Pilots Confront Boeing: 737 Max Crashes Were Not Pilot Error

Authored by Mike Shedlock via MishTalk,

The lie of the day: Skilled pilots could have prevented the two 737 Max crashes.

The deeper we dig into the 737 Max crashes, the easier it is to make a case that Boeing, not software, not poorly trained pilots is to blame for the 737 Max crashes.

The Seattle Times addresses the issue in How much was pilot error a factor in the Boeing 737 MAX crashes?

In his opening statement Wednesday at the House Aviation subcommittee hearing on the 737 MAX in Washington, D.C., the lead Republican congressman blamed errors by the Indonesian and Ethiopian pilots for the two deadly MAX crashes in those countries.

“Pilots trained in the United States would have successfully been able to handle” the emergencies on both jets, said Rep. Sam Graves of Missouri, ranking member of the House Transportation and Infrastructure Committee. He added that preliminary reports about the accident “compound my concerns about quality training standards in other countries.”

That’s the gambit that Boeing wants everyone to believe. However, pilots strongly disagree.

“I’m disappointed with those who sit in their lofty chairs of judgment and say this wouldn’t have happened to U.S. pilots,” said a veteran captain with a major U.S. airline, who asked not to be named to avoid involving his employer.

The flight crew on the March 10 Ethiopian flight faced a barrage of alerts in the flight that lasted just 6 minutes. Those alerts included a “stick shaker” that noisily vibrated the pilot’s yoke throughout the flight, warning the plane was in danger of a stall, which it wasn’t; repeated loud “DON’T SINK” warnings that the jet was too close to the ground; a “clacker” making a very loud clicking sound to signal the jet was going too fast; and multiple warning lights telling the crew the speed, altitude and other readings on their instruments were unreliable.

The Lion Air crash in October would have been at the forefront of the Ethiopian pilots’ minds, and they seem to have focused solely on following the Boeing procedure to eliminate the MAX’s new flight-control system — called Maneuvering Characteristics Augmentation System (MCAS) — that was pushing the nose down. They did so by flipping two cut-off switches. But then the heavy forces on the jet’s tail prevented them from moving the manual wheel in the cockpit that would have corrected the nose-down attitude.

“What would the best pilot do on their worst day with all of this sensory overload?” the veteran U.S. airline captain said. “Who knows what any of us would have done?” “The manufacturer isn’t supposed to give us airplanes that depend on superhuman pilots,” he added. “We should have airplanes that don’t fail the way these airplanes failed.”

What Does the Simulator Say?

Starting from the point where the Ethiopian pilots hit the cut-off switches and stopped MCAS from operating, the U.S. MAX crew tried in the simulator to recover.

Even though the U.S. crew performed the simulator experiment at a normal speed of 250 knots instead of the more than 350 knots of the Ethiopian jet, the forces on the jet’s tail still prevented them from moving the manual wheel in the cockpit that would have corrected the nose-down attitude.

To get out of it, the pilots used an old aviator technique called the “roller coaster” method — letting the yoke go to relieve the forces on the tail, then cranking the wheel, and repeating this many times.

This technique has not been in U.S. pilot manuals for decades, and pilots today are not typically trained on it. Using it in the simulator, the U.S. MAX crew managed to save the aircraft but lost 8,000 feet of altitude in the process. The Ethiopian MAX never rose higher than 8,000 feet, indicating that from that point in the flight, the crew couldn’t have saved it.

Two Hours on an Ipad

Boeing says 2 hours on an iPad is all it takes in additional training.

Really? When top-notch pilots cannot recover a craft in a simulator as opposed to real life panic?

Of course, Boeing insists that the software is now fixed.

Is it?

Trained Pilots

Bjorn Fehrm, a Swedish pilot and aerospace engineer who is an analyst for Bainbridge Island-based Leeham.net, said the report assumes the accidents could have been avoided by “a really proficient pilot … on a good day.” But he said Boeing and Airbus cannot rely on the roughly 300,000 pilots flying worldwide having a good day and being perfectly trained for every emergency.

The veteran U.S. airline captain said that the American aviation community needs to avoid getting “too cocky about U.S. pilots being immune from mistakes.”

He said he’s spent a lot of time flying with local pilots in western China where the mountains are high and the flying is hazardous. I’d put them up against American airline pilots any day,” he said. “They are exceptional airmen.” And he criticized Boeing for designing an airplane in which a system triggered by a single sensor failure would present such challenges and require such a high-performance response from the pilots.

Myth Shattered

I believe that dispels the myth that US pilots would necessarily have avoided those crashes.

Damning Audio

Next consider a damning audio that shows pilots confronting Boeing about new features suspected in deadly crashes.

CBS News has obtained audio from the American Airlines pilots’ union confronting Boeing about new features to the 737 Max that may have been factors in two deadly crashes. Frustration boiled over during the tense meeting in November 2018, less than a month after the first Max crashed, and four months before the second crash.

“We flat out deserve to know what is on our airplanes,” one pilot is heard saying. “I don’t disagree,” a Boeing official said.

The pilots at the meeting were angry that system was not disclosed to them until after the first crash. “These guys didn’t even know the damn system was on the airplane — nor did anybody else,” one pilot said.

The official, Boeing vice president Mike Sinnett, who does not appear to know he was being recorded, claimed what happened to Lion Air was once-in-a-lifetime type scenario.

Boeing told the pilots it would make software changes, perhaps in as little as six weeks, but didn’t want to hurry it. “We want to make sure we’re fixing the right things,” the official said. “That’s the important thing. To make sure we’re fixing the right things. We don’t want to rush and do a crappy job of fixing the right things, and we also don’t want to fix the wrong things.”

That fix was still in development when the second 737 Max crashed in March, leading to the worldwide grounding of the plane. The existence of the audio was first reported by the Dallas Morning News.

Fixes Needed

Boeing was aware fixes were needed but sent out no alerts or warnings. Boeing did not treat this as an emergency.

Recall that even after the second crash Boeing begged Trump to not ground the planes.

How galling is that?

Criminal Negligence?

The Points Guy says Boeing Faces a Possible Legal Nightmare With Airlines for the 737 MAX.

Norwegian Air has already declared that it will demand compensation from Boeing for its grounded fleet of 737 MAXes and lost fares, meaning that a lawsuit is all but certain unless Boeing simply gives in, which is unlikely. Other airlines are widely expected to follow Norwegian’s lead.

Boeing and its client airlines are likely already frantically preparing their legal arsenals. That will play a huge role in determining how much the aircraft manufacturer will ultimately be on the hook for — or whether it might even come out of the debacle scot-free.

The key point of contention will be whether Boeing did its due diligence in keeping its planes safe. That includes rolling out an airworthy vessel, but also making sure it and its clients were up to date on needed improvements, upgrades and revised standards.

“The easiest thing to relate it to is your car,” Dedmon said. “If the airbag’s been found to be bad, the manufacturer issues a notice to the buyers, you take it to the dealer, and they get it fixed. Things of that nature happen in aviation as well, like a repair that went out at a certain time, or inspections to have to be done within certain flight hours — those things aren’t routine in aviation, and there’s nothing abnormal in any form with that.”

Where the parties are likely to disagree in court, however, is whether the airline or Boeing or a third party didn’t do the best reasonable job of making sure everyone who needed to know was kept abreast of vital updates.

What the plaintiffs’ lawyer will particularly be keeping an eye out for — but are unlikely to find, in this day and age — is a “smoking gun” document that’s proof that Boeing knew about a dangerous fault in the 737 MAX and covered it up. That’s what happened with the Ford Pinto, which notoriously exploded into flames in relatively minor collisions.

Tough But Not Too Tough

The Detroit Free Press discusses criminal negligence in its report Should Boeing be held liable for plane crashes? It’s complicated.

The crashes highlight a perennial question facing authorities in many nations: How to punish and correct bad corporate behavior without damaging the economy or thousands of innocent employees?

Preet Bharara, the former U.S. attorney for the Southern District of New York, writes in his new book “Doing Justice” that people often ask him why no Wall Street executives went to jail following the collapse of the financial system in 2008, an event that triggered the Great Recession. The answer, he writes, is that criminal charges are often so hard to make stick.

“Much of what happened in 2008 was not the product of a few people with clear, provable intent to rob others of their savings,” he writes. Rather, the financial collapse stemmed from thousands of people ignoring or not understanding the risks in the mortgage-backed securities they were buying and selling.

Everyone wants the bad actors to go to jail, Bharara adds. “But in the system that we have, you can’t proceed without proof of particular people engaging in particular conduct with a particular mental intent. The bar to prove intent is high.”

Absent clear evidence of criminal intent, he writes, “You can find behavior reprehensible, careless, greedy, thoughtless and cruel, but that’s not enough to bring a case.”

“If they can’t get an individual, then they’ll try to charge the company because companies generally are easy to get,” Henning said. “They tend not to fight, so there’s less of a chance they will go to trial.” And often what you see in these settlements with companies, they try to mitigate the damage. They get the penalty but then they try to make sure it doesn’t cost the company too much. You don’t want to put Boeing out of business.

Smoking Gun?

In the absence of a smoking gun, it would be very difficult to prove criminal negligence.

But consider wrongful death lawsuits. Expect the airlines to be dragged into some of those lawsuits.

And Boeing might counter-sue over cancelled contracts claiming the planes are fit to fly.

This can drag on for years and probably will.

Lawyers will have a field day and make a fortune.

via ZeroHedge News http://bit.ly/2Vw00sl Tyler Durden

Futures Exchange To Introduce Gold, Silver “Speed Bump” To End HFT Manipulation

No sooner had we covered the battle of high frequency traders physically moving infrastructure and microwave towers to gain nanosecond advantages, that we learned that Intercontinental Exchange (ICE) has planned on launching the first ever “speed bump” for the US futures market that would negate some of these advantages. Despite two of the CFTC’s five commissioners disagreeing with the decision, the exchange still looks set to impose a split second delay on some trades, according to the Wall Street Journal.

Those not in favor of the decision claim that the “speed bump” would unfairly punish firms that rely on their speed advantage. Those in favor, say that it’s about time someone did something to stop the HFTs from frontrunning everyone in the futures market. Which is also why some of the largest high frequency trading firms are vocally opposed to the plan.

As part of the proposed speed bump, the ICE is looking to introduce a 3 millisecond pause before executing some trades in its gold and silver futures contracts. Trading in those contracts is relatively tiny, as most gold and silver futures trades take place at the CME Group. However, traders have been watching this decision because of the precedent it could set.

The CFTC had a chance to block the proposal within 90 days, but that period ended on Tuesday. Now, ICE is free to do as it pleases. The CFTC’s Division of Market Oversight said it’s going to watch carefully to analyze the impact of the new “speed bump” saying it “does not view the certification of the ICE Rule as establishing a precedent with respect to the legal and policy merits of speed bump functionalities generally.”

Other attempts to create similar “speed bumps” at other exchanges will be assessed on individual merits, according to the Division. Both a Democratic and Republican commissioner issued objections to the decision. The Republican cited Kurt Vonnegut’s short story “Harrison Bergeron”, where the government forces handicaps on talented people to create a level playing field, in his dissent.

Republican Brian Quintenz said: “Those that invent, and invest in, faster information transmission technologies to capitalize on market dislocations reap the profits of their advantage. That process enhances market efficiency.”

ICE hasn’t given a timeline for when they are going to implement the “speed bump”. The exchange commented: “We are very pleased with the CFTC’s decision to allow our rule amendment for passive order protection—or what is commonly referred to as a speed bump—in futures markets to become effective.”

HFT giants like Citadel Securities LLC and DRW Holdings LLC, which make the bulk of their revenue from frontrunning slower retail and “dumb money whale” orders, were opposed to the idea, along with trade group Managed Funds Association, which represents hedge funds. Stephen Berger, global head of government and regulatory policy for Citadel Securities said: “We appreciate the commission’s confirmation that today’s rule change is limited in scope to two specific contracts and that any future expansion will require a new rule filing and legal analysis.”

The best hot take on the speed bump belonged to Tom McClellan, who said that “high-frequency algo traders spent all that money, locating their offices closer to ICE server farms and buying high-speed fiber connections to get an edge on trading, and now ICE is introducing a 3-millisecond delay trying to level the playing field.”

Which also explains why they are all so furious.

Several smaller firms welcomed the idea, however, claiming it would allow greater competition. HFT firms now have to spend significant amounts of capital to shave millionths of a second off their trades. Large firms have built out microwave infrastructure and have jostled to get close to exchanges to find minuscule advantages, as we have profiled in the past

The “bump” is set to apply to incoming orders seeking to hit unexecuted buy or sell orders already posted on ICE, while traders posting new orders to be displayed on the exchange won’t be affected. Eric Swanson, head of the Americas unit of XTX Markets said: “By negating costly HFT speed advantages at millisecond time frames, ICE’s speed bump will reduce the indirect operational tax on end users.”

Still, some critics claim that the delay could actually cause more volatility in periods of market turmoil. 

DRW founder and Chief Executive Donald Wilson Jr. said: “During episodes of volatility, there would be essentially fake liquidity on the screen. I think that’s a very dangerous thing.”

via ZeroHedge News http://bit.ly/30ssJSH Tyler Durden

Buchanan: Who Wants This War With Iran?

Authored by Patrick Buchanan via Buchanan.org,

Speaking on state TV of the prospect of a war in the Gulf, Iran’s supreme leader Ayatollah Khamenei seemed to dismiss the idea.

“There won’t be any war. … We don’t seek a war, and (the Americans) don’t either. They know it’s not in their interests.”

The ayatollah’s analysis — a war is in neither nation’s interest — is correct. Consider the consequences of a war with the United States for his own country.

Iran’s hundreds of swift boats and handful of submarines would be sunk. Its ports would be mined or blockaded. Oil exports and oil revenue would halt. Air fields and missile bases would be bombed. The Iranian economy would crash. Iran would need years to recover.

And though Iran’s nuclear sites are under constant observation and regular inspection, they would be destroyed.

Tehran knows this, which is why, despite 40 years of hostility, Iran has never sought war with the “Great Satan” and does not want this war to which we seem to be edging closer every day.

What would such a war mean for the United States?

It would not bring about “regime change” or bring down Iran’s government that survived eight years of ground war with Saddam Hussein’s Iraq.

If we wish to impose a regime more to our liking in Tehran, we will have to do it the way we did it with Germany and Japan after 1945, or with Iraq in 2003. We would have to invade and occupy Iran.

But in World War II, we had 12 million men under arms. And unlike Iraq in 2003, which is one-third the size and population of Iran, we do not have the hundreds of thousands of troops to call up and send to the Gulf.

Nor would Americans support such an invasion, as President Donald Trump knows from his 2016 campaign. Outside a few precincts, America has no enthusiasm for a new Mideast war, no stomach for any occupation of Iran.

Moreover, war with Iran would involve firefights in the Gulf that would cause at least a temporary shutdown in oil traffic through the Strait of Hormuz — and a worldwide recession.

How would that help the world? Or Trump in 2020?

How many allies would we have in such a war?

Spain has pulled its lone frigate out of John Bolton’s flotilla headed for the Gulf. Britain, France and Germany are staying with the nuclear pact, continuing to trade with Iran, throwing ice water on our intelligence reports that Iran is preparing to attack us.

Turkey regards Iran as a cultural and economic partner. Russia was a de facto ally in Syria’s civil war. China continues to buy Iranian oil. India just hosted Iran’s foreign minister.

So, again, Cicero’s question: “Cui bono?”

Who really wants this war? How did we reach this precipice?

A year ago, Secretary of State Mike Pompeo issued a MacArthurian ultimatum, making 12 demands on the Tehran regime.

Iran must abandon all its allies in the Middle East — Hezbollah in Lebanon, the Houthis in Yemen, Hamas in Gaza — pull all forces under Iranian command out of Syria, and then disarm all its Shiite militia in Iraq.

Iran must halt all enrichment of uranium, swear never to produce plutonium, shut down its heavy water reactor, open up its military bases to inspection to prove it never had a secret nuclear program and stop testing missiles. And unless she submits, Iran will be strangled with sanctions.

Pompeo’s speech at the Heritage Foundation read like the terms of some conquering Caesar dictating to some defeated tribe in Gaul, though we had yet to fight and win the war, usually a precondition for dictating terms.

Iran’s response was to disregard Pompeo’s demands.

And crushing U.S. sanctions were imposed, to brutal effect.

Yet, as one looks again at the places where Pompeo ordered Iran out — Lebanon, Yemen, Gaza, Syria, Iraq — no vital interest of ours was imperiled by any Iranian presence.

The people who have a problem with Hamas in Gaza and Hezbollah in Lebanon are the Israelis whose occupations spawned those movements.

As for Yemen, the Houthis overthrew a Saudi puppet.

Syria’s Bashar Assad never threatened us, though we armed rebels to overthrow him. In Iraq, Iranian-backed Shiite militia helped us to defend Baghdad from the southerly advance of ISIS, which had taken Mosul.

Who wants us to plunge back into the Middle East, to fight a new and wider war than the ones we fought already this century in Afghanistan, Iraq, Syria, Libya and Yemen?

Answer: Pompeo and Bolton, Bibi Netanyahu, Crown Prince Mohammed bin Salman and the Sunni kings, princes, emirs, sultans and the other assorted Jeffersonian democrats on the south shore of the Persian Gulf.

And lest we forget, the never-Trumpers and neocons in exile nursing their bruised egos, whose idea of sweet revenge is a U.S. return to the Mideast in a war with Iran, which then brings an end to the Trump presidency.

via ZeroHedge News http://bit.ly/2WO7rfR Tyler Durden

Maxine Waters Slams Trump’s “Very Racist” Immigration Plan

Congresswoman Maxine Waters, who has tried to position herself as one of President Trump’s most persistent critics in Congress, claimed during a Friday appearance on CNN that Trump’s new immigration plan was “very racist.”

Waters said she agrees that something needs to be done to change our immigration policies…but this ain’t it.

“There should be comprehensive immigration reform…and not reform that should be about inciting those who have negative thoughts about those coming across the border…some of that is very racist…”

Asked for specific examples of what made Trump’s plan racist, Waters said the “merit-based” evaluation of green card applicants on criteria like whether they can already speak English or whether they are capable of earning a decent salary are “not keeping in step with the way we treat human beings.” Waters also objected to Trump’s plans to eliminate chain migration.

“It’s not keeping with what this country is supposed to be all about,” though Waters didn’t elaborate on what exactly she meant by that.

Of course, “Kerosene Maxine” isn’t the first top Democrat to bash Trump’s immigration plan. Nancy Pelosi responded to the plan’s unveiling yesterday during a Rose Garden press conference statement that to describe Trump’s priorities as “merit-based” would be “condescending” to applicants. She also insisted that the plan “wasn’t a serious proposal”, was “dead on arrival” and had “no chance of passing.”

Trump has said he plans to push the plan after the 2020 vote if he’s reelected and the Republicans manage to win back the House.

via ZeroHedge News http://bit.ly/2QaiEVq Tyler Durden

US Poised To Remove Steel, Aluminum Tariffs On Canada, Mexico

In a move that helps clear the way for USMCA ratification, Bloomberg reports that, according to people familiar with the matter, the U.S. is poised to lift steel and aluminum tariffs on Canada and Mexico in favor of stronger enforcement actions.

The effective date for removing the tariffs is the outstanding issue, one of the people said.

The move will lift the 25% steel and 10% aluminum tariffs the U.S. placed on the two trading neighbors almost a year ago in the name of national security.

US equities extended gains on the news (as did Canadian and Mexican stocks)…

 

And the Loonie and peso jumped…

 

via ZeroHedge News http://bit.ly/2Qbk4iH Tyler Durden

Key Levels To Watch: S&P Is “Deep In The Throes Of Op-Ex Gamma Hedging”

S&P futures tumbled overnight, erasing all of yesterday’s gains ahead of the cash market open. But once Op-Ex day began and stocks started trading, the S&P went vertical and is chopping around as Nomura’s Charlie McElligott notes that trading remains deeply in the throes of Gamma hedging around Op-Ex.

Via Nomura,

The following levels remain “in-play” (and proving to act as magnets over the course of yesterday’s session): 

  • 2850 to the downside (now $3.44B of notional Gamma)

  • 2880 ($2.72B notional Gamma) and 

  • 2900 ($6.46B notional Gamma—thus that RAGING +55 handle rally intraday) to the upside as most likely points across the range.

Notably and despite the overnight tone, the S&P Call wing went “bid” yesterday (heavy 2950, 2975, 3000, 3025 C / CS activity) on a nerve-y “grab,” as futures were intraday pulled higher to the gravity of the large Gamma at 2880 & 2900 strikes, all part of the feedback loop which elicited “rolling stop-ins” from last week’s “short delta” hedges in Spooz.

S&P CALL WING GOES ‘BID,’ INDICATING THAT THE MARKET IS SCARED OF THE ‘RIGHT TAIL’:  See the three-day progression of the options-implied price distribution—with the daily move from Tuesday (green) to Wednesday (light blue) to Thursday (pink) shifting further to the right, pulled via demand for higher strikes.

McElligott highlights the following crucial CTA Pivot Points across asset-classes…

  • Equities

    • [b/s is 0.06% away] Euro Stoxx 50, currently 100.0% long, [3406.0], selling under 3403.85 (-0.06%) to get to 69% , more selling under 3375.27 (-0.90%) to get to -92% , flip to short under 3375.62 (-0.89%), max short under 3080.76 (-9.55%)

    • [b/s is 0.53% away] Russell 2000, currently -91.6% short, [1559.9], more selling under 1543.52 (-1.05%) to get to -96% , max short under 1543.36 (-1.06%), buying over 1568.14 (+0.53%) to get to -76% , more buying over 1615.24 (+3.55%) to get to 20% , flip to long over 1615.24 (+3.55%), max long over 1615.39 (+3.56%)

    • [b/s is 0.53% away] Nikkei 225, currently -91.6% short, [21050.0], more selling under 20939.24 (-0.53%) to get to -96% , max short under 20937.14 (-0.54%), buying over 22038.1 (+4.69%) to get to -11% , more buying over 22226.64 (+5.59%) to get to 84% , flip to long over 22040.21 (+4.70%), max long over 22228.75 (+5.60%)

    • [b/s is 0.67% away] S&P 500, currently 68.8% long, [2878.6], more buying over 2898.02 (+0.67%) to get to 84% , max long over 2898.31 (+0.68%), selling under 2740.71 (-4.79%) to get to 65% , more selling under 2691.48 (-6.50%) to get to -20% , flip to short under 2691.48 (-6.50%), max short under 2691.48 (-6.50%)

    • [b/s is 1.02% away] NASDAQ 100, currently 68.8% long, [7600.25], more buying over 7677.6 (+1.02%) to get to 84% , max long over 7678.36 (+1.03%), selling under 7005.86 (-7.82%) to get to 65% , more selling under 6778.24 (-10.82%) to get to -20% , flip to short under 6778.24 (-10.82%), max short under 6778.24 (-10.82%)

    • [b/s is 3.02% away] HangSeng CH, currently -100.0% short, [10756.0], buying over 11080.31 (+3.02%) to get to -96% , more buying over 11743.8 (+9.18%) to get to -76% , flip to long over 11776.38 (+9.49%), max long over 11776.38 (+9.49%)

  • Bonds

    • [b/s is 0.14 away] JPY_10Y, currently 100.0% long, [152.83], selling under 152.69 (-0.14) to get to 45% , more selling under 151.02 (-1.81) to get to -45% , flip to short under 151.03 (-1.80), max short under 150.45 (-2.38)

    • [b/s is 0.205 away] ED4, currently 100.0% long, [97.785], selling under 97.58 (-0.20) to get to -100% , more selling under 97.58 (-0.20) to get to -100% , flip to short under 97.6 (-0.19), max short under 97.58 (-0.20)

    • [b/s is 1.3 away] GBP_10Y, currently 100.0% long, [128.61], selling under 127.31 (-1.30) to get to 45% , more selling under 124.99 (-3.62) to get to -45% , flip to short under 125.0 (-3.61), max short under 122.19 (-6.42)

    • [b/s is 1.9619 away] USD_10Y, currently 100.0% long, [124.421875], selling under 122.46 (-1.96) to get to 45% , more selling under 119.33 (-5.09) to get to -45% , flip to short under 119.34 (-5.08), max short under 118.6 (-5.82)

    • [b/s is 2.95 away] EUR_10Y, currently 100.0% long, [166.95], selling under 164.0 (-2.95) to get to 45% , more selling under 159.0 (-7.95) to get to -45% , flip to short under 159.01 (-7.94), max short under 154.51 (-12.44)

  • Commods

    • [b/s is 0.69% away] Gold, currently 89.7% long, [1286.2], more buying over 1323.47 (+2.90%) to get to 95% , max long over 1323.6 (+2.91%), selling under 1277.34 (-0.69%) to get to 61% , more selling under 1238.08 (-3.74%) to get to -33% , flip to short under 1238.08 (-3.74%), max short under 1237.95 (-3.75%)

    • [b/s is 1.29% away] Copper, currently -100.0% short, [6089.0], buying over 6167.34 (+1.29%) to get to -33% , more buying over 6528.75 (+7.22%) to get to 61% , flip to long over 6167.95 (+1.30%), max long over 6749.77 (+10.85%)

    • [b/s is 1.43% away] WTI, currently 33.2% long, [62.87], more selling under 54.72 (-12.96%) to get to -33% , flip to short under 54.72 (-12.96%), max short under 54.71 (-12.98%), buying over 63.77 (+1.43%) to get to 61% , more buying over 63.77 (+1.43%) to get to 90% , max long over 65.09 (+3.53%)

  • FX

    • [b/s is 0.01% away] USDJPY, currently -1.5% short, [109.935], more buying over 109.9469 (+0.01%) to get to 49% , flip to long over 109.9469 (+0.01%), max long over 109.9579 (+0.02%), selling under 108.0239 (-1.74%) to get to -50% , more selling under 108.013 (-1.75%) to get to -100% , max short under 108.013 (-1.75%)

    • [b/s is 0.31% away] GBPUSD, currently -100.0% short, [1.2792], buying over 1.2832 (+0.31%) to get to -49% , more buying over 1.3632 (+6.57%) to get to 50% , flip to long over 1.2833 (+0.32%), max long over 1.3632 (+6.57%)

    • [b/s is 1.62% away] EURUSD, currently -100.0% short, [1.1178], buying over 1.1359 (+1.62%) to get to -49% , more buying over 1.2052 (+7.82%) to get to 50% , flip to long over 1.136 (+1.63%), max long over 1.2052 (+7.82%)

    • [b/s is 2.05% away] USDCNH, currently 100.0% long, [6.9148], selling under 6.773 (-2.05%) to get to -1% , more selling under 6.4014 (-7.42%) to get to -100% , flip to short under 6.773 (-2.05%), max short under 6.4014 (-7.42%)

    • [b/s is 2.92% away] AUDUSD, currently -100.0% short, [0.69055], buying over 0.7107 (+2.92%) to get to -49% , more buying over 0.7511 (+8.77%) to get to 50% , flip to long over 0.7107 (+2.92%), max long over 0.7511 (+8.77%)

 

via ZeroHedge News http://bit.ly/2VvvezZ Tyler Durden

Appeals Court Rules Against White House In Latest DACA Decision

When the White House unveiled President Trump’s new immigration plan earlier this week, Sarah Sanders said the issue of DACA was left unaddressed because it’s just too controversial. Better to leave that one to the Supreme Court and see where the chips fall.

DACA

Not two days later, a federal appeals court in Virginia has ruled against the Trump administration, upholding an earlier determination that Trump’s attempt to rescind DACA protections was unlawful because “it was not adequately explained.”

More from the Hill:

A split federal appeals court on Friday ruled that President Trump’s decision to rescind the Deferred Action for Childhood Arrivals (DACA) program was unlawful because “it was not adequately explained.”

The 4th Circuit Court of Appeals in Virginia found that the administration’s termination of the program was “arbitrary and capricious,” in line with a prior ruling from the 9th Circuit Court of Appeals

The ruling comes as the legal battle over the termination of DACA continues. The Supreme Court is weighing whether to hear several cases over the end of the program.

That sounds like an esoteric technicality, but SCOTUS is presently looking at several cases and their implications for DACA, and it’s very likely SCOTUS will issue the final decision on the matter next year.

via ZeroHedge News http://bit.ly/2VxP4dR Tyler Durden

Beijing Backs Iran, “Firmly Opposes” Unilateral US Sanctions

In the latest sign of Beijing’s frustration with the US, the Chinese leadership have reiterated their opposition to American sanctions against Iran. After a meeting with Iranian Foreign Minister Javad Zarif, Chinese Foregin Minister Wang Yi reiterated Beijing’s ‘firm opposition’ to unilateral US sanctions against Iran.

  • CHINA’S FOREIGN MINISTER WANG YI MEETS IRAN’S ZARIF
  • CHINA FIRMLY OPPOSES U.S.’S UNILATERAL SANCTIONS AGAINST IRAN

With the US moving more firepower into the Persian Gulf, an attempt to send Tehran an unmistakable message, Zarif asked Beijing to try and save the 2015 nuclear deal, WSJ reports.

Iran

Iranian Foreign Minister Javad Zarif and Chinese Foreign Minister Wang Yi.

Zarif’s meeting with his Chinese counterpart is the first step on a tour of Asia, as Iran canvasses its key economic partners now that US sanctions have been reimposed.

Mr. Zarif’s visit to China, where he will meet his Chinese counterpart, is part of a longer trip that includes other key economic partners Russia, Japan and India. It comes amid growing tensions between Washington and Tehran, which spiked over the past week when the U.S., citing unspecified intelligence, deployed an aircraft carrier, a bomber task force and other personnel to the Middle East.

The Iranian embassy in China said on Twitter that Mr. Zarif had “arrived in Beijing to maintain consultations between all-weather friends in the wake of new efforts to manufacture unnecessary tensions.”

China’s Foreign Ministry confirmed Mr. Zarif’s visit but declined to release further information.

The Iranian situation is difficult for Beijing, said Yin Gang, a Middle East politics expert with the government-backed Chinese Academy of Social Sciences. He said the conflict isn’t simply between the U.S. and Iran but between Arab states and Iran. China, Mr. Yin said, “wants a balanced diplomacy in the Middle East, and hopes to make friends and do business with everyone.”

China imports crude from Iran and has expressed reservations about US sanctions in the past. However, given the state of the relationship between Washington and Beijing, the Chinese appear to be signaling that a proxy war over Iran could be just around the corner if Washington doesn’t seriously reevaluate its approach.

via ZeroHedge News http://bit.ly/2JrPfpA Tyler Durden

UMich Sentiment Soars As ‘Hope’ Explodes To 15-Year Highs

After a small dip in April, UMich sentiment was expected to modestly rebound in May but preliminary data shows a huge jump led by a spike in ‘hope’.

The headline UMich sentiument survey printed at its highest since January 2004 led by a spike in expectations:

  • Current economic conditions index rose to 112.4 vs. 112.3 last month.

  • Expectations index rose to 96.0 vs. 87.4 last month.

When asked about prospective trends in the economy, the expected pace of economic growth did not change as much as
consumers’ subjective assessments. Good times during the year were expected by 62% of all consumers in early May, the
highest figure since 68% was recorded in 2004.

“The proportion of consumers who anticipated an economic downturn in the next five years fell to 36%, the lowest level since 2004.”

Short- and longer-term inflation expectations also soared in preliminary May data (1Y jumping to 2.8% from 2.5% and 5-10Y jumping from 2.3% to 2.6%).

Finally, on the downside, favorable judgements about buying conditions for household durables fell in early May to the lowest level in three years. Consumers voiced less favorable views on product prices and judged buy-in-advance rationales more favorably (perhaps due to the hike in tariffs). Favorable home buying attitudes declined slightly and views on home selling rose slightly due to rising home prices. Vehicle buying attitudes, in contrast, inched upward in early May largely due to more positive price perceptions

 

 

 

via ZeroHedge News http://bit.ly/30jlXhQ Tyler Durden

Gartman: “We Make An Official Recommendation To Sell Stocks Short This Morning”

It’s been a while since we updated on the daily doings of the “world-renowned commodity guru” Dennis Gartman for the simple reason that just like the algos, the mom and pops and virtually all hedge funds, Gartman too had no idea what is really going on in a market in which everyone is selling (there is now $135 billion in equity fund redemptions YTD) yet stocks keep rising higher.

That changed this morning when the author of the Gartman Letter finally made an “official recommendation”… one which the bears may find troubling. To wit:

The CNN Fear and Greed Index closed at 39 last evening compared to its most recent low of 32 on Tuesday. Having risen to and just above 70 several weeks ago, the fact that it has broken down through the mid-50’s and is now at 39 is bearish… and we think, very… of equities generally. Strength… as we said Tuesday, Wednesday, Thursday and Friday of last week… as we said here yesterday and as we are saying here again this morning…is to be sold into; weakness is not to be bought and certainly it is not to be bought until the CNN Fear & Greed Index has fallen to below 20 and then turns upward. We are already short of the market in a trade where we are long of “commodities” and short of equities but more needs to be done and shall be.

Also, we draw attention to the chart of the S&P futures at the lower left of p.1 noting very clearly that as that market has risen for the past three trading sessions the volume was and is demonstrably smaller than was the volume as prices fell in the first week and one half of this month. Bull markets survive and extend on rising volume; markets that are rising on lesser volume have to be views as being suspect.

Finally, as noted in the comments attached to the chart in question, the rally of the past three days has taken the S&P back into what we have always referred to as “The Box” that marks the 50-62% retracement of the break that began on May 1st. This has our interest and indeed it has our interest sufficiently enough to finally make an official recommendation to sell stocks short this morning. Heretofore, as noted just above, we’ve been short of stocks against commodities on the long side, but on this rally, we are going net outright short for the first time in quite some long while.

Finally, for those who are asking…

Regarding our retirement account we have maintained our net short position in the equity market as we held to our short derivatives position which we put in place two weeks ago, although following the President’s comments on delaying the tariffs on autos Wednesday we cut the short position back by half, discretion being the better part of valor once again. Yesterday in the early afternoon as the Dow was a bit more than 300 “points” higher we added back half again as much as we covered and it is intention to get back to the entire short position we had had.

Why is any of this important? Well, Ramp Capital (with whom we need to have a trademark conversation one of these days) put it best:

via ZeroHedge News http://bit.ly/2VvIS6a Tyler Durden