Q4 GDP Revised Lower To 2.5% Despite Stronger Spending

In what may be the most unremarkable GDP revision in years, moments ago the BEA revised its initial Q4 2017 GDP estimate from 2.6% to 2.5%, lowering the number by fractions of a basis point, to 2.530% specifically, and in line with estimates.

According to the Dept of Commerce, the downward revision reflected a downward revision to consumer spending on goods, and a small downward revision to inventory investment. These downward revisions were partly offset by upward revisions to consumer spending on services and to housing investment.

The revision lower took place even though personal consumption, measured by PCE, rose at a 3.8% annualized rate, higher than the 3.6% estimate, and unchanged from last quarter despite reports that showed a sharp drop in retail sales to close the year. Core PCE was also in line with both expectations and the initial estimate at 1.9%.

Nonresidential fixed investment, or spending on equipment, structures and intellectual property rose 6.6% in 4Q after rising 4.7% prior quarter, if also barely changed from the initial estimate. .

Other revisions were similarly de minimis, with private inventories barely moving (from -0.67% to -0.70%), Net Trade also stayed the same as in the initial estimate, the same as government consumption.

The changes, or lack thereof, are shown in the chart below.

Overall, there were virtually no changes to talk about, and with the data clearly well in the rearview mirror, the question the market is focused on is what will Q1 GDP be when it is reported in 2 months time.

via Zero Hedge http://ift.tt/2F09XLl Tyler Durden

JPMorgan & BofA Admit “Disruptive Threat” Of Cryptocurrency To Their Business

Having explained why central banks are so nervous about cryptocurrencies, it seems the rest of the banking sector is finally admitting the real driver behind their disdain for digital currencies – they are competition and an existential threat.

As CoinTelegraph’s Molly Jane Zuckerman reports, J.P. Morgan Chase has added a segment on cryptocurrencies to the “Risk Factor” section of their 2017 annual report to the US Securities and Exchange Commission (SEC), filed yesterday, Feb. 27.

The annual report mentions cryptocurrencies under the “Competition” subsection when describing how new competitors have emerged that threaten J.P. Morgan’s operations:

“Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation.”

The report notes that these new technologies, evidently including Blockchain, although they don’t mention it by name, “could require JPMorgan Chase to spend more to modify or adapt its products to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies.”

This competition could potentially “put downward pressure on prices and fees for JPMorgan Chase’s products and services or may cause JPMorgan Chase to lose market share.”

image courtesy of CoinTelegraph

J.P. Morgan Chase CEO Jamie Dimon had made waves back in September 2017, when he called Bitcoin (BTC) a “fraud” and threatened to fire any employee that traded BTC on company accounts. Since then, Dimon has backtracked slightly, telling a Cointelegraph reporter at the Davos World Economic Forum that he is not a “skeptic” on cryptocurrencies.

In the beginning of February, an alleged internal report from J.P. Morgan Chase referred to cryptocurrencies as “innovative” and “unlikely to disappear” , also noting cryptocurrency’s potential to be successfully applied to payment system areas that are traditionally problematic or slow, such as cross-border payments.

JPMorgan is not alone, as TruthInMedia.com’sBrendan Weber reports, in Bank of America’s new annual report filed with the U.S. Securities and Exchange Commission (SEC), the corporation largely reflected internally about a number of economic, geopolitical, and operational risks faced.

One of those stated risks is surrounding the increased adaptation of cryptocurrencies, which could have negative effects on the corporation’s earning potential.

In addition, technological advances and the growth of e-commerce have made it easier for non-depository institutions to offer products and services that traditionally were banking products, and for financial institutions to compete with technology companies in providing electronic and internet-based financial solutions including electronic securities trading, marketplace lending and payment processing. Further, clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies. Increased competition may negatively affect our earnings by creating pressure to lower prices or credit standards on our products and services requiring additional investment to improve the quality and delivery of our technology and/or reducing our market share, or affecting the willingness of our clients to do business with us.

Increased adaptation of cryptocurrencies also had Bank of America admitting that it may need to make “substantial expenditures” to compete with these rising technologies:

In addition, the widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services as we grow and develop our internet banking and mobile banking channel strategies in addition to remote connectivity solutions.

Bank of America might have already taken action to help counter these technologies by banning cryptocurrency transactions on their credit cards.

Additionally, the document stated concerns besides those directly affecting earning potential; they noted that emerging cryptocurrencies could impact Bank of America’s compliance with anti-money laundering regulations:

In addition to non-U.S. legislation, our international operations are also subject to U.S. legal requirements. For example, our international operations are subject to U.S. laws on foreign corrupt practices, the Office of Foreign Assets Control, know-your-customer requirements and anti-money laundering regulations. Emerging technologies, such as cryptocurrencies, could limit our ability to track the movement of funds. Our ability to comply with these laws is dependent on our ability to improve detection and reporting capabilities and reduce variation in control processes and oversight accountability.

Even though cryptocurrencies were a small mention within the entire report, its brief discussion indicated that the company is both aware of and reacting to the further potential impacts of cryptocurrency.

via Zero Hedge http://ift.tt/2F6V7C3 Tyler Durden

Here Comes The “4 Rate Hike” Bandwagon

Moments ago we reported that while Wall Street (if not market) consensus is clearly shifting to a hawkish view of 4 rate hikes this year in the aftermath of Powell’s hawkish testimony to the House, at least one strategist, SocGen’s Kit Juckes is not buying it, and wrote that “global level inflationary pressures aren’t noticeably building, fuels the view that the growth spurt at the end of 2017 is now behind us.

Whether it is the recent slide in the Atlanta Fed’s Q1 GDP estimate, or the various global economic surprise indexes…

… one could argue that Juckes is right.

And yet, a quick skim of the various market comments this morning shows that the SocGen analyst is clearly in the minority. As Bloomberg notes, the Powell session before the House, which many expected to be a ho-hum event that would have minimal impact on stocks, ended up spooking the markets thanks to comments that signaled an increased slant at the March meeting toward four rate hikes this year. Here are a few reactions of note, via BBG:

  • Evercore ISI vice chairman (and former New York Fed official) Krishna Guha: “Had thought the message in March would be 3+3 (three in 2018, three in 2019) with the Committee moving to 4+3 in June once the inflation data had firmed further. Following Powell’s remarks there seems to be a good chance that many or even most FOMC participants will go to 4+3 in March”
  • JPMorgan Chief U.S. Economist Michael Feroli (who remains in the four-rate-hike camp for both 2018 and 2019): “We now think the odds are tilted slightly in favor of the median participant revising up their outlook to look for four hikes this year and another three hikes next year”

And here is Wall Street’s thought leader, whose chief economist, Jan Hatzius, overnight wrote that:

We agree with the market’s hawkish assessment of Powell’s comments. At this point we see roughly even odds that the median dot will show 3 hikes (2.125%) or 4 hikes (2.375%) for 2018 in March, and we think the median dot for 2019 is likely to move up from 2.7% to 2.875%”

And for those curious what else Goldman – which last week suggested that there is even a probability of 5 rate hikes this year – said to justify its hawkish stance, here is the full note.

* * *

Powell’s First Testimony Hints at a Shift Up in the Dots

Jerome Powell made his first major appearance as the new Chairman of the Federal Reserve today in testimony before the House Financial Services Committee. Powell presented an upbeat take on the economy and noted that his outlook has improved incrementally since the FOMC’s December meeting, a comment that sparked a sell-off in the Treasury market and appeared to raise the odds of an upward move in the Fed’s dot plot at the March meeting.

Powell’s comments on the economic outlook were generally optimistic. He noted that several factors that were once headwinds for the economy—fiscal policy, foreign growth, and financial conditions—were now all tailwinds, the recent volatility in financial markets notwithstanding. Powell said that he expects the next couple of years to look “quite strong” with continued improvement in the labor market, inflation moving up to 2%, and faster wage growth. He also downplayed some concerns raised by members of Congress, noting that he was not bothered by the flattening in the yield curve, saw “at most modest risks” to financial stability, and did not see recession risk as “at all high at the moment.”

Powell also noted that his outlook has improved incrementally since the FOMC last submitted economic projections in December. Relative to expectations at the time, he noted, the larger-than-anticipated tax cuts and federal spending increases would boost demand further. That more stimulative fiscal policy, strong incoming economic data, strength in the labor market, encouraging inflation news, and continued strong global growth have caused his outlook for the economy to strengthen. Appearing to link this improved outlook to the March dot plot, Powell then noted that FOMC participants will be “taking into account everything that’s happened since December.”

The Treasury market sold off in response to those comments, as shown in Exhibit 1. Most investors appeared not to have anticipated that Powell would both acknowledge the incrementally better news and link it to the FOMC’s projections for its policy rate so soon and so straightforwardly.

Exhibit 1: The Bond Market Sold Off in Response to Powell’s Hawkish Comments

We agree with the market’s hawkish assessment of Powell’s comments. However, the implications for the March dots are more complex. While Powell’s comments raise the odds that he and other FOMC participants will shift their dots up in March, where the median dots will settle is less clear.

The end-2018 median dot is a very close call and at this point we see roughly even odds that it will show 3 hikes (2.125%) or four hikes (2.375%). Our interpretation of the December dots suggests that a shift from a three-hike to a four-hike baseline would require four participants to move up and for new Richmond Fed President Thomas Barkin to project at least four hikes in 2018 in his first submission. A recent comment from President Kaplan, shown in the table in the appendix, suggests that he is still at three hikes, meaning that four other participants would have to move up. We take Powell’s comments today to indicate that he is likely to move, and the decisions are likely correlated.

The end-2019 median dot is more likely to move up to 2.875%, from 2.7% in December. This would happen if one participant moved up or if the participant who projected 2.75% (the only participant who projected a point instead of a range in 2019) moved to 2.875%.

The end-2020 median dot appears likely to come in at 3.125%. A larger increase would require five participants to raise their terminal dot, which seems unlikely at this point. The longer-run dot also appears likely to remain stable at 2.75% in March, but could move up at some point later this year.

In addition to his comments on the economy and monetary policy, Powell also offered views on several financial regulatory issues in response to questions from members of Congress. At a high level, Powell emphasized that the Fed aims to strengthen the “primary pillars” of post-crisis financial regulation: risk-based capital requirements, liquidity requirements, the stress tests, and resolution planning. But he also expressed support for regulatory reform in several areas:

  • Supplementary leverage ratio (SLR). Powell said that the current calibration of the SLR is “not appropriate” because it “seems to be deterring some low-risk, wholesale-type activities that we really want financial institutions to engage in.” He added later that the Fed has the calibration “a little bit wrong” following its enhancement of the SLR and plans to “roll that back.”
  • Volcker rule. Powell expressed agreement with the argument that it might be worth giving greater discretion to bank trading desks so that they could intervene in illiquid and volatile markets. He also said that the Fed would be ready to take on the role of lead regulator in multiagency discussions as it takes a “fresh look” at the Volcker rule.
  • Stress testing. Powell said that the Fed could continue on the path of becoming more transparent and highlighted the stress tests in particular as an example.
  • Regulatory relief for small banks. Powell expressed support for tailoring regulation for small and community banks, which he said is “at the heart of what we’re doing at the moment.”

While Powell had expressed support for financial regulatory reform in the past, his comments today seemed to express a slightly firmer intention to make changes to the enhanced SLR and the Volcker rule.

 

 

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

SocGen: The Fed Is Wrong, “The Growth Spurt Is Now Behind Us”

Yesterday, Fed Chair Jerome Powell threw markets for a loop when he suggested that the US economy is on the verge of overheating, and that it was performing better than it did during the December FOMC meeting. This prompted a surge in the dollar, and a slump in both Treasurys and stocks.

The narrative immediately shifted: UBS’ chief economist Paul Donovan commented that “Former US Federal Reserve Chair Yellen suggested that there were few systemic risks in the US financial system, but that the current fiscal position was troubling. This is a rather consensus view, but the former Fed chair presumably had access to better information than the consensus. Current Federal Reserve Chair Powell indicated rates should go up” and added that “the broad picture is of a US economy performing at or above trend, justifying four rate hikes this year.”

Others quickly chimed in (via Bloomberg):

  • Evercore ISI vice chairman (and former New York Fed official) Krishna Guha: “Had thought the message in March would be 3+3 (three in 2018, three in 2019) with the Committee moving to 4+3 in June once the inflation data had firmed further. Following Powell’s remarks there seems to be a good chance that many or even most FOMC participants will go to 4+3 in March”
  • JPMorgan Chief U.S. Economist Michael Feroli (who remains in the four-rate-hike camp for both 2018 and 2019): “We  now think the odds are tilted slightly in favor of the median participant revising up their outlook to look for four hikes this year and another three hikes next year”
  • Goldman Chief Economist Jan Hatzius: “We agree with the market’s hawkish assessment of Powell’s comments. At this point we see roughly even odds that the median dot will show 3 hikes (2.125%) or 4 hikes (2.375%) for 2018 in March, and we think the median dot for 2019 is likely to move up from 2.7% to 2.875%”

And yet, could Tuesday’s Powell “hawk shock” and the resultant market reaction simply be another instance of driving forward by looking in the rear view mirror. After all, is the economy really that much stronger than it was in December as Powell claimed? One look at the sharp drop in Q1 GDP nowcasts from the Atlanta Fed, which yesterday saw its initial euphoria Q1 GDP forecast slashed by more than 50% from 5.4% just a few weeks ago to 2.6%, suggests that the US economy is actually slowing.

Economic data confirms this: global economic surprise indices, and especially in the EU and US, have taken a clear turn lower.

And then there was SocGen’s FX strategist Kit Juckes who took the contrarian view to what is rapidly emerging as a “4 hike” consensus, and writes that “it would take a big surprise from US ISM data to avoid a second monthly decline in global PMI measures. That, along with falling economic surprise indices, and signs that at a global level inflationary pressures aren’t noticeably building, fuels the view that the growth spurt at the end of 2017 is now behind us.”

If so, it would have significant consequences for risk assets (higher) and for yields (lower). Here is the key excerpt from his morning note:

The new Fed Chairman sounded upbeat, pushing up expectations of four rate hikes this year. 2-year Note yields reached a new high for this cycle, the dollar is stronger and equity indices are lower across the board.

As Chinese PMI data disappoint, it would take a big surprise from US ISM data to avoid a second monthly decline in global PMI measures. That, along with falling economic surprise indices, and signs that at a global level inflationary pressures aren’t noticeably building, fuels the view that the growth spurt at the end of 2017 is now behind us. The case for fading the long-end Treasury sell-off would seem to be growing.

That would be more important from an FX perspective, of course, if we hadn’t just seen the collapse of yield/currency correlations. Still, there’s a reasonable chance that we now seen a peak in the T-Note/Bund yield spread, which hasn’t quite breached the late 2016 cyclical peaks. EUR/USD 1.21 is the key support level for EUR/USD at the moment and 1.23 is the barrier to further gains, so the range from which a break-out might come is getting narrow. Hopefully that promises more volatility once we do get a break. I think we break up, not down, but time will tell.

Looking at some key correlations, Juckes then notes that the yield differential correlation between the EURUSD and 10Y spreads may be broken but yield spread may turn now….

A few more disappointing data points and we will know if he is right, and if Powell will be regretting his bullish outlook in just a few weeks. With futures in the green, algos seems to already be “pricing in” that it is only a matter of time before bad news is good news (for the S&P at least) all over again.

via Zero Hedge http://ift.tt/2CqC3h8 Tyler Durden

“We’re Going To Take A Stand” – Dick’s Stops Selling Assault Rifles Permanently

In the aftermath of the Sandy Hook shooting in December 2012, both Walmart and Dick’s Sporting Goods announced they would stop the sale of assault rifles, if only temporarily. Fast forward just over 5 years when moments ago Dick’s – one of the nation’s largest sports retailers – said that it is immediately ending sales of all assault-style rifles in its stores, according to the NYT which adds that “the announcement, made two weeks after the school shooting in Parkland, Fla., that killed 17 students and staff members, is one of the strongest stances taken by corporate America in the national gun debate. It also carries symbolic weight, coming from a prominent national gunseller.”

The retailer also said that it would no longer sell high-capacity magazines and that it would not sell any gun to anyone under 21 years of age, regardless of local laws.

Edward Stack, the 63-year-old chief executive of Dick’s whose father founded the store in 1948, is deliberately steering his company directly into the storm, making clear that the company’s new policy was a direct response to the Florida shooting.

“When we saw what happened in Parkland, we were so disturbed and upset,” CEO Edward Stack told NYT in an interview. “We love these kids and their rallying cry, ‘enough is enough.’ It got to us.”

He added, “We’re going to take a stand and step up and tell people our view and, hopefully, bring people along into the conversation.”

It is unclear what financial impact the decision will have on Dick’s business, the NYT notes. Neither Dick’s nor its competitor, Cabela’s, now owned by Bass Pro Shops, have broken out firearm sales in their financial reports. But last August, Dick’s shares plummeted after it said weak results from its hunting segment resulted in its missing Wall Street’s second-quarter earnings estimates.

The gun department in a Dick’s Sporting Goods store in Paramus, N.J., in 2012

Stack said he hoped that conversation would include politicians. As part of its stance, Dick’s is calling on elected officials to enact what it called “common sense gun reform’’ by passing laws to raise the minimum age to purchase guns to 21, to ban assault-type weapons and so-called bump stocks, and to conduct broader universal background checks that include mental-health information and previous interactions with law enforcement.

Stack said the retailer began scouring its purchase records shortly after the identity of the suspected Parkland shooter, Nikolas Cruz, became known. The company soon discovered it had legally sold a gun to Mr. Cruz in November, though it was not the gun or type of gun used in the school shooting.

“But it came to us that we could have been a part of this story,’’ he said. “We said, ‘We don’t want to be a part of this any longer,’” said Mr. Stack.

Stack said Dick’s remained a staunch supporter of the Second Amendment and will continue to sell a variety of sport and hunting firearms. Although he has never been a member of the N.R.A., Mr. Stack said he is, in fact, a gun owner and enjoys trapshooting clay targets.

But when it comes to selling guns to individuals under 21 years of age or stocking assault-style rifles, Mr. Stack said his company was done. “We don’t want to be a part of a mass shooting,” he said.

That decision raised rounds of discussions with top executives inside the company as well as the directors, all of whom backed the decision to take a stance, said Mr. Stack according to the NYT.

As noted above, this is not the first time Dick’s has made changes in response to a school massacre. In 2012, after the shooting at Sandy Hook Elementary School, Dick’s removed assault-style rifles from its main retail stores. But a few months later, the company began carrying the firearms at its outdoor and hunting retail chain, Field & Stream.

This time, Mr. Stack said, the changes will be permanent.

As of Wednesday morning, the company said all AR-15s and other semiautomatic rifles would be removed from its stores and websites.

* * *

Stack said he and his company expected there would be mixed response — including fallout — to its new policy.

“The whole hunting business is an important part of our business, and we know there is going to be backlash on this,” said Mr. Stack. “But we’re willing to accept that.” He added, “If the kids in Parkland are being brave enough to stand up and do this, we can be brave enough to stand up with them.”

And now we wait to see how much the market will reward Dick’s competitors like Cabela’s, which will continue selling assault weapons, now that one of their biggest competitors has decided to bow out.

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

Futures Rebound As Global Stocks Slide After Powell “Hawk Shock”

Asian bourses and European shares fell after surprisingly bad Chinese PMI and Japanese econ data added to a perceived hawkish tilt in Fed policy emerging from Chair Powell’s testimony which weighed on global equities. Benchmark Treasury yields held near a four-year high and the dollar was steady after Tuesday’s jump.

As a reminder, in addition to the unexpectedly hawkish Powell testimony, China disappointed with a broadly weak set of Mfg and Service surveys, as the Chinese NBS Manufacturing PMI printed 50.3 vs. Exp. 51.1 (down from 51.3), and the lowest since September 2016, while the Chinese NBS Non-Manufacturing PMI dropped from 55.3 to 54.4 vs. Exp. 55.0.

The result has been a sea in most global stock markets…

… if not S&P futures, which after hitting session lows shortly before midnight ET have managed to stage another modest rebound and were on the green side of unchanged this morning.

As noted above, the watercooler topic this morning was Fed Chair Jay Powell’s upbeat assessment of the world’s biggest economy, whose inaugural testimony  provided a hawkish view on inflation and was also optimistic on economic growth, which raised the prospects of 4 hikes for this year and subsequently weighed on equity markets across the globe. The market noticed, and has pushed the number of priced-in Fed hikes for 2018 to precisely 3, the highest yet; a little more hawkishness from Powell and the market will start considering 4 hikes as a realistic option.

What the markets are telling you today and year-to-date is that interest rate hikes are expected and that’s getting priced in,” Medha Samant, Fidelity International investment director, told Bloomberg TV. “The question is, despite all the upbeat data that we see coming out of the U.S., what is going to be the pace of these rate hikes and how quickly is it going to happen.”

Still, not everyone is convinced: as SocGen’s Kit Juckes notes in the aftermath of the disappointing Chinese PMI data, “it would take a big surprise from US ISM data to avoid a second monthly decline in global PMI measures. That, along with falling economic surprise indices, and signs that at a global level inflationary pressures aren’t noticeably building, fuels the view that the growth spurt at the end of 2017 is now behind us. The case for fading the long-end Treasury sell-off would seem to be growing” (more on this note shortly).

Investors’ focus now shifts to U.S. GDP data due Wednesday after Powell opened the door to four Fed rate increases this year, saying his personal outlook for the economy had strengthened. U.S. and European bond yields have soared in recent months amid speculation that the Fed’s monetary policy will be tightened at a faster pace, but for equity investors, that’s testing nerves. As Bloomberg notes, global stocks are poised for their worst month since January 2016 after years of central-bank stimulus push up valuations.

* * *

Meanwhile, European equities slide in tandem with their U.S. and Asian counterparts as investors digested Powell’s testimony; miners lead declines after weaker-than-expected China manufacturing PMI data. However, losses have been pared throughout the morning (Eurostoxx 50 -0.4%). In terms of sector specific performance, movements have been relatively broad-based with support for IT names following strong earnings from Dialog Semiconductor (+10%) which has sent their shares to the top of the Stoxx 600, energy names also firmer as crude modestly recoups some of its post-API losses. Most euro-area and U.K. bonds rise, while Germany underperforms after a soft 10-year auction.

The MSCI Asia Pacific Index also dropped across the board as the impact from Fed Chair Powell’s testimony reverberated in the region and as participants also digested disappointing Chinese PMI data. ASX 200 (-0.7%) and Nikkei 225 (-1.4%) were lower with the worst performers in Australia also dampened by poor earnings results, while Nikkei 225 suffered from a firmer JPY as well as weak Industrial Production and Retail Sales data. Elsewhere, Hang Seng (-1.4%) and Shanghai Comp. (-1.0%) were the early laggards.

Of note: Bloomberg highlights that Chinese offshore investors became sellers of mainland-listed equities in February for the first time since 2016, dumping net 564 million yuan ($89 million) of A shares via the exchange links with Shanghai and Shenzhen, Bloomberg calculations based on daily quota usage showed. That translates into average daily net selling of 37.6 million yuan.

Elsewhere, the Bloomberg Dollar Spot Index consolidated and stays near 2 1/2-week high seen yesterday; yen outperforms after the Bank of Japan cut purchases of ultra-long JGBs, although offsetting tapering fears, the BOJ left its planned bond purchase amounts for March unchanged from February. The Bloomberg Dollar Spot Index is set to halt a three-month decline, with the yield on Treasury 10-year notes holding around 2.9%, close to cycle highs.

On the topic of the dollar, Citi writes that “all anyone in markets can talk about Jerome Powell, but has the game really changed that much overnight? Any sustained USD strength from here faces evident headwinds, but in the short-term, today is month-end, which might mean just the opposite.”

Indeed, it has been another difficult day for euro bulls as a still-crowded trade becomes a pain one for leveraged names. The euro briefly slipped below 1.22 handle for the first time since Jan. 18 as leveraged names that have been supporting the common currency in the past week offload part of their longs, but euro-area inflation data which met estimates helped to keep the currency off its day low. Month-end flows do no favors as they lean toward the dollar-supportive side, keeping cable below 1.3900 ahead of the EU’s draft Brexit treaty.

Elsewhere, crude oil was little changed as the International Energy Agency warned about seemingly unstoppable U.S. shale production. Sterling added to yesterday’s decline as U.K. Prime Minister Theresa May squared off for a fight with the European Union over a Brexit deal. Brent crude recovered from day lows, though remains below $67/barrel, with WTI crude near $62.60.  Traders will also be mindful of yesterday’s source reports stating that OPEC are set to meet with US shale producers next Monday. In metals markets, spot gold is particularly flat today in the wake of  yesterday’s Powell-inspired sell-off whilst Chinese steel futures were seen higher overnight with the move to the upside capped by soft demand. Dalian iron ore weakens for second day.

Wednesday’s agenda includes the second revision of Q4 GDP, Chicago PMI, pending home sales and MBA Mortgage Applications. L Brands and Mylan are among companies set to report quarterly numbers.

Market Snapshot

  • S&P 500 futures up 0.2% to 2,753.00
  • STOXX Europe 600 down 0.2% to 381.52
  • MSCI Asia Pacific down 1% to 177.16
  • MSCI Asia Pacific ex Japan down 1% to 578.27
  • Nikkei down 1.4% to 22,068.24
  • Topix down 1.2% to 1,768.24
  • Hang Seng Index down 1.4% to 30,844.72
  • Shanghai Composite down 1% to 3,259.41
  • Sensex down 0.5% to 34,189.13
  • Australia S&P/ASX 200 down 0.7% to 6,015.96
  • Kospi down 1.2% to 2,427.36
  • German 10Y yield fell 1.2 bps to 0.667%
  • Euro down 0.1% to $1.2216
  • Italian 10Y yield fell 1.3 bps to 1.736%
  • Spanish 10Y yield fell 2.8 bps to 1.537%
  • Brent Futures up 0.2% to $66.79/bbl
  • Gold spot up 0.2% to $1,320.50
  • U.S. Dollar Index up 0.1% to 90.44

Bulletin Headline Summary From RanSquawk

  • European bourses kicked the session off on the back-foot following similar performance in their Asia-Pac counterparts, post-Powell
  • The broad Dollar continues to benefit from month end positioning and a more hawkish tone emanating from Fed chair Powell during the live testimony and Q&A session
  • Looking ahead, highlights include US GDP, Chicago PMI, Pending Home Sales, DoE inventories, EU Brexit Draft Treaty

Top Overnight News from Bloomberg

  • Jerome Powell opened the door to the Federal Reserve raising U.S. interest rates four times this year as he acknowledged stronger economic growth may prompt policy makers to rethink their plan for three hikes
  • Jared Kushner can no longer attend some meetings of the National Security Council, see the highly classified President’s Daily Brief or war-related intelligence after losing his top-secret security clearance as part of a broader White House crackdown, according to a person familiar with the matter
  • Eight Conservative Party lawmakers have backed an amendment calling for the U.K. to keep close ties to the European Union after it leaves, an attempt to reverse Theresa May’s Brexit policy that could threaten her political survival
  • U.K. consumer and business confidence was muted in February as Brexit obscured prospects for economic growth.
  • The Bank of Japan cut purchases of bonds maturing in more than 25 years for the second time this year, after yields declined on the back of solid demand before the end of the fiscal year in March
  • China’s official manufacturing gauge fell the most in five years in February as Spring Festival holiday closures curbed output and export orders declined
  • China-based Geely Group structured the purchase of its 7.3 billion-euro ($9 billion) stake in Daimler AG through complex derivative transactions that allowed the buyer to build a large equity holding while limiting the risks, people with knowledge of the matter said
  • China is ‘strongly dissatisfied’ with U.S. duties on aluminum foil and the country will take necessary measures to safeguard its legitimate rights, Wang Hejun, chief of the trade remedy and investigation bureau at Ministry of Commerce, says in a statement on website
  • China plans to cap the amount that investors can redeem from money- market funds on a single day, according to people familiar with the matter
  • Governor Haruhiko Kuroda says the Bank of Japan won’t continue its current powerful monetary easing once inflation hits its 2% target in a stable manner, even if the government puts pressure on the central bank to keep interest rates low

Asian equity markets were negative across the board as the impact from Fed Chair Powell’s testimony reverberated in the region and as participants also digested disappointing Chinese PMI data. The inaugural testimony by Fed Chair Powell provided a hawkish view on inflation and was also optimistic on economic growth, which raised the prospects of 4 hikes for this year and subsequently weighed on equity markets across the globe. ASX 200 (-0.7%) and Nikkei 225 (-1.4%) were lower with the worst performers in Australia also dampened by poor earnings results, while Nikkei 225 suffered from a firmer JPY as well as weak Industrial Production and Retail Sales data. Elsewhere, Hang Seng (-1.4%) and Shanghai Comp. (-1.0%) were the early laggards with investor sentiment dragged following a miss on Chinese Official Manufacturing and Non-Manufacturing PMI data in which the former printed its weakest since September 2016, while aluminium names also felt the brunt after the US confirmed tariffs on aluminium foil imports from China. Finally, 10yr JGBs lacked demand despite the broad global risk-averse tone, as Japanese yields tracked the upside in their US counterparts and which also followed a reduction of the BoJ’s Rinban purchases in the  super-long end. The PBoC skipped open market operations for a 2nd consecutive day. PBoC set CNY mid-point at 6.3294 (Prev. 6.3146)

Top Asian News

  • BOJ Cuts Purchases of Super-Long Bonds After Curve Flattens
  • Chinese H Shares Sink, Wrapping Up World’s Biggest Monthly Drop
  • Noble Group Perpetual Holders Unite to Oppose Restructuring
  • Afghan President Offers Taliban Political Recognition, Talks

European bourses kicked the session off on the back-foot following similar performance in their Asia-Pac counterparts, post-Powell. However, losses have been pared throughout the morning (Eurostoxx 50 -0.4%). In terms of sector  specific performance, movements have been relatively broad-based with support for IT names following strong  earnings from Dialog Semiconductor (+10%) which has sent their shares to the top of the Stoxx 600, energy names also firmer as crude modestly recoups some of its post-API losses. Other notable movers this morning post-earnings include St James Place (+3.9%), Ahold (+2.8%), Travis Perkins (-6.2%), Taylor Wimpey (-2.4%), ITV (-6.2%) and Bayer (-3.4%).

Top European News

  • Swedish Economic Growth Accelerates Along With Global Revival
  • German Joblessness Falls as Companies Struggle to Find Workers
  • Johnson: Irish Border ‘Being Used’ to Keep U.K. in Customs Union
  • New ITV CEO Disappoints on Ad Revenue Outlook, Lack of Dividend

In FX, the broad Dollar continues to benefit from month end positioning and a more hawkish tone emanating from Fed chair Powell during the live testimony and Q&A session. The index is retesting near term chart resistance in the 90.500-600 area, and could establish a firmer recovery base if it manages to close above. EURUSD may be pivotal on this front as the pair only just held the 1.2200 level having breached 1.2206 support, with stops expected on a clear break below and exposing several tech supports (1.2181/1.2173 Fibs and 55DMA at 1.2176) ahead of the January 18 ytd low at 1.2165. Above forecasts German jobs data has subsequently seen the headline pair move back into the 1.2220 area. The Greenback is also extending gains vs the JPY, but struggling around 107.00 again amidst decent offers above the big figure and option expiries at the strike (today and more running off this week). Cable looks prone to a deeper pull-back from 1.4000 and while under 1.3900 further declines could see techs target double bottom support circa 1.3855 (especially if the EU’s draft Brexit paper is particularly hard-line). AUDUSD is also hovering above key downside levels and a hefty 0.7800 expiry (1.1 bn), including 200 and 100 DMAs from 0.7784-76 and the 2018 low at 0.7758, while NZDUSD is inching closer to 0.7200 after Tuesday’s trade data miss. Usd/Cad is holding just below strong resistance at 1.2796 ahead of Canadian PPI and raw material price data.

In the commodities complex, WTI and Brent crude futures have seen a mild uptick in recent trade following last night’s API-inspired losses. Whereby, prices suffered despite a smaller than expected build to headline crude stockpiles, as it was also accompanied by an unexpected build to gasoline inventories. Traders will also be mindful of yesterday’s source reports stating that OPEC are set to meet with US shale producers next Monday. In metals markets, spot gold is particularly flat today in the wake of yesterday’s Powell-inspired sell-off whilst Chinese steel futures were seen higher overnight with the move to the upside capped by soft demand.

 

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -6.6%
  • 8:30am: GDP Annualized QoQ, est. 2.5%, prior 2.6%; Personal Consumption, est. 3.6%, prior 3.8%; Core PCE QoQ, est. 1.9%, prior 1.9%
  • 9:45am: Chicago Purchasing Manager, est. 64.1, prior 65.7
  • 10am: Pending Home Sales MoM, est. 0.5%, prior 0.5%; NSA YoY, prior -1.8%

DB’s Jim Reid concludes the overnight wrap

The big story yesterday was yields spiking after the inaugural testimony from new Fed Chair Powell to the House Financial Services Committee. The first impressions of Mr Powell are favourable from us here in the Thematic Research team at DB as he gave our “yields are rising … and why they’ll continue to….” theme week some fresh impetus yesterday as 10 year Treasuries climbed over 7bps from the lows of the day after his Q&A to the House yesterday. Staying with yields the big event today is core PCE in the US which is the Fed’s preferred inflation measure. Before we delve into Mr Powell’s testimony, a reminder of the theme week so far and to highlight today’s piece on what higher yields mean for global equity investors.

So Powell’s testimony at Capitol Hill was fairly hawkish yesterday but it took until the Q&A for the market to decide this. Most were expecting a more ‘steady as she goes’ approach so it took investors a bit by surprise. As soon as the initial headlines from the prepared testimony hit the wires the main takeaway was perhaps Powell’s comments that “some headwinds facing the US economy are now tailwinds” and also that the policy committee “will strike a balance between avoiding an overheated economy and moving inflation to the 2% target on a sustained basis” and that financial conditions “remain accommodative”. There were also the usual mentions of seeing “further gradual rate hikes” and also that the “outlook remains strong”.

For the market however, Treasuries really got moving once the Q&A kicked off. The Fed Chair confirmed that while he wouldn’t prejudge, his personal outlook for the US economy has strengthened since December and that “we’ve seen some data that will, in my case, add some confidence to my view that inflation is moving up to target”. He also noted that “we’ve seen continued strength around the globe, and we’ve seen fiscal policy become more accommodative”.  Powell also added that he does not want “regulations to inappropriately slow credit”. Overall there appeared to be no sign of Powell being concerned about the mini selloff in February as impacting the Fed’s outlook for the economy while all the risks appeared to be biased toward upside to growth rather than downside to inflation, as well as the benefits from fiscal policy going forward. Much of the interest now will be on whether or not this translates into a change in the March dot plot.

10y Treasuries quickly spiked through 2.90% as Powell spoke after trading as low as 2.846% after his prepared remarks were released. They topped out at 2.923% and eventually closed at 2.894% (+3.1bp). The move was led by the belly of the curve with 3, 5 and 7y yields 4-5bp higher while 2y and 30y yields ended 3.8bp and 0.6bp higher respectively indicating a notable bear flattener. In Europe, 10y Bunds ended +2.6bps higher having chopped around earlier in the day in response to a slightly softer Germany CPI print (more below). Meanwhile the USD index closed +0.58% and just off the highs while risk assets suffered with the yield move. The S&P 500 ended down -1.27% – with declines accelerating in the evening session – and brought to an end the three-day winning streak, while the Dow ended -1.16%. The early moves lower in risk were also enough to see European markets edge into the red by the close of play (Stoxx 600 -0.18%). The VIX was up for the first time in five days to 18.59 (+17.7%).

The Powell testimony straddled some mixed US data with the hard numbers weak but with confidence data and survey data strong (see below). However the hard data was enough to push the Atlanta Fed GDPnow Q1 tracker down to 2.58% versus 3.20% previously and as high as 5.4% early in the quarter!

This morning in Asia, markets are all lower with the Nikkei (-0.97%), Kospi (-0.95%), Hang Seng (-1.36%) and China’s CSI 300 (-0.48%) all down as we type. Datawise, China’s February manufacturing PMI (50.3 vs. 51.1 expected) and non-manufacturing PMI (54.4 vs. 55.0 expected) were both below market and declined mom, with the former at the lowest since July 2016. Elsewhere,Japan’s January IP (2.7% yoy vs. 5.3% expected) and retail trade (1.6% yoy vs. 2.4% expected) were also lower than expectations. We’re definitely seeing global data dipping from a strong peak in the last week.

Turning to other markets yesterday. The Euro and Sterling fell 0.68% and 0.42% respectively given the USD strength. In commodities, WTI oil fell 1.67% to $62.84/ bbl, in part as the IEA warned about “explosive growth” in US output. Elsewhere, precious metals weakened c1.3% (Gold -1.15%; Silver -1.39%) and other base metals retreated as the USD firmed (Copper -1.16%; Zinc -0.96%; Aluminium +0.04%).

Away from the markets and onto the ECB’s Weidmann where he broadly reiterated his prior comments. On the outlook for rates, he noted the market’s expectation for hikes to begin in mid-2019 was “not completely unrealistic” and that ECB’s current policy guidance of keeping rates unchanged “well past” the end of QE “is a rather vague time dimension” and should be strengthened. On QE, he would have preferred the ECB to have set a “clear end date” when it  extended the program back in October.

Turning to the US, the US Treasury Secretary Mnuchin said President Trump “is willing to negotiate” on the Transpacific Partnership, “whether we do multilaterals or going back to TPP…that’s something that’s on the table”. Elsewhere, the US commerce department has proposed duties of 49%-106% on Chinese aluminium foil for selling the product in the US. The issue will go to a vote on 15 March at the US International trade commission.

Turning to some Brexit headlines. On the transition period, the UK had recently suggested “around two years” with suggestions of potentially leaving it open ended. Yesterday, the EU negotiator Barnier was quite firm, noting that the transition period “must be short…must be clearly specified and for the moment this is clearly the line that we’re pursuing – a period ending on Dec 2020”.

Elsewhere, the UK trade secretary Fox noted if the UK stayed in the customs union post Brexit, this would be a “complete sell out” and limit UK’s ability to negotiate other trade deals. Finally, the UK PM May “remains committed to avoid a hard border between Northern Ireland and the rest of the UK” with more details to be provided in her big speech on Friday.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the CB consumer confidence index was above market and rose to a 17 year high (130.8 vs. 126.5 expected) while the February Richmond Fed manufacturing index also beat at 28 (vs. 15 expected). However on the downside, the January advanced goods trade deficit was the widest since 2008 at -$74.4bln (vs. -$72.3bln expected) as growth in imports outpaced exports. Elsewhere, wholesale inventories grew 0.7% mom (vs. 0.4% expected) while both core durable goods orders (-0.3% mom vs. 0.4% expected) and core capital goods orders (-0.2% mom vs. 0.5% expected) were below market but still up 6.9% yoy and 6.3% yoy respectively. Finally, the December FHFA house price index (0.3% mom vs. 0.4% expected) and the S&P corelogic house price index (6.3% yoy vs. 6.35% expected) were both slightly below expectations.

Germany’s February CPI was 0.1ppt lower than expectations, at 0.5% mom and 1.2% yoy respectively, with the annual rate at a 16 month low. Spanish inflation beat expectations though (1.2% yoy vs. 0.9% expected). The Euro area’s January money supply was in line at 4.6% yoy and the final reading on February consumer confidence was unrevised at 0.1. Elsewhere, the February confidence indicators across Europe were slightly ahead of market, with the Euro area’s economic confidence at 114.1 (vs. 114 expected), Italy’s manufacturing confidence at 110.6 (vs. 109.2 expected) and consumer confidence at 115.6 (vs. 115 expected).

Conversely, France’s consumer confidence was below market at 100 (vs. 103). Looking at the day ahead, Germany’s March GfK consumer confidence index is due in early morning. Then the flash February CPI readings for the Euro area, France and Italy will be out. Elsewhere, France’s January PPI and 4Q GDP along with Germany’s February unemployment rate are also due. In the US, the February Chicago PMI, second reading on the 4Q GDP and Core PCE as well the January pending home sales data will be due. Onto other events, the EU negotiator Barnier will brief permanent EU representatives on Brexit and the withdrawal text is also expected to be published.

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

Belarus Hooker Promises To Spill Dirt On Trump… If The CIA Springs Her From Thai Jail First

A prostitute from Belarus who was detained in Thailand over the weekend following a raid on her “sex training” seminar says she’s the missing link who can provide evidence of a link between Russia and President Trump due to her association with a Russian billionaire, Oleg Deripaska and Deputy Prime Minister Sergei Prikhodko, the WaPo reported.

Anastasia Vashukevich, who is currently sitting in a Thai jail cell, has been somehow posting to her instagram account about her ordeal. In one post, Vashukevich – known better by the alias Nasta Rybka – is said to have fallen ill, has no bed to sleep on, and has “frostbitten kidneys.”

Anastasia Vashukevich a.k.a. Nasta Rybka (Instagram)

The Russian oligarch, Deripaska, employed short-lived Trump campaign manager Paul Manafort, however Vashukevich has provided no evidence of her claim.

Now they are kept in worse conditions. Concrete floor. No beds available. Food is only what they bring. The doctor did not call for Nastya. She frostbitten her kidneys. The condition is very poor. According to our eyewitnesses, someone from the Russian consulate worked on the Thai police. –Instragram (translated)

 

“I am the only witness and the missing link in the connection between Russia and the U.S. elections – the long chain of Oleg Deripaska, Prikhodko, Manafort, and Trump,” Vashukevich said in a live Instagram broadcast on Tuesday, apparently filmed while being driven through the Thai resort city of Pattaya in an open-air police van. “In exchange for help from U.S. intelligence services and a guarantee of my safety, I am prepared to provide the necessary information to America or to Europe or to the country which can buy me out of Thai prison.

In her video, Vashukevich said that she had already given an interview to NBC – however it is unknown when this may have taken place.

Vashukevich made headlines last month after Russian opposition leader Alexi Navalny broadcast footage from her Instagram account from an August 2016 yacht trip with Prikhodko and Deripaska. Navalny alleged that Derpiaska had bribed Prikhodko, who is one of Russia’s most influential senior officials.

In a 25-minute Youtube video (Russian with subtitles), Navalny shows footage of Deripaska with Russian deputy prime minister Sergei Prikhodko on his yacht in Norway in August 2016. Based on that footage, he alleges that information about the Trump campaign must have passed between the two. Quartz

Navalny also asserted – with no proof – that Prikhodko and Deripaska may have been conduits between the Kremlin and the Trump campaign in 2016; a link which has proven elusive despite more than 18 months of counterintelligence operations, including surveillance of members of the Trump team. 

It is suspected that Deripaska, thought to be a “backchannel” top Putin, brought Manafort’s briefings with him. After a report by the Washington Post asserted Manafort’s offer to provide the documents, Deripaska told CNN it was “fake news,” while his spokesman told AP in an email “These scandalous and mendacious assumptions are driven by sensationalism and we totally refute these outrageous false allegations in the strongest possible way.”

Manafort allegedly offered Deripaska the private briefings on Jul. 7, 2016. The yacht trip allegedly took place over three days from Aug. 6. Less than two weeks later, Manafort resigned from the campaign under heavy scrutiny of his ties to pro-Russian Ukrainian oligarchs. Manafort has since been charged by special counsel Robert Mueller with twelve crimes, including a conspiracy against the United States. –Quartz

According to Vashukevich’s Instagram account, she was in Dubai when Navalny’s video came out, after which she traveled to Thailand to participate in the $600 per person five-day sex seminar for Russian tourists. 

A video from a Thai morning news broadcast showed the police operation. Some of those detained were working without a permit, one of the TV hosts said. “Why do they have to use Thailand to teach this course?” he added. –WaPo

Vladimir Sosnov, a Russian Embassy consul, told RIA Novosti Russian state news that Vashukevich and others were detained for their participation in an “illegal training session,” and that she would be put on trial and deported along with her companions. 

Vashukevich claims that she was arrested on the orders of Russian officials as retribution for her video of Prikhodko and Deripaska – and that she expects to be jailed, or killed, upon her return.

“Please USA save us from Russia!” read a post in English from Vashukevich’s Instagram account. “All this cases are political repressions!”

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

In The Wake Of Oxfam’s Sex Scandal, Has “Humanitarian Aid” Become A Euphemism For Oppression

Submitted by Disobedient Media

The latest Oxfam sex abuse scandal does not exist in a vacuum. It is not the first time that aid groups have been accused of sexual misconduct towards the very people the entities purport to protect, and without significant change, it will not be the last time that such allegations emerge. The current debacle began with the revelation of sexual abuses by Oxfam’s Country Director in Haiti after the 2010 earthquake devastated the island nation. The allegations eventually led to the expulsion and banning of Oxfam Great Britain from the country.

Reuters reports that Oxfam’s former country director in Haiti, Roland Van Hauwermeiren, admitted to using prostitutes at his residence during a relief mission before resigning in 2011. CNN wrote that Oxfam had published an internal report acknowledging that three staff members also “physically threatened and intimidated” a witness during an internal investigation into the issue. The New York Times discussed Haiti’s decision to ban Oxfam Great Britain from operating in the country. 

Additionally, a UNICEF consultant and child rights activist recently pled guilty to raping a child under 16, raising further questions about the essential nature of charity work. Any discussion of Oxfam or Newell’s misconduct must recognize the history in which such scandals are situated.

Such abuses have proven all-too-pervasive over the preceding decades, with Disobedient Media’s William Craddick, breaking coverage of the Clintons’ efforts on behalf of Laura Silsby. Craddick reported on Silsby’s illegal attempt to traffic Haitian children in the aftermath of the same 2010 earthquake that has become the setting of the Oxfam debacle, as well as the Clintons’ apparent efforts to intercede on Silsby’s behalf.

Many other independent voices have reported allegations of severe impropriety in the Clinton’s conduct in Haiti, especially in reference to the infamous Clinton Foundation.

In April last year, Disobedient Media also wrote regarding historical abuses tied to the United Nations, noting that the U.N. has faced accusations of sex crimes for decades, ranging from rape and abuse of women and minors in war zones to participation in human trafficking, prostitution and even production of child pornography involving senior U.N. officials and members of foreign governments.

Additionally, Disobedient Media described allegations of child and organ trafficking that emerged in the aftermath of disasters in locations including Haiti, Chad and the Balkans. This author’s report on the matter ultimately queried: “…If this is what was caught, what abuses are occurring that we do not catch?” In light of the latest series of abuse allegations, the unfortunate answer appears to be, “far too much.”

The question as to whether minors were also sexually abused by Oxfam staff remains open-ended. Oxfam’s 2011 reportindicated that: “None of the initial allegations concerning fraud, nepotism, or use of underage prostitutes was substantiated during the investigation, although it cannot be ruled out that any of the prostitutes were under-aged.” In all, seven Oxfam employees have been terminated in relation to the incident. ABC News reported allegations that some of the prostitutes involved with Oxfam staff were minors.

This is not the first time that a member of Oxfam would be swept up in a highly publicized sex abuse scandal. British press reports indicate that Caroline Thomas, who became Chair of Oxfam in 2016, previously served as an executive at BBC during the emergence of the Jimmy Saville sexual abuse fiasco that deeply tarnished the reputation of the BBC.

Some press reports imply that abuses perpetrated by Oxfam staff were much worse than what was officially documented in the now-public 2011 report, citing age of those involved as a particular concern. That abuses against minors cannot be confirmed or denied in the case is disconcerting, considering well-documented sexual abuses of children in Haiti by UN peacekeepers and others. 

Since the scandal’s emergence, Oxfam has faced the cessation of financial support from thousands of individual donors and even public funds. The Associated Press reports that: “British government… suspended new funding to Oxfam’s British affiliate. Oxfam Great Britain received 31.7 million pounds ($43.8 million) from the government in the 12 months through March 31, 2017, or about 8 percent of its revenue.”

Amira Malik Miller, a Swiss humanitarian aid worker, came forward in the wake of the Oxfam furor, discussing abuses tied to Roland Van Hauwermeiren with Hardtalk. Miller described witnessing abuses in Liberia in 2004 while working for a British charity, Merlin, where Roland Van Hauwermeiren served as the Country Director. Despite Miller having lodged an official complaint with the charity, Van Hauwermeiren was able to gain employment with other aid groups before finally being exposed in relation to abuses in Haiti while working for Oxfam.

Roland Van Hauwermeiren’s ability to easily gain employment with successive aid groups after Miller’s 2004 complaint suggest a troubling degree of leniency towards sexual abuse in aid work.

Although the current outrage and funding cuts may lead to increased accountability for Oxfam, it does nothing to address the larger problems posed by an amorphous industry of aid groups. If an ample supply of tax-payer funding continues, absent any drastic transparency or accountability measures, the same abuses will inevitably continue ad infinitum.

The heart of the problem is that non-governmental organizations are by definition unaccountable to the public that funds them and impervious to those they ‘serve,’ as humanitarian groups operate amongst devastated populations with near impunity. For Peacekeepers and those affiliated with the United Nations, diplomatic immunity prevents the tiniest a shred of accountability, even in cases of the most heinous sex crimes.

That Oxfam and similar organizations receive sizable government funding while unaccountable to the public represents an existential problem for all NGO’s, charities, and “humanitarian” efforts. As the situation stands, a total lack of transparency creates an environment ripe for abuses of the worst kind.

Oxfam was not the only humanitarian organization to be implicated in recent weeks. The Guardian wrote that Mercy Corp and other charities were also linked to Haitian case, writing that a spokeswoman for Mercy Corps had confirmed the involvement of an individual who worked for Mercy Corp between July 2015 to November 2016.’

The European press reports noted that this was not the first time Mercy Corp had been associated with sex abuse accusations, writing: “A similar but separate issue surfaced last year after Mercy Corps, another EU-funded NGO, publicly announced that it was investigating allegations of sexual misconduct by two of its staff on the Greek island of Lesbos.”

Disobedient Media previously reported on the involvement of Mercy Corp and other groups in Haiti, in an article covering special interest-tied micro-finance and reinsurance groups that used the devastating cholera outbreak caused by UN peacekeepers to profit. The piece noted that groups who appear for all intents and purposes to be aimed at “aiding” Haitians reaped a sizable profit from the instigation of “microloans” and “reinsurance programs,” descending on the Haitian populous before basic sanitation had been instigated.

This author’s previous report explained that microfinancers and re-insurers involved in Haiti in the wake of the 2010 earthquake and the secondary cholera epidemic included Swiss Re, Fonkoze, and Mercy Corp, all of whom partnered with the Clinton Global Initiative to create the Microinsurance Catastrophe Risk Organization (MiCRO). Mercy Corp is Chaired by Linda A. Mason, who also co-founded Bright Horizons, a large child care organization that has previously operated in Haiti with Mercy Corp.

Despite describing itself as a tax-exempt 501(c) charity, Mercy Corp runs a microfinance portfolio including 1,351,511 disbursed loans worth over $1.40 billion, with total assets worth $435.3 million. It seems remarkable that a tax-exempt charity would also found a number of banks, including Bank Andara, Asian Credit Fund, the Agency for Finance in Kosovo, IMON International, Kompanion Financial Group LLC, Partner Microcredit Organization, XacBank and Mercy Corp Northwest.

Mercy Corp’s founding role in banking institutions and engagement in micro-lending may seem like a digression from the core issues discussed in this article. However, the charity’s involvement with for-profit Microfinance operations and the founding of numerous banks as a 501 (c) charity raises serious questions regarding the potential for financial predation by NGO’s against the most vulnerable. Microfinance has been linked to the suicide of dozens of farmers in India, with local press reports describing Microfinance as: “No better than moneylenders [who] have so far been able to operate under the pious garb of poverty eradicators.”

This accusation appears to be borne out, with interest rates on these tiny loans often skyrocketing above the advertised 10% flat rate, reaching as high as 40%. Indian press reports describe the consequences: “The result is a (hidden) final rate of interest of 24-30%, or even higher for the poor who can barely afford a square meal a day.”

Masked in the guise of of aid, parasitic “aid” groups are converting populations in severe distress into a new market of debt slaves and earning massive – tax exempt – profit in the bargain. This new vampirism even has a feel-good label: “Financial Inclusion.” In some cases, press reports indicate that poverty-stricken farmers have resorted to selling their organs to pay off mounting debts. Business Insider described the issue:

“Reports of usurious interest rates being charged to desperate borrowers came to light amidst mounting criticism of the high-handed tactics employed by loan officers to collect monthly installments. Collective defaults by entire villages were reported around the world. Most disturbingly, in the Indian state of Andhra Pradesh, a hotbed of microfinance lending, dozens of suicides occurred among borrowers under pressure from large micro-lenders, forcing the state to clamp down on the exorbitant interest rates. Recent studies have found microfinance to have had zero impact on poverty alleviation.”

Additional press reports have gone so far as to pose the question: “Is Microfinance pushing the world’s poorest even deeper into poverty?” In other words, much like the sexual abuses revealed to have taken place at the hands of Oxfam staff in Haiti, “charitable” organizations also take financial advantage of vulnerable populations. This is a crucial point, because it removes the smiling veneer from humanitarian work, exposing it as opportunism of the worst sort.

One could go so far as to observe that modern aid work far too often resembles a reincarnation of the same colonizing spirit that patronized even as it laid waste to entire communities and robbed countless indigenous cultures over the bloody course of previous centuries.

Adding to all of this, Disobedient Media previously reported former French Foreign Minister Bernard Kouchner’s role as head of the United Nations Interim Administration Mission in Kosovo (UNMIK), as well as a founder of the charity ‘Doctors Without Borders.’ That Kouchner straddled the dual roles in the United Nations as well as a charity makes him particularly relevant, especially in light of his ardent defense of convicted pedophile Michael Sounalet.

Sounalet had served with Doctors Without Borders after serving part of a lengthy sentence for armed robbery, participating in “humanitarian efforts” in locations including Rwanda, where he “looked for survivors of the families of two hundred orphans.” Sounalet organized the placement of those children, and photographed them. In French Press, Sounalet appears to describe having a “crush” on the children he photographed.

Remarkably, instead of condemning Sounalet after allegations of child sex abuse emerged against the aid worker, Kouchner staunchly defended the accused in court. Kouchner had previously gone so far as to call Sounalet’s work a “model for international bodies.” That such a prominent figure in the United Nations, French politics and charity work would praise a pedophile and convicted armed robber as a “model” for humanitarian work speaks to an endemic culture of abuse in “aid” organizations.

screenshot of newspaper clipping

Simultaneous with the ongoing Oxfam debacle, press reports also indicate that former UNICEF consultant Peter Newell has admitted to five indecent and serious sexual assaults on a child under 16, and was sentenced to six years, eight months in prison. BBC explained that Newell is also the former coordinator of the “Association for the Protection of All Children,” and that in 2007, he co-authored the Implementation Handbook for the Convention on the Rights of the Child for UNICEF.

This is not the first time UNICEF has been tied to sexual abuse of children. Disobedient Media previously reported on a particularly infamous scandal that unfolded in the 1980’s, in which the operation of a child porn and child trafficking operation was discovered to have been run from the basement of the UNICEF building in Brussels, Belgium. Members of the establishment were charged in association with the abuses, including one unnamed individual with purported ties to the intelligence community.

A report from The Guardian published in 1987 indicated that the Director of the national committee of UNICEF was charged with “offenses involving what police suspect is an international child prostitution ring.” The Guardian observed:

“The Belgian authorities have suggested a link between the Brussels operation and similar organizations in the US and Japan, as well as several other European countries involving children aged between four and twelve. The Government was highly embarrassed by the news that a former Justice Ministry official, Philippe Carpentier, was one of those arrested, together with a close associate, a top government official, working on highly sensitive anti-terrorist legislation.”

Ultimately, thirteen individuals were arrested in connection with the UNICEF scandal. Of particular note was the relationship between the UNICEF ring and the previously mentioned government official who was described as working on “highly sensitive anti-terrorist legislation.”

The Glasgow-Herald described the same network: “A Belgian professor who was involved in a world-wide child pornography scandal has hanged himself in prison… Prof. Mulatin was connected with a vast ring of pedophiles in Europe, America, Japan and Africa. They were supplied from Brussels with photographs of children engaged in sexual acts with adults. Some were taken in the basement of a building used by the United Nations children’s organisation Unicef in Brussels. Police have arrested Michel Felu, 45, the building’s caretaker, and Unicef’s Director in Belgium, Jozef Verbeeck, 63.”

The New York Times also reported on the 1987 Brussels outrage, publishing an article titled: “Child sex scandal roils UNICEF unit.” The outlet wrote: “UNICEF said it was investigating charges that the Belgian committee was linked to an organization producing pornographic photographs of children and distributing them throughout Europe.”

Adding to this grotesque image of non-governmental organizations, is the previously reported testimony of Greg Bucceroni to Disobedient Media. Greg described in detail the harmful role played by philanthropic organizations in Philadelphia during the 1970’s and 1980’s. He recounted the methods by which multiple organizations were used by well-connected pedophiles to access vulnerable youth under the guise of helping them. Instead of providing a  haven for troubled youth, such organizations provided easy access to predators who could then abuse children without consequence.

The sexual abuse of children and adults by apparently respectable charitable and nongovernmental groups is a longstanding issue, and one that stretches back decades. Part of the blame for a pervasive lack of oversight lays at the feet of an amnesiac press that fails to connect successive scandals to a poisonous tolerance of abuse amongst aid groups, NGO’s and the United Nations.

The most recent abuses of Oxfam and Newell of UNICEF represent a decades-old trend that appears doomed to repeat itself unless substantial action is taken to make sure such organizations are accountable to the public. Aid groups can no longer be approached as universally positive affairs, and must be analyzed with as much skepticism as applies to any group that interferes with the populations of a sovereign nation. Under the banner of aid, the worst varieties of post modern colonialism, child abuse and even human trafficking are too easily ignored or excused.

Unless fundamental changes are made, a terminal lack of transparency combined with the massive power imbalance in aid work will lead to endless repetitions of financial and sexual abuses by members of charities that take advantage of the most vulnerable under cover of chaos.

via Zero Hedge http://ift.tt/2EZs97N Tyler Durden

Why Central Banks Are So Scared Of Cryptocurrencies?

Authored by Alex Deluce via GoldTelegraph.com,

The ever-growing potential of digital currencies, otherwise known as cryptocurrencies, have the world’s central banks spinning.

The security issues are of prime concern, especially after a $500-million security breach in Japan, and the possibility of volatile swings in the price of unregulated cryptocurrencies.

The second most prominent reason why central banks around the world are not happy about cryptocurrencies is the way it allows people to transact by storing value in the form of decentralized digital currencies.

The Federal Reserve Bank hasn’t jumped on the cryptocurrency bandwagon yet. According to Chair of Federal Reserve, Jerome Powell, technical issues and risk management will present a challenge and is best left to the private sector. However, future policy plans are not out of the question either.

The European Central Bank has been equally unimpressed, linking Bitcoin with unstable currency fluctuation, tax evasion, and other crimes. At this point, the ECB does not see cryptocurrency as a threat to their monopoly, but it’s unclear if and when this attitude might change in the future. However, it’s interesting to note that although the central bank is pushing this rhetoric to the public, they are constantly exploring ways to eliminate cash and centralize this monetary structure preventing people from choosing alternative currencies.

Japan is still ruled by the cash. While credit cards are acceptable, many huge financial transactions are still being conducted in paper money. The Japanese have an innate distrust of debt. Moreover, cash transactions are more difficult for the government to track. For the time being, Japanese are considering cryptocurrencies such as Bitcoin, only as a way of investment rather than a method of payment. However, the Japanese government did take note of the recent $500 million theft of digital currency from Tokyo’s CoinCheck, Inc. At the moment, there are no plans from the Japanese government to issue any form of cryptocurrency. However, Japanese people stockpiling cash due to draconian negative interest rates might be serving as the catalyst for their interest in the digital currency. In fact, the country is becoming one of the biggest markets for cryptocurrency with 40% of the Bitcoin trading from October to November 2017 being conducted in Yen.

Germany is another cash-friendly country. The Deutsche Bundesbank is wary of the Bitcoin’s speculative nature and is hesitant to include cryptocurrency in its established business model. However, the bank has shown interest in developing cryptocurrency technology into a payment system. This interest makes sense as Berlin is dubbed “Bitcoin Capital of Europe.” Germans enjoy dealing in Bitcoins from buying real estate and booking holidays to dining in bars and paying for education. Hence, the shift in Germany towards cryptocurrency is quite evident.  

One central bank paying positive attention to cryptocurrencies is the Bank of England. It is investigating the technology for protection from cybercrimes and improvement in the speed of digital payment methods between buyers and sellers. However, the Bank of England is not currently considering introducing its own cybercurrency.

The Bank of Russia has called cryptocurrency a pyramid scheme. It intends to block relevant websites that may enable its citizens to invest in Bitcoin. Russia has declared cryptocurrency illegal even though President Putin’s internet ombudsman, Dmitry Marinichev, is currently building, what’s called the Russian Mining Center that has raised $53 million to-date.

The National Bank of Poland went overzealous with its attempts to discourage its people from using cryptocurrency. The bank paid a YouTube star more than $25,000 to talk about buying fake cryptocurrency and losing it all in a crash. The aim is to warn the public about the potential risks of digital currency. The site has had over half a million viewers and this is the only central bank backing a popular video site in its campaign to highlight its message. As a result, several potential investors stepped back and opted not to invest in the digital currencies.

The central banks around the world are adopting the same attitude of caution by warning their citizens but still studying the potential of the cryptocurrencies for the future. No bank can ignore cryptocurrencies due to the rapid interest and adoption from a significant majority.

Blockchain, the technology driving Bitcoin, is regarded as the means to safely and effectively transfer funds on a global scale in a decentralized manner.

While many US banks see cryptocurrency as a risky investment, Rainer Michael Preiss of Taurus Wealth Advisors views this investment as an alternative to the lack of transparency inherent in many banking transactions.  According to Preiss, major banks feel threatened by blockchain’s open transparency, as each transaction is available for you to view.

Central banks are clearly interested in the potential of blockchain technology but are unhappy about a currency not within their control.

That, in a nutshell, could be the real issue.

The possibility of a viable, quick, and transparent monetary technology outside the control of the massive central banking system is making these bankers nervous.

It could diminish their almost boundless powers.

From the viewpoint of the central banks, the only possible solution is to eventually issue their own cryptocurrency and control it.    

via Zero Hedge http://ift.tt/2GQ0QcF Tyler Durden

Silver Hits Key Support Amid Hedge Fund Exodus

While the dollar is down around 3% year-to-date, not all dollar-denominated assets are rallying and in fact, silver is now the biggest loser among the precious metals.

Palladium’s recent resurgence has pushed it back above silver for the year (though still in the red) as Gold and Platinum remain in the green for the year.

All of this has happened as hedge funds have abandoned their long positions in silver. As Bloomberg points out, hedge funds and other large speculators cut their long position in silver futures and options for a sixth straight week in the longest string of declines since August 2014.

Notably, the net speculative positioning across silver futures and options is near its lowest level in 20 years…

All of which might be useful timing as Silver is back at a historically important level of cheapness relative to Gold…

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