Euro Jumps After ECB Sees “No Rush” For July Rate Cut

One day after both we and the WSJ previewed the ECB’s next easing bazooka, which in addition to cutting rates could also include tens of billions in monthly QE in the form of both the PSPP and CSPP…

… the ECB tried to regain control of the narrative and early on Tuesday, Bloomberg reported that ECB policy makers “aren’t yet ready to rush into additional monetary stimulus at this month’s meeting”, preferring instead to wait for more data on the economy, according to euro-area central-bank officials familiar with the matter.

As Bloomberg’s source at the ECB – who asked not to be identified as he is most likely the head of the ECB – leaked, while Governing Council members agree that they could act on July 25 if the outlook deteriorates, “they are currently leaning toward the following meeting in September when they’ll have updated economic forecasts to back up their decision.” Instead of acting, the council might tweak its policy language this month to signal more stimulus is imminent.

This, of course, is precisely what Goldman said yesterday, when it wrote that it expects the Governing Council to adopt the “or lower” easing bias for policy rates in July and indicate that the ECB will analyze QE options for September.

At that point look for an easing package that closely resembles the “medium” package discussed above, including a 20bp rate cut with tiering, enhanced forward guidance and a return to QE.

Furthermore, Goldman expects the asset purchases to include corporate bonds and sovereign debt within the existing PSPP headroom, paired with a signal that the Governing Council stands ready to expand the sovereign purchase program with an increase in the issuer limit if economic conditions do not improve.

As Bloomberg adds, waiting until September meshes with investor expectations, as the market is now pricing a 10 basis-point rate cut by then, but some are looking for faster or bigger action. Commerzbank and Morgan Stanley expect 10 basis points as early as this month. HSBC forecasts 10 basis points in both September and December, and Goldman Sachs foresees 20 basis points in September. Morgan Stanley and Goldman Sachs also expect a resumption of quantitative easing.

A delay also leaves the market more exposed to shocks over the summer months when liquidity is thinner. The prospect of escalating trade tensions was highlighted on Monday when the U.S. proposed adding more tariffs to European Union goods because of a dispute between Boeing Co. and Airbus SE.

Not surprisingly, a delay in easing by the ECB was seen as bullish for the common currency, and the euro jumped to the highest level of the day, climbing as much as 0.3% to $1.1321.

via ZeroHedge News https://ift.tt/323BF1o Tyler Durden

Last-Ditch Lobbying Chipmaker Lobbying Blitz Convinced Trump To Drop Huawei From Blacklist

This should surprise absolutely nobody: Bloomberg reported Tuesday that  President Trump’s decision to allow some American chipmakers to continue doing business with Huawei followed an intense lobbying effort by industry group SIA – i.e.  the Semiconductor Industry Association.

The argument SIA used to convince the  president  was simple yet effective: sanctions against Huawei would make US chipmakers appear to be undependable partners, which could crimp their competitiveness against  increasingly sophisticated international  rivals.

Before Trump left for Osaka, a team of lobbyists met with Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin to argue that the decision to add Huawei to the “entities list” – effectively blacklisting the firm by severely restricting  what American firms are allowed to sell to Huawei – was short-sighted and could do serious harm to a critical American industry.

Semis

The lobbyists turned Trump’s national security argument – the idea that Huawei must be cut out of American markets because its products could enable Beijing to carry out mass espionage – on its head, arguing that cutting off US chipmakers from one of their largest international markets (China) would hurt long-term profitability as well as the company’s CapEx spend.

“Overly broad restrictions that not only constrain the ability of U.S. semiconductor companies to conduct business around the world, but also casts U.S. companies as risky and undependable, puts at risk the success of this industry, which in turn impacts our national security,” the group wrote last month. They added that the administration should take into account those factors when evaluating license applications from American firms.

And as it so happens, their arguments found their way to President Trump, who parroted some of these points when he unveiled his plan to give Huawei a reprieve.

Their talking points seem to have found their way to Trump. After concluding a high-stakes meeting with Chinese President Xi Jinping in Osaka on Saturday, the U.S. president said American firms weren’t pleased with his Huawei policy and announced that he has agreed to let them keep shipping some of their components and technology.

“I’ve agreed — and pretty easily — I’ve agreed to allow them to continue to sell that product so American companies will continue,” the president said during a press conference. “The companies were not exactly happy that they couldn’t sell because they had nothing to do with whatever was potentially happening with respect to Huawei. So I did do that.”

Though there are still some strings attached.

He later clarified he will only allow them to sell “equipment where there is no great national emergency problem with it,” without offering more details. Trump’s comments stoked confusion among industry and analysts and the White House has not yet announced specifics on the path forward for U.S. companies doing business with Huawei.

The success of this lobbying effort just goes to show: While Trump has frustrated corporate America with his sometimes erratic approach to protectionism, his own belligerent  rhetoric can be successfully used against him.

via ZeroHedge News https://ift.tt/2xlAbld Tyler Durden

Bad Ideas Are Spreading Like the Plague

The defeat of measles in the United States was one of the great good news stories of the turn of the millennium. Prior to 1963, when a vaccine was developed, the highly contagious virus led each year to 48,000 hospitalizations and 400–500 deaths, mostly among small children, according to the Centers for Disease Control and Prevention (CDC). But immunization campaigns steadily eroded the disease’s reach, and by 2000 it was declared eliminated from American shores.

Today, the U.S. is grappling with the worst measles outbreak in a quarter-century. Some 981 cases were confirmed in 26 states between January 1 and May 31—a 26-fold increase from the total in 2004. The CDC anticipates one or two fatalities per 1,000 cases, so it looks like only a matter of time before the disease again starts claiming American lives.

The most tragic thing about the measles resurgence is how wholly unnecessary it is. Whether out of fear, out of ignorance, out of confusion, or out of religious conviction, parents choosing not to vaccinate their kids have allowed immunization rates to drop below the 95 percent threshold required to keep the virus at bay. In October, officials reported that the number of children who haven’t received vaccines for preventable diseases had quadrupled since 2001.

At the very moment we succeeded in banishing a deadly affliction from our country, in other words, people began eschewing the measures that made this medical miracle possible.

Socialism, too, is having an American renaissance. As with measles, if it’s allowed to spread, the result will be needless human suffering.

A generation after the fall of the Soviet Union, young Americans have forgotten, if they ever learned, what happens when a citizenry allows itself be enraptured by the promise of communal ownership of a national economy (page 55). Such regimes have failed whenever and wherever they’ve been tried, engendering misery, starvation, persecution, and wasted human potential on a massive scale. At this very moment, hyperinflation and desperate shortages of food, medicine, and power are ravaging Venezuela (page 75), a previously rich country that had every intention of forging a better, smarter socialist future for the 21st century.

The new wave of young American socialists are quick to insist they have a different, gentler vision—as the Democratic Socialists of America’s website puts it, one in which “working people” run things “democratically to meet human needs, not to make profits for a few.” But that is a hoped-for end state, not an implementable program. The concrete policies most modern socialists propose—high confiscatory taxes and aggressive wealth redistribution, free college, publicly provided universal health care (and, often, the abolition of private alternatives)—are far more likely to wreak devastation on the well-being of Americans than they are to finally achieve utopia.

Each of these policies does violence to the market-based system of free exchange and private property rights that has underpinned the greatest expansion of human flourishing in human history. Whatever its faults, that system has brought us everything from air conditioning and aspirin to cheap flights and Netflix, all while lifting billions out of abject poverty around the world.

If people cannot keep the fruits of their own labor, Pope Leo XIII wrote in 1891, “the sources of wealth themselves would run dry, for no one would have any interest in exerting his talents or his industry.” Socialist policies, by giving government rather than individuals control over an ever-larger share of life, move us toward that eventuality. And the ensuing social collapse, like the current measles outbreak, would constitute a man-made disaster—one rendered all the more infuriatingly tragic by the fact that we should know better by now.

But if the American left has failed to immunize its youngsters against the perils of bad ideology, the right is not faring much better. Even as America prepares to weather the coming socialist storm, a second thunderhead is forming. As Daniel McCarthy put it at First Things in March, Donald Trump’s 2016 campaign, “whether consciously or not, drew upon what has been the clear policy alternative to the elite consensus in favor of global liberalism since the early 1990s: economic nationalism, and nationalism more generally.”

There are many forms that nationalism can, in theory, take—some, like those now on the rise abroad (page 67), more troubling than others. McCarthy calls for a “mild” variety. Writing in The American Conservative, W. James Antle III insists that the new nationalism “would not be illiberal in any meaningful sense of the word.” Shortly after Trump’s inauguration, National Review‘s Ramesh Ponnuru and Rich Lowry proposed “a benign nationalism” mostly featuring “loyalty to one’s country” and “solidarity with one’s countrymen.” But as their onetime colleague Jonah Goldberg quipped, benign is doing an awful lot of work in that particular formulation.

Define it vaguely enough and nationalism becomes indistinguishable from patriotism. But this new conservative critique is not focused on a mere deficiency in the rah-rah-America spirit. To count as a “new order,” nationalism has to differ in tangible ways from the liberal status quo, with its staunch commitments to civil liberties and global commerce. In practice, that means tariffs (page 74), immigration restrictionism (page 51), and massive infusions of public money (often with government directives attached) intended to reorganize and resuscitate the American industrial sector.

In 2015, former Federal Reserve Chairmen Alan Greenspan and Ben Bernanke joined a dozen other prominent economists to ink an open letter to congressional leadership. “International trade,” they wrote, “is fundamentally good for the U.S. economy, beneficial to American families over time, and consonant with our domestic priorities.” As Harvard’s Gregory Mankiw, one of the signatories, noted in a New York Times op-ed, “Economists are famous for disagreeing with one another, and indeed, seminars in economics departments are known for their vociferous debate. But economists reach near unanimity on some topics, including international trade.”

The damage, in human terms, of an experiment in economic nationalism could very well be catastrophic. Yes, much of the burden would fall on foreign citizens whose livelihoods depend on exchange with the world’s largest economy or whose hopes and dreams for their children’s future involve starting new lives here. But higher prices first and foremost put the squeeze on working-class American consumers, and as domestic farmers and manufacturers alike have learned in the last year, trade wars—like real wars—inflict casualties on both sides.

What unites the left’s flirtation with socialism and the right’s move toward nationalism is the willful discarding of long-understood, dearly learned truths about how to make the world a better place. Like the death count when parents stop vaccinating their kids, the fallout from these developments may not be instantaneous. But bad ideas can be hard to contain once they get going, and the results are not likely to be pretty.

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Bad Ideas Are Spreading Like the Plague

The defeat of measles in the United States was one of the great good news stories of the turn of the millennium. Prior to 1963, when a vaccine was developed, the highly contagious virus led each year to 48,000 hospitalizations and 400–500 deaths, mostly among small children, according to the Centers for Disease Control and Prevention (CDC). But immunization campaigns steadily eroded the disease’s reach, and by 2000 it was declared eliminated from American shores.

Today, the U.S. is grappling with the worst measles outbreak in a quarter-century. Some 981 cases were confirmed in 26 states between January 1 and May 31—a 26-fold increase from the total in 2004. The CDC anticipates one or two fatalities per 1,000 cases, so it looks like only a matter of time before the disease again starts claiming American lives.

The most tragic thing about the measles resurgence is how wholly unnecessary it is. Whether out of fear, out of ignorance, out of confusion, or out of religious conviction, parents choosing not to vaccinate their kids have allowed immunization rates to drop below the 95 percent threshold required to keep the virus at bay. In October, officials reported that the number of children who haven’t received vaccines for preventable diseases had quadrupled since 2001.

At the very moment we succeeded in banishing a deadly affliction from our country, in other words, people began eschewing the measures that made this medical miracle possible.

Socialism, too, is having an American renaissance. As with measles, if it’s allowed to spread, the result will be needless human suffering.

A generation after the fall of the Soviet Union, young Americans have forgotten, if they ever learned, what happens when a citizenry allows itself be enraptured by the promise of communal ownership of a national economy (page 55). Such regimes have failed whenever and wherever they’ve been tried, engendering misery, starvation, persecution, and wasted human potential on a massive scale. At this very moment, hyperinflation and desperate shortages of food, medicine, and power are ravaging Venezuela (page 75), a previously rich country that had every intention of forging a better, smarter socialist future for the 21st century.

The new wave of young American socialists are quick to insist they have a different, gentler vision—as the Democratic Socialists of America’s website puts it, one in which “working people” run things “democratically to meet human needs, not to make profits for a few.” But that is a hoped-for end state, not an implementable program. The concrete policies most modern socialists propose—high confiscatory taxes and aggressive wealth redistribution, free college, publicly provided universal health care (and, often, the abolition of private alternatives)—are far more likely to wreak devastation on the well-being of Americans than they are to finally achieve utopia.

Each of these policies does violence to the market-based system of free exchange and private property rights that has underpinned the greatest expansion of human flourishing in human history. Whatever its faults, that system has brought us everything from air conditioning and aspirin to cheap flights and Netflix, all while lifting billions out of abject poverty around the world.

If people cannot keep the fruits of their own labor, Pope Leo XIII wrote in 1891, “the sources of wealth themselves would run dry, for no one would have any interest in exerting his talents or his industry.” Socialist policies, by giving government rather than individuals control over an ever-larger share of life, move us toward that eventuality. And the ensuing social collapse, like the current measles outbreak, would constitute a man-made disaster—one rendered all the more infuriatingly tragic by the fact that we should know better by now.

But if the American left has failed to immunize its youngsters against the perils of bad ideology, the right is not faring much better. Even as America prepares to weather the coming socialist storm, a second thunderhead is forming. As Daniel McCarthy put it at First Things in March, Donald Trump’s 2016 campaign, “whether consciously or not, drew upon what has been the clear policy alternative to the elite consensus in favor of global liberalism since the early 1990s: economic nationalism, and nationalism more generally.”

There are many forms that nationalism can, in theory, take—some, like those now on the rise abroad (page 67), more troubling than others. McCarthy calls for a “mild” variety. Writing in The American Conservative, W. James Antle III insists that the new nationalism “would not be illiberal in any meaningful sense of the word.” Shortly after Trump’s inauguration, National Review‘s Ramesh Ponnuru and Rich Lowry proposed “a benign nationalism” mostly featuring “loyalty to one’s country” and “solidarity with one’s countrymen.” But as their onetime colleague Jonah Goldberg quipped, benign is doing an awful lot of work in that particular formulation.

Define it vaguely enough and nationalism becomes indistinguishable from patriotism. But this new conservative critique is not focused on a mere deficiency in the rah-rah-America spirit. To count as a “new order,” nationalism has to differ in tangible ways from the liberal status quo, with its staunch commitments to civil liberties and global commerce. In practice, that means tariffs (page 74), immigration restrictionism (page 51), and massive infusions of public money (often with government directives attached) intended to reorganize and resuscitate the American industrial sector.

In 2015, former Federal Reserve Chairmen Alan Greenspan and Ben Bernanke joined a dozen other prominent economists to ink an open letter to congressional leadership. “International trade,” they wrote, “is fundamentally good for the U.S. economy, beneficial to American families over time, and consonant with our domestic priorities.” As Harvard’s Gregory Mankiw, one of the signatories, noted in a New York Times op-ed, “Economists are famous for disagreeing with one another, and indeed, seminars in economics departments are known for their vociferous debate. But economists reach near unanimity on some topics, including international trade.”

The damage, in human terms, of an experiment in economic nationalism could very well be catastrophic. Yes, much of the burden would fall on foreign citizens whose livelihoods depend on exchange with the world’s largest economy or whose hopes and dreams for their children’s future involve starting new lives here. But higher prices first and foremost put the squeeze on working-class American consumers, and as domestic farmers and manufacturers alike have learned in the last year, trade wars—like real wars—inflict casualties on both sides.

What unites the left’s flirtation with socialism and the right’s move toward nationalism is the willful discarding of long-understood, dearly learned truths about how to make the world a better place. Like the death count when parents stop vaccinating their kids, the fallout from these developments may not be instantaneous. But bad ideas can be hard to contain once they get going, and the results are not likely to be pretty.

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From “Ponzi” To “We’re Working On It” – BIS Chief Reverses Stance On Crypto

Authored by William Suberg via CoinTelegraph.com,

The head of the Bank of International Settlements (BIS) has appeared to U-turn on issuing digital currencies after a fresh interview with the Financial Times on June 30. 

image courtesy of CoinTelegraph

Speaking to the publication, BIS chief Augustin Carstens actively endorsed the creation and issuance of digital versions of national fiat currencies

“Many central banks are working on it; we are working on it, supporting them,” he said.

“And it might be that it is sooner than we think that there is a market and we need to be able to provide central bank digital currencies.” 

The comments struck a curious note with many, coming just months after Carstens emphatically advised against issuing such digital currencies.

In a speech in March, he listed various risks for banks considering doing so, arguing innovation should not come too fast.

In addition, both the BIS and Carstens himself are outspoken critics of decentralizedcryptocurrencies such as bitcoin (BTC). 

Last year, he described bitcoin as lacking the ability to ever function as money and directed young people to “stop trying to create money.”

“…If you look at them closely, cryptocurrencies are, in a nutshell, a bubble, a Ponzi scheme and an environmental disaster – the latter because of the high energy consumption needed to run the infrastructure for these cryptocurrencies,” he said in July. 

More recently, the BIS has come out critical about Facebook’s new Libra cryptocurrency protocol, similarly due to the fact it resembles money beyond the control of a government.

via ZeroHedge News https://ift.tt/2J3N5uM Tyler Durden

Super Economy Class: Body Of Stowaway Falls From Plane While It’s Landing At Heathrow

A stowaway fell out of the bottom of a jet as it was approaching Heathrow airport to land on Sunday, according to NBC. The incident took place after a nine hour flight from Nairobi and the body wound up landing in a garden.

Metropolitan police said that the body was found in a garden in South London on Sunday and that it was believed to have fallen from a plane. The body has not been identified, nor has an official cause of death been determined.

We are not coroners, but we’re going to go out on a limb and say that if the authorities’ hypothesis is correct, the cause of death is likely going to be – wait for it – falling out of an airplane.

Kenya Airways said that the body was traced to its flight from Nairobi to London. Furthering the case for a stowaway was water and food both discovered in the plane’s landing gear compartment when it landed.

The airline said the death was “unfortunate” and that it was cooperating with authorities. Meanwhile, experts have said that about 75% of stowaways in a plane’s undercarriage do not survive because of the extreme cold and lack of oxygen as a plane reaches cruising altitude.

And this isn’t the first body to fall from the sky and land in London, either. According to NBC, in September 2012, a 30-year old from Mozambique died after falling from the undercarriage of a Heathrow-bound flight from Angola.

via ZeroHedge News https://ift.tt/2RS0MQb Tyler Durden

Brickbat: Cat House

A Murray, Utah, animal control officer cited Kate Anderson for “animal at large” and “not having a license attached,” both misdemeanors, because Anderson’s cat was lying on her front yard. Anderson says someone took a photo of the cat resting and reported her to cops. A city ordinance defines an animal as at large even if it is in the owner’s yard unless it is on a leash or physically confined to the property. When contacted by local media, the city attorney said that though it was illegal for the cat to be on the front lawn, the city will drop the charges.

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Brickbat: Cat House

A Murray, Utah, animal control officer cited Kate Anderson for “animal at large” and “not having a license attached,” both misdemeanors, because Anderson’s cat was lying on her front yard. Anderson says someone took a photo of the cat resting and reported her to cops. A city ordinance defines an animal as at large even if it is in the owner’s yard unless it is on a leash or physically confined to the property. When contacted by local media, the city attorney said that though it was illegal for the cat to be on the front lawn, the city will drop the charges.

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Man Who Bravely Fought Off Islamic Terrorists Put On Terror Watchlist By UK Gov’t

Authored by Paul Joseph Watson via Summit.news,

The ‘Lion of London Bridge’ who bravely fought off Islamic terrorists has been put on an anti-radicalization terror watchlist by the UK government over fears he could become a right-wing extremist.

Yes, really.

49-year-old Roy Larner screamed “f*** you, I’m Millwall” as he defended himself against jihadists who ended up killing 8 people and injuring 38 others during the horrific attack in London two years ago.

The attack left Larner with more than 80 stitches to his head, ear, arms and hands after two of the terrorists slashed at his head and neck.

Following the attack, Larner revealed that the terrorists had shouted, “This is for Allah” and “Islam, Islam, Islam” during the rampage.

Now Larner himself is being treated as a potential terrorist by the UK government.

Because he was allegedly contacted by far-right anti-Islam activists, Larner has been put on the government’s Prevent terror watchlist over fears he might become an extremist.

“They treat me like a terrorist but I’m not political at all,” said Larner, who revealed he has been forced to attend de-radicalization classes and is being monitored by the police.

Despite being hailed as a hero after the attack, with speculation that he could even be given the George Cross, the highest civilian award for gallantry, Larner is now literally being treated as a potential terrorist by his own country.

The United Kingdom is so addled with political correctness, it treats those who fought back against Islamic jihadists as terrorists.

Let the sheer intensity of that level of clown world insanity sink right in.

via ZeroHedge News https://ift.tt/2RNLgVq Tyler Durden

Scottish Nuclear Facility Evacuated After “Human Error” Triggers Radioactive Contamination

With HBO’s Chernobyl mini-series re-heightening fears about nuclear power plants, headlines from The Aberdeen Press and Herald that workers were evacuated from part of Dounreay nuclear facility on northern Scotland after radioactive contamination was detected there, have spooked locals and raised questions about the decommissioned facility.

The incident occurred on June 7 but site bosses only publicly released details at a meeting of Dounreay Stakeholder Group on Wednesday evening.

Site managing director Martin Moore said human error was to blame for the episode which is the subject of an in-house probe.

“The contamination was very local but it wasn’t in a place it should have been, normally.”

“The levels were insignificant but they should not have been there so we cleared the area and then had a controlled re-entry.”

“It came down to a lack of due diligence in monitoring around one of the barriers.”

“It was human error. It shouldn’t have happened and we’re very disappointed that it did.”

Dounreay, an experimental nuclear power site, is being demolished and cleaned up at a cost of £2.32bn in a job expected to last up until 2033.

Officials from Dounreay Site Restoration Ltd (DSRL), the company tasked with decommissioning the plant, said that the measure had been precautionary and that the public was never in any danger.

“There was no risk to members of the public, no increased risk to the workforce and no release to the environment. “

DSRL have already been censured for a safety violation at the same site in 2014, when a fire caused by employees released radioactivity into the atmosphere.

In the wake of that incident, the company promised to “learn lessons” and implement a wide-ranging new safety strategy, which seemingly turned out to have issues as well.

via ZeroHedge News https://ift.tt/2J4mMVm Tyler Durden