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A Bloomberg report reveals how a Mexican bank employee directed a retirement fraud scheme at American retirees living in San Miguel de Allende, a city in Mexico’s central highlands.

Monex Casa de Bolsa SA de CV Monex Grupo Financiero has been investigating allegations that an employee stole approximately $40 million from American clients.

Marcela Zavala Taylor, the suspected Monex banker at the center of the fraud, allegedly sent American clients falsified statements that showed their accounts were fully funded, said several of the bank’s clients in a Bloomberg interview.

The fraud was discovered in late December when clients couldn’t retrieve funds from their accounts. Bank officials told clients that $40 million in funds from 158 accounts disappeared.

Bloomberg spoke with several clients who said Monex attempted to reach settlements at a massive discount versus what was stolen from their accounts. Others said the bank asked them to file charges against Zavala.

“Legal action is continuing in the case, and details cannot be disclosed so as not to hinder the investigation,” Monex said in a statement. Bank spokeswoman Eva Gutierrez said Monex is working with affected clients and has settled with 70% of them.

Kenneth Karger, a retiree from Texas with property in Mexico, says Monex stole $400,000 from him. It was only last summer when he stopped receiving statements. Karger said, Zavala at the time, told him Monex was transitioning onto a new online banking system, and the account balance would be delayed for some time. Months later, Karger retrieved statements from Monex and discovered unauthorized withdrawals.

Bruce Brown, an Australian retiree who’d lost $250,000, was refunded entirely by the bank after he notified Mexican authorities.

Monex is an affiliate of Banco Monex SA Institución de Banca Múltiple Monex Grupo Financiero, with $5.2 billion in assets under management and operations in the US.

According to Condusef, Mexico’s consumer protection agency, there were 7.3 million complaints of financial fraud involving 18.9 billion pesos (about $1 billion) last year.

The scandal has devastated the expatriate community in San Miguel, as non-citizens have limited rights.

via ZeroHedge News http://bit.ly/2YXLThp Tyler Durden

Authored by Tsvetana Paraskova via OilPrice.com,

U.S. gasoline prices jumped the most since 2011 between New Year’s Day and early May this year, a few weeks before the unofficial start of the summer driving season – Memorial Day. But the national average price for regular gas has trended lower since it hit its highest so far this year on May 3.

Average U.S. prices of regular gasoline were down this Memorial Day weekend compared to last year’s and were lower than last week and last month, too.

AAA expected a record number of Americans to have hit the road by car this weekend—at 37.6 million, the number was the most on record for the holiday and 3.5 percent more than last year.  

While this year’s Memorial Day average gas price of $2.830/gal is down compared to last year’s average of $2.975, and gasoline prices may continue to drop in the next two to three weeks, analysts and government estimates point to rising gas prices in the second half of the summer season due to higher gasoline demand and gasoline refining margins, and lower gasoline inventories.  

The highest average price this year was hit on May 3, at $2.916/gal, according to GasBuddy. The price-tracking website and its analysts believe that the downward movement will continue for another couple of weeks.

Questions remain, however, about the price trends in the second half of the summer, GasBuddy Head of Petroleum Analysis, Patrick DeHaan, told Yahoo Finance on Friday.

For the next two-three weeks, average gas prices are expected to come down as refineries have already emerged from the spring maintenance season, producing more gasoline. Yet, after mid-June, several factors could drive gas prices higher and potentially up to a national average of $3/gal. These include the possibility of a U.S.-China trade deal that would lift global oil prices and the hurricane season in July and August potentially disrupting gasoline supply from U.S. Gulf Coast refineries, according to DeHaan.

Speaking to FOX Business on Friday, DeHaan said that “relief is certainly coming” over the next few weeks, expecting the national average to slip by 5 to 10 cents.  

According to AAA, “Increased gasoline stocks amid robust summer demand may help to suppress pump prices” in coming weeks.  

Earlier this month, AAA forecast that the vast majority of travelers—37.6 million—would hit the road by automobile this Memorial Day weekend—the most on record for the holiday and 3.5 percent more than last year.

“Overall, prices are very similar to this time last year and, like then, they aren’t letting that deter them from taking summer road trips,” AAA gas price expert Jeanette Casselano said, commenting on Americans’ summer plans.

According to GasBuddy’s 2019 Summer Travel survey, almost 75 percent of Americans said they would take a road trip this summer, up by 16 percent compared to last year. A total of 38 percent cited high gas prices as impacting their summer travel decisions, nearly the same as the gas price sentiment last year.

Vehicle management and reimbursement platform Motus predicted in mid-May that Americans are expected to drive a record number of miles in the third quarter, as employment and population grow. U.S. highway travel is expected to increase by 1.3 percent this summer, and the national average fuel price would be between $2.90 and $3.15 for Q3 2019, Motus market research analyst Ken Robinson said on May 15.

“Price movement will depend heavily on whether OPEC+ countries agree to increase production when they meet at the end of June and how quickly they execute. Additionally, unexpected supply disruptions in unstable areas could also affect these predictions,” Robinson said.

The new IMO rules on shipping fuel could also drive U.S. gas prices higher, as they could lift diesel demand and prices and constrain gasoline supplies in the U.S., Robinson told MarketWatch last week.

The EIA expects U.S. regular gasoline retail prices to average $2.92/gal for the 2019 summer driving season, up from an average of $2.85/gal last summer.

“The higher forecast gasoline prices primarily reflect EIA’s expectation of higher gasoline refining margins this summer, despite slightly lower crude oil prices,” the EIA said in its latest Short-Term Energy Outlook.  

via ZeroHedge News http://bit.ly/2EGJlwF Tyler Durden

Tesla is moving things around at its Fremont plant in order to make way for the upcoming Model Y and a newly reported Model S refresh, according to CNBC. The new Model S, Tesla’s flagship car, is said to have a longer-range battery and and a more “minimalist” interior design, according to current and former Tesla employees, who said the company is reportedly aiming for September for its Model S refresh. 

The decision to re-arrange the Fremont plant and begin working on assembling two new vehicles comes at a precarious time for Tesla’s cash balance. The automaker recently made another round of “hardcore” cost-saving cuts last week – including ditching toilet paper at some facilities – which begs the question of how capital intensive this new shift at Fremont could be.

Regardless, the company appears to be betting on its ability to redouble its efforts in the luxury segment with the Model S and capture more of the growing SUV segment with the Model Y. CEO Elon Musk had previously suggested the Model Y would be made at Fremont (why wouldn’t it, it’s essentially another Model 3), but no official announcement has been made. 

According to Tesla insiders, Tesla will be required to combine the Model S and Model X production into one line to be able to produce the Model Y at the facility. The design of the Model X has been notoriously complex, and it requires a significant footprint on the factory floor to build. Tesla CEO Musk had said on Twitter recently that tours of the facility were being cancelled due to “upgrades”. 

Part of the factory is being upgraded, but tours will continue around the parts that aren’t

— Elon Musk (@elonmusk) May 23, 2019

Insiders say that the Model S refresh will “likely include an interior with the minimalist look and feel of the newer Model 3, the same drive units and seats used in the higher-end Model 3 and a battery that delivers 400 miles of range on a full charge.”

Additionally, after last week’s barrage of sell side downgrades – which included Wedbush, Citigroup and Morgan Stanley, among others – Tesla caught another downgrade mid-week from Consumer Edge, who lowered their price target on the name from $310 to $225, according to Bloomberg. 

Their note mentioned that the latest equity and convertible note issuance signals Tesla “is not yet a capital efficient manufacturer with a self-funding business model”. Analyst Derek Glynn also noted a higher cost of capital for the company in the future and mentioned that potential acquirers and suitors for partnerships are few and far between. His most likely scenario is that Tesla “remains an independent company that explores partnerships with large social media platforms to quickly scale its autonomous ride-sharing network”.

via ZeroHedge News http://bit.ly/2HILdXG Tyler Durden

US equity markets just took another leg lower, pushing all back below their 200-day moving-averages as 10Y yields touch 2.21% and the dollar extends recent gains…

The Dow is back below 25,000…

S&P (lower left) and Nasdaq (upper left) join Dow (upper right) and Small Caps (lower right) back below the 200DMA…

As bond yields just keep sliding…

And the dollar soaring…

via ZeroHedge News http://bit.ly/2KcJmvZ Tyler Durden

A new US intelligence assessment has concluded that Russia has likely been secretly conducting “very low-yield nuclear tests to upgrade its nuclear arsenal,” marking the first time Washington has accused the Kremlin of failing to strictly observe its commitments under the Comprehensive Nuclear Test Ban Treaty, according to the Wall Street Journal.

The alleged tests, conducted at the remote archipelago of Novaya Zemlya above the Arctic Circle, come as the agreed upon arms-control framework between the new nations has shown signs of deteriorating, as both sides pursue “ambitious programs” to develop new nuclear weapons. 

Negotiations for the Comprehensive Nuclear Test Ban Treaty, which bans test explosions of nuclear weapons of any size, concluded in 1996. The treaty hasn’t been ratified by enough countries to take effect, but the world’s major powers have agreed to abide by its terms.

The treaty allows a range of activities to assure the safety and reliability of nuclear weapons as long as they don’t produce a nuclear explosive yield, including experiments involving fissile material. –Wall Street Journal

“The United States believes that Russia probably is not adhering to its nuclear testing moratorium in a manner consistent with the ‘zero-yield’ standard,” Lt. Gen. Robert Ashley, director of the US Defense Intelligence Agency planned to say in a Wednesday speech at the Hudson Institute think tank, according to his prepared remarks. 

Officials have declined to reveal the size of the alleged Russian tests, nor would they say if concerns over the tests have been raised directly with Moscow. 

An official at the Russian Embassy in Washington said his government strictly observes the provisions of all international treaties it has joined, including the nuclear test ban treaty, which Moscow ratified in 2000.

The U.S. has been observing a moratorium on nuclear tests since 1992 and says its experiments are designed to not produce a nuclear yield. The U.S. was the first nation to sign the accord, but it never ratified the treaty. –Wall Street Journal

In February, the Trump administration committed to withdrawing from a Reagan-era treaty on intermediate-range nuclear weapons, alleging that Russia had been breaking it with the development of new missiles, including the nuclear-capable Novator 9M729. NATO agreed. Last October, spokesperson Oana Lungescu said of the Novator system, “After years of denials and obfuscation, Russia recently acknowledged the existence of the missile system without providing the necessary transparency and explanation. In the absence of any credible answer from Russia on this new missile, Allies believe that the most plausible assessment would be that Russia is in violation of the INF Treaty.”

The US-Russian treaty to reduce long-range nuclear arms, meanwhile, is set to expire in February 2021. The Trump administration is reviewing whether it will extend the accord, try and modify it, or scrap it altogether in favor of new negotiations. 

“The Comprehensive Test Ban Treaty, unratified though it is by the U.S. but with 184 signatories, may be the last remaining cornerstone in the arms control order,” said former Clinton-admin NSC official Steve Andreasen. 

The nuclear test ban agreement came after long and difficult negotiations. When it was first drafted, the US, UK, France, China and Russia were all in favor of conducting low-level nuclear explosive tests to ensure that their nuclear forces were up to snuff. 

President Clinton, however, pressed for a ban on all tests – while allowing for no-yield testing of systems. 

In drafting the treaty, the Clinton administration decided it was unnecessary and potentially “problematic” to try to negotiate a technical definition of the nuclear explosions that would be banned, U.S. officials told Congress at the time.

But the U.S., U.K., France, Russia and China exchanged still-confidential letters on the activities they agreed wouldn’t be prohibited, according to a June 18, 1997 presidential directive signed by Mr. Clinton that hasn’t been made public but was reviewed by The Wall Street Journal.

Stephen Ledogar, the chief U.S. negotiator on the treaty, told Congress in 1999 that the Russians had been surprised by Mr. Clinton’s insistence on the zero-yield issue but had “slowly and painfully” agreed to it during the talks. –Wall Street Journal

According to the report, a senior Trump administration official said that the US wasn’t interested in the resumption of nuclear testing, and that tests by Russia and China above “zero yield” would be unacceptable. 

“We do not want to be held to a different standard than Russia and China,” said the official. 

What’s wrong with low yield tests?

Former director of Los Alamos National Laboratory, Siegfried Hecker, says that low-yield tests, equivalent to around 4 pounds of TNT or less, would be able to help determine the safety of nuclear weapons, but not to design new weapons. 

“It would be unfortunate if they were doing something at Novaya Zemlya that was not in the spirit of a zero-yield CTBT,” said Hecker. “But would the Russians somehow be able to gain an advantage for new systems if they were doing something slightly more than that? My general sense is no.”

That said, according to Gen. Ashley, the tests at Novaya Zemlya could help the Russians to continue to develop or improve on its nuclear arsenal. 

“Our understanding of nuclear weapon development leads us to believe Russia’s testing activities would help it to improve its nuclear weapons capabilities.”

via ZeroHedge News http://bit.ly/2QyAaTS Tyler Durden

Authored by Dave Huber via The College Fix,

Students at a Pennsylvania high school are miffed that their “Make America Great Again” hats were blurred out in a school yearbook photo.

Littlestown High School student Jeremy Gebhart and a friend say they decided to show support for President Trump back in October during the school’s spirit week. Someone snapped a pic of them which eventually made it to the school yearbook … albeit with an alteration.

“We were like they blurred our hats out!” Gebhart said.

According to FOX-43, Gebhart alleges his First Amendment rights were violated. “Everybody has First Amendment rights, freedom of speech and they are allowed to think what they want and say what they want but they aren’y allowed to take that away from other people.

“I just think that whoever did this doesn’t like Trump,” Gebhart said.

At a public school? Naw! Couldn’t be!

From the story:

“I was infuriated because he wears that hat because he supports our president,” said Lorriane Gebhart, Jeremy’s mother. “He’s not doing anything illegal he’s wearing a hat of support,” she added. …

Gebhart says she is disappointed in the school’s decision to blur the hats.

“It’s very upsetting,” said Gebhart. “Someone used this on purpose to blur out that Trump logo and make their own statement,” she added. …

In a statement the superintendent [Christopher Bigger] wrote “I am aware of the yearbook situation and a mistake was made.   The mistake was not noticed during the editorial preview process prior to print.   We apologize on behalf of the yearbook club.  It is not the policy or practice of the district to improperly censor speech. It is not the policy or practice of the district to improperly censor speech. Please understand we are working with young adults who are practicing to become citizens and what a better place to do so than in a school setting.”

Though the report says “it’s unclear at this point” who made the decision to photoshop out the “MAGA” logos, the final responsibility typically falls to the school yearbook advisor(s).

via ZeroHedge News http://bit.ly/2I5dVRC Tyler Durden

It’s going from bad to worse for Europe, whose currency had just hit session lows after Brussels confirmed that Italy faces a massive fine over its debt, when the Euro was hit with a double whammy after Bloomberg reported that the Trump administration is escalating its battle with “European allies” over the fate of the Iran nuclear accord, and is “threatening penalties against the financial body created by Germany, the U.K. and France to shield trade with the Islamic Republic from U.S. sanctions.“

According to Bloomberg, the Treasury Department’s undersecretary for terrorism and financial intelligence, Sigal Mandelker, sent a letter on May 7 warning that Instex, the European SPV to sustain trade with Tehran, and anyone associated with it could be barred from the U.S. financial system if it goes into effect.

As a reminder, last September, in order to maintain a financial relationship with Iran that can not be vetoed by the US, Europe unveiled a “Special Purpose Vehicle” to bypass SWIFT. Back then we predicted that Washington would not be too delighted with this development seeking to undermine the dollar’s reserve status. We were right.

“I urge you to carefully consider the potential sanctions exposure of Instex,” Mandelker wrote in the letter to Instex President Per Fischer. “Engaging in activities that run afoul of U.S. sanctions can result in severe consequences, including a loss of access to the U.S. financial system.”

Germany, France and the U.K. finalized the Instex system in January, allowing companies to trade with Iran without the use of U.S. dollars or American banks, allowing them to get around wide-ranging U.S. sanctions that were imposed after the Trump administration abandoned the 2015 Iran nuclear deal last year.

Not surprisingly, a senior admin official behind the eltter said the U.S. decided to issue the threat “after concluding that European officials, who had earlier downplayed the significance of Instex in conversations with the Trump administration, were far more serious about it than they had initially let on.“

The official, who asked not to be identified discussing internal deliberations, said the letter was intended to serve as a warning that the U.S. would punish anyone associated with Instex — including businesses, government officials and staff — if they were working to set up a program to help Iran evade U.S. sanctions.

“This is a shot across the bow of a European political establishment committed to using Instex and its sanctions-connected Iranian counterpart to circumvent U.S. measures,” said Mark Dubowitz, the chief executive officer of the Foundation for Defense of Democracies in Washington.

When asked to comment on the letter, the Treasury Department issued a statement saying “entities that transact in trade with the Iranian regime through any means may expose themselves to considerable sanctions risk, and Treasury intends to aggressively enforce our authorities.”

At the heart of the latest US move is the argument that Iran and its central bank use deceptive financial practices and haven’t implemented minimum global safeguards against money laundering and terrorism financing, according to Bloomberg.

While it is obvious that the US ire was sparked by the realization – and alarm – that cracks are appearing in the dollar’s reserve status, opponents of Instex argue – at least for public consumption purposes – that the mechanism is flawed because the Iranian institution designated to work with Instex, the Special Trade and Finance Instrument, has shareholders with links to entities already facing sanctions from the U.S.

Meanwhile, during a visit to London on May 8, Mike Pompeo also warned that there was no need for Instex because the U.S. allows for humanitarian and medical products to get into Iran without sanction.

“When transactions move beyond that, it doesn’t matter what vehicle’s out there, if the transaction is sanctionable, we will evaluate it, review it, and if appropriate, levy sanctions against those that were involved in that transaction,” Pompeo said. “It’s very straightforward.”

In 2018, Europe made a huge stink about not being bound by Trump’s unilateral breach of the Iranian deal, and said it would continue regardless of US threats. But now that the threats have clearly escalated, and Washington has made it clear it won’t take no for an answer, it will be interesting to see if Europe’s resolve to take on Trump – especially in light of the trade war with China – has fizzled.

via ZeroHedge News http://bit.ly/2EG08zP Tyler Durden