Category: zerohedge

Out with the old, in with the new…

Just hours before the end-of-month deadline, US trade rep Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland announced last night that Canada and the US had successfully agreed on a sweeping revision of the Nafta trade accord (an agreement that had been reached with Mexico’s outgoing PRI government weeks ago), maneuvering the final leg of the new trilateral deal, which will henceforth be known as the US-Mexico-Canada Agreement, or USMCA, into place. The US heralded the deal by proclaiming that it would mean “freer markets, fairer trade and robust economic growth.” After both President Trump and Canadian Prime Minister reportedly approved the agreement, markets rejoiced, sparking rallies in the loonie, Mexican peso and US stock futures.

The preliminary terms reflected a resolution of the dairy-market problem, which had proved to be an intractable point of contention, with Canada offering access to roughly 3.5% of domestic dairy market to the US and will agree to a vehicle export quota of 2.6 million vehicles that could be exported to the US tariff free or near tariff free. Meanwhile, as reported previously, the Chapter 19 dispute resolution process – something that Canada demanded be preserved in the final accord – will remain unchanged.

Given that, in the Trump era, nothing is done until it’s done, Trump lauded the agreement on Twitter Monday morning, saying it would correct “deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world.”

Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico. The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many……

— Donald J. Trump (@realDonaldTrump) October 1, 2018

….deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world. The USMCA is a historic transaction!

— Donald J. Trump (@realDonaldTrump) October 1, 2018

Congratulations to Mexico and Canada!

— Donald J. Trump (@realDonaldTrump) October 1, 2018

To be sure, Congress must still approve the deal, which they are widely expected to do now that Canada has been brought on board. According to media reports, lawmakers would have resisted any deal that didn’t involve Canada. But with markets rejoicing on the news, we can’t help but wonder how much longer the resolution of this trade dispute will keep stocks elevated when a full blown US-China trade war is increasingly being factored into “baseline” expectations.

via RSS https://ift.tt/2zINz4I Tyler Durden

With China on holiday this week, traders had fewer distractions and more time to focus on the main overnight event, namely the last minute deal between the US and Canada to reconstitute NAFTA (or USMCA as Trump now calls it) and what it would mean for trade relations, which sent US equity futures soaring to just shy of all time highs…

… and helped world markets kick off the fourth quarter of the year in a positive vein, overcoming lingering concerns about Italian politics and a slowdown in Chinese manufacturing over the weekend.

Last on Sunday, the US and Canada said in an official statement that they have reached a trade deal with Mexico in an agreement dubbed the USMCA (US-Mexico-Canada Agreement). US President Trump is to sign the new trade agreement by the end of November, which will then get passed on to Congress.

Canada agreed to eliminate the “Class 7” milk protein pricing system and increase US access to Canada’s dairy market beyond Trans-Pacific partnership levels. The New trade deal does not make major changes to current Chapter 19 trade dispute settlement mechanism which gives the three countries the right to challenge each other’s anti-dumping and countervailing duty decisions in front of an expert panel with members from both countries involved in a dispute. US said the trade deal with Canada does not affect US steel and aluminium tariffs currently levied on Canada, and that these tariffs are separate to the trilateral deal. A Senior Trump Administration official said if Trump imposes auto tariffs, both Mexico and Canada will be accommodated in “side letters”.

The deal was the latest “feather in the cap” for U.S. trade negotiator Robert Lighthizer, who has advocated a tough line towards China, compared with Treasury Secretary Steven Mnuchin.

The news sent the Canadian dollar up 0.65% against the dollar to a four-month high while the Mexican peso hit its highest in over seven weeks.

“The trade deal is helping risk appetite across the board, especially the Canadian dollar, and that will likely lift appetite for emerging-market currencies across the board,” said Manuel Oliveri, a currency strategist at Credit Agricole in London.

The breakthrough also supported global equity markets, with European stocks climbing as havens including the yen and gold fell. The Stoxx Europe 600 Index rose for the fourth day in the last five, led by technology and chemicals companies, ignoring the latest political noise in Italy, where an unconfirmed report in the media suggested that the EU would reject Italy’s 2.4% budget deficit proposal in November and open a procedure against the country’s public accounts which extended the selloff in Italian bonds from last week.

EU Commissioner Dombrovskis said what emerges so far from discussions in Italy does not seem to be in line with EU fiscal rules, he added it’s important to stick to responsible fiscal policy to keep interest rates low. The Dutch PM has also expressed his concerns over the Italian budget plan. Meanwhile, Italy’s Finance Minister Tria is attempting to head off a confrontation between the EU and Italy that by insisting that the country will reduce public debt despite its plans to increase spending.

“It is quite clear that the European Commission will not like (the budget proposal),” said Commerzbank rates strategist Michael Leister. “Brussels will give its opinion, which we think won’t be positive and … the ratings agencies will opt for a similar stance. A downgrade is our base case.”

The euro was initially hit by worries about Italy’s fiscal deficit, dropping below the $1.16 mark having lost 1.2 percent last week and off three-month high of $1.18155 touched a week ago; however it since rebounded and was trading virtually unchanged, just above 1.16 at last check.

Investors will also be closely watching the market impact from the latest ECB tapering: the central bank will cut its monthly bond purchases in half to €15 billion starting this month, with a full phase out expected by year end. However the euro edged up, shrugging off data showing growth in euro-area factory output slid to the weakest pace in two years, on the back of renewed dollar weaknss.

With China, Australia and Hong Kong out on vacation, attention focused on Japan where the Nikkei 225 Average closed at its highest level in nearly 27 years amid muted trading as much of Asia was on holiday.

Also casting a shadow were two surveys on Sunday that showed growth in Chinese manufacturing sputtered in September as domestic and export demand softened. As a result, the MSCI’s index of Asia-Pacific shares outside Japan fell 0.25 percent.

In rates, Treasury 10-year yields advanced to 3.09%, wiping out all the TSY gains since last week’s Fed meeting.

Investors will also be keenly focused on Tesla after Elon Musk’s agreement with U.S. regulators; the shares soared 16% in pre-market after Musk agreed to resign as chairman for three years and pay a fine, he would however keep his job as CEO.

Oil prices held their gains, with international benchmark Brent briefly hitting a four-year high, as U.S. sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production. Brent crude futures rose 0.6% to as high as $83.25 per barrel, the highest since November 2014, before trading flat on the day at $82.72.

In the latest Brexit news, UK PM May said the Chequers plan is not dead, while added she is prepared to listen to EU counter-proposals but she wants to hear the details of EU’s concerns, and EU leaders want a deal just as she does. She said she believes Chequers will not destroy the single market and a Canada-style deal is not on the table for EU. In the interview, she refused to answer whether a no-deal Brexit will mean a hard border in Ireland. Note: BBC’s Andrew Marr noted a no-deal under WTO would result in a hard border. May, in a Sunday Times interview, told Tory rebels to “stop playing politics” and the only proposal on the table at the moment that delivers, is the Chequers plan, while she reiterated that no deal is better than a bad deal but she thought a good deal could be reached. She also challenged the EU to come forward with a counter proposal. Meanwhile, former UK Foreign Secretary Boris Johnson has refused to rule out a leadership challenge to UK PM May. Furthermore, in an interview with The Sunday Times, Johnson questioned whether UK PM May believes in Brexit and branded her Chequers plan “deranged”.

In geopoliticsNorth Korea’s Foreign Minister announced that North Korea would not take the first steps towards denuclearisation without further
guarantees from the US. He also warned of the increasing mistrust between Pyongyang and Washington DC. (Telegraph)
Russian Foreign Affairs Minister Lavrov said everything possible will be done to preserve Iran nuclear deal.

Expected data includes manufacturing PMI and construction spending. Cal-Maine and Stitch Fix are among companies reporting earnings.

Market Snapshot

• S&P 500 futures up 0.6% to 2,937.00
• STOXX Europe 600 up 0.3% to 384.27
• MXAP down 0.2% to 164.98
• MXAPJ down 0.2% to 524.93
• Nikkei up 0.5% to 24,245.76
• Topix up 0.04% to 1,817.96
• Hang Seng Index up 0.3% to 27,788.52
• Shanghai Composite up 1.1% to 2,821.35
• Sensex up 0.2% to 36,285.78
• Australia S&P/ASX 200 down 0.6% to 6,172.26
• Kospi down 0.2% to 2,338.88
• German 10Y yield rose 2.4 bps to 0.494%
• Euro down 0.05% to $1.1598
• Italian 10Y yield rose 25.4 bps to 2.781%
• Spanish 10Y yield rose 1.5 bps to 1.515%
• Brent futures up 0.2% to $82.91/bbl
• Gold spot down 0.4% to $1,186.65
• U.S. Dollar Index little changed at 95.10

Top Overnight News

• Trump is set to sign a successor to NAFTA that will make modest revisions to a deal he once called a “disaster,” easing uncertainty for companies reliant on tariff-free commerce; the new accord will be named the United States-Mexico-Canada Agreement, or USMCA
• Growth in euro-area factory output slid to the weakest pace in two years as the spillover from trade wars is starting to dent demand. IHS Markit’s Purchasing Managers’ Index for manufacturing slowed to 53.2 in September, down from 54.6 in August, and below a previous flash estimate of 53.3
• U.K. Prime Minister Theresa May faces the battle of her political life to retain control of the governing Conservative Party as top Tory politicians undermined her leadership. After arch rival Boris Johnson went for the jugular, Chancellor Philip Hammond swept in to defend her in an increasingly chaotic political scene
• Italian Finance Minister Giovanni Tria is certain to face questions about the nation’s 2019 spending plan even though it’s not on Monday’s Eurogroup agenda in Luxembourg
• Royal Dutch Shell Plc and its four partners have agreed to invest in a $31 billion LNG project in Canada
• Two- thirds of business economists in the U.S. expect a recession to begin by the end of 2020, while a plurality of respondents say trade policy is the greatest risk to the expansion, according to a new survey
• China’s official manufacturing PMI stood at 50.8 in September versus 51.3 in August, lower than the median analyst estimate of 51.2. Meanwhile, the Caixin manufacturing PMI, which better reflects sentiment among smaller, private firms, declined to 50 from 50.6, the lowest since May 2017

Asian stocks traded mixed following a rather uneventful lead from Wall St. on Friday where major bourses ended the day little changed as markets wrapped up a strong quarter where the S&P showed it best quarterly gain since Q4 2013. ASX 200 (-0.6%) underperformed amid a slowdown in China’s manufacturing sector shown by the Caixin data, while Nikkei 225 (+0.5%) was buoyed on currency effect in a continued weakness of the JPY following a downbeat Tankan release and Manufacturing PMI. Elsewhere, Hong Kong and Mainland China are closed today due to public holidays. Indonesia’s island Sulawesi was hit by a 7.5 magnitude earthquake, which triggered a 6m (20ft) tsunami that hit the cities of Palu and Donggala. Officials have confirmed the death toll rose to over 800.

Top Asian News

• India Seeks Court Approval to Take Control of Indebted Financier

European equities have started the day on the front foot, with the FTSE the laggard, as a slightly bid GBP is weighing on the index. The consumer discretionary sector is the marked underperformer as RyanAir (-8.7%) cutting guidance due to lower than expected Q2 and Q3 traffic has hit European airline stocks, with all of Air France (-2.5%), EasyJet (-3.0%) and Lufthansa (-1.0%) in the red. Linde (+1.2%) is leading the gains in Germany and has supported the DAX to near the top of the index pile after receiving antitrust approval from China for their Praxair merger. The FTSE MIB is the outperforming index as Italian stocks are seeing some reprieve from last week’s sell off. Index heavyweight Telecom Italia (-1.5%) are, however, in the red after a broker downgrade at Barclays.

Top European News

• Danske Names Interim CEO as Borgen ‘Relieved of His Duties’
• May Faces Tory Fire Over Brexit as Hammond Attacks Boris Johnson
• Swiss Private Banks Urged to Partner in a ‘Complex’ World
• U.K. Manufacturing Growth Unexpectedly Accelerates in September

In FX, the Loonie has leapt to the top of the G10 leader board, and aside from testing resistance round 1.2800 vs its US counterpart that Cad is bid and outperforming right across the board. The clear catalyst is a somewhat unexpected  pre-‘deadline’ deal between the US and Canada on a new style NAFTA deal that will include Mexico and be renamed as USMCA. Looking at technicals, if Usd/Cad breaches 1.2800 and remains below multi-month chart support around 1.2813-19, that includes a 50% Fib, nearest or next downside targets are seen circa 1.2730, 1.2685 and even 1.2500, while from a more fundamental perspective comments from BoC’s Lane later may impact. JPY/CHF – The clear underperformers, as Usd/Jpy continues to break higher and just climbed above 114.00 following dips in Japan’s Q3 Tankan survey and September manufacturing PMI, while Usd/Chf remains within 0.9845-00 parameters in wake of a less robust Swiss manufacturing PMI that overshadowed a recovery in retail sales. EUR/NZD/AUD – All relatively flat or narrowly mixed vs the Greenback, with the single currency pivoting 1.1600 amidst somewhat divergent Eurozone manufacturing PMIs and reports suggesting that the EU will register its objection to Italy’s proposed 2.4% 2019 budget (in November, according to sources). Note also, the spill-over from SOMA may well weigh on the headline pair at some stage. EM – The Peso and Lira are heading the regional pack, with Usd/Mxn testing bids around 18.5000 on the aforementioned NAFTA breakthrough to include all 3 countries in a new pact, while Usd/Try has made a more convincing break below the 6.0000 handle as healthy or at least encouraging Turkish trade data offset a disappointing manufacturing PMI (former boosted by exports vs latter deeper in sub-50 territory).

In commodities, the oil market is uneventful this morning and seeing a lack of newsflow for the fossil fuel, with Brent  essentially unchanged for the day and hanging just below the USD 83.00 handle after last week’s rise to over 4 year highs. A  senior Iranian Oil Official said they have no plans to reduce oil production. Most metals are in the red this morning with zinc and copper down by over 1% and gold down by 0.5% as the week-long holiday in China is hitting demand.

It’s a busy start to the week for data on Monday. The main focus should be the final September manufacturing PMI revisions in Japan, Europe – with a first look at the data for the periphery – and the US. Also due is the August unemployment rate for the euro area and money and credit aggregates data for the UK, while in the US we’ll also get the September ISM manufacturing and September vehicle sales data.

US Event Calendar

• 9:45am: Markit US Manufacturing PMI, est. 55.6, prior 55.6
• 10am: Construction Spending MoM, est. 0.4%, prior 0.1%
• Wards Total Vehicle Sales, est. 16.8m, prior 16.6m

DB’s Jim Reid concludes the overnight wrap

The final September PMI revisions around the world will also be closely watched. Today sees the final manufacturing revisions – including of course a first look at the periphery in Europe where Italy in particular is expected to show little improvement from the 50.1 reading in August – while the final services and composite revisions will be seen on Wednesday. Away from that today sees the September ISM manufacturing in the US. In China we had the September PMIs released over the weekend with the main story being weakness in the manufacturing sector. Indeed both the official (50.8 vs. 51.2 expected) and Caixin manufacturing readings (50.0 vs. 50.5 expected) fell more than expected last month, indicative perhaps of fallout from the trade war. There was better news from the non-manufacturing sector however (54.9 vs. 54.0 expected).

Meanwhile the UK Conservative party conference kicked off yesterday. In a BBC interview yesterday morning PM May indicated that the Chequers plan is still her offer with regards to a Brexit deal. Today sees Brexit Secretary Dominic Raab and Chancellor Philip Hammond speak. Wednesday sees PM May close out the event. Our economists expect May to take a hard line on Brexit to keep the rank and file happy.

Overnight the main news is that of a deal struck between the US and Canada to a NAFTA replacement which includes Mexico. The new deal, which is expected to be signed by the end of November, is to be called the US-Mexico-Canada agreement, or USMCA. The deal includes ground-breaking intellectual property provisions, new provisions in unfair trade practices, new market access for dairy producers and stronger labour provisions. Unsurprisingly the Mexican Peso (+0.65%) and Canadian Dollar (+0.51%) are the big early movers in FX markets while US equity futures are up +0.50%. With China out trading volumes are thinner than usual and the rest of markets in Asia are more mixed (Nikkei +0.43%, Kospi -0.27%).

Back to last week and the Italian budget dominated market attention on Friday. There wasn’t much fresh newsflow on Friday and over the weekend aside from some verbal sparring including comments from Central Bank Governor Visco warning about the need to reduce Italy’s debt burden. The new additional info early on Friday was that the 2.4% deficit would be for each of the next three years although Cabinet Undersecretary Giorgetti did tell La Republica over the weekend that there could be some flexibility in that. BTPs reacted reasonably rationally in that our strategists model based on twin deficits suggested that a 2.4% deficit should increase spreads by 15-35bps on Friday. They closed 25.7bps higher but were nearly 40bps higher by late morning. It was still the biggest move and widest range since the May selloff. Two-year yields rose 24.7bps and were around 40bps at the highs for the day. Perhaps confirmation that Tria is staying helped settle the market down in the afternoon. Tria reiterated his plans to stay over the weekend and did say that debt should fall one percentage point over each of the next 3 years. However this is based on his growth forecasts of 1.6% and 1.7% in 2019 and 2020. To put this into some perspective DB’s forecasts for Italian growth in 2019 has been 0.9%. Mark Wall suggests that if normal fiscal multipliers apply then Italy could get a 0.5% boost but with crowding out due to higher yields it will likely be less. He also made the point that there’s no sign of any structural reforms that would increase growth. So it’s unlikely that debt will fall.

Back to Friday and Bunds rallied on the risk-off flows, with 10-year yields falling 5.8bps, the most since May. Italian equities also underperformed sharply, with the FTSEMIB shedding -3.72% versus the Euro Stoxx 600’s -0.83% fall. European banks led declines (-3.92%), and Italian banks in particular had a terrible day (-7.26%), their worst since the post-Brexit carnage of June 2016.

Looking ahead over the next weeks and months, the reactions to the Italian budget from the European Commission and from ratings agencies will be key. The Commission has the power to request budget changes and can impose sanctions in the event of noncompliance, and the Economic Affairs Commissioner Pierre Moscovici has already signaled that the current plan looks like it is “out of line with our rules.” The three major ratings agencies all place Italy two notches above speculative-grade, and there are risks of downgrades next month.

After the Fed hike week 10yr Treasury yields ended the week close to flat (+0.9bps Friday), though the 2s10s curve flattened back to within 5.6bps of its cyclical low. The dollar rallied +0.97% on the week, with most gains coming against the euro, as the single currency sold off at the end of the week around the Italy headlines (-0.32% Friday). Emerging market currencies gained +0.52% last week with the Turkish Lira (+3.83%) and Russian Ruble (+1.35%) outperforming, while Argentine Peso shed -9.89% to reach its weakest-ever level versus the dollar.

While European equities uniformly retreated amid the Italy drama (Stoxx 600 -0.83% Friday, -0.29% on week), other global bourses were more mixed. The S&P 500 and DOW retreated -0.54% and -1.07%, respectively over the 5 days, while the tech-heavy NASDAQ advanced +0.74%. The latter was on track for even higher gains before Facebook shed -2.59% on Friday after news broke that a security issue had compromised data on some 50 million Facebook users. Equities in Asia mostly advanced on the week with the Nikkei and Shanghai Composite gaining +1.05% and +0.85%, respectively. Brent Crude oil advanced +4.97% to its highest level since 2014, closing above $82 per barrel.

After Thursday’s bumper German CPI, the euro area aggregate CPI missed expectations on Friday, with the core reading falling to 0.9% yoy versus expectations for 1.1%. So, some inflation softness in the periphery of the euro area. Core US PCE inflation modestly missed expectations for August on Friday at 0.0% mom, though the yoy figure stayed steady at the Fed’s target of 2.0%.

It’s a busy start to the week for data on Monday. The main focus should be the final September manufacturing PMI revisions in Japan, Europe – with a first look at the data for the periphery – and the US. Also due is the August unemployment rate for the euro area and money and credit aggregates data for the UK, while in the US we’ll also get the September ISM manufacturing and September vehicle sales data. Away from that the BoE’s Tenreyro and Fed’s Bostic, Kashkari and Rosengren will all be speaking at various times. Worth noting also is that Monday marks the final day of debate at the UN General Assembly, while euro area finance ministers will also meet in Luxembourg to discuss ‘national automatic stabilisers’.

via RSS https://ift.tt/2IsO4Tj Tyler Durden

Barely an hour after California Gov. Jerry Brown signed what’s widely believed to be the toughest net neutrality law ever enacted in the US, the US DOJ announced that it would sue California to invalidate the new law, setting up yet another showdown between the federal government and the largest state in the union.

According to the Washington Post, California has become the largest state to adopt its own rules requiring Internet providers like AT&T, Comcast and Verizon to treat all web traffic equally. State lawmakers wrote their law after the FCC scrapped nationwide protections last year, citing the regulatory burdens they had caused for the telecom industry. The lawsuit opens yet another legal showdown between Brown and Attorney General Jeff Sessions. Recently, a federal judge threw out most of the DOJ’s challenge to California’s sanctuary state laws.

The law will pit massive ISPs like Comcast and Verizon against smaller Internet companies like Etsy and streaming services like Vimeo.

As the DOJ explains in its press release, federal laws explicitly state that the Internet should not be regulated as if it were a utility. However, this assumption undergirds the argument for enforcing net neutrality by law. For years, net neutrality was merely a principle to which ISPs adhered. It wasn’t until the Obama Administration-era FCC imposed certain restrictions on ISPs that net neutrality were enshrined into law.

And as Sessions pointed out in a statement, states do not have the right to regulate interstate commerce.

“Under the Constitution, states do not regulate interstate commerce – the federal government does. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order,” Sessions said in a statement.

[…]

“Not only is California’s Internet regulation law illegal, it also hurts consumers,” Pai said in a statement. “The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them.”

FCC Chairman Ajit Pai, who received death threats last year after the FCC undid the Obama-era regulations, said in a statement that the California law isn’t just illegal, but also hurts consumers.

“I’m pleased the Department of Justice has filed this suit.  The Internet is inherently an interstate information service.  As such, only the federal government can set policy in this area.  And the U.S. Court of Appeals for the Eighth Circuit recently reaffirmed that state regulation of information services is preempted by federal law.”

“Not only is California’s Internet regulation law illegal, it also hurts consumers.  The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits.  They have proven enormously popular in the marketplace, especially among lower-income Americans.  But notwithstanding the consumer benefits, this state law bans them.”

And with other states stepping up to pass net neutrality laws of their own, the DOJ has every incentive to take this lawsuit all the way to the Supreme Court (where hopefully, assuming Brett Kavanaugh is confirmed, the court’s conservative majority will rule in the DOJ’s favor).

In this case, the future of Internet regulation is at stake in a political war that’s pit telecom providers such as Verizon against tech companies, especially smaller ones such as the crafts site Etsy and the streaming service Vimeo. With other states considering net neutrality laws of their own, the DOJ “may want to try to take [California] to the Supreme Court if it goes that far,” said Carl Tobias, a law professor at the University of Richmond.

The first salvos in what looks to be a multiyear legal saga were fired just weeks before the all-important midterm elections (though it’s hard to imagine that this will do much galvanize either side’s base, as most consumers have no idea what net neutrality is, exactly).

Emboldened by online activists, liberal organizers and tech start-ups, California lawmakers set about crafting their own net neutrality rules earlier this year. The proposal that the legislature adopted in September – which the governor’s office allowed to become law Sunday – prohibits Internet providers from blocking access to sites and services, slowing down web connections or charging companies for faster delivery of their movies, music or other content. Smaller web firms, in particular, worry that they do not have the resources to pay telecom giants to make sure their content is seen. The law also bans carriers from exempting apps from counting toward consumers’ data allowances each month if doing so might harm companies, especially start-ups.

California’s law is even tougher than the approach adopted in 2015 while President Obama was in office – which was scrapped after Republicans took over leadership of the FCC two years later. To Ajit Pai, the FCC’s current Republican chairman, such net neutrality protections proved heavy handed and had slowed the telecom industry’s investment in improving their broadband networks nationwide. “I think ultimately it’s going to mean better, faster, cheaper Internet access and more competition,” Pai told the Post as the repeal took effect in June.

The California Assembly and Senate passed the law over the summer, ignoring the objections of telecom lobbyists who have largely favored the DOJ’s less-restrictive approach to the Obama-era policies. While California’s law is certainly ambitious and mirrors the state’s efforts to impose restrictive data privacy laws earlier this year, should the DOJ succeed with its case (an outcome that will almost certainly involve a SCOTUS ruling), it will settle the matter of net neutrality for a generation.

via RSS https://ift.tt/2IuYl1k Tyler Durden

Italian bonds resumed their slide, dropping for a third day as investors were spooked by the looming conflict between the populist government and European Union over the country’s budget proposal. Today’s selloff catalyst was a report by Italy’s La Repubblica newspaper which reported that there had been “rumors” that the EU would reject the country’s proposals. European Commission Vice President Valdis Dombrovskis said Friday that Italy’s plans did not seem in line with the bloc’s stability and growth pact, even though the EU had made such concessions in previous years to Spain and Portugal.

As a result, Italy’s two-year yields rose as much as 14 basis points to 1.17%, while yields on 10-year notes rose 7 bps to 3.22% with the yield spread over their German peers at 274 basis points, just short of Friday’s highs. However, after an initial selling burst, yields have since pared much of the losses.

“Headlines suggesting the EU will look to reject the budget all but places the populist coalition and the EU on a potential collision course,” said Rabobank’s Matthew Cairns “That is feeding straight into BTP levels this morning.”

While the early rumors were largely discounted, investors braced themselves for any comments from EU leaders on the sidelines of a Eurogroup meeting in Luxembourg. Meanwhile, as Bloomberg reports Italy’s Five Star Movement-League coalition has yet to lay out growth targets that formed the basis for the 2019 deficit target of 2.4%, which spooked investors Friday and prompted a hostile response by the EU.

Italy’s full budget proposal which was announced on Thursday will need to be handed over to the European Commission for full review on Oct. 15. Any rejection by the EU could cause rifts between Italy’s euroskeptics and the trade bloc, creating further market volatility.

Taking the other side of the argument, Italy’s Finance Minister Giovanni Tria told Il Sole 24 Ore that the higher-than-expected 2019 budget target is not a challenge to EU limits, adding that he had never threatened to quit, another potential selloff catalyst.

Also on Monday, Italy’s Prime Minister Giuseppe Conte said in a Facebook post that his government has set the foundations for “a serious and courageous budget,” even as growth details were lacking. Conte wrote that the budget “looks to growth” within a framework of stable public accounts; he also said that looking back over government’s first four months in power, the budget wants to offer an answer to rampant poverty, pensioners, families, savers hurt by bank crises.”

Meanwhile, even as bonds sold off, there was a modest relief rally in Italian stocks, with the FTSE MIB benchmark index rising 1.7%, partly reversing Friday’s 3.7% drop, and leading gains in major European markets on Monday.

The FTSE Italia All-Share Banks Index is up 0.8%, underperforming the MIB. On Monday, Citi cut Italian banks to neutral from overweight citing the political uncertainty.

Popular Italy hedges continued in the market Monday, with traders placing call trades on two-year German bonds, called Schatz. Such a trade involves positioning for a large gain, which could come from a flight to safety.

Fueling bearish sentiment, Natixis strategists targeted a Italy-Germany 10-year yield spread of 300 basis points, focusing on potential ratings downgrades from Moody’s Investors Service and S&P Global Ratings.

“A wave of negative rating actions would have far greater implications than a simple sell-off of Italian assets, one would assume that the Italian government would end buckling under the pressure,” wrote strategists led by Cyril Regnat. “If both Moody’s and S&P decide to downgrade Italy and maintain a negative outlook on the debt, this would pave the way for significantly wider spreads, possibly around 400 basis points.”

via RSS https://ift.tt/2R8KZfb Tyler Durden

If anybody had any doubt that the SEC would put its regulatory interests ahead of holding a high-profile CEO accountable for a brazen violation of securities laws, rest assured – the agency’s $40 million fine against Tesla CEO Elon Musk was little more than a slap on the wrist, appearing nearly identical to a settlement offer that Musk had rejected as recently as Thursday morning. Of course, Musk was probably brought to the point of capitulation not by the SEC’s threats (Musk knows as well as anybody that barring him from Tesla would likely cause billions of dollars of market value to vanish overnight) but by the most painful rout in Tesla shares in three years.

Unwilling to give the bears even a day to reassess, Musk had already set out over the weekend to repair the damage wrought by this most bizarre of corporate scandals (it memorably involved Musk’s prolific twitter habit and an inside joke about marijuana). With his twitter use now constrained by the terms of the settlement, Musk instead likely “leaked” two unambiguously bullish emails to CNBC, in which he exhorted Tesla staff to go all-out on Sunday, the last day of the quarter, to achieve an important production benchmark for the Tesla Model 3. In the emails, he claimed that the company is “very close” to finally turning a profit after years of burning cash.

We are very close to achieving profitability and proving the naysayers wrong, but to be certain, we must execute really well tomorrow (Sunday).

If we go all out tomorrow, we will achieve an epic victory beyond all expectations.

Since Musk must now pre-clear any tweets with potentially market-moving implications, it appears that leaking bullish emails has become his new strategy of choice for “punching the shorts in the nose.” And just as we expected, between the settlement news and the teaser ahead of Tesla’s Q3 earnings report later this week, Tesla shares are up roughly 14% in premarket trading, portending an “epic” (to use Musk’s own words) rebound in Tesla shares after the open.

These gains were egged on by sell-side analysts at Morgan Stanley, which said that Tesla’s fast settlement with the SEC “significantly reduces risk of spillover effects on capital markets, company morale and brand value.”

In other words, Tesla bulls can breath a sigh of relief: The “Musk premium” will likely remain intact for the foreseeable future…

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Authored by Pepe Escobar via The Asia Times,

History may one day rule this was the fateful geopolitical moment when the European Union clinched its PhD on foreign policy.

Last week, EU foreign policy head Federica Mogherini and Iranian Foreign Minister Mohammad Javad Zarif, announced at the UN a “special purpose vehicle” (SPV) to deal with the Trump administration’s sanctions on Iran after the US unilaterally pulled out of the JCPOA,  also known as the Iran nuclear deal.

Mogherini crucially emphasized, “in practical terms, this will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world.”

The SPV, which according to Mogherini “is aimed at keeping trade with Tehran flowing while the US sanctions are in place,” could be in effect before the second stage of US sanctions begin in early November.

This single initiative means Brussels is attempting to position itself as a serious geopolitical player, openly defying the US and essentially nullifying the Iran demonization campaign launched by the White House, CIA and State Department.

It’s not enough to remember that the JCPOA is a UN-endorsed  multilateral deal achieved after years of painstaking negotiations. The other JCPOA signatories apart from Iran and the US – Russia, China and the EU-3 (France, Britain and Germany) – have always been adamant to keep the deal going while supporting Iran on the civilian nuclear energy field.

It may have taken a few months, but the EU-3 have finally realized what Moscow and Beijing already knew: any business with Iran – which is in the interest of all players – must bypass the US dollar.

So now we come to a situation where the EU-3 will set up a multinational, state-backed, financial mechanism to help European companies conduct business with Iran in euros – and thus away from US financial enforcers.

In parallel, we will have Russia and China doing business with Iran in rubles and yuan.

Savvy energy traders knew that BRICS members Moscow and Beijing would continue to do oil and gas business with Tehran. BRICS member India, though, folded under American pressure.

The SPV will allow Iran to keep at least the 40% of its oil exports that go to the EU market in place and even allow investments by EU energy giants on Iranian infrastructure. It also opens an escape route for easily frightened energy customers such as India.

And in a total symbiotic way, the SPV opens another path for Russia and China as well. After all, the SPV mechanism will bypass the Belgium-based SWIFT financial network, on which the US interferes at will. SPV may become the preferred post-SWIFT mechanism, allowing for even more cross-border business across Eurasia and expanding to the Global South.

Dollar de-weaponized?

EU diplomats have conveyed to Asia Times a mood of absolute exasperation with the Trump administration in Brussels. A diplomat sums up the sentiment:

“We are not going to be bullied by extra-territorial interference anymore. The JCPOA was the first EU foreign policy success. We worked very hard for it, and we are determined that the agreement won’t be undermined under any circumstances.”

On the other hand, US national security adviser John Bolton – not exactly a popular figure in Brussels – has vowed to keep imposing “maximum pressure” on Tehran, and is threatening the EU if the SPV is implemented.

For Brussels, preservation of the JCPOA is sacrosanct. It’s directly linked to the credibility of Brussels institutions that are always under siege. If they buckle, a potential disaster in the coming European parliamentary elections in May 2019 will become a certainty.

The game reveals its complexity when we consider that Iran has been the catalyst for the EU to finally stand up to the US – and potentially get closer to Russia and China. What we see emerging is the contours of a possible cross-Eurasia alliance, in multiple fronts, between Russia-China-Iran – the three key nodes of Eurasia integration – and the EU-3.

It’s a game worthy of a Persian chess master: involving energy wars, the balance of power in Southwest Asia, the absolute power of the US-controlled global financial system and the status of the US dollar – bolstered by the petrodollar – as the global reserve currency.

All these themes had been lurking in the EU corridors in Brussels for years – with commissioners and diplomats pressing for a more forceful euro in global trade (much as in Beijing in relation to the yuan).

Arguably, a concerted offensive spearheaded by the SPV will lead the euro, the yuan and the ruble to eventually establish themselves as credible reserve currencies. Dollar weaponization, beware.

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“For people who want to make sure the Web serves humanity, we have to concern ourselves with what people are building on top of it,” Tim Berners-Lee told Vanity Fair last month. “I was devastated” he said while going through a litany of harmful and dangerous developments of the past three decades of the web. 

That’s why “the Father of the World Wide Web” has launched a start-up that intends to end the dominance of Facebook, Google, and Amazon, while in the process letting individuals take back control of their own data.

Berners-Lee’s new online platform and company Inrupt is being described as a “personal online data store,” or pod, where everything from messages, music, contacts or other personal data will be stored in one place overseen by the user instead of an array of platforms and apps run by corporations seeking to profit off personal information. The project seeks “personal empowerment through data” and aims to “take back” the web, according to company statements. 

The man who created the world wide web by implementing the first ever successful communication between a Hypertext Transfer Protocol (HTTP) client and server via the internet in 1989 lamented that his creation has been abused by powerful entities for everything mass surveillance to fake news to psychological manipulation to corporations commodifying individuals’ information. 

But he’s long been at work on a new project to take the web back, described in depth by the business technology magazine Fast Company:

This week, Berners-Lee will launch, Inrupt, a startup that he has been building, in stealth mode, for the past nine months. Backed by Glasswing Ventures, its mission is to turbocharge a broader movement afoot, among developers around the world, to decentralize the web and take back power from the forces that have profited from centralizing it. In other words, it’s game on for Facebook, Google, Amazon.

“We have to do it now,” Berners-Lee said of the newly launched project. “It’s a historical moment.” He identified the main impetus behind his recent announcement that he’ll be going on sabbatical from his research professor post at MIT to work full-time on the project as the recent revelation that Facebook allowed political operatives to gain access to some 50 million users’ private data. 

At MIT Berners-Lee has for years led a team on designing and building a decentralized web platform called ‘Solid’ — which will underlie the Inrupt platform. The Inrupt venture will serve as users’ first access to the new Solid decentralized web:

If all goes as planned, Inrupt will be to Solid what Netscape once was for many first-time users of the web: an easy way in. And like with Netscape, Berners-Lee hopes Inrupt will be just the first of many companies to emerge from Solid.

“I have been imagining this for a very long time,” says Berners-Lee.

As described on the Solid and Inrupt websites the new platform will allow users to have complete control over their information ‘pods’ (an acronym for “personal online data store”) — it is only they who will decide whether outside apps and sites will be granted access to it, and to what extent. 

Unlike Facebook or Twitter where all user information ultimately resides in centralized data centers and servers under control of the companies, applications on Inrupt will compete for users based on the services they can offer, and only the users can grant these apps “views” into their data, making personal data instantly portable between similar applications.

“The main enhancement is that the web becomes a collaborative read-write space, passing control from owners of a server, to the users of that system. The Solid specification provides this functionality,” the Solid website says.

Berners-Lee explained to Fast Company one example currently under development that could radically changed a popular product that has been prone to overstepping privacy boundaries and compromising data: 

For example, one idea Berners-Lee is currently working on is a way to create a decentralized version of Alexa, Amazon’s increasingly ubiquitous digital assistant. He calls it Charlie. Unlike with Alexa, on Charlie people would own all their data. That means they could trust Charlie with, for example, health records, children’s school events, or financial records. That is the kind of machine Berners-Lee hopes will spring up all over Solid to flip the power dynamics of the web from corporation to individuals.

With the weekend launch of Inrupt, developers across the globe this week will be invited to begin building their own decentralized apps through the Inrupt site. As its popularity grows the company will move forward to raise more funds, though it’s currently backed by a venture capital firm. 

Yet as his latest interview notes, “his plans could impact billion-dollar business models that profit off of control over data. It’s not likely that the big powers of the web will give up control without a fight.”

When this major potential disruptor was noted, Berners-Lee shot back: “We are not talking to Facebook and Google about whether or not to introduce a complete change where all their business models are completely upended overnight. We are not asking their permission.”

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Authored by Mike Shedlock via MishTalk,

That pitiful look on Merkel’s face is not a plea to understand East Germans. It’s a plea for them to understand her.

Ahead of German Unity Day, Angela Merkel, says the issue of migration has split the country. She calls for Greater Compassion and Understanding for the Concerns of East Germans.

German Chancellor Angela Merkel told the Augsburger Allgemeine newspaper on Saturday that although German reunification was largely “a success story,” many communities in the country’s former communist east harbored resentment.

“Much of what happened in the early 90s is once again facing people (today),” Merkel said, referring to the period of upheaval that followed the reunification of East and West Germany on October 3, 1990.

Merkel said there had been a “certain amount of nervousness” in Germany since the 2017 federal election, which reduced her authority and saw the right-wing populist Alternative for Germany (AfD) emerge as the third-largest party. The chancellor said the challenge of migration, in particular, had opened up divisions in the country.

The recent violent protests that gripped the eastern city of Chemnitz following a fatal stabbing that was blamed on asylum-seekers served as an example of how damaging such divisions can be.

Merkel argued that was one reason to do everything one could to make the anti-migrant AfD “as small as possible.”

“For me that means addressing and solving the problems people are worried about,” she said, adding however that there was a need to draw clear boundaries “where there is hatred, where there are general suspicions, where minorities are marginalized.”

2018 Chemnitz Riots

For starters, it was indeed asylum-seekers that killed a German man leading up to the Chemnitz Riots.

In the early morning of 26 August, after a festival celebrating the city’s founding, a fight broke out resulting in the death of a German-Cuban man and serious injuries to two other people. Two Kurdish immigrants, one Iraqi, and one Syrian were named as suspects. The incident re-ignited the tensions surrounding immigration to Germany, which had been ongoing since 2015 and the European migrant crisis. In response, mass protests against immigration were ignited by far-right nationalist groups. The protests spawned riots and were followed by counter-demonstrations.

The protests seemed reasonable enough. Immigrants have killed, murdered and raped German citizens.

The German citizens are fed up, and rightfully so. That the protests got way out of hand is a separate issue.

Ivory Tower

Merkel still does not see herself as the primary catalyst for this mess. It was her asinine immigration policy that fueled these protests.

Let in millions of people who cannot speak German, have no skills, and who cite religion as giving the a right to attack women, and what the hell do you think would happen?

Merkel, in her ivory tower, calls for “compassion” for the East Germans. That smacks of blaming them.

Merkel talks of “solving the problem”. She should look in the mirror. She is the problem.

It’s no wonder AfD is rising in the polls.

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It’s likely you’re very familiar with the standard world map.

It’s shown practically everywhere – you’ll see it online, on the news, in books, and even as a part of company logos. In fact, the world map is so ubiquitous that we don’t even really think about it much at all, really.

But, as Visual Capitalist’s Jeff Desjardins notes, the economist Max Roser from Our World in Data argues that this familiarity with the world map may lead to complacency in understanding global matters. After all, the typical world map shows us the basic geography of countries and continents, but it doesn’t give any indication of where people actually live!

INTRODUCING: THE CARTOGRAM

To get around the challenges of relying on the standard world map, Roser instead has made a population cartogram based on 2018 population figures.

What’s a population cartogram?

A cartogram is a visualization in which statistical information is shown in diagrammatic form. In this case, it’s a population cartogram, where each square in the map represents 500,000 people in a country’s population.

In total there are 15,266 squares, representing all 7.633 billion people on the planet.

(View this giant map in full resolution to see details )

Courtesy of: Visual Capitalist

Countries like Canada or Russia – which have giant land masses but small relative populations – appear much smaller on this kind of map. Meanwhile, a country like Bangladesh grows much bigger, because it has a large population living within a smaller area.

THE REGIONAL VIEW

Let’s zoom in on some continental regions to get a sense of what we can learn from a population cartogram done in this fashion.

Asia and Oceania
Where did Australia go? The continent is completely dwarfed by neighboring Indonesia and the Philippines.

Not surprisingly, India and China are the biggest countries on this cartogram, especially looking oversized in comparison to countries in the Middle East like Saudi Arabia, Afghanistan, or the United Arab Emirates.

Europe
Geographically, Russia is a pretty massive country – but when resized based on population, the nation looks closer in size to many other European nations.

The Netherlands and Belgium, two countries with higher population densities than most European nations, also appear more prominent on this style of map.

The Americas
On the map below, Mexico has exploded to almost 4X the size of Canada. That’s because although the Great White North is the world’s second largest country in size, it only has a fraction of the population of Mexico.

Meanwhile, it’s evident that Argentina’s population is lower than the country’s giant landmass leads on.

Africa
Finally, we’ll look at Africa, which is in the middle of a massive population boom.

Countries like Namibia, Botswana, and Chad almost disappear.

Nigeria, which is expected to have the world’s largest city by 2100 with over 88 million residents, is the largest country in Africa using this cartogram method.

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Authored by Judith Bergman via The Gatestone Institute,

• Even before such EU-wide legislation, similar ostensible “anti-terror legislation” in France, for example, is being used as a political tool against political opponents and to limit unwanted free speech.

• In France, simply spreading information about ISIS atrocities is now considered “incitement to terrorism”. It is this kind of legislation, it seems, that the European Commission now wishes to impose on all of the European Union.

• Social media giants — Facebook, Twitter, YouTube, Microsoft, Google+ and Instagram — act as voluntary censors on behalf of the European Union.

• The European Commission states that it is specifically interested in funding projects that focus on the “development of technology and innovative web tools preventing and countering illegal hate speech online and supporting data collection”, and studies that analyze “the spread of racist and xenophobic hate speech in different Member States…”

The European Union seems fixated, at least for the internet, on killing free speech. And social media giants — Facebook, Twitter, YouTube, Microsoft, Google+ and Instagram — act as voluntary censors on behalf of the EU. (Image source: iStock)

In March, the European Commission — the unelected executive branch of the European Union — told social media companies to remove illegal online terrorist content within an hour — or risk facing EU-wide legislation on the topic. This ultimatum was part of a new set of recommendations that applies to all forms of supposedly “illegal content” online. This content ranges “from terrorist content, incitement to hatred and violence, child sexual abuse material, counterfeit products and copyright infringement.”

While the one-hour ultimatum was ostensibly only about terrorist content, the following is how the European Commission presented the new recommendations at the time:

“… The Commission has taken a number of actions to protect Europeans online – be it from terrorist content, illegal hate speech or fake news… we are continuously looking into ways we can improve our fight against illegal content online. Illegal content means any information which is not in compliance with Union law or the law of a Member State, such as content inciting people to terrorism, racist or xenophobic, illegal hate speech, child sexual exploitation… What is illegal offline is also illegal online”.

“Illegal hate speech”, is then broadly defined by the European Commission as “incitement to violence or hatred directed against a group of persons or a member of such a group defined by reference to race, colour, religion, descent or national or ethnic origin”.

The EU has now decided that these “voluntary efforts” to remove terrorist content within an hour on the part of the social media giants are not enough: that legislation must be introduced. According to the European Commission’s recent press release:

“The Commission has already been working on a voluntary basis with a number of key stakeholders – including online platforms, Member States and Europol – under the EU Internet Forum in order to limit the presence of terrorist content online. In March, the Commission recommended a number of actions to be taken by companies and Member States to further step up this work. Whilst these efforts have brought positive results, overall progress has not been sufficient”.

According to the press release, the new rules will include draconian fines issued to internet companies who fail to live up to the new legislation:

“Member States will have to put in place effective, proportionate and dissuasive penalties for not complying with orders to remove online terrorist content. In the event of systematic failures to remove such content following removal orders, a service provider could face financial penalties of up to 4% of its global turnover for the last business year”.

Such astronomical penalties are likely to ensure that no internet company will run any risks and will therefore self-censor material “just in case”.

According to the European Commission press release, the rules will require that service providers “take proactive measures – such as the use of new tools – to better protect their platforms and their users from terrorist abuse”. The rules will also require increased cooperation between hosting service providers, and Europol and Member States, with the stipulation that Member states “designate points of contact reachable 24/7 to facilitate the follow up to removal orders and referrals”, as well as the establishment of:

“…effective complaint mechanisms that all service providers will have to put in place. Where content has been removed unjustifiably, the service provider will be required to reinstate it as soon as possible. Effective judicial remedies will also be provided by national authorities and platforms and content providers will have the right to challenge a removal order. For platforms making use of automated detection tools, human oversight and verification should be in place to prevent erroneous removals”.

It is hard to see why anyone would believe that there will be effective judicial remedies and that erroneously removed content will be reinstated. Even before such EU-wide legislation, similar ostensible “anti-terror legislation” in France, for example, is being used as a political tool against political opponents and to limit unwanted free speech. Marine Le Pen, leader of France’s Front National, was charged earlier this year for tweeting images in 2015 of ISIS atrocities, includingthe beheading of American journalist James Foley and a photo of a man being burned by ISIS in a cage. She faces charges of circulating “violent messages that incite terrorism or pornography or seriously harm human dignity”, and that can be viewed by a minor. The purported crime is punishable by up to three years in prison and a fine of €75,000 ($88,000). Le Pen posted the pictures a few weeks after the Paris terror attacks in November 2015, in which 130 people were killed, and the text she wrote to accompany the images was “Daesh is this!” In France, then, simply spreading information about ISIS atrocities is now considered “incitement to terrorism”. It is this kind of legislation, it seems, that the European Commission now wishes to impose on all of the EU.

The decision to enact legislation in this area was taken at the June 2018 European Council meeting – a gathering of all the EU’s heads of state – in which the Council welcomed “the intention of the Commission to present a legislative proposal to improve the detection and removal of content that incites hatred and to commit terrorist acts”. It sounds, however, as if the EU is planning to legislate about a lot more than just “terrorism”.

In May 2016, the European Commission and Facebook, Twitter, YouTube, and Microsoft, agreed on a “Code of Conduct on countering illegal online hate speech online” (Google+ and Instagram also joined the Code of Conduct in January 2018). The Code of Conduct commits the social media companies to review and remove, within 24 hours, content that is deemed to be “illegal hate speech”. According to the Code of Conduct, when companies receive a request to remove content, they must “assess the request against their rules and community guidelines and, where applicable, national laws on combating racism and xenophobia…” In other words, the social media giants act as voluntary censors on behalf of the European Union.

The European Council’s welcoming of a legislative proposal from the European Commission on “improving the detection and removal of content that incites hatred” certainly sounds as if the EU plans to put the Code of Conduct into legislation, as well.

At the EU Salzburg Informal Summit in September, EU member states agreed to, “step up the fight against all forms of cyber crime, manipulations and disinformation”. Heads of member states were furthermore invited, “to discuss what they expect from the Union when it comes to… preventing the dissemination of terrorist content online” and “striking the right balance between effectively combating disinformation and illegal cyber activities and safeguarding fundamental rights such as the freedom of expression”.

At the same time, however, the European Commission, under its Research and Innovation Program, has a call out for research proposals on how “to monitor, prevent and counter hate speech online,” with a submission deadline in October.

In the call for proposals, the Commission says that it is “committed to curb the trends of online hate speech in Europe” and underlines that “proposals building on the activities relating to the implementation of the Code of Conduct on countering hate speech online are of particular interest”.

The Commission states that it is specifically interested in funding projects that focus on the, “development of technology and innovative web tools preventing and countering illegal hate speech online and supporting data collection”; studies that analyze “the spread of racist and xenophobic hate speech in different Member States, including the source and structures of groups generating and spreading such content…”; and projects that develop and disseminate “online narratives promoting EU values, tolerance and respect to EU fundamental rights and fact checking activities enhancing critical thinking and awareness about accuracy of information” as well as activities “aimed at training stakeholders on EU and national legal framework criminalising hate speech online”. One just wonders which member states and what “hate speech” will be held accountable — and which not.

The EU seems fixated, at least for the internet, on killing free speech.

*  *  *

The European Commission writes in its call that it would like the funded projects to have the following results:

• Curbing increasing trends of illegal hate speech on the Internet and contributing to better understanding how social media is used to recruit followers to the hate speech narrative and ideas;

• Improving data recording and establishment of trends, including on the chilling effects of illegal hate speech online, including when addressed to key democracy players, such as journalists;

• Strengthening cooperation between national authorities, civil society organisations and Internet companies, in the area of preventing and countering hate speech online;

• Empowering civil society organisations and grass-root movements in their activities countering hate speech online and in the development of effective counter-narratives;

• Increasing awareness and media literacy of the general public on racist and xenophobic online hate speech and boosting public perception of the issue.

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