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President Trump clearly isn’t ready to forgive the “French diss” served up over the weekend by President Emmanuel Macron.

During a ceremony honoring the 100th anniversary of World War I at the Arc de Triomphe on Sunday, French President Emmanuel Macron insulted Trump to his face by launching into a screed about the dangers of toxic “nationalism” and subtly accusing the US of abandoning its “moral values”. This clearly did not sit well with the president, who was already facing criticism over his decision to show up late to a ceremony honoring the war dead (the administration blamed it on security concerns though it’s widely suspected that Trump didn’t want to get his hair wet), and Trump has let his displeasure be known in a series of tweets ridiculing Macron’s suggestion that Europe build its own army, saying that France and other European members of NATO would be better served by paying their fair share for NATO while daring them to leave and pay for their own protection.

And in his most strident tweet yet mocking the increasingly unpopular Macron’s imperial ambitions, Trump pointed out that, historically speaking, Europe has been its own worst enemy, and that while Macron wants to defend the Continent from the US, China and Russia, “it was Germany in WWI & WWII,” adding that “they were starting to learn German in Paris before the US came along. Pay for NATO or not!”

Emmanuel Macron suggests building its own army to protect Europe against the U.S., China and Russia. But it was Germany in World Wars One & Two – How did that work out for France? They were starting to learn German in Paris before the U.S. came along. Pay for NATO or not!

— Donald J. Trump (@realDonaldTrump) November 13, 2018

Of course, Macron isn’t the only French official calling for the creation of a “European army”. The country’s finance minister advocated for the creation of a Continental army during an interview with Germany’s Handelsblatt – a comment that was derided by the paper’s editors, who pointed out that Germans weren’t very supportive of the idea.

via RSS https://ift.tt/2Ftd3Z0 Tyler Durden

After Monday’s vicious Veteran’s Day selloff, which took place with the cash bond market closed, world markets have regained their footing as European stocks and S&P 500 futures modestly higher, recovering some of the previous session’s losses on renewed hopes (how many times have we heard this already) for progress in the U.S.-China trade dispute following a report that China’s vice premier Liu He is meeting Steven Mnuchin in DC, even as Asian shares dropped overall, led by Japan’s 2.1% drop as tech stocks were hit on iPhone demand fears.

Europe’s Stoxx 600 Index rose for the first time in three days, with telecoms leading the way after Vodafone announced better than expected quarterly results, although the index was off its earlier highs. Contracts on the Dow, Nasdaq and S&P 500 were all firmer, and after sliding as low as 2,720 on Monday, S&P futures were 0.6% higher.

Focusing on Europe, today is the day the Italians will resubmit their budget after the EC requested a new fiscal plan. No material changes are expected. According to Deutsche Bank, the commission will continue to adopt a tough stance on Italy. It seems inevitable they will recommend an Excessive Deficit Procedure (EDP) in the next few weeks. So for now any grand bargain is far away.

Earlier, the Shanghai Comp. (+0.9%) and Hang Seng (+0.6%) both opened lower although gradually recovered amid hopes for an improvement in US-China trade relations amid reports that US Treasury Secretary Mnuchin and Chinese Vice Premier Liu He spoke by phone on Friday about a deal that could ease trade tensions and with some US officials reportedly expecting China to make a trade offer ahead of the Trump-Xi meeting.

Other Asian indexes fared less well, and slid with Apple suppliers under pressure after the iPhone maker fell on signs of a deteriorating sales outlook. Meanwhile, underwhelming Chinese new loan data, ongoing Brexit concerns and Italian jitters have tempered enthusiasm. Germany’s DAX outperforms peers this morning, while Italy’s FTSE MIB traded mixed ahead of today’s budget proposal deadline while local Italian banks are managing small gains.

Even as risk assets enjoyed a modest rebound, the commodity rout continued as WTI fell for a twelfth day, the longest losing streak on record after Trump criticized top OPEC producer Saudi Arabia’s plan to cut output, and was headed for its lowest close of 2018.

Treasuries climbed even as the Bloomberg Dollar Spot Index fell from an 18-month high as traders took profit on the greenback.  The yen reversed to a loss as risk appetite slowly grew. The Britain’s pound pared some losses from the past three days after Prime Minister Theresa May said talks with the European Union were in the “endgame” and data showing U.K. wage growth accelerated.

Elsewhere, the euro recovered from its weakest against the dollar since June 2017, with Italy due to resubmit its budget. The country’s bonds pared some losses after a debt auction. Emerging market equities and currencies were steady.

In a curious development overnight, major state-owned Chinese banks were seen selling dollars at around 6.97 per dollar in the onshore spot foreign exchange market in early trade on Tuesday, traders told Bloomberg in the latest attempt by Beijing to arrest sharp losses in the local currency. The onshore spot market opened at 6.9681 per dollar, weakening to a low of 6.9703 at one point in early deals. “Big banks were selling (dollars) to defend the yuan,” said one of the traders. Traders suspect the authorities are keen to prevent the yuan from weakening too sharply before U.S. President Donald Trump and his Chinese counterpart President Xi Jinping’s meeting later this month.

So is the selling over for now? With trade worries hanging over markets for months and clouding the economic outlook, the Liu He came at an appropriate time, while comments from Chinese Premier Li Keqiang in Singapore Tuesday hinted at a more optimistic outlook; even so sentiment remains fragile as the Fed prepares to hike rates in just over a month.

“We always talk about that proverbial wall of worry and that wall right now is pretty high,” David Kudla, chief executive officer of Mainstay Capital Management, said on Bloomberg TV. “We have the issues in China with the growth concerns there, we have the issues in Europe with the battle between Italy and the EU, the U.K. getting ready for Brexit. There is some guidance lower on earnings, and a Federal Reserve that is going to raise rates.”

In other news, Bloomberg reported that the US Commerce Department submitted a draft recommendation on potential auto tariffs to the White House which are undergoing interagency review and are sign of US administration’s increasing frustration at EU and Japan over lack of progress on auto trade issues, while the Section 232 recommendations will be discussed at White House trade meeting on Tuesday.

In the latest Brexit news, PM May said Brexit talks are now reaching their “endgame” and that both sides working hard to reach an agreement but added that significant issues still remain and that the government will not accept a deal at any cost. Furthermore, there were reports that UK PM May had rejected the latest draft Brexit deal with the EU as it didn’t provide a clear exit from the customs union if the EU began acting in bad faith in discussions regarding a future trade agreement.

Expected data include NFIB Small Business Optimism and monthly budget statement. Home Depot and Tyson are among companies reporting earnings.

Market Snapshot

• S&P 500 futures up 0.4% to 2,737.50
• STOXX Europe 600 up 0.6% to 364.03
• MXAP down 1% to 150.18
• MXAPJ down 0.2% to 480.47
• Nikkei down 2.1% to 21,810.52
• Topix down 2% to 1,638.45
• Hang Seng Index up 0.6% to 25,792.87
• Shanghai Composite up 0.9% to 2,654.88
• Sensex up 0.8% to 35,083.73
• Australia S&P/ASX 200 down 1.8% to 5,834.23
• Kospi down 0.4% to 2,071.23
• German 10Y yield fell 0.3 bps to 0.395%
• Euro up 0.2% to $1.1239
• Brent Futures down 1.3% to $69.21/bbl
• Italian 10Y yield rose 3.3 bps to 3.066%
• Spanish 10Y yield rose 0.6 bps to 1.607%
• Brent futures down 2.2% to $68.57/bbl
• Gold spot down 0.2% to $1,197.54
• U.S. Dollar Index up 0.1% to 97.63

Top Overnight News from Bloomberg

• U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have resumed talks on trade, and a potential Washington visit by Liu is being considered before the nations’ top leaders meet later this month
• Goldman Sachs downward slide on a multibillion-dollar Malaysian fraud culminated Monday with Goldman’s shares having their biggest drop since 2011
• President Donald Trump’s hardening line on immigration sets him on a collision course with House Democrats that is likely to shape the next presidential campaign.
• Brexit negotiators are working through the night in an effort to reach a deal, but the final stage of the talks is proving “immensely difficult,” U.K. Prime Minister Theresa May said
• Italy’s government may offer the European Commission a minor concession when it resubmits its budget after an unprecedented rejection last month
• Major suppliers to Apple Inc.’s iPhone fell Tuesday as investors fretted that one of the most important product lines in the technology sector was seeing weak demand

Major Asian equity markets mostly followed suit to the sell-off on Wall Street where tech led the declines after Apple shares dropped 5% following an outlook cut by supplier Lumentum Holdings and with energy names hit again after oil posted an 11th consecutive decline. ASX 200 (-1.8%) and Nikkei 225 (-2.1%) weakened from the open with the tech sector the underperformer in the region as another Apple supplier Japan Display reported a loss for H1 and downgraded its outlook. Furthermore, Japanese exporters suffered from recent flows into the JPY and large automakers were pressured after the US Commerce Department submitted a draft recommendation on potential auto tariffs to the White House. Elsewhere, Shanghai Comp. (+0.9%) and Hang Seng (+0.6%) both opened lower although gradually recovered amid hopes for an improvement in US-China trade relations amid reports that US Treasury Secretary Mnuchin and Chinese Vice Premier Liu He spoke by phone on Friday about a deal that could ease trade tensions and with some US officials reportedly expecting China to make a trade offer ahead of the Trump-Xi meeting. Finally, 10yr JGBs were initially supported as the broad risk averse tone spurred a flight to safety, but then failed to hold on to the marginal gains as prices mirrored a pullback in T-notes despite stronger 30yr auction results.

Top Asian News

• Semen Indonesia Buys LafargeHolcim Arm in $1.75 Billion Deal
• MUFG Chief Warns on Outlook Even After Raising Profit Target
• Hong Kong’s World-Beating IPO Market Starts to Show Cracks
• China’s Credit Growth Slumped in October as Debt Sales Slowed

All major European indices are in the green, with the DAX (+0.6%) out in front, led by the likes of Lufthansa (+2.4%) who are benefiting from lower oil prices and Bayer (+0.3%) who presented an increase in earnings and confirmed their outlook. FTSE MIB (-0.3%) is lagging its peers weighed on by Telecom Italia (-1.4%) who removed their CEO to the dismay of Vivendi (23.9% shareholder). Italian financial names are also softer ahead of today’s budget re-submission deadline. Sectors are predominantly higher with outperformance in Telecoms post-earnings from Vodafone (+9.0%). Energy names lag, in-fitting with price action in the complex. Regarding individual equities, BTG (+9.2%) are leading the Euro Stoxx 600 after presenting an increase in half year revenue and operating profit. Elior Group (+8.0%) are off best levels but remain supported by news that they have hired advisors to initiate the sale of their catering business. Babcock (-2.5%) are under scrutiny from the Ministry of Defence over their handling of a contract relating to the UK’s Trident Submarines.

Top European News

• U.K. Wages Rise Most Since 2008 Amid Tight Labor Market
• Nyrstar Plunges on Growing Speculation of Debt Restructuring
• Italy’s Carige Thrown $360 Million Lifeline by Other Banks

In FX, An almost clear and defining line between the ‘so called’ risk or high beta/yield currencies vs safer-havens, as US-China trade tensions ease somewhat amidst reports of constructive discussions between key officials, while the YUAN also pares some losses with the aid of intervention via local banks overnight (said to have been defending 6.9700 vs the Usd). Hence, the DXY and broad Dollar are off Monday’s peaks, with the latter only maintaining gains/positive momentum vs the JPY above 114.00 and CHF (to a lesser degree) over 1.0100. However, the index remains underpinned around the 97.500 mark and still poised to build on yesterday’s new ytd high at 97.704 given high levels of ongoing uncertainty and global risks, with only one major chart hurdle seen ahead of 98.000 (97.871 Fib resistance). NZD/AUD – Outperforming on the aforementioned US-China ‘understanding’, with the Kiwi staying within striking distance of 0.6750 and the latter not far from 0.7200, but perhaps capped by mega option expiry interest at the strike (1.6 bn), while still feeling the adverse effects of bearish cross-positioning as Aud/Nzd inches further below 1.0700. GBP/EUR/CAD – All holding up relatively well, or at least consolidating off worst levels, with the Pound retesting 1.2900 vs the Greenback and 0.8700 vs the single currency on hopes if not high expectations of a Brexit breakthrough in time before tomorrow’s deadline. Note, some independent support from Sterling via firm UK wage data, but limited. The Eur is just keeping its head above 1.1200 vs the Usd awaiting Italy’s budget resubmission to the EU that is widely expected to reveal a concession or compromise, but no white flag. Option barriers at the big figure are underpinning the headline pair, though by the same token 1 bn expiry interest at 1.1250 are also keeping upside attempts in check. Looking at the Loonie, only fleeting intraday recoveries in oil prices are keeping the commodity unit pressured and it is struggling to stem losses beyond 1.3250.

In commodities, WTI (-2.2%) and Brent (-2.1%) are in the red after a failed intervention by US President Trump who tweeted that oil prices should be lower, and he hopes Saudi and OPEC do not cut oil production. Note, the monthly OPEC report to be published today at 1115GMT. Gold (+0.1%) is marginally up after reaching 16-month highs yesterday. Of note, traders are gathering in Shanghai  for Asia Copper Week, as copper prices have fallen by approximately 17% this year, on track for their worst year since 2015. Intra-day, copper and other metals have moved higher following reports that Liu He, China’s top trade negotiator, may visit Washington in preparation for Trump Xi talks. OPEC monthly report: OPEC crude production rose 127k bpd in October to average 32.9mln bpd, according to secondary sources. Crude oil output increased mostly in the UAE, Saudi Arabia, Libya and Angola, while production declined in IR Iran, Venezuela, Kuwait and Nigeria. In 2018, oil demand growth is anticipated to increase by 1.5mln bpd, a downward revision of 40k bpd from last month’s projection. For 2019, world oil demand is forecast to grow by 1.29mln bpd, a minor downward adjustment of 70k bpd from the previous month’s assessment.

In terms of the day ahead, the November ZEW survey in Germany follows before we get the October NFIB small business optimism reading in the US and the October monthly budget statement. Away from that it’s a busy day at the ECB with Praet and Lautenschlaeger speaking this morning, before de Guindos speaks this evening. The Fed’s Kashkari, Brainard and Harker are also due to speak at various stages today. Today also marks the deadline set by the EU for Italy to revise its budget, so expect to see headlines around this.

US Event Calendar

• 6am: NFIB Small Business Optimism, est. 108, prior 107.9
• 10am: Fed’s Kashkari Speaks at Conference on Immigration
• 10am: Fed’s Brainard Speaks on AI and the New Financial Landscape
• 2pm: Monthly Budget Statement, est. $100.0b deficit, prior $63.2b deficit
• 2:20pm: Fed’s Harker Speaks at Fintech Conference

DB’s Jim Reid concludes the overnight wrap

In this morning’s FT, DB’s Head of Research and Chief Economist David Folkerts-Landau has penned a hard hitting op-ed on Italy. The crux of the argument is that Europe must cut a grand bargain with Italy and that another costly sovereign debt crisis is inevitable unless the confrontational approach of the EC gives way to greater co-operation. Italy has actually been a frugal member of the single currency with a cumulative primary surplus every year outside of the GFC. However, these surpluses have simply helped finance the interest on the legacy debt and debt/GDP has still climbed. Meanwhile, the associated spending cuts and austerity required to run a primary surplus have lowered the standard of living for the population and led us to the political situation we find ourselves at today.

To cut a long story short the grand bargain is in effect the ESM firepower helping to substantially lower Italy’s funding costs, allow for more public expenditure (e.g. infrastructure) in return for Italy undergoing structural reforms. A copy of the unabridged op-ed can be found here or in today’s FT.

Interestingly, today is the day the Italians will resubmit their budget after the EC requested a new fiscal plan. We expect no material changes. Our economists yesterday published a piece ( link ) looking at the next steps and conclude that, as contagion has been limited for now, the commission will continue to adopt a tough stance on Italy. It seems inevitable they will recommend  an Excessive Deficit Procedure (EDP) in the next few weeks. So for now we’re far away from the grand bargain our Chief Economist thinks will eventually be needed.

As well as Italy it feels like there’s a lot to report today, which is not usually the case after a US holiday. Indeed those handful of Monday US holidays each year are usually an excuse for us to have an extra 10-15 minutes lie in the morning safe in the knowledge that not much will have happened the day before. However, the alarm clock was actually set a bit earlier this morning after a difficult start to the week, including a further slump for the once biggest company in the world, and a continuation of the recent under-performance in many of the current largest companies in the world within the tech sector.

To recap, Veteran’s Day thin equity trading saw the NASDAQ (-2.78%) and NYSE FANG (-4.11%) indices leading the declines followed closely by the S&P 500 (-1.97%), DOW (-2.32%) and Russell 2000 (-1.98%). Amazingly that is the 9th time this year the big 3 bourses (NASDAQ, S&P 500 and DOW) have fallen at least -1.90% on the same day. It didn’t happen in 2017, and only happened 11 times in 2015 and 2016 combined. The VIX also climbed just over 3pts yesterday to edge back above 20. The tech sector was clearly at the heart of yesterday’s selloff with a -5.04% decline for Apple, sparked by big falls for the company’s suppliers on the back of demand concerns. Apple’s share price is now back below $200 after spending 72 consecutive trading days above that level.

That move for Apple resulted in the small matter of $49bn of value being wiped from the company. By comparison General Electric lost just over $5bn yesterday but it was arguably the bigger headline grabber. Indeed the shares slumped -6.88% (-10.02% at the lows) after the company’s CEO, in an interview with CNBC yesterday, failed to reassure market fears about a weakening financial position. The CEO suggested that the company will now urgently sell assets to address leverage. Shares hit levels first seen in 1995 yesterday and have only been lower since, very briefly, during the financial crisis.

For a bit of perspective, the market cap of GE now is $69.5bn and it’s the 80th largest company in the S&P 500. Go back to August 2003 and it was the largest company in the index (and regularly the world between 1993-2005) at a market cap of $296bn, with $12bn of daylight to Microsoft in second place. The tech giant has since grown to be a $826bn company well over 10 times the size. GE’s market cap actually peaked in August 2000 at $594bn before tumbling first in the tech crash and then the GFC.

In credit GE is a top 15 issuer in both the US and EU indices. It’s recently been downgraded into the BBB bucket but as recently as September was trading 20bps inside BBB- bonds. However they crossed over at the end of that month and now trade up to 50bps wide to the average of the weakest notch of IG. This problem for GE has come at an interesting time as much discussion in recent months has been about BBBs as a % of the size of the HY market. According to Nick Burns in my team, post the downgrades of the automakers in 2005, US BBBs fell to 99% of the size of the HY market from a peak of 170% in 2001.

Since 2005, BBBs have been steadily rising as a percentage of HY climbing back above the previous peak in 2014 (175%) before extending that growth to a current level of 274%. It’s more difficult to compare EU BBBs to HY given the infancy of the EUR HY market pre-2004. But from a low of 219% BBBs have grown to 340% of EUR HY. So large BBB companies with a deteriorating credit story are prone to additional widening pressure as investors fear the risks of an eventual downgrade to HY and a swamping of paper into that market. This isn’t helping GE at the moment and may be a dress rehearsal for what happens for weaker and large BBB issuers in the next recession.

Brexit headlines were slightly overshadowed but make no mistake, we are getting to the point when binary outcomes are coming closer. Up until the end of last week I thought we’d get a deal agreed this week and then Parliament would be 50/50 as to whether they’d vote in favour of it. However, since last Friday if you’ve read all the relevant UK press articles its been hard to find much enthusiasm for the expected deal from anyone on any side of the debate within Parliament. At this stage I’m not sure I know what plan B is? Will this be a repeat of TARP back in 2008 and Parliament requires two goes at it? Problem with this is that it’s not clear that the EU is going to offer anything different on a second run at it. In terms of trading, the pound originally pared losses in the early afternoon yesterday as the EU’s Barnier confirmed yesterday that although an agreement had still not been reached the main elements of an exit treaty are ready to present to the UK cabinet according to the FT. Sterling gave up the Barnier related gains on the below Buzzfeed news and fell -0.93% on the day.

This news was that Brexit secretary Raab is leading some cabinet ministers towards telling Mrs May that the EU offer on the table is unacceptable. Mrs May herself last night said talks were “in the endgame”. The general view is that unless we have a deal by the end of tomorrow, the November EU summit is unlikely. As we know a deal is pretty much on the table however the issue  remains whether or not the UK can run with it first based on whether the cabinet will accept it and secondly whether Parliament can. At the moment we are struggling to get past the first hurdle let alone the second. There was supposed to be a cabinet meeting on Brexit today but its status has been played down.

This morning in Asia, markets outside of China/HK are weak but off the lows of the session. The Nikkei (-2.19%), and Kospi (-0.46%) are all down along with most Asian markets but after opening equally weak the Shanghai Comp (+0.86%) and Hang Seng (+0.33%) are rallying hard from the lows. More positive trade noises from US VP Pence and Chinese officials in the last hour have helped. Sentiment didn’t start well though as last night Bloomberg reported that the White House is circulating a draft report by the US Commerce Department over whether to impose tariffs on automobile imports to protect national security while adding that  the President Trump is scheduled to meet with senior members of his trade team today to discuss how to proceed on potential tariffs.

Elsewhere, futures on the S&P 500 (+0.44%) are pointing towards a more positive start and as an interesting aside the BoJ’s asset holding are now (JPY 553.6 tn) greater than Japan’s nominal GDP (JPY 552.8tn as of end June). To put this in perspective the Fed’s assets are about 20% of US GDP, while the ECB’s holdings are equal to around 40% of the euro-zone economy.

This US and Asian weakness follows on from earlier yesterday where Europe also struggled. The STOXX 600 ended the day down -1.01% with the tech sector sinking -3.66%. The DAX (-1.77%) fell even more and it’s amazing that it’s ahead of the FTSE MIB for one of the biggest total return declines in Europe this year of the main bourses (-12.33% vs. -10.37% respectively). Remarkable given that they are probably at the extreme ends economically within Europe. Even oil couldn’t eke out a gain after being up after Asia closed post the Saudi production cut story from Sunday. President Trump’s tweet criticising Saudi Arabia’s planned production cut weighed on prices late in the US session. By the close a near -3% fall had added to what is now an 11-day successive slump, extending the record run we discussed yesterday with data back to 1983. Elsewhere bond markets in Europe (Treasuries were closed for Veterans Day) were quiet with Bunds -0.9bps lower in yield and BTPs +3.5bps higher.

In terms of the day ahead, shortly after this hits your emails we’ll get the final October CPI revisions in Germany. Soon after that we’ll get the preliminary Q3 wages data in France before the focus turns to here in the UK with the September and October employment stats. The November ZEW survey in Germany follows before we get the October NFIB small business optimism reading in the US and the October monthly budget statement. Away from that it’s a busy day at the ECB with Praet and Lautenschlaeger speaking this morning, before de Guindos speaks this evening. The Fed’s Kashkari, Brainard and Harker are also due to speak at various stages today. As noted above, today also marks the deadline set by the EU for Italy to revise its budget, so expect to see headlines around this.

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Jeff Sessions has already packed up his things and left the DOJ for the last time, and it’s likely that Commerce Secretary Wilbur Ross will be next to go given Trump’s well-documented frustrations with Ross’s job performance and the percolating scandals surrounding possible ethics violations. 

And to the list of likely Trump administration post-midterm departures, we can now add Secretary of Homeland Security Kirstjen Nielsen, whom Trump has reportedly decided to remove after months of explosive outbursts over what he has perceived as her “poor performance” on immigration – an issue that Trump sees (with some reason, as the midterms showed) as crucial to his political survival, according to the Washington Post. 

The report surfaced after Trump canceled a planned trip with Nielsen to visit US troops at the border in South Texas earlier this week. Trump reportedly told aides over the weekend that he wants Nielsen out ASAP, though the secretary is desperately trying to hang on until Dec. 6, which would mark her one-year anniversary in the job. Trump, who has complained about Nielsen for months, is looking for a replacement who will do a better job of implementing his immigration agenda.

Notably, a DHS spokesman refused to confirm or deny the report.

DHS officials who work with Nielsen declined to address her potential departure Monday. “The Secretary is honored to lead the men and women of DHS and is committed to implementing the President’s security-focused agenda to protect Americans from all threats and will continue to do so,” spokesman Tyler Q. Houlton said in a statement.

As early as May, reports surfaced suggesting that Nielsen had borne the brunt of President Trump’s anger over a rebound in illegal border crossings (after crossings dropped to multiyear lows following Trump’s 2016 election). That anger has only intensified by her resistance to Trump’s rhetoric about the migrant caravans, as well as his order to send thousands of US troops to the border. Trump has also reportedly berated her during cabinet meetings, criticized her to other administration officials and tagged her as a “Bushie” due to her service in the Bush administration.

Trump became incensed last month when Nielsen tried to explain during the runup to the midterm vote why the president couldn’t close the Southern border with Mexico or drastically limit immigration.

But despite her obvious reservations, Nielsen has stood up and defended controversial Trump Administration policies like the administration’s “zero tolerance” policy for illegal aliens traveling with children. The border separations triggered widespread outrage toward the administration last spring, and Trump eventually caved and reversed the policy under pressure. However, before he did that, Nielsen stood up and delivered a convincing defense of the administration’s measures.

At the peak of controversy over the Trump administration’s “zero tolerance” family-separation initiative, Nielsen nonetheless stood at the White House lectern and delivered a vigorous defense of the measures. The president loved her performance — especially when she said there was no administration policy on separations. Days later, under withering criticism, the president changed his mind and ordered an end to the separations.

But if Nielsen is swept out during Trump’s second significant cabinet shakeup, all eyes will turn to Chief of Staff John Kelly, who has long been Nielsen’s biggest champion. He has previously stuck his neck out to defend her to the president, and her dismissal will inevitably revive speculation that Kelly’s name might also be on Trump’s “naughty” list. As WaPo reported, though Kelly has tried his hardest to stop Trump from firing Nielsen, his future in the administration is also “shaky”.

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With news that President Trump’s investigation into possible national security tariffs on car imports threatening to rattle investors during Tuesday’s session, global investors rejoiced after the South China Morning Post, a quasi-official mouthpiece for the Communist Party, reported that Chinese Vice Premier Liu He would visit the US this month to work on resolving the ongoing US-China trade dispute with Treasury Secretary Steven Mnuchin. That meeting is expected to take place in the days before President Trump and Chinese President Xi Jinping hold a summit of their own on the sidelines of the G-20 meeting in Buenos Aires.

Following what was the most encouraging trade news since Xi and the White House confirmed last week that the two leaders would meet at the G-20 after a seemingly interminable parade of on-again, off-again headlines, global markets rejoiced, with S&P futures catching a bid and Asian benchmarks paring their losses as Treasury futures turned lower.

Reports about the visit followed reports in the Wall Street Journal late last week that the two men, who are among the most senior officials responsible for trade talks, had spoken over the phone about possibly restarting negotiations.

In its report, the SCMP said two sources from the US and two from China had confirmed the news, though they specified that a schedule for the visit had yet to be determined. It’s expected that Liu’s visit will lay the groundwork for trade talks between the two leaders. He, who is Xi’s top official for economic issues, was supposed to visit the US back in September, but he cancelled his visit as the trade tensions between the US and China entered what has been their most acrimonious stage so far – something that many analysts believe helped triggered the dramatic “Shocktober” selloff where global markets erased $8 trillion in market cap.

The US has repeatedly insisted that China agree to a framework of possible concessions ahead of the talks, including at least some of the Trump administration’s central demands – such as lowering the China-US trade surplus (which recently climbed to a record high), ending officially sanctioned IP theft, an end to cyberespionage and reducing government subsidies to China’s tech and industrial base. But whether any progress will be made on these issues remains to be seen.

News of the possible trade detente followed a visit by former US Secretary of State Henry Kissinger, who negotiated the historic meeting between President Richard Nixon and Chinese leader Mao Zedong in 1972.

As China’s currency weakens and the economic fallouts from the trade war worsens, Chinese officials have been advocating for a negotiated end to the trade war by stressing that both sides will suffer if the spate intensifies.

At a business forum in Singapore on Tuesday, Chinese Premier Li Keqiang said China and the US should be cooperative partners.

He said China hoped to achieve a proposal acceptable to both sides based on the principle of mutual respect. “There is no winner in a trade war,” Li said.

The SCMP also hinted at China’s thinking by pointing out that officials were “concerned” that making an offer before the G-20 summit would cost them leverage.

Shi Yinhong, professor of international relations with Beijing’s Renmin University, said the best guess for an outcome of the trade talks could be no further tariffs from China and the US on each other’s products.“But the other half of the trade war, which is the US technology blockade, will not be suspended, no matter who is the US leader,” he said.

In a speech on Monday, Shi said the Chinese government should expand market access, increase imports from the US, and reduce hefty state subsidies and control of economic activities to strive for a “relatively long period or regional” truce in the trade war.

But he added that China was unlikely to fundamentally change its industrial policy.

Shi said China’s top priority now was to curtail the risks of the trade war on its economy and financial system to ensure stability.

If China is hoping to avoid an escalation, then time is running out, as the US is expected to increase its tariffs on $200 billion worth of goods to 25% from 10% at the start of the new year. Of course, given that the timing and date of this visit have yet to be set, a savvy investor would be wise to check this morning’s lineups for CNBC, Fox and BBG – because there’s still time for Larry Kudlow to pour cold water on the report, presumably sending markets back into a tailspin.

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Authored by Michael Snyder via The American Dream blog,

It is really happening.  At one time, the idea that large numbers of people would willingly allow themselves to have microchips implanted into their hands seemed a bit crazy, but now it has become a reality.  Thousands of tech enthusiasts all across Europe have already had microchips implanted, and now a Swedish company is working with very large global employers to implement this on the corporate level.  In fact, Biohax recently told one of the biggest newspapers in the UK that they have been talking with a “major financial services firm” that has  “hundreds of thousands of employees”…

Biohax, a Swedish company that provides human chip implants, told the Telegraph it was in talks with a number of UK legal and financial firms to implant staff with the devices.

One prospective client, which cannot be named, is a major financial services firm with “hundreds of thousands of employees.”

For security-obsessed corporations, this sort of technology can appear to have a lot of upside.  If all of your employees are chipped, you will always know where they are, and you will always know who has access to sensitive areas or sensitive information.

According to a top official from Biohax, the procedure to implant a chip takes “about two seconds”, and it is usually implanted in the hand…

A syringe is used to place the chip in an area between the thumb and forefinger, according to the report. Osterlund said the procedure is similar to ear piercing and takes “about two seconds.” The microchips operate via “near field communication” technology, similar to what is used by no-contact bank cards.

“In a company with 200,000 employees, you can offer this as an opt-in,” Osterlund told the Telegraph.

Right now, many companies use security badges, and I once worked in a building that required a security badge.

But security badges can be lost, stolen or forged.  Theoretically, microchip implants are much more permanent and much more secure, and that is one of the big selling points.  The following is what the chief medical officer of Biohax recently told Fox News…

“The chip implant is a secure way of ensuring that a person’s digital identity is linked to their physical identity. It enables access management in a way that protects individual self-sovereignty and allows users to control the privacy of their online activity,” Dr. Stewart Southey, the Chief Medical Officer at Biohax International, told Fox News.

Of course once this technology starts to be implemented, there will be some workers that will object.

But if it comes down to a choice between getting the implant or losing their jobs, how many workers do you think will choose to become unemployed?

Yes, there will be some that will sacrifice their jobs.  Personally, I will never let anyone put a chip in me.  But just like with so many other things, most of the population will simply choose to accept the “new technology”.

Sadly, the mainstream media is now openly telling us that this is coming.  For example, the following is an excerpt from a recent Fox News article entitled “Are you ready for a chip implant?”…

You walk into a grocery store and pick up eggs. No smartphone? No problem. You swipe your hand across a reader, and the amount is deducted from your bank account.

If that sounds far-fetched, you obviously haven’t been to Sweden recently, where thousands of people have reportedlyhad chips implanted in their bodies.

And not too long ago, the NBC affiliate in Tampa profiled a mother that desperately wants to implant a microchip into her disabled child for safety reasons…

For Steffany Rodroguez-Neely, life is busier than ever. The Bay Area mother-of-three has her hands full 24-hours a day. The ages of her children run the gamut from newborn to teenager. While this Lutz mom prides herself in being an attentive, active, dedicated mother, she’s also a realist. She knows an emergency can happen in a matter of seconds, even to the best of parents.

When Steffany saw the recent tragedy in Pasco County where a toddler wandered into a pond and drowned, her heart was broken. As she talks about it, she shakes her head sadly, closes her eyes and sighs. “It was awful, so sad. You know, good parents have bad things happen,” Steffany told WFLA.

They always like to use the children to make us feel guilty.

The narrative will be that if you are against implantable microchips then you are against child safety and you are a bad person.  By now, you have seen how this works on issue after issue.  There won’t be any talk about the potential tyranny that government-issued identity microchips could unleash.  Instead, all of the talk will be about the “potential benefits” and about how this will make things so much safer “for the children”.

We truly do live in apocalyptic times, and many of us can see where all of this is leading.  Unfortunately, we can complain all that we want but the agenda just keeps moving forward.

Not too long ago, a Wisconsin-based company called Three Square Market began implanting microchips in their employees “on a voluntary basis”.  In the aftermath of that decision, USA Today published an article entitled “You will get chipped — eventually”.  Here are a few lines from that article…

You will get chipped. It’s just a matter of time.

In the aftermath of a Wisconsin firm embedding microchips in employees last week to ditch company badges and corporate logons, the Internet has entered into full-throated debate.

Can you see the psychological tricks that they are using on us?

They want you to believe that it is inevitable and that everyone around  you will eventually give in and get chipped.

As for me and my house, we will never be chipped under any circumstances.  Everything will be “voluntary” in the beginning, but it doesn’t take a genius to figure out how this story will end.

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As increasingly unpopular French President Emmanuel Macron’s calls for creating a “Real European Army” have been met with ridicule from President Trump, who has insisted that Macron should first try meeting France’s NATO commitments…

President Macron of France has just suggested that Europe build its own military in order to protect itself from the U.S., China and Russia. Very insulting, but perhaps Europe should first pay its fair share of NATO, which the U.S. subsidizes greatly!

— Donald J. Trump (@realDonaldTrump) November 9, 2018

…Another senior French official upped the aggressive rhetoric in an interview published on Monday, saying that Europe shouldn’t be afraid of using its power to become “a peaceful empire” to help it stand up to China and the US. French Finance Minister Bruno Le Maire made the comments in an interview with Germay’s Handelsblatt, which noted that Germany remains largely opposed to such a Continent-wide military alliance.

To be sure, Le Maire insisted that “I am using this phrase because, in tomorrow’s world, it’s going to be all about power…technological power, economic, financial, monetary, cultural power – all will be decisive. Europe cannot be shy any longer about using its power.”

Le Maire also hinted that there will be “decisions made” about a Continent-wide fighting force during an upcoming EU summit.

“We have talked about it for a long time. Now it’s time for decisions. And there will be decisions made on December 4, at the next meeting of the economy and finance ministers. I cannot imagine anything else.”

Because the people of Europe have had enough of the “babble from Brussels.”

“Everybody knows it takes guts to stand in the way of Donald Trump’s administration,” Le Maire said. “The people of Europe have had enough of the babble from Brussels. They want to see action.”

In one recent example of European weakness, cited by Le Maire as justification for his imperial ambitions, Europe failed to stop the US from reimposing sanctions on Iran, and has instead opted for a passive alternative: The creation of a Special Purpose Vehicle to circumvent SWIFT and allow European companies to trade with Iran. While the workaround will suffice – for now – the broader problem is that Europe can’t allow the US to decide with whom it can and cannot trade.

Of course, it’s difficult to talk about the creation of a French empire without thinking about Napoleon, the 18th century tyrant who seized power and fought a bloody continent-wide war to spread his “revolutionary principles” across Europe.

Given the timing of the interview, we wonder if Le Maire was aware that Sunday was the 100th anniversary of the Armistice that ended World War I, a horrific, bloody conflict that left some 16 million soldiers dead and ripped apart the continent. If nothing else, this anniversary certainly lent his remarks a hint of irony.

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Authored by Andrew Korybko via Oriental Review,

Turkish President Erdogan warned against so-called “sea bandits”.

He was speaking in regards to the controversial issue of energy exploration in disputed Aegean and Eastern Mediterranean territories along his country’s maritime borders with Greece and Cyprus, the latter of which is comprised of a northeastern third that declared itself the “Turkish Republic of Northern Cyprus” and is only recognized by Ankara.

The Turkish leader threatened that his country “will not allow bandits in the seas to roam free just like we made the terrorists in Syria pay”, which strongly implies its intentions to militarily defend it and its ally’s interests against the much weaker forces of Greece and Cyprus, despite the first-mentioned being a “fellow” member of NATO.

It’s more than likely bluster at this point, but his eyebrow-raising rhetoric draws attention to some very important trends.

The first is that maritime tensions along Turkey’s western and southern peripheries have been heating up, partially due to Israel’s prospective plans to build an “EastMed” gas pipeline connecting the self-proclaimed “Jewish State” with Italy via Cyprus and Greece. Not only could drilling take place off of the divided island, but its internationally recognized government could also receive a windfall of revenue by facilitating this pipeline’s transit across its maritime territory, funds that might be withheld from the northeastern region pending an official resolution of the conflict on Nicosia’s terms. President Erdogan understands just how closely connected the topics of Cyprus’ reunification and its energy geopolitics are, hence why he’s taking such a strong stand at this time in a bid to help his ally gain better negotiating leverage.

The second trend that President Erdogan’s polemics seem to address is the increasing sense that his country is being “contained” along its maritime and mainland borders, the first of which was just touched upon while the second deals with the Syrian Kurds and Armenia. It’s well known that Ankara regards the PYG-YPG as terrorists and has militarily intervened against them twice in Syria, while there’s a looming unease that the new pro-Western Color Revolutionary government of Nikol Pashinyan in Armenia might move uncomfortably closer to the US in the coming future. This fear was heightened after US National Security Advisor John Bolton praised the quality of American arms while visiting Armenia late last month, which made some worry that Washington is trying to militarily court Yerevan despite Armenia denying it.

Altogether, Turkey’s threats against so-called “sea bandits” lurking in the Aegean and Eastern Mediterranean can therefore be interpreted as a reaction against what its government tacitly regards as an ongoing “strategy of tension” all along its maritime and mainland borders. Turkey is beginning to feel like its notional American “ally” is “containing” it despite the incipient rapprochement that the two Great Powers are presently involved in, and it thinks that blustering against what it suspects are the US-backed plans of its Greek and Cypriot neighbors will scare them off and succeed in calling the US’ bluff. The situation is becoming ever more unpredictable and dangerous as Washington and Ankara jostle for influence in the Turkish borderlands, thereby raising the risk of a proxy war by either miscalculation or design.

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On Sunday, Prime Minister Juha Sipila told Yleisradio Oy (Yle), Finland’s national public broadcasting company, that large-scale GPS blackouts over northern Finland during Nato war exercises over the past few weeks were intentional and the culprit could be Russia.

Air Navigation Services Finland (ANS Finland) issued a warning last week for all air traffic due to massive GPS interruption in the northern region of the country. Norway also posted a similar notice about GPS disruption for air traffic during the NATO exercise. 

Here is the announcement on Eurocontrol’s website:

Ivalo airport in Finland’s northernmost region issued a warning of unstable GPS signals last week. The warning was posted as Notice to Airman.

Lapland in Finland and Finnmark in Norway were some of the most affected regions.

“It is possible that Russia has been the disrupting party in this. Russia is known to possess such capabilities,” Sipila told Yle.

The war exercise was mainly conducted in Norway but field training exercises extended into the North Atlantic and the Baltic Sea, as well as in Finland, Sweden, and Iceland. About 29 NATO members and partner countries Finland and Sweden participated in the most significant phase of the exercise, the LIVEX, which was held between October 25 and November 07.

Finland’s participation in Nato’s Trident Juncture has been seen as a move that pushes Helsinki, the capital of Finland, towards Washington, a move that has infuriated Russia.

“Technology-wise it’s relatively easy to disturb a radio signal, and it’s possible that Russia was behind it,” Sipila said, adding that Russia has the capabilities to do it.

”It’s a message to all parties participating in the military exercise,” he warned.

Sipila said GPS jamming poses a severe risk to the commercial aviation industry, it increases the chance of civilian air traffic accidents, and that Finland has prepared to deal with these types of disturbances.

Then on Monday afternoon, Moscow dismissed Sipila’s claims, according to Reuters. Dmitry Peskov told reporters on a call he had zero information that Russia could have been responsible and said his country was regularly accused of all kinds of crimes, most of which were baseless.

While there is no confirmation on who exactly launched the GPS blackout over Finland and Norway during the war exercises, one can certainly get the picture that governments are not telling the public that an electronic warfare battle could be underway (between Russia and NATO), or if that is not the case, then maybe a false flag. No matter who caused the incident, the war drums are beating.

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Authored by Michael Peck via The National Interest,

The Russian military plans to build a military church to bolster the spiritual values of its armed forces.

Meet Vladimir Putin’s newest weapon: a church.

The Russian military plans to build a military church to bolster the spiritual values of its armed forces. Construction will soon begin of the Main Church of the Armed Forces, to be erected in Patriot Park outside Moscow, according to Colonel General Andrei Kartapolov, deputy defense minister and chief of the armed forces’ Main Military-Political Directorate, a new organization responsible for political education of the troops.

The “new church will be one more example of the people’s unity around the idea of patriotism, love, and devotion to our Motherland,” Kartapolov told Russian journalists.

To say the church, dubbed by some as the “Khaki Temple,” will have a martial air would be an understatement.

“The walls of the military church are really made in the color of the standard Russian missile system and armored vehicle,” according to the Russian newspaper The Independent [Google English translation here ] “…From the inside, the walls are decorated with paintings with battle scenes from military history and texts from the Holy Scriptures. The projected height is 95 meters [104 feet] and is designed for 6,000 people.”

“Kartapolov is convinced that the modern Russian serviceman cannot be shaped without shaping lofty spirituality in him,” Russian media said. “Speaking about ideology, the deputy head of the military department pointed out that this will be based on knowledge of the history of our Motherland and people and on historical and cultural traditions.”

“Even though the Russian constitution states that ‘no ideology may be established as state or obligatory,’ the Kremlin continues to search for a unifying set of beliefs,” notes the U.S. Army’s Foreign Military Studies Office.

Religion has long played a role in Russian military life, first through the Russian Orthodox Church in Tsarist times, and then—in a secular way—through Communism in Soviet times. “In late imperial Russia, when they began to build garrisons, every regiment sought to build a regimental church, but not a synagogue or mosque,” Roger Reese, an historian at Texas A&M University who has written books on the Tsarist and Soviet armed forces, told the National Interest. “In Putin’s Russia, the Orthodox Church seeks every opportunity to represent itself as the national religion and tie itself to the state as it had under the tsars, so this act represents continuity broken temporarily by the Soviet years. Of course the Soviet regime did not build churches for the army, but it did build the ‘House of the Red Army,’ shaped like a star, in Moscow dedicated to the use of the Red Army and its soldiers.

In some respects it was analogous to a USO [United Service Organization that supports American soldiers] building. So Putin’s dedicating one particular building to the use of the Russian Army soldiers for purposes of morale—and morals—is in line with that.”

While the thought of a military church will be distasteful to some, Russia is hardly unique in linking the military and religion.

Many armies, the United States and Israel included, maintain chaplains who wear uniform and hold military rank. Chapels are common on military bases, and soldiers are given time for – and sometimes pressured to – attend religious services. While a Russian military church is likely to favor a specific denomination – Russian Orthodoxy – even that isn’t unique: non-Christian members of the U.S. military have complained of religious discrimination , especially by Christian fundamentalists.

What’s interesting is how little things change. Be it the Tsar’s conscripts, or the Red Army’s draftees or the volunteers who comprise much of modern Russia’s military, some spiritual reinforcement is deemed necessary to get soldiers to fight.

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