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While US equities surged on Thursday, reversing a nearly 400 point drop in Dow Jones after several reports predicted that today’s US-China trade talks were going well would have a successful conclusion, hours ago the Mnuchin-led delegation departed Beijing having accomplished nothing. So far, however, this has had no impact on US equity futures (it has hit the Chinese Yuan however), which are hugging the flatline, while Asian stocks dropped and Europe edged higher ahead of the April payroll report due shortly (full preview here).

Europe’s Stoxx 600 Index was modestly in the green ahead of US payrolls data, with the outperforming bourse the SMI (+0.6%). The CAC (-0.1%) underperforming due to disappointing results from Société Générale (-6.9%). This  alongside further financial misses for HSBC (-3%) and BNP Paribas (-2.7%) is dragging on the financial sector, currently down -0.4%. Basic materials and technology companies offset the financial weakness and led gains in the Stoxx Europe 600 index as the euro slipped amid mounting concern about the region’s economic outlook.

Stocks from Sydney to Hong Kong retreated earlier.

Meanwhile, the dollar initially slumped only to bounce back sharply ahead of today’s main event, the nonfarm payrolls report due at 830am EDT. Bloomberg’s Dollar Spot Index rose 0.1%, after slipping 0.1% in Asia; the dollar is set to strengthen versus all of its G-10 peers this week, and is heading for a third week of gains.

The euro slipped after economic data from the region continued to disappoint, while the pound stayed above 200-DMA support against the greenback amid discussions within the U.K. government about the need to extend the Brexit transition period. The Japanese yen was the only currency to edge higher versus the dollar on Friday; The Japanese yen was the only currency to edge higher versus the dollar on Friday as Japan remained closed for a holiday, with local Treasury trading shut.

The key overnight news was the lack of news after the 2-day trade talks in China, where the US asked China to narrow trade surplus by USD 200bln by 2020 to halt its subsidies in manufacturing plan; this was revealed in a document issued to China in advance of trade talks this week. This comes as well as Chinese officials believing that the US trade delegations proposals were unfair. The US trade delegation has now left Beijing.

How will the USD react to today’s payroll print: “Given the fears of higher inflation and what that means for the Fed, it will be the hourly earnings data that will determine financial market reaction,” said Derek Halpenny, European head of global markets research at MUFG. “But, with equity markets so fragile, it is not clear how the dollar would respond to a strong wage print.”

However, while payrolls will come and go, the big story remains the recent surge in the dollar and the accelerating rout in Emerging Markets, where a bevy of currencies, including the TRY, ZAR, INR, IDR and especially the Argentina Peso most recently, have all gotten crushed, in many cases sliding to all time lows, prompting some to ask if another 1997-style EM crisis is on the horizon.

Worse, Emerging Market Bond markets are getting crushed, with the EMB tumbling to a level not seen since the Chinese post-deval crisis in late 2015. A few more point of decline here, and we will have big problems.

There was no instability in U.S. Treasuries, whose yields dropped modestly overnight, trading in a tight range between 2.93% and 2.95%

In commodities, oil is taking a breather from its recent bull run, with WTI (-0.2%) and Brent (-0.2%) off recent highs. Price action has been supported by the looming geological risk from possible new US sanctions against Iran. Iran’s foreign minister said yesterday that US’s demand to change its 2015 nuclear agreement was unacceptable as the May 12th deadline set by US President Trump approaches. Looking ahead, the weekly Baker Hughes rig count  will take focus later in the session.

In the latest Brexit news, Ireland reportedly has the support of EU leaders to veto Brexit trade agreement and collapse discussions next month if PM May fails to push through a customs agreement which averts a hard border for Northern Ireland. Furthermore, reports added that EU officials warned that negotiations on future partnership will be suspended at European summit next month until there is a solution to the customs issue. Ministers were told during a briefing earlier this week that UK may not be able to leave customs union for another 5 years as it may take that long to prepare the technology required to operate the border.

In geopolitical developments, President Trump was said to order the Pentagon to consider a reduction in the number of US troops in South Korea, while there were also reports from South Korean press that North Korea agreed to fully denuclearize by 2020.

Looking at the day ahead, in the US the April employment report will be due. The Fed’s Quarles, Dudley, Williams, Bostic, George and Kaplan are all due to speak. Berkshire Hathaway, Alibaba, HSBC, BNP Paribas and Societe Generale are due to report earnings.

Bulletin Headline Summary from RanSquawk

• Cautious trade seen ahead to key US NFP data
• US trade delegation leaves Beijing with no take-aways
• Looking ahead, highlights include US jobs and Fed’s Quarles, Dudley, Williams, Bostic, George and Kaplan speaking

Market Snapshot

• S&P 500 futures down 0.2% to 2,627.75
• STOXX Europe 600 up 0.3% to 385.62
• MXAP down 0.4% to 172.36
• MXAPJ down 0.7% to 559.60
• Nikkei down 0.2% to 22,472.78
• Topix down 0.2% to 1,771.52
• Hang Seng Index down 1.3% to 29,926.50
• Shanghai Composite down 0.3% to 3,091.03
• Sensex down 0.5% to 34,934.03
• Australia S&P/ASX 200 down 0.6% to 6,062.89
• Kospi down 1% to 2,461.38
• German 10Y yield rose 0.4 bps to 0.536%
• Euro down 0.2% to $1.1967
• Brent Futures down 0.3% to $73.39/bbl
• Italian 10Y yield fell 5.0 bps to 1.485%
• Spanish 10Y yield fell 0.4 bps to 1.25%
• Brent Futures down 0.3% to $73.42/bbl
• Gold spot down 0.2% to $1,309.28
• U.S. Dollar Index up 0.2% to 92.55

Top Overnight News from Bloomberg

• The odds of a deal between the U.S. and China reduced — the U.S. delegation, led by Treasury Secretary Steven Mnuchin, asked China to decrease the trade deficit by at least $200 billion by the end of 2020 compared with 2018, according to a document seen by Bloomberg News that was sent ahead of the trade talks in Beijing
• Donald Trump seems set on pulling out of the Iran nuclear deal next week, with U.S. officials suggesting that any initial diplomatic turbulence will be followed by negotiations for a new accord
• The Brexit transition period will need to be extended potentially for years because any new customs regime will not be ready to come into force in time, according to senior British officials; In local council elections, Britain’s main political parties benefited from the collapse of the U.K. Independence Party, but results saw Jeremy Corbyn’s Labour continue to struggle outside London
• President Mauricio Macri of Argentina is starting to try the patience of global investors. More than two years into his efforts to revive South America’s second- largest economy, his government is suddenly being tested by an abrupt decline in the peso
• Bank of England will refrain from raising rates next week but is still set to start normalizing policy, according to the National Institute of Economic and Social Research
• RBA sees slightly higher core inflation and unemployment in 2018 as it edged up core inflation and unemployment forecasts for 2018 and reaffirmed that tighter policy will be needed “at some point”
• Barclays, which stood firm last week as banks tore up their outlooks, has joined the exodus after the purchasing managers index showed the sector failed to “rebound convincingly” last month
• HSBC’s new Chief Executive Officer John Flint announced a $2b share buyback to placate investors as he works to bolster growth
• The euro-area economy looks set for further weakness in May after private-sector activity slowed for a third month in April, further adding doubts on the ECB’s plan to end its stimulus program

Asia stocks traded with a subdued tone following a yo-yo session in US where stocks finished mostly negative although well off worst levels, while the absence of Japan and looming US NFP jobs data added to the lacklustre tone. ASX 200 (-0.5%) was negative with the index dragged by financials and most commodity-related sectors, while KOSPI (-0.7%) also traded downbeat as index heavyweight Samsung Electronics slumped on its re-open from a 50-to-1 stock split. Elsewhere, Shanghai Comp. (-0.1%) and Hang Seng (-0.3%) conformed to the gloom following another liquidity drain by the PBoC and amid IPO activity in which Ping An Insurance unit Good Doctor failed to set-off fireworks on its debut, however mainland losses were stemmed amid encouraging Caixin Composite and Services PMI data. PBoC injected CNY 20bln via 7-day reverse repos for a net weekly drain of CNY 110bln

Top Asian News

• Samsung Electronics’ Post-Split Comeback Drags Korea Equities
• There’s a Bond ETF Boom in Taiwan, Thanks to Life Insurers

European equities tracking higher ahead of US NFP data later on in the day, with the outperforming bourse the SMI (+0.6%). The CAC (-0.1%) underperforming due to disappointing results from Société Générale (-6.9%). This alongside further financial misses for HSBC (-3%) and BNP Paribas (-2.7%) is dragging on the financial sector, currently down -0.4%. Some encouragement found in BASF (+1.1%), as well as EDF (+0.8%), whom announced the largest energy acquisition of the year.

Top European News

• Euro-Area Economy Heads for More Weakness After April Slowdown
• Corbyn Has Little to Celebrate in Britain’s Local Elections
• Constancio: Unconventional Tools Should Be Used Whenever Needed

In FX, the dollar remains relatively firm overall, and especially against EM currencies that continue to collapse (ie Lira slumping to fresh record lows vs the Greenback near 4.2600). However, the DXY is still consolidating off recent peaks set before the FOMC (new 2018 high around 92.800), with bulls perhaps wary about getting too carried away after hawkish Fed expectations were somewhat overdone, or at least undone by the shift to a symmetrical inflation target. Technically, the aforementioned new ytd best forms nearest resistance, while there is little of note on the downside ahead of 92.000. JPY: A marginal outperformer within the G10 basket and pulling back further from highs just above 110.00 to test bids/buying interest at 109.00 and briefly below overnight, but with trading volumes still impacted by the lack of Japanese participants. Decent 108.75-85 option expiry interest (1 bn) could come into play on a weak US jobs report or bad news on the US-China trade talks front. AUD/NZD: The tussle down under rages on, and the Aud is stretching its legs having overtaken the Kiwi late yesterday with the cross staging a firmer rebound above 1.0700 and Eur/Usd down through 1.5900 in wake of firmer than forecast Chinese Caixin PMIs, rather than anything fresh or Aud supportive from the RBA’s SOMP. Meanwhile, Nzd/Usd is looking precarious again close to 0.7000. CHF/GBP/EUR/CAD: All softer vs the Dollar after Usd/Chf dabbled with parity again on Thursday, while Cable is testing reported bidding interest between 1.3550-20 again and only a few pips off the 200 DMA (1.3539) on more negative Brexit impulses and another UK GDP downgrade. Eur/Usd capped by its 200 DMA (1.2015-20) and a 1.2000 expiry, but still looking ‘comfortably’ supported ahead of a major Fib (1.1936) and the 2018 base (1.1916). Usd/Cad remains bid circa 1.2800 and toppy near 1.2900, but the Loonie is still suffering to an extent after yesterday’s trade data revealed a record deficit – IVEY PMI due later

In commodities, oil is taking a breather from its recent bull run, with WTI (-0.2%) and Brent (-0.2%) off recent highs. Price action has been supported by the looming geological risk from possible new US sanctions against Iran. Iran’s foreign minister said yesterday that US’s demand to change its 2015 nuclear agreement was unacceptable as the May 12th deadline set by US President Trump approaches. Looking ahead, the weekly Baker Hughes rig count (1800BST/1200CDT) will take focus later in the session. Moving onto metals, gold (-0.1%) prices have steadied ahead of key US jobs data due later today. In terms of base metals, copper has seen modest gains, while the red metal also weathered an early wobble seen in Dalian iron ore futures which slipped 2% at the open during the 1st day foreign investors were permitted to trade Chinese iron futures. Elsewhere, London base metal prices rose today, led by the rise in aluminium, climbing as much as 1.9% having fallen 2.3% in the previous session.

US Event Calendar

• 8:30am: Change in Nonfarm Payrolls, est. 192,000, prior 103,000;
  • Change in Private Payrolls, est. 190,000, prior 102,000
  • Change in Manufact. Payrolls, est. 20,000, prior 22,00
• Unemployment Rate, est. 4.0%, prior 4.1%; Underemployment Rate, prior 8.0%
• Average Hourly Earnings MoM, est. 0.2%, prior 0.3%; YoY, est. 2.7%, prior 2.7%
• Average Weekly Hours All Employees, est. 34.5, prior 34.5
• Labor Force Participation Rate, est. 62.9%, prior 62.9%

DB’s Jim Reid concludes the overnight wrap

Today we’ll learn more about the state of the US labour market with special attention focused at the moment on earnings. As of this morning the market consensus for the payrolls print is 192k. As a reminder this follows that much lower than expected 103k reading in March and the bumper 326k reading in February. Random number generation at its finest. Our US economists have a 185k forecast for this afternoon and expect payrolls to rebound from last month’s weather distorted data, especially as the construction sector experienced the largest drop since April 2007 last time out. Given all the talk in markets is about US inflation and wages at the moment, arguably the more significant aspect of today’s report will be the average hourly earnings number. The consensus for that is +0.2% mom which would keep the annual rate at +2.7% yoy. Our colleagues expect a slightly stronger +0.3% mom to send a broadly consistent signal to the stronger ECI data last week (which hit a post crisis high). If this expectation is correct, our economists’ estimate would actually push the annual rate up to +2.8% yoy and just below the hurricane-induced spike in September 2017 that set the high water mark for this recovery. The other important data to watch is the unemployment rate which is expected to fall to 4.0% after remaining stuck at 4.1% for the last six months, the longest streak with a stable unemployment rate since the late 1960s. Our economists note that four percent unemployment could be an important development, as they have previously noted that the wage Phillips curve tends to steepen around this level, suggesting that further unemployment declines will begin to exert increasing upside pressure on wages. Anyway, that data is due at 1.30pm BST this afternoon.

Ahead of this there were a lot of mildly negative news around yesterday which compounded up to create a decent slug of global risk off that peaked just before Europe went home. At this point the S&P 500 traded down -1.56%. However from there stronger tech stocks and White House economist Mark Calabria’s comments on US-China trade talks being “fairly positive” so far seemed to help the S&P recover and to close at -0.23%, while the Dow also recovered c400pts to end higher for the day (+0.02%).

Knocking sentiment earlier, we had Euro CPI sharply lower, some downplaying rhetoric from China and the US about the chances of success at their trade summits, Tesla and AIG falling -8.6% and -9.6% respectively after results, the ISM non-manufacturing a bit weaker, the US bank index trading down to c5 month lows as yields fell, and Argentina dragging down EM with a 300bps hike to go with the same seen last week.

There was a similar mini-roller coaster ride over in government bonds, the yield on 10y Bunds initially increased a couple of bps early in the session to 0.589%, but dropped as much as -6.6bp following the softer than expected CPI print (more below), ending the day at 0.528% (-4.9bp). Elsewhere, yields on UST 10y (-2bp) and OATs (-4.2bp) were also lower while Gilts fell -7bp after a weaker than expected rebound in the services sector PMI.

The Argentinian story was fascinating. Their central bank hiked rates 300bps to 33.25% only 6 days after the same sized move, as the bank took the action to “guarantee the process of disinflation and is ready to act again if necessary”. The Peso dropped -5.6% vs. the Greenback yesterday (-20.2% YTD), while yields on its 10y bond (USD) jumped 30.7bp to 7.535%. Remember it was only around a year ago that Argentina did a 100 year bond. This traded down -1.94 to a cash price of 85.697 during the day. One to keep an eye on.

This morning in Asia, markets are trading lower with the Kospi (-0.64%), Hang Seng (-0.35%) and Shanghai Comp. (-0.12%) all modestly down while Japanese markets are closed for holidays. In Beijing, Treasury Secretary Mnuchin said the US and China are having a “very good conversation” ahead of the today’s meetings. Datawise, China’s April Caixin composite PMI edged up 0.5pt mom to 52.3 while the services PMI was also better than expected at 52.9 (vs. 52.3).

Now recapping other markets performance from yesterday. The US dollar index weakened for the first time in four days (-0.11%) while the Euro rose +0.31% and Sterling ended broadly flat. European bourses were all lower, weighed down by the stronger Euro and softer than expected corporate results. Across the region, the Stoxx 600 (-0.73%), DAX (-0.88%) and FTSE (-0.54%) were all softer. WTI oil firmed +0.74% to $68.43/bbl following further tensions between US and Iran.

Away from the markets, the European Commission has kept its latest forecasts for 2018 and 2019 GDP growth unchanged at 2.3% and 2% respectively. In terms of the recent softening in economic indicators, the ECB’s Praet noted that “temporary factors may also be at work. We will also need to monitor whether…these developments reflect a more durable softening in demand”. He also reiterated that inflation developments remain subdued and an ample degree of monetary stimulus remains necessary. Elsewhere, the ECB’s Hansson seemed relatively upbeat and sees “moderate wage growth pressure” that will ultimately allow the bank to exit QE.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the macro data was mixed. The April ISM nonmanufacturing index fell 2pts mom to a four month low (56.8 vs. 58 expected) but  still consistent with US growth being above trend. In the details, the activity index fell 1.5pts to 59.1 but the new export orders index jumped 2.5pts to a 12-month high of 61.5. The March trade deficit narrowed to a six month low (-$49bln vs. -$50bln expected) as growth in exports outpaced imports. Elsewhere, the 1Q nonfarm productivity came in below market at 0.7% (vs. 0.9% expected) while the March factory orders was above expectations at 1.6% mom (vs. 1.4%). In labour markets, the weekly initial jobless (211k vs. 225k expected) & continuing claims (1,756k vs. 1,835k expected) were both lower than expectations, with the former hovering near its 48 year low. Lastly, the final reading for April Markit composite and service PMI was revised up 0.1-0.2ppt to 54.9 and 54.6 respectively, while the core capital goods orders was revised down by 0.3ppt to -0.4% mom. Following the above, the Atlanta Fed’s GDPNow estimate for Q2 GDP growth is now at 4.0% saar.

The Eurozone’s April core CPI was weaker than expected at 0.7% yoy (vs 0.9%) and fell 0.3ppt mom. Our European economists believe this mainly reflects the impact of Easter timing on services prices (core goods inflation rose a tenth to 0.3% yoy), so they expect core inflation to rebound to around 1.0% yoy in May. Elsewhere, the March PPI was in line at 2.1% yoy. In the UK, the April Markit services PMI (52.8 vs. 53.5 expected) and composite PMI (53.2 vs. 53.7 expected) were both softer than expected as it continues to show the weaker momentum trend of late.

Looking at the day ahead, in the US the April employment report will be due. In Europe the final April services and composite PMIs will be released, while France’s March trade balance and the Euro area’s March retail sales data will also be out. The Fed’s Dudley and ECB’s Constancio are due to speak. Berkshire Hathaway, Alibaba, HSBC, BNP Paribas and Societe Generale are due to report earnings.

via RSS https://ift.tt/2rj23mw Tyler Durden

For the first time since the middle of World War II, the Nobel Foundation has decided to postpone awarding this year’s Nobel Prize in Literature following a sexual misconduct scandal centered around the French husband of one of the academy’s 18 members.

While the scandal might be unfamiliar to many readers in the US, it has roiled Swedish society, resulting in eight of the 18 members of the Nobel Academy resigning (even though their membership is technically a lifetime appointment without a provision for resignation) following a failed attempt to expel Katarina Frostenson, a member whose husband, French photographer Jean-Claude Arnault, has been accused of sexual misconduct by 18 women, including Sweden’s Crown Princess Victoria, whom he’s accused of touching inappropriately, according to CNN.

Compounding the embarrassment for the academy, the press published a letter that had allegedly been sent to the academy in 1996 warning it of Arnault’s behavior. Both Arnault and Frostenson had founded cultural forums in Sweden that had been receiving money from the Swedish Academy. The subsequent investigation has caused an uproar as the #MeToo movement comes to Sweden.

The lawyers also discovered that the academy had received a letter in 1996 outlining alleged sexual assault at Arnault’s cultural forum, indicating that November was not the first time that at least some members of the academy were aware that the photographer’s name had been connected with misconduct.

It also confirmed that the academy had broken its own rules relating to conflicts of interest by providing funding to the cultural forum run by Arnault and Frostenson. In a statement in April, the Swedish Academy said it “deeply regrets that the letter was shelved and no measures taken to investigate the charges.”

The scandal has exposed deep divisions within the academy’s membership and severely damaged its reputation, both in Sweden — a country often considered a model for gender equality and abroad. Alexandra Pascalidou, a Swedish-Greek journalist and author of a book about the #MeToo movement in Sweden, told CNN earlier this week that the scandal had exposed the institution as “too stale and old-fashioned to be Sweden 2018.”

In a statement, the Nobel Foundation, which oversees all the Nobel prizes, acknowledged that the crisis had tarnished its reputation and that delaying the prize “underscores the seriousness of the situation.”

The Nobel Foundation, which oversees all the Nobel prizes, acknowledged the crisis had tarnished the wider organization and welcomed the Swedish Academy’s announcement. “The crisis in the Swedish Academy has adversely affected the Nobel Prize. Their decision underscores the seriousness of the situation and will help safeguard the long-term reputation of the Nobel Prize. None of this impacts the awarding of the 2018 Nobel Prizes in other prize categories,” it said in a statement.

Not everybody is upset that the prize is being postponed – in fact, some believe it should be scrapped altogether, particularly after it was awarded to US singer-songwriter Bob Dylan last year, a decision that befuddled literary critics.

Writing in the New York Times Opinion Section, Tim Parks questioned the purpose of the prize, arguing that literature isn’t a competition, and that it makes little sense to pit literary works from disparate cultures against one another.

Literature is not tennis or football, where international competition makes sense. It is intimately tied to the language and culture from which it emerges. Literary style distinguishes itself by its distance from the other styles that surround it, implying a community of readers with a shared knowledge of other literary works, of standard language usage and cultural context. What sense does it make for a group from one culture — be it Swedish, American, Nigerian or Japanese — to seek to compare a Bolivian poet with a Korean novelist, an American singer-songwriter with a Russian playwright, and so on? Why would we even want them to do that?

Still, the Nobel Prize is perhaps the most prestigious literary award on the planet. Seeing it scrapped would be an epoch-defining moment in world literature. But of course, the Nobel Prize for Literature is hardly the only Nobel that’s been tainted by scandal in recent years. Barack Obama was awarded the Nobel Peace Prize during his first term with nothing in terms of actual accomplishments on his resume. And recently, Myanmar politician and former dissident Aung San Suu Kyi, who received the peace prize in 1991, has been accused of turning a blind eye as Burmese soldiers slaughtered members of a minority group in what is widely considered a genocide.

via RSS https://ift.tt/2KBv2L1 Tyler Durden

Moments ago, the US trade delegation led by Steven Mnuchin, and which included Wilbur Ross, US commerce secretary, Robert Lighthizer, US trade representative, and White House trade adviser Peter Navarro, left China after two days of U.S.-China trade discussions ended on Friday without a concrete deal, only an agreement to keep on talking.

On Friday afternoon, China’s official Xinhua News Agency reported that both sides reached a consensus on some trade issues, without providing details. More importantly, they acknowledged major disagreements on some matters and will continue communicating to work toward making more progress.

The biggest surprise, according to the FT, is that heading into the talks the US delegation asked China to cut the bilateral trade deficit by $200BN by 2020, reduce tariffs and cut subsidies for emerging industries, according to a document seen by the Financial Times. The surprise is that the revised $200BN target is already double the $100BN amount that US President Donald Trump demanded just two months ago be wiped from last year’s $337BN US deficit in goods and services. According to the document, the US aims to cut the deficit by $100bn in the year beginning June 1, and by a further $100bn between June 2019 and May 2020.

Some more details on the list of US demands from the WSJ:

• The U.S. also demanded that China immediately stop providing subsidies and other assistance for advanced technologies outlined in the government’s Made in China 2025 plan. The initiative aims for China to dominate future frontiers of manufacturing and industry, from robotics and aviation to new-energy vehicles.
• The U.S. also asked China to cut tariffs on “all products in non-critical sectors” to levels that are no higher than the levels that the U.S. applies to imports, according to the document.
• In addition, the U.S. also asked China to guarantee that it won’t hit back at the U.S. for any actions taken in the disputes over intellectual property.
• It also asked that China withdraw its challenges in this area at the World Trade Organization.
• China believes that the demands are “unfair”

By early afternoon Friday neither side had flagged plans to give a briefing on the discussions, and the American team departed shortly after.

According to Bloomberg, earlier in the day Mnuchin said that the U.S. and China had been having a “very good conversation,” without elaborating. While China hasn’t indicated any detail on what it may be prepared to agree to, a senior official sounded a defiant tone ahead of the meeting, and the state news agency warned against “unreasonable demands”, a stark difference to the CNN rumor released on Thursday that the deals would be successful, and which sent the market soaring.

Foreign ministry spokeswoman Hua Chunying said at a Friday afternoon briefing there’s no specific information on the talks.

To be sure, the U.S. tempered expectations of a major breakthrough from the discussions, which were expected to focus on concerns over China’s state-driven economy, forced technology transfers and America’s widening trade deficit with China. Underscoring the friction, the US trade report released Thursday showed the trade gap with China surged by 16 percent to more than $91 billion in the first quarter of this year.

Quoted by Bloomberg, an unnamed senior Chinese government official said before the talks the government won’t accept U.S. preconditions for negotiations such as abandoning its long-term advanced manufacturing ambitions or narrowing the trade gap by $100 billion. We can only imagine what they said when they learned the latest demand was a $200 billion deficit cut.

During the second day of discussions, across town at Beijing’s Great Hall of the People, President Xi Jinping indicated China will continue to embrace globalism, saying it wants to actively take part in world governance. Those who reject the world will be rejected by the world, he said in a speech commemorating the 200th anniversary of Karl Marx’s birth.

The disappointing outcome will probably not come as a big surprise as analysts weren’t very optimistic about the potential outcomes beyond the two countries possibly delaying on the threat of tit-for-tat tariffs.

“Our expectations are low. The U.S. negotiating position is unclear — indeed it’s not even clear if the U.S. representatives have a unified view on what they want to achieve,” Tom Orlik, chief economist at Bloomberg Economics in Beijing, wrote in a report. “The Chinese side has already made concessions and won’t rush to make more. The past few weeks have shown that markets can be roiled by tariff chatter, so that’s certainly a possibility in the next couple of days.”

If anything, the meetings were an opportunity for the two sides to exchange their views face to face after the official channel for U.S.-China high-level economic talks were suspended last year.

In response to the news, the yuan declined in the late afternoon, reversing earlier gains, and the USDCNH jumped from 6.3450 to 6.365 as news of the failure to reach an agreement spread. “The market has been disappointed as the China-U.S. trade talks failed to make a breakthrough” said Ken Cheung, Asian FX strategist at Mizuho Bank, adding that “this outcome increases the possibility for China to curb further yuan appreciation, given concerns over the negative impact from a trade conflict on the nation’s economic growth.”

Having surged on the rumor of a favorable trade talk outcome yesterday, US stocks are unchanged today after the talks ended without any tangible success.

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Authored by Rob Slane via TheBlogMire.com,

People living in the Soviet Union had a wonderful phrase to describe the two biggest circulation state-controlled newspapers, Pravda (meaning “truth”) and Izvestia (meaning “news”) – there’s no truth in Pravda and no news in Izvestia, was the oft-repeated expression. It is unfortunate that the mainstream media in the Western nations these days don’t have similar sorts of names, since it deprives us of an endless source of amusement in coming up with similarly apposite phrases about them.

It is, however, increasingly clear that on the great issues of the day, you are about as likely to find the truth in them as you would have done in Pravda, although I expect their sports and gardening sections are still relatively reliable. As for the important political and geopolitical issues of the day, I tend to imagine that on the walls next to the desks in the offices of many of these papers and broadcasters are the following instructions:

Rules for Reporting on Global Affairs

1. Repeat Government line unquestioningly.

2. If Government line is questioned, accuse those doing the questioning of being Bots, Kremlin-trolls and useful idiots.

3. If the persistent questioning won’t go away and the Government line is seen to be contradictory and full of holes, bury the issue completely and start posing deep questions, such as “What will Meghan wear?” or “Is there a gender pay gap in midwifery?” or “How much sugar is really bad for you?”

The Skripal and Douma episodes have demonstrated this perhaps more than any others.

First the Government line has been dutifully parroted by the media in a relentless propaganda campaign — no questions asked.

Then there have been attempts to silence or ridicule those who didn’t bow to the parrots and who were asking legitimate questions — including the appalling treatment meted out to distinguished military men.

And finally, both issues now appear to have been “disappeared” down the Memory Hole, apparently to be forgotten forever and ever.

This last point is so obvious in the Skripal case that it has caused some to speculate that the British Government has slapped a D-Notice on the case (this is a formal notice to the media to limit their coverage of the story on grounds of “national security”). I can hardly help thinking of that without giving a horse laugh. A D-Notice to stop the media reporting on the case on the grounds of national security? What’s funny about it is that all the media has done since day one of the case is to endlessly repeat the Government line on absolutely everything, even when that line became so utterly ludicrous that believing it required one to hold a number of contradictory and irreconcilable thoughts in one’s head at the same time.

In other words, if there is indeed a D-Notice on the issue, which seems very likely given the fact that there is now almost zero coverage of the case in the British media, it can have nothing to do with national security, per se, since from the get-go it was clear that the media had no interest in investigating any of the claims made by Government. The Government line was perfectly safe from being questioned by those who are apparently not able to report on it now, and so one can only conclude that it is because the Government line is so obviously full of holes that reporting on it needed to be stopped, lest increasing numbers of rational people recognised it to be somewhat barking.

It’s a shame really. I began to look forward to seeing what each day’s new dose of cock and bull would bring forth. They were poisoned at the restaurant. No the car. No the cemetery. The flowers. No, it was in the luggage. No, the bench. No, it was porridge. No, no, no! It was on the door handle, and it was liquid, which although tending to be runny, remained there for three weeks, even in all that rain and snow, in highly pure form, and you know the amazing thing is that people without protection stood just feet away from it, and they are fine. Whoda thunk it? But it is military-grade nerve agent “of a type developed by Russia” nonetheless. Seriously guv.

Oh and they’re in a coma. Sergei and Yulia, that is. Likely to die they are. A judge will probably have to take the decision to switch off their life support. Oh hang on, Yulia’s on the phone. Yes of course she is. She’s fine. Sorry we forgot to mention that before when we were talking about the life support machine. And Sergei’s okay too. Yes we can confirm that. Sorry we didn’t mention that before either. But he’s unable to talk. So you won’t hear from him. Or her. He’s in the hospital, though. Probably. Don’t know where she is. Not to be disturbed though.

Oh and there’s the policeman at the bench. Sorry, we meant the house. The house and the bench. Which one? How on earth should we know? Both probably. At the same time. But he can’t talk either.

What is particularly funny is that according to Mark Sedwell, the UK’s National Security Advisor, certain classified information – such as the apparent door handle delivery method – was released in order to “counter Russian disinformation”. Ah so it was Russian disinformation that took us from the restaurant to the car to the cemetery to the flowers to the luggage to the bench via the porridge and finally (finally???) to the door handle (I say “finally???” only because nobody has yet suggested the cat as the conduit for the poison)? So it was Russian disinformation that tried to sell us the idea of a slow-working, lethal yet non-lethal, military-grade nerve agent that enables its victims to go to restaurants, make them hallucinate and then be as right as rain a few weeks later? So it was Russian disinformation that told us that after studying hours of CCTV footage, British intelligence had a suspect in the case – the dashingly handsome, astonishingly intelligent, and diabolically ruthless former KGB agent, codenamed “Gordon” or was it “Cecil” or “Squiffy” or something, with a penchant for martial arts and (who can doubt) fast cars and loose women – only for Mark Sedwell to tell MPs a week later that there is no suspect, there never has been a suspect, and the investigation has been hampered by lack of CCTV footage?

Russian disinformation? Alas no. It was the UK media wot did it. They managed to put about more disinformation, stuff and nonsense, and cock and bull in a month or so than 10,000 “trolls” working 16 hour shifts in a basement in St. Petersburg could have done in a decade. And so you can see why the Government might want to slap a D-Notice on it, can’t you? Except that it should obviously be a C-Notice, the C standing for Comedy.

As for Douma, the media excelled itself there as well. There we have three Governments, apparently dropping bombs on chemical weapons depots in response to an unproven chemical weapons attack, and not one journalist in the mainstream media thought to say, “Hang on a minute! You dropped bombs on what you thought was a chemical weapons depot? Isn’t that … em … a tad on the dangerous side? Toxic fumes and people in the surrounding area becoming contaminated and all that?”

And when nobody became contaminated, not one mainstream media journalist thought to ask, “Hang on a minute! Isn’t the fact that there was no release of toxic substances into the atmosphere when you bombed it sort of like evidence that … em … how can we put it … there weren’t any toxic substances there?”

And when one of the little boys and the doctors in the “chemical attack” video that the Western Governments used as a pretext to bomb a sovereign country and spook us into wondering whether WWIII was about to start — when they turned up alive and well in The Hague to testify that there was no chemical attack, did even one mainstream media journalist think to themselves, “Maybe it would be good to hear what they have to say, since they were there?” Alas no. Some moved onto number 2 in the Rules for Reporting on Global Affairs, denouncing with barely concealed fury the testimony of the very people who had appeared in the original video that had once seemed so persuasive to them, whilst others moved onto number 3, and started talking about what Kim Kardashian has been up to lately.

It is clear that there is a deep sickness at the heart of the media. The whole point of its existence is to investigate incidents, to go where the facts lead it, and to serve ordinary people by attempting to report and reveal what is true. And above all that, it is to act as a check on the overweening state, so that it does not feel that it has carte blanche to do whatsoever it wishes.

But the handling of these two major cases has shown perhaps more than ever before that it has no intention of doing these things. It will not investigate, it has no intention of revealing inconvenient facts, and it cares little for the truth. And above all, instead of acting as a break on the state and on Government recklessness, its chief concern now appears to be doing the bidding of a very powerful group of Globalists, defending and advancing their diabolical agenda, regardless of what is and what isn’t true.

What should we call such a media that seems to have little or no regard for the truth, and which collectively serves the interests of the Global elite? Mainstream? Globalist Pravda Network seems to me to be a more accurate description.

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Germany better hope that Europe’s various artificial war-deterring monetary, customs, economic, political and so forth “unions” hold for the foreseeable future, as the alternative could be dire.

According to Spiegel, only four of the Luftwaffe’s state-of-the-art Eurofighter jets are currently in good enough shape to be called on in the event of an invasion of German airspace, leaving the German armed forces to once again have to fight off allegations that their forces are not fit for combat.

Theoretically the Luftwaffe has 128 Eurofighters – which make up the majority of Germany’s air combat force – ready for deployment. But in a Wednesday report on Spiegel, a defect in the jets’ self-defense systems means that in practice only four them can be sent on mission.

The defect concerns a sensor on the jet’s wing which alerts pilots to an incoming attack. Technicians noticed a year and a half ago that the sensors were not staying cool during flights. It was then discovered that the cooling liquid had been leaking out of the pods the sensors were housed in.

Obtaining a replacement has not been easy, however. The reason: a special seal is required to hold the liquid inside, but the company that produced the seal was quietly sold off without the supplier informing the German Defense Ministry.

Germany’s lack of military preparedness could also infuriate Trump as it means Germany can not even fulfill its basic NATO obligations. Europe’s biggest economy has pledged to its NATO partners that it could deploy 82 Eurofighters in the event of a military crisis. In reality, it could not even do 5% of that.

* * *

For years the German armed forces (Bundeswehr) have been dogged by allegations they are not ready for real life missions.

Earlier this year a damning parliamentary report concluded that the state of the military preparedness had deteriorated further in recent years: “The army’s readiness to deploy has not improved in recent years, but instead has got even worse,” Parliamentary Armed Forces Commissioner Hans-Peter Bartels said as he presented his annual findings at a press conference in February.

The lack of a credible German airforce follows a similar involuntary phase out of Germany’s submarine capabilities. By the end of 2017, all Germany’s submarines were in drydock for repairs, while in recent months there have been periods where none of the air force’s 14 A400M transport planes were airworthy.

The report also found wider problems in Luftwaffe. Air force pilots are unable to train as their aircraft are grounded for maintenance for much of the year, the report noted.

Spending on defense has been cut repeatedly since 1990 and the end of the Cold War, leaving the army with often outdated equipment and the defense industry unable to suddenly increase production to fill the gaps.

While the probability of a major war breaking out in Europe at this moment is slim, Europe’s biggest economy being unable to even modestly satisfy NATO requirements could be just the catalyst that sets Trump off the rails during his next meeting with Merkel, having repeatedly laid out his demands that Germany and other NATO member states step up their defense spending to the recommended 2% of GDP threshold.

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Authored by Burak Bekdil via The Gatestone Institute,

Many Middle East despots have historically accused the free world of being terrorists.

For Hamas and the Muslim Brotherhood, for instance, the entire Western civilization is a terrorist machine programmed to spill Muslim blood. Turkey’s strongman, President Recep Tayyip Erdoğan, is no exception.

In an April speech Erdoğan, evidently overcome with amnesia regarding Turkey’s invasions of Northern Cyprus and, a few weeks ago, Syria’s Afrin, called Israeli Prime Minister Benjamin Netanyahu a “terrorist.” Erdoğan told party loyalists:

“We don’t have the shame of invading on us, Netanyahu. You are an invader and right now are present in those lands as an invader. At the same time, you are a terrorist.”

In another speech, again apparently succumbing to amnesia regarding decades of Arab and Muslim wars against Israel, he said: “You [Israel] are a terrorist state. It is known what you have done in Gaza and what you have done in Jerusalem. You have no one that likes you in the world.” — as if the entire world were a fan of Erdoğan.

On April 7, Erdoğan accused France of abetting terrorists by “hosting them” at the Élysée Palace, amid a diplomatic row between NATO allies Turkey and France over Paris’s support for the Syrian Democratic Forces (SDF), the main, Kurdish-dominated ground force that defeated Islamic State swathes of land in Syria. SDF also is an ally of the U.S. troops fighting in Syria. But Erdoğan said:

“You [France] will not be able to explain this. You will not be able to rid yourself of this terror burden… As long as the West nurtures these terrorists, you will sink”.

Then, there is the United States that “works with the terrorists:” In February Turkey warned American soldiers in Syria of the possibility of being treated as terrorists if they keep backing Kurdish militants. Deputy Prime Minister Bekir Bozdağ threatened that U.S. soldiers risk being caught up in clashes and that Turkish troops would not make a distinction if Americans appear in Kurdish uniforms.

In the worldview of the Turkish government, almost the entire continent of Europe is made up of terrorist states. In an April 25 speech, Prime Minister Binali Yıldırım accused European nations, with the exception of Spain, of supporting terrorist organizations. A few weeks earlier, Yıldırım warned Bosnia-Herzegovina, a state friendly to Turkey, that it could be a target if it supported the “Gülenist terror organization,” a reference to the Muslim cleric, Fethullah Gülen, who was once Erdoğan’s staunch ally, but now is in self-imposed exile in Pennsylvania.

Anyone who freely thinks for himself regarding Erdoğan’s one-man rule, at home or abroad, can get the label “terrorist.” On March 24, Erdoğan criticized anti-war students at one of Turkey’s best universities, Boğaziçi, calling some of the people there terrorists after a fight that erupted on campus over Turkey’s military incursion into a Kurdish enclave in neighboring Syria. He called the protesting students “communist, traitor youth” protesting a “religious, nationalist, local youth.” The “communist, traitor youth” were immediately detained.

On April 25, a Turkish court sentenced 14 staff members of the opposition newspaper Cumhuriyet to prison on charges of “terrorism,” and handed down sentences ranging from 2½ years to 7½ years. Another defendant in the case, who was not employed by Cumhuriyet and had been charged for his activities on Twitter, got the stiffest sentence, 10 years. “It has been journalism itself that has been in the dock and today’s verdicts defy logic and offend justice,” said Milena Buyum, Turkey campaigner at rights group Amnesty International. “These politically motivated sentences are clearly intended to instill fear and silence any form of dissent.”

All that is insane. When Erdoğan is not fighting hundreds of millions of “terrorists,” including almost the entire European continent, the U.S. and probably half his own nation, he is busy cultivating deeper ties with countries such as Russia, Sudan and Iran.

During a December visit to Sudan, Erdoğan called his host, President Omar al-Bashir “his brother”. Sadly, Erdoğan’s brother, al-Bashir, is a man who is wantedby the International Criminal Court on charges of genocide and war crimes against his people.

Erdoğan, meanwhile, is allying with Russia and Iran, ironically, to topple Syria’s Russia- and Iran-backed dictator, Syrian President Bashar al-Assad and to “bring peace to Syria” while invading the Kurdish enclaves in the country’s north.

In Erdoğan’s ideological divide, the world consists of “terrorist” countries such as the entire continent of Europe (minus Spain), plus the U.S. and half of his own country — as opposed to “noble” countries such as Russia, Sudan and Iran.

Russian President Vladimir Putin meets with Iranian President Hassan Rouhani and Turkish President Recep Tayyip Erdoğan in Sochi, Russia, on November 22, 2017. (Image source: kremlin.ru)

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It appears that nationalists were on to something when they warned about “no go” zones in Germany, Sweden and other European countries that have taken in millions of migrants from Syria, Afghanistan, Eritrea and elsewhere since 2015.

While progressive Europeans scoffed, a report by RT illustrates how law enforcement is losing control of some neighborhoods. In a shocking incident that unfolded in the town of Ellwangen in Southern Germany, police officers were forced to release an asylum seeker who had been detained and was set to be ejected from the country.

The reason? A an angry mob surrounded them and began demand that the Togolese national be released in an “aggressive and threatening” manner.

After failing to disperse or contain the crowd, the overwhelmed officers were left with no choice but to let the detained man go free to avoid “a drastic escalation of the situation that could occur otherwise.”

At one point the mob swelled from 50 to more than 150 migrants. Just as violence appeared inevitable, the migrants sent a peace emissary who delivered a chilling message to the overwhelmed police: They could leave safely if they removed the man’s handcuffs and released him tot eh crowd within two minutes.

Otherwise, the migrants would storm the gates of the ward. Following the incident, the man who had been detained has not yet been found.

But perhaps the most shocking detail from the story was the response by the local police chief, who appeared to defend the migrants, saying they too appeared to be in an “extremely tense situation.” Though he also praised the officers for their bravery “under such exceptional circumstances.”

The deputy head of the Aalen police department, Bernhard Weber, praised the actions of the officers “under such exceptional” circumstances. “I can only show great respect for my colleagues,” who were able to “keep a cool head” in such a situation, he said in a statement, apparently implying that, even though a massive breach of public order would justify the use of force by the police, it was not really necessary.

At the same time, he seemed to seek to downplay the incident. “We believe that those who confronted [the police], were also in an extremely tense situation,” Weber said, adding that the migrants apparently “got carried away” by some sort of a corporate feeling and took the actions “they would have probably never taken following a thorough consideration.”

The police chief admitted, though, that “it is clear that a state governed by the rule of law should not let itself be barred from enforcing this rule of law by an aggressive mob.” The police emphasized that it has launched a probe into the incident over the unlawful release of a detainee and a breach of public order.

Unsurprisingly, the incident prompted an outcry from local politicians who told reporters that the migrants should be held legally accountable for their actions.

The incident, however, provoked concerns among local politicians. “Attacks on police officers are unacceptable,” Uli Sckerl, a member of the regional parliament from the Green Party, told journalists. He also said that such behavior should be followed by legal consequences. “Frustration does not justify crimes,” he added.

The faction leader of the right-wing populist Alternative for Germany party in the regional parliament, Bernd Goedel, condemned the incident by calling it the “state’s failure.” “If the authorities show that they can yield to pressure even once, then one will see the same situations in the future,” he warned. The leader of the regional parliament’s faction of the Free Democrats, Hans-Ulrich Ruelke, also described the incident as an “alarming situation.”

The migrant crisis has grown so acute in Germany that last year Chancellor Angela Merkel was forced to walk back her “open door” policy and announce that Germany would limit the number of refugees it accepts to 200,000 per year (though she also recently said the country would let in an additional 10,000 who had been selected by the UN).

Unfortunately, appalling incidents like the one described above aren’t unique to Germany. Last year, Swedish police told a journalist investigating the rape of a 12-year-old girl that they hadn’t started investigating the case because they “cannot cope” with the sheer volume of cases.

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Authored by Paul Craig Roberts,

It is up to Europe whether or not the Earth dies in nuclear Armageddon.

European governments do not realize their potential to save the world from Washington’s aggression, because the western Europeans are accustomed to being Washington’s vassal states since the end of World War 2, and the eastern and central Europeans have accepted Washington’s vassalage since the collapse of the Soviet Union. Vassalage pays well if all the costs are not counted.

By joining NATO, the eastern and central Europeans permitted Washington to move US military presence to Russia’s borders. This military presence on Russia’s borders gave Washington undue confidence that Russia also could be coerced into a vassal state existence. Despite the dire fate of the two finest armies ever assembled—Napoleon’s Grand Army and that of Germany’s Wehrmacht—Washington hasn’t learned that the two rules of warfare are: (1) Don’t march on Russia. (2) Don’t march on Russia.

Because of Europe’s subservience to Washington, Washington is unlikely to learn this lesson before Washington marches on Russia.

Washington in its hubristic idiocy has already begun this march piecemeal with the coup in Ukraine and with its attacks on Syrian military positions. As I wrote earlier this week, Washington is escalating the crisis in Syria.

What can stop this before it explodes into war is eastern and central Europe’s decision to disengage as enablers of Washington’s aggression.

There are no benefits to Europe of being in NATO. Europeans are not threatened by Russian aggression, but they are threatened by Washington’s aggression against Russia. If the American neoconservatives and their Israeli allies succeed in provoking a war, all of Europe would be destroyed. Forever.

What is wrong with European politicians that they take this risk with the peoples that they govern?

Europe is still a place of beauty constructed by humans over the ages—architecturally, artistically, and intellectually—and the museum should not be destroyed. Once free of Washington’s vassalage, Europe could even be brought back to creative life.

Europe is already suffering economically from Washington’s illegal sanctions against Russia forced upon Europeans by Washington and from the millions of non-European refugees flooding the European countries fleeing from Washington’s illegal wars against Muslim peoples, wars that Americans are forced to fight for the benefit of Israel.

What do Europeans get for the extreme penalties imposed on them as Washington’s vassals? They get nothing but the threat of Armageddon. A small handful of European “leaders” get enormous subsidies from Washington for enabling Washington’s illegal agendas. Just take a look at Tony Blair’s enormous fortune, which is not the normal reward for a British prime minister.

Europeans, including the “leaders,” have much more to gain from being connected to the Russia/China Silk Road project. It is the East that is rising, not the West. The Silk Road would connect Europe to the rising East. Russia has undeveloped territory full of resources—Siberia—that is larger than the United States. On a purchasing power parity basis, China is already the world’s largest economy. Militarily the Russian/Chinese alliance is much more than a match for Washington.

If Europe had any sense, any leadership, it would tell Washington good-bye.

What is the value to Europe of Washington’s hegemony over the world? How do Europeans, as opposed to a handful of politicians receiving bags full of money from Washington, benefit from their vassalage to Washington? Not one benefit can be identified. Washington’s apologists say that Europe is afraid of being dominated by Russia. So why aren’t Europeans afraid of their 73 years of domination by Washington, especially a domination that is leading them into military conflict with Russia?

Unlike Europeans and Russians, Americans have scant experience with wartime casualties. Just one World War 1 battle, the Battle of Verdun, produced more casualties than the battle deaths that US has experienced in all the wars of its existence beginning with the Revolutionary War for independence from Britain.

The World War 1 Battle of Verdun,which took place prior to the US entry into the war, was the longest and most costly battle in human history. An estimate in 2000 found a total of 714,231 casualties, 377,231 French and 337,000 German, for an average of 70,000 casualties a month; other recent estimates increase the number of casualties to 976,000 during the battle, with 1,250,000 suffered at Verdun during the war.

In contrast, US casualties for World War 1 after US entry were 53,402 battle deaths and 200,000 non-mortal woundings.

Here is the list of US battle deaths from the War of Revolution through the “global war on terror” as of August 2017:

• American Revolution: 4,435
• War of 1812: 2,260
• Wars against native Americans (1817-1898): 1,000
• Mexican War: 1,733
• War of Northern Aggression :
• North: 104,414
• South: 74,524
• Spanish-American War: 385
• World War 2: 291,557
• Korean War: 33,739
• Vietnam War: 47,434
• Gulf War: 148

This comes to 561,629 battle deaths

If we add the battle deaths of the global war on terror as of Aug. 2017 – 6,930 – we have 568,559 US battle deaths in all US wars.

That compares to 714,231 casualties, from which I am unable at this time to separate battle deaths from non-mortal wounds and maiming from a single World War 1 battle that did not involve US soldiers.

In other words, except for the Confederate States and native Americans, who endured enormous Union war crimes, the US has no experience of war. So Washington enters war with ease. The next time, however, will be Armageddon, and Washington will no longer exist. And neither will the rest of us.

US deaths in World War 1 were low because the US did not enter the war until the last year. Similarly in World War 2. Japan was defeated by the loss of her navy and air force and by the firebombing of Tokyo and other Japanese cities, which required few US battle deaths. The nuclear attacks on Hiroshima and Nagasaki were gratuitous and took place when Japan was asking to surrender. Approximately 200,000 Japanese civilians died in the nuclear attacks and no Americans except prisoners of war held in those cities. In Europe, as in World War 1, the US did not enter the war against Germany until the last year when the Wehrmacht had already been broken and defeated by the Soviet Red Army. The Normandy invasion faced scant opposition as all German forces were on the Russian front.

If there is a World War 3 the US and all of the Western world would be immediately destroyed as nothing stands between the West and the extraordinary nuclear capability of Russia except the likelihood of complete and total destruction. If China enters on Russia’s side, as is expected, the destruction of the entirety of the Western World will be for all time.

Why does Europe enable this scenario? Is there no humanity, no intelligence left anywhere in Europe? Is Europe nothing but a collection of cattle awaiting slaughter from the machinations of the crazed American neocons? Are there no European political leaders with one ounce of common sense, one ounce of integrity?

If not, doom is upon us as there is no humanity or intelligence in Washington.

Europe must take the lead, especially the central Europeans. These are peoples who were liberated from the Nazis by the Russians and who have in the 21st century experienced far more aggression from Washington’s pursuit of its hegemony they they have experienced from Moscow.

If Europe breaks away from Washington’s control, there is hope for life. If not, we are as good as dead.

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Tensions continue to flare up in the South China Sea, as Beijing has reportedly installed anti-ship cruise missiles and surface-to-air missile systems on three outposts in the region, as reported by CNBC on Wednesday, which cited sources with direct knowledge of U.S. intelligence reports. The missiles have reportedly been installed on Fiery Cross Reef, Subi Reef and Mischief Reef.

The land-based anti-ship cruise missiles, designated as YJ-12B, allow China to strike surface vessels within 295 nautical miles of the reefs. Meanwhile, the long-range surface-to-air missiles designated as HQ-9B, have an expected range of targeting aircraft, drones and cruise missiles within 160 nautical miles. –CNBC

As we’ve documented again and again (and again and again), China’s military buildup in the Pacific, particularly surrounding the Spratly Islands, a collection of small islands, cays and atolls in the South China Sea, is one of the greatest long-term risks to peace and stability in the US and many of China’s neighbors, who have territorial claims in the region that may conflict with China’s.

If confirmed, the installations would mark the first Chinese missile deployments in the Spratly Islands – a territory with claims by several Asian countries, including Taiwan and Vietnam. Chinese foreign ministry spokeswoman Hya Chunying says that the missiles are required to protect China’s sovereignty.

China’s missile placement comes on the heels of an april deployment of radar jammers on the Spratly islands, capable of scrambling military communications and radar systems used by US ships – a clear rebuke to the US and China’s neighbors.

A US official confirmed to WSJ in April that “China has deployed military jamming equipment to its Spratly Island outposts.” Furthermore, the equipment was likely installed during the last 90 days.

The U.S. assessment is supported by a photo taken last month by the commercial satellite company DigitalGlobe and provided to The Wall Street Journal. It shows a suspected jammer system with its antenna extended on Mischief Reef, one of seven Spratly outcrops where China has built fortified artificial islands since 2014, moving sand onto rocks and reefs and paving them over with concrete.

China’s Defense Ministry didn’t respond to a request for comment. –WSJ

The move allows China to further project its rapidly growing military influence in the region – most recently approaching the government of Vanuatu to build a permanent military base on the South Pacific Island nation.

“Those who do not intend to be aggressive have no need to be worried or scared,” ministry spokeswoman Hua Chunying told reporters in Beijing.

China’s Defense Ministry did not immediately respond to a request for comment on the latest report.

The foreign ministry said China has irrefutable sovereignty over the Spratly Islands and that its necessary defensive deployments were for national security needs and not aimed at any country. –Reuters

Mawanwhile, Taiwan called the new missile installations “irresponsible,” presidential office spokesman Alex Huang said on Thursday. Taiwan “will not bow down to pressure from Beijing” Foreign Minister Joseph Wu said, but “will work with friendly nations to uphold regional peace and stability and ensure our rightful place in the international community.”

In response to China’s increased provocations in the region, Tsai Shih-Ying of Taiwan’s ruling Democratic Progressive Party, asking the National Defence Minister Yen Teh-fa for details surrounding Taiwan’s military program to procure a new modern main battle tank.

Yen told Tsai that Taiwan’s military would soon make a bid to purchase M1A2 tanks, an American third-generation main battle tank — the most modern armored tank in the world, from the Pentagon in the second half of 2018.

Yen also stated that the American tanks could help transfer technology to the island’s defense industry, Taiwan’s Central News Agency reported, as quoted by South China Morning Post.

“The Taiwan Strait is very likely to replace the Korean peninsula as the hottest flashpoint in the region,” he warned.

“In response to the changing situation, Taiwan’s military has also increased its combat readiness.”

“In one or two months, China will hold more long-range military training and increase combined forces operations when engaged in such activities in waters near Taiwan,” Yen said when responding to another lawmaker Chiang Chi-chen about Beijing’s increased military exercises in the Taiwan Strait and the East China Sea.

Greg Poling, a South China Sea expert at Washington’s Center for Strategic and International Studies think-tank, said deploying missiles on the outposts would be important.

“These would be the first missiles in the Spratlys, either surface to air, or anti-ship,” he said.

He added that such deployments were expected as China built missile shelters on the reefs last year and already deployed such missile systems on Woody Island further to the north.

Poling said it would be a major step on China’s road to dominating the South China Sea, a key global trade route. –Reuters

“Before this, if you were one of the other claimants … you knew that China was monitoring your every move. Now you will know that you’re operating inside Chinese missile range. That’s a pretty strong, if implicit, threat,” said Poling.

China’s increased presence in the South China Sea is “a substantial challenge to US military operations in the region,” says US Navy Adm. Philip Davidson, the expected nominee to replace US Pacific Command Chief Adm. Harry Harris. 

In written testimony to the Senate Armed Services Committee, he writes that the development of China’s various forward operating bases in controversial waters appear to be complete. 

“The only thing lacking are the deployed forces. Once occupied, China will be able to extend its influence thousands of miles to the south and project power deep into Oceania,” Davidson wrote. “In short, China is now capable of controlling the South China Sea in all scenarios short of war with the United States.“

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