Cryptocurrencies Should Be Regulated Like Commmodities, Judge Rules

Nearly two-and-a-half years after the CFTC officially declared that bitcoin and cryptocurrencies more broadly would be regulated like securities, a federal judge has ruled that the agency does, in fact, have the authority to regulate the fledgling asset class, according to the same rules governing energy and metals, effectively defining cryptocurrencies as commodities.

US District Judge Jack Weinstein ruled that the CFTC had the standing to bring a fraud lawsuit against New York resident Patrick McDonnell and his company Coin Drop Markets, permitting the case to move forward. Weinstein also preemptively barred McDonnell and CDM from engaging in commodity transactions, according to coindesk.

“Virtual currencies are ‘goods’ exchanged in a market for a uniform quality and value. … They fall well within the common definition of ‘commodity’,” the judge wrote in the order on Tuesday.

Bitcoin

In the lawsuit, the CFTC alleged that McDonnell and his company had fraudulently offered customers virtual currency trading advice beginning in January 2017. After customers handed over their money, instead of passing along his advice, McDonnell took down the company’s website and stopped responding to customers, the CFTC alleged. CDM also failed to register with the CFTC. McDonnell took down the company’s website and stopped responding to customers. McDonnell, who is representing himself in the case, declined to comment to Reuters.

At issue in the case was whether the CFTC had the authority to regulate cryptocurrency as a commodity in the absence of federal level rules, and whether the law permitted the CFTC to “exercise its jurisdiction over fraud that does not directly involve the sale of futures or derivative contracts,” according to the document.

In both instances, Weinstein answered in the affirmative, meaning the case can be brought against the defendant.

The CFTC  had defined cryptocurrencies as commodities as far back as 2015, a decision that has led the agency to recently target cryptocurrency businesses that it considers are hoaxing investors.

Since Congress hasn’t yet acted to pass a regulatory framework for cryptocurrencies, the CFTC and Securities and Exchange Commission (SEC) have moved ahead with their own, often vague, decrees, like when the SEC ruled over the summer in its finding on the collapse of the DAO that crypto tokens should be regulated and registered according to SEC securities laws.

Banks have already identified crypto as a threat in terms of both the potential for fraud and also as a form of disruptive competition. The bank has made efforts to restrict its customers’ use of bitcoin and other virtual currencies. Citigroup and JPMorgan Chase have also banned purchases of cryptocurrency on their credit cards. However, these regulator vagaries didn’t stop the CFTC from granting exchanges permission to offer bitcoin derivatives like the bitcoin futures offered by the Cboe and CME.

The full ruling is below

via Zero Hedge http://ift.tt/2FnPKLA Tyler Durden

World Stocks, US Futures Tumble On Spike In Trade War Fears

If yesterday world markets were a sea of green as traders bought risk on news that threats of both a nuclear and trade war had sharply receded, today it’s the opposite, and while North Korea has yet to “unexpectedly” test fire an ICBM, Tuesday’s departure of Gary Cohn has all but assured market that a trade war is, after all, just a matter of time.

To be sure, Cohn’s departure – which is widely seen as a victory for the protectionists led by Peter Navarro and immigration hawks – is the only thing analysts and traders are writing about this morning, and while some thing the market’s overnight response, which has seen S&P futures slide over 20 points and the DJIA is set to open 330 points lower, has been exaggerated…

… others disagree, and fear that much more pain is in store, especially if Cohn’s departure is indicative of an imminent trade bombardment by the Trump administration.

The litany is summarized best by Bloomberg which notes that Cohn’s resignation “is a victory for figures who have sought to expunge the Trump administration of advocates for free trade and globalization, principles that have long been a hallmark of the Washington establishment. A registered Democrat, Cohn was regarded as one of the few political moderates close to the president. His absence will amplify voices like Commerce Secretary Wilbur Ross and trade adviser Peter Navarro who back the president’s impulses to buck convention and pick trade fights on a global stage.”

Citi went further, going so far as to compare Gary Cohn to Luke Skywalker:

While heavily-trailed in the press, the market is still mourning the sudden departure of Gary Cohn, the White House’s ‘lonely democrat’ – seen by some as the final bastion of tariff-free international trade. Alas, now the last Jedi has fallen, Trade Wars and a galaxy far, far away now all seems an awful lot closer than before. USD is caught between a more hawkish Fed (Kaplan, Brainard overnight) and an administration that appears ready to shoot from the hip with regards to trade wars.

Echoing what we said 2 weeks ago, when we correctly predicted the coming trade wars when we highlighted the little noticed Peter Navarro promotion, Bank of Singapore’s James Cheo said that “Cohn’s resignation shows that within the Trump administration the pendulum is swinging toward anti-trade,” adding that “what we should be watching out for is how other countries react in response to the tariffs.”

Whatever one thinks of Cohn’s departure, the rising prospect of escalating protectionism has finally spooked algos and sent European and Asian stock markets reeling on Wednesday. As shown above, S&P futures slumped, while most government bonds climbed, sending the yield on the 10Y to 2.84%, where it started the week.

European government bonds rallied, with yields across the euro zone falling by 1-3 basis points, following similar strengthening in U.S. Treasuries overnight.

In Europe, the Stoxx Europe 600 Index headed for the first drop in three days, led by mining and auto shares. European car-makers, which face the risk of a hike in import tariffs to the United States, were among the worst performers, falling 1.1%. The materials sector is underperforming, pressured by the fall in commodity prices fuelled by US API crude stocks printing a build more than twice as expected. 

“The implication is that without the restraining influence of Cohn on Trump, the president will now have a free hand to press ahead with further tariffs and generally up the ante on trade,” said Neil Wilson, an analyst at ETX Capital.
“This in itself does not bode well for risk despite that small boost we saw on news that North Korea could consider de-nuking.”

Earlier in the day, Asian markets also slid earlier as investors contemplated how bad the hit to China would be once Trump unleashes his trade war, a fear which was magnified by the report that the White House is considering clamping down on Chinese investments and imposing broader tariffs added to the gloom. Australia’s ASX 200 (-1.0%) underperformed with sentiment also dragged by weaker than expected GDP figures, while Nikkei 225 (-0.8%) was choppy and briefly found reprieve, before a firmer JPY ultimately weighed. Elsewhere, Shanghai Comp. (-0.6%) and Hang Seng (-1.0%) initially outperformed despite reports US may consider broad curbs on Chinese imports and takeovers, as well as news that ‘China hawk’ Peter Navarro was among the top 2 candidates to replace Cohn as
Trump’s top economic adviser.

Stocks in China and Hong Kong gave up their morning gains, sliding along with other regional markets and U.S. futures; Shanghai Composite Index dropped 0.6%, trimming week’s advance to 0.5% while the ChiNext Index fell 0.7%, paring week’s gain to 0.8%. The Hang Seng Index slides 1% and is experiencing its wildest trading since 2016. The Hang Seng China Enterprises Index declines 1.1%

In other macro developments, the dollar initially tumbled on the Cohn news but has since recovered most losses, while the yen and the Swiss franc were once more in demand, as currencies sensitive to risk sentiment and from countries heavily reliant on trade were sold off as markets raised the odds for more U.S. barriers to trade. On Wednesday morning, the Bloomberg Dollar Spot Index was little changed, while European stocks followed Asia’s slide.

The Canadian dollar and the Mexican peso both retreated by around 0.5 percent against the dollar as Cohn’s departure was seen as raising risks that Washington could walk away from NAFTA negotiations. Other emerging market currencies that typically move in sympathy with the dollar were lower, with the South African rand and Russian rouble both down around 0.5 percent against the dollar.

Separately, overnight we got comments from two Fed speakers, a hawk and a dove: Fed’s Brainard (voter, dove) said gradual US rate hikes are likely appropriate and that there is greater confidence inflation will reach target, while she added that she is encouraged by substantial fiscal stimulus, full employment and above-trend economic growth. Brainard also stated that headwinds are turning into tailwinds, although they are ready to slow or speed up pace of hikes if forecasts are incorrect. Meanwhile, Fed’s Kaplan (non-voter, soft hawk) reiterated that baseline scenario is for 3 rate hikes in 2018 and said that it is too early to change forecasts due to tariffs as it is not yet known what will be implemented. Kaplan added that anything that jeopardizes trade relations with Mexico or Canada is not in US interest.

Commodities fell on worries that trade friction could slow global growth, with Brent crude futures giving up the previous day’s gains to drop 1.2 percent. Copper on the London Metal Exchange lost 0.9 percent, paring a 1.4 percent gain from the previous session.  WTI and Brent crude futures are trading with losses of over 1% this morning, largely following last nights API report which showed a wider than expected build in crude inventories (5.7mln vs. Exp. 2.7mln). As such, WTI initially traded south of the USD 62/bbl level, with Brent briefly below USD 65/bbl before reclaiming the levels. Elsewhere, gold has been trading relatively sideways throughout the morning, having pared its gap higher overnight after initial support from reports of Cohn’s resignation. Good news out of Australia, which reported record high iron ore exports from Port Hedland (largest iron ore loadings port in Australia).

Bulletin Headline Summary From RanSquawk

  • White House Economic Adviser Gary Cohn is to resign and is expected to leave in next few weeks
  • Asian stocks and to a lesser extent their EU counterparts, were seen lower on the news as fears continue to
  • mount over ‘trade-wars’
  • Looking ahead, highlights include US ADP, BoC rate decision, DoEs, Fed’s Bostic, and Dudley

Market Snapshot

  • S&P 500 futures down 1% to 2,697.75
  • STOXX Europe 600 down 0.2% to 370.55
  • MSCI Asia Pacific down 0.6% to 174.05
  • MSCI Asia Pacific ex Japan down 0.6% to 570.66
  • Nikkei down 0.8% to 21,252.72
  • Topix down 0.7% to 1,703.96
  • Hang Seng Index down 1% to 30,196.92
  • Shanghai Composite down 0.6% to 3,271.67
  • Sensex down 0.8% to 33,049.36
  • Australia S&P/ASX 200 down 1% to 5,901.99
  • Kospi down 0.4% to 2,401.82
  • German 10Y yield fell 0.8 bps to 0.667%
  • Euro up 0.09% to $1.2415
  • Italian 10Y yield fell 0.6 bps to 1.729%
  • Spanish 10Y yield fell 4.2 bps to 1.449%
  • Brent Futures down 1.2% to $65.03/bbl
  • Gold spot down 0.2% to $1,332.27
  • U.S. Dollar Index down 0.06% to 89.57

Top Headline News from BBG

  • Gary Cohn’s absence will amplify voices like Commerce Secretary Wilbur Ross and trade adviser Peter Navarro who back the president’s impulses to buck convention and pick trade fights on a global stage
  • The import taxes U.S. is considering would affect companies that help fuel the about $450 billion in Chinese goods imported to America annually. But Chinese manufacturers won’t be the only ones hurt in a trade war, as their close relationships as suppliers to American brands will likely create a ripple effect
  • China’s foreign currency holdings decreased for the first time in more than a year, as rising U.S. Treasury yields weighed on valuations
  • President Donald Trump signaled he’s open to talks with North Korea, even as his advisers expressed skepticism that Kim Jong Un is serious about suspending his nuclear weapons program and engaging in real negotiations.
  • The Trump administration is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property, according to people familiar with the matter.
  • Federal Reserve Governor Lael Brainard said more confidence on inflation warrants gradual interest-rate hikes; suggests tailwinds could speed pace of Fed rate hikes.
  • Opponents of Brexit are looking into whether Britain could postpone its exit from the European Union to give lawmakers and voters more time to weigh up whether they really want to leave.

Asian stocks were mostly lower as US political discord took the limelight once again after reports that National Economic Council Director Gary Cohn is to resign amid tariff disagreements. This latest high-profile and ‘market- friendly’ White House departure dampened the risk appetite and weighed on US equity futures in which Emini S&P gapped lower by about 1% and DJIA futures saw losses of nearly 400 points. ASX 200 (-1.0%) underperformed with sentiment also dragged by weaker than expected GDP figures, while Nikkei 225 (-0.8%) was choppy and briefly found reprieve, before a firmer JPY ultimately weighed. Elsewhere, Shanghai Comp. (-0.6%) and Hang Seng (-1.0%) initially outperformed despite reports US may consider broad curbs on Chinese imports and takeovers, as well as news that ‘China hawk’ Peter Navarro was among the top 2 candidates to replace Cohn as Trump’s top economic adviser. However, gains in Chinese money market rates eventually proved to be the deciding factor and tipped bourses into the red. Finally, 10yr JGBs pared the opening safe-haven inflows to return flat, amid a similar indecisive risk tone in Japanese stocks and following an unchanged BoJ Rinban purchase announcement. PBoC skipped open market operations, but later announced CNY 105.5bln 1yr MLF operation.

Top Asian News

  • Malaysia Central Bank Holds Benchmark Rate as Inflation Eases
  • China Stocks Retreat as Volatility Intensifies on Trade Concerns
  • China’s FX Reserves Snap Yearlong Rising Streak on Valuations
  • Widodo Clears Hurdle for Indonesia to Set Domestic Coal Price

The European cash open took the negative lead from Asia with most major bourses in the red, albeit losses have been pared throughout the session after the departure of NEC Director Cohn spooked investors as the US trade policy may be steered further into protectionist territory while reports from a US administration official stated that White House adviser Peter Navarro and commentator Larry Kudlow are the top two candidates to replace Gary Cohn. Asia-Pacific stocks reacted with a decline across the board.  FTSE 100 (+0.1%) outperforming, supported by a weaker sterling. The materials sector is underperforming, pressured by the fall in commodity prices fuelled by US API crude stocks printing a build more than twice as expected. Rolls-Royce (+12.8%) outperforming on the back of strong earnings. Smurfit Kappa (+3.3%) after US based International Papers confirmed its EUR 8bln offer to the company which was then rejected as an “opportunistic” takeover bid. Telecom Italia (-0.2%) is trading in a choppy fashion after company CEO stated the joint venture with Vivendi’s Canal+ will be put on hold.

Top European News

  • U.K. House Price Growth Slows to Four-Year Low, Halifax says
  • Europe’s Populist Godfather Suddenly Has a Fight on His Hands

In FX, USDJPY and USDCHFto a lesser extent, continues to provide the clearest if not best barometer of broad risk sentiment and the headline pair’s latest retreat from 106.00+ levels highlights the resurgence of aversion prompted by the US President’s import tariff plans. The failure to extend gains on conciliatory gestures from North Korea on the nuclear front to and beyond a key upside Fib just ahead of 106.50 is deemed to be bearish in terms of the technical outlook, while the departure of chief White House economic adviser Cohn is widely perceived as negative from the global trade wars perspective given his more temperate approach towards protectionist policies. 105.50 bids/support now being tested again, and the 2018 low around 105.25 is back on the radar ahead of reportedly big barriers at 105.00. Usd/Chf is sitting roughly in the middle of 0.9400-0.9350 parameters, and the pseudo safe-haven Eur is looking to climb further above 1.2400 vs the Greenback, while eclipsing its previous ytd base against the still Brexit-weighted Gbp to circa 0.8965 (having breached 0.8950 resistance more convincingly). Back to G10 majors, and it’s all change again for the commodity bloc that has reversed gains vs their US Dollar counterpart. Usd/Cad has rebounded over 1.2900 with the Loonie underperforming on the tariff proposals and NAFTA ahead of the BoC policy meeting, which is now even more likely to underscore the need for caution. Aud/Usd is pivoting around 0.7800 after mixed Aussie GDP data overnight and Nzd/Usd is back below 0.7300 as the Aud/Nzd cross holds above 1.0700 in wake of the latest GDT auction showing a dip in prices.

In commodities, WTI and Brent crude futures are trading with losses of over 1% this morning, largely following last nights API report which showed a wider than expected build in crude inventories (5.7mln vs. Exp. 2.7mln). As such, WTI initially traded south of the USD 62/bbl level, with Brent briefly below USD 65/bbl before reclaiming the levels. Elsewhere, gold has been trading relatively sideways throughout the morning, having pared its gap higher overnight after initial support from reports of Cohn’s resignation. Good news out of Australia, which reported record high iron ore exports from Port Hedland (largest iron ore loadings port in Australia). US API Crude Stocks (Mar 2) 5.661M vs. Exp. 2.700M

 

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 2.7%
  • 8:15am: ADP Employment Change, est. 200,000, prior 234,000
  • 8:30am: Nonfarm Productivity, est. -0.1%, prior -0.1%; Unit Labor Costs, est. 2.1%, prior 2.0%
  • 8:30am: Trade Balance, est. $55.0b deficit, prior $53.1b deficit
  • 2pm: U.S. Federal Reserve Releases Beige Book
  • 3pm: Consumer Credit, est. $17.7b, prior $18.4b

Central Banks

  • 8am: Fed’s Bostic Speaks on the Economic Outlook
  • 8:20am: Fed’s Dudley Speaks in Puerto Rico
  • 2pm: U.S. Federal Reserve Releases Beige Book

DB’s Jim Reid concludes the overnight wrap

It all feels a bit 2017 this morning with the two main stories from the past 24 hours revolving around President Trump and North Korea. The big difference now though is that markets appear to be at least hoping that Kim Jong Un’s statement about potentially giving up nuclear weapons has some legs to it, while Trump’s war of words about tariffs doesn’t, although as you’ll see below the news overnight that Gary Cohn is to step down from his role as an economic advisor and also that Trump is considering broad curbs on Chinese imports and investments following an investigation into China intellectual property practices suggests otherwise.

We’ll come to that shortly, but first with regards to North Korea, headlines struck the wires at just after 11am GMT yesterday morning suggesting that North Korea is open to denuclearizing so long as the country’s safety can be guaranteed. North Korea’s leader Kim Jong Un will now meet with South Korea President Moon Jae-in at the end of April to discuss the matter. President Moon Jae-in’s office released a statement saying that “North Korea has clearly expressed its intention for denuclearization on the Korea peninsular, and if there is no military threat, and North Korea’s regime security is promised, they have clarified that there is no reason to hold nuclear weapons”.

President Trump responded by telling reporters that “they seem to be acting positively” and that ”I’d like to be optimistic”. He also suggested that the US would be open to talks with North Korea although Director of National Intelligence, Dan Coats, also added that he was “quite sceptical” and that he was doubtful that this was any sort of breakthrough. After initially starting on the front foot the S&P 500 then ebbed and flowed for much of the session – not helped by some soft corporate earnings numbers in the consumer sector – before eventually ending +0.26% by the closing bell. That’s actually the first <0.50% move up or down since February 22nd.

Meanwhile 10y Treasury yields bounced as much as 4bps from the intraday lows before falling again into the close to finish more or less unchanged at 2.886%. Core European bond markets were broadly 2-3bps higher in yield while BTPs actually rose 7bps from the lows at one stage. The Greenback was weaker versus pretty much all currencies with EM currencies in particular the big winner.

That generally positive sentiment in markets was also attributed to some of the pushback of Trump’s tariff talk from his own administration and party, however that optimism is fading this morning. Initially it started with House Speaker Paul Ryan on Monday night, then yesterday Gary Cohn (an economic advisor to the White House) called on executives from major US companies to meet with the President this week with a view to persuading Trump to back down. However late last night news emerged that Cohn is to resign from his role as Trump’s economic advisor, suggesting that Trump is leaning heavily towards some form of protectionist measures. Needless to say that Cohn’s resignation also leaves further question marks around Trump’s economic agenda. On a similar note, overnight, news has also emerged that Trump is considering further measures, specifically for China imports and investments, supposedly following theft of intellectual property rights. An investigation by the US Trade Representative’s office into China’s intellectual property practices is expected in the coming weeks.

So it feels like these stories have some way to run yet and it’s worth noting that yesterday we also saw the EU respond to Trump’s threats by imposing some of their own, namely putting punitive tariffs on imports of US products including Harley-Davidson, Levi Strauss and Kentucky bourbon. So already some signs of tit for tat but the China developments is not to be underestimated as the investigation has been an issue which has somewhat flown under the radar for markets so far.

This morning in Asia the tone in markets has noticeably shifted following those overnight developments. The Nikkei (-0.80%), Hang Seng (-0.67%), Shanghai Comp (-0.16%) and ASX (-1.01%) are all lower as we go to print, while S&P 500 futures are down over 1%. 10y Treasury yields have also rallied back 3.7bps while bond markets in Asia more generally are stronger. The USD has also continued to weaken (-0.15%) with safe havens like the Yen (+0.49%) and Swiss Franc (+0.34%) stronger.

Staying with politics for now, on this continent markets have quickly accepted that Italy’s political stalemate is likely  to drag on for some time. Indeed if you wanted evidence that the market is not particularly concerned then look no further than the 10y BTP-Bund spread which now at 132bps (4bps tighter yesterday) and pretty much back to Friday’s pre-election level. Keep in mind that it was as wide as 212bps last year in April at one stage. The FTSE MIB bounced back strongly yesterday, notching up a +1.75% gain which was the strongest since February 14th and which also pushed the index back into positive territory YTD.

The DAX (+0.19%) and Stoxx 600 (+0.13%) also finished higher, despite fading a bit, although still remain in the red YTD. It’s worth noting that there was a story yesterday which attracted a bit of attention on Bloomberg suggesting that a rebellion within Renzi’s ruling Democratic Party could support a 5SM led government so it’s worth seeing if that has any legs.

Moving on. While politics continues to dominate the main stories at the moment, central banks should come back to the forefront from Thursday with the ECB and then Friday with the BoJ. In the meantime we’ve also had some  Fedspeak to digest with the Dallas Fed’s Kaplan (neutral/non-voter) yesterday speaking live on CNBC. He reiterated that 3 rate hikes is appropriate in 2018 but also that “I think we should get started sooner rather than later”. He also highlighted that the US economy is “either at or beyond full employment now” and so therefore a gradual pace of hikes is necessary. Kaplan was also asked a question about Trump’s tariffs threats although had a fairly straight bat approach response, saying that “our trading relationship with Canada and Mexico is critical to US competitiveness and US jobs”. Overnight we’ve also heard from the Fed’s Brainard, with her tone sounding a bit more upbeat than usual.  Specifically she said that “stronger tailwinds may help re-anchor inflation expectations at the symmetric 2%  objective” and that “with greater confidence in achieving the inflation target, continued gradual increases in the federal funds rate are likely to be appropriate”.

Here in the UK, the most significant Brexit news yesterday was comments from DUP leader Arlene Foster following a meeting with the EU’s Michal Barnier. Foster said that the current draft “has omissions and overreaches” and that there will therefore “be a need to negotiate”. So expect this to rumble on despite time clearly not being on the UK’s side.

Switching to the data now, yesterday’s releases were a bit of an afterthought but for completeness, in the US January factory orders printed at -1.4% mom which was bang in line with the consensus, while final durable and capital goods orders for the same month were revised up one-tenth to -3.6% mom and down one-tenth to -0.3% mom. There was no data of note in Europe yesterday.

To the day ahead now. The highlight this morning in Europe should be the final revision to Q4 GDP (consensus for no change to +0.6% qoq) along with the various growth components. Away from that we’ll get February house price  data in the UK and the January trade balance in France. This afternoon in the US the most notable release should be the February ADP employment change report which is generally seen as a bit of a precursor for payrolls. The  consensus is for a 200k print while our US economists are slightly below that at 175k. Also due out are the final Q4 revisions for nonfarm productivity and unit labour costs, along with January consumer credit. The Fed is also due to release the Beige Book in the evening. The Fed’s Bostic will also speak this afternoon at 1.00pm GMT on the economic outlook while the Fed’s Dudley is scheduled to speak at 1.20pm GMT although his speech is expected to concern the status of hurricane recovery efforts in the Caribbean. Finally keep an eye on Brexit related headlines once again with ambassadors from all EU countries (except the UK) due to meet in Brussels to hold their first meeting on draft guidelines between the EU and UK.

via Zero Hedge http://ift.tt/2oYSZBU Tyler Durden

Trader: “Cohn’s Resignation Is Far Worse Than Markets Think”

With the S&P down some 25 points and the Dow Jones set to open nearly 350 points lower, one can argue that the market response to Gary Cohn’s resignation has been somewhat exaggerated.

Others, however, like Bloomberg macro commentator and former Lehman trader, Marc Cudmore, claim this morning that the market reaction to Gary Cohn’s resignation as Trump’s top economic adviser has been “surprisingly resilient.”

The reason is that Cohn’s resignation is far worse than the market seems to think, and is why Cudmore is convinced that the market’s contained response “won’t sustain” and that “equity markets will suffer more in the days ahead.”

He explains why in his latest macro view.

Cohn Resignation Is Worse Than Markets Seem to Think: Macro View

The market reaction to Gary Cohn’s resignation as Trump’s top economic adviser has been surprisingly resilient. That won’t sustain.

The bullish interpretation would be to focus on global equities largely taking this news in their stride. Sure, there have been pullbacks, but there’s no sign of broad panic and no hint that it portends a worse environment to come. Such complacency is a mistake.

The multitude of ways this is bad for markets hasn’t yet been fully processed, partially due to the timing. When the news broke, most U.S. traders were in the bar or on their way home, while European investors were fast asleep.

Cohn’s resignation suggests Trump is prioritizing his trade war over any potential negative reaction from U.S. stocks, whose performance he has previously treated as a reliable barometer of his success and appeal.

Combined with threats of broader measures against China and talk of European retaliation, this is worrying for global trade and hence damaging for global growth. Emerging markets, relatively complacent so far, may be particularly vulnerable.

The negative impacts won’t stop there, though. The U.S. financial industry sector just lost its key ally in the administration, which can erode confidence for that sector and beyond into the wider economy.

The whole Trump administration is undermined by yet another high-profile departure. And it’s widened the rift between the president and senior Republicans.

Sure, we have no idea exactly how this will play out. And yes, it may all eventually be seen as a storm in teacup. But that’s a potential narrative for a few weeks time. Cohn quitting has effectively released the handbrake on escalating trade tensions.

For now, there can be no conviction about where this will stop. And uncertainty breeds contempt toward adding to risk. Equity markets will suffer more in the days ahead.

 

via Zero Hedge http://ift.tt/2FlSo8E Tyler Durden

Moldova, Georgia, Ukraine Create New Anti-Russian, Pro-NATO Alliance

Authored by Alex Gorka via The Strategic Culture Foundation,

All over the world, public attention has been riveted on Russia’s reemergence as a military superpower, now that President Vladimir Putin has revealed his new weapon systems in his address to the Federal Assembly on March 2. The US ambitions to attain arms superiority have come to naught. But its anti-Russian policy cannot be reduced to mere attempts to achieve military supremacy. The countries of the former Soviet Union have become a political battlefield, with the US and its allies doing their best to decrease Russia’s influence.

With America’s tacit approval, the GUAM bloc, chaired this year by Moldova, is being revived.

Last March, the prime ministers of Georgia, Ukraine, Moldova, and Azerbaijan held a meeting (Baku was represented by its deputy PM) in Kiev. It was the first high level meeting since 2008. The cooperation agreement signed by those foreign ministers last October mentions a free trade zone. The GUAM organization is expected to hold a summit this June. Three of its members – Ukraine, Moldova, and Georgia – act as tools for advancing America’s interests in the region. With the blessing of the US, they signed EU association agreements in 2014. The 2018 foreign-policy priorities list drafted by Moldova includes mention of the US, the Visegrad group, and Japan. According to Chisinau, the countries of the former Soviet Union – long-standing partners with which it shares historical ties – don’t deserve such an honor.

The speakers of parliament from these three countries took part in a security conference in the Moldovan capital titled “Georgia, Moldova and Ukraine: Eastern Partnership and Current Security Challenges,” which was held on March 2 and attended by about 150 senior officials and experts from different countries. Of course US lawmakers and pundits were among the participants. As usual, the Atlantic Council, an American think tank that always supports neo-cons and anything anti-Russian, could not miss the chance to kindle anti-Moscow sentiments. Damon Wilson, its executive vice president, announced that the US was carefully watching over Moldova, Ukraine, and Georgia, claiming that they “wish to become part of our family,” as he put it.

The parliamentary leaders seized the opportunity to issue a joint statement condemning Russia’s military presence in what they believe to be their respective states’ territories. The document was published in English to reflect the pro-Western tilt of the three-state group. They are “concerned profoundly” over Russian troops in Moldova (1,000 troops and 500 peacekeepers stationed in Transnistria) and what they call “occupation” and “intervention” in some parts of Ukraine and Georgia.

As usual, Moscow is blamed for supporting “separatist movements” and other nefarious acts. The speaker of the Georgian parliament, Irakli Kobakhidze, said an anti-Russian alliance is needed, because only if they are united can these nations stand up to the “challenges” coming from Moscow. “We need joint strategies to face Russia’s aggression,” chimed in Andriy Parubiy, the speaker of the Ukrainian Rada. To dispell any doubts about the new groups’ allegiance to NATO, he emphasized that “On this occasion I would like to speak of the threats faced not only by our region, but also by the Euro-Atlantic zone.”

The idea of reviving this alliance that was designed to counter Russia has failed. Azerbaijan refused to take part in any conference with such a clear anti-Russian agenda. That event demonstrated that there is no unity on Russia within the ranks of GUAM. So, GUAM is actually GUM – a group of three states that have been heavily influenced and pressured by the Americans and which are being used to “contain” Russia and forced to serve as NATO springboards.

These three states could maintain friendly relationships with everyone and stick to a neutral policy. Cooperation with the Eurasian Union could benefit their economies. Good relations with Moscow would not hinder their ties with the EU or other institutions or states, including the US. They could simply refrain from taking sides and concentrate on the well-being of their people. But no, they have chosen to adopt an attitude that is hostile to Russia and join those who are confrontational toward Moscow.

On March 2 the three member states actually announced the creation of a new anti-Russian alliance that will negatively affect the political landscape in Eurasia. The immediate objective is to push Russia out and pull the US in.

Ukraine is a divided nation, plunged in crisis, and unable to fight its own entrenched corruption.

Moldova is facing an election in the fall and the so-called pro-Russian forces are predicted to win.

In Georgia, the idea of NATO membership does not have the support of the majority of the population, according to a recent poll. But the governments of these states are pushing the NATO agenda. They coordinate their political activities in order to counter Moscow in any way they can. For instance, they always vote for Ukraine in the PACE, strongly oppose the Nord Stream gas project, and continue to move closer to NATO.

Moldova has announced its decision to buy lethal weapons from NATO members. Its government is chomping at the bit to join “Western institutions.” Ukraine is home to a US naval facility and is scheduled to receive American lethal arms. Tbilisi is pursuing a “more NATO in Georgia and more Georgia in NATO” policy.

What brings them together? All three states are ruled by oligarchs who obstruct reforms. With their economies in dire straits, the ruling elites promise their people paradise if they join the EU and NATO and become good friends of the US. Adopting an anti-Russia policy is their payment for Western aid and support. Their own national interests and sovereignty are being exchanged for crumbs dropped from the master’s table. 

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Belgium Begins Free Distribution Of Iodine Pills “In Case Of Nuclear Disaster”

As part of the government’s new nuclear safety policy, as of today, every Belgian citizen can come to a pharmacy and get free iodine pills.

Belgium has two nuclear plants, Tihange and Doel, with a total number of seven reactors, and is one of the world’s most nuclear-reliant nations…

In 2017 alone, there were seven incidents at the facilities.

Free distribution of iodine tablets has started in Belgium as a precautionary measure in the event of a nuclear catastrophe, the Belgian Pharmaceutical Association told Sputnik on Tuesday. Before March 6, only those living within 20 kilometers (12 miles) from nuclear sites were entitled to receive the medication free of charge.

As SputnikNews reports, Belgium’s neighbors, Germany and the Netherlands, are concerned over the safety of the kingdom’s ageing nuclear reactors.

In 2016, Germany requested Belgium to shut down its two reactors because of defects found in their pressure vessels, but the kingdom refused. In September 2017, citizens of Aachen, a western German city located 70 kilometers (43 miles) away from the Belgian Tihange, started getting free iodine tablets.

In 2016, the Netherlands started distributing the pills to people who lived within a 100-kilometre (62-mile) radius of the neighboring Dutch Borsselle and Belgian Doel plants.

So how would a population react to their government offering iodine pills – just in case… Fear, of course!

Scared people are not rational, they’ll buy virtually anything that promises to alleviate their fear. Every totalitarian, every proponent of curtailing freedom, knows this. It’s the equivalent of the smoking hot babe: fear sells government.

Not reassuring

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Italy Going Boom

Authored by Jeffrey Snyder via Alhambra Investment Partners,

There may come a time not too much further down the road when Brexit will have been not quite forgotten but placed into a second tier of European disintegration. In that top level, if it should continue, would reside all on its own Itexit. The Italians not the Britons will goad the question of the euro, and therefore the whole of the European experiment.

By now, the formula is a familiar one. If you are against tighter integration and European Union, then you are a fascist xenophobe, a racist of the first order. Rather than dissuade voters, this has, it appears, worked against those using the slurs who fervently hope to keep the experiment for much longer.

Complete vote tallies are not yet available, but by all accounts the Italians in heavy turnout voted heavily yesterday for anti-establishment, anti-euro parties. Though the Italian parliament could be in for a mess in the near future, euroskepticism and anti-establishment fever dominated to a much greater degree than anticipated (for yet another election). Even the mainstream commentary written ostensibly to describe what’s going on can’t refrain from locking out reality:

After establishment parties managed to contain populists in German, French and Dutch elections over the past twelve months, their defenses were overwhelmed in Italy as voters rebelled against two decades of lackluster economic growth and a surge in immigration. The upshot is a far more unpredictable partner for European leaders such as Angela Merkel and Emmanuel Macron as they face the U.S. threat of a trade war while trying to reform the bloc.

This Bloomberg article (predictably) distills Italian economic angst as “two decades of lackluster economic growth” for the transparent purposes of delegitimizing voter dissatisfaction. A more honest paragraph would have been, “It’s been bad for twenty years, why are they now rebelling? Immigrants.” It wouldn’t have been any more true, just stripped of its obvious bias and the misanthropic intentions behind it.

It is technically true that Italy’s economy has been one of the more chronic underperformers, and yet it still can also be the case where that underperformance has changed. Up until 2008 or so, Italians may have been characterized as if not satisfied then at least apathetic about the lackluster nature of their economy under the euro. I don’t think that’s actually true, however, as the EU itself was popular in that country up until the worldwide “dollar” panic.

What explains the revolt now is the recovery from that panic; or the lack thereof. As I’ve written before, the dynamic becomes explosive simply because the Italians, like Americans and everyone else, have been told repeatedly that their economy has not just recovered but recently it is booming. For many, it might be.

That’s not the issue, however, as in any economy there are always proportions doing well and those not doing well. When far too many reside, and stay, in the former, that’s where trouble starts. And when those people left out of whatever economy hear repeatedly that things are really good and they can’t find exactly where that may be, mistrust and blame are surely the only guaranteed results.

The irrational fear of robots is of the same predicament. In not being given any candid answers, people will make up their own minds as to why they can’t seem to experience these boom times. Immigration is a similar if more complex issue (we have to take into account social as well as economic factors).

But even that general review understates the severity of the problem to a considerable extent. Even those who are employed, which is significantly less in Italy as a proportion of the population, they aren’t making much if any progress, either. This lack of opportunity can and does become palpable, a frustration that must be met with honest assessment but in this lost decade rarely if ever is.

Economists don’t countenance anything but recovery. It doesn’t matter how much evidence is stacked up against it, they will claim it’s there, or if pressed that it will be here tomorrow.

This view starts with a conclusion and then seeks evidence for it. The technocracy is defended at all costs, even when it’s most striking feature is its total incompetence. In July of 2012, Mario Draghi promised to “do whatever it takes” to preserve the currency, and thus in political terms to keep the integration dream alive.

Most people saw it as a noble gesture, the hard-pressed efforts of a committed statesman to help out the ordinary folks of Europe suffering under financial repression for reasons they couldn’t understand. These people should have instead heard Mario Draghi for what he was, an utterly confused near lunatic:

The euro is like a bumblebee. This is a mystery of nature because it shouldn’t fly but instead it does. So the euro was a bumblebee that flew very well for several years. And now — and I think people ask “how come?”– probably there was something in the atmosphere, in the air, that made the bumblebee fly. Now something must have changed in the air, and we know what after the financial crisis.

Like his predecessor Jean-Claude Trichet or Ben Bernanke, his counterpart at the Federal Reserve in the US, Mario Draghi has no idea what happened in 2008, or, for that matter, what happened again in 2011. His central bank like all central banks is trying to fix a problem they can’t understand, and the effect of doing so is that nothing ever gets fixed.

People might be understandably upset by that fact. It doesn’t take much to acknowledge that these voters might have a case, legitimate criticisms that have nothing whatsoever to do with the darker side of Europe’s tragic history. Economics, however, is the most fragile discipline perhaps ever invented; it prevents even a modicum of honest introspection, largely because it is more of a political force (farce) than a scientific one.

Nowhere is that more evident than in Europe. The risk to the European political situation is not really all that complex. It is easily attributed to the one thing nobody is allowed to question:

The threat to the euro is today greater than it was in 2012, and for that Draghi has completely failed. It comes not in Target II imbalances and Greek default penalties, but in political upheaval tied directly to what it is that Mario Draghi can’t seem to figure out. He can promise all he wants, but Europe’s fate will not be determined by his euro.

It’s recovery or bust for Europe, the same choices as are being faced around the rest of the world for the very same prolonged stagnation. In China, as noted earlier, they are moving in preparation, it appears, for the bust. European voters might seem as irrational, but only if you think the euro was and is like a bumblebee in the capable hands of the brilliant technocratic beekeepers.

It hasn’t been two decades of economic problems, just the last one has been more than enough to turn Italy against that which it once enthusiastically embraced. The breakup began in monetary destruction, nurtured by mistake after mistake, and now moves ever closer to completion drawn forward upon technocratic uselessness covered only by political shrillness. Are we really supposed to wonder why it hasn’t been a winning formula at the ballot box?

If anything, I think Italians, the British, Americans, etc., have until recently all shown remarkable restraint. They gave the technocrats the benefit of the doubt time and again, with dubious policies and experiments and then promises that haven’t come close to being kept. Ten years is a long, long time for nothing being accomplished. That’s really all there is to it. It’s just that simple. 

You want to save Europe? You can start by ending all this blatantly dishonest boom nonsense.

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NYT Admits ‘Trump Is Right’ About Grenade & AK-47 Attacks In Sweden

Update: During President Trump’s joint press conference with Swedish Prime Minister Stefan Lofven today, he reminded everyone that he was right about his view of immigration policies in Sweden.

“Now that you spend some time with our prime minister, how do you view Sweden, in general?” the reporter asked.

“What is your take? And also on our immigration politics?”

“Certainly you have a problem with the immigration,” Trump replied.

“It’s caused problems in Sweden. I was one of the first ones to say it. I took a little heat, but that was okay, because I proved to be right.”

*  *  *

As we detailed earlier, in the latest installment of our focus on Sweden, the New York Times diverted from the establishment media playbook, publishing an astonishing report detailing Sweden’s increasing problem with immigrant gangs using hand grenades and Kalashnikovs in crime sprees across the country — more than a year after the dying liberal paper scolded President Trump for bringing awareness to the issue.

The NYT — which titled the weekend piece “Hand Grenades and Gang Violence Rattle Sweden’s Middle Class,” uncovers the troubling truth of what the mainstream media was not permitted to share with the rest of the world for the past year: weapons of war ended up in the hands of refugee gangs on the streets of Sweden.

Weapons from a faraway, long-ago war are flowing into immigrant neighborhoods here, puncturing Swedes’ sense of confidence and security. The country’s murder rate remains low, by American standards, and violent crime is stable or dropping in many places. But gang-related assaults and shootings are becoming more frequent, and the number of neighborhoods categorized by the police as “marred by crime, social unrest and insecurity” is rising. Crime and immigration are certain to be key issues in September’s general election, alongside the traditional debates over education and health care.

The article centers on the death a 63-year-old man in the town of Varby Gard, a suburb of Stockholm. He was killed in early January after an object on the ground exploded outside a subway station. He had picked up an item believing it was a toy that turned out to be a live hand grenade — killing him instantly.

According to NYT, the M-75 hand grenade was manufactured in vast quantities for the Yugoslav national army and then seized by paramilitaries during the civil war in the 1990s. Each grenade packed with plastic explosives and 3,000 steel balls, is well suited for close combat and urban warfare, and perhaps why it is the weapon of choice of rogue refugee gangs in Sweden.

The NYT says Stockholm’s Police have graphed the hand grenade incidents in the country and have found a troubling relation: out of control hand grenade attacks coincide with the influx of refugees starting in 2015 and beyond:

Affixed to the wall in Mr. Appelgren’s office in Stockholm’s Police Headquarters is a chart showing the increase in the use of hand grenades. Until 2014 there were about a handful every year. In 2015, that number leapt: 45 grenades were seized by the police, and 10 others were detonated. The next year, 55 were seized and 35 detonated. A modest decrease occurred in 2017, when 39 were seized and 21 were detonated.

“I think we’re going to see, if we don’t stop it, more drive-by shootings with Kalashnikovs and hand grenades,” Appelgren warned.

“They throw rocks and bottles at our cars, and they trick us in an ambush. When will it happen that they ambush us with Kalashnikovs? It’s coming,” he added.

Even Linda Staaf, head of intelligence at the Swedish Police National Operations Department (NOA) said, “Research is needed to provide a precise answer on whether the use of hand grenades has increased in Sweden, but we do believe that in part it has become a trend.”

Now the security situation in Sweden is so critical that Prime Minister Stefan Lofven recently said, he will do whatever it takes, including sending in the Swedish Armed Forces to end the horrible gang violence conducted by refugees.

Last month, we reported that Sweden is preparing to distribute civil defense brochures to some 4.7 million households, warning them about the onset of war. Put two and two together, and it seems the country is gearing up for a civil war on its streets, as the country’s military is preparing to battle heavily armed refugees who have stockpiled hand grenades and Kalashnikovs.

This time last year, Trump drew harsh criticism from mainstream media outlets including the NYT for making common sense observations — linking the mass Muslim immigration wave to an uptick in crime in Sweden.

Here is how the NYT called out Trump:

One of his viewers agreed, and in that moment was born a diplomatic incident that illustrates the unusual approach that President Trump takes to foreign policy, as well as the influence that television can have on his thinking. After watching the program, Mr. Trump threw a line into a speech the next day suggesting that a terrorist attack had occurred in Sweden the night before.

Just like that, without white papers, intelligence reports, an interagency meeting or, presumably, the advice of his secretary of state, the president started a dispute with a longtime American friend that resented his characterization and called it false. The president’s only discernible goal was to make the case domestically for his plans to restrict entry to the United States.

The Swedes were flabbergasted.

“We are used to seeing the president of the U.S. as one of the most well-informed persons in the world, also well aware of the importance of what he says,” Carl Bildt, a former prime minister of Sweden, said by email on Monday. “And then, suddenly, we see him engaging in misinformation and slander against a truly friendly country, obviously relying on sources of a quality that at best could be described as dubious.”

One year later, the NYT is now reporting on the same issue it once demonized President Trump for. The concerning factor at play is if the Prime Minister triggers the Swedish Armed Forces to halt the refugee crime spree, which it could very well unfold into a civil war in the no-go zones throughout the country. Sweden’s civil defense is preparing to send out some 4.7 million survival brochures to households warning about the onset of a war. Sweden is a “shithole.”

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Nuclear Weapons And Great Power Politics Are Here To Stay

Authored by Federico Pieraccini via The Strategic Culture Foundation,

When talking about nuclear weapons, it is necessary to clarify some important points before delving into complicated reasoning.

Nuclear weapons are here to stay, and anyone who believes in a progressive denuclearization of the globe is sadly mistaken. Try asking any Indian, Pakistani, Chinese, Russian or American policy-maker what they think about abandoning their nuclear weapons and they will tell you that it will never happen. To believe that a country would be willing to simply abandon its most powerful weapon and means of deterrence is simply unrealistic. Nevertheless, I would like to emphasize in this article how nuclear weapons are crucial to a stable future world order. Any reasonable person possessing a magic wand would wish to make vanish a weapon that is capable of eliminating humanity. The problem is that in the real world, this possibility does not exist and nukes are here to stay.

There is the valid argument that the absence of nuclear weapons would have greatly altered the balance during the Cold War, leading to a massively devastating war between the two superpowers of the time, even if only fought conventionally. In this two-part series I will try to argue how nuclear weapons can, especially in the future, be a guarantor of peace rather than posing the threat of global destruction. One always has to keep in mind the great risk that humanity has placed itself in with the invention of such a destructive weapon: they are a sword of Damocles hanging over the destiny of humanity. For this reason, a balance between great powers is necessary in order to ensure that a nuclear catastrophe can never happen.

In order to be able to advance this analysis in a sensible and realistic way, it is necessary to recall the history of the last century and observe the behaviour of the nations involved. Without focusing too much on the details, it is commonly recognized that the prelude to the First and Second World Wars was characterized by growing clashes between the powers. The composition of the international framework was varied, with countries like Germany, the United Kingdom, Japan, France, the United States and the Russian Empire/Soviet Union in constant competition with each other, stemming from their strong growth at the time combined with their imperialist tendencies. History has shown how a multipolar environment with several powers competing provides the perfect recipe for conflict, resulting in the millions of deaths we saw in the two world wars. In international relations, a multipolar environment is generally held to be unstable and difficult to control and predict by a single power. Not surprisingly, Multipolarity refers to a situation where several powers compete with each other without any one of them being able to dominate one or more of the others. Such an unstable balance has often resulted in one or more of these powers triggering devastating conflicts in an effort to achieve regional or global hegemony.

The conclusion of the Second World War ended the period of Multipolarity, with only two competing global powers remaining on the world stage. The Soviet Union and the United States achieved their maximals aims in terms of post-war influence, fundamentally reorienting international relations. The substantial military and strategic balance between these two powers, leading to a bipolar world order, was characterized by nuclear weapons, a technological innovation that would forever alter the nature of the balance of power between countries.

On August 6, 1945, the world became aware of the destructive power of the atomic bomb when Japan lost about 80 thousand citizens in Hiroshima in a blink of an eye. The second atomic bomb dropped on the city of Nagasaki on August 9, 1945, ushered in a new and delicate reality governing international relations. The balance of power turned decisively in favour of the United States, with all global risks that this entailed. It is now in the public domain that Truman intended to scare Stalin, and impose a new global order favouring the United States, through the practical demonstration of nuclear power visited on Japan. Declassified documents show that the plan for global domination was already in the minds of American military planners before the conclusion of the Second World War. Since the USSR was the only remaining rival power, it should not come as a surprise that the CIA and other policy-makers were contemplating decapitating the Soviet Union with nuclear strikes. The intent was to get rid of the only existing adversary and pave the way for American military, economic, political and cultural domination over the entire globe.

The first part of this analysis leads us to the first counterintuitive conclusion. Although all of humanity is aware of the devastating consequences of nuclear weapons, it was not until August 29, 1949, with the first Soviet nuclear test, that a new balance of power was established. In this context, the term Mutually Assured Destruction (MAD) was coined, referring to the capacity of nuclear-armed powers to obliterate each other in a nuclear exchange. Therefore, such an exchange would not benefit either party, since it would only bring about a nuclear winter from which no winner could emerge.

The pressing need to balance the United States drove the Soviet Union to develop its own nuclear weapons. This need for deterrence remains valid today, with North Korea recently demonstrating this by developing nuclear weapons to deter aggressive US foreign policy. Since the 1950s, Washington has sought to overthrow North Korea’s political leadership and expand its sphere of influence throughout the country, as it did with South Korea in the years following the Korean War. But thanks to Pyongyang’s nuclear weapons, US plans for invasion and conquest have had to be downsized to empty threats and bluster. The frustration evident in the statements of Washington’s hawks derives from the impotence that North Korea’s nuclear deterrent reduces them to. In reality, however, North Korea’s conventional deterrence alone is enough to give pause to the designs of any potential aggressor designs, a subject I have covered.

That nuclear weapons alter the balance of power in international relations remains as valid today as it ever did. It is important to reach another parallel conclusion concerning situations experienced during the Cold War. Historical examples have emerged recently whereby Russian or American military personnel risked unleashing a nuclear apocalypse as a result of electronic malfunctions or incorrect risk perceptions. But it is nevertheless unsurprising that no nuclear exchange resulted from any of these instances. Human reasoning, even among mortal enemies, pauses to consider the consequences of Armageddon, at the critical moment exercising sufficient doubt on the matter to avert resorting to the most destructive weapon ever created by man.

I have previously maintained that a nuclear war would not favour anyone and would therefore be highly unlikely. The counterargument often offered is that of the risk of an accident or miscalculation resulting in nuclear conflagration. Yet even this scenario presented itself several times during the Cold War and failed to result in thermonuclear war. Errors are inherent in technology, but history has shown the propensity for good sense to prevail when the stakes are so high.

The case of the Cuban missile crisis is illustrative. Although the US and the USSR were not on the verge of nuclear war in 1962, the tensions reached during those few months are still remembered as one of the most delicate and dangerous moments in history. The reason is clearly linked to all that we have discussed thus far. A war between powers in a bipolar world order would certainly have seen the attempt of one side to overpower the other in an effort to achieve global hegemony. It is easy to imagine a war between superpowers escalating to nuclear warfare, with disastrous consequences for humanity. Once again, we should not be surprised by a de-escalation of the situation. A clarifying call between JFK and Khrushchev ended the Soviet attempt to mirror the threat posed by the Americans in Europe by deploying its own weapons to Cuba, thereby violating the Monroe Doctrine. (In 1962, Washington deployed in Turkey the famous Jupiter missiles, which Moscow considered an existential threat that threatened the doctrine of MAD by nullifying Moscow’s retaliatory second-strike capability.

Thanks to a balance of power in a bipolar environment and the danger posed by a nuclear exchange, the possibility of direct conflict between the great powers was avoided throughout the Cold War. In the next and final article, I intend to explain why nuclear-armed powers in a Multipolar World Order decrease the likelihood of a nuclear apocalypse, as counterintuitive as it may seem.

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World’s Largest Crypto Exchanges Are Raking In $3M A Day

It doesn’t matter whether the price of bitcoin (or any other cryptocurrency) is rising or falling. The exchanges that execute the bulk of global crypto transactions are winning either way.

As Bloomberg points out, while investors have fixated on the massive price appreciation across cryptocurrency pairs, in reality, it’s the exchanges that are pulling in the real money. The largest exchanges are generating as much as $3 million a day in fees – an amount that could eventually reach more than $1 billion for the year.

And that’s using the lowest range of the fee scale…

“The exchanges and transaction processors are the biggest winners in the space because they’re allowing people to transact and participate in this burgeoning sector,” said Gil Luria, an equity analyst at D.A. Davidson & Co, who reviewed the methodology for the revenue estimates.

“There’s a big business there and it would not surprise me if they’re making hundreds of millions of dollars in revenue and possibly even billions a year.”

Tokyo-based Binance, which has a reputation for listing almost every ICO, and Hong Kong-based OKEx are handling the largest volume of trading, equal to about $1.7 billion daily. Based on fees of 0.2 percent, which are higher than OKEx’s 0.07 percent for the most active traders, Binance is probably bringing in the most cash. Binance, which first launched in July, has experienced growth that’s unprecedented, even for the world of cryptocurrencies.

Huobi, Bitfinex, Upbit and Bithumb, all of which are also based in Asia, are next in the rankings. These exchanges process between $600 million and $1.4 billion of trading volume and charge fees of 0.3 percent on average.

Crypto

More than half of the crypto currency trading happens on Asia-based exchanges, according to data compiled by smart contract platform Aelf. “They don’t make users go through the know-your-customer process until withdrawal,” Slaughter said. “It’s a complicated process. You can lose customers in the two or four hours that it takes. In Binance, you can go from not having an account to having funds on an account in less than 20 minutes.”

South Korean exchange Upbit, which is among the top five in trading volume, only started operating in October. It’s controlled by Dunamu Inc., which also owns Kakao Talk, the most popular messaging app in Korea. Upbit is integrated in Kakao Talk and lists over 120 cryptocurrencies, thanks to a partnership with the US-based exchange Bittrex.

All of the exchanges are privately held and only a few years old, which often means it’s difficult to pinpoint financial information or details about their management – and indeed, as we’ve pointed out before, some of the largest exchanges have attracted the scrutiny of regulators due to their shady business practices. HitBTC, the 10th largest, doesn’t provide any information on who runs it or where the firm is based, even as customers asked these questions on the exchange’s forum. Bit-Z, WEX and EXX, among the 20 biggest by trading volume, are some of the others that don’t provide those details either.

However, competition from established financial institutions – like, say, Goldman Sachs –  public companies and traditional financial firms may push crypto exchanges to be more transparent and even reduce costs.

“More conventional businesses like banks and funds are likely to acquire crypto platforms at some point to make sure they have a strategic foothold in the market,” he said. “It’s a no-brainer. Financial services is where all the real business revenue in crypto is,” said Chris Slaughter, co-founder of crypto investment platform Samsa.

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Dictator For Life: The Rise Of The American Imperial President

Authored by John Whitehead via The Rutherford Institute,

I’m not a fan of Communist China.

It’s a vicious totalitarian regime that routinely employs censorship, surveillance, and brutal police state tactics to intimidate its populace, maintain its power, and expand the largesse of its corporate elite.

Just recently, in fact, China – an economic and political powerhouse that owns more of America’s debt than any other country and is buying up American businesses across the spectrum – announced its plan to make its president, Xi Jinping, president for life.

President Trump jokingly thinks that’s a great idea.

Trump thinks the idea of having a president for life is so great, in fact, that America might want to move in that direction. Maybe we’ll have to give that a shot someday,” joked Trump.

Here’s the thing: we already have a president for life.

Sure, the names and faces and parties have changed over the years, but really, when you drill down under the personalities and political theater, you’ll find that the changing names and faces are merely cosmetic: no matter who sits on the throne, the office of the president of the United States has, for all intents and purposes, become a unilateral power unto itself.

Although the Constitution invests the President with very specific, limited powers, in recent years, American presidents (Trump, Obama, Bush, Clinton, etc.) have claimed the power to completely and almost unilaterally alter the landscape of this country for good or for ill.

The powers amassed by each successive president through the negligence of Congress and the courts—powers which add up to a toolbox of terror for an imperial ruler—empower whomever occupies the Oval Office to act as a dictator, above the law and beyond any real accountability.

The presidency itself has become an imperial one with permanent powers.

As law professor William P. Marshall explains, “every extraordinary use of power by one President expands the availability of executive branch power for use by future Presidents.” Moreover, it doesn’t even matter whether other presidents have chosen not to take advantage of any particular power, because “it is a President’s action in using power, rather than forsaking its use, that has the precedential significance.”

In other words, each successive president continues to add to his office’s list of extraordinary orders and directives, expanding the reach and power of the presidency and granting him- or herself near dictatorial powers.

So you see, we have been saddled with a “president for life”—i.e., a dictator for life—for some time now.

This abuse of presidential powers has been going on for so long that it has become the norm, the Constitution be damned.

The government of laws idealized by John Adams has fallen prey to a government of men.

As a result, we no longer have a system of checks and balances.

All of the imperial powers amassed by Barack Obama and George W. Bush—to kill American citizens without due process, to detain suspects indefinitely, to strip Americans of their citizenship rights, to carry out mass surveillance on Americans without probable cause, to suspend laws during wartime, to disregard laws with which he might disagree, to conduct secret wars and convene secret courts, to sanction torture, to sidestep the legislatures and courts with executive orders and signing statements, to direct the military to operate beyond the reach of the law, to operate a shadow government, and to act as a dictator and a tyrant, above the law and beyond any real accountability—were inherited by Donald Trump.

These presidential powers—acquired through the use of executive orders, decrees, memorandums, proclamations, national security directives and legislative signing statements and which can be activated by any sitting president—enable past, president and future presidents to operate above the law and beyond the reach of the Constitution.

These are the powers that will be passed along to each successive heir to the Oval Office.

This is what you might call a stealthy, creeping, silent, slow-motion coup d’etat.

Donald Trump has already picked up where his predecessors left off: he has continued to wage war, he has continued to federalize the police, and he operates as if the Constitution does not apply to him.

As tempting as it may be to lay all the blame at Trump’s feet for the totalitarian state of the nation right now, remember that he didn’t create the police state.

He merely inherited it, along with the dictatorial powers of the presidency.

If we are to return to a constitutional presidency, we must recalibrate the balance of power.

As I make clear in my book Battlefield America: The War on the American People, the only thing that will save us now is a concerted, collective commitment to the Constitution’s principles of limited government, a system of checks and balances, and a recognition that they—the president, Congress, the courts, the military, the police, the technocrats and plutocrats and bureaucrats—answer to and are accountable to “we the people.”

As historian Arthur Schlesinger Jr. points out, “Holding a President to strict accountability requires, first of all, a new attitude on the part of the American people toward their Presidents, or rather a return to the more skeptical attitude of earlier times: it requires, specifically, a decline in reverence… The age of the imperial presidency has produced the idea that run-of-the-mill politicians, brought by fortuity to the White House, must be treated thereafter as if they have become superior and perhaps godlike beings.”

Schlesinger continues:

If the nation wants to work its way back to a constitutional presidency, there is only one way to begin. That is by showing Presidents that, when their closest associates place themselves above the law and the Constitution, such transgressions will be not forgiven or forgotten for the sake of the presidency but exposed and punished for the sake of the presidency.”

In other words, we’ve got to stop treating the president like a god and start making both the office of the president and the occupant play by the rules of the Constitution.

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