Category: zerohedge

Following in the footsteps of JPMorgan on Friday, moments ago Bank of America reported revenue and earnings that beat expectations, with $22.8BN and $0.66 in Q3 revenue and EPS, both above consensus estimates of $22.67BN and $0.62, even as the bank missed on trading, reporting Q3 trading revenue of $3.1BN, below the $3.15BN expected, as equities generated $1.0BN (exp. $1.06BN) while FICC brought in $2.1BN, just above the $2.08BN expected.

Just like Jamie Dimon before him, BofA CEO has upbeat comments about the economy,  noting “… a solid U.S. economy and a healthy U.S. consumer.” Indeed, as shown below, consumer lending grew by 6% while the net charge-off ratio was at its lowest in nearly 10 years amid improvement in consumer real estate and energy loan performance, a continuation of the trend observed last week from JPMorgan, Citi and Wells.

Among the other highlights from the quarter, return on average equity was 11%; return on average assets 1.23%; Basel III common equity Tier 1 ratio fully phased-in, advanced approach 11.4%, estimate 11.4%; provision for credit losses $700 million, estimate $969.1 million.

Net interest income disappointed, up 6% to $11.9 billion ($12.0BN on a fully-taxable basis), the highest since 2011, but just shy of consensus estimates which was looking for $12.05 billion for the quarter. The net interest yield of 2.42% increased 6 bps from 3Q17, reflecting the benefits from spread improvement, partially offset by the impact of an increase in lower-yielding Global Markets assets. Excluding Global Markets, the net interest yield was 2.96%, up 13 bps from 3Q17. On the other hand, BofA said it remain positioned for NII to benefit as rates move higher, and disclosed that a +100 bps parallel shift in interest rate yield curve is estimated to benefit NII by $2.9B over the next 12 months, driven primarily by sensitivity to short-end interest rates.

The modest NIM weakness was offset by BofA’s decline in provision for credit losses, which was down $118MM, at $716MM, below last year’s $834MM and also below the $969MM expected by analysts. The decline echoes the trend observed at both JPM, Citi and Wells Fargo last week.

Looking deeper into BofA’s balance sheet, the allowance for loan and lease losses of $9.7B, represented 1.05% of total loans and leases. Nonperforming loans (NPLs) decreased $743MM from 2Q18, driven by improvements in both consumer and commercial. Commercial reservable criticized utilized exposure decreased $760MM from 2Q18.

While the quality of the balance sheet generally improved, BofA posted a modest decline in Loans and Leases, which declined from $935MM to $931MM sequentially into Q3, while Loans in Business Segments declined by $1MM sequentially.

Meanwhile, deposits continued to rise across Consumer Banking and Global Banking, but declined modestly in wealth management.

On the expense side of things, non-interest expenses were down about 2% to $13.1 billion during the quarter “due to broad-based improvements in both personnel and non-personnel expense.” As Bloomberg reminds us, BofA is targeting $53 billion in expenses for the year and it was on track to reach that goal as of the second quarter. Additionally, BofA’s efficiency ratio improved to 57% in 3Q18; total headcount of 205K declined 2% from 3Q17, reflecting declines in non-sales professionals as well as continued investments in primary sales professionals across Consumer Banking, GWIM and Global Banking.

Bank of America also highlighted that it has opened 53 new branches and renovated 404 others in the last year. Still, the number of branches overall is down 130 to 4,385 over the past year.

Looking at BofA’s trading performance in Q3, it was a somewhat mixed picture, with total sales and trading revenue of $3.1BN, (ex. net DVA) down 3% from a year ago, and missing consensus estimates of $3.15BN as equities generated $1.0BN (exp. $1.06BN), down 3% Y/Y, while FICC brought in $2.1BN, down 5% Y/Y and just above the $2.08BN expected. 3Q Investment Banking Revenue of $1.20BN also missed the estimate of $1.33BN.

Explaining the decline, BofA said that the 5% drop in FICC was due primarily to lower client activity in rates products as well as a weaker environment for municipal bonds. Meanwhile, equity revenue increase of 3% was driven by increased client activity in financing.

BofA’s IB revenue downtick seems to have come in worse than expected. Decline being mainly pinned on M&A advisory fees and leveraged finance. Equity underwriting was a bit of a bright spot. What analysts didn’t really expect was how bad debt-underwriting revenue would be: $684 million, compared with an average estimate of $820 million.

That said, as Bloomberg reminds us, this was the quarter that BofA said investment-banking head Christian Meissner is departing, and there have been rumblings about a lot of movement in the senior ranks. Still, the $1.25 billion in IB revenue is a good bit below the average estimate of $1.33 billion.

In consumer banking, BofA like other banks, was hit by rising rates and noninterest income decreased modestly, as higher card income and service charges were more than offset by lower mortgage banking income.

Looking at BofA’s results overall, it was another solid quarter in line with other banks, with the unexpected decline in credit loss provisions indicating optimism about the future even in a time of rising rates, while the miss in trading results will be largely forgiven as it was in line with what other banks reported. The stock was down initially on the results but has since bounced back.

Full earnings supplement below (link)

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Last week’s global stock rout returned despite Friday’s tentative bounce, as the selloff resumed in Asia with China tumbling 1.5%, closing at a fresh 4 year low, dragging European shares lower with S&P futures sliding 0.5% and Nasdaq futs down -0.8% on Monday, as a new diplomatic crisis between the US and Saudi Arabia added to a list of investor concerns and drove up oil prices. Safe havens bounced, led by Gold with Treasuries and the yen also rising.

“The breakdown in Brexit talks, the disappearance of dissident Saudi journalist Jamal Khashoggi, the demise of the CSU in Bavarian elections, the impasse over Italy’s budget and the worried tone coming from the IMF/World Bank meeting in Bali all combine to give financial markets an uncomfortable feel this morning,” according to SocGen FX strategist Kit Juckes.

A renewed threat by Trump to impose more sanctions on Beijing overpowered encouraging words from China’s securities regulator, accelerating the $3 trillion rout in China’s stock market, while evidence of weakening domestic demand added to concern about the trade war with the U.S. The Shanghai Composite Index fell 1.5%, closing at session lows and the lowest level in the index since November 2014 following a weekend of warnings on global economic fragility from finance chiefs meeting at an annual IMF gathering.

Over the weekend, President Trump threatened to impose another round of tariffs on China in an interview with CBS’s “60 Minutes” that aired Sunday. When asked whether he wants to push China’s economy into a depression, Trump said “no.” Also over the weekend, at the IMF annual meetings in Bali, finance officials weighed tremors rattling the global economy, from stock sell-offs to trade concerns and rising U.S. rates.

The Shanghai Composite has slumped 19% in the past six months and is in a bear market since its January highs as trade tensions increased and data signaled a slowdown in the economy, while the yuan has fallen more than 9%. A gauge of consumer-related shares dropped the most after data showed purchases of passenger vehicles and online appliance sales slumped in September. Liu Shiyu, chairman of the China Securities Regulatory Commission, said the country will deepen capital market reforms and press ahead with opening up after he met with investors.

The subindex of consumer discretionary stocks fell 2.1%, the most among the CSI 300 Index’s 10 industry groups. Great Wall Motor Co. slumped 9.4 percent to its lowest since 2012, while Qingdao Haier Co. tumbled 9.2 percent.

“The fundamental issues that haunt investors — lower global risk appetite and a slowing Chinese economy — remain,” said Ken Chen, Shanghai-based analyst with KGI Securities Co. “The market will only recover if those concerns are resolved, and it’s going to take more than just verbal promises.”

The Hang Seng Index fell 1.4% after three weeks of losses, while the Hang Seng China Enterprises Index dropped 1.5%. Tencent Holdings Ltd. slumped 1.9%. As we reported last week, purchases of passenger vehicles by Chinese dealerships plunged for a third straight month in September, dropping the most on record.

Over the weekend, Steven Mnuchin expressed concerns about the yuan’s weakness and called for a currency clause that would prevent competitive devaluations to be included in any trade talks with Japan. Separately, China’s ambassador to the U.S. said Beijing has no choice but to respond to what he described as a trade war started by the U.S.

Asian weakness spread to Europe, where industrial goods makers and technology firms were the biggest losers in the Stoxx Europe 600 index. In Frankfurt, stock trading has resumed after the opening was delayed by a technical glitch. Main European Indices are mixed amid current market uncertainty; the Dax is up (+0.3%) despite being weighed on by Lufthansa which is down by over 3% following agreements on new employment conditions, featuring moderate salary increases. Sectors are mixed with IT lagging at -1% as a follow on from poor IT performance in Asia due to continued U.S-China tension; this is despite Friday’s Wall Street rebound for IT which saw it as the leading sector finishing up by 3%. Convatec shares tumbled over 25% following a cut in revenue guidance.

The Bloomberg Dollar Spot Index slipped while Treasuries climbed amid the risk-averse mood. Most Asian currencies fell against the dollar, led by the Indian rupee and South Korean won as the rebound in global equities Friday failed to follow through after the weekend IMF gathering.  The British pound was volatile, paring a drop of as much as 0.5% after the U.K. and the European Union remained on course to miss this week’s key milestone on the road to a Brexit deal after talks broke up in stalemate on Sunday. The yen pushed higher while gold headed toward its fourth advance in five days.

Italian bonds erased earlier gains as the nation prepares to meet Monday’s midnight deadline for euro-area governments to turn in fiscal budgets.

Meanwhile, Crude and Brent are up 0.6% and 0.9% respectively amidst supply concerns following possible U.S sanctions against Saudi Arabia over missing journalist Khashoggi, which Saudi say they will respond in kind to if implemented. Prices are currently just over USD 71.5/bbl and USD 81/bbl respectively. Additionally, IEA’s Birol stated that high oil prices are hurting consumers and that extra barrels will need to come to the market soon to avoid further tightening.

Gold is once again up with mass uncertainty in the market from unproductive Brexit talks, US-China trade war and Italian’s budget deadline day causing investors to move into the safe haven. Global trade tensions have also caused selling pressure in London metals causing prices to slip. Shanghai rebar steel futures climbed to their highest levels in over 3 weeks, boosted by  expectations that China’s sustained anti-pollution campaign could further disrupt production.

Expected data include retail sales and Empire State manufacturing. Bank of America, Schwab, and JB Hunt are among companies reporting earnings

Market Snapshot

• S&P 500 futures down 0.7% to 2,749.00
• STOXX Europe 600 down 0.6% to 356.81
• MXAP down 1.1% to 152.56
• MXAPJ down 1% to 479.89
• Nikkei down 1.9% to 22,271.30
• Topix down 1.6% to 1,675.44
• Hang Seng Index down 1.4% to 25,445.06
• Shanghai Composite down 1.5% to 2,568.10
• Sensex up 0.1% to 34,775.90
• Australia S&P/ASX 200 down 1% to 5,837.10
• Kospi down 0.8% to 2,145.12
• German 10Y yield fell 0.8 bps to 0.49%
• Euro up 0.01% to $1.1561
• Italian 10Y yield rose 1.3 bps to 3.203%
• Spanish 10Y yield fell 0.4 bps to 1.672%
• Brent futures up 0.7% to $80.98/bbl
• Gold spot up 1% to $1,229.01
• U.S. Dollar Index down 0.1% to 95.11

Top Headlines

• The U.K. and the European Union are on course to miss this week’s key milestone on the road to a Brexit deal after talks broke up in stalemate on Sunday. Talks are now paused after weekend negotiations failed to break deadlock; EU now considering a crisis summit in November for no-deal contingency planning according to people familiar
• Sears Holdings Corp., the 125-year-old retailer that became an icon for generations of American shoppers, filed for bankruptcy, saddled with billions of dollars of debt racked up as it struggled to adjust to the rapid shift toward online consumption
• After weeks of conflicting messages from Rome, market turmoil, and an early warning that the spending plans would breach EU rules, the European Commission will start reviewing Italy’s plan to start delivering on costly election promises
• Chancellor Angela Merkel faces a new round of coalition turbulence after her Bavarian sister party dropped to a historic low in a regional election that exposed the scope of voter disaffection with Germany’s political establishment
• Mnuchin: wants a currency clause that would prevent competitive devaluations to be included in any trade talks with Japan; Kudlow says Trump is concerned that the Fed might choke off the U.S. recovery
• ECB’s Rehn: latest core inflation numbers were somewhat disappointing; ECB should gradually move to data- dependent rate guidance
• PBOC Governor Yi: sees no reason to hike rates; China won’t use its currency as a tool to deal with trade conflicts
• Saudi Arabia: Trump says Saudi would face “severe punishment” if linked to disappearance of Khashoggi; State news says kingdom will retaliate against any measures with even stronger response.

Asian equity markets resumed last week’s stock rout as the region failed to take impetus from Friday’s rebound on Wall Street where tech outperformed and all majors finished a tumultuous session in the green, albeit with losses of around 4% on the week. ASX 200 (-1.0%) slumped from the open as financials and tech led the broad losses which dragged the index briefly below the 5800 level, while Nikkei 225 (-1.9%) suffered from continued flows into the JPY. Elsewhere, Shanghai Comp. (-1.5%) and Hang Seng (-1.4%) conformed to the negative tone with sentiment not helped by President Trump’s reiteration that the US may have to impose another round of tariffs on China, with indecision seen in the mainland after the PBoC skipped open market operations and refrained from rolling over maturing MLF loans as its previously announced 100bps RRR cut took effect. Finally, 10yr JGBs were pressured at the open and tracked the recent weakness in T-notes, but then recovered as the widespread risk averse tone spurred safe-haven demand.

Top Asian News

• SoftBank Dive Hits $22 Billion Amid Saudi Outcry, Tech Rout
• China’s Stocks Extend $3 Trillion Rout as Consumer Firms Crumble
• Asian Stock Markets Fall. And There’s a Slew of Reasons Why
• Singapore Home Sales Rebound as Buyers Move Past Curbs

Main European Indices are mixed amid current market uncertainty; the Dax is up (+0.3%) despite being weighed on by Lufthansa
which is down by over 3% following agreements on new employment conditions, featuring moderate salary increases. Sectors are mixed with IT lagging at -1% as a follow on from poor IT performance in Asia due to continued U.S-China tension; this is despite Friday’s Wall Street rebound for IT which saw it as the leading sector finishing up by 3%. Convatec are down by over 25% following a cut in their revenue guidance. Chr Hansen are up by over 2% following a positive earnings update and reports that their chairman will not seek re-election, with Dominique Reiniche to be nominated as the next chairman.

Top European News

• Speed Trader Hudson River Chooses Dublin as Post-Brexit Home
• Greencore to Sell Troubled U.S. Food Unit for $1.1 Billion
• Frankfurt Trading Resumes After Open Delayed by Technical Glitch
• S&P Upgrade Boosts Zloty and Bonds as EM Woes Threaten Rally

In FX, JPY – The clear G10 outperformer and beneficiary of a downturn in Asia-Pacific stocks as jitters over global trade, protectionism and sanctions undermined sentiment. Usd/Jpy has retreated from 112.25 highs and through 112.00 to a 111.70 low, breaching the 55 DMA at 111.83, while Eur/Jpy is back below 129.50 alongside broadly softer Jpy crosses. From a technical perspective, 111.50 will be eyed next on the downside as a psychological marker and 50% Fib, roughly aligning with daily support around 111.47 plus decent option expiry interest between 111.55-40 (1 bn). GBP – At the opposite end of the spectrum, the Pound has been undermined by a breakdown in talks between the UK and EU just days ahead of the latest scheduled Brexit summit that may now take the form of a no deal meeting given the ongoing Irish border impasse. Cable has managed to regain some composure and recoup losses under 1.3100, but Eur/Gbp is holding above 0.8800 where a hefty expiry lies (1 bn). In EM – The Try remains bid just off 5.8160 peaks vs the Usd on follow-through buying/relief in wake of the release of US Pasto Brunson, while the Rub and Zar are also up vs the Buck (circa 65.6500 and 14.4500) on firm Brent and Gold.

In commodities, Crude and Brent are up 0.6% and 0.9% respectively amidst supply concerns following possible U.S sanctions against Saudi Arabia over missing journalist Khashoggi, which Saudi say they will respond in kind to if implemented. Prices are currently just over USD 71.5/bbl and USD 81/bbl respectively. Additionally, IEA’s Birol stated that high oil prices are hurting consumers and that extra barrels will need to come to the market soon to avoid further tightening. Gold is once again up with mass uncertainty in the market from unproductive Brexit talks, US-China trade war and Italian’s budget deadline day causing investors to move into the safe haven. Global trade tensions have also caused selling pressure in London metals causing prices to slip. Shanghai rebar steel futures climbed to their highest levels in over 3 weeks, boosted by expectations that China’s sustained anti-pollution campaign could further disrupt production.

It’s a quiet start to the week. In the European morning, the only release of note in Europe is Italy’s August general government debt numbers. In the US, we’ll see the October Empire manufacturing release along with September retail sales and August business inventories. Away from the data, ECB vice president Luis de Guindos will speak at an event in Madrid while, Euro-area countries including Italy send final budgets to the EC for approval. Bank of America will report earnings.

US Event Calendar

• Oct. 15-Oct. 18: Monthly Budget Statement, est. $75.0b, prior $7.9b
• 8:30am: Empire Manufacturing, est. 20, prior 19
• 8:30am: Retail Sales Advance MoM, est. 0.6%, prior 0.1%
• 8:30am: Retail Sales Ex Auto MoM, est. 0.4%, prior 0.3%
• 8:30am: Retail Sales Ex Auto and Gas, est. 0.4%, prior 0.2%
• 8:30am: Retail Sales Control Group, est. 0.4%, prior 0.1%
• 10am: Business Inventories, est. 0.5%, prior 0.6%

 

DB’s Jim Reid concludes the overnight wrap

Most of the blame for last week’s market turbulence was the move in yields from the previous week. The support actors have been Italy, the ongoing trade dispute and perhaps a little bit of Brexit uncertainly (of which the news flow hasn’t got much better over the weekend. US bond markets should take most of the responsibility though even if they did rally back a little in the latter part of the week. Given this, its worth highlighting that over the weekend here at DB we have reiterated our 2018 YE 10-year Treasury forecast at 3.50% but edged up the forecast to 3.70% for Q1 2019 and at 3.80% by the end of Q3 2019. By YE 2019 the forecast is back to 3.60% due to the possibility of the house view of potential US rate cuts in H2 2020 being priced in after five more hikes before the end of next year. In addition, 10-year Bunds are expected to be 1.25% by the end of 2019. See the report here for more details.

The key events for this week are the Italian budget being submitted to the EC today, China’s inflation data tomorrow, the latest FOMC minutes on Wednesday, the EU leaders Summit to discuss Brexit on Wednesday and Thursday, China’s monthly data dump on Friday and US earnings season kicking slowly into gear. Brexit headlines here in the UK will likely to be intense all week with negativity being the overriding theme last night as Brexit Secretary Raab travelled to Brussels yesterday to communicate to Michel Barnier that Mrs May couldn’t sign up to what is currently being offered and discussed. Elsewhere, EU’s chief Brexit negotiator Michel Barnier tweeted yesterday that “despite intense efforts, some key issues are still open, including the backstop for IE/NI to avoid a hard border.” The pound has fallen -0.35% in Asian trading as a result. This news followed intense weekend negotiations with many hoping today would see the outline of a deal announced. This seems highly unlikely now and some attention will turn to whether this week’s EU leaders summit will conclude that the November summit should be about preparing for a no-deal Brexit instead of ratifying a successful one. Tomorrow the UK has a cabinet meeting devoted to Brexit so plenty to watch out for. At this point in time I’ve absolutely no idea how this is all going to work out. There are so many immovable obstructions on all sides. However, with all things EU related over the years one learns that until 23.59:59 ticks over to midnight then there’s always a chance of a deal.

Staying with weekend politics, the Bavarian election saw the CSU – German Chancellor Angela Merkel’s coalition partners – see their vote share decline to 37.2% down from 47.7%, marking the worst performance for the CSU since 1950 while the center-left Social Democrats share declined to 9.7% down from 20.6%, marking the worst performance since World War 2. The Greens and AfD’s vote share rose to 17.5% and 10.2%, respectively. Our economists have previously stated that a poor showing for the CSU might trigger a reshuffle of Merkel’s cabinet, i.e., the ousting of Seehofer as Minister of the Interior, fostering better co-operation among the Groko, enhancing the federal government’s efficiency, and shifting the government’s stances, especially on asylum policy and European policy. The exact impact will depend on the CSU’s future coalition partner in Bavaria. Their baseline scenario is for a coalition among the CSU, the Free Voters, and the FDP.

The week has started off with a risk-off tone in Asia, despite last Friday’s rebound in global equities. The Nikkei (-1.30%), Hang Seng (-1.01%), Shanghai Comp (-0.79%) and Kospi (-0.52%) all lower. Elsewhere, futures on S&P 500 (-0.18%) are pointing to a slightly weaker start. Overnight, BoJ Governor Kuroda said that “the amount of JGB purchases is no more the monetary operating target” adding, “It’s only yield curve control.” This further reinforces that the BoJ’s commitment to buy JPY 80tn of JGBs each year is only symbolic now.

Last week was a tough one for risk assets, with most major equity indexes posting their worst week since the February-March sell-off even if Friday ended on a high as we’ll show below. The S&P 500, DOW, and NASDAQ closed -4.10%, -4.19%, and -3.27% lower on the week. Cyclical sectors – industrials, materials, financials, and energy – were the worst-performing sectors, while the safe havens of utilities and consumer staples were the best performers. Small-caps continued their recent trend by lagging behind the broader market, with the Russell 2000 down -5.23%, their worst week since January 2016 and their 7th consecutive week of underperformance versus the S&P 500 – the longest such streak in over a year. The VIX index rose to as high as 28.8 and closed at 21.3, its highest level since April and biggest move since March.

The Euro Stoxx 600 shed -4.64%, roughly in line with the DAX (-4.86%) and CAC (-4.91%), while the FTSEMIB lagged behind (-5.36%). In Asia, the Nikkei and KOSPI shed -4.58% and -4.95%. Chinese bourses were hit hard after being closed for the first week of October, with the CSI 300, Shanghai Composite, and Shenzhen Composite losing -7.60%, -7.80%, and -10.07%, respectively. Broader emerging markets actually held up well over the course of the week, with the MSCI EM index down only -1.35% and EM currencies gaining +0.76%. They were boosted by a soft US CPI print on Wednesday and a generally softer dollar (-0.38%).

On Friday markets found their footing and pared their losses, with the S&P 500, DOW, and NASDAQ gaining +1.42%, +1.15%, and +2.77%, respectively, on the day. Treasury yields resumed their rise, rising +1.5bps on Friday but were still -6.8bps lower on the week. Given the equity sell-off this was a relatively mild rally showing that there does seem to be a structural element to the recent rise in yields. Elsewhere, Bunds outperformed and yields dipped another 2.0bps to take their weekly rally to 7.5bps, while peripheral spreads were mostly wider.

Noise continued to emanate from Italy regarding the budget, but we didn’t get any substantive new information and the sell-off in BTPs (+15.3bps) wasn’t notably more painful than in Spain (+9.7bps) or Portugal (+9.9bps). After the close on Friday, Moody’s upgraded Portugal’s debt to investment grade, though it feels more like the agency catching up to the market than the other way around.

US banks effectively kicked off the third quarter earnings season on Friday, though the results were understandably  overshadowed by the broader market moves. Still, they were mostly positive. Citi posted lower expense than expected while maintaining revenue in line, JP Morgan saw revenues grow a healthy 7% yoy, and Wells Fargo exceeded DB’s expectations on costs despite a headline earnings miss. Bank stocks nevertheless led losses on Friday, with the S&P 500 bank index shedding -0.40% despite the broader rally to end the week -5.43% lower.

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The melting ice cube that is Sears – once a shining beacon of American consumerism – has finally dissolved.

After missing a $134 million Monday debt payment, as was widely expected, CNBC reported early Monday that Sears filed for Chapter 11 Bankruptcy protection in bankruptcy court in White Plains, New York. To be sure, filing for Chapter 11 protection is a victory of sorts for Lampert, who has managed to convince a coterie of Sears’ largest secured creditors, including Bank of America, Citigroup and Wells Fargo, into extending a $300 million debtor-in-possession loan that will allow Sears to continue operating (albeit in an even more limited form) through the end of the year (though, if we had to guess, we’d speculate that Lampert secured the loan by convincing these banks that it was in their best interest to allow Sears management to continue slowly stripping assets from the company instead of resorting to a bankruptcy firesale).

Lampert has also secured another $300 million from outside investment banks (a loan that, we imagine, is backed by Lampert’s assurances that he is shopping for a buyer for Sears’ popular Kenmore appliances brand, though that buyer could end up being ESL, which has the power to forgive Sears debt in exchange for assets).

By staving off Chapter 7 liquidation, Lampert has set up his fund, ESL Investments, as a stalking horse during the bankruptcy auction process. ESL and Lampert own a combined 50% of Sears shares, and ESL is one of its largest creditors. Lampert said Monday that he will step down as Sears CEO but remain on as chairman, while Mohsin Meghji, managing partner of M-III Partners, will step up as the company’s chief restructuring officer.

As part of the bankruptcy, some 142 stores are expected to close by the end of the year, along with 42 that were already in the process of closing, while the company’s remaining 500+ stores will continue operating. 

In a statement to the media, Lampert insisted that was doing everything he could “to help the company” succeed, though analysts have disputed this claim, as most believe Lampert is merely staving off the inevitable to allow his firm enough time to continue stripping assets at the best possible price, allowing ESL (and by extension, Lampert himself) to preserve as much capital as possible.

“Everything I’ve done as an investor has been to help the company succeed,” Lampert said. Though, as CNBC pointed out, many analysts dispute that. Lampert first merged the two struggling discount stores more than a decade ago, hoping to strengthen their market position and, ultimately, save their brands.

As CNBC reminds us, Sears has been in survival mode for more than a decade.

Unable to rely on the Sears’ business to pay the bills, Lampert instead sold or spun off many of its most valuable stores and brands.

Since its merger with Kmart, Sears has spun off its Lands’ End clothing brand, sold the Craftsman tool brand to Stanley Black & Decker and closed hundreds of stores. It spun out 250 of its best properties into real estate investment trust offshoot known as Seritage.

In a jarring reminder of just how far the company had fallen, some vendors, wary of Sears’ future, have demanded tighter payment terms. Others, like Whirlpool, stopped shipping all-together. Until it emerges from protection (or is liquidated), Sears will be run by an Office of the CEO, and independent directors will oversee the restructuring.

According to Bloomberg, the retailer has listed more than $10 billion in debts and more than $1 billion in assets in its filing, and has said it hopes to reorganize around a smaller base of profitable stores. Sears and Kmart stores will remain open with help from $600 million in new loans, but the company will shut 142 unprofitable outlets near the end of the year, on top of 46 unprofitable stores already slated for closure by November.

While liquidation is not currently imminent, like Toys R Us, before it, the retailer’s chances of surviving bankruptcy as a going concern remain slim.

As CNBC points out, it’s difficult for a retailer to make investments that would help secure its survival (like building an e-commerce platform) while making its creditors whole. The company’s last profitable year was in 2010, and last year, it rang up less than $17 billion in sales, half of the roughly $40 billion in revenue it brought in five years earlier. The company has had little free cash to reinvest in strategies that could save the struggling business, and since Lampert took over in 2006 after impressing Wall Street with his successful turnaround of discount retailer K-Mart, an entire generation of Americans have never visited the company’s stores.

And with that, Sears 125-year history is nearing its inglorious end, as the merciless engine of capitalistic creative destruction chugs on and as iguana-eating, online-retailing monopolists have a hearty chuckle at the company that was once upon a time America’s first Amazon.

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Authored by Tsvetana Paraskova via Oilprice.com,

India hasn’t worked out yet a payment system for continued purchases of crude oil from Iran, Subhash Chandra Garg, economic affairs secretary at India’s finance ministry, said on Friday.

India’s Oil Minister Dharmendra Pradhan has conveyed the message that his country would continue to buy Iranian oil to some extent, Garg told CNBC TV18 news channel, as quoted by Reuters.

Recent reports have it that India has discussed ditching the U.S. dollar in its trading of oil with Russia, Venezuela, and Iran, instead settling the trade either in Indian rupees or under a barter agreement.

India is Iran’s second-largest single oil customer after China and was expected to cut back on Iranian oil purchases, but it is unlikely to cut off completely the cheap Iranian oil that is suitable for its refineries.

India wants to keep importing oil from Iran, because Tehran offers some discounts and incentives for Indian buyers at a time when the Indian government is struggling with higher oil prices and a weakening local currency that additionally weighs on its oil import bill.

But the United States continues to insist that it expects Iranian oil buyers to bring their purchases down to zero.

Earlier this week, Indian officials said that they hoped India could secure a waiver from the United States, because it has significantly reduced purchases of Iranian oil. Late last week, the United States hinted that it was at least considering waivers.  

Meanwhile, Special Representative for Iran Brian Hook is currently touring India and Europe to discuss U.S. foreign policy toward Iran, the U.S. Department of State said on Thursday.

Special Representative Hook and Assistant Secretary of State for Energy Resources Francis R. Fannon are will be meeting with Indian government counterparts for consultations.

“During this trip, Special Representative Hook will engage our allies and partners on our shared need to counter the entirety of the Iranian regime’s destructive behavior in the Middle East, and in their own neighborhoods,” the State Department said.

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Ecuador has partially restored Julian Assange’s communications in their London Embassy after UN officials met with Ecuador’s president, Lenin Moreno on Friday, reports the Belfast Telegraph. 

Assange, who has lived in the embassy for over six years, had his phone and internet access taken away in March over political statements he made in violation of “a written commitment made to the government at the end of 2017 not to issue messages that might interfere with other states.” His visitor access was also limited to members of his legal team. 

Ecuador rolls back @JulianAssange isolation after UN meets with president

Background: https://t.co/Mb6gXlz7QShttps://t.co/0UBIVYyKll pic.twitter.com/poFi6nBU4N

— WikiLeaks (@wikileaks) October 14, 2018

“Ecuador has told WikiLeaks publisher Julian Assange that it will remove the isolation regime imposed on him following meetings between two senior UN officials and Ecuador’s President Lenin Moreno on Friday,” WikiLeaks said in a statement. 

Kristinn Hrafnsson, WikiLeaks editor-in-chief, added: “It is positive that through UN intervention Ecuador has partly ended the isolation of Mr Assange although it is of grave concern that his freedom to express his opinions is still limited.

“The UN has already declared Mr Assange a victim of arbitrary detention. This unacceptable situation must end.

“The UK government must abide by the UN’s ruling and guarantee that he can leave the Ecuadorian embassy without the threat of extradition to the United States.” –Belfast Telegraph

Assange, having been granted political asylum by Ecuador, will not leave the embassy out of the belief that he will be arrested by UK authorities and extradited to the United States, where a Clinton-friendly DOJ awaits the arrival of the man Hillary once “joked” about murdering via drone strike. 

WikiLeaks’ statement said that the meetings which resulted in the partial restoration of Assange’s communications were held between President Moreno, the UN high commission for refugees, Filippo Grandi and UN special rapporteur for freedom of expression, David Kaye. 

“Concern over Mr Assange’s situation has also been raised by other UN bodies, as well as Human Rights Watch (who was refused access to him), Amnesty International, the Inter-American Court on Human Rights, Ecuador’s Permanent Human Rights Commission, and public protests,” reads the statement in part. “Mr Assange was informed of Ecuador’s decision hours after Mr Grandi and Mr Kaye met with President Moreno.” 

Mr Assange had critically reported on the Trump administration’s involvement in Yemen and Spanish police brutality. High level representations were made by the Trump administration and the Spanish government over Mr Assange, who was given political refugee status by Ecuador in 2012 over US attempts to prosecute him.

“The Trump administrations stepped up efforts to prosecute Mr Assange after WikiLeaks published the largest leak in the history of the CIA last year.

“The US has announced that it now considers Ecuador a ‘strategic ally’ and helped it secure a billion dollars in previously withheld loans.

“For almost seven months, Ecuador has kept Mr Assange in a regime that has been likened to solitary confinement by Human Rights Watch. Ecuador has prevented Mr Assange from receiving visitors other than his lawyers. It installed three sets of signal jammers in the embassy, to prevent Mr Assange from communicating using mobile phones or internet.

“The extrajudicial seven-month isolation of Mr Assange has interfered with his fundamental rights and the rights of his family. It has also prevented Mr Assange from working and giving public talks.

“Ecuador has also prevented all journalists from speaking to him during this time. Ecuador’s President until last year, Rafael Correa, has denounced Mr Assange’s treatment as ‘torture’ stating ‘the government is basically attacking Julian’s mental health’.

“Ecuador has informed Mr Assange that the government intends to continue Moreno’s policy of restricting him from expressing his opinions under threat of expulsion.” -WikiLeaks

While Assange’s communications have been partially restored, he will still be restricted from expressing controversial opinions under threat of expulsion. 

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Authored by MIke Shedlock via MishTalk,

EU ministers agreed to binding cuts in CO2 emissions of 35% by 2030. The German auto industry won’t be able to deliver.

The Telegraph reports Berlin court orders German capital to ban most diesel vehicles on 11 major roads to counter pollution.

Hamburg was first in May. Stuttgart, home of Mercedes and Porsche, was second in July.

A diesel ban in Frankfurt came third.

Only older cars that do not meet emission standards are banned, but diesel is now toxic. No one wants to buy diesel.

Merkel Can No Longer Protect Car Makers

Adding to the woes, Merkel has lost control. She is no longer able to protect German industry.

The European Parliament just voted to cut CO2 emissions by 40%. The European ministers voted for a 35% reduction. The latter is binding.

Car sales dropped sharply in September.

Eurointelligence on Autos and German Industry

The German government – backed by its usual eastern European allies – fought in vain to head off the tougher standards.

Germany’s environment minister Svenja Schulze deliberately – and astonishingly – weakened her own negotiating position by making clear that her personal preference would have been for tougher targets than those she was officially defending as her government’s position.

An administrative court in Berlin decided yesterday that the city of Berlin needs to ban diesel cars – compliant with Euro norms five and earlier – in important areas of the city, including Friedrichstrasse and Leipziger Strasse. There is no ban for petrol cars as the emissions in question are nitrogen oxide. The ban will have to be implemented by July 2019 at the latest. The plaintiff was a German environmental NGO, which had sued for a city-wide ban of diesel.

Car Sales Plunge

The FT reports that Volkswagen global sales fell by nearly 20% in September as a direct result of the new worldwide light vehicles test procedure, which took effect last month. The fall was expected to some extent, and followed an increase in sales in August. The fall in deliveries in Germany alone was almost 50%,

Sueddeutsche Zeitung quotes the head of VW as saying that the number of jobs in its German factories will fall by 100,000 in the next decade, an estimate we still consider relatively optimistic.

Now that cities are imposing diesel bans, the car industry’s plan B had been to step up production of petrol cars, but this strategy is now double-crossed by the new CO2 emissions targets.

Quota for Electric Cars

FAZ thus calls the decision a quota for electric cars. While this is technically not correct, it has a similar effect. It is a development the German industry had sought to avoid because it is not one in which they have a natural leadership. We would add to that a forecast of our own: the import quota for cars will have to rise substantially for the EU to meet its own emission standards. This will become of the biggest factors driving the inevitable de-industrialisation of Europe – a socio-economic shift which nowadays has widespread political support but for which the EU and its member states are not prepared.

Years Behind the US and China

Germany is years behind the US and China when it comes to producing electric cars.

It is also years behind the US on self-driving cars.

Eventually, Germany will catch up, but that may take many years, if not a decade.

This is what happens to cheaters when politicians can no longer protect them.

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An almost unbelievable accident occurred at a Belgian military air base days ago which involved one F-16 jet destroying two others — all while stationary on the ground. 

Stunning photos of the aftermath show a completely destroyed Belgian Air Force F-16 fighter and another severely damaged one after a third fired its M61A1 Vulcan 20mm cannon across the flight line while parked. “You can’t help thinking of what a disaster this could have been,” base commander Col. Didier Polome told a Belgian television news station in the aftermath.

The incident happened last Friday at Florennes Air Base in Southern Belgium during routine maintenance of the jet that fired, and reportedly involved the crew servicing an F-16 accidentally triggering the heavy aircraft cannon.

The Aviationist reports the following of what is being described as a “bizarre accident“: 

Multiple reports indicate that a mechanic servicing the parked aircraft accidentally fired the six-barreled 20mm Vulcan cannon at close range to two other parked F-16s. Photos show one F-16AM completely destroyed on the ground at Florennes. Two maintenance personnel were reported injured and treated at the scene in the bizarre accident.

The aircraft being serviced had just been refuelled and had its six barrel cannon loaded as it was being prepped for an afternoon training mission. 

The impact of the 20mm bullets on the other aircraft, which the crew said was just out of eyesight, caused the jet that was struck to explode instantly, according to reports. 

A report on the monitoring website F-16.net described that, “An F-16 (tail number FA-128) was completely destroyed while a second F-16 received collateral damage from the explosions. Two personnel were wounded and treated at the scene. Injuries sustained were mainly hearing related from the explosion.”

Thick black smoke could be seen for miles around the area, to which scores of emergency personnel were immediately dispatched. 

According to a defense analysis source, Belgium currently has 60 active F-16 aircraft, including 48 on duty for NATO.

The Aviationist describes the exceedingly bizarre nature of the incident, which sounds like something one would see in an over the top Hollywood movie scene:

The accident is quite weird: it’s not clear why the technician was working on an armed aircraft that close to the flight line. Not even the type of inspection or work has been unveiled. For sure it must have been a check that activated the gun even though the aircraft was on the ground: the use of the onboard weapons (including the gun) is usually blocked by a fail-safe switch when the aircraft has the gear down with the purpose of preventing similar accidents.

But clearly there were no fail-safes that prevented this strange incident involving a hail of ground fire across a runway. 

Scramble Magazine published the following photo showing how the aircraft are usually aligned, and delineated the angle of the cannon fire.

Belgium’s Ministry of Defense announced it has launched a formal investigation into the incident. The F-16 fighters cost around $20 million a piece — so the price tag for Friday’s accident is going to be quite steep. 

To our knowledge the incident was not caught on film, or at least it hasn’t been released to the public. 

However, to visualize how devastating the 20mm Vulcan cannon is, especially at close range, here’s some test footage of the ultra-rapid aircraft mounted machine gun at work:

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Via The Strategic Culture Foundation,

The US, Britain and other NATO allies upped the ante this week with a coordinated campaign of information war to criminalize Russia. Moscow dismissed the wide-ranging claims as “spy mania”. But the implications amount to a grave assault recklessly escalating international tensions with Russia.

The accusations that the Kremlin is running a global cyberattack operation are tantamount to accusing Russia of “acts of war”. That, in turn, is creating a pretext for NATO powers to carry out “defensive” actions on Moscow, including increased economic and diplomatic sanctions against Russia, as well as “counter” cyberattacks on Russian territory.

This is a highly dangerous dynamic that could ultimately lead to military confrontation between nuclear-armed states.

There are notably suspicious signs that the latest accusations against Russia are a coordinated effort to contrive false charges.

First, there is the concerted nature of the claims. British state intelligence initiated the latest phase of information war by claiming that Russian military intelligence, GRU, was conducting cyberattacks on infrastructure and industries in various countries, costing national economies “millions of pounds” in damages.

Then, within hours of the British claims, the United States and Canada, as well as NATO partners Australia and New Zealand followed up with similar highly publicized accusations against Russia. It is significant that those Anglophone countries, known as the “Five Eyes”, have a long history of intelligence collaboration going back to the Cold War years against the Soviet Union.

The Netherlands, another NATO member, added to the “spy mania” by claiming it had expelled four members of Russian state intelligence earlier this year for allegedly trying to hack into the headquarters of the Organization for the Prohibition of Chemical Weapons (OPCW), based in The Hague.

There then followed predictable condemnations of Russia from the NATO leadership and the European Union. NATO was holding a summit in Brussels this week. It is therefore plausible that the timing of the latest claims of Russian “malign activity” was meant to coordinate with the NATO summit.

More sanctions against Moscow are expected – further intensifying tensions from already existing sanctions. More sinister were NATO warnings that the military alliance would take collective action over what it asserts are Russian cyberattacks.

This is creating a “casus belli” situation whereby the 29 NATO members can invoke a common defense clause for punitive actions against Russia. Given the rampant nature of the claims of “Russian interference” and that certain NATO members are rabidly Russophobic, it is all too easily dangerous for cyber “false flags” to be mounted in order to criminalize Moscow.

Another telltale factor is that the claims made this week by Britain and the other NATO partners are an attempt to integrate all previous claims of Russian “malign activity”.

The alleged cyber hacking by Russia, it is claimed, was intended to disrupt OPCW investigations into the purported poison-assassination plot against Sergei Skripal, the former Russian spy living in Britain; the alleged hacking was also claimed to be aimed at disrupting investigations into alleged chemical weapons atrocities committed by the Syrian government and by extension Syria’s ally Russia; the alleged Russian hacking claims were also linked to charges of Olympic athletes doping, as well as “interference in US elections”; and even, it was asserted, Russia trying to sabotage investigations into the downing of the Malaysian civilian airliner over Ukraine in 2014.

Up to now, it seems, all such wildly speculative anti-Russia narratives have failed to gain traction among world public opinion. Simply due to the lack of evidence to support these Western accusations. The Skripal affair has perhaps turned into the biggest farce. British government claims that the Kremlin ordered an assassination have floundered to the point of ridicule.

It is hardly coincidence that Britain and its NATO allies are compelled to shore up the Skripal narrative and other anti-Russian narratives with the ramped up “global cyberattack” claims made this week.

Photographs of alleged Russian intelligence operatives have been published. Potboiler indictments have been filed – again – by US law enforcement agencies. Verdicts have been cast by NATO governments and compliant news media of Russian state culpability, without Moscow being given a fair chance to respond to the “highly likely” claims. Claims and narratives are being accelerated, integrated and railroaded.

It is well-established from the explosive disclosures by Edward Snowden, among other whistleblowers, that the American CIA and its partners have the cyber tools to create false “digital fingerprints” for the purpose of framing up enemies. Moreover, the vast cyber surveillance operations carried out by the US and its “Five Eyes” partners – much of which is illegal – is an ironic counterpoint to accusations being made against Russia.

It is also possible in the murky world of all foreign states conducting espionage and information-gathering that attribution of wrongdoing by Russia can be easily exaggerated and made to look like a campaign of cyberattacks.

There is a lawless climate today in the US and other Western states where mere allegations are cited as “proof”. The legal principle of being innocent until proven guilty has been jettisoned. The debacle in the US over a Supreme Court judge nominee is testament to the erosion of due process and legal standards.

But what is all the more reprehensible and reckless is the intensification of criminalization of Russia – based on flimsy “evidence” or none at all. When such criminalization is then used to “justify” calls for a US-led naval blockade of Russian commercial oil trade the conditions are moving inevitably towards military confrontation. The blame for belligerence lies squarely with the NATO powers.

A further irony is that the “spy mania” demonizing Russia is being made necessary because of the wholly unsubstantiated previous claims of Moscow’s malfeasance and “aggression”. Illusions and lies are being compounded with yet more bombastic, illusory claims.

NATO’s information war against Russia is becoming a self-fulfilling “psy-op”. In the deplorable absence of normal diplomatic conduct and respect for international law, NATO’s information war is out of control. It is pushing relations with Russia to the abyss.

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Are you a diligent US-based worker who’s tired of watching inflation wipe out what little wage gains you’ve managed to scrape together over the past few years? Well, if you’re looking for a pay boost, but don’t want to go through all the trouble of finding another better-paying job, Bloomberg has a suggestion: Try moving to Singapore.

According to HSBC’s annual Expat Explorer, 45% of expats reported earning more money working abroad than they did working in the US. For the average expat, moving abroad boosted their pay by 21%, with the highest-paying jobs found in the US, Singapore and Hong Kong.

Expats living in Switzerland, notorious for its high cost of living, reported an annual income boost totaling $61,000. Salaries averaged $203,000 per year, twice the global level. 

Meanwhile, Singapore was ranked best place to live and work for a fourth straight year, ahead of New Zealand, Germany and Canada, while Switzerland (probably because of the high cost of living mentioned above) ranked eighth.

“Singapore packs everything a budding expat could want into one of the world’s smallest territories,” said John Goddard, head of HSBC Expat.

Sweden won first place in the ‘family’ category, while New Zealand, Spain and Taiwan led the ‘experience’ category.

If moving abroad has always been a personal dream, then HSBC can name myriad benefits – both financial and familial – that often accompany expat status. However, the report had its blemishes. For example, the survey of 22,318 people showed that women often trailed behind men in terms of the level of benefit they experienced. For example, relocating only boosted a woman’s income by 27%, compared with 47% for men (apparently, HSBC found, the fabled wealth gap exists outside the confines of the US).

But the bank also found several justifications for this that had nothing to do with women being paid less for doing the same exact job. Just half the women surveyed worked full time, and the average level of education was lower for women than for men.

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Authored by Finian Cunningham via The Strategic Culture Foundation,

The macabre case of missing journalist Jamal Khashoggi raises the question: did Saudi rulers fear him revealing highly damaging information on their secret dealings? In particular, possible involvement in the 9/11 terror attacks on New York in 2001.

Even more intriguing are US media reports now emerging that American intelligence had snooped on and were aware of Saudi officials making plans to capture Khashoggi prior to his apparent disappearance at the Saudi consulate in Istanbul last week. If the Americans knew the journalist’s life was in danger, why didn’t they tip him off to avoid his doom?

Jamal Khashoggi (59) had gone rogue, from the Saudi elite’s point of view. Formerly a senior editor in Saudi state media and an advisor to the royal court, he was imminently connected and versed in House of Saud affairs. As one commentator cryptically put it: “He knew where all the bodies were buried.”

For the past year, Khashoggi went into self-imposed exile, taking up residence in the US, where he began writing opinion columns for the Washington Post.

Khashoggi’s articles appeared to be taking on increasingly critical tone against the heir to the Saudi throne, Crown Prince Mohammed bin Salman. The 33-year-old Crown Prince, or MbS as he’s known, is de facto ruler of the oil-rich kingdom, in place of his aging father, King Salman.

While Western media and several leaders, such as Presidents Trump and Macron, have been indulging MbS as “a reformer”, Khashoggi was spoiling this Saudi public relations effort by criticizing the war in Yemen, the blockade on Qatar and the crackdown on Saudi critics back home.

However, what may have caused the Saudi royals more concern was what Khashoggi knew about darker, dirtier matters. And not just the Saudis, but American deep state actors as as well.

He was formerly a media aide to Prince Turki al Faisal, who is an eminence gris figure in Saudi intelligence, with its systematic relations to American and British counterparts. Prince Turki’s father, Faisal, was formerly the king of Saudi Arabia until his assassination in 1975 by a family rival. Faisal was a half-brother of the present king, Salman, and therefore Prince Turki is a cousin of the Crown Prince – albeit at 73 more than twice his age.

For nearly 23 years, from 1977 to 2001, Prince Turki was the director of the Mukhabarat, the Saudi state intelligence apparatus. He was instrumental in Saudi, American and British organization of the mujahideen fighters in Afghanistan to combat Soviet forces. Those militants in Afghanistan later evolved into the al Qaeda terror network, which has served as a cat’s paw in various US proxy wars across the Middle East, North Africa and Central Asia, including Russia’s backyard in the Caucasus.

Ten days before the 9/11 terror attacks on New York City, in which some 3,000 Americans died, Prince Turki retired from his post as head of Saudi intelligence. It was an abrupt departure, well before his tenure was due to expire.

There has previously been speculation in US media that this senior Saudi figure knew in advance that something major was going down on 9/11. At least 15 of the 19 Arabs who allegedly hijacked three commercial airplanes that day were Saudi nationals.

Prince Turki has subsequently been named in a 2002 lawsuit mounted by families of 9/11 victims. There is little suggestion he was wittingly involved in organizing the terror plot. Later public comments indicated that Prince Turki was horrified by the atrocity. But the question is: did he know of the impending incident, and did he alert US intelligence, which then did not take appropriate action to prevent it?

Jamal Khashoggi had long served as a trusted media advisor to Prince Turki, before the latter resigned from public office in 2007. Following 9/11, Turki was the Saudi ambassador to both the US and Britain.

A tentative idea here is that Khashoggi, in his close dealings with Prince Turki over the years, may have gleaned highly sensitive inside information on what actually happened on 9/11. Were the Arab hijackers mere patsies used by the American CIA to facilitate an event which has since been used by American military planners to launch a global “war on terror” as a cover for illegal wars overseas? There is a huge body of evidence that the 9/11 attacks were indeed a “false flag” event orchestrated by the US deep state as a pretext for its imperialist rampages.

The apparent abduction and murder last week of Jamal Khashoggi seems such an astoundingly desperate move by the Saudi rulers. More evidence is emerging from Turkish sources that the journalist was indeed lured to the consulate in Istanbul where he was killed by a 15-member hit squad. Reports are saying that the alleged assassination was ordered at the highest level of the Saudi royal court, which implicates Crown Prince MbS.

Why would the Saudi rulers order such a heinous act, which would inevitably lead to acute political problems, as we are seeing in the fallout from governments and media coverage around the world?

Over the past year, the House of Saud had been appealing to Khashoggi to return to Riyadh and resume his services as a media advisor to the royal court. He declined, fearing that something more sinister was afoot. When Khashoggi turned up in Istanbul to collect a divorce document from the Saudi consulate on September 28, it appears that the House of Saud decided to nab him. He was told to return to the consulate on October 2. On that same day, the 15-member group arrived from Riyadh on two private Gulfstream jets for the mission to kill him.

Official Saudi claims stretch credulity. They say Khashoggi left the consulate building unharmed by a backdoor, although they won’t provide CCTV images to prove that. The Turks say their own CCTV facilities monitoring the front and back of the Saudi consulate show that Khashoggi did not leave the premises. The Turks seem confident of their claim he was murdered inside the building, his remains dismembered and removed in diplomatic vehicles. The two private jets left the same day from Istanbul with the 15 Saudis onboard to return to Riyadh, via Cairo and Dubai.

To carry out such a reckless act, the Saudis must have been alarmed by Khashoggi’s critical commentaries appearing in the Washington Post. The columns appeared to be delivering more and more damaging insights into the regime under Crown Prince MbS.

The Washington Post this week is reporting that US intelligence sources knew from telecom intercepts that the Saudis were planning to abduct Khashoggi. That implicates the House of Saud in a dastardly premeditated act of murder.

But furthermore this same disclosure could also, unwittingly, implicate US intelligence. If the latter knew of a malicious intent towards Khashoggi, why didn’t US agents warn him about going to the Saudi consulate in Istanbul? Surely, he could have obtained the same personal documents from the Saudi embassy in Washington DC, a country where he was residing and would have been safer.

Jamal Khashoggi may have known too many dark secrets about US and Saudi intel collusion, primarily related to the 9/11 terror incidents. And with his increasing volubility as a critical journalist in a prominent American news outlet, it may have been time to silence him. The Saudis as hitmen, the American CIA as facilitators.

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