prepare for the 2020 election campaign and to ensure the economy wasn’t at risk from a major trade war. Clearly I misread the signs but it could still be a brief escalation before a deal over the next few weeks/months. However the stakes have been raised enough for it to be tough for either side to back down imminently so one wouldn’t expect the news flow to rapidly improve in the near term. It doesn’t help that the Chinese economy has stabilised and that the S&P 500 is back close to record highs even with a small sell off last week. So there is no immediate need for anyone to backtrack. As such, markets will likely struggle for a while although last week they did try to rally back a few times as softer trade headlines and rhetoric brought us back from larger falls.
So where do we stand as we go to print? Mr Trump tweeted about trade several times over the weekend. Yesterday, he said “we are right where we want to be with China” and that the Chinese “LOVE ripping off America!” This is probably not the tone from a man who is about to backtrack on his threats. On Saturday, he had said that it would be wise for China to get a trade deal now or risk worse terms after his re-election in 2020. This hints at evidence that maybe the Chinese are thinking that playing a medium-term game of gambling on a new President in 2020 would be preferable to signing up to something now. The rhetoric from China also continues to pin blame on the US for trade talks failure with the People’s Daily (Communist Party’s mouthpiece) saying in a front-page commentary over the weekend that the US should take full responsibility for the setbacks because it went back on its word and imposed more levies while adding, “that cast a shadow on the trade talks and directly led to the fruitless outcome”. Elsewhere, the Xinhua news agency carried an article on Sunday touting that the escalating tariffs will do more damage to American companies while hurting both sides and later carried a commentary saying that China can overcome any difficulties as long as it remains confident while listing a number of reasons for the nation’s confidence, including strong leadership, a superior socialism system and a united people. Again not words of a nation looking for a ladder to climb down.
In the meantime, the USTR Robert Lighthizer has said that the Trump administration will today release details of its plans for tariffs on an additional $300 billion of imports from China. All these weekend comments came after Friday’s trade talks ended without much sign of progress. China Vice Premier Liu He said to domestic media after the talks that the U.S. must remove all extra tariffs, agree targets for purchases of Chinese goods in line with real demand, and that the text of any deal needs to be “balanced” to ensure the “dignity” of both nations.
The next step is to see what retaliation China implements. DB’s Zhiwei Zheng believes they will increase tariffs on USD60bn of US exports to China. It announced this list of goods last year but the tariff was not fully implemented. Zhiwei’s key question after that is whether the US will move to impose tariffs on the remaining around USD300bn of Chinese exports (Lighthizer overnight suggests we’ll learn more on this later). As our Chinese team have previously discussed in their notes they are significantly different from the other Chinese exports, as they include mostly consumer goods such as smartphones, computers, and textiles, and US consumers are more dependent on China for these goods. So there are ways this could get more painful, especially as these goods are well integrated into the global supply chain.
If you’re looking for good news it is that the two sides seem to be continuing talks and that Mr Trump’s personal relationship with President Xi Jinping seems to still be strong on the surface and the former is always keen to praise the latter in public pronouncements. Yesterday Larry Kudlow, Trump’s top economic adviser, told Fox News that Trump would meet with Chinese President Xi Jinping during the G20 meeting in late June.
Asia markets are heading lower this morning with the Nikkei (-0.52%), Shanghai Comp (-0.99%) and Kospi (-1.00%) all down. 10yr USTs are 3.2bps lower. EM Fx is trading weak again this morning with the onshore yuan -0.45% to 6.8570, the weakest since January. Elsewhere, futures on the S&P 500 are down -1.02%. In commodities, CBT Soybean futures are down -0.90% and corn futures are down -0.71%. Markets in Hong Kong are closed for a holiday.
The moves in Asia follow a difficult week. However on Friday US equities staged another impressive rebound throughout the afternoon session. The catalyst was an improvement in the tone of rhetoric from the negotiators on both sides of the trade dispute. Secretary Mnuchin called the talks “constructive,” while Liu He said that they went “fairly well.” The two parties agreed to hold additional talks in Beijing in the near future, but did not formalise any plans. This is slightly out of date now but the S&P 500 having traded down as much as -1.58% retraced all of this to close +0.37% higher as the situation evolved. That rebound of +1.98% off the lows was the third instance of a +1% rally off the lows last week, the best since the second week of January. The S&P 500 nevertheless ended the week -2.18% lower on the week, its worst week since December. The DOW and NASDAQ ended the week -2.12% and -3.03% lower (+0.44% and +0.08% Friday) respectively. Banks and semiconductors underperformed, falling -3.19% and -5.85% (-0.74% and +0.14% Friday) respectively. Utility stocks outperformed, falling only -0.71% on the week (+1.73% Friday). In Europe, the STOXX 600 ended down -3.39% (-0.32% Friday), with European banks underperforming even more sharply, down -6.34% (+0.12% Friday).
Two-year treasury yields ended the week -6.7bps (+0.8bps Friday) while 10-year yields fell -5.8bps (+2.5bps Friday). Bund yields fell back into negative territory after dipping -7.0bps on the week (+0.2bps Friday). The dollar index weakened -0.20% (-0.05% Friday), but much of that was driven by discrete euro strength, which rallied +0.31% (+0.16% Friday). EM currencies were the bigger losers, shedding -0.57% (+0.25% Friday) with the Chinese yuan leading losses after retreating -1.60% (-0.11% Friday).
Moving on to other news and Brexit stories are staring to build again. Press reports suggest that the UK is mulling reopening Brexit talks with the EU with the PM’s office saying over the weekend that the government will explore with the EU this week how to rewrite the outline political agreement on future customs ties. A meeting is scheduled today involving Labour officials and the senior government negotiating team including May’s de facto deputy David Lidington and her chief of staff Gavin Barwell where they are due to bring together all the work and proposals from the past month of talks. Elsewhere, latest opinion polls in the UK are indicating that support for Nigel Farage’s Brexit Party is soaring with the Opinium survey for the Observer newspaper indicating that the Brexit Party would take 34% of the vote in the May 23 European Parliament elections, compared with 21% for Labour and just 11% for the Conservatives. A reminder that through most of Q1 the Conservatives were polling just under 40%. They’ve been hit hardest by the failure to deliver Brexit.
In other news, Italian daily Corriere della Sera reported yesterday that Prime Minister Giuseppe Conte is suspecting that deputy premier Matteo Salvini may be preparing to bring down the populist coalition as he is trying to put immigration back at the top of the political agenda with a grab for control over shipping in Italian waters. The report went on to add that Conte fears the move is a “landmine” that will give Salvini an excuse to end the populist coalition within weeks and as a result is mulling delaying a cabinet meeting at which the above would be discussed to defuse the situation.
As for this week, other than that the latest trade developments, data highlights include China’s key activity indicators, US retail sales and Germany Q1 GDP. There’s also plenty of Fedspeak to look forward to as well as comments from various ECB speakers. Wednesday is the key day with the April activity indicators due in China which includes industrial production, retail sales and fixed asset investment. At the time of writing the consensus is for that data to show that China’s economy has continued to stabilise at the start of Q2. The focus in Europe on Wednesday then turns to the Q1 GDP reports for Germany and the Euro Area. The preliminary forecast for Germany is for a +0.4% qoq reading with weakness in manufacturing offset by strength in services and also a boost from construction. Remember Germany only narrowly avoided a technical recession at the end of last year. The reading for the Euro Area will be a second look with the preliminary reading showing a better-than-expected +0.4% qoq. It’s expected that the second reading will show a similar print. Finally the US session ends with the April retail sales report which is expected to show a +0.4% mom core print and +0.3% mom control group reading. We’ll also get the April industrial production print in the US on Wednesday where the consensus is for a +0.1% mom rise. The rest of the week’s data (and central bank speakers) will be in the day by day week ahead at the end.
Before we go through this day by day guide it’s worth touching on Friday’s slightly softer than expected US CPI report which saw front-end treasury yields fall a few basis points. Core CPI came in at 0.1% mom (vs 0.2% expected), 2.1% yoy (in-line), with the 3m annualised rate sliding to 1.6% – the lowest rate since July 2017.
via ZeroHedge News http://bit.ly/2Hh720a Tyler Durden
With the Turkish Lira soaring on Friday, on what in retrospect turned out to be massive, FX-draining commercial bank intervention in the currency market, some TRY bulls were hopeful that their endless, currency crushing anguish may have been finally over, if only for the time being. Alas, it was not meant to be, and the lira resumed its collapse on Monday, with the move sharply lower sparked by a Reuters report that Turkey is about to officially become a banana republic in which the central bank is used to prop up Erdogan’s “executive presidency” because according to the report, Turkey’s Treasury ministry is working on legislation to transfer the central bank’s 40 billion lira ($6.6 billion) in legal reserves to the government’s budget to shore it up.
In what appears to be a roundabout way of saying the central bank – which can print lira – will be used to fund the government, a critical step that without fails ends in hyperinflation, economic and currency collapse, the Reuters sources said that the budget is deeper in deficit than expected, and so the central bank’s help will be needed to plug it.
As Reuters notes, “legal reserves” are separate to foreign exchange reserves, and are what the central bank sets aside from profits by law to be used in extraordinary circumstances. At end-2018, they stood at 27.6 billion lira, according to the bank’s balance sheet data. A second source with knowledge of the matter said last year’s “legal reserves” combined with this year’s amounted to the 40-billion lira figure, which was cited by all three people who spoke to Reuters.
“The Turkish central bank has around 40 billion lira in legal reserves. The transfer of this amount to the 2019 central administration budget was seen as suitable. This step aims at improving and strengthening the budget,” the second source said. It remained unclear how much of the reserves would ultimately be transferred and what, if any, new requirements would apply to the central bank.
As Reuters adds, the transfer would mark the second recent move by Ankara to tap the central bank’s funds to boost its budget. In January, the bank transferred some 37 billion lira in profits to the Treasury three months earlier than scheduled.
“I do not remember the use of legal reserves before. This method came up to stop further deterioration of the budget,” the source said. “There needs to be a legislation to transfer the central bank’s legal reserves. The new legislation is planned to be presented to the parliament soon.” the source said.
As a reference, Turkey’s budget recorded a 36.2 billon lira deficit in the first quarter of 2019, and is expected to soar to 80.6 billion lira by year end, which means that not even the entire “legal reserve” fund will be sufficient to keep Turkey afloat.
Needless to say, the report spooked investors as it suggests that Turkey’s fiscal standing continues to deteriorate, and is fueling concerns that the government is using the central bank to finance its deficit.
As a result, the lira – which already was tumbling as part of a US-China trade fiasco – slumped back under below the psychologically important mark of 6 per dollar. It traded 2.44% weaker at 6.1288 against the dollar after touching a one-week high of 5.9571 on Friday.
Not helping the lira was a Bloomberg report that as of early Monday, companies bought around $300 million, as local firms took advantage of Friday’s bouts of lira strength as an opportunity to scoop up dollars for Turkish companies saddled with a $315 billion foreign-exchange debt pile.
Putting Turkey’s unsustainable financial picture in context, as of February, the country’s non-financial companies’ hard-currency liabilities exceeded their foreign-exchange assets by $197 billion, equivalent to about a quarter of GDP, central bank data show. In other words, with every passing day, Turkey is getting closer to a dollar-denominated default, and its default risk is reflecting it: on Monday, Turkey CDS surged past 500 bps for the first time since September.
via ZeroHedge News http://bit.ly/2vWK9J3 Tyler Durden
As Washington and the investing public wait to learn more about Beijing’s plans for retaliation following the latest round of trade-war escalation, Trump tweeted on Monday that Beijing would retaliate at its own risk: If it follows through with another round of retaliatory tariffs, Trump warned, there would “nobody left in China to do business with.”
Their is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today. This has been proven recently when only 4 points were paid by the U.S., 21 points by China because China subsidizes product to such a large degree. Also, the Tariffs can be…..
….completely avoided if you by from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!…
..There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!
If the situation isn’t resolved, “China will be hurt very badly” because President Xi decided to back out of his “great deal.”
I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!
Since Liu He left Washington on Friday without a deal, or even a plan for the next round of talks, political analysts over the weekend have focused on what form retaliation from Beijing might take.
Beijing’s options are limited by the fact that it simply doesn’t have as many imports to tax, which has led to vague threats like this one, tweeted by Global Times editor Hu Xijin, saying only that Beijing’s plan will have “precise effects,” harming the US while “minimizing damage” to the Chinese economy.
China hasn’t released countermeasures immediately. I believe the reason is that China is drafting a plan that will have precise effects, making sure it hits the US while minimizing damage to itself.
The Global Times published a piece over the weekend calling on Beijing to “direct precision strikes at vital links in the US economy to inflict systemic damage to bring the latter back to the negotiating table.”
One former Chinese commerce official quoted in the GT story said Beijing’s countermeasures should show that “China is not only resilient against the higher tariff but is capable of hitting back.” This might help the US “abandon its misconceptions,” he said.
Another analyst from the World Economics and Politics with the Chinese Academy of Social Sciences pointed out that most of the costs from higher tariffs imposed by the Trump administration would be borne by US consumers.
Gao Lingwen, a senior research fellow at the Institute of World Economics and Politics with the Chinese Academy of Social Sciences, (CASS) said most of the extra costs brought about by the Trump administration’s heightened tariffs will be borne by US consumers.
“Chinese exporters have had to shoulder about 10 percent of the tariff burden imposed by the Trump administration so far. The remaining 90 percent is eventually passed on to US retailers and consumers,” Gao said at the same seminar.
Instead of focusing on broad-based tariffs, Gao said Beijing could focus its tariffs to pummel carefully selected industries (though none were named in the piece).
One key source of the confidence some in the US feel about the ease of winning a trade war is the sound performance of the US economy so far. However, Gao said that as the tariff pain is gradually passed on to US products and consumers, such confidence will come to an end.
“China does not need to match the Trump administration’s tariff war in terms of scale and tariff percentages. Instead, China could shift its focus from hitting Trump’s voter base to pummel a carefully selected industrial chain linkage point that could cause systemic risks to the US economy,” Gao said.
Following Friday’s meetings, Liu outlined three demands on the Chinese side: The removal of all trade-war tariffs, set targets for Chinese purchases that are in line with genuine demand, and ensure that the text of the deal is “balanced.”
Washington has already started the process of raising tariffs on all remaining Chinese goods. With all Chinese goods soon expected to face 25% tariffs, most expect this could have a serious impact on China’s economy.
Still, President Trump has assured the public that the US is “right where we want to be” on China.
We are right where we want to be with China. Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries…
Given the strength of the market’s YTD rally and the GDP numbers from the first quarter, Trump might have a point: even the GT conceded that making a deal would be in China’s best interest.
Many experts have insisted that China can take the pain from a trade deal longer than Trump, largely by virtue of its authoritarian system. But is it possible that Trump was on to something when he warned that there would be “nobody left in China to do business with” if Beijing doesn’t find a way to end the trade war?
via ZeroHedge News http://bit.ly/2JCiu8n Tyler Durden
Before we got married way back in 2000, my wife and I decided we didn’t want children. As a transhumanist, I would sometimes quip, “We’ll have kids when we’re younger.” My nontranshumanist wife usually responded to this witticism with slightly exasperated eye rolling.
Now it’s the 2050s and I’m about to celebrate my 100th birthday. Forty-some years ago, Harvard geneticist George Church predicted that researchers would be able to reverse aging in humans sometime in the early 2020s. That was a bit optimistic, but he wasn’t too far off. As a result, millions of us survived into the modern era, in which rejuvenation researchers have achieved longevity “escape velocity”: Life expectancy now increases by more than one year for every additional year of anti-aging research that’s conducted.
Due to advances in anti-senescence and age reversal treatments, I’m now physically much younger—about age 30—and have the energy and focus to devote to rearing a child.
While my also-younger wife is still disinclined toward motherhood, she has recently agreed that it would be OK if I were to become a father. So I’m exploring the idea of becoming a monoparent. Happily, mid-21st century science makes this possible.
Reproductive technologies have evolved in much the way Stanford University bioethicist Henry Greely outlined back in 2016. In his book The End of Sex and the Future of Human Reproduction, Greely foresawthat most people would use gametes derived from their skin cells to create scores of in vitro-fertilized embryos. He accurately predicted that by the 2050s and ’60s, half of all American babies would be born through “easy pre-implantation genetic diagnosis,” or Easy PGD.
Why are more people choosing Easy PGD in 2050? Because parents can choose among embryos based on a preferred combination of genetic traits. Among other things, you can avoid having children afflicted with debilitating genetic diseases. And because the gametes can be derived from one or two people’s skin cells, you don’t even need a conventional partner! That allows monoparental reproduction but also makes it feasible for same-sex couples to have offspring genetically related to both parents.
Easy PGD is distinct from cloning, in which unchanged cellular nuclei from a single parent are installed in enucleated eggs to produce embryos. Of course, we also have cloning now. The genomes of the parent and the cloned child essentially make them age-separated identical twins.
Call me old-fashioned, but I’m more comfortable with Easy PGD. Gametes created from my skin cells would be much like those created via the natural process of meiosis: Bits of my chromosomes undergo recombination such that when a skin cell is transformed into gametes, the set of chromosomes in each daughter cell contains a mixture of my genetic traits but not necessarily the same mixture as in the other daughter cells. In other words, unlike clones, monoparental children are not genetically identical to their mother or father.
Once my skin-cell gametes are combined to produce embryos, their whole genomes will be sequenced to see exactly what combination of genetic traits they carry. Each one will then be analyzed to generate polygenic risk scores. That process assesses multiple genetic variants that together are used to predict the embryo’s chance of developing a disease, being taller than average, or doing well in school. Reproduction technicians can even feed the embryos’ genome sequences into a phenotype reader that will generate a picture of how each one would likely look at age 18.
It’s at this stage that my reproductionists and I would discuss how to use gene-editing to correct undesirable mutations and enhance the most promising embryos. I already know I carry gene variants that predispose me to conditions such as hypertrophic cardiomyopathy, age-related macular degeneration, and substance abuse. Although modern medical treatments keep these problems under control, it would be better if my future daughter, through gene tweaks, could avoid them altogether.
Although much progress has been made, ectogenesis—growing embryos in artificial wombs—is still not possible. Fortunately, gestational surrogacy is widely practiced and well-compensated. The old legal confusions have been resolved, and it is now universally agreed that the genetic parents are legally responsible for the rearing of children born to surrogates.
I have not completely made up my mind to pursue monoparenthood, but there’s no particular hurry. Barring accidents, I’m likely to remain physically young and live many more decades yet.
from Latest – Reason.com http://bit.ly/2E5PxOu
via IFTTT
Before we got married way back in 2000, my wife and I decided we didn’t want children. As a transhumanist, I would sometimes quip, “We’ll have kids when we’re younger.” My nontranshumanist wife usually responded to this witticism with slightly exasperated eye rolling.
Now it’s the 2050s and I’m about to celebrate my 100th birthday. Forty-some years ago, Harvard geneticist George Church predicted that researchers would be able to reverse aging in humans sometime in the early 2020s. That was a bit optimistic, but he wasn’t too far off. As a result, millions of us survived into the modern era, in which rejuvenation researchers have achieved longevity “escape velocity”: Life expectancy now increases by more than one year for every additional year of anti-aging research that’s conducted.
Due to advances in anti-senescence and age reversal treatments, I’m now physically much younger—about age 30—and have the energy and focus to devote to rearing a child.
While my also-younger wife is still disinclined toward motherhood, she has recently agreed that it would be OK if I were to become a father. So I’m exploring the idea of becoming a monoparent. Happily, mid-21st century science makes this possible.
Reproductive technologies have evolved in much the way Stanford University bioethicist Henry Greely outlined back in 2016. In his book The End of Sex and the Future of Human Reproduction, Greely foresawthat most people would use gametes derived from their skin cells to create scores of in vitro-fertilized embryos. He accurately predicted that by the 2050s and ’60s, half of all American babies would be born through “easy pre-implantation genetic diagnosis,” or Easy PGD.
Why are more people choosing Easy PGD in 2050? Because parents can choose among embryos based on a preferred combination of genetic traits. Among other things, you can avoid having children afflicted with debilitating genetic diseases. And because the gametes can be derived from one or two people’s skin cells, you don’t even need a conventional partner! That allows monoparental reproduction but also makes it feasible for same-sex couples to have offspring genetically related to both parents.
Easy PGD is distinct from cloning, in which unchanged cellular nuclei from a single parent are installed in enucleated eggs to produce embryos. Of course, we also have cloning now. The genomes of the parent and the cloned child essentially make them age-separated identical twins.
Call me old-fashioned, but I’m more comfortable with Easy PGD. Gametes created from my skin cells would be much like those created via the natural process of meiosis: Bits of my chromosomes undergo recombination such that when a skin cell is transformed into gametes, the set of chromosomes in each daughter cell contains a mixture of my genetic traits but not necessarily the same mixture as in the other daughter cells. In other words, unlike clones, monoparental children are not genetically identical to their mother or father.
Once my skin-cell gametes are combined to produce embryos, their whole genomes will be sequenced to see exactly what combination of genetic traits they carry. Each one will then be analyzed to generate polygenic risk scores. That process assesses multiple genetic variants that together are used to predict the embryo’s chance of developing a disease, being taller than average, or doing well in school. Reproduction technicians can even feed the embryos’ genome sequences into a phenotype reader that will generate a picture of how each one would likely look at age 18.
It’s at this stage that my reproductionists and I would discuss how to use gene-editing to correct undesirable mutations and enhance the most promising embryos. I already know I carry gene variants that predispose me to conditions such as hypertrophic cardiomyopathy, age-related macular degeneration, and substance abuse. Although modern medical treatments keep these problems under control, it would be better if my future daughter, through gene tweaks, could avoid them altogether.
Although much progress has been made, ectogenesis—growing embryos in artificial wombs—is still not possible. Fortunately, gestational surrogacy is widely practiced and well-compensated. The old legal confusions have been resolved, and it is now universally agreed that the genetic parents are legally responsible for the rearing of children born to surrogates.
I have not completely made up my mind to pursue monoparenthood, but there’s no particular hurry. Barring accidents, I’m likely to remain physically young and live many more decades yet.
from Latest – Reason.com http://bit.ly/2E5PxOu
via IFTTT
It has been one month since UK police entered the Ecuadorian embassy in London and arrested Wikileaks founder Julian Assange. the Wikileaks founder has already been slapped with a 50-week sentence for skipping his bail in the UK, and as the UK prepares to process an extradition request from US prosecutors, they now must also decide whether Sweden has a legitimate claim.
Swedish prosecutors are again requesting that Assange be extradited to Sweden to face trial on rape charges after prosecutors revived an investigation following reports that Assange had been ousted from the embassy. Assange managed to avoid extradition to Sweden for seven years by hiding in the Ecuadorian embassy (Assange initially sought refuge there back in 2012, when he skipped bail in the UK and took shelter in the embassy, claiming that the charges in Sweden were merely a ruse for him to be handed over to the US), according to RT.
Though Assange has only been charged with one count of attempting to break into a government computer in the US – a charge that carries a maximum penalty of five-and-a-half years – his lawyers have speculated that the US could introduce charges under the Espionage Act, which could carry a death sentence, once he’s safely back on American soil. Wikileaks editor-in-chief Kristinn Hrafnsson accused Sweden of bowing to external pressure, saying “there has been considerable political pressure on Sweden to reopen their investigation, but there has always been political pressure surrounding this case.”
In other Assange-related news, El Pais reports that the government of Ecuador will allow UK authorities to search a room occupied by Assange during his seven-year asylum, and will turn over any documents, cellphones, digital files, computers, memory drives, CDs and any other items of interest investigators might discover.
Assange’s room will be searched on May 20. Ecuador’s decision to confiscate his belongings and turn them over to foreign authorities has been relayed to Assange’s attorneys.
via ZeroHedge News http://bit.ly/2LFhtyY Tyler Durden
Imagine you’re hiking through the woods near a border. Suddenly, you hear a mechanical buzzing, like a gigantic bee. Two quadcopters have spotted you and swoop in for a closer look. Antennae on both drones and on a nearby autonomous ground vehicle pick up the radio frequencies coming from the cell phone in your pocket. They send the signals to a central server, which triangulates your exact location and feeds it back to the drones. The robots close in.
Cameras and other sensors on the machines recognize you as human and try to ascertain your intentions. Are you a threat? Are you illegally crossing a border? Do you have a gun? Are you engaging in acts of terrorism or organized crime? The machines send video feeds to their human operator, a border guard in an office miles away, who checks the videos and decides that you are not a risk. The border guard pushes a button, and the robots disengage and continue on their patrol.
This is not science fiction. The European Union is financing a project to develop drones piloted by artificial intelligence and designed to autonomously patrol Europe’s borders. The drones will operate in swarms, coordinating and corroborating information among fleets of quadcopters, small fixed-wing airplanes, ground vehicles, submarines, and boats. Developers of the project, known as Roborder, say the robots will be able to identify humans and independently decide whether they represent a threat. If they determine that you may have committed a crime, they will notify border police.
President Donald Trump has used the specter of criminals crossing the southern border to stir nationalist political sentiment and energize his base. In Europe, two years after the height of the migration crisis that brought more than a million people to the continent, mostly from the Middle East and Africa, immigration remains a hot-button issue, even as the number of new arrivals has dropped. Political parties across the European Union are winning elections on anti-immigrant platforms and enacting increasingly restrictive border policies. Tech ethicists and privacy advocates worry that Roborder and projects like it outsource too much law enforcement work to nonhuman actors and could easily be weaponized against people in border areas.
“The development of these systems is a dark step into morally dangerous territory,” said Noel Sharkey, emeritus professor of robotics and artificial intelligence at Sheffield University in the U.K. and one of the founders of the International Committee for Robot Arms Control, a nonprofit that advocates against the military use of robotics. Sharkey lists examples of weaponized drones currently on the market: flying robots equipped with Tasers, pepper spray, rubber bullets, and other weapons. He warns of the implications of combining that technology with AI-based decision-making and using it in politically-charged border zones. “It’s only a matter of time before a drone will be able to take action to stop people,” Sharkey told The Intercept.
Roborder’s developers also may be violating the terms of their funding, according to documents about the project obtained via European Union transparency regulations. The initiative is mostly financed by an €8 million EU research and innovation grant designed for projects that are exclusively nonmilitary, but Roborder’s developers acknowledge that parts of their proposed system involve military technology or could easily be converted for military use.
Much of the development of Roborder is classified, but The Intercept obtained internal reports related to ethical considerations and concerns about the program. That documentation was improperly redacted and inadvertently released in full.
In one of the reports, Roborder’s developers sought to address ethical criteria that are tied to their EU funding. Developers considered whether their work could be modified or enhanced to harm humans and what could happen if the technology or knowledge developed in the project “ended up in the wrong hands.” These ethical issues are raised, wrote the developers, when “research makes use of classified information, materials or techniques; dangerous or restricted materials[;] and if specific results of the research could present a danger to participants or to society as a whole.”
Roborder’s developers argued that these ethical concerns did not apply to their work, stating that their only goal was to develop and test the new technology, and that it would not be sold or transferred outside of the European Union during the life cycle of the project. But in interviews with The Intercept, project developers acknowledged that their technology could be repurposed and sold, even outside of Europe, after the European project cycle has finished, which is expected to happen next year.
Beyond the Roborder project, the ethics reports filed with the European Commission suggest a larger question: When it comes to new technology with the potential to be used against vulnerable people in places with few human rights protections, who decides what we should and should not develop?
Roborder won its funding grant in 2017 and has set out to develop a marketable prototype — “a swarm of robotics to support border monitoring” — by mid-2020. Its developers hope to build and equip a collection of air, sea, and land drones that can be combined and sent out on border patrol missions, scanning for “threats” autonomously based on information provided by human operators, said Stefanos Vrochidis, Roborder’s project manager.
The drones will employ optical, infrared, and thermal cameras; radar; and radio frequency sensors to determine threats along the border. Cell phone frequencies will be used to triangulate the location of people suspected of criminal activity, and cameras will identify humans, guns, vehicles, and other objects. “The main objective is to have as many sensors in the field as possible to assist patrol personnel,” said Kostas Ioannidis, Roborder’s technical manager.
The end product will be tested by border police in several European countries, including Portugal, Hungary, and Greece, but the project has also generated considerable interest in the private sector. “Eventually, we have companies that would certainly like to exploit this commercially,” Vrochidis told The Intercept. “They might exploit the whole outcome or part of the outcome, depending. They can exploit this in Europe but also outside of Europe.”
In their grant agreement, Roborder’s developers told the European Commission that they did not foresee any exports of their technology outside of the EU. In interviews, however, developers told The Intercept that the companies involved would be open to selling their technology beyond Europe. According to a spokesperson from the grant program funding Roborder, Horizon 2020, there is nothing Roborder’s EU backers can do to control where or how the technology they bankrolled is eventually used.
The documents obtained by The Intercept show Roborder responding to some ethical concerns about the project but not about the technology itself. In their grant application, Roborder’s developers conceded that their research “may be exploited by criminal organizations and individual criminals when planning to perpetrate acts of serious crime or terrorism” but wrote that the consortium of public and private companies developing the technology would work to keep their data safe. That group includes drone manufacturing companies, several national police departments, two national guards, a defense ministry, a port authority, a cyberdefense company, a company that specializes in developing equipment for electronic warfare, and another that provides “predictive analytics” for European police forces.
As for the technology’s possible modification for future clients, the answers were less clear. The developers would not comment on the potential for military sales after the project cycle ends. Developers added that their work is delayed because one of Roborder’s key consortium partners, Portuguese drone manufacturer Tekever, has left the project. Spokespeople for Roborder, Tekever, and Horizon 2020 would not explain the rationale for Tekever’s departure.
Horizon 2020 supports many security-oriented projects but maintains that“only research that has an exclusive focus on civil applications is eligible for funding.” The grant program previously funded a project that uses artificial intelligence to detect whether travelers are lying as they pass through automated border crossings.
Yet the documents obtained by The Intercept highlight inconsistent statements about Roborder’s potential military uses. According to one report, the project has no potential for “dual use,” or both military and civil deployment. Ten pages later, asked whether their work involved items that could be considered dual-use by European standards, Roborder’s developers wrote that it did.
Roborder hired a consultant, Reinhard Hutter, as an external ethics adviser to the project, according to another document from the Horizon 2020 program that was inadvertently released in full by the European Commission. In his report, Hutter wrote that “Roborder involves technology with military potential,” and that “the results of this project have the potential to be used back in the defense sector.” The technology involved, Hutter wrote, had “some dual-use potential but no dual-use activity on the project.” In other words, it could be used for military purposes but wouldn’t be used that way within the scope of Roborder.
Hutter declined to speak to The Intercept.
This blurring of lines between military and civilian development by the EU funding program might be deliberate. In a 2014 guidebook on European funding for dual-use projects, the European Commission notes that the regulation establishing Horizon 2020 mandates that all funded projects have “an exclusive focus” on civilian development, but the document also says that “substantial parts of the research funded is of relevance for defense and can lead to technologies that will be used by defense actors.”
The authors of a 2016 study commissioned by the security and defense sub-committee of the European Parliament went further, arguing that Horizon 2020’s clause on exclusive civilian development should be reinterpreted to include defense research. In order to compete with U.S. technological development, the study’s authors advocated for the creation of a European equivalent of DARPA, the U.S. Defense Advanced Research Projects Agency, whose work contributed to the development of the internet, GPS, and other technologies. In a 2017 speech, French President Emmanuel Macron echoed that, calling for, “a European agency for disruptive innovation in the same vein as” DARPA.
The 2016 report does not represent the views of the European Parliament or its security and defense sub-committee, and was not used to develop any specific legislation, a spokesperson for the European Parliament said. A spokesperson for Horizon 2020 rejected the idea that there was any ambiguity in what kind of projects the European Union would fund.
“The European Commission does not fund research intended for military use,” she said.
The drones roborder plans to deploy are common technology. What would be groundbreaking for the companies involved is a functional system that allows swarms of drones to operate autonomously and in unison to reliably identify targets. AI threat detection is often inaccurate, according to robotics researchers, so any system that could correctly and consistently identify people, cars, and weapons, among other things, would be a substantial and lucrative advancement.
Drone cameras will not use facial recognition technology within the scope of the project, explained Ioannidis, Roborder’s technical manager, nor will they be able to determine any human characteristics, such as height, weight, age, skin color, or perceived gender. “The system will only identify that ‘this object is human,’” he added, “nothing more.”
Still, Ioannidis admitted that adding facial recognition to the Roborder system later on would be “technologically possible.” What about weaponizing the Roborder system to act against humans? “No,” he said, firmly. “The robots don’t have any authority to take any action against anyone. It’s just monitoring and giving alerts.”
But Sharkey, the U.K. robotics professor, argues that there is a thin line between using robots to monitor a border and using them to enforce one. Weaponizing a drone is relatively easy, he said, citing the 2015 case of the Connecticut teenager who equipped a drone with a handgun and a flamethrower. Sharkey worries about the implications of developing autonomous systems to patrol borders, including how the system could be used by a country coping with a large influx of people.
“The question is, where is this going?” Sharkey asked. “The current project does not propose to weaponize them, but it would just be too tempting for countries if a tipping point were to happen with mass migration.”
Hannah Couchman, a researcher at the U.K. human rights organization Liberty, agrees. “There are deep human rights and civil liberty concerns with this technology,” she told The Intercept. “Once this tech is developed, it’s seen as a solution, as a response to austerity, and a way to do a job efficiently with a lower cost, all rolled out without proper consultation and legislative scrutiny.”
“It’s not just about mitigating the human rights risk,” Couchman said. “It’s about whether we should use the technology in the first place.”
via ZeroHedge News http://bit.ly/30eORzz Tyler Durden
Armed attacks by militants, distrust of western medicine and a growing funding gap has been crippling the response to the ongoing Ebola outbreak in northeastern Democratic Republic of Congo, according to the World Health Organization (WHO), which warned that the situation risks spiraling out of control.
As of May 7, there have been 1,600 confirmed and probable cases of EVD (Ebola Virus Disease), of which 1,069 have died – a mortality rate of 67%.
World Health Organization
Seriously complicating matters have been conflict between local militants in the region – who, in addition to longstanding disputes – have been targeting healthcare workers and burial teams.
FILE – Police shelter behind a hospital sign as they guard a hospital in Butembo, Congo, April 20, 2019, after militia members attacked an Ebola treatment center in the city’s Katwa district overnight.
This month alone has brought setbacks such as a violent assault on a burial team in the town of Katwa and a gunfight between at least 50 armed militia and security forces in the city of Butembo, WHO reported. Mourners also buried Richard Valery Mouzoko Kiboung, a 41-year-old Cameroonian doctor killed April 19 while working for WHO and meeting with other front-line workers at Butembo University Hospital. –VOA News
“On Thursday, a VOA correspondent in Butembo spotted copies of a letter – anchored with pebbles on streets and posted on buildings in that city and other North Kivu communities. Handwritten in Swahili and attributed to Mai-Mai fighters, the letter warned police, soldiers and the general public against showing any support for Ebola responders or treatment centers,” added VOA.
“Even Ebola treatment centers are targeted by the assailants. We’re afraid. Ebola is killing so many people. We’re still expecting that the government would be able to protect us,” said Anderson Djumah, whose 10-year-old son is being treated for Ebola at Butembo general hospital. “… [But] some people who are sick with Ebola are fleeing to other places for their lives and are meanwhile spreading the sickness.”
The violence and threats have left response teams “unable to perform robust surveillance nor deliver much needed treatment and immunizations,” according to the WHO, which warned that “without commitment from all groups to cease these attacks, it is unlikely that this EVD [Ebola virus disease] outbreak can remain successfully contained in North Kivu and Ituri provinces.“
The health organization suggested that EVD could spread to other parts of the DRC, as well as cross borders into neighboring Rwanda, Uganda and South Sudan.
As VOA notes, the violence has been sending people into hiding, disrupting response operations – including vaccination and safe burials, which gives “time and space to the virus to spread within the community and make more victims,” according to DRC health ministry spokeswoman, Jessica Ilunga.
“Every time we have a security incident, the number of cases and deaths obviously increases,” she added.
Many of the victims have died at home, potentially exposing others to the disease and leaving gaps in how — and to whom — the virus may have been transmitted.
Funding for the Ebola response has fallen far short of need, WHO spokesman Tarik Jasarevic said in an email to VOA Wednesday. As of May 2, WHO had received $32.5 million of the $87 million it estimated needing for six months ending in July.
“If the funds are not received,” Jasarevic wrote, “WHO will be unable to sustain the response at the current scale.” –VOA News
Residents skeptical
As the 10th reported outbreak rages since the virus’ 1976 discovery near the Ebola River, residents have been highly distrustful of the government, and have been broadly accepting of misinformation about Ebola, according to the report.
Just one-third of 996 respondents surveyed in North Kivu’s Beni and Butembo last fall said they had confidence that local authorities were acting in the best interests of the public, while 25% indicated they don’t believe Ebola exists.
As such, it is less likely that people will follow public safety warnings, accept Ebola vaccines, seek formal medical care, or support safe burial practices.
That mistrust can be weaponized, as Medecins Sans Frontieres/Doctors Without Borders experienced. Two of the international aid group’s Ebola treatment centers, in Katwa and Butembo, were attacked in February. MSF suspended services there, saying its ability to respond in the outbreak’s epicenter had been “crippled.”
Anne-Marie Pegg, MSF’s clinical lead for epidemic response, said some Congolese look critically at the disparity between local clinics, which, if they exist, might lack basics such as running water and electricity, and the better-equipped Ebola treatment centers set up by international aid groups. –VOA News
“Very little investment has gone into the existing health structures and the existing health system, and people notice this” said Anne-Marie Pegg, adding that in “numerous interactions” she has heard complaints that international groups are involved “‘only because we [locals] are contagious and we’re a threat to you.’”
“It’s not surprising that something like Ebola can be manipulated for any variety of reasons,” said Pegg. “… Absolutely, there are interest groups from all sides that are trying to use this.”
Vaccine strategy changes
A WHO advisory group this week recommended that one approved vaccine be distributed in smaller doses over a wider area, and that an experimental vaccine developed by Johnson & Johnson also be made available. Over 100,000 doses of the Merck vaccine have been distributed since august, however supplies are now running low.
Dosing would be reduced by half, from the current 1 milliliter for the primary and secondary “ring vaccination,” which is advised for anyone in contact with an infected person.
via ZeroHedge News http://bit.ly/30eEf3V Tyler Durden
The Bear’s Lair: The Brexit War is entering its Western Front phase
As this column forecast four weeks ago, Treason in the Brexit process prospered, and Brexit has been postponed to October 31. Businesses groaned, as the uncertainty prolonged itself to an unendurable length. Most likely, Brexit will now either be abandoned or diluted to a degree where Britain does not break free of the EU’s regulatory straitjacket. However, the battle is not yet over, so I thought it sensible to use this Easter respite to offer some thoughts on how to maximize the chance of a genuine return to a free Britain.
Andrew Roberts, in a splendid recent Wall Street journal op-ed, pointed out that George Washington would not have given up his dream of American independence because of a mere 3% potential loss in GDP (if at that time they had possessed the concept or the ability to measure it). That heavily understates the case. The true loss in per capita GDP (i.e. living standards) from American independence was about 15-20%. In 1776, the American colonists had the highest living standards in the world (and among the lowest taxes, which makes one wonder why the silly people wanted independence at all – oops, sorry, that’s Hate Speech!)
By 1790, U.S. living standards were considerably lower, and well below those in the mother country. Profitable trade patterns had been disrupted – the Boston smugglers found it very difficult to make a (moderately) honest living when there were no longer any legitimate British suppliers to undercut. Furthermore, American government under the Articles of Confederation was a shambles with no control over tariffs imposed state by state – so the United States suffered the same loss of income from 1776 to 1790 as did the countries of former Austria-Hungary after 1918. Meanwhile from the end of 1783 Britain enjoyed an exceptionally competent free-trading, free-market government under the Younger Pitt, and was thus by 1790 considerably richer than its ex-colonies.
Thereafter, the Napoleonic Wars boosted U.S. wealth (neutrality was profitable) and depressed British wealth, so that by 1815 the U.S. was again wealthier than Britain, on a per capita basis. However, after 1815 rapid U.S. immigration, foolish economic policy (we’re looking at YOU, Andrew Jackson) and the Civil War once more caused U.S. living standards to lag those of the peaceful rapidly industrializing Britain. Only after 1870, as Britain began to suffer severely from its unilateral free trade policy, did the United States pull decisively ahead.
Even with the very substantial loss in wealth, however, there was no sign in 1790 of Washington and his colleagues regretting their choice of independence. Freedom was simply too important to be abandoned to avoid a temporary loss in living standards. However, if it was worthwhile for Washington and his contemporaries to suffer a 15-20% loss in living standards to avoid the mild and benign rule of George III, how much more worthwhile must it be for the British people today to put up with a much smaller loss in living standards to get rid of a genuinely tyrannical, oppressive and foreign rule from Brussels. The cause of Brexit is thus a worthwhile one, and should never be abandoned, however long it takes.
There is an additional reason to favor Brexit, and to ensure the installation of politicians committed to Britain’s historic freedoms: the tide of new censorship regulations emanating from both Brussels and Theresa May’s government in London. In the EU, a new “Article 13” has made those providing portals to users responsible for copyright violations. In Britain, tech companies will be forced into a “duty of care” to tackle “illegal and harmful” items that appear on their sites. Including items that “may not be illegal but are nevertheless highly damaging.” Cases in which Internet bullying has led to suicides among vulnerable teenagers have been used to justify the new restrictions. Such cases are very sad, and make for good media campaigns, but are alas inevitable in any society and should not be used to justify such illiberal policies.
Both sets of regulations are directly aimed at free speech and in particular, given the political and social views of those doing the regulating, are aimed against political content that is disliked by the PC regulators. As forecast in this column a month ago, if Brexit does not pass now, the triumphant leftist regulators will make sure that it can never be seriously advocated again. Cases in both Britain and the EU have already proved that courts and police are prepared to inflict draconian prison sentences on those making statements that a generation ago would have been regarded as entirely unobjectionable or even obviously true. If it was written from Britain, this column might or might not pass the Pastor Martin Niemöller test for staying out of jail under the new system, but if the new system becomes law, I have no intention of finding out the hard way.
Even for those whose political and social views are blandly acceptable to the censors, the new regime in Britain poses an obvious threat, this time economic. Entrepreneurs by definition achieve success by pushing against the boundaries of what is normally done, and often have views on certain issues that are well outside the mainstream. Britain’s moves towards censorship have already reduced the willingness of such entrepreneurs to operate within such an arbitrary and restrictive intellectual environment; if the new rules are imposed they will simply find new places to conduct their activities.
Since Britain’s entrepreneurial tech and science-based sectors are already vulnerable, this is likely to make them disappear altogether, with incomparable losses to the British economy’s future. Having been the leader in industrialization 200 years ago, Britain will no longer be a serious player in future-oriented industries and will be forced to compete for back-office operations and low-skill services, none of which command premium living standards.
Stopping the new British law requires a new British government, something that in any case has shown itself as desirable; stopping the new EU law requires Brexit. There are four possible electoral avenues through which public opinion can be brought to bear over the period before October 31 to increase the chances of a satisfactory outcome: the May European elections, a second referendum (if one is held) a General Election and a Conservative party leadership election.
In the European elections, the Brexiter strategy is pretty clear: vote for one of the two formal Brexit parties, UKIP or Nigel Farage’s new Brexit party. Of the two, UKIP has gone off at a tangent denouncing Moslems, which is both irrelevant to Brexit and off-putting to many people (I didn’t like George W. Bush’s international crusade against Moslems in 2001-05, I don’t like UKIP’s domestic one now). Hence, I prefer Farage’s new party, which also has the advantage of Annunziata Rees-Mogg – I am in many respects (in British elections in which I no longer vote) an old-fashioned Tory deferential voter, so snobbery appeals to me and beer-swilling Cockneys don’t. The European elections are by proportional representation and give representation in a Parliament Brexiters hope not to be a member of and would like to disrupt if they are. Therefore, the more disruptive Brexit party and UKIP MEPs and the fewer untrustworthy backsliding Labour and Conservative ones, the better.
Next, the poll that Brexiters may be forced into: a second referendum.If Brexiters could be sure that a second referendum would be held fairly, and that the votes would be tallied accurately, they could be pretty confident in such a referendum. Many voters the first time around did not really believe that leaving the EU was possible, and so voted for the better-backed “Remain” side. Now they know it is possible, and they have watched the EU bureaucrats and Remain supporter “moles” in government use every sleazy trick in the book to prevent a clean Brexit – an enterprise in which the bad guys have succeeded, at least temporarily. So, the 52-48 result of 2016 might be improved upon, modestly, in a new fair referendum.
There are two problems.
First, it is quite likely that the referendum will not offer a clear in/out choice, but only a choice between “remain” and Theresa May’s dreadful quasi-Brexit, booby-trapped with the Irish “backstop.” Such a referendum would be completely unfair, since neither option offers the clean exit for which the electorate voted in 2016, and many Brexiters would consequently abstain in disgust.
Second, referenda, which poll the entire electorate, are all too easy to steal, because votes can be manufactured in Remainer strongholds such as central London. This is the reason Hillary Clinton and other Democrats want to get rid of the Electoral College; if total votes alone counted in Presidential elections, they could be manufactured in infinite quantities in the noisome Marxist slums of New York, Chicago and San Francisco. For these two reasons, any second referendum is thus almost certainly a Remainer trap and should be stoutly resisted.
A General Election is a more attractive proposition. The Newport West by-election, which showed a small swing to Conservatives from 2017, and polling before the infuriating postponement of Brexit at the end of March, both suggested a modest Conservative victory. If that was combined with a rigorous purge by Tory constituency associations of Remainer MPs sitting for Brexit-supporting seats, the House of Commons might be pushed just far enough in the right direction to support a worthwhile Brexit.
The problem is Theresa May. For the Conservatives to go into a General Election without having delivered Brexit and with Theresa May as leader would be electoral suicide. Brexiters would entirely justifiably want to punish the party for the incompetence of May’s efforts, and the result of such punishment would either be a Labour majority and Jeremy Corbyn as Prime Minister or a hung parliament in which Brexiters were even more outnumbered than they are currently. Hence, before a General Election, the Conservatives must hold a leadership election. This time, for only the second time in the party’s modern history, they must at all costs avoid the temptation to select the most left-wing possible candidate, and vote as their constituents would wish them to. My own first choice would be Jacob Rees-Mogg, but there are several other decent alternatives, although the popular Brexiter favorite Boris Johnson should be avoided if possible.
There is just time to hold a leadership election followed by a General Election before October 31, and this offers Brexiters’ best chance of victory. Otherwise, they are liable to be stuck with May’s booby-trapped deal at best, and more likely something that fails completely to give Britain the freedom it so urgently needs.
via ZeroHedge News http://bit.ly/2VvK522 Tyler Durden
