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One day after a global “trade optimism”-inspired rally fizzled at the closing minute of US cash trading, European and Asian shares eased back from eight-month highs while bonds, the dollar and gold rallied as investors took money off the table amid, what else, “fresh concerns” about U.S.-China trade talks while dismal data from Germany signaled trouble for Europe as investors awaited further news from U.S.-China trade negotiations and tomorrow’s US jobs report.

US index futures were flat, while Asian markets and Europe’s Stoxx 600 index fell, led by declines in oil companies and miners.

The biggest economic news of the day was Germany’s latest industrial orders which tumbled at the fastest rate in over five years in February, driven largely by a collapse in foreign demand.

The report compounded fears that Europe’s largest economy, which yesterday slashed its GDP forecast by more than half from 1.9% to 0.8%, has had a feeble start to the year and left the euro stuck at $1.12, sent German Bund yields back below zero in the bond market and ended a four-day run of gains for share traders. Eslewhere, Italian shares and bonds also dropped after Bloomberg reported the country is set to slash this year’s growth forecast and raise the projected budget deficit.

In key company-related news, in the preliminary Ethiopian crash report of the Boeing 737 MAX, anti-stall software is not explicitly mentioned; Chief investigator says they cannot yet say if there is a structural problem with Max 8’s. Meanwhile, Tesla is tumbling after the company’s Q1 vehicle deliveries tumbled and missed badly, with just 63.0k deliveries vs. 90.7k previously.

Earlier in the session, the MSCI Asia index also lost 0.4% overnight after five straight days of gains had taken it to the highest level since late August. Losses were led by Australia and New Zealand while Hong Kong, the Philippines and Indian markets were also in red. The trend was bucked by Shanghai as Chinese shares rose 0.6% while Japan’s Nikkei paused near a recent one-month top.

Emerging-market stocks and currencies also lost momentum on Thursday after recent gains as investors awaited fresh good (or perhaps bad) data for signs the global economy is regaining a firmer footing (or else that central banks will ease more). The MSCI index of developing-market equities fell for a first day in six: the Indian rupee led declines among currencies following a rate cut and dovish outlook from the nation’s central bank. South Africa’s rand weakened after failing to strengthen beyond a key technical level, while the Indonesian rupiah rose after its monetary authority said it would allow further appreciation.

Analysts pointed to investor fatigue and a lack of fresh headlines on the Sino-U.S. trade talks for Thursday’s sell-off while disappointing U.S. economic data this week also weighed on sentiment. “We are expecting quite a constructive agreement between the U.S. and China when it comes to trade,” said AllianceBernstein China Portfolio Manager John Lin. He added it was probably now a consensus view among major investors and if it proved right, would raise other questions such as whether China’s government would “keep its foot on the (stimulus) pedal or ease off a bit.”

Risk sentiment has been supported by constant signs of progress in Sino-U.S. trade talks. White House economic adviser Larry Kudlow said on Wednesday the two sides aimed to bridge differences during talks, while Bloomberg reported that the US would grant China until 2025 to meet trade pledges.  The plan would see China committing to buy more U.S. commodities, including soybeans and energy products, and allow full foreign ownership for U.S. companies operating in China as a binding pledge.  Investors are also looking if ongoing talks lead to an earlier-than-anticipated meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping to sign an accord.

At 2pm all eyes will be on the White House, where President Trump will meet Chinese Vice Premier Liu He as trade deal negotiations enter what could be the final stages.

While investors have become more optimistic that a trade deal will be signed, Bloomberg quotes Nick Twidale, chief operating officer at Rakuten Securities Australia, who said it “may just be another step in the process.” The implementation of any deal “will most probably provide obstacles in the process and may weigh on sentiment further down the track.”

“Also an important question would be whether an agreement would be sufficient to revive business sentiment and the global trade cycle,” J.P. Morgan Asset Management Asia Pacific Chief Market Strategist Tai Hui added. “We believe on the margin it would help, but practically all investors we’ve spoken to in Asia in the past six months believe friction will still flare up from time to time.

In FX, overnight moves were muted after bigger swings overnight when all major currencies gained against the safe-haven yen. The dollar gained broadly with Treasuries while Sterling dipped after U.K. lawmakers moved to block a no-deal Brexit; the euro largely shrugged off soft German data, and was waiting for the minutes of the European Central Bank’s last meeting, when it pushed back rate hike expectations. Euro-area bonds edged higher, and the yen and equities traded with a defensive tone

In commodities, oil prices slipped a second day, with Brent edging down further from the $70 mark after weekly U.S. oil data showed a surprise build up in crude inventories and record production; Global benchmark Brent has gained nearly 30 percent this year, while WTI has gained nearly 40 percent. Prices have been underpinned by tightening global supplies and signs of demand picking up. “There is a clear bias to the upside with the supply restrictions,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney, pointing to supply cuts by OPEC and others, along with sanctions on Iran.

Spot gold traded lacklustre as markets were tentative ahead of the ECB minutes, US-China trade talks and payrolls, with investors pulling money out of gold ETFs with around $153MM removed out of the $10BN VanEck Vectors Gold Miners ETF over the last five days. Meanwhile, copper (-0.3%) succumbs to the cautious risk tone but remains above its 100 WMA of just under $2.90/lb. Finally, Dalian iron ore futures saw its best day in seven-weeks, extending its record-breaking rally, as supply-side woes (largely from cyclones in Western Australia) and a pick-up in demand (steel mills replenishing stocks) boosted the base metal to a new peak of USD 103.49/tonne.

On today’s docket, initial jobless claims are due, while companies reporting earnings include Constellation Brands and RPM International.

Market Snapshot

• S&P 500 futures down 0.1% to 2,876.25
• STOXX Europe 600 down 0.4% to 387.49
• MXAP down 0.2% to 162.37
• MXAPJ down 0.4% to 538.98
• Nikkei up 0.05% to 21,724.95
• Topix down 0.1% to 1,620.05
• Hang Seng Index down 0.2% to 29,936.32
• Shanghai Composite up 0.9% to 3,246.57
• Sensex down 0.3% to 38,761.75
• Australia S&P/ASX 200 down 0.8% to 6,232.80
• Kospi up 0.2% to 2,206.53
• German 10Y yield fell 0.9 bps to -0.001%
• Euro up 0.04% to $1.1237
• Brent Futures down 0.6% to $68.88/bbl
• Italian 10Y yield rose 1.5 bps to 2.186%
• Spanish 10Y yield fell 0.7 bps to 1.134%
• Brent Futures down 0.4% to $69.05/bbl
• Gold spot up 0.1% to $1,291.33
• U.S. Dollar Index unchanged at 97.10

Top Overnight News from Bloomberg

• U.S. President Donald Trump will meet Chinese Vice Premier Liu He at the White House on Thursday as speculation grows that negotiations over a trade deal are entering their final stages
• Britain took a decisive step away from a damaging no-deal Brexit as members of Parliament and political leaders backed efforts to prevent a disorderly departure from the EU
• Though the U.K. is better prepared for a no-deal Brexit than it was a number of months ago, it would still cause a large economic shock, the Times reports, citing Bank of England governor Mark Carney
• European Union increasingly sees a long Brexit delay as the most likely outcome of an emergency leaders’ summit next week, according to EU officials
• Trade deal that the U.S. and China are crafting would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation, according to people familiar with the talks
• Bank of Japan is likely to unveil its lowest two-year inflation forecast under Haruhiko Kuroda’s governorship at a meeting later this month, according to a former chief economist of the central bank
• Trump administration is examining options for shutting entry points to the U.S. from Mexico in case the president follows through with his threat to close the border, a White House official said
• Nomura will fire about 100 workers at its troubled European business as Japan’s biggest brokerage embarks on its latest attempt to achieve sustained profitability overseas; the job cuts in Europe will mostly target rates and credit traders in London, one of the people said, asking not to be identified as the numbers aren’t public
• Italy is set to slash its growth forecast for this year and raise its projected budget deficit, according to two senior officials with knowledge of the draft outlook. Italy’s economy is set to grow just 0.1 percent this year, according to the draft, the officials said. The government’s previous forecast was for a 1 percent expansion
• India’s central bank delivered a back-to-back interest rate cut on Thursday and fueled speculation of more policy easing after lowering inflation and economic growth forecasts

Asian equity markets traded cautiously with the region tentative ahead of looming risk events and after a positive lead from Wall St. where US-China trade optimism kept stocks afloat despite poor ISM & ADP data. ASX 200 (-0.8%) and Nikkei 225 (Unch.) were subdued with broad weakness seen across all sectors in Australia as the post-budget euphoria faded and profit-taking set in following a 7-day win streak, while the Japanese benchmark was indecisive amid a choppy currency. Chinese markets were mixed ahead of an extended weekend in which the Hang Seng (-0.2%) stalled after it briefly rose above 30k for the first time since June last year, while the Shanghai Comp. (+0.9%) was boosted on hopes US and China are nearing a trade deal and with reports also suggesting a Trump-Xi meeting date to sign off on a deal could be announced as early as today. Finally, 10yr JGBs were lower as prices tracked the recent weakness in T-notes and as Japanese stock markets held above water for most the session, while mixed results at the 30yr auction also failed to spur demand.

Top Asian News

• India Central Bank Cuts Interest Rate to Boost Flagging Economy
• Bank Indonesia Chief Says Rate Is on Hold Amid Global Risks
• China Willing to Work With U.S. on Agreement Reached by Leaders
• Japan Post Insurance to Sell $3.7 Billion Shares in Global Deal

A subdued start to the fourth European session of the week with stocks treading water thus far [Eurostoxx 50 U/C] following a mixed Asia-Pac session, ahead of key risk events including the ECB minutes and US-Sino trade talks. The FTSE 100 (-0.6%) marginally lags in the equity-space as a slew of ex-divs [Direct Line (-5.0%), St James’ Place (-3.4%) and DS Smith (-2.4%)] coupled with a firmer Pound pressure the index. Broad-based losses are seen across European sectors, although energy names are faring slightly worse amidst marginal downside in the oil complex. In terms of individual movers, Commerzbank (+2.4%) trades near the top of the Stoxx 600 amid reports that UniCredit (-1.4%) may bid on the German bank if a Deutsche Bank (-1.7%) deal fails. Meanwhile, Software AG (+3.0%) shares were bolstered by a broker upgrade at UBS. On the flip side, Maersk (-11.2%) shares declined following the separate listing of its drilling unit.

Top European News

• Commerzbank Shares Rise on Report of Possible UniCredit Offer
• ICG Said to Near $1.2 Billion Deal for Italy’s Doc Generici
• German Institutes Slash 2019 Growth Forecast by More Than Half
• Miners Fall as Iron Ore Rally Pauses on Anglo and GS Warnings

In FX, the Dollar index is holding around the 97.000 level within an extremely narrow 97.013-225 range, and symptomatic of the listless tone in the G10 currency markets overall after choppy trade from Monday through Wednesday amidst fluctuating risk on, off and on again sentiment. However, today and Friday offer some prospect of more decisive moves or at least price action if not clear direction, with the ECB Minutes, Fed speakers and NFP on the agenda.

• GBP – The Pound remains underpinned as UK Parliament passed another motion to avoid a no deal Brexit and request that PM May go back to the EU seeking a further A 50 extension if no alternative is found to the WA by April 12 or May 22 (assuming no sudden change of heart and the current proposal with Brussels is accepted as the better of evils vs a CU). Cable has rebounded from yesterday’s sub or circa 1.3120 lows to retest 1.3200, but not quite as near the big figure this time as 21/30 DMA convergence around 1.3165 continues to exert some gravitational influence. Similarly, Eur/Gbp has retreated through 0.8550 towards 0.8500 again, though has not managed to get as close as it did on Wednesday.
• JPY/EUR – Both firmer vs the Greenback, albeit fractionally given the relatively constrained trade noted above, with the Jpy inching higher within a 111.50-35 band and potentially capped by decent option expiry interest from 111.50-60 (1.3 bn) and the 200DMA (111.49). Meanwhile, the single currency continues to meet resistance around 1.1250 and has not been helped by abysmal German industrial orders data or confirmation that the country’s group of Economic Institutes has become the latest to slash the 2019 GDP to under 1%.
• CHF/NZD/AUD/CAD – All underperforming, but again in context only marginally. Indeed, the Franc is meandering between 0.9987-72, Kiwi hovering from 0.6800 to 0.6773 and Aussie just keeping its head above 0.7100, and at this stage not looking likely to arouse expiry interest at 0.7140-50 in 1 bn. For choice, the Loonie is lagging against the backdrop of softer crude prices and back below 1.3350 ahead of Canada’s Ivey PMI.
• EM – Literally no respite for the Lira it seems, as economic, fiscal and political issues continue to weigh on the currency and Turkish assets in general. Indeed, Usd/Try has nudged up to 5.6600 again after Wednesday’s mixed inflation data and another hike in swap limits, as investors eye next week’s Economic Program conscious of the fact that the CBRT may not be able to loosen its grip on the monetary policy reins given that headline CPI remains so high.

In commodities, the energy complex had consolidated following yesterdays advances and was edging lower for the majority of the session, though WTI & Brent futures have recently reverted much of this downside and are now just edging into positive territory for the day. Brent and WTI are currently trading around sesson highs of USD 69.34 and USD 62.50 respectively. Earlier in the session, Brent prices edged lower after hitting resistance at its 200 DMA around USD 69.60/bbl, meanwhile WTI remains north of its 200 DMA (USD 61.40/bbl). Elsewhere, spot gold (+0.1) trades lacklustre as markets are tentative ahead of the ECB minutes, US-China trade talks and NFP. It is also worth noting that investors are pulling money out of gold ETFs with around USD 153mln removed out of the USD 10bln VanEck Vectors Gold Miners ETF over the last five days. Meanwhile, copper (-0.3%) succumbs to the cautious risk tone but remains above its 100 WMA of just under USD 2.90/lb. Finally, Dalian iron ore futures saw its best day in seven-weeks, extending its record-breaking rally, as supply-side woes (largely from cyclones in Western Australia) and a pick-up in demand (steel mills replenishing stocks) boosted the base metal to a new peak of USD 103.49/tonne.

US Event Calendar

• 7:30am: Challenger Job Cuts YoY, prior 117.2%
• 8:30am: Initial Jobless Claims, est. 215,000, prior 211,000; Continuing Claims, est. 1.75m, prior 1.76m
• 9:45am: Bloomberg Consumer Comfort, prior 60

DB’s Jim Reid concludes the overnight wrap

After a pause on Tuesday, Monday’s risk rally on stronger manufacturing PMIs extended further yesterday on the previous night’s trade news and then a mostly positive global round of non-manufacturing PMIs. It was so good that 10 year bund yields now give you a positive yield again (0.008% – up +5.7bps yesterday). Hurry while stocks last. It makes me want to work out how much the average person would have to invest in them to give them their required retirement income given the 1bps yield! The move was helped by signs of hope from the services PMIs in Europe (more on that below) and Kudlow’s comments that US and China negotiators are “making good headway”. Later in the session, Bloomberg reported that the US requested a six-year timetable for China to implement changes to its import purchases and market access reforms, possibly an indication that a deal is being formalised. The FT reported that there are still a couple of sizeable outstanding issues; 1) what happens to existing US levies on Chinese goods, which Beijing wants to see removed, and 2) the terms of a US enforcement mechanism that ensures that China abides by the deal. Overnight, the White House has said that President Trump will meet Chinese Vice Premier Liu He today in the Oval Office at 16:30 ET (21:30 UK Time). It really feels like progress is being made even if tough work remains.

The tech sector really led the charge yesterday with the NASDAQ closing up +0.60%, albeit off its highs of +1.14%, which means it’s now closed up four days in a row – good for a +2.95% spurt during that time. The FANGs weren’t to be left out with the NYSE FANG index rallying +0.93% – the fifth consecutive daily gain – to put it at the highest level since early October. Amazingly the NASDAQ is also back to being just 2.64% off its all-time highs from late August again. Meanwhile the S&P 500 climbed +0.21% and DOW +0.15%. The latter’s underperformance was entirely driven by Boeing’s -1.54% drop. The Wall Street Journal reported that last month’s 737 Max crash in Ethiopia came despite the fact that pilots followed Boeing’s instructions on how to compensate for a software defect. Ethiopian authorities will release their report on the crash today, potentially opening Boeing up to legal liability.

European equities had a better session, with the Stoxx 600 advancing +1.01% to its highest level since August 9th last year. Bourses rallied across the continent, led by the DAX (+1.70%), the IBEX (+1.33%), and by banks (+1.61%). The only major laggard was the FTSE 100 (+0.37%), which was pressured by the stronger pound on perceived positive Brexit news as well as by the sharp rise in gilt yields, which rose +9.4bps for their biggest selloff in 13 months. Treasury yields rose as well, climbing +4.5bps while the 2s10s curve steepened another 1.0bps to 18.0bps. High yield spreads were also 5bps tighter in both Europe and the US. Oil prices traded flat, though US inventory data showed a surprisingly large 7.2 million barrel increase in stockpiles last week, taking some air out of the narrative of robust demand so far this year.

On Brexit, Prime Minister May and Labour Leader Corbyn held discussions yesterday on a cross-party proposal that both sides described as “constructive” even if Mr Corbyn said that there had not been “as much change as (he) had expected” in Mrs May’s stance.

Their teams will continue negotiations today, and the most likely date for another vote is Monday or Tuesday next week. Last night, Parliament voted 313-312 to pass the Cooper-Letwin amendment, which would try to force a long Article 50 extension. The bill will now move to the House of Lords today and, assuming it is passed cleanly, will take no-deal Brexit off the table – from the U.K. side at least. That has enraged the hard-Brexit supporting wing of May’s party, but it could still push them to back her deal next week if she ends up bringing it to a vote. Prior to the May and Corbyn meeting, European markets were mostly busy watching any Parliament reaction to May’s pivot and any reaction from the EU. On the former two MPs resigned however significantly neither were Cabinet ministers. Is this the calm before the storm in terms of resignations? It’s fair to say that there are a vast number of unhappy Tory MPs over the talks with Mr Corbyn. On the latter there wasn’t too much to highlight. The EU seem to be mostly watching for now. Elsewhere, the Sun has reported overnight that PM May is likely to request 9 month delay to Brexit during the EU summit.

In Asia this morning markets are trading mixed with the Shanghai Comp (+0.56%) and Kospi (+0.19%) up while the Hang Seng (-0.52%) is down and the Nikkei is trading flat. Elsewhere, futures on S&P 500 are trading flattish (-0.06%).

Back to the PMIs where the big talking point, and in contrast to the manufacturing data, was the 0.6pt upward revision to the March services reading for the Euro Area to 53.3, helping to lift the composite to 51.6 (vs. 51.3 flash). With the services sector more domestically orientated than the manufacturing sector it helps to boost the case that the domestic European economy is generally doing ok. The positive revision was helped by a boost from most countries. Germany and France were revised up 0.5pts to 55.4 and 0.4pts to 49.1, respectively, while Italy (53.1 vs. 50.8 expected) and Spain (56.8 vs. 55.0 expected) both came in ahead of expectations.

Staying with the PMIs, yesterday DB’s Peter Sidorov highlighted the fascinating stat that while Germany’s manufacturing PMI is in the deepest downturn outside of the Great Recession, Germany’s services PMI is in the top 25% of readings since the start of the euro area recovery in late 2013. In standardised terms, that is the largest underperformance of manufacturing vs services we have seen since the start of the data in 1997.

Overall the data should be welcomed by the ECB however it doesn’t hide the fact that any recovery back to trend growth still requires the manufacturing sector to lift out of the doldrums. On the subject of the ECB yesterday we got a fresh story from MNI under the title “ECB tiering more likely if rates cut further”. A word of warning that MNI hasn’t proved to be the most reliable of sources in recent times. The headline seemed to be a bit punchier than the actual story too, with the main message being that the tiering debate is still in its infancy right now with no clear outcome.

There’s a chance that we learn a bit more about the ECB’s thinking today with the minutes from last month’s confused policy meeting. Confused in the sense that it felt like the ECB sent out various contradicting messages. A reminder that in the end that they opted to announce the bare bones of the new TLTRO replacement facility but downgraded growth and inflation without suggesting any cohesive future policy implications.

In contrast to the data in Europe yesterday it wasn’t quite so good a day for US data. The March ADP print came in at 129k versus 175k expected, and in fact was the lowest reading since September 2017. We should however caveat that the ADP reading overstated NFPs by 163k in February, which isn’t the first time we’ve seen such a big divergence. So there is a bit of a question about the ADP survey being a reliable spot indicator of payrolls. More important though was the miss in the March ISM non-manufacturing (56.1 vs. 58.0 expected) and -3.6pt drop from February. New orders was the big driver of the decline (59.0 from 65.2), however, the employment component did nudge up +0.7pts to 55.9. The gap between the US and the RoW is closing through a slight dip in the former and a welcome rise in the latter.

To the day ahead now where shortly after this hits your emails we’ll get February factory orders data out of Germany, followed by the March construction PMI. In the US this afternoon the early data release is March challenger job cuts before we get the latest weekly initial jobless claims reading. We’ve also got the aforementioned ECB minutes due out at lunchtime while the Fed’s Mester and Harker are speaking this evening. Keep an eye on potential trade headlines too with China Vice Premier Liu He now in Washington.

via ZeroHedge News https://ift.tt/2CVPnII Tyler Durden

Less than a day after  Germany’s leading economic institutes cut its growth outlook for the already struggling German economy, Italy is out with a disappointing guidance cut of its own, making a mockery of last year’s EU negotiations with Italy to slash its deficit spending, which as everyone knew were nothing more than a farce.

Italian stocks tumbled on Thursday after the Italian Treasury once again slashed its forecast for economic growth for 2019, bringing the projection down to just 0.1% for the year, down from 1% previously. With growth expected to be flat for the coming year, the populist government of Europe’s third-largest economy now anticipates that its budget deficit will expand to around 2.3% or 2.4% of GDP, a level that was unacceptable to Brussels during the battle over the populists’ proposed fiscal stimulus efforts that nearly brought the founding EU member to the precipice of ‘Italeave’.

Now, just four months after Italy and Brussels reached a tenuous accord, the populists are finally coming clean, much to Brussel’s chagrin, we imagine.

• ITALY SAID TO CUT 2019 GDP GROWTH FORECAST TO 0.1% FROM 1%
• ITALIAN OFFICIALS COMMENT ON DRAFT OUTLOOK DUE BY APRIL 10
• ITALY SAID TO TARGET GDP GROWTH OF 0.3% T0 0.4% FOR 2019
• ITALY SAID TO SEE WIDER 2019 BUDGET DEFICIT AT 2.3% TO 2.4%
• FTSE MIB DIPS AMID REPORT ITALY SAID TO CUT GDP GROWTH FORECAST

The FTSE MIB fell 0.6% on the day, hitting session lows, after the forecast, weighing on broader European stock indices, as banking stocks like UniCredit led the way (though UniCredit was also under pressure from reports that it was considering a bid for Commerzbank). The news also weighed on the euro, though both the currency and Italian stocks have steadily pared their losses, while Italian bonds rallied. Despite the gloomier outlook, the Italian government is still targeting growth of 0.3% to 0.4% for the year, but amid a broader slowdown in the global economy that even officials like the IMF’s Christine Lagarde have acknowledged is “losing momentum,” that figure could be difficult to achieve.

Compounding Brussels’ frustration with Rome, the cut follows Italy’s controversial decision to join Beijing’s”One Belt, One Road” initiative, becoming the first G7 nation and first founding EU member to join the “neocolonial” project.

The forecast cut couldn’t have come at a worse time, as the English-language financial press was once again shining a spotlight on Italy’s unsustainable debt burden – which Brussels fears will only worsen as the populist coalition ruling the country has decided the more deficit spending is the only way to jumpstart Italy’s moribund economy.

As one Bloomberg commentator wrote just hours before the guidance cut was announced, “Italy’s public debt of €2.4 trillion ($2.7 trillion) is significantly bigger than its economy and among the largest in the currency union, making it the most dangerous. This debt mountain threatens the financial stability of Italy and the future of the euro: Any plans to strengthen the single currency must solve the question of who will bear this burden.”

via ZeroHedge News https://ift.tt/2OOdYEe Tyler Durden

Mere hours after Joe Biden published a video where he vowed to be “more respectful” toward women after a controversy over his history of “inappropriate” physical contact with women exploded onto the front pages, three more women have come forward to the Washington Post to share their owns stories about their encounters with the former Veep, bringing the total number to seven.

All three women told WaPo that Biden’s unwillingness to apologize for his behavior in his grand mea culpa video had offended them, and said it had become clear that Biden was “struggling to understand” exactly why his actions were inappropriate. This isn’t about sexual assault, one woman said, it’s about power dynamics between men and women.

Vice President Biden with Sofie Karasek, one of three women who spoke with the Washington Post.

One woman described how Biden had touched his forehead to hers during a widely photographed moment that she said was “kind of inappropriate.”

Vail Kohnert-Yount said she was a White House intern in the spring of 2013 and one day tried to exit the basement of the West Wing when she was asked to step aside so Biden could enter. After she moved out of the way, she said, Biden approached her to introduce himself and shake her hand.

“He then put his hand on the back of my head and pressed his forehead to my forehead while he talked to me. I was so shocked that it was hard to focus on what he was saying. I remember he told me I was a ‘pretty girl,'” Kohnert-Yount said in a statement to The Post.

She described feeling uncomfortable and embarrassed that Biden had commented on her appearance in a professional setting, “even though it was intended as a compliment.”

“I do not consider my experience to have been sexual assault or harassment,” she stated, adding that she believes Biden’s intentions were good. “But it was the kind of inappropriate behavior that makes many women feel uncomfortable and unequal in the workplace.”

Another woman described meeting Biden when he introduced Lady Gaga at the Oscars in 2016. She was part of a group of sexual assault victims who appeared with the singer. When she met Biden after the ceremony, he once again did the forehead touching thing – one of his signature moves – in front of a bevy of cameras.

The most recent encounter described to The Post took place in 2016.

Sofie Karasek was part of a group of 51 sexual assault victims who appeared onstage at the Oscars with Lady Gaga that year; Biden had introduced the singer’s performance.

Karasek said as she met Biden after the ceremony, she was thinking about a college student who had been sexually assaulted and recently died by suicide. She decided to share the story with the then-vice president, and Biden responded by clasping her hands and leaning down to place his forehead against hers, a moment captured in a widely circulated photograph.

Karasek said she appreciated Biden’s support but also felt awkward and uncomfortable that his gesture had left their faces suddenly inches apart. She said she did not know how to respond to, as she described it, Biden crossing the boundary into her personal space at a sensitive moment.

Someone printed her the photo of that moment, which Karasek framed and put on a shelf, but later took it down as the #MeToo movement began drawing more attention to cases of sexual harassment, assault and unwanted touching.

The third woman was a Democratic staffer during the 2008 campaign. She met Biden at a reception for 50 people that she helped organize. She described how Biden delivered an unwanted hug that lasted “for a beat too long.”

She now runs a nonprofit that fights sexual harrassment and said she felt duty bound to speak up.

The third woman to speak with The Post recalled meeting Biden for the first time during the 2008 election cycle.

Ally Coll said she was a young Democratic staffer helping run a reception of about 50 people when Biden entered the room. She said she was then introduced to Biden, who she said leaned in, squeezed her shoulders and delivered a compliment about her smile, holding her “for a beat too long.”

Coll, who runs the Purple Campaign, a nonprofit group that fights sexual harassment, said she felt nervous and excited about meeting Biden at the time and shrugged off feelings of discomfort. She says now that she felt his alleged behavior was out of place and inappropriate in the context of a work situation.

“There’s been a lack of understanding about the way that power can turn something that might seem innocuous into something that can make somebody feel uncomfortable,” said Coll, who consults with companies about their workplace policies.

In Biden’s defense, one woman who spoke with WaPo said the touching foreheads maneuver was a common gesture Biden employs with men and women (probably to try and convey, in pictures, that he’s a genuine “tactile” politician).

But with Biden reportedly set to declare his candidacy before the end of the month, his campaign-in-waiting has been thrown into disarray, and his top advisors are searching for scapegoats in the crowded field of Democratic rivals vying for the 2020 nomination.

If this report makes one thing clear, it’s that this scandal isn’t going away. And before it’s over, Biden, who is also facing renewed backlash over his role in the Anita Hill hearings, when he led the Senate committee that interrogated her, might find support for his candidacy has significantly diminished.

However, he has had one unexpected defender throughout all of this: President Trump, who has said Biden shouldn’t apologize.

Maybe the president is working with Biden’s rivals, too?

via ZeroHedge News https://ift.tt/2IbjAHm Tyler Durden

The last few days have seen a steady stream of leaks from the team investigating the crash of ET302, each more damning than the last, culminating with reports published Wednesday that the 737 MAX 8’s anti-stall software reengaged itself four times during the brief 6 minute struggle to right the doomed plane post-takeoff. Eventually, the sources said, the anti-stall software pushed the plane’s nose lower for the final time, sending it plummeting toward the Earth.

Boeing responded to this news with its own PR counteroffensive, and last night announced that its CEO, Dennis Muilenburg, had ridden in the cockpit of a 737 during a live test of its updated anti-stall software, and – get this – he survived! Boeing shares immediately lurched skyward.

But alas, it might take more than one successful test flight to distract from what investigators just told the world. Because right around 11:30 am Addis Ababa time, the findings from the official preliminary report were finally released in full. And they weren’t very flattering.

In the report, investigators urged Boeing to review the 737’s flight control system, and concluded that the crash wasn’t Boeing’s fault.

Which is a surprisingly indirect way of suggesting it was Boeing’s fault.

Finally, investigators recommended that Boeing complete “a full review” of its flight control systems, according to the FT.

Minister of Transport Dagmawit Moges said that the crew of the Ethiopian Airlines flight from Addis Ababa to Nairobi on 10 March “performed all the procedures repeatedly provided by the manufacturer but were not able to control the aircraft.”

As result, investigations have concluded that Boeing should be required to review the so-called manoeuvring characteristics augmentation system on its 737 Max aircraft before the jets are permitted to fly again, she said.

The results of the preliminary investigation led by Ethiopia’s Accident Investigation Bureau and supported by European investigators were presented by Ms Moges at a press conference in Addis Ababa on Thursday morning.

Boeing 737 MAX 8s have been grounded by regulators around the world for more than two weeks as the company scrambles to convince the FAA, foreign regulators and nervous passengers, that it had solved the software glitch that is believed to have contributed to both the crash of ET302 and a Lion Airlines crash that happened five months earlier. Of course, these are only preliminary findings and investigators still need to finalize their report. But as Boeing scrambles to finish revamping MCAS after a delay, it’s going to need to work extra hard to convince the public that these planes are safe.

via ZeroHedge News https://ift.tt/2UplWZP Tyler Durden

Authored by Federico Pieraccini via The Strategic Culture Foundation,

The multipolar transformation that is occurring across the Eurasian continent confirms the industrial and diplomatic cooperation between China and the European continent in spite of strong opposition from the United States.

Xi Jinping’s visit to Europe confirms what many of us have been writing about over the past few months and years, namely, the reality of an ongoing global transformation of a world dominated by the United States to a pluralistic one composed of different powers collectively shaping a multipolar world.

Europe therefore finds itself in fortuitous position, balanced as it is between its old world links to the United States on the one side and the fledgling Eurasian one being ushered in by Russia and China on the other.

Countries like Germany and France, but even the United Kingdom, have long implemented commercial policies that encourage integration between the countries of the Eurasian supercontinent. In 2015, the United Kingdom was among the first Western countries to join the Chinese Asian Infrastructure Investment Bank (AIIB), which finances projects of the Belt and Road Initiative (BRI).

The Chinese BRI mega project kicked off in 2014 with the ambitious goal of integrating trade between China and Europe by sea and by land, in the process incorporating all the countries in between. The idea, as a natural consolidation of trade, is to shorten the delivery times of goods by rail and integrate sea routes. The project covers not only ports and rail lines but also the construction of technological infrastructure to achieve global interconnectivity using the 5G technology developed by the Chinese tech giant Huawei.

Germany and France have over the years deepened their partnerships with Beijing. Paris in particular boasts historical ties with China stemming from the nuclear cooperation between China General Nuclear Power Group (CGNPC) and Électricité de France (EDF) stretching back to 1978, as well as the aerospace one between Airbus and the Chinese aviation companies that has been ongoing since 1985.

Italy has in recent months approached the BRI as a result of the new government consisting of the Lega Nord and Five Star Movement (M5S). The decision to sign a memorandum of understanding between Beijing and Rome underlines how the new government wants to maintain a balanced position between Washington and Beijing in certain sectors. This is exactly the approach of Germany, which has elected to continue deepening its ties with Moscow vis-a-vis hydrocarbons and Nord Stream 2 in the face of pressure from Washington. Moreover, both Germany and Italy have confirmed that they want to rely on Huawei for the implementation and management of 5G traffic, which is fundamental to a world dominated by the internet of things.

The decisions of Germany, France and Italy to continue their cooperation with Moscow and Beijing in various fields flies in the face of the narrative advanced by the American-controlled scaremongering media controlled that attempts to discourage European politicians from acting in the interests of their countries and engaging with Russia and China.

What Washington continues to misunderstand is why certain European countries are so determined to embrace the opportunities offered by the East. Italy’s recent example is quite easy to understand. The Italians hope that the BRI will provide much needed stimulus to their production industry, which has been in the doldrums in recent years. The desire for Chinese capital to give a boost to the export of Italian-produced goods is the driving force behind the proposed agreement between Beijing and Rome.

In addition to the obvious and natural desire for capital, there is also the idea of ​​ensuring energy supply, as Germany is doing with the construction of the Nord Stream 2 with Russia. Despite strong US opposition, Berlin has favored its own national interest in energy diversification, avoiding giving in to pressure from Washington, which wanted Germany to rely on LNG supplied all the way from the US at an exorbitant price when compared to Russian-supplied gas.

There are striking divergences between Europe’s politicians, especially if we look at the relations between Macron and Salvini in Italy, or those between May and her European colleagues. Even between Merkel and Macron there seem to be notable frictions surrounding energy independence. However, in spite of these apparent divergences, the prevailing theme in the final analysis is that of wishing to escape Washington’s suffocating dominance in favor of a greater participation in the concept of a multipolar world.

No European capital – whether it be Paris, Rome, Berlin or London – intends to break the Atlantic pact with Washington. This is confirmed at every possible formal occasion. However, as Beijing becomes more and more central to questions concerning technology or the supply of liquid capital for investments or business expansion, the changes to the global order seem unstoppable.

The last obstacle remains those countries still closely linked to pro-Atlantic policies, those who find in Beijing, and above all Moscow, an excellent excuse to invite Washington’s greater intrusion into the sovereign affairs of Europe. The Baltic countries and Poland seem to offer the best inroads for US policy makers to try to influence the debate on the old continent regarding ties with the East. The artificial crises created in Ukraine, Syria and Venezuela also serve as tools to divide European leaders into opposing camps, creating the conditions to scupper European cooperation with the East.

It is no coincidence that for US strategists the two greatest dangers lie in the possibility of Moscow and Beijing, or Moscow and Berlin, cooperating and coordinating their efforts. The Berlin-Moscow-Beijing triangle, with the addition of Rome and Paris, represents a scenario for Washington that is unprecedented in terms of its challenge to US hegemony in Europe.

Wang Yiwei, Senior Research Fellow at the Center for China and Globalization, during Xi Jinping’s historic visit to Rome expressed in concrete terms the changing global order:

“With the 16+1 cooperation plan between Central and Eastern European nations and China, several countries signed memoranda of understanding with China to jointly build the BIS. So far, the governments of 16 Central and Eastern European countries have signed memoranda of understanding on BIS cooperation with China. Currently, 171 cooperation agreements have been reached with 123 countries and 29 international organizations under the BIS “

via ZeroHedge News https://ift.tt/2VrDTnT Tyler Durden

A video of a group of British soldiers using a large poster of Labour leader and avowed Marxist Jeremy Corbyn for target practice has provoked outrage in the UK and prompted the Ministry of Defense to launch an investigation, Sky News reports.

Corbyn, who will be meeting with Prime Minister Theresa May on Wednesday to discuss a possible Brexit compromise, has drawn the ire of the armed services due to his support for cuts to the defense budget and UK’s nuclear arsenal, as well as his tacit support for the government of Venezuela.

The cellphone footage, which has since gone viral, was initially posted to Snapchat before finding its way to Twitter. Though it’s unclear when the video was filmed, it’s believed that the shooting exercise took place in Kabul, Afghanistan, where soldiers carry out “guardian-angel” drills – ironically, practice to protect celebrities and government officials. In the video, the poster of Corbyn was accompanied by a label that read: “Happy with that.”

A @DefenceHQ investigation is being launched after UK soldiers were filmed shooting at a picture of @jeremycorbyn. pic.twitter.com/BdXtguODUS

— RT UK (@RTUKnews) April 3, 2019

In a statement released Wednesday, the Army said “we are aware of a video circulating on social media. This behavior is totally unacceptable and falls well below the high standards the army expects. A full investigation has been launched.”

Labour lawmakers condemned the video, pointing out that it has circulated during a particularly charged time. A Labour MP who was allegedly targeted for murder in a neo-Nazi plot shared her experience during Wednesday’s PMQs…

“I was to be murdered to send a message to this place,” Rosie Cooper said. “Members of this House are regularly abused and attacked. Our freedoms, our way of life, our democracy is under threat.”

…eliciting a sympathetic reply from Speaker Bercow.

“By this sort of poisonous fascistic bile, we will not be cowed,” Bercow said. “And the sooner the purveyors of hate, of fascism, of Nazism, of a death cult realize that, the better.”

According to the BBC, the soldiers in the video were from the UK Army’s Third Battalion, and part of a parachute regiment known as 3 Para.

A Labour Party spokesman denounced the video as “alarming and unacceptable” but said the party has confidence in the MoD to investigate the incident.

via ZeroHedge News https://ift.tt/2G0RpbB Tyler Durden

Authored by Jesse Colombo via RealInvestmentAdvice.com,

Business Insider published a piece on April 1st about plans to build Western Europe’s tallest skyscraper…in a small, rural Danish town with just 7,000 residents. After I posted it on Twitter, many of my followers thought it was an April Fool’s joke due to how absurd the idea is. Even I had to do a little research to confirm that it wasn’t a joke, but it is indeed a true story –

A 1,050-foot skyscraper soaring out of the earth isn’t exactly what you’d expect to come across in a corner of rural Denmark, and yet one may soon become a reality.

The fast-fashion giant Bestseller just secured final approval from the council of Brande, Denmark, to build its eponymous tower in the town of just 7,000 citizens.

When built, the Bestseller Tower, designed by the Danish architect Dorte Mandrup, will be the tallest building in Western Europe, beating out the Shard in London by 34 feet.

“We are very pleased that the plans have now been approved by the city council and we are extremely proud and humbled by the amount of support our project has received, especially locally. It is important for us to underline that the city council’s approval is merely one of the preliminary steps of a long journey,” Anders Krogh, Bestseller’s project manager, said in a statement.

Though the fashion company has long outgrown its roots in Brande — the owner, Anders Holch Povlsen, is Denmark’s richest man with a reported net worth of $7.2 billion — it’s hoping that the new building development will put the Jutland town on the map.

“It will be a landmark,” Krogh added in the statement. “But it will also function as an architectural attraction benefiting hotel guests, students and other users of the building.”

After reading that piece, what immediately came to mind was the fact that the construction of skyscrapers (especially record-breaking ones) is a common hallmark of economic bubbles.

During an economic bubble, credit is cheap and readily available, asset prices such as stocks and real estate are rising rapidly, people are in a good mood, and business leaders become increasingly cocky and hubristic. It is at this time that pursuing grandiose undertakings such as building massive, opulent new corporate headquarters or skyscrapers starts to appeal to business leaders. These leaders are often “bubble drunk” and forecast prosperity “as far as the eye can see.”

This complacent attitude can be seen in many indicators, including in the Multi-Asset Volatility Index that we posted in our RIA PRO subscription service (when volatility is low, investor complacency is high):

The British historian and author C. Northcote Parkinson observed that organizations often build grandiose headquarters and other architectural projects at their very peak before they decline:

Parkinson calls in evidence a series of historical examples of architectural grandeur accompanying organizational/institutional decline. In the case of the Vatican, for example, ‘the great days of the papacy were over before the perfect setting was even planned. They were almost forgotten by the date of its completion.’ By 1933 the League of Nations was seen to have failed, and yet its ‘physical embodiment’, the Palace of Nations, was not opened until 1937. He argues that Louis XIV moved to Versailles in 1682, the year his career reached its apex, and thereafter, as the sumptuous Palace was gradually completed, so his power inexorably declined. Parkinson gives a number of British examples, including Blenheim Palace, Buckingham Palace, the Palace of Westminster and the Colonial Office, but identifies New Delhi, started in 1911, several years after the decline of British imperialism began (with the 1906 General Election), as a perfect example of his Law’s applicability.

Many famous record-breaking skyscrapers were planned and built in boom times right before a severe economic bust – this is known as the “Skyscraper Curse.” For example, the Singer Building and the Metropolitan Life Insurance Company Tower in New York were started before the Panic of 1907, the Chrysler Building was started in 1928 before the 1929 stock market crash and Great Depression, the World Trade Center and the Sears Tower were planned and built before the 1973 – 1974 stock market crash, Malaysia’s Petronas Twin Towers were completed in 1996 before the 1997 Asian financial crisis, and Dubai’s Burj Khalifa was started just a few years before the country experienced a serious real estate bust in 2008 and 2009.

I believe that Anders Holch Povlsen and his company Bestseller’s bizarre decision to build a skyscraper in a tiny town with just 7,000 residents (and Bestseller only has 1,500 employees in this town) is a byproduct of Denmark’s negative interest rates and the frothy environment that they are creating. Since 2012, Denmark has had negative interest rates and is the only country to have had such unusual monetary conditions for so long:

Because Denmark is one of the few remaining countries with a perfect AAA credit rating from Standard & Poor’s, investors have even pushed the country’s government bond yields into negative territory a few times in recent years. Denmark’s 10-year government bond currently yields just 0.017%, while the U.S. 10-year Treasury bond yields 2.48% – a dramatic difference.

When central banks like Denmark’s Nationalbank cut interest rates to ultra-low or negative levels, they create tremendous distortions, imbalances, misallocations, and malinvestments in the economy and financial markets. For example, ultra-low interest rates discourage saving (what’s the point when you actually lose money by keeping it in the bank?!), encourage borrowing, and encourage speculation in rising asset prices (Danish housing prices are up 50% since 2012, for example). Ultra-low and negative interest rates also encourage the construction of extremely speculative, grandiose projects like skyscrapers. In a world where there are few conventional investment opportunities left, speculation becomes much more appealing.

While Denmark has been the only country that has experienced negative interest rates for so long, global interest rates have been at 5,000 year lows for much of the past decade:

As a result of record low interest rates, the tremendous distortions, imbalances, misallocations, and malinvestments discussed earlier in reference to Denmark are occurring across the globe. This unprecedented monetary environment explains why stocks are soaring, corporations are borrowing heavily, scores of billion dollar startups are popping up out of nowhere, and the global billionaire population has doubled in the past five years alone. While it appears to be a boom on the surface, it is an extremely unhealthy and artificial situation that will end in the mother of all economic crises. So, even if you don’t live in, invest in, or have anything to do with Denmark, I am using this new, record-breaking skyscraper as an example of the kind of foolishness that is occurring globally. Thanks to globalization, we’re all tied into the same system – your investments, your job, and your way of life are all exposed to this global bubble.

via ZeroHedge News https://ift.tt/2WPVLZT Tyler Durden

Christmas just came early for Maxine Waters and Adam Schiff.

As the leaders of the House Financial Services Committee and House Intelligence Committee ramp up an investigation into Deutsche Bank’s lending relationship with the Trump Organization (the first round of subpoenas has already been sent and Waters has said that DB is cooperating in the probe), Bloomberg has handed them a gift in the form of an extensive report chronicling a culture of chronic compliance failures at the bank’s US unit. At first glance, the story appears to support Waters’ claim that Deutsche is “one of the biggest money laundering banks in the country, or maybe the world.”

The report describes Deutsche’s US unit, which is headquartered inside a gleaming Wall Street tower, making it one of the few Wall Street banks still situated on Wall Street, as a “kind of legal mirage”. For years, the leaders of the US subsidiary were merely puppets, with little real power, influence or knowledge about the subsidiary’s operations. Even the distribution of bonuses was outsourced to the headquarters in Frankfurt, BBG said. Top executives couldn’t answer questions about the bank’s operations, and they had little influence over personnel decisions.

This lack of authority helped foster an atmosphere of lax compliance and AML controls, which endured even after US regulators demanded that changes be made.

After DB expanded its US presence by buying out the floundering Bankers Trust, which was mired in a scandal involving sales of shady derivatives products. But DB swiftly established a shady track record of its own:

From 1999 through 2006, it handled almost $11 billion in U.S. dollar transactions for customers in nations under sanctions: Iran, Syria, Libya, Burma and Sudan. Later, it helped rich Russians move $10 billion from their country using “mirror trades” – simultaneous stock trades in separate jurisdictions that bypassed customary hoops for transferring money.

And those were just the cases where the bank was accused of wrongdoing. Here’s a roundup of other incidents where the bank managed to escape regulatory scrutiny.

• Russia’s Sberbank PJSC while the government-controlled bank was involved in a years-long scheme that funneled millions to a man in the U.S. who admitted to smuggling $65 million worth of potential nuclear technology to Russia, according to federal prosecutors;
• Kenyan fraudsters who scammed U.S. income tax refunds using identities stolen from Indiana sex offenders;
• and a Colombian drug cartel that received payments from the U.S. Drug Enforcement Administration as part of an undercover operation.
• The payments, disguised as profits from auto-parts sales, were transferred into a Deutsche account and exhibited what a DEA undercover agent called “obvious red flags.”

Through interviews with more than a dozen former employees, as well as a review of hundreds of pages of court documents, a picture emerged of why Deutsche Bank waited so long to break off its correspondent banking relationship with Danske Bank’s Estonian branch, the epicenter for one of the biggest money laundering scandals in European banking history. JPM broke off its relationship with the unit in 2013, while BofA waited until early 2016. DB didn’t sever its ties until late in 2016.

Internal documents, court records and interviews with dozens of people – including more than 20 current and former employees of the troubled German lender – show that its U.S. unit largely resisted strict money-laundering compliance for years. The insider accounts help explain why Deutsche’s U.S. subsidiary kept handling Danske’s business after competitors quit.

Although U.S. executives routinely promised regulators they’d get tough, former staffers say such efforts were often disregarded in favor of cozy relationships with overseas customers. The suspicious billions kept flowing — not just from Danske’s Estonian branch, but from various clients that would eventually be snared in other global money-laundering scandals.

And what’s worse, the bank failed to act even after managers in the bank’s Jacksonville, Fla. office, its second-largest in the US, where most of its compliance workers were stationed, confronted executives about their concerns after more than $150 billion in suspicious funds flowed through Deutsche’s correspondent banking unit. How did the executives respond?

They told the compliance workers to shut up and worry about the work in front of them.

Years before regulators learned about what may be one of the biggest money-laundering pipelines in history, low-level bank employees in Jacksonville, Florida, sounded repeated alarms.

Compliance workers for Deutsche Bank AG flagged some of at least $150 billion in transactions that the bank’s U.S. subsidiary handled for a tiny Estonian unit of Danske Bank A/S, according to a former compliance officer.

It’s not clear how urgently the Florida team warned executives at Deutsche Bank Trust Co. Americas. But when workers sought broader scrutiny of certain clients, they got a familiar response from some higher-ups, the officer said: Shut up, focus on the transaction in front of you, file your paperwork and move on.

Moving on, BBG discussed how the leaders of the bank’s US unit repeatedly broke promises to regulators to reform the bank’s AML controls. During the 2000s, the unit was led by Seth Waugh, who was later called out by the Federal Reserve Bank of New York for making “no progress” on improving the bank’s AML controls.

Employees said Waugh’s failure wasn’t surprising. They recalled how during conversations about bank operations, Waugh often couldn’t answer questions because the real decisions were made in Europe.

When that money flow began, the chief of the German lender’s US business was Seth Waugh, a perpetually tanned executive who wore his graying hair a bit long by bankers’ standards.

Waugh pledged to regulators in 2005 that he’d overhaul the bank’s money-laundering protections. But in a 2013 letter that served as a scathing review of his tenure, the Federal Reserve Bank of New York concluded that “no progress was made” on concerns first raised in 2002.

Waugh, widely described as affable and approachable, had only limited influence over staff members’ bonuses or other personnel matters – or even key points of Deutsche’s U.S. balance sheet, according to several former colleagues. Employees say he often couldn’t answer questions about bank operations or regulatory matters because the real decision-makers were sitting in Europe.

One New York executive recalled visiting Waugh’s 46th-floor office to tell him about bonus-hungry co-workers who ignored danger signs to chase risky accounts. Waugh seemed sympathetic but said he wasn’t sure what he could do, the executive recalled.

In a sign of just how much value Deutsche placed on compliance, the bank hired a former one-star general with no investment banking experience to run the locus of its compliance operations – effectively killing two birds with one stone: Showing its peers that it was serious about hiring veterans, and hamstringing its compliance operation. In a shareholder lawsuits brought against the bank in 2016, an executive who was deposed by the investors’ lawyers said compliance staff were treated as “one step above janitors.”

In 2010, Brigadier General Michael Fleming of the Florida Army National Guard began talking to Deutsche about a new career, running its veteran-recruitment program. He got a bigger job instead: running its new outpost in North Florida.

“I really didn’t have any corporate investment banking experience at that point,” the one-star general told Fox Business Network in 2013. Fleming, who left Deutsche Bank in 2014, didn’t respond to requests for comment.

Former employees said he wasn’t a hands-on leader. Before his arrival, Deutsche executives had transferred some bank functions, including anti-money-laundering efforts, to the main Jacksonville site, several low-slung concrete buildings that surround a man-made pond in a suburban office park. It grew to become the bank’s second-largest office in the U.S., with approximately 2,000 employees working in various operations. Former compliance workers there describe a disregard for their work that emanated from New York.

Throughout Deutsche Bank, compliance staff members were considered to be “one step above the janitors,” an unnamed former executive told lawyers who filed a 2016 lawsuit against the bank. The suit, in which investors claimed Deutsche Bank misled them about the effectiveness of its anti-money-laundering efforts, was later dismissed.

But in what was perhaps the most humorous detail from the story, BBG reported on how DB’s correspondent bank would hand out “excellence awards” to clients who raised the fewest number of red flags from the bank’s automated compliance system. A Cypriot bank later accused of laundering money for terrorists received one of the awards, though DB wasn’t accused of wrongdoing.

Still, some aspects of the bank’s approach raise questions. Like other correspondent banks, it relies on a largely automated system called “straight-through processing,” or STP. That system checks names and places against government risk lists and other factors. For years, executives have bestowed an “STP Excellence Award” on customers that successfully move money through Deutsche’s system while raising the fewest red flags. The awards have sometimes gone to questionable recipients.

Cyprus-based FBME Bank Ltd. won eight of them through 2013, according to news releases. The Treasury Department later accused that bank of having weak money-laundering controls that allowed customers to conduct more than $1 billion in suspicious transactions through various correspondent accounts, including one with Deutsche Bank’s U.S. unit, from 2006 to 2014. Treasury officials said FBME helped organized crime and terror groups move money, evade sanctions and develop banned weapons. Deutsche Bank wasn’t accused of wrongdoing in the case.

Ironically, though it apparently had no problem offering banking services to criminals, terrorists and sanctioned governments, DB drew the line in 2016 when it opted not to lend more money to the Trump Organization over fears of being associated with such a controversial candidate, as well as worries about being put in the awkward position of seizing assets from the president should his company default while in office.

In summary, terrorists and criminals good, Trump bad.

via ZeroHedge News https://ift.tt/2WElxjs Tyler Durden