Month: September 2019

While there was some feverish speculation as to what an impromptu presser at 1:30pm with US Secretary of State Pompeo, Treasury Secretary Mnuchin and National Security Adviser Bolton would deliver, that was quickly swept aside moments later when Trump unexpectedly announced that he had effectively fired Bolton as National Security Advisor, tweeting that he informed John Bolton “last night that his services are no longer needed at the White House” after “disagreeing strongly with many of his suggestions.“

….I asked John for his resignation, which was given to me this morning. I thank John very much for his service. I will be naming a new National Security Advisor next week.

— Donald J. Trump (@realDonaldTrump) September 10, 2019

Mercifully, this means one less warmongering neo-con is left in the DC swamp.

While we await more details on this perplexing hit by Trump against the Deep State, here is a fitting closer from Curt Mills via the American Conservative:

Ending America’s longest war would be a welcome rebuttal to Democrats who will, day in and day out, charge that Trump is a fraud. But to do so, he will likely need a national security advisor more in sync with the vision. Among them: Tucker Carlson favorite Douglas Macgregor, Stephen Biegun, the runner-up previously, or the hawkish, but relatively pragmatic retired General Jack Keane.

Bolton seems to be following the well-worn trajectory of dumped Trump deputies. Jeff Sessions, a proto-Trump and the first senator to endorse the mogul, became attorney general and ideological incubator of the new Right’s agenda only to become persona non grata in the administration. The formal execution came later. Bannon followed a less dramatic, but no less explosive ebb and flow. James Mattis walked on water until he didn’t.

And Bolton appeared the leading light of a neoconservative revival, of sorts, until he didn’t.

 

Stocks turned higher just before noon on Tuesday after the South China Morning Post published a story claiming that China is expected to agree to buy more products from American farmers in hopes of sweetening the deal and increasing the chances of an accord when the two trade delegations meet next month.

US stocks turned flat on the day, erasing earlier losses on the report, which is the latest example of optimistic trade talk coming out of Beijing.

Citing “a source familiar with the situation,” the SCMP reported that working-level officials were discussing the text of a deal, which would be form the baseline of a tentative agreement when Chinese Vice-Premier Liu He meets US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Washington in October.

The text is based on a draft that the two sides negotiated back in April, the anonymous sources said.

China is reportedly preparing to offer to buy more ag products in exchange for the US delaying a series of US tariffs, as well as easing the supply ban on Chinese telecoms giant Huawei.

In addition, the source said China could improve market access, offer better IP protections and reduce excess industrial capacity. On the other hand, the source said Beijing is still reluctant to compromise on subsidies, industrial policy and reforming state-owned enterprises.

The shock of yesterday’s US Equities factor reversals will go down in infamy alongside the August 2007 “Quant Quake” and the Fed / March / April 2016 “Market-Neutral Unwind” as one of the more stunning trades in modern market history—and yet HILARIOUSLY, nobody watching financial TV or Joe Schmoe retail investor looking at just simple Index returns in isolation (or even a more sophisticated investor looking at the Vol complex yday) would have had ANY idea of the calamity occurring under the surface, as it was all about a blowout in sector- and thematic- dispersion which then acted to offset / “mask” the “top down” moves

– Nomura’s Charlie McElligott

Submitted by Nicholas Colas of DataTrek Research

Monday’s action in US equities was much like a duck floating on a pond. Up top, nothing much seems to be going on. The Dow (up 14 basis points), the S&P 500 (down 1 basis point) and the NASDAQ (down 19 basis points) all behaved like coming to work was the proverbial waste of a clean shirt.

But, below the surface, there was a lot of action. We had several client emails on this after the close, calling dramatic out moves like:

• The Russell 2000: up 1.3%. US small caps have been laggards all year, but Monday’s move closed the YTD performance gap by 20%.

• Large cap Financials: up 1.5%. One of the more-troubled groups in the S&P 500 this year, but Monday’s performance cut their YTD lag by 44%.

• US Momentum stocks (using the MTUM ETF as a proxy): down 1.7%. Monday’s move cut the YTD outperformance of this style versus the S&P 500 from 357 bp to 186 bp, a 48% decline.

• US Min Vol stocks (using the USMV ETF): down 0.9%. Like Momentum, this has been a winning approach in 2019 but Monday’s drop sliced 20% off its YTD outperformance (448 bp Friday, 363 Monday).

Without making too much from one day’s performance, these moves are still important enough to dissect for what they say about potential shifting investment narratives. Three points on this:

#1: The world’s low/negative interest rate fever may finally be breaking. We’ve written about how Treasuries were overbought several times recently, so no need to belabor that point. But here’s how this is playing out now:

• 10-year German bunds are off their record-low yields, at -0.58% Monday versus -0.70% at the start of the month. German 30-years are within sight of positive yields, at -0.03%.

• 10-year Treasuries yield 1.65% Monday versus 1.50% at the start of September. 30-years are back over 2% (2.13% Monday) versus 1.96% on August 31st.

• This move has breathed fresh lift into European bank stocks, up 6.7% this month and 2.7% just Monday. We talked about these last month as a canary-in-the-coalmine indicator, and sure enough they have led markets higher in September.

• This helped US Financials Monday (as noted above)… And since US Small Caps have suffered from fears over a US economic downturn, they got a lift as well.

Bottom line: the rate pendulum swung very far in August, but September’s renewed confidence in a US-China trade deal has put recession fears on the back burner for now.

#2: “Style” doesn’t mean diversification.

• Using MTUM – an $11 billion ETF – as a proxy for momentum investing shows how concentrated this style has become.

• 39% of the fund is in the Tech sector, 77% greater than the S&P 500.

• 5 Tech names – MasterCard, Visa, Microsoft, Cisco and PayPal – are 21% of the fund. All were down Monday, led by MA and V, each lower by over 2%.

Bottom line: Monday was a zero sum game, with money flowing out of Technology and into Financials. We’re long past the days where money managers had consistent fresh inflows of new investor capital to sprinkle around. Rebalancing portfolios means a dollar-for-dollar exchange of “out with the old, in with the new”.

#3: “Min Vol” is anchored in the past.

• The proxy here, USMV, is an ETF with $34 billion in assets. It uses historical price volatility to create a diversified portfolio of roughly 200 lower-than-average vol names with sector concentrations inline with US equity markets.

• In principle this is a solid strategy with academic work that shows lower volatility stocks tend to outperform, even if this approach runs counter to CAPM’s concept of beta.

• In practice, however, “min vol” will always have idiosyncratic risk when there is outsized sector/style rotation.

Bottom line: Monday’s “min vol” underperformance is one more sign that investment narratives are changing and capital is shifting accordingly. What was a low-vol stock over the last 90 days was certainly not one Monday.

In the end, the only question that matters about Monday is “Does it change anything fundamentally about important investment narratives?” Over the short term (a week or two), the answer is likely “yes”. We doubt the sell off in bonds is over, for example. That will give some groups/asset classes, like Financials/Small Caps, the chance for a further bounce.

Over the long term, however, we think it’s too early to wave the all-clear and call for what would essentially be an early-cycle shift to Small Caps/Financials/Cyclical names generally. Monday was a nice start, but just a start, and we’ll need to see continued market confidence that a 2020 recession is really off the table. Even with Monday’s action, that seems a tall order.

One year after announcing his intention to step down as chairman of the Chinese e-commerce giant Alibaba, founder Jack Ma finally stepped down on Tuesday, clearing the way for his anointed successor, CEO Daniel Zhang, to take his place. The FT heralded Ma’s retirement – which took place on Alibaba’s 20th birthday – as the first transition at the top of a Chinese tech behemoth, making it a major milestone for the Chinese tech industry.

Ma, 55, is China’s richest man. He famously built Alibaba up from a company founded in his shared apartment into a behemoth worth $462 billion.

A former schoolteacher, Ma is also recognized for his embrace of Chinese nationalism. Last year, he revealed that he is a member of the Chinese Communist Party, and his regular appearances at Davos have helped to cement his status as one of China’s preeminent business leaders.

But not everybody is so rosy about Ma’s retirement.

In a tweet sent earlier this morning, hedge fund manager Kyle Bass, a prominent China critic, speculated that Ma isn’t actually retiring – rather, his carefully choreographed decision to step down is the result of being “forcibly removed from his position, stripped of his shareholdings (transferred to “five unnamed individuals” with the same address), and will likely be jailed or ‘disappeared’ within the next year.”

Clockwork-Jack Ma was forcibly removed from his position, stripped of his shareholdings (transferred to”five unnamed individuals”with the same address),and will likely be jailed or”disappeared”within the next year.This is how xi and wang treat any chinese that become too powerful https://t.co/nmlgjbZuDj

— Kyle Bass (@Jkylebass) September 10, 2019

It’s unclear where Bass got this information. But the hedge fund manager insisted that “this is how Xi and wang [Qishan, vice president of the CCP] treat any Chinese that become too powerful.”

Jack Ma

If what Bass says is true, it could create serious problems for Chinese markets, as the international investors that Beijing is hoping to court (most recently by raising the limits on foreign investment in its stock and bond markets) would undoubtedly interpret it as a sign of President Xi’s hostility to China’s business community.

Moreover, it would further bolster the perception that the world’s second-largest economy lacks the rule of law.

Thanks to his regular appearances at Davos and myriad other appearances in Western media (Ma recently sparred with Elon Musk about the future of AI), Ma’s disappearance would be impossible to ignore. And because of his still-substantial holdings of Alibaba stock, Ma is expected to continue guiding the company from behind the scenes, something that will help bolster investor confidence in a company that, when it went public in New York a few years back, marked one of the largest IPOs of all time as the company raised roughly $25 billion.

Courtesy of Statista

So far, Alibaba investors have been unfazed by Ma’s decision to retire. The company’s shares have gained 9.4% this year. The succession has been tediously planned, and Alibaba and Ma often talk about the company’s deep bench of talent. Ma is leaving his successor some lofty targets: By 2036, Ma hopes the Alibaba “economy” can create 100 million jobs, support 10 million profitable businesses and serve 2 billion customers around the world – up from around 654 million today. The company is also targeting $1 trillion in gross merchandise value (the aggregate value of all goods sold on its platform) this year, up from $853 billion last year.

In his public remarks, Ma has remained committed to the Communist Party line, touting Beijing’s resilience and unwillingness to cave to the US, even if the trade war drags on for decades.

But Beijing has a unenviable track record of exiling or jailing billionaires, often over murky charges of corruption or tax evasion.

If Bass’s accusations prove correct, Ma would be the most high-profile figure to date to meet this fate. For Alibaba shareholders’ sake, let’s hope he is wrong. But given Xi’s totalitarian bent, it would hardly be a surprise if Ma met a similar fate.

Authored by Hozef Arif via LinkedIn.com,

With more than 16 trillion or so of global bonds now offering negative yields and the dovish turn by the Federal Reserve this year, investors have been increasingly drawn to high yield bonds (or “junk” bonds, as they are sometimes called) issued by companies rated below investment-grade.

2019 has been a banner year so far for this riskiest segment of the publicly traded corporate bond markets, with a stellar +11.1% total return year-to-date and in the process driving yields down to 5.8%, a level not seen in HY since January 2018. HY performance also compares very favorably to +18.8% total return for the S&P500 and is nearly equal to the +11.6% total return for the Russell 2000.

This search for yield has culminated in events like issuance of an 8.5 year maturity HY bond @ 3.875% by a fast food chain owner, Restaurant Brands (ticker: QSR). This is among the lowest yield for an 8+ year maturity corporate HY bond since Ball Packaging (ticker: BLL) issued a 10-year HY bond @ 4% in the spring of 2013, right before the market got hit with a “taper tantrum” selloff in rates that summer. 

While conditions were quite different at the time (no signs of yield curve inversion in 2013, for one), any number of catalysts today could trigger a selloff in rates from their current low levels – less dovish European Central Bank ? German stimulus ? Market speculating a pickup in global growth ? Fed failing to deliver rate cuts on the market’s schedule ? Hard to say and predict. Nonetheless it may be instructive to see what clues the current HY market offers in the context of history if the one-way ride lower in interest rates were to suddenly reverse. After all, falling interest rates have contributed to half the total return in HY bonds this year.

The HY bond market today is more exposed to sudden rise in interest rates than at any other time since 2013

This probably sounds like stating the obvious – after all, aren’t all fixed coupon bonds exposed to mark-to-market losses from a rise in interest rates? Rightly so, but the problem here is that more than half of HY index’s exposure to interest rates comes from the BB or higher rated portion of the market that has longer maturities and lower yields than rest of the index and is more exposed to volatility from underlying rates (in general the longer the maturity, the higher the bond’s sensitivity to interest rates). 

At current yields of 4.1% for the BB-cohort, the cushion against a rise in underlying treasury yields is minimal, especially when one looks at the historical chart of BB yields and what has happened every time we have touched or gone below 4% this decade. The story doesn’t get any better even if we look at excess spread over treasuries.

In addition, investors in most HY bonds are short a call option on interest rates – meaning the issuer of the HY bond has the right to pay off or refinance the bonds early at a certain set schedule before maturity – somewhat similar to consumers refinancing their mortgages when rates fall. This puts a ceiling on the price upside in most HY bonds when interest rates go down and on the flip side when rates go higher, prices drop rapidly as the “duration” or sensitivity to interest rates starts to work in the other direction. But unlike mortgage investors who generally hedge out this refinancing risk (convexity), most high yield investors hold their bonds un-hedged for interest rate risk and hence are more exposed to this sensitivity.

One ends up owning a lot of true “junk” to get to the promised high “yield” land, especially if using passive ETFs

One might say the 5.8% yield you get from the overall HY market sounds pretty good compared to getting only 1.5-1.6% in treasuries or less than 3% in the investment grade corporate bond market, especially when default rates remain below average. However, it is important to consider the sources of that 5.8% yield by taking a peek under the hood.

Consider the chart below which shows ratio of lower quality HY bonds (CCC, B rated) to higher quality (BB rated) over the last seven years.

Except for late 2015 / early 2016 energy sector driven default cycle, rarely have lower quality bonds traded this wide to their higher quality counterparts. This is true both for yields as well as for excess spreads (over comparable treasuries). The risk of principle loss via defaults or restructuring is magnitudes higher in lower rated bonds and the higher yields are partly a reflection of investors demanding a lot more compensation to hold that risk, especially compared to the same time last year. More on that in the next section below, but bottom line is — going from supposedly safe BBs at 4% to the full HY index yield of 5.8% comes at a meaningful cost in terms of lowering credit quality

A rising tide of growth may not be able to lift all HY boats

Does this quality-based dispersion within the HY market still mean an attractive investment opportunity exists ? Could a rally in prices of lower quality junk bonds playing “catch-up” more than offset potential mark-to-market losses in higher quality bonds from a rates selloff ? It depends. Improving prospects for global growth may not be enough this time to fix some of issues faced by meaningful swaths of the HY market.

More than half of the overall spread of the high yield index comes from Energy, Telecommunications, Healthcare and Basic Industries as shown in the chart below. For example, energy sector contribution to HY spreads is nearly 2x its actual HY index weight – in rough terms, it means energy sector is perceived to be twice as risky as the average market and the wider spreads (= higher yields = lower prices) reflect that.

Energy sector’s woes are well known by now with threat of looming bankruptcies and distress despite a 25% rally in crude oil prices this year.

Healthcare has its own unique issues with several pharma companies in stress under the weight of opioid liabilities and healthcare services companies exposed to vagaries of regulatory headline risk as election cycle gets near.

Telecommunications sector is exposed to idiosyncratic issuers like Intelsat and Frontier whose fate may decide the sectors performance going forward, notwithstanding the Sprint and T-Mobile merger that seems to be largely priced in.

In conclusion – a lot of things have to go just right for high yield bonds to continue delivering meaningful total returns from here on

To be fair, rising rates against a backdrop of decreasing trade war risk and a trough in global growth may lead to improving prospects for some cyclical sectors within high yield and may also lift the dour energy sector. There is always a possibility that political overhang on healthcare sector may start to diminish. But it remains to be seen whether all that may be enough to overcome the interest rate risk and negative convexity present in tight yielding bonds that make up a majority of the HY market. On the other hand if rates rise but economic growth still fails to uplift the stressed parts of the high yield market, that could stall any further total return prospects for high yield for the remainder of the year.

To circle back to something we discussed at the beginning — how did those Ball Packaging 4% coupon 10-year HY bonds from 2013 perform in the subsequent taper tantrum rout in rates? They dropped -11 points to ~89 cents on the dollar by end of 2013 and did not recover to their original issue price of par (100) until mid-2016. Proving yet again that when investors flee crowded trades, the exit can be quite narrow given the challenged liquidity in the corporate bond market. Something worth keeping in mind as we approach another pivotal Federal Reserve meeting next week.

Today’s much anticipated – yet somewhat understated – Apple event promises some new iPhones, along with the possibility of a new Apple Watch, and maybe some updated MacBooks. Additionally, the tech giant is set to announce pricing for its forthcoming streaming TV service highlighting the company’s shift from hardware to services as the new growth engine.

As Reuters notes, while the iPhone still makes up more than half of Apple’s sales, Tuesday’s event may nudge it off center stage after a decade in the limelight, as analysts suggest Apple is in a “holding pattern” until it rolls out 5G phones with faster mobile data speeds next year.

The new strategy shift (to services), which Apple hinted at an event in March where it gave some details about the streaming TV service, comes as iPhone sales have declined year-over-year for the past two fiscal quarters and investors are fixed on the growth potential for services. Questions about how Apple will price its television service, and whether it will bundle it with its streaming music products, will weigh on the minds of Wall Street and analysts just as much as whether the Apple TV hardware box gets an upgrade or how many cameras the iPhone has. Apple has not yet given a specific launch date or price.

“This is the first time we’ll get to see Apple’s strategy with all three parts of the business,” said Ben Bajarin, an analyst with Creative Strategies.

However, with streaming content, Apple is entering a crowded field but it’s all analysts have to cling to to maintain their high price targets as the new iPhones will feature better cameras, and perhaps new chips to help handle the work of sensors on the device, but few new blockbuster features.

But, while you are all “waiting for 5G”, here is Valuewalk’s Sheeraz Raza detailing what to expect from the iPhone 11 (or XI – will probably need a rename in China?)

If we believe in the rumors, Apple is bringing forward a whole new design for the rear camera, which to be really honest is not too pretty to look at.

Apart from that, the design is mostly similar to iPhone X. According to the rumors, there would be three iPhone 11 models that would be released: iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max.

Have a look at the infographic below to know more about the features that we are expecting from these new iPhones:

iPhone 11 would be the cheapest among all, but not the most compact. It would come with a 6.1-inch LCD display, while the iPhone 11 Pro with come with 5.8-inch OLED display, and the iPhone 11 Pro Max with come with massive 6.5-inch OLED display.

The Pro and the pro max come with Apple pencil support, while the iPhone 11, unfortunately, would not support Apple pencil. So, if you already have an Apple pencil, you will be now able to use it with iPhone pro and iPhone pro max.

Other than that, all the new iPhones will now come with A13 chipset, Face ID, Wi-Fi 6, 12Mp front camera, and bilateral wireless charging. Unfortunately, you won’t get to see under-display fingerprint scanner in the iPhone yet.

For those who are a big fan of 3D touch would also be a little bit disappointed since the newer iPhone would not have that.

The most debatable topic regarding the new iPhones currently is the design of the camera. The new rear camera design to be really honest looks weird and is something that is not expected from Apple.

On the iPhone 11, you will get to see two 12MP cameras, while on the pro and pro max you will get to see an array of three 12MP Cameras.

Talking about the storage and RAM on the new iPhones, iPhone 11 comes with 4GB RAM and 64GB/256GB/512GB storage options. iPhone 11 Pro, on the other hand, comes with 6GB RAM and 128GB/256GB/512GB storage options. Last but not the least, iPhone 11 Pro Max comes with 6GB RAM and 128GB/256GB/512GB storage options.

According to rumors, users will get to see a significant improvement in the battery. iPhone 11 will run on a 3110 mAH battery, iPhone pro will run on 3190+ mAH battery, and pro max will run on 3500+ mAH battery.

Looking at all the rumors, we won’t get to see a lot of changes or improvements as compared to previous iPhone X models, other than the giant weird looking camera setup that we are sure would not be loved by many.

*  *  *

In terms of pricing, most analyst expect prices to remain unchanged from the last year’s models, between $749 and $1,099 depending on size and features.

“I believe we are in an incremental holding pattern until 5G. Customers with iPhone X and beyond likely won’t have a reason to upgrade,” said Patrick Moorhead of Moor Insights & Strategy.

What will the stock price do? Most iPhone launches have resulted in positive price performance 60 days after launch (but the last one disappointed)…

*  *  *

You can watch Apple’s iPhone 11 keynote live here:

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

It’s undoubtedly better to leave some stories alone, and this may be one of them. Putin’s spokesman Dmitry Peskov perhaps put it best when he called it “pulp fiction” (and what’s more American than that?). But this one is so exemplary of how the news is cooked up for you these days, let’s have a go anyway.

What makes this story so ideal for its purpose is that it involves intelligence and state secrets, so the news outlet that runs it doesn’t have to prove a thing; it can simply say it’s not authorized to divulge what it doesn’t write, while hinting it does know. Plus, it can use any number of covert sources.

But in the process, a damning picture can still be painted. And if that picture involves Donald Trump, and it’s CNN that’s painting it, well, we know what it’s going to look like. Here’s how it started at CNN yesterday (with some additions from today):

US Extracted Top Spy From Inside Russia In 2017

In a previously undisclosed secret mission in 2017, the United States successfully extracted from Russia one of its highest-level covert sources inside the Russian government, multiple Trump administration officials with direct knowledge told CNN. A person directly involved in the discussions said that the removal of the Russian was driven, in part, by concerns that President Donald Trump and his administration repeatedly mishandled classified intelligence and could contribute to exposing the covert source as a spy.

The decision to carry out the extraction occurred soon after a May 2017 meeting in the Oval Office in which Trump discussed highly classified intelligence with Russian Foreign Minister Sergey Lavrov and then-Russian Ambassador to the US Sergey Kislyak. The intelligence, concerning ISIS in Syria, had been provided by Israel. The disclosure to the Russians by the President, though not about the Russian spy specifically, prompted intelligence officials to renew earlier discussions about the potential risk of exposure, according to the source directly involved in the matter.

At the time, then-CIA Director Mike Pompeo told other senior Trump administration officials that too much information was coming out regarding the covert source, known as an asset.[..]

Asked for comment, Brittany Bramell, the CIA director of public affairs, told CNN: “CNN’s narrative that the Central Intelligence Agency makes life-or-death decisions based on anything other than objective analysis and sound collection is simply false. Misguided speculation that the President’s handling of our nation’s most sensitive intelligence—which he has access to each and every day—drove an alleged exfiltration operation is inaccurate.”

[..] White House press secretary Stephanie Grisham said, “CNN’s reporting is not only incorrect, it has the potential to put lives in danger.”

The removal happened at a time of wide concern in the intelligence community about mishandling of intelligence by Trump and his administration. Those concerns were described to CNN by five sources who served in the Trump administration, intelligence agencies and Congress. Those concerns continued to grow in the period after Trump’s Oval Office meeting with Kislyak and Lavrov. Weeks after the decision to extract the spy, in July 2017, Trump met privately with Russian President Vladimir Putin at the G20 summit in Hamburg and took the unusual step of confiscating the interpreter’s notes.

Afterward, intelligence officials again expressed concern that the President may have improperly discussed classified intelligence with Russia, according to an intelligence source with knowledge of the intelligence community’s response to the Trump-Putin meeting. Knowledge of the Russian covert source’s existence was highly restricted within the US government and intelligence agencies. According to one source, there was “no equal alternative” inside the Russian government, providing both insight and information on Putin.

Pretty bad, right? Well, we’re not done just yet. Here’s the BBC adding its two cents:

US Extracted High-Level Spy From Inside Russia In 2017, Reports Say

Russian media named the spy as former presidential administration official Oleg Smolenkov. The Kommersant newspaper said Mr Smolenkov went on holiday with his family to Montenegro in 2017 and disappeared, before a man with the same name and a woman with the same name as Mr Smolenkov’s wife purchased a house in the US state of Virginia, near Washington DC. Russian reports said Mr Smolenkov had worked for Yury Ushakov, a senior aide to President Putin.

Asked by the BBC on Tuesday about the reports, Kremlin spokesman Dmitry Peskov confirmed that Mr Smolenkov had worked for the presidential administration but denied that he had held a high-level position, adding that he had been sacked. Mr Peskov described the US media coverage of the reported extraction as “pulp fiction”.

There was no suggestion on Tuesday that President Trump directly compromised the source in Russia, and reports said that widespread media speculation about US intelligence conclusions had contributed to the decision to extract the source. Last year, Russian operatives travelled to England and used a nerve agent in an assassination attempt against a former Russian military intelligence officer, Sergei Skripal, who had spied for the British.

Isn’t it just lovely how they manage to throw in Skripal there at the end? Took a bit of stretching, but the BBC is plenty flexible.

Okay, so this alleged spy is extracted (or “exfiltrated”) by US intelligence, and then buys a home in Virginia. But not only that, he buys it under his own name. Presumably so that if Putin wants to find the man who divulged all those secrets for 10 years+, he can just Google him. Here’s NBC:

Possible Russian Spy For CIA Now Living In Washington Area

A former senior Russian official is living in the Washington area under U.S. government protection, current and former government officials tell NBC News. NBC News is withholding the man’s name and other key details at the request of U.S. officials, who say reporting the information could endanger his life. Yet the former Russian government official, who had a job with access to secrets, was living openly under his true name.

An NBC News correspondent went to the man’s house in the Washington area and rang the doorbell. Five minutes later, two young men in an SUV came racing up the street and parked immediately adjacent to the correspondent’s car. The men, who identified themselves only as friends of the Russian, asked the correspondent what he was doing there.

[..] The [New York] Times said the source was “the American government’s best insight into the thinking of and orders” from Putin, and was key to the CIA’s assessment that Putin favored Donald Trump’s candidacy and personally ordered the hacking of the Democratic National Committee.

The Times previously reported that the source was considered so sensitive that then-CIA Director John Brennan had declined to refer to the person in the top secret Presidential Daily Brief during the final months of the Obama administration. Brennan sent reports from the source to the president and a small group of top national security aides in a separate, white envelope to assure its security, the Times reported.

[..] NBC News has not confirmed that the Russian living near the nation’s capital fed the CIA information about Russian election interference. But for reasons that NBC News is withholding, he fits the profile of someone who may have had access to information about Putin’s activities and who would have been recruitable by American intelligence officials.

Two former FBI officials told NBC News they believe he is the source referred to in the CNN and New York Times report. The Russian will likely be moved from the place he is currently living in the interest of keeping him safe, current and former officials said.

He will be moved in the interest of keeping him safe. That is just brilliant. What, you think Putin will be upset at no longer being able to Google his whereabouts?

To remain fair, let’s give RT some space, too, shall we?

Was Key CIA Spy ‘Extracted’ From Moscow Over #Russiagate Fears?

Media outlets in Russia immediately began speculating as to the identity of the alleged mole, quickly settling on Oleg Smolenkov, state advisor of the third class who had worked at the Russian embassy in Washington before 2010. Smolenkov took his wife and three children on vacation to Montenegro on July 14, 2017, whereupon they vanished without a trace. The police have been investigating their disappearance as possible murder.

[..] Russian Senator Franz Klintsevich, deputy head of the Defense and Security Committee, dismissed CNN’s story as “fake” and “carrying out orders for another attempt to discredit Trump,” according to TASS. Most of the US mainstream media outlets spent the past three years promoting the notorious ‘Russiagate’ conspiracy theory on behalf of the Democrats, and have refused to acknowledge any wrongdoing even though special counsel Robert Mueller failed to find anything to incriminate the president after a two-year investigation.

Moreover, CNN and MSNBC have hired a number of former intelligence officials, whose fingerprints have been all over ‘Russiagate,’ as anti-Trump pundits.

John Brennan, James Clapper, here’s looking at you. There was no need today to read much further in order to find out that the secret info Trump is accused of divulging to “the Russians” had already been published first by no other than…CNN on March 31 2017. There was no secret. Other than perhaps, says Aaron Maté, that Israel was the source. But trust us, Putin would have known that.

After the Mueller report fiasco, one would think the media who don’t like Trump would be more careful with their reporting, and before reporting it. But they just keep at it.

In the process, as quoted above, through their false reporting and false claims, it’s they who are endangering lives, not Donald Trump:

Brittany Bramell, the CIA director of public affairs, told CNN:

“CNN’s narrative that the Central Intelligence Agency makes life-or-death decisions based on anything other than objective analysis and sound collection is simply false. Misguided speculation that the President’s handling of our nation’s most sensitive intelligence—which he has access to each and every day—drove an alleged exfiltration operation is inaccurate.” [..]

White House press secretary Stephanie Grisham said,

 “CNN’s reporting is not only incorrect, it has the potential to put lives in danger.”

It’s not just the White House, the CIA itself says it too.

Asking for a friend: You think the country’s still capable of having a normal conversation?

Just in case the last few disappointing payrolls reports weren’t sufficient to warn the general public that the US economy is slowing, moments ago we got the latest JOLTS which confirmed that the US labor market is going through a rough patch, as the total number of job openings dropped again, sliding to 7.217 million, below the 7.331 million expected, and not only below the downward revised June print of 7.248 million, but was the lowest since February.

That said, even with the slowing number of job openings, there was still more than 1.2 million more job opening than unemployed workers; in fact there have now been more US job openings than unemployed workers for a record 17 consecutive months.

It wasn’t all bad news though: after last month’s sharp drop in the rate of hiring, total hires surged by 237K to 5.953 million, just shy of the record set in April with 5.991 million, and now modestly above where the payrolls implied number suggests:

The spike in hiring meant that from an annual contraction, hiring once again rebounded into the green, rising by 2.1% in July, up from a -2.0% drop in June.

Finally, in another bullish reversal, we saw the so-called “take this job and shove it” indicator – the total level of “quits” which shows worker confidence that they can leave their current job and find a better paying job elsewhere – reverse from last month’s disappointing drop, and in July, the number of quits surged by 130K from a 2019 low of 3.462MM to 3.592MM, just shy of the record set last August with 3.648MM.

Overall, a decidedly better JOLTS report than one would expect in light of last week’s poor payrolls number. Then again, recall that JOLTS is 2 months delayed, so we wouldn’t be surprised if next month’s JOLTs is where the real ugliness lies.