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China Accused Of Using High-Powered Lasers To Harass US Fighter Jets Over Djibouti

Less than a year after China deployed troops to its first overseas base in Djibouti, near the Horn of Africa, located next to the key oil transit chokepoint, the Bab el-Mandeb strait, the US military has warned fighter jet pilots to beware of laser attacks near China’s military base amid what the SCMP said were “increasing signs of friction between the two armed forces in the Horn of Africa.”

According to the WSJ, the Pentagon issued a Notice to Airmen, later reproduced on the US Federal Aviation Administration’s website, that there had been multiple events “involving a high-power laser” just 750 metres (2,400ft) from China’s base in Djibouti.

“Use extreme caution when transiting near this area,” the notice cautioned.

Quoted by the WSJ, Maj. Sheryll Klinkel, a Pentagon spokeswoman, said “the U.S. has notified airmen to exercise caution when flying in certain areas in Djibouti” adding “this notice was issued due to lasers being directed at U.S. aircraft on a small number of separate occasions over the last few weeks.”

“Lasers pointed at aircraft have the potential to cause serious harm to the aircrew and the surrounding area,” she said.

According to a report in Jane’s Defence Weekly last month, multiple intelligence sources reported the Chinese garrison in Djibouti is suspected of operating a high-power laser weapon to temporarily blind pilots at the base or on a ship offshore.

However, according to SCMP, Chinese military observers said the lasers might have been used to scare off birds near the airfield or disrupt possible spy drones, rather than targeting foreign US pilots.  They also pointed out that China is a signatory to the Protocol on Blinding Laser Weapons, which bans the use of lasers that cause permanent blindness.

Which, of course, would never stop China from attempting precisely that.

“The Chinese and US bases in Djibouti are really close, so one could disturb the other if the two sides don’t have a proper communication mechanism,” said Zhou Chenming, a Beijing-based military analyst was quoted by the Hong Kong publication. Zhou noted that China has already publicly demonstrated its use of laser weapons against drones at air exhibitions.

Some experts said the use of the laser amounted to the kind of aggression the Chinese have displayed on other occasions.

In 2014 over the South China Sea, a Chinese jet fighter pilot, conducted so-called barrel rolls around an American P-8 surveillance jet. That incident led the U.S. to lodge a formal diplomatic complaint with Chinese officials and the pilot was ultimately removed from the unit, according to American officials at the time. China’s Defense Ministry publicly dismissed the U.S. complaint as groundless at the time.

* * *

As we reported last year, the Chinese military base in Djibouti is just a few miles northwest of Camp Lemonnier, the only permanent US military base in Africa and home to 4,000 US military personnel.

Camp Lemonnier was established after the 9/11 attacks, and is mainly used as a counterterrorism hub in the region. A 2013 Washington Post report said the Djibouti government had forced it to stop drone flights – which numbered up to 16 a day – from the base due to safety fears and relocate its unmanned spy aircraft to a more remote location.

With the US increasingly viewing China as a strategic superpower  rival, the peculiar proximity of the two bases in Djibouti means the two sides will be involved in a “quiet contest” to gather information about each other, according to Ni Lexiong, a Shanghai-based military expert, although neither side “would announce this openly”.

Work began on the 36-hectare Chinese base in 2016, which was to be used a logistics hub to resupply vessels taking part in peacekeeping and humanitarian missions off the coasts of Yemen and Somalia. Weeks after the base opened at the start of August 1 the troops based there started live-fire drills.

Djibouti sits in a vital strategic location, right off the Bab el-Mandeb and close to the Suez Canal, one of the world’s busiest shipping routes, and offers troops stationed there easy access to trouble spots such as Sudan, Somalia and Yemen and could provide a base for aerial missions over Iraq and Syria.

The government has been happy to provide facilities for other countries’ armed forces, and France, Spain and Japan all have opened facilities there.

In 2016 Japan announced that it would increase the size of its base following the announcement that Chinese was planning to open its own facility there.

That year a Japanese warship was reported by Chinese state media to have dispatched frogmen to collect information on Chinese vessels that had docked nearby before they were driven away by “strong lights” and verbal warnings. The Japanese side denied the claims, saying the divers were checking their own ships.

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Hey Trump! The 1930s Called, They Want Their Trade Policy Back.

Unless you’re an economist, you’ve probably only heard about the Smoot-Hawley Tariff Act because of Ferris Buehler’s Day Off.

The 1930 law was intended to raise revenue for Depression-era government spending programs and protect American jobs. And, as Ben Stein could tell you, it didn’t work. Congress might have known as much if it had listened to a group of more than 1,000 economists who signed a letter to the nation’s lawmakers that year, warning that “a tariff war does not furnish good soil for the growth of world peace.” After America raised tariffs on a wide range of goods, other nations followed suit.

“The only debate today is how much that contributed to and worsened the Great Depression. There’s nobody running around saying, ‘Oh, that was a great idea, let’s do that again,” Bryan Riley, director of the National Taxpayers Union‘s Free Trade Initiative, told Reason.

It’s been nearly 88 years since the passage of Smoot-Hawley, but on Thursday another letter signed by more than 1,000 economists was delivered to the White House and Congress, again urging American policymakers to reject calls for protectionism. The economists who signed the new letter—including Nobel Prize laureates and advisors to four different presidential administrations—argue that the United States appears to be repeating the mistakes of the past. Much has changed since 1930, of course, but undercutting global trade could have even more significant consequences now, they warn.

In particular, they single out the Trump administration’s “misguided calls for new tariffs in response to trade imbalances.”

As I noted on Monday, this is a crucial fallacy of Trump’s view of trade—one that is rooted in the notion of trade as a win-or-loss prospect rather than an activity that can benefit all parties.

The warning comes at a critical moment. On Wednesday, Bloomberg reported that China has stopped buying American-grown soybeans. That’s an apparent escalation of the trade tiff between the world’s largest soybean consuming nation and the world’s largest grower, respectively. Meanwhile, the European Union has threatened to slap new tariffs on a number of American products—from agricultural goods like soy and nuts to cultural items like bourbon, motocycles, and blue jeans—unless the Trump administration backs down from plans to impose tariffs on steel and aluminum. American consumers, farmers, and businesses figure to be caught in the middle if a trade war were to erupt.

The government should “consider the bitterness which a policy of higher tariffs would inevitably inject into our international relations,” the economists wrote in 1930.

“The same principles that were true in 1930 are true today,” says Riley.

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Rudy Giuliani’s Latest Fox Debacle Shows Not Even Trump’s Closest Advisors Can Keep the President’s Stormy Daniels Story Straight: Reason Roundup

With friends like Rudy Giuliani… Newly-tapped Trump legal adviser Rudy Giuliani didn’t do the president any favors on Fox News yesterday. Talking about lawyer Michael Cohen’s $130,000 payment to porn star Stormy Daniels—one which Cohen has said he made on his own accord and Trump has said he knows nothing about—Giuliani claimed that Trump had indeed repaid the money to Cohen after all.

“The president repaid it,” Giuliani told Fox host Sean Hannity, seeming to believe that Trump paying back the money out of his own pocket made any campaign finance violation concerns moot. But this is likely wrong.

“How the payment was made doesn’t affect the legality,” writes Phillip Bump at The Washington Post. “There was still almost certainly a campaign finance violation.”

Giuliani also didn’t seem to think his statements implicate Trump in a Daniels “hush money” payoff, explaining that Trump only knew “the general arrangement, that Michael would take care of things like this.” Giuliani likened the Cohen-Trump-Daniels payments to the way “I take care of things like this with my clients. I don’t burden them with every single thing that comes along,” he said.

Lastly, the former New York City mayor told Hannity that Trump fired James Comey over the former FBI director’s refusal to say the president wasn’t under investigation—which runs counter to the official reason given by the Trump administration.

“I am stunned and speechless,” Daniels’ lawyer Michael Avenatti said on The Late Show with Stephen Colbert last night. “If this is accurate, the American people have been lied to and deceived for months. And justice must be served.”

FREE MINDS

“I realized I have that part of me locked up in jail.” A new clinical study of U.S. military veterans and first responders with post-traumatic stress disorder (PTSD) found that a combination of MDMA—the active ingredient in the party drug Ecstacy—plus psychotherapy was “effective and well tolerated,” especially at higher dosing levels.

“Encouraging results from previous therapeutic trials of MDMA (3,4-methylenedioxymethamphetamine) led to the new study,” notes Boing Boing‘s Xeni Jardin. While this study was a small trial (just 26 patients), it builds on previous promising studies showing therapeutic benefits for MDMA.

Conducted by scientists with the Multidisciplinary Association for Psychedelic Studies (MAPS), the research was published Tuesday in The Lancet Psychiatry and marks the end of MAPS’ Phase 2 trials on MDMA-assisted psychotherapy. A much larger Phase 3 trial—the final step before FDA approval—is slated to start soon.

One participant in the MAPS study “was a Marine Corps veteran who served two tours in Iraq,” reports Military.com.

He received treatment for PTSD at the Department of Veterans Affairs but continued to have severe symptoms, including fits of “uncontrollable rage,” during which he would yell at his wife and punch holes in the wall, according to the study.

During the psychotherapy, the veteran thought of the part of himself that’s full of rage. “I realized I have that part of me locked up in jail,” he is quoted as saying in the study. “I went and opened the door and hugged him, and his evil eyes faded away.”

After his first session, his wife confirmed the veteran’s rage attacks stopped. Other symptoms improved over the following weeks, according to the study.

These results are further evidence that MDMA, used just two times at monthly intervals, can make psychotherapy much more effective and better tolerated,” [lead investigator Michael] Mithoefer said.

In 2017, the FDA designated MDMA a “breakthrough therapy” for PTSD, which could help speed up MDMA’s approval as a prescription psychiatric medication.

FREE MARKETS

Marijuana testing for job applicants waning. Companies across a range of sectors and job types are “quietly taking what once would have been a radical step: They’re dropping marijuana from the drug tests” required by job applicants, AP reports. Testing for marijuana has been “a fixture at large American employers for at least 30 years,” it notes.

While testing for marijuana has been an annoyance for a lot of job seekers and outrageous on principle to some—there’s no reason why people who smoke or consume pot in their own time can’t be perfectly competent employees—the practice had become so well ingrained in the status quo that it barely yielded much protest in recent decades. The loudest complaints may have come from within big companies, where managers found too many potential employees of all sorts were shying away from applying or being excluded from jobs because of marijuana tests.

There’s evidence “the Trump administration also may be softening its resistance to legal marijuana,” AP points out. At a congressional hearing in April, Labor Secretary Alexander Acosta floated a “step back” on employer marijuana testing. With “all these Americans that are looking to work,” asked Acosta, “are we aligning our … drug testing policies with what’s right for the workforce?”

QUICK HITS

  • The American economy added 204,000 jobs in April, according to the latest national report.
  • Since sex robots are back in the news, now as a possible deterrent to mass murder (I don’t know), it seems like a good time to re-up this Reason story on the social and moral implications of sexbots and social robots more generally.
  • Budweiser is releasing a “Freedom Reserve Red Lager” that is supposedly “inspired by George Washington’s hand-penned recipe from his personal military journal dating back to 1757.”
  • From “never underestimate a commie, even a baby one” to sympathy for the spies in The Americans and Homeland: the evolution of Russian villains on U.S. television sets.
  • Summer Zervos, a former Apprentice contestant who has since accused Donald Trump of sexual assault, is seeking receipts. Her lawyers have subpoenaed archival footage from the show “that include any mention or discussion by Donald J. Trump of Summer Zervos” and “all video and audio recordings that include Donald J. Trump talking or commenting on female candidates or female potential candidates of any season of ‘The Apprentice’ in any sexual or inappropriate manner.”
  • A new paper finds that “although police now typically describe young sex workers not as juvenile delinquents but as victims of sex trafficking, a major tool in their work remains arrest and detention.”
  • Going to the sauna is good for your blood pressure.
  • Palestinian poet Dareen Tatour has been convicted of incitement and supporting a terrorist organization for publishing her poetry to social media.
  • Florida homeowners are fighting to keep a “Starry Night”–themed paint job on their home. The city has ordered them to repaint and is finding per day that they don’t. “How would you like to pay for your First Amendment? $100 a day,” said owner Ludomir Jastrzebski, who was born in Poland. “I came to this country and I appreciate the value of my constitutional rights.”

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S&P, Dow Test Critical Support; Goldman Dumps To 7-Month Lows

Well, this is not what the asset-gatherers and commission-rakers said would happen…

The Dow hit its 200DMA…

 

The S&P is testing its 200DMA…

 

And Small Caps broke their 50- and 100-DMAs…

 

And Goldman Sachs is not helping..

 

 

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Tesla Bond, Stock Extend Losses: Has Musk Stopped Paying The Bills?

We know we shouldn’t ask – because it’s “not cool” – but is this chart yet another reason why Tesla’s bonds are tumbling (and stock is back below $300)…

Did Elon Musk stop paying his bills?

That would certainly make the already ugly cash burn look a little better in the short term?

As Bloomberg notes, Tesla is going through money so fast that, without additional financing, there is now a genuine risk that the 15-year-old company could run out of cash in 2018. The company burns through more than $6,500 every minute.

And for now Tesla stocks and bonds are tumbling…

Stocks started their descent when Musk dismissed an analyst question…

And bonds are reeling…

As it’s becoming clear Musk is running out of cash… and has a lot of debt already…

As Bloomberg notes, there’s a good reason to worry: No one has raised or spent money the way Elon Musk has. Nor has any other chief executive officer of a public company made a bankruptcy joke on Twitter at a time when so much seemed to be unraveling.

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Everyone Is On The Same Side Of The Boat

Authored by Lance Roberts via RealInvestmentAdvice.com,

In early 2018, I penned a post which illustrated the legendary Bob Farrell’s 10-investment rules. Bob, one of the great investors of our time, had a very pragmatic approach to managing money. Investing rules, and a subsequent discipline, should be a staple for any investor who has put their hard earned “savings” at risk in the market. Unfortunately, far too many invest without either which leads to less than desirable outcomes.

As of late, there has been a lot of excitement over two areas of the market in particular: interest rates and oil prices. In fact, at this moment the speculation in these two areas is at record levels.

Why is that important?

First, the speculation that oil and interest rates will go higher are the two areas which have the greatest negative impact on economic growth and earnings. Rising interest rates increase borrowing costs and higher oil prices increase input costs for manufacturers. As I noted previously, with a heavily indebted consumer, there is little ability to pass on higher costs which, if absorbed, reduces profits.

Secondly, the speculation brings forward two of Mr. Farrell’s most important rules:

  • Rule #2: Excess in one direction will lead to an opposite excess in the other direction, and;

  • Rule #9: When all the experts and forecasts agree – something else is going to happen.

Currently, when it comes to oil prices, there is little room left for more bullishness. As oil prices have risen due to concerns over the potential supply concerns from geopolitical tensions, the price of oil is now as overbought and extended as at every other prior peak.

Of course, the cycle of rising oil prices leading to increased optimism which begets bullish bets on oil continues to press prices higher. However, it is also the exuberance which has repeatedly set up the next fall. As shown below, bets on crude oil prices are sitting near the highest levels on record and substantially higher than what was seen at the peak of oil prices prior to 2008 and 2014.

Importantly, while bullish bets on oil are at extremes, there is also a high correlation between the direction of oil and the S&P 500. (Importantly, rising oil prices have been a major contributing factor to the rise in earnings for the S&P 500. A reversal in prices will be problematic as well.)

As JPM recently noted, via Zerohedge,

“The sharp increase in oil prices over the past month has been accompanied by a further rise in spec positions, which as JPMorgan notes, has now risen to new record highs. This suggests that hedge funds and other speculative investors have been at least partly behind the recent sharp spike in oil prices.

As JPM further notes, both Systematic and Discretionary hedge funds have been building up long positions in oil, with the former induced entirely by momentum and positive carry, while the latter have rushed in due to geopolitical issues, continued inventory declines in the US and expectations of Saudi Arabia engineering a higher oil price ahead of privatizations next year.

Bloomberg confirms the recent surge in commodity fund inflows, noting that hedge funds investing in oil are luring capital at the fastest pace in more than a year. After years of pain, commodity funds have recovered the client outflows they suffered last year. According to eVestment data, investors allocated $3 billion to commodity-focused hedge funds from January through March, the most since the third quarter of 2016. 

But it is not only speculative investors such as hedge funds, systematic or discretionary, responsible for the rise in oil prices, it is also real money investors such as retail investors and asset allocators that have been buying oil indirectly via purchases of commodity tracking funds as they seek to increase their overall allocation to commodities.”

The last paragraph is problematic as retail investors are always “late to the party.” From a contrarian standpoint, this alone should be worrisome. However, with speculators pushing prices higher, the economics of the cycle are very mature. Higher prices has led to a surge in production to an all-time record. However, demand, which has started to deteriorate over the last 12-months, remains stagnant and more representative of the economic demand-driven side of the equation.

With oil, a direct cost to consumers, the surge in prices acts as an additional tax on consumers which detracts from other economically sensitive discretionary purchases. With production at records, along with net speculative long-positioning by investors, the risk of a reversion caused by an economic slowdown or recession is problematic.

This is where the second “overly crowded trade” comes into play. 

The rise in commodity prices, combined with the Fed’s instance on hiking interest rates, has led to a belief that demand-driven inflation is finally set to return to the U.S. This has led speculators to build the largest net-short positioning in U.S. Treasuries on record.

Once again, we see Bob Farrell’s rule in action. Previously, such record net-short positioning has been more indicative of peaks in the interest rate cycle as opposed to the beginning of higher rates. You can see this more clearly if we strip out all of the positionings except those periods where net-short contracts exceeded 100,000.

With the net-short positioning on the U.S. Treasury at records, the net-short positioning on the Eurodollar has also reached a record. Once again, what we find is when the net-short positioning starts to get overcrowded, that too has been a good indication of a bottom in bond prices (or a peak in rates.)

The problem is the tentative rise in inflation is driven by higher costs being pushed onto consumers. This is the wrong type of inflationary rise which negatively impacts economic growth. As opposed to rising prices driven by rising demand, cost-push inflation simply eats away at discretionary incomes reducing consumptive spending which is 70% of economic growth.

With positioning on the U.S. Dollar net-short, along with interest rates and the Eurodollar, there is plenty to suggest that traders, and investors, have all rushed to the same side of the boat.

As our analyst Jesse Colombo explained last week:

“If another wave of dollar strength occurs, it would be very bad news for crude oil and the overall energy sector (crude oil and the dollar trade inversely). The U.S. dollar’s surge in 2014 and 2015 was the trigger for the violent crude oil bust. Even more concerning is the fact that the ‘smart money’ are more bearish on crude oil now than they were immediately before the 2014 oil bust, as I discussed in greater detail last week. While oil’s short-term trend is still up for now, and I believe in respecting the trend, there is a very real risk that another violent liquidation sell-off may occur when the trend changes.”

Like all rules on Wall Street, Bob Farrell’s rules are not meant has hard and fast rules. There are always exceptions to every rule and while history never repeats exactly it does often “rhyme” very closely.

Nevertheless, one thing is true, in the short-term it may well seem that everyone is correct in their thesis of higher rates, inflation and oil prices. However, history has a pretty clear record to suggest that when “everyone in on the same side of the boat” it has generally often paid to put on a “life vest.”

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The Iran Deal Is Still a Good Bargain: New at Reason

President Donald Trump says the Iran nuclear deal must be revised or he’ll withdraw. But as Steve Chapman observes, why would Iran agree to changes without new concessions on our part? And why would Iran see any point in amending an agreement with a government that feels free to renege on its established commitments?

Some restrictions on Iran’s activities expire after 10 or 15 years. But if the administration would like to see those limits extended, the best hope is to abide by our obligations. Over time, Iran might grow more confident that it doesn’t need nuclear weapons and agree to longer terms.

View this article.

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US Trade Deficit Plunges Most Since The Financial Crisis

What a difference a month makes: just 30 days after the US posted the biggest trade deficit since the financial crisis, when the US trade balance was some $57.6BN against the US, moments ago the BEA reported that the US trade deficit plunged by a whopping $8.7 billion, dropping to $49BN, better than then $50BN expected, and the biggest monthly drop (in dollar terms) since the financial crisis.

According to the census bureau, the deficit decreased from a revised $57.7 billion in February to $49.0 billion in March, amid a perfect trade environment as exports rose and imports declined, or as Trump would say, “his policies to boost US trade worked.”

Broken down by category, the goods deficit decreased $7.5 billion in March to $69.5 billion. The services surplus increased $1.3 billion in March to $20.5 billion.

The good news: exports of goods and services increased $4.2 billion, or 2.0%, in March to $208.5 billion. Exports of goods increased $3.7 billion and exports of services increased $0.4 billion.

  • The increase in exports of goods mostly reflected increases in capital goods($1.9 billion), in foods, feeds, and beverages ($1.0 billion), and in industrial supplies and materials ($0.9 billion).
  • The increase in exports of services mostly reflected increases in maintenance and repair services ($0.1 billion), in travel (for all purposes including education) ($0.1 billion), and in transport ($0.1 billion).

Also good news, if only for GDP bean-counters: imports declined, decreasing by  $4.6 billion, or 1.8%, in March to $257.5 billion. Imports of goods decreased $3.7 billion and imports of services decreased $0.9 billion.

  • The decrease in imports of goods mostly reflected decreases in capital goods ($1.5 billion), in consumer goods ($0.9 billion), and in industrial supplies and materials ($0.7 billion).
  • The decrease in imports of services mostly reflected decreasesin charges for the use of intellectual property ($0.9 billion) and in transport ($0.1 billion). Charges for the use of intellectual property for February included payments for the rights to broadcast the 2018 Winter Olympic Games.

Broken down by trading partner, the March figures showed surpluses with Hong Kong ($3.3BN), South and Central America ($3.1), United Kingdom ($1.2), Brazil ($0.8), and Singapore ($0.3).

Meanwhile, the countries that should be worried that they may fall in Trump’s trade war sights, and recorded deficit with the US in March, included China, of course, with a $35.4 billion deficit, but also the European Union ($12.4), Mexico ($7.0), Japan ($5.9), Germany ($5.0), Italy ($2.3), France ($1.5), OPEC ($1.4), India ($1.4), Taiwan ($1.3), South Korea ($1.2), Saudi Arabia ($0.3), and Canada ($0.2).

* * *

Finally, in case Trump needs some cheering today now that Stormy Daniels is back on the front pages, show him this chart of the US deficit excluding petroleum products: after hitting a record last month, it has rebounded dramatically in March, suggesting that whatever Trump is doing to boost overall trade (we already know US petroleum exports are soaring), may be working. Expect even more upward revisions to Q1 GDP, which however may lead to cuts for Q2 GDP as net exports were likely front-loaded.

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US Worker Productivity Disappoints, Unit Labor Costs Revised Lower

While both US Productivity and Unit Labor Costs picked up from Q4’s data, both key economic data points disappointed expectations with productivity up 0.7% (+0.9% exp) and labor costs up 2.7% (+3.0% exp).

Notably the +2.5% Q4 unit labor cost rise was revised notably lower to +2.1% QoQ.

Non-Durable Manufacturing Worker Productivity declined YoY for the 3rd quarter in a row…

Headline real compensation dropped 0.1% QoQ – the second QoQ decline in a row.

Under the hood we note that real compensation for the manufacturing sector dropped 0.1% YoY and real compensation for non-durables dropped 1.5% YoY.

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Trump Defends “Hush” Payment After Giuliani Revelation, Stormy Daniels’ Lawyer “Speechless”

Late last night, Rudy Giuliani shocked viewerswhen he revealed during an interview with Sean Hannity that President Trump had, in fact, reimbursed his personal attorney Michael Cohen for a $130,000 “hush money” payment to porn star Stormy Daniels, saying the president “didn’t know about the specifics” but that he was aware “of the general arrangement.”

For a moment, the entire Washington political establishment held its breath. After all, it sounded as if Giuliani had just contradicted a statement that Cohen had made both during an interview with the New York Times and during court testimony – and could leave him exposed to a perjury charge. After flying into damage control mode, Giuliani later suggested that while Trump had repaid the $130,000, Cohen had made the payment to Daniels without Trump’s knowledge at the time.

The statement could also rebound on the president: Trump himself had also repeatedly denied having any knowledge of it, meaning that, in addition to possibly putting Cohen in legal jeopardy, Giuliani – Trump’s brand new lawyer – had seemingly risked ensnaring his boss in the controversy as well.

So this morning, President Trump himself weighed in to clarify Giuliani’s statement, providing some of his most detailed comments yet about the lawsuit brought against him and Cohen by Daniels.

As Trump explained in a series of tweets, Cohen was paid through a private retainer agreement, and the money to pay Daniels was presumably taken from these payments, not from payments made by Trump’s campaign.

“Mr. Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA. These agreements are very common among celebrities and people of wealth,” Trump tweeted.

Trump added that these types of agreements are “very common” among rich people and that Daniels’ violation of the NDA was clear-cut and that she would eventually be forced to pay up in arbitration.

“In this case it is in full force and effect and will be used in Arbitration for damages against Ms. Clifford (Daniels). The agreement was used to stop the false and extortionist accusations made by her about an affair, despite already having signed a detailed letter admitting that there was no affair. Prior to its violation by Ms. Clifford and her attorney, this was a private agreement. Money from the campaign, or campaign contributions, played no roll in this transaction.”

Finally, Trump again insists that money from the campaign “had nothing to do” with Daniels or the payment made to her – and he also reminded the world that Daniels had previously signed a detailed letter denying the affair.

As Bloomberg White House reporter Jennifer Jacobs pointed out, Trump is making the argument that Giuliani had been trying to make last night.

That said, Jacobs also made the point that Trump’s story now also appears to have changed, even if he still denies having had an affair: “President Donald Trump changed his story regarding $130,000 in hush money paid to adult film actress Stormy Daniels during the 2016 campaign, saying Thursday he reimbursed lawyer Michael Cohen and denying the arrangement was improper.”

Giuliani’s statement indicates that Trump was aware of the payment and reimbursed Cohen for it. It is unclear when or how the reimbursement took place. The White House did not immediately respond to a request for comment.

“When I heard Cohen’s retainer of $35,000, when he was doing no work for the president, I said ‘That’s how he’s repaying, with a little profit and a little margin for paying taxes for Michael,’’’ Giuliani said.

Asked last month whether he knew about the payment to Daniels, Trump said “No.’’

Asked if he knew where Cohen got the money for the payment, the president said he didn’t.

“No, I don’t know,’’ Trump told reporters.

Daniels is suing Trump and Cohen to void her NDA and has also offered to return the money that Cohen paid her. And just days ago, she slapped Trump with a lawsuit – this time filed in a New York court – claiming that he had defamed her in a series of tweets mocking a sketch of the man she said had threatened her about the purported affair. One wonders if this morning’s tweetstorm will elicit another lawsuit from Daniels?

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