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Just days after Facebook again snubbed the UK Parliament by refusing to send CEO Mark Zuckerberg to testify at a hearing of the House of Commons select committee for Digital, Culture, Media and Sport (the social media giant is sending a product VP instead), the DCMS has taken its revenge by seizing documents from a US lawsuit that could reveal what senior Facebook management knew and when about the company’s data and privacy controls.

According to the Guardian, which broke the news about the seizure, the cache of documents could include “significant revelations about Facebook decisions on data and privacy controls that led to the Cambridge Analytica scandal.” It’s believed that the cache of documents includes confidential emails between senior Facebook executives – possibly even Zuckerberg himself. 

But even more galling than the seizure itself is how DCMS went about it. The documents were seized from the CEO of a US startup, Six4Three, who had been traveling in the UK on business. Six4Three is suing Facebook, alleging abuses of data privacy similar to those that are being investigated in the UK and the US. Once Parliament learned that the startup’s CEO was in the country, it demanded that he turn over the documents. When he refused, Parliament sent a  sergeant at arms to his hotel room to deliver the warning in person. When he again refused, he was escorted to Parliament and threatened with imprisonment.

Damian Collins, the chair of the culture, media and sport select committee, invoked a rare parliamentary mechanism to compel the founder of a US software company, Six4Three, to hand over the documents during a business trip to London. In another exceptional move, parliament sent a serjeant at arms to his hotel with a final warning and a two-hour deadline to comply with its order. When the software firm founder failed to do so, it’s understood he was escorted to parliament. He was told he risked fines and even imprisonment if he didn’t hand over the documents.

But Damian Collins, the chair of the committee, said these brazen actions were justified due to Facebook’s refusal to cooperate, as well as a company representatives’ misleading comments before Parliament earlier this year about the level of control Facebook users have over their data. According to Collins, the DCMS has been “following” Six4Three’s lawsuit against Facebook, and believes the documents could contain the information that the committee has been seeking.

“We are in uncharted territory,” said Collins, who also chairs an inquiry into fake news. “This is an unprecedented move but it’s an unprecedented situation. We’ve failed to get answers from Facebook and we believe the documents contain information of very high public interest.”

[…]

“We have very serious questions for Facebook. It misled us about Russian involvement on the platform. And it has not answered our questions about who knew what, when with regards to the Cambridge Analytica scandal,” he said.

“We have followed this court case in America and we believed these documents contained answers to some of the questions we have been seeking about the use of data, especially by external developers.”

Those who have been following this drama since the spring will remember that Zuckerberg insisted that the company had no knowledge of illegal data harvesting by Cambridge Analytica. It’s very possible that the correspondence in the seized documents could out Zuckerberg as a liar. That would only further enrage Parliament, possibly leading to some kind of sanction or punishment, or even a warrant for Zuckerberg’s arrest (lying to Congress is illegal, after all). That’s the last thing Facebook shareholders want (considering that they’ve already watched the company’s shares erase more than $100 billion in valuation since the Cambridge Analytica scandal broke earlier this year.

Given that Parliament is located in the UK, a jurisdiction that is beyond the reach of US courts, one would expect that there’s little to be done within the US legal system to try and enjoin Parliament from reading the documents. But that didn’t stop Facebook from trying.

The files are subject to an order of a Californian superior court, so cannot be shared or made public, at risk of being found in contempt of court. Because the MPs’ summons was issued in London where parliament has jurisdiction, it is understood the company founder, although a US citizen, had no choice but to comply. It is understood that Six4Three have informed both the court in California and Facebook’s lawyers.

Unsurprisingly, members of DCMS laughed in Zuckerberg’s face, with one MP tweeting that it was “too late”…

Facebook said: “The materials obtained by the DCMS committee are subject to a protective order of the San Mateo Superior Court restricting their disclosure. We have asked the DCMS committee to refrain from reviewing them and to return them to counsel or to Facebook.” Too late.

— Ian Lucas MP (@IanCLucas) November 25, 2018

…While Collins ominously tweeted that there would be “more next week.”

More next week – Parliament seizes cache of Facebook internal papers https://t.co/129OkaGe7k

— Damian Collins (@DamianCollins) November 25, 2018

This is coming at the worst possible time for Facebook: its are in free fall, a backlash is growing inside the US after reports that it hired a Republican oppo research organization to smear George Soros, and accusations that it has facilitated the spread of “Fake News” are once again back in the headlines. Though he still retains nearly absolute control of the company, Zuckerberg’s grip on power has almost never looked shakier.

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Authored by Lance Roberts via RealInvestmentAdvice.com,

Oil Sends A “Crude Warning”

As with many Americans, I am on the road with the family making the traditional holiday rounds. Of course, my family is more “The Griswolds” than “The Waltons. but even with all of the antics, comedy, and occasional drama, it is always an enjoyable time of the year.

However, I did wake up from my tryptophan-induced coma long enough to pen a few thoughts on the crash in crude oil and the message it is sending.

On Monday, I am publishing an article on the fallacy that “falling energy prices are an economic boost.” It isn’t, and we dig into all the reasons why in that article.

However, the short version is that oil prices are a reflection of supply and demand. Global demand has already been falling for the last several months and oil prices are now waking up that reality. More importantly, falling oil prices are going to put the Fed in a very tough position in the next couple of months as the expected surge in inflationary pressures, in order to justify higher rates, once again fails to appear. The chart below shows breakeven 5-year and 10-year inflation rates versus oil prices.

Oil prices also tend to lead the broad economic cycle as well. The chart below is one of the broadest measures of economic activity and is comprised of leading economic indicators, Fed regional manufacturing surveys, NFIB small business survey, ISM, CFNAI, and Chicago PMI.

Since most of the economic data we look at is trailing, and subject to heavy negative revisions, the collapse in oil prices suggests that coming economic reports will likely be materially weaker than currently expected.

Can I Have A Side Of Debt

But there is another enormous problem currently for the oil and gas sector currently at risk – the debt.

For the last few years, oil companies have been taking of the extraordinarily low interest rate environment to leverage up to chase marginally productive drilling in high-depletion rate shale wells.

Since energy-related bonds make up about 15% of the high-yield index, and with a substantial number of corporate bonds on the verge of falling below BBB ratings in the months ahead, the potential impact of falling energy prices (a reduction in revenue) and higher borrowing costs is a potential double-whammy to an important sector of the economy.

Mark J. Grant recently made some interesting points on this issue:

“Moody’s said the amount of U.S. corporate bonds outstanding, rated at its lowest investment-grade level of Baa, rose to a record $2.83 trillion in the third quarter, topping the $2.62 trillion in single A corporate bonds and the $629 billion in outstanding bonds rated Aa or higher. Within the Baa group, the dollar amount of bonds rated Baa3, Moody’s lowest investment grade rating, ballooned by 140% from the fourth quarter of 2007 to a record $705 billion, in 2018’s third quarter.

Here again, the Fed is not helping, as they are driving up borrowing costs for all of these companies, across the board. There is also a danger here to many insurance companies as their credit rating could be downgraded, if more of the bonds that they own are reclassified as ‘Junk.’ Here is another ‘doom-loop’ scenario that is playing itself out as yields rise and now gap out, in many credits, versus Treasuries.

Baa3 grade corporate debt outstanding has now reached an ‘unprecedented’ 56.8% of speculative-grade, or ‘junk,’ high-yield corporate bonds outstanding. By comparison, the ratio of outstanding Baa3 rated bonds to high-yield bonds was 32.5% before the 2008-2009 financial crisis, 36.9% before the 2001 recession and 22.2% before the 1990-1991 downturn. Startling figures, no doubt.

Moody’s stated:

Thus, from the perspective of dollar amounts outstanding, the U.S. investment-grade corporate-bond market is now riskier than it was before each recession since 1981 and possibly all prior downturns through the late 1940s. Greater uncertainty surrounds the sustainability of corporate earnings growth has adversely affected the performance of medium- and lower-grade bonds. Not since September 2016 has the long-term Baa industrial spread remained above 200 basis points on a recurring basis.”

The collapse in oil prices, which is a direct impact to revenue for oil and gas companies, is going to make already nervous lenders even more adverse to lending to the sector. Secondly, demands to shore up credit-lines, increase loan covenants, provide additional collateral, or simply increase borrowing costs could have a materially negative impact on the sector as a whole.

I Warned You

But none of this should really be a surprise – as I wrote back in August:

“The rise in crude prices from the lows has also been primarily responsible for the uptick in both economic growth and inflationary readings. However, higher oil prices are also a ‘double-edged sword’ which also acts as an additional tax on consumers as well as corporate profit margins. The push above $70/bbl led to a massive surge in crude oil speculators chasing price but also provides the ‘fuel’ for a sharp reversal as well.

For investors, it is also worth noting that crude oil positioning is also highly correlated to overall movements of the S&P 500 index and earnings growth. With crude traders currently extremely ‘long,’ a reversal will likely coincide with both a reversal in the S&P 500 and oil prices being pushed back towards $55/bbl.” 

“While oil prices could certainly fall below $55/bbl for a variety of reasons, there is reasonable support around $50-55/bbl barring an economic recession.”

Since then, that prediction has become a disappointing reality. However, it is critically important that oil holds support at $50/bbl, otherwise, you are looking at oil prices near $40/bbl, substantially weaker economic data, and even lower stock market values.

Oil prices are just another confirming factor that we have likely edged into a “bear market” and downside risk continues to outweigh upside reward.

Last week, we further reduced equity risk further bringing exposures down to just 40% of our portfolios. On a rally to the 200-dma which fails, we will reduce risk more and add negative hedges to portfolios.

Daily View

There is little good news to be had this week. The market broke recent lows and will now be looking to retest the lows of earlier this year. With the 50-dma sloping sharply lower and the 200-dma following suit, the backdrop of the market has turned decidedly “bearish.” 

More importantly, and also a negative, is the market is now consistently trading below the 200-dma. This should serve as a warning to investors to reduce equity exposure on rallies and remain hedged until these trends begin to reverse themselves.

Action: After reducing exposure in portfolios previously, we reduced risk further this past week. Sell weak positions into any market strength on Monday.

Weekly View

As stated previously, since we prefer longer-term holding periods for our positions, we prefer to use weekly and monthly data to reduce the number of signals but reveals the more important overall trends of the market.

On a weekly basis, the market is now extremely oversold on both a relative-strength basis and prices are pushing 2-standard deviations below the 50-week moving average. As shown below, on a weekly basis, a “sell signal” has been registered for the second time this year suggesting that investors reduce equity risk in portfolios.

However, given the extreme oversold conditions of the market, look for a rally through the end of the year to make adjustments to overall risk exposures.

Note that such reversions from prior over-extensions are usually associated with more meaningful market events. However, as I noted on Tuesday at RIA PRO

“Currently, the market is oversold and is set up for a short-term bounce. In the next few days, we will look to add a trading position to portfolios for a potential year-end rally. As we have stated previously, we are moving into the ‘seasonally strong’ period of the year combined with a post-midterm election period which has historically equated to a positive push in the market.

However, nothing is guaranteed so the recent changes to portfolios to raise cash, shore up risk, shorten-durations, and increase credit quality all remain prudent actions.

Most importantly, while the market will indeed garner a rally over the next couple of months, such will not change the fact that we are in the midst of a substantially more important topping process. The chart below lays out the potential range for a bounce before a continuation of the current decline ensues.”

I want to caution you that by the time longer-term sell signals are issued, the market tends to be more extremely oversold and due for a reflexive bounce. It is still highly advised that bounces be used to reduce equity exposure until there is a definitive improvement in the overall technical backdrop of the market.

Action: Sell weak positions into any strength next week.

Monthly View

Moving back to a monthly view, signals become much slower and much more important. However, signals are ONLY VALID on the 1st trading day of each month. Therefore, while the markets have registered a monthly signal as of this week, it will ONLY be valid if the markets fail to rally enough to reverse it by the end of the month.

Nonetheless, the deterioration in the markets is extremely concerning and by slowing the signals down further to crosses of very long-term moving average, the risk to investors becomes much clearer.

Action: Reduce risk on rallies, as detailed above, and look to add hedges.

As always, the messages being sent by the market are more than just concerning and suggests that actions be taken to reduce portfolio risk on rallies in the weeks ahead. 

I warned previously the Fed was likely to hike rates until something broke.

“But one thing is for sure…if something hasn’t already broken, it will break soon if rates keep rising.

That day may be much sooner than most expect.”

It continues to appear that day has come.

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Mexico’s incoming government has denied striking a “Remain in Mexico” deal with President Trump which would require migrants applying for US asylum to wait in Mexico, according to Reuters. 

There is “no agreement of any type between the future government of Mexico and the United States,” said Olga Sanchez Cordero, Mexico’s incoming interior minister and top domestic policy official for president-elect Manuel Lopez, who takes office on Dec. 1. The statement contracts a Saturday report in the Washington Post.

The line for food just outside the camp confines. Free meals are served at 10am and 5pm. There are 5,150 migrants now at the camp in Tijuana. pic.twitter.com/6BRcbcWRHg

— The Epoch Times (@EpochTimes) November 24, 2018

Cordero told Reuters that the incoming government was in talks with the Trump administration, but made clear that they could not make any agreement since they are not yet in power. 

Sanchez ruled out that Mexico would be declared a “safe third country” for asylum claimants, following a Washington Post report of a deal with the Trump administration known as “Remain in Mexico,” which quoted her calling it a “short-term solution.”

The plan, according to the newspaper, foresees migrants staying in Mexico while their asylum claims in the United States are being processed, potentially ending a system Trump decries as “catch and release” that has until now often allowed those seeking refuge to wait on safer U.S. soil. –Reuters

Meanwhile, Mexico’s incoming deputy interior minister Zoe Robledo said that the details of the “Remain in Mexico” plan were still under discussion. Robledo told Reuters, adding that the incoming government sought to find jobs for Central American migrants which are understaffed – such as maquila assembly plants where multinational corporations take advantage of cheap labor for the final stages of production. 

“What we’re aiming for is that people leaving their countries due to security issues or violence can find a place to stay in Mexico if that is their decision,” Robledo added.

In a Saturday Tweet, Trump declared: “Migrants at the Southern Border will not be allowed into the United States until their claims are individually approved in court. We only will allow those who come into our Country legally. Other than that our very strong policy is Catch and Detain. No “Releasing” into the U.S.,” adding “All will stay in Mexico” in a second tweet in which he threatened to close the southern US border if necessary. 

Migrants at the Southern Border will not be allowed into the United States until their claims are individually approved in court. We only will allow those who come into our Country legally. Other than that our very strong policy is Catch and Detain. No “Releasing” into the U.S…

— Donald J. Trump (@realDonaldTrump) November 24, 2018

….All will stay in Mexico. If for any reason it becomes necessary, we will CLOSE our Southern Border. There is no way that the United States will, after decades of abuse, put up with this costly and dangerous situation anymore!

— Donald J. Trump (@realDonaldTrump) November 24, 2018

Trump’s plan is “outright illegal” according to Jenna Gilbert, managing attorney for the Los Angeles office of Human Rights First, adding “I’m sure the administration will once more see itself in court.” 

Sanchez, who said the situation of migrant caravans was “very delicate,” did not explicitly rule out that Mexico could keep caravan migrants on its soil while their U.S. asylum claims are processed. But she told Reuters that plans to assume “safe third country” status were “ruled out.” –Reuters

Asylum seekers would be required to claim refugee status in Mexico if it were to assume “safe third country” status, however migration activists have long argued that Mexico’s is too dangerous to offer safe haven for migrants fleeing Central American violence.  

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Authored by Charles Hugh Smith via OfTwoMinds blog,

The very structure of our systems guarantees their failure once conditions change beyond their limited ability to adjust.

As a general rule, there are two paths to collapse: gradual erosion and sudden crash. The two are intertwined, of course; in most cases, the system slowly loses vigor, resources, efficiency, etc. (erosion) which leaves it so weakened that a crisis that would have easily been overcome in the past triggers a catastrophic decline of production and order.

My new book explores these system dynamics in the present: Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic. As the title suggests, we’ve got a window to prevent the final descent, but it’s years, not decades.

There are two basic drivers of systemic erosion, drivers that have little to do with leadership or policy. Our current delusion is that changing leaders and tweaking policies are enough to stave off systemic erosion, decline and collapse, but the two dynamics cannot be so easily thwarted.

The first is the gradual decline in the system’s ability to adapt to changing circumstances. Life’s core asset is the ability to evolve and adapt, and organisms, species and systems which fail to adapt fast enough and effectively enough to rapid change disappear.

Today’s modern complex systems are typically optimized to specific conditions, meaning that they’ve evolved (or been designed) to maximize production and output given a certain set of inputs and processes.

If those conditions shift outside the expected parameters, the system’s efficiency and output are heavily eroded. To take a real-world example: airliners are designed to cruise at specific altitudes to maximize the efficiency of the engines and aircraft design while maximizing the cruising speed.

If an airliner is forced to fly at an altitude of 500 feet instead of 35,000 feet, the optimizations are lost.

The vast majority of modern systems are heavily optimized in ways outsiders typically can’t appreciate. The delivery of gasoline to service stations, for example, appears so streamlined that few even question that system’s vulnerabilities to disruption. The system of delivery is optimized to high standards of transport and availability of fuel. Were anything to disrupt this system, most gas stations would run out of fuel in a matter of days.

This vulnerability is masked by the effectiveness of the system’s optimizations.

The path to sudden collapse is paved by increasingly narrow optimization. The system works perfectly until change shifts from being gradual (linear) to non-linear, at which point the apparently robust system collapses in a heap.

Adaptability and optimization are on a see-saw: as a general rule, adaptability requires flexibility, buffers and redundancies that are costly to maintain. So in a world driven by efficiencies in service of maximizing profits, these costs have been ruthlessly eliminated from complex systems. The adaptability of optimized systems is very low unless they have been specifically optimized to be highly flexible and adaptive.

The second dynamic is the gradual rigging of the system to reward insiders, at the expense of its purported purpose and output. Insiders will naturally vehemently deny this (while accepting pay raises, higher benefits and bonuses even as the agency / institution fails), but this dynamic is the direct consequence of the structure of our dominant systems, which are virtually all centralized hierarchies.

Centralized hierarchies concentrate power and wealth in the hands of the few.Self-interest being what it is, these insiders naturally rig the system to protect insiders from criticism, reductions in budgets, etc. while increasing their own take of the spoils.

We can see this in everything from corporate stock buybacks to the relentless expansion of overpaid university administrators while the actual teaching falls ever more heavily on debt-serf non-tenured poorly paid adjunct faculty.

In other words, the very structure of our systems guarantees their failure once conditions change beyond their limited ability to adjust. We already see the consequences of these two systemic dynamics everywhere in America: systems no longer function effectively even as insiders continue to benefit at the expense of the public /patients / customers /taxpayers.

To avoid decline and collapse, we need to develop new localized structures optimized for resilience and adaptability–a flexible, decentralized, sustainable, democratic, opportunity-for-all nation.

*  *  *

My new book on these topics is available at a 28% discount for the ebook and 23% discount for the print edition through November 30 ($4.95 ebook, $9.95 print). Read the first section for free in PDF format. My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF). My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. My new book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic is 23% off ($4.95 ebook, $9.95 print): Read the first section for free in PDF format.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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Over 100 civilians were hospitalized, including dozens of women and children, after anti-Assad militants unleashed a wave of mortars filled with poison gas on government controlled Aleppo Saturday evening. 

Syrian state-run SANA published multiple photos and video of victims in the city’s hospitals being treated for what’s reported to be chlorine gas exposure. Though it’s not the first time that ‘rebels’ seeking to topple the Assad government have conducted a chemical attack on pro-government areas according to United Nations findings, it is the first time that mainstream American outlets like CNN and Reuters have featured coverage of such events.

Crucially, pro-rebel media has now confirmed the poison gas attack, specially the Syrian Observatory for Human Rights (SOHR), which western media have long relied upon as a go-to source of anti-Assad opposition reporting. According to Reuters:

In Aleppo city which the government controls, the shells had spread a strong stench and caused breathing problems, the Syrian Observatory for Human Rights also said.

In total official Syrian government sources reported 107 people were injured, a sizable portion of them children, after al-Qaeda terrorists linked to the Hayat Tahrir al-Sham alliance (HTS, the main al-Qaeda group that controls Idlib) attacked three Aleppo districts with poison filled projectiles. 

Initially the death toll approached 12 according to early reports, however, it now appears there were no fatalities resulting from gas exposure, though many remain in the hospital in what international reports say is the highest casualty toll since the Syrian Army liberated Aleppo two years ago. 

“The explosive (shells) contain toxic gases that led to choking among civilians,” Aleppo police chief Issam al-Shilli told SANA.

Outrageous!
Western backed “rebels” have targeted residential areas in Aleppo with chlorine gas!
Dozens of civilians and children suffocated and were taken to nearby hospitals.
Where is the international outrage? Or is the world only provoked by fake “regime chemical attacks”? pic.twitter.com/c6UZhcpOzc

— هادي نصرالله (@HadiNasrallah) November 24, 2018

Russian jets quickly began pounding HTS positions — the group military officials said was responsible for the attack — in retaliation. The Russian foreign ministry has called on the international community to definitely condemn the attacks carried out by opposition armed groups. 

The Reuters report continues:

“We can not know the kinds of gases but we suspected chlorine and treated patients on this basis because of the symptoms,” Zaher Batal, the head of the Aleppo Doctors Syndicate, told Reuters.

Patients suffered difficulty breathing, eye inflammation, shivering and fainting, he said. Hospitals had discharged many people overnight.

Ironically a Syrian and Russian joint offensive to liberate Idlib from HTS was delayed in September after the United States threatened military action over what western intelligence agencies claimed were preparations by Assad’s forces to unleash a chemical attack. 

However, with what now appears a large-scale attempt by the western-backed armed groups to gas civilians in government areas, it will be interesting to see if there’s any condemnation whatsoever from Washington, London, or Paris. 

* * *

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In an incident that echoed the violent clash between migrants and Mexican police that unfolded a month ago when a caravan of migrants attempted to cross into Mexico from Guatemala, the first episode of migrant-caravan related violence was reported Saturday by the border patrol.

US border agents detained a Honduran man in Arizona who had broken away from one of the caravans headed toward the US border after the man pelted the agents with rocks while attempting to avoid capture.

The 31-year-old undocumented migrant, who was not named by his captives, had climbed a tree to try and avoid capture, then started throwing rocks at the agents, as well as at a helicopter that had been summoned to track him, according to the Washington Times.

After being taken in to custody, the man told agents that he had been part of one of the migrant caravans that had been featured on the news. According to the Times, the man had previously been arrested in the US, and had been deported in June back to Honduras.

The incident occurred as some 10,500 migrants have been gathering on the Mexican side of the border, awaiting an opportunity to cross into the US. And that opportunity might soon present itself, as some of the nearly 6,000 troops sent to the border by President Trump have started to return to their homse. President Trump specifically warned about the dangers of “rocking” – as border agents call them – as attacks with rocks can seriously injure border agents.

Images of the caravan have mostly focused on women and children, but the DHS has repeatedly insisted that most of its members are adult males from Central America. The border patrol has been increasingly worried about incidents of “rocking”, which can involve migrants hefting small boulders with enough force to break bones or damage vehicles or other equipment.

The attack on the border agents occurred around the time that reports about a new asylum policy, worked out between the US and Mexico, first broke. According to these reports, asylum applicants who present themselves at US border checkpoints will be detained in Mexico while they await a court hearing – effectively ending the policy of “catch and release”, where the asylum seekers were allowed to remain at large inside the US. However, Mexico on Sunday denied reports that the incoming administration had agreed to the plan.

Border agents said they were first alerted to the presence of the migrant when they spotted footprints along the border just east of the Andrade, California crossing point.

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Legacy brick-and-mortar retailers have found themselves falling behind this Thanksgiving season as the Black Friday “holiday” moves closer to becoming an online exclusive event. And as more Black Friday business gravitates towards online shopping, traditional retailers are still learning the ropes of how to take legacy models and move them online – despite posturing from these companies that they have already evolved in this regard.

According to Bloomberg, this Black Friday traditional brick-and-mortar retailers like Lowe’s, Walmart, Lululemon and Kohl’s all dealt  with glitches and malfunctioning websites. Marshal Cohen, an analyst at researcher NPD Group told Bloomberg: “It really does show the importance of investing in logistics and technology. They have to be able to handle the online rush.”

For the most part, it has been a relatively solid year for US retailers, and the decent results have ticked up expectations for the holiday season. However, retail stocks pared gains recently due to investor jitters and also due to earnings from companies like Kohl’s and Target that failed to surpass already heightened expectations.

That said, much of the growth for Black Friday appeared to take place online, according to Adobe Analytics. The $643 million spent online through 10AM Eastern time on Black Friday was 28% higher than the year prior. Digital spending was estimated to exceed $6.4 billion on Friday, which would be higher than last year’s Cyber Monday totals.

Meanwhile, as reported earlier, foot traffic at malls and stores seems to be similar to last year’s levels if slightly lower at some locations. For instance, more than 62% of the malls managed by JLL reported the same volume of foot traffic this year as in 2017.

Oliver Chen, an analyst for Cowen & Co, stated: “The story for this year is that healthier in-store traffic combined with outstanding digital growth will lead to strong results at many U.S. retailers.” 

There has been one caveat this year: retailers have been trying to spread out purchases a little bit more by offering deals earlier in November. Thanksgiving has also become a relatively meaningful shopping day on its own. Citigroup has stated that Black Friday may only make up 10% of retail sales in the fourth quarter. 

Cohen continued: “The frenzy of Black Friday as we knew it is over. We are watching the next edition of Black Friday, a more civilized and opportunistic edition.“

While most malls reported that a crowd showed up late on Friday, shoppers that made the trip were actually surprised by how calm things were. Cornelia Baird, a 38 year old home health aide, usually doesn’t go out on Black Friday, but after she did, she had to note how surprised she was and how quickly she finished her shopping – in less than an hour.

It also seemed as though many of the 164 million Americans out shopping this weekend were buying for themselves. 35-year-old Tara James, highlighted in the same Bloomberg article went out just to purchase two iPhones – one for her and one for her husband. 

She stated: “There was nothing for Black Friday that really appealed to me.”

Still, some crowds that Black Friday has become infamous for were present and accounted for in various locations. For instance, at Macy’s Herald Square in Manhattan the two bottom floors were reportedly “clogged” with customers who struggled to cram onto escalators. Macy’s CEO Jeff Gennette was there in person cheering on the shoppers.

Lines also formed at places like Aurora Farms premium outlets in Aurora, Ohio and at a Walmart Store in Northern New Jersey.

The big sellers this year have been the same items that we’ve been buying for what seems like decades: pressure cooker pots and televisions. Shoppers in Brooklyn at a Best Buy lined up for a 55 inch 4K television that was on sale for $249.

Chris Garcia, a 38-year-old father of four from Brooklyn said he couldn’t resist getting the steal for his family: “Usually you’d pay $500 or $600 for a TV like this – can’t pass that up. I’m just going to walk in with the TV, and see what happens. They’ll be happy.”

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After Spain withdrew its objections to the terms of the Brexit agreement after it received guarantees on the trade treatment of Gibraltar early on Saturday morning, today’s emergency UK summit was merely a formality. And so, culminating a seemingly interminable two year period of back and forth negotiations, on Sunday the European Union, U.K. Prime Minister Theresa May and the leaders of the remaining EU members finally approved a deal on the UK’s departure from the EU during an emergency summit in Brussels. And now comes the hard part: the agreement has to be endorsed – or more likely rejected – by British MPs.

EU27 has endorsed the Withdrawal Agreement and Political Declaration on the future EU-UK relations.

— Donald Tusk (@eucopresident) November 25, 2018

The agreement, which was earlier approved earlier by the UK government, consists of two key documents. The first, a 585-page withdrawal paper, will guide both sides all the way up to Britain’s departure from the bloc, which is set for March 29, 2019. This legally binding text covers the UK’s “divorce bill,” citizens’ rights, and various measures ensuring there is no hard border between Northern Ireland and EU member state Ireland. Starting from March 2019, Britain will enter a transition period set to last until December 2020.

As part of the agreement, Britain has agreed to pay around $50 billion to the EU mainly to cover commitments it had made to the bloc’s budget. The U.K. will guarantee a broad swath of legal rights to the roughly 3 million EU citizens living in the U.K., and the EU will reciprocate with respect to an estimated 1.3 million U.K. citizens in its member states. The agreement also seeks to ensure that no physical border will re-emerge between Northern Ireland, which is part of the U.K., and the Republic of Ireland—an EU member.

The second, a non-binding document, is a political declaration that outlines aspirations for the future, including maintaining trade relationships, common foreign and defense policies, as well as close ties in law enforcement and criminal justice.

In a press conference following the endorsement, European Commission President Jean-Claude Juncker, Tusk, and EU Brexit negotiator Michel Barnier stressed that the deal is absolutely the best one possible, and that the EU will remain friends with the United Kingdom.

“This is the best deal possible, this is the only deal possible,” Juncker said. That remark was echoed by Barnier, who also noted that the EU has “worked constructively with the UK, never against the UK, and the UK worked constructively with us.”

However, Juncker said the biggest part of the work in the “tragic moment” of divorce still lies ahead. “Payments have to be made but the future understanding is one that has to be constructed.”

British Prime Minister Theresa May held a press conference in which she again declared the deal was the best one available, while still coming across as trying to launch a last ditch attempt to safeguard the agreement. In doing so, the PM did not mince her words, stating that the UK can have a “bright future” with the deal or more time of “uncertainty” if it fails to pass through the British government.

WATCH LIVE: PM @Theresa_May makes a statement following EU Council #BackTheBrexitDeal https://t.co/uL38BLf4SW

— UK Prime Minister (@10DowningStreet) November 25, 2018

Promising to make the case for the deal “with all my heart,” May announced that British MPs will have their say on it before Christmas. That vote has been labelled by the UK PM as the “most significant” one that parliament has held in years.

To be sure, May has reasons to worry about the agreement as it had received a far more stern pushback from British politicians. Several parliamentarians resigned over the plan – from Brexit Secretary Dominic Raab to Work and Pensions Secretary Esther McVey. Former Foreign Secretary Boris Johnson also quit back in July, after previously referring to May’s Brexit deal as “polishing a turd.”  

May met with EU officials earlier this week to secure their backing ahead of the summit. Back at home, she faces strong opposition to her Brexit deal, which she claims is the best available. She urged lawmakers to back the Brexit pact. “If people think there is another negotiation to be done, that is not the case,” she said in her press conference. “This is the only possible deal” she said.

I will take this deal back to the House of Commons confident we have achieved the best deal available and full of optimism about the future of our country. #BackTheBrexitDeal pic.twitter.com/NBm2kGZU5B

— Theresa May (@theresa_may) November 25, 2018

In fact, as the WSJ notes, May now “faces the political fight of her life” to win backing of own Parliament, which is expected to vote on the deal in early December.

Dozens of her fellow Conservative party members, the SNP, and the DUP, as well as the opposition Labour Party, have all vowed to reject the deal. If May loses, she will be racing against the clock to renegotiate the pact—and secure its approval—before the U.K. is due to leave the bloc March 29.

This is a bad deal for the country and Labour will oppose it in Parliament. pic.twitter.com/JXoMp19n2l

— Jeremy Corbyn (@jeremycorbyn) November 25, 2018

EU leaders warned that if the British parliament votes down the agreement, better conditions won’t be offered.

If British politicians reject the agreement, the UK will have to leave the EU with no deal as the departure date cannot be altered. Other options proposed by MPs include holding another referendum or a snap general election if May becomes overwhelmed by motions of no-confidence.

Even if the Brexit deal wins parliamentary approval, the U.K. will next spring kick off negotiations—likely to last years—to hash out comprehensive new trade and security relations with the EU. That’s because when Britain voted to leave the EU, it effectively decided to unravel four decades of common decision making—on regulations covering everything from sharing information on criminals to food regulations and value-added taxes—that govern the U.K.’s relationship with its biggest trading partner.

As a result, less than four months from Britain’s departure from the EU, Brexit remains a leap into the unknown, with businesses, banks and households unsure how to prepare.

Already May has started a political offensive to sell the deal to her reticent lawmakers. On Sunday Mrs. May published a “letter to the nation” in an effort to rally the British people behind her. U.K. government officials have meanwhile planned a public relations blitz in the coming days to warn of the economic blow to the U.K. leaving the bloc with no deal at all.

My letter to the nation. #BackTheBrexitDeal pic.twitter.com/VGzNeeXoqg

— Theresa May (@theresa_may) November 24, 2018

Still, analysts expect Mrs. May to return to Brussels to seek further concessions if the Brexit agreement is voted down by Parliament.

According to the WSJ, European officials privately say the possibility of fresh talks hasn’t been discarded and some believe the negotiation period could be extended beyond March. A timeline of upcoming events is shown below:

The key date is March 30, when the U.K. will enter a standstill transition period until December 2020 where EU rules will continue to apply. That period is meant to give both sides time to hammer out new trading and security ties. The agreement, recognizing the difficulties of securing accords in such a short space of time, includes the possibility of extending the transition until as late as December 2022.

The promise to avoid a hard border with Ireland could mean that after the transition, the U.K. will stay inside the EU’s customs area for an indefinite period, eliminating the need to collect tariffs on cross-border trade in goods. That would be good news for businesses, says Ross Denton, an EU trade expert at law firm Baker McKenzie. “Staying in a customs union is a no-brainer for business,” he said.

For the future, U.K. and EU officials must fill in enormous gaps across a broad swath of issues, covering matters such as trade but also issues such as British access to European criminal databases, whether a U.K. customer’s data can be shared in the EU and a London banker’s ability to market French government bonds.

At the heart of the talks will lie a trade-off: to what extent is the U.K. willing to cede sovereignty to the EU in return for access to customers in its 27 member states? The closer Britain follows the EU’s rules, the fewer obstacles its firms will encounter in exporting to the country’s main trading partner.

Britain’s continued membership of the EU’s customs area and any future decisions to follow EU rules to ease trade with the bloc would complicate the U.K.’s desire to build a future outside the bloc,for example by striking its own trade deals with countries such as the U.S.—a priority of pro-Brexit campaigners.

The EU has ruled out “frictionless” access to the EU’s single market, which entails following the bloc’s rulebook in areas such as food safety, product standards and allowing free movement of labor from the EU, which will stop once the transition period has ended.

Indeed, Brussels has told the May government that while the U.K. remains inside the EU’s customs union—and if it wants a close future trade relationship—it must continue to follow the bloc’s rules on state aid, environmental, labor and social standards, something that is anathema to hard-line Brexiters.

“There are big areas of ambiguity,” says Stephen Adams, a trade expert at Global Counsel, a consulting firm.

In other areas, there is already agreement. The U.K. has agreed to protect the EU’s 3,000 geographical denominations on products like Champagne or Gorgonzola cheese.

As it stands, here’s a chart of some of the most likely scenarios for the future trade deal, compared with what the UK has now.

The depth of cooperation will mostly rest on British willingness to accept EU courts’ interpretation of the bloc’s rules and laws in this field, something hard-line Brexiters oppose.

Even fishing, which accounts for 0.04% of the British economy, threatens to morph into fractious trade fight. Until now, EU fishing waters are effectively pooled, allowing boats from any EU country into another’s waters. After Brexit, British control of its territorial waters will be restored and it will control access to those waters.  The U.K. wants an annual agreement with the EU setting fishing quotas but has warned that will reduce EU fleets’ access.

Yet EU governments are challenging this with France and Spain pushing to make a future trade deal contingent on continued access to British waters along current lines. Britain’s fishing industry, while small, is politically vocal. Sunday’s agreement says the U.K. and EU should make best efforts to settle the issue by July 2020.

In short, the real fight for May only now begins, although as we showed previously, at least one bank is optimistic: as the following SocGen decision tree of all the possible upcoming permutations shows, the odds of a deal are as high as 75%. Whether that proves to be an overly optimistic assessment will be revealed in the coming weeks.

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